[G.R. No. 165142. December 10, 2007.

]
EDUARDO L. RAYO, petitioner, vs. METROPOLITAN BANK AND TRUST COMPANY and BRANCH 223 OF THE
REGIONAL TRIAL COURT OF QUEZON CITY,respondents.
DECISION
QUISUMBING, J p:
Before us is a petition for review assailing the Resolutions dated June 15, 2004 1 and August 23, 2004 2 of the Court of Appeals
in CA-G.R. SP No. 83895 for annulment of judgment.
The pertinent facts are undisputed.
Midas Diversified Export Corp. (Midas), thru its president, Mr. Samuel U. Lee, obtained six (6) loans from private respondent
Metropolitan Bank and Trust Company (Metrobank), amounting to P588,870,000 as evidenced by promissory notes. To secure
the payment of an P8,000,000 loan, Louisville Realty & Development Corporation (Louisville), thru its president, Mr. Samuel U.
Lee, executed in favor of Metrobank, a real estate mortgage over three parcels of land situated at No. 40 Timog Ave., Brgy.
Laging Handa, Quezon City, with all the buildings and improvements thereon. The properties are covered by Transfer
Certificates of Title (TCT) Nos. N-163455, N-166349 and N-166350 issued by the Registry of Deeds of Quezon City.
When the debtor-mortgagor failed to pay, Metrobank extra-judicially foreclosed the real estate mortgage in accordance with
Act No. 3135, 3 as amended. Thereafter, in a public auction, Metrobank was the highest bidder. A Certificate of Sale 4 dated
December 11, 2000 was duly registered with the Registry of Deeds of Quezon City on December 13, 2000. When Louisville
refused to turn over the real properties, on March 17, 2001, Metrobank filed before the Regional Trial Court (RTC), Branch 223,
Quezon City, an ex parte petition 5 for the issuance of a writ of possession docketed as LRC Case No. Q-13915(01). After
presentation of evidence ex parte, the RTC granted the petition in an Order 6 dated July 5, 2001, the dispositive portion of
which reads as follows: HTAIcD
WHEREFORE, in consideration of the foregoing premises, the instant petition is hereby GRANTED. Upon the
filing of a bond in the amount of ONE HUNDRED THOUSAND PESOS ([P]100,000.00), let a Writ of Possession
over the properties covered by Transfer Certificates of Title Nos. N-163455, N-166349 & N-166350 issue in
favor of the petitioner METROPOLITAN BANK & TRUST COMPANY to be implemented by the Deputy Sheriff
of Branch 223, Regional Trial Court of Quezon City by placing the petitioner in possession over the parcels of
land with all its improvements.
SO ORDERED. 7
On September 24, 2001, Metrobank posted the required bond. Consequently, a writ of possession was issued on October 9,
2001. This was partially implemented as to TCT No. N-163455, as evidenced by the Turn-Over Receipt 8 dated December 13,
2002. The writ over the two remaining properties, under TCT Nos. N-166349 and N-166350, were subsequently implemented as
evidenced by the Turn-Over Receipt 9 dated December 3, 2003.
Meanwhile, on April 3, 2002, petitioner Eduardo L. Rayo filed a complaint 10 docketed as Civil Case No. Q02-46514 against
Metrobank for Nullification of Real Estate Mortgage Contract(s) and Extrajudicial Foreclosure Sale, in the RTC, Branch 99,
Quezon City.
On May 13, 2004, petitioner Rayo filed with the Court of Appeals a Petition 11 for Annulment of Judgment on the ground of
"absolute lack of due process." Petitioner alleged that his predecessor, Louisville, was not notified of the proceedings and that
Section 7 12 (ex parte motion or petition for the issuance of a writ of possession) of Act No. 3135 is unconstitutional.
On June 15, 2004, the Court of Appeals denied the petition for lack of merit. The Court of Appeals ruled that petitioner is neither
the registered owner nor the successor-in-interest of the registered owner; hence, not a real party-in-interest. It also ruled that
there is no basis to challenge the constitutionality of Section 7 of Act No. 3135, as amended as it constitutes a collateral attack
against said provision. Further, petitioner availed of the wrong remedy in filing Civil Case No. Q02-46514. Petitioner sought
reconsideration, but was likewise denied.
Petitioner now comes before us raising the following as primary issue:
WHETHER OR NOT SECTION 7 OF ACT NO. 3135 IS CONTRARY TO THE DUE PROCESS PROVISION OF THE
PHILIPPINE CONSTITUTION CONSIDERING THAT SUCH SECTION 7 OF THE LAW PROVIDES OR ALLOWS,
ACCORDING TO THIS HONORABLE COURT, FOR AN EX-PARTE PROCEEDING WHICH IS A "JUDICIAL
PROCEEDING BROUGHT FOR THE BENEFIT OF ONE PARTY ONLY, AND WITHOUT NOTICE TO, OR CONSENT
BY ANY PERSON ADVERSELY INTERESTED" "OR A PROCEEDING WHEREIN RELIEF IS GRANTED WITHOUT
AN OPPORTUNITY FOR THE PERSON AGAINST WHOM THE RELIEF IS SOUGHT TO BE HEARD," AS HELD IN
THE CASE OF GOVERNMENT SERVICE INSURANCE SYSTEM VS. COURT OF APPEALS, 169 SCRA 244 @ 255,
JANUARY 20, 1989. 13 CHcETA
He also raises the following as secondary issues:
I.
WHETHER OR NOT THE PETITIONER HAS THE LEGAL PERSONALITY TO SEEK THE ANNULMENT OF JUDGMENT
IN [THE] SUBJECT LRC CASE NO. Q-13915(01).
II.
WHETHER OR NOT PRIVATE RESPONDENT VIOLATED THE RULE AGAINST FORUM-SHOPPING WHEN IT DID
NOT INFORM THE HONORABLE BRANCH 223 OF THE REGIONAL TRIAL COURT OF QUEZON CITY REGARDING
THE FILING OF CIVIL CASE NO. Q-02-46514 FOR NULLIFICATION OF REAL ESTATE MORTGAGE CONTRACT
AND THE EXTRA-JUDICIAL FORECLOSURE SALE OF THE SAME SUBJECT REAL PROPERTIES AND THE
PENDENCY OF THE SAME BEFORE THE HONORABLE BRANCH 99 OF THE SAME REGIONAL TRIAL COURT.14
Stated simply, the issues raised are: (1) Does petitioner have the legal personality in the annulment of judgment proceedings?
(2) Is Section 7 of Act No. 3135, as amended, unconstitutional? (3) Is respondent guilty of forum-shopping?
Petitioner insists that contrary to the ruling of the Court of Appeals, he has the legal personality to institute the annulment of
judgment case against Metrobank, considering that the March 25, 2002 deed of assignment he entered into with Louisville and
Winston Linwy L. Chua makes him a co-assignee over the subject real properties.
For its part, Metrobank claims that it was not a party to the deed of assignment among Louisville, Chua and petitioner, hence, it
has no privity of contract with petitioner Rayo. Moreover, Metrobank points out that the real properties had already been
extrajudicially foreclosed when petitioner and his assignors executed the deed of assignment.
Under Section 2, 15 Rule 3 of the Rules of Court, every action must be prosecuted or defended in the name of the real party-in-
interest, or one "who stands to be benefited or injured by the judgment in the suit." 16 A real party-in-interest is one with "a
present substantial interest" which means such interest of a party in the subject matter of the action as will entitle him, under
the substantive law, to recover if the evidence is sufficient, or that he has the legal title to demand. 17 cCTESa
Now, is petitioner Rayo a real party-in-interest? Initially, we recognized herein petitioner as the co-assignee of the subject real
properties as shown in the March 25, 2002 deed of assignment. However, while petitioner would be injured by the judgment in
this suit, we find that petitioner has no present substantial interest to institute the annulment of judgment proceedings and
nullify the order granting the writ of possession.
First, there was no violation of petitioner's right to constitutional due process. In a long line of cases,18 we have consistently
ruled that the issuance of a writ of possession in favor of the purchaser in a foreclosure sale of a mortgaged property under
Section 7 of Act No. 3135, as amended is a ministerial duty of the court. The purchaser of the foreclosed property, upon ex
parte application and the posting of the required bond, has the right to acquire possession of the foreclosed property during the
12-month redemption period and with more reason, after the expiration of the redemption period.
An ex parte petition for the issuance of a writ of possession under Section 7 of Act No. 3135 is not, strictly speaking, a "judicial
process" as contemplated in Article 433 19 of the Civil Code. It is a judicial proceeding for the enforcement of one's right of
possession as purchaser in a foreclosure sale. It is not an ordinary suit filed in court, by which one party "sues another for the
enforcement of a wrong or protection of a right, or the prevention or redress of a wrong." It is a non-litigious proceeding
authorized in an extrajudicial foreclosure of mortgage pursuant to Act No. 3135, as amended, and is brought for the benefit of
one party only, and without notice to, or consent by any person adversely interested. It is a proceeding where the relief is
granted without requiring an opportunity for the person against whom the relief is sought to be heard. No notice is needed to
be served upon persons interested in the subject property. 20
Second, in the deed of assignment, petitioner also acknowledged that the subject real properties were already sold at various
extrajudicial foreclosure sales and bought by Metrobank. Clearly, petitioner recognized the prior existing right of Metrobank as
the mortgagee-purchaser over the subject real properties. 21 Actual knowledge of a prior mortgage with Metrobank is
equivalent to notice of registration 22 in accordance with Article 2125 23 of the Civil Code. Conformably with Articles
1312 24 and 2126 25 of the Civil Code, a real right or lien in favor of Metrobank had already been established, subsisting over
the properties until the discharge of the principal obligation, whoever the possessor(s) of the land might be. 26 As petitioner is
not a party whose interest is adverse to that of Louisville, there was no bar to the issuance of a writ of possession to Metrobank.
It does not matter that petitioner was not specifically named in the writ of possession nor notified of such proceedings.
Third, we also note that petitioner availed of the wrong remedy in filing Civil Case No. Q02-46514, for nullification of real estate
mortgage and extrajudicial foreclosure sale, more than six (6) months after the issuance of the writ of possession considering
the mandate of Section 8 27 of Act No. 3135, as amended. Hence, even petitioner's action for annulment of judgment cannot
prosper as it cannot be a substitute for a lost remedy. AaIDHS
Now, petitioner is challenging the constitutionality of Section 7 of Act No. 3135, as amended. He avers that Section 7 violates
the due process clause because, by the mere filing of an ex partemotion in the proper cadastral court, the purchaser in a
foreclosure sale is allowed to obtain possession of the foreclosed property during the redemption period.
The Court of Appeals ruled that petitioner's attempt to challenge the constitutionality of Section 7 of Act No. 3135, as amended,
constitutes a collateral attack that is not allowed. We fully agree with the appellate court's ruling. For reasons of public policy,
the constitutionality of a law cannot be attacked collaterally. 28
With regard to forum-shopping; forum-shopping is 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. It exists where the elements
of litis pendentia are present or where a final judgment in one case will amount to res judicata in another. 29 The issuance of
the writ of possession being a ministerial function, and summary in nature, it cannot be said to be a judgment on the merits. It is
only an incident in the transfer of title. Hence, a separate case for annulment of mortgage and foreclosure sale cannot be barred
by litis pendentia or res judicata. 30Clearly, insofar as LRC Case No. Q-13915(01) and Civil Case No. Q02-46514 are concerned,
Metrobank is not guilty of forum-shopping.
WHEREFORE, the petition is DENIED for lack of merit. The assailed Resolutions dated June 15, 2004 and August 23, 2004 of the
Court of Appeals in CA-G.R. SP No. 83895 are hereby AFFIRMED. Costs against the petitioner.
SO ORDERED.
Carpio, Carpio-Morales, Tinga and Velasco, Jr., JJ., concur.
 [G.R. No. 154745. January 29, 2004.]
COMMISSIONER ANDREA D. DOMINGO, BUREAU OF IMMIGRATION, petitioner,vs. HERBERT MARKUS
EMIL SCHEER, respondent.
DECISION
CALLEJO, SR., J p:
This is a petition for review under Rule 45 of the Rules of Court, as amended, of the Decision 1 of the Court of Appeals in CA-G.R.
SP No. 71094 granting the respondent's petition for certiorari and prohibition annulling the order of arrest issued by the
petitioner, and permanently enjoining her from deporting the respondent from the Philippines. Through its decision, the CA
virtually reversed the Summary Deportation Order 2 of the Board of Commissioners (BOC) and its Omnibus Resolution 3 denying
the respondent's Urgent Motion for Reconsideration of said Order, and enjoining the petitioner from deporting the respondent.
The facts as culled from the records are as follows:
Respondent Herbert Markus Emil Scheer, a native of Ochsenfurt, Germany, was a frequent visitor of the Philippines. On July 18,
1986, his application for permanent resident status was granted. 4The Bureau of Immigration and Deportation (BID) issued in
favor of the respondent Alien Certificate of Registration No. B-396907 dated September 16, 1987 5 and Immigration Certificate
of Residence No. 256789 dated February 24, 1988. 6 The Commissioner stated that the granting of the petition would redound
to the benefit of the Filipino people. 7 During his sojourn in the Philippines, the respondent married widowed Edith delos
Reyes 8 with whom he had two daughters. They had a son, Herbert Scheer, Jr., but he passed away on November 13,
1995. 9 They resided in Puerto Princesa City, Palawan, where the respondent established and managed the Bavaria Restaurant.
On May 21, 1991, he was appointed Confidential Agent by then NBI Director Alfredo S. Lim. 10
In a Letter dated June 29, 1995, Vice Consul Jutta Hippelein informed the Philippine Ambassador to Bonn, Germany, that the
respondent had police records and financial liabilities in Germany. 11
The Department of Foreign Affairs received from the German Embassy in Manila Note Verbale No. 369/95 dated July 26, 1995,
informing it that the respondent was wanted by the German Federal Police; that a warrant of arrest had been issued against
him; and that the respondent will be served with an official document requesting him to turn over his German passport to the
Embassy which was invalidated on July 2, 1995. 12 The Embassy requested the Department of Foreign Affairs to inform the
competent Philippine authorities of the matter. The BOC thereafter issued a Summary Deportation Order dated September 27,
1997. The penultimate paragraph of the Order reads:
WHEREFORE, the foregoing considered, the Board Commissioners hereby orders the following:
1. Cancellation of respondent's permanent residence visa;
2. Respondent's summary deportation and permanent exclusion from the Philippines; and
3. Inclusion of his name on the Bureau's Blacklist.
PROVIDED, however that said summary deportation should be held in abeyance in case said alien has a
pending final and executory criminal conviction where the imposed penalty is imprisonment, in which case,
he has to serve first such imposed penalty, and/or has a pending criminal, civil or administrative action and
a Hold Departure Order has been issued or that his presence in said action is indispensable. In such
instances, the alien should remain in the custody of the Bureau until his turnover to the proper authorities
in case he has to serve imprisonment or in case of pendency of civil or criminal administrative action, he
shall remain in the custody of the Bureau until such time that his pending cases shall have been decided,
terminated or settled, as the case may be, unless circumstances demand the immediate implementation of
this summary deportation.
xxx xxx xxx
SO ORDERED. 13
In issuing the said order, the BOC relied on the correspondence from the German Vice Consul on its speculation that it was
unlikely that the German Embassy will issue a new passport to the respondent; on the warrant of arrest issued by the District
Court of Germany against the respondent for insurance fraud; and on the alleged illegal activities of the respondent in
Palawan. 14The BOC concluded that the respondent was not only an undocumented but an undesirable alien as well.
When the respondent was apprised of the deportation order, he forthwith aired his side to then BID Commissioner Leandro T.
Verceles. The Commissioner allowed the respondent to remain in the Philippines, giving the latter time to secure a clearance
and a new passport from the German Embassy. 15 Then Presidential Assistant Teodorico K. Imperial wrote a Testimonial dated
November 24, 1995, in behalf of the respondent addressed to Commissioner Verceles. Nonetheless, the respondent, through
counsel, filed on December 5, 1995 an Urgent Motion for Reconsideration of the Summary Deportation Order of the BOC. 16 In
his motion, the respondent alleged, inter alia, that: AcSHCD
1. The elementary rules of due process require notice and opportunity to be heard before a person can be
lawfully deprived of his right (Ute Paterok vs. Bureau of Customs, 193 SCRA 132). In the instant case,
although it is acknowledged that the Honorable Office may conduct summary deportation proceedings,
respondent was not given notice and opportunity to be heard before said Summary Deportation Order was
issued. Respondent's right to procedural due process was therefore violated. Consequently, the Summary
Deportation Order is invalid.
2. In issuing, the Summary Deportation Order, this Honorable Office relied on Note Verbal No. 369/95 issued
by the Embassy of the Federal Republic of Germany, Manila, notifying the Department of Foreign Affairs and
this Honorable Office about the warrant of arrest against respondent for alleged illegal insurance fraud and
illegal activities. However, a close scrutiny of said note verbal shows that nowhere therein does it state that
respondent was involved in insurance fraud or in any kind of illegal activities in Germany or anywhere else in
 the world, such as in Palawan. Therefore, the main basis of the Summary Deportation Order is incompetent
as evidence against respondent who is, like every Filipino, presumed to be innocent until his guilt is proven
beyond reasonable doubt.
3. The power to deport alien is a police power measure necessary against undesirable alien whose presence
in the country is injurious to the public good and domestic tranquility of the country (Board of Commissioner
Commission on Immigration vs. De la Rosa, 197 SCRA 853). It is respectfully submitted that respondent is
not an undesirable alien. He has stayed in the Philippines for more or less than (10) years. He has married a
Filipina and has three (3) minor children. He has established his business in Palawan and he has no police
record whatsoever. Respondent has considered the Philippines his second home and he has nowhere else to
go back to in Germany. Under the circumstances and for humanitarian considerations, respondent is not an
undesirable alien whose deportation is warranted. Likewise, the mere fact that his passport was not
renewed by the German Embassy does not also automatically justify the deportation of respondent. 17
However, the BOC did not resolve the respondent's motion. The respondent was neither arrested nor deported.
Meanwhile, on February 15, 1996, the District Court of Straubing rendered a Decision dismissing the criminal case against the
respondent for physical injuries. 18 The German Embassy in Manila, thereafter, issued a temporary passport to the respondent.
In a Letter dated March 1, 1996, the respondent informed Commissioner Verceles that his passport had been renewed following
the dismissal of the said criminal case. He reiterated his request for the cancellation of the Summary Deportation Order dated
September 27, 1995 and the restoration of his permanent resident status. 19 Subsequently, on March 12, 1996, the German
Embassy issued to the respondent a regular passport, to expire on March 11, 2006.
The BOC still failed to resolve the respondent's Urgent Motion for Reconsideration. Commissioner Verceles did not respond to
the respondent's March 1, 1996 Letter. The respondent remained in the Philippines and maintained his business in Palawan. On
March 20, 1997, the Department of Labor and Employment approved his application for Alien Employment Registration
Certificate as manager of the Bavaria Restaurant in Puerto Princesa City.
In the meantime, petitioner Immigration Commissioner Andrea T. Domingo assumed office. She wrote the German Embassy and
inquired if the respondent was wanted by the German police. On April 12, 2002, the German Embassy replied that the
respondent was not so wanted. 20 At about midnight on June 6, 2002, Marine operatives and BID agents apprehended the
respondent in his residence on orders of the petitioner. He was whisked to the BID Manila Office and there held in custody
while awaiting his deportation. Despite entreaties from the respondent's wife 21 and his employees, the petitioner refused to
release the respondent. 22
Shocked at the sudden turn of events, the respondent promptly communicated with his lawyer. The latter filed with the BID a
motion for bail to secure the respondent's temporary liberty. On June 11, 2002, the respondent's counsel filed with the Court of
Appeals a petition for certiorari, prohibition and mandamus with a prayer for temporary restraining order and writ of
preliminary injunction, to enjoin the petitioner from proceeding with the respondent's deportation. 23 The respondent
(petitioner therein) alleged, inter alia, that his arrest and detention were premature, unjust, wrongful, illegal and
unconstitutional, effected without sufficient cause and without jurisdiction or with grave abuse of discretion. He asserted that
there was no speedy remedy open to him in the ordinary course of law 24 and that his Urgent Motion for Reconsideration of
the Summary Deportation Order of the BOC had not yet been resolved despite the lapse of more than six years. The respondent
averred that he was a fully documented alien, a permanent resident and a law-abiding citizen. He, thus, prayed as follows:

PRAYER
WHEREFORE, it is most respectfully prayed of this Honorable Court that:
1. Upon the filing of this Petition, this Honorable Court issue a Temporary Restraining Order to enjoin
respondent Commissioner from enforcing any order to deport petitioner;
2. After due hearing, a writ of preliminary and mandatory injunction be correspondingly issued to maintain
the status quo pending resolution of the Petition on the merits.
3. After hearing, judgment be rendered:
a) Directing and mandating respondent Commissioner and the body she heads to resolve the Motion for
Reconsideration filed in 1995, in his favor, and nullifying or suspending the implementation of any order,
oral or written, she may have issued or issue to deport petitioner; and
b) Making the injunction in petitioner's favor permanent.
Petitioner likewise prays for such other and further relief as may be deemed just and equitable in the
premises, such as directing respondent, if Herbert Scheer is deported before the matter is heard on notice,
to authorize his return. 25
The BOC ruled that its September 27, 1995 Order had become final and executory after the lapse of one year, citing our rulings
in Sy vs. Vivo, 26 and Lou vs. Vivo. 27 The BOC also held that it was not competent to reverse the September 27, 1995 Order,
citing our ruling in Immigration Commissioner vs. Fernandez. 28 It declared that the respondent may seek the waiver of his
exclusion via deportation proceedings through the exceptions provided by Commonwealth Act No. 613, 29 Section 29(a)(15),
but that his application for the waiver presupposes his prior removal from the Philippines.
In a parallel development, the respondent procured a letter from the National Bureau of Investigation (NBI) in Puerto Princesa
City certifying that he had no pending criminal record. 30 The Puerto Princesa City Philippine National Police (PNP) also issued a
certification that the respondent had no pending criminal or derogatory records in the said office. 31
Meanwhile, on June 26, 2002, the Court of Appeals issued a status quo order restraining the petitioner from deporting the
respondent on a bond of P100,000.00. 32 On July 18, 2002, the BOC issued an Omnibus Resolution dated June 14,
2002, pendente lite denying the respondent's Urgent Motion for Reconsideration, Motion for Bail/Recognizance, and the Letter
dated June 11, 2002. The decretal portion of the resolution reads:
Wherefore, in view of the foregoing circumstances, we deny the prayers of the Urgent Motion for
Reconsideration of 5 December 1995, the Motion for Bail/Recognizance dated 7 June 2002 and the Letter of
11 June 2002. Further, we hereby order the following:
1. Subject to the submission of appropriate clearances, the summary deportation order the respondent
Herbert Scheer, German, under BI Office Memorandum Order No. 34 (series of 1989) and the BOC Summary
Deportation Order of 27 September 1995;
2. Permanent exclusion of Herbert Scheer from the Philippines under C.A. No. 613, Section 40(a)(15).
3. Inclusion of the name of Herbert Scheer in the Immigration Black List; and
4. Forfeiture of the bail bond, if any, of Herbert Scheer under C.A. No. 613, Section 40(a)(15).
xxx xxx xxx
IT IS SO ORDERED. 33
During the hearing of the respondent's plea for a writ of preliminary mandatory injunction before the CA on July 22, 2002, the
Office of the Solicitor General (OSG) manifested that the State had no opposition to the respondent's re-entry and stay in the
Philippines, provided that he leave the country first and re-apply for admission and residency status with the assurance that he
would be re-admitted. 34 The respondent's counsel manifested to the appellate court that he had just been informed by the
OSG of the Omnibus Resolution of the BOC dated June 14, 2002.
In her Comment on the Petition, the petitioner (the respondent therein) alleged, inter alia, the following:
1) that the BOC was an indispensable party to the petition; EaIDAT
2) the petitioner's failure to implead the BOC warranted the denial of the petition;
3) the allowance by then Immigration Commissioner Leandro Verceles for the petitioner therein to renew
his passport and secure clearances, even if proved, was not binding on the BOC;
4) the September 27, 1995 Order of the BOC was already executory when the respondent filed her petition
in the CA;
5) the German Embassy's issuance of a new passport did not legalize the respondent's stay in this country,
which became illegal on July 2, 1995 when his passport expired;
6) the respondent therein did not act with abuse of discretion in causing the arrest and detention of the
respondent based on the BOC's Summary Deportation Order; and
7) the BOC did not act with grave abuse of discretion in issuing its Summary Deportation Order and Omnibus
Resolution and such order and resolution were not mooted by the German Embassy's issuance of a
new passport in favor of the respondent.
In view of the Omnibus Resolution of the BOC, the respondent (petitioner therein) in his Memorandum prayed for the
nullification of the BOC's Order, as well as its Omnibus Resolution denying his Urgent Motion for Reconsideration considering
that with the issuance of a new passport, there was no more basis for his deportation, thus:
RELIEF
WHEREFORE, it is most respectfully prayed of this Honorable Court that:
1. Upon the filing of this Memorandum, this Honorable Court forthwith direct and authorize the immediate
release of petitioner, even on undersigned's recognizance, until further orders from this Honorable Court;
2. The Summary Deportation Order of September 27, 19[9]5, affirmed by respondent allegedly on June 14,
2002 and made known only yesterday, be nullified to the extent that it directs the deportation of petitioner,
who has removed the very basis of said Order of not having a valid passport, and that the Resolution of June
14, 2002 be nullified in toto; and,
3. The Temporary Restraining Order of June 26, 2002 be converted into a permanent injunction or writ of
prohibition.
Petitioner likewise prays for such other and further relief as may be deemed just and equitable in the
premises. 35
Surprisingly, the respondent's counsel received on July 24, 2003 a Letter from the petitioner dated July 16, 2002 stating that,
"the BOC was in the course of reviewing the deportation case against Mr. Scheer, and that its findings would be given in due
time." 36
On August 20, 2002, the Court of Appeals rendered a Decision in favor of the respondent granting his petition for certiorari and
prohibition and permanently enjoining the petitioner from deporting the respondent. The decretal portion of the Decision
reads:
WHEREFORE, premises considered, the petitions for certiorari and prohibition are hereby GRANTED.
Accordingly, any order, oral or written, issued by respondent Commissioner Domingo against petitioner, in
relation to his deportation, is hereby ANNULLED, and respondent Commissioner Domingo is hereby
permanently enjoined/prohibited from deporting petitioner, in so far as this case is concerned.
It is likewise ordered that petitioner be released from his confinement/detention in the Bureau of
Immigration UNLESS there is/are fresh new grounds/cases that will warrant his continued detention.
SO ORDERED. 37
The Court of Appeals ruled that the German Embassy's subsequent issuance of passport to the respondent before the BOC's
issuance of its Omnibus Resolution had mooted the September 27, 1995 Summary Deportation Order, as well as the arrest and
detention of the respondent. According to the court, it made no sense to require the respondent to leave the country and
thereafter re-apply for admission with the BOC. Furthermore, since the grounds cited by the BOC in its Summary Deportation
Order no longer existed, there was no factual and legal basis to disqualify the respondent from staying in the country.
On the issue of whether the members of the BOC were indispensable parties, the CA ruled as follows:
a) There are quite a number of cases in relevant jurisprudence wherein only the Immigration Commissioner
was impleaded to decide whether an alien may stay or be deported, such as in the case of Vivo vs. Arca (19
SCRA 878) and Vivo vs. Cloribel (22 SCRA 159).
b) In the case of Caruncho III vs. COMELEC (315 SCRA 693), it was pronounced that: "Ordinarily, the
nonjoinder of an indispensable party or the real party interest is not by itself a ground for the dismissal of
the petition. The court before which the petition is filed must first require the joinder of such party. It is the
noncompliance with said order that would be a ground for the dismissal of the petition."
thus, c) respondent may be estopped for not raising such issue earlier. 38
Aggrieved, the respondent therein, now the petitioner, through the Office of the Solicitor General, appealed to us for relief. The
petitioner contends that the Court of Appeals erred on a question of law in granting the respondent's petition in CA-G.R. SP No.
71094. 39
In support of his contention, the Solicitor General has submitted the following arguments:
I. THE WRIT OF MANDAMUS DOES NOT LIE AGAINST THE COMMISSIONER OF THE BUREAU OF
IMMIGRATION TO RESOLVE RESPONDENT'S URGENT MOTION FOR RECONSIDERATION OF THE SUMMARY
DEPORTATION ORDER, CONSIDERING THAT IT IS THE BOARD OF COMMISSIONERS, AND NOT THE
COMMISSIONER ALONE, WHICH HAS AUTHORITY TO MAKE SAID RESOLUTION.
II. THE WRIT OF CERTIORARI DOES NOT LIE AGAINST THE COMMISSIONER OF THE BUREAU OF
IMMIGRATION, CONSIDERING THAT IT IS THE BOARD OF COMMISSIONERS, AND NOT THE COMMISSIONER
ALONE, WHICH ISSUED THE SUMMARY DEPORTATION ORDER AND THE OMNIBUS RESOLUTION.
III. THE WRIT OF PROHIBITION DOES NOT LIE AGAINST THE COMMISSIONER OF THE BUREAU OF
IMMIGRATION, PROHIBITING THE IMPLEMENTATION OF THE SUMMARY DEPORTATION ORDER AND THE
OMNIBUS RESOLUTION, CONSIDERING THAT THE BOARD OF COMMISSIONERS WAS NOT IMPLEADED AS
PARTY-RESPONDENT IN THE PETITION IN CA-G.R. SP NO. 71094.
IV. ASSUMING BUT WITHOUT ADMITTING THAT THE BOARD OF COMMISSIONERS WAS PROPERLY
IMPLEADED AS PARTY-RESPONDENT IN THE PETITION IN CA-G.R. SP NO. 71094, NEVERTHELESS, THE
SUMMARY DEPORTATION ORDER AND THE OMNIBUS RESOLUTION WERE NOT ISSUED WITHOUT OR IN
EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF (SIC) EXCESS OF
JURISDICTION.ATcaID
V. FURTHER ASSUMING BUT WITHOUT ADMITTING THAT THE BOARD OF COMMISSIONERS WAS PROPERLY
IMPLEADED AS PARTY-RESPONDENT IN THE PETITION IN CA-G.R. SP NO. 71094, THE COMMISSIONER OF THE
BUREAU OF IMMIGRATION DID NOT ACT WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN IMPLEMENTING THE SUMMARY
DEPORTATION ORDER AND THE OMNIBUS RESOLUTION. 40
Elucidating on his first three arguments, the petitioner maintains that the respondent's petition forcertiorari, prohibition
and mandamus before the Court of Appeals should have been dismissed because he failed to implead the real party-in-interest
as mandated by Rule 3, Section 7 of the Rules of Court, as amended; in this case, the BOC. According to the Solicitor General,
this was a fatal procedural error. The inclusion of the BOC as respondent in the case was necessary in order that its actions
could be directly attacked and for the court to acquire jurisdiction over it. The fact that Immigration Commissioner Andrea T.
Domingo was impleaded as the sole respondent was not enough, as she is only one of the four Commissioners. Furthermore,
the assailed Orders were issued by the Board, and not by the Immigration Commissioner alone.
The respondent counters that the petitioner is already estopped from raising this issue. He argues that —
In quite a number of jurisprudence, only the Immigration Commissioner is impleaded to decide whether an
alien may stay here or not. The bottom line is petitioner, head of the Bureau of Immigration, was more than
fully heard on its institutional position, a Bureau which speaks with a single voice in this case. She is in
estoppel for not raising the issue earlier, either in a timely Comment or during the oral argument . . . 41
In Caruncho III v. Comelec, it was held that —
[O]rdinarily, the nonjoinder of an indispensable party or real party in interest is not by itself a
ground for the dismissal of the petition. The court before which the petition is filed must first
require the joinder of such party. It is the noncompliance with said order that would be a ground
for the dismissal of the petition.
But even as the Court of Appeals did not require respondent of such joinder of parties, the respondent, in
fact, begged leave, ad cautelam, in its Reply Memorandum dated July 31, 2002 to implead the Board which
speaks with a single voice anyway in this case, and therefore, no claim can be made that a valid point of
view has not been heard . . . 42
Moreover, according to the respondent, the petitioner is clearly the BID's chosen instrumentality for the relevant purpose. What
the respondent ultimately questioned are the acts or orders of the petitioner for the arrest and immediate deportation of the
respondent by way of implementing the BOC's Summary Deportation Order.
By way of reply, the Office of the Solicitor General asserted that the Summary Deportation Order and Omnibus Resolution were
collegial actions of the BOC and not of the petitioner alone. Although its Chairperson, the petitioner, is merely a member
thereof, her decisions and actions are still subject to the collective will of the majority. 43
 The Ruling of the Court
The BOC is an Indispensable Party
We agree with the petitioner's contention that the BOC was an indispensable party to the respondent's petition for certiorari,
prohibition and mandamus in the Court of Appeals. The respondent was arrested and detained on the basis of the Summary
Deportation Order of the BOC. The petitioner caused the arrest of the respondent in obedience to the said Deportation Order.
The respondent, in his Memorandum, prayed that the CA annul not only the Summary Deportation Order of the BOC but also
the latter's Omnibus Resolution, and, thus, order the respondent's immediate release. The respondent also prayed that the CA
issue a writ of mandamus for the immediate resolution of his Urgent Motion for Reconsideration. The said motion had to be
resolved by the BOC as the order sought to be resolved and reconsidered was issued by it and not by the petitioner alone. The
powers and duties of the BOC may not be exercised by the individual members of the Commission. 44
Section 7, Rule 3 of the Rules of Court, as amended, requires indispensable parties to be joined as plaintiffs or defendants. The
joinder of indispensable parties is mandatory. Without the presence of indispensable parties to the suit, the judgment of the
court cannot attain real finality. 45 Strangers to a case are not bound by the judgment rendered by the court. 46 The absence of
an indispensable party renders all subsequent actions of the court null and void. Lack of authority to act not only of the absent
party but also as to those present. 47 The responsibility of impleading all the indispensable parties rests on the
petitioner/plaintiff. 48
However, the non-joinder of indispensable parties is not a ground for the dismissal of an action.Parties may be added by order
of the court on motion of the party or on its own initiative at any stage of the action and/or such times as are just. 49 If the
petitioner/plaintiff refuses to implead an indispensable party despite the order of the court, the latter may dismiss the
complaint/petition for the petitioner/plaintiffs failure to comply therefor. 50 The remedy is to implead the non-party claimed to
be indispensable. 51 In this case, the CA did not require the respondent (petitioner therein) to implead the BOC as respondent,
but merely relied on the rulings of the Court in Vivo v. Arca, 52 and Vivo v. Cloribel. 53 The CA's reliance on the said rulings is,
however, misplaced. The acts subject of the petition in the two cases were those of the Immigration Commissioner and not
those of the BOC; hence, the BOC was not a necessary nor even an indispensable party in the aforecited cases.
The Non-joinder of an Indispensable Party
is not a Ground for the Dismissal of the Petition
The Court may be curing the defect in this case by adding the BOC as party-petitioner. The petition should not be dismissed
because the second action would only be a repetition of the first. 54 InSalvador, et al., v. Court of Appeals, et al., 55 we held that
this Court has full powers, apart from that power and authority which is inherent, to amend the processes, pleadings,
proceedings and decisions by substituting as party-plaintiff the real party-in-interest. The Court has the power to avoid delay in
the disposition of this case, to order its amendment as to implead the BOC as party-respondent. Indeed, it may no longer be
necessary to do so taking into account the unique backdrop in this case, involving as it does an issue of public interest. 56 After
all, the Office of the Solicitor General has represented the petitioner in the instant proceedings, as well as in the appellate court,
and maintained the validity of the deportation order and of the BOC's Omnibus Resolution. It cannot, thus, be claimed by the
State that the BOC was not afforded its day in court, simply because only the petitioner, the Chairperson of the BOC, 57 was the
respondent in the CA, and the petitioner in the instant recourse. In Alonso v. Villamor, 58 we had the occasion to state:
There is nothing sacred about processes or pleadings, their forms or contents. Their sole purpose is to
facilitate the application of justice to the rival claims of contending parties. They were created, not to hinder
and delay, but to facilitate and promote, the administration of justice. They do not constitute the thing
itself, which courts are always striving to secure to litigants. They are designed as the means best adapted to
obtain that thing. In other words, they are a means to an end. When they lose the character of the one and
become the other, the administration of justice is at fault and courts are correspondingly remiss in the
performance of their obvious duty.
The CA had Jurisdiction Over the Petition
for Certiorari, Prohibition and Mandamus
We do not agree with the petitioner's contention that the issue before the CA, as to the power of the President to determine
whether an alien may remain or be deported from the Philippines, is beyond the appellate court's competence to delve into and
resolve. The contention of the petitioner is based on a wrong premise.
The settled rule is that the authority to exclude or expel aliens by a power affecting international relation is vested in the
political department of the government, and is to be regulated by treaty or by an act of Congress, and to be executed by the
executive authority according to the regulations so established, except in so far as the judicial department has been authorized
by treaty or by statute, or is required by the Constitution to intervene. 59 The judicial department cannot properly express an
opinion upon the wisdom or the justice of the measures executed by Congress in the exercise of the power conferred on
it, 60 by statute or as required by the Constitution. Congress may, by statute, allow the decision or order of the Immigration
Commissioner or the BOC to be reviewed by the President of the Philippines or by the courts, on the grounds and in the manner
prescribed by law.
Article VIII, Section 1 of the Constitution has vested judicial power in the Supreme Court and the lower courts such as the Court
of Appeals, as established by law. Although the courts are without power to directly decide matters over which full discretionary
authority has been delegated to the legislative or executive branch of the government and are not empowered to execute
absolutely their own judgment from that of Congress or of the President, 61 the Court may look into and resolve questions of
whether or not such judgment has been made with grave abuse of discretion, when the act of the legislative or executive
department violates the law or the Constitution. InHarvy Bridges v. I.F. Wixon, 62 the United States Federal Supreme Court
reversed an Order of Deportation made by the Attorney General for insufficiency of evidence and for "improper admission of
evidence." In Nging v. Nagh, 63 the United States Court of Appeals (9th Circuit Court) held that conclusions of administrative
offices on the issues of facts are invulnerable in courts unless when they are not rendered by fair-minded men; hence, are
arbitrary. In Toon v. Stump, 64the Court ruled that courts may supervise the actions of the administrative offices authorized to
deport aliens and reverse their rulings when there is no evidence to sustain them. When acts or omissions of a quasi-judicial
agency are involved, a petition for certiorari or prohibition may be filed in the Court of Appeals as provided by law or by the
Rules of Court, as amended. 65
In this case, the respondent alleges that the petitioner acted arbitrarily, contrary to law and with grave abuse of discretion in
causing his arrest and detention at a time when his Urgent Motion for Reconsideration of the BOC's Summary Deportation
Order had yet to be resolved. There was no factual or legal basis for his deportation considering that he was a documented alien
and a law-abiding citizen; the respondent, thus, prayed for a writ of mandamus to compel the petitioner, the Chairperson of the
BOC, to resolve the said motion. The petition before the CA did not involve the act or power of the President of the Philippines
to deport or exclude an alien from the country. This being so, the petition necessarily did not call for a substitution of the
President's discretion on the matter of the deportation of the respondent with that of the judgment of the CA.
Irrefragably, the CA had jurisdiction over the petition of the respondent. DHACES
The BOC Committed a Grave Abuse of Discretion
Amounting to Lack or Excess of Jurisdiction
in Issuing its Summary Deportation Order
and Omnibus Resolution; The Petitioner
Committed a Grave Abuse of Her Discretion
Amounting to Lack or Excess of Jurisdiction
in Causing the Arrest and Detention
of the Private Respondent
On the Solicitor General's fourth and fifth arguments, we are convinced that the BOC committed a grave abuse of discretion
amounting to excess or lack of jurisdiction in issuing its Summary Deportation Order and Omnibus Resolution, and that the
petitioner committed grave abuse of discretion amounting to excess or lack of jurisdiction in causing the arrest and detention of
the private respondent.
The settled rule is that the entry or stay of aliens in the Philippines is merely a privilege and a matter of grace; such privilege is
not absolute nor permanent and may be revoked. However, aliens may be expelled or deported from the Philippines only on
grounds and in the manner provided for by the Constitution, the Immigration. Act of 1940, as amended, and administrative
issuances pursuant thereto. In Mejoff v. Director of Prisons, 66 we held, thus:
Moreover, by its Constitution (Art. II, Sec. 3) the Philippines "adopts the generally accepted principles of
international law a part of the law of Nation." And in a resolution entitled "Universal Declaration of Human
Rights" and approved by the General Assembly of the United Nations of which the Philippines is a member,
at its plenary meeting on December 10, 1948, the right to life and liberty and all other fundamental rights as
applied to all human beings were proclaimed. It was there resolved that "All human beings are born free
and equal in degree and rights" (Art. 1); that "Everyone is entitled to all the rights and freedom set forth in
this Declaration, without distinction of any kind, such as race, color, sex, language, religion, political or other
opinion, nationality or social origin, property, birth, or other status" (Art. 2); that "Every one has the right to
an effective remedy by the competent national tribunals for acts violating the fundamental rights granted
him by the Constitution or by law" (Art. 8); that "No one shall be subjected to arbitrary arrest, detention or
exile" (Art. 9); etc.
In this case, the BOC ordered the private respondent's deportation on September 27, 1995 without even conducting summary
deportation proceedings. The BOC merely relied on the June 29, 1995 Letter of the German Vice Consul and of the German
Embassy's Note Verbale No. 369/95 dated July 26, 1995. It issued the Summary Deportation Order on September 27, 1995
allegedly underparagraph 3 of Office Memorandum Order No. 34 dated August 21, 1989 which reads:
3. If a foreign embassy cancels the passport of the alien or does not reissue a valid passport to him, the alien
loses the privilege to remain in the country, under the Immigration Act, Sections 10 and 15 (Schonemann
vs. Santiago, et al., G.R. No. 81461, 30 May 1989). The automatic loss of the privilege obviates deportation
proceedings. In such instance, the Board of Commissioners may issue summary judgment of deportation
which shall be immediately executory.
However, as gleaned from the Summary Deportation Order, the respondent was ordered deported not only because his
passport had already expired; the BOC speculated that the respondent committed insurance fraud and illegal activities in the
Philippines and would not, thus, be issued a new passport. This, in turn, caused the BOC to conclude that the respondent was an
undesirable alien. Section 37(c) of Commonwealth Act No. 613, as amended, provides that:
No alien shall be deported without being informed of the specific grounds for deportation or without being
given a hearing under rules of procedure to be prescribed by the Commissioner of Immigration.
Under paragraphs 4 and 5 of Office Memorandum Order No. 34, an alien cannot be deported unless he is given a chance to be
heard in a full deportation hearing, with the right to adduce evidence in his behalf, thus:
4. All other cases shall be tried in full deportation hearing, with due observance of the pertinent provisions
of Law Instruction No. 39.
5. In all cases, the right of the alien to be informed of the charges against him, to be notified of the time and
place of hearing, when necessary, to examine the evidence against him, and to present evidence in his own
behalf, where appropriate, shall be observed.
The respondent was not afforded any hearing at all. The BOC simply concluded that the respondent committed insurance fraud
and illegal activities in Palawan without any evidence. The respondent was not afforded a chance to refute the charges. He
cannot, thus, be arrested and deported without due process of law as required by the Bill of Rights of the Constitution. In Lao Gi
v. Court of Appeals, 67 we held that:
Although a deportation proceeding does not partake of the nature of a criminal action, however,
considering that it is a harsh and extraordinary administrative proceeding affecting the freedom and liberty
of a person, the constitutional right of such person to due process should not be denied. Thus, the
provisions of the Rules of Court of the Philippines particularly on criminal procedure are applicable to
deportation proceedings.
It must be noted that the respondent was a permanent resident before his passport expired on July 2, 1995. In Chew
v. Colding, 68 the United States Federal Supreme Court ruled:
It is well established that if an alien is a lawful permanent resident of the United States and remains
physically present there, he is a person within the protection of the Fifth Amendment. He may not be
deprived of his life, liberty or property without due process of law. Although it later may be established, as
respondents contend, that petitioner can be expelled and deported, yet before his expulsion, he is entitled
to notice of the nature of the charge and a hearing at least before an executive or administrative tribunal.
Although Congress may prescribe conditions for his expulsion and deportation, not even Congress may
expel him without allowing him a fair opportunity to be heard.
As Mr. Justice Murphy said in his concurring opinion in Bridges v. Wixon: 69
The Bill of Rights belongs to them as well as to all citizens. It protects them as long as they reside within the
boundaries of our land. It. protects them in the exercise of the great individual rights necessary to a sound
political and economic democracy.
According to Vattal, 70 an alien who is a permanent resident in a country is a member of the new society, at least as a
permanent inhabitant, and is a kind of citizen of inferior order from the native citizens; but is, nevertheless, limited and subject
to the society, without participating in all its advantages. Sir Robert Philconse called them "de facto," though not de jure citizens
of the country of their domicile. 71
Such permanent resident 72 may be classified as a "denizen," a kind of middle state between alien and a natural-born subject
and partakes of both. Paraphrasing Justice Brewer in his dissenting opinion in Fong Yue Ting v. United States, 73 when the right
to liberty and residence is involved, some other protection than the mere discretion of the petitioner or the BOC is required. We
recall the warning of the United States Supreme Court in Boyd v. United States: 74
Illegitimate and unconstitutional practices get their first footing in that way, namely, by silent approaches
and slight deviations from legal modes of procedure. This can only be obviated by adhering to the rule that
constitutional provisions for the security of person and property should be liberally construed. A close and
literal construction deprives them of half their efficacy, and leads to a gradual depreciation of the right, as if
it consisted more in sound than in substance. It is the duty of the courts to be watchful for the constitutional
rights of the citizen, and against any stealthy encroachments thereon. Their motto should be obsta
principiis. EScAID
In sum, the arrest and detention of the respondent and his deportation under the Summary Deportation Order of the BOC for
insurance fraud and illegal activities in Palawan violated his constitutional and statutory rights to due process.
The Respondent's Arrest and
Detention was Premature,
Unwarranted and Arbitrary
We agree that the Immigration Commissioner is mandated to implement a legal and valid Summary Deportation Order within a
reasonable time. But in this case, the arrest of the respondent in his house, at near midnight, and his subsequent detention was
premature, unwarranted and arbitrary. Like a thunderbolt in the sky, the BID agents and marines arrested the respondent on
June 6, 2002, on orders of the petitioner based on the September 27, 1995 Summary Deportation Order. Under the basic
rudiments of fair play and due process, the petitioner was required to first resolve the respondent's Urgent Motion for
Reconsideration of the said Order, which was filed more than six years before or on December 5, 1995.
It may be argued that respondent's filing of an Urgent Motion for Reconsideration did not ipso factosuspend the efficacy of the
BOC's deportation order. However, such an argument cannot be sustained in this case because of the extant and peculiar
factual milieu. It bears stressing that more than six years had elapsed, from the time the Summary Deportation Order was
issued, until the respondent was finally arrested. Supervening facts and circumstances rendered the respondent's arrest and
detention unjust, unreasonable, barren of factual and legal basis. The BOC should have set the respondent's motion for hearing
to afford him a chance to be heard and adduce evidence in support thereon. It was bad enough that the BOC issued its
Summary Deportation Order without a hearing; the BOC dealt the respondent a more severe blow when it refused to resolve his
motion for reconsideration before causing his arrest on June 6, 2002.
As aforestated, the BOC ordered the deportation of the respondent after a summary proceeding without prior notice on the
following grounds: (a) the respondent's German passport had expired; (b) there was a pending criminal case for physical injuries
against him in Germany; (c) the respondent indulged in illegal activities in Palawan; (d) that in all likelihood, the respondent's
passport will not be renewed by the German Embassy as he was wanted for insurance fraud in Germany; and, (e) he was an
undesirable alien. But then, in response to the written query of no less than the petitioner herself, the German Embassy
declared that the respondent was not wanted by the German police for any crime, including insurance fraud. This could only
mean that the warrant of arrest issued by the German Federal police mentioned in Note Verbale No. 369/95 had been lifted,
and that the respondent was not involved in any illegal activities in Germany. The criminal case against the respondent for
physical injuries, which does not involve moral turpitude, was dismissed by the German District Court. Furthermore, there was
no evidence of insurance fraud against the respondent.
The BOC issued its Summary Deportation Order without affording the respondent the right to be heard on his motion and
adduce evidence thereon. It merely concluded that the respondent was involved in "illegal activities in Palawan." What made
matters worse was that the BOC indulged in sheer speculation, that the German Embassy is unlikely to issue a new passport to
the respondent. The deportation of aliens should not be based on mere speculation or a mere product of procrastinations as in
this case. As it turned out, the German Embassy re-issued the respondent's passport; he was issued a temporary passport, and,
thereafter, a regular passport, yet to expire on March 12, 2006. The petitioner cannot feign ignorance of this matter because
the respondent himself, six years before he was arrested, informed then Immigration Commissioner Verceles in a Letter dated
March 1, 1996. The respondent's letter forms part of the records of the BOC. There is no evidence on record that the
respondent committed any illegal activities in Palawan. He was even designated as special agent of the NBI, and was, in fact,
issued clearances by the PNP and the NBI no less. Despite all the foregoing, the petitioner ordered and caused the arrest and
detention of the respondent.
What is most nettlesome is the apparent antedating of the BOC Omnibus Resolution. The records show that the petitioner
sought to assuage the respondent's concern on the belated resolution of his pending urgent motion for reconsideration in a
Letter to the latter's counsel dated July 18, 2002in which the petitioner assured the respondent that the BOC will provide him of
its action on the said motion:
Dear Atty. Sagisag,
We respond to your letter of 17 June 2002 by informing you that the case of Mr. Herbert Scheer is being
evaluated by the Board of Commissioners (BOC). The BOC will provide you of the results of its collegial
action in due time.
Very truly yours,
(Sgd.) ANDREA D. DOMINGO
Commissioner 75
However, the Omnibus Resolution of the BOC was dated June 14, 2002, although on its face it was filed with the Records
Division of the BID only on July 18, 2002.
The foregoing gave reason for the CA to suspect that the Omnibus Resolution of the BOC was antedated. 76 The petition of the
respondent in the CA must have jolted the petitioner and the BOC from its stupor because it came out with its Omnibus
Resolution on July 18, 2002, which was, however, dated as early as June 14, 2002. The respondent had to wait in anxiety for the
BOC to quench his quest for justice. The BOC's wanton acts amounted to an abdication of its duty to act and/or resolve
cases/incidents with reasonable dispatch. To recall our ruling in Board of Commissioners v. De la Rosa, 77 citing Sheor
v. Bengson, 78 thus:
This inaction or oversight on the part of the immigration officials has created an anomalous situation which,
for reasons of equity, should be resolved in favor of the minor herein involved.
The petitioner and the BOC should have taken to heart the following pronouncement inCommissioner of Immigration
v. Fernandez: 79
In the face of the disclosure that Teban Caoili had been all along working in the Avenue Electrical Supply Co.
(Avesco), located at No. 653 Rizal Avenue, Manila, until his arrest, and the documentary evidence showing
that he had been issued a Philippine Passport; had regularly paid his Residence Tax Certificates (A & B), and
filed Income Tax Returns, a finding of fact is necessary whether the Commissioner really had intended to
notify Teban Caoili of the exclusion proceedings the Board had conducted in his absence. While it may be
true that the proceedings is purely administrative in nature, such a circumstance did not excuse the serving
of notice. There are cardinal primary rights which must be respected even in proceedings of administrative
character, the first of which is the right of the party interested or affected to present his own case and
submit evidence in support thereof. 80
xxx xxx xxx
Since the proceedings affected Caoili's status and liberty, notice should have been given. And in the light of
the actuations of the new Board of Commissioners, there is a necessity of determining whether the findings
of the Board of Special Inquiry and the old Board of Commissioners are correct or not. This calls for
an examination of the evidence, and, the law on the matter. 81
Apparently, the BOC did not bother to review its own records in resolving the respondent's Urgent Motion for Reconsideration.
It anchored its Omnibus Resolution only on the following: the membership of the BOC had changed when it issued its
September 27, 1995 Summary Deportation Order and under Commonwealth Act No. 613, Section 27(b); the BOC is precluded
from reversing a previous order issued by it; 82 and, the September 27, 1995 Order of the BOC had become final and could no
longer be reviewed and reversed by it after the lapse of one year. 83 However, the rulings cited by the petitioner are not
applicable in the instant case, as the said cases cited involve appeals to the BOC from the decisions of the Board of Special
Inquiry (BSI). In Sy v. Vivo 84 and Lou v. Vivo,85 we ruled that under Section 27(b) of Commonwealth Act No. 613, as amended,
the Decision of the BOC on appeal from the decision of the BSI becomes final and executory after one year:
(b) A board of special inquiry shall have authority (1) to determine whether an alien seeking to enter or land
in the Philippines shall be allowed to enter or land or shall be excluded, and (2) to make its findings and
recommendations in all the cases provided for in section twenty-nine of this Act wherein the Commissioner
of Immigration may admit an alien who is otherwise inadmissible. For this purpose, the board or any
 member thereof, may administer oaths and take evidence and in case of necessity may
issue subpoena and/or subpoena duces tecum. The hearing of all cases brought before a board of special
inquiry shall be conducted under rules of procedure to be prescribed by the Commissioner of Immigration.
The decision of any two members of the board shall prevail and shall be final unless reversed on appeal by
the Board of Commissioners as hereafter stated, or in the absence of an appeal, unless reversed by the
Board of Commissioners after a review by it, motu propio, of the entire proceedings within one year from
the promulgation of the decision. EDCcaS
In Commissioner of Immigration v. Fernandez, 86 we held that the BOC composed of new members is precluded from
reversing, motu proprio, the decision of the BOC on appeal from a BSI decision. But not to be ignored was our ruling that "at any
rate, the issue of authority should be made in accordance with the procedure established by law, with a view to protecting the
rights of individuals." 87
In this case, the Summary Deportation Order was issued by the BOC in the exercise of its authority under Office Memorandum
Order No. 34, and not in the exercise of its appellate jurisdiction of BSI decisions. There is no law nor rule which provides that a
Summary Deportation Order issued by the BOC in the exercise of its authority becomes final after one year from its
issuance, 88 or that the aggrieved party is barred from filing a motion for a reconsideration of any order or decision of the BOC.
The Rules of Court may be applied in a suppletory manner to deportation proceedings 89 and under Rule 37, a motion for
reconsideration of a decision or final order may be filed by the aggrieved party.
Neither is there any law nor rule providing that the BOC, composed of new members, cannot revise a Summary Deportation
Order previously issued by a different body of Commissioners. The BOC that issued the Summary Deportation Order and the
BOC which resolved the respondent's Urgent Motion for Reconsideration are one and the same government entity, with the
same powers and duties regardless of its membership. Similarly, an RTC judge who replaces another judge who presided over a
case may review the judgment or order of his predecessor as long as the said judgment or order has not as yet become final or
executory, The act subject of review is not the act of the judge but the act of the court.
The petitioner's contention that it failed to resolve the respondent's motion for reconsideration because of the change of
administration in the BOC was branded by the CA as flimsy, if not bordering on the absurd:
Firstly, it was issued three days (June 14, 2002) after petitioner filed this instant petition on June 11, 2002 or
almost seven years from the time the motion for reconsideration was filed;
Secondly, respondent's counsel's excuse that it took such time to resolve it because it was only later that the
motion for reconsideration was discovered because of change of administration, is flimsy, if not bordering
on the absurd; 90
The Issuance of a New and Regular Passport to the Respondent Rendered the Summary Deportation Order Moot and
Academic, and the Omnibus Resolution of the BOC Lacking in Legal Basis
We agree with the petitioner that a foreign embassy's cancellation of the passport it had issued to its citizens, or its refusal to
issue a new one in lieu of a passport that has expired, will result in the loss of the alien's privilege to stay in this country and his
subsequent deportation therefrom. But even the BOC asserted in its Summary Deportation Order that an embassy's issuance of
a new passport to any of its citizens may bar the latter's deportation, citing the resolution of this Court inSchonemann
v. Commissioner Santiago. 91
Irrefragably, Commissioner Verceles was mandated to cause the arrest of the respondent preparatory to his deportation from
the Philippines. However, there was no fixed period in the Order within which to comply with the same. The Commissioner is
not mandated to deport an alien immediately upon receipt of the BOC's deportation order. It is enough that the Commissioner
complies with the Order within a "reasonable time," which, in Mejoff v. Director of Prisons, 92 we held to connote as follows:
The meaning of "reasonable time" depends upon the circumstances, specially the difficulties of obtaining a
passport, the availability of transportation, the diplomatic arrangements with the governments concerned
and the efforts displayed to send the deportee away; but the Court warned that "under established
precedents, too long a detention may justify the issuance of a writ of habeas corpus.
In this case, the BOC had yet to act on the respondent's Urgent Motion for Reconsideration. The respondent was also given a
chance to secure a clearance and a new passport with the German Embassy. After all, the possibility that the German Embassy
would renew the respondent's passport could not be ruled out. This was exactly what happened: the German Embassy issued a
new passport to the respondent on March 12, 1996 after the German District Court dismissed the case for physical injuries.
Thus, the respondent was no longer an undocumented alien; nor was he an undesirable one for that matter.
The petitioner even admits that there is no longer a legal or factual basis to disqualify the respondent from remaining in the
country as a permanent resident. Yet, the OSG insists that he has to be deported first so that the BOC's Summary Deportation
Order could be implemented. This contention was rejected by the CA, thus:
During the hearing of petitioner's prayer for issuance of a writ of preliminary injunction before Us,
respondent's counsel from the Office of the Solicitor General had the occasion to manifest in open court
that the State has no opposition to petitioner's stay in the country provided he first leave and re-enter and
re-apply for residency if only to comply with the Summary Deportation Order of 1995. That, to Our mind,
seems preposterous, if not ridiculous. An individual's human rights and rights to freedom, liberty and self-
determination recognize no boundaries in the democratic, free and civilized world. Such rights follow him
wherever he may be. If presently, there is no factual or legal impediment to disqualify petitioner in his stay
in the country, other than allegedly those relied upon in the Summary Deportation Order of 1995 (as
hereinbefore discussed, had ceased to exist), requiring petitioner to leave the country and re-enter and re-
 apply for residency makes little sense or no sense at all, more so, in the case of petitioner who, for many
years past, had lived herein and nurtured a family that is Filipino.
Thus, opined, We, therefore, believe and hereby rule, that there is presently every reason to enjoin/prohibit
the Bureau of Immigration, respondent Commissioner Domingo in particular, from presently deporting
petitioner. 93
We agree with the Court of Appeals. The Summary Deportation Order had been rendered moot and academic upon the German
Embassy's issuance of a new passport to the respondent. The respondent had been in the Philippines as a permanent resident
since July 18, 1986, and had married a Filipino citizen, with whom he has two children. He is not a burden to the country nor to
the people of Palawan. He put up, and has been managing, the Bavaria Restaurant with about 30 employees. He has no pending
criminal case; nor does he have any derogatory record. The respondent was allowed by then Immigration Commissioner
Verceles to renew his passport and was given time to secure a clearance from the German Embassy. The respondent was able to
do so. The case against him for physical injuries was dismissed by the German District Court. Thus, the inceptual basis for the
respondent's deportation had ceased to exist.
The power to deport is a police matter against undesirable aliens, whose presence in the country is found to be injurious to the
public good. We believe that the deportation of the respondent late in the day did not achieve the said purpose. The petitioner
admitted that there is no longer a factual and legal basis to disqualify the respondent from staying in the country. He is not an
undesirable alien; nor is his presence in the country injurious to public good. He is even an entrepreneur and a productive
member of society.
Arrest, detention and deportation orders of aliens should not be enforced blindly and indiscriminately, without regard to facts
and circumstances that will render the same unjust, unfair or illegal. 94 To direct the respondent to leave the country first
before allowing him re-entry is downright iniquitous. 95 If the respondent does leave the country, he would thereby be
accepting the force and effect of the BOC's Summary Deportation Order with its attendant infirmities. He will thereby lose his
permanent resident status and admit the efficacy of the cancellation of his permanent resident visa. Moreover, his entry into
the country will be subject to such conditions as the petitioner may impose.
The deportation of an alien is not intended as a punishment or penalty. But in a real sense, it is. InBridges v. Wixon, 96 Mr.
Justice Murphy declared that the impact of deportation upon the life of an alien is often as great if not greater than the
imposition of a criminal sentence. In dealing with deportation, there is no justifiable reason for disregarding the democratic and
human tenets of our legal system and descending to the practices of despotism. As Justice Brewer opined in Fong Yue Ting
v. United States, 97 deportation is a punishment because it requires first, an arrest, a deprivation of liberty and second, a
removal from home, from family, from business, from property. To be forcibly taken away from home, family, business and
property and sent across the ocean to a distant land is punishment; and that oftentimes is most severe and cruel. It would be
putting salt on the respondent's woes occasioned by the BOC's ineptitude. Considering the peculiar backdrop and the equities in
this case, the respondent's deportation and the cancellation of his permanent resident visa as a precondition to his re-entry into
this country is severe and cruel; it is a form of punishment. aCSEcA
Our ruling in Vivo v. Cloribel, 98 has no application in this case, precisely because the factual milieu here is entirely different. In
that case, the Commissioner of Immigration required the respondents to leave the country on or before September 12, 1962,
because their stay in the country as approved by the Secretary of Justice had been cancelled. Our ruling in Bing v. Commission
on Immigration, 99 even buttresses the case for the respondent since we ruled therein that an alien entitled to a permanent
stay cannot be deported without being accorded due notice and hearing.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The Decision of the Court of Appeals is AFFIRMED.
SO ORDERED.
Puno, Quisumbing, Austria-Martinez and Tinga, JJ., concur.
 [G.R. No. 161065. April 15, 2005.]
EUFEMIO C. DOMINGO, CELSO D. GANGAN, PACASIO S. BANARIA, SOFRONIO B. URSAL, ALBERTO P. CRUZ,
MARIA L. MATIB, RACHEL U. PACPACO, ANGELO G. SANCHEZ, and SHERWIN A. SIP-AN, petitioners, vs.
HON. GUILLERMO N. CARAGUE, in his capacity as Chairman, Commission on Audit, HON. EMMANUEL M.
DALMAN and HON. RAUL C. FLORES, in their capacities as Commissioners, Commission on
Audit, respondents.
DECISION
SANDOVAL-GUTIERREZ, J p:
Judicial power is the power to hear and decide cases pending between parties who have the right to sue in courts of law and
equity. 1 Corollary to this dictum is the principle of locus standi of a litigant. He who is directly affected and whose interest is
immediate and substantial has the standing to sue. Thus, a party must show a personal stake in the outcome of the case or an
injury to himself that can be redressed by a favorable decision in order to warrant an invocation of the court's jurisdiction and
justify the exercise of judicial power on his behalf.
Assailed in this petition for certiorari is the legality of Resolution No. 2002-05 of the Commission on Audit (COA) providing for
Organizational Restructuring Plan. The above-named petitioners basically alleged therein that this Plan is intrinsically void for
want of an enabling law authorizing COA to undertake the same and providing for the necessary standards, conditions,
restrictions, limitations, guidelines, and parameters. Petitioners further alleged that in initiating such Organizational
Restructuring Plan without legal authority, COA committed grave abuse of discretion amounting to lack or excess of jurisdiction.
At this point, it is pertinent to state that the COA is a quasi-judicial body and that its decision, order or ruling may be brought to
the Supreme Court on certiorari by the aggrieved party. 2
Petitioners Eufemio C. Domingo, Celso C. Gangan, Pascasio S. Banaria are retired Chairmen, while Sofronio B. Ursal, and Alberto
P. Cruz are retired Commissioners of COA. All claim "to maintain a deep-seated abiding interest in the affairs of
COA," 3 especially in its Organizational Restructuring Plan, as concerned taxpayers.
The other petitioners are incumbent officers or employees of COA. Maria L. Matib and Angelo G. Sanchez are State Auditor III
and State Auditor II, respectively, assigned to the Cordillera Administrative Region (CAR). Prior to the implementation of the
questioned COA Organizational Restructuring Plan, they were Resident Auditors and later Audit Team Leaders. Petitioner Rachel
U. Pacpaco is a State Auditor III assigned to CAR and a Team Supervisor, while petitioner Sherwin A. Sipi-an is a State Auditor I
also assigned at the CAR. These petitioners claim that they were unceremoniously divested of their designations/ranks as Unit
Head, Team Supervisor, and Team Leader upon implementation of the COA Organizational Restructuring Plan without just cause
and without due process, in violation of Civil Service Law. Moreover, they were deprived of their respective Representation and
Transportation Allowances (RATA), thus causing them undue financial prejudice.EHaASD
Petitioners now invoke this Court's judicial power to strike down the COA Organizational Restructuring Plan for being
unconstitutional or illegal.
Initially, for our resolution is the issue of whether petitioners have the legal standing to institute the instant petition.
Petitioners invoke our ruling in Chavez v. Public Estates Authority, 4 Agan, Jr. v. Philippine International Air Terminals Co.,
Inc., 5 and Information Technology Foundation of the Philippines v. Commission on Elections 6 that where the subject matter of a
case is a matter of public concern and imbued with public interest, then this fact alone gives them legal standing to institute the
instant petition. Petitioners contend that the COA Organizational Restructuring Plan is not just a mere reorganization but a
revamp or overhaul of the COA, with a "spillover effect" upon its audit performance. This will have an impact upon the rest of
the government bodies subject to its audit supervision, thus, should be treated as a matter of transcendental importance.
Consequently, petitioners' legal standing should be recognized and upheld.
Respondents, through the Office of the Solicitor General (OSG), counter that petitioners have no legal standing to file the
present petition since following our ruling in Kilusang Mayo Uno Labor Center v. Garcia, Jr., 7 they have not shown "a personal
stake in the outcome of the case" or an actual or potential injury that can be redressed by our favorable decision. Petitioners
themselves admitted that "they do not seek any affirmative relief nor impute any improper or improvident act against the said
respondents" and "are not motivated by any desire to seek affirmative relief from COA or from respondents that would redound
to their personal benefit or gain." It is clear then that petitioners failed to show any "present substantial interest" in the
outcome of this case, citing Kilosbayan v. Morato. 8 Nor may petitioners claim that as taxpayers, they have legal standing since
nowhere in their petition do they claim that public funds are being spent in violation of law or that there is a misapplication of
the taxpayers' money, as we ruled in Dumlao v. Comelec. 9
Petitioners' reliance upon our rulings in Chavez, 10 Agan, Jr., 11 and Information Technology Foundation 12 is flawed.
In Chavez, we ruled that the petitioner has legal standing since he is a taxpayer and his purpose in filing the petition is to compel
the Public Estate Authority (PEA) to perform its constitutional duties with respect to: (a) the right of the citizens to information
on matters of public concern; and (b) the application of a constitutional provision intended to insure the equitable distribution
of alienable lands of the public domain among Filipino citizens. The thrust of the first is to compel PEA to disclose publicly
information on the sale of Government lands worth billions of pesos, as mandated by the Constitution and statutory law. The
thrust of the second is to prevent PEA from alienating hundreds of hectares of alienable lands of the public domain, thereby
compelling it to comply with a constitutional duty to the nation. We held that these matters are of transcendental public
importance. 13
In Agan, Jr., we held that petitioners have legal standing as they have a direct and substantial interest to protect. By the
implementation of the PIATCO contracts, they stand to lose their source of livelihood, a property right zealously protected by
the Constitution. Such financial prejudice on their part is sufficient to confer upon them the requisite locus standi. 14
In Information Technology Foundation, there were two reasons why petitioners' standing was recognized. First, the nation's
political and economic future virtually hangs in the balance, pending the outcome of the 2004 elections. Accordingly, the award
for the automation of the electoral process was a matter of public concern, imbued with public interest. Second, the individual
petitioners, as taxpayers, asserted a material interest in seeing to it that public funds are properly used.
Here, petitioners have not shown any direct and personal interest in the COA Organizational Restructuring Plan. There is no
indication that they have sustained or are in imminent danger of sustaining some direct injury as a result of its implementation.
In fact, they admitted that "they do not seek any affirmative relief nor impute any improper or improvident act against the
respondents" and "are not motivated by any desire to seek affirmative relief from COA or from respondents that would redound
to their personal benefit or gain." Clearly, they do not have any legal standing to file the instant suit.
We are well aware of the averments of petitioners Matib, Pacpaco, Sanchez, and Sipi-An that they were demoted and
unceremoniously divested of their previous designations as Unit Head, Team Supervisor, or Team Leader; that they were
deprived of their RATA; that they were relegated to being mere Team Members, entitled to only a reimbursable transportation
allowance; and that they were denied due process.
Such averments lack merit. Actually, they were not demoted. Under Section 11, Rule VII of the Omnibus Rules Implementing
Book V of the Administrative Code of 1987, a demotion is the movement from one position to another involving the issuance of
an appointment with diminution in duties, responsibilities, status, or rank which may or may not involve reduction in
salary. 15 A demotion by assigning an employee to a lower position in the same service which has a lower rate of compensation
is tantamount to removal, if no cause is shown for it. 16
Here, there have been no new appointments issued to Matib, Pacpaco, Sanchez, and Sipi-An under the COA Organizational
Restructuring Plan. Thus, their contention that they have been demoted is baseless.
Moreover, the change in their status from COA auditors (receiving monthly RATA) to COA auditors (receiving only reimbursable
RATA) cannot be attributed to the COA Organizational Restructuring Plan but to the implementation of the Audit Team
Approach (ATAP), pursuant to COA Resolution No. 96-305 dated April 16, 1996.
Under the ATAP, an audit team, not a resident auditor, is deployed to conduct an audit. An audit team may be composed of two
(2) or more members under an Audit Team Leader. Whenever practicable, an Audit Team Supervisor supervises at least three
(3) audit teams. The composition of an audit team is not permanent. Hence, an Audit Team Member may be designated or
assigned as an Audit Team Leader for one assignment and subsequently as a Team Member in another engagement. The
designation depends upon the position or rank of the one who is designated as an Audit Team Leader. Thus, a State Auditor III
who may have been assigned as an Audit Team Leader in one engagement may find himself relegated to being an Audit Team
Member in another engagement, if a State Auditor IV or State Auditor V is designated as the Audit Team Leader.

Pursuant to the COA Organizational Restructuring Plan, the COA issued Memorandum No. 2002-034 17 providing for the
guidelines regarding the payment of RATA, thus:
1. All holders of State Auditor IV position shall be entitled to fixed commutable RATA wherever they are
assigned.
2. Henceforth, only State Auditors IV shall be assigned as new Unit Heads or Team Leaders.
3. State Auditors below State Auditor IV assigned as Unit Heads or Team Leaders who have been receiving
fixed RATA shall continue to be designated as such and to receive the RATA until relieved of the
designation for incompetence, inefficiency, or misconduct.
All others who collect RATA on reimbursable basis, including those paid on a daily basis under COA
Resolution No. 99-007 dated June 7, 1999, are likewise entitled thereto.
Matib, Pacpaco, Sanchez, and Sipi-An are not qualified to be Audit Team Leaders or to receive fixed monthly RATA since none of
them holds the rank or position of State Auditor IV. But this does not mean that they are not entitled to receive reimbursable
RATA if they are designated as Audit Team Leaders. It is clear from the text of the said COA Memorandum that the principle of
non-diminution of benefits has been upheld. SETaHC
Thus, in the implementation of the COA Organizational Restructuring Plan, we fail to see how petitioners could have sustained
personal injury as they have not shown to have a personal stake therein. Accordingly, they are wanting in legal standing to
institute the instant petition. Corollarily, we find no reason to delve into the constitutionality or legality of the COA
Organizational Restructuring Plan.
WHEREFORE, the petition is DISMISSED. No pronouncement as to costs.
SO ORDERED.
Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Carpio, Austria-Martinez, Corona * , Carpio Morales, Callejo,
Sr., Azcuna, Tinga, Chico-Nazario andGarcia, JJ., concur.
 [G.R. No. 168979. December 2, 2013.]
REBECCA PACAÑA-CONTRERAS and ROSALIE PACAÑA, petitioners, vs. ROVILA WATER SUPPLY, INC., EARL
U. KOKSENG, LILIA TORRES, DALLA P. ROMANILLOS and MARISA GABUYA, respondents.
DECISION
BRION, J p:
Before the Court is a petition for review on certiorari 1 under Rule 45 of the Rules of Court seeking the reversal of the
decision 2 dated January 27, 2005 and the resolution 3 dated June 6, 2005 of the Court of Appeals (CA) in CA-G.R. SP No. 71551.
The CA set aside the orders dated February 28, 2002 4 and April 1, 2002 5 of the Regional Trial Court (RTC), Branch 8, Cebu City,
which denied the motion to dismiss and the motion for reconsideration, respectively, of respondents Rovila Water Supply,
Inc. (Rovila Inc.), Earl U. Kokseng, Lilia Torres, Dalla P. Romanillos and Marisa Gabuya.
THE FACTUAL ANTECEDENTS
Petitioners Rebecca Pacaña-Contreras and Rosalie Pacaña, children of Lourdes Teves Pacaña and Luciano Pacaña, filed the
present case against Rovila Inc., Earl, Lilia, Dalla and Marisa for accounting and damages. 6 The petitioners claimed that their
family has long been known in the community to be engaged in the water supply business; they operated the "Rovila Water
Supply" from their family residence and were engaged in the distribution of water to customers in Cebu City.
The petitioners alleged that Lilia was a former trusted employee in the family business who hid business records and burned
and ransacked the family files. Lilia also allegedly posted security guards and barred the members of the Pacaña family from
operating their business. She then claimed ownership over the family business through a corporation named "Rovila Water
Supply, Inc." (Rovila Inc.) Upon inquiry with the Securities and Exchange Commission (SEC), the petitioners claimed that Rovila
Inc. was surreptitiously formed with the respondents as the majority stockholders. The respondents did so by conspiring with
one another and forming the respondent corporation to takeover and illegally usurp the family business' registered name. 7
In forming the respondent corporation, the respondents allegedly used the name of Lourdes as one of the incorporators and
made it appear in the SEC documents that the family business was operated in a place other than the Pacaña residence.
Thereafter, the respondents used the Pacaña family's receipts and the deliveries and sales were made to appear as those of the
respondent Rovila Inc. Using this scheme, the respondents fraudulently appropriated the collections and payments.8
The petitioners filed the complaint in their own names although Rosalie was authorized by Lourdes through a sworn declaration
and special power of attorney(SPA). The respondents filed a first motion to dismiss on the ground that the RTC had no
jurisdiction over an intra-corporate controversy. 9 The RTC denied the motion. aCIHcD
On September 26, 2000, Lourdes died 10 and the petitioners amended their complaint, with leave of court, on October 2, 2000
to reflect this development. 11 They still attached to their amended complaint the sworn declaration with SPA, but the caption
of the amended complaint remained the same. 12 On October 10, 2000, Luciano also died. 13
The respondents filed their Answer on November 16, 2000. 14 The petitioners' sister, Lagrimas Pacaña-Gonzales, filed a motion
for leave to intervene and her answer-in-intervention was granted by the trial court. At the subsequent pre-trial, the
respondents manifested to the RTC that a substitution of the parties was necessary in light of the deaths of Lourdes and
Luciano. They further stated that they would seek the dismissal of the complaint because the petitioners are not the real parties
in interest to prosecute the case. The pre-trial pushed through as scheduled and the RTC directed the respondents to put into
writing their earlier manifestation. The RTC issued a pre-trial order where one of the issues submitted was whether the
complaint should be dismissed for failure to comply with Section 2, Rule 3 of the Rules of Court which requires that every action
must be prosecuted in the name of the real party in interest. 15
On January 23, 2002, 16 the respondents again filed a motion to dismiss on the grounds, among others, that the petitioners are
not the real parties in interest to institute and prosecute the case and that they have no valid cause of action against the
respondents.
THE RTC RULING
The RTC denied the respondents' motion to dismiss. It ruled that, save for the grounds for dismissal which may be raised at any
stage of the proceedings, a motion to dismiss based on the grounds invoked by the respondents may only be filed within the
time for, but before, the filing of their answer to the amended complaint. Thus, even granting that the defenses invoked by the
respondents are meritorious, their motion was filed out of time as it was filed only after the conclusion of the pre-trial
conference. Furthermore, the rule on substitution of parties only applies when the parties to the case die, which is not what
happened in the present case.17 The RTC likewise denied the respondents' motion for reconsideration. 18
The respondents filed a petition for certiorari under Rule 65 of the Rules of Court with the CA, invoking grave abuse of discretion
in the denial of their motion to dismiss. They argued that the deceased spouses Luciano and Lourdes, not the petitioners, were
the real parties in interest. Thus, the petitioners violated Section 16, Rule 3 of the Rules of Court on the substitution of
parties. 19 Furthermore, they seasonably moved for the dismissal of the case 20 and the RTC never acquired jurisdiction over
the persons of the petitioners as heirs of Lourdes and Luciano. 21
THE CA RULING
The CA granted the petition and ruled that the RTC committed grave abuse of discretion as the petitioners filed the complaint
and the amended complaint as attorneys-in-fact of their parents. As such, they are not the real parties in interest and cannot
bring an action in their own names; thus, the complaint should be dismissed 22 pursuant to the Court's ruling in Casimiro v.
Roque and Gonzales. 23
Neither are the petitioners suing as heirs of their deceased parents. Pursuant to jurisprudence, 24 the petitioners should first be
declared as heirs before they can be considered as the real parties in interest. This cannot be done in the present ordinary civil
case but in a special proceeding for that purpose.
The CA agreed with the respondents that they alleged the following issues as affirmative defenses in their answer: 1) the
petitioners are not the real parties in interest; and 2) that they had no legal right to institute the action in behalf of their
parents. 25 That the motion to dismiss was filed after the period to file an answer has lapsed is of no moment. The RTC judge
entertained it and passed upon its merit. He was correct in doing so because in the pre-trial order, one of the submitted issues
was whether the case must be dismissed for failure to comply with the requirements of the Rules of Court. Furthermore,
in Dabuco v. Court of Appeals, 26the Court held that the ground of lack of cause of action may be raised in a motion to dismiss
at anytime. 27
The CA further ruled that, in denying the motion to dismiss, the RTC judge acted contrary to established rules and jurisprudence
which may be questioned via a petition for certiorari. The phrase "grave abuse of discretion" which was traditionally confined to
"capricious and whimsical exercise of judgment" has been expanded to include any action done "contrary to the Constitution,
the law or jurisprudence[.]"28 CAIaHS
THE PARTIES' ARGUMENTS
The petitioners filed the present petition and argued that, first, in annulling the interlocutory orders, the CA unjustly allowed the
motion to dismiss which did not conform to the rules. 29 Specifically, the motion was not filed within the time for, but before
the filing of, the answer to the amended complaint, nor were the grounds raised in the answer. Citing Section 1, Rule 9 of the
Rules of Court, the respondents are deemed to have waived these grounds, as correctly held by the RTC. 30
Second, even if there is non-joinder and misjoinder of parties or that the suit is not brought in the name of the real party in
interest, the remedy is not outright dismissal of the complaint, but its amendment to include the real parties in interest. 31
Third, the petitioners sued in their own right because they have actual and substantial interest in the subject
matter of the action as heirs or co-owners, pursuant to Section 2, Rule 3 of the Rules of Court. 32 Their declaration as heirs
in a special proceeding is not necessary, pursuant to the Court's ruling inMarabilles, et al. v. Quito. 33 Finally, the sworn
declaration is evidentiary in nature which remains to be appreciated after the trial is completed. 34
The respondents reiterated in their comment that the petitioners are not the real parties in interest. 35 They likewise argued
that they moved for the dismissal of the case during the pre-trial conference due to the petitioners' procedural lapse in refusing
to comply with a condition precedent, which is, to substitute the heirs as plaintiffs. Besides, an administrator of the estates of
Luciano and Lourdes has already been appointed. 36
The respondents also argued that the grounds invoked in their motion to dismiss were timely raised, pursuant to Section 2,
paragraphs g and i, Rule 18 of the Rules of Court. Specifically, the nature and purposes of the pre-trial include, among others,
the dismissal of the action, should a valid ground therefor be found to exist; and such other matters as may aid in the prompt
disposition of the action. Finally, the special civil action of certiorari was the proper remedy in assailing the order of the RTC. 37
THE COURT'S RULING
We find the petition meritorious.
Petition for certiorari under Rule 65 is a proper remedy for a denial of a motion to dismiss attended by grave abuse of
discretion
In Barrazona v. RTC, Branch 61, Baguio City, 38 the Court held that while an order denying a motion to dismiss is interlocutory
and non-appealable, certiorari and prohibition are proper remedies to address an order of denial made without or in excess of
jurisdiction. The writ of certiorari is granted to keep an inferior court within the bounds of its jurisdiction or to prevent it from
committing grave abuse of discretion amounting to lack or excess of jurisdiction.
The history and development of the ground "fails to state a cause of action" in the 1940, 1964 and the present 1997 Rules of
Court
Preliminarily, a suit that is not brought in the name of the real party in interest is dismissible on the ground that the complaint
"fails to state a cause of action." 39Pursuant to jurisprudence, 40 this is also the ground invoked when the respondents alleged
that the petitioners are not the real parties in interest because: 1) the petitioners should not have filed the case in their own
names, being merely attorneys-in-fact of their mother; and 2) the petitioners should first be declared as heirs.
A review of the 1940, 1964 and the present 1997 Rules of Court shows that the fundamentals of the ground for dismissal based
on "failure to state a cause of action" have drastically changed over time. A historical background of this particular ground is in
order to preclude any confusion or misapplication of jurisprudence decided prior to the effectivity of the present Rules of Court.
The 1940 Rules of Court provides under Section 10, Rule 9 that: ADHCSE
Section 10. Waiver of defenses. — Defenses and objections not pleaded either in a motion to dismiss or in
the answer are deemed waived; except the defense of failure to state a cause of action, which may be
alleged in a later pleading, if one is permitted, or by motion for judgment on the pleadings, or at the trial on
the merits; but in the last instance, the motion shall be disposed of as provided in section 5 of Rule 17 in the
light of any evidence which may have been received. Whenever it appears that the court has no jurisdiction
over the subject-matter, it shall dismiss the action. [underscoring supplied]
This provision was essentially reproduced in Section 2, Rule 9 of the 1964 Rules of Court, and we quote:
Section 2. Defenses and objections not pleaded deemed waived. — Defenses and objections not pleaded
either in a motion to dismiss or in the answer are deemed waived; except the failure to state a cause of
action which may be alleged in a later pleading, if one is permitted, or by motion for judgment on the
pleadings, or at the trial on the merits; but in the last instance, the motion shall be disposed of as provided
in section 5 of Rule 10 in the light of any evidence which may have been received. Whenever it appears that
the court has no jurisdiction over the subject-matter, it shall dismiss the action. [underscoring supplied]
Under the present Rules of Court, this provision was reflected in Section 1, Rule 9, and we quote:
 Section 1. Defenses and objections not pleaded. — Defenses and objections not pleaded either in a motion
to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the
evidence on record that the court has no jurisdiction over the subject matter, that there is another action
pending between the same parties for the same cause, or that the action is barred by a prior judgment or by
statute of limitations, the court shall dismiss the claim. [underscoring supplied]
Notably, in the present rules, there was a deletion of the ground of "failure to state a cause of action" from the list of those
which may be waived if not invoked either in a motion to dismiss or in the answer.
Another novelty introduced by the present Rules, which was totally absent in its two precedents, is the addition of the period of
time within which a motion to dismiss should be filed as provided under Section 1, Rule 16 and we quote:
Section 1. Grounds. — Within the time for but before filing the answer to the complaint or pleading
asserting a claim, a motion to dismiss may be made on any of the following grounds: . . . [underscoring
supplied]
All these considerations point to the legal reality that the new Rules effectively restricted the dismissal of complaints in general,
especially when what is being invoked is the ground of "failure to state a cause of action." Thus, jurisprudence governed by the
1940 and 1964 Rules of Court to the effect that the ground for dismissal based on failure to state a cause of action may be
raised anytime during the proceedings, is already inapplicable to cases already governed by the present Rules of Court which
took effect on July 1, 1997.
As the rule now stands, the failure to invoke this ground in a motion to dismiss or in the answer would result in its waiver.
According to Oscar M. Herrera, 41 the reason for the deletion is that failure to state a cause of action may be cured under
Section 5, Rule 10 and we quote:
Section 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 judgment; but failure to amend does not effect 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.
With this clarification, we now proceed to the substantial issues of the petition.
The motion to dismiss in the present case based on failure to state a cause of action was not timely filed and was thus waived
Applying Rule 16 of the Rules of Court which provides for the grounds for the dismissal of a civil case, the respondents' grounds
for dismissal fall under Section 1 (g) and (j), Rule 16 of the Rules of Court, particularly, failure to state a cause of action and
failure to comply with a condition precedent (substitution of parties), respectively.
The first paragraph of Section 1, 42 Rule 16 of the Rules of Court provides for the period within which to file a motion to dismiss
under the grounds enumerated. Specifically, the motion should be filed within the time for, but before the filing of, the answer
to the complaint or pleading asserting a claim. Equally important to this provision is Section 1, 43 Rule 9 of the Rules of Court
which states that defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived,
except for the following grounds: 1) the court has no jurisdiction over the subject matter; 2) litis pendencia; 3) res judicata; and
4) prescription.
Therefore, the grounds not falling under these four exceptions may be considered as waived in the event that they are not
timely invoked. As the respondents' motion to dismiss was based on the grounds which should be timely invoked, material to
the resolution of this case is the period within which they were raised.
Both the RTC and the CA found that the motion to dismiss was only filed after the filing of the answer and after the pre-trial had
been concluded. Because there was no motion to dismiss before the filing of the answer, the respondents should then have at
least raised these grounds as affirmative defenses in their answer. The RTC's assailed orders did not touch on this particular
issue but the CA ruled that the respondents did, while the petitioners insist that the respondents did not. In the present
petition, the petitioners reiterate that there was a blatant non-observance of the rules when the respondents did not amend
their answer to invoke the grounds for dismissal which were raised only during the pre-trial and, subsequently, in the subject
motion to dismiss. 44 cAHITS
The divergent findings of the CA and the petitioners' arguments are essentially factual issues. Time and again, we have held that
the jurisdiction of the Court in a petition for review on certiorari under Rule 45, such as the present case, is limited only to
questions of law, save for certain exceptions. One of these is attendant herein, which is, when the findings are conclusions
without citation of specific evidence on which they are based. 45
In the petition filed with the CA, the respondents made a passing allegation that, as affirmative defenses in their answer, they
raised the issue that the petitioners are not the real parties in interest. 46 On the other hand, the petitioners consistently
argued otherwise in their opposition 47 to the motion to dismiss, and in their comment 48 and in their memorandum 49 on the
respondents' petition before the CA.
Our examination of the records shows that the CA had no basis in its finding that the respondents alleged the grounds as
affirmative defenses in their answer. The respondents merely stated in their petition for certiorari that they alleged the subject
grounds in their answer. However, nowhere in the petition did they support this allegation; they did not even attach a copy of
their answer to the petition. It is basic that the respondents had the duty to prove by substantial evidence their positive
assertions. Considering that the petition for certiorari is an original and not an appellate action, the CA had no records of the
RTC's proceedings upon which the CA could refer to in order to validate the respondents' claim. Clearly, other than the
respondents' bare allegations, the CA had no basis to rule, without proof, that the respondents alleged the grounds for dismissal
as affirmative defenses in the answer. The respondents, as the parties with the burden of proving that they timely raised their
grounds for dismissal, could have at least attached a copy of their answer to the petition. This simple task they failed to do.
That the respondents did not allege in their answer the subject grounds is made more apparent through their argument, both in
their motion to dismiss 50 and in their comment, 51 that it was only during the pre-trial stage that they verbally manifested and
invited the attention of the lower court on their grounds for dismissal. In order to justify such late invocation, they heavily relied
on Sections 2 (g) and (i), Rule 18 52 of the Rules of Court that the nature and purpose of the pre-trial include, among others, the
propriety of dismissing the action should there be a valid ground therefor and matters which may aid in the prompt disposition
of the action.
The respondents are not correct. The rules are clear and require no interpretation. Pursuant to Section 1, Rule 9 of the Rules of
Court, a motion to dismiss based on the grounds invoked by the respondents may be waived if not raised in a motion to dismiss
or alleged in their answer. On the other hand, "the pre-trial is primarily intended to make certain that all issues necessary to the
disposition of a case are properly raised. The purpose is to obviate the element of surprise, hence, the parties are expected to
disclose at the pre-trial conference all issues of law and fact which they intend to raise at the trial, except such as may involve
privileged or impeaching matter." 53 The issues submitted during the pre-trial are thus the issues that would govern the trial
proper. The dismissal of the case based on the grounds invoked by the respondents are specifically covered by Rule 16 and Rule
9 of the Rules of Court which set a period when they should be raised; otherwise, they are deemed waived.
The Dabuco ruling is inapplicable in the present case; the ground for dismissal "failure to state a cause of action" distinguished
from "lack of cause of action"
To justify the belated filing of the motion to dismiss, the CA reasoned out that the ground for dismissal of "lack of cause of
action" may be raised at any time during the proceedings, pursuant to Dabuco v. Court of Appeals. 54 This is an erroneous
interpretation and application of Dabuco as will be explained below.
First, in Dabuco, the grounds for dismissal were raised as affirmative defenses in the answer which is in stark contrast to the
present case. Second, in Dabuco, the Court distinguished between the dismissal of the complaint for "failure to state a cause of
action" and "lack of cause of action." The Court emphasized that in a dismissal of action for lack of cause of action, "questions of
fact are involved, [therefore,] courts hesitate to declare a plaintiff as lacking in cause of action. Such declaration is postponed
until the insufficiency of cause is apparent from a preponderance of evidence. Usually, this is done only after the parties have
been given the opportunity to present all relevant evidence on such questions of fact." 55 In fact, in Dabuco, the Court held that
even the preliminary hearing on the propriety of lifting the restraining order was declared insufficient for purposes of dismissing
the complaint for lack of cause of action. This is so because the issues of fact had not yet been adequately ventilated at that
preliminary stage. For these reasons, the Court declared in Dabuco that the dismissal by the trial court of the complaint was
premature. AaIDCS
In the case of Macaslang v. Zamora, 56 the Court noted that the incorrect appreciation by both the RTC and the CA of the
distinction between the dismissal of an action, based on "failure to state a cause of action" and "lack of cause of action,"
prevented it from properly deciding the case, and we quote:
Failure to state a cause of action and lack of cause of action are really different from each other. On the one
hand, failure to state a cause of action refers to the insufficiency of the pleading, and is a ground for
dismissal under Rule 16 of the Rules of Court. On the other hand, lack of cause [of] action refers to a
situation where the evidence does not prove the cause of action alleged in the pleading. Justice Regalado, a
recognized commentator on remedial law, has explained the distinction:
. . . What is contemplated, therefore, is a failure to state a cause of action which is provided in Sec.
1(g) of Rule 16. This is a matter of insufficiency of the pleading. Sec. 5 of Rule 10, which was also
included as the last mode for raising the issue to the court, refers to the situation where the
evidencedoes not prove a cause of action. This is, therefore, a matter of insufficiency of evidence.
Failure to state a cause of action is different from failure to prove a cause of action. The remedy in
the first is to move for dismissal of the pleading, while the remedy in the second is to demur to the
evidence, hence reference to Sec. 5 of Rule 10 has been eliminated in this section. The procedure
would consequently be to require the pleading to state a cause of action, by timely objection to its
deficiency; or, at the trial, to file a demurrer to evidence, if such motion is warranted. [italics
supplied]
Based on this discussion, the Court cannot uphold the dismissal of the present case based on the grounds invoked by the
respondents which they have waived for failure to invoke them within the period prescribed by the Rules. The Court cannot also
dismiss the case based on "lack of cause of action" as this would require at least a preponderance of evidence which is yet to be
appreciated by the trial court.
Therefore, the RTC did not commit grave abuse of discretion in issuing the assailed orders denying the respondents' motion to
dismiss and motion for reconsideration. The Court shall not resolve the merits of the respondents' grounds for dismissal which
are considered as waived.
Other heirs of the spouses Pacaña to be impleaded in the case
It should be emphasized that insofar as the petitioners are concerned, the respondents have waived the dismissal of the
complaint based on the ground of failure to state a cause of action because the petitioners are not the real parties in interest.
At this juncture, a distinction between a real party in interest and an indispensable party is in order. In Carandang v. Heirs of de
Guzman, et al., 57 the Court clarified these two concepts and held that "[a] real party in interest is the party who stands to be
benefited or injured by the judgment of the suit, or the party entitled to the avails of the suit. On the other hand,
an indispensable party is a party in interest without whom no final determination can be had of an action, in contrast to
anecessary party, which is one who is not indispensable but who ought to be joined as a party if complete relief is to be
accorded as to those already parties, or for a complete determination or settlement of the claim subject of the action. . . . If a
suit is not brought in the name of or against the real party in interest, a motion to dismiss may be filed on the ground that the
complaint states no cause of action. However, the dismissal on this ground entails an examination of whether the parties
presently pleaded are interested in the outcome of the litigation, and not whether all persons interested in such outcome are
actually pleaded. The latter query is relevant in discussions concerning indispensable and necessary parties, but not in
discussions concerning real parties in interest. Both indispensable and necessary parties are considered as real parties in
interest, since both classes of parties stand to be benefited or injured by the judgment of the suit." TDCaSE
At the inception of the present case, both the spouses Pacaña were not impleaded as parties-plaintiffs. The Court notes,
however, that they are indispensable parties to the case as the alleged owners of Rovila Water Supply. Without their inclusion
as parties, there can be no final determination of the present case. They possess such an interest in the controversy that a final
decree would necessarily affect their rights, so that the courts cannot proceed without their presence. Their interest in the
subject matter of the suit and in the relief sought is inextricably intertwined with that of the other parties. 58
Jurisprudence on the procedural consequence of the inclusion or non-inclusion of an indispensable party is divided in our
jurisdiction. Due to the non-inclusion of indispensable parties, the Court dismissed the case in Lucman v. Malawi, et
al.59 and Go v. Distinction Properties Development Construction, Inc., 60 while in Casals, et al. v. Tayud Golf and Country Club et
al., 61 the Court annulled the judgment which was rendered without the inclusion of the indispensable parties.
In Arcelona et al. v. Court of Appeals 62 and Bulawan v. Aquende, 63 and Metropolitan Bank & Trust Company v. Alejo et
al. 64 the Court ruled that the burden to implead or order the impleading of an indispensable party rests on the plaintiff and on
the trial court, respectively. Thus, the non-inclusion of the indispensable parties, despite notice of this infirmity, resulted in the
annulment of these cases.
In Plasabas, et al. v. Court of Appeals, et al., 65 the Court held that the trial court and the CA committed reversible error when
they summarily dismissed the case, after both parties had rested their cases following a protracted trial, on the sole ground of
failure to implead indispensable parties. Non-joinder of indispensable parties is not a ground for the dismissal of an action. The
remedy is to implead the non-party claimed to be indispensable.
However, in the cases of Quilatan, et al. v. Heirs of Quilatan, et al.66 and Lagunilla, et al. v. Monis, et al., 67 the Court remanded
the case to the RTC for the impleading of indispensable parties. On the other hand, in Lotte Phil. Co., Inc. v. Dela
Cruz, 68 PepsiCo, Inc. v. Emerald Pizza, 69 and Valdez-Tallorin, v. Heirs of Tarona, et al., 70 the Court directly ordered that the
indispensable parties be impleaded.
Mindful of the differing views of the Court as regards the legal effects of the non-inclusion of indispensable parties, the Court
clarified in Republic of the Philippines v. Sandiganbayan, et al., 71 that the failure to implead indispensable parties is a curable
error and the foreign origin of our present rules on indispensable parties permitted this corrective measure. This cited case
held: SHDAEC
Even in those cases where it might reasonably be argued that the failure of the Government to implead
the sequestered corporations as defendants is indeed a procedural aberration . . ., slight reflection would
nevertheless lead to the conclusion that the defect is not fatal, but one correctible under applicable
adjective rules — e.g., Section 10, Rule 5 of the Rules of Court [specifying the remedy of amendment
during trial to authorize or to conform to the evidence]; Section 1, Rule 20 [governing amendments
before trial], in relation to the rule respecting omission of so-called necessary or indispensable parties, set
out in Section 11, Rule 3 of the Rules of Court. It is relevant in this context to advert to the old familiar
doctrines that the omission to implead such parties "is a mere technical defect which can be cured at any
stage of the proceedings even after judgment"; and that, particularly in the case of indispensable parties,
since their presence and participation is essential to the very life of the action, for without them no
judgment may be rendered, amendments of the complaint in order to implead them should be freely
allowed, even on appeal, in fact even after rendition of judgment by this Court, where it appears that the
complaint otherwise indicates their identity and character as such indispensable parties."
Although there are decided cases wherein the non-joinder of indispensable parties in fact led to the
dismissal of the suit or the annulment of judgment, such cases do not jibe with the matter at hand. The
better view is that non-joinder is not a ground to dismiss the suit or annul the judgment. The rule on joinder
of indispensable parties is founded on equity. And the spirit of the law is reflected in Section 11, Rule 3 of
the 1997 Rules of Civil Procedure. It prohibits the dismissal of a suit on the ground of non-joinder or
misjoinder of parties and allows the amendment of the complaint at any stage of the proceedings, through
motion or on order of the court on its own initiative.
Likewise, jurisprudence on the Federal Rules of Procedure, from which our Section 7, Rule 3 on
indispensable parties was copied, allows the joinder of indispensable parties even after judgment has been
entered if such is needed to afford the moving party full relief. Mere delay in filing the joinder motion does
not necessarily result in the waiver of the right as long as the delay is excusable.
In Galicia, et al. v. Vda. De Mindo, et al., 72 the Court ruled that in line with its policy of promoting a just and inexpensive
disposition of a case, it allowed the intervention of the indispensable parties instead of dismissing the complaint. Furthermore,
in Commissioner Domingo v. Scheer, 73 the Court cited Salvador, et al. v. Court of Appeals, et al.74 and held that the Court has
full powers, apart from that power and authority which are inherent, to amend the processes, pleadings, proceedings and
decisions by substituting as party-plaintiff the real party in interest. The Court has the power to avoid delay in the disposition of
this case, and to order its amendment in order to implead an indispensable party.
With these discussions as premises, the Court is of the view that the proper remedy in the present case is to implead the
indispensable parties especially when their non-inclusion is merely a technical defect. To do so would serve proper
administration of justice and prevent further delay and multiplicity of suits. Pursuant to Section 9, Rule 3 of the Rules of Court,
parties may be added by order of the court on motion of the party or on its own initiative at any stage of the action. If the
plaintiff refuses to implead an indispensable party despite the order of the court, then the court may dismiss the complaint for
the plaintiff's failure to comply with a lawful court order. 75 The operative act that would lead to the dismissal of the case would
be the refusal to comply with the directive of the court for the joinder of an indispensable party to the case. 76
Obviously, in the present case, the deceased Pacañas can no longer be included in the complaint as indispensable parties
because of their death during the pendency of the case. Upon their death, however, their ownership and rights over their
properties were transmitted to their heirs, including herein petitioners, pursuant to Article 774 77 in relation with Article
777 78 of the Civil Code.In Orbeta, et al. v. Sendiong, 79 the Court acknowledged that the heirs, whose hereditary rights are to
be affected by the case, are deemed indispensable parties who should have been impleaded by the trial court.
Therefore, to obviate further delay in the proceedings of the present case and given the Court's authority to order the inclusion
of an indispensable party at any stage of the proceedings, the heirs of the spouses Pacaña, except the petitioners who are
already parties to the case and Lagrimas Pacaña-Gonzalez who intervened in the case, are hereby ordered impleaded as parties-
plaintiffs.
WHEREFORE, the petition is GRANTED. The decision dated January 27, 2005 and the resolution dated June 6, 2005 of the Court
of Appeals in CA-G.R. SP No. 71551 are REVERSED and SET ASIDE. The heirs of the spouses Luciano and Lourdes Pacaña, except
herein petitioners and Lagrimas Pacaña-Gonzalez, are ORDERED IMPLEADED as parties-plaintiffs and the RTC is directed to
proceed with the trial of the case with DISPATCH.
SO ORDERED.
Carpio, Del Castillo, Perez and Perlas-Bernabe, JJ., concur.
 [G.R. No. L-23136. August 26, 1974.]
ISMAEL MATHAY, JOSEFINA MATHAY, DIOGRACIAS T. REYES and S. ADOR DIONISIO, plaintiffs-
appellants, vs. THE CONSOLIDATED BANK AND TRUST COMPANY, JOSE MARINO OLONDRIZ, WILFREDO C.
TECSON, SIMON R. PATERNO, FERMIN Z. CARAM, JR., ANTONIO P. MADRIGAL, JOSE P. MADRIGAL,
CLAUDIO TEEHANKEE, and ALFONSO JUAN OLONDRIZ, defendants-appellees. CIPRIANO AZADA, MARIA
CRISTINA OLONDRIZ PERTIERRA jointly with her husband ARTURO PERTIERRA, and MARIA DEL PUY
OLONDRIZ DE STEVENS, movants-intervenors-appellants.
DECISION
ZALDIVAR, J p:
In this appeal, appellants-plaintiffs and movants-intervenors, seek the reversal of the order dated March 21, 1964 of the Court
of First Instance of Manila dismissing the complaint together with all other pending incidents in Civil Case No. 55810. cdt
The complaint in this case, filed on December 24, 1963 as a class suit, under Section 12, Rule 3, of the Rules of Court, contained
six causes of action. Under the first cause of action, plaintiffs-appellants alleged that they were, on or before March 28, 1962,
stockholders in the Consolidated Mines, Inc. (hereinafter referred to as CMI), a corporation duly organized and existing under
Philippine laws; that the stockholders of the CMI, including the plaintiffs-appellants, passed, at a regular stockholders' meeting,
a Resolution providing: (a) that the Consolidated Bank & Trust Co. (hereinafter referred to as Bank) he organized with an
authorized capital of P20,000,000.00; (b) that the organization be undertaken by a Board of Organizers composed of the
President and Members of the Board of Directors of the CMI; (c) that all stockholders of the CMI, who were legally qualified to
become stockholders, would be entitled to subscribe to the capital stock of the proposed Bank "at par value to the same extent
and in the same amount as said stockholders' respective shareholdings in the CMI," as shown in its stock books on a date to be
fixed by the Board of Directors [which date was subsequently fixed as January 15, 1963], provided that the right to subscribe
should be exercised within thirty days from the date so fixed, and "that if such right to subscription be not so exercised then the
stockholders concerned shall be deemed to have thereby waived and releasedipso-facto their right to such subscription in favor
of the Interim Board of Organizers of the Defendant Bank or their assignees;" and (d) that the Board of Directors of the CMI be
authorized to declare a "special dividend" in an amount it would fix, which the subscribing stockholders might authorize to be
paid directly to the treasurer of the proposed Bank in payment of the subscriptions; that the President and members of the
Board of Directors of the CMI, who are the individuals-defendants-appellees in the instant case, constituted themselves as the
Interim Board of Organizers; that said Board sent out, on or about November 20, 1962, to the CMI stockholders, including the
plaintiffs-appellants, circular letters with "Pre-Incorporation Agreement to Subscribe" forms that provided that the payment of
the subscription should be made in cash from time to time or by the application of the special dividend declared by the CMI, and
that the subscription must be made within the period from December 4, 1962 to January 15, 1963, "otherwise such subscription
right shall be deemed to have been thereby ipso facto waived and released in favor of the Board of Organizers of the Defendant
Bank and their assignees"; that the plaintiffs-appellants accomplished and filed their respective "Pre-Incorporation Agreement
to Subscribe" and paid in full their subscriptions; that plaintiffs-appellants and the other CMI subscribing stockholders in whose
behalf the action was brought also subscribed to a very substantial amount of shares; that on June 25, 1963, the Board of
Organizers caused the execution of the Articles or Incorporation of the proposed Bank indicating an original subscription of
50,000 shares worth P5,000,000 subscribed and paid only by six of the individuals-defendants-appellees, namely, Antonio P.
Madrigal, Jose P. Madrigal, Simon R. Paterno, Fermin Z. Caram, Jr., Claudio Teehankee, and Wilfredo C. Tecson, thereby
excluding the plaintiffs-appellants and the other CMI subscribing stockholders who had already subscribed; that the execution
of said Articles of Incorporation was "in violation of law and in breach of trust and contractual agreement as a means to gain
control of Defendant Bank by Defendant Individuals and persons or entities chosen by them and for their personal profit or gain
in disregard of the rights of Plaintiffs and other CMI Subscribing Stockholders;" that the paid-in capital stock was raised, as
required by the Monetary Board, to P8,000,000.00, and individuals — defendants-appellees caused to be issued from the
unissued shares 30,000 shares amounting to P3,000,000.00, all of which were again subscribed and paid for entirely by
individuals-defendants-appellees or entities chosen by them "to the exclusion of Plaintiffs and other CMI subscribing
stockholders" "in violation of law and breach of trust and of the contractual agreement embodied in the contractual agreement
of March 28, 1962"; that the Articles were filed with the Securities and Exchange Commission which issued the Certificate of
Incorporation on June 25, 1963; that as of the date of the Complaint, the plaintiffs-appellants and other CMI subscribing
stockholders had been denied, through the unlawful acts and manipulation of the defendant Bank and Individuals-defendants-
appellees, the right to subscribe at par value, in proportion to their equities established under their respective "Pre-
Incorporation Agreements to Subscribe" to the capital stock, i.e., (a) to the original issue of 50,000 shares and/or (b) to the
additional issue of 30,000 shares, and/or (c) in that portion of said original or additional issue which was unsubscribed; that the
individuals-defendants-appellees and the persons chosen by them had unlawfully acquired stockholdings in the defendant-
appellee Bank in excess of what they were lawfully entitled and held such shares "in trust" for the plaintiffs-appellants and the
other CMI stockholders; that it would have been vain and futile to resort to intracorporate remedies under the facts and
circumstances alleged above. As relief on the first cause of action, plaintiffs-appellants prayed that the subscriptions and
shareholdings acquired by the individuals-defendants-appellees and the persons chosen by them, to the extent that plaintiffs-
appellants and the other CMI stockholders had been deprived of their right to subscribe, be annulled and transferred to
plaintiffs-appellants and other CMI subscribing stockholders.
Besides reproducing all the above allegations in the other causes of action, plaintiffs-appellants further alleged under the
second cause of action that on or about August 28, 1963, defendants-appellees Antonio P. Madrigal, Jose P. Madrigal; Fermin Z.
Caram, Jr., and Wilfredo C. Tecson "falsely certified to the calling of a special stockholders' meeting allegedly pursuant to due
notice and call of Defendant Bank" although plaintiffs-appellants and other CMI stockholders were not notified thereof, and
amended the Articles of Incorporation increasing the number of Directors from 6 to 7, and had the illegally created position of
Director filled up by defendant-appellee Alfonso Juan Olondriz, who was not competent or qualified to hold such position. In the
third cause of action, plaintiffs-appellants claimed actual damages in an amount equivalent to the difference between the par
value of the shares they were entitled, but failed, to acquire and the higher market value of the same shares. In the fourth cause
of action, plaintiffs-appellants claimed moral damages; in the fifth, exemplary damages; and in the sixth, attorney's fees.
In his manifestation to the court on January 4, 1964, Francisco Sevilla, who was one of the original plaintiffs, withdrew. On
January 15, 1964 Cipriano Azada, Maria Cristina Olondriz Pertierra, Maria del Puy Olondriz de Stevens (who later withdrew as
intervenors-appellants) and Carmen Sievert de Amoyo, filed a motion to intervene, and to join the plaintiffs-appellants on
record, to which motion defendants-appellees, except Fermin Z. Caram, Jr., filed, on January 17, 1964 their opposition. prLL
On February 7, 1964 defendants-appellees, except Fermin Z. Caram, Jr., filed a motion to dismiss on the grounds that (a)
plaintiffs-appellants had no legal standing or capacity to institute the alleged class suit; (b) that the complaint did not state a
sufficient and valid cause of action; and (c) that plaintiffs-appellants' complaint against the increase of the number of directors
did not likewise state a cause of action. Plaintiffs-appellants filed their opposition thereto on February 21, 1964.
On March 4, 1964 appellants, plaintiffs and intervenors, filed a verified petition for a writ of preliminary injunction to enjoin
defendants-appellees from considering or ratifying by resolution, at the meeting of the stockholders of defendant-appellee Bank
to be held the following day, the unlawful apportionment of the shares of the defendant-appellee Bank and the illegal
amendment to its Articles of Incorporation increasing the number of Directors. The Court, after hearing, granted the writ, but
subsequently set it aside upon the appellees' filing a counterbond.
Some subscribers to the capital stock of the Bank like Concepcion Zuluaga, et al., and Carlos Moran Sison, et al., filed separate
manifestations that they were opposing and disauthorizing the suit of plaintiffs-appellants.
On March 7, 1964 defendants-appellees, except Fermin Z. Caram, Jr., filed a supplemental ground for their motion to dismiss, to
wit, that the stockholders, except Fermin Z. Caram, Jr., who abstained, had unanimously, at their regular annual meeting held
on March 5, 1964, ratified and confirmed all the actuations of the organizers-directors in the incorporation, organization and
establishment of the Bank.
In its order, dated March 21, 1964, the trial court granted the motion to dismiss, holding, among other things, that the class suit
could not be maintained because of the absence of a showing in the complaint that the plaintiffs-appellants were sufficiently
numerous and representative, and that the complaint failed to state a cause of action. From said order, appellants, plaintiffs and
intervenors, interposed this appeal to this Court on questions of law and fact, contending that the lower court erred as follows:
I. In holding that plaintiffs-appellants could not maintain the present class suit because of the absence of a
showing in the complaint that they were sufficiently numerous and representative;
II. In holding that the instant action could not be maintained as a class suit because plaintiffs-appellants did
not have a common legal interest in the subject matter of the suit;
III. In dismissing the present class suit on the ground that it did not meet the requirements of Rule 3, section
12 of the Rules of Court;
IV. In holding that the complaint was fatally defective in that it failed to state with particularity that
plaintiffs-appellants had resorted to, and exhausted, intra-corporate remedies;
V. In resolving defendants-appellees' motion on the basis of facts not alleged in the complaint;
VI. In holding that plaintiffs-appellants' complaint stated no valid cause of action against defendants-
appellees;
VII. In not holding that a trust relationship existed between the Interim Board of Organizers of defendant-
appellee Bank and the CMI subscribing stockholders and in not holding that the waiver was in favor
of the Board of Trustees for the CMI subscribing stockholders;
VIII. In holding that the failure of plaintiffs-appellants to allege that they had paid or had offered to pay for
the shares allegedly pertaining to them constituted another ground for dismissal;
IX. In holding that the allegations under the second cause of action stated no valid cause of action due to a
fatal omission to allege that plaintiffs-appellants were stockholders of record at the time of the
holding of the special stockholders' meeting;
X. In holding that plaintiffs-appellants' complaint stated no cause of action against defendant-appellee Bank;
and
XI. In considering the resolution of ratification and confirmation and in holding that the resolution rendered
the issues in this case moot. cd
The assigned error revolve around two questions, namely: (1) whether the instant action could be maintained as a class suit,
and (2) whether the complaint stated a cause of action. These issues alone will be discussed.
1. Appellants contended in the first three assigned errors that the trial court erred in holding that the present suit could not be
maintained as a class suit, and in support thereof argued that the propriety of a class suit should be determined by the common
interest in the subject matter of the controversy; that in the instant case there existed such common interest which consisted
not only in the recovery of the shares of which the appellants were unlawfully deprived, but also in divesting the individuals-
defendants-appellees and the persons or entities chosen by them of control of the appellee Bank; 1 that the complaint showed
that besides the four plaintiffs-appellants of record, and the four movant-intervenors-appellants there were in the appellee
Bank many other stockholders who, though similarly situated as the appellants, did not formally include themselves as parties
on record in view of the representative character of the suit; that the test, in order to determine the legal standing of a party to
institute a class suit, was not one of number, but whether or not the interest of said party was representative of the persons in
whose behalf the class suit was instituted; that granting arguendo, that the plaintiffs-appellants were not sufficiently numerous
and representative, the court should not have dismissed the action, for insufficiency of number in a class suit was not a ground
for a motion to dismiss, and the court should have treated the suit as an action under Rule 3, section 6, of the Rules of Court
which permits a joinder of parties.
Defendants-appellees, on the contrary, stressed that the instant suit was instituted as a class suit and the plaintiffs-appellants
did not sue in their individual capacities for the protection of their individual interests; that the plaintiffs-appellants of record
could not be considered numerous and representative, as said plaintiffs-appellants were only four out of 1,500 stockholders,
and owned only 8 shares out of the 80,000 shares of stock of the appellee Bank; that even if to the four plaintiffs-appellants
were added the four movants-intervenors-appellants the situation would be the same as two of the intervenors, to wit, Ma.
Cristina Olondriz Pertierra and Ma. del Puy Olondriz de Stevens, could not sue as they did not have their husbands' consent; that
it was necessary that in a class suit the complaint itself should allege facts showing that the plaintiffs were sufficiently numerous
and representative, and this did not obtain in the instant case, as the complaint did not even allege how many other CMI
stockholders were "similarly situated"; that the withdrawal of one plaintiff, Francisco Sevilla, the subsequent disclaimers of any
interest in the suit made in two separate pleadings by other CMI stockholders and the disauthorization of their being
represented by plaintiffs-appellants by the 986 (out of 1,663) stockholders who attended the annual meeting of bank
stockholders on March 5, 1964, completely negated plaintiffs-appellants' pretension that they were sufficiently numerous and
representative or that there were many other stockholders similarly situated whom the plaintiffs-appellants allegedly
represented; that plaintiffs-appellants did not have that common or general interest required by the Rules of Court in the
subject matter of the suit. 2
In their Reply Brief, appellants insisted that non-compliance with Section 12, Rule 3, not being one enumerated in Rules 16 and
17, was not a ground for dismissal; that the requirements for a class had been complied with; that the required common
interest existed even if the interests were several for there was a common question of law or fact and a common relief was
sought; that the common or general interest could be in the object of the action, in the result of the proceedings, or in the
question involved in the action, as long as there was a common right based on the same essential facts; that plaintiffs-appellants
adequately represented the aggrieved group of bank stockholders, inasmuch as appellants interests were not antagonistic to
those of the latter, and appellants were in the same position as the group in whose behalf the complaint was filed.
The governing statutory provision for the maintenance of a class suit is Section 12 of Rule 3 of the Rules of Court, which reads as
follows.
"SECTION 12. Class suit. — When the subject matter of the controversy is one of common or general
interest to many persons, and the parties are so numerous that it is impracticable to bring them all before
the court, one or more may sue or defend for the benefit of all. But in such case the court shall make sure
that the parties actually before it are sufficiently numerous and representative so that all interests
concerned are fully protected. Any party in interest shall have a right to intervene in protection of his
individual interest."
The necessary elements for the maintenance of a class suit are accordingly: (1) that the subject matter of the controversy be
one of common or general interest to many persons, and (2) that such persons be so numerous as to make it impracticable to
bring them all to the court. An action does not become a class suit merely because it is designated as such in the pleadings.
Whether the suit is or is not a class suit depends upon the attending facts, and the complaint, or other pleading initiating the
class action should allege the existence of the necessary facts, to wit, the existence of a subject matter of common interest, and
the existence of a class and the number of persons in the alleged class, 3 in order that the court might be enabled to determine
whether the members of the class are so numerous as to make it impracticable to bring them all before the court, to contrast
the number appearing on the record with the number in the class and to determine whether claimants on record adequately
represent the class and the subject matter of general or common interest. 4
The complaint in the instant case explicitly declared that the plaintiffs-appellants instituted the "present class suit under Section
12, Rule 3, of the Rules of Court in behalf of CMI subscribing stockholders" 5 but did not state the number of said CMI
subscribing stockholders so that the trial court could not infer, much less make sure as explicitly required by the statutory
provision, that the parties actually before it were sufficiently numerous and representative in order that all interests concerned
might be fully protected, and that it was impracticable to bring such a large number of parties before the court.
The statute also requires, as a prerequisite to a class suit, that the subject-matter of the controversy be of common or general
interest to numerous persons. Although it has been remarked that the "innocent 'common or general interest' requirement is
not very helpful in determining whether or not the suit is proper", 6the decided cases in our jurisdiction have more incisively
certified the matter when there is such common or general interest in the subject matter of the controversy. By the phrase
"subject matter of the action" is meant "the physical facts, the things real or personal, the money, lands, chattels, and the like,
in relation to which the suit is prosecuted, and not the delict or wrong committed by the defendant." 7
This Court has ruled that a class suit did not lie in an action for recovery of real property where separate portions of the same
parcel were occupied and claimed individually by different parties to the exclusion of each other, such that the different parties
had determinable, though undivided interests, in the property in question. 8 It has likewise held that a class suit would not lie
against 319 defendants individually occupying different portions of a big parcel of land, where each defendant had an interest
only in the particular portion he was occupying, which portion was completely different from the other portions individually
occupied by other defendants, for the applicable Section 118 of the Code of Civil Procedure relates to a common and general
interest in single specific things and not to distinct ones. 9 In an action for the recovery of amounts that represented surcharges
allegedly collected by the city from some 30,000 customers of four movie houses, it was held that a class suit did not lie, as no
one plaintiff had any right to, or any share in the amounts individually claimed by the others, as each of them was entitled, if at
all, only to the return of what he had personally paid. 10
The interest, subject matter of the class suits in the above-cited cases, is analogous to the interest claimed by appellants in the
instant case. The interest that appellants, plaintiffs and intervenors, and the CMI stockholders had in the subject matter of this
suit — the portion of stocks offering of the Bank left unsubscribed by CMI stockholders who failed to exercise their right to
subscribe on or before January 15, 1963 — was several, not common or general in the sense required by the statute. Each one
of the appellants and the CMI stockholders had determinable interest; each one had a right, if any, only to his respective portion
of the stocks. No one of them had any right to, or any interest in, the stock to which another was entitled. Anent this point, the
trial court correctly remarked:
"It appears to be the theory of the plaintiffs borne out by the prayer, that each subscribing CMI stockholder
is entitled to further subscribe to a certain proportion, depending upon his stockholding in the CMI, of the
P8 million capital stock of the defendant bank open to subscription (out of the P20 million authorized capital
stock) as well as the unsubscribed portion of the P8 million stock offering which were left unsubscribed by
those CMI stockholders who for one reason or another had failed to exercise their subscription rights on or
before January 15, 1963. Under the plaintiffs' theory therefore, each subscribing CMI stockholder was
entitled to subscribe to a definite number of shares both in the original offering of P8 million and in that
part thereof not subscribed on or before the deadline mentioned, so that one subscribing CMI stockholder
may be entitled to subscribe to one share, another to 3 shares and a third to 11 shares, and so on,
depending upon the amount and extent of CMI stockholding. But except for the fact that a question of law
— the proper interpretation of the waiver provisions of the CMI stockholders' resolution of March 28, 1962
— is common to all, each CMI subscribing stock holder has a legal interest in, and a claim to, only his
respective proportion of shares in the defendant bank, and none with regard to any of the shares to which
another stockholder is entitled. Thus, plaintiff Ismael Mathay has no legal interest in, or claim to, any share
claimed by any or all of his co-plaintiffs from the defendant individuals. Hence, no CMI subscribing
stockholder or, for that matter, not any number of CMI stockholders can maintain a class suit in behalf of
others, . . ." 11
Even if it be assumed, for the sake of argument, that the appellants and the CMI stockholders suffered wrongs that had been
committed by similar means and even pursuant to a single plan of the Interim Board of Organizers of the Bank, the wrong
suffered by each of them would constitute a wrong separate from those suffered by the other stockholders, and those wrongs
alone would not create that common or general interest in the subject matter of the controversy as would entitle any one of
them to bring a class suit on behalf of the others. Anent this point it has been said that:
"Separate wrongs to separate persons, although committed by similar means and even pursuant to a single
plan, do not alone create a 'common' or 'general' interest in those who are wronged so as to entitle them to
maintain a representative action." 12
Appellants, however, insisted, citing American authorities, 13 that a class suit might be brought even if the interests of plaintiffs-
appellants might be several as long as there was a common question of law or fact affecting them and a common relief was
sought. We have no conflict with the authorities cited; those were rulings under the Federal Rules of Civil Procedure, pursuant
to Rule 23 of which, there were three types of class suits, namely: the true, the hybrid, and the spurious, and these three had
only one feature in common, that is, in each the persons constituting the class must be so numerous as to make it impracticable
to bring them all before the court. The authorities cited by plaintiffs-appellants refer to the spurious class action (Rule 23 (a) (3)
which involves a right sought to be enforced, which is several, and there is a common question of law or fact affecting the
several rights and a common relief is sought. 14 The spurious class action is merely a permissive joinder device; between the
members of the class there is no jural relationship, and the right or liability of each is distinct, the class being formed solely by
the presence of a common question of law or fact. 15 This permissive joinder is provided in Section 6 of Rule 3, of our Rules of
Court. Such joinder is not and cannot be regarded as a class suit, which this action purported and was intended to be as per
averment of the complaint.
It may be granted that the claims of all the appellants involved the same question of law. But this alone, as said above, did not
constitute the common interest over the subject matter indispensable in a class suit. The right to purchase or subscribe to the
shares of the proposed Bank, claimed by appellants herein, is analogous to the right of preemption that stockholders have when
their corporation increases its capital. The right of preemption, it has been said, is personal to each stockholder, 16 and while a
stockholder may maintain a suit to compel the issuance of his proportionate share of stock, it has been ruled, nevertheless, that
he may not maintain a representative action on behalf of other stockholders who are similarly situated. 17 By analogy, the right
of each of the appellants to subscribe to the waived stocks was personal, and no one of them could maintain on behalf of others
similarly situated a representative suit.
Straining to make it appear that appellants and the CMI subscribing stockholders had a common or general interest in the
subject matter of the suit, appellants stressed in their brief that one of the reliefs sought in the instant action was "to divest
defendant individuals and the persons or entities chosen by them of control of the defendant bank." 18 This relief allegedly
sought by appellants did not, however, appear either in the text or in the prayer of the complaint. prLL
Appellants, furthermore, insisted that insufficiency of number in a class suit was not a ground for dismissal of one action. This
Court has, however, said that where it appeared that no sufficient representative parties had been joined, the dismissal by the
trial court of the action, despite the contention by plaintiffs that it was a class suit, was correct. 19 Moreover, insofar as the
instant case is concerned, even if it be granted for the sake of argument, that the suit could not be dismissed on that ground, it
could have been dismissed, nevertheless, on the ground of lack of cause of action which will be presently discussed.
2. Appellants supported their assigned error that the court erred in holding that the complaint stated no valid cause of action,
by claiming that paragraph 15 together with the other allegations of the complaint to the effect that defendants-appellees had
unlawfully acquired stockholdings in the capital stock of defendant-appellee Bank in excess of what they were lawfully entitled
to, in violation of law and in breach of trust and the contractual agreement, constituted a valid and sufficient cause of
action; 20 and that only the allegations in the complaint should have been considered by the trial court in determining whether
the complaint stated a cause of action or not.
Defendants-appellees, on the contrary, maintained that the allegations of the complaint should not be the only ones to be
considered in determining whether there is a cause of action; that even if the ultimate facts alleged in the first cause of action of
the complaint be the only ones considered, the complaint would still fail to state a valid cause of action on the following
grounds: first, there was no allegation regarding appellants' qualification to subscribe to the capital stock of the appellee Bank,
for under the CMI stockholders' resolution of March 28, 1962, only those qualified under the law were entitled to subscribe, and
under the regulations of the Monetary Board, only natural-born Filipino citizens could be stockholders of a banking corporation
organized under the laws of the Philippines, and nowhere did the complaint allege that plaintiffs-appellants were natural born
Filipino citizens. 21 Second, appellants' averment in paragraph 8 that they "subscribed," and their averment in paragraph 15
that they were "denied the right to subscribe . . . to the capital stock of the defendant Bank", were inconsistent, and hence
neutralized each other, thereby leaving in shambles the first cause of action. Third, there was no allegation that appellants had
not yet received or had not been issued the corresponding certificates of stock covering the shares they had subscribed and
paid for. Fourth, the allegations failed to show the existence of the supposed trust; and fifth, the complaint failed to allege that
plaintiffs-appellants had paid or offered to pay for the shares allegedly pertaining to them. 22
Let us premise the legal principles governing the motion to dismiss on the ground of lack of cause of action. cdasia
Section 1, Rule 16 of the Rules of Court, providing in part that:
Within the time for pleading a motion to dismiss may be made on any of the following grounds:. . .
"(g) That the complaint states no cause of action. . . ."
explicitly requires that the sufficiency of the complaint must be tested exclusively on the basis of the complaint itself and no
other should be considered when the ground for motion to dismiss is that the complaint states no cause of action. Pursuant
thereto this Court has ruled that:
"As a rule the sufficiency of the complaint, when challenged in a motion to dismiss, must be determined
exclusively on the basis of the facts alleged therein." 23
It has been likewise held that a motion to dismiss based on lack of cause of action hypothetically admits the truth of the
allegations of fact made in the complaint. 24It is to be noted that only the facts well pleaded in the complaint, and likewise, any
inferences fairly deducible therefrom, are deemed admitted by a motion to dismiss. Neither allegations of conclusions 25 nor
allegations of facts the falsity of which the court may take judicial notice are deemed admitted. 26 The question, therefore,
submitted to the Court in a motion to dismiss based on lack of cause of action is not whether the facts alleged in the complaint
are true, for these are hypothetically admitted, but whether the facts alleged are sufficient to constitute a cause of action such
that the court may render a valid judgment upon the facts alleged therein.
A cause of action is an act or omission of one party in violation of the legal right of the other. Its essential elements are, namely:
(1) the existence of a legal right in the plaintiff, (2) a correlative legal duty in the defendant, and (3) an act or omission of the
defendant in violation of plaintiff's right with consequential injury or damage to the plaintiff for which he may maintain an
action for the recovery of damages or other appropriate relief. 27 On the other hand, Section 3 of Rule 6 of the Rules of Court
provides that the complaint must state the ultimate facts constituting the plaintiff's cause of action. Hence, where the
complaint states ultimate facts that constitute the three essential elements of a cause of action, the complaint states a cause of
action; 28 otherwise, the complaint must succumb to a motion to dismiss on that ground.
The legal principles having been premised, let us now analyze and discuss appellant's various causes of action.
Appellants' first cause of action, pursuant to what has been premised above, should have consisted of: (1) the right of appellants
as well as of the other CMI stockholders to subscribe, in proportion to their equities established under their respective "Pre-
Incorporation Agreements to Subscribe", to that portion of the capital stock which was unsubscribed because of failure of the
CMI stockholders to exercise their right to subscribe thereto; (2) the legal duty of the appellees to have said portion of the
capital stock to be subscribed by appellants and other CMI stockholders; and (3) the violation or breach of said right of
appellants and other CMI stockholders by the appellees.
Did the complaint state the important and substantial facts directly forming the basis of the primary right claimed by plaintiffs?
Before proceeding to elucidate this question, it should be noted that a bare allegation that one is entitled to something is an
allegation of a conclusion. Such allegation adds nothing to the pleading, it being necessary to plead specifically the facts upon
which such conclusion is founded. 29 The complaint alleged that appellants were stockholders of the CMI; that as such
stockholders, they were entitled, by virtue of the resolution of March 28, 1962, to subscribe to the capital stock of the proposed
Consolidated Bank and Trust Co., at par value to the same extent and in the same amount as said stockholders' respective
shareholdings in the CMI as shown in the latter's stock book as of January 15, 1963, the right to subscribe to be exercised until
January 15, 1963, provided said stockholders of the CMI were qualified under the law to become stockholders of the proposed
Bank; 30 that appellants accomplished and filed their respective "Pre-Incorporation Agreements to Subscribe" and fully paid the
subscription. 31
These alleged specific facts did not even show that appellants were entitled to subscribe to the capital stock of the proposed
Bank, for said right depended on a condition precedent, which was, that they were qualified under the law to become
stockholders of the Bank, and there was no direct averment in the complaint of the facts that qualified them to become
stockholders of the Bank. The allegation of the fact that they subscribed to the stock did not, by necessary implication, show
that they were possessed of the necessary qualifications to become stockholders of the proposed Bank.
Assuming arguendo that appellants were qualified to become stockholders of the Bank, they could subscribe, pursuant to the
explicit terms of the resolution of March 28, 1962, "to the same extent and in the same amount as said stockholders' respective
shareholdings in the CMI" as of January 15, 1963. 32 This was the measure of the right they could claim to subscribe to waived
stocks. Appellants did not even aver that the stocks waived to the subscription of which they claimed the right to subscribe,
were comprised in "the extent and amount" of their respective shareholdings in the CMI. It is not surprising that they did not
make such an averment for they did not even allege the amount of shares of stock to which they claimed they were entitled to
subscribe. The failure of the complaint to plead specifically the above facts rendered it impossible for the court to conclude by
natural reasoning that the appellants and other CMI stockholders had a right to subscribe to the waived shares of stock, and
made any allegation to that effect a conclusion of the pleader, not an ultimate fact, in accordance with the test suggested by the
California Supreme Court, to wit:
"If from the facts in evidence, the result can be reached by that process of natural reasoning adopted in the
investigation of truth, it becomes an ultimate fact, to be found as such. If, on the other hand, resort must be
had to the artificial processes of the law, in order to reach a final determination, the result is a conclusion of
law." 33
Let us now pass to the second and third elements that would have constituted the first cause of action. Did the complaint allege
as ultimate facts the legal duty of defendants-appellees to have a portion of the capital stock subscribed to by appellants? Did
the complaint allege as ultimate facts that defendants-appellees had violated appellants' right?
Even if it be assumed arguendo that defendants-appellees had the duty to have the waived stocks subscribed to by the CMI
stockholders, this duty was not owed to all the CMI stockholders, but only to such CMI stockholders as were qualified to
become stockholders of the proposed Bank. Inasmuch as it has been shown that the complaint did not contain ultimate facts to
show that plaintiffs-appellants were qualified to become stockholders of the Bank, it follows that the complaint did not show
that defendants-appellees were under duty to have plaintiffs-appellants subscribe to the stocks of the proposed Bank. It
inevitably follows also that the complaint did not contain ultimate facts to show that the right of the plaintiffs-appellants to
subscribe to the shares of the proposed Bank had been violated by defendants-appellees. How could a non-existent right be
violated?
Let us continue the discussion further. The complaint alleged that by virtue of the resolution of March 28, 1962, the President
and Members of the Board of Directors of the CMI would be constituted as a Board of Organizers to undertake and carry out the
organization of the Bank; 34 that the Board of Organizers was constituted and proceeded with the establishment of the
Bank; 35 that the persons composing the Board of Organizers were the individuals-defendants-appellees;36 that the Board of
Organizers sent our circular letters with "Pre-Incorporation Agreement to Subscribe" forms 37 which specified, among others,
"such subscription right shall be deemed ipso facto waived and released in favor of the Board of Organizers of the defendant
Bank and their assignees"; 38 that in the Articles of Incorporation prepared by the Board of Organizers, the individuals-
defendants-appellees alone appeared to have subscribed to the 50,000 shares; 39 and that individuals-defendants-appellees
again subscribed to all the additional 30,000 shares. 40 From these facts, appellants concluded that they were denied their right
to subscribe in proportion to their equities; 41 that the individuals-defendants-appellees unlawfully acquired stockholdings far
in excess of what they were lawfully entitled in violation of law and in breach of trust and of contractual agreement; 42 and
that, because of matters already alleged, the individuals-defendants-appellees "hold their shares in the defendant bank in trust
for plaintiffs." 43
The allegation in the complaint that the individuals-defendants-appellees held their shares "in trust" for plaintiffs-appellants
without averment of the facts from which the court could conclude the existence of the alleged trust, was not deemed admitted
by the motion to dismiss for that was a conclusion of law. Express averments "that a party was the beneficial owner of certain
property; . . . that property or money was received or held in trust, or for the use of another; that particular funds were trust
funds; that a particular transaction created an irrevocable trust; that a person held property as constructive trustee; that on the
transfer of certain property a trust resulted" have been considered as mere conclusions of law. 44 The facts alleged in the
complaint did not, by logical reasoning, necessarily lead to the conclusion that defendants-appellees were trustees in favor of
appellants of the shares of stock waived by the CMI stockholders who failed to exercise their right to subscribe. In this
connection, it has been likewise said that:
"The general rule is that an allegation of duty in terms unaccompanied by a statement of the facts showing
the existence of the duty, is a mere conclusion of law, unless there is a relation set forth from which the law
raises the duty." 45
In like manner, the allegation that individuals-defendants-appellees held said shares in trust was no more than an interpretation
by appellants of the effect of the waiver clause of the Resolution and as such it was again a mere conclusion of law. It has been
said that:
"The following are also conclusions of law: . . . an allegation characterizing an instrument or purporting to
interpret it and state its effects, . . ." 46
"Allegations in petition in the nature of conclusions about the meaning of contract, inconsistent with stated
terms of the contract, cannot be considered."47
The allegation that the defendants-appellees acquired stockholdings far in excess of what they were lawfully entitled, in
violation of law and in breach of trust and of contractual agreement, is also mere conclusion of law.
Of course, the allegation that there was a violation of trust duty was plainly a conclusion of law, for "a mere allegation that it
was the duty of a party to do this or that, or that he was guilty of a breach of duty, is a statement of a conclusion, not of
fact." 48
 "An averment . . . that an act was 'unlawful' or 'wrongful' is a mere legal conclusion or opinion of the
pleader." 49
Moreover, plaintiffs-appellants did not state in the complaint the amount of subscription the individual defendants-appellees
were entitled to; hence there was no basis for the court to determine what amount subscribed to by them was excessive.
From what has been said, it is clear that the ultimate facts stated under the first cause of action are not sufficient to constitute a
cause of action.
The further allegations in the second cause of action that the calling of a special meeting was "falsely certified", that the seventh
position of Director was "illegally created" and that defendant Alfonso Juan Olondriz was "not competent or qualified" to be a
director are mere conclusions of law, the same not being necessarily inferable from the ultimate facts stated in the first and
second causes of action. It has been held in this connection that:
"An averment that . . . an act was 'unlawful' or 'wrongful' is a mere legal conclusion or opinion of the
pleader. The same is true of allegations that an instrument was 'illegally' certified or . . . that an act was
'arbitrarily' done . . ." 50
"A pleader states a mere conclusion when he makes any of the following allegations: that a party was
incapacitated to enter into a contract or convey property . . ." 51
The third, fourth, fifth and sixth causes of action depended on the first cause of action, which, as has been shown, did not state
ultimate facts sufficient to constitute a cause of action. It stands to reason, therefore, that said causes of action would also be
fatally defective. pred
It having been shown that the complaint failed to state ultimate facts to constitute a cause of action, it becomes unnecessary to
discuss the other assignments of errors.
WHEREFORE, the instant appeal is dismissed, and the order dated March 21, 1964 of the Court of First Instance of Manila
dismissing the complaint in Civil Case No. 55810 is affirmed, with costs in this instance against appellants.
It is so ordered.
Fernando, Barredo, Fernandez and Aquino, JJ ., concur.
||| (Mathay v. Consolidated Bank and Trust Co., G.R. No. L-23136, [August 26, 1974], 157 PHIL 551-578)
 [G.R. No. L-63559. May 30, 1986.]
NEWSWEEK, INC., petitioner, vs. THE INTERMEDIATE APPELLATE COURT, and NATIONAL FEDERATION OF
SUGARCANE PLANTERS INC., BINALBAGAN-ISABELA PLANTERS ASSOCIATION, INC., ASOCIACION DE
AGRICULTORES DE LA CARLOTA, LA CASTELLANA y PONTEVEDRA, INC., DONEDCO PLANTERS
ASSOCIATION INC., ARMANDO GUSTILO, ENRIQUE ROJAS, ALFREDO MONTELIBANO, JR., PABLO SOLA,
JOSE MONTALVO, VICENTE GUSTILO, JOSEPH MARANON, ROBERTO CUENCA, JOSE SICANGCO, FLORENCIO
ALONSO, MIGUEL GATUSLAO, PEDRO YULO, MARINO RUBIN and BENJAMIN BAUTISTA, respondents.
SYLLABUS
1. REMEDIAL LAW; CRIMINAL PROCEDURE; LIBEL; VICTIM MUST BE IDENTIFIABLE. — In the case of Corpus vs. Cuaderno, Sr. (16
SCRA 807) this Court ruled that "in order to maintain a libel suit, it is essential that the victim be identifiable (People vs. Monton,
L-16772, November 30, 1962), although it is not necessary that he be named (19 A.L.R. 116)." In an earlier case, this Court
declared that ". . . defamatory matter which does not reveal the identity of the person whom the imputation is case, affords no
ground of action unless it be shown that the readers of the libel could have identified the personality of the individual
defamed." (Kunkle vs. Cablenews-American and Lyons, 42 Phil. 760). This principle has been recognized to be of vital
importance, especially where a group or class of persons, as in the case at bar, claim to have been defamed, for it is evident that
the larger the collectivity , the more difficult it is for the individual member to prove that the defamatory remarks apply to him.
(Cf. 70 ALR 2d. 1384).
2. ID.; ID.; ID.; DEFAMATORY REMARKS DIRECTED AT A CLASS OR GROUP OF PERSONS MUST BE SO SWEEPING OR ALL-
EMBRACING AS TO APPLY TO EVERY INDIVIDUAL IN THAT GROUP OR CLASS. — In the case of Uy Tioco vs. Yang Shu Wen, 32 Phil.
624, this Court held as follows: "Defamatory remarks directed at a class or group of persons in general language only, are not
actionable by individuals composing the class or group unless the statements are sweeping; and it is very probable that even
then no action would lie where the body is composed of so large a number of persons that common sense would tell those to
whom the publication was made that there was room for persons connected with the body to pursue an upright and law
abiding course and that it would be unreasonable and absurd to condemn all because of the actions of a part." It is evident from
the above ruling that where the defamation is alleged to have been directed at a group or class, it is essential that the statement
must be so sweeping or all-embracing as to apply to every individual in that group or class, or sufficiently specific so that each
individual in the class or group can prove that the defamatory statement specifically pointed to him, so that he can bring the
action separately, if need be.
3. ID.; ID.; ID.; CLASS SUIT; NOT A CASE OF; PLAINTIFFS DO NOT HAVE A COMMON INTEREST IN THE SUBJECT MATTER OF
CONTROVERSY. — We note that private respondents filed a "class suit" in representation of all the 8,500 sugarcane planters of
Negros Occidental. Petitioner disagrees and argues that the absence of any actionable basis in the complaint cannot be cured by
the filing of a class suit on behalf of the aforesaid sugar planters. We find petitioner's contention meritorious. The case at bar is
not a class suit. It is not a case where one or more may sue for the benefit of all (Mathay vs. Consolidated Band and Trust
Company, 58 SCRA 559) or where the representation of class interest affected by the judgment or decree is indispensable to
make each member of the class an actual party (Borlaza vs. Polistico, 47 Phil. 348). We have here a case where each of the
plaintiff has a separate and distinct reputation in the community. They do not have a common or general interest in the subject
matter of the controversy.
4. CONSTITUTIONAL LAW; BILL OF RIGHTS; FREEDOM OF SPEECH AND PRESS; REPORT REFERRING TO AN OFFICIAL ACT
PERFORMED BY AN ELECTIVE PUBLIC OFFICIAL, WITHIN THE REALMS OF THE PRIVILEGE. — The disputed portion of the article
which refers to plaintiff Sola and which was claimed to be libelous never singled out plaintiff Sola as a sugar planter. The news
report merely stated that the victim had been arrested by members of a special police unit brought into the area by Pablo Sola,
the mayor of Kabankalan. Hence, the report, referring as it does not an official act performed by an elective public official, is
within the realm of privilege and protected by the constitutional guarantees of free speech and press. The article further stated
that Sola and the commander of the special police unit were arrested. The Court takes judicial notice of this fact. (People vs.
Sola, 103 SCRA 393).
5. REMEDIAL LAW; CIVIL PROCEDURE; APPEALS; AN ORDER DENYING A MOTION TO DISMISS, MERELY INTERLOCUTORY AND
CANNOT BE THE SUBJECT OF AN APPEAL. — As a general rule, an order denying a motion to dismiss is merely interlocutory and
cannot be subject of appeal until final judgment or order is rendered. (Sec. 2 of Rule 41). The ordinary procedure to be followed
in such a case is to file an answer, go to trial and if the decision is adverse, reiterate the issue on appeal from the final judgment.
The same rule applies to an order denying a motion to quash, except that instead of filing an answer a plea is entered and no
appeal lies from a judgment of acquittal.
6. ID.; ID.; ID.; ID.; EXCEPTIONS. — This general rule is subject to certain exceptions. If the court, in denying the motion to
dismiss or motion to quash, acts without or in excess of jurisdiction or with grave abuse of discretion, then certiorari or
prohibition lies. The reason is that it would be unfair to require the defendant or accused to undergo the ordeal and expense of
a trial if the court has no jurisdiction over the subject matter or offense, or is not the court of proper venue, or if the denial of
the motion to dismiss or motion to quash is made with grave abuse of discretion or a whimsical and capricious exercise of
judgment. In such cases, the ordinary remedy of appeal cannot be plain and adequate.
DECISION
FERIA, J p:
Petitioner, Newsweek, Inc., a foreign corporation licensed to do business in the Philippines, in this special action for certiorari,
prohibition with preliminary injunction, seeks to annul the decision of the Intermediate Appellate Court dated December 17,
1982 sustaining the Order of the then Court of First Instance of Bacolod City which denied petitioner's Motion to Dismiss the
complaint for libel filed by private respondents (Civil Case No. 15812), and the Resolution dated March 10, 1983 which denied
its Motion for Reconsideration.
It appears that on March 5, 1981, private respondents, incorporated associations of sugarcane planters in Negros Occidental
claiming to have 8,500 members and several individual sugar planters, filed Civil Case No. 15812 in their own behalf and/or as a
class suit in behalf of all sugarcane planters in the province of Negros Occidental, against petitioner and two of petitioners' non-
resident correspondents/reporters Fred Bruning and Barry Came. The complaint alleged that petitioner and the other
defendants committed libel against them by the publication of the article "An Island of Fear" in the February 23, 1981 issue of
petitioner's weekly news magazine Newsweek. The article supposedly portrayed the island province of Negros Occidental as a
place dominated by big landowners or sugarcane planters who not only exploited the impoverished and underpaid sugarcane
workers/laborers, but also brutalized and killed them with impunity. Complainants therein alleged that said article, taken as a
whole, showed a deliberate and malicious use of falsehood, slanted presentation and/or misrepresentation of facts intended to
put them (sugarcane planters) in bad light, expose them to public ridicule, discredit and humiliation here in the Philippines and
abroad, and make them objects of hatred, contempt and hostility of their agricultural workers and of the public in general. They
prayed that defendants be ordered to pay them P1M as actual and compensatory damages, and such amounts for moral,
exemplary and corrective damages as the court may determine, plus expenses of litigation, attorney's fees and costs of suit. A
photo copy of the article was attached to the complaint. On November 5, 1981, petitioner filed a motion to dismiss on the
grounds that (1) the printed article sued upon is not actionable in fact and in law; and (2) the complaint is bereft of allegations
that state, much less support a cause of action. It pointed out the non-libelous nature of the article and, consequently, the
failure of the complaint to state a cause of action. Private respondents filed an Opposition to the motion to dismiss and
petitioner filed a reply. On March 17, 1982, the trial court denied the motion to dismiss, stating that the grounds on which the
motion to dismiss are predicated are not indubitable as the complaint on its face states a valid cause of action; and the question
as to whether the printed article sued upon its actionable or not is a matter of evidence. Petitioner's motion for reconsideration
was denied on May 28, 1982. On June 18, 1982, petitioner filed a petition for certiorari with respondent Court (CA-G.R. No.
14406) seeking the annulment of the aforecited trial court's Orders for having been issued with such a grave abuse of discretion
as amounting to lack of jurisdiction and praying for the dismissal of the complaint for failure to state a cause of action.
As earlier stated, respondent Court affirmed the trial court's Orders in a Decision dated December 17, 1982 and ordered the
case to be tried on the merits on the grounds that — (1) the complaint contains allegations of fact which called for the
presentation of evidence; and (2) certiorari under Rule 65 cannot be made to substitute for an appeal where an appeal would lie
at a proper time. Subsequently, on March 10, 1983, the respondent Court denied petitioner's Motion for Reconsideration of the
aforesaid decision, hence this petition.
The proper remedy which petitioner should have taken from the decision of respondent Court is an appeal by certiorari under
Rule 45 of the Rules of Court and not the special civil action of certiorari and prohibition under Rule 45 of said Rules. However,
since the petition was filed on time within fifteen days from notice of the Resolution denying the motion for reconsideration, we
shall treat the same as a petition for review on certiorari.
The two (2) issues raised in the petition are: (1) whether or not the private respondents' complaint failed to state a cause of
action; and (2) whether or not the petition for certiorari and prohibition is proper to question the denial of a motion to dismiss
for failure to state a cause of action.
First, petitioner argues that private respondents' complaint failed to state a cause of action because the complaint made no
allegation that anything contained in the article complained of regarding sugarcane planters referred specifically to any one of
the private respondents; that libel can be committed only against individual reputation; and that in cases where libel is claimed
to have been directed at a group, there is actionable defamation only if the libel can be said to reach beyond the mere
collectivity to do damage to a specific, individual group member's reputation.
We agree with petitioner.
In the case of Corpus vs. Cuaderno, Sr. (16 SCRA 807) this Court ruled that "in order to maintain a libel suit, it is essential that
the victim be identifiable (People vs. Monton, L-16772, November 30, 1962), although it is not necessary that he be named (19
A.L.R. 116)." In an earlier case, this Court declared that ". . . defamatory matter which does not reveal the identity of the person
upon whom the imputation is cast, affords no ground of action unless it be shown that the readers of the libel could have
identified the personality of the individual defamed." (Kunkle vs. Cablenews — American and Lyons, 42 Phil. 760).
This principle has been recognized to be of vital importance, especially where a group or class of persons, as in the case at bar,
claim to have been defamed, for it is evident that the larger the collectivity, the more difficult it is for the individual member to
prove that the defamatory remarks apply to him. (Cf. 70 ALR 2d. 1384).
In the case of Uy Tioco vs. Yang Shu Wen, 32 Phil. 624, this Court held as follows:
"Defamatory remarks directed at a class or group of persons in general language only, are not actionable by
individuals composing the class or group unless the statements are sweeping; and it is very probable that
even then no action would he where the body is composed of so large a number of persons that common
sense would tell those to whom the publication was made that there was room for persons connected with
the body to pursue an upright and law abiding course and that it would be unreasonable and absurd to
condemn all because of the actions of a part." (supra, p. 628).
It is evident from the above ruling that where the defamation is alleged to have been directed at a group or class, it is essential
that the statement must be so sweeping or all-embracing as to apply to every individual in that group or class, or sufficiently
specific so that each individual in the class or group can prove that the defamatory statement specifically pointed to him, so that
he can bring the action separately, if need be.
We note that private respondents filed a "class suit" in representation of all the 8,500 sugarcane planters of Negros Occidental.
Petitioner disagrees and argues that the absence of any actionable basis in the complaint cannot be cured by the filing of a class
suit on behalf of the aforesaid sugar planters.
We find petitioner's contention meritorious.
The case at bar is not a class suit. It is not a case where one or more may sue for the benefit of all (Mathay vs. Consolidated
Bank and Trust Company, 58 SCRA 559) or where the representation of class interest affected by the judgment or decree is
indispensable to make each member of the class an actual party (Borlaza vs. Polistico, 47 Phil. 348). We have here a case where
each of the plaintiffs has a separate and distinct reputation in the community. They do not have a common or general interest in
the subject matter of the controversy.
The disputed portion of the article which refers to plaintiff Sola and which was claimed to be libelous never singled out plaintiff
Sola as a sugar planter. The news report merely stated that the victim had been arrested by members of a special police unit
brought into the area by Pablo Sola, the mayor of Kabankalan. Hence, the report, referring as it does to an official act performed
by an elective public official, is within the realm of privilege and protected by the constitutional guarantees of free speech and
press. The article further stated that Sola and the commander of the special police unit were arrested. The Court takes judicial
notice of this fact. (People vs. Sola, 103 SCRA 393.).
The second issue to be resolved here is whether or not the special civil action of certiorari or prohibition is available to
petitioner whose motion to dismiss the complaint and subsequent motion for reconsideration were denied.
As a general rule, an order denying a motion to dismiss is merely interlocutory and cannot be subject of appeal until final
judgment or order is rendered. (Sec. 2 of Rule 41). The ordinary procedure to be followed in such a case is to file an answer, go
to trial and if the decision is adverse, reiterate the issue on appeal from the final judgment. The same rule applies to an order
denying a motion to quash, except that instead of filing an answer a plea is entered and no appeal lies from a judgment of
acquittal. This general rule is subject to certain exceptions. If the court, in denying the motion to dismiss or motion to quash,
acts without or in excess of jurisdiction or with grave abuse of discretion, then certiorari or prohibition lies. The reason is that it
would be unfair to require the defendant or accused to undergo the ordeal and expense of a trial if the court has no jurisdiction
over the subject matter or offense, or is not the court of proper venue, or if the denial of the motion to dismiss or motion to
quash is made with grave abuse of discretion or a whimsical and capricious exercise of judgment. In such cases, the ordinary
remedy of appeal cannot be plain and adequate. The following are a few examples of the exceptions to the general rule.
In De Jesus vs. Garcia (19 SCRA 554), upon the denial of a motion to dismiss based on lack of jurisdiction over the subject
matter, this Court granted the petition for certiorari and prohibition against the City Court of Manila and directed the
respondent court to dismiss the case.
In Lopez vs. City Judge (18 SCRA 616), upon the denial of a motion to quash based on lack of jurisdiction over the offense, this
Court granted the petition for prohibition and enjoined the respondent court from further proceeding in the case.
In Enriquez vs. Macadaeg (84 Phil. 674), upon the denial of a motion to dismiss based on improper venue, this Court granted the
petition for prohibition and enjoined the respondent judge from taking cognizance of the case except to dismiss the same.
In Manalo vs. Mariano (69 SCRA 80), upon the denial of a motion to dismiss based on bar by prior judgment, this Court granted
the petition for certiorari and directed the respondent judge to dismiss the case.
In Yuviengco vs. Dacuycuy (105 SCRA 668), upon the denial of a motion to dismiss based on the Statute of Frauds, this Court
granted the petition for certiorari and dismissed the amended complaint.
In Tacas vs. Cariaso (72 SCRA 527), this Court granted the petition for certiorari after the motion to quash based on double
jeopardy was denied by respondent judge and ordered him to desist from further action in the criminal case except to dismiss
the same.
In People vs. Ramos (83 SCRA 11), the order denying the motion to quash based on prescription was set aside on certiorari and
the criminal case was dismissed by this Court.
Respondent Court correctly stated the general rule and its exceptions. However, it ruled that none of the exceptions is present
in the case at bar and that the case appears complex and complicated, necessitating a full-blown trial to get to the bottom of
the controversy.
Petitioner's motion to dismiss is based on the ground that the complaint states no cause of action against it by pointing out the
non-libelous nature of the article sued upon. There is no need of a trial in view of the conclusion of this Court that the article in
question is not libelous. The specific allegation in the complaint, to the effect that the article attributed to the sugarcane
planters the deaths and brutalization of sugarcane workers, is not borne out by a perusal of the actual text.
The complaint contains a recital of the favorable working conditions of the agricultural workers in the sugar industry and the
various foundations and programs supported by planters' associations for the benefit of their workers. Undoubtedly, the
statements in the article in question are sweeping and exaggerated; but, paraphrasing the ruling in the Uy Tioco case above
quoted, it would be unreasonable and absurd to condemn the majority of the sugarcane planters, who have at heart the
welfare of their workers, because of the actions of a part. Nonetheless, articles such as the one in question may also serve to
prick the consciences of those who have but are not doing anything or enough for those who do not have. On the other hand,
petitioner would do well to heed the admonition of the President to media that they should check the sources of their
information to ensure the publication of the truth. Freedom of the press, like all freedoms, should be exercised with
responsibility.
WHEREFORE, the decision of the Intermediate Appellate Court is reversed and the complaint in Civil Case No. 15812 of the
Court of First Instance of Negros Occidental is dismissed, without pronouncement as to costs.
SO ORDERED.
Teehankee, C.J., Abad Santos, Yap, Fernan, Narvasa, Melencio-Herrera, Alampay, Gutierrez, Jr., Cruz and Paras, JJ., concur.
 [G.R. No. 101083. July 30, 1993.]
JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all surnamed OPOSA, minors, and represented by
their parents ANTONIO and RIZALINA OPOSA, petitioners, vs. THE HONORABLE FULGENCIO S. FACTORAN,
JR., in his capacity as the Secretary of the Department of Environment and Natural Resources, and THE
HONORABLE ERIBERTO U. ROSARIO, Presiding Judge of the RTC, Makati, Branch 66, respondents.
SYLLABUS
1. CONSTITUTIONAL LAW; DECLARATION OF PRINCIPLES AND STATE POLICIES; RIGHT TO A BALANCED AND HEALTHFUL
ECOLOGY, CONSTRUED. — The complaint focuses on one specific fundamental legal right — the right to a balanced and
healthful ecology which, for the first time in our nation's constitutional history, is solemnly incorporated in the fundamental law.
Section 16, Article II of the 1987 Constitution explicitly provides: "SEC. 16. 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." This right unites with the right to
health which is provided for in the preceding section of the same article: "SEC. 15. The State shall protect and promote the right
to health of the people and instill health consciousness among them." While the right to a balanced and healthful ecology is to
be found under the Declaration of Principles and State Policies and not under the Bill of Rights, it does not follow that it is less
important than any of the civil and political rights enumerated in the latter. Such a right belongs to a different category of rights
altogether for it concerns nothing less than self-preservation and self-perpetuation — aptly and fittingly stressed by the
petitioners — the advancement of which may even be said to predate all governments and constitutions. As a matter of fact,
these basic rights need not even be written in the Constitution for they are assumed to exist from the inception of humankind. If
they are now explicitly mentioned in the fundamental charter, it is because of the well-founded fear of its framers that unless
the rights to a balanced and healthful ecology and to health are mandated as state policies by the Constitution itself, thereby
highlighting their continuing importance and imposing upon the state a solemn obligation to preserve the first and protect and
advance the second, the day would not be too far when all else would be lost not only for the present generation, but also for
those to come — generations which stand to inherit nothing but parched earth incapable of sustaining life. The right to a
balanced and healthful ecology carries with it the correlative duty to refrain from impairing the environment.
2. ID.; ID.; TIMBER LICENSES; NATURE THEREOF; NON-IMPAIRMENT CLAUSE MAY NOT BE INVOKED; CASE AT BAR. — all licenses
may thus be revoked or rescinded by executive action. It is not a contract, property or a property right protected by the due
process clause of the Constitution. In Tan vs. Director of Forestry, (125 SCRA 302, 325 [1983]) This Court held: ". . . A timber
license is an instrument by which the State regulates the utilization and disposition of forest resources to the end that public
welfare is promoted. A timber license is not a contract within the purview of the due process clause; it is only a license or
privilege, which can be validly withdrawn whenever dictated by public interest or public welfare as in this case. 'A license is
merely a permit or privilege to do what otherwise would be unlawful, and is not a contract between the authority, federal,
state, or municipal, granting it and the person to whom it is granted; neither is it property or a property right, nor does it create
a vested right; nor is it taxation' (37 C.J. 168). Thus, this Court held that the granting of license does not create irrevocable
rights, neither is it property or property rights (People vs. Ong Tin, 54 O.G. 7576) . . ." We reiterated this pronouncement
in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary: (190 SCRA 673 684 [1990]) ". . . Timber licenses, permits and
license agreements are the principal instruments by which the State regulates the utilization and disposition of forest resources
to the end that public welfare is promoted. And it can hardly be gainsaid that they merely evidence a privilege granted by the
State to qualified entities, and do not vest in the latter a permanent or irrevocable right to the particular concession area and
the forest products therein. They may be validly amended, modified, replaced or rescinded by the Chief Executive when
national interests so require. Thus, they are not deemed contracts within the purview of the due process of law clause
[See Sections 3(ee) and 20 of Pres. Decree No. 705, as amended. Also, Tan v. Director of Forestry,G.R. No. L-24548, October 27,
1983, 125 SCRA 302]." Since timber licenses are not contracts, the non-impairment clause, which reads: "SEC. 10. No law
impairing the obligation of contracts shall be passed." In the second place, even if it is to be assumed that the same are
contracts, the instant case does not involve a law or even an executive issuance declaring the cancellation or modification of
existing timber licenses. Hence, the non-impairment clause cannot as yet be invoked. Nevertheless, granting further that a law
has actually been passed mandating cancellations or modifications, the same cannot still be stigmatized as a violation of the
non-impairment clause. This is because by its very nature and purpose, such a law could have only been passed in the exercise
of the police power of the state for the purpose of advancing the right of the people to a balanced and healthful ecology,
promoting their health and enhancing the general welfare. In Abe vs. Foster Wheeler Corp., (110 Phil. 198, 203 [1960]) this Court
stated: "The freedom of contract, under our system of government, is not meant to be absolute. The same is understood to be
subject to reasonable legislative regulation aimed at the promotion of public health, moral, safety and welfare. In other words,
the constitutional guaranty of non-impairment of obligations of contract is limited by the exercise of the police power of the
State, in the interest of public health, safety, moral and general welfare." The reason for this is emphatically set forth in Nebia
vs. New York, (291 U.S. 502, 523, 78 L. ed. 940 947-949) quoted in Philippine American Life Insurance Co. vs. Auditor General, (22
SCRA 135, 146-147 [1968]) to wit: "'Under our form of government the use of property and the making of contracts are
normally matters of private and not of public concern. The general rule is that both shall be free of governmental interference.
But neither property rights nor contract rights are absolute; for government cannot exist if the citizen may at will use his
property to the detriment of his fellows, or exercise his freedom of contract to work them harm. Equally fundamental with the
private right is that of the public to regulate it in the common interest.'" In court, the non-impairment clause must yield to the
police power of the state. (Ongsiako vs. Gamboa, 86 Phil. 50 [1950]; Abe vs. Foster Wheeler Corp., supra; Phil. American Life
Insurance Co. vs. Auditor General, supra; Alalyan vs. NLRC, 24 scra 172 [1968]; Victoriano vs. Elizalde Rope Workers Union, 59
SCRA 54 [1974]; Kabiling vs. National Housing Authority, 156 SCRA 623 [1987]).
3. ID.; JUDICIAL REVIEW; NO LONGER IMPAIRED BY THE POLITICAL QUESTION DOCTRINE; RATIONALE. — It must, nonetheless,
be emphasized that the political question doctrine is no longer the insurmountable obstacle to the exercise of judicial power or
the impenetrable shield that protects executive and legislative actions from judicial inquiry or review. The second paragraph of
section 1, Article VIII of the Constitution states 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." Commenting on this provision in his book, Philippine Political Law, Mr. Justice Isagani A. Cruz, a distinguished
member of this Court, says: "The first part of the authority represents the traditional concept of judicial power, involving the
settlement of conflicting rights as conferred by law. The second part of the authority represents a broadening of judicial power
to enable the courts of justice to review what was before forbidden territory, to wit, the discretion of the political departments
of the government. As worded, the new provision vests in the judiciary, and particularly the Supreme Court, the power to rule
upon even the wisdom of the decisions of the executive and the legislature and to declare their acts invalid for lack or excess of
jurisdiction because tainted with grave abuse of discretion. The catch, of course, is the meaning of 'grave abuse of discretion,'
which is a very elastic phrase that can expand or contract according to the disposition of the judiciary." In Daza vs. Singson, (180
SCRA 496, 501-502 [1989]. See also Coseteng vs. Mitra, 187 SCRA 377 [1990]; Gonzales vs. Macaraig, 191 SCRA 844 [1991];
Bengzon vs. Senate Blue Ribbon Committee, 203 SCRA 767 [1991]) Mr. Justice Cruz, now speaking for this Court, noted: "In the
case now before us, the jurisdictional objection becomes even less tenable and decisive. The reason is that, even if we were to
assume that the issue presented before us was political in nature, we would still not be precluded from resolving it under the
expanded jurisdiction conferred upon us that now covers, in proper cases, even the political question. Article VII, Section 1,
of the Constitution clearly provides: . . ."
4. REMEDIAL LAW; PLEADINGS; CAUSE OF ACTION, DEFINED; CASE AT BAR. — the right of the petitioners (and all those they
represent) to a balanced and healthful ecology is as clear as the DENR's duty — under its mandate and by virtue of its powers
and functions under E.O. No. 192 and the Administrative Code of 1987 — to protect and advance the said right. A denial or
violation of that right by the other who has the correlative duty or obligation to respect or protect the same gives rise to a cause
of action. Petitioners maintain that the granting of the TLAs, which they claim was done with grave abuse of discretion, violated
their right to a balanced and healthful ecology; hence, the full protection thereof requires that no further TLAs should be
renewed or granted. A cause of action is defined as: ". . . an act or omission of one party in violation of the legal right or rights of
the other; and its essential elements are legal right of the plaintiff, correlative obligation of the defendant, and act or omission
of the defendant in violation of said legal right." (Marao Sugar Central Co. vs. Barrios, 79 Phil. 666 [1947]; Community
Investment and Finance Corp. vs. Garcia, 88 Phil. 215 [1951]; Remitere vs. vda. de Yulo, 16 SCRA 251 [1966]; Caseñas vs. Rosales,
19 SCRA 462 [1967]; Virata vs.Sandiganbayan, 202 SCRA 680 [1991]; Madrona vs. Rosal, 204 SCRA 1 [1991].
5. ID.; ID.; MOTION TO DISMISS; LACK OF CAUSE OF ACTION, AS A GROUND; RULE; CASE AT BAR. — It is settled in this
jurisdiction that in a motion to dismiss based on the ground that the complaint fails to state a cause of action, the question
submitted to the court for resolution involves the sufficiency of the facts alleged in the complaint itself. No other matter should
be considered; furthermore, the truth or falsity of the said allegations is beside the point for the truth thereof is deemed
hypothetically admitted. The only issue to be resolved in such a case is: admitting such alleged facts to be true, may the court
render a valid judgment in accordance with the prayer in the complaint? In Militante vs. Edrosolano, this Court laid down the
rule that the judiciary should "exercise the utmost care and circumspection in passing upon a motion to dismiss on the ground
of the absence thereof [cause of action] lest, by its failure to manifest a correct appreciation of the facts alleged and deemed
hypothetically admitted, what the law grants or recognizes is effectively nullified. If that happens, there is a blot on the legal
order. The law itself stands in disrepute." After a careful examination of the petitioners' complaint, We find the statements
under the introductory affirmative allegations, as well as the specific averments under the subheading CAUSE OF ACTION, to be
adequate enough to show, prima facie, the claimed violation of their rights. On the basis thereof, they may thus be granted,
wholly or partly, the reliefs prayed for.
FELICIANO, J., concurring:
1. REMEDIAL LAW; ACTIONS; LOCUS STANDI, CONSTRUED; CASE AT BAR. — The Court explicitly states that petitioners have
the locus standi necessary to sustain the bringing and maintenance of this suit (Decision, pp. 11-12). Locus standi is not a
function of petitioners' claim that their suit is properly regarded as aclass suit. I understand locus standi to refer to the legal
interest which a plaintiff must have in the subject matter of the suit. Because of the very broadness of the concept of "class"
here involved — membership in this "class" appears to embrace everyone living in the country whether now or in the future —
it appears to me that everyone who may be expected to benefit from the course of action petitioners seek to require public
respondents to take, is vested with the necessary locus standi. The Court may be seen therefore to be recognizing
a beneficiaries' right of action in the field of environmental protection, as against both the public administrative agency directly
concerned and the private persons or entities operating in the field or sector of activity involved. Whether such a beneficiaries'
right of action may be found under any and all circumstances, or whether some failure to act, in the first instance, on the part of
the governmental agency concerned must be shown ("prior exhaustion of administrative remedies"), is not discussed in the
decision and presumably is left for future determination in an appropriate case.
2. CONSTITUTIONAL LAW; DECLARATION OF PRINCIPLES AND STATE POLICIES; RIGHT TO "A BALANCE AND HEALTHFUL
ECOLOGY"; INTERPRETATION. — The Court has also declared that the complaint has alleged and focused upon "one specific
fundamental legal right — the right to a balanced and healthful ecology" (Decision, p. 14). There is no question that "the right to
a balanced and healthful ecology" is "fundamental" and that, accordingly, it has been "constitutionalized." But although it is
fundamental in character, I suggest, with very great respect, that it cannot be characterized as "specific," without doing
excessive violence to language. It is in fact very difficult to fashion language more comprehensive in scope and generalized in
character than a right to "a balanced and healthful ecology." The list of particular claims which can be subsumed under this
rubric appears to be entirely open-ended: prevention and control of emission of toxic fumes and smoke from factories and
motor vehicles; of discharge of oil, chemical effluents, garbage and raw sewage into rivers, inland and coastal waters by vessels,
oil rigs, factories, mines and whole communities; of dumping of organic and inorganic wastes on open land, streets and
thoroughfares; failure to rehabilitate land after strip-mining or open-pit mining; kaingin or slash-and-burn farming; destruction
of fisheries, coral reefs and other living sea resources through the use of dynamite or cyanide and other chemicals;
contamination of ground water resources; loss of certain species of fauna and flora; and so on. The other statements pointed
out by the Court: Section 3, Executive Order No. 192 dated 10 June 1987; Section 1, Title XIV, Book IV of the 1987 Administrative
Code; and P.D. No. 1151, dated 6 June 1977 — all appear to be formulations of policy, as general and abstract as the
constitutional statements of basic policy in Article II, Sections 16 ("the right — to a balanced and healthful ecology") and 15
("the right to health"). As a matter of logic, by finding petitioners' cause of action as anchored on a legal right comprised in the
constitutional statements above noted, the Court is in effect saying that Section 15 (and Section 16) of Article II of the
Constitution are self-executing and judicially enforceable even in their present form. The implications of this doctrine will have
to be explored in future cases; those implications are too large and far-reaching in nature even to be hinted at here.
3. ID.; RIGHT TO HEALTH; SHOULD SPECIFICALLY EXIST IN OUR CORPUS OF LAW. — Justice Feliciano suggestion is simply that
petitioners must, before the trial court, show a more specific legal right — a right cast in language of a significantly lower order
of generality than Article II (15) of the Constitution — that is or may be violated by the actions, or failures to act, imputed to the
public respondent by petitioners so that the trial court can validly render judgment granting all or part of the relief prayed for.
To my mind, the Court should be understood as simply saying that such a more specific legal right or rights may well exist in
our corpus of law, considering the general policy principles found in the Constitution and the existence of the Philippine
Environment Code, and that the trial court should have given petitioners an effective opportunity so to demonstrate, instead of
aborting the proceedings on a motion to dismiss.
4. REMEDIAL LAW; CIVIL PROCEDURE; CAUSE OF ACTION; LEGAL RIGHTS, AS ESSENTIAL COMPONENTS; STANDARDS. — the legal
right which is an essential component of a cause of action be a specific, operable legal right, rather than a constitutional or
statutory policy, for at least two (2) reasons. One is that unless the legal right claimed to have been violated or disregarded is
given specification in operational terms, defendants may well be unable to defend themselves intelligently and effectively; in
other words, there are due process dimensions to this matter. The second is a broader-gauge consideration — where a specific
violation of law or applicable regulation is not alleged or proved, petitioners can be expected to fall back on the expanded
conception of judicial power in the second paragraph of Section 1 of Article VIII of the Constitution which reads: "Section 1 . . .
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 discretionamounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of the Government." When substantive standards as general
as "the right to a balanced and healthy ecology" and "the right to health" are combined with remedial standards as broad
ranging as "a grave abuse of discretion amounting to lack or excess of jurisdiction," the result will be, it is respectfully submitted,
to propel courts into the uncharted ocean of social and economic policy making. At least in respect of the vast area of
environmental protection and management, our courts have no claim to special technical competence and experience and
professional qualifications. Where no specific, operable norms and standards are shown to exist, then the policy making
departments — the legislative and executive departments — must be given a real and effective opportunity to fashion and
promulgate those norms and standards, and to implement them before the courts should intervene.
DECISION
DAVIDE, JR., J p:
In a broader sense, this petition bears upon the right of Filipinos to a balanced and healthful ecology which the petitioners
dramatically associate with the twin concepts of "inter-generational responsibility" and "inter-generational justice." Specifically,
it touches on the issue of whether the said petitioners have a cause of action to "prevent the misappropriation or impairment"
of Philippine rainforests and "arrest the unabated hemorrhage of the country's vital life-support systems and continued rape of
Mother Earth."
The controversy has its genesis in Civil Case No. 90-777 which was filed before Branch 66 (Makati, Metro Manila) of the Regional
Trial Court (RTC), National Capital Judicial Region. The principal plaintiffs therein, now the principal petitioners, are all minors
duly represented and joined by their respective parents. Impleaded as an additional plaintiff is the Philippine Ecological
Network, Inc. (PENI), a domestic, non-stock and non-profit corporation organized for the purpose of, inter alia, engaging in
concerted action geared for the protection of our environment and natural resources. The original defendant was the
Honorable Fulgencio S. Factoran, Jr., then Secretary of the Department of Environment and Natural Resources (DENR). His
substitution in this petition by the new Secretary, the Honorable Angel C. Alcala, was subsequently ordered upon proper motion
by the petitioners. 1 The complaint 2 was instituted as a taxpayers' class suit 3 and alleges that the plaintiffs "are all citizens of
the Republic of the Philippines, taxpayers, and entitled to the full benefit, use and enjoyment of the natural resource treasure
that is the country's virgin tropical rainforests." The same was filed for themselves and others who are equally concerned about
the preservation of said resource but are "so numerous that it is impracticable to bring them all before the Court." The minors
further asseverate that they "represent their generation as well as generations yet unborn." 4Consequently, it is prayed for that
judgment be rendered:
". . . ordering defendant, his agents, representatives and other persons acting in his behalf to —
(1) Cancel all existing timber license agreements in the country;
(2) Cease and desist from receiving, accepting, processing, renewing or approving new timber license
agreements."
 and granting the plaintiffs ". . . such other reliefs just and equitable under the premises." 5
The complaint starts off with the general averments that the Philippine archipelago of 7,100 islands has a land area of thirty
million (30,000,000) hectares and is endowed with rich, lush and verdant rainforests in which varied, rare and unique species of
flora and fauna may be found; these rainforests contain a genetic, biological and chemical pool which is irreplaceable; they are
also the habitat of indigenous Philippine cultures which have existed, endured and flourished since time immemorial; scientific
evidence reveals that in order to maintain a balanced and healthful ecology, the country's land area should be utilized on the
basis of a ratio of fifty-four per cent (54%) for forest cover and forty-six per cent (46%) for agricultural, residential, industrial,
commercial and other uses; the distortion and disturbance of this balance as a consequence of deforestation have resulted in a
host of environmental tragedies, such as (a) water shortages resulting from the drying up of the water table, otherwise known
as the "aquifer," as well as of rivers, brooks and streams, (b) salinization of the water table as a result of the intrusion therein of
salt water, incontrovertible examples of which may be found in the island of Cebu and the Municipality of Bacoor, Cavite, (c)
massive erosion and the consequential loss of soil fertility and agricultural productivity, with the volume of soil eroded
estimated at one billion (1,000,000,000) cubic meters per annum — approximately the size of the entire island of Catanduanes,
(d) the endangering and extinction of the country's unique, rare and varied flora and fauna, (e) the disturbance and dislocation
of cultural communities, including the disappearance of the Filipino's indigenous cultures, (f) the siltation of rivers and seabeds
and consequential destruction of corals and other aquatic life leading to a critical reduction in marine resource productivity, (g)
recurrent spells of drought as is presently experienced by the entire country, (h) increasing velocity of typhoon winds which
result from the absence of windbreakers, (i) the flooding of lowlands and agricultural plains arising from the absence of the
absorbent mechanism of forests, (j) the siltation and shortening of the lifespan of multi-billion peso dams constructed and
operated for the purpose of supplying water for domestic uses, irrigation and the generation of electric power, and (k) the
reduction of the earth's capacity to process carbon dioxide gases which has led to perplexing and catastrophic climatic changes
such as the phenomenon of global warming, otherwise known as the "greenhouse effect."
Plaintiffs further assert that the adverse and detrimental consequences of continued deforestation are so capable of
unquestionable demonstration that the same may be submitted as a matter of judicial notice. This notwithstanding, they
expressed their intention to present expert witnesses as well as documentary, photographic and film evidence in the course of
the trial.
As their cause of action, they specifically allege that:
"CAUSE OF ACTION
7. Plaintiffs replead by reference the foregoing allegations.
8. Twenty-five (25) years ago, the Philippines had some sixteen (16) million hectares of rainforests
constituting roughly 53% of the country's land mass.
9. Satellite images taken in 1987 reveal that there remained no more than 1.2 million hectares of said
rainforests or four per cent (4.0%) of the country's land area.
10. More recent surveys reveal that a mere 850,000 hectares of virgin old-growth rainforests are left, barely
2.8% of the entire land mass of the Philippine archipelago and about 3.0 million hectares of immature and
uneconomical secondary growth forests.
11. Public records reveal that defendant's predecessors have granted timber license agreements ('TLA's') to
various corporations to cut the aggregate area of 3.89 million hectares for commercial logging purposes.
A copy of the TLA holders and the corresponding areas covered is hereto attached as Annex 'A'.
12. At the present rate of deforestation, i.e. about 200,000 hectares per annum or 25 hectares per hour —
nighttime, Saturdays, Sundays and holidays included — the Philippines will be bereft of forest resources
after the end of this ensuing decade, if not earlier.
13. The adverse effects, disastrous consequences, serious injury and irreparable damage of this continued
trend of deforestation to the plaintiff minors' generation and to generations yet unborn are evident and
incontrovertible. As a matter of fact, the environmental damages enumerated in paragraph 6 hereof are
already being felt, experienced and suffered by the generation of plaintiff adults.
14. The continued allowance by defendant of TLA holders to cut and deforest the remaining forest stands
will work great damage and irreparable injury to plaintiffs — especially plaintiff minors and their successors
— who may never see, use, benefit from and enjoy this rare and unique natural resource treasure.
This act of defendant constitutes a misappropriation and/or impairment of the natural resource property he
holds in trust for the benefit of plaintiff minors and succeeding generations.
15. Plaintiffs have a clear and constitutional right to a balanced and healthful ecology and are entitled to
protection by the State in its capacity as theparens patriae.
16. Plaintiffs have exhausted all administrative remedies with the defendant's office. On March 2, 1990,
plaintiffs served upon defendant a final demand to cancel all logging permits in the country.
A copy of the plaintiffs' letter dated March 1, 1990 is hereto attached as Annex 'B'.
17. Defendant, however, fails and refuses to cancel the existing TLA's, to the continuing serious damage and
extreme prejudice of plaintiffs.
18. The continued failure and refusal by defendant to cancel the TLA's is an act violative of the rights of
plaintiffs, especially plaintiff minors who may be left with a country that is desertified (sic), bare, barren and
devoid of the wonderful flora, fauna and indigenous cultures which the Philippines has been abundantly
blessed with.
 19. Defendant's refusal to cancel the aforementioned TLA's is manifestly contrary to the public policy
enunciated in the Philippine Environmental Policy which, in pertinent part, states that it is the policy of the
State —
'(a) to create, develop, maintain and improve conditions under which man and nature can
thrive in productive and enjoyable harmony with each other;
'(b) to fulfill the social, economic and other requirements of present and future
generations of Filipinos and;
'(c) to ensure the attainment of an environmental quality that is conducive to a life of
dignity and well-being'. (P.D. 1151, 6 June 1977).
20. Furthermore, defendant's continued refusal to cancel the aforementioned TLA's is contradictory to the
Constitutional policy of the State to —
a. effect 'a more equitable distribution of opportunities, income and wealth' and 'make full
and efficient use of natural resources (sic).' (Section 1, Article XII of the Constitution);
b. 'protect the nation's marine wealth.' (Section 2, ibid);
c. 'conserve and promote the nation's cultural heritage and resources (sic).' (Section 14,
Article XIV, id.);
d. 'protect and advance the right of the people to a balanced and healthful ecology in
accord with the rhythm and harmony of nature.' (Section 16, Article II, id.)
21. Finally, defendant's act is contrary to the highest law of humankind — the natural law — and violative of
plaintiffs' right to self-preservation and perpetuation.
22. There is no other plain, speedy and adequate remedy in law other than the instant action to arrest the
unabated hemorrhage of the country's vital life-support systems and continued rape of Mother Earth." 6
On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a Motion to Dismiss the complaint based on two (2)
grounds, namely: (1) the plaintiffs have no cause of action against him and (2) the issue raised by the plaintiffs is a political
question which properly pertains to the legislative or executive branches of Government. In their 12 July 1990 Opposition to the
Motion, the petitioners maintain that (1) the complaint shows a clear and unmistakable cause of action, (2) the motion is
dilatory and (3) the action presents a justiciable question as it involves the defendant's abuse of discretion.
On 18 July 1991, respondent Judge issued an order granting the aforementioned motion to dismiss. 7 In the said order, not only
was the defendant's claim — that the complaint states no cause of action against him and that it raises a political question —
sustained, the respondent Judge further ruled that the granting of the reliefs prayed for would result in the impairment of
contracts which is prohibited by the fundamental law of the land.
Plaintiffs thus filed the instant special civil action for certiorari under Rule 65 of the Revised Rules of Court and ask this Court to
rescind and set aside the dismissal order on the ground that the respondent Judge gravely abused his discretion in dismissing
the action. Again, the parents of the plaintiffs-minors not only represent their children, but have also joined the latter in this
case. 8
On 14 May 1992, We resolved to give due course to the petition and required the parties to submit their respective Memoranda
after the Office of the Solicitor General (OSG) filed a Comment in behalf of the respondents and the petitioners filed a reply
thereto.
Petitioners contend that the complaint clearly and unmistakably states a cause of action as it contains sufficient allegations
concerning their right to a sound environment based on Articles 19, 20 and 21 of the Civil Code (Human Relations), Section 4
of Executive Order (E.O.) No. 192 creating the DENR, Section 3 of Presidential Decree (P.D.) No. 1151 (Philippine Environmental
Policy), Section 16, Article II of the 1987 Constitution recognizing the right of the people to a balanced and healthful ecology, the
concept of generational genocide in Criminal Law and the concept of man's inalienable right to self-preservation and self-
perpetuation embodied in natural law. Petitioners likewise rely on the respondent's correlative obligation, per Section 4 of E.O.
No. 192, the safeguard the people's right to a healthful environment.
It is further claimed that the issue of the respondent Secretary's alleged grave abuse of discretion in granting Timber License
Agreements (TLAs) to cover more areas for logging than what is available involves a judicial question.
Anent the invocation by the respondent Judge of the Constitution's non-impairment clause, petitioners maintain that the same
does not apply in this case because TLAs are not contracts. They likewise submit that even if TLAs may be considered protected
by the said clause, it is well settled that they may still be revoked by the State when public interest so requires.
On the other hand, the respondents aver that the petitioners failed to allege in their complaint a specific legal right violated by
the respondent Secretary for which any relief is provided by law. They see nothing in the complaint but vague and nebulous
allegations concerning an "environmental right" which supposedly entitles the petitioners to the "protection by the state in its
capacity as parens patriae." Such allegations, according to them, do not reveal a valid cause of action. They then reiterate the
theory that the question of whether logging should be permitted in the country is a political question which should be properly
addressed to the executive or legislative branches of Government. They therefore assert that the petitioners' recourse is not to
file an action in court, but to lobby before Congress for the passage of a bill that would ban logging totally.
As to the matter of the cancellation of the TLAs, respondents submit that the same cannot be done by the State without due
process of law. Once issued, a TLA remains effective for a certain period of time — usually for twenty-five (25) years. During its
effectivity, the same can neither be revised nor cancelled unless the holder has been found, after due notice and hearing, to
have violated the terms of the agreement or other forestry laws and regulations. Petitioners' proposition to have all the TLAs
indiscriminately cancelled without the requisite hearing would be violative of the requirements of due process.
Before going any further, We must first focus on some procedural matters. Petitioners instituted Civil Case No. 90-777 as a class
suit. The original defendant and the present respondents did not take issue with this matter. Nevertheless, We hereby rule that
the said civil case is indeed a class suit. The subject matter of the complaint is of common and general interest not just to
several, but to all citizens of the Philippines. Consequently, since the parties are so numerous, it becomes impracticable, if not
totally impossible, to bring all of them before the court. We likewise declare that the plaintiffs therein are numerous and
representative enough to ensure the full protection of all concerned interests. Hence, all the requisites for the filing of a valid
class suit under Section 12, Rule 3 of the Revised Rules of Court are present both in the said civil case and in the instant petition,
the latter being but an incident to the former.
This case, however, has a special and novel element. Petitioners minors assert that they represent their generation as well as
generations yet unborn. We find no difficulty in ruling that they can, for themselves, for others of their generation and for the
succeeding generations, file a class suit. Their personality to sue in behalf of the succeeding generations can only be based on
the concept of intergenerational responsibility insofar as the right to a balanced and healthful ecology is concerned. Such a
right, as hereinafter expounded, considers the "rhythm and harmony of nature." Nature means the created world in its
entirety. 9 Such rhythm and harmony indispensably include, inter alia, the judicious disposition, utilization, management,
renewal and conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural
resources to the end that their exploration, development and utilization be equitably accessible to the present as well as future
generations. 10 Needless to say, every generation has a responsibility to the next to preserve that rhythm and harmony for the
full enjoyment of a balanced and healthful ecology. Put a little differently, the minors' assertion of their right to a sound
environment constitutes, at the same time, the performance of their obligation to ensure the protection of that right for the
generations to come.
The locus standi of the petitioners having thus been addressed, We shall now proceed to the merits of the petition.
After a careful perusal of the complaint in question and a meticulous consideration and evaluation of the issues raised and
arguments adduced by the parties, We do not hesitate to find for the petitioners and rule against the respondent Judge's
challenged order for having been issued with grave abuse of discretion amounting to lack of jurisdiction. The pertinent portions
of the said order read as follows:
xxx xxx xxx
"After a careful and circumspect evaluation of the Complaint, the Court cannot help but agree with the
defendant. For although we believe that plaintiffs have but the noblest of all intentions, it (sic) fell short of
alleging, with sufficient definiteness, a specific legal right they are seeking to enforce and protect, or a
specific legal wrong they are seeking to prevent and redress (Sec. 1, Rule 2, RRC). Furthermore, the Court
notes that the Complaint is replete with vague assumptions and vague conclusions based on unverified
data. In fine, plaintiffs fail to state a cause of action in its Complaint against the herein defendant.
Furthermore, the Court firmly believes that the matter before it, being impressed with political color and
involving a matter of public policy, may not be taken cognizance of by this Court without doing violence to
the sacred principle of 'Separation of Powers' of the three (3) co-equal branches of the Government.
The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the
reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber license agreements in the country and to
cease and desist from receiving, accepting, processing renewing or approving new timber license
agreements. For to do otherwise would amount to 'impairment of contracts' abhored (sic) by the
fundamental law." 11
We do not agree with the trial court's conclusion that the plaintiffs failed to allege with sufficient definiteness a specific legal
right involved or a specific legal wrong committed, and that the complaint is replete with vague assumptions and conclusions
based on unverified data. A reading of the complaint itself belies these conclusions.
The complaint focuses on one specific fundamental legal right — the right to a balanced and healthful ecology which, for the
first time in our nation's constitutional history, is solemnly incorporated in the fundamental law. Section 16, Article II of
the 1987 Constitution explicitly provides:
"SEC. 16. 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."
This right unites with the right to health which is provided for in the preceding section of the same article:
"SEC. 15. The State shall protect and promote the right to health of the people and instill health
consciousness among them."
While the right to a balanced and healthful ecology is to be found under the Declaration of Principles and State Policies and not
under the Bill of Rights, it does not follow that it is less important than any of the civil and political rights enumerated in the
latter. Such a right belongs to a different category of rights altogether for it concerns nothing less than self-preservation and
self-perpetuation — aptly and fittingly stressed by the petitioners — the advancement of which may even be said to predate all
governments and constitutions. As a matter of fact, these basic rights need not even be written in the Constitution for they are
assumed to exist from the inception of humankind. If they are now explicitly mentioned in the fundamental charter, it is
because of the well-founded fear of its framers that unless the rights to a balanced and healthful ecology and to health are
mandated as state policies by the Constitution itself, thereby highlighting their continuing importance and imposing upon the
state a solemn obligation to preserve the first and protect and advance the second, the day would not be too far when all else
would be lost not only for the present generation, but also for those to come — generations which stand to inherit nothing but
parched earth incapable of sustaining life.
The right to a balanced and healthful ecology carries with it the correlative duty to refrain from impairing the environment.
During the debates on this right in one of the plenary sessions of the 1986 Constitutional Commission, the following exchange
transpired between Commissioner Wilfrido Villacorta and Commissioner Adolfo Azcuna who sponsored the section in question:
"MR. VILLACORTA:
Does this section mandate the State to provide sanctions against all forms of pollution — air, water and
noise pollution?
MR. AZCUNA:
Yes, Madam President. The right to healthful (sic) environment necessarily carries with it the correlative
duty of not impairing the same and, therefore, sanctions may be provided for impairment of
environmental balance." 12
The said right implies, among many other things, the judicious management and conservation of the country's forests. Without
such forests, the ecological or environmental balance would be irreversibly disrupted.
Conformably with the enunciated right to a balanced and healthful ecology and the right to health, as well as the other related
provisions of the Constitutionconcerning the conservation, development and utilization of the country's natural
resources, 13 then President Corazon C. Aquino promulgated on 10 June 1987E.O. No. 192, 14 Section 4 of which expressly
mandates that the Department of Environment and Natural Resources "shall be the primary government agency responsible for
the conservation, management, development and proper use of the country's environment and natural resources, specifically
forest and grazing lands, mineral resources, including those in reservation and watershed areas, and lands of the public domain,
as well as the licensing and regulation of all natural resources as may be provided for by law in order to ensure equitable sharing
of the benefits derived therefrom for the welfare of the present and future generations of Filipinos." Section 3 thereof makes
the following statement of policy:
"SEC. 3. Declaration of Policy. — It is hereby declared the policy of the State to ensure the sustainable use,
development, management, renewal, and conservation of the country's forest, mineral, land, off-shore
areas and other natural resources, including the protection and enhancement of the quality of the
environment, and equitable access of the different segments of the population to the development and use
of the country's natural resources, not only for the present generation but for future generations as well. It
is also the policy of the state to recognize and apply a true value system including social and environmental
cost implications relative to their utilization; development and conservation of our natural resources."
This policy declaration is substantially re-stated in Title XIV, Book IV of the Administrative Code of 1987, 15 specifically in Section
1 thereof which reads:
"SEC. 1. Declaration of Policy. — (1) The State shall ensure, for the benefit of the Filipino people, the full
exploration and development as well as the judicious disposition, utilization, management, renewal and
conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other
natural resources, consistent with the necessity of maintaining a sound ecological balance and protecting
and enhancing the quality of the environment and the objective of making the exploration, development
and utilization of such natural resources equitably accessible to the different segments of the present as
well as future generations.
(2) The State shall likewise recognize and apply a true value system that takes into account social and
environmental cost implications relative to the utilization, development and conservation of our natural
resources."
The above provision stresses "the necessity of maintaining a sound ecological balance and protecting and enhancing the quality
of the environment." Section 2 of the same Title, on the other hand, specifically speaks of the mandate of the DENR; however, it
makes particular reference to the fact of the agency's being subject to law and higher authority. Said section provides:
"SEC. 2. Mandate. — (1) The Department of Environment and Natural Resources shall be primarily
responsible for the implementation of the foregoing policy.
(2) It shall, subject to law and higher authority, be in charge of carrying out the State's constitutional
mandate to control and supervise the exploration, development, utilization, and conservation of the
country's natural resources."
Both E.O. No. 192 and the Administrative Code of 1987 have set the objectives which will serve as the bases for policy
formulation, and have defined the powers and functions of the DENR.
It may, however, be recalled that even before the ratification of the 1987 Constitution, specific statutes already paid special
attention to the "environmental right" of the present and future generations. On 6 June 1977, P.D. No. 1151 (Philippine
Environmental Policy) and P.D. No. 1152 (Philippine Environment Code) were issued. The former "declared a continuing policy
of the State (a) to create, develop, maintain and improve conditions under which man and nature can thrive in productive and
enjoyable harmony with each other, (b) to fulfill the social, economic and other requirements of present and future generations
of Filipinos, and (c) to insure the attainment of an environmental quality that is conducive to a life of dignity and well-
being." 16 As its goal, it speaks of the "responsibilities of each generation as trustee and guardian of the environment for
succeeding generations." 17 The latter statute, on the other hand, gave flesh to the said policy.
Thus, the right of the petitioners (and all those they represent) to a balanced and healthful ecology is as clear as the DENR's duty
— under its mandate and by virtue of its powers and functions under E.O. No. 192 and the Administrative Code of 1987 — to
protect and advance the said right.
A denial or violation of that right by the other who has the correlative duty or obligation to respect or protect the same gives
rise to a cause of action. Petitioners maintain that the granting of the TLAs, which they claim was done with grave abuse of
discretion, violated their right to a balanced and healthful ecology; hence, the full protection thereof requires that no further
TLAs should be renewed or granted.
A cause of action is defined as:
". . . an act or omission of one party in violation of the legal right or rights of the other; and its essential
elements are legal right of the plaintiff, correlative obligation of the defendant, and act or omission of the
defendant in violation of said legal right." 18
It is settled in this jurisdiction that in a motion to dismiss based on the ground that the complaint fails to state a cause of
action, 19 the question submitted to the court for resolution involves the sufficiency of the facts alleged in the complaint itself.
No other matter should be considered; furthermore, the truth or falsity of the said allegations is beside the point for the truth
thereof is deemed hypothetically admitted. The only issue to be resolved in such a case is: admitting such alleged facts to be
true, may the court render a valid judgment in accordance with the prayer in the complaint? 20 In Militante
vs. Edrosolano, 21 this Court laid down the rule that the judiciary should "exercise the utmost care and circumspection in
passing upon a motion to dismiss on the ground of the absence thereof [cause of action] lest, by its failure to manifest a correct
appreciation of the facts alleged and deemed hypothetically admitted, what the law grants or recognizes is effectively nullified.
If that happens, there is a blot on the legal order. The law itself stands in disrepute."
After a careful examination of the petitioners' complaint, We find the statements under the introductory affirmative allegations,
as well as the specific averments under the subheading CAUSE OF ACTION, to be adequate enough to show, prima facie, the
claimed violation of their rights. On the basis thereof, they may thus be granted, wholly or partly, the reliefs prayed for. It bears
stressing, however, that insofar as the cancellation of the TLAs is concerned, there is the need to implead, as party defendants,
the grantees thereof for they are indispensable parties.
The foregoing considered, Civil Case No. 90-777 cannot be said to raise a political question. Policy formulation or determination
by the executive or legislative branches of Government is not squarely put in issue. What is principally involved is the
enforcement of a right vis-a-vis policies already formulated and expressed in legislation. It must, nonetheless, be emphasized
that the political question doctrine is no longer the insurmountable obstacle to the exercise of judicial power or the
impenetrable shield that protects executive and legislative actions from judicial inquiry or review. The second paragraph of
section 1, Article VIII of the Constitutionstates 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."
Commenting on this provision in his book, Philippine Political Law, 22 Mr. Justice Isagani A. Cruz, a distinguished member of this
Court, says:
"The first part of the authority represents the traditional concept of judicial power, involving the settlement
of conflicting rights as conferred by law. The second part of the authority represents a broadening of judicial
power to enable the courts of justice to review what was before forbidden territory, to wit, the discretion of
the political departments of the government.

As worded, the new provision vests in the judiciary, and particularly the Supreme Court, the power to rule
upon even the wisdom of the decisions of the executive and the legislature and to declare their acts invalid
for lack or excess of jurisdiction because tainted with grave abuse of discretion. The catch, of course, is the
meaning of 'grave abuse of discretion,' which is a very elastic phrase that can expand or contract according
to the disposition of the judiciary."
In Daza vs. Singson, 23 Mr. Justice Cruz, now speaking for this Court, noted:
"In the case now before us, the jurisdictional objection becomes even less tenable and decisive. The reason
is that, even if we were to assume that the issue presented before us was political in nature, we would still
not be precluded from resolving it under the expanded jurisdiction conferred upon us that now covers, in
proper cases, even the political question. Article VII, Section 1, of the Constitution clearly provides: . . ."
The last ground invoked by the trial court in dismissing the complaint is the non-impairment of contracts clause found in the
Constitution. The court a quo declared that:
"The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the
reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber license agreements in the country and to
cease and desist from receiving, accepting, processing, renewing or approving new timber license
agreements. For to do otherwise would amount to 'impairment of contracts' abhored (sic) by the
fundamental law." 24
We are not persuaded at all; on the contrary, We are amazed, if not shocked, by such a sweeping pronouncement. In the first
place, the respondent Secretary did not, for obvious reasons, even invoke in his motion to dismiss the non-impairment clause. If
he had done so, he would have acted with utmost infidelity to the Government by providing undue and unwarranted benefits
and advantages to the timber license holders because he would have forever bound the Government to strictly respect the said
licenses according to their terms and conditions regardless of changes in policy and the demands of public interest and welfare.
He was aware that as correctly pointed out by the petitioners, into every timber license must be read Section 20 of the Forestry
Reform Code (P.D. No. 705) which provides:
". . . Provided, That when the national interest so requires, the President may amend, modify, replace or
rescind any contract, concession, permit, licenses or any other form of privilege granted herein . . ."
 Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract, property or a
property right protected by the due process clause of the Constitution. In Tan vs. Director of Forestry, 25 this Court held:
". . . A timber license is an instrument by which the State regulates the utilization and disposition of forest
resources to the end that public welfare is promoted. A timber license is not a contract within the purview
of the due process clause; it is only a license or privilege, which can be validly withdrawn whenever dictated
by public interest or public welfare as in this case.
'A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract
between the authority, federal, state, or municipal, granting it and the person to whom it is granted; neither
is it property or a property right, nor does it create a vested right; nor is it taxation' (37 C.J. 168). Thus, this
Court held that the granting of license does not create irrevocable rights, neither is it property or property
rights (People vs. Ong Tin, 54 O.G. 7576) . . ."
We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary: 26
". . . Timber licenses, permits and license agreements are the principal instruments by which the State
regulates the utilization and disposition of forest resources to the end that public welfare is promoted. And
it can hardly be gainsaid that they merely evidence a privilege granted by the State to qualified entities, and
do not vest in the latter a permanent or irrevocable right to the particular concession area and the forest
products therein. They may be validly amended, modified, replaced or rescinded by the Chief Executive
when national interests so require. Thus, they are not deemed contracts within the purview of the due
process of law clause [See Sections 3(ee) and 20 of Pres. Decree No. 705, as amended. Also, Tan v. Director
of Forestry,G.R. No. L-24548, October 27, 1983, 125 SCRA 302]."
Since timber licenses are not contracts, the non-impairment clause, which reads:
"SEC. 10. No law impairing the obligation of contracts shall be passed." 27
cannot be invoked.
In the second place, even if it is to be assumed that the same are contracts, the instant case does not involve a law or even an
executive issuance declaring the cancellation or modification of existing timber licenses. Hence, the non-impairment clause
cannot as yet be invoked. Nevertheless, granting further that a law has actually been passed mandating cancellations or
modifications, the same cannot still be stigmatized as a violation of the non-impairment clause. This is because by its very
nature and purpose, such a law could have only been passed in the exercise of the police power of the state for the purpose of
advancing the right of the people to a balanced and healthful ecology, promoting their health and enhancing the general
welfare. In Abe vs. Foster Wheeler Corp., 28 this Court stated:
"The freedom of contract, under our system of government, is not meant to be absolute. The same is
understood to be subject to reasonable legislative regulation aimed at the promotion of public health,
moral, safety and welfare. In other words, the constitutional guaranty of non-impairment of obligations of
contract is limited by the exercise of the police power of the State, in the interest of public health, safety,
moral and general welfare."
The reason for this is emphatically set forth in Nebia vs. New York, 29 quoted in Philippine American Life Insurance Co. vs.
Auditor General, 30 to wit:
" 'Under our form of government the use of property and the making of contracts are normally matters of
private and not of public concern. The general rule is that both shall be free of governmental interference.
But neither property rights nor contract rights are absolute; for government cannot exist if the citizen may
at will use his property to the detriment of his fellows, or exercise his freedom of contract to work them
harm. Equally fundamental with the private right is that of the public to regulate it in the common interest.'
"
In court, the non-impairment clause must yield to the police power of the state. 31
Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply with respect to the prayer to
enjoin the respondent Secretary from receiving, accepting, processing, renewing or approving new timber licenses for, save in
cases of renewal, no contract would have as of yet existed in the other instances. Moreover, with respect to renewal, the holder
is not entitled to it as a matter of right.
WHEREFORE, being impressed with merit, the instant Petition is hereby GRANTED, and the challenged Order of respondent
Judge of 18 July 1991 dismissing Civil Case No. 90-777 is hereby set aside. The petitioners may therefore amend their complaint
to implead as defendants the holders or grantees of the questioned timber license agreements.
No pronouncement as to costs.
SO ORDERED.
 [G.R. No. 162788. July 28, 2005.]
Spouses JULITA DE LA CRUZ and FELIPE DE LA CRUZ, petitioners, vs. PEDRO JOAQUIN, respondent.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; PARTIES TO CIVIL ACTIONS; WHEN A PARTY TO A PENDING ACTION DIES AND THE CLAIM
IS NOT EXTINGUISHED, SUBSTITUTION OF THE DECEASED IS REQUIRED; PURPOSE. — When a party to a pending action dies and
the claim is not extinguished, the Rules of Court require a substitution of the deceased. The procedure is specifically governed
by Section 16 of Rule 3, . . . . The rule on the substitution of parties was crafted to protect every party's right to due process. The
estate of the deceased party will continue to be properly represented in the suit through the duly appointed legal
representative. Moreover, no adjudication can be made against the successor of the deceased if the fundamental right to a day
in court is denied.
2. ID.; ID.; ID.; ID.; A FORMAL SUBSTITUTION BY HEIRS IS NOT NECESSARY WHEN THEY THEMSELVES VOLUNTARILY APPEAR,
PARTICIPATE IN THE CASE, AND PRESENT EVIDENCE IN DEFENSE OF THE DECEASED. — The Court has nullified not only trial
proceedings conducted without the appearance of the legal representatives of the deceased, but also the resulting judgments.
In those instances, the courts acquired no jurisdiction over the persons of the legal representatives or the heirs upon whom no
judgment was binding. This general rule notwithstanding, a formal substitution by heirs is not necessary when they themselves
voluntarily appear, participate in the case, and present evidence in defense of the deceased. These actions negate any claim
that the right to due process was violated.
3. ID.; ID.; ID.; ID.; RULE ON SUBSTITUTION BY HEIRS IS NOT A MATTER OF JURISDICTION BUT A REQUIREMENT OF DUE
PROCESS. — Strictly speaking, the rule on the substitution by heirs is not a matter of jurisdiction, but a requirement of due
process. Thus, when due process is not violated, as when the right of the representative or heir is recognized and protected,
noncompliance or belated formal compliance with the Rules cannot affect the validity of a promulgated decision. Mere failure
to substitute for a deceased plaintiff is not a sufficient ground to nullify a trial court's decision. The alleging party must prove
that there was an undeniable violation of due process.
4. ID.; ID.; ACTIONS; FORUM SHOPPING; DEFINED. — Forum shopping is the institution of two or more actions or proceedings
involving the same parties for the same cause of action, either simultaneously or successively, on the supposition that one or
the other court would make a favorable disposition. Forum shopping may be resorted to by a party against whom an adverse
judgment or order has been issued in one forum, in an attempt to seek a favorable opinion in another, other than by an appeal
or a special civil action for certiorari.
5. ID.; ID.; ID.; ID.; WILLFUL AND DELIBERATE VIOLATION OF THE RULE ON FORUM SHOPPING IS A GROUND FOR THE SUMMARY
DISMISSAL OF CASE AND CONSTITUTES DIRECT CONTEMPT OF COURT. — Forum shopping trifles with the courts, abuses their
processes, degrades the administration of justice, and congests court dockets. Willful and deliberate violation of the rule against
it is a ground for the summary dismissal of the case; it may also constitute direct contempt of court.
6. ID.; ID.; ID.; ID.; TEST TO DETERMINE ITS EXISTENCE. — The test for determining the existence of forum shopping is whether
the elements of litis pendentia are present, or whether a final judgment in one case amounts to res judicata in another.
7. ID.; ID.; JUDGMENTS; RES JUDICATA; BARS A SUBSEQUENT SUIT INVOLVING THE SAME PARTIES, SUBJECT MATTER, AND
CAUSE OF ACTION. — Under res judicata, a final judgment or decree on the merits by a court of competent jurisdiction is
conclusive of the rights of the parties or their privies, in all later suits and on all points and matters determined in the previous
suit. The term literally means a "matter adjudged, judicially acted upon, or settled by judgment." The principle bars a
subsequent suit involving the same parties, subject matter, and cause of action. Public policy requires that controversies must
be settled with finality at a given point in time.
8. ID.; ID.; ID.; ID.; ELEMENTS OF RES JUDICATA. — The elements of res judicata are as follows: (1) the former judgment or order
must be final; (2) it must have been rendered on the merits of the controversy; (3) the court that rendered it must have had
jurisdiction over the subject matter and the parties; and (4) there must have been — between the first and the second actions
— an identity of parties, subject matter and cause of action.
DECISION
PANGANIBAN, J p:
The Rules require the legal representatives of a dead litigant to be substituted as parties to a litigation. This requirement is
necessitated by due process. Thus, when the rights of the legal representatives of a decedent are actually recognized and
protected, noncompliance or belated formal compliance with the Rules cannot affect the validity of the promulgated decision.
After all, due process had thereby been satisfied.
The Case
Before us is a Petition for Review 1 under Rule 45 of the Rules of Court, assailing the August 26, 2003 Decision 2 and the March
9, 2004 Resolution 3 of the Court of Appeals (CA) in CA-GR CV No. 34702. The challenged Decision disposed as follows:
"WHEREFORE, the foregoing considered, the appeal is DISMISSED and the assailed decision accordingly
AFFIRMED in toto. No costs." 4
On the other hand, the trial court's affirmed Decision disposed as follows:
"WHEREFORE, judgment is hereby rendered:
"a) declaring the Deed of Absolute Sale (Exh. 'D') and 'Kasunduan' (Exhibit B), to be a sale with right
of repurchase;
"b) ordering the plaintiff to pay the defendants the sum of P9,000.00 by way of repurchasing the
land in question;
"c) ordering the defendants to execute a deed of reconveyance of said land in favor of the plaintiff
after the latter has paid them the amount of P9,000.00 to repurchase the land in question;
 "d) ordering the defendants to yield possession of the subject land to the plaintiff after the latter
has paid them the amount of P9,000.00 to repurchase the property from them; and
"e) ordering the defendants to pay the plaintiff the amount of P10,000.00 as actual and
compensatory damages; the amount of P5,000[.00] as exemplary damages; the amount of
P5,000.00 as expenses of litigation and the amount of P5,000.00 by way of attorney's
fees." 5
The Facts
The case originated from a Complaint for the recovery of possession and ownership, the cancellation of title, and damages, filed
by Pedro Joaquin against petitioners in the Regional Trial Court of Baloc, Sto. Domingo, Nueva Ecija. 6 Respondent alleged that
he had obtained a loan from them in the amount of P9,000 on June 29, 1974, payable after five (5) years; that is, on June 29,
1979. To secure the payment of the obligation, he supposedly executed a Deed of Sale in favor of petitioners. The Deed was for
a parcel of land in Pinagpanaan, Talavera, Nueva Ecija, covered by TCT No. T-111802. The parties also executed another
document entitled "Kasunduan." 7
Respondent claimed that the Kasunduan showed the Deed of Sale to be actually an equitable mortgage. 8 Spouses De la Cruz
contended that this document was merely an accommodation to allow the repurchase of the property until June 29, 1979, a
right that he failed to exercise. 9
On April 23, 1990, the RTC issued a Decision in his favor. The trial court declared that the parties had entered into a sale with a
right of repurchase. 10 It further held that respondent had made a valid tender of payment on two separate occasions to
exercise his right of repurchase. 11 Accordingly, petitioners were required to reconvey the property upon his payment. 12
Ruling of the Court of Appeals
Sustaining the trial court, the CA noted that petitioners had given respondent the right to repurchase the property within five
(5) years from the date of the sale or until June 29, 1979. Accordingly, the parties executed the Kasunduan to express the terms
and conditions of their actual agreement. 13 The appellate court also found no reason to overturn the finding that respondent
had validly exercised his right to repurchase the land. 14
In the March 9, 2004 Resolution, the CA denied reconsideration and ordered a substitution by legal representatives, in view of
respondent's death on December 24, 1988. 15
Hence, this Petition. 16
The Issues
Petitioners assign the following errors for our consideration:
"I. Public Respondent Twelfth Division of the Honorable Court of Appeals seriously erred in dismissing the
appeal and affirming in toto the Decision of the trial court in Civil Case No. SD-838; CHDAEc
"II. Public Respondent Twelfth Division of the Honorable Court of Appeals likewise erred in denying
[petitioners'] Motion for Reconsideration given the facts and the law therein presented." 17
Succinctly, the issues are whether the trial court lost jurisdiction over the case upon the death of Pedro Joaquin, and whether
respondent was guilty of forum shopping. 18
The Court's Ruling
The Petition has no merit.
First Issue:
Jurisdiction
Petitioners assert that the RTC's Decision was invalid for lack of jurisdiction. 19 They claim that respondent died during the
pendency of the case. There being no substitution by the heirs, the trial court allegedly lacked jurisdiction over the litigation. 20
Rule on Substitution
When a party to a pending action dies and the claim is not extinguished, 21 the Rules of Court require a substitution of the
deceased. The procedure is specifically governed by Section 16 of Rule 3, which reads thus:
"Section 16. Death of a party; duty of counsel. — Whenever a party to a pending action dies, and the claim is
not thereby extinguished, it shall be the duty of his counsel to inform the court within thirty (30) days after
such death of the fact thereof, and to give the name and address of his legal representative or
representatives. Failure of counsel to comply with this duty shall be a ground for disciplinary action.
"The heirs of the deceased may be allowed to be substituted for the deceased, without requiring the
appointment of an executor or administrator and the court may appoint a guardian ad litem for the minor
heirs.
"The court shall forthwith order said legal representative or representatives to appear and be substituted
within a period of thirty (30) days from notice.
"If no legal representative is named by the counsel for the deceased party, or if the one so named shall fail
to appear within the specified period, the court may order the opposing party, within a specified time, to
procure the appointment of an executor or administrator for the estate of the deceased, and the latter shall
immediately appear for and on behalf of the deceased. The court charges in procuring such appointment, if
defrayed by the opposing party, may be recovered as costs."
The rule on the substitution of parties was crafted to protect every party's right to due process. 22 The estate of the deceased
party will continue to be properly represented in the suit through the duly appointed legal representative. 23 Moreover, no
adjudication can be made against the successor of the deceased if the fundamental right to a day in court is denied. 24 HcTDSA
The Court has nullified not only trial proceedings conducted without the appearance of the legal representatives of the
deceased, but also the resulting judgments.25 In those instances, the courts acquired no jurisdiction over the persons of the
legal representatives or the heirs upon whom no judgment was binding. 26
This general rule notwithstanding, a formal substitution by heirs is not necessary when they themselves voluntarily appear,
participate in the case, and present evidence in defense of the deceased. 27 These actions negate any claim that the right to
due process was violated.
The Court is not unaware of Chittick v. Court of Appeals, 28 in which the failure of the heirs to substitute for the original plaintiff
upon her death led to the nullification of the trial court's Decision. The latter had sought to recover support in arrears and her
share in the conjugal partnership. The children who allegedly substituted for her refused to continue the case against their
father and vehemently objected to their inclusion as parties. 29 Moreover, because he died during the pendency of the case,
they were bound to substitute for the defendant also. The substitution effectively merged the persons of the plaintiff and the
defendant and thus extinguished the obligation being sued upon. 30
Clearly, the present case is not similar, much less identical, to the factual milieu of Chittick.
Strictly speaking, the rule on the substitution by heirs is not a matter of jurisdiction, but a requirement of due process. Thus,
when due process is not violated, as when the right of the representative or heir is recognized and protected, noncompliance or
belated formal compliance with the Rules cannot affect the validity of a promulgated decision. 31 Mere failure to substitute for
a deceased plaintiff is not a sufficient ground to nullify a trial court's decision. The alleging party must prove that there was an
undeniable violation of due process. TECIaH
Substitution in
the Instant Case
The records of the present case contain a "Motion for Substitution of Party Plaintiff" dated February 15, 2002, filed before the
CA. The prayer states as follows:
"WHEREFORE, it is respectfully prayed that the Heirs of the deceased plaintiff-appellee as represented by his
daughter Lourdes dela Cruz be substituted as party-plaintiff for the said Pedro Joaquin.
"It is further prayed that henceforth the undersigned counsel 32 for the heirs of Pedro Joaquin be furnished
with copies of notices, orders, resolutions and other pleadings at its address below."
Evidently, the heirs of Pedro Joaquin voluntary appeared and participated in the case. We stress that the appellate court had
ordered 33 his legal representatives to appear and substitute for him. The substitution even on appeal had been ordered
correctly. In all proceedings, the legal representatives must appear to protect the interests of the deceased. 34 After the
rendition of judgment, further proceedings may be held, such as a motion for reconsideration or a new trial, an appeal, or an
execution. 35

Considering the foregoing circumstances, the Motion for Substitution may be deemed to have been granted; and the heirs, to
have substituted for the deceased, Pedro Joaquin. There being no violation of due process, the issue of substitution cannot be
upheld as a ground to nullify the trial court's Decision.
Second Issue:
Forum Shopping
Petitioners also claim that respondents were guilty of forum shopping, a fact that should have compelled the trial court to
dismiss the Complaint. 36 They claim that prior to the commencement of the present suit on July 7, 1981, respondent had filed
a civil case against petitioners on June 25, 1979. Docketed as Civil Case No. SD-742 for the recovery of possession and for
damages, it was allegedly dismissed by the Court of First Instance of Nueva Ecija for lack of interest to prosecute.
Forum Shopping Defined
Forum shopping is the institution of two or more actions or proceedings involving the same parties for the same cause of action,
either simultaneously or successively, on the supposition that one or the other court would make a favorable
disposition. 37 Forum shopping may be resorted to by a party against whom an adverse judgment or order has been issued in
one forum, in an attempt to seek a favorable opinion in another, other than by an appeal or a special civil action forcertiorari. 38
Forum shopping trifles with the courts, abuses their processes, degrades the administration of justice, and congests court
dockets. 39 Willful and deliberate violation of the rule against it is a ground for the summary dismissal of the case; it may also
constitute direct contempt of court. 40
The test for determining the existence of forum shopping is whether the elements of litis pendentia are present, or whether a
final judgment in one case amounts to res judicata in another. 41 We note, however, petitioners' claim that the subject matter
of the present case has already been litigated and decided. Therefore, the applicable doctrine is res judicata. 42
Applicability of Res Judicata
Under res judicata, a final judgment or decree on the merits by a court of competent jurisdiction is conclusive of the rights of
the parties or their privies, in all later suits and on all points and matters determined in the previous suit. 43 The term literally
means a "matter adjudged, judicially acted upon, or settled by judgment." 44The principle bars a subsequent suit involving the
same parties, subject matter, and cause of action. Public policy requires that controversies must be settled with finality at a
given point in time. IDcHCS
The elements of res judicata are as follows: (1) the former judgment or order must be final; (2) it must have been rendered on
the merits of the controversy; (3) the court that rendered it must have had jurisdiction over the subject matter and the parties;
and (4) there must have been — between the first and the second actions — an identity of parties, subject matter and cause of
action. 45
Failure to Support Allegation
The onus of proving allegations rests upon the party raising them. 46 As to the matter of forum shopping and res judicata,
petitioners have failed to provide this Court with relevant and clear specifications that would show the presence of an identity
of parties, subject matter, and cause of action between the present and the earlier suits. They have also failed to show whether
the other case was decided on the merits. Instead, they have made only bare assertions involving its existence without
reference to its facts. In other words, they have alleged conclusions of law without stating any factual or legal basis. Mere
mention of other civil cases without showing the identity of rights asserted and reliefs sought is not enough basis to claim that
respondent is guilty of forum shopping, or that res judicata exists.47
WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution are AFFIRMED. Costs against petitioners. ASETHC
SO ORDERED.
Sandoval-Gutierrez, Corona, Carpio Morales and Garcia, JJ., concur.
 [G.R. No. 150135. October 30, 2006.]
SPOUSES ANTONIO F. ALGURA and LORENCITA S.J. ALGURA, petitioners, vs. THE LOCAL GOVERNMENT
UNIT OF THE CITY OF NAGA, ATTY. MANUEL TEOXON, ENGR. LEON PALMIANO, NATHAN SERGIO and
BENJAMIN NAVARRO, SR., respondents.
DECISION
VELASCO, JR., J p:
Anyone who has ever struggled with poverty
knows how extremely expensive it is to be poor.
–– James Baldwin
The Constitution affords litigants — moneyed or poor — equal access to the courts; moreover, it specifically provides that
poverty shall not bar any person from having access to the courts. 1 Accordingly, laws and rules must be formulated,
interpreted, and implemented pursuant to the intent and spirit of this constitutional provision. As such, filing fees, though one
of the essential elements in court procedures, should not be an obstacle to poor litigants' opportunity to seek redress for their
grievances before the courts.
The Case
This Petition for Review on Certiorari seeks the annulment of the September 11, 2001 Order of the Regional Trial Court (RTC) of
Naga City, Branch 27, in Civil Case No. 99-4403 entitled Spouses Antonio F. Algura and Lorencita S.J. Algura v. The Local
Government Unit of the City of Naga, et al., dismissing the case for failure of petitioners Algura spouses to pay the required filing
fees. 2 Since the instant petition involves only a question of law based on facts established from the pleadings and documents
submitted by the parties, 3 the Court gives due course to the instant petition sanctioned under Section 2(c) of Rule 41 on Appeal
from the RTCs, and governed by Rule 45 of the 1997 Rules of Civil Procedure.
The Facts
On September 1, 1999, spouses Antonio F. Algura and Lorencita S.J. Algura filed a Verified Complaint dated August 30,
1999 4 for damages against the Naga City Government and its officers, arising from the alleged illegal demolition of their
residence and boarding house and for payment of lost income derived from fees paid by their boarders amounting to PhP
7,000.00 monthly.
Simultaneously, petitioners filed an Ex-Parte Motion to Litigate as Indigent Litigants, 5 to which petitioner Antonio Algura's Pay
Slip No. 2457360 (Annex "A" of motion) was appended, showing a gross monthly income of Ten Thousand Four Hundred
Seventy Four Pesos (PhP 10,474.00) and a net pay of Three Thousand Six Hundred Sixteen Pesos and Ninety Nine Centavos (PhP
3,616.99) for [the month of] July 1999. 6 Also attached as Annex "B" to the motion was a July 14, 1999 Certification 7 issued by
the Office of the City Assessor of Naga City, which stated that petitioners had no property declared in their name for taxation
purposes.
Finding that petitioners' motion to litigate as indigent litigants was meritorious, Executive Judge Jose T. Atienza of the Naga City
RTC, in the September 1, 1999 Order, 8 granted petitioners' plea for exemption from filing fees.
Meanwhile, as a result of respondent Naga City Government's demolition of a portion of petitioners' house, the Alguras
allegedly lost a monthly income of PhP 7,000.00 from their boarders' rentals. With the loss of the rentals, the meager income
from Lorencita Algura's sari-sari store and Antonio Algura's small take home pay became insufficient for the expenses of the
Algura spouses and their six (6) children for their basic needs including food, bills, clothes, and schooling, among others.
On October 13, 1999, respondents filed an Answer with Counterclaim dated October 10, 1999, 9 arguing that the defenses of
the petitioners in the complaint had no cause of action, the spouses' boarding house blocked the road right of way, and said
structure was a nuisance per se.
Praying that the counterclaim of defendants (respondents) be dismissed, petitioners then filed their Reply with Ex-
Parte Request for a Pre-Trial Setting 10 before the Naga City RTC on October 19, 1999. On February 3, 2000, a pre-trial was held
wherein respondents asked for five (5) days within which to file a Motion to Disqualify Petitioners as Indigent Litigants.
On March 13, 2000, respondents filed a Motion to Disqualify the Plaintiffs for Non-Payment of Filing Fees dated March 10,
2000. 11 They asserted that in addition to the more than PhP 3,000.00 net income of petitioner Antonio Algura, who is a
member of the Philippine National Police, spouse Lorencita Algura also had a mini-store and a computer shop on the ground
floor of their residence along Bayawas St., Sta. Cruz, Naga City. Also, respondents claimed that petitioners' second floor was
used as their residence and as a boarding house, from which they earned more than PhP 3,000.00 a month. In addition, it was
claimed that petitioners derived additional income from their computer shop patronized by students and from several boarders
who paid rentals to them. Hence, respondents concluded that petitioners were not indigent litigants.
On March 28, 2000, petitioners subsequently interposed their Opposition to the Motion 12 to respondents' motion to disqualify
them for non-payment of filing fees.
On April 14, 2000, the Naga City RTC issued an Order disqualifying petitioners as indigent litigants on the ground that they failed
to substantiate their claim for exemption from payment of legal fees and to comply with the third paragraph of Rule 141,
Section 18 of the Revised Rules of Court — directing them to pay the requisite filing fees. 13
On April 28, 2000, petitioners filed a Motion for Reconsideration of the April 14, 2000 Order. On May 8, 2000, respondents then
filed their Comment/Objections to petitioner's Motion for Reconsideration.
On May 5, 2000, the trial court issued an Order 14 giving petitioners the opportunity to comply with the requisites laid down in
Section 18, Rule 141, for them to qualify as indigent litigants.
On May 13, 2000, petitioners submitted their Compliance 15 attaching the affidavits of petitioner Lorencita Algura 16 and
Erlinda Bangate, 17 to comply with the requirements of then Rule 141, Section 18 of the Rules of Court and in support of their
claim to be declared as indigent litigants.
In her May 13, 2000 Affidavit, petitioner Lorencita Algura claimed that the demolition of their small dwelling deprived her of a
monthly income amounting to PhP 7,000.00. She, her husband, and their six (6) minor children had to rely mainly on her
husband's salary as a policeman which provided them a monthly amount of PhP 3,500.00, more or less. Also, they did not own
any real property as certified by the assessor's office of Naga City. More so, according to her, the meager net income from her
small sari-sari store and the rentals of some boarders, plus the salary of her husband, were not enough to pay the family's basic
necessities.
To buttress their position as qualified indigent litigants, petitioners also submitted the affidavit of Erlinda Bangate, who attested
under oath, that she personally knew spouses Antonio Algura and Lorencita Algura, who were her neighbors; that they derived
substantial income from their boarders; that they lost said income from their boarders' rentals when the Local Government Unit
of the City of Naga, through its officers, demolished part of their house because from that time, only a few boarders could be
accommodated; that the income from the small store, the boarders, and the meager salary of Antonio Algura were insufficient
for their basic necessities like food and clothing, considering that the Algura spouses had six (6) children; and that she knew that
petitioners did not own any real property.
Thereafter, Naga City RTC Acting Presiding Judge Andres B. Barsaga, Jr. issued his July 17, 2000 18 Order denying the petitioners'
Motion for Reconsideration.
Judge Barsaga ratiocinated that the pay slip of Antonio F. Algura showed that the "GROSS INCOME or TOTAL EARNINGS of
plaintiff Algura [was] P10,474.00 which amount [was] over and above the amount mentioned in the first paragraph of Rule 141,
Section 18 for pauper litigants residing outside Metro Manila." 19 Said rule provides that the gross income of the litigant should
not exceed PhP 3,000.00 a month and shall not own real estate with an assessed value of PhP 50,000.00. The trial court found
that, in Lorencita S.J. Algura's May 13, 2000 Affidavit, nowhere was it stated that she and her immediate family did not earn a
gross income of PhP 3,000.00.
The Issue
Unconvinced of the said ruling, the Alguras instituted the instant petition raising a solitary issue for the consideration of the
Court: whether petitioners should be considered as indigent litigants who qualify for exemption from paying filing fees.
The Ruling of the Court
The petition is meritorious.
A review of the history of the Rules of Court on suits in forma pauperis (pauper litigant) is necessary before the Court rules on
the issue of the Algura spouses' claim to exemption from paying filing fees.
When the Rules of Court took effect on January 1, 1964, the rule on pauper litigants was found in Rule 3, Section 22 which
provided that:
Section 22. Pauper litigant. — Any court may authorize a litigant to prosecute his action or defense as a
pauper upon a proper showing that he has no means to that effect by affidavits, certificate of the
corresponding provincial, city or municipal treasurer, or otherwise. Such authority[,] once given[,] shall
include an exemption from payment of legal fees and from filing appeal bond, printed record and printed
brief. The legal fees shall be a lien to any judgment rendered in the case [favorable] to the pauper, unless
the court otherwise provides.
From the same Rules of Court, Rule 141 on Legal Fees, on the other hand, did not contain any provision on pauper litigants.
On July 19, 1984, the Court, in Administrative Matter No. 83-6-389-0 (formerly G.R. No. 64274), approved the recommendation
of the Committee on the Revision of Rates and Charges of Court Fees, through its Chairman, then Justice Felix V. Makasiar, to
revise the fees in Rule 141 of the Rules of Court to generate funds to effectively cover administrative costs for services rendered
by the courts. 20 A provision on pauper litigants was inserted which reads:
Section 16. Pauper-litigants exempt from payment of court fees. — Pauper-litigants include wage earners
whose gross income do not exceed P2,000.00 a month or P24,000.00 a year for those residing in Metro
Manila, and P1,500.00 a month or P18,000.00 a year for those residing outside Metro Manila, or those who
do not own real property with an assessed value of not more than P24,000.00, or not more than P18,000.00
as the case may be.
Such exemption shall include exemption from payment of fees for filing appeal bond, printed record and
printed brief.
The legal fees shall be a lien on the monetary or property judgment rendered in favor of the pauper-litigant.
To be entitled to the exemption herein provided, the pauper-litigant shall execute an affidavit that he does
not earn the gross income abovementioned, nor own any real property with the assessed value afore-
mentioned [sic], supported by a certification to that effect by the provincial, city or town assessor or
treasurer.
When the Rules of Court on Civil Procedure were amended by the 1997 Rules of Civil Procedure (inclusive of Rules 1 to 71) in
Supreme Court Resolution in Bar Matter No. 803 dated April 8, 1997, which became effective on July 1, 1997, Rule 3, Section 22
of the Revised Rules of Court was superseded by Rule 3, Section 21 of said 1997 Rules of Civil Procedure, as follows:
Section 21. Indigent party. — A party may be authorized to litigate his action, claim or defense as an
indigent if the court, upon an ex parte application and hearing, is satisfied that the party is one who has no
money or property sufficient and available for food, shelter and basic necessities for himself and his family.
Such authority shall include an exemption from payment of docket and other lawful fees, and of transcripts
of stenographic notes which the court may order to be furnished him. The amount of the docket and other
lawful fees which the indigent was exempted from paying shall be a lien on any judgment rendered in the
case favorable to the indigent, unless the court otherwise provides.
 Any adverse party may contest the grant of such authority at any time before judgment is rendered by the
trial court. If the court should determine after hearing that the party declared as an indigent is in fact a
person with sufficient income or property, the proper docket and other lawful fees shall be assessed and
collected by the clerk of court. If payment is not made within the time fixed by the court, execution shall
issue for the payment thereof, without prejudice to such other sanctions as the court may impose.
At the time the Rules on Civil Procedure were amended by the Court in Bar Matter No. 803, however, there was no amendment
made on Rule 141, Section 16 on pauper litigants.
On March 1, 2000, Rule 141 on Legal Fees was amended by the Court in A.M. No. 00-2-01-SC, whereby certain fees were
increased or adjusted. In this Resolution, the Court amended Section 16 of Rule 141, making it Section 18, which now reads:
Section 18. Pauper-litigants exempt from payment of legal fees. — Pauper litigants (a) whose gross income
and that of their immediate family do not exceed four thousand (P4,000.00) pesos a month if residing in
Metro Manila, and three thousand (P3,000.00) pesos a month if residing outside Metro Manila, and (b) who
do not own real property with an assessed value of more than fifty thousand (P50,000.00) pesos shall be
exempt from the payment of legal fees.
The legal fees shall be a lien on any judgment rendered in the case favorably to the pauper litigant, unless
the court otherwise provides.
To be entitled to the exemption herein provided, the litigant shall execute an affidavit that he and his
immediate family do not earn the gross income abovementioned, nor do they own any real property with
the assessed value aforementioned, supported by an affidavit of a disinterested person attesting to the
truth of the litigant's affidavit.
Any falsity in the affidavit of a litigant or disinterested person shall be sufficient cause to strike out the
pleading of that party, without prejudice to whatever criminal liability may have been incurred.
It can be readily seen that the rule on pauper litigants was inserted in Rule 141 without revoking or amending Section 21 of
Rule 3, which provides for the exemption of pauper litigants from payment of filing fees. Thus, on March 1, 2000, there were
two existing rules on pauper litigants; namely, Rule 3, Section 21 and Rule 141, Section 18.
On August 16, 2004, Section 18 of Rule 141 was further amended in Administrative Matter No. 04-2-04-SC, which became
effective on the same date. It then became Section 19 of Rule 141, to wit:
SEC. 19. Indigent litigants exempt from payment of legal fees. — INDIGENT LITIGANTS (A) WHOSE GROSS
INCOME AND THAT OF THEIR IMMEDIATE FAMILY DO NOT EXCEED AN AMOUNT DOUBLE THE MONTHLY
MINIMUM WAGE OF AN EMPLOYEE AND (B) WHO DO NOT OWN REAL PROPERTY WITH A FAIR MARKET
VALUE AS STATED IN THE CURRENT TAX DECLARATION OF MORE THAN THREE HUNDRED THOUSAND
(P300,000.00) PESOS SHALL BE EXEMPT FROM PAYMENT OF LEGAL FEES.
The legal fees shall be a lien on any judgment rendered in the case favorable to the indigent litigant unless
the court otherwise provides.
To be entitled to the exemption herein provided, the litigant shall execute an affidavit that he and his
immediate family do not earn a gross income abovementioned, and they do not own any real property
with the fair value aforementioned, supported by an affidavit of a disinterested person attesting to the
truth of the litigant's affidavit. The current tax declaration, if any, shall be attached to the litigant's affidavit.
Any falsity in the affidavit of litigant or disinterested person shall be sufficient cause to dismiss the
complaint or action or to strike out the pleading of that party, without prejudice to whatever criminal
liability may have been incurred. (Emphasis supplied.)
Amendments to Rule 141 (including the amendment to Rule 141, Section 18) were made to implement RA 9227 which brought
about new increases in filing fees. Specifically, in the August 16, 2004 amendment, the ceiling for the gross income of litigants
applying for exemption and that of their immediate family was increased from PhP 4,000.00 a month in Metro Manila and PhP
3,000.00 a month outside Metro Manila, to double the monthly minimum wage of an employee; and the maximum value of the
property owned by the applicant was increased from an assessed value of PhP 50,000.00 to a maximum market value of PhP
300,000.00, to be able to accommodate more indigent litigants and promote easier access to justice by the poor and the
marginalized in the wake of these new increases in filing fees.
Even if there was an amendment to Rule 141 on August 16, 2004, there was still no amendment or recall of Rule 3, Section 21
on indigent litigants.
With this historical backdrop, let us now move on to the sole issue — whether petitioners are exempt from the payment of filing
fees.
It is undisputed that the Complaint (Civil Case No. 99-4403) was filed on September 1, 1999. However, the Naga City RTC, in its
April 14, 2000 and July 17, 2000 Orders, incorrectly applied Rule 141, Section 18 on Legal Fees when the applicable rules at that
time were Rule 3, Section 21 on Indigent Party which took effect on July 1, 1997 and Rule 141, Section 16 on Pauper
Litigants which became effective on July 19, 1984 up to February 28, 2000.
The old Section 16, Rule 141 requires applicants to file an ex-parte motion to litigate as a pauper litigant by submitting an
affidavit that they do not have a gross income of PhP 2,000.00 a month or PhP 24,000.00 a year for those residing in Metro
Manila and PhP 1,500.00 a month or PhP 18,000.00 a year for those residing outside Metro Manila or those who do not own
real property with an assessed value of not more than PhP 24,000.00 or not more than PhP 18,000.00 as the case may be. Thus,
there are two requirements: a) income requirement — the applicants should not have a gross monthly income of more than
PhP 1,500.00, and b) property requirement –– they should not own property with an assessed value of not more than PhP
18,000.00.
In the case at bar, petitioners Alguras submitted the Affidavits of petitioner Lorencita Algura and neighbor Erlinda Bangate, the
pay slip of petitioner Antonio F. Algura showing a gross monthly income of PhP 10,474.00, 21 and a Certification of the Naga City
assessor stating that petitioners do not have property declared in their names for taxation. 22 Undoubtedly, petitioners do not
own real property as shown by the Certification of the Naga City assessor and so the property requirement is met. However
with respect to the income requirement, it is clear that the gross monthly income of PhP 10,474.00 of petitioner Antonio F.
Algura and the PhP 3,000.00 income of Lorencita Algura when combined, were above the PhP 1,500.00 monthly income
threshold prescribed by then Rule 141, Section 16 and therefore, the income requirement was not satisfied. The trial court was
therefore correct in disqualifying petitioners Alguras as indigent litigants although the court should have applied Rule 141,
Section 16 which was in effect at the time of the filing of the application on September 1, 1999. Even if Rule 141, Section 18
(which superseded Rule 141, Section 16 on March 1, 2000) were applied, still the application could not have been granted as the
combined PhP 13,474.00 income of petitioners was beyond the PhP 3,000.00 monthly income threshold.
Unrelenting, petitioners however argue in their Motion for Reconsideration of the April 14, 2000 Order disqualifying them as
indigent litigants 23 that the rules have been relaxed by relying on Rule 3, Section 21 of the 1997 Rules of Civil procedure which
authorizes parties to litigate their action as indigents if the court is satisfied that the party is "one who has no money or
property sufficient and available for food, shelter and basic necessities for himself and his family." The trial court did not give
credence to this view of petitioners and simply applied Rule 141 but ignored Rule 3, Section 21 on Indigent Party.
The position of petitioners on the need to use Rule 3, Section 21 on their application to litigate as indigent litigants brings to the
fore the issue on whether a trial court has to apply both Rule 141, Section 16 and Rule 3, Section 21 on such applications or
should the court apply only Rule 141, Section 16 and discard Rule 3, Section 21 as having been superseded by Rule 141, Section
16 on Legal Fees.
The Court rules that Rule 3, Section 21 and Rule 141, Section 16 (later amended as Rule 141, Section 18 on March 1, 2000 and
subsequently amended by Rule 141, Section 19 on August 16, 2003, which is now the present rule) are still valid and
enforceable rules on indigent litigants.
For one, the history of the two seemingly conflicting rules readily reveals that it was not the intent of the Court to consider the
old Section 22 of Rule 3, which took effect on January 1, 1994 to have been amended and superseded by Rule 141, Section 16,
which took effect on July 19, 1984 through A.M. No. 83-6-389-0. If that is the case, then the Supreme Court, upon the
recommendation of the Committee on the Revision on Rules, could have already deleted Section 22 from Rule 3 when it
amended Rules 1 to 71 and approved the 1997 Rules of Civil Procedure, which took effect on July 1, 1997. The fact that Section
22 which became Rule 3, Section 21 on indigent litigant was retained in the rules of procedure, even elaborating on the meaning
of an indigent party, and was also strengthened by the addition of a third paragraph on the right to contest the grant of
authority to litigate only goes to show that there was no intent at all to consider said rule as expunged from the 1997 Rules of
Civil Procedure.
Furthermore, Rule 141 on indigent litigants was amended twice: first on March 1, 2000 and the second on August 16, 2004; and
yet, despite these two amendments, there was no attempt to delete Section 21 from said Rule 3. This clearly evinces the desire
of the Court to maintain the two (2) rules on indigent litigants to cover applications to litigate as an indigent litigant.
It may be argued that Rule 3, Section 21 has been impliedly repealed by the recent 2000 and 2004 amendments to Rule 141 on
legal fees. This position is bereft of merit. Implied repeals are frowned upon unless the intent of the framers of the rules is
unequivocal. It has been consistently ruled that:
(r)epeals by implication are not favored, and will not be decreed, unless it is manifest that the legislature so
intended. As laws are presumed to be passed with deliberation and with full knowledge of all existing ones
on the subject, it is but reasonable to conclude that in passing a statute[,] it was not intended to interfere
with or abrogate any former law relating to same matter, unless the repugnancy between the two is not
only irreconcilable, but also clear and convincing, and flowing necessarily from the language used, unless
the later act fully embraces the subject matter of the earlier, or unless the reason for the earlier act is
beyond peradventure removed. Hence, every effort must be used to make all acts stand and if, by any
reasonable construction they can be reconciled, the later act will not operate as a repeal of the
earlier. 24 (Emphasis supplied).
Instead of declaring that Rule 3, Section 21 has been superseded and impliedly amended by Section 18 and later Section 19 of
Rule 141, the Court finds that the two rules can and should be harmonized.
The Court opts to reconcile Rule 3, Section 21 and Rule 141, Section 19 because it is a settled principle that when conflicts are
seen between two provisions, all efforts must be made to harmonize them. Hence, "every statute [or rule] must be so construed
and harmonized with other statutes [or rules] as to form a uniform system of jurisprudence." 25
In Manila Jockey Club, Inc. v. Court of Appeals, this Court enunciated that in the interpretation of seemingly conflicting laws,
efforts must be made to first harmonize them. This Court thus ruled:
Consequently, every statute should be construed in such a way that will harmonize it with existing laws. This
principle is expressed in the legal maxim 'interpretare et concordare leges legibus est optimus interpretandi,'
that is, to interpret and to do it in such a way as to harmonize laws with laws is the best method of
interpretation. 26
In the light of the foregoing considerations, therefore, the two (2) rules can stand together and are compatible with each other.
When an application to litigate as an indigent litigant is filed, the court shall scrutinize the affidavits and supporting documents
submitted by the applicant to determine if the applicant complies with the income and property standards prescribed in the
present Section 19 of Rule 141 — that is, the applicant's gross income and that of the applicant's immediate family do not
exceed an amount double the monthly minimum wage of an employee; and the applicant does not own real property with a fair
market value of more than Three Hundred Thousand Pesos (PhP 300,000.00). If the trial court finds that the applicant meets the
income and property requirements, the authority to litigate as indigent litigant is automatically granted and the grant is a
matter of right.
However, if the trial court finds that one or both requirements have not been met, then it would set a hearing to enable the
applicant to prove that the applicant has "no money or property sufficient and available for food, shelter and basic necessities
for himself and his family." In that hearing, the adverse party may adduce countervailing evidence to disprove the evidence
presented by the applicant; after which the trial court will rule on the application depending on the evidence adduced. In
addition, Section 21 of Rule 3 also provides that the adverse party may later still contest the grant of such authority at any time
before judgment is rendered by the trial court, possibly based on newly discovered evidence not obtained at the time the
application was heard. If the court determines after hearing, that the party declared as an indigent is in fact a person with
sufficient income or property, the proper docket and other lawful fees shall be assessed and collected by the clerk of court. If
payment is not made within the time fixed by the court, execution shall issue or the payment of prescribed fees shall be made,
without prejudice to such other sanctions as the court may impose.
The Court concedes that Rule 141, Section 19 provides specific standards while Rule 3, Section 21 does not clearly draw the
limits of the entitlement to the exemption. Knowing that the litigants may abuse the grant of authority, the trial court must use
sound discretion and scrutinize evidence strictly in granting exemptions, aware that the applicant has not hurdled the precise
standards under Rule 141. The trial court must also guard against abuse and misuse of the privilege to litigate as an indigent
litigant to prevent the filing of exorbitant claims which would otherwise be regulated by a legal fee requirement.
Thus, the trial court should have applied Rule 3, Section 21 to the application of the Alguras after their affidavits and supporting
documents showed that petitioners did not satisfy the twin requirements on gross monthly income and ownership of real
property under Rule 141. Instead of disqualifying the Alguras as indigent litigants, the trial court should have called a hearing as
required by Rule 3, Section 21 to enable the petitioners to adduce evidence to show that they didn't have property and money
sufficient and available for food, shelter, and basic necessities for them and their family. 27 In that hearing, the respondents
would have had the right to also present evidence to refute the allegations and evidence in support of the application of the
petitioners to litigate as indigent litigants. Since this Court is not a trier of facts, it will have to remand the case to the trial court
to determine whether petitioners can be considered as indigent litigants using the standards set in Rule 3, Section 21.
Recapitulating the rules on indigent litigants, therefore, if the applicant for exemption meets the salary and property
requirements under Section 19 of Rule 141, then the grant of the application is mandatory. On the other hand, when the
application does not satisfy one or both requirements, then the application should not be denied outright; instead, the court
should apply the "indigency test" under Section 21 of Rule 3 and use its sound discretion in determining the merits of the prayer
for exemption.
Access to justice by the impoverished is held sacrosanct under Article III, Section 11 of the 1987 Constitution. The Action
Program for Judicial Reforms (APJR) itself, initiated by former Chief Justice Hilario G. Davide, Jr., placed prime importance on
'easy access to justice by the poor' as one of its six major components. Likewise, the judicial philosophy of Liberty and
Prosperity of Chief Justice Artemio V. Panganiban makes it imperative that the courts shall not only safeguard but also enhance
the rights of individuals — which are considered sacred under the 1987 Constitution. Without doubt, one of the most precious
rights which must be shielded and secured is the unhampered access to the justice system by the poor, the underprivileged, and
the marginalized.
WHEREFORE, the petition is GRANTED and the April 14, 2000 Order granting the disqualification of petitioners, the July 17, 2000
Order denying petitioners' Motion for Reconsideration, and the September 11, 2001 Order dismissing the case in Civil Case No.
RTC-99-4403 before the Naga City RTC, Branch 27 are ANNULLED and SET ASIDE. Furthermore, the Naga City RTC is ordered to
set the "Ex-Parte Motion to Litigate as Indigent Litigants" for hearing and apply Rule 3, Section 21 of the 1997 Rules of Civil
Procedure to determine whether petitioners can qualify as indigent litigants.
No costs.

SO ORDERED.
Quisumbing, Carpio and Carpio Morales, JJ., concur.
Tinga, J., in the result.
 [G.R. No. 122846. January 20, 2009.]
WHITE LIGHT CORPORATION, TITANIUM CORPORATION and STA. MESA TOURIST & DEVELOPMENT
CORPORATION, petitioners, vs. CITY OF MANILA, represented by MAYOR ALFREDO S. LIM, respondent.
DECISION
TINGA, J p:
With another city ordinance of Manila also principally involving the tourist district as subject, the Court is
confronted anew with the incessant clash between government power and individual liberty in tandem with the archetypal
tension between law and morality. CcaASE
In City of Manila v. Laguio, Jr., 1 the Court affirmed the nullification of a city ordinance barring the operation of
motels and inns, among other establishments, within the Ermita-Malate area. The petition at bar assails a similarly-
motivated city ordinance that prohibits those same establishments from offering short-time admission, as well as pro-rated
or "wash up" rates for such abbreviated stays. Our earlier decision tested the city ordinance against our sacred
constitutional rights to liberty, due process and equal protection of law. The same parameters apply to the present petition.
This Petition 2 under Rule 45 of the Revised Rules on Civil Procedure, which seeks the reversal of the Decision 3 in
C.A.-G.R. S.P. No. 33316 of the Court of Appeals, challenges the validity of Manila City Ordinance No. 7774 entitled, "An
Ordinance Prohibiting Short-Time Admission, Short-Time Admission Rates, and Wash-Up Rate Schemes in Hotels, Motels,
Inns, Lodging Houses, Pension Houses, and Similar Establishments in the City of Manila" (the Ordinance).
I.
The facts are as follows:
On December 3, 1992, City Mayor Alfredo S. Lim (Mayor Lim) signed into law the Ordinance. 4 The Ordinance is
reproduced in full, hereunder:
SEC. 1. Declaration of Policy. — It is hereby the declared policy of the City Government to protect the best
interest, health and welfare, and the morality of its constituents in general and the youth in particular.
SEC. 2. Title. — This ordinance shall be known as "An Ordinance" prohibiting short time admission in hotels,
motels, lodging houses, pension houses and similar establishments in the City of Manila.
SEC. 3. Pursuant to the above policy, short-time admission and rate [sic], wash-up rate or other similarly
concocted terms, are hereby prohibited in hotels, motels, inns, lodging houses, pension houses and similar
establishments in the City of Manila. aDECHI
SEC. 4. Definition of Term[s]. — Short-time admission shall mean admittance and charging of room rate for
less than twelve (12) hours at any given time or the renting out of rooms more than twice a day or any other
term that may be concocted by owners or managers of said establishments but would mean the same or
would bear the same meaning.
SEC. 5. Penalty Clause. — Any person or corporation who shall violate any provision of this ordinance shall
upon conviction thereof be punished by a fine of Five Thousand (P5,000.00) Pesos or imprisonment for a
period of not exceeding one (1) year or both such fine and imprisonment at the discretion of the court;
Provided, That in case of [a] juridical person, the president, the manager, or the persons in charge of the
operation thereof shall be liable: Provided, further, That in case of subsequent conviction for the same
offense, the business license of the guilty party shall automatically be cancelled.
SEC. 6. Repealing Clause. — Any or all provisions of City ordinances not consistent with or contrary to this
measure or any portion hereof are hereby deemed repealed.
SEC. 7. Effectivity. — This ordinance shall take effect immediately upon approval.
Enacted by the city Council of Manila at its regular session today, November 10, 1992.
Approved by His Honor, the Mayor on December 3, 1992.
On December 15, 1992, the Malate Tourist and Development Corporation (MTDC) filed a complaint for declaratory
relief with prayer for a writ of preliminary injunction and/or temporary restraining order (TRO) 5 with the Regional Trial
Court (RTC) of Manila, Branch 9 impleading as defendant, herein respondent City of Manila (the City) represented by Mayor
Lim. 6 MTDC prayed that the Ordinance, insofar as it includes motels and inns as among its prohibited establishments, be
declared invalid and unconstitutional. MTDC claimed that as owner and operator of the Victoria Court in Malate, Manila it
was authorized by Presidential Decree (P.D.) No. 259 to admit customers on a short time basis as well as to charge
customers wash up rates for stays of only three hours. DACTSa
On December 21, 1992, petitioners White Light Corporation (WLC), Titanium Corporation (TC) and Sta. Mesa
Tourist and Development Corporation (STDC) filed a motion to intervene and to admit attached complaint-in-
intervention 7 on the ground that the Ordinance directly affects their business interests as operators of drive-in hotels and
motels in Manila. 8 The three companies are components of the Anito Group of Companies which owns and operates
several hotels and motels in Metro Manila. 9
On December 23, 1992, the RTC granted the motion to intervene. 10 The RTC also notified the Solicitor General of
the proceedings pursuant to then Rule 64, Section 4 of the Rules of Court. On the same date, MTDC moved to withdraw as
plaintiff. 11 ADTCaI
On December 28, 1992, the RTC granted MTDC's motion to withdraw. 12 The RTC issued a TRO on January 14,
1993, directing the City to cease and desist from enforcing the Ordinance. 13 The City filed an Answer dated January 22,
1993 alleging that the Ordinance is a legitimate exercise of police power. 14
 On February 8, 1993, the RTC issued a writ of preliminary injunction ordering the city to desist from the
enforcement of the Ordinance. 15 A month later, on March 8, 1993, the Solicitor General filed his Comment arguing that
the Ordinance is constitutional.
During the pre-trial conference, the WLC, TC and STDC agreed to submit the case for decision without trial as the
case involved a purely legal question. 16On October 20, 1993, the RTC rendered a decision declaring the Ordinance null and
void. The dispositive portion of the decision reads:
WHEREFORE, in view of all the foregoing, [O]rdinance No. 7774 of the City of Manila is hereby declared null
and void. Accordingly, the preliminary injunction heretofor issued is hereby made permanent.
SO ORDERED. 17
The RTC noted that the ordinance "strikes at the personal liberty of the individual guaranteed and jealously
guarded by the Constitution." 18 Reference was made to the provisions of the Constitution encouraging private enterprises
and the incentive to needed investment, as well as the right to operate economic enterprises. Finally, from the observation
that the illicit relationships the Ordinance sought to dissuade could nonetheless be consummated by simply paying for a 12-
hour stay, the RTC likened the law to the ordinance annulled in Ynot v. Intermediate Appellate Court, 19 where the
legitimate purpose of preventing indiscriminate slaughter of carabaos was sought to be effected through an inter-province
ban on the transport of carabaos and carabeef. ITSCED
The City later filed a petition for review on certiorari with the Supreme Court. 20 The petition was docketed as G.R.
No. 112471. However in a resolution dated January 26, 1994, the Court treated the petition as a petition for certiorari and
referred the petition to the Court of Appeals. 21
Before the Court of Appeals, the City asserted that the Ordinance is a valid exercise of police power pursuant to
Section 458 (4) (iv) of the Local Government Code which confers on cities, among other local government units, the power:
[To] regulate the establishment, operation and maintenance of cafes, restaurants, beerhouses, hotels,
motels, inns, pension houses, lodging houses and other similar establishments, including tourist guides and
transports. 22
The Ordinance, it is argued, is also a valid exercise of the power of the City under Article III, Section 18 (kk) of the
Revised Manila Charter, thus:
"to enact all ordinances it may deem necessary and proper for the sanitation and safety, the furtherance of
the prosperity and the promotion of the morality, peace, good order, comfort, convenience and general
welfare of the city and its inhabitants, and such others as be necessary to carry into effect and discharge the
powers and duties conferred by this Chapter; and to fix penalties for the violation of ordinances which shall
not exceed two hundred pesos fine or six months imprisonment, or both such fine and imprisonment for a
single offense. 23
Petitioners argued that the Ordinance is unconstitutional and void since it violates the right to privacy and the
freedom of movement; it is an invalid exercise of police power; and it is an unreasonable and oppressive interference in
their business. acIHDA
The Court of Appeals reversed the decision of the RTC and affirmed the constitutionality of the Ordinance. 24 First,
it held that the Ordinance did not violate the right to privacy or the freedom of movement, as it only penalizes the owners
or operators of establishments that admit individuals for short time stays. Second, the virtually limitless reach of police
power is only constrained by having a lawful object obtained through a lawful method. The lawful objective of the
Ordinance is satisfied since it aims to curb immoral activities. There is a lawful method since the establishments are still
allowed to operate. Third, the adverse effect on the establishments is justified by the well-being of its constituents in
general. Finally, as held in Ermita-Malate Motel Operators Association v. City Mayor of Manila, liberty is regulated by law.
TC, WLC and STDC come to this Court via petition for review on certiorari. 25 In their petition and Memorandum,
petitioners in essence repeat the assertions they made before the Court of Appeals. They contend that the assailed
Ordinance is an invalid exercise of police power.
II.
We must address the threshold issue of petitioners' standing. Petitioners allege that as owners of establishments
offering "wash-up" rates, their business is being unlawfully interfered with by the Ordinance. However, petitioners also
allege that the equal protection rights of their clients are also being interfered with. Thus, the crux of the matter is whether
or not these establishments have the requisite standing to plead for protection of their patrons' equal protection
rights. aTcSID
Standing or locus standi is the ability of a party to demonstrate to the court sufficient connection to and harm from
the law or action challenged to support that party's participation in the case. More importantly, the doctrine of standing is
built on the principle of separation of powers, 26 sparing as it does unnecessary interference or invalidation by the judicial
branch of the actions rendered by its co-equal branches of government.
The requirement of standing is a core component of the judicial system derived directly from the
Constitution. 27 The constitutional component of standing doctrine incorporates concepts which concededly are not
susceptible of precise definition. 28 In this jurisdiction, the extancy of "a direct and personal interest" presents the most
obvious cause, as well as the standard test for a petitioner's standing. 29 In a similar vein, the United States Supreme Court
reviewed and elaborated on the meaning of the three constitutional standing requirements of injury, causation, and
redressability in Allen v. Wright. 30
Nonetheless, the general rules on standing admit of several exceptions such as the overbreadth doctrine, taxpayer
suits, third party standing and, especially in the Philippines, the doctrine of transcendental importance. 31
 For this particular set of facts, the concept of third party standing as an exception and the overbreadth doctrine
are appropriate. In Powers v. Ohio, 32 the United States Supreme Court wrote that: "We have recognized the right of
litigants to bring actions on behalf of third parties, provided three important criteria are satisfied: the litigant must have
suffered an 'injury-in-fact', thus giving him or her a "sufficiently concrete interest" in the outcome of the issue in dispute;
the litigant must have a close relation to the third party; and there must exist some hindrance to the third party's ability to
protect his or her own interests". 33Herein, it is clear that the business interests of the petitioners are likewise injured by
the Ordinance. They rely on the patronage of their customers for their continued viability which appears to be threatened
by the enforcement of the Ordinance. The relative silence in constitutional litigation of such special interest groups in our
nation such as the American Civil Liberties Union in the United States may also be construed as a hindrance for customers
to bring suit. 34
American jurisprudence is replete with examples where parties-in-interest were allowed standing to advocate or
invoke the fundamental due process or equal protection claims of other persons or classes of persons injured by state
action. In Griswold v. Connecticut, 35 the United States Supreme Court held that physicians had standing to challenge a
reproductive health statute that would penalize them as accessories as well as to plead the constitutional protections
available to their patients. The Court held that:
"The rights of husband and wife, pressed here, are likely to be diluted or adversely affected unless those
rights are considered in a suit involving those who have this kind of confidential relation to them." 36
An even more analogous example may be found in Craig v. Boren, 37 wherein the United States Supreme Court
held that a licensed beverage vendor has standing to raise the equal protection claim of a male customer challenging a
statutory scheme prohibiting the sale of beer to males under the age of 21 and to females under the age of 18. The United
States High Court explained that the vendors had standing "by acting as advocates of the rights of third parties who seek
access to their market or function". 38 HacADE
Assuming arguendo that petitioners do not have a relationship with their patrons for the former to assert the
rights of the latter, the overbreadth doctrine comes into play. In overbreadth analysis, challengers to government
action are in effect permitted to raise the rights of third parties. Generally applied to statutes infringing on the freedom of
speech, the overbreadth doctrine applies when a statute needlessly restrains even constitutionally guaranteed rights. 39 In
this case, the petitioners claim that the Ordinance makes a sweeping intrusion into the right to liberty of their clients. We
can see that based on the allegations in the petition, the Ordinance suffers from overbreadth.
We thus recognize that the petitioners have a right to assert the constitutional rights of their clients to patronize
their establishments for a "wash-rate" time frame.
III.
To students of jurisprudence, the facts of this case will recall to mind not only the recent City of Manila ruling, but
our 1967 decision in Ermita-Malate Hotel and Motel Operations Association, Inc. v. Hon. City Mayor of Manila. 40 Ermita-
Malate concerned the City ordinance requiring patrons to fill up a prescribed form stating personal information such as
name, gender, nationality, age, address and occupation before they could be admitted to a motel, hotel or lodging house.
This earlier ordinance was precisely enacted to minimize certain practices deemed harmful to public morals. A purpose
similar to the annulled ordinance in City of Manila which sought a blanket ban on motels, inns and similar establishments in
the Ermita-Malate area. However, the constitutionality of the ordinance inErmita-Malate was sustained by the Court.
The common thread that runs through those decisions and the case at bar goes beyond the singularity of the
localities covered under the respective ordinances. All three ordinances were enacted with a view of regulating public
morals including particular illicit activity in transient lodging establishments. This could be described as the middle case,
wherein there is no wholesale ban on motels and hotels but the services offered by these establishments have been
severely restricted. At its core, this is another case about the extent to which the State can intrude into and regulate the
lives of its citizens. ESDHCa
The test of a valid ordinance is well established. A long line of decisions including City of Manila has held that for
an ordinance to be valid, it must not only be within the corporate powers of the local government unit to enact and pass
according to the procedure prescribed by law, it must also conform to the following substantive requirements: (1) must not
contravene the Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or discriminatory;
(4) must not prohibit but may regulate trade; (5) must be general and consistent with public policy; and (6) must not be
unreasonable. 41
The Ordinance prohibits two specific and distinct business practices, namely wash rate admissions and renting out
a room more than twice a day. The ban is evidently sought to be rooted in the police power as conferred on local
government units by the Local Government Code through such implements as the general welfare clause.
A.
Police power, while incapable of an exact definition, has been purposely veiled in general terms to underscore its
comprehensiveness to meet all exigencies and provide enough room for an efficient and flexible response as the conditions
warrant. 42 Police power is based upon the concept of necessity of the State and its corresponding right to protect itself
and its people. 43 Police power has been used as justification for numerous and varied actions by the State. These range
from the regulation of dance halls, 44 movie theaters, 45 gas stations 46 and cockpits. 47 The awesome scope of police
power is best demonstrated by the fact that in its hundred or so years of presence in our nation's legal system, its use has
rarely been denied.
The apparent goal of the Ordinance is to minimize if not eliminate the use of the covered establishments for illicit
sex, prostitution, drug use and alike. These goals, by themselves, are unimpeachable and certainly fall within the ambit of
the police power of the State. Yet the desirability of these ends do not sanctify any and all means for their achievement.
Those means must align with the Constitution, and our emerging sophisticated analysis of its guarantees to the people. The
Bill of Rights stands as a rebuke to the seductive theory of Macchiavelli, and, sometimes even, the political majorities
animated by his cynicism. ETDHaC
Even as we design the precedents that establish the framework for analysis of due process or equal protection
questions, the courts are naturally inhibited by a due deference to the co-equal branches of government as they exercise
their political functions. But when we are compelled to nullify executive or legislative actions, yet another form of caution
emerges. If the Court were animated by the same passing fancies or turbulent emotions that motivate many political
decisions, judicial integrity is compromised by any perception that the judiciary is merely the third political branch of
government. We derive our respect and good standing in the annals of history by acting as judicious and neutral arbiters of
the rule of law, and there is no surer way to that end than through the development of rigorous and sophisticated legal
standards through which the courts analyze the most fundamental and far-reaching constitutional questions of the day.
B.
The primary constitutional question that confronts us is one of due process, as guaranteed under Section 1, Article
III of the Constitution. Due process evades a precise definition. 48 The purpose of the guaranty is to prevent arbitrary
governmental encroachment against the life, liberty and property of individuals. The due process guaranty serves as a
protection against arbitrary regulation or seizure. Even corporations and partnerships are protected by the guaranty insofar
as their property is concerned. cAaTED
The due process guaranty has traditionally been interpreted as imposing two related but distinct restrictions on
government, "procedural due process" and "substantive due process". Procedural due process refers to the procedures that
the government must follow before it deprives a person of life, liberty, or property. 49 Procedural due process concerns
itself with government action adhering to the established process when it makes an intrusion into the private sphere.
Examples range from the form of notice given to the level of formality of a hearing.
If due process were confined solely to its procedural aspects, there would arise absurd situation of arbitrary
government action, provided the proper formalities are followed. Substantive due process completes the protection
envisioned by the due process clause. It inquires whether the government has sufficient justification for depriving a person
of life, liberty, or property. 50
The question of substantive due process, moreso than most other fields of law, has reflected dynamism in
progressive legal thought tied with the expanded acceptance of fundamental freedoms. Police power, traditionally
awesome as it may be, is now confronted with a more rigorous level of analysis before it can be upheld. The vitality though
of constitutional due process has not been predicated on the frequency with which it has been utilized to achieve a liberal
result for, after all, the libertarian ends should sometimes yield to the prerogatives of the State. Instead, the due process
clause has acquired potency because of the sophisticated methodology that has emerged to determine the proper metes
and bounds for its application.
C.
The general test of the validity of an ordinance on substantive due process grounds is best tested when assessed
with the evolved footnote 4 test laid down by the U.S. Supreme Court in U.S. v. Carolene Products. 51 Footnote 4 of
the Carolene Products case acknowledged that the judiciary would defer to the legislature unless there is a discrimination
against a "discrete and insular" minority or infringement of a "fundamental right". 52 Consequently, two standards of
judicial review were established: strict scrutiny for laws dealing with freedom of the mind or restricting the political process,
and the rational basis standard of review for economic legislation. aITECA
A third standard, denominated as heightened or immediate scrutiny, was later adopted by the U.S. Supreme Court
for evaluating classifications based on gender 53 and legitimacy. 54 Immediate scrutiny was adopted by the U.S. Supreme
Court in Craig, 55 after the Court declined to do so in Reed v. Reed. 56 While the test may have first been articulated in
equal protection analysis, it has in the United States since been applied in all substantive due process cases as well.
We ourselves have often applied the rational basis test mainly in analysis of equal protection challenges. 57 Using
the rational basis examination, laws or ordinances are upheld if they rationally further a legitimate governmental
interest. 58 Under intermediate review, governmental interest is extensively examined and the availability of less restrictive
measures is considered. 59 Applying strict scrutiny, the focus is on the presence of compelling, rather than substantial,
governmental interest and on the absence of less restrictive means for achieving that interest.
In terms of judicial review of statutes or ordinances, strict scrutiny refers to the standard for determining the
quality and the amount of governmental interest brought to justify the regulation of fundamental freedoms. 60 Strict
scrutiny is used today to test the validity of laws dealing with the regulation of speech, gender, or race as well as other
fundamental rights as expansion from its earlier applications to equal protection. 61 The United States Supreme Court has
expanded the scope of strict scrutiny to protect fundamental rights such as suffrage, 62 judicial access 63 and interstate
travel. 64
If we were to take the myopic view that an Ordinance should be analyzed strictly as to its effect only on the
petitioners at bar, then it would seem that the only restraint imposed by the law which we are capacitated to act upon is
the injury to property sustained by the petitioners, an injury that would warrant the application of the most deferential
standard — the rational basis test. Yet as earlier stated, we recognize the capacity of the petitioners to invoke as well the
constitutional rights of their patrons — those persons who would be deprived of availing short time access or wash-up rates
to the lodging establishments in question. HEaCcD
 Viewed cynically, one might say that the infringed rights of these customers are trivial since they seem shorn of
political consequence. Concededly, these are not the sort of cherished rights that, when proscribed, would impel the
people to tear up their cedulas. Still, the Bill of Rights does not shelter gravitas alone. Indeed, it is those "trivial" yet
fundamental freedoms — which the people reflexively exercise any day without the impairing awareness of their
constitutional consequence — that accurately reflect the degree of liberty enjoyed by the people. Liberty, as integrally
incorporated as a fundamental right in the Constitution, is not a Ten Commandments-style enumeration of what may or
what may not be done; but rather an atmosphere of freedom where the people do not feel labored under a Big Brother
presence as they interact with each other, their society and nature, in a manner innately understood by them as inherent,
without doing harm or injury to others.
D.
The rights at stake herein fall within the same fundamental rights to liberty which we upheld in City of Manila v.
Hon. Laguio, Jr. We expounded on that most primordial of rights, thus:
Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include "the right to exist and
the right to be free from arbitrary restraint or servitude. The term cannot be dwarfed into mere freedom
from physical restraint of the person of the citizen, but is deemed to embrace the right of man to enjoy the
faculties with which he has been endowed by his Creator, subject only to such restraint as are necessary for
the common welfare." [ 65 ] In accordance with this case, the rights of the citizen to be free to use his
faculties in all lawful ways; to live and work where he will; to earn his livelihood by any lawful calling; and to
pursue any avocation are all deemed embraced in the concept of liberty. [ 66 ]
The U.S. Supreme Court in the case of Roth v. Board of Regents, sought to clarify the meaning of "liberty". It
said:
While the Court has not attempted to define with exactness the liberty . . . guaranteed [by the Fifth
and Fourteenth Amendments], the term denotes not merely freedom from bodily restraint but also
the right of the individual to contract, to engage in any of the common occupations of life, to
acquire useful knowledge, to marry, establish a home and bring up children, to worship God
according to the dictates of his own conscience, and generally to enjoy those privileges long
recognized . . . as essential to the orderly pursuit of happiness by free men. In a Constitution for a
free people, there can be no doubt that the meaning of "liberty" must be broad
indeed. 67 [Citations omitted] DHSaCA
It cannot be denied that the primary animus behind the ordinance is the curtailment of sexual behavior. The City
asserts before this Court that the subject establishments "have gained notoriety as venue of 'prostitution, adultery and
fornications' in Manila since they provide the necessary atmosphere for clandestine entry, presence and exit and thus
became the 'ideal haven for prostitutes and thrill-seekers'". 68 Whether or not this depiction of a mise-en-scene of vice is
accurate, it cannot be denied that legitimate sexual behavior among consenting married or consenting single adults which is
constitutionally protected 69will be curtailed as well, as it was in the City of Manila case. Our holding therein retains
significance for our purposes:
The concept of liberty compels respect for the individual whose claim to privacy and interference demands
respect. As the case of Morfe v. Mutuc,borrowing the words of Laski, so very aptly stated:
Man is one among many, obstinately refusing reduction to unity. His separateness, his isolation, are
indefeasible; indeed, they are so fundamental that they are the basis on which his civic obligations
are built. He cannot abandon the consequences of his isolation, which are, broadly speaking, that
his experience is private, and the will built out of that experience personal to himself. If he
surrenders his will to others, he surrenders himself. If his will is set by the will of others, he ceases
to be a master of himself. I cannot believe that a man no longer a master of himself is in any real
sense free.
Indeed, the right to privacy as a constitutional right was recognized in Morfe, the invasion of which should
be justified by a compelling state interest.Morfe accorded recognition to the right to privacy independently
of its identification with liberty; in itself it is fully deserving of constitutional protection. Governmental
powers should stop short of certain intrusions into the personal life of the citizen. 70 SDIaHE
We cannot discount other legitimate activities which the Ordinance would proscribe or impair. There are very
legitimate uses for a wash rate or renting the room out for more than twice a day. Entire families are known to choose to
pass the time in a motel or hotel whilst the power is momentarily out in their homes. In transit passengers who wish to
wash up and rest between trips have a legitimate purpose for abbreviated stays in motels or hotels. Indeed any person or
groups of persons in need of comfortable private spaces for a span of a few hours with purposes other than having sex or
using illegal drugs can legitimately look to staying in a motel or hotel as a convenient alternative.
E.
That the Ordinance prevents the lawful uses of a wash rate depriving patrons of a product and the petitioners of
lucrative business ties in with another constitutional requisite for the legitimacy of the Ordinance as a police power
measure. It must appear that the interests of the public generally, as distinguished from those of a particular class, require
an interference with private rights and the means must be reasonably necessary for the accomplishment of the purpose
and not unduly oppressive of private rights. 71 It must also be evident that no other alternative for the accomplishment of
the purpose less intrusive of private rights can work. More importantly, a reasonable relation must exist between the
purposes of the measure and the means employed for its accomplishment, for even under the guise of protecting the public
interest, personal rights and those pertaining to private property will not be permitted to be arbitrarily invaded. 72
Lacking a concurrence of these requisites, the police measure shall be struck down as an arbitrary intrusion into
private rights. As held in Morfe v. Mutuc,the exercise of police power is subject to judicial review when life, liberty or
property is affected. 73 However, this is not in any way meant to take it away from the vastness of State police power
whose exercise enjoys the presumption of validity. 74
Similar to the Comelec resolution requiring newspapers to donate advertising space to candidates, this Ordinance
is a blunt and heavy instrument. 75 The Ordinance makes no distinction between places frequented by patrons engaged in
illicit activities and patrons engaged in legitimate actions. Thus it prevents legitimate use of places where illicit activities are
rare or even unheard of. A plain reading of section 3 of the Ordinance shows it makes no classification of places of lodging,
thus deems them all susceptible to illicit patronage and subjects them without exception to the unjustified prohibition.
The Court has professed its deep sentiment and tenderness of the Ermita-Malate area, its longtime home, 76 and
it is skeptical of those who wish to depict our capital city — the Pearl of the Orient — as a modern-day Sodom or Gomorrah
for the Third World set. Those still steeped in Nick Joaquin-dreams of the grandeur of Old Manila will have to accept that
Manila like all evolving big cities, will have its problems. Urban decay is a fact of mega cities such as Manila, and vice is a
common problem confronted by the modern metropolis wherever in the world. The solution to such perceived decay is not
to prevent legitimate businesses from offering a legitimate product. Rather, cities revive themselves by offering incentives
for new businesses to sprout up thus attracting the dynamism of individuals that would bring a new grandeur to
Manila. IDCcEa
The behavior which the Ordinance seeks to curtail is in fact already prohibited and could in fact be diminished
simply by applying existing laws. Less intrusive measures such as curbing the proliferation of prostitutes and drug dealers
through active police work would be more effective in easing the situation. So would the strict enforcement of existing laws
and regulations penalizing prostitution and drug use. These measures would have minimal intrusion on the businesses of
the petitioners and other legitimate merchants. Further, it is apparent that the Ordinance can easily be circumvented by
merely paying the whole day rate without any hindrance to those engaged in illicit activities. Moreover, drug dealers and
prostitutes can in fact collect "wash rates" from their clientele by charging their customers a portion of the rent for motel
rooms and even apartments.
IV.
We reiterate that individual rights may be adversely affected only to the extent that may fairly be required by the
legitimate demands of public interest or public welfare. The State is a leviathan that must be restrained from needlessly
intruding into the lives of its citizens. However wellintentioned the Ordinance may be, it is in effect an arbitrary and
whimsical intrusion into the rights of the establishments as well as their patrons. The Ordinance needlessly restrains the
operation of the businesses of the petitioners as well as restricting the rights of their patrons without sufficient justification.
The Ordinance rashly equates wash rates and renting out a room more than twice a day with immorality without
accommodating innocuous intentions.
The promotion of public welfare and a sense of morality among citizens deserves the full endorsement of the
judiciary provided that such measures do not trample rights this Court is sworn to protect. 77 The notion that the
promotion of public morality is a function of the State is as old as Aristotle. 78 The advancement of moral relativism as a
school of philosophy does not de-legitimize the role of morality in law, even if it may foster wider debate on which
particular behavior to penalize. It is conceivable that a society with relatively little shared morality among its citizens could
be functional so long as the pursuit of sharply variant moral perspectives yields an adequate accommodation of different
interests. 79
To be candid about it, the oft-quoted American maxim that "you cannot legislate morality" is ultimately
illegitimate as a matter of law, since as explained by Calabresi, that phrase is more accurately interpreted as meaning that
efforts to legislate morality will fail if they are widely at variance with public attitudes about right and wrong. 80 Our penal
laws, for one, are founded on age-old moral traditions, and as long as there are widely accepted distinctions between right
and wrong, they will remain so oriented. EcHIDT
Yet the continuing progression of the human story has seen not only the acceptance of the right-wrong distinction,
but also the advent of fundamental liberties as the key to the enjoyment of life to the fullest. Our democracy is
distinguished from non-free societies not with any more extensive elaboration on our part of what is moral and immoral,
but from our recognition that the individual liberty to make the choices in our lives is innate, and protected by the State.
Independent and fair-minded judges themselves are under a moral duty to uphold the Constitution as the embodiment of
the rule of law, by reason of their expression of consent to do so when they take the oath of office, and because they are
entrusted by the people to uphold the law. 81
Even as the implementation of moral norms remains an indispensable complement to governance, that
prerogative is hardly absolute, especially in the face of the norms of due process of liberty. And while the tension may often
be left to the courts to relieve, it is possible for the government to avoid the constitutional conflict by employing more
judicious, less drastic means to promote morality.
WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals is REVERSED, and the Decision of the
Regional Trial Court of Manila, Branch 9, is REINSTATED. Ordinance No. 7774 is hereby declared UNCONSTITUTIONAL. No
pronouncement as to costs. SO ORDERED.
Puno, C.J., Quisumbing, Ynares-Santiago, Austria-Martinez, Corona, Carpio-Morales, Azcuna, Chico-Nazario, Velasco, Jr.,
Nachura and Leonardo-de Castro, JJ., concur. Carpio and Peralta, JJ., are on official leave. Brion, J., is on sick leave.