Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No.

163827 August 17, 2011

DEVELOPMENT BAN O! T"E P"#L#PP#NES, Petitioner, vs. "ON. S#LVER#O $. CAST#LLO %&' CR#ST#NA TR#N#DAD (ARATE ROMERO, Respondents. R V#LLARAMA, )R., J.: #efore us is a petition for revie$ on certiorari under Rule %& of the '(() Rules of *ivil Procedure, as a+ended, see,in- to set aside the .ul/ 0', 0112 Decision' of the *ourt of 3ppeals 4*35 in *367.R. SP No. &280& dis+issin- petitioner9s petition for certiorari. The antecedents follo$: *ora;on <arate Ro+ero and his brother 7on;alo <arate co6o$ned a propert/ covered b/ Transfer *ertificate of Title 4T*T5 No. '11)10 of the Re-ister of Deeds of Da-upan *it/. The sub=ect propert/, located in Da-upan *it/, Province of Pan-asinan, is a ',)1&6s>uare6+eter lot $ith a four6store/ hotel erected thereon. It appears that so+eti+e in '()&, *ora;on and 7on;alo obtained a loan fro+ petitioner Develop+ent #an, of the Philippines 4D#P5. 3s collateral, the/ e?ecuted a real estate +ort-a-e 2 over the sub=ect propert/ in favor of D#P. On the alle-ed failure of the t$o borro$ers to pa/ their a+orti;ations, D#P foreclosed the real estate +ort-a-e on Septe+ber '&, '(82. Purportedl/, no rede+ption $as +ade $ithin one /ear, and thus, D#P consolidated o$nership over the sub=ect propert/. In March '((2, $hen *ora;on passed a$a/, her sole heir, her dau-hter respondent *ristina Trinidad <arate Ro+ero, asserted o$nership over the sub=ect propert/ to the e?tent of one6half thereof. @o$ever, respondent discovered that the propert/ $as alread/ re-istered as earl/ as .une '2, '(8( in the na+e of D#P under T*T No. &%'%0,% $ith T*T No '11)1 in the na+es of her +other and uncle alread/ cancelled. Respondent filed before the Re-ional Trial *ourt 4RT*5 of Da-upan *it/ a co+plaint& for reconve/ance, >uietin- of title and da+a-es $ith pra/er for a te+porar/ restrainin- order 4TRO5 and $rit of preli+inar/ in=unction to prevent D#P fro+ conductin- an/ auction sale on the sub=ect propert/ durin- the pendenc/ of the case. Respondent clai+ed that her uncle and D#P conspired in co++ittin- fraudulent acts relative to their true transaction and concealed the sa+e fro+ her +other, thereb/ deprivin- her of her ri-ht of rede+ption. The RT*, after hearin-, issued on Nove+ber 0%, '((8, a TROA restrainin- D#P fro+ proceedin- $ith its scheduled auction of the disputed propert/ on Nove+ber 0&, '((8. The dispositive portion of the trial court9s order reads: It appearin- that plaintiff *ristina Trinidad Ro+ero / <arate is the sole heir of the late Maria *ora;on <arate Ro+eroB,C co6o$ner of the D proB6Cindiviso of the propert/ covered b/ T*T No. '11)1 $hich at present is carried in T*T No. &%'%0 in the na+e of D#PB,C and to avoid irreparable da+a-e that +a/ arise Bfro+C the auction sale 4public biddin-5 scheduled on Nove+ber 0&, '((8B,C this *ourt hereb/ issues a Te+porar/ Restrainin- Order 4TRO5 373INST D F ND3NT Develop+ent #an, of the Philippines, Ma,ati, Metro Manila fro+ proceedin- B$ithC the scheduled auction sale 4public biddin-5 on Nove+ber 0&, '((8 at defendant9s head office at S3M #*7 for a period of t$ent/ 4015 da/s fro+ receipt of this order. SO ORD R D.) SO!"TION

D#P +oved to lift the TRO ar-uin- that it violates Section 08 of Presidential Decree 4P.D.5 No. 28&( $hich prohibits the issuance of a restrainin- order, te+porar/ or per+anent, a-ainst -overn+ent financin- institutions li,e D#P to en=oin an/ action ta,en pursuant to the +andator/ foreclosure clause of the decree. '1 On Dece+ber '%, '((8, the RT* denied D#P9s +otion to lift the TRO and -ranted respondent9s plea for an in=unctive $rit.'' The pertinent portions of the trial court9s order reads: To the honest evaluation of this *ourt $hat is unrestrainable is the ri-ht of -overn+ent financial institutions to foreclose +andatoril/ all loans $ith arreara-es includin- interest and char-es a+ountin- to at least t$ent/ 401E5 percent of the total outstandin- obli-ation. ???? To alla/ the fears of the plaintiff and to avoid an/ irreparable da+a-e that +a/ arise $hile the issues involved in the above case are still bein- resolved and deter+ined b/ the *ourt in the li-ht of the evidence so fBaCr presented, Bconsiderin- thatC there is a tendenc/ on the part of the Develop+ent #an, of the Philippines of continuin- the acts co+plained of 4auction saleFPublic biddin-5 and considerin- further BthatC there BshouldC be no advanta-e G -iven to one Bpart/C to the pre=udice of the other $hile this case is still pendin- in *ourt, it is hereb/ ordered that a HRIT of Preli+inar/ In=unction be issued a-ainst defendant Develop+ent #an, of the Philippines fro+ conductin- an/ auction sale of the propert/ involved in the above case 4for+erl/ covered b/ T*T No. '11)1 and at BpresentC covered b/ T*T No. &%'%05, upon postin- of a #OND b/ the plaintiff in the a+ount of P2 Million $ithin five 4&5 da/s fro+ receipt of this Order. '0 On even date, D#P +oved to reconsider'2 the Dece+ber '%, '((8 Order and at the sa+e ti+e sou-ht the dis+issal of respondent9s co+plaint on the sole -round that the sa+e states no cause of action. '% On Dece+ber 02, '((8, the $rit of preli+inar/ in=unction'& $as issued in favor of respondent. On March 8, '(((, the RT* denied D#P9s +otion for reconsideration of the denial of its +otion for the liftinof the TRO. The RT* li,e$ise denied in the sa+e order D#P9s +otion to dis+iss the co+plaint, 'A and ordered D#P to file an ans$er. On March 02, '(((, D#P +oved to reconsider the March 8, '((( denial of its +otion to dis+iss.') #ut even before the RT* could resolve said +otion, D#P filed its 3ns$er'8 on 3pril &, '(((. 3 +anifestation'( $as later filed b/ D#P indicatin- that the ans$er it filed $as a +ere cautionar/ +easure or $hat is ,no$n as an ans$er ad cautelam and thus $ithout pre=udice to an/ ri-ht of action it +a/ ta,e and $ithout an/ $aiver of an/ of the -rounds for the dis+issal of the co+plaint and an/ favorable resolution or order that a superior court +a/ issue hereinafter. On 3pril 01, '(((, the RT* issued an order01 den/in- D#P9s +otion for reconsideration of its March 8, '((( Order. The RT* in the sa+e order e+phasi;ed that D#P alread/ filed an ans$er thereb/ renderin- the +otion to dis+iss +oot and acade+ic. On .une 02, '(((, D#P filed a petition for certiorari 0' before the *3 assailin- the follo$in- issuances of the RT*: 4'5 TRO dated Nove+ber 0%, '((8 4received b/ D#P on Nove+ber 0%, '((85 issued a-ainst D#P en=oinin- it fro+ proceedin- $ith the scheduled auction sale of the disputed propert/I 405 Order dated Dece+ber '%, '((8 4received b/ D#P on Dece+ber 'A, '((85 den/in- its +otion to lift the TRO and -rantin- the respondents9 pra/er for a $rit of preli+inar/ in=unctionI 425 Order dated March 8, '((( 4received b/ D#P on March '8, '(((5 den/in- D#P9s +otion to dis+iss and +otion for reconsideration of the Dece+ber '%, '((8 OrderI and 4%5 Order dated 3pril 01, '((( 4received b/ D#P on 3pril 02, '(((5 den/in- D#P9s +otion for reconsideration of the March 8, '((( order.

In its assailed decision, the *3 dis+issed the petition on procedural -rounds. It held that the petition >uestioninthe first three orders $as filed late as the petition should have been filed $ithin A1 da/s fro+ receipt of the assailed orders. The *3 noted that as re-ards the third order, D#P $as notified of the denial of its +otion for reconsideration of the Dece+ber '%, '((8 Order on March '8, '((( and thus onl/ had until Ma/ '), '((( to >uestion the sa+e. The *3 further stated that D#P9s subse>uent filin- of its 3ns$er to the co+plaint rendered its +otion to dis+iss +oot and acade+ic. @ence, the present appeal. D#P raises the follo$in- issues for this *ourt9s consideration: I. H@ T@ R G T@ *O"RT OF 3PP 3!S 7R3V !J RR D IN 3FFIRMIN7 T@ ORD R OF T@ *O"RT 3 K"O G D NJIN7 D#P9S MOTION TO DISMISSG. II. H@ T@ R G T@ *O"RT OF 3PP 3!S 7R3V !J RR D IN 3FFIRMIN7 T@ ORD R OF T@ *O"RT 3 K"O G ISS"IN7 T@ T MPOR3RJ R STR3ININ7 ORD R 3ND T@ PR !IMIN3RJ IN."N*TION 373INST P TITION R D#P. III. H@ T@ R G T@ R"! S OF PRO* D"R BS@O"!D NOTC # 3PP!I D IN 3 V RJ RI7ID 3ND T *@NI*3! S NS SO 3S NOT TO FR"STR3T T@ PROMOTION OF S"#ST3NTI3! ."STI* . 00 D#P insists that it is evident fro+ the face of the co+plaint that respondent failed to state a cause of action. D#P contends that respondent9s alle-ation of conspirac/ bet$een D#P and 7on;alo is bare and has no factual basis to stand on. Further, D#P clai+s that respondent has no le-al ri-ht over the sub=ect propert/ as she did not inherit the sa+e in the first place. 3t the ti+e of death of respondent9s +other, the propert/ $as not an/+ore o$ned b/ the latter and therefore not part of her estate. Thus, respondent has no le-al ri-ht over the propert/ and has no cause of action a-ainst D#P. 3nd because she had no ri-ht to the propert/, the issuance of the TRO and in=unctive $rit $ere li,e$ise i+proper. D#P also points to the follo$in- provisions of P.D. No. 28& that $ere alle-edl/ violated $ith the issuance of the TRO and in=unctive $rit: Section '. It shall be +andator/ for -overn+ent financial institutions, after the lapse of si?t/ 4A15 da/s fro+ the issuance of this Decree, to foreclose the collaterals andFor securities for an/ loan, credit, acco++odation, andFor -uarantees -ranted b/ the+ $henever the arreara-es on such account, includin- accrued interest and other char-es, a+ount to at least t$ent/ percent 401E5 of the total outstandin- obli-ations, includin- interest and other char-es, as appearin- in the boo,s of account andFor related records of the financial institution concerned. This shall be $ithout pre=udice to the e?ercise b/ the -overn+ent financial institutions of such ri-hts andFor re+edies available to the+ under their respective contracts $ith their debtors, includin- the ri-ht to foreclose on loans, credits, acco++odations andFor -uarantees on $hich the arreara-es are less than t$ent/ percent 401E5. Sec. 0. No restrainin- order, te+porar/ or per+anent in=unction shall be issued b/ the court a-ainst an/ -overn+ent financial institution in an/ action ta,en b/ such institution in co+pliance $ith the +andator/ foreclosure provided in Section ' hereof, $hether such restrainin- order, te+porar/ or per+anent in=unction is sou-ht b/ the borro$er4s5 or an/ third part/ or parties, e?cept after due hearin- in $hich it is established b/ the borro$er and ad+itted b/ the -overn+ent financial institution concerned that t$ent/ percent 401E5 of the outstandin- arreara-es has been paid after the filin- of foreclosure proceedin-s. ???? Respondent, for her part, counters that the *3 $as correct in dis+issin- the petition for certiorari for havinbeen filed be/ond the si?t/ 4A156da/ re-le+entar/ period. 3lso, respondent contends that the provisions of P.D. No. 28& relatin- to the proscription a-ainst the issuance of in=unctive $rits en=oinin- foreclosure sales are not applicable in the instant case. She points out that $hat the RT* en=oined is not an auction sale arisin- fro+ the foreclosure of +ort-a-e as the sub=ect propert/ had lon- been foreclosed and title thereto consolidated in the na+e of D#P. Rather, $hat the RT* en=oined $as D#P9s sale of the sub=ect propert/ throu-h ordinar/ public biddin- $hich is not $ithin the a+bit of P.D. No. 28&. The petition should be denied.

3s correctl/ ruled b/ the *3, the petition for certiorari assailin- the orders pertainin- to the -rant of the TRO and the $rit of in=unction $ere filed out of ti+e. Notice of the issuance of the TRO $as received b/ D#P on the sa+e da/ it $as -ranted, Nove+ber 0%, '((8I thus, the petition for certiorari should have been filed not later than .anuar/ 02, '(((. The denial of the +otion for reconsideration of the order -rantin- the $rit of in=unction, on the other hand, $as received b/ D#P on March '8, '((( and thus, it had onl/ until Ma/ '), '((( to file the petition for certiorari. D#P, ho$ever, filed its petition onl/ on .une 02, '(((. 3s to D#P9s +otion to dis+iss the co+plaint, $e a-ree $ith the RT* and *3 that the sa+e should be denied, but not for the reason cited b/ said courts that it has been rendered +oot and acade+ic b/ D#P9s filin- of its ans$er but because the sa+e lac,s +erit. *ontrar/ to D#P9s sub+ission, a perusal of the alle-ations of the co+plaint clearl/ reveals respondent9s cause of action a-ainst D#P. The co+plaint states, ???? '.' Plaintiff is the sole heir and successor6in6interest of the late Ma. *ora;on <arate6Ro+ero, $ho died intestate on A March '((2. ???? 2. Durin- her lifeti+e, plaintiff9s predecessor6in6interest $as the erst$hile o$ner pro-indiviso of that parcel of land, to-ether $ith i+prove+ents, located in Da-upan *it/, $hich propert/ used to be covered b/ Transfer *ertificate of Title 4T*T5 No. '11)1 of the Re-istr/ of Deeds of Da-upan *it/G. %. In or about the /ear '()&, defendant <arate, $ho $as co6o$ner of the sub=ect propert/, secured various personal loan obli-ations fro+ the defendant D#P in the a--re-ate a+ount of P0,111,111.11. %.' To secure such putative loan obli-ations of the defendant <arate, the latter, $ho $ielded +oral ascendanc/ over his /oun-er sister and herein plaintiff9s predecessor6in6interest 66 Ma. *ora;on <arate6Ro+ero, ca=oled and prevailed upon the latter to +ort-a-e the entiret/ of the sub=ect propert/ in favor of defendant D#P, includinher one6half 4'F05 pro-indiviso share in the sa+e. %.0 3ccordin-l/, defendant <arate assured the plaintiff9s predecessor6in6interest that the +ort-a-e $ould be for a brief period onl/ and that he 4defendant <arate5 $ould forth$ith pa/ and settle in full all his personal loan obli-ations $ith the defendant D#P to ensure that said +ort-a-e is cancelled in the soonest ti+e possible. &. 3t so+e point in ti+e durin- the effectivit/ of the +ort-a-e, ho$ever, defendant <arate apparentl/ sa$ an opportunit/ to clai+ the entiret/ of the sub=ect propert/ for hi+self, to the e?clusion of plaintiff9s predecessor6 in6interest. &.' +boldened b/, and ta,in- advanta-e of, the co+plete trust and confidence reposed upon hi+ b/ the plaintiff9s predecessor6in6interest anent the sub=ect propert/, defendant <arate conspired $ith the defendant D#P for the ostensible foreclosure of the sub=ect propert/, $ith the end in vie$, ho$ever, of subse>uentl/ reac>uirin- the sa+e for hi+self as sole o$ner. A. Pursuant to such sinister plot hatched b/ defendants, defendant D#P foreclosed the sub=ect propert/ in Septe+ber of '(82 and, thereafter, bou-ht the sa+e for itself in the su+ of P0,0&2,'1'.11 durin- the auction sale conducted b/ the Deput/ Sheriff of Pan-asinanG.1avvphi1 ). Si-nificantl/ enou-h, and even before the lapse of the +ort-a-ors9 ri-ht of rede+ption over the sub=ect propert/, the herein defendants entered into a Deed of *onditional Sale over the sa+e, $ith the defendant D#P as seller, and the defendant <arate as bu/erG. ).' Needless to state, all the aforedescribed dealin-s, transactions and proceedin-s concernin- the sub=ect propert/ 66 fro+ its fraudulent foreclosure up to the hi-hl/ ano+alous e?ecution of the Deed of *onditional Sale over the sa+e 66 $ere concealed fro+ plaintiff9s predecessor6in6interest and even fro+ the plaintiff herself after the death of her +other.

? ? ? ?02 3 cause of action is the act or o+ission b/ $hich a part/ violates a ri-ht of another. 0% 3 co+plaint states a cause of action $hen it contains three essential ele+ents: 4'5 a ri-ht in favor of the plaintiff b/ $hatever +eans and $hatever la$ it arisesI 405 the correlative obli-ation of the defendant to respect such ri-htI and 425 the act or o+ission of the defendant violates the ri-ht of the plaintiff. If an/ of these ele+ents is absent, the co+plaint beco+es vulnerable to a +otion to dis+iss on the -round of failure to state a cause of action. 0& videntl/, all the above ele+ents of a cause of action are alle-ed in the co+plaint: 4'5 the le-al ri-ht of the respondent over the sub=ect propert/ foreclosed pre+ised on the fact that she is the sole heir of one of the o$ners $ho is entitled to the ri-ht of rede+ptionI 405 the correlative obli-ation of defendant D#P, as the foreclosin- entit/, to respect such ri-ht of rede+ptionI and 425 the act or o+ission of the defendant in violation of the le-al ri-ht, i.e., the act of D#P and its co6defendant <arate to cause the ostensible foreclosure of the sub=ect propert/ and the subse>uent e?ecution of a deed of conditional sale bet$een the defendants even prior to the lapse of rede+ption period to deprive respondent9s +other of her ri-ht over the propert/. *"ERE!ORE, the petition is DEN#ED for lac, of +erit. The Decision dated .ul/ 0', 0112 of the *ourt of 3ppeals in *367.R. SP No. &280& is A!!#RMED. No costs. SO ORD R D. MART#N S. V#LLARAMA, )R. 3ssociate .ustice H *ON*"R: RENATO C. CORONA *hief .ustice *hairperson TERES#TA ). LEONARDO+DE CASTRO 3ssociate .ustice LUCAS P. BERSAM#N 3ssociate .ustice

MAR#A LOURDES P. A. SERENOL 3ssociate .ustice * RTIFI*3TION

Pursuant to Section '2, 3rticle VIII of the '(8) *onstitution, I certif/ that the conclusions in the above Resolution had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt9s Division. RENATO C. CORONA *hief .ustice

!oot&ot,s
L

Desi-nated additional +e+ber per Raffle dated 3u-ust 8, 01'' in lieu of 3ssociate .ustice Mariano *. Del *astillo $ho recused hi+self due to prior action in the *ourt of 3ppeals.

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Rollo, pp. 2A6%A. Penned b/ Presidin- .ustice *ancio *. 7arcia 4no$ a retired +e+ber of this *ourt5 $ith 3ssociate .ustices lo/ R. #ello, .r. and Mariano *. Del *astillo 4no$ a +e+ber of this *ourt5 concurrin-.
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*3 rollo, pp. A(6)0. Id. at '1&6''). Id. at ''86''(. Id. at &)6A8. Id. at 286%'. Id. at %'.

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Sec. 0. No restrainin- order, te+porar/ or per+anent in=unction shall be issued b/ the court a-ainst an/ -overn+ent financial institution in an/ action ta,en b/ such institution in co+pliance $ith the +andator/ foreclosure provided in Section ' hereof, $hether such restrainin- order, te+porar/ or per+anent in=unction is sou-ht b/ the borro$er4s5 or an/ third part/ or parties, e?cept after due hearinin $hich it is established b/ the borro$er and ad+itted b/ the -overn+ent financial institution concerned that t$ent/ percent 401E5 of the outstandin- arreara-es has been paid after the filin- of foreclosure proceedin-s. In case a restrainin- order or in=unction is issued, the borro$er shall nevertheless be le-all/ obli-ated to li>uidate the re+ainin- balance of the arreara-es, pa/in- ten percent 4'1E5 of the arreara-es outstandin- as of the ti+e of foreclosure, plus interest and other char-es, on ever/ succeedin- thirtieth 421th5 da/ after the issuance of such restrainin- order or in=unction until the entire arreara-es have been li>uidated. These shall be in addition to the pa/+ent of a+orti;ations currentl/ +aturin-. The restrainin- order or in=unction shall auto+aticall/ be dissolved should the borro$er fail to +a,e an/ of the above6+entioned pa/+ents on due dates, and no restrainin- order or in=unction shall be issued thereafter. This shall be $ithout pre=udice to the e?ercise b/ the -overn+ent financial institutions of such ri-hts andFor re+edies available to the+ under their respective charters and their respective contracts $ith their debtors, nor should this provision be construed as restrictin- the -overn+ent financial institutions concerned fro+ approvin-, solel/ at its o$n discretion, an/ restructurin-, recapitali;ation, or an/ other arran-e+ent that $ould place the entire account on a current basis, provided, ho$ever, that at least t$ent/ percent 401E5 of the arreara-es outstandin- at the ti+e of the foreclosure is paid. 3ll restrainin- orders and in=unctions e?istin- as of the date of this Decree on foreclosure proceedin-s filed b/ said -overn+ent financial institutions shall be considered lifted unless finall/ resolved b/ the court $ithin si?t/ 4A15 da/s fro+ date hereof.
(

Re>uirin- 7overn+ent Financial Institutions to Foreclose Mandatoril/ 3ll !oans $ith 3rreara-es, Includin- Interest and *har-es, 3+ountin- to at least T$ent/ Percent 401E5 of the Total OutstandinObli-ation.
'1

*3 rollo, pp. (26'1%. Id. at %06&2. Id. at %(, &2. Id. at '2(6'&1. Id. at '216'2A.

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Id. at '2)6'28. Id. at &%6&&. Id. at 'A(6')A. Id. at '))6'80. Id. at '826'8%. Id. at &A. Id. at '062). Rollo, p. 08A. *3 rollo, pp. &)6A1. Section 0, Rule 0, '(() Rules of *ivil Procedure, as a+ended.

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See Heirs of Loreto C. Maramag v. Maramag, 7.R. No. '8''20, .une &, 011(, &88 S*R3 ))%, )8% andBank of America N ! "A v. Court of Appeals, 7.R. No. '01'2&, March 2', 0112, %11 S*R3 '&A, 'A).

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 1-382. August 17, 2011

ROMAN CAT"OL#C ARC"B#S"OP O! SAN !ERNANDO, PAMPANGA /,0/,s,&t,' 1,/,2& 34 t1, 2&5u63,&t A/5132s1o0, Petitioner, vs. EDUARDO SOR#ANO, )R., EDNA 7ALUN, EVANGEL#NA ABLA(A, !EL#C#DAD 7. URB#NA, !EL#8 SALENGA, RE7NALDO #. MALLAR#, MARC#ANA B. BARCOMA, B#ENVEN#DO PANGAN#BAN, BR#G#DA NAVARRO, EU!RANC#A T. !LORES, V#CTOR#A B. SUDSOD, EU!RON#O CAPARAS, CR#SANTO MANANSALA, L#L7 MASANGCA7, BEN)AM#N GU#NTO, )R., MART"A G. CASTRO %&' L#NO TOLENT#NO, Respondents. ? 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6? G.R. No. 160.0. BEN)AM#N GU#NTO, )R.,' Petitioner, vs. ROMAN CAT"OL#C ARC"B#S"OP O! SAN !ERNANDO, PAMPANGA /,0/,s,&t,' 1,/,2& 34 t1, 2&5u63,&t A/5132s1o0, Respondent. D V#LLARAMA, )R., J.: *ISION

#efore this *ourt are t$o petitions for resolution: the first, a Petition for Revie$ on *ertiorari under Rule %& of the'(() Rules of *ivil Procedure, as a+ended, filed b/ the Ro+an *atholic 3rchbishop 4R*35 of San Fernando, Pa+pan-a, assailin- the March '8, 0110 Decision0 and the Ma/ 21, 0110 Resolution2 of the *ourt of 3ppeals 4*35 in *367.R. SP No. AA()%I and the second, a Petition for In=unction under Rule &8, filed b/ #en=a+in 7uinto, .r. 47uinto5, see,in- to en=oin the i+ple+entation of the Hrit of ?ecution % dated October '%, 0112, issued b/ the Municipal *ircuit Trial *ourt 4M*T*5 of Macabebe6Masantol, Pa+pan-a in *ivil *ase No. 01114025. The facts follo$: The R*3 of San Fernando, Pa+pan-a, represented b/ Most Rev. Paciano #. 3niceto, D.D., clai+ed that it is the o$ner of a vast tract of land located near the *atholic *hurch at Poblacion, Macabebe, Pa+pan-a and covered b/ Ori-inal *ertificate of Title 4O*T5 No. ')A0( issued b/ the Re-istr/ of Deeds of San Fernando on Februar/ 0', '(0(.& The R*3 alle-ed that several individuals unla$full/ occupied the sub=ect land and refused to vacate despite repeated de+ands. @avin- no other recourse, the R*3 filed an e=ect+ent case, doc,eted as *ivil *ase No. 01114025, before the M*T* of Macabebe6Masantol, Pa+pan-a a-ainst the alle-ed intruders, na+el/, !eocadio and Rufina Re/es, .ose #ala-tas, Marcial and Victoria #ala-tas, !evita Nalu;, Dionisio #arco+a, Felicidad "rbina, .ustiniano Re/es, !a$rence Muni;, duardo Soriano, *os+er Ver-ara, Perlita #ustos, #ri-ida Navarro, !eonoda *ru;, !eonida Manansala, 3n-elito .uliano, duardo Iba/, dna Jalun-, Re/naldo Mallari, !il/ Masan-ca/, van-elina 3bla;a, *risanto Manansala, Feli;a s-uerra, 7loria Manansala, #ienvenido and Felicisi+a Pan-aniban, Ofroneo *aparas, Tino nri>ue;, li;abeth and #en=a+in 7uinto, Feli? Salen-a, leno and Rosala Salen-a, !uisa and Do+in-o Sison, Francia Flores, duardo and Rosita 7utierre;, <osi+a and ner #asilio, 3nd/ and !oreto #onifacio, Peter and Felicisi+a Villa=uan. A On the other hand, defendants countered that the R*3 has no cause of action a-ainst the+ because its title is spurious. The/ contended that the sub=ect land belon-ed to the State, but the/ have alread/ ac>uired the sa+e b/ ac>uisitive prescription as the/ and their predecessors6in6interest have been in continuous possession of the land for +ore than thirt/ 4215 /ears. 3fter considerin- the pleadin-s sub+itted b/ the parties, the M*T* rendered decision on Septe+ber 08, 011' in favor of the R*3. The trial court held that O*T No. ')A0( in the na+e of the R*3 re+ains valid and bindina-ainst the $hole $orld until it is declared void b/ a court of co+petent =urisdiction. Thus, defendants $ere ordered to vacate the pre+ises and to pa/ reasonable +onthl/ rentals fro+ 3u-ust '&, 0111 until the/ shall have finall/ vacated the pre+ises.) Defendants appealed to the Re-ional Trial *ourt 4RT*5. @o$ever, the appeal $as dis+issed because of their failure to file the appeal +e+orandu+. Hhen defendants elevated the case to the *3, their petition for certiorari $as not -iven due course for failure to file the sa+e $ithin the e?tended period. @ence, the decision e=ectin- the defendants fro+ the pre+ises beca+e final. Pursuant to Section 0',8 Rule )1 of the '(() Rules of *ivil Procedure, as a+ended, the R*3 filed an "r-ent Motion for I++ediate Issuance of a Hrit of ?ecution, $hich the M*T* -ranted in an Order ( dated Februar/ '1, 0112, as follo$s: H@ R FOR , on the basis of the rules and =urisprudence aforecited, the Motion for ?ecution filed b/ plaintiff is hereb/ -ranted. !et a $rit of e?ecution be issued in connection $ith this case $hich is a +inisterial dut/ of the *ourt. Defendants9 Motion for Inhibition is denied for lac, of +erit. SO ORD R D.'1 Thereafter, the M*T* issued another Order dated October A, 0112, the pertinent portion of $hich states: !et a $rit of e?ecution be issued to i+ple+ent the Decision dated Septe+ber 08, 011'. No further defendants9 +otion to sta/ e?ecution shall be entertained.

SO ORD R D.'' 3ccordin-l/, a $rit of e?ecution'0 $as issued co++andin- the sheriff or his deputies to i+ple+ent the M*T* Decision. Thus, Sheriff d-ar .oseph *. David sent the defendants a Notice to Vacate '2 dated Dece+ber 8, 0112. See,in- to en=oin the i+ple+entation of the $rit of e?ecution and the notice to vacate, 7uinto filed the instant Petition for In=unction $ith Pra/er for Issuance of a Te+porar/ Restrainin- Order 4TRO5,'% doc,eted as 7.R. No. 'A1(1(. Mean$hile, durin- the pendenc/ of the e=ect+ent case at the M*T*, so+e of the defendants therein, na+el/, duardo Soriano, .r., dna Jalun, van-elina 3bla;a, Felicidad J. "rbina, Feli? Salen-a, Re/naldo I. Mallari, Marciana #. #arco+a, #ienvenido Pan-aniban, #ri-ida Navarro, ufrancia T. Flores, Victoria #. Sodsod, ufronio *aparas, *risanto Manansala, !il/ Masan-ca/, #en=a+in 7uinto, .r., Martha 7. *astro and !ino Tolentino filed *ivil *ase No. 1'6'1%A4M5 a-ainst the R*3 for Kuietin- of Title and Declaration of Nullit/ of Title before the RT* of Macabebe, Pa+pan-a.'& The/ clai+ed that the/ are in actual possession of the land in the concept of o$ners and alle-ed that O*T No. ')A0( in the na+e of R*3 is spurious and fa,e. #efore filin- its 3ns$er, the R*3 +oved to dis+iss the case on -rounds of nonco+pliance $ith a condition precedent, laches, and for bein- a collateral attac, on its title. The R*3 li,e$ise later filed a supple+ent to its +otion to dis+iss. In an Order'A dated .une %, 011', the RT* denied the +otion to dis+iss reasonin- that $hen the rules spea, of nonco+pliance $ith a condition precedent, it could refer onl/ to the failure of a part/ to secure the appropriate certificate to file action under the !ocal 7overn+ent *ode, or the failure to e?ert earnest efforts to$ards an a+icable settle+ent $hen the suit involves +e+bers of the sa+e fa+il/. The RT* also found that plaintiffs have a cause of action. Further+ore, the trial court held that R*39s ar-u+ent M that the propert/ cannot be ac>uired b/ prescription because it has title over it M is a +atter of evidence $hich +a/ be established durin- the trial on the +erits. 3--rieved, the R*3 filed a +otion for reconsideration, $hich the trial court denied in an Order ') dated .ul/ 0%, 011'. Thereafter, the R*3 filed $ith the *3 a petition for certiorari $ith pra/er for preli+inar/ in=unction. '8 On March '8, 0110, the *3 pro+ul-ated the assailed Decision,'( the dispositive portion of $hich reads: *"ERE!ORE, for lac, of +erit, the petition is hereb/ D#SM#SSED. SO ORDERED.01 3 +otion for reconsideration0' of the Decision $as filed b/ the R*3. @o$ever, in the Resolution00 dated Ma/ 21, 0110, the *3 denied the +otion for lac, of +erit. @ence, the R*3 filed the present petition for revie$ on certiorari,02 doc,eted as 7.R. No. '&280(, assailin- the Decision of the *3, as $ell as its Resolution den/inthe +otion for reconsideration. On .anuar/ '%, 011%, $e resolved to consolidate 7.R. Nos. 'A1(1( and '&280(.0% Subse>uentl/, the *ourt resolved to treat the petition for in=unction $ith pra/er for the issuance of a TRO in 7.R. No. 'A1(1( as a +otion for the issuance of a TRO andFor $rit of preli+inar/ in=unction in 7.R. No. '&280(.0& The R*3 raises the follo$in- issues: 435 H@ T@ R OR NOT *IVI! *3S NO. 1'6'1%A4M5 FOR K"I TIN7 OF TIT! 3ND D *!3R3TION OF N"!!ITJ OF TIT! IS ! 73!!J DISMISSI#! FOR VIO!3TION OF T@ V3RIO"S PROVISIONS OF T@ R"! S OF *O"RTI and

4#5 H@ T@ R OR NOT T@ *IVI! 3*TION 4T@ 3#OV M NTION D *IVI! *3S NO. 1'6'1%ABMC5 FI! D #J PRIV3T R SPOND NTS *ONSTIT"T S 3 *O!!3T R3! 3TT3*N ON P TITION ROS TIT! .0A ssentiall/, the issue before us is $hether the *3 erred in not holdin- that the RT* co++itted -rave abuse of discretion in den/in- the +otion to dis+iss filed b/ the R*3. He affir+ the rulin- of the *3. Hell6entrenched in our =urisdiction is the rule that the trial court9s denial of a +otion to dis+iss cannot be >uestioned in a certiorari proceedin- under Rule A& of the '(() Rules of *ivil Procedure, as a+ended. This is because a certiorari $rit is a re+ed/ desi-ned to correct errors of =urisdiction and not errors of =ud-+ent. The appropriate course of action of the +ovant in such event is to file an ans$er and interpose as affir+ative defenses the ob=ections raised in the +otion to dis+iss. If, later, the decision of the trial =ud-e is adverse, the +ovant +a/ then elevate on appeal the sa+e issues raised in the +otion.0) The onl/ e?ception to this rule is $hen the trial court -ravel/ abused its discretion in den/in- the +otion. 08 This e?ception is, nevertheless, applied sparin-l/, and onl/ in instances $hen there is a clear sho$in- that the trial court e?ercised its =udicial po$er in an arbitrar/ or despotic +anner b/ reason of passion or personal hostilit/.0(Further, the abuse of the courtOs discretion +ust be so patent and -ross as to a+ount to an evasion of a positive dut/ or a virtual refusal to perfor+ the dut/ en=oined b/, or to act at all in conte+plation of, la$. 21 @ere, in dis+issin- the petition for certiorari, the *3 did not find -rave abuse of discretion on the part of the RT*. The appellate court $as not convinced $ith the R*39s ar-u+ent that plaintiffs failed to co+pl/ $ith the condition precedent provided in 3rticle %))2' of the *ivil *ode because the/ alle-edl/ did not have le-al or e>uitable title to, or interest in the real propert/. The *3 e?plained that the re>uire+ent stated in 3rticle %)) is not a condition precedent before one can file an action for >uietin- of title. Rather, it is a re>uisite for an action to >uiet title to prosper and the e?istence or none?istence of the re>uisite should be deter+ined onl/ after trial on the +erits. The *3 also a-reed $ith the trial court in rulin- that the R*3 cannot raise in a +otion to dis+iss the -round that the co+plaint is alread/ barred b/ laches for it still re+ains to be established durin- trial ho$ lonthe plaintiffs have slept on their ri-hts, if such be the case. videntl/, the *3 is correct in findin- that the denial b/ the RT* of the R*39s +otion to dis+iss is not tainted $ith -rave abuse of discretion. Ne?t, the R*3 sub+its that an action for >uietin- of title is a special civil action covered b/ Rule A2, $hile an action for declaration of nullit/ of title is -overned b/ ordinar/ rules. Thus, it contends that these cases should have been dis+issed for violation of the rule on =oinder of actions under Section &, Rule 0 of the '(() Rules of *ivil Procedure, as a+ended, $hich re>uires that the =oinder shall not include special civil actions -overned b/ special rules. Such contention, ho$ever, is utterl/ bereft of +erit and insufficient to sho$ that the *3 erred in upholdin- the trial court9s decision. Section A of Rule 0 e?plicitl/ provides that +is=oinder of causes of action is not a -round for dis+issal of an action. The R*3 li,e$ise asserts that the case for >uietin- of title is a collateral attac, on its title $hich is prohibited b/ la$. @o$ever, $e a-ree $ith the *3 in holdin- that the co+plaint a-ainst the R*3 does not a+ount to a collateral attac, because the action for the declaration of nullit/ of O*T No. ')A0( is a clear and direct attac, on its title. 3n action is dee+ed an attac, on a title $hen its ob=ective is to nullif/ the title, thereb/ challen-in- the =ud-+ent pursuant to $hich the title $as decreed. The attac, is direct $hen the ob=ective is to annul or set aside such =ud-+ent, or en=oin its enforce+ent. On the other hand, the attac, is indirect or collateral $hen, in an action to obtain a different relief, an attac, on the =ud-+ent is nevertheless +ade as an incident thereof. 20 The co+plaint filed $ith the RT* pertinentl/ alle-ed that the clai+ of o$nership b/ the R*3 is spurious as its title, deno+inated as O*T No. ')A0(, is fa,e for the follo$in- reasons: 4'5 that the erasures are ver/ apparent and the title itself is fa,eI 405 it $as +ade to appear under Me+orandu+ of ncu+brance ntr/ No. '11) that the title is a reconstituted title $hen in truth, it is notI and 425 the verification reveals that there $as no petition filed before an/ court $here an order $as issued for the reconstitution and re6issuance of an o$ner9s duplicate cop/. 22 It is thus clear fro+ the fore-oin- that the case filed >uestionin- the -enuineness of O*T No. ')A0( is a direct attac, on the title of the R*3.

3s re-ards the petition doc,eted as 7.R. No. 'A1(1( $hich this *ourt treated as +otion for the issuance of a TRO andFor $rit of preli+inar/ in=unction, 7uinto insists that there is a need to en=oin the sheriff fro+ enforcin- the $rit of e?ecution as it $ould cause -rave and irreparable da+a-e to 7uinto, $hile the R*3 $ould not suffer an/ da+a-e if it $ould later be proved that indeed its title is -enuine. He disa-ree. Section 2, Rule &8 of the '(() Rules of *ivil Procedure, as a+ended, enu+erates the -rounds for the issuance of preli+inar/ in=unction, vi;: S *. 2. 7rounds for issuance of preli+inar/ in=unction. M 3 preli+inar/ in=unction +a/ be -ranted $hen it is established: 4a5 That the applicant is entitled to the relief de+anded, and the $hole or part of such relief consists in restrainin- the co++ission or continuance of the act or acts co+plained of, or in re>uirin- the perfor+ance of an act or acts, either for a li+ited period or perpetuall/I 4b5 That the co++ission, continuance or nonperfor+ance of the act or acts co+plained of durin- the liti-ation $ould probabl/ $or, in=ustice to the applicantI or 4c5 That a part/, court, a-enc/ or a person is doin-, threatenin-, or is atte+ptin- to do, or is procurinor sufferin- to be done, so+e act or acts probabl/ in violation of the ri-hts of the applicant respectinthe sub=ect of the action or proceedin-, and tendin- to render the =ud-+ent ineffectual. 3nd as clearl/ e?plained in #campo v. "ison $da. de %ernande&:2% To be entitled to the in=unctive $rit, the applicant +ust sho$ that there e?ists a ri-ht to be protected $hich is directl/ threatened b/ an act sou-ht to be en=oined. Further+ore, there +ust be a sho$in- that the invasion of the ri-ht is +aterial and substantial and that there is an ur-ent and para+ount necessit/ for the $rit to prevent serious da+a-e. The applicant9s ri-ht +ust be clear and un+ista,able. In the absence of a clear le-al ri-ht, the issuance of the $rit constitutes -rave abuse of discretion. Hhere the applicant9s ri-ht or title is doubtful or disputed, in=unction is not proper. The possibilit/ of irreparable da+a-e $ithout proof of an actual e?istin- ri-ht is not a -round for in=unction. 3 clear and positive ri-ht especiall/ callin- for =udicial protection +ust be sho$n.1avvphi1 In=unction is not a re+ed/ to protect or enforce contin-ent, abstract, or future ri-htsI it $ill not issue to protect a ri-ht not in esse and $hich +a/ never arise, or to restrain an act $hich does not -ive rise to a cause of action. There +ust e?ist an actual ri-ht. There +ust be a patent sho$in- b/ the applicant that there e?ists a ri-ht to be protected and that the acts a-ainst $hich the $rit is to be directed are violative of said ri-ht. In this case, the defendants in the e=ect+ent case possess no such le-al ri-hts that +erit the protection of the courts throu-h the $rit of preli+inar/ in=unction. The M*T* has alread/ rendered a decision in favor of the R*3 and ordered the defendants therein to vacate the pre+ises. Their appeal to the RT* $as dis+issed and the decision has beco+e final. videntl/, their ri-ht to possess the propert/ in >uestion has alread/ been declared inferior or ine?istent in relation to the ri-ht of the R*3 in the M*T* decision $hich has alread/ beco+e final and e?ecutor/.2& *"ERE!ORE, the petition in 7.R. No. '&280( is DEN#ED. The Decision dated March '8, 0110 and the Resolution dated Ma/ 21, 0110 of the *ourt of 3ppeals in *367.R. SP No. AA()% are A!!#RMED. The +otion for the issuance of a TRO andFor $rit of preli+inar/ in=unction to en=oin the sheriff fro+ enforcin- the $rit of e?ecution in *ivil *ase No. 01114025 is li,e$ise DEN#ED for lac, of +erit. No costs. SO ORD R D.

MART#N S. V#LLARAMA, )R. 3ssociate .ustice H *ON*"R: RENATO C. CORONA *hief .ustice *hairperson TERES#TA ). LEONARDO+DE CASTRO 3ssociate .ustice LUCAS P. BERSAM#N 3ssociate .ustice

MAR#ANO C. DEL CAST#LLO 3ssociate .ustice * RTIFI*3TION

Pursuant to Section '2, 3rticle VIII of the '(8) *onstitution, I certif/ that the conclusions in the above Decision had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt9s Division. RENATO C. CORONA *hief .ustice

!oot&ot,s
'

Rollo 47.R. No. 'A1(1(5, p. '1.

Rollo 47.R. No. '&280(5, pp. 0'60A. Penned b/ 3ssociate .ustice Perlita .. Tria Tirona $ith 3ssociate .ustices ubulo 7. Ver;ola and #ernardo P. 3besa+is concurrin-.
2

Id. at 08. Rollo 47.R. No. 'A1(1(5, pp. '8601. Records, p. ''. Id. at '6(. Rollo 47.R. No. 'A1(1(5, pp. 0'62). Penned b/ .ud-e Valentino #. No-o/.

&

Sec. 0'. I++ediate e?ecution on appeal to *ourt of 3ppeals or Supre+e *ourt.PThe =ud-+ent of the Re-ional Trial *ourt a-ainst the defendant shall be i++ediatel/ e?ecutor/, $ithout pre=udice to a further appeal that +a/ be ta,en therefro+.
(

Rollo 47.R. No. 'A1(1(5, pp. '26'A. Id. at 'A. Id. at '). Supra note %.

'1

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'0

'2

Id. at 0'. Id. at 26'0. Rollo, 47.R. No. '&280(5, pp. 2A6%2. Id. at %%6%&. Issued b/ .ud-e @er+inio <. *anlas. Id. at %A6%). *3 rollo, pp. 06'). Supra note 0. Id. at 0&. Id. at 0(62&. Id. at 08. Id. at 26'(. Rollo 47.R. No. 'A1(1(5, p. 28. Id. at 2(. Rollo 47.R. No. '&280(5, p. (.

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'&

'A

')

'8

'(

01

0'

00

02

0%

0&

0A

0)

"rethane Tradin- Specialist, Inc. v. On-, 7.R. No. 'A%A20, October 0(, 0118, &)1 S*R3 '88, '('6 '(0.
08

See Nicolas v. Sandi-anba/an, 7.R. Nos. ')&(2162' Q ')A1'16'', Februar/ '', 0118, &%% S*R3 20%, 22A and *hoa v. *hoa, %%' Phil. ')&, '806'82 401105.
0(

#alo v. *ourt of 3ppeals, 7.R. No. '0()1%, Septe+ber 21, 011&, %)' S*R3 00), 02%. Id.

21

2'

3rt. %)). The plaintiff +ust have le-al or e>uitable title to, or interest in the real propert/ $hich is the sub=ect +atter of the action. @e need not be in possession of said propert/.
20

Sar+iento v. *ourt of 3ppeals, 7.R. No. '&0A0), Septe+ber 'A, 011&, %)1 S*R3 ((, '1)6'18. Rollo 47.R. No. '&280(5, p. 2). 7.R. No. 'A%&0(, .une '(, 011), &0& S*R3 )(, (%6(&. See Medina v. Cit' "heriff( Manila, 2%0 Phil. (1, () 4'(()5.

22

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Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

G.R. No. 169703

M%4 9, 2010

ALLAN C. GO, 'o2&g 3us2&,ss u&',/ t1, &%6, %&' st4:, ;ACG E<0/,ss L2&,/,; Petitioner, vs. MORT#MER !. CORDERO, Respondent. ? 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6? G.R. No. 169797 MORT#MER !. CORDERO, Petitioner, vs. ALLAN C. GO, 'o2&g 3us2&,ss u&',/ t1, &%6, %&' st4:, ;ACG E<0/,ss L2&,/,; !EL#PE M. LAND#C"O %&' V#NCENT D. TECSON, Respondents. D V#LLARAMA, )R., J.: For revie$ is the Decision' dated March 'A, 011% as +odified b/ the Resolution0 dated .ul/ 00, 011% of the *ourt of 3ppeals 4*35 in *367.R. *V No. A(''2, $hich affir+ed $ith +odifications the Decision 2 dated Ma/ 2', 0111 of the Re-ional Trial *ourt 4RT*5 of Kue;on *it/, #ranch 8& in *ivil *ase No. (862&220. The factual antecedents: So+eti+e in '((A, Morti+er F. *ordero, Vice6President of Pa+ana Mar,etin- *orporation 4Pa+ana5, ventured into the business of +ar,etin- inter6island passen-er vessels. 3fter contactin- various overseas fast ferr/ +anufacturers fro+ all over the $orld, he ca+e to +eet Ton/ Robinson, an 3ustralian national based in #risbane, 3ustralia, $ho is the Mana-in- Director of 3lu+iniu+ Fast Ferries 3ustralia 43FF35. #et$een .une and 3u-ust '((), Robinson si-ned docu+ents appointin- *ordero as the e?clusive distributor of 3FF3 cata+aran and other fast ferr/ vessels in the Philippines. 3s such e?clusive distributor, *ordero offered for sale to prospective bu/ers the 0&6+eter 3lu+iniu+ Passen-er cata+aran ,no$n as the S 3*3T 0&. % 3fter ne-otiations $ith Felipe !andicho and Vincent Tecson, la$/ers of 3llan *. 7o $ho is the o$nerFoperator of 3*7 ?press !iner of *ebu *it/, a sin-le proprietorship, *ordero $as able to close a deal for the purchase of t$o 405 S 3*3T 0& as evidenced b/ the Me+orandu+ of 3-ree+ent dated 3u-ust ), '(().& 3ccordin-l/, the parties e?ecuted Shipbuildin- *ontract No. )80& for one 4'5 hi-h6speed cata+aran 4S 3*3T 0&5 for the price of "SR',%A&,&'0.11.A Per a-ree+ent bet$een Robinson and *ordero, the latter shall receive co++issions totallin- "SR208,)%0.11, or 00.%2E of the purchase price, fro+ the sale of each vessel.) *ordero +ade t$o 405 trips to the 3FF3 Ship/ard in #risbane, 3ustralia, and on one 4'5 occasion even acco+panied 7o and his fa+il/ and !andicho, to +onitor the pro-ress of the buildin- of the vessel. @e shouldered all the e?penses for airfare, food, hotel acco++odations, transportation and entertain+ent durinthese trips. @e also spent for lon- distance telephone calls to co++unicate re-ularl/ $ith Robinson, 7o, Tecson and !andicho. @o$ever, *ordero later discovered that 7o $as dealin- directl/ $ith Robinson $hen he $as infor+ed b/ Dennis Padua of Hartsila Philippines that 7o $as canvassin- for a second cata+aran en-ine fro+ their co+pan/ $hich provided the ship en-ine for the first S 3*3T 0&. Padua told *ordero that 7o instructed hi+ to fa? the re>uested >uotation of the second en-ine to the Par, Ro/al @otel in #risbane $here 7o $as then sta/in-. *ordero tried to contact 7o and !andicho to confir+ the +atter but the/ $ere no$here to be found, $hile Robinson refused to ans$er his calls. *ordero i++ediatel/ fle$ to #risbane to clarif/ +atters $ith Robinson, onl/ to find out that 7o and !andicho $ere alread/ there in #risbane ne-otiatin- for the sale of the second S 3*3T 0&. Despite repeated follo$6up calls, no e?planation $as -iven b/ Robinson, 7o, !andicho and Tecson $ho even +ade *ordero believe there $ould be no further sale bet$een 3FF3 and 3*7 ?press !iner. *ISION

In a hand$ritten letter dated .une 0%, '((8, *ordero infor+ed 7o that such act of dealin- directl/ $ith Robinson violated his e?clusive distributorship and de+anded that the/ respect the sa+e, $ithout pre=udice to le-al action a-ainst hi+ and Robinson should the/ fail to heed the sa+e. 8 *ordero9s la$/er, 3tt/. rnesto 3. Tabu=ara, .r. of 3**R3 la$ fir+, also $rote 3*7 ?press !iner assailin- the fraudulent actuations and +isrepresentations co++itted b/ 7o in connivance $ith his la$/ers 4!andicho and Tecson5 in breach of *ordero9s e?clusive distributorship appoint+ent.( @avin- been apprised of *ordero9s de+and letter, Th/ne Q Macartne/, the la$/er of 3FF3 and Robinson, fa?ed a letter to 3**R3 la$ fir+ assertin- that the appoint+ent of *ordero as 3FF39s distributor $as for the purpose of one 4'5 transaction onl/, that is, the purchase of a hi-h6speed cata+aran vessel b/ 3*7 ?press !iner in 3u-ust '((). The letter further stated that *ordero $as offered the e?clusive distributorship, the ter+s of $hich $ere contained in a draft a-ree+ent $hich *ordero alle-edl/ failed to return to 3FF3 $ithin a reasonable ti+e, and $hich offer is alread/ bein- revo,ed b/ 3FF3.'1 3s to the response of 7o, !andicho and Tecson to his de+and letter, *ordero testified before the trial court that on the sa+e da/, !andicho, actin- on behalf of 7o, tal,ed to hi+ over the telephone and offered to a+icabl/ settle their dispute. Tecson and !andicho offered to convince 7o to honor his e?clusive distributorship $ith 3FF3 and to purchase all vessels for 3*7 ?press !iner throu-h hi+ for the ne?t three 425 /ears. In an effort to a+icabl/ settle the +atter, !andicho, actin- in behalf of 7o, set up a +eetin- $ith *ordero on .une 0(, '((8 bet$een (:21 p.+. to '1:21 p.+. at the Mactan Island Resort @otel lobb/. On said date, ho$ever, onl/ !andicho and Tecson ca+e and no reason $as -iven for 7o9s absence. Tecson and !andicho proposed that the/ $ill convince 7o to pa/ hi+ "SR',&11,111.11 on the condition that the/ $ill -et a cut of 01E. 3nd so it $as a-reed bet$een hi+, !andicho and Tecson that the latter $ould -ive hi+ a $ee,l/ status report and that the +atter $ill be settled in three 425 to four 4%5 $ee,s and neither part/ $ill file an action a-ainst each other until a final report on the proposed settle+ent. No such report $as +ade b/ either Tecson or !andicho $ho, it turned out, had no intention to do so and $ere =ust bu/in- ti+e as the cata+aran vessel $as due to arrive fro+ 3ustralia. *ordero then filed a co+plaint $ith the #ureau of *usto+s 4#O*5 to prohibit the entr/ of S 3*3T 0& fro+ 3ustralia based on +isdeclaration and undervaluation. *onse>uentl/, an 3lert Order $as issued b/ 3ctin- #O* *o++issioner Nelson Tan for the vessel $hich in fact arrived on .ul/ '), '((8. *ordero clai+ed that 7o and Robinson had conspired to undervalue the vessel b/ around "SR&11,111.11.'' On 3u-ust 0', '((8, *ordero instituted *ivil *ase No. (862&220 see,in- to hold Robinson, 7o, Tecson and !andicho liable =ointl/ and solidaril/ for connivin- and conspirin- to-ether in violatin- his e?clusive distributorship in bad faith and $anton disre-ard of his ri-hts, thus deprivin- hi+ of his due co++issions 4balance of unpaid co++ission fro+ the sale of the first vessel in the a+ount of "SR2',&00.1' and unpaid co++ission for the sale of the second vessel in the a+ount of "SR208,)%0.115 and causin- hi+ actual, +oral and e?e+plar/ da+a-es, includin- P811,111.11 representin- e?penses for airplane travel to 3ustralia, teleco++unications bills and entertain+ent, on account of 3FF39s unti+el/ cancellation of the e?clusive distributorship a-ree+ent. *ordero also pra/ed for the a$ard of +oral and e?e+plar/ da+a-es, as $ell as attorne/9s fees and liti-ation e?penses.'0 Robinson filed a +otion to dis+iss -rounded on lac, of =urisdiction over his person and failure to state a cause of action, assertin- that there $as no act co++itted in violation of the distributorship a-ree+ent. Said +otion $as denied b/ the trial court on Dece+ber 01, '(((. Robinson $as li,e$ise declared in default for failure to file his ans$er $ithin the period -ranted b/ the trial court.'2 3s for 7o and Tecson, their +otion to dis+iss based on failure to state a cause of action $as li,e$ise denied b/ the trial court on Februar/ 0A, '(((.'% Subse>uentl/, the/ filed their 3ns$er den/in- that the/ have an/thin- to do $ith the ter+ination b/ 3FF3 of *ordero9s authorit/ as e?clusive distributor in the Philippines. On the contrar/, the/ averred it $as *ordero $ho stopped co++unicatin- $ith 7o in connection $ith the purchase of the first vessel fro+ 3FF3 and $as not doin- his part in +a,in- pro-ress status reports and airin- the client9s -rievances to his principal, 3FF3, such that 7o en-a-ed the services of !andicho to fl/ to 3ustralia and attend to the docu+ents needed for ship+ent of the vessel to the Philippines. 3s to the in>uir/ for the Philippine price for a Hartsila ship en-ine for 3FF39s other on6-oin- vessel construction, this $as +erel/ re>uested b/ Robinson but $hich *ordero +isinterpreted as indication that 7o $as bu/in- a second vessel. Moreover, !andicho and Tecson had no transaction $hatsoever $ith *ordero $ho had no docu+ent to sho$ an/ such shipbuildin- contract. 3s to the supposed +eetin- to settle their dispute, this $as due to the +alicious de+and of *ordero to be -iven "SR2,111,111 as other$ise he $ill e?pose in the +edia the alle-ed undervaluation of the vessel $ith the #O*. In an/ case, *ordero no lon-er had cause of action for his co++ission for the sale of the second vessel under the +e+orandu+ of a-ree+ent dated 3u-ust ), '(() considerin- the ter+ination of his authorit/ b/ 3FF39s la$/ers on .une 0A, '((8.'&

Pre6trial $as reset t$ice to afford the parties opportunit/ to reach a settle+ent. @o$ever, on +otion filed b/ *ordero throu-h counsel, the trial court reconsidered the resettin- of the pre6trial to another date for the third ti+e as re>uested b/ 7o, Tecson and !andicho, in vie$ of the latter9s failure to appear at the pre6trial conference on .anuar/ ), 0111 despite due notice. The trial court further confir+ed that said defendants +isled the trial court in +ovin- for continuance durin- the pre6trial conference held on Dece+ber '1, '(((, purportedl/ to -o abroad for the holida/ season $hen in truth a @old6Departure Order had been issued a-ainst the+.'A 3ccordin-l/, plaintiff *ordero $as allo$ed to present his evidence e? parte. *ordero9s testi+on/ re-ardin- his transaction $ith defendants 7o, !andicho and Tecson, and the latter9s offer of settle+ent, $as corroborated b/ his counsel $ho also too, the $itness stand. Further, docu+entar/ evidence includin- photo-raphs ta,en of the .une 0(, '((8 +eetin- $ith !andicho, Tecson and 3tt/. Tabu=ara at Shan-ri6la9s Mactan Island Resort, photo-raphs ta,en in #risbane sho$in- *ordero, 7o $ith his fa+il/, Robinson and !andicho, and also various docu+ents, co++unications, vouchers and ban, trans+ittals $ere presented to prove that: 4'5 *ordero $as properl/ authori;ed and actuall/ transacted in behalf of 3FF3 as e?clusive distributor in the PhilippinesI 405 *ordero spent considerable su+s of +one/ in pursuance of the contract $ith 7o and 3*7 ?press !inerI and 425 3FF3 throu-h Robinson paid *ordero his co++issions fro+ each scheduled pa/+ent +ade b/ 7o for the first S 3*3T 0& purchased fro+ 3FF3 pursuant to Shipbuildin*ontract No. )80&.') On Ma/ 2', 0111, the trial court rendered its decision, the dispositive portion of $hich reads as follo$s: H@ R FOR , PR MIS S *ONSID R D, =ud-+ent is hereb/ rendered in favor of Plaintiff and a-ainst defendants 3llan *. 7o, Ton/ Robinson, Felipe !andicho, and Vincent Tecson. 3s pra/ed for, defendants are hereb/ ordered to pa/ Plaintiff =ointl/ and solidaril/, the follo$in-: '. On the First *ause of 3ction, the su+ total of SIST N MI!!ION THO @"NDR D NIN TJ ON T@O"S3ND T@R @"NDR D FIFTJ THO 3ND FORTJ T@R * NT3VOS 4P'A,0(',2&0.%25 as actual da+a-es $ith le-al interest fro+ 0& .une '((8 until full/ paidI 0. On the Second *ause of 3ction, the su+ of ON MI!!ION P SOS 4P',111,111.115 as +oral da+a-esI 2. On the Third *ause of 3ction, the su+ of ON MI!!ION P SOS 4P',111,111.115 as e?e+plar/ da+a-esI and %. On the Fourth *ause of 3ction, the su+ of ON MI!!ION P SOS 4P',111,111.115 as attorne/9s feesI *osts a-ainst the defendants. SO ORD R D.'8 7o, Robinson, !andicho and Tecson filed a +otion for ne$ trial, clai+in- that the/ have been undul/ pre=udiced b/ the ne-li-ence of their counsel $ho $as alle-edl/ una$are that the pre6trial conference on .anuar/ 08, 0111 did not push throu-h for the reason that *ordero $as then allo$ed to present his evidence e?6 parte, as he had assu+ed that the said e?6parte hearin- $as bein- conducted onl/ a-ainst Robinson $ho $as earlier declared in default.'( In its Order dated .ul/ 08, 0111, the trial court denied the +otion for ne$ trial.01 In the sa+e order, *ordero9s +otion for e?ecution pendin- appeal $as -ranted. Defendants +oved to reconsider the said order insofar as it -ranted the +otion for e?ecution pendin- appeal.0' On 3u-ust 8, 0111, the/ filed a notice of appeal.00 On 3u-ust '8, 0111, the trial court denied the +otion for reconsideration and on 3u-ust 0', 0111, the $rit of e?ecution pendin- appeal $as issued.02 Mean$hile, the notice of appeal $as denied for failure to pa/ the appellate court doc,et fee $ithin the prescribed period.0% Defendants filed a +otion for reconsideration and to trans+it the case records to the *3.0&

On Septe+ber 0(, 0111, the *3 issued a te+porar/ restrainin- order at the instance of defendants in the certiorari case the/ filed $ith said court doc,eted as *367.R. SP No. A12&% >uestionin- the e?ecution orders issued b/ the trial court. *onse>uentl/, as re>uested b/ the defendants, the trial court recalled and set aside its Nove+ber A, 0111 Order -rantin- the e?6parte +otion for release of -arnished funds, cancelled the scheduled public auction sale of levied real properties, and denied the e?6parte Motion for #rea,6Open Order and ?6Parte Motion for ncash+ent of *hec, filed b/ *ordero.0A On Nove+ber 0(, 0111, the trial court reconsidered its Order dated 3u-ust 0', 0111 den/in- due course to the notice of appeal and forth$ith directed the trans+ittal of the records to the *3.0) On .anuar/ 0(, 011', the *3 rendered =ud-+ent -rantin- the petition for certiorari in *367.R. SP No. A12&% and settin- aside the trial court9s orders of e?ecution pendin- appeal. *ordero appealed the said =ud-+ent in a petition for revie$ filed $ith this *ourt $hich $as eventuall/ denied under our Decision dated Septe+ber '), 0110.08 On March 'A, 011%, the *3 in *367.R. *V No. A(''2 affir+ed the trial court 4'5 in allo$in- *ordero to present his evidence e?6parte after the un=ustified failure of appellants 47o, Tecson and !andicho5 to appear at the pre6trial conference despite due noticeI 405 in findin- that it $as *ordero and not Pa+ana $ho $as appointed b/ 3FF3 as the e?clusive distributor in the Philippines of its S 3*3T 0& and other fast ferr/ vessels, $hich is not li+ited to the sale of one 4'5 such cata+aran to 7o on 3u-ust ), '(()I and 425 in findinthat *ordero is entitled to a co++ission per vessel sold for 3FF3 throu-h his efforts in the a+ount e>uivalent to 00.%2E of the price of each vessel or "SR208,)%0.11, and $ith pa/+ents of "SR0(),0'(.(' havin- been +ade to *ordero, there re+ained a balance of "SR2',&00.1( still due to hi+. The *3 sustained the trial court in rulin- that *ordero is entitled to da+a-es for the breach of his e?clusive distributorship a-ree+ent $ith 3FF3. @o$ever, it held that *ordero is entitled onl/ to co++ission for the sale of the first cata+aran obtained throu-h his efforts $ith the re+ainin- unpaid su+ of "SR2',&00.1( or P',2&&,%%(.(1 4on the basis of "SR'.11TP%2.11 rate5 $ith interest at AE per annu+ fro+ the ti+e of the filin- of the co+plaint until the sa+e is full/ paid. 3s to the P811,111.11 representin- e?penses incurred b/ *ordero for transportation, phone bills, entertain+ent, food and lod-in-, the *3 declared there $as no basis for such a$ard, the sa+e bein- the lo-ical and necessar/ conse>uences of the e?clusive distributorship a-ree+ent $hich are nor+al in the field of sales and distribution, and the e?penditures havin- redounded to the benefit of the distributor 4*ordero5. On the a+ounts a$arded b/ the trial court as +oral and e?e+plar/ da+a-es, as $ell as attorne/9s fees, the *3 reduced the sa+e to P&11,111.11, P211,111.11 and P&1,111.11, respectivel/. 3ppellants $ere held solidaril/ liable pursuant to the provisions of 3rticle '01) in relation to 3rticles '(, 01, 0' and 00 of the Ne$ *ivil *ode. The *3 further ruled that no error $as co++itted b/ the trial court in den/in- their +otion for ne$ trial, $hich said court found to be pro for+a and did not raise an/ substantial +atter as to $arrant the conduct of another trial. #/ Resolution dated .ul/ 00, 011%, the *3 denied the +otions for reconsideration respectivel/ filed b/ the appellants and appellee, and affir+ed the Decision dated March 'A, 011% $ith the sole +odification that the le-al interest of AE per annu+ shall start to run fro+ .une 0%, '((8 until the finalit/ of the decision, and the rate of '0E interest per annu+ shall appl/ once the decision beco+es final and e?ecutor/ until the =ud-+ent has been satisfied. The case before us is a consolidation of the petitions for revie$ under Rule %& separatel/ filed b/ 7o 47.R. No. 'A%)125 and *ordero 47.R. No. 'A%)%)5 in $hich petitioners raised the follo$in- ar-u+ents: 7.R. No. 'A%)12 4Petitioner 7o5 I. T@ @ONOR3#! *O"RT OF 3PP 3!S DISR 73RD D T@ R"! S OF *O"RT 3ND P RTIN NT ."RISPR"D N* 3ND 3*T D HIT@ 7R3V 3#"S OF DIS*R TION IN NOT R"!IN7 T@3T T@ R SPOND NT IS NOT T@ R 3! P3RTJ6IN6INT R ST 3ND IN NOT DISMISSIN7 T@ INST3NT *3S ON T@ 7RO"ND OF !3*N OF *3"S OF 3*TIONI II. T@ @ONOR3#! *O"RT OF 3PP 3!S I7NOR D T@ !3H 3ND ."RISPR"D N* 3ND 3*T D HIT@ 7R3V 3#"S OF DIS*R TION IN @O!DIN7 @ R IN P TITION R R SPONSI#!

FOR T@ #R 3*@ IN T@ 3!! 7 D S*!"SIV DISTRI#"TORS@IP 37R 3!"MINI"M F3ST F RRI S 3"STR3!I3I

M NT HIT@

III. T@ @ONOR3#! 3PP !!3T *O"RT MIS3PP!I D T@ !3H 3ND 3*T D HIT@ 7R3V 3#"S OF DIS*R TION IN FINDIN7 P TITION R !I3#! IN SO!ID"M HIT@ T@ *O6 D F ND3NTS HIT@ R SP *T TO T@ *!3IMS OF R SPOND NTI IV. T@ @ONOR3#! *O"RT OF 3PP 3!S MIS3PP!I D !3H 3ND ."RISPR"D N* 3ND 7R3V !J 3#"S D ITS DIS*R TION H@ N IT FO"ND P TITION R !I3#! FOR "NP3ID *OMMISSIONS, D3M37 S, 3TTORN J9S F S, 3ND !ITI73TION SP NS SI and V. T@ @ONOR3#! 3PP !!3T *O"RT 3*T D *ONTR3RJ TO !3H 3ND ."RISPR"D N* 3ND 7R3V !J 3#"S D ITS DIS*R TION H@ N IT FF *TIV !J D PRIV D @ R IN P TITION R OF @IS RI7@T TO D" PRO* SS #J 3FFIRMIN7 T@ !OH R *O"RT9S D NI3! OF P TITION R9S MOTION FOR N H TRI3!. 0( 7.R. No. 'A%)%) 4Petitioner *ordero5 I. T@ *O"RT OF 3PP 3!S RR D IN NOT S"ST3ININ7 T@ ."D7M NT OF T@ TRI3! *O"RT 3H3RDIN7 P TITION R 3*T"3! D3M37 S FOR @IS *OMMISSION FOR T@ S3! OF T@ S *OND V SS !, SIN* T@ R IS S"FFI*I NT VID N* ON R *ORD H@I*@ PROV S T@3T T@ R H3S 3 S *OND S3! OF 3 V SS !. 3. T@ M MOR3ND"M OF 37R M NT D3T D ) 3"7"ST '(() PROVID S T@3T R SPOND NT 7O H3S *ONTR3*T"3!!J #O"ND TO #"J THO 405 V SS !S FROM 3FF3. #. R SPOND NT 7O9S POSITION P3P R 3ND *O"NT R63FFID3VITFPOSITION P3P R T@3T H R FI! D # FOR T@ #"R 3" OF *"STOMS, 3DMITS "ND R O3T@ T@3T @ @3D IND P"R*@3S D 3 S *OND V SS ! FROM 3FF3. *. R SPOND NTS 3DMITT D IN T@ IR PR 6TRI3! #RI F T@3T T@ J @3D P"R*@3S D 3 S *OND V SS !. II. T@ *O"RT OF 3PP 3!S RR D IN R"!IN7 T@3T P TITION R IS NOT NTIT! D TO @IS *OMMISSIONS FOR T@ P"R*@3S OF 3 S *OND V SS !, SIN* IT H3S P TITION R9S FFORTS H@I*@ 3*T"3!!J F3*I!IT3T D 3ND S T6"P T@ TR3NS3*TION FOR R SPOND NTS. III. T@ *O"RT OF 3PP 3!S RR D IN NOT IMPOSIN7 T@ PROP R ! 73! INT R ST R3T ON R SPOND NTS9 "NP3ID O#!I73TION H@I*@ S@O"!D # TH !V P R* NT 4'0E5 FROM T@ TIM OF T@ #R 3*@ OF T@ O#!I73TION. IV. T@ *O"RT OF 3PP 3!S RR D IN NOT S"ST3ININ7 T@ ORI7IN3! 3MO"NT OF *ONS K" NTI3! D3M37 S 3H3RD D TO P TITION R #J T@ TRI3! *O"RT *ONSID RIN7 T@ #3D F3IT@ 3ND FR3"D"! NT *OND"*T OF R SPOND NTS IN MIS3PPROPRI3TIN7 T@ MON J OF P TITION R.21

The controvers/ boils do$n to t$o 405 +ain issues: 4'5 $hether petitioner *ordero has the le-al personalit/ to sue the respondents for breach of contractI and 405 $hether the respondents +a/ be held liable for da+a-es to *ordero for his unpaid co++issions and ter+ination of his e?clusive distributorship appoint+ent b/ the principal, 3FF3. I. Real Part/6in6Interest First, on the issue of $hether the case had been filed b/ the real part/6in6interest as re>uired b/ Section 0, Rule 2 of the Rules of *ourt, $hich defines such part/ as the one 4'5 to be benefited or in=ured b/ the =ud-+ent in the suit, or the part/ entitled to the avails of the suit. The purposes of this provision are: '5 to prevent the prosecution of actions b/ persons $ithout an/ ri-ht, title or interest in the caseI 05 to re>uire that the actual part/ entitled to le-al relief be the one to prosecute the actionI 25 to avoid a +ultiplicit/ of suitsI and %5 to discoura-e liti-ation and ,eep it $ithin certain bounds, pursuant to sound public polic/. 2' 3 case is dis+issible for lac, of personalit/ to sue upon proof that the plaintiff is not the real part/6in6interest, hence -rounded on failure to state a cause of action.20 On this issue, $e a-ree $ith the *3 in rulin- that it $as *ordero and not Pa+ana $ho is the e?clusive distributor of 3FF3 in the Philippines as sho$n b/ the *ertification dated .une ', '(() issued b/ Ton/ Robinson.22 Petitioner 7o +entions the follo$in- docu+ents also si-ned b/ respondent Robinson $hich state that UPa+ana Mar,etin- *orporation represented b/ Mr. Morti+er F. *orderoU $as actuall/ the e?clusive distributor: 4'5 letter dated ' .une '(()2%I 405 certification dated & 3u-ust '(()2&I and 425 letter dated & 3u-ust '(() addressed to petitioner *ordero concernin- Uco++issions to be paid to Pa+ana Mar,etin*orporation.U2A Such apparent inconsistenc/ in na+in- 3FF39s e?clusive distributor in the Philippines is of no +o+ent. For all intents and purposes, Robinson and 3FF3 dealt onl/ $ith *ordero $ho alone +ade decisions in the perfor+ance of the e?clusive distributorship, as $ith other clients to $ho+ he had si+ilarl/ offered 3FF39s fast ferr/ vessels. Moreover, the stipulated co++issions fro+ each pro-ress pa/+ents +ade b/ 7o $ere directl/ paid b/ Robinson to *ordero.2)Respondents !andicho and Tecson $ere onl/ too a$are of *ordero9s authorit/ as the person $ho $as appointed and acted as e?clusive distributor of 3FF3, $hich can be -leaned fro+ their act of i++ediatel/ furnishin- hi+ $ith copies of ban, trans+ittals ever/ti+e 7o re+its pa/+ent to Robinson, $ho in turn transfers a portion of funds received to the ban, account of *ordero in the Philippines as his co++ission. Out of these partial pa/+ents of his co++ission, *ordero $ould still -ive !andicho and Tecson their respective Uco++ission,U or UcutsU fro+ his o$n co++ission. Respondents !andicho and Tecson failed to refute the evidence sub+itted b/ *ordero consistin- of receipts si-ned b/ the+. Said a+ounts $ere apart fro+ the earlier e?penses shouldered b/ *ordero for !andicho9s airline tic,ets, transportation, food and hotel acco++odations for the trip to 3ustralia. 28 Moreover, petitioner 7o, !andicho and Tecson never raised petitioner *ordero9s lac, of personalit/ to sue on behalf of Pa+ana,2( and did so onl/ before the *3 $hen the/ contended that it is Pa+ana and not *ordero, $ho $as appointed and acted as e?clusive distributor for 3FF3. %1 It $as Robinson $ho ar-ued in support of his +otion to dis+iss that as far as said defendant is concerned, the real part/ plaintiff appears to be Pa+ana, a-ainst the real part/ defendant $hich is 3FF3.%' 3s alread/ +entioned, the trial court denied the +otion to dis+iss filed b/ Robinson. He find no error co++itted b/ the trial court in overrulin- Robinson9s ob=ection over the i+proper resort to su++ons b/ publication upon a forei-n national li,e hi+ and in an action in persona+, not$ithstandin- that he raised it in a special appearance specificall/ raisin- the issue of lac, of =urisdiction over his person. *ourts ac>uire =urisdiction over the plaintiffs upon the filin- of the co+plaint, $hile =urisdiction over the defendants in a civil case is ac>uired either throu-h the service of su++ons upon the+ in the +anner re>uired b/ la$ or throu-h their voluntar/ appearance in court and their sub+ission to its authorit/. %0 3 part/ $ho +a,es a special appearance in court challen-in- the =urisdiction of said court based on the -round of invalid service of su++ons is not dee+ed to have sub+itted hi+self to the =urisdiction of the court. %2 In this case, ho$ever, althou-h the Motion to Dis+iss filed b/ Robinson specificall/ stated as one 4'5 of the -rounds the lac, of Upersonal =urisdiction,U it +ust be noted that he had earlier filed a Motion for Ti+e to file an appropriate responsive pleadin- even be/ond the ti+e provided in the su++ons b/ publication. %% Such +otion did not state that it $as a conditional appearance entered to >uestion the re-ularit/ of the service of su++ons, but an appearance sub+ittin- to the =urisdiction of the court b/ ac,no$led-in- the su++ons b/ publication issued b/ the court and pra/in- for additional ti+e to file a responsive pleadin-. *onse>uentl/, Robinson havinac,no$led-ed the su++ons b/ publication and also havin- invo,ed the =urisdiction of the trial court to secure

affir+ative relief in his +otion for additional ti+e, he effectivel/ sub+itted voluntaril/ to the trial court9s =urisdiction. @e is no$ estopped fro+ assertin- other$ise, even before this *ourt.%& II. #reach of ?clusive Distributorship, *ontractual Interference and Respondents9 !iabilit/ for Da+a-es In Ju v. *ourt of 3ppeals,%A this *ourt ruled that the ri-ht to perfor+ an e?clusive distributorship a-ree+ent and to reap the profits resultin- fro+ such perfor+ance are proprietar/ ri-hts $hich a part/ +a/ protect. Thus, in=unction is the appropriate re+ed/ to prevent a $ron-ful interference $ith contracts b/ stran-ers to such contracts $here the le-al re+ed/ is insufficient and the resultin- in=ur/ is irreparable. In that case, the for+er dealer of the sa+e -oods purchased the +erchandise fro+ the +anufacturer in n-land throu-h a tradin- fir+ in Hest 7er+an/ and sold these in the Philippines. He held that the ri-hts -ranted to the petitioner under the e?clusive distributorship a-ree+ent +a/ not be di+inished nor rendered illusor/ b/ the e?pedient act of utili;in- or interposin- a person or fir+ to obtain -oods for $hich the e?clusive distributorship $as conceptuali;ed, at the e?pense of the sole authori;ed distributor. %) In the case at bar, it $as established that petitioner *ordero $as not paid the balance of his co++ission b/ respondent Robinson. Fro+ the ti+e petitioner 7o and respondent !andicho directl/ dealt $ith respondent Robinson in #risbane, and ceased co++unicatin- throu-h petitioner *ordero as the e?clusive distributor of 3FF3 in the Philippines, *ordero $as no lon-er infor+ed of pa/+ents re+itted to 3FF3 in #risbane. In other $ords, *ordero had clearl/ been cut off fro+ the transaction until the arrival of the first S 3*3T 0& $hich $as sold throu-h his efforts. Hhen *ordero co+plained to 7o, Robinson, !andicho and Tecson about their acts pre=udicial to his ri-hts and de+anded that the/ respect his e?clusive distributorship, 7o si+pl/ let his la$/ers led b/ !andicho and Tecson handle the +atter and tried to settle it b/ pro+isin- to pa/ a certain a+ount and to purchase hi-h6speed cata+arans throu-h *ordero. @o$ever, *ordero $as not paid an/thin- and $orse, 3FF3 throu-h its la$/er in 3ustralia even ter+inated his e?clusive dealership insistin- that his services $ere en-a-ed for onl/ one 4'5 transaction, that is, the purchase of the first S 3*3T 0& in 3u-ust '((). Petitioner 7o ar-ues that unli,e in Ju v. *ourt of 3ppeals%8 there is no conclusive proof adduced b/ petitioner *ordero that the/ actuall/ purchased a second S 3*3T 0& directl/ fro+ 3FF3 and hence there $as no violation of the e?clusive distributorship a-ree+ent. Further, he contends that the *3 -ravel/ abused its discretion in holdin- the+ solidaril/ liable to *ordero, rel/in- on 3rticles '01), '( and 0' of the *ivil *ode despite absence of evidence, docu+entar/ or testi+onial, sho$in- that the/ conspired to defeat the ver/ purpose of the e?clusive distributorship a-ree+ent.%( He find that contrar/ to the clai+s of petitioner *ordero, there $as indeed no sufficient evidence that respondents actuall/ purchased a second S 3*3T 0& directl/ fro+ 3FF3. #ut this circu+stance $ill not absolve respondents fro+ liabilit/ for invadin- *ordero9s ri-hts under the e?clusive distributorship. Respondents clearl/ acted in bad faith in b/passin- *ordero as the/ co+pleted the re+ainin- pa/+ents to 3FF3 $ithout advisin- hi+ and furnishin- hi+ $ith copies of the ban, trans+ittals as the/ previousl/ did, and directl/ dealt $ith 3FF3 throu-h Robinson re-ardin- arran-e+ents for the arrival of the first S 3*3T 0& in Manila and ne-otiations for the purchase of the second vessel pursuant to the Me+orandu+ of 3-ree+ent $hich *ordero si-ned in behalf of 3FF3. 3s a result of respondents9 actuations, *ordero incurred losses as he $as not paid the balance of his co++ission fro+ the sale of the first vessel and his e?clusive distributorship revo,ed b/ 3FF3. Petitioner 7o contends that the trial and appellate courts erred in holdin- the+ solidaril/ liable for *ordero9s unpaid co++ission, $hich is the sole obli-ation of the principal 3FF3. It $as Robinson on behalf of 3FF3 $ho, in the letter dated 3u-ust &, '(() addressed to *ordero, undertoo, to pa/ co++ission pa/+ents to Pa+ana on a sta--ered pro-ress pa/+ent plan in the for+ of percenta-e of the co++ission per pa/+ent. 3FF3 e?plicitl/ co++itted that it $ill, Uupon receipt of pro-ress pa/+ents, pa/ to Pa+ana their full co++ission b/ tele-raphic transfer to an account no+inated b/ Pa+ana $ithin one to t$o da/s of B3FF3C receivin- such pa/+ents.U&1Petitioner 7o further +aintains that he had not in an/ $a/ violated or caused the ter+ination of the e?clusive distributorship a-ree+ent bet$een *ordero and 3FF3I he had also paid in full the first and onl/ vessel he purchased fro+ 3FF3.&' Hhile it is true that a third person cannot possibl/ be sued for breach of contract because onl/ parties can breach contractual provisions, a contractin- part/ +a/ sue a third person not for breach but for inducin- another to co++it such breach.

3rticle '2'% of the *ivil *ode provides: 3rt. '2'%. 3n/ third person $ho induces another to violate his contract shall be liable for da+a-es to the other contractin- part/. The ele+ents of tort interference are: 4'5 e?istence of a valid contractI 405 ,no$led-e on the part of the third person of the e?istence of a contractI and 425 interference of the third person is $ithout le-al =ustification. &0 The presence of the first and second ele+ents is not disputed. Throu-h the letters issued b/ Robinson attestinthat *ordero is the e?clusive distributor of 3FF3 in the Philippines, respondents $ere clearl/ a$are of the contract bet$een *ordero and 3FF3 represented b/ Robinson. In fact, evidence on record sho$ed that respondents initiall/ dealt $ith and reco-ni;ed *ordero as such e?clusive dealer of 3FF3 hi-h6speed cata+aran vessels in the Philippines. In that capacit/ as e?clusive distributor, petitioner 7o entered into the Me+orandu+ of 3-ree+ent and Shipbuildin- *ontract No. )80& $ith *ordero in behalf of 3FF3. 3s to the third ele+ent, our rulin- in the case of So Pin- #un v. *ourt of 3ppeals &2 is instructive, to $it: 3 dut/ $hich the la$ of torts is concerned $ith is respect for the propert/ of others, and a cause of action e? delicto +a/ be predicated upon an unla$ful interference b/ one person of the en=o/+ent b/ the other of his private propert/. This +a/ pertain to a situation $here a third person induces a part/ to rene-e on or violate his underta,in- under a contract. In the case before us, petitioner9s Trendsetter Mar,etin- as,ed D**SI to e?ecute lease contracts in its favor, and as a result petitioner deprived respondent corporation of the latter9s propert/ ri-ht. *learl/, and as correctl/ vie$ed b/ the appellate court, the three ele+ents of tort interference above6 +entioned are present in the instant case. 3uthorities debate on $hether interference +a/ be =ustified $here the defendant acts for the sole purpose of furtherin- his o$n financial or econo+ic interest. One vie$ is that, as a -eneral rule, =ustification for interferin$ith the business relations of another e?ists $here the actor9s +otive is to benefit hi+self. Such =ustification does not e?ist $here his sole +otive is to cause har+ to the other. 3dded to this, so+e authorities believe that it is not necessar/ that the interferer9s interest out$ei-h that of the part/ $hose ri-hts are invaded, and that an individual acts under an econo+ic interest that is substantial, not +erel/ de +ini+is, such that $ron-ful and +alicious +otives are ne-atived, for he acts in self6protection. Moreover, =ustification for protectin- one9s financial position should not be +ade to depend on a co+parison of his econo+ic interest in the sub=ect +atter $ith that of others. It is sufficient if the i+petus of his conduct lies in a proper business interest rather than in $ron-ful +otives. 3s earl/ as 7ilchrist vs. *udd/, $e held that $here there $as no +alice in the interference of a contract, and the i+pulse behind one9s conduct lies in a proper business interest rather than in $ron-ful +otives, a part/ cannot be a +alicious interferer. Hhere the alle-ed interferer is financiall/ interested, and such interest +otivates his conduct, it cannot be said that he is an officious or +alicious inter+eddler. In the instant case, it is clear that petitioner So Pin- #un prevailed upon D**SI to lease the $arehouse to his enterprise at the e?pense of respondent corporation. Thou-h petitioner too, interest in the propert/ of respondent corporation and benefited fro+ it, nothin- on record i+putes deliberate $ron-ful +otives or +alice in hi+. ??? Hhile $e do not encoura-e tort interferers see,in- their econo+ic interest to intrude into e?istin- contracts at the e?pense of others, ho$ever, $e find that the conduct herein co+plained of did not transcend the li+its forbiddin- an obli-ator/ a$ard for da+a-es in the absence of an/ +alice. The business desire is there to +a,e so+e -ain to the detri+ent of the contractin- parties. !ac, of +alice, ho$ever, precludes da+a-es. #ut it does not relieve petitioner of the le-al liabilit/ for enterin- into contracts and causin- breach of e?istin- ones. The respondent appellate court correctl/ confir+ed the per+anent in=unction and nullification of the lease contracts bet$een D**SI and Trendsetter Mar,etin-, $ithout a$ardin- da+a-es. The in=unction saved the respondents fro+ further da+a-e or in=ur/ caused b/ petitioner9s interference. &% Be+phasis supplied.C

Malice connotes ill $ill or spite, and spea,s not in response to dut/. It i+plies an intention to do ulterior and un=ustifiable har+. Malice is bad faith or bad +otive.&& In the case of !a-on v. *ourt of 3ppeals,&A $e held that to sustain a case for tortuous interference, the defendant +ust have acted $ith +alice or +ust have been driven b/ purel/ i+pure reasons to in=ure the plaintiffI in other $ords, his act of interference cannot be =ustified. He further e?plained that the $ord UinduceU refers to situations $here a person causes another to choose one course of conduct b/ persuasion or inti+idation. 3s to the alle-ation of private respondent in said case that petitioner induced the heirs of the late #ai Tonina Sepi to sell the propert/ to petitioner despite an alle-ed rene$al of the ori-inal lease contract $ith the deceased lando$ner, $e ruled as follo$s: 3ssu+in- e? -ratia ar-u+enti that petitioner ,ne$ of the contract, such ,no$led-e alone $as not sufficient to +a,e hi+ liable for tortuous interference. ? ? ? Further+ore, the records do not support the alle-ation of private respondent that petitioner induced the heirs of #ai Tonina Sepi to sell the propert/ to hi+. The $ord UinduceU refers to situations $here a person causes another to choose one course of conduct b/ persuasion or inti+idation. The records sho$ that the decision of the heirs of the late #ai Tonina Sepi to sell the propert/ $as co+pletel/ of their o$n volition and that petitioner did absolutel/ nothin- to influence their =ud-+ent. Private respondent hi+self did not proffer an/ evidence to support his clai+. In short, even assu+in- that private respondent $as able to prove the rene$al of his lease contract $ith #ai Tonina Sepi, the fact $as that he $as unable to prove +alice or bad faith on the part of petitioner in purchasin- the propert/. Therefore, the clai+ of tortuous interference $as never established. &) In their 3ns$er, respondents denied havin- an/thin- to do $ith the unpaid balance of the co++ission due to *ordero and the eventual ter+ination of his e?clusive distributorship b/ 3FF3. The/ -ave a different version of the events that transpired follo$in- the si-nin- of Shipbuildin- *ontract No. )80&. 3ccordin- to the+, several builder6co+petitors still entered the picture after the said contract for the purchase of one 4'5 S 3*3T 0& $as sent to #risbane in .ul/ '(() for authentication, addin- that the contract $as to be effective on 3u-ust ), '((), the ti+e $hen their funds $as to beco+e available. 7o ad+itted he called the attention of 3FF3 if it can co+pete $ith the prices of other builders, and upon +utual a-ree+ent, 3FF3 a-reed to -ive the+ a discounted price under the follo$in- ter+s and conditions: 4'5 that the contract price be lo$eredI 405 that 7o $ill obtain another vesselI 425 that to secure co+pliance of such conditions, 7o +ust +a,e an advance pa/+ent for the buildin- of the second vesselI and 4%5 that the pa/+ent sche+e for+erl/ a-reed upon as stipulated in the first contract shall still be the basis and used as the -uidin- factor in re+ittin- +one/ for the buildin- of the first vessel. This led to the si-nin- of another contract supersedin- the first one 4'5, still to be dated 1) 3u-ust '((). 3ttached to the ans$er $ere photocopies of the second contract statin- a lo$er purchase price 4"SR','&1,111.115 and facsi+ile trans+ission of 3FF3 to 7o confir+in- the transaction.&8 3s to the cessation of co++unication $ith *ordero, 7o averred it $as *ordero $ho $as no$here to be contacted at the ti+e the shipbuildin- pro-ress did not turn -ood as pro+ised, and it $as al$a/s !andicho and Tecson $ho, after several atte+pts, $ere able to locate hi+ onl/ to obtain unsatisfactor/ reports such that it $as 7o $ho $ould still call up Robinson re-ardin- an/ pro-ress status report, lac,in- docu+ents for M3RIN3, etc., and -o to 3ustralia for ocular inspection. @ence, in Ma/ '((8 on the scheduled launchin- of the ship in 3ustralia, 7o en-a-ed the services of !andicho $ho $ent to 3ustralia to see to it that all docu+ents needed for the ship+ent of the vessel to the Philippines $ould be in order. It $as also durin- this ti+e that Robinson9s re>uest for in>uir/ on the Philippine price of a Hartsila en-ine for 3FF39s then on6-oin- vessel construction, $as +isinterpreted b/ *ordero as indicatin- that 7o $as bu/in- a second vessel. &( He find these alle-ations unconvincin- and a +ere afterthou-ht as these $ere the ver/ sa+e aver+ents contained in the Position Paper for the I+porter dated October (, '((8, $hich $as sub+itted b/ 7o on behalf of 3*7 ?press !iner in connection $ith the co+plaint6affidavit filed b/ *ordero before the #O*6S7S 3ppeals *o++ittee relative to the ship+ent valuation of the first S 3*3T 0& purchased fro+ 3FF3. A1 It appears that the purported second contract supersedin- the ori-inal Shipbuildin- *ontract No. )80& and statin- a lo$er price of "SR','&1,111.11 4not "SR',%A&,&'0.115 $as onl/ presented before the #O* to sho$ that the vessel i+ported into the Philippines $as not undervalued b/ al+ost "SR&11,111.11. *ordero vehe+entl/ denied there $as such +odification of the contract and accused respondents of resortin- to falsified docu+ents, includin- the facsi+ile trans+ission of 3FF3 supposedl/ confir+in- the said sale for onl/ "SR','&1,111.11. Incidentall/, another docu+ent filed in said #O* case, the *ounter63ffidavitFPosition Paper for the I+porter dated Nove+ber 'A, '((8,A' states in para-raph 8 under the 3ntecedent facts thereof, that 66

8. 3s else$here stated, the total re+ittances +ade b/ herein I+porter to 3FF3 does not alone represent the purchase price for Seacat 0&. It includes advance pa/+ent for the ac>uisition of another vessel as part of the deal due to the discounted price.A0 $hich even -ives credence to the clai+ of *ordero that respondents ne-otiated for the sale of the second vessel and that the nonpa/+ent of the re+ainin- t$o 405 instal+ents of his co++ission for the sale of the first S 3*3T 0& $as a result of 7o and !andicho9s directl/ dealin- $ith Robinson, obviousl/ to obtain a lo$er price for the second vessel at the e?pense of *ordero. The act of 7o, !andicho and Tecson in inducin- Robinson and 3FF3 to enter into another contract directl/ $ith 3*7 ?press !iner to obtain a lo$er price for the second vessel resulted in 3FF39s breach of its contractual obli-ation to pa/ in full the co++ission due to *ordero and uncere+onious ter+ination of *ordero9s appoint+ent as e?clusive distributor. Follo$in- our pronounce+ent in 7ilchrist v. *udd/ 4supra5, such act +a/ not be dee+ed +alicious if i+pelled b/ a proper business interest rather than in $ron-ful +otives. The attendant circu+stances, ho$ever, de+onstrated that respondents trans-ressed the bounds of per+issible financial interest to benefit the+selves at the e?pense of *ordero. Respondents furtivel/ $ent directl/ to Robinson after *ordero had $or,ed hard to close the deal for the+ to purchase fro+ 3FF3 t$o 405 S 3*3T 0&, closel/ +onitored the pro-ress of buildin- the first vessel sold, attended to their concerns and spent no +easl/ su+ for the trip to 3ustralia $ith 7o, !andicho and 7o9s fa+il/ +e+bers. #ut $hat is appallin- is the fact that even as 7o, !andicho and Tecson secretl/ ne-otiated $ith Robinson for the purchase of a second vessel, !andicho and Tecson continued to de+and and receive fro+ *ordero their Uco++issionU or UcutU fro+ *ordero9s earned co++ission fro+ the sale of the first S 3*3T 0&. *ordero $as practicall/ e?cluded fro+ the transaction $hen 7o, Robinson, Tecson and !andicho suddenl/ ceased co++unicatin- $ith hi+, $ithout -ivin- hi+ an/ e?planation. Hhile there $as nothin- ob=ectionable in ne-otiatin- for a lo$er price in the second purchase of S 3*3T 0&, $hich is not prohibited b/ the Me+orandu+ of 3-ree+ent, 7o, Robinson, Tecson and !andicho clearl/ connived not onl/ in ensurin- that *ordero $ould have no participation in the contract for sale of the second S 3*3T 0&, but also that *ordero $ould not be paid the balance of his co++ission fro+ the sale of the first S 3*3T 0&. This, despite their ,no$led-e that it $as co++ission alread/ earned b/ and due to *ordero. Thus, the trial and appellate courts correctl/ ruled that the actuations of 7o, Robinson, Tecson and !andicho $ere $ithout le-al =ustification and intended solel/ to pre=udice *ordero. The e?istence of +alice, ill $ill or bad faith is a factual +atter. 3s a rule, findin-s of fact of the trial court, $hen affir+ed b/ the appellate court, are conclusive on this *ourt.A2 He see no co+pellin- reason to reverse the findin-s of the RT* and the *3 that respondents acted in bad faith and in utter disre-ard of the ri-hts of *ordero under the e?clusive distributorship a-ree+ent. The failure of Robinson, 7o, Tecson and !andico to act $ith fairness, honest/ and -ood faith in securin- better ter+s for the purchase of hi-h6speed cata+arans fro+ 3FF3, to the pre=udice of *ordero as the dul/ appointed e?clusive distributor, is further proscribed b/ 3rticle '( of the *ivil *ode: 3rt. '(. ver/ person +ust, in the e?ercise of his ri-hts and in the perfor+ance of his duties, act $ith =ustice, -ive ever/one his due, and observe honest/ and -ood faith. 3s $e have e?pounded in another case: lse$here, $e e?plained that $hen Ua ri-ht is e?ercised in a +anner $hich does not confor+ $ith the nor+s enshrined in 3rticle '( and results in da+a-e to another, a le-al $ron- is thereb/ co++itted for $hich the $ron-doer +ust be responsible.U The ob=ect of this article, therefore, is to set certain standards $hich +ust be observed not onl/ in the e?ercise of one9s ri-hts but also in the perfor+ance of one9s duties. These standards are the follo$in-: act $ith =ustice, -ive ever/one his due and observe honest/ and -ood faith. Its antithesis, necessaril/, is an/ act evincin- bad faith or intent to in=ure. Its ele+ents are the follo$in-: 4'5 There is a le-al ri-ht or dut/I 405 $hich is e?ercised in bad faithI 425 for the sole intent of pre=udicin- or in=urin- another. Hhen 3rticle '( is violated, an action for da+a-es is proper under 3rticles 01 or 0' of the *ivil *ode. 3rticle 01 pertains to da+a-es arisin- fro+ a violation of la$ ? ? ?. 3rticle 0', on the other hand, states:

3rt. 0'. 3n/ person $ho $illfull/ causes loss or in=ur/ to another in a +anner that is contrar/ to +orals, -ood custo+s or public polic/ shall co+pensate the latter for the da+a-e. 3rticle 0' refers to acts contra )onus mores and has the follo$in- ele+ents: 4'5 There is an act $hich is le-alI 405 but $hich is contrar/ to +orals, -ood custo+, public order, or public polic/I and 425 it is done $ith intent to in=ure. 3 co++on the+e runs throu-h 3rticles '( and 0', and that is, the act co+plained of +ust be intentional.A% Petitioner 7o9s ar-u+ent that he, !andicho and Tecson cannot be held liable solidaril/ $ith Robinson for actual, +oral and e?e+plar/ da+a-es, as $ell as attorne/9s fees a$arded to *ordero since no la$ or contract provided for solidar/ obli-ation in these cases, is e>uall/ bereft of +erit. *onfor+abl/ $ith 3rticle 0'(% of the *ivil *ode, the responsibilit/ of t$o or +ore persons $ho are liable for the >uasi6delict is solidar/. A& In !afar-e *e+ent Philippines, Inc. v. *ontinental *e+ent *orporation, AA $e held: BOCbli-ations arisin- fro+ tort are, b/ their nature, al$a/s solidar/. He have assiduousl/ +aintained this le-al principle as earl/ as '('0 in Horcester v. Oca+po, in $hich $e held: ? ? ? The difficult/ in the contention of the appellants is that the/ fail to reco-ni;e that the basis of the present action is tort. The/ fail to reco-ni;e the universal doctrine that each =oint tort feasor is not onl/ individuall/ liable for the tort in $hich he participates, but is also =ointl/ liable $ith his tort feasors. ? ? ? It +a/ be stated as a -eneral rule that =oint tort feasors are all the persons $ho co++and, insti-ate, pro+ote, encoura-e, advise, countenance, cooperate in, aid or abet the co++ission of a tort, or $ho approve of it after it is done, if done for their benefit. The/ are each liable as principals, to the sa+e e?tent and in the sa+e +anner as if the/ had perfor+ed the $ron-ful act the+selves. ? ? ? .oint tort feasors are =ointl/ and severall/ liable for the tort $hich the/ co++it.1avvphi1 The persons in=ured +a/ sue all of the+ or an/ nu+ber less than all. ach is liable for the $hole da+a-es caused b/ all, and all to-ether are =ointl/ liable for the $hole da+a-e. It is no defense for one sued alone, that the others $ho participated in the $ron-ful act are not =oined $ith hi+ as defendantsI nor is it an/ e?cuse for hi+ that his participation in the tort $as insi-nificant as co+pared to that of the others. ? ? ? .oint tort feasors are not liable pro rata. The da+a-es can not be apportioned a+on- the+, e?cept a+onthe+selves. The/ cannot insist upon an apportion+ent, for the purpose of each pa/in- an ali>uot part. The/ are =ointl/ and severall/ liable for the $hole a+ount. ? ? ? 3 pa/+ent in full for the da+a-e done, b/ one of the =oint tort feasors, of course satisfies an/ clai+ $hich +i-ht e?ist a-ainst the others. There can be but satisfaction. The release of one of the =oint tort feasors b/ a-ree+ent -enerall/ operates to dischar-e all. ? ? ? Of course, the court durin- trial +a/ find that so+e of the alle-ed tort feasors are liable and that others are not liable. The courts +a/ release so+e for lac, of evidence $hile conde+nin- others of the alle-ed tort feasors. 3nd this is true even thou-h the/ are char-ed =ointl/ and severall/. A) Be+phasis supplied.C The rule is that the defendant found -uilt/ of interference $ith contractual relations cannot be held liable for +ore than the a+ount for $hich the part/ $ho $as inducted to brea, the contract can be held liable.A8 Respondents 7o, !andicho and Tecson $ere therefore correctl/ held liable for the balance of petitioner *ordero9s co++ission fro+ the sale of the first S 3*3T 0&, in the a+ount of "SR2',&00.1( or its peso e>uivalent, $hich 3FF3FRobinson did not pa/ in violation of the e?clusive distributorship a-ree+ent, $ith interest at the rate of AE per annu+ fro+ .une 0%, '((8 until the sa+e is full/ paid. Respondents havin- acted in bad faith, +oral da+a-es +a/ be recovered under 3rticle 00'( of the *ivil *ode.A(On the other hand, the re>uire+ents of an a$ard of e?e+plar/ da+a-es are: 4'5 the/ +a/ be i+posed b/ $a/ of e?a+ple in addition to co+pensator/ da+a-es, and onl/ after the clai+ant9s ri-ht to the+ has been establishedI 405 that the/ cannot be recovered as a +atter of ri-ht, their deter+ination dependin- upon the a+ount of co+pensator/ da+a-es that +a/ be a$arded to the clai+antI and 425 the act +ust be acco+panied b/

bad faith or done in a $anton, fraudulent, oppressive or +alevolent +anner.)1 The a$ard of e?e+plar/ da+a-es is thus in order. @o$ever, $e find the su+s a$arded b/ the trial court as +oral and e?e+plar/ da+a-es as reduced b/ the *3, still e?cessive under the circu+stances. Moral da+a-es are +eant to co+pensate and alleviate the ph/sical sufferin-, +ental an-uish, fri-ht, serious an?iet/, bes+irched reputation, $ounded feelin-s, +oral shoc,, social hu+iliation, and si+ilar in=uries un=ustl/ caused. 3lthou-h incapable of pecuniar/ esti+ation, the a+ount +ust so+eho$ be proportional to and in appro?i+ation of the sufferin- inflicted. Moral da+a-es are not punitive in nature and $ere never intended to enrich the clai+ant at the e?pense of the defendant. There is no hard6and6fast rule in deter+inin- $hat $ould be a fair and reasonable a+ount of +oral da+a-es, since each case +ust be -overned b/ its o$n peculiar facts. Trial courts are -iven discretion in deter+inin- the a+ount, $ith the li+itation that it Ushould not be palpabl/ and scandalousl/ e?cessive.U Indeed, it +ust be co++ensurate to the loss or in=ur/ suffered. )' He believe that the a+ounts of P211,111.11 and P011,111.11 as +oral and e?e+plar/ da+a-es, respectivel/, $ould be sufficient and reasonable. #ecause e?e+plar/ da+a-es are a$arded, attorne/9s fees +a/ also be a$arded in consonance $ith 3rticle 0018 4'5.)0 He affir+ the appellate court9s a$ard of attorne/9s fees in the a+ount of P&1,111.11. H@ R FOR , the petitions are D NI D. The Decision dated March 'A, 011% as +odified b/ the Resolution dated .ul/ 00, 011% of the *ourt of 3ppeals in *367.R. *V No. A(''2 are hereb/ 3FFIRM D $ith MODIFI*3TION in that the a$ards of +oral and e?e+plar/ da+a-es are hereb/ reduced to P211,111.11 and P011,111.11, respectivel/. Hith costs a-ainst the petitioner in 7.R. No. 'A%)12. SO ORD R D. MART#N S. V#LLARAMA, )R. 3ssociate .ustice H *ON*"R: RE7NATO S. PUNO *hief .ustice *hairperson CONC"#TA CARP#O MORALES 3ssociate .ustice TERES#TA ). LEONARDO+DE CASTRO 3ssociate .ustice

LUCAS P. BERSAM#N 3ssociate .ustice * RTIFI*3TION

Pursuant to Section '2, 3rticle VIII of the '(8) *onstitution, I certif/ that the conclusions in the above Decision had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt9s Division. RE7NATO S. PUNO *hief .ustice

!oot&ot,s

'

Penned b/ 3ssociate .ustice .ose *atral Mendo;a 4no$ a Me+ber of this *ourt5 and concurred in b/ 3ssociate .ustices #.3. 3defuin6Dela *ru; and lie;er R. Delos Santos.
0

Penned b/ 3ssociate .ustice .ose *atral Mendo;a 4no$ a Me+ber of this *ourt5 and concurred in b/ 3ssociate .ustices Delilah Vidallon6Ma-tolis and lie;er R. Delos Santos.
2

Penned b/ .ud-e Pedro M. 3reola. Folder of plaintiff9s e?hibits, pp. '62%. Id., pp. 2&62(. Id., pp. %26&'. Id., pp. %16%0. Id., pp. &06&2. Id., pp. &%6&A. Id., pp. &A6&). TSN, 3pril &, 0111, pp. 0)62&I folder of plaintiff9s e?hibits, p. &8. Records, Vol. I, pp. '6'A. Id., pp. '&&6'&), 'A)6')', '8A6'8(, 0%(60&'. Id., pp. )16)), ')8. Id., pp. 0'260'%. Id., pp. 0(860((. TSN, 3pril '%, 0111, pp. 06%%. Records, Vol. I, pp. %%&6%%A. Id., pp. %A16%A&. Id., pp. %))6%81. Id., pp. %8'6%8&. Id., p. %8A. Id., pp. &116&10. Id., p. &12. Id., pp. &'06&'%. Records, Vol. II, pp. &&16A01.

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Id., pp. A0'6A00. *ordero v. 7o, 7.R. No. '%()&%, 28( S*R3 088. Rollo 47.R. No. 'A%)125, pp. 0260%. Rollo 47.R. No. 'A%)%)5, pp. 0'600. Oco v. !i+barin-, 7.R. No. 'A'0(8, .anuar/ 2', 011A, %8' S*R3 2%8, 2&8. Ta+ondon- v. *ourt of 3ppeals, 7.R. No. '&82(), Nove+ber 0A, 011%, %%% S*R3 &1(. Folder of e?hibits, ?hibit U36AU, p. ). Id., ?hibit U36(U, p. '1 Id., ?hibit U3U, p. '. Id., ?hibit U362U, p. %. Id., ?hibits U.U to U.60U, UNU to UN6%U, UMU, UJ9 to UJ6%U, pp. &(6AA, A(6)', 2'%62'8.

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21

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20

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Id., ?hibits UR6AU, UPU, UR6)U, UVU, UHU , USU to US6)U, UJU to UJ6%U and U<U to U<60U, pp. 020, 02A6028, 02(, 21'620'.
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Records, Vol. I, pp. )16)2, 01260'2, 0A&60A), %A16%A%. *3 rollo, pp. )868%. Records, Vol. I, pp. 0%'60%0.

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Per,in l+er Sin-apore Pte !td. v. Da,ila Tradin- *orporation, 7.R. No. ')00%0, 3u-ust '%, 011), &21 S*R3 ')1, '8A.
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"nited *oconut Planters #an, v. On-pin, 7.R. No. '%A&(2, October 0A, 011', 2A8 S*R3 %A%, %)1. Records, Vol. I, pp. 'A86')1.

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See Dole Philippines, Inc.4Tropifresh Division5 v. Kuilala, 7.R. No. 'A8)02, .ul/ (, 0118, &&) S*R3 %22, %2)6%28.
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7.R. No. 8AA82, .anuar/ 0', '((2, 0') S*R3 208. Id., pp. 22', 220. Supra. Rollo 47.R. No. 'A%)125, pp. 2262%. Id., pp 2A62)I ?hibit U362U, folder of e?hibits, p. %. Rollo 47.R. No. 'A%)125, p. 2(.

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%(

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So Pin- #un v. *ourt of 3ppeals, 7.R. No. '01&&%, Septe+ber 0', '(((, 2'% S*R3 )&', )&8, citin21 3+ .ur, Section '(, pp. )'6)0 and Sa+pa-uita Pictures, Inc. v. Vas>ue;, et al. 4*ourt of 3ppeals, A8 O.7. )AAA5.
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Supra. Id., pp. )&86)A1. #or=al v. *ourt of 3ppeals, 7.R. No. '0A%AA, .anuar/ '%, '(((, 21' S*R3 ', 08. 7.R. No. ''('1), March '8, 011&, %&2 S*R3 A'A, A0A. Id., p. A0A. Records, Vol. I, pp. 01%601A. Id., pp. 01A601). Folder of e?hibits, ?hibit U##U, pp. 20%62%0. Id., ?hibit U**U, pp. 2%262A'. Id., p. 2%&. Ra+as v. Kuia+co, 7.R. No. '%A200, Dece+ber A, 011A, &'1 S*R3 ')0, ')8.

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Ni,,o @otel Manila 7arden v. Re/es, 7.R. No. '&%0&(, Februar/ 08, 011&, %&0 S*R3 &20, &%A6 &%), citin- 3lbenson nterprises *orp. v. *ourt of 3ppeals, 7.R. No. 88A(%, .anuar/ '', '((2, 0') S*R3 'A, 0&.
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N-o Sin Sin- v. !i Sen- 7iap Q Sons, Inc., 7.R. No. ')1&(A, Nove+ber 08, 0118, &)0 S*R3 A0&, A28, citin- *han, .r. v. I-lesia ni *risto, Inc., 7.R. No. 'A1082, October '%, 011&, %)2 S*R3 ')), '8A.
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7.R. No. '&&')2, Nove+ber 02, 011%, %%2 S*R3 &00. 3s cited in N-o Sin Sin- v. !i Sen- 7iap Q Sons, Inc., supra. Da/$alt v. *orporacion de PP. 3-ustinos Recoletos, 2( Phil. &8) 4'('(5.

A)

A8

A(

Ma-at v. *ourt of 3ppeals, 7.R. No. '0%00', 3u-ust %, 0111, 22) S*R3 0(8I Far ast #an, Q Trust *o+pan/ v. *ourt of 3ppeals, 2'' Phil. )82 4'((&5I and ?pertravel Q Tours, Inc. v. *ourt of 3ppeals, 7.R. No. '21121, .une 0&, '(((, 21( S*R3 '%', '%&6'%A.
)1

National Steel *orporation v. Re-ional Trial *ourt of !anao del Norte, #r. 0, Ili-an *it/, 7.R. No. '0)11%, March '', '((( 21% S*R3 A1(.
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Sa+son, .r. v. #an, of the Philippine Islands, 7.R. No. '&1%8), .ul/ '1, 0112, %1& S*R3 A1), A''6 A'0, citin- ?pertravel Q Tours, Inc. v. *ourt of 3ppeals, 2A8 Phil. %%% 4'(((5I De la Serna v. *ourt of 3ppeals, 7.R. No. '1('A', .une 0', '((%, 022 S*R3 20&I Visa/an Sa$+ill *o+pan/, Inc. v. *ourt of 3ppeals, 7.R. No. 828&', March 2, '((2, 0'( S*R3 2)8I Flores v. "/, 7.R. Nos. '0'%(0 Q '0%20&, October 0A, 011', 2A8 S*R3 2%)I Pa-su/uin v. Inter+ediate 3ppellate *ourt, 7.R. No. )0'0', Februar/ A, '((', '(2 S*R3 &%)I North$est 3irlines v. !a/a, 7.R. No. '%&(&A, Ma/ 0(, 0110, 280 S*R3 )21I *avite Develop+ent #an, v. Sps. !i+, 28' Phil. 2&& 401115I *oca6*ola #ottlers, Phils., Inc. v. Ro>ue, 2A) Phil. %(2 4'(((5I Morales v. *ourt of 3ppeals, 7.R. No. '')008, .une '(, '((), 0)% S*R3 080I Prudential #an, v. *ourt of 3ppeals, 28% Phil. (%0 4'(((5I Sin-son v. *ourt of 3ppeals, 2%A Phil. 82' 4'(()5I Del Rosario v. *ourt of 3ppeals, 22% Phil. 8'0 4'(()5I

Philippine National #an, v. *ourt of 3ppeals, 20A Phil. 20A 4'((A5I Ma/o v. People, 7.R. No. ('01', Dece+ber &, '((', 01% S*R3 A%0I Policarpio v. *ourt of 3ppeals, 7.R. No. (%&A2, March &, '((', '(% S*R3 )0(I Radio *o++unications of the Phils., Inc. v. Rodri-ue;, 7.R. No. 82)A8, Februar/ 08, '((1, '80 S*R3 8((I and Prudenciado v. 3lliance Transport S/ste+, Inc., No. !62282A, March 'A, '(8), '%8 S*R3 %%1.
)0

#.F. Metal 4*orporation5 v. !o+otan, 7.R. No. ')18'2, 3pril 'A, 0118, &&' S*R3 A'8.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 1.--96 M%/51 19, 2012

GOODLAND COMPAN7, #NC., Petitioner, vs. AS#A UN#TED BAN , C"R#ST#NE T. C"AN, !LORANTE DEL MUNDO, ENGRAC#O M. ESCAS#NAS, )R., 2& 12s o==252%: 5%0%52t4 %s C:,/> o= Cou/t ? E<+O==252o S1,/2== 2& t1, R,g2o&%: T/2%: Cou/t o= M%>%t2 C2t4, NORBERTO B. MAGSA)O, 2& 12s o==252%: 5%0%52t4 %s S1,/2== #V o= t1, R,g2o&%: T/2%: Cou/t o= M%>%t2 C2t4, %&' RONALD A. ORT#LE, 2& 12s o==252%: 5%0%52t4 %s t1, R,g2st,/ o= D,,'s =o/ M%>%t2 C2t4, Respondents. ?66666666666666666666666? G.R. No. 1.--61 GOODLAND COMPAN7, #NC., Petitioner, vs. AS#A UN#TED BAN , ABRA"AM CO, ATT7. )OEL T. PEL#CANO AND T"E REG#STER O! DEEDS O! MA AT# C#T7, Respondents. D V#LLARAMA, )R., J.: These consolidated petitions for revie$ on certiorari filed under Rule %& b/ one and the sa+e part/ 47oodland *o+pan/, Inc.5 both assail the Decision' dated Septe+ber '&, 01'1 and Resolution0 dated .anuar/ 2', 01'' of the *ourt of 3ppeals 4*35 in *367.R. *V No. (1%'8. Factual 3ntecedents So+eti+e in .ul/ '(((, petitioner 7oodland *o+pan/, Inc. 4petitioner5 +ort-a-ed its t$o parcels of land situated in Sta. Rosa, !a-una and covered b/ Transfer *ertificate of Title 4T*T5 Nos. 20'A)0 and 20'A)2 4U!a-una PropertiesU5. The Third Part/ Real state Mort-a-e 4R M5 secured the loans e?tended b/ respondent 3sia "nited #an, 4U3"#U5 to Radio Marine Net$or, 4S+artnet5, Inc. 4RMNSI5, doin- business as S+artnet Philippines,2 under the latter9s Php0&1 +illion O+nibus *redit !ine $ith 3"#. In addition to the aforesaid collaterals, petitioner e?ecuted a Third Part/ R M over its &,81'6s>uare +eter propert/ located at Pason- Ta+o St., Ma,ati *it/ 4UMa,ati Propert/U5 covered b/ T*T No. ''%A%&. The R Ms, both si-ned b/ 7ilbert 7. 7u/, President of 7oodland *o+pan/, Inc., $ere dul/ re-istered b/ 3"# $ith the Re-istr/ of Deeds for *ala+ba, !a-una and Re-istr/ of Deeds for Ma,ati *it/, and annotated on the said titles. *ISION

Subse>uentl/, ho$ever, petitioner repudiated the R Ms b/ clai+in- that 3"# and its officers unla$full/ filled up the blan, +ort-a-e for+s and falsified the entries therein. The !a-una properties $ere the sub=ect of t$o suits filed b/ petitioner to forestall their i++inent foreclosure, and si+ilar actions $ere li,e$ise instituted b/ petitioner involvin- the Ma,ati propert/ $hich is the sub=ect of the present case. !a-una Properties% On .anuar/ 'A, 0112, petitioner filed a co+plaint for annul+ent of +ort-a-e before the Re-ional Trial *ourt 4RT*5 of #iVan, !a-una, #ranch 0&, doc,eted as *ivil *ase No. #6A0%0, on the -round that said R M $as falsified and in contravention of the parties9 a-ree+ent that the blan, +ort-a-e for+ $ould +erel/ serve as Uco+fort docu+entU and not to be re-istered b/ 3"#. Hhile said case $as pendin-, RMNSIFS+artnet defaulted on its loan obli-ation, $hich pro+pted 3"# to e?ercise its ri-ht under the R M b/ filin- on October '(, 011A an application for e?tra=udicial foreclosure of real estate +ort-a-e under 3ct 2'2&, as a+ended, $ith the Office of the ?ecutive .ud-e of the RT* of #iVan, !a-una. In the public auction sale, 3"# e+er-ed as the hi-hest bidder and $as issued a *ertificate of Sale $hich $as re-istered $ith the Re-istr/ of Deeds of *ala+ba on Nove+ber 02, 011A. Prior to the consolidation of title in the foreclosin- +ort-a-ee 43"#5, petitioner co++enced a second suit on Nove+ber 08, 011A in the RT* of #iVan, #ranch 0&, doc,eted as *ivil *ase No. #6)''1. The co+plaint sou-ht to annul the foreclosure sale and en=oin the consolidation of title in favor of 3"#, on the -round of alle-ed falsification of the R M. On Dece+ber '', 011A, respondents +oved to dis+iss *ivil *ase No. #6)''1, callin- the attention of the RT* to petitioner9s foru+ shoppin- in vie$ of the pendenc/ of *ivil *ase No. #6A0%0. The/ ar-ued that the t$o cases $ere anchored on the alle-ed falsification of the R M as basis for the reliefs sou-ht. The RT* -ranted the said +otion on March '&, 011) and dis+issed $ith pre=udice *ivil *ase No. #6)''1 on -rounds of foru+ shoppin- and litis pendentia. Said court e?plained that the in=unction case 4#6)''15 and annul+ent case 4#6 A0%05 $ere founded on the sa+e transactions, sa+e essential facts and circu+stances, and raise substantiall/ the sa+e issues. That petitioner additionall/ pra/ed for a $rit of preli+inar/ in=unction did not affect the si+ilarit/ of the t$o casesI petitioner could have pra/ed for in=unctive relief as ancillar/ re+ed/ in the annul+ent case. It $as also stated that the =ud-+ent in the annul+ent case on the validit/ of the R M $ould constitute res =udicata on the in=unction case. On March '&, 011), the RT* -ranted 3"# a $rit of possession over the foreclosed properties. The $rit $as issued on March 0A, 011) and 3"# obtained possession of the properties on 3pril 0, 011). On 3u-ust 'A, 011), the RT* dis+issed *ivil *ase No. #6A0%0 on +otion of respondents. Said court li,e$ise noted that the alle-ations and reliefs sou-ht b/ petitioner $ere identical $ith those in *ivil *ase No. #6)''1, and that petitioner did not infor+ the court that it filed *ivil *ase No. #6)''1. Petitioner appealed both dis+issals to the *3, the separate appeals it filed $ere doc,eted as *367.R. *V No. (1''% 4in=unction case5 and *367.R. *V No. ('0A( 4annul+ent case5. On .une &, 011(, the *3 -ranted the appeal in *367.R. *V No. (1''% and reversed the RT*9s order dated March '&, 011). It ordered the reinstate+ent of petitioner9s co+plaint in *ivil *ase No. #6)''1.& Respondents filed a +otion for reconsideration $hich $as denied in a resolutionA dated Februar/ '), 01'1. In a decision dated 3u-ust '', 011(, petitioner9s appeal in *367.R. *V No. ('0A( $as li,e$ise -ranted, $hich effectivel/ reinstated *ivil *ase No. #6A0%0. Respondents +oved for reconsideration but the sa+e $as denied in a resolution dated Nove+ber '1, 011(. Respondents elevated to this *ourt the *39s reversal of the RT*9s dis+issal orders, in separate petitions for revie$ under Rule %&, doc,eted as 7.R. No. '(102' 4*367.R. *V No. ('0A(5 and 7.R. No. '('288 4*367.R. *V No. (1''%5. On Dece+ber 8, 01'1, this *ourt9s First Division -ranted the petition in 7.R. No. '(102', reversin- and settinaside the decision dated 3u-ust '', 011( and resolution dated Nove+ber '1, 011( of the *3, and reinstatin- the 3u-ust 'A, 011) and Dece+ber &, 011) orders of the RT* $hich dis+issed *ivil *ase No. #6A0%0. Petitioner

filed a +otion for reconsideration but the sa+e $as denied $ith finalit/ in the *ourt9s Resolution ) dated .anuar/ '(, 01''. On March (, 01'', this *ourt9s First Division li,e$ise -ranted the petition in 7.R. No. '('288 4*367.R. *V No. (1''%5, reversin- and settin- aside the decision dated .une &, 011( and resolution dated Februar/ '), 01'1 of the *3. The *ourt ordered the reinstate+ent of the March '&, 011) order of the RT* dis+issin- *ivil *ase No. #6)''1. Ma,ati Propert/ Petitioner filed the first suit assailin- the R M over its propert/ covered b/ T*T No. ''%A%& on .anuar/ '), 0112, doc,eted as *ivil *ase No. 1261%& of the RT* of Ma,ati *it/, #ranch &A. The *o+plaint8 a-ainst 3"#, 3braha+ *o 43"# President5, 3tt/. .oel T. Pelicano and the Re-ister of Deeds of Ma,ati *it/ alle-ed that so+eti+e in March 0111, in co+pliance $ith the re>uire+ents of 3"#, and b/ $a/ of acco++odation as securit/ for the loan of S+artnet Philippines, Inc. 4SPI5, Mr. 7ilbert 7. 7u/ si-ned the blan, R M deed $ith the understandin- that the docu+ent shall not be co+pleted and not to be re-istered $ith the Re-ister of Deeds as it $ould onl/ serve as co+fort docu+ent to prove petitioner9s $illin-ness to e?ecute a R M in the future if so de+anded b/ 3"# and a-reed upon b/ S+artnet. In contravention of such a-ree+ent and despite the fact that no notar/ public $as present $hen Mr. 7u/ si-ned the R M, 3"# and its officers +ade it appear that the R M dated Februar/ 0(, 0111 $ith the stated consideration of Php010 +illion $as dul/ co+pleted and notari;ed, and $as subse>uentl/ re-istered $ith the Re-ister of Deeds. Disparities in the cop/ of the R M on file $ith the Office of the *ler, of *ourt of Pasi- *it/ $ere li,e$ise discovered b/ petitioner 4co++unit/ ta? certificates used $ere issued in 011'5. On .anuar/ 0(, 0110, petitioner sent its $ritten ob=ections to the spurious R M and de+anded fro+ 3"# its i++ediate cancellation. "pon re>uest of petitioner, the National #ureau of Investi-ation also investi-ated the falsification and found for-er/ in the si-nature of respondent Pelicano 4Notar/ Public5. Petitioner further clai+ed that it learned fro+ S+artnet that the latter never obtained an/ peso6deno+inated loan fro+ 3"#, as all its loans for $or,in- capital $ere in clean .apanese Jen loans. #ein- a falsified docu+ent, the subse>uent annotation of the R M on the title of petitioner sub=ected the latter to an encu+brance never intended nor consented to b/ petitioner as o$ner, and conse>uentl/ to the ris, of foreclosure at the behest of 3"#. Petitioner also alle-ed bad faith on the part of 3"# and *o in the fraudulent e?ecution and re-istration of the R M $ithout its ,no$led-e and consent, $hile respondent Pelicano9s ac,no$led-+ent on the spurious R M is a violation of his duties as a notar/ public and +ade hi+ a part/ to the fraudulent act. Petitioner thus pra/ed for the follo$in- reliefs: '. the Deed of Real state Mort-a-e dated Februar/ 0(, 0111 be declared null and void, and accordin-l/ cancelledI 0. the annotation of real estate +ort-a-e on T*T6''%A%& under ntr/ No. &2&8% be cancelled, and that defendants 3"# and *o be ordered to surrender the said titles to plaintiff 7oodlandI 2. defendants 3"#, 3braha+ *o, and .oel T. Pelicano be ad=ud-ed =ointl/ and severall/ liable to plaintiff 7oodland the su+ of PhP&,111,111.11 as actual da+a-es, PhP',111,111.11 as attorne/9s fees and PhP',111,111.11 as e?penses of liti-ationI %. defendants 3"# and 3braha+ *o be ad=ud-ed =ointl/ and severall/ liable to pa/ plaintiff 7oodland the su+ of PhP0,111,111.11 as e?e+plar/ da+a-esI and &. defendant .oel T. Pelicano, be ad=ud-ed liable to pa/ plaintiff 7oodland the su+ of P',111,111.11 as e?e+plar/ da+a-esI Plaintiff pra/s for cost of suit and for such further or other reliefs and re+edies =ust or e>uitable under the pre+ises.(

On Nove+ber 21, 011A, petitioner filed the second case a-ainst herein respondents 3"# and its officers *hristine T. *han, Florante Del Mundo, n-racio M. scasinas, .r. 4RT* of Ma,ati *it/ *ler, of *ourt and ?6 Officio Sheriff5, Norberto #. Ma-sa=o 4Sheriff IV5 and Ronald 3. Ortile 4Re-ister of Deeds for Ma,ati *it/5, doc,eted as *ivil *ase No. 1A6'120 of RT* of Ma,ati *it/, #ranch '%&. Hhereas the earlier case 4*ivil *ase No. 1261%&5 sou-ht the annul+ent of the R M based on alle-ed irre-ularities in its e?ecution, *ivil *ase No. 1A6'120 pra/ed for in=unctive relief andFor nullification of the e?tra=udicial foreclosure sale $hich petitioner alle-ed to be procedurall/ and le-all/ defective on account of the follo$in-: '. The annotation of the falsified Third Part/ MORT737 $as contrar/ to and in violation of the e?press a-ree+ent of defendant 3"# and plaintiff 7OOD!3NDI 0. The ?tra6.udicial Foreclosure is &u:: %&' @o2' as it is based on a null and void re-istrationFannotation of a =%:s2=2,' Real state Mort-a-eI 2. Defendant 3"#9s insistence on conductin- the foreclosure despite the pendenc/ of the annul+ent case betra/s the utter bad faith and +alicious intent of defendant 3"#I %. The foreclosure is for an alle-ed unpaid obli-ation of RMNI $hich is &ot s,5u/,' b/ the sub=ect Third Part/ MORT737 I &. No ',6%&'s for pa/+ent $ere +ade b/ defendant 3"# on SPII A. The publication of the sub=ect UNotice of Sheriff9s SaleU in UT1, !o/,2g& PostU, $hich is &ot a Une$spaper of -eneral circulationU, is &u:: and @o2' as it does not co+pl/ $ith the strict and +andator/ re>uire+ents of the la$ 4Section 2 3ct No. 2'2&, as a+ended5. ). The provision on rede+ption in the 7eneral #an,in- !a$ of 0111 4R.3. No. 8)('5, that is, Section %) 4par. 05 thereof, is unconstitutional on the -round that it violates the constitutional ri-ht of plaintiff 7OOD!3ND to e>ual protection of the la$s under Sec. ', 3rt. III of the *onstitution. It also violates the prohibition a-ainst i+pair+ent of the obli-ations of contracts stipulated in Sec. '1, 3rt. III of the *onstitution because it ta,es a$a/ fro+ plaintiff 7OOD!3ND the vested one6/ear rede+ption period under the e?istin- la$ 4Sec. A of 3ct No. 2'2&5 at the ti+e of the deliver/ of the sub=ect Third Part/ MORT737 to defendant 3"# in .une '(((. The o&, A1B 4,%/ rede+ption period of plaintiff 7OOD!3ND under Sec. A of 3ct No. 2'2& $as drasticall/ reduced to a 6%<26u6 of t1/,, A3B 6o&t1s onl/ to as short as tC,&t4+=ou/ A29B 1ou/s, as $hat happened in the other foreclosure conducted b/ defendant 3"# on the Sta. Rosa, !a-una properties of plaintiff 7OOD!3ND.'1 4 +phasis and italics in the ori-inal.5 In addition to the issuance of a te+porar/ restrainin- order 4TRO5 and $rit of preli+inar/ in=unction to be +ade per+anent after trial, petitioner specificall/ pra/ed that =ud-+ent be rendered in its favor and a-ainst the respondents, as follo$s: 4'5 Declarin- the annotation and re-istration of the sub=ect Third Part/ MORT737 $ith the Re-istr/ of Deeds of Ma,ati *it/ as null and void and of no le-al force and effectI 405 In the event that a valid and le-al auction sale be alread/ conducted, declarin- that the foreclosure proceedin-Fsale of the sub=ect +ort-a-ed propert/ andFor the *ertificate of Sale issued in favor of the $innin- bidder, as null and void and of no le-al force and effectI 425 In the event that plaintiff 7OOD!3ND9s title to the sub=ect propert/ be alread/ cancelled and the title $as alread/ consolidated or a ne$ title alread/ issued in favor of the $innin- bidder, declarin- the said cancellation of title and consolidation of title and issuance of ne$ title in the na+e of the $inninbidder, as null and void, and orderin- the cancellation of the said invalidl/ issued ne$ title in the na+e of the $innin- bidder and li,e$ise orderin- the issuance of ne$ title in the na+e of plaintiff 7OOD!3NDI

425 In the alternative, in the event that the @onorable *ourt finds the foreclosure proceedin-s as proper, valid and le-al, declarin- that Section %) 4par. 05 of the 7eneral #an,in- !a$ of 0111 4R.3. No. 8)('5 is unconstitutional, and -rantin- plaintiff 7OOD!3ND the ri-ht to redee+ the +ort-a-ed properties in accordance $ith the provisions of Sec. A of 3ct No. 2'2&I 4%5 Orderin- defendants 3"#, *hristine T. *han and Florante del Mundo to, =ointl/ and severall/, pa/ plaintiff 7OOD!3ND the follo$in- a+ounts, to $it: 435 3ctual and co+pensator/ da+a-es in the a+ount of not less than Four Million Pesos 4P%,111,111.115I 4#5 ?e+plar/ da+a-es in the a+ount of not less than One Million Pesos 4P',111,111.115I 4*5 3ttorne/9s fees in the a+ount of Five @undred Thousand Pesos 4P&11,111.115I 4D5 !iti-ation e?pensesI and, 4 5 *osts of suit.'' On Dece+ber '2, 011A, the RT* issued an Order'0 den/in- petitioner9s application for the issuance of a $rit of preli+inar/ in=unction, as $ell as respondents9 +otion to dis+iss based on foru+ shoppin-, non6pa/+ent of correct doc,et fees and failure to state a cause of action. @o$ever, the court reserved the issuance of the correspondin- order re>uirin- petitioner to pa/ the appropriate doc,et fees after respondents shall have sub+itted $hat the/ believed should have been the correct co+putation thereof. Respondents filed their 3ns$er 3d *autela+'2 den/in- the alle-ations of the co+plaint re-ardin- the fraudulent e?ecution and re-istration of the R M and the loan obli-ation it secured, irre-ularities in the conduct of the e?tra=udicial foreclosure sale, and that their acts $ere done in bad faith. The/ asserted that: 4'5 #ased on representations b/ Mr. 7ilbert 7u/, RMNSI, S+artnet Philippines and SPI operate under one and the sa+e entit/, all bein- businesses of Mr. 7u/ and hence, US+artnet PhilippinesU undoubtedl/ refers to RMNSI $hich has an authori;ed capital stoc, of Php%11 +illion and an O+nibus *redit !ine $ith 3"#, $hile SPI, a corporate shell created b/ Mr. 7u/, has an authori;ed capital stoc, of onl/ Php' +illion and has not been -ranted an/ credit facilit/ b/ 3"#I 405 the +ort-a-e deed states that the debtor is S+artnet Philippines, the DTI6re-istered na+e of RMNSI, as also $ith the Secretar/9s *ertificate of petitioner in connection $ith the authorit/ to use the Ma,ati propert/ as securit/ for the loan obli-ation of RMNSI, and the pro+issor/ notes involved in the foreclosure applicationI 425 There $as never an/ understandin- not to co+plete or re-ister the R M docu+ent as 3"# $ould not have approved the loans if not for the securit/ offered b/ petitionerI Mr. 7u/ hi+self trans+itted the R M he si-ned, $hich $as not a blan, docu+ent, and petitioner ,ne$ fro+ the start the re-istration of the R M $as forthco+in- after its due e?ecution b/ Mr. 7u/, as the sa+e $ould be in the nor+al course of business of 3"#I 4%5 The sa+e facts obtain in connection $ith the +ort-a-e of petitioner9s !a-una PropertiesI 4&5 The R M $as valid and bindin-, the propert/ covered thereb/ +a/ be validl/ foreclosedI respondents have not perfor+ed an/ irre-ularit/ or violation of la$, and have neither en-a-ed in an/ fraudulent, +alicious and abusive conduct or transactionI it $as petitioner and Mr. 7u/ $ho had conspired to defraud 3"# b/, a+on- others, den/in- the validit/ and due e?ecution of the R MI 4A5 3"# co+plied $ith the le-al re>uire+ents for the e?tra=udicial foreclosure of the sub=ect propert/ includin- the public auction held on Dece+ber %, 011A conducted b/ Sheriff Ma-sa=o in the presence of a representative of petitioner $ho did not bid, and accordin-l/ 3"# consolidated its o$nership over the foreclosed propert/ sold to it as the hi-hest bidder, $ith the issuance of T*T No. 002'01 in its na+e as the ne$ absolute o$nerI and 4)5 *onsiderin- that the e?tra=udicial foreclosure $as ad+ittedl/ an e?ercise b/ 3"# of its ri-ht as an unpaid and a--rieved creditor6+ort-a-ee, the sa+e +a/ not le-all/ rise to an/ liabilit/ for da+a-es in favor of petitioner, in the e?ercise of such ri-ht, 3"# co++itted no irre-ularit/, bad faith, fraud or +alicious action. Respondents contended that petitioner is -uilt/ of foru+ shoppin-, as it has previousl/ filed a case for the annul+ent of the R M 4*ivil *ase No. 1261%&5 $hich is pendin- before #ranch &A. Said case $as based on the sa+e cause of action, that is, petitioner9s perceived irre-ularities in the e?ecution and re-istration of the R M. The in=unctive relief sou-ht b/ petitioner a-ainst the foreclosure is properl/ a provisional and ancillar/ re+ed/ in the annul+ent caseI the institution of the in=unction case $as therefore not co+pelled b/ respondents9 acts but b/ petitioner9s o$n ne-li-ence and conte+pt.

The follo$in- affir+ative and special defenses $ere li,e$ise raised b/ respondents: 4'5 the RT* has no =urisdiction over the sub=ect +atter considerin- petitioner9s fraudulent failure to pa/ the correct a+ount of doc,et fees, as it deliberatel/ concealed the fair +ar,et value of the sub=ect propert/I 405 $ithout pre=udice to other sanctions, the co+plaint should be su++aril/ dis+issed considerin- that petitioner en-a-ed in a $illful, deliberate and contu+acious act of foru+ shoppin-I the certificate of non6foru+ shoppin- it sub+itted $as false and per=uriousI 425 the case should also be dis+issed on the -round of litis pendentia as the issues herein are alread/ subsu+ed in the annul+ent case pendin- $ith another branchI 4%5 the court has not validl/ ac>uired =urisdiction over the persons of respondents for lac, of service of su++ons, the Officer9s Return dated Dece+ber %, 011A clearl/ stated that the su++ons $ere unserved and $hich failed to state the facts and circu+stances sho$in- the i+possibilit/ of personal service of su++ons upon the respondents, and neither did petitioner see, the issuance of an alias su++onsI 4&5 the case is alread/ +oot because title had alread/ been consolidated in the na+e of 3"# $hich +a/ no lon-er be restrained fro+ e?ercisin- ri-hts of o$nership over the foreclosed propert/I the pendenc/ of a civil case for the nullit/ of the +ort-a-e docu+ent is not a le-al bar to foreclosure b/ the creditor6+ort-a-ee upon the default of the debtor6+ort-a-orI 4A5 even assu+in- there $as a defect in the notari;ation of the R M, it is not a -round to invalidate the foreclosure sale or hold in abe/ance the consolidation of title in favor of 3"#I 4)5 based on the facts alle-ed in the co+plaint, it is clear that 3"# did not act in bad faith nor abused its ri-hts $hen it caused the foreclosure of the sub=ect propert/I 485 petitioner9s clai+s that the unpaid obli-ations of RMNSI is not secured b/ the R M and that no de+and for pa/+ent $as +ade on SPI, are both irrelevant and do$nri-ht per=urious and +isleadin-I and 4(5 even on the basis of the alle-ations in the co+plaint and its anne?es, the sa+e fail to state a cause of action, individual respondents cannot be held liable for da+a-es as the/ have not acted $ith bad faith or fraud in connection $ith the R MI in an/ event, apart fro+ the de+and letter sent to RMNSI, a de+and letter $as also sent to SPI at the address indicated b/ petitioner itself in the co+plaint, a cop/ of said de+and letter addressed to URadio+arine Net$or, 4S+artnet5, Inc. doin- business as S+artnet Philippines and S+artnet Philippines, Inc.U at #uildin82&(, <a+bales @i6$a/ cor. #ataan Rd., "pper *ubi, Subic #a/ Freeport <one. Respondents further averred that contrar/ to petitioner9s alle-ation, UThe Forei-n PostU is a ne$spaper of -eneral circulation, havin- been accredited as such b/ the Office of the ?ecutive .ud-e in the Order dated .une '), 0110 issued b/ ?ecutive .ud-e !eticia P. Morales. Mr. Dante Ofian-a, *irculation Mana-er of UThe Forei-n PostU, also testified durin- the hearin- held on Dece+ber 8, 011A, that said publication is a $ee,l/ ne$spaper of -eneral circulation, printed and published in the *it/ of Manila, Philippines. Finall/, respondents ar-ued that the three 425 +onths period prescribed b/ the 7eneral #an,in- !a$ of 0111 is a valid li+itation on the ri-ht of rede+ption, $hich is the e?ception rather than the -eneral rule. This *ourt has alread/ upheld the restriction on the e?ercise of the ri-ht of rede+ption in !andrito, .r. v. *ourt of 3ppeals '%. On +otion of respondents, *ivil *ase No. 1A6'120 $as consolidated $ith *ivil *ase No. 1261%&. Prior to the consolidation, respondents +oved to dis+iss'& $ith pre=udice the t$o cases on the -rounds of foru+ shoppin-, and that no =urisdiction $as ac>uired b/ the RT* in *ivil *ase No. 1261%& for failure to pa/ the proper doc,et and other le-al fees. In a .oint Order'A dated .ul/ '1, 011), the RT* 4#ranch &A5 dis+issed $ith pre=udice the co+plaints in both cases. Petitioner filed t$o separate +otions for reconsideration, $hich the RT* li,e$ise denied on October 'A, 011).') Petitioner a-ain filed separate appeals before the *3, $hich $ere doc,eted under onl/ one case 4*367.R. *V No. (1%'85. #/ Decision'8 dated Septe+ber '&, 01'1, the *39s Fifth Division dis+issed petitioner9s appeal. Hhile the *3 disa-reed $ith the RT*9s dis+issal of *ivil *ase No. 1A6'120 on the -round of non6pa/+ent of correct doc,et fees, it nevertheless sustained the dis+issal $ith pre=udice of both *ivil *ase No. 1261%& and *ivil *ase No. 1A6 '120 on the -round of foru+ shoppin-. The *3 found that the t$in co+plaints as,ed for a co++on relief: nullification of the R M over the Ma,ati propert/, cancellation of its annotation, and return of the propert/ to petitioner. It also ruled that a decision in either *ivil *ase No. 1261%& and *ivil *ase No. 1A6'120 $ill certainl/ a+ount to res =udicata in the otherI both courts $ere called upon to rule on the issue of $hether the R M $as falsified, thus renderin- it and all related transactions and proceedin-s invalid. The court to render a later =ud-+ent $ill find itself in an a$,$ard

predica+ent $hether to decide on said issue in the sa+e $a/ the court $hich first ruled on the sa+e issue, or to decide it the other $a/. The *3 concluded that a +alicious situation therefore presents itself because the t$in fora are bein- pitted a-ainst each other, hence a case of plain and si+ple foru+ shoppin-. The *3 also concurred $ith the RT* #ranch &A in findin- that petitioner ine?plicabl/ failed to infor+ said court of petitioner9s subse>uent filin- of *ivil *ase No. 1A6'120 despite its underta,in- to do so in the first case 4*ivil *ase No. 1261%&5, $hich fatal o+ission si+ilarl/ ree,s of foru+ shoppin- $hich is deliberate and +alicious. The appellate court further said that the supervenin- event of the e?tra=udicial foreclosure did not =ustif/ the filin- of a separate case, $hich on its face si+pl/ reiterated the sa+e facts. The foreclosure of the +ort-a-e $as a +ere continuation of the +aterial facts presented in the first case, and thus petitioner9s re+ed/ arisin- therefro+ is dee+ed subsu+ed in its pra/er for nullification of the R M in the first case because such nullit/ of the +ort-a-e contract invalidates ever/thin- else includin- the e?tra=udicial foreclosure. The *3 opined that petitioner should have =ust a+ended its first co+plaint for the purpose of pleadin- the superveninevent of e?tra=udicial foreclosure and perhaps addin- in its pra/er the nullification of the said foreclosure. Petitioner filed t$o separate +otions for reconsideration $hich the *3 li,e$ise denied in its Resolution '( dated .anuar/ 2', 01''. The *3 further noted this *ourt9s decision in 7.R. No. '(102' $hich reinstated the dis+issal of *ivil *ase No. #6A0%0 involvin- e?actl/ the sa+e parties, issues and sub=ect +atter. The *onsolidated Petitions and Parties9 3r-u+ents Petitioner filed before this *ourt t$o separate petitions throu-h different counsels assailin- the sa+e *3 decision dis+issin- their t$o appeals and resolution den/in- their t$in +otions for reconsideration. The core issue presented is $hether petitioner $as -uilt/ of foru+ shoppin- $hen it successivel/ filed *ivil *ase No. 1261%& and *ivil *ase No. 1A6'120. Petitioner ar-ues that there $as no foru+ shoppin- involved because contrar/ to the *39s vie$, a =ud-+ent in either of the t$o cases $ill not a+ount to res =udicata in the other, statin- that there are t$o probable outco+es for each caseI thus, the R M +a/ be declared either null and void or valid, and the e?tra=udicial foreclosure +a/ li,e$ise be declared either null and void or valid. Petitioner then posits that a =ud-+ent in *ivil *ase No. 1261%& that the R M is valid $ill not preclude it fro+ filin- a separate case for the annul+ent of the foreclosure proceedin-I petitioner9s clai+s on the irre-ularities in the e?tra=udicial foreclosure $hen proven $ould still result in its nullification, even if the R M is declared valid in the first case. Si+ilarl/, a =ud-+ent annullin- the e?tra=udicial foreclosure $ould not bar a separate co+plaint for the annul+ent of a spurious and falsified +ort-a-e. Petitioner further notes that it did not fail to disclose as in fact it asserted the pendenc/ of *ivil *ase No. 1261%& in *ivil *ase No. 1A6'120 $hen it alle-ed the surreptitious foreclosure b/ the respondents durin- the pendenc/ of *ivil *ase No. 1261%&. The first case 4*ivil *ase No. 1261%&5 $as also disclosed b/ petitioner in the *ertificate of Non6Foru+ Shoppin- appended to its co+plaint in *ivil *ase No. 1A6'120. Moreover, petitioner pointed out that the consolidation of the t$o cases has eli+inated the possibilit/ of conflictin- decisions. The filin- of the second case to en=oin the foreclosure $as =ustified since petitioner has no other sufficient and effective re+ed/ under the circu+stances. In the absence of +alicious intent in the +ere filin- of *ivil *ase No. 1A6'120, petitioner contends that the *3 erred in findin- it -uilt/ of foru+ shoppin-. On the other hand, respondents +aintain that the *3 $as correct in holdin- that petitioner is -uilt/ of foru+ shoppin- as an/ rulin- of either court on the identical issue of falsit/ of the R M $ould a+ount to res =udicata in the other case. The/ also stress that foru+ shoppin- alread/ e?ists $hen the cases involve the sa+e or related causes and the sa+e or substantiall/ the sa+e reliefs. Invo,in- stare decisis, respondents cite the final =ud-+ent rendered b/ this *ourt in 7.R. No. '(102' involvin- the !a-una Properties $hich also involved the sa+e parties and transactions as in the instant case. #ut even before the said rulin-, respondents point out that it $as alread/ settled that there is foru+ shoppin- if t$o actions boil do$n to a sin-le issue, althou-h the issues and reliefs pra/ed for $ere stated differentl/, because the final disposition of one $ould constitute res =udicata in the other, citin- Pruban,ers 3ssociation v. Prudential #an, Q Trust *o+pan/01. 3nother case0' $as cited b/ respondents holdin- that there is foru+ shoppin- $hen the re+edies sou-ht b/ the petitioner had the possibilit/ of resultin- in conflictin- rulin-s, $hich supports the *39s observations.

Respondents underscore the deliberate and contu+acious foru+ shoppin- co++itted b/ petitioner not onl/ before the trial courts but also before the *3 and this *ourt. The/ called attention to petitioner9s filin- of t$o notices of appeal, institution of t$o appeals and sub+ission of t$o appeal briefs fro+ one and the sa+e RT* decisionI t$o +otions for reconsideration andI no$, the herein identical petitions filed in this *ourt a-ainst the sa+e principal part/, 3"#. .ust li,e in the identical actions before the RT*, petitioner did not seasonabl/ report the second petition in 7.R. No. '(&&A'. In fact, 7.R. No. '(&&%A $as consolidated $ith 7.R. No. '(&&A' because this *ourt alread/ found that Uthe/ arose fro+ the sa+e essential facts and assail the sa+e decision and resolution of the *ourt of 3ppeals to avoid conflictin- decisions.U00 The *ourt9s RulinThe petitions +ust fail. There is foru+ shoppin- $hen the follo$in- ele+ents are present: U4a5 identit/ of parties, or at least such parties as represent the sa+e interests in both actionsBIC 4b5 identit/ of ri-hts asserted and relief pra/ed for, the relief bein- founded on the sa+e factsBIC and 4c5 the identit/ of the t$o precedin- particularsB,C such that an/ =ud-+ent rendered in the other action $ill, re-ardless of $hich part/ is successful, a+ount to res =udicata in the action under considerationI said re>uisites BareC also constitutive of the re>uisites for auter action pendant or lis pendens.U02The essence of foru+ shoppin- is the filin- of +ultiple suits involvin- the sa+e parties for the sa+e cause of action, either si+ultaneousl/ or successivel/, for the purpose of obtainin- a favorable =ud-+ent, throu-h +eans other than b/ appeal or certiorari. 0% 3ll the fore-oin- ele+ents are present in this case. There can be no dispute that the pra/er for relief in the t$o cases $as based on the sa+e attendant facts in the e?ecution of R Ms over petitioner9s properties in favor of 3"#. Hhile the e?tra=udicial foreclosure of +ort-a-e, consolidation of o$nership in 3"# and issuance of title in the latter9s na+e $ere set forth onl/ in the second case 4*ivil *ase No. 1A6'1205, these $ere si+pl/ the e?pected conse>uences of the R M transaction in the first case 4*ivil *ase No. 1261%&5. These eventualities are precisel/ $hat petitioner sou-ht to avert $hen it filed the first case. "ndeniabl/ then, the in=unctive relief sou-ht a-ainst the e?tra=udicial foreclosure, as $ell as the cancellation of the ne$ title in the na+e of the creditor6+ort-a-ee 3"#, $ere all pre+ised on the alle-ed nullit/ of the R M due to its alle-edl/ fraudulent and irre-ular e?ecution and re-istration M the sa+e facts set forth in the first case. In both cases, petitioner asserted its ri-ht as o$ner of the propert/ sub=ect of the R M, $hile 3"# invo,ed the ri-hts of a foreclosin- creditor6+ort-a-ee. There is also identit/ of parties not$ithstandin- that in the first case, onl/ one ban, officer 4*o5, the notar/ public 4Pelicano5 and the Re-ister of Deeds $ere i+pleaded alon- $ith 3"# as defendants, $hereas in the second case, 3"# and its t$o officers 4*han and Del Mundo5, alon- $ith the RT* *ler, of *ourt 4 scasinas, .r.5, Sheriff 4Ma-sa=o5 and the Re-ister of Deeds of Ma,ati *it/ 4Ortile5 $ere the na+ed defendants. The parties in both cases are substantiall/ the sa+e as the/ represent the sa+e interests and officesFpositions, and $ho $ere i+pleaded in their respective capacities $ith correspondin- liabilitiesFduties under the clai+s asserted. Hith respect to identit/ of cause of action, a cause of action is defined in Section 0, Rule 0 of the Rules of *ourt as the act or o+ission b/ $hich a part/ violates the ri-ht of another. This *ourt has laid do$n the test in deter+inin- $hether or not the causes of action in the first and second cases are identical, to $it: $ould the sa+e evidence support and establish both the present and for+er cause of actionW If so, the for+er recover/ is a barI if other$ise, it does not stand in the $a/ of the for+er action.0& In the first case, petitioner alle-ed the fraudulent and irre-ular e?ecution and re-istration of the R M $hich violated its ri-ht as o$ner $ho did not consent thereto, $hile in the second case petitioner cited further violation of its ri-ht as o$ner $hen 3"# foreclosed the propert/, consolidated its o$nership and obtained a ne$ T*T in its na+e. *onsiderin- that the aforesaid violations of petitioner9s ri-ht as o$ner in the t$o cases both hin-e on the bindin- effect of the R M, i.e., both cases $ill rise or fall on the issue of the validit/ of the R M, it follo$s that the sa+e evidence $ill support and establish the first and second causes of action. The procedural infir+ities or non6co+pliance $ith le-al re>uire+ents for e?tra=udicial foreclosure raised in the second case $ere but additional -rounds in support of the in=unctive relief sou-ht a-ainst the foreclosure $hich $as, in the first place, ille-al on account of the +ort-a-e contract9s nullit/. videntl/, petitioner never relied solel/ on the alle-ed procedural irre-ularities in the e?tra=udicial foreclosure $hen it sou-ht the reliefs in the second case.

On this point, it is relevant to >uote si+ilar findin-s of this *ourt in 7.R. No. '('288, $hich case involved, contrar/ to petitioner9s asseveration and as clearl/ sho$n in the factual antecedents herein set forth, the sa+e parties, issues and causes of action founded on the sa+e real estate +ort-a-e transaction albeit coverinproperties of petitioner located in another province 4!a-una5, to $it: The cause of action in the earlier 3nnul+ent *ase is the alle-ed nullit/ of the R M 4due to its alle-edl/ falsified or spurious nature5 $hich is alle-edl/ violative of 7oodland9s ri-ht to the +ort-a-ed propert/. It serves as the basis for the pra/er for the nullification of the R M. The In=unction *ase involves the sa+e cause of action, inas+uch as it also invo,es the nullit/ of the R M as the basis for the pra/er for the nullification of the e?tra=udicial foreclosure and for in=unction a-ainst consolidation of title. Hhile the +ain relief sou-ht in the 3nnul+ent *ase 4nullification of the R M5 is ostensibl/ different fro+ the +ain relief sou-ht in the In=unction *ase 4nullification of the e?tra=udicial foreclosure and in=unction a-ainst consolidation of title5, the cause of action $hich serves as the basis for the said reliefs re+ains the sa+e P the alle-ed nullit/ of the R M. Thus, $hat is involved here is the third $a/ of co++ittin- foru+ shoppin-, i.e., filin- +ultiple cases based on the sa+e cause of action, but $ith different pra/ers. 3s previousl/ held b/ the *ourt, there is still foru+ shoppineven if the reliefs pra/ed for in the t$o cases are different, so lon- as both cases raise substantiall/ the sa+e issues. There can be no deter+ination of the validit/ of the e?tra=udicial foreclosure and the propriet/ of in=unction in the In=unction *ase $ithout necessaril/ rulin- on the validit/ of the R M, $hich is alread/ the sub=ect of the 3nnul+ent *ase. The identit/ of the causes of action in the t$o cases entails that the validit/ of the +ort-a-e $ill be ruled upon in both, and creates a possibilit/ that the t$o rulin-s $ill conflict $ith each other. This is precisel/ $hat is sou-ht to be avoided b/ the rule a-ainst foru+ shoppin-. The substantial identit/ of the t$o cases re+ains even if the parties should add different -rounds or le-al theories for the nullit/ of the R M or should alter the desi-nation or for+ of the action. The $ell6entrenched rule is that Ua part/ cannot, b/ var/in- the for+ of action, or adoptin- a different +ethod of presentin- his case, escape the operation of the principle that one and the sa+e cause of action shall not be t$ice liti-ated.0A 4 +phasis supplied.5 In the above6cited case, the *ourt also called attention to its earlier rulin- in 7.R. No. '(102' $hich involved substantiall/ the sa+e parties, and $hich constitutes another reason $h/ the petition +ust fail, statin- that UBtChe issue that 7oodland co++itted deliberate foru+ shoppin- $hen it successivel/ filed the 3nnul+ent and In=unction *ases a-ainst 3"# and its officer $as decided $ith finalit/ therein. This rulin- is conclusive on the petitioners and 7oodland considerin- that the/ are substantiall/ the sa+e parties in that earlier case.U 0) 7iven the si+ilar factual circu+stances in the institution b/ herein petitioner of *ivil *ase Nos. 1261%& and 1A6 '120 4Ma,ati Propert/ case5 before the RT*, $ith those t$o cases 4*ivil *ase Nos. #6A0%0 and #6)''15 sub=ect of the petitions in 7.R. Nos. '(102' and '('288 involvin- the !a-una Properties covered b/ the sa+e real estate +ort-a-e transaction bet$een 3"# and petitioner, the findin-s and conclusion of this *ourt in 7.R. No.'(102' on the factual issue of $hether the petitioner en-a-ed in $illful and deliberate foru+ shoppinshould be controllin-, to $it: Rule ), Section & of the Rules of *ourt re>uires ever/ liti-ant to notif/ the court of the filin- or pendenc/ of a co+plaint involvin- the sa+e or si+ilar action or clai+ $ithin five da/s of learnin- of that fact. Hhile both *ivil *ase Nos. #6A0%0 and #6)''1 $ere raffled to the sa+e court, the RT* of #iVan, !a-una, #ranch 0&, respondent did not report the filin- of *ivil *ase No. #6)''1 in the proceedin-s of *ivil *ase No. A0%0. This fact clearl/ established respondent9s furtive intent to conceal the filin- of *ivil *ase No. #6)''1 for the purpose of securin- a favorable =ud-+ent. For this reason, *ivil *ase No. A0%0 $as correctl/ dis+issed $ith pre=udice.08 4 +phasis supplied.5 Petitioner, ho$ever, insists that the above rulin- is inapplicable to it considerin- that the pendenc/ of *ivil *ase No. 1A6'120 $as in fact disclosed in the Verification and *ertification of Non6Foru+ Shoppin- appended to its co+plaint in *ivil *ase No. 1A6'120. The said certification reads: ????

2. The plaintiff has not heretofore co++enced an/ other action or filed an/ clai+, involvin- the sa+e issues in an/ court, tribunal or >uasi6=udicial a-enc/ and, to the best of +/ ,no$led-e, no such other action or clai+ is pendin- therein. There are ho$ever pendin- cases related to the instant case, na+el/: U7oodland *o+pan/, Inc. vs. 3sia "nited #an,, et al.UU, *ivil *ase No. 1261%&, Re-ional Trial *ourt, #ranch '22, Ma,ati *it/I U7oodland *o+pan/, Inc. vs. 3sia "nited #an,, et al.U. *ivil *ase No. #6A0%0, Re-ional Trial *ourt, #ranch 0&,#iVan, !a-una, UPeople of the Philippines vs. *hristine *han, et al.U, *ri+. *ase No. 2202'2 , Metropolitan Trial *ourt, #ranch A%, Ma,ati *it/I and URafael @. 7alve; vs. *hristine *han, et al.U , I.S. No. 126)2, Depart+ent of .ustice, Manila. ? ? ? ?0( He find that the above certification still fell short of the re>uire+ent of the rule on foru+ shoppin-. Hhile petitioner disclosed the pendenc/ of *ivil *ase No. 1261%& it filed earlier, it >ualified the nature of the said case b/ lu+pin- it to-ether $ith other pendin- related cases. Petitioner9s si+ultaneous attestation that it has not co++enced Uan/ other action or filed an/ clai+, involvin- the sa+e issues in an/ courtU i+plies that the pendin- related cases +entioned therein do not involve the sa+e issues as those raised b/ it in the subse>uentl/ filed *ivil *ase No. 1A6'120. *onse>uentl/, petitioner has filed a certificate that is partl/ false and +isleadinbecause *ivil *ase No. 1A6'120 s>uarel/ raised the issue of the nullit/ of the R M, $hich $as in fact the principal issue in *ivil *ase No. 1261%&. Moreover, there $as no sho$in- that petitioner pro+ptl/ reported to the RT* #ranch '22 in $hich *ivil *ase No. 1261%& $as pendin-, its subse>uent filin- of *ivil *ase No. 1A6'120, as re>uired b/ the Rules. It $as at the instance of 3"# that the t$o cases $ere consolidated. This fact did not escape the attention of the RT* $hich also found petitioner9s act of foru+ shoppin- $illful and deliberate, as stated in its .oint Order dated .ul/ '1, 011), to $it: On a last note, the *ourt cannot countenance plaintiff9s violation of its underta,in- as re-ards co+pliance of the prohibition a-ainst foru+ shoppin-. In plaintiff9s *ertification as to Non6Foru+ Shoppin- e+bodied in its *o+plaint in *ivil *ase No. 1261%&, plaintiff is dut/ bound to report, $ithin five da/s fro+ ,no$led-e, the fact that a si+ilar action or proceedin- involvin- the sa+e issues have been filed or is pendin-. The records are barren of an/ sho$in- that plaintiff reported in *ivil *ase No. 1261%& the fact that it subse>uentl/ filed *ivil *ase No. 1A6'120. "nder Section &, Rule ) of the '(() Rules of *ivil Procedure, the plaintiff is re>uired under oath to certif/, a+on- others, his underta,in- to report to the court the fact of filin- of a si+ilar case, failin$hich shall be cause for the dis+issal of the case, to $it: U4c5 if he should thereafter learn that the sa+e or si+ilar action or clai+ has been filed or is pendin-, he shall report that fact $ithin five 4&5 da/s therefro+ to the court $herein his aforesaid co+plaint or initiator/ pleadinhas been filed. Gnon6co+pliance $ith an/ of the underta,in-s therein shall constitute indirect conte+pt of court, $ithout pre=udice to the correspondin- ad+inistrative and cri+inal actions. If the acts of the part/ or his counsel clearl/ constitute $illful and deliberate foru+ shoppin-, the sa+e shall be -round for su++ar/ dis+issal $ith pre=udice and shall constitute direct conte+pt, as $ell as a cause for ad+inistrative sanctions.U The totalit/ of circu+stances considered, plaintiff9s foru+ shoppin- co++itted in +ultifarious fashion cannot but be $illful and deliberate. @ence, consistent $ith established rule and =urisprudence, the sa+e is punishable b/ and results in the su++ar/ dis+issal of the actions filed. #oth *ivil *ase No. 1261%& and *ivil *ase No.1A6 '120 are therefore dis+issed $ith pre=udice. ? ? ?21 4 +phasis supplied.5 The *3 concurred $ith the RT* that petitioner9s act of foru+ shoppin- $as deliberate and +alicious considerin- that it ,no$in-l/ filed *ivil *ase No. 1A6'120 despite the pendenc/ of *ivil *ase No. 1261%&. The appellate court said that petitioner unscrupulousl/ too, advanta-e of the availabilit/ of co+petent tribunals and tried its luc, in different fora for a favorable result. He concur $ith the *39s findin- that a decision in either case $ill a+ount to res =udicata in the other considerin- that both courts $ere called upon to rule on the sa+e issue of $hether the R M $as falsified. Indeed, the possibilit/ of conflictin- rulin-s or decisions rendered b/ different courts on such issue +ilitates a-ainst petitioner9s posture that it never intended to conceal the subse>uent filin- of *ivil *ase No. 1A6'120.

Foru+ shoppin- e?ists $here the ele+ents of litis pendentia are present or $here a final =ud-+ent in one case $ill a+ount to res =udicata in the action under consideration.2' !itis pendentia is a !atin ter+, $hich literall/ +eans Ua pendin- suitU and is variousl/ referred to in so+e decisions as lis pendens and auter action pendant. 3s a -round for the dis+issal of a civil action, it refers to the situation $here t$o actions are pendin- bet$een the sa+e parties for the sa+e cause of action, so that one of the+ beco+es unnecessar/ and ve?atious. It is based on the polic/ a-ainst +ultiplicit/ of suits.20 !itis pendentia re>uires the concurrence of the follo$in- re>uisites: 4'5 identit/ of parties, or at least such parties as those representin- the sa+e interests in both actionsI 405 identit/ of ri-hts asserted and reliefs pra/ed for, the reliefs bein- founded on the sa+e factsI and 425 identit/ $ith respect to the t$o precedin- particulars in the t$o cases, such that an/ =ud-+ent that +a/ be rendered in the pendin- case, re-ardless of $hich part/ is successful, $ould a+ount to res =udicata in the other case. 22 3ll the ele+ents of litis pendentia are present in this case. 3s correctl/ found b/ both RT* and *3, an/ =ud-+ent rendered either in *ivil *ase No. 1261%& or *ivil *ase No. 1A6'120 on the principal issue re-ardinthe validit/ of the R M $ould a+ount to res =udicata on the other. *ontrar/ to petitioner9s sub+issions, a deter+ination b/ the RT* of $hether petitioner is entitled to the in=unctive relief in *ivil *ase No. 1A6'120 necessaril/ entails a rulin- on the validit/ of the R M raised therein b/ petitioner, $hich pronounce+ent +a/ run counter to the separate findin-s and conclusion in *ivil *ase No. 1261%& on the sa+e issue. In the sa+e +anner, the reliefs pra/ed for in *ivil *ase No. 1261%& for the cancellation of the R M and its re-istration cannot be -ranted $ithout the court first rulin- on the validit/ of the R MI if the court rules in the affir+ative, it $ould in turn defeat the in=unctive relief sou-ht in *ivil *ase No. 1A6'120. The fore-oin- scenario is precisel/ $hat the prohibition on foru+ shoppin- see,s to avoid. Hhat is trul/ i+portant to consider in deter+inin- $hether foru+ shoppin- e?ists or not is the ve?ation caused the courts and parties6liti-ants b/ a part/ $ho as,s different courts andFor ad+inistrative a-encies to rule on the sa+e or related causes andFor -rant the sa+e or substantiall/ the sa+e reliefs, in the process creatin- the possibilit/ of conflictin- decisions bein- rendered b/ the different fora upon the sa+e issues.2% The *ourt need not sa/ +ore. Petitioner9s bra;en and deliberate acts of repeated foru+ shoppin- in all sta-es of liti-ation are $ritten all over this case, as $ell as in the t$o other identical cases alread/ decided b/ this *ourt. No reversible error $as thus co++itted b/ the *3 $hen it affir+ed the RT*9s =oint order of dis+issal $ith pre=udice. H@ R FOR , the petitions for revie$ on certiorari in 7.R. Nos. '(&&%A and '(&&A' are both D NI D. The Decision dated Septe+ber '&, 01'1 and Resolution dated .anuar/ 2', 01'' of the *ourt of 3ppeals in *367.R. *V No. (1%'8 are hereb/ 3FFIRM D. Hith double costs a-ainst the petitioner. SO ORD R D. MART#N S. V#LLARAMA, )R. 3ssociate .ustice H *ON*"R: RENATO C. CORONA *hief .ustice *hairperson TERES#TA ). LEONARDO+DE CASTRO 3ssociate .ustice LUCAS P. BERSAM#N 3ssociate .ustice

ESTELA M. PERLAS+BERNABEL 3ssociate .ustice * RTIFI*3TION

Pursuant to Section '2, 3rticle VIII of the '(8) *onstitution, I certif/ that the conclusions in the above Decision had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt9s Division. RENATO C. CORONA *hief .ustice

!oot&ot,s
L

Desi-nated additional +e+ber per Special Order No. '01) dated Februar/ 02, 01'0.

'

Rollo 47.R. No. '(&&%A5, pp. A16)(. Penned b/ 3ssociate .ustice 3+/ *. !a;aro6.avier $ith 3ssociate .ustices Rebecca De 7uia6Salvador and Sesinando . Villon concurrin-.
0

Id. at 8'680.

#usiness na+e re-istered $ith the Depart+ent of Trade and Industr/ 4DTI5, rollo 47.R. No. '(&&A'5, pp. '&(6'A1.
%

Factual antecedents $ith respect to the !a-una Properties $ere culled fro+ this *ourt9s Decisions in 3sia "nited #an, v. 7oodland *o+pan/, Inc., 7.R. No. '(102', Dece+ber 8, 01'1, A2) S*R3 A(' and 3sia "nited #an, v. 7oodland *o+pan/, Inc., 7.R. No. '('288, March (, 01'', A%& S*R3 01&.
&

Rollo 47.R. No. '(&&%A5, pp. A8(6)1&. Penned b/ 3ssociate .ustice Rebecca De 7uia6Salvador $ith 3ssociate .ustices .apar #. Di+aa+pao and Si?to *. Marella, .r. concurrin-.
A

Id. at )1)6)'0. Penned b/ 3ssociate .ustice Rebecca De 7uia6Salvador $ith 3ssociate .ustices .apar #. Di+aa+pao and Nor+andie #. Pi;arro concurrin-.
)

Id. at ''18. Id. at 0%'60&A. Id. at 0&%60&&. Id. at '106'12. Id. at '1%6'1&. Id. at 202620&. Penned b/ .ud-e *esar D. Santa+aria. Id. at 0&8620'. 7.R. No. '221)(, 3u-ust (, 011&, %AA S*R3 '1). Rollo 47.R. No. '(&&%A5 pp. 2816%10. Id. at &006&0(. Id. at &2'6&20. Id. at A16)(.

'1

''

'0

'2

'%

'&

'A

')

'8

'(

Id. at 8'680. 7.R. No. '2'0%), .anuar/ 0&, '(((, 210 S*R3 )%. Madara v. *erello, 7.R. No. ')0%%(, 3u-ust 01, 0118, &A0 S*R3 A28. Rollo 47.R. No. '(&&%A5, p. )08.

01

0'

00

02

Mondra-on !eisure and Resorts *orporation v. "nited *oconut Planters #an,, 7.R. No. '&%'8), 3pril '%, 011%, %0) S*R3 &8&, &(1, citin- Saura v. Saura, .r., 2)0 Phil. 22), 2%( 4'(((5.
0%

Melo v. *ourt of 3ppeals, 7.R. No. '02A8A, Nove+ber 'A, '(((, 2'8 S*R3 (%, '11I !i-on v. *ourt of 3ppeals, 7.R. No. '0)A82, 3u-ust ), '((8, 0(% S*R3 )2, 88, citin- Hashin-ton Distillers, Inc. v. *ourt of 3ppeals, 7.R. No. ''8'&', 3u-ust 00, '((A, 0A1 S*R3 80', 82&.
0&

Villanueva v. *ourt of 3ppeals, 7.R. No. 'A2%22, 3u-ust 00, 01'', A&& S*R3 )1), )'%, citin7overn+ent Service Insurance S/ste+ 47SIS5 v. 7roup Mana-e+ent *orporation 47M*5, 7.R. Nos. 'A)111 Q 'A(()', .une 8, 01'', A&' S*R3 0)(, 2'2.
0A

3sia "nited #an, v. 7oodland *o+pan/, Inc. , 7.R. No. '('288, March (, 01'', A%& S*R3 01&, 0'A60').
0)

Id. at 0').

08

3sia "nited #an, v. 7oodland *o+pan/, Inc., 7.R. No. '(102', Dece+ber 8, 01'1, A2) S*R3 A(', A(A6A().
0(

Rollo 47.R. No. '(&&%A5, p. '1A. Id. at &0)6&08.

21

2'

Spouses Marasi-an v. *hevron Phils., Inc., 7.R. No. '8%1'&, Februar/ 8, 01'0, p. '0, citin#enedicto v. !acson, 7.R. No. '%'&18, Ma/ &, 01'1, A01 S*R3 80, (8.
20

Id., citin- Dot+atri? Tradin- v. !e-aspi, 7.R. No. '&&A00, October 0A, 011(, A1% S*R3 %2', %2A. Id.

22

2%

Municipalit/ of Ta-ui- v. *ourt of 3ppeals, 7.R. No. '%0A'(, Septe+ber '2, 011&, %A( S*R3 &88, &(&, citin- First Philippine International #an, v. *ourt of 3ppeals, 7.R. No. ''&8%(, .anuar/ 0%, '((A, 0&0 S*R3 0&(, 08( and #orro+eo v. Inter+ediate 3ppellate *ourt, 7.R. No. )2&(0, March '&, '((A, 0&& S*R3 )&, 8%.

Republic of the Philippines SUPREME COURT Manila T@IRD DIVISION G.R. No. 1-0962 )u&, 1-, 2011

TOP MANAGEMENT PROGRAMS CORPORAT#ON, Petitioner, vs. LU#S !A)ARDO AND T"E REG#STER O! DEEDS O! LAS P#DAS C#T7, Respondents.

D V#LLARAMA, )R., J.:

*ISION

#efore us is a petition for revie$ on certiorari under Rule %& see,in- the reversal of the Decision' dated Ma/ 21, 011' and Resolution0 dated October 02, 011' of the *ourt of 3ppeals 4*35 in *367.R. *V No. A1)'0 $hich affir+ed the Order2 of the Re-ional Trial *ourt 4RT*5 of !as PiVas *it/, #ranch 0)& in *ivil *ase No. (%6&A% dis+issin- petitioner9s co+plaint for >uietin- of title and da+a-es a-ainst private respondent. The factual antecedents: On Dece+ber 2', '(A%, +ilio 7re-orio 47re-orio5 filed an application for re-istration of title over !ots ' to % of Plan Psu601%)8& situated at Ma-6asa$an- Man--a, !as PiVas, Ri;al, before the then *ourt of First Instance 4*FI5 of Ri;al, #ranch II 4!R* *ase No. N6&1&2, !R* Rec. No. N60)&025. On .anuar/ %, '(AA, said court issued an order declarin- as abandoned the reserved oppositions of .ose T. Velas>ue; and Pablo Velas>ue;. Thereafter, the case proceeded to trial. Mean$hile, on .ul/ 0(, '(A&, .ose T. Velas>ue; 4Velas>ue;5 filed an application for re-istration of title over si? lots deno+inated as !ots ) and ( of Psu68188A, 3p6&&28, and !ots ', ), ( and '' of Psu6&A11) 3+d., 3p6 '''2&, situated at 3l+an;a, !as PiVas, Ri;al, in !R* *ase No. N6&%'A, !R* Rec. No. N608)2&, before the sa+e court. On .anuar/ 2', '(AA, the *FI rendered a decision% in !R* *ase No. N6&1&2 declarin- 7re-orio to be the absolute o$ner of !ots ', 0, 2 and % described in Plan Psu601%)8&. On March (, '(AA, an order $as issued b/ said court for the issuance of the decree of re-istration, statin- that the .anuar/ 2', '(AA had beco+e final. On March 21, '(AA, the sa+e court pro+ul-ated a decision in !R* *ase No. N6&%'A ad=udicatin- !ots ', ), ( and '' of Psu6&A11)63+d, plan 3p6'''2&, and !ots ) and ( of Psu68188A 43p6&&285 to .ose T. Velas>ue;. On Ma/ 2, '(AA, said court ordered the issuance of a decree of re-istration in vie$ of the finalit/ of the March 21, '(AA decision. In the +eanti+e, on .ul/ 0&, '(AA, the !R3 called the attention of the Director of !ands re-ardin- the overlappin- of !ots ', ) and '' of Psu6&A11)63+d a$arded to Velas>ue;, $ith !ots ' to % of Psu601%)8& ad=udicated to 7re-orio, and re>uested that portions of these lots that are not in conflict be se-re-ated. On Septe+ber 'A, '(AA, the !R3 infor+ed the *FI that !ots ' and ) of Psu6&A11)63+d 43p6'''2&5 had been a+ended b/ the #ureau of !ands to e?clude therefro+ portions covered b/ !ot 0, Psu6A%8(%, Psu6(A(1%, and !ots ' to %, Psu601%)8& of 7re-orio.& On the basis of the !R3 report, Velas>ue; petitioned the *FI to set aside the a$ard earlier +ade in favor of 7re-orio in !R* *ase No. N6&12& on the -round of lac, of =urisdiction and to -ive due course to his application over the said lots in !R* *ase No. N6&%'A. On Nove+ber 02, '(AA, the *FI issued an Order in !R* *ase Nos. N6&1&2 and N6&%'A declarin- that the application of Velas>ue; be -iven due course insofar as !ots ' and ) of 3p6'''2& $hich are identical to !ots ' to %, Plan Psu601%)8&, and the .anuar/ 2', '(AA decision in !R* *ase No. N6&1&2 in favor of 7re-orio respectin- the sa+e lots as null and void.A On Dece+ber A, '(AA, Decree Nos. N6'''8A0 to N6'''8A& and the correspondin- certificates O*T Nos. &A)), &A)8, &A)( and &A81 $ere issued in favor of Velas>ue;. On .anuar/ ), '(A), 7re-orio appealed the Nove+ber 02, '(AA decision of the *FI to the *3 4*367.R. No. %1)2(6%16R5. On .ul/ 21, '()', the *3 rendered its Decision) reversin- the *FI, as follo$s: H@ R FOR , the order appealed fro+ is hereb/ reversed and, in lieu thereof, another is hereb/ rendered declarin- null and void the Decision of the *ourt of First Instance of Ri;al, dated March 21, '(AA, in !and Re-istration *ase No. N6&%'A, !R* Rec. No. N608)2&, insofar as it ad=udicates in favor of appellee .ose T. Velas>ue; !ots Nos. ' and ) of Plan 3p6''2'&I and directin- that the Order of March (, '(AA for the issuance of the decree in !and Re-istration *ase No. N6&1&2, !R* Rec. No. N60)&02, over !ots ', 0, 2 and % of Plan Psu601%)8&, in the na+e of appellant +ilio 7re-orio, be -iven due course. No costs.

IT IS SO ORD R D.8 Per entr/ of =ud-+ent issued b/ the *3, the above decision beca+e final and e?ecutor/ on Februar/ ', '()0.( It appears, ho$ever, that a petition for revie$ had been filed b/ Velas>ue; $ith this *ourt, doc,eted as 7.R. Nos. !62%02(6%1 4U.ose T. Velas>ue; v. +ilio 7re-orioU5, $hich $as -iven due course per Resolution dated March ), '()0 of the Second Division. ventuall/, this *ourt denied the petition under Resolution'1 dated Februar/ 8, '(8% statin- that: He have carefull/ scrutini;ed the ar-u+ents of the parties stated in their respective briefs as $ell as the reasons adduced b/ the *ourt of 3ppeals to support its decision sou-ht to be revie$ed and He have Resolved to R *ONSID R the resolution of March ), '()0, and enter instead another resolution D NJIN7 the petition for lac, of +erit $ith *OSTS a-ainst the petitioners.'' The above resolution beca+e final and e?ecutor/ on March 0, '(8% as per entr/ of =ud-+ent '0 issued b/ this *ourt. Prior to this ho$ever, on October 2', '()0, Decree No. N6'%'((1 over !ots ', 2 and % of Plan Psu6 01%)8& $ere issued b/ the !R3 and the correspondin- O*T No. (&8) in the na+e of 7re-orio, $as subse>uentl/ issued on Nove+ber 0', '()0.'2 !ots ', 2 and %, Plan Psu601%)8& covered b/ O*T No. (&8) also beca+e the sub=ect of *ivil *ase No. 'A()) of the *FI of Ri;al. 7re-orio sou-ht the annul+ent of the deed of sale over the said lots in favor of !uciana Para+i. The *FI dis+issed the co+plaint of 7re-orio in a decision rendered on Ma/ 8, '()%. 7re-orio appealed to the *3 4*367.R. No. &A1'&6R, entitled U +ilio 7re-orio v. Spouses !uciana and *orpus Para+i and the Re-ister of Deeds of Ri;alU5 $hich reversed the *FI. In its decision dated Februar/ ), '()8, the *3 declared the aforesaid deed of sale null and void, and ordered the cancellation of certificate of title 4No. 28%225 in the na+e of the Para+is and issuance of an O*T in favor of 7re-orio coverin- !ots ', 2 and %, Plan Pasu601%)8&. On Nove+ber 01, '()(, the court in the sa+e case issued an order declarin- the children 43na, Pa;, *ar+en, Re+edios and Rolando, all surna+ed 7re-orio5 of the deceased +ilio 7re-orio Uas his co+pulsor/ heirs to substitute the said plaintiff.U'% Pursuant to the said decision, O*T No. (&8) in the na+e of +ilio 7re-orio $as cancelled and a ne$ certificate of title, T*T No. S6('('' in favor of his heirs $as issued. '& In a Report dated Septe+ber '0, '(8%, the !R3 infor+ed the *FI in !R* *ase No. N6&%'A that co+pliance $ith the .ul/ 21, '()' *3 decision in *367.R. No. %1)2(6%16R ad=udicatin- !ots ', 2 and % of Plan Psu6 01%)8& in favor of 7re-orio $ill result in duplication of titles over the said properties. The report further stated: 0'. That based on the records of this *o++ission, !ots ', 2 and % of plan Psu601%)8& $ere alread/ covered b/ T*T No. S6('('' in the na+e of the @eirs of +ilio 7re-orio $ith several annotations of encu+brances ? ? ?I 00. That a+on- those encu+brances are the deeds of sale e?ecuted b/ the+ in favor of @er+inia 7al+an coverin- an undivided portion of aforesaid !ot ', and of verlita Talusan of the $hole !ots 2 and % deno+inated as ntr/ No. 0'1)(FS6()%0', and that the latter vendee . Talusan had alread/ ac>uireBdC T*T No. S6()%0' over said t$o lots in her na+e also $ith several annotation of encu+brances ? ? ?I 02. That as per our verification fro+ the Re-istr/ of Deeds of Ma,ati, correspondin- titles $ere issued in the na+e of ..T. Velas>ue; deno+inated as O*T Nos. &A)8, &A)), &A)( and &A81 ? ? ?I 0%. 3nd that these certificates of title $ere all cancelled and assi-ned in favor of ..V. Develop+ent *orporation as per ntr/ Nos. ((2))FT6'(&A1A, '(&A1&, '(&A1& and '(&1& all inscribed on .ul/ 0), '(A). H@ R FOR , these facts are respectfull/ brou-ht to the attention of this @onorable *ourt $ith the reco++endation: That Decree Nos. N6'''8A0 to N6'''8A& issued on Dece+ber A, '(AA over !ots ' to %, Psu601%)8&, in favor of .ose T. Velas>ue;, as $ell as e?istin- subse>uent titles e+anatin- fro+ the sa+e shall be declared null and void and ordered cancelled.'A

On 3pril (, '(8%, the heirs of +ilio 7re-orio filed an e?6parte +otion for e?ecution before the RT* of Pasi-, Metro Manila, #ranch '&0 in !R* *ase Nos. N6&1&2 and N6&%'A. On March 0', '(8A, the RT* of Pasi- issued the follo$in- Order'): *onsiderin- that the Resolution issued on Februar/ 8, '(8% b/ the Supre+e *ourt in 7.R. No. !62%02(6%1, entitled U.ose T. Velas>ue; vs. +ilio 7re-orioU, den/in- the petition for revie$ on certiorari of the =ud-+ent of the *ourt of 3ppeals in *367.R. No. %1)2(6%16R, had on March 0, '(8% beco+e final and e?ecutor/ in favor of +ilio 7re-orio, and considerin- further the reco++endation contained in the Report dated Septe+ber '0, '(8% of the 3ctin- *o++issioner of !and Re-istration thru Silverio 7. Pere;, *hief, Division of Ori-inal Re-istration, relative to !R* *ase No. N6&1&2, !R* Record No. N60)&02, $herein +ilio 7re-orio is the applicant and in !R* *ase No. N6&%'A, !R* Record No. N608)2&, $herein .ose T. Velas>ue; is the applicant, $hich report is hereb/ approved, the *ourt declares as null and void Decree Nos. N6'''8A0 to N6'''8A&, inclusive, issued on Dece+ber A, '(AA, coverin- !ots ', 0, 2 and %, Psu601%)8& in favor of .ose T. Velas>ue; in !R* *ase No. No. &%'A as $ell as all e?istin- subse>uent titles e+anatin- therefro+, and an/ and all encu+brances constituted a-ainst said !ots ', 0, 2 and %, Psu601%)8& and other acts of disposition affectin- the sa+e. H@ R FOR , the Re-ister of Deeds of Pasa/ *it/ is hereb/ directed to cancel Ori-inal *ertificates of Title Nos. &A)), &A)8, &A)( and &A81 issued in the na+e of .ose T. Velas>ue; and all titles and transactions e+anatin- therefro+ and $hich are annotated at the bac, of the said *ertificates of Title, and to issue, in lieu thereof, ne$ *ertificates of Title in the na+e of the @eirs of +ilio 7re-orio, after pa/in- the prescribed fees therefor, pursuant to the Order for issuance of a decree dated March (, '(AA in the !R* *ase No. N6&1&2, Record No. N60)&02. SO ORD R D.'8 On 3pril 0(, '(8A, T*T Nos. '1))0), '1))08 and '1))0( 4coverin- !ot '5'( $as issued b/ the Re-ister of Deeds of Pasa/ *it/ in the na+e of the @eirs of +ilio 7re-orio. Subse>uentl/, b/ virtue of a Partition 3-ree+ent $ith @er+inia 7al+an, the propert/ $as subdivided into t$o lots bet$een the heirs of 7re-orio 4!ot '63 consistin- of 01,111 s>. +s.5 and 7al+an 4!ot '6# consistin- of 0),&2A s>. +s.5. *onse>uentl/, T*T No. '1))0( $as cancelled and in lieu thereof T*T No. %A2& in the na+e of the heirs of 7re-orio and T*T No. %A2A in the na+e of @er+inia 7al+an, $ere issued b/ the Re-ister of Deeds of !as PiVas.01 "ndeniabl/, the duplication of titles over !ot ', Psu601%)8& $ith the issuance of T*T No. S6('('' 4transfer fro+ O*T No. (&8)5 and T*T No. '1))0( and its derivative title, T*T No. %A2&, both in the na+e of the sa+e o$ners, -ave rise to the present controvers/. The *lai+ of !uis Fa=ardo 4T*T No. 0)281, no$ T*T No. T62%(025 3s earlier +entioned, 7re-orio appealed the Nove+ber 02, '(AA *FI decision in !R* *ase Nos. N6&1&2 and N6&%'A a$ardin- !ots ' to % of Psu601%)8& in favor of Velas>ue;, doc,eted as *367.R. No. %1)2(6%16R. So+eti+e after this, he entered into an a-ree+ent $ith To+as Trinidad 4Trinidad5 and !uis Fa=ardo 4Fa=ardo5 entitled UNasunduan na +a/ Pa+bihiran- Napan-/arihan.U #/ virtue of this a-ree+ent, Fa=ardo $ould finance the cost of the liti-ation and in return he $ould be entitled to one6half of the sub=ect propert/ after deductint$ent/ per cent 401E5 of the total land area as attorne/9s fees for Trinidad if the appeal is successful. 3fter the *3 rendered a favorable rulin- on 7re-orio9s appeal, Fa=ardo and Trinidad filed *ivil *ase No. 2&21& before the RT* of Pasi-, #ranch 'A% to enforce their a-ree+ent $ith 7re-orio. On Ma/ 8, '(8A, said court rendered =ud-+ent in their favor, as follo$s: H@ R FOR , pre+ises considered, =ud-+ent is hereb/ rendered orderin- herein defendants: 4'5 to conve/ to 3tt/. To+as Trinidad as honorariu+ for his services an area of '%,A8% s>.+. $hich is t$ent/ percent 401E5 of )0,%0% s>.+. the total area of !ots ', 0, 2 and %I

405 to conve/ to !uis Fa=ardo an area of 0(,2A( s>.+. representin- fift/ percent 4&1E5 of the re+ainder of the propert/ after deductin- the honorariu+ of 3tt/. Trinidad. 425 to pa/ the cost of suit and liti-ation e?penses. SO ORD R D.0' The heirs of 7re-orio appealed the above decision but their appeal $as declared abandoned and dis+issed b/ the *3. #/ virtue of an ntr/ of .ud-+ent issued b/ the *3 dated Dece+ber 8, '(88, Trinidad and Fa=ardo filed a +otion for the issuance of a $rit of e?ecution. @o$ever, the $rit issued re+ained unsatisfied as per the Return filed b/ the Sheriff on 3pril '1, '(8(. On 3u-ust '%, '(8(, the court appointed Deput/ Sheriff Marcial strellado to e?ecute the deed of conve/ance in favor of the plaintiffs. Deput/ Sheriff strellado e?ecuted the Officer9s Deed of *onve/ance 00 dated 3u-ust '&, '(8( in favor of Trinidad and Fa=ardo. Hhile the plaintiffs +oved for the approval of the subdivision plan needed for the transfer and issuance of separate titles as per decision, the Re-ister of Deeds of !as PiVas $rote a letter6repl/ 02 to the Deput/ Sheriff indicatin- that the deed of conve/ance and Order of the *ourt dated 3u-ust '%, '(8( entered as ntr/ No. A&12 and A&1% in their doc,et boo, could not be pursued because the sub=ect propert/ $as alread/ sold to other parties. In co+pliance $ith the order of the *FI, then Re-ister of Deeds of !as PiVas 3le=andro R. Villanueva sub+itted an official report0% statin- that T*T No. S6('('', still e?istin- in their records, should have been cancelled $hen T*T Nos. '1))0), '1))08 and '1))0( $ere issued in co+pliance $ith the Order dated March 0', '(8A of the RT* of Pasi-, and that such caused an ano+alous situation of havin- t$o separate and distinct certificates of title coverin- the sa+e parcels of land althou-h in the na+e of the sa+e re-istered o$ners. Villanueva opined that the issuance of T*T Nos. '1))0), '1))08 and '1))0( coverin- !ots ', 2 and % of Psu601%)8&, Uplaced T*T No. S6('('', as dee+ed cancelled, inas+uch as the latter certificate of title covers one and the sa+e parcels of landU and hence T*T No. S6('('' should not an/+ore be sub=ect of an/ transactions. The *FI initiall/ $ithdre$ its Order dated 3u-ust '%, '(8( but eventuall/ reinstated the sa+e and ordered the Re-ister of Deeds to annotate the Deed of *onve/ance at the bac, of T*T No. S6('('' $ithin 0% hours upon receipt of the order. Said directive $as reiterated b/ the *FI on .une ), '(('. On .une 0A, '((', the court authori;ed the subdivision of !ot ', Psu601%)8& and directed the Re-ister of Deeds to issue separate titles in favor of plaintiffs Trinidad and Fa=ardo. *onse>uentl/, T*T No. T60)2810& coverin- 0(,2A( s>. +s. portion of !ot ', Psu601%)8& in the na+e of !uis Fa=ardo $as issued on Dece+ber '0, '(('. On 3pril 0A, '((2, said T*T No. T60)281 $as cancelled per Order0A of the court dated March '2, '((0 and in lieu thereof, T*T No. T6 2%(020) $as issued, still in the na+e of !uis Fa=ardo and $ithout an/ of the encu+brances carried over fro+ T*T No. S6('(''. The *lai+ of Top Mana-e+ent Pro-ra+s *orporation 4T*T No. T68'0(5 On Septe+ber 0%, '((', herein petitioner Top Mana-e+ent Pro-ra+s *orporation sou-ht the annul+ent of the *FI orders in *ivil *ase No. 2&21& reinstatin- the 3u-ust '%, '(8( order and directin- the issuance of ne$ certificates of title in the na+e of Trinidad and Fa=ardo, on the -round of e?trinsic fraud. Petitioner clai+ed that b/ virtue of a Deed of 3bsolute Sale08 dated Nove+ber 0(, '(88 $hich $as notari;ed on .anuar/ (, '(8(, the heirs of 7re-orio sold to it a parcel of land $ith an area of 01,111 s>. +s., located at !as PiVas and identified as !ot '63 Psd60(21)A, bein- a portion of !ot ', Psu601%)8& covered b/ T*T No. T6%A2&, and that on Februar/ 01, '(8(, T*T No. T68'0(0( coverin- the said propert/ $as issued in its na+e. On Nove+ber 08, '((', the *3 rendered its decision dis+issin- the petition for annul+ent 4*367.R. SP No. 0A'115. It held that there e?isted no e?trinsic fraud $hich $ould =ustif/ the annul+ent of the >uestioned orders. Petitioner sou-ht the reversal of the *3 rulin- before this *ourt via a petition for certiorari. #/ Decision 21 dated Ma/ 08, '((2, this *ourt dis+issed the petition and affir+ed the *3 =ud-+ent. On the issue raised b/ petitioner as to $hether the *3 erred in holdin- that petitioner9s clai+ of title to !ot '63 should be served as third6part/ clai+ on the Deput/ Sheriff $ho e?ecuted the Deed of *onve/ance and caused its re-istration, or to vindicate

the clai+ to the propert/ throu-h a separate independent action, the *ourt refrained fro+ discussin- the sa+e since its resolution is inconse>uential and $ould not alter in an/ $a/ the outco+e of the petition. 2' *ivil *ase No. (%6&A% Thus, on Februar/ '1, '((%, petitioner filed before the RT* of Ma,ati *ivil *ase No. (%6&A% for Kuietin- of Title Hith Da+a-es. Petitioner alle-ed that the issuance of T*T No. T60)281 in the na+e of Fa=ardo 66 $ho obtained the sa+e fro+ the court in a case $ithout the ,no$led-e of petitioner $ho $as not a part/ therein 66 despite the e?istence of T*T No. T68'0( in its na+e constitutes a cloud upon the title of petitioner. Petitioner clai+ed that it ac>uired the sa+e propert/ in -ood faith and for value fro+ the ori-inal o$ners thereof. In his 3ns$er, private respondent Fa=ardo asserted that it is the title of petitioner $hich ori-inated fro+ a void title. O*T No. &A)8 fro+ $hich T*T No. %A2& $as derived, $as in effect declared null and void under this *ourt9s Resolution dated Februar/ 8, '(8% in 7.R. No. !62%02(6%1 $hich dis+issed petitioner9s appeal fro+ the .ul/ 21, '()' *3 Decision in *367.R. No. %1)2(6%16R. The *3 had nullified the *FI decision dated March 21, '(AA in !R* *ase No. N6&%'A insofar as it ad=udicates the sub=ect lots to Velas>ue;. 3fter petitioner9s for+al offer of evidence, private respondent filed a de+urrer to evidence, $hich the trial court -ranted in its Order20 dated .une 8, '((8, as follo$s: H@ R FOR , pre+ises considered, the case is hereb/ DISMISS D. No pronounce+ent as to costs. The Re-ister of Deeds of !as PiVas *it/ is hereb/ ordered to cancel T*T No. T68'0( in the na+e of plaintiff Top Mana-e+ent Pro-ra+s *orporation. SO ORD R D.22 Petitioner appealed to the *3 and on Ma/ 21, 011' said court rendered the assailed Decision 2% affir+in- the trial court9s dis+issal of petitioner9s co+plaint. The *3 held that petitioner cannot invo,e the rule that the title $hich bears the earlier date should prevail in vie$ of the infir+it/ in T*T No. '1))0( $hich on its face sho$s that its ori-in $as a title alread/ voided b/ the appellate court. Petitioner9s +otion for reconsideration $as li,e$ise denied b/ the *3. @ence, this petition alle-in- that the *3 erred in 4a5 declarin- T*T No. T68'0( as defective based on a +ere clerical error despite ac,no$led-+ent of its issuance resultin- fro+ a final deter+ination b/ this *ourt of the validit/ of +ilio 7re-orio9s clai+ over the sub=ect propert/, and 4b5 affir+in- the validit/ of private respondent9s T*T No. T60)281 despite the clear nullit/ of its +other title 4O*T No. (&8)5 $hich $as issued pendin- the appeal filed b/ Velas>ue; fro+ the decision of the appellate court in *367.R. No. %1)2(6%16R to this *ourt. Petitioner reiterates that an error $as +ade on the entries in T*T No. '1))0(. Instead of providin- that said title, as $ell as T*T Nos. '1))0) and '1))08 issued in the na+e of the @eirs of +ilio 7re-orio, e+anated fro+ the application for re-istration of +ilio 7re-orio in !R* *ase No. N6&1&2, !R* Rec. No. N60)&02 pursuant to the Order of the RT* in !R* *ase Nos. N6&%'A and N6&1&2, the Re-ister of Deeds of Pasa/ *it/ annotated on the face of said titles that these $ere derived fro+ .ose T. Velas>ue;9s O*T No. &A)8 under Decree No. N6'''8A0. Petitioner la+ents that deplorable situation of the le-iti+ate successor of the $inninliti-ant holdin- a title $ron-l/ annotated to have been derived fro+ the voided title of the loser in the case. The $innin- part/ $as then -iven a title re-istered as derived fro+ the title he fou-ht so hard to set aside. Moreover, there is no lo-ic in the appellate court9s conclusion that petitioner9s title traces its ori-in to a +other title alread/ voided, $hen in fact it is undisputed that T*T No. '1))0( $as issued pursuant to the March 0', '(8A order of the RT* of Pasi- in !R* *ase Nos. N6&%'A and N6&1&2 i+ple+entin- the final and e?ecutor/ Februar/ 8, '(8% decision of this *ourt in 7.R. Nos. !62%02(6%1 den/in- Velas>ue;9s appeal. Petitioner further clai+s that it is a bu/er in -ood faith $ho had no ,no$led-e of an/ defect in the title of his predecessor6in6interest. It paid the purchase price and ac>uired its title lon- before it discovered the ri-ht to co+pensation of private respondent throu-h the Officer9s Deed of *onve/ance.

Finall/, petitioner ar-ues that the issuance of O*T No. (&8) durin- the pendenc/ of Velas>ue;9s appeal to this *ourt renders said title null and void ab initio, citin- the rulin- in Director of !ands v. Re/es 2&. Since O*T No. (&8) is a nullit/, it follo$s that its derivative title, private respondent9s T*T No. T60)281, is li,e$ise a nullit/. Private respondent counters that petitioner9s assertion of the e?istence of clerical errors in the annotations of the entries in T*T No. 8'0( is, at the ver/ least, an ad+ission that said title is indeed defective. Obviousl/, petitioner +a/ not file a petition to >uiet its title and at the sa+e ti+e see,, in the sa+e proceedin-, the corrections of the entries therein. 3s to the issue of pre+ature issuance of O*T No. (&8), private respondent points out that the decision in !R* *ase No. N6&1&2 dated .anuar/ 2', '(AA as a conse>uence of $hich Decree of Re-istration No. '%'((1 $as issued, has alread/ attained finalit/ even before Velas>ue; sou-ht the annul+ent of the a$ard in favor of +ilio 7re-orio utili;in- the Report of the *o++issioner of !and Re-istration dated Septe+ber 'A, '(AA, to the effect, a+on- others, that a portion of the land a$arded in his favor overlapped $ith that ad=udicated to 7re-orio. @ence, the prohibition +entioned in the case of Director of !ands v. Re/es 4supra5 has no application to the case at bar, and therefore could not serve as basis to nullif/ O*T No. (&8), the +other title of T*T No. T6 0)281 in the na+e of private respondent. He den/ the petition. Kuietin- of title is a co++on la$ re+ed/ for the re+oval of an/ cloud, doubt, or uncertaint/ affectin- title to real propert/. In an action for >uietin- of title, the plaintiffs +ust sho$ not onl/ that there is a cloud or contrar/ interest over the sub=ect real propert/, but that the/ have a valid title to it.2A The court is tas,ed to deter+ine the respective ri-hts of the co+plainant and the other clai+ants, not onl/ to place thin-s in their proper places, and to +a,e the clai+ant, $ho has no ri-hts to said i++ovable, respect and not disturb the one so entitled, but also for the benefit of both, so that $hoever has the ri-ht $ill see ever/ cloud of doubt over the propert/ dissipated, and he can thereafter fearlessl/ introduce the i+prove+ents he +a/ desire, as $ell as use, and even abuse the propert/ as he dee+s fit.2) Petitioner anchors its clai+ over the disputed lot on T*T No. T68'0( issued on Februar/ 01, '(8( $hich is a transfer fro+ T*T No. '1))0( in the na+e of the @eirs of +ilio 7re-orio, fro+ $ho+ it bou-ht the propert/ in .anuar/ '(8(. On the other hand, private respondent ac>uired the sa+e land b/ virtue of the Officer9s Deed of *onve/ance dated 3u-ust '&, '(8( e?ecuted in their favor pursuant to the final =ud-+ent in *ivil *ase No. 2&21& of the RT* of Pasi-, #ranch 'A% and $as issued T*T No. T60)281 in his na+e on Dece+ber'0, '(('. In De-ollacion v. Re-ister of Deeds of *avite28 $e held that if t$o certificates of title purport to include the sa+e land, $hether $holl/ or partl/, the better approach is to trace the ori-inal certificates fro+ $hich the certificates of title $ere derived. *itin- our earlier rulin- in Matha/ v. *ourt of 3ppeals 2( $e declared: ? ? ? $here t$o transfer certificates of title have been issued on different dates, to t$o different persons, for the sa+e parcel of land even if both are presu+ed to be title holders in -ood faith, it does not necessaril/ follo$ that he $ho holds the earlier title should prevail. On the assu+ption that there $as re-ularit/ in the re-istration leadin- to the eventual issuance of sub=ect transfer certificates of title, the better approach is to trace the ori-inal certificates fro+ $hich the certificates of title in dispute $ere derived. Should there be onl/ one co++on ori-inal certificate of title, ? ? ?, the transfer certificate issued on an earlier date alon- the line +ust prevail, absent an/ ano+al/ or irre-ularit/ taintin- the process of re-istration. %1 Fro+ the recitals in the transfer certificates of title respectivel/ held b/ petitioner and private respondent, as $ell as the records of the !R3, there appears not =ust one but t$o different ori-inal certificates. T*T No. T6 8'0( on its face sho$s that the land covered $as ori-inall/ re-istered as O*T No. &A)8 under Decree No. N6 '''8A0 4Velas>ue;5, $hile T*T No. T60)281 indicates the ori-inal re-istration as O*T No. (&8) under Decree No. N6'%'((1 47re-orio5. #oth the !R* and *3 found T*T No. '1))0( and its derivative titles T*T Nos. %A2& and T68'0( as void and ine?istent since O*T No. &A)8 in the na+e of Velas>ue; had been nullified under the order for e?ecution of the final =ud-+ent in !R* *ase Nos. N6&1&2 and N6&%'A in $hich 7re-orio prevailed. *onse>uentl/, the lo$er courts upheld the title of private respondent $hich alone can be traced to the ori-inal certificate in the na+e of +ilio 7re-orio 4O*T No. (&)85.

Petitioner, ho$ever, asserts that the entries in his T*T contain errors and insists that T*T Nos. '1))0(, %A2& and T68'0( actuall/ e+anated fro+ the application for re-istration of +ilio 7re-orio in !R* *ase No. N6 &1&2, !R* Record No. N60)&02 pursuant to the Order of the Re-ional Trial *ourt in !R* *ase Nos. N6&1&2 and N6&%'A, as in fact T*T No. '1))0( $ere issued alon- $ith T*T Nos. '1))0) and '1))08 coverin- t$o other lots also in the na+e of the @eirs of +ilio 7re-orio b/ $a/ of i+ple+entin- the final =ud-+ent of said court in the case bet$een 7re-orio and Velas>ue;, as affir+ed b/ the *3 and this *ourt. He disa-ree. T*T No. '1))0( in the na+e of the heirs of +ilio 7re-orio issued on 3pril 0(, '(8A, on its face sho$ed bad-es of irre-ularit/ in its issuance. First, the technical description stated that it covers a portion of !ot ', plan Psu601%)8&, !R* *ase No. N6&%'A instead of N6&1&2. Second, the decree nu+ber and date of issuance, as $ell as O*T nu+ber clearl/ indicate that the ori-inal decree pertained to Velas>ue; and not 7re-orio. Third, the na+e of the re-istered o$ner in the ori-inal certificate is not Velas>ue; or 7re-orio but UDelta Motor *orp.U 3nd fourth, the certificate fro+ $hich T*T No. '1))0( $as supposedl/ a transfer should have been the O*T 4of 7re-orio5 and not those unfa+iliar T*T nu+bers indicated therein. The annotations re-ardin- the supposed ori-inal re-istration of T*T No. '1))0( read as follo$s: IT IS F"RT@ R * RTIFI D that said land $as ori-inall/ re-istered on the '0th da/ of Dece+ber in the /ear nineteen hundred and si?t/6si? in the Re-istration #oo, of the Office of the Re-ister of Deeds of Ri;al Volu+e 36A( pa-e )8 as Ori-inal *ertificate of Title No. &A)8 pursuant to Decree No. N6 '''8A0 issued in !.R.*. XXXXXXXXXXXXX Record No. N608)2& *ase No. N6&%'A in the na+e of Delta Motor *orp. . This certificate is a transfer fro+ Transfer *ertificate of Title No. 0))2)F3FT6'%&63 S68)00FT6%' $hich is cancelled b/ virtue hereof in so far as the above6described land is concerned.%' 4 +phasis supplied.5 The fore-oin- errors are not +ere t/po-raphical as petitioner clai+s, but serious discrepancies in the re-istration process. In fact, it is not far6fetched that the erroneous entries could have been intended to create the i+pression that T*T No. '1))0( $as a separate and distinct title fro+ the previousl/ issued T*T No. S6('('' even if the/ pertain to one and the sa+e lot ad=udicated to +ilio 7re-orio. Such conclusion is reinforced b/ the une?plained inaction or failure of the heirs of 7re-orio to rectif/ the alle-ed errors in their title before sellinthe propert/ to petitioner. The heirs of 7re-orio ,ne$ that their T*T No. S6('('' bore encu+brances in favor of third parties, notabl/ the notice of pendin- liti-ation 4!is Pendens5 involvin- the propert/ covered b/ said title before the *FI of Pasi-, Metro Manila in *ivil *ase No. 2&21&, $hich Trinidad caused to be annotated thereon. The issuance of a ne$ certificate $ith e?actl/ identical entries as that of T*T No. S6('('' 4as to its ori-inal re-istration5 $ould +ean that the aforesaid annotations had to be carried over to such ne$ certificate. Stran-el/, it is T*T No. '1))0( $hich RD 3le=andro R.Villanueva upheld in his Februar/ &, '(8( Report not$ithstandin- its later issuance and the -larin- errors in the entries of its ori-inal re-istration. It +ust be stressed that O*T No. &A)), &A)8, &A)( and &A81 and its derivative titles $ere ordered cancelled precisel/ because the/ $ere issued pursuant to Decree Nos. N6'''8A0 to N6'''8A& issued in !R* *ase No. N6&%'A in the na+e of Velas>ue;, $ho lost in the final =ud-+ent rendered in *367.R. No. %1)2(6%16R, and $hose clai+ to the lots covered thereb/ $ere declared null and void. !o-icall/, therefore, an/ ne$ certificate of title to be issued to the heirs of 7re-orio b/ virtue of the aforesaid final =ud-+ent ad=udicatin- the land to +ilio 7re-orio, could not possibl/ be a transfer or replace+ent of the aforesaid void O*Ts in the na+e of Velas>ue;. #ut even -rantin- that the sub=ect entries in T*T No. '1))0( $ere +ere clerical errors and assu+in- ar-uendo that said certificate $as issued to i+ple+ent the final =ud-+ent in *367.R. No. %1)2(6%16R, such e?ecution is tainted $ith infir+it/. The March 0', '(8A order issued b/ the RT* of Pasi- did not onl/ cancel O*T No. &A)8 4and other titles in the na+e of Velas>ue; coverin- the sa+e lots ad=udicated to 7re-orio5, it also ordered the issuance of ne$ certificates of title in the na+e of the heirs of +ilio 7re-orio despite havin- been infor+ed b/ the !R3 and the Re-ister of Deeds that there $as alread/ issued O*T No. (&8) over the sa+e lot in the na+e of +ilio 7re-orio, $hich $as replaced $ith T*T No. S6('('' in the na+e of the heirs of +ilio 7re-orio follo$in- the decision rendered b/ the appellate court 4*367.R. No. &A1'&6R5 in another case filed b/ 7re-orio a-ainst spouses Para+i 4*ivil *ase No. 'A())5. 3t this point, it serves $ell to e+phasi;e that upon finalit/ of =ud-+ent in land re-istration cases, the $inninpart/ does not file a +otion for e?ecution as in ordinar/ civil actions. Instead, he files a petition $ith the land

re-istration court for the issuance of an order directin- the !and Re-istration 3uthorit/ to issue a decree of re-istration, a cop/ of $hich is then sent to the Re-ister of Deeds for inscription in the re-istration boo,, and issuance of the ori-inal certificate of title.%0 The !R* upon the finalit/ of the =ud-+ent ad=udicatin- the land to an applicant shall, follo$in- the prescribed procedure, +erel/ issues an order for the issuance of a decree of re-istration and the correspondin- certificate of title in the na+e of such applicant. %2 In this case, the RT* of Pasi-, co-ni;ant of a previous decree of re-istration instead ordered the Re-ister of Deeds to issue ne$ certificates in favor of the heirs of 7re-orio, erroneousl/ declarin- that such certificates are in lieu of O*T Nos. &A)), &A)8, &A)( and &A81. Said court e?ceeded its authorit/ $hen it ordered the issuance of transfer certificates in the na+e of the heirs of 7re-orio despite the e?istence of T*T No. S6('('' alread/ issued to the+ coverin- the sae parcel of land. This caused the duplication of titles held b/ the heirs of 7re-orio over !ot '. Thus, $hile there $as onl/ one decree and ori-inal certificate issued to the co++on predecessor6in6 interest of petitioner and private respondent, +ilio 7re-orio, the latter9s heirs $ere able to secure t$o transfer certificates coverin- the sa+e land. Indeed it could not order the issuance of another O*T as it $ould result to duplication of titles or Udouble titlin-.U%% 3 land re-istration court has no =urisdiction to order the re-istration of land alread/ decreed in the na+e of another in an earlier land re-istration case. %& Issuance of another decree coverin- the sa+e land is therefore null and void.%A In the li-ht of the !R3 Report dated Septe+ber '0, '(8% statin- that co+pliance $ith the .ul/ 21, '()' final =ud-+ent rendered b/ the *3 $hich reversed the !R* decision and ad=udicated !ots ', 2 and % in favor of +ilio 7re-orio, $ould result in duplication of titles, it $as -rave error for the RT* of Pasi- to -rant the +otion for e?ecution filed b/ the heirs of +ilio 7re-orio $ho sou-ht, 66 in the -uise of i+ple+entin- the .ul/ 21, '()' *3 decision 66 the issuance of ne$ titles in their na+e not$ithstandin- the e?istence of O*T No. (&8) and T*T No. S6('(''. 7iven such vital infor+ation, there e?ists a co+pellin- need for the land re-istration court to ascertain the facts and Uaddress the li,elihood of duplication of titles ? ? ?, an eventualit/ that $ill under+ine the Torrens s/ste+ of land re-istration.U%) Petitioner nonetheless assails O*T No. (&8) as null and void, havin- been issued $hen the adverse decision of the appellate court in *367.R. No. %1)2(6%16R $as elevated b/ it to this *ourt. Follo$in- the doctrine in Director of !ands v. Re/es 4supra5, it is asserted that O*T No. (&8) should not have been issued because the decision in *367.R. No. %1)2(6%16R $as not /et final at the ti+e, pendin- resolution b/ this *ourt of the appeal b/ Velas>ue; 47.R. No. !62%02(6%15. In Director of !ands v. Re/es 4supra5, this *ourt laid do$n the rule that e?ecution pendin- appeal is not applicable in a land re-istration proceedin- and the certificate of title thereb/ issued is null and void. In that case, the assi-nee of the ori-inal applicant applied for a +otion for issuance of a decree of re-istration before the lo$er court pendin- the approval of the Record on 3ppeal. The +otion $as opposed b/ the 7overn+ent $hich appealed the lo$er court9s decision ad=udicatin- the land to the said assi-nee. He thus ruled: "nder the circu+stances of this case, the failure of the appellants to serve a cop/ of their Notice of 3ppeal to the counsel for the ad=udicatee Ro+an *. Ta+a/o is not fatal to the appeal because, ad+ittedl/, he $as served $ith a cop/ of the ori-inal, as $ell as the 3+ended Record on 3ppeal in both of $hich the Notice of 3ppeal is e+bodied. @ence, such failure cannot i+pair the ri-ht of appeal. Hhat is +ore, the appeal ta,en b/ the 7overn+ent $as fro+ the entire decision, $hich is not severable. Thus, the appeal affects the $hole decision. In an/ event, He rule that e?ecution pendin- appeal is not applicable in a land re-istration proceedin-. It is frau-ht $ith dan-erous conse>uences. Innocent purchasers +a/ be +isled into purchasin- real properties upon reliance on a =ud-+ent $hich +a/ be reversed on appeal. 3 Torrens title issued on the basis of a =ud-+ent that is not final is a nullit/, as it is violative of the e?plicit provisions of the !and Re-istration 3ct $hich re>uires that a decree shall be issued onl/ after the decision ad=udicatin- the title beco+es final and e?ecutor/, and it is on the basis of said decree that the Re-ister of Deeds concerned issues the correspondin- certificate of title. *onse>uentl/, the lo$er court acted $ithout =urisdiction or e?ceeded its =urisdiction in orderin- the issuance of a decree of re-istration despite the appeal ti+el/ ta,en fro+ the entire decision a >uo.%81auuphi1

O*T No. (&8) on its face sho$ed that its basis $as Decree No. N6'%'((1 issued on October 2', '()0 pursuant to the .anuar/ 2', '(AA decision of the *FI in !and Re-. *ase No. N6&1&2 and *3 decision dated .ul/ 21, '()'. Per records of this *ourt, ho$ever, Velas>ue; had filed a petition for revie$ of the *3 decision. #e that as it +a/, the pre+ature issuance of the decree in favor of +ilio 7re-orio and the correspondin- ori-inal certificate of title in his na+e did not affect his ac>uisition of title over the sub=ect land considerin- that Velas>ue;9s petition $as eventuall/ dis+issed. Neither can petitioner, b/ reason alone of defective issuance of O*T No. (&8), clai+ a ri-ht over the sub=ect land superior to that ac>uired b/ the private respondent. 3 readin- of the annotations of encu+brances at the bac, of T*T No. T60)281 $hich $ere carried over fro+ T*T No. S6('('' in the na+e of the @eirs of 7re-orio, $ould sho$ that durin- the pendenc/ of *ivil *ase No. 2&21& filed before the *FI of Ri;al b/ private respondent and Trinidad, the latter caused the annotation of a Notice of Lis *endens involvin- the sa+e properties of the defendants therein, the heirs of +ilio 7re-orio. The notice of lis pendens $as re-istered as ntr/ No. 0'2(8%( on T*T No. S6('(''. Lis pendens, $hich literall/ +eans pendin- suit, refers to the =urisdiction, po$er or control $hich a court ac>uires over propert/ involved in a suit, pendin- the continuance of the action, and until final =ud-+ent. Founded upon public polic/ and necessit/, lis pendens is intended to ,eep the properties in liti-ation $ithin the po$er of the court until the liti-ation is ter+inated, and to prevent the defeat of the =ud-+ent or decree b/ subse>uent alienation. Its notice is an announce+ent to the $hole $orld that a particular propert/ is in liti-ation and serves as a $arnin- that one $ho ac>uires an interest over said propert/ does so at his o$n ris, or that he -a+bles on the result of the liti-ation over said propert/. &1 The filin- of a notice of lis pendens has a t$o6fold effect: 4'5 to ,eep the sub=ect +atter of the liti-ation $ithin the po$er of the court until the entr/ of the final =ud-+ent to prevent the defeat of the final =ud-+ent b/ successive alienationsI and 405 to bind a purchaser, )ona fide or not, of the land sub=ect of the liti-ation to the =ud-+ent or decree that the court $ill pro+ul-ate subse>uentl/. &' Once a notice of lis pendens has been dul/ re-istered, an/ subse>uent transaction affectin- the land involved $ould have to be sub=ect to the outco+e of the liti-ation.&0 Petitioner bein- a +ere transferee at the ti+e the decision of the RT* of Pasi- in *ivil *ase No. 2&21& had beco+e final and e?ecutor/ on Dece+ber A, '(88, it is bound b/ the said =ud-+ent $hich ordered the heirs of +ilio 7re-orio to conve/ !ots ', 0, 2 Q %, Psu601%8)& in favor of private respondent and Trinidad. 3s such bu/er of one of the lots to be conve/ed to private respondent pursuant to the court9s decree $ith notice that said properties are in liti-ation, petitioner +erel/ stepped into the shoes of its vendors $ho lost in the case. Such vested ri-ht ac>uired b/ the private respondent under the final =ud-+ent in his favor +a/ not be defeated b/ the subse>uent issuance of another certificate of title to the heirs of 7re-orio respectin- the sa+e parcel of land. For it is $ell6settled that bein- an involuntar/ transaction, entr/ of the notice of lis pendens in the pri+ar/ entr/ boo, of the Re-ister of Deeds is sufficient to constitute re-istration and such entr/ is notice to all persons of such clai+.&2 UIt is to be noted that the notation of the lis pendens on the bac, of the o$ner9s duplicate is not +entioned for the purpose of constitutin- a constructive notice because usuall/ such o$ner9s duplicate certificate is presented for the purpose of the annotation later, and so+eti+es not at all until Bit isC ordered b/ the court.U &% Strictl/ spea,in-, the lis pendens annotation is not to be referred to Uas a part of the doctrine of noticeI the purchaser pendente lite is affected, not b/ notice, but because the la$ does not allo$ liti-atin- parties to -ive to others, pendin- the liti-ation, ri-hts to the propert/ in dispute so as to pre=udice the opposite part/. The doctrine rests upon public polic/, not notice.U&& Thus $e have held that one $ho bu/s land $here there is a pendin- notice of lis pendens cannot invo,e the ri-ht of a purchaser in -ood faithI neither can he have ac>uired better ri-hts than those of his predecessor in interest.&A In vie$ of the fore-oin-, $e hold that the *3 did not err in affir+in- the trial court9s order dis+issinpetitioner9s co+plaint for >uietin- of title and orderin- the cancellation of its T*T No. T68'0(. H@ R FOR , the petition is D NI D. The Decision dated Ma/ 21, 011' and Resolution dated October 02, 011' of the *ourt of 3ppeals in *367.R. *V No. A1)'0 are 3FFIRM D. Hith costs a-ainst the petitioner.

SO ORDERED. MART#N S. V#LLARAMA, )R. 3ssociate .ustice *E CONCURE CONC"#TA CARP#O MORALES 3ssociate .ustice *hairperson ARTURO D. BR#ON 3ssociate .ustice LUCAS P. BERSAM#N 3ssociate .ustice

MA. LOURDES P. A. SERENO 3ssociate .ustice 3TT ST3TION

I attest that the conclusions in the above Decision had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt9s Division. CONC"#TA CARP#O MORALES 3ssociate .ustice *hairperson, Third Division * RTIFI*3TION

Pursuant to Section '2, 3rticle VIII of the '(8) *onstitution and the Division *hairperson9s 3ttestation, I certif/ that the conclusions in the above Decision had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt9s Division. R N3TO *. *ORON3 *hief .ustice

!oot&ot,s
'

Rollo, pp. 2%6%(. Penned b/ 3ssociate .ustice Fer+in 3. Martin, .r., $ith 3ssociate .ustices Mercedes 7o;o6Dadole and 3licia !. Santos concurrin-.
0

Id. at &'6&0. Penned b/ 3ssociate .ustice Mercedes 7o;o6Dadole, $ith 3ssociate .ustices 7odardo 3. .acinto and 3licia !. Santos concurrin-.
2

Id. at &%6&(. Penned b/ .ud-e 3lfredo R. nri>ue;. Records 4Vol. 05, pp. %A16%A2. Id. at %)(. Id. at %)(6%81. Records 4Vol. '5, pp. 2(6%).

&

Id. at %). Id. at 2%. Id. at 2&62). Id. at 2). Records 4Vol. 05, p. %)A. Id. at %('. Id. at %8'6%80. Rollo, pp. %%6%&. Records 4Vol. 05, p. %82. Id. at %(&6%(A. Id. Id. at %8)6%88. Id. at %8) 4bac,5, %8(6%(1. Id. at 2)1. Records 4Vol. '5, pp. '%6'&. Records 4Vol. 05, pp. %8&6%8A. Id. at %(06%(%. Rollo, pp. A'6A0. Id. at A0. Id. at A2. Records 4Vol. '5, pp. )6''. Rollo, p. A1.

'1

''

'0

'2

'%

'&

'A

')

'8

'(

01

0'

00

02

0%

0&

0A

0)

08

0(

21

Top Mana-e+ent Pro-ra+s *orp. v. *ourt of 3ppeals, 7.R. No. '10((A, Ma/ 08, '((2, 000 S*R3 )A2.
2'

Id. at ))0. Rollo, pp. &%6&(. Id. at &(. Id. at 2%6%(.

20

22

2%

2&

Nos. !60)&(% Q 08'%%, Nove+ber 08, '()&, A8 S*R3 ')). Secu/a v. Vda. de Sel+a, 7.R. No. '2A10', Februar/ 00, 0111, 20A S*R3 0%%, 0%A. #aricuatro, .r. v. *ourt of 3ppeals, 7.R. No. '1&(10, Februar/ (, 0111, 20& S*R3 '2), '%A6'%). 7.R. No. 'A'%22, 3u-ust 0(, 011A, &11 S*R3 '18, ''&. 7.R. No. ''&)88, Septe+ber '), '((8, 0(& S*R3 &&A. Id. at &)8. Records 4Vol. 05, p. %8).

2A

2)

28

2(

%1

%'

%0

Republic v. @eirs of 3brille, No. !62(0%8, Ma/ ), '()A, )' S*R3 &), AAI Realt/ Sales nterprises, Inc. v. I3*, No. !6A)%&', Ma/ %, '(88, 'A' S*R3 &A, A'.
%2

S *. 21 of P.D. No. '&0( provides: Sec. 21. Hhen =ud-+ent beco+es finalI dut/ to cause issuance of decree. M? ? ? 3fter =ud-+ent has beco+e final and e?ecutor/, it shall devolve upon the court to forth$ith issue an order in accordance $ith Section 2( of this Decree to the *o++issioner for the issuance of the decree of re-istration and the correspondin- certificate of title in favor of the person ad=ud-ed entitled to re-istration.

%%

See @eirs of the !ate .ose De !u;uria-a v. Republic, 7.R. Nos. 'A88%8 Q 'A(1'(, .une 21, 011(, &(' S*R3 0((, 2'%.
%&

!aburada v. !and Re-istration 3uthorit/, 7.R. No. '1'28), March '', '((8, 08) S*R3 222, 2%2.

%A

See Metropolitan Hater$or,s and Se$era-e S/ste+s v. *ourt of 3ppeals, 7.R. No. '12&&8, Nove+ber '), '((0, 0'& S*R3 )82, )88.
%)

See @eirs of the !ate .ose De !u;uria-a v. Republic, supra note %%. Supra note 2& at '8&6'8A. Rollo, p. A0.

%8

%(

&1

3ssociated #an, v. Pronstroller, 7.R. No. '%8%%%, .ul/ '%, 0118, &&8 S*R3 ''2, '22, citinRo+ero v. *ourt of 3ppeals, 7.R. No. '%0%1A, Ma/ 'A, 011&, %&8 S*R3 %82, %(0.
&'

Id., citin- Ro+ero v. *ourt of 3ppeals, id. at %(06%(2 and @eirs of u-enio !ope;, Sr. v. nri>ue;, 7.R. No. '%A0A0, .anuar/ 0', 011&, %%( S*R3 ')2, '8A.
&0

Vicente v. 3vera, 7.R. No. 'A(()1, .anuar/ 01, 011(, &)A S*R3 A2%, A%2.

&2

Director of !ands v. Re/es, supra note 2& at '88I Caviles( +r. v. Bautista, 7.R. No. '10A%8, Nove+ber 0%, '(((, 2'( S*R3 0%, 20, citin- Levin v. Bass( et al., (' Phil. %'(, %2) 4'(&05.
&%

3. @. Noble=as and . @. Noble=as, Re-istration of !and Titles and Deeds, 011) d., pp. %2A6%2).

&&

Id. at %2), citin- 0 #ouvier9s !a$ Dictionar/ and *oncise nc/clopedia, p. 0122, S*R3 3nnotation on *ivil !a$, the Public !and 3ct and the Propert/ Re-istration Decree, '(82 d., pp. ''86''( >uoted in Tirado v. Sevilla, 7.R. No. 8%01', 3u-ust 2, '((1, '88 S*R3 20', 20A620).
&A

Ju v. *ourt of 3ppeals, 7.R. No. '1(1)8, Dece+ber 0&, '((&, 0&' S*R3 &1(, &'26&'%, citin*onstantino v. spiritu, No. !6020A8, .une 21, '()0, %& S*R3 &&), &A2 and Tanchoco v. 3>uino, No. !621A)1, Septe+ber '&, '(8), '&% S*R3 ', '&I see Philippine National #an, v. *ourt of 3ppeals, No. !62%%1%, .une 0&, '(81, (8 S*R3 01), 020.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION A.M. No. RT)+07+2060 )u:4 27, 2011 A!o/6,/:4 OCA #P# No. 06+29.8+RT)B NAT#ONAL PO*ER CORPORAT#ON, /,0/,s,&t,' 34 2ts P/,s2',&t C7R#L DEL CALLAR, *o+plainant, vs. )UDGE SANTOS B. AD#ONG, RTC, BRANC" 8, MARA*# C#T7, Respondent. D V#LLARAMA, )R., J.: #efore us is an ad+inistrative co+plaint' filed b/ the National Po$er *orporation 4NP*5 throu-h its president */ril *. Del *allar, char-in- respondent .ud-e Santos #. 3dion-, Presidin- .ud-e of the Re-ional Trial *ourt 4RT*5, #ranch 8, Mara$i *it/, $ith -ross i-norance of the la$, +anifest partialit/ and conduct unbeco+in- a +e+ber of the .udiciar/. The co+plaint arose in connection $ith the follo$in- cases: a. *ivil *ase No. '('8612 entitled UIbrahi+ 3bdo, et al. v. National Po$er *orporationU for Da+a-esI b. *ivil *ase No. '2006(& entitled UPacalna San--acala v. National Po$er *orporationU for Da+a-esI c. *ivil *ase No '2206(& entitled U3li Macara/a Mato v. National Po$er *orporationU for Da+a-esI d. *ivil *ase No. '2A)6(& entitled U*a+ar Dipatuan v. National Po$er *orporationU for Da+a-esI e. *ivil *ase No. '2A'6(& entitled U*asi+ra Sultan v. National Po$er *orporationU for Da+a-esI and f. *ivil *ase No. '2&&6(& entitled UMuala+ Di+atin-cal v. National Po$er *orporationU for Da+a-es. In *ivil *ase No. '('8612, plaintiffs Ibrahi+ 3bdo, et al. $ho st/led the+selves as a U-roup of far+ers, fisher+en, laborers, $or,ers, vendors, household +e+bers, and business+enU, collectivel/ sou-ht to hold NP* liable for da+a-es for operatin- seven @/droelectric Po$er plants alle-edl/ $ithout due re-ard to the health and safet/ of the plaintiffs and other residents of Mara$i *it/ and the province of !anao del Sur. The plaintiffs alle-ed that the/ and several others suffered ecolo-ical and econo+ic disasters brou-ht about b/ the operation of re-ulator/ da+s $hich affected the natural flo$ of !a,e !anao and destro/ed their far+s, properties, businesses and sources of livelihood. In addition to da+a-es, the plaintiffs also sou-ht the refund of +illions of *ISION

pesos fro+ the Purchase Po$er 3d=ust+ent 4PP35 collected b/ NP* fro+ its electric consu+ers throu-h the !anao Del Sur lectric *ooperative.0 On October 0', 0112, said plaintiffs filed an e?6parte Motion for the Release of PA%1,111,111 $orth of PP3 and other -eneration char-es. .ud-e 3dion- -ranted the +otion on Nove+ber (, 011%, but later set aside his order on Nove+ber 0%, 011&2 after NP* filed a +otion for reconsideration on the -round of lac, of notice and due process. .ud-e 3dion- then re>uired the parties to present their respective evidence on Dece+ber 8, 011&. Subse>uentl/, .ud-e 3dion- issued a Resolution on Februar/ 08, 011A, orderin- NP* to refund the a+ount ofP''%,111,111, representin- the Fuel *o+pensatin- *ost, Forei-n ?chan-e, and Incre+ental *ost *har-es collected fro+ 3pril '((' to Dece+ber '((&I to refund the a+ount of P')A,111,111, representin- the Fuel and Po$er *ost 3d=ust+ent and PP3 collected fro+ .anuar/ '((A to 3pril 0112I and to pa/ the a+ount ofP(),&2),111 as attorne/9s fees.% NP* sou-ht reconsideration of the order alle-in- that no pre6trial $as conducted and /et respondent =ud-e alread/ passed upon the +erits of the case. NP*9s +otion, ho$ever, $as denied b/ .ud-e 3dion-. .ud-e 3dion- reasoned that before issuin- the >uestioned resolution, full6blo$n hearin-s $ere conducted and NP* $as afforded all the opportunities to present its evidence and to participate activel/ in the hearin-s. @avin- done so, NP* has sub+itted itself to the court9s =urisdiction and could no lon-er clai+ that no pre6trial $as conducted. !ater, .ud-e 3dion- also directed Sheriff Otto 7o+a+pon- to i+ple+ent the Februar/ 08, 011A Resolution ratiocinatin- that the sa+e has alread/ beco+e final. & Thus, NP* filed the present ad+inistrative co+plaint, assertin- that the issuance of the Februar/ 08, 011A Resolution is contrar/ to and violative of the Rules of *ourt because said resolution $as issued b/ respondent =ud-e $ithout first conductin- the re>uisite pre6trial conference and despite the fact that no for+al offer of e?hibits $as +ade b/ plaintiffs in support of their alle-ations. 3lso, NP* co+plains of respondent =ud-e9s failure to la/ do$n the basis for -rantin- the plaintiff9s e?6parte +otion to release the PP3 refunds, and in a$ardin- the e?orbitant a+ount of P(),&2),111.11 as attorne/9s fees.A NP* further states that $hile it ad+its that =ud-es are not to be ad+inistrativel/ char-ed for acts co++itted in the e?ercise of their =udicial functions, respondent =ud-e had acted in violation of ele+entar/ rules that $as e>uivalent to intolerable and ine?cusable -ross i-norance of the la$. 3s re-ards *ivil *ase Nos. '2006(&, '2206(&, '2A)6(&, '2A'6(&, and '2&&6(&, said cases involve identical causes of action arisin- fro+ the sa+e facts and raisin- co++on issues. The plaintiffs in said cases sou-ht to hold NP* liable for da+a-es for its refusal to open the 3-us re-ulation da+s causin- perennial floodin- on their rice far+lands in '()(, '(8%, '(8A, '(8(, '((2, '((%, '((& and '((A. In all of these cases, respondent =ud-e rendered =ud-+ents in favor of the plaintiffs. !ater, respondent =ud-e also issued .oint Special Order) dated .anuar/ 0&, 011A -rantin- the .oint Motion for the Issuance of the Hrit of ?ecution Pendin3ppeal8 filed b/ the plaintiffs in *ivil *ase Nos. '2A)6(&, '2A'6(&, and '2&&6(& on .anuar/ 0, 011A.( 3 si+ilar Order'1 -rantin- e?ecution pendin- appeal $as li,e$ise issued in the t$o other cases, *ivil *ase Nos. '2006(& and '2206(&, on .anuar/ '), 011A. Nine da/s later, on .anuar/ 0A, 011A, a .oint Hrit of ?ecution'' for the t$o cases $as issued. NP* alle-es that .ud-e 3dion-9s act of -rantin- e?ecution pendin- appeal failed to confor+ strictl/ to the ri-id criteria outlined b/ =urisprudence for e?ecutions pendin- appeal. There $as no special reason for the issuance of the $rit, and the -rant of the $rit $as $hi+sical and clearl/ +anifested the partialit/ of respondent =ud-e. Further, .ud-e 3dion-9s evident bias and une?plained interest to e?ecute the decisions +anifested $hen he i++ediatel/ set for hearin- a +otion to cite in conte+pt a !and #an, personnel $ho alle-edl/ refused to co+pl/ $ith the notice of -arnish+ent despite the fact that the +otion lac,ed the re>uired notice of hearin- and the failure of the plaintiffs to co+pl/ $ith Rule )' of the Rules of *ourt.'0 In his *o++ent'2 dated .une ', 011A, respondent =ud-e raised the follo$in- in his defense. Hith re-ard to the lac, of pre6trial conference, respondent =ud-e asserts that he has set the case for hearin- on Dece+ber 8 and '&, 011&, and .anuar/ '0, '2, and 0), 011A. In all these hearin-s, the parties $ere allo$ed to present $hatever evidence the/ had to support their clai+s. @e also clai+s that the lac, of pre6trial $as never raised b/ NP* since the ti+e it filed its ans$er on Ma/ '&, 0112 up to the ti+e plaintiffs started presentin- their evidence on

Dece+ber 8, 011&. It $as onl/ on Februar/ '%, 011A that NP* belatedl/ filed a +anifestation callin- the court9s attention to the lac, of pre6trial, $ithout for+all/ as,in- or pra/in- for the settin- of one. In addition, the records sho$ that the plaintiffs filed their pre6trial brief $hile defendant NP* did not. Thus, he ar-ues that NP* is dee+ed to have $aived the holdin- of a pre6trial conference. Perforce, .ud-e 3dion- ar-ues that he should not be held ad+inistrativel/ liable for not conductin- pre6trial.'% On the char-e that he $as biased and has une?plained interest to e?ecute the Decisions in *ivil *ase Nos. '2006 (&, '2206(&, '2A)6(&, '2A'6(& and '2&&6(&, respondent =ud-e denied the alle-ations and e?plained that he co+plied $ith the re>uire+ents for allo$in- an e?ecution pendin- appeal. @e asserts there $as -ood reason for its issuance and there $as evidence substantiatin- the need to issue the $rit of e?ecution $hich $ere clearl/ spelled out and stated in the Special Orders dated .anuar/ '), 011A and .anuar/ 0&, 011A. Further, there is no reason to co+plain about the ban, personnel bein- held for conte+pt, as said ban, personnel $as not even ad=ud-ed -uilt/ of conte+pt.'& Respondent =ud-e adds that he should be absolved fro+ the char-es a-ainst hi+. @e ar-ues that +ere suspicion that a =ud-e is partial to one of the parties to the case is not enou-hI there should be evidence to support the char-e.'A 3lso, he asserts that a =ud-e cannot be held ad+inistrativel/ liable for errors in the appreciation of evidence unless the errors are -ross or +ade in bad faith.') Hhen such errors of =ud-+ent are co++itted, co+plainants +a/ avail the+selves of the re+ed/ of appeal or certiorari and not the filin- of ad+inistrative char-es a-ainst the =ud-e $ho rendered the challen-ed decision. On October 0, 011), this *ourt referred the present co+plaint to the *ourt of 3ppeals, *a-a/an De Oro *it/, for investi-ation, report and reco++endation. Pursuant to the Rules of *ourt, no$ retired 3ssociate .ustice Ruben *. 3/son, to $ho+ this case $as assi-ned, sent notices to the parties infor+in- the+ of the schedule of investi-ation and hearin-s. The case $as heard for five da/s, fro+ Ma/ 0& to 0(, 011(, and the parties $ere re>uired to present oral, as $ell as docu+entar/ evidence in support of their respective alle-ations and counter6 alle-ations. On .ul/ '1, 011(, .ustice 3/son sub+itted his report findin- respondent =ud-e ad+inistrativel/ liable. .ustice 3/son did not delve into the correctness of the Resolution dated Februar/ 08, 011A, -rantin- the refund of +illions of pesos representin- the PP3 char-es, as the resolution is no$ the sub=ect of an appeal $ith this *ourt, doc,eted as 7.R. No. '))088 entitled, Ibrahi+ 3bdo, et al. v. *ourt of 3ppeals and National Po$er *orporation. Neither did he delve into the +erits of all the other cases fro+ $hich the ad+inistrative cases filed b/ NP* a-ainst .ud-e 3dion- arose, for the reason that the proper venue for their revie$ $ould be throu-h the usual =udicial process of revie$ b/ appellate courts.'8 The Investi-atin- .ustice also noted the $ell6entrenched rule that a =ud-e +a/ not be held ad+inistrativel/ liable for ever/ erroneous decision he renders, for no person called upon to deter+ine the facts or interpret the la$ in the ad+inistration of =ustice can be infallible. @o$ever, he also noted that there is a pro+inent e?ception to the rule, that is, $hen the la$ is so ele+entar/ that not to ,no$ it constitutes -ross i-norance of the la$. '( In said cases, a =ud-e co++ittin- such error +a/ face ad+inistrative sanctions. Specificall/, .ustice 3/son noted that in *ivil *ase No. '('8612, .ud-e 3dion- failed to conduct a pre6trial conference and erred in conductin- the series of hearin-s in the case $ithout deter+inin- the e?istence of necessar/ pre6conditions before the court could ta,e co-ni;ance of the case. Records revealed that .ud-e 3dion- failed to resolve 4'5 the issue on the insufficienc/ of the co+plaint as a class suitI 405 the issue of nonpa/+ent of doc,et fees necessar/ to vest the court $ith =urisdiction over the caseI 425 the issue on foru+6 shoppin- alle-edl/ co++itted b/ therein plaintiffsI and 4%5 the >uestion re-ardin- the alle-ed failure of therein plaintiffs to state $ith particularit/ their respective residences. .ustice 3/son noted that $ithout a proper resolution of these threshold =urisdictional >uestions, an/ decision in the case is pre+ature and $ithout factual and le-al basis. In other $ords, the court $ould onl/ be en-a-ed in a useless e?ercise and $ould +erel/ be $astin- the ti+e and resources of the parties.01 Further, the Investi-atin- .ustice stressed that the conduct of a pre6trial is +andator/. @e e?plained that pre6trial is a procedural device $hereb/ the court is called upon to co+pel the parties and their la$/ers to appear before it and ne-otiate an a+icable settle+ent or other$ise +a,e a for+al state+ent and e+bod/ in a sin-le docu+ent the issues of fact and la$ involved in the action. Respondent =ud-e asserts that NP* onl/ called the attention of the court in passin- in one of its hearin-s held so+eti+e in Dece+ber 8, 011& and .anuar/ 0), 011A. .ud-e

3dion- alle-es that he then advised NP* to file the appropriate pleadin-, but it $as onl/ after the case $as ter+inated that NP* +ade a +anifestation on the lac, of pre6trial. .ud-e 3dion- adds that the conduct of a pre6 trial conference $ould have been a +ere superfluit/, and clai+s that the absence of pre6trial did not cause substantial pre=udice or in=ur/ to the parties as the purpose of e?peditin- the proceedin-s has been attained. @o$ever, .ustice 3/son opined that under the circu+stances, .ud-e 3dion- should have scheduled the case for pre6trial as he $as alread/ a$are of the procedural defect. @is act of not +indin- the settin- of pre6trial, $hen he had ever/ opportunit/ and reasonable ti+e to do so, can be characteri;ed as ne-li-ent and i+prudent, accordin- to .ustice 3/son. .ustice 3/son added that respondent =ud-e apparentl/ failed to co+pl/ $ith the rules and failed to e?ercise the re>uired initiative to set the case for pre6trial. *onsiderin- .ud-e 3dion-9s lon/ears of service, a total of thirt/6nine 42(5 /ears in the .udiciar/, +ore than an/one else, he should be presu+ed to be conversant $ith the la$ and the rules. The la$ involved in this case bein- ele+entar/, failure to consider it or to act as if he does not ,no$ it, constitutes -ross i-norance of the la$. .ustice 3/son said, ? ? ? Indeed, $hen the inefficienc/ sprin-s fro+ a failure to consider so basic and ele+ental a rule, a la$ or a principle in the dischar-e of his duties, a =ud-e is either too inco+petent and undeservin- of the position and the title he holds or is too vicious that the oversi-ht or o+ission $as deliberatel/ done in bad faith and in -rave abuse of =udicial authorit/.0' 3s to the -rantin- of the +otions for e?ecution pendin- appeal, .ustice 3/son pointed out that respondent =ud-e -ave fli+s/ and unsupported reasons to support his order to issue the $rit of e?ecution pendin- appeal. In *ivil *ase No. '2A)6(&, respondent =ud-e -ranted the e?ecution pendin- appeal on the -round that the plaintiff therein suffered a stro,e and alle-edl/ needed to under-o an operation costin- +illions of pesos. @o$ever, said alle-ations $ere based onl/ on the self6servin- testi+on/ of the plaintiff9s sister $hose testi+on/ $as uncorroborated b/ an/ other evidence. In *ivil *ase Nos. '2A'6(& and '2&&6(&, .ud-e 3dion- -ranted the +otion for e?ecution pendin- appeal based on the testi+on/ of the plaintiff $ho testified on his +edical condition as stated in his +edical certificate. Said +edical certificate, ho$ever, $as never verified b/ the doctor $ho alle-edl/ issued it. @ence, it $as unreliable and $as +erel/ hearsa/ evidence. Mean$hile, in *ivil *ase No. '2006(&, the +otion for e?ecution pendin- appeal $as -ranted based on the plaintiff9s clai+ that he is -ettin- old and needed +one/ to support his fa+il/ of four $ives and t$ent/6nine 40(5 children. #ut the plaintiff9s alle-ation $as not corroborated b/ an/ co+petent evidence. In all these cases, respondent =ud-e found =ustification that the financial conditions of the plaintiffs $arranted the issuance of the $rit of e?ecution pendin- appeal. .ustice 3/son, ho$ever, opined that $hile the po$er to -rant or den/ i++ediate or advance e?ecution is addressed to the sound discretion of the court, it is re>uired that -ood reason e?ists for -rantin- e?ecution pendin- appeal as provided under Section 0,00 Rule 2( of the Rules of *ourt. 3bsent an/ such -ood reason, the special order of e?ecution +ust be struc, do$n for havinbeen issued $ith -rave abuse of discretion. Standin- alone, the alle-ed dire financial distress of the plaintiffs in *ivil *ase Nos. '('8612, '2006(&, '2206 (&, '2A)6(&, '2A'6(&, '2&&6(& cannot be ta,en as U-ood reasonU for the i++ediate e?ecution of respondent =ud-e9s decisions, accordin- to .ustice 3/son. .ustice 3/son opined that indeed, $hen respondent =ud-e acted hastil/ in -rantin- the e?ecution of his Decision pendin- appeal, his actuation did not indicate ;eal to his dut/ but a clear disservice to the cause of =ustice. Indubitabl/, respondent =ud-e sho$ed poor =ud-+ent and -ross i-norance of basic le-al principles, added .ustice 3/son.1avvphi1 3fter careful revie$ of the records of this case, $e find the above observations and findin-s of the Investi-atin.ustice $ell ta,en. .ud-e 3dion- failed to conduct a pre6trial conference in *ivil *ase No. '('8612 contrar/ to ele+entar/ rules of procedure $hich he should have ,no$n all too $ell considerin- his lon- /ears of service in the bench. The +andator/ character of pre6trial is e+bodied in 3d+inistrative *ircular No. 26((02 dated .anuar/ '&, '(((, and found its $a/ in Section 0,0% Rule '8 of the Rules of *ourt, $hich i+poses a dut/ upon the plaintiff to pro+ptl/ +ove e? parte that the case be set for pre6trial. To further i+ple+ent the pre6trial -uidelines, this directive $as reiterated in 3d+inistrative Matter No. 126'61(6S*0& entitled U,uidelines to )e #)served )' rial Court +udges

and Clerks of Court in the Conduct of *re- rial and -se of .eposition-.iscover' Measures/ $hich reco-ni;ed the i+portance of pre6trial and the deposition6discover/ +easures as vital co+ponents of case +ana-e+ent in trial courts.0A To further sho$ that the *ourt is serious in i+ple+entin- the rules on pre6trial, in 3lviola v. 3velino0) the *ourt i+posed the penalt/ of suspension on a =ud-e $ho +erel/ failed to issue a pre6trial order $ithin ten 4'15 da/s after the ter+ination of the pre6trial conference as +andated b/ Para-raph 8,08 Title I 435 of 3.M. No. 126'61(6 S*. @ere, respondent =ud-e failed to conduct the pre6trial conference itself. It is ele+entar/ and plain that the holdin- of such a pre6trial conference is +andator/ and failure to do so is ine?cusable. Hhen the la$ or procedure is so ele+entar/, such as the provisions of the Rules of *ourt, not to ,no$ it or to act as if one does not ,no$ it constitutes -ross i-norance of the la$.0( Such i-norance of a basic rule in court procedure, as failinto conduct pre6trial, sadl/ a+ounts to -ross i-norance and $arrants a correspondin- penalt/. 3s to the alle-ations of poor =ud-+ent and -ross i-norance of basic le-al principles in -rantin- the +otions for e?ecution pendin- appeal for fli+s/ and unsupported reasons, $e find that the particular reasons relied upon b/ respondent =ud-e for issuin- the $rit of e?ecution pendin- appeal are so unreliabl/ $ea, and feeble that it hi-hli-hts the lac, of ,no$led-e of respondent =ud-e $ith re-ard to the proper appreciation of ar-u+ents. In Florendo v. Para+ount Insurance *orp.,21 the Supre+e *ourt held: ? ? ? U7ood reasons,U it has been held, consist of co+pellin- circu+stances that =ustif/ i++ediate e?ecution lest the =ud-+ent beco+es illusor/. The circu+stances +ust be superior, out$ei-hin- the in=ur/ or da+a-es that +i-ht result should the losin- part/ secure a reversal of the =ud-+ent. !esser reasons $ould +a,e of e?ecution pendin- appeal, instead of an instru+ent of solicitude and =ustice, a tool of oppression and ine>uit/. U7ood reasonU as re>uired b/ Section 0, Rule 2( of the Rules of *ourt does not necessaril/ +ean unassailable and fla$less basis but at the ver/ least, it +ust be on solid footin-. Dire financial conditions of the plaintiffs supported b/ +ere self6servin- state+ents as U-ood reasonU for the issuance of a $rit of e?ecution pendinappeal does not stand on solid footin-. It does not even stand on its o$n. Section 8, Rule '%1 of the Rules of *ourt, as a+ended, classifies -ross i-norance of the la$ as a serious char-e and Section '' thereof penali;es it $ith an/ of the follo$in- sanctions: '. Dis+issal fro+ the service, forfeiture of all or part of the benefits as the *ourt +a/ deter+ine, and dis>ualification fro+ reinstate+ent or appoint+ent to an/ public office, includin- -overn+ent6o$ned or controlled corporations. *rovided( ho0ever( That the forfeiture of benefits shall in no case include accrued leave creditsI 0. Suspension fro+ office $ithout salar/ and other benefits for +ore than three 425 but not e?ceedinsi? 4A5 +onthsI or 2. 3 fine of +ore than P01,111B.11C but not e?ceedin- P%1,111.11.2' *onsiderin-, ho$ever, that in 3.M. No. RT.61%6'80A, this *ourt has alread/ dis+issed .ud-e 3dion-, the penalties of suspension fro+ office $ithout salar/ and dis+issal fro+ the service are no lon-er possible. @ence, the penalt/ of fine is +ore appropriate. H@ R FOR , the no$ dis+issed respondent .ud-e Santos #. 3dion- of the Re-ional Trial *ourt of Mara$i *it/, #ranch 8 is, for -ross i-norance of the la$, FIN D in the a+ount of P%1,111.11 to be deducted fro+ his retainedF$ithheld accrued leave credits. SO ORD R D. MART#N S. V#LLARAMA, )R. 3ssociate .ustice

H *ON*"R: RENATO C. CORONA *hief .ustice *hairperson TERES#TA ). LEONARDO+DE CASTRO 3ssociate .ustice LUCAS P. BERSAM#N 3ssociate .ustice

MAR#ANO C. DEL CAST#LLO 3ssociate .ustice

!oot&ot,s
'

Rollo, pp. '6'). Report of .ustice 3/son, rollo, p. &%2. Rollo, pp. 2A6%0. Report of .ustice 3/son, rollo, p. &%%. Id. Id. at &%&6&%A. Rollo, pp. (86'11. Id. at (06(). Report of .ustice 3/son, rollo, pp. &%A6&%). Rollo, pp. '1&6'1A. Id. at '1)6''1. Report of .ustice 3/son, rollo, pp. &%)6&%8. Rollo, pp. '226'%A. Id. at '2A6'2), '2(. Id. at '%06'%%. Id. at '%&, citin- #eltran v. 7arcia, No. !6218A8, Septe+ber 21, '()', %' S*R3 '&8.

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Id., citin- Ra+ire; v. *orpu;6Macando-, 3d+. Matter Nos. R62&'6RT., etc., Septe+ber 0A, '(8A, '%% S*R3 %A0.
'8

Report of .ustice 3/son, rollo, p. &&2. 3-caoili v. Ra+os, 3.M. No. MT.6(06A60&', Februar/ ), '((%, 00( S*R3 )1&, )'1.

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01

Report of .ustice 3/son, rollo, pp. &&%6&&&. Id. at &&(6&A1. Sec. 0. .iscretionar' e1ecution.M 4a5 21ecution of a 3udgment or final order pending appeal.MOn +otion of the prevailin- part/ $ith notice to the adverse part/ filed in the trial court $hile it has =urisdiction over the case and is in possession of either the ori-inal record or the record on appeal, as the case +a/ be, at the ti+e of the filin- of such +otion, said court +a/, in its discretion, order e?ecution of a =ud-+ent or final order even before the e?piration of the period to appeal. 3fter the trial court has lost =urisdiction, the +otion for e?ecution pendin- appeal +a/ be filed in the appellate court. Discretionar/ e?ecution +a/ onl/ issue upon -ood reasons to be stated in a special order after due hearin-. 4b5 21ecution of several( separate or partial 3udgments.M3 several, separate or partial =ud-+ent +a/ be e?ecuted under the sa+e ter+s and conditions as e?ecution of a =ud-+ent or final order pendin- appeal.

0'

00

02

Re: Pre6Trial 7uidelines. S *. 0. Nature and purpose. M The pre6trial is +andator/. The court shall consider: 4a5 The possibilit/ of an a+icable settle+ent or of a sub+ission to alternative +odes of dispute resolutionI 4b5 The si+plification of the issuesI 4c5 The necessit/ or desirabilit/ of a+end+ents to the pleadin-sI 4d5 The possibilit/ of obtainin- stipulations or ad+issions of facts and of docu+ents to avoid unnecessar/ proofI 4e5 The li+itation of the nu+ber of $itnessesI 4f5 The advisabilit/ of a preli+inar/ reference of issues to a co++issionerI 4-5 The propriet/ of renderin- =ud-+ent on the pleadin-s, or su++ar/ =ud-+ent, or of dis+issin- the action should a valid -round therefor be found to e?istI 4h5 The advisabilit/ or necessit/ of suspendin- the proceedin-sI and 4i5 Such other +atters as +a/ aid in the pro+pt disposition of the action.

0%

0&

ffective 3u-ust 'A, 011%. Report of .ustice 3/son, rollo, p. &&A. 3.M. No. MT.6P6186'A(), Februar/ 0(, 0118, &%) S*R3 'A1.

0A

0)

08

8. The =ud-e shall issue the re>uired Pre6Trial Order $ithin ten 4'15 da/s after the ter+ination of the pre6trial. Said Order shall bind the parties, li+it the trial to +atters not disposed of and control the course of the action durin- the trial. ? ? ? @o$ever, the *ourt +a/ opt to dictate the Pre6Trial Order in open court in the presence of the parties and their counsel and $ith the use of a co+puter, shall have the sa+e i++ediatel/ finali;ed and printed. Once finished, the parties andFor their counsel shall si-n the sa+e to +anifest their confor+it/ thereto.
0(

See Baculi v. Belen( 3.M. No. RT.61(60')A, 3pril 01, 011(, &8A S*R3 A(, )(.

21

7.R. No. 'A)()A, .anuar/ 01, 01'1, A'1 S*R3 2)), 28%628&, citin- Fle?o Manufacturin*orporation v. *olu+bus Foods, Inc., %(& Phil. 0&%, 0A1 4011&5 and @eirs of Macaban-,it San-,a/ v. National Po$er *orp., 7.R. No. '%'%%), Ma/ %, 011A, %8( S*R3 %1', %').
2'

Pancho v. 3-uirre, .r., 3.M. No. RT.61(60'(A, 3pril ), 01'1, A') S*R3 %8A, %8(.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 198983 )u&, 2., 2011

BANG O SENTRAL NG P#L#P#NAS, Petitioner, vs. OR#ENT COMMERC#AL BAN #NG CORPORAT#ON, )OSE C. GO, GEORGE C. GO, V#CENTE C. GO, GOTESCO PROPERT#ES, #NC., GO TONG ELECTR#CAL SUPPL7 #NC., EVER EMPOR#UM, #NC., EVER GOTESCO RESOURCES AND "OLD#NGS #NC., GOTESCO T7AN M#NG DEVELOPMENT #NC., EVERCREST CEBU GOL! CLUB AND RESORTS, #NC., NASUGBU RESORTS #NC., GMCC UN#TED DEVELOPMENT CORP., GULOD RESORT, #NC., O STAR, EVER PLA(A, #NC. AND EVER ! *TRI*3! MF7., IN*., Respondents. R V#LLARAMA, )R., J.: The present petition althou-h captioned as one for certiorari is hereb/ treated as a petition for revie$ on certiorari under Rule %&, $ith pra/er for issuance of te+porar/ restrainin- order and $rit of preli+inar/ in=unction. It see,s to annul and set aside the .une '', 011' Decision' of the *ourt of 3ppeals 4*35 in *367.R. SP No. A1&1(. The *3 nullified the $rits of preli+inar/ attach+ent issued b/ the Re-ional Trial *ourt 4RT*5 of Manila, #ranch '0 in *ivil *ase No. ((6(&((2 and ordered the dis+issal of the a+ended co+plaint as a-ainst so+e of the na+ed defendants. #riefl/, the facts as set forth in the *3 Decision: On Februar/ '2, '((8, herein respondent Orient *o++ercial #an,in- *orporation 4O*#*5 declared a ban, holida/ on account of its inabilit/ to pa/ all its obli-ations to depositors, creditors and petitioner Bangko "entral ng *ilipinas 4#SP5. On March '), '((8, O*#* filed a petition for rehabilitation $ith the Monetar/ #oard. The ban, $as placed under receivership and the Philippine Deposit Insurance *orporation 4PDI*5 $as desi-nated as Receiver. Pursuant to the Monetar/ #oard9s Resolution No. '%0), PDI* too, over all the assets, properties, obli-ations SO!"TION

and operations of O*#*. Respondent .ose *. 7o, the principal and bi--est stoc,holder of O*#*, $ith his affiliate co+panies 4respondent corporations5, challen-ed the said action of the PDI* before the RT* of Manila, #ranch %% 4*ivil *ase No. (86('0A&5. Said case $as dis+issed and the dis+issal $as appealed to the *3. Durin- the pendenc/ of *ivil *ase No. (86('0A&, the Monetar/ #oard adopted Resolution No. A10 dated Ma/ ), '((( directin- the Receiver to proceed $ith the li>uidation of O*#*. In .une, '(((, the PDI* instituted Special Proceedin- No. ((6(%208 before the RT* of Manila, #ranch &' entitled UIn Re: Petition for 3ssistance in the !i>uidation of Orient *o++ercial #an,in- *orporation, Philippine Deposit Insurance *orporation, PetitionerU. On Dece+ber '), '(((, petitioner filed in the RT* of Manila 4#ranch '05 a co+plaint for su+ of +one/ $ith preli+inar/ attach+ent 4*ivil *ase No. ((6(&((25 a-ainst the respondents see,in- to recover deficienc/ obli-ation o$ed b/ O*#* $hich then stood at P',0)2,(&(,1%0.() $ith interest at 8.8(% E per annu+, overdraft obli-ation ofP',108,111,111.11, attorne/9s fees and costs of suit. On .anuar/ '%, 0111, the RT* of Manila, #ranch '0 issued an Order 0 in *ivil *ase No. ((6(&((2 -rantinpetitioner9s +otion for preli+inar/ attach+ent. On .anuar/ '(, 0111, follo$in- the postin- b/ petitioner of P&1 +illion attach+ent bond issued b/ the 7overn+ent Service Insurance S/ste+ 47SIS5, the correspondin- $rit $as issued orderin- the Deput/ Sheriffs to attach the real and personal properties of respondents to the value of petitioner9s de+and in the a+ount of P0,21',(&',1%0.(), e?clusive of interests and costs, as securit/ for the said clai+.2 Respondents filed $ith the *3 a petition for certiorari >uestionin- the aforesaid orders 4*367.R. SP No. A1&1(5. The/ also filed a consolidated +otion to dis+iss *ivil *ase No. ((6(&((2, $hich the trial court denied. % On .une ', 011', respondents filed an "r-ent Motion to Resolve andFor to Issue a Te+porar/ Restrainin- Order or a Hrit of Preli+inar/ In=unction. On .une '', 011', the *3 rendered the assailed decision dissolvin- the $rit of attach+ent and orderin- the RT* to desist fro+ proceedin- $ith *ivil *ase No. ((6(&((2 as a-ainst the respondents e?cept .ose *. 7o, Vicente *. 7o and 7eor-e *. 7o. It appears, ho$ever, that a Manifestation $ith Motion to 3d+it 3ttached Opposition 4to the "r-ent Motion to Resolve and Issue a Te+porar/ RestraininOrder5&$as filed b/ petitioner on .une A, 011'. On .une 0), 011', petitioner filed a Ver/ "r-ent ManifestationA statin- that: 4'5 the .une '', 011' decision had to a$ait finalit/ as it $as rendered $ithout re>uirin- the petitioner to file its co++ent, and because the co+plaint $as dis+issed despite +assive evidence presented before the trial court on the participation of respondents in the co++ission of fraud a-ainst #SPI 405 of the total outstandin- a+ount of P0,21',(&(,1%0.() bein- collected b/ petitioner fro+ the respondents, onl/ P011 +illion $as -arnished and it is doubtful if the ta?pa/ers9 interest can be satisfied there bein- no assets that can be found in the na+e of respondents and no assets of O*#* $ere levied or -arnishedI and 425 petitioner had filed a Vi-orous Opposition before the trial court as the respondents are pre+aturel/ i+ple+entin- the *3 decision, even as the petitioner still can elevate the case to this *ourt. On .ul/ 0, 011', the *3 recalled its .une '', 011' decision and -ranted a ten6da/ period for petitioner to file its co++ent. The ponente li,e$ise inhibited hi+self fro+ the case. ) On .ul/ 2, 011', #SP filed the instant petition $ith the follo$in- pra/er: H@ R FOR , it is respectfull/ pra/ed that this @onorable *ourt: '. 7ive due course to this petition. 0. "pon its filin- and, before the application for the issuance of a $rit of preli+inar/ in=unction is heard, order the issuance of a te+porar/ restrainin- order i++ediatel/ restrainin- the respondents fro+ proceedin- in an/ +anner $ith the enforce+ent of the assailed decision BdatedC .une '', 011' in *36 7.R. SP No. A1&1( until this petition is resolved $ith finalit/.

2. 3fter hearin- the application, order the issuance of a $rit of preli+inar/ in=unction restrainin- the respondents fro+ proceedin- in an/ +anner $ith the enforce+ent of the assailed decision .une '', 011' in *367.R. SP No. A1&1( until the instant case shall have been ad=udicated on its +erits. %. 3fter hearin- the instant case on its +erits, order that the $rit of preli+inar/ in=unction be +ade per+anent, nullif/in- the assailed decision BdatedC .une '', 011' in *367.R. SP No. A1&1( $hich is sou-ht to be revie$ed and directin- the resu+ption of the proceedin-s in *ivil *ase No. ((6(&((2.8 Respondents +oved to dis+iss the petition on -rounds of foru+ shoppin- and sub+ission of a defective certificate of non6foru+ shoppin-. Subse>uentl/, petitioner filed an O+nibus Motion for clarification and for leave of court to ad+it co++ent on the +otion to dis+iss, to $hich the respondents filed their opposition. On Februar/ 00, 0110, respondents9 *o++ent $as filed and petitioner filed its Repl/ on .ul/ 0, 0110. On .anuar/ 2', 0112, respondents filed an "r-ent Motion to !ift, Kuash and Dissolve the Hrit of Preli+inar/ 3ttach+ent 3-ainst the Properties of the Respondents ?cept Orient *o++ercial #an,in- *orporation. Petitioner filed its co++ent on the said +otion on Ma/ &, 0112.( On .anuar/ &, 011%, petitioner filed a +anifestation infor+in- this *ourt that on Dece+ber 'A, 0112, the parties have a-reed to settle their differences and e?ecuted a *o+pro+ise 3-ree+ent, $hich $as approved b/ the RT* of Manila, #ranch '0 on Dece+ber 0(, 0112. 3ttached to the said +anifestation is the +otion to approve =ud-+ent based on co+pro+ise a-ree+ent and the trial court9s Order approvin- the sa+e.'1 "nder the *o+pro+ise 3-ree+ent, the parties a-reed to cause the dis+issal of nineteen 4'(5 pendin- civil cases in various courts, includin- the present case before this *ourt, *367.R. SP No. A1&1( and *ivil *ase No. (&6 (&((2, in consideration for the faithful co+pliance b/ the respondents of the a-reed ter+s and conditions of pa/+ent of the total deficienc/ obli-ation of O*#* to petitioner a+ountin- to T$o #illion Nine @undred Sevent/6Four Million Nine @undred Three Thousand Pesos 4P0,()%,(12,111.115. Said outstandin- indebtedness of O*#* is to be settled in the follo$in- +anner: 3. 3 do$npa/+ent shall be +ade b/ the defendants throu-h the D3*ION of certain real estate properties +ore particularl/ described in 3nne? U#U hereof. a i5 The parties shall e?ecute separate D DS OF D3*ION over the real estate properties described in 3nne? U#U upon the e?ecution of the 3-ree+entI a ii5 3ll *apital 7ains Ta? on the properties for D3*ION shall be pa/able b/ the defendants but Docu+entar/ Sta+p Ta?, Transfer Ta? and all re-istration fees on the D3*ION shall for the account of plaintiff. #. The balance re+ainin- after the D3*ION of the real estate properties shall be paid b/ the defendants $ithin a period of ten 4'15 /ears but e?tendible for another five 4&5 /ears provided that the defendants shall reli-iousl/ co+pl/ $ith the a+orti;ation schedule 43nne? U*U hereof5 for a continuous period of t$o 405 /ears fro+ date of first a+orti;ation. b i5 The fore-oin- outstandin- balance shall be char-ed interest at ('6da/ T6bill rate upon e?ecution of this *o+pro+ise 3-ree+ent repriced ever/ three 425 +onths for a period of '1 /ears and pa/able +onthl/ in arrears. *. 3dditional Properties for ?ecution c i5 To ensure pa/+ent of the +onthl/ a+orti;ations due under this *o+pro+ise 3-ree+ent, defendants ver *rest 7olf *lub Resort, Inc. and Me-a @ei-hts, Inc. have a-reed to have its real properties $ith i+prove+ents covered b/ T*T Nos. T6A8(A2, T6A8(A%, T6A8(AA and TDs 3RPN6336')102611&80 and 336')102611&8 shall be sub=ect of e?istin- $rit of attach+ent to secure the faithful pa/+ent of the outstandin- obli-ation herein +entioned, until such obli-ation shall have been full/ paid b/ defendants to plaintiff.

c ii5 That all the corporate approvals for the e?ecution of this *o+pro+ise 3-ree+ent b/ ver *rest 7olf *lub Resort, Inc. and Me-a @ei-hts, Inc. consistin- of stoc,holders resolution and #oard of Directors approval have alread/ been obtained at the ti+e of the e?ecution of this 3-ree+ent. c iii5 Failure on the part of the defendants to full/ settle their outstandin- obli-ations and to co+pl/ $ith an/ of the ter+s of this *o+pro+ise 3-ree+ent shall entitle the plaintiff to i++ediatel/ as, for a Hrit of ?ecution a-ainst all assets of the ver *rest 7olf *lub Resort, Inc. and Me-a @ei-hts, Inc. no$ or hereafter arisin- fro+ the si-nin- of this *o+pro+ise 3-ree+ent. ???? III. F"NDS "ND R 73RNIS@M NT III i5 The parties a-reed that the e?istin- funds under -arnish+ent $ith !and #an, of the Philippines and P*I6 >uitable #an, shall be sub=ect of the follo$in- disposition: 4a5 )&E of the total -arnished a+ounts shall be released to defendants net of rei+burse+ent for the e?penses incurred b/ plaintiff involvin- the prosecution of this case $ith RT*6Manila, #ranch '0 prior to the e?ecution date of this *o+pro+ise 3-ree+ent. 4b5 0&E of the total -arnished a+ounts shall be paid and applied to defendants9 a+orti;ations per 3nne? U*U. III ii5 Insofar as the -arnish+ents on the rentals and all other inco+e or revenues on the +alls o$ned and operated b/ the defendants, the sa+e shall continue to -uarantee the stipulated a+orti;ation due fro+ the defendants per the a+orti;ation schedule.'' 3 co+pro+ise a-ree+ent intended to resolve a +atter alread/ under liti-ation is a =udicial co+pro+ise. @avin=udicial +andate and entered as its deter+ination of the controvers/, such =udicial co+pro+ise has the force and effect of a =ud-+ent. It transcends its identit/ as a +ere contract bet$een the parties, as it beco+es a =ud-+ent that is sub=ect to e?ecution in accordance $ith the Rules of *ourt.'0 Hith the final settle+ent of the clai+s of petitioner a-ainst herein respondents, the issues raised in the present petition re-ardin- the propriet/ of the issuance of $rit of attach+ent b/ the trial court and the -rave abuse of discretion alle-edl/ co++itted b/ the appellate court in reversin- the orders of the trial court, have no$ beco+e +oot and acade+ic. U3 +oot and acade+ic case is one that ceases to present a =usticiable controvers/ b/ virtue of supervenin- events, so that a declaration thereon $ould be of no practical use or value.U'2 In such cases, there is no actual substantial relief to $hich petitioner $ould be entitled to and $hich $ould be ne-ated b/ the dis+issal of the petition.'% H@ R FOR , the petition is D NI D for bein- +oot and acade+ic. The case is hereb/ R M3ND D to the Re-ional Trial *ourt of Manila, #ranch '0 for continuation of proceedin-s to i+ple+ent the *o+pro+ise 3-ree+ent in *ivil *ase No. ((6(&((2 dated Dece+ber 00, 0112 approved b/ said court on Dece+ber 0(, 0112. No costs. SO ORDERED. MART#N S. V#LLARAMA, )R. 3ssociate .ustice H *ON*"R:

RENATO C. CORONA *hief .ustice *hairperson TERES#TA ). LEONARDO+DE CASTRO 3ssociate .ustice LUCAS P. BERSAM#N 3ssociate .ustice

MAR#ANO C. DEL CAST#LLO 3ssociate .ustice * RTIFI*3TION

Pursuant to Section '2, 3rticle VIII of the '(8) *onstitution, I certif/ that the conclusions in the above Resolution had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt9s Division. RENATO C. CORONA *hief .ustice

!oot&ot,s
'

Rollo 4Vol. I5, pp. )86''). Penned b/ 3ssociate .ustice #ienvenido !. Re/es $ith 3ssociate .ustices ubulo 7. Ver;ola and .ose !. Sabio, .r. concurrin-.

*3 rollo, pp. %'(6%0A. Penned b/ .ud-e 4no$ 3ssociate .ustice of the *ourt of 3ppeals5 Ros+ari D. *arandan-.
2

Id. at %0)6%0(. Id. at %))6%8(. Id. at &)&6&8&. Id. at A1'6A'%. Id. at A'86A00. Rollo 4Vol. I5, pp. A26A%. Id. at '1A16'1)','1826''12, ''&26'')8,'0'&6'02', '%226'%&2 and Rollo 4Vol. II5, pp. '%)(6'&1'. Rollo 4Vol. II5, pp. ')%&6')A' and '))(6')81. Id. at ')&%6')&& and ')&). RaVola v. RaVola, 7.R. No. '8&1(&, .ul/ 2', 011(, &(% S*R3 )88, )(%.

&

'1

''

'0

'2

See !acson v. M. !acson Develop+ent *o+pan/, Inc., 7.R. No. 'A88%1, Dece+ber 8, 01'1, p. '1, citin- Inte-rated #ar of the Philippines v. 3tien;a, 7.R. No. ')&0%', Februar/ 0%, 01'1, A'2 S*R3 &'1, &006&02.
'%

*huidian v. Sandi-anba/an, 7.R. Nos. '&A282 Q 'A1)02, .ul/ 2', 011A, %() S*R3 20), 2%%.

Republic of the Philippines SUPREME COURT Manila N #3N* G.R. No. 1.28-6 M%/51 8, 2011

!ERNANDO V. GON(ALE(, Petitioner, vs. COMM#SS#ON ON ELECT#ONS, RENO G. L#M, STEP"EN C. B#C"ARA %&' T"E SPEC#AL BOARD O! CANVASSERS 5o&st2tut,' 0,/ R,s. '%t,' )u:4 23, 2010 o= t1, Co662ss2o& o& E:,5t2o&s E& B%&5,Respondents. D V#LLARAMA, )R., J.: This is a petition for certiorari, prohibition and +anda+us under Rule A& in relation to Rule A% of the '(() Rules of *ivil Procedure, as a+ended, assailin- the Resolution' dated Ma/ 8, 01'1 of the *o++ission on lections 4*OM ! *5 Second Division and Resolution0 dated .ul/ 02, 01'1 of the *o++ission n #anc, in SP3 No. '161)% 4D*5. The facts are uncontroverted. Petitioner Fernando V. 7on;ale; and private respondent Reno 7. !i+ both filed certificates of candidac/ for the position of Representative of the 2rd con-ressional district of the Province of 3lba/ in the Ma/ '1, 01'1 elections. !i+ $as the incu+bent con-ress+an of the 2rd district $hile 7on;ale; $as for+er 7overnor of 3lba/, havin- been elected to said position in 011% but lost his re6election bid in 011). On March 21, 01'1, a Petition for Dis>ualification and *ancellation of *ertificate of *andidac/ 4*O*52 $as filed b/ Stephen #ichara BSP3 No. '161)% 4D*5C on the -round that 7on;ale; is a Spanish national, bein- the le-iti+ate child of a Spanish father and a Filipino +other, and that he failed to elect Philippine citi;enship upon reachin- the a-e of +a=orit/ in accordance $ith the provisions of *o++on$ealth 3ct 4*.3.5 No. A0&. It $as further alle-ed that 7on;ale;9s late re-istration of his certificate of birth $ith the *ivil Re-istr/ of !i-ao *it/ on .anuar/ '), 011A, even if acco+panied b/ an affidavit of election of Philippine citi;enship, $as not done $ithin a reasonable ti+e as it $as in fact re-istered %& /ears after 7on;ale; reached the a-e of +a=orit/ on Septe+ber '', '(A'. In his 3ns$er,% 7on;ale; denied havin- $illfull/ +ade false and +isleadin- state+ent in his *O* re-ardin- his citi;enship and pointed out that #ichara had filed the $ron- petition under Section A8 of the O+nibus lection *ode 4O *5 to >uestion his eli-ibilit/ as a candidate. 7on;ale; also ar-ued that the petition $hich should have been correctl/ filed under Section )8 of the O * $as filed out of ti+e. @e asserted that he is a Filipino citi;en as his 3lien *ertificate of Re-istration $as issued durin- his +inorit/. @o$ever, he too, an Oath of 3lle-iance to the Republic of the Philippines before the .ustice of the Peace in !i-ao, 3lba/ on his 0'st birthda/ on Septe+ber '', '(A'. Since then he had co+ported hi+self as a Filipino considerin- that he is +arried to a FilipinaI he is a re-istered voter $ho voted durin- electionsI he has been elected to various local positionsI he holds a Philippine passportI and +ost i+portantl/, he has established his life in the Philippines as a Filipino. 7on;ale; contended that he is dee+ed a natural6born Filipino citi;en under the '(8) *onstitution $hich includes in the definition of natural6born citi;ens UBtChose born before .anuar/ '), '()2, of Filipino +others, $ho elect Philippine citi;enship upon reachin- the a-e of +a=orit/.U On Ma/ 8, 01'1, the *OM ! *9s Second Division issued the assailed resolution $hich decreed: *ISION

H@ R FOR , pre+ises considered, $e resolve to, as $e do hereb/, 7R3NT this Petition. Respondent Fernando Valle=o 7on;ale; is hereb/ declared dis>ualified to be a candidate for the position of Me+ber of the @ouse of Representatives, 2rd District, Province of 3lba/, in the forthco+in- National and !ocal lections on Ma/ '1, 01'1. SO ORD R D.& Findin- the petition to be both a petition for dis>ualification and cancellation of *O*, the Second Division ruled that the sa+e $as filed on ti+e. On the election of Philippine citi;enship b/ 7on;ale;, it held that $hat 7on;ale; sub+itted is a +ere photocop/ of his oath of alle-iance $hich $as not dul/ certified b/ the National Statistics Office, and hence there $as no co+pliance $ith the re>uire+ent of filin- $ith the nearest civil re-istr/, the last act re>uired of a valid oath of alle-iance under *.3. No. A0&. Further, the Second Division found that in the late re-istration of 7on;ale;9s birth on .anuar/ '), 011A, he declared that he is a citi;en of the PhilippinesI this at best, $as his o$n conclusion, and at $orst, conflicts $ith his purported oath of alle-iance for it $ould have been a superfluit/ to e?press his choice of Philippine citi;enship b/ ta,in- the oath of alle-iance if he $as alread/ a Filipino citi;en. 3nd the fact that 7on;ale; attended for+al schoolin- in this countr/, $or,ed in private fir+s and in the -overn+ent service, should not ta,e the place of the strin-ent re>uire+ents of constitutional and statutor/ provisions on ac>uisition of Philippine citi;enship.A 7on;ale; thru counsel received a cop/ of the aforesaid resolution on Ma/ '', 01'1 at &:01 p.+.) On even date, !i+ petitioned the Provincial #oard of *anvassers 4P#O*5 to consider the votes cast for 7on;ale; as stra/ or not counted andFor suspend his procla+ation, citin- the Second Division9s Ma/ 8, 01'1 resolution dis>ualif/in7on;ale; as a candidate for the Ma/ '1, 01'1 elections.8 The P#O*, ho$ever, dis+issed the petition statinthat the period for filin- of a +otion for reconsideration of the *OM ! * resolution has not /et lapsed, and hence the sa+e is not /et final and e?ecutor/. ( !i+ appealed the P#O*9s dis+issal of his petition to the *OM ! * 4SP* No. '1611A5 but his appeal $as eventuall/ dis+issed after he filed a +otion to $ithdra$ the sa+e.'1 #ased on the results of the countin- and canvassin- of votes, 7on;ale; e+er-ed as the $inner havin- -arnered a total of (A,111 votes $hile !i+ ran,ed second $ith A8,)1' votes. On Ma/ '0, 01'1, the P#O* officiall/ proclai+ed 7on;ale; as the dul/ elected Representative of the 2rd district of 3lba/. 7on;ale; too, his oath of office on the sa+e da/. '' On Ma/ '2, 01'1, #ichara filed a Ver/ "r-ent Motion to Suspend the ffects of the Procla+ation of Fernando V. 7on;ale;.'0 On Ma/ '%, 01'1, 7on;ale; filed a +otion for reconsideration of the Ma/ 8, 01'1 resolution. 7on;ale; reiterated that the Second Division9s findin- that #ichara9s petition is both a petition for dis>ualification and to cancel *O* is not borne b/ the petition itself and contrar/ to Section A8 of the O * and *OM ! * Resolution No. 8A(A. 3ppl/in- Section )8 of the O * $hich is the proper petition based on alle-ed deliberate +isrepresentation and false state+ent in the *O*, 7on;ale; contended that #ichara9s petition $as filed out of ti+e. It $as further ar-ued that the subse>uent election, procla+ation and ta,in- of oath of office of 7on;ale; are events $arrantin- the dis+issal of SP3 No. '161)% 4D*5. Stressin- that the voice of the people +ust be respected in this case, 7on;ale; pointed out that his not bein- a Filipino $as never an issue in the previous elections $here he ran and $on 4!i-ao *it/ Ma/or for three ter+s and 7overnor of 3lba/ fro+ 011%6011)5. @e clai+ed that the petition filed b/ #ichara, $ho ran a-ainst 7on;ale;9s $ife, !inda Passi 7on;ale; 4for re6 election as !i-ao *it/ Ma/or5 in the recentl/ concluded elections $as indicative of harass+ent considerin- that a si+ilar petition for dis>ualification and cancellation of *O* $as also filed a-ainst his $ife b/ 3nna Marie *. #ichara, said to be a sister of the petitioner in SP3 No. '161)% 4D*5.'2 On Ma/ 00, 01'1, !i+ filed a Motion for !eave to Intervene as Petitioner statin- that bein- a candidate for the sa+e position, he has le-al interest in the success of the petition in SP3 No. '161)% 4D*5. '% In its Resolution dated .ul/ 02, 01'1, the *OM ! * n #anc denied the +otion for reconsideration and affir+ed its findin- that 7on;ale; failed to prove $ith sufficient evidence that he had full/ co+plied $ith the re>uire+ents for electin- Philippine citi;enship under *.3. No. A0&. It li,e$ise e+phasi;ed that the +otion for reconsideration filed b/ 7on;ale; $as pro for+a and hence it did not suspend the effects of the Ma/ 8, 01'1 resolution dis>ualif/in- hi+ as a candidate, confor+abl/ $ith Sections ' and %, Rule '( of the *OM ! * Rules of Procedure in relation to Section ) of *OM ! * Resolution No. 8A(A. Invo,in- its po$er to suspend and set aside the procla+ation of $innin- candidates pursuant to Section 'A of *OM ! * Resolution No. 8A)8

in relation to Section A of Republic 3ct 4R.3.5 No. AA%A,'& the *o++ission held that the procla+ation of 7on;ale; b/ the P#O* $as pre+ature and ille-al. Finall/, the +otion to intervene filed b/ !i+ $as found to be proper and $as accordin-l/ -ranted. The dispositive portion of the resolution reads: H@ R FOR , pre+ises considered, the *o++ission 4 n #anc5 R SO!V D to, as it does hereb/: '. 3NN"! the invalid procla+ation of the respondent Fernando V. 7on;ale; as the elected Me+ber of the @ouse of Representative as he is DISK"3!IFI D to run and be voted for the position of Me+ber of the @ouse of Representatives in the Ma/ '1, 01'1 electionsI 0. D NJ for utter lac, of +erit the Motion for Reconsideration of respondent F RN3NDO V. 7ON<3! <I and 2. 3FFIRM the Resolution of the Second Division declarin- respondent Fernando V. 7on;ale; DISK"3!IFI D to run and be voted for as such. %. I++ediatel/ *ONSTIT"T a Special Provincial #oard of *anvassers of 3lba/ $ho $ill PRO*!3IM R NO 7. !IM as the dul/ elected Me+ber of the @ouse of Representative of the Third District of 3lba/ for bein- the bona fide candidate $ho -arnered the hi-hest nu+ber of votes in the Ma/ '1, 01'1 elections. SO ORD R D.'A *o++issioner Rene V. Sar+iento dissented fro+ the +a=orit/ rulin- den/in- the +otion for reconsideration of 7on;ale;, statin- that the people of the 2rd District of 3lba/ has alread/ spo,en as to $ho is their choice of Representative in the !o$er @ouse of *on-ress and in case of doubt as to the >ualification of the $innincandidate, the doubt $ill be resolved in favor of the $ill of the people.') 3 separate opinion $as $ritten b/ *o++issioner 3r+ando *. Velasco statin- that the *OM ! * no lon-er has =urisdiction to decide on the +atter of the >ualifications of 7on;ale;, the $innin- candidate $ho had alread/ been proclai+ed, ta,en his oath and assu+ed the office as Representative of the 2rd District of 3lba/, for $hich reason the *OM ! *9s =urisdiction ends and that of the @ouse of Representatives lectoral Tribunal 4@R T5 be-ins. @e li,e$ise disa-reed $ith the +a=orit/9s conclusion that 7on;ale;9s procla+ation $as invalid considerin- that: 4'5 records are bereft of indication that the P#O* had been ordered to suspend the procla+ation of 7on;ale;I 405 the Ma/ 8, 01'1 Resolution dis>ualif/in- 7on;ale; had not /et beco+e final and e?ecutor/I 425 the date of said resolution $as not a previousl/ fi?ed date as re>uired b/ Section A of *OM ! * Resolution No. 8A(A, as the records do not sho$ that the parties have been infor+ed of said date of pro+ul-ation beforehandI and 4%5 the three6da/ period for the filin- of a +otion for reconsideration should be rec,oned fro+ the date of receipt b/ 7on;ale; of cop/ of the resolution $hich is Ma/ '', 01'1, hence the P#O* acted $ell $ithin its authorit/ in proclai+in- 7on;ale;. *o++issioner Velasco also disa-reed $ith the +a=orit/ rulin- that 7on;ale;9s +otion for reconsideration $as pro for+a, and +aintained that said +otion $as ti+el/ filed $hich effectivel/ suspended the e?ecution of the Ma/ 8, 01'1 Resolution. !astl/, he found the order to constitute a Special Provincial #oard of *anvassers for the purpose of proclai+in- intervenor !i+ $ithout basis. Since the Ma/ 8, 01'1 Resolution $as not /et final on election da/, the votes cast for 7on;ale; cannot be considered stra/. #esides, a +inorit/ or defeated candidate li,e !i+ cannot be dee+ed elected to the office in cases $here the $innin- candidate is declared ineli-ible.'8 7on;ale; filed the instant petition on .ul/ 0(, 01'1 $hile !i+ filed a Ver/ "r-ent Motion For the Issuance of Hrit of ?ecution $hich the *OM ! * -ranted on 3u-ust &, 01'1.'( On 3u-ust '8, 01'1, !i+ $as proclai+ed b/ a Special #oard of *anvassers and subse>uentl/ too, his oath of office before 3ssistant State Prosecutor Nolibien N. Kuia+bao.01 In a letter dated 3u-ust 02, 01'1, !i+ re>uested Spea,er Feliciano R. #el+onte, .r. for the ad+inistration of his oath and re-istration in the Roll of the @ouse of Representatives representin- the 2rd District of 3lba/. @o$ever, Spea,er #el+onte refused to -rant !i+9s re>uest sa/in- that the issue of >ualification of 7on;ale; for

the position of Me+ber of the @ouse of Representatives is $ithin the e?clusive =urisdiction of the @R T, citinthis *ourt9s rulin- in !i+,aichon- v. *o++ission on lections0'F00. 7on;ale; contends that the *OM ! * -ravel/ abused its discretion in issuin- the assailed resolutions insofar as M '. It $ould install the Respondent Reno 7. !i+ as the Third District of 3lba/9s Representative even thou-h !i+ never $on the election, and $ho never beca+e a le-al part/ in the caseI 0. It $ould hold that the petitioner 7on;ale; is not a Filipino citi;enI 2. It $ould -o on to convene a USpecial #oard of *anvassers of 3lba/U created for the sole purpose of proclai+in- the respondent !i+ as the actual $inner of the Ma/ '1 elections in the Third District of 3lba/I ? ? ? the *o++ission9s resolutions, insofar as it $as: %. Issued $ith such -reat speed and haste that its +ista,es are -larin-I &. Issued $ithout the re>uired 4valid5 certificationI A. Insofar as it did not hold that the respondent Reno B7.C !i+ had co++itted +ore than one act of foru+6shoppin-.02 In his *o++ent,0% the Solicitor 7eneral found no -rave abuse of discretion co++itted b/ the *OM ! * in issuin- the assailed resolutions statin- that the *o++ission correctl/ ruled that 7on;ale; is not a natural6born citi;en of the Philippines b/ his failure to perfect his election of Philippine citi;enship in accordance $ith *.3. No. A0& and R.3. No. &A0. @e li,e$ise adopted the position of the *OM ! * that !i+,aichon- is not applicable to the present case and that the +otion for reconsideration filed b/ 7on;ale; $as pro for+a. The petition presents the follo$in- issues for resolution: 4'5 $hether the petition in SP3 No. '161)% 4D*5 $as ti+el/ filedI 405 $hether 7on;ale; $as validl/ proclai+ed as the dul/ elected Representative of the 2rd District of 3lba/ in the Ma/ '1, 01'1 electionsI and 425 $hether the *OM ! * had lost =urisdiction over the issue of 7on;ale;9s citi;enship. He find the petition +eritorious. 3 petition to cancel a candidate9s *O* +a/ be filed under Section )8 of the O * $hich provides: S *. )8. Petition to den/ due course to or cancel a certificate of candidac/. 66 3 verified petition see,in- to den/ due course or to cancel a certificate of candidac/ +a/ be filed b/ an/ person e?clusivel/ on the -round that an/ +aterial representation contained therein as re>uired under Section )% hereof is false. The petition +a/ be filed at an/ ti+e not later than t$ent/6five da/s fro+ the ti+e of the filin- of the certificate of candidac/ and shall be decided, after due notice and hearin-, not later than fifteen da/s before the election. 4"nderlininsupplied.5 3 petition for dis>ualification of a candidate +a/ also be filed pursuant to Section A8 of the sa+e *ode $hich states: S *. A8. Dis>ualifications. 66 3n/ candidate $ho, in an action or protest in $hich he is a part/ is declared b/ final decision of a co+petent court -uilt/ of, or found b/ the *o++ission of havin-: 4a5 -iven +one/ or other +aterial consideration to influence, induce or corrupt the voters or public officials perfor+in- electoral functionsI 4b5 co++itted acts of terroris+ to enhance his candidac/I 4c5 spent in his election ca+pai-n an a+ount in e?cess of that allo$ed b/ this *odeI 4d5 solicited, received or +ade an/ contribution prohibited under Sections 8(, (&, (A, () and '1%I or 4e5 violated an/ of Sections 81, 82, 8&, 8A and 0A', para-raphs d, e, ,, v, and cc, sub6para-raph A, shall be dis>ualified fro+ continuin- as a candidate, or if he has been elected, fro+ holdinthe office. 3n/ person $ho is a per+anent resident of or an i++i-rant to a forei-n countr/ shall not be >ualified

to run for an/ elective office under this *ode, unless said person has $aived his status as per+anent resident or i++i-rant of a forei-n countr/ in accordance $ith the residence re>uire+ent provided for in the election la$s. The prohibited acts covered b/ Section A8 refer to election ca+pai-n or political activit/ outside the ca+pai-n period 4Section 815I re+oval, destruction or deface+ent of la$ful election propa-anda 4Section 825I certain for+s of election propa-anda 4Section 8&5I violation of rules and re-ulations on election propa-anda throu-h +ass +ediaI coercion of subordinates 4Section 0A' BdC5I threats, inti+idation, terroris+, use of fraudulent device or other for+s of coercion 4Section 0A' BeC5I unla$ful electioneerin- 4Section 0A' B,C5I release, disburse+ent or e?penditure of public funds 4Section 0A' BvC5I solicitation of votes or underta,in- an/ propa-anda on the da/ of the election 4Section 0A' BccC, sub6par.A5. 3s to the -round of false representation in the *O* under Section )8, $e held in Salcedo II v. *o++ission on lections0& that in order to =ustif/ the cancellation of *O*, it is essential that the false representation +entioned therein pertain to a +aterial +atter for the sanction i+posed b/ this provision $ould affect the substantive ri-hts of a candidate M the ri-ht to run for the elective post for $hich he filed the certificate of candidac/. 3lthou-h the la$ does not specif/ $hat $ould be considered as a U+aterial representationU, the *ourt concluded that this refers to >ualifications for elective office. *itin- previous cases in $hich the *ourt interpreted this phrase, $e held that Section )8 conte+plates state+ents re-ardin- a-e,0A residence0) and citi;enship or non6possession of natural6born Filipino status.08 Further+ore, aside fro+ the re>uire+ent of +aterialit/, the false representation +ust consist of a deliberate atte+pt to +islead, +isinfor+, or hide a fact $hich $ould other$ise render a candidate ineli-ible. In other $ords, it +ust be +ade $ith an intention to deceive the electorate as to one9s >ualification for public office.0( Si-nificantl/, $e pointed out in Salcedo II the t$o re+edies available for >uestionin- the >ualifications of a candidate, thus: There are t$o instances $here a petition >uestionin- the >ualifications of a re-istered candidate to run for the office for $hich his certificate of candidac/ $as filed can be raised under the O+nibus lection *ode 4#.P. #l-. 88'5, to $it: U4'5 Before election( pursuant to Section )8 thereof $hich provides that: ??? and U405 After election( pursuant to Section 0&2 thereof, vi;: YSec. 0&2. *etition for 4uo 0arranto. 6 An' voter contestin- the election of an/ Me+ber of the #atasanPa+bansa, re-ional, provincial, or cit/ officer on the -round of ineli-ibilit/ or of dislo/alt/ to the Republic of the Philippines shall file a s$orn petition for 4uo 0arranto $ith the *o++ission 0ithin ten da's after the proclamation of the results of the election.U 4e+phasis supplied5 The onl/ difference bet$een the t$o proceedin-s is that, under Section )8, the >ualifications for elective office are +isrepresented in the certificate of candidac/ and the proceedin-s +ust be initiated before the elections, $hereas a petition for 4uo 0arranto under Section 0&2 +a/ be brou-ht on the basis of t$o -rounds 6 4'5 ineli-ibilit/ or 405 dislo/alt/ to the Republic of the Philippines, and +ust be initiated $ithin ten da/s after the procla+ation of the election results. "nder Section 0&2, a candidate is ineli-ible if he is dis>ualified to be elected to office, and he is dis>ualified if he lac,s an/ of the >ualifications for elective office. 21 4 +phasis supplied.5 *learl/, the onl/ instance $here a petition >uestionin- the >ualifications of a candidate for elective office can be filed before election is $hen the petition is filed under Section )8 of the O *.

The petition in SP3 No. '161)% 4D*5 based on the alle-ation that 7on;ale; $as not a natural6born Filipino $hich $as filed before the elections, is in the nature of a petition filed under Section )8. The recitals in the petition in said case, ho$ever, state that it $as filed pursuant to Section % 4b5 of *OM ! * Resolution No. 8A(A and Section A8 of the O * to dis>ualif/ a candidate for lac, of >ualifications or possessin- so+e -rounds for dis>ualification. The *OM ! * treated the petition as one filed both for dis>ualification and cancellation of *O*, $ith the effect that Section A8, in relation to Section 2, Rule 0& of the *OM ! * Rules of Procedure, is applicable insofar as deter+inin- the period for filin- the petition. Rule 0& of the *OM ! * Rules of Procedure on Dis>ualification of *andidates provides: Section '. 7rounds for Dis>ualification. M 3n/ candidate $ho does not possess all the >ualifications of a candidate as provided for b/ the *onstitution or b/ e?istin- la$ or $ho co++its an/ act declared b/ la$ to be -rounds for dis>ualification +a/ be dis>ualified fro+ continuin- as a candidate. ???? Sec. 2. Period to File Petition. 66 The petition shall be filed an/ da/ after the last da/ for filin- of certificates of candidac/ but not later than the date of procla+ation. 4 +phasis supplied.5 On the other hand, the procedure for filin- a petition for cancellation of *O* is covered b/ Rule 02 of the *OM ! * Rules of Procedure, $hich provides: Section '. 7rounds for Denial of *ertificate of *andidac/. 66 3 petition to den/ due course to or cancel a certificate of candidac/ for an/ elective office +a/ be filed $ith the !a$ Depart+ent of the *o++ission b/ an/ citi;en of votin- a-e or a dul/ re-istered political part/, or-ani;ation, or coalition or political parties on the e?clusive -round that an/ +aterial representation contained therein as re>uired b/ la$ is false. Sec. 0. Period to File Petition. M The petition +ust be filed $ithin five 4&5 da/s follo$in- the last da/ for the filin- of certificate of candidac/. ? ? ? ? 4 +phasis supplied.5 In !oon- v. *o++ission on lections,2' $e cate-oricall/ declared that the period for filin- a petition for cancellation of *O* based on false representation is covered b/ Rule 02 and not Rule 0& of the *OM ! * Rules of Procedure. Further, $e held that Section 2 of Rule 0& allo$in- the filin- of a petition at an/ ti+e after the last da/ for filin- of *O*9s but not later than the date of procla+ation, is +erel/ a procedural rule that cannot supersede Section )8 of the O *. He >uote the follo$in- pertinent discussion in said case: ? ? ? Section )8 of the sa+e *ode states that in case a person filin- a certificate of candidac/ has co++itted false representation, a petition to cancel the certificate of the aforesaid person +a/ be filed $ithin t$ent/6five 40&5 da/s fro+ the ti+e the certificate $as filed. *learl/, SP3 No. (1611A $as filed be/ond the 0&6da/ period prescribed b/ Section )8 of the O+nibus lection *ode. He do not a-ree $ith private respondent "tutalu+9s contention that the petition for dis>ualification, as in the case at bar, +a/ be filed at an/ ti+e after the last da/ for filin- a certificate of candidac/ but not later than the date of procla+ation, appl/in- Section 2, Rule 0& of the *o+elec Rules of Procedure. ???? The petition filed b/ private respondent "tutalu+ $ith the respondent *o+elec to dis>ualif/ petitioner !oonon the -round that the latter +ade a false representation in his certificate of candidac/ as to his a-e, clearl/ does not fall under the -rounds of dis>ualification as provided for in Rule 0& but is e?pressl/ covered b/ Rule 02 of the *o+elec Rules of Procedure -overnin- petitions to cancel certificate of candidac/. Moreover, Section 2, Rule 0& $hich allo$s the filin- of the petition at an/ ti+e after the last da/ for the filin- of certificates of candidac/ but not later than the date of procla+ation, is +erel/ a procedural rule issued b/ respondent

*o++ission $hich, althou-h a constitutional bod/, has no le-islative po$ers. Thus, it can not supersede Section )8 of the O+nibus lection *ode $hich is a le-islative enact+ent. He also do not find +erit in the contention of respondent *o++ission that in the li-ht of the provisions of Section A and ) of Rep. 3ct No. AA%A, a petition to den/ due course to or cancel a certificate of candidac/ +a/ be filed even be/ond the 0&6da/ period prescribed b/ Section )8 of the *ode, as lon- as it is filed $ithin a reasonable ti+e fro+ the discover/ of the ineli-ibilit/. Sections A and ) of Rep. 3ct No. AA%A are here re6>uoted: US *. A. 2ffect of .is4ualification Case. 6 3n/ candidate $ho has been declared b/ final =ud-+ent to be dis>ualified shall not be voted for, and the votes cast for hi+ shall not be counted. If for an/ reason a candidate is not declared b/ final =ud-+ent before an election to be dis>ualified and he is voted for and receives the $innin- nu+ber of votes in such election, the *ourt or *o++ission shall continue $ith the trial and hearin- of the action, in>uir/ or protest and, upon +otion of the co+plainant or an/ intervenor, +a/ durin- the pendenc/ thereof order the suspension of the procla+ation of such candidate $henever the evidence of his -uilt is stron-.U US *. ). *etition to .en' .ue Course o or Cancel a Certificate of Candidac'. 6 The procedure hereinabove provided shall appl/ to petitions to den/ due course to or cancel a certificate of candidac/ as provided in Section )8 of #atas Pa+bansa #l-. 88'.U It $ill be noted that nothin- in Sections A or ) +odifies or alters the 0&6da/ period prescribed b/ Section )8 of the *ode for filin- the appropriate action to cancel a certificate of candidac/ on account of an/ false represent6 ation +ade therein. On the contrar/, said Section ) affir+s and reiterates Section )8 of the *ode. He note that Section A refers onl/ to the effects of a dis>ualification case $hich +a/ be based on -rounds other than that provided under Section )8 of the *ode. #ut Section ) of Rep. 3ct No. AA%A also +a,es the effects referred to in Section A applicable to dis>ualification cases filed under Section )8 of the *ode. No$here in Sections A and ) of Rep. 3ct No. AA%A is +ention +ade of the period $ithin $hich these dis>ualification cases +a/ be filed. This is because there are provisions in the *ode $hich suppl/ the periods $ithin $hich a petition relatin- to dis>ualification of candidates +ust be filed, such as Section )8, alread/ discussed, and Section 0&2 on petitions for >uo $arranto. Thus, if a person >ualified to file a petition to dis>ualif/ a certain candidate fails to file the petition $ithin the 0&6da/ period prescribed b/ Section )8 of the *ode for $hatever reasons, the election la$s do not leave hi+ co+pletel/ helpless as he has another chance to raise the dis>ualification of the candidate b/ filin- a petition for >uo$arranto $ithin ten 4'15 da/s fro+ the procla+ation of the results of the election, as provided under Section 0&2 of the *ode. ? ? ?20 43dditional e+phasis supplied.5 *OM ! * Resolution No. 8A(A entitled URules on Dis>ualification *ases Filed in *onnection $ith the Ma/ '1, 01'1 3uto+ated National and !ocal lectionsU $as pro+ul-ated on Nove+ber '', 011(. Section % thereof provides: S *. %. Procedure in filin- petitions. M For purposes of the precedin- sections, the follo$in- procedure shall be observed: 3. P TITION TO D NJ D" *O"RS TO OR *3N* ! * RTIFI*3T OF *3NDID3*J '. 3 verified petition to den/ due course or to cancel certificate of candidac/ +a/ be filed b/ an/ person $ithin five 4&5 da/s fro+ the last da/ for the filin- of certificate of candidac/ but not later than t$ent/6five 40&5 da/s fro+ the filin- of certificate of candidac/ under Section )8 of the O+nibus lection *ode 4O *5I ????

#. P TITION TO DISK"3!IFJ 3 *3NDID3T P"RS"3NT TO S *TION A8 OF T@ OMNI#"S ! *TION *OD 3ND P TITION TO DISK"3!IFJ FOR !3*N OF K"3!IFI*3TIONS OR POSS SSIN7 SOM 7RO"NDS FOR DISK"3!IFI*3TION '. 3 verified petition to dis>ualif/ a candidate pursuant to Section A8 of the O * and the verified petition to dis>ualif/ a candidate for lac, of >ualifications or possessin- so+e -rounds for dis>ualification +a/ be filed on an/ da/ after the last da/ for filin- of certificates of candidac/ but not later than the date of procla+ationI ???? 3s can be -leaned, Section %4#5 of Resolution No. 8A(A allo$in- a petition to dis>ualif/ a candidate based on his lac, of >ualifications for elective office such as a-e, residence and citi;enship to be filed Uon an/ da/ after the last da/ for filin- of certificates of candidac/ but not later than the date of procla+ationU 4the period provided in Section A8 of the O *5, instead of the period for filin- under Section )8 4not later than t$ent/6five da/s fro+ the filin- of the certificate of candidac/5 is si+ilar to Rule 0& of the *OM ! * Rules of Procedure. Follo$in- our rulin- in !oon- v. *o++ission on lections,22 $e find that Section %4#5 of Resolution No. 8A(A represents another atte+pt to +odif/ b/ a +ere procedural rule the statutor/ period for filin- a petition to cancel *O* on the -round of false representation therein re-ardin- a candidate9s >ualifications. !i,e Rule 0& of the *OM ! * Rules of Procedure, Section %4#5 of Resolution No. 8A(A $ould supplant the prescribed period of filin- of petition under Section )8 $ith that provided in Section A8 even if the latter provision does not at all cover the false representation re-ardin- a-e, residence and citi;enship $hich +a/ be raised in a petition under Section )8. Indeed, if the purpose behind this rule pro+ul-ated b/ the *OM ! * M allo$in- a petition to cancel *O* based on the candidate9s non6co+pliance $ith constitutional and statutor/ re>uire+ents for elective office, such as citi;enship, to be filed even be/ond the period provided in Section )8 M $as si+pl/ to re+ed/ a perceived Uprocedural -apU thou-h not e?pressl/ stated in Resolution No. 8A(A, the *ourt had alread/ re=ected such =ustification. Thus, $e declared in !oon-: It is true that the discover/ of false representation as to +aterial facts re>uired to be stated in a certificate of candidac/, under Section )% of the *ode, +a/ be +ade onl/ after the lapse of the 0&6da/ period prescribed b/ Section )8 of the *ode, throu-h no fault of the person $ho discovers such +isrepresentations and $ho $ould $ant the dis>ualification of the candidate co++ittin- the +isrepresentation. It $ould see+, therefore, that there could indeed be a -ap bet$een the ti+e of the discover/ of the +isrepresentation, 4$hen the discover/ is +ade after the 0&6da/ period under Sec. )8 of the *ode has lapsed5 and the ti+e $hen the procla+ation of the results of the election is +ade. Durin- this so6called U-apU the $ould6be petitioner 4$ho $ould see, the dis>ualification of the candidate5 is left $ith nothin- to do e?cept to $ait for the procla+ation of the results, so that he could avail of a re+ed/ a-ainst the +isrepresentin- candidate, that is, b/ filin- a petition for >uo $arranto a-ainst hi+. Respondent *o++ission sees this U-apU in $hat it calls a procedural -ap $hich, accordin- to it, is unnecessar/ and should be re+edied. 3t the sa+e ti+e, it can not be denied that it is the purpose and intent of the le-islative branch of the -overn+ent to fi? a definite ti+e $ithin $hich petitions or protests related to eli-ibilit/ of candidates for elective offices +ust be filed, as seen in Sections )8 and 0&2 of the *ode. Respondent *o++ission +a/ have seen the need to re+ed/ this so6called Uprocedural -apU, but it is not for it to prescribe $hat the la$ does not provide, its function not bein- le-islative. The >uestion of $hether the ti+e to file these petitions or protests is too short or ineffective is one for the !e-islature to decide and re+ed/. 2% 4 +phasis supplied.5 In the +ore recent case of Fer+in v. *o++ission on lections,2& $e stressed that a petition filed under Section )8 +ust not be interchan-ed or confused $ith one filed under Section A8. 3 petition $hich is properl/ a USection )8 petitionU +ust therefore be filed $ithin the period prescribed therein, and a procedural rule subse>uentl/ issued b/ *OM ! * cannot supplant this statutor/ period under Section )8. He further distin-uished the t$o petitions as to their nature, -rounds and effects, to $it: !est it be +isunderstood, the denial of due course to or the cancellation of the *o* is not )ased on the lack of 4ualifications )ut on a finding that the candidate made a material representation that is false( 0hich ma' relate to the 4ualifications re4uired of the pu)lic office he5she is running for. It is noted that the candidate states in hisFher *o* that heFshe is ,:2g23:, for the office heFshe see,s. S,5t2o& 78 o= t1, OEC, t1,/,=o/,, 2s to 3, /,%' 2& /,:%t2o& to t1, 5o&st2tut2o&%: %&' st%tuto/4 0/o@2s2o&s o& Fu%:2=25%t2o&s o/ ,:2g232:2t4 =o/ 0u3:25 o==25,. #=

t1, 5%&'2'%t, su3s,Fu,&t:4 st%t,s % 6%t,/2%: /,0/,s,&t%t2o& 2& t1, CoC t1%t 2s =%:s,, t1, COMELEC, =o::oC2&g t1, :%C, 2s ,60oC,/,' to ',&4 'u, 5ou/s, to o/ 5%&5,: su51 5,/t2=25%t,. Indeed, the *ourt has alread/ li,ened a proceedin- under Section )8 to a 4uo 0arranto proceedin- under Section 0&2 of the O * since the/ both deal $ith the eli-ibilit/ or >ualification of a candidate, $ith the distinction +ainl/ in the fact that a USection )8U petition is filed before procla+ation, $hile a petition for 4uo 0arranto is filed after procla+ation of the $innin- candidate. 3t this point, $e +ust stress that a USection )8U petition ou-ht not to be interchan-ed or confused $ith a USection A8U petition. The/ are different re+edies, based on different -rounds, and resultin- in different eventualities. Private respondent9s insistence, therefore, that the petition it filed before the *OM ! * in SP3 No. 1)62)0 is in the nature of a dis>ualification case under Section A8, as it is in fact captioned a UPetition for Dis>ualification,U does not persuade the *ourt. ? ? ? ? *onsiderin- that the Dilan-alen petition does not state an/ of these -rounds for dis>ualification, it cannot be cate-ori;ed as a USection A8U petition. ???? In support of his clai+ that he actuall/ filed a Upetition for dis>ualificationU and not a Upetition to den/ due course to or cancel a *o*,U Dilan-alen ta,es refu-e in Rule 0& of the *OM ! * Rules of Procedure, specificall/ Section ' thereof, to the e?tent that it states, UBaCn/ candidate $ho does not possess all the >ualifications of a candidate as provided for b/ the *onstitution or b/ e?istin- la$ ? ? ? +a/ be dis>ualified fro+ continuin- as a candidate,U and *OM ! * Resolution No. )811 4Rules Dele-atin- to *OM ! * Field Officials the 3uthorit/ to @ear and Receive vidence in Dis>ualification *ases Filed in *onnection $ith the Ma/ '%, 011) National and !ocal lections ? ? ? ???? He disa-ree. 3 *OM ! * rule or resolution cannot supplant or var/ the le-islative enact+ents that distin-uish the -rounds for dis>ualification fro+ those of ineli-ibilit/, and the appropriate proceedin-s to raise the said -rounds. In other $ords, Rule 0& and *OM ! * Resolution No. )811 cannot supersede the dissi+ilar re>uire+ents of the la$ for the filin- of a petition for dis>ualification under Section A8, and a petition for the denial of due course to or cancellation of *o* under Section )8 of the O *. 3s aptl/ observed b/ the e+inent constitutionalist, Supre+e *ourt .ustice Vicente V. Mendo;a, in his separate opinion in Romualde&-Marcos v. Commission on 2lections: ???? @avin- thus deter+ined that the Dilan-alen petition is one under Section )8 of the O *, the *ourt no$ declares that the sa+e has to co+pl/ $ith the 0&6da/ statutor/ period for its filin-. A&nar v. Commission on 2lections andLoong v. Commission on 2lections -ive ascendanc/ to the e?press +andate of the la$ that Uthe petition +a/ be filed at an/ ti+e &ot :%t,/ t1%& tC,&t4+=2@, '%4s =/o6 t1, t26, o= t1, =2:2&g o= t1, 5,/t2=25%t, o= 5%&'2'%54.U *onstrued in relation to re-le+entar/ periods and the principles of prescription, the dis+issal of USection )8U petitions filed be/ond the 0&6da/ period +ust co+e as a +atter of course. He find it necessar/ to point out that Sections & and ) of Republic 3ct 4R.3.5 No. AA%A, contrar/ to the erroneous ar-u+ents of both parties, did not in an/ $a/ a+end the period for filin- USection )8U petitions. Hhile Section ) of the said la$ +a,es reference to Section & on the procedure in the conduct of cases for the denial of due course to the *o*s of nuisance candidates 4retired *hief .ustice @ilario 7. Davide, .r., in his dissentin- opinion in A4uino v. Commission on 2lections e?plains that Uthe Yprocedure hereinabove provided9 +entioned in Section ) cannot be construed to refer to Section A $hich does not provide for a procedure but for the effects of dis>ualification cases, BbutC can onl/ refer to the procedure provided in Section & of the said 3ct on nuisance candidates ? ? ?.U5, the sa+e cannot be ta,en to +ean that the 0&6da/ period for filin- USection )8U petitions under the O * is chan-ed to & da/s counted fro+ the last da/ for the filin- of *o*s. The clear lan-ua-e of Section )8 certainl/ cannot be a+ended or +odified b/ the +ere reference in a subse>uent statute to the use of a procedure specificall/ intended for another t/pe of action. *ardinal is the rule in statutor/ construction that repeals b/ i+plication are disfavored and $ill not be so declared b/ the *ourt unless the intent of the le-islators is +anifest. In addition, it is note$orth/ that Loong( $hich upheld the 0&6da/ period for filin-

USection )8U petitions, $as decided lon- after the enact+ent of R.3. AA%A. In this re-ard, $e therefore find as contrar/ to the une>uivocal +andate of the la$, Rule 02, Section 0 of the *OM ! * Rules of Procedure ? ? ?. ???? 3s the la$ stands, the petition to den/ due course to or cancel a *o* U+a/ be filed at an/ ti+e not later than t$ent/6five da/s fro+ the ti+e of the filin- of the certificate of candidac/.U 3ccordin-l/, it is necessar/ to deter+ine $hen Fer+in filed his *o* in order to ascertain $hether the Dilan-alen petition filed on 3pril 01, 011) $as $ell $ithin the restrictive 0&6da/ period. If it $as not, then the *OM ! * should have, as discussed above, dis+issed the petition outri-ht. ? ? ? ?2A 43dditional e+phasis supplied.5 Since the petition in SP3 No. '161)% 4D*5 sou-ht to cancel the *O* filed b/ 7on;ale; and dis>ualif/ hi+ as a candidate on the -round of false representation as to his citi;enship, the sa+e should have been filed $ithin t$ent/6five da/s fro+ the filin- of the *O*, pursuant to Section )8 of the O *. 7on;ales filed his *O* on Dece+ber ', 011(. *learl/, the petition for dis>ualification and cancellation of *O* filed b/ !i+ on March 21, 01'1 $as filed out of ti+e. The *OM ! * therefore erred in -ivin- due course to the petition. ven assu+in- ar-uendo that the petition in SP3 No. '161)% 4D*5 $as ti+el/ filed, $e find that the *OM ! * -ravel/ erred $hen it held that the procla+ation of 7on;ale; b/ the P#O* of 3lba/ on Ma/ '0, 01'1 $as pre+ature and ille-al. Section )0 of the O *, $as a+ended b/ Section A of R.3. No. AA%A $hich reads: Section A. ffect of Dis>ualification *ase. 66 3n/ candidate $ho has been declared b/ final =ud-+ent to be dis>ualified shall not be voted for, and the votes cast for hi+ shall not be counted. If for an/ reason a candidate is not declared b/ final =ud-+ent before an election to be dis>ualified and he is voted for and receives the $innin- nu+ber of votes in such election, the *ourt or *o++ission shall continue $ith the trial and hearin- of the action, in>uir/, or protest and, upon +otion of the co+plainant or an/ intervenor +a/B,C durin- the pendenc/ thereof order the suspension of the procla+ation of such candidate $henever the evidence of his -uilt is stron-. 4 +phasis supplied.5 In its .ul/ 02, 01'1 Resolution, the *OM ! * ruled that the +otion for reconsideration of the Second Division9s Ma/ 8, 01'1 Resolution filed b/ 7on;ale; on Ma/ '%, 01'1 $as pro for+a and hence did not suspend the e?ecution of the Ma/ 8, 01'1 resolution dis>ualif/in- hi+ as a candidate. Section ) of *OM ! * Resolution No. 8A(A provides: S *. ). Motion for reconsideration. 3 +otion to reconsider a Decision, Resolution, Order or Rulin- of a Division shall be filed $ithin three 425 da/s fro+ the pro+ul-ation thereof. Such +otion, if not pro6for+a, suspends the e?ecution or i+ple+entation of the Decision, Resolution, Order or Rulin-. Hithin t$ent/6four 40%5 hours fro+ the filin- thereof, the *ler, of the *o++ission shall notif/ the Presidin*o++issioner. The latter shall $ithin t$o 405 da/s thereafter, certif/ the case to the *o++ission en banc. The *ler, of the *o++ission shall calendar the Motion for Reconsideration for the resolution of the *o++ission en banc $ithin three 425 da/s fro+ the certification thereof. Section '2, Rule '8 of the *OM ! * Rules of Procedure on the Finalit/ of Decisions or Resolutions provides that M 4c5 "nless a +otion for reconsideration is seasonabl/ filed, a decision or resolution of a Division shall beco+e final and e?ecutor/ after the lapse of five 4&5 da/s in Special actions and Special cases and after fifteen 4'&5 da/s in all other actions or proceedin-s, follo$in- its pro+ul-ation.

Section 0, Rule '( of the *OM ! * Rules of Procedure also states: S *. 0. Period for Filin- Motions for Reconsideration. 66 3 +otion to reconsider a decision, resolution, order, or rulin- of a Division shall be filed $ithin five 4&5 da/s fro+ the pro+ul-ation thereof. Such +otion, if not pro for+a, suspends the e?ecution or i+ple+entation of the decision, resolution, order or rulin-. The *o++ission n #anc in its .ul/ 02, 01'1 Resolution said: 3s found b/ this *o++ission, the +otion for reconsideration +erel/ +entioned that respondent $as alread/ proclai+ed as the $innin- candidate for Representative of the 2rd District of 3lba/. Nothin- $as, ho$ever, averred nor an/ docu+ent $as sub+itted to attest to the fact that that respondent has co+plied $ith all the le-al re>uire+ents and procedure for the election of Philippine citi;enship as laid do$n in *o++on$ealth 3ct No. A0& $hich specificall/ re>uires that the oath of alle-iance should be filed $ith the nearest civil re-istr/. 2) He have held that +ere reiteration of issues alread/ passed upon b/ the court does not auto+aticall/ +a,e a +otion for reconsideration pro forma. Hhat is essential is co+pliance $ith the re>uisites of the Rules.28 Indeed, in the cases $here a +otion for reconsideration $as held to be pro forma, the +otion $as so held because 4'5 it $as a second +otion for reconsideration, or 405 it did not co+pl/ $ith the rule that the +otion +ust specif/ the findin-s and conclusions alle-ed to be contrar/ to la$ or not supported b/ the evidence, or 425 it failed to substantiate the alle-ed errors, or 4%5 it +erel/ alle-ed that the decision in >uestion $as contrar/ to la$, or 4&5 the adverse part/ $as not -iven notice thereof. 2( In the case at bar, the +otion for reconsideration%1 filed b/ 7on;ale; failed to sho$ that it suffers fro+ the fore-oin- defects. 3lthou-h the +otion repeatedl/ stressed that the people of the Third District of 3lba/ had spo,en throu-h the $innin- +ar-in of votes for 7on;ale; that the/ chose the latter to represent the+ in the @ouse of Representatives, it also reiterated his position that the petition filed b/ #ichara is ti+e6barred, addinthat it $as =ust an act of political harass+ent. #ut the +ain ar-u+ent asserts that the evidence of petitioner #ichara $as insufficient to =ustif/ the Second Division9s rulin- that 7on;ale; is not a natural6born Filipino and hence dis>ualified to be a candidate for the position of Me+ber of the @ouse of Representatives. Veril/, under prevailin- =urisprudence, to successfull/ challen-e herein 7on;ale;9s dis>ualification, petitioner in SP3 No. '16 1)% 4D*5 +ust clearl/ de+onstrate that 7on;ale;9s ineli-ibilit/ is so patentl/ anta-onistic to constitutional and le-al principles that overridin- such ineli-ibilit/ and thereb/ -ivin- effect to the apparent $ill of the people $ould ulti+atel/ create -reater pre=udice to the ver/ de+ocratic institutions and =uristic traditions that our *onstitution and la$s so ;ealousl/ protect and pro+ote.%' The *OM ! * thus seriousl/ erred in rulin- that 7on;ale;9s +otion for reconsideration $as pro for+a. Petitioner9s +otion for reconsideration of the Ma/ 8, 01'1 resolution of the Second Division havin- been ti+el/ filed, the said resolution had not beco+e final and e?ecutor/. *onsiderin- that at the ti+e of the procla+ation of 7on;ale; $ho -arnered the hi-hest nu+ber of votes for the position of Representative in the 2rd district of 3lba/, the said Division Resolution declarin- 7on;ale; dis>ualified as a candidate for the said position $as not /et final, he had at that point in ti+e re+ained >ualified. Therefore, his procla+ation on Ma/ '0, 01'1 b/ the P#O* $as valid or le-al.%0 Moreover, the Ma/ 8, 01'1 resolution cannot as /et be i+ple+ented for not havinattained finalit/. Despite recourse to this *ourt, ho$ever, $e cannot rule on the issue of citi;enship of 7on;ale;. Subse>uent events sho$ed that 7on;ale; had not onl/ been dul/ proclai+ed, he had also ta,en his oath of office and assu+ed office as Me+ber of the @ouse of Representatives. He have consistentl/ held that once a $innincandidate has been proclai+ed, ta,en his oath, and assu+ed office as a +e+ber of the @ouse of Representatives, *OM ! *9s =urisdiction over election contests relatin- to his election, returns, and >ualifications ends, and the @R T9s o$n =urisdiction be-ins.%2 In Pere; v. *o++ission on lections,%% $e declared that the *ourt does not have =urisdiction to pass upon the eli-ibilit/ of the private respondent $ho $as alread/ a Me+ber of the @ouse of Representatives at the ti+e of filin- of the petition for certiorari. %& "nder 3rticle VI, Section ') of the '(8) *onstitution, the @R T is the so:, Gu'g, of all contests relatin- to the election, returns, and >ualifications of the +e+bers of the @ouse of Representatives. 3s this *ourt e?plained in !a;atin v. @ouse lectoral Tribunal%A:

The use of the $ord UsoleU e+phasi;es the e?clusive character of the =urisdiction conferred ? ? ?. The e?ercise of the po$er b/ the lectoral *o++ission under the '(2& *onstitution has been described as Uintended to be ascomplete and unimpaired as if it had re+ained ori-inall/ in the le-islatureU ? ? ?. arlier, this -rant of po$er to the le-islature $as characteri;ed b/ .ustice Malcol+ Uas full( clear and completeU ? ? ?. "nder the a+ended '(2& *onstitution, the po$er $as un>ualifiedl/ reposed upon the lectoral Tribunal ? ? ? and it re+ained as full, clear and co+plete as that previousl/ -ranted the le-islature and the lectoral *o++ission ? ? ?. The sa+e +a/ be said $ith re-ard to the =urisdiction of the lectoral Tribunals under the '(8) *onstitution. !i+,aichon- v. *o++ission on lections%) recentl/ reiterated this settled rule on the *OM ! *9s loss of =urisdiction over a petition >uestionin- the >ualifications of a candidate upon his election, procla+ation and assu+ption of office. In said case, petitioner !i+,aichon- faced t$o dis>ualification cases alle-in- that she is not a natural6born Filipino because her parents $ere *hinese citi;ens at the ti+e of her birth. The cases re+ained pendin- b/ the ti+e the Ma/ '%, 011) elections $ere held in $hich !i+,aichon- e+er-ed as the $inner $ith A&,)18 votes or b/ a +ar-in of ),)%A votes. Subse>uentl/, another con-ressional candidate 4Olivia Paras5 $ho obtained the second hi-hest nu+ber of votes filed a +otion for leave to intervene and to suspend the procla+ation of !i+,aichon-, $hich the *OM ! *9s Second Division -ranted. The da/ after the P#O* suspended her procla+ation, the *OM ! * issued Resolution No. 81A0 adoptin- the polic/6-uidelines of not suspendin- the procla+ation of $innin- candidates $ith pendin- dis>ualification cases $hich shall be $ithout pre=udice to the continuation of the hearin- and resolution of the cases. 3ccordin-l/, !i+,aichon- +oved to reconsider the resolution dis>ualif/in- her as a candidate and to lift the order suspendin- her procla+ation. In co+pliance $ith Resolution No. 81A0, the P#O* reconvened and proclai+ed !i+,aichon- as the dul/ elected Me+ber of the @ouse of Representatives for the 'st district of Ne-ros Oriental. Thereafter, Paras filed a petition to annul !i+,aichon-9s procla+ation, $hich $as dis+issed b/ the *OM ! *9s First Division, upon the -round that the dis>ualification cases $ere not /et final $hen !i+,aichon- $as proclai+ed. @er procla+ation bein- valid or le-al, the *OM ! * ruled that it effectivel/ divested the *o++ission of =urisdiction over the cases. !i+,aichon- then +oved to declare the dis>ualification cases as dis+issed, contendin- that $ith her procla+ation, her havin- ta,en her oath of office and her assu+ption of the position, the *OM ! * $as divested of =urisdiction to hear the dis>ualification cases. Since the *OM ! * did not resolve her +otion despite her repeated pleas, !i+,aichon- filed a petition for certiorari before this *ourt. Said petition $as consolidated $ith the petition for prohibition and in=unction filed b/ !ouis *. #irao-o, petition for certiorari and in=unction filed b/ Renald F. Villando and the petition for >uo $arranto, prohibition and +anda+us $ith pra/er for te+porar/ restrainin- order and preli+inar/ in=unction instituted b/ Paras. #/ Decision dated 3pril ', 011(, this *ourt upheld the validit/ of !i+,aichon-9s procla+ation and the @R T9s =urisdiction over the issue of dis>ualification of !i+,aichon-, as follo$s: The *ourt has held in the case of Planas v. *OM ! *, that at the ti+e of the procla+ation of Defensor, the respondent therein $ho -arnered the hi-hest nu+ber of votes, the Division Resolution invalidatin- his certificate of candidac/ $as not /et final. 3s such, his procla+ation $as valid or le-al, as he had at that point in ti+e re+ained >ualified. !i+,aichon-9s situation is no different fro+ that of Defensor, the for+er havin- been dis>ualified b/ a Division Resolution on the basis of her not bein- a natural6born Filipino citi;en. Hhen she $as proclai+ed b/ the P#O*, she $as the $inner durin- the elections for obtainin- the hi-hest nu+ber of votes, and at that ti+e, the Division Resolution dis>ualif/in- her has not /et beca+e final as a result of the +otion for reconsideration. ???? In her petition ? ? ?, !i+,aichon- ar-ued that her procla+ation on Ma/ 0&, 011) b/ the P#O* divested the *OM ! * of its =urisdiction over all issues relatin- to her >ualifications, and that =urisdiction no$ lies $ith the @R T. #irao-o, on the other hand, believed other$ise. @e ar-ued ? ? ? that the issue concernin- !i+,aichon-9s dis>ualification is still $ithin the e?clusive =urisdiction of the *OM ! * 2n Banc to resolve because $hen !i+,aichon- $as proclai+ed on Ma/ 0&, 011), the +atter $as still pendin- resolution before the *OM ! * 2n Banc.

He do not a-ree. The *ourt has invariabl/ held that once a $innin- candidate 1%s 3,,& 0/o5:%26,', t%>,& 12s o%t1, and %ssu6,' o==25, as a Me+ber of the @ouse of Representatives, t1, COMELECHs Gu/2s'25t2o& o@,/ ,:,5t2o& 5o&t,sts /,:%t2&g to 12s ,:,5t2o&, /,tu/&s, %&' Fu%:2=25%t2o&s ,&'s, %&' t1, "RETHs oC& Gu/2s'25t2o& 3,g2&s. It follo$s then that the procla+ation of a $innin- candidate divests the *OM ! * of its =urisdiction over +atters pendin- before it at the ti+e of the procla+ation. The part/ >uestionin- his >ualification should no$ present his case in a proper proceedin- before the @R T, the constitutionall/ +andated tribunal to hear and decide a case involvin- a Me+ber of the @ouse of Representatives $ith respect to the latter9s election, returns and >ualifications. The use of the $ord UsoleU in Section '), 3rticle VI of the *onstitution and in Section 0&1 of the O * underscores the e?clusivit/ of the lectoral Tribunals9 =urisdiction over election contests relatin- to its +e+bers. ? ? ? ?%8 43dditional e+phasis supplied.5 Maintainin- that it retains =urisdiction over SP3 No. '161)% 4D*5, the *OM ! * n #anc declared in its .ul/ 02, 01'1 Resolution that the rulin- in !i+,aichon- v. *o++ission on lections does not appl/ to the case of 7on;ale; since this *ourt found !i+,aichon-9s procla+ation to be valid pursuant to *OM ! * Resolution No. 81A0 $hich adopted the polic/ -uideline, in connection $ith the Ma/ '%, 011) elections, of not suspendinthe procla+ation of $innin- candidates $ith pendin- dis>ualification cases $hich shall be $ithout pre=udice to the continuation of the hearin- and decision of the involved cases. In the case of 7on;ale;, the *OM ! * said that the applicable rule is Section 'A of *OM ! * Resolution No. 8A)8 pro+ul-ated on October A, 011( $hich specificall/ -overns the proceedin-s for the Ma/ '1, 01'1 3uto+ated lections. Said provision reads: S *. 'A. ffects of Dis>ualification. 66 3n/ candidate $ho has been declared dis>ualified b/ final =ud-+ent shall not be voted for and the votes cast in his favor shall not be counted. If, for an/ reason, he is not declared dis>ualified b/ final =ud-+ent before the election and he is voted for and receives the $innin- nu+ber of votes, the case shall continue and upon +otion of the petitioner, co+plainant, or intervenor, the procla+ation of such candidate +a/ be ordered suspended durin- the pendenc/ of the said case $henever the evidence is stron-. a5 $here a si+ilar co+plaintFpetition is filed before the election and before the procla+ation of the respondent and the case is not resolved before the election, the trial and hearin- of the case shall continue and referred to the !a$ Depart+ent for preli+inar/ investi-ation. b5 $here the co+plaintFpetition is filed after the election and before the procla+ation of the respondent, the trial and hearin- of the case shall be suspended and referred to the !a$ Depart+ent for preli+inar/ investi-ation. In either case, if the evidence of -uilt is stron-, the *o++ission +a/ order the suspension of the procla+ation of respondent, and if proclai+ed, to suspend the effects of procla+ation. 4 +phasis supplied.5 Invo,in- the last para-raph of the fore-oin- provision $hich the *OM ! * said is in har+on/ $ith Section A of R.3. No. AA%A 4 lectoral Refor+s !a$ of '(8)5, the *OM ! * ruled that 7on;ale;9s procla+ation $as pre+ature and ille-al, thus: Third, as found b/ the Supre+e *ourt in !i+,aichon-, the *OM ! * en banc on 3u-ust 'A, 011) ruled on !i+,aichon-9s +anifestation and +otion for clarification, thus: UIn vie$ of the procla+ation of !i+,aichon- and her subse>uent assu+ption of office on .une 21, 011), this *o++ission rules that all pendin- incidents relatin- to the >ualifications of !i+,aichon- should no$ be deter+ined b/ the @ouse of Representatives lectoral Tribunal in accordance $ith the above6>uoted provision of the *onstitution. U???U

On the contrar/, in the present case, the Second Division of the *o++ission, in the e?ercise of its po$er to suspend such procla+ation under the afore>uoted provisions of la$, refused to set aside the procla+ation and the effects thereof. *learl/, therefore, there is no taint of doubt that $ith the Resolution of the Second Division dis>ualif/in- the respondent, his procla+ation b/ the Provincial #oard of *anvassers $as pre6+ature and ille-al and should therefore be annulled. There is no >uestion that this *o++ission has the po$er to suspend such procla+ation. Notabl/, in several =urisprudence $here the Supre+e *ourt refused the annul+ent of procla+ation and held that the =urisdiction pertained alread/ to @R T, it $as the *o+elec itself that eventuall/ allo$ed the procla+ation and the effects thereof, as sho$n in BtheC Decision of the Supre+e *ourt above6referred to. In star, contrast $ith the case at bar, this *o++ission itself is e?ercisin- its prero-ative and po$er to nullif/ an ille-al and pre+ature procla+ation of the respondent on the basis of the continued proceedin-s pursuant to both Section 'A of Resolution 8A)8 and Section A of Republic 3ct AA%A. !astl/, it +ust be ta,en into consideration that, unli,e in the previous elections, the ballots $ere no$ alread/ printed $ith the na+es of the candidates as of the date of printin-, and it $as alread/ i+possible $ithout incurrin- tre+endous e?pense and dela/ +erel/ to re+ove the na+e of the dis>ualified candidate and pro-ra+ the P*OS +achines not to count the votes cast in favor of the dis>ualified candidate in a short period of ti+e prior to the actual elections. For said reason, this *o++ission has a+ple po$er to suspend the effects of, and ulti+atel/ annul, the procla+ation of the dis>ualified candidate $hose votes should not have been counted in the first place. ? ? ? ?%( 4 +phasis supplied.5 He find the above rulin- contrar/ to our pronounce+ent in !i+,aichon- and =urisprudence interpretin- Section )0 of the O * and Section A of R.3. No. AA%A $hich a+ended said provision. First, as alread/ stated, there $as no le-al bar to the procla+ation of 7on;ale; as the $innin- candidate on Ma/ '0, 01'1 since the Ma/ 8, 01'1 Resolution at that ti+e had not /et beco+e finalI in fact 7on;ale; received a cop/ thereof onl/ on Ma/ '', 01'1. He have held that the five6da/ period for filin- a +otion for reconsideration under Rule '(, Section 0 of the *OM ! * Rules of Procedure should be counted fro+ the receipt of the decision, resolution, order, or rulin- of the *OM ! * Division.&1 Hith his filin- of a +otion for reconsideration $ithin the three6da/ period provided in Section ) of *OM ! * Resolution No. 8A(A, the e?ecution of the said resolution $as effectivel/ suspended. Moreover, there is nothin- in the Ma/ 8, 01'1 Resolution of the Second Division orderin- the suspension of the procla+ation of 7on;ale;. Fro+ the lan-ua-e of Section A of R.3. No. AA%A upon $hich the first para-raph of Section 'A of *OM ! * Resolution No. 8A)8 $as based, the *o++ission can order the suspension of the procla+ation of the $innin- candidate onl/ upon +otion durin- the pendenc/ of the dis>ualification case. The *ourt has ruled that the suspension of procla+ation of a $innin- candidate is not a +atter $hich the *OM ! * Second Division can dispose of +otu proprio. Section A of R.3. No. AA%A re>uires that the suspension +ust be Uupon +otion b/ the co+plainant or an/ intervenor.U&' The rule then is that candidates $ho are dis>ualified b/ final =ud-+ent before the election shall not be voted for and the votes cast for the+ shall not be counted. #ut those a-ainst $ho+ no final =ud-+ent of dis>ualification had been rendered +a/ be voted for and proclai+ed, unless, on +otion of the co+plainant, the *OM ! * suspends their procla+ation because the -rounds for their dis>ualification or cancellation of their certificates of candidac/ are stron-.&0 There bein- no final =ud-+ent of dis>ualification /et at the ti+e of his procla+ation on Ma/ '0, 01'1, it $as -rave error for the *OM ! * n #anc to rule that 7on;ale;9s procla+ation $as ille-al and pre+ature. 3lso, the Ma/ 8, 01'1 Resolution rendered b/ the Second Division cannot be construed as an i+plicit e?ercise b/ the *o++ission of its po$er to suspend the procla+ation of 7on;ale; as it could not have /et ordered such suspension considerin- that #ichara 4petitioner in SP3 No. '161)% BD*C5 filed his U"r-ent Motion to StopFSuspend The Procla+ation of Fernando Valle=o 7on;ale;U onl/ on Ma/ '', 01'1 after the pro+ul-ation of the Ma/ 8, 01'1 Resolution.&2 Moreover, the *OM ! * n #anc did not act on said +otion of #ichara even after 7on;ale; had been proclai+ed b/ the P#O*. Subse>uentl/, !i+ filed a +otion for leave to intervene and suspend the effects of procla+ation of 7on;ale;, $hich $as follo$ed b/ ten ver/ ur-ent +otions for the *OM ! * n #anc to resolve the sa+e.&%

Neither can the *OM ! * anchor its rulin- that the Ma/ '0, 01'1 procla+ation of 7on;ale; $as ille-al and pre+ature on the -round that votes for said candidate, $ho $as dis>ualified under the Ma/ 8, 01'1 Resolution of the Second Division, should not have been counted. This is apparent fro+ the other reason cited b/ the *OM ! * as one of the circu+stances distin-uishin- the present case fro+ that of !i+,aichon-, thus: !astl/, it +ust be ta,en into consideration that, unli,e the previous elections, the ballots $ere no$ alread/ printed $ith the na+es of the candidates as of the date of printin-, and it $as alread/ i+possible $ithout incurrin- tre+endous e?pense and dela/ +erel/ to re+ove the na+e of the dis>ualified candidate and pro-ra+ the P*OS +achines not to count the votes cast in favor of the dis>ualified candidate in a short period of ti+e prior to the actual elections. For said reason, this *o++ission has a+ple po$er to suspend the effects of, and ulti+atel/ annul, the procla+ation of the dis>ualified candidate $hose votes should not have been counted in the first place.&& 4 +phasis supplied.5 The above proposition is untenable. The advent of auto+ated elections did not +a,e an/ difference in the application of Section A of R.3. No. AA%A insofar as the effects of dis>ualification are concerned. ven at the ti+e $hen ballots $ere ph/sicall/ read b/ the board of election inspectors and counted +anuall/, it had not been absolutel/ necessar/ to reprint the ballots or re+ove the na+es of candidates $ho $ere dis>ualified before election. The votes cast for such candidates considered as Ustra/ votesU even if read b/ the P*OS +achines $ill have to be disre-arded b/ the board of canvassers upon proper order fro+ the *OM ! *. In an/ case, the point raised b/ the *OM ! * is irrelevant in resolvin- the present controvers/. 1avvphi1 It has lon- been settled that pursuant to Section A of R.3. No. AA%A, a final =ud-+ent before the election is re>uired for the votes of a dis>ualified candidate to be considered Ustra/.U In the absence of an/ final =ud-+ent of dis>ualification a-ainst 7on;ale;, the votes cast in his favor cannot be considered stra/. &A 3fter procla+ation, ta,in- of oath and assu+ption of office b/ 7on;ale;, =urisdiction over the +atter of his >ualifications, as $ell as >uestions re-ardin- the conduct of election and contested returns M $ere transferred to the @R T as the constitutional bod/ created to pass upon the sa+e. The *ourt thus does not concur $ith the *OM ! *9s fla$ed assertion of =urisdiction pre+ised on its po$er to suspend the effects of procla+ation in cases involvindis>ualification of candidates based on co++ission of prohibited acts and election offenses. 3s $e held in !i+,aichon-, an/ alle-ations as to the invalidit/ of the procla+ation $ill not prevent the @R T fro+ assu+in=urisdiction over all +atters essential to a +e+ber9s >ualification to sit in the @ouse of Representatives. &) It +ust be noted that sub6para-raphs 4a5 and 4b5, Section 'A of *OM ! * Resolution No. 8A)8 $hich conte+plate dis>ualification cases a-ainst candidates over $hich the *OM ! * retains =urisdiction even after those candidates have $on the elections, dul/ proclai+ed and assu+ed office, cannot be applied to petitions filed a-ainst candidates for the position of Me+ber of the @ouse of Representatives >uestionin- their constitutional and statutor/ >ualifications for the office under Section )8 of the O *. The la$ is e?plicit in vestin- =urisdiction over such cases in the @R T. In our Resolution dated .ul/ 01, 011( den/in- the +otion for reconsideration $ith pra/er for oral ar-u+ent filed b/ #irao-o in the !i+,aichon- case, $e affir+ed our rulinin our Decision of 3pril ', 011( that Uthe proper re+ed/ of those $ho +a/ assail !i+,aichon-9s dis>ualification based on citi;enship is to file before the @R T the proper petition at an/ ti+e durinincu+benc/.U That !i+ had alread/ $ithdra$n the petition for >uo $arranto he had earlier filed before the @R T is of no conse>uence, considerin- that citi;enship is a continuin- re>uire+ent for the holdin- of office of Me+bers of the @ouse of Representatives. "nder the '(8) *onstitution, Me+bers of the @ouse of Representatives +ust be natural6born citi;ens not onl/ at the ti+e of their election but durin- their entire tenure. 3n/one $ho assails a Representative9s citi;enship or lac, of it +a/ still >uestion the sa+e at an/ ti+e, even be/ond the ten6da/ prescriptive period set in the '((8 @R T Rules.&8 He also hold that there is no basis for the *OM ! *9s order constitutin- a Special Provincial #oard of *anvassers for the purpose of proclai+in- !i+ $ho -ot the ne?t hi-hest nu+ber of votes in the Ma/ '1, 01'1 elections for the position of Representative of the 2rd District of 3lba/. It is $ell6settled that the ineli-ibilit/ of a candidate receivin- +a=orit/ votes does not entitle the eli-ible candidate receivin- the ne?t hi-hest nu+ber of votes to be declared elected. 3 +inorit/ or defeated candidate cannot be dee+ed elected to the office. The votes intended for the dis>ualified candidate should not be considered null and void, as it $ould a+ount to disenfranchisin- the electorate in $ho+ soverei-nt/ resides.&( The second placer is =ust that, a second placer M he lost in the elections and $as repudiated b/ either the +a=orit/ or pluralit/ of voters. A1

Private respondent !i+ ar-ues that the second placer rule $ill not appl/ in this case because 7on;ale; $as dis>ualified to be a candidate before election under the assailed *OM ! * resolutions $hich beca+e final and e?ecutor/ after five 4&5 da/s $ithout a restrainin- order issued b/ this *ourt. The effect of the rulin- on 7on;ale;9s dis>ualification retroacts to the da/ of election 4Ma/ '1, 01'15. 3s reflected in the recent State+ent of Votes prepared b/ the Special #oard of *anvassers, the na+e of Fernando V. 7on;ale; has been delisted fro+ the lists of official candidates for the Me+bers of the @ouse of Representatives in the 2rd District of 3lba/. A' The e?ception to the second placer rule is predicated on the concurrence of the follo$in-: 4'5 the one $ho obtained the hi-hest nu+ber of votes is dis>ualifiedI and 405 the electorate is full/ a$are in fact and in la$ of a candidate9s dis>ualification so as to brin- such a$areness $ithin the real+ of notoriet/ but $ould nonetheless cast their votes in favor of the ineli-ible candidate.A0 These facts $arrantin- the e?ception to the rule are not present in the case at bar. 3s noted b/ *o++issioner Velasco, the date of pro+ul-ation of the resolution declarin- 7on;ale; dis>ualified to be a candidate in the Ma/ '1, 01'1 $as not a previousl/ fi?ed date as re>uired b/ Section AA2 of *OM ! * Resolution No. 8A(A as the records do not sho$ that the parties $ere -iven prior notice thereof. In fact, 7on;ale; throu-h his counsel received a cop/ of the Ma/ 8, 01'1 Resolution onl/ on Ma/ '', 01'1, one da/ after the elections. 3nd as $e held in #autista v. *o++ission on lectionsA% Thus, $hen the electorate voted for #autista as Punon- #aran-a/ on '& .ul/ 0110, it $as under the belief that he $as >ualified. There is no presu+ption that the electorate a-reed to the invalidation of their votes as stra/ votes in case of #autista9s dis>ualification. The *ourt cannot adhere to the theor/ of respondent 3lcore;a that the votes cast in favor of #autista are stra/ votes. 3 subse>uent findin- b/ the *OM ! * en )anc that #autista is ineli-ible cannot retroact to the date of elections so as to invalidate the votes cast for hi+. 3s held in .omino v. C#M2L2C: *ontrar/ to the clai+ of INT RV NOR, petitioner $as not notoriousl/ ,no$n b/ the public as an ineli-ible candidate. 3lthou-h the resolution declarin- hi+ ineli-ible as candidate $as rendered before the election, ho$ever, the sa+e is not /et final and e?ecutor/. In fact, it $as no less than the *OM ! * in its Supple+ental O+nibus Resolution No. 21%A that allo$ed DOMINO to be voted for the office and ordered that the votes cast for hi+ be counted as the Resolution declarin- hi+ ineli-ible has not /et attained finalit/. Thus the votes cast for DOMINO are presu+ed to have been cast in the sincere belief that he $as a >ualified candidate, $ithout an/ intention to +isappl/ their franchise. Thus, said votes can not be treated as stra/, void, or +eanin-less.A&4 +phasis supplied.5 He have declared that not even this *ourt has authorit/ under an/ la$ to i+pose upon and co+pel the people to accept a loser, as their representative or political leader.AA The $reath of victor/ cannot be transferred fro+ the dis>ualified $inner to the repudiated loser.A) The *OM ! * clearl/ acted $ith -rave abuse of discretion in orderin- the procla+ation of private respondent !i+ $ho lost b/ a $ide +ar-in of 0(,0(0 votes, after declarin7on;ale;, the $innin- candidate, dis>ualified to run as Me+ber of the @ouse of Representatives. H@ R FOR , the petition is 7R3NT D. The assailed Resolution of the Second Division dated Ma/ 8, 01'1 and *OM ! * n #anc Resolution dated .ul/ 02, 01'1 in SP3 No. '161)% 4D*5 are hereb/ 3NN"!! D and S T 3SID . The Petition for Dis>ualification and *ancellation of *ertificate of *andidac/ of Fernando V. 7on;ale; is DISMISS D, $ithout pre=udice to the filin- of a proper petition before the @ouse of Representatives lectoral Tribunal raisin- the sa+e >uestion on the citi;enship >ualification of Fernando V. 7on;ale;. No costs. SO ORD R D. MART#N S. V#LLARAMA, )R. 3ssociate .ustice H *ON*"R:

RENATO C. CORONA *hief .ustice ANTON#O T. CARP#O 3ssociate .ustice PRESB#TERO ). VELASCO, )R. 3ssociate .ustice CONC"#TA CARP#O MORALES 3ssociate .ustice 4On official leave5 ANTON#O EDUARDO B. NAC"URAL 3ssociate .ustice 4On official leave5 ARTURO D. BR#ONL 3ssociate .ustice LUCAS P. BERSAM#N 3ssociate .ustice ROBERTO A. ABAD 3ssociate .ustice )OSE CATRAL MENDO(A 3ssociate .ustice

TERES#TA ). LEONARDO+DE CASTRO 3ssociate .ustice D#OSDADO M. PERALTA 3ssociate .ustice MAR#ANO C. DEL CAST#LLO 3ssociate .ustice )OSE PORTUGAL PERE( 3ssociate .ustice

MAR#A LOURDES P. A. SERENO 3ssociate .ustice * RTIFI*3TION

Pursuant to Section '2, 3rticle VIII of the '(8) *onstitution, I certif/ that the conclusions in the above Decision had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt. RENATO C. CORONA *hief .ustice

!oot&ot,s
L

On official leave.

'

Rollo, pp. ''16''%. Penned b/ Presidin- *o++issioner Nicode+o T. Ferrer and concurred in b/ *o++issioners !ucenito N. Ta-le and lias R. Jusoph.
0

Id. at )0680. Penned b/ *o++issioner Nicode+o T. Ferrer and concurred in b/ *o++issioners !ucenito N. Ta-le, lias R. Jusoph and 7re-orio J. !arra;abal.
2

Id. at '&(6')0. Id. at '8%6'(8. Id. at ''%. Id. at '''6''2.

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Id. at ''&. Id. at &1(6&'2. Id. at &1)6&18. Id. at %886&1A. Id. at '286'%0. Id. at 2'(6202. Id. at ''&6'2). Id. at %1)6%'0. The lectoral Refor+s !a$ of '(8). Id. at 8'680. Id. at 8268A. Id. at 8)68(. Id. at A2(6A%(. Id. at 8A268A&. 7.R. Nos. ')882'620, ')('01, ')('20622 Q ')(0%16%', 3pril ', 011(, &82 S*R3 '. Rollo, pp. 8AA68A8. Id. at 0(. Id. at (0A6(&&. 7.R. No. '2&88A, 3u-ust 'A, '(((, 2'0 S*R3 %%), %&&.

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Id. at %&8, citin- !oon- v. *o++ission on lections, 7.R. No. (2(8A, Dece+ber 00, '((0, 0'A S*R3 )A1.
0)

Id. at %&&, citin- 3bella v. !arra;abal, 7.R. Nos. 8))0'621 Q 8811%, Dece+ber 0', '(8(, '81 S*R3 &1( and 3>uino v. *o++ission on lections, 7.R. No. '010A&, Septe+ber '8, '((&, 0%8 S*R3 %11.
08

Id. at %&&6%&A, citin- !abo, .r. v. *o++ission on lections, 7.R. Nos. '1&''' Q '1&28%, .ul/ 2, '((0, 0'' S*R3 0() and Frivaldo v. *o++ission on lections, 7.R. Nos. '010(& Q '02)&&, .une 08, '((A, 0&) S*R3 )0), 7.R. No. 8)'(2, .une 02, '(8(, ')% S*R3 0%& and Repu)lic v. .e la Rosa, 7.R. Nos. '1%A&%, '1&)'& Q '1&)2&, .une A, '((%, 020 S*R3 )8&.
0(

Id. at %&(, citin- Ro+ualde;6Marcos v. *o++ission on lections, 7.R. No. ''(()A, Septe+ber '8, '((&, 0%8 S*R3 211, 20A.
21

Id. at %&A6%&). Supra note 0A.

2'

20

Id. at )A&6)A8. Supra note 0A. Id. at )A86)A(. 7.R. Nos. ')(A(& Q '802A(, Dece+ber '8, 0118, &)% S*R3 )80. Id. at )(06)(%, )(A6)(8 and 8116812. Rollo, p. )%.

22

2%

2&

2A

2)

28

Republic v. 3suncion, 7.R. No. '&(A(&, Septe+ber '&, 011A, &10 S*R3 '%1, '%)6'%8, citinMarina Properties *orporation v. *ourt of 3ppeals, 2&& Phil. )1&, )'A 4'((85.
2(

*o>uilla v. *o++ission on lections, 7.R. No. '&'('%, .ul/ 2', 0110, 28& S*R3 A1), A'%. Rollo, pp. ''&6'2). See .ap;on v. *o++ission on lections, 7.R. No. '81188, .anuar/ '(, 011(, &)A S*R3 22', 2&2. See Planas v. *o++ission on lections, 7.R. No. 'A)&(%, March '1, 011A, %8% S*R3 &0(, &2).

%1

%'

%0

%2

7uerrero v. *o++ission on lections, 7.R. No. '2)11%, .ul/ 0A, 0111, 22A S*R3 %&8, %AA6%A), citin- 3>uino v. *o++ission on lections, supra note 0) at %')6%'8 and Ro+ualde;6Marcos v. *o++ission on lections, supra note 0( at 2%162%'. See also Di+aporo v. *o++ission on lections, 7.R. No. ')(08&, Februar/ '', 0118, &%% S*R3 28', 2(0.
%%

2)& Phil. ''1A 4'(((5. Id. at '''&. No. !68%0(), Dece+ber 8, '(88, 'A8 S*R3 2(', %1'. Supra note 0'. Id. at 2062%. Rollo, pp. )(681.

%&

%A

%)

%8

%(

&1

*o>uilla v. *o++ission on lections, supra note 2( at A'0, citin- #ulaon- v. *OM ! *, First Division, 7.R. No. '1)(8), March 2', '((2, 001 S*R3 )%&.
&'

*odilla, Sr. v. De Venecia, 7.R. No. '&1A1&, Dece+ber '1, 0110, 2(2 S*R3 A2(, AA2. *o>uilla v. *o++ission on lections, supra note 2( at A'&. Rollo, pp. 0)86081. Id. at 2)26%8). Id. at 81.

&0

&2

&%

&&

&A

Kui;on v. *o++ission on lections, 7.R. No. '))(0), Februar/ '&, 0118, &%& S*R3 A2&, A%0, citin- *odilla, Sr. v. De Venecia, supra note &' at A)0.

&)

!i+,aichon- v. *o++ission on lections, supra note 0' at 2A. Id. at 28.

&8

&(

3lbaVa v. *o++ission on lections, 7.R. No. 'A2210, .ul/ 02, 011%, %2& S*R3 (8, '1(, citin!abo, .r. v. *o++ission on lections, supra note 08 at 2''I Sun-a v. *o++ission on lections, 7.R. No. '0&A0(, March 0&, '((8, 088 S*R3 )A. See also !abo, .r. v. *o++ission on lections, 7.R. No. 8A&A%, 3u-ust ', '(8(, ')A S*R3 'I 3bella v. *OM ! *, 7.R. Nos. '11)'1 Q '11)2(, Septe+ber 2, '((', 01' S*R3 0&2I #enito v. *OM ! *, 7.R. No. '1A1&2, 3u-ust '), '((%, 02& S*R3 %2AI and Do+ino v. *o++ission on lections, 7.R. No. '2%1'&, .ul/ '(, '(((, 2'1 S*R3 &%A.
A1

Kui;on v. *o++ission on lections, supra note &A at A%2, citin- Oca+po v. @ouse of Representatives lectoral Tribunal, 7.R. No. '&8%AA, .une '&, 011%, %20 S*R3 '%%, '&1.
A'

Rollo, p. 8&8.

A0

7re-o v. *o++ission on lections, 7.R. No. '0&(&&, .une '(, '((), 0)% S*R3 %8', &1', citin!abo, .r. v. *o++ission on lections, supra note 08.
A2

S *. A. Pro+ul-ation. 66 The pro+ul-ation of a Decision or Resolution of the *o++ission or a Division shall be +ade on a date previousl/ fi?ed, notice of $hich shall be served in advance upon the parties or their attorne/s personall/, or b/ re-istered +ail, tele-ra+, fa? or thru the fastest +eans of co++unication.
A%

7.R. Nos. '&%)(A6(), October 02, 0112, %'% S*R3 0((. Id. at 20%620&. Miranda v. 3ba/a, 7.R. No. '2A2&', .ul/ 08, '(((, 2'' S*R3 A'), A2&. Do+ino v. *o++ission on lections, supra note &( at &)%.

A&

AA

A)

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 170728 August 31, 2011

D. M. *ENCESLAO AND ASSOC#ATES, #NC., Petitioner, vs. C#T7 O! PARADA$UE, PARADA$UE C#T7 ASSESSOR, PARADA$UE C#T7 TREASURER %&' PARADA$UE C#T7 COUNC#L, Respondents. D V#LLARAMA, )R., J.: *hallen-ed in this petition for revie$ on certiorari are the October '&, 011% and Nove+ber 0%, 011& Resolutions'of the *ourt of 3ppeals 4*35 in *367.R. *V "DN No. (&206D. The *3 dis+issed the appeal of D.M. Henceslao and 3ssociates, Inc. fro+ the Order0 of the Re-ional Trial *ourt 4RT*5 of ParaVa>ue *it/ in *ivil *ase No. 1261%8 for nonpa/+ent of doc,et and other la$ful fees. The facts are as follo$s: *ISION

Petitioner D.M. Henceslao and 3ssociates, Inc. is a do+estic corporation en-a-ed in the construction business. It is the re-istered o$ner of +ore than 011,111 s>uare +eters of reclai+ed land in #aran-a/ Ta+bo, ParaVa>ue *it/, no$ ,no$n as the 3seana #usiness Par,. In '((A, the *it/ of ParaVa>ue passed Ordinance No. (A6'A, providin- for the +ar,et values of the properties $ithin its =urisdiction as basis for assess+ent and real propert/ ta?ation. The ordinance also provided for a discount of )1E of the base value of the developed lots in the area, for lo$, sun,en and undeveloped parcels of land, such as the lots reclai+ed and o$ned b/ petitioner. The *it/ 3ssessor of ParaVa>ue, ho$ever, assessed petitionerOs lots based on the rates applicable to #aran-a/ #aclaran, $hich rates $ere hi-her than those applicable to properties in #aran-a/ Ta+bo. Petitioner infor+ed the *it/ 3ssessor of the $ron-ful assess+ent in '((8I hence, startin- on the 2rd >uarter of '((8, the Ta+bo rates $ere used, althou-h petitioner clai+ed that the discount provision in the ordinance $as still not applied. Subse>uentl/, the *it/ Treasurer declared petitioner9s properties delin>uent and included the+ in the auction sale scheduled on Februar/ ), 0112. On Februar/ %, 0112, petitioner filed $ith the RT* of ParaVa>ue *it/ a *o+plaint2 for collection of e?cess real propert/ ta?es and da+a-es $ith pra/er for the issuance of a te+porar/ restrainin- order andFor preli+inar/ in=unction see,in- to restrain respondents fro+ enforcin- the foreclosure sale. The RT* denied petitioner9s pra/er for the issuance of a $rit of preli+inar/ in=unction. Thus, to prevent its properties fro+ bein- auctioned, petitioner paid under protest the a+ount of P'1',%00,&8'.)& on Februar/ ), 0112.% Said pa/+ent brou-ht the total a+ount of real propert/ ta?es paid b/ petitioner to P''',%0%,'&).'1 for the ta?able /ears '((& to 0110. On March 01, 0112& petitioner a+ended its co+plaint. ssentiall/, petitioner ar-ued that had the correct assess+ent been +ade, it should have paid onl/ PA,')0,()(.&'A instead of P''',%0%,'&).'1) to the *it/ of ParaVa>ue. Petitioner ar-ued that pursuant to Ordinance No. (A6'A, the properties located in #aran-a/ Ta+bo should have been assessed based on the +ar,et value of P2,111.11 for the /ears '((& to '((A and P%,111.11 for the /ears '(() to '(((. @o$ever, the *it/ 3ssessor used the +ar,et value applicable to properties located in #aran-a/ #aclaran, $hich $ere sub=ect to a hi-her rate. Petitioner also pointed out that the ordinance provided that undeveloped parcels of land shall have )1E of the base value of the nearest developed or i+proved lots located in that area. Thus, petitioner clai+ed that the *it/ of ParaVa>ue is liable to return the e?cess realt/ ta?es under the principle of solutio inde)iti. Respondents filed a +otion to dis+iss based on the follo$in- -rounds: 4'5 the cause of action is barred b/ prior =ud-+ent or b/ the statute of li+itationsI 405 the court has no =urisdiction over the sub=ect +atter of the clai+I and 425 the co+plaint is filed in violation of the rule on foru+ shoppin-. Respondents contended that petitioner9s cause of action based on solutio inde)iti is in realit/ a s+o,e screen to its real intention $hich is to clai+ for ta? refund. 3s such, petitioner9s action has alread/ prescribed pursuant to the provisions of the !ocal 7overn+ent *ode. On Nove+ber 01, 0112, the RT* issued an Order -rantin- the +otion to dis+iss. It found that petitioner9s cause of action $as reall/ based on Section 0&28 of the !ocal 7overn+ent *ode. 3s such, petitioner9s cause of action had alread/ prescribed inas+uch as the alle-ations in the co+plaint sho$ that the alle-ed overpa/+ent of real propert/ ta? occurred in '((&6'((( and 011'60110 $hile the co+plaint $as onl/ filed in Februar/ %, 0112. Moreover, the RT* ruled that the action to undo the alle-ed $ron- ta? assess+ents and collections in order to as, for refund $ould +a,e the court do a technical =ob reserved for special ad+inistrative bodies li,e the !ocal #oard of 3ssess+ent 3ppeals and the *entral #oard of 3ssess+ent 3ppeals. Petitioner sou-ht reconsideration of the order, but its +otion $as denied b/ the RT* on Ma/ %, 011%.( On Ma/ '), 011%, petitioner filed a Notice of 3ppeal,'1 $hich $as approved b/ the RT* on Ma/ 0%, 011%.''3ccordin-l/, the #ranch *ler, of *ourt $as directed to trans+it the entire records of the case to the *3. 3s earlier +entioned, the *3 dis+issed petitioner9s appeal in a Resolution dated October '&, 011%, to $it: For failure of plaintiff6appellant to pa/ the re>uired doc,etin- fees, the appeal interposed in this case is dee+ed abandoned and is accordin-l/ DISMISS D.

SO ORD R D.'0 Petitioner filed a +otion for reconsideration'2 alle-in- that it never intended to abandon its appeal. It e?plained that because of e?tre+el/ heav/ $or,load and b/ e?cusable inadvertence, petitioner9s counsel overloo,ed the fact that the re>uired appeal fee $as not paid at the ti+e of the filin- of the notice of appeal. Petitioner also infor+ed the *3 that its counsel had alread/ paid the appeal fee of P2,111 on October 01, 011%. In a Resolution dated Nove+ber 0%, 011&, the *3 denied petitioner9s +otion for reconsideration, thus: H@ R FOR , plaintiff6appellant9s +otion for reconsideration is D NI D for lac, of sufficient +erit. SO ORD R D.'% The *3 held that it could no lon-er reconsider the October '&, 011% Resolution considerin- that the appealed dis+issal order of the trial court has beco+e final and e?ecutor/ due to petitioner9s failure to perfect the appeal b/ pa/in- the doc,et fees on ti+e. It e?plained that althou-h there are reco-ni;ed circu+stances that $arrant the rela?ation of the rules on pa/+ent of doc,et fees, such as fraud, accident, +ista,e, e?cusable ne-li-ence, or a si+ilar supervenin- casualt/, the heav/ $or,load and inadvertence of counsel are not a+on- the+. The *3 also noted that in this case, petitioner $as dela/ed in the pa/+ent of the doc,et fees for five +onths counted fro+ the filin- of the notice of appeal. Findin- no =ustifiable reason for such dela/, the *3 ruled that it can no lon-er accept such pa/+ent. "ndaunted, petitioner filed the instant petition before this *ourt. The sole issue for our resolution is $hether the *3 erred in dis+issin- petitioner9s appeal for late pa/+ent of doc,et fees. Petitioner contends that it i++ediatel/ paid the appeal fee of P2,111 on October 01, 011% after havin- been advised of its nonpa/+ent, and such action ne-ates the theor/ that it intended to abandon its appeal. Petitioner adds that it $ould not abandon its case to recover the a+ount of P'1&,0&',')).&( especiall/ after it had paidP0,''',('%.21 in doc,et and other le-al fees. Petitioner ar-ues that the court, in the e?ercise of its e>uit/ =urisdiction and liberall/ appl/in- the rules of procedure, +a/ -ive due course to the appeal despite its failure to pa/ the doc,et fees $ithin the re-le+entar/ period. On the other hand, respondents counter that petitioner failed to perfect its appeal. The/ stress that under Section %, Rule %' of the '(() Rules of *ivil Procedure, as a+ended, petitioner should have paid the appellate doc,et fees $ithin the period to appeal or $ithin fifteen 4'&5 da/s fro+ notice of the =ud-+ent appealed fro+. Moreover, the pa/+ent of appellate doc,et and other le-al fees $ithin the prescribed period is both +andator/ and =urisdictional. Since the pa/+ent of the doc,et fees $as +ade +ore than one6hundred fift/ 4'&15 da/s after the e?piration of the period for the perfection of an appeal, the *3 did not ac>uire =urisdiction over the case e?cept to order its dis+issal. He a-ree $ith respondents9 contention. The rule that appellate court doc,et and other la$ful fees +ust be paid $ithin the period for ta,in- an appeal is stated in Section %, Rule %' of the '(() Rules of *ivil Procedure, as a+ended: S *. %. Appellate court docket and other la0ful fees. M Hithin the period for ta,in- an appeal, the appellant shall pa/ to the cler, of the court $hich rendered the =ud-+ent or final order appealed fro+, the full a+ount of the appellate court doc,et and other la$ful fees. Proof of pa/+ent of said fees shall be trans+itted to the appellate court to-ether $ith the ori-inal record or the record on appeal. !i,e$ise, Section 2, Rule %', of the sa+e Rules state: S *. 2. *eriod of ordinar' appeal( 1 1 1. 6 The appeal shall be ta,en $ithin fifteen 4'&5 da/s fro+ notice of the =ud-+ent or final order appealed fro+. Hhere a record on appeal is re>uired, the appellant shall file a notice of appeal and a record on appeal $ithin thirt/ 4215 da/s fro+ notice of the =ud-+ent or final order. ? ? ?

???? In this case, petitioner received a cop/ of the trial courtOs Order on Ma/ '%, 011%. Thus, pursuant to Section 2, Rule %', in relation to Section ','& Rule 00, it had until Ma/ 2', 011% $ithin $hich to perfect its appeal b/ filin$ithin that period the notice of appeal and pa/in- the appellate doc,et and other le-al fees. On Ma/ '), 011%, petitioner filed its notice of appeal $ithin the re-le+entar/ period. He note, ho$ever, that it paid the re>uired doc,et fees onl/ on October 01, 011%, or late b/ al+ost five +onths. It bears stressin- that pa/+ent of doc,et and other fees $ithin this period is +andator/ for the perfection of the appeal. Other$ise, the ri-ht to appeal is lost. This is so because a court ac>uires =urisdiction over the sub=ect +atter of the action onl/ upon the pa/+ent of the correct a+ount of doc,et fees re-ardless of the actual date of filin- of the case in court. The pa/+ent of appellate doc,et fees is not a +ere technicalit/ of la$ or procedure. It is an essential re>uire+ent, $ithout $hich the decision or final order appealed fro+ beco+es final and e?ecutor/ as if no appeal $as filed.'A He held in one case that the *3 correctl/ dis+issed the appeal $here the doc,et fees $ere not paid in full $ithin the prescribed period of fifteen 4'&5 da/s but $ere paid fort/6one 4%'5 da/s late due to inadvertence, oversi-ht, and pressure of $or,.') In another case, $e ruled that no appeal $as perfected $here half of the appellate doc,et fee $as paid $ithin the prescribed period, $hile the other half $as tendered after the period $ithin $hich pa/+ent should have been +ade.'8 videntl/, $here the appellate doc,et fee is not paid in full $ithin the re-le+entar/ period, the decision of the trial court beco+es final and no lon-er susceptible to an appeal. For once a decision beco+es final, the appellate court is $ithout =urisdiction to entertain the appeal.'( 1a0phi1 Moreover, pursuant to Section ', Rule &1 of the '(() Rules of *ivil Procedure, as a+ended, the *3, on its o$n +otion or that of the appellee, +a/ dis+iss the appeal on the -round that appellant failed to pa/ the doc,et and other la$ful fees.01 Section '4c5, Rule &1 of the Rules provides that: Section '. ,rounds for dismissal of appeal.M3n appeal +a/ be dis+issed b/ the *ourt of 3ppeals, on its o$n +otion or on that of the appellee, on the follo$in- -rounds: ???? 4c5 Failure of the appellant to pa/ the doc,et and other la$ful fees as provided in Section % of Rule %'I ???? Pertinentl/, this *ourt9s rulin- in Cu--n3ieng v. Court of Appeals0' is instructive: Hith the realit/ obtainin- in this case that pa/+ent of the appellate doc,et fees $as belatedl/ +ade four 4%5 +onths after the lapse of the period for appeal, it appears clear to us that the *3 did not ac>uire =urisdiction over petitioner9s appeal e?cept to order its dis+issal, as it ri-htfull/ did. Thus, the Septe+ber ', '((8 decision of the RT* has passed to the real+ of finalit/ and beca+e e?ecutor/ b/ operation of la$. 4"nderscorin- ours.5 The ri-ht to appeal is not a natural ri-ht. It is also not part of due process. It is +erel/ a statutor/ privile-e and +a/ be e?ercised onl/ in the +anner and in accordance $ith the provisions of la$. Thus, one $ho see,s to avail of the ri-ht to appeal +ust co+pl/ $ith the re>uire+ents of the Rules. Failure to do so often leads to the loss of the ri-ht to appeal. Hith re-ard to petitioner9s plea for a liberal treat+ent of the rules in order to pro+ote substantial =ustice, the *ourt finds the sa+e to be $ithout +erit. It is true that the rules +a/ be rela?ed for persuasive and $ei-ht/ reasons to relieve a liti-ant fro+ an in=ustice co++ensurate $ith his failure to co+pl/ $ith the prescribed procedures.00@o$ever, it +ust be stressed that procedural rules are not to be belittled or dis+issed si+pl/ because their non6observance +a/ have pre=udiced a part/9s substantive ri-hts. !i,e all rules, the/ are re>uired to be follo$ed e?cept onl/ for the +ost persuasive of reasons $hen the/ +a/ be rela?ed. 02

In this case, petitioner has not sho$n an/ reason such as fraud, accident, +ista,e, e?cusable ne-li-ence, or a si+ilar supervenin- casualt/ $hich should =ustif/ the rela?ation of the rules.0% The e?planation advanced b/ petitioner9s counsel that the failure to pa/ the appellate doc,et and other le-al fees $ithin the prescribed period $as due to his e?tre+el/ heav/ $or,load and b/ e?cusable inadvertence does not convince us. *"ERE!ORE, the petition is DEN#ED. The Resolutions dated October '&, 011% and Nove+ber 0%, 011& of the *ourt of 3ppeals in *367.R. *V "DN (&206D are hereb/ A!!#RMED. Hith costs a-ainst the petitioner. SO ORD R D. MART#N S. V#LLARAMA, )R. 3ssociate .ustice H *ON*"R: RENATO C. CORONA *hief .ustice *hairperson TERES#TA ). LEONARDO+DE CASTRO 3ssociate .ustice ROBERTO A. ABADL 3ssociate .ustice * RTIFI*3TION LUCAS P. BERSAM#N 3ssociate .ustice

Pursuant to Section '2, 3rticle VIII of the '(8) *onstitution, I certif/ that the conclusions in the above Decision had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt9s Division. RENATO C. CORONA *hief .ustice

!oot&ot,s
L

Desi-nated additional +e+ber per Raffle dated 3u-ust 0%, 01'' vice 3ssociate .ustice Mariano *. Del *astillo $ho recused hi+self fro+ the case due to close relation to one of the parties.
'

Rollo, pp. 00, 0%60A. Penned b/ 3ssociate .ustice Santia-o .avier Ranada $ith 3ssociate .ustices Marina !. #u;on and Mario !. 7uariVa III concurrin-.
0

Id. at 81680. Penned b/ .ud-e Fortunito !. Madrona. Doc,eted as *ivil *ase No. 1261%8. Rollo, pp. )86)(. Id. at 216)&. Id. at &0, &&.

&

TCT No. '2%2'1 '1%A%' '2%2'' ((881 (&20& '118'& '118'A '118') '118'8 '1%A2( '1%A%1 '1%A%0 '1%A%2 '1'11A '%A('& '%A('A Total
)

A6ou&t 4'((& to '(((5 P 002,8(8.%% 0&A,0&&.'' '%&,('2.(A &21,'0%.22 '((,A'%.0% '(%,1%1.11 '(%,1%1.11 '(%,1%1.11 '%(,)(8.88 '(8,'&'.0( '(8,A&(.22 2'8,0&0.8& '(8,(%'.&) ','(',%('.8%

A6ou&t 4011'601105

(88,'%(.)) ((',A1).(1 P %,'(2,00'.8% P ',()(,)&).A) P 6,172,.7..-1

Id. at %8, &2. TCT No. '2%2'1 '1%A%' '2%2'' ((881 (&20& '118'& '118'A '118') '118'8 '1%A2( '1%A%1 '1%A%0 '1%A%2 '1'11A A6ou&t 4'((& to '(((5 P &,'%1,&0&.&1 &,882,%18.11 2,2&1,1A&.&1 '0,')',000.11 %,&80,(81.11 %,%&&,111.11 %,%&&,111.11 %,%&&,111.11 2,%2(,0A1.11 %,&%(,2(0.11 %,&A',1&A.11 ),21A,80&.&1 %,&A),&2A.11 0),2&&,A81.11 A6ou&t 4011'601105

'%A('& '%A('A Total

8

P ),&A0,2)1.A1 ),&88,82A.11 P (A,0)0,(&1.&1 P '&,'&',01A.A1 P 111,929,1-7.10

S *. 0&2. Repa'ment of 21cessive Collections.MHhen an assess+ent of basic real propert/ ta? or an/ other ta? levied under this Title, is found to be ille-al or erroneous and the ta? is accordin-l/ reduced or ad=usted, the ta?pa/er +a/ file a $ritten clai+ for refund or credit for ta?es and interests $ith the provincial or cit/ treasurer $ithin t$o 405 /ears fro+ the date the ta?pa/er is entitled to such reduction or ad=ust+ent. ????
(

Rollo, p. 82. Id. at 8%68&. Id. at 8A. Id. at 00. Id. at (16(). Id. at 0A.

'1

''

'0

'2

'%

'&

S *TION '. Ho0 to compute time. M In co+putin- an/ period of ti+e prescribed or allo$ed b/ these Rules, or b/ order of the court, or b/ an/ applicable statute, the da/ of the act or event fro+ $hich the desi-nated period of ti+e be-ins to run is to be e?cluded and the date of perfor+ance included. If the last da/ of the period, as thus co+puted, falls on a Saturda/, a Sunda/, or a le-al holida/ in the place $here the court sits, the ti+e shall not run until the ne?t $or,in- da/.
'A

Caspe v. Court of Appeals, 7.R. No. '%0&2&, .une '&, 011A, %(1 S*R3 &88, &('. ,uevarra v. Court of Appeals( No. !6%2)'%( .anuar/ '&, '(88, '&) S*R3 20. Lee v. Repu)lic( No. !6'&10), .anuar/ 2', '(A%, '1 S*R3 A&, A).

')

'8

'(

*rovince of Camarines "ur v. Heirs of Agustin *ato, 7.R. No. '&'18%, .ul/ 0, 01'1, A00 S*R3 A%%, A&0, citin- M.A. "antander Construction( 6nc. v. $illanueva( %8% Phil. &11, &1& 4011%5.
01

See La&aro v. Court of Appeals, 7.R. No. '2))A', 3pril A, 0111, 221 S*R3 018, 0'1. 7.R. No. '2(&(A, .anuar/ 0%, 011A, %)( S*R3 &(%, A126A1%. Navarro v. Metropolitan Bank and rust Co., 7.R. No. '2812', Ma/ 0), 011%, %0( S*R3 %2(, %%A.

0'

00

02

Meatmasters 6nternational Corporation v. Lelis 6ntegrated .evelopment Corporation( 7.R. No. 'A2100, Februar/ 08, 011&, %&0 S*R3 A0A, A22, citin- La&aro v. Court of Appeals, supra note 01 at 0'%.
0%

See 7am)ao v. Court of Appeals( 7.R. No. '%18(%, Nove+ber 0), 0111, 2%A S*R3 '%', '%).

Republic of the Philippines

SUPREME COURT Manila FIRST DIVISION G.R. No. 1693-6 )u:4 27, 2011

"E#RS O! MARGAR#TO PABAUS, &%6,:4, !EL#C#ANA P. MASACOTE, MERL#NDA P. CA#L#NG, MAGU#NDA P. ARCLETA, ADELA#DA PABAUS, RAUL MORGADO AND LEOPOLDO MORGADO, Petitioners, vs. "E#RS O! AMANDA 7UT#AMCO, &%6,:4, )OSE!#NA TAN, AND MO#SES, V#RG#N#A, ROGEL#O, ERL#NDA, ANA AND ERNESTO, %:: su/&%6,' 7UT#AMCO, Respondents. D V#LLARAMA, )R., J.: #/ $a/ of petition' for revie$ on certiorari, petitioners @eirs of Mar-arito Pabaus challen-e the .une '1, 011% Decision0 of the *ourt of 3ppeals 4*35 in *367.R. *V No. A&8&%. The *3 affir+ed the October 8, '((( .ud-+ent2 of the Re-ional Trial *ourt 4RT*5 of #utuan *it/, #ranch ' in *ivil *ase No. %%8( declarin- void petitioners9 title and orderin- the+ and all those clai+in- an/ ri-ht under the+ to vacate the land covered b/ said title and deliver possession thereof to the respondents. Sub=ect of this controvers/ are three ad=oinin- parcels of land located in #aran-a/ *aba/a$a, Municipalit/ of Tuba/, 3-usan Del Norte. !ot ', Plan Psu60'2'%8 $ith an area of &8,0(0 s>uare +eters, and !ot 0, Plan Psu6 0'2'%8, consistin- of ',A%' s>uare +eters, are re-istered in the na+e of 3+anda !. Jutia+co under Ori-inal *ertificate of Title 4O*T5 No. O6'1%% and Transfer *ertificate of Title 4T*T5 No. T6'%08,& respectivel/. !ot 0((%, Pls6)2A, $ith an area of 2&,1)) s>uare +eters, is o$ned b/ Mar-arito Pabaus and covered b/ O*T No. P6 8A%(.A O*T No. O6'1% $as issued pursuant to .udicial Decree No. R6'21)11 dated .ul/ (, '()1 $hich covered !ots ' and 0. 3 separate title, T*T No. T6'%08, $as subse>uentl/ issued to 3+anda Jutia+co for !ot 0, thus partiall/ cancelin- O*T No. O6'1%. Mean$hile, O*T No. P68A%( $as issued to Mar-arito Pabaus on March '0, '()% pursuant to Free Patent No. 4S605'10. On Dece+ber 0A, '((A, respondents .osefina Tan, and Moises, Vir-inia, Ro-elio, rlinda, 3na and rnesto, all surna+ed Jutia+co, representin- the+selves as the heirs of 3+anda !. Jutia+co, filed a *o+plaint ) for *ancellation of O*T No. P68A%(, Recover/ of Possession and Da+a-es a-ainst the heirs of Mar-arito Pabaus, na+el/, petitioners Feliciana P. Masacote, Merlinda P. *ailin-, Ma-uinda P. 3rcleta, 3delaida Pabaus, Raul Mor-ado and !eopoldo Mor-ado. The case $as doc,eted as *ivil *ase No. %%8( in the RT* of #utuan *it/, #ranch '. Respondents alle-ed that petitioners ille-all/ entered upon their lands, harvested coconuts therein and built a house on the pre+ises, thus encroachin- a substantial portion of respondents9 propert/. Despite repeated de+ands and ob=ection b/ Moises Jutia+co, petitioners continued to occup/ the encroached portion and harvest the coconutsI petitioners even filed a cri+inal co+plaint a-ainst the respondents before the Office of the Provincial Prosecutor. Respondents averred that O*T No P68A%( issued to Mar-arito Pabaus is invalid as it substantiall/ includes a land alread/ covered b/ Decree No. N6'21)11 and O*T No. O6'1% issued on .ul/ (, '()1 in the na+e of 3+anda Jutia+co. Hhen Moises Jutia+co caused a resurve/ of the land, the relocation plan confir+ed that the free patent title of Mar-arito Pabaus overlapped substantiall/ the lot covered b/ O*T No. O6'1%. In their 3ns$er $ith *ounterclai+,8 petitioners ad+itted havin- -athered coconuts and cut trees on the contested properties, but asserted that the/ did so in the e?ercise of their ri-hts of do+inion as holders of O*T No. P68A%(. The/ also contended that it $as respondents $ho unla$full/ entered their propert/ and harvested coconuts therein. *itin- a s,etch plan prepared b/ n-r. Rosalinda V. De *asa, petitioners clai+ed it $as the respondents $ho encroached !ot ')18, *ad6(1& $hich is $ithin and part of O*T No. P68A%(. It $as pointed *ISION

out that $ith the clai+ of respondents of an alle-ed encroach+ent, respondents9 land area $ould have increased b/ &,&').&1 s>uare +eters 4or a total of A&,%%).&5 $hile that of petitioners $ould be decreased to onl/ 0(,&%A s>uare +eters. Petitioners li,e$ise averred that the co+plaint states no cause of action since the case $as not referred for)aranga' conciliation and respondents9 cause of action $as, in an/ event, alread/ barred b/ prescription, if not laches. In the pre6trial conference held on March '0, '((), the RT* issued an Order( $hich directed the conduct of a relocation surve/ to deter+ine if the land covered b/ petitioners9 title overlaps those in defendants9 titles. The three co++issioners $ho conducted the said surve/ $ere n-r. Ro+ulo staca, a private surve/or and the court6appointed co++issioner, 3ntonio !ibarios, .r., the representative of respondents, and n-r. Re-ino !o+arda, .r., petitioners9 representative. '1 It $as a-reed that the relocation surve/ shall be done b/ havin- the co++issioners e?a+ine the titles in >uestion and then surve/ the land to deter+ine if there $as indeed an overlappin- of titles and $ho has better ri-ht to the contested lands.'' Durin- the sa+e pre6trial conference, petitioners +anifested their intention to file an a+ended ans$er. The RT* -ave the+ five da/s $ithin $hich to see, leave of court to file the a+ended ans$er but the/ failed to co+pl/. Thus, the court considered petitioners to have $aived the filin- of said pleadin-. 3t the continuation of the pre6trial conference on .une 02, '((), the trial court infor+ed the parties of the follo$in- findin-s in the Relocation Surve/ Report'0 dated Ma/ 0), '((): ???? That, !ot 0, Psu60'2'%8 covered b/ T*TZT6'%08 issued in favor of 3+anda !. BJutia+coC is inside the lot covered b/ O*TZBPC68A%(, issued in favor of Mar-arito PabausI That, Portion of !ot ', Psu60'2'%8 covered b/ O*TZO6'1%, issued in favor of 3+anda !. BJutia+coC containin- an area of '&,A)& S>. M. is inside the lot covered b/ O*TZP68A%(, issued in favor of Mar-arito PabausI That, there is actuall/ an overlappin- in the issuance of titleBsC on the above6+entioned t$o 405 parcels of land, please refer to acco+pan/in- relocation plan and can be identified throu-h color le-endI That, the Technical Description of !ot ', Psu60'2'%8 of O*TZO6'1% has been properl/ verified and chec,ed a-ainst approved plan of Psu60'2'%8, approved in the na+e of 3+anda !. BJutia+coCI Finall/, that durin- the relocation surve/ nobod/ ob=ected and opposeBdC the findin-s conducted b/ the undersi-ned. ? ? ? ?'2 The Report $as acco+panied b/ a Relocation Plan'% $hich $as certified b/ n-r. staca as accuratel/ indicatin- the boundaries of the sub=ect properties. n-r. !ibarios, .r. and n-r. !o+arda, .r. also si-ned the Relocation Plan, e?pressin- their confor+it/ thereto. In the pre6trial conference held on .ul/ '), '((), petitioners9 counsel sou-ht leave of court to file an a+ended ans$er. In their 3+ended 3ns$er $ith *ounterclai+,'& petitioners reiterated that in n-r. De *asa9s s,etch plan $hich $as plotted in accordance $ith the description in the cadastral surve/, it $as respondents $ho encroached and clai+ed !ot ')18, *ad6(1& $ithin and part of O*T P68A%(. The/ further alle-ed M ???? '1. That plaintiffsB9C title to the propert/ in B>uestionC, ,no$n as O.*.T. No. '1% and T*T No. '%08 both re-istered in the na+e of 3+anda Jutia+co $ere both secured thru fraud, if not the said properties are situated a$a/, for a distance as ad=oinin- of defendants propert/, under the follo$incircu+stances:

'1.a. The sub=ect propert/ $as surve/ed b/ a private surve/or 3ntonio 3. !ibarios, .r. on Nove+ber 2 and &, '(A1, nonetheless, his license as 7eodetic n-ineer $as issued onl/ on Nove+ber '', B'(A&CI '1.b. #aseBdC on this fact, the surve/ plan or relocation surve/ $as approved b/ the Director of !andBsC, Nicanor 7. .or-e on .une (, '(A&I '1.c. Perspicacious e?a+ination of the technical description of plaintiffsB9C title under O*T No. '1% and T*T No. '%08, the #!!M is +ar,ed as No. %, $hich the tie line of PS" No. 0'2'%8, as co+pared BtoC defendantsB9C title under O*T No. P68A%(, the #!!M is +ar,ed as No. ', $hich the tie line of P!S )2AI ''. 3ctuall/, based on the fore-oin- observation, the properties of plaintiffs are a$a/ situated $ith the propert/ of defendantsI should plaintiffs insisted 4sic5 based on the relocation surve/ conducted b/ the co++issioner appointed b/ this @onorable *ourt, $hich defendants believed that there $as a +aneuver to hoa? and hood$in, the+selves, into believin- that plaintiffs properties are situated in the heart of defendants propert/, then their titles, coverin- their properties $ere secured thru fraud, $hich annul+ent of the sa+e is proper and $ithin the bounds of the la$. ? ? ? ?'A 3t the trial, plaintiffs presented as $itnesses Moises Jutia+co 4adopted son of 3+anda Jutia+co5, Fi-uracion Re-ala, Sr. 4for+er baran-a/ captain of Tuba/5, 3ntonio Pa/apa/a 4tenant of Moises Jutia+co5 and court6 appointed co++issioner n-r. staca, $hile the defendants presented Raul P. Mor-ado 4one of the heirs of Mar-arito Pabaus5, Francisco #a/len 4retired !and Mana-e+ent OfficerFDeput/ !and Inspector of the #ureau of !ands, #utuan *it/5, n-r. Rosalinda V. De *asa 47eodetic n-ineer I, D NR5 and 3+brocio P. 3lba 4retired !and Mana-e+ent Officer6*hief of !ands Mana-e+ent Services, * NRO6*abadbaran, 3-usan del Norte5. On October 8, '(((, the RT* rendered =ud-+ent in favor of the respondents and a-ainst the petitioners. Said court -ave credence to the findin- in the Relocation Surve/ Report that petitioners9 lot overlap respondents9 lands. It held that since the land in dispute $as alread/ under the private o$nership of the respondents and no lon-er part of the public do+ain, the sa+e could not have been the sub=ect of a free patent. 3s to the presu+ption of re-ularit/ in the perfor+ance of official dut/ invo,ed b/ the petitioners as far as the issuance of the free patent and title, the trial court pointed out that this cannot be appreciated in vie$ of the testi+on/ of n-r. De *asa that in conductin- the cadastral surve/, she $as not able to secure a cop/ of the title of the landholdin-s of 3+anda Jutia+co fro+ the Re-ister of Deeds, $hich is a vital docu+ent in the sche+e of operations. The trial court thus applied the rule that in case of t$o certificates of title issued to different persons over the sa+e land, the earlier in date +ust prevail. @ence, respondents9 O*T No. O6'1% is superior to petitioners9 O*T No. P68A%( $hich is a total nullit/. The fallo of the RT* decision reads: H@ R FOR , pre+ises considered, =ud-+ent is hereb/ rendered in favor of the plaintiffs and a-ainst the defendants, as follo$s: '. Declarin- as null and void a) initio BOri-inalC *ertificate of Title No. BPC68A%( and orderindefendants and all those clai+in- an/ ri-ht under the+ to vacate the land covered b/ said title and deliver possession thereof to the plaintiffs andFor other$ise refrain and desist perpetuall/ fro+ e?ercisin- an/ act of dispossession and encroach+ent over the sub=ect pre+isesI 0. Declarin- the plaintiffs as the true and le-al o$ner of the propert/ sub=ect of this caseI 2. Orderin- defendants to render an accountin- to the plaintiffs $ith respect to the inco+e of the coconuts in the area in conflict startin- fro+ Dece+ber 0A, '((A up to the ti+eGreconve/ance as herein directed is +ade, and to deliver or pa/ to the plaintiffs the inco+e $ith le-al interest thereon fro+ the date of filin- of the co+plaint in this caseB,C $hich is Dece+ber 0A, '((A, until the sa+e is paid or deliveredI and

%. Orderin- defendants to pa/ the plaintiffs, =ointl/ and severall/, the a+ount of P'2,')&.11 b/ $a/ of actual da+a-es, P&1,111.11 b/ $a/ of +oral da+a-es, the su+ of P21,111.11 b/ $a/ of attorne/Os fees and the cost of liti-ation in the a+ount of P)01.11. SO ORD R D.') On appeal, the *3 affir+ed the RT* rulin- and e+phasi;ed that petitioners are bound b/ the findin-s contained in the Relocation Surve/ Report and the Relocation Plan because not onl/ did the/ a-ree to the appoint+ent of the three co++issioners but the co++issioner representin- the+ also +anifested his confor+it/ to the findin-s. It noted that neither part/ posed an/ ob=ection $hile the surve/ $as on-oin- and that petitioners disputed the findin-s onl/ after it turned out adverse to the+. Since the settled rule is that a free patent issued over a private land is null and void and produces no le-al effects $hatsoever, and $ith the trial court9s findin- that the properties of respondents and petitioners overlapped as to certain areas, the *3 held that the trial court correctl/ declared as void the title of the petitioners. Moreover, the *3 cited previous rulin-s statin- that Ua certificate of title over a land issued pursuant to the Public !and !a$, $hen in conflict $ith one obtained on the sa+e date throu-h =udicial proceedin-s, +ust -ive $a/ to the latter,U and that Ua certificate of title issued pursuant to a decree of re-istration and a certificate of title issued in confor+it/ there$ith are on a hi-her level than a certificate of title based upon a patent issued b/ the Director of !ands.U'8 3--rieved, petitioners filed the instant petition ar-uin- that 66 I T@ *O"RT OF 3PP 3!S *OMMITT D R V RSI#! RROR IN 3FFIRMIN7 T@ !OH R *O"RT D *ISION T@3T P TITION RS9 !OT NO. 0((%, *OV R D #J O*T NO. P68A%(B,C R 7IST R D IN T@ N3M OF M3R73RITO P3#3"S OV R!3PP D R SPOND NTSB9C !OT 0 3ND !OT ', BR SP *TIV !JC *OV R D B#JC T*T NO. T6'%08 3ND O*T NO. O6 '1%...#OT@ R 7IST R D IN T@ N3M OF 3M3ND3 J"TI3M*O. II T@ *O"RT OF 3PP 3!S *OMMITT D R V RSI#! RROR IN R !JIN7 BONC T@ FINDIN7 OF PRIV3T S"RV JOR OR 7 OD TI* B N7R.C ROM"!O S. ST3*3 3PPOINT D #J T@ *O"RT H@O DIST"R# D T@ *3D3STR3! S"RV J *OND"*T D #J T@ 7OV RNM NT T@R" T@ D P3RTM NT OF NVIRONM NT 3ND N3T"R3! R SO"R* S.'( Petitioners contend that the ori-inal technical description of !ot 0((%, as per the '(A' public land surve/01, clearl/ sho$ed that respondents9 propert/ lies south of the land applied for b/ Mar-arito Pabaus. The +atter of encroach+ent $as li,e$ise refuted b/ n-r. De *asa $ho conducted the cadastral surve/ *3D (1& in Tuba/ and plotted the sub=ect lots on the cadastral +ap.0' The/ li,e$ise assailed the relocation surve/ underta,en solel/ b/ the court6appointed co++issioner, n-r. staca $hile the other t$o surve/ors did not perfor+ their respective tas,s or confir+ the -round verification conducted b/ n-r. staca. Hith the ad+ission b/ n-r. staca that there $ere five +issin- corners, there $as no precise and accurate -round verification +ade on the alle-ed overlappin-. Petitioners cite the testi+on/ of n-r. De *asa $hich $as based on the cadastral +ap she herself prepared sho$in- the respective locations of the sub=ect lots. The/ assert that the three -overn+ent $itnesses testified that the propert/ of Mar-arito Pabaus $as surve/ed based on e?istin- official records, and that the presu+ption of re-ularit/ in the perfor+ance of official dut/ should be upheld. Respondents, for their part, assert that petitioners9 assi-n+ent of errors delve on factual +atters $hich are not proper sub=ects of an appeal before this *ourt. The/ echo the trial court9s conclusion that petitioners9 title is void since it covers private land. 3s a -eneral rule, in petitions for revie$, the =urisdiction of this *ourt in cases brou-ht before it fro+ the *3 is li+ited to revie$in- >uestions of la$ $hich involves no e?a+ination of the probative value of the evidence presented b/ the liti-ants or an/ of the+. The Supre+e *ourt is not a trier of factsI it is not its function to anal/;e or $ei-h evidence all over a-ain.00 3ccordin-l/, findin-s of fact of the appellate court affir+in- those of the trial court are -enerall/ conclusive on this *ourt.

Nonetheless, =urisprudence has reco-ni;ed certain e?ceptions to the -eneral rule that findin-s of the fact b/ the *ourt of 3ppeals are not revie$able b/ the Supre+e *ourt. One such e?ception is $hen such findin-s are not sustained b/ the evidence.02 3nother is $hen the =ud-+ent of the *3 is based on +isapprehension of facts or overloo,ed certain relevant facts not disputed b/ the parties $hich, if properl/ considered, $ould =ustif/ a different conclusion.0% The case of overlappin- of titles necessitates the assistance of e?perts in the field of -eodetic en-ineerin-. The ver/ reason $h/ co++issioners $ere appointed b/ the trial court, upon a-ree+ent of the parties, $as precisel/ to +a,e an evaluation and anal/sis of the titles in conflict $ith each other. 7iven their bac,-round, e?pertise and e?perience, these co++issioners are in a better position to deter+ine $hich of the titles is valid. Thus, the trial court +a/ rel/ on their findin-s and conclusions.0& @o$ever, in overlappin- of titles disputes, it has al$a/s been the practice for the court to appoint a surve/or fro+ the -overn+ent land a-encies M the !and Re-istration 3uthorit/ or the D NR M to act as co++issioner.0A In this case, the trial court appointed a private surve/or in the person of n-r. staca $ho actuall/ conducted the relocation surve/ $hile the t$o other surve/ors chosen b/ the parties e?pressed their confor+it/ $ith the findin- of encroach+ent or overlappin- indicated in the Relocation Plan0) sub+itted to the court b/ n-r. staca. Said plan sho$ed that the area in conflict is on the northeastern portion $herein petitioners9 O*T No. P68A%( overlapped $ith respondents9 title 4O*T No. O6'1%5 b/ '&,A)& s>uare +eters. Here the respondents able to prove their clai+ of overlappin-W He rule in the ne-ative. "urve' is the process b/ $hich a parcel of land is +easured and its boundaries and contents ascertainedI also a +ap, plat or state+ent of the result of such surve/, $ith the courses and distances and the >uantit/ of the land.083 case of overlappin- of boundaries or encroach+ent depends on a reliable, if not accurate, verification surve/.0(To settle the present dispute, the parties a-reed to the conduct of a relocation surve/. The Manual for !and Surve/s in the Philippines 4M!SP521 provides for the follo$in- rules in conductin- relocation surve/s: Section &(2 6 The relocation of corners or re6establish+ent of boundar/ lines shall be +ade usin- the bearin-s, distances and areas approved b/ the Director of !ands or $ritten in the lease or Torrens title. Section &(% 6 The data used in +onu+entin- or relocatin- corners of approved surve/s shall be sub+itted to the #ureau of !ands for verification and approval. Ne$ corner +ar,s set on the -round shall be accuratel/ described in the field notes and indicated on the ori-inal plans on file in the #ureau of !ands. 4Italics supplied.5 In his Report, n-r. staca stated that he $as able to relocate so+e +issin- corners of the sub=ect lots: ???? #/ 3pril 0A, '((), the $hole surve/ tea+ to-ether $ith Mr. . *oncon and representatives fro+ the Plaintiffs and DeBfCendants returned to the area in >uestion to relocate +issin- corners of !ot ', Psu60'2'%8 of O*TZO6 '1%I !ot 0, Psu60'2'%8 of T*TZT6'%08I and O*TZP68A%(. He $ere able to relocate the follo$in- corners of: *ors. 0 Q % of !ot ', Psu60'2'%8 of O*TZO6'1%I cors. ) Q 8 of !ot ', Psu60'2'%8 of O*TZBOC6'1% $hich are identical to cors. '& Q 'A of O*TZP68A%(, respectivel/. He laid out +issin- cors. 2 Q 0 of !ot 0, Psu60'2'%8 of T*TZT6'%08 and +issin- cors. ' Q 2 of !ot ', Psu60'2'%8 of O*TZO6'1%. 3ll +issin- corners $hich $ere relocated $ere not /et planted $ith c/lindrical concrete +onu+ents pendin- court decision of the case. ? ? ? ?2' On cross6e?a+ination, n-r. staca testified as follo$s: ????

K In /our report, /ou stated that there +issin- corners: 2 and 0 of !ot 0I and +issin- corners ' and 2 of !ot '. Hhich of these three docu+ents, ?hibit S $hich is O*T No. O6'1% or ?hibit T $hich is T*T No. T6'%08 or O*T No. P68A%( in $hich there are +issin- cornersW 3 T*T No. T6'%08 has 2 +issin- cornersI and O*T No. O6'1% has 0 +issin- corners. K Hhen /ou sa/ +issin- corners, $hat do /ou +ean b/ thatW 3 Hell, based on the technical description, $e $ere not able to locate the corners because it +i-ht have been +oved or lost. K 3nd $hen /ou sa/ corners, /ou are referrin- to c/lindrical concrete +onu+entsW 3 Jes, sir. K Do /ou a-ree $ith +e Mr. Hitness that in order to locate the +issin- corners to proceed $ith the relocation surve/, /ou have to +a,e a point of referenceW 3 Jes. K 3nd that point of reference is found in the title itselfW 3 Jes, sir. K Do /ou a-ree $ith +e that the point of reference is #!!MW 3 No, that is a point of tie line. #ut the point of reference can be an/ of the corners $ithin the propert/. If /ou have sa/ ten corners, /ou can base fro+ the e?istin- corners. In other $ords, locali;e /our location. "nless the $hole propert/ is lost, +eanin- all +issin- corners are not reliable then /ou have to tie fro+ ,no$n #!!M 4#ureau of !ands !ocation Monu+ent5 That is established b/ a -eo-raphic position. K Do /ou a-ree $ith +e that in order to have an accurate relocation surve/, to deter+ine and to locate the +issin- corners, /ou have to base the relocation surve/ on the tie lineW 3 It depends. There are tie lines $hich are located U%1 ,ilo+etersU fro+ that point. The bi- error is there. So $e $ill not adopt all +onu+ents. 3n/$a/, the/ interrelated to each other. Jou can deter+ine it b/ doin- relocation surve/. Jou can chec, it out b/ their positions. So the allo$able for that is onl/ 21 centi+eters. ???? K Finall/, in /our resurve/ report $hich is ?hibit K, /ou +entioned that there $ere +issin- corners $hich $ere relocated and /ou said certain basis for the relocation if there are +issin- corners and /ou said that the river is not a reliable point or basis. Hhat did /ou base on /our relocation surve/ considerin- that there are +issin- cornersW 3 #ased on other e?istin- +onu+ents, sir. K Hhat for e?a+pleW 3 #ased on +/ report, I stated fro+ a ,no$n corners identified as cors. '1 and ( of !ot ', PS" 0'2'%8 of O*T ZO6'1% $hich are identical to corners ' and ') of O*T ZP68A%(. K Is this alread/ covered in /our reportW

3 Jes, and it is found on par. 0 of +/ report. ? ? ? ?20 The M!SP laid do$n specific rules re-ardin- tie lines, point of reference and overlappin- of ad=oinin- titled lands. In this case, records failed to disclose that the basis for relocatin- the +issin- corners $as sub+itted to the #ureau of !ands 4no$ !and Mana-e+ent #ureau5 for verification and approval as re>uired b/ Section &(%. This is crucial considerin- that the court6appointed co++issioner is a private surve/or and not a -overn+ent surve/or fro+ the !R3 or !M#6D NR. It bears stressin- that in ever/ land dispute, the ai+ of the courts is to protect the inte-rit/ of and +aintain inviolate the Torrens s/ste+ of land re-istration, as $ell as to uphold the la$I a resolution of the parties9 dispute is +erel/ a necessar/ conse>uence. 22 On the part of petitioners, their onl/ evidence to support their opposition to the clai+ of encroach+ent b/ the respondents is the cadastral +ap $hich indicated the boundar/ of respondents9 propert/ at the south of petitioners9 lot. #ut as ad+itted b/ n-r. De *asa, durin- the cadastral surve/ the/ conducted fro+ '(8A to '((A, the/ did not send a $ritten notice to the lando$ner 3+anda Jutia+co and that she plotted the boundaries of her propert/ based +erel/ on a ta? declaration because the cadastral surve/ tea+ failed to obtain copies of O*T No. O6'1% and T*T No. T6'%08 fro+ the Re-istr/ of Deeds.2% The M!SP specificall/ re>uired that relocation of boundar/ lines is to be +ade usin- the bearin-s, distances and areas approved b/ the Director of !ands or indicated in the Torrens titles. @ence, said cadastral +ap is not co+petent proof of the actual location and boundaries of respondents9 !ots ' and 0, Psu60'2'%8.1a0phi1 Indeed, $e have ruled that if the land covered b/ free patent $as a private land, the Director of !ands has no =urisdiction over it. Such free patent and the subse>uent certificate of title issued pursuant thereto are a nullit/.2&The a--rieved part/ +a/ initiate an action for cancellation of such title. In the recent case of .e ,u&man v. Ag)agala,2A the *ourt reiterated: The settled rule is that a free patent issued over a private land is null and void, and produces no le-al effects $hatsoever. Private o$nership of land 6 as $hen there is a prima facie proof of o$nership li,e a dul/ re-istered possessor/ infor+ation or a clear sho$in- of open, continuous, e?clusive, and notorious possession, b/ present or previous occupants 6 is not affected b/ the issuance of a free patent over the sa+e land, because the Public !and B!Ca$ applies onl/ to lands of the public do+ain. The Director of !ands has no authorit/ to -rant free patent to lands that have ceased to be public in character and have passed to private o$nership. *onse>uentl/, a certificate of title issued pursuant to a ho+estead patent parta,es of the nature of a certificate issued in a =udicial proceedin- onl/ if the land covered b/ it is reall/ a part of the disposable land of the public do+ain.2) *onsiderin-, ho$ever, that the clai+ of overlappin- has not been clearl/ established, it is pre+ature to declare the free patent issued to Mar-arito Pabaus null and void. Instead, the *ourt dee+s it +ore appropriate to re+and the case to the trial court for the conduct of a verificationFrelocation surve/ under the direction and supervision of the !M#6D NR. In the event that respondents9 clai+ of encroach+ent of '&,A)& s>uare +eters is found to be correct, the correspondin- ad=ust+ent in the +etes and bounds of petitioners9 propert/ should be reflected in O*T No. P68A%( $hich title $ill then have to be partiall/, not totall/, voided and the correspondin- a+end+ent as to the precise area and technical description of !ot 0((%, P!S )2A be entered b/ the Re-istr/ of Deeds. *"ERE!ORE, the Decision dated .une '1, 011% of the *ourt of 3ppeals in *367.R. *V No. A&8&% and .ud-+ent dated October 8, '((( of the Re-ional Trial *ourt of #utuan *it/, #ranch ' in *ivil *ase No. %%8( are S T 3SID . The case is R M3ND D to the said RT* $hich is hereb/ directed to order the !and Mana-e+ent #ureau of the D NR to conduct verificationFrelocation surve/ to deter+ine overlappin- of titles over !ots ' and 0, Psu60'2'%8 and !ot 0((%, P!S )2A covered b/ O*T No. O6'1%, T*T No. T6'%08 and O*T No. P68A%(, respectivel/, all of the Re-istr/ of Deeds for the Province of 3-usan del Norte. SO ORD R D. MART#N S. V#LLARAMA, )R. 3ssociate .ustice H *ON*"R:

RENATO C. CORONA *hief .ustice *hairperson TERES#TA ). LEONARDO+DE CASTRO 3ssociate .ustice LUCAS P. BERSAM#N 3ssociate .ustice

MAR#ANO C. DEL CAST#LLO 3ssociate .ustice * RTIFI*3TION

Pursuant to Section '2, 3rticle VIII of the '(8) *onstitution, I certif/ that the conclusions in the above Decision had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt9s Division. RENATO C. CORONA *hief .ustice

!oot&ot,s
'

Rollo, pp. 26'A.

Id. at 0'6%8. Penned b/ 3ssociate .ustice *elia *. !ibrea6!ea-o-o $ith 3ssociate .ustices 3rturo 7. Ta/a- and d-ardo 3. *a+ello concurrin-.
2

Records, pp. 0(062'%. Penned b/ .ud-e Marissa Macarai-67uillen. Id. at A. Id. at ). Id. at (. Id. at '6&. Id. at '%60'. Id. at %'6%%. Id. at A)6A(. Id. at %2. Id. at &A6&). Id. Id. at &8. Id. at )(688.

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'0

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Id. at 8%. Id. at 2'262'%. Rollo, pp. %26%&. Id. at ). Records, p. '(). Id. at 012.

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'8

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01

0'

00

@eirs of Marcelino *abal v. *abal, 7.R. No. '&2A0&, .ul/ 2', 011A, %() S*R3 21', 2'0, citin@anopol v. Shoe+art, Incorporated, 7.R. Nos. '2)))% Q '%8'8&, October %, 0110, 2(1 S*R3 %2(, %%)I St. Michael9s Institute v. Santos, 7.R. No. '%&081, Dece+ber %, 011', 2)' S*R3 282, 2(AI 7o v. *ourt of 3ppeals, 7.R. No. '&8(00, Ma/ 08, 011%, %21 S*R3 2&8, 2A%.
02

Sar+iento v. Ju, 7.R. No. '%'%2', 3u-ust 2, 011A, %() S*R3 &'2, &').

0%

state of d$ard Miller 7ri++ v. state of *harles Parsons and Patric, *. Parsons, 7.R. No. '&(8'1, October (, 011A, &1% S*R3 A), )&6)A, citin- Sa+pa/an v. *ourt of 3ppeals, 7.R. No. '&A2A1, .anuar/ '%, 011&, %%8 S*R3 001, 00(.
0&

Manoto, Realt/, Inc. v. *!T Realt/ Develop+ent *orporation, 7.R. Nos. '022%A, '2%28& Q '%8)A), Nove+ber 0(, 011&, %)A S*R3 21&, 22&622A.
0A

*a+brid-e Realt/ and Resources *orp. v. ridanus Develop+ent, Inc., 7.R. No. '&0%%&, .ul/ %, 0118, &&) S*R3 (A, '').
0)

Records, p. &8. #!3*N9S !3H DI*TION3RJ, Fifth dition, p. '0(A. *a+brid-e Realt/ and Resources *orp. v. ridanus Develop+ent, Inc., supra note 0A at '01. !ands 3d+inistrative Order No. %, .ul/ 2, '(81. Records, p. &A. TSN, n-r. Ro+ulo S. staca, 3pril 08, '(((, pp. '16'', ')6'8. *a+brid-e Realt/ and Resources *orp. v. ridanus Develop+ent, Inc., supra note 0A at '02. TSN, n-r. Rosalinda de *asa, Dece+ber '%, '((8, pp. '26'%. 3-ne v. Director of !ands, 7.R. Nos. %12(( Q )00&&, Februar/ A, '((1, '8' S*R3 )(2, 812. 7.R. No. 'A2&AA, Februar/ '(, 0118, &%A S*R3 0)8.

08

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Id. at 08A, citin- @eirs of Si+plicio Santia-o v. @eirs of Mariano . Santia-o, 7.R. No. '&'%%1, .une '), 0112, %1% S*R3 '(2, '((.

Republic of the Philippines

SUPREME COURT Manila N #3N* G.R. No. 180236 )%&u%/4 17, 2012

GEMMA P. CABAL#T, Petitioner, vs. COMM#SS#ON ON AUD#T+REG#ON V##, Respondent. ? 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6? G.R. No. 180391 !#LADEL!O S. AP#T, Petitioner, vs. COMM#SS#ON ON AUD#T ACOAB L,g%: %&' A'Gu'25%t2o&, R,g2o& V##, Respondent. ? 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6? G.R. No. 180392 LEONARDO G. OLA#VAR, 2& 12s 5%0%52t4 %s T/%&s0o/t%t2o& R,gu:%t2o& O==25,/ %&' O==25,/+#&+C1%/g, o= L%&' T/%&s0o/t%t2o& O==25,, )%g&%, P/o@2&5, o= Bo1o:, Petitioner, vs. "ON. PR#MO C. M#RO, 2& 12s o==252%: 5%0%52t4 %s D,0ut4 O63u's6%& =o/ V2s%4%s, EDGARDO G. CANTON, 2& 12s 5%0%52t4 %s G/%=t #&@,st2g%to/ O==25,/, ATT7. RO7 L. URSAL, 2& 12s 5%0%52t4 %s R,g2o&%: C:ust,/ D2/,5to/, Co662ss2o& o& Au'2t, C,3u C2t4, Respondents. D *ISION V#LLARAMA, )R., J.: Three e+plo/ees fro+ the !and Transportation Office 4!TO5 in .a-na, #ohol $ere found b/ the O+buds+an to have perpetrated a sche+e to defraud the -overn+ent of proper +otor vehicle re-istration fees. The/ no$ see, in the present consolidated petitions a =ud-+ent fro+ this *ourt annullin- the .anuar/ '8, 011A Decision' and Septe+ber 0', 011) Resolution0 of the *ourt of 3ppeals 4*35 $hich affir+ed $ith +odification the Decision2 of the Office of the O+buds+an6Visa/as dis+issin- the+ fro+ -overn+ent service. The facts follo$: On Septe+ber %, 011', the Philippine Star Ne$s, a local ne$spaper in *ebu *it/, reported that e+plo/ees of the !TO in .a-na, #ohol, are shortchan-in- the -overn+ent b/ ta+perin- $ith their inco+e reports.% 3ccordin-l/, Re-ional Director Ildefonso T. Deloria of the *o++ission on 3udit 4*O35 directed State 3uditors Teodocio D. *abalit and ++anuel !. *olo+a of the Provincial Revenue 3udit 7roup to conduct a fact6findin- investi-ation. 3 $idespread ta+perin- of official receipts of Motor Vehicle Re-istration durin- the /ears '((8, '(((, 0111 and 011' $as then discovered b/ the investi-ators. 3ccordin- to the investi-ators, a total of '1A receipts $ere ta+pered. The sche+e $as done b/ detachin- the Plate Release and O$ner9s cop/ fro+ the set of official receipts then t/pin- thereon the correct details correspondin- to the vehicle re-istered, the o$ner9s na+e and address, and the correct a+ount of re-istration fees. The other copies, consistin- of the copies for the *ollector, DP, Record, 3uditor, and Re-ional Office, +ean$hile, $ere t/ped on to +a,e it appear that the receipts $ere issued +ostl/ for the re-istration of +otorc/cles $ith +uch lo$er re-istration char-es. Incorrect na+es andFor addresses $ere also used on said file copies. The difference bet$een the a+ounts paid b/ the vehicle o$ners and the a+ounts appearin- on the file copies $ere then poc,eted b/ the perpetrators, and onl/ the lo$er a+ounts appearin- on the retained duplicate

file copies $ere reported in the Report of *ollections.& 3ccordin- to State 3uditors *abalit and *olo+a in their .oint63ffidavit, the sche+e $as perpetrated b/ !TO e+plo/ees !eonardo 7. Olaivar, 7e++a P. *abalit, Filadelfo S. 3pit and Sa+uel T. 3labat, and resulted in an unreported inco+e totalin- P'A(,A%0.&1.A On 3u-ust 8, 0110, *O3 Re-ional *luster Director 3tt/. Ro/ !. "rsal reported the ta+perin- of official receipts to Deput/ O+buds+an Pri+o *. Miro.) 3ccordin- to 3tt/. "rsal, the irre-ularit/ is penali;ed under 3rticle 0'), in relation to 3rticle ')' of the Revised Penal *odeI8 Section 24e5( of the 3nti67raft and *orrupt Practices 3ct, and li,e$ise violates Republic 3ct 4R.3.5 No. A)'2.'1 In a .oint valuation Report, 7raft Investi-ators Pio R. Dar-antes and Vir-inia Palanca6Santia-o found -rounds to conduct a preli+inar/ investi-ation.'' @ence, a for+al char-e for dishonest/ $as filed a-ainst Olaivar, *abalit, 3pit and 3labat before the Office of the O+buds+an6Visa/as, and the parties $ere re>uired to sub+it their counter6affidavits. In co+pliance, Olaivar, *abalit, 3pit and 3labat sub+itted separate counter6affidavits, all essentiall/ den/in,no$led-e and responsibilit/ for the ano+alies. 3s to Olaivar, he +aintained that the receipts $ere t/ped outside his office b/ re-ular and casual e+plo/ees. @e clai+ed that the receipts $ere presented to hi+ onl/ for si-nature and he does not receive the pa/+ent $hen he si-ns the receipts. '0 *abalit, for her part, clai+ed that her dut/ as cashier $as to receive collections turned over to her and to deposit the+ in the !and #an, of the Philippines in Ta-bilaran *it/. She clai+ed that she $as not even a$are of an/ ano+al/ in the collection of fees prior to the investi-ation.'2 3s to 3pit, he ad+itted that he countersi-ned the official receipts, but he too denied bein- a$are of an/ ille-al activit/ in their office. @e clai+ed that upon bein- infor+ed of the char-e, he verified the photocopies of the ta+pered receipts and $as surprised to find that the si-natures above his na+e $ere falsified.'% 3labat, +ean$hile, clai+ed he did not ta+per, alter or falsif/ an/ public docu+ent in the perfor+ance of his duties. @e insisted that the initial above his na+e on Official Receipt No. A%1&A180 $as 3pit9s, $hile the initial on Official Receipt No. A%1&A8'2 $as that of Olaivar. '& Durin- the hearin- before 7raft Investi-ator Pio R. Dar-antes, State 3uditor *abalit testified on the investi-ation he conducted in the !TO in .a-na, #ohol. @e testified that he $as furnished $ith the o$ner9s and duplicate copies of the ta+pered receipts. "pon co+parison of the O$ner9s cop/ $ith the *ollector or Record9s cop/, he noticed that the a+ounts sho$n in the ori-inal copies $ere +uch bi--er than those appearin- in the file copies. State 3uditor *abalit also declared that the basis for i+plicatin- Olaivar is the fact that his si-nature appears in all the '1A ta+pered official receipts and he si-ned as verified correct the Report of *ollections, $hich included the ta+pered receipts. 3s to 3pit and *abalit, the/ are the other si-natories of the official receipts.'A In so+e official receipts, the O$ner9s cop/ is si-ned b/ F.S. 3pit as *o+puter valuator, 7.P. *abalit as *ashier, and !eonardo Olaivar as District @ead, but their si-natures do not appear on the file copies. ') On Februar/ '0, 011%, the Office of the O+buds+an6Visa/as directed'8 the parties to sub+it their position papers pursuant to 3d+inistrative Order 43.O.5 No. '), dated Septe+ber ), 0112, a+endin- the Rules of Procedure of the Office of the O+buds+an.'( No cross6e?a+ination of State 3uditor *abalit $as therefore conducted. *o+pl/in- $ith the above Order, the *O3 sub+itted its position paper on March '8, 011%. Olaivar, *abalit and 3pit, for their part, respectivel/ sub+itted their position papers on 3pril 0(, 011%, March '8, 011% and March '&, 011%. In its position paper,01 the *O3 pointed out that the si-natures of *abalit, 3pit and Olaivar $ere indispensable to the issuance of the receipts. 3s to Olaivar, the ori-inal receipts bear his si-nature, thereb/ sho$in- that he approved of the a+ounts collected for the re-istration char-es. @o$ever, $hen the receipts $ere reported in the Report of *ollections, the data therein $ere alread/ ta+pered reflectin- a +uch lesser a+ount. #/ affi?in- his si-nature on the Report of *ollections and thereb/ attestin- that the entries therein $ere verified b/ hi+ as correct, he allo$ed the sche+e to be perpetrated. 3s to *abalit, the *O3 pointed out that as cashier, *abalit9s si-nature on the receipts si-nified that she received the re-istration fees. The correct a+ounts should have therefore appeared in the Report of *ollections, but as alread/ stated, lesser a+ounts appeared on the Report of *ollections, $hich she prepares. In the sa+e +anner, 3pit, as co+puter evaluator, also si-ned the sub=ect receipts allo$in- the irre-ularities to be perpetuated. 1avvphi1

In his position paper,0' Olaivar +ean$hile insisted that he had no participation in the ano+alies. @e stressed that his onl/ role in the issuance of the official receipts $as to revie$ and approve the applications, and that he $as the last one to si-n the official receipts. @e ar-ued that based on the standard procedure for the processin- of applications for re-istration of +otor vehicles, it could be deduced that there $as a concerted effort or conspirac/ a+on- the evaluator, t/pist and cashier, $hile he $as ,ept blind of their modus operandi. *abalit, for her part, >uestioned the findin-s of the investi-ators. She stressed in her position paper 00 that had there been a thorou-h investi-ation of the >uestioned official receipts, the auditors $ould have discovered that the si-natures appearin- above her na+e $ere actuall/ that of Olaivar. She outlined the standard paper flo$ of a re-ular transaction at the !TO. It be-ins $hen the re-istrant -oes to the co+puter evaluator for the co+putation of applicable fees and proceeds to the cashier for pa/+ent. 3fter pa/in-, the t/pist $ill prepare the official receipts consistin- of seven 4)5 copies, $hich $ill be routed to the co+puter evaluator, to the district head, and to the cashier for si-nature. The cashier retains the copies for the DP, Re-ional Office, *ollector and 3uditor, $hile the re+ainin- copies 4O$ner, Plate Release and Record9s cop/5 $ill be for$arded to the ReleasinSection for distribution and release. *abalit insisted that on several occasions Olaivar disre-arded the standard procedure and directl/ acco++odated so+e re-istrants $ho $ere either his friends or referred to hi+ b/ friends. For such transactions, Olaivar assu+es the functions of co+puter evaluator, t/pist and cashier, as he is the one $ho co+putes the fees, receives the pa/+ent and prepares the official receipts. Olaivar $ould then re+it the pa/+ent to her. 3s the cashier, she has to accept the pa/+ent as a +atter of +inisterial dut/. 3pit, +ean$hile, stressed in his position paper02 that the stro,es of the si-natures appearin- above his t/pe$ritten na+e on the official receipts are different, indicatin- that the sa+e are falsified. @e also e?plained that considerin- that the !TO in .a-na issues around 01 to 0& receipts a da/, he si-ned the receipts rel/in- on the faith that his co6e+plo/ees had properl/ acco+plished the for+s. @e also pointed out that n-r. Dano ad+itted si-nin- acco+plished official receipts $hen the re-ular co+puter encoder is out, $hich =ust sho$s that other personnel could have si-ned above the na+e of F.S. 3pit.la0phil On Ma/ 2, 011%, the Office of the O+buds+an6Visa/as rendered =ud-+ent findin- petitioners liable for dishonest/ for ta+perin- the official receipts to +a,e it appear that the/ collected lesser a+ounts than the/ actuall/ collected. The OM#6Visa/as ruled: H@ R FOR , pre+ises considered, it is hereb/ resolved that the follo$in- respondents be found -uilt/ of the ad+inistrative infraction of DIS@ON STJ and accordin-l/ be +eted out the penalt/ of DISMISS3! FROM T@ S RVI* $ith the accessor/ penalties of cancellation of civil service eli-ibilit/, forfeiture of retire+ent benefits and dis>ualification fro+ re6e+plo/+ent in the -overn+ent service: '. !eonardo 7. Olaivar 6Transportation Re-ulation Officer IIF OfficeBrC6In6*har-e !TO .a-na District Office .a-na, #oholI 0. 7e++a P. *abalit 6 *ashier II, !TO .a-na District Office .a-na, #oholI 2. Filadelpo S. 3pit 6 *ler, II, !TO .a-na District Office .a-na, #oholI The co+plaint a-ainst respondent Sa+uel T. 3labat, presentl/ the @ead of 3pprehension "nit of the Ta-bilaran *it/ !TO, is hereb/ DISMISS D for insufficienc/ of evidence. The co+plaint re-ardin- the !TO official receiptsFMVRRs issued b/ the !TO .a-na District Office, $hich are not covered b/ ori-inal copies are hereb/ DISMISS D $ithout pre=udice to the filin- of the appropriate char-es upon the recover/ of the ori-inal copies thereof. SO D *ID D.0%

Petitioners sou-ht reconsideration of the decision, but their +otions $ere denied b/ the O+buds+an. 0& Thus, the/ separatel/ sou-ht recourse fro+ the *3. On .anuar/ '8, 011A, the *3 pro+ul-ated the assailed Decision in *367.R. SP. Nos. 8A0&A, 8A2(% and 111%). The dispositive portion of the *3 decision reads, H@ R FOR , pre+ises considered, =ud-+ent is hereb/ rendered b/ "S DISMISSIN7 the instant consolidated petitions. The assailed decision of the Office of the O+buds+an6Visa/as dated Ma/ 2, 011% in OM#6V636106 1%'&6@ is hereb/ 3FFIRM D $ith a +odification that petitioner Olaivar be held ad+inistrativel/ liable for -ross ne-lect of dut/ $hich carries the sa+e penalt/ as provided for dishonest/. No pronounce+ent as to costs. SO ORD R D.0A 3ccordin- to the *3, it $as unbelievable that fro+ '((8 to 011', *abalit and 3pit perfor+ed vital functions b/ routinel/ si-nin- !TO official receipts but did not have an/ ,no$led-e of the irre-ularit/ in their office. Hith re-ard to Olaivar, the *3 believed that the ta+perin- of the receipts could have been avoided had he e?ercised the re>uired dili-ence in the perfor+ance of his duties. Thus, the *3 held hi+ liable +erel/ for -ross ne-lect of dut/. Petitioners sou-ht reconsideration of the *3 decision, but the *3 denied their +otions.0) @ence, the/ filed the instant petitions before the *ourt. In her petition, petitioner *abalit ar-ues that I. T@ @ONOR3#! *O"RT OF 3PP 3!S 7R3V !J RR D IN 3FFIRMIN7 T@ OM#"DSM3NOS D *ISION H@I*@ 73V R TRO3*TIV FF *T TO T@ N H 3DMINISTR3TIV ORD R NO. ') IN T@ PRO* DIN7S # !OH T@3T H3S 3!R 3DJ ON TRI3! IN 3**ORD3N* HIT@ 3DMINISTR3TIV ORD R NO. 1). II. T@ @ONOR3#! *O"RT OF 3PP 3!S 7R3V !J RR D IN @O!DIN7 T@3T 3!T@O"7@ T@ TRI3! TJP @ 3RIN7 "ND R 3DMINISTR3TIV ORD R NO. 1) DID NOT P"S@ T@R", P TITION R H3S STI!! 3**ORD D @ R RI7@T TO D" PRO* SS "ND R T@ S"MM3RJ PRO* DIN7S P"RS"3NT TO 3DMINISTR3TIV ORD R NO. '). III. T@ @ONOR3#! *O"RT OF 3PP 3!S *OMMITT D 3 R V RSI#! RROR H@ N IT 3FFIRM D T@ D *ISION OF R SPOND NT OM#"DSM3N D SPIT @3VIN7 F3I! D TO M3N 3 *3T 7ORI*3! R"!IN7 ON T@ ISS" OF H@ T@ R T@ K" STION D 3NDFOR FOR7 D SI7N3T"R S # !ON7 TO P TITION R 7 MM3 *3#3!IT. IV. T@ @ONOR3#! *O"RT OF 3PP 3!S *OMMITT D 3 R V RSI#! RROR H@ N IT F3I! D TO R"! ON T@ DO*TRIN3! V3!" 3NDFOR 3PP!I*3#I!ITJ OF T@ T3PI3DOR VS. OFFI* OF T@ OM#"DSM3N 47.R. B'0('0%C, M3R*@ '&, 01105 R"!IN7 @ R IN T@ INST3NT *3S .08 Mean$hile, 3pit interposes the follo$in- ar-u+ents in his petition: I. T@ *O"RT OF 3PP 3!S RR D IN !IMITIN7 3DMINISTR3TIV D" PRO* SS 3S 3N OPPORT"NITJ TO # @ 3RD ON!J. II. T@ *O"RT OF 3PP 3!S RR D IN *ON*!"DIN7 T@ D F NS OF P TITION R 3PIT 3S M R D NI3!. III. T@ *O"RT OF 3PP 3!S RR D IN ITS F3I!"R TO R *ONSID R T@ VID N* T@3T *! 3R!J PROV D T@3T T@ SI7N3T"R S 3#OV T@ N3M OF P TITION R 3PIT IN T@ K" STION D R * IPTS 3R 3!! FOR7 D 3ND F3!SIFI D. 0( 3s for Olaivar, he assails the *3 Decision raisin- the follo$in- issues:

I. H@ T@ R T@ @ONOR3#! *O"RT OF 3PP 3!S RR D IN FINDIN7 T@3T P TITION R ! ON3RDO 7. O!3IV3R IS 3DMINISTR3TIV !J !I3#! FOR 7ROSS N 7!I7 N* . II. H@ T@ R T@ @ONOR3#! *O"RT OF 3PP 3!S RR D H@ N IT @ !D T@3T P TITION R ! ON3RDO 7. O!3IV3R H3S NOT D NI D D" PRO* SS H@ N T@ OFFI* OF T@ OM#"DSM3N VIS3J3S FO"ND @IM 7"I!TJ FOR DIS@ON STJ 3ND M T D O"T T@ P N3!TJ OF DISMISS3! FROM S RVI* .21 On .anuar/ '&, 0118, said petitions $ere consolidated.2' ssentiall/, the issues for our resolution are: 4'5 $hether there $as a violation of the ri-ht to due process $hen the hearin- officer at the Office of the O+buds+an6Visa/as adopted the procedure under 3.O. No. ') not$ithstandin- the fact that the said a+endator/ order too, effect after the hearin-s had startedI and 405 $hether *abalit, 3pit and Olaivar are ad+inistrativel/ liable. 3s re-ards the first issue, petitioners claim that the' 0ere denied due process of la0 0hen the investigating la0'er proceeded to resolve the case )ased onl' on the affidavits and other evidence on record 0ithout conducting a formal hearing. he' lament that the case 0as su)mitted for decision 0ithout giving them opportunit' to present 0itnesses and cross-e1amine the 0itnesses against them. Petitioner *abalit also ar-ues that the Office of the O+buds+an erred in appl/in- the a+end+ents under 3.O. No. ') to the trial of the case, $hich $as alread/ in pro-ress under the old procedures under 3.O. No. 1). She stressed that under 3.O. No. 1), she had the ri-ht to choose $hether to avail of a for+al investi-ation or to sub+it the case for resolution on the basis of the evidence on record. @ere, she $as not -iven such option and $as +erel/ re>uired to sub+it her position paper. Petitioners9 ar-u+ents deserve scant consideration. Suffice to sa/, petitioners $ere not denied due process of la0 0hen the investigating la0'er proceeded to resolve the case )ased on the affidavits and other evidence on record. "ection 89):91: 20 Rule ;( of the Rules of Procedure of the Office of the O+buds+an, as a+ended b/ 3.O. No. '), plainl/ provides that the hearinofficer +a/ issue an order directin- the parties to file, $ithin ten da/s fro+ receipt of the order, their respective verified position papers on the basis of $hich, alon- $ith the attach+ents thereto, the hearin- officer +a/ consider the case sub+itted for decision. It is onl/ $hen the hearin- officer deter+ines that based on the evidence, there is a need to conduct clarificator/ hearin-s or for+al investi-ations under Section &4b5405 and Section &4b5425 that such further proceedin-s $ill be conducted. #ut the deter+ination of the necessit/ for further proceedin-s rests on the sound discretion of the hearin- officer. 3s the petitioners have utterl/ failed to sho$ an/ co-ent reason $h/ the hearin- officer9s deter+ination should be overturned, the deter+ination $ill not be disturbed b/ this *ourt. He li,e$ise find no +erit in their contention that the ne0 procedures under A.#. No. 1<( 0hich took effect 0hile the case 0as alread' undergoing trial )efore the hearing officer( should not have )een applied. The rule in this =urisdiction is that one does not have a vested ri-ht in procedural rules. In an( +r. v. Court of Appeals,22 the *ourt elucidated: Statutes re-ulatin- the procedure of the courts $ill be construed as applicable to actions pendin- and undeter+ined at the ti+e of their passa-e. Procedural la$s are retroactive in that sense and to that e?tent. The fact that procedural statutes +a/ so+eho$ affect the liti-ants9 ri-hts +a/ not preclude their retroactive application to pendin- actions. The retroactive application of procedural la$s is not violative of an/ ri-ht of a person $ho +a/ feel that he is adversel/ affected. Nor is the retroactive application of procedural statutes constitutionall/ ob=ectionable. The reason is that as a -eneral rule no vested ri-ht +a/ attach to, nor arise fro+, procedural la$s.#t 1%s 3,,& 1,:' t1%t ;% 0,/so& 1%s &o @,st,' /2g1t 2& %&4 0%/t25u:%/ /,6,'4, %&' % :2t2g%&t 5%&&ot 2&s2st o& t1, %00:25%t2o& to t1, t/2%: o= 12s 5%s,, C1,t1,/ 52@2: o/ 5/262&%:, o= %&4 ot1,/ t1%& t1, ,<2st2&g /u:,s o= 0/o5,'u/,. A +phasis supplied.5 Hhile the rule ad+its of certain e?ceptions, such as $hen the statute itself e?pressl/ or b/ necessar/ i+plication provides that pendin- actions are e?cepted fro+ its operation, or $here to appl/ it $ould i+pair vested ri-hts, petitioners failed to sho$ that application of 3.O. No. ') to their case $ould cause in=ustice to the+. Indeed, in

this case, the Office of the O+buds+an afforded petitioners ever/ opportunit/ to defend the+selves b/ allo$inthe+ to sub+it counter6affidavits, position papers, +e+oranda and other evidence in their defense. Since petitioners have been afforded the ri-ht to be heard and to defend the+selves, the/ cannot ri-htfull/ co+plain that the/ $ere denied due process of la$. Hell to re+e+ber, due process, as a constitutional precept, does not al$a/s and in all situations re>uire a trial6t/pe proceedin-. It is satisfied $hen a person is notified of the char-e a-ainst hi+ and -iven an opportunit/ to e?plain or defend hi+self. In ad+inistrative proceedin-s, the filin- of char-es and -ivin- reasonable opportunit/ for the person so char-ed to ans$er the accusations a-ainst hi+ constitute the +ini+u+ re>uire+ents of due process. More often, this opportunit/ is conferred throu-h $ritten pleadin-s that the parties sub+it to present their char-es and defenses. 2% #ut as lon- as a part/ is -iven the opportunit/ to defend his or her interests in due course, said part/ is not denied due process. 2& Neither is there +erit to *abalit9s assertion that she should have been investi-ated under the Uold rules of procedureU of the Office of the O+buds+an, and not under the Une$ rules.U In Marohomsalic v. Cole(2A $e clarified that the Office of the O+buds+an has onl/ one set of rules of procedure and that is 3.O. No. 1), series of '((1, as a+ended. There have been various a+end+ents +ade thereto but it has re+ained, to date, the o&:4 set of rules of procedure -overnin- cases filed in the Office of the O+buds+an. @ence, the phrase Uas a+endedU is correctl/ appended to 3.O. No. ) ever/ ti+e it is invo,ed. 3.O. No. ') is =ust one e?a+ple of these a+end+ents. But did the CA correctl' rule that petitioners Ca)alit and Apit are lia)le for dishonest' 0hile petitioner #laivar is lia)le for gross neglect of dut'= Ca)alit argues that the CA erred in affirming the decision of the #m)udsman finding her lia)le for dishonest'. "he asserts that it 0as not esta)lished )' su)stantial evidence that the forged signatures )elong to her. Mean0hile( Apit contends that the CA erred in not considering evidence 0hich proves that the signatures appearing a)ove his name are falsified. Ho0ever( 0e note that )oth Ca)alit and Apit raise essentiall' factual issues 0hich are not proper in petitions filed under Rule >8. "ettled 3urisprudence dictates that su)3ect to a fe0 e1ceptions( onl' 4uestions of la0 ma' )e )rought )efore the Court via a petition for revie0 on certiorari. 6n .iokno v. Cacdac(2) the Court held? ? ? ? BTChe scope of this *ourt9s =udicial revie$ of decisions of the *ourt of 3ppeals is -enerall/ confined onl/ to errors of la$, and >uestions of fact are not entertained. He elucidated on our fidelit/ to this rule, and $e said: Thus, o&:4 Fu,st2o&s o= :%C 6%4 3, 3/oug1t 34 t1, 0%/t2,s %&' 0%ss,' u0o& 34 t12s Cou/t 2& t1, ,<,/52s, o= 2ts 0oC,/ to /,@2,C. A:so, Gu'252%: /,@2,C 34 t12s Cou/t 'o,s &ot ,<t,&' to % /,,@%:u%t2o& o= t1, su==252,&54 o= t1, ,@2',&5, upon $hich the proper ? ? ? tribunal has based its deter+ination. 4 +phasis supplied.5 6t is aphoristic that a re-e1amination of factual findings cannot )e done through a petition for revie0 on certiorari under Rule >8 of the Rules of Court )ecause this Court is not a trier of facts@ it revie0s onl' 4uestions of la0. he "upreme Court is not dut'-)ound to anal'&e and 0eigh again the evidence considered in the proceedings )elo0.28 Here( the *3 affir+ed the findin-s of fact of the Office of the O+buds+an6Visa/as $hich are supported b/ substantial evidence such as affidavits of $itnesses and copies of the ta+pered official receipts. 2( The *3 found that a perusal of the >uestioned receipts $ould easil/ reveal the discrepancies bet$een the date, na+e and vehicle in the O$nerOs or Plate Release copies and the File, 3uditor, and Re-ional Office copies. It upheld the factual findin-s of the O+buds+an that petitioners *abalit and 3pit ta+pered $ith the duplicates of the official receipts to +a,e it appear that the/ collected a lesser a+ount. Their participation $as found to have been indispensable as the irre-ularities could not have been co++itted $ithout their participation. The/ also concealed the +isappropriation of public funds b/ falsif/in- the receipts. No0( superior courts are not triers of facts. Ahen the findings of fact of the #m)udsman are supported )' su)stantial evidence( it should )e considered as conclusive.%1 his Court recogni&es the e1pertise and independence of the #m)udsman and 0ill avoid interfering 0ith its findings a)sent a finding of grave a)use of discretion.%' Hence( )eing supported )' su)stantial evidence( 0e find no reason to distur) the factual findings of the #m)udsman 0hich are affirmed )' the CA.

3s for #laivar( he insists that the CA erred in holding him administrativel' lia)le for gross negligence 0hen he relied to a reasona)le e1tent and in good faith on the actions of his su)ordinates in the preparation of the applications for registration. He >uestions the appellate court9s findin- that he failed to e?ercise the re>uired dili-ence in the perfor+ance of his duties.1avvphi1 Ahile as stated a)ove( the general rule is that factual findings of the CA are not revie0a)le )' this Court( 0e find that #laivarBs case falls in one of the recogni&ed e1ceptions laid do0n in =urisprudence since the *39s findin-s re-ardin- his liabilit/ are pre+ised on the supposed absence of evidence but contradicted b/ the evidence on record.%0 The Office of the O+buds+an6Visa/as found Olaivar ad+inistrativel/ liable for dishonest/ $hile the *3 ruled that he +a/ not be held liable for dishonest/ supposedl/ for lac, of sufficient evidence. The *3 ruled that there $as no substantial evidence to sho$ that Olaivar participated in the sche+e, but the ta+perin- of the official receipts could have been avoided had he e?ercised the re>uired dili-ence in the perfor+ance of his duties as officer6in6char-e of the .a-na District Office. Thus, the *3 found hi+ liable onl/ for -ross ne-lect of dut/. This, ho$ever, is clear error on the part of the *3. For one, there is clear evidence that Olaivar $as involved in the ano+alies. Hitness .oselito Taladua cate-oricall/ declared in his affidavit%2 that he personall/ paid Olaivar the su+ of P0,A)& for the rene$al of re-istration of a =eep for $hich he $as issued Official Receipt No. %)A((8&2. Much to his dis+a/, Taladua later found out that his pa/+ent $as not reflected correctl/ in the Report of *ollections, and that the vehicle $as dee+ed unre-istered for the /ear 0111. More, *abalit pointed to Olaivar as the person behind the ano+al/ in the !TO6.a-na District Office. She narrated in her position paper that on several ti+es, Olaivar directl/ acco++odated so+e re-istrants and assu+ed the functions of co+puter evaluator, t/pist and cashier, and co+puted the fees, received pa/+ent and prepared the official receipts for those transactions. She also revealed that Olaivar $ould as, her for unused official receipts and $ould later return the duplicate copies to her $ith the cash collections. !ater, he $ould verif/ the Report of *ollections as correct.%% !i,e$ise, Motor Vehicle Inspector n-r. !o$ell 3. Dano confir+ed that in several instances, he $itnessed Olaivar t/pe the data hi+self in the official receipts even if the/ have a t/pist in the office to do the =ob. n-r. Dano added that after t/pin-, Olaivar personall/ brou-ht the acco+plished official receipts for hi+ 4 n-r. Dano5 to si-n.%& Moreover, .acinto .alop, the records officer of the !TO in .a-na, #ohol, illustrated ho$ the official receipts $ere ta+pered. @e disclosed that the correct char-es $ere t/ped in the O$ner9s cop/ and the Plate Release cop/ of the official receipts, but a +uch lo$er char-e and an incorrect address $ere indicated in the other copies. @e asserted that Olaivar $as responsible for ta+perin- the official receipts. %A Ne-lect of dut/ i+plies onl/ the failure to -ive proper attention to a tas, e?pected of an e+plo/ee arisin- fro+ either carelessness or indifference.%) @o$ever, the facts of this case sho$ +ore than a failure to +ind one9s tas,. Rather, the/ +anifest that Olaivar co++itted acts of dishonest/, $hich is defined as the conceal+ent or distortion of truth in a +atter of fact relevant to one9s office or connected $ith the perfor+ance of his dut/. It i+plies a disposition to lie, cheat, deceive, or defraudI untrust$orthinessI lac, of inte-rit/I lac, of honest/, probit/, or inte-rit/ in principle.%8 @ence, the *3 should have found Olaivar liable for dishonest/. #ut be that as it +a/, still, the *3 correctl/ i+posed the proper penalt/ upon Olaivar. "nder Section &0, Rule IV of the "nifor+ Rules on 3d+inistrative *ases in the *ivil Service, dishonest/, li,e -ross ne-lect of dut/, is classified as a -rave offense punishable b/ dis+issal even if co++itted for the first ti+e. %( "nder Section &8,&1 such penalt/ li,e$ise carries $ith it the accessor/ penalties of cancellation of civil service eli-ibilit/, forfeiture of retire+ent benefits and dis>ualification fro+ re6e+plo/+ent in the -overn+ent service. One final note. *abalit contends that pursuant to the o)iter in apiador v. #ffice of the #m)udsman(&' the #ffice of the #m)udsman can onl' recommend administrative sanctions and not directl' impose them. @o$ever, in #ffice of the #m)udsman v. Masing,&0 this *ourt has alread/ settled the issue $hen $e ruled that the po$er of the O+buds+an to deter+ine and i+pose ad+inistrative liabilit/ is not +erel/ reco++endator/ but actuall/ +andator/. He held,

He reiterated this rulin- in #ffice of the #m)udsman v. La3a, $here $e e+phasi;ed that Uthe O+buds+an9s order to re+ove, suspend, de+ote, fine, censure, or prosecute an officer or e+plo/ee is not +erel/ advisor/ or reco++endator/ but is actuall/ +andator/.U I+ple+entation of the order i+posin- the penalt/ is, ho$ever, to be coursed throu-h the proper officer. Recentl/, in #ffice of the #m)udsman v. Court of Appeals, $e also held P YHhile Section '&425 of R3 A))1 states that the O+buds+an has the po$er to Ureco++end ? ? ? re+oval, suspension, de+otion ? ? ?U of -overn+ent officials and e+plo/ees, the sa+e Section '&425 also states that the O+buds+an in the alternative +a/ U,&=o/5, 2ts '2s520:2&%/4 %ut1o/2t4 %s 0/o@2',' 2& S,5t2o& 21U of R3 A))1.9 4emphasis supplied.5&2 Subse>uentl/, in Ledesma v. Court of Appeals(&% and #ffice of the #m)udsman v. Court of Appeals(&& the *ourt upheld the O+buds+an9s po$er to i+pose the penalt/ of re+oval, suspension, de+otion, fine, censure, or prosecution of a public officer or e+plo/ee found to be at fault in the e?ercise of its ad+inistrative disciplinar/ authorit/. In #ffice of the #m)udsman v. Court of Appeals, $e held that the e?ercise of such po$er is $ell founded in the *onstitution and R.3. No. A))1, other$ise ,no$n as The O+buds+an 3ct of '(8(, thus: The *ourt further e?plained in Ledesma that the +andator/ character of the O+buds+an9s order i+posin- a sanction should not be interpreted as usurpation of the authorit/ of the head of office or an/ officer concerned. This is because the po$er of the O+buds+an to investi-ate and prosecute an/ ille-al act or o+ission of an/ public official is not an e?clusive authorit/ but a shared or concurrent authorit/ in respect of the offense char-ed. #/ statin- therefore that the O+buds+an Ureco++endsU the action to be ta,en a-ainst an errin- officer or e+plo/ee, the provisions in the *onstitution and in Republic 3ct No. A))1 intended that the i+ple+entation of the order be coursed throu-h the proper officer. *onse>uentl/ in Ledesma, the *ourt affir+ed the appellate court9s decision $hich had, in turn, affir+ed an order of the Office of the O+buds+an i+posin- the penalt/ of suspension on the errin- public official. &A The dut/ and privile-e of the O+buds+an to act as protector of the people a-ainst the ille-al and un=ust acts of those $ho are in the public service e+anate fro+ no less than the '(8) *onstitution. Section '0 of 3rticle SI thereof states: Section '0. The O+buds+an and his Deputies, as protectors of the people, shall act pro+ptl/ on co+plaints filed in an/ for+ or +anner a-ainst public officials or e+plo/ees of the 7overn+ent, or an/ subdivision, a-enc/ or instru+entalit/ thereof, includin- -overn+ent6o$ned or controlled corporations, and shall, in appropriate cases, notif/ the co+plainants of the action ta,en and the result thereof. In addition, Section '& 425 of R.3. No. A))1, provides: S *. '&. *o0ers( %unctions and .uties. M The Office of the O+buds+an shall have the follo$in- po$ers, functions and duties: ???? 425 Direct the officer concerned to ta,e appropriate action a-ainst a public officer or e+plo/ee at fault or $ho ne-lects to perfor+ an act or dischar-e a dut/ re>uired b/ la$, and reco++end his re+oval, suspension, de+otion, fine, censure, or prosecution, and ensure co+pliance there$ithI or enforce its disciplinar/ authorit/ as provided in Section 0' of this 3ct: *rovided, That the refusal b/ an/ officer $ithout =ust cause to co+pl/ $ith an order of the O+buds+an to re+ove, suspend, de+ote, fine, censure or prosecute an officer or e+plo/ee $ho is at fault or $ho ne-lects to perfor+ an act or dischar-e a dut/ re>uired b/ la$ shall be a -round for disciplinar/ action a-ainst said officer. ???? Section '( of R.3. No. A))1 -rants to the O+buds+an the authorit/ to act on all ad+inistrative co+plaints:

S *. '(. Administrative Complaints. M The O+buds+an shall act on all co+plaints relatin-, but not li+ited to acts or o+issions $hich: 4'5 3re contrar/ to la$ or re-ulationI 405 3re unreasonable, unfair, oppressive or discri+inator/I 425 3re inconsistent $ith the -eneral course of an a-enc/9s functions, thou-h in accordance $ith la$I 4%5 Proceed fro+ a +ista,e of la$ or an arbitrar/ ascertain+ent of factsI 4&5 3re in the e?ercise of discretionar/ po$ers but for an i+proper purposeI or 4A5 3re other$ise irre-ular, i++oral or devoid of =ustification. In the e?ercise of his duties, the O+buds+an is -iven full ad+inistrative disciplinar/ authorit/. @is po$er is not li+ited +erel/ to receivin-, processin- co+plaints, or reco++endin- penalties. @e is to conduct investi-ations, hold hearin-s, su++on $itnesses and re>uire production of evidence and place respondents under preventive suspension. This includes the po$er to i+pose the penalt/ of re+oval, suspension, de+otion, fine, or censure of a public officer or e+plo/ee. &) The provisions in R.3. No. A))1 ta,en to-ether reveal the +anifest intent of the la$+a,ers to besto$ on the Office of the O+buds+an full ad+inistrative disciplinar/ authorit/. These provisions cover the entire -a+ut of ad+inistrative ad=udication $hich entails the authorit/ to, inter alia, receive co+plaints, conduct investi-ations, hold hearin-s in accordance $ith its rules of procedure, su++on $itnesses and re>uire the production of docu+ents, place under preventive suspension public officers and e+plo/ees pendin- an investi-ation, deter+ine the appropriate penalt/ i+posable on errin- public officers or e+plo/ees as $arranted b/ the evidence, and, necessaril/, i+pose the said penalt/. &8 Thus, it is settled that the Office of the O+buds+an can directl/ i+poseadministrative sanctions. He find it $orth/ to state at this point that public service re>uires inte-rit/ and discipline. 1avvphi1 For this reason, public servants +ust e?hibit at all ti+es the hi-hest sense of honest/ and dedication to dut/. #/ the ver/ nature of their duties and responsibilities, public officers and e+plo/ees +ust faithfull/ adhere to hold sacred and render inviolate the constitutional principle that a public office is a public trustI and +ust at all ti+es be accountable to the people, serve the+ $ith ut+ost responsibilit/, inte-rit/, lo/alt/ and efficienc/. &( *"ERE!ORE, the petitions for revie$ on certiorari are DEN#ED. The assailed Decision dated .anuar/ '8, 011A and Resolution dated Septe+ber 0', 011) of the *ourt of 3ppeals in *367.R. SP. Nos. 8A0&A, 8A2(% and 111%) are A!!#RMED $ith MOD#!#CAT#ON. Petitioner !eonardo 7. Olaivar is held ad+inistrativel/ liable forD#S"ONEST7 and +eted the penalt/ of dis+issal fro+ the service as $ell as the accessor/ penalties inherent to said penalt/. Hith costs a-ainst petitioners. SO ORD R D. MART#N S. V#LLARAMA, )R. 3ssociate .ustice H *ON*"R: RENATO C. CORONA *hief .ustice ANTON#O T. CARP#O PRESB#TERO ). VELASCO, )R.

3ssociate .ustice TERES#TA ). LEONARDO+DE CASTRO 3ssociate .ustice D#OSDADO M. PERALTA 3ssociate .ustice MAR#ANO C. DEL CAST#LLO 3ssociate .ustice )OSE PORTUGAL PERE( 3ssociate .ustice MAR#A LOURDES P. A. SERENO 3ssociate .ustice

3ssociate .ustice 4On official leave5 ARTURO D. BR#ONL 3ssociate .ustice LUCAS P. BERSAM#N 3ssociate .ustice ROBERTO A. ABAD 3ssociate .ustice )OSE CATRAL MENDO(A 3ssociate .ustice B#ENVEN#DO L. RE7ES 3ssociate .ustice

ESTELA M. PERLAS+BERNABE 3ssociate .ustice * RTIFI*3TION

Pursuant to Section '2, 3rticle VIII of the '(8) *onstitution, I certif/ that the conclusions in the above Decision had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt. RENATO C. CORONA *hief .ustice

!oot&ot,s
L

On official leave.

'

Rollo 47.R. No. '8102A5, pp. %'6&A. Penned b/ 3ssociate .ustice Vicente !. Jap $ith 3ssociate .ustices 3rsenio .. Ma-pale and 3polinario D. #ruselas, .r. concurrin-.
0

Rollo 47.R. No. '812%05, pp. %A6%8. Penned b/ 3ssociate .ustice 3ntonio !. Villa+or $ith 3ssociate .ustices Isaias P. Dicdican and Stephen *. *ru; concurrin-.
2

Dated Ma/ 2, 011%I records, Folder 2, pp. &%A6&&A. *3 rollo 4*367.R. SP. No. 111%)5, p. )2. Narrative Report, records, Folder ', pp. A6'&'. Records, Folder ', pp. 26%. Id. at 0.
8

&

3rt. 0'). Malversation of pu)lic funds or propert'. - *resumption of malversation. P 3n/ public officer $ho, b/ reason of the duties of his office, is accountable for public funds or

propert/, shall appropriate the sa+e, or shall ta,e or +isappropriate or shall consent, or throu-h abandon+ent or ne-li-ence, shall per+it an/ other person to ta,e such public funds or propert/, $holl/ or partiall/, or shall other$ise be -uilt/ of the +isappropriation or +alversation of such funds or propert/, ? ? ? ???? 3rt. ')'. %alsification )' pu)lic officer( emplo'ee or notar' or ecclesiastical minister. P The penalt/ ofprision ma'or and a fine not to e?ceed &,111 pesos shall be i+posed upon an/ public officer, e+plo/ee, or notar/ $ho, ta,in- advanta-e of his official position, shall falsif/ a docu+ent b/ co++ittin- an/ of the follo$in- acts: '. *ounterfeitin- or i+itatin- an/ hand$ritin-, si-nature or rubricI ????
(

R.A. No. ;C1D( Section 2. Corrupt *ractices of *u)lic #fficers.- ? ? ? ???? 4e5 *ausin- an/ undue in=ur/ to an/ part/, includin- the 7overn+ent, or -ivin- an/ private part/ an/ un$arranted benefits, advanta-e or preference in the dischar-e of his official ad+inistrative or =udicial functions throu-h +anifest partialit/, evident bad faith or -ross ine?cusable ne-li-ence. This provision shall appl/ to officers and e+plo/ees of offices or -overn+ent corporations char-ed $ith the -rant of licenses or per+its or other concessions.

'1

*ode of *onduct and thical Standards for Public Officials and +plo/ees. Records, Folder ', pp. '&26'&%. Id. at '8&6'8A. Id. at 'A(6')1. Id. at ')'6')2. Id. at '&(6'A'. TSN, Februar/ &, 0112, pp. A6'(, records, Folder 0, pp. 0A&60)8. TSN, Februar/ '1, 0112, pp. %'6&&, id. at 21162'%. Records, Folder 0, p. %&&. 3d+inistrative Order No. 1). Records, Folder 2, pp. %)A6%8). Id. at &2%6&%1. Id. at &'16&'). Id. at &116&12. Supra note 2 at &&&6&&A.

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Records, Folder 2, pp. A2%6A28. Supra note ' at &&6&A. Supra note 0. Rollo 47.R. No. '8102A5, p. '8. Rollo 47.R. No. '812%'5, pp. ')6'8. Rollo 47.R. No. '812%05, p. 0'. Rollo 47.R. No. '8102A5, pp. 0106012. Section &. Administrative ad3udication@ Ho0 conducted. M ???? b5 If the hearin- officer finds no sufficient cause to $arrant further proceedin-s on the basis of the affidavits and other evidence sub+itted b/ the parties, the co+plaint +a/ be dis+issed. Other$ise, he shall issue an Order 4or Orders5 for an/ of the follo$in- purposes: '. To direct the parties to file, $ithin ten 4'15 da/s fro+ receipt of the Order, their respective verified position papers. The position papers shall contain onl/ those char-es, defenses and other clai+s contained in the affidavits and pleadin-s filed b/ the parties. 3n/ additional relevant affidavits andFor docu+entar/ evidence +a/ be attached b/ the parties to their position papers. On the basis of the position papers, affidavits and other pleadin-s filed, the @earin- Officer +a/ consider the case sub+itted for resolution. ????

0A

0)

08

0(

21

2'

20

22

7.R. No. '2A2A8, .anuar/ 'A, 0110, 2)2 S*R3 &0%, &2A, citin- 3-palo, Statutor/ *onstruction, '(8A ed., pp. 0A(60)0.
2%

#ffice of the #m)udsman v. ,alicia( 7.R. No. 'A))'', October '1, 0118, &A8 S*R3 20), 2%%. Ca'ago v. Lina, 7.R. No. '%(&2(, .anuar/ '(, 011&, %%( S*R3 0(, %%6%&. 7.R. No. 'A(('8, Februar/ 0), 0118, &%) S*R3 (8, ''0. 7.R. No. 'A8%)&, .ul/ %, 011), &0A S*R3 %%1, %A1. Id. at %A16%A'. See Narrative Report, supra note &. #livare& v. "andigan)a'an( 7.R. No. ''8&22, October %, '((&, 0%8 S*R3 )11, )'&.

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2A

2)

28

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%1

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See +ao v. Court of Appeals( 7.R. Nos. '1%A1% Q '''002, October A, '((&, 0%( S*R3 2&, %0 and 7a)ut v. #ffice of the #m)udsman( 7.R. No. '''21%, .une '), '((%, 022 S*R3 2'1, 2'%.
%0

See H'att 2levators and 2scalators Corporation v. Cathedral Heights Building Comple1 Association( 6nc.(7.R. No. ')288', Dece+ber ', 01'1, A2A S*R3 %1', %1&6%1A.
%2

Records, Folder ', p. '%A.

%%

Id. at ''. Id. at '1. Id. at (. AEonuevo v. Ru)io, 3.M. No. P61%6')80, .ul/ 21, 011%, %2& S*R3 %21, %2&. +apson v. Civil "ervice Commission, 7.R. No. '8(%)(, 3pril '0, 01'', A%8 S*R3 &20, &%26&%%. See Anon'mous v. Curamen( 3.M. No. P61860&%(, .une '8, 01'1, A0' S*R3 0'0, 0'(. S *. &8. Administrative .isa)ilities 6nherent in Certain *enalties . M a. The penalt/ of dis+issal shall carr/ $ith it that of cancellation of eli-ibilit/, forfeiture of retire+ent benefits, and the perpetual dis>ualification for ree+plo/+ent in the -overn+ent service, unless other$ise provided in the decision. ????

%&

%A

%)

%8

%(

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7.R. No. '0('0%, March '&, 0110, 2)( S*R3 200. 7.R. Nos. 'A&%'A, 'A&&8% and 'A&)2', .anuar/ 00, 0118, &%0 S*R3 0&2. Id. at 0)0. 7.R. No. 'A'A0(, .ul/ 0(, 011&, %A& S*R3 %2), %%(. 7.R. No. 'A1A)&, .une 'A, 011A, %(' S*R3 (0, '18. Id.

&0

&2

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#ffice of the #m)udsman v. Lucero( 7.R. No. 'A8)'8, Nove+ber 0%, 011A, &18 S*R3 '1A, ''06 ''2.
&8

#ffice of the #m)udsman v. Court of Appeals( 7.R. No. 'A81)(, .ul/ '), 011), &0) S*R3 )(8, 81A6 81)I#ffice of the #m)udsman v. Court of Appeals, 7.R. No. 'A)8%%, Nove+ber 00, 011A, &1) S*R3 &(2, A'1.
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"alum)ides( +r. v. #ffice of the #m)udsman, 7.R. No. '81('), 3pril 02, 01'1, A'( S*R3 2'2, 220.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 163602 S,0t,63,/ 7, 2011

SPOUSES EULOG#A MAN#LA %&' RAMON MAN#LA, Petitioners, vs. SPOUSES EDERL#NDA GALLARDO+MAN(O %&' DAN#EL MAN(O, Respondents. D *ISION

V#LLARAMA, )R., J.: This resolves the petition for revie$ on certiorari under Rule %& of the '(() Rules of *ivil Procedure, as a+ended, assailin- the Decision' dated Februar/ 0), 011% and Resolution0 dated Ma/ '%, 011% of the *ourt of 3ppeals 4*35 in *367.R. SP No. %(((8 $hich -ranted the petition for annul+ent of =ud-+ent filed b/ the respondents. The controvers/ ste++ed fro+ an action for e=ect+ent2 filed b/ the respondents, spouses derlinda 7allardo6 Man;o and Daniel Man;o, a-ainst the petitioners, spouses Ra+on and ulo-ia Manila, before the Metropolitan Trial *ourt 4MeT*5 of !as PiVas *it/, #ranch )( 4*ivil *ase No. 2&2)5. The facts as su++ari;ed b/ the said court are as follo$s: On .une 21, '(80, derlinda 7allardo leased t$o 405 parcels of land situated alon- Real St., Manu/o, !as PiVas, Metro Manila, to ulo-ia Manila for a period of ten 4'15 /ears at a +onthl/ rental4s5 of P0,111.11 for the first t$o /ears, and thereafter an increase of ten 4'15 percent ever/ after t$o /ears. The/ also a-reed that the lessee shall have the option to bu/ the propert/ $ithin t$o 405 /ears fro+ the date of e?ecution of the contract of lease at a fair +ar,et value of One @undred and Fift/ Thousand Pesos 4P'&1,111.115 The contract of lease e?pired on .ul/ ', '((0 but the lessee continued in possession of the propert/ despite a for+al de+and letter dated 3u-ust 8, '((0, to vacate the sa+e and pa/ the rental arreara-es. In a letter repl/ dated 3u-ust '0, '((0, herein defendant clai+ed that no rental fee is due because she alle-edl/ beca+e the o$ner of the propert/ at the ti+e she co++unicated to the plaintiff her desire to e?ercise the option to bu/ the said propert/. Their disa-ree+ent $as later brou-ht to the #aran-a/ for conciliation but the parties failed to reach a co+pro+ise, hence the present action.% On .ul/ '%, '((2, the MeT* rendered its decision,& the dispositive portion of $hich reads: H@ R FOR , a =ud-+ent is rendered in favor of the plaintiffs orderin- the defendants: '5 To vacate the sub=ect parcels of land and surrender possession thereof upon the pa/+ent b/ the plaintiff of one6half of the value of the buildin- constructed b/ the lessee. Should the lessor refuse to rei+burse the aforesaid a+ount, the lessee shall have the option to e?ercise her ri-ht under 3rticle 'A)8 of the Ne$ *ivil *odeI 05 To pa/ rental arreara-es up to .ul/ ', '((0 in the a+ount of T$o @undred T$ent/ i-ht Thousand and Fort/ Four 81F'11 Pesos 4P008,1%%.815I 25 To pa/, as reasonable co+pensation for their continued $ithholdin- of possession of the sub=ect lots, the su+ of Three Thousand T$o @undred and T$ent/ One Pesos 4P2,00'.115 ever/ +onth, co++encin- .ul/ 0, '((0 up to such ti+e that the/ finall/ /ield possession thereof to the plaintiffs, sub=ect to an increase of ten percent 4'1E5 after ever/ t$o 405 /ears fro+ said dateI and %5 To pa/ plaintiffs attorne/9s fees in the su+ of Five Thousand Pesos 4P&,111.115 No pronounce+ent as to costs. SO ORD R D.A Petitioners appealed to the Re-ional Trial *ourt 4RT*5 of Ma,ati *it/, #ranch A2 4*ivil *ase No. (262)225 $hich reversed the MeT*. The RT* found that petitioners have in fact e?ercised their option to bu/ the leased propert/ but the respondents refused to honor the sa+e. It noted that respondents even infor+ed the petitioners about foreclosure proceedin-s on their propert/, $hereupon the petitioners tried to intervene b/ tenderin- rental pa/+ents but the respondents advised the+ to $ithhold such pa/+ents until the appeal of respondents in the case the/ filed a-ainst the Rural #an, of #o+bon 4*a+arines Sur5, Inc. 4*ivil *ase No. A1A05 is resolved. It

further noted that respondents9 intention to sell the lot to petitioners is confir+ed b/ the fact that the for+er allo$ed the latter to construct a buildin- of stron- +aterials on the pre+ises. The RT* thus decreed: IN T@ !I7@T OF T@ FOR 7OIN7, =ud-+ent is hereb/ rendered reversin- the decision of the lo$er court dated .ul/ '%, '((2 and orderin- as follo$s: '5 That plaintiffs e?ecute a deed of absolute sale over that parcel of land sub=ect of the *ontract of !ease dated .une 21, '(80 after full pa/+ent of defendants of the purchase price of P'&1,111.11I 05 That plaintiffs pa/ the costs of suit. SO ORD R D.) Respondents filed a +otion for reconsideration on Dece+ber 02, '((%. In its Order dated March 0%, '((&, the RT* denied the +otion for havin- been filed be/ond the fifteen 4'&56da/ period considerin- that respondents received a cop/ of the decision on Dece+ber ), '((%.8 *onse>uentl/, the Nove+ber '8, '((% decision of the RT* beca+e final and e?ecutor/.( On Dece+ber 00, '((8, respondents filed a petition for annul+ent of the RT* decision in the *3. Respondents assailed the RT* for orderin- the+ to sell their propert/ to petitioners ar-uin- that said court9s appellate =urisdiction in e=ect+ent cases is li+ited to the deter+ination of $ho is entitled to the ph/sical possession of real propert/ and the onl/ =ud-+ent it can render in favor of the defendant is to recover his costs, $hich =ud-+ent is conclusive onl/ on the issue of possession and does not affect the o$nership of the land. The/ contended that the sale of real propert/ b/ one part/ to another +a/ be ordered b/ the RT* onl/ in a case for specific perfor+ance fallin- under its ori-inal e?clusive =urisdiction, not in the e?ercise of its appellate =urisdiction in an e=ect+ent case. Respondents also alle-ed that the petition for annul+ent is the onl/ re+ed/ available to the+ because the ordinar/ re+edies of ne$ trial, appeal, petition for relief or other appropriate re+edies are no lon-er available throu-h no fault on their part. #/ Decision dated Februar/ 0), 011%, the *3 -ranted the petition, annulled the Nove+ber '8, '((% RT* decision and reinstated the .ul/ '%, '((2 MeT* decision. On the issue of lac, of =urisdiction raised b/ the respondents, the *3 ruled as follo$s: It +ust be stressed that the +ain action before the Metropolitan Trial *ourt is one for e=ect+ent -rounded on the e?piration of the parties9 contract of lease. 3nd said court, findin- that petitioners have a valid ri-ht to as, for the e=ect+ent of private respondents, ordered the latter to vacate the pre+ises and to pa/ their rentals in arrears. To Our +ind, $hat the respondent court should have done in the e?ercise of its appellate =urisdiction, $as to confine itself to the issue of $hether or not petitioners have a valid cause of action for e=ect+ent a-ainst the private respondents. "nfortunatel/, in the decision herein sou-ht to be annulled, the respondent court $ent further than $hat is re>uired of it as an appellate court $hen it ordered the petitioners to sell their properties to the private respondents. In a ver/ real sense, the respondent court +ateriall/ chan-ed the nature of petitioners9 cause of action b/ decidin- the >uestion of o$nership even as the appealed case involves onl/ the issue of prior ph/sical possession $hich, in ever/ e=ect+ent suit, is the onl/ >uestion to be resolved. 3s it $ere, the respondent court converted the issue to one for specific perfor+ance $hich falls under its ori-inal, not appellate =urisdiction. Sad to sa/, this cannot be done b/ the respondent court in an appealed e=ect+ent case because the essential criterion of appellate =urisdiction is that it revises and corrects the proceedin-s in a cause alread/ instituted and does not create that cause 4Marbur/ v. Madison, ' *ranch 4".S.5, '2), ')0, 0 !. edition A1, cited in '& *orpus .uris )0)5. It follo$s that the respondent Re-ional Trial *ourt clearl/ acted $ithout =urisdiction $hen it ordered the petitioners to sell their properties to the private respondents. The order to sell can be +ade onl/ b/ the respondent court in an action for specific perfor+ance under its e?clusive ori-inal =urisdiction, and not in the e?ercise of its appellate =urisdiction in an appealed e=ect+ent suit, as in this case. Horse, the relief -ranted b/ the sa+e court $as not even pra/ed for b/ the private respondents in their 3ns$er and position paper before the MT*, $hereat the/ onl/ as,ed for the dis+issal of the co+plaint filed a-ainst the+.'1 4 +phasis supplied.5

Hith the denial of their +otion for reconsideration, petitioners filed the present petition raisin- the follo$inissues: 3 H@ T@ R T@ *O"RT OF 3PP 3!S *OMMITT D 3 7R3V RROR IN 3NN"!!IN7 T@ ."D7M NT #J T@ R 7ION3! TRI3! *O"RT OF M3N3TI *ITJ NOTHIT@ST3NDIN7 T@ FINDIN7 T@3T T@ ORDIN3RJ R M DI S OF N H TRI3!, 3PP 3!, P TITION FOR R !I F OR OT@ R 3PPROPRI3T R M DI S H R !OST T@RO"7@ T@ F3"!T OF T@ R SPOND NTS # H@ T@ R T@ *O"RT OF 3PP 3!S *OMMITT D 3 7R3V RROR IN 3NN"!!IN7 T@ ."D7M NT #J T@ R 7ION3! TRI3! *O"RT OF M3N3TI *ITJ ON T@ 7RO"ND OF U!3*N OF ."RISDI*TIONU H@ N IT @3S NOT # N S@OHN T@3T T@ R 7ION3! TRI3! *O"RT OF M3N3TI *ITJ @3D NO ."RISDI*TION OV R T@ P RSON OF T@ R SPOND NTS OR T@ S"#. *T M3TT R OF T@ *!3IM '' The petition is +eritorious. 3 petition for annul+ent of =ud-+ents or final orders of a Re-ional Trial *ourt in civil actions can onl/ be availed of $here Uthe ordinar/ re+edies of ne$ trial, appeal, petition for relief or other appropriate re+edies are no lon-er available throu-h no fault of the petitioner.U'0 It is a re+ed/ -ranted onl/ under e?ceptional circu+stances and such action is never resorted to as a substitute for a part/9s o$n ne-lect in not pro+ptl/ availin- of the ordinar/ or other appropriate re+edies.'2 The onl/ -rounds provided in Sec. 0, Rule %) are e?trinsic fraud and lac, of =urisdiction. In this case, respondents alle-ed that the loss of re+edies a-ainst the RT* decision $as attributable to their for+er counsel9s late filin- of their +otion for reconsideration and failure to file an/ proper petition to set aside the said decision. The/ clai+ed that the/ had been constantl/ follo$in- up the status of the case $ith their counsel, 3tt/. .ose 3tien;a, $ho repeatedl/ assured the+ he $as on top of the situation and $ould even -et an-r/ if repeatedl/ as,ed about the case. Out of their lon- and close relationship $ith 3tt/. 3tien;a and due re-ard for his poor health due to his nu+erous and chronic illnesses $hich re>uired fre>uent prolon-ed confine+ent at the hospital, respondents li,e$ise desisted fro+ hirin- the services of another la$/er to assist 3tt/. 3tien;a, until the latter9s death on Septe+ber '1, '((8. Thus, it $as onl/ on Nove+ber '((8 that respondents en-a-ed the services of their ne$ counsel $ho filed the petition for annul+ent of =ud-+ent in the *3. He are not persuaded b/ respondents9 asseveration. The/ could have directl/ follo$ed up the status of their case $ith the RT* especiall/ durin- the period of 3tt/. 3tien;a9s hospital confine+ent. 3s part/ liti-ants, the/ should have constantl/ +onitored the pro-ress of their case. @avin- co+pletel/ entrusted their case to their for+er counsel and believin- his $ord that ever/thin- is alri-ht, the/ have no one to bla+e but the+selves $hen it turned out that their opportunit/ to appeal and other re+edies fro+ the adverse rulin- of the RT* could no lon-er be availed of due to their counsel9s ne-lect. That respondents continued to rel/ on the services of their counsel not$ithstandin- his chronic ail+ents that had hi+ confined for lon- periods at the hospital is unthin,able. Such ne-li-ence of counsel is bindin- on the client, especiall/ $hen the latter offered no plausible e?planation for his o$n inaction. The *ourt has held that $hen a part/ retains the services of a la$/er, he is bound b/ his counsel9s actions and decisions re-ardin- the conduct of the case. This is true especiall/ $here he does not co+plain a-ainst the +anner his counsel handles the suit.'% The oft6repeated principle is that an action for annul+ent of =ud-+ent cannot and is not a substitute for the lost re+ed/ of appeal. '& In an/ event, the petition for annul+ent $as based not on fraudulent assurances or ne-li-ent acts of their counsel, but on lac, of =urisdiction. Petitioners assail the *3 in holdin- that the RT* decision is void because it -ranted a relief inconsistent $ith the nature of an e=ect+ent suit and not even pra/ed for b/ the respondents in their ans$er. The/ contend that $hatever +a/be >uestionable in the decision is a -round for assi-n+ent of errors on appeal M or in certain cases,

as -round for a special civil action for certiorari under Rule A& M and not as -round for its annul+ent. On the other hand, respondents assert that the *3, bein- a hi-her court, has the po$er to adopt, reverse or +odif/ the findin-s of the RT* in this case. The/ point out that the *3 in the e?ercise of its sound discretion found the RT*9s findin-s unsupported b/ the evidence on record $hich also indicated that the loss of ordinar/ re+edies of appeal, ne$ trial and petition for revie$ $as not due to the fault of the respondents. He a-ree $ith the petitioners. !ac, of =urisdiction as a -round for annul+ent of =ud-+ent refers to either lac, of =urisdiction over the person of the defendin- part/ or over the sub=ect +atter of the clai+.'A In a petition for annul+ent of =ud-+ent based on lac, of =urisdiction, petitioner +ust sho$ not +erel/ an abuse of =urisdictional discretion but an absolute :%5> of =urisdiction. !ac, of =urisdiction +eans absence of or no =urisdiction, that is, the court should not have ta,en co-ni;ance of the petition because the la$ does not vest it $ith =urisdiction over the sub=ect +atter. .urisdiction over the nature of the action or sub=ect +atter is conferred b/ la$.') There is no dispute that the RT* is vested $ith appellate =urisdiction over e=ect+ent cases decided b/ the MeT*, MT* or M*T*. He note that petitioners9 attac, on the validit/ of the RT* decision pertains to a relief erroneousl/ -ranted on appeal, and be/ond the scope of =ud-+ent provided in Section A 4no$ Section ')5 of Rule )1.'8 Hhile the court in an e=ect+ent case +a/ delve on the issue of o$nership or possession de =ure solel/ for the purpose of resolvin- the issue of possession de facto, it has no =urisdiction to settle $ith finalit/ the issue of o$nership'( and an/ pronounce+ent +ade b/ it on the >uestion of o$nership is provisional in nature. 01 3 =ud-+ent in a forcible entr/ or detainer case disposes of no other issue than possession and establishes onl/ $ho has the ri-ht of possession, but b/ no +eans constitutes a bar to an action for deter+ination of $ho has the ri-ht or title of o$nership.0' He have held that althou-h it $as proper for the RT*, on appeal in the e=ect+ent suit, to delve on the issue of o$nership and receive evidence on possession de 3ure, it cannot ad=udicate $ith se+blance of finalit/ the o$nership of the propert/ to either part/ b/ orderin- the cancellation of the T*T. 00 In this case, the RT* acted in e?cess of its =urisdiction in decidin- the appeal of respondents $hen, instead of si+pl/ dis+issin- the co+plaint and a$ardin- an/ counterclai+ for costs due to the defendants 4petitioners5, it ordered the respondents6lessors to e?ecute a deed of absolute sale in favor of the petitioners6lessees, on the basis of its o$n interpretation of the *ontract of !ease $hich -ranted petitioners the option to bu/ the leased pre+ises $ithin a certain period 4t$o /ears fro+ date of e?ecution5 and for a fi?ed price 4P'&1,111.115.02 This cannot be done in an e=ect+ent case $here the onl/ issue for resolution is $ho bet$een the parties is entitled to the ph/sical possession of the propert/. Such erroneous -rant of relief to the defendants on appeal, ho$ever, is but an e?ercise of =urisdiction b/ the RT*. .urisdiction is not the sa+e as the e?ercise of =urisdiction. 3s distin-uished fro+ the e?ercise of =urisdiction, =urisdiction is the authorit/ to decide a cause, and not the decision rendered therein. 0% The -round for annul+ent of the decision is absence of, or no, =urisdictionI that is, the court should not have ta,en co-ni;ance of the petition because the la$ does not vest it $ith =urisdiction over the sub=ect +atter. 0& Thus, $hile respondents assailed the content of the RT* decision, the/ failed to sho$ that the RT* did not have the authorit/ to decide the case on appeal. 3s $e held in JbaVe; v. *ourt of 3ppeals: 0A On the first issue, $e feel that respondent court acted inadvertentl/ $hen it set aside the RT* rulin- relative to the validit/ of the substituted service of su++ons over the persons of the petitioners in the MT* level. He +ust not lose si-ht of the fact that $hat $as filed before respondent court is an action to annul the RT* =ud-+ent and not a petition for revie$. 3nnul+ent of =ud-+ent +a/ either be based on the -round that a =ud-+ent is void for $ant of =urisdiction or that the =ud-+ent $as obtained b/ e?trinsic fraud. There is nothin- in the records that could co-entl/ sho$ that the RT* lac,ed =urisdiction. *hiefl/, Section 00 of #.P. #l-. '0(, other$ise ,no$n as the .udiciar/ Reor-ani;ation 3ct of '(81, vests upon the RT* the e?ercise of an Uappellate =urisdiction over all cases decided b/ the Metropolitan Trial *ourts, Municipal Trial *ourts, and Municipal *ircuit Trial *ourts in their respective territorial =urisdictions.U *learl/ then, $hen the RT* too, co-ni;ance of petitioners9 appeal fro+ the adverse decision of the MT* in the e=ect+ent suit, it 4RT*5 $as un>uestionabl/ e?ercisin- its appellate =urisdiction as +andated b/ la$. Perforce, its decision +a/ not be annulled on the basis of lac, of =urisdiction as it has, be/ond cavil, =urisdiction to decide the appeal.0) 4 +phasis supplied.5

The *3 therefore erred in annullin- the Nove+ber '8, '((% RT* decision on the -round of lac, of =urisdiction as said court had =urisdiction to ta,e co-ni;ance of petitioners9 appeal. 1avvphi1 On the ti+eliness of the petition for annul+ent of =ud-+ent filed $ith the *3, Section 2, Rule %) of the Rules of *ourt provides that a petition for annul+ent of =ud-+ent based on e?trinsic fraud +ust be filed $ithin four /ears fro+ its discover/I and if based on lac, of =urisdiction, before it is barred b/ laches or estoppel. The principle of laches or Ustale de+andsU ordains that the failure or ne-lect, for an unreasonable and une?plained len-th of ti+e, to do that $hich b/ e?ercisin- due dili-ence could or should have been done earlierPne-li-ence or o+ission to assert a ri-ht $ithin a reasonable ti+e, $arrants a presu+ption that the part/ entitled to assert it has abandoned it or declined to assert it.08 There is no absolute rule as to $hat constitutes laches or staleness of de+andI each case is to be deter+ined accordin- to its particular circu+stances. 0( @ere, respondents9 failure to assail the RT* rulin- in a petition for revie$ or certiorari before the *3, rendered the sa+e final and e?ecutor/. @avin- lost these re+edies due to their lethar-/ for three and a half /ears, the/ cannot no$ be per+itted to assail ane$ the said rulin- rendered b/ the RT* in the e?ercise of its appellate =urisdiction. Their inaction and ne-lect to pursue available re+edies to set aside the RT* decision for such len-th of ti+e, $ithout an/ acceptable e?planation other than the $ord of a for+er counsel $ho alread/ passed a$a/, constitutes unreasonable dela/ $arrantin- the presu+ption that the/ have declined to assert their ri-ht over the leased pre+ises $hich continued to be in the possession of the petitioners. *learl/, respondents9 petition to annul the final RT* decision is barred under the e>uitable doctrine of laches. H@ R FOR , the petition for revie$ on certiorari is 7R3NT D. The Decision dated Februar/ 0), 011% and Resolution dated Ma/ '%, 011% of the *ourt of 3ppeals in *367.R. SP No. %(((8 are S T 3SID . The petition for annul+ent of =ud-+ent filed b/ herein respondents is DISMISS D. No costs. SO ORD R D. MART#N S. V#LLARAMA, )R. 3ssociate .ustice H *ON*"R: RENATO C. CORONA *hief .ustice *hairperson TERES#TA ). LEONARDO+DE CASTRO 3ssociate .ustice LUCAS P. BERSAM#N 3ssociate .ustice

MAR#ANO C. DEL CAST#LLO 3ssociate .ustice * RTIFI*3TION

Pursuant to Section '2, 3rticle VIII of the '(8) *onstitution, I certif/ that the conclusions in the above Decision had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt9s Division. RENATO C. CORONA *hief .ustice

!oot&ot,s

'

Rollo, pp. '160'. Penned b/ Presidin- .ustice *ancio *. 7arcia 4retired Me+ber of this *ourt5 $ith 3ssociate .ustices Renato *. Dacudao and Danilo #. Pine concurrin-.
0

Id. at 00. Records, pp. 86'0. Id. at '%&. Id. at '%&6'%8. Penned b/ .ud-e 3lfredo R. nri>ue;. Id. at '%)6'%8. Id. at 0%2. Id. at 0A%. Id. at 0A). Rollo, pp. 0160'. Id. at 28. Sec. ', Rule %), '(() Rules of *ivil Procedure.

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!a;aro v. Rural #an, of Francisco #ala-tas 4#ulacan5, Inc., 7.R. No. '2(8(&, 3u-ust '&, 0112, %1( S*R3 '8A, '(0.
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Tolentino v. !eviste, 7.R. No. '&A''8, Nove+ber '(, 011%, %%2 S*R3 0)%, 080, citin- 3larcon v. *ourt of 3ppeals, 7.R. No. '0A810, .anuar/ 08, 0111, 202 S*R3 )'A, )0&.
'&

Mercado v. Securit/ #an, *orporation, 7.R. No. 'A1%%&, Februar/ 'A, 011A, %80 S*R3 &1', &'%. Tolentino v. !eviste, supra note '% at 08%.

'A

')

Durisol Philippines, Inc. v. *ourt of 3ppeals, 7.R. No. '0''1A, Februar/ 01, 0110, 2)) S*R3 2&2, 2&8.
'8

S *. '). .ud-+ent. 66 If after trial the court finds that the alle-ations of the co+plaint are true, it shall render =ud-+ent in favor of the plaintiff for the restitution of the pre+ises, the su+ =ustl/ due as arrears of rent or as reasonable co+pensation for the use and occupation of the pre+ises, attorne/9s fees and costs. If it finds that said alle-ations are not true, it shall render =ud-+ent for the defendant to recover his costs. If a counterclai+ is established, the court shall render =ud-+ent for the su+ found in arrears fro+ either part/ and a$ard costs as =ustice re>uires.
'(

See Pa; v. Re/es, 7.R. No. '0)%2(, March (, 0111, 20) S*R3 A1&, A1(6A'1I 3;nar #rothers Realt/ *o+pan/ v. *ourt of 3ppeals, 7.R. No. '08'10, March ), 0111, 20) S*R3 2&(, 2)062)2I *arreon v. *ourt of 3ppeals, 7.R. No. ''01%', .une 00, '((8, 0(' S*R3 )8, 88. Sec. 'A, Rule )1, '(() Rules of *ivil Procedure states: S *. 'A. Resolvin- defense of o$nership. M Hhen the defendant raises the defense of o$nership in his pleadin-s and the >uestion of possession cannot be resolved $ithout decidinthe issue of o$nership, the issue of o$nership shall be resolved onl/ to deter+ine the issue of possession.

01

@eirs of Rosendo Sevilla Florencio v. @eirs of Teresa Sevilla De !eon, 7.R. No. '%(&)1, March '0, 011%, %0& S*R3 %%), %&8.
0'

Sec. '8, Rule )1, '(() Rules of *ivil ProcedureI *ustodio v. *orrado, 7.R. No. '%A180, .ul/ 21, 011%, %2& S*R3 &11, &1(.
00

Di;on v. *ourt of 3ppeals, 7.R. No. ''A8&%, Nove+ber '(, '((A, 0A% S*R3 2(', 2(A. *3 rollo, p. '8). Tolentino v. !eviste, supra note '% at 08&.

02

0%

0&

Republic v. Technolo-ical 3dvocates for 3-ro6Forest Pro-ra+s 3ssociation, Inc., 7.R. No. 'A&222, Februar/ (, 01'1, A'0 S*R3 )A, 8A.
0A

7.R. No. '')%((, Februar/ (, '((A, 0&2 S*R3 &%1. Id. at &%8.

0)

08

7alicia v. Manli>ue; Vda. de Mindo, 7.R. No. '&&)8&, 3pril '2, 011), &0' S*R3 8&, (A, citin*hua v. *ourt of 3ppeals, 7.R. No. '0&82), October A, 011%, %%1 S*R3 '0', '2&.
0(

Id., citin- Far ast #an, and Trust *o+pan/ v. Kueri+it, %0% Phil. )0', )20 401105.

Republic of the Philippines SUPREME COURT Manila N #3N* G.R. No. 1-7838 !,3/u%/4 7, 2012

CANDELAR#O L. VER(OSA, )R. A2& 12s =o/6,/ 5%0%52t4 %s E<,5ut2@, D2/,5to/ o= t1, Coo0,/%t2@, D,@,:o06,&t Aut1o/2t4B, Petitioner, vs. GU#LLERMO N. CARAGUE A2& 12s o==252%: 5%0%52t4 %s C1%2/6%& o= t1, COMM#SS#ON ON AUD#TB, RAUL C. !LORES, CELSO D. GANGAN, SO!RON#O B. URSAL %&' COMM#SS#ON ON AUD#T, Respondents. R V#LLARAMA, )R., J.: This resolves the +otion for reconsideration of our Decision' dated March 8, 01'' affir+in- *O3 Decision Nos. (86%0% and 011261A' dated October 0', '((8 and March '8, 0112, respectivel/. He upheld the *O39s rulin- that petitioner is personall/ and solidaril/ liable for the a+ount of P88',8'(.11 under Notice of Disallo$ance No. (2611'A6'1'. In co+pliance $ith our Resolution dated Februar/ 8, 01'', counsel for petitioner filed a Notice, Manifestation and 3polo-/ confir+in- the de+ise of petitioner on .une 0%, 01'1 and e?plainin- the reason for the dela/ in infor+in- this *ourt. SO!"TION

The +otion for reconsideration filed b/ petitioner9s counsel, son of petitioner, is anchored on the follo$in-rounds: '5 There is no findin- of fact in this *ourt9s decision $hich supports the serious findin- that petitioner acted in bad faith $hen he prevailed upon the D3P6T * to +odif/ the initial result of the technical evaluation of the co+puters b/ i+posin- an irrelevant -radin- s/ste+ intended to favor one of the biddersI 05 3ssu+in- $ithout ad+ittin- there $as an atte+pt to alter the results of the biddin-, petitioner $as not directl/ responsible for it since it $as a certain Re/ van-elista $hose act in itself did not constitute bad faith as to be interpreted as deliberatel/ favorin- T TR3I 25 The +ere fact that petitioner $as the si-nator/ in the vouchers and other docu+ents for the processin- of the purchase after the $innin- bidder had been chosen does not b/ itself constitute bad faith, +alice or ne-li-ence. @is participation as final reco++endin-Fapprovin- authorit/ in the said purchase $as +erel/ +inisterialI %5 Records of this case sho$ that the *O3 decisions did not hold petitioner solel/ liable for the disallo$ed a+ount of P88',8'(.11I there $ere others ad=ud-ed solidaril/ liable $ith petitioner for the rei+burse+ent of said a+ountI &5 The decision in 3rriola v. *o++ission on 3udit0 should have been applied in this case. The TSO canvass coupled $ith confir+ator/ telephone canvass should be re6e?a+ined -iven the ad+ission +ade b/ the *O3 3uditor in her 'st Indorse+ent dated .une A, '((% and as held in the DissentinOpinion of .ustice Ma. !ourdes P.3. SerenoI and A5 The *ourt should consider the bases of co+parison $hich is +ade a-ainst a clone -eneric brand 4and its reference price values5, in li-ht of co+pliance $ith intellectual propert/ la$s on soft$are pirac/ and hard$are i+itations.2 On Septe+ber '&, 01'', the Office of the Solicitor 7eneral 4OS75 filed its *o++ent reiteratin- its position that petitioner should not have been +ade liable for the disallo$ed a+ount since there $as no substantial evidence of his direct responsibilit/. It contends that the decision should not have ordered petitioner to rei+burse the disallo$ed a+ount on account of Uoverpricin- of purchased e>uip+entU because he did not have an/ participation in the biddin- that $as conducted b/ the P#3*, nor did he have an/ participation in influencinMr. 3. Kuintos, .r., the D3P6T * evaluator, to chan-e the evaluation results. 3s to the acts cited b/ the *O3 in holdin- petitioner liable for the disallo$ed a+ount, these cannot be the Uclear sho$in- of bad faith, +alice or -ross ne-li-enceU re>uired b/ la$ to hold public officers liable for acts done in the perfor+ance of his official duties. There $as no contrar/ evidence presented b/ the *O3 to overco+e the presu+ption of re-ularit/ in the perfor+ance of official dut/. The OS7 also cites the discussion in the dissentin- opinion of .ustice Sereno that the standards set in 3rriola should have been observed b/ the *O3, i.e., it should have co+pared the sa+e brand of e>uip+ent 4$ith the sa+e features and specifications5 $ith the ite+s *D3 purchased to deter+ine if there $as indeed overpricin-. Respondents filed their *o++ent assertin- that the ar-u+ents raised b/ the petitioner in his +otion for reconsideration do not $arrant reversal of the decision rendered b/ this *ourt. The/ point out that the bad faith of petitioner $as satisfactoril/ established $hen he prevailed upon D3P6T * to +odif/ the initial result of the technical evaluation of the bidders9 co+puter units. 3s to the contention that petitioner9s act of si-nin- the docu+ents for the processin- of the purchase $as +erel/ a +inisterial function, respondents noted that the *ertification in the Disburse+ent Voucher for the pa/+ent of the co+puter states that U Expenses necessary, lawful and incurred under my direct supervision.U Such certification definitel/ involves the e?ercise of discretion and is not a +inisterial act. Petitioner reco++ended to the *hair+an of the #oard of 3d+inistrators of *D3 the a$ard of the contract to T TR3 upon evaluation b/ the P#3* $hich he reconstituted. @e cannot therefore escape liabilit/ for the disallo$ed a+ount to-ether $ith the other liable parties, na+el/: Mr. d$in *anoni;ado, P#3* *hair+an, Ms. Ma. !u; 3--abao, P#3* Vice6*hair+an, and P#3* Me+bers Ms. S/lvia Posadas, Ma. rlinda Dailisan, Mr. !eonilo *edicol, Ms. 3+elia Torrente 4IT *onsultant5 and *D3 #oard *hair+an Ms. dna . 3berilla. 3s to the ar-u+ent that the *O36TSO canvass $as not accurate as it co+pared -eneric co+puters $ith the co+puters offered b/ T TR3, respondent pointed out that aside fro+ havin-

alread/ been passed upon in the decision sou-ht to be reconsidered, the report sub+itted b/ said office disclosed that certain specifications of the reference co+puters $ere either si+ilar or better than those of the Tri-e+ brand offered b/ T TR3 at a +uch lo$er price. *O3 3uditor Rubico had allo$ed a '&E +ar, up on the prices of the ite+s canvassed b/ *O36TSO, but still the actual purchase prices $ere $a/ above the +a?i+u+ allo$able *O3 reference prices, hence, the disallo$ance $as proper. He find that the ar-u+ents raised in the +otion have been ade>uatel/ discussed and passed upon in our Decision dated March 8, 01''. There are, ho$ever, t$o si-nificant issues that need to be clarified: first, $hether the *O3 violated its o$n rules and =urisprudence in the deter+ination of overpricin-I second, $hether petitioner +a/ be ordered to rei+burse the disallo$ed a+ount in the purchase of the sub=ect co+puters. There $as no violation of *O3 rules In 3rriola v. *O3,% this *ourt ruled that the disallo$ance +ade b/ the *O3 $as not sufficientl/ supported b/ evidence, as it $as based on undocu+ented clai+s. The docu+ents that $ere used as basis of the *O3 Decision $ere not sho$n to petitioners therein despite their repeated de+ands to see the+I the/ $ere denied access to the actual canvass sheets or price >uotations fro+ accredited suppliers. 3bsent due process and evidence to support *O39s disallo$ance, *O39s rulin- on petitioners9 liabilit/ has no basis. Reiteratin- the above declaration, National *enter for Mental @ealth Mana-e+ent v. *O3,& li,e$ise ruled that price findin-s reflected in a report are not, in the absence of the actual canvass sheets andFor price >uotations fro+ identified suppliers, valid bases for outri-ht disallo$ance of a-enc/ disburse+ents for -overn+ent pro=ects. The aforesaid =urisprudence beca+e the basis of *O3 Me+orandu+ No. ()61'0 dated March 2', '(() $hich contained -uidelines on evidence to support audit findin-s of over6pricin-. In the interest of fairness, transparenc/ and due process, it $as provided that copies of the docu+ents establishin- the audit findin-s of over6pricin- are to be +ade available to the +ana-e+ent of the audited a-enc/. The +e+orandu+ laid do$n the follo$in- specific -uidelines: 2.' Hhen the priceFprices of a transaction under audit is found be/ond the allo$able ten percent 4'1E5 above the prices indicated in reference price lists referred to in paBrC. 0.' as +ar,et price indicators, the auditor shall secure additional evidence to fir+6up the initial audit findin- to a reliable de-ree of certaint/. 2.0 To fir+6up the findin-s to a reliable de-ree of certaint/, initial findin-s of over6pricin- based on +ar,et price indicators +entioned in paBrC. 0.' above have to be supported $ith canvass sheets andFor price >uotations indicatin-: a5 the identitiesFna+es of the suppliers or sellersI b5 the availabilit/ of stoc, sufficient in >uantit/ to +eet the re>uire+ents of the procurina-enc/I c5 the specifications of the ite+s $hich should +atch those involved in the findin- of over6 pricin-I and d5 the purchaseFcontract ter+s and conditions $hich should be the sa+e as those of the >uestioned transaction. ? ? ? ? 4Italics supplied.5 *ontrar/ to the thrust of .ustice Sereno9s dissent, the lac, of co+pliance $ith the above -uidelines did not invalidate the audit report for violation of the *D39s ri-ht to due process. He cate-oricall/ ruled in Nava v. PalattaoA that neither 3rriola nor the *O3 Me+orandu+ No. ()61'0 can be -iven an/ retroactive effect. Thus,

althou-h 3rriola $as alread/ pro+ul-ated at the ti+e, it is not correct to sa/ that the *O3 in this case violated the afore6>uoted -uidelines $hich have not /et been issued at the ti+e the audit $as conducted in '((2. 3s to *O3 Resolution No. (16%2 dated Septe+ber '1, '((1, $hile indeed it authori;ed the disclosure or identification of the sources of data -athered b/ the Price valuation Division6TSO in the conduct of its data -atherin- and price +onitorin- activities, perusal of this resolution failed to indicate that the disclosure of the na+es and identities of suppliers $ho provided the data durin- price +onitorin- activities of the TSO for+ed part of the evidentiar/ process in audit findin-s of overpricin- and not +erel/ to -uide the a-encies on $here to procure their supplies. *O3 Resolution No. (16%2 reads as follo$s: H@ R 3S, it inheres in its constitutional +andate for this *o++ission to assist in the develop+ent efforts of -overn+ent b/ providin- audit services $ith a vie$ to avoidin- loss and $asta-e of public funds and propert/I H@ R 3S, in pursuance of such +andate, the deter+ination of the reasonableness of price is an essential aspect of the audit of procure+ent in -oods and servicesI H@ R 3S, to$ards that end, the Price valuation Division 4P D5 of the Technical Services Office 4TSO5, this co++ission, provides the 3uditors $ith reference values $hich are obtained thru a valid canvass in the open +ar,etI H@ R 3S, the price findin-s of the TSO that result fro+ such audit deter+ination of price reasonableness at ti+es adversel/ affect auditees $ho $ould re>uest TSO to disclose or identif/ the sources of these price >uotations set b/ P D so that the/ can procure their suppl/ needs fro+ said sourcesI H@ R 3S, this *o++ission is co-ni;ant of the national polic/ of transparenc/ in -overn+ent operationsI H@ R 3S, this *o++ission perceives no le-al i+pedi+ent to the disclosure or identification of the sources of price data $hich $ill ensure econo+/, efficienc/ and effectiveness in -overn+ent procure+entI NOH, T@ R FOR , in ,eepin- $ith the national polic/ of transparenc/, the co++ission Proper has resolved, as it does hereb/ resolve, to authori;e the disclosure or identification of the sources of data -athered b/ the Price valuation Division, TSO in the conduct of its data -atherin- and +onitorin- activitiesI #e it further resolved that in order to carr/ out such polic/ of disclosure, the Price Monitor #ulletin, a *O3 publication, contain not onl/ specific ite+s and prices of -oods and services but also the na+es and identities of responsive suppliers $ho provided the data durin- the canvass conducted b/ the P D, TSO. 4 +phasis and underscorin- supplied.5 3ccordin-l/, *O3 Me+orandu+ No. ()61'0 $as issued on March 2', '(() in vie$ of the *o++ission9s reco-nition that UBtChere is a need to clarif/ the role and status of a price reference data, such as those produced b/ the Technical Services Office, in the audit evidence process $ith respect to findin-s of overpricin-.U It is therefore i+proper to appl/ this re-ulation to the post6audit conducted in the /ear '((2 on the sub=ect transaction. Further, it +ust be noted that petitioner in re>uestin- reconsideration of the audit disallo$ance, did not +a,e a de+and for the production of actual canvass sheets. Neither did he >uestion the correctness of the reference values used b/ the TSO. Petitioner onl/ pointed out that the date of canvass conducted b/ the TSO does not coincide $ith the date of purchase. To this the *O36TSO countered that Uthere $as no sho$in- that the forei-n e?chan-e rate chan-ed durin- the latter part of '((0 that $ould have si-nificantl/ increased the prices of co+puters.U Petitioner nonetheless assailed the price co+parison of the branded co+puters purchased b/ the *D3 $ith non6branded co+puters, $hich the dissent no$ dee+s as a ri-ht of preference or an e?ercise of discretion on the part of *D3. *O3 "pheld the 3uditor9s Position that #rand is Irrelevant on the #asis

of Findin-s of its Technical Personnel The *O3, under the *onstitution, is e+po$ered to e?a+ine and audit the use of funds b/ an a-enc/ of the national -overn+ent on a post6audit basis.) For this purpose, the *onstitution has provided that the *O3 Ushall have e?clusive authorit/, sub=ect to the li+itations in this 3rticle, to define the scope of its audit and e?a+ination, establish the techni>ues and +ethods re>uired therefor, and pro+ul-ate accountin- and auditinrules and re-ulations, includin- those for the prevention and disallo$ance of irre-ular, unnecessar/, e?cessive, e?trava-ant, or unconscionable e?penditures, or uses of -overn+ent funds and properties.U8 3s such, *D39s decisions re-ardin- procure+ent of e>uip+ent for its o$n use, includin- co+puters and its accessories, is sub=ect to the *O39s auditin- rules and re-ulations for the prevention and disallo$ance of irre-ular, unnecessar/, e?cessive and e?trava-ant e?penditures. Necessaril/, *D39s preferences re-ardin- brand of its e>uip+ent have to confor+ to the criteria set b/ the *O3 rules on $hat is reasonable price for the ite+s purchased. The dissent points out that *O3 *ircular No. 8&6&&63 itself provides that in deter+inin- $hether the price is e?cessive, the brand of products +a/ be considered, thus: D M #rand of Products Products of reco-ni;ed brands co+in- fro+ countries ,no$n for producin- such >ualit/ products are relativel/ e?pensive. ?. 6 Solin-en scissors and the li,e $hich are +ade in 7er+an/ are +ore e?pensive than scissors $hich do not carr/ such brand and are not +ade in 7er+an/. In this case, ho$ever, brand infor+ation $as found b/ the *O39s TSO Director, and also the Infor+ation Technolo-/ *enter 4IT*5 Director Marieta SF. 3corda as irrelevant to the deter+ination of the reasonableness of the price of the co+puters purchased b/ *D3 fro+ Tetra. Director .or-e @.!. Pere; of the TSO in his Me+orandu+ dated 3pril 0%, '((& addressed to the !e-al Office Director of the *O3 e?plained their position as follo$s: ???? '. On the alle-ation that Tri-e+ and 7enesis co+puters are not co+parable since it is li,e co+parin- apples $ith oran-es M 3s a -eneral ruleFprocedure, verification b/ TSO of the price of an ite+ re>uires co+parison $ith the sa+eFsi+ilar classificationF-roup of ite+s. The ite+s $ould then have the sa+e specifications unless stated other$ise in the price findin-s of the Office. In this case, the reference values are in accordance $ith the specifications but e?clusive of the UbrandedU infor+ation, since this $as not stated in the P.O.FInvoice, $hich $as used as basis of canvass. Since Tri-e+ and 7enesis are both co+puters of the sa+e -eneral characteristicsFattributes, the branded and non6branded labels propounded b/ the supplier is of scant consideration. 3s re-ards the "PS, the enu+erated advanta-es of the delivered ite+s are the sa+e advanta-es that can be -enerated fro+ a "PS of the sa+e specifications and standard features. In this case, the reference value pertains to a "PS $ith the sa+e capacit/, input, output, batter/ pac,ed and bac,6up ti+e, e?cept for the brand. ? ? ? ?( 4"nderscorin- supplied.5 On her part, *O3 3uditor !u;vi+inda V. Rubico +aintained that $hat is i+portant is that the specifications and functions of 7enesis and Tri-e+ co+puters are si+ilar. She pointed out that Uif the co+parison of the prices for the disallo$ances issued $as erroneous because $hat $as co+pared $as 7enesis brand BversusC Tri-e+, then the biddin- conducted b/ *D3 $ould not be acceptable since in the 3bstract of #ids, prices $ere not based on si+ilar brands.U

Director 3corda of the *O3 IT* li,e$ise e?pressed a si+ilar vie$ $hen as,ed for co++ent re-ardin- the penalt/ points i+posed b/ the *D3 after the result of the D3P technical evaluation initiall/ sho$ed that Tetra $as ran,ed lo$est. Thus, she e?plained in her Dece+ber (, '((A +e+orandu+ addressed to *O3 !e-al *ounsel Director @abitan: '. On the first issue 6 $e observed that no additional co+puter features $ere introduced in *D39s -radin- s/ste+, rather the bidders $ere penali;ed for non6co+pliance $ith technical specifications fi?ed b/ *D3. On *D39s representation $ith the Develop+ent 3cade+/ of the Philippines M Technical valuation *o++ittee 4D3P *o++ittee5 and based on the -radin- s/ste+ devised b/ the for+er, the D3P *o++ittee a-reed to i+pose penalties for non6co+pliance of the bids $ith the technical specifications. @ereunder are their reasons for the penalties and our co++ents thereto: '.' *olu+bia *o+puter *enter 4*olu+bia5 and Micro*ircuits *orporation 4M**5 $ere penali;ed because the +icroprocessor of the co+puter hard$are the/ delivered for evaluation $ere 3MD and not Intel as re>uired in the technical specification. 3MD and Intel are both +icroprocessor brands. It rarel/ +alfunctions. @ence, the difference in brands, as in this case, $ill not affect the efficienc/ of the co+puter9s perfor+ance. @o$ever, Intel +icroprocessors are +ore e?pensive and are +anufactured b/ Intel *orporation $hich pioneered the production of +icroprocessors for personal co+puters. '.0 *olu+bia $as penali;ed because the ROM #IOSes of the co+puter hard$are the/ delivered $ere 3cer#ios, a deviation fro+ the technical specifications $hich re>uired ROM #IOSes licensed b/ I#M. 3MI, Phoeni? or 3$ards. This $ill not affect the efficienc/ of the co+puter9s perfor+ance. Hhat is i+portant is that these ROM #IOSes are le-al or licensed. '.2 *olu+bia $as a-ain penali;ed because the casin- of the co+puter the/ delivered for evaluation in the To$er 28ADS cate-or/ has a des,top casin- and not to$er casin- as provided in the technical specifications. *asin-s do not affect the efficienc/ of the co+puter9s perfor+ance but +a/ affect office furniture re>uire+ents such as the desi-n of the co+puter tables. '.% Tetra *orporation 4Tetra5 $as penali;ed because the R3M of the Noteboo, it delivered for evaluation $as onl/ A%1N instead of 0M 4e?pandable5. He a-ree that R3M capacit/ $ill affect the efficienc/ of the co+puter9s perfor+ance. 0. On the second issue 6 the #ench+ar, testin- conducted b/ the D3P *o++ittee in $hich Tetra -ot the lo$est score in ter+s of Technical valuation is not a sufficient basis for us to deter+ine $hether or not Tri-e+ co+puters are inferior to the co+puter brands offered b/ the other bidders. In #ench+ar, Testin-, $ei-hts are allocated to the different technical features of a co+puter. The co+puters are then evaluatedFappraised usin- dia-nostic soft$are and ran,ed in accordance $ith the results of such evaluationFappraisal. The resultin- ran,in- +erel/ su--ests $hich co+puter best the appraisals. 4"nderscorinsupplied.5 In the li-ht of the fore-oin- consistent stand of its o$n technical personnel havin- e?pertise in co+puter technolo-/, the *O3 upheld the auditor9s findin- that brand $as irrelevant to deter+inin- the reasonableness of the price at $hich *D3 purchased the sub=ect co+puters. It is not for this *ourt, as the dissent atte+pts, to +a,e assertions to the contrar/, i.e., that the brand preferred b/ *D3 $as superior to another brand or -eneric co+puter havin- si+ilar specificationsFfunctions and to $hich the price of the branded co+puter $as co+pared b/ respondents. Hhether a particular brand of co+puter or +icroprocessor is of superior >ualit/ is not sub=ect to

=udicial notice. .udicial notice is the co-ni;ance of certain facts $hich =ud-es +a/ properl/ ta,e and act on $ithout proof because the/ alread/ ,no$ the+.'1 The dissent also asserted that it is Uunfair to co+pare Tetra9s proposed Tri-e+ co+puters to a co+puter clone that $as not even >ualified to be bidded on or $as not sub=ected to the sa+e hard$are bench+ar, testin-.U #ut as *O3 IT* Director 3corda had e?plained in her Dece+ber (, '((A +e+orandu+, such #ench+ar, Testinconducted b/ the D3P6T * is not a sufficient basis for the+ to deter+ine $hether or not Tri-e+ co+puters are inferior to the co+puter brands offered b/ the other bidders. *O39s observation that *D3 should have been entitled to volu+e discount $as valid "nder *O3 *ircular No. 8&6&&63, the price is dee+ed e?cessive if the discounts allo$ed in bul, purchases is not reflected in the price offered or in the a$ard or in the purchaseFpa/+ent docu+ents. This i+plies that bul, purchases are e?pected to be acco+panied b/ discounts that should have resulted in lo$erin- the price of ite+s, $hich is contrar/ to the dissent9s stance that the supplier T TR3 $as not le-all/ obli-ated to -ive such discount to *D3. *O3 noted that *D3 should have been entitled to volu+e discount fro+ the suppl/in- dealer considerin- the nu+ber of units it procured fro+ the+. Instead of e?plainin- $h/ there $as no volu+e discount at all reflected in the bid or purchaseFpa/+ent docu+ents, petitioner clai+ed that other bu/ers even bou-ht the sa+e co+puters at hi-her prices fro+ Tetra. @o$ever, $hen the sales invoices issued to other co+panies $ere e?a+ined b/ the *O3, it $as found that onl/ one unit $as procured b/ each. @ence, it $as not pure con=ecture on the part of *O3 to ta,e into consideration the absence of volu+e discount. Hhether or not the other bidders actuall/ co++itted to -ive volu+e discount is beside the point, as the sub=ect of post6audit $as the reasonableness of the price alread/ paid to Tetra b/ *D3. No -rave abuse of discretion co++itted b/ *O3 in holdinpetitioner personall/ and solidaril/ liable for the overpricin- of the co+puters procured b/ *D3 Pursuant to Section '12 of P.D. No. '%%& and Section '( of the Manual on the *ertificates of Settle+ent of #alances, petitioner $as found liable for the audit disallo$ances totalin- P88',8'(.11 representin- the overprice of the co+puters purchased b/ *D3. Petitioner9s participation in the transaction $as not li+ited to his si-natureFapproval of the purchase as reco++ended b/ the P#3*. 3s pointed out in our Decision, records sho$ed it $as petitioner $ho ordered the reconstitution of the P#3* $hich nullified the previous biddin- conducted in Dece+ber '(('. @e further secured the services of the D3P6 T * for technical evaluation and si-ned the a-ree+ent for the said technical assistance $hen it is alread/ the dut/ of the P#3* *hair+an. Not$ithstandin- petitioner9s clai+ that it $as part of his duties as ?ecutive Director to UBsi-nC out-oin- co++unicationsFletters e?cept letters addressed to @eads of BOfficeC, *on-ress+en, Senators and to the Office of the President,U'' the fact re+ains that the services of D3P6T * for P'&,111.11 fee $ere availed of at his instance. 3s it turned out, the D3P6T * ca+e out $ith t$o different technical evaluation reports, the second havin- been antedated but also si-ned b/ D3P6T * Director Minerva Mecina $ho ad+itted it $as her si-nature in both docu+ents but clai+ed she $as una$are that she had si-ned t$o different docu+ents. The discrepancies in the t$o reports 4in the first i+partial result, Tetra -ot the lo$est ran,in- but in the second result +ade after *D3 ordered certain chan-es in the -radin- s/ste+, Tetra eventuall/ $on5 $as found b/ 3uditor Rubico to be irre-ular and indicative of bad faith. The dissent assails such Ualle-edU instances of +anipulation +entioned b/ 3uditor Rubico as belatedl/ raised and contends that the Nove+ber 02, '((& letter of the D3P6T * technician failed to sho$ that Mr. Re/ van-elista 4staff of the P#3* *hair+an5 $ent to D3P6T * on instructions b/ the petitioner. These circu+stances surroundin- the issuance of the D3P6T * technical evaluation results $ere additionall/ +entioned b/ 3uditor Rubico to the respondents so that the latter +a/ be apprised that the +e+bers of the P#3*, includin- petitioner, could not have been una$are of efforts to influence the outco+e of the technical

evaluation, and not as -round per se of the disallo$ance. @ence, there $as nothin- ano+alous in the fact that 3uditor Rubico onl/ disclosed these additional findin-s in the course of her audit to the *o++ission9s !e-al *ounsel and other *O3 officials $hen she $as as,ed to co++ent on the appealFre>uest for reconsideration +ade b/ *D3 fro+ the notice of disallo$ance. It is to be noted that petitioner never denied there $ere t$o different results of D3P6T * technical evaluation. To refute the i+putation of irre-ularit/, petitioner sub+itted a certification fro+ the incu+bent *D3 ?ecutive Director that as per inventor/, onl/ fourteen out of the sub=ect fort/6four Tri-e+ co+puters have beco+e unserviceable, $hich he said vindicated their choice of branded co+puters. Thus, the supposedl/ UfraudulentU i+position of penalties in the D3P6T * second report durin- the ph/sical testin- of the co+puter hard$are, construed as +anipulative endeavor b/ the *O3 3uditor, is no$ +oot and acade+ic. #ut as alread/ e?plained in our Decision, the continued serviceabilit/ of the purchased ite+s did not =ustif/ the overpricin- nor render +oot the disallo$ances based on post6audit e?a+ination of the pertinent bid and purchase docu+ents. Finall/, $e find no +erit in the assertion that in orderin- the petitioner to rei+burse the disallo$ed a+ount, this *ourt +isapplied the solidar/ nature of the liabilit/ deter+ined b/ the *O3 for petitioner and the other +e+bers of the P#3*. He have cate-oricall/ stated that the *ourt upholds the *O39s rulin- that petitioner is personall/ and solidaril/ liable for the overpricin- in the co+puters purchased b/ *D3. The directive for the pa/+ent of the a+ount of disallo$ance finall/ deter+ined b/ the *O3 did not chan-e the nature of the obli-ation as solidar/ because the de+and thus +ade upon petitioner did not foreclose his ri-ht as solidar/ debtor to proceed a-ainst his co6debtorsFobli-ors, in this case the +e+bers of the P#3* char-ed under Notice of Disallo$ance No. (2611'A6'1', for their share in the total a+ount of disallo$ance. '0 Petitioner is therefore liable to restitute the P88',8'(.11 to the 7overn+ent $ithout pre=udice, ho$ever, to his ri-ht to recover it fro+ persons $ho $ere solidaril/ liable $ith hi+.'2 He stress ane$ that it is the -eneral polic/ of the *ourt to sustain the decisions of ad+inistrative authorities, especiall/ one $hich is constitutionall/6created, not onl/ on the basis of the doctrine of separation of po$ers but also for their presu+ed e?pertise in the la$s the/ are entrusted to enforce. '% Findin-s of >uasi6=udicial a-encies, such as the *O3, $hich have ac>uired e?pertise because their =urisdiction is confined to specific +atters are -enerall/ accorded not onl/ respect but at ti+es even finalit/ if such findin-s are supported b/ substantial evidence,'& and the decision and order are not tainted $ith unfairness or arbitrariness that $ould a+ount to -rave abuse of discretion.'A There bein- no -rave abuse of discretion in the findin-s and conclusions of the *O3 in this case, the *ourt finds no co-ent reason to deviate fro+ these lon-6settled rules. H@ R FOR , the +otion for reconsideration is D NI D *#T" !#NAL#T7. No further pleadin-s shall be entertained. !et entr/ of =ud-+ent be +ade in due course. SO ORD R D. MART#N S. V#LLARAMA, )R. 3ssociate .ustice H *ON*"R: 4No Part5 RENATO C. CORONAL *hief .ustice ANTON#O T. CARP#O 3ssociate .ustice PRESB#TERO ). VELASCO, )R. 3ssociate .ustice

TERES#TA ). LEONARDO+DE CASTRO 3ssociate .ustice D#OSDADO M. PERALTA 3ssociate .ustice 4On leave5 MAR#ANO C. DEL CAST#LLOLL 3ssociate .ustice )OSE PORTUGAL PERE( 3ssociate .ustice MAR#A LOURDES P. A. SERENO 3ssociate .ustice

ARTURO D. BR#ON 3ssociate .ustice LUCAS P. BERSAM#N 3ssociate .ustice ROBERTO A. ABAD 3ssociate .ustice )OSE CATRAL MENDO(A 3ssociate .ustice B#ENVEN#DO L. RE7ES 3ssociate .ustice

ESTELA M. PERLAS+BERNABE 3ssociate .ustice * RTIFI*3TION

Pursuant to Section '2, 3rticle VIII of the '(8) *onstitution, I certif/ that the conclusions in the above Resolution had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt. RENATO C. CORONA *hief .ustice

!oot&ot,s
L

No part. On leave.

LL

'

7.R. No. '&)828, March 8, 01'', A%% S*R3 A)(. 7.R. No. (12A%, Septe+ber 21, '((', 010 S*R3 '%). Rollo, pp. 2)&6280. Id. 7.R. No. ''%8A%, Dece+ber A, '((A, 0A& S*R3 2(1, %11. 7.R. No. 'A10'', 3u-ust 08, 011A, %(( S*R3 )%&, )A26)A%. Section 04'5, 3rticle IS4D5, '(8) *onstitution. Section 0405, id. *O3 records.

&

'1

People v. Tunda-, 7.R. Nos. '2&A(&6(A, October '0, 0111, 2%0 S*R3 )1%, )'A, citin- 2' *...S. &1(.
''

Rollo, pp. 0)), 21A. "ee *ivil *ode, 3rt. '0'). The article provides: 3RT. '0'). Pa/+ent +ade b/ one of the solidar/ debtors e?tin-uishes the obli-ation. If t$o or +ore solidar/ debtors offer to pa/, the creditor +a/ choose $hich offer to accept. ", C1o 6%', t1, 0%46,&t 6%4 5:%26 =/o6 12s 5o+',3to/s o&:4 t1, s1%/, C1251 5o//,s0o&'s to ,%51, C2t1 t1, 2&t,/,st =o/ t1, 0%46,&t %:/,%'4 6%',. If the pa/+ent is +ade before the debt is due, no interest for the intervenin- period +a/ be de+anded. Hhen one of the solidar/ debtors cannot, because of his insolvenc/, rei+burse his share to the debtor pa/in- the obli-ation, such share shall be borne b/ all his co6debtors, in proportion to the debt of each. 4 +phasis supplied.5

'0

'2

Frias, Sr. v. People, 7.R. No. ')'%2), October %, 011), &2% S*R3 A&%, AAA.

'%

Sanche; v. *o++ission on 3udit, 7.R. No. '0)&%&, 3pril 02, 0118, &&0 S*R3 %)', %8(, citin*uerdo v. *o++ission on 3udit, No. !68%&(0, October 0), '(88, 'AA S*R3 A&), AA' further citinTa-u+ Doctors nterprises v. 3psa/, No. !68''88, 3u-ust 21, '(88, 'A& S*R3 '&%, '&&6'&A.
'&

!a/sa v. *o++ission on 3udit, 7.R. No. '08'2%, October '8, 0111, 2%2 S*R3 &01, &0A. Sanche; v. *o++ission on 3udit, supra note '%.

'A

The !a$phil Pro=ect 6 3rellano !a$ Foundation

D#SSENT#NG OP#N#ON VELASCO, )R., J.: The *ourt, b/ its Decision dated March 8, 01'', affir+ed and upheld the *o++ission on 3udit 4*O35 Decision Nos. (86%0%' and 011261A'0 dated October 0', '((8 and March '8, 0112, respectivel/. Said *O3 Decisions, in turn, affir+ed Notice of Disallo$ance No. (2611'A6'1'2 dated Nove+ber '), '((2, $hich disallo$ed in audit the a+ount of i-ht @undred i-ht/6One Thousand i-ht @undred Nineteen Pesos 4PhP 88',8'(5, representinthe purported overprice in the purchase b/ the *ooperative Develop+ent 3uthorit/ 4*D35 of a total of fort/6si? 4%A5 units of co+puter e>uip+ent and peripherals in the total a+ount of T$o Million T$o @undred i-ht/6Five Thousand T$o @undred Sevent/6Nine Pesos 4PhP 0,08&,0)(5 fro+ Tetra *orporation 4Tetra5. The facts of the case, as stated in this *ourt9s Decision dated March 8, 01'', are as follo$s: On t$o separate occasions in Dece+ber '((0, the B*D3C purchased fro+ Tetra *orporation 4Tetra5 a total of fort/6si? 4%A5 units of co+puter e>uip+ent and peripherals in the total a+ount of P0,08&,0)(.11. Tetra $as chosen fro+ a+on- three >ualified bidders 4Tetra, Microcircuits and *olu+bia5. In the technical evaluation of the units to be supplied b/ the >ualified bidders, *D3 en-a-ed the services of the Develop+ent 3cade+/ of the Philippines6Technical valuation *o++ittee 4D3P6T *5. The biddin- $as conducted in accordance $ith the 3pproved 7uidelines and Procedures of Public #iddin- for Infor+ation Technolo-/ 4IT5 Resources and Me+orandu+ Order No. 02) issued b/ the Office of the President. Petitioner $ho $as then the ?ecutive Director of the *D3 approved the purchase.

On Ma/ '8, '((2, the Resident 3uditor sou-ht the assistance of the Technical Services Office 4TSO5, *O3 in the deter+ination of the reasonableness of the prices of the purchased co+puters. In its repl/6letter dated October '8, '((2, the TSO found that the purchased co+puters $ere overpricedFe?cessive b/ a total of P88',8'(.11. It $as noted that 4'5 no volu+e discount $as -iven b/ the supplier, considerin- the nu+ber of units soldI 405 as earl/ as '((0, there $ere so +uch suppl/ of co+puters in the +ar,et so that the prices of co+puters $ere relativel/ lo$ alread/I and 425 $hen *D3 first offered to bu/ co+puters, of the three >ualified bidders, Microcircuits offered the lo$est bid of P','02,2'&.11 $hile Tetra offered the hi-hest bid of P',0A(,A21.11. The Resident 3uditor issued Notice of Disallo$ance No. (2611'A6'1' dated Nove+ber '), '((2, for the a+ount of P88',8'(.11. In a letter dated Ma/ '2, '((%, *D3 *hair+an dna . 3berilla appealed for reconsideration of the disallo$ance to *O3 *hair+an *elso D. 7an-an, sub+ittin- the follo$in- =ustifications: B'.C The basis of co+parison 47enesis vs. Tri-e+ co+puters and ferro6resonant t/pe "PS vs. ordinar/ "PS5 is erroneous, as it is li,e co+parin- apples to oran-es. ? ? ? 7enesis, a non6branded co+puter, is inco+parable to Tri-e+, a branded co+puter in the sa+e +anner as the M37T N6"PS, a ferro6resonant t/pe of "PS, should not be co+pared $ith 3P*6'111H, 3DM3T '111H and PN '111H, $hich are all ordinar/ t/pes of "PS. ? ? ? It $ould have been +ore appropriate, therefore, to co+pare the ac>uired co+puter e>uip+ent and peripherals $ith the sa+e +odels of other branded co+puters. B0.C The technical specifications and other added features $ere -iven due $ei-ht. ? ? ? BTChe criteria for deter+inin- the $innin- bidder is as follo$s: *ostFprice &1E Technical Specifications 21E Support Services 01E B2.C The sa+e technical specifications and special features e?plained the advanta-es of the ac>uired co+puter e>uip+ent and peripherals $ith those that are bein- co+pared $ith. Hith re-ards to our branded co+puter, the advanta-es include the follo$in-: Ba.C Ori-inal and !icensed *op/ of its Dis, Operatin- S/ste+ specificall/ MS6DOS Ver &.1. Bb.C Ori-inal and !icensed Operatin- S/ste+ Dis,ettes and its Manuals. ???? Bc.C "ser9s Manual and Installation 7uide ? ? ? Bd.C *o+puters offered should run PRO7R SS 3pplication Develop+ent S/ste+ as indicated in the #id Docu+ent ? ? ? because the developin- s/ste+ for the establish+ent of the a-enc/9s Mana-e+ent Infor+ation S/ste+ 4MIS5 is based on PRO7R SS 3pplication Soft$are. Be.C !e-al #iosF!icense 3-ree+ent for the particular brand of co+puters offered to *D3. ? ? ? Hith these features, the a-enc/ is assured that the co+puters $ere ac>uired throu-h a le-iti+ate process 4not s+u--ledFUpiratedU5, thereb/, upholdin- the a-enc/9s respect for Intellectual Propert/ !a$ or P.D. No. %(. Hith re-ard to the "PS, ? ? ? it is a ferro6resonant t/pe ? ? ? B$hich hasC advanta-es to ensure -reater reliabilit/ and $ill enable users to operate $ithout interruption.

B%.C B3s declared inC *O3 *ircular No. 8&6&&63, Uthe price is not necessaril/ e?cessive $hen the serviceFite+ is offered $ith $arrant/ or special features $hich are relevant to the needs of the a-enc/ and are reflected in the offer or a$ard. 3s $ill be seen fro+ the criteria adopted b/ the a-enc/, both the $arrant/ and special features $ere considered and -iven correspondin- $ei-hts in the co+putation for the support services offered b/ the bidder.BUC B&.C ? ? ? BTChere is no overpricin- because in the process of co+parin- Uapples vs. applesU, the other bu/ers in effect procured their units at a hi-her price than those of the *D3. He ? ? ? are still in the process of -atherinadditional data of other transactions to further support our stand. ? ? ? BA.C ? ? ? The rapid chan-es due to research and develop+ent in Infor+ation Technolo-/ 4I.T.5 results in the si-nificant reduction of prices of co+puter e>uip+ent. ? ? ? BMCa,in- a co+parison -iven t$o different periods 4Dece+ber '((0 vs. 3u-ust '((25 +a/ be invalid ? ? ?. B).C The procedures of the public biddin- as adopted b/ the B*D3C ? ? ? de+onstrate a ver/ effective +echanis+ for avoidin- an/ possible overpricin-. In co+pliance $ith the re>uest of the !e-al Office Director, the TSO sub+itted its co++ents on the =ustifications sub+itted b/ the *D3. On the non6co+parabilit/ of 7enesis and Tri-e+ brands, it e?plained that the reference values $ere in accordance $ith the sa+e specifications but e?clusive of the UbrandedU infor+ation, since this $as not stated in the P.O.FInvoice, $hich $as used as basis of the canvass. Since the said brands are both co+puters of the sa+e -eneral characteristicsFattributes, the branded and non6branded labels propounded b/ the supplier is of scant consideration. 3s re-ards the "PS, it $as pointed out that the enu+erated advanta-es of the delivered ite+s are the sa+e advanta-es that can be -enerated fro+ a "PS of the sa+e specifications and standard featuresI in this case, the reference value pertains to a "PS $ith the sa+e capacit/, input, output, batter/ pac, and bac,6up ti+e, e?cept for the brand. 3s to the period of purchase b/ the *D3, the TSO noted that based on its +onitorin- fro+ October '((2 to Ma/ '((%, prices of Star and pson printers and hard dis, 4'01 M# Model St62'%%35 either re+ained the sa+e or even increased b/ 0E to &E. It is therefore valid that the price of an ite+ is the sa+e fro+ one period to another, and that an ite+ +a/ be available unless it is out of stoc,, or phased out, $ith or $ithout a replace+ent. In this case, the reference value cannot be considered as the reduced price as a result of rapid chan-es due to research since the said reference value is the price for the sa+e +odel alread/ e?istin- in Dece+ber '((0 $hen the purchase $as +ade and still available in 3u-ust '((2, and not an e>uivalent nor replace+ent of a phased out +odel. On the other hand, the Resident 3uditor +aintained her stand on the disallo$ance and sub+itted to 3ssistant *o++issioner Raul *. Flores her replies to the *D39s =ustifications, as follo$s: 4'5 on the alle-edl/ erroneous co+parison bet$een 7enesis and Tri-e+ brands, if this $ill be the basis, then their biddin- $ill not be acceptable because in the 3bstract of #ids, the co+parison of prices $as not based on si+ilar brands, i.e., Tetra offered Tri-e+6Norean for P',0A(,A01, Microcircuits offered 3rche6"S brand for P','02,2'&, and *olu+bia offered 3cer6Tai$an brand for P',%)A,A11I $hat is i+portant is that, the specifications and functions are si+ilarI 405 the 0nd, 2rd and %th =ustifications are of no +o+ent as all the offers of the three >ualified bidders $ere of si+ilar technical specifications, features and $arrant/ as contained in the Proposal #id For+I 425 on the &th =ustification 66 the co+panies referred to procured onl/ one unit each and of +uch hi-her -radeI 4%5 on the Ath =ustification 66 $hile the date of the canvass conducted b/ the TSO does not coincide $ith the date of purchase, there is no sho$in- that forei-n e?chan-e rate chan-ed durin- the latter part of '((0 $hich $ill si-nificantl/ increase the prices of co+putersI and 4&5 on the )th =ustification 66 $hile the *O3 $itnessed the public biddin-, the post6evaluation $as left to the Pre6>ualifications, #ids and 3$ards *o++ittee 4P#3*5. The National 7overn+ent 3udit Office I concurred $ith the opinion of the Resident 3uditor that *D39s re>uest +a/ not be -iven due course. On October 0', '((8, respondent *O3 issued the assailed decision affir+in- the disallo$ance. It held that $hether or not the product is branded is irrelevant in the deter+ination of the reasonableness of the price since the brand $as not stated in the *all for #ids nor in the Purchase Order. The bids of the three >ualified bidders $ere based on si+ilar technical specifications, features and $arrant/ as contained in their proposals. It $as also found that the perfor+ance of the co+petin- co+puter e>uip+ent $ould not var/ or chan-e even if the attributes or characteristics of said co+puters cited b/ petitioner $ere to be factored in. The difference in brands, +icroprocessors, #IOSes, as $ell as casin-s $ill not affect the efficienc/ of the co+puter9s perfor+ance.

Further, *O3 declared that *D3 should not have a$arded the contract to Tetra but to the other co+petinbidders, $hose bid is +ore advanta-eous to the -overn+ent. It noted that Microcircuits offered the lo$est bid of P','02,2'&.11 for the "S brand said to be +ore durable than the Norean brand supplied b/ Tetra. *D3 also should have been entitled to volu+e discount considerin- the nu+ber of units it procured fro+ Tetra. !astl/, *O3 e+phasi;ed that the re>uire+ents and specifications of the end6user are of pri+e consideration and the other added features of the e>uip+ent, if not specified or needed b/ the end6user, should not be ta,en into account in deter+inin- the purchase price. The conduct of public biddin- should be +ade ob=ectivel/ $ith the end in vie$ of purchasin- >ualit/ e>uip+ent as needed at the least cost to the -overn+ent. The price for the e>uip+ent delivered havin- been paid, $hen such e>uip+ent could be ac>uired at a lo$er cost, the disallo$ance of the price difference $as =ustified. 4*itations o+itted.5 3s +entioned above, the *ourt, in its Decision dated March 8, 01'', affir+ed *O39s disallo$ance and held petitioner *andelario !. Ver;osa, .r. personall/ liable. In this recourse, petitioner, no$ deceased, throu-h his son and le-al counsel, pra/s that the *ourt reconsider its Decision, anchorin- his ar-u+ents essentiall/ on t$o 405 -rounds: First, there is no findin- of bad faith on his part as to render hi+ personall/ liable for the disallo$ed a+ount.% Second, the Technical Services Office 4TSO5 canvass, coupled $ith the confir+ator/ telephone canvass, does not co+pl/ $ith the re>uire+ent of an actual canvass andFor price >uotations fro+ identified suppliers as a valid basis for outri-ht disallo$ance, consistent $ith this *ourt9s rulin- in 3rriola v. *O3.& The Office of the Solicitor 7eneral 4OS75 ur-es reconsideration. In its *o++ent 4Re: Petitioner9s Motion for Reconsideration dated 3pril 8, 01''5 dated Septe+ber '0, 01'', the OS7 avers that there +i-ht have been a +isappreciation of the facts in the case at bar $hich rendered petitioner personall/ liable. A In support of petitioner9s cause, the OS7 invites attention to the follo$in-: 4'5 petitioner had no actual participation in the purported offendin- transactionI) 405 a findin- of liabilit/ despite the *O39s failure to prove it $ith substantial evidence a+ounts to a violation of petitioner9s ri-ht to ad+inistrative due processI and 425 the presu+ption of re-ularit/ in the perfor+ance of dut/.8 For their part, respondents +aintain that: 4'5 the bad faith of petitioner is satisfactoril/ sho$n b/ his havinprevailed upon the Develop+ent 3cade+/ of the Philippines6Technical valuation *o++ittee 4D3P6T *5 to +odif/ the initial result of the technical evaluation of the bidders9 co+puter unitsI ( 405 petitioner9s act of si-nininvolves the e?ercise of discretion and is not a +inisterial actI '1 425 the TSO report, $hich $as prepared b/ *O3 personnel havin- ,no$led-e and e?pertise on co+puter e>uip+ent, supplied reliable data that fir+ed up the findin- of overpricin-I'' and 4%5 even $ithout considerin- the canvassed prices of *O3, the overprice in the sub=ect procure+ent b/ the *D3 could still be sufficientl/ established based on the bid results. '0 ssentiall/, the issues for Our resolution are: 4'5 $hether the *O3 co++itted -rave abuse of discretion a+ountin- to lac, or e?cess of =urisdiction in disallo$in- in audit the purported overprice in the purchase of the co+puter e>uip+ent and peripherals b/ the *D3I and 405 $hether there is substantial evidence to hold petitioner personall/ liable for the disallo$ed a+ount. The +a=orit/ rules in favor of respondents. I a+ constrained to re-ister +/ dissent. 3pplicabilit/ of 3rriola In 3rriola, this *ourt held that U*O39s disallo$ance $as not sufficientl/ supported b/ evidence, as it $as pre+ised purel/ on undocu+ented clai+s.U He also held that petitioners therein $ere not accorded due process for not havin- allo$ed access to source docu+ents. 3s stated: He a-ree that petitioners B3rriola, et al.C $ere indeed not -iven due process in this case. He note that $hile N*3 had provided receipts and invoices to sho$ the ac>uisition costs of +aterials found b/ *O3 to be overpriced, *O3 +erel/ referred to Ua cost co+parison +ade b/ an en-ineer of *O36TSO, based on unit costs furnished b/ the Price Monitorin- Division of the *O36TSO,U 4p. '0%, Rollo5. In fairness to petitioners, *O3 should have, $ith respect for instance to the sub+ersible pu+p, produced a $ritten price >uotation specificall/ for U' "nit 7oulds Sub+ersible Pu+p Model 0& ! 21%20, 2 @P, 021 V.,

coupled to UFran,lin Sub+ersible lectric Motor, 2 @P, 021 V. 26phase, A1 @;. 2%&1 RPM.U The cost evaluation sheet, dated Septe+ber '&, '(8A, Ite+ No. '0 4attached to the decision of Mr. .ose F. Mabanta, 43ct-. Director, *O36TSO5, +erel/ refers to a U7oulds sub+ersible pu+p.U ? ? ? ???? This is not, in the absence of the actual canvass sheets andFor price >uotations fro+ identified suppliers, a valid basis for outri-ht disallo$ance of a-enc/ disburse+entsFcost esti+ates for -overn+ent pro=ects. 3 +ore hu+ane procedure, and totall/ confor+able to the due process clause, is for the *O3 representative to allo$ the +e+bers of the *ontracts *o++ittee +andator/ access to the *O3 source docu+entsFcanvass sheets. #esides, this -esture $ould have been in ,eepin- $ith *O39s o$n 3udit *ircular No. 8&6&&63 par. 0.A, that: . . . 3s re-ards e?cessive e?penditures, the/ shall be deter+ined b/ place and ori-in of -oods, volu+e or >uantit/ of purchase, service $arrantiesF>ualit/, special features of units purchased and the li,e . . . #/ havin- access to source docu+ents, petitioners could then satisf/ the+selves that *O3 -uidelinesFrules on e?cessive e?penditures had been observed. The transparenc/ $ould also erase an/ suspicion that the rules had been utili;ed to terrori;e and or $or, in=ustice, instead of ensurin- a U$or,in- partnershipU bet$een *O3 and the -overn+ent a-enc/, for the conservation and protection of -overn+ent funds, $hich is the +ain rationale for *O3 audit. The second assi-ned error is tied in $ith the first. He a-ree $ith petitioners that *O39s disallo$ance $as not sufficientl/ supported b/ evidence, as it $as pre+ised purel/ on undocu+ented clai+s, as in fact petitioners $ere denied access to the actual canvass sheets or price >uotations fro+ accredited suppliers. *ircular No. 8&6&&63 of the *o++ission on 3udit la/s do$n the follo$in- standards for U ?cessiveU ?penditures: 2.2 S* SSIV SP NDIT"R S.

Definition: The ter+ Ye?cessive e?penditures9 si-nifies unreasonable e?pense or e?penses incurred at an i++oderate >uantit/ and e?orbitant price. It also includes e?penses $hich e?ceed $hat is usual or proper as $ell as e?penses $hich are unreasonabl/ hi-h, and be/ond =ust +easure or a+ount. The/ also include e?penses in e?cess of reasonable li+its. Standard for Y ?cessive9 ?penditures The ter+ Ye?cessive e?penditures9 pertains to the variables of Price and Kuantit/. '. Price P The price is e?cessive if it is +ore than the '1E allo$able price variance bet$een the price paid for the ite+ bou-ht and the price of the sa+e ite+ per canvass of the auditor. Volu+e Discounts P The price is dee+ed e?cessive if the discounts allo$ed in bul, purchases are not reflected in the price offered or in the a$ard or in the purchaseFpa/+ent docu+ent. 2. Factors to be *onsidered P In deter+inin- $hether or not the price is e?cessive, the follo$in- factors +a/ be considered. 3 P Suppl/ and de+and forces in the +ar,et. ?. P Hhere there is a suppl/ shorta-e of a particular product, ? ? ? prices of these products +a/ var/ $ithin a da/. # P 7overn+ent Price Kuotations

* P Harrant/ of Products or Special Features. The price is not necessaril/ e?cessive $hen the serviceFite+ is offered $ith $arrant/ or special features $hich are relevant to the needs of the a-enc/ and are reflected in the offer or a$ard. D P #rand of Products. Products of reco-ni;ed brand co+in- fro+ countries ,no$n for producin- such >ualit/ products are relativel/ e?pensive. ?. P Solin-en scissors ? ? ? +ade in 7er+an/ are +ore e?pensive than scissors $hich do not carr/ such brand and are not +ade in 7er+an/. It $as incu+bent upon the *O3 to prove that the fore-oin- standards $ere +et in its audit disallo$ance. The records do not sho$ that such $as done in this case. On the third issue, absent due process and evidence to support *O39s disallo$ance, *O39s rulin- on petitioners9 liabilit/ has no basis.'2 4 +phasis supplied.5 3s correctl/ stated b/ the +a=orit/, the above6+entioned declaration in 3rriola $as reiterated in National *enter for Mental @ealth Mana-e+ent v. *O3, $here the *ourt also ruled that Uprice findin-s reflected in a report are not, in the absence of the actual canvass sheets andFor price >uotations fro+ identified suppliers, valid bases for outri-ht disallo$ance of a-enc/ disburse+ents for -overn+ent pro=ects.U '% #oth 3rriola and National *enter for Mental @ealth Mana-e+ent paved the $a/ for the for+ulation of *O3 Me+orandu+ No. ()61'0 dated March 2', '((), $hich i+posed +ore strin-ent re>uire+ents on the process of evidence6-atherin- to support an/ audit findin- of overpricin-. Said *O3 Me+orandu+ re>uired that the initial findin-s be supported b/ canvass sheets andFor price >uotations indicatin-: 4'5 the identitiesFna+es of the suppliers or sellersI 405 the availabilit/ of stoc, sufficient in >uantit/ to +eet the re>uire+ents of the procurina-enc/I 425 the specifications of the ite+s that should +atch those involved in the overpricin-I and 4%5 the purchaseFcontract ter+s and conditions that should be the sa+e as those of the >uestioned transaction. In =ustif/in- that there $as no violation of *O3 rules, the +a=orit/ cited Nava v. Palattao, '& $here the *ourt held that neither 3rriola nor *O3 Me+orandu+ No. ()61'0 can be -iven an/ retroactive effect. I respectfull/ e?cept. It is true that this *ourt in Nava held that neither 3rriola nor the *O3 Me+orandu+ that $as issued pursuant to 3rriola and National *enter for Mental @ealth Mana-e+ent can be -iven an/ retroactive effect. The +a=orit/, ho$ever, failed to ta,e into consideration that the ver/ reason $h/ 3rriola $as not applied in Nava is because both cases $ere cast under different circu+stances. 3s this *ourt $rote in Nava: Second and +ore i+portant, the circu+stances in 3rriola are different fro+ those in the present case. In the earlier case, the *O3 +erel/ referred to a cost co+parison +ade b/ the en-ineer of *O36Technical Services Office 4TSO5, based on unit costs furnished b/ the Price Monitorin- Division of the *O36TSO. The *O3 even refused to sho$ the canvass sheets to the petitioners, e?plainin- that the source docu+ent $as confidential. In the present case, the audit tea+ e?a+ined several docu+ents before the/ arrived at their conclusion that the sub=ect transactions $ere -rossl/ disadvanta-eous to the -overn+ent. These docu+ents $ere included in the For+al Offer of vidence sub+itted to the Sandi-anba/an. Petitioner $as li,e$ise presented an opportunit/ to controvert the findin-s of the audit tea+ durin- the e?it conference held at the end of the audit, but he failed to do so. Further, the fact that onl/ three canvass sheetsFprice >uotations $ere presented b/ the audit tea+ does not bolster petitioner9s clai+ that his ri-ht to due process $as violated. To be sure, there is no rule statin- that all price canvass sheets +ust be presented. It is enou-h that those that are +ade the basis of co+parison be sub+itted for scrutin/ to the parties bein- audited. Indubitabl/, these docu+ents $ere properl/ sub+itted and

testified to b/ the principal prosecution $itness, !aura Soriano. Moreover, petitioner had a+ple opportunit/ to controvert the+.'A4 +phasis supplied.5 On the other hand, the circu+stances in the instant case are si+ilar to those in 3rriola, $here U*O3 +erel/ referred to Ya cost co+parison +ade b/ an en-ineer of *O36TSO, based on unit costs furnished b/ the Price Monitorin- Division of the *O36TSO.9 U In the case at bar, *O3 +erel/ based its findin-s on overpricin- on the TSO canvass and a telephone canvass $hich $as confir+ator/ of the TSO canvass. videntl/, the TSO canvass and the confir+ator/ telephone canvass do not co+pl/ $ith the re>uire+ent of an actual canvass andFor price >uotations fro+ identified suppliers as a valid basis for outri-ht disallo$ance, follo$in- 3rriola. The +a=orit/, ho$ever, is bent on disre-ardin- the fore-oin- 3rriola holdin- on the basis of the pronounce+ent in Nava that it cannot be applied retroactivel/. It is $orth notin-, ho$ever, that in #uscaino v. *O3,') a case involvin- an audit disallo$ance +ade in '(8A, as in 3rriola, the *ourt9s rulin- in 3rriola $as nonetheless applied retroactivel/ therein. Specificall/: 7oin- into the +erits of the case, the *ourt finds that the B*O3C acted $ith -rave abuse of discretion in handindo$n its assailed decision. The various disburse+ents upon $hich petitioner9s liabilit/ is based have not been indubitabl/ established as patentl/ invalid or irre-ular and the disallo$ances ordered b/ *O3 $ere not substantiated b/ sufficient evidence on record. To be-in $ith, as re-ards the ite+s disallo$ed on the -round of overpricin-, petitioner $as ad=ud-ed liable therefor because he $as a +e+ber of the *anvass and 3$ard *o++ittee $hich $as tas,ed to certif/ that the prices sub+itted $ere the lo$est and $hich reco++ended the a$ard to the supplier. The disallo$ances $ere +ade on the basis of respondent9s alle-ation or theor/ that the school and other office supplies +a/ be bou-ht fro+ other suppliers at prices +uch lo$er than those of the supplier to $ho+ the bid $as a$arded. In order to find out ho$ the *O3 reached such a conclusion, petitioner as,ed the *O3 to furnish hi+ $ith the necessar/ infor+ation andFor docu+ents that $ould indicate the lar-e disparit/ in the prices such as the >uotation of prices of ever/ ite+ re6canvassed b/ the resident auditor, reflectin- the brand or >ualit/ of the ite+s, the na+es and addresses of the suppliers $here the ite+s $ere re6canvassed and the date sub=ect ite+s $ere re6canvassed. Respondent *O3, ho$ever, did not furnish the sa+e ? ? ?. Hithout the necessar/ infor+ation andFor docu+ents, it baffles the *ourt ho$ *O3 could have arrived at the conclusion that there $ere cases of overpricin-. 3nd $ithout the needed infor+ation andFor docu+ents, the petitioner $as not afforded the opportunit/ to refute the disallo$ances, ite+ b/ ite+, and to =ustif/ the le-alit/ of the purchases involved. 3s ar-ued b/ the petitioner, U@o$ can the undersi-ned 4petitioner5 deter+ine the difference in prices and per cent increases bet$een the then procure+ent officer9s canvassed prices and the then *O3 3uditor9s re6canvassed prices and possibl/ =ustif/ ite+ b/ ite+ the le-alit/ of the purchase $hen as /ou said Yno such docu+ent as /ou indicated above $ere turned6over to the undersi-ned 4present P"P *O3 3uditor59W The purchase orders contain several ite+s and it is i+portant that those ite+s $hich $ere alle-edl/ overpriced should be identified.U The re>uire+ents of due process of la$ +andate that ever/ accused or respondent be apprised of the nature and cause of the char-e a-ainst hi+, and the evidence in support thereof be sho$n or +ade available to hi+ so that he can +eet the char-e ? ? ?. *O39s failure to furnish or sho$ to the petitioner the inculpator/ docu+ents or records of purchases and price levels constituted a denial of due process $hich is a valid defense a-ainst the accusation. 3bsent an/ evidence docu+entar/ or testi+onial to prove the sa+e, the char-e of *O3 a-ainst the herein petitioner +ust fail for $ant of an/ le- to stand on. In the '((' decision in the case of Vir-ilio *. 3rriola and .ulian Fernande; vs. *o++ission on 3udit and #oard of !i>uidators, ? ? ? $hich $as reiterated in the case of National *enter for Mental @ealth Mana-e+ent vs. *o++ission on 3udit ? ? ?, this *ourt succinctl/ held that +ere alle-ations of overpricin- are not, U Y. . . in the absence of the actual canvass sheets andFor price >uotations fro+ identified suppliers, a valid basis for outri-ht disallo$ance of a-enc/ disburse+entsFcost esti+ates for -overn+ent pro=ects.9

3 +ore hu+ane procedure, and totall/ confor+able to the due process clause, is for the *O3 representative to allo$ the +e+bers of the *ontracts *o++ittee +andator/ access to the *O3 source docu+entsFcanvass sheets. ??? #/ havin- access to source docu+ents, petitioners could then satisf/ the+selves that *O3 -uidelinesFrules on e?cessive e?penditures had been observed. The transparenc/ $ould also erase an/ suspicion that the rules had been utili;ed to terrori;e andFor $or, in=ustice, instead of ensurin- a U$or,in- partnershipU bet$een *O3 and the -overn+ent a-enc/, for the conservation and protection of -overn+ent funds, $hich is the +ain rationale for *O3 audit. ??? ??? ???

He a-ree $ith petitioners that *O39s disallo$ance $as not sufficientl/ supported b/ evidence, as it $as pre+ised purel/ on undocu+ented clai+s, as in fact petitioners $ere denied access to the actual canvass sheets or price >uotations fro+ accredited suppliers. . . . ??? ??? ???

It $as incu+bent upon the *O3 to prove that its standards $ere +et in its audit disallo$ance. The records do not sho$ that such $as done in this case. . . . absent due process and evidence to support *O39s disallo$ance, *O39s rulin- on petitioner9s liabilit/ has no basis.U Indeed, $ithout the evidence upon $hich the char-e of overpricin- is anchored, apart fro+ bein- a denial of due process, it $ould not be possible to attach liabilit/ to petitioner. '8 Hh/ *O3 Me+orandu+ *ircular No. ()61'0 cannot be applied to the instant case is understandable. It $as not /et in e?istence at the ti+e the disallo$ance $as +ade. The ratio underpinnin- 3rriola, ho$ever, is s>uarel/ in point. There is, thus, no rh/+e or reason $h/, ta,in- into account #uscaino, the findin-s in 3rriola cannot be +ade to appl/ in the case at bar. To reiterate, 3rriola stated: 3 +ore hu+ane procedure, and totall/ confor+able to the due process clause, is for the *O3 representative to allo$ the +e+bers of the *ontracts *o++ittee +andator/ access to the *O3 source docu+entsFcanvass sheets. #esides, this -esture $ould have been in ,eepin- $ith *O39s o$n 3udit *ircular No. 8&6&&63 par. 0.A, that: . . . 3s re-ards e?cessive e?penditures, the/ shall be deter+ined b/ place and ori-in of -oods, volu+e or >uantit/ of purchase, service $arrantiesF>ualit/, special features of units purchased and the li,e . . . #/ havin- access to source docu+ents, petitioners could then satisf/ the+selves that *O3 -uidelinesFrules on e?cessive e?penditures had been observed. The transparenc/ $ould also erase an/ suspicion that the rules had been utili;ed to terrori;e and or $or, in=ustice, instead of ensurin- a U$or,in- partnershipU bet$een *O3 and the -overn+ent a-enc/, for the conservation and protection of -overn+ent funds, $hich is the +ain rationale for *O3 audit. 4 +phasis supplied.5 3s thin-s stand, the *O3 failed to -ive +andator/ access to the *O3 source docu+entsFcanvass sheets. Its findin-s on overpricin- $ere based, $ithout +ore, on the TSO canvass and a telephone canvass confir+ator/ of the TSO canvass. The steps *O3 thus too, do not confor+ to the due process re>uire+ents. !i,e$ise, this fails to satisf/ petitioner that the *O3 -uidelines on e?cessive e?penditures had been observed. *onco+itantl/, it behooves upon the *ourt to appl/ its rulin- in 3rriola to the present case. No valid co+parison #/ e?press constitutional provision, the *O3 is e+po$ered to e?a+ine and audit the use of funds b/ an a-enc/ of the national -overn+ent on a post6audit basis.'( For this purpose, the *onstitution has provided that the *O3 Ushall have e?clusive authorit/, sub=ect to the li+itations in this 3rticle, to define the scope of its audit and e?a+ination, establish the techni>ues and +ethods re>uired therefor, and pro+ul-ate accountin- and auditin-

rules, and re-ulations includin- those for the prevention and disallo$ance of irre-ular, unnecessar/, e?cessive, e?trava-ant or unconscionable e?penditures, or uses of -overn+ent funds and properties.U01 On the other hand, the 3d+inistrative *ode vests the Pre6>ualification, #ids and 3$ards *o++ittee 4P#3*5 the responsibilit/ Ufor the conduct of pre>ualification of contractors, biddin-s, evaluation of bids and reco++endin- a$ards of contracts.U #et$een the *O3, $hich can onl/ perfor+ post6audit functions, and the P#3* +e+bers of *D3, it is the latter that have the technical e?pertise to deter+ine the offers that $ill best +eet the needs and re>uire+ents of their office.0' *O3 cannot, therefore, substitute or i+pose its o$n =ud-+ent on the P#3* +e+bers of *D3 $ithout an/ le-al or factual basis. It can onl/ audit purchases +adeI it cannot prescribe $hat should be purchased.1F0phi1 To uphold the *O39s findin- that brand $as irrelevant in the deter+ination of the reasonableness of the price at $hich *D3 purchased the sub=ect co+puters is to trod rou-hshod at the discretionar/ po$ers of the P#3* to set the criteria and approve the purchase of the e>uip+ent. It is settled =urisprudence that in assessin- $hether there $as indeed an overpricin-, a specific co+parison $ith the sa+e brand, features and specifications as those that $ere actuall/ purchased should be +ade.00 3side fro+ the fore-oin- reasons, I differ $ith the vie$ of the +a=orit/ that *O39s observation that the *D3 should have been entitled to volu+e discount $as valid. On the contrar/, a perusal of *O3 *ircular No. 8&6&&6 3 $ould sho$ that there $as neither an/ le-al obli-ation on the part of Tetra to -ive a volu+e discount nor to de+and for said discount on the part of *D3. Particularl/: 0.Volu+e Discounts 6 The price is dee+ed e?cessive if the discounts allo$ed in bul, purchases are not reflected in the price offered or in the a$ard or in the purchasesFpa/+ent docu+ent. The above6>uoted provision si+pl/ states that if the discounts allo$ed in bul, purchases are not reflected in the price offered or in the a$ard or in the purchasesFpa/+ent docu+ent, then the price is dee+ed e?cessive. Hithout such allo$ed discounts, said provision does not have an/ bearin- for purposes of ascertainin- $hether a price should be dee+ed e?cessive or not. Discernibl/, no le-al obli-ation $as i+posed for the -ivin- or de+andin- of volu+e discount can be inferred therefro+. Hhen the $ords and phrases in the statute are clear and une>uivocal, the la$ is applied accordin- to its e?press ter+s.02 Verba le-is non est recedendu+, or fro+ the $ords of a statute there should be no departure.0% Hhen factual findin-s of ad+inistrative a-encies are not bindin- upon the *ourt 3d+inistrative findin-s of fact are accorded -reat respect, and even finalit/ $hen supported b/ substantial evidence. @o$ever, $hen it can be sho$n that ad+inistrative bodies -rossl/ +isappreciated evidence of such nature as to co+pel a contrar/ conclusion, this *ourt has not hesitated to reverse their factual findin-s. 0& 3s this *ourt held in !iton=ua v. *ourt of 3ppeals:0A It is clear fro+ the fore-oin- discussion that the factual findin-s of the S * are not supported b/ substantial evidence. @ence, it is the e?ception, rather than the -eneral rule that factual findin-s of ad+inistrative a-encies are bindin- upon the courts, that should appl/. The e?ceptions are $ell6stated in Datu Ta-oranao #enito v. S *: Hell6settled is the rule that the findin-s of facts of ad+inistrative bodies $ill not be interfered $ith b/ the courts in the absence of -rave abuse of discretion on the part of said a-encies, or unless the afore+entioned findin-s are not supported b/ substantial evidence. 47o,on-$ei, .r. vs. S *, () S*R3 )8.5 In a lon- strin- of cases, the Supre+e *ourt has consistentl/ adhered to the rule that decisions of ad+inistrative officers are not to be disturbed b/ the courts e?cept $hen the for+er have acted $ithout or in e?cess of their =urisdiction or $ith -rave abuse of discretion ? ? ?. 4 +phasis suppliedI citations o+itted.5 Jap v. *O3 is of the sa+e tenor, to $it:

He have previousl/ declared that it is the -eneral polic/ of the *ourt to sustain the decisions of ad+inistrative authorities, especiall/ one that $as constitutionall/ created li,e herein respondent *O3, not onl/ on the basis of the doctrine of separation of po$ers, but also of their presu+ed e?pertise in the la$s the/ are entrusted to enforce. It is, in fact, an oft6repeated rule that findin-s of ad+inistrative a-encies are accorded not onl/ respect but also finalit/ $hen the decision and order are not tainted $ith unfairness or arbitrariness that $ould a+ount to -rave abuse of discretion. Thus, onl/ $hen the *O3 acted $ithout or in e?cess of =urisdiction, or $ith -rave abuse of discretion a+ountin- to lac, or e?cess of =urisdiction, +a/ this *ourt entertain a petition for certiorari under Rule A& of the Rules of *ourt.0) 4 +phasis supplied.5 In the case at bar, there is reason to set aside *O39s decisions and the factual pre+ises holdin- the+ to-ether, for the said decisions are not supported b/ substantial evidence indicatin- petitioner9s responsibilit/ for the disallo$ance. Substantial evidence +eans such a+ount of relevant evidence $hich a reasonable +ind +i-ht accept as ade>uate to =ustif/ a conclusion.08 In upholdin- the findin- b/ *O3 of the personal liabilit/ of petitioner for the overpricin- of the co+puters procured b/ *D3, the +a=orit/ found: 3s pointed out in our Decision, records sho$ed it $as petitioner $ho ordered the reconstitution of the P#3* $hich nullified the previous biddin- conducted in Dece+ber '(('. @e further secured the services of the D3P6 T * for technical evaluation and si-ned the a-ree+ent for the said technical assistance $hen it is alread/ the dut/ of the P#3* *hair+an. Not$ithstandin- petitioner9s clai+ that it $as part of his duties as ?ecutive Director to UBsi-nC out-oin- co++unicationsFletters e?cept letters addressed to @eads of offices, *on-ress+en, Senators and to the Office of the President,U the fact re+ains that the services of D3P6T * for P'&,111.11 fee $ere availed of at his instance. 3s it turned out, the D3P6T * ca+e out $ith t$o different technical evaluation reports, the second havin- been antedated but also si-ned b/ D3P6T * Director Minerva Mecina $ho ad+itted it $as her si-nature in both docu+ents but clai+ed she $as una$are that she had si-ned t$o different docu+ents. The discrepancies in the t$o reports 4in the first i+partial result, Tetra -ot the lo$est ran,in- but in the second result +ade after *D3 ordered certain chan-es in the -radin- s/ste+, Tetra eventuall/ $on5 B$ereC found b/ 3uditor Rubico to be irre-ular and indicative of bad faith. #ut as aptl/ observed b/ the OS7, Uthere +i-ht have been a +isappreciation of the facts of the case.U0( videntl/, the onl/ bases for a findin- of bad faith on the part of petitioner so as to render hi+ personall/ liable are: 4'5 the reconstitution of the P#3* b/ petitionerI and 405 petitioner9s en-a-e+ent of the services of the D3P6T *. #/ the+selves, there is nothin- ille-al fro+ these actions. 3s +entioned above, the creation of the P#3* is even sanctioned b/ the 3d+inistrative *ode, $hile the en-a-e+ent of the services of the D3P6 T *, a third6part/ evaluator, b/ petitioner is even an indication that he U$anted transparenc/ and independence in the biddin- process.U21 No bad faith can also be i+puted upon petitioner, because, contrar/ to the assertion of respondents, the records do not support an/ findin- that he prevailed upon the D3P6T * to +odif/ the initial result of the technical evaluation of the co+puters b/ i+posin- an alle-edl/ irrelevant -radin- s/ste+ that $as intended to favor one of the bidders. 3ssu+in- that there $as, indeed, an alle-ed intent to alter the evaluation results of the biddin-, no sufficient evidence can point to petitioner9s direct participation or involve+ent in the said char-e. It cannot be overe+phasi;ed that no connection $as established bet$een petitioner and a certain Re/ van-elista, a +e+ber of the staff of the P#3* *hairperson, $ho $as said to have -one to D3P6T * to +odif/ the initial result of the technical evaluation of the bidders9 co+puter units. Moreover, the +ere fact that petitioner si-ned the vouchers and other docu+ents for the processin- of the purchase after the $innin- bidder has been chosen does not per se constitute bad faith on his part. Notabl/, petitioner9s si-nature $as -iven as final reco++endin-Fapprovin- authorit/ onl/ after the entire biddin- process $as conducted. @e cannot, therefore, be faulted for rel/in- and dependin-, to a reasonable e?tent, on the inte-rit/ and perfor+ance of dut/ b/ the P#3*, as $ell as the #oard of 3d+inistrators, $hich acted on the docu+ents. #/ analo-/, this *ourt9s rulin- in 3rias v. Sandi-anba/an 2' is instructive: ? ? ? 3ll heads of offices have to rel/ to a reasonable e?tent on their subordinates and on the -ood faith of those $ho prepare bids, purchase supplies, or enter into ne-otiations. If a depart+ent secretar/ entertains i+portant visitors, the auditor is not ordinaril/ e?pected to call the restaurant about the a+ount of the bill, >uestion each -uest $hether he $as present at the luncheon, in>uire $hether the correct a+ount of food $as served, and

other$ise personall/ loo, into the rei+burse+ent voucher9s accurac/, propriet/, and sufficienc/. There has to be so+e added reason $h/ he should e?a+ine each voucher in such detail. 3n/ e?ecutive head of even s+all -overn+ent a-encies or co++issions can attest to the volu+e of papers that +ust be si-ned. There are hundreds of docu+ents, letters, +e+oranda, vouchers, and supportin- papers that routinel/ pass throu-h his hands. The nu+ber in bi--er offices or depart+ents is even +ore appallin-. There should be other -rounds than the +ere si-nature or approval appearin- on a voucher to sustain a conspirac/ char-e and conviction. 4 +phasis supplied.5 3bsent an/ clear sho$in- that petitioner had a hand in the alle-ed intent to alter the evaluation results of the biddin-, the presu+ption of re-ularit/ in the perfor+ance of dut/ should appl/. Mere sur+ises and con=ectures, absent an/ proof $hatsoever, $ill not tilt the balance a-ainst this presu+ption.20 3ccordin-l/, I vote to -rant the +otion for reconsideration, recall and set aside the March 8, 01'' Decision of this *ourt, and reverse and set aside *O3 Decision Nos. (86%0% and 011261A' dated October 0', '((8 and March '8, 0112, respectivel/, and Notice of Disallo$ance No. (2611'A6'1' dated Nove+ber '), '((2. PRESB#TERO ). VELASCO, )R. 3ssociate .ustice

!oot&ot,s
'

Rollo, pp. &16&0. Id. at A'6A2. Id. at A8. Id. at 2)&. 7.R. No. (12A%, Septe+ber 21, '((', 010 S*R3 '%). Rollo, p. %)8. Id. at %8A. Id. at %88. Id. at &1). Id. Id. at &18. Id. at &'1. 3rriola v. *O3, supra note &, at '&26'&A. 7.R. No. ''%8A%, Dece+ber A, '((A, 0A& S*R3 2(1, %11. 7.R. No. 'A10'', 3u-ust 08, 011A, %(( S*R3 )%&.

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'1

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Id. at )A%. 7.R. No. ''1)(8, .ul/ 01, '(((, 2'1 S*R3 A2&. Id. at A%A6A%(. 4*itations o+itted.5 Villanueva v. *O3, 7.R. No. '&'(8), March '8, 011&, %&2 S*R3 )80, )('. Id. at )('6)(0I citin- *onstitution, 3rt. IS4D5, Sec. 0405. Id. at )(A. 3rriola v. *O3, supra note &, at '&%.

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'8

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01

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*o++issioner of Internal Revenue v. *entral !u;on Dru- *orp., 7.R. No. '%8&'0, .une 0A, 011A, %(0 S*R3 &)&, &8'.
0%

Philippine 3+use+ent Q 7a+in- *orp. v. Philippine 7a+in- .urisdiction, Inc., 7.R. No. '))222, 3pril 0%, 011(, &8A S*R3 A&8, AA%6AA&.
0&

P3!, Inc. v. N!R*, 7.R. No. '')128, Septe+ber 0&, '((), 0)( S*R3 %%&, %&8. 7.R. No. '010(%, Februar/ '1, '((8, 08A S*R3 '2A. 7.R. No. '&8&A0, 3pril 02, 01'1, A'( S*R3 '&%, ')%.

0A

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08

Ventis Mariti+e *orp. v. *3, 7.R. No. 'A1228, October A, 0118, &A) S*R3 %)%, %81I citinS,ippers "nited Pacific, Inc. v. Ma-uad, 7.R. No. 'AA2A2, 3u-ust '&, 011A, %(8 S*R3 A2(.
0(

Rollo, p. %)8. Id. at %8(. 7.R. Nos. 8'&A2 Q 80&'0, Dece+ber '(, '(8(, '81 S*R3 21(, 21A. Flores v. Monte+a/or, 7.R. No. ')1'%A, 3u-ust 0&, 01'1, A0( S*R3 ')8, '(&.

21

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20

The !a$phil Pro=ect 6 3rellano !a$ Foundation

D#SSENT#NG OP#N#ON SERENO, J.: The Office of Solicitor 7eneral 4OS75 is s$orn to protect the interests of -overn+ent as its principal la$ officer and le-al defender. In a ver/ rare occasion as in this case, the OS7 has ta,en the side of private petitioner and a-ainst public respondents. Hhen the OS7 adopts a position contrar/ to that of a -overn+ent a-enc/, this *ourt should seriousl/ pause and loo, at the facts and the la$ +ore closel/. In 7on;ales v. *have;, ' $e said: Moreover, endo$ed $ith a broad perspective that spans the le-al interests of virtuall/ the entire -overn+ent officialdo+, the OS7 +a/ be e?pected to transcend the parochial concerns of a particular client a-enc/ and instead, pro+ote and protect the public $eal. 7iven such ob=ectivit/, it can discern, +etaphoricall/ spea,in-, the panopl/ that is the forest and not =ust the individual trees. Not +erel/ $ill it strive for a le-al victor/

circu+scribed b/ the narro$ interests of the client office or official, but as $ell, the vast concerns of the soverei-n $hich it is co++itted to serve. 4 +phasis supplied.5 Petitioner is before us, see,in- a reconsideration of this *ourt9s Decision pro+ul-ated on 8 March 01''. @e +aintains that public respondents failed to present an/ evidence supportin- the alle-ation that the biddin- for the co+puter e>uip+ent $as ri--ed, or that he had an/ part in such +anipulation if indeed there $as an/. @e also clai+s that the dispositive portion of the Decision $ron-l/ +ade hi+ solel/ liable for the disallo$ed a+ount $hen it stated as follo$s: H@ R FOR , the petition is D NI D. The *O3 Decision Nos. (86%0% and 011261A' dated October 0', '((8 and March '8, 0112, respectivel/, are 3FFIRM D and "P@ !D. Petitioner *andelario !. Verso;a, .r. is hereb/ ordered to R IM#"RS the a+ount of P88',8'(.11 sub=ect of Notice of Disallo$ance No. (2611'A6 '1' dated Nove+ber '), '((2 and the correspondin- *S# No. (%6'1' dated .anuar/ '1, '((%. He subse>uentl/ re>uired the OS7 and respondents to co++ent on the Motion for Reconsideration. The OS7 noted that Uthere is no findin- of fact in the Decision dated March 8, 01'' $hich supports this serious findin- or deter+ination that the late Petitioner acted in bad faith so as to +a,e hi+ personall/ liable for the said a+ount disallo$ed.U The OS79s *o++ent further states: 3ssu+in- $ithout ad+ittin- that there $as an alle-ed intent to alter the results of the biddin-, the late Petitioner $as NOT DIR *T!J R SPONSI#! FOR T@IS 4and there is also no factual findin- even of an/ indirect responsibilit/ on the part of the late Petitioner5 since it $as a certain Re/ van-elista $ho $as directl/ responsible. ven b/ itself, the actions b/ Mr. Re/ van-elista do not per se constitute such serious bad faith as to be interpreted as deliberatel/ favourin- Tetra co+puter bid... ??? ??? ???

To be certain, the *D3 bein- a -overn+ent a-enc/Fcorporation, there is no sin-le alle-ation or i+putation +uch less an/ evidence of an/ act constitutin- bad faith, +alice or ne-li-ence on the part of the petitioner 4durin- his services as ?ecutive Director of the *D35 in an/ of the issuances b/ the *O3, $hether it be *O3 Decision No. (86%0% dated October 0', '((8 43nne? U3U5 or *O3 Decision No. 011261A' dated March '8, 0112 43nne? U*U5 or even the Notice of Disallo$ance (2611'A6'1' dated Nove+ber '), '((2 43nne? UFU5, let alone an/ supportin- docu+ent thereof. 4 +phasis supplied.5 Revie$in- the case at hand, this *ourt9s dependence on unsupported alle-ations is alar+in-. ven +ore alar+in- is the fact that its findin-s are contrar/ to $hat the evidence actuall/ proves. I reiterate the five reasons I enu+erated in +/ Dissent to the Decision dated 8 March 01'' $h/ this *ourt +ust -rant the Petition. First, the *o++ission on 3udit 4*O35 cannot violate the sa+e rules it i+poses on all public offices re-ardinthe +anner of conductin- canvasses. Second, the *O3 auditor cannot substitute her o$n discretion for that of the *ooperative Develop+ent 3uthorit/ 4*D35 b/ den/in- its ri-ht to prefer certain specifications for the co+puters it intended to purchase for its o$n use. Third, the a+ount of disallo$ance has no basis in fact, is -rossl/ disproportionate to the total purchase price, and is in the nature of punitive da+a-es. Fourth, there is no clear and convincin- evidence that there $ere instances of +anipulation durin- the biddin- process. Moreover, this alle-ation of +anipulation $as belatedl/ raised b/ public respondents, havin- been raised for the first ti+e onl/ in *O39s *o++ent before this *ourt, thus violatin- petitioner9s ri-ht to due process. Finall/, respondent +iserabl/ failed to sho$ that petitioner $as personall/ liable for the return of the disallo$ance. In the Decision, the ponencia focuses on *O3 resident auditor !u;vi+inda V. Rubico9s alle-ation of +anipulation of the biddin- process. 3 =udicious revie$ of the records and pleadin-s reveals, ho$ever, that the conspirac/ theor/ of the so6called +anipulation $as a +ere fi-+ent of the i+a-ination of an overea-er auditor. It +ust be e+phasi;ed that there are t$o ver/ serious fla$s in the findin-s of fact in the Decision, $hich +ust thus be reconsidered.

First, respondents failed to refute the presu+ption of re-ularit/ in the e?ercise of official functions. 3side fro+ the reports and bare alle-ations sub+itted b/ the resident auditor, there is nothin- in the records that $ould spea, of an/ hint of +anipulation or ille-alit/ in an/ part of the biddin- process. Second, respondents also failed to sho$ that petitioner $as involved in the so6called +anipulation of the biddinprocess, if ever there $as one. To prove the alle-ed +anipulation, the/ presented onl/ three docu+ents, t$o of $hich $ere letters fro+ auditor Rubico herself, dated ') Nove+ber '((& and 02 Nove+ber '((&, addressed to *O3 !e-al *ounsel Director Ra>uel @abitan. The third docu+ent is the letter, also dated 02 Nove+ber '((&, $ritten b/ 3ntonio Kuintos, .r. of the Develop+ent 3cade+/ of the Philippines 4D3P5 upon the re>uest of *O3 representative 3braha+ Rodri-ue;. The first evidence that the +a=orit/ relied on $as the ') Nove+ber '((& letter of auditor Rubico. @ere she alle-ed that she UdiscoveredU an irre-ularit/ in the biddin- process. She also alle-ed that the results $ere +anipulated to +a,e it appear that Tetra *orporation bested the other bidders. In her narration of her so6called Udiscover/,U she never +entioned the na+e of petitioner. The second evidence that the +a=orit/ considered $as Rubico9s 02 Nove+ber '((& letter, $herein she +entioned petitioner9s na+e t$ice, but not in an/ +anner as to indicate an/ suspicious behavior on petitioner9s part. The first instance $as in para-raph ', $here she +entioned that petitioner had reconstituted the Public #iddin- and 3$ards *o++ittee 4P#3*5. The second instance $as in para-raph &, $here she +erel/ confir+ed that he had si-ned a Me+orandu+ of 3-ree+ent bet$een the *D3 and the D3P. These t$o acts $ere neither ille-al nor prohibited per se, and Rubico has not clai+ed so in an/ of her letters. Moreover, as the +a=orit/ itself pointed out in its Decision pro+ul-ated on 8 March 01'', onl/ para-raphs A to '0 of the 02 Nove+ber '((& letter $ere relevant to the discussion of the alle-ed +anipulation. In these para-raphs, a-ain, auditor Rubico +ade no +ention at all of petitioner and his supposed participation in the alle-ed +anipulation. The third and final piece of evidence on $hich the +a=orit/ based its findin-s on $as Kuintos9 letter also dated 02 Nove+ber '((&. !i,e$ise, his letter neither +entioned petitioner nor proved +anipulation in the technical evaluation of the co+puter e>uip+ent. !oo,in- ver/ closel/ at these pieces of evidence, it is clear that the +a=orit/9s Decision $as un$arranted and $as bereft of an/ basis. More i+portantl/, an indication that the *O3 officials the+selves found the alle-ed +anipulation to be i+probable or, at the ver/ least, unsupported b/ evidence $as the inaction thereon b/ *O39s le-al counsel and its *o++issioners *elso D. 7an-an, Raul *. Flores and Sofronio #. "rsal in *O3 Decision No. (86%0%I and a-ain b/ *o++issioners 7uiller+o N. *ara-ue, ++anuel Dal+an and Raul *. Flores in *O3 Decision No. 011261A'. To recall, *D3 purchased the co+puter e>uip+ent in Dece+ber '((0. Respondent *O3 issued the Notice of Disallo$ance on ') Nove+ber '((2. 3uditor Rubico issued her reports in Nove+ber '((&, and these $ere dul/ received on 'A Februar/ '((A b/ respondent9s le-al office throu-h the assistant co++issioner of the National 7overn+ent 3udit Office I. 3ttached to the reports $ere additional pieces of evidence sho$in- that petitioner and the P#3* $ere liable for the disallo$ed a+ount. @o$ever, respondent9s le-al counsel did not act on the alle-ed +anipulation or institute an/ ad+inistrative action a-ainst petitioner and the P#3* +e+bers. Further+ore, despite bein- additional evidence for the disallo$ance, respondent9s Decision No. (86%0% dated 0' October '((8 and Decision No. 011261A' dated '8 March 0112 $ere deafenin-l/ silent on Rubico9s reports. The onl/ conclusion to be reached is that the hi-her officials of *O3 did not find an/ +erit in the auditor9s alle-ations after conductin- a U=udicious evaluation of the facts and circu+stances.U 0 @ence, it $ould be un$arranted for this *ourt to hold other$ise. To reiterate, it $as onl/ in respondents9 *o++ent dated '0 March 011% filed before this *ourt that the alle-ation of ille-al +anipulation $as first +ade. Prior to this *o++ent, there $as no indication that petitioner $as ever infor+ed of the possible accusation of illicit behaviour, or that such alle-ations $ere dul/ considered b/ the *o++issioners $ho issued the assailed rulin-s. In contrast, despite bein- cau-ht off -uard b/ the belated alle-ation of +anipulation in the biddin- process, petitioner $as able to present substantial evidence to sho$ that his participation $as onl/ +inisterial. @e dul/

sub+itted additional docu+ents2 and attached the+ to his Repl/, % thus sho$in- that the acts referred to b/ the auditor $ere re-ular and $ithin the la$ful a+bit of his authorit/ as e?ecutive director. Moreover, this *ourt blatantl/ i-nores and disre-ards prevailin- la$s, ad+inistrative rules and established doctrines on issues of e?cessive e?penditure. It fails to consider the prevailin- doctrine first laid do$n in 3rriola v. *O3& on issues of overpricin-. The +a=orit/ fails to s>uarel/ e?plain $h/ 3rriola should not be applied to this case, $hen both cases clearl/ proscribe a findin- of overpricin- $hen due process has been violated. To reiterate, the canvass sheets $ere not presented to the petitioner in 3rriola. In the present case, aside fro+ the non6presentation of the canvass sheets, no actual field canvass $as +ade but, instead, a +ere telephone canvass $as conducted. The *O3 in 3rriola li,e$ise secured price >uotations fro+ three suppliers. In the present case, co+parisons of onl/ one or t$o suppliers $ere +ade. The *ourt in 3rriola struc, do$n the co+parison +ade b/ the *O3 bet$een the e>uip+ent purchased and an ite+ of the sa+e brand, but not the sa+e +odel. @ere, different pieces of e>uip+ent of different brands $ere co+pared. Finall/, in both cases, the specifications of the ite+s co+pared $ere not provided. 3s e+phasi;ed, this *ourt9s rulin- contradicts $hat the evidence has actuall/ proved. It bears e+phasis that the ponencia has reproduced the findin-s of the Technical Services Office 4TSO5. These TSO findin-s $ere the onl/ ones relied upon b/ the auditor in holdin- petitioner liable for an overpricin- of P8'',8'(. The sa+e docu+ent clearl/ sho$s that no co+parison $as actuall/ +ade. It notes the follo$in- e?press disclosures: Other ite+s $ere verifiedFevaluated but had no valid data for co+parison. L The onl/ available valid price infor+ation. LL !o$er price out of onl/ t$o valid price infor+ation for $ant of a third valid price infor+ation as re>uired. 4 +phasis supplied.5 Despite the TSO9s findin-s, this *ourt still unreasonabl/ upholds the auditor9s findin-s on the overpricin- and petitioner9s personal liabilit/. It +ust also be e>uall/ e+phasi;ed that, contrar/ to $hat the ponente posits, the opinion of *O39s infor+ation technolo-/ 4IT5 personnel could not be the basis of overturnin- the discretion of the *D3 in deter+inin- the specifications for the co+puter e>uip+ent. No$here in the *onstitution or an/ la$ is the IT depart+ent of *O3 allo$ed to override the preference for e>uip+ent brands or specifications of an a-enc/. To reiterate, $hat $as at issue $as not the necessit/ of these specifications or the e>uip+ent the+selves, but onl/ that it should not be overpriced. He are settin- a ver/ dan-erous precedent if $e are to insist that the *O39s preference M or even that of its IT personnel M is far superior to and prevails over that of the a-enc/ that it is auditin-. Thus, the +a=orit/ fails to satisfactoril/ address the follo$in- truths: '. The doctrine established in 3rriola $as alread/ controllin- at the ti+e the issues arose in this case, and /et it $as not applied to this case. 0. No actual field canvass $as +ade, and no canvass sheets $ere presented. 2. *o+parisons $ere +ade a+on- different specifications and brands of e>uip+ent, or that the e>uip+ent $as co+pared to those havin- no specifications at all. %. *o+parisons of pieces of the sa+e e>uip+ent co+in- fro+ at least three 425 suppliers $ere not +ade. &. There $as a contradiction in respondent9s state+ent that, on the one hand, the $innin- bid should have been the lo$est bidder, but that on the other hand, the a+ount of overprice $as based on the price of the -eneric clone e>uip+ent.

A. The -eneric e>uip+ent referred to for co+parison $as not even included or >ualified in the bid process. ). Respondent *O3 itself did not act on Rubico9s alle-ations of +anipulation, and, in fact, did not raise the+ durin- the proceedin-s at the ad+inistrative level. On that last point, the +a=orit/ contradicts itself $hen it sa/s that findin-s of fact of ad+inistrative authorities +ust be respected and /et insists that there $as +anipulation in the biddin-, $hen it $as never held to be so b/ the sa+e ad+inistrative authorities. It cannot be denied that the +a=orit/ considered the +atter as a substantial ele+ent or conte?t $hen it upheld the disallo$ance +ade b/ respondent, $hen the presence of +anipulation $as never an official findin-, e?pressl/ or i+pliedl/, b/ the *O3 *o++issioners. The conclusions reached b/ the +a=orit/ are +ere con=ectures and speculations that the records never bore out, or that petitioner never had the chance to controvert at the earliest possible ti+e. The dan-ers posed b/ the Decision in this case cannot be overe+phasi;ed. To sa/ the least, there is nothin- to prevent respondent *O3 fro+ co+parin- all -overn+ent purchases $ith -eneric e>uip+ent $ithout even conductin- a valid canvass of prices. Overpricin- is not necessaril/ based on e>uip+ent that >ualified for the biddin- processI it +a/ be based even on -eneric, unbranded e>uip+ent. There is no le-al i+pedi+ent for *O3 to recall the re-ulations on e?cessive purchases it had issued in the past and to issue ne$ ones follo$in- the *ourt9s interpretation of the +atter. For the *O3 to be allo$ed to do so $ould further discoura-e industries fro+ offerin- their e>uip+ent or services for -overn+ent use. Finall/, the biddin- process $ill be rendered inutile. @ence, follo$in- and appl/in- the +a=orit/9s theor/, the branded pieces of co+puter e>uip+ent that this *ourt itself uses in issuin- its decisions +a/ also be found to be e?cessivel/ overpriced b/ respondent $hen these are co+pared to -eneric non6branded co+puter e>uip+ent. There is no need to conduct an actual canvassI present the canvass sheetsI re>uire a co+parison of at least three 425 suppliersI co+pare the ite+s $ith the sa+e brands or specificationsI or even $ith those that did not >ualif/ for the biddin- or have no ,no$n specifications at all. Thereafter, the deter+ination of the overpriced a+ount $ould be based on the price of the cheapest -eneric brand havin- +ore or less si+ilar but not necessaril/ identical specifications. Finall/, all those $ho have approved the purchases $ould be held solidaril/ liable for the e?cess a+ount based on the prices of the cheapest e>uip+ent of different specifications and brands available in the +ar,et. >uall/ i+portant, the Decision also allo$s alle-ations to be belatedl/ raised despite the absence of an/ e?traordinar/ reason to do so and thus, contradicts the basic tenets of due process. The ponente has not even provided an/ le-al basis $h/ $e should consider and allo$ these belatedl/ raised alle-ations that clearl/ pre=udice the ri-hts of petitioner. !astl/, the +a=orit/ should cate-oricall/ state in the dispositive portion that petitioner cannot be solel/ liable for the disallo$ed price. The +a=orit/, $hile affir+in- the findin-s of the *O3, actuall/ a--ravated the latter9s baseless rulin- $hen it apparentl/ ordered petitioner sin-l/ to rei+burse the full a+ount of disallo$ance in its ori-inal Decision, $ithout +entionin- the liabilit/ of his co6respondents in the ori-inal *O3 case. The difference bet$een sole liabilit/ and solidar/ liabilit/ cannot be e+phasi;ed enou-h. Solidar/ obli-ations assu+e that the debt can be divided into as +an/ e>ual shares as there are debtors. In addition, $hile the creditor +a/ onl/ de+and pa/+ent fro+ one debtor, that debtor nevertheless has the ri-ht of rei+burse+ent fro+ the other debtors. In the present case, there are ei-ht 485 debtors. Therefore, I +aintain that the ri-ht of petitioner to due process $as violated $hen respondents and the +a=orit/ of this *ourt held hi+ liable for the disallo$ed purchase price of the co+puter e>uip+ent. @ence, I +aintain +/ Dissent fro+ the Decision dated 8 March 01'' and vote to -rant petitioner9s Motion for Reconsideration dated 8 3pril 01''. MAR#A LOURDES P. A. SERENO 3ssociate .ustice

!oot&ot,s
'

7.R. No. ()2&', % Februar/ '((0, 01& S*R3 8'A. Rollo, p. 020.

!etter dated 0& Nove+ber '((0 fro+ Dr. Hillia+ Torres, Mana-in- Director of the National *o+puter *enter, consentin- to the re>uest for the additional purchase of co+puters and co+puter peripherals, id. at 0((I Minutes of the board +eetin- of the *D3 dated 86'1 .anuar/ approvin- the reco++endation of P#3* $ith re-ard to the a$ardin- of the bid to Tetra, id. at 2116212I Minutes of the board +eetin- dated 0%60& 3u-ust '((0, approvin- the Invitation to Pre6>ualif/ to #id, Instruction to #idders and #id For+s, id. at 21%621&I Special Order No. ('618 issued b/ the Office of the President dele-atin- po$ers to petitioner as e?ecutive director of *D3, id. at 21AI and Special Order No. 11', Series of '((& on the 3uthorit/ Specifications for the officers of *D3, id. at 21).
%

Id. at 0&&60(8. 7.R. No. (12A%, 21 Septe+ber '((', 010 S*R3 '%).

&

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 182092 )u:4 27, 2011

T"UNDER SECUR#T7 AND #NVEST#GAT#ON AGENC7ILOURDES M. LASALA, Petitioner, vs. NAT#ONAL !OOD AUT"OR#T7 AREG#ON #B %&' N!A REG#ONAL B#DS AND A*ARDS COMM#TTEE AREG#ON #B,Respondents. D V#LLARAMA, )R., J.: #efore this *ourt is a petition' for revie$ on certiorari under Rule %& of the '(() Rules of *ivil Procedure, as a+ended, see,in- to reverse the Decision0 dated .ul/ '8, 011) of the *ourt of 3ppeals 4*35 in *367.R. SP No. (2A%0, $hich set aside the Orders2 dated 3u-ust 0), 0112 and Dece+ber ', 011& of the Re-ional Trial *ourt 4RT*5 of San Fernando *it/, !a "nion, #ranch AA in *ivil *ase No. A8%A. The facts are as follo$s: So+eti+e in Septe+ber 0110, petitioner Thunder Securit/ and Investi-ation 3-enc/, o$ned and operated b/ petitioner !ourdes M. !asala as sole proprietor, entered into a *ontract for Securit/ Services % $ith respondent National Food 3uthorit/ 4NF35, Re-ion I. The contract provided that Thunder Securit/ $ill provide '20 securit/ -uards to safe-uard the NF39s personnel, offices, facilities and properties in Re-ion I for a period of one /ear fro+ Septe+ber '&, 0110 to Septe+ber '&, 0112. Subse>uentl/, Republic 3ct 4R.3.5 No. ('8%& $as enacted on .anuar/ '1, 0112, and too, effect on .anuar/ 0A, 0112. Said la$ e?pressl/ repealed, a+on- others, ?ecutive Order 4 .O.5 No. %1, Series of 011'A $hich -overned the biddin- procedure of service contracts in the 7overn+ent. Since petitioner9s contract $ith the NF3 $as about to e?pire on Septe+ber '&, 0112, the NF3 caused the publication of an Invitation to 3ppl/ for li-ibilit/ and to #id on Ma/ '' and '8, 0112, intended for all private securit/ a-encies.) Petitioner paid the biddin- fee of P ',111.11 on Ma/ 0', 0112 to si-nif/ its intention to *ISION

participate in the biddin- process. @o$ever, on .une (, 0112, the NF3, throu-h 3ssistant Re-ional Director Victoriano Molina, chair+an of respondent NF36Re-ional #ids and 3$ards *o++ittee 4NF36R#3*5, notified petitioner to sub+it the re>uired docu+ents not later than .une '(, 0112 in order to >ualif/ for the biddin-. 8 On .une 0A, 0112, the NF36R#3* infor+ed petitioner that its application to bid had been re=ected due to its failure to sub+it the re>uired docu+ents.( 3--rieved, petitioner sent a letter of protest to the NF3 on .ul/ '1, 0112, contendin- that until the I+ple+entin- Rules and Re-ulations 4IRR5 of R.3. No. ('8% can be pro+ul-ated, no biddin- should ta,e place.'1 Not$ithstandin-, respondents re=ected petitioner9s application. Respondents defended their position, citin- an instruction co+in- fro+ then NF3 3d+inistrator 3rthur *. Jap $hich directed that in the absence of the said IRR and due to the e?i-enc/ of the service, respondents9 pro=ects $ould be te+poraril/ -uided b/ the provisions of .O. No. %1, a+on- others, provided the sa+e are consistent $ith R.3. No. ('8%.'' "nfa;ed, petitioner filed before the RT* a Petition'0 for Prohibition and Preli+inar/ In=unction, $ith a pra/er for the issuance of a Te+porar/ Restrainin- Order 4TRO5 plus Da+a-es, see,in-, a+on- others, to en=oin respondents fro+ a$ardin- the contract to another securit/ a-enc/. On 3u-ust 8, 0112, the RT* issued a TRO a-ainst respondents.'2 *orrelativel/, in its Order'% dated 3u-ust 0), 0112, the RT* -ranted the $rit of preli+inar/ in=unction in favor of petitioner and directed respondents to desist fro+ ter+inatin- petitioner9s services until further orders fro+ the RT*. The RT* held that the co+position and the orders of the NF36 R#3* $ere void because the IRR of R.3. No. ('8% has not /et been pro+ul-ated. The RT* also found that no observers fro+ the private sector $ere present in the biddin- process as re>uired b/ la$. The RT* ordered: H@ R FOR , pre+ises consideredB,C let BaC Hrit of Preli+inar/ In=unction Bbe issuedC a-ainst respondents National Food 3uthorit/ Re-ion I and the Re-ional #id and 3$ards *o++ittee 4R#3*5 en=oinin- and restrainin- said respondents and all persons actin- in their behalf fro+ a$ardin- the contract for securit/ services in NF3 Re-ion I and fro+ ter+inatin- the services of petitioner until further orders fro+ the *ourt, upon pa/+ent of an In=unction #ond in the a+ount of Php&1,111.11 in the na+e of the respondents to ans$er for an/ and all da+a-es $hich the respondents +a/ suffer in the event that the *ourt should finall/ decide that petitioner is not entitled to the issuance thereof. !et the Pre6trial *onference of this case be set on Septe+ber 00, 0112 at 0:11 o9cloc, in the afternoon. SO ORD R D.'& Respondents filed a Motion for Reconsideration'A on Septe+ber 02, 0112, contendin- that per Minutes of the Meetin-') for public biddin- held on .ul/ 'A, 0112, three independent observers $ere actuall/ present, na+el/, Floriano S. 7allano, .enn/ !ilan and 3ntonita S. @a-ad. On October 8, 0112, IRR Part 3'8 4IRR635 of R.3. No. ('8% also too, effect. Nonetheless, the RT* denied respondents9 +otion for reconsideration in its Order '( dated Dece+ber ', 011&. Thus, respondents sou-ht recourse fro+ the *3 b/ $a/ of certiorari under Rule A& of the'(() Rules of *ivil Procedure, as a+ended, char-in- the RT* of -rave abuse of discretion in the issuance of the said orders.01 On .ul/ '8, 011), the *3 -ranted the petition. It held that the RT* -ravel/ abused its discretion $hen it issued the $rit of preli+inar/ in=unction a-ainst respondents despite the utter lac, of basis and =ustification for its issuance. The *3 hi-hli-hted that $hile IRR63 of R.3. No. ('8% too, effect on October 8, 0112,0' and thus could not have been applied b/ the RT* in its 3u-ust 0), 0112 Order, its failure to consider the said IRR63 in resolvin- respondents9 +otion for reconsideration a+ounted to -rave abuse of discretion. The *3 added that contrar/ to the trial court9s rulin-, there $ere three observers present durin- the biddin- process, as sho$n b/ the Minutes of the Meetin- for public biddin- held on .ul/ 'A, 0112. The *3 further opined that petitioner did not appear to possess a clear le-al ri-ht to en=oin the a$ardin- of the contract considerin- that petitioner9s ri-ht to participate in the biddin- $as itself dubious as petitioner failed to sub+it the necessar/ docu+ents re>uired b/ respondents. @o$ever, the *3 clarified that its decision $as +erel/ focused on the issue of the i+propriet/ of the issuance of the $rit of preli+inar/ in=unction and not on the issues of the propriet/ of the a$ard of the contract and da+a-es. Thus, the *3 held that the latter issues should still be heard b/ the RT*. 00 The dispositive portion of the *3 decision reads: H@ R FOR , in vie$ of the fore-oin-, the instant P TITION is hereb/ 7R3NT D. The Orders issued b/ #ranch AA of the Re-ional Trial *ourt of San Fernando *it/, !a "nion dated 3u-ust 0), 0112 and Dece+ber ', 011& in *ivil *ase No. A8%A are hereb/ S T 3SID .

SO ORD R D.02 Petitioner filed a Motion for Reconsideration0% but the *3 denied the sa+e in its Resolution0& dated March &, 0118. @ence, this petition $hich raised the follo$in- issues: '. Hhether the *ourt of 3ppeals co++itted a reversible error $hen it held that the respondents did not err in appl/in- .O. %1 in the conduct of the biddin-BIC 0. Hhether the *ourt of 3ppeals co++itted a reversible error $hen it held that there $as no irre-ularit/ attendin- the >uestioned biddin-BI andC 2. Hhether the *ourt of 3ppeals co++itted a reversible error $hen it reversed the Orders of Bthe RT*C -rantin- in=unctive relief to herein petitionerB.C0A Petitioner e+phasi;es that R.3 No. ('8%, $hich e?pressl/ repealed .O. No. %1, $as alread/ in force at the ti+e the biddin- $as conducted in this case on .ul/ 'A, 0112I hence, it $as error for the NF3 and the NF36R#3* to conduct the public biddin- in accordance $ith .O. No. %1. Petitioner also abandons its initial stance re-ardinthe need for i+ple+entin- rules and re-ulations, and no$ ar-ues that even $ithout its IRR, R.3. No. ('8% can be understood and enforced. Petitioner adds that there is no provision of la$ or =urisprudence $hich re>uires that there +ust first be an IRR before a la$ ta,es effect, and adds that NF3 3d+inistrator 3rthur *. Jap and his subordinates cannot suspend the operation of R.3. No. ('8% and order that biddin- be conducted in accordance $ith .O. No. %1 $hich $as alread/ repealed. Petitioner also insists that there $as an irre-ularit/ in the biddin- process as the observers presented b/ respondents $ere alle-edl/ not independent and cannot be relied upon to observe the process dili-entl/. Petitioner further insists that the presence or absence of observers in the biddin- process is a >uestion of fact $hich the *3 cannot tac,le in a petition for certiorari under Rule A&. 3s such, the *3 should have re+anded the case to the RT* for the deter+ination of the >uestion of fact. 0) On the other hand, respondents throu-h the Office of the 7overn+ent *orporate *ounsel 4O7**5, counter that petitioner failed to present an/ evidence before the RT* and the *3 to substantiate its clai+ that the NF36 R#3* $as not constituted in accordance $ith R.3. No. ('8%. @avin- alle-ed a violation of la$, it $as incu+bent upon petitioner to prove b/ sufficient evidence that there $as indeed such violation. The O7** points out that unli,e petitioner, respondents $ere able to prove sufficientl/ that there $ere actuall/ three observers present durin- the biddin- process, $hich fact the RT* failed to consider. Moreover, the O7** ar-ues that respondents9 reliance on .O. No. %1, pendin- the pro+ul-ation of the IRR of R.3. No. ('8%, $as allo$ed b/ Section ))08 of IRR63. There $as li,e$ise no violation of an/ clear and un+ista,able ri-ht of petitioner as to $arrant the issuance of the $rit of preli+inar/ in=unction. The O7** points out that the re=ection of petitioner9s application $as actuall/ petitioner9s o$n fault because petitioner failed to sub+it the necessar/ docu+ents despite several notices. Finall/, the O7** stresses that the trial court =ud-e issued the $rit of preli+inar/ in=unction in violation of the la$ and $ith -rave abuse of discretion because it effectivel/ and indefinitel/ rene$ed and e?tended the contract bet$een the parties contrar/ to =urisprudence that no court can co+pel a part/ to a-ree to a contract throu-h the instru+entalit/ of a $rit of preli+inar/ in=unction. 0( ssentiall/, the sole issue for our resolution is $hether the *3 erred in settin- aside the RT* orders $hich -ranted in=unctive relief to petitioner. The petition is bereft of +erit. Section 2, Rule &8 of the '(() Rules of *ivil Procedure, as a+ended, provides the -rounds for the issuance of a preli+inar/ in=unction: S *. 2. 7rounds for issuance of preli+inar/ in=unction. P 3 preli+inar/ in=unction +a/ be -ranted $hen it is established:

4a5 That the applicant is entitled to the relief de+anded, and the $hole or part of such relief consists in restrainin- the co++ission or continuance of the act or acts co+plained of, or in re>uirin- the perfor+ance of an act or acts, either for a li+ited period or perpetuall/I 4b5 That the co++ission, continuance or nonperfor+ance of the act or acts co+plained of durin- the liti-ation $ould probabl/ $or, in=ustice to the applicantI or 4c5 That a part/, court, a-enc/ or a person is doin-, threatenin-, or is atte+ptin- to do, or is procurinor sufferin- to be done, so+e act or acts probabl/ in violation of the ri-hts of the applicant respectinthe sub=ect of the action or proceedin-, and tendin- to render the =ud-+ent ineffectual. #ased on the fore-oin- provision, $e held in Philippine Ports 3uthorit/ v. *ipres Stevedorin- Q 3rrastre, Inc.,21 to $it: 3 preli+inar/ in=unction is an order -ranted at an/ sta-e of an action prior to =ud-+ent of final order, re>uirina part/, court, a-enc/, or person to refrain fro+ a particular act or acts. It is a preservative re+ed/ to ensure the protection of a part/9s substantive ri-hts or interests pendin- the final =ud-+ent in the principal action. 3 plea for an in=unctive $rit lies upon the e?istence of a clai+ed e+er-enc/ or e?traordinar/ situation $hich should be avoided for other$ise, the outco+e of a liti-ation $ould be useless as far as the part/ appl/in- for the $rit is concerned. 3t ti+es referred to as the UStron- 3r+ of >uit/,U $e have consistentl/ ruled that there is no po$er the e?ercise of $hich is +ore delicate and $hich calls for -reater circu+spection than the issuance of an in=unction. It should onl/ be e?tended in cases of -reat in=ur/ $here courts of la$ cannot afford an ade>uate or co++ensurate re+ed/ in da+a-esI Uin cases of e?tre+e ur-enc/I $here the ri-ht is ver/ clearI $here considerations of relative inconvenience bear stron-l/ in co+plainant9s favorI $here there is a $illful and unla$ful invasion of plaintiff9s ri-ht a-ainst his protest and re+onstrance, the in=ur/ bein- a continuin- one, and $here the effect of the +andator/ in=unction is rather to reestablish and +aintain a pree?istin- continuinrelation bet$een the parties, recentl/ and arbitraril/ interrupted b/ the defendant, than to establish a ne$ relation.U For the $rit to issue, t$o re>uisites +ust be present, na+el/, the e?istence of the ri-ht to be protected, and that the facts a-ainst $hich the in=unction is to be directed are violative of said ri-ht. 1avvphi1 It is necessar/ that one +ust sho$ an un>uestionable ri-ht over the pre+ises.2' Thus, the follo$in- re>uisites +ust be proved before a $rit of preli+inar/ in=unction, be it +andator/ or prohibitor/, $ill issue: 4'5 The applicant +ust have a clear and un+ista,able ri-ht to be protected, that is a ri-ht in esseI 405 There is a +aterial and substantial invasion of such ri-htI 425 There is an ur-ent need for the $rit to prevent irreparable in=ur/ to the applicantI and 4%5 No other ordinar/, speed/, and ade>uate re+ed/ e?ists to prevent the infliction of irreparable in=ur/.20 In this case, it is apparent that $hen the RT* issued its Dece+ber ', 011& Order, petitioner has no +ore le-al ri-hts under the service contract $hich alread/ e?pired on Septe+ber '&, 0112. Therefore, it has not +et the first vital re>uisite that it +ust have +aterial and substantial ri-hts that have to be protected b/ the courts. 22 It bears stressin- that an in=unction is not a re+ed/ to protect or enforce contin-ent, abstract, or future ri-htsI it $ill not issue to protect a ri-ht not in esse and $hich +a/ never arise, or to restrain an act $hich does not -ive rise to a cause of action. There +ust e?ist an actual ri-ht.2% Veril/, petitioner cannot la/ clai+ to an actual, clear and positive ri-ht based on an e?pired service contract. Moreover, $ell6entrenched in this =urisdiction that no court can co+pel a part/ to a-ree to a contract throu-h the instru+entalit/ of a $rit of preli+inar/ in=unction.2& 3 contract can be rene$ed, revived or e?tended onl/ b/

+utual consent of the parties.2A #/ issuin- the assailed orders +ost particularl/ its Dece+ber ', 011& Order, the RT* in effect e?tended the life of the parties9 e?pired contract in clear contravention of our earlier pronounce+ents. In su+, $e find that the *3 co++itted no reversible error in renderin- the assailed decision $hich $ould $arrant the +odification, +uch less, the reversal thereof. H@ R FOR , the instant petition for revie$ on certiorari is D NI D. The Decision dated .ul/ '8, 011) of the *ourt of 3ppeals in *367.R. SP No. (2A%0 is 3FFIRM D. Hith costs a-ainst the petitioner. SO ORD R D. MART#N S. V#LLARAMA, )R. 3ssociate .ustice H *ON*"R: RENATO C. CORONA *hief .ustice *hairperson TERES#TA ). LEONARDO+DE CASTRO 3ssociate .ustice LUCAS P. BERSAM#N 3ssociate .ustice

MAR#ANO C. DEL CAST#LLO 3ssociate .ustice CERT#!#CAT#ON Pursuant to Section '2, 3rticle VIII of the '(8) *onstitution, I certif/ that the conclusions in the above Decision had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt9s Division. RENATO C. CORONA *hief .ustice

!oot&ot,s
'

Rollo, pp. 86'&.

Id. at '862). Penned b/ 3ssociate .ustice Mariflor P. Pun;alan *astillo $ith 3ssociate .ustices Marina !. #u;on and Ros+ari D. *arandan- concurrin-.
2

Records, pp. '''6''A, 20)6221. Id. at ''6'A.

&

ntitled, U3n 3ct Providin- for the Moderni;ation, Standardi;ation and Re-ulation of the Procure+ent 3ctivities of the 7overn+ent and for Other Purposes.U

ntitled, U*onsolidatin- Procure+ent Rules and Procedures for all National 7overn+ent 3-encies, 7overn+ent6O$ned or 6*ontrolled *orporations and 7overn+ent Financial Institutions, and Re>uirinthe "se of the 7overn+ent lectronic Procure+ent S/ste+,U issued on October 8, 011'.
)

Records, p. ').

Id. at '(. Per notice, petitioner failed to sub+it clearances co+in- fro+ the National !abor Relations *o++ission 4N!R*5, Social Securit/ S/ste+ 4SSS5, Philippine National Police6Securit/ 3-enc/ 7uard Supervision Division 4PNP6S37SD5 or Philippine National Police6Firear+s and ?plosive Division 4PNP6F D5 and a #usiness Per+it for the NF39s !a "nion branch.
(

Id. at 01. Id. at 00. Id. at 0260&. Id. at 2162(. Id. at 8(. Id. at '''6''A. Id. at ''&. Id. at '%)6'&2. Id. at '&%6'&A.

'1

''

'0

'2

'%

'&

'A

')

'8

ntitled, UI+ple+entin- Rules and Re-ulations of Republic 3ct No. ('8% other$ise ,no$n as The 7overn+ent Procure+ent Refor+ 3ct.U
'(

Supra note 2. *3 rollo, pp. 060'.

01

0'

The *3 decision erroneousl/ stated that IRR63 of R.3. No. ('8% too, effect on October ), 0112I supra note 0 at 22.
00

Supra note 0. Id. at 2A. *3 rollo, pp. 0&860&(. Rollo, pp. 2(6%1. Id. at A&. Id. at AA6)0. Section )). Transitor/ *lause

02

0%

0&

0A

0)

08

In all procure+ent activities, if the advertise+ent or invitation for bids $as issued prior to the effectivit/ of the 3ct, the provisions of .O. %1 and its IRR, P.D. '&(% and its IRR, R.3. )'A1 and its IRR, or other applicable la$s, as the case +a/ be, shall -overn. In cases $here the advertise+ents or invitations for bids $ere issued after the effectivit/ of the 3ct but before the effectivit/ of this IRR63, procurin- entities +a/ continue adoptin- the procure+ent procedures, rules and re-ulations provided in .O. %1 and its IRR, P.D. '&(% and its IRR, R.3. )'A1 and its IRR, or other applicable la$s, as the case +a/ be.
0(

Rollo, pp. 8&6(1. 7.R. No. '%&)%0, .ul/ '%, 011&, %A2 S*R3 2&8. Id. at 2)262)%. *itations o+itted and e+phasis supplied.

21

2'

20

St. .a+es *olle-e of ParaVa>ue v. >uitable P*I #an,, 7.R. No. ')(%%', 3u-ust (, 01'1, A0) S*R3 208, 2%%, citin- #iVan Steel *orporation v. *ourt of 3ppeals, 7.R. Nos. '%01'2 Q '%8%21, October '&, 0110, 2(' S*R3 (1I and @utchison Ports Philippines !td. v. Subic #a/ Metropolitan 3uthorit/, 7.R. No. '2'2A), 3u-ust 2', 0111, 22( S*R3 %2%. +phasis supplied.
22

Manila International 3irport 3uthorit/ v. Olon-apo Maintenance Services, Inc., 7.R. Nos. '%A'8%6 8&, 'A''') and 'A)80), .anuar/ 2', 0118, &%2 S*R3 0A(, 088608(.
2%

7o v. Villanueva, .r., 7.R. No. '&%A02, March '2, 011(, &8' S*R3 '0A, '226'2%, citin- Republic v. Villara+a, .r., 7.R. No. ''))22, Septe+ber &, '((), 0)8 S*R3 )2A, )%(.
2&

See Manila International 3irport 3uthorit/ v. Olon-apo Maintenance Services, Inc., supra note 22 at 08(I !i-ht Rail Transit 3uthorit/ v. *ourt of 3ppeals, 7.R. Nos. '2(0)&6)A and '%1(%(, Nove+ber 0&, 011%, %%% S*R3 '0&, '2(I and National Food 3uthorit/ v. *ourt of 3ppeals, 7.R. Nos. ''&'0'6 0&, Februar/ (, '((A, 0&2 S*R3 %)1, %)(.
2A

!i-ht Rail Transit 3uthorit/ v. *ourt of 3ppeals, id.

Republic of the Philippines SUPREME COURT Manila T@IRD DIVISION G.R. No. 181279 )u&, 23, 2010

P"#L#PP#NE ECONOM#C (ONE AUT"OR#T7, /,0/,s,&t,' 1,/,2& 34 D#RECTOR GENERAL L#L#A B. DE L#MA,Petitioner, vs. )OSEP" )UDE CARANTES, ROSE CARANTES, %&' %:: t1, ot1,/ "E#RS O! MA8#M#NO CARANTES,Respondents. D V#LLARAMA, )R., J.: This petition for revie$ on certiorari under Rule %& of the '(() Rules of *ivil Procedure, as a+ended, see,s to reverse and set aside the Decision' dated October 0A, 011) of the *ourt of 3ppeals 4*35 in *367.R. *V No. *ISION

)2021. The *ourt of 3ppeals had affir+ed the Order0 dated October 0, 011' of the Re-ional Trial *ourt 4RT*5, #ranch &, #a-uio *it/ in *ivil *ase No. %22(6R, -rantin- the respondents9 Petition2 for in=unction. The facts are -athered fro+ the records of the case. Respondents .oseph .ude *arantes, Rose *arantes and the heirs of Ma?i+ino *arantes are in possession of a 21,2A86s>uare +eter parcel of land located in !oa,an Road, #a-uio *it/. On .une 01, '((), the/ obtained *ertificate of 3ncestral !and *lai+ 4*3!*5 No. *3R6*3!*6100% over the land fro+ the Depart+ent of nviron+ent and Natural Resources 4D NR5. On the stren-th of said *3!*, respondents secured a buildinper+it& and a fencin- per+itA fro+ the #uildin- Official of #a-uio *it/, Teodoro 7. #arro;o. #efore lon-, the/ fenced the pre+ises and be-an constructin- a residential buildin- thereon. Soon, respondents received a letter) dated Februar/ (, '((( fro+ Di-na D. Torres, the <one 3d+inistrator of the Philippine cono+ic <one 3uthorit/ 4P <35, infor+in- the+ that the house the/ built had overlapped P <39s territorial boundar/. Torres advised respondents to de+olish the sa+e $ithin si?t/ 4A15 da/s fro+ notice. Other$ise, P <3 $ould underta,e its de+olition at respondents9 e?pense. Hithout ans$erin- P <39s letter, respondents filed a petition for in=unction, $ith pra/er for the issuance of a te+porar/ restrainin- order 4TRO5 and $rit of preli+inar/ in=unction before the RT* of #a-uio *it/. #/ Order8dated 3pril 8, '(((, the RT* of #a-uio *it/ issued a TRO, $hich en=oined P <3 to cease and desist fro+ threatenin- respondents $ith the de+olition of their house before respondents9 pra/er for a $rit of preli+inar/ in=unction can be heard. On Septe+ber '(, 011', the RT* li,e$ise issued an Order, ( $hich directed the parties to +aintain the status >uo pendin- resolution of the case. On October 0, 011', the RT* -ranted respondents9 petition and ordered the issuance of a $rit of in=unction a-ainst P <3, thus: H@ R FOR , the petition is herein 7R3NT D and a $rit of in=unction is hereb/ issued en=oinin- the respondents, their a-ents, representatives or an/bod/ actin- in their behalf fro+ dispossessin-, notif/in- or disturbin- in an/ B+annerC the peaceful possession and occupation of the land b/ the petitioners. SO ORD R D.'1 The trial court ruled that respondents are entitled to possess, occup/ and cultivate the sub=ect lots on the basis of their *3!*. The court a >uo e?plained that b/ the ver/ definition of an ancestral land under Republic 3ct 4R.3.5 No. 82)''' or the Indi-enous Peoples Ri-hts 3ct of '((), said lots have been se-re-ated fro+ lands of the public do+ain. 3s such, the ri-hts of respondents to the land are alread/ vested in the+ and cannot be disturbed b/ Procla+ation No. '80&,'0 $hich included said land $ithin the e?port processin- ;one of #a-uio *it/. On appeal, the *3 affir+ed the RT* rulin-. In the assailed Decision dated October 0A, 011), the appellate court echoed the trial court9s declaration that the sub=ect lots have been set aside fro+ the lands of the public do+ain. On Februar/ ', 0118, the Office of the Solicitor 7eneral 4OS75, as counsel for petitioner P <3, filed a Motion to 3d+it'2 petition, $ith the present Petition'% attached. Petitioner challen-es the *3 decision on t$o 405 issues: I. H@ T@ R OR NOT IT IS T@ P TITION R OR T@ *ITJ N7IN R OF #37"IO *ITJ H@O @3S T@ ! 73! 3"T@ORITJ TO ISS" #"I!DIN7 3ND F N*IN7 P RMITS FOR *ONSTR"*TIONS HIT@IN T@ P <36#* <. II. H@ T@ R OR NOT R SPOND NTS9 *3!* IS S"FFI*I NT TO DISR 73RD T@ PROVISIONS OF T@ N3TION3! #"I!DIN7 *OD OF T@ P@I!IPPIN S.'&

3+plified, the issue for our deter+ination is $hether petitioner can re>uire respondents to de+olish the structures the/ had built $ithin the territor/ of P <36#* < 4#a-uio *it/ cono+ic <one5. The OS7, at the outset, e?plains the dela/ in appealin- the *3 decision. It attributes the dela/ to the inadvertence of Senior State Solicitor Rodolfo 7eroni+o M. Pineda, the te+poraril/6desi-nated officer6in6 char-e 4OI*5 of Division SV, $ho too, over the case $hen State Solicitor Maricar S.3. Prudon6Sison $ent on +aternit/ leave. Pineda alle-edl/ +erel/ noted receipt of the *3 decision $ithout noticin- that it $as adverse to P <3. The OS7 adds that the sparse co+ple+ent of three 425 la$/ers left at the ti+e could not tac,le at once the horde of cases assi-ned to the division. On substantive -rounds, petitioner clai+s e?clusive authorit/ to issue buildin- and fencin- per+its $ithin eco;ones under Section A'A of Presidential Decree 4P.D.5 No. ')'A,') a+endin- P.D. No. AA.'8 3lon-side, petitioner asserts concurrent authorit/ to re>uire o$ners of structures $ithout said per+its to re+ove or de+olish such structures under Section '% 4i5'( of R.3. No. )('A.01 For their part, respondents rel/ on *3R6*3!*6100 for their ri-ht to fence the lots and build a house thereon. The/ insist that the function of issuin- buildin- and fencin- per+its, even $ithin the #a-uio *it/ cono+ic <one, pertains to the Office of the *it/ Ma/or and the #uildin- Official of #a-uio *it/, respectivel/. Respondents li,e$ise assail the petition for bein- filed late, stressin- that it $as filed onl/ after al+ost three 425 +onths fro+ petitioner9s receipt of the *3 decision. He -rant the petition. It is settled that an appeal +ust be perfected $ithin the re-le+entar/ period provided b/ la$I other$ise, the decision beco+es final and e?ecutor/. 0' #efore the Supre+e *ourt, a petition for revie$ on certiorari under Rule %& of the '(() Rules of *ivil Procedure, as a+ended, +ust be filed $ithin fifteen 4'&5 da/s fro+ notice of the =ud-+ent or final order or resolution appealed fro+, or of the denial of the petitioner9s +otion for ne$ trial or reconsideration filed in due ti+e after notice of the =ud-+ent. ven then, revie$ is not a +atter of ri-ht, but of sound =udicial discretion, and +a/ be -ranted onl/ $hen there are special and i+portant reasons therefor. In the case at bar, the Doc,et Division of the OS7 received a cop/ of the *3 decision on Nove+ber ), 011). It $as not until Februar/ ', 0118 or al+ost three 425 +onths ho$ever, that the OS7, for petitioner, filed a petition for revie$ on certiorari $ith this *ourt. The OS7 pleads for understandin- considerin- the scarcit/ of its la$/ers and the inadvertence of the te+poraril/6desi-nated OI* of Division SV in overloo,in- that the *3 decision $as adverse to P <3. Hhile the *ourt reali;es the OS79s difficult/ in havin- onl/ three 425 la$/ers $or,in- full ti+e on its cases, the OS7 could have easil/ as,ed for an e?tension of ti+e $ithin $hich to file the petition. More i+portantl/, as the -overn+ent a-enc/ tas,ed to represent the -overn+ent in liti-ations, the OS7 should perfor+ its dut/ $ith pro+ptness and ut+ost dili-ence. @o$ever, upon careful consideration of the +erits of this case, the *ourt is inclined to overloo, this procedural lapse in the interest of substantial =ustice. 3lthou-h a part/ is bound b/ the acts of its counsel, includin- the latter9s +ista,es and ne-li-ence, a departure fro+ this rule is $arranted $here such +ista,e or ne-lect $ould result in serious in=ustice to the client. Indeed, procedural rules +a/ be rela?ed for persuasive reasons to relieve a liti-ant of an in=ustice not co++ensurate $ith his failure to co+pl/ $ith the prescribed procedure. 00 More so, $hen to allo$ the assailed decision to -o unchec,ed $ould set a precedent that $ill sanction a violation of substantive la$. Such is the situation in this case. In=unction is a =udicial $rit, process or proceedin- $hereb/ a part/ is directed either to do a particular act, in $hich case it is called a +andator/ in=unction or to refrain fro+ doin- a particular act, in $hich case it is called a prohibitor/ in=unction. 3s a +ain action, in=unction see,s to per+anentl/ en=oin the defendant throu-h a final in=unction issued b/ the court and contained in the =ud-+ent. Section (, Rule &8 of the '(() Rules of *ivil Procedure, as a+ended, provides, S *. (. Hhen final in=unction -ranted. M If after the trial of the action it appears that the applicant is entitled to have the act or acts co+plained of per+anentl/ en=oined, the court shall -rant a final in=unction perpetuall/

restrainin- the part/ or person en=oined fro+ the co++ission or continuance of the act or acts or confir+in- the preli+inar/ +andator/ in=unction. T$o 405 re>uisites +ust concur for in=unction to issue: 4'5 there +ust be a ri-ht to be protected and 405 the acts a-ainst $hich the in=unction is to be directed are violative of said ri-ht. 02 Particularl/, in actions involvinrealt/, preli+inar/ in=unction $ill lie onl/ after the plaintiff has full/ established his title or ri-ht thereto b/ a proper action for the purpose. To authori;e a te+porar/ in=unction, the co+plainant +ust +a,e out at least a pri+a facie sho$in- of a ri-ht to the final relief. Preli+inar/ in=unction $ill not issue to protect a ri-ht not in esse.0% These principles are e>uall/ relevant to actions see,in- per+anent in=unction. 3t the onset, $e +ust stress that petitioner does not pose an adverse clai+ over the sub=ect land. Neither does petitioner dispute that respondents hold buildin- and fencin- per+its over the lots. For petitioner, the >uestion that +ust be ans$ered is $hether respondents +a/ build structures $ithin the #a-uio *it/ cono+ic <one on the basis of their *3R6*3!*6100, and the buildin- and fencin- per+its issued b/ the *it/ #uildin- Official. He rule in the ne-ative. In the parallel case of Philippine cono+ic <one 3uthorit/ 4P <35 v. #orreta, 0& #enedicto *arantes invo,ed *3R6*3!*6100, the sa+e *3!* invo,ed b/ respondents in this case, to put up structures in the land sub=ect of said case. The *ourt, spea,in- throu-h .ustice 3n-elina Sandoval67utierre;, refused to recall the $rit of de+olition issued b/ the trial court therein. He held that *arantes is a +ere applicant for the issuance of a certificate of o$nership of an ancestral land $ho has /et to ac>uire a vested ri-ht as o$ner thereof so as to e?clude the land fro+ the areas under P <3. He perceive no -ood reason to depart fro+ this rulin- as $e find respondents herein to be si+ilarl/ situated. 3s holders of a *3!*, respondents possess no -reater ri-hts than those enu+erated in Par. ', Section 0, 3rticle VII of D NR Depart+ent 3d+inistrative Order 4D3O5 No. 10, Series of '((2: S *TION 0. Ri-hts and Responsibilities of 3ncestral !and *lai+ants M '. Ri-hts '. The ri-ht to peacefull/ occup/ and cultivate the land, and utili;e the natural resources therein, sub=ect to e?istin- la$s, rules and re-ulations applicable theretoI 0. The ri-ht of the heirs to succeed to the clai+s sub=ect to e?istin- rules and re-ulationsI 2. The ri-ht to e?clude fro+ the clai+ an/ other person $ho does not belon- to the fa+il/ or clanI and %. The ri-ht to utili;e trees and other forest products inside the ancestral land sub=ect to these rules as $ell as custo+ar/ la$s. 4 +phasis supplied.5 Respondents bein- holders of a +ere *3!*, their ri-ht to possess the sub=ect land is li+ited to occupation in relation to cultivation. "nli,e No. ',0A Par. ', Section ', 3rticle VII of the sa+e D NR D3O, $hich e?pressl/ allo$sancestral do+ain clai+ants to reside peacefull/ $ithin the do+ain, nothin- in Section 0 -rants ancestral land clai+ants a si+ilar ri-ht, +uch less the ri-ht to build per+anent structures on ancestral lands M an act of o$nership that pertains to one 4'5 $ho has a reco-ni;ed ri-ht b/ virtue of a *ertificate of 3ncestral !and Title. On this score alone, respondents9 action for in=unction +ust fail. Jet, even if respondents had established o$nership of the land, the/ cannot si+pl/ put up fences or build structures thereon $ithout co+pl/in- $ith applicable la$s, rules and re-ulations. In particular, Section 21' of P.D. No. '1(A, other$ise ,no$n as the National #uildin- *ode of the Philippines +andates: S *TION 21'. Building *ermits No person, fir+ or corporation, includin- an/ a-enc/ or instru+entalit/ of the -overn+ent shall erect, construct, alter, repair, +ove, convert or de+olish an/ buildin- or structure or cause the sa+e to be done $ithout first

obtainin- a buildin- per+it therefor fro+ the #uildin- Official assi-ned in the place $here the sub=ect buildinis located or the buildin- $or, is to be done. Supple+entar/ to a buildin- per+it, a fencin- per+it +ust also be secured fro+ the #uildin- Official concerned before fences +a/ be installed in the pre+ises. In the present case, petitioner refuses to honor the buildin- and fencin- per+its issued b/ the *it/ #uildinOfficial to respondents. Petitioner P <3 +aintains that the function of ad+inisterin- and enforcin- the provisions of P.D. No. '1(A $ithin the areas o$ned and ad+inistered b/ it, pertains to P <3. @ence, it is P <3, and not the local #uildin- Official of #a-uio *it/, $hich +a/ properl/ issue buildin- and fencinper+its $ithin P <3. On this point, Section 01& of P.D. No. '1(A is pertinent: S *TION 01&. Building #fficials ?cept as other$ise provided herein, the #uildin- Official shall be responsible for carr/in- out the provisions of this *ode in the field as $ell as the enforce+ent of orders and decisions +ade pursuant thereto. Due to the e?i-encies of the service, the Secretar/ +a/ desi-nate incu+bent Public Hor,s District n-ineers, *it/ n-ineers and Municipal n-ineers to act as #uildin- Officials in their respective areas of =urisdiction. The desi-nation +ade b/ the Secretar/ under this Section shall continue until re-ular positions of #uildinOfficial are provided or unless sooner ter+inated for causes provided b/ la$ or decree. 1avvphi1 The position of #uildin- Official is a re-ular ite+ in the or-ani;ational structure of the local -overn+ent. Onl/ in case of ur-ent necessit/ +a/ the Secretar/ of Public Hor,s desi-nate the incu+bent District n-ineer, Municipal n-ineer or *it/ n-ineer, as the case +a/ be. This $as the applicable la$ even for areas covered b/ the ?port Processin- <one 3uthorit/ 4 P<35 until P.D. No. ')'A $as enacted on 3u-ust 0', '(81. P.D. No. ')'A further a+ended P.D. No. AA,0) the la$ creatin- the P<3, b/ creatin- the P <3. Section '' of R.3. No. )('A provides that the e?istin- P<3 created under P.D. No. AA shall evolve into and be referred to as the P <3 in accordance $ith the -uidelines and re-ulations set forth in an e?ecutive order issued for the purpose. Thus, on October 21, '((&, ?ecutive Order No. 08008 $as enacted. "nder Section ' thereof, all the po$ers, functions and responsibilities of P<3 under P.D. No. AA, as a+ended, insofar as the/ are not inconsistent $ith the po$ers, functions and responsibilities of the P <3, under R.3. No. )('A, shall be assu+ed and e?ercised b/ P <3. 3+on- such po$ers is the ad+inistration and enforce+ent of the National #uildin- *ode of the Philippines in all ;ones and areas o$ned or ad+inistered b/ P<3, as e?pressl/ provided in Section A of P.D. No. ')'A: S *. A. The ad+inistration and enforce+ent of the provisions of Presidential Decree No. '1(A, other$ise ,no$n as the National #uildin- *ode of the Philippines in all ;ones and areas o$ned or ad+inistered b/ the 3uthorit/ shall be vested in the 3d+inistrator or his dul/ authori;ed representative. @e shall appoint such P<3 >ualified personnel as +a/ be necessar/ to act as #uildin- Officials $ho shall be char-ed $ith the dut/ of issuin- #uildin- Per+its in the different ;ones. 3ll fees and dues collected b/ the #uildin- Officials under the National #uildin- *ode shall accrue to the 3uthorit/. 4 +phasis supplied.5 This function, $hich has not been repealed and does not appear to be inconsistent $ith an/ of the po$ers and functions of P <3 under R.3. No. )('A, subsists. *o+pli+entar/ thereto, Section '% 4i5 of R.3. No. )('A states: S *. '%. Po$ers and Functions of the Director 7eneral. 6 The director -eneral shall be the overall BcoordinatorC of the policies, plans and pro-ra+s of the *O<ON S. 3s such, he shall provide overall supervision over and -eneral direction to the develop+ent and operations of these *O<ON S. @e shall deter+ine the structure and

the staffin- pattern and personnel co+ple+ent of the P <3 and establish re-ional offices, $hen necessar/, sub=ect to the approval of the P <3 #oard. In addition, he shall have the follo$in- specific po$ers and responsibilities: ???? 4i5 To re>uire o$ners of houses, buildin-s or other structures constructed $ithout the necessar/ per+it $hether constructed on public or private lands, to re+ove or de+olish such houses, buildin-s, structures $ithin si?t/ 4A15 da/s after notice and upon failure of such o$ner to re+ove or de+olish such house, buildin- or structure $ithin said period, the director -eneral or his authori;ed representative +a/ su++aril/ cause its re+oval or de+olition at the e?pense of the o$ner, an/ e?istin- la$, decree, e?ecutive order and other issuances or part thereof to the contrar/ not$ithstandin-I 4 +phasis supplied.5 #/ specific provision of la$, it is P <3, throu-h its buildin- officials, $hich has authorit/ to issue buildinper+its for the construction of structures $ithin the areas o$ned or ad+inistered b/ it, $hether on public or private lands. *orollar/ to this, P <3, throu-h its director -eneral +a/ re>uire o$ners of structures built $ithout said per+it to re+ove such structures $ithin si?t/ 4A15 da/s. Other$ise, P <3 +a/ su++aril/ re+ove the+ at the e?pense of the o$ner of the houses, buildin-s or structures. 3s re-ards the issuance of fencin- per+its on ancestral lands, particularl/ $ithin #a-uio *it/ and the rest of the *ordilleras, D NR6*ircular No. 126(1 4Rules on the 3cceptance, Identification, valuation, and Delineation of 3ncestral !and *lai+s b/ the Special Tas, Force *reated b/ the Virtue of D NR Special Order Nos. 2' and 2'63 both Series of '((15 prescribes in Section '0: SEC. 12. The Re-ional !and Mana-e+ent Services or the * NROs, throu-h their respective Provincial nviron+ent and Natural Resources Officer 4P NRO5, shall prepare and sub+it to the Special Tas, Force a report on each and ever/ application surve/ed and delineated. Thereafter, the Special Tas, Force after evaluatin- the reports, shall endorse valid ancestral land clai+s to the Secretar/ throu-h the Indi-enous *o++unit/ 3ffairs Division, Special *oncerns Office for the issuance of a *ertificate of 3ncestral !and *lai+. 3s soon as ancestral land clai+ is found to be valid and in +eritorious cases, the Special Tas, Force +a/ reco++end to the *it/FMunicipal Ma/or9s Office the issuance of a fencin- per+it to the applicant over areas actuall/ occupied at the ti+e of filin-. 4 +phasis supplied.5 This is the -eneral rule. *onsiderin-, ho$ever, that in this case, a fencin- per+it is issued co+ple+entar/ to a buildin- per+it and that $ithin the pre+ises of P <3, it is the 3uthorit/ that +a/ properl/ issue a buildinper+it, it is onl/ fittin- that fencin- per+its be issued b/ the 3uthorit/. Fro+ the fore-oin- dis>uisition, it clearl/ appears that respondents li,e$ise failed to satisf/ the second re>uisite in order that an in=unction +a/ issue: that the acts a-ainst $hich the in=unction is to be directed, are violative of said ri-ht. P <3 acted $ell $ithin its functions $hen it de+anded the de+olition of the structures $hich respondents had put up $ithout first securin- buildin- and fencin- per+its fro+ the 3uthorit/. H@ R FOR , the Petition is 7R3NT D. The Decision dated October 0A, 011) of the *ourt of 3ppeals in *367.R. *V No. )2021 affir+in- the Order dated October 0, 011' of the court a 4uo in *ivil *ase No. %22(6R isREVERSED %&' S T 3SID . Respondents are hereb/ DIR *T D to de+olish the residential buildin- the/ had built $ithin the pre+ises of P <3 $ithin si?t/ 4A15 da/s fro+ notice. No costs. SO ORD R D. MART#N S. V#LLARAMA, )R. 3ssociate .ustice H *ON*"R:

CONC"#TA CARP#O MORALES 3ssociate .ustice *hairperson ARTURO D. BR#ON 3ssociate .ustice ROBERTO A. ABADL 3ssociate .ustice 3TT ST3TION LUCAS P. BERSAM#N 3ssociate .ustice

I attest that the conclusions in the above Decision had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt9s Division. CONC"#TA CARP#O MORALES 3ssociate .ustice *hairperson, Third Division * RTIFI*3TION

Pursuant to Section '2, 3rticle VIII of the '(8) *onstitution and the Division *hairperson9s 3ttestation, I certif/ that the conclusions in the above Decision had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt9s Division. RENATO C. CORONA *hief .ustice

!oot&ot,s
L

3dditional +e+ber per Special Order No. 8%2.

'

Rollo, pp. 2%6%0. Penned b/ 3ssociate .ustice .ose *. Re/es, .r., $ith 3ssociate .ustices .ose *. Mendo;a 4no$ a +e+ber of this *ourt5 and M/rna Di+aranan Vidal concurrin-.
0

*3 rollo, pp. &%6A'. Penned b/ .ud-e 3ntonio M. steves. Records, pp. '6%. Rollo, pp. 'A86')0. Records, p. '1. Id. at (. Id. at ''. Id. at '(601. Id. at 02). *3 rollo, p. A'.

&

'1

''

3n 3ct to Reco-ni;e, Protect and Pro+ote the Ri-hts of Indi-enous *ultural *o++unitiesFIndi-enous Peoples, *reatin- a National *o++ission on Indi-enous People, stablishinI+ple+entin- Mechanis+s, 3ppropriatin- Funds Therefor, and for Other Purposes.
'0

Reservin- for ?port Processin- <one Purposes a *ertain Parcel of !and of the Public Do+ain Situated in the *it/ of #a-uio, Island of !u;on.
'2

Rollo, pp. 268. Id. at (60(. Id. at 'A.

'%

'&

'A

S *. A. The ad+inistration and enforce+ent of the provisions of Presidential Decree No. '1(A, other$ise ,no$n as the National #uildin- *ode of the Philippines in all ;ones and areas o$ned or ad+inistered b/ the 3uthorit/ shall be vested in the 3d+inistrator or his dul/ authori;ed representative. @e shall appoint such P<3 >ualified personnel as +a/ be necessar/ to act as #uildinOfficials $ho shall be char-ed $ith the dut/ of issuin- #uildin- Per+its in the different ;ones. 3ll fees and dues collected b/ the #uildin- Officials under the National #uildin- *ode shall accrue to the 3uthorit/.
')

Further 3+endin- Presidential Decree No. AA Dated Nove+ber 01, '()0, *reatin- the ?port Processin- <one 3uthorit/.
'8

*reatin- the ?port Processin- <one 3uthorit/ and Revisin- Republic 3ct No. &%(1.

'(

S *. '%. Po$ers and Functions of the Director 7eneral. M The director -eneral shall be the overall coordinator of the policies, plans and pro-ra+s of the *O<ON S. 3s such, he shall provide overall supervision over and -eneral direction to the develop+ent and operations of these *O<ON S. @e shall deter+ine the structure and the staffin- pattern and personnel co+ple+ent of the P <3 and establish re-ional offices, $hen necessar/, sub=ect to the approval of the P <3 #oard. In addition, he shall have the follo$in- specific po$ers and responsibilities: ???? 4i5 To re>uire o$ners of houses, buildin-s or other structures constructed $ithout the necessar/ per+it $hether constructed on public or private lands, to re+ove or de+olish such houses, buildin-s, structures $ithin si?t/ 4A15 da/s after notice and upon failure of such o$ner to re+ove or de+olish such house, buildin- or structure $ithin said period, the director -eneral or his authori;ed representative +a/ su++aril/ cause its re+oval or de+olition at the e?pense of the o$ner, an/ e?istin- la$, decree, e?ecutive order and other issuances or part thereof to the contrar/ not$ithstandin-I ????
01

3n 3ct Providin- for the !e-al Fra+e$or, and Mechanis+ for the *reation, Operation, 3d+inistration, and *oordination of Special cono+ic <ones in the Philippines, *reatin- for this Purpose, the Philippine cono+ic <one 3uthorit/ 4P <35, and For Other Purposes.
0'

%"( 6ncorporated v. Commissioner of 6nternal Revenue , 7.R. No. 'AA80(, 3pril '(, 01'1, p. A. Id. at ).

00

02

*it/ 7overn+ent of #a-uio *it/ v. Mas$en-, 7.R. No. '8101A, Februar/ %, 011(, &)8 S*R3 88, ((.

0%

Orti-as Q *o+pan/, !i+ited Partnership v. Rui;, No. !622(&0, March (, '(8), '%8 S*R3 20A, 22A. 7.R. No. '%0AA(, March '&, 011A, %8% S*R3 AA%, AA(. S *TION '. Ri-hts and Responsibilities of 3ncestral Do+ain *lai+ants '. Ri-hts '. The ri-ht to occup/, cultivate and utili;e the land and all natural resources found therein, as $ell as to reside peacefull/ $ithin the do+ain, sub=ect to e?istin- la$s, rules and re-ulations applicable thereto. 4 +phasis supplied.5

0&

0A

0)

Dated Nove+ber 01, '()0.

08

Providin- for the 7uidelines and Re-ulations for the volution of the ?port Processin- <one 3uthorit/I *reated "nder Presidential Decree No. AA, Into the Philippine cono+ic <one 3uthorit/ "nder Republic 3ct No. )('A.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 189978 M%/51 21, 2012

)A#ME S. PERE(, 3ot1 2& 12s 0,/so&%: %&' o==252%: 5%0%52t4 %s C12,=, M%/2>2&% D,6o:2t2o& O==25,,Petitioner, vs. SPOUSES !ORTUN#TO L. MADRONA %&' 7OLANDA B. PANTE, Respondents. D V#LLARAMA, )R., J.: #efore this *ourt is a petition for revie$ on certiorari under Rule %& of the '(() Rules of *ivil Procedure, as a+ended, see,in- to set aside the March 2', 0118 Decision' and Septe+ber '1, 0118 Resolution0 of the *ourt of 3ppeals 4*35 in *367.R. *V. No. 82A)&. The *3 affir+ed in toto the Decision2 of the Re-ional Trial *ourt 4RT*5 of Mari,ina *it/, #ranch '(0 -rantin- respondents9 pra/er for in=unction a-ainst petitioner. The antecedents follo$: Respondent6spouses Fortunito Madrona and Jolanda #. Pante are re-istered o$ners of a residential propert/ located in !ot 00, #loc, &, France Street corner Ital/ Street, 7reenhei-hts Subdivision, Phase II, Mari,ina *it/ and covered b/ Transfer *ertificate of Title No. 'A(2A&% of the Re-istr/ of Deeds of Mari,ina. In '(8(, respondents built their house thereon and enclosed it $ith a concrete fence and steel -ate. In '(((, respondents received the follo$in- letter dated Ma/ 0&, '((( fro+ petitioner .ai+e S. Pere;, *hief of the Mari,ina De+olition Office: O$ner .ud-e F.!. Madrona !ot 00 #. & Phase II 7reen @ei-htsB, *oncepcion,C Mari,ina *it/ 7.F 7n-. F.!. MadronaB:C *ISION

Ito po a/ +a/ ,inala+an sa baha/Fistru,tura na in/on- itina/o sa 4naturan- lu-ar5, Mari,ina, Nala,hanMa/nila. #a,od u+usli sa #an-,eta 3n- naturan- pa-tata/o n- baha/Fistru,tura a/ isan- pa-laba- sa u+iiral na batasFpro-ra+a na ipatutupad nPa+ahalaan- #a/an n- Mari,ina na nauu,ol sa: B[C PD '1(A 4National #uildin- *ode of the Philippines5 B C PD ))0 43nti6S>uattin- !a$5 B[C Pro-ra+a sa Nalinisan at Disiplina sa #an-,eta B C R3 )0)( 4"rban Develop+ent and @ousin- 3ct of '((05 B C PD 0(A 4 ncroach+ent on rivers, esteros, draina-e channels and other $ater$a/s5 B[C R3 (') as a+ended b/ Section 02, PD. No. '), DO No. % Series of '(8) 4Ille-all/ occupiedFconstructed i+prove+ents $ithin the road ri-ht6of6$a/5 Dahil po dito, ,a/o a/ binibi-/an n- tanin- na Piton- 4)5 ara$ si+ula sa pa-,atan--ap n- sulat na ito para ,usan- alisin an- in/on- istru,tura. 3n- hindi nin/o pa-sunod sa ipina-6uutos na ito a/ +a-bubunsod sa a+in upan- -u+a$a n- ,au,ulan- ha,ban- na naaBaC/on sa itinatadhana n- #atas. Sa in/on- ,aala+an, panuntuan at pa-tali+a. !ubos na -u+a-alan-, 4S-d.5 .3IM S. P R < Ta-apa+ahala Mari,ina De+olition Office& 3s response, respondent Madrona sent petitioner a three6pa-e letterA dated .une 8, '((( statin- that the Ma/ 0&, '((( letter 4'5 contained an accusation libelous in nature as it is conde+nin- hi+ and his propert/ $ithout due processI 405 has no basis and authorit/ since there is no court order authori;in- hi+ to de+olish their structureI 425 cited le-al bases $hich do not e?pressl/ -ive petitioner authorit/ to de+olishI and 4%5 contained a false accusation since their fence did not in fact e?tend to the side$al,. On .une (, '(((, respondents received a letter) fro+ petitioner re>uestin- the+ to provide his office a cop/ of the relocation surve/ on the sub=ect propert/. Respondents, ho$ever, did not obli-e because it $as as if petitioner $as fishin- evidence fro+ the+. More than a /ear later or on Februar/ 08, 011', petitioner sent another letter8 $ith the sa+e contents as the Ma/ 0&, '((( letter but this ti+e -ivin- respondents ten da/s fro+ receipt thereof to re+ove the structure alle-edl/ protrudin- to the side$al,. This pro+pted respondents to file a co+plaint( for in=unction before the Mari,ina *it/ RT* on March '0, 011'. In respondents9 in=unction co+plaint, the/ alle-ed that 4'5 petitioner9s letters +ade it appear that their fence $as encroachin- on the side$al, and directed the+ to re+ove it, other$ise he $ould ta,e the correspondin- actionI

405 petitioner9s threat of action $ould be da+a-in- and adverse to respondents and appears real, earnest and i++inentI 425 the re+oval of their fence, $hich $ould include the +ain -ate, $ould certainl/ e?pose the pre+ises and its occupants to intruders or third personsI 4%5 petitioner has no le-al authorit/ to de+olish structures in private properties and the la$s he cited in his letters do not -ive hi+ an/ authorit/ to do soI 4&5 respondents en=o/ the le-al presu+ption of ri-htful possession of ever/ inch of their propert/I 4A5 if petitioner accuses the+ of erroneous possession, he should so prove onl/ throu-h the proper foru+ $hich is the courtsI 4)5 their fence is beside the side$al, and the land on $hich it stands has never been the sub=ect of ac>uisition either b/ ne-otiation or e?propriation fro+ the -overn+entI 485 petitioner9s intended act of de+olition even in the -uise of a road ri-ht of $a/ has no factual or le-al basis since there is no e?istin- infrastructure pro=ect of the national -overn+ent or Mari,ina *it/ -overn+entI and 4(5 petitioner9s letter and his intended act of de+olition are +alicious, unfounded, +eant onl/ to harass respondents in -ross violation of their ri-hts and in e?cess and outside the scope of his authorit/, thereb/ renderin- hi+ accountable both in his personal and official capacit/. Respondents li,e$ise sou-ht the issuance of a te+porar/ restrainin- order 4TRO5 and a $rit of preli+inar/ in=unction to en=oin petitioner and all persons actin- under hi+ fro+ doin- an/ act of de+olition on their propert/ and that after trial, the in=unction be +ade per+anent. The/ also pra/ed for +oral and e?e+plar/ da+a-es and attorne/9s fees. On March '%, 011', petitioner $as served the correspondin- su++ons.'1 On March 'A, 011', the RT* issued a TRO a-ainst petitioner.'' On March 0(, 011', petitioner filed an "r-ent ? Parte Motion for ?tension to File 3ns$er '0 until 3pril '2, 011'. It appears ho$ever that petitioner9s counsel failed to file an 3ns$er $ithin the e?tended period re>uested. Thus, on +otion'2 of respondents, petitioner $as declared in default on .ul/ '2, 011'.'% On .ul/ 0&, 011', petitioner filed a Motion to !ift Order of Default 4$ith ?6Parte Motion to 3d+it 3ns$er and Notice ntr/ of 3ppearance5.'& 3ccordin- to petitioner9s ne$ counsel, an ans$er $as not filed due to the for+er counsel9s volu+inous $or, load as lone la$/er in the *it/ !e-al Office. On Dece+ber '1, 011', the RT* issued an Order'A den/in- the +otion to lift the order of default. 3side fro+ findin- that the +otion failed to include a notice of hearin-, the RT* also held that the alle-ed cause of dela/ is not e?cusable as volu+inous $or, load of the counsel cannot =ustif/ the disre-ard of court processes or failure to abide b/ the period fi?ed b/ the rules and since the dela/ consisted not onl/ a fe$ da/s but over a hundred and three da/s. Petitioner +oved to reconsider the order but the sa+e $as denied b/ the RT* in its March A, 0110 Order.') Petitioner thereafter filed a petition for certiorari '8 before the *3 assailin- the default order. Thus, on 3pril '8, 0110, the RT* issued an order suspendin- the proceedin-s of the in=unction case Uuntil such ti+e $hen the Petition for *ertiorari shall have been disposed of $ith finalit/.U '( On 3u-ust 01, 0110, the *3 rendered a decision01 dis+issin- the petition for certiorari for lac, of +erit. Petitioner +oved to reconsider the appellate court9s decision, but the +otion $as denied b/ Resolution 0' dated .anuar/ 21, 0112. On Septe+ber '&, 0112, the RT* issued an Order00 dis+issin- the in=unction co+plaint $ithout pre=udice. It held that respondents Uhave not instituted an/ action before thBeC *ourt sho$in- that the/ are still interested in further prosecutin- thBeC caseU and UBiCn accordance $ith Section 2, Rule ') of the Rules of *ourt, the *ourt is constrained to dis+iss the co+plaint for failure of BrespondentsC to prosecute their co+plaint for an unreasonable len-th of ti+e.U @o$ever, upon +otion of respondents, the dis+issal order $as set aside and the co+plaint $as reinstated b/ Order02 dated Dece+ber 2, 0112. The RT* a-reed $ith the observation of respondents that it $as the court $hich suspended the proceedin-s in the in=unction case pendin- final disposition of the petition for certiorari before the *3, and $hen the RT* issued the dis+issal order, there $as /et no entr/ of =ud-+ent fro+ the *3 and so it cannot be said that the petition $as alread/ Udisposed of $ith finalit/.U Respondents $ere then allo$ed to present their evidence e? parte before the branch cler, of court. On .ul/ 0), 011%, the RT* rendered a Decision0% in favor of respondents. The fallo of the RT* decision reads:

H@ R FOR , .ud-+ent is hereb/ rendered in favor of the plaintiffs. 3s pra/ed for, defendant .ai+e S. Pere;, *hief of the De+olition Office of Mari,ina *it/, or an/ person actin- for and in his behalf as $ell as the successors to his office, is per+anentl/ en=oined fro+ perfor+in- an/ act $hich $ould tend to destro/ or de+olish the peri+eter fence and steel -ate of the plaintiffs9 propert/ situated at !ot 00, #loc, &, France Street corner Ital/ Street, Phase II, 7reenhei-hts Subdivision, *oncepcion, Mari,ina *it/. Defendant is further ordered to pa/ the a+ount of T$ent/ Thousand 4P01,111.115 Pesos as attorne/9s fees and Five Thousand 4P&,111.115 Pesos for the costs of suit.0& The RT* held that respondents, bein- la$ful o$ners of the sub=ect propert/, are entitled to the peaceful and open possession of ever/ inch of their propert/ and petitioner9s threat to de+olish the concrete fence around their propert/ is tanta+ount to a violation of their ri-hts as propert/ o$ners $ho are entitled to protection under the *onstitution and la$s. The RT* also ruled that there is no sho$in- that respondents9 fence is a nuisance per se and presents an i++ediate dan-er to the co++unit/9s $elfare, nor is there basis for petitioner9s clai+ that the fence has encroached on the side$al, as to =ustif/ its su++ar/ de+olition. Petitioner appealed the RT* decision to the *3. On March 2', 0118, the appellate court rendered the assailed decision affir+in- the RT* decision. @ence this petition based on the follo$in- -rounds: I. T@ *O"RT OF 3PP 3!S *OMMITT D 3 R V RSI#! RROR IN 3FFIRMIN7 T@ 3*TION OF T@ !OH R *O"RT IN R INST3TIN7FR VIVIN7 T@ *OMP!3INT FI! D #J T@ R SPOND NTS. II. T@ *O"RT OF 3PP 3!S *OMMITT D 3 R V RSI#! RROR IN 3FFIRMIN7 T@ R"!IN7 OF T@ !OH R *O"RT T@3T T@ R SPOND NTS 3R NTIT! D TO P RM3N NT IN."N*TION, T@ R #J R STR3ININ7 T@ P TITION R OR 3NJON 3*TIN7 FOR 3ND ON @IS # @3!F FROM *3RRJIN7 O"T T@ T@R 3T N D D MO!ITION OF T@ IR P RIM T R F N* 3ND ST ! 73T . III. T@ *O"RT OF 3PP 3!S *OMMITT D 3 R V RSI#! B RRORC IN 3FFIRMIN7 T@ R"!IN7 OF T@ !OH R *O"RT ORD RIN7 T@ P TITION R TO P3J T@ R SPOND NTS T@ 3MO"NTS OF TH NTJ T@O"S3ND P SOS 4P01,111.115 3S 3TTORN J9S F S 3ND FIV T@O"S3ND P SOS 4P&,111.115 3S *OSTS OF S"IT.0A ssentiall/, the issues to be resolved in the instant case are: 4'5 Did the trial court err in reinstatin- the co+plaint of respondentsW 405 3re the re>uisites for the issuance of a $rit of in=unction presentW and 425 Is petitioner liable to pa/ attorne/9s fees and costs of suitW Petitioner ar-ues that there $as e?press ad+ission of ne-li-ence b/ respondents and therefore, reinstate+ent of their dis+issed co+plaint $as not =ustified. He disa-ree. 3 perusal of the respondents9 +otion for reconsideration0) of the order of dis+issal reveals that there $as no ad+ission of ne-li-ence b/ respondents, either e?press or i+plied. Respondents onl/ contended that 4'5 the/ $ere under the i+pression that it $ould be the RT* $hich $ould issue the order to continue the proceedin-s once it considers that the petition before the *3 had alread/ been disposed of $ith finalit/, and 405 their counsel9s records do not sho$ that the *3 had alread/ issued an entr/ of =ud-+ent at the ti+e the dis+issal order $as issued. The/ also onl/ stated that the/ follo$ed up $ith the *3 the issuance of the entr/ of =ud-+ent

but the/ $ere =ust told to $ait for its deliver/ b/ +ail. Petitioner9s i+putation that respondents e?pressl/ ad+itted ne-li-ence is therefore clearl/ unfounded. 3dditionall/, as correctl/ found b/ both the RT* and the *3, it did not appear that respondent lost interest in prosecutin- their case nor $as their counsel ne-li-ent in handlin- it. 3ccordin-l/, there $as no basis for the dis+issal order and reinstate+ent of respondents9 co+plaint $as =ustified. 3s to the propriet/ of the issuance of the $rit of in=unction, petitioner clai+s that the re>uisites therefor are not present in the instant case. Petitioner contends that service of a +ere notice cannot be construed as an invasion of a ri-ht and onl/ presupposes the -ivin- of an opportunit/ to be heard before an/ action could be ta,en. @e also clai+s that it is clear fro+ the records of the case that respondents9 concrete fence $as constructed on a part of the side$al, in -ross violation of e?istin- la$s and ordinance and thus, the/ do not have absolute ri-ht over the sa+e. 3ccordin- to petitioner, the encroach+ent is clearl/ apparent in the S,etch Plan of the -overn+ent -eodetic en-ineer as co+pared to the !ocation Plan attached to respondents9 co+plaint. @e li,e$ise contends that the clearin- of the side$al,s is an infrastructure pro=ect of the Mari,ina *it/ 7overn+ent and cannot be restrained b/ the courts as provided in Presidential Decree No. '8'8.08 !astl/, petitioner points out that the trial court should not have +erel/ relied on the testi+onies of respondents alle-in- that his +en $ere alread/ in the subdivision and destro/in- properties on other streets to prove that there $as ur-ent necessit/ for the issuance of the $rit. He disa-ree. For in=unction to issue, t$o re>uisites +ust concur: first, there +ust be a ri-ht to be protected and second, the acts a-ainst $hich the in=unction is to be directed are violative of said ri-ht. 0( @ere, the t$o re>uisites are clearl/ present: there is a ri-ht to be protected, that is, respondents9 ri-ht over their concrete fence $hich cannot be re+oved $ithout due processI and the act, the su++ar/ de+olition of the concrete fence, a-ainst $hich the in=unction is directed, $ould violate said ri-ht. If petitioner indeed found respondents9 fence to have encroached on the side$al,, his re+ed/ is not to de+olish the sa+e su++aril/ after respondents failed to heed his re>uest to re+ove it. Instead, he should -o to court and prove respondents9 supposed violations in the construction of the concrete fence. Indeed, unless a thin- is a nuisance per se, it +a/ not be abated su++aril/ $ithout =udicial intervention. 21 Our rulin- in Lucena ,rand Central erminal( 6nc. v. +AC Liner( 6nc., on the need for =udicial intervention $hen the nuisance is not a nuisance per se, is $ell $orth +entionin-. In said case, $e ruled: Respondents can not see, cover under the -eneral $elfare clause authori;in- the abate+ent of nuisances $ithout =udicial proceedin-s. That tenet applies to a nuisance per se, or one $hich affects the i++ediate safet/ of persons and propert/ and +a/ be su++aril/ abated under the undefined la$ of necessit/ 4Monteverde v. 7eneroso, &0 Phil. '02 B'(80C5. The stora-e of copra in the >uonset buildin- is a le-iti+ate business. #/ its nature, it can not be said to be in=urious to ri-hts of propert/, of health or of co+fort of the co++unit/. If it be a nuisance per accidens it +a/ be so proven in a hearin- conducted for that purpose. It is not per se a nuisance $arrantin- its su++ar/ abate+ent $ithout =udicial intervention. B"nderscorin- supplied.C In *ampanga Bus Co.( 6nc. v. Municipalit' of arlac $here the appellant6+unicipalit/ si+ilarl/ ar-ued that the ter+inal involved therein is a nuisance that +a/ be abated b/ the Municipal *ouncil via an ordinance, this *ourt held: USuffice it to sa/ that in the abate+ent of nuisances the provisions of the *ivil *ode 43rticles A(%6)1)5 +ust be observed and follo$ed. This appellant failed to do.U2' Respondents9 fence is not a nuisance per se. #/ its nature, it is not in=urious to the health or co+fort of the co++unit/. It $as built pri+aril/ to secure the propert/ of respondents and prevent intruders fro+ enterin- it. 3nd as correctl/ pointed out b/ respondents, the side$al, still e?ists. If petitioner believes that respondents9 fence indeed encroaches on the side$al,, it +a/ be so proven in a hearin- conducted for that purpose. Not beina nuisance per se, but at +ost a nuisance per accidens, its su++ar/ abate+ent $ithout =udicial intervention is un$arranted. Re-ardin- the third issue, petitioner ar-ues that he $as =ust perfor+in- his duties and as public officer, he is entitled to the presu+ption of re-ularit/ in the perfor+ance of his official functions. "nless there is clear proof

that he acted be/ond his authorit/ or in evident +alice or bad faith, he contends that he cannot be held liable for attorne/9s fees and costs of suit. Respondents, for their part, counter that the presu+ption of re-ularit/ has been ne-ated b/ the fact that despite their repl/ to the first notice, $hich put petitioner on notice that $hat he $as doin- $as ultra vires, he still reiterated his earlier de+and and threat of de+olition. @avin- been $arned b/ respondents that his acts $ere in fact violations of la$, petitioner should have been +ore circu+spect in his actions and should have pursued the proper re+edies that $ere +ore in consonance $ith the dictates of due process. Respondents further pra/ for +oral da+a-es for the serious an?ieties and sleepless ni-hts the/ suffered and e?e+plar/ da+a-es to serve as an e?a+ple to other public officials that the/ should be +ore circu+spect in the perfor+ance of their duties. He a-ree $ith respondents. 3s respondents $ere forced to file a case a-ainst petitioner to en=oin the i+pendin- de+olition of their propert/, the a$ard of attorne/9s fees and costs of suit is =ustified. *learl/, respondents $anted to settle the proble+ on their alle-ed encroach+ent $ithout resortin- to court processes $hen the/ replied b/ letter after receivinpetitioner9s first notice. Petitioner, ho$ever, instead of considerin- the points raised in respondents9 repl/6letter, re>uired the+ to sub+it the relocation plan as if he $ants respondents to prove that the/ are not encroachin- on the side$al, even if it $as he $ho +ade the accusation of violation in the first place. 3nd $hen he did not -et the UproofU he $as re>uirin- fro+ respondents, he a-ain sent a notice $ith a threat of su++ar/ de+olition. This -ave respondents no other choice but to file an in=unction co+plaint a-ainst petitioner to protect their ri-hts. Hith re-ard to respondents9 clai+ for +oral da+a-es, this *ourt rules that the/ are entitled thereto in the a+ount of P'1,111.11 pursuant to 3rticle 00')20 of the *ivil *ode. 3s testified to b/ respondents, the/ suffered an?iet/ and sleepless ni-hts since the/ $ere $orried $hat $ould happen to their children $ho $ere left b/ the+selves in their Mari,ina residence $hile the/ $ere in Or+oc *it/ if petitioner $ould +a,e real his threat of de+olition on their fence.1F0phi1 He li,e$ise hold that respondents are entitled to e?e+plar/ da+a-es in the a+ount of P&,111.11 to serve as an e?a+ple to other public officials that the/ should be +ore circu+spect in the perfor+ance of their duties. H@ R FOR , the March 2', 0118 Decision and Septe+ber '1, 0118 Resolution of the *ourt of 3ppeals in *367.R. *V. No. 82A)& are 3FFIRM D $ith MODIFI*3TION. Petitioner .ai+e S. Pere;, *hief of the De+olition Office of Mari,ina *it/ is ORDERED to pa/ respondent Spouses Fortunito !. Madrona and Jolanda #. Pante +oral da+a-es in the a+ount of P'1,111.11 and e?e+plar/ da+a-es in the a+ount of P&,111.11. SO ORD R D. MART#N S. V#LLARAMA, )R. 3ssociate .ustice H *ON*"R: RENATO C. CORONA *hief .ustice *hairperson TERES#TA ). LEONARDO+DE CASTRO 3ssociate .ustice LUCAS P. BERSAM#N 3ssociate .ustice

ESTELA M. PERLAS+BERNABEL 3ssociate .ustice * RTIFI*3TION

Pursuant to Section '2, 3rticle VIII of the '(8) *onstitution, I certif/ that the conclusions in the above Decision had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt9s Division. RENATO C. CORONA *hief .ustice

!oot&ot,s
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Desi-nated additional +e+ber per Special Order No. '01) dated Februar/ 02, 01'0.

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Rollo, pp. '16'(. Penned b/ 3ssociate .ustice d-ardo P. *ru; $ith 3ssociate .ustices Fernanda !a+pas Peralta and nrico 3. !an;anas concurrin-.
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Id. at 0'. Penned b/ 3ssociate .ustice d-ardo P. *ru; $ith 3ssociate .ustices Fernanda !a+pas Peralta and Ma-dan-al M. De !eon concurrin-.
2

Records, Folder I, pp. 0006020. Records, Folder II, p. '. Id. at %. Id. at &6). Id. at ''. Id. at 8. Records, Folder I, pp. 26''. Id. at '). Id. at 0260%. Id. at %26%%. Id. at %16%'. Id. at %A. Id. at A(6)2. Id. at 8'680. Id. at ''2. Id. at '006'2). Id. at '%2. Id. at '%(6'&).

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Id. at ')&6')A. Id. at ')86')(. Id. at 0106012. Id. at 0006020. Id. at 02'6020. Rollo, p. 20. Records, Folder I, pp. '8(6'('.

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Prohibitin- *ourts fro+ Issuin- Restrainin- Orders or Preli+inar/ In=unctions in *ases InvolvinInfrastructure and Natural Resource Develop+ent Pro=ects of, and Public "tilities Operated b/, the 7overn+ent. Issued on .anuar/ 'A, '(8'.
0(

Philippine cono+ic <one 3uthorit/ v. *arantes, 7.R. No. '8'0)%, .une 02, 01'1, A0' S*R3 &A(, &)86&)(, citin- *it/ 7overn+ent of #a-uio *it/ v. Mas$en-, 7.R. No. '8101A, Februar/ %, 011(, &)8 S*R3 88, ((.
21

!ucena 7rand *entral Ter+inal, Inc. v. .3* !iner, Inc., 7.R. No. '%822(, Februar/ 02, 011&, %&0 S*R3 ')%, '('.
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Id., citin- 2state of ,regoria %rancisco v. Court of Appeals, 7.R. No. (&0)(, .ul/ 0&, '((', '(( S*R3 &(&, A1' and *ampanga Bus Co.( 6nc. v. Municipalit' of arlac, No. !6'&)&(, Dece+ber 21, '(A', 2 S*R3 8'A, 80)6808.
20

3RT. 00'). Moral da+a-es include ph/sical sufferin-, +ental an-uish, fri-ht, serious an?iet/, bes+irched reputation, $ounded feelin-s, +oral shoc,, social hu+iliation, and si+ilar in=ur/. Thou-h incapable of pecuniar/ co+putation, +oral da+a-es +a/ be recovered if the/ are the pro?i+ate result of the defendant9s $ron-ful act or o+ission. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 18-.60 )%&u%/4 2-, 2012

MAR#NO B. #CDANG, Petitioner, vs. SAND#GANBA7AN AS,5o&' D2@2s2o&B %&' PEOPLE O! T"E P"#L#PP#NES, Respondents. D V#LLARAMA, )R., J.: #efore us is a petition for certiorari under Rule A& see,in- to reverse and set aside the Decision' dated Ma/ 0A, 0118 and Resolution0 dated Nove+ber '8, 0118 of the Sandi-anba/an 4S#5 4Second Division5 $hich convicted petitioner of the cri+e of +alversation of public funds. The factual antecedents: *ISION

Petitioner Marino #. Icdan-, at the ti+e of the transactions sub=ect of this controvers/, $as the Re-ional Director of the Office for Southern *ultural *o++unities 4OS**5 Re-ion SII in *otabato *it/. On .anuar/ '(, '((8, a Special 3udit Tea+ $as for+ed b/ the *o++ission on 3udit 4*O35 Re-ional Office SII, *otabato *it/ pursuant to *O3 Re-ional Office Order No. (86'12 to conduct co+prehensive audit on the '((A funds for livelihood pro=ects of the OS**6Re-ion SII. @ad=i Rashid 3. Muda- $as desi-nated as tea+ leader, $ith .ose Mercado, M/rla Fer+in and vel/n Macala as +e+bers. In its report sub+itted to the *O3 Re-ional Director, the audit tea+ noted that petitioner $as -ranted cash advances $hich re+ained unli>uidated. In the cash e?a+ination conducted b/ the tea+ on March '1, '((8, it $as discovered that petitioner had a shorta-e of P0'(,2(0.)&. Out of the total a+ount of P(01,(22.11 released in Septe+ber '((A to their office under sub6allot+ent advice No. *OT61%2, to cover the i+ple+entation of various socio6econo+ic pro=ects for the cultural co++unities of the re-ion, cash advances a+ountinto P%1),111.11 $ere -ranted fro+ October ', '((A to Februar/ &, '(() to officials and e+plo/ees includinpetitioner. Per records, it $as noted that P0(),2(0.)& of these cash advances re+ained unli>uidated as of Dece+ber 2', '(().% Petitioner never denied that he received a total of P'(A,111.11 evidenced b/ disburse+ent vouchers and chec,s pa/able to hi+, as follo$s: DV No. 1(88 1(8( ''&1 1(8) 1(8A *hec, No. 8(2%22 8(2%20 ('A&2( 8(2%0( 8(2%21 Date '1F1'F(A '1F1'F(A ''F1&F(A '1F1'F(A '1F1'F(A Purpose Initial fundin- for the 3ncestral Do+ain Develop+ent Pro-ra+ stablish+ent of I**6 I3D Support to *ooperative 3dult !iterac/ Pro-ra+ *hild *are Develop+ent Pro-ra+ 3+ount P&1,111.1 1 &1,111.11 A,111.11 A1,111.11 21,111.11
&

In addition, per the Schedule of *ash 3dvance Intended for !ivelihood Pro=ects,A the follo$in- a+ounts $ere also for petitioner9s account: *hec, No. ???? 8(2A22 8(2)A8 8(2)88 ('AA2% ''F'&F(A '0F'2F(A '0F01F(A 10F1&F() Operationali;ation of Tribal *ooperative Fishpen Develop+ent Pro-ra+ Operationali;ation of Tribal *ooperative 3ncestral Do+ain Develop+ent Pro-ra+ '',111.11 '1,111.11 &,111.11 '1,111.11 232,000.00 Date Purpose 3+ount

BTOTAL CAS" ADVANCES + PJ

In the 3udit Observation Me+orandu+ No. ()611' 4March '8, '((85 sent b/ the *O3 Re-ion SII to the OS**6Re-ion SII reflectin- the findin-s of the Special 3udit Tea+, it $as also disclosed that: 4'5 Funds intended for pro-ra+s for 3ncestral Do+ain *lai+ Develop+ent and to support tribal cooperatives, $ere cash advanced, but the proposed pro=ects $ere not i+ple+ented b/ the OS**6Re-ion SIII 405 No official cashboo,s are +aintained to record cash advances and disburse+ents fro+ the '((A funds allocated for livelihood pro=ectsI and 425 Out of the total P(01,(22.11 allocated for '((A livelihood pro=ects, the a+ount of P%%&,8(0.81 $as disbursed leavin- a balance of P%)&,1%1.01I ho$ever, final trial balance as of Dece+ber 2', '((A sho$ed that the office has e?hausted the allocated funds for the $hole /earI the utili;ation of the P%)&,1%1.01 could not be e?plained b/ the 3ccountant so that it +a/ be concluded that such $as +isappropriated. Petitioner indicated his

co++ents on the said +e+orandu+ b/ re>uestin- for e?tension to restitute the a+ount of P21A,%'0.)& 4$hich included thePA),111.11 cash shorta-e of another OS**6Re-ion SII official, Ma. Teresa 3. So+orostro5, and e?plainin- that the P%)&,1%1.01 $as not +isappropriated as evidenced b/ their o$n financial report and re6 state+ent of allot+ent and obli-ation for the +onth endin- Dece+ber 2', '((A.) Fro+ the field intervie$s conducted b/ the audit tea+, it $as also -athered that the intended pro=ects covered b/ the cash advances $ere never i+ple+ented, such as the proposed *hildren Develop+ent Pro=ect in #-/. MatilaI adult literac/ pro-ra+ in *otabatoI operationali;ation of tribal cooperative in #-/. #anta-an, Sultan NudaratI and establish+ent of I**6I3D in Ma-pet, *otabato $here a co+plaint $as +ade to the effect that the OS**6 Re-ion SII office alle-edl/ upon receipt of funds prepares a pro=ect for i+ple+entation $hich is different fro+ that pro=ect proposal sub+itted b/ the pro=ect officer. Supposedl/, there $as li,e$ise no support or assistance -iven b/ the OS**6Re-ion SII to the activities of the Provincial Special Tas, Force on 3ncestral Do+ain for the indi-enous people of *olu+bio, Sultan Nudarat, and to #-/s. Salu+pin-, Municipalit/ of speran;a, President Ro?as, and Matrilala.8 3nd as alread/ +entioned, the audit tea+ discovered that the accountable officers of OS**6Re-ion SII failed to +aintain the official cashboo, so that there $ere no recordin- of transactions $henever a cash advance $as -rantedI onl/ subsidiar/ led-ers $ere used b/ the accountin- section. Fro+ the P020,111.11 accountabilities of petitioner, the *O3 deducted the follo$in-: P'1,111.11 covered b/ ac,no$led-+ent receipt b/ 3. 3nasI various cash invoices in the a+ount of P0,'().0&I and Rei+burse+ent ?pense Receipts 4R Rs5 in the a+ount of P%'1.11. 3fter the cash e?a+ination, petitioner $as still found short ofP0'(,2(0.)&.( *onse>uentl/, a de+and letter $as sent b/ the *O3 for petitioner to i++ediatel/ produce the +issin- funds. In his letter6repl/ dated March '(, '((8, petitioner re>uested for one6$ee, e?tension to co+pl/ $ith the directive.'1 @o$ever, the one6$ee, period lapsed $ithout co+pliance havin- been +ade b/ petitioner. @ence, the audit tea+ reco++ended the initiation of ad+inistrative and cri+inal char-es a-ainst hi+, as $ell as Ms. So+orostro, *hief of the Socio6*ultural Develop+ent *oncerns Division of OS**6Re-ion SII. On Septe+ber 0', 0111, the Office of the O+buds+an found probable cause a-ainst petitioner and Ms. So+orostro for violation of 3rt. 0') of the Revised Penal *ode, as a+ended, and Section 24e5 of Republic 3ct No. 21'( 43nti67raft and *orrupt Practices 3ct5. The 3+ended Infor+ation char-in- petitioner $ith the cri+e of Malversation of Public Funds 4*ri+inal *ase No. 0A20)5 reads: That durin- the period fro+ October '((A to Februar/ '(() in *otabato *it/, Philippines and $ithin the =urisdiction of this @onorable *ourt, accused Marino #. Icdan-, a public officer bein- then the Re-ional Director of the Office for Southern *o++unities 4OS**5, Re-ion SII, *otabato *it/ and as such is accountable officer for the public fund received b/ hi+ that $ere intended for the socio6econo+ic and cultural develop+ent pro=ects of the OS** Re-ion SII, did then and there $illfull/, unla$full/ and feloniousl/ ta,eB,C +isappropriate, e+be;;le and convert for his o$n personal use and benefit fro+ the said fund the a--re-ate a+ount of THO @"NDR D NIN T N T@O"S3ND T@R @"NDR D NIN TJ6THO P SOS 3ND )&F'11 4P0'(,2(0.)&5 to the da+a-e and pre=udice of the -overn+ent in the aforesaid su+. *ONTR3RJ TO !3H.'' Petitioner $as li,e$ise char-ed $ith violation of Section 24e5 of R.3. No. 21'( 4*ri+inal *ase No. 0A2085. The lone $itness for the prosecution $as @ad=i Rashid 3. Muda-, State 3uditor IV of *O3 Re-ion SII. @e presented vouchers $hich the/ $ere able to -ather durin- the cash e?a+ination conducted on March '1, '((8, $hich sho$ed cash advances -ranted to petitioner, and in addition other cash advances also received b/ petitioner for $hich he re+ained accountable, dul/ certified b/ the 3ccountant of OS**6Re-ion SII. Petitioner $as notified of the cash shorta-e throu-h the 3udit Observation Me+orandu+ No. ()611' dated March '8, '((8 and $as sent a de+and letter after failin- to account for the +issin- funds totallin- P0'(,2(0.)&.'0 On cross6e?a+ination, $itness Muda- ad+itted that $hile the/ secured $ritten and si-ned certifications fro+ pro=ect officers and other individuals durin- the field intervie$s, these $ere not +ade under oath. The reports fro+ Sultan Nudarat $ere =ust sub+itted to hi+ b/ his tea+ +e+bers as he $as not present durin- the actual

intervie$sI he had -one onl/ to Nidapa$an, *otabato and onl/ prepared the audit report. @e also ad+itted that the/ no lon-er visited the pro=ect sites after bein- told b/ the pro=ect officers that there $as nothin- to be inspected because no pro=ect $as i+ple+ented.'2 On Ma/ 0A, 0118, the S#9s Second Division rendered its decision convictin- petitioner of +alversation and ac>uittin- hi+ fro+ violation of Section 24e5 of R.3. No. 21'(. The dispositive portion reads: H@ R FOR , pre+ises considered =ud-+ent is hereb/ rendered findin- accused M3RINO #. I*D3N7 7uilt/ be/ond reasonable doubt of Malversation of Public Funds or Propert/ in *ri+inal *ase No. 0A20) and findin- in his favor the +iti-atin- circu+stance of voluntar/ surrender, is hereb/ sentenced to an indeter+inate penalt/ of, considerin- the a+ount involved, T N 4'15 J 3RS and ON 4'5 D3J of PRISION M3JOR as +ini+u+ to I7@T N 4'85 J 3RS, I7@T 485 MONT@S and ON 4'5 D3J of Reclusion Te+poral as +a?i+u+, to suffer the penalt/ of perpetual special dis>ualification, and to pa/ a fine of P'(A,111.11 $ithout subsidiar/ i+prison+ent in case of insolvenc/. @e is also ordered to rei+burse the -overn+ent of the said a+ount. In *ri+inal *ase No. 0A208, he is hereb/ 3*K"ITT D on the basis of reasonable doubt. Hith cost a-ainst accused. SO ORD R D.'% The S# ruled that the prosecution has established the -uilt of petitioner be/ond reasonable doubt for the cri+e of +alversation of public funds, the presu+ption fro+ his failure to account for the cash shorta-e in the a+ount ofP020,111.11 re+ains unrebutted. 3s to the reasons -iven b/ petitioner for non6co+pliance $ith the *O3 de+and, the S# held: 3 careful perusal of Mr. Icdan-9s !etter63ns$er dated '( March '((8 4 ?h. U.U5 to the de+and letter and directive issued b/ the *O3 clearl/ sho$s he $as =ust as,in- for e?tension of ti+e to co+pl/ $ith the de+and letter. There $as virtuall/ no denial on his part that he received the P020,111.11 a+ount ear+ar,ed for the various -overn+ent pro=ects. @is reasons $ere first, the co++ittee tas,ed to prepare the li>uidation of the cash advances are still in the process of collectin- all the docu+ents pertinent to the disburse+ent of the pro=ect fundsI andsecond, the pa/ees to the disburse+ents $ere still to be notified so that the/ $ill have to co+e to the office to affi? their si-natures as pa/ees to the li>uidation vouchers. This response is >ueer because as he -ave the +one/ to the supposed pa/ees, he should have ,ept a led-er to ,eep trac, of the sa+e, considerin- that these are public funds. More i+portantl/, Mr. Icdan- $as -iven a+ple opportunit/ to dispute the *O3 findin-s that there $as indeed a shorta-e. Instead of doin- so, Mr. Icdan- never presented the pro+ised proof of his innocence before this *ourt durin- the trial of this case. Thus, the pri+a facie presu+ption under 3rticle 0') of the Revised Penal *ode, that the failure of a public officer to have dul/ forthco+in- the public funds $ith $hich he is char-eable, upon de+and, shall be evidence that he put the +issin- funds for personal uses, arises because first( there $as no issue as to the accurac/, correctness and re-ularit/ of the audit findin-s and second, the funds are +issin-.'&1avvphi1 Petitioner filed a +otion for reconsideration re>uestin- that he be -iven another chance to present his evidence, statin- that his inabilit/ to attend the trial $ere due to financial constraints such that even $hen so+e of the scheduled hearin-s $ere so+eti+es held in Davao *it/ and *ebu *it/, he still failed to attend the sa+e. @o$ever, the S# denied the +otion notin- that the decision has beco+e final and e?ecutor/ on .une '1, 0118 for failure of petitioner to file a +otion for reconsideration, or ne$ trial, or appeal before that date. @ence, this petition anchored on the follo$in- -rounds: I. T@ @ONOR3#! S3NDI73N#3J3N *OMMITT D 7R3V 3#"S OF DIS*R TION T3NT3MO"NT TO !3*N OR S* SS OF ."RISDI*TION H@ N IT R ND R D ITS ."D7M NT OF *ONVI*TION 373INST P TITION R D SPIT ITS NNOH! D7 T@3T P TITION R H3S NOT 3#! TO 3DD"* @IS VID N* D" TO V3RIO"S

*IR*"MST3N* S, T@3T @ H3S NOT 3SSIST D #J *O"NS ! D"RIN7 T@ PROM"!73TION OF ."D7M NTI T@ 7ROSS 3ND R *N! SS N 7!I7 N* OF @IS FORM R *O"NS ! IN F3I!IN7 TO 3SSIST @IM D"RIN7 T@ PROM"!73TIONI @IS FIN3N*I3! 3ND *ONOMI* DIS!O*3TION H@I*@ M3D @IM "N3#! TO 3TT ND T@ S*@ D"! D TRI3!S IN M3NI!3, D3V3O *ITJ 3ND * #" *ITJ, @IS R SID N* # IN7 IN *OT3#3TO, H@I*@ 3!! *ONSTIT"T 3 D NI3! OF @IS RI7@T TO # @ 3RD 3ND TO D" PRO* SS. II. P TITION R H3S !IN HIS *! 3R!J D NI D OF @IS RI7@T TO D" PRO* SS H@ N D" TO T@ R *N! SS 3ND 7ROSS N 7!I7 N* OF @IS FORM R *O"NS !, T@ !3TT R F3I! D TO FI! 3 MOTION FOR N H TRI3! TO R V RS T@ ."D7M NT OF *ONVI*TION # FOR T@ S3NDI73N#3J3N OR TO FI! 3N 3PP 3! TO T@ S"PR M *O"RT FROM T@ 3DV RS ."D7M NT OF *ONVI*TION. III. IT IS @I7@!J "N."ST, IN K"IT3#! 3ND "N*ONS*ION3#! FOR P TITION R TO # PR S NT!J !3N7"IS@IN7 IN .3I! HIT@O"T @IS D F NS 373INST T@ *RIM *@3R7 D @3VIN7 # N PR S NT D # FOR T@ @ONOR3#! S3NDI73N#3J3N 3ND 3PPR *I3T D #J T@ S3ID *O"RT, 3ND #J T@IS @ONOR3#! S"PR M *O"RT IN *3S OF 3PP 3! FROM 3N 3DV RS D *ISION. IV. R M3ND OF T@ INST3NT *3S TO T@ *O"RT OF ORI7IN, OR TO T@ @ONOR3#! S3NDI73N#3J3N SO T@3T P TITION R *3N PR S NT @IS VID N* # FOR S3ID *O"RT, 3SSIST D #J N H *O"NS !, IS PROP R 3ND ."STIFI D, SP *I3!!J *ONSID RIN7 T@3T T@ INST3NT *3S INVO!V S 3 *RIM OF 3!! 7 D M3!V RS3TION OF P"#!I* F"NDS H@I*@ @ N V R *OMMITT D, 3ND INVO!V S 3 @I7@ R P N3!TJ OR T RM OF IMPRISONM NT.'A The petition +ust fail. 3t the outset it +ust be e+phasi;ed that the special civil action of certiorari is not the proper re+ed/ to challen-e a =ud-+ent conviction rendered b/ the S#. Petitioner should have filed a petition for revie$ on certiorari underRule %&. Pursuant to Section ) of Presidential Decree No. 'A1A,') as a+ended b/ Republic 3ct No. 80%(, decisions and final orders of the Sandi-anba/an shall be appealable to the Supre+e *ourt b/ petition for revie$ on certiorari raisin- pure >uestions of la$ in accordance $ith Rule %& of the Rules of *ourt. Section ' of Rule %& of the Rules of *ourt provides that UBaC part/ desirin- to appeal b/ certiorari fro+ a =ud-+ent, final order or resolution of the ? ? ? Sandi-anba/an ? ? ? $henever authori;ed b/ la$, +a/ file $ith the Supre+e *ourt a verified petition for revie$ on certiorari. The petition ? ? ? shall raise onl/ >uestions of la$, $hich +ust be distinctl/ set forth.U Section 0 of Rule %& li,e$ise provides that the petition should be filed $ithin the fifteen6da/ period fro+ notice of the =ud-+ent or final order or resolution, or of the denial of petitioner9s +otion for reconsideration filed in due ti+e after notice of =ud-+ent. 3s observed b/ the S#, the '&6da/ period of appeal, counted fro+ the date of the pro+ul-ation of its decision on Ma/ 0A, 0118, lapsed on .une '1, 0118, $hich rendered the sa+e final and e?ecutor/. Petitioner9s +otion for reconsideration $as thus filed 6 '%4s :%t,. Petitioner9s resort to the present special civil action after failin- to appeal $ithin the fifteen6da/ re-le+entar/ period, cannot be done. The special civil action of certiorari cannot be used as a substitute for an appeal $hich the petitioner alread/ lost.'8 This *ourt has often enou-h re+inded +e+bers of the bench and bar that a special civil action for certiorari under Rule A& lies onl/ $hen there is no appeal nor plain, speed/ and ade>uate re+ed/ in the ordinar/ course of la$. *ertiorari is not allo$ed $hen a part/ to a case fails to appeal a =ud-+ent or final order despite the availabilit/ of that re+ed/. The re+edies of appeal and certiorari are +utuall/ e?clusive and not alternative or successive.'(3ppeals thou-h filed late $ere allo$ed in so+e rare cases, but there +ust be e?ceptional circu+stances to =ustif/ the rela?ation of the rules. Petitioner clai+s that his ri-ht to due process $as violated $hen his counsel failed to assist hi+ durin- the pro+ul-ation of the =ud-+ent. @e faults the Sandi-anba/an for proceedin- $ith the pro+ul-ation despite the

petitioner not then bein- assisted b/ his counsel, and bein- a la/+an he is not fa+iliar $ith court processes and procedure. Section A, Rule '01 of the Revised Rules of *ri+inal Procedure, as a+ended, provides: S *. A. *romulgation of 3udgment. 66 The =ud-+ent is pro+ul-ated b/ readin- it 2& t1, 0/,s,&5, o= t1, %55us,' %&' %&4 Gu'g, o= t1, 5ou/t 2& C1251 2t C%s /,&',/,'. @o$ever, if the conviction is for a li-ht offense, the =ud-+ent +a/ be pronounced in the presence of his counsel or representative. Hhen the =ud-e is absent or outside the province or cit/, the =ud-+ent +a/ be pro+ul-ated b/ the cler, of court. If the accused is confined or detained in another province or cit/, the =ud-+ent +a/ be pro+ul-ated b/ the e?ecutive =ud-e of the Re-ional Trial *ourt havin- =urisdiction over the place of confine+ent or detention upon re>uest of the court $hich rendered the =ud-+ent. The court pro+ul-atin- the =ud-+ent shall have authorit/ to accept the notice of appeal and to approve the bail bond pendin- appealI provided, that if the decision of the trial court convictin- the accused chan-ed the nature of the offense fro+ non6bailable to bailable, the application for bail can onl/ be filed and resolved b/ the appellate court. The proper cler, of court shall -ive &ot25, to t1, %55us,' personall/ or throu-h his bonds+an or $arden %&' 5ou&s,:, /,Fu2/2&g 126 to 3, 0/,s,&t %t t1, 0/o6u:g%t2o& o= t1, ',52s2o&. If the accused $as tried in a)sentia because he =u+ped bail or escaped fro+ prison, the notice to hi+ shall be served at his last ,no$n address. In case the accused fails to appear at the scheduled date of pro+ul-ation of =ud-+ent despite notice, the pro+ul-ation shall be +ade b/ recordin- the =ud-+ent in the cri+inal doc,et and servin- hi+ a cop/ thereof at his last ,no$n address or thru his counsel. If the =ud-+ent is for conviction and the failure of the accused to appear $as $ithout =ustifiable cause, he shall lose the re+edies available in these Rules a-ainst the =ud-+ent and the court shall order his arrest. Hithin fifteen 4'&5 da/s fro+ pro+ul-ation of =ud-+ent, ho$ever, the accused +a/ surrender and file a +otion for leave of court to avail of these re+edies. @e shall state the reasons for his absence at the scheduled pro+ul-ation and if he proves that his absence $as for a =ustifiable cause, he shall be allo$ed to avail of said re+edies $ithin fifteen 4'&5 da/s fro+ notice. 4 +phasis supplied.5 There is nothin- in the rules that re>uires the presence of counsel for the pro+ul-ation of the =ud-+ent of conviction to be valid. Hhile notice +ust be served on both accused and his counsel, the latter9s absence durinthe pro+ul-ation of =ud-+ent $ould not affect the validit/ of the pro+ul-ation. Indeed, no substantial ri-ht of the accused on the +erits $as pre=udiced b/ such absence of his counsel $hen the sentence $as pronounced. 01 It is $orth +entionin- that petitioner never raised issue on the fact that his counsel $as not around durin- the pro+ul-ation of the =ud-+ent in his +otion for reconsideration $hich +erel/ pra/ed for reopenin- of the case to enable hi+ to present li>uidation docu+ents and receipts, citin- financial constraints as the reason for his failure to attend the scheduled hearin-s. #efore this *ourt he no$ sub+its that the -ross ne-li-ence of his counsel deprived hi+ of the opportunit/ to present defense evidence. Perusin- the records, $e find that the prosecution +ade a for+al offer of evidence on 3u-ust 21, 0110. 3t the scheduled presentation of defense evidence on Septe+ber %, 0110, petitioner9s counsel, 3tt/. Manuel . Iral, called the attention of the S# to the fact that he had =ust received a cop/ of said for+al offer, and re>uested for '& da/s to sub+it his co++ent thereon. The S# -ranted his re>uest and set the case for hearin- on Dece+ber 0 and 2, 0110.0' No such co++ent had been filed b/ 3tt/. Iral. On Nove+ber '8, 0110, due to difficult/ in securin- a >uoru+ $ith five e?istin- vacancies in the court, the S# thus reset the hearin- to 3pril 0' and 00, 0112.00 On .anuar/ '%, 0112, the S#9s Second Division issued a resolution ad+ittin- ?hibits U3U to UNU after the defense failed to sub+it an/ co++ent to the for+al offer of the prosecution, and statin- that the previousl/ scheduled hearin-s on 3pril 0' and 00, 0112 shall proceed. 02 On 3pril '', 0112, the S# for the sa+e reason a-ain reset the hearin- dates to 3u-ust '' and '0, 0112.0% 3t the scheduled initial presentation of defense evidence on 3u-ust '', 0112, onl/ petitioner appeared infor+in- that $hen he passed b/ that +ornin- to his counsel9s residence, the latter $as ill and thus re>uested for postpone+ent. Hithout ob=ection fro+ the prosecution and on condition that 3tt/. Iral $ill present a +edical

certificate $ithin five da/s, the S# reset the hearin- to October 'A and '), 0112. The S# also said that if b/ the ne?t hearin- petitioner is not /et represented b/ his counsel, said court shall appoint a counsel de oficio in the person of 3tt/. Hilfredo *. 3ndres of the Public 3ttorne/9s Office.0& @o$ever, on October 'A, 0112, the S# received a letter fro+ petitioner re>uestin- for postpone+ent citin- the unti+el/ death of his nephe$ and s$ellin- of his feet due to arthritis. @e assured the court of his attendance in the ne?t hearin- it $ill set at a later date.0A3ccordin-l/, the S# reset the hearin-s to Februar/ '0 and '2, 011%.0) On Februar/ %, 011%, the S# a-ain received a letter fro+ petitioner re>uestin- another postpone+ent for +edical 4arthritis5 and financial 4lac, of funds for attorne/9sFappearance fee5 reasons. @e assured the court of his availabilit/ after the Ma/ '1, 011% elections.08 This ti+e, the S# did not -rant the re>uest and declared the case sub+itted for decision on the basis of the evidence on record.0( On March 21, 011%, 3tt/. Iral filed an "r-ent Motion for Reconsideration of the Februar/ '0, 011% order sub+ittin- the case for decision, citin- circu+stances be/ond his control M the fact that he had no +eans to co+e to Manila fro+ Nidapa$an, North *otabato, he bein- =obless for the past four /ears. @e thus pra/ed to be allo$ed to present his evidence on Ma/ ') and '8, 011%.21 The prosecution opposed said +otion, citin- t$o postpone+ents in $hich petitioner9s counsel have not sub+itted the re>uired +edical certificate and e?planation and failure to be present on October 'A, 0112.2' In the interest of =ustice, the S# reconsidered its earlier order sub+ittin- the case for decision and -ave the petitioner a last chance to present his evidence on 3u-ust ') to '8, 011%.20 On 3u-ust '), 011%, 3tt/. Iral appeared but re>uested that presentation of evidence be postponed to the follo$in- da/, $hich re>uest $as -ranted b/ the S#.22 The ne?t da/, ho$ever, onl/ petitioner appeared sa/in- that his la$/er is indisposed. Over the ob=ection of the prosecution and in the supre+e interest of =ustice, the S# cancelled the hearin- and rescheduled it to Nove+ber '& and 'A, 011%. 3tt/. Iral $as directed to sub+it a verified +edical certificate $ithin '1 da/s under pain of conte+pt, and the S# li,e$ise appointed a counsel de oficio in the person of 3tt/. Roberto *. O+anda+ $ho $as directed to be read/ at the scheduled hearin- in case petitioner9s counsel is not read/, stressin- that the court $ill no lon-er -rant an/ postpone+ent. Still, petitioner $as directed to secure the services of another counsel if 3tt/. Iral is not available.2% Hith the declaration b/ MalacaVan- that Nove+ber '&, 011% is a special non6$or,in- holida/, the hearin- $as reset to Nove+ber 'A, 011% as previousl/ scheduled.2& On Nove+ber 'A, 011%, 3tt/. Iral appeared but +anifested that he has no $itness available. Over the ob=ection of the prosecution, hearin- $as reset to March '% and '&, 011&. 3tt/. Iral a-reed to sub+it the case for decision on the basis of prosecution evidence in the event that he is unable to present an/ $itness on the aforesaid dates.2AOn March '%, 011&, the S# a-ain reset the hearin- dates to Ma/ 0A and 0), 011& for lac, of +aterial ti+e.2)@o$ever, at the scheduled hearin- on Ma/ 0A, 011&, petitioner +anifested to the court that 3tt/. Iral $as rushed to the hospital havin- suffered a stro,e, thereupon the hearin- $as rescheduled for Septe+ber 0' and 00, 011& $ith a directive for 3tt/. Iral to sub+it a verified +edical certificate. 28 On Septe+ber 00, 011&, 3tt/. Iral appeared but a-ain +anifested that he has no $itness present in court. On the co++it+ent of 3tt/. Iral that if b/ the ne?t hearin- he still fails to present their evidence the court shall consider the+ to have $aived such ri-ht, the hearin- $as reset to Februar/ 8 and (, 011A.2( @o$ever, on Februar/ (, 011A, the defense counsel +anifested that he has so+e other co++it+ent in another division of the S# and hence he is constrained to see, cancellation of the hearin-. Hithout ob=ection fro+ the prosecution and considerin- that the intended $itness $as petitioner hi+self, the S# reset the hearin- to 3pril ') and '8, 011A, $hich dates $ere later +oved to 3u-ust ) and 8, 011A.%1 On 3u-ust ), 011A, over the ob=ection of the prosecution, the S# -ranted the +otion for postpone+ent b/ the defense on the -round of lac, of financial capacit/. The hearin- $as for the last ti+e reset to October ') and '8, 011A, $hich date $as later chan-ed to October '' and '0, 011A.%' On October '', 011A, on +otion of the prosecution, the S# resolved that the cases be sub+itted for decision for failure of the defense to appear and present their evidence, and directed the parties to present their respective +e+oranda $ithin 21 da/s.%0 3s onl/ the prosecution sub+itted a +e+orandu+, the S# declared the cases sub+itted for decision on 3u-ust 0%, 011).%2 Petitioner and his counsel $ere dul/ notified of the pro+ul-ation of decision, ori-inall/ scheduled on Februar/ 08, 0118 but $as +oved to March 0), 0118 in vie$ of the absence of petitioner and the @andlin- Prosecutor.%% On that date, ho$ever, on +otion of 3tt/. Iral, the pro+ul-ation $as postponed to 3pril '%, 0118.%& On 3pril '%, 0118, both petitioner and his counsel failed to appear, but since the notice to petitioner $as sent onl/ on 3pril 2, 0118, the S# finall/ reset the pro+ul-ation of =ud-+ent to Ma/ 0A, 0118.%A Hhile supposedl/ absent durin- the pro+ul-ation, records sho$ed that 3tt/. Iral personall/ received on the sa+e date a cop/ of the decision.%)

The fore-oin- sho$s that the defense $as -ranted a+ple opportunit/ to present their evidence as in fact several postpone+ents $ere +ade on account of 3tt/. Iral9s health condition and petitioner9s lac, of financial resources to cover transportation costs. The S# e?ercised ut+ost lenienc/ and co+passion and even appointed a counsel de oficio $hen petitioner cited lac, of +one/ to pa/ for attorne/9s fee. In those instances $hen either petitioner or his counsel $as present in court, the follo$in- docu+entar/ evidence listed durin- the pre6trial, alle-edl/ in the possession of petitioner, and $hich he undertoo, to present at the trial, $ere never produced in court at an/ ti+e: 4'5 !i>uidation Report b/ petitionerI 405 *ertification of 3ccountant <a+ba !a=aratu of the National *o++ission on Indi-enous People, Re-ion SII, *otabato *it/I and 425 Different *ertifications b/ pro=ect officers and baran-a/ captains.%8 If indeed these docu+ents e?isted, petitioner could have readil/ sub+itted the+ to the court considerin- the len-th of ti+e he $as -iven to do so. The fact that not a sin-le docu+ent $as produced and no $itness $as produced b/ the defense in a span of 9 4,%/s afforded the+ b/ the S#, it can be reasonabl/ inferred that petitioner did not have those evidence in the first place. The ele+ents of +alversation of public funds are: '. 0. 2. that the offender is a public officerI that he had the custod/ or control of funds or propert/ b/ reason of the duties of his officeI that those funds or propert/ $ere public funds or propert/ for $hich he $as accountableI and per+itted another person to ta,e the+.%( There is no dispute on the e?istence of the first three ele+entsI petitioner ad+itted havin- received the cash advances for $hich he is accountable. 3s to the ele+ent of +isappropriation, indeed petitioner failed to rebut thelegal presumption that he had +isappropriated the said public funds to his personal use, not$ithstandin- his unsubstantiated clai+ that he has in his possession li>uidation docu+ents. The S# therefore co++itted neither reversible error nor -rave abuse of discretion in convictin- the petitioner of +alversation for failure to e?plain or account for his cash shorta-e b/ an/ li>uidation or supportin- docu+ents. 3s this *ourt si+ilarl/ ruled in one case&1 : In the cri+e of +alversation, all that is necessar/ for conviction is sufficient proof that the accountable officer had received public funds, that he did not have the+ in his possession $hen de+and therefor $as +ade, and that he could not satisfactoril/ e?plain his failure to do so. Direct evidence of personal +isappropriation b/ the accused is hardl/ necessar/ as lon- as the accused cannot e?plain satisfactoril/ the shorta-e in his accounts. In convictin- petitioner, the Sandi-anba/an cites the presu+ption in 3rticle 0'), supra( of the Revised Penal *ode, i.e.( the failure of a public officer to have dul/ forthco+in- an/ public funds or propert/ $ith $hich he is char-eable, upon de+and b/ an/ dul/ authori;ed officer, is prima facie evidence that he has put such +issinfund or propert/ to personal uses. The presu+ption is, of course, rebuttable. 3ccordin-l/, if the accused is able to present ade>uate evidence that can nullif/ an/ li,elihood that he had put the funds or propert/ to personal use, then that presu+ption $ould be at an end and the prima facie case is effectivel/ ne-ated. This *ourt has repeatedl/ said that $hen the absence of funds is not due to the personal use thereof b/ the accused, the presu+ption is co+pletel/ destro/edI in fact, the presu+ption is never dee+ed to have e?isted at all. In this case, ho$ever, petitioner failed to overco+e this prima facie evidence of -uilt. There is -rave abuse of discretion $here the public respondent acts in a capricious, $hi+sical, arbitrar/ or despotic +anner in the e?ercise of its =ud-+ent as to be e>uivalent to lac, of =urisdiction. The abuse of discretion +ust be so patent and -ross as to a+ount to an evasion of a positive dut/ or a virtual refusal to perfor+ a dut/ en=oined b/ la$, or to act at all in conte+plation of la$ as $here the po$er is e?ercised in an arbitrar/ and despotic +anner b/ reason of passion or hostilit/. &' "nder the facts on record, $e find no -rave abuse of discretion on the part of the S# $hen it sub+itted the case for decision and rendered the =ud-+ent of conviction on the basis of the prosecution evidence after the defense failed to present its evidence despite a+ple opportunit/ to do so. *"ERE!ORE, the petition is D#SM#SSED. The Decision pro+ul-ated on Ma/ 0A, 0118 and Resolution issued on Nove+ber '8, 0118 b/ the Sandi-anba/an in *ri+inal *ase No. 0A20) are A!!#RMED.

4. that he appropriated, too,, +isappropriated or consented or, throu-h abandon+ent or ne-li-ence,

Hith costs a-ainst the petitioner. SO ORD R D. MART#N S. V#LLARAMA, )R. 3ssociate .ustice H *ON*"R: RENATO C. CORONA *hief .ustice *hairperson TERES#TA ). LEONARDO+DE CASTRO 3ssociate .ustice LUCAS P. BERSAM#N 3ssociate .ustice

MAR#ANO C. DEL CAST#LLO 3ssociate .ustice * RTIFI*3TION

Pursuant to Section '2, 3rticle VIII of the '(8) *onstitution, I certif/ that the conclusions in the above Decision had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt9s Division. RENATO C. CORONA *hief .ustice

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Rollo( pp. %86A2. Penned b/ 3ssociate .ustice dilberto 7. Sandoval $ith 3ssociate .ustices Teresita V. Dia;6#aldos and Sa+uel R. Martires concurrin-.
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Id. at A%. Id. at )).

Id. at 8%68&, (' and (&I ?hibits U3,U U#,U UMU to UM60,U UN,U For+al Offer of vidence 4Prosecution5.
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Id. at (&6(), '106'12, '1&6'1A, '186'1( and '''6''0. Id. at (&. ?hibits UNU and U!,U For+al Offer of vidence 4Prosecution5. ?hibits UD60U to UD6&,U U 60,U UF60 ,U U760U and U@60,U id. ?hibit U*,U id. ?hibits UIU and U.,U id.

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Rollo( p. )1. TSN, Ma/ 00, 0110, pp. &6'(. TSN, .ul/ %, 0110, pp. 2162%. Rollo( pp. A16A'. Id. at &86&(. Id. at ')6'8.

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Revisin- Presidential Decree No. '%8A *reatin- a Special *ourt to be Nno$n as USandi-anba/anU and for Other Purposes.
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*eople v. "andigan)a'an( 7.R. No. '&A2(%, .anuar/ 0', 011&, %%( S*R3 01&, 0'A. Id.

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See +amilano v. Cuevas( No. !622A&%, .ul/ 02, '(8), '&0 S*R3 '&8, 'A'6'A0, citin- -.". v. ,imeno( 2 Phil. 022, 02%.
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S# records 4*ri+. *ase No. 0A20)5, p. 0%0. Id. at 0&1. Id. at 0&(. Id. at 0A&. Id. at 0)2. Id. at 080608). Id. at 0(%60(A. Id. at 0(). Id. at 0(8. Id. at 21%. Id. at 21(62''. Id. at 2'2. Id. at 201. Id. at 200. Id. at 208. Id. at 221.

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Id. at 2%1. Id. at 2%A63. Id. at 2A0. Id. at 2)1, 2)). Id. at 280, 28A. Id. at 2('. Id. at %%'. Id. at %&1. Id. at %&8. Id. at %AA. Id. at %8( 4bac,5. Rollo( p. )&. #campo 666 v. *eople( 7.R. Nos. '&A&%)6&', Februar/ %, 0118, &%2 S*R3 %8), &1&6&1A. .avalos( "r. v. *eople( 7.R. No. '%&00(, 3pril 0%, 011A, %88 S*R3 8%, (06(2. *eople v. "andigan)a'an, supra note '8, at 0'8. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

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G.R. No. 16810-

)u:4 27, 2011

LAND BAN O! T"E P"#L#PP#NES, Petitioner, vs. SEVER#NO L#STANA, Respondent. D V#LLARAMA, )R., J.: #efore us is a petition for revie$ on certiorari under Rule %& $hich see,s to set aside the Decision' dated Nove+ber '0, 011% and Resolution0 dated Ma/ '', 011& of the *ourt of 3ppeals 4*35 in *367.R. *V No. )1()(. The *3 affir+ed the Order2 dated October 0&, 0111 of the Re-ional Trial *ourt 4RT*5 of Sorso-on, Sorso-on, #ranch &0, sittin- as a Special 3-rarian *ourt, in *ivil *ase No. ((6AA2( dis+issin- the petition for deter+ination of =ust co+pensation on the -round of late filin-. Respondent Severino !istana is the o$ner of a 0%A.1&A'6hectare land located at Inla-adian, *asi-uran, Sorso-on and covered b/ Transfer *ertificate of Title 4T*T5 No. T601'(2. The land $as voluntaril/ offered for *ISION

sale to the -overn+ent under the *o+prehensive 3-rarian Refor+ Pro-ra+ 4*3RP5 pursuant to Republic 3ct 4R.3.5 No. AA&). Petitioner !and #an, of the Philippines 4!#P5 valued the 0%1.(1AA hectares for ac>uisition at P&,8)',A8(.12. Since the respondent re=ected the said a+ount, a su++ar/ proceedin- for deter+ination of =ust co+pensation $as conducted b/ the Depart+ent of 3-rarian Refor+ 4D3R5. On Ma/ 0, '((A, respondent $rote !#P Depart+ent Mana-er III, n-r. 3le? 3. !ora/es, re>uestin- the release of pa/+ent of the cash portion of the Uaccepted ? ? ? '&'.'%'( has. $ith an e>uivalent valuation of P&,A1),8)%.A(.U *onse>uentl/, on Ma/ ), '((A, a Deed of Transfer $as e?ecuted b/ respondent over the said portion of his landholdin- in consideration of pa/+ent received fro+ the transferee Republic of the Philippines consistin- of cash 4P',1)8,8)).&%5 and !#P bonds 4P0,)%),8&8.A15.% On October '%, '((8, D3R Provincial 3d=udicator Manuel M. *apellan rendered a decision& fi?in- the a+ount of =ust co+pensation at P'1,(&A,(A2.0& for the entire ac>uired area of 0%1.(1AA hectares. *op/ of the said decision $as received b/ petitioner on October 0), '((8. 3l+ost a /ear later, or on Septe+ber A, '(((, petitioner filed before the RT* of Sorso-on, Sorso-on, #ranch &0, a petitionAC for =udicial deter+ination of =ust co+pensation 4*ivil *ase No. ((6AA2(5. Petitioner ar-ued that the P3R3D9s valuation is unacceptable and that the initial valuation of P&,8)',A8(.12 for the 0%1.(1AA hectares is in accordance $ith Section ') of R.3. No. AA&) and D3R 3d+inistrative Order No. '', series of '((%, as a+ended b/ D3R 3O No. &, series of '((8. Respondent filed a +otion to dis+iss) contendin- that the lando$ner9s acceptance of the D3R9s valuation resulted in a bindin- contract and therefore constitutes res =udicata as it is in the nature of a co+pro+ise a-ree+ent that has attained finalit/. Respondent also cited the conte+pt proceedin-s a-ainst the !#P for its refusal to co+pl/ $ith the $rit of e?ecution issued b/ the Provincial 3-rarian Refor+ 3d=udicator9s 4P3R3D9s5 Office on .une '8, '(((. The +atter of conte+pt proceedin-s $as the sub=ect of 7.R. No. '&0A'' 4!and #an, of the Philippines v. !istana, Sr.5. The P3R3D had issued on 3u-ust 01, 0111 an order -rantin- respondent9s +otion for conte+pt and !#P Mana-er 3le? 3. !ora/es $as cited for indirect conte+pt and ordered to be i+prisoned until he co+plied $ith the P3R3D9s October '%, '((8 decision. 3fter its +otion for reconsideration $as denied, petitioner filed a Notice of 3ppeal $hich $as li,e$ise denied due course b/ P3R3D *apellan $ho also ordered the issuance of an alias Hrit of ?ecution for the pa/+ent of the ad=ud-ed a+ount of =ust co+pensation and subse>uentl/ directed the issuance of an arrest order a-ainst !ora/es. Petitioner then filed $ith the RT* a petition for in=unction $ith application for the issuance of a $rit of preli+inar/ in=unction to restrain P3R3D *apellan fro+ issuin- the order of arrest. 3 $rit of preli+inar/ in=unction $as eventuall/ issued b/ the trial court and !#P posted a P&,A%%,))2.10 cash bond. Respondent $ent to the *3 and challen-ed said $rit via a special civil action for certiorari 4*367.R. SP No. A&0)A5. On Dece+ber '', 011', the *3 rendered its decision nullif/in- the trial court9s orders. In our Decision dated 3u-ust &, 0112, $e -ranted the petition filed b/ !#P and reinstated the .anuar/ 0(, 011' Order of the RT* of Sorso-on, Sorso-on, #ranch &' $hich en=oined the P3R3D fro+ enforcin- its order of arrest a-ainst !ora/es pendin- the final ter+ination of *ivil *ase No. ((6 AA2( of RT* #ranch &0.8 Petitioner filed its opposition to the +otion to dis+iss,( ar-uin- that the filin- of petition $ith S3* is not an appeal fro+ the decision of the P3R3D $hich is dee+ed vacated upon filin- of the case before the S3*I hence res =udicata cannot be applied. It stressed that the deter+ination of =ust co+pensation is inherentl/ =udicial in nature. There bein- no speed/ and ade>uate re+ed/ in the ordinar/ course of la$, petitioner averred that unless it is authori;ed to file this case it cannot protect the interest of the -overn+ent $ho is the o$ner of the 3-rarian Refor+ Fund. In an 3+ended Petition,'1 petitioner additionall/ alle-ed the fact that respondent had alread/ accepted the valuation of the cocoland portion 4'&'.'%'( hectares5 in the a+ount of P&,2'0,'(1.02I that pa/+ent therefor had been received b/ respondentI and that a Deed of Transfer of the said portion had been e?ecuted in favor of the -overn+ent $hich $as notari;ed on Ma/ ), '((A and re-istered $ith the Re-istr/ of Deeds. Petitioner thus asserted that the valuation and co+pensation process insofar as the '&'.'%'(6hectare portion, should no$ be considered ter+inated. Respondent, on his part, contended that b/ brin-in- the >uestion of valuation before the

court, petitioner is estopped fro+ assertin- that such issue had alread/ been laid to rest $ith the alle-ed acceptance b/ respondent of the prior valuation.'' On 3pril 08, 0111, the trial court denied the +otion to dis+iss. In his 3ns$er,'0 the respondent asserted that petitioner, bein- part of the ad+inistrative +achiner/ char-ed under the la$ to deter+ine the -overn+ent land valuationFco+pensation offer is bound b/ the co+pensation fi?ed b/ the D3R3#. @ence, respondent9s acceptance of such offered co+pensation resulted in a bindincontract, especiall/ under the Voluntar/ Offer to Sell 4VOS5 sche+e. The P3R3D9s decision therefore constitutes res =udicata as it is, in effect, a =ud-+ent upon a co+pro+ise. Respondent also filed a +otion for reconsideration of the order den/in- his +otion to dis+iss. On October 0&, 0111, the trial court issued the order'2 -rantin- respondent9s +otion for reconsideration and dis+issin- the petition for havin- been filed al+ost one /ear fro+ receipt of the cop/ of the P3R3D9s decision. Petitioner filed a +otion for reconsideration'% alle-in- that it had filed a +otion for reconsideration fro+ the P3R3D9s decision dated October '%, '((8 but the order den/in- said +otion $as received onl/ on Ma/ '0, '(((. It further averred that the cause of dela/ $as not solel/ attributable to it but also to the respondent throu-h his counsel Ubecause there $as a +anifestation on their part to settle this case a+icabl/.U Petitioner stressed that $hile there $as reall/ a late filin-, it $as done in -ood faith and $ithout an/ intent to pre=udice an/ person. Invo,in- a liberal construction of procedural rules, petitioner ar-ued that it is $ithout an/ speed/ and ade>uate re+ed/ in this case, $hich is necessar/ for the protection of the -overn+ent9s interest. In its Order dated March 0), 011', the trial court denied petitioner9s +otion for reconsideration. *op/ of the said order $as received b/ petitioner on 3pril A, 011' and on the sa+e date it filed a notice of appeal. '& In its +e+orandu+, petitioner ar-ued that on the +atter of its late filin- of the petition for =udicial deter+ination of =ust co+pensation, the trial court should have -iven pri+ac/ to the ver/ clear de+ands of substantial =ustice over the ri-id application of technicalities. It cited Section &) of R.3. No. AA&) allo$in- a part/ to brin- the issue of valuation of lands ac>uired b/ virtue of *3RP to the Special 3-rarian *ourts, $hich should be liberall/ construed to afford !#P the a+plest opportunit/ to prove that its valuation pertainin- to the re+ainin- portion of 8(.'%'( hectares of the sub=ect landholdin- is in accordance $ith the le-all/ prescribed for+ula spelled out in D3R 3O No. &, series of '((8. Moreover, the -overn+ent has not acceded to the alteration of the valuation pertainin- to the '&'.'%'( hectares, to $hich both the lando$ner and -overn+ent -ave their consent, $hich had beco+e a perfected contract havin- the force of la$ bet$een the parties.'A In the +eanti+e, follo$in- this *ourt9s rulin- in !and #an, of the Philippines v. !istana, Sr. 4supra5 $hich voided all conte+pt proceedin-s a-ainst !#P Mana-er !ora/es, petitioner filed $ith the RT* a +otion to $ithdra$ theP&,A%%,))2.10 cash bond. The RT* denied the +otion and petitioner9s +otion for reconsideration $as li,e$ise denied. Petitioner challen-ed the trial court9s order before the *3 $hich eventuall/ dis+issed the petition. Hhen the case $as elevated to this *ourt, $e affir+ed the *3 and sustained the RT*9s orders den/in!#P9s +otion to $ithdra$ the cash bond. #/ Decision dated Ma/ 21, 01'', $e ruled that !#P cannot $ithdra$ the P&,A%%,))2.10 cash bond $hich is a condition for the issuance of the $rit of preli+inar/ in=unction issued b/ the RT* en=oinin- the P3R3D fro+ i+ple+entin- the $arrant of arrest a-ainst Mana-er !ora/es pendinfinal deter+ination of the a+ount of =ust co+pensation for the propert/. ') #/ Decision dated Nove+ber '0, 011%, the *3 dis+issed petitioner9s appeal fro+ the S3*9s dis+issal of its petition for =udicial deter+ination of =ust co+pensation. The *3 said that petitioner failed to ade>uatel/ e?plain its failure to abide b/ the rules and Uits loss of appellate recourse cannot be revived b/ invo,in- the +antra of liberalit/.U He >uote the pertinent portion of the appellate court9s rulin-: The ar-u+ent of !istana that he re=ected the pricin- for the entire area and that the Re>uest to Open a Trust Fund ? ? ? is proof of his refusal, is un+eritorious. If indeed !istana re=ected the entire valuation then he $ould not have e?ecuted a Deed of Transfer of "nse-re-ated Portion of a Parcel of !and ? ? ? coverin- the &'.'%'( BsicC hectares. Said docu+ent is not onl/ valid and bindin- but also reflects the true intention of the parties and is ath$art the clai+ of !istana that he re=ected the valuation of this portion of the propert/.

The P3R3# in the su++ar/ proceedin- it conducted to deter+ine the land valuation, should not have included in its deter+ination of =ust co+pensation the accepted portion but should have li+ited the scope to onl/ the re=ected portion of 8(.)A%) hectares. *12:, t1,/, 2s t1us goo' 5%us, to s,,> /,5ou/s, %g%2&st t1, PARAB /u:2&g, L%&' B%&> too> t12s %00,%: 117 '%4s :%t,/ %&' t1us 3,4o&' t1, =2=t,,& A1-B '%4 0,/2o' 0/o@2',' 34 Ru:, 8### S,5. 11 o= t1, DARAB Ru:,s o= P/o5,'u/,. !and #an, clai+s the court a >uo $as $ron- in sa/in- that it $as late for less than one /ear for it $as tard/ onl/ for '01 da/s b/ its rec,onin-. #ut $hether it is one or the other, the fact is it $as late for a considerable ti+e and cannot be absolved b/ the poor e?cuse that there $as a prospect for an a+icable settle+ent. Rudi+entar/ prudence dictated that appellate recourse should have been ti+el/ ta,en instead of =ust rel/in- $ith crossed fin-ers that settle+ent $ould co+e about.'8 4 +phasis supplied.5 Petitioner9s +otion for reconsideration $as li,e$ise denied b/ the *3. @ence, this petition alle-in- that the *3 co++itted serious errors of la$, as follo$s: 3. T@ D3R3# ORD R D3T D '% O*TO# R '((8 H@I*@ 3!! 7 D!J # *3M FIN3! 3ND S *"TORJ *3NNOT 3#RO73T OR R ND R HIT@O"T FF *T 3 *ONS"MM3T D *ONTR3*T INVO!VIN7 T@ 7OV RNM NT 3ND R SPOND NT !IST3N3 R !3TIV TO '&'.'%'( @ *T3R S OF S"#. *T PROP RTJ. # IN7 IMM"T3#! , T@ *ONS"MM3T D *ONTR3*T *3N NO !ON7 R # DIST"R# D OR 3#RO73T D #J T@ D3R3# ORD R D3T D '% O*TO# R '((8, H@I*@ T@ *O"RT 3 K"O 3ND T@ *O"RT OF 3PP 3!S RRON O"S!J 3FFIRM D. #. T@ *@3!! N7 D D *ISION 3ND T@ K" STION D R SO!"TION P!3* SO M"*@ PR MI"M ON 3 PRO* D"R3! R"! 3T T@ SP NS OF S"#ST3NTI3! ."STI* , 3 *IR*"MST3N* T@3T @3S "NN * SS3RI!J P"T 3 *O!OR OF V3!IDITJ TO T@ D3R3# ORD R H@I*@ IS VOID 3# INITIO 3S IT "TT R!J DISR 73RD D S *TION ') OF R.3. NO. AA&) 3ND T@ S"PR M *O"RT R"!IN7 IN U!#P vs. SPO"S S #3N3!,U 47.R. NO. '%20)A, 01 ."!J 011%5.'( The sole issue to be resolved is $hether the S3* +a/ ta,e co-ni;ance of the petition for deter+ination of =ust co+pensation $hich is filed be/ond the prescribed '&6da/ period or +ore than '11 da/s after the P3R3D rendered its valuation in a su++ar/ ad+inistrative proceedin-. The valuation of propert/ in e?propriation cases pursuant to R.3. No. AA&) or the *o+prehensive 3-rarian Refor+ !a$, is essentiall/ a =udicial function $hich is vested in the RT* actin- as Special 3-rarian *ourt and cannot be lod-ed $ith ad+inistrative a-encies such as the D3R.01 Section &) of said la$ e?plicitl/ states that: S *. &). Special .urisdiction. M The Special 3-rarian *ourts shall have ori-inal and e?clusive =urisdiction over all petitions for the deter+ination of =ust co+pensation to lando$ners, and the prosecution of all cri+inal offenses under this 3ct. The Rules of *ourt shall appl/ to all proceedin-s before the Special 3-rarian *ourts, unless +odified b/ this 3ct. The Special 3-rarian *ourt shall decide all appropriate cases under their special =urisdiction $ithin thirt/ 4215 da/s fro+ sub+ission of the case for decision. The *3 affir+ed the S3*9s order of dis+issal appl/in- Section '', Rule SIII of the '((% D3R3# Rules of Procedure $hich provides that: Section ''. Land $aluation and *reliminar' .etermination and *a'ment of +ust Compensation. 66 The decision of the 3d=udicator on land valuation and preli+inar/ deter+ination and pa/+ent of =ust co+pensation shall not be appealable to the #oard but shall be brou-ht directl/ to the Re-ional Trial *ourts desi-nated as Special 3-rarian *ourts $ithin fifteen 4'&5 da/s fro+ notice thereof. 3n/ part/ shall be entitled to onl/ one +otion for reconsideration. 4 +phasis supplied.5

Petitioner ad+its the late filin- of an action $ith the S3* but nonetheless ar-ue that the serious errors co++itted b/ the P3R3D $hen it included the '&'.'%'( hectares 66 despite the initial valuation offered b/ !#P havin- been alread/ accepted b/ respondent $ho alread/ conve/ed said portion to the -overn+ent 66 in its decision fi?in- =ust co+pensation, and non6application of the for+ula provided in Section ') of R.3. No. AA&) and D3R 3O No. '', series of '((%, as a+ended b/ D3R 3O No. &, series of '((8 on the re+ainin- 8(.'%'( hectares, $arrants a revie$ b/ this *ourt. It contends that this case deserves a rela?ation of the procedural rule -overnin- finalit/ of =ud-+ents, addin- that its Uthou-htlessnessU should not be dee+ed fatal to the instant petition Ufor at sta,e is an OV RP3JM NT a+ountin- to +ore than S V N MI!!ION P SOS, $hich is 7R 3T!J PR ."DI*I3! to public interest, as the said a+ount shall be debited fro+ the 3-rarian Refor+ Fund 43RF5.U The petition is un+eritorious. In Republic v. *ourt of 3ppeals,0' private respondent lando$ner re=ected the -overn+ent9s offer of its lands based on !#P9s valuation and the case $as brou-ht before the P3R3D $hich sustained !#P9s valuation. Private respondent then filed a Petition for .ust *o+pensation in the RT* sittin- as Special 3-rarian *ourt. @o$ever, the RT* dis+issed its petition on the -round that private respondent should have appealed to the D3R3#, in accordance $ith the then D3R3# Rules of Procedure. 3dditionall/, the RT* found that the petition had been filed +ore than fifteen da/s after notice of the P3R3D decision. Private respondent then filed a petition for certiorari in the *3 $hich reversed the order of dis+issal of RT* and re+anded the case to the RT* for further proceedin-s. The -overn+ent challen-ed the *3 rulin- before this *ourt via a petition for revie$ on certiorari. This *ourt, affir+in- the *3, ruled as follo$s: Thus, under the la$, the !and #an, of the Philippines is char-ed $ith the initial responsibilit/ of deter+ininthe value of lands placed under land refor+ and the co+pensation to be paid for their ta,in-. Throu-h notice sent to the lando$ner pursuant to \'A4a5 of R.3. No. AA&), the D3R +a,es an offer. In case the lando$ner re=ects the offer, a su++ar/ ad+inistrative proceedin- is held and after$ard the provincial 4P3R3D5, the re-ional 4R3R3D5 or the central 4D3R3#5 ad=udicator as the case +a/ be, dependin- on the value of the land, fi?es the price to be paid for the land. If the lando$ner does not a-ree to the price fi?ed, he +a/ brin- the +atter to the RT* actin- as Special 3-rarian *ourt. This in essence is the procedure for the deter+ination of co+pensation cases under R.3. No. AA&). In accordance $ith it, the private respondent9s case $as properl/ brou-ht b/ it in the RT*, and it $as error for the latter court to have dis+issed the case. In the ter+inolo-/ of \&), the RT*, sittin- as Special 3-rarian *ourt, has Uori-inal and e?clusive =urisdiction over all petitions for the deter+ination of =ust co+pensation to lando$ners.U It $ould subvert this Uori-inal and e?clusiveU =urisdiction of the RT* for the D3R to vest ori-inal =urisdiction in co+pensation cases in ad+inistrative officials and +a,e the RT* an appellate court for the revie$ of ad+inistrative decisions. *onse>uentl/, althou-h the ne$ rules spea, of directl/ appealin- the decision of ad=udicators to the RT*s sittin- as Special 3-rarian *ourts, 2t 2s 5:,%/ =/o6 K-7 t1%t t1, o/2g2&%: %&' ,<5:us2@, Gu/2s'25t2o& to ',t,/62&, su51 5%s,s 2s 2& t1, RTCs. A&4 ,==o/t to t/%&s=,/ su51 Gu/2s'25t2o& to t1, %'Gu'25%to/s %&' to 5o&@,/t t1, o/2g2&%: Gu/2s'25t2o& o= t1, RTCs 2&to %00,::%t, Gu/2s'25t2o& Cou:' 3, 5o&t/%/4 to K-7 %&' t1,/,=o/, Cou:' 3, @o2'. Hhat ad=udicators are e+po$ered to do is onl/ to deter+ine in a preli+inar/ +anner the reasonable co+pensation to be paid to lando$ners, leavin- to the courts the ulti+ate po$er to decide this >uestion.00 4 +phasis supplied.5 The above rulin- $as reiterated in Philippine Veterans #an, v. *ourt of 3ppeals.02 In that case, petitioner lando$ner $ho $as dissatisfied $ith the valuation +ade b/ !#P and D3R3#, filed a petition for deter+ination of =ust co+pensation in the RT* 4S3*5. @o$ever, the RT* dis+issed the petition on the -round that it $as filed be/ond the '&6da/ re-le+entar/ period for filin- appeals fro+ the orders of the D3R3#. On appeal, the *3 upheld the order of dis+issal. Hhen the case $as elevated to this *ourt, $e li,e$ise affir+ed the *3 and declared that: To i+ple+ent the provisions of R.3. No. AA&), particularl/ \&1 thereof, Rule SIII, \'' of the D3R3# Rules of Procedure provides: !and Valuation and Preli+inar/ Deter+ination and Pa/+ent of .ust *o+pensation. 66 The decision of the 3d=udicator on land valuation and preli+inar/ deter+ination and pa/+ent of =ust co+pensation shall not be appealable to the #oard but shall be brou-ht directl/ to the Re-ional Trial *ourts desi-nated as Special 3-rarian

*ourts $ithin fifteen 4'&5 da/s fro+ receipt of the notice thereof. 3n/ part/ shall be entitled to onl/ one +otion for reconsideration. 3s $e held in Republic v. *ourt of 3ppeals, this rule is an ac,no$led-+ent b/ the D3R3# that the po$er to decide =ust co+pensation cases for the ta,in- of lands under R.3. No. AA&) is vested in the courts. It is error to thin, that, because of Rule SIII, \'', the ori-inal and e?clusive =urisdiction -iven to the courts to decide petitions for deter+ination of =ust co+pensation has thereb/ been transfor+ed into an appellate =urisdiction. It onl/ +eans that, in accordance $ith settled principles of ad+inistrative la$, pri+ar/ =urisdiction is vested in the D3R as an ad+inistrative a-enc/ to deter+ine in a preli+inar/ +anner the reasonable co+pensation to be paid for the lands ta,en under the *o+prehensive 3-rarian Refor+ Pro-ra+, but such deter+ination is sub=ect to challen-e in the courts. T1, Gu/2s'25t2o& o= t1, R,g2o&%: T/2%: Cou/ts 2s &ot %&4 :,ss ;o/2g2&%: %&' ,<5:us2@,; 3,5%us, t1, Fu,st2o& 2s =2/st 0%ss,' u0o& 34 t1, DAR, %s t1, Gu'252%: 0/o5,,'2&gs %/, &ot % 5o&t2&u%t2o& o= t1, %'62&2st/%t2@, ',t,/62&%t2o&. For that +atter, the la$ +a/ provide that the decision of the D3R is final and unappealable. Nevertheless, resort to the courts cannot be foreclosed on the theor/ that courts are the -uarantors of the le-alit/ of the ad+inistrative action. 3ccordin-l/, as the petition in the Re-ional Trial *ourt $as filed be/ond the '&6da/ period provided in Rule SIII, \'' of the Rules of Procedure of the D3R3#, the trial court correctl/ dis+issed the case and the *ourt of 3ppeals correctl/ affir+ed the order of dis+issal.0% 4 +phasis supplied.5 The *ourt noted that Republic v. *ourt of 3ppeals does not serve as authorit/ for disre-ardin- the '&6da/ period to brin- an action for =udicial deter+ination of =ust co+pensation as there $as no pronounce+ent therein invalidatin- Rule SIII, Section '' of the Ne$ Rules of Procedure of the D3R3#. Moreover, $e stated that an/ speculation as to the applicabilit/ of said provision $as foreclosed b/ our subse>uent rulin- in Philippine Veterans #an, 4supra5 $here $e affir+ed the order of dis+issal of a petition for deter+ination of =ust co+pensation for havin- been filed be/ond the fifteen6da/ period under Section ''.0& @o$ever, in the 011) case of !and #an, of the Philippines v. Sunta/, 0A the *ourt ruled that the RT* erred in dis+issin- !#P9s petition for deter+ination of =ust co+pensation on the -round that it $as filed be/ond the fifteen6da/ period provided in Section '', Rule SIII of the D3R3# Ne$ Rules of Procedure. *itin- Republic v. *ourt of 3ppeals 4supra5, $e stressed therein the ori-inal and e?clusive 66 not appellate 66 =urisdiction of the S3* over all petitions for the deter+ination of =ust co+pensation to lando$ners. 0) To foreclose an/ uncertaint/ brou-ht b/ the Sunta/ rulin-, this *ourt in its .ul/ 2', 0118 Resolution den/in!#P9s +otion for reconsideration of the 3u-ust '%, 011) Decision in the case of !and #an, of the Philippines v. Martine;08 held: On the supposedl/ conflictin- pronounce+ents in the cited decisions, the *ourt reiterates its rulin- in this case that the a-rarian refor+ ad=udicator9s decision on land valuation attains finalit/ after the lapse of the '&6da/ period stated in the D3R3# Rules. The petition for the fi?in- of =ust co+pensation should therefore, follo$inthe la$ and settled =urisprudence, be filed $ith the S3* $ithin the said period. This conclusion, as alread/ e?plained in the assailed decision, is based on the doctrines laid do$n in Philippine Veterans #an, v. *ourt of 3ppeals and Depart+ent of 3-rarian Refor+ 3d=udication #oard v. !ubrica. ???? The *ourt notes that the Sunta/ rulin- is based on Republic of the Philippines v. *ourt of 3ppeals, decided in '((A also throu-h the pen of .ustice Vicente V. Mendo;a. In that case, the *ourt e+phasi;ed that the =urisdiction of the S3* is ori-inal and e?clusive, not appellate. Republic, ho$ever, $as decided at a ti+e $hen Rule SIII, Section '' $as not /et present in the D3R3# Rules. Further, Republic did not discuss $hether the petition filed therein for the fi?in- of =ust co+pensation $as filed out of ti+e or not. The *ourt +erel/ decided the issue of $hether cases involvin- =ust co+pensation should first be appealed to the D3R3# before the lando$ner can resort to the S3* under Section &) of R.3. No. AA&). To resolve the conflict in the rulin-s of the *ourt, $e no$ declare herein, for the -uidance of the bench and the bar, that the better rule is that stated in Philippine Veterans #an,, reiterated in !ubrica and in the 3u-ust '%,

011) Decision in this case. Thus, $hile a petition for the fi?in- of =ust co+pensation $ith the S3* is not an appeal fro+ the a-rarian refor+ ad=udicator9s decision but an ori-inal action, the sa+e has to be filed $ithin the '&6da/ period stated in the D3R3# RulesI other$ise, the ad=udicator9s decision $ill attain finalit/. This rule is not onl/ in accord $ith la$ and settled =urisprudence but also $ith the principles of =ustice and e>uit/. Veril/, a belated petition before the S3*, e.g., one filed a +onth, or a /ear, or even a decade after the land valuation of the D3R ad=udicator, +ust not leave the dispossessed lando$ner in a state of uncertaint/ as to the true value of his propert/. 0( 4 +phasis supplied.5 Petitioner9s action before the S3* havin- been filed, b/ its o$n rec,onin-, '') da/s after notice of the P3R3D9s denial of its +otion for reconsideration of the decision fi?in- the =ust co+pensation for respondent9s landholdin-, the sa+e has attained finalit/. 3nent petitioner9s plea of liberalit/ and rela?ation of procedural rules, it is contended that in the interest of substantial =ustice, the +atter of overpa/+ent $hich is -reatl/ pre=udicial to the a-rarian refor+ fund +ust be addressed b/ this *ourt not$ithstandin- petitioner9s Uthou-htlessnessU in the tard/ filin- of its case before the RT*. In the +ore recent case of !and #an, of the Philippines v. "+andap,21 the *ourt, in a decision penned b/ 3ssociate .ustice Teresita !eonardo6De *astro, set aside the *39s a+ended decision affir+in- the RT*9s order dis+issin- the petition for =udicial deter+ination of =ust co+pensation $hich $as re6filed be/ond the '&6da/ period provided in Section '', Rule SIII of the '((% D3R3# Rules of Procedure. 3fter !#P9s initial valuation of the lando$ners9 propert/ $as re=ected, a su++ar/ ad+inistrative proceedin- $as conducted b/ the D3R9s Re-ional 3-rarian Refor+ 3d=udicator 4R3R3D5. Dissatisfied $ith the valuation fi?ed b/ the R3R3D, !#P ti+el/ filed a petition for =udicial deter+ination of =ust co+pensation before the RT*. The RT* dis+issed the petition on the -round that !#P failed to sub+it a proper certification a-ainst foru+ shoppin-. !#P i++ediatel/ filed a +otion for reconsideration attachin- thereto a certification si-ned b/ its !#P President confir+in- the authorit/ of its re-ional operation +ana-er to si-n the verification and certification a-ainst foru+ shoppin-. The RT*, ho$ever, denied the +otion for reconsideration, and the order of denial $as received b/ !#P on Ma/ 0(, 0112. On .une 2, 0112, !#P re6filed the petition attachin- +ore docu+ents sho$in- the authorit/ of its re-ional operation +ana-er to si-n the verification and certification a-ainst foru+ shoppin-. The RT* still dis+issed the petition, rulin- that even thou-h the previous dis+issal $as $ithout pre=udice, !#P nevertheless failed to re6file the petition $ithin the period allo$ed b/ the D3R3# Rules of Procedure, and thus, the 3d=udicator9s decision fi?in- the =ust co+pensation of the sub=ect propert/ attained finalit/. !#P filed a petition for certiorari in the *3 $hich initiall/ reversed and nullified the RT*9s orders. Respondent lando$ners filed a +otion for reconsideration and subse>uentl/ the *3 rendered an 3+ended Decision dis+issin- !#P9s petition and holdinthat certiorari is not the proper re+ed/ since the RT* order dis+issin- the re6filed petition $as a final order and based on res =udicata, hence certiorari is not the proper re+ed/. In a petition for revie$ on certiorari, !#P assailed the *39s a+ended decision dis+issin- its petition for certiorari. The *ourt noted that at the core of the controvers/ is a =urisdictional issue, that is, $hether the S3* acted $ithout =urisdiction in outri-htl/ dis+issin- the petition for the deter+ination of =ust co+pensation. The *ourt declared that since the S3* statutoril/ e?ercises ori-inal and e?clusive =urisdiction over all petitions for deter+ination of =ust co+pensation to lando$ners, it cannot be said that the decision of the ad=udicator, if not appealed to the S3*, $ould be dee+ed final and e?ecutor/, under all circu+stances. *itin- Philippine Veterans #an, v. *ourt of 3ppeals 4supra5 $hich affir+ed the order of dis+issal of a petition for deter+ination of =ust co+pensation for havin- been filed be/ond the said period and e?plained that Section '' is not inco+patible $ith the ori-inal and e?clusive =urisdiction of the S3*, $e held: Not$ithstandin- this pronounce+ent, ho$ever, the statutoril/ +andated ori-inal and e?clusive =urisdiction of the S3* led this *ourt to adopt, over the /ears, a polic/ of liberall/ allo$in- petitions for deter+ination of =ust co+pensation, even thou-h the procedure under D3R3# rules have not been strictl/ follo$ed, $henever circu+stances so $arrant: '. In the '((( case of !and #an, of the Philippines v. *ourt of 3ppeals, $e held that the S3* properl/ ac>uired =urisdiction over the petition to deter+ine =ust co+pensation filed b/ the lando$ner $ithout $aitin- for the co+pletion of D3R3#9s re6evaluation of the land.

0. In the 011% case of !and #an, of the Philippines v. H/coco, $e allo$ed a direct resort to the S3* even $here no su++ar/ ad+inistrative proceedin-s have been held before the D3R3#. 2. In the 011A case of !and #an, of the Philippines v. *elada, this *ourt upheld the =urisdiction of the S3* despite the pendenc/ of ad+inistrative proceedin-s before the D3R3#. He held: It $ould be $ell to e+phasi;e that the ta,in- of propert/ under R3 No. AA&) is an e?ercise of the po$er of e+inent do+ain b/ the State. The valuation of propert/ or deter+ination of =ust co+pensation in e+inent do+ain proceedin-s is essentiall/ a =udicial function $hich is vested $ith the courts and not $ith ad+inistrative a-encies. *onse>uentl/, the S3* properl/ too, co-ni;ance of respondent9s petition for deter+ination of =ust co+pensation. %. In the 011( case of !and #an, of the Philippines v. #elista, this *ourt per+itted a direct recourse to the S3* $ithout an inter+ediate appeal to the D3R3# as +andated under the ne$ provision in the 0112 D3R3# Rules of Procedure. He ruled: 3lthou-h Section &, Rule SIS of the 0112 D3R3# Rules of Procedure provides that the land valuation cases decided b/ the ad=udicator are no$ appealable to the #oard, such rule could not chan-e the clear i+port of Section &) of R3 No. AA&) that the ori-inal and e?clusive =urisdiction to deter+ine =ust co+pensation is in the RT*. Thus, Section &) authori;es direct resort to the S3* in cases involvin- petitions for the deter+ination of =ust co+pensation. In accordance $ith the said Section &), petitioner properl/ filed the petition before the RT* and, hence, the RT* erred in dis+issin- the case. .urisdiction over the sub=ect +atter is conferred b/ la$. Onl/ a statute can confer =urisdiction on courts and ad+inistrative a-encies $hile rules of procedure cannot. In the case at bar, the refilin- of the Petition for .udicial Deter+ination of .ust *o+pensation $as done $ithin five da/s fro+ the denial of the Motion for Reconsideration of the order dis+issin- the ori-inal petition, durin$hich ti+e said dis+issal could still be appealed to the *ourt of 3ppeals. The S3* even e?pressl/ reco-ni;ed that the rules are silent as re-ards the period $ithin $hich a co+plaint dis+issed $ithout pre=udice +a/ be refiled. T1, st%tuto/2:4 6%&'%t,' o/2g2&%: %&' ,<5:us2@, Gu/2s'25t2o& o= t1, SAC, %s C,:: %s t1, %3o@, 52/5u6st%&5,s s1oC2&g t1%t LBP '2' &ot %00,%/ to 1%@, 3,,& s:,,02&g o& 2ts /2g1ts 2& t1, %::,g,':4 3,:%t,' /,=2:2&g o= t1, 0,t2t2o&, :,%' us to %ssu6, % :23,/%: 5o&st/u5t2o& o= t1, 0,/t2&,&t /u:,s. To 3, su/,, LBPHs 2&t,&t to Fu,st2o& t1, RARADHs @%:u%t2o& o= t1, :%&' 3,5%6, ,@2',&t C2t1 t1, =2:2&g o= t1, =2/st 0,t2t2o& =o/ ',t,/62&%t2o& o= Gust 5o60,&s%t2o& C2t12& t1, 0,/2o' 0/,s5/23,' 34 t1, DARAB Ru:,s. A:t1oug1 t1, =2/st 0,t2t2o& C%s '2s62ss,' C2t1out 0/,Gu'25, o& % t,51&25%:2t4, LBPHs /,=2:2&g o= ,ss,&t2%::4 t1, s%6, 0,t2t2o& C2t1 % 0/o0,/ &o&+=o/u6 s1o002&g 5,/t2=25%t2o& C12:, t1, ,%/:2,/ '2s62ss%: o/',/ 1%' &ot %tt%2&,' =2&%:2t4 s1ou:' 1%@, 3,,& %55,0t,' 34 t1, t/2%: 5ou/t. 1avvphi1 In vie$ of the fore-oin-, $e rule that the RT* acted $ithout =urisdiction in hastil/ dis+issin- said refiled Petition. 3ccordin-l/, the Petition for *ertiorari before the *ourt of 3ppeals assailin- this dis+issal should be -ranted.2'4 +phasis supplied.5 In contrast to the dili-ence sho$ed b/ !#P in the above6cited case, herein petitioner !#P ad+itted its Uthou-htlessU filin- of the petition before the S3* +ore than '11 da/s after notice of the denial of its +otion for reconsideration of the P3R3D9s decision fi?in- the =ust co+pensation for the sub=ect propert/. Petitioner did not offer an/ e?planation for its tardiness and ne-lect, and si+pl/ reiterated the -reat pre=udice to the a-rarian refor+ fund $ith the erroneous inclusion in the P3R3D9s valuation of the '&'.'%'( hectares alread/ conve/ed to the -overn+ent. 3s to the re+ainin- 8(.'%'( hectares, petitioner asserts that the P3R3D9s valuation failed to appl/ the co+putation provided in Sec. ') of R.3. No. AA&) as translated in D3R 3O No. &, series of '((8. Petitioner clearl/ slept on its ri-hts b/ not filin- the petition in the S3* $ithin the prescribed fifteen6da/ period or a reasonable ti+e after notice of the denial of its +otion for reconsideration. ven assu+in- there $as alread/ a consu++ated sale $ith respect to the '&'.'%'( hectares and !#P9s valuation thereof had been full/ paid to the respondent, the a+ount alread/ paid b/ !#P shall be deducted fro+ the total co+pensation as deter+ined b/ the P3R3D. Notabl/, !#P e?hibited lac, of interest in the dischar-e of its statutor/ functions as it failed to activel/ participate in the su++ar/ ad+inistrative proceedin- despite due notice of the hearin-s. *learl/, there e?ists no co+pellin- reason to =ustif/ rela?ation of the rule on the ti+el/ avail+ent of =udicial action for the deter+ination of =ust co+pensation.

It is a funda+ental le-al principle that a decision that has ac>uired finalit/ beco+es i++utable and unalterable, and +a/ no lon-er be +odified in an/ respect, even if the +odification is +eant to correct erroneous conclusions of fact and la$, and $hether it be +ade b/ the court that rendered it or b/ the hi-hest court of the land. The onl/ e?ceptions to the -eneral rule on finalit/ of =ud-+ents are the so6called nunc pro tunc entries $hich cause no pre=udice to an/ part/, void =ud-+ents, and $henever circu+stances transpire after the finalit/ of the decision $hich render its e?ecution un=ust and ine>uitable.20 Indeed, liti-ation +ust end and ter+inate so+eti+e and so+e$here, even at the ris, of occasional errors.22 H@ R FOR , the petition for revie$ on certiorari is D NI D. The Decision dated Nove+ber '0, 011% and Resolution dated Ma/ '', 011& of the *ourt of 3ppeals in *367.R. *V No. )1()( are A!!#RMED. No costs. SO ORD R D. MART#N S. V#LLARAMA, )R. 3ssociate .ustice H *ON*"R: RENATO C. CORONA *hief .ustice *hairperson TERES#TA ). LEONARDO+DE CASTRO 3ssociate .ustice LUCAS P. BERSAM#N 3ssociate .ustice

MAR#ANO C. DEL CAST#LLO 3ssociate .ustice * RTIFI*3TION

Pursuant to Section '2, 3rticle VIII of the '(8) *onstitution, I certif/ that the conclusions in the above Decision had been reached in consultation before the case $as assi-ned to the $riter of the opinion of the *ourt9s Division. RENATO C. CORONA *hief .ustice

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Rollo, pp. &A6A%. Penned b/ 3ssociate .ustice Roberto 3. #arrios 4no$ deceased5 $ith 3ssociate .ustices 3+elita 7. Tolentino and Vicente S. . Veloso concurrin-.
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Id. at AA6A8. *3 rollo, pp. (6''. Penned b/ .ud-e @onesto 3. Villa+or. Records, pp. %26&'. Id. at 01600. Id. at '6A.

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Id. at '86'(. !and #an, of the Philippines v. !istana, Sr., 7.R. No. '&0A'', 3u-ust &, 0112, %18 S*R3 208. Records, pp. 0)60(. Id. at 2262). Id. at A&. Id. at )06)%. Id. at '106'1%. Id. at '1&6'1). Id. at '0&6'0). *3 rollo, pp. ')86'8(. !and #an, of the Philippines v. @eirs of Severino !istana, 7.R. No. '80)&8, Ma/ 21, 01''. Rollo, pp. A06A2. Id. at 2&62A, %A.

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!and #an, of the Philippines v. H/coco, 7.R. Nos. '%1'A1 Q '%A)22, .anuar/ '2, 011%, %'( S*R3 A), )&, citin- Republic v. *ourt of 3ppeals, 7.R. No. '000&A, October 21, '((A, 0A2 S*R3 )&8, )A2.
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7.R. No. '000&A, October 21, '((A, 0A2 S*R3 )&8. Id. at )A%6)A&. 7.R. No. '20)A), .anuar/ '8, 0111, 200 S*R3 '2(. Id. at '%A6'%). !and #an, of the Philippines v. "+andap, 7.R. No. 'AA0(8, Nove+ber '), 01'1. 7.R. No. '&)(12, October '', 011), &2& S*R3 A1&. Id. at A'06A'%, A'A6A'). 7.R. No. 'A(118, .ul/ 2', 0118, &A1 S*R3 ))A. Id. at )8', )82. Supra note 0&. Id. at '8601. Sacdalan v. *ourt of 3ppeals, 7.R. No. '08(A), Ma/ 01, 011%, %08 S*R3 &8A, &((. 7allardo6*orro v. 7allardo, 7.R. No. '2A008, .anuar/ 21, 011', 2&1 S*R3 &A8, &)8.

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