Civ Pro 1-10 Cases

CIVIL PROCEDURE FULL TEXT CASES
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[G.R. No. 149634. July 6, 2004]
LORETA TORRES, MARILYN TANGTANG, ARMELA FIGURACION,

RAQUEL BERNARTE, ESTRELLA TITO, RHEA ELLORDA,
ROSITA FUENTES, ANITA LAPORRE, JOCELYN RIN,
MATODIA
DEREPAS,
FELICISIMA
ALEGRE,
LEA
MARTILLANA, EVANGELINE RAFON, ALICIA EMPILLO, AMY
TORRES, EDNA JIMENEZ, EVELYN DOLOM, HAMILI UYVICO,
CRISELINA ANQUILO, NILDA ALCAIDE, ROSARIO MABANA,
ESTELA MANGUBAT, ROSIE BALDOVE, CARMELITA RUIZ
and
LUCILA
JUSTARES, petitioners,
vs. SPECIALIZED
PACKAGING
DEVELOPMENT
CORPORATION
and/or
ALFREDO GAO (President) and PETER CHUA (General
Manager); EUSEBIO CAMACHO GENERAL SERVICES and/or
EUSEBIO CAMACHO (President/General Manager); MPL
SERVICES and/or MIGUELITO LAURIANO (President/General
Manager), respondents.
DECISION
PANGANIBAN, J.:
The Court may give due course to a petition, even if the accompanying
certificate against forum shopping has not been signed by all the
petitioners, provided it is shown that, as in this case, there is a justifiable
cause for such failure; and the outright dismissal of the petition would
seriously impair the orderly administration of justice. In the interest of
substantial justice, strict observance of procedural rules may be dispensed
with for compelling reasons.
The Case
Before us is a Petition for Review under Rule 45 of the Rules of Court,
seeking to nullify the January 15, 2001 and the August 28,
2001 Resolutions of the Court of Appeals (CA) in CA-GR SP No. 62530.
The first Resolution disposed as follows:
[1]
[2]
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ACCORDINGLY, and to strictly enforce the aforesaid circulars to attain their

objectives (Carrara Marble Phil., Inc. vs. Court of Appeals, G.R. No. 127059,
January 22, 1997; Far Eastern Shipping Co. vs. Court of Appeals, 297 SCRA 30),
[3]

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the Court [r]esolved to DISMISS the petition for a defective or insufficient

verification and certification thereof.
[4]
The second assailed Resolution, on the other hand, denied petitioners

Motion for Reconsideration.
The Antecedents
Petitioners claim to be employees of the Specialized Packaging
Development Corporation (SPDC), a business entity engaged in the
repackaging of cosmetic products. In three separate Complaints, they
charged SPDC and alleged labor recruiters Eusebio Camacho General
Services (ECGS) and MPL Services with illegal dismissal; and with
nonpayment of overtime, premium and 13th month pays, and night
differential.
The cases were later consolidated and assigned to Labor Arbiter (LA)
Salimathar Nambi. On June 30, 1995, the LA issued his Decision in favor
of petitioners, because SPDC and MPL Services had failed to submit their
position papers on or before the deadline. SPDC was ordered to reinstate
all petitioners to their former positions and to pay them back wages,
premium pay for holidays and rest days, service incentive leave pay and
13th month pay.
The LAs Decision was appealed by SPDC to the National Labor
Relations Commission (NLRC), which set aside the ruling and ordered the
case remanded to LA Nambi for further proceedings.
The case was then set again for hearings. Respondents SPDC and
ECGS submitted their position papers five months after the case had been
considered submitted for decision.
On December 14, 1999, LA Nambi issued a second Decision finding
petitioners employment to have been illegally terminated by SPDC. The
NLRC, however, again reversed and set aside this new Decision on June
9, 2000.
On January 29, 2001, petitioners appealed to the CA.
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The Petition was dismissed by the CA, which found the verification and
the certification against forum shopping to be either defective or
insufficient. It justified its ruling thus:
Ruling of the CA

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x x x [I]t appears that there are twenty-five (25) principal parties-petitioners who
were former workers of private respondent Corporation and complainants in
NLRC NCR Case Nos. 00-04-03325-94, 00-05-03727-94 and 00-05-03971-94 as a
result of their being laid-off from employment. Perusing the verification and
certification[,] however, it also appears that it was executed and signed by only two
(2) petitioners, namely, Evelyn Dolom and Criselina Anquilo, among the said
twenty-five (25) principal petitioners. The duty to verify and certify under oath is
strictly addressed to all the twenty-five (25) principal petitioners. To allow only
two (2) of them to execute the required verification and certification, without the
proper authorization of the others, would render Revised Circular No. 28-91 and
Administrative Circular No. 04-94 (now Sec. 5, Rule 7 of the 1997 Rules of Civil
Procedure) inutile in avoiding the practice of non-forum shopping because the
other principal petitioners, who did not execute and sign the same, much less
execute the proper power of attorney, would not be bound by the certification
executed by only two (2) of them. Any one of the twenty-three (23) remaining
principal petitioners may just obtain the services of another lawyer to institute
practically the same case in a different for[um].
[5]
Denying petitioners Motion for Reconsideration, the appellate court

pointed out that disregarding the rules could not be rationalized by invoking
a liberal construction thereof. Furthermore, it found no satisfactory
explanation why the 25 principal petitioners, who resided in different
provinces, had not executed a special power of attorney in favor of either of
the two petitioners or their counsel.
Hence, this Petition.
[6]
Issues
Petitioners submit the following issues for our consideration:
A.
Whether or not petitioners are employees of the Respondent Specialized Packaging

Development Corporation (SPDC).
B.
Whether or not petitioners were illegally dismissed by Respondent SPDC.

C.
[7]
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Whether or not petitioners are entitled to their money claims.
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The Courts Ruling

The Petition is meritorious.
Preliminary Issue:
Propriety of the Petition
At the outset we note that the present Petition is anchored on Rule 45,
and that it assails the two CA Resolutions dismissing petitioners earlier
Petition for Certiorari. In accordance with Section 1 of Rule 45, the herein
Petition alleges reversible errors based on the supposedly defective
verification and certification against forum shopping.
[8]
The above-quoted issues raised in the Memorandum of petitioners,

however, were not the same ones raised in the Petition. Because these
three substantive issues were sprung by the former only in their own
Memorandum, respondents were not able to traverse these directly in their
Comment or Memorandum. Hence, save for perfunctory references to
the NLRC Decision, the latter were not given the opportunity to defend
themselves on these questions.
[9]
[10]
Elementary due process -- which means giving the opposite party the
opportunity to be heard, and the assailed court to consider every argument
presented -- bars this Court from taking up these three issues in this
Decision, even if doing so would speed up the final resolution of the case.
Basic is the rule that issues not presented below cannot for the first time be
taken up on appeal.
[11]
[12]
Review of NLRC Decisions

The proper procedure for seeking a review of the final dispositions of
the NLRC was laid down in 1998 in St. Martin Funeral Homes v.
NLRC. That case heralded two very important rules: 1) decisions and final
resolutions of the NLRC may be reviewed only via a special civil action for
certiorari under Rule 65 of the Rules of Court; and 2) such petition must be
filed with the CA in strict observance of the doctrine of the hierarchy of
courts.
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Thus, after St. Martin became final, special civil actions challenging
NLRC rulings have been referred by this Court to the CA for proper
disposition. Exceptions to this rule were those instances when -- prior to
the finality of St. Martin -- both parties had already filed their respective
memoranda with this Court, and it then opted to take final cognizance of
[13]

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the case. Under AM No. 99-2-01-SC, however, all new cases erroneously
filed with this Court after June 1, 1999, were dismissed forthwith.
[14]
Main Issue:
Propriety of the CAs Dismissal of the Petition
In their present Petition, petitioners plead a liberal construction of the
rules. They argue that the verification and the certification against forum
shopping executed by only two of the 25 petitioners have already satisfied
the requirements under Sections 4 and 5 of Rule 7. On the other hand,
the CA ruled that all 25 petitioners should have signed the verification and
the certification of non-forum shopping. We clarify.
[15]
[16]
Actually, two separate rules are involved in the present controversy

one, on verification; and the other, on the certification against forum
shopping.
Two Signatures Sufficient
for Verification
The verification requirement is provided under Section 4 of Rule 7 of
the Rules of Court, as follows:
SEC. 4. Verification. Except when otherwise specifically required by law or
rule, pleadings need not be under oath, verified or accompanied by affidavit.
[17]
A pleading is verified by an affidavit that the affiant has read the pleading and
that the allegations therein are true and correct of his knowledge and belief.
A pleading required to be verified which contains a verification based on
information and belief, or upon knowledge, information and belief, or lacks a
proper verification, shall be treated as an unsigned pleading. (Italics supplied)
The purpose of requiring a verification is to secure an assurance that
the allegations of the petition have been made in good faith; or are true and
correct, not merely speculative. This requirement is simply a condition
affecting the form of pleadings, and noncompliance therewith does not
necessarily render it fatally defective. Indeed, verification is only a formal,
not a jurisdictional, requirement.
[18]
[19]
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In the present case, the problem is not the lack of a verification, but the
adequacy of one executed by only two of the 25 petitioners. These two
signatories are unquestionably real parties in interest, who undoubtedly
[20]

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have sufficient knowledge and belief to swear to the truth of the allegations
in the Petition. This verification is enough assurance that the matters
alleged therein have been made in good faith or are true and correct, not
merely speculative. The requirement of verification has thus been
substantially complied with.
Certification Against Forum Shopping
Substantially Complied With
For petitions for certiorari, on the other hand, a certification against
forum shopping is required under Section 3 of Rule 46 of the Rules of
Court, as follows:
[21]
SEC. 3. Contents and filing of petition; effect of non-compliance with

requirements. - x x x
xxx
xxx
xxx
The petitioner shall also submit together with the petition a sworn certification
that he has not theretofore commenced any other action involving the same issues
in the Supreme Court, the Court of Appeals or different divisions thereof, or any
other tribunal or agency; if there is such other action or proceeding, he must state
the status of the same; and if he should thereafter learn that a similar action or
proceeding has been filed or is pending before the Supreme Court, the Court of
Appeals, or different divisions thereof, or any other tribunal or agency, he
undertakes to promptly inform the aforesaid courts and other tribunal or agency
thereof within five (5) days therefrom.
xxx
xxx
xxx
The failure of the petitioner to comply with any of the foregoing requirements
shall be sufficient ground for the dismissal of the petition.
The certification requirement is rooted in the principle that a partylitigant shall not be allowed to pursue simultaneous remedies in different
fora, as this practice is detrimental to an orderly judicial procedure. The
lack of a certification against forum shopping, unlike that of verification,
is generally not cured by its submission after the filing of the petition.
[22]
[23]
The submission of a certificate against forum shopping is thus deemed

obligatory, though not jurisdictional. (Jurisdiction over the subject or
nature of the action is conferred by law.) Not being jurisdictional, the
requirement has been relaxed under justifiable circumstances under the
rule of substantial compliance.
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[25]
[24]

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In fact, the Court has allowed the belated filing of the certification
against forum shopping because of compelling reasons. In Uy v. Land
Bank, it even reinstated a petition it had already dismissed for lack of
verification and certification against forum shopping, after petitioner had
justified the reinstatement. Similarly, in Roadway Express v. CA, the
Court considered as substantial compliance the filing of the certification 14
days prior to the dismissal of the petition.
[26]
[27]
[28]
The rule of substantial compliance has likewise been availed of with

respect to the contents of the certification. Gabionza v. Court of
Appeals accepted, as sufficient compliance therewith, petitioners
certification to the effect that there is no similar petition [with] the same
subject matter previously filed, pending, withdrawn or dismissed in the
Supreme Court, in this Honorable Court [of Appeals] or different divisions
thereof, or any other tribunal or agency. It stressed that while Circular 2891 required strict compliance, it did not thereby prevent substantial
compliance under justifiable circumstances.
[29]
[30]
[31]
[32]
In the present case, petitioners aver that the signatures of only two of
them suffice as substantial compliance with the attestation requirement for
a certificate against forum shopping. In effect, they are asking this Court to
disregard a defect in their Petition.
[33]
In previous rulings, we have held that a certificate against forum

shopping should be signed by all the petitioners, because a lone signatory
cannot be presumed to have personal knowledge of the matters required to
be stated in the attestation. The ruling is not without exception, however.
In Spouses Ortiz v. Court of Appeals and similar rulings, the following has
always been pointed out:
[34]
[35]
x x x. The attestation contained in the certification on non-forum shopping

requires personal knowledge by the party who executed the same. To merit the
Courts consideration, petitioners here must show reasonable cause for failure to
personally sign the certification. The petitioners must convince the court that the
outright dismissal of the petition would defeat the administration of justice. x x x
(Italics supplied)
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We find their reasons meritorious. First, as pointed out in the Motion for
Reconsideration filed with the CA, the case dragged for an undeniably long
time, because its remand to the labor arbiter forced many of the petitioners
to go back to the provinces to await the final outcome, while those who
remained in Metro Manila were forced out of temporary quarters every so
Petitioners need only show, therefore, that there was reasonable cause
for the failure of some of them to sign the certification against forum
shopping, and that the outright dismissal of the Petition would defeat the
administration of justice.

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often. Under these circumstances, it was extremely difficult to secure all

the required signatures.
[36]
Second, it is safe to assume that the matters alleged in the certificate

against forum shopping have been complied with by the non-signing
petitioners. Twenty-one of the petitioners executed in favor of their
counsel, a Natatanging Gawad ng Kapangyarihan, which gives him
authority to represent them in all matters connected with the case. As it
has not been revoked or superseded, the possibility of any of them filing
another action or claim through another counsel is effectively foreclosed.
[37]
Third, the apparent merits of the substantive aspects of the case, as

in Uy, should be deemed as a special circumstance or compelling
reason for allowing the Petition. Pertinent thereto, the Court notes that the
conflicting findings of the NLRC and of the labor arbiter -- who ruled twice
in favor of petitioners -- provide ample justification for the CAs review of
the merits. The outright dismissal of the Petition was therefore prejudicial
to the substantial rights of the parties.
Indeed, rules of procedure are established to secure substantial
justice. Being instruments for the speedy and efficient administration of
justice, they must be used to achieve such end, not to derail it. Technical
requirements may thus be dispensed with in meritorious appeals.
[38]
[39]
[40]
It has been our consistent holding that the ends of justice are better
served when cases are determined on the merits -- after all parties are
given full opportunity to ventilate their causes and defenses -- rather than
on technicality or some procedural imperfections.
[41]
Consequently, the case should be remanded to the CA for a proper

determination of the substantive issues. Time-honored is the principle that
when the law entrusts the review of factual and substantive issues to a
lower court or to a quasi-judicial tribunal, that court or agency must be
given the opportunity to pass upon those issues. Only thereafter may the
parties resort to this Court.
[42]
[43]
WHEREFORE, this Petition is GRANTED. The assailed Resolutions of

the Court of Appeals are SET ASIDE, and the case is remanded to the CA
for a proper determination of the substantive issues. No costs.
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SO ORDERED.
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[G.R. No. 157195. April 22, 2005]
VICAR INTERNATIONAL CONSTRUCTION, INC., and CARMELITA V.

LIM, petitioners,
vs. FEB
LEASING
AND
FINANCE
CORPORATION
(now
BPI
LEASING
CORPORATION), respondent.
DECISION
PANGANIBAN, J.:
Once more, the Court stresses that procedural rules must be used to
promote, not obstruct, substantial justice. The failure to attach the
Resolution authorizing herein individual petitioner to represent herein
corporate petitioner is, under the circumstances, excusable. The
immediate correction of the defect should have been deemed sufficient
compliance with the rules.
The Case
Before us is a Petition for Review on Certiorari[1] pursuant to Rule 45 of
the Rules of Court, seeking to reverse and set aside two Resolutions[2] of
the Court of Appeals (CA) dated October 23, 2002[3] and February 7,
2003,[4] in CA-GR SP No. 73117. The earlier Resolution reads:
The instant petition for certiorari is hereby DISMISSED for lack of proper
verification and certification against forum shopping as the same was executed by
Carmelita V. Lim, one of the petitioners, without showing any authority from
petitioner corporation to sign for and on its behalf.[5]
The second assailed Resolution denied petitioners Omnibus Motion
for Reconsideration and for Admission of the Attached Secretarys
Certificate.
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This controversy originated from a Complaint[6] for unjust enrichment

and damages, filed in the Regional Trial Court of Makati by herein
petitioner, Vicar International Construction, Inc. (Vicar), against
Respondent FEB Leasing and Finance Corporation (now BPI Leasing
Corporation) and the Far East Bank and Trust Company. In turn, FEB
The Facts

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Leasing and Finance Corporation filed a Complaint[7] against Vicar,

Carmelita Chaneco Lim and one John Doe, for a sum of money, damages
and replevin.
These Complaints stemmed from loans obtained from FEB by Vicar, a
corporation engaged in the construction business, for the purchase of
certain heavy equipment. In obtaining the loans, Deeds of Absolute Sale
with a lease-back provision were executed by the parties. In those
Deeds, Vicar appears to have sold to FEB the equipment purchased with
the loan proceeds and, at the same time, leased them back.[8] For the total
loan of P30,315,494, Vicar claims to have paid FEB an aggregate amount
of P19,042,908 in monthly amortizations.
Nevertheless, FEB maintains that Vicar still had an outstanding balance
of about P22,000,000, despite the extrajudicial foreclosure of sixty-three
(63) subdivision lots. These lots, comprising an aggregate area of 20,300
square meters in Calamba, Laguna, were used by the corporation as
additional collateral.
As a consequence, the auction sale
produced P17,000,000 which, Vicar claims, should have been applied to its
loans.
In the course of the second (replevin) case, the trial court issued
several Orders pertaining to the possession/custody of eight (8) units of the
subject equipment. In an Order dated August 2, 2002, the regional trial
court (RTC) quashed the property counterbond filed by Vicar and denied
the latters Motion to Dismiss the Complaint, which was grounded on forum
shopping. In an Order dated September 30, 2002, the RTC denied the
corporations Motion for Reconsideration and Motion for Voluntary Inhibition
of the trial judge.
On October 3, 2002, Vicar filed a Petition for Certiorari before the Court
of Appeals, to stop the implementation of the Writ of Replevin issued
against the subject equipment.
Ruling of the Court of Appeals
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On November 23, 2003, the day after receiving its copy of the
Resolution, Vicar filed an Omnibus Motion for Reconsideration and for
Admission of the Attached Secretarys Certificate. Nevertheless, the CA
denied the Omnibus Motion in this wise:
10
The Petition was, however, instantly dismissed by the CA in its herein

assailed Resolution dated October 23, 2002, because the Verification and
the Certification against forum shopping had been executed by Petitioner
Carmelita V. Lim without any showing that she had the authority to sign for
and on behalf of petitioner-corporation.

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The belated filing by the petitioners of the Certification of their Corporate

Secretary, to the effect that petitioner Carmelita Lim has been duly authorized by
petitioner corporation to file the subject petition for certiorari, did not cure the
defect of said petition. Absent any compelling reason for petitioners failure to
comply at the first instance with the required certification, we cannot, therefore,
accept their subsequent compliance.[9]
Hence, this Petition.[10]
The Issues
Petitioners raise the following issues for our consideration:
A.
Whether compelling reasons exist which warrant the liberal construction of the
Petition for Certiorari.
B.
Whether petitioners subsequent submission of the secretarys certificate is a
sufficient compliance with the requirement of the law.
C.
Whether the policy of the law is to afford a party the fullest opportunity to
establish the merits of his case.[11]
In short, the principal issue is whether the Court of Appeals erred in
summarily dismissing the Petition for Certiorari.
The Courts Ruling
The present Petition for Review is meritorious.
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Petitioners assert that Carmelita V. Lim was duly authorized to execute,

for and on behalf of Vicar, the Verification and Certification against forum
shopping. Attached to the Petition and signed by Petitioner Lim was the
11
Main Issue:
Propriety of Summary Dismissal

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Verification/Certification, in which was explicitly stated the authorization and

affirmation, as follows:
x x x. I am likewise duly authorized to execute this Verification/Certification in
behalf of petitioner Vicar International Construction, Inc. x x x.
This statement was supported by Vicars board of directors, who
unanimously approved a Resolution dated October 2, 2002, which reads
thus:
NOW THEREFORE, BE IT RESOLVED, as it is hereby resolved, that the
Corporation be authorized to file a Petition for Certiorari before the Court of
Appeals for the purpose of annulling or setting aside the Orders dated 2 August
2002 and 30 September 2002 rendered by Branch 150 of the Regional Trial Court
of Makati in connection with Civil Case No. 02-357 entitled FEB Leasing &
Finance Corporation, Plaintiff vs. Vicar International Construction, Inc. et al.,
Defendants.
RESOLVED further, that the President/General Manager Carmelita V. Lim is
hereby authorized to execute and sign any and all documents necessary for filing of
the Petition for Certiorari, including the verification and certification against
forum shopping.[12]
Petitioners candidly admit that they inadvertently failed to attach the
above Resolution to their CA Petition. In preparing the Petition, their
counsel supposedly worked overnight without sleep. She wanted to file it
immediately to avoid the trial courts quashal of their counterbond and,
thus, the immediate seizure of their equipment -- their only means of
livelihood.
Their counsel allegedly believed in good faith that the secretarys
Certificate was attached to the Petition. When they received a copy of the
October 23, 2002 CA Resolution on November 11, 2002, they lost no time
in filing the following day their Omnibus Motion for Reconsideration and for
Admission of the Attached Secretarys Certificate.
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Further, citing Yap v. Baldado,[14] they contend that their posthaste

submission of the secretarys Certificate, albeit after the filing of their
Petition, constitutes substantial compliance with the requirements of the
law. Finally, they aver that pursuant to the policy of the law to afford parties
the fullest opportunity to establish the merits of their case, the CA should
have given due course to their Petition.
12
Petitioners submit that the foregoing circumstances constitute

compelling reasons to justify setting aside the procedural defect, pursuant
to Ramos v. Court of Appeals.[13]

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On the other hand, Respondent FEB asserts that the CAs dismissal of
the Petition -- arising from petitioners failure to attach a duly executed
verification and certification against forum shopping -- is well within the
appellate courts authority, pursuant to Sections 3 and 5 of Rule 46 of the
Revised Rules of Civil Procedure.[15] Respondent also claims that
petitioners present action before this Court seeks to correct a perceived
erroneous application by the CA of a procedural rule that is not correctible
by certiorari.
Finally, respondent alleges that the instant Petition, being based on the
ground of excusable negligence, is actually a motion for new trial. As such,
the Petition must allegedly fail, because petitioners did not execute and
attach an affidavit of merits.
The issue before us is not novel; neither are the factual circumstances
that gave rise to it.
In Shipside Incorporated v. Court of Appeals,[16] the petitioner had not
attached any proof that its resident manager was authorized to sign the
Verification and the non-forum shopping Certification, as a consequence of
which the Petition was dismissed by the Court of Appeals. Subsequent to
the dismissal, however, the petitioner filed a motion for reconsideration, to
which was already attached a Certificate issued by its board secretary who
stated that, prior to the filing of the Petition, the resident manager had been
authorized by the board of directors to file the Petition.
Citing several cases[17] excusing noncompliance with the requirement of
a certificate of non-forum shopping, the Court held that with more reason
should x x x the instant petition [be allowed,] since petitioner herein did
submit a certification on non-forum shopping, failing only to show proof that
the signatory was authorized to do so. The Court further said that the
subsequent submission of the Secretarys Certificate, attesting that the
signatory to the certification was authorized to file the action on behalf of
petitioner, mitigated the oversight.
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Under those circumstances, the Court held that there was at least
substantial compliance with, and that there was no attempt to ignore, the
prescribed procedural requirements, except that the petition was not
13
Similarly, in General Milling Corporation v. NLRC,[18] the Court of

Appeals dismissed the Petition, which was not accompanied by any board
resolution or certification by the corporate secretary showing that the
person who had signed the Certification of Non-Forum Shopping was duly
authorized to represent the petitioner-corporation in the case. In the Motion
for Reconsideration, however, the petitioner attached a board Resolution
stating that the signatory of the Certification had been duly authorized to do
so.

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accompanied by a board resolution or a secretarys certificate that the

person who signed it was duly authorized by petitioner to represent it in the
case.[19]
Also, in BA Savings Bank v. Sia,[20] the Court of Appeals denied due
course to a Petition for certiorari filed by BA Savings Bank. The CAs
action was grounded on the fact that the Certification on anti-forum
shopping incorporated in the Petition had been signed merely by the banks
counsel, not by a duly authorized representative, as required under
Supreme Court Circular No. 28-91. Subsequently filed by the petitioner
was a Motion for Reconsideration, to which was attached a Certificate
issued by the corporate secretary. The Certificate showed that the
Resolution promulgated by the board of directors had authorized the
lawyers of petitioner to represent it in any action or proceeding before any
court, tribunal or agency; and to sign, execute and deliver the certificate of
non-forum shopping, among others. Nevertheless, the Court of Appeals
denied the Motion on the ground that Supreme Court Revised Circular No.
28-91 requires that it is the petitioner, not the counsel, who must certify
under oath to all of the facts and undertakings required therein.
The Court again reversed the appellate court and ruled thus:
Circular 28-91 was prescribed by the Supreme Court to prohibit and penalize the
evils of forum shopping. We see no circumvention of this rationale if the
certificate was signed by the corporations specifically authorized counsel, who
had personal knowledge of the matters required in the Circular. InBernardo v.
NLRC,[21] we explained that a literal interpretation of the Circular should be
avoided if doing so would subvert its very rationale. Said the Court:
x x x. Indeed, while the requirement as to certificate of non-forum shopping is
mandatory, nonetheless the requirements must not be interpreted too literally and
thus defeat the objective of preventing the undesirable practice of forumshopping.[22]
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1. x x x I am likewise duly authorized to execute this Verification/Certification in

behalf of petitioner Vicar International Construction, Inc.
14
Guided by the above pronouncements, the Court deems it proper and

justifiable to grant the present Petition. Clearly, petitioners did not
deliberately ignore SC Circular 28-91. In fact, a Verification/Certification,
stating the information required under the Circular, was attached to the
Petition for Certiorari filed before the CA. In that Verification/Certification
signed by Petitioner Lim, she attested as follows:
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2. In my personal capacity and as a duly authorized representative of Vicar

International Construction, Inc., I caused the preparation of the foregoing Petition
for Certiorari.
xxx
xxx
xxx
Petitioners merely missed attaching to their Petition a concrete proof of

Lims authority from Vicar to execute the said Verification/Certification on its
behalf. The latter, however, lost no time in submitting its corporate
secretarys Certificate attesting to the fact that, indeed, Petitioner Vicars
board of directors had unanimously approved a Resolution on October 2,
2002, authorizing its president and general manager, Carmelita V. Lim, to
file the Petition and to execute and sign x x x the verification and
certification against forum shopping.
The Certificate was submitted to the CA on the day right after it had
denied the Petition. Such swiftness of action indicates that the Resolution - authorizing Petitioner Lim to file the Petition and execute the Verification
and the Certification against forum shopping on behalf of Petitioner Vicar -did exist at the time the Petition was filed. Such fact also lends credence to
the assertion of petitioners that it was only due to inadvertence and
oversight that they failed to attach the Secretarys Certificate to their
Petition for Certiorari.
In closing, the Court stresses once more that technical rules of
procedure should be used to promote, not frustrate, justice. While the swift
unclogging of court dockets is a laudable objective, the granting of
substantial justice is an even more urgent ideal.[23] Rules of procedure are
but tools designed to facilitate, not obstruct, the attainment of justice.
WHEREFORE, the Petition is GRANTED, and the appealed
Resolutions are REVERSED and SET ASIDE. The case is REMANDED to
the Court of Appeals, which is directed to continue the proceedings in CAGR SP No. 73117 with deliberate speed. No costs.
SO ORDERED.
Page
15
Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

Garcia, J., No part. Had taken part in assailed Resolutions.
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G.R. No. 89070 May 18, 1992

BENGUET ELECTRlC COOPERATIVE, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, PETER COSALAN and
BOARD OF DIRECTORS OF BENGUET ELECTRIC COOPERATIVE,
INC., * respondents.
Raymundo W. Celino for respondent Peter Cosalan.
Reenan Orate for respondent Board of Directors of BENECO.
FELICIANO, J.:
Private respondent Peter Cosalan was the General Manager of Petitioner
Benguet Electric Cooperative, Inc. ("Beneco"), having been elected as such
by the Board of Directors of Beneco, with the approval of the National
Electrification Administrator, Mr. Pedro Dumol, effective 16 October 1982.
On 3 November 1982, respondent Cosalan received Audit Memorandum
No. 1 issued by the Commission on Audit ("COA"). This Memorandum
noted that cash advances received by officers and employees of petitioner
Beneco in the amount of P129,618.48 had been virtually written off in the
books of Beneco. In the Audit Memorandum, the COA directed petitioner
Beneco to secure the approval of the National Electrification Administration
("NEA") before writing off or condoning those cash advances, and
recommended the adoption of remedial measures.
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Page
On 19 May 1983, petitioner Beneco received the COA Audit Report on the
financial status and operations of Beneco for the eight (8) month period
16
On 12 November 1982, COA issued another Memorandum Audit

Memorandum No. 2 addressed to respondent Peter Cosalan, inviting
attention to the fact that the audit of per diems and allowances received by
officials and members of the Board of Directors of Beneco showed
substantial inconsistencies with the directives of the NEA. The Audit
Memorandum once again directed the taking of immediate action in
conformity with existing NEA regulations.

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ended 30 September 1982. This Audit Report noted and enumerated

irregularities in the utilization of funds amounting to P37 Million released by
NEA to Beneco, and recommended that appropriate remedial action be
taken.
Having been made aware of the serious financial condition of Beneco and
what appeared to be mismanagement, respondent Cosalan initiated
implementation of the remedial measures recommended by the COA. The
respondent members of the Board of Beneco reacted by adopting a series
of resolutions during the period from 23 June to 24 July 1984. These Board
Resolutions abolished the housing allowance of respondent Cosalan;
reduced his salary and his representation and commutable allowances;
directed him to hold in abeyance all pending personnel disciplinary actions;
and struck his name out as a principal signatory to transactions of petitioner
Beneco.
During the period from 28 July to 25 September 1984, the respondent
Beneco Board members adopted another series of resolutions which
resulted in the ouster of respondent Cosalan as General Manager of
Beneco and his exclusion from performance of his regular duties as such,
as well as the withholding of his salary and allowances. These resolutions
were as follows:
1. Resolution No. 91-4 dated 28 July 1984:
. . . that the services of Peter M. Cosalan as
General Manager of BENECO is terminated upon
approval of the National Electrification
Administration;
2. Resolution No. 151-84 dated September 15, 1984;
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Page
. . . that GM Cosalan's suspension from office shall

remain in full force and effect until such suspension
is sooner lifted, revoked or rescinded by the Board
of Directors; that all monies due him are withheld
until cleared;
17
. . . that Peter M. Cosalan is hereby suspended

from his position as General Manager of the
Benguet Electric Cooperative, Inc. (BENECO)
effective as of the start of the office hours on
September 24, 1984, until a final decision has been
reached by the NEA on his dismissal;

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3. Resolution No. 176-84 dated September 25, 1984;

. . . that Resolution No. 151-84, dated September
15, 1984 stands as preventive suspension for GM
Peter M. Cosalan. 1
Respondent Cosalan nevertheless continued to work as General Manager
of Beneco, in the belief that he could be suspended or removed only by
duly authorized officials of NEA, in accordance with provisions of P.D. No,
269, as amended by P.D. No. 1645 (the statute creating the NEA, providing
for its capitalization, powers and functions and organization), the loan
agreement between NEA and petitioner Beneco 2 and the NEA
Memorandum of 2 July 1980. 3Accordingly, on 5 October and 10 November
1984, respondent Cosalan requested petitioner Beneco to release the
compensation due him. Beneco, acting through respondent Board
members, denied the written request of respondent Cosalan.
Respondent Cosalan then filed a complaint with the National Labor
Relations Commission ("NLRC") on 5 December 1984 against respondent
members of the Beneco Board, challenging the legality of the Board
resolutions which ordered his suspension and termination from the service
and demanding payment of his salaries and allowances. On 18 February
1985, Cosalan amended his complaint to implead petitioner Beneco and
respondent Board members, the latter in their respective dual capacities as
Directors and as private individuals.
In the course of the proceedings before the Labor Arbiter, Cosalan filed a
motion for reinstatement which, although opposed by petitioner Beneco,
was granted on 23 October 1987 by Labor Arbiter Amado T. Adquilen.
Petitioner Beneco complied with the Labor Arbiter's order on 28 October
1987 through Resolution No. 10-90.
On 5 April 1988, the Labor Arbiter rendered a decision (a) confirming
Cosalan's reinstatement; (b) ordering payment to Cosalan of his
backwages and allowances by petitioner Beneco and respondent Board
members, jointly and severally, for a period of three (3) years without
deduction or qualification, amounting to P344,000.00; and (3) ordering the
individual Board members to pay, jointly and severally, to Cosalan moral
damages of P50,000.00 plus attorney's fees of ten percent (10%) of the
wages and allowances awarded him.
Page
18
Respondent Board members appealed to the NLRC, and there filed a

Memorandum on Appeal. Petitioner Beneco did not appeal, but moved to
dismiss the appeal filed by respondent Board members and for execution
of judgment. By this time, petitioner Beneco had a new set of directors.
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In a decision dated 21 November 1988, public respondent NLRC modified

the award rendered by the Labor Arbiter by declaring that petitioner
Beneco alone, and not respondent Board members, was liable for
respondent Cosalan's backwages and allowances, and by ruling that there
was no legal basis for the award of moral damages and attorney's fees
made by the Labor Arbiter.
Beneco, through its new set of directors, moved for reconsideration of the
NLRC decision, but without success.
In the present Petition for Certiorari, Beneco's principal contentions are
two-fold: first, that the NLRC had acted with grave abuse of discretion in
accepting and giving due course to respondent Board members' appeal
although such appeal had been filed out of time; and second, that the
NLRC had acted with grave abuse of discretion amounting to lack of
jurisdiction in holding petitioner alone liable for payment of the backwages
and allowances due to Cosalan and releasing respondent Board members
from liability therefor.
We consider that petitioner's first contention is meritorious. There is no
dispute about the fact that the respondent Beneco Board members
received the decision of the labor Arbiter on 21 April 1988. Accordingly, and
because 1 May 1988 was a legal holiday, they had only up to 2 May 1988
within which to perfect their appeal by filing their memorandum on appeal.
It is also not disputed that the respondent Board members' memorandum
on appeal was posted by registered mail on 3 May 1988 and received by
the NLRC the following day. 4 Clearly, the memorandum on appeal was
filed out of time.
Page
Respondent Board member's contention runs counter to the established

rule that transmission through a private carrier or letter-forwarder
instead of the Philippine Post Office is not a recognized mode of filing
pleadings. 5The established rule is that the date of delivery of pleadings to
a private letter-forwarding agency is not to be considered as the date of
filing thereof in court, and that in such cases, the date of actual receipt by
the court, and not the date of delivery to the private carrier, is deemed the
date of filing of that pleading. 6
19
Respondent Board members, however, insist that their Memorandum on

Appeal was filed on time because it was delivered for mailing on 1 May
1988 to the Garcia Communications Company, a licensed private letter
carrier. The Board members in effect contend that the date of delivery to
Garcia Communications was the date of filing of their appeal memorandum.
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There, was, therefore, no reason grounded upon substantial justice and the
prevention of serious miscarriage of justice that might have justified the
NLRC in disregarding the ten-day reglementary period for perfection of an
appeal by the respondent Board members. Accordingly, the applicable rule
was that the ten-day reglementary period to perfect an appeal is mandatory
and jurisdictional in nature, that failure to file an appeal within the
reglementary period renders the assailed decision final and executory and
no longer subject to review. 7 The respondent Board members had thus
lost their right to appeal from the decision of the Labor Arbiter and the
NLRC should have forthwith dismissed their appeal memorandum.
There is another and more compelling reason why the respondent Board
members' appeal should have been dismissed forthwith: that appeal was
quite bereft of merit. Both the Labor Arbiter and the NLRC had found that
the indefinite suspension and termination of services imposed by the
respondent Board members upon petitioner Cosalan was illegal. That
illegality flowed, firstly, from the fact that the suspension of Cosalan was
continued long after expiration of the period of thirty (30) days, which is the
maximum period of preventive suspension that could be lawfully imposed
under Section 4, Rule XIV of the Omnibus Rules Implementing the Labor
Code. Secondly, Cosalan had been deprived of procedural due process by
the respondent Board members. He was never informed of the charges
raised against him and was given no opportunity to meet those charges
and present his side of whatever dispute existed; he was kept totally in the
dark as to the reason or reasons why he had been suspended and
effectively dismissed from the service of Beneco Thirdly, respondent Board
members failed to adduce any cause which could reasonably be regarded
as lawful cause for the suspension and dismissal of respondent Cosalan
from his position as General Manager of Beneco. Cosalan was, in other
words, denied due process both procedural and substantive. Fourthly,
respondent Board members failed to obtain the prior approval of the NEA
of their suspension now dismissal of Cosalan, which prior approval was
required, inter alia, under the subsisting loan agreement between the NEA
and Beneco. The requisite NEA approval was subsequently sought by the
respondent Board members; no NEA approval was granted.
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Page
. . . A perusal of the records show that the members of the

Board never acted in their individual capacities. They were
acting as a Board passing resolutions affecting their general
manager. If these resolutions and resultant acts transgressed
20
In reversing the decision of the Labor Arbiter declaring petitioner Beneco

and respondent Board members solidarily liable for the salary, allowances,
damages and attorney's fees awarded to respondent Cosalan, the NLRC
said:

LLB II-A 2014 BULSU
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the law, to then BENECO for which the Board was acting in
behalf should bear responsibility. The records do not disclose
that the individual Board members were motivated by malice or
bad faith, rather, it reveals an intramural power play gone awry
and misapprehension of its own rules and regulations. For this
reason, the decision holding the individual board members
jointly and severally liable with BENECO for Cosalan's
backwages is untenable. The same goes for the award of
damages which does not have the proverbial leg to stand on.
The Labor Arbiter below should have heeded his own
observation in his decision
Respondent BENECO as an artificial person could
not have, by itself, done anything to prevent it. But
because the former have acted while in office and
in the course of their official functions as directors
of BENECO, . . .
Thus, the decision of the Labor Arbiter should be modified
conformably with all the foregoing holding BENECO solely
liable for backwages and releasing the appellant board
members from any individual liabilities. 8 (Emphasis supplied)
Cai
Page
The major difficulty with the conclusion reached by the NLRC is that the
NLRC clearly overlooked or disregarded the circumstances under which
respondent Board members had in fact acted in the instant case. As noted
earlier, the respondent Board members responded to the efforts of Cosalan
to take seriously and implement the Audit Memoranda issued by the COA
explicitly addressed to the petitioner Beneco, first by stripping Cosalan of
the privileges and perquisites attached to his position as General Manager,
then by suspending indefinitely and finally dismissing Cosalan from such
position. As also noted earlier, respondent Board members offered no
suggestion at all of any just or lawful cause that could sustain the
suspension and dismissal of Cosalan. They obviously wanted to get rid of
Cosalan and so acted, in the words of the NLRC itself, "with indecent
21
The applicable general rule is clear enough. The Board members and
officers of a corporation who purport to act for and in behalf of the
corporation, keep within the lawful scope of their authority in so acting, and
act in good faith, donot become liable, whether civilly or otherwise, for the
consequences of their acts, Those acts, when they are such a nature and
are done under such circumstances, are properly attributed to the
corporation alone and no personal liability is incurred by such officers and
Board members. 9

LLB II-A 2014 BULSU
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haste" in removing him from his position and denying him substantive and
procedural due process. Thus, the record showed strong indications that
respondent Board members had illegally suspended and dismissed
Cosalan precisely because he was trying to remedy the financial
irregularities and violations of NEA regulations which the COA had brought
to the attention of Beneco. The conclusion reached by the NLRC that "the
records do not disclose that the individual Board members were motivated
by malice or bad faith" flew in the face of the evidence of record. At the very
least, a strong presumption had arisen, which it was incumbent upon
respondent Board members to disprove, that they had acted in reprisal
against respondent Cosalan and in an effort to suppress knowledge about
and remedial measures against the financial irregularities the COA Audits
had unearthed. That burden respondent Board members did not discharge.
The Solicitor General has urged that respondent Board members may be
held liable for damages under the foregoing circumstance under Section 31
of the Corporation Code which reads as follows:
Sec. 31. Liability of directors, trustees or officers.
Directors or trustees who willfully and knowingly vote for or
assent to patently unlawful acts of the corporation or who are
guilty of gross negligence or bad faith in directing the affairs of
the corporation or acquire any personal or pecuniary interest in
conflict with their duty as such directors or trustees shall be
jointly liable and severally for all damages resulting therefrom
suffered by the corporation, its stockholders or members and
other persons . . . (Emphasis supplied)
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Page
Sec. 15. Organization and Purpose. Cooperative non-stock,

non-profit membership corporationsmay be organized,
and electric cooperative corporations heretofore formed or
registered under the Philippine non-Agricultural Co-operative
Act may as hereinafter provided be converted, under this
22
We agree with the Solicitor General, firstly, that Section 31 of the

Corporation Code is applicable in respect of Beneco and other electric
cooperatives similarly situated. Section 4 of the Corporation Code renders
the provisions of that Code applicable in a supplementary manner to all
corporations, including those with special or individual charters so long as
those provisions are not inconsistent with such charters. We find no
provision in P.D. No. 269, as amended, that would exclude expressly or by
necessary implication the applicability of Section 31 of the Corporation
Code in respect of members of the boards of directors of electric
cooperatives. Indeed, P.D. No. 269 expressly describes these cooperatives
as "corporations:"

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Decree for the purpose of supplying, and of promoting and

encouraging-the fullest use of, service on an area coverage
basis at the lowest cost consistent with sound economy and
the prudent management of the business of such
corporations. 10 (Emphasis supplied)
We agree with the Solicitor General, secondly, that respondent Board
members were guilty of "gross negligence or bad faith in directing the
affairs of the corporation" in enacting the series of resolutions noted earlier
indefinitely suspending and dismissing respondent Cosalan from the
position of General Manager of Beneco. Respondent Board members, in
doing so, acted belong the scope of their authority as such Board
members. The dismissal of an officer or employee in bad faith, without
lawful cause and without procedural due process, is an act that is contra
legem. It cannot be supposed that members of boards of directors derive
any authority to violate the express mandates of law or the clear legal rights
of their officers and employees by simply purporting to act for the
corporation they control.
We believe and so hold, further, that not only are Beneco and respondent
Board members properly held solidarily liable for the awards made by the
Labor Arbiter, but also that petitioner Beneco which was controlled by and
which could act only through respondent Board members, has a right to be
reimbursed for any amounts that Beneco may be compelled to pay to
respondent Cosalan. Such right of reimbursement is essential if the
innocent members of Beneco are not to be penalized for the acts of
respondent Board members which were both done in bad faith andultra
vires. The liability-generating acts here are the personal and individual acts
of respondent Board members, and are not properly attributed to Beneco
itself.
23
WHEREFORE, the Petition for Certiorari is GIVEN DUE COURSE, the

comment filed by respondent Board members is TREATED as their
answer, and the decision of the National Labor Relations Commission
dated 21 November 1988 in NLRC Case No. RAB-1-0313-84 is hereby
SET ASIDE and the decision dated 5 April 1988 of Labor Arbiter Amado T.
Adquilen hereby REINSTATED in toto. In addition, respondent Board
members are hereby ORDERED to reimburse petitioner Beneco any
amounts that it may be compelled to pay to respondent Cosalan by virtue
of the decision of Labor Arbiter Amado T. Adquilen. No pronouncement as
to costs.
Page
SO ORDERED.
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G.R. No. 147369. October 23, 2003]
Spouses PATRICK JOSE and RAFAELA

vs. Spouses
HELEN
BOYON
BOYON,respondents.
JOSE, petitioners,
and
ROMEO
DECISION
PANGANIBAN, J.:
In general, substituted service can be availed of only after a clear

showing that personal service of summons was not legally possible. Also,
service by publication is applicable in actions in rem and quasi in rem, but
not in personal suits such as the present one which is for specific
performance.
The Case
Before the Court is a Petition for Review on Certiorari under Rule 45 of
the Rules of Court, assailing the February 26, 2001 Decision of the Court
of Appeals (CA) in CA-GR SP No. 60888. The dispositive portion of the CA
Decision is worded as follows:
[1]
[2]
WHEREFORE, on the basis of what prescinds, the assailed resolution and orders
issued by the public respondent are perforce ANNULLED and SET ASIDE. This
pronouncement is nonetheless rendered without prejudice to the refiling of the
same case by the private respondents with the court a quo.
[3]
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Page
The factual antecedents of the case are narrated by the CA in this wise:
24
The Facts

LLB II-A 2014 BULSU
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On July 2, 1998, [petitioners] Patrick and Rafaela Jose lodged a complaint for
specific performance against [respondents] Helen and Romeo Boyon to compel
them to facilitate the transfer of ownership of a parcel of land subject of
a controverted sale. The action was lodged before the Regional Trial Court
of Muntinlupa which is presided by herein public respondent Judge
N.C. Perello. On July 21, 1998, respondent judge, through the acting Branch Clerk
of Court of Branch 276 of the RTC of Muntinlupa City, issued summons to the
[respondents]. As per return of the summons, substituted service was resorted to
by the process server allegedly because efforts to serve the summons personally to
the [respondents] failed. On December 9, 1998, [petitioners] filed before the trial
court an Ex-parte Motion for Leave of Court to Effect Summons by
Publication. On December 28, 1998, public respondent issued an Order granting
the Ex-parte Motion for Leave of Court to Effect Summons by
Publication. On July 30, 1999, the respondent judge, sans a written motion, issued
an Order declaring herein [respondents] in default for failure to file their respective
answers. As a consequence of the declaration of default, [petitioners] were
allowed to submit their evidence ex-parte. Ultimately, on December 7, 1999,
respondent judge issued the assailed resolution, the dispositive portion of which
reads as follows:
x x x Therefore, Spouses Helen and Romeo Boyon are directed to execute the
necessary document with the effect of withdrawing the Affidavit of Loss they filed
and annotated with the Register of Deeds of Makati City so that title to the parcel
of land subject of the Deed of Absolute Sale in favor of the Plaintiffs be transferred
in their names. Thereafter the Register of Deeds of Makati City
or Muntinlupa City may cancel Transfer of Certificate of Title No. 149635 of the
Defendants and issue another to Plaintiff under the deed of sale, clean and free of
any reported encumbrance.
Defendants are also directed to pay Plaintiffs actual expenses in the amount
of P20,000 and attorneys fees of P20,000 including costs of this suit.
On January 5, 2000, [respondent] Helen Boyon, who was then residing in

the United States of America, was surprised to learn from her sister
ElizabethBoyon, of the resolution issued by the respondent court. On January 18,
2000, [respondents] filed an Ad Cautelam motion questioning, among others, the
validity of the service of summons effected by the court a quo. On March 17,
2000, the public respondent issued an Order denying the said motion on the basis
of the defaulted [respondents] supposed loss of standing in court. On March 29,
2000, the [respondents] once again raised the issue of jurisdiction of the trial court
via a motion for reconsideration. On June 22, 2000, however, an Order was issued
by the public respondent denying the said motion. The [petitioners] moved for the
Cai
25
xxx
xxx
Page
xxx

LLB II-A 2014 BULSU
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execution of the controverted judgment which the respondent judge ultimately

granted.
[4]
Thereafter, respondents filed before the CA a Petition for certiorari

under Rule 65 of the Revised Rules of Civil Procedure, questioning the
jurisdiction of the regional trial court (RTC).
Ruling of the Court of Appeals
The CA held that the trial court had no authority to issue the questioned
Resolution and Orders. According to the appellate court, the RTC never
acquired jurisdiction over respondents because of the invalid service of
summons upon them. First, the sheriff failed to comply with the
requirements of substituted service of summons, because he did not
specify in the Return of Summons the prior efforts he had made to locate
them and the impossibility of promptly serving the summons upon them by
personal service. Second, the subsequent summons by publication was
equally infirm, because the Complaint was a suit for specific performance
and therefore an action inpersonam. Consequently, the Resolution and the
Orders were null and void, since the RTC had never acquired jurisdiction
over respondents.
Hence, this Petition.
[5]
Issues
In their Memorandum, petitioners raise the following issues for our
consideration:
A. The Honorable Court of Appeals erred in not holding that the assailed
Resolution dated December 7, 1999 was already final and executory
B. The Honorable Court of Appeals erred in giving due course to the Petition for
Certiorari of private respondents despite the pendency of an appeal earlier filed
D. The Honorable Court of Appeals erred in holding that the proceedings in the
lower court are null and void due to invalid and defective service of summons and
the court did not acquire jurisdiction over the person of the respondents.
Page
[6]
26
C. The Honorable Court erred in not holding that the Petition for Certiorari was
time barred
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In sum, the main issue revolves around the validity of the service of
summons on respondents.
The Courts Ruling
The Petition has no merit.
Main Issue:
Validity of the Service of Summons
Petitioners aver that the CA erred in ruling that the service of summons
on respondents was invalid. They submit that although the case filed
before the trial court was denominated as an action for specific
performance, it was actually an action quasi in rem, because it involved a
piece of real property located in the Philippines. They further argue that in
actions quasi in rem involving ownership of a parcel of land, it is sufficient
that the trial court acquire jurisdiction over the res. Thus, the summons by
publication, which they effected subsequent to the substituted service of
summons, was allegedly sufficient.
On the other hand, respondents maintain that the proceedings in the
trial court were null and void because of the invalid and defective service of
summons. According to them, the Return of Summons issued by the
process server of the RTC failed to state that he had exerted earnest
efforts to effect the service of summons. He allegedly tried to serve it
personally
on
them
on July
22,
1998 at No.
32 ArizaDrive, Camella Homes, Alabang. He,
however, resorted
to
substituted service on that same day, supposedly because he could not
find respondents in the above address. They further allege that the person
to whom he gave the summons was not even a resident of that address.
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Page
As to the summons by publication subsequently effected by petitioners,

respondents argue that the case filed before the trial court was an action
for specific performance and, therefore, an action in personam. As such,
the summons by publication was insufficient to enable the trial court to
acquire jurisdiction over the persons of respondents.
27
Respondents contend that when summons is served by substituted

service, the return must show that it was impossible to serve the summons
personally, and that efforts had been exerted toward that end. They add
that noncompliance with the rule on substituted service renders invalid all
proceedings relative thereto.

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Respondents conclude that even granting that the service of summons

by publication was permissible under the circumstances, it would still be
defective and invalid because of the failure of petitioners to observe the
requirements of law, like an Affidavit attesting that the latter deposited in
the post office a copy of the summons and of the order of publication, paid
the postage, and sent the documents by registered mail to the formers last
known address.
We agree with respondents. In general, trial courts acquire jurisdiction
over the person of the defendant by the service of summons. Where the
action is in personam and the defendant is in the Philippines, such service
may be done by personal or substituted service, following the procedures
laid out in Sections 6 and 7 of Rule 14 of the Revised Rules of Court, which
read:
Section 6. Service in person on defendant. - Whenever practicable, the summons
shall be served by handing a copy thereof to the defendant in person, or, if he
refuses to receive and sign for it, by tendering it to him.
Section 7. Substituted service. - If, for justifiable causes, the defendant cannot be
served within a reasonable time as provided in the preceding section, service may
be effected (a) by leaving copies of the summons at the defendant's residence with
some person of suitable age and discretion then residing therein, or (b) by leaving
the copies at defendants office or regular place of business with some competent
person in charge thereof.
As can be gleaned from the above-quoted Sections, personal service of
summons is preferred to substituted service. Only if the former cannot be
made promptly can the process server resort to the latter. Moreover, the
proof of service of summons must (a) indicate the impossibility of service of
summons within a reasonable time; (b) specify the efforts exerted to locate
the defendant; and (c) state that the summons was served upon a person
of sufficient age and discretion who is residing in the address, or who is in
charge of the office or regular place of business, of the defendant. It is
likewise required that the pertinent facts proving these circumstances be
stated in the proof of service or in the officers return. The failure to comply
faithfully, strictly and fully with all the foregoing requirements of substituted
service renders the service of summons ineffective.
[7]
[8]
Cai
Page
In the instant case, it appears that the process server hastily and
capriciously resorted to substituted service of summons without actually
28
Defective Personal
Service of Summons

LLB II-A 2014 BULSU
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exerting any genuine effort to locate respondents. A review of the

records reveals that the only effort he exerted was to go to No.
32 Ariza Drive, Camella Homes, Alabang on July 22, 1998, to try to serve
the summons personally on respondents. While the Return of Summons
states that efforts to do so were ineffectual and unavailing because
Helen Boyon was in the United States and Romeo Boyonwas in Bicol, it did
not mention exactly what efforts -- if any -- were undertaken to find
respondents. Furthermore, it did not specify where or from whom the
process server obtained the information on their whereabouts. The
pertinent portion of the Return of Summons is reproduced as follows:
[9]
That efforts to serve the said Summons personally upon defendants Sps. Helen
and Romeo Boyon were made but the same were ineffectual and unavailing for the
reason that defendant Helen Boyon is somewhere in the United States of America
and defendant Romeo Boyon is in Bicol thus substituted service was made in
accordance with Section 7, Rule 14, of the Revised Rules of Court.
[10]
The Return of Summons shows that no effort was actually exerted and
no positive step taken by either the process server or petitioners to locate
and serve the summons personally on respondents. At best, the Return
merely states the alleged whereabouts of respondents without indicating
that such information was verified from a person who had knowledge
thereof. Certainly, without specifying the details of the attendant
circumstances or of the efforts exerted to serve the summons, a general
statement that such efforts were made will not suffice for purposes of
complying with the rules of substituted service of summons.
The necessity of stating in the process servers Return or Proof of
Service the material facts and circumstances sustaining the validity of
substituted service was explained by this Court in Hamilton v. Levy, from
which we quote:
[11]
x x x The pertinent facts and circumstances attendant to the service of summons

must be stated in the proof of service or Officers Return; otherwise, any
substituted service made in lieu of personal service cannot be upheld. This is
necessary because substituted service is in derogation of the usual method of
service. It is a method extraordinary in character and hence may be used only as
prescribed and in the circumstances authorized by statute. Here, no such
explanation was made. Failure to faithfully, strictly, and fully comply with the
requirements of substituted service renders said service ineffective.
[13]
Cai
Page
Moreover, the requirements of substituted service of summons and the

effect of noncompliance with the subsequent proceedingstherefor were
discussed in Madrigal v. Court of Appeals as follows:
29
[12]

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In a long line of cases, this Court held that the impossibility of personal service
justifying availment of substituted service should be explained in the proof of
service; why efforts exerted towards personal service failed. The pertinent facts
and circumstances attendant to the service of summons must be stated in the proof
of service or Officers Return; otherwise, the substituted service cannot be
upheld. It bears stressing that since service of summons, especially for
actions in personam, is essential for the acquisition of jurisdiction over the person
of the defendant, the resort to a substituted service must be duly justified. Failure
to do so would invalidate all subsequent proceedings on jurisdictional grounds.
[14]
Summons by
Publication Improper
It must be noted that extraterritorial service of summons or summons by
publication applies only when the action is in rem or quasi inrem. The first
is an action against the thing itself instead of against the defendants
person; in the latter, an individual is named as defendant, and the purpose
is to subject that individuals interest in a piece of property to the obligation
or loan burdening it.
[15]
In the instant case, what was filed before the trial court was an action
for specific performance directed against respondents. While the suit
incidentally involved a piece of land, the ownership or possession thereof
was not put in issue, since they did not assert any interest or right over
it. Moreover, this Court has consistently declared that an action for specific
performance is an action in personam.
[16]
Having failed to serve the summons on respondents properly, the RTC

did not validly acquire jurisdiction over their persons. Consequently, due
process demands that all the proceedings conducted subsequent thereto
should be deemed null and void.
[17]
WHEREFORE, the Petition is DENIED and the assailed Decision and

Resolution AFFIRMED. Costs against petitioners.
Page
30
SO ORDERED.
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G.R. No. 108229 August 24, 1993

DASMARIAS GARMENTS, INC., petitioner,
vs.
HON. RUBEN T. REYES, Judge, Regional Trial Court, Manila, Branch
50, and AMERICAN PRESIDENT LINES, LTD., respondents.
Sobrevias, Diaz, Haudini & Bodegon Law Offices for petitioner.
Tan, Manzano & Velez Law Offices for private respondent.
RESOLUTION
NARVASA, C.J.:
Sometime in September, 1987, in the Regional Trial Court of Manila, the
American President Lines, Ltd. sued Dasmarias Garments, Inc. to recover
the sum of US $53,228.45 as well as an amount equivalent to twenty-five
percent (25%) thereof as attorney's fees and litigation expenses.
31
In its answer dated December 1, 1987, Dasmarias Garments, Inc.

(hereafter, simply Dasmarias) specifically denied any liability to the
plaintiff (hereafter simply APL), and set up compulsory counterclaims
against it.
Page
The case was in due course scheduled for trial on April 27, 1988. On that
date APL presented its first witness whose testimony was completed on
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November 12, 1988. The case was reset to May 3, 1989 for reception of
the testimony of two (2) more witnesses in APL's behalf.
At the hearing of May 3, 1989, instead of presenting its witnesses, APL
filed a motion praying that it intended to take the depositions of H. Lee and
Yeong Fang Yeh in Taipei, Taiwan and prayed that for this purpose, a
"commission or letters rogatory be issued addressed to the consul, viceconsul or consular agent of the Republic of the Philippines in Taipei . . . "
Five (5) days later APL filed an amended motion stating that since the
Philippine Government has no consulate office in Taiwan in view of its "one
China policy," there being in lieu thereof an office set up by the President
"presently occupied by Director Joaquin Roces which is the Asia Exchange
Center, Inc.," it was necessary and it therefore prayed "that
commission or letters rogatory be issued addressed to Director Joaquin
Roces, Executive Director, Asian Executive Exchange Center, Inc., Room
901, 112 Chunghsiao, E. Road, Section 1, Taipe, Republic of China, to
hear and take the oral deposition of the aforenamed persons . . . ."
The motion was opposed by Dasmarias. It contended that (a) the motion
was "fatally defective in that it does not seek . . . that a foreign court
examine a person within its jurisdiction;" (b) issuance of letters rogatory
was unnecessary because the witnesses "can be examined before the
Philippine Court;" and
(c) the Rules of Court "expressly require that the testimony of a witness
must be taken orally in open court and not by deposition."
Extensive argument on the matter thereafter followed, through various
pleadings filed by the parties, in the course of which APL submitted to the
Trial Court (a) the letter received by its counsel from Director Joaquin R.
Roces of the Asian Exchange Center, Inc., dated November 20, 1989,
advising that "this Office can only take deposition upon previous authority
from the Department of Foreign Affairs," this being "in consonance with the
Supreme Court Administrative Order requiring courts or judicial bodies to
course their requests through the Department of Foreign Affairs;" and (b) a
letter sent by "fax" to the same counsel by a law firm in Taipei, Lin &
Associates Maritime Law Office, transmitting information inter alia of the
mode by which, under the "ROC Civil Procedure Code," "a copy or an
abridged copy" of documents on file with a Taiwan Court may be obtained.
Cai
Page
ACCORDINGLY, the motion to take testimonies of plaintiff's

Taiwanese witnesses, Kenneth H. Lee and Yeong Fah Yeh, by
deposition (upon written interrogatories) is hereby GRANTED.
32
By Order dated March 15, 1991, the Trial Court resolved the incident in
favor of APL, disposing as follows:

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The Asian Exchange Center, Inc. thru Director Joaquin R.

Roces is hereby COMMISSIONED to take down the
deposition. Compliance with the Rules on the taking of
testimony by deposition upon written interrogatories under
Sections 25-29 of Rule 24, Rules of Court is enjoined.
Let this Order be coursed through the Department of Foreign
Affairs, Manila, pursuant to Supreme Court Administrative
Circular No. 4 dated April 6, 1987.
The Court opined that "the Asian Exchange Center, Inc. being the
authorized Philippine representative in Taiwan, may take the testimonies of
plaintiff's witnesses residing there by deposition, but only upon written
interrogatories so as to give defendant the opportunity to cross-examine
the witnesses by serving cross-examination."
Dasmarias sought reconsideration by motion filed June 25, 1991 on the
following grounds: (1) authority of the Asian Exchange Center, Inc. (AECI)
to take depositions has not been established, it not being one of those so
authorized by the Rules of Court to take depositions in a foreign state; (2)
AECI's articles of incorporation show that it is not vested with any such
authority; (3) to permit deposition-taking by commission without the
authority of the foreign state in which deposition is taken constitutes
infringement of judicial sovereignty; and (4) depositions by written
interrogatories have inherent limitations and are not suitable to matters
dependent on the credibility of witnesses; oral testimony in open court
remains the "most satisfactory method of investigation of facts'" and
"'affords the greatest protection to the rights and liberties of citizens."
By Order dated July 5, 1991, the motion for reconsideration was denied
because "filed out of time" and being a mere rehash of arguments already
passed upon. In the same Order, APL was directed "to take the necessary
steps to implement the order authorizing the . . . (deposition-taking) of its
witnesses not later than the end of this month, otherwise the Court will
consider inaction or lack of interest as waiver to adduce additional evidence
by deposition."
33
Dasmarias instituted a special civil action of certiorari in the Court of

Appeals to nullify the orders of the Trial Court just described. Said
Appellate Court restrained enforcement of the orders of March 15, 1991
and July 5, 1991 "in order to maintain the status quo and to prevent the
infliction of irreparable damage and injury upon the petitioner."
Page
After due proceedings, the Court of Appeals (Third Division) rendered

judgment on September 23, 1992 denying Dasmarias petition
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for certiorari and upholding the challenged orders of the Trial Court. Once
again, Dasmarias sought reconsideration of an adverse disposition, and
once again, was rebuffed. Its motion for reconsideration was denied in a
Resolution of the Court of Appeals dated December 11, 1992.
Once again Dasmarias has availed of the remedy of appeal. It has come
to this Court and prays for the reversal of the Appellate Court's Decision of
September 23, 1992 and Resolution dated December 11, 1992. Once
again, it will fail.
Dasmarias ascribes to the Court of Appeals the following errors, to wit:
1) "in holding that a party could, during the trial of the case,
present its evidence by taking the deposition of its witnesses in
a foreign jurisdiction before a private entity not authorized by
law to take depositions in lieu of their oral examination in open
Court considering that:
a) the taking of deposition is a mode of pretrial
discovery to be availed of before the action comes
to trial;
b) no urgent or compelling reason has been shown
to justify the departure from the accepted and
usual judicial proceedings of examining witnesses
in open court where their demeanor could be
observed by the trial judge;"
2) "in disregarding the inherently unfair situation in allowing
private respondent, a foreign entity suing in the Philippines, to
present its evidence by mere deposition of its witnesses away
from the 'penetrating scrutiny' of the trial Judge while petitioner
is obligated to bring and present its witnesses in open court
subject to the prying eyes and probing questions of the Judge;"
and
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Page
Depositions are chiefly a mode of discovery. They are intended as a means

to compel disclosure of facts resting in the knowledge of a party or other
person which are relevant in some suit or proceeding in court. Depositions,
and the other modes of discovery (interrogatories to parties; requests for
34
3) "in sanctioning the deposition taking of . . . (APL's) witnesses

in Taipei, Taiwan, a foreign jurisdiction not recognized by the
Philippines in view of its 'one-China policy,' before the AECI, a
private entity not authorized by law to take depositions."

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admission by adverse party; production or inspection of documents or

things; physical and mental examination of persons) are meant to enable a
party to learn all the material and relevant facts, not only known to him and
his witnesses but also those known to the adverse party and the latter's
own witnesses. In fine, the object of discovery is to make it possible for all
the parties to a case to learn all the material and relevant facts, from
whoever may have knowledge thereof, to the end that their pleadings or
motions may not suffer from inadequacy of factual foundation, and all the
relevant facts may be clearly and completely laid before the Court, without
omission or suppression.
Depositions are principally made available by law to the parties as a means
of informing themselves of all the relevant facts; they are not therefore
generally meant to be a substitute for the actual testimony in open court of
a party or witness. The deponent must as a rule be presented for oral
examination in open court at the trial or hearing. This is a requirement of
the rules of evidence. Section 1, Rule 132 of the Rules of Court provides:
Sec. 1. Examination to be done in open court. The
examination of witnesses presented in a trial or hearing shall
be done in open court, and under oath or affirmation. Unless
the witness is incapacitated to speak, or the question calls for a
different mode of answer, the answers of the witness shall be
given orally.
Indeed, any deposition offered to prove the facts therein set out during a
trial or hearing, in lieu of the actual oral testimony of the deponent in open
court, may be opposed and excluded on the ground that it is hearsay; the
party against whom it is offered has no opportunity to cross-examine the
deponent at the time that his testimony is offered. It matters not that that
opportunity for cross-examination was afforded during the taking of the
deposition; for normally, the opportunity for cross-examination must be
accorded a party at the time that the testimonial evidence is actually
presented against him during the trial or hearing.
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Page
Sec. 4. Use of depositions. At the trial or upon the hearing of

a motion of an interlocutory proceeding, any part or all of a
deposition, so far as admissible under the rules of evidence,
may be used against any party who was present or
represented at the taking of the deposition or who had due
35
However, depositions may be used without the deponent being actually

called to the witness stand by the proponent, under certain conditions and
for certain limited purposes. These exceptional situations are governed by
Section 4, Rule 24 of the Rules of Court.

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notice thereof, in accordance with any of the following

provisions:
(a) Any deposition may be used by any party for the purpose of
contradicting or impeaching the testimony of deponent as a
witness;
(b) The deposition of a party or of any one who at the time of
taking the deposition was an officer, director, or managing
agent of a public or private corporation, partnership, or
association which is a party may be used by an adverse party
for any purpose;
(c) The deposition of a witness, whether or not a party, may be
used by any party for any purpose if the court finds: (1) that the
witness is dead; or (2) that the witness if out of the province
and at a greater distance than fifty (50) kilometers from the
place of trial or hearing, or is out of the Philippines, unless it
appears that his absence was procured by the party offering
the deposition; or (3) that the witness is unable to attend to
testify because of age, sickness, infirmity, or imprisonment; or
(4) that the party offering the deposition has been unable to
procure the attendance of the witness by subpoena; or (5)
upon application and notice, that such exceptional
circumstances exist as to make it desirable, in the interest of
justice and with due regard to the importance of presenting the
testimony of witnesses orally in open court, to allow the
deposition to be used;
(d) If only part of a deposition is offered in evidence by a party,
the adverse party may require him to introduce all of it which is
relevant to the part introduced, and any party may introduce
any other parts.
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Page
Sec. 47. Testimony or deposition at a former proceeding.

The testimony or deposition of a witness deceased or unable to
testify, given in a former case or proceeding, judicial or
administrative, involving the same parties and subject matter,
may be given in evidence against the adverse party who had
the opportunity to cross-examine him.
36
The principle conceding admissibility to a deposition when the deponent is

dead, out of the Philippines, or otherwise unable to come to court to testify,
is consistent with another rule of evidence, found in Section 47, Rule 132 of
the Rules of Court.

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It is apparent then that the deposition of any person may be taken

wherever he may be, in the Philippines or abroad. If the party or witness is
in the Philippines, his deposition "shall be taken before any judge,
municipal or notary public" (Sec. 10, Rule 24, Rules of Court). If in a foreign
state or country, the deposition "shall be taken: (a) on notice before a
secretary or embassy or legation, consul general, consul, vice-consul, or
consular agent of the Republic of the Philippines, or (b) before such person
or officer as may be appointed by commission or under letters rogatory"
(Sec. 11, Rule 24).
Leave of court is not necessary where the deposition is to be taken before
"a secretary or embassy or legation, consul general, consul, vice-consul, or
consular agent of the Republic of the Philippines," and the defendant's
answer has already been served (Sec. 1 Rule 24). After answer, whether
the deposition-taking is to be accomplished within the Philippines or
outside, the law does not authorize or contemplate any intervention by the
court in the process, all that is required being that "reasonable notice" be
given "in writing to every other party to the action . . . (stating) the time and
place for taking the deposition and the name and address of each person
to be examined, if known, and if the name is not known, a general
description sufficient to identify him or the particular class or group to which
he belongs. . . . " (Sec. 15, Rule 24). The court intervenes in the process
only if a party moves (1) to "enlarge or shorten the time" stated in the notice
(id.), or (2) "upon notice and for good cause shown," to prevent the
deposition-taking, or impose conditions therefor, e.g., that "certain matters
shall not be inquired into" or that the taking be "held with no one present
except the parties to the action and their officers or counsel," etc. (Sec. 16,
Rule 24), or
(3) to terminate the process on motion and upon a showing that "it is being
conducted in bad faith or in such manner as unreasonably to annoy,
embarrass, or oppress the deponent or party" (Sec 18, Rule 24).
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Sec. 12. Commission or letters rogatory. A commission or

letters rogatory shall be issued only when necessary or
convenient, on application and notice, and on such terms and
with such directions as are just and appropriate. Officers may
be designated in notices or commissions either by name or
descriptive title and letters rogatory may be addressed "To the
Appropriate Judicial Authority in (here name the country)."
37
Where the deposition is to be taken in a foreign country where the

Philippines has no "secretary or embassy or legation, consul general,
consul, vice-consul, or consular agent," then obviously it may be taken only
"before such person or officer as may be appointed by commission or
under letters rogatory. Section 12, Rule 24 provides as follows:

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A commission may be defined as "(a)n instrument issued by a court of

justice, or other competent tribunal, to authorize a person to take
depositions, or do any other act by authority of such court or tribunal"
(Feria, J., Civil Procedure, 1969 ed., p. 415, citing Cyclopedic Law
Dictionary, p. 200). Letters rogatory, on the other hand, may be defined as
"(a)n instrument sent in the name and by the authority of a judge or court to
another, requesting the latter to cause to be examined, upon interrogatories
filed in a cause pending before the former, a witness who is within the
jurisdiction of the judge or court to whom such letters are addressed"
(Feria, J., op. cit., citing Cyclopedic Law Dictionary, p. 653). Section 12,
Rule 24 just quoted states that a commission is addressed to "officers . . .
designated . . . either by name or descriptive title," while letters rogatory are
addressed to some "appropriate judicial authority in the foreign state."
Noteworthy in this connection is the indication in the Rules that letters
rogatory may be applied for and issued only after a commission has been
"returned unexecuted" as is apparent from Form 21 of the "Judicial
Standard Forms" appended to the Rules of Court, which requires the
inclusion in a "petition for letters rogatory" of the following paragraph, viz.:
xxx xxx xxx
Page
In the case at bar, the Regional Trial Court has issued a commission to the
"Asian Exchange Center, Inc. thru Director Joaquin R. Roces" "to take the
testimonies of . . . Kenneth H. Lee and Yeong Fah Yeh, by deposition
(upon written interrogatories) . . . ." It appears that said Center may, "upon
request and authority of the Ministry (now Department) of Foreign Affairs,
Republic of the Philippines" issue a "Certificate of Authentications" attesting
to the identity and authority of Notaries Public and other public officers of
the Republic of China, Taiwan (eg., the Section Chief, Department of
Consular Affairs of the latter's Ministry of Foreign Affairs) (Annex B of
Annex N of the petition for review on certiorari) a prima facie showing
not rebutted by petitioner.
38
3. A commission issued by this Court on the ______ day of

______, 19__, to take the testimony of (here name the witness
or witnesses) in (here name the foreign country in which the
testimony is to be taken), before _________________ (name
of officer), was returned unexecuted by __________________
on the ground that ____________, all of which more fully
appears from the certificate of said __________ to said
commission and made a part hereof by attaching it hereto (or
state other facts to show commission is inadequate or cannot
be executed) (emphasis supplied).
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It further appears that the commission is to be coursed through the

Department of Foreign Affairs conformably with Circular No. 4 issued by
Chief Justice Claudio Teehankee on April 6, 1987, pursuant to the
suggestion of the Department of Foreign Affairs directing "ALL JUDGES
OF THE REGIONAL TRIAL COURTS, METROPOLITAN TRIAL COURTS,
MUNICIPAL TRIAL COURTS IN CITIES, MUNICIPAL TRIAL COURTS
AND MUNICIPAL CIRCUIT TRIAL COURTS" "to course all requests for the
taking of deposition of witnesses residing abroad through the Department
of Foreign Affairs" to enable it and "the Philippine Foreign Service
establishments to act on the matter in a judicious and expeditious manner;"
this, "in the interest of justice," and to avoid delay in the deposition-taking.
Petitioner would however prevent the carrying out of the commission on
various grounds.
The first is that the deposition-taking will take place in "a foreign jurisdiction
not recognized by the Philippines in view of its 'one-China policy.'" This is
inconsequential. What matters is that the deposition is taken before a
Philippine official acting by authority of the Philippine Department of
Foreign Affairs and in virtue of a commission duly issued by the Philippine
Court in which the action is pending, and in accordance, moreover, with the
provisions of the Philippine Rules of Court pursuant to which opportunity for
cross-examination of the deponent will be fully accorded to the adverse
party.
Cai
Page
Dasmarias further claims that the taking of deposition under the

circumstances is a "departure from the accepted and usual judicial
proceedings of examining witnesses in open court where the demeanor
could be observed by the trial judge;" that it is "inherently unfair" to allow
APL, "a foreign entity suing in the Philippines, to present its evidence by
mere deposition of its witnesses away from the 'penetrating scrutiny' of the
trial Judge while petitioner is obligated to bring and present its witnesses in
open court subject to the prying eyes and probing questions of the Judge."
39
Dasmarias also contends that the "taking of deposition is a mode of

pretrial discovery to be availed of before the action comes to trial." Not so.
Depositions may be taken at any time after the institution of any action,
whenever necessary or convenient. There is no rule that limits depositiontaking only to the period of pre-trial or before it; no prohibition against the
taking of depositions after pre-trial. Indeed, the law authorizes the taking of
depositions of witnesses before or after an appeal is taken from the
judgment of a Regional Trial Court "to perpetuate their testimony for use in
the event of further proceedings in the said court" (Rule 134, Rules of
Court), and even during the process of execution of a final and executory
judgment (East Asiatic Co. v. C.I.R., 40 SCRA 521, 544).

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Of course the deposition-taking in the case at bar is a "departure from the

accepted and usual judicial proceedings of examining witnesses in open
court where their demeanor could be observed by the trial judge;" but the
procedure is not on that account rendered illegal nor is the deposition
thereby taken, inadmissible. It precisely falls within one of the exceptions
where the law permits such a situation, i.e., the use of deposition in lieu of
the actual appearance and testimony of the deponent in open court and
without being "subject to the prying eyes and probing questions of the
Judge." This is allowed provided the deposition is taken in accordance with
the applicable provisions of the Rules of Court and the existence of any of
the exceptions for its admissibility e.g., "that the witness if out of the
province and at a greater distance than fifty (50) kilometers from the place
of trial or hearing, or is out of the Philippines, unless it appears that his
absence was procured by the party offering the deposition; or . . . that the
witness is unable to attend to testify because of age, sickness, infirmity, or
imprisonment, etc." (Sec. 4 Rule 24,supra, emphasis supplied) is first
satisfactorily established (See Lopez v. Maceren, 95 Phil. 754).
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Page
One other word. In its Order of July 5, 1991 denying Dasmarias motion
for reconsideration of the earlier order dated March 15, 1991 (allowing the
taking of deposition by commission) one of the reasons adduced by the
Regional Trial Court for the denial was that the motion had been "filed out
of time." Evidently, the Trial Court reached this conclusion because, as the
record discloses, the motion for reconsideration was filed by Dasmarias
on June 25, 1991, twenty-five (25) days after notice (on May 20, 1991) of
40
The Regional Trial Court saw fit to permit the taking of the depositions of
the witnesses in question only by written interrogatories, removing the
proponent's option to take them by oral examination, i.e., by going to Taipei
and actually questioning the witnesses verbally with the questions and
answers and observations of the parties being recorded stenographically.
The imposition of such a limitation, and the determination of the cause
thereof, are to be sure within the Court's discretion. The ostensible reason
given by the Trial Court for the condition that the deposition be taken
"only upon written interrogatories" is "so as to give defendant
(Dasmarias) the opportunity to cross-examine the witnesses by serving
cross-interrogatories." The statement implies that opportunity to crossexamine will not be accorded the defendant if the depositions were to be
taken upon oral examination, which, of course, is not true. For even if the
depositions were to be taken on oral examination in Taipei, the adverse
party is still accorded full right to cross-examine the deponents by the law,
either by proceeding to Taipei and there conducting the cross-examination
orally, or opting to conduct said cross-examination merely by serving crossinterrogatories.

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the Order of March 15, 1991 sought to be reconsidered. Denial of the

motion on such a ground is incorrect. In the first place, it appears that there
was a motion for extension of time to file a motion for reconsideration,
ending on June 25, 1991 which was however not acted on or granted by
the Court. More importantly, the order sought to be reconsidered is
an interlocutory order, in respect of which there is no provision of law fixing
the time within which reconsideration thereof should be sought.
PREMISES CONSIDERED, the Court Resolved to DISMISS the petition for
review on certiorari. Costs against petitioner.
SO ORDERED.
JOWEL SALES,
Petitioner,
G.R. No. 133154

Present:
- versus -
PANGANIBAN, J., Chairman

SANDOVAL-GUTIERREZ,
CORONA,
CARPIO MORALES, and
GARCIA, JJ.
Promulgated:
CYRIL A. SABINO,
December 9, 2005
Respondent.
x-----------------------------------------------------------------------------------x
DECISION
Page
Assailed and sought to be set aside in this petition for review

on certiorari under Rule 45 of the Rules of Court are the following
issuances of the Court of Appeals (CA) in CA-G.R. SP No. 44078, to wit:
41
GARCIA, J.:
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1. Decision[1] dated January 20, 1998, affirming an earlier order of

the Regional Trial Court, Branch 152, National Capital Judicial
Region, which admitted the deposition of one Buaneres Corral
as part of respondents evidence in an action for damages; and
2. Resolution[2] dated March 22, 1998, denying petitioners motion
for reconsideration.
Briefly, the facts may be stated as follows:

On February 20, 1995, in the Regional Trial Court (RTC)
at Pasig City, Metro Manila, herein respondent Cyril A. Sabino filed an
amended complaint[3] for damages against, among others, herein
petitioner Jowel Sales, driver of the vehicle involved in the accident
which ultimately caused the death of respondents son, Elbert.
Before any responsive pleading could be filed, respondent, as
plaintiff a quo, notified the defendants that he will take the deposition of
one Buaneres Corral before the Clerk of Court, RTC- Pasig City.
On December 27, 1995 and resumed on January 3, 1996, the
deposition on oral examination of Buaneres Corral was taken before the
Clerk of Court of Pasig, in the presence and with the active participation
of petitioners counsel, Atty. Roldan Villacorta, who even lengthily crossexamined the deponent. In the course of trial, respondent had the
deposition of Buaneres Corral marked as her Exhibits DD[4] and
EE[5], with submarkings.
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Page
Petitioner opposed the admission of Exhs. DD and EE and

even asked that they be expunged from the records on the ground that
the jurisdictional requirements for their admission under Section 4, Rule
23 of the Rules of Court, infra, were not complied with. He also
42
Upon conclusion of her evidentiary presentation, respondent made

a Formal Offer of Exhibits,[6] among which are Exhibits DD and EE.
Likewise offered in evidence as Exhibit BB[7] is a certification from the
Bureau of Immigration attesting to the May 28, 1996 departure for
abroad of Buaneres Corral via Flight No. PR 658.

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downplayed the evidentiary value of Exhibit BB for reasons he would

repeat in this petition.
In its order of February 3, 1997,[8] the trial court admitted, among
other evidence, respondents Exhibits DD, EE and BB. With his
motion for reconsideration[9] having been denied by the court in its
subsequent order of March 25, 1997,[10] petitioner went on certiorari to
the Court of Appeals in CA-G.R. SP No. 44078, imputing grave abuse of
discretion on the part of the trial court in admitting in evidence the
deposition in question (Exhibits DD and EE).
As stated at the threshold hereof, the appellate court, in the herein
assailed decision dated January 20, 1998,[11]upheld the trial court and
effectively denied due course to and dismissed petitioners recourse,
explaining, inter alia, that petitioners active participation, through
counsel, during the taking of subject deposition and adopting it as his
own exhibits, has thereby estopped him from assailing the admissibility
thereof as part of respondents evidence. His motion for reconsideration
having been denied by the appellate court in its equally assailed
resolution of March 22, 1998, petitioner is now with us via the instant
petition, raising the following issues of his own formulation:
1. Whether or not the requirements of Section 4, Rule 24 (now
Section 3) of the Revised Rules of Court were satisfied by the
respondent when it presented a certification attesting to the fact that
deponent has left the country but silent as to whether or not at the
time his deposition was offered in evidence is in the Philippines
2. Whether or not the petitioner in cross-examining the
deponent during the taking of his deposition waived any and all
objections in connection therewith.[12]
The petition lacks merit.
43
Section 4, Rule 23[13] of the Rules of Court, upon which petitioner

mounts his challenge to the admission in evidence of the subject
deposition, pertinently reads:
Page
SEC. 4. Use of depositions.- At the trial . . . any part or all of a

deposition, so far as admissible under the rules of evidence, may be
used against any party who was present or represented at the taking of
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the deposition or who had due notice thereof, in accordance with any
of the following provisions:
xxx
xxx
xxx
(c) The deposition of a witness, whether or not a party, may be

used by any party for any purpose if the court finds: (1) that the
witness is dead; or (2) that the witness resides at a distance more
than one hundred (100) kilometers from the place of trial or
hearing, or is out of the Philippines, unless it appears that his
absence was procured by the party offering the deposition; or (3)
that the witness is unable to attend or testify because of age,
sickness, infirmity, or imprisonment; or (4) that the party
offering the deposition has been unable to procure the attendance
of the witness by subpoena; or (5) upon application and notice,
that such exception circumstances exist and with due regard to
the importance of presenting the testimony of witnesses orally in
open court, to allow the deposition to be used. (Emphasis
supplied).
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Page
While depositions may be used as evidence in court proceedings,

they are generally not meant to be a substitute for the actual testimony
in open court of a party or witness. Stated a bit differently, a deposition
is not to be used when the deponent is at hand.[14] Indeed, any
deposition offered during a trial to prove the facts therein set out, in lieu
of the actual oral testimony of the deponent in open court, may be
opposed and excluded on the ground of hearsay. However, depositions
may be used without the deponent being called to the witness stand by
the proponent, provided the existence of certain conditions is first
satisfactorily established. Five (5) exceptions for the admissibility of a
44
It is petitioners posture that none of the above conditions exists in

this case to justify the admission in evidence of respondents Exhibits
DD and EE. Hence, it was error for the appellate court to have
upheld the admission thereof by the trial court. Discounting the
probative value of the certification from the Bureau of Immigration (Exh.
BB) that deponent Buaneres Corral departed for abroad on May 28,
1996, petitioner argues that said certification merely proves the fact of
Corral having left the country on the date therein mentioned. It does
not, however, establish that he has not returned since then and is
unavailable to be present in court to personally testify.

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deposition are listed in Section 4, Rule 23, supra, of the Rules of Court.
Among these is when the witness is out of thePhilippines.
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Page
Given the foregoing perspective, the second issue of whether or

not petitioner is estopped from objecting to the use of Corrals
deposition as part of respondents evidence is really no longer
determinative of the outcome of this case, and need not detain us long.
Suffice it to state that, as a rule, the inadmissibility of testimony taken
by deposition is anchored on the ground that such testimony is
hearsay, i.e., the party against whom it is offered has no opportunity to
cross-examine the deponent at the time his testimony is offered. But as
jurisprudence teaches, it matters not that opportunity for crossexamination was afforded during the taking of the deposition; for
normally, the opportunity for cross-examination must be accorded a
party at the time the testimonial evidence is actually presented against
him during the trial or hearing.[16] In fine, the act of cross-examining
the deponent during the taking of the deposition cannot, without more,
be considered a waiver of the right to object to its admissibility as
evidence in the trial proper. In participating, therefore, in the taking of
the deposition, but objecting to its admissibility in court as evidence,
petitioner did not assume inconsistent positions. He is not, thus,
estopped from challenging the admissibility of the deposition just
because he participated in the taking thereof.
45
The trial court had determined that deponent Bueneres Corral was
abroad when the offer of his deposition was made. This factual finding
of absence or unavailability of witness to testify deserves respect, having
been adequately substantiated. As it were, the certification by the
Bureau of Immigration Exh. BB- provides that evidentiary support.
Accordingly, the attribution of grave abuse of discretion on the part of
the trial court must be struck down. It has been said to be customary
for courts to accept statements of parties as to the unavailability of a
witness as a predicate to the use of depositions.[15] Had deponent
Buaneres Corral indeed returned to the Philippines subsequent to his
departurevia Flight No. PR 658, petitioner could have presented
evidence to show that such was the case. As it is, however, the
petitioner does not even assert the return as a fact, only offering it as a
possibility since no contrary proof had been adduced.

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Lest it be overlooked, Section 29, Rule 23 of the Rules of Court, no

less, lends support to the conclusion just made. In gist, it provides that,
while errors and irregularities in depositions as to notice, qualifications
of the officer conducting the deposition, and manner of taking the
deposition are deemed waived if not objected to before or during the
taking of the deposition, objections to the competency of a witness or
the competency, relevancy, or materiality of testimony may be made for
the first time at the trial and need not be made at the time of the taking
of the deposition, unless they could be obviated at that point.[17]
While
perhaps a bit anti-climactic to state at this

point, certiorari will not lie against an order admitting or rejecting a
deposition in evidence, the remedy being an appeal from the final
judgment.[18] For this singular reason alone, the appellate court could
have had already dismissed herein petitioners invocation of
its certiorari jurisdiction.
WHEREFORE, the instant petition is hereby DENIED.
Costs against petitioner.
Page
46
SO ORDERED.
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HEIRS OF PANFILO F. ABALOS,[1]

Petitioners,
G.R. No. 156224

Present:
PUNO, C.J., Chairperson,
SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
LEONARDO-DE CASTRO, JJ.
- versus -
AURORA A. BUCAL, DEMETRIO

BUCAL, ARTEMIO F. ABALOS,
LIGAYA U. ABALOS, ROMULO
F. ABALOS, JESUSA O. ABALOS,
MAURO F. ABALOS
and
LUZVIMINDA R. ABALOS,
Promulgated:
Respondents.
February 19, 2008

X --------------------------------------------------------------------------------------- X
DECISION
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Page
This petition for review on certiorari under Rule 45 of the Rules on Civil
Procedure assails the August 31, 2001 Decision[2]and November 20, 2002
Resolution[3] of the Court of Appeals (CA) in CA-G.R. CV No. 39138, which
47
AZCUNA, J.:

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affirmed with modification the May 25, 1992 Decision[4] of the Regional Trial
Court (RTC) of Lingayen, Pangasinan, Branch 39, in Civil Case No. 16289.
Prologue
On October 30, 1978, petitioners father, Panfilo Abalos, filed before the
RTC of Lingayen, Pangasinan, a complaint[5]docketed as Civil Case No.
15465 for Partition, Annulment of Certain Documents, Accounting and
Damages against Faustino Abalos, his brother, and Danilo Abalos, his nephew
and the only surviving heir of his brother Pedro Abalos. In the amended
complaint,[6] Panfilo alleged that their father/grandfather, Francisco Abalos,
died intestate and was survived by his wife, Teodorica, and their children,
namely: Maria, Faustino, Pedro, Roman and Panfilo; that at the time of his
death, Francisco left the following real properties:
xxx
a.)
A parcel of residential land situated in Linoc, Binmaley,

Pangasinan, containing an area of 1,020 sq. meters, bounded on
the North by Leoncio Dalmacio; On the East by Dimas Perez;
On the South by Callejon; And on the West by Magno
Dalmacio; declared under Tax Declaration No. 121 in the name
of Francisco Abalos and assessed at P255.50; [n]ot registered
under Act 496 [or] under the Spanish [M]ortgaged Law[;]
b.)
A parcel of unirrigated riceland situated in Linoc, Binmaley,

Pangasinan, containing an area of 841 sq. meters, bounded on
the North by Callejon; On the South by Roberto Aquino; On the
East by Eulalio Javier; And on the West by Hipolito Perez. It is
originally covered by Tax Declaration in the name of Francisco
Abalos now covered by Tax Declaration No. 14457 in the name
of Faustino Abalos and assessed at P20.00[;] [n]ot registered
under Act 496 [or] under the Spanish [M]ortgaged Law;
c.)

the North by Callejon; On the East by Estanislao Ferrer; On the
South by Saturnino Aquino; And on the West by Hipolito
Perez[.] It is originally declared in the name of Francisco Abalos
and now covered by Tax Declaration No. 14458 in the name of
Faustino Abalos and assessed at P30.00;
48
xxx
Page
xxx
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d.)
A parcel of fishpond situated in Linoc, Binmaley, Pangasinan,

containing an area of 1,158 sq. meters, bounded on the North by
Doyao River; On the East by Hipolito Perez; On the South by
Leoncio Dalmacio; And on the West by Teodoro Abalos. It is
originally declared in the [name] of Francisco Abalos and now
covered by Tax Declaration No. 21592 in the name of Faustino
Abalos and assessed at P370.00;
e.)
A parcel of fishpond situated in Linoc, Binmaley, Pangasinan,

containing an area of 1,158 sq. meters, bounded on the North by
Leoncio Dalmacio; On the East by Teodoro Abalos; On the
South by Leoncio Dalmacio; And on the West by Evaristo
Dalmacio. It is originally declared in the name of Francisco
Abalos and now covered by Tax Declaration No. 21591 in the
name of Faustino Abalos and assessed at P370.00;
f.)

Pangasinan, containing an area of 950 sq. meters[,] bounded on
the North by Liberato Gonzalo; On the East by Severina
Catalan; On the South by Severina Catalan; And on the West by
Barrio Road of Linoc[;] [d]eclared under Tax Declaration No.
124 in the [name] of Francisco Abalos and [a]ssessed at P20.00;
g.)
A parcel of fishpond situated in Canaoalan, Binmaley,

the North by Francisco Deogracias; On the East by a Path; On
the South by Ponciano Cayabyab; And on the West by Ponciano
Cayabyab[;] [d]eclared under Tax Declaration No. 122 in the
name of Francisco Abalos and assessed at P70.00;
h.)
A parcel of fishpond situated in Canaoalan, Binmaley,

the North by Adriano Gonzalo; On the East by Florencio Perez;
On the South by Pioquinto Ferrer; And on the West by Pator
Terrado[;] [d]eclared under Tax Declaration No. 123 in the name
of Francisco Abalos and assessed at P60.00;
i.)
A parcel of little fishpond adjoining and North of the land

described in paragraph 4 sub-paragraph (a) of this complaint
whose Tax Declaration could not be produced by the plaintiff;[7]
xxx
49
xxx
Page
xxx
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that said properties were administered by Teodorica; that following their

mothers death, there was a verbal agreement among Faustino, Pedro and
Panfilo that Faustino would administer all the properties left by their parents
except those given by Teodorica to each of the siblings as their partial advance
inheritance; that taking undue advantage of his position and in clear breach of
the trust and confidence reposed on him, Faustino, by means of fraud and
machination, took possession of the properties given to Maria and Roman upon
their death and transferred some of the administered properties in his name
and/or in the name of his heirs or disposed of them in favor of third parties; that
since his administration of the properties, Faustino has not made any accounting
of the produce, appropriating them almost to himself; and that Panfilo
repeatedly demanded the partition of the properties but Faustino refused to do
so despite earnest efforts towards amicable settlement.
After Panfilo rested his case and following the postponements at the
instance of defendants, the trial court, upon motion, declared that Faustino and
Danilo were deemed to have waived their right to present
evidence.[8] On February 21, 1984, RTC Branch 37 of Lingayen, Pangasinan,
rendered its Decision,[9] the dispositive portion of which stated:
WHEREFORE, judgment is hereby rendered ordering:
the partition of the intestate estate of the deceased
Francisco Abalos in the following manner
a. to the plaintiff, Panfilo Abalos, is the fishpond,
Parcel D referred to as Duyao; and of fishpond,
Parcel H referred to as Pinirat plus his advance
inheritance, Parcel F referred to as Manga;
b. to defendant, Faustino Abalos, is the residential land
where his house stands and parcels A to I, plus his
advance inheritance, Parcels [B] and C;
50
c. to defendant, Danilo Abalos, is that fishpond, parcel

E referred to as Emong, and the portion of the
fishpond, Parcel H referred to as Pinirat and his
advance inheritance of his father Pedro Abalos,
Parcel G.
Page
i.
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ii.
the defendant Faustino Abalos to reimburse to plaintiff the

total amount of P19,580.00, Philippine Currency, as plaintiffs
lawful share from 1944;
iii.
the annulment of all documents and/or instruments which

transferred said properties and are considered inconsistent with
the above partition;
iv.
the dismissal of defendants counterclaim;
v.
the defendants to pay the costs of the suit.

SO ORDERED.[10]
Despite the filing of a notice of appeal beyond the reglementary period,

the trial court still gave due course to the appeal of Faustino and Danilo; thus,
Panfilo filed a petition for certiorari before this Court, which subsequently
referred the case to the Intermediate Appellate Court (IAC, now the Court of
Appeals).[11] The IAC granted the petition and denied the motion for
reconsideration.[12] On October 30, 1985, this Court affirmed the
Decision.[13] Upon the issuance of an entry of judgment onNovember 4, 1985,
the IAC ordered the remand of the case to the RTC.[14] Thereafter,
on December 11, 1985, the trial court issued a writ of execution in favor of
Panfilo.[15]
The Case
The instant case arose when petitioners father, Panfilo, began to execute
the Decision in Civil Case No. 15465. In opposition, respondents, who are
children and in-laws of the now deceased Faustino, filed on January 8, 1986 a
case for Quieting of Title, Possession, Annulment of Document and Damages
with Preliminary Injunction.[16] Docketed as Civil Case No. 16289, the
complaint alleged, among others, that:
xxx
xxx
xxx
51
III
Page
Plaintiffs are the absolute owners and in actual possession of

the following parcels of land more particularly described, to wit:
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(a.) A parcel of land (fishpond) with an approximate area of

289.5 square meters, more or less, located at Linoc, Binmaley,
Pangasinan. Bounded on the North by the Duyao River; on the East
by Faustino Abalos before, now Romulo Abalos; on the South by
Leoncio Dalmacio; and on the West by Romulo Abalos. Declared in
the name of Aurora A. Bucal under Tax [Dec.] No. 1568 of the
current land records of Binmaley, Pangasinan; assessed value
P150.00;
(b.) A parcel of riceland located at Linoc, Binmaley,
Pangasinan, containing an area of 1,196 square meters, more or less.
Bounded on the North by Callejon; on the East by Estanislao Ferrer;
on the South by Saturnino Aquino; and on the West by Hipolito
Ferrer. Declared in the names of Artemio F. Abalos and Mauro F.
Abalos under Tax [Dec.] No. 1007 of the land records of Binmaley,
Pangasinan; assessed value P260.00;
(c.) A parcel of residential land located at Linoc, Binmaley,
Pangasinan, with an area of 1,029 square meters, more or less.
Bounded on the North by Leoncio Dalmacio; on the East by Dimas
Perez; on the South by Callejon; and on the West by Magno
Dalmacio. Declared in the name of Romulo F. Abalos under Tax
[Dec.] No. 35 of the current land records of Binmaley, Pangasinan;
assessed value P6,120.00;
(d.) A portion of fishpond located at Linoc, Binmaley,
Pangasinan, with an area of 289.5 square meters, more or less.
Bounded on the North by the Duyao River; on the East by Faustino
Abalos; on the South by Leoncio Dalmacio; and on the West by
Teodoro Abalos. Declared in the name of Romulo F. Abalos under
Tax [Dec.] No. 33 of the current land records of Binmaley,
52
(e.) A portion (eastern) of fishpond located at Linoc, Binmaley,

Pangasinan, with an area of 579 square meters, more or less. Bounded
on the North by Leoncio Dalmacio; on the East by Teodoro Abalos;
on the South by Leoncio Abalos; and on the West by Evaristo
Dalmacio. Declared in the names of Artemio F. Abalos and Mauro F.
Page
(f.) A parcel of fishpond located at Canaoalan, Binmaley,

Pangasinan, with an area of 1,506 square meters, more or less.
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Bounded on the North by Adriano Gonzalo; on the East by Florencio

Perez; on the South by Pioquinto Ferrer; and on the West by Pastor
Terrado. Declared in the names of Romulo F. Abalos and Mauro F.
IV
Parcel (a) above-described belongs in absolute ownership to
spouses Aurora A. Bucal and Demetrio Bucal who are in actual
possession thereof as such, having acquired the same by absolute sale
from Romulo F. Abalos who in turn bought the same from Maria
Abalos; that the latter in turn acquired the same by inheritance from
her deceased parents, Francisco Abalos and Teodorica Ferrer, who
died on May 4, 1928 and June 2, 1945, respectively. A copy of the
sale from Maria Abalos to Romulo F. Abalos is hereto attached as
ANNEX A while the sale by Romulo F. Abalos to Aurora A. Bucal
is hereto attached as ANNEX B. A copy of Tax [Dec.] No. 1568
covering said land is hereto attached as ANNEX C;
V
Parcel (b) above-described belongs in absolute common
ownership to the spouses Artemio F. Abalos and Ligaya U. Abalos
and spouses Mauro F. Abalos and Luzviminda R. Abalos who
acquired the same by absolute sale in 1978 from Faustino Abalos as
shown by a deed a copy of which is hereto attached as ANNEX D;
that the latter acquired the same by absolute sale from Bernardo
Victorio in 1914, and that Faustino Abalos donated the same in
consideration of his marriage with Teodora Ferrer as shown by a deed
a copy of which is hereto attached as ANNEX E. A copy of Tax
[Dec.] No. 1007 is hereto attached as ANNEX F;
VI
Page
53
Parcel (c) above-described belongs in absolute ownership to

the spouses Romulo F. Abalos and Jesusa O. Abalos and are in actual
possession as such having acquired the same by absolute sale from
Aurora A. Bucal as shown by a deed a copy of which is hereto
attached as ANNEX G; that Aurora A. Bucal in turn bought the
same from Maria Abalos as shown by a deed a copy of which is
hereto attached as ANNEX H; and that Maria Abalos inherited the
same land from her deceased parents;
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VII
Parcel (d) above-described belongs in absolute ownership to
spouses Romulo F. Abalos and Jesusa O. Abalos having acquired the
same in 1978 by means of a deed of quitclaim and renunciation of
rights a copy of which is hereto attached as ANNEX I; that Romulo
F. Abalos declared the same for taxation purposes as shown by Tax
[Dec.] No. 33 a copy of which is hereto attached as ANNEX J;
VIII
Parcel (e) above-described belongs in common absolute
ownership to the spouses Artemio F. Abalos and Ligaya U. Abalos
and spouses Mauro F. Abalos and Luzviminda R. Abalos having
acquired the same from Maria Abalos as shown by two (2) documents
copies of which are hereto attached as ANNEXES K and L; that
Faustino and Maria bought the same from Genoveva Perez as shown
by a deed a copy of which is hereto attached as ANNEX M; that
Genoveva Perez in turn bought the same from Teodoro Abalos as
shown by a deed a copy of which is hereto attached as ANNEX N;
that Mauro F. Abalos and Artemio F. Abalos have declared the land
in their names for taxation purposes as shown by Tax [Dec.] No.
1009 a copy of which is hereto attached as ANNEX O;
IX
Parcel (f) above-described belongs in absolute common
ownership to spouses Romulo F. Abalos and Jesusa O. Abalos and
spouses Mauro F. Abalos and Luzviminda R. Abalos and are in actual
possession as such having acquired the same by absolute sale in 1978
as shown by a deed a copy of which is hereto attached as ANNEX
P; that Faustino in turn inherited the same from his deceased
parents; and that the present owners have declared the same for
taxation purposes as shown by Tax [Dec.] No. 1314 a copy of which
is hereto attached as ANNEX Q;
54
X
Page
The possession of the present owners as well as their

predecessors-in-interest have always been in good faith, peaceful,
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public, exclusive, adverse, continuous and in the concept of absolute

owners since their respective acquisition [up to] the present without
question from anyone, much less from the defendant herein. Said
owners have likewise religiously paid the taxes due on the lands [up
to] the current year;[17]
xxx
xxx
xxx
Respondents claimed that on two separate occasions in December 1985

Panfilo sought to execute the decision by attempting to take possession of the
lands in question through the use of force, threat, violence and intimidation. In
addition, to satisfy the damages awarded to Panfilo, the deputy sheriff also
levied upon parcels (b) and (c) above-described for the purpose of selling the
same at public auction, in regard to which they also filed their respective notice
of third-party claim. Respondents argued that to compel them to abide by the
writ of execution and notice of levy issued by the court in Civil Case No. 15465
would amount to deprivation of property without due process of law because the
decision rendered in said case is not binding upon them as they were not made
parties thereto and they became owners thereof prior to the institution of the
case.
On January 8, 1986, the trial court directed the parties to maintain
the status quo pending the resolution on the motion for the issuance of the writ
of preliminary injunction.[18][19]
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Page
On July 21, 1986, however, the trial court ordered the issuance of a writ
of preliminary injunction.[23] Concurring with the position of respondents, it
held that the principle of res judicata does not apply since there is no identity of
55
In the Objection to the Issuance of Writ of Preliminary

Injunction,[20] Answer,[21] and Memorandum of Authorities[22]filed by Panfilo,
he stressed that the title, right or interest of respondents with respect to the
fishponds mentioned in sub-paragraphs (a), (d), and (f) of paragraph III of the
Complaint had already been declared null and void in Civil Case No. 15465 by
a co-equal and competent court and affirmed with finality by this Court. It was
averred that respondents were never in possession of the fishponds as he was
the one peacefully placed in its possession by the deputy sheriff. For failing to
intervene in Civil Case No. 15465, Panfilo asserted that respondents are now
barred by the principles of res judicata and estoppel in pais.

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parties, subject matter, and causes of action between Civil Case No. 15465 and
the present case. In Civil Case No. 15465, the parties are Panfilo, as plaintiff,
and Faustino Abalos and Danilo Abalos, as defendants, while in the present
case, the parties are the children of Faustino Abalos and their respective
spouses, as plaintiffs, and Panfilo, as defendant; in the former, the principal
action is for partition while in the latter, the suit is for quieting of title,
possession, annulment of document and damages. The trial court opined that
while it is true that respondents Aurora, Artemio, Romulo, and Mauro are
legitimate children and compulsory heirs of Faustino Abalos, the documents
showing their acquisition of the properties in question revealed that they
became owners thereof not through their father alone but also by way of third
persons who were not parties in Civil Case No. 15465. Moreover, they acquired
their ownership prior to the institution of said case.
Assailing the aforesaid Order, Panfilo filed a petition for certiorari before
this Court. In a Resolution, the petition was referred to the CA, which later
dismissed the same for lack of merit .[24] The CA ruled that, for not being
impleaded as parties, respondents are considered as third persons in Civil
Case No. 15465 since they did not in any way participate or intervene in the
partition. Neither did the trial court violate the principle that no court has the
power to interfere by injunction with the judgments or decrees of a court of
concurrent or coordinate jurisdiction having equal power. The CA viewed that
the writ of execution was issued for the specific purpose of levying upon the
properties of Faustino Abalos, not that of respondents, as the judgment debtor in
Civil Case No. 15465.
Page
Upon motion of respondents, the trial court ordered the issuance of

an alias writ of preliminary injunction on March 14, 1989.[26] Again, Panfilo
challenged the order via petition for certiorari with prohibition before the CA
but the same was denied.[27]When the incident was elevated to this Court, it was
dismissed on November 15, 1989. The resolution became final and executory
on February 9, 1990.[28]
56
On December 16, 1987, this Court, in G.R. No. 77965 entitled Panfilo
Abalos v. Aurora Bucal, et al. and Court of Appeals,affirmed the CA decision,
which resolution became final and executory on August 2, 1988.[25]
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Meanwhile, in the proceedings before the trial court, Panfilo and

respondents submitted their respective pre-trial briefs.[29] On October 23, 1989,
the trial court issued the Pre-trial Order.[30] Taking into account the admissions
made by the parties, particularly the fact that Panfilo claimed proprietary rights
only with respect to parcels (a), (d) and (f) mentioned in the complaint, the court
delimited the issues for resolution as follows:
The factual issues are: (1) With respect to parcels A, D, and F,
whether or not the plaintiffs claiming ownership and possession over
said parcels are the lawful owners and possessors thereof by virtue of
genuine and duly executed documents of sale, quitclaim and
renunciation of rights; (2) Whether or not plaintiffs predecessors-ininterest were the lawful owners and possessors of parcels A, D and F;
(3) Whether or not Faustino Abalos and his wife [Teodorica] Ferrer
were awarded the properties subject of partition proceedings in Civil
Case No. 15465; (4) Whether or not by virtue of the decision
rendered in that partition proceedings, the fishpond referred to as
Duyao which is parcel A, D and F was awarded; (5) Whether or not
pursuant to the decision of the Supreme Court in appealed case No.
713355 the defendant Panfilo Abalos was placed in possession by the
Deputy Sheriff Romulo Jimenez duly assisted by the members of the
police force of Binmaley, sometime on or about the last part of
December 1985.
The legal issues are: (1) Whether or not the decision in Civil
Case No. 15465 entitled Panfilo Abalos versus Faustino Abalos[] is
binding upon the plaintiffs who were not impleaded as party litigants
either as plaintiffs or defendants; (2) What is the legal basis of the
plaintiffs to file action to quiet title against the defendant? [31]
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Thus, the controversy was narrowed down to only two (2) properties,
namely: the fishpond located at Linoc, Binmaley, Pangasinan, locally known
as Duyao, and the fishpond located at Canaoalan, Binmaley, Pangasinan, locally
known as Pinirat.
57
Likewise, in the course of the trial and in their respective

memoranda,[32] the parties admitted that parcels (a) and (d) are portions of a
fishpond locally known as Duyao[33] and are parts of parcel (d) stated in the
Complaint of Civil Case No. 15465, which was to be held in common proindiviso by the heirs of Francisco Abalos.

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On May 25, 1992, RTC Branch 39 of Lingayen, Pangasinan, rendered its

Decision,[34] ordering thus:
WHEREFORE, judgment is hereby rendered declaring:
1. That the plaintiffs-spouses Aurora Bucal and
Demetrio Bucal are the absolute owners of onefourth () portion pro-indiviso of that fishpond
which is locally known as Duyao;
2. That the defendant Panfilo Abalos is the absolute
owner of three-fourth () portion pro-indiviso of that
fishpond locally known as Duyao;
3. That the plaintiffs have no right whatsoever over the
fishpond locally known as Pinirat and confirming
the adjudication thereof in Civil Case No. 15465;
[and]
4. No award of damages, and no costs.
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The trial court made the following factual findings: that the original
owners of the two fishponds were spouses Francisco Abalos and Teodorica
Ferrer, who died on May 4, 1928 and June 2, 1945, respectively; that the
spouses had five (5) children, namely: (a) Maria, who died single on March 20,
1972; (b) Roman, who died single on June 10, 1944; (c) Panfilo, petitioner
herein; (d) Pedro, who died on May 11, 1971 and was survived by his only
child, Danilo; and (e) Faustino, whose children Aurora, Artemio, Romulo and
Mauro are among the respondents herein; that Roman predeceased his mother,
hence, when the latter died only four of the siblings inherited the Duyao,
becoming its pro-indiviso co-owners; that on November 11, 1968, Maria sold
her share to Romulo, who, in turn, sold the same to Aurora; that in view of
the sale, the said portion of the Duyao should have been excluded from the
Decision in Civil Case No. 15465 for the reason that said case refers to the
partition of the estate only of spouses Francisco and Teodorica; that Romulo is
not the owner the other portion of the Duyao for failure to establish his
ownership thereon and also considering that it could have been the same
portion that he sold to Aurora; and that the Decision in Civil Case No. 15465
58
SO ORDERED.[35]

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has res judicata effect with respect to the Pinirat since the deed of sale executed
by Faustino in favor of Romulo and Mauro was simulated and employed merely
to defraud the other heirs.
Both Panfilo and respondents elevated the case to the CA, assigning the
alleged errors of the trial court:
As to Panfilo
1. THE LOWER COURT ERRED IN ADJUDICATING ONEFOURTH PORTION OF THE FISHPOND KNOWN AS
DUYAO TO PLAINTIFFS DEMETRIO BUCAL AND
AURORA ABALOS- BUCAL, NOTWITHSTANDING THAT
SAID ENTIRE FISHPOND WAS AWARDED TO
DEFENDANT PANFILO ABALOS IN CIVIL CASE NO. 15465,
ENTITLED PANFILO ABALOS VS. FAUSTINO ABALOS &
DANILO ABALOS.
AURORA ABALOS-BUCAL, AS ALLEGED INHERITANCE
OF MARIA ABALOS FROM HER LATE PARENTS,
NOTWITHSTANDING THAT MARIA ABALOS ALREADY
INHERITED FROM HER LATE PARENTS THE PARCEL OF
RESIDENTIAL LAND DESCRIBED AS PARCEL (C) IN
PLAINTIFFS COMPLAINT.
AURORA ABALOS-BUCAL, NOTWITHSTANDING THAT
THE FINAL DECISION IN CIVIL CASE [15465] EXPRESSLY
ANNULLED ALL DOCUMENTS AND INSTRUMENTS
WHICH TRANSFERRED SAID PROPERTIES AND ARE
CONSIDERED INCONSISTENT WITH THE PARTITION
ORDERED IN SAID CIVIL CASE.
59
4. THE LOWER COURT ERRED IN NOT TREATING THE

PLAINTIFFS AS IN ESTOPPEL.
Page
5. THE LOWER COURT HAD NO JURISDICTION OVER THE

SUBJECT MATTER OF THE PRESENT CASE.[36]
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As to respondents
1. THE TRIAL COURT ERRED IN NOT FINDING THAT THE
LATE SPOUSES FRANCISCO ABALOS AND TEODORICA
FERRER LEFT AN INTESTATE ESTATE CONSISTING OF
FIVE PARCELS OF LAND ONLY.
2. THE TRIAL COURT ERRED IN NOT FINDING THAT ONEFOURTH PRO INDIVISO OF THE LAND KNOWN AS
[DUYAO] WAS THE SHARE OF FAUSTINO ABALOS,
WHICH HE QUITCLAIMED IN FAVOR OF HIS SON
ROMULO ABALOS, AND IN APPLYING RES JUDICATA.
3. THE TRIAL COURT ERRED IN NOT FINDING THAT THE
LAND KNOWN AS PINIRAT WAS THE SHARE OF
FAUSTINO ABALOS, WHICH HE SOLD TO HIS SONS, THE
PLAINTIFFS ROMULO AND MAURO ABALOS, AND IN
APPLYING RES JUDICATA.
4. THE TRIAL COURT ERRED IN VOIDING THE
INSTRUMENTS OF TRANSFER EXECUTED BY FAUSTINO
ABALOS IN FAVOR OF ROMULO ABALOS OF HIS
SHARE OF THE [DUYAO] LOT AND IN FAVOR OF
MAURO ABALOS AND ROMULO ABALOS OF THE
PINIRAT LOT.
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On August 31, 2001, the CA rendered its Decision.[38] According to the

appellate court, the first and second assigned errors of Panfilo are unmeritorious
on the ground that the disposition of the trial court in Civil Case No. 15465
insofar as the Duyao is concerned has no factual and legal basis. It also held
untenable his third and fourth assigned errors, noting that the principles of res
judicata and estoppel are not applicable in this case since respondents were not
made parties to Civil Case No. 15465 despite their acquisition of the contested
parcels prior to the commencement of said case. Finally, Panfilos fifth
60
5. THE TRIAL COURT ERRED IN NOT UPHOLDING THE

CLAIM OF PLAINTIFF ROMULO ABALOS OVER OF THE
[DUYAO] LOT AND THE CLAIM OF PLAINTIFFS MAURO
ABALOS
AND
ROMULO
ABALOS
OVER
THE
[37]
[PINIRAT]LOT.

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assigned error was rejected, saying that this Court already settled the issue
of res judicata in G.R. No. 77965 when petitioner questioned the propriety of
the issuance of the writ of preliminary injunction.
On the other hand, the CA ruled that the first assigned error of
respondents was rendered moot and academic since it was stipulated and agreed
upon during the pre-trial of the present case that the dispute covers only parcels
(a), (d) and (f). The second assigned error, nonetheless, was affirmed,
observing that the Duyao property was co-owned pro-indiviso by the four
remaining children of spouses Francisco and Teodorica; hence, Faustinos
transfer of his share during his lifetime in favor of his son Romulo is
perfectly legal. However, the CA denied the third assigned error as it found that
the Pinirat was Roman Abalos advance legitime, which, upon his death, was
inherited by his remaining siblings. Since Maria subsequently died without
transferring her share, her part of the Pinirat should be divided among Pedro
(which is transmitted to Danilo), Faustino and Panfilo. As Faustinos share over
the Pinirat is with respect to 1/3 portion thereof, he could validly convey only
such part to Romulo and Mauro.
The CA disposed:
WHEREFORE, premises considered, the assailed Decision of
the court a quo in Civil Case No. 16289 is hereby modified, as
follows:
1. Being co-owners of Duyao Fishpond, plaintiffsappellants Spouses Aurora Bucal and Demetrio
Bucal, plaintiffs-appellants Spouses Romulo Abalos
and Jesusa O. Abalos, defendant-appellant Panfilo
Abalos and Danilo Abalos, in representation of his
deceased father, Pedro Abalos, should divide and
distribute the same equally;
Page
61
2. One-third of the Pinirat Fishpond is co-owned by

plaintiffs-appellants Spouses Romulo Abalos and
Jesus Abalos, and Spouses Mauro Abalos and
Luzviminda R. Abalos; That defendant-appellant
Panfilo Abalos is the sole owner of another 1/3
portion of the Pinirat fishpond; While the remaining
1/3 portion is for Danilo Abalos, in representation of
his deceased father Pedro Abalos;
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3. No pronouncement as to cost.
SO ORDERED.[39]
Panfilo moved for reconsideration of the Decision but was denied.[40]

Hence this petition.
Echoing the same grounds relied upon by their father, petitioners now
claim that the CA seriously erred in failing to consider the finality of the
Decision in Civil Case No. 15465. According to them, the finding that
respondents became owners of the subject properties prior to the institution of
said case in effect modified the disposition and distribution previously ordered.
Petitioners opine that when the CA ruled that respondents have acquired
ownership of the questioned parcels prior to the commencement of Civil Case
No. 15465 it had disregarded the conclusiveness of a final judgment rendered in
said case which decreed the annulment of all documents and/or instruments
transferring said properties and were considered inconsistent with the order of
partition. They contend that sustaining the conclusion of the CA would allow
the re-opening of the factual issue of whether the documents, which were the
source of respondents alleged title, were valid an issue that was dealt with in
an extensive hearing on the merits conducted in said case and supported by
testimonial and documentary evidence for the purpose. Being the prevailing
party in Civil Case No. 15465, in regard to which respondents had remained
silent and did not even care to intervene or question, petitioners assert that they
already acquired a vested right over the entire Duyao and portion of
the Pinirat. They also oppose the CAs failure to recognize that estoppel and
laches have already set in to bar respondents from further pursuing their claims.
Page
Res judicata means "a matter adjudged; a thing judicially acted upon or
decided; a thing or matter settled by judgment." Itlays the rule that an existing
final judgment or decree rendered on the merits, without fraud or collusion, by a
court of competent jurisdiction, upon any matter within its jurisdiction, is
conclusive of the rights of the parties or their privies, in all other actions or suits
62
The petition is not meritorious.
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in the same or any other judicial tribunal of concurrent jurisdiction on the points
and matters in issue in the first suit.[41]
For the preclusive effect of res judicata to be enforced, however, the
following requisites must be present: (1) the judgment or order sought to bar the
new action must be final; (2) the decision must have been rendered by a court
having jurisdiction over the subject matter and the parties; (3) the disposition of
the first case must be a judgment on the merits; and (4) there must be between
the first and second action, identity of parties, subject matter and causes of
action.[42]
In the instant case, the fourth requisite, in particular the identity of
parties, is clearly wanting.
As found by the CA, this Court, through our earlier resolution in G.R. No.
77965, already settled that res judicata does not apply in this case. In G.R. No.
77965, which Panfilo instituted to challenge the propriety of the writ of
preliminary injunction issued by the trial court, this Court agreed with the CAs
disposition that respondents are considered as third persons with respect to Civil
Case No. 15465 since they were not impleaded as defendants therein. This
Court held as in accordance with law and jurisprudence the CAs opinion that
all those who did not in any way participate or intervene in the partition case are
considered third persons within the contemplation of Article 499 of the Civil
Code.[43]
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Indeed, Panfilo, the father of petitioners, should have impleaded

respondents when he filed Civil Case No. 15465 since at that time the latter
were already claiming ownership over the subject fishponds, which were
transferred in their names prior to the commencement of the case. Petitioners
cannot shift to respondents the burden of joining the case because they are not
duty bound to intervene therein and they have every right to institute an
independent action: First, intervention is not compulsory or mandatory but
merely optional and permissive;[44] and Second, as the persons who are in actual
possession of the fishponds they claim to own, respondents may wait until their
possession are in fact disturbed before taking steps to vindicate their
rights. Understandably, at the time of the institution and pendency of Civil
63
The foregoing rule still stands.

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Case No. 15465, respondents still had no definite idea as to how the very nature
of the partition case could actually affect their possession.
On the other hand, Panfilo had personal knowledge that respondents
acquired ownership of the properties prior to the filing of Civil Case No. 15465,
that they are in actual possession thereof, and that they have declared the lands
in their names for taxation purposes. Panfilo could not be ignorant of these
because he resided in the same locality where the properties are found.[45] Quite
startling, however, is that he did not bother to implead respondents in the
partition case despite all these and the fact that the defendants therein raised the
point that Faustino was not the owner of some of the lands in question and that
they belong to others not parties to the case.[46] As his successors-in-interest,
petitioners must suffer from Panfilos evident omission.
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Page
Moreover, Panfilo erred in repeatedly believing that there was no

necessity to implead respondents as defendants in Civil Case No. 15465 since,
according to him, the necessary parties in a partition case are only the coowners or co-partners in the inheritance of Francisco Abalos. On the contrary,
the Rules of Court provides that in an action for partition, all other persons
interested in the property shall be joined as defendants.[48] Not only the co-heirs
but also all persons claiming interests or rights in the property subject of
partition are indispensable parties.[49] In the instant case, it is the responsibility
of Panfilo as plaintiff in Civil Case No. 15465 to implead all indispensable
parties, that is, not only Faustino and Danilo but also respondents in their
64
Even if res judicata requires not absolute but substantial identity of

parties, still there exists substantial identity only when the additional party
acts in the same capacity or is in privity with the parties in the former
action.[47] In this case, while it is true that respondents are legitimate children
and relatives by affinity of Faustino it is more important to remember that, as
shown by their documents of acquisition, they became owners of the subject
fishponds not through Faustino alone but also from a third person (i.e.,
Maria Abalos). Respondents are asserting their own rights and interests which
are distinct and separate from those of Faustinos claim as a hereditary heir of
Francisco Abalos. Hence, they cannot be considered as privies to the judgment
rendered in Civil Case No. 15465. Unfortunately for petitioners, they relied
solely on their untenable defense of res judicata instead of contesting the
genuineness and due execution of respondents documentary evidence.

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capacity as vendees and donees of the subject fishponds. Without their presence
in the suit the judgment of the court cannot attain real finality against
them. Being strangers to the first case, they are not bound by the decision
rendered therein; otherwise, they would be deprived of their constitutional right
to due process.[50]
Finally, it must be stressed that in a complaint for partition, the plaintiff
seeks, first, a declaration that he is a co-owner of the subject properties;
and second, the conveyance of his lawful shares. An action for partition is at
once an action for declaration of co-ownership and for segregation and
conveyance of a determinate portion of the properties involved.[51]
Reyes-de Leon v. Del Rosario[52] held:
The issue of ownership or co-ownership, to be more precise,
must first be resolved in order to effect a partition of properties. This
should be done in the action for partition itself. As held in the case
of Catapusan v. Court of Appeals:
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It is only properties owned in common that may be the object of an action

for partition; it will not lie if the claimant has no rightful interest over the
subject property. Thus, in this case, only the shares in the lots which are
determined to have been co-owned by Panfilo, Faustino and Danilo could be
included in the order of partition and, conversely, shares in the lots which were
validly disposed of in favor of respondents must be excluded therefrom. In this
connection, the Court sees no reason to depart from the findings of fact and the
65
In actions for partition, the court cannot properly issue

an order to divide the property unless it first makes a
determination as to the existence of co-ownership. The
court must initially settle the issue of ownership, the
first stage in an action for partition. Needless to state, an
action for partition will not lie if the claimant has no
rightful interest over the subject property. In fact,
Section 1 of Rule 69 requires the party filing the action
to state in his complaint the nature and the extent of his
title to the real estate. Until and unless the issue of
ownership is definitely resolved, it would be premature
to effect a partition of the properties. x x x (citations
omitted)[53]

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partition ordered by the appellate court as these are amply supported by

evidence on record. Furthermore, the rule is that factual issues are beyond our
jurisdiction to resolve since in a petition for review under Rule 45 of the 1997
Rules of Civil Procedure this Courts power is limited only to review questions
of law when there is doubt or difference as to what the law is on a certain state
of facts.[54]
WHEREFORE, the petition is DENIED and the August 31,
2001 Decision and November 20, 2002 Resolution of the Court of Appeals in
CA-G.R. CV No. 39138 are AFFIRMED.
No costs.
SO ORDERED.
[G.R. No. 111538. February 26, 1997]
PARAAQUE
KINGS
ENTERPRISES,
INCORPORATED, petitioner, vs.
COURT
OF
APPEALS,
CATALINA L. SANTOS, represented by her attorney-in-fact,
LUZ B. PROTACIO, and DAVID A. RAYMUNDO,respondents.
DECISION
PANGANIBAN, J.:
Do allegations in a complaint showing violation of a contractual right of

first option or priority to buy the properties subject of the lease constitute a
valid cause of action? Is the grantee of such right entitled to be offered the
same terms and conditions as those given to a third party who eventually
bought such properties? In short, is such right of first refusal enforceable
by an action for specific performance?
These questions are answered in the affirmative by this Court in
resolving this petition for review under Rule 45 of the Rules of Court
challenging the Decision of the Court of Appeals promulgated on March
29, 1993, in CA-G.R. CV No. 34987 entitled Paraaque Kings Enterprises,
Inc. vs. Catalina L. Santos, et al., which affirmed the order of September
2, 1991, of the Regional Trial Court of Makati, Branch 57, dismissing Civil
Case No. 91-786 for lack of a valid cause of action.
[2]
[4]
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66
[3]
Page
[1]

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Facts of the Case

On March 19, 1991, herein petitioner filed before the Regional Trial
Court of Makati a complaint, which is reproduced in full below:
[5]
Plaintiff, by counsel, respectfully states that:

1. Plaintiff is a private corporation organized and existing under and by
virtue of the laws of the Philippines, with principal place of business of
(sic) Dr. A. Santos Avenue, Paraaque, Metro Manila, while defendant
Catalina L. Santos, is of legal age, widow, with residence and postal
address at 444 Plato Street, Ct., Stockton, California, USA, represented in
this action by her attorney-in-fact, Luz B. Protacio, with residence and
postal address at No, 12, San Antonio Street, Magallanes Village, Makati,
Metro Manila, by virtue of a general power of attorney. Defendant David
A. Raymundo, is of legal age, single, with residence and postal address at
1918 Kamias Street, Damarias Village, Makati, Metro Manila, where
they (sic) may be served with summons and other court processes. Xerox
copy of the general power of attorney is hereto attached as Annex A.
2. Defendant Catalina L. Santos is the owner of eight (8) parcels of land
located at (sic) Paraaque, Metro Manila with transfer certificate of title
nos. S-19637, S-19638 and S-19643 to S-19648. Xerox copies of the said
title (sic) are hereto attached as Annexes B to I, respectively.
3. On November 28, 1977, a certain Frederick Chua leased the abovedescribed property from defendant Catalina L. Santos, the said lease was
registered in the Register of Deeds. Xerox copy of the lease is hereto
attached as Annex J.
4. On February 12, 1979, Frederick Chua assigned all his rights and
interest and participation in the leased property to Lee Ching Bing, by
virtue of a deed of assignment and with the conformity of defendant
Santos, the said assignment was also registered. Xerox copy of the deed of
assignment is hereto attached as Annex K.
67
5. On August 6, 1979, Lee Ching Bing also assigned all his rights and
interest in the leased property to Paraaque Kings Enterprises,
Incorporated by virtue of a deed of assignment and with the conformity of
defendant Santos, the same was duly registered, Xerox copy of the deed of
assignment is hereto attached as Annex L.
Page
6. Paragraph 9 of the assigned leased (sic) contract provides among others that:
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9. That in case the properties subject of the lease agreement are sold
or encumbered, Lessors shall impose as a condition that the buyer or
mortgagee thereof shall recognize and be bound by all the terms and
conditions of this lease agreement and shall respect this Contract of
Lease as if they are the LESSORS thereof and in case of sale,
LESSEE shall have the first option or priority to buy the properties
subject of the lease;
7. On September 21, 1988, defendant Santos sold the eight parcels of land
subject of the lease to defendant David Raymundo for a consideration of
FIVE MILLION (P5,000,000.00) PESOS. The said sale was in
contravention of the contract of lease, for the first option or priority to buy
was not offered by defendant Santos to the plaintiff. Xerox copy of the
deed of sale is hereto attached as Annex M.
8. On March 5, 1989, defendant Santos wrote a letter to the plaintiff
informing the same of the sale of the properties to defendant Raymundo,
the said letter was personally handed by the attorney-in-fact of defendant
Santos, Xerox copy of the letter is hereto attached as Annex N.
9. Upon learning of this fact plaintiffs representative wrote a letter to
defendant Santos, requesting her to rectify the error and consequently
realizing the error, she had it reconveyed to her for the same consideration
of FIVE MILLION (P5,000,000.00) PESOS. Xerox copies of the letter
and the deed of reconveyance are hereto attached as Annexes O and P.
10. Subsequently the property was offered for sale to plaintiff by the
defendant for the sum of FIFTEEN MILLION (P15,000,000.00)
PESOS. Plaintiff was given ten (10) days to make good of the offer, but
therefore (sic) the said period expired another letter came from the counsel
of defendant Santos, containing the same tenor of (sic) the former
letter. Xerox copies of the letters are hereto attached as Annexes Q and
R.
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12. On May 15, 1989, before they replied to the offer to purchase, another
deed of sale was executed by defendant Santos (in favor of) defendant
Raymundo for a consideration of NINE MILLION (P9,000,000.00)
PESOS. Xerox copy of the second deed of sale is hereto attached as
Annex T.
68
11. On May 8, 1989, before the period given in the letter offering the
properties for sale expired, plaintiffs counsel wrote counsel of defendant
Santos offering to buy the properties for FIVE MILLION (P5,000,000.00)
PESOS. Xerox copy of the letter is hereto attached as Annex S.

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13. Defendant Santos violated again paragraph 9 of the contract of lease

by executing a second deed of sale to defendant Raymundo.
14. It was only on May 17, 1989, that defendant Santos replied to the letter
of the plaintiffs offer to buy or two days after she sold her properties. In
her reply she stated among others that the period has lapsed and the
plaintiff is not a privy (sic) to the contract. Xerox copy of the letter is
hereto attached as Annex U.
15. On June 28, 1989, counsel for plaintiff informed counsel of defendant
Santos of the fact that plaintiff is the assignee of all rights and interest of
the former lessor. Xerox copy of the letter is hereto attached as Annex
V.
16. On July 6, 1989, counsel for defendant Santos informed the plaintiff
that the new owner is defendant Raymundo. Xerox copy of the letter is
hereto attached as Annex W.
17. From the preceding facts it is clear that the sale was simulated and that
there was a collusion between the defendants in the sales of the leased
properties, on the ground that when plaintiff wrote a letter to defendant
Santos to rectify the error, she immediately have (sic) the property
reconveyed it (sic) to her in a matter of twelve (12) days.
18. Defendants have the same counsel who represented both of them in
their exchange of communication with plaintiffs counsel, a fact that led to
the conclusion that a collusion exist (sic) between the defendants.
19. When the property was still registered in the name of defendant
Santos, her collector of the rental of the leased properties was her brotherin-law David Santos and when it was transferred to defendant Raymundo
the collector was still David Santos up to the month of June, 1990. Xerox
copies of cash vouchers are hereto attached as Annexes X to HH,
respectively.
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21. Plaintiff has made considerable investments in the said leased property
by erecting a two (2) storey, six (6) doors commercial building amounting
to THREE MILLION (P3,000,000.00) PESOS. This considerable
69
20. The purpose of this unholy alliance between defendants Santos and
Raymundo is to mislead the plaintiff and make it appear that the price of
the leased property is much higher than its actual value of FIVE MILLION
(P5,000,000.00) PESOS, so that plaintiff would purchase the properties at
a higher price.

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improvement was made on the belief that eventually the said premises
shall be sold to the plaintiff.
22. As a consequence of this unlawful act of the defendants, plaintiff will
incurr (sic) total loss of THREE MILLION (P3,000,000.00) PESOS as the
actual cost of the building and as such defendants should be charged of the
same amount for actual damages.
23. As a consequence of the collusion, evil design and illegal acts of the
defendants, plaintiff in the process suffered mental anguish, sleepless
nights, bismirched (sic) reputation which entitles plaintiff to moral
damages in the amount of FIVE MILLION (P5,000,000.00) PESOS.
24. The defendants acted in a wanton, fraudulent, reckless, oppressive or
malevolent manner and as a deterrent to the commission of similar acts,
they should be made to answer for exemplary damages, the amount left to
the discretion of the Court.
25. Plaintiff demanded from the defendants to rectify their unlawful acts
that they committed, but defendants refused and failed to comply with
plaintiffs just and valid and (sic) demands. Xerox copies of the demand
letters are hereto attached as Annexes KK to LL, respectively.
26. Despite repeated demands, defendants failed and refused without
justifiable cause to satisfy plaintiffs claim, and was constrained to
engaged (sic) the services of undersigned counsel to institute this action at
a contract fee of P200,000.00, as and for attorneys fees, exclusive of cost
and expenses of litigation.
PRAYER
WHEREFORE, it is respectfully prayed, that judgment be rendered in favor of
the plaintiff and against defendants and ordering that:
a. The Deed of Sale between defendants dated May 15, 1989, be annulled
and the leased properties be sold to the plaintiff in the amount
ofP5,000,000.00;
b. Dependants (sic) pay plaintiff the sum of P3,000,000.00 as actual
damages;
70
c. Defendants pay the sum of P5,000,000.00 as moral damages;

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d. Defendants pay exemplary damages left to the discretion of the Court;
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e. Defendants pay the sum of not less than P200,000.00 as attorneys fees.
Plaintiff further prays for other just and equitable reliefs plus cost of suit.
Instead of filing their respective answers, respondents filed motions to
dismiss anchored on the grounds of lack of cause of action, estoppel and
laches.
On September 2, 1991, the trial court issued the order dismissing the
complaint for lack of a valid cause of action. It ratiocinated thus:
Upon the very face of the plaintiffs Complaint itself, it therefore indubitably
appears that the defendant Santos had verily complied with paragraph 9 of the
Lease Agreement by twice offering the properties for sale to the plaintiff for P15
M. The said offers, however, were plainly rejected by the plaintiff which scorned
the said offer as RIDICULOUS. There was therefore a definite refusal on the
part of the plaintiff to accept the offer of defendant Santos. For in acquiring the
said properties back to her name, and in so making the offers to sell both by herself
(attorney-in-fact) and through her counsel, defendant Santos was indeed
conscientiously complying with her obligation under paragraph 9 of the Lease
Agreement. x x x
xxx
xxx
xxx
This is indeed one instance where a Complaint, after barely commencing to create
a cause of action, neutralized itself by its subsequent averments which erased or
extinguished its earlier allegations of an impending wrong. Consequently, absent
any actionable wrong in the very face of the Complaint itself, the plaintiffs
subsequent protestations of collusion is bereft or devoid of any meaning or
purpose. x x x
The inescapable result of the foregoing considerations point to no other conclusion
than that the Complaint actually does not contain any valid cause of action and
should therefore be as it is hereby ordered DISMISSED. The Court finds no
further need to consider the other grounds of estoppel and laches inasmuch as this
resolution is sufficient to dispose the matter.
[6]
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x x x Appellants protestations that the P15 million price quoted by appellee

Santos was reduced to P9 million when she later resold the leased properties to
Raymundo has no valid legal moorings because appellant, as a prospective buyer,
cannot dictate its own price and forcibly ram it against appellee Santos, as owner,
to buy off her leased properties considering the total absence of any stipulation or
71
Petitioners appealed to the Court of Appeals which affirmed in toto the

ruling of the trial court, and further reasoned that:

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agreement as to the price or as to how the price should be computed under

paragraph 9 of the lease contract, x x x
[7]
Petitioner moved for reconsideration but was denied in an order dated

August 20, 1993.
[8]
Hence this petition. Subsequently, petitioner filed an Urgent Motion for

the Issuance of Restraining Order and/or Writ of Preliminary Injunction and
to Hold Respondent David A. Raymundo in Contempt of Court. The
motion sought to enjoin respondent Raymundo and his counsel from
pursuing the ejectment complaint filed before the barangay captain of San
Isidro, Paraaque, Metro Manila; to direct the dismissal of said ejectment
complaint or of any similar action that may have been filed; and to require
respondent Raymundo to explain why he should not be held in contempt of
court for forum-shopping. The ejectment suit initiated by respondent
Raymundo against petitioner arose from the expiration of the lease contract
covering the property subject of this case. The ejectment suit was decided
in favor of Raymundo, and the entry of final judgment in respect thereof
renders the said motion moot and academic.
[9]
Issue
The principal legal issue presented before us for resolution is whether
the aforequoted complaint alleging breach of the contractual right of first
option or priority to buy states a valid cause of action.
Cai
Page
Respondents Santos and Raymundo, in their separate comments, aver

that the petition should be denied for not raising a question of law as the
issue involved is purely factual -- whether respondent Santos complied with
paragraph 9 of the lease agreement -- and for not having complied with
Section 2, Rule 45 of the Rules of Court, requiring the filing of twelve (12)
copies of the petitioners brief. Both maintain that the complaint filed by
petitioner before the Regional Trial Court of Makati stated no valid cause of
action and that petitioner failed to substantiate its claim that the lower
courts decided the same in a way not in accord with law and applicable
decisions of the Supreme Court; or that the Court of Appeals has
sanctioned departure by a trial court from the accepted and usual course
of judicial proceedings so as to merit the exercise by this Court of the
power of review under Rule 45 of the Rules of Court. Furthermore, they
reiterate estoppel and laches as grounds for dismissal, claiming that
72
Petitioner contends that the trial court as well as the appellate tribunal
erred in dismissing the complaint because it in fact had not just one but at
least three (3) valid causes of action, to wit: (1) breach of contract, (2) its
right of first refusal founded in law, and (3) damages.

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petitioners payment of rentals of the leased property to respondent

Raymundo from June 15, 1989, to June 30, 1990, was an acknowledgment
of the latters status as new owner-lessor of said property, by virtue of
which petitioner is deemed to have waived or abandoned its first option to
purchase.
Private respondents likewise contend that the deed of assignment
the lease agreement did not include the assignment of the option
purchase. Respondent Raymundo further avers that he was not privy
the contract of lease, being neither the lessor nor lessee adverted
therein, hence he could not be held liable for violation thereof.
of
to
to
to
The Courts Ruling

Preliminary Issue: Failure to File Sufficient Copies of Brief
We first dispose of the procedural issue raised by respondents,
particularly petitioners failure to file twelve (12) copies of its brief. We have
ruled that when non-compliance with the Rules was not intended for delay
or did not result in prejudice to the adverse party, dismissal of appeal on
mere technicalities in cases where appeal is a matter of right -- may be
stayed, in the exercise of the courts equity jurisdiction. It does not appear
that
respondents
were
unduly
prejudiced
by
petitioners
nonfeasance. Neither has it been shown that such failure was intentional.
[10]
Main Issue: Validity of Cause of Action

We do not agree with respondents contention that the issue involved
is purely factual. The principal legal question, as stated earlier, is whether
the complaint filed by herein petitioner in the lower court states a valid
cause of action. Since such question assumes the facts alleged in the
complaint as true, it follows that the determination thereof is one of law, and
not of facts. There is a question of law in a given case when the doubt or
difference arises as to what the law is on a certain state of facts, and there
is a question of fact when the doubt or difference arises as to the truth or
the falsehood of alleged facts.
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At the outset, petitioner concedes that when the ground for a motion to
dismiss is lack of cause of action, such ground must appear on the face of
the complaint; that to determine the sufficiency of a cause of action, only
the facts alleged in the complaint and no others should be considered; and
that the test of sufficiency of the facts alleged in a petition or complaint to
73
[11]

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constitute a cause of action is whether, admitting the facts alleged, the

court could render a valid judgment upon the same in accordance with the
prayer of the petition or complaint.
A cause of action exists if the following elements are present: (1) a
right in favor of the plaintiff by whatever means and under whatever law it
arises or is created; (2) an obligation on the part of the named defendant to
respect or not to violate such right, and (3) an act or omission on the part of
such defendant violative of the right of plaintiff or constituting a breach of
the obligation of defendant to the plaintiff for which the latter may maintain
an action for recovery of damages.
[12]
In determining whether allegations of a complaint are sufficient to

support a cause of action, it must be borne in mind that the complaint does
not have to establish or allege facts proving the existence of a cause of
action at the outset; this will have to be done at the trial on the merits of the
case. To sustain a motion to dismiss for lack of cause of action, the
complaint must show that the claim for relief does not exist, rather than that
a claim has been defectively stated, or is ambiguous, indefinite or
uncertain.
[13]
Equally important, a defendant moving to dismiss a complaint on the

ground of lack of cause of action is regarded as having hypothetically
admitted all the averments thereof.
[14]
A careful examination of the complaint reveals that it sufficiently alleges

an actionable contractual breach on the part of private respondents. Under
paragraph 9 of the contract of lease between respondent Santos and
petitioner, the latter was granted the first option or priority to purchase the
leased properties in case Santos decided to sell. If Santos never decided
to sell at all, there can never be a breach, much less an enforcement of
such right. But on September 21, 1988, Santos sold said properties to
Respondent Raymundo without first offering these to petitioner. Santos
indeed realized her error, since she repurchased the properties after
petitioner complained. Thereafter, she offered to sell the properties to
petitioner for P15 million, which petitioner, however, rejected because of
the ridiculous price. But Santos again appeared to have violated the
same provision of the lease contract when she finally resold the properties
to respondent Raymundo for only P9 million without first offering them to
petitioner at such price. Whether there was actual breach which entitled
petitioner to damages and/or other just or equitable relief, is a question
which can better be resolved after trial on the merits where each party can
present evidence to prove their respective allegations and defenses.
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Page
The trial and appellate courts based their decision to sustain

respondents motion to dismiss on the allegations of Paraaque Kings
Enterprises that Santos had actually offered the subject properties for sale
74
[15]

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to it prior to the final sale in favor of Raymundo, but that the offer was
rejected. According to said courts, with such offer, Santos had verily
complied with her obligation to grant the right of first refusal to petitioner.
We hold, however, that in order to have full compliance with the
contractual right granting petitioner the first option to purchase, the sale of
the properties for the amount of P9 million, the price for which they were
finally sold to respondent Raymundo, should have likewise been first
offered to petitioner.
The Court has made an extensive and lengthy discourse on the
concept of, and obligations under, a right of first refusal in the case of
Guzman, Bocaling & Co. vs. Bonnevie. In that case, under a contract of
lease, the lessees (Raul and Christopher Bonnevie) were given a right of
first priority to purchase the leased property in case the lessor (Reynoso)
decided to sell. The selling price quoted to the Bonnevies
was P600,000.00 to be fully paid in cash, less a mortgage lien
of P100,000.00. On the other hand, the selling price offered by Reynoso to
and accepted by Guzman was only P400,000.00 of which P137,500.00
was to be paid in cash while the balance was to be paid only when the
property was cleared of occupants. We held that even if the Bonnevies
could not buy it at the price quoted (P600,000.00), nonetheless, Reynoso
could not sell it to another for a lower price and under more favorable terms
and conditions without first offering said favorable terms and price to the
Bonnevies as well. Only if the Bonnevies failed to exercise their right of
first priority could Reynoso thereafter lawfully sell the subject property to
others, and only under the same terms and conditions previously offered to
the Bonnevies.
[16]
Of course, under their contract, they specifically stipulated that the

Bonnevies could exercise the right of first priority, all things and conditions
being equal. This Court interpreted this proviso to mean that there should
be identity of terms and conditions to be offered to the Bonnevies and all
other prospective buyers, with the Bonnevies to enjoy the right of first
priority. We hold that the same rule applies even without the same proviso
if the right of first refusal (or the first option to buy) is not to be rendered
illusory.
From the foregoing, the basis of the right of the first refusal must be the
current offer to sell of the seller or offer to purchase of any prospective
buyer. Only after the grantee fails to exercise its right of first priority under
the same terms and within the period contemplated, could the owner validly
offer to sell the property to a third person, again, under the same terms as
offered to the grantee .
*
**
[17]
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Page
This principle was reiterated in the very recent case of Equatorial Realty
vs. Mayfair Theater, Inc. which was decided en banc. This Court upheld
75
***

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the right of first refusal of the lessee Mayfair, and rescinded the sale of the
property by the lessor Carmelo to Equatorial Realty considering that
Mayfair, which had substantial interest over the subject property, was
prejudiced by its sale to Equatorial without Carmelo conferring to
Mayfair every opportunity to negotiate within the 30-day stipulated period
(underscoring supplied).
In that case, two contracts of lease between Carmelo and Mayfair
provided that if the LESSOR should desire to sell the leased premises, the
LESSEE shall be given 30 days exclusive option to purchase the
same. Carmelo initially offered to sell the leased property to Mayfair for six
to seven million pesos. Mayfair indicated interest in purchasing the
property though it invoked the 30-day period. Nothing was heard thereafter
from Carmelo. Four years later, the latter sold its entire Recto Avenue
property, including the leased premises, to Equatorial for P11,300,000.00
without priorly informing Mayfair. The Court held that both Carmelo and
Equatorial acted in bad faith: Carmelo for knowingly violating the right of
first refusal of Mayfair, and Equatorial for purchasing the property despite
being aware of the contract stipulation. In addition to rescission of the
contract of sale, the Court ordered Carmelo to allow Mayfair to buy the
subject property at the same price of P11,300,000.00.
*
No cause of action under P.D. 1517

Petitioner also invokes Presidential Decree No. 1517, or the Urban
Land Reform Law, as another source of its right of first refusal. It claims to
be covered under said law, being the rightful occupant of the land and its
structures since it is the lawful lessee thereof by reason of contract. Under
the lease contract, petitioner would have occupied the property for fourteen
(14) years at the end of the contractual period.
Without probing into whether petitioner is rightfully a beneficiary under
said law, suffice it to say that this Court has previously ruled that under
Section 6 of P.D. 1517, the terms and conditions of the sale in the
exercise of the lessees right of first refusal to purchase shall be determined
by the Urban Zone Expropriation and Land Management
Committee. Hence, x x x certain prerequisites must be complied with by
anyone who wishes to avail himself of the benefits of the decree. There
being no allegation in its complaint that the prerequisites were complied
with, it is clear that the complaint did fail to state a cause of action on this
ground.
[18]
Page
76
[19]
Deed of Assignment included the option to purchase
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LLB II-A 2014 BULSU
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Neither do we find merit in the contention of respondent Santos that the

assignment of the lease contract to petitioner did not include the option to
purchase. The provisions of the deeds of assignment with regard to
matters assigned were very clear. Under the first assignment between
Frederick Chua as assignor and Lee Ching Bing as assignee, it was
expressly stated that:
x x x the ASSIGNOR hereby CEDES, TRANSFERS and ASSIGNS to herein
ASSIGNEE, all his rights, interest and participation over said premises aforedescribed, x x x (underscoring supplied)
[20]
And under the subsequent assignment executed between Lee Ching

Bing as assignor and the petitioner, represented by its Vice President
Vicenta Lo Chiong, as assignee, it was likewise expressly stipulated that:
x x x the ASSIGNOR hereby sells, transfers and assigns all his rights, interest
and participation over said leased premises, x x x (underscoring supplied)
[21]
One of such rights included in the contract of lease and, therefore, in

the assignments of rights was the lessees right of first option or priority to
buy the properties subject of the lease, as provided in paragraph 9 of the
assigned lease contract. The deed of assignment need not be very specific
as to which rights and obligations were passed on to the assignee. It is
understood in the general provision aforequoted that all specific rights and
obligations contained in the contract of lease are those referred to as being
assigned. Needless to state, respondent Santos gave her unqualified
conformity to both assignments of rights.
Respondent Raymundo privy to the Contract of Lease
[22]
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Page
In order then to accord complete relief to petitioner, respondent

Raymundo was a necessary, if not indispensable, party to the case. A
favorable judgment for the petitioner will necessarily affect the rights of
77
With respect to the contention of respondent Raymundo that he is not

privy to the lease contract, not being the lessor nor the lessee referred to
therein, he could thus not have violated its provisions, but he is
nevertheless a proper party. Clearly, he stepped into the shoes of the
owner-lessor of the land as, by virtue of his purchase, he assumed all the
obligations of the lessor under the lease contract. Moreover, he received
benefits in the form of rental payments. Furthermore, the complaint, as
well as the petition, prayed for the annulment of the sale of the properties to
him. Both pleadings also alleged collusion between him and respondent
Santos which defeated the exercise by petitioner of its right of first refusal.

LLB II-A 2014 BULSU
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respondent Raymundo as the buyer of the property over which petitioner

would like to assert its right of first option to buy.
Having come to the conclusion that the complaint states a valid cause
of action for breach of the right of first refusal and that the trial court should
thus not have dismissed the complaint, we find no more need to pass upon
the question of whether the complaint states a cause of action for damages
or whether the complaint is barred by estoppel or laches. As these matters
require presentation and/or determination of facts, they can be best
resolved after trial on the merits.
While the lower courts erred in dismissing the complaint, private
respondents, however, cannot be denied their day in court. While, in the
resolution of a motion to dismiss, the truth of the facts alleged in the
complaint are theoretically admitted, such admission is merely hypothetical
and only for the purpose of resolving the motion. In case of denial, the
movant is not to be deprived of the right to submit its own case and to
submit evidence to rebut the allegations in the complaint. Neither will the
grant of the motion by a trial court and the ultimate reversal thereof by an
appellate court have the effect of stifling such right. So too, the trial court
should be given the opportunity to evaluate the evidence, apply the law and
decree the proper remedy. Hence, we remand the instant case to the trial
court to allow private respondents to have their day in court.
[23]
WHEREFORE, the petition is GRANTED. The assailed decisions of

the
trial
court
and
Court
of
Appeals
are
hereby REVERSED andSET ASIDE. The case is REMANDED to the
Regional Trial Court of Makati for further proceedings.
Page
78
SO ORDERED.
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G.R. No. 74833 January 21, 1991

THOMAS C. CHEESMAN, petitioner,
vs.
INTERMEDIATE APPELLATE COURT and ESTELITA
PADILLA, respondents.
Estanislao L. Cesa, Jr. for petitioner.
Benjamin I. Fernandez for private respondent.
Page
This appeal concerns the attempt by an American citizen (petitioner

Thomas Cheesman) to annul for lack of consent on his part the sale
by his Filipino wife (Criselda) of a residential lot and building to Estelita
Padilla, also a Filipino.
79
NARVASA, J.:p
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Thomas Cheesman and Criselda P. Cheesman were married on December

4, 1970 but have been separated since February 15,1981. 1
On June 4, 1974, a "Deed of Sale and Transfer of Possessory Rights" was
executed by Armando Altares conveying a parcel of unregistered land and
the house thereon (at No. 7 Neptune Street, Gordon Heights, Olongapo
City) in favor of "Criselda P. Cheesman, of legal age, Filipino citizen,
married to Thomas Cheesman, and residing at Lot No. 1, Blk. 8, Filtration
Road, Sta. Rita, Olongapo City . . ." 2 Thomas Cheesman, although aware
of the deed, did not object to the transfer being made only to his wife. 3
Thereafterand again with the knowledge of Thomas Cheesman and also
without any protest by himtax declarations for the property purchased
were issued in the name only of Criselda Cheesman and Criselda assumed
exclusive management and administration of said property, leasing it to
tenants. 4 On July 1, 1981, Criselda Cheesman sold the property to Estelita
M. Padilla, without the knowledge or consent of Thomas Cheesman. 5 The
deed described Criselda as being" . . . of legal age, married to an American
citizen,. . ." 6
Thirty days later, or on July 31, 1981, Thomas Cheesman brought suit in
the Court of First Instance at Olongapo City against his wife, Criselda, and
Estelita Padilla, praying for the annulment of the sale on the ground that the
transaction had been executed without his knowledge and consent. 7 An
answer was filed in the names of both defendants, alleging that (1) the
property sold was paraphernal, having been purchased by Criselda with
funds exclusively belonging to her ("her own separate money"); (2) Thomas
Cheesman, being an American, was disqualified to have any interest or
right of ownership in the land; and (3) Estelita Padilla was a buyer in good
faith. 8
During the pre-trial conference, the parties agreed upon certain facts which
were subsequently set out in a pre-trial Order dated October 22, 1981, 9 as
follows:
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Page
2. That the transaction regarding the transfer of their property

took place during the existence of their marriage as the couple
were married on December 4, 1970 and the questioned
property was acquired sometime on June 4,1974.
80
1. Both parties recognize the existence of the Deed of Sale

over the residential house located at No. 7 Granada St.,
Gordon Heights, Olongapo City, which was acquired from
Armando Altares on June 4, 1974 and sold by defendant
Criselda Cheesman to Estelita Padilla on July 12, 1981; and

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The action resulted in a judgment dated June 24, 1982, 10 declaring void ab
initio the sale executed by Criselda Cheesman in favor of Estelita M.
Padilla, and ordering the delivery of the property to Thomas Cheesman as
administrator of the conjugal partnership property, and the payment to him
of P5,000.00 as attorney's fees and expenses of litigation. 11
The judgment was however set aside as regards Estelita Padilla on a
petition for relief filed by the latter, grounded on "fraud, mistake and/or
excusable negligence" which had seriously impaired her right to present
her case adequately. 12 "After the petition for relief from judgment was
given due course," according to petitioner, "a new judge presided over the
case." 13
Estelita Padilla filed a supplemental pleading on December 20, 1982 as her
own answer to the complaint, and a motion for summary judgment on May
17, 1983. Although there was initial opposition by Thomas Cheesman to
the motion, the parties ultimately agreed on the rendition by the court of a
summary judgment after entering into a stipulation of facts, at the hearing
of the motion on June 21, 1983, the stipulation being of the following
tenor: 14
(1) that the property in question was bought during the
existence of the marriage between the plaintiff and the
defendant Criselda P. Cheesman;
(2) that the property bought during the marriage was registered
in the name of Criselda Cheesman and that the Deed of Sale
and Transfer of Possessory Rights executed by the former
owner-vendor Armando Altares in favor of Criselda Cheesman
made no mention of the plaintiff;
Page
Obviously upon the theory that no genuine issue existed any longer and
there was hence no need of a trial, the parties having in fact submitted, as
also stipulated, their respective memoranda each praying for a favorable
verdict, the Trial Court 15 rendered a "Summary Judgment" dated August 3,
1982 declaring "the sale executed by . . . Criselda Cheesman in favor of . . .
Estelita Padilla to be valid," dismissing Thomas Cheesman's complaint and
ordering him "to immediately turn over the possession of the house and lot
subject of . . . (the) case to . . . Estelita Padilla . . ." 16
81
(3) that the property, subject of the proceedings, was sold by

defendant Criselda Cheesman in favor of the other defendant
Estelita M. Padilla, without the written consent of the plaintiff.
The Trial Court found that

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1) the evidence on record satisfactorily overcame the

disputable presumption in Article 160 of the Civil Codethat all
property of the marriage belongs to the conjugal partnership
"unless it be proved that it pertains exclusively to the husband
or to the wife"and that the immovable in question was in truth
Criselda's paraphernal property;
2) that moreover, said legal presumption in Article 160 could
not apply "inasmuch as the husband-plaintiff is an American
citizen and therefore disqualified under the Constitution to
acquire and own real properties; and
3) that the exercise by Criselda of exclusive acts of dominion
with the knowledge of her husband "had led . . . Estelita Padilla
to believe that the properties were the exclusive properties of
Criselda Cheesman and on the faith of such a belief she
bought the properties from her and for value," and therefore,
Thomas Cheesman was, under Article 1473 of the Civil Code,
estopped to impugn the transfer to Estelita Padilla.
Thomas Cheesman appealed to the Intermediate Appellate Court. There
he assailed the Trial Court acts (1) of granting Estelita Padilla's petition for
relief, and its resolution of matters not subject of said petition; (2) of
declaring valid the sale to Estelita Padilla despite the lack of consent
thereto by him, and the presumption of the conjugal character of the
property in question pursuant to Article 160 of the Civil Code; (3) of
disregarding the judgment of June 24, 1982 which, not having been set
aside as against Criselda Cheesman, continued to be binding on her; and
(4) of making findings of fact not supported by evidence. All of these
contentions were found to be without merit by the Appellate Tribunal which,
on January 7, 1986, promulgated a decision (erroneously denominated,
"Report") 17affirming the "Summary Judgment complained of," "having
found no reversible error" therein.
Once more, Thomas Cheesman availed of the remedy of appeal, this time
to this Court. Here, he argues that it was reversible error for the
Intermediate Appellate Court
82
1) to find that the presumption that the property in question is conjugal in

accordance with Article 160 had been satisfactorily overcome by Estelita
Padilla; 18
Page
2) to rule that Estelita Padilla was a purchaser of said property in good

faith, it appearing:
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a) that the deed by which the property was conveyed to

Criselda Cheesman described her as "married to Thomas C.
Cheesman," as well as the deed by which the property was
later conveyed to Estelita Padilla by Criselda Cheesman also
described her as "married to an American citizen," and both
said descriptions had thus "placed Estelita on knowledge of the
conjugal nature of the property;" and
b) that furthermore, Estelita had admitted to stating in the deed
by which she acquired the property a price much lower than
that actually paid "in order to avoid payment of more obligation
to the government;" 19
3) to decline to declare that the evidence did not warrant the grant of
Estelita Padilla's petition for relief on the ground of "fraud, mistake and/or
excusable negligence;" 20
4) to hold that Thomas Cheesman had waived his objection to Estelita's
petition for relief by failing to appeal from the order granting the same;
5) to accord to Estelita Padilla a relief other than that she had specifically
prayed for in her petition for relief, ie., "the restoration of the purchase price
which Estelita allegedly paid to Criselda;" 21 and
Page
Such conclusions as that (1) fraud, mistake or excusable negligence

existed in the premises justifying relief to Estelita Padilla under Rule 38 of
the Rules of Court, or (2) that Criselda Cheesman had used money she
had brought into her marriage to Thomas Cheesman to purchase the lot
and house in question, or (3) that Estelita Padilla believed in good faith that
Criselda Cheesman was the exclusive owner of the property that she
(Estelita) intended to and did in fact buyderived from the evidence
adduced by the parties, the facts set out in the pleadings or otherwise
appearing on recordare conclusions or findings of fact. As distinguished
from a question of lawwhich exists "when the doubt or difference arises
as to what the law is on a certain state of facts" "there is a question of
fact when the doubt or difference arises as to the truth or the falsehood of
alleged facts;" 23 or when the "query necessarily invites calibration of the
whole evidence considering mainly the credibility of witnesses, existence
and relevancy of specific surrounding circumstances, their relation; to each
other and to the whole and the probabilities of the situation." 24
83
6) to fail to declare that Thomas Cheesman's citizenship is not a bar to his

action to recover the lot and house for the conjugal partnership. 22
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Now, it is axiomatic that only questions of law, distinctly set forth, may be
raised in a petition for the review oncertiorari of a decision of the Court of
Appeals presented to this Court. 25 As everyone knows or ought to know,
the appellate jurisdiction of this Court is limited to reviewing errors of law,
accepting as conclusive the factual findings of the lower court upon its own
assessment of the evidence. 26 The creation of the Court of Appeals was
precisely intended to take away from the Supreme Court the work of
examining the evidence, and confine its task to the determination of
questions which do not call for the reading and study of transcripts
containing the testimony of witnesses. 27 The rule of conclusiveness of the
factual findings or conclusions of the Court of Appeals is, to be sure,
subject to certain exceptions, 28 none of which however obtains in the case
at bar.
It is noteworthy that both the Trial Court and the Intermediate Appellate
Court reached the same conclusions on the three (3) factual matters above
set forth, after assessment of the evidence and determination of the
probative value thereof. Both Courts found that the facts on record
adequately proved fraud, mistake or excusable negligence by which
Estelita Padilla's rights had been substantially impaired; that the funds used
by Criselda Cheesman was money she had earned and saved prior to her
marriage to Thomas Cheesman, and that Estelita Padilla did believe in
good faith that Criselda Cheesman was the sole owner of the property in
question. Consequently, these determinations of fact will not be here
disturbed, this Court having been cited to no reason for doing so.
Page
An order of a Court of First Instance (now Regional Trial Court) granting a

petition for relief under Rule 38 is interlocutory and is not appealable.
Hence, the failure of the party who opposed the petition to appeal from said
order, or his participation in the proceedings subsequently had, cannot be
construed as a waiver of his objection to the petition for relief so as to
preclude his raising the same question on appeal from the judgment on the
merits of the main case. Such a party need not repeat his objections to the
petition for relief, or perform any act thereafter (e.g., take formal exception)
in order to preserve his right to question the same eventually, on appeal, it
being sufficient for this purpose that he has made of record "the action
which he desires the court to take or his objection to the action of the court
and his grounds therefor." 29
84
These considerations dispose of the first three (3) points that petitioner
Cheesman seeks to make in his appeal. They also make unnecessary an
extended discussion of the other issues raised by him. As to them, it should
suffice to restate certain fundamental propositions.
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Again, the prayer in a petition for relief from judgment under Rule 38 is not
necessarily the same prayer in the petitioner's complaint, answer or other
basic pleading. This should be obvious. Equally obvious is that once a
petition for relief is granted and the judgment subject thereof set aside, and
further proceedings are thereafter had, the Court in its judgment on the
merits may properly grant the relief sought in the petitioner's basic
pleadings, although different from that stated in his petition for relief.
Page
As already observed, the finding that his wife had used her own money to
purchase the property cannot, and will not, at this stage of the proceedings
be reviewed and overturned. But even if it were a fact that said wife had
used conjugal funds to make the acquisition, the considerations just set out
militate, on high constitutional grounds, against his recovering and holding
the property so acquired or any part thereof. And whether in such an event,
he may recover from his wife any share of the money used for the
purchase or charge her with unauthorized disposition or expenditure of
conjugal funds is not now inquired into; that would be, in the premises, a
purely academic exercise. An equally decisive consideration is that Estelita
Padilla is a purchaser in good faith, both the Trial Court and the Appellate
Court having found that Cheesman's own conduct had led her to believe
the property to be exclusive property of the latter's wife, freely disposable
by her without his consent or intervention. An innocent buyer for value, she
is entitled to the protection of the law in her purchase, particularly as
85
Finally, the fundamental law prohibits the sale to aliens of residential land.
Section 14, Article XIV of the 1973 Constitution ordains that, "Save in
cases of hereditary succession, no private land shall be transferred or
conveyed except to individuals, corporations, or associations qualified to
acquire or hold lands of the public domain." 30Petitioner Thomas Cheesman
was, of course, charged with knowledge of this prohibition. Thus, assuming
that it was his intention that the lot in question be purchased by him and his
wife, he acquired no right whatever over the property by virtue of that
purchase; and in attempting to acquire a right or interest in land, vicariously
and clandestinely, he knowingly violated the Constitution; the sale as to him
was null and void. 31 In any event, he had and has no capacity or
personality to question the subsequent sale of the same property by his
wife on the theory that in so doing he is merely exercising the prerogative
of a husband in respect of conjugal property. To sustain such a theory
would permit indirect controversion of the constitutional prohibition. If the
property were to be declared conjugal, this would accord to the alien
husband a not insubstantial interest and right over land, as he would then
have a decisive vote as to its transfer or disposition. This is a right that the
Constitution does not permit him to have.
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against Cheesman, who would assert rights to the property denied him by
both letter and spirit of the Constitution itself.
WHEREFORE, the appealed decision is AFFIRMED, with costs against
petitioner.
SO ORDERED.
G.R. No. 169793
September 15, 2006
VICTORIANO M. ENCARNACION, petitioner,

vs.
NIEVES AMIGO, respondent.
DECISION
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Page
This petition for review assails the June 30, 2005 Decision1 of the Court of
Appeals in CA-G.R. SP No. 73857, ordering the remand of Civil Case No.
Br. 20-1194 to the Regional Trial Court of Cauayan, Isabela, Branch 20, for
further proceedings.
86
YNARES-SANTIAGO, J.:

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The antecedent facts are as follows:

Petitioner Victoriano M. Encarnacion is the registered owner of Lot No.
2121-B-1, consisting of 100 square meters and covered by TCT No. T256650; and Lot No. 2121-B-2 consisting of 607 square meters with TCT
No. T-256651, located at District 1, National Hi-way, Cauayan, Isabela.
Said two lots originally form part of Lot No. 2121, a single 707 square meter
track of land owned by Rogelio Valiente who sold the same to Nicasio
Mallapitan on January 18, 1982. On March 21, 1985, Mallapitan sold the
land to Victoriano Magpantay. After the death of the latter in 1992, his
widow, Anita N. Magpantay executed an Affidavit of Waiver2 on April 11,
1995 waving her right over the property in favor of her son-in-law, herein
petitioner, Victoriano Encarnacion. Thereafter, the latter caused the
subdivision of the land into two lots3 and the issuance of titles in his name
on July 18, 1996.4
Respondent Nieves Amigo allegedly entered the premises and took
possession of a portion of the property sometime in 1985 without the
permission of the then owner, Victoriano Magpantay. Said occupation by
respondent continued even after TCT Nos. T-256650 and T-256651 were
issue to petitioner.
Consequently, petitioner, through his lawyer sent a letter5 dated Febuary 1,
2001 demanding that the respondent vacate the subject property. As
evidenced by the registry return receipt, the demand letter was delivered by
registered mail to the respondent on February 12, 2001. Notwithstanding
receipt of the demand letter, respondent still refused to vacate the subject
property. Thereafter, on March 2, 2001, petitioner filed a complaint6 for
ejectment, damages with injunction and prayer for restraining order with the
Municipal Trial Court in Cities of Isabela which was docketed as CV-01030. In his Answer, respondent alleged that he has been in actual
possession and occupation of a portion of the subject land since 1968 and
that the issuance of Free Patent and titles in the name of petitioner was
tainted with irregularities.7
Page
WHERE[FO]RE, there being a preponderance of evidence, a

JUDGMENT is hereby rendered in favor of the plaintiff VICTORIANO
M. ENCARNACION and against the defendant NIEVES AMIGOE
(sic) as follows:
87
On October 24, 2001, the Municipal Trial Court in Cities rendered

judgment, which reads:
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a) ORDERING the defendant to vacate the portion of the parcels of

land described in Transfer Certificates of Title Nos. T-256650 and T256651 he is now occupying and surrender it to the plaintiff;
b) ORDERING the defendant to pay the plaintiff the sum of FIVE
THOUSAND PESOS (P5,000) as attorney's fees, and
c) ORDERING the defendant to pay rentals equivalent [to] P500.00
per month from February, 2001 until the portion of the land occupied
by him is surrendered to the plaintiff.
COSTS against the defendant.
SO ORDERED.8
On appeal, the Regional Trial Court of Cauayan, Isabela, Branch 20, ruled
as follows:
WHEREFORE, judgment is hereby rendered dismissing the case on
the ground that as the Municipal Court had no jurisdiction over the
case, this Court acquired no appellate jurisdiction thereof. Costs
against plaintiff-appellee.
SO ORDERED.9
Aggrieved, petitioner filed a petition for review10 under Rule 42 of the Rules
of Court before the Court of Appeals which promulgated the assailed
Decision remanding the case to the Regional Trial Court. The dispositive
portion thereof reads:
WHEREFORE, premises considered, this case is hereby
REMANDED to Branch 20, Regional Trial Court of Cauayan, Isabela
for further proceedings.
No costs.
SO ORDERED.11
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Page
[WHETHER] THE COURT OF APPEALS ERRED IN HOLDING

THAT THE PROPER ACTION IN THIS CASE IS ACCION
PUBLICIANA AND NOT UNLAWFUL DETAINER AS DETERMINED
BY THE ALLEGATIONS IN THE COMPLAINT FILED BY
PETITIONER.12
88
Hence the present petition raising the sole issue:

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The petition lacks merit.

In this jurisdiction, the three kinds of actions for the recovery of possession
of real property are:
1. Accion interdictal, or an ejectment proceeding which may be either
that for forcible entry (detentacion) or unlawful detainer (desahucio),
which is a summary action for recovery of physical possession where
the dispossession has not lasted for more than one year, and should
be brought in the proper inferior court;
2. Accion publiciana or the plenary action for the recovery of the real
right of possession, which should be brought in the proper Regional
Trial Court when the dispossession has lasted for more than one
year; and
3. Accion reinvindicatoria or accion de reivindicacion, which is an
action for the recovery of ownership which must be brought in the
proper Regional Trial Court.13
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Page
After a careful evaluation of the evidence on record of this case, we find

that the Court of Appeals committed no reversible error in holding that the
proper action in this case is accion publiciana; and in ordering the remand
89
Based on the foregoing distinctions, the material element that determines

the proper action to be filed for the recovery of the possession of the
property in this case is the length of time of dispossession. Under the Rules
of Court, the remedies of forcible entry and unlawful detainer are granted to
a person deprived of the possession of any land or building by force,
intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or
other person against whom the possession of any land or building is
unlawfully withheld after the expiration or termination of the right to hold
possession by virtue of any contract, express or implied, or the legal
representatives or assigns of any such lessor, vendor, vendee, or other
person. These remedies afford the person deprived of the possession to
file at any time within one year after such unlawful deprivation or
withholding of possession, an action in the proper Municipal Trial Court
against the person or persons unlawfully withholding or depriving of
possession, or any person or persons claiming under them, for the
restitution of such possession, together with damages and costs.14 Thus, if
the dispossession has not lasted for more than one year, an ejectment
proceeding is proper and the inferior court acquires jurisdiction. On the
other hand, if the dispossession lasted for more than one year, the proper
action to be filed is an accion publiciana which should be brought to the
proper Regional Trial Court.

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of the case to the Regional Trial Court of Cauayan, Isabela, Branch 20, for
further proceedings.
Well settled is the rule that jurisdiction of the court over the subject matter
of the action is determined by the allegations of the complaint at the time of
its filing, irrespective of whether or not the plaintiff is entitled to recover
upon all or some of the claims asserted therein. What determines the
jurisdiction of the court is the nature of the action pleaded as appearing
from the allegations in the complaint. The averments therein and the
character of the relief sought are the ones to be consulted.15 On its face,
the complaint must show enough ground for the court to assume
jurisdiction without resort to parol testimony.16
From the allegations in the complaint, it appears that the petitioner became
the owner of the property on April 11, 1995 by virtue of the waiver of rights
executed by his mother-in-law. He filed the complaint for ejectment on
March 2, 2001 after his February 1, 2001 letter to the respondent
demanding that the latter vacate the premises remained unheeded. While it
is true that the demand letter was received by the respondent on February
12, 2001, thereby making the filing of the complaint for ejectment fall within
the requisite one year from last demand for complaints for unlawful
detainer, it is also equally true that petitioner became the owner of the
subject lot in 1995 and has been since that time deprived possession of a
portion thereof. From the date of the petitioner's dispossession in 1995 up
to his filing of his complaint for ejectment in 2001, almost 6 years have
elapsed. The length of time that the petitioner was dispossessed of his
property made his cause of action beyond the ambit of an accion
interdictal and effectively made it one for accion publiciana. After the lapse
of the one-year period, the suit must be commenced in the Regional Trial
Court via an accion publiciana which is a suit for recovery of the right to
possess. It is an ordinary civil proceeding to determine the better right of
possession of realty independently of title. It also refers to an ejectment suit
filed after the expiration of one year from the accrual of the cause of action
or from the unlawful withholding of possession of the realty.17
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Page
We agree with the Court of Appeals that if petitioners are indeed the
owners of the subject lot and were unlawfully deprived of their right of
possession, they should present their claim before the regional trial
court in an accion publiciana or an accion reivindicatoria, and not
90
Previously, we have held that if the owner of the land knew that another
person was occupying his property way back in 1977 but the said owner
only filed the complaint for ejectment in 1995, the proper action would be
one foraccion publiciana and not one under the summary procedure on
ejectment. As explained by the Court:

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before the metropolitan trial court in a summary proceeding for

unlawful detainer or forcible entry. For even if one is the owner of the
property, the possession thereof cannot be wrested from another
who had been in physical or material possession of the same for
more than one year by resorting to a summary action for ejectment.18
Hence, we agree with the Court of Appeals when it declared that:
The respondent's actual entry on the land of the petitioner was in
1985 but it was only on March 2, 2001 or sixteen years after, when
petitioner filed his ejectment case. The respondent should have filed
an accion publiciana case which is under the jurisdiction of the RTC.
However, the RTC should have not dismissed the case.
Section 8, Rule 40 of the Rules of Court provides:
SECTION 8. Appeal from orders dismissing case without trial;
lack of jurisdiction. If an appeal is taken from an order of the
lower court dismissing the case without a trial on the merits, the
Regional Trial Court may affirm or reverse it, as the case may
be. In case of affirmance and the ground of dismissal is lack of
jurisdiction over the subject matter, the Regional Trial Court, if
it has jurisdiction thereover, shall try the case on the merits as
if the case was originally filed with it. In case of reversal, the
case shall be remanded for further proceedings.
Page
The RTC should have taken cognizance of the case. If the case
is tried on the merits by the Municipal Court without jurisdiction
over the subject matter, the RTC on appeal may no longer
dismiss the case if it has original jurisdiction thereof. Moreover,
the RTC shall no longer try the case on the merits, but shall
decide the case on the basis of the evidence presented in the
lower court, without prejudice to the admission of the amended
pleadings and additional evidence in the interest of justice.19
91
If the case was tried on the merits by the lower court without
jurisdiction over the subject matter, the Regional Trial Court on
appeal shall not dismiss the case if it has original jurisdiction
thereof, but shall decide the case in accordance with the
preceding section, without prejudice to the admission of
amended pleadings and additional evidence in the interest of
justice.
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WHEREFORE, the petition is DENIED. The Decision of the Court of

Appeals dated June 30, 2005 in CA-G.R. SP No. 73857 ordering the
remand of Civil Case No. Br. 20-1194 to the Regional Trial Court of
Cauayan, Isabela, Branch 20, for further proceedings, is AFFIRMED.
No costs.
SO ORDERED.
G.R. No. 85273 March 9, 1993

GOVERNMENT SERVICE INSURANCE SYSTEM
(GSIS), Petitioner, vs. HON. GENARO C. GINES, Judge, RTC,
La union, Br. XXVI, BENGSON COMMERCIAL BUILDING,
INC. and THE COURT OF APPEALS, Respondents.
The Legal Consultant for petitioner.
chanrobles v irt ual law li bra ry
Pacifico C. Yadao for private respondent.

CAMPOS, JR., J.:
This is a petition for certiorari and prohibition seeking to annul
the January 19, 1988 decision * of the Court of Appeals in CAG.R. CV-09361 entitled "Bengson Commercial Bldg., Inc.,
represented by its President Romualdo F. Bengson, PlaintiffAppellee versus Government Service Insurance System,
Defendant-Appellant" which affirmed the decision** of the
Regional Trial Court, Branch XXVI, San Fernando, La Union in
Civil Case No. 2794 for having been issued in excess of
jurisdiction and/or with grave abuse of discretion amounting to
lack of jurisdiction and to prohibit the trial court from: a)
enforcing the writ of garnishment it issued for the sum of
P2,760,000.00 and; b) engaging in the selective piece-meal
execution of the Court of Appeals decision.
chanrob lesvi rtualaw lib raryc han robles v irt ual law li bra ry
The antecedent facts are as follows:
chan robles v irt ual law li bra ry
Page
92
Private respondent Bengson Commercial Building, Inc.

(BENGSON, for brevity) obtained a loan from the petitioner
Government Service Insurance System (GSIS, for brevity) on
August 20, 1965 for P1,250,000.00 payable in 15 years at 9%
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annual interest secured by a mortgage on a parcel of land with

buildings thereon covered by Transfer Certificate of Title (TCT)
No. T2767 and two other parcels of land covered by TCT No.
T5778, all located in San Fernando, La Union, as well as
machineries and equipment already existing and those yet to be
acquired.
chan roble svirtualawl ibra ryc hanro bles vi rt ual law li bra ry
The loan proceeds were made available to BENGSON through

checks issued for partial sums on various dates, from November
8, 1965 to September 19, 1968, for a total sum of
P1,123,673.09.
chanroble svirtualawl ibra rycha nro bl es virt ual law li bra ry
On November 23, 1971, BENGSON executed another mortgage

contract for a loan of P3,000,000.00, payable in 15 years at 12%
annual interest and secured by a mortgage on the same parcels
of land located at San Fernando, La Union and two other parcels
of land also situated in San Fernando, La Union originally covered
by Original Certificate of Title (OCT) No. 323 plus two parcels of
land situated in Quezon City covered by TCT Nos. 172452 and
172453.
chanroblesv irt ualawli bra rycha nrob les vi rtua l law lib rary
The proceeds of the second loan were made available to

BENGSON through checks issued for partial sums on various
dates from December 17, 1971 to July 20, 1973, for a total sum
of P1,441,394.43.
chanroblesv irt ualawli bra rychan rob les vi rtual law lib rary
On May 26, 1972, BENGSON sold to GSIS nine (9) units of

debenture bonds in the total amount of P900,000.00 at 14%
annual interest, redeemable in twenty (20) equal quarterly
installments.
chanroblesvi rtua lawlibra ryc hanro bles vi rtua l law li bra ry
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Page
For having defaulted in the payment of its amortizations,

BENGSON received a letter from the GSIS dated November 13,
1974 stating that unless BENGSON settled its arrearages, the
GSIS would foreclose the mortgaged properties. On March 20,
1975, the GSIS instituted extrajudicial foreclosure proceedings
through the Provincial Sheriff of La Union. The notice of
foreclosure was published in the April 25, May 2 and May 9, 1975
issues of the Ilocos Times and the subject of the auction sale
were the parcels of land covered by TCT No. T2767, TCT No.
T5778, OCT No. 323 as well as the machineries and equipment
under mortgage.
93
chanroblesvi rtu alawlib ra rychan roble s virtual law lib rary

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On May 9, 1975, BENGSON paid the GSIS P100,000.00 to apply

to its loan accounts. For reasons known only to the parties, the
scheduled foreclosure on May 12, 1975 was postponed; and,
thereafter, the foreclosure was postponed several more times.
chanroblesvi rtua lawlib rary chan roble s virtual law
libra ry
On June 20, 1975, BENGSON made another payment in the

amount of P10,000.00.
chanroble svi rtualawl ib raryc hanrobles vi rt ual law li bra ry
On August 18 and August 22, 1975, BENGSON addressed two

separate letters to the GSIS through its General Manager; the
first was a request to restructure its scheduled amortization
payments and the second, an application for restructuring and
additional loan.
chanroblesv irtualawl ibra rycha nrob le s virt ual law li bra ry
On January 13, 1976, BENGSON received a telegram from a

"Garrucho GSIS BILD" (GSIS Manager, Commercial and Industrial
Loans Department) which reads: "Please see Mr. Edgardo
Ramirez and Mr. Juan Dangla re restructing Regent". "Regent"
was the Regent Theatre Hotel Building [8-storey, 70% complete]
located on the two parcels of land covered by TCT No. T5778; the
other improvement also located on these two lots was the
Bengson Theatre Hotel Building [6-storey, 30% complete].
chan roble svirtualawl ibra ryc hanro bles vi rtua l law li bra ry
Between May 9, 1975 to October 11, 1976, BENGSON paid the

GSIS a total amount of P286,000.00 to apply to its loan accounts.
During the interim, BENGSON and the GSIS were preparing
grounds for the grant of an additional loan with or after
restructuring the previous two consolidated loan accounts.
chanroble svirtualawl ibra rycha nro bles vi rtua l law lib ra ry
On February 10, 1977, the Provincial Sheriff of La Union enforced

the foreclosure and conducted a public auction sale wherein the
GSIS emerged as the highest bidder, acquiring BENGSON's
mortgaged properties at P4,740,000.00. A certificate of sale
covering the foreclosed properties was issued four (4) days later.
Subsequently, the Register of Deeds of La Union issued to the
GSIS these new transfer certificates of title over the foreclosed
properties: TCT No. T-10811 cancelling TCT No. 2767, TCT No. T10812 cancelling TCT No. T5778, and TCT No. 10813 cancelling
OCT No. 323.
chanroble svi rtualawl ib raryc hanrobles vi rt ual law li bra ry
Page
94
On March 15, 1977, the GSIS filed with the then Court of First
Instance (now Regional Trial Court) an ex-parte petition for the
issuance of a writ of possession over the foreclosed properties
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which the court granted on June 23, 1977 and gave BENGSON
ten (10) days within which to file a motion for reconsideration.
The court denied the latter's motion for reconsideration on July
29, 1977.
chanroblesvi rtualaw lib raryc han robles v irt ual law l ibra ry
On June 23, 1977, BENGSON filed against the GSIS a petition for
annulment of the GSIS's foreclosure of its mortgage loan,
restructuring of the loan, cancellation by the La Union Register of
Deeds of all sale entries affecting BENGSON's titles over the
properties it had mortgaged to the GSIS as security for the loan,
and recovery of damages, attorney's fees and costs of suit,
docketed as Civil Case No. 2794, with the Court of First Instance
(now Regional Trial Court) San Fernando, La Union, Branch
XXVI. 1
chan roble s virtual law l ibra ry
Under a deed of conditional sale, on April 22, 1981, the GSIS sold
to Family Savings Bank BENGSON's foreclosed parcels of land
situated in San Fernando, La Union. 2
chanro bles vi rt ual law li bra ry
Civil Case No. 2794 was decided by the court a quo, the
dispositive portion of which reads:
1. Declaring the extrajudicial foreclosure of the plaintiff's
properties by defendant null and void ab initio and directing
defendant to restore plaintiff possession of said properties; and
the Register of Deeds of La Union to cancel the titles issued to
defendant and in lieu thereof to issue new ones in the name of
plaintiff;
chanrobles vi rt ual law li bra ry
2. Ordering defendant to restructure the loans of plaintiff

amounting to P4,250,000.00 at the legal rate of interest from
finality of this judgment;
chanrobles v irt ual law l ibra ry
chanrobles vi rtua l law lib rary
4. Ordering defendant to reimburse to plaintiff the amount of

P1,900,000.00 representing the accrued monthly rentals
belonging to plaintiff from February, 1977 and, thereafter, the
monthly rental of P20,000.00 until the properties are restore (sic)
to the possession of plaintiff; and
Page
chanroble s virtual law l ib rary
95
3. Ordering plaintiff to pay P900,000.00 at the legal rate of

interest for the debenture bonds from finality of this judgment;
5. Ordering defendant to pay costs of suit. 3
chanroble s virtual law l ibra ry
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On appeal, docketed as CA-G.R. Civil Case No. 09361, the

judgment appealed from was affirmed by the Court of Appeals
with modification, the dispositive portion of which reads:
WHEREFORE, we affirm the appealed decision with
MODIFICATION, as follows:
chanro bles vi rtua l law lib ra ry
1. The foreclosure and auction sale on February 10, 1977 of

BENGSON's properties covered by real estate and chattel
mortgages mentioned in the notice of sale issued by the La Union
provincial sheriff are set aside.
chanrob lesvi rtua lawlib rary chan roble s virtual law l ib rary
2. The writ of possession issued to GSIS as the highest bidder by

the defunct Court of First Instance, sitting as a cadastral court, as
a consequence of said foreclosure sale, is annulled.
c hanro blesvi rt ualawlib ra rycha nroble s virtual law l ib rary
3. The Register of Deeds of La Union is ordered to cancel the

present certificates of title covering those properties and issue
new ones in lieu thereof in the same names and with the same
annotations, terms and conditions, including the mortgage in
question, as appeared (sic) in the previous certificates of title as
of the date BENGSON constituted the mortgage on those
properties in favor of GSIS, it being understood that all expenses
to be incurred incidental to such title cancellation and issuance
shall be borne by GSIS.
chanroble svirtualawl ibra ryc hanro bles vi rtua l law lib ra ry
4. GSIS is ordered to restore to BENGSON full possession of those

mortgaged properties situated in San Fernando, La Union.
chanroblesvi rtua lawlib rary chan roble s virtual law lib rary
5. All properties under the mortgage in question, including those

parcels of land situated in San Fernando, La Union and in Quezon
City, shall remain under mortgage in favor of GSIS.
chanroblesv irt ualawli bra rychanro bles vi rtua l law li bra ry
6. GSIS is ordered to restructure BENGSON's loan as promised,

the restructuring to proceed from the premise that as of the
foreclosure date, i.e. February 10, 1977, BENGSON had paid
GSIS an aggregate amount of P286,000.00 on the subject
loan.
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Page
7. The interest rates per annum stated in the first and second
mortgage loan contracts entered into between BENGSON and
GSIS, as well as all other terms and conditions provided for
therein - except as qualified by the subsequent agreement of the
96

LLB II-A 2014 BULSU
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parties regarding the promised loan restructuring and deferment

of foreclosure by reason of the arrearages incurred - shall remain
as originally stipulated upon by the parties.
chanroblesv irt ualawli bra rychan rob les vi rtual law lib rary
8. BENGSON is ordered to pay GSIS the debenture bond with an

aggregate face value of P900,000.00 at the stipulated interest
rate of 14% per annum, quarterly; and to pay 14% interest per
annum, compounded monthly, on the interest on said debenture
bond, that had become due quarterly, in accordance with the
stipulations provided for therein.
chanroblesvi rtua lawlib rary chan ro bles virtual law lib rary
9. GSIS shall reimburse BENGSON the monthly rent of

P20,000.00 representing income produced by one of the latter's
mortgaged properties, i.e. the Regent Theatre building, from
February 15, 1977 until GSIS shall have restored the full
possession of said building, together with the land on which it
stands, to BENGSON.
chanroblesvi rtua lawlib rary chan roble s virt ual law l ibra ry
10. The entire record of this case is ordered remanded to the trial
court and the latter is directed to ascertain whether such
mortgaged properties as machineries, equipment, and other
movie paraphernalia, etc., are in fact no longer in existence per
report of the provincial sheriff, as well as to determine their
replacement value if GSIS fails to return them; and, as prayed for
by BENGSON, to receive evidence from the parties on the costs of
suit awarded to it.
chanro blesvi rt ualawlib ra rychan roble s virtual law lib rary
No pronouncement as to cost of this appeal.
chan roble svirtualawl ibra rycha nrob les vi rtua l law lib rary
SO ORDERED. 4
chanrob les vi rtual law lib rary
The aforequoted decision of the Court of Appeals became final

and executory on February 10, 1988 5 and the entire records
remanded to the court a quo on March 14, 1988. 6
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Page
BENGSON filed an Omnibus Motion 7 on March 14, 1988 for the

implementation of Items Nos. 3, 4, 9 and 10 of the Court of
Appeals decision. On April 5, 1988, the GSIS filed its "Comment
and Manifestation with Counter Motion" 8 praying that the Motion
for Execution of BENGSON be denied in the meantime, without
prejudice to the court ordering computation of the respective
claims of the parties for the purpose of determining which party is
97
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still entitled to receive any amount, if still due and owing, or that
the execution be simultaneous.
chanroblesv irt ualawli bra rycha nrob les vi rtua l law lib rary
To determine the replacement value of BENGSON's mortgaged

properties, an ocular inspection was conducted on May 23-25,
1988 pursuant to the May 5, 1988 order of the court a quo. 9 In
the said meeting, the GSIS was represented by Atty. Octavio del
Callar, Director, Litigation Group and Atty. Arturo F. Martinez,
Office of the Government Corporate Counsel. A report on the
ocular inspection conducted was submitted by the Clerk of Court
and the Deputy Sheriff on July 11, 1988 10 and noted by the court
on July 19, 1988. 11
chan robles v irt ual law l ibra ry
Documentary evidence for the determination of the replacement

value of the mortgaged properties in the amount of
P37,951,878.00 was submitted by, BENGSON on June 6,
1988. 12
On July 6, 1988, the court a quo issued a resolution/order 13 for

the execution of Items 3, 4 and 9 of the Court of Appeals decision
and the approval of the documentary evidence presented by
BENGSON for the replacement value of the chattels, items,
machineries, etc., which were no longer in existence as of May
23, 1988 in the ocular inspection.
chanroblesvi rtu alawlib raryc han robles vi rt ual law li bra ry
BENGSON filed a "Motion for Hearing on Costs of Suit" on July 15,

1988 together with a list of persons from whom moneys were
obtained and utilized as "costs of suit". 14 GSIS filed an
opposition thereto 15 on July 19, 1988 on the ground that the
listing of these persons are hearsay, without probative value and
cannot be considered as part of costs of suit.
On the same date, GSIS filed its Motion for Execution 16 of Item
No. 8 of the CA Decision which required BENGSON to pay the
GSIS debenture bond in the sum of P900,000.00 but which was
opposed by BENGSON on July 24, 1988. 17
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A writ of execution was issued on August 22, 1988 for Items Nos.
1 and 2 only of the July 6, 1988 Resolution/Order 18 in view of
the motion for reconsideration against Item No. 3 of the said
Resolution/Order. 19 Consequently, the certificates of title of the
properties of BENGSON were cancelled and new ones were issued
in the name of Bengson Commercial Building, Inc. on August 30,
98
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1988 20 and BENGSON was placed in full possession of the

properties on August 23, 1988, as per certification of the Clerk of
Court of the then CFI of San Fernando, La Union dated August
30, 1988. 21
GSIS filed its "Motion to Annul Decision" on August 29, 1988

before the Court of Appeals notwithstanding the final and
executory character of said decision. 22
On September 12, 1988, an order was issued by the court a

quo denying the GSIS', Motion for Suspension of the Proceedings
on the ground that the decision of the Court of Appeals has
become final and executory, and that "the defendant did not lift a
finger to question the legality and soundness of the decision" and
has even actively participated in the proceeding by presenting
evidence in court for the computation of the debenture bond
executed by BENGSON in favor of the GSIS. 23
The trial court issued an order 24 on September 14, 1988

directing the Provincial Sheriff of La Union to effect immediately
the notice of garnishment to the Philippine National Bank, Escolta,
Manila and garnish the amount of P2.76 Million, as prayed for in
the "Ex-Parte Application for Notice of Levy" 25 filed by BENGSON
on September 12, 1988. Said notice was served on PNB the
following day.
An "Urgent Motion for the Issuance of Restraining Order or

Injunction" 26 was filed by the GSIS before the Court of Appeals
on September 22, 1988. Said motion, as well as the
aforementioned Motion to Annul Decision, was noted without
further action. 27
chanro bles vi rt ual law lib rary
Pursuant to the notice of garnishment, the account of GSIS with

the Philippine National Bank was placed on a "hold code" 28 and
the amount of P2.76 Million was released to the custody of Mr.
Romualdo Bengson and/or Atty. Pacifico Yadao on October 27,
1988 in compliance with the October 4, 1988 order of the lower
court. 29
Page
99
On October 14, 1988, GSIS filed this petition for certiorari and
prohibition with prayer for a temporary restraining order before
this Court after having failed to obtain an order from the trial
court to hold in abeyance the execution of the writ of
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garnishment pending resolution in the Regional Trial Court of San

Fernando, La Union of the GSIS's Motion for Reconsideration and
Motion to Quash Writ of Garnishment.
chanroble svi rtualaw lib raryc hanrobles vi rt ual law li bra ry
A temporary restraining order was issued by this Court on

November 16, 1988 enjoining BENGSON from enforcing the
decision of the Court of
Appeals, 30 which unfortunately came late for the P2.76 Million
has already been released to BENGSON on October 27, 1988.
This Court gave due course to the petition on October 12, 1989
and further required the parties to submit their respective
memoranda. 31BENGSON complied with said requirement on
December 5, 1989 32 while the GSIS submitted its memorandum
on January 26, 1990. 33
chanrob les vi rtua l law lib ra ry
The Principal issue in the case at bar is whether the January 19,
1988 decision of the Court of Appeals, which has been partially
executed, can still be challenged.
chan rob lesvi rtua lawlib rary chan robles v irt ual law l ibra ry
GSIS contends that the directives embodied in the decision are

too vague and incapable of implementation, thereby voiding the
entire decision. 34 The directive of the Court of Appeals for the
GSIS to "restructure" the loans of BENGSON is incapable of
accomplishment because there is nothing in the decision itself,
nor in any of the papers submitted by the parties, which gives the
parameters as to how said loans will be restructured. 35 Being a
void judgment, it may be assailed or impugned at
anytime.36Furthermore, the directive to restructure, without any
given frame of reference, actually infringes on the constitutional
right of GSIS to the non-impairment of obligations and contracts
and to due process. 37
chanro bles vi rtua l law lib ra ry
BENGSON, on the other hand, contends that GSIS cannot invoke

the remedy of certiorariafter its failure to appeal the January 19,
1988 decision. 38
chanroble s virtu al law lib rary
The petition must fail.
chan roble svirtualawl ibra ryc hanro bles vi rtua l law li bra ry
Page
100
As this Court held in Estoesta, Sr. v. Court of

Appeals, 39 reiterating the ruling inAgricultural and Industrial
Marketing, Inc. v. Court of Appeals, 40 -
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. . . that perfection of an appeal in the manner and within the

reglementary period allowed by law is not only mandatory but
also jurisdictional. . . . Thus, if no appeal is perfected on time, the
decision becomes final and executory by operation of law after
the lapse of the reglementary period of appeal . . . . Being final
and executory the decision in question can no longer be altered,
modified or reversed by the trial court or by the appellate court .
. . . Accordingly, the prevailing party is entitled as a matter of
right, to a writ of execution the issuance of which is a ministerial
duty compellable by mandamus. . . .
As aforementioned, the decision of the Court of Appeals became
final and executory on February 10, 1988 as shown in the Entry
of Judgment on March 10, 1988 and remanded to the court a
quo on March 14, 1988. From there, neither a Motion for
Reconsideration nor an appeal was taken by GSIS. As correctly
observed by the trial court, the GSIS "did not lift a finger to
question the legality and soundness of that decision". At the time
the GSIS filed its Motion to Annul. Decision before the Court of
Appeals, the judgment sought to be annulled has been partially
executed for BENGSON has been placed in full possession of the
properties. Furthermore, at the time this petition was filed, Items
Nos. 6, 8 and 10 of the Court of Appeals decision remain to be
satisfied. On top of all these, the GSIS has actively participated in
the execution by filing its Motion for Execution of Item No. 8 of
the decision and presenting evidence in court for the computation
of the debenture bonds in the hearing conducted on August 12,
1988. These acts of participation by the GSIS negate its claim
that the directives embodied in the decision are "too vague and
incapable of implementation".
To permit a party to appeal from said partially executed final

judgment would make a mockery of the doctrine of finality of
judgments long enshrined in this jurisdiction. 41
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As regards the allegation of the GSIS that the court a quo "has
embarked on a selective and piece-meal execution/enforcement
of the decision of the Court of Appeals, enforcing only those
portions of the decision favorable to private respondent, Bengson
Commercial Building, Inc., and ignoring or disregarding those
portions of the decision of the Court of Appeals favorable to the
petitioner, GSIS", this Court has held that a case in which
101
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LLB II-A 2014 BULSU
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execution has been issued is regarded as still pending so that all

proceedings in the execution are proceedings in the suit.
Unquestionably, the court which rendered the judgment has a
general supervisory control over its process of execution. This
power carries with it the right to determine every question of fact
and law which may be involved in the execution. 42
chan robles v irt ual law l ibra ry
PREMISES CONSIDERED, the petition is hereby DENIED. The

temporary restraining order issued on November 16, 1988 is
lifted.
chanrob lesvi rtua lawlib rary chan roble s virtual law l ibra ry
Page
102
SO ORDERED.
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CIVIL PROCEDURE FULL TEXT CASES

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[G.R. No. 149634. July 6, 2004]

LORETA TORRES, MARILYN TANGTANG, ARMELA FIGURACION,

ACCORDINGLY, and to strictly enforce the aforesaid circulars to attain their

CIVIL PROCEDURE FULL TEXT CASES

the Court [r]esolved to DISMISS the petition for a defective or insufficient

The second assailed Resolution, on the other hand, denied petitioners

CIVIL PROCEDURE FULL TEXT CASES

Denying petitioners Motion for Reconsideration, the appellate court

Whether or not petitioners are employees of the Respondent Specialized Packaging

Whether or not petitioners were illegally dismissed by Respondent SPDC.

Whether or not petitioners are entitled to their money claims.

CIVIL PROCEDURE FULL TEXT CASES

The Courts Ruling

The above-quoted issues raised in the Memorandum of petitioners,

Review of NLRC Decisions

CIVIL PROCEDURE FULL TEXT CASES

Actually, two separate rules are involved in the present controversy

CIVIL PROCEDURE FULL TEXT CASES

SEC. 3. Contents and filing of petition; effect of non-compliance with

The submission of a certificate against forum shopping is thus deemed

CIVIL PROCEDURE FULL TEXT CASES

The rule of substantial compliance has likewise been availed of with

In previous rulings, we have held that a certificate against forum

x x x. The attestation contained in the certification on non-forum shopping

CIVIL PROCEDURE FULL TEXT CASES

often. Under these circumstances, it was extremely difficult to secure all

Second, it is safe to assume that the matters alleged in the certificate

Third, the apparent merits of the substantive aspects of the case, as

Consequently, the case should be remanded to the CA for a proper

WHEREFORE, this Petition is GRANTED. The assailed Resolutions of

CIVIL PROCEDURE FULL TEXT CASES

[G.R. No. 157195. April 22, 2005]

VICAR INTERNATIONAL CONSTRUCTION, INC., and CARMELITA V.

This controversy originated from a Complaint[6] for unjust enrichment

CIVIL PROCEDURE FULL TEXT CASES

Leasing and Finance Corporation filed a Complaint[7] against Vicar,

The Petition was, however, instantly dismissed by the CA in its herein

CIVIL PROCEDURE FULL TEXT CASES

The belated filing by the petitioners of the Certification of their Corporate

Petitioners assert that Carmelita V. Lim was duly authorized to execute,

CIVIL PROCEDURE FULL TEXT CASES

Verification/Certification, in which was explicitly stated the authorization and

Further, citing Yap v. Baldado,[14] they contend that their posthaste

Petitioners submit that the foregoing circumstances constitute

CIVIL PROCEDURE FULL TEXT CASES

Similarly, in General Milling Corporation v. NLRC,[18] the Court of

CIVIL PROCEDURE FULL TEXT CASES

accompanied by a board resolution or a secretarys certificate that the

1. x x x I am likewise duly authorized to execute this Verification/Certification in

Guided by the above pronouncements, the Court deems it proper and

CIVIL PROCEDURE FULL TEXT CASES

2. In my personal capacity and as a duly authorized representative of Vicar

Petitioners merely missed attaching to their Petition a concrete proof of

Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

CIVIL PROCEDURE FULL TEXT CASES

G.R. No. 89070 May 18, 1992

On 12 November 1982, COA issued another Memorandum Audit

CIVIL PROCEDURE FULL TEXT CASES

ended 30 September 1982. This Audit Report noted and enumerated

. . . that GM Cosalan's suspension from office shall

. . . that Peter M. Cosalan is hereby suspended