SHHH Digests Special Proceedings 2016-2017
Udarbe
Rule 62. Interpleader
1. RIZAL COMMERCIAL BANKING CORPORATION v. METRO CONTAINER CORPORATION
G.R. No. 127913
September 12, 2001
Doctrine: It should be remembered that an action of interpleader is afforded to
protect a person not against double liability but against double vexation in respect of
one liability.[7] It requires, as an indespensable requisite, that conflicting claims upon
the same subject matter are or may be made against the plaintiff-in-interpleader
who claims no interest whatever in the subject matter or an interest which in whole
or in part is not disputed by the claimants.
Facts: 26 September 1990, Ley Construction Corporation (LEYCON) contracted a loan
from Rizal Commercial Banking Corporation (RCBC) in the amount of Thirty Million
Pesos (P30,000,000.00). The loan was secured by a real estate mortgage over a
property, located in Barrio Ugong, Valenzuela, Metro Manila. LEYCON failed to settle
its obligations prompting RCBC to institute an extrajudicial foreclosure proceedings
against it. After LEYCONs legal attempts to forestall the action of RBCB failed, the
foreclosure took place on 28 December 1992 with RCBC as the highest bidder.
LEYCON promptly filed an action for Nullification of Extrajudicial Foreclosure Sale and
Damages against RCBC.
RCBC consolidated its ownership over the property due to LEYCONs failure to
redeem it within the 12-month redemption period and TCT No. V-332432 was issued
if favor of the bank. By virtue thereof, RCBC demanded rental payments from Metro
Container Corporation (METROCAN) which was leasing the property from
LEYCON.On 26 May 1994, LEYCON filed an action for Unlawful Detainer.
On 27 May 1994, METROCAN filed a complaint for Interpleader, against LEYCON and
RCBC to compel them to interplead and litigate their several claims among
themselves and to determine which among them shall rightfully receive the payment
of monthly rentals on the subject property. On 04 July 1995, the trial court ordered
the dismissal of the case insofar as METROCAN and LEYCON were concerned in view
of an amicable settlement they entered by virtue of which METROCAN paid back
rentals to LEYCON.
On 31 October 1995, judgment was rendered in Civil Case No. 6202, which among
other things, ordered METROCAN to pay LEYCON whatever rentals due on the
subject premises. The MeTC decision became final and executory.(UD)
De Leon. Tan.
On 01 February 1996, METROCAN moved for the dismissal of Civil Case No. 4398-V-
94 for having become moot and academic due to the amicable settlement it entered
with LEYCON on 04 July 1995 and the decision in Civil Case No. 6202 on 31 October
1995. LEYCON, likewise, moved for the dismissal of the case citing the same grounds
cited by METROCAN.
On 12 March 1996, the two motions were dismissed for lack of merit. The motions
for reconsideration filed by METROCAN and LEYCON were also denied prompting
METROCAN to seek relief from the Court of Appeals via a petition for certiorari and
prohibition with prayer for the issuance of a temporary restraining order and a writ
of preliminary injunction. LEYCON, as private respondent, also sought for the
nullification of the RTC orders. (GRANTED)
Issue: WON the party may unilaterally cause the dismissal of the case after the
answer has been filed
Held: In the case before us, it is undisputed that METROCAN filed the interpleader
action (Civil Case No. 4398-V-94) because it was unsure which between LEYCON and
RCBC was entitled to receive the payment of monthly rentals on the subject
property. LEYCON was claiming payment of the rentals as lessor of the property
while RCBC was making a demand by virtue of the consolidation of the title of the
property in its name.
It is also undisputed that LEYCON, as lessor of the subject property filed an action for
unlawful detainer (Civil Case No. 6202) against its lessee METROCAN. The issue in
Civil Case No. 6202 is limited to the question of physical or material possession of the
premises.[3] The issue of ownership is immaterial therein and the outcome of the
case could not in any way affect conflicting claims of ownership, in this case between
RCBC and LEYCON. This was made clear when the trial court, in denying RCBC's
"Motion for Inclusion x x x as an Indispensable Party" declared that "the final
determination of the issue of physical possession over the subject premises between
the plaintiff and the defendant shall not in any way affect RCBC's claims of
ownership over the said premises, since RCBC is neither a co-lessor or co-lessee of
the same, hence he has no legal personality to join the parties herein with respect to
the issue of physical possession vis--vis the contract of lease between the parties." As
aptly pointed by the MeTC, the issue in Civil Case No. 6202 is limited to the
defendant LEYCON's breach of the provisions of the Contract of Lease Rentals.
Hence, the reason for the interpleader action ceased when the MeTC rendered
judgment in Civil Case No. 6202 whereby the court directed METROCAN to pay
LEYCON whatever rentals due on the subject premises x x x. While RCBC, not being a
party to Civil Case No. 6202, could not be bound by the judgment therein,
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METROCAN is bound by the MeTC decision. When the decision in Civil Case No. 6202
became final and executory, METROCAN has no other alternative left but to pay the
rentals to LEYCON. Precisely because there was already a judicial fiat to METROCAN,
there was no more reason to continue with Civil Case No. 4398-V-94. Thus,
METROCAN moved for the dismissal of the interpleader action not because it is no
longer interested but because there is no more need for it to pursue such cause of
action.
It should be remembered that an action of interpleader is afforded to protect a
person not against double liability but against double vexation in respect of one
liability.[7] It requires, as an indespensable requisite, that conflicting claims upon the
same subject matter are or may be made against the plaintiff-in-interpleader who
claims no interest whatever in the subject matter or an interest which in whole or in
part is not disputed by the claimants.[8] The decision in Civil Case No. 6202 resolved
the conflicting claims insofar as payment of rentals was concerned.
Petitioner is correct in saying that it is not bound by the decision in Civil Case No.
6202. It is not a party thereto. However, it could not compel METROCAN to pursue
Civil Case No. 4398-V-94. RCBC has other avenues to prove its claim. Is not bereft of
other legal remedies. In fact, he issue of ownership can very well be threshed out in
Civil Case No. 4037-V-93, the case for Nullification of Extrajudicial Foreclosure Sale
and Damages filed by LEYCON against RCBC.
2. LIM v. CONTINENTAL DEV. CORP.
G.R. No. L-41818; G.R. No. L-41831;
February 18, 1976
DOCTRINE: Rule 63, Section 1 of the New Rules of Court tells us when a cause of
action exists to support a complaint in interpleader: Whenever conflicting claims
upon the same subject matter are or may be made against a person, who claims no
interest whatever in the subject matter, or an interest which in whole or in part is
not disputed by the complainants to compel them to interplead and litigate their
several claims among themselves.
This provision only requires as an indispensable requisite: that conflicting claims
upon the same subject matter are or may be made against the plaintiff-in-
interpleader who claims no interest whatever in the subject matter or an interest
which in whole or in part is not disputed by the claimants.
FACTS: Continental Development Corporation filed a complaint for interpleader
against defendants Benito Gervasio Tan and Zoila Co Lim, alleging among others:
De Leon. Tan. Udarbe
2. That in the books of the plaintiff, there appears the name of the defendant Benito
Gervasio Tan as one of its stockholders with fifty (50) common shares and
subsequently credited with (75) shares by way of dividends or an outstanding total
stockholding of (125) common shares of the par value of (P250.00) each.
3. That said defendant Benito Gervasio Tan, personally or through his lawyer, has
since December, 1972, been demanding from by letters and telegrams, the release
to him of the certificates stock aforesaid but which the plaintiff has not done so far
and is prevented from doing so because of the vehement and adverse claim thereto
by the other defendant, Zoila Co Lim.
4. That the defendant Zoila Co Lim, by letters sent to the plaintiff through her
counsel, has laid claim and persists in claiming the very same shares of stock being
demanded by the other defendant alleging that said stocks really belonged to her
mother already deceased, and strongly denying her proclaim to the same.
5. That both defendants, through their respective lawyers, threaten to take punitive
measures against the plaintiff company should it take any steps that may prejudice
their respective interests in so far as the stocks in question are concerned.
That the plaintiff company has no interest of any kind in said stocks and is ready and
willing to deliver the corresponding certificates of ownership to whomsoever as this
Honorable Court may direct. And praying that the defendants be directed to
interplead and litigate their respective claims over the aforementioned shares of
stock and to determine their respective rights thereto.
Benito Gervasio Tan filed a motion to dismiss the complaint, on the ground, inter
alia, that paragraph 2 of the complaint itself states that the shares of stock in
question are recorded in the books of petitioner in the same of defendant Benito
Gervasio Tan, who should therefore be declared owner thereof pursuant to Section
52 of the Corporation Law.
Zoila Co Lim filed her answer expressly admitting paragraph 2, but alleging that the
said shares of stock had previously been delivered in trust to the defendant Benito
Gervasio Tan for her (Zoila's) mother, the late So Bi, alias Tawa, the actual owner of
the shares of stock; that now Benito GervasioTan would want the re-issuance and
release to him of new replacement certificates, which petitioner has not so far done;
and that as the daughter and heir of said So Bi, alias Tawa, she is now the owner of
the said shares of stock, which should be delivered to her.
SHHH Digests Special Proceedings 2016-2017
Continental Development Corporation filed its opposition to Benito's motion to
dismiss. The trial judge dismissed the complaint for lack of cause of action, invoking
the Corporation Law.
Lim and Continental filed their respective MR of the aforesaid order, to which the
defendant Benito Gervasio Tan filed his rejoinder. Said motions were denied.
ISSUE:Whether the ruling of the lower court was correct.
RULING: Since there is an active conflict of interests between the two defendants,
now herein respondent Benito Gervasio Tan and petitioner Zoila Co Lim, over the
disputed shares of stock, the trial court gravely abused its discretion in dismissing the
complaint for interpleader, which practically decided ownership of the shares of
stock in favor of defendant Benito Gervasio Tan. The two defendants should be given
full opportunity to litigate their respective claims.
Rule 63, Section 1 of the New Rules of Court tells us when a cause of action exists to
support a complaint in interpleader: Whenever conflicting claims upon the same
subject matter are or may be made against a person, who claims no interest
whatever in the subject matter, or an interest which in whole or in part is not
disputed by the complainants to compel them to interplead and litigate their several
claims among themselves.
This provision only requires as an indispensable requisite: that conflicting claims
upon the same subject matter are or may be made against the plaintiff-in-
interpleader who claims no interest whatever in the subject matter or an interest
which in whole or in part is not disputed by the claimants.
The action of interpleader under section 120, is a remedy whereby a person who has
personal property in his possession, or an obligation to render wholly or partially,
without claiming any right in both comes to court and asks that the persons who
claim the said personal property or who consider themselves entitled to demand
compliance with the obligation, be required to litigate among themselves, in order to
determine finally who is entitled to one or the other thing. The remedy is afforded
not to protect a person against a double liability but to protect him against a double
vexation in respect of one liability'
An interpleader merely demands as a sine qua non element that there be two or
more claimants to the fund or thing in dispute through separate and different
interests. The claims must be adverse before relief can be granted and the parties
De Leon. Tan. Udarbe
sought to be interpleaded must be in a position to make effective claims.
Additionally, the fund, thing, or duty over which the parties assert adverse claims
must be one and the same and derived from the same source.
Indeed, petitioner corporation is placed in the same situation as a lessee who does
not know the person to whom he will pay the rentals due to the conflicting claims
over the property leased, or a sheriff who finds himself puzzled by conflicting claims
to a property seized by him.
3. Gregorio Sy-Quia v. Sheriff of Ilocos Sur & Filadelfo De Leon
GR. No. L-22807
October 10, 1924
Doctrine: It is the better practice for the sheriff to sell the property and hold the
proceeds of the sale subject to the outcome of the action of interpleader
Facts: On Feb. 3, 1915, Miguel Aglipay Cheng-Laco and Feliciano Reyes Cheng-
Kiangco executed a chattel mortgage in favor of the petitioner, Gregorio R. Sy-Quia
on their mercantile, establishment, with all the merchandise therein contained, as
security for a debt of P6,000.
From its terms it may be inferred that it was the intention of the parties that the
mortgagors were to be permitted to sell the merchandise replenishing their stock
from time to time and that the new stock brought in should also be subject to the
mortgage.
On May 5, 1924, Miguel Aglipay Cheng-Laco executed another chattel mortgage on
the same establishment and all its contents in favor of the respondent Filadelfo de
Leon as security for the sum of P4,900, which mortgage was recorded on May 4,
1924.
On the latter date of the petitioner, in writing, requested the sheriff to take
possession of the mortgaged property and to sell it at public auction under the
provisions of the Chattel Mortgage Law (Act No. 1508). The sheriff seized the
establishment in question as well as its contents and fixed the date of the sale at
June 2, 1924.
In the meantime Filadelfo de Leon presented an adverse claim to the property by
virtue of his chattel mortgage, alleging that all the goods on which the chattel
mortgage of Gregorio R. Sy-Quia was given had been sold long before the chattel
mortgage in favor of De Leon was executed and that, therefore, the earlier chattel
mortgage was of no effect.
SHHH Digests Special Proceedings 2016-2017
The sheriff being in doubt as to the priority of the conflicting claims, suspended the
foreclosure proceedings and brought an action under section 120 of the Code of Civil
Procedure requiring the two claimants to interplead. Thereupon, the present
proceeding that the duty of the sheriff to proceed with the sale was a ministerial one
and praying that the sheriff be commanded to proceed.
Issue: WON the action for interpleader is justified
Held: Yes. Though it, perhaps, would have been better practice for the sheriff to sell
the property and hold the proceeds of the sale subject to the outcome of the action
of interpleader, we, nevertheless, are of the opinion that the facts shown do not
justify our interference by mandamus. The sheriff might lay himself open to an
action for damages if he sold the goods without the consent of the holder of the last
mortgage, and it does not appear that the petitioner offered to give bond to hold
him harmless in such an event. In these circumstances, his action in suspending the
sale pending the determination of the action of interpleader seems justified.
We may say further that in cases such as the present, the petition for mandamus
should be addressed to the Courts of First Instance rather than to this court.
4. PAGKALINAWAN v. RODAS
G.R. No. L-1806
Feb. 25 1948
Doctrine: Under the law, the latter have a right to file the interpleader suit in view of
the claim for rentals of Angel de Leon Ong; and if the respondent Tambunting
believes that he is legally entitled to said rentals, he is free to move for withdrawal of
the deposits made by the petitioners.
Facts: In an ejectment suit between Manuel Tambunting, plaintiff, and Alfonso
Pagkalinawan and Manuel Pagkalinawan, defendants, appealed from the municipal
court to the Court of First Instance of Manila, the latter court, after trial, rendered a
decision dated July 3, 1947, sentencing the defendants to vacate the house in
question and to pay the plaintiff the rentals from November, 1946, at the rate of P45
a month, plus the costs.
A Motion for Reconsideration was filed by the defendants wherein the Court of First
Instance of Manila issued an order dated July 26, 1947, granting said motion, setting
aside the decision of July 3, 1947, and absolving the defendants from the complaint.
.
De Leon. Tan. Udarbe
On motion for reconsideration in turn filed by the plaintiff, an order dated August 16,
1947, was issued in which the same court "dicta de nuevo sentencia en esta causa,
ordenando al Escribano pague al aqui domandante los alquileres depositados por los
demandados paguen al demandante directamenta los alquileres, en caso contrario,
el Juzgado ordenara su lanzamiento de la finca en cuestion y les condenara al pago
de las costas."
The defendants sought to stay the execution on the ground that they had in the
meantime filed with the same court an interpleader suit against the plaintiff and one
Angel de Leon Ong, praying that the latter two be ordered to litigate their conflicting
claims to the rentals due from the defendants for the premises in question, it
appearing that said defendants received a notice from the Attorney of Angel de Leon
Ong advising the defendants to stop paying rentals to the plaintiff.
The Court of First Instance of Manila acceded to the motion for stay of execution,
but, at the instance of the plaintiff, it issued an order on November 1, 1947, directing
that execution be proceeded with. Failing to obtain a reconsideration of the latter
order, the defendants instituted the present petition for certiorari and prohibition,
seeking from us an order directing Hon. Sotero Rodas, Judge of the Court of First
Instance of Manila, and Joaquin Garcia, sheriff, to desist from carrying out the writ of
execution.
Issue: WON the petitioners have a right to file an interpleader
Held: It is true that the decision of the respondent judge of August 16, 1947, orders
the petitioners to pay the rentals directly to the respondent Manuel Tambunting and
provides for their ejectment in case of default. But it appears that, in connection
with the interpleader suit filed by the herein petitioners in the Court of First Instance
of Manila, said rentals were deposited with the clerk of court, of which fact the
respondent judge was informed by the petitioners in their constancia dated October
15, 1947. Such deposits, in our opinion, constitute a bona fide compliance with the
decision of the respondent judge, since it is undeniable that the petitioners were
warned by Angel de Leon Ong not to pay rentals to the respondent Manuel
Tambunting. That there is really a conflicting claim between Angel de Leon Ong and
respondent Manuel Tambunting is evidenced by the fact that there are pending in
the Court of First Instance of Manila civil case No. 815, between Manuel
Tambunting, plaintiff, and Angel de Leon Ong and Ong Hoa, defendants, for the
annulment of a contract of sale involving the premises in question, and civil case No.
2690, between Angel de Leon Ong, plaintiff, and Manuel Tambunting, defendant, for
the ejectment of Tambunting from the property located at Nos. 329 to 339 Tanduay
Street, Manila, which includes the premises held by the petitioners. Under the law,
the latter have a right to file the interpleader suit in view of the claim for rentals of
SHHH Digests Special Proceedings 2016-2017
Angel de Leon Ong; and if the respondent Tambunting believes that he is legally
entitled to said rentals, he is free to move for withdrawal of the deposits made by
the petitioners.
5. UNITED COCONUT PLANTERS BANK v. IAC
G.R. Nos. 72664-65;
March 20, 1990
DOCTRINE: Interpleader is a proper remedy where a bank which had issued a
manager's check is subjected to opposing claims by persons who respectively claim a
right to the funds covered by the manager's check. The Bank is entitled to take
necessary precautions so that, as far possible, it does not make a mistake as to who
is entitled to payment.
FACTS: United Coconut Planters Bank (Bank) filed in the lower court a complaint-in-
interpleader against private respondent Makati Bel-Air Condominium Developers,
Inc. and Altiura Investors, Inc. The subject matter was a manager's check worth
P494,000.00 issued by petitioner Bank payable to Makati Bel-Air, having been
purchased by Altiura. Altiura delivered the check to Makati Bel-Air as part payment
on an office condominium unit in the Cacho-Gonzales Building.
Petitioner Bank received from Altiura instructions to hold payment on the manager's
check, in view of a material discrepancy in the area of the office unit purchased by
Altiura which unit actually measured 124.58 square meters, instead of 165 square
meters as stipulated in the contract of sale. Petitioner Bank immediately requested
private respondent Makati Bel-Air, by a letter, to advise the Bank why it should not
issue the stop payment order requested by Altiura.
The next day, petitioner Bank received a reply from Makati Bel-Air explaining the
latter's side and proposing a possible reduction of the office unit's purchase price.
Petitioner Bank received a letter from Altiura requesting the Bank to hold payment
of its manager's check while Altiura was discussing Makati Bel-Air's proposal for
reduction of the purchase price and requesting the Bank to give both parties fifteen
(15) days within which to settle their differences. By letter, petitioner Bank
requested Makati Bel-Air to hold in abeyance for a period not exceeding fifteen (15)
days the presentation of the manager's check, so that both parties could settle their
differences amicably.
De Leon. Tan. Udarbe
Petitioner Bank was advised in writing by Makati Bel-Air that the latter did not agree
to the request of the Bank. Thereupon, petitioner Bank filed a complaint-in-
interpleader against Altiura and Makati Bel-Air to require the latter to litigate with
each other their respective claims over the funds represented by the manager's
check involved, and at the same time asking the court for authority to deposit the
funds in a special account until the conflicting claims shall have been adjudicated.
The trial court ordered the deposit of the funds into a special account with any
reputable banking institution subject to further orders of the court.
On 18 August 1979, Makati Bel-Air filed its answer and incorporated therein a
counter-claim against petitioner Bank and a cross-claim against Altiura. In turn,
Altiura filed an answer to the complaint-in-interpleader, with motion to dismiss the
crossclaim of Makati Bel-Air.
On 23 July 1979, Altiura had filed a complaint for rescission of the contract of sale of
the condominium unit, with damages, against Makati Bel-Air, which case was
eventually consolidated with the interpleader case.
Petitioner Bank filed a "motion to withdraw complaint and motion to dismiss
counter-claim", stating that there was no longer any conflict between Makati Bel-Air
and Altiura since Makati Bel-Air in its answer had alleged that it had cancelled and
rescinded the sale of the condominium unit and had relinquished any claim it had
over the funds covered by the manager's check.
Makati Bel-Air delivered to petitioner Bank the original of the manager's check. On
18 February 1980, the trial court in issued an order directing the release of the funds
covered by the manager's check to Altiura.
The trial court issued an order declaring that motion to withdraw the complaint-in-
interpleader had been rendered moot and academic by the court's earlier order
directing petitioner Bank to release to Altiura the P494,000.00 covered by the
manager's check, which Makati Bel-Air had not opposed nor appealed from. In the
same order, the trial court granted Makati Bel-Air's motion to consolidate the
interpleader case and the rescission plus damages case.
On 12 July 1983, upon motion of petitioner Bank, the trial court issued an order
clarifying its 28 April 1983 order by stating that the counter-claim of Makati Bel-Air
was dismissed when the funds covered by the manager's check were released to
Altiura without objection of Makati Bel-Air. The order denied Altiura's motion to
dismiss Makati Bel-Air's cross-claim.
SHHH Digests Special Proceedings 2016-2017
Makati Bel-Air moved for reconsideration without success. Makati Bel-Air then went
to the respondent appellate court on petition for certiorari.
In its decision dated 27 June 1985, the appellate court granted certiorari and
nullified the trial court's orders to the extent that these had dismissed Makati Bel-
Air's counter-claim. The appellate court held that the withdrawal of the complaint-in-
interpleader and its dismissal as moot and academic did not operate ipso facto to
dismiss Makati Bel-Air's counter-claim for the reason that said counter-claim was
based on "an entirely different cause of action from that in the complaint-[in]-
interpleader".
Petitioner Bank argues that Makati Bel-Air's counter-claim was compulsory in nature
and had therefore been dissolved when the complaint-in-interpleader was
withdrawn and dismissed. Makati Bel-Air argues upon the other hand, that its
counterclaim was not a compulsory one.
Makati Bel-Air's counterclaim in the interpleader proceedings was for damages in
the amount of P5,000,000.00, based upon the theory that petitioner Bank had
violated its guarantee embodied in its manager's check when it in effect stopped
payment of said check, allegedly causing damages to Makati Bel-Air the latter having
allegedly issued checks against said funds.
ISSUE: Whether the ruling of the respondent court was correct.
RULING: Under Section 4, Rule 9 of the Revised Rules of Court, a compulsory
counterclaim is "one which arises out of or is necessarily connected with the
transaction or occurrence that is the subject matter of the opposing party's claim."
Interpleader is a proper remedy where a bank which had issued a manager's check is
subjected to opposing claims by persons who respectively claim a right to the funds
covered by the manager's check. The Bank is entitled to take necessary precautions
so that, as far possible, it does not make a mistake as to who is entitled to payment.
In the instant case, petitioner Bank having been informed by both Altiura and Makati
Bel-Air of their respective positions in their controversy, and Makati Bel-Air having
refused the Bank's suggestion voluntarily to refrain for fifteen (15) days from
presenting the check for payment, petitioner Bank felt compelled to resort to the
remedy of interpleader. It will be seen that Makati Bel-Air's counter-claim arose out
of or was necessarily connected with the recourse of petitioner to this remedy of
interpleader. Makati-Bel Air was in effect claiming that petitioner Bank had in bad
faith refused to honor its undertaking to pay represented by the manager's check it
De Leon. Tan. Udarbe
had issued. When the trial court granted petitioner's motion for withdrawal of its
complaint-in-interpleader, as having become moot and academic by reason of
Makati Bel-Air's having cancelled the sale of the office unit to Altiura and having
returned the manager's check to the Bank and acquiesced in the release of the funds
to Altiura, the trial court in effect held that petitioner Bank's recourse to interpleader
was proper and not a frivolous or malicious maneuver to evade its obligation to pay
to the party lawfully entitled the funds represented by the manager's check. Having
done so, the trial court could not have logically allowed Makati Bel-Air to recover on
its counterclaim for damages against petitioner Bank.
There are other considerations supporting the conclusion reached by this Court that
respondent appellate court had committed reversible error. Makati Bel-Air was a
party to the contract of sale of an office condominium unit to Altiura, for the
payment of which the manager's check was issued. Accordingly, Makati Bel-Air was
fully aware, at the time it had received the manager's check, that there was, or had
arisen, at least partial failure of consideration since it was unable to comply with its
obligation to deliver office space amounting to 165 square meters to Altiura. Makati
Bel-Air was also aware that petitioner Bank had been informed by Altiura of the
claimed defect in Makati Bel-Air's title to the manager's check or its right to the
proceeds thereof. Vis-a-vis both Altiura and petitioner Bank, Makati Bel-Air was not a
holder in due course of the manager's check.
6. Elizabeth Del Carmen v. Sps. Restituto and Mima Sabordo
GR. No. 181723
August 11, 2014
Doctrine: Interpleader is not the proper remedy because RPB did not make any claim
whatsoever over the amount consigned by petitioner and her co-heirs with the
court.
Facts: In 1961, Sps. Toribio and Eufrocina Suico, along with several business partners,
entered into a business venture by establishing a rice and com mill at Mandaue City,
Cebu. As part of their capital, they obtained a loan from the DBP, and to secure the
said loan, 4 parcels of land owned by the Suico spouses and another lot owned by
their business partner, Juliana Del Rosario, were mortgaged.
Subsequently, the Suico spouses and their business partners failed to pay their loan
obligations forcing DBP to foreclose the mortgage. After the Suico spouses and their
partners failed to redeem the foreclosed properties, DBP consolidated its ownership
over the same. Nonetheless, DBP later allowed the Suico spouses and Reginald and
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Beatriz Flores (Flores spouses), as substitutes for Juliana Del Rosario, to repurchase
the subject lots by way of a conditional sale for the sum of P240,571.00.
The Suico and Flores spouses were able to pay the downpayment and the first
monthly amortization, but no monthly installments were made thereafter.
Threatened with the cancellation of the conditional sale, the Suico and Flores
spouses sold their rights over the said properties to respondents Restituto and Mima
Sabordo, subject to the condition that the latter shall pay the balance of the sale
price.
Respondents and the Suico and Flores spouses executed a supplemental agreement
whereby they affirmed that what was actually sold to respondents were Lots 512
and 513, while Lots 506 and 514 were given to them as usufructuaries. DBP
approved the sale of rights of the Suico and Flores spouses in favor of herein
respondents. Subsequently, respondents were able to repurchase the foreclosed
properties of the Suico and Flores spouses.
Toribio Suico died leaving his widow, Eufrocina, and several others, including
petitioner, as legal heirs. Later, they discovered that respondents mortgaged Lots
506 and 514 with Republic Planters Bank (RPB) as security for a loan which,
subsequently, became delinquent.
Thereafter, claiming that they are ready with the payment of P127,500.00, but
alleging that they cannot determine as to whom such payment shall be made,
petitioner and her co-heirs filed a Complaint with the RTC of San Carlos City, Negros
Occidental seeking to compel herein respondents and RPB to interplead and litigate
between themselves their respective interests on the abovementioned sum of
money. Upon filing of their complaint, the heirs of Toribio deposited the amount
of P127,500.00 with the RTC.
Respondents filed their Answer with Counterclaim praying for the dismissal of the
above Complaint on the grounds that (1) the action for interpleader was improper
since RPB is not laying any claim on the sum of P127,500.00; (2) that the period
within which the complainants are allowed to purchase Lots 506 and 514 had
already expired; (3) that there was no valid consignation, and (4) that the case is
barred by litis pendencia or res judicata.
RTC dismissed the Complaint of petitioner and her co-heirs for lack of merit.
Petitioner and her co-heirs appealed with the CA contending that the judicial deposit
or consignation of the amount of P127,500.00 was valid and binding and produced
the effect of payment of the purchase price of the subject lots.
De Leon. Tan. Udarbe
In its assailed Decision, the CA denied the above appeal for lack of merit and
affirmed the disputed RTC Decision.
Issue: WON interpleader is the proper remedy
Held: No. In the instant case, petitioner and her co-heirs, upon making the deposit
with the RTC, did not ask the trial court that respondents be notified to receive the
amount that they have deposited. In fact, there was no tender of payment. Instead,
what petitioner and her co-heirs prayed for is that respondents and RPB be directed
to interplead with one another to determine their alleged respective rights over the
consigned amount; that respondents be likewise directed to substitute the subject
lots with other real properties as collateral for their loan with RPB and that RPB be
also directed to accept the substitute real properties as collateral for the said loan.
Nonetheless, the trial court correctly ruled that interpleader is not the proper
remedy because RPB did not make any claim whatsoever over the amount consigned
by petitioner and her co-heirs with the court.
In the cases of Del Rosario v. Sandico and Salvante v. Cruz, likewise cited as authority
by petitioner, this Court held that, for a consignation or deposit with the court of an
amount due on a judgment to be considered as payment, there must be prior tender
to the judgment creditor who refuses to accept it. As stated above, tender of
payment involves a positive and unconditional act by the obligor of offering legal
tender currency as payment to the obligee for the formers obligation and
demanding that the latter accept the same. In the instant case, the Court finds no
cogent reason to depart from the findings of the CA and the RTC that petitioner and
her co-heirs failed to make a prior valid tender of payment to respondents.
It is settled that compliance with the requisites of a valid consignation is mandatory.
Failure to comply strictly with any of the requisites will render the consignation void.
One of these requisites is a valid prior tender of payment.
Note: Under Article 1256, the only instances where prior tender of payment is
excused are: (1) when the creditor is absent or unknown, or does not appear at the
place of payment; (2) when the creditor is incapacitated to receive the payment at
the time it is due; (3) when, without just cause, the creditor refuses to give a receipt;
(4) when two or more persons claim the same right to collect; and (5) when the title
of the obligation has been lost. None of these instances are present in the instant
case. Hence, the fact that the subject lots are in danger of being foreclosed does not
excuse petitioner and her co-heirs from tendering payment to respondents, as
directed by the court.
SHHH Digests Special Proceedings 2016-2017
7. PASRICHA v. DON LUIS DISON REALTY INC.
G.R. No. 136409
March 14, 2008
Doctrine: An action for interpleader is proper when the lessee does not know to
whom payment of rentals should be made due to conflicting claims on the property
(or on the right to collect). The remedy is afforded not to protect a person against
double liability but to protect him against double vexation in respect of one liability.
Facts: Respondent Don Luis Dison Realty, Inc. and petitioners executed two
Contracts of Lease whereby the former, as lessor, agreed to lease to the latter Units
22, 24, 32, 33, 34, 35, 36, 37 and 38 of the San Luis Building, located at 1006 M.Y.
Orosa cor. T.M. Kalaw Streets, Ermita, Manila. Petitioners, in turn, agreed to pay
monthly rentals. Petitioners were, likewise, required to pay for the cost of electric
consumption, water bills and the use of telephone cables.
The lease of Rooms 36, 37 and 38 did not materialize leaving only Rooms 22, 24, 32,
33, 34 and 35 as subjects of the lease contracts.[9] While the contracts were in effect,
petitioners dealt with Francis Pacheco (Pacheco), then General Manager of private
respondent. Thereafter, Pacheco was replaced by Roswinda Bautista (Ms.
Bautista).[10]Petitioners religiously paid the monthly rentals until May 1992.[11] After
that, however, despite repeated demands, petitioners continuously refused to pay
the stipulated rent.Consequently, respondent was constrained to refer the matter to
its lawyer who, in turn, made a final demand on petitioners for the payment of the
accrued rentals amounting to P916,585.58.[12] Because petitioners still refused to
comply, a complaint for ejectment was filed by private respondent through its
representative, Ms. Bautista, before the Metropolitan Trial Court (MeTC) of Manila
Petitioners admitted their failure to pay the stipulated rent for the leased premises
starting July until November 1992, but claimed that such refusal was justified
because of the internal squabble in respondent company as to the person authorized
to receive payment. To further justify their non-payment of rent, petitioners alleged
that they were prevented from using the units (rooms) subject matter of the lease
contract, except Room 35. Petitioners eventually paid their monthly rent for
December 1992 in the amount of P30,000.00, and claimed that respondent waived
its right to collect the rents for the months of July to November 1992 since
petitioners were prevented from using Rooms 22, 24, 32, 33, and 34.
However, they again withheld payment of rents starting January 1993 because of
respondents refusal to turn over Rooms 36, 37 and 38. [16] To show good faith and
willingness to pay the rents, petitioners alleged that they prepared the check
vouchers for their monthly rentals from January 1993 to January 1994.[17] Petitioners
De Leon. Tan. Udarbe
further averred in their Amended Answer[18] that the complaint for ejectment was
prematurely filed, as the controversy was not referred to the barangay for
conciliation.
On November 24, 1994, the MeTC rendered a Decision dismissing the complaint for
ejectment. The court held that mere willingness to pay the rent did not amount to
payment of the obligation; petitioners should have deposited their payment in the
name of respondent company. On the matter of possession of the subject premises,
the court did not give credence to petitioners claim that private respondent failed to
turn over possession of the premises. The court, however, dismissed the complaint
because of Ms. Bautistas alleged lack of authority to sue on behalf of the
corporation. RTC reversed the decision. Aggrieved, petitioners elevated the matter
to the Court of Appeals in a petition for review on certiorari. In a Resolution dated
December 10, 1998, the CA denied the motions for lack of merit.
Issue: WON they should have availed of the interpleader
Held: An action for interpleader is proper when the lessee does not know to whom
payment of rentals should be made due to conflicting claims on the property (or on
the right to collect). The remedy is afforded not to protect a person against double
liability but to protect him against double vexation in respect of one liability.
Neither can petitioners validly invoke the non-delivery of Rooms 36, 37 and 38 as a
justification for non-payment of rentals. Although the two contracts embraced the
lease of nine (9) rooms, the terms of the contracts - with their particular reference to
specific rooms and the monthly rental for each - easily raise the inference that the
parties intended the lease of each room separate from that of the others. There is
nothing in the contract which would lead to the conclusion that the lease of one or
more rooms was to be made dependent upon the lease of all the nine (9) rooms.
Accordingly, the use of each room by the lessee gave rise to the corresponding
obligation to pay the monthly rental for the same. Notably, respondent demanded
payment of rentals only for the rooms actually delivered to, and used by, petitioners.
It may also be mentioned that the contract specifically provides that the lease of
Rooms 36, 37 and 38 was to take effect only when the tenants thereof would vacate
the premises.Absent a clear showing that the previous tenants had vacated the
premises, respondent had no obligation to deliver possession of the subject rooms
to petitioners. Thus, petitioners cannot use the non-delivery of Rooms 36, 37 and 38
as an excuse for their failure to pay the rentals due on the other rooms they
occupied.
SHHH Digests Special Proceedings 2016-2017
In light of the foregoing disquisition, respondent has every right to exercise his right
to eject the erring lessees. The parties contracts of lease contain identical provisions,
to wit:
In case of default by the LESSEE in the payment of rental on the fifth (5 th) day of each
month, the amount owing shall as penalty bear interest at the rate of FOUR percent
(4%) per month, to be paid, without prejudice to the right of the LESSOR to
terminate his contract, enter the premises, and/or eject the LESSEE as hereinafter
set forth;
8. ARREZA v. DIAZ
G.R. No. 133113;
August 30, 2001
DOCTRINES: A complaint for interpleader shall determine the rights and obligations
of the parties and adjudicate their respective claims. Such rights, obligations, and
claims could only be adjudicated if put forward by the aggrieved party in assertion of
his rights.
In cases involving res judicata, the parties and the causes of action are identical or
substantially the same in the prior as well as the subsequent action. The judgment in
the first action is conclusive as to every matter offered and received therein and as
to any other matter admissible therein and which might have been offered for that
purpose, hence said judgment is an absolute bar to a subsequent action for the same
cause. The bar extends to questions "necessarily involved in an issue, and necessarily
adjudicated, or necessarily implied in the final judgment, although no specific finding
may have been made in reference thereto, and although such matters were directly
referred to in the pleadings and were not actually or formally presented" Said prior
judgment is conclusive in a subsequent suit between the same parties on the same
subject matter, and on the same cause of action, not only as to matters which were
decided in the first action, but also as to every other matter which the parties could
have properly set up in the prior suit.
FACTS: Bliss Development Corporation is the owner of a housing unit located at
Barangay Matandang Balara, Quezon City. In the course of a case involving a conflict
of ownership between petitioner Edgar H. Arreza and respondent Montano M. Diaz,
Jr., before the RTC of Makati, Bliss filed a complaint for interpleader.
In a decision dated March 27, 1996, the trial court resolved the conflict in favor of
defendant Edgar H. Arreza, and plaintiff Bliss Development is granted cognizance of
the May 6, 1991 transfer of rights by Emiliano and Leonila Melgazo thru Manuel
De Leon. Tan. Udarbe
Melgazo, to said defendant Edgar Arreza. The case is dismissed as against defendant
Montano M. Diaz, Jr. The third-party complaint is likewise dismissed.
The decision became final and was duly executed with Bliss executing a Contract to
Sell the property to petitioner Arreza. Respondent Diaz was constrained to deliver
the property with all its improvements to petitioner.
Thereafter respondent Diaz filed a complaint against Bliss Development Corporation,
Edgar H. Arreza, and Domingo Tapay in the RTC of Makati. He sought to hold Bliss
Development Corporation and petitioner Arreza liable for reimbursement to him of
P1,706,915;58 representing the cost of his acquisition and improvements on the
subject property with interest at 8% per annum.
Petitioner Arreza filed a Motion to Dismiss the case, citing as grounds res judicata or
conclusiveness of the judgment in the interpleader case as well as lack of cause of
action.The motion was denied for lack of merit.
MR filed by Arreza was likewise denied. Arreza filed a petition for certiorari before
the CA alleging that the Orders dated were issued against clear provisions of
pertinent laws, the Rules of Court, and established jurisprudence such that
respondent court acted without or in excess of jurisdiction, or grave abuse of
discretion amounting to lack or excess of jurisdiction. The petition was dismissed for
lack of merit. Petitioner's MR the decision of the CA was denied.
ISSUE: Whether respondent Diaz's claims for reimbursement against petitioner
Arreza are barred by res judicata.
RULING: The elements of res judicata are: (a) that the former judgment must be
final; (b) the court which rendered judgment had jurisdiction over the parties and
the subject matter; (c) it must be a judgment on the merits; and (d) there must be
between the first and second causes of action identity of the parties, subject matter,
and cause of action.
Worthy of note, the prior case for interpleader was settled with finality with this
Court's resolution. The judgment therein is now final.
When the Regional Trial Court of Makati rendered judgment, it had priorly acquired
jurisdiction over the parties and the subject matter. By asserting his right as a buyer
for value and in good faith of the subject property, and asking for relief arising
therefrom, respondent invoked the jurisdiction of the trial court. Having invoked the
jurisdiction of the Regional Trial Court of Makati by filing his answer to secure
SHHH Digests Special Proceedings 2016-2017
affirmative relief against petitioner, respondent is now estopped from challenging
the jurisdiction of said court after it had decided the case against him.
Respondent also claims that there is no identity of causes of action between the
prior case and the present case subject of this petition, as the former involved a
complaint for interpleader while the latter now involves an action for a sum of
money and damages. He avers that a complaint for interpleader is nothing more
than the determination of rights over the subject matter involved.
CA pointed out that the 1997 Rules of Civil Procedure provide that in a case for
interpleader, the court shall determine the respective rights and obligations of the
parties and adjudicate their respective claims. The appellate court noted, however,
that the defendants in that interpleader case, namely Diaz and Arreza, did not
pursue the issue of damages and reimbursement although the answer of respondent
Diaz did pray for affirmative relief arising out of the rights of a buyer in good faith.
Respondent Diaz now alleges that the issues in the prior case were delimited by the
pre-trial order which did not include matters of damages and reimbursement as an
issue. He faults petitioner for not raising such issues in the prior case, with the result
that the trial court did not resolve the rights and obligations of the parties. There
being no such resolution, no similar cause of action exists between the prior case
and the present case, according to respondent Diaz.
However, it was not petitioner's duty to do the lawyering for respondent. As stated
by the Court of Appeals, the court in a complaint for interpleader shall determine the
rights and obligations of the parties and adjudicate their respective claims. Such
rights, obligations, and claims could only be adjudicated if put forward by the
aggrieved party in assertion of his rights. That party in this case referred to
respondent Diaz. The second paragraph of Section 5 of Rule 62 of the 1997 Rules of
Civil Procedure provides that the parties in an interpleader action may file
counterclaims, cross-claims, third party complaints and responsive pleadings
thereto, "as provided by these Rules." The second paragraph was added to Section 5
to expressly authorize the additional pleadings and claims enumerated therein, in
the interest of a complete adjudication of the controversy and its incidents.
Respondent should have filed his claims against petitioner Arreza in the interpleader
action. Having asserted his rights as a buyer in good faith in his answer, and praying
relief therefor, respondent Diaz should have crystallized his demand into specific
claims for reimbursement by petitioner Arreza. This he failed to do.
De Leon. Tan. Udarbe
Having failed to set up his claim for reimbursement, said claim of respondent Diaz
being in the nature of a compulsory counterclaim is now barred.
In cases involving res judicata, the parties and the causes of action are identical or
substantially the same in the prior as well as the subsequent action. The judgment in
the first action is conclusive as to every matter offered and received therein and as
to any other matter admissible therein and which might have been offered for that
purpose, hence said judgment is an absolute bar to a subsequent action for the same
cause. The bar extends to questions "necessarily involved in an issue, and necessarily
adjudicated, or necessarily implied in the final judgment, although no specific finding
may have been made in reference thereto, and although such matters were directly
referred to in the pleadings and were not actually or formally presented" Said prior
judgment is conclusive in a subsequent suit between the same parties on the same
subject matter, and on the same cause of action, not only as to matters which were
decided in the first action, but also as to every other matter which the parties could
have properly set up in the prior suit.
In the present case, we find there is an identity of causes of action between Civil
Case No. 94-2086 and Civil Case No. 96-1372. Respondent Diaz's cause of action in
the prior case, now the crux of his present complaint against petitioner, was in the
nature of an unpleaded compulsory counterclaim, which is now barred. There being
a former final judgment on the merits in the prior case by RTC of Makati, which
acquired jurisdiction over the same parties, the same subject property, and the same
cause of action, the present complaint of respondent herein (Diaz) against petitioner
Arreza before the RTC should be dismissed on the ground of res judicata.
9. Baclayon v. CA
GR. No. 89132
February 26, 1990
Doctrine: The rule is well established that once a decision has become final and
executory the only jurisdiction left with the trial court is to order its execution
The failure by the private respondents to set up compulsory counterclaim bars their
right to raise it in a subsequent litigation.
Facts: Petitioners Leoncia, Martin, Policarpio, Hilarion, Ireneo, Juliana and Tomas, all
surnamed Baclayon; Rosendo, Felicidad and Silvestra, all surnamed Abanes; and
Tomasa, Leoncia, Anacleto, Monica, Guillerma and Gertrudes all surnamed Abellare
filed with the then CFI-Cebu a complaint for recovery of ownership and possession,
SHHH Digests Special Proceedings 2016-2017
and damages, against spouses Marciano Bacalso and Gregoria Sabandeja of Lot No.
5528 of the Cebu Cadastre. The latter filed their answer thereto on July 15, 1969.
On December 20, 1982, the trial court rendered a decision in favor of the Bacalso
spouses, declaring them owners of the subject lot, which decision was appealed by
the petitioners to the respondent CA. The respondent court ruled that defendants
be ordered to vacate the lot and surrender the same to plaintiffs.
The private respondents then elevated the case to this Court by filing a petition for
review which was, however, denied. Petitioners filed a motion for execution of
judgment and possession which was opposed by the private respondents.
The private respondents argued that since they were found by the respondent court
as builders and/or planters in good faith and Article 546 of the Civil Code ordains
that the necessary and useful expenses for the improvements must be paid to the
builders/planters in good faith with right of retention, a reception of evidence to
determine the correct value of the necessary and useful improvements must be
done first before ordering the execution.
Judge Lee issued the order that finally ordered that the losing party in this case be
given 15 days from today within which to effect a voluntary removal of any
improvements that they have introduced in the premises, considering that the
prevailing party refused to reimburse the losing party therefor, and if they do not
demolish it after the expiration of this 15 days, this Court will be constrained to
order its demolition as prayed for.
Issue: 1. WON the private respondents should be allowed to present evidence to
prove that they are builders in good faith of the improvements and the value of said
improvements
2. WON the private respondents can still file a separate complaint against the
petitioners on the ground that they are builders in good faith
Held: 1.No. The rule is well established that once a decision has become final and
executory the only jurisdiction left with the trial court is to order its execution. To
require now the trial court in a hearing supplementary to execution, to receive
private respondents' evidence to prove that they are builders in good faith of the
improvements and the value of said Improvements, is to disturb a final executory
decision; which may even cause its substantial amendment. It appears that the
private respondent's opposition to the motion for the execution of the judgment,
possession and demolition is their last straw to prevent the satisfaction of the
judgment. Sad to say, We have to cut this straw.
De Leon. Tan. Udarbe
2. No. As held in Marquez v. Valencia, the defendant having failed to set up such
alternative defenses and chosen or elected to rely on one only, the overruling thereof
was a complete determination of the controversy between the parties which bats a
subsequent action based upon an unpleaded defense, or any other cause of action,
except that of failure of the complaint to state a cause of action and of lack of
jurisdiction of the Court. The determination of the issue joined by the parties
constitutes res judicata.
Although the alternative defense of being builders in good faith is only permissive,
the counterclaim for reimbursement of the value of the improvements is in the
nature of a compulsory counterclaim. Thus, the failure by the private respondents to
set it up bars their right to raise it in a subsequent litigation (Rule 9, Section 4 of the
Rules of Court). We realize the plight of the private respondents, the rule on
comlpulsory counterclaim is designed to enable the disposition of the whole
controversy at one time and in one action. The philosophy of the rule is to
discourage multiplicity of suits.
10. Beltran v. Peoples Homesite and Housing Corporation
G.R. No. L-25138
August 28, 1996
Doctrine: Rule 63, section 1 of the Revised Rules of Court (formerly Rule 14) requires
as an indispensable element that "conflicting claims upon the same subject matter
are or may be made" against the plaintiff-in-interpleader "who claims no interest
whatever in the subject matter or an interest which in whole or in part is not
disputed by the claimants."
Facts: Since the plaintiffs first occupied in 1953 their respective housing units at
Project 4, under lease from the People's Homesite & Housing Corporation (PHHC)
and paying monthly rentals therefor, they were assured by competent authority that
after five years of continuous occupancy, they would be entitled to purchase said
units.
February 21, 1961, the PHHC announced to the tenants that the management,
administration and ownership of Project 4 would be transferred by the PHHC to the
Government Service Insurance System (GSIS) in payment of PHHC debts to the GSIS.
In the same announcement, the PHHC also asked the tenants to signify their
conformity to buy the housing units at the selling price indicated on the back
thereof, agreeing to credit the tenants, as down payment on the selling price, thirty
(30%) percent of what had been paid by them as rentals.
SHHH Digests Special Proceedings 2016-2017
The tenants accepted the PHHC offer, and on March 27, 1961, the PHHC announced
in another circular that all payments made by the tenants after March 31, 1961
would be considered as amortizations or installment payments.
The PHHC furthermore instructed the Project Housing Manager in a memorandum
of May 16, 1961 to accept as installments on the selling price the payments made
after March 31, 1961 by tenants who were up-to-date in their accounts as of said
date. In September, 1961, pursuant to the PHHC-GSIS arrangement, collections from
tenants on rentals and/or installment payments were delivered by the PHHC to the
GSIS. On December 27, 1961, the agreement of turnover of administration and
ownership of PHHC properties, including Project 4 was executed by PHHC in favor of
GSIS, pursuant to the release of mortgage and amicable settlement of the
extrajudicial foreclosure proceedings instituted in May, 1960 by GSIS against PHHC.
Subsequently, however, PHHC through its new Chairman-General Manager,
Esmeraldo Eco, refused to recognize all agreements and undertakings previously
entered into with GSIS, while GSIS insisted on its legal rights to enforce the said
agreements and was upheld in its contention by both the Government Corporate
Counsel and the Secretary of Justice. Plaintiffs thus claimed that these conflicting
claims between the defendants-corporations caused them great inconvenience and
incalculable moral and material damage, as they did not know to whom they should
pay the monthly amortizations or payments. They further alleged that as the
majority of them were GSIS policy holders, they preferred to have the
implementation of the outright sale in their favor effected by the GSIS, since the GSIS
was "legally entitled to the management, administration and ownership of the PHHC
properties in question.
On August 29, 1962, the two defendant corporations filed a motion to dismiss which
was however dismissed. Plaintiffs subsequently filed their motion for reconsideration
but was denied.
Issue: WON the conflicting claims are against the plaintiff
Held: Plaintiffs entirely miss the vital element of an action of interpleader. Rule 63,
section 1 of the Revised Rules of Court (formerly Rule 14) requires as an
indispensable element that "conflicting claims upon the same subject matter are or
may be made" against the plaintiff-in-interpleader "who claims no interest whatever
in the subject matter or an interest which in whole or in part is not disputed by the
claimants." While the two defendant corporations may have conflicting claims
between themselves with regard to the management, administration and ownership
of Project 4, such conflicting claims are not against the plaintiffs nor do they involve
or affect the plaintiffs. No allegation is made in their complaint that any corporation
other than the PHHC which was the only entity privy to their lease-purchase
De Leon. Tan. Udarbe
agreement, ever made on them any claim or demand for payment of the rentals or
amortization payments. The questions of fact raised in their complaint concerning
the enforceability, and recognition or non-enforceability and non-recognition of the
turnover agreement of December 27, 1961 between the two defendant corporations
are irrelevant to their action of interpleader, for these conflicting claims, loosely so-
called, are between the two corporations and not against plaintiffs. Both defendant
corporations were in conformity and had no dispute, as pointed out by the trial court
that the monthly payments and amortizations should be made directly to the PHHC
alone.
The record shows clearly that there were no conflicting claims by defendant
corporations as against plaintiff-tenants, which they may properly be compelled in
an interpleader suit to interplead and litigate among themselves. Both defendant
corporations were agreed that PHHC should continue receiving the tenants'
payments, and that such payments would be duly recognized even if the GSIS should
eventually take over Project 4 by virtue of their turnover agreement of December 27,
1961. As held by this Court in an early case, the action of interpleader is a remedy
whereby a person who has property in his possession or has an obligation to render
wholly or partially, without claiming any right in both, comes to court and asks that
the defendants who have made upon him conflicting claims upon the same property
or who consider themselves entitled to demand compliance with the obligation be
required to litigate among themselves in order to determine who is entitled to the
property or payment of the obligation. "The remedy is afforded not to protect a
person against a double liability but to protect him against a double vexation in
respect of one liability."
11. WACK WACK GOLF & COUNTRY CLUB, INC. v. WON
G.R. No. L-23851;
March 26, 1976
DOCTRINE:A stakeholder's action of interpleader is too late when filed after
judgment has been rendered against him in favor of one of the contending
claimants, especially where he had notice of the conflicting claims prior to the
rendition of the judgment and neglected the opportunity to implead the adverse
claimants in the suit where judgment was entered.
FACTS: On October 23, 1963, petitioner, a non-stock, civic and athletic corporation
duly organized under the laws of the Philippines, alleged, for its first cause of action,
that the defendant Lee E. Won claims ownership of its membership fee certificate
201, by virtue of the decision rendered in a civil case of the CFI of Manila, and also by
virtue of membership fee certificate 201-serial no. 1478 issued by Ponciano B.
SHHH Digests Special Proceedings 2016-2017
Jacinto, deputy clerk of court of the said CFI of Manila, for and in behalf of the
president and the secretary of the Corporation and of the People's Bank & Trust
Company as transfer agent of the said Corporation, pursuant to the order of
September 23, 1963 in the said case.
Defendant Bienvenido A. Tan, on the other hand, claims to be lawful owner of its
aforesaid membership fee certificate 201 by virtue of membership fee certificate
201-serial no. 1199 issued to him pursuant to an assignment made in his favor by
"Swan, Culbertson and Fritz," the original owner and holder of membership fee
certificate 201;
That under its articles of incorporation and by-laws the Corporation is authorized to
issue a maximum of 400 membership fee certificates to persons duly elected or
admitted to proprietary membership, all of which have been issued as early as
December 1939; that it claims no interest whatsoever in the said membership fee
certificate 201; that it has no means of determining who of the two defendants is the
lawful owner thereof; that it is without power to issue two separate certificates for
the same membership fee certificate 201, or to issue another membership fee
certificate to the defendant Lee, without violating its articles of incorporation and
by-laws; and that the membership fee certificate 201-serial no. 1199 held by the
defendant Tan and the membership fee certificate 201-serial No. 1478 issued to the
defendant Lee proceed from the same membership fee certificate 201, originally
issued in the name of "Swan, Culbertson and Fritz".
For its second cause of action. it alleged that the membership fee certificate 201-
serial no. 1478 issued by the deputy clerk of court in behalf of the Corporation is null
and void because issued in violation of its by-laws, which require the surrender and
cancellation of the outstanding membership fee certificate 201 before issuance may
be made to the transferee of a new certificate duly signed by its president and
secretary, aside from the fact that the decision of the CFI of Manila in the civil case is
not binding upon the defendant Tan, holder of membership fee certificate 201-serial
no. 1199; that Tan is made a party because of his refusal to join it in this action or
bring a separate action to protect his rights despite the fact that he has a legal and
beneficial interest in the subject matter of this litigation; and that he is made a part
so that complete relief may be accorded herein.
The Corporation prayed that (a) an order be issued requiring Lee and Tan to
interplead and litigate their conflicting claims; and (b) judgment be rendered, after
hearing, declaring who of the two is the lawful owner of membership fee certificate
De Leon. Tan. Udarbe
201, and ordering the surrender and cancellation of membership fee certificate 201-
serial no. 1478 issued in the name of Lee.
In separate motions the defendants moved to dismiss the complaint upon the
grounds of res judicata, failure of the complaint to state a cause of action, and bar by
prescription. These motions were duly opposed by the Corporation. Finding the
grounds of bar by prior judgment and failure to state a cause of action well taken,
the trial court dismissed the complaint, with costs against the Corporation.
In this appeal, the Corporation contends that the trial court erred in dismissing the
complaint, instead of compelling the appellees to interplead because there actually
are conflicting claims between the latter with respect to the ownership of
membership fee certificate 201, and, as there is not Identity of parties, of subject-
matter, and of cause of action, between the civil case of the CFI of Manila and the
present action.
ISSUE: Whether the remedy of interpleader was timely filed in the case at bar
RULING: The action of interpleader, under section 120 of the Code of Civil Procedure,
is a remedy whereby a person who has personal property in his possession, or an
obligation to render wholly or partially, without claiming any right to either, comes
to court and asks that the persons who claim the said personal property or who
consider themselves entitled to demand compliance with the obligation, be required
to litigate among themselves in order to determine finally who is entitled to tone or
the one thing. The remedy is afforded to protect a person not against double liability
but against double vexation in respect of one liability. The procedure under the
Rules of Court is the same as that under the Code of Civil Procedure, except that
under the former the remedy of interpleader is available regardless of the nature of
the subject-matter of the controversy, whereas under the latter an interpleader suit
is proper only if the subject-matter of the controversy is personal property or relates
to the performance of an obligation.
There is no question that the subject matter of the present controversy is proper for
an interpleader suit. A stakeholder should use reasonable diligence to hale the
contending claimants to court. He need not await actual institution of independent
suits against him before filing a bill of interpleader. Otherwise, he may be barred by
laches or undue delay.
Has the Corporation in this case acted with diligence, in view of all the
circumstances, such that it may properly invoke the remedy of interpleader? We do
SHHH Digests Special Proceedings 2016-2017
not think so. It was aware of the conflicting claims of the appellees with respect to
the membership fee certificate 201 long before it filed the present interpleader suit.
It had been recognizing Tan as the lawful owner thereof. It was sued by Lee who also
claimed the same membership fee certificate. Yet it did not interplead Tan. It
preferred to proceed with the litigation (civil case 26044) and to defend itself
therein. As a matter of fact, final judgment was rendered against it and said
judgment has already been executed. It is not therefore too late for it to invoke the
remedy of interpleader.
It has been held that a stakeholder's action of interpleader is too late when filed
after judgment has been rendered against him in favor of one of the contending
claimants, especially where he had notice of the conflicting claims prior to the
rendition of the judgment and neglected the opportunity to implead the adverse
claimants in the suit where judgment was entered.
The Corporation has not shown any justifiable reason why it did not file an
application for interpleader in the civil case to compel the appellees herein to litigate
between themselves their conflicting claims of ownership.
To now permit the Corporation to bring Lee to court after the latter's successful
establishment of his rights in civil case 26044 to the membership fee certificate 201,
is to increase instead of to diminish the number of suits, which is one of the
purposes of an action of interpleader, with the possibility that the latter would lose
the benefits of the favorable judgment. .
Besides, a successful litigant cannot later be impleaded by his defeated adversary in
an interpleader suit and compelled to prove his claim anew against other adverse
claimants, as that would in effect be a collateral attack upon the judgment.
It is generally held by the cases it is the office of interpleader to protect a party, not
against double liability, but against double vexation on account of one liability.
In fine, the instant interpleader suit cannot prosper because the Corporation had
already been made independently liable in civil case 26044 and, therefore, its
present application for interpleader would in effect be a collateral attack upon the
final judgment in the said civil case; the appellee Lee had already established his
rights to membership fee certificate 201 in the aforesaid civil case and, therefore,
this interpleader suit would compel him to establish his rights anew, and thereby
increase instead of diminish litigations, which is one of the purposes of an
interpleader suit, with the possiblity that the benefits of the final judgment in the
De Leon. Tan. Udarbe
said civil case might eventually be taken away from him; and because the
Corporation allowed itself to be sued to final judgment in the said case, its action of
interpleader was filed inexcusably late, for which reason it is barred by laches or
unreasonable delay.
12. United Coconut Planters Bank v. IAC
GR. Nos. 72664-65
March 20, 1990
Doctrine: When the trial court granted petitioner's motion for withdrawal of its
complaint-in-interpleader, as having become moot and academic, the trial court in
effect held that petitioner Bank's recourse to interpleader was proper. Having done
so, the trial court could not have logically allowed Makati Bel-Air to recover on its
counterclaim for damages against petitioner Bank.
Facts: Petitioner United Coconut Planters Bank filed in the lower court a complaint-
in-interpleader against private respondent Makati Bel-Air Condominium Developers,
Inc. and against Altiura Investors, Inc.. The subject matter of the complaint was a
manager's check in the amount of P494,000.00 issued by petitioner Bank payable to
Makati Bel-Air, having been purchased by Altiura. Altiura delivered the check to
Makati Bel-Air as part payment on an office condominium unit in the Cacho-
Gonzales Building.
Petitioner Bank received from Altiura instructions to hold payment on the manager's
check, in view of a material discrepancy in the area of the office unit purchased by
Altiura which unit actually measured 124.58 square meters, instead of 165 square
meters as stipulated in the contract of sale. Petitioner Bank immediately requested
private respondent Makati Bel-Air, by a letter, to advise the Bank why it should not
issue the stop payment order requested by Altiura.
The next day petitioner Bank received a reply from Makati Bel-Air explaining the
latter's side of the controversy and at the same proposing a possible reduction of the
office unit's purchase price.
Bank received a letter from Altiura of even date requesting the Bank to hold
payment of its manager's check while Altiura was discussing Makati Bel-Air's
proposal for reduction of the purchase price and requesting the Bank to give both
parties 15 days within which to settle their differences. By a letter dated on the same
date, petitioner Bank requested Makati Bel-Air to hold in abeyance for a period not
exceeding 15days the presentation of the manager's check, so that both parties
could settle their differences amicably.
SHHH Digests Special Proceedings 2016-2017
Bank was advised in writing by Makati Bel-Air that the latter did not agree to the
request of the Bank set out in the latter's letter of 19 July 1979.
Thereupon, petitioner Bank filed a complaint-in-interpleader against Altiura and
Makati Bel-Air to require the latter to litigate with each other their respective claims
over the funds represented by the manager's check involved, and at the same time
asking the court for authority to deposit the funds in a special account until the
conflicting claims shall have been adjudicated. The trial court ordered the deposit of
the funds into a special account with any reputable banking institution subject to
further orders of the court.
Makati Bel-Air filed its answer and incorporated therein a counter-claim against
petitioner Bank and a cross-claim against Altiura. In turn, Altiura filed an answer with
motion to dismiss the crossclaim of Makati Bel-Air.
Meantime, Altiura had filed a complaint for rescission of the contract of sale of the
condominium unit, with damages, against Makati Bel-Air, which case was eventually
consolidated with the interpleader case.
Bank filed a "motion to withdraw complaint and motion to dismiss counter-claim",
stating that there was no longer any conflict between Makati Bel-Air and Altiura as to
who was entitled to the funds covered by the manager's check, since Makati Bel-Air
in its answer had alleged that it had cancelled and rescinded the sale of the
condominium unit and had relinquished any claim it had over the funds covered by
the manager's check.
Makati Bel-Air delivered to petitioner Bank the original of the manager's check. On
18 February 1980, the trial court issued an order directing the release of the funds
covered by the manager's check to Altiura.
Trial court issued an order resolving petitioner Bank's motion to withdraw complaint-
in-interpleader and to dismiss counter-claim, declaring that motion to withdraw the
complaint-in-interpleader had been rendered moot and academic by the court's
earlier order of 18 February 1980 directing petitioner Bank to release to Altiura the
P494,000.00 covered by the manager's check.
Makati Bel-Air moved for reconsideration without success then went to the
respondent appellate court on petition for certiorari.
In the instant Petition for Review on Certiorari, petitioner Bank argues that Makati
Bel-Air's counter-claim was compulsory in nature and had therefore been dissolved
De Leon. Tan. Udarbe
when the complaint-in-interpleader was withdrawn and dismissed. Makati Bel-Air
argues upon the other hand, that its counterclaim was not a compulsory one.
Makati Bel-Air's counterclaim in the interpleader proceedings was for damages in
the amount of P5,000,000.00, based upon the theory that petitioner Bank had
violated its guarantee embodied in its manager's check when it in effect stopped
payment of said check, allegedly causing damages to Makati Bel-Air the latter having
allegedly issued checks against said funds.
Issue: WON when a compulsory counterclaim had been dissolved the complaint-in-
interpleader will be withdrawn and dismissed
Held: A compulsory counterclaim is "one which arises out of or is necessarily
connected with the transaction or occurrence that is the subject matter of the
opposing party's claim." Interpleader is a proper remedy where a bank which had
issued a manager's check is subjected to opposing claims by persons who
respectively claim a right to the funds covered by the manager's check. The Bank is
entitled to take necessary precautions so that, as far possible, it does not make a
mistake as to who is entitled to payment; the necessary precautions include,
precisely, recourse to an interpleader suit.
In the instant case, petitioner Bank having been informed by both Altiura and Makati
Bel-Air of their respective positions in their controversy, and Makati Bel-Air having
refused the Bank's suggestion voluntarily to refrain for 15 days from presenting the
check for payment, petitioner Bank felt compelled to resort to the remedy of
interpleader. It will be seen that Makati Bel-Air's counter-claim arose out of or was
necessarily connected with the recourse of petitioner to this remedy of interpleader.
Makati-Bel Air was in effect claiming that petitioner Bank had in bad faith refused to
honor its undertaking to pay represented by the manager's check it had issued.
When the trial court granted petitioner's motion for withdrawal of its complaint-in-
interpleader, as having become moot and academic by reason of Makati Bel-Air's
having cancelled the sale of the office unit to Altiura and having returned the
manager's check to the Bank and acquiesced in the release of the funds to Altiura,
the trial court in effect held that petitioner Bank's recourse to interpleader was
proper and not a frivolous or malicious maneuver to evade its obligation to pay to
the party lawfully entitled the funds represented by the manager's check. Having
done so, the trial court could not have logically allowed Makati Bel-Air to recover on
its counterclaim for damages against petitioner Bank.
There are other considerations supporting the conclusion reached by this Court that
respondent appellate court had committed reversible error. Makati Bel-Air was a
party to the contract of sale of an office condominium unit to Altiura, for the
SHHH Digests Special Proceedings 2016-2017
payment of which the manager's check was issued. Accordingly, Makati Bel-Air was
fully aware, at the time it had received the manager's check, that there was, or had
arisen, at least partial failure of consideration since it was unable to comply with its
obligation to deliver office space amounting to 165 square meters to Altiura. Makati
Bel-Air was also aware that petitioner Bank had been informed by Altiura of the
claimed defect in Makati Bel-Air's title to the manager's check or its right to the
proceeds thereof. both Altiura and petitioner Bank, Makati Bel-Air was not a holder
in due course of the manager's check.
Rule 63. Declaratory relief and similar remedies
1. Malana et al v. Tappa et al
G.R. No.181303
September 17 2009
Doctrine: An action for declaratory relief should be filed by a person interested under
a deed, a will, a contract or other written instrument, and whose rights are affected
by a statute, an executive order, a regulation or an ordinance. The relief sought
under this remedy includes the interpretation and determination of the validity of
the written instrument and the judicial declaration of the parties rights or duties
thereunder.
Facts: Petitioners filed a complaint for Reivindicacion, Quieting of Title, and Damages
against respondents. Petitioners allege that they are the owners of a parcel of land
situated in Tuguegarao City, Cagayan which they inherited from Anastacio Danao
(Anastacio), who died intestate. During the lifetime of Anastacio, he had allowed
Consuelo Pauig (Consuelo), who was married to Joaquin Boncad, to build on and
occupy the southern portion of the subject property. Anastacio and Consuelo agreed
that the latter would vacate the said land at any time that Anastacio and his heirs
might need it.
Petitioners claimed that respondents, Consuelos family members, continued to
occupy the subject property even after her death, already building their residences
thereon using permanent materials. Petitioners also learned that respondents were
claiming ownership over the subject property. Averring that they already needed it,
petitioners demanded that respondents vacate the same. Respondents, however,
refused to heed petitioners demand.
According to petitioners, respondents documents were highly dubious, falsified, and
incapable of proving the latters claim of ownership over the subject property;
nevertheless, they created a cloud upon petitioners title to the property. Thus,
De Leon. Tan. Udarbe
petitioners were compelled to file before the RTC a Complaint to remove such cloud
from their title.
Before respondents could file their answer, the RTC issued an Order dated 4 May
2007 dismissing petitioners Complaint on the ground of lack of jurisdiction.
Petitioners filed a Motion for Reconsideration which was however denied.
Petitioners filed another pleading, simply designated as Motion, in which they
prayed that the RTC Orders dated 4 May 2007 and 30 May 2007, dismissing their
Complaint, be set aside. They reiterated their earlier argument that Section 1, Rule
63 of the Rules of Court states that an action to quiet title falls under the exclusive
jurisdiction of the RTC. The RTC issued an Order dated 31 October 2007 denying
petitioners Motion.
The RTC differentiated between the first and the second paragraphs of Section 1,
Rule 63 of the Rules of Court. The first paragraph refers to an action for declaratory
relief, which should be brought before the RTC. The second paragraph, however,
refers to a different set of remedies, which includes an action to quiet title to real
property. The second paragraph must be read in relation to Republic Act No. 7691,
which vests the MTC with jurisdiction over real actions, where the assessed value of
the real property involved does not exceed P50,000.00 in Metro Manila and
P20,000.00 in all other places.
Issue: WON the judge committed grave abuse of discretion in dismissin the
complaint
Held: An action for declaratory relief should be filed by a person interested under a
deed, a will, a contract or other written instrument, and whose rights are affected by
a statute, an executive order, a regulation or an ordinance. The relief sought under
this remedy includes the interpretation and determination of the validity of the
written instrument and the judicial declaration of the parties rights or duties
thereunder.
The RTC correctly made a distinction between the first and the second paragraphs of
Section 1, Rule 63 of the Rules of Court. The first paragraph of Section 1, Rule 63 of
the Rules of Court, describes the general circumstances in which a person may file a
petition for declaratory relief. As the afore-quoted provision states, a petition for
declaratory relief under the first paragraph of Section 1, Rule 63 may be brought
before the appropriate RTC. The second paragraph of Section 1, Rule 63 of the Rules
of Court specifically refers to (1) an action for the reformation of an instrument,
recognized under Articles 1359 to 1369 of the Civil Code; (2) an action to quiet title,
authorized by Articles 476 to 481 of the Civil Code; and (3) an action to consolidate
SHHH Digests Special Proceedings 2016-2017
ownership required by Article 1607 of the Civil Code in a sale with a right to
repurchase. These three remedies are considered similar to declaratory relief
because they also result in the adjudication of the legal rights of the litigants, often
without the need of execution to carry the judgment into effect.
To determine which court has jurisdiction over the actions identified in the second
paragraph of Section 1, Rule 63 of the Rules of Court, said provision must be read
together with those of the Judiciary Reorganization Act of 1980, as amended.
It is important to note that Section 1, Rule 63 of the Rules of Court does not
categorically require that an action to quiet title be filed before the RTC. It
repeatedly uses the word may that an action for quieting of title may be brought
under [the] Rule on petitions for declaratory relief, and a person desiring to file a
petition for declaratory relief may x x x bring an action in the appropriate Regional
Trial Court. The use of the word may in a statute denotes that the provision is merely
permissive and indicates a mere possibility, an opportunity or an option.
An action for declaratory relief presupposes that there has been no actual breach of
the instruments involved or of rights arising thereunder. Since the purpose of an
action for declaratory relief is to secure an authoritative statement of the rights and
obligations of the parties under a statute, deed, or contract for their guidance in the
enforcement thereof, or compliance therewith, and not to settle issues arising from
an alleged breach thereof, it may be entertained only before the breach or violation
of the statute, deed, or contract to which it refers. A petition for declaratory relief
gives a practical remedy for ending controversies that have not reached the state
where another relief is immediately available; and supplies the need for a form of
action that will set controversies at rest before they lead to a repudiation of
obligations, an invasion of rights, and a commission of wrongs.
2. VELARDE v. SOCIAL JUSTICE SOCIETY
G.R. No. 159357;
April 28, 2004
DOCTRINE: The failure of a complaint to state a cause of action is a ground for its
outright dismissal. However, in special civil actions for declaratory relief, the concept
of a cause of action under ordinary civil actions does not strictly apply. The reason
for this exception is that an action for declaratory relief presupposes that there has
been no actual breach of the instruments involved or of rights arising thereunder.
Nevertheless, a breach or violation should be impending, imminent or at least
threatened.
De Leon. Tan. Udarbe
FACTS: On January 28, 2003, SJS filed a Petition for Declaratory Relief before the
RTC-Manila against Velarde and his aforesaid co-respondents. SJS, a registered
political party, sought the interpretation of several constitutional provisions,
specifically on the separation of church and state; and a declaratory judgment on the
constitutionality of the acts of religious leaders endorsing a candidate for an elective
office, or urging or requiring the members of their flock to vote for a specified
candidate.
The subsequent proceedings were recounted in the challenged Decision in these
words:
" Bro. Eddie Villanueva submitted, within the original period [to file an Answer], a
Motion to Dismiss. Subsequently, Executive Minister Erao Manalo and Bro. Mike
Velarde, filed their Motions to Dismiss. While His Eminence Jaime Cardinal L. Sin,
filed a Comment and Bro. Eli Soriano, filed an Answer within the extended period
and similarly prayed for the dismissal of the Petition. All sought the dismissal of the
Petition on the common grounds that it does not state a cause of action and that
there is no justiciable controversy. They were ordered to submit a pleading by way of
advisement, which was closely followed by another Order denying all the Motions to
Dismiss. Bro. Mike Velarde, Bro. Eddie Villanueva and Executive Minister Erao
Manalo moved to reconsider the denial. His Eminence Jaime Cardinal L. Sin, asked
for extension to file memorandum. Only Bro. Eli Soriano complied with the first
Order by submitting his Memorandum.
" the Court denied the Motions to Dismiss, and the MRs filed by Bro. Mike Velarde,
Bro. Eddie Villanueva and Executive Minister Erao Manalo, which raised no new
arguments other than those already considered in the motions to dismiss."
TC said that it had jurisdiction over the Petition, because "in praying for a
determination as to whether the actions imputed to the respondents are violative of
Article II, Section 6 of the Fundamental Law, [the Petition] has raised only a question
of law." It then proceeded to a lengthy discussion of the issue raised in the Petition
the separation of church and state. Through its discourse, the court a quo opined at
some point that the "[e]ndorsement of specific candidates in an election to any
public office is a clear violation of the separation clause."
After its essay on the legal issue, however, the trial court failed to include a
dispositive portion in its assailed Decision. Thus, Velarde and Soriano filed separate
MRs which, were denied by the lower court.
SHHH Digests Special Proceedings 2016-2017 De Leon. Tan. Udarbe
This Court, in a Resolution , required SJS and the OSG to submit their respective The failure of a complaint to state a cause of action is a ground for its outright
comments. The Court gave the other parties -- impleaded as respondents in the dismissal. However, in special civil actions for declaratory relief, the concept of a
original case below --the opportunity to comment, if they so desired. On April 13, cause of action under ordinary civil actions does not strictly apply. The reason for
2004, the Court en banc conducted an Oral Argument. this exception is that an action for declaratory relief presupposes that there has
been no actual breach of the instruments involved or of rights arising thereunder.
ISSUE: Did the Petition for Declaratory Relief raise a justiciable controversy? Did it
Nevertheless, a breach or violation should be impending, imminent or at least
state a cause of action? Did respondent have any legal standing to file the Petition
threatened.
for Declaratory Relief?
A perusal of the Petition discloses no explicit allegation that the former had any legal
RULING: Section 1 of Rule 63 of the Rules of Court, provides in part: Who may file
right in its favor that it sought to protect. We can only infer the interest, from its
petition.- Any person interested under a deed, will, contract or other written
bare allegation that it "has thousands of members who are citizens-taxpayers-
instrument, whose rights are affected by a statute, executive order or regulation,
registered voters and who are keenly interested in a judicial clarification of the
ordinance, or any other governmental regulation may, before breach or violation
constitutionality of the partisan participation of religious leaders in Philippine politics
thereof, bring an action in the appropriate Regional Trial Court to determine any
and in the process to insure adherence to the Constitution by everyone. In any
question of construction or validity arising, and for a declaration of his rights or
event, even granting that it sufficiently asserted a legal right it sought to protect,
duties thereunder."
there was nevertheless no certainty that such right would be invaded by the said
The purpose of the remedy is to interpret or to determine the validity of the written respondents.
instrument and to seek a judicial declaration of the parties rights or duties
Legal standing or locus standi has been defined as a personal and substantial interest
thereunder. The essential requisites of the action are as follows: (1) there is a
in the case, such that the party has sustained or will sustain direct injury as a result
justiciable controversy; (2) the controversy is between persons whose interests are
of the challenged act. Interest means a material interest in issue that is affected by
adverse; (3) the party seeking the relief has a legal interest in the controversy; and
the questioned act or instrument, as distinguished from a mere incidental interest in
(4) the issue is ripe for judicial determination.
the question involved.
A justiciable controversy refers to an existing case or controversy that is appropriate
Petitioner alleges that "[i]n seeking declaratory relief as to the constitutionality of an
or ripe for judicial determination, not one that is conjectural or merely anticipatory.
act of a religious leader to endorse, or require the members of the religious flock to
The SJS Petition for Declaratory Relief fell short of this test. It miserably failed to
vote for a specific candidate, herein Respondent SJS has no legal interest in the
allege an existing controversy or dispute between the petitioner and the named
controversy";it has failed to establish how the resolution of the proffered question
respondents therein. Further, the Petition did not sufficiently state what specific
would benefit or injure it.
legal right of the petitioner was violated by the respondents therein; and what
particular act or acts of the latter were in breach of its rights, the law or the 3. Antonio Tambunting, Jr. v. Sps. Emilio Sumabat and Esperanza Baello
Constitution. GR. No. 144101
September 16, 2005
A cause of action is an act or an omission of one party in violation of the legal right or
rights of another, causing injury to the latter. Its essential elements are the following: Doctrine: An infraction of the mortgage terms had already taken place before the
(1) a right in favor of the plaintiff; (2) an obligation on the part of the named filing of Civil Case. Thus, the CFI lacked jurisdiction when it took cognizance of the
defendant to respect or not to violate such right; and (3) such defendants act or case. And in the absence of jurisdiction, its decision was void and without legal
effect.
omission that is violative of the right of the plaintiff or constituting a breach of the
obligation of the former to the latter.
SHHH Digests Special Proceedings 2016-2017
Facts: This case involves a dispute over a parcel of land situated in Caloocan City
which was previously registered in the names of respondents, spouses Emilio
Sumabat and Esperanza Baello. Respondents mortgaged it to petitioner Antonio
Tambunting, Jr. to secure the payment of a P7,727.95 loan. In August 1976,
respondents were informed that their indebtedness had ballooned to P15,000 for
their failure to pay the monthly amortizations.
In May 1977, because respondents defaulted in their obligation, petitioner
Commercial House of Finance, Inc. (CHFI), as assignee of the mortgage, initiated
foreclosure proceedings on the mortgaged property but the same did not push
through. It was restrained by CFI of Caloocan City in Civil Case, a complaint for
injunction filed by respondents against petitioners. However, the case was
subsequently dismissed for failure of the parties to appear at the hearing.
On March 16, 1979, respondents filed an action for declaratory relief with the CFI of
Caloocan City, seeking a declaration of the extent of their actual indebtedness.
Petitioners were declared in default for failure to file an answer within the
reglementary period. They moved for the dismissal of the action on the ground that
its subject, the mortgage deed, had already been breached prior to the filing of the
action. The motion was denied for having been filed out of time and petitioners had
already been declared in default.
On January 8, 1981, the CFI fixed respondents liability at P15,743.83 and authorized
them to consign the amount to the court for proper disposition. In compliance with
the decision, respondents consigned the required amount.
In March 1995, respondents received a notice of sheriffs sale indicating that the
mortgage had been foreclosed by CHFI on February 8, 1995 and that an extrajudicial
sale of the property would be held on March 27, 1995.
On March 27, 1995, respondents instituted a petition for preliminary injunction,
damages and cancellation of annotation of encumbrance with prayer for the
issuance of a temporary restraining order, with the RTC of Caloocan City. However,
the public auction scheduled on that same day proceeded and the property was sold
to CHFI as the highest bidder. Respondents failed to redeem the property during the
redemption period. Hence, title to the property was consolidated in favor of CHFI
and a new certificate of title (TCT No. 310191) was issued in its name. In view of
these developments, respondents amended their complaint to an action for
nullification of foreclosure, sheriffs sale and consolidation of title, reconveyance and
damages.
RTC ruled that the 1981 CFI decision in Civil Case No. C-7496 (fixing respondents
liability at P15,743.83 and authorizing consignation) had long attained finality. The
De Leon. Tan. Udarbe
mortgage was extinguished when respondents paid their indebtedness by consigning
the amount in court. Moreover, the ten-year period within which petitioners should
have foreclosed the property was already barred by prescription. They abused their
right to foreclose the property and exercised it in bad faith. As a consequence, the
trial court nullified the foreclosure and extrajudicial sale of the property, as well as
the consolidation of title in CHFIs name in 1995. It then ordered the register of deeds
of Caloocan City to cancel TCT No. 310191 and to reconvey the property to
respondents. It also held petitioners liable for moral damages, exemplary damages
and attorneys fees.
Petitioners moved for a reconsideration of the trial courts decision but it was denied.
Hence, this petition.
Petitioners claim that the trial court erred when it affirmed the validity of the
consignation. They insist that the CFI was barred from taking cognizance of the
action for declaratory relief since, petitioners being already in default in their loan
amortizations, there existed a violation of the mortgage deed even before the
institution of the action. Hence, the CFI could not have rendered a valid judgment in
Civil Case No. C-7496 and the consignation made pursuant to a void judgment was
likewise void. Respondents also fault the trial court for holding that their right to
foreclose the property had already prescribed.
Issue: WON CFI is barred from taking cognizance of declaratory relief since
petitioners being already in default in their loan amortizations
Held: Yes. An action for declaratory relief should be filed by a person interested
under a deed, will, contract or other written instrument, and whose rights are
affected by a statute, executive order, regulation or ordinance before breach or
violation thereof. The purpose of the action is to secure an authoritative statement
of the rights and obligations of the parties under a statute, deed, contract, etc. for
their guidance in its enforcement or compliance and not to settle issues arising from
its alleged breach.[2] It may be entertained only before the breach or violation of the
statute, deed, contract, etc. to which it refers.
Where the law or contract has already been contravened prior to the filing of an
action for declaratory relief, the court can no longer assume jurisdiction over the
action.[4] In other words, a court has no more jurisdiction over an action for
declaratory relief if its subject, i.e., the statute, deed, contract, etc., has already been
infringed or transgressed before the institution of the action. Under such
circumstances, inasmuch as a cause of action has already accrued in favor of one or
the other party, there is nothing more for the court to explain or clarify short of a
judgment or final order.
SHHH Digests Special Proceedings 2016-2017
Here, an infraction of the mortgage terms had already taken place before the filing
of Civil Case No. C-7496. Thus, the CFI lacked jurisdiction when it took cognizance of
the case in 1979. And in the absence of jurisdiction, its decision was void and without
legal effect.
Article 1142 of the Civil Code is clear. A mortgage action prescribes after ten years.
An action to enforce a right arising from a mortgage should be enforced within ten
years from the time the right of action accrues.[6] Otherwise, it will be barred by
prescription and the mortgage creditor will lose his rights under the mortgage.
Here, petitioners right of action accrued in May 1977 when respondents defaulted in
their obligation to pay their loan amortizations. It was from that time that the ten-
year period to enforce the right under the mortgage started to run. The period was
interrupted when respondents filed Civil Case No. C-6329 sometime after May 1977
and the CFI restrained the intended foreclosure of the property. However, the period
commenced to run again on November 9, 1977 when the case was dismissed.
The respondents institution of Civil Case No. C-7496 in the CFI on March 16, 1979 did
not interrupt the running of the ten-year prescriptive period because, as discussed
above, the court lacked jurisdiction over the action for declaratory relief. All
proceedings therein were without legal effect. Thus, petitioners could have enforced
their right under the mortgage, including its foreclosure, only until November 7,
1987, the tenth year from the dismissal of Civil Case No. C-6329. Thereafter, their
right to do so was already barred by prescription.
The foreclosure held on February 8, 1995 was therefore some seven years too late.
The same thing can be said about the public auction held on March 27, 1995, the
consolidation of title in CHFIs favor and the issuance of TCT No. 310191 in its name.
They were all void and did not exist in the eyes of the law.
4. Mangahas v. Paredes
G.R. No. 157866
February 14, 2007
Doctrine: This Courts original jurisdiction to issue writs of certiorari, prohibition,
mandamus, quo warranto, habeas corpus and injunction is not exclusive. It is shared
by this Court with the Regional Trial Courts and the Court of Appeals. Such
concurrence of jurisdiction does not give the petitioners unbridled freedom of
choice of court forum. A direct recourse of the Supreme Courts original jurisdiction
to issue these writs should be allowed only when there are special and important
reasons therefor, clearly and specifically set out in the petition.
De Leon. Tan. Udarbe
Facts: A declaratory Relief, Certiorari, Prohibition With Prayer For Provisional
Remedy filed by petitioners Augusto Mangahas and Marilou Verdejo seeks to nullify
and set aside the 14 February 2003 Order of the Regional Trial Court (RTC), Branch
124, Caloocan City, denying their Motion to Suspend Execution in Civil Case No. C-
19097. Private respondent Avelino Banaag filed a verified complaint of ejectment
against petitoners. Private respondent alleged that he is the registered owner of the
disputed property. Private respondent averred that petitioners constructed houses
on the property without his knowledge and consent and that several demands were
made, but the same fell on deaf ears as petitioners refused to vacate the premises.
This prompted private respondent to refer the matter to the Lupon Tagapayapa for
conciliation. The recourse proved futile since the parties were not able to settle
amicably. Private respondent then filed an ejectment suit before the MeTC.
On 23 April 1997, petitioners filed their answer denying having unlawfully deprived
private respondent possession of the contested property. On 10 July 1997,
petitioners filed a Manifestation And Motion To Suspend Proceedings on the ground
that the subject property is part of the Tala Estate and that the RTC of Quezon City,
Branch 85, in Civil Case No. Q-96-29810 issued a Writ of Preliminary Injunction dated
10 November 1997, enjoining the MeTCs of Quezon City and Caloocan Cityfrom
ordering the eviction and demolition of all occupants of the Tala Estate. They
posited that the injunction issued by the Quezon City RTC is enforceable in Caloocan
Citybecause both cities are situated within the National Capital Region. In an order
dated 7 August 1997, the MeTC denied said manifestation and motion.
For failure of the parties to arrive at a compromise agreement during the preliminary
conference, they were required to submit their respective position papers containing
their positions on the following issues: (a) whether or not the torrens title of private
respondent is a valid basis of his right to eject petitioners, (b) whether the MeTC has
jurisdiction to hear and decide the case, and (c) whether either the private
respondent or petitioners are entitled to their respective claims for damages.
In a decision dated 5 October 1999, the MeTC ruled for private respondent. On 2
December 1999, petitioners appealed to the RTC, which case was docketed as Civil
Case No. C-19097. In a Decision dated 16 November 2000, the trial court affirmed in
toto the MeTC decision.
On 18 December 2000, petitioners filed a motion for reconsideration which the RTC
denied. Court of Appeals affirmed the ruling of the RTC. Petitioners Motion for
Reconsideration was, likewise, denied in a Resolution dated 20 November 2002.
Issue: WON the petition for Declaratory Relief was filed with the proper court
SHHH Digests Special Proceedings 2016-2017
Held: At the outset it must be pointed out that petitioners direct recourse to this
Court via petition for Declaratory Relief, Certiorari, Prohibition With Prayer For
Provisional Remedy is an utter disregard of the hierarchy of courts and should have
been dismissed outright. This Courts original jurisdiction to issue writs of certiorari,
prohibition, mandamus, quo warranto, habeas corpus and injunction is not exclusive.
It is shared by this Court with the Regional Trial Courts and the Court of Appeals.
Such concurrence of jurisdiction does not give the petitioners unbridled freedom of
choice of court forum. A direct recourse of the Supreme Courts original jurisdiction
to issue these writs should be allowed only when there are special and important
reasons therefor, clearly and specifically set out in the petition.
In the instant case, petitioners have not offered any exceptional or compelling
reason not to observe the hierarchy of courts. Hence, the petition should have been
filed with the Regional Trial Court.
Equally noteworthy is petitioners resort to this Court through petition for declaratory
relief. This action is not among the petitions within the original jurisdiction of the
Supreme Court. Rule 63 of the Rules of Court which deals with actions for
declaratory relief, enumerates the subject matter thereof, i.e., deed, will, contract or
other written instrument, the construction or validity of statute or ordinance.
Inasmuch as this enumeration is exclusive, petitioners action to declare the RTC
order denying their motion to suspend execution, not being one of those
enumerated, should warrant the outright dismissal of this case.
At any rate, since the complete records of this case have already been elevated, this
Court deems it wise to resolve the controversy on the merits. It must be
remembered that the issue on the enforceability of the injunction order originating
from the Quezon City RTC had already been litigated and finally decided when the
Court of Appeals in CA-G.R. SP No. 65076 affirmed the Decision of the RTC in Civil
Case No. C-19097.
Consequently, the issue involving the binding effect of the injunction issued by the
Quezon City RTC became the law of the case between the parties. Under this legal
principle, whatever is irrevocably established as the controlling legal rule or decision
between the parties in the same case continues to be the law of the case, so long as
the facts on which the decision was predicated continue. Stated otherwise, the
doctrine holds that once an appellate court has declared the law in a case that
declaration continues to hold even in subsequent appeal. The reason lies in the fact
that public policy dictates that litigations must be terminated at some definite time
and that the prevailing party should not be denied the fruits of his victory by some
subterfuge devised by the losing party.
De Leon. Tan. Udarbe
Petitioners are therefore barred from assailing the ruling that the injunction issued
by the Quezon City RTC has no binding effect to the courts of Caloocan City as this
issue had already been passed upon with finality. It must be stressed that once a
decision becomes final and executory, it is the ministerial duty of the presiding judge
to issue a writ of execution except in certain cases, as when subsequent events
would render execution of judgment unjust.
5. CITY OF LAPU-LAPU v. PHILIPPINE ECONOMIC ZONE AUTHORITY
G.R. No. 184203; G.R. No. 187583;
November 26, 2014
DOCTRINE: A special civil action for declaratory relief is filed for a judicial
determination of any question of construction or validity arising from, and for a
declaration of rights and duties, under any of the following subject matters: a deed,
will, contract or other written instrument, statute, executive order or regulation,
ordinance, orany other governmental regulation. However, a declaratory judgment
may issue only if there has been "no breach of the documents in question." If the
contract or statute subject matter of the action has already been breached, the
appropriate ordinary civil action must be filed. If adequate relief is available through
another form of action or proceeding, the other action must be preferred over an
action for declaratory relief.
FACTS: President Marcos issued PD No. 66 in 1972, declaring as government policy
the establishment of export processing zones in strategic locations in the Philippines.
To carry out this policy, the Export Processing Zone Authority (EPZA) was created to
operate, administer, and manage the export processing zones established in the Port
of Mariveles, Bataan and such other export processing zones that may be created by
virtue of the decree.
The decree declared the EPZA non-profit in character with all its revenues devoted
to its development, improvement, and maintenance. To maintain this non-profit
character, the EPZA was declared exempt from all taxes that may be due to the
Republic of the Philippines, its provinces, cities, municipalities, and other
government agencies and instrumentalities.
In 1979, President Marcos issued Proclamation No. 1811, establishing the Mactan
Export Processing Zone. In 1995, the PEZA was created by virtue of Republic Act No.
7916 or "the Special Economic Zone Act of 1995" to operate, administer, manage,
and develop economic zones in the country. By virtue of the law, the export
SHHH Digests Special Proceedings 2016-2017
processing zone in Mariveles, Bataan became the Bataan Economic Zone and the
Mactan Export Processing Zone the Mactan Economic Zone.
President Fidel V. Ramos issued Executive Order No. 282, directing the PEZA to
assume and exercise all of the EPZAs powers, functions, and responsibilities. All of
EPZAs properties, equipment, and assets, among others, were ordered transferred
to the PEZA.
Facts of G.R. No. 184203
In the letter, the City of Lapu-Lapu, through the Office of the Treasurer, demanded
from the PEZA 32,912,350.08 in real property taxes for the period from 1992 to
1998.
The City reiterated its demand in another letter. It cited Sections 193 and 234 of the
Local Government Code of 1991 that withdrew the real property tax exemptions
previously granted to or presently enjoyed by all persons. The City pointed out that
no provision in the Special Economic Zone Act of 1995 specifically exempted the
PEZA from payment of real property taxes, unlike Section 21 of Presidential Decree
No. 66 that explicitly provided for EPZAs exemption. Since no legal provision
explicitly exempted the PEZA from payment of real property taxes, the City argued
that it can tax the PEZA.
In its last reminder, the City assessed the PEZA 86,843,503.48 as real property taxes
for the period from 1992 to 2002.
On September 11, 2002, the PEZA filed a petition for declaratory Relief with the RTC
of Pasay City, praying that the it be declared exempt from payment of real property
taxes. The City answered the petition, maintaining that the PEZA is liable for real
property taxes. To support its argument, the City cited a legal opinion issued by the
Department of Justice, which stated that the PEZA is not exempt from payment of
real property taxes. A reply was filed by the PEZA to which the City filed a rejoinder.
Pursuant to Rule 63, Section 3 of Rules of Court, the Office of the Solicitor General
filed a comment. It agreed that the PEZA is exempt from payment of real property
taxes, citing Sections 24 and 51 of the Special Economic Zone Act of 1995.
The trial court agreed with the Solicitor General.
SEC. 24. Exemption from National and Local Taxes. Except for real property taxes
on land owned by developers, no taxes, local and national, shall be imposed on
De Leon. Tan. Udarbe
business establishments operating within the ECOZONE. In lieu thereof, five percent
(5%) of the gross income earned by all business enterprises within the ECOZONE
shall be paid and remitted as follows: a. Three percent (3%) to the National
Government; b. Two percent (2%) which shall be directly remitted by the business
establishments to the treasurers office of the municipality or city where the
enterprise is located.
SEC. 51. Ipso-Facto Clause. All privileges, benefits, advantages or exemptions
granted to special economic zones under Republic Act No. 7227, shall ipso-facto be
accorded to special economic zones already created or to be created under this Act.
The free port status shall not be vested upon new special economic zones.
According to the trial court, the PEZA remained tax-exempt regardless of Section 24
of the Special Economic Zone Act of 1995. It ruled that Section 24, which taxes real
property owned by developers of economic zones, only applies to private developers
of economic zones, not to public developers like the PEZA. The PEZA, therefore, is
not liable for real property taxes on the land it owns.
Characterizing the PEZA as an agency of the National Government, the trial court
ruled that the City had no authority to tax the PEZA under Sections 133(o) and 234(a)
of the Local Government Code of 1991.
The trial court granted the PEZAs petition for declaratory relief and declared it
exempt from payment of real property taxes. The City filed a MR which the trial
court denied. The City then appealed to the CA.
The issues presented by the City, according to the Court of Appeals, are pure
questions of law which should have been raised in a petition for review on certiorari
directly filed before this court. Since the City availed itself of the wrong mode of
appeal, CA dismissed the Citys appeal.
The City filed a motion for extension of time to file a MR which the CA
denied.Despite the denial of its motion for extension, the City filed MR which the CA
denied that motion.
The City insists that the trial court had no jurisdiction to hear the PEZAs petition for
declaratory relief. According to the City, the case involves real property located in
the City of Lapu-Lapu. The petition for declaratory relief should have been filed
before the Regional Trial Court of the City of Lapu-Lapu.
SHHH Digests Special Proceedings 2016-2017
Moreover, the Province of Bataan, the City of Baguio, and the Province of Cavite
allegedly demanded real property taxes from the PEZA. The City argues that the
PEZA should have likewise impleaded these local government units as respondents in
its petition for declaratory relief. For its failure to do so, the PEZA violated Rule 63,
Section 2 of the Rules of Court, and the trial court should have dismissed the
petition.
PEZA argues that the CAs decision had become final and executory. On the merits,
the PEZA argues that it is an agency and instrumentality of the National Government.
It is therefore exempt from payment of real property taxes under Sections 133(o)
and 234(a) of the Local Government Code.
As to the jurisdiction issue, the PEZA counters that the Regional Trial Court of Pasay
had jurisdiction to hear its petition for declaratory relief under Rule 63, Section 1 of
the Rules of Court.[53]] It also argued that it need not implead the Province of
Bataan, the City of Baguio, and the Province of Cavite as respondents considering
that their demands came after the PEZA had already filed the petition in court.
Facts of G.R. No. 187583
After the City of Lapu-Lapu had demanded payment of real property taxes from the
PEZA, the Province of Bataan followed suit. The Province claimed that the PEZA is
liable for real property taxes under Section 24 of the Special Economic Zone Act of
1995.
In its reply letter, the PEZA requested the Province to suspend the service of the real
property tax billing. It cited its petition for declaratory relief against the City of Lapu-
Lapu pending before the RTC Pasay City as basis.
The Province argued that serving a real property tax billing on the PEZA "would not
in any way affect [its] petition for declaratory relief. Thus, in its letter, the Province
notified the PEZA of its real property tax liabilities for June 1, 1995 to December 31,
2002 totalling P110,549,032.55.
PEZA again requested the Province to suspend collecting its alleged real property tax
liabilities until the Regional Trial Court of Pasay Cityresolves its petition for
declaratory relief. The Province ignored the PEZAs request. The Province served on
the PEZA a statement of unpaid real property tax for the period from June 1995 to
December 2004.
De Leon. Tan. Udarbe
The PEZA again requested the Province to suspend collecting its alleged real
property taxes. The Province denied the request, then servedon the PEZA a warrant
of levy covering the PEZAs real properties.
The Province finally sent the PEZA a notice of public auction of the latters properties
in Mariveles, Bataan.
PEZA filed a petition for injunction with prayer for issuance of TRO and/or writ of
preliminary injunction before the RTC Pasay City, arguing that it is exempt from
payment of real property taxes. It added that the notice of sale issued by the
Province was void because it was not published in a newspaper of general circulation
as required by Section 260 of the Local Government Code.
In its order, the trial court issued a TRO against the Province. After the PEZA had filed
a P100,000.00 bond, the trial court issued a writ of preliminary injunction.
In the order, the trial court denied the PEZAs petition for injunction. The trial court
ruled that the PEZA is not exempt from payment of real property taxes. According to
the trial court, Sections 193 and 234 of the Local Government Code had withdrawn
the real property tax exemptions previously granted to all persons, whether natural
or juridical. As to the tax exemptions under Section 51 of the Special Economic Zone
Act of 1995, the trial court ruled that the provision only applies to businesses
operating within the economic zones, not to the PEZA.
The PEZA filed before the Court of Appeals a petition for certiorari with prayer for
issuance of a temporary restraining order.The CA issued a TRO, enjoining the
Province and its Provincial Treasurer from selling PEZA's properties at public auction.
The PEZA then filed a supplemental petition for certiorari, prohibition, and
mandamus against the Province, arguing that the Provincial Treasurer of Bataan
acted with grave abuse of discretion in issuing the notice of delinquency and notice
of sale. The PEZA also filed a motion for issuance of an order affirming the TRO and a
writ of preliminary injunction to enjoin the Province from consolidating title over the
PEZAs properties.
In its resolution, the CA admitted the supplemental petition for certiorari,
prohibition, and mandamus.
The Province then filed a motion for leave to admit attached rejoinder with motion
to dismiss. In the rejoinder with motion to dismiss, the Province argued for the first
SHHH Digests Special Proceedings 2016-2017
time that the Court of Appeals had no jurisdiction over the subject matter of the
action.
According to the Province, the PEZA erred in filing a petition for certiorari. Arguing
that the PEZA sought to reverse a RTC decision in a local tax case, the Province
claimed that the court with appellate jurisdiction over the action is the CTA. The
PEZA then prayed that the Court of Appeals dismiss the petition for certiorari for lack
of jurisdiction over the subject matter of the action.
CA ruled that the trial court judge gravely abused his discretion in dismissing the
PEZAs petition for prohibition. It held that Section 21 of Presidential Decree No. 66
and Section 51 of the Special Economic Zone Act of 1995 granted the PEZA
exemption from payment of real property taxes.
In the decision, the Court of Appeals granted the PEZAs petition for certiorari. It set
aside the trial courts decision and nullified all the Provinces proceedings with
respect to the collection of real property taxes from the PEZA.
The Province filed a motion for reconsideration, which the Court of Appeals denied.
In its petition for review on certiorari with this court, the Province of Bataan insists
that the Court of Appeals had no jurisdiction to take cognizance of the PEZAs
petition for certiorari. The Province maintains that the Court of Tax Appeals had
jurisdiction to hear the PEZAs petition since it involved a local tax case decided by a
Regional Trial Court. The Province reiterates that the PEZA is not exempt from
payment of real property taxes.
With respect to Sections 24 and 51 of the Special Economic Zone Act of 1995
granting tax exemptions and benefits, the Province argues that these provisions only
apply to business establishments operating within special economic zones, not to the
PEZA.
ISSUE: Whether the Regional Trial Court, Branch 111, Pasay City had jurisdiction to
hear, try, and decide the City of Lapu-Lapus petition for declaratory relief.
RULING: Section 1 of Rule 63 provides: SECTION 1. Who may file petition. Any
person interested under a deed, will, contract or other written instrument, or whose
rights are affected by a statute, executive order or regulation, ordinance, or any
other governmental regulation may, before breach or violation, thereof, bring an
action in the appropriate Regional Trial Court to determine any question of
De Leon. Tan. Udarbe
construction or validity arising, and for a declaration of his rights or duties,
thereunder.
An action for reformation of an instrument, to quiet title to real property or remove
clouds therefrom, or to consolidate ownership under Article 1607 of the Civil Code,
may be brought under this Rule.
The court with jurisdiction over petitions for declaratory relief is the RTC, the subject
matter of litigation in an action for declaratory relief being incapable of pecuniary
estimation.
A special civil action for declaratory relief is filed for a judicial determination of any
question of construction or validity arising from, and for a declaration of rights and
duties, under any of the following subject matters: a deed, will, contract or other
written instrument, statute, executive order or regulation, ordinance, orany other
governmental regulation. However, a declaratory judgment may issue only if there
has been "no breach of the documents in question." If the contract or statute subject
matter of the action has already been breached, the appropriate ordinary civil action
must be filed. If adequate relief is available through another form of action or
proceeding, the other action must be preferred over an action for declaratory relief.
It is also required that the parties to the action for declaratory relief be those whose
rights or interests are affected by the contract or statute in question. "There must be
an actual justiciable controversy or the ripening seeds of one"between the parties.
In sum, a petition for declaratory relief must satisfy six requisites:
[F]irst, the subject matter of the controversy must be a deed, will, contract or other
written instrument, statute, executive order or regulation, or ordinance; second, the
terms of said documents and the validity thereof are doubtful and require judicial
construction; third, there must have been no breach of the documents in question;
fourth, there must be an actual justiciable controversy or the "ripening seeds" of one
between persons whose interests are adverse; fifth, the issue must be ripe for
judicial determination; and sixth, adequate relief is not available through other
means or other forms of action or proceeding.
We rule that the PEZA erred in availing itself of a petition for declaratory relief
against the City. The City had already issued demand letters and real property tax
assessment against the PEZA, in violation of the PEZAs alleged tax-exempt status
under its charter. The Special Economic Zone Act of 1995, the subject matter of
SHHH Digests Special Proceedings 2016-2017
PEZAs petition for declaratory relief, had already been breached. The trial court,
therefore, had no jurisdiction over the petition for declaratory relief.
In the present case, the Regional Trial Court had no jurisdiction over the subject
matter of the action, specifically, over the remedy sought. The trial court should
have dismissed the PEZAs petition for declaratory relief for lack of jurisdiction.
Once an assessment has already been issued by the assessor, the proper remedy of a
taxpayer depends on whether the assessment was erroneous or illegal.
Instead of a petition for declaratory relief, the PEZA should have directly resorted to
a judicial action. The PEZA should have filed a complaint for injunction, the
"appropriate ordinary civil action"to enjoin the City from enforcing its demand and
collecting the assessed taxes from the PEZA. After all, a declaratory judgment as to
the PEZAs tax-exempt status is useless unless the City isenjoined from enforcing its
demand.
Injunction "is a judicial writ, process or proceeding whereby a party is ordered to do
or refrain from doing a certain act." "It may be the main action or merely a
provisional remedy for and as incident in the main action." The essential requisites of
a writ of injunction are: "(1) there must be a right in esseor the existence of a right to
be protected; and (2) the act against which the injunction is directed to constitute a
violation of such right."
We note, however, that the City confused the concepts of jurisdiction and venue in
contending that the Regional Trial Court of Pasay had no jurisdiction because the real
properties involved in this case are located in the City of Lapu-Lapu.
On the one hand, jurisdiction is "the power to hear and determine cases of the
general class to which the proceedings in question belong." Jurisdiction is a matter of
substantive law. Thus, an action may be filed only with the court or tribunal where
the Constitution or a statute says it can be brought. Objections to jurisdiction cannot
be waived and may be brought at any stage of the proceedings, even on appeal.
When a case is filed with a court which has no jurisdiction over the action, the court
shall motu proprio dismiss the case.
On the other hand, venue is "the place of trial or geographical location in which an
action or proceeding should be brought." 175 In civil cases, venue is a matter of
procedural law. A partys objections to venue must be brought at the earliest
opportunity either in a motion to dismiss or in the answer; otherwise the objection
De Leon. Tan. Udarbe
shall be deemed waived. When the venue of a civil action is improperly laid, the
court cannot motu proprio dismiss the case.
The venue of an action depends on whether the action is a real or personal action.
Should the action affect title to or possession of real property, or interest therein, it
is a real action. The action should be filed in the proper court which has jurisdiction
over the area wherein the real property involved, or a portion thereof, is situated. If
the action is a personal action, the action shall be filed with the proper court where
the plaintiff or any of the principal plaintiffs resides, or where the defendant or any
of the principal defendants resides, or in the case of a non-resident defendant where
he may be found, at the election of the plaintiff.
Objections to venue must be raised at the earliest possible opportunity. The City did
not file a motion to dismiss the petition on the ground that the venue was
improperly laid. Neither did the City raise this objection in its answer. In any event,
the law sought to be judicially interpreted in this case had already been breached.
The Regional Trial Court of Pasay, therefore, had no jurisdiction over the PEZAs
petition for declaratory relief against the City.
6. CJH Development Corporation v. BIR and Bureau of Customs
GR. No. 172457
December 24, 2008
Doctrine: A petition for declaratory relief cannot properly have a court decision as its
subject matter. A court decision cannot be interpreted as included within the
purview of the words other written instrument, as contended by appellant, for the
simple reason that the Rules of Court already provide[s] for the ways by which an
ambiguous or doubtful decision may be corrected or clarified without need of
resorting to the expedient prescribed by Rule 66 [now Rule 64].
Facts: Proclamation No. 420 was issued by then President Fidel Ramos to create a
Special Economic Zone in a portion of Camp John Hay in Baguio City. Section 3 of the
Proclamation granted to the newly created SEZ the same incentives then already
enjoyed by the Subic SEZ. Among these incentives are the exemption from the
payment of taxes, both local and national, for businesses located inside the SEZ, and
the operation of the SEZ as a special customs territory providing for tax and duty free
importations of raw materials, capital and equipment.
BIR issued Revenue Regulations No. 12-97 while the Bureau of Customs (BOC) issued
Customs Administrative Order No. 2-98. The two issuances provided the rules and
regulations to be implemented within the Camp John Hay SEZ. Subsequently,
SHHH Digests Special Proceedings 2016-2017
however, Section 3 of the Proclamation was declared unconstitutional in part by the
Court en banc in John Hay Peoples Alternative Coalition v. Lim.
The decision attained finality when the Court en banc denied the motion for
reconsideration through a resolution. While the motion for reconsideration was
pending with the Court, on 16 January 2004 the Office of the City Treasurer
of Baguio sent a demand letter which stated that updated statements of real
property taxes due on real estate properties declared under the names of the Bases
Conversion and Development Authority and Camp John Hay Development
Corporation totaling P101,935,634.17 inclusive of penalties, as of January 10, 2004.
On 26 May 2005, the BOC followed suit and demanded of CJH the payment
of P71,983,753.00 representing the duties and taxes due on all the importations
made by CJH from 1998 to 2004. For its part, the BIR sent a letter dated 23 May
2005 to CJH wherein it treated CJH as an ordinary corporation subject to the regular
corporate income tax as well as to the Value Added Tax of 1997.
CJH questioned the retroactive application by the BOC of the decision of this Court in
G.R. No. 119775. It claimed that the assessment was null and void because it violated
the non-retroactive principle under the Tariff and Customs Code.
The Office of the Solicitor General (OSG) filed a motion to dismiss. The OSG claimed
that the remedy of declaratory relief is inapplicable because an assessment is not a
proper subject of such petition. It further alleged that there are administrative
remedies which were available to CJH.
RTC held that the decision in G.R. No. 119775 applies retroactively because the tax
exemption granted by Proclamation No. 420 is null and void from the beginning. The
RTC also ruled that the petition for declaratory relief is not the appropriate remedy.
A judgment of the court cannot be the proper subject of a petition for declaratory
relief; the enumeration in Rule 64 is exclusive. Moreover, the RTC held that
Commonwealth Act No. 55 (CA No. 55) which proscribes the use of declaratory relief
in cases where a taxpayer questions his tax liability is still in force and effect.
CJH filed a motion for reconsideration but the RTC denied it. Hence this petition,
which, as earlier stated, was filed directly to this Court, raising as it does only pure
questions of law.
Issue: WON declaratory relief is proper
Held: No. The requisites for a petition for declaratory relief to prosper are: (1) there
must be a justiciable controversy; (2) the controversy must be between persons
whose interests are adverse; (3) the party seeking declaratory relief must have a
De Leon. Tan. Udarbe
legal interest in the controversy; and (4) the issue involved must be ripe for judicial
determination.
The proper subject matter of a declaratory relief is a deed, will, contract, or other
written instrument, or the construction or validity of statute or ordinance. CJH
hinges its petition on the demand letter or assessment sent to it by the BOC.
However, it is really not the demand letter which is the subject matter of the
petition.
Ultimately, this Court is asked to determine whether the decision of the Court en
banc in G.R. No. 119775 has a retroactive effect. This approach cannot be
countenanced. A petition for declaratory relief cannot properly have a court decision
as its subject matter. In Tanda v. Aldaya, we ruled that:
x x x [A] court decision cannot be interpreted as included within the
purview of the words other written instrument, as contended by
appellant, for the simple reason that the Rules of Court already
provide[s] for the ways by which an ambiguous or doubtful decision
may be corrected or clarified without need of resorting to the
expedient prescribed by Rule 66 [now Rule 64].
There are other remedies available to a party who is not agreeable to a decision
whether it be a question of law or fact. If it involves a decision of an appellate court,
the party may file a motion for reconsideration or new trial in order that the defect
may be corrected. In case of ambiguity of the decision, a party may file a motion for
a clarificatory judgment. One of the requisites of a declaratory relief is that the issue
must be ripe for judicial determination. This means that litigation is inevitable or
there is no adequate relief available in any other form or proceeding.
However, CJH is not left without recourse. The Tariff and Customs Code (TCC)
provides for the administrative and judicial remedies available to a taxpayer who is
minded to contest an assessment, subject of course to certain reglementary periods.
The TCC provides that a protest can be raised provided that payment first be made
of the amount due.[30] The decision of the Collector can be reviewed by the
Commissioner of Customs who can approve, modify or reverse the decision or action
of the Collector.[31] If the party is not satisfied with the ruling of the Commissioner,
he may file the necessary appeal to the Court of Tax Appeals. Afterwards, the
decision of the Court of Tax Appeals can be appealed to this Court.
With the foregoing disquisition on the first issue, there is no need to delve into the
second issue at this juncture.
SHHH Digests Special Proceedings 2016-2017
7. Velarde v. Social Justice Society
G.R. No. 159357
April 28, 2004
Doctrine: The essential requisites of the action are as follows: (1) there is a justiciable
controversy; (2) the controversy is between persons whose interests are adverse; (3)
the party seeking the relief has a legal interest in the controversy; and (4) the issue is
ripe for judicial determination
Fatcs: On January 28, 2003, SJS filed a Petition for Declaratory Relief (SJS Petition)
before the RTC-Manila against Velarde and his aforesaid co-respondents. SJS, a
registered political party, sought the interpretation of several constitutional
provisions, specifically on the separation of church and state; and a declaratory
judgment on the constitutionality of the acts of religious leaders endorsing a
candidate for an elective office, or urging or requiring the members of their flock to
vote for a specified candidate.
The subsequent proceedings were recounted in the challenged Decision in these
words:
Bro. Eddie Villanueva submitted, within the original period [to file an Answer], a
Motion to Dismiss. Subsequently, Executive Minister Erao Manalo and Bro. Mike
Velarde, filed their Motions to Dismiss. While His Eminence Jaime Cardinal L. Sin,
filed a Comment and Bro. Eli Soriano, filed an Answer within the extended period
and similarly prayed for the dismissal of the Petition. All sought the dismissal of the
Petition on the common grounds that it does not state a cause of action and that
there is no justiciable controversy. They were ordered to submit a pleading by way of
advisement, which was closely followed by another Order denying all the Motions to
Dismiss. Bro. Mike Velarde, Bro. Eddie Villanueva and Executive Minister Erao
Manalo moved to reconsider the denial. His Eminence Jaime Cardinal L. Sin, asked
for extension to file memorandum. Only Bro. Eli Soriano complied with the first
Order by submitting his Memorandum. the Court denied the Motions to Dismiss, and
the Motions for Reconsideration filed by Bro. Mike Velarde, Bro. Eddie Villanueva
and Executive Minister Erao Manalo, which raised no new arguments other than
those already considered in the motions to dismiss.
After narrating the above incidents, the trial court said that it had jurisdiction over
the Petition, because in praying for a determination as to whether the actions
imputed to the respondents are violative of Article II, Section 6 of the Fundamental
Law, [the Petition] has raised only a question of law. It then proceeded to a lengthy
discussion of the issue raised in the Petition the separation of church and state even
tracing, to some extent, the historical background of the principle. Through its
De Leon. Tan. Udarbe
discourse, the court a quo opined at some point that the [e]ndorsement of specific
candidates in an election to any public office is a clear violation of the separation
clause.
After its essay on the legal issue, however, the trial court failed to include a
dispositive portion in its assailed Decision. Thus, Velarde and Soriano filed separate
Motions for Reconsideration which, as mentioned earlier, were denied by the lower
court.
Issue: Did the Petition for Declaratory Relief raise a justiciable controversy? Did it
state a cause of action? Did respondent have any legal standing to file the Petition
for Declaratory Relief?
Held: An action for declaratory relief should be filed by a person interested under a
deed, a will, a contract or other written instrument, and whose rights are affected by
a statute, an executive order, a regulation or an ordinance. The purpose of the
remedy is to interpret or to determine the validity of the written instrument and to
seek a judicial declaration of the parties rights or duties thereunder. The essential
requisites of the action are as follows: (1) there is a justiciable controversy; (2) the
controversy is between persons whose interests are adverse; (3) the party seeking
the relief has a legal interest in the controversy; and (4) the issue is ripe for judicial
determination
A justiciable controversy refers to an existing case or controversy that is appropriate
or ripe for judicial determination, not one that is conjectural or merely
anticipatory.[18] The SJS Petition for Declaratory Relief fell short of this test. It
miserably failed to allege an existing controversy or dispute between the petitioner
and the named respondents therein. Further, the Petition did not sufficiently state
what specific legal right of the petitioner was violated by the respondents therein;
and what particular act or acts of the latter were in breach of its rights, the law or
the Constitution
An initiatory complaint or petition filed with the trial court should contain a plain,
concise and direct statement of the ultimate facts on which the party pleading relies
for his claim x x x.[20] Yet, the SJS Petition stated no ultimate facts.
Indeed, SJS merely speculated or anticipated without factual moorings that, as
religious leaders, the petitioner and his co-respondents below had endorsed or
threatened to endorse a candidate or candidates for elective offices; and that such
actual or threatened endorsement will enable [them] to elect men to public office
who [would] in turn be forever beholden to their leaders, enabling them to control
the government[;][21] and pos[ing] a clear and present danger of serious erosion of
SHHH Digests Special Proceedings 2016-2017
the peoples faith in the electoral process[;] and reinforc[ing] their belief that
religious leaders determine the ultimate result of elections,[22] which would then be
violative of the separation clause.
Such premise is highly speculative and merely theoretical, to say the least. Clearly, it
does not suffice to constitute a justiciable controversy. The Petition does not even
allege any indication or manifest intent on the part of any of the respondents below
to champion an electoral candidate, or to urge their so-called flock to vote for, or not
to vote for, a particular candidate. It is a time-honored rule that sheer speculation
does not give rise to an actionable right.
A cause of action is an act or an omission of one party in violation of the legal right or
rights of another, causing injury to the latter.[28] Its essential elements are the
following: (1) a right in favor of the plaintiff; (2) an obligation on the part of the
named defendant to respect or not to violate such right; and (3) such defendants act
or omission that is violative of the right of the plaintiff or constituting a breach of the
obligation of the former to the latter.[29]
The failure of a complaint to state a cause of action is a ground for its outright
dismissal.[30] However, in special civil actions for declaratory relief, the concept of a
cause of action under ordinary civil actions does not strictly apply. The reason for
this exception is that an action for declaratory relief presupposes that there has
been no actual breach of the instruments involved or of rights arising thereunder.[31]
Nevertheless, a breach or violation should be impending, imminent or at least
threatened.
The Court finds in the Petition for Declaratory Relief no single allegation of fact upon
which SJS could base a right of relief from the named respondents. In any event,
even granting that it sufficiently asserted a legal right it sought to protect, there was
nevertheless no certainty that such right would be invaded by the said respondents.
Not even the alleged proximity of the elections to the time the Petition was filed
below (January 28, 2003) would have provided the certainty that it had a legal right
that would be jeopardized or violated by any of those respondents.
Legal standing or locus standi has been defined as a personal and substantial interest
in the case, such that the party has sustained or will sustain direct injury as a result
of the challenged act. Interest means a material interest in issue that is affected by
the questioned act or instrument, as distinguished from a mere incidental interest in
the question involved.
Petitioner alleges that [i]n seeking declaratory relief as to the constitutionality of an
act of a religious leader to endorse, or require the members of the religious flock to
vote for a specific candidate, herein Respondent SJS has no legal interest in the
De Leon. Tan. Udarbe
controversy;[39] it has failed to establish how the resolution of the proffered question
would benefit or injure it.
Parties bringing suits challenging the constitutionality of a law, an act or a statute
must show not only that the law [or act] is invalid, but also that [they have] sustained
or [are] in immediate or imminent danger of sustaining some direct injury as a result
of its enforcement, and not merely that [they] suffer thereby in some indefinite
way.[40] They must demonstrate that they have been, or are about to be, denied
some right or privilege to which they are lawfully entitled, or that they are about to
be subjected to some burdens or penalties by reason of the statute or act
complained of.
8. OLLADA v. CENTRAL BANK
G.R. No. L-11357;
May 31, 1962
DOCTRINE: An action for declaratory relief should be filed before there has been a
breach of a contract, statutes or right, and that it is sufficient to bar such action, that
there had been a breach which would constitute actionable violation. The rule is
that an action for Declaratory Relief is proper only if adequate relief is not available
through the means of other existing forms of action or proceeding.
FACTS: Felipe B. Ollada is a CPA. His name was placed in the rolls of CPAs authorized
and accredited to practice accountancy in the office of the Central Bank of the
Philippines. In December, 1955, by reason of a requirement of the Import-Export
Department of said bank that CPAs submit to an accreditation under oath before
they could certify financial statements of their clients applying for import dollar
allocations with its office, Ollada's previous accreditation was nullified.
The Import-Export Department of the Central Bank issued APPLICATION FOR
ACCREDITATION OF CERTIFIED PUBLIC ACCOUNTANTS and ACCREDITATION CARD
FOR CERTIFIED PUBLIC ACCOUNTANTS for CPAs to accomplish under oath. Assailing
said accreditation requirement on the ground that it was (a) an unlawful invasion of
the jurisdiction of the Board of Accountancy, (b) in excess of the powers of the
Central Bank and (c) unconstitutional in that it unlawfully restrained the legitimate
pursuit of one's trade, Ollada, for himself and allegedly on behalf of numerous other
CPAs, filed a petition for Declaratory Relief in the CFI of Manila to nullify said
accreditation requirement.
SHHH Digests Special Proceedings 2016-2017
On April 16, 1956 the Central Bank filed a motion to dismiss for lack of cause of
action. Its main contention was that the Central Bank has the responsibility of
administering the Monetary Banking System of the Republic and is authorized to
prepare and issue, through its Monetary Board, rules and regulations to make
effective the discharge of such responsibility; that the accreditation requirement
alleged in the petition was issued in the exercise of such power and authority; that
the purpose of such requirement is not to regulate the practice of accountancy in
the Philippines but only the manner in which CPAs should transact business with the
Central Bank.
On May 3, 1956, petitioner Ollada applied for a writ of preliminary injunction to
restrain the respondent Central Bank of the Philippines from enforcing the
accreditation requirement aforesaid until final adjudication of the case. In a
memorandum submitted by said respondent opposing the issuance of the writ, it
manifested that it was willing to delete paragraph 13 from its Application for
accreditation, which required CPAs to answer the query whether they agreed, if
accredited with the Import-Export Department, Central Bank of the Philippines, to
follow strictly the rules and regulations promulgated by the Philippine Institute of
Accountants and, if not, to state their reasons therefor, and that it was also willing to
modify paragraph 14 of the same form to read Do you agree, if accredited with the
Import-Export Department, to follow strictly the rules and regulations of the Central
Bank of the Philippines concerning the practice of your profession as CPA,
On May 22, 1956 the trial court required respondent to submit within ten days from
notice, proof that it had deleted the paragraphs, otherwise the writ of preliminary
injunction prayed for by petitioner would be granted. Having complied with said
order, the court, denied the petition for preliminary injunction. Petitioner filed MR
alleging that, respondent was still enforcing the rules and regulations of the
Philippine Institute of Accountants in its ACCREDITATION CARD FOR CERTIFIED
PUBLIC ACCOUNTANTS which was still a part of the questioned accreditation
requirement.
The court reconsidered and issued another order granting the petition for the writ of
preliminary injunction upon the filing of a bond in the sum of P2,000.00 on the
ground that CPAs applying for accreditation with respondent were still required to
execute under oath Accreditation card for certified public accountants to be
governed by the rules and regulations of the Philippine Institute of Accountants. In a
motion for the reconsideration of this last order, respondent stated that Form of its
De Leon. Tan. Udarbe
Import-Export Department had been modified wherein the requirement that the
applicant should sign a statement under oath has been eliminated, and that, upon
accreditation, a CPA would be governed by the rules and regulations of the Central
Bank and not by those of the Philippine Institute of Accountants.
Consequently, the court set aside its order of July 7, 1956 granting the writ of
preliminary injunction. Finally, on July 31, 1956, the lower court, resolving the
motion to dismiss filed by respondent, dismissed the complaint.
Upon motion of petitioner, We issued a resolution granting a writ of preliminary
injunction restraining respondent from requiring CPAs to comply with the
accreditation requirement of its Import-Export Department, on the ground that
there was nothing in the record showing that the same was issued by its Monetary
Board or by someone else duly authorized by the latter.
ISSUE: Whether upon the facts alleged in the petition for Declaratory Relief and
others elicited from the parties and made of record by them prior to the issuance of
the order appealed from, this case was properly dismissed.
RULING: The Monetary Board of the Central Bank has authority to prepare and issue
such rules and regulations it may consider necessary for the effective discharge of
the responsibilities and exercise of the powers assigned to it and to the Central Bank
under the provisions of Section 1 (a), RA No. 265. The Governor of the Central Bank
is also authorized to delegate his power to represent the Bank "to other officers of
the Bank upon his own responsibility".
To implement its authority to temporarily suspend or restrict sales of exchange by
the Central Bank and subject all transactions in gold and foreign exchange to license
by the latter, the Monetary Board, approved Resolution No. 1528, authorizing the
Import-Export Department to revise quota allocations and to prepare revised
procedures for the determination of violations of Central Bank Import-Export
regulations. Among the revised procedures adopted by the aforesaid Department
was its accreditation system, the purpose of which was to correct certain
irregularities committed by some CPAs in their certification of the financial
statements of their clients applying for dollar allocations.
As held by the lower court, "the only objectionable feature of respondent's
aforementioned requirement had already been eliminated . . . Forms had also been
modified. For this reason, the court held that "the petition for declaratory relief has
become groundless" and, as a result, ordered its dismissal.
SHHH Digests Special Proceedings 2016-2017
We believe that, upon the facts appearing of record, said petition was correctly
dismissed. In order to dismiss an action, Sutherland, Code of Pleadings, Practice and
Form, 167, has laid down the essential test which should serve as the controlling
guide in determining whether a petition states a cause of action, to wit:
1. Does the complaint show the plaintiff suffered an injury?
2. Is it an injury the law recognizes as a wrong?
3. Is the defendant liable for the alleged wrong?
4. If the defendant is liable, to what extent is he liable and what will be the
legal remedy from such injury?
It is clear from the allegations of the petition that the petitioner has sufficiently
stated facts to satisfy the foregoing requisites of a pleading in order that petitioner's
action should be given due course by this Court. Petitioner submits that the
respondent's requirement complained of is an act of constituting a violation of the
Constitution and also a violation of the petitioners right to freely practice his
profession anywhere and in any government office in the Philippines. It is undisputed
that the only body that can regulate the practice of accountancy in the Philippines is
the Board of Accountancy. The action thus of the respondent in requiring the
accreditation of CPAs before they can practice with the Central Bank of the
Philippines is an unlawful invasion into the exclusive jurisdiction of the said Board of
Accountancy. Why was petitioner's right as a CPA violated by the respondent?
Because the respondent's placing of a ban to CPAs including the petitioner with
respect to certification of financial statements of their clients applying for dollar(s)
allocation in the Central Bank of the Philippines has resulted in the unlawful restraint
in the practice of CPAs in the office of the Central Bank of the Philippines.
Petitioner commenced this action as, and clearly intended it to be one for
Declaratory Relief under the provisions of Rule 66 of the Rules of Court. On the
question of when a special civil action of this nature would prosper, we have already
held that the complaint for declaratory relief will not prosper if filed after a contract,
statute or right has been breached or violated. In the present case such is precisely
the situation arising from the facts alleged in the petition for declaratory relief. As
vigorously claimed by petitioner himself, respondent had already invaded or violated
his right and caused him injury all these giving him a complete cause of action
enforceable in an appropriate ordinary civil action or proceeding. The dismissal of
the action was, therefore, proper. An action for declaratory relief should be filed
De Leon. Tan. Udarbe
before there has been a breach of a contract, statutes or right, and that it is
sufficient to bar such action, that there had been a breach which would constitute
actionable violation. The rule is that an action for Declaratory Relief is proper only if
adequate relief is not available through the means of other existing forms of action
or proceeding.
9. Republic of the Philippines v. Harry Roque et. al
GR. No. 204603
September 24, 2013
Doctrine: Allegations of abuse must be anchored on real events before courts may
step in to settle actual controversies involving rights which are legally demandable
and enforceable.
It is well-settled that a question is ripe for adjudication when the act being
challenged has had a direct adverse effect on the individual challenging it.
Facts: Private respondents filed a Petition6 for declaratory relief before the RTC,
assailing the constitutionality of the following sections of RA 9372: (a) Section 3, for
being void for vagueness; (b) Section 7, for violating the right to privacy of
communication and due process and the privileged nature of priest-penitent
relationships; (c)Section 18, for violating due process, the prohibition against ex post
facto laws or bills of attainder, the Universal Declaration of Human Rights, and the
International Covenant on Civil and Political Rights, as well as for contradicting Article
12512 of the Revised Penal Code, as amended; (d) Section 26, for violating the right
to travel; and (e) Section 27, for violating the prohibition against unreasonable
searches and seizures.17
Petitioners moved to suspend the proceedings, averring that certain petitions (SC
petitions) raising the issue of RA 9372s constitutionality have been lodged before
the Court. The said motion was granted.
The Court promulgated its Decision in the Southern Hemisphere cases and thereby
dismissed the SC petitions.
On February 27, 2012, petitioners filed the subject motion to dismiss, contending
that private respondents failed to satisfy the requisites for declaratory relief.
Likewise, they averred that the constitutionality of RA 9372 had already been upheld
by the Court in the Southern Hemisphere cases.
SHHH Digests Special Proceedings 2016-2017
In their Comment/Opposition, private respondents countered that: (a) the Court did
not resolve the issue of RA 9372s constitutionality in Southern Hemisphere as the SC
petitions were dismissed based purely on technical grounds; and (b) the requisites
for declaratory relief were met.
RTC denied the subject motion to dismiss, finding that the Court did not pass upon
the constitutionality of RA 9372 and that private respondents petition for
declaratory relief was properly filed.
Petitioners moved for reconsideration which was denied by the RTC. The RTC
observed that private respondents have personal and substantial interests in the
case and that it would be illogical to await the adverse consequences of the
aforesaid laws implementation considering that the case is of paramount impact to
the Filipino people.
Petitioners argue that private respondents failed to satisfy the requirements for
declaratory relief and that the Court had already sustained with finality the
constitutionality of RA 9372.
On the contrary, private respondents maintain that the requirements for declaratory
relief have been satisfied and that the Court has yet to resolve the constitutionality
of RA 9372, negating any grave abuse of discretion on the RTCs part.
Issue: WON RTC gravely abused its discretion when it denied the subject motion to
dismiss
Held: Yes. The Court observes that RTC exceeded its jurisdiction when it ruled that
private respondents petition had met all the requisites for an action for declaratory
relief. Consequently, its denial of the subject motion to dismiss was altogether
improper.
Case law states that the following are the requisites for an action for declaratory
relief:
First , the subject matter of the controversy must be a deed, will, contract or other
written instrument, statute, executive order or regulation, or ordinance; second , the
terms of said documents and the validity thereof are doubtful and require judicial
construction; third , there must have been no breach of the documents in question;
fourth , there must be an actual justiciable controversy or the "ripening seeds" of
one between persons whose interests are adverse; fifth , the issue must be ripe for
De Leon. Tan. Udarbe
judicial determination; and sixth , adequate relief is not available through other
means or other forms of action or proceeding.
Based on a judicious review of the records, the Court observes that while the
first, second, and third requirements appear to exist in this case, the fourth, fifth,
and sixth requirements, however, remain wanting.
As to the fourth requisite, there is serious doubt that an actual justiciable
controversy or the "ripening seeds" of one exists in this case.
Pertinently, a justiciable controversy refers to an existing case or controversy that is
appropriate or ripe for judicial determination, not one that is conjectural or merely
anticipatory. Corollary thereto, by "ripening seeds" it is meant that a dispute may be
tried at its inception before it has accumulated the asperity, distemper, animosity,
passion, and violence of a full blown battle that looms ahead. The concept describes
a state of facts indicating imminent and inevitable litigation provided that the issue is
not settled and stabilized by tranquilizing declaration.
A perusal of private respondents petition for declaratory relief would show that they
have failed to demonstrate how they are left to sustain or are in immediate danger
to sustain some direct injury as a result of the enforcement of the assailed provisions
of RA 9372. Respondents only assert general interests as citizens, and taxpayers and
infractions which the government could prospectively commit if the enforcement of
the said law would remain untrammeled. They failed to show how these remarks
tended towards any prosecutorial or governmental action geared towards the
implementation of RA 9372 against them. In other words, there was no particular,
real or imminent threat to any of them. As held in Southern Hemisphere:
Without any justiciable controversy, the petitions have become pleas for declaratory
relief, over which the Court has no original jurisdiction. Then again, declaratory
actions characterized by "double contingency," where both the activity the
petitioners intend to undertake and the anticipated reaction to it of a public official
are merely theorized, lie beyond judicial review for lack of ripeness.
Allegations of abuse must be anchored on real events before courts may step in to
settle actual controversies involving rights which are legally demandable and
enforceable.
Thus, in the same light that the Court dismissed the SC petitions in the Southern
Hemisphere cases on the basis of, among others, lack of actual justiciable
controversy (or the ripening seeds of one), the RTC should have dismissed private
respondents petition for declaratory relief all the same.
SHHH Digests Special Proceedings 2016-2017
As to the fifth requisite for an action for declaratory relief, neither can it be inferred
that the controversy at hand is ripe for adjudication since the possibility of abuse,
based on the above-discussed allegations in private respondents petition, remain
highly-speculative and merely theorized. It is well-settled that a question is ripe for
adjudication when the act being challenged has had a direct adverse effect on the
individual challenging it. This private respondents failed to demonstrate in the case
at bar.
Finally, as regards the sixth requisite, the Court finds it irrelevant to proceed with a
discussion on the availability of adequate reliefs since no impending threat or injury
to the private respondents exists in the first place.
All told, in view of the absence of the fourth and fifth requisites for an action for
declaratory relief, as well as the irrelevance of the sixth requisite, private
respondents petition for declaratory relief should have been dismissed. Thus, by
giving due course to the same, it cannot be gainsaid that the RTC gravely abused its
discretion.
10. Tanada v Aldaya
G.R. No. L-9322-23
January 30, 1956
Doctrine: A court decision cannot be interpreted as included within the purview of
the words other written instrument, as contended by Appellant, for the simple
reason that the Rules of Court already provide for the ways by which an ambiguous
or doubtful decision may be corrected or clarified without need of resorting to the
expedient prescribed by Rule 66
Facts: On April 10, 1948, Appellant instituted in the Court of First Instance of Cavite
an action for the annulment of a certain contract of sale with pacto de retro. On May
11, 1949, the trial court rendered a decision declaring the contract valid and
absolving Appellee of the complaint. After a motion to set aside judgment and a
motion for new trial filed by Appellant were denied by the trial court, Appellant
brought the case on appeal to the Supreme Court. On July 23, 1951, the Supreme
Court affirmed the decision appealed from particularly with regard to the validity of
the contract which is disputed by Appellant. After the two motions for
reconsideration filed by Appellant were denied, the decision became final and
executory and the record was returned to the court of origin; but, on November 8,
1951, Appellant initiated the present case for declaratory relief.
Appellee filed a motion to dismiss on the ground that the case states no cause of
action. In the meantime, Appellee moved to withdraw the original of Title No. 114
which was presented in the case as evidence in order that his ownership may be
De Leon. Tan. Udarbe
consolidated and a new title issued in his name it appearing that case has been
finally terminated (Civil Case No. 4606). The trial court, acting on the two motions,
entered an order on June 12, 1953 granting the motion to dismiss and allowing the
withdrawal of the original title as already adverted to in the early part of this
decision.
Issue: WON it is correct for the appellant to initiate a declaratory relief
Held: The purpose of the case which gave rise to the present appeal is avowedly for
declaratory relief instituted under Section 1, Rule 66 of the Rules of Court which
provides that Any person interested under a deed, will, contract or other written
instrument, or whose rights are affected by a statute or ordinance, may bring an
action to determine any question of construction or validity arising under the
instrument or statute and for a declaration of his rights or duties thereunder. And,
it is claimed, this case comes under its purview because its purpose is to obtain a
clarification of the decision of this Court in G. R. No. L-3278 which in the opinion of
Appellant, is vague and susceptible of double interpretation. Appellant contends that
the words other written instrument should be interpreted as including a court
decision regardless of whether it is final in character or otherwise.
We do not subscribe to the foregoing view. Evidently, a court decision cannot be
interpreted as included within the purview of the words other written instrument,
as contended by Appellant, for the simple reason that the Rules of Court already
provide for the ways by which an ambiguous or doubtful decision may be corrected
or clarified without need of resorting to the expedient prescribed by Rule 66.
But the fundamental reason why the decision of this Court in the original case (G. R.
No. L-3278) cannot be the subject of declaratory relief is predicated upon the
principle of res judicata which stamps the mark of finality on a case which has been
fully and definitely litigated in court. This principle is sound. It avoids multiplicity of
actions. It commands that once a case is definitely litigated it should not be
reopened.
11. PHILIPPINE DEPOSIT INSURANCE CORPORATION v. CA
G.R. No. 126911;
April 30, 2003
DOCTRINE: A petition for declaratory relief does not essentially entail an executory
process. There is nothing in its nature, however, that prohibits a counterclaim from
being set-up in the same action. There is nothing in the nature of a special civil action
for declaratory relief that proscribes the filing of a counterclaim based on the same
transaction, deed or contract subject of the complaint.
SHHH Digests Special Proceedings 2016-2017
FACTS: Prior to May 22, 1997, respondents had, individually or jointly with each
other, 71 certificates of time deposits denominated as "Golden Time Deposits" (GTD)
with an aggregate face value of P1,115,889.96.
The Monetary Board of the Central Bank of the Philippines, now Bangko Sentral ng
Pilipinas, issued Resolution 505 prohibiting MBC to do business in the Philippines,
and placing its assets and affairs under receivership. The Resolution, however, was
not served on MBC until Tuesday the following week, or on May 26, 1987, when the
designated Receiver took over.
Next banking day, respondent Jose Abad was at the MBC at 9:00 a.m. for the
purpose of pre-terminating the 71 aforementioned GTDs and re-depositing the fund
represented thereby into 28 new GTDs in denominations of P40,000.00 or less under
the names of herein respondents individually or jointly with each other. Of the 28
new GTDs, Jose Abad pre-terminated 8 and withdrew the value thereof in the total
amount of P320,000.00.
Respondents thereafter filed their claims with the PDIC for the payment of the
remaining 20 insured GTDs.
PDIC paid respondents the value of 3 claims in the total amount of P120,000.00.
PDIC, however, withheld payment of the 17 remaining claims after Washington
Solidum, Deputy Receiver of MBC-Iloilo, submitted a report to the PDIC that there
was massive conversion and substitution of trust and deposit accounts on May 25,
1987 at MBC-Iloilo.
Because of the report, PDIC entertained serious reservation in recognizing
respondents' GTDs as deposit liabilities of MBC-Iloilo. Thus, on August 30, 1991, it
filed a petition for declaratory relief against respondents with the (RTC) of Iloilo City,
for a judicial declaration determination of the insurability of respondents' GTDs at
MBC-Iloilo.
In their Answer and Amended Answer , respondents set up a counterclaim whereby
they asked for payment of their insured deposits.
Iloilo RTC declared the 20 GTDs of respondents to be deposit liabilities of MBC,
hence, are liabilities of PDIC as statutory insurer, ordering PDIC to pay immediately
the Abads the balance of its admitted liability should there be any, subject to
liquidation when this case shall have been finally decide
De Leon. Tan. Udarbe
On appeal, CA affirmed the trial court's decision except as to the award of legal
interest which it deleted.
ISSUE: Whether the CA erred in affirming the holding of the trial court ordering
petitioner to pay respondents' claims for payment of insured deposits for the reason
that an action for declaratory relief does not essentially entail an executory process
as the only relief that should have been granted by the trial court is a declaration of
the rights and duties of petitioner under R.A. 3591, as amended, particularly section
3(f) thereof.
RULING: Petitioner posits that the trial court erred in ordering it to pay the balance
of the deposit insurance to respondents, maintaining that the instant petition
stemmed from a petition for declaratory relief which does not essentially entail an
executory process, and the only relief that should have been granted by the trial
court is a declaration of the parties' rights and duties. As such, petitioner continues,
no order of payment may arise from the case as this is beyond the office of
declaratory relief proceedings.
Without doubt, a petition for declaratory relief does not essentially entail an
executory process. There is nothing in its nature, however, that prohibits a
counterclaim from being set-up in the same action.
Now, there is nothing in the nature of a special civil action for declaratory relief that
proscribes the filing of a counterclaim based on the same transaction, deed or
contract subject of the complaint. A special civil action is after all not essentially
different from an ordinary civil action, which is generally governed by Rules 1 to 56
of the Rules of Court, except that the former deals with a special subject matter
which makes necessary some special regulation. But the identity between their
fundamental nature is such that the same rules governing ordinary civil suits may
and do apply to special civil actions if not inconsistent with or if they may serve to
supplement the provisions of the peculiar rules governing special civil actions.
12. Matalin Coconut Co., Inc. v. Municipal Council of Malabang
GR. No. L-28138
August 13, 1986
Doctrine: Respondents' contention that courts under declaratory relief can only
construe validity of ordinance and declare rights, if sustained, would in effect require
a separate suit for the recovery of the fees paid by petitioner under protest.
Multiplicity of suits should not be allowed or encouraged and, in the context of the
present case, is clearly uncalled for and unnecessary.
SHHH Digests Special Proceedings 2016-2017
Facts: The Municipal Council of Malabang, Lanao del Sur, invoking the authority of
Section 2 of Republic Act No. 2264, otherwise known as the Local Autonomy Act,
enacted Municipal Ordinance No. 45-46, entitled "AN ORDINANCE IMPOSING A
POLICE INSPECTION FEE OF P.30 PER SACK OF CASSAVA STARCH PRODUCED AND
SHIPPED OUT OF THE MUNICIPALITY OF MALABANG AND IMPOSING PENALTIES FOR
VIOLATIONS THEREOF." The ordinance made it unlawful for any person, company or
group of persons "to ship out of the Municipality of Malabang, cassava starch or
flour without paying to the Municipal Treasurer or his authorized representatives the
corresponding fee fixed by (the) ordinance." It imposed a "police inspection fee" of
P.30 per sack of cassava starch or flour, which shall be paid by the shipper before the
same is transported or shipped outside the municipality. Any person or company or
group of individuals violating the ordinance "is liable to a fine of not less than
P100.00, but not more than P1,000.00, and to pay Pl.00 for every sack of flour being
illegally shipped outside the municipality, or to suffer imprisonment of 20 days, or
both, in the discretion of the court.
The validity of the ordinance was challenged by the Matalin Coconut, Inc. in a
petition for declaratory relief filed with the CFI of Lanao del Sur against the Municipal
Council, the Municipal Mayor and the Municipal Treasurer of Malabang, Lanao del
Sur. Alleging among others that the ordinance is not only ultra vires, being violative
of Republic Act No. 2264, but also unreasonable, oppressive and confiscatory, the
petitioner prayed that the ordinance be declared null and void ab initio, and that the
respondent Municipal Treasurer be ordered to refund the amounts paid by
petitioner under the ordinance. The petitioner also prayed that during the pendency
of the action, a preliminary injunction be issued enjoining the respondents from
enforcing the ordinance. The application for preliminary injunction, however, was
denied by the trial court; instead respondent Municipal Treasurer was ordered to
allow payment of the taxes imposed by the ordinance under protest.
After trial, the Court a quo ruled that the municipal ordinance in question null and
void; ordering the respondent Municipal Treasurer to refund to the petitioner the
payments; and enjoining and prohibiting the respondents, their agents or deputies,
from collecting the tax of P.30 per bag on the cassava flour or starch belonging to
intervenor, Purakan Plantation Company, manufactured or milled in the Municipality
of Balabagan, but shipped out through the Municipality of Malabang.
Trial Court issued a writ of preliminary mandatory injunction, upon motion of
petitioner, requiring the respondent Municipal Treasurer to deposit with the
Philippine National Bank, Iligan Branch, in the name of the Municipality of Malabang,
whatever amounts the petitioner had already paid or shall pay pursuant to the
ordinance in question up to and until final termination of the case; the deposit was
not to be withdrawn from the said bank without any order from the court.
De Leon. Tan. Udarbe
From the decision of the trial court, the respondents appealed to this Court.
The respondents-appellants maintain that it was error for the trial court, in an action
for declaratory relief, to order the refund to petitioner-appellee of the amounts paid
by the latter under the municipal ordinance in question. It is the contention of
respondents-appellants that in an action for declaratory relief, all the court can do is
to construe the validity of the ordinance in question and declare the rights of those
affected thereby. The court cannot declare the ordinance illegal and at the same
time order the refund to petitioner of the amounts paid under the ordinance,
without requiring petitioner to file an ordinary action to claim the refund after the
declaratory relief judgment has become final. Respondents maintain that under Rule
64 of the Rules of Court, the court may advise the parties to file the proper pleadings
and convert the hearing into an ordinary action, which was not done in this case.
Issue: WON under Rule 64 the court can do is to construe the validity of the
ordinance in question and declare the rights of those affected
Held: No. Under Sec. 6 of Rule 64, the action for declaratory relief may be converted
into an ordinary action and the parties allowed to file such pleadings as may be
necessary or proper, if before the final termination of the case "a breach or violation
of an...ordinance, should take place." In the present case, no breach or violation of
the ordinance occurred. The petitioner decided to pay "under protest" the fees
imposed by the ordinance. Such payment did not affect the case; the declaratory
relief action was still proper because the applicability of the ordinance to future
transactions still remained to be resolved, although the matter could also be
threshed out in an ordinary suit for the recovery of taxes paid.
In its petition for declaratory relief, petitioner-appellee alleged that by reason of the
enforcement of the municipal ordinance by respondents it was forced to pay under
protest the fees imposed pursuant to the said ordinance, and accordingly, one of the
reliefs prayed for by the petitioner was that the respondents be ordered to refund all
the amounts it paid to respondent Municipal Treasurer during the pendency of the
case. The inclusion of said allegation and prayer in the petition was not objected to
by the respondents in their answer. During the trial, evidence of the payments made
by the petitioner was introduced. Respondents were thus fully aware of the
petitioner's claim for refund and of what would happen if the ordinance were to be
declared invalid by the court.
Respondents' contention, if sustained, would in effect require a separate suit for the
recovery of the fees paid by petitioner under protest. Multiplicity of suits should not
be allowed or encouraged and, in the context of the present case, is clearly uncalled
for and unnecessary.
SHHH Digests Special Proceedings 2016-2017
13. DEPARTMENT OF BUDGET AND MANAGEMENT v. MANILAS FINEST RETIREES
ASSOCIATION, INC.
G.R. No. 169466
May 9, 2007
Doctrine: Under Sec. 6 of Rule 64, the action for declaratory relief may be converted
into an ordinary action and the parties allowed to file such pleadings as may be
necessary or proper, if before the final termination of the case "a breach or violation
of an ordinance, should take place."
Facts: In 1975, Presidential Decree (P.D.) No. 765 was issued constituting the
Integrated National Police (INP) to be composed of the Philippine Constabulary (PC)
as the nucleus and the integrated police forces as components thereof.
Complementing P.D. No. 765 was P.D. No. 1184 dated August 26, 1977 (INP Law,
hereinafter) issued to professionalize the INP and promote career development
therein.
On December 13, 1990, Republic Act (R.A.) No. 6975, entitled "AN ACT
ESTABLISHING THE PHILIPPINE NATIONAL POLICE UNDER A REORGANIZED
DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT, AND FOR OTHER
PURPOSES," hereinafter referred to as PNP Law, was enacted. Under Section 23 of
said law, the Philippine National Police (PNP) would initially consist of the members
of the INP, created under P.D. No. 765, as well as the officers and enlisted personnel
of the PC.
February 25, 1998, R.A. No. 6975 was amended by R.A. No. 8551, otherwise known
as the "PHILIPPINE NATIONAL POLICE REFORM AND REORGANIZATION ACT OF
1998." Among other things, the amendatory law reengineered the retirement
scheme in the police organization. Relevantly, PNP personnel, under the new law,
stood to collect more retirement benefits than what INP members of equivalent
rank, who had retired under the INP Law, received.
Hence, on June 3, 2002, in the Regional Trial Court (RTC) of Manila, all INP retirees,
spearheaded by the Manilas Finest Retirees Association, Inc., or the MFRAI
(hereinafter collectively referred to as the INP Retirees), filed a petition for
declaratory relief, thereunder impleading, as respondents, the Department of
Budget and Management (DBM), the PNP, the National Police Commission
(NAPOLCOM), the Civil Service Commission (CSC) and the Government Service
Insurance System (GSIS).
The GSIS moved to dismiss the petition on grounds of lack of jurisdiction and cause
of action. On the other hand, the CSC, DBM, NAPOLCOM and PNP, in their respective
answers, asserted that the petitioners could not claim the more generous retirement
De Leon. Tan. Udarbe
benefits under R.A. No. 6975 because at no time did they become PNP members,
having retired prior to the enactment of said law. DBM, NAPOLCOM and PNP
afterwards filed their respective pre-trial briefs.
March 21, 2003, the RTC came out with its decision holding that R.A. No. 6975, as
amended, did not abolish the INP but merely provided for the absorption of its police
functions by the PNP, and accordingly rendered judgment for the INP retirees.
On April 2, 2003, the trial court issued what it denominated as Supplement to the
Decision whereunder it granted the GSIS motion to dismiss and thus considered the
basic petition as withdrawn with respect to the latter.
From the adverse decision of the trial court, the remaining respondents, namely,
DBM, PNP, NAPOLCOM and CSC, interposed an appeal to the CA which affirmed the
decision of the trial court.
Issue: WON an action for declaratory relief may be converted into an ordinary action
Held: Under Sec. 6 of Rule 64, the action for declaratory relief may be converted into
an ordinary action and the parties allowed to file such pleadings as may be necessary
or proper, if before the final termination of the case "a breach or violation of an
ordinance, should take place." In the present case, no breach or violation of the
ordinance occurred. The petitioner decided to pay "under protest" the fees imposed
by the ordinance. Such payment did not affect the case; the declaratory relief action
was still proper because the applicability of the ordinance to future transactions still
remained to be resolved, although the matter could also be threshed out in an
ordinary suit for the recovery of taxes paid . In its petition for declaratory relief,
petitioner-appellee alleged that by reason of the enforcement of the municipal
ordinance by respondents it was forced to pay under protest the fees imposed
pursuant to the said ordinance, and accordingly, one of the reliefs prayed for by the
petitioner was that the respondents be ordered to refund all the amounts it paid to
respondent Municipal Treasurer during the pendency of the case. The inclusion of
said allegation and prayer in the petition was not objected to by the respondents in
their answer. During the trial, evidence of the
payments made by the petitioner was introduced. Respondents were thus fully
aware of the petitioner's claim for refund and of what would happen if the ordinance
were to be declared invalid by the court.
The Court sees no reason for treating this case differently from PDIC and Matalin
This disposition becomes all the more appropriate considering that the respondents,
as petitioners in the RTC, pleaded for the immediate adjustment of their retirement
benefits which, significantly, the herein petitioners, as respondents in the same
SHHH Digests Special Proceedings 2016-2017 De Leon. Tan. Udarbe
court, did not object to. Being aware of said prayer, the petitioners then already holding that respondents' allegation was substantiated by their evidence. Judgment
knew the logical consequence if, as it turned out, a declaratory judgment is rendered was rendered in favor of the respondents.
in the respondents favor.
ISSUE: Whether the lower court erred in not finding that the Order of January 28,
14. CRISOLOGO v. CENTENO 1955, was valid, final and executory.
G.R. No. L-20014;
November 27, 1968 RULING: (1) Article 1607 of the Civil Code which provides that:

DOCTRINE: Article 1607 of the Civil Code which provides that: In case of real In case of real property, the consolidation of ownership in the vendee by virtue of
property, the consolidation of ownership in the vendee by virtue of the failure of the the failure of the vendor to comply with the provisions of article 1616 shall not be
vendor to comply with the provisions of article 1616 shall not be recorded in the recorded in the Registry of Property without a judicial order, after the vendor has
Registry of Property without a judicial order, after the vendor has been duly heard. been duly heard.

It contemplates a contentious proceeding wherein the vendor a retro must be It contemplates a contentious proceeding wherein the vendor a retro must be
named respondent in the caption and title of the petition for consolidation of named respondent in the caption and title of the petition for consolidation of
ownership and has been duly heard. ownership and has been duly heard.

FACTS: On January 18, 1955, the spouses Francisco Crisologo and Consolacion In the instant case, the caption and title of the petition for consolidation of
Florentino filed in the CFI of Ilocos Sur an ex parte petition for consolidation of ownership named the vendees as petitioners, but did not name the vendors as
ownership in them as vendees a retro of two parcels of land situated at Lapog, Ilocos respondents, and said vendors were not duly summoned and heard. In view thereof,
Sur, on the ground that the vendors, the spouses Isaac Centeno and Asuncion
the Order of January 28, 1955, was a patent nullity having been issued contrary to
Aquino, have failed to exercise their right of repurchase within the periods stipulated
in the two contracts of sale with pacto de retro. the contentious proceeding contemplated in Article 1607 of the Civil Code, and the
lower court not having acquired jurisdiction over the persons of the vendors;
After hearing at which the petitioners presented evidence in support of the petition,
(2) The judgment of the Court of Appeals setting aside the Order of February 27,
the court a quo, through Judge Francisco Geronimo, granted the petition. On July 19,
1956, the vendors filed a motion to set aside the order, and on July 27, 1956, the 1957, and in consequence thereof the Order of January 28, 1955, as a patent nullity
court a quo, through Judge Felix Q. Antonio, granted the motion on the ground that on the ground that the lower court did not acquire jurisdiction over the persons of
the movants had not been duly notified of the hearing. the vendors because they had not been duly summoned is res judicata on the
question of nullity of said orders; and.
On motion by the petitioners to set aside the Order, on the ground that the vendors
had been notified by registered mail of the hearing, the lower court, by its Order of (3) After the remand to the court below, the proceedings further taken wherein the
February 27, 1957, granted the motion and set aside the previous order. vendors were named as respondents and duly summoned and heard, after which on
October 26, 1960, the appealed judgment was rendered in favor of the respondents,
The vendors appealed to the CA which rendered judgment setting aside the lower
were valid, being in accordance with the contentious proceeding provided for in
court's Order of February 27, 1957, after holding that the vendors had not been
Article 1607 of the Civil Code.
legally notified of the petition and the hearing, and that the Order of January 28,
1955, was a patent nullity. The CA remanded the record to the lower court for
reopening and for further proceedings. Accordingly, after the vendors had been duly
summoned as respondents, they filed their answer alleging that the two contracts of
sale with pacto de retro were really intended as equitable mortgages as securities for
usurious loans. After trial, the lower court rendered its decision on October 26, 1960,
SHHH Digests Special Proceedings 2016-2017
15. Oscar Ramos and Luz Agudo v. CA
GR. No. 42108
December 28, 1989
Doctrine: The approval by the probate court of the conditional sale was without
prejudice to the filing of the proper action for consolidation of ownership and/or
reformation of instrument in the proper court within the statutory period of
prescription.
Facts: Private respondent Adelaida Ramos borrowed from her brother, petitioner
Oscar D. Ramos, the amounts of P 5,000.00 and P 9,000.00 in connection with her
business transaction with one Flor Ramiro, Fred Naboa and Atty. Ruperto Sarandi
involving the recovery of a parcel of land in Tenejeros, Malabon. The said amount
was used to finance the trip to Hawaii of Ramiro, Naboa and Atty. Sarandi. As
security for said loan, private respondent Adelaida Ramos executed in favor of
petitioners 2 deeds of conditional sale of her rights, shares, interests and
participation respectively over Lot No. 4033 covered by Original Certificate of Title
No. 5125 registered in the name of their parents, Valente Ramos and Margarita
Denoga, now deceased; 2 and Lot No. 4221 covered by Transfer Certificate of Title
No. 10788 then registered in the names of Socorro Ramos, Josefina Ramos and
Adelaida Ramos, said properties being of the Cadastral Survey of Paniqui, Tarlac.
Upon the failure of said private respondent as vendor a retro to exercise her right of
repurchase within the redemption period, petitioner filed a petition for consolidation
and approval of the conditional sale of Lot No. 4033 in Special Proceedings No. 5174,
entitled "Intestate Estate of the late Margarita Denoga," and a petition for approval
of the pacto de retro sale of Lot No. 4221 in the former CFI of Tarlac acting as a
cadastral court.
The Court orders the consolidation of ownership and dominion in petitioners-
spouses Oscar D. Ramos and Luz Agudo over the rights, shares and interests of
Adelaida Ramos in Lot No. 4221 of the Cadastral Survey of Paniqui, Tarlac.
Private respondents had been and remained in possession of these properties until
sometime in 1964 when petitioner took possession thereof.
Private respondent filed Civil Case and alleged that the deeds of conditional sale,
dated May 27, 1959 and August 30, 1959, are mere mortgages and were vitiated by
misrepresentation, fraud and undue influence and that the orders dated January 22,
1960 and April 18, 1960, respectively issued by the probate and cadastral courts,
were null and void for lack of jurisdiction.
De Leon. Tan. Udarbe
Petitioners, in their answer, specifically deny the allegations of fraud and
misrepresentation and interposed as defense the fact that the questioned
conditional sales of May 27, 1959 and August 30, 1959 were voluntarily executed by
private respondent Adelaida Ramos and truly expressed the intention of the parties;
that the action, if any, has long prescribed; that the questioned orders of January 22,
1960 and April 18, 1960, approving the consolidation of ownership of the lands in
question in favor of petitioner were within the jurisdiction of the lower court, in its
capacity as a probate court insofar as Lot No. 4033 is concerned, and acting as a
cadastral court with respect to Lot No. 4221; and that said lands subject of the
conditional sales were in custodia legis in connection with the settlement of the
properties of the late Margarita Denoga, the predecessor in interest of both
petitioners and private respondents.
The court denied the motion to dismiss. Petitioners appeal but CA affirmed the
judgment of trial court. Petitioners motion for reconsideration was denied.
Issue: WON the orders issued are null and void on the ground of lack of jurisdiction
Held: Yes. Subject to settled exceptions not present in this case, the law does not
extend the jurisdiction of a probate court to the determination of questions of
ownership that arise during the proceeding. The parties concerned may choose to
bring a separate action as a matter of convenience in the preparation or
presentation of evidence. Obviously, the approval by the probate court of the
conditional sale was without prejudice to the filing of the proper action for
consolidation of ownership and/or reformation of instrument in the proper court
within the statutory period of prescription.
The same jurisdictional flaw obtains in the order of consolidation issued by the
cadastral court. RTC acting as cadastral court, acts with limited competence. It has
no jurisdiction to take cognizance of an action for consolidation of ownership, much
less to issue an order to that effect, such action must have been filed in the former
court of first instance, now in the regional trial court, in the exercise of its general
jurisdiction. That remedy, and the procedure therefor, is now governed by Rule 64 of
the Rules of Court as a special civil action cognizable by the regional trial court in the
exercise of original general jurisdiction.
Antecedent thereto, Article 1607 of the Civil Code provided for consolidation as
follows:
In case of real property, the consolidation of ownership in the vendee by virtue of
the failure of the vendor to comply with the provisions of article 1616 shall not be
SHHH Digests Special Proceedings 2016-2017
recorded in the Registry of Property without a judicial order, after the vendor has
been duly heard.
Hence in Crisologo, et al. vs. Centeno, et al., we ruled that said Article 1607
contemplates a contentious proceeding wherein the vendor a retro must be named
respondent in the caption and title of the petition for consolidation of ownership
and duly summoned and heard. An order granting the vendee's petition for
consolidation of ownership, without the vendor a retro being named as respondent,
summoned and heard, is a patent nullity for want of jurisdiction of the court over the
person of the latter.
The questioned order of consolidation issued by the cadastral court, being void for
lack of jurisdiction, is in contemplation of law non-existent and may be wholly
disregarded. Such judgment may be assailed any time, either directly or collaterally,
by means of a separate action or by resisting such judgment in any action or
proceeding whenever it is invoked. 27 It is not necessary to take any step to vacate or
avoid a void judgment; it may simply be ignored.
On the issue of prescription, in addition to what has been said, the present case,
having been filed on February 28, 1960, approximately seven (7) years from the
execution of the questioned deeds, was seasonably instituted. The prescriptive
period for actions based upon a written contract and for reformation is ten (10)
years under Article 1144 of the Civil Code. Such right to reformation is expressly
recognized in Article 1365 of the same code. 29
Article 1602 of the Civil Code is designed primarily to curtail the evils brought about
by contracts of sale with right of repurchase, such as the circumvention of the laws
against usury and pactum commissorium. 30 In the present case before us, to rule
otherwise would contravene the legislative intent to accord the vendor a retro
maximum safeguards for the protection of his legal rights under the true agreement
of the parties.
16. Republic v. Batuigas
G.R. No. 183110
October 7, 2013
Doctrine: Under existing laws, an alien may acquire Philippine citizenship through
either judicial naturalization under CA 473 or administrative naturalization under
Republic Act No. 9139 (the "Administrative Naturalization Law of 2000"). A third
option, called derivative naturalization, which is available to alien women married to
Filipino husbands is found under Section 15 of CA 473
De Leon. Tan. Udarbe
Facts: December 2, 2002, Azucena filed a Petition for Naturalization before the RTC
of Zamboanga del Sur. Azucena alleged in her Petition that she believes in the
principles underlying the Philippine Constitution; that she has all the qualifications
required under Section 2 and none of the disqualifications enumerated in Section 4
of Commonwealth Act No. 473 (CA473);
After all the jurisdictional requirements mandated by Section 9 of CA 473had been
complied with, the Office of the Solicitor General (OSG) filed its Motion to Dismiss on
the ground that Azucena failed to allege that she is engaged in a lawful occupation or
in some known lucrative trade. Finding the grounds relied upon by the OSG to be
evidentiary in nature, the RTC denied said Motion. Thereafter, the hearing for the
reception of Azucenas evidence was then set on May 18, 2004.
Neither the OSG nor the Office of the Provincial Prosecutor appeared on the day of
the hearing. Hence, Azucenas counsel moved that the evidence be presented ex-
parte, which the RTC granted. Accordingly, the RTC designated its Clerk of Court as
Commissioner to receive Azucenas evidence. During the November 5, 2004 ex-parte
hearing, no representative from the OSG appeared despite due notice.
On January 31, 2005, the RTC found that Azucena has amply supported the
allegations in her Petition. In its Omnibus Motion, the OSG argued that the ex-parte
presentation of evidence before the Branch Clerk of Court violates Section 10 of CA
473, as the law mandates public hearing in naturalization cases. The OSG then
appealed the RTC judgment to the CA, contending that Azucena failed to comply
with the income requirement under CA 473. The OSG maintained that Azucena is not
allowed under the Retail Trade Law (Republic Act No. 1180) to engage directly or
indirectly in the retail trade. Hence, she cannot possibly meet the income
requirement. And even if she is allowed, her business is not a "lucrative trade" within
the contemplation of the law or that which has an appreciable margin of income
over expenses in order to provide for adequate support in the event of
unemployment, sickness, or disability to work. On appeal, the Court of Appeals
affirmed the decision of the RTC.
Issue: WON there was a violation of section 10 of CA 473
Held: Under existing laws, an alien may acquire Philippine citizenship through either
judicial naturalization under CA 473 or administrative naturalization under Republic
Act No. 9139 (the "Administrative Naturalization Law of 2000"). A third option, called
derivative naturalization, which is available to alien women married to Filipino
husbands is found under Section 15 of CA 473, which provides that:
SHHH Digests Special Proceedings 2016-2017
"any woman who is now or may hereafter be married to a citizen of the Philippines
and who might herself be lawfully naturalized shall be deemed a citizen of the
Philippines."
Under this provision, foreign women who are married to Philippine citizens may be
deemed ipso facto Philippine citizens and it is neither necessary for them to prove
that they possess other qualifications for naturalization at the time of their marriage
nor do they have to submit themselves to judicial naturalization. Copying from
similar laws in the United States which has since been amended, the Philippine
legislature retained Section 15 of CA 473, which then reflects its intent to confer
Filipino citizenship to the alien wife thru derivative naturalization.
As the records before this Court show, Santiagos Filipino citizenship has been
adequately proven. Under judicial proceeding, Santiago submitted his birth
certificate indicating therein that he and his parents are Filipinos. He also submitted
voters registration, land titles, and business registrations/licenses, all of which are
public records. He has always comported himself as a Filipino citizen, an operative
fact that should have enabled Azucena to avail of Section 15 of CA473. On the
submitted evidence, nothing would show that Azucena suffers from any of the
disqualifications under Section 4 of the same Act.
However, the case before us is a Petition for judicial naturalization and is not based
on Section 15 of CA 473 which was denied by the then Ministry of Justice. The lower
court which heard the petition and received evidence of her qualifications and
absence of disqualifications to acquire Philippine citizenship, has granted the
Petition, which was affirmed by the CA.
Azucena is a teacher by profession and has actually exercised her profession before
she had to quit her teaching job to assume her family duties and take on her role as
joint provider, together with her husband, in order to support her family. Together,
husband and wife were able to raise all their five children, provided them with
education, and have all become professionals and responsible citizens of this
country. Certainly, this is proof enough of both husband and wifes lucrative trade.
Azucena herself is a professional and can resume teaching at anytime. Her
profession never leaves her, and this is more than sufficient guarantee that she will
not be a charge to the only country she has known since birth.
This case however is not a Petition for judicial declaration of Philippine citizenship
but rather a Petition for judicial naturalization under CA 473. In the first, the
petitioner believes he is a Filipino citizen and asks a court to declare or confirm his
status as a Philippine citizen. In the second, the petitioner acknowledges he is an
alien, and seeks judicial approval to acquire the privilege of be coming a Philippine
De Leon. Tan. Udarbe
citizen based on requirements required under CA 473.Azucena has clearly proven,
under strict judicial scrutiny, that she is qualified for the grant of that privilege, and
this Court will not stand in the way of making her a part of a truly Filipino family.
Rule 64. Review of judgments and final orders or resolutions of the COMELEC and COA
1. PATES v. COMELEC
G.R. No. 184915;
June 30, 2009
DOCTRINE: Section 7, Article IX-A of the Constitution provides that unless otherwise
provided by the Constitution or by law, any decision, order, or ruling of each
Commission may be brought to the Court on certiorari by the aggrieved party within
30 days from receipt of a copy thereof. For this reason, the Rules of Court provide
for a separate rule (Rule 64) specifically applicable only to decisions of the COMELEC
and the Commission on Audit.
Procedural rules, we must stress, should be treated with utmost respect and due
regard since they are designed to facilitate the adjudication of cases to remedy the
worsening problem of delay in the resolution of rival claims and in the administration
of justice. There have been some instances wherein this Court allowed a relaxation
in the application of the rules, but this flexibility was "never intended to forge a
bastion for erring litigants to violate the rules with impunity." A liberal interpretation
and application of the rules of procedure can be resorted to only in proper cases and
under justifiable causes and circumstances.
FACTS: a. February 1, 2008 The COMELEC First Division issued its Resolution;
b. February 4, 2008 The counsel for petitioner Nilo T. Pates (petitioner) received a
copy of the February 1, 2008 Resolution;
c. February 8, 2008 The petitioner filed his MR of the February 1, 2008 Resolution
(4 days from receipt of the February 1, 2008 Resolution)
d. September 18, 2008 The COMELEC en banc issued a Resolution denying the
petitioners MR.
e. September 22, 2008 The petitioner received the COMELEC en banc Resolution of
September 18, 2008
SHHH Digests Special Proceedings 2016-2017
Under this chronology, the last day for the filing of a petition for certiorari, i.e., 30
days from notice of the final COMELEC Resolution, fell on a Saturday (October 18,
2008), as the petitioner only had the remaining period of 26 days to file his petition,
after using up 4 days in preparing and filing his MR. Effectively, the last day for filing
was October 20, 2008 the following Monday or the first working day after October
18, 2008. The petitioner filed his petition with us on October 22, 2008 or two days
late; hence, our Resolution of dismissal of November 11, 2008.
The petitioner asks us in his "Urgent MR with Reiteration for the Issuance of a TRO"
to reverse the dismissal of his petition, arguing that the petition was seasonably filed
under the fresh period rule enunciated by the Supreme Court in a number of cases
decided beginning the year 2005.
ISSUE: WON the motion for reconsideration should be granted
RULING:
A. As a Matter of Law
Section 7, Article IX-A of the Constitution provides that unless otherwise provided by
the Constitution or by law, any decision, order, or ruling of each Commission may be
brought to the Court on certiorari by the aggrieved party within 30 days from receipt
of a copy thereof. For this reason, the Rules of Court provide for a separate rule
(Rule 64) specifically applicable only to decisions of the COMELEC and the
Commission on Audit. This Rule expressly refers to the application of Rule 65 in the
filing of a petition for certiorari, subject to the exception clause "except as
hereinafter provided."
Even a superficial reading of the MR shows that the petitioner has not challenged
our conclusion that his petition was filed outside the period required by Section 3,
Rule 64; he merely insists that the fresh period rule applicable to a petition for
certiorari under Rule 65 should likewise apply to petitions for certiorari of COMELEC
rulings filed under Rule 64.
Rule 64, however, cannot simply be equated to Rule 65 even if it expressly refers to
the latter rule. They exist as separate rules for substantive reasons as discussed
below. Procedurally, the most patent difference between the two i.e., the
exception that Section 2, Rule 64 refers to is Section 3 which provides for a special
period for the filing of petitions for certiorari from decisions or rulings of the
COMELEC en banc. The period is 30 days from notice of the decision or ruling
De Leon. Tan. Udarbe
(instead of the 60 days that Rule 65 provides), with the intervening period used for
the filing of any motion for reconsideration deductible from the originally-granted 30
days (instead of the fresh period of 60 days that Rule 65 provides).
Thus, as a matter of law, our ruling to dismiss the petition for late filing cannot but
be correct. Procedural rules, we must stress, should be treated with utmost respect
and due regard since they are designed to facilitate the adjudication of cases to
remedy the worsening problem of delay in the resolution of rival claims and in the
administration of justice. The requirement is in pursuance to the bill of rights
inscribed in the Constitution which guarantees that "all persons shall have a right to
the speedy disposition of their before all judicial, quasi-judicial and administrative
bodies," the adjudicatory bodies and the parties to a case are thus enjoined to abide
strictly by the rules. While it is true that a litigation is not a game of technicalities, it
is equally true that every case must be prosecuted in accordance with the prescribed
procedure to ensure an orderly and speedy administration of justice. There have
been some instances wherein this Court allowed a relaxation in the application of
the rules, but this flexibility was "never intended to forge a bastion for erring litigants
to violate the rules with impunity." A liberal interpretation and application of the
rules of procedure can be resorted to only in proper cases and under justifiable
causes and circumstances.
Significantly, the petitioner presented no exceptional circumstance or any
compelling reason to warrant the non-application of Section 3, Rule 64 to his
petition. He failed to explain why his filing was late. Other than his appeal to history,
uniformity, and convenience, he did not explain why we should adopt and apply the
fresh period rule to an election case.
B. As a Matter of Policy
In harking back to the history of the fresh period rule, what the petitioner apparently
wants for reasons of uniformity and convenience is the simultaneous
amendment of Section 3, Rule 64 and the application of his proposed new rule to his
case. To state the obvious, any amendment of this provision is an exercise in the
power of this Court to promulgate rules on practice and procedure as provided by
Section 5(5), Article VIII of the Constitution. Our rulemaking, as every lawyer should
know, is different from our adjudicatory function. Rulemaking is an act of legislation,
directly assigned to us by the Constitution, that requires the formulation of policies
rather than the determination of the legal rights and obligations of litigants before
us. As a rule, rulemaking requires that we consult with our own constituencies, not
SHHH Digests Special Proceedings 2016-2017
necessarily with the parties directly affected in their individual cases, in order to
ensure that the rule and the policy that it enunciates are the most reasonable that
we can promulgate under the circumstances, taking into account the interests of
everyone not the least of which are the constitutional parameters and guidelines
for our actions. We point these out as our adjudicatory powers should not be
confused with our rulemaking prerogative.hil
Based on these considerations, we do not find convenience and uniformity to be
reasons sufficiently compelling to modify the required period for the filing of
petitions for certiorari under Rule 64. The reason is constitutionally-based and is no
less than the importance our Constitution accords to the prompt determination of
election results.
C. Our Liberal Approach
Largely for the same reason and as discussed below, we are not inclined to suspend
the rules to come to the rescue of a litigant whose counsel has blundered by reading
the wrong applicable provision. The Rules of Court are with us for the prompt and
orderly administration of justice; litigants cannot, after resorting to a wrong remedy,
simply cry for the liberal construction of these rules.
Members of the bar are reminded that their first duty is to comply with the rules of
procedure, rather than seek exceptions as loopholes. Technical rules of procedure
are not designed to frustrate the ends of justice. These are provided to effect the
prompt, proper and orderly disposition of cases and, thus, effectively prevent the
clogging of court dockets. Utter disregard of these rules cannot justly be rationalized
by harking on the policy of liberal construction.
2. Atty. Alfonso Paa v. CA, CSC and Director Amoguis
GR. No. 126560
December 4, 1997
Doctrine: Petition for review as a mode of appeal versus a special civil action
for certiorari
Facts: Petitioner was the Administrative Officer of Regional Office No. XI of the
DOLE. In an Order, then DOLE Secretary Ma. Nieves R. Confesor ordered petitioner
DISMISSED from the service with forfeiture of leave credits and retirement benefits
and disqualification for reemployment in the government service, for conduct
grossly prejudicial to the best interest of the service, frequent absences from duty
during office hours, and violation of reasonable office rules and
De Leon. Tan. Udarbe
regulations. Unsuccessful in his bid for reconsideration, petitioner appealed to the
CSC.
In its Resolution No. 95-0230, the CSC found petitioner guilty of being notoriously
undesirable and imposed upon him the penalty of dismissal from the service with all
its accessories. Petitioner moved for reconsideration, which, however, was denied by
the Civil Service Commission in its Resolution No. 960987 of 13 February 1996.
Petitioner filed with CA a Motion for Extension of Time to File Petition
for Certiorari Under Rule 45 of the Rules of Court. He alleged that he received a copy
of the 13 February 1996 CSC resolution and he had then until 13 April 1996 within
which to file a petition for review under Rule 45 of the Rules of Court as amended;
and that he needed 3 weeks to secure certified true copies of the resolutions and
other pertinent documents [from] CSC which were to be attached to the petition. He
thus asked for an extension of 30 days from 13 April 1996 within which to file the
petition.
CA promulgated a Resolution denying petitioners Motion for Extension of Time to
File Petition.
It is to be noted that the questioned resolution was rendered by CSC; that the SC
Revised Administrative Circular No. 1-95 (Revised Circular No. 1-91) specifically
provides that appeals from judgments or final orders or resolutions of the quasi-
judicial agencies (which includes the Civil Service Commission) is Petition for Review.
Petitioner alleges:
i Whether decisions or resolutions of the CSC issued with grave abuse of discretion
can no longer be reviewed by the honorable court of appeals by a petition for review
under rule 45 or 65 of the new rules of court as amended despite the patent grave
abuse of discretion on the part of the CSC in deciding a case based on
documents/evidence introduced for the first time on appeal, ordinary appeal both
being the plain, speedy and adequate remedy in the ordinary course of law.
iii Whether a petition for certiorari under rule 45 or 65 of the rules of court as
amended can be considered a mode of appeal and if so considered as a mode of
appeal whether it is the proper remedy to correct super [sic] grave abuse of
discretion of the civil service commission in deciding a case based on an evidence
not introduced during the formal hearing of the case it appearing under such
circumstance there is no appeal, nor any plain, speedy, and adequate remedy in the
ordinary course of law that can be made available to the petitioner except the said
petition for certiorari under rule 45 or 65 of the rules of court as amended.
SHHH Digests Special Proceedings 2016-2017
The Solicitor General then concluded that since under Revised Administrative
Circular No. 1-95 of this Court appeals from judgments of quasi-judicial agencies
such as the Civil Service Commission should be by verified petition for review, and
considering further that Circular No. 2-90 of this Court provides that appeals taken to
either this Court or the Court of Appeals by the wrong or inappropriate mode of
appeal shall be dismissed, then petitioners motion for extension of time to file
petition for certiorari was correctly denied by the Court of Appeals.
The Office of the Solicitor General submits that the Court of Appeals did not commit
grave abuse of discretion as the petition which petitioner actually filed with the
Court of Appeals was one for certiorari under Rule 65 of the Rules of Court.
Petitioner justified his filing a petition for certiorari under Rule 65 in light of the
super-grave abuse of discretion on the part of the CSC in issuing the challenged
resolution, and that an ordinary appeal was not appropriate and sufficient to seek
redress for the reason that it would in effect impliedly give credence to the unlawful
acts of the CSC thus admitting its despotic, arrogant exercise of authority.
Issue: WON CA correctly dismissed petitioners Motion for Extension of Time to File
Petition for Certiorari under Rule 45
Held: Yes. Prior to the effectivity of R.A. No. 7902, a party aggrieved by any
decision, final order or resolution of the CSC had only one remedy, namely, a special
civil action for certiorari under Rule 65 of the Rules of Court to be filed with this
Court pursuant to Section 7 of Article IX-A of the Constitution, which reads, in part:
SEC. 7. Unless otherwise provided by law this Constitution or by law, any decision,
order, or ruling of each Commission may be brought to the Supreme Court
on certiorari by the aggrieved party within thirty days from receipt of a copy thereof.
Under the 1997 Rules of Civil Procedure, which took effect on 1 July 1997, a petition
for review as a mode of appeal to the Court of Appeals from decisions, final orders or
resolutions of the Court of Tax Appeals and quasi-judicial bodies, including the Civil
Service Commission, is governed by Rule 43 thereof.
Considering that petitioner announced in his motion for extension of time that he
would be filing a petition for review under Rule 45 of the Rules of Court, the Court of
Appeals cannot be faulted for peremptorily denying the motion.
Petitioner claims, however, that a petition for review was not his exclusive remedy,
as he could also avail of a special civil action for certiorari under Rule 65. There are,
De Leon. Tan. Udarbe
of course, settled distinctions between a petition for review as a mode of appeal and
a special civil action for certiorari, thus:
a. In appeal by certiorari, the petition is based on questions of law which the
appellant desires the appellate court to resolve. In certiorari as an original action, the
petition raises the issue as to whether the lower court acted without or in excess of
jurisdiction or with grave abuse of discretion.
b. Certiorari, as a mode of appeal, involves the review of the judgment, award or
final order on the merits. The original action for certiorari may be directed against an
interlocutory order of the court prior to appeal from the judgment or where there is
no appeal or any other plain, speedy or adequate remedy.
c. Appeal by certiorari must be made within the reglementary period for appeal. An
original action for certiorari may be filed not later than sixty (60) days from notice of
the judgment, order or resolution sought to be assailed.
d. Appeal by certiorari stays the judgment, award or order appealed from. An original
action for certiorari, unless a writ of preliminary injunction or a temporary
restraining order shall have been issued, does not stay the challenged proceeding.
e. In appeal by certiorari, the petitioner and respondent are the original parties to
the action, and the lower court or quasi-judicial agency is not to be
impleaded. In certiorari as an original action, the parties are the aggrieved, party
against the lower court or quasi-judicial agency and the prevailing parties, who
thereby respectively become the petitioner and respondents.
f. In certiorari for purposes of appeal, the prior filing of a motion for reconsideration
is not required (Sec. 1, Rule 45); while in certiorari as an original action, a motion for
reconsideration is a condition precedent (Villa-Rey Transit vs. Bello, L-18957, April
23, 1963), subject to certain exceptions.
g. In appeal by certiorari, the appellate court is in the exercise of its appellate
jurisdiction and power of review, while in certiorari as an original action, the higher
court exercises original jurisdiction under its power of control and supervision over
the proceedings of lower courts. [11]
The original jurisdiction of the Court of Appeals over special civil actions for, inter
alia, certiorari, is vested upon it in Section 9(1) of B.P. Blg. 129. This jurisdiction is
concurrent with the Supreme Court [12] and the Regional Trial Court. [13]
SHHH Digests Special Proceedings 2016-2017
If, indeed, petitioner initially believed that he had the alternative remedy of a special
civil action for certiorari which would have been more effective and adequate, then
it was not necessary for him to ask for an extension of time to file the petition. Under
Rule 65 then, he had a reasonable period from receipt of a copy of the Civil Service
Commission resolution denying his motion for reconsideration within which to file
the petition. That reasonable period has been interpreted to be ninety (90)
days. [14] We are not, however, persuaded that petitioner initially thought of filing a
special civil action. All along, what he had in mind was a petition for review, as
evidenced by his express reference in his motion to a petition for review under Rule
45 and his indication of the date he received a copy of the resolution, viz., 29 March
1996, and the last day to file the petition, viz., 13 April 1996, which coincided with
the last day prescribed under Rule 45.
If petitioner then filed a special civil action for certiorari on 10 May 1996, it was only
because he had lost his right to appeal by way of the intended petition for
review. The proffered justification then for his belated filing of a special action
for certiorari was nothing but a crude attempt to circumvent standing rules of
procedure, which we cannot tolerate.
It is settled that a special civil action for certiorari will not lie as a substitute for the
lost remedy of appeal, and we find no special nor compelling reasons why we should
make out an exception here.
In any case, even if we were to sympathize with petitioner and permit his recourse
under Rule 65, the end result would remain unchanged since a perusal of the
challenged resolutions of the Civil Service Commission fails to disclose any grave
abuse of discretion on its part.
3. Lokin Jr. v. COMELEC
G.R. No. 179431-32
June 22, 2010
Doctrine: A special civil action for quo warranto refers to questions of disloyalty to
the State, or of ineligibility of the winning candidate.
The mere filing of several cases based on the same incident does not necessarily
constitute forum shopping.
Facts: The Citizens Battle Against Corruption (CIBAC) was one of the organized
groups duly registered under the party-list system of representation that manifested
their intent to participate in the May 14, 2007 synchronized national and local
elections. Together with its manifestation of intent to participate, CIBAC, through its
president, Emmanuel Joel J. Villanueva, submitted a list of five nominees from which
its representatives would be chosen should CIBAC obtain the required number of
De Leon. Tan. Udarbe
qualifying votes. The list of nominees was later published in two newspapers of
general circulation, The Philippine Star News (sic) and The Philippine Daily Inquirer.
Prior to the elections, however, CIBAC, still through Villanueva, filed a certificate of
nomination, substitution and amendment of the list of nominees dated May 7, 2007,
whereby it withdrew the nominations of Lokin, Tugna and Galang and substituted
Armi Jane R. Borje as one of the nominees. The amended list of nominees of CIBAC
thus included: (1) Villanueva, (2) Cruz-Gonzales, and (3) Borje. June 20, 2007,
Villanueva sent a letter to COMELEC Chairperson Benjamin Abalos, transmitting
therewith the signed petitions of more than 81% of the CIBAC members, in order to
confirm the withdrawal of the nomination of Lokin, Tugna and Galang and the
substitution of Borje. In their petitions, the members of CIBAC averred that Lokin and
Tugna were not among the nominees presented and proclaimed by CIBAC in its
proclamation rally held in May 2007; and that Galang had signified his desire to focus
on his family life.
CIBAC filed with the COMELEC en banc a motion seeking the proclamation of Lokin as
its second nominee.
The motion was opposed by Villanueva and Cruz-Gonzales.
Notwithstanding Villanuevas filing of the certificate of nomination, substitution and
amendment of the list of nominees and the petitions of more than 81% of CIBAC
members, the COMELEC failed to act on the matter, prompting Villanueva to file a
petition to confirm the certificate of nomination, substitution and amendment of the
list of nominees of CIBAC on June 28, 2007
Issue: (a)Whether or not the Court has jurisdiction over the controversy;
(b)Whether or not Lokin is guilty of forum shopping;
Held: (A) A special civil action for quo warranto refers to questions of disloyalty to
the State, or of ineligibility of the winning candidate. The objective of the action is to
unseat the ineligible person from the office, but not to install the petitioner in his
place. Any voter may initiate the action, which is, strictly speaking, not a contest
where the parties strive for supremacy because the petitioner will not be seated
even if the respondent may be unseated.
The controversy involving Lokin is neither an election protest nor an action for quo
warranto, for it concerns a very peculiar situation in which Lokin is seeking to be
seated as the second nominee of CIBAC. Although an election protest may properly
be available to one party-list organization seeking to unseat another party-list
organization to determine which between the defeated and the winning party-list
organizations actually obtained the majority of the legal votes, Lokins case is not
SHHH Digests Special Proceedings 2016-2017
one in which a nominee of a particular party-list organization thereby wants to
unseat another nominee of the same party-list organization. Neither does an action
for quo warranto lie, considering that the case does not involve the ineligibility and
disloyalty of Cruz-Gonzales to the Republic of the Philippines, or some other cause of
disqualification for her.
Lokin has correctly brought this special civil action for certiorari against the
COMELEC to seek the review of the September 14, 2007 resolution of the COMELEC
in accordance with Section 7 of Article IX-A of the 1987 Constitution,
notwithstanding the oath and assumption of office by Cruz-Gonzales.
(B) Forum shopping consists of the filing of multiple suits involving the same parties
for the same cause of action, either simultaneously or successively, for the purpose
of obtaining a favorable judgment. Thus, forum shopping may arise: (a) whenever as
a result of an adverse decision in one forum, a party seeks a favorable decision
(other than by appeal or certiorari) in another; or (b) if, after having filed a petition in
the Supreme Court, a party files another petition in the Court of Appeals, because he
thereby deliberately splits appeals "in the hope that even as one case in which a
particular remedy is sought is dismissed, another case (offering a similar remedy)
would still be open"; or (c) where a party attempts to obtain a writ of preliminary
injunction from a court after failing to obtain the writ from another court.
What is truly important to consider in determining whether forum shopping exists or
not is the vexation caused to the courts and the litigants by a party who accesses
different courts and administrative agencies to rule on the same or related causes or
to grant the same or substantially the same reliefs, in the process creating the
possibility of conflicting decisions being rendered by the different fora upon the
same issue.
The mere filing of several cases based on the same incident does not necessarily
constitute forum shopping. The test is whether the several actions filed involve the
same transactions and the same essential facts and circumstances.
Lokin has filed the petition for mandamus to compel the COMELEC to proclaim him
as the second nominee of CIBAC upon the issuance of NBC Resolution No. 07-72
(announcing CIBACs entitlement to an additional seat in the House of
Representatives), and to strike down the provision in NBC Resolution No. 07-60 and
NBC Resolution No. 07-72 holding in abeyance "all proclamation of the nominees of
concerned parties, organizations and coalitions with pending disputes shall likewise
be held in abeyance until final resolution of their respective cases." He has insisted
that the COMELEC had the ministerial duty to proclaim him due to his being CIBACs
second nominee; and that the COMELEC had no authority to exercise discretion and
De Leon. Tan. Udarbe
to suspend or defer the proclamation of winning party-list organizations with
pending disputes.
On the other hand, Lokin has resorted to the petition for certiorari to assail the
September 14, 2007 resolution of the COMELEC (approving the withdrawal of the
nomination of Lokin, Tugna and Galang and the substitution by Cruz-Gonzales as the
second nominee and Borje as the third nominee); and to challenge the validity of
Section 13 of Resolution No. 7804, the COMELECs basis for allowing CIBACs
withdrawal of Lokins nomination.
Applying the test for forum shopping, the consecutive filing of the action for
certiorari and the action for mandamus did not violate the rule against forum
shopping even if the actions involved the same parties, because they were based on
different causes of action and the reliefs they sought were different.
4. FORTUNE LIFE INSURANCE COMPANY, INC. v. COA
G.R. No. 213525;
January 27, 2015
DOCTRINE: The reglementary periods under Rule42 and Rule 64 are different. In the
former, the aggrieved party is allowed 15 days to file the petition for review from
receipt of the assailed decision or final order, or from receipt of the denial of a
motion for new trial or reconsideration. In the latter, the petition is filed within 30
days from notice of the judgment or final order or resolution sought to be reviewed.
The filing of a motion for new trial or reconsideration, if allowed under the
procedural rules of the Commission concerned, interrupts the period; hence, should
the motion be denied, the aggrieved party may file the petition within the remaining
period, which shall not be less than five days in any event, reckoned from the notice
of denial.
We ruled in Pates v. Commission on Elections that the belated filing of the petition
for certiorari under Rule 64 on the belief that the fresh period rule should apply was
fatal to the recourse. As such, the petitioner herein should suffer the same fate for
having wrongly assumed that the fresh period rule under Neypes applied. Rules of
procedure may be relaxed only to relieve a litigant of an injustice that is not
commensurate with the degree of his thoughtlessness in not complying with the
prescribed procedure.
FACTS: Respondent Provincial Government of Antique and the petitioner executed a
MOA concerning the life insurance coverage of qualified barangay secretaries,
SHHH Digests Special Proceedings 2016-2017
treasurers and tanod, the former obligating P4,393,593.60for the premium payment,
and subsequently submitting the corresponding disbursement voucher to COA
Antique for pre-audit. The latter office disallowed the payment for lack of legal basis
under RA No. 7160 (Local Government Code). Respondent LGU appealed but its
appeal was denied.
Consequently, the petitioner filed its petition for money claim in the COA. On
November 15, 2012, the COA issued its decision denying the petition, holding that
under Section 447 and Section 458 of the LGC only municipal or city governments
are expressly vested with the power to secure group insurance coverage for
barangay workers; and noting the LGUs failure to comply with the requirement of
publication under Section 21 of Republic Act No. 9184 (Government Procurement
Reform Act).
The petitioner received a copy of the COA decision on December 14, 2012, and filed
its MR on January 14, 2013. However, the COA denied the motion, the denial being
received by the petitioner on July 14, 2014.
Hence, the petitioner filed the petition for certiorari on August 12, 2014, but was
dismissed through the resolution promulgated on August 19,2014 for (a) the late
filing of the petition; (b) the non-submission of the proof of service and verified
declaration; and (c) the failure to show grave abuse of discretion on the part of the
respondents.
ISSUE: Whether the fresh period rule enunciated in Neypes v. Court of Appeals
applies.
RULING: The petitioner posits that the fresh period rule applies because its Rule 64
petition is akin to a petition for review brought under Rule 42 of the Rules of Court;
hence, conformably with the fresh period rule, the period to file a Rule 64 petition
should also be reckoned from the receipt of the order denying the motion for
reconsideration or the motion for new trial.
The petitioners position cannot be sustained. There is no parity between the
petition for review under Rule 42 and the petition for certiorari under Rule 64.
As to the nature of the procedures, Rule 42 governs an appeal from the judgment or
final order rendered by the RTC in the exercise of its appellate jurisdiction. Such
appeal is on a question of fact, or of law, or of mixed question of fact and law, and is
given due course only upon a prima facie showing that the RTC committed an error
De Leon. Tan. Udarbe
of fact or law warranting the reversal or modification of the challenged judgment or
final order. In contrast, the petition for certiorari under Rule 64 is similar to the
petition for certiorari under Rule 65, and assails a judgment or final order of the
COMELEC, or the COA. The petition is not designed to correct only errors of
jurisdiction, not errors of judgment. Questions of fact cannot be raised except to
determine whether the COMELEC or the COA were guilty of grave abuse of
discretion amounting to lack or excess of jurisdiction.
The reglementary periods under Rule42 and Rule 64 are different. In the former, the
aggrieved party is allowed 15 days to file the petition for review from receipt of the
assailed decision or final order, or from receipt of the denial of a motion for new trial
or reconsideration. In the latter, the petition is filed within 30 days from notice of the
judgment or final order or resolution sought to be reviewed. The filing of a motion
for new trial or reconsideration, if allowed under the procedural rules of the
Commission concerned, interrupts the period; hence, should the motion be denied,
the aggrieved party may file the petition within the remaining period, which shall not
be less than five days in any event, reckoned from the notice of denial.
The petitioner filed its MR on January 14, 2013, which was 31 days after receiving
the assailed decision of the COA on December 14, 2012. Pursuant to Section 3 of
Rule 64, it had only five days from receipt of the denial of its motion for
reconsideration to file the petition. Considering that it received the notice of the
denial on July 14, 2014, it had only until July19, 2014 to file the petition. However, it
filed the petition on August 13, 2014, which was 25 days too late.
We ruled in Pates v. Commission on Elections that the belated filing of the petition
for certiorari under Rule 64 on the belief that the fresh period rule should apply was
fatal to the recourse. As such, the petitioner herein should suffer the same fate for
having wrongly assumed that the fresh period rule under Neypes applied. Rules of
procedure may be relaxed only to relieve a litigant of an injustice that is not
commensurate with the degree of his thoughtlessness in not complying with the
prescribed procedure. Absent this reason for liberality, the petition cannot be
allowed to prosper.
The petition for certiorari is also dismissible for its lack of merit.
The petitioner insists on having fully shown that the COA committed grave abuse of
discretion, to wit: (1) the challenged decision was rendered by a divided COA proper;
(2) the COA took almost a year before promulgating its decision, and more thana
SHHH Digests Special Proceedings 2016-2017
year in resolving the motion for reconsideration, in contravention of the express
mandate of the Constitution; (3) the resolution denying the motion for
reconsideration was made up of only two sentences; (4) the matter involved a novel
issue that called for an interpretation of the pertinent provisions of the Local
Government Code; and (5) in issuing the resolution, COA Commissioners Grace
Pulido-Tan and Heidi L. Mendoza made it appear that they knew the LGC better than
former Senator Aquilino Pimentel who offered an opinion on the matter.
Grave abuse of discretion implies such capricious and whimsical exercise of
judgment as to be equivalent to lack or excess of jurisdiction; in other words, power
is exercised in an arbitrary or despotic manner by reason of passion, prejudice, or
personal hostility; and such exercise is so patent or so gross as to amount to an
evasion of a positive duty or to a virtual refusal either to perform the duty enjoined
or to act at all in contemplation of law.
A close look indicates that the petition for certiorari did not sufficiently disclose how
the COA committed grave abuse of its discretion. To start with, the supposed delays
taken by the COA in deciding the appeal were neither arbitrary nor whimsical on its
part. Secondly, the mere terseness of the denial of the motion for reconsideration
was not a factor in demonstrating an abuse of discretion. And, lastly, the fact that
Senator Pimentel, even if he had been the main proponent of the Local Government
Codein the Legislature, expressed an opinion on the issues different from the COA
Commissioners own did not matter, for it was the latters adjudication that had any
value and decisiveness on the issues by virtue of their being the Constitutionally
officials entrusted with the authority for that purpose.
It is equally relevant to note that the COA denied the money claim of the petitioner
for the further reason of lack of sufficient publication as required by the Government
Procurement Act. In that light, the COA acted well within its authority in denying the
petitioners claim.
5. Tomas Osmea v. COA
GR. No. 188818
May 31, 2011
Doctrine: The reckoning date to count the remaining 12 days to file his Rule 64
petition should be counted from July 15, 2009, the date Osmea had actual
knowledge of the denial of his motion for reconsideration of the Decision of the COA
and given the opportunity to competently file an appeal thereto before the Court.
De Leon. Tan. Udarbe
Facts: The City of Cebu was to play host to the 1994 Palarong Pambansa (Palaro). In
preparation for the games, the City engaged the services of WT Construction, Inc.
(WTCI) and Dakay Construction and Development Company (DCDC) to construct and
renovate the Cebu City Sports Complex. Osmea, then city mayor, was authorized by
the Sangguniang Panlungsod (Sanggunian) of Cebu to represent the City and to
execute the construction contracts.
While the construction was being undertaken, Osmea issued a total of 20
Change/Extra Work Orders to WTCI, amounting to P35,418,142.42, and to DCDC,
amounting to P15,744,525.24. These Change/Extra Work Orders were not covered by
any Supplemental Agreement, nor was there a prior authorization from
the Sanggunian. Nevertheless, the work proceeded on account of the extreme
urgency and need to have a suitable venue for the Palaro. The Palaro was
successfully held at the Cebu City Sports Complex during the first six months of 1994.
Thereafter, WTCI and DCDC demanded payment for the extra work they performed
in the construction and renovation of the sports complex.
Thus, the extra work completed by WTCI and DCDC was not covered by the
necessary appropriation to effect payment, prompting them to file two separate
collection cases before the RTC. The RTC found the claims meritorious, and ordered
the City to pay for the extra work performed. The decisions in favor of WTCI and
DCDC were affirmed on appeal, subject to certain modifications as to the amounts
due, and have become final. To satisfy the judgment debts,
the Sanggunian finally passed the required appropriation ordinances.
During post-audit, the City Auditor issued 2 notices disallowing the payment of
litigation expenses, damages, and attorneys fees to WTCI and DCDC.[9] The City
Auditor held Osmea, the members of the Sanggunian, and the City Administrator
liable for the P2,514,255.40 and P102,015.00 awarded to WTCI and DCDC,
respectively, as damages, attorneys fees, and interest charges. These amounts, the
City Auditor concluded, were unnecessary expenses for which the public officers
should be held liable in their personal capacities pursuant to the law.
Osmea and the members of the Sanggunian sought reconsideration of the
disallowance with the COA Regional Office, which, through a 2nd Indorsement dated
April 30, 2003,[10] modified the City Auditors Decision by absolving the members of
the sanggunian from any liability. It declared that the payment of the amounts
awarded as damages and attorneys fees should solely be Osmeas liability, as it was
him who ordered the change or extra work orders without the supplemental
agreement required by law, or the prior authorization from the Sanggunian.
The Sanggunian members cannot be held liable for refusing to enact the necessary
ordinance appropriating funds for the judgment award because they are supposed
SHHH Digests Special Proceedings 2016-2017
to exercise their own judgment and discretion in the performance of their functions;
they cannot be mere rubber stamps of the city mayor.
The COA Regional Offices Decision was sustained by the COAs National Director for
Legal and Adjudication (Local Sector) in a Decision dated January 16, 2004.[11] Osmea
filed an appeal against this Decision.
COA issued the assailed Decision which affirmed the notices of disallowance. The COA
denied Osmeas motion via a Resolution.
Rule 64 of the Rules of Court governs the procedure for the review of judgments and
final orders or resolutions of the Commission on Elections and the COA. Section 3 of
the same Rule provides for a 30-day period, counted from the notice of the
judgment or final order or resolution sought to be reviewed, to file the petition
for certiorari. The Rule further states that the filing of a motion for reconsideration
of the said judgment or final order or resolution interrupts the 30-day period.
Osmea filed his motion for reconsideration, of the COAs May 6, 2008 Decision, 18
days from his receipt thereof, leaving him with 12 days to file a Rule 64 petition
against the COA ruling. He argues that the remaining period should be counted not
from the receipt of the COAs June 8, 2009 Resolution by the Office of the Mayor of
Cebu City on June 29, 2009, but from the time he officially reported back to his office
on July 15, 2009, after his trip abroad. Since he is being made liable in his personal
capacity, he reasons that the remaining period should be counted from his actual
knowledge of the denial of his motion for reconsideration. Corollary, he needed time
to hire a private counsel who would review his case and prepare the petition.
Issue: WON the remaining period should be counted from the time he was back to
his office
Held: Yes. Several times in the past, we emphasized that procedural rules should be
treated with utmost respect and due regard, since they are designed to facilitate the
adjudication of cases to remedy the worsening problem of delay in the resolution of
rival claims and in the administration of justice. Where strong considerations of
substantive justice are manifest in the petition, this Court may relax the strict
application of the rules of procedure in the exercise of its legal jurisdiction.
Osmea cites the mandatory medical check-ups he had to undergo
in Houston, Texas after his cancer surgery in April 2009 as reason for the delay in
filing his petition for certiorari. Due to his weakened state of health, he claims that
he could not very well be expected to be bothered by the affairs of his office and had
to focus only on his medical treatment. He could not require his office to attend to
the case as he was being charged in his personal capacity.
De Leon. Tan. Udarbe
We find Osmeas reasons sufficient to justify a relaxation of the Rules. Although the
service of the June 8, 2009 Resolution of the COA was validly made on June 29, 2009
through the notice sent to the Office of the Mayor of Cebu City, we consider July 15,
2009 the date he reported back to office as the effective date when he was actually
notified of the resolution, and the reckoning date of the period to appeal. If we were
to rule otherwise, we would be denying Osmea of his right to appeal the Decision of
the COA, despite the merits of his case.
Moreover, a certiorari petition filed under Rule 64 of the Rules of Court must be
verified, and a verification requires the petitioner to state under oath before an
authorized officer that he has read the petition and that the allegations therein are
true and correct of his personal knowledge. Given that Osmea was out of the
country to attend to his medical needs, he could not comply with the requirements
to perfect his appeal of the Decision of the COA.
While the Court has accepted verifications executed by a petitioners counsel who
personally knows the truth of the facts alleged in the pleading, this was an
alternative not available to Osmea, as he had yet to secure his own counsel. Osmea
could not avail of the services of the City Attorney, as the latter is authorized to
represent city officials only in their official capacity. The COA pins liability for the
amount of damages paid to WTCI and DCDC on Osmea in his personal capacity,
pursuant to Section 103 of Presidential Decree No. 1445 (PD 1445).[18]
Thus, the reckoning date to count the remaining 12 days to file his Rule 64 petition
should be counted from July 15, 2009, the date Osmea had actual knowledge of the
denial of his motion for reconsideration of the Decision of the COA and given the
opportunity to competently file an appeal thereto before the Court. The present
petition, filed on July 27, 2009, was filed within the reglementary period.
6. Pormento v. Estrada
G.R. No. 191988
August 31, 2010
Doctrine: one of the essential requisites for the exercise of the power of judicial
review, the existence of an actual case or controversy, is sorely lacking in this case.
Facts: The petition asks whether private respondent Joseph Ejercito Estrada is
covered by the ban on the President from any reelection. Private respondent was
elected President of the Republic of the Philippines in the general elections held on
May 11, 1998. He sought the presidency again in the general elections held on May
10, 2010. Petitioner Atty. Evillo C. Pormento opposed private respondents candidacy
SHHH Digests Special Proceedings 2016-2017 De Leon. Tan. Udarbe
and filed a petition for disqualification. However, his petition was denied by the
Second Division of public respondent Commission on Elections (COMELEC). His
motion for reconsideration was subsequently denied by the COMELEC en banc.

Petitioner filed the instant petition for certiorari on May 7, 2010. However, under
the Rules of Court, the filing of such petition would not stay the execution of the
judgment, final order or resolution of the COMELEC that is sought to be reviewed.

Private respondent was not elected President the second time he ran.

Issue: What is the proper interpretation of the following provision of Section 4,

Article VII of the Constitution: [t]he President shall not be eligible for any reelection?

Held: Since the issue on the proper interpretation of the phrase any reelection will
be premised on a persons second (whether immediate or not) election as President,
there is no case or controversy to be resolved in this case. No live conflict of legal
rights exists. There is in this case no definite, concrete, real or substantial
controversy that touches on the legal relations of parties having adverse legal
interests. No specific relief may conclusively be decreed upon by this Court in this
case that will benefit any of the parties herein. As such, one of the essential
requisites for the exercise of the power of judicial review, the existence of an actual
case or controversy, is sorely lacking in this case.
As a rule, this Court may only adjudicate actual, ongoing controversies. The Court is
not empowered to decide moot questions or abstract propositions, or to declare
principles or rules of law which cannot affect the result as to the thing in issue in the
case before it. In other words, when a case is moot, it becomes non-justiciable.
An action is considered moot when it no longer presents a justiciable controversy
because the issues involved have become academic or dead or when the matter in
dispute has already been resolved and hence, one is not entitled to judicial
intervention unless the issue is likely to be raised again between the parties. There is
nothing for the court to resolve as the determination thereof has been overtaken by
subsequent events.

Assuming an actual case or controversy existed prior to the proclamation of a

President who has been duly elected in the May 10, 2010 elections, the same is no
longer true today. Following the results of that elections, private respondent was not
elected President for the second time. Thus, any discussion of his reelection will
simply be hypothetical and speculative. It will serve no useful or practical purpose.