1.
Tano v Socrates
Held:
Supreme Court is not possessed of original jurisdiction over petitions for
declaratory relief even if only questions of law are involved.As to the
second set of petitioners, the instant petition is obviously one for
DECLARATORY RELIEF, i.e., for a declaration that the Ordinances in
question are a nullity. . . for being unconstitutional. As such, their
petition must likewise fail, as this Court is not possessed of original
jurisdiction over petitions for declaratory relief even if only questions of
law are involved, it being settled that the Court merely exercises
appellate jurisdiction over such petitions.
2. Mike Velarde vs. Social Justice Society
Doctrine: Decision, more specifically a decision not conforming to the form
and substance required by the Constitution is void and deemed legally
inexistent (Panganiban)
Facts:
-On January 28, 2003, SJS filed a Petition for Declaratory Relief before the
RTC-Manila against Velarde and his co-respondents Eminence, Jaime
Cardinal Sin, Executive Minister Erao Manalo, Brother Eddie Villanueva and
Brother Eliseo F. Soriano.
-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 petitioner filed a Motion to dismiss before the trial court owing to the
fact that alleged that the questioned SJS Petition did not state a cause of
action and that there was no justiciable controversy.
-The trial courts junked the Velarde petitions under certain reasons:
1. It said that it had jurisdiction over the SJS petition, because in praying for
a determination as to whether the actions imputed to the respondents were
violative of Article II, Section 6 of the Fundamental Law, the petition has
raised only a question of law.
2. 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 discourse, the court
quipped at some point that the "endorsement of specific candidates in an
election to any public office is a clear violation of the separation clause."
-The trial courts essay did not contain a statement of facts and a dispositive
portion, however. Due to this aberration, Velarde and Soriano filed separate
Motions for Reconsideration before the trial court owing to these facts.
-The lower court denied these Motions. Hence, this petition for review.
On April 13, 2004, the Court en banc conducted an Oral Argument.
-In his Petition, Brother Mike Velarde submits the following issues for this
Courts resolution:
1. Whether or not the Decision dated 12 June 2003 rendered by the court a
quo was proper and valid;
2. Whether or not there exists justiciable controversy in herein respondents
Petition for declaratory relief;
3. Whether or not herein respondent has legal interest in filing the Petition
for declaratory relief;
4. Whether or not the constitutional question sought to be resolved by
herein respondent is ripe for judicial determination;
5. Whether or not there is adequate remedy other than the declaratory
relief; and,
6. Whether or not the court a quo has jurisdiction over the Petition for
declaratory relief of herein respondent.
Issues:
In its oral argument, the Supreme Court condensed Velardes issues and
divided it into 2 groups:
A. Procedural Issues
1. Did the Petition for Declaratory Relief raise a justiciable controversy?
2. Did it state a cause of action?
3.Did respondent have any legal standing to file the Petition for Declaratory
Relief?
B. Substantive Issues
1. Did the RTC Decision conform to the form and substance required by the
Constitution, the law and the Rules of Court?
2. May religious leaders like herein petitioner, Bro. Mike Velarde, be
prohibited from endorsing candidates for public office? Corollarily, may they
be banned from campaigning against said candidates? (Not answered in the
affirmative)
Decision:
Petition for Review GRANTED. The assailed June 12, 2003 Decision and July
29, 2003 Order of the Regional Trial Court of Manila DECLARED NULL AND
VOID and thus SET ASIDE. The SJS Petition for Declaratory Relief is
DISMISSED for failure to state a cause of action.
Holding:
Procedural Issues:
1. NO. A justiciable controversy to an existing case or controversy
that is appropriate or ripe for judicial determination, not one that is
conjectural or merely anticipatory. A 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.
The SJS Petition fell short of the requirements to constitute a justiciable
controversy. Why?
a. It stated no ultimate facts. The petition simply theorized that the people
elected who were endorsed by these religious leaders might become
beholden to the latter.
b. It did not sufficiently state a declaration of its rights and duties, 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,
c. The petition did not pray for a stoppage of violated rights (duh, wala
ngang rights na sinabi eh). It merely sought an opinion of the trial court.
However, courts are proscribed from rendering an advisory opinion.
(tantamount to making laws, remember the questionability of justice
panganibans guidelines for article 36 of the family code)
It must also be considered that even the religious leaders were puzzled as to
the breach of rights they were claimed to have committed. As pointed out
by Soriano, what exactly has he done that merited the attention of SJS?
Jaime Cardinal Sin adds that the election season had not even started at the
time SJS filed its Petition and that he has not been actively involved in
partisan politics. 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, a particular
candidate. It is a time-honored rule that sheer speculation does not give rise
to an actionable right.
2. NO. 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. (Rebollido v.
Court of Appeals, 170 SCRA 800)
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.
The court held that the complaints failure to state a cause of action became
a ground for its outright dismissal. Why?
The Court found nothing in the SJS Petition to suggest that an explicit
allegation of fact that SJS had a legal right to protect. (trigger for the cause
of action)
In special civil actions for declaratory relief, the concept of 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.
The justices could only infer that the interest from its allegation was its
mention of its (SJS) thousands of members who are citizens-taxpayers-
registered voters and who are keenly interested. Aside from the fact that
this general averment did not constitute a legal right or interest, the courts
inferred interest was too vague and speculative in character. Rules require
that the interest must be material to the issue and affected by the
questioned act or instrument.
To bolster its point, the SJS cited the Corpus Juris Secundum and submitted
that the plaintiff in a declaratory judgment action does not seek to enforce a
claim against the defendant, but sought a judicial declaration of the rights of
the parties for the purpose of guiding their future conduct, and the essential
distinction between a declaratory judgment action and the usual action is
that no actual wrong need have been committed or loss have occurred in
order to sustain the declaratory judgment action, although there must be
no uncertainty that the loss will occur or that the asserted rights will be
invaded.

During the Oral Argument, Velarde and co-respondents strongly asserted
that they had not in any way engaged or intended to participate in partisan
politics. Not even the alleged proximity of the elections to the time the
Petition was filed below would have provided the certainty that it had a
legal right that would be jeopardized or violated by any of those
respondents.
Even if the SJS petition asserted a legal right, there was nevertheless no
certainty that such right would be invaded by the said respondents.
3. NO. 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.
SJS has no legal interest in the controversy and 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 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.
If the petition were to be valid, it should satisfy:
First, parties suing as taxpayers must specifically prove that they have
sufficient interest in preventing the illegal expenditure of money raised by
taxation, particularly that of Congress' taxing power.
Second, there was no showing in the Petition for Declaratory Relief that SJS
as a political party or its members as registered voters would be adversely
affected by the alleged acts of the respondents below, such as the
deprivation of votes or barring of suffrage to its constituents.
Finally, the allegedly keen interest of its "thousands of members who are
citizens-taxpayers-registered voters" is too general and beyond the
contemplation of the standards set by our jurisprudence. Not only is the
presumed interest impersonal in character; it is likewise too vague, highly
speculative and uncertain to satisfy the requirement of standing.
In not a few cases, the Court has liberalized the locus standi requirement
when a petition raises an issue of transcendental significance or importance
to the people (IBP v Zamora). The Court deemed the constitutional issue
raised to be both transcendental in importance and novel in nature.
Nevertheless, the barren allegations in the SJS Petition as well as the
abbreviated proceedings in the court would prevent the resolution of the
transcendental issue.
Substantive Issues
1. NO. The Constitution commands that no decision shall be
rendered by any court without expressing therein clearly and distinctly the
facts and the law on which it is based. No petition for review or motion for
reconsideration of a decision of the court shall be refused due course or
denied without stating the basis therefor.
Consistent with this are Section 1 of Rule 36 of the Rules on Civil Procedure,
Rule 120 of the Rules of Court on Criminal Procedure, Administrative
Circular No. 1. which states that :
A judgment or final order determining the merits of the case shall be
rendered. The decision shall be in writing, personally and directly prepared
by the judge, stating clearly and distinctly the facts and law on which it is
based, signed by the issuing magistrate, and filed with the clerk of court.
The SC has reminded magistrates to heed the demand of Section `4, Art VIII
of the Constitution. This was evinced in Yao v. Court of Appeals where
Davide, CJ said that faithful adherence to the requirements of Section 14,
Article VIII of the Constitution is indisputably a paramount component of
due process and fair play.
In People v. Bugarin, the court held that the requirement that the decisions
of courts must be in writing and that they must set forth clearly and
distinctly the facts and the law on which they are based is intended, among
other things, to inform the parties of the reason or reasons for the decision
so that if any of them appeals, he can point out to the appellate court the
finding of facts or the rulings on points of law with which he disagrees.
The assailed Decision contains no statement of facts (much less an
assessment or analysis thereof) or of the courts findings as to the probable
facts. The assailed Decision begins with a statement of the nature of the
action and the question or issue presented. Then follows a brief
explanation of the constitutional provisions involved, and what the Petition
sought to achieve. Thereafter, the ensuing procedural incidents before the
trial court are tracked. The Decision proceeds to a full-length opinion on the
nature and the extent of the separation of church and state. Without
expressly stating the final conclusion she has reached or specifying the relief
granted or denied, the trial judge ends her Decision with the clause SO
ORDERED.
A decision that does not clearly and distinctly state the facts and the law on
which it is based leaves the parties in the dark as to how it was reached and
is precisely prejudicial to the losing party, who is unable to pinpoint the
possible errors of the court for review by a higher tribunal. More than that,
the requirement is an assurance to the parties that, in reaching judgment,
the judge did so through the processes of legal reasoning.
It was truly obvious that the RTCs Decision did not adhere to the Bugarin
precedent because of its failure to express clearly and distinctly the facts on
which it was based. The significance of factual findings lies in the value of
the decision as a precedent (how will the ruling be applied in the future, if
there is no point of factual comparison?).
Respondent SJS insisted that the dispositive portion can be found in the
body (p. 10) of the assailed Decision. Stating Endorsement of specific
candidates in an election to any public office is a clear violation of the
separation clause.
The Court held that the statement is merely an answer to a hypothetical
legal question and just a part of the opinion of the trial court. It does not
conclusively declare the rights (or obligations) of the parties to the Petition.
Neither does it grant any -- much less, the proper -- relief under the
circumstances, as required of a dispositive portion.
The standard for a dispositive was set in Manalang v. Tuason de Rickards
where the resolution of the Court on a given issue as embodied in the
dispositive part of the decision or order is the investitive or controlling
factor that determines and settles the rights of the parties and the
questions presented therein, notwithstanding the existence of statements
or declaration in the body of said order that may be confusing.
In Magdalena Estate, Inc. v. Caluag: The rule is settled that where there is a
conflict between the dispositive part and the opinion, the former must
prevail over the latter on the theory that the dispositive portion is the final
order while the opinion is merely a statement ordering nothing.
The statement quoted by SJS does not conclusively declare the rights (or
obligations) of the parties to the Petition. Neither does it grant proper relief
under the circumstances, as required of a dispositive portion.
Failure to comply with the constitutional injunction is a grave abuse of
discretion amounting to lack or excess of jurisdiction. Decisions or orders
issued in careless disregard of the constitutional mandate are a patent
nullity and must be struck down as void.
2. It is not legally possible to take up, on the merits, the
paramount question involving a constitutional principle. It is a time-honored
rule that the constitutionality of a statute or act will be passed upon only if,
and to the extent that, it is directly and necessarily involved in a justiciable
controversy and is essential to the protection of the rights of the parties
concerned. (So no answer)
3. Almeda vs. Bathala Marketing Industries,Inc.
FACTS: Respondent Bathala Marketing Industries renewed its contract of
lease with Ponciano Almeda, the father of Romel Almeda and the husband
of Eufemia, who are the petitioners in this case. The contract of lease
contains the following provisions which give rise to the instant case, to wit:
SIXTH - It is expressly understood by the parties hereto that the rental rate
stipulated is based on the present rate of assessment on the property, and
that in case the assessment should hereafter be increased or any new tax,
charge or burden be imposed by authorities on the lot and building where
the leased premises are located, LESSEE shall pay, when the rental herein
provided becomes due, the additional rental or charge corresponding to the
portion hereby leased; provided, however, that in the event that the
present assessment or tax on said property should be reduced, LESSEE shall
be entitled to reduction in the stipulated rental, likewise in proportion to
the portion leased by him;
SEVENTH - In case an extraordinary inflation or devaluation of Philippine
Currency should supervene, the value of Philippine peso at the time of the
establishment of the obligation shall be the basis of payment;
During the effectivity of the contract, Ponciano died. Petitioners therein in a
letter, advised respondent Bathala that it would be assessed and collect VAT
from its monthly rentals. In response, Bathala contend that VAT may not be
imposed as the rentals fixed on the contact of lease were supposed to
include VAT, in lieu that their contract was established when the VAT law
has been effected. However, respondent received another letter from the
petitioners informing the former that its monthly rental should be increased
by 73% pursuant to condition no. 7 of the contact and Article 1250 of the
civil code. Bathala opposed the said increased arguing that there was no
extraordinary inflation to warrant the application of the said Article. Hence,
respondent Bathala instituted an action for declaratory relief to determine
the correct interpretation of the conditions no. 6 and 7 of the contract of
lease. In turn, petitioners instituted an action for ejectment, rescission and
damages against respondent for failure to heed the demand to vacate the
premises. In addition, they moved to dismiss the action for declaratory relief
since respondent already breach the obligation and the case would not end
the litigation and settle the rights of the parties. The RTC ruled in favor of
Bathala. On appeal, the Court of Appeals affirmed the trial courts decision.
Hence, the matter was raised before the Supreme Court.
ISSUE: Whether or not declaratory relief was proper considering that
Bathala was in breach of obligation when it filed the action before the trail
court?
HELD: YES. Petitioners insists that respondent was already in breach of the
contract when the petition was filed. We do not agree. After petitioners
demanded payment of adjusted rentals and in the months that followed,
respondent complied with the terms and conditions set forth in their
contract of lease by paying the rentals stipulated therein. Respondent
religiously fulfilled its obligations to petitioners even during the pendency of
the present suit. There is no showing that respondent committed an act
constituting a breach of the subject contract of lease. Thus, respondent is
not barred from instituting before the trial court the petition for declaratory
relief.
A. Requisites of Declaratory Relief:
Decisional law enumerates the requisites of an action for declaratory relief,
as follows:
1) the subject matter of the controversy must be a deed, will, contract or
other written instrument, statute, executive order or regulation, or
ordinance;
2) the terms of said documents and the validity thereof are doubtful and
require judicial construction;
3) there must have been no breach of the documents in question;
4) there must be an actual justiciable controversy or the "ripening seeds" of
one between persons whose interests are adverse;
5) the issue must be ripe for judicial determination; and
6) adequate relief is not available through other means or other forms of
action or proceeding.
B. On the issue on the separate actions instituted by the petitioners:
Petitioners claim that the instant petition is not proper because a separate
action for rescission, ejectment and damages had been commenced before
another court; thus, the construction of the subject contractual provisions
should be ventilated in the same forum.
We are not convinced.
It is true that in Panganiban v. Pilipinas Shell Petroleum Corporation we held
that the petition for declaratory relief should be dismissed in view of the
pendency of a separate action for unlawful detainer. However, we cannot
apply the same ruling to the instant case. In Panganiban, the unlawful
detainer case had already been resolved by the trial court before the
dismissal of the declaratory relief case; and it was petitioner in that case
who insisted that the action for declaratory relief be preferred over the
action for unlawful detainer. Conversely, in the case at bench, the trial court
had not yet resolved the rescission/ejectment case during the pendency of
the declaratory relief petition. In fact, the trial court, where the rescission
case was on appeal, itself initiated the suspension of the proceedings
pending the resolution of the action for declaratory relief.
We are not unmindful of the doctrine enunciated in Teodoro, Jr. v. Mirasol
where the declaratory relief action was dismissed because the issue therein
could be threshed out in the unlawful detainer suit. Yet, again, in that case,
there was already a breach of contract at the time of the filing of the
declaratory relief petition. This dissimilar factual milieu proscribes the Court
from applying Teodoro to the instant case.
Given all these attendant circumstances, the Court is disposed to entertain
the instant declaratory relief action instead of dismissing it, notwithstanding
the pendency of the ejectment/rescission case before the trial court. The
resolution of the present petition would write finis to the parties' dispute, as
it would settle once and for all the question of the proper interpretation of
the two contractual stipulations subject of this controversy
4.Kawasaki Port Service Corp v Amores
Doctrine: An action purely for injunction is a personal action as well as an
action in personam. As a personal action, personal or substituted service of
summons upon the defendant, not extra territorial service, is necessary to
confer jurisdiction upon the Court over the defendant
Facts:
C.F Sharp Kabushiki (Kabushiki) incurred several obligations from
several creditors, including petitioners herein
C.F. Sharp & Co (CF Sharp) anticipated that the creditors of
Kabushiki will run after it
Hence, C.F. Sharp prayed for injunctive relief against the
petitioners' demand for the payment of C.F. Sharp Kabushiki
Kaisha's liabilities
C.F. Sharp alleged that it is separate and distinct from Kabushiki.
That the former is organized and existing under the laws of the
Philippines while the latter is under the laws of Japan.
o That it had no participation whatsoever or liability in
connection with the transactions between the latter and
the defendants.
CF Sharp also prayed for declaratory relief that it is separate and
independent corporation, it is not liable for the obligations and
liabilities of Kabushiki. (Note: not available according to the court
as no action in court has yet been filed by the creditors)
As the creditor-defendants are non-residents, without business
addresses in the Philippines but in Japan, CF Sharp asked the court
to effect extraterritorial service of summons.
Judge Amores authorized the extraterritorial service of summons on
creditors
Naturally, the creditors opposed and filed "Special Appearance to
Question Jurisdiction of This Honorable Court Over Persons of
Defendants"
o Alleged that lower court does not and cannot acquire
jurisdiction over the persons of defendants on the grounds
that private respondent's action does not refer to its
personal status
o The action does not have for subject matter property
contemplated in Section 17 of Rule 14 of the Rules of Court,
that the action does not pray that defendants be excluded
from any interest or property in the Philippines;
o And that no property of the defendants has been attached
o Action is in personam; and that the action does not fall
within any of the four cases mentioned in Section 17, Rule
14 of the Rules of Court.
Defense: affects status of CF Sharp and liability for Kabushikis
indebtedness
ISSUE: Whether or not private respondents complaint for injunction
and/or declaratory relief is within the purview of the provisions of
Section 17, Rule 14 of the Rules of Court.
HELD:
The prevailing rule is that where a declaratory
judgment as to a disputed fact would be determinative
of issues rather than a construction of definite stated
rights, status and other relations, commonly expressed
in written instrument, the case is not one for
declaratory judgment.
Thus, considering the nature of a proceeding for declaratory
judgment, wherein relief may be sought only to declare rights
and not to determine or try issues, there is more valid reason to
adhere to the principle that a declaratory relief proceeding is
unavailable where judgment would have to be made, only after
a judicial investigation of disputed issues
Private respondent alleges that most if not all, of the petitioners
have merely demanded or have attempted to demand from the
former the payment of the obligations of C.F. Sharp K.K. (Rollo,
 p. 63). Otherwise stated, there is no action relating to or the
subject of which are the properties of the defendants in the
Philippines for it is beyond dispute that they have none in this
jurisdiction nor can it be said that they have claimed any lien or
interest, actual or contingent over any property herein, for as
above stated, they merely demanded or attempted to demand
from private respondent payment of the monetary obligations
of C.F. Sharp K.K. No action in court has as yet ensued.
Finally, the alternative relief sought is injunction, that is to
enjoin petitioners from demanding from private respondent the
payment of the obligations of C.F. Sharp K.K.
Where the complaint does not involve the personal status of
plaintiff, nor any property in the Philippines in which
defendants have or claim an interest, or which the plaintiff has
attached, but purely an action for injunction, it is a personal
action as well as an action in personam, not an action in rem or
quasi in rem. As a personal action, personal or substituted
service of summons on the defendants, not extraterritorial
service, is necessary to confer jurisdiction on the court. In an
action for injunction, extra-territorial service of summons and
complaint upon the non-resident defendants cannot subject
them to the processes of the regional trial courts which are
powerless to reach them outside the region over which they
exercise their authority. Extra- territorial service of summons
will not confer on the court jurisdiction or power to compel
them to obey its orders.
5. Tambunting v Spouses Sumabat
Facts: Spouses Sumabat and Baello were the registered land owners of a
parcel of land in Caloocan. In May 1973, and in order to obtain a P7,727.95
loan from petitioner Tambunting, the spouses mortgaged said land to the
former. Subsequently, Tambunting assigned his rights to the mortgaged to
Commercial House Finance (CHFI). And because respondent spouses have
not been paying their monthly amortizations, they were informed that their
indebtedness has ballooned to P15k.
And so, CHFI and Tambunting filed a case for foreclosure but was restrained
by Branch 33 of the RTC of Caloocan. The reason for the restraint was
because the respondents were able to file an action for declaratory relief
with said RTC. In their action, respondents were praying that the court rule
on the extent or amount of their actual indebtedness.
In said RTC case, which was filed March 1979, herein petitioners were
declared in default. Thus, even when the Tambunting, et al moved for the
dismissal of the case on the ground that mortgaged deed/contract had
already been breached prior to the action, said motion was denied for
having been filed out of time.
On Jan. 1981, the RTC rendered a decision finding that respondents liability,
by virtue of their mortgage deed/contract, was P15,743.83. Pursuant to this
decision, the respondents made a consignation with the RTC in said amount.
After almost 14 years, or on Feb 1995, CHFI again foreclosed on the
contested land. The respondents came to know of this because they
received a notice of foreclosure sale, to be conducted by the sheriff, of the
land in question
This time, the petitioners filed an action with Branch 120 of the RTC of
Caloocan for injunction against the foreclosure sale. But, the sale still
pushed thru, with CHFI being declared the highest bidder. A new TCT was
then issued to CHFI. Thus, respondent spouses amended their complaint to
an action for nullification of the foreclosure/sheriffs sale, the new TCT of
CHFI, as well as reconveyance.
On Feb 2000, Branch 120 of the RTC declared the foreclosure sale as void. It
likewise ruled that reconveyance of the property should be made to the
respondents. This decision was grounded on the fact that consignation of
P15k has already been made by CHFI pursuant to the earlier decision of the
Branch 33 of the RTC.
After a denial of petitioners MR, they filed petition for review on certiorari
with the SC. The petitioners argued that RTC, Branch 33, erred when it
ordered the consignation of P15k. As earlier pointed out, the action in first
case was for declaratory relief. But petitioner points out the fact that
respondents are not entitled anymore to file an action for declaratory relief
because there had already been a violation of the mortgaged contract when
the spouses defaulted on their amortizations. Furthermore the action for
foreclosure by CHFI on 1995 has already prescribed
ISSUES:
1. Was the decision of Branch 120 of the RTC wrong when it ordered the
nullification of the foreclosure sale on the ground that consignation has
already been made in a previous case?
2. Was the foreclosure action in 1995 and subsequent sale of the property
already barred by prescription?
3. Thus, should the action for nullification and reconveyance filed by the
respondents be dismissed?
HELD: The trial court erred when it affirmed the validity of the
consignation. The RTC should have been 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.
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. 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.
Nonetheless, the petition must fail.
Article 1142 of the Civil Code is clear. A mortgage action prescribes after ten
years.
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.
A. Nature of Declaratory Relief:
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.
B. Purpose of Declaratory Relief:
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.
6. Executive Secretary v Southwing Heavy Industries
FACTS:
The instant consolidated petitions seek to annul and set aside the Decisions
of the Regional Trial Court of Olongapo City and Decision of the Court of
Appeals which declared Article 2, Section 3.1 of Executive Order No. 156 (EO
156) unconstitutional. Said executive issuance prohibits the importation
into the country, inclusive of the Special Economic and Freeport Zone or the
Subic Bay Freeport (SBF or Freeport), of used motor vehicles, subject to a
few exceptions.
The undisputed facts show that on December 12, 2002, President Gloria
Macapagal-Arroyo, through Executive Secretary Alberto G. Romulo, issued
EO 156, entitled PROVIDING FOR A COMPREHENSIVE INDUSTRIAL POLICY
AND DIRECTIONS FOR THE MOTOR VEHICLE DEVELOPMENT PROGRAM AND
ITS IMPLEMENTING GUIDELINES. The challenged provision states:
The issuance of EO 156 spawned three separate actions for
declaratory relief before Branch 72 of the Regional Trial Court of Olongapo
City, all seeking the declaration of the unconstitutionality of Article 2,
Section 3.1 of said executive order. The cases were filed by herein
respondent entities, who or whose members, are classified as Subic Bay
Freeport Enterprises and engaged in the business of, among others,
importing and/or trading used motor vehicles.
G.R. No. 164171: On January 16, 2004, respondents Southwing Heavy
Industries, Inc., (SOUTHWING) United Auctioneers, Inc. (UNITED
AUCTIONEERS), and Microvan, Inc. (MICROVAN), instituted a declaratory
relief case docketed as Civil Case No. 20-0-04, against the Executive
Secretary, Secretary of Transportation and Communication, Commissioner
of Customs, Assistant Secretary and Head of the Land Transportation Office,
Subic Bay Metropolitan Authority (SBMA), Collector of Customs for the Port
at Subic Bay Freeport Zone, and the Chief of the Land Transportation Office
at Subic Bay Freeport Zone. SOUTHWING, UNITED AUCTIONEERS and
MICROVAN prayed that judgment be rendered (1) declaring Article 2,
Section 3.1 of EO 156 unconstitutional and illegal; (2) directing the Secretary
of Finance, Commissioner of Customs, Collector of Customs and the
Chairman of the SBMA to allow the importation of used motor vehicles; (2)
ordering the Land Transportation Office and its subordinates inside the
Subic Special Economic Zone to process the registration of the imported
used motor vehicles; and (3) in general, to allow the unimpeded entry and
importation of used motor vehicles subject only to the payment of the
required customs duties.
G.R. No. 164172: On January 20, 2004, respondent Subic Integrated Macro
Ventures Corporation (MACRO VENTURES) filed with the same trial court, a
similar action for declaratory relief docketed as Civil Case No. 22-0-04, with
the same prayer and against the same parties as those in Civil Case No. 20-
0-04. In this case, the trial court likewise rendered a summary judgment on
May 24, 2004, holding that Article 2, Section 3.1 of EO 156, is repugnant to
the constitution. Elevated to this Court via a petition for review on
certiorari, Civil Case No. 22-0-04 was docketed as G.R. No. 164172.
G.R. No. 168741. On January 22, 2003, respondent Motor Vehicle Importers
Association of Subic Bay Freeport, Inc. (ASSOCIATION), filed another action
for declaratory relief with essentially the same prayer as those in Civil Case
No. 22-0-04 and Civil Case No. 20-0-04, against the Executive Secretary,
Secretary of Finance, Chief of the Land Transportation Office, Commissioner
of Customs, Collector of Customs at SBMA and the Chairman of SBMA. This
was docketed as Civil Case No. 30-0-2003, before the same trial court.
ISSUE:
Whether Article 2, Section 3.1 of Executive Order No. 156 (EO 156)
unconstitutional.
HELD:
o The established rule that the constitutionality of a law or
administrative issuance can be challenged by one who will sustain a
direct injury as a result of its enforcement has been satisfied in the
instant case. The broad subject of the prohibited importation is all
types of used motor vehicles. Respondents would definitely suffer
a direct injury from the implementation of EO 156 because their
certificate of registration and tax exemption authorize them to
trade and/or import new and used motor vehicles and spare parts,
except used cars. Other types of motor vehicles imported and/or
traded by respondents and not falling within the category of used
cars would thus be subjected to the ban to the prejudice of their
business. Undoubtedly, respondents have the legal standing to
assail the validity of EO 156.
o As to the propriety of declaratory relief as a vehicle for assailing the
executive issuance, suffice it to state that any breach of the rights of
respondents will not affect the case. In Commission on Audit of the
Province of Cebu v. Province of Cebu, 371 SCRA 196 (2001), the
Court entertained a suit for declaratory relief to finally settle the
doubt as to the proper interpretation of the conflicting laws
involved, notwithstanding a violation of the right of the party
affected. We find no reason to deviate from said ruling mindful of
the significance of the present case to the national economy.
o The Court finds that Article 2, Section 3.1 of EO 156 is void insofar
as it is made applicable to the presently secured fenced-in former
Subic Naval Base area as stated in Section 1.1 of EO 97-A.
Pursuant to the separability clause of EO 156, Section 3.1 is declared
valid insofar as it applies to the customs territory or the Philippine
territory outside the presently secured fenced-in former Subic Naval
Base area as stated in Section 1.1 of EO 97-A. Hence, used motor
vehicles that come into the Philippine territory via the secured
fenced-in former Subic Naval Base area may be stored, used or
traded therein, or exported out of the Philippine territory, but they
cannot be imported into the Philippine territory outside of the
secured fenced-in former Subic Naval Base area.
7. Martelino v NHMF Corp
FACTS:
Petitioners filed a petition for declaratory relief and prohibition with
urgent prayer for the issuance of a TRO and/or preliminary injunction filed
before the RTC of Caloocan City against the NHMFC and HDMF and Sheriff
Alberto A. Castillo.
Petitioners alleged that they obtained housing loans from
respondents who directly released the proceeds to the subdivision
developer, Shelter Philippines, Inc. (Shelter).
o However, Shelter failed to complete the subdivision according to
the subdivision plan. Petitioners spent their own resources to improve the
subdivision roads and alleys, and to install individual water facilities.
o Respondents failed to ensure Shelters completion of the
subdivision.
o Respondent ignored their right to suspend amortization
payments for Shelters failure to complete the subdivision, charged interests
and penalties on their outstanding loans, threatened to foreclose their
mortgages and initiated foreclosure proceedings against petitioner Rafael
Martelino.
o Hence, they prayed that respondents be restrained from foreclosing
their mortgages.
The RTC set the PI hearing, but said order, including the summons
and petition, were served only on the NHMFC and Sheriff Castillo.
Subsequently, the RTC ordered that a writ of preliminary injunction be
issued restraining the respondents from foreclosing the mortgages on
petitioners houses.
RTCs RULING: In dismissing the case, the RTC ruled that the issue
of non-completion of the subdivision should have been brought before the
HLURB. It also ruled that no judicial declaration can be made because the
petition was vague. The RTC assumed that the subject of the petition was
Republic Act No. 8501 (Housing Loan Condonation Act of 1998) which was
cited by petitioners. But the RTC pointed out that petitioners failed to state
which section of the law affected their rights and needed judicial
declaration. Moreover, the RTC noted that respondents still foreclosed
their mortgages, a breach of said law which rendered the petition for
declaratory relief improper. The proper remedy was an ordinary civil action.
The Court of Appeals affirmed the RTC Order.
ISSUES: Whether or not
(1) The preliminary injunction order against the HDMF is valid NO
(2) The petition for declaratory relief and prohibition was properly
dismissed NO
RULING:
Preliminary Injunction
We affirm the RTC and Court of Appeals ruling that the preliminary
injunction order is not valid against the HDMF. 5, Rule 58 of the Rules of
Court expressly states that No preliminary injunction shall be granted
without hearing and prior notice to the party or person sought to be
enjoined.
In the case at bar, petitioners even admit that the HDMF was not
notified of the PI hearing. Petitioners do not contest the lower courts
ruling that the July 9, 1998 Order cannot apply to the HDMF. They merely
contend and insist that HDMF voluntarily submitted to the RTCs
jurisdiction. However, such contention is immaterial because the issue
involved is the validity of the PI order absent a notice of hearing for its
issuance to the HDMF.
Declaratory Relief and Prohibition
The ruling that the Petition for Declaratory Relief and Prohibition is
improper is correct, because the Petition must be filed before the
occurrence of breach or any violation. Under 1, Rule 63, a person must file
a petition for declaratory relief before breach or violation of a deed, will,
contract, other written instrument, statute, executive order, regulation,
ordinance or any other governmental regulation.
However, petitioners had already suspended payment of
amortizations. Clearly giving the HDMF a right to foreclose the mortgage for
failure to pay the debt secured by the mortgage. Petitioners actual
suspension of payments defeated the purpose of the action to secure an
authoritative declaration of their supposed right to suspend payment, for
their guidance.
o Thus, the RTC could no longer assume jurisdiction over the action
for declaratory relief because there was an occurrence of breach before
filing the action.
PURPOSE OF THE ACTION: 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.
WHEN TO FILE THE ACTION: It may be entertained only BEFORE the
breach or violation of the statute, deed, contract 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.
The Dismissal of the Petition was Improper
If the petition for declaratory relief and prohibition was vague,
dismissal is not proper because the respondents may ask for more
particulars. Notably, the NHMFC never assailed the supposed vagueness of
the petition in its motion to dismiss nor did it ask for more particulars
before filing its answer. When the RTC also set the pre-trial conference and
ordered the parties to submit their pre-trial briefs, it even noted that the
issues had already been joined. Petitioners fairly stated also the necessary
ultimate facts, except that their action for declaratory relief was improper.
The RTC made an assumption that RA No. 8501 was the subject
matter of the case. But while the petition mentioned the law, the
declaration that petitioners sought was not anchored on any of its
provisions. The petition only stated that despite the effectivity of said law,
respondents still acted in bad faith and with undue haste in threatening
petitioners with foreclosures, instead of encouraging them to avail of its
benefits.
COMMENTO: The Condonation Act took effect, but instead of
applying for condonation and for the restructuring of their loans, Petitioners
filed an erroneous petition before the RTC (siguro akala nila automatic
unyay, wala na silang utang!). On the other hand, the RTC was incorrect
on the point that the case should have been filed before HLURB. The
jurisdiction of the HLURB to hear and decide cases is determined by the
nature of the cause of action, the subject matter or property involved and
the parties. In this case, the petition for declaratory relief and prohibition
did not involve an unsound real estate business practice, or a refund filed by
subdivision buyers against the developer, or a specific performance case
filed by buyers against the developer.
Conversion of the Petition for Declaratory Relief and Prohibition to Ordinary
Action
GENERAL RULE: 6, Rule 63 allows the course of action.
However, petitioners failed to specify the ordinary action they
desired. The Court cannot assume that they seek annulment of the
mortgages and further, the issue was not raised before the RTC. Therefore,
the CA properly refused to entertain the issue as it cannot be raised for the
first time on appeal.
Conversion of Petition for Declaratory Relief to an Action for Prohibition
GENERAL RULE: In De La Llana, etc., et al. v. Alba, etc., et al., the
Court considered a petition erroneously entitled Petition for Declaratory
Relief and/or for Prohibition as an action for prohibition. The case involved
the constitutionality of BP Blg. 129, it was held that: that if the petition has
far-reaching implications and it raises questions that should be resolved, it
may be treated as one for prohibition.
Under the circumstances, action for prohibition is still improper.
PROHIBITION is a remedy against proceedings that are without or in excess
of jurisdiction, or with grave abuse of discretion, there being no appeal or
other plain, speedy adequate remedy in the ordinary course of law. But
here, the petition did not even impute lack of jurisdiction or grave abuse of
discretion committed by respondents and Sheriff Castillo regarding the
foreclosure proceedings.
WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision
and Resolution of the appellate court are AFFIRMED.
8. Velasco v Villegas
9. The Honorable Monetary Board v Philippine Veterans Bank
Facts:
1. The Philippine Veterans Bank, pursuant to its mandate to provide
financial assistance to veterans and teachers under Republic Acts 3518 and
7169, established pension loans for bona fide veterans and beneficiaries, as
well as salary loan products for teachers. As these clientele do not have
security other than their continuing good health or employment, to secure
their loans, the PVB devised a program by charging a premium, a higher fee
known as Credit Redemption Fund (CRF) from the borrowers. Special Trust
Funds were established by PVB for the loans of its clientele and in case of
death of the borrower, the fees charged from him and credited to the trust
funds will be used to fully pay the loan.
2. Bangko Sentral ng Pilipinas found that PVBs collection of the CRF
violated Section 54 of Republic Act No. 8791 which prohibited banks from
directly engaging in insurance business as insurer. Thus, it wrote the PVB to
inform it that CRF is a form of insurance, based on opinion by the Insurance
Commission and should be discontinued. PVB then stopped collecting the
fees.
3. The Monetary Board issued MB Resolution No. 1139 directing the
PVBs Trust and Investment Department to return to the borrowers all the
balances of the CRF; and to preserve the records of borrowers who were
deducted CRF pending resolution of ruling of the Office of the General
Counsel of the BSP. The BSP denied PVBs request for reconsideration,
hence it filed a petition for declamatory relief before the RTC of Makati City.
4. The Monetary Board moved to dismiss the petition, citing that the
petition should not prosper because of the prior breach of PVB by Section
54 of RA 8791. The RTC dismissed the petition for declaratory relief, ruling
that the issue of whether or not PVB violated Section 54 of Republic Act
8791 should be resolved in an ordinary civil action, not a declaratory relief.
5. Almost year later, it filed a Motion to Admit Motion for
Reconsideration, stating that it did not receive a copy of the order until
September 3, 2008, which the Monetary Board opposed, alleging that per
certification by the Philippine Postal Corporation, the order was served on
respondent on October 17, 2007.
6. The RTC ruling on the motion for reconsideration, reversed itself
and ruled that the collection of the CRF by PVB did not constitute engaging
in the issuance business as an insurer, hence not a violation of Section 54 of
RA 8791. Accordingly, it declared MB Resolution No. 1189 null and void. Its
motion for reconsideration denied, it filed before the Supreme Court a
petition for review on certiorari to contest the RTC decision, on the issue of
whether or not the petition for declaratory relief is proper.
ISSUE: Was the petition for declaratory relief proper?
HELD:
Declaratory relief is an action by any person interested in a deed,
will, contract or other written instrument, executive order or resolution, to
determine any question of construction or validity arising from the
instrument, executive order or regulation, or statute; and for a declaration
of his rights and duties thereunder. The only issue that may be raised in
such a petition is the question of construction or validity of provisions in an
instrument or statute
In CJH Development Corporation v. Bureau of Internal Revenue, the
SC that in the same manner that court decisions cannot be the proper
subjects of a petition for declaratory relief, decisions of quasi-judicial
agencies cannot be subjects of a petition for declaratory relief for the simple
reason that if a party is not agreeable to a decision either on questions of
law or of fact, it may avail of the various remedies provided by the Rules of
Court.
In this case, the decision of the BSP Monetary Board cannot be a
proper subject matter for a petition for declaratory relief. The BSP
Monetary Board is a quasi-judicial agency and the MB resolution it issued
was in its exercise of quasi-judicial powers or functions.
o The authority of the petitioners to issue the questioned MB
Resolution emanated from its powers under Section 37 of RA No. 7653 and
Section 66 of RA No. 8791 to impose, at its discretion, administrative
sanctions, upon any bank for violation of any banking law.
o The nature of the BSP Monetary Board as a quasi-judicial agency,
and the character of its determination of whether or not appropriate
sanctions may be imposed upon erring banks, as an exercise of quasi-judicial
function
A quasi-judicial agency or body is an organ of government other
than a court and other than a legislature, which affects the rights of private
parties through either adjudication or rule making. The very definition of an
administrative agency includes its being vested with quasi-judicial powers.
o It recognizes the need for the active intervention of administrative
agencies in matters calling for technical knowledge and speed in countless
controversies, which cannot possibly be handled by regular courts.
A quasi-judicial function is a term which applies to the action,
discretion, etc. of public administrative officers or bodies, who are required
to investigate facts, or ascertain the existence of facts, hold hearings, and
draw conclusions from them, as a basis for their official action and to
exercise discretion of a judicial nature.
Lastly, also worth noting is the fact that the court a quos Order
dated September 24, 2007, which dismissed respondents petition for
declaratory relief, had long become final and executory.
o To recall, said Order was duly served on and received by respondent
on October 17, 2007, as evidenced by the Certification issued by the
Philippine Postal Corporation. Almost a year later, however, or on October
15, 2008, respondent moved for reconsideration of the court a quos Order
of dismissal, claiming it received a copy of said Order only on September 3,
2008.
o Thus, respondents self-serving claim should not have prevailed over
the Certification issued by the Philippine Postal Corporation. It was error for
the trial court to entertain it for the second time despite the lapse of almost
a year before respondent filed its motion for reconsideration against said
Order.