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Republic of the Philippines Divina Gracia Santos-Gran (Gran) and the Register of Deeds of Marikina

SUPREME COURT City before the RTC, docketed asCivil Case No. 2018-06. The said
Manila complaint was later amended on March 10, 2006 (Amended Complaint).
7

FIRST DIVISION In her Amended Complaint, petitioner alleged, among others, that: (a)
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she was the registered owner of three (3) parcels of land located in the
G.R. No. 197380 October 8, 2014 Municipality of Montalban, Province of Rizal, covered by Transfer
Certificate of Title (TCT) Nos. N-5500, 224174, and N-4234 (subject
9 10 11

ELIZA ZUNIGA-SANTOS, represented by her Attorney-in Fact,


* properties) prior to their transfer in the name of private respondent Gran;
NYMPHA Z. SALES, Petitioners, (b) she has a second husband by the name ofLamberto C. Santos
vs. (Lamberto), with whom she did not have any children; (c) she was forced
MARIA DIVINA GRACIA SANTOS-GRAN and REGISTER OF DEEDS
** to take care of Lamberto’s alleged daughter, Gran, whose birth certificate
OF MARIKINA CITY, Respondents. was forged to make it appear that the latter was petitioner’s daughter; (d)
pursuant to void and voidable documents, i.e., a Deed of Sale, Lamberto
DECISION succeeded in transferring the subject properties in favor of and in the
name of Gran; (e) despite diligent efforts, said Deed of Sale could not be
PERLAS-BERNABE, J.: located; and (f) she discovered that the subject properties were
transferred to Gran sometime in November 2005. Accordingly, petitioner
Before the Court is a petition for review on certiorari assailing the
1
prayed, inter alia, that Gran surrender to her the subject properties and
Decision dated January 10, 2011 and the Resolution dated June 22,
2 3
pay damages, including costs of suit. 12

2011 of the Court of Appeals (CA) in CA-G.R. CV No. 87849 which


affirmed the Order dated July 6, 2006 of the Regional Trial Court of San
4 For her part, Gran filed a Motion to Dismiss, contending, inter alia, that
13

Mateo, Rizal, Branch 76 (RTC) in Civil Case No. 2018-06, dismissing the (a) the action filed by petitioner had prescribed since an action upon a
Amended Complaint for annulment of sale and revocation of title on the written contract must be brought within ten (10) years from the time the
ground of insufficiency of factual basis. cause of action accrues, or in this case, from the time of registration of
the questioned documents before the Registry of Deeds; and (b) the
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The Facts Amended Complaint failed to state a cause of action as the void and
voidable documents sought to be nullified were not properly identified nor
the substance thereof set forth, thus, precluding the RTC from rendering
On January 9, 2006, petitioner Eliza Zuñiga-Santos (petitioner), through
a valid judgment in accordance withthe prayer to surrender the subject
her authorized representative, Nympha Z. Sales, filed a Complaint for
5 6

properties.15

annulment of sale and revocation of title against respondents Maria


The RTC Ruling Aggrieved, petitioner moved for reconsideration and attached, for the
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first time, a copy of the questioned Deed of Sale which she claimed to
24

In an Order dated July 6, 2006, the RTC granted Gran’s motion and
16 have recently recovered, praying that the order of dismissal be set aside
dismissed the Amended Complaint for its failure to state a cause of and the case be remanded to the RTC for further proceedings.
action, considering that the deed of sale sought to be nullified – an
"essential and indispensable part of [petitioner’s] cause of action" – was
17
In a Resolution dated June 22, 2011, the CA denied petitioner’s motion
25

not attached. It likewise held that the certificates oftitle covering the and held that the admission of the contested Deed of Sale at this late
subject properties cannot be collaterally attacked and that since the stage would be contrary to Gran’s right to due process.
action was based on a written contract, the same had already prescribed
under Article 1144 of the Civil Code.18
Hence, the instant petition.

Dissatisfied, petitioner elevated the matter to the CA. The Issue Before the Court

The CA Ruling The primordial issue for the Court’s resolution is whether or not the
dismissal of petitioner’s Amended Complaint should be sustained.
In a Decision dated January 10, 2011, the CA sustained the dismissal of
19

petitioner’s Amended Complaint buton the ground of insufficiency of The Court’s Ruling
factual basis. It disagreed with the RTC’s findingthat the said pleading
failed to state a cause of action since it had averred that: (a) petitioner Failure to state a cause of action and lack of cause of action are distinct
has a right over the subject properties being the registered owner thereof grounds to dismiss a particularaction. The former refers to the
prior to their transfer in the name of Gran; (b) Lamberto succeeded in insufficiency of the allegations in the pleading, while the latter to the
transferring the subject properties to his daughter, Gran, through void insufficiency of the factual basis for the action. Dismissal for failure to
and voidable documents; and (c) the latter’s refusal and failure to state a cause of action may be raised at the earliest stages of the
surrender to her the subject properties despite demands violated proceedings through a motion to dismiss under Rule16 of the Rules of
petitioner’s rights over them. The CA likewise ruled that the action has
20
Court, while dismissal for lack of cause of action may be raised any time
not yet prescribed since an action for nullity of void deeds of conveyance after the questions of fact have been resolved on the basis of stipulations,
is imprescriptible. Nonetheless, it held that since the Deed of Sale
21
admissions or evidence presented by the plaintiff. In Macaslang v.
26

sought to be annulled was not attached to the Amended Complaint, it Zamora, the Court, citing the commentary of Justice Florenz D.
27

was impossible for the court to determine whether petitioner’s signature Regalado, explained:
therein was a forgery and thus, would have no basis to order the
surrender or reconveyance of the subject properties. 22
Justice Regalado, a recognized commentator on remedial law, has Demurrer to Evidence
explained the distinction:
Section 1. Demurrer to evidence. — After the plaintiff has completed the
x x x What is contemplated, therefore, is a failure to statea cause of presentation of his evidence, the defendant may move for dismissal on
action which is provided in Sec. 1(g) of Rule 16. This is a matter of the ground that upon the facts and the law the plaintiff has shown no right
insufficiency of the pleading. Sec. 5 of Rule 10, which was also included to relief. If his motion isdenied he shall have the right to present evidence.
as the last mode for raising the issue to the court, refers to the situation If the motion is granted but on appeal the order of dismissal is reversed
where the evidence does not provea cause of action. This is, therefore, a he shall be deemed to have waived the right to present evidence.
matter of insufficiency of evidence. Failure to state a cause of action is
different from failure to prove a cause of action. The remedy in the first is At the preliminary stages of the proceedings, without any presentation of
to move for dismissal of the pleading, whilethe remedy in the second is to evidence even conducted, it is perceptibly impossible to assess the
demur to the evidence, hence reference to Sec. 5 of Rule 10 has been insufficiency of the factual basis on which the plaintiff asserts his cause of
eliminated in this section. The procedure would consequently be to action, as in this case. Therefore, that ground could not be the basis for
require the pleading to state a cause of action, by timely objection to its the dismissal of the action.
deficiency; or, at the trial, to file a demurrer to evidence, if such motion is
warranted. 28
However, the Amended Complaint is still dismissible but on the ground of
failure to state a cause of action, as correctly held by the RTC. Said
In the case at bar, both the RTC and the CA were one in dismissing ground was properly raised by Granin a motion to dismiss pursuant to
petitioner’s Amended Complaint, but varied on the grounds thereof – that Section 1, Rule 16 of the Rules of Court:
is, the RTC held that there was failure tostate a cause of action while the
CA ruled that there was insufficiency of factual basis. RULE 16
Motion to Dismiss
At once, it is apparent that the CA based its dismissal on an incorrect
ground. From the preceding discussion, it is clear that "insufficiency of Section 1. Grounds. — Within the time for but before filing the answer to
factual basis" is not a ground for a motion to dismiss. Rather, it is a the complaint or pleading asserting a claim, a motion to dismiss may be
ground which becomes available only after the questions of fact have made on any of the following grounds:
been resolved on the basis of stipulations, admissions or evidence
presented by the plaintiff. The procedural recourse to raise such ground xxxx
is a demurrer to evidence taken only after the plaintiff’s presentation of
evidence. This parameter is clear under Rule 33 of the Rules of Court: (g) That the pleading asserting the claim states no cause of action;
RULE 33
xxxx the CA, the allegations therein do not proffer ultimate facts which would
warrant an action for nullification of the sale and recovery of the
A complaint states a cause of action if it sufficiently avers the existence of properties in controversy, hence,rendering the same dismissible.
the three (3) essential elements of a cause of action, namely: (a) a right
in favor of the plaintiff by whatever means and under whatever law it While the Amended Complaint does allege that petitioner was the
arises or is created; (b) an obligation on the part of the named defendant registered owner of the subject properties in dispute, nothing in the said
to respect or not to violate such right; and (c) an act or omission on the pleading or its annexes would show the basis of that assertion, either
part of the named defendant violative of the right of the plaintiff or through statements/documents tracing the rootof petitioner’s title or
constituting a breach of the obligation of defendant tothe plaintiff for copies of previous certificates of title registeredin her name. Instead, the
which the latter may maintain an action for recovery of damages. If the 29
certificates of title covering the said properties that were attached to the
allegations of the complaint do not state the concurrence of these Amended Complaint are in the name of Gran. At best, the attached
elements, the complaint becomes vulnerable to a motion to dismiss on copies of TCT Nos. N-5500 and N-4234 only mention petitioner as the
the ground of failure to state a cause of action. 30
representative of Gran at the time of the covered property’s registration
when she was a minor. Nothing in the pleading, however, indicates that
It is well to point out that the plaintiff’s cause of action should not merely the former had become any of the properties’ owner. This leads to the
be "stated" but, importantly, the statement thereof should be "sufficient." logical conclusion that her right to the properties in question – at least
This is why the elementarytest in a motion to dismiss on such ground is through the manner in which it was alleged in the Amended Complaint –
whether or not the complaint alleges facts which if true would justify the remains ostensibly unfounded. Indeed, while the facts alleged in the
relief demanded. As a corollary, it has been held that only ultimate facts
31 complaint are hypothetically admitted for purposes of the motion, it must,
and not legal conclusions or evidentiary facts are considered for nevertheless, be remembered that the hypothetical admission extends
purposes of applying the test. This is consistent with Section 1, Rule 8 of
32 only to the relevant and material facts well pleaded in the complaint as
the Rules of Court which states that the complaint need only allege the well as toinferences fairly deductible therefrom. Verily, the filing of the
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ultimate facts or the essential facts constituting the plaintiff’s cause of motion to dismiss assailing the sufficiency of the complaint does not
action. A fact is essential if they cannot be stricken out without leaving the hypothetically admit allegations of which the court will take judicial notice
statement of the cause of action inadequate. Since the inquiry is into the
33 ofto be not true, nor does the rule of hypothetical admission apply to
sufficiency, not the veracity, of the material allegations, it follows that the legallyimpossible facts, or to facts inadmissible in evidence, or to facts
analysis should be confined to the four corners of the complaint, and no that appear to be unfounded by record or document included in the
other.34 pleadings.36

A judicious examination of petitioner’s Amended Complaint readily shows Aside from the insufficiency of petitioner’s allegations with respect to her
its failure to sufficiently state a cause of action. Contrary to the findings of right to the subject properties sought to be recovered, the ultimate facts
supposedly justifying the "annulment of sale," by which the reconveyance 10. That plaintiff then return on [to] the Philippines
of the subject properties is sought, were also insufficiently pleaded. The sometime [in] November, 2005 and discovered that all
following averments in the Amended Complaint betray no more than an [plaintiff’s] properties [had] been transferred to defendant
insufficient narration of facts: MARIA DIVINA GRACIA SANTOS who is not a daughter
either by consanguinity or affinity to the plaintiff mother
6. That pursuant to a voidable [sic] and void documents, [sic];
the second husband of the plaintiff succeed [sic] in
transferring the above TITLES in the name of MARIA 11. That the titles that [were] issued in the name of
DIVINAGRACIA SANTOS, who is (sic) alleged daughter MARIA DIVINAGRACIA SANTOS by virtue of the said
of LAMBERTO C. SANTOS in violation of Article 1409, alleged voidable and void documents, should be annulled
Par. 2 of the Civil Code; and cancelled as the basis of the transfer is through void
and voidable documents;

xxxx 37

7. That the said properties [were] transferred to the said


defendant by a Deed of Sale (DOS) to the said MARIA Clearly, the claim that the sale was effected through "voidable and void
DIVINA GRACIA SANTOS through a void documents [sic] documents" partakes merely of a conclusion of law that is not supported
considering that the seller is the alleged mother of by any averment of circumstances that will show why or how such
defendant is also the buyer of the said properties in favor conclusion was arrived at. In fact, what these "voidable and void
of defendant; documents" are were not properly stated and/or identified. In Abad v.
Court of First Instance of Pangasinan, the Court pronounced that:
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8. x x x.
A pleading should state the ultimate facts essential to the rights of action
9. That the alleged sale and transfer of the said properties or defense asserted, as distinguished from mere conclusions of fact, or
in favor of defendant was only discovered by [plaintiff’s] conclusions of law. General allegations thata contract is valid or legal, or
daughter CYNTHIA BELTRAN-LASMARIAS when is just, fair, and reasonable, are mere conclusions of law. Likewise,
[plaintiff] has been requesting for financial assistance, allegations that a contract is void, voidable, invalid, illegal, ultra vires, or
considering that the said mother of plaintiff [sic] has so against public policy, without stating facts showing its invalidity, are mere
many properties which is now the subject of this conclusions of law. (Emphases supplied)
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complaint;
Hence, by merely stating a legal conclusion, the Amended Complaint To determine when the prescriptive period commenced in an action for
presented no sufficient allegation upon which the Court could grant the reconveyance, the plaintiff’s possession of the disputed property is
relief petitioner prayed for. Thus, said pleading should be dismissed on material. If there is an actual need to reconvey the property as when the
the ground of failure to state cause of action, as correctly held by the plaintiff is not in possession, the action for reconveyance based on
RTC. implied trust prescribes in ten (10) years, the reference point being the
date of registration of the deed or the issuance of the title. On the other
That a copy of the Deed of Saleadverted to in the Amended Complaint hand, if the real owner of the property remains in possession of the
was subsequently submitted by petitioner does not warrant a different property, the prescriptive period to recover titleand possession of the
course of action. The submission of that document was made, as it was
1âwphi1
property does not run against him and in such case,the action for
purportedly "recently recovered," only on reconsideration before the CA reconveyance would be in the nature of a suit for quieting of title which is
which, nonetheless, ruled against the remand of the case. An imprescriptible.
41

examination of the present petition, however, reveals no


counter-argument against the foregoing actions; hence, the Court In the case at bar, a reading ofthe allegations of the Amended Complaint
considers any objection thereto as waived. failed to show that petitioner remained in possession of the subject
properties in dispute. On the contrary, it can be reasonably deduced that
In any event, the Court finds the Amended Complaint’s dismissal to be in it was Gran who was in possession ofthe subject properties, there being
order considering that petitioner’s cause of action had already an admission by the petitioner that the property covered by TCT No.
prescribed. 224174 was being used by Gran’s mother-in-law. In fact, petitioner’s
42

relief in the Amended Complaint for the "surrender" of three (3) properties
It is evident that petitioner ultimately seeks for the reconveyance to her of to her bolsters such stance. And since the new titles tothe subject
43

the subject properties through the nullification of their supposed sale to properties in the name of Gran were issued by the Registry of Deeds of
Gran. An action for reconveyance is one that seeks to transfer property, Marikina on the following dates: TCT No. 224174 on July 27, 1992, TCT44

wrongfully registered by another, to its rightful and legal owner. Having


40 No. N-5500 on January 29, 1976, and TCT No. N-4234 on November 26,
45

alleged the commission of fraud by Gran in the transfer and registration 1975, the filing of the petitioner’s complaint beforethe RTC on January 9,
46

of the subject properties in her name, there was, in effect, an implied trust 2006 was obviously beyond the ten-year prescriptive period, warranting
created by operation of law pursuant to Article 1456 of the Civil Code the Amended Complaint’s dismissal all the same.
which provides:
WHEREFORE, the petition is DENIED. The Decision dated January 10,
Art. 1456. If property is acquired through mistake or fraud, the person 2011 and the Resolution dated June 22, 2011 of the Court of Appeals in
obtaining it is, by force of law, considered a trustee of an implied trust for CA-G.R. CV No. 87849 are hereby AFFIRMEDwith MODIFICATION in
the benefit of the person from whom the property comes. 1âwphi1
that the Amended Complaint be dismissed on the grounds of (a) failure to
state a cause of action, and (b) prescription as herein discussed.
THIRD DIVISION
SO ORDERED.

ESTELA M. PERLAS-BERNABE
FELS ENERGY, INC., G.R. No. 168557
Associate Justice
Petitioner,
WE CONCUR:
-versus-

THE PROVINCE OF BATANGAS and


THE OFFICE OF THE PROVINCIAL
ASSESSOR OF BATANGAS,
Respondents.
x----------------------------------------------------x
NATIONAL POWER CORPORATION, G.R. No.
170628
Petitioner,
Present:

YNARES-SANTIAGO, J.,
- versus - Chairperson,
AUSTRIA-MARTINEZ,
CALLEJO, SR. and Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No.
LOCAL BOARD OF
67490 and its Resolution[2] dated June 20, 2005; the second,
ASSESSMENT CHICO-NAZARIO, JJ.
APPEALS OF BATANGAS, LAURO C. also a petition for review on certiorari, challenges the
ANDAYA, in his capacity as the Assessor February 9, 2005 Decision[3]and November 23,
of the Province of Batangas, and the Promulgated: 2005 Resolution[4] of the CA in CA-G.R. SP No. 67491.
PROVINCE OF BATANGAS represented Both petitions were dismissed on the ground of
by its Provincial Assessor, February 16, 2007
prescription.
Respondents.
x--------------------------------------------------------------------------
------------------x The pertinent facts are as follows:

DECISION
On January 18, 1993, NPC entered into a lease contract
with Polar Energy, Inc. over 3x30 MW diesel engine power
CALLEJO, SR., J.: barges moored at Balayan Bay in Calaca, Batangas. The
contract, denominated as an Energy Conversion
Agreement[5] (Agreement), was for a period of five
Before us are two consolidated cases docketed as G.R. No.
years. Article 10 reads:
168557 and G.R. No. 170628, which were filed by
petitioners FELS Energy, Inc. (FELS) and National Power 10.1 RESPONSIBILITY. NAPOCOR shall be
Corporation (NPC), respectively. The first is a petition for responsible for the payment of (a) all taxes, import
duties, fees, charges and other levies imposed by the
review on certiorari assailing the August 25, 2004 National Government of the Republic of the
Philippines or any agency or instrumentality thereof to
which POLAR may be or become subject to or in
NPC, reminding it of its obligation under the Agreement to
relation to the performance of their obligations under pay all real estate taxes. It then gave NPC the full power
this agreement (other than (i) taxes imposed or
calculated on the basis of the net income
and authority to represent it in any conference regarding the
of POLAR and Personal Income Taxes of its real property assessment of the Provincial Assessor.
employees and (ii) construction permit fees,
environmental permit fees and other similar fees and
charges) and (b) all real estate taxes and assessments, In a letter[7] dated September 7, 1995, NPC sought
rates and other charges in respect of the Power
Barges.[6] reconsideration of the Provincial Assessors decision to
assess real property taxes on the power barges. However,
the motion was denied on September 22, 1995, and the
Subsequently, Polar Energy, Inc. assigned its rights
Provincial Assessor advised NPC to pay the
under the Agreement to FELS. The NPC initially opposed
assessment.[8] This prompted NPC to file a petition with the
the assignment of rights, citing paragraph 17.2 of Article 17
Local Board of Assessment Appeals (LBAA) for the setting
of the Agreement.
aside of the assessment and the declaration of the barges as
non-taxable items; it also prayed that should LBAA find the
barges to be taxable, the Provincial Assessor be directed to
On August 7, 1995, FELS received an assessment of
make the necessary corrections.[9]
real property taxes on the power barges from Provincial
Assessor Lauro C. Andaya of Batangas City. The assessed
In its Answer to the petition, the Provincial Assessor
tax, which likewise covered those due for 1994, amounted
averred that the barges were real property for purposes of
to P56,184,088.40 per annum. FELS referred the matter to
taxation under Section 199(c) of Republic Act (R.A.) No. one being taxed, not NPC. A mere agreement making NPC
7160. responsible for the payment of all real estate taxes and
Before the case was decided by the LBAA, NPC filed assessments will not justify the exemption of FELS; such a
a Manifestation, informing the LBAA that the Department privilege can only be granted to NPC and cannot be
of Finance (DOF) had rendered an opinion[10] dated May 20, extended to FELS. Finally, the LBAA also ruled that the
1996, where it is clearly stated that power barges are not petition was filed out of time.
real property subject to real property assessment.
On August 26, 1996, the LBAA rendered a Aggrieved, FELS appealed the LBAAs ruling to the Central
Resolution[11] denying the petition. The fallo reads: Board of Assessment Appeals (CBAA).
WHEREFORE, the Petition is DENIED. FELS
is hereby ordered to pay the real estate tax in the
amount of P56,184,088.40, for the year 1994. On August 28, 1996, the Provincial Treasurer
SO ORDERED.[12]
of Batangas City issued a Notice of Levy and Warrant by
Distraint[13] over the power barges, seeking to collect real
The LBAA ruled that the power plant facilities, while they property taxes amounting to P232,602,125.91 as of July 31,
may be classified as movable or personal property, are 1996. The notice and warrant was officially served to FELS
nevertheless considered real property for taxation purposes on November 8, 1996. It then filed a Motion to Lift Levy
because they are installed at a specific location with a dated November 14, 1996, praying that the Provincial
character of permanency. The LBAA also pointed out that Assessor be further restrained by the CBAA from enforcing
the owner of the bargesFELS, a private corporationis the the disputed assessment during the pendency of the appeal.
On April 6, 2000, the CBAA rendered a Decision[17] finding
On November 15, 1996, the CBAA issued an the power barges exempt from real property tax. The
Order[14] lifting the levy and distraint on the properties of dispositive portion reads:
FELS in order not to preempt and render ineffectual,
WHEREFORE, the Resolution of the Local Board of
nugatory and illusory any resolution or judgment which the Assessment Appeals of the Province of Batangas is
Board would issue. hereby reversed. Respondent-appellee Provincial
Assessor of the Province of Batangas is hereby ordered
to drop subject property under ARP/Tax Declaration
Meantime, the NPC filed a Motion for No. 018-00958 from the List of Taxable Properties in
the Assessment Roll. The Provincial Treasurer of
Intervention[15] dated August 7, 1998 in the proceedings Batangas is hereby directed to act accordingly.
before the CBAA. This was approved by the CBAA in an
SO ORDERED.[18]
Order[16] dated September 22, 1998.

Ruling in favor of FELS and NPC, the CBAA reasoned that


During the pendency of the case, both FELS and NPC filed
the power barges belong to NPC; since they are actually,
several motions to admit bond to guarantee the payment of
directly and exclusively used by it, the power barges are
real property taxes assessed by the Provincial Assessor (in
covered by the exemptions under Section 234(c) of R.A. No.
the event that the judgment be unfavorable to them). The
7160.[19] As to the other jurisdictional issue, the CBAA
bonds were duly approved by the CBAA.
ruled that prescription did not preclude the NPC from
pursuing its claim for tax exemption in accordance with
Section 206 of R.A. No. 7160. The Provincial Assessor
filed a motion for reconsideration, which was opposed by
FELS and NPC. FELS and NPC filed separate motions for
reconsideration, which were timely opposed by the
In a complete volte face, the CBAA issued a Provincial Assessor. The CBAA denied the said motions in
Resolution[20] on July 31, 2001 reversing its earlier decision. a Resolution[22] dated October 19, 2001.
The fallo of the resolution reads:
Dissatisfied, FELS filed a petition for review before
WHEREFORE, premises considered, it is the
resolution of this Board that:
the CA docketed as CA-G.R. SP No. 67490. Meanwhile,
NPC filed a separate petition, docketed as CA-G.R. SP No.
(a) The decision of the Board dated 6 April
2000 is hereby reversed.
67491.

(b) The petition of FELS, as well as the


intervention of NPC, is dismissed. On January 17, 2002, NPC filed a
Manifestation/Motion for Consolidation in CA-G.R. SP No.
(c) The resolution of the Local Board of
Assessment Appeals of Batangas is hereby 67490 praying for the consolidation of its petition with
affirmed, CA-G.R. SP No. 67491. In a Resolution[23] dated February
(d) The real property tax assessment on FELS by 12, 2002, the appellate court directed NPC to re-file its
the Provincial Assessor of Batangas is likewise motion for consolidation with CA-G.R. SP No. 67491,
hereby affirmed.
since it is the ponente of the latter petition who should
SO ORDERED.[21] resolve the request for reconsideration.
NPC failed to comply with the aforesaid resolution. 67490. The petition was, however, denied in this Courts
On August 25, 2004, the Twelfth Division of the appellate Resolution[25] of November 8, 2004, for NPCs failure to
court rendered judgment in CA-G.R. SP No. 67490 denying sufficiently show that the CA committed any reversible
the petition on the ground of prescription. The decretal error in the challenged decision. NPC filed a motion for
portion of the decision reads: reconsideration, which the Court denied with finality in a
WHEREFORE, the petition for review
Resolution[26] dated January 19, 2005.
is DENIED for lack of merit and the assailed
Resolutions dated July 31, 2001 and October 19,
2001 of the Central Board of Assessment Appeals
Meantime, the appellate court dismissed the petition in
are AFFIRMED. CA-G.R. SP No. 67491. It held that the right to question the
SO ORDERED.[24] assessment of the Provincial Assessor had already
prescribed upon the failure of FELS to appeal the disputed
assessment to the LBAA within the period prescribed by
On September 20, 2004, FELS timely filed a motion for law. Since FELS had lost the right to question the
reconsideration seeking the reversal of the appellate courts assessment, the right of the Provincial Government to
decision in CA-G.R. SP No. 67490. collect the tax was already absolute.

Thereafter, NPC filed a petition for review dated October NPC filed a motion for reconsideration dated March 8, 2005,
19, 2004 before this Court, docketed as G.R. No. 165113, seeking reconsideration of the February 5, 2005 ruling of
assailing the appellate courts decision in CA-G.R. SP No.
Assuming arguendo that the subject power barges are
the CA in CA-G.R. SP No. 67491. The motion was denied subject to real estate tax, whether or not it should be
in a Resolution[27] dated November 23, 2005. NPC which should be made to pay the same under the
law.

The motion for reconsideration filed by FELS in CA-G.R. D.


Assuming arguendo that the subject power barges are
SP No. 67490 had been earlier denied for lack of merit in a real properties, whether or not the same is subject to
Resolution[28] dated June 20, 2005. depreciation just like any other personal properties.

E.
On August 3, 2005, FELS filed the petition docketed Whether the right of the petitioner to question the
patently null and void real property tax assessment on
as G.R. No. 168557 before this Court, raising the following the petitioners personal properties is imprescriptible.[29]
issues:
A.
Whether power barges, which are floating and On January 13, 2006, NPC filed its own petition for
movable, are personal properties and therefore, not review before this Court (G.R. No. 170628), indicating the
subject to real property tax.
following errors committed by the CA:
B.
Assuming that the subject power barges are real I
properties, whether they are exempt from real estate THE COURT OF APPEALS GRAVELY ERRED IN
tax under Section 234 of the Local Government Code HOLDING THAT THE APPEAL TO THE LBAA
(LGC). WAS FILED OUT OF TIME.

C. II
THE COURT OF APPEALS GRAVELY ERRED IN
NOT HOLDING THAT THE POWER BARGES ARE
end view of advancing the interests of justice and avoiding
NOT SUBJECT TO REAL PROPERTY TAXES. further delay.

III
In both petitions, FELS and NPC maintain that the appeal
THE COURT OF APPEALS GRAVELY ERRED IN before the LBAA was not time-barred. FELS argues that
NOT HOLDING THAT THE ASSESSMENT ON
THE POWER BARGES WAS NOT MADE IN when NPC moved to have the assessment reconsidered
ACCORDANCE WITH LAW.[30] on September 7, 1995, the running of the period to file an
appeal with the LBAA was tolled. For its part, NPC posits
that the 60-day period for appealing to the LBAA should be
Considering that the factual antecedents of both cases are
reckoned from its receipt of the denial of its motion for
similar, the Court ordered the consolidation of the two cases
reconsideration.
in a Resolution[31] dated March 8, 2006.

Petitioners contentions are bereft of merit.


In an earlier Resolution dated February 1, 2006, the Court
had required the parties to submit their respective
Section 226 of R.A. No. 7160, otherwise known as
Memoranda within 30 days from notice. Almost a year
the Local Government Code of 1991, provides:
passed but the parties had not submitted their respective
memoranda. Considering that taxesthe lifeblood of our SECTION 226. Local Board of Assessment
Appeals. Any owner or person having legal interest in
economyare involved in the present controversy, the Court the property who is not satisfied with the action of the
was prompted to dispense with the said pleadings, with the provincial, city or municipal assessor in the assessment
of his property may, within sixty (60) days from the
date of receipt of the written notice of assessment,
appeal to the Board of Assessment Appeals of the
province or city by filing a petition under oath in the The remedy of appeal to the LBAA is available from
form prescribed for the purpose, together with copies an adverse ruling or action of the provincial, city or
of the tax declarations and such affidavits or
documents submitted in support of the appeal. municipal assessor in the assessment of the property. It
follows then that the determination made by the respondent
We note that the notice of assessment which the Provincial Provincial Assessor with regard to the taxability of the
Assessor sent to FELS on August 7, 1995, contained the subject real properties falls within its power to assess
following statement: properties for taxation purposes subject to appeal before the
LBAA.[33]
If you are not satisfied with this assessment, you
may, within sixty (60) days from the date of receipt
hereof, appeal to the Board of Assessment Appeals of We fully agree with the rationalization of the CA in
the province by filing a petition under oath on the form both CA-G.R. SP No. 67490 and CA-G.R. SP No. 67491.
prescribed for the purpose, together with copies of
ARP/Tax Declaration and such affidavits or documents The two divisions of the appellate court cited the case
submitted in support of the appeal.[32]
of Callanta v. Office of the Ombudsman,[34] where we ruled
that under Section 226 of R.A. No 7160,[35] the last action
Instead of appealing to the Board of Assessment of the local assessor on a particular assessment shall be the
Appeals (as stated in the notice), NPC opted to file a motion notice of assessment; it is this last action which gives the
for reconsideration of the Provincial Assessors decision, a owner of the property the right to appeal to the LBAA. The
remedy not sanctioned by law. procedure likewise does not permit the property owner the
remedy of filing a motion for reconsideration before the
x x x. The Court announces: Henceforth,
local assessor. The pertinent holding of the Court whenever the local assessor sends a notice to the
in Callanta is as follows: owner or lawful possessor of real property of its
revised assessed value, the former shall no longer have
any jurisdiction to entertain any request for a review
x x x [T]he same Code is equally clear that the or readjustment. The appropriate forum where the
aggrieved owners should have brought their appeals aggrieved party may bring his appeal is the LBAA as
before the LBAA. Unfortunately, despite the advice to provided by law. It follows ineluctably that the 60-day
this effect contained in their respective notices of period for making the appeal to the LBAA runs
assessment, the owners chose to bring their requests without interruption. This is what We held in SP 67490
for a review/readjustment before the city assessor, a and reaffirm today in SP 67491.[37]
remedy not sanctioned by the law. To allow this
procedure would indeed invite corruption in the system
of appraisal and assessment. It conveniently courts a
graft-prone situation where values of real property may To reiterate, if the taxpayer fails to appeal in due
be initially set unreasonably high, and then course, the right of
subsequently reduced upon the request of a property
owner. In the latter instance, allusions of a possible the local government to collect the taxes due with respect to
covert, illicit trade-off cannot be avoided, and in fact the taxpayers property becomes absolute upon the
can conveniently take place. Such occasion for
mischief must be prevented and excised from our expiration of the period to appeal.[38] It also bears stressing
system.[36] that the taxpayers failure to question the assessment in the
LBAA renders the assessment of the local assessor final,
executory and demandable, thus, precluding the taxpayer
For its part, the appellate court declared in CA-G.R. from questioning the correctness of the assessment, or from
SP No. 67491:
invoking any defense that would reopen the question of its FELS maintains that the argument of the Provincial
liability on the merits.[39] Assessor is completely misplaced since it was not a party to
the erroneous petition which the NPC filed in G.R. No.
In fine, the LBAA acted correctly when it dismissed 165113. It avers that it did not participate in the aforesaid
the petitioners appeal for having been filed out of time; the proceeding, and the Supreme Court never acquired
CBAA and the appellate court were likewise correct in jurisdiction over it. As to the issue of forum shopping,
affirming the dismissal. Elementary is the rule that the petitioner claims that no forum shopping could have been
perfection of an appeal within the period therefor is both committed since the elements of litis pendentia or res
mandatory and jurisdictional, and failure in this regard judicata are not present.
renders the decision final and executory.[40]
We do not agree.
In the Comment filed by the Provincial Assessor, it is
asserted that the instant petition is barred by res Res judicata pervades every organized system of
judicata; that the final and executory judgment in G.R. No. jurisprudence and is founded upon two grounds embodied
165113 (where there was a final determination on the issue in various maxims of common law, namely: (1) public
of prescription), effectively precludes the claims herein; and policy and necessity, which makes it to the interest of the
that the filing of the instant petition after an adverse State that there should be an end to litigation republicae ut
judgment in G.R. No. 165113 constitutes forum shopping. sit litium; and (2) the hardship on the individual of being
vexed twice for the same cause nemo debet bis vexari et
effective and efficient administration of justice
eadem causa. A conflicting doctrine would subject the requires that once a judgment has become final, the
public peace and quiet to the will and dereliction of prevailing party should not be deprived of the fruits of
the verdict by subsequent suits on the same issues filed
individuals and prefer the regalement of the litigious by the same parties.
disposition on the part of suitors to the preservation of the
This is in accordance with the doctrine of res
public tranquility and happiness.[41] As we ruled in Heirs judicata which has the following elements: (1) the
of Trinidad De Leon Vda. de Roxas v. Court of Appeals:[42] former judgment must be final; (2) the court which
rendered it had jurisdiction over the subject matter and
x x x An existing final judgment the parties; (3) the judgment must be on the merits; and
or decree rendered upon the merits, (4) there must be between the first and the second
without fraud or collusion, by a court of actions, identity of parties, subject matter and causes of
competent jurisdiction acting upon a action. The application of the doctrine of res
matter within its authority is conclusive judicata does not require absolute identity of parties
on the rights of the parties and their but merely substantial identity of parties.There is
privies. This ruling holds in all other substantial identity of parties when there is
actions or suits, in the same or any other community of interest or privity of interest between
judicial tribunal of concurrent a party in the first and a party in the second case
jurisdiction, touching on the points or even if the first case did not implead the latter.[43]
matters in issue in the first suit.

xxx
To recall, FELS gave NPC the full power and
Courts will simply refuse to reopen what has authority to represent it in any proceeding regarding real
been decided. They will not allow the same parties or
their privies to litigate anew a question once it has property assessment. Therefore, when petitioner NPC filed
been considered and decided with finality. Litigations its petition for review docketed as G.R. No. 165113, it did
must end and terminate sometime and somewhere. The
so not only on its behalf but also on behalf of FELS.
Moreover, the assailed decision in the earlier petition for
review filed in this Court was the decision of the appellate Petitioner FELS alleges that there is no forum
court in CA-G.R. SP No. 67490, in which FELS was the shopping since the elements of res judicata are not present
petitioner. Thus, the decision in G.R. No. 165116 is binding in the cases at bar; however, as already discussed,res
on petitioner FELS under the principle of privity of interest. judicata may be properly applied herein. Petitioners
In fine, FELS and NPC are substantially identical parties as engaged in forum shopping when they filed G.R. Nos.
to warrant the application of res judicata. FELSs argument 168557 and 170628 after the petition for review in G.R. No.
that it is not bound by the erroneous petition filed by NPC 165116. Indeed, petitioners went from one court to another
is thus unavailing. trying to get a favorable decision from one of the tribunals
which allowed them to pursue their cases.
On the issue of forum shopping, we rule for the
Provincial Assessor. Forum shopping exists when, as a It must be stressed that an important factor in
result of an adverse judgment in one forum, a party seeks determining the existence of forum shopping is the vexation
another and possibly favorable judgment in another forum caused to the courts and the parties-litigants by the filing of
other than by appeal or special civil action or certiorari. similar cases to claim substantially the same reliefs.[45] The
There is also forum shopping when a party institutes two or rationale against forum shopping is that a party should not
more actions or proceedings grounded on the same cause, be allowed to pursue simultaneous remedies in two
on the gamble that one or the other court would make a different fora. Filing multiple petitions or complaints
favorable disposition.[44] constitutes abuse of court processes, which tends to degrade
the administration of justice, wreaks havoc upon orderly As found by the appellate court, the CBAA and
judicial procedure, and adds to the congestion of the heavily LBAA power barges are real property and are thus subject
burdened dockets of the courts.[46] to real property tax. This is also the inevitable conclusion,
considering that G.R. No. 165113 was dismissed for failure
Thus, there is forum shopping when there exist: (a) to sufficiently show any reversible error. Tax assessments
identity of parties, or at least such parties as represent the by tax examiners are presumed correct and made in good
same interests in both actions, (b) identity of rights asserted faith, with the taxpayer having the burden of proving
and relief prayed for, the relief being founded on the same otherwise.[48] Besides, factual findings of administrative
facts, and (c) the identity of the two preceding particulars is bodies, which have acquired expertise in their field, are
such that any judgment rendered in the pending case, generally binding and conclusive upon the Court; we will
regardless of which party is successful, would amount to res not assume to interfere with the sensible exercise of the
judicata in the other.[47] judgment of men especially trained in appraising property.
Where the judicial mind is left in doubt, it is a sound policy
Having found that the elements of res judicata and to leave the assessment undisturbed.[49] We find no reason
forum shopping are present in the consolidated cases, a to depart from this rule in this case.
discussion of the other issues is no longer necessary.
Nevertheless, for the peace and contentment of petitioners, In Consolidated Edison Company of New York, Inc.,
we shall shed light on the merits of the case. et al. v. The City of New York, et al.,[50] a power company
brought an action to review property tax assessment. On the
citys motion to dismiss, the Supreme Court of New Petitioners maintain nevertheless that the power
York held that the barges on which were mounted gas barges are exempt from real estate tax under Section 234 (c)
turbine power plants designated to generate electrical power, of R.A. No. 7160 because they are actually, directly and
the fuel oil barges which supplied fuel oil to the power plant exclusively used by petitioner NPC, a government- owned
barges, and the accessory equipment mounted on the barges and controlled corporation engaged in the supply,
were subject to real property taxation. generation, and transmission of electric power.

Moreover, Article 415 (9) of the New Civil Code We affirm the findings of the LBAA and CBAA that
provides that [d]ocks and structures which, though floating, the owner of the taxable properties is petitioner FELS,
are intended by their nature and object to remain at a fixed which in fine, is the entity being taxed by the local
place on a river, lake, or coast are considered immovable government. As stipulated under Section 2.11, Article 2 of
property. Thus, power barges are categorized as immovable the Agreement:
property by destination, being in the nature of machinery
and other implements intended by the owner for an industry OWNERSHIP OF POWER
or work which may be carried on in a building or on a piece BARGES. POLAR shall own the Power Barges and
all the fixtures, fittings, machinery and equipment on
of land and which tend directly to meet the needs of said
the Site used in connection with the Power Barges
industry or work.[51] which have been supplied by it at its own cost. POLAR
shall operate, manage and maintain the Power Barges
for the purpose of converting Fuel of NAPOCOR into
electricity.[52]
FELS still cannot find solace in this provision because
Section 5.5, Article 5 of the Agreement provides:

It follows then that FELS cannot escape liability from OPERATION. POLAR undertakes that until
the end of the Lease Period, subject to the supply of
the payment of realty taxes by invoking its exemption in the necessary Fuel pursuant to Article 6 and to the
Section 234 (c) of R.A. No. 7160, which reads: other provisions hereof, it will operate the Power
Barges to convert such Fuel into electricity in
SECTION 234. Exemptions from Real accordance with Part A of Article 7.[53]
Property Tax. The following are exempted from
payment of the real property tax:

xxx It is a basic rule that obligations arising from a


contract have the force of law between the parties. Not
(c) All machineries and equipment that are
being contrary to law, morals, good customs, public order
actually, directly and exclusively used by local
water districts and government-owned or or public policy, the parties to the contract are bound by its
controlled corporations engaged in the supply terms and conditions.[54]
and distribution of water and/or generation and
transmission of electric power; x x x
Time and again, the Supreme Court has stated that
taxation is the rule and exemption is the exception.[55] The
Indeed, the law states that the machinery must be law does not look with favor on tax exemptions and the
actually, directly and exclusively used by the government entity that would seek to be thus privileged must justify it
owned or controlled corporation; nevertheless, petitioner by words too plain to be mistaken and too categorical to be
misinterpreted.[56] Thus, applying the rule of strict security against its abuse is to be found only in the
construction of laws granting tax exemptions, and the rule responsibility of the legislature which imposes the tax on
that doubts should be resolved in favor of provincial the constituency who are to pay for it.[57] The right of local
corporations, we hold that FELS is considered a taxable government units to collect taxes due must always be
entity. upheld to avoid severe tax erosion. This consideration is
consistent with the State policy to guarantee the autonomy
The mere undertaking of petitioner NPC under of local governments[58] and the objective of the Local
Section 10.1 of the Agreement, that it shall be responsible Government Code that they enjoy genuine and meaningful
for the payment of all real estate taxes and assessments, local autonomy to empower them to achieve their fullest
does not justify the exemption. The privilege granted to development as self-reliant communities and make them
petitioner NPC cannot be extended to FELS. The covenant effective partners in the attainment of national goals.[59]
is between FELS and NPC and does not bind a third person
not privy thereto, in this case, the Province of Batangas. In conclusion, we reiterate that the power to tax is the
most potent instrument to raise the needed revenues to
It must be pointed out that the protracted and finance and support myriad activities of the local
circuitous litigation has seriously resulted in the local government units for the delivery of basic services essential
governments deprivation of revenues. The power to tax is to the promotion of the general welfare and the
an incident of sovereignty and is unlimited in its magnitude, enhancement of peace, progress, and prosperity of the
acknowledging in its very nature no perimeter so that people.[60]
Associate Justice
WHEREFORE, the Petitions are DENIED and the
assailed Decisions and Resolutions AFFIRMED.

SO ORDERED.
ATTESTATION
ROMEO J. CALLEJO, SR.
Associate Justice
I attest that the conclusions in the above Decision had
been reached in consultation before the case was assigned
WE CONCUR: to the writer of the opinion of the Courts Division.

CONSUELO
YNARES-SANTIAGO
CONSUELO YNARES-SANTIAGO MA. ALICIA Associate Justice
AUSTRIA-MARTINEZ Chairperson
Associate Justice Associate Justice

CERTIFICATION
MINITA V. CHICO-NAZARIO
Pursuant to Section 13, Article VIII of the
Constitution and the Division Chairpersons Attestation, it is
hereby certified that the conclusions in the above decision
were reached in consultation before the case was assigned
to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice

Republic of the Philippines


Supreme Court
Manila

FIRST DIVISION

PRISCILLA ALMA JOSE, G.R. No. 158239


Petitioner, interlocutory but a final order because it puts an end to the
Present: particular matter involved, or settles definitely the matter
therein disposed of, as to leave nothing for the trial court to
CORONA, C.J., do other than to execute the order.[1] Accordingly, the
Chairperson, claiming party has a fresh period of 15 days from notice of
- versus - LEONARDO-DE the denial within which to appeal the denial.[2]
CASTRO,
BERSAMIN, Antecedents
*
ABAD, and
VILLARAMA, JR., JJ. On September 8, 1979, Margarita Marquez Alma
RAMON C. JAVELLANA, Promulgated:
Jose (Margarita) sold for consideration of P160,000.00 to
ET AL., respondent Ramon Javellana by deed of conditional sale
Respondents. January 25, 2012
two parcels of land with areas of 3,675 and 20,936 square
x----------------------------------------------------------------------- meters located in Barangay Mallis, Guiguinto, Bulacan.
------------------x They agreed that Javellana would pay P80,000.00 upon the
execution of the deed and the balance of P80,000.00 upon
DECISION the registration of the parcels of land under the Torrens
System (the registration being undertaken by Margarita
BERSAMIN, J.: within a reasonable period of time); and that should
Margarita become incapacitated, her son and
attorney-in-fact, Juvenal M. Alma Jose (Juvenal), and her
The denial of a motion for reconsideration of an order
daughter, petitioner Priscilla M. Alma Jose, would receive
granting the defending partys motion to dismiss is not an
the payment of the balance and proceed with the application balance of the purchase price to Juvenal on different dates
for registration.[3] upon Juvenals representation that Margarita had needed
funds for the expenses of registration and payment of real
After Margarita died and with Juvenal having estate tax; and that in 1996, Priscilla had called to inquire
predeceased Margarita without issue, the vendors about the mortgage constituted on the parcels of land; and
undertaking fell on the shoulders of Priscilla, being that he had told her then that the parcels of land had not
Margaritas sole surviving heir. However, Priscilla did not been mortgaged but had been sold to him.[5]
comply with the undertaking to cause the registration of the
properties under the Torrens System, and, instead, began to Javellana prayed for the issuance of a temporary
improve the properties by dumping filling materials therein restraining order or writ of preliminary injunction to restrain
with the intention of converting the parcels of land into a Priscilla from dumping filling materials in the parcels of
residential or industrial subdivision.[4] Faced with Priscillas land; and that Priscilla be ordered to institute registration
refusal to comply, Javellana commenced on February 10, proceedings and then to execute a final deed of sale in his
1997 an action for specific performance, injunction, and favor.[6]
damages against her in the Regional Trial Court in Malolos,
Bulacan (RTC), docketed as Civil Case No. 79-M-97 Priscilla filed a motion to dismiss, stating that the
entitled Ramon C. Javellana, represented by Atty. complaint was already barred by prescription; and that the
Guillermo G. Blanco v. Priscilla Alma Jose. complaint did not state a cause of action.[7]

In Civil Case No. 79-M-97, Javellana averred that The RTC initially denied Priscillas motion to dismiss
upon the execution of the deed of conditional sale, he had on February 4, 1998.[8] However, upon her motion for
paid the initial amount of P80,000.00 and had taken reconsideration, the RTC reversed itself on June 24, 1999
possession of the parcels of land; that he had paid the and granted the motion to dismiss, opining that Javellana
had no cause of action against her due to her not being inherited from Margarita was the obligation to register them
bound to comply with the terms of the deed of conditional under the Torrens System.[12]
sale for not being a party thereto; that there was no evidence
showing the payment of the balance; that he had never On June 21, 2000, the RTC denied the motion for
demanded the registration of the land from Margarita or reconsideration for lack of any reason to disturb the order of
Juvenal, or brought a suit for specific performance against June 24, 1999.[13]
Margarita or Juvenal; and that his claim of paying the
balance was not credible.[9] Accordingly, Javellana filed a notice of appeal from
the June 21, 2000 order,[14] which the RTC gave due course
Javellana moved for reconsideration, contending that to, and the records were elevated to the Court of Appeals
the presentation of evidence of full payment was not (CA).
necessary at that stage of the proceedings; and that in
resolving a motion to dismiss on the ground of failure to In his appeal (C.A.-G.R. CV No. 68259), Javellana
state a cause of action, the facts alleged in the complaint submitted the following as errors of the RTC,[15] to wit:
were hypothetically admitted and only the allegations in the
complaint should be considered in resolving the I
motion.[10] Nonetheless, he attached to the motion for THE TRIAL COURT GRIEVOUSLY ERRED
reconsideration the receipts showing the payments made to IN NOT CONSIDERING THE FACT THAT
Juvenal.[11] Moreover, he maintained that Priscilla could no PLAINTIFF-APELLANT HAD LONG
COMPLIED WITH THE FULL PAYMENT OF
longer succeed to any rights respecting the parcels of land
THE CONSIDERATION OF THE SALE OF
because he had meanwhile acquired absolute ownership of
THE SUBJECT PROPERTY AND HAD
them; and that the only thing that she, as sole heir, had IMMEDIATELY TAKEN ACTUAL AND
PHYSICAL POSSESSION OF SAID
PROPERTY UPON THE SIGNING OF THE IV
CONDITIONAL DEED OF SALE; THE TRIAL COURT ERRED IN DISMISSING
THE AMENDED COMPLAINT WITHOUT
II HEARING THE CASE ON THE MERITS.
THE TRIAL COURT OBVIOUSLY ERRED IN
MAKING TWO CONFLICTING Priscilla countered that the June 21, 2000 order was
INTERPRETATIONS OF THE PROVISION not appealable; that the appeal was not perfected on time;
OF THE CIVIL [CODE], PARTICULARLY and that Javellana was guilty of forum shopping.[16]
ARTICLE 1911, IN THE LIGHT OF THE
It appears that pending the appeal, Javellana also
TERMS OF THE CONDITIONAL DEED OF
filed a petition for certiorari in the CA to assail the June 24,
SALE;
1999 and June 21, 2000 orders dismissing his complaint
(C.A.-G.R. SP No. 60455). On August 6, 2001, however,
III the CA dismissed the petition for certiorari,[17] finding that
THE TRIAL COURT ERRED IN HOLDING the RTC did not commit grave abuse of discretion in issuing
THAT DEFENDANT-APPELLEE BEING the orders, and holding that it only committed, at most, an
NOT A PARTY TO THE CONDITIONAL error of judgment correctible by appeal in issuing the
DEED OF SALE EXECUTED BY HER challenged orders.
MOTHER IN FAVOR OF PLAINTFF-
APPELLANT IS NOT BOUND THEREBY On November 20, 2002, the CA promulgated its
AND CAN NOT BE COMPELLED TO DO decision in C.A.-G.R. CV No. 68259,[18] reversing and
THE ACT REQUIRED IN THE SAID DEED setting aside the dismissal of Civil Case No. 79-M-97, and
OF CONDITIONAL SALE;
remanding the records to the RTC for further proceedings in
accordance with law.[19] The CA explained that the of technicalities, such that even if an appeal was filed out of
complaint sufficiently stated a cause of action; that Priscilla, time, the appellate court was given the discretion to
as sole heir, succeeded to the rights and obligations of nonetheless allow the appeal for justifiable reasons.
Margarita with respect to the parcels of land; that
Margaritas undertaking under the contract was not a purely Issues
personal obligation but was transmissible to Priscilla, who
was consequently bound to comply with the obligation; that Priscilla then brought this appeal, averring that the
the action had not yet prescribed due to its being actually CA thereby erred in not outrightly dismissing Javellanas
one for quieting of title that was imprescriptible brought by appeal because: (a) the June 21, 2000 RTC order was not
Javellana who had actual possession of the properties; and appealable; (b) the notice of appeal had been filed belatedly
that based on the by three days; and (c) Javellana was guilty of forum
complaint, Javellana had been in actual possession since shopping for filing in the CA a petition for certiorari to
1979, and the cloud on his title had come about only when assail the orders of the RTC that were the subject matter of
Priscilla had started dumping filling materials on the his appeal pending in the CA. She posited that, even if the
premises.[20] CAs decision to entertain the appeal was affirmed, the
RTCs dismissal of the complaint should nonetheless be
On May 9, 2003, the CA denied the motion for upheld because the complaint stated no cause of action, and
reconsideration, [21] stating that it decided to give due course the action had already prescribed.
to the appeal even if filed out of time because Javellana had
no intention to delay the proceedings, as in fact he did not On his part, Javellana countered that the errors being
even seek an extension of time to file his appellants brief; assigned by Priscilla involved questions of fact not proper
that current jurisprudence afforded litigants the amplest for the Court to review through petition for review
opportunity to present their cases free from the constraints on certiorari; that the June 21, 2000 RTC order, being a
final order, was appealable; that his appeal was perfected on be taken from an order denying a motion for
time; and that he was not guilty of forum shopping because reconsideration.
at the time he filed the
Priscillas submission is erroneous and cannot be sustained.
petition for certiorari the CA had not yet rendered a
decision in C.A.-G.R. First of all, the denial of Javellanas motion for
CV No. 68259, and because the issue of ownership raised in reconsideration left nothing more to be done by the RTC
C.A.-G.R. CV No. 68259 was different from the issue of because it confirmed the dismissal of Civil Case No.
grave abuse of discretion raised in C.A.-G.R. SP No. 60455. 79-M-97. It was clearly a final order, not an interlocutory
one. The Court has distinguished between final and
Ruling interlocutory orders in Pahila-Garrido v.
[22]
Tortogo, thuswise:
The petition for review has no merit.
The distinction between a final order and an
I interlocutory order is well known. The first
Denial of the motion for reconsideration of the disposes of the subject matter in its entirety or
order of dismissal was a final order and appealable terminates a particular proceeding or action,
leaving nothing more to be done except to
enforce by execution what the court has
determined, but the latter does not completely
Priscilla submits that the order of June 21, 2000 was not the
dispose of the case but leaves something else to
proper subject of an appeal considering that Section 1 of
be decided upon. An interlocutory order deals
Rule 41 of the Rules of Court provides that no appeal may with preliminary matters and the trial on the
merits is yet to be held and the judgment xxx The reason for disallowing an appeal
rendered. The test toascertain whether or not an from an interlocutory order is to avoid
order or a judgment is multiplicity of appeals in a single action, which
necessarily suspends the hearing and decision on
interlocutory or final is: does the order or the merits of the action during the pendency of
judgment leave something to be done in the trial the appeals. Permitting multiple appeals will
court with respect to the merits of the case? If it necessarily delay the trial on the merits of the
does, the order or judgment is interlocutory; case for a considerable length of time, and will
otherwise, it is final. compel the adverse party to incur unnecessary
expenses, for one of the parties may interpose as
And, secondly, whether an order is final or many appeals as there are incidental questions
interlocutory determines whether appeal is the correct raised by him and as there are interlocutory
remedy or not. A final order is appealable, to accord with orders rendered or issued by the lower court. An
interlocutory order may be the subject of an
the final judgment rule enunciated in Section 1, Rule 41 of
appeal, but only after a judgment has been
the Rules of Court to the effect that appeal may be taken
rendered, with the ground for appealing the order
from a judgment or final order that completely disposes of being included in the appeal of the judgment
the case, or of a particular matter therein when declared by itself.
these Rules to be appealable;[23] but the remedy from an
interlocutory one is not an appeal but a special civil action The remedy against an interlocutory order
for certiorari. The explanation for the differentiation of not subject of an appeal is an appropriate special
remedies given in Pahila-Garrido v. Tortogo is apt: civil action under Rule 65, provided that the
interlocutory order is rendered without or in
excess of jurisdiction or with grave abuse of
discretion. Then is certiorari under Rule 65 three days from July 13, 2000, or until July 16, 2000, within
allowed to be resorted to. which to perfect an appeal; and that having filed his notice
of appeal on July 19, 2000, his appeal should have been
Indeed, the Court has held that an appeal from an order dismissed for being tardy by three days beyond the
denying a motion for reconsideration of a final order or expiration of the reglementary period.
judgment is effectively an appeal from the final order or
judgment itself; and has expressly clarified Section 3 of Rule 41 of the Rules of Court provides:
that the prohibition against appealing an order denying a mo
tion for Section 3. Period of ordinary appeal. The
appeal shall be taken within fifteen (15) days
reconsideration referred only to a denial of a motion for from notice of the judgment or final order
reconsideration of an interlocutory order.[24] appealed from. Where a record on appeal is
required, the appellant shall file a notice of
II
appeal and a record on appeal within thirty (30)
Appeal was made on time pursuant to Neypes v. CA
days from notice of the judgment or final order.

Priscilla insists that Javellana filed his notice of The period of appeal shall be interrupted
appeal out of time. She points out that he received a copy of by a timely motion for new trial or
the June 24, 1999 order on July 9, 1999, and filed his reconsideration. No motion for extension of
motion for reconsideration on July 21, 1999 (or after the time to file a motion for new trial or
lapse of 12 days); that the RTC denied his motion for reconsideration shall be allowed. (n)
reconsideration through the order of June 21, 2000, a copy
of which he received on July 13, 2000; that he had only
Under the rule, Javellana had only the balance of of Appeals, particularly Rules 42, 43 and 45, the
three days from July 13, 2000, or until July 16, 2000, within Court allows extensions of time, based on
which to perfect an appeal due to the timely filing of his justifiable and compelling reasons, for parties to
motion for reconsideration interrupting the running of the file their appeals. These extensions may consist
of 15 days or more.
period of appeal. As such, his filing of the notice of appeal
only on July 19, 2000 did not perfect his appeal on time, as
To standardize the appeal periods provided
Priscilla insists. in the Rules and to afford litigants fair
The seemingly correct insistence of Priscilla cannot opportunity to appeal their cases, the Court
be upheld, however, considering that the Court meanwhile deems it practical to allow a fresh period of 15
adopted the fresh period rule in Neypes v. Court of days within which to file the notice of appeal in
Appeals,[25] by which an aggrieved party desirous of the Regional Trial Court, counted from receipt of
appealing an adverse judgment or final order is allowed a the order dismissing a motion for a new trial or
fresh period of 15 days within which to file the notice of motion for reconsideration.
appeal in the RTC reckoned from receipt of the order
denying a motion for a new trial or motion for Henceforth, this fresh period rule shall also
reconsideration, to wit: apply to Rule 40 governing appeals from the
Municipal Trial Courts to the Regional Trial
The Supreme Court may promulgate Courts; Rule 42 on petitions for review from the
procedural rules in all courts. It has the sole Regional Trial Courts to the Court of Appeals;
prerogative to amend, repeal or even establish Rule 43 on appeals from quasi-judicial agencies
new rules for a more simplified and inexpensive to the Court of Appeals and Rule 45 governing
process, and the speedy disposition of cases. In appeals by certiorari to the Supreme Court. The
the rules governing appeals to it and to the Court new rule aims to regiment or make the appeal
period uniform, to be counted from receipt of the right of a person who may feel that he is
order denying the motion for new trial, motion adversely affected, insomuch as there are no
for reconsideration (whether full or partial) or vested rights in rules of procedure.
any final order or resolution.[26]
The fresh period rule is a procedural law as
it prescribes a fresh period of 15 days within
The fresh period rule may be applied to this case, for which an appeal may be made in the event that
the Court has already retroactively extended the fresh the motion for reconsideration is denied by the
period rule to actions pending and undetermined at the time lower court. Following the rule on retroactivity
of procedural laws, the "fresh period rule"
of their passage and this will not violate any right of a
should be applied to pending actions, such as the
person who may feel that he is adversely affected, inasmuch
present case.
as there are no vested rights in rules of
procedure.[27] According to De los Santos v. Vda. de Also, to deny herein petitioners the benefit
Mangubat:[28] of the fresh period rule will amount to injustice,
if not absurdity, since the subject notice of
Procedural law refers to the adjective law judgment and final order were issued two years
which prescribes rules and forms of procedure in later or in the year 2000, as compared to the
order that courts may be able to administer notice of judgment and final order
justice. Procedural laws do not come within the in Neypes which were issued in 1998. It will be
legal conception of a retroactive law, or the incongruous and illogical that parties receiving
general rule against the retroactive operation of notices of judgment and final orders issued in the
statues ― they may be given retroactive effect year 1998 will enjoy the benefit of the fresh
on actions pending and undetermined at the time
of their passage and this will not violate any
period rule while those later rulings of the lower Forum shopping is the act of a party litigant
courts such as in the instant case, will not.[29] against whom an adverse judgment has been
rendered in one forum seeking and possibly
Consequently, we rule that Javellanas notice of getting a favorable opinion in another forum,
appeal was timely filed pursuant to the fresh period rule. other than by appeal or the special civil action
of certiorari, or the institution of two or more
III actions or proceedings grounded on the same
No forum shopping was committed cause or supposition that one or the other court
would make a favorable disposition. Forum
shopping happens when, in the two or more
pending cases, there is identity of parties,
Priscilla claims that Javellana engaged in forum identity of rights or causes of action, and identity
shopping by filing a notice of appeal and a petition of reliefs sought. Where the elements of litis
for certiorari against the same orders. As earlier noted, he pendentia are present, and where a final
denies that his doing so violated the policy against forum judgment in one case will amount to res
shopping. judicata in the other, there is forum shopping.
For litis pendentia to be a ground for the
The Court expounded on the nature and purpose of dismissal of an action, there must be: (a) identity
forum shopping in In Re: Reconstitution of Transfer of the parties or at least such as to represent the
Certificates of Title Nos. 303168 and 303169 and Issuance same interest in both actions; (b) identity of
of Owners Duplicate Certificates of Title In Lieu of Those rights asserted and relief prayed for, the relief
being founded on the same acts; and (c) the
Lost, Rolando Edward G. Lim, Petitioner:[30]
identity in the two cases should be such that the
judgment which may be rendered in one would,
regardless of which party is successful, amount trial courts dismissal orders constituted forum shopping that
to res judicata in the other. warranted the dismissal of both cases. The Court said:

For forum shopping to exist, both actions Ineluctably, the petitioner, by filing an
must involve the same transaction, same ordinary appeal and a petition
essential facts and circumstances and must raise for certiorari with the CA,
identical causes of action, subject matter and engaged in forum shopping. When the petitioner
issues. Clearly, it does not exist where different commenced the appeal, only four months had
orders were questioned, two distinct causes of elapsed prior to her filing with the CA
action and issues were raised, and two objectives the Petition for Certiorari under Rule 65 and
were sought. which eventually came up to this Court by way
of the instant Petition (re: Non-Suit). The
elements of litis pendentia are present between
Should Javellanas present appeal now be held barred
the two suits. As the CA, through its Thirteenth
by his filing of the petition for certiorari in the CA when
Division, correctly noted, both suits are founded
his appeal in that court was yet pending? on exactly the same facts and refer to the same
subject
We are aware that in Young v. Sy,[31] in which the matterthe RTC Orders which dismissed Civil Ca
petitioner filed a notice of appeal to elevate the orders se No. SP-5703 (2000) for
concerning the dismissal of her case due to non-suit to the
CA and a petition for certiorari in the CA assailing the failure to prosecute. In both cases, the petitioner
same orders four months later, the Court ruled that the is seeking the reversal of the RTC orders. The
successive filings of the notice of appeal and the petition parties, the rights asserted, the issues professed,
for certiorari to attain the same objective of nullifying the and the reliefs prayed for, are all the same. It is
evident that the judgment of one forum may contradictory decisions. Unscrupulous party
amount to res judicata in the other. litigants, taking advantage of a variety of
xxxx competent tribunals, may repeatedly try their
The remedies of appeal and certiorari under luck in several different fora until a favorable
Rule 65 are mutually exclusive and not result is reached. To avoid the resultant
alternative or cumulative. This is a firm judicial confusion, the Court adheres strictly to the rules
policy. The petitioner cannot hedge her case by against forum shopping, and any violation of
wagering two or more appeals, and, in the event these rules results in the dismissal of the case.[32]
that the ordinary appeal lags significantly behind
the others, she cannot post facto validate this
circumstance as a demonstration that the The same result was reached in Zosa v.
ordinary appeal had not been speedy or adequate Estrella,[33] which likewise involved the successive filing of
enough, in order to justify the recourse to Rule a notice of appeal and a petition for certiorari to challenge
65. This practice, if adopted, would sanction the the same orders, with the Court upholding the CAs
filing of multiple suits in multiple fora, where
dismissals of the appeal and the petition
each one, as the petitioner couches it, becomes a
for certiorari through separate decisions.
precautionary measure for the rest, thereby
increasing the chances of a favorable decision.
This is the very evil that the proscription Yet, the outcome in Young v. Sy and Zosa v.
on forum shopping seeks to put right. Estrella is unjust here even if the orders of the RTC being
In Guaranteed Hotels, Inc. v. Baltao, the Court challenged through appeal and the petition
stated that the grave evil sought to be avoided by for certiorari were the same. The unjustness exists because
the rule against forum shopping is the rendition the appeal and the petition for certiorari actually sought
by two competent tribunals of two separate and different objectives. In his appeal in C.A.-G.R. CV No.
68259, Javellana aimed to undo the RTCs erroneous decided C.A.-G.R. CV No. 68259 as of the filing of the
dismissal of Civil Case No. 79-M-97 to clear the way for petition for certiorari.
his judicial demand for specific performance to be tried and
determined in due course by the RTC; but his petition Instead, we see the situation of resorting to two
for certiorari had the ostensible objective to prevent inconsistent remedial approaches to be the result of the
(Priscilla) from developing the subject property and from tactical misjudgment by Javellanas counsel on the efficacy
proceeding with the ejectment case until his appeal is of the appeal to stave off his caretakers eviction from the
finally resolved, as the CA explicitly determined in its parcels of land and to prevent the development of them into
decision in C.A.-G.R. SP No. 60455.[34] a residential or commercial subdivision pending the appeal.
In the petition for certiorari, Javellana explicitly averred
Nor were the dangers that the adoption of the judicial that his appeal was inadequate and not speedy to prevent
policy against forum shopping designed to prevent or to private respondent Alma Jose and her transferee/assignee
eliminate attendant. The first danger, i.e., the multiplicity of xxx from developing and disposing of the subject property
suits upon one and the same cause of action, would not to other parties to the total deprivation of petitioners rights
materialize considering that the appeal was a continuity of of possession and ownership over the subject property, and
Civil Case No. 79-M-97, whereas C.A.-G.R. SP No. 60455 that the dismissal by the RTC had emboldened private
dealt with an independent ground of alleged grave abuse of respondents to fully develop the property and for
discretion amounting to lack or excess of jurisdiction on the respondent Alma Jose to file an ejectment case against
part of the RTC. The second danger, i.e., the unethical petitioners overseer xxx.[35] Thereby, it became far-fetched
malpractice of shopping for a friendly court or judge to that Javellana brought the petition for certiorari in violation
ensure a favorable ruling or judgment after not getting it in of the policy against forum shopping.
the appeal, would not arise because the CA had not yet
WHEREFORE, the Court DENIES the petition for review TERESITA J. LEONARDO-DE CASTRO ROBERTO A.
on certiorari; AFFIRMS the decision promulgated on ABAD
November 20, 2002; and ORDERS the petitioner to pay the Associate Justice Associate Justice
costs of suit.

SO ORDERED.

LUCAS P. BERSAMIN MARTIN S. VILLARAMA, JR.


Associate Justice Associate Justice

WE CONCUR: CERTIFICATION

RENATO C. CORONA
Chief Justice Pursuant to Section 13, Article VIII of the Constitution, it is
Chairperson hereby certified that the conclusions in the above decision
had been reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.

RENATO C. CORONA
Chief Justice

SECOND DIVISION

G.R. No. 209605, January 12, 2015

NEIL B. AGUILAR AND RUBEN CALIMBAS, Petitioners, v. LIGHTBRINGERS


CREDIT COOPERATIVE, Respondent.
DECISION 2. In Civil Case No. 1429, petitioner
MENDOZA, J.: Calimbas allegedly borrowed P202,800.18
as evidenced by Cash Disbursement
This is a petition for review on certiorari filed by petitioners Neil B. Aguilar (Aguilar)
and Ruben Calimbas (Calimbas), seeking to reverse and set aside the April 5, 20131�
Voucher No. 3962 but the net loan was only
and October 9, 20132 Resolutions of the Court of Appeals (CA) in CA-G.R. SP No. P60,024.00 as supported by PNB Check No.
128914, which denied the petition for review outright, assailing the January 2, 2013 6
Decision3 of the Regional Trial Court, Branch 5, Dinalupihan, Bataan (RTC) and the 0000005088; chanRobl esvirt ualLaw librar y

May 9, 2012 Decision4 of the First Municipal Circuit Trial Court, Dinalupihan,
Bataan (MCTC).
3. In Civil Case No. 1430, petitioner
In the lower courts, one of the issues involved was the proper application of the rules Aguilar allegedly borrowed P126,849.00
when a party does not appear in the scheduled pre-trial conference despite due notice.
In this petition, the dismissal by the CA of the petition filed under Rule 42 for failure as evidenced by Cash Disbursement
to attach the entire records has also been put to question, aside from the veracity of Voucher No. 3902 but the net loan was only
indebtedness issue.
P76,152.00 as supported by PNB Check No.
The Facts
0000005026;7
This case stemmed from the three (3) complaints for sum of money separately filed
by respondent Lightbringers Credit Cooperative (respondent) on July 14, 2008
against petitioners Aguilar and Calimbas, and one Perlita Tantiangco, Aguilar and Calimbas filed their respective answers. They uniformly
Tantiangco (Tantiangco) which were consolidated before the First Municipal Circuit claimed that the discrepancy between the principal amount of the loan evidenced by
Trial Court, Dinalupihan, Bataan (MCTC). The complaints alleged that Tantiangco, the cash disbursement voucher and the net amount of loan reflected in the PNB
Aguilar and Calimbas� were members of the cooperative who borrowed the following checks showed that they never borrowed the amounts being collected. They also
funds:chanroble svirtual lawlib rary asserted that no interest could be claimed because there was no written agreement
as to its imposition.

1. In Civil Case No. 1428, Tantiangco On the scheduled pre-trial conference, only respondent and its counsel appeared. The
allegedly borrowed P206,315.71 as MCTC then issued the Order,8 dated August 25, 2009, allowing respondent to present
evidence ex parte. Respondent later presented Fernando Manalili (Manalili), its
evidenced by Cash Disbursement Voucher incumbent General Manager, as its sole witness. In his testimony, Manalili explained
that the discrepancy between the amounts of the loan reflected in the checks and
No. 4010 but the net loan was only those in the cash disbursement vouchers were due to the accumulated interests from
P45,862.00 as supported by PNB Check No. previous outstanding obligations, withheld share capital, as well as the service and
miscellaneous fees. He stated, however, that it was their bookkeeper who could best
0000005133.5chanRobl esvirt ualLaw librar y

explain the details.


against the defendant, ordering the latter to
Aguilar and Calimbas insisted that they should have the right to cross-examine the
witness of respondent, notwithstanding the fact that these cases were being heard ex pay plaintiff the amount of P60,024.00 with
parte. In the interest of justice, the MCTC directed the counsels of the parties to
submit their respective position papers on the issue of whether or not a party who had
interest at the rate of 12% per annum from April
been declared �as in default� might still participate in the trial of the case. Only 4, 2007 until fully paid, plus P15,000.00 as
respondent, however, complied with the directive. In its Order,9 dated April 27, 2011,
the MCTC held that since the proceedings were being heard ex parte, the petitioners attorney�s fees.
who had been declared �as in default� had no right to participate therein and to
cross-examine the witnesses. Thereafter, respondent filed its formal offer of
evidence.10 chanRoblesvirtua lLaw lib rary Costs against the defendant.
MCTC Ruling
SO ORDERED.14
On May 9, 2012, the MCTC resolved the consolidated cases in three separate
decisions. In Civil Case No. 1428,11 the MCTC dismissed the complaint against
Tantiangco because there was no showing that she received the amount being And in Civil Case No. 1430, the dispositive portion states: chanroblesv irt uallawl ibra ry

claimed. Moreover, the PNB check was made payable to �cash� and was encashed
by a certain Violeta Aguilar. There was, however, no evidence that she gave the
proceeds to Tantiangco. Further, the dates indicated in the cash disbursement WHEREFORE, premises considered, judgment is
voucher and the PNB check varied from each other and suggested that the voucher hereby rendered in plaintiff�s favor and
could refer to a different loan.
against the defendant, ordering the latter to
The decisions in Civil Case No. 142912 and 1430,13 however, found both Calimbas and
Aguilar liable to respondent for their respective debts. The PNB checks issued to the
pay the plaintiff the amount of ?76,152.00 with
petitioners proved the existence of the loan transactions. Their receipts of the loan interest at the rate of 12% per annum from
were proven by their signatures appearing on the dorsal portions of the checks as well
as on the cash disbursement vouchers. As a matter of practice, banks would allow the February 28, 2007 until fully paid.
encashment of checks only by the named payee and subject to the presentation of
proper identification. Nonetheless, the MCTC ruled that only the amount shown in the
PNB check must be awarded because respondent failed to present its bookkeeper to Defendant is further directed to pay
justify the higher amounts being claimed. The court also awarded attorney�s fees in
favor of respondent. The dispositive portion of the decision in Civil Case No. 1429
attorney�s fees equivalent to 25% of the
reads:chanrob lesvi rtua llawli bra ry
adjudged amount.

WHEREFORE, premises considered, judgment is


Costs against the defendant.
hereby rendered in plaintiff�s favor and
trial20 before the RTC. Aguilar and Calimbas reiterated their position that they did not
receive the proceeds of the checks. As an alternative prayer, petitioners moved that
SO ORDERED.15 the RTC remand the case to the MCTC for a new trial on account of the Sinumpaang
Salaysay of Arcenit Dela Torre, the bookkeeper of respondent.

On July 12, 2012, a notice of appeal16 was filed by the petitioners, and on August 15, On February 11, 2013, the RTC issued separate orders21 denying the motion of the
2012, they filed their joint memorandum for appeal17 before the Regional Trial Court, petitioners. It explained that all the issues were already passed upon and the
Branch 5, Bataan (RTC). Aguilar and Calimbas argued out that had they been allowed supposed newly discovered evidence was already available during appeal, but the
to present evidence, they would have established that the loan documents were petitioners failed to present the same in time.
bogus. Respondent produced documents to appear that it had new borrowers but did
not lend any amount to them. Attached to the joint memorandum were photocopies CA Ruling
of the dorsal portions of the PNB checks which showed that these checks were to be
deposited back to respondent�s bank account. Aggrieved, Aguilar and Calimbas filed a petition for review22 before the CA on March
11, 2013. It was dismissed, however, in the questioned resolution,23 dated April 5,
RTC Ruling 2013, stating that the petition was formally defective because the �verification and
disclaimer of forum shopping� and the �affidavit of service� had a
On January 2, 2013, the RTC rendered separate decisions in Civil Case No. defective jurat for failure of the notary public to indicate his notarial commission
DH-1300-1218 and Civil Case No. DH-1299-1219 which affirmed the MCTC decisions. number and office address. Moreover, the entire records of the case, inclusive of the
It held that the PNB checks were concrete evidence of the indebtedness of the oral and documents evidence, were not attached to the petition in contravention of
petitioners to respondent. The RTC relied on the findings of the MCTC that the checks Section 2, Rule 42 of the Rules of Court.
bore no endorsement to another person or entity. The checks were issued in the
name of the petitioners and, thus, they had the right to encash the same and A motion for reconsideration24 was filed by the petitioners which sought the leniency
appropriate the proceeds. The decretal portions of the RTC decision in both cases of the CA. They attached a corrected verification and disclaimer of forum shopping
similarly read:
chanroblesv irtuallaw lib rary and affidavit of service. They asked the CA to simply order the RTC to elevate the
records of the case pursuant to Section 7, Rule 42 of the Rules of Court. Moreover, the
petitioners could not attach the records of the case because the flooding caused by
WHEREFORE, premises considered, the appeal is �Habagat� in August 2012 soaked the said records in water.
hereby DENIED. The Decision dated May 9, 2012
In the other questioned resolution, dated October 9, 2013, the CA denied the motion
of the First Municipal Circuit Trial Court because the petitioners still failed to attach the entire records of the case which was
(1st MCTC), Dinalupihan-Hermosa, Bataan is a mandatory requirement under Section 2, Rule 42.

hereby affirmed in toto. Hence, this petition.

SOLE ASSIGNMENT OF ERROR


SO ORDERED.

On January 18, 2013, the petitioners filed their joint motion for reconsideration/new
Assuming that there was a reason to dismiss the petition on account of technicalities,
THE COURT OF APPEALS COMMITTED the petitioners argue that the CA should not have strictly applied the rules of
procedure and provided leniency to the petitioners. They also ask the Court to give a
GRAVE ABUSE OF DISCRETION glance on the merits of their case brought before the CA.
AMOUNTING TO LACK OR IN EXCESS OF
On February 7, 2014, respondent filed its comment26 contending that the petitioners
JURISDICTION WHEN IT DISMISSED THE had no excuse in their non-compliance with Section 2, Rule 42. They claim that the
PETITION FOR REVIEW FILED BEFORE court records were not attached because these were soaked in flood water in August
2012, but the RTC rendered its decision in January 2013. The petitioners failed to
IT BY THE PETITIONERS UNDER RULE 42 secure a certification from the RTC that these records were indeed unavailable.

OF THE RULES OF COURT CITING THAT On May 21, 2014, the petitioners filed their reply before this Court,27 adding that the
THE SAID PETITION IS FORMALLY elevation of the entire records of the case was not a mandatory requirement, and the
CA could exercise its discretion that it furnished with the entire records of the case by
DEFECTIVE FOR FAILURE OF THE invoking Section 7, Rule 42 of the Rules of Court. cralawred

PETITIONERS TO SUBMIT WITH THE


The Court�s Ruling
SAID PETITION THE ENTIRE RECORDS
OF THE APPEALED CIVIL CASE NOS.
DH-1300-12 AND DH-1299-12.25 First Procedural Issue

On the sole assignment of error, the Court agrees with the petitioners that Section 2,
The petitioners argue that contrary to the findings of the CA, they substantially Rule 42 does not require that the entire records of the case be attached to the petition
complied with the required form and contents of a petition for review under Section 2, for review. The provision states: chanrob lesvi rtua llawli bra ry

Rule 42 of the Rules of Court. There is nothing in the provision which requires that the
entire records of the appealed case should be endorsed to the CA. Such requirement Sec. 2. Form and contents. - The petition shall
would definitely be cumbersome to poor litigants like them.
be filed in seven (7) legible copies, with the
They assert that they submitted the following pleadings and material portions of the
court records in their petition for review: (1) certified copies of the decisions, orders
original copy intended for the court being
or resolutions of the RTC and the MCTC; (2) complaints against the petitioners indicated as such by the petitioner, and shall
attached with documents used by respondent in its formal offer of evidence; (3)
answer of the petitioners;� (4) order of the MCTC declaring the petitioners in default; (a) state the full names of the parties to the
(5) respondent�s formal offer of evidence; (6) notice of appeal; (7) joint case, without impleading the lower courts or
memorandum of appeal; and (8) joint motion for reconsideration/new trial. According
to the petitioners, these pleadings and records were sufficient to support their judges thereof either as petitioners or
petition for review.
respondents; (b) indicate the specific Sec. 3. Effect of failure to comply with
material dates showing that it was filed on time; requirements. - The failure of the petitioner
(c) set forth concisely a statement of the to comply with any of the foregoing
matters involved, the issues raised, the requirements regarding the payment of the
specification of errors of fact or law, or both, docket and other lawful fees, the deposit for
allegedly committed by the Regional Trial Court, costs, proof of service of the petition, and the
and the reasons or arguments relied upon for the contents of and the documents which should
allowance of the appeal; (d) be accompanied by accompany the petition shall be sufficient
clearly legible duplicate originals or true ground for the dismissal thereof.
copies of the judgments or final orders of both
lower courts, certified correct by the clerk of In Canton v. City of Cebu,28 the Court discussed the importance of attaching the
pleadings or material portions of the records to the petition for review.
court of the Regional Trial Court, the �[P]etitioner�s discretion in choosing the documents to be attached to the petition is
however not unbridled. The CA has the duty to check the exercise of this discretion,
requisite number of plain copies thereof and of
to see to it that the submission of supporting documents is not merely perfunctory.
the pleadings and other material portions of The practical aspect of this duty is to enable the CA to determine at the earliest
possible time the existence of prima facie merit in the petition.�29 In that case, the
the record as would support the allegations of petition was denied because the petitioner failed to attach the complaint, answer and
the petition. [Emphasis and underscoring appeal memorandum to support their allegation.

supplied] In Cusi-Hernandez v. Diaz,30 a case where the petitioner did not attach to her petition
for review a copy of the contract to sell that was at the center of controversy, the
Court nonetheless found that there was a substantial compliance with the rule,
The abovequoted provision enumerates the required documents that must be considering that the petitioner had appended to the petition for review a certified
attached to a petition for review, to wit: (1) clearly legible duplicate originals or true copy of the decision of the MTC that contained a verbatim reproduction of the omitted
copies of the judgments or final orders of both lower courts, certified correct by the contract.
clerk of court of the Regional Trial Court; (2) the requisite number of plain copies
thereof; and (3) of the pleadings and other material portions of the record as would Recently, in Galvez, v. CA,31 it was held that attaching the other records of the MTC
support the allegations of the petition. Clearly, the Rules do not require that the entire and the RTC were not necessary based on the circumstances of the case. The
records of the case be attached to the petition for review. Only when these specified petitioner therein was not assailing the propriety of the findings of fact by the MTC
documents are not attached in the petition will it suffer infirmities under Section 3, and the RTC, but only the conclusions reached by the said lower courts after their
Rule 42, which states: chanroblesvi rt uallawl ibra ry

appreciation of the facts. In dealing with the questions of law, the CA could simply
refer to the attached decisions of the MTC and the RTC.
Sec. 2. A party who fails to appear
Thus, the question in the case at bench is whether or not the petitioners attached the
sufficient pleadings and material portions of the records in their petition for review. at a pre-trial conference may be
The Court rules that the petition was in substantial compliance with the requirements.
non-suited or considered as in
The assignment of error32 in the petition for review clearly raises questions of fact as default.
the petitioners assail the appreciation of evidence by the MCTC and the RTC. Thus,
aside from the decisions and orders of the MCTC and the RTC, the petitioners should
attach pertinent portions of the records such as the testimony of the sole witness of
It was however amended in the 1997 Revised Rules
respondent, the copies of the cash disbursement vouchers and the PNB checks of Civil Procedure. Justice Regalado, in his
presented by respondent in the MCTC. In the petition for review, the petitioners
attached respondent�s complaints before the MCTC which contained the photocopies book REMEDIAL LAW COMPENDIUM, explained the
of the cash disbursement vouchers and PNB checks. These should be considered as rationale for the deletion of the phrase "as in
ample compliance with Section 2, Rule 42 of the Rules of Court.
default" in the amended provision, to wit: ChanRobl esVirt ualawl ibrary

Second Procedural Issue


1. This is a substantial
Nevertheless, instead of remanding the case to the CA, this Court deems it fit to rule
on the merits of the case to once and for all settle the dispute of the parties. reproduction of Section 2 of the
The rule is that a court can only consider the evidence presented by respondent in the
former Rule 20 with the change that,
MCTC because the petitioners failed to attend the pre-trial conference on August 25, instead of defendant being
2009 pursuant to Section 5, Rule 18 of the Rules of Court.33 The Court, however,
clarifies that failure to attend the pre-trial does not result in the �default� of the declared "as in default" by reason
defendant. Instead, the failure of the defendant to attend shall be cause to allow the of his non-appearance, this
plaintiff to present his evidence ex parte and the court to render judgment on the
basis thereof. section now spells out that the
The case of Philippine American Life & General Insurance Company v. Joseph
procedure will be to allow the ex
Enario34 discussed the difference between non-appearance of a defendant in a parte presentation of
pre-trial conference and the declaration of a defendant in default in the present Rules
of Civil Procedure. The decision states:chanrob lesvi rtua llawlib ra ry
plaintiff�s evidence and the
rendition of judgment on the basis
Prior to the 1997 Revised Rules of Civil thereof. While actually the
Procedure, the phrase "as in default" was procedure remains the same, the
initially included in Rule 20 of the old rules, purpose is one of semantical
and which read as follows: ChanRobl esVirt ualawl ibrary
propriety or terminological This gave Aguilar and Calimbas a second chance to explain their non-attendance and,
yet, only respondent complied with the directive to file a position paper. The MCTC, in
accuracy as there were criticisms its Order,39 dated April 27, 2011, properly held that since the proceedings were being
heard ex parte, Aguilar and Calimbas had no right to participate therein and to
on the use of the word "default" in cross-examine the witness.
the former provision since that
Thus, as it stands, the Court can only consider the evidence on record offered by
term is identified with the respondent. The petitioners lost their right to present their evidence during the trial
failure to file a required answer, and, a fortiori, on appeal due to their disregard of the mandatory attendance in the
pre-trial conference.
not appearance in court.
Substantive Issue

If the absent party is the plaintiff, then his case shall be dismissed. If it is the And on the merits of the case, the Court holds that there was indeed a contract of loan
defendant who fails to appear, then the plaintiff is allowed to present his evidence ex between the petitioners and respondent. The Court agrees with the findings of fact of
parte and the court shall render judgment on the basis thereof. Thus, the plaintiff is the MCTC and the RTC that a check was a sufficient evidence of a loan transaction.
given the privilege to present his evidence without objection from the defendant, the The findings of fact of the trial court, its calibration of the testimonies of the witnesses
likelihood being that the court will decide in favor of the plaintiff, the defendant and its assessment of the probative weight thereof, as well as its conclusions
having forfeited the opportunity to rebut or present his own evidence.35 chanRoblesvirtual Lawlib ra ry anchored on the findings are accorded high respect, if not conclusive effect.40 chanRoblesvirtual Lawlib ra ry

The pre-trial cannot be taken for granted. It is not a mere technicality in court The case of Pua v. Spouses Lo Bun Tiong41 discussed the weight of a check as an
proceedings for it serves a vital objective: the simplification, abbreviation and evidence of a loan: chanro blesvi rt uallawl ibra ry

expedition of the trial, if not indeed its dispensation.36More significantly, the pre-trial
has been institutionalized as the answer to the clarion call for the speedy disposition
of cases. Hailed as the most important procedural innovation in Anglo-Saxon justice
In Pacheco v. Court of Appeals, this Court has
in the nineteenth century, it paved the way for a less cluttered trial and resolution of expressly recognized that a check constitutes
the case. It is, thus, mandatory for the trial court to conduct pre-trial in civil cases in
order to realize the paramount objective of simplifying, abbreviating and expediting an evidence of indebtedness and is a veritable
trial.37
chanRoblesvi rtua lLaw lib rary

proof of an obligation. Hence, it can be used


In the case at bench, the petitioners failed to attend the pre-trial conference set on in lieu of and for the same purpose as a
August 25, 2009. They did not even give any excuse for their non-appearance,
manifestly ignoring the importance of the pre-trial stage. Thus, the MCTC properly
promissory note. In fact, in the seminal case
issued the August 25, 2009 Order,38 allowing respondent to present evidence ex of Lozano v. Martinez, We pointed out that a
parte.
check functions more than a promissory note
The MCTC even showed leniency when it directed the counsels of the parties to since it not only contains an undertaking to pay
submit their respective position papers on whether or not Aguilar and Calimbas could
still participate in the trial of the case despite their absence in the pre-trial conference. an amount of money but is an "order addressed
to a bank and partakes of a representation that attorney's fees is, however, DELETED.

the drawer has funds on deposit against which SO ORDERED. cralawlawlibra ry

the check is drawn, sufficient to ensure Carpio, (Chairperson), Velasco, Jr.,* Del Castillo, and Leonen, JJ., concur.
payment upon its presentation to the bank."
This Court reiterated this rule in the
relatively recent Lim v. Mindanao Wines and
Liquour Galleria stating that a check, the
entries of which are in writing, could prove a
loan transaction.42

There is no dispute that the signatures of the petitioners were present on both the
PNB checks and the cash disbursement vouchers. The checks were also made payable
to the order of the petitioners. Hence, respondent can properly demand that they pay
the amounts borrowed. If the petitioners believe that there is some other bogus
scheme afoot, then they must institute a separate action against the responsible
personalities.� Otherwise, the Court can only rule on the evidence on record in the
case at bench, applying the appropriate laws and jurisprudence.

As to the award of attorney�s fees, the Court is of the view that the same must be
removed. Attorney's fees are in the concept of actual or compensatory damages
allowed under the circumstances provided for in Article 2208 of the Civil Code, and
absent any evidence supporting its grant, the same must be deleted for lack of factual
basis.43 In this case, the MCTC merely stated that respondent was constrained to file
the present suit on account of the petitioners� obstinate failure to settle their
obligation. Without any other basis on record to support the award, such cannot be
upheld in favor of respondent. The settled rule is that no premium should be placed
on the right to litigate and that not every winning party is entitled to an automatic
grant of attorney�s fees.44chanRoblesvirtual Lawlib ra rychanro bles law

WHEREFORE, the petition is PARTIALLY GRANTED.

In accord with the discourse on the substantive issue, the January 2, 2013 decision of
the Regional Trial Court, Branch 5, Dinalupihan, Bataan, is AFFIRMED. The award of