G.R. No.
191424 August 7, 2013 31, 2008; and 3] take appropriate action necessary to address the violations/exceptions noted in the
ALFEO D. VIVAS, ON HIS BEHALF AND ON BEHALF OF THE SHAREHOLDERS OF
EUROCREDIT COMMUNITY BANK, PETITIONER,
vs.
THE MONETARY BOARD OF THE BANGKO SENTRAL NG PILIPINAS AND THE
PHILIPPINE DEPOSIT INSURANCE CORPORATION, RESPONDENTS.
DECISION
MENDOZA, J.:
This is a petition for prohibition with prayer for the issuance of a status quo ante order or writ of
preliminary injunction ordering the respondents to desist from closing EuroCredit Community Bank,
Incorporated (ECBI) and from pursuing the receivership thereof. The petition likewise prays that the
management and operation of ECBI be restored to its Board of Directors (BOD) and its officers.
The Facts
The Rural Bank of Faire, Incorporated (RBFI) was a duly registered rural banking institution with principal
office in Centro Sur, Sto. Niño, Cagayan. Record shows that the corporate life of RBFI expired on May 31,
2005.1Notwithstanding, petitioner Alfeo D. Vivas (Vivas) and his principals acquired the controlling
interest in RBFI sometime in January 2006. At the initiative of Vivas and the new management team, an
internal audit was conducted on RBFI and results thereof highlighted the dismal operation of the rural
bank. In view of those findings, certain measures calculated to revitalize the bank were allegedly
introduced.2 On December 8, 2006, the Bangko Sentral ng Pilipinas (BSP) issued the Certificate of
Authority extending the corporate life of RBFI for another fifty (50) years. The BSP also approved the
change of its corporate name to EuroCredit Community Bank, Incorporated, as well as the increase in the
number of the members of its BOD, from five (5) to eleven (11).3
Pursuant to Section 28 of Republic Act (R.A.) No. 7653, otherwise known as The New Central Bank Act,
the Integrated Supervision Department II (ISD II) of the BSP conducted a general examination on ECBI
with the cut-off date of December 31, 2007. Shortly after the completion of the general examination, an
exit conference was held on March 27, 2008 at the BSP during which the BSP officials and examiners
apprised Vivas, the Chairman and President of ECBI, as well as the other bank officers and members of its
BOD, of the advance findings noted during the said examination. The ECBI submitted its comments on
BSP’s consolidated findings and risk asset classification through a letter, dated April 8, 2008. 4
Sometime in April 2008, the examiners from the Department of Loans and Credit of the BSP arrived at the
ECBI and cancelled the rediscounting line of the bank. Vivas appealed the cancellation to
BSP.5 Thereafter, the Monetary Board (MB) issued Resolution No. 1255, dated September 25, 2008,
placing ECBI under Prompt Corrective Action (PCA) framework because of the following serious findings
and supervisory concerns noted during the general examination: 1] negative capital of ?14.674 million and
capital adequacy ratio of negative 18.42%; 2] CAMEL (Capital Asset Management Earnings Liquidity)
composite rating of "2" with a Management component rating of "1"; and 3] serious supervisory concerns
particularly on activities deemed unsafe or unsound.6 Vivas claimed that the BSP took the above courses of
action due to the joint influence exerted by a certain hostile shareholder and a former BSP examiner.7
Through its letter, dated September 30, 2008, the BSP furnished ECBI with a copy of the Report of
Examination (ROE) as of December 31, 2007. In addition, the BSP directed the bank’s BOD and senior
management to: 1] infuse fresh capital of ?22.643 million; 2] book the amount of ?28.563 million
representing unbooked valuation reserves on classified loans and other risks assets on or before October
examination.8
Vivas moved for a reconsideration of Resolution No. 1255 on the grounds of non-observance of due
process and arbitrariness. The ISD II, on several instances, had invited the BOD of ECBI to discuss matters
pertaining to the placement of the bank under PCA framework and other supervisory concerns before
making the appropriate recommendations to the MB. The proposed meeting, however, did not materialize
due to postponements sought by Vivas.9
In its letter, dated February 20, 2009, the BSP directed ECBI to explain why it transferred the majority
shares of RBFI without securing the prior approval of the MB in apparent violation of Subsection X126.2
of the Manual of Regulation for Banks (MORB).10 Still in another letter,11 dated March 31, 2009, the ISD
II required ECBI to explain why it did not obtain the prior approval of the BSP anent the establishment and
operation of the bank’s sub-offices.
Also, the scheduled March 31, 2009 general examination of the books, records and general condition of
ECBI with the cut-off date of December 31, 2008, did not push through. According to Vivas, ECBI asked
for the deferment of the examination pending resolution of its appeal before the MB. Vivas believed that
he was being treated unfairly because the letter of authority to examine allegedly contained a clause which
pertained to the Anti-Money Laundering Law and the Bank Secrecy Act.12
The MB, on the other hand, posited that ECBI unjustly refused to allow the BSP examiners from
examining and inspecting its books and records, in violation of Sections 25 and 34 of R.A. No. 7653. In its
letter,13 dated May 8, 2009, the BSP informed ECBI that it was already due for another annual examination
and that the pendency of its appeal before the MB would not prevent the BSP from conducting another one
as mandated by Section 28 of R.A. No. 7653.
In view of ECBI’s refusal to comply with the required examination, the MB issued Resolution No.
726,14 dated May 14, 2009, imposing monetary penalty/fine on ECBI, and referred the matter to the Office
of the Special Investigation (OSI) for the filing of appropriate legal action. The BSP also wrote a
letter,15 dated May 26, 2009, advising ECBI to comply with MB Resolution No. 771, which essentially
required the bank to follow its directives. On May 28, 2009, the ISD II reiterated its demand upon the
ECBI BOD to allow the BSP examiners to conduct a general examination on June 3, 2009.16
In its June 2, 2009 Letter-Reply,17 ECBI asked for another deferment of the examination due to the
pendency of certain unresolved issues subject of its appeal before the MB, and because Vivas was then out
of the country. The ISD II denied ECBI’s request and ordered the general examination to proceed as
previously scheduled.18
Thereafter, the MB issued Resolution No. 823,19 dated June 4, 2009, approving the issuance of a cease and
desist order against ECBI, which enjoined it from pursuing certain acts and transactions that were
considered unsafe or unsound banking practices, and from doing such other acts or transactions
constituting fraud or might result in the dissipation of its assets.
On June 10, 2009, the OSI filed with the Department of Justice (DOJ) a complaint for Estafa Through
Falsification of Commercial Documents against certain officials and employees of ECBI. Meanwhile, the
MB issued Resolution No. 1164,20 dated August 13, 2009, denying the appeal of ECBI from Resolution
No. 1255 which placed it under PCA framework. On November 18, 2009, the general examination of the
books and records of ECBI with the cut-off date of September 30, 2009, was commenced and ended in
December 2009. Later, the BSP officials and examiners met with the representatives of ECBI, including
Vivas, and discussed their findings.21 On December 7, 2009, the ISD II reminded ECBI of the non-
submission of its financial audit reports for the years 2007 and 2008 with a warning that failure to submit
those reports and the written explanation for such omission shall result in the imposition of a monetary
penalty.22 In a letter, dated February 1, 2010, the ISD II informed ECBI of MB Resolution No. 1548 which
denied its request for reconsideration of Resolution No. 726.
On March 4, 2010, the MB issued Resolution No. 27623 placing ECBI under receivership in accordance
with the recommendation of the ISD II which reads:
On the basis of the examination findings as of 30 September 2009 as reported by the Integrated
Supervision Department (ISD) II, in its memorandum dated 17 February 2010, which findings showed that
the Eurocredit Community Bank, Inc. – a Rural Bank (Eurocredit Bank) (a) is unable to pay its liabilities
as they become due in the ordinary course of business; (b) has insufficient realizable assets to meet
liabilities; (c) cannot continue in business without involving probable losses to its depositors and creditors;
and (d) has willfully violated a cease and desist order of the Monetary Board for acts or transactions which
are considered unsafe and unsound banking practices and other acts or transactions constituting fraud or
dissipation of the assets of the institution, and considering the failure of the Board of
Directors/management of Eurocredit Bank to restore the bank’s financial health and viability despite
considerable time given to address the bank’s financial problems, and that the bank had been accorded due
process, the Board, in accordance with Section 30 of Republic Act No. 7653 (The New Central Bank Act),
approved the recommendation of ISD II as follows:
To prohibit the Eurocredit Bank from doing business in the Philippines and to place its assets and affairs
under receivership; and
To designate the Philippine Deposit Insurance Corporation as Receiver of the bank.
Assailing MB Resolution No. 276, Vivas filed this petition for prohibition before this Court, ascribing
grave abuse of discretion to the MB for prohibiting ECBI from continuing its banking business and for
placing it under receivership. The petitioner presents the following
ARGUMENTS:
(a)
It is grave abuse of discretion amounting to loss of jurisdiction to apply the general law embodied in
Section 30 of the New Central Bank Act as opposed to the specific law embodied in Sections 11 and 14 of
the Rural Banks Act of 1992.
(b)
Even if it assumed that Section 30 of the New Central Bank Act is applicable, it is still the gravest abuse of
discretion amounting to lack or excess of jurisdiction to execute the law with manifest arbitrariness, abuse
of discretion, and bad faith, violation of constitutional rights and to further execute a mandate well in
excess of its parameters.
(c)
The power delegated in favor of the Bangko Sentral ng Pilipinas to place rural banks under receiverships is
unconstitutional for being a diminution or invasion of the powers of the Supreme Court, in violation of
Section 2, Article VIII of the Philippine Constitution.24
Vivas submits that the respondents committed grave abuse of discretion when they erroneously applied
Section 30 of R.A. No. 7653, instead of Sections 11 and 14 of the Rural Bank Act of 1992 or R.A. No.
7353. He argues that despite the deficiencies, inadequacies and oversights in the conduct of the affairs of
ECBI, it has not committed any financial fraud and, hence, its placement under receivership was
unwarranted and improper. He posits that, instead, the BSP should have taken over the management of
ECBI and extended loans to the financially distrained bank pursuant to Sections 11 and 14 of R.A. No.
7353 because the BSP’s power is limited only to supervision and management take-over of banks.
He contends that the implementation of the questioned resolution was tainted with arbitrariness and bad
faith, stressing that ECBI was placed under receivership without due and prior hearing in violation of his
and the bank’s right to due process. He adds that respondent PDIC actually closed ECBI even in the
absence of any directive to this effect. Lastly, Vivas assails the constitutionality of Section 30 of R.A. No.
7653 claiming that said provision vested upon the BSP the unbridled power to close and place under
receivership a hapless rural bank instead of aiding its financial needs. He is of the view that such power
goes way beyond its constitutional limitation and has transformed the BSP to a sovereign in its own
"kingdom of banks."25
The Court’s Ruling
The petition must fail.
Vivas Availed of the Wrong Remedy
To begin with, Vivas availed of the wrong remedy. The MB issued Resolution No. 276, dated March 4,
2010, in the exercise of its power under R.A. No. 7653. Under Section 30 thereof, any act of the MB
placing a bank under conservatorship, receivership or liquidation may not be restrained or set aside except
on a petition for certiorari. Pertinent portions of R.A. 7653 read:
Section 30. –
x x x x.
The actions of the Monetary Board taken under this section or under Section 29 of this Act shall be final
and executory, and may not be restrained or set aside by the court except on petition for certiorari on the
ground that the action taken was in excess of jurisdiction or with such grave abuse of discretion as to
amount to lack or excess of jurisdiction. The petition for certiorari may only be filed by the stockholders of
record representing the majority of the capital stock within ten (10) days from receipt by the board of
directors of the institution of the order directing receivership, liquidation or conservatorship.
x x x x. [Emphases supplied]
Prohibition is already unavailing
Granting that a petition for prohibition is allowed, it is already an ineffective remedy under the
circumstances obtaining. Prohibition or a "writ of prohibition" is that process by which a superior court
prevents inferior courts, tribunals, officers, or persons from usurping or exercising a jurisdiction with
which they have not been vested by law, and confines them to the exercise of those powers legally
conferred. Its office is to restrain subordinate courts, tribunals or persons from exercising jurisdiction over
matters not within its cognizance or exceeding its jurisdiction in matters of which it has cognizance. 26 In
our jurisdiction, the rule on prohibition is enshrined in Section 2, Rule 65 of the Rules on Civil Procedure,
to wit:
Sec. 2. Petition for prohibition - When the proceedings of any tribunal, corporation, board, officer or questions of law.31 In the case at bench, there are certainly factual issues as Vivas is questioning the
person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its or findings of the investigating team.
his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is
no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a person
Strict observance of the policy of judicial hierarchy demands that where the issuance of the extraordinary
aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and
writs is also within the competence of the CA or the RTC, the special action for the obtainment of such
praying that the judgment be rendered commanding the respondent to desist from further proceedings in
writ must be presented to either court. As a rule, the Court will not entertain direct resort to it unless the
the action or matter specified therein, or otherwise granting such incidental reliefs as the law and justice
redress desired cannot be obtained in the appropriate lower courts; or where exceptional and compelling
require.
circumstances, such as cases of national interest and with serious implications, justify the availment of the
extraordinary remedy of writ of certiorari, prohibition, or mandamus calling for the exercise of its primary
x x x x. jurisdiction.32 The judicial policy must be observed to prevent an imposition on the precious time and
attention of the Court.
Indeed, prohibition is a preventive remedy seeking that a judgment be rendered which would direct the
defendant to desist from continuing with the commission of an act perceived to be illegal.27 As a rule, the The MB Committed No Grave Abuse of Discretion
proper function of a writ of prohibition is to prevent the doing of an act which is about to be done. It is not
intended to provide a remedy for acts already accomplished.28
In any event, no grave abuse of discretion can be attributed to the MB for the issuance of the assailed
Resolution No. 276.
Though couched in imprecise terms, this petition for prohibition apparently seeks to prevent the acts of
closing of ECBI and placing it under receivership. Resolution No. 276, however, had already been issued
Vivas insists that the circumstances of the case warrant the application of Section 11 of R.A. No. 7353,
by the MB and the closure of ECBI and its placement under receivership by the PDIC were already
which provides:
accomplished. Apparently, the remedy of prohibition is no longer appropriate. Settled is the rule that
prohibition does not lie to restrain an act that is already a fait accompli. 29
Sec. 11. The power to supervise the operation of any rural bank by the Monetary Board as herein indicated
shall consist in placing limits to the maximum credit allowed to any individual borrower; in prescribing the
The Petition Should Have Been Filed in the CA
interest rate, in determining the loan period and loan procedures, in indicating the manner in which
technical assistance shall be extended to rural banks, in imposing a uniform accounting system and manner
Even if treated as a petition for certiorari, the petition should have been filed with the CA. Section 4 of of keeping the accounts and records of rural banks; in instituting periodic surveys of loan and lending
Rule 65 reads: procedures, audits, test-check of cash and other transactions of the rural banks; in conducting training
courses for personnel of rural banks; and, in general, in supervising the business operations of the rural
banks.
Section 4. When and where petition filed. — The petition shall be filed not later than sixty (60) days from
notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed,
whether such motion is required or not, the sixty (60) day period shall be counted from notice of the denial The Central Bank shall have the power to enforce the laws, orders, instructions, rules and regulations
of said motion. promulgated by the Monetary Board, applicable to rural banks; to require rural banks, their directors,
officers and agents to conduct and manage the affairs of the rural banks in a lawful and orderly manner;
and, upon proof that the rural bank or its Board of Directors, or officers are conducting and managing the
The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a lower court or
affairs of the bank in a manner contrary to laws, orders, instructions, rules and regulations promulgated by
of a corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the
the Monetary Board or in a manner substantially prejudicial to the interest of the Government, depositors
territorial area as defined by the Supreme Court. It may also be filed in the Court of Appeals whether or not
or creditors, to take over the management of such bank when specifically authorized to do so by the
the same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate
Monetary Board after due hearing process until a new board of directors and officers are elected and
jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, unless otherwise provided by
qualified without prejudice to the prosecution of the persons responsible for such violations under the
law or these Rules, the petition shall be filed in and cognizable only by the Court of Appeals. [Emphases
provisions of Sections 32, 33 and 34 of Republic Act No. 265, as amended.
supplied]

x x x x.
That the MB is a quasi-judicial agency was already settled and reiterated in the case of Bank of Commerce
v. Planters Development Bank And Bangko Sentral Ng Pilipinas.30
The thrust of Vivas’ argument is that ECBI did not commit any financial fraud and, hence, its placement
under receivership was unwarranted and improper. He asserts that, instead, the BSP should have taken over
Doctrine of Hierarchy of Courts
the management of ECBI and extended loans to the financially distrained bank pursuant to Sections 11 and
14 of R.A. No. 7353 because the BSP’s power is limited only to supervision and management take-over of
Even in the absence of such provision, the petition is also dismissible because it simply ignored the banks, and not receivership.
doctrine of hierarchy of courts. True, the Court, the CA and the RTC have original concurrent jurisdiction
to issue writs of certiorari, prohibition and mandamus. The concurrence of jurisdiction, however, does not
Vivas argues that implementation of the questioned resolution was tainted with arbitrariness and bad faith,
grant the party seeking any of the extraordinary writs the absolute freedom to file a petition in any court of
stressing that ECBI was placed under receivership without due and prior hearing, invoking Section 11 of
his choice. The petitioner has not advanced any special or important reason which would allow a direct
R.A. No. 7353 which states that the BSP may take over the management of a rural bank after due
resort to this Court. Under the Rules of Court, a party may directly appeal to this Court only on pure
hearing.33 He adds that because R.A. No. 7353 is a special law, the same should prevail over R.A. No.
7653 which is a general law.
The Court has taken this into account, but it appears from all over the records that ECBI was given every
opportunity to be heard and improve on its financial standing. The records disclose that BSP officials and
examiners met with the representatives of ECBI, including Vivas, and discussed their findings.34 There
were also reminders that ECBI submit its financial audit reports for the years 2007 and 2008 with a
warning that failure to submit them and a written explanation of such omission shall result in the
imposition of a monetary penalty.35 More importantly, ECBI was heard on its motion for reconsideration.
For failure of ECBI to comply, the MB came out with Resolution No. 1548 denying its request for
reconsideration of Resolution No. 726. Having been heard on its motion for reconsideration, ECBI cannot
claim that it was deprived of its right under the Rural Bank Act.
Close Now, Hear Later
At any rate, if circumstances warrant it, the MB may forbid a bank from doing business and place it under
receivership without prior notice and hearing. Section 30 of R.A. No. 7653 provides, viz:
Sec. 30. Proceedings in Receivership and Liquidation. – Whenever, upon report of the head of the
supervising or examining department, the Monetary Board finds that a bank or quasi-bank:
(a) is unable to pay its liabilities as they become due in the ordinary course of business:
Provided, That this shall not include inability to pay caused by extraordinary demands induced
by financial panic in the banking community;
(b) has insufficient realizable assets, as determined by the Bangko Sentral, to meet its liabilities;
or
(c) cannot continue in business without involving probable losses to its depositors or creditors;
or
(d) has wilfully violated a cease and desist order under Section 37 that has become final,
involving acts or transactions which amount to fraud or a dissipation of the assets of the
institution; in which cases, the Monetary Board may summarily and without need for prior
hearing forbid the institution from doing business in the Philippines and designate the
Philippine Deposit Insurance Corporation as receiver of the banking institution. [Emphases
supplied.]
x x x x.
Accordingly, there is no conflict which would call for the application of the doctrine that a special law
should prevail over a general law. It must be emphasized that R.A .No. 7653 is a later law and under said
act, the power of the MB over banks, including rural banks, was increased and expanded. The Court, in
several cases, upheld the power of the MB to take over banks without need for prior hearing. It is not
necessary inasmuch as the law entrusts to the MB the appreciation and determination of whether any or all
of the statutory grounds for the closure and receivership of the erring bank are present. The MB, under
R.A. No. 7653, has been invested with more power of closure and placement of a bank under receivership
for insolvency or illiquidity, or because the bank’s continuance in business would probably result in the
loss to depositors or creditors. In the case of Bangko Sentral Ng Pilipinas Monetary Board v. Hon.
Antonio-Valenzuela,36 the Court reiterated the doctrine of "close now, hear later," stating that it was
justified as a measure for the protection of the public interest. Thus:
The "close now, hear later" doctrine has already been justified as a measure for the protection of the public
interest. Swift action is called for on the part of the BSP when it finds that a bank is in dire straits. Unless
adequate and determined efforts are taken by the government against distressed and mismanaged banks,
public faith in the banking system is certain to deteriorate to the prejudice of the national economy itself,
not to mention the losses suffered by the bank depositors, creditors, and stockholders, who all deserve the
protection of the government.37[Emphasis supplied]
In Rural Bank of Buhi, Inc. v. Court of Appeals,38 the Court also wrote that
x x x due process does not necessarily require a prior hearing; a hearing or an opportunity to be heard may
be subsequent to the closure. One can just imagine the dire consequences of a prior hearing: bank runs
would be the order of the day, resulting in panic and hysteria. In the process, fortunes may be wiped out
and disillusionment will run the gamut of the entire banking community. 39
The doctrine is founded on practical and legal considerations to obviate unwarranted dissipation of the
bank’s assets and as a valid exercise of police power to protect the depositors, creditors, stockholders, and
the general public.40 Swift, adequate and determined actions must be taken against financially distressed
and mismanaged banks by government agencies lest the public faith in the banking system deteriorate to
the prejudice of the national economy.
Accordingly, the MB can immediately implement its resolution prohibiting a banking institution to do
business in the Philippines and, thereafter, appoint the PDIC as receiver. The procedure for the involuntary
closure of a bank is summary and expeditious in nature. Such action of the MB shall be final and
executory, but may be later subjected to a judicial scrutiny via a petition for certiorari to be filed by the
stockholders of record of the bank representing a majority of the capital stock. Obviously, this procedure is
designed to protect the interest of all concerned, that is, the depositors, creditors and stockholders, the bank
itself and the general public. The protection afforded public interest warrants the exercise of a summary
closure.
In the case at bench, the ISD II submitted its memorandum, dated February 17, 2010, containing the
findings noted during the general examination conducted on ECBI with the cut-off date of September 30,
2009. The memorandum underscored the inability of ECBI to pay its liabilities as they would fall due in
the usual course of its business, its liabilities being in excess of the assets held. Also, it was noted that
ECBI’s continued banking operation would most probably result in the incurrence of additional losses to
the prejudice of its depositors and creditors. On top of these, it was found that ECBI had willfully violated
the cease-and-desist order of the MB issued in its June 24, 2009 Resolution, and had disregarded the BSP
rules and directives. For said reasons, the MB was forced to issue the assailed Resolution No. 276 placing
ECBI under receivership. In addition, the MB stressed that it accorded ECBI ample time and opportunity
to address its monetary problem and to restore and improve its financial health and viability but it failed to
do so.
In light of the circumstances obtaining in this case, the application of the corrective measures enunciated in
Section 30 of R.A. No. 7653 was proper and justified. Management take-over under Section 11 of R.A.
No. 7353 was no longer feasible considering the financial quagmire that engulfed ECBI showing serious
conditions of insolvency and illiquidity. Besides, placing ECBI under receivership would effectively put a
stop to the further draining of its assets.
No Undue Delegation of Legislative Power
Lastly, the petitioner challenges the constitutionality of Section 30 of R.A. No. 7653, as the legislature
granted the MB a broad and unrestrained power to close and place a financially troubled bank under
receivership. He claims that the said provision was an undue delegation of legislative power. The
contention deserves scant consideration.
Preliminarily, Vivas’ attempt to assail the constitutionality of Section 30 of R.A. No. 7653 constitutes
collateral attack on the said provision of law. Nothing is more settled than the rule that the constitutionality
of a statute cannot be collaterally attacked as constitutionality issues must be pleaded directly and not
collaterally.41 A collateral attack on a presumably valid law is not permissible. Unless a law or rule is
annulled in a direct proceeding, the legal presumption of its validity stands.42

Be that as it may, there is no violation of the non-delegation of legislative power.1âwphi1 The rationale for
the constitutional proscription is that "legislative discretion as to the substantive contents of the law cannot
be delegated. What can be delegated is the discretion to determine how the law may be enforced, not what
the law shall be. The ascertainment of the latter subject is a prerogative of the legislature. This prerogative
cannot be abdicated or surrendered by the legislature to the delegate."43

"There are two accepted tests to determine whether or not there is a valid delegation of legislative power,
viz, the completeness test and the sufficient standard test. Under the first test, the law must be complete in
all its terms and conditions when it leaves the legislature such that when it reaches the delegate the only
thing he will have to do is enforce it. Under the sufficient standard test, there must be adequate guidelines
or stations in the law to map out the boundaries of the delegate's authority and prevent the delegation from
running riot. Both tests are intended to prevent a total transference of legislative authority to the delegate,
who is not allowed to step into the shoes of the legislature and exercise a power essentially legislative." 44

In this case, under the two tests, there was no undue delegation of legislative authority in the issuance of
R.A. No. 7653. To address the growing concerns in the banking industry, the legislature has sufficiently
empowered the MB to effectively monitor and supervise banks and financial institutions and, if
circumstances warrant, to forbid them to do business, to take over their management or to place them under
receivership. The legislature has clearly spelled out the reasonable parameters of the power entrusted to the
MB and assigned to it only the manner of enforcing said power. In other words, the MB was given a wide
discretion and latitude only as to how the law should be implemented in order to attain its objective of
protecting the interest of the public, the banking industry and the economy.

WHEREFORE, the petition for prohibition is DENIED.

SO ORDERED.

G.R. No. 186613 August 27, 2013
ROSENDO R. CORALES, IN HIS OFFICIAL CAPACITY AS MUNICIPAL MAYOR OF
NAGCARLAN, LAGUNA, AND DR. RODOLFO R. ANGELES, IN HIS OFFICIAL CAPACITY
AS MUNICIPAL ADMINISTRATOR OF NAGCARLAN, LAGUNA, PETITIONERS,
vs.
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE COMMISSION ON AUDIT, AS
REPRESENTED BY PROVINCIAL STATE AUDITOR OF LAGUNA MAXIMO L.
ANDAL, RESPONDENT.
DECISION
PEREZ, J.:
This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to nullify the
Decision1 and Resolution2 dated 15 September 2008 and 20 February 2009, respectively, of the Court of
Appeals in CA-G.R. SP No. 101296 and, in effect, to reinstate the Petition for Prohibition and
Mandamus3 filed by herein petitioners Rosendo R. Corales (Corales) and Dr. Rodolfo R. Angeles (Dr.
Angeles) with the Regional Trial Court (RTC) of San Pablo City, Laguna. The assailed Decision annulled
and set aside the Order4 dated 17 May 2007 of Branch 32, and the Order5 dated 5 September 2007 of
Branch 29, both of the RTC of San Pablo City, Laguna in Civil Case No. SP-6370 (07), which respectively
denied herein respondent Republic of the Philippines’ (Republic) Motion to Dismiss petitioners’ Petition
for Prohibition and the subsequent Motion for Reconsideration thereof. The Court of Appeals thereby
ordered the dismissal of petitioners’ Petition for Prohibition with the court a quo. The questioned
Resolution, on the other hand, denied for lack of merit petitioners’ Motion for Reconsideration of the
assailed Decision.
The antecedents, as culled from the records, are as follows:
Petitioner Corales was the duly elected Municipal Mayor of Nagcarlan, Laguna for three (3) consecutive
terms, i.e., the 1998, 2001 and 2004 elections. In his first term as local chief executive, petitioner Corales
appointed petitioner Dr. Angeles to the position of Municipal Administrator, whose appointment was
unanimously approved by the Sangguniang Bayan of Nagcarlan, Laguna (Sangguniang Bayan) per
Resolution No. 98-646 dated 22 July 1998. During his second and third terms as municipal mayor,
petitioner Corales renewed the appointment of petitioner Dr. Angeles. But, on these times, the
Sangguniang Bayan per Resolution No. 2001-0787 dated 12 July 2001 and 26 subsequent Resolutions,
disapproved petitioner Dr. Angeles’ appointment on the ground of nepotism, as well as the latter’s
purported unfitness and unsatisfactory performance. Even so, petitioner Dr. Angeles continued to discharge
the functions and duties of a Municipal Administrator for which he received an annual salary of
₱210,012.00.8
Following an audit on various local disbursements, Maximo Andal (Andal), the Provincial State Auditor of
Laguna, issued an Audit Observation Memorandum (AOM) No. 2006-007-1009 dated 6 October 2006
addressed to petitioner Corales who was asked to comment/reply. The aforesaid AOM, in sum, states that:
1) petitioner Dr. Angeles’ appointment as Municipal Administrator (during the second and third terms of
petitioner Corales) was without legal basis for having been repeatedly denied confirmation by the
Sangguniang Bayan; 2) petitioner Dr. Angeles can be considered, however, as a de facto officer entitled to
the emoluments of the office for the actual services rendered; 3) nonetheless, it is not the Municipality of
Nagcarlan that should be made liable to pay for petitioner Dr. Angeles’ salary; instead, it is petitioner
Corales, being the appointing authority, as explicitly provided for in Article 169(I) of the Rules and
Regulations Implementing the Local Government Code of 1991,10 as well as Section 5, Rule IV of the
Omnibus Rules of Appointments and Other Personnel Actions; 11 4) a post audit of payrolls pertaining to
the payment of salaries, allowances and other incentives of petitioner Dr. Angeles from 15 July 2001 up to
31 May 200612 partially amounted to ₱1,282,829.99; and 5) in view thereof, it is recommended that an
appropriate Notice of Disallowance be issued for the payment of salary expenses incurred without legal
basis by the Municipality of Nagcarlan in the aforestated amount. 13
Instead of submitting his comment/reply thereon, petitioner Corales, together with petitioner Dr. Angeles,
opted to file a Petition for Prohibition and Mandamus against Andal and the then members of the
Sangguniang Bayan before the RTC of San Pablo City, Laguna, docketed as Civil Case No. SP-6370 (07)
and originally raffled to Branch 32. Petitioners sought, by way of prohibition, to require the Office of the
Provincial Auditor, through Andal, to recall its AOM and to eventually desist from collecting
reimbursement from petitioner Corales for the salaries paid to and received by petitioner Dr. Angeles for
the latter’s services as Municipal Administrator. Petitioners similarly sought, by way of mandamus, to
compel the then members of the Sangguniang Bayan, as a collegial body, to recall its Resolutions denying
confirmation to petitioner Dr. Angeles’ appointment as Municipal Administrator and in their stead to
confirm the validity and legitimacy of such appointment.14
In its turn, the Office of the Solicitor General (OSG), on Andal’s behalf, who was impleaded in his official
capacity, filed a Motion to Dismiss petitioners’ Petition for Prohibition and Mandamus grounded on lack
of cause of action, prematurity and non-exhaustion of administrative remedies. It was specifically
contended therein that: (1) the issuance of the AOM was merely an initiatory step in the administrative
investigation of the Commission on Audit (COA) to allow petitioner Corales to controvert the findings and
conclusions of the Sangguniang Bayan in its Resolution No. 2001-078, as well as those of then Secretary
Jose D. Lina, Jr. in Department of Interior and Local Government (DILG) Opinion No. 124 s. 2002; (2) it
was only after the completion of the said investigation that a resolution will be issued as regards the
propriety of the disbursements made by the Municipality of Nagcarlan in the form of salaries paid to
petitioner Dr. Angeles during his tenure as Municipal Administrator; and (3) instead of resorting to judicial
action, petitioner Corales should have first responded to the AOM and, in the event of an adverse decision
against him, elevate the matter for review to a higher authorities in the COA. 15 With these, petitioners’
petition should be dismissed, as petitioner Corales has no cause of action against Andal - his resort to
judicial intervention is premature and he even failed to avail himself of, much less exhaust, the
administrative remedies available to him.16
In its Order dated 17 May 2007, the trial court denied the said Motion to Dismiss on the ground that Andal
was merely a nominal party.17 The subsequent motion for its reconsideration was also denied in another
Order dated 5 September 2007.18
Respondent Republic, as represented by COA, as represented by Andal, consequently filed a Petition for
Certiorari with the Court of Appeals ascribing grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the trial court in rendering the Orders dated 17 May 2007 and 5 September 2007,
as it unjustly denied respondent’s right to actively prosecute the case through a mere declaration that it was
a nominal party despite a clear showing that the Petition for Prohibition referred to the respondent as a real
party in interest.19
On 15 September 2008, the Court of Appeals rendered its now assailed Decision granting respondent’s
Petition for Certiorari, thereby annulling and setting aside the RTC Orders dated 17 May 2007 and 5
September 2007 and, accordingly, dismissing petitioners’ Petition for Prohibition with the court a
quo.20 The Court of Appeals justified its decision in the following manner:
x x x We agree with the OSG’s contention that the [herein respondent Republic], herein represented by the
COA and specifically by Andal in the latter’s capacity as Provincial State Auditor of Laguna, is not merely
a nominal party to the petition for prohibition. x x x. That the [respondent] naturally has an interest in the
disposition/disbursement of said public funds as well as in the recovery thereof should the ongoing
investigative audit confirm the illegality thereof cannot be gainsaid. Rather than a mere nominal party,
therefore, the [respondent] is an indispensable party to the petition for prohibition and may thus seek its
dismissal, given that under the attendant facts there is a yet no actual case or controversy calling for
[therein] respondent court’s exercise of its judicial power.
Judicial review cannot be exercised in vacuo. Thus, as a condition precedent for the exercise of judicial
inquiry, there must be an actual case or controversy, which exists when there is a conflict of legal rights or
an assertion of opposite legal claims, which can be resolved on the basis of existing law and jurisprudence.
x x x. An actual case or controversy thus means an existing case or controversy that is appropriate or ripe
for judicial determination, not conjectural or anticipatory, lest the decision of the court would amount to an
advisory opinion.
[Herein petitioners] x x x have failed to show the existence of an actual case or controversy that would
necessitate judicial inquiry through a petition for prohibition. As the OSG aptly observed, the issuance of
the AOM is just an initiatory step in the investigative audit being then conducted by Andal[,] as Provincial
State Auditor of Laguna to determine the propriety of the disbursements made by the Municipal
Government of Nagcarlan. While Andal may have stated an opinion in the AOM that [herein petitioner]
Corales should reimburse the government treasury for the salaries paid to [herein petitioner Dr. Angeles] in
light of the repeated disapproval and/or rejection of the latter’s appointment by the Sangguniang [Bayan]
of Nagcarlan, there is no showing whatsoever of any affirmative action taken by Andal to enforce such
audit observation. What Andal did, as the AOM unmistakably shows, was to merely request [petitioner]
Corales to submit a reply/comment to the audit observation and in the process afford the latter an
opportunity to controvert not only Andal’s opinion on salary reimbursement but the other statements
therein expressed by the other members of the audit team.
In the absence moreover of a showing that [petitioners], particularly [petitioner] Corales, sustained actual
or imminent injury by reason of the issuance of the AOM, there is no reason to allow the continuance of
the petition for prohibition which was, after all, manifestly conjectural or anticipatory, filed for a
speculative purpose and upon the hypothetical assumption that [petitioner] Corales would be eventually
compelled to reimburse the amounts paid as [petitioner Dr. Angeles’] salaries should the audit
investigation confirm the irregularity of such disbursements. This Court will not engage in such speculative
guesswork and neither should respondent court x x x.21 (Emphasis and italics supplied).
Disgruntled, petitioners moved for its reconsideration but it was denied for lack of merit in a Resolution
dated 20 February 2009.
Hence, this petition.
In their Memorandum, petitioners raise the following issues:
I.
WHETHER OR NOT THE COURT OF APPEALS COMMITTED A PALPABLY ERRONEOUS
RESOLUTION OF A SUBSTANTIAL QUESTION OF LAW WHEN IT ORDERED THE DISMISSAL
OF PETITIONERS’ SUIT FOR PROHIBITION.
II.
WHETHER OR NOT THE COURT OF APPEALS ACTED UNJUSTLY AND INJUDICIOUSLY
WHEN IT HELD THAT THE FACTS AND CIRCUMSTANCES SURROUNDING THE SUIT FOR
PROHIBITION IS NOT YET RIPE FOR JUDICIAL DETERMINATION.
III.
WHETHER OR NOT THE COURT OF APPEALS COMMITTED GRAVE AND REVERSIBLE
ERROR IN THE INTERPRETATION AND RESOLUTION OF A PIVOTAL LEGAL ISSUE WHEN IT
CONCLUDED THAT THERE IS NO ACTUAL DISPUTE OR CONCRETE CONTROVERSY WHICH
MAY BE THE PROPER SUBJECT MATTER OF A SUIT FOR PROHIBITION.
IV.
WHETHER OR NOT THE COURT OF APPEALS UNJUSTIFIABLY TRANSGRESSED AND
TRAMPLED UPON A CATEGORICAL JURISPRUDENTIAL DOCTRINE WHEN IT TOOK
COGNIZANCE OF AND FAVORABLY RESOLVED THE [HEREIN RESPONDENT’S] PETITION
FOR CERTIORARI, IN BLATANT VIOLATION OF THE RULE LAID DOWN IN THE APROPOS
CASE OF CHINA ROAD AND BRIDGE CORPORATION [V.] COURT OF APPEALS (348 SCRA
401).
V.
WHETHER OR NOT THE COURT OF APPEALS OVERSTEPPED AND WENT BEYOND THE
BOUNDARIES OF ITS LEGITIMATE DISCRETION WHEN IT DEVIATED AND VEERED AWAY
FROM THE PRINCIPAL ISSUES OF THE CASE, INSTEAD OF PRONOUNCING THAT
PETITIONERS HAVE A VALID, PERFECT AND LEGITIMATE CAUSE OF ACTION FOR
PROHIBITION.22 (Italics supplied).
The Petition is bereft of merit.
The issues will be discussed in seriatim.
The first three issues concern the ripeness or prematurity of the Petition for Prohibition assailing the AOM
issued by Andal to petitioner Corales. Petitioners argue that from the tenor of the AOM it is clear that
petitioner Corales is being adjudged liable and personally accountable to pay or to reimburse, in his private
capacity, the salaries paid to and received by petitioner Dr. Angeles for the latter’s services as Municipal
Administrator, as his appointment thereto was considered invalid for lack of necessary confirmation from
the Sangguniang Bayan. It is further argued that contrary to the claim of respondent Republic that such
AOM is a mere initiatory step in the course of an investigative auditing process, the wordings thereof
unmistakably reveal that the same is a categorical disposition and enforcement measure requiring petitioner
Corales to reimburse the money disbursed by the Municipality of Nagcarlan to pay petitioner Dr. Angeles’
salaries as Municipal Administrator. Such AOM is a firm, clear and affirmative official action on the part
of the Provincial State Auditor to hold petitioner Corales liable for reimbursement; thus, to require the
latter to still comment or controvert the findings thereon is a mere frivolous and useless formality. Since
the requirement for petitioner Corales to pay and reimburse the salaries of petitioner Dr. Angeles is actual,
direct and forthcoming, the same may be the proper subject of an action for prohibition. Otherwise stated,
such imposition of liability for reimbursement against petitioner Corales presents a concrete justiciable
controversy and an actual dispute of legal rights.
Petitioners’ contention is unavailing.
To begin with, this Court deems it proper to quote the significant portions of the questioned AOM, to wit:
 FOR : Hon. ROSENDO R. CORALES
Municipal Mayor
Nagcarlan, Laguna
FROM : Mr. MAXIMO L. ANDAL
State Auditor IV
Audit Team Leader
May we have your comment/reply on the following audit observation. Please return the duplicate within
fifteen (15) days upon receipt by filling up the space provided for with your comments.
AUDIT OBSERVATION
The appointment of [herein petitioner Dr. Angeles] as Municipal Administrator was
repeatedly denied not confirmed/ concurred by Sangguniang Bayan hence, the
validity of the appointment as per opinion/rulings by the then Secretary Jose D.
Lina, Jr. of the DILG in opinion No. 124 s.2002 was without legal basis.
DILG Opinion No. 124 s[.]2002 states that the continued discharge of powers by
[petitioner Dr. Angeles] as Municipal Administrator appears to have no legal basis. A
person may assume public office once his appointment is already effective. The Supreme
Court in one case (Atty. David B. Corpuz [v.] Court of Appeals, et al[.], G.R. No.
123989, 26 January 1998) held that where the assent or confirmation of some other office
or body is required, the appointment may be complete only when such assent or
confirmation is obtained. Until the process is completed, the appointee can claim no
vested right in the office nor invoke security of tenure. Since the appointment of a
Municipal Administrator requires sanggunian concurrence (Section 443 (d), RA 7160)
and considering that the appointment never became effective. As such, his assumption
and continued holding of the office of the Municipal Administrator find no legal basis.
However, [petitioner Dr. Angeles] may claim salary for the services he has actually
rendered. As held in one case (Civil Liberties Union [v.] Executive Secretary, 194 SCRA
317), a de facto officer is entitled to emoluments of the office for the actual services
rendered. Here, [petitioner Dr. Angeles] can be considered as a de facto officer. x x x, as
held in the Corpuz case cited above, the Supreme Court ruled that a public official who
assumed office under an incomplete appointment is merely a de facto officer for the
duration of his occupancy of the office for the reason that he assumed office under color
of a known appointment which is void by a reason of some defect or irregularity in its
exercise.
It is worthy to emphasize along that line that while [petitioner Dr. Angeles] may be
entitled to the salary as a de facto officer, the municipality cannot be made liable to pay
his salaries. Instructive on this point is Article 169 (I) of the Rules and Regulations
Implementing the Local Government Code of 1991 which explicitly provides, thus:
"The appointing authority shall be liable for the payment of salary of the appointee for
actual services rendered if the appointment is disapproved because the appointing
authority issued it in willful violation of applicable laws, rules and regulations thereby
making the appointment unlawful."
Corollary, Section 5 of Rule IV of the Omnibus Rules of Appointments and Other
Personnel Actions provides, thus:
"The services rendered by any person who was required to assume the duties and
responsibilities of any position without appointment having been issued by the appointing
authority shall not be credited nor recognized by the Commission and shall be the
personal accountability of the person who made him assume office.
Hence, [herein petitioner Corales] shall pay the salaries of [petitioner Dr. Angeles] for the
services the latter has actually rendered.
xxx xxx xxx
Clearly, the appointment of [petitioner Dr. Angeles] per se was bereft of legal basis in
view of the absence of the concurrence of the legislative body thus payment of his
salaries from the funds of the Municipality for actual services rendered remained
unlawful.
Further, in paragraph 4 of the letter of Mr. Allan Poe M. Carmona, Director II of the CSC
dated [1 December 2004] to Mr. Ruben C. Pagaspas, OIC, Regional Cluster Director,
COA, Cluster III, Sub-Cluster VI stated that [petitioner Dr. Angeles] cannot be appointed
to Municipal Administrator without the concurrence of the Sangguniang Bayan as
provided under RA 7160.
MANAGEMENT COMMENT
Post audit of payrolls pertaining to the payment of salaries, allowances and other
incentives of [petitioner Dr. Angeles] as Municipal Administrator for the period from [15
July 2001] up to [31 May 2006] excluding the period from [1 November 2001] to [31
December 2001], [16 March 2002] to [15 May 2002], [1-31 August 2002], [16-30 June
2003], [1-31 December 2003], [1-31 September 2004] and [1 June 2006] to [30
September 2006] were partially amounted to ₱1,282,829.99. x x x.
Issuance of Notice of Disallowance was suggested by Atty. Eden T. Rafanan, Regional
Cluster Director for [L]egal and Adjudication Office in her 2nd Indorsement dated [3
July 2006].
In view hereof, it is recommended that appropriate Notice of Disallowance be issued for
the payment of the salary expenses incurred without legal basis by the municipality in the
amount mentioned in the above paragraph.23 (Emphasis, italics and underscoring
supplied).
As can be gleaned therefrom, petitioner Corales was simply required to submit his comment/reply on the
observations stated in the AOM. As so keenly observed by the Court of Appeals, any mention in the AOM
that petitioner Corales shall reimburse the salaries paid to petitioner Dr. Angeles in light of the repeated
disapproval or rejection by the Sangguniang Bayan of his appointment as Municipal Administrator was
merely an initial opinion, not conclusive, as there was no showing that Andal had taken any affirmative
action thereafter to compel petitioner Corales to make the necessary reimbursement. Otherwise stated, it
has not been shown that Andal carried out or enforced what was stated in the AOM. On the contrary,
petitioner Corales was given an opportunity to refute the findings and observations in the AOM by
requesting him to comment/reply thereto, but he never did. More so, even though the AOM already
contained a recommendation for the issuance of a Notice of Disallowance of the payment of salary
expenses, the records are bereft of any evidence to show that a Notice of Disallowance has, in fact, been
issued. Concomitantly, the AOM did not contain any recommendation to the effect that petitioner Corales
would be held personally liable for the amount that would be disallowed. It is, therefore, incongruous to
conclude that the said AOM is tantamount to a directive requiring petitioner Corales to reimburse the
salaries paid to and received by petitioner Dr. Angeles during the latter’s stint as Municipal Administrator
after his appointment thereto was held invalid for want of conformity from the Sangguniang Bayan.
In relation thereto, as aptly observed by the OSG, to which the Court of Appeals conformed, the issuance
of the AOM is just an initiatory step in the investigative audit being conducted by Andal as Provincial
State Auditor to determine the propriety of the disbursements made by the Municipal Government of
Laguna. That the issuance of an AOM can be regarded as just an initiatory step in the investigative audit is
evident from COA Memorandum No. 2002-053 dated 26 August 2002.24 A perusal of COA Memorandum
No. 2002-053, particularly Roman Numeral III, Letter A, paragraphs 1 to 5 and 9, reveals that any finding
or observation by the Auditor stated in the AOM is not yet conclusive, as the comment/justification 25 of the
head of office or his duly authorized representative is still necessary before the Auditor can make any
conclusion. The Auditor may give due course or find the comment/justification to be without merit but in
either case, the Auditor shall clearly state the reason for the conclusion reached and recommendation made.
Subsequent thereto, the Auditor shall transmit the AOM, together with the comment or justification of the
Auditee and the former’s recommendation to the Director, Legal and Adjudication Office (DLAO), for the
sector concerned in Metro Manila and/or the Regional Legal and Adjudication Cluster Director (RLACD)
in the case of regions. The transmittal shall be coursed through the Cluster Director concerned and the
Regional Cluster Director, as the case may be, for their own comment and recommendation. The DLAO
for the sector concerned in the Central Office and the RLACD shall make the necessary evaluation of the
records transmitted with the AOM. When, on the basis thereof, he finds that the transaction should be
suspended or disallowed, he will then issue the corresponding Notice of Suspension (NS), Notice of
Disallowance (ND) or Notice of Charge (NC), as the case may be, furnishing a copy thereof to the Cluster
Director. Otherwise, the Director may dispatch a team to conduct further investigation work to justify the
contemplated action. If after in-depth investigation, the DLAO for each sector in Metro Manila and the
RLACD for the regions find that the issuance of the NS, ND, and NC is warranted, he shall issue the same
and transmit such NS, ND or NC, as the case may be, to the agency head and other persons found liable
therefor.
From the foregoing, it is beyond doubt that the issuance of an AOM is, indeed, an initial step in the
conduct of an investigative audit considering that after its issuance there are still several steps to be
conducted before a final conclusion can be made or before the proper action can be had against the
Auditee. There is, therefore, no basis for petitioner Corales’ claim that his comment thereon would be a
mere formality. Further, even though the AOM issued to petitioner Corales already contained a
recommendation for the issuance of a Notice of Disallowance, still, it cannot be argued that his
comment/reply to the AOM would be a futile act since no Notice of Disallowance was yet issued. Again,
the records are bereft of any evidence showing that Andal has already taken any affirmative action against
petitioner Corales after the issuance of the AOM.
Viewed in this light, this Court can hardly see any actual case or controversy to warrant the exercise of its
power of judicial review. Settled is the rule that for the courts to exercise the power of judicial review, the
following must be extant: (1) there must be an actual case calling for the exercise of judicial power; (2) the
question must be ripe for adjudication; and (3) the person challenging must have the "standing." An actual
case or controversy involves a conflict of legal rights, an assertion of opposite legal claims, susceptible of
judicial resolution as distinguished from a mere hypothetical or abstract difference or dispute. There must
be a contrariety of legal rights that can be interpreted and enforced on the basis of existing law and
jurisprudence. Closely related thereto is that the question must be ripe for adjudication. A question is
considered ripe for adjudication when the act being challenged has had a direct adverse effect on the
individual challenging it. The third requisite is legal standing or locus standi, which has been defined as a
personal or substantial interest in the case such that the party has sustained or will sustain direct injury as a
result of the governmental act that is being challenged, alleging more than a generalized grievance. The
gist of the question of standing is whether a party alleges "such personal stake in the outcome of the
controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which
the court depends for illumination of difficult constitutional questions." Unless a person is injuriously
affected in any of his constitutional rights by the operation of statute or ordinance, he has no standing. 26
The requisites of actual case and ripeness are absent in the present case. To repeat, the AOM issued by
Andal merely requested petitioner Corales to comment/reply thereto.1awp++i1 Truly, the AOM already
contained a recommendation to issue a Notice of Disallowance; however, no Notice of Disallowance was
yet issued. More so, there was no evidence to show that Andal had already enforced against petitioner
Corales the contents of the AOM. Similarly, there was no clear showing that petitioners, particularly
petitioner Corales, would sustain actual or imminent injury by reason of the issuance of the AOM. The
action taken by the petitioners to assail the AOM was, indeed, premature and based entirely on surmises,
conjectures and speculations that petitioner Corales would eventually be compelled to reimburse petitioner
Dr. Angeles’ salaries, should the audit investigation confirm the irregularity of such disbursements.
Further, as correctly pointed out by respondent Republic in its Memorandum, what petitioners actually
assail is Andal’s authority to request them to file the desired comment/reply to the AOM, which is beyond
the scope of the action for prohibition, as such request is neither an actionable wrong nor constitutive of an
act perceived to be illegal. Andal, being the Provincial State Auditor, is clothed with the authority to audit
petitioners’ disbursements, conduct an investigation thereon and render a final finding and
recommendation thereafter. Hence, it is beyond question that in relation to his audit investigation function,
Andal can validly and legally require petitioners to submit comment/reply to the AOM, which the latter
cannot pre-empt by prematurely seeking judicial intervention, like filing an action for prohibition.
Moreover, prohibition, being a preventive remedy to seek a judgment ordering the defendant to desist from
continuing with the commission of an act perceived to be illegal, may only be resorted to when there is "no
appeal or any other plain, speedy, and adequate remedy in the ordinary course of law." 27
In this case, petitioners insist that it is no longer necessary to exhaust administrative remedies considering
that there is no appeal or any other plain, speedy and appropriate remedial measure to assail the imposition
under the AOM aside from an action for prohibition.
This Court finds the said contention plain self-deception.
As previously stated, petitioners’ action for prohibition was premature. The audit investigative process was
still in its initial phase. There was yet no Notice of Disallowance issued. And, even granting that the AOM
issued to petitioner Corales is already equivalent to an order, decision or resolution of the Auditor or that
such AOM is already tantamount to a directive for petitioner Corales to reimburse the salaries paid to
petitioner Dr. Angeles, still, the action for prohibition is premature since there are still many administrative
remedies available to petitioners to contest the said AOM. Section 1, Rule V of the 1997 Revised Rules of
Procedure of the COA, provides: "[a]n aggrieved party may appeal from an order or decision or ruling
rendered by the Auditor embodied in a report, memorandum, letter, notice of disallowances and charges,
Certificate of Settlement and Balances, to the Director who has jurisdiction over the agency under audit."
From the final order or decision of the Director, an aggrieved party may appeal to the Commission
proper.28 It is the decision or resolution of the Commission proper which can be appealed to this Court. 29
Clearly, petitioners have all the remedies available to them at the administrative level but they failed to
exhaust the same and instead, immediately sought judicial intervention. Otherwise stated, the auditing
process has just begun but the petitioners already thwarted the same by immediately filing a Petition for
Prohibition. In Fua, Jr. v. COA,30citing Sison v. Tablang,31 this Court declared that the general rule is that
before a party may seek the intervention of the court, he should first avail himself of all the means afforded
him by administrative processes. The issues which administrative agencies are authorized to decide should
not be summarily taken from them and submitted to the court without first giving such administrative
agency the opportunity to dispose of the same after due deliberation. Also, in The Special Audit Team,
Commission on Audit v. Court of Appeals and Government Service Insurance System, 32 this Court has
extensively pronounced that:
If resort to a remedy within the administrative machinery can still be made by giving the administrative
officer concerned every opportunity to decide on a matter that comes within his or her jurisdiction, then
such remedy should be exhausted first before the court’s judicial power can be sought. The premature
invocation of the intervention of the court is fatal to one’s cause of action. The doctrine of exhaustion of
administrative remedies is based on practical and legal reasons. The availment of administrative remedy
entails lesser expenses and provides for a speedier disposition of controversies. Furthermore, the courts of
justice, for reasons of comity and convenience, will shy away from a dispute until the system of
administrative redress has been completed and complied with, so as to give the administrative agency
concerned every opportunity to correct its error and dispose of the case. x x x.
Moreover, courts have accorded respect for the specialized ability of other agencies of government to deal x x x Applying the test to the instant case, it is clear that private respondent raises pure questions of law
with the issues within their respective specializations prior to any court intervention. The Court has which are not proper in an ordinary appeal under Rule 41, but should be raised by way of a petition for
reasoned thus: review on certiorari under Rule 45.1âwphi1

We have consistently declared that the doctrine of exhaustion of administrative remedies is a cornerstone
of our judicial system. The thrust of the rule is that courts must allow administrative agencies to carry out
their functions and discharge their responsibilities within the specialized areas of their respective
competence. The rationale for this doctrine is obvious. It entails lesser expenses and provides for the
speedier resolution of controversies. Comity and convenience also impel courts of justice to shy away from
a dispute until the system of administrative redress has been completed.
The 1987 Constitution created the constitutional commissions as independent constitutional bodies, tasked
with specific roles in the system of governance that require expertise in certain fields. For COA, this role
involves:
The power, authority, and duty to examine, audit, and settle all accounts pertaining to the revenue and
receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to, the
Government, or any of its subdivisions, agencies, instrumentalities, including government-owned and
controlled corporations with original charter. x x x.
We agree with private respondent that in a motion to dismiss due to failure to state a cause of action, the
trial court can consider all the pleadings filed, including annexes, motions and the evidence on record.
However in so doing, the trial court does not rule on the truth or falsity of such documents. It merely
includes such documents in the hypothetical admission. Any review of a finding of lack of cause of action
based on these documents would not involve a calibration of the probative value of such pieces of evidence
but would only limit itself to the inquiry of whether the law was properly applied given the facts and these
supporting documents. Therefore, what would inevitably arise from such a review are pure questions of
law, and not questions of fact.36 (Emphasis supplied).
In the case at bench, however, the Motion to Dismiss was denied. It is well-entrenched that an order
denying a motion to dismiss is an interlocutory order which neither terminates nor finally disposes of a
case as it leaves something to be done by the court before the case is finally decided on the
merits.37 Therefore, contrary to the claim of petitioners, the denial of a Motion to Dismiss is not appealable,
not even via Rule 45 of the Rules of Court. The only remedy for the denial of the Motion to Dismiss is a
special civil action for certiorari showing that such denial was made with grave abuse of discretion.38

Taking into consideration all the foregoing, this Court finds no reversible error on the part of the Court of
As one of the three (3) independent constitutional commissions, COA has been empowered to define the
Appeals in reversing the Orders of the court a quo and consequently dismissing petitioners’ Petition for
scope of its audit and examination and to establish the techniques and methods required therefor; and to
Prohibition filed thereat.1âwphi1
promulgate accounting and auditing rules and regulations, including those for the prevention and
disallowance of irregular, unnecessary, excessive, extravagant or unconscionable expenditures or uses of
government funds and properties. WHEREFORE, premises considered, the Decision and Resolution dated 15 September 2008 and 20
February 2009, respectively, of the Court of Appeals in CA-G.R. SP No. 101296 are hereby AFFIRMED.
Costs against petitioners.
Thus, in the light of this constitutionally delegated task, the courts must exercise caution when intervening
with disputes involving these independent bodies, for the general rule is that before a party may seek the
intervention of the court, he should first avail of all the means afforded him by administrative processes. SO ORDERED.
The issues which administrative agencies are authorized to decide should not be summarily taken from
them and submitted to a court without first giving such administrative agency the opportunity to dispose of
the same after due deliberation.33(Emphasis supplied).

In their futile attempt to convince this Court to rule in their favor, petitioners aver that by filing a Motion to
Dismiss on the ground of lack of cause of action, respondent Republic, in essence, admitted all the material
averments and narration of facts stated in the Petition for Prohibition and Mandamus. As such, there is no
longer any question of fact to speak of and what remains is a pure question of law. The judgment,
therefore, of the trial court denying the Motion to Dismiss is no longer subject to any appeal or review by
the Court of Appeals. Instead, it is already appealable and reviewable by this Court under Rule 45 of the
Rules of Court, where only pure questions of law may be raised and dealt with. This is in line with the
pronouncement in China Road and Bridge Corporation v. Court of Appeals34 (China Road Case). The
Court of Appeals should have dismissed respondent Republic’s Petition for Certiorari under Rule 65 of the
Rules of Court for being an improper and inappropriate mode of review.

Petitioners’ above argument is misplaced.

China Road Case is not at all applicable in the case at bench. Therein, the Motion to Dismiss the Complaint
was granted. As the order granting the motion to dismiss was a final, as distinguished from an interlocutory
order, the proper remedy was an appeal in due course.35 Thus, this Court in China Road Case held that:

G.R. No. 164966 June 8, 2007
ROLANDO TAN, ELENA TAN and LAMBERTO TAN, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, HON. HERMES B. MONTERO, in his capacity as
Assistant Provincial Prosecutor, and the PEOPLE OF THE PHILIPPINES, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari assailing the November 24, 2003 Decision 1 of the Court of
Appeals in CA-G.R. SP No. 74450 dismissing the petition for prohibition and injunction, which sought to
enjoin the Presiding Judge of the Regional Trial Court of Cebu City, Branch 5, from further proceeding
with Crim. Case Nos. 64381, 64383, 64385, 64386 and 64387; and the July 14, 2004 Resolution2 denying
petitioners’ motion for reconsideration.
In a Letter-Complaint dated June 26, 2002, James L. King (King) charged Roderick Lim-Go, Lucy Go,
Nelson Go, John Doe and Peter Doe with violation of Batas Pambansa Bilang 22 (B.P. 22) and Estafa
involving two checks both dated June 21, 2002, to wit: (1) United Overseas Bank Philippines (UOB)
Check No. 00082597 in the amount of ₱20 Million; and (2) UOB Check No. 00082599 in the amount of
₱7.9 Million.
Subsequently or on July 10, 2002, King filed a Supplemental Complaint-Affidavit involving five additional
checks, to wit: (1) UOB Check No. 0000082596 dated June 21, 2002 in the amount of ₱7 Million; (2)
UOB Check No. 0000082598 dated June 21, 2002 in the amount of ₱26.68 Million; (3) UOB Check No.
0000082434 dated June 23, 2002 in the amount of ₱2.6 Million; (4) UOB Check No. 0000082495 dated
June 24, 2002 in the amount of ₱7 Million; and (5) UOB Check No. 0000082494 dated June 24, 2002 in
the amount of ₱18 Million. The complaints were docketed as I.S. Nos. 02-5997-5999-F, 02-0827-B, 02-
0827-C, 02-0827-D, 02-0827-E and 02-0827-F, respectively.
On August 1, 2002, King filed a Second Supplemental Complaint-Affidavit for Estafa impleading Grace
Tan-Go, and herein petitioners Rolando Tan, Elena Tan, and Lamberto Tan, as additional respondents.
King averred that in February 2002, the spouses Roderick Lim Go and Grace Tan-Go (spouses Go)
proposed to him a business transaction wherein the spouses Go would borrow cash from King in exchange
for which Roderick Go would issue postdated checks corresponding to the amount borrowed plus interest.
Roderick Go’s parents, Go Tong Go and Lucy Go, and brother, Nelson Go, assured King that whatever
checks Roderick Go would issue would be funded on their due dates and that the checking account at the
United Overseas Bank, Carbon Branch, Cebu City is their joint account. King agreed to the business
proposal. Thereafter, Roderick Go started issuing checks, inclusive of interest, in exchange for the cash
given by King. The checks when presented for encashment were initially honored by the drawee bank;
consequently, King reposed his trust and confidence in spouses Go.
On March 22, 2002, the spouses Go, together with herein petitioners Rolando Tan (father of Grace Tan-
Go), Elena Tan (mother of Grace Tan-Go), asked ₱100 Million from King allegedly for the renovation of
their movie houses in Butuan City. However, King could only accommodate ₱40 Million, in exchange for
which, Roderick Go issued several checks to King in the amount of ₱61.28 Million, inclusive of the
interest for three months.
At first, the checks issued by Go were honored by the drawee bank when presented. However, on June 24,
2002, when several of the checks he issued were about to fall due, Roderick Go requested King for a
meeting. While at the agreed meeting place, Roderick Go allegedly attacked King with a box cutter and
told him that all the checks that he issued would be dishonored and for this reason he had to injure, kidnap
and kill him. This incident is the subject of a separate criminal case. Thereafter, all the checks dated June
21, 23 and 24, 2002 issued by Roderick Go were dishonored for having been drawn against insufficient
funds. Despite repeated demands, no payment was made; hence, King filed a complaint for violation of BP
Blg. 22 and Estafa.
All the accused, except Roderick Go, submitted their counter-affidavits. In their Joint Counter-
Affidavit3 dated August 8, 2002, petitioners denied meeting King on March 22, 2002; that only Roderick
Go could be held liable for the bouncing checks considering that he alone issued the same; that King’s first
supplemental complaint-affidavit contradicted his second supplemental complaint-affidavit. In the first
supplemental complaint-affidavit, Roderick Go, Lucy Go, Nelson Go, John Doe and Peter Doe were made
respondents as co-conspirators relative to the issuance of the bouncing checks, while in the second
supplemental complaint-affidavit, petitioners were made co-conspirators over the same checks but under
totally different circumstances. Thus, petitioners claim that the criminal cases filed against them were an
afterthought and prayed that the same be dismissed.
The preliminary investigation of the subject criminal cases was initially assigned to 1st Assistant
Provincial Prosecutor/Officer-in-Charge Cesar Tajanlangit who voluntarily inhibited himself. On October
10, 2002, then Secretary of Justice Hernando B. Perez issued Department Order (D.O.) No.
369,4 designating public respondent 3rd Assistant Provincial Prosecutor Hermes Montero (Montero) to
continue with the preliminary investigation of these cases, and, if the evidence warranted, to file the
appropriate informations in court.
In a Joint Resolution5 dated November 8, 2002, public respondent Montero found probable cause for the
following crimes:
WHEREFORE, in the light of the foregoing, the following criminal Informations shall be filed against:
(1) Roderick L. Go, alias ‘Edu Ting’, for violation of B.P. 22 on seven (7) counts;
(2) Roderick L. Go, Grace Tan-Go, Go Tong Go, Lucy Go and Nelson Go, for estafa on two (2) counts
anent (a) UOB Check No. 00082597 dated June 21, 2002 in the amount of ₱20,000,000.00; and (b) UOB
Check No. 00082599 dated June 21, 2002 in the amount of ₱7,800,000.00;
(3) Roderick L. Go, Grace Tan-Go, Go Tong Go, Lucy Go, Nelson Go, [petitioners] Rolando Tan, Elena
Tan and Lamberto Tan, for estafa on five (5) counts anent (c) UOB Check No. 0000082596 dated June 21,
2002, in the amount of ₱7,000,000.00, (d) UOB Check No. 0000082598 dated June 21, 2002, in the
amount of ₱26,680,000.00, (e) UOB Check No. 0000082434 dated June 23, 2002, in the amount of
₱2,600,000.00, (f) UOB Check No. 0000082495 dated June 24, 2002, in the amount of ₱7,000,000.00, and
(g) UOB Check No. 0000082494 dated June 24, 2002, in the amount of ₱18,000,000.00.6
On November 11, 2002, five informations for estafa under Article 315, 2(a) of the Revised Penal Code
were filed against Roderick L. Go, Grace Tan-Go, Go Tong Go, Lucy Go, Nelson Go, and herein
petitioners, docketed as Criminal Case Nos. CBU- 64381, 64383, 64385, 64386, and 64387 and raffled to
the Regional Trial Court, Branch 5 of Cebu City. From the above-quoted adverse Resolution of public
respondent Montero, only Roderick Go and Grace Tan-Go separately appealed to the Secretary of Justice.
On November 18, 2002, before any warrant of arrest could be issued, petitioners posted bail. The following
day or on November 19, 2002, they were arraigned and pleaded not guilty.
On December 17, 2002, petitioners filed a Petition for Prohibition and Injunction with Preliminary
Injunction and Prayer for Temporary Restraining Order7 before the Court of Appeals. They sought to
restrain the trial court from proceeding with the subject criminal cases against them and prayed that the
same be dismissed.
On November 24, 2003, the Court of Appeals issued the assailed Decision dismissing the petition for lack
of merit. It found that (1) petitioners failed to avail themselves of other plain, speedy and adequate
remedies to challenge the public prosecutor’s finding of probable cause; (2) the petition failed to establish
that it falls under any of the exceptions to the general rule that the court will not issue writs of prohibition
or injunction, preliminary or final, to enjoin or restrain a criminal prosecution; (3) public respondent
Montero was duly authorized by the Secretary of Justice to conduct the preliminary investigation and, if
the evidence so warranted, to file the corresponding informations relative to the subject criminal cases; (4)
petitioners failed to prove that public respondents acted with grave abuse of discretion; and (5) petitioners’
claims contesting the public prosecutor’s finding of probable cause are matters of defense that should be
threshed out during the trial of the criminal cases and not through the extraordinary remedy of prohibition.
After their motion for reconsideration was denied, petitioners interposed the instant petition raising nine
issues8revolving around the factual and legal bases of the finding of probable cause for estafa against them
as well as the authority of public respondent Montero to file the subject criminal cases with the trial court.
At the outset, it must be stressed that petitioners are asking us to review the Decision of the Court of
Appeals which dismissed their petition for prohibition. Therefore, the principal issue is whether resort to
the extraordinary remedy of prohibition was proper.
We rule in the negative.
Basic is the rule that the writ of prohibition is an extraordinary remedy to prevent the unlawful and
oppressive exercise of legal authority and to provide for a fair and orderly administration of justice. 9 It is
available only when there is no appeal or any plain, speedy and adequate remedy in the ordinary course of
law, and when the proceedings are done without or in excess of jurisdiction or with grave abuse of
discretion. The petitioner must allege in his petition and establish facts to show that any other existing
remedy is not speedy or adequate.10 A remedy is plain, speedy and adequate if it will promptly relieve the
petitioner from the injurious effects of that judgment and the acts of the tribunal or inferior court. 11 Further,
the writ will not lie to correct errors of judgment but only errors of jurisdiction. As long as the tribunal acts
within its jurisdiction, any alleged errors committed in the exercise of its discretion will amount to nothing
more than mere errors of judgment which are correctible by a timely appeal. 12 In determining whether a
tribunal acted in grave abuse of discretion, mere abuse of discretion is not enough. There must be grave
abuse of discretion as where the tribunal exercised its power in an arbitrary or despotic manner, by reason
of passion or personal hostility, and it must be so patent or gross as would amount to an evasion, or virtual
refusal to perform the duty enjoined, or to act in contemplation of law. 13
In the case at bar, petitioners contend that there was no appeal or other plain, speedy or adequate remedy
available in the ordinary course of law because they were prevented by the trial court from appealing
public respondent Montero’s Joint Resolution dated November 8, 2002 which found, among others,
probable cause for estafa against them. They claim that the trial court "forced arraigned" them on
November 19, 2002. This was allegedly done in order to prevent them from appealing the Joint Resolution
dated November 8, 2002 to the Secretary of Justice as a consequence of paragraph 2, section 7 of DOJ
Circular No. 7014 ("2000 National Prosecution Service Rule on Appeal") which provides in part that "[i]f
an information has been filed in court pursuant to the appealed resolution, the petition shall not be given
due course if the accused has already been arraigned x x x."
We are not persuaded.
Petitioners admit15 that they received a copy of the Joint Resolution dated November 8, 2002 as early as
November 13, 2002. However, from the time they received the copy of the aforesaid Resolution to the time
they were arraigned on November 19, 2002, petitioners did not take steps to move for reconsideration, or
appeal the aforesaid Resolution to the Secretary of Justice. More importantly, the Court of Appeals
observed that there is no evidence on record to support petitioners’ claim that they were "forced arraigned."
In fact, the arraignment of petitioners proceeded without objections on the part of petitioners or their
counsel.16 Absent proof of force or intimidation, the trial judge enjoys the presumption of regularity in the
performance of his functions.17 We also note that petitioners’ other co-accused, Roderick Lim Go and
Grace Tan-Go, were able to timely appeal the Joint Resolution dated November 8, 2002 to the Secretary of
Justice while petitioners failed to appeal the same before their arraignment.
In fine, the arguments raised in their petition for prohibition ineluctably shows that petitioners are
principally questioning the factual and legal bases of the finding of probable cause against them. This is
but a veiled attempt to litigate issues which should have been timely appealed to the Secretary of Justice
via a petition for review. However, petitioners, through their own fault, failed to avail themselves of this
remedy. Countless times we have ruled that the extraordinary remedy of certiorari or prohibition is not a
substitute for a lost appeal.18 This case is no different.
There is another equally important reason why the instant petition should be denied outright. After the
Court of Appeals issued the assailed Decision dated November 24, 2003 which dismissed petitioners’
petition for prohibition, several supervening events took place.
As earlier noted, petitioners failed to appeal from the Joint Resolution dated November 8, 2002 issued by
public respondent Montero which found, among others, probable cause against them for estafa. Only co-
accused Grace Tan-Go and Roderick Go separately and timely appealed to the Secretary of Justice. Then
Secretary of Justice Simeon A. Datumanong subsequently issued a Resolution 19 dated December 23, 2003
granting Grace Tan-Go’s petition for review. The aforesaid Resolution was, likewise, favorable to
petitioners’ cause and ordered, among others, the withdrawal of the informations for estafa against them:
WHEREFORE, the assailed Joint Resolution is hereby SET ASIDE and, conformably with Department
Order No. 473, dated December 8, 2003, which recalls and supersedes Department Order No. 369
previously authorizing Provincial Prosecutor Cezar Tajanlangit to conduct the preliminary investigation
and prosecution of the foregoing cases, the City Prosecutor of Cebu, is hereby directed to—
(1) To withdraw the informations filed in Court against all the respondents for Estafa.
(2) To file the corresponding Informations in Court against RODERICK LIM GO only, for violations of
BP 22 on eight (8) counts and proceed with the prosecution thereof; and
(3) To submit to this Office, within ten (10) days from receipt of this Resolution, the appropriate action or
actions taken.
SO ORDERED.20
When King moved for reconsideration of the above Resolution, petitioners participated in the proceedings
before the Secretary of Justice by opposing the same together with Grace Tan-Go.21 In a Resolution22 dated
February 11, 2004, then Acting Secretary of Justice Merceditas N. Guitierrez granted King’s motion for
reconsideration and reinstated public respondent Montero’s Joint Resolution dated November 8, 2002.
Grace Tan-Go then filed a motion for reconsideration which was joined by petitioners through their motion
for leave to join the motion for reconsideration.23 However, Acting Secretary Guiterrez denied the same in
a Resolution dated August 18, 2004. Thereafter, Grace Tan-Go filed a motion to resolve the second ground
raised in her motion for reconsideration. In a Resolution 24 dated December 17, 2004, Secretary of Justice
Raul M. Gonzalez reversed and set aside the February 11, 2004 and August 18, 2004 Resolutions of Acting
Secretary Gutierrez, and reinstated former Secretary Datumanong’s Resolution dated December 23, 2003.
Consequently, a motion to withdraw informations25 was filed by the prosecution before the trial court.

By participating in the proceedings before the Secretary of Justice, petitioners have actively litigated the
issues regarding the factual and legal bases of the finding of probable cause against them as well as the
authority of public respondent Montero to file the subject criminal informations. This is clearly borne by
the tenor of the Resolution dated December 17, 2004 issued by the Secretary of Justice. Yet, these issues
are exactly the same issues being raised by petitioners before this Court through the instant petition which
is separate and distinct from the proceedings before the Secretary of Justice whose aforesaid Resolution is
not the one before us for review. To reiterate, what is before us for review is the Decision of the Court of
Appeals which dismissed the petition for prohibition filed by petitioners to restrain the trial court from
proceeding with the criminal cases against them.

In effect, by taking these two distinct courses of actions, petitioners have pursued the same or related
causes, prayed for the same or substantially the same reliefs, and, in the process, have created the
possibility of conflicting decisions being rendered by the different fora upon the same issues which is
precisely the evil that the rule on forum-shopping seeks to prevent.26 Doubtless, they have engaged in a
form of forum-shopping. Their attempt to trifle with the courts and abuse their processes must not be
countenanced. As a consequence of petitioners’ violation of the rule against forum-shopping and in order
to preserve the laudable objectives of the rule against forum-shopping, the dismissal of the petition for
prohibition should be upheld.27

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated November 24, 2003
in CA-G.R. SP No. 74450 dismissing petitioners’ petition for prohibition, and the Resolution dated July
14, 2004 denying reconsideration thereof, are AFFIRMED.

Costs against petitioners.

SO ORDERED.

G.R. Nos. 174813-15 March 17, 2009
NILO HIPOS, SR. REPRESENTING DARRYL HIPOS, BENJAMIN CORSIÑO REPRESENTING
JAYCEE CORSIÑO, and ERLINDA VILLARUEL REPRESENTING ARTHUR
VILLARUEL, Petitioners, vs.
HONORABLE RTC JUDGE TEODORO A. BAY, Presiding Judge, RTC, Hall of Justice, Quezon
City, Branch 86, Respondent.
This is a Petition for Mandamus under Rule 65 of the Rules of Court seeking a reversal of the Order dated
2 October 2006 of respondent Judge Teodoro A. Bay of Branch 86 of the Regional Trial Court (RTC) of
Quezon City, which denied the Motion to Withdraw Informations of the Office of the City Prosecutor of
Quezon City.
The facts of the case are as follows.
On 15 December 2003, two Informations for the crime of rape and one Information for the crime of acts of
lasciviousness were filed against petitioners Darryl Hipos, Jaycee Corsiño, Arthur Villaruel and two others
before Branch 86 of the Regional Trial Court of Quezon City, acting as a Family Court, presided by
respondent Judge Bay. The cases were docketed as Criminal Cases No. Q-03-123284, No. Q-03-123285
and No. Q-03-123286. The Informations were signed by Assistant City Prosecutor Ronald C. Torralba.
On 23 February 2004, private complainants AAA1 and BBB filed a Motion for Reinvestigation asking
Judge Bay to order the City Prosecutor of Quezon City to study if the proper Informations had been filed
against petitioners and their co-accused. Judge Bay granted the Motion and ordered a reinvestigation of the
cases.
On 19 May 2004, petitioners filed their Joint Memorandum to Dismiss the Case[s] before the City
Prosecutor. They claimed that there was no probable cause to hold them liable for the crimes charged.
On 10 August 2004, the Office of the City Prosecutor issued a Resolution on the reinvestigation affirming
the Informations filed against petitioners and their co-accused in Criminal Cases No. Q-03-123284-86. The
Resolution was signed by Assistant City Prosecutor Raniel S. Cruz and approved by City Prosecutor Claro
A. Arellano.
On 3 March 2006, 2nd Assistant City Prosecutor Lamberto C. de Vera, treating the Joint Memorandum to
Dismiss the Case as an appeal of the 10 August 2004 Resolution, reversed the Resolution dated 10 August
2004, holding that there was lack of probable cause. On the same date, the City Prosecutor filed a Motion
to Withdraw Informations before Judge Bay.
On 2 October 2006, Judge Bay denied the Motion to Withdraw Informations in an Order of even date.
Without moving for a reconsideration of the above assailed Order, petitioners filed the present Petition for
Mandamus, bringing forth this lone issue for our consideration:
CAN THE HON. SUPREME COURT COMPEL RESPONDENT JUDGE BAY TO DISMISS THE
CASE THROUGH A WRIT OF MANDAMUS BY VIRTUE OF THE RESOLUTION OF THE OFFICE
OF THE CITY PROSECUTOR OF QUEZON CITY FINDING NO PROBABLE CAUSE AGAINST
THE ACCUSED AND SUBSEQUENTLY FILING A MOTION TO WITHDRAW INFORMATION?2
Mandamus is an extraordinary writ commanding a tribunal, corporation, board, officer or person,
immediately or at some other specified time, to do the act required to be done, when the respondent
unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from
an office, trust, or station; or when the respondent excludes another from the use and enjoyment of a right
or office to which the latter is entitled, and there is no other plain, speedy and adequate remedy in the
ordinary course of law.3
As an extraordinary writ, the remedy of mandamus lies only to compel an officer to perform a ministerial
duty, not a discretionary one; mandamus will not issue to control the exercise of discretion by a public
officer where the law imposes upon him the duty to exercise his judgment in reference to any manner in
which he is required to act, because it is his judgment that is to be exercised and not that of the court. 4
In the case at bar, the act which petitioners pray that we compel the trial court to do is to grant the Office of
the City Prosecutor’s Motion for Withdrawal of Informations against petitioners. In effect, petitioners seek
to curb Judge Bay’s exercise of judicial discretion.
There is indeed an exception to the rule that matters involving judgment and discretion are beyond the
reach of a writ of mandamus, for such writ may be issued to compel action in those matters, when
refused.5 However, mandamus is never available to direct the exercise of judgment or discretion in a
particular way or the retraction or reversal of an action already taken in the exercise of either.6 In other
words, while a judge refusing to act on a Motion to Withdraw Informations can be compelled by
mandamus to act on the same, he cannot be compelled to act in a certain way, i.e., to grant or deny such
Motion. In the case at bar, Judge Bay did not refuse to act on the Motion to Withdraw Informations; he had
already acted on it by denying the same. Accordingly, mandamus is not available anymore. If petitioners
believed that Judge Bay committed grave abuse of discretion in the issuance of such Order denying the
Motion to Withdraw Informations, the proper remedy of petitioners should have been to file a Petition for
Certiorari against the assailed Order of Judge Bay.
Petitioners counter that the above conclusion, which has been argued by the Solicitor General, is contrary
to a ruling of this Court, which allegedly states that the proper remedy in such cases is a Petition for
Mandamus and not Certiorari. Petitioners cite the following excerpt from our ruling in Sanchez v.
Demetriou7:
The appreciation of the evidence involves the use of discretion on the part of the prosecutor, and we do not
find in the case at bar a clear showing by the petitioner of a grave abuse of such discretion.
The decision of the prosecutor may be reversed or modified by the Secretary of Justice or in special cases
by the President of the Philippines. But even this Court cannot order the prosecution of a person against
whom the prosecutor does not find sufficient evidence to support at least a prima facie case. The courts try
and absolve or convict the accused but as a rule have no part in the initial decision to prosecute him.
The possible exception is where there is an unmistakable showing of grave abuse of discretion that will
justify a judicial intrusion into the precincts of the executive. But in such a case the proper remedy to call
for such exception is a petition for mandamus, not certiorari or prohibition.8 (Emphases supplied.)
Petitioners have taken the above passage way out of its context. In the case of Sanchez, Calauan Mayor
Antonio Sanchez brought a Petition for Certiorari before this Court, challenging the order of the
respondent Judge therein denying his motion to quash the Information filed against him and six other
persons for alleged rape and homicide. One of the arguments of Mayor Sanchez was that there was
discrimination against him because of the non-inclusion of two other persons in the Information. We held
that even this Court cannot order the prosecution of a person against whom the prosecutor does not find
sufficient evidence to support at least a prima facie case. However, if there was an unmistakable showing
of grave abuse of discretion on the part of the prosecutors in that case, Mayor Sanchez should have filed a
Petition for Mandamus to compel the filing of charges against said two other persons.
In the case at bar, the Petition for Mandamus is directed not against the prosecution, but against the trial
court, seeking to compel the trial court to grant the Motion to Withdraw Informations by the City
Prosecutor’s Office. The prosecution has already filed a case against petitioners. Recently, in Santos v.
Orda, Jr.,9 we reiterated the doctrine we established in the leading case of Crespo v. Mogul, 10 that once a
criminal complaint or an information is filed in court, any disposition or dismissal of the case or acquittal
or conviction of the accused rests within the jurisdiction, competence, and discretion of the trial court.
Thus, we held:
In Crespo v. Mogul, the Court held that once a criminal complaint or information is filed in court, any
disposition of the case or dismissal or acquittal or conviction of the accused rests within the exclusive
jurisdiction, competence, and discretion of the trial court. The trial court is the best and sole judge on what
to do with the case before it. A motion to dismiss the case filed by the public prosecutor should be
addressed to the court who has the option to grant or deny the same. Contrary to the contention of the
petitioner, the rule applies to a motion to withdraw the Information or to dismiss the case even before or
after arraignment of the accused. The only qualification is that the action of the court must not impair the
substantial rights of the accused or the right of the People or the private complainant to due process of law.
When the trial court grants a motion of the public prosecutor to dismiss the case, or to quash the
Information, or to withdraw the Information in compliance with the directive of the Secretary of Justice, or
to deny the said motion, it does so not out of subservience to or defiance of the directive of the Secretary of
Justice but in sound exercise of its judicial prerogative.
Petitioners also claim that since Judge Bay granted a Motion for Reinvestigation, he should have "deferred
to the Resolution of Asst. City Prosecutor De Vera withdrawing the case."11 Petitioners cite the following
portion of our Decision in People v. Montesa, Jr.12:
In the instant case, the respondent Judge granted the motion for reinvestigation and directed the Office of
the Provincial Prosecutor of Bulacan to conduct the reinvestigation. The former was, therefore, deemed to
have deferred to the authority of the prosecution arm of the Government to consider the so-called new
relevant and material evidence and determine whether the information it had filed should stand. 13
Like what was done to our ruling in Sanchez, petitioners took specific statements from our Decision,
carefully cutting off the portions which would expose the real import of our pronouncements. The Petition
for Certiorari in Montesa, Jr. was directed against a judge who, after granting the Petition for
Reinvestigation filed by the accused, proceeded nonetheless to arraign the accused; and, shortly thereafter,
the judge decided to dismiss the case on the basis of a Resolution of the Assistant Provincial Prosecutor
recommending the dismissal of the case. The dismissal of the case in Montesa, Jr. was done despite the
disapproval of the Assistant Provincial Prosecutor’s Resolution by the Provincial Prosecutor (annotated in
the same Resolution), and despite the fact that the reinvestigation the latter ordered was still ongoing, since
the Resolution of the Assistant Provincial Prosecutor had not yet attained finality. We held that the judge
should have waited for the conclusion of the Petition for Reinvestigation he ordered, before acting on
whether or not the case should be dismissed for lack of probable cause, and before proceeding with the
arraignment. Thus, the continuation of the above paragraph of our Decision in Montesa, Jr. reads:
Having done so, it behooved the respondent Judge to wait for a final resolution of the incident. In Marcelo
vs. Court of Appeals, this Court ruled:
Accordingly, we rule that the trial court in a criminal case which takes cognizance of an accused's motion
for review of the resolution of the investigating prosecutor or for reinvestigation and defers the arraignment
until resolution of the said motion must act on the resolution reversing the investigating prosecutor's
finding or on a motion to dismiss based thereon only upon proof that such resolution is already final in that
no appeal was taken thereon to the Department of Justice.
The resolution of Assistant Provincial Prosecutor Rutor recommending the dismissal of the case never
became final, for it was not approved by the Provincial Prosecutor. On the contrary, the latter disapproved
it. As a consequence, the final resolution with respect to the reinvestigation is that of the Provincial
Prosecutor, for under Section 4, Rule 112 of the Rules of Court, no complaint or information may be filed
or dismissed by an investigating fiscal without the prior written authority or approval of the provincial or
city fiscal or chief state prosecutor. Also, under Section l(d) of R.A. No. 5180, as amended by P.D. No. 77
and P.D. No. 911.14
As can be clearly seen, the statement quoted by petitioners from Montesa, Jr. is not meant to establish a
doctrine that the judge should just follow the determination by the prosecutor of whether or not there is
probable cause. On the contrary, Montesa, Jr. states:
The rule is settled that once a criminal complaint or information is filed in court, any disposition thereof,
such as its dismissal or the conviction or acquittal of the accused, rests in the sound discretion of the court.
While the prosecutor retains the discretion and control of the prosecution of the case, he cannot impose his
opinion on the court. The court is the best and sole judge on what to do with the case. Accordingly, a
motion to dismiss the case filed by the prosecutor before or after the arraignment, or after a reinvestigation,
or upon instructions of the Secretary of Justice who reviewed the records upon reinvestigation, should be
addressed to the discretion of the court. The action of the court must not, however, impair the substantial
rights of the accused or the right of the People to due process of law. 15
In a seemingly desperate attempt on the part of petitioners’ counsel, he tries to convince us that a judge is
allowed to deny a Motion to Withdraw Informations from the prosecution only when there is grave abuse
of discretion on the part of the prosecutors moving for such withdrawal; and that, where there is no grave
abuse of discretion on the part of the prosecutors, the denial of the Motion to Withdraw Informations is
void. Petitioners’ counsel states in the Memorandum:
6.10. Furthermore, the ORDER dated October 2, 2006 of the Respondent Judge BAY consisting of 9 pages
which was attached to the URGENT PETITION did not point out any iota of grave abuse of discretion
committed by Asst. City Prosecutor De Vera in issuing his Resolution in favor of the sons of the
Petitioners. Hence, the ORDER issued by RJBAY is NULL and VOID in view of the recent ruling of the
Hon. Supreme Court in Ledesma vs. Court of Appeals, G.R. No. 113216, September 5, 1997, 86 SCAD
695, 278 SCRA 657 which states that:
"In the absence of a finding of grave abuse of discretion, the court’s bare denial of a motion to withdraw
information pursuant to the Secretary’s resolution is void." (Underscoring ours).
6.11. It is therefore respectfully submitted that the Hon. Supreme Court disregard the argument of the OSG
because of its falsity.16
This statement of petitioners’ counsel is utterly misleading. There is no such statement in our Decision in
Ledesma.17 The excerpt from Ledesma, which appears to have a resemblance to the statement allegedly
quoted from said case, provides:
No Grave Abuse of Discretion in the Resolution of the Secretary of Justice
In the light of recent holdings in Marcelo and Martinez; and considering that the issue of the correctness of
the justice secretary's resolution has been amply threshed out in petitioner's letter, the information, the
resolution of the secretary of justice, the motion to dismiss, and even the exhaustive discussion in the
motion for reconsideration - all of which were submitted to the court - the trial judge committed grave
abuse of discretion when it denied the motion to withdraw the information, based solely on his bare and
ambiguous reliance on Crespo. The trial court's order is inconsistent with our repetitive calls for an
independent and competent assessment of the issue(s) presented in the motion to dismiss. The trial judge
was tasked to evaluate the secretary's recommendation finding the absence of probable cause to hold
petitioner criminally liable for libel. He failed to do so. He merely ruled to proceed with the trial without
stating his reasons for disregarding the secretary's recommendation.18 (Emphasis supplied.)
It very much appears that the counsel of petitioners is purposely misleading this Court, in violation of Rule
10.02 of the Code of Professional Responsibility, which provides:
Rule 10.02 – A lawyer shall not knowingly misquote or misrepresent the contents of a paper, the language
or the argument of opposing counsel, or the text of a decision or authority, or knowingly cite as law a
provision already rendered inoperative by repel or amendment, or assert as a fact that which has not been
proved.
Counsel’s use of block quotation and quotation marks signifies that he intends to make it appear that the
passages are the exact words of the Court. Furthermore, putting the words "Underscoring ours" after the
text implies that, except for the underscoring, the text is a faithful reproduction of the original.
Accordingly, we are ordering Atty. Procopio S. Beltran, Jr. to show cause why he should not be disciplined
as a member of the Bar.
To clarify, we never stated in Ledesma that a judge is allowed to deny a Motion to Withdraw Information
from the prosecution only when there is grave abuse of discretion on the part of the prosecutors moving for
such withdrawal. Neither did we rule therein that where there is no grave abuse of discretion on the part of
the prosecutors, the denial of the Motion to Withdraw Information is void. What we held therein is that a
trial judge commits grave abuse of discretion if he denies a Motion to Withdraw Information without an
independent and complete assessment of the issues presented in such Motion. Thus, the opening paragraph
of Ledesma states:
When confronted with a motion to withdraw an information on the ground of lack of probable cause based
on a resolution of the secretary of justice, the bounden duty of the trial court is to make an independent
assessment of the merits of such motion. Having acquired jurisdiction over the case, the trial court is not
bound by such resolution but is required to evaluate it before proceeding further with the trial. While the
secretary's ruling is persuasive, it is not binding on courts. A trial court, however, commits reversible error
or even grave abuse of discretion if it refuses/neglects to evaluate such recommendation and simply insists
on proceeding with the trial on the mere pretext of having already acquired jurisdiction over the criminal
action.19 (Emphases supplied.)1avvphi1.zw+
Petitioners also try to capitalize on the fact that the dispositive portion of the assailed Order apparently
states that there was no probable cause against petitioners:
WHEREFORE, finding no probable cause against the herein accused for the crimes of rapes and acts of
lasciviousness, the motion to withdraw informations is DENIED.
Let the case be set for arraignment and pre-trial on October 24, 2006 at 8:30 o’clock in the
morning.20(Underscoring ours.) Thus, petitioners claim that since even the respondent judge himself found
no probable cause against them, the Motion to Withdraw Informations by the Office of the City Prosecutor
should be granted.21
Even a cursory reading of the assailed Order, however, clearly shows that the insertion of the word "no" in
the above dispositive portion was a mere clerical error. The assailed Order states in full:
After a careful study of the sworn statements of the complainants and the resolution dated March 3, 2006
of 2nd Assistant City Prosecutor Lamberto C. de Vera, the Court finds that there was probable cause
against the herein accused. The actuations of the complainants after the alleged rapes and acts of
lasciviousness cannot be the basis of dismissal or withdrawal of the herein cases. Failure to shout or offer
tenatious resistance did not make voluntary the complainants’ submission to the criminal acts of the
accused (People v. Velasquez, 377 SCRA 214, 2002). The complainants’ affidavits indicate that the
accused helped one another in committing the acts complained of. Considering that the attackers were not
strangers but their trusted classmates who enticed them to go to the house where they were molested, the
complainants cannot be expected to react forcefully or violently in protecting themselves from the
unexpected turn of events. Considering also that both complainants were fifteen (15) years of age and
considered children under our laws, the ruling of the Supreme Court in People v. Malones, G.R. Nos.
124388-90, March 11, 2004 becomes very relevant. The Supreme Court ruled as follows:
Rape victims, especially child victims, should not be expected to act the way mature individuals would
when placed in such a situation. It is not proper to judge the actions of children who have undergone
traumatic experience by the norms of behavior expected from adults under similar circumstances. The
range of emotions shown by rape victim is yet to be captured even by calculus. It is, thus, unrealistic to
expect uniform reactions from rape victims (People v. Malones, G.R. Nos. 124388-90, March 11, 2004).
The Court finds no need to discuss in detail the alleged actuations of the complainants after the alleged
rapes and acts of lasciviousness. The alleged actuations are evidentiary in nature and should be evaluated
after full blown trial on the merits. This is necessary to avoid a suspicion of prejudgment against the
accused.22
As can be seen, the body of the assailed Order not only plainly stated that the court found probable cause
against the petitioners, but likewise provided an adequate discussion of the reasons for such finding.
Indeed, the general rule is that where there is a conflict between the dispositive portion or the fallo and the
body of the decision, the fallo controls. However, where the inevitable conclusion from the body of the
decision is so clear as to show that there was a mistake in the dispositive portion, the body of the decision
will prevail.23
In sum, petitioners’ resort to a Petition for Mandamus to compel the trial judge to grant their Motion to
Withdraw Informations is improper. While mandamus is available to compel action on matters involving
judgment and discretion when refused, it is never available to direct the exercise of judgment or discretion
in a particular way or the retraction or reversal of an action already taken in the exercise of either. 24 The
trial court, when confronted with a Motion to Withdraw an Information on the ground of lack of probable
cause, is not bound by the resolution of the prosecuting arm of the government, but is required to make an
independent assessment of the merits of such motion, a requirement satisfied by the respondent judge in
the case at bar.25
Finally, if only to appease petitioners who came to this Court seeking a review of the finding of probable
cause by the trial court, we nevertheless carefully reviewed the records of the case. After going through the
same, we find that we are in agreement with the trial court that there is indeed probable cause against the
petitioners sufficient to hold them for trial. We decided to omit a detailed discussion of the merits of the
case, as we are not unmindful of the undue influence that might result should this Court do so, even if such
discussion is only intended to focus on the finding of probable cause.
WHEREFORE, the instant Petition for Mandamus is DISMISSED. Let the records of this case be
remanded to the Regional Trial Court of Quezon City for the resumption of the proceedings therein. The
Regional Trial Court is directed to act on the case with dispatch. Atty. Procopio S. Beltran, Jr. is
ORDERED to SHOW CAUSE why he should not be disciplined as a member of the Bar for his disquieting
conduct as herein discussed. SO ORDERED.
 list submitted by Galvante was not actually of the constables whose applications for absorption were
indorsed for approval, but of those whose applications were still to be reviewed, evaluated and disposed of.
In other words, the 126 named in the list were still to be interviewed and their applications to be
G.R. No. 161735 September 25, 2007
deliberated upon by the PNP Special Committee.13

EX-C1C JIMMY B. SANCHEZ and EX-C2C SALVADOR A. METEORO, Petitioners,

On November 15, 2001, however, the RTC rendered its Decision14 in the mandamus case declaring as void
vs.
ab initio NAPOLCOM Resolution No. 99-061 and ruling in favor of the petitioners. The dispositive
ROBERTO T. LASTIMOSO, in his capacity as DIRECTOR GENERAL OF THE PHILIPPINE
portion of the Decision reads:
NATIONAL POLICE,Respondent.

Accordingly, therefore, the petition is hereby granted. The Director-General of the Philippine National
DECISION
Police is hereby directed to immediately issue absorption orders to the petitioners.

NACHURA, J.:
Resolution No. 99-061 is declared void ab initio.

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the
IT IS SO ORDERED.15
June 18, 2003 Decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 68989 and the January 15, 2004
Resolution3 denying the motion for reconsideration thereof.
On appeal, the CA, in the assailed June 18, 2003 Decision,16 reversed the ruling of the trial court and ruled
that a writ of mandamus could not be issued because petitioners had not established with distinct clarity
In 1989, petitioner Sanchez, a constable in the Philippine Constabulary (PC), was discharged from the
their right to be absorbed into the PNP. The CA disposed of the appeal as follows:
service for allegedly losing his service firearm. Petitioner Meteoro, also a constable, was likewise
discharged from the service in 1990 for being absent without leave. On appeal, they were both cleared of
all charges. They then applied for reinstatement but their applications were not acted upon even up to the WHEREFORE, the appeal is GRANTED. The decision of the trial court dated November 15, 2001 is
integration of the PC into the Philippine National Police (PNP).4 hereby REVERSED and SET ASIDE.

On January 27, 1998, the National Police Commission (NAPOLCOM) issued Resolution No. 98-037 SO ORDERED.17
considering as absorbed into the police force, among others, those who had been discharged by virtue of
pending administrative or criminal cases but who were later acquitted or had their cases dismissed, and
The appellate court later denied petitioners’ motion for reconsideration in the likewise assailed January 15,
who subsequently filed petitions for reinstatement that were not acted upon by the PNP.5 Then, on April 3,
2004 Resolution.18
1998, NAPOLCOM

Aggrieved, petitioners brought the case before us via a petition for review on certiorari, raising for our
issued Resolution No. 98-105 affirming and confirming the absorption into the PNP, effective on January
disposition the following issues:
27, 1998, of the 126 ex-PC constables named in the list submitted by Director Edgar C. Galvante of the
PNP Directorate for Personnel and Records Management (DPRM). 6 Petitioners Sanchez and Meteoro are
in numbers 90 and 122, respectively, of the Galvante list.7 I

Subsequently, on May 28, 1998, NAPOLCOM Commissioner Rogelio A. Pureza issued a Memorandum to WHETHER OR NOT PETITIONERS HAVE A CLEAR LEGAL RIGHT TO BE ABSORBED
then Chief of the PNP Santiago Alino for the issuance of absorption orders to the 45 PC constables IN THE PHILIPPINE NATIONAL POLICE.
included in the initial batch of those covered by the PNP Board Resolutions. 8 Petitioner Sanchez is in
number 45 of that list.9
II.

As no absorption order had yet been issued by the Chief of the PNP, the constables in the list requested the
assistance of the Secretary of the Department of Interior and Local Government (DILG). On July 29, 1998,
the Office of the Secretary of the DILG sent a memorandum to respondent Roberto T. Lastimoso, then the
Chief of the PNP, endorsing the constables’ entreaties and requesting for a feedback thereon. 10
WHETHER OR NOT RESOLUTION NO. 99-061 IS VOID FOR BEING VIOLATIVE OF
THE PROVISIONS OF R.A. 7965 AND ITS IMPLEMENTING RESOLUTIONS NO. 98-037
AND 98-105.

Without any response from the Chief of the PNP, and their pleas for the issuance of the absorption orders III.
still unacted upon, petitioners instituted, on September 30, 1998, a petition for mandamus docketed as Civil
Case No. Q-98-35659 in the Regional Trial Court (RTC) of Quezon City.11 WHETHER OR NOT PETITIONERS HAVE A CAUSE OF ACTION FOR MANDAMUS TO
COMPEL THE RESPONDENT TO ABSORB THE PETITIONERS IN THE PHILIPPINE
NATIONAL POLICE.19
During the pendency of the said petition, NAPOLCOM issued Resolution No. 99-061 on April 19, 1999
recalling the earlier Resolution No. 98-105.12 The recall was based on the Commission’s finding that the
The petition has no merit. Also improper is the trial court’s declaration that NAPOLCOM Resolution No. 99-061 is void ab initio. In
the petition filed below, only the Chief of the PNP is impleaded as the party-defendant.30 NAPOLCOM
was never impleaded. As it was the latter, a separate entity, which had issued Resolution No. 99-061,
We have repeatedly stressed in our prior decisions that the remedy of mandamus is employed only to
NAPOLCOM was an indispensable party over which the trial court should have acquired jurisdiction.
compel the performance, when refused, of a ministerial duty, but not to require anyone to fulfill a
Since it was not impleaded, NAPOLCOM remains a stranger to the case, and strangers are not bound by
discretionary one. The issuance of the writ is simply a command to exercise a power already possessed and
the judgment rendered by the court.31 The absence of an indispensable party renders all subsequent actions
to perform a duty already imposed.20 In Manila International Airport Authority v. Rivera Village Lessee
of the court null and void for want of authority to act, not only as to the absent parties but even as to those
Homeowners Association, Inc.,21 we emphasized, through the erudite and eloquent ponencia of Justice
present.32
Dante O. Tinga, that the writ can be issued only when the applicant’s legal right to the performance of a
particular act sought to be compelled is clear and complete, one which is indubitably granted by law or is
inferable as a matter of law, thus: WHEREFORE, premises considered, the petition is DENIED. The June 18, 2003 Decision and the January
15, 2004 Resolution of the Court of Appeals in CA-G.R. SP No. 68989 are AFFIRMED.
In order that a writ of mandamus may aptly issue, it is essential that, on the one hand, petitioner has a clear
legal right to the claim that is sought and that, on the other hand, respondent has an imperative duty to SO ORDERED.
perform that which is demanded of him. Mandamus will not issue to enforce a right, or to compel
compliance with a duty, which is questionable or over which a substantial doubt exists. The principal
function of the writ of mandamus is to command and to expedite, not to inquire and to adjudicate. Thus, it
is neither the office nor the aim of the writ to secure a legal right but to implement that which is already
established. Unless the right to relief sought is unclouded, mandamus will not issue. 22

Viewed in light of the said guideposts, the PNP Chief’s issuance of the orders for the absorption of herein
petitioners in the police force is not compellable by a writ of mandamus precisely because the same does
not involve a performance of a ministerial duty. Let it be noted that petitioners were discharged from the
PC service, subsequently cleared of the charges against them, applied for reinstatement but their
applications were not acted upon until the integration of the PC into the PNP in 1990 when R.A. No.
697523 was enacted. Thus, we no longer speak of the reinstatement of the petitioners to the service because
the Philippine Constabulary no longer exists, but of their employment in the PNP which is, as we held in
Gloria v. De Guzman,24 technically an issuance of a new appointment. The power to appoint is essentially
discretionary to be performed by the officer in which it is vested according to his best lights, the only
condition being that the appointee should possess the qualifications required by law. 25 Consequently, it
cannot be the subject of an application for a writ of mandamus. 26

Furthermore, the petitioners do not have a clear legal right over the issuance of the absorption
orders.1âwphi1 They cannot claim the right to be issued an appointment based on the NAPOLCOM
issuances, specifically Resolution Nos. 98-037 and 98-105. Suffice it to state that R.A. No. 6975 clearly
provides that the power to appoint PNP personnel with the rank of "Police Officer I" to "Senior Police
Officer IV" to which petitioners may be appointed27 is vested in the PNP regional director or in the Chief
of the PNP as the case may be, and not in the NAPOLCOM, thus:

Section 31. Appointment of PNP Officers and Members.—The appointment of the officers and members
of the PNP shall be effected in the following manner:

(a) Police Officer I to Senior Police Officer IV.—Appointed by the PNP regional director for regional
personnel or by the Chief of the PNP for the national headquarters personnel and attested by the Civil
Service Commission.

x x x28

Even if, for the sake of argument, petitioners can derive a right from NAPOLCOM Resolution Nos. 98-037
and 98-105, still their right collapses and their mandamus petition becomes moot with the issuance by
NAPOLCOM of Resolution No. 99-061 recalling the approval of their absorption. The trial court should
then have immediately dismissed the mandamus petition when the OSG submitted a copy of Resolution
No. 99-061 because well-settled is the rule that courts will not resolve a moot question.29

G.R. No. 156052 March 7, 2007
SOCIAL JUSTICE SOCIETY (SJS), VLADIMIR ALARIQUE T. CABIGAO, and BONIFACIO S.
TUMBOKON, Petitioners,
vs.
HON. JOSE L. ATIENZA, JR., in his capacity as Mayor of the City of Manila, Respondent.
DECISION
CORONA, J.:
In this original petition for mandamus,1 petitioners Social Justice Society (SJS), Vladimir Alarique T.
Cabigao and Bonifacio S. Tumbokon seek to compel respondent Hon. Jose L. Atienza, Jr., mayor of the
City of Manila, to enforce Ordinance No. 8027.
The antecedents are as follows.
On November 20, 2001, the Sangguniang Panlungsod of Manila enacted Ordinance No.
8027.2 Respondent mayor approved the ordinance on November 28, 2001. 3 It became effective on
December 28, 2001, after its publication.4
Ordinance No. 8027 was enacted pursuant to the police power delegated to local government units, a
principle described as the power inherent in a government to enact laws, within constitutional limits, to
promote the order, safety, health, morals and general welfare of the society. 5 This is evident from Sections
1 and 3 thereof which state:
SECTION 1. For the purpose of promoting sound urban planning and ensuring health, public safety, and
general welfare of the residents of Pandacan and Sta. Ana as well as its adjoining areas, the land use of
[those] portions of land bounded by the Pasig River in the north, PNR Railroad Track in the east, Beata St.
in the south, Palumpong St. in the southwest, and Estero de Pancacan in the west[,] PNR Railroad in the
northwest area, Estero de Pandacan in the [n]ortheast, Pasig River in the southeast and Dr. M.L. Carreon in
the southwest. The area of Punta, Sta. Ana bounded by the Pasig River, Marcelino Obrero St., Mayo 28 St.,
and F. Manalo Street, are hereby reclassified from Industrial II to Commercial I.
xxx xxx xxx
SEC. 3. Owners or operators of industries and other businesses, the operation of which are no longer
permitted under Section 1 hereof, are hereby given a period of six (6) months from the date of effectivity
of this Ordinance within which to cease and desist from the operation of businesses which are hereby in
consequence, disallowed.
Ordinance No. 8027 reclassified the area described therein from industrial to commercial and directed the
owners and operators of businesses disallowed under Section 1 to cease and desist from operating their
businesses within six months from the date of effectivity of the ordinance. Among the businesses situated
in the area are the so-called "Pandacan Terminals" of the oil companies Caltex (Philippines), Inc., Petron
Corporation and Pilipinas Shell Petroleum Corporation.
However, on June 26, 2002, the City of Manila and the Department of Energy (DOE) entered into a
memorandum of understanding (MOU)6 with the oil companies in which they agreed that "the scaling
down of the Pandacan Terminals [was] the most viable and practicable option." Under the MOU, the oil
companies agreed to perform the following:
Section 1. - Consistent with the objectives stated above, the OIL COMPANIES shall, upon signing of this
MOU, undertake a program to scale down the Pandacan Terminals which shall include, among others, the
immediate removal/decommissioning process of TWENTY EIGHT (28) tanks starting with the LPG
spheres and the commencing of works for the creation of safety buffer and green zones surrounding the
Pandacan Terminals. xxx
Section 2. – Consistent with the scale-down program mentioned above, the OIL COMPANIES shall
establish joint operations and management, including the operation of common, integrated and/or shared
facilities, consistent with international and domestic technical, safety, environmental and economic
considerations and standards. Consequently, the joint operations of the OIL COMPANIES in the Pandacan
Terminals shall be limited to the common and integrated areas/facilities. A separate agreement covering
the commercial and operational terms and conditions of the joint operations, shall be entered into by the
OIL COMPANIES.
Section 3. - The development and maintenance of the safety and green buffer zones mentioned therein,
which shall be taken from the properties of the OIL COMPANIES and not from the surrounding
communities, shall be the sole responsibility of the OIL COMPANIES.
The City of Manila and the DOE, on the other hand, committed to do the following:
Section 1. - The City Mayor shall endorse to the City Council this MOU for its appropriate action with the
view of implementing the spirit and intent thereof.
Section 2. - The City Mayor and the DOE shall, consistent with the spirit and intent of this MOU, enable
the OIL COMPANIES to continuously operate in compliance with legal requirements, within the limited
area resulting from the joint operations and the scale down program.
Section 3. - The DOE and the City Mayor shall monitor the OIL COMPANIES’ compliance with the
provisions of this MOU.
Section 4. - The CITY OF MANILA and the national government shall protect the safety buffer and green
zones and shall exert all efforts at preventing future occupation or encroachment into these areas by illegal
settlers and other unauthorized parties.
The Sangguniang Panlungsod ratified the MOU in Resolution No. 97.7 In the same resolution,
the Sangguniandeclared that the MOU was effective only for a period of six months starting July 25,
2002.8 Thereafter, on January 30, 2003, the Sanggunian adopted Resolution No. 139 extending the validity
of Resolution No. 97 to April 30, 2003 and authorizing Mayor Atienza to issue special business permits to
the oil companies. Resolution No. 13, s. 2003 also called for a reassessment of the ordinance. 10
Meanwhile, petitioners filed this original action for mandamus on December 4, 2002 praying that Mayor
Atienza be compelled to enforce Ordinance No. 8027 and order the immediate removal of the terminals of
the oil companies.11
The issues raised by petitioners are as follows:
 1. whether respondent has the mandatory legal duty to enforce Ordinance No. 8027 and order declared unconstitutional. Officers of the government from the highest to the lowest are creatures of the law and are bound to obey
the removal of the Pandacan Terminals, and it.23

2. whether the June 26, 2002 MOU and the resolutions ratifying it can amend or repeal The question now is whether the MOU entered into by respondent with the oil companies and the subsequent resolutions passed by
Ordinance No. 8027.12
the Sanggunian have made the respondent’s duty to enforce Ordinance No. 8027 doubtful, unclear or uncertain. This is also
connected to the second issue raised by petitioners, that is, whether the MOU and Resolution Nos. 97, s. 2002 and 13, s. 2003 of
Petitioners contend that respondent has the mandatory legal duty, under Section 455 (b) (2) of the Local
the Sanggunian can amend or repeal Ordinance No. 8027.
Government Code (RA 7160),13 to enforce Ordinance No. 8027 and order the removal of the Pandacan
Terminals of the oil companies. Instead, he has allowed them to stay.
We need not resolve this issue. Assuming that the terms of the MOU were inconsistent with Ordinance No. 8027, the resolutions
Respondent’s defense is that Ordinance No. 8027 has been superseded by the MOU and the which ratified it and made it binding on the City of Manila expressly gave it full force and effect only until April 30, 2003. Thus, at
resolutions.14However, he also confusingly argues that the ordinance and MOU are not inconsistent with present, there is nothing that legally hinders respondent from enforcing Ordinance No. 8027.24
each other and that the latter has not amended the former. He insists that the ordinance remains valid and in
full force and effect and that the MOU did not in any way prevent him from enforcing and implementing it.
He maintains that the MOU should be considered as a mere guideline for its full implementation. 15 Ordinance No. 8027 was enacted right after the Philippines, along with the rest of the world, witnessed the horror of the September
11, 2001 attack on the Twin Towers of the World Trade Center in New York City. The objective of the ordinance is to protect the
Under Rule 65, Section 316 of the Rules of Court, a petition for mandamus may be filed when any tribunal, residents of Manila from the catastrophic devastation that will surely occur in case of a terrorist attack25 on the Pandacan
corporation, board, officer or person unlawfully neglects the performance of an act which the law Terminals. No reason exists why such a protective measure should be delayed.
specifically enjoins as a duty resulting from an office, trust or station. Mandamus is an extraordinary writ
that is employed to compel the performance, when refused, of a ministerial duty that is already imposed on
the respondent and there is no other plain, speedy and adequate remedy in the ordinary course of law. The WHEREFORE, the petition is hereby GRANTED. Respondent Hon. Jose L. Atienza, Jr., as mayor of the City of Manila, is
petitioner should have a well-defined, clear and certain legal right to the performance of the act and it must directed to immediately enforce Ordinance No. 8027.
be the clear and imperative duty of respondent to do the act required to be done.17

SO ORDERED.
Mandamus will not issue to enforce a right, or to compel compliance with a duty, which is questionable or
over which a substantial doubt exists. The principal function of the writ of mandamus is to command and
to expedite, not to inquire and to adjudicate; thus, it is neither the office nor the aim of the writ to secure a
legal right but to implement that which is already established. Unless the right to the relief sought is
unclouded, mandamus will not issue.18

To support the assertion that petitioners have a clear legal right to the enforcement of the ordinance,
petitioner SJS states that it is a political party registered with the Commission on Elections and has its
offices in Manila. It claims to have many members who are residents of Manila. The other petitioners,
Cabigao and Tumbokon, are allegedly residents of Manila.

We need not belabor this point. We have ruled in previous cases that when a mandamus proceeding
concerns a public right and its object is to compel a public duty, the people who are interested in the
execution of the laws are regarded as the real parties in interest and they need not show any specific
interest.19 Besides, as residents of Manila, petitioners have a direct interest in the enforcement of the city’s
ordinances. Respondent never questioned the right of petitioners to institute this proceeding.

On the other hand, the Local Government Code imposes upon respondent the duty, as city mayor, to
"enforce all laws and ordinances relative to the governance of the city.">20 One of these is Ordinance No.
8027. As the chief executive of the city, he has the duty to enforce Ordinance No. 8027 as long as it has not
been repealed by the Sanggunian or annulled by the courts.21 He has no other choice. It is his ministerial duty to do
so. In Dimaporo v. Mitra, Jr.,22 we stated the reason for this:

These officers cannot refuse to perform their duty on the ground of an alleged invalidity of the statute imposing the duty. The
reason for this is obvious. It might seriously hinder the transaction of public business if these officers were to be permitted in all
cases to question the constitutionality of statutes and ordinances imposing duties upon them and which have not judicially been

G.R. No. 193462 February 4, 2014
DENNIS A.B. FUNA, Petitioner,
vs.
MANILA ECONOMIC AND CULTURAL OFFICE and the COMMISSION ON
AUDIT, Respondents.
DECISION
PEREZ, J.:
This is a petition for mandamus1 to compel:
1.) the Commission on Audit (COA) to audit and examine the funds of the Manila Economic
and Cultural Office (MECO), and
2.) the MECO to submit to such audit and examination.
The antecedents:
Prelude
The aftermath of the Chinese civil war2 left the country of China with two (2) governments in a stalemate
espousing competing assertions of sovereignty.3 On one hand is the communist People’s Republic of China
(PROC) which controls the mainland territories, and on the other hand is the nationalist Republic of China
(ROC) which controls the island of Taiwan. For a better part of the past century, both the PROC and ROC
adhered to a policy of "One China" i.e., the view that there is only one legitimate government in China, but
differed in their respective interpretation as to which that government is.4
With the existence of two governments having conflicting claims of sovereignty over one country, came
the question as to which of the two is deserving of recognition as that country’s legitimate government.
Even after its relocation to Taiwan, the ROC used to enjoy diplomatic recognition from a majority of the
world’s states, partly due to being a founding member of the United Nations (UN). 5 The number of states
partial to the PROC’s version of the One China policy, however, gradually increased in the 1960s and 70s,
most notably after the UN General Assembly adopted the monumental Resolution 2758 in 1971.6 Since
then, almost all of the states that had erstwhile recognized the ROC as the legitimate government of China,
terminated their official relations with the said government, in favor of establishing diplomatic relations
with the PROC.7 The Philippines is one of such states.
The Philippines formally ended its official diplomatic relations with the government in Taiwan on 9 June
1975, when the country and the PROC expressed mutual recognition thru the Joint Communiqué of the
Government of the Republic of the Philippines and the Government of the People’s Republic of China
(Joint Communiqué).8
Under the Joint Communiqué, the Philippines categorically stated its adherence to the One China policy of
the PROC. The pertinent portion of the Joint Communiqué reads:9
The Philippine Government recognizes the Government of the People’s Republic of China as the sole legal
government of China, fully understands and respects the position of the Chinese Government that there is
but one China and that Taiwan is an integral part of Chinese territory, and decides to remove all its official
representations from Taiwan within one month from the date of signature of this communiqué. (Emphasis
supplied)
The Philippines’ commitment to the One China policy of the PROC, however, did not preclude the country
from keeping unofficial relations with Taiwan on a "people-to-people" basis.10 Maintaining ties with
Taiwan that is permissible by the terms of the Joint Communiqué, however, necessarily required the
Philippines, and Taiwan, to course any such relations thru offices outside of the official or governmental
organs.
Hence, despite ending their diplomatic ties, the people of Taiwan and of the Philippines maintained an
unofficial relationship facilitated by the offices of the Taipei Economic and Cultural Office, for the former,
and the MECO, for the latter.11
The MECO12 was organized on 16 December 1997 as a non-stock, non-profit corporation under Batas
Pambansa Blg. 68 or the Corporation Code.13 The purposes underlying the incorporation of MECO, as
stated in its articles of incorporation,14 are as follows:
1. To establish and develop the commercial and industrial interests of Filipino nationals here
and abroad, and assist on all measures designed to promote and maintain the trade relations of
the country with the citizens of other foreign countries;
2. To receive and accept grants and subsidies that are reasonably necessary in carrying out the
corporate purposes provided they are not subject to conditions defeatist for or incompatible with
said purpose;
3. To acquire by purchase, lease or by any gratuitous title real and personal properties as may be
necessary for the use and need of the corporation, and to dispose of the same in like manner
when they are no longer needed or useful; and
4. To do and perform any and all acts which are deemed reasonably necessary to carry out the
purposes. (Emphasis supplied)
From the moment it was incorporated, the MECO became the corporate entity "entrusted" by the
Philippine government with the responsibility of fostering "friendly" and "unofficial" relations with the
people of Taiwan, particularly in the areas of trade, economic cooperation, investment, cultural, scientific
and educational exchanges.15To enable it to carry out such responsibility, the MECO was "authorized" by
the government to perform certain "consular and other functions" that relates to the promotion, protection
and facilitation of Philippine interests in Taiwan.16
At present, it is the MECO that oversees the rights and interests of Overseas Filipino Workers (OFWs) in
Taiwan; promotes the Philippines as a tourist and investment destination for the Taiwanese; and facilitates
the travel of Filipinos and Taiwanese from Taiwan to the Philippines, and vice versa.17
Facts Leading to the Mandamus Petition
On 23 August 2010, petitioner sent a letter18 to the COA requesting for a "copy of the latest financial and
audit report" of the MECO invoking, for that purpose, his "constitutional right to information on matters of
public concern." The petitioner made the request on the belief that the MECO, being under the "operational
supervision" of the Department of Trade and Industry (DTI), is a government owned and controlled To further bolster his position that the accounts of the MECO ought to be audited by the COA, the
corporation (GOCC) and thus subject to the audit jurisdiction of the COA.19 petitioner calls attention to the practice, allegedly prevailing in the United States of America, wherein the
American Institute in Taiwan (AIT)—the counterpart entity of the MECO in the United States—is
supposedly audited by that country’s Comptroller General.31 Petitioner claims that this practice had been
Petitioner’s letter was received by COA Assistant Commissioner Jaime P. Naranjo, the following day.
confirmed in a decision of the United States Court of Appeals for the District of Columbia Circuit, in the
case of Wood, Jr., ex rel. United States of America v. The American Institute in Taiwan, et al. 32
On 25 August 2010, Assistant Commissioner Naranjo issued a memorandum20 referring the petitioner’s
request to COA Assistant Commissioner Emma M. Espina for "further disposition." In this memorandum,
The Position of the MECO
however, Assistant Commissioner Naranjo revealed that the MECO was "not among the agencies audited
by any of the three Clusters of the Corporate Government Sector."21
The MECO prays for the dismissal of the mandamus petition on procedural and substantial grounds.
On 7 September 2010, petitioner learned about the 25 August 2010 memorandum and its contents.
On procedure, the MECO argues that the mandamus petition was prematurely filed.33
Mandamus Petition
The MECO posits that a cause of action for mandamus to compel the performance of a ministerial duty
required by law only ripens once there has been a refusal by the tribunal, board or officer concerned to
Taking the 25 August 2010 memorandum as an admission that the COA had never audited and examined
perform such a duty.34The MECO claims that there was, in this case, no such refusal either on its part or on
the accounts of the MECO, the petitioner filed the instant petition for mandamus on 8 September 2010.
the COA’s because the petitioner never made any demand for it to submit to an audit by the COA or for the
Petitioner filed the suit in his capacities as "taxpayer, concerned citizen, a member of the Philippine Bar
COA to perform such an audit, prior to filing the instant mandamus petition. 35 The MECO further points
and law book author."22 He impleaded both the COA and the MECO.
out that the only "demand" that the petitioner made was his request to the COA for a copy of the MECO’s
latest financial and audit report— which request was not even finally disposed of by the time the instant
Petitioner posits that by failing to audit the accounts of the MECO, the COA is neglecting its duty under petition was filed.36
Section 2(1), Article IX-D of the Constitution to audit the accounts of an otherwise bona fide GOCC or
government instrumentality. It is the adamant claim of the petitioner that the MECO is a GOCC without an
On the petition’s merits, the MECO denies the petitioner’s claim that it is a GOCC or a government
original charter or, at least, a government instrumentality, the funds of which partake the nature of public
instrumentality.37While performing public functions, the MECO maintains that it is not owned or
funds.23
controlled by the government, and its funds are private funds.38 The MECO explains:

According to petitioner, the MECO possesses all the essential characteristics of a GOCC and an
1. It is not owned or controlled by the government. Contrary to the allegations of the petitioner,
instrumentality under the Executive Order No. (EO) 292, s. 1987 or the Administrative Code: it is a non-
the President of the Philippines does not appoint its board of directors.39 The "desire letter" that
stock corporation vested with governmental functions relating to public needs; it is controlled by the
the President transmits is merely recommendatory and not binding on the corporation. 40 As a
government thru a board of directors appointed by the President of the Philippines; and while not
corporation organized under the Corporation Code, matters relating to the election of its
integrated within the executive departmental framework, it is nonetheless under the operational and policy
directors and officers, as well as its membership, are governed by the appropriate provisions of
supervision of the DTI.24 As petitioner substantiates:
the said code, its articles of incorporation and its by-laws.41 Thus, it is the directors who elect
the corporation’s officers; the members who elect the directors; and the directors who admit the
1. The MECO is vested with government functions. It performs functions that are equivalent to members by way of a unanimous resolution. All of its officers, directors, and members are
those of an embassy or a consulate of the Philippine government. 25 A reading of the authorized private individuals and are not government officials.42
functions of the MECO as found in EO No. 15, s. 2001, reveals that they are substantially the
same functions performed by the Department of Foreign Affairs (DFA), through its diplomatic
2. The government merely has policy supervision over it. Policy supervision is a lesser form of
and consular missions, per the Administrative Code.26
supervision wherein the government’s oversight is limited only to ensuring that the
corporation’s activities are in tune with the country’s commitments under the One China policy
2. The MECO is controlled by the government. It is the President of the Philippines that of the PROC.43 The day-to-day operations of the corporation, however, remain to be controlled
actually appoints the directors of the MECO, albeit indirectly, by way of "desire letters" by its duly elected board of directors.44
addressed to the MECO’s board of directors.27 An illustration of this exercise is the assumption
by Mr. Antonio Basilio as chairman of the board of directors of the MECO in 2001, which was
The MECO emphasizes that categorizing it as a GOCC or a government instrumentality can potentially
accomplished when former President Gloria Macapagal-Arroyo, through a
violate the country’s commitment to the One China policy of the PROC.45 Thus, the MECO cautions
memorandum28 dated 20 February 2001, expressed her "desire" to the board of directors of the
against applying to the present mandamus petition the pronouncement in the Wood decision regarding the
MECO for the election of Mr. Basilio as chairman.29
alleged auditability of the AIT in the United States.46

3. The MECO is under the operational and policy supervision of the DTI. The MECO was
The Position of the COA
placed under the operational supervision of the DTI by EO No. 328, s. of 2004, and again under
the policy supervision of the same department by EO No. 426, s. 2005. 30
The COA, on the other hand, advances that the mandamus petition ought to be dismissed on procedural
grounds and on the ground of mootness.
The COA argues that the mandamus petition suffers from the following procedural defects:
1. The petitioner lacks locus standi to bring the suit. The COA claims that the petitioner has not
shown, at least in a concrete manner, that he had been aggrieved or prejudiced by its failure to
audit the accounts of the MECO.47
2. The petition was filed in violation of the doctrine of hierarchy of courts. The COA faults the
filing of the instant mandamus petition directly with this Court, when such petition could have
very well been presented, at the first instance, before the Court of Appeals or any Regional
Trial Court.48 The COA claims that the petitioner was not able to provide compelling reasons to
justify a direct resort to the Supreme Court.49
At any rate, the COA argues that the instant petition already became moot when COA Chairperson Maria
Gracia M. Pulido-Tan (Pulido-Tan) issued Office Order No. 2011-69850 on 6 October 2011.51 The COA
notes that under Office Order No. 2011-698, Chairperson Pulido-Tan already directed a team of auditors to
proceed to Taiwan, specifically for the purpose of auditing the accounts of, among other government
agencies based therein, the MECO.52
In conceding that it has audit jurisdiction over the accounts of the MECO, however, the COA clarifies that
it does not consider the former as a GOCC or a government instrumentality. On the contrary, the COA
maintains that the MECO is a non-governmental entity.53
The COA argues that, despite being a non-governmental entity, the MECO may still be audited with
respect to the "verification fees" for overseas employment documents that it collects from Taiwanese
employers on behalf of the DOLE.54 The COA claims that, under Joint Circular No. 3-99,55 the MECO is
mandated to remit to the Department of Labor and Employment (DOLE) a portion of such "verification
fees."56 The COA, therefore, classifies the MECO as a non-governmental entity "required to pay xxx
government share" subject to a partial audit of its accounts under Section 26 of the Presidential Decree No.
1445 or the State Audit Code of the Philippines (Audit Code).57
OUR RULING
We grant the petition in part. We declare that the MECO is a non-governmental entity. However, under
existing laws, the accounts of the MECO pertaining to the "verification fees" it collects on behalf of the
DOLE as well as the fees it was authorized to collect under Section 2(6) of EO No. 15, s. 2001, are subject
to the audit jurisdiction of the COA. Such fees pertain to the government and should be audited by the
COA.
I
We begin with the preliminary issues.
Mootness of Petition
The first preliminary issue relates to the alleged mootness of the instant mandamus petition, occasioned by
the COA’s issuance of Office Order No. 2011-698. The COA claims that by issuing Office Order No.
2011-698, it had already conceded its jurisdiction over the accounts of the MECO and so fulfilled the
objective of the instant petition.58 The COA thus urges that the instant petition be dismissed for being moot
and academic.59
We decline to dismiss the mandamus petition on the ground of mootness.
A case is deemed moot and academic when, by reason of the occurrence of a supervening event, it ceases
to present any justiciable controversy.60 Since they lack an actual controversy otherwise cognizable by
courts, moot cases are, as a rule, dismissible.61
The rule that requires dismissal of moot cases, however, is not absolute. It is subject to exceptions. In
David v. Macapagal-Arroyo,62 this Court comprehensively captured these exceptions scattered throughout
our jurisprudence:
The "moot and academic" principle is not a magical formula that can automatically dissuade the courts in
resolving a case. Courts will decide cases, otherwise moot and academic, if: first, there is a grave violation
of the Constitution;63second, the exceptional character of the situation and the paramount public interest is
involved;64 third, when constitutional issue raised requires formulation of controlling principles to guide
the bench, the bar, and the public;65and fourth, the case is capable of repetition yet evading review.66
In this case, We find that the issuance by the COA of Office Order No. 2011-698 indeed qualifies as a
supervening event that effectively renders moot and academic the main prayer of the instant mandamus
petition. A writ of mandamus to compel the COA to audit the accounts of the MECO would certainly be a
mere superfluity, when the former had already obliged itself to do the same.
Be that as it may, this Court refrains from dismissing outright the petition. We believe that the mandamus
petition was able to craft substantial issues presupposing the commission of a grave violation of the
Constitution and involving paramount public interest, which need to be resolved nonetheless:
First. The petition makes a serious allegation that the COA had been remiss in its constitutional or legal
duty to audit and examine the accounts of an otherwise auditable entity in the MECO.
Second. There is paramount public interest in the resolution of the issue concerning the failure of the COA
to audit the accounts of the MECO. The propriety or impropriety of such a refusal is determinative of
whether the COA was able to faithfully fulfill its constitutional role as the guardian of the public treasury,
in which any citizen has an interest.
Third. There is also paramount public interest in the resolution of the issue regarding the legal status of the
MECO; a novelty insofar as our jurisprudence is concerned. We find that the status of the MECO—
whether it may be considered as a government agency or not—has a direct bearing on the country’s
commitment to the One China policy of the PROC.67
An allegation as serious as a violation of a constitutional or legal duty, coupled with the pressing public
interest in the resolution of all related issues, prompts this Court to pursue a definitive ruling thereon, if not
for the proper guidance of the government or agency concerned, then for the formulation of controlling
principles for the education of the bench, bar and the public in general. 68 For this purpose, the Court
invokes its symbolic function.69
If the foregoing reasons are not enough to convince, We still add another:
Assuming that the allegations of neglect on the part of the COA were true, Office Order No. 2011-698
does not offer the strongest certainty that they would not be replicated in the future. In the first place,
Office Order No. 2011-698 did not state any legal justification as to why, after decades of not auditing the
accounts of the MECO, the COA suddenly decided to do so. Neither does it state any determination
regarding the true status of the MECO. The justifications provided by the COA, in fact, only appears in the
memorandum70 it submitted to this Court for purposes of this case.
Thus, the inclusion of the MECO in Office Order No. 2011-698 appears to be entirely dependent upon the
judgment of the incumbent chairperson of the COA; susceptible of being undone, with or without reason,
by her or even her successor. Hence, the case now before this Court is dangerously capable of being
repeated yet evading review.
Verily, this Court should not dismiss the mandamus petition on the ground of mootness.
Standing of Petitioner
the Constitution and law, which explicitly require, or "demand," that it perform the said duty. To the mind
of this Court, petitioner already established his cause of action against the COA when he alleged that the
COA had neglected its duty in violation of the Constitution and the law.
Principle of Hierarchy of Courts
The last preliminary issue is concerned with the petition’s non-observance of the principle of hierarchy of
courts. The COA assails the filing of the instant mandamus petition directly with this Court, when such
petition could have very well been presented, at the first instance, before the Court of Appeals or any
Regional Trial Court.74 The COA claims that the petitioner was not able to provide compelling reasons to
justify a direct resort to the Supreme Court.75

In view of the transcendental importance of the issues raised in the mandamus petition, as earlier
The second preliminary issue is concerned with the standing of the petitioner to file the instant mandamus
mentioned, this Court waives this last procedural issue in favor of a resolution on the merits. 76
petition. The COA claims that petitioner has none, for the latter was not able to concretely establish that he
had been aggrieved or prejudiced by its failure to audit the accounts of the MECO.71
II
Related to the issue of lack of standing is the MECO’s contention that petitioner has no cause of action to
file the instant mandamus petition. The MECO faults petitioner for not making any demand for it to submit To the merits of this petition, then.
to an audit by the COA or for the COA to perform such an audit, prior to filing the instant petition. 72
The single most crucial question asked by this case is whether the COA is, under prevailing law, mandated
We sustain petitioner’s standing, as a concerned citizen, to file the instant petition. to audit the accounts of the MECO. Conversely, are the accounts of the MECO subject to the audit
jurisdiction of the COA?
The rules regarding legal standing in bringing public suits, or locus standi, are already well-defined in our
case law. Again, We cite David, which summarizes jurisprudence on this point:73 Law, of course, identifies which accounts of what entities are subject to the audit jurisdiction of the COA.

By way of summary, the following rules may be culled from the cases decided by this Under Section 2(1) of Article IX-D of the Constitution,77 the COA was vested with the "power, authority
Court.1a\^/phi1 Taxpayers, voters, concerned citizens, and legislators may be accorded standing to sue, and duty" to "examine, audit and settle" the "accounts" of the following entities:
provided that the following requirements are met:
1. The government, or any of its subdivisions, agencies and instrumentalities;
(1) the cases involve constitutional issues;
2. GOCCs with original charters;
(2) for taxpayers, there must be a claim of illegal disbursement of public funds or that the tax
measure is unconstitutional;
3. GOCCs without original charters;

(3) for voters, there must be a showing of obvious interest in the validity of the election law in
4. Constitutional bodies, commissions and offices that have been granted fiscal autonomy under
question;
the Constitution; and

(4) for concerned citizens, there must be a showing that the issues raised are of transcendental
5. Non-governmental entities receiving subsidy or equity, directly or indirectly, from or through
importance which must be settled early; and
the government, which are required by law or the granting institution to submit to the COA for
audit as a condition of subsidy or equity.78
(5) for legislators, there must be a claim that the official action complained of infringes upon
their prerogatives as legislators.
The term "accounts" mentioned in the subject constitutional provision pertains to the "revenue," "receipts,"
"expenditures" and "uses of funds and property" of the foregoing entities. 79
We rule that the instant petition raises issues of transcendental importance, involved as they are with the
performance of a constitutional duty, allegedly neglected, by the COA. Hence, We hold that the petitioner,
Complementing the constitutional power of the COA to audit accounts of "non-governmental entities
as a concerned citizen, has the requisite legal standing to file the instant mandamus petition.
receiving subsidy or equity xxx from or through the government" is Section 29(1)80 of the Audit Code,
which grants the COA visitorial authority over the following non-governmental entities:
To be sure, petitioner does not need to make any prior demand on the MECO or the COA in order to
maintain the instant petition. The duty of the COA sought to be compelled by mandamus, emanates from
 1. Non-governmental entities "subsidized by the government"; 3. government corporate entities or government instrumentalities with corporate powers
(GCE/GICP),90 and
2. Non-governmental entities "required to pay levy or government share";
4. GOCCs
3. Non-governmental entities that have "received counterpart funds from the government"; and
The Administrative Code defines a GOCC:91
4. Non-governmental entities "partly funded by donations through the government."
(13) Government-owned or controlled corporation refers to any agency organized as a stock or non-stock
corporation, vested with functions relating to public needs whether governmental or proprietary in nature,
Section 29(1) of the Audit Code, however, limits the audit of the foregoing non-governmental entities only
and owned by the Government directly or through its instrumentalities either wholly, or, where applicable
to "funds xxx coming from or through the government."81 This section of the Audit Code is, in turn,
as in the case of stock corporations, to the extent of at least fifty-one (51) per cent of its capital stock: x x x.
substantially reproduced in Section 14(1), Book V of the Administrative Code.82

The above definition is, in turn, replicated in the more recent Republic Act No. 10149 or the GOCC
In addition to the foregoing, the Administrative Code also empowers the COA to examine and audit "the
Governance Act of 2011, to wit:92
books, records and accounts" of public utilities "in connection with the fixing of rates of every nature, or in
relation to the proceedings of the proper regulatory agencies, for purposes of determining franchise tax." 83
(o) Government-Owned or -Controlled Corporation (GOCC) refers to any agency organized as a stock or
non-stock corporation, vested with functions relating to public needs whether governmental or proprietary
Both petitioner and the COA claim that the accounts of the MECO are within the audit jurisdiction of the
in nature, and owned by the Government of the Republic of the Philippines directly or through its
COA, but vary on the extent of the audit and on what type of auditable entity the MECO is. The petitioner
instrumentalities either wholly or, where applicable as in the case of stock corporations, to the extent of at
posits that all accounts of the MECO are auditable as the latter is a bona fide GOCC or government
least a majority of its outstanding capital stock: x x x.
instrumentality.84 On the other hand, the COA argues that only the accounts of the MECO that pertain to
the "verification fees" it collects on behalf of the DOLE are auditable because the former is merely a non-
governmental entity "required to pay xxx government share" per the Audit Code. 85 GOCCs, therefore, are "stock or non-stock" corporations "vested with functions relating to public needs"
that are "owned by the Government directly or through its instrumentalities."93 By definition, three
attributes thus make an entity a GOCC: first, its organization as stock or non-stock corporation;94 second,
We examine both contentions.
the public character of its function; and third, government ownership over the same.

The MECO Is Not a GOCC or

Possession of all three attributes is necessary to deem an entity a GOCC.
Government Instrumentality

In this case, there is not much dispute that the MECO possesses the first and second attributes. It is the
We start with the petitioner’s contention.
third attribute, which the MECO lacks.

Petitioner claims that the accounts of the MECO ought to be audited by the COA because the former is a
GOCC or government instrumentality. Petitioner points out that the MECO is a non-stock corporation
"vested with governmental functions relating to public needs"; it is "controlled by the government thru a
board of directors appointed by the President of the Philippines"; and it operates "outside of the
departmental framework," subject only to the "operational and policy supervision of the DTI." 86 The
MECO thus possesses, petitioner argues, the essential characteristics of a bona fide GOCC and government
instrumentality.87
We take exception to petitioner’s characterization of the MECO as a GOCC or government
instrumentality. The MECO is not a GOCC or government instrumentality.
The MECO Is Organized as a Non-Stock Corporation
The organization of the MECO as a non-stock corporation cannot at all be denied. Records disclose that
the MECO was incorporated as a non-stock corporation under the Corporation Code on 16 December
1977.95 The incorporators of the MECO were Simeon R. Roxas, Florencio C. Guzon, Manuel K. Dayrit,
Pio K. Luz and Eduardo B. Ledesma, who also served as the corporation’s original members and
directors.96
The purposes for which the MECO was organized also establishes its non-profit character, to wit:97

Government instrumentalities are agencies of the national government that, by reason of some "special
function or jurisdiction" they perform or exercise, are allotted "operational autonomy" and are "not
integrated within the department framework."88 Subsumed under the rubric "government instrumentality"
are the following entities:89
1. regulatory agencies,
2. chartered institutions,
1. To establish and develop the commercial and industrial interests of Filipino nationals here
and abroad and assist on all measures designed to promote and maintain the trade relations of
the country with the citizens of other foreign countries;
2. To receive and accept grants and subsidies that are reasonably necessary in carrying out the
corporate purposes provided they are not subject to conditions defeatist for or incompatible with
said purpose;
 3. To acquire by purchase, lease or by any gratuitous title real and personal properties as may be
necessary for the use and need of the corporation, and in like manner when they are
4. To do and perform any and all acts which are deemed reasonably necessary to carry out the
purposes. (Emphasis supplied)
The purposes for which the MECO was organized are somewhat analogous to those of a trade, business or
industry chamber,98 but only on a much larger scale i.e., instead of furthering the interests of a particular
line of business or industry within a local sphere, the MECO seeks to promote the general interests of the
Filipino people in a foreign land.
Finally, it is not disputed that none of the income derived by the MECO is distributable as dividends to any
of its members, directors or officers.
Verily, the MECO is organized as a non-stock corporation.
The MECO Performs Functions with a Public Aspect.
The public character of the functions vested in the MECO cannot be doubted either. Indeed, to a certain
degree, the functions of the MECO can even be said to partake of the nature of governmental functions. As
earlier intimated, it is the MECO that, on behalf of the people of the Philippines, currently facilitates
unofficial relations with the people in Taiwan.
Consistent with its corporate purposes, the MECO was "authorized" by the Philippine government to
perform certain "consular and other functions" relating to the promotion, protection and facilitation of
Philippine interests in Taiwan.99The full extent of such authorized functions are presently detailed in
Sections 1 and 2 of EO No. 15, s. 2001:
SECTION 1. Consistent with its corporate purposes and subject to the conditions stated in Section 3
hereof, MECO is hereby authorized to assist in the performance of the following functions:
1. Formulation and implementation of a program to attract and promote investments from
Taiwan to Philippine industries and businesses, especially in manufacturing, tourism,
construction and other preferred areas of investments;
2. Promotion of the export of Philippine products and Filipino manpower services, including
Philippine management services, to Taiwan;
3. Negotiation and/or assistance in the negotiation and conclusion of agreements or other
arrangements concerning trade, investment, economic cooperation, technology transfer,
banking and finance, scientific, cultural, educational and other modes of cooperative endeavors
between the Philippines and Taiwan, on a people-to-people basis, in accordance with
established rules and regulations;
4. Reporting on, and identification of, employment and business opportunities in Taiwan for the
promotion of Philippine exports, manpower and management services, and tourism;
5. Dissemination in Taiwan of information on the Philippines, especially in the fields of trade,
tourism, labor, economic cooperation, and cultural, educational and scientific endeavors;
6. Conduct of periodic assessment of market conditions in Taiwan, including submission of
trade statistics and commercial reports for use of Philippine industries and businesses; and
7. Facilitation, fostering and cultivation of cultural, sports, social, and educational exchanges
between the peoples of the Philippines and Taiwan.
SECTION 2. In addition to the above-mentioned authority and subject to the conditions stated in Section 3
hereof, MECO, through its branch offices in Taiwan, is hereby authorized to perform the following
functions:
1. Issuance of temporary visitors’ visas and transit and crew list visas, and such other visa
services as may be authorized by the Department of Foreign Affairs;
2. Issuance, renewal, extension or amendment of passports of Filipino citizens in accordance
with existing regulations, and provision of such other passport services as may be required
under the circumstances;
3. Certification or affirmation of the authenticity of documents submitted for authentication;
4. Providing translation services;
5. Assistance and protection to Filipino nationals and other legal/juridical persons working or
residing in Taiwan, including making representations to the extent allowed by local and
international law on their behalf before civil and juridical authorities of Taiwan; and
6. Collection of reasonable fees on the first four (4) functions enumerated above to defray the
cost of its operations.
A perusal of the above functions of the MECO reveals its uncanny similarity to some of the functions
typically performed by the DFA itself, through the latter’s diplomatic and consular missions. 100 The
functions of the MECO, in other words, are of the kind that would otherwise be performed by the
Philippines’ own diplomatic and consular organs, if not only for the government’s acquiescence that they
instead be exercised by the MECO.
Evidently, the functions vested in the MECO are impressed with a public aspect.
The MECO Is Not Owned or Controlled by the Government Organization as a non-stock corporation and
the mere performance of functions with a public aspect, however, are not by themselves sufficient to
consider the MECO as a GOCC. In order to qualify as a GOCC, a corporation must also, if not more
importantly, be owned by the government.
The government owns a stock or non-stock corporation if it has controlling interest in the corporation. In a
stock corporation, the controlling interest of the government is assured by its ownership of at least fifty-one
percent (51%) of the corporate capital stock.101 In a non-stock corporation, like the MECO, jurisprudence
teaches that the controlling interest of the government is affirmed when "at least majority of the members
are government officials holding such membership by appointment or designation"102 or there is otherwise
"substantial participation of the government in the selection" of the corporation’s governing board. 103
In this case, the petitioner argues that the government has controlling interest in the MECO because it is
the President of the Philippines that indirectly appoints the directors of the corporation. 104 The petitioner
claims that the President appoints directors of the MECO thru "desire letters" addressed to the
corporation’s board.105 As evidence, the petitioner cites the assumption of one Mr. Antonio Basilio as
chairman of the board of directors of the MECO in 2001, which was allegedly accomplished when former
President Macapagal-Arroyo, through a memorandum dated 20 February 2001, expressed her "desire" to
the board of directors of the MECO for the election of Mr. Basilio as chairman. 106
The MECO, however, counters that the "desire letters" that the President transmits are merely
recommendatory and not binding on it.107 The MECO maintains that, as a corporation organized under the
Corporation Code, matters relating to the election of its directors and officers, as well as its membership,
are ultimately governed by the appropriate provisions of the said code, its articles of incorporation and its
by-laws.108
As between the contrasting arguments, We find the contention of the MECO to be the one more consistent
with the law.
The fact of the incorporation of the MECO under the Corporation Code is key. The MECO was correct in
postulating that, as a corporation organized under the Corporation Code, it is governed by the appropriate
provisions of the said code, its articles of incorporation and its by-laws. In this case, it is the by-laws109 of
the MECO that stipulates that its directors are elected by its members; its officers are elected by its
directors; and its members, other than the original incorporators, are admitted by way of a unanimous
board resolution, to wit:
SECTION II. MEMBERSHIP
Article 2. Members shall be classified as (a) Regular and (b) Honorary.
(a) Regular members – shall consist of the original incorporators and such other members who,
upon application for membership, are unanimously admitted by the Board of Directors.
(b) Honorary member – A person of distinction in business who as sympathizer of the
objectives of the corporation, is invited by the Board to be an honorary member.
SECTION III. BOARD OF DIRECTORS
Article 3. At the first meeting of the regular members, they shall organize and constitute themselves as a
Board composed of five (5) members, including its Chairman, each of whom as to serve until such time as
his own successor shall have been elected by the regular members in an election called for the purpose.
The number of members of the Board shall be increased to seven (7) when circumstances so warrant and
by means of a majority vote of the Board members and appropriate application to and approval by the
Securities and Exchange Commission. Unless otherwise provided herein or by law, a majority vote of all
Board members present shall be necessary to carry out all Board resolutions.
During the same meeting, the Board shall also elect its own officers, including the designation of the
principal officer who shall be the Chairman. In line with this, the Chairman shall also carry the title Chief
Executive Officer. The officer who shall head the branch or office for the agency that may be established
abroad shall have the title of Director and Resident Representative. He will also be the Vice-Chairman. All
other members of the Board shall have the title of Director.
xxxx
SECTION IV. EXECUTIVE COMMITTEE
Article 5. There shall be established an Executive Committee composed of at least three (3) members of
the Board. The members of the Executive Committee shall be elected by the members of the Board among
themselves.
xxxx
SECTION VI. OFFICERS: DUTIES, COMPENSATION
Article 8. The officers of the corporation shall consist of a Chairman of the Board, Vice-Chairman, Chief
Finance Officer, and a Secretary. Except for the Secretary, who is appointed by the Chairman of the Board,
other officers and employees of the corporation shall be appointed by the Board.
The Deputy Representative and other officials and employees of a branch office or agency abroad are
appointed solely by the Vice Chairman and Resident Representative concerned. All such appointments
however are subject to ratification by the Board.
It is significant to note that none of the original incorporators of the MECO were shown to be government
officials at the time of the corporation’s organization. Indeed, none of the members, officers or board of
directors of the MECO, from its incorporation up to the present day, were established as government
appointees or public officers designated by reason of their office. There is, in fact, no law or executive
order that authorizes such an appointment or designation. Hence, from a strictly legal perspective, it
appears that the presidential "desire letters" pointed out by petitioner—if such letters even exist outside of
the case of Mr. Basilio—are, no matter how strong its persuasive effect may be, merely recommendatory.
The MECO Is Not a Government Instrumentality; It Is a Sui Generis Entity.
The categorical exclusion of the MECO from a GOCC makes it easier to exclude the same from any other
class of government instrumentality. The other government instrumentalities i.e., the regulatory agencies,
chartered institutions and GCE/GICP are all, by explicit or implicit definition, creatures of the law. 110 The
MECO cannot be any other instrumentality because it was, as mentioned earlier, merely incorporated
under the Corporation Code.
Hence, unless its legality is questioned, and in this case it was not, the fact that the MECO is operating
under the policy supervision of the DTI is no longer a relevant issue to be reckoned with for purposes of
this case.
For whatever it is worth, however, and without justifying anything, it is easy enough for this Court to
understand the rationale, or necessity even, of the executive branch placing the MECO under the policy
supervision of one of its agencies.
It is evident, from the peculiar circumstances surrounding its incorporation, that the MECO was not
intended to operate as any other ordinary corporation. And it is not. Despite its private origins, and perhaps
deliberately so, the MECO was "entrusted"111 by the government with the "delicate and
precarious"112 responsibility of pursuing "unofficial"113 relations with the people of a foreign land whose
government the Philippines is bound not to recognize. The intricacy involved in such undertaking is the
possibility that, at any given time in fulfilling the purposes for which it was incorporated, the MECO may
find itself engaged in dealings or activities that can directly contradict the Philippines’ commitment to the
One China policy of the PROC. Such a scenario can only truly be avoided if the executive department
exercises some form of oversight, no matter how limited, over the operations of this otherwise private
entity.
Indeed, from hindsight, it is clear that the MECO is uniquely situated as compared with other private
corporations. From its over-reaching corporate objectives, its special duty and authority to exercise certain
consular functions, up to the oversight by the executive department over its operations—all the while
maintaining its legal status as a non-governmental entity—the MECO is, for all intents and purposes, sui
generis.
Certain Accounts of the MECO May
Be Audited By the COA.
We now come to the COA’s contention.
2. In foreign posts where there is no labor attaché or duly authorized overseas labor officer, the
finance officer or collecting officer of the DFA duly deputized by the DOLE Secretary as
approved by the DFA Secretary;
3. In the absence of such finance officer or collecting officer, the alternate duly designated by
the head of the foreign post.
Since the Philippines does not maintain an official post in Taiwan, however, the DOLE entered into a
"series" of Memorandum of Agreements with the MECO, which made the latter the former’s collecting
agent with respect to the "verification fees" that may be due from Taiwanese employers of OFWs. 122 Under
the 27 February 2004 Memorandum of Agreement between DOLE and the MECO, the "verification fees"
to be collected by the latter are to be allocated as follows: (a) US$ 10 to be retained by the MECO as
administrative fee, (b) US $10 to be remitted to the DOLE, and (c) US$ 10 to be constituted as a common
fund of the MECO and DOLE.123

The COA argues that, despite being a non-governmental entity, the MECO may still be audited with
Evidently, the entire "verification fees" being collected by the MECO are receivables of the DOLE.124 Such
respect to the "verification fees" for overseas employment documents that the latter collects from
receipts pertain to the DOLE by virtue of Section 7 of EO No. 1022.
Taiwanese employers on behalf of the DOLE.114 The COA claims that, under Joint Circular No. 3-99, the
MECO is mandated to remit to the national government a portion of such "verification fees."115 The COA,
therefore, classifies the MECO as a non-governmental entity "required to pay xxx government share" per Consular Fees Collected by the MECO
the Audit Code.116
Aside from the DOLE "verification fees," however, the MECO also collects "consular fees," or fees it
We agree that the accounts of the MECO pertaining to its collection of "verification fees" is subject to the collects from the exercise of its delegated consular functions.
audit jurisdiction of the COA. However, We digress from the view that such accounts are the only ones
that ought to be audited by the COA. Upon careful evaluation of the information made available by the
The authority behind "consular fees" is Section 2(6) of EO No. 15, s. 2001. The said section authorizes the
records vis-à-vis the spirit and the letter of the laws and executive issuances applicable, We find that the
MECO to collect "reasonable fees" for its performance of the following consular functions:
accounts of the MECO pertaining to the fees it was authorized to collect under Section 2(6) of EO No. 15,
s. 2001, are likewise subject to the audit jurisdiction of the COA.
1. Issuance of temporary visitors’ visas and transit and crew list visas, and such other visa
services as may be authorized by the DFA;
Verification Fees Collected by the MECO

2. Issuance, renewal, extension or amendment of passports of Filipino citizens in accordance

In its comment,117 the MECO admitted that roughly 9% of its income is derived from its share in the
with existing regulations, and provision of such other passport services as may be required
"verification fees" for overseas employment documents it collects on behalf of the DOLE.
under the circumstances;

The "verification fees" mentioned here refers to the "service fee for the verification of overseas
3. Certification or affirmation of the authenticity of documents submitted for authentication;
employment contracts, recruitment agreement or special powers of attorney" that the DOLE was
and
authorized to collect under Section 7 of EO No. 1022,118 which was issued by President Ferdinand E.
Marcos on 1 May 1985. These fees are supposed to be collected by the DOLE from the foreign employers
of OFWs and are intended to be used for "the promotion of overseas employment and for welfare services 4. Providing translation services.
to Filipino workers within the area of jurisdiction of [concerned] foreign missions under the administration
of the [DOLE]."119
Evidently, and just like the peculiarity that attends the DOLE "verification fees," there is no consular office
for the collection of the "consular fees." Thus, the authority for the MECO to collect the "reasonable fees,"
Joint Circular 3-99 was issued by the DOLE, DFA, the Department of Budget Management, the vested unto it by the executive order.
Department of Finance and the COA in an effort to implement Section 7 of Executive Order No.
1022.120 Thus, under Joint Circular 3-99, the following officials have been tasked to be the "Verification
Fee Collecting Officer" on behalf of the DOLE:121 The "consular fees," although held and expended by the MECO by virtue of EO No. 15, s. 2001, are,
without question, derived from the exercise by the MECO of consular functions—functions it performs by
and only through special authority from the government. There was never any doubt that the visas,
1. The labor attaché or duly authorized overseas labor officer at a given foreign post, as duly passports and other documents that the MECO issues pursuant to its authorized functions still emanate
designated by the DOLE Secretary; from the Philippine government itself.

Such fees, therefore, are received by the MECO to be used strictly for the purpose set out under EO No.
15, s. 2001. They must be reasonable as the authorization requires. It is the government that has ultimate
control over the disposition of the "consular fees," which control the government did exercise when it
provided in Section 2(6) of EO No. 15, s. 2001 that such funds may be kept by the MECO "to defray the
cost of its operations."

The Accounts of the MECO Pertaining to the Verification Fees and Consular Fees May Be Audited by the
COA.

Section 14(1), Book V of the Administrative Code authorizes the COA to audit accounts of non-
governmental entities "required to pay xxx or have government share" but only with respect to "funds xxx
coming from or through the government." This provision of law perfectly fits the MECO:

First. The MECO receives the "verification fees" by reason of being the collection agent of the DOLE—a
government agency. Out of its collections, the MECO is required, by agreement, to remit a portion thereof
to the DOLE. Hence, the MECO is accountable to the government for its collections of such "verification
fees" and, for that purpose, may be audited by the COA.

Second. Like the "verification fees," the "consular fees" are also received by the MECO through the
government, having been derived from the exercise of consular functions entrusted to the MECO by the
government. Hence, the MECO remains accountable to the government for its collections of "consular
fees" and, for that purpose, may be audited by the COA.

Tersely put, the 27 February 2008 Memorandum of Agreement between the DOLE and the MECO and
Section 2(6) of EO No. 15, s. 2001, vis-à-vis, respectively, the "verification fees" and the "consular fees,"
grant and at the same time limit the authority of the MECO to collect such fees. That grant and limit
require the audit by the COA of the collections thereby generated.

Conclusion

The MECO is not a GOCC or government instrumentality. It is a sui generis private entity especially
entrusted by the government with the facilitation of unofficial relations with the people in Taiwan without
jeopardizing the country’s faithful commitment to the One China policy of the PROC. However, despite its
non-governmental character, the MECO handles government funds in the form of the "verification fees" it
collects on behalf of the DOLE and the "consular fees" it collects under Section 2(6) of EO No. 15, s.
2001. Hence, under existing laws, the accounts of the MECO pertaining to its collection of such
"verification fees" and "consular fees" should be audited by the COA.

WHEREFORE, premises considered, the petition is PARTIALLY GRANTED. The Manila Economic and
Cultural Office is hereby declared a non-governmental entity. However, the accounts of the Manila
Economic and Cultural Office pertaining to: the verification fees contemplated by Section 7 of Executive
Order No. 1022 issued 1 May 1985, that the former collects on behalf of the Department of Labor and
Employment, and the fees it was authorized to collect under Section 2(6) of Executive Order No. 15 issued
16 May 2001, are subject to the audit jurisdiction of the COA.

No costs.

SO ORDERED.

G.R. No. 211362 February 24, 2015
FIRST CLASS CADET ALDRIN JEFF P. CUDIA of the Philippine Military Academy, represented
by his father RENATO P. CUDIA, who also acts on his own behalf, and BERTENI CATALUNA
CAUSING, Petitioners,
vs.
THE SUPERINTENDENT OF THE PHILIPPINE MILITARY ACADEMY (PMA), THE HONOR
COMMITTEE (HC) OF 2014 OF THE PMA and HC MEMBERS, and the CADET REVIEW AND
APPEALS BOARD (CRAB),Respondents.
x-----------------------x
FILIPINA P. CUDIA, in behalf of CADET FIRST CLASS ALDRIN JEFF P. CUDIA, and on her
own behalf,Petitioner-Intervenor.
DECISION
PERALTA, J.:
The true test of a cadet's character as a leader rests on his personal commitment to uphold what is morally
and ethically righteous at the most critical and trying times, and at the most challenging circumstances.
When a cadet must face a dilemma between what is true and right as against his security, well-being,
pleasures and comfort, or dignity, what is at stake is his honor and those that [define] his values. A man of
an honorable character does not think twice and chooses the fore. This is the essence of and. the Spirit of
the Honor Code - it is championing truth and righteousness even if it may mean the surrender of one's basic
rights and privileges.1
The Procedural Antecedents
Six days prior to the March 16, 2014 graduation ceremonies of the Philippine Military Academy (PMA),
petitioners Renato P. Cudia, acting for himself and in behalf of his son, Cadet First Class Aldrin Jeff P.
Cudia (Cadet JCL Cudia), and Berteni Catalufta Causing filed this petition for certiorari, prohibition, and
mandamus with application for extremely urgent temporary restraining order (TRO). 2
In a Resolution dated March 1 7, 2014, the Court denied the prayer for TRO and instead, required
respondents to file their comment on the petition.3
On March 25, 2014, Filipina P. Cudia, acting for herself and in behalf of her son Cadet 1 CL Cudia, filed a
motion for leave to intervene, attaching thereto the petition-in-intervention.4 Per Resolution dated March
31, 2014, the Court granted the motion and resolved to await respondents' comment on the petition. 5
A manifestation was then filed by petitioners on April 3, 2014, recommending the admission of the
petition-in-intervention and adopting it as an integral part of their petition. 6 On May 20, 2014, petitioner-
intervenor filed a manifestation with motion for leave to admit the Final Investigation Report of the
Commission on Human Rights (CHR) dated April 25, 2014.7 The Report8 was relative to CHR-CAR Case
No. 2014-0029 filed by the spouses Renato and Filipina Cudia (Spouses Cudia), for themselves and in
behalf of their son, against the PMA Honor Committee (HC) members and Major Vladimir P. Gracilla
(Maj. Gracilla)9 for violation of Cadet lCL Cudia's rights to due process, education, and privacy of
communication. Subsequently, on June 3, 2014, petitioners filed a motion for leave to adopt the submission
of the CHR Report.10 The manifestation was granted and the motion was noted by the Court in its
Resolution dated July 7, 2014.
After filing three motions for extension of time,11 respondents filed their Consolidated Comment12 on June
19, 2014. In a motion, petitioner-intervenor filed a Reply, which was later adopted by
petitioners.13 Submitted as Annex "A" of the Reply was a copy of the CHR Resolution dated May 22, 2014
regarding CHR-CAR Case No. 2014-0029.14 We noted and granted the same on August 11, 2014 and
October 13, 2014.
Petitioner-intervenor twice filed a manifestation with motion to submit the case for early
resolution,15 which the Court noted in a Resolution dated August 11, 2014 and October 3, 2014. 16
The Facts
Cadet 1 CL Cudia was a member of Siklab Diwa Class of 2014 of the PMA, the country's premiere
military academy located at Fort Gregorio del Pilar in Baguio City. He belonged to the "A" Company and
was the Deputy Baron of his class. As claimed by petitioners and petitioner-intervenor (hereinafter
collectively called "petitioners," unless otherwise indicated), he was supposed to graduate with honors as
the class salutatorian, receive the Philippine Navy Saber as the top Navy cadet graduate, and be
commissioned as an ensign of the Philippine Navy.
On November 14, 2013, the combined classes of the Navy and Air Force 1 CL cadets had a lesson
examination (LE) on Operations Research (OR432) under Dr. Maria Monica C. Costales (Dr. Costales) at
the PMAFI Room. Per published schedule from the Headquarters Academic Group, the 4th period class in
OR432 was from 1 :30-3:00 p.m. (1330H-1500H), while the 5th period class in ENG412 was from 3:05-
4:05 p.m. (1505H-1605H).
Five days after, Professor Juanita Berong (Prof. Berong) of the 5th period class issued a Delinquency
Report (DR) against Cadet 1 CL Cudia because he was "[/]ate for two (2) minutes in his Eng 412 class x x
x. "17 Cadets 1 CL Narciso, Arcangel, Miranda, Pontillas, Diaz, Otila, and Dela Cruz were also reported
late for five minutes.18
On December 4, 2013, the DRs reached the Department of Tactical Officers. They were logged and
transmitted to the Company Tactical Officers ( CTO) for explanation of the concerned cadets. Two days
later, Cadet lCL Cudia received his DR.
In his Explanation of Report dated December 8, 2013, Cadet lCL Cudia reasoned out that: "I came directly
from OR432 Class. We were dismissed a bit late by our instructor Sir."19
On December 19, 2013, Major Rommel Dennis Hindang (Maj. Hindang), the CTO of Cadet 1 CL Cudia,
meted out to him the penalty of 11 demerits and 13 touring hours. Immediately, Cadet lCL Cudia clarified
with Maj. Hindang his alleged violation. The latter told him that the basis of the punishment was the result
of his conversation with Dr. Costales, who responded that she never dismissed her class late, and the
protocol to dismiss the class 10-15 minutes earlier than scheduled. When he expressed his intention to
appeal and seek reconsideration of the punishment, he was · advised to put the request in writing. Hence,
that same day, Cadet 1 CL Cudia addressed his Request for Reconsideration of Meted Punishment to Maj.
Benjamin L. Leander, Senior Tactical Officer (STO), asserting:
I strongly believe that I am not in control of the circumstances, our 4th period class ended 1500H and our
5th period class, which is ENG412, started 1500H also. Immediately after 4t period class, I went to my
next class without any intention of being late Sir.20
A day after, Maj. Leander instructed Maj. Hindang to give his comments on the request of Cadet 1 CL
Cudia and to indicate if there were other cadets belonging to the same section who were also late.
On December 28, 2013, Maj. Hindang submitted his reply to Maj. Leander pointing out that, based on his
investigation, the 4th period class was not dismissed late. As a result, Maj. Leander sustained the penalty
imposed. Petitioners alleged that Cadet 1 CL Cudia came to know of the denial of his request only on
January 24, 2014 upon inquiry with Maj. Leander.
Several days passed, and on January 7, 2014, Cadet lCL Cudia was informed that Maj. Hindang reported
him to the HC21 for violation of the Honor Code. The Honor Report stated:
Lying that is giving statement that perverts the truth in his written appeal, stating that his 4th period class
ended at l 500H that made him late in the succeeding class.22
Upon asking the HC Chairman, Cadet 1 CL Mike Anthony P. Mogol (Cadet 1 CL Mogol), as to what Maj.
Hindang meant in his Report, Cadet lCL Cudia learned that it was based on Maj. Hindang's conversations
with their instructors and classmates as well as his statement in the request for reconsideration to Maj.
Leander. He then verbally applied for and was granted an extension of time to answer the charge against
him because Dr. Costales, who could shed light on the matter, was on emergency leave.
On January 13, 2014, Dr. Costales sent text messages to Cadet lCL Cudia, conveying:
Gud pm cdt cudia. Mam belandres gave me bkground na. She told me its a report dated november. When
maj hindang ask me, no time referens. (04:25:11 P.M.)
All the while I thot he was refering to dismisal during last day last december. Whc i told, i wud presume
they wil finish early bee its grp work. (04:29:21 P.M.)23
The next day, Cadets lCL Cudia and Arcangel approached Dr. Costales, who reaffirmed that she and Maj.
Hindang were not in the same time reference when the latter asked her.
Later, Cadet 1 CL Cudia submitted his letter of explanation on the Honor Report. He averred:
Sir, We had an LE that day (14 November 2013) in OR432 class. When the first bell rang (1455), I stood
up, reviewed my paper and submitted it to my instructor, Ms. Costales. After which, I and Cadet lcl
Arcangel asked for some query with regards (sic) to the deductions of our previous LE. Our instructor
gladly answered our question. She then told me that she will give the copy of our section grade, so I waited
at the hallway outside the ACAD5 office, and then she came out of the room and gave me a copy of the
grades. Cadet Arcangel, Cadet Narciso and I immediately went to our 5ti period class which is ENG412.
With these statements, I would like to clarify the following:
1. How could this be lying?
2. What is wrong with the side of Maj. Hindang (why did he come up to that honor report)?
3. What are his assumptions?
I appeal, in the name of clarity, fairness and truth[,] that my case be reopened and carefully reviewed for I
did not violate the honor code/system, I can answer NO to both questions (Did I intend to deceive? Did I
intend to take undue advantage?) and for the following reasons:
1. The honor report of Maj. Hindang was already settled and finalized given the fact that no
face-to-face personal conversation with Ms. Costales was conducted to clarify what and when
exactly was the issue at hand.
2. Statements of the respondents support my explanation.
3. My explanation to my appeal to my DR (Request for reconsideration of meted punishment)
further supports my explanation in my delinquency report.
4. My understanding of the duration of the "CLASS" covers not just a lecture in a typical
classroom instruction but includes every transaction and communication a teacher does with her
students, especially that in our case some cadets asked for queries, and I am given instruction
by which (sic) were directly related to our CLASS. Her transaction and communication with
our other classmates may have already ended but ours extended for a little bit.
I agree and consider that because Cadet CUDIA is under my instruction to wait, and the other
cadets still have business with me, it is reasonable enough for him to say that "Our class was
dismissed a bit late" (dealing with matter of seconds or a minute particularly 45 seconds to 1
minute and 30 seconds)
And with concern to (sic) OR432 class, I can say it ended on time (1500H).
(signed)
M COSTALES
w/ attached certification
5. I was transparent and honest in explaining the 2-minute delay and did not attempt to conceal
anything that happened or I did.
6. Furthermore, CPT DULA WAN PA, the Tactical Officer of Hawk Company[,] and I had a
conversation with regards (sic) to the same matter for which he can give important points of my
case.
7. Cadet lcl DIAZ "D" Co can also stand as a witness that I waited for Ms. Costales. 24
On January 15, 2014, the HC constituted a team to conduct a preliminary investigation on the reported
honor violation of Cadet 1 CL Cudia. The Foxtrot Company was designated as the investigating team and
was composed of Cadet 1 CL Hasigan as Presiding Officer, and Cadets 1 CL Mogol, lCL Raguindin, 2CL
Gumilab, 2CL Saldua, 3CL Espejo, and 3CL Poncardas as members. 25 Soon after, the team submitted its
Preliminary Investigation Report recommending that the case be formalized.
The formal investigation against Cadet 1 CL Cu di a then ensued. The Presiding Officer was Cadet 1 CL
Rhona K. Salvacion, while the nine (9) voting members were Cadets lCL Jairus 0. Fantin, lCL Bryan
Sonny S. Arlegui, 1 CL Kim Adrian R. Martal, 1 CL J eanelyn P. Cabrido, 1 CL ShuAydan G. Ayada, 1
CL Dalton John G. Lagura, 2CL Renato A. Carifio, Jr., 2CL Arwi C. Martinez, and 2CL Niko Angelo C.
Tarayao.26 Acting as recorders tasked to document the entire proceedings were 4CL Jennifer A. Cuarteron
and 3CL Leoncio Nico A. de Jesus 11.27 Those who observed the trial were Cadets 1 CL Balmeo, Dag-
uman, Hasigan, Raguindin, Paulino, Arcangel, and Narciso; Cadets 2CL Jocson and Saldua, Jr.; and Cadet
3CL Umaguing.28
The first formal hearing started late evening of January 20, 2014 and lasted until early morning the next
day. Cadet lCL Cudia was informed of the charge against him, as to which he pleaded "Not Guilty."
Among those who testified were Cadet 1 CL Cudia, Maj. Hindang, and Cadets 1 CL Arcangel and Narciso.
On the second night of the hearing held on January 21, 2014, Cadet 1 CL Cudia again appeared and was
called to the witness stand along with Cadets Brit and Barrawed. Dr. Costales also testified under oath via
phone on a loudspeaker. Deliberation among the HC voting members followed. After that, the ballot sheets
were distributed. The members cast their votes through secret balloting and submitted their accomplished
ballot sheets together with their written justification. The result was 8-1 in favor of a guilty verdict. Cadet
lCL Dalton John G. Lagura (Cadet lCL Lagura) was the lone dissenter. Allegedly, upon the order ofHC
Chairman Cadet 1 CL Mogol, the Presiding Officer and voting members went inside a chamber adjoining
the court room for further deliberation. After several minutes, they went out and the Presiding Officer
announced the 9-0 guilty verdict. Cadet 1 CL Cudia, who already served nine (9) touring hours, was then
informed of the unanimous votes finding him guilty of violating the Honor Code. He was immediately
placed in the PMA Holding Center until the resolution of his appeal.
On January 24, 2014, Cadet ICL Cudia filed a written appeal addressed to the HC Chairman, the full text
of which stated:
WRITTEN APPEAL
14 NOVEMBER 2013
This is when I was reported for "Late for two (2) minutes in Eng412 class", my explanation on this
delinquency report when I received it, is that "Our class was dismissed a (little) bit late and I came directly
from 4th period class ... etc". Knowing the fact that in my delinquency report, it is stated that ENG412
classes started 1500H and I am late for two minutes, it is logical enough for I (sic) to interpret it as "I came
1502H during that class". This is the explanation that came into my mind that time. (I just cannot recall the
exact words I used in explaining that delinquency report, but what I want to say is that I have no intention
to be late). In my statements, I convey my message as "since I was not the only one left in that class, and
the instructor is with us, I used the term "CLASS", I used the word "DISMISSED" because I was under
instruction (to wait for her to give the section grade) by the instructor, Ms. Costales. The other cadets (lCL
MIRANDA, lCL ARCANGEL) still have queries and business with her that made me decide to use the
word "CLASS", while the others who don't have queries and business with her (ex: lCL NARCISO and 1
CL DIAZ) were also around.
Note:
The four named cadets were also reported late.
Reference: Para 171. 0. (Leaving the Classroom Prior to Dismissal Time)(Sec XVII, CCAFPR s2008)
It is stated in this reference that "Cadets shall not linger in the place of instruction after the section has been
dismissed. EXCEPT when told or allowed to do so by the instructor or by any competent authority for
official purposes. "
The instruction by Ms. Costales was given to me before the two bells rang (indicating the end of class
hour, 1500H). I waited for her for about 45 seconds to 1 minute and 30 seconds, that made me to decide to
write "a little bit late" in my explanation. Truly, the class ENDED 1500H but due to official purpose
(instruction by Ms. Costales to wait) and the conflict in academic schedule (to which I am not in control of
the circumstances, 4th PD class 1330H-1500H and 5th PD class 1500H-1 600H), and since Ms. Costales,
my other classmates, and I were there, I used the word "CLASS".
19 December 2013
I was informed that my delinquency report was awarded, 11 Demerits and 13 Touring hours. Not because I
don't want to serve punishment, but because I know I did nothing wrong, I obeyed instruction, and
believing that my reason is justifiable and valid, that is why I approached our tactical officer, MAJ
HINDANG PAF, to clarify and ask why it was awarded that day.
In our conversation, he said that he had a phone call to my instructor and he even added that they have a
protocol to dismiss the class, 15 minutes or 10 minutes before 1500H. I explained:
Sir, I strongly believe that I am not in control of the circumstances, our 4th period class ended 1500H and
our 5th period class, which is ENG412, started 1500H also. Immediately after 4th period class, I went to
my next class without any intention of being late Sir.
These statements are supplementary to my explanation in my delinquency report, in here, I specified the
conflict in the schedule and again, I have no intention to be late. After explaining it further with these
statements, my tactical officer said that since I was reported in a written form, I should make an appeal in a
written form. Thinking that he already understood what I want to say, I immediately made an appeal that
day stating the words that I used in having conversation with him.29
Attached to the written appeal was a Certification dated January 24, 2014, wherein Dr. Costales attested:
1. That Cadet MIRANDA, ARCANGEL, [and] NARCISO was (sic) with Cadet CUDIA in
making query about their latest grades in OR432 and/or results of UEl outside the ACADS
office. The following facts may explain their queries on 14 November 2013:
a. That I held my class in the PMAFI room instead of room 104.
b. That OR432 releases grades every Wednesday and cadets are informed during
Thursday, either in class or posted grades in the bulletin board (grades released was
[sic J based on the previous LEs: latest LE before UE was Decision Trees).
c. That UE papers were already checked but not yet recorded due to (sic) other
cadets have not taken the UE. Cadets were allowed to verify scores but not to look at
the papers.
d. Last 23 January 2014, Captain Dulawan clarified if indeed Cadet NARCISO and
ARCANGEL verified grades. The two cadets said that they verified something with
me after the OR432 class and they were with Cadet CUD IA. That the statements of
the three (3) cadets are all the same and consistent, thus[,] I honor that as true.
2. As to the aspect of dismissing late, I could not really account for the specific time that I
dismissed the class. To this date, I [cannot] really recall an account that is more than two (2)
months earlier. According to my records, there was a lecture followed by an LE during (sic) on
 14 November 2013. To determine the time of my dismissal, maybe it can be verified with the
other members of class I was handling on that said date.30
Respondents contend that the HC denied the appeal the same day, January · 24, as it found no reason to
conduct a re-trial based on the arguments and evidence presented.31 Petitioners, however, claim that the
written appeal was not acted upon until the filing of the petition-in-intervention.32
From January 25 to February 7, 2014, respondents allege that the Headquarters Tactics Group (HTG)
conducted an informal review to check the findings of the HC. During the course of the investigation, Prof.
Berong was said to have confirmed with the Officer-in-Charge of the HC that classes started as scheduled
(i.e., 3:05 p.m. or 1505H), and that Cadet lCL Barrawed, the acting class marcher of ENG412, verified
before the Commandant, Assistant Commandant, and STO that the class started not earlier than scheduled.
Meantime, on February 4, 2014, the OIC of the HC forwarded the Formal Investigation Report to the Staff
Judge Advocate (SJA) for review. The next day, the SJA found the report to be legally in order.
On February 8, 2014, Colonel Rozzano D. Briguez (Col. Briguez), the Commandant of Cadets, affirmed
the HC findings and recommended to Vice Admiral Edgar Abogado, then PMA Superintendent, the
separation from the PMA of Cadet lCL Cudia for violation of the First Tenet of the Honor Code (Lying,
pursuant to Sec. VII.12.b of the CCAFPR S-2008). On the same date, Special Orders No. 26 was issued by
the PMA Headquarters placing Cadet 1 CL Cudia on indefinite leave of absence without pay and
allowances effective February 10, 2014 pending approval of his separation by the AFPGHQ, barring him
from future appointment and/or admission as cadet, and not permitting him to qualify for any entrance
requirements to the PMA. 33
Two days later, Vice Admiral Abogado approved the recommendation to dismiss Cadet 1 CL Cudia.
On February 13, 2014, Cadet lCL Cudia submitted a letter to the Office of the Commandant of Cadets
requesting for reinstatement by the PMA of his status as a cadet.34
Four days passed, Annavee P. Cudia (Annavee ), the sister of Cadet 1 CL Cudia, posted his plight in her
Face book account. The day after, the Spouses Cudia gave a letter to Major General Oscar Lopez (Maj.
Gen. Lopez), the new PMA Superintendent, asking to recognize the 8-1 voting of the HC.35 Copies of
which were furnished to the AFP Chief of Staff and other concerned military officials. Subsequently, Maj.
Gen. Lopez was directed to review Cadet lCL Cudia's case. The latter, in turn, referred the matter to the
Cadet Review and Appeals Board (CRAB).
On February 19, 2014, Cadet lCL Cudia made his personal appeal letter to Maj. Gen. Lopez. On even date,
the AFP Chief of Staff ordered a reinvestigation following the viral Facebook post of Annavee demanding
the intervention of the military leadership.
Petitioners claim that, on February 21, 2014, Special Order No. 1 was issued directing all PMA cadets to
ostracize Cadet 1 CL Cudia by not talking to him and by separating him from all activities/functions of the
cadets. It is said that any violation shall be a "Class 1" offense entailing 45 demerits, 90 hours touring, and
90 hours confinement. Cadet 1 CL Cudia was not given a copy of the order and learned about it only from
the media.36 According to an alleged news report, PMA Spokesperson Major Agnes Lynette Flores (Maj.
Flores) confirmed the HC order to ostracize Cadet 1 CL Cudia. Among his offenses were: breach of
confidentiality by putting documents in the social media, violation of the PMA Honor Code, lack of
initiative to resign, and smearing the name of the PMA.37
On February 24, 2014, Cadet 1CL Cudia requested the CRAB for additional time, until March 4, 2014, to
file an appeal on the ground that his intended witnesses are in on-the-job training ( OJT).38 As additional
evidence to support his appeal, he also requested for copies of the Minutes of the HC proceedings, relevant
documents pertaining to the case, and video footages and recordings of the HC hearings.
The next day, Cadet 1 CL Cudia and his family engaged the services of the Public Attorney's Office (PAO)
in Baguio City.
The CRAB conducted a review of the case based on the following: (a) letter of appeal of the Spouses
Cudia dated February 18, 2014; (b) directive from the AFP-GHQ to reinvestigate the case; and ( c)
guidance from Maj. Gen. Lopez.
On February 26, 2014, Brigadier General Andre M. Costales, Jr. (Brig. Gen. Costales, Jr.), the CRAB
Chairman, informed Cadet lCL Cudia that, pending approval of the latter's request for extension, the
CRAB would continue to review the case and submit its recommendations based on whatever evidence and
testimonies received, and that it could not favorably consider his request for copies of the HC minutes,
relevant documents, and video footages and recordings of the HC hearings since it was neither the
appropriate nor the authorized body to take action thereon. 39Subsequently, upon verbal advice, Cadet 1 CL
Cudia wrote a letter to Maj. Gen. Lopez reiterating his request.40
Two days after, the Spouses Cudia filed a letter-complaint before the CHR-Cordillera Administrative
Region (CAR) Office against the HC members and Maj. Gracilla for alleged violation of the human rights
of Cadet lCL Cudia, particularly his rights to due process, education, and privacy of communication. 41
On March 4, 2014, Cadet 1 CL Cudia, through the PAO, moved for additional time, until March 19, 2014,
to file his appeal and submit evidence. PAO also wrote a letter to AFP Chief of Staff General Emmanuel T.
Bautista (Gen. Bautista) seeking for immediate directive to the PMA to expeditiously and favorably act on
Cadet 1CL Cudia's requests.42
Exactly a week prior to the commencement exercises of Siklab Diwa Class, the following events
transpired:
On March 10, 2014, Annavee sought the assistance of PAO Chief Public Attorney Persida V. Rueda-
Acosta.43 On the other hand, the CRAB submitted a report to the AFP-GHQ upholding the dismissal of
Cadet 1 CL Cudia.44
On March 11, 2014, PAO received a letter from Maj. Gen. Lopez stating the denial of Cadet 1CL Cudia's
requests for extension of time to file an Appeal Memorandum in view of the ample time already given, and
to be furnished with a copy of relevant documents because of confidentiality and presumption of regularity
of the HC proceedings.45Cadet 1CL Cudia, through PAO, then filed an Appeal Memorandum46 before the
CRAB.
On March 12, 2014, Spouses Cudia wrote a letter to President Benigno Simeon C. Aquino III (Pres.
Aquino), who is the Commander-in-Chief of the AFP, attaching thereto the Appeal Memorandum.47 On the
same day, Special Orders No. 48 was issued by the PMA constituting a Fact-Finding Board/Investigation
Body composed of the CRAB members and PMA senior officers to conduct a deliberate investigation
pertaining to Cadet 1CL Cudia's Appeal Memorandum. 48 The focus of the inquiry was not just to find out
whether the appeal has merit or may be considered but also to investigate possible involvement of other
cadets and members of the command related to the incident and to establish specific violation of policy or
regulations that had been violated by other cadets and members of the HC.49
On March 13, 2014, the Cudia family and the Chief Public Attorney had a dialogue with Maj. Gen. Lopez.
On March 14, 2014, the CHR-CAR came out with its preliminary findings, which recommended the
following:
 a. For the PMA and the Honor Committee to respect and uphold the 8 Guilty - 1 Not guilty IN VIEW OF THE FOREGOING, the CHR-CAR Office RESOLVED to indorse to competent authorities
vote; for their immediate appropriate action on the following recommendations:

b. For the PMA and the Honor Committee to officially pronounce Cdt Cudia as Not Guilty of
the charge filed against him before the Honor Committee;
c. For the PMA to restore Cadet Cudia's rights and entitlements as a full-fledge graduating cadet
and allow him to graduate on Sunday, 16 March 2014;
50
d. For the PMA to fully cooperate with the CHR in the investigation of Cudia's Case.
1. The Philippine Military Academy must set aside the "9-Guilty, 0-Not Guilty" verdict against
Cadet Aldrin Jeff P. Cudia, for being null and void; to uphold and respect the "8-Guilty, 1-Not
Guilty" voting result and make an official pronouncement of NOT GUILTY in favor of Cadet
Cudia;
2. The PMA, the AFP Chief of Staff, and the President in whose hands rest the ends of justice
and fate of Cadet Cudia, to:

On March 15, 2014, Cadet 1CL Cudia and his family had a meeting with Pres. Aquino and Department of
National Defense (DND) Secretary Voltaire T. Gazmin. The President recommended that they put in
writing their appeal, requests, and other concerns. According to respondents, the parties agreed that Cadet
1 CL Cudia would not join the graduation but it was without prejudice to the result of the appeal, which
was elevated to the AFP Chief of Staff. The President then tasked Gen. Bautista to handle the
reinvestigation of the case, with Maj. Gen. Oscar Lopez supervising the group conducting the review.
Four days after Siklab Diwa Class' graduation day, petitioner Renato S. Cudia received a letter dated
March 11, 2014 from the Office of the AFP Adjutant General and signed by Brig. Gen. Ronald N. Albano
for the AFP Chief of Staff, affirming the CRAB' s denial of Cadet 1 CL Cudia' s appeal. It held:
After review, The Judge Advocate General, APP finds that the action of the PMA CRAB in denying the
appeal for reinvestigation is legally in order. There was enough evidence to sustain the finding of guilt and
the proprietary (sic) of the punishment imposed. Also, your son was afforded sufficient time to file his
appeal from the date he was informed of the final verdict on January 21, 2014, when the decision of the
Honor Committee was read to him in person, until the time the PMA CRAB conducted its review on the
case. Moreover, the continued stay of your son at the Academy was voluntary. As such, he remained
subject to the Academy's policy regarding visitation. Further, there was no violation of his right to due
process considering that the procedure undertaken by the Honor Committee and PMA CRAB was
consistent with existing policy. Thus, the previous finding and recommendation of the Honor Committee
finding your son, subject Cadet guilty of "Lying" and recommending his separation from the Academy is
sustained.
2.1 officially proclaim Cadet Cudia a graduate and alumnus of the Philippine
Military Academy;
2.2 issue to Cadet Cudia the corresponding Diploma for the degree of Bachelors of
Science; and
2.3 Issue to Cadet Cudia the corresponding official transcript 'of his academic
records for his BS degree, without conditions therein as to his status as a PMA cadet.
3. The Public Attorneys' Office to provide legal services to Cadet Cudia in pursuing
administrative, criminal and civil suits against the officers and members of the Honor
Committee named hereunder, for violation of the Honor Code and System and the Procedure in
Formal Investigation, dishonesty, violation of the secrecy of the ballot, tampering the true result
of the voting, perjury, intentional omission in the Minutes of substantive part of the formal trial
proceedings which are prejudicial to the interest of justice and Cadet Cudia's fundamental rights
to dignity, non-discrimination and due process, which led to the infringement of his right to
education and even transgressing his right to a good life.
3.1 Cdt lCL MIKE ANTHONY MOGUL, now 2nd Lt. of the AFP
3.2 Cdt lCL RHONA K. SALVACION, now 2nd Lt. of the AFP

In view of the foregoing, this Headquarters resolved to deny your appeal for lack of merit. 51 Thereafter, the 3.3 Cdt 2CL ARWI C. MARTINEZ
Fact-Finding Board/Investigating Body issued its Final Investigation Report on March 23, 2014 denying
Cadet 1 CL Cudia's appeal.52 Subsequently, on April 28, 2014, the special investigation board tasked to
probe the case submitted its final report to the President.53 Pursuant to the administrative appeals process, 3.4 Cdt 2CL RENATO A. CARINO, JR.
the DND issued a Memorandum dated May 23, 2014, directing the Office of AFP Chief of Staff to submit
the complete records of the case for purposes of DND review and recommendation for disposition by the 3.5 Cdt 2CL NIKOANGELOC. TARAYAO
President.54
3.6 Cdt lCL JEANEL YN P. CABRIDO, now 2nd Lt. of the AFP
Meanwhile, on May 22, 2014, the CHR-CAR issued its Resolution with respect to CHR-CAR Case No.
2014-0029, concluding and recommending as follows:
3.7 Cdt lCL KIM ADRIAN R. MARTAL, now 2nd Lt. of the AFP

WHEREFORE, PREMISES CONSIDERED, the Commission on Human Rights-CAR Office finds

PROBABLE CAUSE FOR HUMAN RIGHTS VIOLATIONS against the officers and members of the 3.8 Cdt lCL JAIRUS 0. FANTIN, now 2nd Lt. of the AFP
PMA Honor Committee and .. certain PMA officials, specifically for violations of the rights of CADET
ALDRIN JEFF P. CUDIA to dignity, due process, education, privacy/privacy of communication, and good 3.9 Cdt lCL BRYAN SONNY S. ARLEGUI, now 2nd Lt. of the AFP
life.
3.10 Cdt lCL DALTON JOHN G. LAGURA, now 2nd Lt. of the AFP
 3.11 Cdt 1 CL BIANCHIHEIMER L. EDRA, now 2nd Lt. of the AFP
3.12 Cdt 4CL JENNIFER A. CUARTERON (recorder)
3.13 Cdt 3CL LEONCIO NICO A. DE JESUS II (record)
4. The Office of the AFP Chief of Staff and the PMA competent authorities should investigate
and file appropriate charges against Maj. VLADIMIR P. GRACILLA, for violation of the right
to privacy of Cadet Cudia and/or failure, as intelligence officer, to ensure the protection of the
right to privacy of Cudia who was then billeted at the PMA Holding Center;
5. The Office of the AFP Chief of Staff and PMA competent authorities should investigate Maj.
DENNIS ROMMEL HINDANG for his failure and ineptness to exercise his responsibility as a
competent Tactical Officer and a good father of his cadets, in this case, to Cadet Cudia; for
failure to respect exhaustion of administrative remedies;
6. The Secretary of National Defense, the Chief of Staff of the Armed Forces of the Philppines,
the PMA Superintendent, to immediately cause the comprehensive review of all rules of
procedures, regulations, policies, including the so-called practices in the implementation of the
Honor Code; and, thereafter, adopt new policies, rules of procedures and relevant regulations
which are human-rights based and consistent with the Constitution and other applicable laws;
7. The Congress of the Philippines to consider the enactment of a law defining and penalizing
ostracism and discrimination, which is apparently being practiced in the PMA, as a criminal
offense in this jurisdiction;
8. His Excellency The President of the Philippines to certify as priority, the passage of an anti-
ostracism and/or anti-discrimination law; and
9. Finally, for the AFP Chief of Staff and the PMA authorities to ensure respect and protection
of the rights of those who testified for the cause of justice and truth as well as human rights of
Cadet Cudia.
RESOLVED FURTHER, to monitor the actions by the competent authorities on the foregoing CHR
recommendations.
Let copy of this resolution be served by personal service or by substituted service to the complainants (the
spouses Renato and Filipina Cudia; and Aldrin Jeff P. Cudia), and all the respondents. Also, to the PMA
Superintendent, the AFP Chief of Staff, the Secretary of National Defense, His Excellency The President
of the Philippines, The Public Attorneys' Office.
SO RESOLVED.55
On June 11, 2014, the Office of the President sustained the findings of the AFP Chief of Staff and the
CRAB. The letter, which was addressed to the Spouses Cudia and signed by Executive Secretary Paquito
N. Ochoa, Jr., stated in whole:
This refers to your letters to the President dated 12 March 2014 and 26 March 2014 appealing for a
reconsideration of the decision of the Philippine Military Academy (PMA) Honor Committee on the case
of your son, Cadet 1 CL Aldrin Jeff Cudia.
After carefully studying the records of the case of Cadet Cudia, the decision of the Chief of Staff of the
Armed Forces of the Philippines (AFP), and the Honor Code System of the AFP Cadet Corps, this Office
has found no substantial basis to disturb the findings of the AFP and the PMA Cadet Review Appeals
Board (CRAB). There is no competent evidence to support the claim that the decision of the Honor
Committee members was initially at 8 "Guilty" votes and 1 "Not Guilty" vote. The lone affidavit of an
officer, based on his purported conversation with one Honor Committee member, lacks personal
knowledge on the deliberations of the said Committee and is hearsay at best.
Similarly, the initial recommendations of the Commission on Human Rights cannot be adopted as basis
that Cadet Cudia's due process rights were violated. Apart from being explicitly preliminary in nature, such
recommendations are anchored on a finding that there was an 8-1 vote which, as discussed above, is not
supported by competent evidence.
In the evaluation of Cadet Cudia's case, this Office has been guided by the precept that military law is
regarded to be in a class of its own, "applicable only to military personnel because the military constitutes
an armed organization requiring a system of discipline separate from that of civilians" (Gonzales v. Abaya,
G.R. No. 164007, 10 August 2005 citing Calley v. Callaway, 519 F. 2d 184 [1975] and Orloff v.
Willoughby, 345 US 83 [1953]). Thus, this Office regarded the findings of the AFP Chief, particularly his
conclusion that there was nothing irregular in the proceedings that ensued, as carrying great weight.
Accordingly, please be informed that the President has sustained the findings of the AFP Chief and the
PMA CRAB.56
The Issues
To petitioners, the issues for resolution are:
I.
WHETHER THE PHILIPPINE MILITARY ACADEMY, THE HONOR COMMITTEE AND THE
CADET REVIEW AND APPEALS BOARD COMMITTED GRAVE ABUSE OF DISCRETION IN
DISMISSING CADET FIRST CLASS ALDRIN JEFF P. CUDIA FROM THE ACADEMY IN UTTER
DISREGARD OF HIS RIGHT TO DUE PROCESS CONSIDERING THAT:
A. Despite repeated requests for relevant documents regarding his case, Cadet First Class
Aldrin Jeff Cudia was deprived of his right to have access to evidence which would have
proven his defense, would have totally belied the charge against him, and more importantly,
would have shown the irregularity in the Honor Committee's hearing and rendition of decision
B. Cadet First Class Aldrin Jeff Cudia was vaguely informed of the decisions arrived at by the
Honor Committee, the Cadet Review and Appeals Board and the Philippine Military Academy
C. The Honor Committee, the Cadet Review and Appeals Board and the Philippine Military
Academy have afforded Cadet First Class Aldrin Jeff Cudia nothing but a sham trial
D. The Honor Committee, the Cadet Review and Appeals Board and the Philippine Military
Academy violated their own rules and principles as embodied in the Honor Code
E. The Honor Committee, the Cadet Review and Appeals Board and the Philippine Military
Academy, in deciding Cadet First Class Aldrin Jeff Cudia's case, grossly and in bad faith,
 misapplied the Honor Code so as to defy the 1987 Constitution, notwithstanding the CADET CUDIA HAS NECESSARILY AND VOLUNTARILY RELINQUISHED CERTAIN CIVIL
unquestionable fact that the former should yield to the latter. LIBERTIES BY VIRTUE OF HIS ENTRY INTO THE PMA.

II VII.

WHETHER THE PHILIPPINE MILITARY ACADEMY, THE HONOR COMMITTEE AND THE THE PMA ENJOYS THE ACADEMIC FREEDOM WHICH AUTHORIZES IT TO IMPOSE
CADET REVIEW AND APPEALS BOARD COMMITTED GRAVE ABUSE OF DISCRETION IN DISCIPLINARY MEASURES AND PUNISHMENT AS IT DEEMS FIT AND CONSISTENT WITH
HOLDING THAT CADET FIRST CLASS ALDRIN JEFF P. CUDIA LIED, THEREBY VIOLATING THE PECULIAR NEEDS OF THE ACADEMY.
THE HONOR CODE
VIII.
III
CADET CUDIA WAS PROPERLY AFFORDED PROCEDURAL DUE PROCESS.
WHETHER THE RESULT OF THE FACT-FINDING INVESTIGATION INDEPENDENTLY
CONDUCTED BY THE COMMISSION ON HUMAN RIGHTS IS OF SUCH GREAT WEIGHT AND
The PMA has regulatory authority to administratively terminate cadets despite the absence of statutory
PERSUASIVE NATURE THAT THIS HONORABLE COURT MAY HONOR, UPHOLD AND
authority.
RESPECT57

Violation of the Honor Code warrants the administrative dismissal of a guilty cadet.
On the other hand, in support of their prayer to dismiss the petition, respondents presented the issues
below:
Cadet Cudia violated the first tenet of the Honor Code by providing untruthful statements in the
explanation for his tardiness.
PROCEDURAL GROUNDS

The higher authorities of the PMA did not blindly adopt the findings of the Honor Committee.
I.

THE MANDAMUS PETITION PRAYING THAT CADET CUDIA BE INCLUDED IN THE LIST OF
GRADUATES OF SIKLAB DIWA CLASS OF 2014 AND BE ALLOWED TO TAKE PART IN THE
COMMENCEMENT EXERCISES HAS ALREADY BEEN RENDERED MOOT.
II.
The procedural safeguards in a student disciplinary case were properly accorded to Cadet Cudia.
The subtle evolution in the voting process of the Honor Committee, by incorporating executive
session/chambering, was adopted to further strengthen the voting procedure of the Honor Committee.
Cadet Lagura voluntarily changed his vote without any pressure from the other voting members of the
Honor Committee.

THE ISSUES RAISED IN THE PETITIONS ARE ACTUALLY FACTUAL WHICH ARE BEYOND
Ostracism is not a sanctioned practice of the PMA.
THE SCOPE OF A PETITION FOR CERTIORARI, PROHIBITION AND MANDAMUS.

The findings of the Commission on Human Rights are not binding on the Honorable Court, and are, at best,
III.
recommendatory.

MANDAMUS DOES NOT LIE TO COMPEL RESPONDENTS TO GRANT THE RELIEFS PRAYED
Cadet Cudia was not effectively deprived of his future when he was dismissed from the PMA. 58
FOR. IV. IT IS PREMATURE TO INVOKE JUDICIAL REDRESS PENDING THE DECISION OF THE
PRESIDENT ON CADET CUDIA'S APPEAL.
The Ruling of the Court
V.
PROCEDURAL GROUNDS
WITH UTMOST DUE RESPECT, THE HONORABLE COURT MUST EXERCISE CAREFUL
RESTRAINT AND REFRAIN FROM UNDULY OR PREMATURELY INTERFERING WITH Propriety of a petition for mandamus
LEGITIMATE MILITARY MATTERS.
Respondents argue that the mandamus aspect of the petition praying that Cadet 1 CL Cudia be included in
SUBSTANTIVE GROUNDS the list of graduating cadets and for him to take part in the commencement exercises was already rendered
moot and academic when the graduation ceremonies of the PMA Siklab Diwa Class took place on March
16, 2014. Also, a petition for mandamus is improper since it does not lie to compel the performance of a
VI.
discretionary duty. Invoking Garcia v. The Faculty Admission Committee, Loyola School of
Theology,59 respondents assert that a mandamus petition could not be availed of to compel an academic
institution to allow a student to continue studying therein because it is merely a privilege and not a right. In
this case, there is a clear failure on petitioners' part to establish that the PMA has the, ministerial duty to
include Cadet 1 CL Cudia in the list, much less award him with academic honors and commission him to
the Philippine Navy. Similar to the case of University of San Agustin, Inc. v. Court of Appeals, 60 it is
submitted that the PMA may rightfully exercise its discretionary power on who may be admitted to study
pursuant to its academic freedom.
In response, petitioners contend that while the plea to allow Cadet 1 CL Cudia to participate in the PMA
2014 commencement exercises could no longer be had, the Court may still grant the other reliefs prayed
for. They add that Garcia enunciated that a respondent can be ordered to act in a particular manner when
there is a violation of a constitutional right, and that the certiorari aspect of the petition must still be
considered because it is within the province of the Court to determine whether a branch of the government
or any of its officials has acted without or in excess of jurisdiction or with grave abuse of discretion
amounting to lack or excess thereof.
We agree that a petition for mandamus is improper.
Under Section 3, Rule 65 of the Rules of Civil Procedure, a petition for mandamus may be filed when any
tribunal, corporation, board, officer, or person unlawfully neglects the performance of an act which the law
specifically enjoins as a duty resulting from an office, trust, or station. It may also be filed when any
tribunal, corporation, board, officer, or person unlawfully excludes another from the use and enjoyment of
a right or office to which such other is entitled.
For mandamus to lie, the act sought to be enjoined must be a ministerial act or duty. An act is ministerial if
the act should be performed "[under] a given state of facts, in a prescribed manner, in obedience to the
mandate of a legal authority, without regard to or the exercise of [the tribunal or corporation's] own
judgment upon the propriety or impropriety of the act done." The tribunal, corporation, board, officer, or
person must have no choice but to perform the act specifically enjoined by law. This is opposed to a
discretionary act whereby the officer has the choice to decide how or when to perform the duty. 61
In this case, petitioners pray for, among others: Also, after due notice and hearing, it is prayed of the Court
to issue a Writ of Mandamus to:
1. direct the PMA to include Cadet Cudia in the list of graduates of Siklab Diwa Class of 2014
of the PMA, including inclusion in the yearbook;
2. direct the PMA to allow Cadet Cudia to take part in the commencement exercises if he
completed all the requirements for his baccalaureate degree;
3. direct the PMA to award unto Cadet Cudia the academic honors he deserves, and the
commission as a new Philippine Navy ensign;
4. direct the Honor Committee to submit to the CRAB of the PMA all its records of the
proceedings taken against Cadet Cudia, including the video footage and audio recordings of the
deliberations and voting, for the purpose of allowing the CRAB to conduct intelligent review of
the case of Cadet Cudia;
5. direct the PMA's CRAB to conduct a review de nova of all the records without requiring
Cadet Cudia to submit new evidence if it was physically impossible to do so;
6. direct the PMA's CRAB to take into account the certification signed by Dr. Costales, the new
evidence consisting of the affidavit of a military officer declaring under oath that the cadet who
voted "not guilty" revealed to this officer that this cadet was coerced into changing his vote, and
other new evidence if there is any;
7. direct the PMA's CRAB to give Cadet Cudia the right to a counsel who is allowed to
participate actively in the proceedings as well as in the cross-examinations during the exercise
of the right to confront witnesses against him; and
8. direct the Honor Committee in case of remand of the case by the CRAB to allow Cadet Cudia
a representation of a counsel.62
Similarly, petitioner-intervenor seeks for the following reliefs:
A. xxx
B. a Writ of Mandamus be issued commanding:
a.) The PMA, Honor Committee, and CRAB to respect and uphold the 8 Guilty -1
Not Guilty vote;
b.) The PMA, Honor Committee, and CRAB to officially pronounce Cadet Cudia as
Not Guilty of the charge filed against him before the Honor Committee;
c.) The PMA to restore Cadet Cudia's rights and entitlements as a full-fledged
graduating cadet, including his diploma and awards.63
Anent the plea to direct the PMA to include Cadet 1 CL Cudia in the list of graduates of Siklab Diwa Class
of 2014 and to allow him to take part in the commencement exercises, the same was rendered moot and
academic when the graduation ceremonies pushed through on March 16, 2014 without including Cadet 1
CL Cudia in the roll of graduates.
With respect to the prayer directing the PMA to restore Cadet 1 CL Cudia's rights and entitlements as a
full-fledged graduating cadet, including his diploma, awards, and commission as a new Philippine Navy
ensign, the same cannot be granted in a petition for mandamus on the basis of academic freedom, which
We shall discuss in more detail below. Suffice it to say at this point that these matters are within the ambit
of or encompassed by the right of academic freedom; therefore, beyond the province of the Court to
decide.64 The powers to confer degrees at the PMA, grant awards, and commission officers in the military
service are discretionary acts on the part of the President as the AFP Commander-in-Chief. Borrowing the
words of Garcia:
There are standards that must be met. There are policies to be pursued. Discretion appears to be of the
essence. In terms of Hohfeld's terminology, what a student in the position of petitioner possesses is a
privilege rather than a right. She [in this case, Cadet 1 CL Cudia] cannot therefore satisfy the prime and
indispensable requisite of a mandamus proceeding.65
Certainly, mandamus is never issued in doubtful cases. It cannot be availed against an official or
government agency whose duty requires the exercise of discretion or judgment. 66 For a writ to issue,
petitioners should have a clear legal right to the thing demanded, and there should be an imperative duty on
the part of respondents to perform the act sought to be mandated. 67
The same reasons can be said as regards the other reliefs being sought by petitioners, which pertain to the
HC and the CRAB proceedings. In the absence of a clear and unmistakable provision of a law, a
mandamus petition does not lie to require anyone to a specific course of conduct or to control or review the
exercise of discretion; it will not issue to compel an official to do anything which is not his duty to do or
which is his duty not to do or give to the applicant anything to which he is not entitled by law.68
The foregoing notwithstanding, the resolution of the case must proceed since, as argued by petitioners, the
Court is empowered to settle via petition for certiorari whether there is grave abuse of discretion on the
part of respondents in dismissing Cadet 1 CL Cudia from the PMA.
Factual nature of the issues
According to respondents, the petition raises issues that actually require the Court to make findings of fact
because it sets forth several factual disputes which include, among others: the tardiness of Cadet 1 CL
Cudia in , his ENG412 class and his explanation thereto, the circumstances that transpired in the
investigation of his Honor Code violation, the proceedings before the HC, and the allegation that Cadet 1
CL Lagura was forced to change his vote during the executive session/"chambering."
the President's power over the persons and actions of the members of the armed forces is recognized in
B/Gen. (Ret.) Gudani v. Lt./Gen. Senga70 and in Section 3171 of Commonwealth Act (CA.) No. 1 (also
known as "The National Defense Act''). As such, the President could still overturn the decision of the
PMA. In respondents' view, the filing of this petition while the case is pending resolution of the President
is an irresponsible defiance, if not a personal affront. For them, comity dictates that courts of justice should
shy away from a dispute until the system of administrative redress has been completed.
From the unfolding of events, petitioners, however, consider that President Aquino effectively denied the
appeal of Cadet 1 CL Cudia. They claim that his family exerted insurmountable efforts to seek
reconsideration of the HC recommendation from the APP officials and the President, but was in vain. The
circumstances prior to, during, and after the PMA 2014 graduation rites, which was attended by President
Aquino after he talked to Cadet lCL Cudia's family the night before, foreclose the possibility that the
challenged findings would still be overturned. In any case, petitioners insist that the· rule on exhaustion of
administrative remedies is not absolute based on the Corsiga v. Defensor72 and Verceles v. BLR-
DOLE73 rulings.
We rule for petitioners.

In general, no one is entitled to judicial relief for a supposed or threatened injury until the prescribed
In opposition, petitioners claim that the instant controversy presents legal issues. Rather than determining
administrative remedy has been exhausted. The rationale behind the doctrine of exhaustion of
which between the two conflicting versions of the parties is true, the case allegedly centers on the
administrative remedies is that "courts, for reasons of law, comity, and convenience, should not entertain
application, appreciation, and interpretation of a person's rights to due process, to education, and to
suits unless the available administrative remedies have first been resorted to and the proper authorities,
property; the interpretation of the PMA Honor Code and Honor System; and the conclusion on whether
who are competent to act upon the matter complained of, have been given the appropriate opportunity to
Cadet 1 CL Cudia's explanation constitutes lying. Even if the instant case involves questions of fact,
act and correct their alleged errors, if any, committed in the administrative forum." 74 In the U.S. case of
petitioners still hold that the Court is empowered to settle mixed questions of fact and law. Petitioners are
Ringgold v. United States,75 which was cited by respondents, it was specifically held that in a typical case
correct.
involving a decision by military authorities, the plaintiff must exhaust his remedies within the military
before appealing to the court, the doctrine being designed both to preserve the balance between military
There is a question of law when the issue does not call for an examination of the probative value of and civilian authorities and to conserve judicial resources.
evidence presented, the truth or falsehood of facts being admitted and the doubt concerns the correct
application of law and jurisprudence on the matter. On the other hand, there is a question of fact when the
Nonetheless, there are exceptions to the rule. In this jurisdiction, a party may directly resort to judicial
doubt or controversy arises as to the truth or falsity of the alleged facts. When there is no dispute as to fact,
remedies if any of the following is present:
the question of whether or not the conclusion drawn therefrom is correct is a question of law.69 The petition
does not exclusively present factual matters for the Court to decide. As pointed out, the all-encompassing
issue of more importance is the determination of whether a PMA cadet has rights to due process, to 1. when there is a violation of due process;
education, and to property in the context of the Honor Code and the Honor System, and, if in the
affirmative, the extent or limit thereof. Notably, even respondents themselves raise substantive grounds
2. when the issue involved is purely a legal question;
that We have to resolve. In support of their contention that the Court must exercise careful restraint and
should refrain from unduly or prematurely interfering in legitimate military matters, they argue that Cadet
1 CL Cudia has necessarily and voluntarily relinquished certain civil liberties by virtue of his entry into the 3. when the administrative action is patently illegal amounting to lack or excess of jurisdiction;
PMA, and that the Academy enjoys academic freedom authorizing the imposition of disciplinary measures
and punishment as it deems fit and consistent with the peculiar needs of the PMA. These issues, aside from
being purely legal being purely legal questions, are of first impression; hence, the Court must not hesitate 4. when there is estoppel on the part of the administrative agency concerned;
to make a categorical ruling.
5. when there is irreparable injury;
Exhaustion of administrative remedies
6. when the respondent is a department secretary whose acts as an alter ego of the President
bear the implied and assumed approval of the latter;
Respondents assert that the Court must decline jurisdiction over the petition pending President Aquino’s
resolution of Cadet 1 CL Cudia' appeal. They say that there is an obvious non-exhaustion of the full
administrative process. While Cadet 1 CL Cudia underwent the review procedures of his guilty verdict at 7. when to require exhaustion of administrative remedies would be unreasonable;
the Academy level - the determination by the SJA of whether the HC acted according to the established
procedures of the Honor System, the assessment by the Commandant of Cadets of the procedural and legal
correctness of the guilty verdict, the evaluation of the PMA Superintendent to warrant the administrative 8. when it would amount to a nullification of a claim;
separation of the guilty cadet, and the appellate review proceedings before the CRAB - he still appealed to
the President, who has the utmost latitude in making decisions affecting the military. It is contended that 9. when the subject matter is a private land in land case proceedings;
 10. when the rule does not provide a plain, speedy and adequate remedy; and
11. when there are circumstances indicating the urgency of judicial intervention. 76
Petitioners essentially raise the lack of due process in the dismissal of Cadet 1 CL Cudia from the PMA.
Thus, it may be a ground to give due course to the petition despite the non-exhaustion of administrative
remedies. Yet more significant is the fact that during the pendency of this case, particularly on June 11,
2014, the Office of the President finally issued its ruling, which sustained the findings of the AFP Chief
and the CRAB. Hence, the occurrence of this supervening event bars any objection to the petition based on
failure to exhaust administrative remedies.
Court's interference within military affairs
Respondents cite the U.S. cases of Bois v. Marsh77 and Schlesinger v. Councilman78 to support their
contention that judicial intervention would pose substantial threat to military discipline and that there
should be a deferential review of military statutes and regulations since political branches have particular
expertise and competence in assessing military needs. Likewise, in Orloff v. Willoughby79 and Parker v.
Levy,80 it was allegedly opined by the U.S. Supreme Court that the military constitutes a specialized
community governed by a separate discipline from that of the civilian. According to respondents, the U.S.
courts' respect to the military recognizes that constitutional rights may apply differently in the military
context than in civilian society as a whole. Such military deference is exercised either by refusing to apply
due process and equal protection doctrines in military cases or applying them but with leniency.
In respondents' view, although Philippine courts have the power of judicial review in cases attended with
grave abuse of discretion amounting to lack or excess of jurisdiction, policy considerations call for the
widest latitude of deference to military affairs. Such respect is exercised by the court where the issues to be
resolved entail a substantial consideration of legitimate governmental interest. They suppose that allowing
Cadet 1 CL Cudia's case to prosper will set an institutionally dangerous precedent, opening a Pandora's box
of other challenges against the specialized system of discipline of the PMA. They state that with the PMA's
mandate to train cadets for permanent commission in the AFP, its disciplinary rules and procedure
necessarily must impose h different standard of conduct compared with civilian institutions.
Petitioners, on the other hand, consider that this Court is part of the State's check-and-balance machinery,
specifically mandated by Article VIII of the 1987 Constitution to ensure that no branch of the government
or any of its officials acts without or in excess of jurisdiction or with grave abuse of, discretion amounting
to lack or excess of jurisdiction. They assert that judicial non-interference in military affairs is not deemed
as absolute even in the U.S. They cite Schlesinger and Parker, which were invoked by respondents, as well
as Burns v. Wilson81 and Harmon v. Brucker,82 wherein the U.S. Supreme Court reviewed the proceedings
of military tribunals on account of issues posed concerning due process and violations of constitutional
rights. Also, in Magno v. De Villa83 decided by this Court, petitioners note that We, in fact, exercised the
judicial power to determine whether the APP and the members of the court martial acted with grave abuse
o.f discretion in their military investigation.
Petitioners' contentions are tenable.
Admittedly, the Constitution entrusts the political branches of the government, not the courts, with
superintendence and control over the military because the courts generally lack the competence and
expertise necessary to evaluate military decisions and they are ill-equipped to determine the impact upon
discipline that any particular intrusion upon military authority might have. 84 Nevertheless, for the sake of
brevity, We rule that the facts as well as the legal issues in the U.S. cases cited by respondents are not on
all fours with the case of Cadet 1 CL Cudia. Instead, what applies is the 1975 U.S. case of Andrews v.
Knowlton,85 which similarly involved cadets who were separated from the United States Military Academy
due to Honor Code violations. Following Wasson v. Trowbridge86 and Hagopian v. Knowlton,87 Andrews
re-affirmed the power of the district courts to review procedures used at the service academies in the
separation or dismissal of cadets and midshipmen. While it recognized the "constitutional permissibility of
the military to set and enforce uncommonly high standards of conduct and ethics," it said that the courts
"have expanded at an accelerated pace the scope of judicial access for review of military determinations."
Later, in Kolesa v. Lehman,88 it was opined that it has been well settled that federal courts have jurisdiction
"where there is a substantial claim that prescribed military procedures violates one's constitutional rights."
By 1983, the U.S. Congress eventually made major revisions to the Uniform Code of Military Justice
(UCMJ) by expressly providing, among others; for a direct review by the U.S. Supreme Court of decisions
by the military's highest appellate authority.89
Even without referring to U.S. cases, the position of petitioners is still formidable. In this jurisdiction,
Section 1 Article VIII of the 1987 Constitution expanded the scope of judicial power by mandating that the
duty of the courts of justice includes not only "to settle actual controversies involving rights which are
legally demandable and enforceable" but also "to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government" even if the latter does not exercise judicial, quasi-judicial or ministerial functions.90 Grave
abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction or where the power is exercised in an arbitrary or despotic manner by reason of passion or
personal hostility, which must be so patent and gross as to amount to an evasion of positive duty or to a
virtual refusal to perform the duty enjoined or to act at all in contemplation of law. 91
The proceedings of the Cadet Honor Committee can, for purposes of the Due Process Clause, be
considered a governmental activity. As ruled in Andrews:
The relationship between the Cadet Honor Committee and the separation process at the Academy has been
sufficiently formalized, and is sufficiently interdependent, so as to bring that committee's activities within
the definition of governmental activity for the purposes of our review. While the Academy has long had
the informal practice of referring all alleged violations to the Cadet Honor Committee, the relationship
between that committee and the separation process has to a degree been formalized. x x x
Regardless of whether the relationship be deemed formal or informal, the Honor Committee under its own
procedures provides that a single "not guilty" vote by a member ends the matter, while a "guilty" finding
confronts a cadet with the hard choice of either resigning or electing to go before a Board of Officers. An
adverse finding there results not only in formal separation from the Academy but also in a damaging record
that will follow the cadet through life. Accordingly, we conclude that the Cadet Honor Committee, acting
not unlike a grand jury, is clearly part of the process whereby a cadet can ultimately be adjudged to have
violated the Cadet Honor Code and be separated from the Academy. Therefore, the effect of the
committee's procedures and determinations on the separation process is sufficiently intertwined with the
formal governmental activity which may follow as to bring it properly under judicial review92
No one is above the law, including the military. In fact, the present Constitution declares it as a matter of
principle that civilian authority is, at all times, supreme over the military. 93 Consistent with the republican
system of checks and balances, the Court has been entrusted, expressly or by necessary implication, with
both the duty and the obligation of determining, in appropriate cases, the validity of any assailed legislative
or executive action.94
SUBSTANTIVE GROUNDS
Cadet's relinquishment of certain civil liberties
Respondents assert that the standard of rights applicable to a cadet is not the same as that of a civilian
because the former' s rights have already been recalibrated to best serve the military purpose and necessity.
They claim that both Gudani and Lt. Col. Kapunan, Jr. v. Gen. De Villa 95 recognized that, to a certain
degree, individual rights of persons in the military service may be curtailed by the rules of military
discipline in order to ensure its effectiveness in fulfilling the duties required to be discharged under the
law. Respondents remind that, as a military student aspiring to a commissioned post in the military service,
Cadet 1 CL Cudia voluntarily gave up certain civil and political rights which the rest of the civilian
population enjoys. The deliberate surrender of certain freedoms on his part is embodied in the cadets'
Honor Code Handbook. It is noted that at the beginning of their academic life in the PMA, Cadet 1 CL
Cudia, along with the rest of Cadet Corps, took an oath and undertaking to stand by the Honor Code and
the Honor System.
To say that a PMA cadet surrenders his fundamental human rights, including the right to due process, is,
for petitioners, contrary to the provisions of Section 3, Article II of the 1987 Constitution, 96 Executive
Order (E.O.) No. 17897 (as amended by E.O. No. 100598), AFP Code of Ethics, Oath of Cadet Corps to the
Honor Code and the Honor System, military professionalism, and, in general, military culture. They
maintain that the HC, the CRAB, and the PMA, grossly and in bad faith misapplied the Honor Code and
the Honor System in deciding Cadet lCL Cudia's case considering that these should not be implemented at
the expense of human rights, due process, and fair play. Further, under the doctrine of constitutional
supremacy, they can never overpower or defy the 1987 Constitution since the former should yield to the
latter. Petitioners stress that the statement that "a cadet can be compelled to surrender some civil rights and
liberties in order for the Code and System to be implemented" simply pertains to what cadets have to
sacrifice in order to prove that they are men or women of integrity and honor, such as the right to entertain
vices and the right to freely choose what they want to say or do. In the context of disciplinary investigation,
it does not contemplate a surrender of the right to due process but, at most, refers to the cadets' rights to
privacy and to remain silent.
We concur with the stand of petitioners.
Of course, a student at a military academy must be prepared to subordinate his private interests for the
proper functioning of the educational institution he attends to, one that is with a greater degree than a
student at a civilian public school.99 In fact, the Honor Code and Honor System Handbook of the PMA
expresses that, "[as] a training environment, the Cadet Corps is a society which has its own norms. Each
member binds himself to what is good for him, his subordinates, and his peers. To be part of the Cadet
Corps requires the surrender of some basic rights and liberties for the good of the group." 100
It is clear, however, from the teachings of Wasson and Hagopian, which were adopted by Andrews, that a
cadet facing dismissal from the military academy for misconduct has constitutionally protected private
interests (life, liberty, or property); hence, disciplinary proceedings conducted within the bounds of
procedural due process is a must.101For that reason, the PMA is not immune from the strictures of due
process. Where a person's good name, reputation, honor, or integrity is at stake because of what the
government is doing to him, the minimal requirements of the due process clause must be
satisfied.102 Likewise, the cadet faces far more severe sanctions of being expelled from a course of college
instruction which he or she has pursued with a view to becoming a career officer and of probably
being forever denied that career.103
The cases of Gudani and Kapunan, Jr. are inapplicable as they do not specifically pertain to dismissal
proceedings of a cadet in a military academy due to honor violation. In Gudani, the Court denied the
petition that sought to annul the directive from then President Gloria Macapagal-Arroyo, which' enjoined
petitioners from testifying before the Congress without her consent. We ruled that petitioners may be
subjected to military discipline for their defiance of a direct order of the AFP Chief of Staff. On the other
hand, in Kapunan, Jr., this Court upheld the restriction imposed on petitioner since the conditions for his
"house arrest" (particularly, that he may not issue any press statements or give any press conference during
the period of his detention) are justified by the requirements of military discipline. In these two cases, the
constitutional rights to information, transparency in matters of public concern, and to free speech - not to
due process clause - were restricted to better serve the greater military purpose. Academic freedom of the
PMA
Petitioners posit that there is no law providing that a guilty finding by the HC may be used by the PMA to
dismiss or recommend the dismissal of a cadet from the PMA. They argue that Honor Code violation is not
among those listed as justifications for the attrition of cadets considering that the Honor Code and the
Honor System do not state that a guilty cadet is automatically terminated or dismissed from service. To
them, the Honor Code and Honor System are "gentleman's agreement" that cannot take precedence over
public interest - in the defense of the nation and in view of the taxpayer's money spent for each cadet.
Petitioners contend that, based on the Civil Code, all written or verbal agreements are null and void if they
violate the law, good morals, good customs, public policy, and public safety.
In opposition, respondents claim that the PMA may impose disciplinary measures and punishment as it
deems fit and consistent with the peculiar needs of the Academy. Even without express provision of a law,
the PMA has regulatory authority to administratively dismiss erring cadets since it is deemed reasonably
written into C.A. No. 1. Moreover, although said law grants to the President the authority of terminating a
cadet's appointment, such power may be delegated to the PMA Superintendent, who may exercise direct
supervision and control over the cadets.
Respondents likewise contend that, as an academic institution, the PMA has the inherent right to
promulgate reasonable norms, rules and regulations that it may deem necessary for the maintenance of
school discipline, which is specifically mandated by Section 3 (2), 104 Article XIV of the 1987 Constitution.
As the premiere military educational institution of the AFP in accordance with Section 30, 105 Article III of
C.A. No. 1 and Sections 58 and 59,106 Chapter 9, Subtitle II, Title VIII, Book IV of E.O. No. 292
("Administrative Code of 1987"), the PMA is an institution that enjoys academic freedom guaranteed by
Section 5 (2),107 Article XIV of the 1987 Constitution. In Miriam College Foundation, Inc. v. Court of
Appeals,108 it was held that concomitant with such freedom is the right and duty to instill and impose
discipline upon its students. Also, consistent with lsabelo, Jr. v. Perpetual Help College of Rizal, Inc. 109 and
Ateneo de Manila University v. Capulong,110 the PMA has the freedom on who to admit (and, conversely,
to expel) given the high degree of discipline and honor expected from its students who are to form part of
the AFP.
For respondents, Cadet 1 CL Cudia cannot, therefore, belatedly assail the Honor Code as basis of the HC' s
decision to recommend his dismissal from the PMA. When he enlisted for enrolment and studied in the
PMA for four years, he knew or should have been fully aware of the standards of discipline imposed on all
cadets and the corresponding penalty for failing to abide by these standards.
In their Reply, petitioners counter that, as shown in lsabelo, Jr. and Ateneo, academic freedom is not
absolute and cannot be exercised in blatant disregard of the right to due process and the 1987 Constitution.
Although schools have the prerogative to choose what to teach, how to teach, and who to teach, the same
does not go so far as to deprive a student of the right to graduate when there is clear evidence that he is
entitled to the same since, in such a case, the right to graduate becomes a vested right which takes
precedence over the limited and restricted right of the educational institution.
While both parties have valid points to consider, the arguments of respondents are more in line with the
facts of this case. We have ruled that the school-student relationship is contractual in nature. Once
admitted, a student's enrolment is not only semestral in duration but for the entire period he or she is
expected to complete it.111 An institution of learning has an obligation to afford its students a fair
opportunity to complete the course they seek to pursue.112 Such contract is imbued with public interest
because of the high priority given by the Constitution to education and the grant to the State of supervisory
and regulatory powers over a educational institutions.113
The school-student relationship has also been held as reciprocal. "[It] has consequences appurtenant to and Finally, nowhere in the above formulation is the right to discipline more evident than in "who may be
inherent in all contracts of such kind -it gives rise to bilateral or reciprocal rights and obligations. The admitted to study." If a school has the freedom to determine whom to admit, logic dictates that it also has
school undertakes to provide students with education sufficient to enable them to pursue higher education the right to determine whom to exclude or expel, as well as upon whom to impose lesser sanctions such as
or a profession. On the other hand, the students agree to abide by the academic requirements of the school suspension and the withholding of graduation privileges.126
and to observe its rules and regulations."114
The power of the school to impose disciplinary measures extends even after graduation for any act done by
Academic freedom or, to be precise, the institutional autonomy of universities and institutions of higher the student prior thereto. In University of the Phils. Board of Regents v. Court of Appeals, 127 We upheld
learning,115has been enshrined in our Constitutions of 1935, 1973, and 1987.116 In Garcia, this Court the university's withdrawal of a doctorate degree already conferred on a student who was found to have
espoused the concurring opinion of U.S. Supreme Court Justice Felix Frankfurter in Sweezy v. New committed intellectual dishonesty in her dissertation. Thus:
Hampshire,117 which enumerated "the four essential freedoms" of a university: To determine for itself on
academic grounds (1) who may teach, (2) what may be taught, (3) how it shall be taught, and (4) who may
Art. XIV, §5 (2) of the Constitution provides that "[a]cademic freedom shall be enjoyed in all institutions
be admitted to study.118 An educational institution has the power to adopt and enforce such rules as may be
of higher learning." This is nothing new. The 1935 Constitution and the 1973 Constitution likewise
deemed expedient for its government, this being incident to the very object of incorporation, and
provided for the academic freedom or, more precisely, for the institutional autonomy of universities and
indispensable to the successful management of the college.119 It can decide for itself its aims and objectives
institutions of higher learning. As pointed out by this Court in Garcia v. Faculty Admission Committee,
and how best to attain them, free from outside coercion or interference except when there is an overriding
Loyola School of Theology, it is a freedom granted to "institutions of higher learning" which is thus given
public welfare which would call for some restraint.120 Indeed, "academic freedom has never been meant to
"a wide sphere of authority certainly extending to the choice of students." If such institution of higher
be an unabridged license. It is a privilege that assumes a correlative duty to exercise it responsibly. An
learning can decide who can and who cannot study in it, it certainly can also determine on whom it can
equally telling precept is a long recognized mandate, so well expressed in Article 19 of the Civil Code, that
confer the honor and distinction of being its graduates.
every 'person must, in the exercise of his rights and in the performance of his duties, act with justice, give
everyone his due, and observe honesty and good faith."'121
Where it is shown that the conferment of an honor or distinction was obtained through fraud, a university
has the right to revoke or withdraw the honor or distinction it has thus conferred. This freedom of a
The schools' power to instill discipline in their students is subsumed in their academic freedom and that
university does not terminate upon the "graduation" of a student, .as the Court of Appeals held. For it is
"the establishment of rules governing university-student relations, particularly those pertaining to student
precisely the "graduation" of such a student that is in question. It is noteworthy that the investigation of
discipline, may be regarded as vital, not merely to the smooth and efficient operation of the institution, but
private respondent's case began before her graduation. If she was able to join the graduation ceremonies on
to its very survival."122 As a Bohemian proverb puts it: "A school without discipline is like a mill without
April 24, 1993, it was because of too many investigations conducted before the Board of Regents finally
water." Insofar as the water turns the mill, so does the school's disciplinary power assure its right to survive
decided she should not have been allowed to graduate.
and continue operating.123 In this regard, the Court has always recognized the right of schools to impose
disciplinary sanctions, which includes the power to dismiss or expel, on students who violate disciplinary
rules.124 In Miriam College Foundation, Inc. v. Court of Appeals,125 this Court elucidated: Wide indeed is the sphere of autonomy granted to institutions of higher learning, for the constitutional
grant of academic freedom, to quote again from Garcia v. Faculty Admission Committee, Loyola School of
Theology, "is not to be construed in a niggardly manner or in a grudging fashion."
The right of the school to discipline its students is at once apparent in the third freedom, i.e., "how it shall
be taught." A school certainly cannot function in an atmosphere of anarchy.
Under the U.P. Charter, the Board of Regents is the highest governing body of the University of the
Philippines. It has the power to confer degrees upon the recommendation of the University Council. It
Thus, there can be no doubt that the establishment of an educational institution requires rules and
follows that if the conferment of a degree is founded on error or fraud, the Board of Regents is also
regulations necessary for the maintenance of an orderly educational program and the creation of an
empowered, subject to the observance of due process, to withdraw what it has granted without violating a
educational environment conducive to learning. Such rules and regulations are equally necessary for the
student's rights. An institution of higher learning cannot be powerless if it discovers that an academic
protection of the students, faculty, and property.
degree it has conferred is not rightfully deserved. Nothing can be more objectionable than bestowing a
university's highest academic degree upon an individual who has obtained the same through fraud or
Moreover, the school has an interest in teaching the student discipline, a necessary, if not indispensable, deceit. The pursuit of academic excellence is the university's concern. It should be empowered, as an act of
value in any field of learning. By instilling discipline, the school teaches discipline. Accordingly, the right self-defense, to take measures to protect itself from serious threats to its integrity.
to discipline the student likewise finds basis in the freedom "what to teach." Incidentally, the school not
only has the right but the duty to develop discipline in its students. The Constitution no less imposes such
While it is true that the students are entitled to the right to pursue their education, the USC as an
duty.
educational institution is also entitled to pursue its academic freedom and in the process has the
concomitant right to see to it that this freedom is not jeopardized.128
[All educational institutions] shall inculcate patriotism and nationalism, foster love of humanity, respect for
human rights, appreciation of the role of national heroes in the historical development of the country, teach
It must be borne in mind that schools are established, not merely to develop the intellect and skills of the
the rights and duties of citizenship, strengthen ethical and spiritual values, develop moral character and
studentry, but to inculcate lofty values, ideals and attitudes; nay, the development, or flowering if you will,
personal discipline, encourage critical and creative thinking, broaden scientific and technological
of the total man.129Essentially, education must ultimately be religious, i.e., one which inculcates duty and
knowledge, and promote vocational efficiency.
reverence.130 Under the rubric of "right to education," students have a concomitant duty to learn under the
rules laid down by the school.131 Every citizen has a right to select a profession or, course of study, subject
In Angeles vs. Sison, we also said that discipline was a means for the school to carry out its responsibility to fair, reasonable, and equitable admission and academic requirements.132 The PMA is not different. As
to help its students "grow and develop into mature, responsible, effective and worthy citizens of the the primary training and educational institution of the AFP, it certainly has the right to invoke academic
community."
freedom in the enforcement of its internal rules and regulations, which are the Honor Code and the Honor
System in particular.
The Honor Code is a set of basic and fundamental ethical and moral principle. It is the minimum standard
for cadet behavior and serves as the guiding spirit behind each cadet's action. It is the cadet's responsibility
to maintain the highest standard of honor. Throughout a cadet's stay in the PMA, he or she is absolutely
bound thereto. It binds as well the members of the Cadet Corps from its alumni or the member of the so-
called "Long Gray Line."
Likewise, the Honor Code constitutes the foundation for the cadets' character development. It defines the
desirable values they must possess to remain part of the Corps; it develops the atmosphere of trust so
essential in a military organization; and it makes them professional military soldiers. 133 As it is for
character building, it should not only be kept within the society of cadets. It is best adopted by the Cadet
Corps with the end view of applying it outside as an officer of the AFP and as a product of the PMA. 134
The Honor Code and System could be justified as the primary means of achieving the cadets' character
development and as ways by which the Academy has chosen to identify those who are deficient in
conduct.135 Upon the Code rests the ethical standards of the Cadet Corps and it is also an institutional goal,
ensuring that graduates have strong character, unimpeachable integrity, and moral standards of the highest
order.136 To emphasize, the Academy's disciplinary system as a whole is characterized as "correctional and
educational in nature rather than being legalistic and punitive." Its purpose is to teach the cadets "to be
prepared to accept full responsibility for all that they do or fail to do and to place loyalty to the service
above self-interest or loyalty to friends or associates. "137Procedural safeguards in a student disciplinary
case
Respondents stress that Guzman v. National University138 is more appropriate in determining the minimum
standards for the imposition of disciplinary sanctions in academic institutions. Similarly, with the
guideposts set in Andrews, they believe that Cadet 1 CL Cudia was accorded due process.
On the other hand, petitioners argue that the HC, the CRAB and the PMA fell short in observing the
important safeguards laid down in Ang Tibay v. CIR139 and Non v. Judge Dames II,140 which set the
minimum standards to satisfy the demands of procedural due process in the imposition of disciplinary
sanctions. For them, Guzman did not entirely do away with the due process requirements outlined in Ang
Tibay as the Court merely stated that the minimum requirements in the Guzman case are more apropos.
Respondents rightly argued.
Ateneo de Manila University v. Capulong141 already settled the issue as it held that although both Ang
Tibay and Guzman essentially deal with the requirements of due process, the latter case is more apropos
since it specifically deals with the minimum standards to be satisfied in the imposition of disciplinary
sanctions in academic institutions. That Guzman is the authority on the procedural rights of students in
disciplinary cases was reaffirmed by the Court in the fairly recent case of Go v. Colegio De San Juan De
Letran.142
In Guzman, the Court held that there are minimum standards which must be met to satisfy the demands of
procedural due process, to wit:
(1) the students must be informed in writing of the nature and cause of any accusation against them; (2)
they shall have the right to answer the charges against them, with the assistance of counsel, if desired; (3)
they shall be informed of the evidence against them; ( 4) they shall have the right to adduce evidence in
their own behalf; and (5) the evidence must be duly considered by the investigating committee or official
designated by the school authorities to hear and decide the case.143
We have been consistent in reminding that due process in disciplinary cases involving students does not
entail proceedings and hearings similar to those prescribed for actions and proceedings in courts of
justice;144 that the proceedings may be summary;145 that cross-examination is not an essential part of the
investigation or hearing;146and that the required proof in a student disciplinary action, which is an
administrative case, is neither proof beyond reasonable doubt nor preponderance of evidence but only
substantial evidence or "such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion."147
What is crucial is that official action must meet minimum standards of fairness to the individual, which
generally encompass the right of adequate notice and a meaningful opportunity to be heard. 148 As held in
De La Salle University, Inc. v. Court of Appeals:149
Notice and hearing is the bulwark of administrative due process, the right to which is among the primary
rights that must be respected even in administrative proceedings. The essence of due process is simply an
opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one's side or
an opportunity to seek reconsideration of the action or ruling complained of. So long as the party is given
the opportunity to advocate her cause or defend her interest in due course, it cannot be said that there was
denial of due process.
A formal trial-type hearing is not, at all times and in all instances, essential to due process - it is enough
that the parties are given a fair and reasonable opportunity to explain their respective sides of the
controversy and to present supporting evidence on which a fair decision can be based. "To be heard" does
not only mean presentation of testimonial evidence in court - one may also be heard through pleadings and
where the opportunity to be heard through pleadings is accorded, there is no denial of due process. 150
The PMA Honor Code explicitly recognizes that an administrative proceeding conducted to investigate a
cadet's honor violation need not be clothed with the attributes of a judicial proceeding. It articulates that –
The Spirit of the Honor Code guides the Corps in identifying and assessing misconduct. While cadets are
interested in legal precedents in cases involving Honor violations, those who hold the Spirit of the Honor
Code dare not look into these precedents for loopholes to justify questionable acts and they are not to
interpret the system to their own advantage.
The Spirit of the Honor Code is a way for the cadets to internalize Honor in a substantive way. Technical
and procedural misgivings of the legal systems may avert the true essence of imparting the Spirit of the
Code for the reason that it can be used to make unlawful attempt to get into the truth of matters especially
when a cadet can be compelled to surrender some civil rights and liberties in order for the Code and
System to be implemented. By virtue of being a cadet, a member of the CCAFP becomes a subject of the
Honor Code and System. Cadet's actions are bound by the existing norms that are logically applied through
the Code and System in order to realize the Academy's mission to produce leaders of character - men of
integrity and honor.151
One of the fundamental principles of the Honor System also states:
2. The Honor System correlates with legal procedures of the state's Justice System but it does not demean
its Spirit by reducing the Code to a systematic list of externally observed rules. Where misinterpretations
and loopholes arise through legalism and its technicalities, the objective of building the character of the
cadets becomes futile. While, generally, Public Law penalizes only the faulty acts, the Honor System tries
to examine both the action and the intention.152
Like in other institutions of higher learning, there is aversion towards undue judicialization of an
administrative hearing in the military academy. It has been said that the mission of the military is unique in
the sense that its primary business is to fight or be ready to fight wars should the occasion arise, and that
over-proceduralizing military determinations necessarily gives soldiers less time to accomplish this
task.153 Extensive cadet investigations and complex due process hearing could sacrifice simplicity,
practicality, and timeliness. Investigations that last for several days or weeks, sessions that become
increasingly involved with legal and procedural' points, and legal motions and evidentiary objections that
are irrelevant and inconsequential tend to disrupt, delay, and confuse the dismissal proceedings and make
them unmanageable. Excessive delays cannot be tolerated since it is unfair to the accused, to his or her
fellow cadets, to the Academy, and, generally, to the Armed Forces. A good balance should, therefore, be
struck to achieve fairness, thoroughness, and efficiency.154 Considering that the case of Cadet 1 CL Cudia
is one of first impression in the sense that this Court has not previously dealt with the particular issue of a
dismissed cadet's right to due process, it is necessary for Us to refer to U.S. jurisprudence for some
guidance. Notably, our armed forces have been patterned after the U.S. Army and the U.S. military code
produced a salutary effect in the military justice system of the Philippines. 155 Hence, pertinent case laws
interpreting the U.S. military code and practices have persuasive, if not the same, effect in this jurisdiction.
We begin by stating that U.S. courts have uniformly viewed that "due process" is a flexible concept,
requiring consideration in each case of a variety of circumstances and calling for such procedural
protections as the particular situation demands.156 Hagopian opined:
In approaching the question of what process is due before governmental action adversely affecting private
interests may properly be taken, it must be recognized that due process is not a rigid formula or simple rule
of thumb to be applied undeviatingly to any given set of facts. On the contrary, it is a flexible concept
which depends upon the balancing of various factors, including the nature of the private right or interest
that is threatened, the extent to which the proceeding is adversarial in character, the severity and
consequences of any action that might be taken, the burden that would be imposed by requiring use of all
or part of the full panoply of trial-type procedures, and the existence of other overriding interests, such as
the necessity for prompt action in the conduct of crucial military operations. The full context must
therefore be considered in each case.157 (Emphasis supplied)
Wasson, which was cited by Hagopian, broadly outlined the minimum standards of due process required in
the dismissal of a cadet. Thus:
[W]hen the government affects the private interests of individuals, it may not proceed arbitrarily but must
observe due process of law. x x x Nevertheless, the flexibility which is inherent in the concept of due
process of law precludes the dogmatic application of specific rules developed in one context to entirely
distinct forms of government action. "For, though 'due process of law' generally implies and includes actor,
reus, judex, regular allegations, opportunity to answer, and a trial according to some settled course of
judicial proceedings, * * * yet, this is not universally true." x x x Thus, to determine in any given case what
procedures due process requires, the court must carefully determine and balance the nature of the private
interest affected and of the government interest involved, taking account of history and the precise
circumstances surrounding the case at hand.
While the government must always have a legitimate concern with the subject matter before it may validly
affect private interests, in particularly vital and sensitive areas of government concern such as national
security and military affairs, the private interest must yield to a greater degree to the governmental. x x x
Few decisions properly rest so exclusively within the discretion of the appropriate government officials
than the selection, training, discipline and dismissal of the future officers of the military and Merchant
Marine. Instilling and maintaining discipline and morale in these young men who will be required to bear
weighty responsibility in the face of adversity -- at times extreme -- is a matter of substantial national
importance scarcely within the competence of the judiciary. And it cannot be doubted that because of these
factors historically the military has been permitted greater freedom to fashion its disciplinary procedures
than the civilian authorities.
We conclude, therefore, that due process only requires for the dismissal of a Cadet from the Merchant
Marine Academy that he be given a fair hearing at which he is apprised of the charges against him and
permitted a defense. x x x For the guidance of the parties x x x the rudiments of a fair hearing in broad
outline are plain. The Cadet must be apprised of the specific charges against him. He must be given an
adequate opportunity to present his defense both from the point of view of time and the use of witnesses
and other evidence. We do not suggest, however, that the Cadet must be given this opportunity both when
demerits are awarded and when dismissal is considered. The hearing may be procedurally informal and
need not be adversarial.158 (Emphasis supplied)
In Andrews, the U.S. Court of Appeals held that Wasson and Hagopian are equally controlling in cases
where cadets were separated from the military academy for violation of the Honor Code. Following the
two previous cases, it was ruled that in order to be proper and immune from constitutional infirmity, a
cadet who is sought to be dismissed or separated from the academy must be afforded a hearing, be apprised
of the specific charges against him, and be given an adequate opportunity to present his or her defense both
from the point of view of time and the use of witnesses and other evidence. 159 Conspicuously, these vital
conditions are not too far from what We have already set in Guzman and the subsequent rulings in Alcuaz
v. Philippine School of Business Administration160 and De La Salle University, Inc. v. Court of Appeals.161
In this case, the investigation of Cadet 1 CL Cudia' s Honor Code violation followed the prescribed
procedure and existing practices in the PMA. He was notified of the Honor Report from Maj. Hindang. He
was then given the opportunity to explain the report against him. He was informed about his options and
the entire process that the case would undergo. The preliminary investigation immediately followed after
he replied and submitted a written explanation. Upon its completion, the investigating team submitted a
written report together with its recommendation to the HC Chairman. The HC thereafter reviewed the
findings and recommendations. When the honor case was submitted for formal investigation, a new team
was assigned to conduct the hearing. During the formal investigation/hearing, he was informed of the
charge against him and given the right to enter his plea. He had the chance to explain his side, confront the
witnesses against him, and present evidence in his behalf. After a thorough discussion of the HC voting
members, he was found to have violated the ' Honor Code. Thereafter, the guilty verdict underwent the
review process at the Academy level - from the OIC of the HC, to the SJA, to the Commandant of Cadets,
and to the PMA Superintendent. A separate investigation was also conducted by the HTG. Then, upon the
directive of the AFP-GHQ to reinvestigate the case, a review was conducted by the CRAB. Further, a Fact-
Finding Board/Investigation Body composed of the CRAB members and the PMA senior officers was
constituted to conduct a deliberate investigation of the case. Finally, he had the opportunity to appeal to the
President. Sadly for him, all had issued unfavorable rulings.
It is well settled that by reason of their special knowledge and expertise gained from the handling of
specific matters falling under their respective jurisdictions, the factual findings of administrative tribunals
are ordinarily accorded respect if not finality by the Court, unless such findings are not supported by
evidence or vitiated by fraud, imposition or collusion; where the procedure which led to the findings is
irregular; when palpable errors are committed; or when a grave abuse of discretion, arbitrariness, or
capriciousness is manifest.162 In the case of Cadet 1 CL Cudia, We find no reason to deviate from the
general rule. The grounds therefor are discussed below seriatim:
As to the right to be represented by a counsel –
For petitioners, respondents must be compelled to give Cadet 1 CL Cudia the right to be represented by a
counsel who could actively participate in the proceedings like in the cross-examination of the witnesses
against him before the CRAB or HC, if remanded. This is because while the CRAB allowed him to be
represented by a PAO lawyer, the counsel was only made an observer without any right to intervene and
demand respect of Cadet 1 CL Cudia's rights.163 According to them, he was not sufficiently given the
opportunity to seek a counsel and was not even asked if he would like to have one. He was only properly
represented when it was already nearing graduation day after his family sought the assistance of the PAO.
Petitioners assert that Guzman is specific in stating that the erring student has the right to answer the
charges against him or her with the assistance of counsel, if desired.
On the other hand, respondents cited Lumiqued v. Exevea164 and Nera v. The Auditor General165 in As to the confidentiality of records of the proceedings –
asserting that the right to a counsel is not imperative in administrative investigations or non-criminal
proceedings. Also, based on Cadet lCL Cudia's academic standing, he is said to be obviously not untutored
Petitioners allege that when Maj. Gen. Lopez denied in his March 11, 2014 letter Cadet lCL Cudia's
to fully understand his rights and express himself. Moreover, the confidentiality of the HC proceedings
request for documents, footages, and recordings relevant to the HC hearings, the vital evidence negating
worked against his right to be represented by a counsel. In any event, respondents claim that Cadet 1 CL
the regularity of the HC trial and supporting his defense have been surely overlooked by the CRAB in its
Cudia was not precluded from seeking a counsel's advice in preparing his defense prior to the HC hearing.
case review. Indeed, for them, the answers on whether Cadet 1 CL Cudia was deprived of due process and
whether he lied could easily be unearthed from the video and other records of the HC investigation.
Essentially, petitioners claim .. that Cadet lCL Cudia is guaranteed the right to have his counsel not just in Respondents did not deny their existence but they refused to present them for the parties and the Court to
assisting him in the preparation for the investigative hearing before the HC and the CRAB but in peruse. In particular, they note that the Minutes of the HC dated January 21, 2014 and the HC Formal
participating fully in said hearings. The Court disagrees. Investigation Report dated January 20, 2014 were considered by the CRAB but were not furnished to
petitioners and the Court; hence, there is no way to confirm the truth of the alleged statements therein. In
their view, failure to furnish these documents could only mean that it would be adverse if produced
Consistent with Lumiqued and Nera, there is nothing in the 1987 Constitution stating that a party in a non-
pursuant to Section 3 (e), Rule 131 of the Rules of Court. 172
litigation proceeding is entitled to be represented by counsel. The assistance of a lawyer, while desirable, is
not indispensable. Further, in Remolona v. Civil Service Commission, 166 the Court held that "a party in an
administrative inquiry may or may not be assisted by counsel, irrespective of the nature of the charges and For lack of legal basis on PMA' s claim of confidentiality of records, petitioners contend that it is the
of the respondent's capacity to represent himself, and no duty rests on such body to furnish the person ministerial duty of the HC to submit to the CRAB, for the conduct of intelligent review of the case, all its
being investigated with counsel." Hence, the administrative body is under no duty to provide the person records of the proceedings, including video footages of the deliberations and voting. They likewise argue
with counsel because assistance of counsel is not an absolute requirement. that PMA' s refusal to release relevant documents to Cadet 1 CL Cudia under the guise of confidentiality
reveals another misapplication of the Honor Code, which merely provides: "A cadet who becomes part of
any investigation is subject to the existing regulations pertaining to rules of confidentiality and, therefore,
More in point is the opinion in Wasson, which We adopt. Thus:
must abide to the creed of secrecy. Nothing shall be disclosed without proper guidance from those with
authority" (IV. The Honor System, Honor Committee, Cadet Observer). This provision, they say, does not
The requirement of counsel as an ingredient of fairness is a function of all of the other aspects of the deprive Cadet 1 CL Cudia of his right to obtain copies and examine relevant documents pertaining to his
hearing. Where the proceeding is non-criminal in nature, where the hearing is investigative and not case.
adversarial and the government does not proceed through counsel, where the individual concerned is
mature and educated, where his knowledge of the events x x x should enable him to develop the facts
Basically, petitioners want Us to assume that the documents, footages, and recordings relevant to the HC
adequately through available sources, and where the other aspects of the hearing taken as a whole are fair,
hearings are favorable to Cadet 1 CL Cudia's cause, and, consequently, to rule that respondents' refusal to
due process does not require representation by counsel.167
produce and have them examined is tantamount to the denial of his right to procedural due process. They
are mistaken.
To note, U.S. courts, in general, have declined to recognize a right to representation by counsel, as a
function of due process, in military academy disciplinary proceedings.168 This rule is principally motivated
In this case, petitioners have not particularly identified any documents, witness testimony, or oral or
by the policy of "treading lightly on the military domain, with scrupulous regard for the power and
written presentation of facts submitted at the hearing that would support Cadet 1 CL Cudia's defense. The
authority of the military establishment to govern its own affairs within the broad confines of constitutional
Court may require that an administrative record be supplemented, but only "where there is a 'strong
due process" and the courts' views that disciplinary proceedings are not judicial in nature and should be
showing or bad faith or improper behavior' on the part of the agency,"173 both of which are not present
kept informal, and that literate and educated cadets should be able to defend themselves. 169 In Hagopian, it
here. Petitioners have not specifically indicated the nature of the concealed evidence, if any, and the reason
was ruled that the importance of informality in the proceeding militates against a requirement that the cadet
for withholding it. What they did was simply supposing that Cadet 1 CL Cudia's guilty verdict would be
be accorded the right to representation by counsel before the Academic Board and that unlike the welfare
overturned with the production and examination of such documents, footages, and recordings. As will be
recipient who lacks the training and education needed to understand his rights and express himself, the
further shown in the discussions below, the requested matters, even if denied, would not relieve Cadet 1
cadet should be capable of doing so.170 In the subsequent case of Wimmer v. Lehman,171 the issue was not
CL Cudia's predicament. If at all, such denial was a harmless procedural error since he was not seriously
access to counsel but the opportunity to have counsel, instead of oneself, examine and cross-examine
prejudiced thereby.
witnesses, make objections, and argue the case during the hearing. Disposing of the case, the U.S. Court of
Appeals for the Fourth Circuit was not persuaded by the argument that an individual of a midshipman's
presumed intelligence, selected because he is expected to be able to care for himself and others, often As to the ostracism in the PMA –
under difficult circumstances, and who has full awareness of what he is facing, with counsel's advice, was
deprived of due process by being required to present his defense in person at an investigatory hearing.
To petitioners, the CRAB considered only biased testimonies and evidence because Special Order No. 1
issued on February 21, 2014, which directed the ostracism of Cadet 1 CL Cudia, left him without any
In the case before Us, while the records are bereft of evidence that Cadet 1 CL Cudia was given the option opportunity, to secure statements of his own witnesses. He could not have access to or approach the cadets
or was able to seek legal advice prior to and/or during the HC hearing, it is indubitable that he was assisted who were present during the trial and who saw the 8-1 voting result. It is argued that the Order directing
by a counsel, a PAO lawyer to be exact, when the CRAB reviewed and reinvestigated the case. The Cadet 1 CL Cudia's ostracism is of doubtful legal validity because the Honor Code unequivocally
requirement of due process is already satisfied since, at the very least, the counsel aided him in the drafting announced: "x x x But by wholeheartedly dismissing the cruel method of ostracizing Honor Code violators,
and filing of the Appeal Memorandum and even acted as an observer who had no right to actively PMA will not have to resort to other humiliating means and shall only have the option to make known
participate in the proceedings (such as conducting the cross-examination). Moreover, not to be missed out among its alumni the names of those who have not sincerely felt remorse for violating the Honor Code."
are the facts that the offense committed by Cadet 1 CL Cudia is not criminal in nature; that the hearings
before the HC and the CRAB were investigative and not adversarial; and that Cadet lCL Cudia's excellent-
academic standing puts him in the best position to look after his own vested interest in the Academy.
On their part, respondents assert that neither the petition nor the petition-in-intervention attached a full text
copy of the alleged Special Order No. 1. In any case, attributing its issuance to PMA is improper and
misplaced because of petitioners' admission that ostracism has been absolutely dismissed as an Academy-
sanctioned activity consistent with the trend in International Humanitarian Law that the PMA has included
in its curriculum. Assuming that said Order was issued, respondents contend that it purely originated from
the cadets themselves, the sole purpose of which was to give a strong voice to the Cadet Corps by
declaring that they did not tolerate Cadet 1 CL Cudia's honor violation and breach of confindentiality of the
HC proceedings.
More importantly, respondents add that it is highly improbable and unlikely that Cadet 1 CL Cudia was
ostracized by his fellow cadets. They manifest that as early as January 22, 2014, he was already transferred
to the Holding Center. The practice of billeting an accused cadet at the Holding Center is provided for in
the Honor Code Handbook. Although within the PMA compound, the Holding Center is off-limits to
cadets who do not have any business to conduct therein. The cadets could not also ostracize him during
mess times since Cadet 1 CL Cudia opted to take his meals at the Holding Center. The circumstances
obtaining when Special Order No. 1 was issued clearly foreclose the possibility that he was ostracized in
common areas accessible to other cadets. He remained in the Holding Center until March 16, 2014 when
he voluntarily left the PMA. Contrary to his claim, guests were also free to visit him in the Holding Center.
However, petitioners swear that Cadet 1 CL Cudia suffered from ostracism in the PMA. The practice was
somehow recognized by respondents in their Consolidated Comment and by PMA Spokesperson Maj.
Flores in a news report. The CHR likewise confirmed the same in its Resolution dated May 22, 2014. For
them, it does not matter where the ostracism order originated from because the PMA appeared to sanction
it even if it came from the cadets themselves. There was a tacit approval of an illegal act. If not, those
cadets responsible for ostracism would have been charged by the PMA officials. Finally, it is claimed that
Cadet 1 CL Cudia did not choose to take his meals at the Holding Center as he was not allowed to leave
the place. Petitioners opine that placing the accused cadet in the Holding Center is inconsistent with his or
her presumed innocence and certainly gives the implication of ostracism.
We agree with respondents. Neither the petition nor the petition-inintervention attached a full text copy or
even a pertinent portion of the alleged Special Order No. 1, which authorized the ostracism of Cadet 1 CL
Cudia. Being hearsay, its existence and contents are of doubtful veracity. Hence, a definite ruling on the
matter can never be granted in this case.
The Court cannot close its eyes though on what appears to be an admission of Cadet 1 CL Mogol during
the CHR hearing that, upon consultation with the entire class, the baron, and the Cadet Conduct Policy
Board, they issued an ostracism order against Cadet 1 CL Cudia.174 While not something new in a military
academy,175 ostracism's continued existence in the modem times should no longer be countenanced. There
are those who argue that the "silence" is a punishment resulting in the loss of private interests, primarily
that of reputation, and that such penalty may render illusory the possibility of vindication by the reviewing
body once found guilty by the HC.176 Furthermore, in Our mind, ostracism practically denies the accused
cadet's protected rights to present witnesses or evidence in his or her behalf and to be presumed innocent
until finally proven otherwise in a proper proceeding.
As to Cadet 1 CL Cudia's stay in the Holding Center, the Court upholds the same. The Honor Code and
Honor System Handbook provides that, in case a cadet has been found guilty by the HC of violating the
Honor Code and has opted not to resign, he or she may stay and wait for the disposition of the case. In such
event, the cadet is not on full-duty status and shall be billeted at the HTG Holding Center.177 Similarly, in
the U.S., the purpose of "Boarders Ward" is to quarter those cadets who are undergoing separation actions.
Permitted to attend classes, the cadet is sequestered , therein until final disposition of the case. In Andrews,
it was opined that the segregation of cadets in the Ward was a proper exercise of the discretionary authority
of Academy officials. It relied on the traditional doctrine that "with respect to decisions made by Army
authorities, 'orderly government requires us to tread lightly on the military domain, with scrupulous regard
for the power and authority of the military establishment to govern its own affairs within the broad
confines of constitutional due process.'" Also, in Birdwell v. Schlesinger, 178 the "administrative
segregation" was held to be a reasonable exercise of military discipline and could not be considered an
invasion of the rights to freedom of speech and freedom of association.
Late and vague decisions –
It is claimed that Cadet 1 CL Cudia was kept in the dark as to the charge against him and the decisions
arrived at by the HC, the CRAB, and the PMA. No written decision was furnished to him, and if any, the
information was unjustly belated and the justifications for the decisions were vague. He had to constantly
seek clarification and queries just to be apprised of what he was confronted with.
Petitioners relate that upon being informed of the "guilty" verdict, Cadet 1 CL Cudia immediately inquired
as to the grounds therefor, but Cadet 1 CL Mogol answered that it is confidential since he would still
appeal the same. By March 11, 2014, Maj. Gen. Lopez informed Cadet 1 CL Cudia that the CRAB already
forwarded their recommendation for his dismissal to the General Headquarters sometime in February-
March 2014. Even then, he received no decision/recommendation on his case, verbally or in writing. The
PMA commencement exercises pushed through with no written decision from the CRAB or the PMA on
his appeal. The letter from the Office of the Adjutant General of the AFP was suspiciously delayed when
the Cudia family received the same only on March 20, 2014. Moreover, it fell short in laying down with
specificity the factual and legal bases used by the CRAB and even by the Office of the Adjutant General.
There remains no proof that the CRAB and the PMA considered the evidence presented by Cadet 1 CL
Cudia, it being uncertain as to what evidence was weighed by the CRAB, whether the same is substantial,
and whether the new evidence submitted by him was ever taken into account.
In refutation, respondents allege the existence of PMA's· practice of orally declaring the HC finding, not
putting it in a written document so as to protect the integrity of the erring cadet and guard the
confidentiality of the HC proceedings pursuant to the Honor System. Further, they aver that a copy of the
report of the CRAB, dated March 10, 2014, was not furnished to Cadet 1 CL Cudia because it was his
parents who filed the appeal, hence, were the ones who were given a copy thereof.
Petitioners' contentions have no leg to stand on. While there is a constitutional mandate stating that "[no]
decision shall be rendered by any court without expressing therein clearly and distinctly the facts and the
law on which it is based,"179 such provision does not apply in Cadet 1 CL Cudia's case. Neither Guzman
nor Andrews require a specific form and content of a decision issued in disciplinary proceedings. The
Honor Code and Honor System Handbook also has no written rule on the matter. Even if the provision
applies, nowhere does it demand that a point-by-point consideration and resolution of the issues raised by
the parties are necessary.180 What counts is that, albeit furnished to him late, Cadet 1 CL Cudia was
informed of how it was decided, with an explanation of the factual and legal reasons that led to the
conclusions of the reviewing body, assuring that it went through the processes of legal reasoning. He was
not left in the dark as to how it was reached and he knows exactly the reasons why he lost, and is able to
pinpoint the possible errors for review.
As to the blind adoption of the HC findings –
Petitioners assert that, conformably with Sections 30 and 31 of C.A. No. 1, only President Aquino as the
Commander-in-Chief has the power to appoint and remove a cadet for a valid/legal cause. The law gives
no authority to the HC as the sole body to determine the guilt or innocence of a cadet. It also does not
empower the PMA to adopt the guilty findings of the HC as a basis for recommending the cadet's
dismissal. In the case of Cadet 1 CL Cudia, it is claimed that the PMA blindly followed the HC's finding of
guilt in terminating his military service.
Further, it is the ministerial duty of the CRAB to conduct a review de nova of all records without requiring
Cadet 1 CL Cudia to submit new evidence if it is physically impossible for him to do so. In their minds,
respondents cannot claim that the CRAB and the PMA thoroughly reviewed the HC recommendation and
heard Cadet lCL Cudia's side. As clearly stated in the letter from the Office of the AFP Adjutant General,
"[in] its report dated March 10, 2014, PMA CRAB sustained the findings and recommendations of the
Honor Committee x x x It also resolved the appeal filed by the subject Cadet." However, the Final
Investigation Report of the CRAB was dated March 23, 2014. While such report states that a report was
submitted to the AFP General Headquarters on March 10, 2014 and that it was only on March 12, 2014
that it was designated as a Fact-Finding Board/Investigating Body, it is unusual that the CRAB would do
the same things twice. This raised a valid and well-grounded suspicion that the CRAB never undertook an
in-depth investigation/review the first time it came out with its report, and the Final Investigation Report
was drafted merely as an afterthought when the lack of written decision was pointed out by petitioners so
as to remedy the apparent lack of due process during the CRAB investigation and review.
Despite the arguments, respondents assure that there was a proper assessment of the procedural and legal
correctness of the guilty verdict against Cadet 1 CL Cudia. They assert that the higher authorities of the
PMA did not merely rely on the findings of the HC, noting that there was also a separate investigation
conducted by the HTG from January 25 to February 7, 2014. Likewise, contrary to the contention of
petitioners that the CRAB continued with the review of the case despite the absence of necessary
documents, the CRAB conducted its own review of the case and even conducted another investigation by
constituting the Fact-Finding Board/Investigating Body. For respondents, petitioners failed to discharge the
burden of proof in showing bad faith on the part of the PMA. In the absence of evidence to the contrary
and considering further that petitioners' allegations are merely self-serving and baseless, good faith on the
part of the PMA' s higher authorities is presumed and should, therefore, prevail.
We agree with respondents.
The Honor Committee, acting on behalf of the Cadet Corps, has a limited role of investigating and
determining whether or not the alleged offender has actually violated the Honor Code.181 It is given the
responsibility of administering the Honor Code and, in case of breach, its task is entirely investigative,
examining in the first instance a suspected violation. As a means of encouraging self-discipline, without
ceding to it any authority to make final adjudications, the Academy has assigned it the function of
identifying suspected violators.182 Contrary to petitioners' assertion, the HC does not have the authority to
order the separation of a cadet from the Academy. The results of its proceedings are purely
recommendatory and have no binding effect. The HC determination is somewhat like an indictment, an
allegation, which, in Cadet 1 CL Cudia's case, the PMA-CRAB investigated de novo.183 In the U.S., it was
even opined that due process safeguards do not actually apply at the Honor Committee level because it is
only a "charging body whose decisions had no effect other than to initiate de nova proceedings before a
Board of Officers."184
Granting, for argument's sake, that the HC is covered by the due process clause and that irregularities in its
proceedings were in fact committed, still, We cannot rule for petitioners. It is not required that procedural
due process be afforded at every stage of developing disciplinary action. What is required is that an
adequate hearing be held before the final act of dismissing a cadet from the military academy.185 In the case
of Cadet 1 CL Cudia, the OIC of HC, the SJA, the Commandant of Cadets, and the PMA Superintendent
reviewed the HC findings. A separate investigation was also conducted by the HTG. Then, upon the
directive of the AFP-GHQ to reinvestigate the case, a review was conducted by the CRAB. Finally, a Fact-
Finding Board/Investigating Body composed of the CRAB members and the PMA senior officers was
constituted to conduct a deliberate investigation of the case. The Board/Body actually held hearings on
March 12, 13, 14 and 20, 2014. Instead of commendation, petitioners find it "unusual" that the CRAB
would do the same things twice and suspect that it never undertook an in-depth investigation/review the
first time it came out with its report. Such assertion is mere conjecture that deserves scant consideration.
As to the dismissal proceedings as sham trial –
According to petitioners, the proceedings before the HC were a sham. The people behind Cadet ICL
Cudia's charge, investigation, and conviction were actually the ones who had the intent to deceive and who
took advantage of the situation. Cadet 1 CL Raguindin, who was a senior HC member and was the second
in rank to Cadet 1 CL Cudia in the Navy cadet 1 CL, was part of the team which conducted the preliminary
investigation. Also, Cadet I CL Mogol, the HC Chairman, previously charged Cadet 1 CL Cudia with
honor violation allegedly for cheating (particularly, conniving with and tutoring his fellow cadets on a
difficult topic by giving solutions to a retake exam) but the charge was dismissed for lack of merit. Even if
he was a non-voting member, he was in a position of influence and authority. Thus, it would be a futile
exercise for Cadet 1 CL Cudia to resort to the procedure for the removal of HC members. 186
Further, no sufficient prior notice of the scheduled CRAB hearing was given to Cadet I CL Cudia, his
family, or his PAO counsel. During one of her visits to him in the Holding Center, petitioner-intervenor
was advised to convince his son to resign and immediately leave the PMA. Brig. Gen. Costales, who later
became the CRAB Head, also categorically uttered to Annavee: "Your brother, he lied!" The CRAB
conferences were merely used to formalize his dismissal and the PMA never really intended to hear his
side. For petitioners, these are manifestations of PMA's clear resolve to dismiss him no matter what.
For their part, respondents contend that the CllR's allegation that Maj. Hindang acted in obvious bad faith
and that he failed to discharge his duty to be a good father of cadets when he "paved the road to [Cadet 1
CL Cudia's] sham trial by the Honor Committee" is an unfounded accusation. They note that when Maj.
Hindang was given the DR of Cadet 1 CL Cudia, he revoked the penalty awarded because of his
explanation. However, all revocations of awarded penalties are subject to the review of the STO.
Therefore, it was at the instance of Maj. Leander and the established procedure followed at the PMA that
Maj. Hindang was prompted to investigate the circumstances surrounding Cadet 1 CL Cudia's tardiness.
Respondents add that bad faith cannot likewise be imputed against Maj. Hindang by referring to the actions
taken by Maj. Jekyll Dulawan, the CTO of Cadets 1 CL Narciso and Arcangel who also arrived late for
their next class. Unlike the other cadets, Cadet 1 CL Cudia did not admit his being late and effectively
evaded responsibility by ascribing his tardiness to Dr. Costales.
As to the CHR' s finding that Cadet 1 CL Mogol was likewise "in bad faith and determined to destroy
[Cadet 1 CL] Cudia, for reasons of his own" because the former previously reported the latter for an honor
violation in November 2013, respondents argue that the bias ascribed against him is groundless as there is
failure to note that Cadet 1 CL Mogol was a non-voting member of the HC. Further, he cannot be faulted
for reporting a possible honor violation since he is the HC Chairman and nothing less is expected of him.
Respondents emphasize that the representatives of the HC are elected from each company, while the HC
Chairman is elected by secret ballot from the incoming first class representatives. Thus, if Cadet 1 CL
Cu'dia believed that there was bias against him, he should have resorted to the procedure for the removal of
HC members provided for in the Honor Code Handbook.
Finally, respondents declare that there is no reason or ill-motive on the part of the PMA to prevent Cadet 1
CL Cudia from graduating because the Academy does not stand to gain anything from his dismissal. On
the contrary, in view of his academic standing, the separation militates against PMA' s mission to produce
outstanding, honorable, and exceptional cadets.
The Court differs with petitioners.
Partiality, like fraudulent intent, can never be presumed. Absent some showing of actual bias, petitioners'
allegations do not hold water. The mere imputation of ill-motive without proof is speculative at best.
Kolesa teaches us that to sustain the challenge, specific evidence must be presented to overcome
a presumption of honesty and integrity in those serving as adjudicators; and it must convince that, under a
realistic appraisal of psychological tendencies and human weaknesses, conferring investigative and
adjudicative powers on the same individual poses such a risk of actual bias or prejudgment that the practice
must be forbidden if the guarantee of due process is to be implemented.187
Although a CTO like Maj. Hindang must decide whether demerits are to be awarded, he is not an
adversary of the cadet but an educator who shares an identity of interest with the cadet, whom he counsels
from time to time as a future leader.188 When the occasion calls for it, cadets may be questioned as to the
accuracy or completeness of a submitted work. A particular point or issue may be clarified. In this case, the
question asked of Cadet 1 CL Cudia concerning his being late in class is proper, since there is evidence
indicating that a breach of regulation may have occurred and there is reasonable cause to believe that he
was involved in the breach of regulations.189
For lack of actual proof of bad faith or ill-motive, the Court shall rely on the non-toleration clause of the
Honor Code, i.e., "We do not tolerate those who violate the Code." Cadets are reminded that they are
charged with a tremendous duty far more superior to their personal feeling or friendship.190 They must
learn to help others by guiding them to accept the truth and do what is right, rather than tolerating actions
against truth and justice.191 Likewise, cadets are presumed to be characteristically honorable; they cannot
overlook or arbitrarily ignore the dishonorable action of their peers, seniors, or subordinates.192 These are
what Cadet 1 CL Mogol exactly did, although he was later proven to have erred in his accusation. Note that
even the Honor Code and Honor System Handbook recognizes that interpretation of one's honor is
generally subjective.193
Moreover, assuming, for the sake of argument, that Cadets 1 CL' Raguindin and Mogol as well as Brig.
Gen. Costales have an axe to grind against Cadet 1 CL Cudia and were bent on causing, no matter what,
the latter's downfall, their nefarious conduct would still be insignificant. This is so since the HC (both the
preliminary and formal investigation), the CRAB, and the Fact-Finding Board/Investigating Body are
collegial bodies. Hence, the claim that the proceedings/hearings conducted were merely a farce because the
three personalities participated therein is tantamount to implying the existence of a conspiracy, distrusting
the competence, independence, and integrity of the other members who constituted the majority. Again, in
the absence of specifics and substantial evidence, the Court cannot easily give credence to this baseless
insinuation.
As to the HC executive session/chambering –
Petitioners narrate that there was an irregular administrative hearing in the case of Cadet 1 CL Cudia
because two voting rounds took place. After the result of the secret balloting, Cadet 1 CL Mogol ordered
the voting members to go to a room without the cadet recorders. Therein, the lone dissenter, Cadet lCL
Lagura, was asked to explain his "not guilty" vote. Pressured to change his vote, he was made to cast a new
one finding Cadet 1 CL Cudia guilty. The original ballot was discarded and replaced. There was no record
of the change in vote from 8-1 to 9-0 that was mentioned in the HC formal report.
The Affidavit of Commander Junjie B. Tabuada executed on March 6, 2014 was submitted by petitioners
since he purportedly recalled Cadet 1 CL Lagura telling him that he was pressured to change his "not
guilty" vote after the voting members were "chambered." In the sworn statement, Commander Tabuada
said:
1. That after CDT lCL CUDIA [was] convicted for honor violation, I [cannot] remember
exactly the date but sometime in the morning of 23rd or 24th of January 2014, I was in my
office filling up forms for the renewal of my passport, CDT 1CL LAGURA entered and had
business with my staff;
2. When he was about to leave I called him. "Lags, halika muna dito," and he approached me
and I let him sit down on the chair in front of my table. I told and asked him, "Talagang nadali
si Cudia ah ... ano ha ang nangyari? Mag-Tagalog or mag-Bisaya ka." He replied, "Talagang
NOT GUILTY ang vote ko sa kanya sir", and I asked him, "Oh, bakit naging guilty di ha pag
may isang nag NOT GUILTY, abswelto na? He replied "Chinamber ako sir, bale pinapa-justify
kung bakit NOT GUILTY vote ko, at na-pressure din ako sir kaya binago ko, sir." So, I told
him, "Sayang sya, matalino at mabait pa naman" and he replied "oo nga sir". After that
conversation, I let him go.194
It is claimed that the HC gravely abused its discretion when it committed voting manipulation since, under
the rules, it is required to have a unanimous nine (9) votes finding an accused cadet guilty. There is nothing
in the procedure that permits the HC Chairman to order the "chambering" of a member who voted contrary
to the majority and subjects him or her to reconsider in order to reflect a unanimous vote. Neither is there
an order from the Chief of Staff or the President sanctioning the HC procedure or approving any change
therein pursuant to Sections 30 and 31 of C.A. No. 1. The HC, the CRAB, and the PMA violated their own
rules and principles as embodied in the Honor Code. Being a clear deviation from the established
procedures, the second deliberation should be considered null and void.
Petitioners further contend that the requirement of unanimous vote involves a substantive right which
cannot be unceremoniously changed without a corresponding amendment/revision in the Honor Code and
Honor System Handbook. In their view, "chambering" totally defeats the purpose of voting by secret ballot
as it glaringly destroys the very essence and philosophy behind the provisions of the Honor System, which
is to ensure that the voting member is free to vote what is in his or her heart and mind and that no one can
pressure or persuade another to change his or her vote. They suggest that if one voting member acquits an
accused cadet who is obviously guilty of the offense, the solution is to remove him or her from the HC
through the vote of non-confidence as provided for in the Honor Code.195 Anent the above arguments,
respondents contend that a distinction must be made between the concepts of the Honor Code and the
Honor System. According to them, the former sets the standard for a cadet's, minimum ethical and moral
behavior and does not change, while the latter is a set of rules for the conduct of the observance and
implementation of the· Honor Code and may undergo necessary adjustments as may be warranted by the
incumbent members of the HC in order to be more responsive to the moral training and character
development of the cadets. The HC may provide guidelines when the Honor System can be used to
supplement regulations. This being so, the voting process is continuously subject to change.
Respondents note that, historically, a non-unanimous guilty verdict automatically acquits a cadet from the
charge of Honor violation. The voting members only write either "guilty" or "not guilty" in the voting
sheets without stating their name or their justification. However, this situation drew criticisms since there
were instances where a reported cadet already admitted his honor violation but was acquitted due to the
lone vote of a sympathetic voting member.
In the case of Cadet 1 CL Cudia, the HC adopted an existing practice that should the voting result in 7-2 or
8-1 the HC would automatically sanction a jury type of discussion called "executive session" or
"chambering," which is intended to elicit the explanation and insights of the voting member/s. This
prevents the tyranny of the minority or lone dissenter from prevailing over the manifest proof of guilt. The
assailed voting practice has been adopted and widely accepted by the PMA Siklab Diwa Class of 2014
since their first year in the Academy. The allegations of conspiracy and sham trial are, therefore, negated
by the fact that such practice was in place and applied to all cases of honor violations, not solely to the case
of Cadet 1CL Cudia.
It is emphasized by respondents that any decision to change vote rests solely on the personal conviction of
the dissenter/s, without any compulsion from the other voting members. There can also be no pressuring to
change one's vote to speak of since a vote may only be considered as final when the Presiding Officer has
affixed his signature.
To debunk Commander Tabuada's statements, respondents raise the argument that the Fact-Finding
Board/Investigating Body summoned Cadet 1 CL Lagura for inquiry. Aside from his oral testimony made
under oath, he submitted to the Board/Body an affidavit explaining that:
11. Sometime on 23rd or 24th of January 2014, I went to the Department of Naval Warfare to ask
permission if it is possible not to attend the Navy duty for the reason that I will be attending our baseball
game outside the Academy.
12. After I was permitted not to attend my Navy Duty and when I was about to exit out of the Office, CDR
JUNJIE B T ABU ADA PN, our Head Department Naval Warfare Officer, called my attention. I
approached him and he said: "Talagang nadali si Cudia ah. Ano ba talaga ang nangyari?" At first, I was
hesitant to answer because of the confidentiality of the Honor Committee proceedings. He again said:
"Wag kang mag-alala, atin, atin lang ito, alam ko naman na bawal magsabi." Then I answered: "Ako yung
isang not guilty Sir. Kaya [yung] Presiding Officer nagsabi na pumunta muna kami sa Chamber. Nung
nasa chamber kami, nagsalita [yung] mga nagvote ng Guilty tapos isa-isa nagsabi kung bakit ang boto nila
Guilty. Nung pakinggan ko, eh naliwanagan ako. Pinalitan ko yung boto ko from Not Guilty to Guilty Sir."
He replied: "Sayang si Cudia ano?" And I said: "Oo nga sir, [s]ayang si Cudia, mabait pa naman at
matalino."196
Cadet 1 CL Lagura restated the above in the Counter-Affidavit executed on March 12, 2014, which he
submitted before the CHR wherein he attested to the following:
3. I was chosen to be a voting member of the Honor Committee for Honor Code violation
committed by Cadet Cudia, for "lying". As a voting member, we are the one who assess or
investigate the case whether the reported Cadet is Guilty for his actions or not.
4. I was the only one who INITIALLY voted "NOT GUILTY" among the nine (9) voting
members of the Honor Committee in the case of Cdt Cudia for Lying.
5. I initially voted "NOT GUILTY" for the reason that after the proceedings and before the
presiding Officer told the members to vote, I was confused of the case of Cadet Cudia. I have
gathered some facts from the investigation to make my decision but for me it is not yet enough
to give my verdict of guilty to Cdt Cudia so I decided to vote "NOT GUILTY" with a
reservation in my mind that we will still be discussing our verdicts if we will arrive at 8-1 or 7-
2. Thus, I can still change my vote if I may be enlightened with the other's justifications.
6. After the votes were collected, the Presiding Officer told us that the vote is 8 for guilty and 1
for not guilty. By way of practice and as I predicted, we were told to go inside the anteroom for
executive meeting and to discuss our respective justifications. I have been a member for two (2)
years and the voting committee will always go for executive meeting whenever it will meet 8-1
or 7-2 votes.
7. I listened to them and they listened to me, then I saw things that enlightened my confusions
that time. I gave a thumbs-up sign and asked for another sheet of voting paper. I then changed
my vote from "NOT GUILTY" to "GUILTY" and the voting members of the Honor Committee
came up with the final vote of nine (9) votes for guilty and zero (0) votes for not guilty.
9. Cdt Cudia was called inside the courtroom and told that the verdict was GUILTY of LYING.
After that, all persons inside the courtroom went back to barracks.
10. Right after I changed to sleeping uniform, I was approached by Cdt Jocson and Cdt Cudia,
inquiring and said: "Bakit ka naman nagpalit ng boto? ., I answered: "Nasa process yan, may
mali talaga sa rason mo." They also asked who were inside the Chamber and I mentioned only
Cdt Arlegui and Cdt Mogol. That was the last time that Cdt Cudia and Cdt Jocson talked to me.
11. Sometime on 23rd or 24th of January 2014, I went to the Department of Naval Warfare to
asked (sic) permission if it is possible not to attend the Navy duty for the reason that I will be
attending our baseball game outside the Academy.
12. After I was permitted not to attend my Navy Duty and when I was about to exit out of the
Office, CDR JUNJIE B TABUADA PN, our Head Department Naval Warfare Officer, called
my attention. I approached him and he said: "Talagang nadali si Cudia ah. Ano ba talaga ang
nangyari?" At first, I was hesitant to answer because of the confidentiality of the Honor
Committee proceedings. He again said: "Wag kang mag-alala, atin, atin lang ito, alam ko
naman na bawal magsabi. " Then I answered: "Ako yung isang not guilty Sir. Kaya [yung}
Presiding Officer nagsabi na pumunta muna kami sa Chamher. Nung nasa chamber kami,
nagsalita [yung] mga nagvote ng Guilty tapos isa-isa nagsabi kung bakit ang boto nila Guilty.
Nung pakinggan ko, eh naliwanagan aka. Pinalitan ko yung boto ko from Not Guilty to Guilty
Sir. " He replied: "Sayang si Cudia ano?" And I said: "Oo nga sir, [s]ayang si Cudia, mabait pa
naman at matalino. "197
Still not to be outdone, petitioners argue that the very fact that Cadet 1 CL Lagura, as the lone dissenter,
was made to explain in the presence of other HC members, who were in disagreement with him, gives a
semblance of intimidation, force, or pressure. For them, the records of the HC proceedings, which were not
presented assuming they actually exist, could have been the best way to ensure that he was free to express
his views, reject the opinion of the majority, and stick to his decision. Also, it was pointed out that Cadet 1
CL Lagura failed to clearly explain in his affidavit why he initially found Cadet 1 CL Cudia "not guilty"
and what made him change his mind. His use of general statements like he "was confused of the case " and
"saw things that enlightened my confusions " could hardly suffice to establish why he changed his vote.
Finally, petitioners note the admission of ·Cadet 1 CL Lagura during the CHR investigation that he was the
only one who was given another ballot sheet while in the chamber and that he accomplished it in the
barracks which he only submitted the following day. However, as the CHR found, the announcement of the
9-0 vote was done immediately after the HC came out from the chamber and before Cadet 1 CL Lagura
submitted his accomplished ballot sheet.
We rule for respondents.
As to the manner of voting by the HC members, the Honor Code tersely provides:
After a thorough discussion and deliberation, the presiding member of the Board will call for the members
to vote whether the accused is GUILTY or NOT GUILTY. A unanimous vote (9 votes) of GUILTY
decides that a cadet is found guilty of violating the Honor Code.198
From the above-quoted provision, it readily appears that the HC practice of conducting "executive session"
or "chambering" is not at all prohibited. The HC is given leeway on the voting procedures in' actual cases
taking into account the exigency of the times. What is important is that, in the end, there must be a
unanimous nine votes in order to hold a cadet guilty of violating the Honor Code.
Granting, for argument's sake, that the HC violated its written procedure, 199 We still rule that there is
nothing inherently wrong with the practice of "chambering" considering that the presence of intimidation
or force cannot automatically be inferred therefrom. The essence of secret balloting and the freedom to
vote based on what is in the heart and mind of the voting member is not necessarily diluted by the fact that
a second/final voting was conducted. As explained by Cadet 1CL Mogol before the CRAB:
13. x x x [The] dissenting voter would have to explain his side and insights regarding the case at hand. The
other members, on the other hand, would be given the chance to explain their votes as well as their insights
to the dissenting voter. The decision to change the vote of the dissenting voter rests solely on his personal
conviction. Thus, if he [or she] opted not to change his/her vote despite the discussion, his [or her] vote is
accorded respect by the Honor Committee.200
It is elementary that intimidation or force is never presumed. Mere allegation is definitely not
evidence.1âwphi1 It must be substantiated and proved because a person is presumed to be innocent of a
crime or wrong and that official duty has been regularly performed.201
The oral and written statements of Cadet 1 CL Lagura should settle the issue. Before the Fact-Finding
Board/Investigating Body and the CHR, he consistently denied that he was pressured by the other voting
members of the HC. His representation must be accepted as it is regardless of whether he has satisfactorily
elaborated his decision to change his vote. Being the one who was "chambered," he is more credible to
clarify the issue. In case of doubt, We have to rely on the faith that Cadet 1 CL Lagura observed the Honor
Code, which clearly states that every cadet must be his or her own Final' Authority in honor; that he or she
should not let other cadets dictate on him or her their sense of honor. 202 Moreover, the Code implies that
any person can have confidence that a cadet and any graduate of the PMA will be fair and just in dealing
with him; that his actions, words and ways are sincere and true. 203
As to the other alleged "irregularities" committed such as not putting on record the initial/first voting and
Cadet 1CL Lagura's bringing of his ballot sheet to and accomplishing it in the barracks, the Court shall no
longer dwell on the same for being harmless procedural errors that do not materially affect the validity of
the HC proceedings.
Cadet 1 CL Cudia 's alleged untruthful statements
Petitioners insist that Cadet 1 CL Cudia did not lie. According to them, there is no clear time reference as
to when was the actual dismissal or what was the exact time of dismissal - whether it should be the
dismissal inside the room or the dismissal after the section grade was given by Dr. Costales -in the minds
of Cadet 1 CL Cudia, Maj. Hindang, and the HC investigators and voting members. They claim that during
long examinations, the time of dismissal was usually five minutes before the class was set to end and the
protocol of dismissing the class 15 minutes earlier was not observed. When Maj. Hindang stated in
accusatory language that Cadet 1 CL Cudia perverted the truth by stating that OR432 class ended at
1500H, he did not state what was the true time of dismissal. He did not mention whether the truth he was
relying on was 5 or 15 minutes before the scheduled end of class.
It is also averred that Cadet 1 CL Cudia's only business was to ask Dr. Costales a query such that his
business was already finished as soon as she gave an answer. However, a new business was initiated by Dr.
Costales, which is, Cadet 1 CL Cudia must stay and wait for the section grade. At that point in time, he was
no longer in control of the circumstances. Petitioners claim that Dr. Costales never categorically stated that
Cadet lCL Cudia was lying. She recognized the confusion. Her text messages to him clarified his alleged
violation. Also, the CHR noted during its investigation that she could not exactly recall what happened in
her class on November 14, 2013.
Furthermore, petitioners reasoned out that when respondents stated that ENG412 class started at 3:05 p.m.,
it proves that Cadet 1 CL Cudia was obviously not late. If, as indicated in his Delinquency Report, he was
late two (2) minutes in his 1500-1600H class in ENG 412, he must have arrived 3:02 p.m. Respondents,
however, claim that the class started at 3:05 p.m. Thus, Cadet 1 CL Cudia was not late.
Relative to his explanation to the delinquency report, petitioners were of the view that what appears to
have caused confusion in the minds of respondents is just a matter of semantics; that the entire incident
was a product of inaccuracy, not lying. It is malicious for them to insinuate that Cadet 1 CL Cudia
purposely used incorrect language to hide the truth. Citing Merriam Webster's Dictionary, petitioners argue
that "dismiss" means to permit or cause to leave, while "class" refers to a body of students meeting
regularly to study the same subject. According to them, these two words do not have definite and precise
meanings but are generic terms. Other than the words "class" and "dismiss" used by Cadet 1 CL Cudia,
which may actually be used in their generic sense, there is nothing deceiving about what he said. Thus, the
answer he chose might be wrong or not correct, but it is not false or not true.
For petitioners, Cadet lCL Cudia's explanations are evidently truthful and with no intent to deceive or
mislead. He did not manipulate any fact and was truthful of his explanation. His .. statements were clear
and unambiguous but were given a narrow-minded interpretation. Even the Honor Code acknowledges that
"[e]xperience demonstrates that human communication is imperfect at best, and some actions are often
misinterpreted."
Lastly, petitioners contend that Cadet 1 CL Cudia's transcript of records reflects not only his outstanding
academic performance but proves his good conduct during his four-year stay in the Academy. He has
above-average grades in Conduct, with grades ranging from 96 to 100 in Conduct I to XI. His propensity to
lie is, therefore, far from the truth.
On the other hand, respondents were equally adamant to contend that Cadet 1 CL Cudia was obviously
quibbling, which, in the military parlance, is tantamount to lying. He fell short in telling a simple truth. He
lied by making untruthful statements in his written explanation. Respondents want Us to consider the
following:
First, their OR432 class was not dismissed late. During the formal investigation, Dr. Costales testified that
a class is dismissed as long as the instructor is not there and the bell has rung. In cases of lesson
examinations (LE), cadets are dismissed from the time they have answered their respective LEs. Here, as
Cadet Cudia stated in his Request for Reconsideration of Meted Punishment, "We had an LE that day (14
November 2013) in OR432 class. When the first bell rang (1455), I stood up, reviewed my paper and
submitted it to my instructor, Ms. Costales. xxx" Clearly, at the time Cadet Cudia submitted his papers, he
was already considered dismissed. Thus, he cannot claim that his [OR432] class ended at 3:00 in the
afternoon (1500H) or "a bit late."
Second, Cadet Cudia was in control of the circumstances leading to his tardiness. After submitting his
paper, Cadet Cudia is free to leave and attend his next class. However, he initiated a conversation with Dr.
Costales regarding their grades. He was not under instruction by Dr. Costales to stay beyond the period of
her class.
Furthermore, during the investigation of the Fact-Finding Board/Investigating Body, Dr. Costales clarified
her statements in her written explanation. She explained that the "instruction to wait" is a response to Cadet
Cudia' s request and that it was not her initiated instruction. Clearly, there was no directive from Dr.
Costales for Cadet Cudia and the other cadets to stay. On the contrary, it was them who wanted to meet
with the instructor. Third, contrary to Cadet Cudia's explanation, his subsequent class, ENG412, did not
exactly start at 3:00 in the afternoon (1500H). In the informal review conducted by the HTG to check the
findings of the HC, Professor Berong confirmed that her English class started as scheduled (3:05 in the
afternoon, or 1505H) and not earlier. Cadet 1 CL Barrawed, the acting class marcher of ENG412 also
testified that their class started as scheduled (3 :05 in the afternoon, or 1505) and not earlier. 204
Respondents were unimpressed with the excuse that Cadet 1 CL Cudia had no intention to mislead or
deceive but merely used wrong and unfitting words in his explanations. For them, considering his
academic standing, it is highly improbable that he used incorrect language to justify his mistake.
Respondents' arguments are tenable.
The issue of whether Cadet 1 CL Cudia committed lying is an issue of fact. Unfortunately for petitioners,
the Court, not being a trier of facts, cannot pass upon factual matters as it is not duty-bound to analyze and
weigh again the evidence considered in the proceedings below. Moreover, We reiterate the long standing
rule that factual findings of administrative tribunals are ordinarily accorded respect if not finality by the
Court. In this case, as shown in the previous discussions, there is no evidence that the findings of the
investigating and reviewing bodies below are not supported by evidence or vitiated by fraud, imposition or
collusion; that the procedure which led to the findings is irregular; that palpable errors were committed; or
that a grave abuse of discretion, arbitrariness, or capriciousness is manifest. With respect to the core issue
of whether lying is present in this case, all investigating and reviewing bodies are in consonance in holding
that Cadet 1 CL Cudia in truth and in fact lied.
For purposes of emphasis though, We shall supplement some points.
As succinctly worded, the Honor Code of the Cadet Corps Armed Forces of the Philippines (CCAFP)
states: "We, the Cadets, do not lie, cheat, steal, nor tolerate among us those who do. "
The First Tenet of the Honor-Code is "We do not lie. " Cadets violate the Honor Code by lying if they
make an oral or written statement which is contrary to what is true or use doubtful information with the
intent to deceive or mislead.205 It is expected that every cadet's word is accepted without challenge on its
truthfulness; that it is true without qualification; and that the cadets must answer directly, completely and
truthfully even though the answer may result in punitive action under the CCPB and CCAFPR. 206
To refresh, in his Explanation of Report dated December 8, 2013, Cadet 1 CL Cudia justified that: "I came
directly from OR432 Class. We were dismissed a bit late by our instructor Sir." Subsequently, in his
Request for Reconsideration of Meted Punishment to Maj. Leander, he reasoned out as follows:
I strongly believe that I am not in control of the circumstances, our 4th period class ended 1500H and our
5th period class, which is ENG412, started 1500H also. Immediately after 4t period class, I went to my
next class without any intention of being late Sir.207
In this case, the Court agrees with respondents that Cadet 1 CL Cudia committed quibbling; hence, he lied
in violation of the Honor Code.
Following an Honor Reference Handbook, the term "Quibbling" has been defined in one U.S. case as
follows:
A person can easily create a false impression in the mind of his listener by cleverly wording what he says,
omitting relevant facts, or telling a partial truth. When he knowingly does so with the intent to deceive or
mislead, he is quibbling. Because it is an intentional deception, quibbling is a form of lying.208
The above definition can be applied in the instant case. Here, instead of directly and completely telling the
cause of his being late in the ENG412 class of Prof. Berong, Cadet 1 CL Cudia chose to omit relevant
facts, thereby, telling a half-truth.
The two elements that must be presented for a cadet to have committed an honor violation are:
1. The act and/or omission, and
2. The intent pertinent to it.
Intent does not only refer to the intent to violate the Honor Code, but intent to commit or omit the act
itself.209
The basic questions a cadet must always seek to answer unequivocally are:
1. Do I intend to deceive?
2. Do I intend to take undue advantage?
If a cadet can answer NO to BOTH questions, he or she is doing the honorable thing. 210
Intent, being a state of mind, is rarely susceptible of direct proof, but must ordinarily be inferred from the
facts, and therefore, can only be proved by unguarded expressions, conduct and circumstances
generally.211 In this case, Cadet 1 CL Cudia's intent to deceive is manifested from the very act of
capitalizing on the use of the words "dismiss" and "class." The truth of the matter is that the ordinary usage
of these two terms, in the context of an educational institution, does not correspond to what Cadet 1 CL
Cudia is trying to make it appear. In that sense, the words are not generic and have definite and precise
meaning.
By no stretch of the imagination can Cadets 1 CL Cudia, Miranda, Arcangel, and Narciso already
constitute a "class." The Court cannot agree that such term includes "every transaction and communication
a teacher does with her students." Clearly, it does not take too much intelligence to conclude that Cadet 1
CL Cudia should have been accurate by pinpointing who were with him when he was late in the next class.
His deceptive explanation is made more obvious when compared with what Cadets 1 CL Archangel and
Narciso wrote in their DR explanation, which was: "We approached our instructor after our class." 212
Further, it is unimportant whether the time of dismissal on November 14, 2013 was five or fifteen minutes
ahead of the scheduled end of class. Worth noting is that even Dr. Costales, who stood as a witness for
Cadet 1 CL Cudia, consistently admitted before the HC, the Fact-Finding Board/Investigating Body, and
the CHR that he was already dismissed when he passed his LE paper. 213 During the hearing of the
Board/Body, she also declared that she merely responded to his request to see the results of the UE 1 and
that she had reservations on the phrases "under my instruction" and "dismissed a bit late" used in his letter
of explanation to the HC. In addition, Dr. Costales manifested her view before the CHR that the act of
Cadet 1 CL Cudia of inquiring about his grade outside their classroom after he submitted his LE paper is
not part of the class time because the consultation, being cadet-initiated, is voluntary.214 Assuming, for the
sake of argument, that a new business was initiated by Dr. Costales when Cadet 1 CL Cudia was asked to
stay and wait for the section grade, still, this does not acquit him. Given such situation, a responsible cadet
who is fully aware of the time constraint has the last say, that is, to politely decline the invitation and
immediately go to the next class. This was not done by Cadet 1 CL Cudia. Thus, it cannot be said that he
already lost control over the circumstances.
It is apparent, therefore, that Cadet 1 CL Cudia cunningly chose words which led to confusion in the minds
of respondents and eventually commenced the HC inquiry. His case is not just a matter of semantics and a
product of plain and simple inaccuracy. There is manipulation of facts and presentation of untruthful
explanation constitutive of Honor Code violation.
Evidence of prior good conduct cannot clear Cadet 1 CL Cudia .. While his Transcript of Records (TOR)
may reflect not only his outstanding academic performance but his excellent grade in subjects on Conduct
during his four-year stay in the PMA,215 it does not necessarily follow that he is innocent of the offense
charged. It is enough to say that "evidence that one did or did not do a certain thing at one time is not
admissible to prove that he did or did not do the same or similar thing at another time." 216 While the TOR
may be received to prove his identity or habit as an exceptional PMA student, it does not show his specific
intent, plan, or scheme as cadet accused of committing a specific Honor Code violation.
Dismissal from the PMA as unjust and cruel punishment
Respondents insist that violation of the Honor Code warrants separation of the guilty cadet from the cadet
corps. Under the Cadet Corps Armed Forces of the Philippines Regulation (CCAFPR), a violation of the
Cadet Honor Code is considered Grave (Class 1) delinquency which merits a recommendation for a cadet's
dismissal from the PMA Superintendent. The same is likewise clear from the Honor Code and Honor
System Handbook. Cadet 1 CL Cudia is, therefore, presumed to know that the Honor Code does not
accommodate a gradation or degree of offenses. There is no difference between a little lie and a huge
falsehood. Respondents emphasize that the Honor Code has always been considered as an absolute
yardstick against which cadets have measured themselves ever since the PMA began and that the Honor
Code and System seek to assure that only those who are able to meet the high standards of integrity and
honor are produced by the PMA. As held in Andrews, it is constitutionally permissible for the military "to
set and enforce uncommonly high standards of conduct and ethics. " Thus, in violating the Honor Code,
Cadet 1 CL Cudia forfeits his privilege to graduate from the PMA.
On their part, petitioners concede that if it is proven that a cadet breached the Honor Code, the offense
warrants his or her dismissal since such a policy may be the only means to maintain and uphold the spirit
of integrity in the military.217 They maintain though that in Cadet 1 CL Cudia's case there is no need to
distinguish between a "little lie" and a "huge falsehood" since he did not lie at all. Absent any intent to
deceive and to take undue advantage, the penalty imposed on him is considered as unjust and cruel. Under
the circumstances obtaining in this case, the penalty of dismissal is not commensurate to the fact that he is
a graduating cadet with honors and what he allegedly committed does not amount to an academic
deficiency or an intentional and flagrant violation of the PMA non-academic rules and regulations. Citing
Non, petitioners argue that the penalty imposed must be proportionate to the offense. Further, lsabelo, Jr. is
squarely applicable to the facts of the case. Cadet 1 CL Cudia was deprived of his right to education, the
only means by which he may have a secure life and future.
Considering Our finding that Cadet 1 CL Cudia in truth and in fact lied and his acceptance that violation of
the Honor Code warrants the ultimate penalty of dismissal from the PMA, there is actually no more dispute
to resolve. Indeed, the sanction is clearly set forth and Cadet 1 CL Cudia, by contract, risked this when he
entered the Academy.218 We adopt the ruling in Andrews219 wherein it was held that, while the penalty is
severe, it is nevertheless reasonable and not arbitrary, and, therefore, not in violation of due process. It
quoted the disposition of the district court, thus:
The fact that a cadet will be separated from the Academy upon a finding that he has violated the Honor
Code is known to all cadets even prior to the beginning of their careers there. The finding of a Code
violation by hypothesis includes a finding of scienter on the part of the offender. While separation is
admittedly a drastic and tragic consequence of a cadet's transgression, it is not an unconstitutionally
arbitrary one, but rather a reasonable albeit severe method of preventing men who have suffered ethical
lapses from becoming career officers. That a policy of admonitions or lesser penalties for single violations
might be more compassionate --or even more effective in achieving the intended result --is quite
immaterial to the question of whether the harsher penalty violates due process. 220
Nature of the CHR Findings
Petitioners contend that the PMA turned a blind eye on the CHR's recommendations. The CHR, they note,
is a constitutional body mandated by the 1987 Constitution to investigate all forms of human rights
violations involving civil and political rights, and to conduct investigative monitoring of economic, social,
and cultural rights, particularly of vulnerable sectors of society. Further, it was contended that the results of
CHR's investigation and recommendations are so persuasive that this Court, on several occasions like in
the cases of Cruz v. Sec. of Environment & Natural Resources221 and Ang Ladlad LGBT Party v.
Commission on Elections,222 gave its findings serious consideration. It is not, therefore, too late for the
Court to hear what an independent and unbiased fact-finding body has to say on the case.
In opposition, respondents assert that Simon, Jr. v. Commission on Human Rights223 ruled that the CHR is
merely a recommendatory body that is not empowered to arrive at a conclusive determination of any
controversy.
We are in accord with respondents.
The findings of fact and the conclusions of law of the CHR are merely recommendatory and, therefore, not
binding to this Court. The reason is that the CHR's constitutional mandate extends only to the investigation
of all forms of human rights violations involving civil and political rights.224 As held in Cariño v.
Commission on Human Rights225and a number of subsequent cases,226 the CHR is only a fact-finding body,
not a court of justice or a quasi-judicial agency. It is not empowered to adjudicate claims on the merits or
settle actual case or controversies. The power to investigate is not the same as adjudication:
The most that may be conceded to the Commission in the way of adjudicative power is that it may
investigate, i.e., receive evidence and make findings of fact as regards claimed human rights violations
involving civil and political rights. But fact-finding is not adjudication, and cannot be likened to the
judicial function of a court of justice, or even a quasi-judicial agency or official. The function of receiving
evidence and ascertaining therefrom the facts of a controversy is not a judicial function, properly speaking.
To be considered such, the faculty of receiving evidence and making factual conclusions in a controversy
must be accompanied by the authority of applying the law to those factual conclusions to the end that the
controversy may be decided or determined authoritatively, finally and definitively, subject to such appeals
or modes of review as may be provided by law. This function, to repeat, the Commission does not have.
xxxx
[i]t cannot try and decide cases (or hear and determine causes) as courts of justice, or even quasi-judicial
bodies do. To investigate is not to adjudicate or adjudge. Whether in the popular or the technical sense,
these terms have well understood and quite distinct meanings.
"Investigate, "commonly understood, means to examine, explore, inquire or delve or probe into, research
on, study. The dictionary definition of "investigate" is "to observe or study closely: inquire into
systematically: "to search or inquire into: x x x to subject to an official probe x x x: to conduct an official
inquiry;" The purpose of investigation, of course, is to discover, to find out, to learn, obtain information.
Nowhere included or intimated is the notion of settling, deciding or resolving a controversy involved in the
facts inquired into by application of the law to the facts established by the inquiry.
The legal meaning of "investigate" is essentially the same: "(t)o follow up step by step by patient inquiry or
observation. To trace or track; to search into; to examine and inquire into with care and accuracy; to find
out by careful inquisition; examination; the taking of evidence; a legal inquiry;" "to inquire; to make an
investigation," "investigation" being in turn described as "(a)n administrative function, the exercise of
which ordinarily does not require a hearing. 2 Am J2d Adm L Sec. 257; xx x an inquiry, judicial or
otherwise, for the discovery and collection of facts concerning a certain matter or matters."
"Adjudicate," commonly or popularly understood, means to adjudge, arbitrate, judge, decide, determine,
resolve, rule on, settle. The dictionary defines the term as "to settle finally (the rights and duties of the
parties to a court case) on the merits of issues raised: xx to pass judgment on: settle judicially: x x x act as
judge." And "adjudge" means "to decide or rule upon as a judge or with judicial or quasi-judicial powers:
xx to award or grant judicially in a case of controversy x x x."
In the legal sense, "adjudicate" means: "To settle in the exercise of judicial authority.1âwphi1 To
determine finally. Synonymous with adjudge in its strictest sense;" and "adjudge" means: "To pass on
judicially, to decide, settle or decree, or to sentence or condemn. xx Implies a judicial determination of a
fact, and the entry of a judgment. "226

All told, petitioners are not entitled to moral and exemplary damages in accordance with Articles 19, 2217,
2219 and 2229 of the Civil Code. The dismissal of Cadet 1 CL Cudia from the PMA did not effectively
deprive him of a future. Cliche though it may sound, being a PMA graduate is not the "be-all and end-all"
of his existence. A cadet separated from the PMA may still continue to pursue military or civilian career
elsewhere without suffering the stigma attached to his or her dismissal. For one, as suggested by
respondents, DND-AFP Circular No. 13, dated July 15, 1991, on the enlistment and reenlistment in the
APP Regular Force, provides under Section 14 (b) thereof that priority shall be given to, among others, the
ex-PMA or PAFFFS cadets.227 If the positions open does not appeal to his interest for being way below the
rank he could have achieved as a PMA graduate, Cadet 1 CL Cudia could still practice other equally noble
profession or calling that is best suited to his credentials, competence, and potential. Definitely, nobody
can deprive him of that choice.

WHEREFORE, the Petition is DENIED. The dismissal of Cadet First Class Aldrin Jeff P. Cudia from the
Philippine Military Academy is hereby AFFIRMED. No costs.

SO ORDERED.

G.R. No. 211833, April 07, 2015
FERDINAND R. VILLANUEVA, PRESIDING JUDGE, MCTC, COMPOSTELA-NEW BATAAN,
COMPOSTELA VALLEY PROVINCE, Petitioner, v. JUDICIAL AND BAR
COUNCIL, Respondent.
DECISION
REYES, J.:
Presiding Judge Ferdinand R. Villanueva (petitioner) directly came to this Court via a Petition for
Prohibition, Mandamus, and Certiorari, and Declaratory Relief1 under Rules 65 and 63 of the Rules of
Court, respectively, with prayer for the issuance of a temporary restraining order and/or writ of preliminary
injunction, to assail the policy of the Judicial and Bar Council (JBC), requiring five years of service as
judges of first-level courts before they can qualify as applicant to second-level courts, on the ground that it
is unconstitutional, and was issued with grave abuse of discretion.chanRoblesvirtualLawlibrary
The Facts
The petitioner was appointed on September 18, 2012 as the Presiding Judge of the Municipal Circuit Trial
Court, Compostela-New Bataan, Poblacion, Compostela Valley Province, Region XI, which is a first-level
court. On September 27, 2013, he applied for the vacant position of Presiding Judge in the following
Regional Trial Courts (RTCs): Branch 31, Tagum City; Branch 13, Davao City; and Branch 6,
Prosperidad, Agusan Del Sur.
In a letter2 dated December 18, 2013, JBC's Office of Recruitment, Selection and Nomination, informed
the petitioner that he was not included in the list of candidates for the said stations. On the same date, the
petitioner sent a letter, through electronic mail, seeking reconsideration of his non-inclusion in the list of
considered applicants and protesting the inclusion of applicants who did not pass the prejudicature
examination.
The petitioner was informed by the JBC Executive Officer, through a letter3 dated February 3, 2014, that
his protest and reconsideration was duly noted by the JBC en banc. However, its decision not to include his
name in the list of applicants was upheld due to the JBC's long-standing policy of opening the chance for
promotion to second-level courts to, among others, incumbent judges who have served in their current
position for at least five years, and since the petitioner has been a judge only for more than a year, he was
excluded from the list. This caused the petitioner to take recourse to this Court.
In his petition, he argued that: (1) the Constitution already prescribed the qualifications of an RTC judge,
and the JBC could add no more; (2) the JBC's five-year requirement violates the equal protection and due
process clauses of the Constitution; and (3) the JBC's five-year requirement violates the constitutional
provision on Social Justice and Human Rights for Equal Opportunity of Employment. The petitioner also
asserted that the requirement of the Prejudicature Program mandated by Section 104 of Republic Act (R.A.)
No. 85575 should not be merely directory and should be fully implemented. He further alleged that he has
all the qualifications for the position prescribed by the Constitution and by Congress, since he has already
complied with the requirement of 10 years of practice of law.
In compliance with the Court's Resolution6 dated April 22, 2014, the JBC7 and the Office of the Solicitor
General (OSG)8separately submitted their Comments. Summing up the arguments of the JBC and the OSG,
they essentially stated that the petition is procedurally infirm and that the assailed policy does not violate
the equal protection and due process clauses. They posited that: (1) the writ of certiorari and prohibition
cannot issue to prevent the JBC from performing its principal function under the Constitution to
recommend appointees to the Judiciary because the JBC is not a tribunal exercising judicial or quasi-
judicial function; (2) the remedy of mandamus and declaratory relief will not lie because the petitioner has
no clear legal right that needs to be protected; (3) the equal protection clause is not violated because the
classification of lower court judges who have served at least five years and those who have served less than
five years is valid as it is performance and experience based; and (4) there is no violation of due process as
the policy is merely internal in nature.chanRoblesvirtualLawlibrary
The Issue
The crux of this petition is whether or not the policy of JBC requiring five years of service as judges of
first-level courts before they can qualify as applicant to second-level courts is constitutional.
Ruling of the Court
Procedural Issues:
Before resolving the substantive issues, the Court considers it necessary to first determine whether or not
the action for certiorari, prohibition and mandamus, and declaratory relief commenced by the petitioner
was proper.
One. The remedies of certiorari and prohibition are tenable. "The present Rules of Court uses two special
civil actions for determining and correcting grave abuse of discretion amounting to lack or excess of
jurisdiction. These are the special civil actions for certiorari and prohibition, and both are governed by
Rule 65."9 As discussed in the case of Maria Carolina P. Araullo, etc., et al. v. Benigno Simeon C. Aquino
III, etc., et al.,10 this Court explained that:chanroblesvirtuallawlibrary
With respect to the Court, however, the remedies of certiorari and prohibition are necessarily broader in
scope and reach, and the writ of certiorari or prohibition may be issued to correct errors of jurisdiction
committed not only by a tribunal, corporation, board or officer exercising judicial, quasi-judicial or
ministerial functions but also to set right, undo and restrain any act of grave abuse of discretion amounting
to lack or excess of jurisdiction by any branch or instrumentality of the Government, even if the latter does
not exercise judicial, quasi-judicial or ministerial functions. This application is expressly authorized by the
text of the second paragraph of Section 1, supra.
Thus, petitions for certiorari and prohibition are appropriate remedies to raise constitutional issues and to
review and/or prohibit or nullify the acts of legislative and executive officials.11 (Citation omitted)
In this case, it is clear that the JBC does not fall within the scope of a tribunal, board, or officer exercising
judicial or quasi-judicial functions. In the process of selecting and screening applicants, the JBC neither
acted in any judicial or quasi-judicial capacity nor assumed unto itself any performance of judicial or
quasi-judicial prerogative. However, since the formulation of guidelines and criteria, including the policy
that the petitioner now assails, is necessary and incidental to the exercise of the JBC's constitutional
mandate, a determination must be made on whether the JBC has acted with grave abuse of discretion
amounting to lack or excess of jurisdiction in issuing and enforcing the said policy.
Besides, the Court can appropriately take cognizance of this case by virtue of the Court's power of
supervision over the JBC. Jurisprudence provides that the power of supervision is the power of oversight,
or the authority to see that subordinate officers perform their duties. It ensures that the laws and the rules
governing the conduct of a government entity are observed and complied with. Supervising officials see to
it that rules are followed, but they themselves do not lay down such rules, nor do they have the discretion
to modify or replace them. If the rules are not observed, they may order the work done or redone, but only
to conform to such rules. They may not prescribe their own manner of execution of the act. They have no
discretion on this matter except to see to it that the rules are followed.12
Following this definition, the supervisory authority of the Court over the JBC is to see to it that the JBC
complies with its own rules and procedures. Thus, when the policies of the JBC are being attacked, then
the Court, through its supervisory authority over the JBC, has the duty to inquire about the matter and
ensure that the JBC complies with its own rules.
Two. The remedy of mandamus cannot be availed of by the petitioner in assailing JBC's policy. The
petitioner insisted that mandamus is proper because his right was violated when he was not included in the
list of candidates for the RTC courts he applied for. He said that his non-inclusion in the list of candidates
for these stations has caused him direct injury.
It is essential to the issuance of a writ of mandamus that the applicant should have a clear legal right to the
thing demanded and it must be the imperative duty of the respondent to perform the act required. 13The
petitioner bears the burden to show that there is such a clear legal right to the performance of the act, and a
corresponding compelling duty on the part of the respondent to perform the act. The remedy of mandamus,
as an extraordinary writ, lies only to compel an officer to perform a ministerial duty, not a discretionary
one.14 Clearly, the use of discretion and the performance of a ministerial act are mutually exclusive.
The writ of mandamus does not issue to control or review the exercise of discretion or to compel a course
of conduct, which, it quickly seems to us, was what the petitioner would have the JBC do in his favor. The
function of the JBC to select and recommend nominees for vacant judicial positions is discretionary, not
ministerial. Moreso, the petitioner cannot claim any legal right to be included in the list of nominees for
judicial vacancies. Possession of the constitutional and statutory qualifications for appointment to the
judiciary may not be used to legally demand that one's name be included in the list of candidates for a
judicial vacancy. One's inclusion in the list of the candidates depends on the discretion of the JBC,
thus:chanroblesvirtuallawlibrary
The fact that an individual possesses the constitutional and statutory qualifications for appointment to the
Judiciary does not create an entitlement or expectation that his or her name be included in the list of
candidates for a judicial vacancy. By submitting an application or accepting a recommendation, one
submits to the authority of the JBC to subject the former to the search, screening, and selection process,
and to use its discretion in deciding whether or not one should be included in the list. Indeed, assuming that
if one has the legal right to be included in the list of candidates simply because he or she possesses the
constitutional and statutory qualifications, then the application process would then be reduced to a mere
mechanical function of the JBC; and the search, screening, and selection process would not only be
unnecessary, but also improper. However, this is clearly not the constitutional intent. One's inclusion in
the list of candidates is subject to the discretion of the JBC over the selection of nominees for a
particular judicial post. Such candidate's inclusion is not, therefore, a legally demandable right, but
simply a privilege the conferment of which is subject to the JBC's sound discretion.
Moreover, petitioner is essentially seeking a promotional appointment, that is, a promotion from a first-
level court to a second level court. There is no law, however, that grants him the right to a promotion
to second-level courts.15 (Emphasis in the original)
Clearly, to be included as an applicant to second-level judge is not properly compellable by mandamus
inasmuch as it involves the exercise of sound discretion by the JBC.
Three. The petition for declaratory relief is improper. "An action for declaratory relief should be filed by a
person interested under a deed, a will, a contract or other written instrument, and whose rights are affected
by a statute, an executive order, a regulation or an ordinance. The relief sought under this remedy includes
the interpretation and determination of the validity of the written instrument and the judicial declaration of
the parties' rights or duties thereunder."16 "[T]he purpose of the action is to secure an authoritative
statement of the rights and obligations of the parties under a statute, deed, contract, etc., for their guidance
in its enforcement or compliance and not to settle issues arising from its alleged breach."17
In this case, the petition for declaratory relief did not involve an unsound policy. Rather, the petition
specifically sought a judicial declaration that the petitioner has the right to be included in the list of
applicants although he failed to meet JBC's five-year requirement policy. Again, the Court reiterates that
no person possesses a legal right under the Constitution to be included in the list of nominees for vacant
judicial positions. The opportunity of appointment to judicial office is a mere privilege, and not a judicially
enforceable right that may be properly claimed by any person. The inclusion in the list of candidates,
which is one of the incidents of such appointment, is not a right either. Thus, the petitioner cannot claim
any right that could have been affected by the assailed policy.
Furthermore, the instant petition must necessarily fail because this Court does not have original jurisdiction
over a petition for declaratory relief even if only questions of law are involved.18 The special civil action of
declaratory relief falls under the exclusive jurisdiction of the appropriate RTC pursuant to Section 19 19 of
Batas Pambansa Blg. 129, as amended by R.A.No. 7691.20
Therefore, by virtue of the Court's supervisory duty over the JBC and in the exercise of its expanded
judicial power, the Court assumes jurisdiction over the present petition. But in any event, even if the Court
will set aside procedural infirmities, the instant petition should still be
dismissed.chanRoblesvirtualLawlibrary
Substantive Issues
As an offspring of the 1987 Constitution, the JBC is mandated to recommend appointees to the judiciary
and only those nominated by the JBC in a list officially transmitted to the President may be appointed by
the latter as justice or judge in the judiciary. Thus, the JBC is burdened with a great responsibility that is
imbued with public interest as it determines the men and women who will sit on the judicial bench. While
the 1987 Constitution has provided the qualifications of members of the judiciary, this does not preclude
the JBC from having its own set of rules and procedures and providing policies to effectively ensure its
mandate.
The functions of searching, screening, and selecting are necessary and incidental to the JBC's principal
function of choosing and recommending nominees for vacancies in the judiciary for appointment by the
President. However, the Constitution did not lay down in precise terms the process that the JBC shall
follow in determining applicants' qualifications. In carrying out its main function, the JBC has the authority
to set the standards/criteria in choosing its nominees for every vacancy in the judiciary, subject only to the
minimum qualifications required by the Constitution and law for every position. The search for these long
held qualities necessarily requires a degree of flexibility in order to determine who is most fit among the
applicants. Thus, the JBC has sufficient but not unbridled license to act in performing its duties.
JBC's ultimate goal is to recommend nominees and not simply to fill up judicial vacancies in order to
promote an effective and efficient administration of justice. Given this pragmatic situation, the JBC had to
establish a set of uniform criteria in order to ascertain whether an applicant meets the minimum
constitutional qualifications and possesses the qualities expected of him and his office. Thus, the adoption
of the five-year requirement policy applied by JBC to the petitioner's case is necessary and incidental to the
function conferred by the Constitution to the JBC.
Equal Protection
There is no question that JBC employs standards to have a rational basis to screen applicants who cannot
be all accommodated and appointed to a vacancy in the judiciary, to determine who is best qualified among
the applicants, and not to discriminate against any particular individual or class.
The equal protection clause of the Constitution does not require the universal application of the laws to all
persons or things without distinction; what it requires is simply equality among equals as determined
according to a valid classification. Hence, the Court has affirmed that if a law neither burdens a
fundamental right nor targets a suspect class, the classification stands as long as it bears a rational
relationship to some legitimate government end.21ChanRoblesVirtualawlibrary
"The equal protection clause, therefore, does not preclude classification of individuals who may be
accorded different treatment under the law as long as the classification is reasonable and not
arbitrary."22 "The mere fact that the legislative classification may result in actual inequality is not violative
of the right to equal protection, for every classification of persons or things for regulation by law produces
inequality in some degree, but the law is not thereby rendered invalid." 23
That is the situation here. In issuing the assailed policy, the JBC merely exercised its discretion in
accordance with the constitutional requirement and its rules that a member of the Judiciary must be of
proven competence, integrity, probity and independence.24"To ensure the fulfillment of these standards in
every member of the Judiciary, the JBC has been tasked to screen aspiring judges and justices, among
others, making certain that the nominees submitted to the President are all qualified and suitably best for
appointment. In this way, the appointing process itself is shielded from the possibility of extending judicial
appointment to the undeserving and mediocre and, more importantly, to the ineligible or disqualified."25
Consideration of experience by JBC as one factor in choosing recommended appointees does not constitute
a violation of the equal protection clause. The JBC does not discriminate when it employs number of years
of service to screen and differentiate applicants from the competition. The number of years of service
provides a relevant basis to determine proven competence which may be measured by experience, among
other factors. The difference in treatment between lower court judges who have served at least five years
and those who have served less than five years, on the other hand, was rationalized by JBC as
follows:chanroblesvirtuallawlibrary
Formulating policies which streamline the selection process falls squarely under the purview of the JBC.
No other constitutional body is bestowed with the mandate and competency to set criteria for applicants
that refer to the more general categories of probity, integrity and independence.
The assailed criterion or consideration for promotion to a second-level court, which is five years
experience as judge of a first-level court, is a direct adherence to the qualities prescribed by the
Constitution. Placing a premium on many years of judicial experience, the JBC is merely applying one of
the stringent constitutional standards requiring that a member of the judiciary be of "proven competence."
In determining competence, the JBC considers, among other qualifications, experience and performance.
Based on the JBC's collective judgment, those who have been judges of first-level courts for five (5) years
are better qualified for promotion to second-level courts. It deems length of experience as a judge as
indicative of conversance with the law and court procedure. Five years is considered as a sufficient span of
time for one to acquire professional skills for the next level court, declog the dockets, put in place
improved procedures and an efficient case management system, adjust to the work environment, and gain
extensive experience in the judicial process.
A five-year stint in the Judiciary can also provide evidence of the integrity, probity, and independence of
judges seeking promotion. To merit JBC's nomination for their promotion, they must have had a "record
of, and reputation for, honesty, integrity, incorruptibility, irreproachable conduct, and fidelity to sound
moral and ethical standards." Likewise, their decisions must be reflective of the soundness of their
judgment, courage, rectitude, cold neutrality and strength of character.
Hence, for the purpose of determining whether judges are worthy of promotion to the next level court, it
would be premature or difficult to assess their merit if they have had less than one year of service on the
bench.26 (Citations omitted and emphasis in the original)
At any rate, five years of service as a lower court judge is not the only factor that determines the selection
of candidates for RTC judge to be appointed by the President. Persons with this qualification are neither
automatically selected nor do they automatically become nominees. The applicants are chosen based on an
array of factors and are evaluated based on their individual merits. Thus, it cannot be said that the
questioned policy was arbitrary, capricious, or made without any basis.
Clearly, the classification created by the challenged policy satisfies the rational basis test. The foregoing
shows that substantial distinctions do exist between lower court judges with five year experience and those
with less than five years of experience, like the petitioner, and the classification enshrined in the assailed
policy is reasonable and relevant to its legitimate purpose. The Court, thus, rules that the questioned policy
does not infringe on the equal protection clause as it is based on reasonable classification intended to gauge
the proven competence of the applicants. Therefore, the said policy is valid and constitutional.
Due Process
The petitioner averred that the assailed policy violates procedural due process for lack of publication and
non-submission to the University of the Philippines Law Center Office of the National Administrative
Register (ONAR). The petitioner said that the assailed policy will affect all applying judges, thus, the said
policy should have been published.
Contrary to the petitioner's contention, the assailed JBC policy need not be filed in the ONAR because the
publication requirement in the ONAR is confined to issuances of administrative agencies under the
Executive branch of the government.27 Since the JBC is a body under the supervision of the Supreme
Court,28 it is not covered by the publication requirements of the Administrative Code.
Nevertheless, the assailed JBC policy requiring five years of service as judges of first-level courts before
they can qualify as applicants to second-level courts should have been published. As a general rule,
publication is indispensable in order that all statutes, including administrative rules that are intended to
enforce or implement existing laws, attain binding force and effect. There are, however, several exceptions
to the requirement of publication, such as interpretative regulations and those merely internal in nature,
which regulate only the personnel of the administrative agency and not the public. Neither is publication
required of the so-called letters of instructions issued by administrative superiors concerning the rules or
guidelines to be followed by their subordinates in the performance of their duties. 29
Here, the assailed JBC policy does not fall within the administrative rules and regulations exempted from
the publication requirement. The assailed policy involves a qualification standard by which the JBC shall
determine proven competence of an applicant. It is not an internal regulation, because if it were, it would
regulate and affect only the members of the JBC and their staff. Notably, the selection process involves a
call to lawyers who meet the qualifications in the Constitution and are willing to serve in the Judiciary to
apply to these vacant positions. Thus, it is but a natural consequence thereof that potential applicants be
informed of the requirements to the judicial positions, so that they would be able to prepare for and comply
with them.
The Court also noted the fact that in JBC-009, otherwise known as the Rules of the Judicial and Bar
Council, the JBC had put its criteria in writing and listed the guidelines in determining competence,
independence, integrity and probity. Section 1, Paragraph 1 of Rule 9 expressly provides that applicants for
the Court of Appeals and the Sandiganbayan, should, as a general rule, have at least five years of
experience as an RTC judge, thus:chanroblesvirtuallawlibrary
RULE 9 - SPECIAL GUIDELINES FOR NOMINATION TO A VACANCY IN THE COURT OF
APPEALS AND SANDIGANBAYAN
Section 1. Additional criteria for nomination to the Court of Appeals and the Sandiganbayan. - In addition
to the foregoing guidelines the Council should consider the following in evaluating the merits of applicants
for a vacancy in the Court of Appeals and Sandiganbayan:
1. As a general rule, he must have at least five years of experience as a judge of Regional Trial Court,
except when he has in his favor outstanding credentials, as evidenced by, inter alia, impressive scholastic
or educational record and performance in the Bar examinations, excellent reputation for honesty, integrity,
probity and independence of mind; at least very satisfactory performance rating for three (3) years
preceding the filing of his application for nomination; and excellent potentials for appellate judgeship.
x x x x (Emphasis ours)
The express declaration of these guidelines in JBC-009, which have been duly published on the website of
the JBC and in a newspaper of general circulation suggests that the JBC is aware that these are not mere
internal rules, but are rules implementing the Constitution that should be published. Thus, if the JBC were
so-minded to add special guidelines for determining competence of applicants for RTC judges, then it
could and should have amended its rules and published the same. This, the JBC did not do as JBC-009 and
its amendatory rule do not have special guidelines for applicants to the RTC.
Moreover, jurisprudence has held that rules implementing a statute should be published. Thus, by analogy,
publication is also required for the five-year requirement because it seeks to implement a constitutional
provision requiring proven competence from members of the judiciary.
Nonetheless, the JBC's failure to publish the assailed policy has not prejudiced the petitioner's private
interest. At the risk of being repetitive, the petitioner has no legal right to be included in the list of
nominees for judicial vacancies since the possession of the constitutional and statutory qualifications for
appointment to the Judiciary may not be used to legally demand that one's name be included in the list of
candidates for a judicial vacancy. One's inclusion in the shortlist is strictly within the discretion of the
JBC.30

As to the issue that the JBC failed or refused to implement the completion of the prejudicature program as
a requirement for appointment or promotion in the judiciary under R.A. No. 8557, this ground of the
petition, being unsubstantiated, was unfounded. Clearly, it cannot be said that JBC unlawfully neglects the
performance of a duty enjoined by law.

Finally, the petitioner argued but failed to establish that the assailed policy violates the constitutional
provision under social justice and human rights for equal opportunity of employment. The OSG
explained:chanroblesvirtuallawlibrary
[T]he questioned policy does not violate equality of employment opportunities. The constitutional
provision does not call for appointment to the Judiciary of all who might, for any number of reasons, wish
to apply. As with all professions, it is regulated by the State. The office of a judge is no ordinary office. It
is imbued with public interest and is central in the administration of justice x x x. Applicants who meet the
constitutional and legal qualifications must vie and withstand the competition and rigorous screening and
selection process. They must submit themselves to the selection criteria, processes and discretion of
respondent JBC, which has the constitutional mandate of screening and selecting candidates whose names
will be in the list to be submitted to the President. So long as a fair opportunity is available for all
applicants who are evaluated on the basis of their individual merits and abilities, the questioned policy
cannot be struck down as unconstitutional.31 (Citations omitted)
From the foregoing, it is apparent that the petitioner has not established a clear legal right to justify the
issuance of a preliminary injunction. The petitioner has merely filed an application with the JBC for the
position of RTC judge, and he has no clear legal right to be nominated for that office nor to be selected and
included in the list to be submitted to the President which is subject to the discretion of the JBC. The JBC
has the power to determine who shall be recommended to the judicial post. To be included in the list of
applicants is a privilege as one can only be chosen under existing criteria imposed by the JBC itself. As
such, prospective applicants, including the petitioner, cannot claim any demandable right to take part in it
if they fail to meet these criteria. Hence, in the absence of a clear legal right, the issuance of an injunctive
writ is not justified.

As the constitutional body granted with the power of searching for, screening, and selecting applicants
relative to recommending appointees to the Judiciary, the JBC has the authority to determine how best to
perform such constitutional mandate. Pursuant to this authority, the JBC issues various policies setting
forth the guidelines to be observed in the evaluation of applicants, and formulates rules and guidelines in
order to ensure that the rules are updated to respond to existing circumstances. Its discretion is freed from
legislative, executive or judicial intervention to ensure that the JBC is shielded from any outside pressure
and improper influence. Limiting qualified applicants in this case to those judges with five years of
experience was an exercise of discretion by the JBC. The potential applicants, however, should have been
informed of the requirements to the judicial positions, so that they could properly prepare for and comply
with them. Hence, unless there are good and compelling reasons to do so, the Court will refrain from
interfering with the exercise of JBC's powers, and will respect the initiative and independence inherent in
the latter.cralawred

WHEREFORE, premises considered, the petition is DISMISSED. The Court, however, DIRECTS that
the Judicial and Bar Council comply with the publication requirement of (1) the assailed policy requiring
five years of experience as judges of first-level courts before they can qualify as applicant to the Regional
Trial Court, and (2) other special guidelines that the Judicial and Bar Council is or will be implementing.

SO ORDERED.chanroblesvirtuallawlibrary

G.R. No. 131977 February 4, 1999
PEDRO MENDOZA, petitioner,
vs.
RAY ALLAS and GODOFREDO OLORES, respondents.
PUNO, J.:
Before us, petitioner prays for the execution of the decision of the trial court 1 granting his petition for quo
warrantowhich ordered his reinstatement as Director III, Customs Intelligence and Investigation Service,
and the payment of his back salaries and benefits.
Petitioner Pedro Mendoza joined the Bureau of Customs in 1972. He held the positions of Port Security
Chief from March 1972 to August 1972, Deputy Commissioner of Customs from August 1972 to
September 1975, Acting Commissioner of Customs from September 1975 to April 1977 and Customs
Operations Chief I from October 1987 to February 1988. 2 On March 1, 1988, he was appointed Customs
Service Chief of the Customs Intelligence and Investigation Service (CIIS). In 1989, the position of
Customs Service Chief was reclassified by the Civil Service as "Director III" in accordance with Republic
Act No. 6758 and National Compensation Circular No. 50. Petitioner's position was thus categorized as
"Director III, CIIS" and he discharged the function and duties of said office.
On April 22, 1993, petitioner was temporarily designated as Acting District Collector, Collection District
X, Cagayan de Oro City. In his place, respondent Ray Allas was appointed as "Acting Director III" of the
CIIS. Despite petitioner's new assignment as Acting District Collector, however, he continued to receive
the salary and benefits of the position of Director III.
In September 1994, petitioner received a letter from Deputy Customs Commissioner Cesar Z. Dario,
informing him of his termination from the Bureau of Customs, in view of respondent Allas' appointment as
Director III by President Fidel V. Ramos. The pertinent portion of the letter reads:
Effective March 4, 1994, Mr. Ray Allas was appointed Director III by President
Fidel V. Ramos and as a consequence, [petitioner's] services were terminated
without prejudice to [his] claim for all government benefits due [him].
Attached to the letter was the appointment of respondent Ray Allas as "Director III, CIIS,
Bureau of Customs, vice Pedro Mendoza."
Petitioner wrote the Customs Commissioner demanding his reinstatement with full back wages and without
loss of seniority rights. No reply was made.
On December 2, 1994, petitioner filed a petition for quo warranto against respondent Allas before the
Regional Trial Court, Paranaque, Branch 258. 3 The case was tried and on September 11, 1995, a decision
was rendered granting the petition. The court found that petitioner was illegally terminated from office
without due process of law and in violation of his security of tenure, and that as he was deemed not to have
vacated his office, the appointment of respondent Allas to the same office was void ab initio. The court
ordered the ouster of respondent Allas from the position of Director III, and at the same time directed the
reinstatement of petitioner to the same position with payment of full back salaries and other benefits
appurtenant thereto.
Respondent Allas appealed to the Court of Appeals. On February 8, 1996, while the case was pending
before said court, respondent Allas was promoted by President Ramos to the position of Deputy
Commissioner of Customs for Assessment and Operations. As a consequence of this promotion, Petitioner
moved to dismiss respondent's appeal as having been rendered moot and academic. The Court of Appeals
granted the motion and dismissed the case accordingly. The order of dismissal became final and entry of
judgment was made on March 19, 1996.4
On May 9, 1996, petitioner filed with the court a quo a Motion for Execution of its decision. On July 24,
1996, the court denied the motion on the ground that the contested position vacated by respondent Allas
was now being occupied by respondent Godofredo Olores who was not a party to the quo
warranto petition.5
Petitioner filed a special civil action for certiorari and mandamus with the Court of Appeals questioning
the order of the trial court. 6 On November 27, 1997, the Court of Appeals dismissed the petition. 7 Hence,
this recourse.
Petitioner claims that:
The Court of Appeals grossly erred in holding that a writ of execution may no longer
be issued, considering that respondent Olores who was not a party to the case now
occupies the subject position.8
The instant petition arose from a special civil action for quo warranto under Rule 66 of the Revised Rules
of Court. Quo warranto is a demand made by the state upon some individual or corporation to show by
what right they exercise some franchise or privilege appertaining to the state which, according to the
Constitution and laws of the land, they cannot legally exercise except by virtue of a grant or authority from
the state.9 In other words, a petition for quo warranto is a proceeding to determine the right of a person to
the use or exercise of a franchise or office and to oust the holder from its enjoyment, if his claim is not
well-founded, or if he has forfeited his right to enjoy the privilege. 10 The action may be commenced for
the Government by the Solicitor General or the fiscal 11 against individuals who usurp a public office,
against a public officer whose acts constitute a ground for the forfeiture of his office, and against an
association which acts as a corporation without being legally incorporated. 12 The action may also be
instituted by an individual in his own name who claims to be entitled to the public office or position
usurped or unlawfully held or exercised by another. 13
Where the action is filed by a private person, he must prove that he is entitled to the controverted position,
otherwise respondent has a right to the undisturbed possession of the office. 14 If the court finds for the
respondent, the judgment should simply state that the respondent is entitled to the office. 15 If, however, the
court finds for the petitioner and declares the respondent guilty of usurping, intruding into, or unlawfully
holding or exercising the office, judgment may be rendered as follows:
Sec. 10. Judgment where usurpation found. — When the defendant is found guilty
of usurping, intruding into, or unlawfully holding or exercising an office, position,
right, privilege, or franchise, judgment shall be rendered that such defendant be
ousted and altogether excluded therefrom, and that the plaintiff or relator, as the case
may be, recover his costs. Such further judgment may be rendered determining the
respective rights in and to the office, position, right, privilege, or franchise of all the
parties to the action as justice requires.
 If it is found that the respondent or defendant is usurping or intruding into the office, or
unlawfully holding the same, the court may order:
(1) The ouster and exclusion of the defendant from office;
(2) The recovery of costs by plaintiff or relator;
(3) The determination of the respective rights in and to the office, position, right,
privilege or franchise of all the parties to the action as justice requires. 16
The character of the judgment to be rendered in quo warranto rests to some extent in the discretion of the
court and on the relief sought. 17 In the case at bar, petitioner prayed for the following relief:
respondent's successor in office, even though such successor may trace his title to the same source. This
follows from the nature of the writ of quo warranto itself. It is never directed to an officer as such, but
always against the person — to determine whether he is constitutionally and legally authorized to perform
any act in, or exercise any function of the office to which he lays claim. 22 In the case at bar, the petition
for quo warranto was filed by petitioner solely against respondent Allas. What was threshed out before the
trial court was the qualification and right of petitioner to the contested position as against respondent Ray
Allas, not against Godofredo Olores. The Court of Appeals did not err in denying execution of the trial
court's decision.
Petitioner has apprised this Court that he reached the compulsory retirement age of sixty-five (65) years on
November 13, 1997. Reinstatement not being possible, petitioner now prays for the payment of his back
salaries and other benefits from the time he was illegally dismissed until finality of the trial court's
decision. 23

WHEREFORE, it is respectfully prayed that respondent be ousted and altogether
excluded from the position of Director III, Customs Intelligence and Investigation
Service of the Bureau of Customs, and petitioner be seated to the position as the one
legally appointed and entitled thereto.
Respondent Allas cannot be held personally liable for petitioner's back salaries and benefits. He was
merely appointed to the subject position by the President of the Philippines in the exercise of his
constitutional power as Chief Executive. Neither can the Bureau of Customs be compelled to pay the said
back salaries and benefits of petitioner. The Bureau of Customs was not a party to the petition for quo
warranto. 24

Other reliefs, just or equitable in the premises, are likewise prayed for. 18 IN VIEW WHEREOF, the petition is denied and the decision of the Court of Appeals in CA-G.R. SP No.
41801 is affirmed.
In granting the petition, the trial court ordered that:
SO ORDERED.
WHEREFORE, viewed in the light of the foregoing, judgment is hereby rendered
granting this petition for quo warranto by:

1. Ousting and excluding respondent Ray Allas from the

position of Director III, Customs Intelligence and
Investigation Service of the Bureau of Customs; and

2. Reinstating petitioner Pedro C. Mendoza, Jr. to the position

of Director III, Customs Intelligence and Investigation
Service of the Bureau of Customs with full back wages and
other monetary benefits appurtenant thereto from the time
they were withheld until reinstated. 19

The trial court found that respondent Allas usurped the position of "Director III, Chief of the Customs
Intelligence and Investigation Service." Consequently, the court ordered that respondent Allas be ousted
from the contested position and that petitioner be reinstated in his stead. Although petitioner did not
specifically pray for his back salaries, the court ordered that he be paid his "full back wages and other
monetary benefits" appurtenant to the contested position "from the time they were withheld until
reinstated."

The decision of the trial court had long become final and executory, and petitioner prays for its execution.
He alleges that he should have been reinstated despite respondent Olores' appointment because the subject
position was never vacant to begin with. Petitioner's removal was illegal and he was deemed never to have
vacated his office when respondent Allas was appointed to the same. Respondent Allas' appointment was
null and void and this nullity allegedly extends to respondent Olores, his successor-in-interest. 20

Ordinarily, a judgment against a public officer in regard to a public right binds his successor in office. This
rule, however, is not applicable in quo warranto cases. 21 A judgment in quo warranto does not bind the

G.R. No. 168696 February 28, 2006
MA. LUTGARDA P. CALLEJA, JOAQUIN M. CALLEJA, JR., JADELSON PETER P.
CALLEJA, MA. JESSICA T. FLORES, MERCIE C. TIPONES and PERFECTO NIXON C.
TABORA, Petitioners,
vs.
JOSE PIERRE A. PANDAY, AUGUSTO R. PANDAY and MA. THELNA P.
MALLARI, Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
1
This resolves the petition for review on certiorari assailing the Order of the Regional Trial Court of San
Jose, Camarines Sur, Branch 58 (RTC-Br. 58) issued on July 13, 2005.
The antecedent facts are as follows.
On May 16, 2005, respondents filed a petition with the Regional Trial Court of San Jose, Camarines Sur
for quo warranto with Damages and Prayer for Mandatory and Prohibitory Injunction, Damages and
Issuance of Temporary Restraining Order against herein petitioners. Respondents alleged that from 1985
up to the filing of the petition with the trial court, they had been members of the board of directors and
officers of St. John Hospital, Incorporated, but sometime in May 2005, petitioners, who are also among the
incorporators and stockholders of said corporation, forcibly and with the aid of armed men usurped the
powers which supposedly belonged to Respondents.
On May 24, 2005, RTC-Br. 58 issued an Order transferring the case to the Regional Trial Court in Naga
City. According to RTC-Br. 58, since the verified petition showed petitioners therein (herein respondents)
to be residents of Naga City, then pursuant to Section 7, Rule 66 of the 1997 Rules of Civil Procedure, the
action for quo warrantoshould be brought in the Regional Trial Court exercising jurisdiction over the
territorial area where the respondents or any of the respondents resides. However, the Executive Judge of
RTC, Naga City refused to receive the case folder of the subject case for quo warranto, stating that
improper venue is not a ground for transferring a quo warranto case to another administrative jurisdiction.
The RTC-Br. 58 then proceeded to issue and serve summons on herein petitioners (respondents below).
Petitioner Tabora filed his Answer dated June 8, 2005, raising therein the affirmative defenses of (1)
improper venue, (2) lack of jurisdiction, and (3) wrong remedy of quo warranto. Thereafter, the other
petitioners also filed their Answer, also raising the same affirmative defenses. All the parties were then
required to submit their respective memoranda.
On July 13, 2005, RTC-Br. 58 issued the assailed Order, the pertinent portions of which read as follows:
It is undisputed that the plaintiffs’ cause of action involves controversies arising out of intra-corporate
relations, between and among stockholders, members or associates of the St. John Hospital Inc. which
originally under PD 902-A approved on March 11, 1976 is within the original and exclusive jurisdiction of
the Securities and Exchange Commission to try and decide in addition to its regulatory and adjudicated
functions (Section 5, PD 902-A). Upon the advent of RA 8799 approved on July 19, 2000, otherwise
known as the Securities and Regulation Code, the Commission’s jurisdiction over all cases enumerated in
Section 5, Presidential Decree 902-A were transferred ["]to the Court of general jurisdiction or the
appropriate Regional Trial Court with a proviso that the "Supreme Court in the exercise of its authority
may designate the Regional Trial Court branches that shall exercise jurisdiction over these cases." Pursuant
to this mandate of RA 8799, the Supreme Court in the exercise of said mandated authority, promulgated on
November 21, 2000, A.M. No. 00-11-03-SC which took effect 15 December 2000 designated certain
branches of the Regional Trial Court to try and decide Securities and Exchange Commission Cases arising
within their respective territorial jurisdiction with respect to the National Capital Region and within the
respective provincesin the First to Twelve Judicial Region. Accordingly, in the Province of Camarines Sur,
(Naga City) RTC Branch 23 presided by the Hon. Pablo M. Paqueo, Jr. was designated as "special court"
(Section 1, A.M. No. 00-11-03-SC).
Subsequently, on January 23, 2001, supplemental Administrative Circular No. 8-01 which took effect on
March 1, 2001 was issued by the Supreme Court which directed that "all SEC cases originally assigned or
transmitted to the regular Regional Trial Court shall be transferred to branches of the Regional Trial Court
specially designated to hear such cases in accordance with A.M. No. 00-11-03-SC.
On March 13, 2001, A.M. No. 01-2-04 SC was promulgated and took effect on April 1, 2001.
From the foregoing discussion and historical background relative to the venue and jurisdiction to try and
decide cases originally enumerated in Section 5 of PD 902-A and later under Section 5.2 of RA 8799, it is
evident that the clear intent of the circular is to bestow the juridiction "to try and decide these cases to the
"special courts" created under A.M. No. 00-11-03-SC. . . .
Under Section 8, of the Interim Rules, [a] Motion to Dismiss is among the prohibited pleadings. On the
otherhand, the Supreme Court under Administrative Order 8-01 has directed the transfer from the regular
courts to the branches of the Regional Trial Courts specially designated to try and decide intra-corporate
dispute.
In the light of the above-noted observations and discussion, the Motion to Dismiss is DENIED pursuant to
the Interim Rules of Procedure for Intra-Corporate Controversies (A.M. No. 01-2-04-SC) which mandates
that motion to dismiss is a prohibited pleading (Section 8) and in consonance with Administrative Order 8-
01 of the Supreme Court dated March 1, 2001, this case is hereby ordered remanded to the Regional Trial
Court Branch 23, Naga City which under A.M. No. 00-11-03-SC has been designated as special court to
try and decide intra-corporate controversies under R.A. 8799.
The scheduled hearing on the prayer for temporary restraining order and preliminary injunction set on July
18, 2005 is hereby cancelled.
For reasons of comity the issue of whether Quo Warranto is the proper remedy is better left to the court of
competent jurisdiction to rule upon.
SO ORDERED. 2
Petitioners no longer moved for reconsideration of the foregoing Order and, instead, immediately elevated
the case to this Court via a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure.
The petition raises the following issues:
I
 WHETHER A BRANCH OF THE REGIONAL TRIAL COURT WHICH HAS NO
JURISDICTION TO TRY AND DECIDE A CASE HAS AUTHORITY TO REMAND THE
SAME TO ANOTHER CO-EQUAL COURT IN ORDER TO CURE THE DEFECTS ON
VENUE AND JURISDICTION
II
WHETHER OR NOT ADMINISTRATIVE CIRCULAR NO. 8-01 DATED JANUARY 23,
2001 WHICH TOOK EFFECT ON MARCH 1, 2001 MAY BE APPLIED IN THE PRESENT
CASE WHICH WAS FILED ON MAY 16, 2005. 3
In their Comment, respondents argue that the present petition should be denied due course and dismissed
on the grounds that (1) an appeal under Rule 45 is inappropriate in this case because the Order dated July
13, 2005 is merely an interlocutory order and not a final order as contemplated under Rule 45 of the 1997
Rules of Civil Procedure; (2) a petition for review on certiorari under Rule 45 is the wrong remedy under
A.M. No. 04-9-07-SC, which provides that "all decisions and final orders in cases falling under the Interim
Rules of Corporate Rehabilitation and the Interim Rules of Procedure Governing Intra-Corporate
Controversies under Republic Act No. 8799 shall be appealable to the Court of Appeals through a petition
for review under Rule 43 of the Rules of Court;" and (3) the petition was intended merely to delay the
proceedings in the trial court because when the case was transferred to Branch 21 of the Regional Trial
Court, said court granted petitioners’ motion to hold the proceedings in view of the present petition
pending before this Court.
Subsequently, petitioners also filed an Urgent Motion to Restore Status Quo Ante, alleging that on January
12, 2006, respondent Jose Pierre Panday, with the aid of 14 armed men, assaulted the premises of St. John
Hospital in Naga City, taking away the daily hospital collections estimated at ₱400,000.00.
The Court notes that, indeed, petitioners chose the wrong remedy to assail the Order of July 13, 2005. It is
hornbook principle that Rule 45 of the 1997 Rules of Civil Procedure governs appeals from judgments or
final orders.4 The Order dated July 13, 2005 is basically a denial of herein petitioners’ prayer in their
Answer for the dismissal of respondents’ case against them. As a consequence of the trial court’s refusal to
dismiss the case, it then directed the transfer of the case to another branch of the Regional Trial Court that
had been designated as a special court to hear cases formerly cognizable by the SEC. Verily, the order was
merely interlocutory as it does not dispose of the case completely, but leaves something more to be done
on its merits. Such being the case, the assailed Order cannot ordinarily be reviewed through a petition
under Rule 45. As we held in Tolentino v. Natanauan, 5 to wit:
In the case of Bangko Silangan Development Bank vs. Court of Appeals, the Court reiterated the well-
settled rule that:
. . . an order denying a motion to dismiss is merely interlocutory and therefore not appealable, nor can it be
the subject of a petition for review on certiorari. Such order may only be reviewed in the ordinary course of
law by an appeal from the judgment after trial. The ordinary procedure to be followed in that event is to
file an answer, go to trial, and if the decision is adverse, reiterate the issue on appeal from the final
judgment.6
It appears, however, that the longer this case remains unresolved, the greater chance there is for more
violence between the parties to erupt. In Philippine Airlines v. Spouses Kurangking,7 the Court proceeded
to give due course to a case despite the wrong remedy resorted to by the petitioner therein, stating thus:
While a petition for review on certiorari under Rule 45 would ordinarily be inappropriate to assail an
interlocutory order, in the interest, however, of arresting the perpetuation of an apparent error committed
below that could only serve to unnecessarily burden the parties, the Court has resolved to ignore the
technical flaw and, also, to treat the petition, there being no other plain, speedy and adequate remedy, as a
special civil action for certiorari. Not much, after all, can be gained if the Court were to refrain from now
making a pronouncement on an issue so basic as that submitted by the parties.8
In this case, the basic issue of which court has jurisdiction over cases previously cognizable by the SEC
under Section 5, Presidential Decree No. 902-A (P.D. No. 902-A), and the propensity of the parties to
resort to violence behoove the Court to look beyond petitioners’ technical lapse of filing a petition for
review on certiorari instead of filing a petition for certiorari under Rule 65 with the proper court. Thus,
the Court shall proceed to resolve the case on its merits.
It should be noted that allegations in a complaint for quo warranto that certain persons usurped the offices,
powers and functions of duly elected members of the board, trustees and/or officers make out a case for an
intra-corporate controversy.9 Prior to the enactment of R.A. No. 8799, the Court, adopting Justice Jose Y.
Feria’s view, declared in Unilongo v. Court of Appeals 10 that Section 1, Rule 66 of the 1997 Rules of Civil
Procedure is "limited to actions of quo warranto against persons who usurp a public office, position or
franchise; public officers who forfeit their office; and associations which act as corporations without being
legally incorporated," while "[a]ctions of quo warrantoagainst corporations, or against persons who usurp
an office in a corporation, fall under the jurisdiction of the Securities and Exchange Commission and are
governed by its rules. (P.D. No. 902-A as amended)."11
However, R.A. No. 8799 was passed and Section 5.2 thereof provides as follows:
5.2. The Commission’s jurisdiction over all cases enumerated under Section 5 of Presidential Decree No.
902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court:
Provided, That the Supreme Court in the exercise of its authority may designate the Regional Trial Court
branches that shall exercise jurisdiction over these cases. xxx
Therefore, actions of quo warranto against persons who usurp an office in a corporation, which were
formerly cognizable by the Securities and Exchange Commission under PD 902-A, have been transferred
to the courts of general jurisdiction. But, this does not change the fact that Rule 66 of the 1997 Rules of
Civil Procedure does not apply to quo warranto cases against persons who usurp an office in a private
corporation. Presently, Section 1(a) of Rule 66 reads thus:
Section 1. Action by Government against individuals. – An action for the usurpation of a public office,
position or franchise may be commenced by a verified petition brought in the name of the Republic of the
Philippines against
(a) A person who usurps, intrudes into, or unlawfully holds or exercises a public office, position or
franchise;
xxxx
As explained in the Unilongo12 case, Section 1(a) of Rule 66 of the present Rules no longer contains the
phrase "or an office in a corporation created by authority of law" which was found in the old Rules.
Clearly, the present Rule 66 only applies to actions of quo warranto against persons who usurp a public
office, position or franchise; public officers who forfeit their office; and associations which act as
corporations without being legally incorporated despite the passage of R.A. No. 8799. It is, therefore, The
Interim Rules of Procedure Governing Intra-Corporate Controversies Under R.A. No. 8799 (hereinafter the
Interim Rules) which applies to the petition for quo warrantofiled by respondents before the trial court
since what is being questioned is the authority of herein petitioners to assume the office and act as the
board of directors and officers of St. John Hospital, Incorporated.
The Interim Rules provide thus:
Section 1. (a) Cases covered. – These Rules shall govern the procedure to be observed in civil
cases involving the following:
xxxx
(2) Controversies arising out of intra-corporate, partnership, or association relations,
between and among stockholders, members, or associates, and between, any or all of them
and the corporation, partnership, or association of which they are stockholders, members, or
associates, respectively;
(3) Controversies in the election or appointment of directors, trustees, officers, or
managers of corporations, partnerships, or associations;
xxxx
SEC. 5. Venue. – All actions covered by these Rules shall be commenced and tried in the
Regional Trial Court which has jurisdiction over the principal office of the corporation,
partnership, or association concerned. xxx (Emphasis ours)
Pursuant to Section 5.2 of R.A. No. 8799, the Supreme Court promulgated A.M. No. 00-11-03-SC
(effective December 15, 2000) designating certain branches of the Regional Trial Courts to try and decide
cases formerly cognizable by the Securities and Exchange Commission. For the Fifth Judicial Region, this
Court designated the following branches of the Regional Trial Court, to wit:
Camarines Sur (Naga City) Branch 23, Judge Pablo M. Paqueo, Jr.
Albay (Legaspi City) Branch 4, Judge Gregorio A. Consulta
Sorsogon (Sorsogon) Branch 52, Judge Honesto A. Villamor
Subsequently, the Court promulgated A.M. No. 03-03-03-SC, effective July 1, 2003, which provides that:
1. The Regional Courts previously designated as SEC Courts through the: (a) Resolutions of
this Court dated 21 November 2000, 4 July 2001, 12 November 2002, and 9 July 2002, all
issued in A.M. No. 00-11-03-SC, (b) Resolution dated 27 August 2001 in A.M. No. 01-5-298-
RTC; and (c) Resolution dated 8 July 2002 in A.M. No. 01-12-656-RTC are
hereby DESIGNATED and shall be CALLED as Special Commercial Courts to try and
decide cases involving violations of Intellectual Property Rights which fall within their
jurisdiction and those cases formerly cognizable by the Securities and Exchange
Commission;
xxxx
4. The Special Commercial Courts shall have jurisdiction over cases arising within their
respective territorial jurisdiction with respect to the National Capital Judicial Region and
within the respective provinces with respect to the First to Twelfth Judicial Regions. Thus,
cases shall be filed in the Office of the Clerk of Court in the official station of the
designated Special Commercial Court; (Emphasis ours)
The next question then is, which branch of the Regional Trial Court has jurisdiction over the present action
for quo warrato? Section 5 of the Interim Rules provides that the petition should be commenced and tried
in the Regional Trial Court that has jurisdiction over the principal office of the corporation. It is undisputed
that the principal office of the corporation is situated at Goa, Camarines Sur. Thus, pursuant to A.M. No.
00-11-03-SC and A.M. No. 03-03-03-SC, it is the Regional Trial Court designated as Special Commercial
Courts in Camarines Sur which shall have jurisdiction over the petition for quo warranto filed by herein
Respondents.
Evidently, the RTC-Br. 58 in San Jose, Camarines Sur is bereft of jurisdiction over respondents’ petition
for quo warranto. Based on the allegations in the petition, the case was clearly one involving an intra-
corporate dispute. The trial court should have been aware that under R.A. No. 8799 and the
aforementioned administrative issuances of this Court, RTC-Br. 58 was never designated as a Special
Commercial Court; hence, it was never vested with jurisdiction over cases previously cognizable by the
SEC.
Such being the case, RTC-Br. 58 did not have the requisite authority or power to order the transfer of the
case to another branch of the Regional Trial Court. The only action that RTC-Br. 58 could take on the
matter was to dismiss the petition for lack of jurisdiction. In HLC Construction and Development Corp. v.
Emily Homes Subdivision Homeowners’ Association,13 the Court held that the trial court, having no
jurisdiction over the subject matter of the complaint, should dismiss the same so the issues therein could be
expeditiously heard and resolved by the tribunal which was clothed with jurisdiction.
Note, further, that respondents’ petition for quo warranto was filed as late as 2005. A.M. No. 03-03-03-SC
took effect as early as July 1, 2003 and it was clearly provided therein that such petitions shall be filed in
the Office of the Clerk of Court in the official station of the designated Special Commercial Court.
Since the official station of the designated Special Commercial Court for Camarines Sur is the Regional
Trial Court in Naga City, respondents should have filed their petition with said court. A.M. No. 00-11-03-
SC having been in effect for four years and A.M. No. 03-03-03-SC having been in effect for almost two
years by the time respondents filed their petition, there is no cogent reason why respondents were not
aware of the appropriate court where their petition should be filed.
The ratiocination of RTC-Br.58 that Administrative Circular No. 08-2001 authorized said trial court to
order the transfer of respondents’ petition to the Regional Trial Court of Naga City is specious because as
of the time of filing of the petition, A.M. No. 03-03-03-SC, which clearly stated that cases formerly
cognizable by the SEC should be filed with the Office of the Clerk of Court in the official station of the
designated Special Commercial Court,had been in effect for almost two years. Thus, the filing of the
petition with the Regional Trial Court of San Jose, Camarines Sur, which had no jurisdiction over those
kinds of actions, was clearly erroneous.
WHEREFORE, the petition is GIVEN DUE COURSE and GRANTED. The Order of the Regional
Trial Court of San Jose, Camarines Sur dated July 13, 2005 is SET ASIDE for being NULL and VOID.
The petition for quo warranto in Civil Case No. T-1007 (now re-docketed as SEC Case No. RTC 2005-
0001), entitled "Jose Pierre A. Panday, et al. v. Sps. Joaquin M. Calleja, Jr., et al." is
ordered DISMISSED.
SO ORDERED.

G.R. Nos. 179431-32 June 22, 2010
LUIS K. LOKIN, JR., as the second nominee of CITIZENS BATTLE AGAINST CORRUPTION
(CIBAC),Petitioner,
vs.
COMMISSION ON ELECTIONS and the HOUSE OF REPRESENTATIVES, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 180443
LUIS K. LOKIN, JR., Petitioner,
vs.
COMMISSION ON ELECTIONS (COMELEC), EMMANUEL JOEL J. VILLANUEVA,
CINCHONA C. GONZALES and ARMI JANE R. BORJE, Respondents.
DECISION
BERSAMIN, J.:
The principal question posed in these consolidated special civil actions for certiorari and mandamus is
whether the Commission on Elections (COMELEC) can issue implementing rules and regulations (IRRs)
that provide a ground for the substitution of a party-list nominee not written in Republic Act (R.A.) No.
7941,1 otherwise known as the Party-List System Act, the law that the COMELEC thereby implements.
Common Antecedents
The Citizens’ Battle Against Corruption (CIBAC) was one of the organized groups duly registered under
the party-list system of representation that manifested their intent to participate in the May 14, 2007
synchronized national and local elections. Together with its manifestation of intent to participate, 2 CIBAC,
through its president, Emmanuel Joel J. Villanueva, submitted a list of five nominees from which its
representatives would be chosen should CIBAC obtain the required number of qualifying votes. The
nominees, in the order that their names appeared in the certificate of nomination dated March 29,
2007,3 were: (1) Emmanuel Joel J. Villanueva; (2) herein petitioner Luis K. Lokin, Jr.; (3) Cinchona C.
Cruz-Gonzales; (4) Sherwin Tugna; and (5) Emil L. Galang. The nominees’ certificates of acceptance were
attached to the certificate of nomination filed by CIBAC. The list of nominees was later published in two
newspapers of general circulation, The Philippine Star News4 (sic) and The Philippine Daily Inquirer.5
Prior to the elections, however, CIBAC, still through Villanueva, filed a certificate of nomination,
substitution and amendment of the list of nominees dated May 7, 2007, 6 whereby it withdrew the
nominations of Lokin, Tugna and Galang and substituted Armi Jane R. Borje as one of the nominees. The
amended list of nominees of CIBAC thus included: (1) Villanueva, (2) Cruz-Gonzales, and (3) Borje.
Following the close of the polls, or on June 20, 2007, Villanueva sent a letter to COMELEC Chairperson
Benjamin Abalos,7 transmitting therewith the signed petitions of more than 81% of the CIBAC members,
in order to confirm the withdrawal of the nomination of Lokin, Tugna and Galang and the substitution of
Borje. In their petitions, the members of CIBAC averred that Lokin and Tugna were not among the
nominees presented and proclaimed by CIBAC in its proclamation rally held in May 2007; and that Galang
had signified his desire to focus on his family life.
On June 26, 2007, CIBAC, supposedly through its counsel, filed with the COMELEC en banc sitting as the
National Board of Canvassers a motion seeking the proclamation of Lokin as its second nominee. 8 The
right of CIBAC to a second seat as well as the right of Lokin to be thus proclaimed were purportedly based
on Party-List Canvass Report No. 26, which showed CIBAC to have garnered a grand total of 744,674
votes. Using all relevant formulas, the motion asserted that CIBAC was clearly entitled to a second seat
and Lokin to a proclamation.
The motion was opposed by Villanueva and Cruz-Gonzales.
Notwithstanding Villanueva’s filing of the certificate of nomination, substitution and amendment of the list
of nominees and the petitions of more than 81% of CIBAC members, the COMELEC failed to act on the
matter, prompting Villanueva to file a petition to confirm the certificate of nomination, substitution and
amendment of the list of nominees of CIBAC on June 28, 2007.9
On July 6, 2007, the COMELEC issued Resolution No. 8219, 10 whereby it resolved to set the matter
pertaining to the validity of the withdrawal of the nominations of Lokin, Tugna and Galang and the
substitution of Borje for proper disposition and hearing. The case was docketed as E.M. No. 07-054.
In the meantime, the COMELEC en banc, sitting as the National Board of Canvassers, issued National
Board of Canvassers (NBC) Resolution No. 07-60 dated July 9, 200711 to partially proclaim the following
parties, organizations and coalitions participating under the Party-List System as having won in the May
14, 2007 elections, namely: Buhay Hayaan Yumabong, Bayan Muna, CIBAC, Gabriela Women's Party,
Association of Philippine Electric Cooperatives, Advocacy for Teacher Empowerment Through Action,
Cooperation and Harmony Towards Educational Reforms, Inc., Akbayan! Citizen's Action Party, Alagad,
Luzon Farmers Party, Cooperative-Natco Network Party, Anak Pawis, Alliance of Rural Concerns and
Abono; and to defer the proclamation of the nominees of the parties, organizations and coalitions with
pending disputes until final resolution of their respective cases.
The COMELEC en banc issued another resolution, NBC Resolution No. 07-72 dated July 18,
2007,12 proclaiming Buhay Hayaan Yumabong as entitled to 2 additional seats and Bayan Muna, CIBAC,
Gabriela Women's Party, and Association of Philippine Electric Cooperatives to an additional seat each;
and holding in abeyance the proclamation of the nominees of said parties, organizations and coalitions with
pending disputes until the final resolution of their respective cases.
With the formal declaration that CIBAC was entitled to an additional seat, Ricardo de los Santos,
purportedly as secretary general of CIBAC, informed Roberto P. Nazareno, Secretary General of the House
of Representatives, of the promulgation of NBC Resolution No. 07-72 and requested that Lokin be
formally sworn in by Speaker Jose de Venecia, Jr. to enable him to assume office. Nazareno replied,
however, that the request of Delos Santos could not be granted because COMELEC Law Director Alioden
D. Dalaig had notified him of the pendency of E.M. 07-054.
On September 14, 2007, the COMELEC en banc resolved E.M. No. 07-05413 thuswise:
WHEREFORE, considering the above discussion, the Commission hereby approves the withdrawal of the
nomination of Atty. Luis K. Lokin, Sherwin N. Tugna and Emil Galang as second, third and fourth
nominees respectively and the substitution thereby with Atty. Cinchona C. Cruz-Gonzales as second
nominee and Atty. Armi Jane R. Borje as third nominee for the party list CIBAC. The new order of
CIBAC's nominees therefore shall be:
 1. Emmanuel Joel J. Villanueva
2. Cinchona C. Cruz-Gonzales
3. Armi Jane R. Borje
SO ORDERED.
The COMELEC en banc explained that the actions of Villanueva in his capacity as the president of CIBAC
were presumed to be within the scope of his authority as such; that the president was charged by Section 1
of Article IV of the CIBAC By-Laws to oversee and direct the corporate activities, which included the act
of submitting the party's manifestation of intent to participate in the May 14, 2007 elections as well as its
certificate of nominees; that from all indications, Villanueva as the president of CIBAC had always been
provided the leeway to act as the party's representative and that his actions had always been considered as
valid; that the act of withdrawal, although done without any written Board approval, was accomplished
with the Board’s acquiescence or at least understanding; and that the intent of the party should be given
paramount consideration in the selection of the nominees.
As a result, the COMELEC en banc proclaimed Cruz-Gonzales as the official second nominee of
CIBAC.14 Cruz-Gonzales took her oath of office
as a Party-List Representative of CIBAC on September 17, 2007.15
Precís of the Consolidated Cases
In G.R. No. 179431 and G.R. No. 179432, Lokin seeks through mandamus to compel respondent
COMELEC to proclaim him as the official second nominee of CIBAC.
In G.R. No. 180443, Lokin assails Section 13 of Resolution No. 7804 promulgated on January 12,
2007;16 and the resolution dated September 14, 2007 issued in E.M. No. 07-054 (approving CIBAC’s
withdrawal of the nominations of Lokin, Tugna and Galang as CIBAC’s second, third and fourth
nominees, respectively, and the substitution by Cruz-Gonzales and Borje in their stead, based on the right
of CIBAC to change its nominees under Section 13 of Resolution No. 7804). 17 He alleges that Section 13
of Resolution No. 7804 expanded Section 8 of R.A. No. 7941.18the law that the COMELEC seeks to
thereby implement.
In its comment, the COMELEC asserts that a petition for certiorari is an inappropriate recourse in law due
to the proclamation of Cruz-Gonzales as Representative and her assumption of that office; that Lokin’s
proper recourse was an electoral protest filed in the House of Representatives Electoral Tribunal (HRET);
and that, therefore, the Court has no jurisdiction over the matter being raised by Lokin.
For its part, CIBAC posits that Lokin is guilty of forum shopping for filing a petition for mandamus and a
petition for certiorari, considering that both petitions ultimately seek to have him proclaimed as the second
nominee of CIBAC.
Issues
The issues are the following:
(a) Whether or not the Court has jurisdiction over the controversy;
(b) Whether or not Lokin is guilty of forum shopping;
(c) Whether or not Section 13 of Resolution No. 7804 is unconstitutional and violates the Party-
List System Act; and
(d) Whether or not the COMELEC committed grave abuse of discretion amounting to lack or
excess of jurisdiction in approving the withdrawal of the nominees of CIBAC and allowing the
amendment of the list of nominees of CIBAC without any basis in fact or law and after the
close of the polls, and in ruling on matters that were intra-corporate in nature.
Ruling
The petitions are granted.
A
The Court has jurisdiction over the case
The COMELEC posits that once the proclamation of the winning party-list organization has been done and
its nominee has assumed office, any question relating to the election, returns and qualifications of the
candidates to the House of Representatives falls under the jurisdiction of the HRET pursuant to Section 17,
Article VI of the 1987 Constitution. Thus, Lokin should raise the question he poses herein either in an
election protest or in a special civil action for quo warranto in the HRET, not in a special civil action for
certiorari in this Court.
We do not agree.
An election protest proposes to oust the winning candidate from office. It is strictly a contest between the
defeated and the winning candidates, based on the grounds of electoral frauds and irregularities, to
determine who between them has actually obtained the majority of the legal votes cast and is entitled to
hold the office. It can only be filed by a candidate who has duly filed a certificate of candidacy and has
been voted for in the preceding elections.
A special civil action for quo warranto refers to questions of disloyalty to the State, or of ineligibility of
the winning candidate. The objective of the action is to unseat the ineligible person from the office, but not
to install the petitioner in his place. Any voter may initiate the action, which is, strictly speaking, not a
contest where the parties strive for supremacy because the petitioner will not be seated even if the
respondent may be unseated.
The controversy involving Lokin is neither an election protest nor an action for quo warranto, for it
concerns a very peculiar situation in which Lokin is seeking to be seated as the second nominee of CIBAC.
Although an election protest may properly be available to one party-list organization seeking to unseat
another party-list organization to determine which between the defeated and the winning party-list
organizations actually obtained the majority of the legal votes, Lokin’s case is not one in which a nominee
of a particular party-list organization thereby wants to unseat another nominee of the same party-list
organization. Neither does an action for quo warranto lie, considering that the case does not involve the
ineligibility and disloyalty of Cruz-Gonzales to the Republic of the Philippines, or some other cause of
disqualification for her.
Lokin has correctly brought this special civil action for certiorari against the COMELEC to seek the review Applying the test for forum shopping, the consecutive filing of the action for certiorari and the action for
of the September 14, 2007 resolution of the COMELEC in accordance with Section 7 of Article IX-A of mandamus did not violate the rule against forum shopping even if the actions involved the same parties,
the 1987 Constitution, notwithstanding the oath and assumption of office by Cruz-Gonzales. The because they were based on different causes of action and the reliefs they sought were different.
constitutional mandate is now implemented by Rule 64 of the 1997 Rules of Civil Procedure, which
provides for the review of the judgments, final orders or resolutions of the COMELEC and the
C
Commission on Audit. As Rule 64 states, the mode of review is by a petition for certiorari in accordance
Invalidity of Section 13 of Resolution No. 7804
with Rule 65 to be filed in the Supreme Court within a limited period of 30 days. Undoubtedly, the Court
has original and exclusive jurisdiction over Lokin’s petitions for certiorari and for mandamus against the
COMELEC. The legislative power of the Government is vested exclusively in the Legislature in accordance with the
doctrine of separation of powers. As a general rule, the Legislature cannot surrender or abdicate its
legislative power, for doing so will be unconstitutional. Although the power to make laws cannot be
B
delegated by the Legislature to any other authority, a power that is not legislative in character may be
Petitioner is not guilty of forum shopping
delegated.25

Forum shopping consists of the filing of multiple suits involving the same parties for the same cause of
Under certain circumstances, the Legislature can delegate to executive officers and administrative boards
action, either simultaneously or successively, for the purpose of obtaining a favorable judgment. Thus,
the authority to adopt and promulgate IRRs. To render such delegation lawful, the Legislature must declare
forum shopping may arise: (a) whenever as a result of an adverse decision in one forum, a party seeks a
the policy of the law and fix the legal principles that are to control in given cases. The Legislature should
favorable decision (other than by appeal or certiorari) in another; or (b) if, after having filed a petition in
set a definite or primary standard to guide those empowered to execute the law. For as long as the policy is
the Supreme Court, a party files another petition in the Court of Appeals, because he thereby deliberately
laid down and a proper standard is established by statute, there can be no unconstitutional delegation of
splits appeals "in the hope that even as one case in which a particular remedy is sought is dismissed,
legislative power when the Legislature leaves to selected instrumentalities the duty of making subordinate
another case (offering a similar remedy) would still be open"; or (c) where a party attempts to obtain a writ
rules within the prescribed limits, although there is conferred upon the executive officer or administrative
of preliminary injunction from a court after failing to obtain the writ from another court.19
board a large measure of discretion. There is a distinction between the delegation of power to make a law
and the conferment of an authority or a discretion to be exercised under and in pursuance of the law, for the
What is truly important to consider in determining whether forum shopping exists or not is the vexation power to make laws necessarily involves a discretion as to what it shall be. 26
caused to the courts and the litigants by a party who accesses different courts and administrative agencies
to rule on the same or related causes or to grant the same or substantially the same reliefs, in the process
The authority to make IRRs in order to carry out an express legislative purpose, or to effect the operation
creating the possibility of conflicting decisions being rendered by the different fora upon the same issue.20
and enforcement of a law is not a power exclusively legislative in character, but is rather administrative in
nature. The rules and regulations adopted and promulgated must not, however, subvert or be contrary to
The filing of identical petitions in different courts is prohibited, because such act constitutes forum existing statutes. The function of promulgating IRRs may be legitimately exercised only for the purpose of
shopping, a malpractice that is proscribed and condemned as trifling with the courts and as abusing their carrying out the provisions of a law. The power of administrative agencies is confined to implementing the
processes. Forum shopping is an improper conduct that degrades the administration of justice. 21 law or putting it into effect. Corollary to this is that administrative regulation cannot extend the law and
amend a legislative enactment. It is axiomatic that the clear letter of the law is controlling and cannot be
amended by a mere administrative rule issued for its implementation. Indeed, administrative or executive
Nonetheless, the mere filing of several cases based on the same incident does not necessarily constitute
acts shall be valid only when they are not contrary to the laws or the Constitution. 27
forum shopping. The test is whether the several actions filed involve the same transactions and the same
essential facts and circumstances.22 The actions must also raise identical causes of action, subject matter,
and issues.23 Elsewise stated, forum shopping exists where the elements of litis pendentia are present, or To be valid, therefore, the administrative IRRs must comply with the following requisites to be valid: 28
where a final judgment in one case will amount to res judicata in the other.24
1. Its promulgation must be authorized by the Legislature;
Lokin has filed the petition for mandamus to compel the COMELEC to proclaim him as the second
nominee of CIBAC upon the issuance of NBC Resolution No. 07-72 (announcing CIBAC’s entitlement to
2. It must be within the scope of the authority given by the Legislature;
an additional seat in the House of Representatives), and to strike down the provision in NBC Resolution
No. 07-60 and NBC Resolution No. 07-72 holding in abeyance "all proclamation of the nominees of
concerned parties, organizations and coalitions with pending disputes shall likewise be held in abeyance 3. It must be promulgated in accordance with the prescribed procedure; and
until final resolution of their respective cases." He has insisted that the COMELEC had the ministerial duty
to proclaim him due to his being CIBAC’s second nominee; and that the COMELEC had no authority to
exercise discretion and to suspend or defer the proclamation of winning party-list organizations with 4. It must be reasonable.
pending disputes.
The COMELEC is constitutionally mandated to enforce and administer all laws and regulations relative to
On the other hand, Lokin has resorted to the petition for certiorari to assail the September 14, 2007 the conduct of an election, a plebiscite, an initiative, a referendum, and a recall. 29 In addition to the powers
and functions conferred upon it by the Constitution, the COMELEC is also charged to promulgate IRRs
resolution of the COMELEC (approving the withdrawal of the nomination of Lokin, Tugna and Galang
and the substitution by Cruz-Gonzales as the second nominee and Borje as the third nominee); and to implementing the provisions of the Omnibus Election Code or other laws that the COMELEC enforces and
challenge the validity of Section 13 of Resolution No. 7804, the COMELEC’s basis for allowing CIBAC’s administers.30
withdrawal of Lokin’s nomination.
The COMELEC issued Resolution No. 7804 pursuant to its powers under the Constitution, Batas
Pambansa Blg. 881, and the Party-List System Act.31 Hence, the COMELEC met the first requisite.
The COMELEC also met the third requisite. There is no question that Resolution No. 7804 underwent the
procedural necessities of publication and dissemination in accordance with the procedure prescribed in the
resolution itself.
Whether Section 13 of Resolution No. 7804 was valid or not is thus to be tested on the basis of whether the
second and fourth requisites were met. It is in this respect that the challenge of Lokin against Section 13
succeeds.
As earlier said, the delegated authority must be properly exercised. This simply means that the resulting
IRRs must not be ultra vires as to be issued beyond the limits of the authority conferred. It is basic that an
administrative agency cannot amend an act of Congress,32 for administrative IRRs are solely intended to
carry out, not to supplant or to modify, the law. The administrative agency issuing the IRRs may not
enlarge, alter, or restrict the provisions of the law it administers and enforces, and cannot engraft additional
non-contradictory requirements not contemplated by the Legislature. 33
Section 8 of R.A. No. 7941 reads:
Section 8. Nomination of Party-List Representatives.-Each registered party, organization or coalition shall
submit to the COMELEC not later that forty-five (45) days before the election a list of names, not less than
five (5), from which party-list representatives shall be chosen in case it obtains the required number of
votes.
A person may be nominated in one (1) list only. Only persons who have given their consent in writing may
be named in the list. The list shall not include any candidate of any elective office or a person who has lost
his bid for an elective office in the immediately preceding election. No change of names or alteration of the
order of nominees shall be allowed after the same shall have been submitted to the COMELEC except in
cases where the nominee dies, or withdraws in writing his nomination, becomes incapacitated in which
case the name of the substitute nominee shall be placed last in the list. Incumbent sectoral representatives
in the House of Representatives who are nominated in the party-list system shall not be considered
resigned.
The provision is daylight clear. The Legislature thereby deprived the party-list organization of the right to
change its nominees or to alter the order of nominees once the list is submitted to the COMELEC, except
when: (a) the nominee dies; (b) the nominee withdraws in writing his nomination; or (c) the nominee
becomes incapacitated. The provision must be read literally because its language is plain and free from
ambiguity, and expresses a single, definite, and sensible meaning. Such meaning is conclusively presumed
to be the meaning that the Legislature has intended to convey. Even where the courts should be convinced
that the Legislature really intended some other meaning, and even where the literal interpretation should
defeat the very purposes of the enactment, the explicit declaration of the Legislature is still the law, from
which the courts must not depart.34 When the law speaks in clear and categorical language, there is no
reason for interpretation or construction, but only for application. 35Accordingly, an administrative agency
tasked to implement a statute may not construe it by expanding its meaning where its provisions are clear
and unambiguous.36
The legislative intent to deprive the party-list organization of the right to change the nominees or to alter
the order of the nominees was also expressed during the deliberations of the Congress, viz:
MR. LAGMAN: And again on Section 5, on the nomination of party list representatives, I do not see any
provision here which prohibits or for that matter allows the nominating party to change the nominees or to
alter the order of prioritization of names of nominees. Is the implication correct that at any time after
submission the names could still be changed or the listing altered?
MR. ABUEG: Mr. Speaker, that is a good issue brought out by the distinguished Gentleman from Albay
and perhaps a perfecting amendment may be introduced therein. The sponsoring committee will gladly
consider the same.
MR. LAGMAN: In other words, what I would like to see is that after the list is submitted to the
COMELEC officially, no more changes should be made in the names or in the order of listing.
MR. ABUEG: Mr. Speaker, there may be a situation wherein the name of a particular nominee has been
submitted to the Commission on Elections but before election day the nominee changed his political party
affiliation. The nominee is therefore no longer qualified to be included in the party list and the political
party has a perfect right to change the name of that nominee who changed his political party affiliation.
MR. LAGMAN: Yes of course. In that particular case, the change can be effected but will be the exception
rather than the rule. Another exception most probably is the nominee dies, then there has to be a change but
any change for that matter should always be at the last part of the list so that the prioritization made by the
party will not be adversely affected.37
The usage of "No" in Section 8 – "No change of names or alteration of the order of nominees shall be
allowed after the same shall have been submitted to the COMELEC except in cases where the nominee
dies, or withdraws in writing his nomination, or becomes incapacitated, in which case the name of the
substitute nominee shall be placed last in the list" – renders Section 8 a negative law, and is indicative of
the legislative intent to make the statute mandatory. Prohibitive or negative words can rarely, if ever, be
directory, for there is but one way to obey the command "thou shall not," and that is to completely refrain
from doing the forbidden act,38 subject to certain exceptions stated in the law itself, like in this case.
Section 8 does not unduly deprive the party-list organization of its right to choose its nominees, but merely
divests it of the right to change its nominees or to alter the order in the list of its nominees’ names after
submission of the list to the COMELEC.
The prohibition is not arbitrary or capricious; neither is it without reason on the part of lawmakers. The
COMELEC can rightly presume from the submission of the list that the list reflects the true will of the
party-list organization. The COMELEC will not concern itself with whether or not the list contains the real
intended nominees of the party-list organization, but will only determine whether the nominees pass all the
requirements prescribed by the law and whether or not the nominees possess all the qualifications and none
of the disqualifications. Thereafter, the names of the nominees will be published in newspapers of general
circulation. Although the people vote for the party-list organization itself in a party-list system of election,
not for the individual nominees, they still have the right to know who the nominees of any particular party-
list organization are. The publication of the list of the party-list nominees in newspapers of general
circulation serves that right of the people, enabling the voters to make intelligent and informed choices. In
contrast, allowing the party-list organization to change its nominees through withdrawal of their
nominations, or to alter the order of the nominations after the submission of the list of nominees
circumvents the voters’ demand for transparency. The lawmakers’ exclusion of such arbitrary withdrawal
has eliminated the possibility of such circumvention.
D
Exceptions in Section 8 of R.A. 7941 are exclusive
Section 8 of R.A. No. 7941 enumerates only three instances in which the party-list organization can
substitute another person in place of the nominee whose name has been submitted to the COMELEC,
namely: (a) when the nominee dies; (b) when the nominee withdraws in writing his nomination; and (c)
when the nominee becomes incapacitated.
The enumeration is exclusive, for, necessarily, the general rule applies to all cases not falling under any of
the three exceptions.
When the statute itself enumerates the exceptions to the application of the general rule, the exceptions are
strictly but reasonably construed. The exceptions extend only as far as their language fairly warrants, and
all doubts should be resolved in favor of the general provision rather than the exceptions. Where the
general rule is established by a statute with exceptions, none but the enacting authority can curtail the
former. Not even the courts may add to the latter by implication, and it is a rule that an express exception
excludes all others, although it is always proper in determining the applicability of the rule to inquire
whether, in a particular case, it accords with reason and justice. 391avvphi1
The appropriate and natural office of the exception is to exempt something from the scope of the general
words of a statute, which is otherwise within the scope and meaning of such general words. Consequently,
the existence of an exception in a statute clarifies the intent that the statute shall apply to all cases not
excepted. Exceptions are subject to the rule of strict construction; hence, any doubt will be resolved in
favor of the general provision and against the exception. Indeed, the liberal construction of a statute will
seem to require in many circumstances that the exception, by which the operation of the statute is limited
or abridged, should receive a restricted construction.
E
Section 13 of Resolution No. 7804 expanded
the exceptions under Section 8 of R.A. No. 7941
Section 13 of Resolution No. 7804 states:
Section 13. Substitution of nominees. – A party-list nominee may be substituted only when he dies, or
his nomination is withdrawn by the party, or he becomes incapacitated to continue as such, or he
withdraws his acceptance to a nomination. In any of these cases, the name of the substitute nominee
shall be placed last in the list of nominees.
No substitution shall be allowed by reason of withdrawal after the polls.
Unlike Section 8 of R.A. No. 7941, the foregoing regulation provides four instances, the fourth being when
the "nomination is withdrawn by the party."
Lokin insists that the COMELEC gravely abused its discretion in expanding to four the three statutory
grounds for substituting a nominee.
We agree with Lokin.
The COMELEC, despite its role as the implementing arm of the Government in the enforcement and
administration of all laws and regulations relative to the conduct of an election, 40 has neither the authority
nor the license to expand, extend, or add anything to the law it seeks to implement thereby. The IRRs the
COMELEC issues for that purpose should always accord with the law to be implemented, and should not
override, supplant, or modify the law. It is basic that the IRRs should remain consistent with the law they
intend to carry out.41
Indeed, administrative IRRs adopted by a particular department of the Government under legislative
authority must be in harmony with the provisions of the law, and should be for the sole purpose of carrying
the law’s general provisions into effect. The law itself cannot be expanded by such IRRs, because an
administrative agency cannot amend an act of Congress.42
The COMELEC explains that Section 13 of Resolution No. 7804 has added nothing to Section 8 of R.A.
No. 7941,43because it has merely reworded and rephrased the statutory provision’s phraseology.
The explanation does not persuade.
To reword means to alter the wording of or to restate in other words; to rephrase is to phrase anew or in a
new form.44 Both terms signify that the meaning of the original word or phrase is not altered.
However, the COMELEC did not merely reword or rephrase the text of Section 8 of R.A. No. 7941,
because it established an entirely new ground not found in the text of the provision. The new ground
granted to the party-list organization the unilateral right to withdraw its nomination already submitted to
the COMELEC, which Section 8 of R.A. No. 7941 did not allow to be done. Neither was the grant of the
unilateral right contemplated by the drafters of the law, who precisely denied the right to withdraw the
nomination (as the quoted record of the deliberations of the House of Representatives has indicated). The
grant thus conflicted with the statutory intent to save the nominee from falling under the whim of the party-
list organization once his name has been submitted to the COMELEC, and to spare the electorate from the
capriciousness of the party-list organizations.
We further note that the new ground would not secure the object of R.A. No. 7941 of developing and
guaranteeing a full, free and open party-list electoral system. The success of the system could only be
ensured by avoiding any arbitrariness on the part of the party-list organizations, by seeing to the
transparency of the system, and by guaranteeing that the electorate would be afforded the chance of
making intelligent and informed choices of their party-list representatives.
The insertion of the new ground was invalid. An axiom in administrative law postulates that administrative
authorities should not act arbitrarily and capriciously in the issuance of their IRRs, but must ensure that
their IRRs are reasonable and fairly adapted to secure the end in view. If the IRRs are shown to bear no
reasonable relation to the purposes for which they were authorized to be issued, they must be held to be
invalid and should be struck down.45
F
Effect of partial nullity of Section 13 of Resolution No. 7804
An IRR adopted pursuant to the law is itself law.46 In case of conflict between the law and the IRR, the law
prevails. There can be no question that an IRR or any of its parts not adopted pursuant to the law is no law
at all and has neither the force nor the effect of law.47 The invalid rule, regulation, or part thereof cannot be
a valid source of any right, obligation, or power.
Considering that Section 13 of Resolution No. 7804 – to the extent that it allows the party-list organization
to withdraw its nomination already submitted to the COMELEC – was invalid, CIBAC’s withdrawal of its
nomination of Lokin and the others and its substitution of them with new nominees were also invalid and
ineffectual. It is clear enough that any substitution of Lokin and the others could only be for any of the
grounds expressly stated in Section 8 of R.A. No. 7941. Resultantly, the COMELEC’s approval of
CIBAC’s petition of withdrawal of the nominations and its recognition of CIBAC’s substitution, both
through its assailed September 14, 2007 resolution, should be struck down for lack of legal basis. Thereby,
the COMELEC acted without jurisdiction, having relied on the invalidly issued Section 13 of Resolution
No. 7804 to support its action.
WHEREFORE, we grant the petitions for certiorari and mandamus.

We declare Section 13 of Resolution No. 7804 invalid and of no effect to the extent that it authorizes a
party-list organization to withdraw its nomination of a nominee once it has submitted the nomination to the
Commission on Elections.

Accordingly, we annul and set aside:

(a) The resolution dated September 14, 2007 issued in E. M. No. 07-054 approving Citizens’
Battle Against Corruption’s withdrawal of the nominations of Luis K. Lokin, Jr., Sherwin N.
Tugna, and Emil Galang as its second, third, and fourth nominees, respectively, and ordering
their substitution by Cinchona C. Cruz-Gonzales as second nominee and Armi Jane R. Borje as
third nominee; and

(b) The proclamation by the Commission on Elections of Cinchona C. Cruz-Gonzales as a

Party-List Representative representing Citizens’ Battle Against Corruption in the House of
Representatives.

We order the Commission on Elections to forthwith proclaim petitioner Luis K. Lokin, Jr. as a Party-List
Representative representing Citizens’ Battle Against Corruption in the House of Representatives.

We make no pronouncements on costs of suit.

SO ORDERED.

G.R. No. 195229 October 9, 2012
EFREN RACEL ARA TEA, Petitioner,
vs.
COMMISSiON ON ELECTIONS and ESTELA D. ANTlPOLO, Respondents.
DECISION
CARPIO, J.:
The Case
This is a special civil action for certiorari1 seeking to review and nullify the Resolution2 dated 2 February
2011 and the Order3 dated 12 January 2011 of the Commission on Elections (COMELEC) En Banc in Dra.
Sigrid S. Rodolfo v. Romeo D. Lonzanida, docketed as SPA No. 09-158 (DC). The petition asserts that the
COMELEC issued the Resolution and Order with grave abuse of discretion amounting to lack or excess of
jurisdiction.
The Facts
Romeo D. Lonzanida (Lonzanida) and Estela D. Antipolo (Antipolo) were candidates for Mayor of San
Antonio, Zambales in the May 2010 National and Local Elections. Lonzanida filed his certificate of
candidacy on 1 December 2009.4 On 8 December 2009, Dra. Sigrid S. Rodolfo (Rodolfo) filed a petition
under Section 78 of the Omnibus Election Code to disqualify Lonzanida and to deny due course or to
cancel Lonzanida’s certificate of candidacy on the ground that Lonzanida was elected, and had served, as
mayor of San Antonio, Zambales for four (4) consecutive terms immediately prior to the term for the May
2010 elections. Rodolfo asserted that Lonzanida made a false material representation in his certificate of
candidacy when Lonzanida certified under oath that he was eligible for the office he sought election.
Section 8, Article X of the 1987 Constitution5 and Section 43(b) of the Local Government Code6 both
prohibit a local elective official from being elected and serving for more than three consecutive terms for
the same position.
The COMELEC Second Division rendered a Resolution7 on 18 February 2010 cancelling Lonzanida’s
certificate of candidacy. Pertinent portions of the 18 February 2010 Resolution read:
Respondent Lonzanida never denied having held the office of mayor of San Antonio, Zambales for more
than nine consecutive years. Instead he raised arguments to forestall or dismiss the petition on the grounds
other than the main issue itself. We find such arguments as wanting. Respondent Lonzanida, for holding
the office of mayor for more than three consecutive terms, went against the three-term limit rule; therefore,
he could not be allowed to run anew in the 2010 elections. It is time to infuse new blood in the political
arena of San Antonio.
WHEREFORE, premises considered, the instant petition is hereby GRANTED. The Certificate of
Candidacy of Respondent Romeo D. Lonzanida for the position of mayor in the municipality of San
Antonio, Zambales is hereby CANCELLED. His name is hereby ordered STRICKEN OFF the list of
Official Candidates for the position of Mayor of San Antonio, Zambales in May 10, 2010 elections.
SO ORDERED.8
Lonzanida’s motion for reconsideration before the COMELEC En Banc remained pending during the May
2010 elections. Lonzanida and Efren Racel Aratea (Aratea) garnered the highest number of votes and were
respectively proclaimed Mayor and Vice-Mayor.
Aratea took his oath of office as Acting Mayor before Regional Trial Court (RTC) Judge Raymond C.
Viray of Branch 75, Olongapo City on 5 July 2010.9 On the same date, Aratea wrote the Department of
Interior and Local Government (DILG) and requested for an opinion on whether, as Vice-Mayor, he was
legally required to assume the Office of the Mayor in view of Lonzanida’s disqualification. DILG Legal
Opinion No. 117, S. 201010 stated that Lonzanida was disqualified to hold office by reason of his criminal
conviction. As a consequence of Lonzanida’s disqualification, the Office of the Mayor was deemed
permanently vacant. Thus, Aratea should assume the Office of the Mayor in an acting capacity without
prejudice to the COMELEC’s resolution of Lonzanida’s motion for reconsideration. In another letter dated
6 August 2010, Aratea requested the DILG to allow him to take the oath of office as Mayor of San
Antonio, Zambales. In his response dated 24 August 2010, then Secretary Jesse M. Robredo allowed
Aratea to take an oath of office as "the permanent Municipal Mayor of San Antonio, Zambales without
prejudice however to the outcome of the cases pending before the [COMELEC]."11
On 11 August 2010, the COMELEC En Banc issued a Resolution 12 disqualifying Lonzanida from running
for Mayor in the May 2010 elections. The COMELEC En Banc’s resolution was based on two
grounds: first, Lonzanida had been elected and had served as Mayor for more than three consecutive terms
without interruption; and second, Lonzanida had been convicted by final judgment of ten (10) counts of
falsification under the Revised Penal Code. Lonzanida was sentenced for each count of falsification to
imprisonment of four (4) years and one (1) day of prisión correccional as minimum, to eight (8) years and
one (1) day of prisión mayor as maximum. The judgment of conviction became final on 23 October 2009
in the Decision of this Court in Lonzanida v. People,13 before Lonzanida filed his certificate of candidacy
on 1 December 2009. Pertinent portions of the 11 August 2010 Resolution read:
Prescinding from the foregoing premises, Lonzanida, for having served as Mayor of San Antonio,
Zambales for more than three (3) consecutive terms and for having been convicted by a final judgment of a
crime punishable by more than one (1) year of imprisonment, is clearly disqualified to run for the same
position in the May 2010 Elections.
WHEREFORE, in view of the foregoing, the Motion for Reconsideration is hereby DENIED.
SO ORDERED.14
On 25 August 2010, Antipolo filed a Motion for Leave to Intervene and to Admit Attached Petition-in-
Intervention.15She claimed her right to be proclaimed as Mayor of San Antonio, Zambales because
Lonzanida ceased to be a candidate when the COMELEC Second Division, through its 18 February 2010
Resolution, ordered the cancellation of his certificate of candidacy and the striking out of his name from
the list of official candidates for the position of Mayor of San Antonio, Zambales in the May 2010
elections.
In his Comment filed on 26 January 2011, Aratea asserted that Antipolo, as the candidate who received the
second highest number of votes, could not be proclaimed as the winning candidate. Since Lonzanida’s
disqualification was not yet final during election day, the votes cast in his favor could not be declared
stray. Lonzanida’s subsequent disqualification resulted in a permanent vacancy in the Office of Mayor, and
Aratea, as the duly-elected Vice-Mayor, was mandated by Section 4416 of the Local Government Code to
succeed as Mayor.
The COMELEC’s Rulings
The COMELEC En Banc issued an Order dated 12 January 2011, stating:
Acting on the "Motion for Leave to Intervene and to Admit Attached Petition-in-Intervention" filed by
Estela D. Antipolo (Antipolo) and pursuant to the power of this Commission to suspend its Rules or any
portion thereof in the interest of justice, this Commission hereby RESOLVES to:
1. GRANT the aforesaid Motion;
2. ADMIT the Petition-in-Intervention filed by Antipolo;
3. REQUIRE the Respondent, ROMEO DUMLAO LONZANIDA, as well as EFREN RACEL ARATEA,
proclaimed Vice-Mayor of San Antonio, Zambales, to file their respective Comments on the Petition-in-
Intervention within a non-extendible period of five (5) days from receipt thereof;
4. SET the above-mentioned Petition-in-Intervention for hearing on January 26, 2011 at 10:00 a.m.
COMELEC Session Hall, 8th Floor, Palacio del Gobernador, Intramuros, Manila.
WHEREFORE, furnish copies hereof the parties for their information and compliance.
SO ORDERED.17
In its Resolution dated 2 February 2011, the COMELEC En Banc no longer considered Lonzanida’s
qualification as an issue: "It is beyond cavil that Lonzanida is not eligible to hold and discharge the
functions of the Office of the Mayor of San Antonio, Zambales. The sole issue to be resolved at this
juncture is how to fill the vacancy resulting from Lonzanida’s disqualification." 18 The Resolution further
stated:
We cannot sustain the submission of Oppositor Aratea that Intervenor Antipolo could never be proclaimed
as the duly elected Mayor of Antipolo [sic] for being a second placer in the elections. The teachings in the
cases of Codilla vs. De Venecia and Nazareno and Domino vs. COMELEC, et al., while they remain sound
jurisprudence find no application in the case at bar. What sets this case apart from the cited jurisprudence is
that the notoriety of Lonzanida’s disqualification and ineligibility to hold public office is established both
in fact and in law on election day itself. Hence, Lonzanida’s name, as already ordered by the Commission
on February 18, 2010 should have been stricken off from the list of official candidates for Mayor of San
Antonio, Zambales.
WHEREFORE, in view of the foregoing, the Commission hereby:
1. Declares NULL and VOID the proclamation of respondent ROMEO D. LONZANIDA;
2. GRANTS the Petition for Intervention of Estela D. Antipolo;
3. Orders the immediate CONSTITUTION of a Special Municipal Board of Canvassers to PROCLAIM
Intervenor Estela D. Antipolo as the duly elected Mayor of San Antonio, Zambales;
4. Orders Vice-Mayor Efren Racel Aratea to cease and desist from discharging the functions of the Office
of the Mayor, and to cause a peaceful turn-over of the said office to Antipolo upon her proclamation; and
5. Orders the Office of the Executive Director as well as the Regional Election Director of Region III to
cause the implementation of this Resolution and disseminate it to the Department of Interior and Local
Government.
SO ORDERED.19
Aratea filed the present petition on 9 February 2011.
The Issues
The manner of filling up the permanent vacancy in the Office of the Mayor of San Antonio, Zambales is
dependent upon the determination of Lonzanida’s removal. Whether Lonzanida was disqualified under
Section 68 of the Omnibus Election Code, or made a false material representation under Section 78 of the
same Code that resulted in his certificate of candidacy being void ab initio, is determinative of whether
Aratea or Antipolo is the rightful occupant to the Office of the Mayor of San Antonio, Zambales.
The dissenting opinions reverse the COMELEC’s 2 February 2011 Resolution and 12 January 2011 Order.
They hold that Aratea, the duly elected Vice-Mayor of San Antonio, Zambales, should be declared Mayor
pursuant to the Local Government Code’s rule on succession.
The dissenting opinions make three grave errors: first, they ignore prevailing jurisprudence that a false
representation in the certificate of candidacy as to eligibility in the number of terms elected and served is a
material fact that is a ground for a petition to cancel a certificate of candidacy under Section 78; second,
they ignore that a false representation as to eligibility to run for public office due to the fact that the
candidate suffers from perpetual special disqualification is a material fact that is a ground for a petition to
cancel a certificate of candidacy under Section 78; and third, they resort to a strained statutory construction
to conclude that the violation of the three-term limit rule cannot be a ground for cancellation of a certificate
of candidacy under Section 78, even when it is clear and plain that violation of the three-term limit rule is
an ineligibility affecting the qualification of a candidate to elective office.
The dissenting opinions tread on dangerous ground when they assert that a candidate’s eligibility to the
office he seeks election must be strictly construed to refer only to the details, i.e., age, citizenship, or
residency, among others, which the law requires him to state in his COC, and which he must swear under
oath to possess. The dissenting opinions choose to view a false certification of a candidate’s eligibility on
the three-term limit rule not as a ground for false material representation under Section 78 but as a ground
for disqualification under Section 68 of the same Code. This is clearly contrary to well-established
jurisprudence.
The Court’s Ruling
We hold that Antipolo, the alleged "second placer," should be proclaimed Mayor because Lonzanida’s
certificate of candidacy was void ab initio. In short, Lonzanida was never a candidate at all. All votes for
Lonzanida were stray votes. Thus, Antipolo, the only qualified candidate, actually garnered the highest
number of votes for the position of Mayor.
Qualifications and Disqualifications
Section 65 of the Omnibus Election Code points to the Local Government Code for the qualifications of
elective local officials. Paragraphs (a) and (c) of Section 39 and Section 40 of the Local Government Code
provide in pertinent part:
Sec. 39. Qualifications. ‒ (a) An elective local official must be a citizen of the Philippines; a registered
voter in the barangay, municipality, city or province x x x; a resident therein for at least one (1) year
immediately preceding the day of the election; and able to read and write Filipino or any other local
language or dialect.
xxxx
(c) Candidates for the position of mayor or vice-mayor of independent component cities, component cities,
or municipalities must be at least twenty-one (21) years of age on election day.
xxxx
Sec. 40. Disqualifications. - The following persons are disqualified from running for any elective local
position:
(a) Those sentenced by final judgment for an offense involving moral turpitude or for an offense
punishable by one (1) year or more of imprisonment, within two (2) years after serving sentence;
(b) Those removed from office as a result of an administrative case;
(c) Those convicted by final judgment for violating the oath of allegiance to the Republic;
(d) Those with dual citizenship;
(e) Fugitives from justice in criminal or non-political cases here or abroad;
(f) Permanent residents in a foreign country or those who have acquired the right to reside abroad and
continue to avail of the same right after the effectivity of this Code; and
(g) The insane or feeble-minded. (Emphasis supplied)
Section 12 of the Omnibus Election Code provides:
Sec. 12. Disqualification. — Any person who has been declared by competent authority insane or
incompetent, or has been sentenced by final judgment for subversion, insurrection, rebellion or for any
offense for which he was sentenced to a penalty of more than eighteen months or for a crime
involving moral turpitude, shall be disqualified to be a candidate and to hold any office, unless he has
been given plenary pardon or granted amnesty.
The disqualifications to be a candidate herein provided shall be deemed removed upon the declaration by
competent authority that said insanity or incompetence had been removed or after the expiration of a
period of five years from his service of sentence, unless within the same period he again becomes
disqualified. (Emphasis supplied)
The grounds for disqualification for a petition under Section 68 of the Omnibus Election Code are
specifically enumerated:
Sec. 68. Disqualifications. ‒ Any candidate who, in an action or protest in which he is a party is declared
by final decision by a competent court guilty of, or found by the Commission of having (a) given money
or other material consideration to influence, induce or corrupt the voters or public officials
performing electoral functions; (b) committed acts of terrorism to enhance his candidacy; (c) spent
in his election campaign an amount in excess of that allowed by this Code; (d) solicited, received or
made any contribution prohibited under Sections 89, 95, 96, 97 and 104; (e) violated any of Sections
80, 83, 85, 86 and 261, paragraphs d, e, k, v, and cc, subparagraph 6, shall be disqualified from
continuing as a candidate, or if he has been elected, from holding the office. Any person who is a
permanent resident of or an immigrant to a foreign country shall not be qualified to run for any elective
office under this Code, unless said person has waived his status as permanent resident or immigrant of a
foreign country in accordance with the residence requirement provided for in the election laws. (Emphasis
supplied)
A petition for disqualification under Section 68 clearly refers to "the commission of prohibited acts and
possession of a permanent resident status in a foreign country."20 All the offenses mentioned in Section 68
refer to election offenses under the Omnibus Election Code, not to violations of other penal laws.
There is absolutely nothing in the language of Section 68 that would justify including violation of the
three-term limit rule, or conviction by final judgment of the crime of falsification under the Revised Penal
Code, as one of the grounds or offenses covered under Section 68. In Codilla, Sr. v. de Venecia,21 this
Court ruled:
[T]he jurisdiction of the COMELEC to disqualify candidates is limited to those enumerated in Section 68
of the Omnibus Election Code. All other election offenses are beyond the ambit of COMELEC
jurisdiction. They are criminal and not administrative in nature. x x x
Clearly, the violation by Lonzanida of the three-term limit rule, or his conviction by final judgment of the
crime of falsification under the Revised Penal Code, does not constitute a ground for a petition under
Section 68.
False Material Representation
Section 78 of the Omnibus Election Code states that a certificate of candidacy may be denied or cancelled
when there is false material representation of the contents of the certificate of candidacy:
Sec. 78. Petition to deny due course to or cancel a certificate of candidacy. ‒ A verified petition seeking to
deny due course or to cancel a certificate of candidacy may be filed by the person exclusively on the
ground that any material representation contained therein as required under Section 74 hereof is
false. The petition may be filed at any time not later than twenty-five days from the time of the filing of the
certificate of candidacy and shall be decided, after due notice and hearing, not later than fifteen days before
the election. (Emphasis supplied)
Section 74 of the Omnibus Election Code details the contents of the certificate of candidacy:
Sec. 74. Contents of certificate of candidacy. ‒ The certificate of candidacy shall state that the person
filing it is announcing his candidacy for the office stated therein and that he is eligible for said office; if
for Member of the Batasang Pambansa, the province, including its component cities, highly urbanized city
or district or sector which he seeks to represent; the political party to which he belongs; civil status; his
date of birth; residence; his post office address for all election purposes; his profession or occupation; that
he will support and defend the Constitution of the Philippines and will maintain true faith and allegiance
thereto; that he will obey the laws, legal orders, and decrees promulgated by the duly constituted
authorities; that he is not a permanent resident or immigrant to a foreign country; that the obligation
imposed by his oath is assumed voluntarily, without mental reservation or purpose of evasion; and that the
facts stated in the certificate of candidacy are true to the best of his knowledge.
x x x x (Emphasis supplied)
A candidate for mayor in the 2010 local elections was thus required to provide 12 items of information in
the certificate of candidacy:22 name; nickname or stage name; gender; age; place of birth; political party
that nominated the candidate; civil status; residence/address; profession or occupation; post office address
for election purposes; locality of which the candidate is a registered voter; and period of residence in the
Philippines before 10 May 2010. The candidate also certifies four statements: a statement that the
candidate is a natural born or naturalized Filipino citizen; a statement that the candidate is not a permanent
resident of, or immigrant to, a foreign country; a statement that the candidate is eligible for the office he
seeks election; and a statement of the candidate’s allegiance to the Constitution of the Republic of the
Philippines.23 The certificate of candidacy should also be under oath, and filed within the period
prescribed by law.
The conviction of Lonzanida by final judgment, with the penalty of prisión mayor, disqualifies him
perpetually from holding any public office, or from being elected to any public office. This perpetual
disqualification took effect upon the finality of the judgment of conviction, before Lonzanida filed his
certificate of candidacy. The pertinent provisions of the Revised Penal Code are as follows:
Art. 27. Reclusion perpetua. — x x x
Prisión mayor and temporary disqualification. — The duration of the penalties of prisión mayor and
temporary disqualification shall be from six years and one day to twelve years, except when the
penalty of disqualification is imposed as an accessory penalty, in which case, it shall be that of the
principal penalty.
xxxx
Art. 30. Effects of the penalties of perpetual or temporary absolute disqualification. — The penalties
of perpetual or temporary absolute disqualification for public office shall produce the following effects:
1. The deprivation of the public offices and employments which the offender may have held, even if
conferred by popular election.
2. The deprivation of the right to vote in any election for any popular elective office or to be elected
to such office.
3. The disqualification for the offices or public employments and for the exercise of any of the rights
mentioned.
In case of temporary disqualification, such disqualification as is comprised in paragraphs 2 and 3 of this
article shall last during the term of the sentence.
4. The loss of all rights to retirement pay or other pension for any office formerly held.
Art. 31. Effects of the penalties of perpetual or temporary special disqualification. — The penalties
of perpetual or temporary special disqualification for public office, profession or calling shall produce
the following effects:
1. The deprivation of the office, employment, profession or calling affected.
2. The disqualification for holding similar offices or employments either perpetually or during the term of
the sentence, according to the extent of such disqualification.
Art. 32. Effects of the penalties of perpetual or temporary special disqualification for the exercise of the
right of suffrage. — The perpetual or temporary special disqualification for the exercise of the right of
suffrage shall deprive the offender perpetually or during the term of the sentence, according to the
nature of said penalty, of the right to vote in any popular election for any public office or to be elected to
such office. Moreover, the offender shall not be permitted to hold any public office during the period
of his disqualification.
Art. 42. Prisión mayor — Its accessory penalties. — The penalty of prision mayor shall carry with it that
of temporary absolute disqualification and that of perpetual special disqualification from the right of
suffrage which the offender shall suffer although pardoned as to the principal penalty, unless the same shall
have been expressly remitted in the pardon. (Emphasis supplied)
The penalty of prisión mayor automatically carries with it, by operation of law,24 the accessory penalties of
temporary absolute disqualification and perpetual special disqualification. Under Article 30 of the
Revised Penal Code, temporary absolute disqualification produces the effect of "deprivation of the right to
vote in any election for any popular elective office or to be elected to such office.” The duration of
temporary absolute disqualification is the same as that of the principal penalty of prisión mayor. On the
other hand, under Article 32 of the Revised Penal Code, perpetual special disqualification means that
"the offender shall not be permitted to hold any public office during the period of his
disqualification,” which is perpetually. Both temporary absolute disqualification and perpetual special
disqualification constitute ineligibilities to hold elective public office. A person suffering from these
ineligibilities is ineligible to run for elective public office, and commits a false material
representation if he states in his certificate of candidacy that he is eligible to so run.
In Lacuna v. Abes (Lacuna),25 the Court, speaking through Justice J.B.L. Reyes, explained the import of the
accessory penalty of perpetual special disqualification:
On the first defense of respondent-appellee Abes, it must be remembered that appellee’s conviction of a
crime penalized with prision mayor which carried the accessory penalties of temporary absolute
disqualification and perpetual special disqualification from the right of suffrage (Article 42, Revised Penal
Code); and Section 99 of the Revised Election Code disqualifies a person from voting if he had been
sentenced by final judgment to suffer one year or more of imprisonment.
The accessory penalty of temporary absolute disqualification disqualifies the convict for public office and
for the right to vote, such disqualification to last only during the term of the sentence (Article 27,
paragraph 3, & Article 30, Revised Penal Code) that, in the case of Abes, would have expired on 13
October 1961.
But this does not hold true with respect to the other accessory penalty of perpetual special disqualification
for the exercise of the right of suffrage. This accessory penalty deprives the convict of the right to vote or
to be elected to or hold public office perpetually, as distinguished from temporary special disqualification,
which lasts during the term of the sentence. Article 32, Revised Penal Code, provides:
Art. 32. Effects of the penalties of perpetual or temporary special disqualification for the exercise of the
right of suffrage. — The perpetual or temporary special disqualification for the exercise of the right of
suffrage shall deprive the offender perpetually or during the term of the sentence, according to the nature
of said penalty, of the right to vote in any popular election for any public office or to be elected to such
office. Moreover, the offender shall not be permitted to hold any public office during the period of
disqualification.
The word "perpetually" and the phrase "during the term of the sentence" should be applied distributively to enhance the electorate’s freedom of choice,29 is found both in the Constitution30 and the law.31 After being
their respective antecedents; thus, the word "perpetually" refers to the perpetual kind of special elected and serving for three consecutive terms, an elective local official cannot seek immediate reelection
disqualification, while the phrase "during the term of the sentence" refers to the temporary special for the same office in the next regular election32 because he is ineligible. One who has an ineligibility to
disqualification. The duration between the perpetual and the temporary (both special) are necessarily run for elective public office is not "eligible for [the] office." As used in Section 74, the word
different because the provision, instead of merging their durations into one period, states that such duration "eligible"33 means having the right to run for elective public office, that is, having all the qualifications and
is "according to the nature of said penalty" — which means according to whether the penalty is the none of the ineligibilities to run for the public office.
perpetual or the temporary special disqualification. (Emphasis supplied)
In Latasa v. Commission on Elections,34 petitioner Arsenio Latasa was elected mayor of the Municipality
Clearly, Lacuna instructs that the accessory penalty of perpetual special disqualification "deprives the of Digos, Davao del Sur in 1992, 1995, and 1998. The Municipality of Digos was converted into the City
convict of the right to vote or to be elected to or hold public office perpetually.” of Digos during Latasa’s third term. Latasa filed his certificate of candidacy for city mayor for the 2001
elections. Romeo Sunga, Latasa’s opponent, filed before the COMELEC a "petition to deny due course,
cancel certificate of candidacy and/or disqualification" under Section 78 on the ground that Latasa falsely
The accessory penalty of perpetual special disqualification takes effect immediately once the
represented in his certificate of candidacy that he is eligible to run as mayor of Digos City. Latasa argued
judgment of conviction becomes final. The effectivity of this accessory penalty does not depend on the
that he did not make any false representation. In his certificate of candidacy, Latasa inserted a footnote
duration of the principal penalty, or on whether the convict serves his jail sentence or not. The last sentence
after the phrase "I am eligible" and indicated "*Having served three (3) term[s] as municipal mayor and
of Article 32 states that "the offender shall not be permitted to hold any public office during the period of
now running for the first time as city mayor." The COMELEC First Division cancelled Latasa’s certificate
his [perpetual special] disqualification." Once the judgment of conviction becomes final, it is immediately
of candidacy for violation of the three-term limit rule but not for false material representation. This Court
executory. Any public office that the convict may be holding at the time of his conviction becomes vacant
affirmed the COMELEC En Banc’s denial of Latasa’s motion for reconsideration.
upon finality of the judgment, and the convict becomes ineligible to run for any elective public office
perpetually. In the case of Lonzanida, he became ineligible perpetually to hold, or to run for, any
elective public office from the time the judgment of conviction against him became final. The judgment We cancelled Marino Morales’ certificate of candidacy in Rivera III v. Commission on
of conviction was promulgated on 20 July 2009 and became final on 23 October 2009, before Lonzanida Elections (Rivera).35 We held that Morales exceeded the maximum three-term limit, having been elected
filed his certificate of candidacy on 1 December 2009 . 26 and served as Mayor of Mabalacat for four consecutive terms (1995 to 1998, 1998 to 2001, 2001 to 2004,
and 2004 to 2007). We declared him ineligible as a candidate for the same position for the 2007 to 2010
term. Although we did not explicitly rule that Morales’ violation of the three-term limit rule constituted
Perpetual special disqualification is a ground for a petition under Section 78 of the Omnibus Election
false material representation, we nonetheless granted the petition to cancel Morales’ certificate of
Code because this accessory penalty is an ineligibility, which means that the convict is not eligible to run
candidacy under Section 78. We also affirmed the cancellation of Francis Ong’s certificate of candidacy
for public office, contrary to the statement that Section 74 requires him to state under oath in his certificate
in Ong v. Alegre,36 where the "petition to disqualify, deny due course and cancel" Ong’s certificate of
of candidacy. As this Court held in Fermin v. Commission on Elections,27 the false material representation
candidacy under Section 78 was predicated on the violation of the three-term limit rule.
may refer to "qualifications or eligibility.” One who suffers from perpetual special disqualification is
ineligible to run for public office. If a person suffering from perpetual special disqualification files a
certificate of candidacy stating under oath that "he is eligible to run for (public) office," as expressly Loong, Fermin and Munder:
required under Section 74, then he clearly makes a false material representation that is a ground for a
petition under Section 78. As this Court explained in Fermin:
When Possession of a Disqualifying Condition
is Not a Ground for a Petition for Disqualification
Lest it be misunderstood, the denial of due course to or the cancellation of the CoC is not based on the lack
of qualifications but on a finding that the candidate made a material representation that is false, which may
It is obvious from a reading of the laws and jurisprudence that there is an overlap in the grounds for
relate to the qualifications required of the public office he/she is running for. It is noted that the
eligibility and ineligibility vis-à-vis qualifications and disqualifications. For example, a candidate may
candidate states in his/her CoC that he/she is eligible for the office he/she seeks. Section 78 of the
represent that he is a resident of a particular Philippine locality37 when he is actually a permanent resident
OEC, therefore, is to be read in relation to the constitutional and statutory provisions
of another country.38 In cases of such overlap, the petitioner should not be constrained in his choice of
on qualifications or eligibility for public office. If the candidate subsequently states a material
remedy when the Omnibus Election Code explicitly makes available multiple remedies. 39 Section 78 allows
representation in the CoC that is false, the COMELEC, following the law, is empowered to deny due
the filing of a petition to deny due course or to cancel a certificate of candidacy before the election, while
course to or cancel such certificate. Indeed, the Court has already likened a proceeding under Section 78
Section 253 allows the filing of a petition for quo warranto after the election. Despite the overlap of the
to a quo warranto proceeding under Section 253 of the OEC since they both deal with the eligibility or
grounds, one should not confuse a petition for disqualification using grounds enumerated in Section 68
qualification of a candidate, with the distinction mainly in the fact that a "Section 78" petition is filed
with a petition to deny due course or to cancel a certificate of candidacy under Section 78.
before proclamation, while a petition for quo warranto is filed after proclamation of the winning
candidate.28(Emphasis supplied)
The distinction between a petition under Section 68 and a petition under Section 78 was discussed
in Loong v. Commission on Elections40 with respect to the applicable prescriptive period. Respondent Nur
Latasa, Rivera and Ong:
Hussein Ututalum filed a petition under Section 78 to disqualify petitioner Benjamin Loong for the office
of Regional Vice-Governor of the Autonomous Government of Muslim Mindanao for false representation
The Three-Term Limit Rule as a Ground for Ineligibility as to his age. The petition was filed 16 days after the election, and clearly beyond the prescribed 25 day
period from the last day of filing certificates of candidacy. This Court ruled that Ututalum’s petition was
one based on false representation under Section 78, and not for disqualification under Section 68. Hence,
Section 74 requires the candidate to certify that he is eligible for the public office he seeks election. Thus,
the 25-day prescriptive period provided in Section 78 should be strictly applied. We recognized the
Section 74 states that "the certificate of candidacy shall state that the person filing x x x is eligible for
possible gap in the law:
said office.” The three-term limit rule, enacted to prevent the establishment of political dynasties and to
It is true that the discovery of false representation as to material facts required to be stated in a certificate
of candidacy, under Section 74 of the Code, may be made only after the lapse of the 25-day period
prescribed by Section 78 of the Code, through no fault of the person who discovers such
misrepresentations and who would want the disqualification of the candidate committing the
misrepresentations. It would seem, therefore, that there could indeed be a gap between the time of the
discovery of the misrepresentation, (when the discovery is made after the 25-day period under Sec. 78 of
the Code has lapsed) and the time when the proclamation of the results of the election is made. During this
so-called "gap" the would-be petitioner (who would seek the disqualification of the candidate) is left with
nothing to do except to wait for the proclamation of the results, so that he could avail of a remedy against
the misrepresenting candidate, that is, by filing a petition for quo warranto against him. Respondent
Commission sees this "gap" in what it calls a procedural gap which, according to it, is unnecessary and
should be remedied.
At the same time, it can not be denied that it is the purpose and intent of the legislative branch of the
government to fix a definite time within which petitions of protests related to eligibility of candidates for
elective offices must be filed, as seen in Sections 78 and 253 of the Code. Respondent Commission may
have seen the need to remedy this so-called “procedural gap", but it is not for it to prescribe what the law
does not provide, its function not being legislative. The question of whether the time to file these petitions
or protests is too short or ineffective is one for the Legislature to decide and remedy.41
In Fermin v. Commission on Elections,42 the issue of a candidate’s possession of the required one-year
residency requirement was raised in a petition for disqualification under Section 68 instead of a petition to
deny due course or to cancel a certificate of candidacy under Section 78. Despite the question of the one-
year residency being a proper ground under Section 78, Dilangalen, the petitioner before the COMELEC
in Fermin, relied on Section 5(C)(1) and 5(C)(3)(a)(4) of COMELEC Resolution No. 7800 43 and filed the
petition under Section 68. In Fermin, we ruled that "a COMELEC rule or resolution cannot supplant or
vary legislative enactments that distinguish the grounds for disqualification from those of ineligibility,
and the appropriate proceedings to raise the said grounds."44 A petition for disqualification can only be
premised on a ground specified in Section 12 or 68 of the Omnibus Election Code or Section 40 of the
Local Government Code. Thus, a petition questioning a candidate’s possession of the required one-year
residency requirement, as distinguished from permanent residency or immigrant status in a foreign country,
should be filed under Section 78, and a petition under Section 68 is the wrong remedy.
In Munder v. Commission on Elections,45 petitioner Alfais Munder filed a certificate of candidacy for
Mayor of Bubong, Lanao del Sur on 26 November 2009. Respondent Atty. Tago Sarip filed a petition for
Munder’s disqualification on 13 April 2010. Sarip claimed that Munder misrepresented that he was a
registered voter of Bubong, Lanao del Sur, and that he was eligible to register as a voter in 2003 even
though he was not yet 18 years of age at the time of the voter’s registration. Moreover, Munder’s
certificate of candidacy was not accomplished in full as he failed to indicate his precinct and did not affix
his thumb-mark. The COMELEC Second Division dismissed Sarip’s petition and declared that his grounds
are not grounds for disqualification under Section 68 but for denial or cancellation of Munder’s certificate
of candidacy under Section 78. Sarip’s petition was filed out of time as he had only 25 days after the filing
of Munder’s certificate of candidacy, or until 21 December 2009, within which to file his petition.
The COMELEC En Banc, however, disqualified Munder. In reversing the COMELEC Second Division,
the COMELEC En Banc did not rule on the propriety of Sarip’s remedy but focused on the question of
whether Munder was a registered voter of Bubong, Lanao del Sur. This Court reinstated the COMELEC
Second Division’s resolution. This Court ruled that the ground raised in the petition, lack of registration as
voter in the locality where he was running as a candidate, is inappropriate for a petition for disqualification.
We further declared that with our ruling in Fermin, we had already rejected the claim that lack of
substantive qualifications of a candidate is a ground for a petition for disqualification under Section 68.
The only substantive qualification the absence of which is a ground for a petition under Section 68 is the
candidate’s permanent residency or immigrant status in a foreign country.
The dissenting opinions place the violation of the three-term limit rule as a disqualification under Section
68 as the violation allegedly is "a status, circumstance or condition which bars him from running for public
office despite the possession of all the qualifications under Section 39 of the [Local Government Code]."
In so holding the dissenting opinions write in the law what is not found in the law. Section 68 is explicit as
to the proper grounds for disqualification under said Section. The grounds for filing a petition for
disqualification under Section 68 are specifically enumerated in said Section. However, contrary to the
specific enumeration in Section 68 and contrary to prevailing jurisprudence, the dissenting opinions add to
the enumerated grounds the violation of the three-term limit rule and falsification under the Revised Penal
Code, which are obviously not found in the enumeration in Section 68.
The dissenting opinions equate Lonzanida’s possession of a disqualifying condition (violation of the three-
term limit rule) with the grounds for disqualification under Section 68. Section 68 is explicit as to the
proper grounds for disqualification: the commission of specific prohibited acts under the Omnibus Election
Code and possession of a permanent residency or immigrant status in a foreign country. Any other false
representation regarding a material fact should be filed under Section 78, specifically under the candidate’s
certification of his eligibility. In rejecting a violation of the three-term limit as a condition for eligibility,
the dissenting opinions resort to judicial legislation, ignoring the verba legis doctrine and well-established
jurisprudence on this very issue.
In a certificate of candidacy, the candidate is asked to certify under oath his eligibility, and thus
qualification, to the office he seeks election. Even though the certificate of candidacy does not specifically
ask the candidate for the number of terms elected and served in an elective position, such fact is material in
determining a candidate’s eligibility, and thus qualification for the office. Election to and service of the
same local elective position for three consecutive terms renders a candidate ineligible from running for the
same position in the succeeding elections. Lonzanida misrepresented his eligibility because he knew full
well that he had been elected, and had served, as mayor of San Antonio, Zambales for more than three
consecutive terms yet he still certified that he was eligible to run for mayor for the next succeeding term.
Thus, Lonzanida’s representation that he was eligible for the office that he sought election constitutes false
material representation as to his qualification or eligibility for the office.
Legal Duty of COMELEC
to Enforce Perpetual Special Disqualification
Even without a petition under Section 78 of the Omnibus Election Code, the COMELEC is under a legal
duty to cancel the certificate of candidacy of anyone suffering from perpetual special disqualification to
run for public office by virtue of a final judgment of conviction. The final judgment of conviction is
judicial notice to the COMELEC of the disqualification of the convict from running for public office. The
law itself bars the convict from running for public office, and the disqualification is part of the final
judgment of conviction. The final judgment of the court is addressed not only to the Executive branch, but
also to other government agencies tasked to implement the final judgment under the law.
Whether or not the COMELEC is expressly mentioned in the judgment to implement the disqualification,
it is assumed that the portion of the final judgment on disqualification to run for elective public office is
addressed to the COMELEC because under the Constitution the COMELEC is duty bound to "enforce and
administer all laws and regulations relative to the conduct of an election."46 The disqualification of a
convict to run for elective public office under the Revised Penal Code, as affirmed by final judgment of a
competent court, is part of the enforcement and administration of "all the laws" relating to the conduct of
elections.
Effect of a Void Certificate of Candidacy
A cancelled certificate of candidacy void ab initio cannot give rise to a valid candidacy, and much less to
valid votes.47 We quote from the COMELEC’s 2 February 2011 Resolution with approval:
As early as February 18, 2010, the Commission speaking through the Second Division had already ordered
the cancellation of Lonzanida’s certificate of candidacy, and had stricken off his name in the list of official
candidates for the mayoralty post of San Antonio, Zambales. Thereafter, the Commission En Banc in its
resolution dated August 11, 2010 unanimously affirmed the resolution disqualifying Lonzanida. Our
findings were likewise sustained by the Supreme Court no less. The disqualification of Lonzanida is not
simply anchored on one ground. On the contrary, it was emphasized in our En Banc resolution that
Lonzanida’s disqualification is two-pronged: first, he violated the constitutional fiat on the three-term
limit; and second, as early as December 1, 2009, he is known to have been convicted by final judgment for
ten (10) counts of Falsification under Article 171 of the Revised Penal Code. In other words, on election
day, respondent Lonzanida’s disqualification is notoriously known in fact and in law. Ergo, since
respondent Lonzanida was never a candidate for the position of Mayor [of] San Antonio, Zambales, the
votes cast for him should be considered stray votes. Consequently, Intervenor Antipolo, who remains as
the sole qualified candidate for the mayoralty post and obtained the highest number of votes, should now
be proclaimed as the duly elected Mayor of San Antonio, Zambales. 48 (Boldfacing and underscoring in the
original; italicization supplied)

Lonzanida's certificate of candidacy was cancelled because he was ineligible or not qualified to run for
Mayor.1âwphi1Whether his certificate of candidacy is cancelled before or after the elections is immaterial
because the cancellation on such ground means he was never a candidate from the very beginning, his
certificate of candidacy being void ab initio. There was only one qualified candidate for Mayor in the May
201 0 elections - Anti polo, who therefore received the highest number of votes.

WHEREFORE, the petition is DISMISSED. The Resolution dated 2 February 2011 and the Order dated
12 January 2011 of the COMELEC En Bane in SPA No. 09-158 (DC) are AFFIRMED. The COMELEC
En Bane is DIRECTED to constitute a Special Municipal Board of Canvassers to proclaim Estela D.
Antipolo as the duly elected Mayor of San Antonio, Zambales. Petitioner Efren Racel Aratea
is ORDERED to cease and desist from discharging the functions of the Office of the Mayor of San
Antonio, Zambales.

SO ORDERED.
 Petitioner was later offered the position of Director IV of MMDA Public Health and Safety Services and/or
MMDA consultant. He turned down the offer, claiming that it was a demotion in rank.
G.R. No. 194994 April 16, 2013
Demanding payment of his salary and reinstatement in the monthly payroll, 9 petitioner sent a letter on 5
December 2010 to Edenison Faisan, assistant general manager (AGM) for Finance and Administration;
EMMANUEL A. DE CASTRO, Petitioner,
and Lydia Domingo, Director III, Administrative Services. For his failure to obtain an action or a response
vs.
from MMDA, he then made a formal demand for his reinstatement as AGMO through a letter addressed to
EMERSON S. CARLOS, Respondent.
the Office of the President on 17 December 2010.10

DECISION
However, on 4 January 2011, President Benigno S. Aquino III (President Aquino) appointed respondent as
the new AGMO of the MMDA.11 On 10 January 2011, the latter took his oath of office.
SERENO, CJ.:
Hence, the instant Petition.
Before us is a Petition for the issuance of a writ of quo warranto under Rule 66 filed by Emmanuel A. de
Castro (petitioner) seeking to oust respondent Emerson S. Carlos (respondent) from the position of
The Office of the Solicitor General (OSG), representing respondent, filed its Comment on 19 August
assistant general manager for operations (AGMO) of the Metropolitan Manila Development Authority
2011.12However, upon motion of petitioner, it was disqualified from representing respondent. Thus, a
(MMDA).
private law firm13entered an appearance as counsel for respondent and adopted the Comment filed by the
OSG.14
On 29 July 2009, then President Gloria Macapagal Arroyo appointed petitioner as AGM0. 1 His
appointment was concurred in by the members of the Metro Manila Council in MMDA Resolution No. 09-
Petitioner filed his Reply on 17 November 2011.
10, Series of 2009.2 He took his oath on 17 August 2009 before then Chairperson Bayani F. Fernando. 3

ISSUES
Meanwhile, on 29 July 2010, Executive Secretary Paquito Ochoa issued Office of the President (OP)
Memorandum Circular No. 2, Series of 2010, amending OP Memorandum Circular No. 1, Series of 2010.
Petitioner raises the following issues15 for the consideration of this Court:
OP Memorandum Circular No. 2 states:
(1) Whether respondent Emerson S. Carlos was validly appointed by President Aquino to the position of
AGMO of the MMDA;
2. All non-Career Executive Service Officials (non-CESO) occupying Career Executive Service (CES)
positions in all agencies of the executive branch shall remain in office and continue to perform their duties
and discharge their responsibility until October 31, 2010 or until their resignations have been accepted (2) Whether petitioner Emmanuel A. de Castro is entitled to the position of AGMO; and
and/or until their respective replacements have been appointed or designated, whichever comes first, unless
they are reappointed in the meantime.4
(3) Whether or not respondent should pay petitioner the salaries and financial benefits he received during
his illegal tenure as AGMO of the MMDA.
On 30 July 2010, Atty. Francis N. Tolentino, chairperson of the MMDA, issued Office Order No.
106,5 designating Corazon B. Cruz as officer-in-charge (OIC) of the Office of the AGMO. Petitioner was
THE COURT’S RULING
then reassigned to the Legal and Legislative Affairs Office, Office of the General Manager. The service
vehicle and the office space previously assigned to him were withdrawn and assigned to other employees.
Petitioner contends that Section 2(3), Article IX(B) of the 1987 Constitution guarantees the security of
tenure of employees in the civil service. He further argues that his appointment as AGMO is not covered
Subsequently, on 2 November 2010, Chairperson Tolentino designated respondent as OIC of the Office of
by OP Memorandum Circular No. 2, since it is not a CES position as determined by the CESB.
the AGMO by virtue of Memorandum Order No. 24,6 which in turn cited OP Memorandum Circular No. 2
as basis. Thereafter, the name of petitioner was stricken off the MMDA payroll, and he was no longer paid
his salary beginning November 2010. On the other hand, respondent posits that the AGMO position belongs to the CES; thus, in order to have
security of tenure, petitioner, must be a Career Executive Service official (CESO). Respondent maintains
that the function of an AGM is executive and managerial in nature. Thus, considering that petitioner is a
Petitioner sought a clarification7 from the Career Executive Service Board (CESB) as to the proper
non-CESO occupying a CES position, he is covered by OP Memorandum Circular Nos. 1 and 2.
classification of the position of AGMO. In her reply,8 Executive Director Maria Anthonette Allones
Respondent likewise raises the issue of procedural infirmity in the direct recourse to the Supreme Court by
(Executive Director Allones), CESO I, stated that the position of AGMO had not yet been classified and
petitioner, who thereby failed to adhere to the doctrine of hierarchy of courts.
could not be considered as belonging to the Career Executive Service (CES). She further stated that a
perusal of the appointment papers of petitioner showed that he was not holding a coterminous position. In
sum, she said, he was not covered by OP Memorandum Circular Nos. 1 and 2. Hierarchy of Courts
As to the procedural issue, petitioner submits that a direct recourse to this Court is warranted by the urgent
demands of public interest, particularly the veritable need for stability in the civil service and the protection
of the rights of civil servants. Moreover, considering that no other than the President of the Philippines is
the appointing authority, petitioner doubts if a trial court judge or an appellate court justice, with a prospect
of promotion in the judiciary would be willing to go against a presidential appointment.
Although Section 5(1) of Article VIII of the 1987 Constitution explicitly provides that the Supreme Court
has original jurisdiction over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas
corpus, the jurisdiction of this Court is not exclusive but is concurrent with that of the Court of Appeals
and regional trial court and does not give petitioner unrestricted freedom of choice of court forum.16 The
hierarchy of courts must be strictly observed.
Settled is the rule that "the Supreme Court is a court of last resort and must so remain if it is to
satisfactorily perform the functions assigned to it by the fundamental charter and immemorial
tradition."17 A disregard of the doctrine of hierarchy of courts warrants, as a rule, the outright dismissal of a
petition.18
A direct invocation of this Court’s jurisdiction is allowed only when there are special and important
reasons that are clearly and specifically set forth in a petition. 19 The rationale behind this policy arises from
the necessity of preventing (1) inordinate demands upon the time and attention of the Court, which is better
devoted to those matters within its exclusive jurisdiction; and (2) further overcrowding of the Court’s
docket.20
In this case, petitioner justified his act of directly filing with this Court only when he filed his Reply and
after respondent had already raised the procedural infirmity that may cause the outright dismissal of the
present Petition. Petitioner likewise cites stability in the civil service and protection of the rights of civil
servants as rationale for disregarding the hierarchy of courts.
Petitioner’s excuses are not special and important circumstances that would allow a direct recourse to this
Court. More so, mere speculation and doubt to the exercise of judicial discretion of the lower courts are not
and cannot be valid justifications to hurdle the hierarchy of courts. Thus, the Petition must be dismissed.
Nature of the AGMO Position
Even assuming that petitioner’s direct resort to this Court is permissible, the Petition must still be
dismissed for lack of merit.
"A petition for quo warranto is a proceeding to determine the right of a person to use or exercise a
franchise or an office and to oust the holder from the enjoyment, thereof, if the claim is not well-founded,
or if his right to enjoy the privilege has been forfeited."21 Where the action is filed by a private person, in
his own name, he must prove that he is entitled to the controverted position, otherwise, respondent has a
right to the undisturbed possession of the office.22
The controversy arose from the issuance of OP Memorandum Circular Nos. 1 and 2, which applies to all
non-CESO’s occupying CES positions in all agencies of the executive branch. Petitioner, being a non-
CESO, avers that he is not covered by these OP memoranda considering that the AGMO of the MMDA is
a non-CES position.
In order to settle the controversy, there is a need to determine the nature of the contentious position of
AGMO of the MMDA.
Career vs. non-career
Section 4 of Republic Act No. (R.A.) 7924,23 otherwise known as the MMDA Charter, specifically created
the position of AGMO. It reads as follows:
Sec. 4 Metro Manila Council. x x x.
xxxx
The Council shall be headed by a Chairman, who shall be appointed by the President and who shall
continue to hold office at the discretion of the appointing authority. He shall be vested with the rank, rights,
privileges, disqualifications, and prohibitions of a Cabinet member.
The Chairman shall be assisted by a General Manager, an Assistant General Manager for Finance and
Administration, an Assistant General Manager for Planning and an Assistant General Manager for
Operations, all of whom shall be appointed by the President with the consent and concurrence of the
majority of the Council, subject to civil service laws and regulations. They shall enjoy security of tenure
and may be removed for cause in accordance with law. (Emphasis supplied)
Executive Order No. (E.O.) 292, otherwise known as The Revised Administrative Code of 1987, provides
for two classifications of positions in the civil service: career and non-career.24
Career service is characterized by the existence of security of tenure, 25 as contradistinguished from non-
career service whose tenure is coterminous with that of the appointing authority; or subject to the latter’s
pleasure; or limited to a period specified by law or to the duration of a particular project for which purpose
the appointment was made.26
Applying the foregoing distinction to the instant case, this Court finds that an AGMO holds a career
position, considering that the MMDA Charter specifically provides that AGMs enjoy security of tenure –
the core characteristic of a career service, as distinguished from a non-career service position.
CES vs. non-CES
Career service includes the following:
(1) Open Career positions for appointment to which prior qualification in an appropriate examination is
required;
(2) Closed Career positions which are scientific, or highly technical in nature; these include the faculty and
academic staff of state colleges and universities, and scientific and technical positions in scientific or
research institutions which shall establish and maintain their own merit systems;
(3) Positions in the Career Executive Service; namely, Undersecretary, Assistant Secretary, Bureau
Director, Assistant Bureau Director, Regional Director, Assistant Regional Director, Chief of Department
Service and other officers of equivalent rank as may be identified by the Career Executive Service Board,
all of whom are appointed by the President;
(4) Career officers, other than those in the Career Executive Service, who are appointed by the President,
such as the Foreign Service Officers in the Department of Foreign Affairs;
(5) Commissioned officers and enlisted men of the Armed Forces which shall maintain a separate merit
system;
(6) Personnel of government-owned or controlled corporations, whether performing governmental or
proprietary functions, who do not fall under the non-career service; and
(7) Permanent laborers, whether skilled, semi-skilled, or unskilled.27 (Emphasis supplied)
a. The Career Executive Service includes the positions of Undersecretary, Assistant Secretary, Bureau
director, Assistant Bureau Director, regional Director (department-wide and bureau-wide), Assistant
Regional Director (department-wide and bureau-wide), and Chief of Department Service;
b. Unless provided otherwise, all other managerial or executive positions in the government, including
government-owned or controlled corporations with original charters are embraced within the CES provided
that they meet the following criteria:

i.) The position is a career position;

In Civil Service Commission v. Court of Appeals and PCSO,28 the Court clarified the positions covered by
the CES:
ii.) The position is above division chief level; and,
Thus, from the long line of cases cited above, in order for a position to be covered by the CES, two
elements must concur. First, the position must either be (1) a position enumerated under Book V, Title I, iii.) The duties and responsibilities of the position require performance of executive and managerial
Subsection A, Chapter 2, Section 7(3) of the Administrative Code of 1987, i.e., Undersecretary, Assistant functions.
Secretary, Bureau Director, Assistant Bureau Director, Regional Director, Assistant Regional Director,
Chief of Department Service, or (2) a position of equal rank as those enumerated, and identified by the
Without a doubt, the AGMO position is not one of those enumerated in the above-cited paragraph(a) but it
Career Executive Service Board to be such position of equal rank. Second, the holder of the position must
clearly falls under paragraph(b) considering that it belongs to a government-owned and controlled
be a presidential appointee. Failing in any of these requirements, a position cannot be considered as one
corporation with an original charter. The nature of AGMO is clear from the provisions of the MMDA
covered by the third-level or CES. (Emphasis supplied)
Charter.

In sum, there are two elements required for a position to be considered as CES:
First, we have already determined that an AGMO is a career position that enjoys security of tenure by
virtue of the MMDA Charter.
1) The position is among those enumerated under Book V, Title I, Subtitle A, Chapter 2, Section 7(3) of
the Administrative Code of 1987 OR a position of equal rank as those enumerated and identified by the
Second, it is undisputed that the position of AGMO is above the division chief level, which is equivalent to
CESB to be such position of equal rank; AND
the rank of assistant secretary with Salary Grade 29.34

2) The holder of the position is a presidential appointee. Records show that in reply29 to Chairperson
Third, a perusal of the MMDA Charter readily reveals that the duties and responsibilities of the position
Tolentino’s query on whether the positions of general manager and AGM of the MMDA are covered by
require the performance of executive and managerial functions.
the CES,30 the CESB – thru Executive Director Allones – categorically stated that these positions are not
among those covered by the CES.
Section 12.4, Rule IV of the Rules and Regulations Implementing R.A. 7924 provides the powers,
functions, duties and responsibilities of an AGMO, as follows:
Upon petitioner’s separate inquiry on the matter,31 the CESB similarly responded that the AGMO’s
position could not be considered as belonging to the CES.32 Additionally, Executive Director Allones said
that petitioner was not covered by OP Memorandum Circular Nos. 1 and 2, to wit: 12.4 Assistant General Manager for Operations

A cursory perusal of your appointment papers would show that it does not bear any indication that you are
holding a coterminous appointment. Neither your position as AGMO can be considered as created in
excess of the authorized staffing pattern since RA 7924, the law that created the MMDA clearly provided
for such position. As further stated above, your position will not fall under paragraph No. 2 of OP MC 1
because it is not yet considered as belonging to the CES. Hence, we posit that you are not covered by OP
MC 1 and 2.33
However, contrary to Executive Director Allones’ statement, the CESB, through Resolution No. 799
already declared certain positions meeting the criteria set therein as embraced within the CES.
It is worthy of note that CESB Resolution No. 799 was issued on 19 May 2009, even prior to petitioner’s
appointment on 29 July 2009. Moreover, as early as 31 May 1994, the above classification was already
embodied in CSC Resolution No. 34-2925, circularized in CSC Memorandum Circular 21, Series of 1994.
Resolution No. 799 classified the following positions as falling within the coverage of the CES:
The Assistant General Manager for Operations shall perform the following functions:
a. Establish a mechanism for coordinating and operationalizing the delivery of metro-wide basic services;
b. Maintain a monitoring system for the effective evaluation of the implementation of approved policies,
plans and programs for the development of Metropolitan Manila;
c. Mobilize the participation of local government units, executive departments or agencies of the national
government, and the private sector in the delivery of metro-wide services; and
d. Operate a central radio communication system.
He shall perform such other duties as are incidental or related to the above functions or as may be assigned
from time to time.
An AGMO performs functions that are managerial in character; exercises management over people,
resource, and/or policy; and assumes functions like planning, organizing, directing, coordinating,
controlling, and overseeing the activities of MMDA. The position requires the application of managerial or
supervisory skills necessary to carry out duties and responsibilities involving functional guidance,
leadership, and supervision.
For the foregoing reasons, the position of AGMO is within the coverage of the CES.
In relation thereto, positions in the career service, for which appointments require examinations, are
grouped into three major levels:35
Sec. 8. Classes of positions in the Career Service. — (1) Classes of positions in the career service
appointment to which requires examinations shall be grouped into three major levels as follows:
(a) The first level shall include clerical, trades, crafts and custodial service positions which involve non-
professional or sub-professional work in a non-supervisory or supervisory capacity requiring less than four
years of collegiate studies;
(b) The second level shall include professional, technical, and scientific positions which involve
professional, technical or scientific work in a non-supervisory or supervisory capacity requiring at least
four years of college work up to Division Chief levels; and
(c) The third level shall cover positions in the Career Executive Service. (Emphasis supplied)
Entrance to different levels requires corresponding civil service eligibilities. 36 Those at the third level (CES
positions) require career service executive eligibility (CSEE) as a requirement for permanent
appointment.37
Evidently, an AGMO should possess all the qualifications required by third-level career service within the
CES. In this case, petitioner does not have the required eligibility. Therefore, we find that his appointment
to the position of AGMO was merely temporary.
Amores v. Civil Service Commission38 is instructive as to the nature of temporary appointments in the
CES. The Court held therein that an appointee cannot hold a position in a permanent capacity without the
required CES eligibility:
We begin with the precept, firmly established by law and jurisprudence that a permanent appointment in
the civil service is issued to a person who has met the requirements of the position to which the
appointment is made in accordance with law and the rules issued pursuant thereto. An appointment is
permanent where the appointee meets all the requirements for the position to which he is being appointed,
including the appropriate eligibility prescribed, and it is temporary where the appointee meets all the
requirements for the position except only the appropriate civil service eligibility.
xxxx
With particular reference to positions in the career executive service (CES), the requisite civil service
eligibility is acquired upon passing the CES examinations administered by the CES Board and the
subsequent conferment of such eligibility upon passing the examinations. Once a person acquires
eligibility, he either earns the status of a permanent appointee to the CES position to which he has
previously been appointed, or he becomes qualified for a permanent appointment to that position provided
only that he also possesses all the other qualifications for the position. Verily, it is clear that the possession
of the required CES eligibility is that which will make an appointment in the career executive service a
permanent one. Petitioner does not possess such eligibility, however, it cannot be said that his appointment
to the position was permanent.
Indeed, the law permits, on many occasions, the appointment of non-CES eligibles to CES positions in the
government in the absence of appropriate eligibles and when there is necessity in the interest of public
service to fill vacancies in the government. But in all such cases, the appointment is at best merely
temporary as it is said to be conditioned on the subsequent obtention of the required CES eligibility. This
rule, according to De Leon v. Court of Appeals, Dimayuga v. Benedicto, Caringal v. Philippine Charity
Sweepstakes Office, and Achacoso v. Macaraig, is invariable even though the given appointment may have
been designated as permanent by the appointing authority.
xxxx
Security of tenure in the career executive service, which presupposes a permanent appointment, takes place
upon passing the CES examinations administered by the CES Board x x x.
Petitioner undisputedly lacked CES eligibility. Thus, he did not hold the position of AGMO in a permanent
capacity or acquire security of tenure in that position. Otherwise stated, his appointment was temporary
and "co-terminus with the appointing authority."39 In Carillo v. CA,40 this Court ruled that "one who holds
a temporary appointment has no fixed tenure of office; his employment can be terminated at the pleasure of
the appointing power, there being no need to show that the termination is for cause." Therefore, we find no
violation of security of tenure when petitioner was replaced by respondent upon the latter’s appointment to
the position of AGMO by President Aquino.
Even granting for the sake of argument that the position of AGMO is yet to be classified by the CESB,
petitioner’s appointment is still deemed coterminous pursuant to CESB Resolution No. 945 issued on 14
June 2011, which reads:
WHEREAS, on November 23, 2010, the Supreme Court in the case of PCSO v. CSC, G.R. NO. 185766
and G.R. No. 185767 limited the coverage of positions belonging to the CES to positions requiring
Presidential appointments.
WHEREAS, in the same vein, CES positions have now become synonymous to third level positions by
virtue of the said ruling.
WHEREFORE, foregoing premises considered, the Board RESOLVES, as it is hereby RESOLVED, to
issue the following guidelines to clarify the policy on the coverage of CES and its classification:
1. For career service positions requiring Presidential appointments expressly enumerated under Section
7(3), Chapter 2, Subtitle A, Title 1, Book V of the Administrative Code of 1987 namely:
Undersecretary, Assistant Secretary, Bureau Director, Assistant Bureau Director, Regional Director,
Assistant Regional Director, and Chief of Department Service, no classification of position is necessary to
place them under the coverage of the CES, except if they belong to Project Offices, in which case a
position classification is required, in consultation with the Department of Budget and Management (DBM).
2. For positions requiring Presidential appointments other than those enumerated above, a classification of
positions is necessary which shall be conducted by the Board, upon request of the head of office of the
government department/agency concerned, to place them under the coverage of the CES provided they
comply with the following criteria:

i.) The position is a career position;

ii.) The position is above division chief level; and,

iii.)The duties and responsibilities of the position require the performance of executive and managerial
functions.

All appointments to positions which have not been previously classified as part of the CES would be
deemed co-terminus with the appointing authority. (Emphasis supplied)

Therefore, considering that petitioner is an appointee of then President Arroyo whose term ended on 30
June 2010, petitioner’s term of office was also deemed terminated upon the assumption of President
Aquino.

Likewise, it is inconsequential that petitioner was allegedly replaced by another non-CESO eligible. In a
quo warranto proceeding, the person suing must show that he has a clear right to the office allegedly held
unlawfully by another. Absent a showing of that right, the lack of qualification or eligibility of the
supposed usurper is immaterial.41

All the foregoing considered, the petition merits an outright dismissal for disregarding the hierarchy of
courts and petitioner’s lack of cause of action against respondent for failure to sufficiently show that he has
undisturbed rights to the position of AGMO of the MMDA.

WHEREFORE, premises considered, the Petition is DENIED.

SO ORDERED.
 material misrepresentations in her COC, i.e., "(i) that she is a resident of Brgy. Lupac, Boac,
Marinduque; (ii) that she is a natural-born Filipino citizen; (iii) that she is not a permanent resident of, or
an immigrant to, a foreign country; (iv) that her date of birth is July 3, 1964; (v) that her civil status is
G.R. No. 211140
single; and finally (vi) that she is eligible for the office she seeks to be elected to."5 The case was docketed
as SPA No. 13-053 (DC), entitled "Joseph Socorro B. Tan v. Atty. Regina Ongsiako Reyes."
LORD ALLAN JAY Q. VELASCO, Petitioner,
vs.
On March 27, 2013, the COMELEC First Division resolved to grant the petition; hence, Reyes's COC was
HON. SPEAKER FELICIANO R. BELMONTE, JR., SECRETARY GENERAL MARILYN1 B.
accordingly cancelled. The dispositive part of said resolution reads:
BARUA-YAP AND REGINA ONGSIAKO REYES, Respondents.

WHEREFORE, in view of the foregoing, the instant Petition is GRANTED. Accordingly, the Certificate
DECISION
of Candidacy of respondent REGINA ONGSIAKO REYES is hereby CANCELLED.6

LEONARDO-DE CASTRO, J.:

Aggrieved, Reyes filed a motion for reconsideration thereto.

In the same manner that this Court is cautioned to be circumspect because one party is the son of a sitting
But while said motion was pending resolution, the synchronized local and national elections were held on
Justice of this Court, so too must we avoid abjuring what ought to be done as dictated by law and justice
May 13, 2013.
solely for that reason.

The day after, or on May 14, 2013, the COMELEC En Banc affirmed the resolution of the COMELEC
Before this Court is a Petition for Mandamus filed under Rule 65 of the Rules of Court, as amended, by
First Division, to wit:
Lord Allan Jay Q. Velasco (Velasco) against Hon. Feliciano R. Belmonte, Jr. (Speaker Belmonte,
Jr.), Speaker, House of Representatives, Hon. Marilyn B. Barua-Yap (Sec. Gen. Barua-Yap ), Secretary
General, House of Representatives, and Hon. Regina Ongsiako Reyes (Reyes), Representative, Lone WHEREFORE, premises considered, the Motion for Reconsideration is hereby DENIED for lack of
District of the Province of Marinduque . merit. The March 27, 2013 Resolution of the Commission (First Division) is hereby AFFIRMED.7

Velasco principally alleges that he is the "legal and rightful winner during the May 13, 2013 elections in A copy of the foregoing resolution was received by the Provincial Election Supervisor of Marinduque,
accordance with final and executory resolutions of the Commission on Elections (COMELEC) and [this] through Executive Assistant Rossini M. Oscadin, on May 15, 2013.
Honorable Court;"2 thus, he seeks the following reliefs:
Likewise, Reyes's counsel, Atty. Nelia S. Aureus, received a copy of the same on May 16, 2013.
a. that a WRIT OF MANDAMUS against the HON. SPEAKER FELICIANO BELMONTE,
JR. be issued ordering said respondent to administer the proper OATH in favor of petitioner
On May 18, 2013, despite its receipt of the May 14, 2013 COMELEC Resolution, the Marinduque
Lord Allan Jay Q. Velasco for the position of Representative for the Lone District of
Provincial Board of Canvassers (PBOC) proclaimed Reyes as the winner of the May 13, 2013 elections for
Marinduque; -and allow petitioner to assume the position of representative for Marinduque and
the position of Representative of the Lone District of Marinduque.
exercise the powers and prerogatives of said position of Marinduque representative;

On May 31, 2013, Velasco filed an Election Protest Ad Cautelam against Reyes in the House of
b. that a WRIT OF MANDAMUS against SECRETARY-GENERAL [MARILYN] BARUA-
Representatives Electoral Tribunal (HRET) docketed as HRET Case No. 13-028, entitled "Lord Allan Jay
YAP be issued ordering said respondent to REMOVE the name of Regina 0. Reyes in the Roll
Q. Velasco v. Regina Ongsiako Reyes."
of Members of the House of Representatives and to REGISTER the name of petitioner Lord
Allan Jay Q. Velasco, herein petitioner, in her stead; and
Also on the same date, a Petition for Quo Warranto Ad Cautelam was also filed against Reyes in the
HRET docketed as HRET Case No. 13-027, entitled "Christopher P Matienzo v. Regina Ongsiako Reyes."
c. that a TEMPORARY RESTRAINING ORDER be issued to RESTRAIN, PREVENT and
PROHIBIT respondent REGINA ONGSIAKO REYES from usurping the position of Member
of the House of Representatives for the Lone District of Marinduque and from further On June 5, 2013, the COMELEC En Banc issued a Certificate of Finality8 in SPA No. 13-053 (DC), which
exercising the prerogatives of said position and performing the duties pertaining thereto, and provides:
DIRECTING her to IMMEDIATELY VACATE said position. 3
NOW, THEREFORE, considering that more than twenty-one (21) days have lapsed since the date of the
The pertinent facts leading to the filing of the present petition are: promulgation with no Order issued by the Supreme Court restraining its execution, the Resolution of the
Commission en banc promulgated on May 14, 2013 is hereby declared FINAL and EXECUTORY.9
On October 10, 2012, one Joseph Socorro Tan (Tan), a registered voter and resident of the Municipality of
Torrijos, Marinduque, filed with the Commission on Elections (COMELEC) a petition 4 to deny due course On June 7, 2013, Speaker Belmonte, Jr. administered the oath of office to Reyes.
or cancel the Certificate of Candidacy (COC) of Reyes as candidate for the position of Representative of
the Lone District of the Province of Marinduque. In his petition, Tan alleged that Reyes made several
On June 10, 2013, Reyes filed before this Court a Petition for Certiorari docketed as GR. No. 207264,
entitled "Regina Ongsiako Reyes v. Commission on Elections and Joseph Socorro Tan," assailing (i) the
May 14, 2013 Resolution of the COMELEC En Banc, which denied her motion for reconsideration of the
March 27, 2013 Resolution of the COMELEC First Division cancelling her . Certificate of Candidacy (for
material misrepresentations made therein); and (ii) the June 5, 2013 Certificate of Finality.
In the meantime, it appears that Velasco filed a Petition for Certiorari before the COMELEC docketed
as SPC No. 13-010, entitled "Rep. Lord Allan Jay Q. Velasco vs. New Members/Old Members of the
Provincial Board of Canvassers (PBOC) of the Lone District of Marinduque and Regina Ongsiako
Reyes," assailing the proceedings of the PBOC and the proclamation of Reyes as null and void.
On July 10, 2013, in SPA No. 13-053 (DC), the COMELEC En Banc, issued an Order (i) granting Tan's
motion for execution (of the May 14, 2013 Resolution); and (ii) directing the reconstitution of a new
PBOC of Marinduque, as well as the proclamation by said new Board of Velasco as the duly elected
Representative of the Lone District of Marinduque. The fallo of which states:
IN VIEW OF THE FOREGOING, the Commission hereby GRANTS the instant Motion. Accordingly, a
new composition of the Provincial Board of Canvassers of Marinduque is hereby constituted to be
composed of the following:
1. Atty. Ma. Josefina E. Dela Cruz - Chairman

On June 19, 2013, however, the COMELEC denied the aforementioned petition in SPC No. 13-010.
2. Atty. Abigail Justine Cuaresma-Lilagan - Vice Chairman

On June 25, 2013, in G.R. No. 207264, this Court promulgated a Resolution dismissing Reyes's
3. Dir. Ester Villaflor-Roxas - Member
petition, viz.:

4. Three (3) Support Staffs

IN VIEW OF THE· FOREGOING, the instant petition is DISMISSED, finding no grave abuse of
discretion on the part of the Commission on Elections. The 14 May 2013 Resolution of the COMELEC En
Banc affirming the 27 March 2013 Resolution of the COMELEC First Division is upheld. 10 For this purpose, the Commission hereby directs, after due notice to the parties, the convening of the New
Provincial Board of Canvassers of Marinduque on July 16, 2013 (Tuesday) at 2:00 p.m., at the COMELEC
Session Hall. gth Floor. PDG Intramuros, Manila and to PROCLAIM LORD ALLAN JAY Q. VELASCO
Significantly, this Court held that Reyes cannot assert that it is the HRET which has jurisdiction over her
as the duly elected Member of the House of Representatives for the Lone District of Marinduque in the
since she is not yet considered a Member of the House of Representatives. This Court explained that to be
May 13, 2013 National and Local Elections.
considered a Member of the House of Representatives, there must be a concurrence of the following
requisites: (i) a valid proclamation, (ii) a proper oath, and (iii) assumption of office.11
Further, Director Ester Villaflor-Roxas is directed to submit before the New Provincial Board of
Canvassers (NPBOC) a certified true copy of the votes of congressional candidate Lord Allan Jay Q.
On June 28, 2013, Tan filed a Motion for Execution (of the March 27, 2013 Resolution of the COMELEC
Velasco in the 2013 National and Local Elections.
First Division and the May 14, 2013 Resolution of the COMELEC En Banc) in SPA No. 13-053 (DC),
wherein he prayed that:
Finally, the NPBOC of the Province of Marinduque is likewise directed to furnish copy of the Certificate
of Proclamation to the Department of Interior and Local Government (DILG) and the House of
[A]n Order be issued granting the instant motion; and cause the immediate EXECUTION of this
Representatives.14
Honorable Commission's Resolutions dated March 27, 2013 and May 14, 2013; CAUSE the
PROCLAMATION of LORD ALLAN JAY Q. VELASCO as the duly elected Member of the House of
Representatives for the Lone District of Marinduque, during the May 2013 National and Local Elections. 12 On July 16, 2013, the newly constituted PBOC of Marinduque proclaimed herein petitioner Velasco as the
duly elected Member of the House of Representatives for the Lone District of Marinduque with 48,396
votes obtained from 245 clustered precincts.15
At noon of June 30, 2013, it would appear that Reyes assumed office and started discharging the functions
of a Member of the House of Representatives.
On July 22, 2013, the 16th Congress of the Republic of the Philippines formally convened in a joint
session. On the same day, Reyes, as the recognized elected Representative for the Lone District of
On July 9, 2013, in SPC No. 13-010, acting on the motion for reconsideration of Velasco, the
Marinduque, along with the rest of the Members of the House of Representatives, took their oaths in open
COMELEC En Banc reversed the June 19, 2013 denial of Velasco's petition and declared null and void
session before Speaker Belmonte, Jr.
and without legal effect the proclamation of Reyes. The dispositive part reads:

On July 23, 2013, Reyes filed a Manifestation and Notice of Withdrawal of Petition "without waiver of her
WHEREFORE, in view of the foregoing, the instant motion for reconsideration is hereby GRANTED. The
arguments, positions, defenses/causes of action as will be articulated in the HRET which is now the proper
assailed June 19, 2013 Resolution of the First Division is REVERSED and SET ASIDE.
forum."16

Corollary thereto, the May 18, 2013 proclamation of respondent REGINA ONGSIAKO REYES is
On October 22, 2013, Reyes's motion for reconsideration 17 (of this Court's June 25, 2013 Resolution
declared NULL and VOID and without any legal force and effect. Petitioner LORD ALLAN JAY Q.
in GR. No. 207264) filed on July 15, 2013, was denied by this Court, viz.:
VELASCO is hereby proclaimed the winning candidate for the position of representative in the House
of Representatives for the province of Marinduque.13 (Emphasis supplied.)
WHEREFORE, The Motion for Reconsideration is DENIED. The dismissal of the petition is affirmed.
Entry of Judgment is ordered.18
Significantly, the aforequoted Resolution has not been challenged in this Court.
On November 27, 2013, Reyes filed a Motion for Leave of Court to File and Admit Motion for
Reconsideration in G.R. No. 207264.
On December 3, 2013, said motion was treated as a second motion for reconsideration and was denied by
this Court.
On December 5, 2013 and January 20, 2014, respectively, Velasco sent two letters to Reyes essentially
demanding that she vacate the office of Representative of the Lone District of Marinduque and to
relinquish the same in his favor.
On December 10, 2013, Velasco wrote a letter to Speaker Belmonte, Jr. requesting, among others, that he
be allowed to assume the position of Representative of the Lone District of Marinduque.
On December 11, 2013, in SPC No. 13-010, acting .on the Motion for Issuance of a Writ of Execution
filed by Velasco on November 29, 2013, praying that:
WHEREFORE, it is respectfully prayed that a writ of execution be ISSUED to implement and enforce the
May 14, 2013 Resolution in SPA No. 13-053, the July 9, 2013 Resolution in SPC No. 13-010 and the July
16, 2013 Certificate of Proclamation of Petitioner Lord Allan Jay Q. Velasco as Representative of
Marinduque. It is further prayed that a certified true copy of the writ of execution be personally served and
delivered by the Commission's bailiff to Speaker Feliciano Belmonte for the latter's implementation and
enforcement of the aforementioned May 14, 2013 Resolution and July 9, 2013 Resolution and the July 16,
2013 Certificate of Proclamation issued by the Special Board of Canvassers of the Honorable
Commission.19
the COMELEC issued an Order20 dated December 11, 2013 directing, inter alia, that all copies of its
Resolutions in SPA No. 13-053 (DC) and SPC No. 13-010, the Certificate of Finality dated June 5, 2013,
the Order dated July 10, 2013, and the Certificate of Proclamation dated July 16, 2013 be forwarded and
furnished to Speaker Belmonte, Jr. for the latter's information and guidance.
On February 4, 2014, Velasco wrote another letter to Speaker Belmonte, Jr. reiterating the above-
mentioned request but to no avail.
On February 6, 2014, Velasco also wrote a letter to Sec. Gen. Barua-Yap reiterating his earlier requests
(July 12 and 18, 2013) to delete the name of Reyes from the Roll of Members and register his name in her
place as the duly elected Representative of the Lone District of Marinduque.
However, Velasco relates that his efforts proved futile. He alleges that despite all the letters and requests to
Speaker Belmonte, Jr. and Sec. Gen. Barua-Yap, they refused to recognize him as the duly elected
Representative of the Lone District of Marinduque. Likewise, in the face of numerous written demands for
Reyes to vacate the position and office of the Representative of the Lone District of Marinduque, she
continues to discharge the duties of said position.
Hence, the instant Petition for Mandamus with prayer for issuance of a temporary restraining order and/or
injunction anchored on the following issues:
A. Whether or not Speaker Belmonte, Jr. can be COMPELLED, DIRECTED and ORDERED
by a Writ of Mandamus to administer the oath in favor of petitioner as duly elected Marinduque
Representative and allow him to assume said position and exercise the prerogatives of said
office.
B. Whether or not respondent SG Barna-Yap can be COMPELLED, DIRECTED and
ORDERED by a Writ of Mandamus to delete the name of respondent Reyes from the Roll of
Members of the House and include the name of the Petitioner in the Roll of Members of the
House of Representatives.
C. Whether or not a TEMPORARY RESTRAINING ORDER (TRO) and a Writ of
PERMANENT. INJUNCTION can be issued to prevent, restrain and prohibit respondent Reyes
from exercising the prerogatives and performing the functions as Marinduque Representative,
and to order her to VACATE the said office.21
As to the first and second issues, Velasco contends that he "has a well-defined and clear legal right and
basis to warrant the grant of the writ of mandamus."22 He insists that the final and executory decisions of
the COMELEC in SPA No. 13-053 (DC), and this Court in G.R. No. 207264, as well as the nullification of
respondent Reyes's proclamation and his subsequent proclamation as the duly elected Representative of the
Lone District of Marinduque, collectively give him the legal right to claim the congressional seat.
Thus, he contends that it is the ministerial duty of (i) respondent Speaker Belmonte, Jr. "to administer the
oath to [him] and to allow him to assume and exercise the prerogatives of the congressional seat for
Marinduque representative;"23 and (ii) respondent Sec. Gen. Barua-Yap "to register [his] name xx x as the
duly elected member of the House and delete the name of respondent Reyes from the Roll ofM
embers." 24 Velasco anchors his position on Codilla, Sr. v. De Venecia,25 citing a statement of this Court to
the effect that the Speaker of the House of Representatives has the ministerial duty to recognize the
petitioner therein (Codilla) as the duly elected Representative of the Fourth District of Leyte.
Despite the foregoing, Velasco asserts that both respondents Speaker Belmonte, Jr. and Sec. Gen. Barua-
Yap are unlawfully neglecting the performance of their alleged ministerial duties; thus, illegally excluding
him (Velasco) from the enjoyment of his right as the duly elected Representative of the Lone District of
Marinduque.26
With respect to the third issue, Velasco posits that the "continued usurpation and unlawful holding of such
position by respondent Reyes has worked injustice and serious prejudice to [him] in that she has already
received the salaries, allowances, bonuses and emoluments that pertain to the position of Marinduque
Representative since June 30, 2013 up to the present in the amount of around several hundreds of
thousands of pesos." Therefore, he prays for the issuance of a temporary restraining order and a writ of
permanent injunction against respondent Reyes to "restrain, prevent and prohibit [her] from usurping the
position."27
In her Comment, Reyes contends that the petition is actually one for quo warranto and not mandamus
given that it essentially seeks a declaration that she usurped the subject office; and the installation of
Velasco in her place by Speaker Belmonte, Jr. when the latter administers his oath of office and enters his
name in the Roll of Members. She argues that, being a collateral attack on a title to public office, the
petition must be dismissed as enunciated by the Court in several cases. 28
As to the issues presented for resolution, Reyes questions the jurisdiction of the Court over Quo
Warranto cases involving Members of the House of Representatives. She posits that "even if the Petition
for Mandamus be treated as one of Quo Warranto, it is still dismissible for lack of jurisdiction and absence
of a clear legal right on the part of [Velasco]. "29 She argues that numerous jurisprudence have already
ruled that it is the House of Representatives Electoral Tribunal that has the sole and exclusive jurisdiction
over all contests relating to the election, returns and qualifications of Members of the House of
Representatives. Moreover, she insists that there is also an abundance of case law that categorically states
that the COMELEC is divested of jurisdiction upon her proclamation as the winning candidate, as, in fact,
the HRET had already assumed jurisdiction over quo warranto cases30 filed against Reyes by several
individuals.
Given the foregoing, Reyes concludes that this Court is "devoid of original jurisdiction to annul [her] COMELEC that required any action from the House. Again, it bears emphasis that neither petitioner nor
proclamation. "31But she hastens to point out that (i) "[e]ven granting for the sake of argument that the respondents Speaker Belmonte and Sec. Gen. Barna-Yap were parties in Reyes v. COMELEC.
proclamation was validly nullified, [Velasco] as second placer cannot be declared the winner x x x" as he
was not the choice of the people of the Province of Marinduque; and (ii) Velasco is estopped from
Further, records with the HRET show that the following cases have been filed against respondent Reyes:
asserting the jurisdiction of this Court over her (Reyes) election because he (Velasco) filed an Election
Protest Ad Cautelam in the HRET on May 31, 2014.
(i) Case No. 13-036 (Quo Warranto), entitled Noeme Mayores Tan & Jeasseca L.
Mapacpac v. Regina Ongsiako Reyes;
The Office of the Solicitor General (OSG), arguing for Speaker Belmonte, Jr. and Sec. Gen. Barua-Yap,
opposed Velasco's petition on the following grounds:
(ii) Case No. 13-037 (Quo Warranto), entitled Eric D. Junio v. Regina Ongsiako Reyes;
I.
(iii) Case No. 13-027 (Quo Warranto ), entitled Christopher Matienzo v. Regina Ongsiako
Reyes; and
UPON RESPONDENT REYES' PROCLAMATION ON MAY 18, 2013, EXCLUSIVE JURISDICTION
TO RESOLVE ELECTION CONTESTS INVOLVING RESPONDENT REYES, INCLUDING THE
VALIDITY OF HER PROCLAMATION AND HER ELIGIBILITY FOR OFFICE, VESTED IN THE (iv) Case No. 13-028 (Election Protest), entitled Lord Allan Jay Velasco v. Regina Ongsiako
HRET. Reyes.33

Hence, until and unless the HRET grants any quo warranto petition or election protest filed against
respondent Reyes, and such HRET resolution or resolutions become final and executory, respondent Reyes
may not be restrained from exercising the prerogatives of Marinduque Representative, and respondent Sec.
Gen. Barua-Yap may not be compelled by mandamus to remove respondent Reyes :S name from the Roll of
Members of the House.
II.
CODILLA v. COMELEC IS NOT APPLICABLE TO THIS CASE, GIVEN THAT PETITIONER,
BEING MERELY THE SECOND PLACER IN THE MAY 13, 2013 ELECTIONS, CANNOT VALIDLY
ASSUME THE POST OF MARINDUQUE REPRESENTATIVE.
And in view of the cases filed in the HRET, the OSG insists that:
If the jurisdiction of the COMELEC were to be retained until the assumption of office of the winner, at
noon on the thirtieth day of June next following the election, then there would obviously be a clash of
jurisdiction between the HRET and the COMELEC, given that the 2011 HRET Rules provide that the
appropriate cases should be filed before it within 15 days from the date of proclamation of the winner. If,
as the June 25, 2013 Resolution provides, the HRET's jurisdiction begins only after assumption of office,
at noon of June 30 following the election, then quo warranto petitions and election protests filed on or after
said date would be dismissed outright by the HRET under its own rules for having been filed out of time,
where the winners have already been proclaimed within the period after the May elections and up to June
14.34

In recent development, however, the HRET promulgated a Resolution on December 14, 2015 dismissing
Hence, respondents Speaker Belmonte and Sec. Gen. Barua-Yap may not be compelled by mandamus to,
HRET Case Nos. 13-036 and 13-037,35 the twin petitions for quo warranto filed against Reyes, to wit:
respectively, administer the proper oath to petitioner and register the latter's name in the Roll of Members
of the House.
WHEREFORE, in view of the foregoing, the September 23, 2014 Motion for Reconsideration of Victor
Vela Sioco is hereby GRANTED. The September 11, 2014 Resolution of [the] Tribunal is
III.
hereby REVERSED and SET ASIDE. Accordingly, the present Petitions for Quo Warranto are
hereby DISMISSED for lack of jurisdiction.36
PETITIONER IS NOT ENTITLED TO THE INJUNCTIVE RELIEFS PRAYED FOR. 32
In the said Resolution, the HR.ET held that "the final Supreme Court ruling in GR. No. 207264 is the
The OSG presents the foregoing arguments on the premise that there is a need for this Court to revisit its COGENT REASON to set aside the September 11, 2014 Resolution." 37
twin Resolutions dated June 25, 2013 and October 22, 2013 both in GR. No. 207264, given that (i) this
Court was "divided" when it issued the same; and (ii) there were strong dissents to the majority opinion. It
To make clear, the September 11, 2014 Resolution of the HRET ordered the dismissal of a Petition-In-
argues that this Court has in the past revisited decisions already final and executory; there is no hindrance
Intervention filed by one Victor Vela Sioco (Sioco) in the twin petitions for quo warranto, for "lack of
for this Court to do the same in G.R. No. 207264.
merit." Further, the HRET directed "the hearing and reception of evidence of the two Petitions for Quo
Warranto against x x x Respondent [Reyes] to proceed. "38 Sioco, however, moved for the reconsideration
Moreover, the OSG contends that: of the said September 11, 2014 HR.ET Resolution based on the argument that the latter was contrary to law
and jurisprudence given the Supreme Court ruling in G.R. No. 207264.
Despite the finality of the June 25, 2013 Resolution and the October 22, 2013 Resolution, upholding the
cancellation of respondent Reyes's CoC, there has been no compelling reason for the House to withdraw its Subsequently, the December 14, 2015 Resolution of the HRET held that-
recognition of respondent Reyes as Marinduque Representative, in the absence· of any specific order or
directive to the House. To be sure, there was nothing in the Honorable Court's disposition in Reyes v.
The Tribunals Jurisdiction
It is necessary to clarify the Tribunal's jurisdiction over the present petitions for quo warranto, considering
the parties' divergent postures on how the Tribunal should resolve the same vis-a-vis the Supreme Court
ruling in G.R. No. 207264.
The petitioners believe that the Tribunal has jurisdiction over their petitions. They pray that "after due
proceedings," the Tribunal "declare Respondent REGINA ONGSIAKO REYES
DISQUALIFIED/INELIGIBLE to sit as Member of the House of Representatives, representing the
Province of Marinduque." In addition, the petitioner Eric Del Mundo Junio urges the Tribunal to follow the
Supreme Court pronouncement in G.R. No. 207264.
On the other hand, Victor Vela Sioco, in his Petition-In-Intervention, pleads for the outright dismissal of
the present petitions considering the Supreme Court final ruling in G.R. No. 207264. For her part,
respondent Regina Reyes prays too for the dismissal of the present petitions, albeit after reception of
evidence by the contending parties.
The constitutional mandate of the Tribunal is clear: It is "the sole judge of all contests relating to the
election, returns, and qualifications of [House] Members." Such power or authority of the Tribunal is
echoed in its 2011 Rules of the House of Representatives Electoral Tribunal: "The Tribunal is the sole
judge of all contests relating to the elections, returns, and qualifications of the Members of the House of
Representatives."
xxxx
In the present cases, before respondent Regina Reyes was proclaimed on May 18, 2013, the COMELEC En
Banc, in its Resolution of May 14, 2013 in SPA No. 13-053 (DC), had already resolved that the
COMELEC First Division correctly cancelled her COC on the ground that she lacked the Filipino
citizenship and residency requirements. Thus, the COMELEC nullified her proclamation. When Regina
Reyes challenged the COMELEC actions, the Supreme Court En Banc, in its Resolution of June 25, 2013
in G.R. No. 207246, upheld the same.
With the COMELEC's cancellation of respondent Regina Reyes' COC, resulting in the nullification of her
proclamation, the Tribunal, much as we would want to, cannot assume jurisdiction over the present
petitions. The jurisdiction of the HRET begins only after the candidate is considered a Member of the
House of Representatives. And to be considered a Member of the House of Representatives, there must be
a concurrence of the following requisites: (1) a valid proclamation, (2) a proper oath, and (3) assumption of
office, so the Supreme Court pronounced in its Resolution of June 25, 2013 in G.R. No. 207264, thus:
x x x, the jurisdiction of the HRET begins only after the candidate is considered a Member of the House of
Representatives, as stated in Section 17, Article VI of the 1987 Constitution:
xxxx
As held in Marcos v. COMELEC, the HRET does not have jurisdiction over a candidate who is not a
member of the House of Representatives x x x.
xxxx
The next inquiry, then, is when is a candidate considered a Member of the House of Representatives?
In Vinzons-Chato v. COMELEC, citing Aggabao v. COMELEC and Guerrero v. COMELEC, the Court
ruled that:
The Court has invariably held that once a winning candidate has been proclaimed, taken his oath, and
assumed office as a Member of the House of Representatives, the COMELEC's jurisdiction over election
contests relating to his election, returns, and qualifications ends, and the HRET's own jurisdiction
begins.xx x
From the foregoing, it is then clear that to be considered a Member of the House of Representatives, there
must be a concurrence of the following requisites: (1) a valid proclamation, (2) a proper oath, and (3)
assumption of office x x x.
Based on the above-quoted ruling of the Supreme Court, a valid proclamation is the first essential element
before a candidate can be considered a Member of the House of Representatives over which the Tribunal
could assume jurisdiction. Such element is obviously absent in the present cases as Regina Reyes'
proclamation was nullified by the COMELEC, which nullification was upheld by the Supreme Court. On
this ground alone, the Tribunal is without power to assume jurisdiction over the present petitions since
Regina Reyes "cannot be considered a Member of the House of Representatives," as declared by the
Supreme Court En Banc in G.R. No. 207264. It further stresses:
"x x x there was no basis for the proclamation of petitioner [Regina Reyes] on 18 May 2013. Without the
proclamation, the petitioner's oath of office is likewise baseless, and without a precedent oath of office,
there can be no valid and effective assumption of office."
The Supreme Court has spoken. Its pronouncements must be respected. Being the ultimate guardian of the
Constitution, and by constitutional design, the Supreme Court is "supreme in its task of adjudication; x x x.
As a rule, all decisions and determinations in the exercise of judicial power ultimately go to and stop at the
Supreme Court whose judgment is final." This Tribunal, as all other courts, must take their bearings from
the decisions and rulings of the Supreme Court.39
Incidentally, it appears that an Information against Reyes for violation of Article 1 77 (Usurpation of
Official Functions) of the Revised Penal Code, dated August 3, 2015, has been filed in
court,40 entitled "People of the Philippines v. Regina Ongsiako Reyes. "41
The Issue
The issue for this Court's resolution boils down to the propriety of issuing a writ of mandamus to compel
Speaker Belmonte, Jr. and Sec. Gen. Barua-Yap to perform the specific acts sought by Velasco in this
petition.
The Ruling
The petition has merit.
At the outset, this Court observes that the respondents have taken advantage of this petition to re-litigate
what has been settled in G.R. No. 207264. Respondents are reminded to respect the Entry of Judgment that
has been issued therein on October 22, 2013.
After a painstaking evaluation of the allegations in this petition, it is readily apparent that this special civil
action is really one for mandamus and not a quo warranto case, contrary to the asseverations of the
respondents.
A petition for quo warranto is a proceeding to determine the right of a person to the use or exercise of a
franchise or office and to oust the holder from its enjoyment, if his claim is not well-founded, or if he has
forfeited his right to enjoy the privilege. Where the action is filed by a private person, he must prove that
he is entitled to the controverted position; otherwise, respondent has a right to the undisturbed possession
of the office.42 In this case, given the present factual milieu, i.e., (i) the final and executory resolutions of
this Court in G.R. No. 207264; (ii) the final and executory resolutions of the COMELEC in SPA No. 13-
053 (DC) cancelling Reyes's Certificate of Candidacy; and (iii) the final and executory resolution of the
COMELEC in SPC No. 13-010 declaring null and void the proclamation of Reyes and proclaiming
Velasco as the winning candidate for the position of Representative for the Lone District of the Province of
Marinduque - it cannot be claimed that the present petition is one for the determination of the right of
Velasco to the claimed office.
To be sure, what is prayed for herein is merely the enforcement of clear legal duties and not to try disputed
title. That the respondents make it appear so will not convert this petition to one for quo warranto.
Section 3, Rule 65 of the Rules of Court, as amended, provides that any person may file a verified petition
for mandamus "when any tribunal, corporation, board, officer or person unlawfully neglects the
performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station,
or unlawfully excludes another from the use and enjoyment of a right or office to which such other is
entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law." A petition
for mandamus will prosper if it is shown that the subject thereof is a ministerial act or duty, and not purely
discretionary on the part of the board, officer or person, and that the petitioner has a well-defined, clear
and certain right to warrant the grant thereof.43
The difference between a ministerial and discretionary act has long been established. A purely ministerial
act or duty is one which an officer or tribunal performs in a given state of facts, in a prescribed manner, in
obedience to the mandate of a legal authority, without regard to or the exercise of his own judgment upon
the propriety or impropriety of the act done. If the law imposes a duty upon a public officer and gives him
the right to decide how or when the duty shall be performed, such duty is discretionary and not ministerial.
The duty is ministerial only when the discharge of the same requires neither the exercise of official
discretion or judgment.44
As the facts stand in this case, Speaker Belmonte, Jr. and Sec. Gen. Barua-Y ap have no discretion whether
or not to administer the oath of office to Velasco and to register the latter's name in the Roll of Members of
the House of Representatives, respectively. It is beyond cavil that there is in existence final and executory
resolutions of this Court in G.R. No. 207264 affirming the final and executory resolutions of the
COMELEC in SPA No. 13-053 (DC) cancelling Reyes's Certificate of Candidacy. There is likewise a final
and executory resolution of the COMELEC in SPC No. 13-010 declaring null and void the proclamation of
Reyes, and proclaiming Velasco as the winning candidate for the position of Representative for the Lone
District of the Province of Marinduque.
The foregoing state of affairs collectively lead this Court to consider the facts as settled and beyond dispute
- Velasco is the proclaimed winning candidate for the Representative of the Lone District of the
Province of Marinduque.
Reyes argues in essence that this Court is devoid of original jurisdiction to annul her proclamation. Instead,
it is the HRET that is constitutionally mandated to resolve any questions regarding her election, the returns
of such election, and her qualifications as a Member of the House of Representatives especially so that she
has already been proclaimed, taken her oath, and started to discharge her duties as a Member of the House
of Representatives representing the Lone District of the Province of Marinduque. But the confluence of the
three acts in this case - her proclamation, oath and assumption of office - has not altered the legal
situation between Velasco and Reyes.
The important point of reference should be the date the COMELEC finally decided to cancel the
Certificate of Candidacy (COC) of Reyes which was on May 14, 2013. The most crucial time is when
Reyes's COC was cancelled due to her non-eligibility to run as Representative of the Lone District of the
Province of Marinduque - for without a valid COC, Reyes could not be treated as a candidate in the
election and much less as a duly proclaimed winner. That particular decision of the COMELEC was
promulgated even before Reyes' s proclamation, and which was affirmed by this Court's final and
executory Resolutions dated June 25, 2013 and October 22, 2013.
This Court will not give premium to the illegal actions of a subordinate entity of the COMELEC, the
PBOC who, despite knowledge of the May 14, 2013 resolution of the COMELEC En Banc cancelling
Reyes' s COC, still proclaimed her as the winning candidate on May 18, 2013. Note must also be made that
as early as May 16, 2013, a couple of days before she was proclaimed, Reyes had already received the said
decision cancelling her COC. These points clearly show that the much argued proclamation was made in
clear defiance of the said COMELEC En Banc Resolution.
That Velasco now has a well-defined, clear and certain right to warrant the grant of the present petition
for mandamus is supported by the following undisputed facts that should be taken into consideration:
First. At the time of Reyes's proclamation, her COC was already cancelled by the
COMELEC En Banc in its final finding in its resolution dated May 14, 2013, the effectivity of
which was not enjoined by this Court, as Reyes did not avail of the prescribed remedy which is
to seek a restraining order within a period of five (5) days as required by Section 13(b), Rule 18
of COMELEC Rules. Since no restraining order was forthcoming, the PBOC should have
refrained from proclaiming Reyes.
Second. This Court upheld the COMELEC decision cancelling respondent Reyes's COC in its
Resolutions of June 25, 2013 and October 22, 2013 and these Resolutions are already final and
executory.
Third. As a consequence of the above events, the COMELEC in SPC No. 13-010 cancelled
respondent Reyes's proclamation and, in turn, proclaimed Velasco as the duly elected Member
of the House of Representatives in representation of the Lone District of the Province of
Marinduque. The said proclamation has not been challenged or questioned by Reyes in any
proceeding.
Fourth. When Reyes took her oath of office before respondent Speaker Belmonte, Jr. in open
session, Reyes had NO valid COC NOR a valid proclamation.
Thus, to consider Reyes' s proclamation and treating it as a material fact in deciding this case
will paradoxically alter the well-established legal milieu between her and Velasco.
Fifth. In view of the foregoing, Reyes HAS ABSOLUTELY NO LEGAL BASIS to serve as a
Member of the House of Representatives for the Lone District of the Province of Marinduque,
and therefore, she HAS NO LEGAL PERSONALITY to be recognized as a party-respondent
at a quo warranto proceeding before the HRET.
And this is precisely the basis for the HRET' s December. 14, 2015 Resolution acknowledging and ruling
that it has no jurisdiction over the twin petitions for quo warranto filed against Reyes. Its finding was
based on the existence of a final and executory ruling of this Court in G.R. No. 207264 that Reyes is not
a bona fide member of the House of Representatives for lack of a valid proclamation. To reiterate this
Court's pronouncement in its Resolution, entitled Reyes v. Commission on Elections45-
The averred proclamation is the critical pointer to the correctness of petitioner's submission. The crucial
question is whether or not petitioner [Reyes] could be proclaimed on 18 May 2013. Differently stated, was
there basis for the proclamation of petitioner on 18 May 2013?
Dates and events indicate that there was no basis for the proclamation of petitioner on 18 May 2013.
Without the proclamation, the petitioner's oath of office is likewise baseless, and without a precedent oath
of office, there can be no valid and effective assumption of office.
xxxx
"More importantly, we cannot disregard a fact basic in this controversy - that before the proclamation of
petitioner on 18 May 2013, the COMELEC En Banc had already finally disposed of the issue of
petitioner's [Reyes] lack of Filipino citizenship and residency via its Resolution dated 14 May 2013. After
14 May 2013, there was, before the COMELEC, no longer any pending case on petitioner's qualifications
to run for the position of Member of the House of Representatives. x x x."
As the point has obviously been missed by the petitioner [Reyes] who continues to argue on the basis of
her "due proclamation," the instant motion gives us the opportunity to highlight the undeniable fact we
here repeat that the proclamation which petitioner secured on 18 May 2013 was WITHOUT ANY
BASIS." (Emphasis supplied.)
Put in another way, contrary to the view that the resort to the jurisdiction of the HRET is a plain, speedy
and adequate remedy, such recourse is not a legally available remedy to any party, specially to Velasco,
who should be the sitting Member of the House of Representatives if it were not for the disregard by the
leadership of the latter of the binding decisions of a constitutional body, the COMELEC, and the Supreme
Court
Though the earlier existence of the twin quo warranto petitions filed against Reyes before the HRET had
actually no bearing on the status of finality of the decision of the COMELEC in SPC No. 13-010.
Nonetheless, their dismissal pursuant to the HRET' s December 14, 2015 Resolution sustained Velasco's
well-defined, clear and certain right to the subject office.
The present Petition for Mandamus seeks the issuance of a writ of mandamus to compel respondents
Speaker Belmonte, Jr. and Sec. Gen. Barua-Yap to acknowledge and recognize the final and executory
Decisions and Resolution of this Court and of the COMELEC by administering the oath of office to
Velasco and entering the latter's name in the Roll of Members of the House of Representatives. In other
words, the Court is called upon to determine whether or not the prayed for acts, i.e., (i) the administration
of the oath of office to Velasco; and (ii) the inclusion of his name in the Roll of Members, are ministerial
in character vis-a-vis the factual and legal milieu of this case. As we have previously stated, the
administration of oath and the registration of Velasco in the Roll of Members of the House of
Representatives for the Lone District of the Province of Marinduque are no longer a matter of discretion
or judgment on the part of Speaker Belmonte, Jr. and Sec. Gen. Barua-Yap. They are legally duty-bound
to recognize Velasco as the duly elected Member of the House of Representatives for the Lone District of
Marinduque in view of the ruling rendered by this Court and the COMELEC'S compliance with the said
ruling, now both final and executory.
It will not be the first time that the Court will grant Mandamus to compel the Speaker of the House of
Representatives to administer the oath to the rightful Representative of a legislative district and the
Secretary-General to enter said Representative's name in the Roll of Members of the House of
Representatives. In Codilla, Sr. v. De Venecia,46 the Court decreed:
Under Rule 65, Section 3 of the 1997 Rules of Civil Procedure, any person may file a verified petition
for mandamus "when any tribunal, corporation, board, officer or person unlawfully neglects the
performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station,
or unlawfully excludes another from the use and enjoyment of a right or office to which such other is
entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law." For a
petition for mandamus to prosper, it must be shown that the subject of the petition for mandamus is
a ministerial act or duty, and not purely discretionary on the part of the board, officer or person, and that
the petitioner has a well-defined, clear and certain right to warrant the grant thereof.
The distinction between a ministerial and discretionary act is well delineated. A purely ministerial act or
duty is one which an officer or tribunal performs in a given state of facts, in a prescribed manner, in
obedience to the mandate of a legal authority, without regard to or the exercise of his own judgment upon
the propriety or impropriety of the act done. If the law imposes a duty upon a public officer and gives him
the right to decide how or when the duty shall be performed, such duty is discretionary and not ministerial.
The duty is ministerial only when the discharge of the same requires neither the exercise of official
discretion or judgment.
In the case at bar, the administration of oath and the registration of the petitioner in the Roll of Members of
the House of Representatives representing the 4th legislative district of Leyte is no longer a matter of
discretion on the part of the public respondents. The facts are settled and beyond dispute: petitioner
garnered 71,350 votes as against respondent Locsin who only got 53,447 votes in the May 14, 2001
elections. The COMELEC Second Division initially ordered the proclamation of respondent Locsin; on
Motion for Reconsideration the COMELEC en banc set aside the order of its Second Division and ordered
the proclamation of the petitioner. The Decision of the COMELEC en banc has not been challenged before
this Court by respondent Locsin and said Decision has become final and executory.
In sum, the issue of who is the rightful Representative of the 4th legislative district of Leyte has been finally
settled by the COMELEC en banc, the constitutional body with jurisdiction on the matter. The rule of law
demands that its Decision be obeyed by all officials of the land There is no alternative to the rule of law
except the reign of chaos and confusion.
IN VIEW WHEREOF, the Petition for Mandamus is granted. Public Speaker of the House of
Representatives shall administer the oath of petitioner EUFROCINO M. CODILLA, SR., as the duly-
elected Representative of the 4th legislative district of Leyte. Public respondent Secretary-General shall
likewise register the name of the petitioner in the Roll of Members of the House of Representatives after he
has taken his oath of office. This decision shall be immediately executory. (Citations omitted.)
Similarly, in this case, by virtue of (i) COMELEC en bane Resolution dated May 14, 2013 in SPA No. 13-
053 (DC); (ii) Certificate of Finality dated June 5, 2013 in SPA No. 13-053 (DC); (iii) COMELEC en
banc Resolution dated June 19, 2013 in SPC No. 13-010; (iv) COMELEC en banc Resolution dated July
10, 2013 in SPA No. 13-053 (DC); and (v) Velasco's Certificate of Proclamation dated July 16,
2013, Velasco is the rightful Representative of the Lone District of the Province of Marinduque;
hence, entitled to a writ of Mandamus.
As to the view of Reyes and the OSG that since Velasco, Speaker Belmonte, Jr. and Sec. Gen. Barna-Yap
are not parties to G.R. No. 207264, Velasco can neither ask for the enforcement of the Decision rendered
therein nor argue that the doctrine of res judieata by conclusiveness of judgment applies to him and the
public respondents, this Court maintains that such contention is incorrect. Velasco, along with public
respondents Speaker Belmonte, Jr. and Sec. Gen. Barna-Yap, are all legally bound by this Court's
judgment in G.R. No. 207264, i.e., essentially, that the COMELEC correctly cancelled Reyes' s COC for
Member of the House of Representatives for the Lone District of the Province of Marinduque on the
ground that the latter was ineligible for the subject position due to her failure to prove her Filipino
citizenship and the requisite one-year residency in the Province of Marinduque. A contrary view would
have our dockets unnecessarily clogged with petitions to be filed in every direction by any and all
registered voters not a party to a case to question the final decision of this Court. Such restricted
interpretation of res judieata is intolerable for it will defeat this Court's ruling in G.R. No. 207264. To be
sure, Velasco who was duly proclaimed by COMELEC is a proper party to invoke the Court's final
judgment that Reyes was ineligible for the subject position.47

It is well past the time for everyone concerned to accept what has been adjudicated and take judicial notice
of the fact that Reyes's ineligibility to run for and be elected to the subject position had already been long
affirmed by this Court. Any ruling deviating from such established ruling will be contrary to the Rule of
Law and should not be countenanced.

In view of finality of the rulings in G.R. No. 207264, SPA No. 13-053 (DC) and SPC No. 13-010, there is
no longer any issue as to who is the rightful Representative of the Lone District of the Province of
Marinduque; therefore, to borrow the pronouncement of this Court, speaking through then Associate
Justice Reynato S. Puno, in Codilla, Sr. v. De Venecia,48 "[t]he rule of law demands that its Decision be
obeyed by all officials of the land. There is no alternative to the rule of law except the reign of chaos and
confusion."

WHEREFORE, the Petition for Mandamus is GRANTED. Public respondent Hon. Feliciano R.
Belmonte, Jr., Speaker, House of Representatives, shall administer the oath of office of petitioner Lord
Allan Jay Q. Velasco as the duly-elected Representative of the Lone District of the Province of
Marinduque. And public respondent Hon. Marilyn B. Barua-Yap, Secretary General, House of
Representatives, shall register the name of petitioner Lord Allan Jay Q. Velasco in the Roll of Members of
the House of Representatives after he has taken his oath of office. This Decision shall
be IMMEDIATELY EXECUTORY.

SO ORDERED.

G.R. No. 142304 June 20, 2001
CITY OF MANILA, petitioner,
vs.
OSCAR, FELICITAS, JOSE, BENJAMIN, ESTELITA, LEONORA AND ADELAIDA, ALL
SURNAMED SERRANO, respondents.
Mendoza, J.:
This is a petition for review on certiorari of the decision, dated November 16, 1999, and resolution, dated
February 23, 2000, of the Court of Appeals reversing the order, dated December 15, 1998, of the Regional
Trial Court, Branch 16, Manila and perpetually enjoining it from proceeding with the petitioner's complaint
for eminent domain in Civil Case No. 94-72282.
The facts are as follows:
On December 21, 1993, the City Council of Manila enacted the Ordinance No. 7833, authorizing the
expropriation of certain properties in Manila 's First District in Tondo, covered by TCT Nos. 70869,
105201, 105202, and 138273 of the Register of Deeds of Manila, which are to be sold and distributed to
qualified occupants pursuant to the Land Use Development Program of the City of Manila.
One of the properties sought to be expropriated, denominated as Lot 1-C, consists of 343.10 square meters.
It is covered by TCT No. 138272 which was derived from TCT No. 70869 issued in the name of Feliza De
Guia.1 After her death, the estate of Feliza De Guia was settled among her heirs by virtue of a compromise
agreement, which was duly approved by the Regional Trial Court, Branch 53, Manila in its decision, dated
May 8, 1986.2 In 1989, Alberto De Guia, one of the heirs of Feliza De Guia, died, as a result of which his
estate, consisting of his share in the properties left by his mother, was partitioned among his heirs. Lot 1-C
was assigned to Edgardo De Guia, one of the heirs of Alberto De Guia. 3 On April 15, 1994, Edgardo De
Guia was issued TCT No. 215593, covering Lot 1-C.4On July 29, 1994, the said property was transferred
to Lee Kuan Hui, in whose name TCT No. 217018 was issued.5
The property was subsequently sold on January 24,1996 to Demetria De Guia to whom TCT No. 226048
was issued.6
On September 26, 1997, petitioner City of Manila filed an amended complaint for expropriation, docketed
as Civil Case No. 94-72282, with the Regional Trial Court, Branch 16, Manila, against the supposed
owners of the lots covered by TCT Nos. 70869 (including Lot 1-C), 105201, 105202 and 138273, which
included herein respondents Oscar, Felicitas, Jose, Benjamin, Estelita, Leonora, Adelaida, all surnamed are
Serrano.7 On November 12, 1997, respondents filed a consolidated answer, in which they alleged that their
mother, the late Demetria De Guia, had acquired Lot l-C from Lee Kian Hui; that they had been the bona
fide occupants of the said parcel of land for more than 40 years; that the expropriation of Lot l-C would
result in their disclosure, it being the only residential land left to them by their deceased mother; and that
the said lot was exempt from expropriation because dividing the said parcel of land among them would
entitle each of them to only about 50 square meters of land. Respondents, therefore, prayed that judgment
be rendered declaring Lot l-C exempt from expropriation and ordering the cancellation of the notice
annotated on the back of TCT No. 226048,8 regarding the pendency of Civil Case No. 94-72282. for
eminent domain filed by petitioner.9
Upon motion by petitioner, the trial court issued an order, dated October 9, 1998, directing petitioner to
deposit the amount of Pl,825,241.00 equivalent to the assessed value of the properties.10 After petitioner
had made the deposit, the trial court issued another order, dated December 15, 1998, directing the issuance
of a writ of possession in favor of petitioner.ll
Respondents filed a petition for certiorari with the Court of Appeals, alleging that the expropriation of Lot
l-C would render respondents, who are actual occupants thereof, landless; that Lot l-C is exempt from
expropriation because R.A. No. 7279 provides that properties consisting of residential lands not exceeding
300 square meters in highly urbanized cities are exempt from expropriations; that respondents would only
receive around 49 square meters each after the partition of Lot l-C which consists of only 343.10 square
meters; and that R.A. No. 7279 was not meant to deprive an owner of the entire residential land but only
that in excess of 300 square meters.12
On November 16, 1999, the Court of Appeals rendered a decision holding that Lot l-C is not exempt from
expropriation because it undeniably exceeds 300 square meters which is no longer considered a small
property within the framework of R.A. No. 7279. However, it held that in accordance with the ruling
in Filstream International Inc. v. Court of Appeals,13 the other modes of acquisition of lands enumerated in
§§9-10 of the law must first be tried by the city government before it can resort to expropriation. As
petitioner failed to show that it had done so, the Court of Appeals gave judgment for respondents and
enjoined petitioner from expropriating Lot 1-C. The dispositive portion of its decision reads:
WHEREFORE, in view of all the foregoing, the instant petition is hereby GIVEN DUE
COURSE and accordingly GRANTED. The Order, dated December 15, 1998, denying
petitioner's motion for reconsideration issued by the respondent Regional Trial Court of Manila,
Branch 16, in Civil Case No. 94-72282 is hereby REVERSED and SET ASIDE. Let a writ of
injunction issue perpetually enjoining the same respondent court from proceeding with the
complaint for eminent domain in Civil Case No. 94-72282,14
In its resolution, dated February 23, 2000, the Court of Appeals likewise denied two motions for
reconsideration filed by petitioner.l5 Hence this petition. Petitioner contends that the Court of Appeals erred
in --
1) Giving due course to the petition of the Serranos under Rule 65 notwithstanding its own
declaration of the impropriety of the resort to the writ and filing thereof with the wrong
appellate court;
2) Concluding that the Order of October 9, 1998 which authorizes the immediate entry of the
City as the expropriating agency into the property sough to be expropriated upon the deposit of
the provisionally fixed fair market value thereof as tantamount to condemnation of the property
without prior showing of compliance with the acquisition of other lands enumerated in Sec. 9 of
R.A. 7279 ergo a violation of due process of the Serranos by the doctrinaire application of
FILSTREAM ruling and corrollarily,
3) In prohibiting permanently, by writ of injunction, the trial court from proceeding with a
complaint for expropriation of the City in Civil Case No. 94-72282.16
We will deal with these contentions in the order they are presented.
First. Petitioner contends that the respondents' remedy against the order of the trial court granting a writ of
possession was not to file a petition for certiorari under Rule 65 but a petition for review under Rule 45
which should have been filed in the Supreme Court. 17
This contention has no merit. A petition for review under Rule 45 is a mode of appeal. Accordingly, it
could not have been resorted to by the respondents inasmuch as the order of the trial court granting a writ
of possession was merely interlocutory from which no appeal could be taken. Rule 45, §1 of the 1997 Third. Petitioner contends that the Court of Appeals erroneously presumed that Lot 1-C has been ordered
Rules for Civil Procedure applies only to final judgments or orders of the Court of Appeals, the condemned in its favor when the fact is that the order of the trial court, dated December 15, 1998, merely
Sandiganbayan, and the Regional Trial Court. On the other hand, a petition for certiorari is the suitable authorized the issuance of a writ of possession and petitioner's entry into the property pursuant to Rule 67,
remedy in view of Rule 65, §1 which provides: §2. At that stage, it was premature to determine whether the requirements of RA. No. 7279, §§9 - 10 have
been complied with since no evidentiary hearing had yet been conducted by the trial court. 21
When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted
without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to This contention is well taken. Rule 67, §2 provides:
lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate
remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in
Upon the filing of the complaint or at any time thereafter and after due notice to the defendant,
the proper court, alleging the facts with certainly and praying that judgment be rendered
the plaintiff shall have the right to take or enter upon possession of the real property involved if
annulling or modifying the proceedings of such tribunal, board or officer, and granting such
he deposits with the authorized government depository an amount equivalent to the assessed
incidental reliefs as laws and justice may require.
value of the property for purposes of taxation to be held by such bank subject to the orders of
the court. Such deposit shall be in money, unless in lieu thereof the court authorizes the deposit
Respondents' petition before the Court of Appeals alleged that the trial court had acted without or in excess of a certificate of deposit of a government bank of the Republic of the Philippines payable on
of its jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in issuing the order, demand to the authorized government depositary.
dated December 15, 1998, resolving that Lot 1-C is not exempt from expropriation and ordering the
issuance of the writ of possession in favor of petitioner.18
If personal property is involved, its value shall be provisionally ascertained and the amount to
be deposited shall be fixed by the court.
Second. Petitioner faults the Court of Appeals for deciding issues not raised in the trial court, specifically
the question of whether or not there was compliance with §§9 and 10 of RA. No. 7279. It argues that the
After such deposit is made the court shall order the sheriff or other proper officer to forthwith
sole defense set up by respondents in their petition before the Court of Appeals was that their property was
place the plaintiff in possession of the property involved and promptly submit a report thereof
exempted from expropriation because it comes within the purview of a "small property" as defined by R.A.
to the court with service of copies to the parties.
No. 7279 . Accordingly, the Court of Appeals should not have applied the doctrine laid down by this Court
in the Filstream19 case as such issue was not raised by respondents in their petition before the Court of
Appeals. Thus, a writ of execution may be issued by a court upon the filing by the government of a complaint for
expropriation sufficient in form and substance and upon deposit made by the government of the amount
equivalent to the assessed value of the property subject to expropriation. Upon compliance with these
This contention likewise has no merit. In their petition before the Court of Appeals, respondents raised the
requirements, the issuance of the writ of possession becomes ministerial.22 In this case, these requirements
following issues:
were satisfied and, therefore, it became the ministerial duty of the court to issue the writ of possession.

1. Whether or not the subject Lot 1-C with an area of 343.10 square meters covered by T.C.T.
No. 226048 in the name of petitioners' mother, the late Demetria [De Guia] Serrano, may be
lawfully expropriated "for the public purpose of providing landless occupants thereof homelots
of their own under the "land-for-the landless program of respondent City of Manila."
2. Whether or not the expropriation of the said Lot l-C by respondent City of Manila violates
the equal protection clause of the Constitution, since petitioners, with the exemption of
petitioner Oscar G. Serranno, who are likewise landless are actual occupants hereof.
The Court of Appeals, however, ruled that petitioner failed to comply with the requirements laid down in
§§9 - 10 of RA. No. 7279 and reiterated in Filstream ruling. This is error. The ruling in the Filstream was
necessitated because an order of condemnation had already been issued by the trial court in that case. Thus,
the judgment in that case had already become final. In this case, the trial court has not gone beyond the
issuance of a writ of possession. Hearing is still to be held to determine whether or not petitioner indeed
complied with the requirements provided in RA. No. 7279. It is, therefore, premature at this stage of the
proceedings to find that petitioner resorted expropriation without first trying the other modes of acquisition
enumerated in § 10 of the law.

3. Whether or not Lot 1-C is or may be exempted from expropriation pursuant to R.A. 7279, RA. No 7279 in pertinent parts provide:
otherwise known as the Urban Development and Housing Act of 1992. 20
SEC. 9. Priorities in the Acquisition of Land… Lands for socialized housing shall be acquired in
It is clear that respondents raised in issue the propriety of the expropriation of their property in connection the following order:
with RA. No. 7279. Although what was discussed at length in their petition before the Court of Appeals
was whether or not the said property could be considered a small property within the purview of the
(a) Those owned by the Government or any of its subdivisions, instrumentalities, or agencies,
exemption under the said law, the other provisions of the said law concerning expropriation proceedings
including government owned and controlled corporations and their subsidiaries;
need also be looked into to address the first issue raised by the respondents and to determine whether or not
expropriation of Lot 1-C was proper under the circumstances. The Court of Appeals properly considered
relevant provisions of R A. No.7279 to determine the issues raised by respondents. Whether or not it (b) Alienable lands of the public domain;
correctly applied the doctrine laid down in Filstream in resolving the issues raised by respondents,
however, is a different matter altogether, and this brings us to the next point.
(c) Unregistered or abandoned and idle lands;
 (d) Those within the declares Areas or Priority Development, Zone Improvement Program sites,
and Slum Improvement and Resettlement Programs sites which have not yet been acquired;

(e) Bagong Lipunan Improvement and Sites and Services or BLISS sites which have not yet
been acquired, and;

(f) Privately-owned lands.

Where on-site development is found more practicable and advantageously to the beneficiaries,
the priorities mentioned in this section shall not apply. The local government units shall give
budgetary priority on-site development of government lands.

SEC. 10. Modes of Lands Acquisition. -- The modes of acquiring lands for purposes of this Act
shall include, amount others, community mortgage, land swapping, land assembly or
consolidation, land banking, donation to the Government, joint-venture agreement, negotiated
purchase, and expropriation: Provided, however; That expropriation shall be resorted to only
when other modes of acquisition have been exhausted: Provided, further; That were
expropriation is resorted to, parcels of land owned by small property owners shall be exempted
for purposes of this Act: Provided finally, That abandoned property, as herein defined, shall be
reverted and escheated to the State in a proceeding analogous to the procedure laid down in
Rule 91 of the Rules of Court.

For the purpose of socialized housing, government-owned and foreclosed properties shall be
acquired by the local government units, or by the National Housing Authority primarily through
negotiated purchase: Provided, That qualified beneficiaries who are actual occupants of the
lands shall be given the right of first refusal.

Whether petitioner has complied with these provisions requires the presentation of evidence, although in its
amended complaint petitioner did allege that it had complied with the requirements. 23 The determination of
this question must await that hearing on the complaint for expropriation, particularly the hearing for the
condemnation of the properties sought to be expropriated. Expropriation proceedings consist of two stages:
first, condemnation of the property after it is determined that its acquisition will be for a public purpose or
public use and, second, the determination of just compensation to be paid for the taking of the private
property to be made by the court with the assistance of not more than three commissioners. 24

WHEREFORE, the decision, dated November 16,1999, and resolution, dated February 23, 2000, of the
Court of Appeals are REVERSED and the order of the trial court, dated December 15,1998, is
REINSTATED. This case is REMANDED to the trial court to further proceedings.1âwphi1.nêt

SO ORDERED.

G.R. No. 106804 August 12, 2004
NATIONAL POWER CORPORATION, petitioner,
vs.
COURT OF APPEALS and ANTONINO POBRE, respondents.
DECISION
CARPIO, J.:
The Case
Before us is a petition for review1 of the 30 March 1992 Decision2 and 14 August 1992 Resolution of the
Court of Appeals in CA-G.R. CV No. 16930. The Court of Appeals affirmed the Decision 3 of the Regional
Trial Court, Branch 17, Tabaco, Albay in Civil Case No. T-552.
The Antecedents
Petitioner National Power Corporation ("NPC") is a public corporation created to generate geothermal,
hydroelectric, nuclear and other power and to transmit electric power nationwide. 4 NPC is authorized by
law to acquire property and exercise the right of eminent domain.
Private respondent Antonino Pobre ("Pobre") is the owner of a 68,969 square-meter land ("Property")
located in Barangay Bano, Municipality of Tiwi, Albay. The Property is covered by TCT No. 4067 and
Subdivision Plan 11-9709.
In 1963, Pobre began developing the Property as a resort-subdivision, which he named as "Tiwi Hot
Springs Resort Subdivision." On 12 January 1966, the then Court of First Instance of Albay approved the
subdivision plan of the Property. The Register of Deeds thus cancelled TCT No. 4067 and issued
independent titles for the approved lots. In 1969, Pobre started advertising and selling the lots.
On 4 August 1965, the Commission on Volcanology certified that thermal mineral water and steam were
present beneath the Property. The Commission on Volcanology found the thermal mineral water and steam
suitable for domestic use and potentially for commercial or industrial use.
NPC then became involved with Pobre's Property in three instances.
First was on 18 February 1972 when Pobre leased to NPC for one year eleven lots from the approved
subdivision plan.
Second was sometime in 1977, the first time that NPC filed its expropriation case against Pobre to acquire
an 8,311.60 square-meter portion of the Property.5 On 23 October 1979, the trial court ordered the
expropriation of the lots upon NPC's payment of P25 per square meter or a total amount of P207,790. NPC
began drilling operations and construction of steam wells. While this first expropriation case was pending,
NPC dumped waste materials beyond the site agreed upon by NPC with Pobre. The dumping of waste
materials altered the topography of some portions of the Property. NPC did not act on Pobre's complaints
and NPC continued with its dumping.
Third was on 1 September 1979, when NPC filed its second expropriation case against Pobre to acquire an
additional 5,554 square meters of the Property. This is the subject of this petition. NPC needed the lot for
the construction and maintenance of Naglagbong Well Site F-20, pursuant to Proclamation No. 7396 and
Republic Act No. 5092.7 NPC immediately deposited P5,546.36 with the Philippine National Bank. The
deposit represented 10% of the total market value of the lots covered by the second expropriation. On 6
September 1979, NPC entered the 5,554 square-meter lot upon the trial court's issuance of a writ of
possession to NPC.
On 10 December 1984, Pobre filed a motion to dismiss the second complaint for expropriation. Pobre
claimed that NPC damaged his Property. Pobre prayed for just compensation of all the lots affected by
NPC's actions and for the payment of damages.
On 2 January 1985, NPC filed a motion to dismiss the second expropriation case on the ground that NPC
had found an alternative site and that NPC had already abandoned in 1981 the project within the Property
due to Pobre's opposition.
On 8 January 1985, the trial court granted NPC's motion to dismiss but the trial court allowed Pobre to
adduce evidence on his claim for damages. The trial court admitted Pobre's exhibits on the damages
because NPC failed to object.
On 30 August 1985, the trial court ordered the case submitted for decision since NPC failed to appear to
present its evidence. The trial court denied NPC's motion to reconsider the submission of the case for
decision.
NPC filed a petition for certiorari8 with the then Intermediate Appellate Court, questioning the 30 August
1985 Order of the trial court. On 12 February 1987, the Intermediate Appellate Court dismissed NPC's
petition but directed the lower court to rule on NPC's objections to Pobre's documentary exhibits.
On 27 March 1987, the trial court admitted all of Pobre's exhibits and upheld its Order dated 30 August
1985. The trial court considered the case submitted for decision.
On 29 April 1987, the trial court issued its Decision in favor of Pobre. The dispositive portion of the
decision reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the defendant and
against the plaintiff, ordering the plaintiff to pay unto the defendant:
(1) The sum of THREE MILLION FOUR HUNDRED FORTY EIGHT
THOUSAND FOUR HUNDRED FIFTY (P3,448,450.00) PESOS which is the fair
market value of the subdivision of defendant with an area of sixty eight thousand
nine hundred sixty nine (68,969) square meters, plus legal rate of interest per annum
from September 6, 1979 until the whole amount is paid, and upon payment thereof
by the plaintiff the defendant is hereby ordered to execute the necessary Deed of
Conveyance or Absolute Sale of the property in favor of the plaintiff;
(2) The sum of ONE HUNDRED FIFTY THOUSAND (P150,000.00) PESOS for
and as attorney's fees.
 Costs against the plaintiff.
SO ORDERED.9
On 13 July 1987, NPC filed its motion for reconsideration of the decision. On 30 October 1987, the trial
court issued its Order denying NPC's motion for reconsideration.
NPC appealed to the Court of Appeals. On 30 March 1992, the Court of Appeals upheld the decision of the
trial court but deleted the award of attorney's fees. The dispositive portion of the decision reads:
WHEREFORE, by reason of the foregoing, the Decision appealed from is AFFIRMED with the
modification that the award of attorney's fees is deleted. No pronouncement as to costs.
SO ORDERED.10
The Court of Appeals denied NPC's motion for reconsideration in a Resolution dated 14 August 1992.
The Ruling of the Trial Court
In its 69-page decision, the trial court recounted in great detail the scale and scope of the damage NPC
inflicted on the Property that Pobre had developed into a resort-subdivision. Pobre's Property suffered
"permanent injury" because of the noise, water, air and land pollution generated by NPC's geothermal
plants. The construction and operation of the geothermal plants drastically changed the topography of the
Property making it no longer viable as a resort-subdivision. The chemicals emitted by the geothermal
plants damaged the natural resources in the Property and endangered the lives of the residents.
NPC did not only take the 8,311.60 square-meter portion of the Property, but also the remaining area of the
68,969 square-meter Property. NPC had rendered Pobre's entire Property useless as a resort-subdivision.
The Property has become useful only to NPC. NPC must therefore take Pobre's entire Property and pay for
it.
The trial court found the following badges of NPC's bad faith: (1) NPC allowed five years to pass before it
moved for the dismissal of the second expropriation case; (2) NPC did not act on Pobre's plea for NPC to
eliminate or at least reduce the damage to the Property; and (3) NPC singled out Pobre's Property for
piecemeal expropriation when NPC could have expropriated other properties which were not affected in
their entirety by NPC's operation.
The trial court found the just compensation to be P50 per square meter or a total of P3,448,450 for Pobre's
68,969 square-meter Property. NPC failed to contest this valuation. Since NPC was in bad faith and it
employed dilatory tactics to prolong this case, the trial court imposed legal interest on the P3,448,450 from
6 September 1979 until full payment. The trial court awarded Pobre attorney's fees of P150,000.
The Ruling of the Court of Appeals
The Court of Appeals affirmed the decision of the trial court. However, the appellate court deleted the
award of attorney's fees because Pobre did not properly plead for it.
The Issues
NPC claims that the Court of Appeals committed the following errors that warrant reversal of the appellate
court's decision:
1. In not annulling the appealed Decision for having been rendered by the trial court with grave
abuse of discretion and without jurisdiction;
2. In holding that NPC had "taken" the entire Property of Pobre;
3. Assuming arguendo that there was "taking" of the entire Property, in not excluding from the
Property the 8,311.60 square-meter portion NPC had previously expropriated and paid for;
4. In holding that the amount of just compensation fixed by the trial court at P3,448,450.00 with
interest from September 6, 1979 until fully paid, is just and fair;
5. In not holding that the just compensation should be fixed at P25.00 per square meter only as
what NPC and Pobre had previously mutually agreed upon; and
6. In not totally setting aside the appealed Decision of the trial court. 11
Procedural Issues
NPC, represented by the Office of the Solicitor General, insists that at the time that it moved for the
dismissal of its complaint, Pobre had yet to serve an answer or a motion for summary judgment on NPC.
Thus, NPC as plaintiff had the right to move for the automatic dismissal of its complaint. NPC relies on
Section 1, Rule 17 of the 1964 Rules of Court, the Rules then in effect. NPC argues that the dismissal of
the complaint should have carried with it the dismissal of the entire case including Pobre's counterclaim.
NPC's belated attack on Pobre's claim for damages must fail. The trial court's reservation of Pobre's right to
recover damages in the same case is already beyond review. The 8 January 1985 Order of the trial court
attained finality when NPC failed to move for its reconsideration within the 15-day reglementary period.
NPC opposed the order only on 27 May 1985 or more than four months from the issuance of the order.
We cannot fault the Court of Appeals for not considering NPC's objections against the subsistence of
Pobre's claim for damages. NPC neither included this issue in its assignment of errors nor discussed it in its
appellant's brief. NPC also failed to question the trial court's 8 January 1985 Order in the petition for
certiorari12 it had earlier filed with the Court of Appeals. It is only before this Court that NPC now
vigorously assails the preservation of Pobre's claim for damages. Clearly, NPC's opposition to the
existence of Pobre's claim for damages is a mere afterthought. Rules of fair play, justice and due process
dictate that parties cannot raise an issue for the first time on appeal. 13
We must correct NPC's claim that it filed the notice of dismissal just "shortly" after it had filed the
complaint for expropriation. While NPC had intimated several times to the trial court its desire to dismiss
the expropriation case it filed on 5 September 1979,14 it was only on 2 January 1985 that NPC filed its
notice of dismissal.15 It took NPC more than five years to actually file the notice of dismissal. Five years is
definitely not a short period of time. NPC obviously dilly-dallied in filing its notice of dismissal while
NPC meanwhile burdened Pobre's property rights.
Even a timely opposition against Pobre's claim for damages would not yield a favorable ruling for NPC. It
is not Section 1, Rule 17 of the 1964 Rules of Court that is applicable to this case but Rule 67 of the same
Rules, as well as jurisprudence on expropriation cases. Rule 17 referred to dismissal of civil actions in
general while Rule 67 specifically governed eminent domain cases.
Eminent domain is the authority and right of the state, as sovereign, to take private property for public use
upon observance of due process of law and payment of just compensation. 16 The power of eminent domain
may be validly delegated to the local governments, other public entities and public utilities17 such as NPC.
Expropriation is the procedure for enforcing the right of eminent domain. 18 "Eminent Domain" was the
former title of Rule 67 of the 1964 Rules of Court. In the 1997 Rules of Civil Procedure, which took effect
on 1 July 1997, the prescribed method of expropriation is still found in Rule 67, but its title is now
"Expropriation."
Section 1, Rule 17 of the 1964 Rules of Court provided the exception to the general rule that the dismissal
of the complaint is addressed to the sound discretion of the court.19 For as long as all of the elements of
Section 1, Rule 17 were present the dismissal of the complaint rested exclusively on the plaintiff's
will.20 The defending party and even the courts were powerless to prevent the dismissal. 21 The courts could
only accept and record the dismissal.22
A plain reading of Section 1, Rule 17 of the 1964 Rules of Court makes it obvious that this rule was not
intended to supplement Rule 67 of the same Rules. Section 1, Rule 17 of the 1964 Rules of Court, provided
that:
SECTION 1. Dismissal by the plaintiff. — An action may be dismissed by the plaintiff without
order of court by filing a notice of dismissal at any time before service of the answer or of a
motion for summary judgment. Unless otherwise stated in the notice, the dismissal is without
prejudice, except that a notice operates as an adjudication upon the merits when filed by a
plaintiff who has once dismissed in a competent court an action based on or including the same
claim. A class suit shall not be dismissed or compromised without approval of the court.
While Section 1, Rule 17 spoke of the "service of answer or summary judgment," the Rules then did not
require the filing of an answer or summary judgment in eminent domain cases. 23 In lieu of an answer,
Section 3 of Rule 67 required the defendant to file a single motion to dismiss where he should present all
of his objections and defenses to the taking of his property for the purpose specified in the complaint. 24 In
short, in expropriation cases under Section 3 of Rule 67, the motion to dismiss took the place of the
answer.
The records show that Pobre had already filed and served on NPC his "motion to dismiss/answer"25 even
before NPC filed its own motion to dismiss. NPC filed its notice of dismissal of the complaint on 2 January
1985. However, as early as 10 December 1984, Pobre had already filed with the trial court and served on
NPC his "motion to dismiss/answer." A certain Divina Cerela received Pobre's pleading on behalf of
NPC.26 Unfortunately for NPC, even Section 1, Rule 17 of the 1964 Rules of Court could not save its
cause.
NPC is in no position to invoke Section 1, Rule 17 of the 1964 Rules of Court. A plaintiff loses his right
under this rule to move for the immediate dismissal of the complaint once the defendant had served on the
plaintiff the answer or a motion for summary judgment before the plaintiff could file his notice of dismissal
of the complaint.27 Pobre's "motion to dismiss/answer," filed and served way ahead of NPC's motion to
dismiss, takes the case out of Section 1, Rule 17 assuming the same applies.
In expropriation cases, there is no such thing as the plaintiff's matter of right to dismiss the complaint
precisely because the landowner may have already suffered damages at the start of the taking. The
plaintiff's right in expropriation cases to dismiss the complaint has always been subject to court approval
and to certain conditions.28The exceptional right that Section 1, Rule 17 of the 1964 Rules of Court
conferred on the plaintiff must be understood to have applied only to other civil actions. The 1997 Rules of
Civil Procedure abrogated this exceptional right.29
The power of eminent domain is subject to limitations. A landowner cannot be deprived of his right over
his land until expropriation proceedings are instituted in court.30 The court must then see to it that the
taking is for public use, there is payment of just compensation and there is due process of law.31
If the propriety of the taking of private property through eminent domain is subject to judicial scrutiny, the
dismissal of the complaint must also pass judicial inquiry because private rights may have suffered in the
meantime. The dismissal, withdrawal or abandonment of the expropriation case cannot be made arbitrarily.
If it appears to the court that the expropriation is not for some public use,32 then it becomes the duty of the
court to dismiss the action.33However, when the defendant claims that his land suffered damage because of
the expropriation, the dismissal of the action should not foreclose the defendant's right to have his damages
ascertained either in the same case or in a separate action.34
Thus, NPC's theory that the dismissal of its complaint carried with it the dismissal of Pobre's claim for
damages is baseless. There is nothing in Rule 67 of the 1964 Rules of Court that provided for the dismissal
of the defendant's claim for damages, upon the dismissal of the expropriation case. Case law holds that in
the event of dismissal of the expropriation case, the claim for damages may be made either in a separate or
in the same action, for all damages occasioned by the institution of the expropriation case. 35 The dismissal
of the complaint can be made under certain conditions, such as the reservation of the defendant's right to
recover damages either in the same or in another action.36 The trial court in this case reserved Pobre's right
to prove his claim in the same case, a reservation that has become final due to NPC's own fault.
Factual Findings of the Trial and Appellate Courts Bind the Court
The trial and appellate courts held that even before the first expropriation case, Pobre had already
established his Property as a resort-subdivision. NPC had wrought so much damage to the Property that
NPC had made the Property uninhabitable as a resort-subdivision. NPC's facilities such as steam wells, nag
wells, power plants, power lines, and canals had hemmed in Pobre's Property. NPC's operations of its
geothermal project also posed a risk to lives and properties.
We uphold the factual findings of the trial and appellate courts. Questions of facts are beyond the pale of
Rule 45 of the Rules of Court as a petition for review may only raise questions of law. 37 Moreover, factual
findings of the trial court, particularly when affirmed by the Court of Appeals, are generally binding on this
Court.38 We thus find no reason to set aside the two courts' factual findings.
NPC points out that it did not take Pobre's 68,969 square-meter Property. NPC argues that assuming that it
is liable for damages, the 8,311.60 square-meter portion that it had successfully expropriated and fully paid
for should have been excluded from the 68,969 square-meter Property that Pobre claims NPC had
damaged.
We are not persuaded.
In its 30 October 1987 Order denying NPC's motion for reconsideration, the trial court pointed out that the
Property originally had a total area of 141,300 square meters.39 Pobre converted the Property into a resort-
subdivision and sold lots to the public. What remained of the lots are the 68,969 square meters of
land.40 Pobre no longer claimed damages for the other lots that he had before the expropriation.
Pobre identified in court the lots forming the 68,969 square-meter Property. NPC had the opportunity to
object to the identification of the lots.41 NPC, however, failed to do so. Thus, we do not disturb the trial and
appellate courts' finding on the total land area NPC had damaged.
 NPC must Pay Just Compensation for the Entire Property NPC moved for the dismissal of the complaint for the second expropriation on the ground that it had found
an alternative site and there was stiff opposition from Pobre.49 NPC abandoned the second expropriation
case five years after it had already deprived the Property virtually of all its value. NPC has demonstrated its
Ordinarily, the dismissal of the expropriation case restores possession of the expropriated land to the
utter disregard for Pobre's property rights.
landowner.42However, when possession of the land cannot be turned over to the landowner because it is
neither convenient nor feasible anymore to do so, the only remedy available to the aggrieved landowner is
to demand payment of just compensation.43 Thus, it would now be futile to compel NPC to institute expropriation proceedings to determine the just
compensation for Pobre's 68,969 square-meter Property. Pobre must be spared any further delay in his
pursuit to receive just compensation from NPC.
In this case, we agree with the trial and appellate courts that it is no longer possible and practical to restore
possession of the Property to Pobre. The Property is no longer habitable as a resort-subdivision. The
Property is worthless to Pobre and is now useful only to NPC. Pobre has completely lost the Property as if Just compensation is the fair and full equivalent of the loss.50 The trial and appellate courts endeavored to
NPC had physically taken over the entire 68,969 square-meter Property. meet this standard. The P50 per square meter valuation of the 68,969 square-meter Property is reasonable
considering that the Property was already an established resort-subdivision. NPC has itself to blame for not
contesting the valuation before the trial court. Based on the P50 per square meter valuation, the total
In United States v. Causby,44 the U.S. Supreme Court ruled that when private property is rendered
amount of just compensation that NPC must pay Pobre is P3,448,450.
uninhabitable by an entity with the power to exercise eminent domain, the taking is deemed complete.
Such taking is thus compensable.
The landowner is entitled to legal interest on the price of the land from the time of the taking up to the time
of full payment by the government.51 In accord with jurisprudence, we fix the legal interest at six per cent
In this jurisdiction, the Court has ruled that if the government takes property without expropriation and
(6%) per annum.52 The legal interest should accrue from 6 September 1979, the date when the trial court
devotes the property to public use, after many years the property owner may demand payment of just
issued the writ of possession to NPC, up to the time that NPC fully pays Pobre. 53
compensation.45 This principle is in accord with the constitutional mandate that private property shall not
be taken for public use without just compensation.46
NPC's abuse of its eminent domain authority is appalling. However, we cannot award moral damages
47 because Pobre did not assert his right to it.54 We also cannot award attorney's fees in Pobre's favor since he
In the recent case of National Housing Authority v. Heirs of Isidro Guivelondo, the Court compelled the
did not appeal from the decision of the Court of Appeals denying recovery of attorney's fees. 55
National Housing Authority ("NHA") to pay just compensation to the landowners even after the NHA had
already abandoned the expropriation case. The Court pointed out that a government agency could not
initiate expropriation proceedings, seize a person's property, and then just decide not to proceed with the Nonetheless, we find it proper to award P50,000 in temperate damages to Pobre. The court may award
expropriation. Such a complete turn-around is arbitrary and capricious and was condemned by the Court in temperate or moderate damages, which are more than nominal but less than compensatory damages, if the
the strongest possible terms. NHA was held liable to the landowners for the prejudice that they had court finds that a party has suffered some pecuniary loss but its amount cannot be proved with certainty
suffered. from the nature of the case.56As the trial and appellate courts noted, Pobre's resort-subdivision was no
longer just a dream because Pobre had already established the resort-subdivision and the prospect for it
was initially encouraging. That is, until NPC permanently damaged Pobre's Property. NPC did not just
In this case, NPC appropriated Pobre's Property without resort to expropriation proceedings. NPC
destroy the property. NPC dashed Pobre's hope of seeing his Property achieve its full potential as a resort-
dismissed its own complaint for the second expropriation. At no point did NPC institute expropriation
subdivision.
proceedings for the lots outside the 5,554 square-meter portion subject of the second expropriation. The
only issues that the trial court had to settle were the amount of just compensation and damages that NPC
had to pay Pobre. The lesson in this case must not be lost on entities with eminent domain authority. Such entities cannot
trifle with a citizen's property rights. The power of eminent domain is an extraordinary power they must
wield with circumspection and utmost regard for procedural requirements. Thus, we hold NPC liable for
This case ceased to be an action for expropriation when NPC dismissed its complaint for expropriation.
exemplary damages of P100,000. Exemplary damages or corrective damages are imposed, by way of
Since this case has been reduced to a simple case of recovery of damages, the provisions of the Rules of
example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory
Court on the ascertainment of the just compensation to be paid were no longer applicable. A trial before
damages.57
commissioners, for instance, was dispensable.

WHEREFORE, we DENY the petition for lack of merit. The appealed Decision of the Court of Appeals
We have held that the usual procedure in the determination of just compensation is waived when the
dated 30 March 1992 in CA-G.R. CV No. 16930 is AFFIRMED with MODIFICATION. National Power
government itself initially violates procedural requirements.48 NPC's taking of Pobre's property without
Corporation is ordered to pay Antonino Pobre P3,448,450 as just compensation for the 68,969 square-
filing the appropriate expropriation proceedings and paying him just compensation is a transgression of
meter Property at P50 per square meter. National Power Corporation is directed to pay legal interest at
procedural due process.
6% per annum on the amount adjudged from 6 September 1979 until fully paid. Upon National Power
Corporation's payment of the full amount, Antonino Pobre is ordered to execute a Deed of Conveyance of
From the beginning, NPC should have initiated expropriation proceedings for Pobre's entire 68,969 square- the Property in National Power Corporation's favor. National Power Corporation is further ordered to pay
meter Property. NPC did not. Instead, NPC embarked on a piecemeal expropriation of the Property. Even temperate and exemplary damages of P50,000 and P100,000, respectively. No costs.
as the second expropriation case was still pending, NPC was well aware of the damage that it had
unleashed on the entire Property. NPC, however, remained impervious to Pobre's repeated demands for
SO ORDERED.
NPC to abate the damage that it had wrought on his Property.

G.R. No. 160656 June 15, 2007
REPUBLIC OF THE PHILIPPINES (Department of Public Works and Highways), petitioner,
vs.
ISMAEL ANDAYA, respondent.
DECISION
QUISUMBING, J.:
This is a petition for review of the Decision1 dated October 30, 2003 of the Court of Appeals in CA-G.R.
CV No. 65066 affirming with modification the Decision2 of the Regional Trial Court of Butuan City,
Branch 33 in Civil Case No. 4378, for enforcement of easement of right-of-way (or eminent domain).
Respondent Ismael Andaya is the registered owner of two parcels of land in Bading, Butuan City. His
ownership is evidenced by Transfer Certificates of Title Nos. RT-10225 and RT-10646. These properties
are subject to a 60-meter wide perpetual easement for public highways, irrigation ditches, aqueducts, and
other similar works of the government or public enterprise, at no cost to the government, except only the
value of the improvements existing thereon that may be affected.
Petitioner Republic of the Philippines (Republic) negotiated with Andaya to enforce the 60-meter easement
of right-of-way. The easement was for concrete levees and floodwalls for Phase 1, Stage 1 of the Lower
Agusan Development Project. The parties, however, failed to reach an agreement.
On December 13, 1995, the Republic instituted an action before the Regional Trial Court of Butuan City to
enforce the easement of right-of-way or eminent domain. The trial court issued a writ of possession on
April 26, 1996.3 It also constituted a Board of Commissioners (Board) to determine the just compensation.
Eventually, the trial court issued an Order of Expropriation upon payment of just compensation. 4 Later, the
Board reported that there was a discrepancy in the description of the property sought to be expropriated.
The Republic thus amended its complaint, reducing the 60-meter easement to 10 meters, or an equivalent
of 701 square meters.
On December 10, 1998, the Board reported that the project would affect a total of 10,380 square meters of
Andaya’s properties, 4,443 square meters of which will be for the 60-meter easement. The Board also
reported that the easement would diminish the value of the remaining 5,937 square meters. As a result, it
recommended the payment of consequential damages amounting to ₱2,820,430 for the remaining area. 5
Andaya objected to the report because although the Republic reduced the easement to 10 meters or an
equivalent of 701 square meters, the Board still granted it 4,443 square meters. He contended that the
consequential damages should be based on the remaining area of 9,679 square meters. Thus, the just
compensation should be ₱11,373,405. The Republic did not file any comment, opposition, nor objection.
After considering the Board’s report, the trial court decreed on April 29, 1999, as follows:
WHEREFORE, in the light of the foregoing, the Court decides as follows:
a) That the plaintiff is legally entitled to its inherent right of expropriation to, viz.: 1) the lot now known as
lot 3291-B-1-A, portion of lot 3291-B-1, (LRC) Psd-255693, covered by TCT No. RT-10225, with an area
of 288 sq. m.; and 2) the lot now known as lot 3293-F-5-B-1, portion of lot 3293-F-5-B (LRC) Psd-
230236, covered by TCT No. RT-10646, with an area of 413 sq. m., both of the Butuan City Registry of
Deeds, it being shown that it is for public use and purpose --- free of charge by reason of the statutory lien
of easement of right-of-way imposed on defendant’s titles;
b) That however, the plaintiff is obligated to pay defendant the sum of TWO MILLION EIGHT
HUNDRED TWENTY THOUSAND FOUR HUNDRED THIRTY (P2,820,430.00) PESOS as fair and
reasonable severance damages;
c) To pay members of the Board of Commissioners, thus: for the chairman --- TWENTY THOUSAND
(P20,000.00) PESOS and the two (2) members at FIFTEEN THOUSAND (P15,000.00) PESOS each;
d) To pay defendant’s counsel FIFTY THOUSAND (P50,000.00) PESOS as Attorney’s fees; and finally,
e) That the Registry of Deeds of Butuan City is also directed to effect the issuance of Transfer Certificate
of Titles for the aforementioned two (2) lots in the name of the Republic of the Philippines, following the
technical description as appearing in pages 6, 7, and 8 of the Commissioner’s Report.
NO COSTS.
IT IS SO ORDERED.6
Both parties appealed to the Court of Appeals. The Republic contested the awards of severance damages
and attorney’s fees while Andaya demanded just compensation for his entire property minus the easement.
Andaya alleged that the easement would prevent ingress and egress to his property and turn it into a catch
basin for the floodwaters coming from the Agusan River. As a result, his entire property would be rendered
unusable and uninhabitable. He thus demanded ₱11,373,405 as just compensation based on the total
compensable area of 9,679 square meters.
The Court of Appeals modified the trial court’s decision by imposing a 6% interest on the consequential
damages from the date of the writ of possession or the actual taking, and by deleting the attorney’s fees.
Hence, the instant petition. Simply put, the sole issue for resolution may be stated thus: Is the Republic
liable for just compensation if in enforcing the legal easement of right-of-way on a property, the remaining
area would be rendered unusable and uninhabitable?
It is undisputed that there is a legal easement of right-of-way in favor of the Republic. Andaya’s transfer
certificates of title7 contained the reservation that the lands covered thereby are subject to the provisions of
the Land Registration Act8 and the Public Land Act.9 Section 11210 of the Public Land Act provides that
lands granted by patent shall be subject to a right-of-way not exceeding 60 meters in width for public
highways, irrigation ditches, aqueducts, and other similar works of the government or any public
enterprise, free of charge, except only for the value of the improvements existing thereon that may be
affected. In view of this, the Court of Appeals declared that all the Republic needs to do is to enforce such
right without having to initiate expropriation proceedings and without having to pay any just
compensation.11 Hence, the Republic may appropriate the 701 square meters necessary for the construction
of the floodwalls without paying for it.
We are, however, unable to sustain the Republic’s argument that it is not liable to pay consequential
damages if in enforcing the legal easement on Andaya’s property, the remaining area would be rendered
unusable and uninhabitable. "Taking," in the exercise of the power of eminent domain, occurs not only
when the government actually deprives or dispossesses the property owner of his property or of its
ordinary use, but also when there is a practical destruction or material impairment of the value of his
property.12 Using this standard, there was undoubtedly a taking of the remaining area of Andaya’s
property. True, no burden was imposed thereon and Andaya still retained title and possession of the
property. But, as correctly observed by the Board and affirmed by the courts a quo, the nature and the
effect of the floodwalls would deprive Andaya of the normal use of the remaining areas. It would prevent
ingress and egress to the property and turn it into a catch basin for the floodwaters coming from the
Agusan River.

For this reason, in our view, Andaya is entitled to payment of just compensation, which must be neither
more nor less than the monetary equivalent of the land.13 One of the basic principles enshrined in our
Constitution is that no person shall be deprived of his private property without due process of law; and in
expropriation cases, an essential element of due process is that there must be just compensation whenever
private property is taken for public use. Noteworthy, Section 9, Article III of our Constitution mandates
that private property shall not be taken for public use without just compensation.14

Finally, we affirm the findings of the Court of Appeals and the trial court that just compensation should be
paid only for 5,937 square meters of the total area of 10,380 square meters. Admittedly, the Republic needs
only a 10-meter easement or an equivalent of 701 square meters. Yet, it is also settled that it is legally
entitled to a 60-meter wide easement or an equivalent of 4,443 square meters. Clearly, although the
Republic will use only 701 square meters, it should not be liable for the 3,742 square meters, which
constitute the difference between this area of 701 square meters and the 4,443 square meters to which it is
fully entitled to use as easement, free of charge except for damages to affected existing improvements, if
any, under Section 112 of the Public Land Act.

In effect, without such damages alleged and proved, the Republic is liable for just compensation of only
the remaining areas consisting of 5,937 square meters, with interest thereon at the legal rate of 6% per
annum from the date of the writ of possession or the actual taking until full payment is made. For the
purpose of determining the final just compensation, the case is remanded to the trial court. Said court is
ordered to make the determination of just compensation payable to respondent Andaya with deliberate
dispatch.

WHEREFORE, the Decision of the Court of Appeals dated October 30, 2003 in CA-G.R. CV No. 65066,
modifying the Decision of the Regional Trial Court of Butuan City, Branch 33 in Civil Case No. 4378, is
AFFIRMED with MODIFICATION as herein set forth.

The case is hereby REMANDED to the Regional Trial Court of Butuan City, Branch 33 for the
determination of the final just compensation of the compensable area consisting of 5,937 square meters,
with interest thereon at the legal rate of 6% per annum from the date of the writ of possession or actual
taking until fully paid.

No pronouncement as to costs.

SO ORDERED.

G.R. No. 169914 April 18, 2008
ASIA'S EMERGING DRAGON CORPORATION, petitioner,
vs.
DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS, SECRETARY LEANDRO
R. MENDOZA and MANILA INTERNATIONAL AIRPORT AUTHORITY, respondents.
x ----------------------------------------- x
G.R. No. 174166 April 18, 2008
REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF TRANSPORTATION
AND COMMUNICATIONS and MANILA INTERNATIONAL AIRPORT
AUTHORITY, petitioner,
vs.
HON. COURT OF APPEALS and SALACNIB BATERINA, respondents.
DECISION
CHICO-NAZARIO, J.:
This Court is still continuously besieged by Petitions arising from the awarding of the Ninoy Aquino
International Airport International Passenger Terminal III (NAIA IPT III) Project to the Philippine
International Air Terminals Co., Inc. (PIATCO), despite the promulgation by this Court of Decisions and
Resolutions in two cases, Agan, Jr. v. Philippine International Air Terminals Co., Inc.1 and Republic v.
Gingoyon,2 which already resolved the more basic and immediate issues arising from the said award. The
sheer magnitude of the project, the substantial cost of its building, the expected high profits from its
operations, and its remarkable impact on the Philippine economy, consequently raised significant interest
in the project from various quarters.
Once more, two new Petitions concerning the NAIA IPT III Project are before this Court. It is only
appropriate, however, that the Court first recounts its factual and legal findings in Agan and Gingoyon to
ascertain that its ruling in the Petitions at bar shall be consistent and in accordance therewith.
Agan, Jr. v. Philippine International Air Terminals Co., Inc. (G.R. Nos. 155001, 155547, and 155661)
Already established and incontrovertible are the following facts in Agan:
In August 1989, the [Department of Trade and Communications (DOTC)] engaged the services
of Aeroport de Paris (ADP) to conduct a comprehensive study of the Ninoy Aquino
International Airport (NAIA) and determine whether the present airport can cope with the
traffic development up to the year 2010. The study consisted of two parts: first, traffic forecasts,
capacity of existing facilities, NAIA future requirements, proposed master plans and
development plans; and second, presentation of the preliminary design of the passenger
terminal building. The ADP submitted a Draft Final Report to the DOTC in December 1989.
Some time in 1993, six business leaders consisting of John Gokongwei, Andrew Gotianun,
Henry Sy, Sr., Lucio Tan, George Ty and Alfonso Yuchengco met with then President Fidel V.
Ramos to explore the possibility of investing in the construction and operation of a new
international airport terminal. To signify their commitment to pursue the project, they formed
the Asia's Emerging Dragon Corp. (AEDC) which was registered with the Securities and
Exchange Commission (SEC) on September 15, 1993.
On October 5, 1994, AEDC submitted an unsolicited proposal to the Government through the
DOTC/[Manila International Airport Authority (MIAA)] for the development of NAIA
International Passenger Terminal III (NAIA IPT III) under a build-operate-and-transfer
arrangement pursuant to RA 6957 as amended by RA 7718 (BOT Law).
On December 2, 1994, the DOTC issued Dept. Order No. 94-832 constituting the
Prequalification Bids and Awards Committee (PBAC) for the implementation of the NAIA IPT
III project.
On March 27, 1995, then DOTC Secretary Jose Garcia endorsed the proposal of AEDC to the
National Economic and Development Authority (NEDA). A revised proposal, however, was
forwarded by the DOTC to NEDA on December 13, 1995. On January 5, 1996, the NEDA
Investment Coordinating Council (NEDA ICC) - Technical Board favorably endorsed the
project to the ICC - Cabinet Committee which approved the same, subject to certain conditions,
on January 19, 1996. On February 13, 1996, the NEDA passed Board Resolution No. 2 which
approved the NAIA IPT III project.
On June 7, 14, and 21, 1996, DOTC/MIAA caused the publication in two daily newspapers of
an invitation for competitive or comparative proposals on AEDC's unsolicited proposal, in
accordance with Sec. 4-A of RA 6957, as amended. The alternative bidders were required to
submit three (3) sealed envelopes on or before 5:00 p.m. of September 20, 1996. The first
envelope should contain the Prequalification Documents, the second envelope the Technical
Proposal, and the third envelope the Financial Proposal of the proponent.
On June 20, 1996, PBAC Bulletin No. 1 was issued, postponing the availment of the Bid
Documents and the submission of the comparative bid proposals. Interested firms were
permitted to obtain the Request for Proposal Documents beginning June 28, 1996, upon
submission of a written application and payment of a non-refundable fee of P50,000.00
(US$2,000).
The Bid Documents issued by the PBAC provided among others that the proponent must have
adequate capability to sustain the financing requirement for the detailed engineering, design,
construction, operation, and maintenance phases of the project. The proponent would be
evaluated based on its ability to provide a minimum amount of equity to the project, and its
capacity to secure external financing for the project.
On July 23, 1996, the PBAC issued PBAC Bulletin No. 2 inviting all bidders to a pre-bid
conference on July 29, 1996.
On August 16, 1996, the PBAC issued PBAC Bulletin No. 3 amending the Bid Documents. The
following amendments were made on the Bid Documents:
a. Aside from the fixed Annual Guaranteed Payment, the proponent shall include in
its financial proposal an additional percentage of gross revenue share of the
Government, as follows:
 i. First 5 years 5.0%
ii. Next 10 years 7.5%
iii. Next 10 years 10.0%
b. The amount of the fixed Annual Guaranteed Payment shall be subject of the price
challenge. Proponent may offer an Annual Guaranteed Payment which need not be
of equal amount, but payment of which shall start upon site possession.
c. The project proponent must have adequate capability to sustain the financing
requirement for the detailed engineering, design, construction, and/or operation and
maintenance phases of the project as the case may be. For purposes of pre-
qualification, this capability shall be measured in terms of:
i. Proof of the availability of the project proponent and/or the consortium
to provide the minimum amount of equity for the project; and
ii. a letter testimonial from reputable banks attesting that the project
proponent and/or the members of the consortium are banking with them,
that the project proponent and/or the members are of good financial
standing, and have adequate resources.
d. The basis for the prequalification shall be the proponent's compliance with the
minimum technical and financial requirements provided in the Bid Documents and
the [Implementing Rules and Regulations (IRR)] of the BOT Law. The minimum
amount of equity shall be 30% of the Project Cost.
e. Amendments to the draft Concession Agreement shall be issued from time to
time. Said amendments shall only cover items that would not materially affect the
preparation of the proponent's proposal.
On August 29, 1996, the Second Pre-Bid Conference was held where certain clarifications were
made. Upon the request of prospective bidder People's Air Cargo & Warehousing Co., Inc
(Paircargo), the PBAC warranted that based on Sec. 11.6, Rule 11 of the Implementing Rules
and Regulations of the BOT Law, only the proposed Annual Guaranteed Payment submitted by
the challengers would be revealed to AEDC, and that the challengers' technical and financial
proposals would remain confidential. The PBAC also clarified that the list of revenue sources
contained in Annex 4.2a of the Bid Documents was merely indicative and that other revenue
sources may be included by the proponent, subject to approval by DOTC/MIAA. Furthermore,
the PBAC clarified that only those fees and charges denominated as Public Utility Fees would
be subject to regulation, and those charges which would be actually deemed Public Utility Fees
could still be revised, depending on the outcome of PBAC's query on the matter with the
Department of Justice.
In September 1996, the PBAC issued Bid Bulletin No. 5, entitled "Answers to the Queries of
PAIRCARGO as Per Letter Dated September 3 and 10, 1996." Paircargo's queries and the
PBAC's responses were as follows:
1. It is difficult for Paircargo and Associates to meet the required minimum equity
requirement as prescribed in Section 8.3.4 of the Bid Documents considering that
the capitalization of each member company is so structured to meet the
requirements and needs of their current respective business undertaking/activities.
In order to comply with this equity requirement, Paircargo is requesting PBAC to
just allow each member of (sic) corporation of the Joint Venture to just execute an
agreement that embodies a commitment to infuse the required capital in case the
project is awarded to the Joint Venture instead of increasing each corporation's
current authorized capital stock just for prequalification purposes.
In prequalification, the agency is interested in one's financial capability at the time
of prequalification, not future or potential capability.
A commitment to put up equity once awarded the project is not enough to establish
that "present" financial capability. However, total financial capability of all member
companies of the Consortium, to be established by submitting the respective
companies' audited financial statements, shall be acceptable.
2. At present, Paircargo is negotiating with banks and other institutions for the
extension of a Performance Security to the joint venture in the event that the
Concessions Agreement (sic) is awarded to them. However, Paircargo is being
required to submit a copy of the draft concession as one of the documentary
requirements. Therefore, Paircargo is requesting that they'd (sic) be furnished copy
of the approved negotiated agreement between the PBAC and the AEDC at the
soonest possible time.
A copy of the draft Concession Agreement is included in the Bid Documents. Any
material changes would be made known to prospective challengers through bid
bulletins. However, a final version will be issued before the award of contract.
The PBAC also stated that it would require AEDC to sign Supplement C of the Bid Documents
(Acceptance of Criteria and Waiver of Rights to Enjoin Project) and to submit the same with
the required Bid Security.
On September 20, 1996, the consortium composed of People's Air Cargo and Warehousing Co.,
Inc. (Paircargo), Phil. Air and Grounds Services, Inc. (PAGS) and Security Bank Corp.
(Security Bank) (collectively, Paircargo Consortium) submitted their competitive proposal to
the PBAC. On September 23, 1996, the PBAC opened the first envelope containing the
prequalification documents of the Paircargo Consortium. On the following day, September 24,
1996, the PBAC prequalified the Paircargo Consortium.
On September 26, 1996, AEDC informed the PBAC in writing of its reservations as regards the
Paircargo Consortium, which include:
a. The lack of corporate approvals and financial capability of PAIRCARGO;
b. The lack of corporate approvals and financial capability of PAGS;
c. The prohibition imposed by RA 337, as amended (the General Banking Act) on
the amount that Security Bank could legally invest in the project;
d. The inclusion of Siemens as a contractor of the PAIRCARGO Joint Venture, for
prequalification purposes; and
 e. The appointment of Lufthansa as the facility operator, in view of the Philippine
requirement in the operation of a public utility.
The PBAC gave its reply on October 2, 1996, informing AEDC that it had considered the issues
raised by the latter, and that based on the documents submitted by Paircargo and the established
prequalification criteria, the PBAC had found that the challenger, Paircargo, had prequalified to
undertake the project. The Secretary of the DOTC approved the finding of the PBAC.
The PBAC then proceeded with the opening of the second envelope of the Paircargo
Consortium which contained its Technical Proposal.
On October 3, 1996, AEDC reiterated its objections, particularly with respect to Paircargo's
financial capability, in view of the restrictions imposed by Section 21-B of the General Banking
Act and Sections 1380 and 1381 of the Manual Regulations for Banks and Other Financial
Intermediaries. On October 7, 1996, AEDC again manifested its objections and requested that it
be furnished with excerpts of the PBAC meeting and the accompanying technical evaluation
report where each of the issues they raised were addressed.
On October 16, 1996, the PBAC opened the third envelope submitted by AEDC and the
Paircargo Consortium containing their respective financial proposals. Both proponents offered
to build the NAIA Passenger Terminal III for at least $350 million at no cost to the government
and to pay the government: 5% share in gross revenues for the first five years of operation,
7.5% share in gross revenues for the next ten years of operation, and 10% share in gross
revenues for the last ten years of operation, in accordance with the Bid Documents. However, in
addition to the foregoing, AEDC offered to pay the government a total of P135 million as
guaranteed payment for 27 years while Paircargo Consortium offered to pay the government a
total of P17.75 billion for the same period.
Thus, the PBAC formally informed AEDC that it had accepted the price proposal submitted by
the Paircargo Consortium, and gave AEDC 30 working days or until November 28, 1996 within
which to match the said bid, otherwise, the project would be awarded to Paircargo.
As AEDC failed to match the proposal within the 30-day period, then DOTC Secretary Amado
Lagdameo, on December 11, 1996, issued a notice to Paircargo Consortium regarding AEDC's
failure to match the proposal.
On February 27, 1997, Paircargo Consortium incorporated into Philippine International Airport
Terminals Co., Inc. (PIATCO).
AEDC subsequently protested the alleged undue preference given to PIATCO and reiterated its
objections as regards the prequalification of PIATCO.
On April 11, 1997, the DOTC submitted the concession agreement for the second-pass approval
of the NEDA-ICC.
On April 16, 1997, AEDC filed with the Regional Trial Court of Pasig a Petition for
Declaration of Nullity of the Proceedings, Mandamus and Injunction against the Secretary of
the DOTC, the Chairman of the PBAC, the voting members of the PBAC and Pantaleon D.
Alvarez, in his capacity as Chairman of the PBAC Technical Committee.
xxxx
On July 9, 1997, the DOTC issued the notice of award for the project to PIATCO.
On July 12, 1997, the Government, through then DOTC Secretary Arturo T. Enrile, and
PIATCO, through its President, Henry T. Go, signed the "Concession Agreement for the Build-
Operate-and-Transfer Arrangement of the Ninoy Aquino International Airport Passenger
Terminal III" (1997 Concession Agreement). x x x.
On November 26, 1998, the Government and PIATCO signed an Amended and Restated
Concession Agreement (ARCA). x x x.
Subsequently, the Government and PIATCO signed three Supplements to the ARCA. The First
Supplement was signed on August 27, 1999; the Second Supplement on September 4, 2000;
and the Third Supplement on June 22, 2001 (collectively, Supplements).
xxxx
Meanwhile, the MIAA which is charged with the maintenance and operation of the NAIA
Terminals I and II, had existing concession contracts with various service providers to offer
international airline airport services, such as in-flight catering, passenger handling, ramp and
ground support, aircraft maintenance and provisions, cargo handling and warehousing, and
other services, to several international airlines at the NAIA. x x x.
On September 17, 2002, the workers of the international airline service providers, claiming that
they stand to lose their employment upon the implementation of the questioned agreements,
filed before this Court a petition for prohibition to enjoin the enforcement of said agreements.
On October 15, 2002, the service providers, joining the cause of the petitioning workers, filed a
motion for intervention and a petition-in-intervention.
On October 24, 2002, Congressmen Salacnib Baterina, Clavel Martinez and Constantino
Jaraula filed a similar petition with this Court.
On November 6, 2002, several employees of the MIAA likewise filed a petition assailing the
legality of the various agreements.
On December 11, 2002, another group of Congressmen, Hon. Jacinto V. Paras, Rafael P.
Nantes, Eduardo C. Zialcita, Willie B. Villarama, Prospero C. Nograles, Prospero A. Pichay,
Jr., Harlin Cast Abayon and Benasing O. Macaranbon, moved to intervene in the case as
Respondents-Intervenors. They filed their Comment-In-Intervention defending the validity of
the assailed agreements and praying for the dismissal of the petitions.
During the pendency of the case before this Court, President Gloria Macapagal Arroyo, on
November 29, 2002, in her speech at the 2002 Golden Shell Export Awards at Malacañang
Palace, stated that she will not "honor (PIATCO) contracts which the Executive Branch's legal
offices have concluded (as) null and void."3
The Court first dispensed with the procedural issues raised in Agan, ruling that (a) the MIAA service
providers and its employees, petitioners in G.R. Nos. 155001 and 155661, had the requisite standing since
they had a direct and substantial interest to protect by reason of the implementation of the PIATCO
Contracts which would affect their source of livelihood; 4 and (b) the members of the House of
Representatives, petitioners in G.R. No. 155547, were granted standing in view of the serious legal
questions involved and their impact on public interest.5
As to the merits of the Petitions in Agan, the Court concluded that:
In sum, this Court rules that in view of the absence of the requisite financial capacity of the
Paircargo Consortium, predecessor of respondent PIATCO, the award by the PBAC of the
contract for the construction, operation and maintenance of the NAIA IPT III is null and void.
Further, considering that the 1997 Concession Agreement contains material and substantial
amendments, which amendments had the effect of converting the 1997 Concession Agreement
into an entirely different agreement from the contract bidded upon, the 1997 Concession
Agreement is similarly null and void for being contrary to public policy. The provisions under
Sections 4.04(b) and (c) in relation to Section 1.06 of the 1997 Concession Agreement and
Section 4.04(c) in relation to Section 1.06 of the ARCA, which constitute a direct government
guarantee expressly prohibited by, among others, the BOT Law and its Implementing Rules and
Regulations are also null and void. The Supplements, being accessory contracts to the ARCA,
are likewise null and void.6
Hence, the fallo of the Court's Decision in Agan reads:
WHEREFORE, the 1997 Concession Agreement, the Amended and Restated Concession
Agreement and the Supplements thereto are set aside for being null and void. 7
In a Resolution8 dated 21 January 2004, the Court denied with finality the Motions for Reconsideration of
its 5 May 2003 Decision in Agan filed by therein respondents PIATCO and Congressmen Paras, et al., and
respondents-intervenors.9 Significantly, the Court declared in the same Resolution that:
This Court, however, is not unmindful of the reality that the structures comprising the NAIA
IPT III facility are almost complete and that funds have been spent by PIATCO in their
construction. For the government to take over the said facility, it has to compensate
respondent PIATCO as builder of the said structures. The compensation must be just and
in accordance with law and equity for the government can not unjustly enrich itself at the
expense of PIATCO and its investors.10 (Emphasis ours.)
It is these afore-quoted pronouncements that gave rise to the Petition in Gingoyon.
Republic v. Gingoyon (G.R. No. 166429)
According to the statement of facts in Gingoyon:
After the promulgation of the rulings in Agan, the NAIA 3 facilities have remained in the
possession of PIATCO, despite the avowed intent of the Government to put the airport terminal
into immediate operation. The Government and PIATCO conducted several rounds of
negotiation regarding the NAIA 3 facilities. It also appears that arbitral proceedings were
commenced before the International Chamber of Commerce International Court of Arbitration
and the International Centre for the Settlement of Investment Disputes, although the
Government has raised jurisdictional questions before those two bodies.
Then, on 21 December 2004, the Government filed a Complaint for expropriation with the
Pasay City Regional Trial Court (RTC), together with an Application for Special Raffle seeking
the immediate holding of a special raffle. The Government sought upon the filing of the
complaint the issuance of a writ of possession authorizing it to take immediate possession and
control over the NAIA 3 facilities. The Government also declared that it had deposited the
amount of P3,002,125,000.00 (3 Billion) in Cash with the Land Bank of the Philippines,
representing the NAIA 3 terminal's assessed value for taxation purposes.
The case was raffled to Branch 117 of the Pasay City RTC, presided by respondent judge Hon.
Henrick F. Gingoyon (Hon. Gingoyon). On the same day that the Complaint was filed, the RTC
issued an Order directing the issuance of a writ of possession to the Government, authorizing it
to "take or enter upon the possession" of the NAIA 3 facilities. Citing the case of City of Manila
v. Serrano, the RTC noted that it had the ministerial duty to issue the writ of possession upon
the filing of a complaint for expropriation sufficient in form and substance, and upon deposit
made by the government of the amount equivalent to the assessed value of the property subject
to expropriation. The RTC found these requisites present, particularly noting that "[t]he case
record shows that [the Government has] deposited the assessed value of the [NAIA 3 facilities]
in the Land Bank of the Philippines, an authorized depositary, as shown by the certification
attached to their complaint." Also on the same day, the RTC issued a Writ of
Possession. According to PIATCO, the Government was able to take possession over the NAIA
3 facilities immediately after the Writ of Possession was issued.
However, on 4 January 2005, the RTC issued another Order designed to supplement its 21
December 2004 Order and the Writ of Possession. In the 4 January 2005 Order, now assailed in
the present petition, the RTC noted that its earlier issuance of its writ of possession was
pursuant to Section 2, Rule 67 of the 1997 Rules of Civil Procedure. However, it was observed
that Republic Act No. 8974 (Rep. Act No. 8974), otherwise known as "An Act to Facilitate the
Acquisition of Right-of-Way, Site or Location for National Government Infrastructure Projects
and For Other Purposes" and its Implementing Rules and Regulations (Implementing Rules)
had amended Rule 67 in many respects.
There are at least two crucial differences between the respective procedures under Rep. Act No.
8974 and Rule 67. Under the statute, the Government is required to make immediate payment to
the property owner upon the filing of the complaint to be entitled to a writ of possession,
whereas in Rule 67, the Government is required only to make an initial deposit with an
authorized government depositary. Moreover, Rule 67 prescribes that the initial deposit be
equivalent to the assessed value of the property for purposes of taxation, unlike Rep. Act No.
8974 which provides, as the relevant standard for initial compensation, the market value of the
property as stated in the tax declaration or the current relevant zonal valuation of the Bureau of
Internal Revenue (BIR), whichever is higher, and the value of the improvements and/or
structures using the replacement cost method.
Accordingly, on the basis of Sections 4 and 7 of Rep. Act No. 8974 and Section 10 of the
Implementing Rules, the RTC made key qualifications to its earlier issuances. First, it directed
the Land Bank of the Philippines, Baclaran Branch (LBP-Baclaran), to immediately release the
amount of US$62,343,175.77 to PIATCO, an amount which the RTC characterized as that
which the Government "specifically made available for the purpose of this expropriation;" and
such amount to be deducted from the amount of just compensation due PIATCO as eventually
determined by the RTC. Second, the Government was directed to submit to the RTC a
Certificate of Availability of Funds signed by authorized officials to cover the payment of just
compensation. Third, the Government was directed "to maintain, preserve and safeguard" the
NAIA 3 facilities or "perform such as acts or activities in preparation for their direct operation"
of the airport terminal, pending expropriation proceedings and full payment of just
compensation. However, the Government was prohibited "from performing acts of ownership
like awarding concessions or leasing any part of [NAIA 3] to other parties."
 The very next day after the issuance of the assailed 4 January 2005 Order, the Government filed
an Urgent Motion for Reconsideration, which was set for hearing on 10 January 2005. On 7
January 2005, the RTC issued another Order, the second now assailed before this Court, which
appointed three (3) Commissioners to ascertain the amount of just compensation for the NAIA
3 Complex. That same day, the Government filed a Motion for Inhibition of Hon. Gingoyon.
The RTC heard the Urgent Motion for Reconsideration and Motion for Inhibition on 10 January
2005. On the same day, it denied these motions in an Omnibus Order dated 10 January 2005.
This is the third Order now assailed before this Court. Nonetheless, while the Omnibus
Order affirmed the earlier dispositions in the 4 January 2005 Order, it excepted from
affirmance "the superfluous part of the Order prohibiting the plaintiffs from awarding
concessions or leasing any part of [NAIA 3] to other parties."
Thus, the present Petition for Certiorari and Prohibition under Rule 65 was filed on 13 January
2005. The petition prayed for the nullification of the RTC orders dated 4 January 2005, 7
January 2005, and 10 January 2005, and for the inhibition of Hon. Gingoyon from taking
further action on the expropriation case. A concurrent prayer for the issuance of a temporary
restraining order and preliminary injunction was granted by this Court in a Resolution dated 14
January 2005.11
The Court resolved the Petition of the Republic of the Philippines and Manila International Airport
Authority in Gingoyon in this wise:
In conclusion, the Court summarizes its rulings as follows:
(1) The 2004 Resolution in Agan sets the base requirement that has to be observed before the
Government may take over the NAIA 3, that there must be payment to PIATCO of just
compensation in accordance with law and equity. Any ruling in the present expropriation case
must be conformable to the dictates of the Court as pronounced in the Agan cases.
(2) Rep. Act No. 8974 applies in this case, particularly insofar as it requires the immediate
payment by the Government of at least the proffered value of the NAIA 3 facilities to PIATCO
and provides certain valuation standards or methods for the determination of just compensation.
(3) Applying Rep. Act No. 8974, the implementation of Writ of Possession in favor of the
Government over NAIA 3 is held in abeyance until PIATCO is directly paid the amount of P3
Billion, representing the proffered value of NAIA 3 under Section 4(c) of the law.
(4) Applying Rep. Act No. 8974, the Government is authorized to start the implementation of
the NAIA 3 Airport terminal project by performing the acts that are essential to the operation of
the NAIA 3 as an international airport terminal upon the effectivity of the Writ of Possession,
subject to the conditions above-stated. As prescribed by the Court, such authority encompasses
"the repair, reconditioning and improvement of the complex, maintenance of the existing
facilities and equipment, installation of new facilities and equipment, provision of services and
facilities pertaining to the facilitation of air traffic and transport, and other services that are
integral to a modern-day international airport."
5) The RTC is mandated to complete its determination of the just compensation within sixty
(60) days from finality of this Decision. In doing so, the RTC is obliged to comply with the
standards set under Rep. Act No. 8974 and its Implementing Rules. Considering that the NAIA
3 consists of structures and improvements, the valuation thereof shall be determined using the
replacements cost method, as prescribed under Section 10 of the Implementing Rules.
(6) There was no grave abuse of discretion attending the RTC Order appointing the
commissioners for the purpose of determining just compensation. The provisions on
commissioners under Rule 67 shall apply insofar as they are not inconsistent with Rep. Act No.
8974, its Implementing Rules, or the rulings of the Court in Agan.
(7) The Government shall pay the just compensation fixed in the decision of the trial court to
PIATCO immediately upon the finality of the said decision.
(8) There is no basis for the Court to direct the inhibition of Hon. Gingoyon.
All told, the Court finds no grave abuse of discretion on the part of the RTC to warrant the
nullification of the questioned orders. Nonetheless, portions of these orders should be modified
to conform with law and the pronouncements made by the Court herein. 12
The decretal portion of the Court's Decision in Gingoyon thus reads:
WHEREFORE, the Petition is GRANTED in PART with respect to the orders dated 4 January
2005 and 10 January 2005 of the lower court. Said orders are AFFIRMED with the following
MODIFICATIONS:
1) The implementation of the Writ of Possession dated 21 December 2004 is HELD IN
ABEYANCE, pending payment by petitioners to PIATCO of the amount of Three Billion Two
Million One Hundred Twenty Five Thousand Pesos (P3,002,125,000.00), representing the
proffered value of the NAIA 3 facilities;
2) Petitioners, upon the effectivity of the Writ of Possession, are authorized [to] start the
implementation of the Ninoy Aquino International Airport Pasenger Terminal III project by
performing the acts that are essential to the operation of the said International Airport Passenger
Terminal project;
3) RTC Branch 117 is hereby directed, within sixty (60) days from finality of this Decision, to
determine the just compensation to be paid to PIATCO by the Government.
The Order dated 7 January 2005 is AFFIRMED in all respects subject to the qualification that
the parties are given ten (10) days from finality of this Decision to file, if they so choose,
objections to the appointment of the commissioners decreed therein.
The Temporary Restraining Order dated 14 January 2005 is hereby LIFTED.
No pronouncement as to costs.13
Motions for Partial Reconsideration of the foregoing Decision were filed by therein petitioners Republic
and MIAA, as well as the three other parties who sought to intervene, namely, Asakihosan Corporation,
Takenaka Corporation, and Congressman Baterina.
In a Resolution dated 1 February 2006, this Court denied with finality the Motion for Partial
Reconsideration of therein petitioners and remained faithful to its assailed Decision based on the following
ratiocination:
 Admittedly, the 2004 Resolution in Agan could be construed as mandating the full payment of Asia's Emerging Dragon Corporation v. Department of Transportation and Communications and
the final amount of just compensation before the Government may be permitted to take over the Manila International Airport Authority (G.R. No. 169914)
NAIA 3. However, the Decision ultimately rejected such a construction, acknowledging the
public good that would result from the immediate operation of the NAIA 3. Instead, the
Banking on this Court's declaration in Agan that the award of the NAIA IPT III Project to PIATCO is null
Decision adopted an interpretation which is in consonance with Rep. Act No. 8974 and with
and void, Asia's Emerging Dragon Corporation (AEDC) filed before this Court the present Petition
equitable standards as well, that allowed the Government to take possession of the NAIA 3 after
for Mandamus and Prohibition (with Application for Temporary Restraining Order), praying of this Court
payment of the proffered value of the facilities to PIATCO. Such a reading is substantially
that:
compliant with the pronouncement in the 2004 Agan Resolution, and is in accord with law and
equity. In contrast, the Government's position, hewing to the strict application of Rule 67,
would permit the Government to acquire possession over the NAIA 3 and implement its (1) After due hearing, judgment be rendered commanding the Respondents, their officers,
operation without having to pay PIATCO a single centavo, a situation that is obviously unfair. agents, successors, representatives or persons or entities acting on their behalf, to formally
Whatever animosity the Government may have towards PIATCO does not acquit it from award the NAIA-APT [sic]III PROJECT to Petitioner AEDC and to execute and formalize with
settling its obligations to the latter, particularly those which had already been previously Petitioner AEDC the approved Draft Concession Agreement embodying the agreed terms and
affirmed by this Court.14 conditions for the operation of the NAIA-IPT III Project and directing Respondents to cease
and desist from awarding the NAIA-IPT Project to third parties or negotiating into any
concession contract with third parties.
The Court, in the same Resolution, denied all the three motions for intervention of Asakihosan
Corporation, Takenaka Corporation, and Congressman Baterina, and ruled as follows:
(2) Pending resolution on the merits, a Temporary Restraining Order be issued enjoining
Respondents, their officers, agents, successors or representatives or persons or entities acting on
We now turn to the three (3) motions for intervention all of which were filed after the
their behalf from negotiating, re-bidding, awarding or otherwise entering into any concession
promulgation of the Court's Decision. All three (3) motions must be denied. Under Section 2,
contract with PIATCO and other third parties for the operation of the NAIA-IPT III Project.
Rule 19 of the 1997 Rules of Civil Procedure the motion to intervene may be filed at any time
before rendition of judgment by the court. Since this case originated from an original action
filed before this Court, the appropriate time to file the motions-in-intervention in this case if Other relief and remedies, just and equitable under the premises, are likewise prayed for.16
ever was before and not after resolution of this case. To allow intervention at this juncture
would be highly irregular. It is extremely improbable that the movants were unaware of the
AEDC bases its Petition on the following grounds:
pendency of the present case before the Court, and indeed none of them allege such lack of
knowledge.
I. PETITIONER AEDC, BEING THE RECOGNIZED AND UNCHALLENGED ORIGINAL
PROPONENT, HAS THE EXCLUSIVE, CLEAR AND VESTED STATUTORY RIGHT TO
Takenaka and Asahikosan rely on Mago v. Court of Appeals wherein the Court took the
extraordinary step of allowing the motion for intervention even after the challenged order of the THE AWARD OF THE NAIA-IPT III PROJECT;
trial court had already become final. Yet it was apparent in Mago that the movants therein were
not impleaded despite being indispensable parties, and had not even known of the existence of II. RESPONDENTS HAVE A STATUTORY DUTY TO PROTECT PETITIONER AEDC AS
the case before the trial court, and the effect of the final order was to deprive the movants of THE UNCHALLENGED ORIGINAL PROPONENT AS A RESULT OF THE SUPREME
their land. In this case, neither Takenaka nor Asahikosan stand to be dispossessed by reason of COURT'S NULLIFICATION OF THE AWARD OF THE NAIA-IPT III PROJECT TO
the Court's Decision. There is no palpable due process violation that would militate the PIATCO[; and]
suspension of the procedural rule.
III. RESPONDENTS HAVE NO LEGAL BASIS OR AUTHORITY TO TAKE OVER THE
Moreover, the requisite legal interest required of a party-in-intervention has not been NAIA-IPT III PROJECT, TO THE EXCLUSION OF PETITIONER AEDC, OR TO AWARD
established so as to warrant the extra-ordinary step of allowing intervention at this late stage. As THE PROJECT TO THIRD PARTIES.17
earlier noted, the claims of Takenaka and Asahikosan have not been judicially proved or
conclusively established as fact by any trier of facts in this jurisdiction. Certainly, they could
not be considered as indispensable parties to the petition for certiorari. In the case of At the crux of the Petition of AEDC is its claim that, being the recognized and unchallenged original
Representative Baterina, he invokes his prerogative as legislator to curtail the disbursement proponent of the NAIA IPT III Project, it has the exclusive, clear, and vested statutory right to the award
without appropriation of public funds to compensate PIATCO, as well as that as a taxpayer, as thereof. However, the Petition of AEDC should be dismissed for lack of merit, being as it is, substantially
the basis of his legal standing to intervene. However, it should be noted that the amount which and procedurally flawed.
the Court directed to be paid by the Government to PIATCO was derived from the money
deposited by the Manila International Airport Authority, an agency which enjoys corporate SUBSTANTIVE INFIRMITY
autonomy and possesses a legal personality separate and distinct from those of the National
Government and agencies thereof whose budgets have to be approved by Congress.
A petition for mandamus is governed by Section 3 of Rule 65 of the Rules of Civil Procedure, which reads
–
It is also observed that the interests of the movants-in-intervention may be duly litigated in
proceedings which are extant before lower courts. There is no compelling reason to disregard
the established rules and permit the interventions belatedly filed after the promulgation of the SEC. 3. Petition for mandamus. – When any tribunal, corporation, board, officer or person
Court's Decision.15 unlawfully neglects the performance of an act which the law specifically enjoins as a duty
 resulting from an office, trust, or station, or unlawfully excludes another from the use and
enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy
and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a
verified petition in the proper court, alleging the facts with certainty and praying that judgment
be rendered commanding the respondent, immediately or some other time to be specified by the
court, to do the act required to be done to protect the rights of the petitioner, and to pay the
damages sustained by the petitioner by reason of the wrongful acts of the respondent.
It is well-established in our jurisprudence that only specific legal rights are enforceable by mandamus, that
the right sought to be enforced must be certain and clear, and that the writ will not issue in cases where the
right is doubtful. Just as fundamental is the principle governing the issuance of mandamus that the duties to
be performed must be such as are clearly and peremptorily enjoined by law or by reason of official
station.18
A rule long familiar is that mandamus never issues in doubtful cases. It requires a showing of a complete
and clear legal right in the petitioner to the performance of ministerial acts. In varying language, the
principle echoed and reechoed is that legal rights may be enforced by mandamus only if those rights are
well-defined, clear and certain. Otherwise, the mandamus petition must be dismissed.19
The right that AEDC is seeking to enforce is supposedly enjoined by Section 4-A of Republic Act No.
6957,20 as amended by Republic Act No. 7718, on unsolicited proposals, which provides –
SEC. 4-A. Unsolicited proposals. – Unsolicited proposals for projects may be accepted by any
government agency or local government unit on a negotiated basis: Provided, That, all the
following conditions are met: (1) such projects involve a new concept or technology and/or are
not part of the list of priority projects, (2) no direct government guarantee, subsidy or equity is
required, and (3) the government agency or local government unit has invited by publication,
for three (3) consecutive weeks, in a newspaper of general circulation, comparative or
competitive proposals and no other proposal is received for a period of sixty (60) working days:
Provided, further, That in the event another proponent submits a lower price proposal, the
original proponent shall have the right to match the price within thirty (30) working days.
In furtherance of the afore-quoted provision, the Implementing Rules and Regulations (IRR) of Republic
Act No. 6957, as amended by Republic Act No. 7718, devoted the entire Rule 10 to Unsolicited Proposals,
pertinent portions of which are reproduced below –
Sec. 10.1. Requisites for Unsolicited Proposals. – Any Agency/LGU may accept unsolicited
proposals on a negotiated basis provided that all the following conditions are met:
a. the project involves a new concept or technology and/or is not part of the list of priority
projects;
b. no direct government guarantee, subsidy or equity is required; and
c. the Agency/LGU concerned has invited by publication, for three (3) consecutive weeks, in a
newspaper of general circulation, comparative or competitive proposals and no other proposal is
received for a period of sixty (60) working days. In the event that another project proponent
submits a price proposal lower than that submitted by the original proponent, the latter shall
have the right to match said price proposal within thirty (30) working days. Should the original
proponent fail to match the lower price proposal submitted within the specified period, the
contract shall be awarded to the tenderer of the lowest price. On the other hand, if the original
project proponent matches the submitted lowest price within the specified period, he shall be
immediately be awarded the project.
xxxx
Sec. 10.6. Evaluation of Unsolicited Proposals. – The Agency/LGU is tasked with the initial
evaluation of the proposal. The Agency/LGU shall: 1) appraise the merits of the project; 2)
evaluate the qualification of the proponent; and 3) assess the appropriateness of the contractual
arrangement and reasonableness of the risk allocation. The Agency/LGU is given sixty (60)
days to evaluate the proposal from the date of submission of the complete proposal. Within this
60-day period, the Agency/LGU, shall advise the proponent in writing whether it accepts or
rejects the proposal. Acceptance means commitment of the Agency/LGU to pursue the
project and recognition of the proponent as the "original proponent." At this point, the
Agency/LGU will no longer entertain other similar proposals until the solicitation of
comparative proposals. The implementation of the project, however, is still contingent
primarily on the approval of the appropriate approving authorities consistent with Section 2.7 of
these IRR, the agreement between the original proponent and the Agency/LGU of the contract
terms, and the approval of the contract by the [Investment Coordination Committee (ICC)] or
Local Sanggunian.
xxxx
Sec. 10.9. Negotiation With the Original Proponent. – Immediately after ICC/Local
Sanggunian's clearance of the project, the Agency/LGU shall proceed with the in-depth
negotiation of the project scope, implementation arrangements and concession agreement,
all of which will be used in the Terms of Reference for the solicitation of comparative
proposals. The Agency/LGU and the proponent are given ninety (90) days upon receipt of
ICC's approval of the project to conclude negotiations. The Agency/LGU and the original
proponent shall negotiate in good faith. However, should there be unresolvable differences
during the negotiations, the Agency/LGU shall have the option to reject the proposal and
bid out the project. On the other hand, if the negotiation is successfully concluded, the
original proponent shall then be required to reformat and resubmit its proposal in
accordance with the requirements of the Terms of Reference to facilitate comparison with
the comparative proposals. The Agency/LGU shall validate the reformatted proposal if it
meets the requirements of the TOR prior to the issuance of the invitation for comparative
proposals.
xxxx
Sec. 10.11. Invitation for Comparative Proposals. The Agency/LGU shall publish the invitation
for comparative or competitive proposals only after ICC/Local Sanggunian issues a no
objection clearance of the draft contract. The invitation for comparative or competitive
proposals should be published at least once every week for three (3) weeks in at least one (1)
newspaper of general circulation. It shall indicate the time, which should not be earlier than the
last date of publication, and place where tender/bidding documents could be obtained. It shall
likewise explicitly specify a time of sixty (60) working days reckoned from the date of issuance
of the tender/bidding documents upon which proposals shall be received. Beyond said deadline,
no proposals shall be accepted. A pre-bid conference shall be conducted ten (10) working days
after the issuance of the tender/bidding documents.
Sec. 10.12. Posting of Bid Bond by Original Proponent. – The original proponent shall be
required at the date of the first date of the publication of the invitation for comparative
 proposals to submit a bid bond equal to the amount and in the form required of the
challengers.
Sec. 10.13. Simultaneous Qualification of the Original Proponent. – The Agency/LGU shall
qualify the original proponent based on the provisions of Rule 5 hereof, within thirty (30) days
from start of negotiation. For consistency, the evaluation criteria used for qualifying the original
proponent should be the same criteria used for qualifying the original proponent should be the
criteria used in the Terms of Reference for the challengers.
xxxx
Sec. 10.16. Disclosure of the Price Proposal. – The disclosure of the price proposal of the
original proponent in the Tender Documents will be left to the discretion of the Agency/LGU.
However, if it was not disclosed in the Tender Documents, the original proponent's price
proposal should be revealed upon the opening of the financial proposals of the challengers. The
right of the original proponent to match the best proposal within thirty (30) working days
starts upon official notification by the Agency/LGU of the most advantageous financial
proposal. (Emphasis ours.)
In her sponsorship speech on Senate Bill No. 1586 (the precursor of Republic Act No. 7718), then Senator
(now President of the Republic of the Philippines) Gloria Macapagal-Arroyo explained the reason behind
the proposed amendment that would later become Section 4-A of Republic Act No. 6957, as amended by
Republic Act No. 7718:
The object of the amendment is to protect proponents which have already incurred costs in the
conceptual design and in the preparation of the proposal, and which may have adopted an
imaginative method of construction or innovative concept for the proposal. The amendment
also aims to harness the ingenuity of the private sector to come up with solutions to the
country's infrastructure problems.21
It is irrefragable that Section 4-A of Republic Act No. 6957, as amended by Republic Act No. 7718, and
Section 10 of its IRR, accord certain rights or privileges to the original proponent of an unsolicited
proposal for an infrastructure project. They are meant to encourage private sector initiative in
conceptualizing infrastructure projects that would benefit the public. Nevertheless, none of these rights or
privileges would justify the automatic award of the NAIA IPT III Project to AEDC after its previous award
to PIATCO was declared null and void by this Court in Agan.
The rights or privileges of an original proponent of an unsolicited proposal for an infrastructure project are
never meant to be absolute. Otherwise, the original proponent can hold the Government hostage and secure
the award of the infrastructure project based solely on the fact that it was the first to submit a proposal. The
absurdity of such a situation becomes even more apparent when considering that the proposal is unsolicited
by the Government. The rights or privileges of an original proponent depends on compliance with the
procedure and conditions explicitly provided by the statutes and their IRR.
An unsolicited proposal is subject to evaluation, after which, the government agency or local government
unit (LGU) concerned may accept or reject the proposal outright.
Under Section 10.6 of the IRR, the "acceptance" of the unsolicited proposal by the agency/LGU is limited
to the "commitment of the [a]gency/LGU to pursue the project and recognition of the proponent as the
'original proponent.'" Upon acceptance then of the unsolicited proposal, the original proponent
is recognized as such but no award is yet made to it. The commitment of the agency/LGU upon
acceptance of the unsolicited proposal is to the pursuit of the project, regardless of to whom it shall
subsequently award the same. The acceptance of the unsolicited proposal only precludes the agency/LGU
from entertaining other similar proposals until the solicitation of comparative proposals.
Consistent in both the statutes and the IRR is the requirement that invitations be published for comparative
or competitive proposals. Therefore, it is mandatory that a public bidding be held before the awarding of
the project. The negotiations between the agency/LGU and the original proponent, as provided in Section
10.9 of the IRR, is for the sole purpose of coming up with draft agreements, which shall be used in the
Terms of Reference (TOR) for the solicitation of comparative proposals. Even at this point, there is no
definite commitment made to the original proponent as to the awarding of the project. In fact, the same
IRR provision even gives the concerned agency/LGU, in case of unresolvable differences during the
negotiations, the option to reject the original proponent's proposal and just bid out the project.
Generally, in the course of processing an unsolicited proposal, the original proponent is treated in much the
same way as all other prospective bidders for the proposed infrastructure project. It is required to reformat
and resubmit its proposal in accordance with the requirements of the TOR. 22 It must submit a bid bond
equal to the amount and in the form required of the challengers. 23 Its qualification shall be evaluated by the
concerned agency/LGU, using evaluation criteria in accordance with Rule 524 of the IRR, and which shall
be the same criteria to be used in the TOR for the challengers.25 These requirements ensure that the public
bidding under Rule 10 of IRR on Unsolicited Proposals still remain in accord with the three principles in
public bidding, which are: the offer to the public, an opportunity for competition, and a basis for exact
comparison of bids.26
The special rights or privileges of an original proponent thus come into play only when there are other
proposals submitted during the public bidding of the infrastructure project. As can be gleaned from the
plain language of the statutes and the IRR, the original proponent has: (1) the right to match the lowest or
most advantageous proposal within 30 working days from notice thereof, and (2) in the event that the
original proponent is able to match the lowest or most advantageous proposal submitted, then it has the
right to be awarded the project. The second right or privilege is contingent upon the actual exercise by the
original proponent of the first right or privilege. Before the project could be awarded to the original
proponent, he must have been able to match the lowest or most advantageous proposal within the
prescribed period. Hence, when the original proponent is able to timely match the lowest or most
advantageous proposal, with all things being equal, it shall enjoy preference in the awarding of the
infrastructure project.
This is the extent of the protection that Legislature intended to afford the original proponent, as supported
by the exchange between Senators Neptali Gonzales and Sergio Osmeña during the Second Reading of
Senate Bill No. 1586:
Senator Gonzales:
xxxx
The concept being that in case of an unsolicited proposal and nonetheless public bidding has
been held, then [the original proponent] shall, in effect, be granted what is the equivalent of
the right of first refusal by offering a bid which shall equal or better the bid of the
winning bidder within a period of, let us say, 30 days from the date of bidding.
Senator Osmeña:
xxxx
 To capture the tenor of the proposal of the distinguished Gentleman, a subsequent paragraph
has to be added which says, "IF THERE IS A COMPETITIVE PROPOSAL, THE
ORIGINAL PROPONENT SHALL HAVE THE RIGHT TO EQUAL THE TERMS AND
CONDITIONS OF THE COMPETITIVE PROPOSAL."
In other words, if there is nobody who will submit a competitive proposal, then nothing is lost.
Everybody knows it, and it is open and transparent. But if somebody comes in with another
proposal – and because it was the idea of the original proponent – that proponent now has the
right to equal the terms of the original proposal.
SENATOR GONZALES:
That is the idea, Mr. President. Because it seems to me that it is utterly unfair for one who has
conceived an idea or a concept, spent and invested in feasibility studies, in the drawing of plans
and specifications, and the project is submitted to a public bidding, then somebody will win on
the basis of plans and specifications and concepts conceived by the original proponent. He
should at least be given the right to submit an equalizing bid. x x x.27 (Emphasis ours.)
As already found by this Court in the narration of facts in Agan, AEDC failed to match the more
advantageous proposal submitted by PIATCO by the time the 30-day working period expired on 28
November 1996;28 and, without exercising its right to match the most advantageous proposal, it cannot
now lay claim to the award of the project.
The bidding process as to the NAIA IPT III Project was already over after the award thereof to PIATCO,
even if eventually, the said award was nullified and voided. The nullification of the award to PIATCO did
not revive the proposal nor re-open the bidding. AEDC cannot insist that this Court turn back the hands of
time and award the NAIA IPT III Project to it, as if the bid of PIATCO never existed and the award of the
project to PIATCO did not take place. Such is a simplistic approach to a very complex problem that is the
NAIA IPT III Project.
In his separate opinion in Agan, former Chief Justice Artemio V. Panganiban noted that "[T]here was
effectively no public bidding to speak of, the entire bidding process having been flawed and tainted from
the very outset, therefore, the award of the concession to Paircargo's successor Piatco was void, and the
Concession Agreement executed with the latter was likewise void ab initio. x x x.29" (Emphasis ours.) In
consideration of such a declaration that the entire bidding process was flawed and tainted from the very
beginning, then, it would be senseless to re-open the same to determine to whom the project should have
been properly awarded to. The process and all proposals and bids submitted in participation thereof, and
not just PIATCO's, were placed in doubt, and it would be foolhardy for the Government to rely on them
again. At the very least, it may be declared that there was a failure of public bidding. 30
In addition, PIATCO is already close to finishing the building of the structures comprising NAIA IPT
III,31 a fact that this Court cannot simply ignore. The NAIA IPT III Project was proposed, subjected to
bidding, and awarded as a build-operate-transfer (BOT) project. A BOT project is defined as –
A contractual arrangement whereby the project proponent undertakes the construction,
including financing, of a given infrastructure facility, and the operation and
maintenance thereof. The project proponent operates the facility over a fixed term during
which it is allowed to charge facility users appropriate tolls, fees, rentals, and charges not
exceeding those proposed in its bid or as negotiated and incorporated in the contract to enable
the project proponent to recover its investment, and operating and maintenance expenses in the
project. The project proponent transfers the facility to the government agency or local
government unit concerned at the end of the fixed term that shall not exceed fifty (50) years.
This shall include a supply-and-operate situation which is a contractual arrangement whereby
the supplier of equipment and machinery for a given infrastructure facility, if the interest of the
Government so requires, operates the facility providing in the process technology transfer and
training to Filipino nationals.32 (Emphasis ours.)
The original proposal of AEDC is for a BOT project, in which it undertook to build, operate,
and transfer to the Government the NAIA IPT III facilities. This is clearly no longer applicable or
practicable under the existing circumstances. It is undeniable that the physical structures comprising the
NAIA IPT III Project are already substantially built, and there is almost nothing left for AEDC to
construct. Hence, the project could no longer be awarded to AEDC based on the theory of legal
impossibility of performance.
Neither can this Court revert to the original proposal of AEDC and award to it only the unexecuted
components of the NAIA IPT III Project. Whoever shall assume the obligation to operate and maintain
NAIA IPT III and to subsequently transfer the same to the Government (in case the operation is not
assumed by the Government itself) shall have to do so on terms and conditions that would necessarily be
different from the original proposal of AEDC. It will no longer include any undertaking to build or
construct the structures. An amendment of the proposal of AEDC to address the present circumstances is
out of the question since such an amendment would be substantive and tantamount to an entirely new
proposal, which must again be subjected to competitive bidding.
AEDC's offer to reimburse the Government the amount it shall pay to PIATCO for the NAIA IPT III
Project facilities, as shall be determined in the ongoing expropriation proceedings before the RTC of Pasay
City, cannot restore AEDC to its status and rights as the project proponent. It must be stressed that the law
requires the project proponent to undertake the construction of the project, including financing; financing,
thus, is but a component of the construction of the structures and not the entirety thereof.
Moreover, this "reimbursement arrangement" may even result in the unjust enrichment of AEDC. In its
original proposal, AEDC offered to construct the NAIA IPT III facilities for $350 million or P9 billion at
that time. In exchange, AEDC would share a certain percentage of the gross revenues with, and pay a
guaranteed annual income to the Government upon operation of the NAIA IPT III. In Gingoyon, the
proferred value of the NAIA IPT III facilities was already determined to be P3 billion. It seems improbable
at this point that the balance of the value of said facilities for which the Government is still obligated to
pay PIATCO shall reach or exceed P6 billion. There is thus the possibility that the Government shall be
required to pay PIATCO an amount less than P9 billion. If AEDC is to reimburse the Government only for
the said amount, then it shall acquire the NAIA IPT III facilities for a price less than its original proposal
of P9 billion. Yet, per the other terms of its original proposal, it may still recoup a capital investment of P9
billion plus a reasonable rate of return of investment. A change in the agreed value of the NAIA IPT III
facilities already built cannot be done without a corresponding amendment in the other terms of the
original proposal as regards profit sharing and length of operation; otherwise, AEDC will be unjustly
enriched at the expense of the Government.
Again, as aptly stated by former Chief Justice Panganiban, in his separate opinion in Agan:
If the PIATCO contracts are junked altogether as I think they should be, should not AEDC
automatically be considered the winning bidder and therefore allowed to operate the facility?
My answer is a stone-cold 'No.' AEDC never won the bidding, never signed any contract, and
never built any facility. Why should it be allowed to automatically step in and benefit from the
greed of another?33
The claim of AEDC to the award of the NAIA IPT III Project, after the award thereof to PIATCO was set
aside for being null and void, grounded solely on its being the original proponent of the project, is specious
and an apparent stretch in the interpretation of Section 4-A of Republic Act No. 6957, as amended by
Republic Act No. 7718, and Rule 10 of the IRR.
In all, just as AEDC has no legal right to the NAIA IPT III Project, corollarily, it has no legal right over the
NAIA IPT III facility. AEDC does not own the NAIA IPT III facility, which this Court already recognized
in Gingoyon as owned by PIATCO; nor does AEDC own the land on which NAIA IPT III stands, which is
undisputedly owned by the Republic through the Bases Conversion Development Authority (BCDA).
AEDC did not fund any portion of the construction of NAIA IPT III, which was entirely funded by
PIATCO. AEDC also does not have any kind of lien over NAIA IPT III or any kind of legal entitlement to
occupy the facility or the land on which it stands. Therefore, nothing that the Government has done or will
do in relation to the project could possibly prejudice or injure AEDC. AEDC then does not possess any
legal personality to interfere with or restrain the activities of the Government as regards NAIA IPT III.
Neither does it have the legal personality to demand that the Government deliver or sell to it the NAIA IPT
III facility despite the express willingness of AEDC to reimburse the Government the proferred amount it
had paid PIATCO and complete NAIA IPT III facility at its own cost.
AEDC invokes the Memorandum of Agreement, purportedly executed between the DOTC and AEDC on
26 February 1996, following the approval of the NAIA IPT III Project by the National Economic
Development Authority Board in a Resolution dated 13 February 1996, which provided for the following
commitments by the parties:
a. commitment of Respondent DOTC to target mid 1996 as the time frame for the formal award
of the project and commencement of site preparation and construction activities with the view
of a partial opening of the Terminal by the first quarter of 1998;
b. commitment of Respondent DOTC to pursue the project envisioned in the unsolicited
proposal and commence and conclude as soon as possible negotiations with Petitioner AEDC
on the BOT contract;
c. commitment of Respondent DOTC to make appropriate arrangements through which the
formal award of the project can be affected[;]
d. commitment of Petitioner AEDC to a fast track approach to project implementation and to
commence negotiations with its financial partners, investors and creditors;
e. commitment of Respondent DOTC and Petitioner AEDC to fast track evaluation of
competitive proposals, screening and eliminating nuisance comparative bids; 34
It is important to note, however, that the document attached as Annex "E" to the Petition of AEDC is a
"certified photocopy of records on file." This Court cannot give much weight to said document considering
that its existence and due execution have not been established. It is not notarized, so it does not enjoy the
presumption of regularity of a public document. It is not even witnessed by anyone. It is not certified true
by its supposed signatories, Secretary Jesus B. Garcia, Jr. for DOTC and Chairman Henry Sy, Sr. for
AEDC, or by any government agency having its custody. It is certified as a photocopy of records on file by
an Atty. Cecilia L. Pesayco, the Corporate Secretary, of an unidentified corporation.
Even assuming for the sake of argument, that the said Memorandum of Agreement, is in existence and duly
executed, it does little to support the claim of AEDC to the award of the NAIA IPT III Project. The
commitments undertaken by the DOTC and AEDC in the Memorandum of Agreement may be simply
summarized as a commitment to comply with the procedure and requirements provided in Rules 10 and 11
of the IRR. It bears no commitment on the part of the DOTC to award the NAIA IPT III Project to AEDC.
On the contrary, the document includes express stipulations that negate any such government obligation.
Thus, in the first clause,35 the DOTC affirmed its commitment to pursue, implement and complete the
NAIA IPT III Project on or before 1998, noticeably without mentioning that such commitment was to
pursue the project specifically with AEDC. Likewise, in the second clause, 36 it was emphasized that the
DOTC shall pursue the project under Rules 10 and 11 of the IRR of Republic Act No. 6957, as amended
by Republic Act No. 7718. And most significantly, the tenth clause of the same document provided:
10. Nothing in this Memorandum of Understanding shall be understood, interpreted or
construed as permitting, allowing or authorizing the circumvention of, or non-compliance with,
or as waiving, the provisions of, and requirements and procedures under, existing laws, rules
and regulations.37
AEDC further decries that:
24. In carrying out its commitments under the DOTC-AEDC MOU, Petitioner AEDC
undertook the following activities, incurring in the process tremendous costs and expenses.
a. pre-qualified 46 design and contractor firms to assist in the NAIA-IPT III Project;
b. appointed a consortium of six (6) local banks as its financial advisor in June 1996;
c. hired the services of GAIA South, Inc. to prepare the Project Description Report and to
obtain the Environmental Clearance Certificate (ECC) for the NAIA-IPT III Project;
d. coordinated with the Airline Operators Association, Bases Conversion Development
Authority, Philippine Air Force, Bureau of Customs, Bureau of Immigration, relative to their
particular requirements regarding the NAIA-IPT III [P]roject; and
e. negotiated and entered into firm commitments with Ital Thai, Marubeni Corporation and
Mitsui Corporation as equity partners.38
While the Court may concede that AEDC, as the original proponent, already expended resources in its
preparation and negotiation of its unsolicited proposal, the mere fact thereof does not entitle it to the instant
award of the NAIA IPT III Project. AEDC was aware that the said project would have to undergo public
bidding, and there existed the possibility that another proponent may submit a more advantageous bid
which it cannot match; in which case, the project shall be awarded to the other proponent and AEDC
would then have no means to recover the costs and expenses it already incurred on its unsolicited proposal.
It was a given business risk that AEDC knowingly undertook.
Additionally, the very defect upon which this Court nullified the award of the NAIA IPT III Project to
PIATCO similarly taints the unsolicited proposal of AEDC. This Court found Paircargo Consortium
financially disqualified after striking down as incorrect the PBAC's assessment of the consortium's
financial capability. According to the Court's ratio in Agan:
As the minimum project cost was estimated to be US$350,000,000.00 or
roughly P9,183,650,000.00, the Paircargo Consortium had to show to the satisfaction of the
PBAC that it had the ability to provide the minimum equity for the project in the amount of at
least P2,755,095,000.00.
xxxx
Thus, the maximum amount that Security Bank could validly invest in the Paircargo
Consortium is only P528,525,656.55, representing 15% of its entire net worth. The total net
worth therefore of the Paircargo Consortium, after considering the maximum amounts that
 may be validly invested by each of its members is P558,384,871.55 or only 6.08% of the
project cost, an amount substantially less than the prescribed minimum equity investment
required for the project in the amount of P2,755,095,000.00 or 30% of the project cost.
The purpose of pre-qualification in any public bidding is to determine, at the earliest
opportunity, the ability of the bidder to undertake the project. Thus, with respect to the bidder's
financial capacity at the pre-qualification stage, the law requires the government agency to
examine and determine the ability of the bidder to fund the entire cost of the project by
considering the maximum amounts that each bidder may invest in the project at the time
of pre-qualification.
xxxx
AEDC revived its hope to acquire the NAIA IPT III Project when this Court promulgated its Decision
in Agan on 5 May 2003. The said Decision became final and executory on 17 February 2004 upon the
denial by this Court of the Motion for Leave to File Second Motion for Reconsideration submitted by
PIATCO. It is this Decision that declared the award of the NAIA IPT III Project to PIATCO as null and
void; without the same, then the award of the NAIA IPT III Project to PIATCO would still subsist and
other persons would remain precluded from acquiring rights thereto, including AEDC. Irrefutably, the
present claim of AEDC is rooted in the Decision of this Court in Agan. However, AEDC filed the Petition
at bar only 20 months after the promulgation of the Decision in Agan on 5 May 2003.
It must be emphasized that under Sections 2 and 3, Rule 65 of the revised Rules of Civil Procedure,
petitions for prohibition and mandamus, such as in the instant case, can only be resorted to when there is
no other plain, speedy and adequate remedy for the party in the ordinary course of law.

In Cruz v. Court of Appeals,41 this Court elucidates that –

Thus, if the maximum amount of equity that a bidder may invest in the project at the time the
bids are submitted falls short of the minimum amounts required to be put up by the bidder,
said bidder should be properly disqualified. Considering that at the pre-qualification stage, the Although Rule 65 does not specify any period for the filing of a petition for certiorari
maximum amounts which the Paircargo Consortium may invest in the project fell short of the and mandamus, it must, nevertheless, be filed within a reasonable time. In certiorari cases, the
minimum amounts prescribed by the PBAC, we hold that Paircargo Consortium was not a definitive rule now is that such reasonable time is within three months from the commission of
qualified bidder. Thus the award of the contract by the PBAC to the Paircargo Consortium, a the complained act. The same rule should apply to mandamus cases.
disqualified bidder, is null and void.39
The unreasonable delay in the filing of the petitioner's mandamus suit unerringly negates any
Pursuant to the above-quoted ruling, AEDC, like the Paircargo Consortium, would not be financially claim that the application for the said extraordinary remedy was the most expeditious and
qualified to undertake the NAIA IPT III Project. Based on AEDC's own submissions to the Government, it speedy available to the petitioner. (Emphasis ours.)
had then a paid-in capital of only P150,000,000.00,40 which was less than the P558,384,871.55 that
Paircargo Consortium was capable of investing in the NAIA IPT III Project, and even far less that what
As the revised Rules now stand, a petition for certiorari may be filed within 60 days from notice of the
this Court prescribed as the minimum equity investment required for the project in the amount
judgment, order or resolution sought to be assailed.42 Reasonable time for filing a petition
of P2,755,095,000.00 or 30% of the project cost. AEDC had not sufficiently demonstrated that it would
for mandamus should likewise be for the same period. The filing by the AEDC of its petition
have been financially qualified to undertake the project at the time of submission of the bids.
for mandamus 20 months after its supposed right to the project arose is evidently beyond reasonable time
and negates any claim that the said petition for the extraordinary writ was the most expeditious and speedy
Instead, AEDC took pains to present to this Court that allowing it to take over and operate NAIA IPT III at remedy available to AEDC.
present would be beneficial to the Government. This Court must point out, however, that AEDC is
precisely making a new proposal befitting the current status of the NAIA IPT III Project, contrary to its
AEDC contends that the "reasonable time" within which it should have filed its petition should be
own argument that it is merely invoking its original BOT proposal. And it is not for this Court to evaluate
reckoned only from 21 September 2005, the date when AEDC received the letter from the Office of the
AEDC's new proposal and assess whether it would truly be most beneficial for the Government, for the
Solicitor General refusing to recognize the rights of AEDC to provide the available funds for the
same is an executive function rather than judicial, for which the statutes and regulations have sufficiently
completion of the NAIA IPT III Project and to reimburse the costs of the structures already built by
provided standards and procedures for evaluation.
PIATCO. It has been unmistakable that even long before said letter – especially when the Government
instituted with the RTC of Pasay City expropriation proceedings for the NAIA IPT III on 21 December
It can even be said that if the award of the NAIA IPT III Project was merely a matter of choosing between 2004 – that the Government would not recognize any right that AEDC purportedly had over the NAIA IPT
PIATCO and AEDC (which it is not), there could be no doubt that PIATCO is more qualified to operate III Project and that the Government is intent on taking over and operating the NAIA IPT III itself.
the structure that PIATCO itself built and PIATCO's offer of P17.75 Billion in annual guaranteed
payments to the Government is far better that AEDC's offer of P135 Million.
Another strong argument against the AEDC's Petition is that it is already barred by res judicata.

Hence, AEDC is not entitled to a writ of mandamus, there being no specific, certain, and clear legal right to
In Agan,43 it was noted that on 16 April 1997, the AEDC instituted before the RTC of Pasig City Civil
be enforced, nor duty to be performed that is clearly and peremptorily enjoined by law or by reason of
Case No. 66213, a Petition for the Declaration of Nullity of the Proceedings, Mandamus and Injunction,
official station.
against the DOTC Secretary and the PBAC Chairman and members.

PROCEDURAL LAPSES
In Civil Case No. 66213, AEDC prayed for:

In addition to the substantive weaknesses of the Petition of AEDC, the said Petition also suffers from
i) the nullification of the proceedings before the DOTC-PBAC, including its decision to qualify
procedural defects.
Paircargo Consortium and to deny Petitioner AEDC's access to Paircargo Consortium's
technical and financial bid documents;
 ii) the protection of Petitioner AEDC's right to match considering the void challenge bid of the
Paircargo Consortium and the denial by DOTC-PBAC of access to information vital to the
effective exercise of its right to match;
iii) the declaration of the absence of any other qualified proponent submitting a competitive bid
in an unsolicited proposal.44
Despite the pendency of Civil Case No. 66213, the DOTC issued the notice of award for the NAIA IPT III
Project to PIATCO on 9 July 1997. The DOTC and PIATCO also executed on 12 July 1997 the 1997
Concession Agreement. AEDC then alleges that:
k) On September 3, 1998, then Pres. Joseph Ejercito Estrada convened a meeting with the
members of the Board of Petitioner AEDC to convey his "desire" for the dismissal of the
mandamus case filed by Petition AEDC and in fact urged AEDC to immediately withdraw said
case.
l) The President's direct intervention in the disposition of this mandamus case was a clear
imposition that Petitioner AEDC had not choice but to accept. To do otherwise was to take a
confrontational stance against the most powerful man in the country then under the risk of
catching his ire, which could have led to untold consequences upon the business interests of the
stakeholders in AEDC. Thus, Petitioner AEDC was constrained to agree to the signing of a
Joint Motion to Dismiss and to the filing of the same in court.
m) Unbeknownst to AEDC at that time was that simultaneous with the signing of the July 12,
1997 Concession Agreement, the DOTC and PIATCO executed a secret side agreement grossly
prejudicial and detrimental to the interest of Government. It stipulated that in the event that the
Civil Case filed by AEDC on April 16, 1997 is not resolved in a manner favorable to the
Government, PIATCO shall be entitled to full reimbursement for all costs and expenses it
incurred in order to obtain the NAIA IPT III BOT project in an amount not less than One
Hundred Eighty Million Pesos (Php 180,000,000.00). This was apparently the reason why the
President was determined to have AEDC's case dismissed immediately.
n) On February 9, 1999, after the Amended and Restated Concession Agreement (hereinafter
referred to as "ARCA") was signed without Petitioner AEDC's knowledge, Petitioner AEDC
signed a Joint Motion to Dismiss upon the representation of the DOTC that it would provide
AEDC with a copy of the 1997 Concession Agreement. x x x. 45
On 30 April 1999, the RTC of Pasig City issued an Order dismissing with prejudice Civil Case No. 66213
upon the execution by the parties of a Joint Motion to Dismiss. According to the Joint Motion to Dismiss –
The parties, assisted by their respective counsel, respectfully state:
1. Philippine International Air Terminals Company, Inc. ("PIATCO") and the respondents have
submitted to petitioner, through the Office of the Executive Secretary, Malacañang, a copy of
the Concession Agreement which they executed for the construction and operation of the Ninoy
Aquino International Airport International Passenger Terminal III Project ("NAIA IPT III
Project), which petitioner requested.
2. Consequently, the parties have decided to amicably settle the instant case and jointly move
for the dismissal thereof without any of the parties admitting liability or conceding to the
position taken by the other in the instant case.
3. Petitioner, on the other hand, and the respondents, on the other hand, hereby release and
forever discharge each other from any and all liabilities, direct or indirect, whether criminal
or civil, which arose in connection with the instant case.
4. The parties agree to bear the costs, attorney's fees and other expenses they respectively
incurred in connection with the instant case. (Emphasis ours.)
AEDC, however, invokes the purported pressure exerted upon it by then President Joseph E. Estrada, the
alleged fraud committed by the DOTC, and paragraph 2 in the afore-quoted Joint Motion to Dismiss to
justify the non-application of the doctrine of res judicata to its present Petition.
The elements of res judicata, in its concept as a bar by former judgment, are as follows: (1) the former
judgment or order must be final; (2) it must be a judgment or order on the merits, that is, it was rendered
after a consideration of the evidence or stipulations submitted by the parties at the trial of the case; (3) it
must have been rendered by a court having jurisdiction over the subject matter and the parties; and (4)
there must be, between the first and second actions, identity of parties, of subject matter and of cause of
action.46 All of the elements are present herein so as to bar the present Petition.
First, the Order of the RTC of Pasig City, dismissing Civil Case No. 66213, was issued on 30 April 1999.
The Joint Motion to Dismiss, deemed a compromise agreement, once approved by the court is immediately
executory and not appealable.47
Second, the Order of the RTC of Pasig City dismissing Civil Case No. 66213 pursuant to the Joint Motion
to Dismiss filed by the parties constitutes a judgment on the merits.
The Joint Motion to Dismiss stated that the parties were willing to settle the case amicably and,
consequently, moved for the dismissal thereof. It also contained a provision in which the parties – the
AEDC, on one hand, and the DOTC Secretary and PBAC, on the other – released and forever discharged
each other from any and all liabilities, whether criminal or civil, arising in connection with the case. It is
undisputable that the parties entered into a compromise agreement, defined as "a contract whereby the
parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced. 48"
Essentially, it is a contract perfected by mere consent, the latter being manifested by the meeting of the
offer and the acceptance upon the thing and the cause which are to constitute the contract. Once an
agreement is stamped with judicial approval, it becomes more than a mere contract binding upon the
parties; having the sanction of the court and entered as its determination of the controversy, it has the force
and effect of any other judgment.49 Article 2037 of the Civil Code explicitly provides that a compromise
has upon the parties the effect and authority of res judicata.
Because of the compromise agreement among the parties, there was accordingly a judicial settlement of the
controversy, and the Order, dated 30 April 1999, of the RTC of Pasig City was no less a judgment on the
merits which may be annulled only upon the ground of extrinsic fraud.50 Thus, the RTC of Pasig City, in
the same Order, correctly granted the dismissal of Civil Case No. 66213 with prejudice.
A scrutiny of the Joint Motion to Dismiss submitted to the RTC of Pasig City would reveal that the parties
agreed to discharge one another from any and all liabilities, whether criminal or civil, arising from the
case, after AEDC was furnished with a copy of the 1997 Concession Agreement between the DOTC and
PIATCO. This complete waiver was the reciprocal concession of the parties that puts to an end the present
litigation, without any residual right in the parties to litigate the same in the future. Logically also, there
was no more need for the parties to admit to any liability considering that they already agreed to absolutely
discharge each other therefrom, without necessarily conceding to the other's position. For AEDC, it was a
declaration that even if it was not conceding to the Government's position, it was nonetheless waiving any
legal entitlement it might have to sue the Government on account of the NAIA IPT III Project. Conversely,
for the Government, it was an avowal that even if it was not accepting AEDC's stance, it was all the same
relinquishing its right to file any suit against AEDC in connection with the same project. That none of the
parties admitted liability or conceded its position is without bearing on the validity or binding effect of the
compromise agreement, considering that these were not essential to the said compromise.
Third, there is no question as to the jurisdiction of the RTC of Pasig City over the subject matter and
parties in Civil Case No. 66213. The RTC can exercise original jurisdiction over cases involving the
issuance of writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction.51 To
recall, the Petition of AEDC before the RTC of Pasig City was for the declaration of nullity of
proceedings, mandamus and injunction. The RTC of Pasig City likewise had jurisdiction over the parties,
with the voluntary submission by AEDC and proper service of summons on the DOTC Secretary and the
PBAC Chairman and members.
Lastly, there is, between Civil Case No. 66213 before the RTC of Pasig City and the Petition now pending
before this Court, an identity of parties, of subject matter, and of causes of action.
There is an identity of parties. In both petitions, the AEDC is the petitioner. The respondents in Civil Case
No. 66213 are the DOTC Secretary and the PBAC Chairman and members. The respondents in the instant
Petition are the DOTC, the DOTC Secretary, and the Manila International Airport Authority (MIAA).
While it may be conceded that MIAA was not a respondent and did not participate in Civil Case No.
66213, it may be considered a successor-in-interest of the PBAC. When Civil Case No. 66213 was
initiated, PBAC was then in charge of the NAIA IPT III Project, and had the authority to evaluate the bids
and award the project to the one offering the lowest or most advantageous bid. Since the bidding is already
over, and the structures comprising NAIA IPT III are now built, then MIAA has taken charge thereof.
Furthermore, it is clear that it has been the intention of the AEDC to name as respondents in their two
Petitions the government agency/ies and official/s who, at the moment each Petition was filed, had
authority over the NAIA IPT III Project.
There is an identity of subject matter because the two Petitions involve none other than the award and
implementation of the NAIA IPT III Project.
There is an identity of cause of action because, in both Petitions, AEDC is asserting the violation of its
right to the award of the NAIA IPT III Project as the original proponent in the absence of any other
qualified bidders. As early as in Civil Case No. 66213, AEDC already sought a declaration by the court of
the absence of any other qualified proponent submitting a competitive bid for the NAIA IPT III Project,
which, ultimately, would result in the award of the said project to it.
AEDC attempts to evade the effects of its compromise agreement by alleging that it was compelled to enter
into such an agreement when former President Joseph E. Estrada asserted his influence and intervened in
Civil Case No. 66213. This allegation deserves scant consideration. Without any proof that such events did
take place, such statements remain mere allegations that cannot be given weight. One who alleges any
defect or the lack of a valid consent to a contract must establish the same by full, clear and convincing
evidence, not merely by preponderance thereof.52 And, even assuming arguendo, that the consent of AEDC
to the compromise agreement was indeed vitiated, then President Estrada was removed from office in
January 2001. AEDC filed the present Petition only on 20 October 2005. The four-year prescriptive period,
within which an action to annul a voidable contract may be brought, had already expired. 53
The AEDC further claims that the DOTC committed fraud when, without AEDC's knowledge, the DOTC
entered into an Amended and Restated Concession Agreement (ARCA) with PIATCO. The fraud on the
part of the DOTC purportedly also vitiated AEDC's consent to the compromise agreement. It is true that a
judicial compromise may be set aside if fraud vitiated the consent of a party thereof; and that the extrinsic
fraud, which nullifies a compromise, likewise invalidates the decision approving it. 54 However, once again,
AEDC's allegations of fraud are unsubstantiated. There is no proof that the DOTC and PIATCO willfully
and deliberately suppressed and kept the information on the execution of the ARCA from AEDC. The
burden of proving that there indeed was fraud lies with the party making such allegation. Each party must
prove his own affirmative allegations. The burden of proof lies on the party who would be defeated if no
evidence were given on either side. In this jurisdiction, fraud is never presumed.55
Moreover, a judicial compromise may be rescinded or set aside on the ground of fraud in accordance with
Rule 38 of the Rules on Civil Procedure on petition for relief from judgment. Section 3 thereof prescribes
the periods within which the petition for relief must be filed:
SEC. 3. Time for filing petition; contents and verification.– A petition provided for in either of
the preceding sections of this Rule must be verified, filed within sixty (60) days after the
petitioner learns of the judgment, final order or other proceeding to be set aside, and not more
than six (6) months after such judgment or final order was entered, or such proceeding was
taken, and must be accompanied with affidavits showing the fraud, accident, mistake or
excusable negligence relied upon, and the facts constituting the petitioner's good and substantial
cause of action or defense, as the case may be.
According to this Court's ruling in Argana v. Republic,56 as applied to a judgment based on compromise,
both the 60-day and six-month reglementary periods within which to file a petition for relief should be
reckoned from the date when the decision approving the compromise agreement was rendered because
such judgment is considered immediately executory and entered on the date that it was approved by the
court. In the present case, the Order of the RTC of Pasig City granting the Joint Motion to Dismiss filed by
the parties in Civil Case No. 66213 was issued on 30 April 1999, yet AEDC only spoke of the alleged
fraud which vitiated its consent thereto in its Petition before this Court filed on 20 October 2005, more than
six years later.
It is obvious that the assertion by AEDC of its vitiated consent to the Joint Motion to Dismiss Civil Case
No. 66213 is nothing more than an after-thought and a desperate attempt to escape the legal implications
thereof, including the barring of its present Petition on the ground of res judicata.
It is also irrelevant to the legal position of AEDC that the Government asserted in Agan that the award of
the NAIA IPT III Project to PIATCO was void. That the Government eventually took such a position,
which this Court subsequently upheld, does not affect AEDC's commitments and obligations under its
judicially-approved compromise agreement in Civil Case No. 66213, which AEDC signed willingly,
knowingly, and ably assisted by legal counsel.
In addition, it cannot be said that there has been a fundamental change in the Government's position since
Civil Case No. 66213, contrary to the allegation of AEDC. The Government then espoused that AEDC is
not entitled to the award of the NAIA IPT III Project. The Government still maintains the exact same
position presently. That the Government eventually reversed its position on the validity of its award of the
project to PIATCO is not inconsistent with its position that neither should AEDC be awarded the project.
For the foregoing substantive and procedural reasons, the instant Petition of AEDC should be dismissed.
Republic of the Philippines v. Court of Appeals and Baterina (G.R. No. 174166)
As mentioned in Gingoyon, expropriation proceedings for the NAIA IPT III was instituted by the
Government with the RTC of Pasay City, docketed as Case No. 04-0876CFM. Congressman Baterina,
together with other members of the House of Representatives, sought intervention in Case No. 04-
0876CFM by filing a Petition for Prohibition in Intervention (with Application for Temporary Restraining
Order and Writ of Preliminary Injunction). Baterina, et al. believe that the Government need not file
expropriation proceedings to gain possession of NAIA IPT III and that PIATCO is not entitled to payment
of just compensation, arguing thus –
 A) Respondent PIATCO does not own Terminal III because BOT Contracts do not vest
ownership in PIATCO. As such, neither PIATCO nor FRAPORT are entitled to compensation.
B) Articles 448, ET SEQ., of the New Civil Code, as regards builders in good faith/bad faith, do
not apply to PIATCO's Construction of Terminal III.
C) Article 1412(2) of the New Civil Code allows the Government to demand the return of what
it has given without any obligation to comply with its promise.
D) The payment of compensation to PIATCO is unconstitutional, violative of the Build-
Operate-Transfer Law, and violates the Civil Code and other laws. 57
On 27 October 2005, the RTC of Pasay City issued an Order admitting the Petition in Intervention of
Baterina, et al., as well as the Complaint in Intervention of Manuel L. Fortes, Jr. and the Answer in
Intervention of Gina B. Alnas, et al. The Republic sought reconsideration of the 27 October 2005 Order of
the RTC of Pasay City, which, in an Omnibus Order dated 13 December 2005, was denied by the RTC of
Pasay City as regards the intervention of Baterina, et al. and Fortes, but granted as to the intervention of
Alnas, et al. On 22 March 2006, Baterina, et al. filed with the RTC of Pasay City a Motion to Declare in
Default and/or Motion for Summary Judgment considering that the Republic and PIATCO failed to file an
answer or any responsive pleading to their Petition for Prohibition in Intervention.
In the meantime, on 19 December 2005, the Court's Decision in Gingoyon was promulgated. Baterina also
filed a Motion for Intervention in said case and sought reconsideration of the Decision therein. However,
his Motion for Intervention was denied by this Court in a Resolution dated 1 February 2006.
On 27 March 2006, the RTC of Pasay City issued an Order and Writ of Execution, the dispositive portion
of which reads –
WHEREFORE, let a writ of execution be issued in this case directing the Sheriff of this court to
immediately implement the Order dated January 4, 2005 and January 10, 2005, as affirmed by
the Decision of the Supreme Court in G.R. No. 166429 in the above-entitled case dated
December 19, 2005, in the following manner:
1. Ordering the General Manager, the Senior Assistant General Manager and the Vice President
of Finance of the Manila International Airport Authority (MIAA) to immediately withdraw the
amount of P3,002,125,000.00 from the above-mentioned Certificates of US Dollar Time
Deposits with the Land Bank of the Philippines, Baclaran Branch;
2. Ordering the Branch Manager, Land Bank of the Philippines, Baclaran Branch to
immediately release the sum of P3,002,125,000.00 to PIATCO;
Return of Service of the Writs shall be made by the Sheriff of this court immediately
thereafter;58
The RTC of Pasay City, in an Order, dated 15 June 2006, denied the Motions for Reconsideration of its
Order and Writ of Execution filed by the Government and Fortes. Baterina, meanwhile, went before the
Court of Appeals via a Petition for Certiorari and Prohibition (With Urgent Prayer for the Issuance of a
Temporary Restraining Order and Writ of Preliminary Injunction), docketed as CA-G.R. No. 95539,
assailing the issuance, in grave abuse of discretion, by the RTC of Pasay City of its Orders dated 27 March
2006 and 15 June 2006 and Writ of Execution dated 27 March 2006.
During the pendency of CA-G.R. No. 95539 with the Court of Appeals, the RTC of Pasay City issued an
Order, dated 7 August 2006, denying the Urgent Manifestation and Motion filed by the Republic in which
it relayed willingness to comply with the Order and Writ of Execution dated 27 March 2006, provided that
the trial court shall issue an Order expressly authorizing the Republic to award concessions and lease
portions of the NAIA IPT III to potential users. The following day, on 8 August 2006, the RTC of Pasay
City issued an Order denying the intervention of Baterina, et al. and Fortes in Case No. 04-0876CFM. In a
third Order, dated 9 August 2006, the RTC of Pasay City directed PIATCO to receive the amount
of P3,002,125,000.00 from the Land Bank of the Philippines, Baclaran Branch.
By 24 August 2006, the Republic was all set to comply with the 9 August 2006 Order of the RTC of Pasay
City. Hence, the representatives of the Republic and PIATCO met before the RTC of Pasay City for the
supposed payment by the former to the latter of the proferred amount. However, on the same day, the
Court of Appeals, in CA G.R. No. 95539, issued a Temporary Restraining Order (TRO) enjoining, among
other things, the RTC of Pasay City from implementing the questioned Orders, dated 27 March 2006 and
15 June 2006, or "from otherwise causing payment and from further proceeding with the determination of
just compensation in the expropriation case involved herein, until such time that petitioner's motion to
declare in default and motion for partial summary judgment shall have been resolved by the trial court; or
it is clarified that PIATCO categorically disputes the proferred value for NAIA Terminal 3." The TRO was
to be effective for 30 days. Two days later, on 26 August 2006, the Republic filed with the Court of
Appeals an Urgent Motion to Lift Temporary Restraining Order, which the appellate court scheduled for
hearing on 5 September 2006.
While the Urgent Motion to lift the TRO was still pending with the Court of Appeals, the Republic already
filed the present Petition for Certiorari and Prohibition With Urgent Application for a Temporary
Restraining Order and/or Writ of Preliminary Injunction, attributing to the Court of Appeals grave abuse of
discretion in granting the TRO and seeking a writ of prohibition against the Court of Appeals to enjoin it
from giving due course to Baterina's Petition in CA-G.R. No. 95539. The Republic thus raises before this
Court the following arguments:
I
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO AN EXCESS OR LACK OF JURISDICTION WHEN IT GRANTED THE
TEMPORARY RESTRAINING ORDER.
A. THIS HONORABLE COURT'S DECISION IN GINGOYON CONSTITUTES
THE "LAW OF THE CASE".
B. THE TRO IS IN DIRECT CONTRAVENTION OF THIS COURT'S DECISION
WICH HAD ATTAINED FINALITY.
II
THE REPUBLIC IS SUFFERING IRREPARABLE DAMAGE.
III
THE COURT OF APPEALS MUST BE PROHIBITED FROM GIVING DUE COURSE TO A
PETITION THAT IS DEFECTIVE IN FORM AND SUBSTANCE.
A. PRIVATE RESPONDENT HAS NO LEGAL STANDING.
 1. THIS HONORABLE COURT HAS RULED THAT PRIVATE
RESPONDENT HAS NO LEGAL STANDING.
2. PRIVATE RESPONDENT HAS LOST HIS STANDING AS AN
INTERVENOR.
B. PRIVATE RESPONDENT FAILED TO DEMONSTRATE THAT HE IS
ENTITLED TO THE INJUNCTIVE RELIEFS PRAYED FOR.
C. THE BOND POSTED IS INSUFFICIENT.
IV
GRANTING ARGUENDO THAT PRIVATE RESPONDENT'S PETITION IS SUFFICIENT
IN FORM AND SUBSTANCE, THE SAME HAS BECOME MOOT AND ACADEMIC.
A. THE MOTION TO DECLARE IN DEFAULT AND/OR MOTION FOR
PARTIAL SUMMARY JUDGMENT HAS ALREADY BEEN RESOLVED.
B. PIATCO HAS CATEGORICALLY DISPUTED THE PROFFERED VALUE
FOR NAIA TERMINAL III.59
The Republic prays of this Court that:
(a) Pending the determination of the merits of this petition, a temporary restraining order and/or
a writ of preliminary injunction be ISSUED restraining the Court of Appeals from
implementing the writ of preliminary injunction in CA-G.R. SP No. 95539 and proceeding in
said case such as hearing it on September 5, 2006. After both parties have been heard, the
preliminary injunction be MADE PERMANENT;
(b) The Resolution date 24 August 2006 of the Court of Appeals be SET ASIDE; and
(c) CA-G.R. SP No. 95539 be ORDERED DISMISSED.
Other just and equitable reliefs are likewise prayed for.60
On 4 September 2006, the Republic filed a Manifestation and Motion to Withdraw Urgent Motion to Lift
Temporary Restraining Order with the Court of Appeals stating, among other things, that it had decided to
withdraw the said Motion as it had opted to avail of other options and remedies. Despite the Motion to
Withdraw filed by the Government, the Court of Appeals issued a Resolution, dated 8 September 2006,
lifting the TRO it issued, on the basis of the following –
In view of the pronouncement of the Supreme Court in the Gingoyon case upholding the right
of PIATCO to be paid the proferred value in the amount of P3,002,125,000.00 prior to the
implementation of the writ of possession issued by the trial court on December 21, 2004 over
the NAIA Passenger Terminal III, and directing the determination of just compensation, there is
no practical and logical reason to maintain the effects of the Temporary Restraining Order
contained in our Resolution dated August 24, 2006. Thus, We cannot continue restraining what
has been mandated in a final and executory decision of the Supreme Court.
WHEREFORE, Our Resolution dated 24 August 2006 be SET ASIDE. Consequently, the
Motion to Withdraw the Motion to Lift the Temporary Restraining Order is rendered moot and
academic.61
There being no more legal impediment, the Republic tendered on 11 September 2006 Land Bank check in
the amount of P3,002,125,000.00 representing the proferred value of NAIA IPT III, which was received by
a duly authorized representative of PIATCO.
On 27 December 2006, the Court of Appeals rendered a Decision in CA G.R. No. 95539 dismissing
Baterina's Petition.
The latest developments before the Court of Appeals and the RTC of Pasay City render the present Petition
of the Republic moot.
Nonetheless, Baterina, as the private respondent in the instant Petition, presented his own prayer that a
judgment be rendered as follows:
A. For this Honorable Court, in the exercise of its judicial discretion to relax procedural rules
consistent with Metropolitan Traffic Command v. Gonong and deem that justice would be better
served if all legal issuesinvolved in the expropriation case and in Baterina are resolved in this
case once and for all, to DECLAREthat:
i. TERMINAL 3, as a matter of law, is public property and thus not a proper object
of eminent domain proceedings; and
ii. PIATCO, as a matter of law, is merely the builder of TERMINAL 3 and, as such,
it may file a claim for recovery on quantum meruit with the Commission on Audi[t]
for determination of the amount thereof, if any.
B. To DIRECT the Regional Trial Court of Pasay City, Branch 117 to dismiss the
expropriation case;
C. To DISMISS the instant Petition and DENY The Republic's application for TRO and/or writ
of preliminary injunction for lack of merit;
D. To DECLARE that the P3 Billion (representing the proferred value of TERMINAL 3) paid
to PIATCO on 11 September 2006 as funds held in trust by PIATCO for the benefit of the
Republic and subject to the outcome of the proceedings for the determination of recovery
on quantum meruit due to PIATCO, if any.
E. To DIRECT the Solicitor General to disclose the evidence it has gathered on corruption,
bribery, fraud, bad faith, etc., to this Honorable Court and the Commission on Audit, and
to DECLARE such evidence to be admissible in any proceeding for the determination of any
compensation due to PIATCO, if any.
[F]. In the alternative, to:
i. SET ASIDE the trial court's Order dated 08 August 2006 denying Private
Respondent's motion for intervention in the expropriation case, and
 ii. Should this Honorable Court lend credence to the argument of the Solicitor
General in its Commentdated 20 April 2006 that "there are issues as to material fact
that require presentation of evidence", to REMAND the resolution of the legal
issues raised by Private Respondent to the trial court consistent with this Honorable
Court's holding in the Gingoyon Resolution that "the interests of the movants-in-
intervention [meaning Takenaka, Asahikosan, and herein Private Respondent]
may be duly litigated in proceedings which are extant before the lower courts."62
In essence, Baterina is opposing the expropriation proceedings on the ground that NAIA IPT III is already
public property. Hence, PIATCO is not entitled to just compensation for NAIA IPT III. He is asking the
Court to make a definitive ruling on this matter considering that it was not settled in
either Agan or Gingoyon.
We disagree. Contrary to Baterina's stance, PIATCO's entitlement to just and equitable consideration for its
construction of NAIA IPT III and the propriety of the Republic's resort to expropriation proceedings were
already recognized and upheld by this Court in Agan and Gingoyon.
The Court's Decisions in both Agan and Gingoyon had attained finality, the former on 17 February 2004
and the latter on 17 March 2006.
This Court already made an unequivocal pronouncement in its Resolution dated 21 January 2004
in Agan that for the Government of the Republic to take over the NAIA IPT III facility, it has to
compensate PIATCO as a builder of the structures; and that "[t]he compensation must be just and in
accordance with law and equity for the government cannot unjustly enrich itself at the expense of PIATCO
and its investors."63 As between the Republic and PIATCO, the judgment on the need to compensate
PIATCO before the Government may take over NAIA IPT III is already conclusive and beyond question.
Hence, in Gingoyon, this Court declared that:
This pronouncement contains the fundamental premises which permeate this decision of the
Court. Indeed, Agan, final and executory as it is, stands as governing law in this case, and any
disposition of the present petition must conform to the conditions laid down by the Court in its
2004 Resolution.
xxxx
The pronouncement in the 2004 Resolution is especially significant to this case in two
aspects, namely: (i) that PIATCO must receive payment of just compensation determined
in accordance with law and equity; and (ii) that the government is barred from taking
over NAIA 3 until such just compensation is paid. The parties cannot be allowed to evade the
directives laid down by this Court through any mode of judicial action, such as the complaint
for eminent domain.
It cannot be denied though that the Court in the 2004 Resolution prescribed mandatory
guidelines which the Government must observe before it could acquire the NAIA 3 facilities.
Thus, the actions of respondent judge under review, as well as the arguments of the parties
must, to merit affirmation, pass the threshold test of whether such propositions are in accord
with the 2004 Resolution.64
The Court then, in Gingoyon, directly addressed the issue on the appropriateness of the Republic's resort to
expropriation proceedings:
The Government has chosen to resort to expropriation, a remedy available under the law,
which has the added benefit of an integrated process for the determination of just
compensation and the payment thereof to PIATCO. We appreciate that the case at bar is
a highly unusual case, whereby the Government seeks to expropriate a building complex
constructed on land which the State already owns. There is an inherent illogic in the resort to
eminent domain on property already owned by the State. At first blush, since the State already
owns the property on which NAIA 3 stands, the proper remedy should be akin to an action for
ejectment.
However, the reason for the resort by the Government to expropriation proceedings is
understandable in this case. The 2004 Resolution, in requiring the payment of just
compensation prior to the takeover by the Government of NAIA 3, effectively precluded it from
acquiring possession or ownership of the NAIA 3 through the unilateral exercise of its rights as
the owner of the ground on which the facilities stood. Thus, as things stood after the 2004
Resolution, the right of the Government to take over the NAIA 3 terminal was preconditioned
by lawful order on the payment of just compensation to PIATCO as builder of the structures.
xxxx
The right of eminent domain extends to personal and real property, and the NAIA 3 structures,
adhered as they are to the soil, are considered as real property. The public purpose for the
expropriation is also beyond dispute. It should also be noted that Section 1 of Rule 67 (on
Expropriation) recognizes the possibility that the property sought to be expropriated may
be titled in the name of the Republic of the Philippines, although occupied by private
individuals, and in such case an averment to that effect should be made in the complaint. The
instant expropriation complaint did aver that the NAIA 3 complex "stands on a parcel of land
owned by the Bases Conversion Development Authority, another agency of [the Republic of the
Philippines]."
Admittedly, eminent domain is not the sole judicial recourse by which the Government may
have acquired the NAIA 3 facilities while satisfying the requisites in the 2004
Resolution. Eminent domain though may be the most effective, as well as the speediest
means by which such goals may be accomplished. Not only does it enable immediate
possession after satisfaction of the requisites under the law, it also has a built-in procedure
through which just compensation may be ascertained. Thus, there should be no question as to
the propriety of eminent domain proceedings in this case.
Still, in applying the laws and rules on expropriation in the case at bar, we are impelled to apply
or construe these rules in accordance with the Court's prescriptions in the 2004 Resolution to
achieve the end effect that the Government may validly take over the NAIA 3 facilities. Insofar
as this case is concerned, the 2004 Resolution is effective not only as a legal precedent, but as
the source of rights and prescriptions that must be guaranteed, if not enforced, in the resolution
of this petition. Otherwise, the integrity and efficacy of the rulings of this Court will be severely
diminished.65 (Emphasis ours.)
The Court, also in Gingoyon, categorically recognized PIATCO's ownership over the structures it had built
in NAIA IPT III, to wit:
There can be no doubt that PIATCO has ownership rights over the facilities which it had
financed and constructed. The 2004 Resolution squarely recognized that right when it
mandated the payment of just compensation to PIATCO prior to the takeover by the
Government of NAIA 3. The fact that the Government resorted to eminent domain proceedings
in the first place is a concession on its part of PIATCO's ownership. Indeed, if no such right is
 recognized, then there should be no impediment for the Government to seize control of NAIA 3
through ordinary ejectment proceedings.
xxxx
Thus, the property subject of expropriation, the NAIA 3 facilities, are real property
owned by PIATCO. x x x (Emphasis ours.)66
It was further settled in Gingoyon that the expropriation proceedings shall be held in accordance with
Republic Act No. 8974,67 thus:
Unlike in the case of Rule 67, the application of Rep. Act No. 8974 will not contravene the
2004 Resolution, which requires the payment of just compensation before any takeover of the
NAIA 3 facilities by the Government. The 2004 Resolution does not particularize the extent
such payment must be effected before the takeover, but it unquestionably requires at least some
degree of payment to the private property owner before a writ of possession may issue. The
utilization of Rep. Act No. 8974 guarantees compliance with this bare minimum requirement,
as it assures the private property owner the payment of, at the very least, the proffered value of
the property to be seized. Such payment of the proffered value to the owner, followed by the
issuance of the writ of possession in favor of the Government, is precisely the schematic under
Rep. Act No. 8974, one which facially complies with the prescription laid down in the 2004
Resolution.
And finally, as to the determination of the amount due PIATCO, this Court ruled in Gingoyon that:
Under Rep. Act No. 8974, the Government is required to "immediately pay" the owner of the
property the amount equivalent to the sum of (1) one hundred percent (100%) of the value of
the property based on the current relevant zonal valuation of the [BIR]; and (2) the value of the
improvements and/or structures as determined under Section 7. As stated above, the BIR zonal
valuation cannot apply in this case, thus the amount subject to immediate payment should be
limited to "the value of the improvements and/or structures as determined under Section 7,"
with Section 7 referring to the "implementing rules and regulations for the equitable valuation
of the improvements and/or structures on the land." Under the present implementing rules in
place, the valuation of the improvements/structures are to be based using "the replacement
cost method." However, the replacement cost is only one of the factors to be considered in
determining the just compensation.
In addition to Rep. Act No. 8974, the 2004 Resolution in Agan also mandated that the payment
of just compensation should be in accordance with equity as well. Thus, in ascertaining the
ultimate amount of just compensation, the duty of the trial court is to ensure that such amount
conforms not only to the law, such as Rep. Act No. 8974, but to principles of equity as well.
Admittedly, there is no way, at least for the present, to immediately ascertain the value of the
improvements and structures since such valuation is a matter for factual determination. Yet
Rep. Act No. 8974 permits an expedited means by which the Government can immediately take
possession of the property without having to await precise determination of the valuation.
Section 4(c) of Rep. Act No. 8974 states that "in case the completion of a government
infrastructure project is of utmost urgency and importance, and there is no existing valuation
of the area concerned, the implementing agency shall immediately pay the owner of the
property its proferred value, taking into consideration the standards prescribed in Section 5 [of
the law]." The "proffered value" may strike as a highly subjective standard based solely on the
intuition of the government, but Rep. Act No. 8974 does provide relevant standards by which
"proffered value" should be based, as well as the certainty of judicial determination of the
propriety of the proffered value.
In filing the complaint for expropriation, the Government alleged to have deposited the amount
of P3 Billion earmarked for expropriation, representing the assessed value of the property. The
making of the deposit, including the determination of the amount of the deposit, was undertaken
under the erroneous notion that Rule 67, and not Rep. Act No. 8974, is the applicable law. Still,
as regards the amount, the Court sees no impediment to recognize this sum of P3 Billion as the
proffered value under Section 4(b) of Rep. Act No. 8974. After all, in the initial determination
of the proffered value, the Government is not strictly required to adhere to any predetermined
standards, although its proffered value may later be subjected to judicial review using the
standards enumerated under Section 5 of Rep. Act No. 8974.68
Gingoyon constitutes as the law of the case for the expropriation proceedings, docketed as Case No. 04-
0876CFM, before the RTC of Pasay City. Law of the case has been defined in the following manner –
By "law of the case" is meant that "whatever is once irrevocably established as the controlling
legal rule or decision between the same parties in the same case continues to be the law of the
case" so long as the "facts on which such decision was predicated continue to be the facts of the
case before the court" (21 C.J.S. 330). And once the decision becomes final, it is binding on all
inferior courts and hence beyond their power and authority to alter or modify (Kabigting vs.
Acting Director of Prisons, G.R. L-15548, October 30, 1962).69
A ruling rendered on the first appeal, constitutes the law of the case, and, even if erroneous, it may no
longer be disturbed or modified since it has become final long ago. 70
The extensive excerpts from Gingoyon demonstrate and emphasize that the Court had already adjudged the
issues raised by Baterina, which he either conveniently overlooked or stubbornly refused to accept.
The general rule precluding the relitigation of material facts or questions which were in issue and
adjudicated in former action are commonly applied to all matters essentially connected with the subject
matter of the litigation. Thus, it extends to questions necessarily involved in an issue, and necessarily
adjudicated, or necessarily implied in the final judgment, although no specific finding may have been
made in reference thereto, and although such matters were directly referred to in the pleadings and were
not actually or formally presented. Under this rule, if the record of the former trial shows that the judgment
could not have been rendered without deciding the particular matter, it will be considered as having settled
that matter as to all future actions between the parties and if a judgment necessarily presupposes certain
premises, they are as conclusive as the judgment itself. Reasons for the rule are that a judgment is an
adjudication on all the matters which are essential to support it, and that every proposition assumed or
decided by the court leading up to the final conclusion and upon which such conclusion is based is as
effectually passed upon as the ultimate question which is finally solved. 71
Since the issues Baterina wishes to raise as an intervenor in Case No. 04-0876CFM were already settled
with finality in both Agan and Gingoyon, then there is no point in still allowing his intervention. His
Petition-in-Intervention would only be a relitigation of matters that had been previously adjudicated by no
less than the Highest Court of the land. And, in no manner can the RTC of Pasay City in Case No. 04-
0876CFM grant the reliefs he prayed for without departing from or running afoul of the final and executory
Decisions of this Court in Agan and Gingoyon.
While it is true that when this Court, in a Resolution dated 1 February 2006, dismissed the Motions for
Intervention in Gingoyon, including that of Baterina, it also observed that the interests of the movants-in-
intervention may be duly litigated in proceedings which are extant before the lower courts. This does not
mean, however, that the said movants-in-interest were assured of being allowed as intervenors or that the
reliefs they sought as such shall be granted by the trial courts. The fate of their intervention still rests on
their interest or legal standing in the case and the merits of their arguments.

WHEREFORE, in view of the foregoing:

a. The Petition in G.R. No. 169914 is hereby DISMISSED for lack of merit; and

b. The Petition in G.R. No. 174166 is hereby likewise DISMISSED for being moot and academic.

No costs.

SO ORDERED.
 2. ₱20,000.00 as and for attorney’s fees, and finally

G.R. No. 189239 November 24, 2010 3. Costs of suit.

SPOUSES LETICIA & JOSE ERVIN ABAD, SPS. ROSARIO AND ERWIN COLLANTES, SPS. SO ORDERED.1 (emphasis in the original)
RICARDO AND FELITA ANN, SPS. ELSIE AND ROGER LAS PIÑAS, LINDA LAYDA,
RESTITUTO MARIANO, SPS. ARNOLD AND MIRIAM MERCINES, SPS. LUCITA AND
The MeTC held that as no payment had been made to respondents for the lots, they still maintain
WENCESLAO A. RAPACON, SPS. ROMEO AND EMILYN HULLEZA, LUZ MIPANTAO, SPS.
ownership thereon. It added that petitioners cannot claim a better right by virtue of the issuance of a Writ
HELEN AND ANTHONY TEVES, MARLENE TUAZON, SPS. ZALDO AND MIA SALES, SPS.
of Possession for the project beneficiaries have yet to be named.
JOSEFINA AND JOEL YBERA, SPS. LINDA AND JESSIE CABATUAN, SPS. WILMA AND
MARIO ANDRADA, SPS. RAYMUNDO AND ARSENIA LELIS, FREDY AND SUSANA
PILONEO, Petitioners, On appeal, the Regional Trial Court (RTC), by Decision of September 4, 2008, 2 reversed the MeTC
vs. decision and dismissed respondents’ complaint in this wise:
FIL-HOMES REALTY and DEVELOPMENT CORPORATION and MAGDIWANG REALTY
CORPORATION,Respondents.
x x x The court a quo ruled that the case filed by plaintiffs (respondents herein) is unlawful detainer as
shown by the allegations of the Complaint. The ruling of the court a quo is not accurate. It is not the
DECISION allegations of the Complaint that finally determine whether a case is unlawful detainer, rather it is
the evidence in the case.
CARPIO MORALES, J.:
Unlawful detainer requires the significant element of "tolerance". Tolerance of the occupation of the
property must be present right from the start of the defendants’ possession. The phrase "from the start of
Fil-Homes Realty and Development Corporation and Magdiwang Realty Corporation (respondents), co-
defendants’ possession" is significant. When there is no "tolerance" right from the start of the
owners of two lots situated in Sucat, Parañaque City and covered by Transfer Certificates of Title Nos.
possession sought to be recovered, the case of unlawful detainer will not prosper.3 (emphasis in the
21712 and 21713, filed a complaint for unlawful detainer on May 7, 2003 against above-named petitioners
original; underscoring supplied)
before the Parañaque Metropolitan Trial Court (MeTC).

The RTC went on to rule that the issuance of a writ of possession in favor of the City bars the continuation
Respondents alleged that petitioners, through tolerance, had occupied the subject lots since 1980 but
of the unlawful detainer proceedings, and since the judgment had already been rendered in the
ignored their repeated demands to vacate them.
expropriation proceedings which effectively turned over the lots to the City, the MeTC has no jurisdiction
to "disregard the . . . final judgment and writ of possession" due to non-payment of just compensation:
Petitioners countered that there is no possession by tolerance for they have been in adverse, continuous and
uninterrupted possession of the lots for more than 30 years; and that respondent’s predecessor-in-interest,
The Writ of Possession shows that possession over the properties subject of this case had already been
Pilipinas Development Corporation, had no title to the lots. In any event, they contend that the question of
given to the City of Parañaque since January 19, 2006 after they were expropriated. It is serious error for
ownership must first be settled before the issue of possession may be resolved.
the court a quo to rule in the unlawful detainer case that Magdiwang Realty Corporation and Fil-
Homes Realty and Development Corporation could still be given possession of the properties which
During the pendency of the case or on June 30, 2004, the City of Parañaque filed expropriation were already expropriated in favor of the City of Parañaque.
proceedings covering the lots before the Regional Trial Court of Parañaque with the intention of
establishing a socialized housing project therein for distribution to the occupants including petitioners. A
There is also another serious lapse in the ruling of the court a quo that the case for expropriation in the
writ of possession was consequently issued and a Certificate of Turn-over given to the City.
Regional Trial Court would not bar, suspend or abate the ejectment proceedings. The court a quo had failed
to consider the fact that the case for expropriation was already decided by the Regional Trial Court, Branch
Branch 77 of the MeTC, by Decision of March 3, 2008, rendered judgment in the unlawful detainer case 196 way back in the year 2006 or 2 years before the court a quo rendered its judgment in the unlawful
against petitioners, disposing as follows: detainer case in the year 2008. In fact, there was already a Writ of Possession way back in the year 1996
(sic) issued in the expropriation case by the Regional Trial Court, Branch 196. The court a quo has no
valid reason to disregard the said final judgment and the writ of possession already issued by the
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendants
Regional Trial Court in favor of the City of Parañaque and against Magdiwang Realty Corporation
Leticia and Ervin Abad et. als. ordering the latter and all persons claiming rights under them
and Fil-Homes Realty Development Corporation and make another judgment concerning possession
to VACATE and SURRENDERpossession of the premises (Lots covered by TCT NOS. (71065) 21712
of the subject properties contrary to the final judgment of the Regional Trial Court, Branch
and (71066) 21713 otherwise known as Purok I Silverio Compound, Barangay San Isidro, Parañaque City
196.4 (emphasis in the original)
to plaintiff and to PAY the said plaintiff as follows:

Before the Court of Appeals where respondents filed a petition for review, they maintained that
1. The reasonable compensation in the amount of ₱20,000.00 a month commencing November
respondents’ "act of allowing several years to pass without requiring [them] to vacate nor filing an
20, 2002 and every month thereafter until the defendants shall have finally vacated the premises
ejectment case against them amounts to acquiescence or tolerance of their possession."5
and surrender peaceful possession thereof to the plaintiff;
By Decision of May 27, 2009,6 the appellate court, noting that petitioners did not present evidence to rebut initiation of expropriation proceedings designated them as beneficiaries of the lots, hence, they are entitled
respondents’ allegation of possession by tolerance, and considering petitioners’ admission that they to continue staying there.
commenced occupation of the property without the permission of the previous owner ─ Pilipinas
Development Corporation ─ as indicium of tolerance by respondents’ predecessor-in-interest, ruled in
Petitioners’ position does not lie.
favor of respondents. Held the appellate court:

Where the defendant’s entry upon the land was with plaintiff’s tolerance from the date and fact of entry,
unlawful detainer proceedings may be instituted within one year from the demand on him to vacate upon
demand. The status of such defendant is analogous to that of a tenant or lessee, the term of whose lease,
has expired but whose occupancy is continued by the tolerance of the lessor. The same rule applies where
the defendant purchased the house of the former lessee, who was already in arrears in the payment of
rentals, and thereafter occupied the premises without a new lease contract with the landowner. 7
Respecting the issuance of a writ of possession in the expropriation proceedings, the appellate court,
citing Republic v. Gingoyon,8 held the same does not signify the completion of the expropriation
proceedings. Thus it disposed:
WHEREFORE, premises considered, the instant Petition is GRANTED. The assailed Decision of the
Court a quo is REVOKED and SET ASIDE. The Decision of the Metropolitan Trial Court dated March 3,
2008 is hereby REINSTATED with MODIFICATION [by] deleting the award for attorney’s fees.
The exercise of expropriation by a local government unit is covered by Section 19 of the Local
Government Code (LGC):
SEC. 19. Eminent Domain. – A local government unit may, through its chief executive and acting pursuant
to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit
of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the
Constitution and pertinent laws: Provided, however, That the power of eminent domain may not be
exercised unless a valid and definite offer has been previously made to the owner, and such offer was not
accepted: Provided, further, That the local government unit may immediately take possession of the
property upon the filing of the expropriation proceedings and upon making a deposit with the proper court
of at least fifteen percent (15%) of the fair market value of the property based on the current tax declaration
of the property to be expropriated: Provided, finally, That the amount to be paid for the expropriated
property shall be determined by the proper court, based on the fair market value of the property.
Lintag v. National Power Corporation11 clearly outlines the stages of expropriation, viz:

SO ORDERED. (underscoring supplied)

Expropriation of lands consists of two stages:

Petitioners’ motion for reconsideration was denied by Resolution dated August 26, 2009, hence, the filing
of the present petition for review.
The petition fails.
In the exercise of the power of eminent domain, the State expropriates private property for public use upon
payment of just compensation. A socialized housing project falls within the ambit of public use as it is in
furtherance of the constitutional provisions on social justice.9
As a general rule, ejectment proceedings, due to its summary nature, are not suspended or their resolution
held in abeyance despite the pendency of a civil action regarding ownership.
Section 1 of Commonwealth Act No. 53810 enlightens, however:
Section 1. When the Government seeks to acquire, through purchase or expropriation proceedings, lands
belonging to any estate or chaplaincy (cappellania), any action for ejectment against the tenants occupying
said lands shall be automatically suspended, for such time as may be required by the expropriation
proceedings or the necessary negotiations for the purchase of the lands, in which latter case, the period of
suspension shall not exceed one year.
The first is concerned with the determination of the authority of the plaintiff to exercise the power of
eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with
an order, if not of dismissal of the action, "of condemnation declaring that the plaintiff has a lawful right to
take the property sought to be condemned, for the public use or purpose described in the complaint, upon
the payment of just compensation to be determined as of the date of the filing of the complaint x x x.
The second phase of the eminent domain action is concerned with the determination by the court of "the
just compensation for the property sought to be taken." This is done by the court with the assistance of not
more than three (3) commissioners x x x .lavvphi1
It is only upon the completion of these two stages that expropriation is said to have been completed. The
process is not complete until payment of just compensation. Accordingly, the issuance of the writ of
possession in this case does not write finis to the expropriation proceedings. To effectuate the transfer of
ownership, it is necessary for the NPC to pay the property owners the final just compensation.12 (emphasis
and underscoring supplied)
In the present case, the mere issuance of a writ of possession in the expropriation proceedings did not
transfer ownership of the lots in favor of the City. Such issuance was only the first stage in expropriation.
There is even no evidence that judicial deposit had been made in favor of respondents prior to the City’s
possession of the lots, contrary to Section 19 of the LGC.

To avail himself of the benefits of the suspension, the tenants shall pay to the landowner the current
Respecting petitioners’ claim that they have been named beneficiaries of the lots, the city ordinance
rents as they become due or deposit the same with the court where the action for ejectment has been
authorizing the initiation of expropriation proceedings does not state so. 13 Petitioners cannot thus claim any
instituted. (emphasis and underscoring supplied)
right over the lots on the basis of the ordinance.

Petitioners did not comply with any of the acts mentioned in the law to avail of the benefits of the
Even if the lots are eventually transferred to the City, it is non sequitur for petitioners to claim that they are
suspension. They nevertheless posit that since the lots are the subject of expropriation proceedings,
automatically entitled to be beneficiaries thereof. For certain requirements must be met and complied with
respondents can no longer assert a better right of possession; and that the City Ordinance authorizing the
before they can be considered to be beneficiaries.
In another vein, petitioners posit that respondents failed to prove that their possession is by mere tolerance.
This too fails. Apropos is the ruling in Calubayan v. Pascual:14

In allowing several years to pass without requiring the occupant to vacate the premises nor filing an action
to eject him, plaintiffs have acquiesced to defendant’s possession and use of the premises. It has been held
that a person who occupies the land of another at the latter’s tolerance or permission, without any contract
between them, is necessarily bound by an implied promise that he will vacate upon demand, failing which
a summary action for ejectment is the proper remedy against them. The status of the defendant is
analogous to that of a lessee or tenant whose term of lease has expired but whose occupancy continued by
tolerance of the owner. In such a case, the unlawful deprivation or withholding of possession is to be
counted from the date of the demand to vacate. (emphasis and underscoring supplied)

Respondents bought the lots from Pilipinas Development Corporation in 1983. They stepped into the shoes
of the seller with respect to its relationship with petitioners. Even if early on respondents made no demand
or filed no action against petitioners to eject them from the lots, they thereby merely maintained the status
quo – allowed petitioners’ possession by tolerance.

WHEREFORE, the petition for review is DENIED.


G.R. No. 193936 December 11, 2013
NATIONAL POWER CORPORATION, Petitioner,
vs.
YCLA SUGAR DEVELOPMENT CORPORATION, Respondent.
DECISION
REYES, J.:
Before this Court is a petition for review on certiorari1under Rule 45 of the Rules of Court seeking to annul
and set aside the Decision2 dated September 23, 2010 of the Court of Appeals (CA) in CA-G.R. CV No.
86508, which affirmed with modification the Decision3 dated May 12, 2005 of the Regional Trial Court
(RTC) of Calapan City, Oriental Mindoro, Branch 40, in Civil Case No. R-4600.
The Facts
Petitioner National Power Corporation (NPC) is a government owned and controlled corporation created
for the purpose of undertaking the development of hydroelectric power throughout the Philippines. NPC is
thus authorized to exercise the power of eminent domain to carry out the said purpose.4
Respondent YCLA Sugar Development Corporation (YCLA) is the registered owner of three parcels of
land situated in Puerto Galera, Oriental Mindoro, covered by Transfer Certificates of Title Nos. T-5209, T-
21280 and T-78583.
In order to complete its 69 KV Calapan-Mamburao Island Grid Project in Puerto Galera, Oriental Mindoro,
NPC had to construct transmission lines that would traverse several private properties, including the said
parcels of land owned by YCLA.
Accordingly, on December 2, 1997, NPC filed a Complaint 5 for expropriation with the RTC against YCLA
and several other individuals. The NPC sought the expropriation of a portion of the parcels of land owned
by the said defendants for the acquisition of an easement of right-of-way over areas that would be affected
by the construction of transmission lines. The portion of YCLA’s properties that would be affected by the
construction of NPC’s transmission lines has an aggregate area of 5,846 square meters.
YCLA filed its Answer6 dated July 9, 1998, alleging that the Complaint should be dismissed outright due
to NPC’s failure to allege the public use for the intended expropriation of its properties.
On April 30, 1999, the parties moved, inter alia, for the constitution of a Board of Commissioners to be
appointed by the RTC to determine the reasonable amount of just compensation to be paid by the NPC.
Thus, on even date, the RTC issued an order terminating the pre-trial conference and directing the
constitution of a Board of Commissioners, which would submit a report and recommendation as to the
reasonable amount of just compensation for the properties sought to be expropriated.
Meanwhile, on June 4, 1999, the RTC, acting on NPC’s urgent ex- parte motion, issued a writ of
possession placing NPC in possession of the properties sought to be expropriated.
On May 2, 2001, the Board of Commissioners submitted its Report, 7 which fixed the amount of just
compensation of the subject properties at ₱500.00 per sq m. YCLA objected to the amount recommended
by the Board of Commissioners, claiming that the amount of just compensation should be fixed at ₱900.00
per sq m considering the improvements in their properties.
On October 19, 2001, the RTC issued an Order directing YCLA to submit its written manifestation,
together with supporting documents, on its position on the proper valuation of the subject properties. NPC
was likewise given 15 days to comment thereon. Trial on the determination of the reasonable amount of
just compensation ensued thereafter.
Consequently, YCLA filed a motion asking the RTC to direct the Board of Commissioners to conduct an
ocular inspection over the subject properties and, thereafter, amend/revise the Board of Commissioner’s
Report dated May 2, 2001. YCLA’s motion was granted by the RTC on July 25, 2003.
Meanwhile, on November 25, 2002, the RTC rendered a Partial Decision as regards the amount of just
compensation that would be paid by the NPC to the other defendants.
On September 15, 2003, the Board of Commissioners submitted its second Report, 8 which fixed the just
compensation of the subject properties at ₱1,000.00 per sq m. The Board of Commissioners’ Report dated
September 15, 2003, in part, reads:
The undersigned secured from the office of the Provincial Assessor the actual appraised value per square
meter x x x of the Agricultural Land subject matter of the case which is [₱11.50] per square meter[.]
[H]owever, the prevailing market value is Five Hundred Pesos ([P]500.00) to One Thousand Five Hundred
Pesos ([P]1,500.00) per square meters x x x, per actual sale and opinion value of reliable persons x x x.
In view thereof, the undersigned is submitting this report to the Honorable Court that the amount of One
Thousand Pesos ([P]1,000.00) per square meter should be the basis in the computation of the price per
square meter of the land subject matter of the instant case, justified by its location on [a] strategic place and
the consequential damages to the whole properties of the defendants because the plaintiff occupied the
front portion along the highway.9
On May 12, 2005, the RTC rendered a Decision,10 which adopted the report and recommendation of the
Board of Commissioners, viz:
ACCORDINGLY, judgment is hereby rendered directing the plaintiff National Power Corporation to pay
herein defendant YCLA the total amount of [P]5,786,000.00 representing the value of the expropriated
lands owned by the said defendant and its 26 molave trees which were cut down to make way for the
plaintiff[’s] project, with legal interest from the time the plaintiff had actually took possession of the
subject properties on 19 April 1999 until full payment has been made.
SO ORDERED.11
The RTC pointed out that the Board of Commissioner’s Report dated May 2, 2001, which recommended
that the amount of just compensation be fixed at ₱500.00 per sq m, was arrived at without conducting an
ocular inspection of the subject properties. That, upon YCLA’s request, the Board of Commissioners
subsequently conducted an ocular inspection of the subject properties, which prompted them to revise their
earlier recommendation.
Unperturbed, NPC appealed the RTC Decision dated May 12, 2005 to the CA, alleging that the RTC erred
in relying on the recommendation of the Board of Commissioners as regards the amount of just
compensation. NPC claimed that the amount of ₱1,000.00 per sq m recommended by the Board of
Commissioners as the reasonable amount of just compensation, which was adopted by the RTC, is too
excessive considering that the subject properties were barren and undeveloped agricultural lands at the
time it instituted the action for expropriation.
12
On September 23, 2010, the CA rendered the Decision which affirmed with modification the RTC
Decision dated May 12, 2005, thus:
WHEREFORE, the assailed Decision is AFFIRMED with the MODIFICATION only in so far as the
value of just compensation for the property involved is concerned. Resultantly, the herein appellant is
ordered to pay YCLA Sugar Development Corporation the award of [P]900.00 per square meter, as and by
way of just compensation for the expropriated property. Costs against the herein appellant.
SO ORDERED.13
The CA held that the RTC’s determination of the amount of just compensation was reasonable
notwithstanding that it was merely based on the Report submitted by the Board of Commissioners. The
RTC pointed out that there was no showing that the said Report was tainted with irregularity, fraud or bias.
Nevertheless, the CA modified the award rendered by the RTC, by fixing the amount of just compensation
to ₱900.00 per sq m instead of ₱1,000.00 per sq m, since YCLA only sought an award of ₱900.00 per sq m
as just compensation for the subject properties in the proceedings before the RTC.
The Issue
Essentially, the issue presented to the Court for resolution is whether the RTC and the CA had sufficient
basis in arriving at the questioned amount of just compensation of the subject properties.
The NPC posits that the Board of Commissioners’ Report dated September 15, 2003 lacks factual basis;
that both the RTC and the CA erred in giving credence to the Report dated September 15, 2003 as to the
recommended amount of just compensation for the subject properties. NPC maintains that the amount of
₱900.00 per sq m that was fixed by the CA as just compensation is excessive considering that the subject
properties were barren and undeveloped agricultural lands at the time it filed the complaint for
expropriation. Thus, NPC prayed that the Court fix the amount of just compensation for the subject
properties at ₱500.00 per sq m pursuant to the Board of Commissioners’ Report dated May 2, 2001.
On the other hand, YCLA contends that the RTC and the CA aptly relied on the Board of Commissioners’
Report dated September 15, 2003, pointing out that the Board of Commissioners was in the best position to
determine the amount of just compensation considering that its members undertook intensive ocular
inspection of the subject properties.
The Court’s Ruling
The petition is partly meritorious.
In expropriation proceedings, just compensation is defined as the full and fair equivalent of the property
taken from its owner by the expropriator. The measure is not the taker’s gain, but the owner’s loss. The
word "just" is used to intensify the meaning of the word "compensation" and to convey thereby the idea
that the equivalent to be rendered for the property to be taken shall be real, substantial, full and ample. The
constitutional limitation of "just compensation" is considered to be a sum equivalent to the market value of
the property, broadly defined as the price fixed by the seller in open market in the usual and ordinary
course of legal action and competition; or the fair value of the property; as between one who receives and
one who desires to sell it, fixed at the time of the actual taking by the government. 14
It is settled that the amount of just compensation is to be ascertained as of the time of the taking, which
usually coincides with the commencement of the expropriation proceedings. Where the institution of the
action precedes entry into the property, the amount of just compensation is to be ascertained as of the time
of the filing of the complaint.15
In this case, in arriving at the amount of just compensation, both the RTC and the CA relied heavily on the
Board of Commissioners’ Report dated September 15, 2003, which, in turn, was arrived at after conducting
an ocular inspection of the subject properties on August 27, 2003. However, the Board of Commissioners’
recommendation as to the amount of just compensation was based on the prevailing market value of the
subject properties in 2003. What escaped the attention of the lower courts is that the prevailing market
value of the subject properties in 2003 cannot be used to determine the amount of just compensation
considering that the Complaint for expropriation was filed by NPC on December 2, 1997.
Further, the Court notes that the Board of Commissioners, in its Report dated September 15, 2003, merely
alleged that its members arrived at the amount of ₱1,000.00 per sq m as just compensation for the subject
properties based on actual sales, presumably of surrounding parcels of land, and on the opinion of "reliable
persons" that were interviewed. However, the Report dated September 15, 2003 is not supported by any
corroborative documents such as sworn declarations of the "reliable persons" that were supposedly
interviewed.
The Court has consistently ruled that just compensation cannot be arrived at arbitrarily; several factors
must be considered such as, but not limited to, acquisition cost, current market value of like properties, tax
value of the condemned property, its size, shape, and location. But before these factors can be considered
and given weight, the same must be supported by documentary evidence. 16 The amount of just
compensation could only be attained by using reliable and actual data as bases for fixing the value of the
condemned property. A commissioners’ report of land prices which is not based on any documentary
evidence is manifestly hearsay and should be disregarded by the court.17
Under the Rules of Court, any evidence – whether oral or documentary – is hearsay if its probative value is
not based on the personal knowledge of the witness, but on that of some other person who is not on the
witness stand.18
A commissioners’ report of land prices is considered as evidence in the determination of the amount of just
compensation due the land owner in expropriation cases. The recommended amount of just compensation
contained in the commissioners’ report of land prices, in turn, is based on various factors such as the fair
market value of the property, the value of like properties. Thus, it becomes imperative that the
commissioners’ report of land prices be supported by pertinent documents, which impelled the
commissioners to arrive at the recommended amount for the condemned properties, to aid the court in its
determination of the amount of just compensation. Otherwise, the commissioner’s report becomes hearsay
and should thus not be considered by the court.
The trial court, in expropriation cases, may accept or reject, whether in whole or in part, the report
submitted by the Board of Commissioners, which is merely advisory and recommendatory in
character.1âwphi1 It may also recommit the report or set aside the same and appoint new
commissioners.19 In this case, the lower courts gave full faith and credence to the Board of Commissioners'
Report dated September 15, 2003 notwithstanding that it was not supported by any documentary evidence.
Considering that the legal basis for the determination of just compensation for the subject properties is
insufficient, the respective Decisions of the RTC and the CA should be set aside.
Nevertheless, the Court cannot fix the amount of just compensation for the subject properties at ₱500.00
per sq m pursuant to the Board of Commissioners' Report dated May 2, 2001. The said Report suffers from
the same infirmity as the Report dated September 15, 2003 - it is unsupported by any documentary
evidence and its recommendation as regards the amount of just compensation are based on the prevailing
market value of the subject properties in 2001.

WHEREFORE, in consideration of the foregoing disquisitions, the instant petition is PARTIALLY

GRANTED. The Decision dated September 23, 2010 of the Court of Appeals in CA-G.R. CV No. 86508
and the Decision dated May 12, 2005 of the Regional Trial Court of Calapan City, Oriental Mindoro,
Branch 40, in Civil Case No. R-4600 are hereby SET ASIDE. This case is remanded to the trial court for
the proper determination of just compensation, in conformity with this Decision.

SO ORDERED.

G.R. No. 158464, August 02, 2016
JOCELYN S. LIMKAICHONG, Petitioner, v. LAND BANK OF THE PHILIPPINES,
DEPARTMENT OF AGRARIAN REFORM, REPRESENTED BY THE SECRETARY OF
AGRARIAN REFORM, THROUGH THE PROVINCIAL AGRARIAN REFORM
OFFICER, Respondents.
DECISION
BERSAMIN, J.:
Being now assailed in this appeal are the decision promulgated by the Court of Appeals (CA) on
November 22, 2002 (dismissing the petitioner's petition for certiorari for not being the proper remedy,
thereby affirming the dismissal of Civil Case No. 12558 by the trial court on the ground of the valuation by
the Department of Agrarian Reform (DAR) having already become final due to her failure as the
landowner to bring her action for judicial determination of just compensation within 15 days from notice of
such valuation),1 and the resolution promulgated on June 2, 2003 (denying her motion for
reconsideration).2chanrobleslaw
Antecedents
The petitioner was the registered owner of agricultural lands with a total area of 19.6843 hectares situated
in Villegas, Guihulngan, Negros Oriental and covered by Original Certificate of Title No. (OCT) FV-
34400, OCT No. 34401, OCT No. 34402, and OCT No. 34403, all of the Register of Deeds of Negros
Oriental. For purposes of placing those lands within the coverage of Republic Act No. 6657 (R.A. No,
6657),3 the Department of Agrarian Reform Adjudication Board (DARAB), Office of the Provincial
Adjudicator, in Dumaguete City sent to her in 1998 several Notices of Land Valuation and Acquisition by
which her lands were valued for acquisition by the DAR as follows:ChanRoblesVirtualawlibrary
1. OCT FV-34400- P177,074.93;4
2. OCTFV-34401- P171,061.11;5
3. OCTFV-34402- P167,626.62;6 and
4. OCTFV-34403- P140,611.65.7
After the petitioner rejected such valuation of her lands, the DARAB conducted summary administrative
proceedings for the determination of just compensation.8 On May 28, 1999, the DARAB issued its order
affirming the valuation of the lands upon finding the valuation consistent with existing administrative
guidelines on land valuation.9chanrobleslaw
On August 19, 1999, the petitioner filed in the Regional Trial Court (RTC) in Dumaguete City a complaint
for the fixing of just compensation for her lands,10 impleading as defendant the Land Bank of the
Philippines (LBP) and the DAR, represented by the DAR Secretary, through the Dumaguete Provincial
Agrarian Reform Officer (PARO). Her complaint, docketed as Civil Case No. 12558, prayed that the
DARAB valuation be set aside and declared null and void, and that in its stead the price of her lands be
fixed based on the fair market value thereof.
After filing their answer, the respondents filed a manifestation and motion to dismiss,11 stating that the
petitioner's failure to timely appeal the May 28, 1999 DARAB order had rendered the order final and
executory pursuant to Section 5112 of R.A. No. 6657. They attached to the motion to dismiss a June 23,
2000 certification of finality issued by the Clerk of the DARAB, 13 stating that the May 28, 1999 order had
become final and executory because there had been no appeal filed within the reglementary period
provided by law.
In her opposition to the respondents' motion to dismiss,14 the petitioner admitted that Civil Case No, 12558
was filed beyond the reglementary period, but insisted that the RTC sitting as special agrarian court (SAC)
was not barred from acquiring jurisdiction over the complaint for determination of just compensation,
because her cause of action was anchored on the respondents' violation of her right to due process and their
taking of her property without just compensation due to the DARAB valuation being too low and having
been arbitrarily arrived at. She claimed that the RTC as the SAC should accord her the same treatment it
had accorded to other landowners who had been given the chance to be heard on their claim for re-
valuation despite the belated filing of their complaints for just compensation.
On June 7, 2001, the RTC as the SAC granted the respondents' motion to dismiss. 15 Citing Section 51 and
Section 5416 of R.A. No. 6657 and Section 11 of Rule XIII of the 1994 DARAB Rules of Procedure, 17it
held that the petitioner's complaint should have been filed within 15 days from notice of the assailed order.
It dismissed her argument that the case was anchored on violations of her constitutional rights to due
process and just compensation, declaring that the controlling ruling was Philippine Veterans Bank v. Court
of Appeals,18 not Republic v. Court of Appeals.19 Thus, applying the ruling in Philippine Veterans Bank, the
RTC concluded that dismissal was proper because she had filed Civil Case No. 12558 beyond the statutory
15-day period.
The petitioner moved for reconsideration,20 but to no avail.
Thus, on October 22, 2001, the petitioner brought her petition for certiorari in the CA assailing the
dismissal of Civil Case No. 12558.
On November 22, 2002, the CA rendered its decision affirming the dismissal of Civil Case No. 12558,
opining that because the June 7, 2001 order of the RTC dismissing Civil Case No. 12558 was a final order,
the petitioner's remedy was not the special civil action for certiorari but an appeal in the CA; that she
chose the wrong remedy because certiorari could not take the place of an appeal; and that the RTC thus
committed no grave abuse of discretion that warranted the issuance of the writ of certiorari.
Issue
The petitioner raises the following issue for resolution:ChanRoblesVirtualawlibrary
WHETHER OR NOT ON THE QUESTION OF CONSTITUTIONAL RIGHT TO EQUAL
PROTECTION OF LAW, THE COURT OF APPEALS DECISION DATED NOVEMBER 22, 2002
RULING THAT THE PETITION FOR CERTIORARI WAS NOT THE PROPER REMEDY IS
CONTRARY TO THE LAW AND JURISPRUDENCE AS APPLIED TO THE EVIDENCE ON
RECORD.21chanroblesvirtuallawlibrary
The petitioner argues that she is entitled to equal protection and treatment accorded by the very same trial
court to other landowners whose landholdings were placed under agrarian reform coverage, listing the
cases involving other landowners who had been given the chance to be heard on their claim for re-
valuation by the trial court.22 She justifies her resort to certiorari by claiming that the RTC, in dismissing
Civil Case No. 12558, acted whimsically and arbitrarily, and gravely abused its discretion; and
that certiorari was necessary to prevent irreparable damage and injury to her resulting from the acquisition
by the State of her lands based on wrongful valuation and without paying her the proper and just
compensation.
In their respective comments,23 the respondents counter that the petitioner's reliance on the equal protection
clause of the fundamental law is misplaced and bereft of legal and factual basis; that, on the contrary, they
faithfully performed their task in relation to her landholdings, and in accordance with the agrarian laws and
guidelines issued in furtherance thereof; that the final and executory DARAB valuation should no longer
be disturbed by her frivolous claim of lack of due process; that her failure to properly observe the rules of
procedure relative to reglementary periods should not be concealed by a trivial claim of violation of her
constitutional rights; that pursuant to Section 60 24 of RA 6657, the decision became final because an appeal
by petition for review was not taken from the decision of the RTC as the SAC within 15 days from notice
of the decision; and that there was no proof of service on the CA of a copy of the petition as required by
Section 3, Rule 45 of the Rules of Court and Circular No, 19-91, thereby warranting the outright dismissal
of the petition.
Ruling of the Court
The petition for review is meritorious.
I makes an offer to acquire the land sought to be placed under agrarian reform. If the concerned landowner
Certiorari was a proper remedy despite the availability of appeal
The CA ruled that the proper remedy of the petitioner was not to bring the petition for certiorari but to
appeal the dismissal of Civil Case No. 12558 in accordance with the Rules of Court; and that appeal as her
proper remedy was already time-barred.
Ostensibly, the assailed dismissal by the RTC was an order that had finally disposed of Civil Case No.
12558; hence, the petitioner's proper recourse therefrom was an appeal taken in due course because the
order of dismissal was a final disposition of the case.25cralawred In that situation, certiorari would not
have been appropriate.
However, the petitioner would not be prevented from assailing the dismissal by petition
for certiorariprovided her resort complied with the requirements of the Rules of Court for the bringing of
the petition for certiorari. In that regard, the following requisites must concur for certiorari to prosper,
namely: (1) the writ is directed against a tribunal, a board or any officer exercising judicial or quasi-
judicial functions; (2) such tribunal, board or officer has acted without or in excess of jurisdiction, or with
grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any
plainj speedy and adequate remedy in the ordinary course of law. 26Without jurisdiction means that the
court acted with absolute lack of authority. There is excess of jurisdiction when the court transcends its
power or acts without any statutory authority, Grave abuse of discretion implies such capricious and
whimsical exercise of judgment as to be equivalent to lack or excess of jurisdiction; in other words, power
- is exercised in an arbitrary or despotic manner by reason of passion, prejudice, or personal hostility; and
such exercise is so patent or so gross as to amount to an evasion of a positive duty or to a virtual refusal
either to perform the duty enjoined or to act at all in contemplation of law. 27chanrobleslaw
Indeed, the Court has held that the availability of an appeal as a remedy is a bar to the bringing of the
petition for certiorari only where such appeal is in itself a sufficient and adequate remedy, in that it will
promptly relieve the petitioner from the injurious effects of the judgment or final order complained
of.28The Court does not hesitate or halt on its tracks in granting the writ of certiorari to prevent irreparable
damage and injury to a party in cases where the trial judge capriciously and whimsically exercised his
judgment, or where there may be a failure of justice;29 or where the assailed order is a patent nullity; or
where the grant of the writ of certiorari will arrest future litigations; or for certain considerations, such as
public welfare and public policy.30chanrobleslaw
Here, the petitioner laments that she had not been accorded equal protection and treatment by the trial court
which had awarded to other landowners a higher valuation of their property despite the belated filing of
their petitions. For sure, the petition for certiorari thereby plainly alleged that the RTC had committed
grave abuse of discretion by violating the petitioner's constitutional right to due process or equal
protection. Such a petition should not be forthwith dismissed but should be fully heard if only to ascertain
and determine if the very serious allegations were true.
II
Dismissal of petitioner's action was unfair and improper
Section 9, Article III of the 1987 Constitution provides that "[p]rivate property shall not be taken for public
use without just compensation." The determination of just compensation has been the subject of various
discordant rulings of the Court. Although some of the later rulings have supposedly settled the controversy
of whether the courts or the DAR should have the final say on just compensation, the conflict has
continued, and has caused some confusion to the Bench and the Bar, as well as to the other stakeholders in
the expropriation of agricultural landholdings.
Under existing law and regulation, respondent LBP is tasked with the responsibility of initially determining
the value of lands placed under land reform and the just compensation to be paid the landowners for their
taking.31 By way of notice sent to the landowner pursuant to Section 16(a)32 of R.A. No. 6657, the DAR
rejects the offer, a summary administrative proceeding is held, and thereafter the provincial adjudicator
(PARAD), the regional adjudicator (RARAD) or the central adjudicator (DARAB), as the case may be,
fixes the price to be paid for the land, based on the various factors and criteria as determined by law or
regulation. Should the landowner disagree with the valuation, he/she may bring the matter to the RTC
acting as the SAC.33 This is the procedure for the determination of just compensation under R.A. No,
6657.34chanrobleslaw
There appears to be no question on the respondents' observance of the proper procedure for acquisition of
the petitioner's lands. The remaining issue concerns whether the trial court's dismissal of her petition
because of her failure to file it before the decision/order of the DARAB became final and executory
pursuant to Section 51 of R.A, No. 6657 was fair and proper.
We rule in the negative.
There have been divergent rulings on whether the courts or another agency of the government could
address the determination of just compensation in eminent domain, but the starting point is the landmark
1987 ruling in Export Processing Zone Authority (EPZA) v. Dulay,35 which resolved the challenge against
several decrees promulgated by President Marcos. The decrees provided certain measures to the effect that
the just compensation for property under expropriation should be either the assessment of the property by
the Government or the sworn valuation of the property by the owner, whichever was lower. In declaring
the decrees unconstitutional, the Court cogently held:ChanRoblesVirtualawlibrary
The method of ascertaining just compensation under the aforecited decrees constitutes impermissible
encroachment on judicial prerogatives. It tends to render this Court inutile in a matter which under this
Constitution is reserved to it for final determination.
Thus, although in an expropriation proceeding the court technically would still have the power to
determine the just compensation for the property, following the applicable decrees, its task would be
relegated to simply stating the lower value of the property as declared either by the owner or the assessor.
As a necessary consequence, it would be useless for the court to appoint commissioners under Rule 67 of
the Rules of Court. Moreover, the need to satisfy the due process clause in the taking of private property is
seemingly fulfilled since it cannot be said that a judicial proceeding was not had before the actual taking.
However, the strict application of the decrees during the proceedings would be nothing short of a mere
formality or charade as the court has only to choose between the valuation of the owner and that of the
assessor, and its choice is always limited to the lower of the two. The court cannot exercise its discretion or
independence in determining what is just and fair. Even a grade school pupil could substitute for the judge
insofar as the determination of constitutional just compensation is concerned.
xxxx
In the present petition, we are once again confronted with the same question of whether the courts under
P.D. No. 1533, which contains the same provision on just compensation as its predecessor decrees, still
have the power and authority to determine just compensation, independent of what is stated by the decree
and to this effect, to appoint commissioners for such purpose.
This time we answer in the affirmative.

xxxx
It is violative of due process to deny the owner the opportunity to prove that the valuation in the tax
documents is unfair or wrong. And it is repulsive to the basic concepts of justice and fairness to allow the
haphazard work of a minor bureaucrat or clerk to absolutely prevail over the judgment of a court
promulgated only after expert commissioners have actually viewed the property, after evidence and
arguments pro and con have been presented, and after all factors and considerations essential to a fair and
just determination have been judiciously evaluated.36chanroblesvirtuallawlibrary
The Court has reiterated EPZA v. Dulay in its later decisions, stressing that such determination was the
function of the courts of justice that no other branch or official of the Government could usurp.
Upon the effectivity of R.A, No, 6657 in 1988, the DAR, as the central implementing agency of the law,
promulgated the DARAB Rules of Procedures in 1989, 1994, 2003, and 2009 pursuant to the provisions of
Section 4937 and Section 5038 of R.A. No. 6657 vesting it with the power to issue rules and regulations,
whether substantive or procedural, to carry out the objects and purposes of the CARL, Moreover, Section
57 of the CARL defines the jurisdiction of the RTC sitting as the SAC, viz.:ChanRoblesVirtualawlibrary
Section 57. Special Jurisdiction - The Special Agrarian Courts shall have original and exclusive
jurisdiction over all petitions for the determination of just compensation to landowners, and the prosecution
of all criminal offenses under this Act. The Rules of Court shall apply to all proceedings before the Special
Agrarian Courts unless modified by this Act.
The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty
(30) days from submission of the case for decision.
Republic v. Court of Appeals,39 which was principally relied upon by the petitioner herein, reiterated that
the determination of just compensation for the taking of lands under the CARL was a power vested in the
courts and not in administrative agencies, clarifying that the jurisdiction of the SAC was not appellate but
original and exclusive, to wit:ChanRoblesVirtualawlibrary
Apart from the fact that only a statute can confer jurisdiction on courts and administrative agencies — rules
of procedure cannot — it is noteworthy that the New Rules of Procedure of the DARAB, which was
adopted on May 30, 1994, now provide that in the event a landowner is not satisfied with a decision of an
agrarian adjudicator, the landowner can bring the matter directly to the Regional Trial Court sitting as
Special Agrarian Court. Thus Rule XIII, §11 of the new rules provides:ChanRoblesVirtualawlibrary
§11. Land Valuation and Preliminary Determination and Payment of Just Compensation. - The decision of
the Adjudicator on land valuation and preliminary determination and payment of just compensation shall
not be appealable to the Board but shall be brought directly to the Regional Trial Courts designated as
Special Agrarian Courts within fifteen (15) days from receipt of the notice thereof. Any party shall be
entitled to only one motion for reconsideration.
This is an acknowledgment by the DARAB that the decision of just compensation cases for the taking of
lands under R.A. No. 6657 is a power vested in the courts.
xxxx
xxx. In accordance with it, the private respondent's case was properly brought by it in the RTC, and it was
error for the latter court to have dismissed the case. In the terminology of §57, the RTC, sitting as a Special
Agrarian Court, has "original and exclusive jurisdiction over all petitions for the determination of just
compensation to landowners." It would subvert this "original and exclusive" jurisdiction of the RTC for the
DAR to vest original jurisdiction in compensation cases in administrative officials and make the RTC an
appellate court for the review of administrative decisions.
Consequently, although the new rules speak of directly appealing the decision of adjudicators to the RTCs
sitting as Special Agrarian Courts, it is clear from §57 that the original and exclusive jurisdiction to
determine such cases is in the RTCs. Any effort to transfer such jurisdiction to the adjudicators and to
convert the original jurisdiction of the RTCs into appellate jurisdiction would be contrary to §57 and
therefore would be void. What adjudicators are empowered to do is only to determine in a preliminary
manner the reasonable compensation to be paid to landowners, leaving to the courts the ultimate power to
decide this question.40chanroblesvirtuallawlibrary
In the January 18, 2000 ruling in Philippine Veterans Bank,41 the Court, through Justice Vicente V.
Mendoza who had penned Republic v. Court of Appeals, upheld the DARAB rule to the effect that the
adjudicator's preliminary determination of just compensation must be brought to the SAC within 15 days
from receipt of the notice thereof; otherwise, the parties would be concluded by the result. The Court then
declared:ChanRoblesVirtualawlibrary
As we held in Republic v. Court of Appeals, this rule is an acknowledgment by the DARAB that the power
to decide just compensation cases for the taking of lands under R.A. No, 6657 is vested in the courts. It is
error to think that, because of Rule XIII, §11, the original and exclusive jurisdiction given to the courts to
decide petitions for determination of just compensation has thereby been transformed into an appellate
jurisdiction. It only means that, in accordance with settled principles of administrative law, primary
jurisdiction is vested in the DAR as an administrative agency to determine in a preliminary manner the
reasonable compensation to be paid for the lands taken under the Comprehensive Agrarian Reform
Program, but such determination is subject to challenge in the courts.
The jurisdiction of the Regional Trial Courts is not any less "original and exclusive" because the question
is first passed upon by the DAR, as the judicial proceedings are not a continuation of the administrative
determination. For that matter, the law may provide that the decision of the DAR is final and unappealable.
Nevertheless, resort to the courts cannot be foreclosed on the theory that courts are the guarantors of the
legality of administrative action.
Accordingly, as the petition in the Regional Trial Court was filed beyond the 15-day period provided in
Rule XIII, §11 of the Rules of Procedure of the DARAB, the trial court correctly dismissed the case and
the Court of Appeals correctly affirmed the order of dismissal. 42chanroblesvirtuallawlibrary
However, in the 2007 ruling in Land Bank v. Suntay,43 the Court opined that the RTC erred in dismissing
the Land Bank's petition for determination of just compensation on the ground that it was filed beyond the
15-day period provided in Section 11, Rule XIII of the DARAB New Rules of Procedure. This Court then
emphatically reminded that the SAC's jurisdiction over petitions for the determination of just compensation
was original and exclusive; that any effort to transfer such jurisdiction to the adjudicators of the DARAB
and to convert the original jurisdiction of the RTC into appellate jurisdiction was void for being contrary to
R.A, No. 6657; and that what DARAB adjudicators were empowered to do was only to determine in a
preliminary manner the reasonable compensation to be paid to the landowners, leaving to the courts the
ultimate power to decide this question.44chanrobleslaw
To purge any uncertainties brought about by the conflicting jurisprudence on the matter, this Court held in
its July 31, 2008 resolution in Land Bank v. Martinez:45
On the supposedly conflicting pronouncements in the cited decisions, the Court reiterates its ruling in this
case that the agrarian reform adjudicator's decision on land valuation attains finality after the lapse of
the 15-day period stated in the DARAB Rules. The petition for the fixing of just compensation should
therefore, following the law and settled jurisprudence, be filed with the SAC within the said
period.This conclusion, as already explained in the assailed decision, is based on the doctrines laid down
in Philippine Veterans Bank v. Court of Appeals and Department of Agrarian Reform Adjudication Board
v. Lubrica.
xxxx
The Court notes that the Suntay ruling is based on Republic of the Philippines v. Court of Appeals, decided
in 1996 also through the pen of Justice Vicente V. Mendoza. In that case, the Court emphasized that the
jurisdiction of the SAC is original and exclusive, not appellate. Republic, however, was decided at a time
when Rule XIII, Section 11 was not yet present in the DARAB Rules. Further, Republic did not discuss
whether the petition filed therein for the fixing of just compensation was filed out of time or not. The Court
merely decided the issue of whether cases involving just compensation should first be appealed to the
DARAB before the landowner can resort to the SAC under Section 57 of R.A. No. 6657.
To resolve the conflict in the rulings of the Court, we now declare herein, for the guidance of the bench
and the bar, that the better rule is that stated in Philippine Veterans Bank, reiterated in Lubrica and in the
August 14, 2007 Decision in this case. Thus, while a petition for the fixing of just compensation with the
SAC is not an appeal from the agrarian reform adjudicator's decision but an original action, the same
has to be filed within the 15-day period stated in the DARAB Rules; otherwise, the adjudicator's
decision will attain finality. This rule is not only in accord with law and settled jurisprudence but also with
the principles of justice and equity. Verily, a belated petition before the SAC, e.g., one filed a month, or a
year, or even a decade after the land valuation of the DAR adjudicator, must not leave the dispossessed
landowner in a state of uncertainty as to the true value of his property. 46 (Emphasis supplied)
In all of the foregoing rulings of the Court as well as in subsequent ones, it could not have been
overemphasized that the determination of just compensation in eminent domain is a judicial function.
However, the more recent jurisprudence uphold the preeminence of the pronouncement in Philippine
Veterans Bank to the effect that the parties only have 15 days from their receipt of the decision/order of the
DAR within which to invoke the original and exclusive jurisdiction of the SAC; otherwise, the
decision/order attains finality and immutability.

It remains uncontested that the petitioner filed her complaint in the RTC for the determination of just
compensation after more than two and a half months had already elapsed from the time the DARAB issued
the assailed valuation. Following the pronouncement in Philippine Veterans Banks, her failure to file the
complaint within the prescribed 15-day period from notice would have surely rendered the DARAB's
valuation order final and executory. As such, it would seem that there was sufficient ground for the
dismissal of the petitioner's complaint for having been filed out of time.

However, we cannot fairly and properly hold that the petitioner's complaint for the determination of just
compensation should be barred from being tried and decided on that basis. The prevailing rule at the time
she filed her complaint on August 19, 1999 was that enunciated in Republic v. Court of Appeals on
October 30, 1996.47 The pronouncement in Philippine Veterans Bank was promulgated on January 18,
2000 when the trial was already in progress in the RTC, At any rate, it would only be eight years
afterwards that the Court en banc unanimously resolved the jurisprudential conundrum through its
declaration in Land Bank v. Martinez that the better rule was that enunciated in Philippine Veterans Bank,
The Court must, therefore, prospectively apply Philippine Veterans Bank. The effect is that the petitioner's
cause of action for the proper valuation of her expropriated property should be allowed to proceed. Hence,
her complaint to recover just compensation was properly brought in the RTC as the SAC, whose dismissal
of it upon the motion of Land Bank should be undone.

WHEREFORE, we GRANT the petition for review on certiorari, and REVERSE the decision of the
Court of Appeals dated November 22, 2002; and DIRECT the Regional Trial Court, Branch 30, in
Dumaguete City to resume the proceedings in Civil Case No. 12558 for the determination of just
compensation of petitioner Jocelyn S. Limkaichong's expropriated property.

No pronouncement on costs of suit.

SO ORDERED.chanroblesvirtuallawlibrary

G.R. No. 198800 December 11, 2013
JOSE T. RAMIREZ, Petitioner,
vs.
THE MANILA BANKING CORPORATION, Respondent.
DECISION
VILLARAMA, JR., J.:
We have consistently held that unless the parties stipulate, personal notice to the mortgagor in
extrajudicial foreclosure proceedings is not necessary because Section 3 1 of Act No. 31352 only requires
the posting of the notice of sale in three public places and the publication of that notice in a newspaper of
general circulation.3
Before us is a petition for review on certiorari under Rule 45 of the Decision 4 dated November 26, 2010
and Resolution5 dated September 28, 2011 of the Court of Appeals (CA) in CA-G.R. CV No. 80616.
The facts of the case are as follows:
Petitioner Jose T. Ramirez mortgaged two parcels of land located at Bayanbayanan, Marikina City and
covered by Transfer Certificate of Title (TCT) Nos. N-107226 and N-230337 in favor of respondent The
Manila Banking Corporation to secure his ₱265,000 loan. The real estate mortgage provides that all
correspondence relative to the mortgage including notifications of extrajudicial actions shall be sent to
petitioner Ramirez at his given address, to wit:
N) All correspondence relative to this MORTGAGE, including demand letters, summons, subpoenas or
notifications of any judicial or extrajudicial actions shall be sent to the MORTGAGOR at the address given
above or at the address that may hereafter be given in writing by the MORTGAGOR to the
MORTGAGEE, and the mere act of sending any correspondence by mail or by personal delivery to the
said address shall be valid and effective notice to the MORTGAGOR for all legal purposes and the fact
that any communication is not actually received by the MORTGAGOR, or that it has been returned
unclaimed to the MORTGAGEE, or that no person was found at the address given, or that the address is
fictitious or cannot be located, shall not excuse or relieve the MORTGAGOR from the effects of such
notice.8
Respondent filed a request for extrajudicial foreclosure of real estate mortgage9 before Atty. Hipolito
Sañez on the ground that Ramirez failed to pay his loan despite demands. During the auction sale on
September 8, 1994, respondent was the only bidder for the mortgaged properties. 10 Thereafter, a certificate
of sale11 was issued in its favor as the highest bidder.
In 2000, respondent demanded that Ramirez vacate the properties.12
Ramirez sued respondent for annulment of sale and prayed that the certificate of sale be annulled on the
ground, among others, that paragraph N of the real estate mortgage was violated for he was not notified of
the foreclosure and auction sale.13
In its answer, respondent claimed that the foreclosure proceedings were valid.
The trial court ruled that the extrajudicial foreclosure proceedings were null and void and the certificate of
sale is invalid. The fallo of the Decision14 dated June 30, 2003 of the Regional Trial Court, Branch 193,
Marikina City, in Civil Case No. 2001-701-MK reads:
Premises considered, judgment is hereby rendered in favor of the plaintiff [Ramirez] and against the
defendant [bank], whose counterclaim is hereby dismissed, declaring the Certificate of Sale of the
properties covered by TCT Nos. N-10722 and N-23033, as null and void and ordering the defendant [bank]
to pay the following:
1) One Hundred Thousand (₱100,000.00) Pesos as moral damages;
2) Fifty Thousand (₱50,000.00) Pesos as exemplary damages;
3) Fifty Thousand (₱50,000.00) Pesos as Attorney’s fees; and
4) Costs of suit.
SO ORDERED.15
The CA reversed the trial court’s decision and ruled that absence of personal notice of foreclosure to
Ramirez as required by paragraph N of the real estate mortgage is not a ground to set aside the foreclosure
sale.16 The fallo of the assailed CA Decision reads:
WHEREFORE, the appealed decision dated June 30, 2003 of the Regional Trial Court of Marikina,
Branch 193 is hereby REVERSED and SET ASIDE, and a new one is entered AFFIRMING the validity
of the Certificate of Sale of the properties covering TCT Nos. N-10722 and N-23033.
SO ORDERED.17
Ramirez’s motion for reconsideration was denied in the assailed CA Resolution.
Hence, this petition raising a lone issue:
What is the legal effect of violating paragraph N of the deed of mortgage which requires personal
notice to the petitioner-mortgagor by the respondent-mortgagee bank?18
Ramirez insists that the auction sale as well as the certificate of sale issued to respondent are null and void
since no notice of the foreclosure and sale by public auction was personally given to him in violation of
paragraph N of the real estate mortgage which requires personal notice to him of said extrajudicial
foreclosure.19
In its comment, respondent counters that under Section 3 of Act No. 3135, no personal notice to the
mortgagor is required in case of a foreclosure sale. The bank claims that paragraph N of the real estate
mortgage does not impose an additional obligation to it to provide personal notice to the mortgagor
Ramirez.20
We agree with Ramirez and grant his petition.
The CA erred in ruling that absence of notice of extrajudicial foreclosure sale to Ramirez as required by
paragraph N of the real estate mortgage will not invalidate the extrajudicial foreclosure sale. We rule that
when respondent failed to send the notice of extrajudicial foreclosure sale to Ramirez, it committed a
contractual breach of said paragraph N sufficient to render the extrajudicial foreclosure sale on September
8, 1994 null and void. Thus, we reverse the assailed CA Decision and Resolution.
In Carlos Lim, et al. v. Development Bank of the Philippines,21 we held that unless the parties stipulate,
personal notice to the mortgagor in extrajudicial foreclosure proceedings is not necessary because Section
3 of Act No. 3135 only requires the posting of the notice of sale in three public places and the publication
of that notice in a newspaper of general circulation. In this case, the parties stipulated in paragraph N of the
real estate mortgage that all correspondence relative to the mortgage including notifications of extrajudicial
actions shall be sent to mortgagor Ramirez at his given address. Respondent had no choice but to comply
with this contractual provision it has entered into with Ramirez. The contract is the law between them.
Hence, we cannot agree with the bank that paragraph N of the real estate mortgage does not impose an
additional obligation upon it to provide personal notice of the extrajudicial foreclosure sale to the
mortgagor Ramirez.
As we explained in Metropolitan Bank v. Wong, the bank’s violation of paragraph N of the real estate
22
We delete aforesaid monetary awards, except the award of costs of suit. Nothing supports the trial court’s
award of moral damages. There was no testimony of any physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar
injury26 suffered by Ramirez. The award of moral damages must be anchored on a clear showing that
Ramirez actually experienced mental anguish, besmirched reputation, sleepless nights, wounded feelings
or similar injury.27 Ramirez’s testimony28 is also wanting as to the moral damages he suffered.
Similarly, no exemplary damages can be awarded since there is no basis for the award of moral damages
and there is no award of temperate, liquidated or compensatory damages. 29 Exemplary damages are
imposed by way of example for the public good, in addition to moral, temperate, liquidated or
compensatory damages.30
We likewise delete the trial court’s award of attorney’s fees since the trial court failed to state in the body
of its decision the factual or legal reasons for said award. 31
Indeed, even the instant petition32 does not offer any supporting fact or argument for us to affirm the award
of moral and exemplary damages and attorney’s fees.

mortgage is sufficient to invalidate the extrajudicial foreclosure sale:

[A] contract is the law between the parties and … absent any showing that its provisions are wholly or in
part contrary to law, morals, good customs, public order, or public policy, it shall be enforced to the letter
by the courts. Section 3, Act No. 3135 reads:
"Sec. 3. Notice shall be given by posting notices of the sale for not less than twenty days in at least three
public places of the municipality or city where the property is situated, and if such property is worth more
than four hundred pesos, such notice shall also be published once a week for at least three consecutive
weeks in a newspaper of general circulation in the municipality and city."
The Act only requires (1) the posting of notices of sale in three public places, and (2) the publication of the
same in a newspaper of general circulation. Personal notice to the mortgagor is not
necessary. Nevertheless, the parties to the mortgage contract are not precluded from exacting additional
requirements. In this case, petitioner and respondent in entering into a contract of real estate mortgage,
agreed inter alia:
"all correspondence relative to this mortgage, including demand letters, summonses, subpoenas, or
notifications of any judicial or extra-judicial action shall be sent to the MORTGAGOR…."
However, we agree, with the trial court’s award of costs of suit to Ramirez. Costs shall be allowed to the
prevailing party as a matter of course unless otherwise provided in the Rules of Court. 33 These costs
Ramirez may recover are those stated in Section 10, Rule 142 of the Rules of Court. 34 For instance,
Ramirez may recover the lawful fees he paid in docketing his action for annulment of sale before the trial
court. We add thereto the amount of ₱3,530 or the amount of docket and lawful fees paid by Ramirez for
filing this petition before this Court.35 We deleted the award of moral and exemplary damages; hence, the
restriction under Section 7, Rule 142 of the Rules of Court 36 would have prevented Ramirez to recover any
cost of suit. But we certify, in accordance with said Section 7, that Ramirez’s action for annulment of sale
involved a substantial and important right such that he is entitled to an award of costs of suit. Needless to
stress, the purpose of paragraph N of the real estate mortgage is to apprise the mortgagor, Ramirez, of any
action that the mortgagee-bank might take on the subject properties, thus according him the opportunity to
safeguard his rights. 37
WHEREFORE, we GRANT the petition, REVERSE and SET ASIDE the Decision dated November 26,
2010 and Resolution dated September 28, 2011 of the Court of Appeals in CA-G.R. CV No. 80616. The
extrajudicial foreclosure proceedings and auction sale conducted by Atty. Hipolito Safiez on September 8,
1994 and the Certificate of Sale over the mortgaged properties covered by TCT Nos. N-10722 and N-
23033, issued in favor of respondent The Manila Banking Corporation, are hereby DECLARED NULL
and VOID.

Costs against respondent The Manila Banking Corporation.

Precisely, the purpose of the foregoing stipulation is to apprise respondent of any action which petitioner
might take on the subject property, thus according him the opportunity to safeguard his rights. When
petitioner failed to send the notice of foreclosure sale to respondent, he committed a contractual breach SO ORDERED.
sufficient to render the foreclosure sale on November 23, 1981 null and void.1âwphi1

We reiterated the Wong ruling in Global Holiday Ownership Corporation v. Metropolitan Bank and Trust
Company23and recently, in Carlos Lim, et al. v. Development Bank of the Philippines.24 Notably, all these
cases involved provisions similar to paragraph N of the real estate mortgage in this case.

On another matter, we note that the trial court awarded moral and exemplary damages, attorney’s fees and
costs of suit to Ramirez. In granting said monetary awards, the trial court noted that if the bank followed
strictly the procedure in the extrajudicial foreclosure of the real estate mortgage and had not filed
prematurely an unlawful detainer case against Ramirez, he would not have been forced to litigate and incur
expenses.25
 they insisted that their certificate of title, TCT No. T-41939, was already indefeasible, and cannot be
attacked collaterally.
G.R. No. 184045 January 22, 2014
Meanwhile, on March 16, 2005, Anita filed an ex-parte petition for the issuance of a writ of
possession17 (ex-parte petition) before the RTC, docketed as LRC Case No. TG-05-1068, claiming that the
SPOUSES NICASIO C. MARQUEZ AND ANITA J. MARQUEZ, Petitioners,
same is ministerial on the court’s part following the consolidation of her and her husband’s title over the
vs.
subject property. Impleaded in said petition are Sps. Gutierrez, including all persons claiming rights under
SPOUSES CARLITO ALINDOG AND CARMEN ALINDOG, Respondents.
them.

DECISION
The RTC Rulings and Subsequent Proceedings

PERLAS-BERNABE, J.:
In an Order18 dated August 1, 2005, the RTC granted Anita’s ex-parte petition and thereby directed the
issuance of a writ of possession in her favor. Consequently, a notice to vacate19 dated September 23, 2005
Assailed in this petition for review on certiorari1 are the Decision2 dated February 29, 2008 and was issued by Acting Sheriff Teodorico V. Cosare (Sheriff Cosare) against Sps. Gutierrez and all persons
Resolution3 dated August 6, 2008 of the Court of Appeals (CA) in CA-G.R. SP No. 97744 finding no grave claiming rights under them. Sps. Alindog were served with a copy of the said notice to vacate on
abuse of discretion on the part of the Regional Trial Court of Tagaytay City, Branch 18 (RTC) in issuing September 27, 2005.20
the Orders dated November 14, 20054and January 17, 2007[[5 ]] in SCA No. TG-05-2521. Based on these
orders, a writ of preliminary injunction was issued against petitioners-spouses Nicasio C. Marquez and
Claiming that they would suffer irreparable injury if the implementation of the writ of possession in favor
Anita J. Marquez (Sps. Marquez), enjoining them from taking possession of the property subject of this
of Sps. Marquez would be left unrestrained, Sps. Alindog sought the issuance of a temporary restraining
case despite the consolidation of their title over the same.
order (TRO) and/or writ of preliminary injunction with prayer for damages,21 in a separate case docketed as
SCA No. TG-05-252122(injunction case) which was raffled to the same court.
The Facts
While it appears that the RTC issued a 72-hour TRO on September 29, 2005 in Sps. Alindog’s favor,
Records show that sometime in June 1998, petitioner Anita J. Marquez (Anita) extended a loan in the records nonetheless show that said order was not extended to a full 20-day TRO.23 To this end, the
amount of ₱500,000.00 to a certain Benjamin Gutierrez (Gutierrez). As security therefor, Gutierrez Sheriff’s Return24 dated November 14, 2005 shows that Sheriff Cosare was able to implement the writ of
executed a Deed of Real Estate Mortgage6 dated June 16, 1998 over a parcel of land located in Tagaytay possession on November 11, 2005, turning over the possession of the subject property to Sps. Marquez.
City with an area of 660 square meters, more or less, covered by Transfer Certificate of Title (TCT) No. T-
134437 (subject property), registered under the name of Benjamin A. Gutierrez, married to Liwanag
After further proceedings on the injunction case, the RTC, through an Order25 dated November 14, 2005,
Camerin (Sps. Gutiererez). The mortgage was duly annotated on the dorsal portion of TCT No. T-13443,
issued a writ of preliminary injunction enjoining Sps. Marquez from taking possession of the subject
which Sps. Marquez had verified as clean prior to the mortgage. 8
property until after the controversy has been fully resolved on the merits. The said issuance was based on
the RTC’s appreciation of the initial evidence adduced by Sps. Alindog, concluding that they appear to
Since Gutierrez defaulted in the payment of his loan obligation, Anita sought the extra-judicial foreclosure have a right to be protected. Thus, notwithstanding the consolidation of Sps. Marquez’s title over the
of the subject property. At the public auction sale held on January 19, 2000, Anita emerged as the highest subject property, the RTC granted Sps. Alindog’s prayer for injunctive relief, holding that any further
bidder for the amount of ₱1,171,000.00.9 Upon Gutierrez’s failure to redeem the same property within the dispossession on their part would cause them irreparable injury. 26
prescribed period therefor, title was consolidated under TCT No. T-4193910 on November 5, 2001 (in the
name of Anita J. Marquez, married to Nicasio C. Marquez) which, however, bore an annotation of adverse
Aggrieved, Sps. Marquez moved for reconsideration,27 essentially pointing out that, as the confirmed and
claim11 dated March 2, 2000 in the names of respondents-spouses Carlito and Carmen Alindog (Sps.
registered owners of the subject property, they are entitled to its possession as a matter of right. They
Alindog). Said annotation was copied from an earlier annotation on TCT No. T-13443 made only after the
argued that pursuant to Sections 728 and 829 of Act No. 3135,30 as amended by Act No. 4118,31 the RTC
subject property’s mortgage to Sps. Marquez.
was legally bound to place them in possession of the subject property pending resolution of the annulment
case. Further, it is their position that the purpose for the issuance of the injunctive writ – i.e., to restrain the
Subsequently, or on March 21, 2000, Sps. Alindog filed a civil case for annulment of real estate mortgage implementation of the writ of possession – had already been rendered moot and academic by its actual
and certificate of sale with prayer for damages against Sps. Marquez and a certain Agripina Gonzales enforcement in the interim.
(Gonzales) before the RTC, docketed as Civil Case No. TG-1966 (annulment case). In their
complaint,12 Sps. Alindog alleged that they purchased13 the subject property from Gutierrez way back in
For their part, Sps. Alindog filed a Motion for Approval of Cash Bond and to Regain Possession32 of the
September 1989, but were unable to secure a certificate of title in their names because Gonzales – to whom
subject property.
they have entrusted said task – had deceived them in that they were assured that the said certificate was
already being processed when such was not the case.14Eventually, they found out that the property had
already been mortgaged to Sps. Marquez, and that when they tried to contact Gonzales for an explanation, In an Order33 dated January 17, 2007, the RTC denied the motion of Sps. Marquez, while granted that of
she could no longer be found. Separately, Sps. Alindog averred that when the mortgage was executed in Sps. Alindog. Unperturbed, Sps. Marquez elevated the case to the CA on certiorari. 34
favor of Sps. Marquez, Gutierrez was already dead.15
The CA Ruling
In their defense,16 Sps. Marquez disputed Sps. Alindog’s ownership over the subject property, arguing that
the purported sale in the latter’s favor was never registered and therefore, not binding upon them. Further,
In a Decision35 dated February 29, 2008, the CA denied Sps. Marquez’s petition as it found no grave abuse
of discretion on the RTC’s part when it issued the injunctive writ that enjoined Sps. Marquez from taking
possession of the subject property. It observed that Sps. Alindog had indeed "adduced prima facie proof of
their right to possess the subject property"36 while the annulment case was pending, adding that the latter’s
"right to remain in possession"37 proceeds from the fact of the subject property’s earlier sale to them. Thus,
while Sps. Marquez concededly had a right to possess the subject property on account of the consolidation
of the title in their names, the CA nonetheless found no fault on the part of the RTC for "proceeding with
caution"38 in weighing the conflicting claims of the parties and subsequently issuing the writ of preliminary
injunction in Sps. Alindog’s favor.
Dissatisfied, Sps. Marquez moved for reconsideration39 which was, however, denied in a
Resolution40 dated August 6, 2008, hence, this petition.
The Issue Before the Court
The essential issue in this case is whether or not the CA erred in finding no grave abuse of discretion on the
part of the RTC when it issued the injunctive writ which enjoined Sps. Marquez from taking possession of
the subject property.
The Court’s Ruling
The petition is meritorious.
It is an established rule that the purchaser in an extra-judicial foreclosure sale is entitled to the possession
of the property and can demand that he be placed in possession of the same either during (with bond) or
after the expiration (without bond) of the redemption period therefor. To this end, the Court, in China
Banking Corp. v. Sps. Lozada41 (China Banking Corp.), citing several cases on the matter, explained that a
writ of possession duly applied for by said purchaser should issue as a matter of course, and thus, merely
constitutes a ministerial duty on the part of the court, viz.:42
The procedure for extrajudicial foreclosure of real estate mortgage is governed by Act No. 3135, as
amended. The purchaser at the public auction sale of an extrajudicially foreclosed real property may seek
possession thereof in accordance with Section 7 of Act No. 3135, as amended, which provides:
SEC. 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of First
Instance of the province or place where the property or any part thereof is situated, to give him possession
thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property
for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without
violating the mortgage or without complying with the requirements of this Act. Such petition shall be made
under oath and filed in form or an ex parte motion in the registration or cadastral proceedings if the
property is registered, or in special proceedings in the case of property registered under the Mortgage Law
or under section one hundred and ninety-four of the Administrative Code, or of any other real property
encumbered with a mortgage duly registered in the office of any register of deeds in accordance with any
existing law, and in each case the clerk of court shall, upon the filing of such petition, collect the fees
specified in paragraph eleven of section one hundred and fourteen of Act Numbered Four hundred and
ninety six as amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon
approval of the bond, order that a writ of possession issue addressed to the sheriff of the province in which
the property is situated, who shall execute said order immediately.
The Court expounded on the application of the foregoing provision in De Gracia v. San Jose, thus:
As may be seen, the law expressly authorizes the purchaser to petition for a writ of possession during the
redemption period by filing an ex parte motion under oath for that purpose in the corresponding
registration or cadastral proceeding in the case of property with Torrens title; and upon the filing of such
motion and the approval of the corresponding bond, the law also in express terms directs the court to issue
the order for a writ of possession. Under the legal provisions above copied, the order for a writ of
possession issues as a matter of course upon the filing of the proper motion and the approval of the
corresponding bond. No discretion is left to the court. And any question regarding the regularity and
validity of the sale (and the consequent cancellation of the writ) is left to be determined in a subsequent
proceeding as outlined in section 8. Such question is not to be raised as a justification for opposing the
issuance of the writ of possession, since, under the Act, the proceeding for this is ex parte.
Strictly, Section 7 of Act No. 3135, as amended, refers to a situation wherein the purchaser seeks
possession of the foreclosed property during the 12-month period for redemption. Upon the purchaser’s
filing of the ex parte petition and posting of the appropriate bond, the RTC shall, as a matter of course,
order the issuance of the writ of possession in the purchaser’s favor.
In IFC Service Leasing and Acceptance Corporation v. Nera, the Court reasoned that if under Section 7 of
Act No. 3135, as amended, the RTC has the power during the period of redemption to issue a writ of
possession on the ex parte application of the purchaser, there is no reason why it should not also have the
same power after the expiration of the redemption period, especially where a new title has already been
issued in the name of the purchaser. Hence, the procedure under Section 7 of Act No. 3135, as amended,
may be availed of by a purchaser seeking possession of the foreclosed property he bought at the public
auction sale after the redemption period has expired without redemption having been made.
xxxx
It is thus settled that the buyer in a foreclosure sale becomes the absolute owner of the property purchased
if it is not redeemed during the period of one year after the registration of the sale. As such, he is entitled to
the possession of the said property and can demand it at any time following the consolidation of ownership
in his name and the issuance to him of a new transfer certificate of title. The buyer can in fact demand
possession of the land even during the redemption period except that he has to post a bond in accordance
with Section 7 of Act No. 3135, as amended. No such bond is required after the redemption period if the
property is not redeemed. Possession of the land then becomes an absolute right of the purchaser as
confirmed owner. Upon proper application and proof of title, the issuance of the writ of possession
becomes a ministerial duty of the court. (Emphases and underscoring supplied; citations and emphases in
the original omitted)
In the case of Spouses Espiridion v. CA,43 the Court expounded on the ministerial nature of the foregoing
issuance as follows:44
The issuance of a writ of possession to a purchaser in a public auction is a ministerial act.1âwphi1 After
the consolidation of title in the buyer’s name for failure of the mortgagor to redeem the property, the writ
of possession becomes a matter of right. Its issuance to a purchaser in an extrajudicial foreclosure sale is
merely a ministerial function. The trial court has no discretion on this matter. Hence, any talk of discretion
in connection with such issuance is misplaced.
A clear line demarcates a discretionary act from a ministerial one. Thus:
The distinction between a ministerial and discretionary act is well delineated. A purely ministerial act or
duty is one which an officer or tribunal performs in a given state of facts, in a prescribed manner, in
obedience to the mandate of a legal authority, without regard to or the exercise of his own judgment upon
the propriety or impropriety of the act done. If the law imposes a duty upon a public officer and gives him
the right to decide how or when the duty shall be performed, such duty is discretionary and not ministerial.
The duty is ministerial only when the discharge of the same requires neither the exercise of official Sps. Marquez. It must, however, be noted that these pronouncements are without prejudice to any separate
discretion or judgment. action which Sps. Alindog may file in order to recover ownership of the subject property.

Clearly, the use of discretion and the performance of a ministerial act are mutually exclusive. (Emphases WHEREFORE, the petition is GRANTED. The Decision dated February 29, 2008 and Resolution dated
and underscoring supplied; citations omitted) August 6, 2008 of the Court of Appeals in CA-G.R. SP No. 97744, as well as the Orders dated November
14, 2005 and January 17, 2007 of the Regional Trial Court of Tagaytay City, Branch 18 in SCA No. TG-
05-2521 are hereby REVERSED and SET ASIDE. Accordingly, the writ of preliminary injunction in SCA
The ministerial issuance of a writ of possession in favor of the purchaser in an extra-judicial foreclosure
No. TG-05-2521 is NULLIFIED, while the Writ of Possession in LRC Case No. TG-05-1068 is
sale, however, admits of an exception. Section 33,45 Rule 39 of the Rules of Court (Rules) pertinently
REINSTATED.
provides that the possession of the mortgaged property may be awarded to a purchaser in an extra-judicial
foreclosure unless a third party is actually holding the property by adverse title or right. In the recent case
of Rural Bank of Sta. Barbara (Iloilo), Inc. v. Centeno,46 citing the case of China Banking Corp., the Court SO ORDERED.
illumined that "the phrase ‘a third party who is actually holding the property adversely to the judgment
obligor’ contemplates a situation in which a third party holds the property by adverse title or right, such as
that of a co-owner, tenant or usufructuary. The co-owner, agricultural tenant, and usufructuary possess the
property in their own right, and they are not merely the successor or transferee of the right of possession of
another co-owner or the owner of the property. Notably, the property should not only be possessed by a
third party, but also held by the third party adversely to the judgment obligor."47 In other words, as
mentioned in Villanueva v. Cherdan Lending Investors Corporation, 48 the third person must therefore claim
a right superior to that of the original mortgagor.

In this case, it is clear that the issuance of a writ of possession in favor of Sps. Marquez, who had already
consolidated their title over the extra-judicially foreclosed property, is merely ministerial in nature. The
general rule as herein stated – and not the exception found under Section 33, Rule 39 of the Rules – should
apply since Sps. Alindog hinged their claim over the subject property on their purported purchase of the
same from its previous owner, i.e., Sps. Gutierrez (with Gutierrez being the original mortgagor).
Accordingly, it cannot be seriously doubted that Sps. Alindog are only the latter’s (Sps. Gutierrez)
successors-in-interest who do not have a right superior to them.

That said, the RTC therefore gravely abused its discretion when it issued the injunctive writ which
enjoined Sps. Marquez from taking possession of the subject property. To be sure, grave abuse of
discretion arises when a lower court or tribunal patently violates the Constitution, the law or existing
jurisprudence.49 Here, while the RTC had initially issued a writ of possession in favor of Sps. Marquez, it
defied existing jurisprudence when it effectively rescinded the said writ by subsequently granting Sps.
Alindog's prayer for injunctive relief. The RTC's finding anent the initial evidence adduced by Sps.
Alindog constitutes improper basis to justify the issuance of the writ of preliminary injunction in their
favor since, in the first place, it had no authority to exercise any discretion in this respect. Jurisprudence is
clear on the matter: without the exception under Section 33, Rule 39 of the Rules availing, the issuance of a
writ of possession in favor of the purchaser of an extra-judicially foreclosed property - such as Sps.

Marquez in this case - should come as a matter of course, and, in such regard, constitutes only a ministerial
duty on the part of the court. Besides, it was improper for the RTC to have issued a writ of preliminary
injunction since the act sought to be enjoined, i.e., the implementation of the writ of possession, had
already been accomplished in the interim and thus, rendered the matter moot. Case law instructs that
injunction would not lie where the acts sought to be enjoined had already become fait accompli (meaning,
an accomplished or consummated act).50 Hence, since the consummation of the act sought to be restrained
had rendered Sps. Alindog's injunction petition moot, the issuance of the said injunctive writ was
altogether improper.

All told, by acting averse to well-settled jurisprudential rules and resultantly depriving Sps. Marquez of
their right of possession over the subject property, the Court therefore concludes that the RTC gravely
abused its discretion in this case. In effect, the CA's contrary ruling thereto is hereby reversed and set aside,
which consequentially leads to the nullification of the writ of preliminary injunction issued by the RTC in
favor of Sps. Alindog, and the reinstatement of the writ of possession issued by the same court in favor of

G.R. No. 187973 January 20, 2014
LZK HOLDINGS and DEVELOPMENT CORPORATION, Petitioner,
vs.
PLANTERS DEVELOPMENT BANK, Respondent.
RESOLUTION
REYES, J.:
This resolves the appeal filed by petitioner LZK Holdings and Development Corporation (LZK Holdings)
assailing the Decision1 dated January 27, 2009 of the Court of Appeals (CA) in CA-G.R. S.P. No. 103267
affirming the Order2dated April 8, 2008 of the Regional Trial Court (RTC) of San Fernando City (San
Fernando), La Union, Branch 66, which issued a writ of possession in favor of respondent Planters
Development Bank (Planters Bank).
The facts are not disputed.
LZK Holdings obtained a ₱40,000,000.00 loan from Planters Bank on December 16, 1996 and secured the
same with a Real Estate Mortgage over its lot located in La Union. The lot measures 589 square meters and
is covered by Transfer Certificate of Title No. T-45337.
On September 21, 1998, the lot was sold at a public auction after Planters Bank extrajudicially foreclosed
the real estate mortgage thereon due to LZK Holdings' failure to pay its loan. Planters Bank emerged as the
highest bidder during the auction sale and its certificate of sale was registered on March 16, 1999.
On April 5, 1999, LZK Holdings filed before the RTC of Makati City, Branch 150, a complaint for
annulment of extra judicial foreclosure, mortgage contract, promissory note and damages. LZK Holdings
also prayed for the issuance of a temporary restraining order (TRO) or writ of preliminary injunction to
enjoin the consolidation of title over the lot by Planters Bank.
On December 27, 1999, Planters Bank filed an ex-parte motion for the issuance of a writ of possession
with the RTC-San Fernando.
On March 13, 2000 or three (3) days before the expiration of LZK Holdings' redemption period, the RTC-
Makati issued a TRO effective for 20 days enjoining Planters Bank from consolidating its title over the
property. On April 3, 2000, the RTC-Makati ordered the issuance of a writ of preliminary injunction for
the same purpose3 but the writ was issued only on June 20, 2000 upon LZK Holdings' posting of a
₱40,000.00 bond.
In the meantime, Planters Bank succeeded in consolidating its ownership over the property on April 24,
2000. However, the proceedings for its ex-parte motion for the issuance of a writ of possession was
suspended by the RTC-San Fernando in an Order dated May 11, 2000 in view of the TRO and writ of
preliminary injunction issued by the RTC-Makati. Planters Bank moved for reconsideration but its motion
was denied by the RTC-San Fernando in an Order dated September 1, 2000.4
Meanwhile, upon motion of LZK Holdings, the RTC-Makati declared as null and void the consolidated
title of Planters Bank in an Order5 dated June 2, 2000. Such ruling was affirmed by the CA in a
Decision6 dated February 26, 2004 in CA-G.R. SP No. 59327. When the matter reached the Court via G.R.
No. 164563, we sustained the CA's judgment in our Resolution7 dated September 13, 2004.
Planters Bank also appealed the May 11, 2000 Order of the RTC-San Fernando which held in abeyance the
resolution of its ex parte motion for the issuance of a writ of possession. This time, Planters Bank was
victorious. The CA granted the appeal and annulled the assailed order of the RTC-San Fernando.
Aggrieved, LZK Holdings sought recourse with the Court in a petition for review docketed as G.R. No.
167998.8 In Our Decision dated April 27, 2007, we affirmed the CA's ruling and decreed that Planters
Bank may apply for and is entitled to a writ of possession as the purchaser of the property in the
foreclosure sale, viz:
"A writ of possession is a writ of execution employed to enforce a judgment to recover the possession of
land. It commands the sheriff to enter the land and give possession of it to the person entitled under the
judgment. It may be issued in case of an extrajudicial foreclosure of a real estate mortgage under Section 7
of Act No. 3135, as amended by Act No. 4118.
Under said provision, the writ of possession may be issued to the purchaser in a foreclosure sale either
within the one-year redemption period upon the filing of a bond, or after the lapse of the redemption
period, without need of a bond.
We have consistently held that the duty of the trial court to grant a writ of possession is ministerial. Such
writ issues as a matter of course upon the filing of the proper motion and the approval of the corresponding
bond. No discretion is left to the trial court. Any question regarding the regularity and validity of the sale,
as well as the consequent cancellation of the writ, is to be determined in a subsequent proceeding as
outlined in Section 8 of Act No. 3135. Such question cannot be raised to oppose the issuance of the writ,
since the proceeding is ex parte. The recourse is available even before the expiration of the redemption
period provided by law and the Rules of Court.
To emphasize the writ's ministerial character, we have in previous cases disallowed injunction to prohibit
its issuance, just as we have held that issuance of the same may not be stayed by a pending action for
annulment of mortgage or the foreclosure itself.
xxxx
x x x [Planters Bank], as the purchaser in the foreclosure sale, may apply for a writ of possession during
the redemption period. In fact, it did apply for a writ on December 27, 1999, well within the redemption
period. The San Fernando RTC, given its ministerial duty to issue the writ, therefore, should have acted on
the ex parte petition. The injunction order is of no moment because it should be understood to have merely
stayed the consolidation of title. As previously stated, an injunction is not allowed to prohibit the issuance
of a writ of possession. Neither does the pending case for annulment of foreclosure sale, mortgage contract,
promissory notes and damages stay the issuance of said writ.
Lastly, the trial on the merits has not even started. Until the foreclosure sale of the property in question is
annulled by a court of competent jurisdiction, petitioner is bereft of valid title and of the right to prevent
the issuance of a writ of possession to [Planters Bank]. Until then, it is the trial court's ministerial function
to grant the possessory writ to [Planters Bank]. "9 (Citations omitted)
Armed with the above ruling, Planters Bank filed before the RTC-San Fernando a motion to set ex-parte
hearing for the issuance of a writ of possession. LZK Holdings opposed the motion. In an Order dated
April 2, 2008, the RTC-San Fernando denied the opposition and set the hearing on April 14, 2008. On
April 8, 2008, the RTC-San Fernando issued another Order10 declaring the scheduled hearing moot and
academic and granting Planter Bank's ex-parte motion for the issuance of a writ of possession which was
filed as early as December 27, 1999. The decretal portion of the order reads:
WHEREFORE, premises considered, the pet1t10n is hereby granted, hence the order setting the case for
ex-parte hearing on April 14, 2008 is rendered moot and academic by this order. Let [a] Writ of Possession
issue in favor of Planters Development Bank and the Deputy Sheriff of this Court is hereby directed to
place Planters Development Bank or any of its authorized representatives in possession of the subject
parcel of land, together with all the improvements existing thereon, covered by TCT- 45337 of the Register
of Deeds for the province of La Union against LZK HOLDINGS AND DEVELOPMENT
CORPORATION (referred to as LZK) including all other persons/occupants who are claiming rights under
them and who are depriving [Planters Bank] of its right to possess the above-described property upon the
filing of bond by (Planters Bank] in the amount of two million pesos (Php2,000,000.00).
SO ORDERED.11
In its herein assailed Decision12 dated January 27, 2009, the CA affirmed the foregoing ruling and
dismissed LZK Holdings' petition for certiorari docketed as CA-G.R. SP No. 103267. The CA likewise
denied LZK Holdings' motion for reconsideration in its Resolution13 dated May 12, 2009.
LZK Holdings then filed a motion before the Court for a 30-day extension within which to file a petition
for review reckoned from the date of its receipt of the resolution granting such extension. In our Resolution
dated July 15, 2009 we granted the motion but we ordered that the 30-day extended period shall be counted
from the expiration of the original reglementary period.14 As such, LZK Holdings had until July 23, 2009
to file its petition and not August 24, 2009 or the date when the petition was actually filed.
In our Resolution dated August 26, 2009, we denied the petition for being filed beyond the extended period
pursuant to Section 5(a), Rule 56 of the Rules of Court and for lack of reversible error in the assailed
judgment of the CA.15LZK Holdings moved for reconsideration16 explaining that it was able to obtain a
copy of the Court's July 15, 2009 Resolution on July 29, 2009 when Lourdes Z. Korshak, LZK Holdings'
Chief Executive Officer, went to the Office of the Clerk of Court of the Third Division and that she still
had to confront and get the case records from the company's previous counsel and then look for a substitute
lawyer. LZK Holdings also claimed that the writ of possession issued to Planters Bank should be annulled
for the following reasons, to wit:
(a) with the cancellation of Planters Bank's consolidated title, LZK Holdings remain to be the
registered owner of the property and as such, the former had no right to apply for a writ of
possession pursuant to PNB v. Sanao Marketing Corporation, 17 which held that right of
possession is based on the ownership of the subject property by the applicant;
(b) LZK Holdings was deprived of due process because the RTC did not conduct a hearing on
Planter Bank's motion for the issuance of a writ of possession;
(c) the P.2,000,000.00 bond posted by LZK Holdings does not conform with Section 7 of Act
No. 3135 which mandates that the bond amount shall be equivalent to "twelve (12) months use
of the subject property" which in this case amounted to P.7,801,4 72.28 at the time the writ was
issued.
In a Resolution18 dated October 13, 2010 the Court took a liberal stance on the late filing of LZK Holdings'
petition for review. Accordingly, its motion for reconsideration was granted and the petition for review
reinstated.
However, after a re-examination of the substantive merits of the petition, the Court finds and stands by its
initial determination that the CA committed no reversible error in affirming the issuance of a writ of
possession by the R TC in favor of Planters Bank.
Under the principle of conclusiveness of judgment, the right of Planter's Bank to a writ of possession as
adjudged in G.R. No. 167998 is binding and conclusive on the parties.
The doctrine of res judicata by conclusiveness of judgment postulates that "when a right or fact has been
judicially tried and determined by a court of competent jurisdiction, or when an opportunity for such trial
has been given, the judgment of the court, as long as it remains unreversed, should be conclusive upon the
parties and those in privity with them."19
All the elements of the doctrine are present in this case. The final judgment in G.R. No. 167998 was
rendered by the Court pursuant to its jurisdiction over the review of decisions and rulings of the CA. It was
a judgment on the merits of Planters Banks's right to apply for and be issued a writ of possession. Lastly,
the parties in G.R. No. 167998 are the same parties involved in the present case.20
Hence, LZK Holdings can no longer question Planter Bank's right to a writ of possession over the subject
property because the doctrine of conclusiveness of judgment bars the relitigation of such particular issue.
Moreover, the authority relied upon by LZK Holdings defeats rather than support its position. The ruling in
PNB21echoes the very same rationale of the judgment in G.R. No. 167998 that is - the purchaser in
foreclosure sale may take possession of the property even before the expiration of the redemption period
by filing an ex parte motion for such purpose and upon posting of the necessary bond. 22
The pronouncement in PNB that right of possession is based on the ownership of the subject property by
the applicant pertains to applications for writ of possession after the expiration of the redemption period, a
situation not contemplated within the facts of the present case.
We cannot also uphold the contentions of LZK Holdings that the RTC, in issuing the writ of possession,
transgressed Act No. 3135.23
No hearing is required prior to the issuance of a writ of possession. This is clear from the following
disquisitions in Espinoza v. United Overseas Bank Phils.24 which reiterates the settled rules on writs of
possession, to wit:
The proceeding in a petition for a writ of possession is ex parte and summary in nature.1âwphi1 It is a
judicial proceeding brought for the benefit of one party only and without notice by the court to any person
adverse of interest. It is a proceeding wherein relief is granted without giving the person against whom the
relief is sought an opportunity to be heard.
By its very nature, an ex parte petition for issuance of a writ of possession is a non-litigious proceeding. It
is a judicial proceeding for the enforcement of one's right of possession as purchaser in a foreclosure sale.
It is not an ordinary suit filed in court, by which one party sues another for the enforcement of a wrong or
protection of a right, or the prevention or redress of a wrong. 25 (Citations omitted)
Given the ex-parte nature of the proceedings for a writ of possession, the R TC did not err in cancelling the
previously scheduled hearing and in granting Planters Bank's motion without affording notice to LZK
Holdings or allowing it to participate.
Anent the correct amount of surety bond, it is well to emphasize that our task in an appeal by petition for
review on certiorari is limited, as a jurisdictional matter, to reviewing errors of law that might have been
committed by the CA.26The allegations of incorrect computation of the surety bond involve factual matters
within the competence of the trial court to address as this Court is not a trier of facts. The RTC found the
amount of ₱2,000,000.00 to be sufficiently equivalent to the use of the property for a period of twelve (12)
months. We are bound by such factual finding especially considering the affirmation accorded it by the
CA.

In fine, the decision of the CA is in accordance with the law and jurisprudence on the matter. It correctly
sustained the Order of the RTC in issuing a writ of possession in favor of Planters Bank.

WHEREFORE, premises considered, the petition is hereby DENIED. The Decision dated January 27, 2009
of the Court of Appeals in CA-G.R. S.P. No. 103267 is AFFIRMED.

SO ORDERED.

G.R. No. 195540 March 13, 2013
GOLDENWAY MERCHANDISING CORPORATION, Petitioner,
vs.
EQUITABLE PCI BANK, Respondent.
DECISION
VILLARAMA, JR., J.:
Before the Court is a petition for review on certiorari which seeks to reverse and set aside the
Decision1 dated November 19, 2010 and Resolution2 dated January 31, 2011 of the Court of Appeals (CA)
in CA-G.R. CV No. 91120. The CA affirmed the Decision3 dated January 8, 2007 of the Regional Trial
Court (RTC) of- Valenzuela City, Branch 171 dismissing the complaint in Civil Case No. 295-V -01.
The facts are undisputed.
On November 29, 1985, Goldenway Merchandising Corporation (petitioner) executed a Real Estate
Mortgage in favor of Equitable PCI Bank (respondent) over its real properties situated in Valenzuela,
Bulacan (now Valenzuela City) and covered by Transfer Certificate of Title (TCT) Nos. T-152630, T-
151655 and T-214528 of the Registry of Deeds for the Province of Bulacan. The mortgage secured the
Two Million Pesos (₱2,000,000.00) loan granted by respondent to petitioner and was duly registered.4
As petitioner failed to settle its loan obligation, respondent extrajudicially foreclosed the mortgage on
December 13, 2000. During the public auction, the mortgaged properties were sold for ₱3,500,000.00 to
respondent. Accordingly, a Certificate of Sale was issued to respondent on January 26, 2001. On February
16, 2001, the Certificate of Sale was registered and inscribed on TCT Nos. T-152630, T-151655 and T-
214528.5
In a letter dated March 8, 2001, petitioner’s counsel offered to redeem the foreclosed properties by
tendering a check in the amount of ₱3,500,000.00. On March 12, 2001, petitioner’s counsel met with
respondent’s counsel reiterating petitioner’s intention to exercise the right of redemption. 6 However,
petitioner was told that such redemption is no longer possible because the certificate of sale had already
been registered. Petitioner also verified with the Registry of Deeds that title to the foreclosed properties
had already been consolidated in favor of respondent and that new certificates of title were issued in the
name of respondent on March 9, 2001.
On December 7, 2001, petitioner filed a complaint7 for specific performance and damages against the
respondent, asserting that it is the one-year period of redemption under Act No. 3135 which should apply
and not the shorter redemption period provided in Republic Act (R.A.) No. 8791. Petitioner argued that
applying Section 47 of R.A. 8791 to the real estate mortgage executed in 1985 would result in the
impairment of obligation of contracts and violation of the equal protection clause under the Constitution.
Additionally, petitioner faulted the respondent for allegedly failing to furnish it and the Office of the Clerk
of Court, RTC of Valenzuela City with a Statement of Account as directed in the Certificate of Sale, due to
which petitioner was not apprised of the assessment and fees incurred by respondent, thus depriving
petitioner of the opportunity to exercise its right of redemption prior to the registration of the certificate of
sale.
In its Answer with Counterclaim,8 respondent pointed out that petitioner cannot claim that it was unaware
of the redemption price which is clearly provided in Section 47 of R.A. No. 8791, and that petitioner had
all the opportune time to redeem the foreclosed properties from the time it received the letter of demand
and the notice of sale before the registration of the certificate of sale. As to the check payment tendered by
petitioner, respondent said that even assuming arguendo such redemption was timely made, it was not for
the amount as required by law.
On January 8, 2007, the trial court rendered its decision dismissing the complaint as well as the
counterclaim. It noted that the issue of constitutionality of Sec. 47 of R.A. No. 8791 was never raised by
the petitioner during the pre-trial and the trial. Aside from the fact that petitioner’s attempt to redeem was
already late, there was no valid redemption made because Atty. Judy Ann Abat-Vera who talked to Atty.
Joseph E. Mabilog of the Legal Division of respondent bank, was not properly authorized by petitioner’s
Board of Directors to transact for and in its behalf; it was only a certain Chan Guan Pue, the alleged
President of petitioner corporation, who gave instruction to Atty. Abat-Vera to redeem the foreclosed
properties.9
Aggrieved, petitioner appealed to the CA which affirmed the trial court’s decision. According to the CA,
petitioner failed to justify why Section 47 of R.A. No. 8791 should be declared unconstitutional.
Furthermore, the appellate court concluded that a reading of Section 47 plainly reveals the intention to
shorten the period of redemption for juridical persons and that the foreclosure of the mortgaged properties
in this case when R.A. No. 8791 was already in effect clearly falls within the purview of the said
provision.10
Petitioner’s motion for reconsideration was likewise denied by the CA.
In the present petition, it is contended that Section 47 of R.A. No. 8791 is inapplicable considering that the
contracting parties expressly and categorically agreed that the foreclosure of the real estate mortgage shall
be in accordance with Act No. 3135. Citing Co v. Philippine National Bank11 petitioner contended that the
right of redemption is part and parcel of the Deed of Real Estate Mortgage itself and attaches thereto upon
its execution, a vested right flowing out of and made dependent upon the law governing the contract of
mortgage and not on the mortgagee’s act of extrajudicially foreclosing the mortgaged properties. This
Court thus held in said case that "Under the terms of the mortgage contract, the terms and conditions under
which redemption may be exercised are deemed part and parcel thereof whether the same be merely
conventional or imposed by law."
Petitioner then argues that applying Section 47 of R.A. No. 8791 to the present case would be a substantial
impairment of its vested right of redemption under the real estate mortgage contract. Such impairment
would be violative of the constitutional proscription against impairment of obligations of contract, a patent
derogation of petitioner’s vested right and clearly changes the intention of the contracting parties.
Moreover, citing this Court’s ruling in Rural Bank of Davao City, Inc. v. Court of Appeals12 where it was
held that "Section 119 prevails over statutes which provide for a shorter period of redemption in
extrajudicial foreclosure sales", and in Sulit
v. Court of Appeals,13 petitioner stresses that it has always been the policy of this Court to aid rather than
defeat the mortgagor’s right to redeem his property.
Petitioner further argues that since R.A. No. 8791 does not provide for its retroactive application, courts
therefore cannot retroactively apply its provisions to contracts executed and consummated before its
effectivity. Also, since R.A. 8791 is a general law pertaining to the banking industry while Act No. 3135 is
a special law specifically governing real estate mortgage and foreclosure, under the rules of statutory
construction that in case of conflict a special law prevails over a general law regardless of the dates of
enactment of both laws, Act No. 3135 clearly should prevail on the redemption period to be applied in this
case.
The constitutional issue having been squarely raised in the pleadings filed in the trial and appellate courts,
we shall proceed to resolve the same.
The law governing cases of extrajudicial foreclosure of mortgage is Act No. 3135, 14 as amended by Act
No. 4118. Section 6 thereof provides:
SEC. 6. In all cases in which an extrajudicial sale is made under the special power hereinbefore referred to,
the debtor, his successors-in-interest or any judicial creditor or judgment creditor of said debtor, or any
person having a lien on the property subsequent to the mortgage or deed of
trust under which the property is sold, may redeem the same at any time within the term of one year from
and after the date of the sale; and such redemption shall be governed by the provisions of sections four
hundred and sixty-four to four hundred and sixty-six, inclusive, of the Code of
Civil Procedure,15 in so far as these are not inconsistent with the provisions of this Act.
The one-year period of redemption is counted from the date of the registration of the certificate of sale. In
this case, the parties provided in their real estate mortgage contract that upon petitioner’s default and the
latter’s entire loan obligation becoming due, respondent may immediately foreclose the mortgage judicially
in accordance with the Rules of Court, or extrajudicially in accordance with Act No. 3135, as amended.
However, Section 47 of R.A. No. 8791 otherwise known as "The General Banking Law of 2000" which
took effect on June 13, 2000, amended Act No. 3135. Said provision reads:
SECTION 47. Foreclosure of Real Estate Mortgage. — In the event of foreclosure, whether judicially or
extrajudicially, of any mortgage on real estate which is security for any loan or other credit accommodation
granted, the mortgagor or debtor whose real property has been sold for the full or partial payment of his
obligation shall have the right within one year after the sale of the real estate, to redeem the property by
paying the amount due under the mortgage deed, with interest thereon at the rate specified in the mortgage,
and all the costs and expenses incurred by the bank or institution from the sale and custody of said property
less the income derived therefrom. However, the purchaser at the auction sale concerned whether in a
judicial or extrajudicial foreclosure shall have the right to enter upon and take possession of such property
immediately after the date of the confirmation of the auction sale and administer the same in accordance
with law. Any petition in court to enjoin or restrain the conduct of foreclosure proceedings instituted
pursuant to this provision shall be given due course only upon the filing by the petitioner of a bond in an
amount fixed by the court conditioned that he will pay all the damages which the bank may suffer by the
enjoining or the restraint of the foreclosure proceeding.
Notwithstanding Act 3135, juridical persons whose property is being sold pursuant to an extrajudicial
foreclosure, shall have the right to redeem the property in accordance with this provision until, but not
after, the registration of the certificate of foreclosure sale with the applicable Register of Deeds which in
no case shall be more than three (3) months after foreclosure, whichever is earlier. Owners of property that
has been sold in a foreclosure sale prior to the effectivity of this Act shall retain their redemption rights
until their expiration. (Emphasis supplied.)
Under the new law, an exception is thus made in the case of juridical persons which are allowed to exercise
the right of redemption only "until, but not after, the registration of the certificate of foreclosure sale" and
in no case more than three (3) months after foreclosure, whichever comes first.16
May the foregoing amendment be validly applied in this case when the real estate mortgage contract was
executed in 1985 and the mortgage foreclosed when R.A. No. 8791 was already in effect?
We answer in the affirmative.
When confronted with a constitutional question, it is elementary that every court must approach it with
grave care and considerable caution bearing in mind that every statute is presumed valid and every
reasonable doubt should be resolved in favor of its constitutionality. 17 For a law to be nullified, it must be
shown that there is a clear and unequivocal breach of the Constitution. The ground for nullity must be clear
and beyond reasonable doubt.18Indeed, those who petition this Court to declare a law, or parts thereof,
unconstitutional must clearly establish the basis therefor. Otherwise, the petition must fail. 19
Petitioner’s contention that Section 47 of R.A. 8791 violates the constitutional proscription against
impairment of the obligation of contract has no basis.
The purpose of the non-impairment clause of the Constitution20 is to safeguard the integrity of contracts
against unwarranted interference by the State. As a rule, contracts should not be tampered with by
subsequent laws that would change or modify the rights and obligations of the parties.21 Impairment is
anything that diminishes the efficacy of the contract. There is an impairment if a subsequent law changes
the terms of a contract between the parties, imposes new conditions, dispenses with those agreed upon or
withdraws remedies for the enforcement of the rights of the parties. 22
Section 47 did not divest juridical persons of the right to redeem their foreclosed properties but only
modified the time for the exercise of such right by reducing the one-year period originally provided in Act
No. 3135. The new redemption period commences from the date of foreclosure sale, and expires upon
registration of the certificate of sale or three months after foreclosure, whichever is earlier. There is
likewise no retroactive application of the new redemption period because Section 47 exempts from its
operation those properties foreclosed prior to its effectivity and whose owners shall retain their redemption
rights under Act No. 3135.
Petitioner’s claim that Section 47 infringes the equal protection clause as it discriminates
mortgagors/property owners who are juridical persons is equally bereft of merit.
The equal protection clause is directed principally against undue favor and individual or class
privilege.1âwphi1 It is not intended to prohibit legislation which is limited to the object to which it is
directed or by the territory in which it is to operate. It does not require absolute equality, but merely that all
persons be treated alike under like conditions both as to privileges conferred and liabilities
imposed.23 Equal protection permits of reasonable classification.24 We have ruled that one class may be
treated differently from another where the groupings are based on reasonable and real distinctions. 25 If
classification is germane to the purpose of the law, concerns all members of the class, and applies equally
to present and future conditions, the classification does not violate the equal protection guarantee. 26
We agree with the CA that the legislature clearly intended to shorten the period of redemption for juridical
persons whose properties were foreclosed and sold in accordance with the provisions of Act No. 3135. 27
The difference in the treatment of juridical persons and natural persons was based on the nature of the
properties foreclosed – whether these are used as residence, for which the more liberal one-year
redemption period is retained, or used for industrial or commercial purposes, in which case a shorter term
is deemed necessary to reduce the period of uncertainty in the ownership of property and enable
mortgagee-banks to dispose sooner of these acquired assets. It must be underscored that the General
Banking Law of 2000, crafted in the aftermath of the 1997 Southeast Asian financial crisis, sought to
reform the General Banking Act of 1949 by fashioning a legal framework for maintaining a safe and sound
banking system.28 In this context, the amendment introduced by Section 47 embodied one of such safe and
sound practices aimed at ensuring the solvency and liquidity of our banks.1âwphi1 It cannot therefore be
disputed that the said provision amending the redemption period in Act 3135 was based on a reasonable
classification and germane to the purpose of the law.
This legitimate public interest pursued by the legislature further enfeebles petitioner’s impairment of
contract theory.

The right of redemption being statutory, it must be exercised in the manner prescribed by the statute, 29 and
within the prescribed time limit, to make it effective. Furthermore, as with other individual rights to
contract and to property, it has to give way to police power exercised for public welfare. 30 The concept of
police power is well-established in this jurisdiction. It has been defined as the "state authority to enact
legislation that may interfere with personal liberty or property in order to promote the general welfare." Its
scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where it could be
done, provides enough room for an efficient and flexible response to conditions and circumstances thus
assuming the greatest benefits.31

The freedom to contract is not absolute; all contracts and all rights are subject to the police power of the
State and not only may regulations which affect them be established by the State, but all such regulations
must be subject to change from time to time, as the general well-being of the community may require, or as
the circumstances may change, or as experience may demonstrate the necessity.32 Settled is the rule that the
non-impairment clause of the Constitution must yield to the loftier purposes targeted by the Government.
The right granted by this provision must submit to the demands and necessities of the State’s power of
regulation.33 Such authority to regulate businesses extends to the banking industry which, as this Court has
time and again emphasized, is undeniably imbued with public interest. 34

Having ruled that the assailed Section 47 of R.A. No. 8791 is constitutional, we find no reversible error
committed by the CA in holding that petitioner can no longer exercise the right of redemption over its
foreclosed properties after the certificate of sale in favor of respondent had been registered.

WHEREFORE, the petition for review on certiorari is DENIED for lack of merit. The Decision dated
November 19, 2010 and Resolution dated January 31, 2011 of the Court of Appeals in CA-G.R. CV No.
91120 are hereby AFFIRMED.

With costs against the petitioner.

SO ORDERED.

G.R. No. 167420 June 5, 2009
ALLIED BANKING CORPORATION, Petitioner,
vs.
RUPERTO JOSE H. MATEO, represented by WARLITA MATEO, as Attorney-in-
Fact, Respondent.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari filed by Allied Banking Corporation (petitioner)
seeking to reverse the Decision1 dated October 21, 2004, as well as the Order2 dated February 10, 2005 of
the Regional Trial Court (RTC), Branch 35, Santiago City, docketed as SCA No. 35-0145 for legal
redemption with prayer for a temporary restraining order and preliminary injunction.
On February 19, 1996, Ruperto Jose Mateo (respondent) obtained a loan from petitioner in the amount of
₱950,000.00. To secure the payment of the loan, respondent executed in favor of petitioner a deed of real
estate mortgage over a parcel of land registered in respondent’s name under Transfer Certificate of Title
(TCT) No. 236351 of the Register of Deeds of Isabela. He likewise executed a promissory note in the
amount of ₱950,000.00. Subsequently, respondent incurred default in the payment of his loan prompting
petitioner to cause the extrajudicial foreclosure of the mortgage constituted on the subject property. The
property was sold at public auction for ₱1,531,474.53 with petitioner as the sole and highest bidder. The
Certificate of Sale was issued to petitioner, and was registered with the Register of Deeds on July 21, 1999.
Respondent, through her attorney-in-fact, Warlita N. Mateo (Warlita), sent, on several dates, faxed letters
to petitioner signifying his desire to redeem the foreclosed property for ₱1.1 million pesos.
On July 21, 2000, or on the last day of the period for redemption, respondent, represented by Warlita, filed
a case for legal redemption with prayer for temporary restraining order and preliminary injunction with the
RTC of Isabela.
On January 19, 2001, petitioner effected the consolidation of its ownership over the subject property and
TCT No. 311043 was issued in its name on March 2, 2001.
During the pre-trial conference on September 18, 2002, respondent offered to redeem the property for the
foreclosed amount of ₱1,531,474.53, but petitioner refused. Instead of continuing with the trial, the parties
agreed to submit the case for summary judgment.
On October 21, 2004, the RTC rendered its Decision, the dispositive portion of which reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered in favor of the plaintiff
and against the defendant, ALLOWING the plaintiff to redeem from the defendant the property now
covered by TCT No. T-311043 in the name of the defendant, upon payment of the amount of
₱1,531,474.53, plus one (1) percent as interest for one (1) month only, and ORDERING the defendant to
accept the tender of redemption of the plaintiff and to deliver the proper certificate of redemption to the
latter and finally, ordering the defendant to indemnify the plaintiff ₱30,000.00 as attorney’s fees and cost
of the suit.3
In so ruling, the RTC found that: (1) respondent had the right to redeem the foreclosed property from
petitioner, as the one year period to redeem had not yet expired when respondent filed the instant case; (2)
even prior to the filing of the case, respondent had sent petitioner several faxed letters to show his sincere
desire to avail himself of the right to redeem the property from petitioner; (3) respondent already offered to
pay the foreclosed price of ₱1,531,474.53 as in fact he had consigned ₱1.1 million in the Land Bank. The
trial court also found that respondent began to exercise the right to redeem on August 10, 1999 when he,
through Warlita, sent a letter to petitioner on his intention to redeem; thus, applying Section 28, Rule 39 of
the Rules of Court, respondent should pay as redemption price the foreclosed amount of ₱1,531,474.53,
plus one percent interest for the month that lapsed until August 10, 1999.
Petitioner filed a Motion for Reconsideration, which was denied in an Order4 dated February 10,
2005.lavvphi1
In denying the Motion for Reconsideration, the RTC ruled that respondent’s offer of ₱1,531,474.53 made
during the pre-trial conference already covered petitioner’s bid price at the foreclosure auction sale, which
already incorporated the interest, penalties, attorney’s fees and other expenses of sale; that such purchase
price should be the basis of the redemption price, plus interest at one percent, in order to afford respondent
a greater chance to redeem the foreclosed property.
Dissatisfied, petitioner filed a petition for review on certiorari with the Court, alleging that:
THE LOWER COURT DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD
WITH LAW AND WITH THE APPLICABLE DECISIONS OF THE SUPREME COURT IN THAT:
I. It is considered sufficient tender and consignation the amount which was less than the price
for which the property was bought and in the manner not in conformity with the law and settled
jurisprudence.
II. It applied the provisions of Sec. 28, Rule 39 of the Rules of Court and Act No. 3135 in the
computation of the redemption price even when the said basis has been superseded by Sec. 78
of the General Banking Act (now Section 47 of RA 8791).5
Petitioner contends that: (1) the RTC erred in considering the various offers made by respondent to redeem
the subject property for the amount of ₱1.1 million as sufficient tender of payment for purposes of
redemption; (2) the tender to be legally sufficient must be for the amount of the purchase price, plus the
agreed interest rate on the principal obligation; (3) the RTC erred in considering the deposit of ₱1.1 million
with Land Bank as sufficient consignation, since the amount should have been deposited in court and not
anywhere else; (4) the offer to redeem in the amount of ₱1,531,474.53 was made only during the pre-trial
conference, which was already way past the redemption period; and (5) the redemption price should be
based on Section 47 of the General Banking Act.
In his Comment, respondent claims that the petition should be denied outright, because it raises questions
of fact and not purely of law; that the issue as to the sufficiency or insufficiency of the amount tendered by
respondent is a question of fact, as the Court should consider the factual evidence in relation to the
computation of the purchase price paid by petitioner during the foreclosure sale and the price offered by
respondent; that he offered to pay petitioner’s purchase amount of ₱1,531,474.53 during the pre-trial
conference; that he can still exercise the right of redemption over the subject property; and that a previous
tender of payment and consignation is only proper but is not essential when the redemptioner exercises his
right to redeem the foreclosed property through the filing of a judicial action within the period of
redemption.
In its Reply, petitioner argues that the case was decided on stipulation of facts by the parties; thus, any
appeal from a judgment based on stipulation of facts can only be on questions of law; that, whether under
Section 28, Rule 39 of the Rules of Court or Section 47 of the General Banking Act, the minimum
redemption amount is ₱1,531,474.53, which was the amount paid by petitioner during the foreclosure sale.
Preliminarily, the Court would first address the procedural matter raised by respondent: that the petition
should be denied outright because it raises questions of fact and not purely of law. Respondent claims that
the issue as to the sufficiency or insufficiency of the amount tendered by respondent is a question of fact,
which could not be raised in an appeal by certiorari under Rule 45.
We are not persuaded.
Notably, it was already stipulated upon by the parties that respondent offered ₱1.1 million as redemption
price before the filing of this action; thus, the issue is not the amount of redemption price, but the
sufficiency of the amount offered by respondent that would warrant the redemption of the foreclosed
property. This is a question of law as it calls for the correct application of law and jurisprudence on the
matter, which is within the purview of Rule 45 of the Rules of Court.1avvphi1
The Court will now address the main issues presented, to wit:
(1) Whether or not respondent still has the right to redeem the subject property; and
(2) Whether or not Section 78 of the General Banking Act 6 should be applied to the
computation of the redemption price.
Section 6 of Act No. 3135,7 as amended by Act No. 4118, provides for a valid redemption, to wit:
SEC. 6. In all cases in which an extrajudicial sale is made under the special power hereinbefore referred to,
the debtor, his successors in interest or any judicial creditor or judgment creditor of said debtor, or any
person having a lien on the property subsequent to the mortgage or deed of trust under which the property
is sold, may redeem the same at any time within the term of one year from and after the date of sale; and
such redemption shall be governed by the provisions of sections four hundred and sixty-four to four
hundred and sixty-six, inclusive,8 of the Code of Civil Procedure, insofar as these are not inconsistent with
the provisions of this Act.
Considering that petitioner is a banking institution, the determination of the redemption price for the
foreclosed property should be governed by Section 78 of the General Banking Act. Union Bank of the
Philippines v. Court of Appeals,9 is instructive:
x x x Petitioner’s contention that Section 78 of the General Banking Act governs the determination of the
redemption price of the subject property is meritorious. In Ponce de Leon v. Rehabilitation Finance
Corporation, this Court had occasion to rule that Section 78 of the General Banking Act had the effect of
amending Section 6 of Act No. 3135 insofar as the redemption price is concerned when the mortgagee is a
bank, as in this case, or a banking or credit institution. The apparent conflict between the provisions of Act
No. 3135 and the General Banking Act was, therefore, resolved in favor of the latter, being a special and
subsequent legislation. This pronouncement was reiterated in the case of Sy v. Court of Appeals where we
held that the amount at which the foreclosed property is redeemable is the amount due under the mortgage
deed, or the outstanding obligation of the mortgagor plus interest and expenses in accordance with Section
78 of the General Banking Act. It was, therefore, manifest error on the part of the Court of Appeals to
apply in the case at bar the provisions of Section 30, Rule 39 of the Rules of Court in fixing the redemption
price of the subject foreclosed property.
And Section 78 provides:
Sec. 78. In the event of foreclosure, whether judicially or extrajudicially, of any mortgage on real estate
which is security for any loan granted before the passage of this Act or under the provisions of this Act, the
mortgagor or debtor whose real property has been sold at public auction, judicially or extrajudicially, for
the full or partial payment of an obligation to any bank, banking or credit institution, within the purview of
this Act shall have the right, within one year after the sale of the real estate as a result of the foreclosure of
the respective mortgage, to redeem the property by paying the amount fixed by the court in the order of
execution, or the amount due under the mortgage deed, as the case may be, with interest thereon at the rate
specified in the mortgage, and all the costs, and judicial and other expenses incurred by the bank or
institution concerned by reason of the execution and sale and as a result of the custody of said property less
the income received from the property.
In BPI Family Savings Bank, Inc. v. Veloso,10 the Court had occasion to state the requirements for the
redemption of the foreclosed property. The Court held:
The general rule in redemption is that it is not sufficient that a person offering to redeem manifests his
desire to do so. The statement of intention must be accompanied by an actual and simultaneous tender of
payment. This constitutes the exercise of the right to repurchase.
In several cases decided by the Court where the right to repurchase was held to have been properly
exercised, there was an unequivocal tender of payment for the full amount of the repurchase price.
Otherwise, the offer to redeem is ineffectual. Bona fide redemption necessarily implies a reasonable
and valid tender of the entire repurchase price, otherwise the rule on the redemption period fixed by
law can easily be circumvented.11
In this case, it was stipulated upon by the parties that the real estate mortgage over respondent’s property
was foreclosed in the amount of ₱1,531,474.53, and that respondent offered the amount of ₱1.1 million as
redemption price before the filing of the complaint. It has been held that the tender of payment must be for
the full amount of the purchase price, i.e., the amount fixed by the court in the order of execution or the
amount due under the mortgage deed, as the case may be, with interest thereon at the rate specified in the
mortgage; and all the costs, and judicial and other expenses incurred by the bank or institution concerned
by reason of the execution and sale and as a result of the custody of said property less the income received
from the property. Thus, the amount of ₱1.1 million offered by respondent was ineffective, since not only
did the amount not include the interest but it was even below the purchase price. Such offer did not effect a
valid redemption, and petitioner was justified in refusing to accept such offer.
The RTC found that the instant case for legal redemption must prosper, as the one-year period to redeem
had not yet expired when respondents filed the case. Notably, respondents filed the instant case on July 21,
2000 which was within one year from the registration of the Certificate of Sale on July 21, 1999. The
question now is whether such judicial redemption is proper under the circumstances.
In Hi Yield Realty, Inc v. Court of Appeals,12 the Court held:
What is the redemptioner’s option therefore when the redemption period is about to expire and the
redemption cannot take place on account of disagreement over the redemption price?
According to jurisprudence, the redemptioner faced with such a problem may preserve his right of
redemption through judicial action which in every case must be filed within the one-year period of
redemption. The filing of the court action to enforce redemption, being equivalent to a formal offer to
redeem, would have the effect of preserving his redemptive rights and "freezing" the expiration of the one-
year period. This is a fair interpretation provided the action is filed on time and in good faith, the
redemption price is finally determined and paid within a reasonable time, and the rights of the parties are
respected.

Stated otherwise, the foregoing interpretation, as applied to the case at bar, has three critical dimensions:
(1) timely redemption or redemption by expiration date (or, as what happened in this case, the
redemptioner was forced to resort to judicial action to "freeze" the expiration of the redemption period); (2)
good faith as always, meaning, the filing of the private respondent’s action on August 13, 1993 must have
been for the sole purpose of determining the redemption price and not to stretch the redemptive period
indefinitely; and (3) once the redemption price is determined within a reasonable time, the redemptioner
must make prompt payment in full.

Conversely, if private respondent had to resort to judicial action to stall the expiration of the redemptive
period on August 13, 1993 because he and the petitioner could not agree on the redemption price which
still had to be determined, private respondent could not thereby be expected to tender payment
simultaneously with the filing of the action on said date.13

As above-stated, for the action to be considered filed in good faith, the filing of the action must have been
for the sole purpose of determining the redemption price and not to stretch the redemptive period
indefinitely. In this case, it was sufficiently shown that respondent’s offer of ₱1.1 million was even below
the amount paid by petitioner in the foreclosure sale. Notably, in petitioner’s Answer to respondent’s
complaint, it had alleged that, as of June 16, 2000, the redemption price of the foreclosed property
consisting of the amount due under the mortgage deed, the interest specified in the mortgage and all the
costs and expenses incurred by petitioner from the sale and custody of the property already amounted to
₱2,058,825.73.14 Yet, during the pre-trial conference, respondent merely offered to pay the amount of the
auction price alone which was ₱1,531,474.53, without any payment of interest. In fact, respondent never
even consigned such amount in court to show good faith.

It is not difficult to understand why the redemption price should either be fully offered in legal tender or
else validly consigned in court. Only by such means can the auction winner be assured that the offer to
redeem is being made in good faith.15 Thus, the Court finds that respondent’s action for legal redemption
was not filed in good faith. It was not filed for the purpose of determining the correct redemption price, but
to stretch the redemption period indefinitely.16

WHEREFORE, the petition for review is GRANTED. The Decision dated October 21, 2004, as well as the
Order dated February 10, 2005 of the Regional Trial Court, Branch 35, Santiago City, are hereby
REVERSED and SET ASIDE. The action for legal redemption filed by respondent is hereby DISMISSED.

SO ORDERED.

G.R. No. 169568, October 22, 2014
ROLANDO ROBLES, REPRESENTED BY ATTY. CLARA C.
ESPIRITU, Petitioner, v. FERNANDO FIDEL YAPCINCO, PATROCINIO B. YAPCINCO,
MARIA CORAZON B. YAPCINCO, AND MARIA ASUNCION B. YAPCINCO-
FRONDA, Respondents.
DECISION
BERSAMIN, J.:
The dispute involves the ownership of a judicially-foreclosed parcel of land sold at a public auction, but
which sale was not judicially confirmed. On one side is the petitioner, the successor in interest of the
purchaser in the public auction, and, on the other, the heirs of the mortgagor, who never manifested interest
in redeeming the property from the time of the foreclosure.
The Case
Assailed herein are the decision and resolution of the Court of Appeals (CA) respectively promulgated on
February 24, 2005 and September 12, 2005 in CA-G.R. No. 79824 entitled Rolando Robles, represented by
Atty. Clara C. Espiritu v. Fernando Fidel Yapcinco, et al.,1 reversing and setting aside the decision
rendered on July 7, 2003 by the Regional Trial Court, Branch 63, in Tarlac City (RTC). 2
Antecedents
The property in litis was originally registered under Transfer Certificate (TCT) No. 20458 of the Registry
of Deeds of Tarlac in the name of Fernando F. Yapcinco, married to Maxima Alcedo. 3 In May 4,1944,
Yapcinco constituted a mortgage on the property in favor of Jose C. Marcelo to secure the performance of
his obligation. In turn, Marcelo transferred his rights as the mortgagee to Apolinario Cruz on October 24,
1944.4 When Yapcinco did not pay the obligation, Apolinario Cruz brought an action for judicial
foreclosure of the mortgage in the Court of First Instance (CFI) of Tarlac, which rendered its decision on
July 27, 1956 ordering Patrocinio Y. Kelly, the administratrix of the estate of Yapcinco, who died during
the pendency of the action, to pay Apolinario Cruz the indebtedness secured by the mortgage plus interest;
and in case of the failure to pay after 90 days from the date of the decision, the property would be sold at a
public auction,5 to wit:ChanRoblesVirtualawlibrary
IN VIEW OF THE FOREGOING, the Court renders decision to the following effect:
A. Ordering the defendant Patrocinio Y. Kelly, as judicial administratrix of the intestate estate of Fernando
Yapcinco, to pay to Apolinario Cruz the total amount of P6,000.00, representing the mortgage
indebtedness of the defendant in favor of plaintiff, together with interest thereon at the rate of 8% per
annum payable from May 4, 1944, until all payment thereof; and if after ninety (90) days from the date of
this decision shall have become final and executory the defendant shall not have paid the obligation herein
ordered paid, the properties mortgaged shall be sold by the Provincial Sheriff at Public Auction, and the
proceeds thereof to be applied and disposed of in accordance with law.
B. Dismissing the third-party complaint of defendant Fernando Yapcinco against Jose C. Marcelo; and
C. Ordering the defendant to pay the costs of this suit.
SO ORDERED.
Apolinario Cruz was adjudged the highest bidder in the public auction held on March 18, 1959. In his
favor was then issued the certificate of absolute sale,6 and he took possession of the property in due course.
However, he did not register the certificate of sale; nor was a judicial confirmation of sale issued.
On September 5, 1972, Apolinario Cruz donated the property to his grandchildren, namely: Carlos C. de la
Rosa, Apolinario Bernabe, Ferdinand Cruz, and petitioner Rolando Robles. 7 On August 29, 1991, however,
Apolinario Bernabe falsified a deed of absolute sale, whereby he made it appear that Yapcinco had sold the
property to him, Ma. Teresita Escopete, Orlando Santos and Oliver Puzon.8 As a consequence, the Register
of Deeds cancelled Yapcinco's TCT No. 20458 and issued TCT No. 243719 in their names as co-
vendees.9 The sale was annotated on TCT No. 20458. It appears that another instrument dated August 28,
1991 was annotated on TCT No. 20458 purportedly releasing and cancelling the mortgage. Both
instruments were annotated on February 11, 1992.10
On February 3, 1993, Carlos C. dela Rosa and Ferdinand Cruz, the other donees, filed a complaint for the
nullification of the contract of sale, cancellation of title and reconveyance against Apolinario Bernabe and
his co-vendees, but the case was not aggressively pursued inasmuch as the parties were first degree
cousins.11
On January 2, 2000, the respondents, all heirs of the Spouses Yapcinco, instituted an action against
Apolinario Bernabe and his co-vendees in the Regional Trial Court (RTC) in Tarlae City for the annulment
of TCT No. 243719, document restoration, reconveyance and damages. They claimed that although the
property had been mortgaged, the mortgage had not been foreclosed, judicially or extra-judicially;12 that
the property was released from the mortgage per Entry No. 32-2182 in the Memorandum of Incumbrances;
and that the deed of absolute sale between Fernando Yapcinco and Bemabe, et aL. was void and ineffectual
because the Spouses Yapcinco had already been dead as of the date of the sale. 13
Defendants Apolinario Bernabe and his co-vendees were declared in default.
On September 13, 2001, the RTC, Branch 64, in Tarlae City rendered its judgment declaring TCT No.
243719 and the deed of absolute sale dated
August 28, 1991 null and void. As a consequence, TCT No. 243719 was cancelled, and TCT No. 20458 in
the name of Yapcinco was restored.14
On December 17, 2002, the petitioner filed an action for the nullification of document, cancellation of title,
reconveyance and damages against the respondents (Civil Case No. 9436). 15 He averred that the heirs of
Yapcinco had acted in bad faith in causing the issuance of TCT No. 354061 because they had known fully
well that the property had long been excluded from the estate of Yapcinco by virtue of the CFI decision
dated July 27, 1956, and which the CA affirmed on April 25, 1958; that a certificate of absolute sale was
issued in the name of Apolinario Cruz as early as 1959; and that he had a vested right in the property
pursuant to the deed of donation executed on September 5, 1972 by Apolinario Cruz in his favor, among
others.
The respondents countered that TCT No. 20458 contained an annotation to the effect that the property had
been released from the mortgage by virtue of an instrument dated August 28, 2001; and that, in any case,
the certificate of absolute sale and the deed of donation relied upon by the petitioner were not even
inscribed in TCT No. 20458.16
Ruling of the RTC
On July 7, 2003, the RTC rendered its judgment, disposing thusly:ChanRoblesVirtualawlibrary
WHEREFORE, judgment is hereby rendered in favor of the plaintiff by declaring the subject land covered
by TCT No. 354067 to be owned by the late Apolinario Cruz and is part of his estate; and
 1. declaring null and void TCT No. 354067 and that a new title be issued to Apolinario Cruz.
Defendants should deliver to plaintiff or to this Court the owner's copy of TCT No. 354067; if
they will not do so after finality of this judgment, the Registry of Deeds is nevertheless
authorized to cancel TCT NO. 354067 and issue a new one in name [the] of Apolinario Cruz,
even without the surrender of the owner's copy;chanrobleslaw
2. declaring as null and void the extra-judicial settlement of the estate of late the Fernando
Yapcinco as far as the subject land is concerned;chanrobleslaw
3. claim for damages of both parties are denied.
SO ORDERED.17
The RTC opined that the respondents could not claim to have no knowledge that the property in litis was
no longer part of the estate of the late Fernando F. Yapcinco; that one of them had substituted the late
Fernando F. Yapcinco in the judicial foreclosure proceedings, and even appealed the adverse decision to
the CA; that they could not argue that they were not bound by the foreclosure of the mortgage due to the
nonregistration of the certificate of sale because as between the parties registration was not a requisite for
the validity of the foreclosure; and that they did not redeem the property until the present. 18
Decision of the CA
The respondents appealed to the CA, insisting that the RTC erred, as follows: (1) in declaring TCT No.
354061 as null and void, and issuing a new one to Apohnario Cruz and including the subject land in his
estate; (2) in holding that res judicata applied; (3) in not honoring that the TCT No. 20458 was free from
any lien and encumbrances; (4) in finding that they were aware of the proceedings in Civil Case No. CA-
G.R. No. 19332-R; (5) in not considering prescription, laches and estoppels to bar the action; and (6) in not
considering that they had the better right to the property.19
On February 24, 2005, the CA promulgated its assailed decision,20 reversing the judgment of the RTC, and
holding that due to the nonregistration of the certificate of sale, the period of redemption did not
commence to run. It also held that Apolinario Cruz never acquired title to the property and could not have
conveyed and transferred ownership over the same to his grandchildren through the deed of donation; 21 and
that contrary to the RTC's finding, Patrocinio Yapcinco's knowledge of Apolinario Cruz' interest over the
subject property was not tantamount to registration. It found that Patrocinio Yapcinco Kelly, the
administratrix of the estate of Fernando F. Yapcinco, and Patrocinio B. Yapcinco, one of the respondents,
were two different persons, such that it could not be concluded that the respondents had knowledge of the
sale. Accordingly, it concluded that the heirs of Fernando F. Yapcinco had the right to include the property
as the asset of the estate of Fernando F. Yapcinco.22
The petitioner moved for reconsideration, but on September 12, 2005, the CA denied his motion for
reconsideration, observing that there had been no order confirming the auction sale; hence, the respondents
were never divested of their rights and interest in the property. 23
Issues
In this appeal, the petitioner posits the following issues:ChanRoblesVirtualawlibrary
I only the equity of redemption is granted to the mortgagor, except in mortgages with banking
THE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT APOLINARIO CRUZ, AS
PURCHASER IN A JUDICIAL FORECLOSURE OF SALE, NEVER ACQUIRED TITLE TO THE
SUBJECT PROPERTY BY THE MERE OMISSION TO REGISTER THE CERTIFICATE OF SALE.
II
THE COURT OF APPEALS SERIOUSLY ERRED IN DECLARING THAT RESPONDENTS HAD NO
KNOWLEDGE OF, AND THUS COULD NOT BE BOUND BY, THE FORECLOSURE OF
MORTGAGE THAT WAS EARLIER CONDUCTED AS THE SAME WAS NOT SUPPORTED BY
THE REAL FACTS AND CIRCUMSTANCES ATTENDANT TO THE INSTANT CASE.
Ill
THE COURT OF APPEALS SERIOUSLY ERRED IN NOT HOLDING THAT WHATEVER RIGHTS
BEING CLAIMED BY THE RESPONDENTS IN THE INSTANT CASE ARE ALREADY BARRED
BY LACHES.24chanRoblesvirtualLawlibrary
The petitioner insists that the rules and principles relied upon by the CA were applicable only to extra-
judicial foreclosure, not to a judicial foreclosure like the one herein; that the importance of registration of
the certificate of sale was true only in extrajudicial sale where it would be the reckoning point for the
exercise of the right of redemption;25cralawred that the respondents were aware of the auction sale and
even actually participated in the proceedings leading to the foreclosure, but they never tried to exercise
their equity of redemption, before or even after the foreclosure sale;26 that the family of Apolinario Cruz
had been occupying the property for more than 40 years from the time of the foreclosure sale; and that the
respondents should not be allowed to recover the lot on the basis of the non-registration of the certificate of
sale.
The petitioner argues that the non-registration of the certificate of sale did not affect the title acquired by
Apolinario Cruz as the purchaser in the judicial foreclosure of mortgage; 27 that the respondents' actual
knowledge of the judicial foreclosure was equivalent to automatic registration; that the doctrine of
indefeasibility of Torrens title was not absolute, and should yield to the right of another person based on
equitable principles of laches;28 that the finality of the judgment rendered in the judicial action for
foreclosure of mortgage was valid and binding on the respondents as the successors-in-interest of the
judgment debtor; and that whether or not respondent Patrocinio Yapcinco and Patrocinio Yapcinco Kelly
were the same persons, or whether Patrocinio Yapcinco was only the daughter of the latter who was the
administratrix was irrelevant because the respondents remained charged with knowledge of the foreclosure
sale by virtue of their being the successors-in-interest of the mortgagor.29
In contrast, the respondents maintain that they were lawfully entitled to the property in litis because there
was no registration of the certificate of sale or confirmation from the court; 30 that even the deed of donation
executed by Apolinario Cruz was not registered;31 that the issue revolved on whether or not there was a
valid transfer of ownership;32 and that with the release of mortgage being validly registered in the Office of
Registry of Deeds of Tarlac on February 11, 1992, thereby rendering the title free from any lien and
encumbrances, they already had the right to transfer the property in their names. 33
Ruling of the Court
The petition for review is meritorious.
Before anything more, the Court clarifies that the failure of Apolinario Cruz to register the certificate of
sale was of no consequence in this adjudication. The registration of the sale is required only in extra-
judicial foreclosure sale because the date of the registration is the reckoning point for the exercise of the
right of redemption. In contrast, the registration of the sale is superfluous in judicial foreclosure because
institutions.34 The equity of redemption is the right of the defendant mortgagor to extinguish the mortgage
and retain ownership of the property by paying the secured debt within the 90-day period after the
judgment becomes final, or even after the foreclosure sale but prior to the confirmation of the sale.35In this
light, it was patent error for the CA to declare that: "By Apolinario Cruz's failure to register the 18 March
1958 Certificate of Absolute Sale in the Office of the Register of Deeds, the period of redemption did not
commence to run."36

The applicable rule on March 18, 1959, the date of the foreclosure sale, was Section 3, Rule 70 37 of
the Rules of Court, which relevantly provided that: "Such sale shall not affect the rights of persons holding
prior incumbrances upon the property or a part thereof, and when confirmed by an order of the court, it
shall operate to divest the rights of all the parties to the action and to vest their rights in the purchaser,
subject to such rights of redemption as may be allowed by law." The records show that no judicial
confirmation of the sale was made despite the lapse of more than 40 years since the date of the sale. Hence,
it cannot be said that title was fully vested in Apolinario Cruz.
However, the Court will not be dispensing true and effective justice if it denies the petition for review on
the basis alone of the absence of the judicial confirmation of the sale. Although procedural rules are not to
be belittled or disregarded considering that they insure an orderly and speedy administration of justice, it is
equally true that litigation is not a game of technicalities. Law and jurisprudence grant to the courts the
prerogative to relax compliance with procedural rules of even the most mandatory character, mindful of the
duty to reconcile both the need to speedily put an end to litigation and the parties' right to an opportunity to
be heard.38 The Rules of Court itself calls for a liberal construction of its rules with the view of promoting
their objective of securing a just, speedy and inexpensive disposition of every action and proceeding.39
To better serve the ends of justice, the Court holds that the real issue to consider and resolve is who
between the parties had the better right to the property, not whether there was a valid transfer of ownership
to Apolinario Cruz.
It was not denied that Fernando F. Yapcinco, as the mortgagor, did not pay his obligation, and that his
default led to the filing of the action for judicial foreclosure against him, in which he actively participated
in the proceedings, and upon his death was substituted by the administratrix of his estate. In the end, the
decision in the action for judicial foreclosure called for the holding of the public sale of the mortgaged
property. Due to the subsequent failure of the estate of Fernando F. Yapcinco to exercise the equity of
redemption, the property was sold at the public sale, and Apolinario Cruz was declared the highest bidder.
Under the circumstances, the respondents as the successors-in-interest of Fernando F. Yapcinco were fully
bound by that decision and by the result of the ensuing foreclosure sale.
time of his purchase at the foreclosure sale until the present.
The effect of the failure of Apolinario Cruz to obtain the judicial confirmation was only to prevent the title
to the property from being transferred to him. For sure, such failure did not give rise to any right in favor of
the mortgagor or the respondents as his successors-in-interest to take back the property already validly sold
through public auction. Nor did such failure invalidate the foreclosure proceedings. To maintain otherwise
would render nugatory the judicial foreclosure and foreclosure sale, thus unduly disturbing judicial
stability. The non-transfer of the title notwithstanding, Apolinario Cruz as the purchaser should not be
deprived of the property purchased at the foreclosure sale. With the respondents having been fully aware of
the mortgage, and being legally bound by the judicial foreclosure and consequent public sale, and in view
of the unquestioned possession by Apolinario Cruz and his successors-in-interest (including the petitioner)
from the time of the foreclosure sale until the present, the respondents could not assert any better right to
the property. It would be the height of inequity to still permit them to regain the property on the basis alone
of the lack of judicial confirmation of the sale. After all, under the applicable rule earlier cited, the judicial
confirmation operated only "to divest the rights of all the parties to the action and to vest their rights in
the purchaser, subject to such rights of redemption as may be allowed by law."
Consequently, the late Fernando F. Yapcinco and the respondents as his successors-in-interest were
divested of their right in the property, for they did not duly exercise the equity of redemption decreed in the
decision of the trial court. With Yapcinco having thereby effectively ceased to be the owner of the property
sold, the property was taken out of the mass of the assets of Yapcinco upon the expiration of the equity of
redemption.
WHEREFORE, the Court REVERSES and SETS ASIDE decision promulgated on February 24, 2005
by the Court of Appeals; REINSTATES the decision rendered on July 7, 2003 by the Regional Trial
Court, Branch 63, in Tarlac City; and ORDERS the respondents to pay the costs of suit.
SO ORDERED.cralawlawlibrary

In this regard, determining whether Patrocinio Yapcinco Kelly, the adminsitratrix of the estate, and
respondent Patrocinio Yapcinco were one and the same person was not necessary. Even if they were not
one and the same person, they were both bound by the foreclosure proceedings by virtue of their being
both successors-in-interest of Fernando F. Yapcinco.

Although the respondents admitted the existence of the mortgage, they somehow denied knowledge of its
foreclosure. Yet, in asserting their superior right to the property, they relied on and cited the entry dated
February 11, 1992 concerning the release of mortgage inscribed on TCT No. 20458. This duplicity the
Court cannot countenance. Being the heirs and successors-in-interest of the late Fernando F. Yapcinco,
they could not repudiate the foreclosure sale and its consequences, and escape such consequences that
bound and concluded their predecessor-in-interest whose shoes they only stepped into.40 Given their
position on the lack of judicial confirmation of the sale in favor of Apolinario Cruz, they should have
extinguished the mortgage by exercising their equity of redemption through paying the secured debt. They
did not do so, and, instead, they sought the annulment of TCT No. 243719 and caused the issuance of
another title in their name.

Even assuming that there was no foreclosure of the mortgage, such that the respondents did not need to
exercise the equity of redemption, the legal obligation to pay off the mortgage indebtedness in favor of
Apolinario Cruz nonetheless devolved on them and the estate of Fernando F. Yapcinco. They could not
sincerely rely on the entry about the release or cancellation of the mortgage in TCT No. 20458, because
such entry appeared to be unfounded in the face of the lack of any showing by them that either they or the
estate of Fernando F. Yapcinco had settled the obligation.

The petitioner did not tender any explanation for the failure of Apolinario Cruz to secure the judicial
confirmation of the sale. Fie reminds only that Apolinario Cruz and his successors-in-interest and
representatives have been in actual, notorious, public and uninterrupted possession of the property from the
 7. 281747 (BDS-94854.696.00.999) September 3, 1997 P 105,000.00

G.R. No. 200567 June 22, 2015

8. 281749 (BD-236/97) September 11, 1997 P 525,233.93

METOROPLITAN BANK AND TRUST COMPANY, Petitioner,

vs. 9. 281750 (BD-238/97) September 12, 1997 P 1,313,099.36

CPR PROMOTIONS AND MARKETING, INC. and SPOUSES CORNELIO P. REYNOSO, JR.
and LEONIZA* F. REYSONO, Respondents.
10. 473410 (BD-239/97) September 19, 1997 P 251,725.00

DECISION
11. 473414 (BD-240/97) September 19, 1997 P 288,975.66

VELASCO, JR., J.:

12. 473412 (BD-244/97) September 26, 1997 P 62,982.53

The Case
13. 473411 (BD-245/97) September 26, 1997 P 156,038.85

Before Us is a petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the
September 28, 2011 Decision1 and February 13, 2012 Resolution2 of the Court of Appeals (CA) rendered 14. 473413 (BD-251/97) October 3, 1997 P 767,512.30
in CA-G.R. CV No. 91424. Said ruling dismissed petitioner Metropolitan Banking and Trust Company’s
(MBTC’s) claim for deficiency payment upon foreclosing respondents’ mortgaged properties and ordered
the bank, instead, to return to respondent mortgagors the excess amount of PhP 722,602.22. 15. 473431 (BD-252/97) October 6, 1997 P 557,497.45

The Facts
TOTAL PRINCIPAL AMOUNT 12,891,397.78

The facts of the case, as culled from the records, are as follows:

To secure the loans, the spouses Reynoso executed two deeds of real estate mortgage on separate dates.
From February to October 1997, respondent CPR Promotions and Marketing, Inc. (CPR Promotions)
The first mortgage, securing the amount of PhP 6,500,000, was executed on February 2, 1996 over real
obtained loans from petitioner MBTC. These loans were covered by fifteen (15) promissory note (PNs) all
estate covered by Transfer Certificate of Title (TCT) No. 624835; 3 the other was executed on July 18, 1996
signed by respondents, spouses Leoniza F. Reynoso and Cornelio P. Reynoso, Jr. (spouses Reynoso), as
over properties covered by TCT Nos. 565381,4 263421,5 and 2746826 to secure the amount of PhP
Treasurer and President of CPR Promotions, respectively. The issued PNs are as follows:
2,500,000. All of the mortgaged properties are registered under the spouses Reynoso’s names, except for
TCT No. 565381, which is registered under CPR Promotions.7
PN No. Date Amount
Thereafter, on December 8, 1997, the spouses Reynoso executed a continuing surety agreement 8 binding
themselves solidarily with CPR Promotions to pay any and all loans CPR Promotions may have obtained
1. 277894 (BDS-143/97) February 7, 1997 P 6,500,000.00
from petitioner MBTC, including those covered by the said PNs, but not to exceed PhP 13,000,000.

2. 281728 (BD-216/97) July 21, 1997 P 959,034.20 Upon maturity of the loans, respondents defaulted, prompting MBTC to file a petition for extra-judicial
foreclosure of the real estate mortgages, pursuant to Act No. 3135,9 as amended. MBTC’s request for
foreclosure,10 dated March 6, 1998, pertinently reads:
3. 281735 (BD-222/97) July 31, 1997 P 508,580.83

We have the honor to request your good Office to conduct/undertake extra-judicial foreclosure sale
4. 281736 (BD-225/97) August 12, 1997 P 291,732.50 proceedings under Act No. 3135, as amended, and other applicable laws on the properties covered by two
Real Estate Mortgages executed by CPR PROMOTIONS & MARKETING INC., represented by its
President Mr. Cornelio P. Reynoso and Treasurer Leoniza F. Reynoso and SPOUSES CORNELIO P.
5. 281737 (BD-226/97) August 12 , 1997 P 157,173.12
REYNOSO, JR., AND LEONIZA F. REYNOSO in favour of the mortgagee, METROPLITAN BANK
AND TRUST COMPANY, to secure fifteen (15) loans with a total principal amount of TWELVE
6. 281745 (BD-229/97) August 22, 1997 P 449,812.25 MILLION EIGHT HUNDRED NINETY ONE THOUSAND THREE HUNDRED NINETY SEVEN
PESOS AND SEVENTY EIGHT CENTAVOS (₱12,891,397.78), for breach of the terms of said
mortgage.11
As Annex "R", a copy of the Statement of Account, showing that the total amount due on the loans of the
borrowers/mortgagers which remains unpaid and outstanding as a February 10, 1998 was ELEVEN
MILLION TWO HUNDRED SIXTEEN THOUSAND SEVEN HUNDRED EIGHTY THREE PESOS
AND NINETY NIN CENTAVOR (₱11,216,783.99)
Subsequently, on May 5, 1998, the mortgaged covered by TCT Nos. 624835 and 565381 were sold at a
public auction sale. MBTC participated therein and submitted the highest bid in the amount of PhP
10,374,000. The day after, on May 6, 1998, petitioner again participated and won in the public auction sake
of the remaining mortgaged properties, having submitted the highest bid amounting to PhP 3,240,000. As a
result petitioner was issued the corresponding Certificates of Sale on July 15 and 16, 1998, covering the
properties subjected to the first and second public auctions, respectively.
Notwithstanding the foreclosure of the mortgaged properties for the total amount of PhP 13, 614,000,
petitioner MBTC alleged that there remained a deficiency balance of PhP 2,628,520.73, plus interest and
charges as stipulated and agreed upon in the PNs and deeds of real estate mortgages. Despite petitioner’s
repeated demands, however, respondents failed to settle the alleged deficiency. Thus, petitioner filed an
action for collection of sum of money against respondents, docketed as Civil Case No. 99-230, entitled
Metropolitan Bank and Trust Company v. CPR Promotions and Marketing, Inc. and Spouses Cornelio
Reynoso, Jr. and Leoniza F. Reynoso.
Ruling of the Regional Trial Court
In its Decision13 dated October 11, 2007, the Regional Trial Court, Branch 59 in Makati City (RTC) ruled
in favor of petitioner that there, indeed, was a balance of Php 2,628,520.73, plus interest and charges, as of
September 18, 1998, and that respondents are liable for the said amount, as part of their contractual
obligation.14 The court disposed of the case in this wise:
WHEREFORE, premises considered, judgment is hereby rendered ordering [respondents], jointly and
severally, to pay [petitioner] Metrobank, as follows:
a] the amount of PhP 2,628,520.73 plus stipulated interest and penalty charges stipulated in the
Promissory Notes marked as Exhibits A to O until full payment thereof; and
b] the costs of the suit.
SO ORDERED.
Respondents timely moved for reconsideration of the RTC’s Decision, which was denied through the trial
court’s February 7, 2008 Order. Aggrieved, respondents elevated the case to the CA.
Ruling of the Court of Appeals
The appellate court, through the assailed Decision, reversed the court a quo and ruled in favor of
respondents. The fallo of the said Decision reads:
Wherefore, in view of the foregoing, the decision appealed from is reversed, and the plaintiff-appallee
Metrobank is ordered to refund or return to the defendants-appellants Cornelio and Leoniza Reynoso the
amount of Ph₱722,602.22 representing the remainder of the proceeds of the foreclosure sale, with legal
interest of six percent per annum from the date of filing the answer with counterclaim on March 26, 1999,
until paid.
SO ORDERED.15
Supporting the reversal is the CA’s finding that there was a sudden change in the terminology used, from
"total amount due" to "principal amount."16 According to the CA, from February to May 1998, the amount
sought to be collected ballooned from PhP 11,216,783.99 to PhP 12,891,397.78. From this apparently
unexplained increase, the CA deduced that the increased amount must mean the principal and interest and
other charges. Furthermore, the appellate court found that petitioner failed to prove that there was a
deficiency, since the records failed to corroborate the claimed amount. As noted by the CA, "[Petitioner]
did not even introduce the continuing surety agreement on which the trial court gratuitously based its
decision."
On October 24, 2011, petitioner filed a motion for reconsideration of the assailed Decision, which the
appellate court denied in its assailed February 13, 2012 Resolution.
The Issues
Hence this recourse, on the following issues:
Whether or not the CA gravely abused its discretion when it failed to consider the continuing surety
agreement presented in evidence and in ruling that petitioner MBTC failed to prove that the spouses
Reynoso are solidarily liable with respondent CPR Promotions.
Whether or not the CA gravely abused its discretion when it grossly misappreciated the promissory notes,
real estate mortgages, petition for extrajudicial foreclosure of mortgage, certificates of sale and statement
of account marked in evidence and ruled that petitioner MBTC failed to prove that a deficiency balance
resulted after conducting the extrajudicial foreclosure sales of the mortgaged properties.
The Arguments
Anent the first issue, MBTC faults the appellate court for finding that it did not introduce the continuing
surety agreement on which the RTC based its ruling that respondent spouses are solidarily liable with
respondent CPR Promotions.17
As regards the second issue, petitioner asserts that the CA’s grant of a refund valued at PhP 722,602.22
plus legal interest of six percent (6%) in favor of respondents is erroneous for two reasons: first,
respondents never set up a counterclaim for refund of any amount 18 and second, the total outstanding
obligation as of February 10, 1998, to which the full amount of the bid prices was applied, is PhP
11,216,783.99 and not Ph₱12,891,397.78, which was used by the CA in its computation. 19
Lastly, petitioner claims that respondents should be made to answer for certain specific expenses connected
with the foreclosure, i.e., filing fees, publication expense, Sheriff’s Commission on Sale, stipulated
attorney’s fee, registration fee for the Certificate of Sale, insurance premium and other miscellaneous
expenses, in the amounts of PhP 1,373,238.04 and PhP 419,166.67 for the first and second foreclosure
sales, respectively.20
In their Comment,21 respondents maintained the propriety of the CA’s grant of a refund, arguing that in
their Answer with Compulsory Counterclaim, they laid-down in detail the excess of the prices of the
foreclosed properties over their obligation.22 Respondents then went on and argued that "from the
beginning of the instant case in the trial court, [they] have already raised in issue the fact of [petitioner’s]
taking-over of [their] lands with values over and above the latter’s financial liabilities."23 Thus, they
postulate that the CA did right when it touched on the issue and ruled thereon. 24
Furthermore, respondents insist that there is actually no difference between the PhP 12,891,397.78 and the
PhP 11,261,783.99 amounts except for the accumulated interest, penalties, and other charges. 25 Too,
according to them, this is the reason why what respondent CPR owed petitioner at that time increased
substantially from that on February 10, 1998, when the amount was just PhP 11,216,783.99.26
The Court's Ruling
We partially grant the petition. While We fully agree with the CA that MBTC was not able to prove the
amount claimed, We however, find that neither were respondents able to timely setup their claim for
refund.
Respondents belatedly raised their compulsory counterclaim
Rule 6 of the Rules of Court denies a compulsory counterclaim as follows:
Section 7. Compulsory counterclaim. – A compulsory counterclaim is one which, being cognizable by the
regular courts of justice, arises out of or is connected with the transaction or occurrence constituting the
subject matter of the opposing party’s claim and does not require for its adjudication the presence of third
parties of whom the court cannot acquire jurisdiction. Such a counterclaim must be within the jurisdiction
of the court both as to the amount and the nature thereof. Except that in an original action before the
Regional Trial Court, the counterclaim may be considered compulsory regardless of the amount.
Accordingly, a counterclaim is compulsory if: (a) it arises out of or is necessarily connected with the
transaction or occurrence which is the subject matter of the opposing party’s claim; (b) it does not require
for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction; and (c) the
court has jurisdiction to entertain the claim both as to its amount and nature, except that in an original
action before the RTC, the counterclaim may be considered compulsory regardless of the amount. 27
In determining whether a counterclaim is compulsory or permissive, We have, in several cases, utilized the
following tests:28
(1) Are the issues of fact or law raised by the claim and the counterclaim largely the same?
(2) Would res judicata bar a subsequent suit on defendant’s claims, absent the compulsory
counterclaim rule?
(3) Will substantially the same evidence support or refute plaintiff’s claim as well as the
defendant’s counterclaim?
(4) Is there any logical relation between the claim and the counterclaim, such that the conduct
of separate trials of the respective claims of the parties would entail a substantial duplication of
effort and time by the parties and the court? This test is the "compelling test of
compulsoriness."29
Based on the above tests, it is evident that a claim for recovery of the excess in the bid price vis-à-vis the
amount due should be interposed as a compulsory counterclaim in an action for recovery of a deficiency
filed by the mortgagee against the debtor-mortgagor. First, in both cases, substantially the same evidence is
needed in order to prove their respective claim. Second, adjudication in favor of one will necessarily bar
the other since these two actions are absolutely incompatible with each other; a debt cannot be fully paid
and partially unpaid at the same time. Third, these two opposing claims arose from the same set of
transactions. And finally, if these two claims were to be the subject of separate trials, it would definitely
entail a substantial and needless duplication of effort and time by the parties and the court, for said actions
would involve the same parties, the same transaction, and the same evidence. The only difference here
would be in the findings of the courts based on the evidence presented with regard to the issue of whether
or not the bid prices substantially cover the amounts due.
Having determined that a claim for recovery of an excess in the bid price should be set up in the action for
payment of a deficiency as a compulsory counterclaim, We rule that respondents failed to timely raise the
same.
It is elementary that a defending party’s compulsory counterclaim should be interposed at the time he files
his Answer,30 and that failure to do so shall effectively bar such claim.31 As it appears from the records,
what respondents initially claimed herein were moral and exemplary damages, as well as attorney’s
fees.32 Then, realizing, based on its computation, that it should have sought the recovery of the excess bid
price, respondents set up another counterclaim, this time in their Appellant’s Brief filed before the
CA.33 Unfortunately, respondents’ belated assertion proved fatal to their cause as it did not cure their
failure to timely raise such claim in their Answer. Consequently, respondents’ claim for the excess, if any,
is already barred. With this, we now resolve the substantive issues of this case.
The CA erred in ruling that the total amount due was PhP 12,891,397.78
Basic is the rule that a Petition for Review on Certiorari under Rule 45 of the Rules of Court should only
cover questions of law.34 Moreover, findings of fact of the CA are generally final and conclusive and this
Court will not review them on appeal.35 This rule, however, admits of several exceptions36 such as when
the findings of fact are conflicting, manifestly mistaken, unsupported by evidence or the result of a
misapprehension of acts, or when the findings are contrary to that of the trial court, as in this case.
To recall, the CA, in its assailed Decision, made the following findings as regards the amount due on the
loan against which the proceeds from the auction sales are to be applied:
In the application for extrajudicial foreclosure sale dated March 6, 1998, the total amount due as of
February 10, 1998 was stated to be ₱11,216,783.99. The plaintiff categorically declared that
₱11,216,783.99 was the total amount due on February 10, 1998. By the time the auction sales were
conducted, in May 1998, as reflected in the certificate of Sale, the principal amount was said to be
₱12,891,397.78. What is the meaning of the change from total amount due to principal amount? If from
February to May 1998, a matter of three months, the amount sought to be collected ballooned to
₱12,891,397.78, the increase could have resulted from no other source that the interest and other charges
under the promissory notes after the defendants incurred in default. Thus, the amount of ₱12,891,397.78 as
of May 1998, must mean the principal and interest and other charges. The statement in the certificates of
sale that it is the principal amount is a subtle change in language, a legerdemain to suggest that thte amount
does not include the interest and other charges.37
In short, the CA concluded that the amount of PhP 12,891,397.78 is actually comprised of the PhP
11,216,783.99 due as of February 10, 1998, plus additional interest and other charges that became due
from February 10, 1998 until the date of foreclosure on May 5, 1998.
The appellate court is mistaken.
By simply adding the figures stated in the PNs as the principal sum, it can readily be seen that the amount
of PhP 12,891,397.78 actually pertains to the aggregate value of the fifteen (15) PNs, viz:
 PN No. Amount MBTC failed to prove that there is a deficiency balance of PhP 2,628,520.73

To support its deficiency claim, petitioner presented a Statement of Account, 53 which referes to the
1. 277894 (BDS-143/97)38 P 6,500,000.00
amounts due as of May 5, 1998, the date of the first foreclosure sale, to wit:

2. 281728 (BD-216/97)39 P 959,034.20

Statement of Account as of May 05, 1998

3. 281735 (BD-222/97)40 P 508,580.83

PN No. Principal Amt Outs. PDI Penalty

4. 281736 (BD-225/97)41 P 291,732.50

1 BD#216/97 489,219.20 54,808.77 49,166.53

5. 281737 (BD-226/97)42 P 157,173.12

2 BD#222/97 167,289.35 18,613.61 16,310.71

6. 281745 (BD-229/97)43 P 449,812.25

3 BD#225/97 291,732.50 32,683.72 27,422.86

7. 281747 (BDS-94854.696.00.999)44 P 105,000.00

4 BD#226/97 44,694.50 5,007.24 4,201.28

8. 281746 (BD-236/97)45 P 525,233.93

5 BD#229/97 435,229.25 48,760.10 44,393.38

9. 281750 (BD-238/97)46 P 1,31,099.36

6 BD#238/97 365,238.55 40,918.83 33,236.71

10. 473410 (BD-239/97)47 P 251,725.00

7 BD#233/97 105,000.00 11,763.50 9,082.50

11. 473414 (BD-240/97)48 P 288,975.66

8 BD#244/97 62,982.53 7,056.13 5,290.53

12. 473412 (BD-244/97)49 P 62,982.53

9 BD#236/97 497,649.70 56,135.10 38,070.20

13. 473411 (BD-245/97)50 P 156,038.85

10 BD#240/97 145,950.00 16,463.20 11,165.18

14. 473413 (BD-251/97)51 P 767,512.30

11 BD#245/97 156,038.85 17,481.55 11,897.43

15. 473431 (BD-252/97)52 P 557,497.45

12 BD#239/97 210,421.50 22,605.52 15,360.77

TOTAL PRINCIPAL AMOUNT 12,897,397.78

13 BD#251/97 572,470.15 64,574.86 38,232.57

14 BD#252/97 557,497.45 47,896.46 31,110.63

This belies the findings of the CA that PhP 12, 891,397.78 is the resulting value of PhP 11,216,783.99 plus
interest and other charges. Consequently, the CA’s conclusion that there is an excess of PhP 722,602.22,
after deducting the amount of PhP 12,891,397.78 from the total bid price of PhP 13,614,000, is erroneous. 16 BDS#143/97 6,500,000.00 573,681.89 336,818.28

Nevertheless, while the CA’s factual finding as to the amount due is flawed, petitioner, as discussed below, 17 BDS#218/97 1,800,000.00 93,536.05 74,401.15
is still not entitled to the alleged deficiency balance of PhP 2,628,520.73.
18 Fire Insurance 49,238.69 0.00 1,698.73 11,216,783.99 threshold. How petitioner made the determination in its Statement of Account that the
principal amount due on the date of the auction sale is PhP 12,450,652.22 is then questionable, nay
impossible, unless respondents contracted another loan anew.
TOTAL 12,450,652.22 1,111,986.53 747,859.44

Moreover, the amounts petitioner itself supplied would result in the following computation:
GRAND TOTAL 14,310,498.19

PhP 11,216,783.99 Total outstanding obligation as of February 10, 1998

Applying the proceeds from the auction sales to the foregoing amount, according to petitioner, would result
in a deficiency balance of PhP 2,443,143.43. Afterwards, the amount allegedly earned interest for four (4) 1,373,238.04 Add: Alleged May 5, 1998 public auction sale expenses
months in the amount of PhP 185,337.30,54 bringing petitioner’s claim for deficiency judgment to a total of
PhP 2,628,520.73.55
(no consistent Add: Additional interests and charges earned between February 10, 1998 to May 5,
We are not convinced. data) 1998

We have already ruled in several cases56 that in extrajudicial foreclosure of mortgage, where the proceeds
of the sale are insufficient to pay the debt, the mortgagee has the right to recover the deficiency from the (no consistent
Subtotal: Amount due as of May 5, 1998
debtor.57 In ascertaining the deficit amount, Sec. 4, Rule 68 of the Rules of Court is elucidating, to wit: data)

Section 4. Disposition of proceeds of sale. – The amount realized from the foreclosure sale of the 10,374,000.00 Less: May 5 Bid Price to be applied to the amount due
mortgaged property shall, after deducting the costs of the sale, be paid to the person foreclosing the
mortgage, and when there shall be any balance or residue, after paying off the mortgage debt due, the same
shall be paid to junior encumbrancers in the order of their priority, to be ascertained by the court, or if there
be no such encumbrancers or there be a balance or residue after payment to them, then to the mortgagor or 419,166.67 Add: Alleged May 6, 1998 public auction sale expenses
his duly authorized agent, or to the person entitled to it.

(no consisted data) Add: Interests and charges earned from May 5 to 6, 1998
Verily, there can only be a deficit when the proceeds of the sale is not sufficient to cover (1) the costs of
foreclosure proceedings; and (2) the amount due to the creditor, inclusive of interests and penalties, if any,
at the time of foreclosure.
3,240,000.00 Less: May 6 Bid Price to be applied to the amount due

a. Petitioner failed to prove the amount due at the time of foreclosure

Having alleged the existence of a deficiency balance, it behooved petitioner to prove, at the very least, the
amount due at the date of foreclosure against which the proceeds from the auction sale would be applied.
Otherwise, there can be no basis for awarding the claimed deficiency balance. Unfortunately for petitioner,
it failed to substantiate the amount due as of May 5, 1998 as appearing in its Statement of Account.
To recall, MBTC admitted that the amount due as of February 10, 1998 is PhP 11,216,783.99,
inclusive of interests and charges. As alleged in the petition:
57. Firstly, it should be noted that respondents’ total unpaid obligations inclusive of interest and penalties
as of 10 February 1998 amounted to Php 11,216,783.99.1âwphi1 This amount was the subject of petitioner
Metrobank’s Petitioners for Extrajudicial Foreclosure of Mortgage and NOT Php 12,891,397.78 which is
the total principal amount of respondents’ loan obligations at the time when they obtained said loans as
shown in the Promissory Notes and the Certificates of Sale. After the execution of the Promissory
Notes, payments were made, although insufficient, which resulted in the balance of PhP
11,216,783.99 as of February 1998 inclusive of interest and penalties.58
If the total amount due as of February 10, 1998 is PhpP 11,216,783.99 is already inclusive of interests and
penalties, the principal amount, exclusive of interests and charges, would naturally be lower than the PhP
Total: Deficiency reflected in the Statement of Account from May 5 to September 18,
PhP 2,443,143.43
1998
As can be gleaned, petitioner failed to sufficiently explain during the proceedings how it came up with the
alleged "deficiency" in the amount of PhP 2,443,143.43, as per the Statement of Account. Reversing the
formula, petitioner’s claim would only be mathematically possible if the missing interest and
penalties for the three-month period-from February 10, 1998 to May 6, 1998-amounted to PhP
3,047,954,73,59 which is inconsistent with MBTC’s declaration in its Statement of Account as of May 5,
1998.60 Needless to say, this amount is not only unconscionable, it also finds no support from any of the
statement of accounts and loan stipulations agreed upon by the parties.
Given MBTC’s conflicting, if not irreconcilable, allegations as to the amount due as of the date of
foreclosure-as noted in the statement of accounts, the petition for foreclosure, and the promissory notes-the
computation offered by MBTC cannot be accepted at face value. Consequently, there can then be no basis
for determining the value of the additional interests and penalty charges that became due, and, more
importantly, whether or not there was indeed a deficiency balance at the time the mortgaged properties
were foreclosed.
In addition, it is noticeable that petitioner’s presentation of the computation is circuitous and needlessly Attorney’s Fees (10% of total amount claimed) 1,005,744.37
lengthened.1âwphi1As a matter of fact, nowhere in the petition, in its complaint,61 reply.62 pre-trial
brief,63 among others, did it make a simple computation of respondents’ obligation as well as the amounts Fire Insurance 50,937.42
to be applied to it, or even a summary thereof, when it could have easily done so.
Sub-total PhP 1,373,238.04
b. Petitioner failed to prove the amount of expenses incurred in foreclosing the mortgaged properties
May 6, 1998 auction sale expenses
another obstacle against petitioner’s claim for deficiency balance is the burden of proving the amount of
expenses incurred during the foreclosure sales. To recall, petitioner alleged that it incurred expenses
totaling PhP 1,373,238.04 and PhP 419,166.67 for the first and second public auction sales, respectively. Publication Expenses 24,267.75
However, in claiming that there is a deficiency, petitioner only submitted the following pieces of evidence,
to wit: Sheriff’s Commission on Sale 64,880.00

1. The fifteen (15) promissory notes (Exhibits A to O); Registration fee and other Miscellaneous Expenses 16,593.00

2. Continuing Surety Agreement (Exhibit P); Attorney’s Fees (10% of total amount claimed) 313,425.92

3. Real Estate Mortgage (Exhibits Q & R); Sub-total 419,166.67

4. Petition for Sale under Act. No. 3135, as amended (Exhibit S);

Petitioner’s argument is untenable.

5. Notices of Sheriff’s Sale (Exhibits T & U);

First, the Court cannot take judicial notice of the attorney’s fees being claimed by petitioner because
6. Affidavit of Publication (Exhibits V & W); although 10% was the rate agreed upon by the parties, We have, in a line of cases, held that the percentage
to be charged can still be fixed by the Court. For instance, in Mambulao Lumber Company v. Philippine
7. Certificates of Posting and a Xerox copy thereof (exhibits X & Y); National Bank,65 the Court held:

8. Certificates of Sale (Exhibits Z & AA); In determining the compensation of an attorney, the following circumstances should be considered: the
amount and character of the services rendered; the responsibility imposed; the amount of money or the
value of the property affected by the controversy, or involved in the employment; the skill and experience
9. Demand Letters (Exhibits BB & CC); and called for in the performance of the service; the professional standing of the attorney; the results secured;
and whether or not the fee is contingent or absolute, it being a recognized rule that an attorney may
10. Statement of Account (Exhibit DD). properly charge a much larger fee when it is to be contingent that when it is not. From the stipulation in the
mortgage contract earlier quoted, it appears that the agreed fee is 10% of the total mortgage is to be
effected. The agreement is perhaps fair enough in case the foreclosure proceedings is prosecuted judicially
Curiously, petitioner never offered as evidence receipts proving payment of filing fees, publication but, surely, it is unreasonable when, as in this case, the mortgage was foreclosed extra-judicially, and all
expenses, Sheriff’s Commission on Sale, attorney’s fee, registration fee for the Certificate of Sale, that the attorney did was to file a petition for foreclosure with the sheriff concerned.
insurance premium and other miscellaneous expenses, all of which MBTC claims that it incurred. Instead,
petitioner urges the Court to take judicial notice of the following expenses:64
Similarly, in Bank of the Philippine Islands, Inc. v. Spouses Norman and Angelina Yu, 66 the Court reduced
the claim for attorney’s fees from 10% to 1% based on the following reasons: (1) attorney’s fee is not
May 5, 1998 auction sale expenses essential to the cost of borrowing, but a mere incident of collection; (2) 1% is just and adequate because
the mortgagee bank had already charged foreclosure expenses; (3) attorney’s fee of 10% of the total
Filing Fee PhP 52,084.00 amount due is onerous considering the rote effort that goes into extrajudicial foreclosures.

Publication Expenses 24,267.75 Second, the Court cannot also take judicial notice of the expenses incurred by petitioner in causing the
publication of the notice of foreclosure and the cost of insurance. This is so because there are no standard
Sheriff’s Commission on Sale 207,560.00 rates cited or mentioned by petitioner that would allow Us to take judicial notice of such expenses. It is not
unthinkable that the cost of publication would vay from publisher to publisher, and would depend on
Registration fee and other Miscellaneous Expenses 32,644.50
several factors, including the size of the publication space. Insurance companies also have their own
computations on the insurance premiums to be paid by the insurer, which the courts cannot be expected to
be knowledgeable of. To be sure, in arguing the Court to take judicial notice of the alleged expenses,
MBTC merely cited Sec. 3 of Act 3135 requiring publication and the mortgage agreement provision on the
insurance requirement, without more.67 Said provisions never expressly provided for the actual cost of
publication and insurance, nor any formulae for determining the same. Thus, the claims for publication and
insurance expenses ought to be disallowed.

Third, the claims for registration fees and miscellaneous expenses were also never substantiated by
receipts.

Conclusion

In demanding payment of a deficiency in an extrajudicial foreclosure of mortgage, proving that there is

indeed one and what its exact amount is, is naturally a precondition thereto. The same goes with a claim for
reimbursement of foreclosure expenses, as here. In this regard, it is elementary that the burden to prove a
claim rests on the party asserting such. Ei incumbit probation qui dicit, non qui negat. He who asserts, not
he who denies, must prove.68 For having failed to adequately substantiate its claims, We cannot sustain the
finding of the trial court that respondents are liable for the claimed deficiency, inclusive of foreclosure
expenses. Neither can We sustain the CA’s finding that respondents are entitled to the recovery of the
alleged excess payment.

In light of the foregoing, the Court need not belabor the other assigned errors.

WHEREFORE, premises considered, the instant petition is hereby PARTIALLY GRANTED.

Accordingly, the Decision of the Court of Appeals dated September 28, 2011 in CA-G.R. CV No. 91424
and its February 13, 2012 Resolution are hereby AFFIRMED with MODIFICATION. The award of refund
in favor of respondents in the amount of ₱722,602.22 with legal interest of six percent (6%) per annum is
hereby DELETED.

No pronouncement as to costs.

SO ORDERED.

G.R. No. 151334 February 13, 2013
CAROLINA (CARLINA) VDA. DE FIGURACION, HEIRS OF ELENA FIGURACION-
ANCHETA, namely: LEONCIO ANCHETA, JR., and ROMULO ANCHETA, HEIRS OF
HILARIA A. FIGURACION, namely: FELIPA FIGURACION-MANUEL, MARY FIGURACION-
GINEZ, and EMILIA FIGURACION-GERILLA, AND HEIRS OF QUINTIN FIGURACION,
namely: LINDA M. FIGURACION, LEANDRO M. FIGURACION, II, and ALLAN M.
FIGURACION, Petitioners,
vs.
EMILIA FIGURACION-GERILLA, Respondent.
DECISION
REYES, J.:
At bar is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, assailing the
Decision2 dated December 11, 2001 of the Court of Appeals (CA) in CA-G.R. CV No. 58290, which
reversed and set aside the Decision3 dated June 26, 1997 of the Regional Trial Court (RTC) of Urdaneta,
Pangasinan, Branch 49. The RTC decision (1) dismissed respondent Emilia Figuracion-Gerilla’s (Emilia)
complaint for partition, annulment of documents, reconveyance, quieting of title and damages, and (2)
annulled the Affidavit of Self-Adjudication executed by petitioner Carolina (Carlina) Vda. De Figuracion
(Carolina).
The Facts
The parties are the heirs of Leandro Figuracion (Leandro) who died intestate in May 1958. Petitioner
Carolina is the surviving spouse. The other petitioners – Elena Figuracion-Ancheta, Hilaria A. Figuracion
(Hilaria), Felipa Figuracion-Manuel (Felipa), Quintin Figuracion, and Mary Figuracion-Ginez – and
respondent Emilia were Carolina and Leandro’s children.4
Subject of the dispute are two parcels of land both situated in Urdaneta, Pangasinan, which were acquired
by Leandro during his lifetime. These properties were: (1) Lot No. 2299 with a land area of 7,547 square
meters originally covered by Transfer Certificate of Title (TCT) No. 4221-P;5 and (2) Lot No. 705
measuring 2,900 square meters and covered by TCT No. 4220-P. Both lands were registered in the name of
"Leandro Figuracion married to Carolina Adviento". Leandro executed a Deed of Quitclaim over the above
real properties in favor of his six (6) children on August 23, 1955. Their shares, however, were not
delineated with particularity because spouses Leandro and Carolina reserved the lots and its fruits for their
expenses.
Also involved in the controversy is Lot No. 707 of the Cadastral Survey of Urdaneta, Pangasinan, with an
area of 3,164 square meters originally owned by Eulalio Adviento (Eulalio), covered by Original
Certificate of Title (OCT) No. 15867 issued in his name on August 21, 1917. Eulalio begot Agripina
Adviento (Agripina) with his first wife Marcela Estioko (Marcela), whom Eulalio survived. When he
remarried, Eulalio had another daughter, herein petitioner Carolina, with his second wife, Faustina
Escabesa (Faustina).6
On November 28, 1961, Agripina7 executed a Deed of Quitclaim8 over the eastern half of Lot No. 707 in
favor of her niece, herein respondent Emilia.
Soon thereafter or on December 11, 1962, petitioner Carolina executed an Affidavit of Self-
Adjudication9adjudicating unto herself the entire Lot No. 707 as the sole and exclusive heir of her deceased
parents, Eulalio and Faustina.10 On the same date, Carolina also executed a Deed of Absolute Sale11 over
Lot No. 707 in favor of petitioners Hilaria and Felipa, who in turn immediately caused the cancellation of
OCT No. 15867 and the issuance of TCT No. 42244 in their names. 12
In 1971, Emilia and her family went to the United States and returned to the Philippines only in 1981.
Upon her return and relying on the Deed of Quitclaim, she built a house on the eastern half of Lot No.
707.13
The legal debacle of the Figuracions started in 1994 when Hilaria and her agents threatened to demolish
the house of Emilia who, in retaliation, was prompted to seek the partition of Lot No. 707 as well as Lot
Nos. 2299 and 705. The matter was initially brought before the Katarungang Pambarangay, but no
amicable settlement was reached by the parties.14 On May 23, 1994, respondent Emilia instituted the herein
Complaint15 for the partition of Lot Nos. 2299, 705 and 707, annulment of the Affidavit of Self-
Adjudication, Deed of Absolute Sale and TCT No. 42244, reconveyance of eastern half portion of Lot No.
707, quieting of title and damages.
In opposition, the petitioners averred the following special and affirmative defenses: (1) the respondent’s
cause of action had long prescribed and that she is guilty of laches hence, now estopped from bringing the
suit; (2) TCT No. 42244 in the name of Felipa and Hilaria have already attained indefeasibility and
conclusiveness as to the true owners of Lot No. 707; and (3) an action for partition is no longer tenable
because Felipa and Hilaria have already acquired rights adverse to that claimed by respondent Emilia and
the same amount to a repudiation of the alleged co-ownership.16
During pre-trial conference, the issues were simplified into: (1) whether or not Lot Nos. 2299 and 705 are
the exclusive properties of Leandro; and (2) whether or not respondent Emilia is the owner of the eastern
half of Lot No. 707.17
On the basis of the evidence adduced by the parties, the RTC rendered its Decision dated June 26, 1997
disposing as follows:
WHEREFORE, premises considered, the complaint for partition, reconveyance, quieting of title and
damages is hereby ordered dismissed whereas the affidavit of self-adjudication[,] deed of sale and the
transfer certificate of title involving Lot 707 are hereby declared null and void.
No costs.
SO ORDERED.18
The RTC ruled that a partition of Lot Nos. 2299 and 705 will be premature since their ownership is yet to
be transmitted from Leandro to his heirs whose respective shares thereto must still be determined in estate
settlement proceedings. Anent Lot No. 707, the RTC held that petitioner Carolina transferred only her one-
half (½) share to Felipa and Hilaria and any conveyance of the other half pertaining to Agripina was void.
While the RTC nullified the Affidavit of Self-Adjudication, Deed of Absolute Sale and TCT No. 42244, it
refused to adjudicate the ownership of the lot’s eastern half portion in favor of respondent Emilia since a
settlement of the estate of Eulalio is yet to be undertaken.19
Respondent Emilia appealed to the CA, which, in its Decision dated December 11, 2001, ruled that the
RTC erred in refusing to partition Lot No. 707. The CA explained that there is no necessity for placing Lot
No. 707 under judicial administration since Carolina had long sold her ½ pro indiviso share to Felipa and
Hilaria. Thus, when Carolina sold the entire Lot No. 707 on December 11, 1962 as her own, the sale
affected only her share and not that belonging to her co-owner, Agripina. The proper action in such case is
not the nullification of the sale, or for the recovery of possession of the property owned in common from
the third person, but for a division or partition of the entire lot. Such partition should result in segregating
the portion belonging to the seller and its delivery to the buyer.
The CA, however, agreed with the RTC that a partition of Lot Nos. 2299 and 705 is indeed premature
considering that there is a pending legal controversy with respect to Lot No. 705 and the accounting of the
income from Lot No. 2299 and of the expenses for the last illness and burial of Leandro and Carolina, for
which the lots appear to have been intended.
Accordingly, the decretal portion of the CA decision reads:
WHEREFORE, premises considered, the present appeal is hereby GRANTED and the decision appealed
from in Civil Case No. U-5826 is hereby VACATED and SET ASIDE. A new judgment is hereby
rendered declaring Lot No. 707 covered by TCT No. 42244 to be owned by appellant Emilia Figuracion-
Gerilla [herein respondent], ½ pro indiviso share, appellee Felipa Figuracion [herein petitioner], ¼ pro
indiviso share, and appellee Hilaria Figuracion [herein petitioner], ¼ pro indiviso share, who are hereby
directed to partition the same and if they could not agree on a partition, they may petition the trial court for
the appointment of a commissioner to prepare a project of partition, in accordance with the procedure as
provided in Rule 69 of the 1997 Rules of Civil Procedure, as amended.
No pronouncement as to costs.
SO ORDERED.20
Respondent Emilia appealed the CA’s decision to the Court, docketed as G.R. No. 154322. In a Decision
promulgated on August 22, 2006, the Court denied the appeal, concurring with the CA’s ruling that a
partition of Lot Nos. 2299 and 705 would be inappropriate considering that: (1) the ownership of Lot No.
705 is still in dispute; and (2) there are still unresolved issues as to the expenses chargeable to the estate of
Leandro.
The present petition involves the appeal of the petitioners who attribute this sole error committed by the
CA:
THE DECISION RENDERED BY THE HONORABLE COURT OF APPEALS IS CONTRARY TO
LAW AND EXISTING JURISPRUDENTIAL DICTA LAID DOWN BY THE HONORABLE
SUPREME COURT.21
In view of the Court’s ruling in G.R. No. 154322, the ensuing discussion shall concern only Lot No. 707.
The Arguments of the Parties
The petitioners argue that respondent Emilia has no valid basis for her claim of ownership because
the Deed of Quitclaim executed in her favor by Agripina was in fact a deed of donation that contained no
acceptance and thus, void. The petitioners attached a copy of the Deed of Quitclaim and stressed on the
following portions, viz:
I, AGRIPINA ESTIOKO ADVIENTO, of le[ga]l age, Filipino citizen, single and a resident [of] San
Vicenter (sic), Urdaneta City, Pangasinan, for and in consideration of the sum of ONE PESO ([P]1.00),
Philippine Currency and the services rendered by my niece EMILIA FIGURACION, 20 years old, single,
Filipino citizen and a resident of San Vicente, Urdaneta City, Pangasinan, do hereby by these presentsw
(sic) RENOUNCE, RELEASE and forever QUITCLAIM in favor of EMILIA FIGURACION, her heirs,
and assigns the ONE[-]HALF (1/2) eastern portion of the following parcel of land more particularly
described and bounded as follows to wit[.]22
They further aver that the Deed of Quitclaim is riddled with defects that evoke questions of law,
because: (a) it has not been registered with the Register of Deeds, albeit, allegedly executed as early as
1961; (b) a certification dated June 3, 2003 issued by the Office of the Clerk of Court (OCC) of the RTC of
Urdaneta, Pangasinan, shows that it does not have a copy of the Deed of Quitclaim; (c) the Office of the
National Archives which is the depository of old and new notarized documents has no record of the Deed
of Quitclaim as evidenced by a certification dated May 19, 2003;23 and (d) Atty. Felipe V. Abenojar, who
supposedly notarized the Deed of Quitclaim was not commissioned to notarize in 1961 per the certification
dated June 9, 2003 from the OCC of the RTC of Urdaneta, Pangasinan. 24
Respondent Emilia, on the other hand, contends that the Deed of Quitclaim should be considered an
onerous donation that requires no acceptance as it is governed by the rules on contracts and not by the
formalities for a simple donation.25
The Court’s Ruling
Issues not raised before the courts a quo cannot be raised for the first time in a petition filed under
Rule 45
Records show that there is a palpable shift in the defense raised by the petitioners before the RTC and the
CA.
In the Pre-Trial Order26 of the RTC dated April 4, 1995, the parties agreed to limit the issue with regard to
Lot No. 707 as follows: whether or not respondent Emilia is the owner of the eastern half portion of Lot
No. 707. The petitioners’ supporting theory for this issue was that "the Deed of Quitclaim dated November
28, 1961 was rendered ineffective by the issuance of [TCT No. 42244] in the name of Felipa and
Hilaria."27 On appeal to the CA, however, the petitioners raised a new theory by questioning the execution
and enforceability of the Deed of Quitclaim. They claimed that it is actually a donation that was not
accepted in the manner required by law.28
The inconsistent postures taken by the petitioners breach the basic procedural tenet that a party cannot
change his theory on appeal as expressly adopted in Rule 44, Section 15 of the Rules of Court, which
reads:
Sec. 15. Questions that may be raised on appeal.  Whether or not the appellant has filed a motion for new
trial in the court below, he may include in his assignment of errors any question of law or fact that has been
raised in the court below and which is within the issues framed by the parties.
Fortifying the rule, the Court had repeatedly emphasized that defenses not pleaded in the answer may not
be raised for the first time on appeal. When a party deliberately adopts a certain theory and the case is
decided upon that theory in the court below, he will not be permitted to change the same on appeal,
because to permit him to do so would be unfair to the adverse party. 29 The Court had likewise, in numerous
times, affirmed that points of law, theories, issues and arguments not brought to the attention of the lower
court need not be, and ordinarily will not be, considered by a reviewing court, as these cannot be raised for
the first time at such late stage. Basic considerations of due process underlie this rule. It would be unfair to
the adverse party who would have no opportunity to present further evidence material to the new theory,
which it could have done had it been aware of it at the time of the hearing before the trial court. 30
While a party may change his theory on appeal when the factual bases thereof would not require
presentation of any further evidence by the adverse party in order to enable it to properly meet the issue
raised in the new theory,31this exception does not, however, obtain in the case at hand.
Contrary to the petitioners’ assertion, the Court finds that the issues on the supposed defects and actual
nature of the Deed of Quitclaim are questions of fact that require not only a review or re-evaluation of the
evidence already adduced by the parties but also the reception of new evidence as the petitioners
themselves have acknowledged when they attached in the petition several certifications 32 in support of their
new argument. It is settled that questions of fact are beyond the province of a Rule 45 petition since the
Court is not a trier of facts.33
Accordingly, the Court will not give due course to the new issues raised by the petitioners involving the
nature and execution of the Deed of Quitclaim. For their failure to advance these questions during trial, the
petitioners are now barred by estoppel34 from imploring an examination of the same.
The respondent can compel the
partition of Lot No. 707
The first stage in an action for partition is the settlement of the issue of ownership. Such an action will not
lie if the claimant has no rightful interest in the subject property. In fact, the parties filing the action are
required by the Rules of Court to set forth in their complaint the nature and the extent of their title to the
property. It would be premature to effect a partition until and unless the question of ownership is first
definitely resolved.35
Here, the respondent traces her ownership over the eastern half of Lot No. 707 from the Deed of
Quitclaim executed by Agripina, who in turn, was the co-owner thereof being one of the legitimate heirs of
Eulalio. It is well to recall that the petitioners failed to categorically dispute the existence of the Deed of
Quitclaim. Instead, they averred that it has been rendered ineffective by TCT No. 42244 in the name of
Felipa and Hilaria―this contention is, of course, flawed.
Mere issuance of a certificate of title in the name of any person does not foreclose the possibility that the
real property may be under coownership with persons not named in the certificate, or that the registrant
may only be a trustee, or that other parties may have acquired interest over the property subsequent to the
issuance of the certificate of title.36 Stated differently, placing a parcel of land under the mantle of the
Torrens system does not mean that ownership thereof can no longer be disputed. The certificate cannot
always be considered as conclusive evidence of ownership.37 In this case, co-ownership of Lot No. 707
was precisely what respondent Emilia was able to successfully establish, as correctly found by the
RTC and affirmed by the CA.
The status of Agripina and Carolina as the legitimate heirs of Eulalio is an undisputed fact. As such heirs,
they became co-owners of Lot No. 707 upon the death of Eulalio on July 20, 1930. Since Faustina was
predeceased by Eulalio, she likewise became a co-owner of the lot upon Eulalio’s death. Faustina’s share,
however, passed on to her daughter Carolina when the former died on October 18, 1949. The Affidavit of
Self-Adjudication executed by Carolina did not prejudice the share of Agripina because it is not legally
possible for one to adjudicate unto himself an entire property he was not the sole owner of. A co-owner
cannot alienate the shares of her other co-owners – nemo dat qui non habet.38
Hence, Lot No. 707 was a co-owned property of Agripina and Carolina. As co-owners, each of them had
full ownership of her part and of the fruits and benefits pertaining thereto. Each of them also had the right
to alienate the lot but only in so far as the extent of her portion was affected.39
Thus, when Carolina sold the entire Lot No. 707 on December 11, 1962 to Hilaria and Felipa without the
consent of her co-owner Agripina, the disposition affected only Carolina’s pro indiviso share, and the
vendees, Hilaria and Felipa, acquired only what corresponds to Carolina’s share. A co-owner is entitled to
sell his undivided share; hence, a sale of the entire property by one co-owner without the consent of the
other co-owners is not null and void and only the rights of the co-owner/seller are transferred, thereby
making the buyer a co-owner of the property.40
Accordingly, the deed of sale executed by Carolina in favor of Hilaria and Felipa was a valid conveyance
but only insofar as the share of Carolina in the co-ownership is concerned. As Carolina’s successors-in-
interest to the property, Hilaria and Felipa could not acquire any superior right in the property than what
Carolina is entitled to or could transfer or alienate after partition.
In a contract of sale of co-owned property, what the vendee obtains by virtue of such a sale are the same
rights as the vendor had as co-owner, and the vendee merely steps into the shoes of the vendor as co-
owner.41 Hilaria and Felipa did not acquire the undivided portion pertaining to Agripina, which has already
been effectively bequeathed to respondent Emilia as early as November 28, 1961 thru the Deed of
Quitclaim. In turn, being the successor-in-interest of Agripina’s share in Lot No. 707, respondent Emilia
took the former’s place in the co-ownership and as such co-owner, has the right to compel partition at any
time.42
The respondent’s right to demand
for partition is not barred by
acquisitive prescription or laches
The petitioners posit that the issuance of TCT No. 42244 in the name of Hilaria and Felipa over Lot No.
707 on December 11, 1962 was an express repudiation of the co-ownership with respondent Emilia.
Considering the period of time that has already lapsed since then, acquisitive prescription has already set in
and the respondent is now barred by laches from seeking a partition of the subject lot.
The contention is specious.
Co-heirs or co-owners cannot acquire by acquisitive prescription the share of the other co-heirs or co-
owners absent a clear repudiation of the co ownership.43 The act of repudiation, as a mode of terminating
co-ownership, is subject to certain conditions, to wit: (1) a co-owner repudiates the co-ownership; (2) such
an act of repudiation is clearly made known to the other co-owners; (3) the evidence thereon is clear and
conclusive; and (4) he has been in possession through open, continuous, exclusive, and notorious
possession of the property for the period required by law.44
The petitioners failed to comply with these conditions. The act of Hilaria and Felipa in effecting the
registration of the entire Lot No. 707 in their names thru TCT No. 42244 did not serve to effectively
repudiate the co-ownership. The respondent built her house on the eastern portion of the lot in 1981
without any opposition from the petitioners. Hilaria also paid realty taxes on the lot, in behalf of the
respondent, for the years 1983-1987.45 These events indubitably show that Hilaria and Felipa failed to
assert exclusive title in themselves adversely to Emilia. Their acts clearly manifest that they recognized the
subsistence of their co-ownership with respondent Emilia despite the issuance of TCT No. 42244 in 1962.
Their acts constitute an implied recognition of the co-ownership which in turn negates the presence of a
clear notice of repudiation to the respondent. To sustain a plea of prescription, it must always clearly
appear that one who was originally a joint owner has repudiated the claims of his co-owners, and that his
co-owners were apprised or should have been apprised of his claim of adverse and exclusive ownership
before the alleged prescriptive period began to run.46
In addition, when Hilaria and Felipa registered the lot in their names to the exclusion of Emilia, an implied
trust was created by force of law and the two of them were considered a trustee of the respondent’s
undivided share.47 As trustees, they cannot be permitted to repudiate the trust by relying on the registration. conjugal partnership and his usufructuary right over the other half were brought into his second marriage
In Ringor v. Ringor,48 the Court had the occasion to explain the reason for this rule: with Faustina.59

A trustee who obtains a Torrens title over a property held in trust for him by another cannot
repudiate the trust by relying on the registration. A Torrens Certificate of Title in Jose’s name did not
vest ownership of the land upon him. The Torrens system does not create or vest title. It only confirms and
records title already existing and vested. It does not protect a usurper from the true owner. The Torrens
system was not intended to foment betrayal in the performance of a trust. It does not permit one to enrich
himself at the expense of another. Where one does not have a rightful claim to the property, the Torrens
system of registration can confirm or record nothing. Petitioners cannot rely on the registration of the lands
in Jose’s name nor in the name of the Heirs of Jose M. Ringor, Inc., for the wrong result they seek. For
Jose could not repudiate a trust by relying on a Torrens title he held in trust for his co-heirs.1âwphi1 The
beneficiaries are entitled to enforce the trust, notwithstanding the irrevocability of the Torrens title. The
intended trust must be sustained.49 (Citations omitted and emphasis ours)
Further, records do not reflect conclusive evidence showing the manner of occupation and possession
exercised by Hilaria and Felipa over the lot from the time it was registered in their names. The only
evidence of possession extant in the records dates back only to 1985 when Hilaria and Felipa declared the
lot in their names for taxation purposes.50 Prescription can only produce all its effects when acts of
ownership, or in this case, possession, do not evince any doubt as to the ouster of the rights of the other co-
owners. Hence, prescription among co-owners cannot take place when acts of ownership exercised are
vague or uncertain.51
Moreover, the evidence relative to the possession, as a fact upon which the alleged prescription is based,
must be clear, complete and conclusive in order to establish said prescription without any shadow of doubt;
and when upon trial it is not shown that the possession of the claimant has been adverse and exclusive and
opposed to the rights of the others, the case is not one of ownership, and partition will lie.52 The petitioners
failed to muster adequate evidence of possession essential for the reckoning of the 10-year period for
acquisitive prescription.
The express disavowal of the co-ownership did not happen on December 11, 1962 when TCT No. 42244
was issued but in 1994 when Hilaria attempted to demolish Emilia’s house thus explicitly excluding her
from the co-ownership. It was the only time that Hilaria and Felipa made known their denial of the co-
ownership. On the same year, the respondent instituted the present complaint for partition; hence, the
period required by law for acquisitive period to set in was not met.
Anent laches, the Court finds it unavailing in this case in view of the proximity of the period when the co-
ownership was expressly repudiated and when the herein complaint was filed. Laches is the negligence or
omission to assert a right within a reasonable time, warranting a presumption that the party entitled to
assert it has abandoned it or declined to assert it.53 More so, laches is a creation of equity and its
application is controlled by equitable considerations. It cannot be used to defeat justice or perpetrate fraud
and injustice. Neither should its application be used to prevent the rightful owners of a property from
recovering what has been fraudulently registered in the name of another.54
When Eulalio died on July 20, 1930, ¼ portion of the lot was reserved for Faustina as her share in the
conjugal partnership.60 The remaining ¼ were transmitted equally to the widow Faustina and Eulalio’s
children, Carolina and Agripina.61 However, Faustina is only entitled to the usufruct of the third available
for betterment.62
The usufructuary of Eulalio over the ½ portion inherited by Agripina earlier was merged with her naked
ownership.63Upon the death of Faustina, the shares in Lot No. 707 which represents her share in the
conjugal partnership and her inheritance from Eulalio were in turn inherited by Carolina64 including
Faustina’s usufructuary rights which were merged with Carolina’s naked ownership. 65
Consequently, Agripina is entitled to 5/8 portion of Lot No. 707 while the remaining 3/8 pertains to
Carolina. Thus, when Carolina sold Lot No. 707 to Hilaria and Felipa, the sale affected only 3/8 portion of
the subject lot. Since the Deed of Quitclaim, bequeathed only the ½ eastern portion of Lot No. 707 in favor
of Emilia instead of Agripina’s entire 5/8 share thereof, the remaining 1/8 portion shall be inherited by
Agripina’s nearest collateral relative,66 who, records show, is her sister Carolina.
In sum, the CA committed no reversible error in holding that the respondent is entitled to have Lot No. 707
partitioned. The CA judgment must, however, be modified to conform to the above-discussed
apportionment of the lot among Carolina, Hilaria, Felipa and Emilia.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. CV No.
58290 dated December 11, 2001, is AFFIRMED with MODIFICATIONS as follows: (1) 3/8 portion of
Lot No. 707 shall pertain in equal shares to Hilaria Figuracion and Felipa Figuracion-Manuel; (2) ½
portion of Lot. No. 707 shall pertain to Emilia Figuracion-Gerilla; and (3) 1/8 portion of Lot No. 707 shall
pertain to the estate of Carolina (Carlina) Vda. De Figuracion. The case is REMANDED to the Regional
Trial Court of Urdaneta, Pangasinan, Branch 49, who is directed to conduct a PARTITION BY
COMMISSIONERS and effect the actual physical partition of the subject property, as well as the
improvements that lie therein, in the foregoing manner. The trial court is DIRECTED to appoint not more
than three (3) competent and disinterested persons, who should determine the technical metes and bounds
of the property and the proper share appertaining to each co-owner, including the improvements, in
accordance with Rule 69 of the Rules of Court. When it is made to appear to the commissioners that the
real estate, or a portion thereof, cannot be divided without great prejudice to the interest of the parties, the
court a quo may order it assigned to one of the parties willing to take the same, provided he pays to the
other parties such sum or sums of money as the commissioners deem equitable, unless one of the parties
interested ask that the property be sold instead of being so assigned, in which case the court shall order the
commissioners to sell the real estate at public sale, and the commissioners shall sell the same accordingly,
and thereafter distribute the proceeds of the sale appertaining to the just share of each co-owner. No
pronouncement as to costs.
SO ORDERED.

Partition of Lot No. 707

Under the Old Civil Code55 which was then in force at the time of Eulalio and Marcela’s marriage, Lot No.
707 was their conjugal property.56 When Marcela died, one-half of the lot was automatically reserved to
Eulalio, the surviving spouse, as his share in the conjugal partnership. 57 Marcela’s rights to the other half,
in turn, were transmitted to her legitimate child, Agripina and surviving spouse Eulalio.58 Under Article
834 of the Old Civil Code, Eulalio was entitled only to the usufruct of the lot while the naked ownership
belonged to Agripina. When he remarried, Eulalio’s one half portion of the lot representing his share in the

G.R. No. 168970 January 15, 2010
CELESTINO BALUS, Petitioner,
vs.
SATURNINO BALUS and LEONARDA BALUS VDA. DE CALUNOD, Respondents.
DECISION
PERALTA, J.:
Assailed in the present petition for review on certiorari under Rule 45 of the Rules of Court is the
Decision1 of the Court of Appeals (CA) dated May 31, 2005 in CA-G.R. CV No. 58041 which set aside the
February 7, 1997 Decision of the Regional Trial Court (RTC) of Lanao del Norte, Branch 4 in Civil Case
No. 3263.
The facts of the case are as follows:
Herein petitioner and respondents are the children of the spouses Rufo and Sebastiana Balus. Sebastiana
died on September 6, 1978, while Rufo died on July 6, 1984.
On January 3, 1979, Rufo mortgaged a parcel of land, which he owns, as security for a loan he obtained
from the Rural Bank of Maigo, Lanao del Norte (Bank). The said property was originally covered by
Original Certificate of Title No. P-439(788) and more particularly described as follows:
A parcel of land with all the improvements thereon, containing an area of 3.0740 hectares, more or less,
situated in the Barrio of Lagundang, Bunawan, Iligan City, and bounded as follows: Bounded on the NE.,
along line 1-2, by Lot 5122, Csd-292; along line 2-12, by Dodiongan River; along line 12-13 by Lot 4649,
Csd-292; and along line 12-1, by Lot 4661, Csd-292. x x x 2
Rufo failed to pay his loan. As a result, the mortgaged property was foreclosed and was subsequently sold
to the Bank as the sole bidder at a public auction held for that purpose. On November 20, 1981, a
Certificate of Sale3 was executed by the sheriff in favor of the Bank. The property was not redeemed
within the period allowed by law. More than two years after the auction, or on January 25, 1984, the sheriff
executed a Definite Deed of Sale4 in the Bank's favor. Thereafter, a new title was issued in the name of the
Bank.
On October 10, 1989, herein petitioner and respondents executed an Extrajudicial Settlement of
Estate5adjudicating to each of them a specific one-third portion of the subject property consisting of 10,246
square meters. The Extrajudicial Settlement also contained provisions wherein the parties admitted
knowledge of the fact that their father mortgaged the subject property to the Bank and that they intended to
redeem the same at the soonest possible time.
Three years after the execution of the Extrajudicial Settlement, herein respondents bought the subject
property from the Bank. On October 12, 1992, a Deed of Sale of Registered Land 6 was executed by the
Bank in favor of respondents. Subsequently, Transfer Certificate of Title (TCT) No. T-39,484(a.f.)7 was
issued in the name of respondents. Meanwhile, petitioner continued possession of the subject lot.
On June 27, 1995, respondents filed a Complaint8 for Recovery of Possession and Damages against
petitioner, contending that they had already informed petitioner of the fact that they were the new owners
of the disputed property, but the petitioner still refused to surrender possession of the same to them.
Respondents claimed that they had exhausted all remedies for the amicable settlement of the case, but to no
avail.
On February 7, 1997, the RTC rendered a Decision9 disposing as follows:
WHEREFORE, judgment is hereby rendered, ordering the plaintiffs to execute a Deed of Sale in favor of
the defendant, the one-third share of the property in question, presently possessed by him, and described in
the deed of partition, as follows:
A one-third portion of Transfer Certificate of Title No. T-39,484 (a.f.), formerly Original Certificate of
Title No. P-788, now in the name of Saturnino Balus and Leonarda B. Vda. de Calunod, situated at
Lagundang, Bunawan, Iligan City, bounded on the North by Lot 5122; East by shares of Saturnino Balus
and Leonarda Balus-Calunod; South by Lot 4649, Dodiongan River; West by Lot 4661, consisting of
10,246 square meters, including improvements thereon.
and dismissing all other claims of the parties.
The amount of ₱6,733.33 consigned by the defendant with the Clerk of Court is hereby ordered delivered
to the plaintiffs, as purchase price of the one-third portion of the land in question.
Plaintiffs are ordered to pay the costs.
SO ORDERED.10
The RTC held that the right of petitioner to purchase from the respondents his share in the disputed
property was recognized by the provisions of the Extrajudicial Settlement of Estate, which the parties had
executed before the respondents bought the subject lot from the Bank.
Aggrieved by the Decision of the RTC, herein respondents filed an appeal with the CA.
On May 31, 2005, the CA promulgated the presently assailed Decision, reversing and setting aside the
Decision of the RTC and ordering petitioner to immediately surrender possession of the subject property to
the respondents. The CA ruled that when petitioner and respondents did not redeem the subject property
within the redemption period and allowed the consolidation of ownership and the issuance of a new title in
the name of the Bank, their co-ownership was extinguished.
Hence, the instant petition raising a sole issue, to wit:
WHETHER OR NOT CO-OWNERSHIP AMONG THE PETITIONER AND THE RESPONDENTS
OVER THE PROPERTY PERSISTED/CONTINUED TO EXIST (EVEN AFTER THE TRANSFER OF
TITLE TO THE BANK) BY VIRTUE OF THE PARTIES' AGREEMENT PRIOR TO THE
REPURCHASE THEREOF BY THE RESPONDENTS; THUS, WARRANTING THE PETITIONER'S
ACT OF ENFORCING THE AGREEMENT BY REIMBURSING THE RESPONDENTS OF HIS
(PETITIONER'S) JUST SHARE OF THE REPURCHASE PRICE.11
The main issue raised by petitioner is whether co-ownership by him and respondents over the subject
property persisted even after the lot was purchased by the Bank and title thereto transferred to its name,
and even after it was eventually bought back by the respondents from the Bank.
Petitioner insists that despite respondents' full knowledge of the fact that the title over the disputed
property was already in the name of the Bank, they still proceeded to execute the subject Extrajudicial
Settlement, having in mind the intention of purchasing back the property together with petitioner and of
continuing their co-ownership thereof.
Petitioner posits that the subject Extrajudicial Settlement is, in and by itself, a contract between him and
respondents, because it contains a provision whereby the parties agreed to continue their co-ownership of
the subject property by "redeeming" or "repurchasing" the same from the Bank. This agreement, petitioner
contends, is the law between the parties and, as such, binds the respondents. As a result, petitioner asserts
that respondents' act of buying the disputed property from the Bank without notifying him inures to his
benefit as to give him the right to claim his rightful portion of the property, comprising 1/3 thereof, by
reimbursing respondents the equivalent 1/3 of the sum they paid to the Bank.
The Court is not persuaded.
Petitioner and respondents are arguing on the wrong premise that, at the time of the execution of the
Extrajudicial Settlement, the subject property formed part of the estate of their deceased father to which
they may lay claim as his heirs.
At the outset, it bears to emphasize that there is no dispute with respect to the fact that the subject property
was exclusively owned by petitioner and respondents' father, Rufo, at the time that it was mortgaged in
1979. This was stipulated by the parties during the hearing conducted by the trial court on October 28,
1996.12 Evidence shows that a Definite Deed of Sale13 was issued in favor of the Bank on January 25,
1984, after the period of redemption expired. There is neither any dispute that a new title was issued in the
Bank's name before Rufo died on July 6, 1984. Hence, there is no question that the Bank acquired
exclusive ownership of the contested lot during the lifetime of Rufo.
The rights to a person's succession are transmitted from the moment of his death. 14 In addition, the
inheritance of a person consists of the property and transmissible rights and obligations existing at the time
of his death, as well as those which have accrued thereto since the opening of the succession. 15 In the
present case, since Rufo lost ownership of the subject property during his lifetime, it only follows that at
the time of his death, the disputed parcel of land no longer formed part of his estate to which his heirs may
lay claim. Stated differently, petitioner and respondents never inherited the subject lot from their father.
Petitioner and respondents, therefore, were wrong in assuming that they became co-owners of the subject
lot. Thus, any issue arising from the supposed right of petitioner as co-owner of the contested parcel of
land is negated by the fact that, in the eyes of the law, the disputed lot did not pass into the hands of
petitioner and respondents as compulsory heirs of Rufo at any given point in time.
The foregoing notwithstanding, the Court finds a necessity for a complete determination of the issues
raised in the instant case to look into petitioner's argument that the Extrajudicial Settlement is an
independent contract which gives him the right to enforce his right to claim a portion of the disputed lot
bought by respondents.1avvphi1
It is true that under Article 1315 of the Civil Code of the Philippines, contracts are perfected by mere
consent; and from that moment, the parties are bound not only to the fulfillment of what has been expressly
stipulated but also to all the consequences which, according to their nature, may be in keeping with good
faith, usage and law.
Article 1306 of the same Code also provides that the contracting parties may establish such stipulations,
clauses, terms and conditions as they may deem convenient, provided these are not contrary to law, morals,
good customs, public order or public policy.
In the present case, however, there is nothing in the subject Extrajudicial Settlement to indicate any express
stipulation for petitioner and respondents to continue with their supposed co-ownership of the contested
lot.
On the contrary, a plain reading of the provisions of the Extrajudicial Settlement would not, in any way,
support petitioner's contention that it was his and his sibling's intention to buy the subject property from the
Bank and continue what they believed to be co-ownership thereof. It is a cardinal rule in the interpretation
of contracts that the intention of the parties shall be accorded primordial consideration.16 It is the duty of
the courts to place a practical and realistic construction upon it, giving due consideration to the context in
which it is negotiated and the purpose which it is intended to serve. 17 Such intention is determined from the
express terms of their agreement, as well as their contemporaneous and subsequent acts.18 Absurd and
illogical interpretations should also be avoided.19
For petitioner to claim that the Extrajudicial Settlement is an agreement between him and his siblings to
continue what they thought was their ownership of the subject property, even after the same had been
bought by the Bank, is stretching the interpretation of the said Extrajudicial Settlement too far.
In the first place, as earlier discussed, there is no co-ownership to talk about and no property to partition, as
the disputed lot never formed part of the estate of their deceased father.
Moreover, petitioner's asseveration of his and respondents' intention of continuing with their supposed co-
ownership is negated by no less than his assertions in the present petition that on several occasions he had
the chance to purchase the subject property back, but he refused to do so. In fact, he claims that after the
Bank acquired the disputed lot, it offered to re-sell the same to him but he ignored such offer. How then
can petitioner now claim that it was also his intention to purchase the subject property from the Bank,
when he admitted that he refused the Bank's offer to re-sell the subject property to him?
In addition, it appears from the recitals in the Extrajudicial Settlement that, at the time of the execution
thereof, the parties were not yet aware that the subject property was already exclusively owned by the
Bank. Nonetheless, the lack of knowledge on the part of petitioner and respondents that the mortgage was
already foreclosed and title to the property was already transferred to the Bank does not give them the right
or the authority to unilaterally declare themselves as co-owners of the disputed property; otherwise, the
disposition of the case would be made to depend on the belief and conviction of the party-litigants and not
on the evidence adduced and the law and jurisprudence applicable thereto.
Furthermore, petitioner's contention that he and his siblings intended to continue their supposed co-
ownership of the subject property contradicts the provisions of the subject Extrajudicial Settlement where
they clearly manifested their intention of having the subject property divided or partitioned by assigning to
each of the petitioner and respondents a specific 1/3 portion of the same. Partition calls for the segregation
and conveyance of a determinate portion of the property owned in common. It seeks a severance of the
individual interests of each co-owner, vesting in each of them a sole estate in a specific property and giving
each one a right to enjoy his estate without supervision or interference from the other.20 In other words, the
purpose of partition is to put an end to co-ownership,21 an objective which negates petitioner's claims in the
present case.
WHEREFORE, the instant petition is DENIED. The assailed Decision of the Court of Appeals, dated
May 31, 2005 in CA-G.R. CV No. 58041, is AFFIRMED. SO ORDERED

G.R. No. 161746 September 1, 2010
EUGENIO FELICIANO, substituted by his wife CEFERINA DE PALMA- FELICIANO,
ANGELINA DE LEON, representing the heirs of ESTEBAN FELICIANO, TRINIDAD
VALIENTE, AND BASILIA TRINIDAD, represented by her son DOMINADOR T.
FELICIANO, Petitioners,
vs.
PEDRO CANOZA, DELIA FELICIANO, ROSAURO FELICIANO, ELSA FELICIANO AND
PONCIANO FELICIANO, Respondents.
DECISION
VILLARAMA, JR., J.:
Before the Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure,
as amended, seeking to annul and set aside the Decision1 dated June 26, 2003 and Resolution2 dated
January 15, 2004 of the Court of Appeals (CA) in CA-G.R. CV No. 61888. The CA had reversed the
Decision3 dated August 3, 1998 of the Regional Trial Court (RTC) of Malolos, Bulacan, Branch 11, in
Civil Case No. 819-M-93 and dismissed petitioners’ complaint on the ground of prescription.
The facts are as follows:
When Antonio Feliciano passed away on May 20, 1930, he left behind his only property, a parcel of land
located at Bunga4 Mayor, Bustos, Bulacan. The land had an area of 1,125 square meters and was evidenced
by Tax Declaration No. 14025 in his name. On March 28, 1972, Leona, Maria, Pedro and Salina, all
surnamed Feliciano, declared themselves to be the only surviving heirs of Antonio Feliciano, with the
exception of Salina. They executed an extrajudicial settlement of Antonio Feliciano’s estate6 and
appropriated among themselves the said parcel of land, to the exclusion of the heirs of Esteban Feliciano
and Doroteo Feliciano, deceased children of Antonio Feliciano. On even date, Leona, Maria, Pedro and
Salina executed a deed of absolute sale or Kasulatan sa Ganap Na Bilihan over the property in favor of the
late Jacinto Feliciano (Pedro’s portion), Felisa Feliciano (Salina’s portion) and Pedro Canoza (Leona and
Maria’s portions).7
During his lifetime, Jacinto Feliciano applied for a free patent over the portion of land he bought, declaring
that the same was a public land, first occupied and cultivated by Pedro Feliciano. 8 Jacinto was issued Free
Patent No. (IV-4) 012293 on November 28, 19779 and the same was forwarded to the Register of Deeds of
Malolos, Bulacan, but unfortunately, it was burned on March 7, 1987. Pedro Canoza, for his part, also
applied for a free patent over the portion of land which he bought, claiming that the same was public land,
first occupied and cultivated by Leona and Maria Feliciano.10 He was issued Free Patent No. (IV-4)
012292, now covered by Original Certificate of Title (OCT) No. P-364,11 on February 23, 1979.
On October 18, 1993, Eugenio Feliciano and Angelina Feliciano-de Leon, surviving heirs of the late
Esteban Feliciano, and Trinidad Feliciano-Valiente and Basilia Feliciano-Trinidad, surviving children of
the late Doroteo Feliciano, filed a complaint12 against Salina Feliciano, Felisa Feliciano, Pedro Canoza and
the heirs of the late Jacinto Feliciano, namely Delia, Rosauro, Elsa, Nardo and Ponciano, all surnamed
Feliciano, for the Declaration of Nullity of Documents and Title, Recovery of Real Property and Damages.
They alleged that the settlement of the estate and sale were done without their participation and consent as
heirs of Esteban and Doroteo. Likewise, they averred that the ancestral home of the Felicianos is erected on
the subject property and that they have occupied the same since birth. Canoza and Jacinto falsely declared
that the property was not occupied, so their titles to the property should be declared null and void on the
ground that they have made false statements in their respective applications for free patent.
On November 4, 1993, before an Answer could be filed, the petitioners amended their complaint to include
the allegation that they sought to recover the shares of their fathers, Esteban and Doroteo, which they could
have acquired as heirs of Antonio Feliciano.13
In their Answer,14 respondent Pedro Canoza and his spouse, respondent Delia Feliciano, alleged that they
were buyers in good faith and for value. They likewise contended that assuming that there was preterition
of legal heirs, they never took part in it. As affirmative defenses, they alleged that the complaint failed to
state a cause of action; the lower court had no jurisdiction as the subject of the case were free patents and
therefore prior exhaustion of administrative remedies was required; the case was prematurely filed; no
effort was exerted towards a settlement; plaintiffs’ right has prescribed; Eugenio Feliciano was a mere
squatter who should be ordered to vacate; the deed of sale was validly, genuinely and duly executed;
Eugenio and Angelina were guilty of misleading the court because there were other heirs who were
indispensable parties but who were not included; and Presidential Decree No. 1508 or the Revised
Katarungang Pambarangay Law was not resorted to by plaintiffs.
Respondents Rosauro Feliciano, Elsa Feliciano and Ponciano Feliciano likewise filed an
Answer15 containing the same allegations and defenses as respondents Pedro Canoza and Delia Feliciano.
The other defendants, Salina Feliciano, Felisa Feliciano and Nardo Feliciano were declared in default.
On August 3, 1998, the trial court rendered a Decision, the dispositive portion of which reads as follows:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants, as
follows:
1. Declaring the extra-judicial settlement of estate of Antonio Feliciano null and void;
2. Declaring the sale of the property in question to Pedro Canoza, Felisa Feliciano and Jacinto
Feliciano null and void;
3. Declaring the original certificate of Title No. 364 in the name of Pedro Canoza and the
certificates of titles in the name of defendants over Lot 1874-Cad-344, Bustos Cadastre (Tax
Declaration No. 1402) as null and void;
4. Ordering defendants to reconvey ownership and possession of said property to plaintiffs
subject to a just and equitable partition thereof by and between all interested parties.
No pronouncement as to cost.
SO ORDERED.16
The trial court explained that by operation of law, the plaintiffs (herein petitioners) have as much right as
Leona, Maria, Pedro and Salina Feliciano to inherit the property in question, and they cannot be deprived
of their right unless by disinheritance for causes set forth in the law. When Leona Feliciano, Pedro
Feliciano, Maria Feliciano and Salina Feliciano appropriated the disputed lot solely to themselves through
the extrajudicial settlement of estate, they committed a fraudulent act. To the extent that Doroteo and
Esteban were deprived of their rightful share, the said out-of-court settlement was annullable, said the trial
court. The trial court also declared that Pedro Canoza was not a buyer in good faith of Leona and Maria’s
shares. Records show that Pedro Canoza’s live-in partner, Delia Feliciano, was a relative of the petitioners
and the other defendants; thus, he could be reasonably charged with the knowledge of petitioners’ status
vis-à-vis the subject property. The acquisition by Canoza and Jacinto Feliciano of free patent titles over
portions of the contested lot also did not legitimize their ownership thereof, as they acquired no greater
rights over the property than their predecessors-in-interest, having merely stepped into their shoes.17
Aggrieved, respondents appealed to the CA with the following assignment of errors:
I. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN ADMITTING IN EVIDENCE
THE EXTRA-JUDICIAL SETTLEMENT OF ESTATE OF ANTONIO FELICIANO (EXHIBIT "B")[;]
II. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN DECLARING AS NULL AND
VOID THE EXTRA-JUDICIAL SETTLEMENT OF ESTATE OF ANTONIO FELICIANO (EXHIBIT
"B")[;]
III. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN DECLARING AS NULL AND
VOID THE DEED OF SALE (EXHIBIT "C") IN FAVOR OF JACINTO FELICIANO, FELISA
FELICIANO AND PEDRO CANOZA[;]
IV. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN DECLARING O.C.T. NO. 364
IN THE NAME OF PEDRO CANOZA AND CERTIFICATES OF TITLE OF DEFENDANTS AS NULL
AND VOID[; AND]
V. THE LOWER COURT COMMITTED A REVERSIBLE ERROR IN ORDERING DEFENDANTS TO
RECONVEY OWNERSHIP AND POSSESSION OF THE SUBJECT PROPERTY TO PLAINTIFFS
SUBJECT TO A JUST AND EQUITABLE PARTITION THEREOF BY AND BETWEEN ALL
INTERESTED PARTIES.18
On June 26, 2003, the appellate court rendered the assailed Decision reversing the trial court’s decision.
The CA held,
WHEREFORE, premises considered, the appeal is hereby GRANTED. Accordingly, the Decision dated
August 3, 1998 of the Regional Trial Court, Branch 11 (XI), Malolos, Bulacan in Civil Case No. 819-M-93
is hereby REVERSED AND SET ASIDE and plaintiffs-appellees’ complaint is ordered DISMISSED for
being time-barred.
19
SO ORDERED.
The CA ruled that prescription had set in, citing the case of Pedrosa v. Court of Appeals,20 which held that
the applicable prescriptive period to annul a deed of extrajudicial settlement is four (4) years from the
discovery of the fraud. It reasoned that when petitioners filed the instant complaint for the annulment of the
extrajudicial settlement of Antonio Feliciano’s estate, more than four (4) years had elapsed from the
issuance of the free patents. As regards the portion claimed by the late Jacinto Feliciano, sixteen (16) years
had elapsed from the time the free patent was issued to him before petitioners filed the complaint, while in
the case of Canoza, fourteen (14) years had elapsed from the issuance of the free patent in Canoza’s favor.
Hence, according to the CA, the action for the annulment of the documents had prescribed.
Petitioners filed a motion for reconsideration of the aforesaid Decision but it was denied by the CA in the
Resolution dated January 15, 2004 for lack of merit.
Hence, this petition.
The grounds relied upon by the petitioners are the following:
A. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN GRANTING THE
APPEAL BY ORDERING THE DISMISSAL OF THE COMPLAINT ON GROUND OF
PRESCRIPTION OF ACTION, DESPITE THE FACT THAT THE ISSUE OF
PRESCRIPTION OF ACTION HAS NOT BEEN RAISED ON APPEAL AS AN ISSUE, NOR
ASSIGNED AS AN ERROR, NOR DEFINED IN THE PRE-TRIAL ORDER AS AMONG
THE ISSUES TO BE RESOLVED;
B. ASSUMING THAT PRESCRIPTION OF ACTION MAY BE TAKEN AS A GROUND
FOR DISMISSING THE COMPLAINT EVEN IF NOT RAISED ON APPEAL, NOR
ASSIGNED AS AMONG THE ERRORS COMMITTED, THE COURT OF APPEALS
COMMITTED REVERSIBLE ERROR IN HOLDING THAT THE ACTION PRESCRIBES
IN FOUR YEARS, OR IN NOT HOLDING THAT THE ACTION IS IMPRESCRIPTIBLE;
C. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT AFFIRMING
THE DECISION OF THE TRIAL COURT.21
Essentially, the issue for our resolution is whether the CA erred in reversing the trial court’s decision.
Petitioners allege that the CA gravely erred in granting the appeal and in dismissing the complaint on the
ground of prescription of action because that issue was never raised on appeal, nor defined as one (1) of the
issues outlined and limited in the pre-trial order.
We do not agree.
While respondents have not assigned the defense of prescription in their appeal before the CA, they raised
such defense in their December 1, 1993 Answer as one (1) of their affirmative defenses.22 In their brief
before the CA, respondents specifically prayed for the reliefs mentioned in their respective answers before
the trial court. Thus, by reference, they are deemed to have adopted the defense of prescription, and could
not properly be said to have waived the defense of prescription.
Moreover, Rule 9, Section 1 of the 1997 Rules of Civil Procedure, as amended, provides that when it
appears from the pleadings or the evidence on record that the action is already barred by the statute of
limitations, the court shall dismiss the claim. Thus, in Gicano v. Gegato,23 we held:
We have ruled that trial courts have authority and discretion to dismiss an action on the ground of
prescription when the parties’ pleadings or other facts on record show it to be indeed time-barred x x x; and
it may do so on the basis of a motion to dismiss, or an answer which sets up such ground as an affirmative
defense; or even if the ground is alleged after judgment on the merits, as in a motion for reconsideration; or
even if the defense has not been asserted at all, as where no statement thereof is found in the pleadings, or
where a defendant has been declared in default. What is essential only, to repeat, is that the facts
demonstrating the lapse of the prescriptive period, be otherwise sufficiently and satisfactorily apparent on
the record: either in the averments of the plaintiffs complaint, or otherwise established by the
evidence. (Underscoring supplied.)
But did the CA nonetheless commit error when it held that the applicable prescriptive period is four (4)
years?
Petitioners argue that the CA erroneously treated the action they filed at the trial court as one (1) for
annulment of the extrajudicial settlement and applied the four (4)-year prescriptive period in dismissing the
same. They contend that the action they filed was one (1) for Declaration of Nullity of Documents and
Titles, Recovery of Real Property and Damages, and as such, their action was imprescriptible pursuant to
Article 141024 of the Civil Code.

Respondents, for their part, maintain that the CA did not err in holding that the deed of extrajudicial
partition executed without including some of the heirs, who had no knowledge of the partition and did not
consent thereto, is merely fraudulent and not void. They stress that the action to rescind the partition based
on fraud prescribes in four (4) years counted from the date of registration, which is constructive notice to
the whole world.

We affirm the ruling of the CA. As the records show, the heirs of Doroteo and Esteban did not participate
in the extrajudicial partition executed by Salina with the other compulsory heirs, Leona, Maria and Pedro.
Undeniably, the said deed was fraudulently obtained as it deprived the known heirs of Doroteo and Esteban
of their shares in the estate. A deed of extrajudicial partition executed without including some of the heirs,
who had no knowledge of and consent to the same, is fraudulent and vicious. 25 Hence, an action to set it
aside on the ground of fraud could be instituted. Such action for the annulment of the said partition,
however, must be brought within four (4) years from the discovery of the fraud.1avvphi1

In Gerona v. De Guzman,26 respondents therein executed a deed of extrajudicial settlement declaring

themselves to be the sole heirs of the late Marcelo de Guzman. They secured new transfer certificates of
title in their own names, thereby excluding the petitioners therein from the estate of the deceased. The
petitioners brought an action for the annulment of the said deed upon the ground that the same is tainted
with fraud. The Court held,

Inasmuch as petitioners seek to annul the aforementioned deed of "extra-judicial settlement" upon
the ground of fraud in the execution thereof, the action therefor may be filed within four (4) years
from the discovery of the fraud (Mauricio v. Villanueva, L-11072, September 24, 1959). Such discovery
is deemed to have taken place, in the case at bar, on June 25, 1948, when said instrument was filed with the
Register of Deeds and new certificates of title were issued in the name of respondents exclusively, for the
registration of the deed of extra-judicial settlement constitute constructive notice to the whole
world.27 (Emphasis and underscoring supplied.)

Evidently, the applicable prescriptive period to institute the action to annul the deed of extrajudicial
settlement was four (4) years counted from the discovery of fraud as held in the case of Gerona v. De
Guzman.28 However, the records show that petitioners’ complaint was filed only on October 18, 1993, or
almost sixteen (16) years after Jacinto Feliciano was issued Free Patent No. (IV-4) 012293 on November
28, 1977, and almost fourteen (14) years from the time Pedro Canoza was issued OCT No. P-364 on
November 28, 1979. As petitioners are deemed to have obtained constructive notice of the fraud upon the
registration of the Free Patent, they clearly failed to institute the present civil action within the allowable
period. The same result obtains even if their complaint is treated as one (1) essentially for reconveyance as
more than ten (10) years have passed since petitioners’ cause of action accrued. The CA committed no
error in dismissing their complaint.

WHEREFORE, the petition for review on certiorari is DENIED. The Decision dated June 26, 2003 and
Resolution dated January 15, 2004, of the Court of Appeals in CA-G.R. CV No. 61888 are AFFIRMED.

With costs against petitioners.

SO ORDERED.

G.R. No. 183852 October 20, 2010
CARMELA BROBIO MANGAHAS, Petitioner,
vs.
EUFROCINA A. BROBIO, Respondent.
RESOLUTION
NACHURA, J.:
This petition for review on certiorari seeks to set aside the Court of Appeals (CA) Decision 1 dated
February 21, 2008, which dismissed petitioner’s action to enforce payment of a promissory note issued by
respondent, and Resolution2 dated July 9, 2008, which denied petitioner’s motion for reconsideration.
The case arose from the following facts:
On January 10, 2002, Pacifico S. Brobio (Pacifico) died intestate, leaving three parcels of land. He was
survived by his wife, respondent Eufrocina A. Brobio, and four legitimate and three illegitimate children;
petitioner Carmela Brobio Mangahas is one of the illegitimate children.
On May 12, 2002, the heirs of the deceased executed a Deed of Extrajudicial Settlement of Estate of the
Late Pacifico Brobio with Waiver. In the Deed, petitioner and Pacifico’s other children, in consideration of
their love and affection for respondent and the sum of ₱150,000.00, waived and ceded their respective
shares over the three parcels of land in favor of respondent. According to petitioner, respondent promised
to give her an additional amount for her share in her father’s estate. Thus, after the signing of the Deed,
petitioner demanded from respondent the promised additional amount, but respondent refused to pay,
claiming that she had no more money.3
A year later, while processing her tax obligations with the Bureau of Internal Revenue (BIR), respondent
was required to submit an original copy of the Deed. Left with no more original copy of the Deed,
respondent summoned petitioner to her office on May 31, 2003 and asked her to countersign a copy of the
Deed. Petitioner refused to countersign the document, demanding that respondent first give her the
additional amount that she promised. Considering the value of the three parcels of land (which she claimed
to be worth ₱20M), petitioner asked for ₱1M, but respondent begged her to lower the amount. Petitioner
agreed to lower it to ₱600,000.00. Because respondent did not have the money at that time and petitioner
refused to countersign the Deed without any assurance that the amount would be paid, respondent executed
a promissory note. Petitioner agreed to sign the Deed when respondent signed the promissory note which
read —
31 May 2003
This is to promise that I will give a Financial Assistance to CARMELA B. MANGAHAS the amount
of ₱600,000.00 Six Hundred Thousand only on June 15, 2003.
(SGD)
EUFROCINA A. BROBIO4
When the promissory note fell due, respondent failed and refused to pay despite demand. Petitioner made
several more demands upon respondent but the latter kept on insisting that she had no money.
On January 28, 2004, petitioner filed a Complaint for Specific Performance with Damages5 against
respondent, alleging in part—
2. That plaintiff and defendant are legal heirs of the deceased, Pacifico S. Brobio[,] who died
intestate and leaving without a will, on January 10, 2002, but leaving several real and personal
properties (bank deposits), and some of which were the subject of the extra-judicial settlement
among them, compulsory heirs of the deceased, Pacifico Brobio. x x x.
3. That in consideration of the said waiver of the plaintiff over the listed properties in the extra-
judicial settlement, plaintiff received the sum of ₱150,000.00, and the defendant executed a
"Promissory Note" on June 15, 2003, further committing herself to give plaintiff a financial
assistance in the amount of ₱600,000.00. x x x.
4. That on its due date, June 15, 2003, defendant failed to make good of her promise of
delivering to the plaintiff the sum of ₱600,000.00 pursuant to her "Promissory Note" dated May
31, 2003, and despite repeated demands, defendant had maliciously and capriciously refused to
deliver to the plaintiff the amount [of] ₱600,000.00, and the last of which demands was on
October 29, 2003. x x x.6
In her Answer with Compulsory Counterclaim,7 respondent admitted that she signed the promissory note
but claimed that she was forced to do so. She also claimed that the undertaking was not supported by any
consideration. More specifically, she contended that —
10. Defendant was practically held "hostage" by the demand of the plaintiff. At that time,
defendant was so much pressured and was in [a] hurry to submit the documents to the Bureau of
Internal Revenue because of the deadline set and for fear of possible penalty if not complied
with. Defendant pleaded understanding but plaintiff was adamant. Her hand could only move in
exchange for 1 million pesos.
11. Defendant, out of pressure and confused disposition, was constrained to make a promissory
note in a reduced amount in favor of the plaintiff. The circumstances in the execution of the
promissory note were obviously attended by involuntariness and the same was issued without
consideration at all or for illegal consideration.8
On May 15, 2006, the Regional Trial Court (RTC) rendered a decision in favor of petitioner. The RTC
found that the alleged "pressure and confused disposition" experienced by respondent and the
circumstances that led to the execution of the promissory note do not constitute undue influence as would
vitiate respondent’s consent thereto. On the contrary, the RTC observed that —
It is clear from all the foregoing that it is the defendant who took improper advantage of the plaintiff’s trust
and confidence in her by resorting to a worthless written promise, which she was intent on reneging. On
the other hand, plaintiff did not perform an unlawful conduct when she insisted on a written commitment
from the defendant, as embodied in the promissory note in question, before affixing her signature that was
asked of her by the defendant because, as already mentioned, that was the only opportunity available to her
or which suddenly and unexpectedly presented itself to her in order to press her demand upon the
defendant to satisfy the correct amount of consideration due to her. In other words, as the defendant had
repeatedly rebuffed her plea for additional consideration by claiming lack of money, it is only natural for
the plaintiff to seize the unexpected opportunity that suddenly presented itself in order to compel the
defendant to give to her [what is] due [her]. And by executing the promissory note which the defendant had
no intention of honoring, as testified to by her, the defendant clearly acted in bad faith and took advantage
of the trust and confidence that plaintiff had reposed in her.9
The RTC also brushed aside respondent’s claim that the promissory note was not supported by valuable
consideration. The court maintained that the promissory note was an additional consideration for the
waiver of petitioner’s share in the three properties in favor of respondent. Its conclusion was bolstered by
the fact that the promissory note was executed after negotiation and haggling between the parties. The
dispositive portion of the RTC decision reads:
WHEREFORE, judgment is hereby rendered as follows:
1. Ordering the defendant to pay to plaintiff the sum of Six Hundred Thousand Pesos
(₱600,000.00) which she committed to pay to plaintiff under the promissory note in question,
plus interest thereon at the rate of 12% per annum computed from the date of the filing of the
complaint;
2. Ordering the defendant to pay to plaintiff the sum of ₱50,000.00 as attorney’s fees; and
3. Ordering the defendant to pay to plaintiff the costs of this suit.
SO ORDERED.10
On February 21, 2008, the CA reversed the RTC decision and dismissed the complaint.11 The CA found
that there was a complete absence of consideration in the execution of the promissory note, which made it
inexistent and without any legal force and effect. The court noted that "financial assistance" was not the
real reason why respondent executed the promissory note, but only to secure petitioner’s signature. The CA
held that the waiver of petitioner’s share in the three properties, as expressed in the deed of extrajudicial
settlement, may not be considered as the consideration of the promissory note, considering that petitioner
signed the Deed way back in 2002 and she had already received the consideration of ₱150,000.00 for
signing the same. The CA went on to hold that if petitioner disagreed with the amount she received, then
she should have filed an action for partition.
Further, the CA found that intimidation attended the signing of the promissory note. Respondent needed
the Deed countersigned by petitioner in order to comply with a BIR requirement; and, with petitioner’s
refusal to sign the said document, respondent was forced to sign the promissory note to assure petitioner
that the money promised to her would be paid.
Petitioner moved for the reconsideration of the CA Decision. In a Resolution dated July 9, 2008, the CA
denied petitioner’s motion.12
In this petition for review, petitioner raises the following issues:
1. The Honorable Court of Appeals erred in the appreciation of the facts of this case when it
found that intimidation attended the execution of the promissory note subject of this case.
2. The Honorable Court of Appeals erred when it found that the promissory note was without
consideration.
3. The Honorable Court of Appeals erred when it stated that petitioner should have filed [an
action] for partition instead of a case for specific performance.13
The petition is meritorious.
Contracts are voidable where consent thereto is given through mistake, violence, intimidation, undue
influence, or fraud. In determining whether consent is vitiated by any of these circumstances, courts are
given a wide latitude in weighing the facts or circumstances in a given case and in deciding in favor of
what they believe actually occurred, considering the age, physical infirmity, intelligence, relationship, and
conduct of the parties at the time of the execution of the contract and subsequent thereto, irrespective of
whether the contract is in a public or private writing.14
Nowhere is it alleged that mistake, violence, fraud, or intimidation attended the execution of the
promissory note. Still, respondent insists that she was "forced" into signing the promissory note because
petitioner would not sign the document required by the BIR. In one case, the Court – in characterizing a
similar argument by respondents therein – held that such allegation is tantamount to saying that the other
party exerted undue influence upon them. However, the Court said that the fact that respondents were
"forced" to sign the documents does not amount to vitiated consent.15
There is undue influence when a person takes improper advantage of his power over the will of another,
depriving the latter of a reasonable freedom of choice.16 For undue influence to be present, the influence
exerted must have so overpowered or subjugated the mind of a contracting party as to destroy his free
agency, making him express the will of another rather than his own. 17
Respondent may have desperately needed petitioner’s signature on the Deed, but there is no showing that
she was deprived of free agency when she signed the promissory note. Being forced into a situation does
not amount to vitiated consent where it is not shown that the party is deprived of free will and choice.
Respondent still had a choice: she could have refused to execute the promissory note and resorted to
judicial means to obtain petitioner’s signature. Instead, respondent chose to execute the promissory note to
obtain petitioner’s signature, thereby agreeing to pay the amount demanded by petitioner.
The fact that respondent may have felt compelled, under the circumstances, to execute the promissory note
will not negate the voluntariness of the act. As rightly observed by the trial court, the execution of the
promissory note in the amount of ₱600,000.00 was, in fact, the product of a negotiation between the
parties. Respondent herself testified that she bargained with petitioner to lower the amount:
ATTY. VILLEGAS:
Q And is it not that there was even a bargaining from ₱1-M to ₱600,000.00 before you
prepare[d] and [sign[ed] that promissory note marked as Exhibit "C"?
A Yes, sir.
Q And in fact, you were the one [who] personally wrote the amount of ₱600,000.00 only as
indicated in the said promissory note?
A Yes, sir.
COURT:
Q So, just to clarify. Carmela was asking an additional amount of ₱1-M for her to sign this
document but you negotiated with her and asked that it be lowered to ₱600,000.00 to which she
agreed, is that correct?
 A Yes, Your Honor. Napilitan na po ako.

Q But you negotiated and asked for its reduction from ₱1-M to ₱600,000.00?

A Yes, Your Honor.18

Contrary to the CA’s findings, the situation did not amount to intimidation that vitiated
consent.1awphil There is intimidation when one of the contracting parties is compelled to give his consent
by a reasonable and well-grounded fear of an imminent and grave evil upon his person or property, or upon
the person or property of his spouse, descendants, or ascendants.19 Certainly, the payment of penalties for
delayed payment of taxes would not qualify as a "reasonable and well-grounded fear of an imminent and
grave evil."

We join the RTC in holding that courts will not set aside contracts merely because solicitation,
importunity, argument, persuasion, or appeal to affection was used to obtain the consent of the other party.
Influence obtained by persuasion or argument or by appeal to affection is not prohibited either in law or
morals and is not obnoxious even in courts of equity.20

On the issue that the promissory note is void for not being supported by a consideration, we likewise
disagree with the CA.

A contract is presumed to be supported by cause or consideration. 21 The presumption that a contract has
sufficient consideration cannot be overthrown by a mere assertion that it has no consideration. To
overcome the presumption, the alleged lack of consideration must be shown by preponderance of
evidence.22 The burden to prove lack of consideration rests upon whoever alleges it, which, in the present
case, is respondent.

Respondent failed to prove that the promissory note was not supported by any consideration. From her
testimony and her assertions in the pleadings, it is clear that the promissory note was issued for a cause or
consideration, which, at the very least, was petitioner’s signature on the document.1avvphi1

It may very well be argued that if such was the consideration, it was inadequate. Nonetheless, even if the
consideration is inadequate, the contract would not be invalidated, unless there has been fraud, mistake, or
undue influence.23 As previously stated, none of these grounds had been proven present in this case.

The foregoing discussion renders the final issue insignificant. Be that as it may, we would like to state that
the remedy suggested by the CA is not the proper one under the circumstances. An action for partition
implies that the property is still owned in common.24 Considering that the heirs had already executed a
deed of extrajudicial settlement and waived their shares in favor of respondent, the properties are no longer
under a state of co-ownership; there is nothing more to be partitioned, as ownership had already been
merged in one person.

WHEREFORE, premises considered, the CA Decision dated February 21, 2008 and its Resolution dated
July 9, 2008 are REVERSED and SET ASIDE. The RTC decision dated May 15, 2006 is REINSTATED.

SO ORDERED.