CageDig: Jaime Tan Jr.

vs CA
G.R. No. 136368; 16 Jan. 2002
Posted by: Diana Calipes Islo on July 19, 2018

FACTS:

On January 22, 1981, Tan, for a consideration of P59,200 executed a deed of absolute
sale over the property in question in favor of spouses Jose Magdangal and Estrella
Magdangal. Simultaneous with the execution of this deed, the same contracting parties
entered into another agreement whereunder Tan was given one (1) year within which to
redeem or repurchase the property. Tan failed to redeem the property until his death on
January 4, 1988.

On May 2, 1988, Tan's heirs filed before the RTC at Davao City a suit against the
Magdangals for reformation of instrument alleging that while Tan and the Magdangals
denominated their agreement as deed of absolute sale, their real intention was to
conclude an equitable mortgage.

RTC rendered judgment finding for Tan, portion of which reads:

1) The Deed of Absolute Sale is, in accordance with the true intention of the parties,
hereby declared and reformed an equitable mortgage;

2) The plaintiff is ordered to pay the defendants within 120 days after the finality of this
decision P59,200 plus interest at the rate of 12% per annum from May 2, 1988, the date
the complaint was filed, until paid;

3)xxx.

On Sept. 28, 1995, CA affirmed the decision of the RTC in toto. Both parties received the
decision of the appellate court on Oct. 5, 1995. On March 13, 1996, the clerk of court of
the appellate court entered in the Book of Entries of Judgement the decision xxx and
issued the corresponding Entry of Judgment which, on its face, stated that the said
decision has on Oct. 21, 1995 become final and executory.

Magdangals filed in the RTC a Motion for Consolidation and Writ of Possession alleging
that the 120-day period of redemption of the petitioner has expired.

On June 10, 1996, the RTC allowed the petitioner to redeem the lot in question. It ruled
that the 120-day redemption period should be reckoned from the date of Entry of
Judgment in the CA or from March 13, 1996. The redemption price was deposited on
April 17, 1996.
ISSUE:

What rule should govern the finality of judgment favorably obtained in the trial court by
the petitioner?

HELD:

From 1991-1996, the years relevant to the case at bar, the rule that governs finality of
judgment is Rule 51 of the Revised Rules of Court. Its sections 10 and 11 provide:

SEC. 10. Entry of judgments and final resolutions. If no appeal or motion for new trial or
reconsideration is filed within the time provided in these Rules, the judgment or final
resolution shall forthwith be entered by the clerk in the book of entries of judgments.
The date when the judgments or final resolution becomes executory shall be deemed as
the date of its entry. The record shall contain the dispositive part of the judgment or
final resolution and shall be signed by the clerk, with a certificate that such judgment or
final resolution has become final and executory.

SEC.11. Execution of judgment. Except where the judgment or final order or resolution,
or a portion thereof, is ordered to be immediately executory, the motion for its execution
may only be filed in the proper court after its entry.

The 1997 Revised Rules of Civil Procedure, however, amended the rule on finality of
judgment by providing in section 1, Rule 39 as follows:

Section 1. Execution upon judgments or final orders. Execution shall issue as a matter of
right, on motion, upon a judgment or order that disposes of the action or proceeding
upon the expiration of the period to appeal therefrom if no appeal has been duly
perfected.

If the appeal has been duly perfected and finally resolved, the execution may forthwith
be applied for in the court of origin, on motion of the judgment obligee, submitting
therewith certified true copies of the judgment or judgments or final order or orders
sought to be enforced and of the entry thereof, with notice to the adverse party.

The appellate court may, on motion in the same case, when the interest of justice so
requires, direct the court of origin to issue the writ of execution.

SC hold that section 1, Rule 39 of the 1997 Revised Rules of Procedure should not be
given retroactive effect in this case as it would result in great injustice to the petitioner.
Undoubtedly, petitioner has the right to redeem the subject lot and this right is a
substantive right. Petitioner followed the procedural rule then existing as well as the
decisions of this Court governing the reckoning date of the period of redemption when
he redeemed the subject lot. Unfortunately for petitioner, the rule was changed by the
1997 Revised Rules of Procedure which if applied retroactively would result in his losing
the right to redeem the subject lot. It is difficult to reconcile the retroactive application
of this procedural rule with the rule of fairness. Petitioner cannot be penalized with the
loss of the subject lot when he faithfully followed the laws and the rule on the period of
redemption when he made the redemption.

G.R. No. L-286 March 29, 1946

FREDESVINDO S. ALVERO, petitioner,

vs.
M.L. DE LA ROSA, Judge of First Instance of Manila, JOSE R. VICTORIANO, and MARGARITA
VILLARICA,respondents.

Revilla and Palma for petitioner.

Francisco Claravall for respondents.

DE JOYA, J.:

This is an original petition for certiorari filed in this court.

The record shows that, on June 25, 1945, respondent Jose R. Victoriano had filed a complaint, in
the Court of First Instance of the City of Manila, against petitioner Fredesvindo S. Alvero and one
Margarita Villarica, alleging two causes of action, to wit, (1) to declare in force the contract of sale,
made on October 1, 1940, between said Jose R. Victoriano and Margarita Villarica, of two (2)
parcels of land in the Manotoc subdivision, Balintawak, in the barrio of Calaanan, municipality of
Caloocan, Province of Rizal, with a combined area of 480 square meters, which land was
subsequently sold by said Villarica, in favor of petitioner Fredesvindo S. Alvero, on December 31,
1944, for the sum of P100,000 in Japanese military notes; and (2) to declare said subsequent sale
null and void.

On July 7, 1945, Margarita Villarica filed an answer to said complaint, expressly admitting having
sold said land to Fresdesvindo S. Alvero, for P100,000, in December, 1944, due to the imperative
necessity of raising funds with which to provide for herself and family, and that she did not remember
the previous sale; at the same time, offering to repurchase said land from Fredesvindo S. Alvero in
the sum of P5,000, but that the latter refused to accept the offer.

On July 13, 1945, Fredesvindo S. Alvero, in answering said complaint, denied the allegations made
therein, and claimed exclusive ownership of the land in question, and at the same time set up a
counterclaim and crossclaim in his answer, demanding from Jose R. Victoriano a P200-monthly rent
on said property, beginning from February, 1945, plus P2,000 as damages.

On July 21, 1945, Jose R. Victoriano filed an answer to said counterclaim, denying Fredesvindo S.
Alvero's alleged ownership over said land, and the other allegations contained in Alvero's answer.

After the trial of the case before the Hon. Mariano L. de la Rosa, Judge of the Court of First Instance
of the City of Manila, one of the respondents in this case, on November 16, 1945, said respondent
judge rendered his decision, in which it was declared that the two (2) parcels of land in question, with
a combined area of 480 square meters had been sold by Margarita Villarica to Jose R. Victoriano,
since October 1, 1940, for the sum of P6,000, on the condition that the purchaser should make a
down payment of P1,700, and a monthly payment of P76.86 in 120 equal monthly installments; that
Jose R. Victoriano continued making said monthly payments until December, 1941, but that owing to
the war-time conditions then existing, Margarita Villarica agreed verbally to suspend such payments
until the restoration of peace; that immediately after said sale of said land to him, Jose R. Victoriano
took possession thereof and made improvements thereon to the amount of P800, and continued
occupying said property until December, 1944, when he abandoned the same to go to evacuation
places, but returned thereto in February, 1945; that Margarita Villarica, having forgotten the sale of
said land to Jose R. Victoriano, sold the same for P100,000 in Japanese military notes, on
December 31, 1944, to Fredesvindo S. Alvero, but afterwards offered to repurchase said property
from him, for the sum of P8,000 in genuine Philippine currency, after liberation; that Fredesvindo S.
Alvero presented the deed of sale, executed in his favor, to the Register of Deeds of the City of
Manila, on January 3, 1945, and took possession of said property in December, 1944, but afterwards
found Jose R. Victoriano in the premises in February, 1945; that in the contract of sale executed by
Margarita Villarica, in favor of Jose R. Victoriano, it was agreed that, upon failure of the purchaser to
make payments of three (3) successive mothly installments, the vendor would be free to sell the
property again, forfeiting the payments made, except in the case of force majeure; that there was
really a verbal agreement between Margarita Villarica and Jose Victoriano, made in February, 1942,
for the suspension of the payment of the monthly installments until the restoration of peace; and that
although Jose R. Victoriano had presented the deed of sale, executed in his favor, to the Register of
Deeds, in Pasig, Rizal, like Fredesvindo S. Alvero, he had also failed to secure the transfer of title to
his name. And considering that Jose R. Victoriano's document was older than that of Fredesvindo S.
Alvero, and that he had taken possession of said property, since October 1, 1940, the respondent
judge rendered his decision in favor of Jose R. Victoriano, adjudging to him the title over the property
in question, including all the improvements existing thereon, and dismissed the counterclaim.

On November 28, 1945, Fredesvindo S. Alvero was notified of said decision; and on December 27,
1945, he filed a petition for reconsideration and new trial, which was denied on January 3, 1946; and
of said order he was notified on January 7, 1946.

On January 8, 1946, Fredesvindo S. Alvero filed his notice of appeal and record on appeal
simultaneously in the lower court, without filing the P60-appeal bond.

On January 14, 1946, Jose R. Victoriano filed a petition to dismiss the appeal, and at the same time,
asked for the execution of the judgment.

On January 15, 1946, Fredesvindo S. Alvero filed an opposition to said motion to dismiss, alleging
that on the very same day, January 15, 1946, said appeal bond for P60 had been actually filed, and
allege as an excuse, for not filing the said appeal bond, in due time, the illness of his lawyer's wife,
who died on January 10, 1946, and buried the following day.

On January 17, 1946, the respondent judge, Hon. Mariano L. de la Rosa, ordered the dismissal of
the appeal, declaring that, although the notice of appeal and record on appeal had been filed in due
time, the P60-appeal bond was filed too late.

On January 23, 1946, Fredesvindo S. Alvero filed a petition for the reconsideration of the said order
dated January 17, 1946, dismissing his appeal; and said petition for reconsideration was denied on
January 29, 1946. Hence, this petition for certiorari.

On February 11, 1946, the respondents filed their answer to the petition for certiorari, alleging (1)
that said petition is defective in form as well as in substance; (2) that there has been no excusable
negligence, on the part of the petitioner, or grave abuse of discretion on the part of the respondent
judge, in the instant case.
As already stated, the decision rendered by the respondent judge, Hon. Mariano L. de la Rosa, was
dated November 16, 1945, of which counsel for Fredesvindo S. Alvero was notified on November
28, 1945; that his motion for reconsideration and new trial was filed on December 27, 1945, and
denied on January 3, 1946, and that said counsel for Alvero was notified of said order on January 7,
1946; and that he filed his notice of appeal and record on appeal the following day, to wit, January 8,
1946, and that the P60-appeal bond was filed only on January 15, 1946.

According to the computation erroneously made by the court, the last day for filing and perfecting the
appeal, in this case, was January 8, 1946, or which date, Fredesvindo S. Alvero should have filed
his (1) notice of appeal, (2) record on appeal, and (3) appeal bond. But the P60-appeal bond was
filed only on January 15, 1946.

Failure to perfect the appeal, within the time prescribed by the rules of court, will cause the judgment
to become final, and the certification of the record on appeal thereafter, cannot restore the
jurisdiction which has been lost. (Roman Catholic Bishop of Tuguegarao vs. Director of Lands, 34
Phil., 623; Estate of Cordoba and Zarate vs.Alabado, 34 Phil., 920; and Bermudez vs. Director of
Lands, 36 Phil., 774.)

The period within which the record on appeal and appeal bond should be perfected and filed may,
however, be extended by order of the court, upon application made, prior to the expiration of the
original period. (Layda vs.Legaspi, 39 Phil., 83.)

Rules of courts, promulgated by authority of law, have the force and effect of law; and rules of court
prescribing the time within which certain acts must be done, or certain proceedings taken, are
considered absolutely indispensable to the prevention of needless delays and to the orderly and
speedy discharge of judicial business. (Shioji vs. Harvey, 43 Phil., 333.)

Strict compliance with the rules of court has been held mandatory and imperative, so that failure to
pay the docket fee in the Supreme Court, within the period fixed for that purpose, will cause the
dismissal of the appeal. (Salaveria vs. Albindo, 39Phil., 922.) In the same manner, on failure of the
appellant in a civil case to serve his brief, within the time prescribed by said rules, on motion of the
appellee and notice to the appellant, or on its own motion, the court may dismiss the appeal.
(Shioji vs. Harvey, 43 Phil., 333.)

Counsel for the petitioner Fredesvindo Alvero alleges as an excuse, for his failure to perfect and file
his appeal, in due time, the illness of his wife, which ended in her death on January 10, 1946, and by
which he was greatly affected.

How little, indeed, does one realize that in life he lives in the midst of death; and that every that
passes in a step nearer towards eternity. Yet, notwithstanding the inexorable laws of human destiny,
every mortal fears death, and such fear is worse than death itself. That is perhaps the reason why
those feeling its approach, in their last moments, want to be surrounded by the ones dearest to their
heart, to hear from them words of tenderness and eternal truth, and thus receive as balm their love
and the cheering influence of the traditional faith, and the consolation of religious hope.

The virtuous and loving wife is the peculiar gift of heaven, and Mother is the name for God in the
innocent lips and hearts of adoring children. "She looketh well to the ways of her household, and
eateth not the bread of idleness." "And her daughters arise up and call her blessed." And when she
dies in the bosom of God, her children find solace in the contemplation of her eternal bliss, as
mirrored in her tranquil beauty.
It is not, therefore, difficult to understand the state of mind of the attorney, and his intense devotion
and ardent affection towards his dying wife.

Unfortunately, counsel for petitioner has created a difficult situation. In his motion for reconsideration
and new trial, dated December 27, 1945, he did not point out specifically the findings or conclusions
in the judgment, are not supported by the evidence or which are contrary to law, making express
reference to the pertinent evidence or legal provisions, as expressly required by Rule 37, section 2,
paragraph (c) of the Rules of Court. Motions of that kind have been considered as motions pro
forma intended merely to delay the proceeding, and, as such, they cannot and will not interrupt or
suspend the period of time for the perfection of the appeal. (Valdez vs. Jugo, 74 Phil., 49, and
Reyes vs. Court of Appeals and Bautista, 74 Phil., 235.) Hence, the period for perfecting herein
petitioner's appeal commenced from November 28, 1945, when he was notified of the judgment
rendered in the case, and expired on December 28, 1945; and, therefore, his notice of appeal and
record on appeal filed on January 8, 1946, were filed out of time, and much more so his appeal
bond, which was only filed on January 15, 1946.

It is futile to speak of hospitals, doctors and nurses to minister alone to the needs of the sick and the
dying, who are dearest to us, for our reasoning powers are of little avail when sorrow or despair
rages within.

But human laws are inflexible and no personal consideration should stand in the way of performing a
legal duty.

The attorney for petitioner Fredesvindo S. Alvero could have asked for an extension of time, within
which to file and perfect his appeal, in the court below; but he had failed to do so, and he must bear
the consequences of his act. A strict observance of the rules of court, which have been considered
indispensable to the prevention of needless delays and to the orderly and speedy dispatch of judicial
business, is an imperative necessity.

It may not be amiss to state in this connection that no irreparable damage has been caused to the
petitioner Fredesvindo S. Alvero, as Margarita Villarica, the vendor to the two, of the land in
question, has shown readiness to repair the damage done.

No showing having been made that there had been merely excusable negligece, on the part of the
attorney for petitioner Fredesvindo S. Alvero, and that there had been gave abuse of sound judicial
discretion, on the part of the respondent judge, the petition for certiorari filed in this case, is,
therefore, hereby dismissed, without costs. So ordered.

Moran, C.J., Ozaeta, Paras, Jaranilla, Feria, Pablo, Perfecto, Hilado, Bengzon, and Briones
JJ., concur.

Bustos vs. Lucero 81 Phil 640

FACTS:
Subject matter of prosecution: [Not clear what the crime was. No mention of it
whatsoever.]
The petitioner, an accused in a criminal case, filed a motion with the
Court of First Instance of Pampanga after he had been bound over to that
court for trial, praying that the record of the case be remanded to the justice
of the peace court of Masantol, the court of origin, in order that the petitioner
 might cross-examine the complainant and her witnesses in connection with
their testimony, on the strength of which warrant was issued for the arrest
of the accused.
The accused, assisted by counsel, appeared at the preliminary
investigation. In that investigation, the justice of the peace informed him of the
charges and asked him if he pleaded guilty or not guilty, upon which he
entered the plea of not guilty. Then his counsel moved that the complainant
present her evidence so that she and her witnesses could be examined and cross-
examined in the manner and form provided by law. The fiscal and the private
prosecutor objected, invoking Section 11 of Rule 108, and the objection was
sustained. In view thereof, the accused's counsel announced his intention to
renounce his right to present evidence, and the justice of the peace
forwarded the case to the court of first instance.

ISSUE:
Whether or not the Justice of the Peace court of Masantol committed grave abuse
of discretion in refusing to grant the accused's motion to return the record
[impliedly allowing the recall of the complainant and the witnesses]?

HELD:The Supreme Court said that Section 11 of Rule 108 does not curtail the
sound discretion of the justice of the peace on the matter. Said section defines
the bounds of the defendant's right in the preliminary investigation, there is
nothing in it or any other law restricting the authority, inherent in a court of
justice, to pursue a course of action reasonably calculated to bring out the truth.
In this respect, the majority believed that the complainant and the
witnesses may be recalled to testify again.

[DISSENT] The minority went farther than the majority and denied even any
discretion on the part of the justice of the peace or judge holding the
preliminary investigation to compel the complainant and his witnesses to
testify anew.

DOMINADOR B. BUSTOS vs. ANTONIO G. LUCERO

G.R. No. L-2068, October 20, 1948

FACTS:
The petitioner herein, an accused in a criminal case, filed a motion with the Court of First Instance
of Pampanga after he had been bound over to that court for trial, praying that the record of the
case be remanded to the justice of the peace court of Masantol, the court of origin, in order that
the petitioner might cross-examine the complainant and her witnesses in connection with their
testimony, on the strength of which warrant was issued for the arrest of the accused. The accused,
assisted by counsel, appeared at the preliminary investigation. In that investigation, the justice of
the peace informed him of the charges and asked him if he pleaded guilty or not guilty, upon which
he entered the plea of not guilty. Then his counsel moved that the complainant present her
evidence so that she and her witnesses could be examined and cross-examined in the manner
and form provided by law. The fiscal and the private prosecutor objected, invoking section 11 of
rule 108, and the objection was sustained. In view thereof, the accused's counsel announced his
intention to renounce his right to present evidence, and the justice of the peace forwarded the
case to the court of first instance.
ISSUE:
Whether or not the Justice of the Peace court of Masantol committed grave abuse of discretion in
refusing to grant the accused's motion to return the record.

HELD:
Evidence is the mode and manner of proving competent facts and circumstances on which a party
relies to establish the fact in dispute in judicial proceedings. It is fundamentally a procedural law.
The Supreme Court that section 11 of Rule 108 does not curtail the sound discretion of the justice
of the peace on the matter. Said section defines the bounds of the defendant's right in the
preliminary investigation, there is nothing in it or any other law restricting the authority, inherent
in a court of justice, to pursue a course of action reasonably calculated to bring out the truth.
The foregoing decision was rendered by a divided court. The minority went farther than the
majority and denied even any discretion on the part of the justice of the peace or judge holding
the preliminary investigation to compel the complainant and his witnesses to testify anew.
Upon the foregoing considerations, the present petition is dismissed with costs against the
petitioner.

TERESITA G. FABIAN v. ANIANO A. DESIERTO, GR No. 129742, 1998-09-16

Facts:
Teresita G. Fabian was the major stockholder and president of PROMAT Construction
Development Corporation (PROMAT) which was engaged in the construction business.
Private respondents
Nestor V. Agustin was the incumbent District Engineering District (FMED) when he
allegedly committed the offenses for which he was administratively charged in the Office in
the office of the Ombudsman.
private respondent, reportedly taking advantage of his official position, inveigled petitioner
into an amorous relationship.
In the present appeal, petitioner argues that Section 27 of Republic Act No. 6770
(Ombudsman Act of 1989)[1] pertinently provides that -
In all administrative diciplinary cases, orders, directives or decisions of the Office of the
Ombudsman may be appealed to the Supreme Court by filing a petition for certiorari within
ten (10) days from receipt of the written notice of the order, directive or... decision or denial
of the motion for reconsideration in accordance with Rule 45 of the Rules of Court.
(Emphasis supplied)
However, she points out that under Section 7, Rule III of Administrative Order No. 07 (Rules
of Procedure of the office of the Ombudsman),[2] when a respondent is absolved of the
charges in an administrative proceeding decision of the ombudsman is final and...
unappealable.
"necessary to take an alternative recourse under Rule 65 of the Rules of Court, because of
the doubt it creates on the availability of appeals under Rule 45 of the Rules of Court.
Republic Act No. 6770 duly implements the Constitutional mandate with these relevant
provisions:
Sec. 14. Restrictions. - x x x No court shall hear any appeal or application for remedy
against the decision or findings of the Ombudsman except the Supreme Court on pure
question on law.
Findings of fact by the Office of the Ombudsman when supported by substantial evidence
are conclusive. Any order, directive or decision imposing the penalty of public censure or
reprimand, suspension of not more than one month salary shall be final and unappealable.
In all administrative disciplinary cases, orders, directives or decisions of the Office of the
Ombudsman may be appealed to the Supreme Court by filing a petition for certiorari within
ten (10) days from receipt of the written notice of the order, directive or decision or denial...
of the motion for reconsideration in accordance with Rule 45 of the Rules of Court.
The above rules may be amended or modified by the Office of the Ombudsman as the
interest of justice may require.
Issues:
She accordingly submits that the office of the ombudsman has no authority under the law to
restrict, in the manner provided in its aforesaid Rules, the right of appeal allowed by
Republic Act No. 6770, nor to limit the power of review of this Court.
Ruling:
Section 27 of Republic Act No. 6770 cannot validly authorize an appeal to this Court from
decisions of the Office of the Ombudsman in administrative disciplinary cases. It...
consequently violates the proscription in Section 30, Article VI of the Constitution against a
law which increases the Appellate jurisdiction of this Court.
Furthermore in addition to our preceding discussion on whether Section 27 of Republic Act
No. 6770 expanded the jurisdiction of this Court without its advice and consent, private
respondent's position paper correctly yields the legislative background of Republic Act No.
6770... t also reveals that Senator
Edgardo Angara, as a co-author and the principal sponsor of S.B. No. 543 admitted that the
said provision will expand this Court's jurisdiction, and that the Committee on Justice and
Human Rights had not consulted this Court on the matter,... As a consequence of our
ratiocination that Section 27 of Republic Act No. 6770 should be struck down as
unconstitutional, and in line with the regulatory philosophy adopted in appeals from quasi-
judicial agencies in the 1997 Revised Rules of Civil Procedure, appeals from... decisions of
the Office of the Ombudsman in administrative disciplinary cases should be taken to the
Court of Appeals under the provisions of Rule 43.
In the situation under consideration, a transfer by the Supreme Court, in the exercise of its
rule-making power, of pending cases involving a review of decisions of the Office of the
Ombudsman in administrative disciplinary actions to the Court of Appeals which shall now
be... vested with exclusive appellate jurisdiction thereover, relates to procedure only... it
cannot be said that transfer of appellate jurisdiction to the Court of Appeals in this case is
an act of creating a new right of appeal because such power of the Supreme Court to
transfer appeals to subordinate appellate courts is purely a procedural and not a...
substantive power.
rules or statutes involving a transfer of cases from one court to another, are procedural and
remedial merely and that, as such, they are applicable to actions pending at the time the
statute went into effect
Accordingly, even from the standpoint of jurisdiction ex hypothesi the validity of the transfer
of appeals in said cases to the Court of Appeals can be sustained.
WHEREFORE, Section 27 of Republic Act No. 6770 (Ombudsman Act of 1989), together
with Section 7, Rule III of Administrative Order No. 07 (Rules of Procedure of the Office of
the Ombudsman), and any other provision of law or issuance implementing the aforesaid
Act and... insofar as they provide for appeals in administrative disciplinary cases from the
Office of the Ombudsman to the Supreme Court, are hereby declared INVALID and of no
further force and effect.
Principles:
First Leparto Ceramics, Inc. vs. The Court of Appeals, el al. [23] was intended to give this
Court a measure of control over cases placed under its appellate Jurisdiction. Otherwise,
the indiscriminate enactment of... legislation enlarging its appellate jurisdiction would
unnecessarily burden the Court
SANTO TOMAS UNIVERSITY HOSPITAL v. CESAR ANTONIO Y. SURLA, GR No.
129718, 1998-08-17
Facts:
respondent spouses filed a complaint for damages against petitioner Santo Tomas
University Hospital with the Regional Trial Court of Quezon City... petitioner hospital filed its
Answer with "Compulsory Counterclaim" asserting that respondents still owed to it the
amount of P82,632.10 representing hospital bills for Emmanuel's confinement at the
hospital and making a claim for moral and exemplary... damages, plus attorney's fees, by
reason of the supposed unfounded and malicious suit filed against it.
petitioner received a copy of respondents' Reply to Counterclaim, dated 12 March 1996,
that sought, inter alia, the dismissal of petitioner's counterclaim for its non-compliance with
Supreme Court Administrative Circular No. 04-94 requiring that a complaint... and other
initiatory pleadings, such as a counterclaim, cross-claim, third (fourt, etc.) party complaint,
be accompanied with a certificate of non-forum shopping
Petitioner concluded that, since its counterclaim was compulsory in nature, the... subject
circular did not perforce apply to it.
the trial court dismissed petitioner's counterclaim,
Issues:
Can a compulsory counterclaim pleaded in an Answer be dismissed on the ground of a
failure to accompany it with a certificate of non-forum shopping?
Ruling:
the circular in question has not, in fact, been contemplated to include a kind of claim which,
by its very nature as being auxiliary to the proceedings in the suit... and as deriving its
substantive and jurisdictional support therefrom, can only be appropriately pleaded in the
answer and not remain outstanding for independent resolution except by the court where
the main case pends
Prescinding from the foregoing, the provisio in the second... paragraph of Section 5, Rule 8
of the 1997 Rules on Civil Procedure, i.e., that the violation of the anti-forum shopping rule
"shall not be curable by mere amendment x x x but shall be cause for the dismissal of the
case without prejudice," being predicated on the applicability... of the need for a certification
against forum shopping, obviously does not include a claim which cannot be independently
set up.
It is the second, not the first, claim that the Court here refers to as not being initiatory in
character and thereby not covered by the... provisions of Administrative Circular No. 04-94.
Principles:
GR NO. 197151
October 22, 2012

SM LAND INC (formerly Shoemart, Inc). And WATSONS PERSONAL CARE STORES,
PHILS, INC vs CITY OF MANILA

FACTS:

On the strength of the provisions of tax ordinances, respondent City of Manila assessed
herein petitioner together with their sister companies, increased rates of business taxes for
the year 2003 and the first quarter of 2004. Petitioner paid the additional taxes under protest.
Aggrieved petitioners and their sister companies filed with the RTC a complaint for refund
and/or Issuance of Tax credit of Taxes Illegally collected. RTC held that tax ordinances had
already been declared null of void. On this ground, RTC ruled that respondents cannot use
the assailed ordinances in imposing additional taxes on petitioner and their co-plaintiffs.
Reconsideration was then denied by RTC. CTA Second Division partially granted the petition
for review. Accordingly, with the exception of Shoemart Inc and WATSONS, it is hereby
ordered to refund the rest of the respondents(sister companies) for their erroneously paid
local business taxes. CTA sustained the ruling of RTC that such ordinances are null and void.
The CTA, nonetheless, held petitioners claims for tax refund should be denied because of
their failure to comply with the provisions of the Rules of Court requiring verification and
certification of non - forum shopping. Motion for partial consideration was filed, however it
 was denied. CTA Enbanc rendered its decision affirming the decision of the CTA Second
Division, Hence, this petition.

ISSUE:

1. Whether or not there were still compelling reasons to justify relaxation of the rules
requiring verification and certification of non-forum shopping.

RULING:

The Court agrees with the petitioners’ contention that there are compelling reasons in
the present case which justify the relaxation of the rules on verification and certification of
non=forum shopping. This Court has held that rules of procedures are established to secure
substantial justice. Being instruments for the speedy and efficient administration of justice,
they must be used to achieve such end , not to derail it. In particular, when a strict and literal
application of the rules on non-forum shopping and verification will result in a patent denial
of substantial justice, these may be liberally construed. In the instant case Watsons’
procedural lapse was its belated submission of a Secretary’s Certificate authorizing Atty. Cruz
as its representative. On the other hand, SM Land, Inc;s infraction was not only its late
submission of its Secretary;s Certificate but also its failure to timely submit its verification and
certification of non-forum shopping. In the present case, there is no dispute that the tax
ordinances have already been declared null and void b this Court. Thus, to the mind of this
Court, the unquestioned nullity of the above assailed tax ordinances, makes petitioners claim
for tax refund clearly meritorious. On this basis, petitioners’ meritorious claims are compelling
reasons to relax the rule on the verification and certification of non forum shopping.

Petitioners and their co-plaintiffs in the trial court filed their claim for tax refund as a
collective group, because they share a common interest and invoke a common cause of
action. Hence, the signature of the representative of the other co-plaintiffs may be considered
as a substantial compliance with the rule on verification and certification of non forum
shopping.

The petition was granted. The decision of CTA are reversed and set aside and orders of
RTC are reinstated.
GR NO. 197151
October 22, 2012

SM LAND INC (formerly Shoemart, Inc). And WATSONS PERSONAL CARE STORES,
PHILS, INC vs CITY OF MANILA

FACTS:

On the strength of the provisions of tax ordinances, respondent City of Manila assessed
herein petitioner together with their sister companies, increased rates of business taxes for
the year 2003 and the first quarter of 2004. Petitioner paid the additional taxes under protest.
Aggrieved petitioners and their sister companies filed with the RTC a complaint for refund
and/or Issuance of Tax credit of Taxes Illegally collected. RTC held that tax ordinances had
already been declared null of void. On this ground, RTC ruled that respondents cannot use
the assailed ordinances in imposing additional taxes on petitioner and their co-plaintiffs.
Reconsideration was then denied by RTC. CTA Second Division partially granted the petition
for review. Accordingly, with the exception of Shoemart Inc and WATSONS, it is hereby
ordered to refund the rest of the respondents(sister companies) for their erroneously paid
local business taxes. CTA sustained the ruling of RTC that such ordinances are null and void.
The CTA, nonetheless, held petitioners claims for tax refund should be denied because of
their failure to comply with the provisions of the Rules of Court requiring verification and
certification of non - forum shopping. Motion for partial consideration was filed, however it
was denied. CTA Enbanc rendered its decision affirming the decision of the CTA Second
Division, Hence, this petition.

ISSUE:

1. Whether or not there were still compelling reasons to justify relaxation of the rules requiring
verification and certification of non-forum shopping.

RULING:

The Court agrees with the petitioners’ contention that there are compelling reasons in
the present case which justify the relaxation of the rules on verification and certification of
 non=forum shopping. This Court has held that rules of procedures are established to secure
substantial justice. Being instruments for the speedy and efficient administration of justice,
they must be used to achieve such end , not to derail it. In particular, when a strict and literal
application of the rules on non-forum shopping and verification will result in a patent denial
of substantial justice, these may be liberally construed. In the instant case Watsons’
procedural lapse was its belated submission of a Secretary’s Certificate authorizing Atty. Cruz
as its representative. On the other hand, SM Land, Inc;s infraction was not only its late
submission of its Secretary;s Certificate but also its failure to timely submit its verification and
certification of non-forum shopping. In the present case, there is no dispute that the tax
ordinances have already been declared null and void b this Court. Thus, to the mind of this
Court, the unquestioned nullity of the above assailed tax ordinances, makes petitioners claim
for tax refund clearly meritorious. On this basis, petitioners’ meritorious claims are compelling
reasons to relax the rule on the verification and certification of non forum shopping.

Petitioners and their co-plaintiffs in the trial court filed their claim for tax refund as a
collective group, because they share a common interest and invoke a common cause of
action. Hence, the signature of the representative of the other co-plaintiffs may be considered
as a substantial compliance with the rule on verification and certification of non forum
shopping.

The petition was granted. The decision of CTA are reversed and set aside and orders of
RTC are reinstated.

REPUBLIC OF THE PHILIPPINES et al. v. HONORABLE RAMON S.

CAGUIOA et al.

536 SCRA 193 (2007), EN BANC

Congress enacted Republic Act (R.A) No. 7227 or the Bases Conversion and Development
Act of 1992 which created the Subic Special Economic and Freeport Zone (SBF) and the
Subic Bay Metropolitan Authority (SBMA). Section 12 of R.A No. 7227 of the law provides
that no taxes, local and national, shall be imposed within the Subic Special Economic
Zone. Pursuant to the law, Indigo Distribution Corporation, et al., which are all domestic
corporations doing business at the SBF, applied for and were granted Certificates
of Registration and Tax Exemption by the SBMA.

Congress subsequently passed R.A. No. 9334, which provides that all applicable taxes,
duties, charges, including excise taxes due thereon shall be applied to cigars and
cigarettes, distilled spirits, fermented liquors and wines brought directly into the
duly chartered or legislated freeports of the Subic Economic Freeport Zone. On the basis
of Section 6 of R.A. No. 9334, SBMA issued a Memorandum declaring that, all
importations of cigars, cigarettes, distilled spirits, fermented liquors and wines into the
SBF, shall be treated as ordinary importations subject to all applicable taxes, duties
and charges, including excise taxes.

Upon its implementation, Indigo et al., sought for a reconsideration of the directives on
the imposition of duties and taxes, particularly excise taxes by the Collector of Customs
and the SBMA Administrator. Their request was subsequently denied prompting them
to file with the RTC of Olongapo City a special civil action for declaratory relief to have
certain provisions of R.A. No. 9334 declared as unconstitutional. They prayed for the
issuance of a writ of preliminary injunction and/or Temporary Restraining Order (TRO)
and preliminary mandatory injunction. The same was subsequently granted by Judge
Ramon Caguioa. The injunction bond was approved at One Million pesos (P1,000,000).

ISSUES:

Whether or not public respondent judge committed grave abuse of discretion amounting
to lack or excess in jurisdiction in peremptorily and unjustly issuing the injunctive writ in
favor of private respondents despite the absence of the legal requisites for its issuance

HELD:

One such case of grave abuse obtained in this case when Judge Caguioa issued his Order
of May 4, 2005 and the Writ of Preliminary Injunction on May 11, 2005 despite the
absence of a clear and unquestioned legal right of private respondents. In holding that the
presumption of constitutionality and validity of R.A. No. 9334 was overcome by private
respondents for the reasons public respondent cited in his May 4, 2005 Order, he
disregarded the fact that as a condition sine qua non to the issuance of a writ of
preliminary injunction, private respondents needed also to show a clear legal right that
ought to be protected. That requirement is not satisfied in this case. To stress, the
possibility of irreparable damage without proof of an actual existing right would not
justify an injunctive relief.

Indeed, Sections 204 and 229 of the NIRC provide for the recovery of erroneously or
illegally collected taxes which would be the nature of the excise taxes paid by private
respondents should Section 6 of R.A. No. 9334 be declared unconstitutional or invalid.

The Court finds that public respondent had also ventured into the delicate area which
courts are cautioned from taking when deciding applications for the issuance of the writ
of preliminary injunction. Having ruled preliminarily against the prima facie validity of
R.A. No. 9334, he assumed in effect the proposition that private respondents in their
petition for declaratory relief were duty bound to prove, thereby shifting to petitioners
the burden of proving that R.A. No. 9334 is not unconstitutional or invalid.
In the same vein, the Court finds Judge Caguioa to have overstepped his discretion when
he arbitrarily fixed the injunction bond of the SBF enterprises at only P1million. Rule 58,
Section 4(b) provides that a bond is executed in favor of the party enjoined to answer for
all damages which it may sustain by reason of the injunction. The purpose of the
injunction bond is to protect the defendant against loss or damage by reason of the
injunction in case the court finally decides that the plaintiff was not entitled to it, and the
bond is usually conditionedaccordingly.

Whether this Court must issue the writ of prohibition, suffice it to stress that being
possessed of the power to act on the petition for declaratory relief, public respondent can
proceed to determine the merits of the main case. Moreover, lacking the requisite proof
of public respondent‘s alleged partiality, this Court has no ground to prohibit him from
proceeding with the case for declaratory relief. For these reasons, prohibition does not lie.