G.R. No.

170354             June 30, 2006 the complaint, upon motion of the defendant, on the ground of the failure to prosecute on plaintiff’s part precipitates or carries
EDGARDO PINGA, Petitioner,  with it the dismissal of the pending counterclaims.
vs. Our core discussion begins with Section 3, Rule 17 of the 1997 Rules of Civil Procedure, which states:
THE HEIRS OF GERMAN, SANTIAGO represented by FERNANDO SANTIAGO, Respondents. SEC. 3. Dismissal due to fault of plaintiff.—If, for no justifiable cause, the plaintiff fails to appear on the date of the presentation
DECISION of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of time, or to comply with these
TINGA, J.: Rules or any order of the court, the complaint may be dismissed upon motion of defendant or upon the court's own motion,
The constitutional faculty of the Court to promulgate rules of practice and procedure1 necessarily carries the power to overturn without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action. This dismissal
judicial precedents on points of remedial law through the amendment of the Rules of Court. One of the notable changes introduced shall have the effect of an adjudication upon the merits, unless otherwise declared by the court.
in the 1997 Rules of Civil Procedure is the explicit proviso that if a complaint is dismissed due to fault of the plaintiff, such The express qualification in the provision that the dismissal of the complaint due to the plaintiff’s fault, as in the case for failure to
dismissal is "without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action."2 The prosecute, is without prejudice to the right of the defendant to prosecute his counterclaim in the same or separate action. This
innovation was instituted in spite of previous jurisprudence holding that the fact of the dismissal of the complaint was sufficient to stands in marked contrast to the provisions under Rule 17 of the 1964 Rules of Court which were superseded by the 1997
justify the dismissal as well of the compulsory counterclaim.3 amendments. In the 1964 Rules, dismissals due to failure to prosecute were governed by Section 3, Rule 17, to wit:
In granting this petition, the Court recognizes that the former jurisprudential rule can no longer stand in light of Section 3, Rule 17 SEC. 3. Failure to prosecute. — If plaintiff fails to appear at the time of the trial, or to prosecute his action for an unreasonable
of the 1997 Rules of Civil Procedure. length of time, or to comply with these rules or any order of the court, the action may be dismissed upon motion of the defendant
The relevant facts are simple enough. Petitioner Eduardo Pinga was named as one of two defendants in a complaint for or upon the court’s own motion. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise provided
injunction4 filed with Branch 29 of the Regional Trial Court (RTC)5 of San Miguel, Zamboanga del Sur, by respondent Heirs of by court.
German Santiago, represented by Fernando Santiago. The Complaint6 dated 28 May 1998 alleged in essence that petitioner and co- Evidently, the old rule was silent on the effect of such dismissal due to failure to prosecute on the pending counterclaims. As a
defendant Vicente Saavedra had been unlawfully entering the coco lands of the respondent, cutting wood and bamboos and result, there arose what one authority on remedial law characterized as "the nagging question of whether or not the dismissal of the
harvesting the fruits of the coconut trees therein. Respondents prayed that petitioner and Saavedra be enjoined from committing complaint carries with it the dismissal of the counterclaim."22 Jurisprudence construing the previous Rules was hardly silent on the
"acts of depredation" on their properties, and ordered to pay damages. matter.
In their Amended Answer with Counterclaim,7 petitioner and his co-defendant disputed respondents’ ownership of the properties In their arguments before the RTC on the dismissal of the counterclaim, respondents cited in support City of Manila v.
in question, asserting that petitioner’s father, Edmundo Pinga, from whom defendants derived their interest in the properties, had Ruymann,23 Domingo v. Santos,24 Belleza v. Huntington,25 and Froilan v. Pan Oriental Shipping Co.,26 all of which were decided
been in possession thereof since the 1930s.8 They alleged that as far back as 1968, respondents had already been ordered ejected more than five decades ago. Notably though, none of the complaints in these four cases were dismissed either due to the fault of
from the properties after a complaint for forcible entry was filed by the heirs of Edmundo Pinga. It was further claimed that the plaintiff or upon the instance of the defendant.27
respondents’ application for free patent over the properties was rejected by the Office of the President in 1971. Defendants in turn The distinction is relevant, for under the previous and current incarnations of the Rules of Civil Procedure, it is Section 3, Rule 17
prayed that owing to respondents’ forcible re-entry in the properties and the irresponsible and reckless filing of the case, they be that governs the dismissals due to the failure of the plaintiff to prosecute the complaint, as had happened in the case at bar.
awarded various types of damages instead in amounts totaling P2,100,000 plus costs of suit.9 Otherwise, it is Section 2, Rule 17, which then, and still is now, covered dismissals ordered by the trial court upon the instance of
By July of 2005, the trial of the case had not yet been completed. Moreover, respondents, as plaintiffs, had failed to present their the plaintiff.28 Yet, as will be seen in the foregoing discussion, a discussion of Section 2 cannot be avoided as the postulate behind
evidence. It appears that on 25 October 2004, the RTC already ordered the dismissal of the complaint after respondents’ counsel that provision was eventually extended as well in cases that should have properly been governed by Section 3.
had sought the postponement of the hearing scheduled then.10 However, the order of dismissal was subsequently reconsidered by Even though the cases cited by respondents involved different factual antecedents, there exists more appropriate precedents which
the RTC in an Order dated 9 June 2005, which took into account the assurance of respondents’ counsel that he would give priority they could have cited in support of their claim that the counterclaim should have been dismissed even if the dismissal of the
to that case.11 complaint was upon the defendants’ motion and was predicated on the plaintiff’s fault. BA Finance Corp. v. Co29 particularly
At the hearing of 27 July 2005, plaintiffs’ counsel on record failed to appear, sending in his stead a representative who sought the stands out in that regard, although that ruling is itself grounded on other precedents as well. Elucidation of these cases is in order.
postponement of the hearing. Counsel for defendants (who include herein petitioner) opposed the move for postponement and On the general effect of the dismissal of a complaint, regardless of cause, on the pending counterclaims, previous jurisprudence
moved instead for the dismissal of the case. The RTC noted that it was obvious that respondents had failed to prosecute the case laid emphasis on whether the counterclaim was compulsory or permissive in character. The necessity of such distinction was
for an unreasonable length of time, in fact not having presented their evidence yet. On that ground, the complaint was dismissed. provided in the 1964 Rules itself, particularly Section 2, Rule 17, which stated that in instances wherein the plaintiff seeks the
At the same time, the RTC allowed defendants "to present their evidence ex-parte."12 dismissal of the complaint, "if a counterclaim has been pleaded by a defendant prior to the service upon him of the plaintiff’s
Respondents filed a Motion for Reconsideration13 of the order issued in open court on 27 July 2005, opting however not to seek motion to dismiss, the action shall not be dismissed against the defendant’s objection unless the counterclaim can remain pending
that their complaint be reinstated, but praying instead that the entire action be dismissed and petitioner be disallowed from for independent adjudication by the court."30The
presenting evidence ex-parte. Respondents claimed that the order of the RTC allowing petitioner to present evidence ex-parte was vaunted commentaries of Chief Justice Moran, remarking on Section 2, Rule 17, noted that "[t]here are instances in which a
not in accord with established jurisprudence. They cited cases, particularly City of Manila v. Ruymann14 and Domingo v. counterclaim cannot remain pending for independent adjudication, as, where it arises out of, or is necessarily connected with, the
Santos,15 which noted those instances in which a counterclaim could not remain pending for independent adjudication. transaction or occurrence which is the subject matter of the opposing party’s claim."31
On 9 August 2005, the RTC promulgated an order granting respondents’ Motion for Reconsideration and dismissing the This view expressed in Moran’s Commentaries was adopted by the Court in cases where the application of Section 2, Rule 17 of
counterclaim, citing as the only ground therefor that "there is no opposition to the Motion for Reconsideration of the the 1964 Rules of Court was called for, such as in Lim Tanhu v. Ramolete,32 and Dalman v. City Court of Dipolog City.33 The latter
[respondents]."16 Petitioner filed a Motion for Reconsideration, but the same was denied by the RTC in an Order dated 10 October case warrants brief elaboration. Therein, the plaintiff in a civil case for damages moved for the withdrawal of her own case on the
2005.17 Notably, respondents filed an Opposition to Defendants’ Urgent Motion for Reconsideration, wherein they argued that the ground that the dispute had not been referred to the barangay council as required by law. Over the objection of the defendant, who
prevailing jurisprudential rule18 is that "compulsory counterclaims cannot be adjudicated independently of plaintiff’s cause of feared that her own counterclaim would be prejudiced by the dismissal, plaintiff’s motion was granted, the complaint and the
action," and "a conversu, the dismissal of the complaint carries with it the dismissal of the compulsory counterclaims."19 counterclaim accordingly dismissed by the trial court. The Court refused to reinstate the counterclaim, opining without
The matter was elevated to this Court directly by way of a Petition for Review under Rule 45 on a pure question of law, the most elaboration, "[i]f the civil case is dismissed, so also is the counterclaim filed therein."34 The broad nature of that statement gave
relevant being whether the dismissal of the complaint necessarily carries the dismissal of the compulsory counterclaim. rise to the notion that the mandatory
We hold that under Section 3, Rule 17 of the 1997 Rules of Civil Procedure, the dismissal of the complaint due to the fault of dismissal of the counterclaim upon dismissal of the complaint applied regardless of the cause of the complaint’s dismissal.35
plaintiff does not necessarily carry with it the dismissal of the counterclaim, compulsory or otherwise. In fact, the dismissal of the Notably, the qualification concerning compulsory counterclaims was provided in Section 2, Rule 17 of the 1964 Rules, the
complaint is without prejudice to the right of defendants to prosecute the counterclaim. provision governing dismissals by order of the court, and not Section 3, Rule 17. As stated earlier, Section 3, which covered
On a prefatory note, the RTC, in dismissing the counterclaim, did not expressly adopt respondents’ argument that the dismissal of dismissals for failure to prosecute upon motion of the defendant or upon motu proprioaction of the trial court, was silent on the
their complaint extended as well to the counterclaim. Instead, the RTC justified the dismissal of the counterclaim on the ground effect on the counterclaim of dismissals of such nature.
that "there is no opposition to [plaintiff’s] Motion for Reconsideration [seeking the dismissal of the counterclaim]."20 This Spouses Sta. Maria, Jr. v. Court of Appeals,36 decided in 1972, ostensibly supplied the gap on the effect on the counterclaim of
explanation is hollow, considering that there is no mandatory rule requiring that an opposition be filed to a motion for complaints dismissed under Section 3. The defendants therein successfully moved before the trial court for the dismissal of the
reconsideration without need for a court order to that effect; and, as posited by petitioner, the "failure to file an opposition to the complaint without prejudice and their declaration in default on the counterclaim after plaintiffs therein failed to attend the pre-trial.
Plaintiff’s Motion for Reconsideration is definitely not one among the established grounds for dismissal [of the After favorable judgment was rendered on the counterclaim, plaintiffs interposed an appeal, citing among other grounds, that the
counterclaim]."21 Still, the dismissal of the counterclaim by the RTC betrays at very least a tacit recognition of respondents’ counterclaim could no longer have been heard after the dismissal of the complaint. While the Court noted that the adjudication of
argument that the counterclaim did not survive the dismissal of the complaint. At most, the dismissal of the counterclaim over the the counterclaim in question "does not depend upon the adjudication of the claims made in the complaint since they were virtually
objection of the defendant (herein petitioner) on grounds other than the merits of the counterclaim, despite the provisions under abandoned by the non-appearance of the plaintiffs themselves," it was also added that "[t]he doctrine invoked is not available to
Rule 17 of the 1997 Rules of Civil Procedure, constitutes a debatable question of law, presently meriting justiciability through the plaintiffs like the petitioners, who prevent or delay the hearing of their own claims and allegations."37 The Court, through Justice
instant action. Indeed, in reviewing the assailed orders of the RTC, it is inevitable that the Court consider whether the dismissal of JBL Reyes, noted:
The doctrine that the complaint may not be dismissed if the counterclaim cannot be independently adjudicated is not Justice Regalado also adverted to Sta. Maria and noted that the objections raised and rejected by the Court therein were the same
available to, and was not intended for the benefit of, a plaintiff who prevents or delays the prosecution of his own as those now relied upon by the plaintiff. He pointed out that Dalman and International Container, both relied upon by the
complaint. Otherwise, the trial of counterclaims would be made to depend upon the maneuvers of the plaintiff, and the rule would majority, involved the application of Section 2, Rule 17 and not Section 3, which he insisted as the applicable provision in the case
offer a premium to vexing or delaying tactics to the prejudice of the counterclaimants. It is in the same spirit that we have ruled at bar.51
that a complaint may not be withdrawn over the opposition of the defendant where the counterclaim is one that arises from, or is The partial dissent of Justice Regalado in BA Finance proved opportune, as he happened then to be a member of the Rules of
necessarily connected with, the plaintiff’s action and cannot remain pending for independent adjudication.38 Court Revision Committee tasked with the revision of the 1964 Rules of Court. Just a few months after BA Finance was decided,
There is no doubt that under the 1964 Rules, the dismissal of a complaint due to the failure of the plaintiff to appear during pre- Justice Regalado proposed before the Committee an amendment to Section 3, Rule 17 that would explicitly provide that the
trial, as what had happened in Sta. Maria, fell within the coverage of Section 3, Rule 17. On the other hand, Section 2 was clearly dismissal of the complaint due to the fault of the plaintiff shall be "without prejudice to the right of the defendant to prosecute his
limited in scope to those dismissals sustained at the instance of the plaintiff.39Nonetheless, by the early 1990s, jurisprudence was counterclaim in the same or in a separate action." The amendment, which was approved by the Committee, is reflected in the
settling on a rule that compulsory counterclaims were necessarily terminated upon the dismissal of the complaint not only if such minutes of the meeting of the Committee held on 12 October 1993:
dismissal was upon motion of the plaintiff, but at the instance of the defendant as well. Two decisions from that period stand out in [Justice Regalado] then proposed that after the words "upon the court’s own motion" in the 6th line of the draft in Sec. 3 of Rule
this regard, Metals Engineering Resources Corp. v. Court of Appeals40 and International Container Terminal Services v. Court of 17, the following provision be inserted: "without prejudice to the right of the defendant to prosecute his counterclaim in the
Appeals.41 same or in a separate action." The Committee agreed with the proposed amendment of Justice Regalado.
In Metals, the complaint was expunged from the record after the defendant had filed a motion for reconsideration of a trial court Justice Herrera observed that under Secs. 1 to 3 of Rule 17, it is not the action that is dismissed but the complaint. He asked
order allowing the filing of an amended complaint that corrected a jurisdictional error in the original complaint pertaining to the whether there is any distinction between "complaint" and "action." Justice Regalado opined that the action of the plaintiff is
specification of the amount of damages sought. When the defendant was nonetheless allowed to present evidence on the initiated by his complaint.
counterclaim, the plaintiff assailed such allowance on the ground that the counterclaim was compulsory and could no longer Justice Feria then suggested that the dismissal be limited to the complaint[.] Thus, in the 1st line of Sec. 1, the words "An
remain pending for independent adjudication. The Court, in finding for the plaintiff, noted that the counterclaim was indeed action" will be changed to "a complaint"; in the 2nd line of Sec. 2, the words "an action" will be changed to "a complaint"
compulsory in nature, and as such, was auxiliary to the proceeding in the original suit and derived its jurisdictional support and in Sec. 3, the word "action" on the 5th line of the draft will be changed to "complaint." The Committee agreed with
therefrom.42 It was further explained that the doctrine was in consonance with the primary objective of a counterclaim, which was Justice Feria’s suggested amendments.
to avoid and prevent circuitry of action by allowing the entire controversy between the parties to be litigated and finally CA Paño believed that there is a need to clarify the counterclaim that the defendant will prosecute, whether it is permissive
determined in one action, and to discourage multiplicity of suits.43 Also, the Court noted that since the complaint was dismissed for or compulsory or all kinds of counterclaims.
lack of jurisdiction, it was as if no claim was filed against the defendant, and there was thus no more leg for the complaint to stand Justice Regalado opined that there is no need of making a clarification because it is already understood that it covers both
on.44 counterclaims.52
In International Container, the defendant filed a motion to dismiss which was granted by the trial court. The defendant’s It is apparent from these minutes that the survival of the counterclaim despite the dismissal of the complaint under Section 3 stood
counterclaim was dismissed as well. The Court summarized the key question as "what is the effect of the dismissal of a complaint irrespective of whether the counterclaim was permissive or compulsory. Moreover, when the Court itself approved the revisions
ordered at the instance of the defendant upon a compulsory counterclaim duly raised in its answer."45 Then it ruled that the now contained in the 1997 Rules of Civil Procedure, not only did Justice Regalado’s amendment to Section 3, Rule 17 remain
counterclaim did not survive such dismissal. After classifying the counterclaim therein as compulsory, the Court noted that "[i]t is intact, but the final version likewise eliminated the qualification formerly offered under Section 2 on "counterclaims that can
obvious from the very nature of the counterclaim that it could not remain pending for independent adjudication, that is, without remain pending for independent adjudication by the court."53 At present, even Section 2, concerning dismissals on motion of the
adjudication by the court of the complaint itself on which the counterclaim was based."46 plaintiff, now recognizes the right of the defendant to prosecute the counterclaim either in the same or separate action
Then in 1993, a divided Court ruled in BA Finance that the dismissal of the complaint for nonappearance of plaintiff at the pre- notwithstanding the dismissal of the complaint, and without regard as to the permissive or compulsory nature of the counterclaim.
trial, upon motion of the defendants, carried with it the dismissal of their compulsory counterclaim.47 The Court reiterated the rule In his commentaries on the 1997 Rules of Civil Procedure, Justice Regalado expounds on the effects of the amendments to Section
that "a compulsory counterclaim cannot remain pending for independent adjudication by the court… as it is auxiliary to the 2 and 3 of Rule 17:
proceeding in the original suit and merely derives its jurisdictional support therefrom."48 Express reliance was made on Metals, 2. Under this revised section [2], where the plaintiff moves for the dismissal of his complaint to which a counterclaim has been
International Container, and even Dalman in support of the majority’s thesis. BA Finance likewise advised that the proper remedy interposed, the dismissal shall be limited to the complaint. Such dismissal shall be without prejudice to the right of the defendant
for defendants desirous that their counterclaims not be dismissed along with the main complaint was for them to move to declare to either prosecute his counterclaim in a separate action or to have the same resolved in the same action. Should he opt for the first
the plaintiffs to be "non-suited" on their complaint and "as in default" on their compulsory counterclaim, instead of moving for the alternative, the court should render the corresponding order granting and reserving his right to prosecute his claim in a separate
dismissal of the complaint.49 complaint. Should he choose to have his counterclaim disposed of in the same action wherein the complaint had been dismissed,
Justice Regalado, joined by Chief Justice Narvasa, registered a strong objection to the theory of the majority. They agreed that the he must manifest such preference to the trial court within 15 days from notice to him of plaintiff’s motion to dismiss. These
trial court could no longer hear the counterclaim, but only on the ground that defendant’s motion to be allowed to present evidence alternative remedies of the defendant are available to him regardless of whether his counterclaim is compulsory or
on the counterclaim was filed after the order dismissing the complaint had already become final. They disagreed however that the permissive. A similar alternative procedure, with the same underlying reason therefor, is adopted in Sec. 6, Rule 16 and Sec. 3 of
compulsory counterclaim was necessarily dismissed along with the main complaint, pointing out that a situation wherein the this Rule, wherein the complaint is dismissed on the motion of the defendant or, in the latter instance, also by the court motu
dismissal of the complaint was occasioned by plaintiff’s failure to appear during pre-trial was governed under Section 3, Rule 17, proprio.
and not Section 2 of the same rule. Justice Regalado, who ironically penned the decision in Metals cited by the majority, xxxx
explained: 2. The second substantial amendment to [Section 3] is with respect to the disposition of the defendant’s counterclaim in the event
Turning back to Rule 17, it is readily apparent that Sections 2 and 3 thereof envisage different factual and adjective situations. The the plaintiff’s complaint is dismissed. As already observed, he is here granted the choice to prosecute that counterclaim in either
dismissal of the complaint under Section 2 is at the instance of plaintiff, for whatever reason he is minded to move for such the same or a separate action. x x x x
dismissal, and, as a matter of procedure, is without prejudice unless otherwise stated in the order of the court or, for that matter, in 3. With the aforestated amendments in Secs. 2 and 3 laying down specific rules on the disposition of counterclaims involved
plaintiff's motion to dismiss his own complaint. By reason thereof, to curb any dubious or frivolous strategy of plaintiff for his in the dismissal actions, the controversial doctrine in BA Finance Corporation vs. Co, et al., (G.R. No. 105751, June 30,
benefit or to obviate possible prejudice to defendant, the former may not dismiss his complaint over the defendant's objection if 1993) has been abandoned, together with the apparent confusion on the proper application of said Secs. 2 and 3. Said
the latter has a compulsory counterclaim since said counterclaim would necessarily be divested of juridical basis and defendant sections were distinguished and discussed in the author’s separate opinion in that case, even before they were clarified by the
would be deprived of possible recovery thereon in that same judicial proceeding. present amendments x x x.54
Section 3, on the other hand, contemplates a dismissal not procured by plaintiff, albeit justified by causes imputable to him and Similarly, Justice Feria notes that "the present rule reaffirms the right of the defendant to move for the dismissal of the complaint
which, in the present case, was petitioner's failure to appear at the pre-trial. This situation is also covered by Section 3, as extended and to prosecute his counterclaim, as stated in the separate opinion [of Justice Regalado in BA Finance.]"55 Retired Court of
by judicial interpretation, and is ordered upon motion of defendant or motu proprio by the court. Here, the issue of whether Appeals Justice Herrera pronounces that the amendment to Section 3, Rule 17 settles that "nagging question" whether the
defendant has a pending counterclaim, permissive or compulsory, is not of determinative significance. The dismissal of plaintiff's dismissal of the complaint carries with it the dismissal of the counterclaim, and opines that by reason of the amendments, the
complaint is evidently a confirmation of the failure of evidence to prove his cause of action outlined therein, hence the dismissal is rulings in Metals Engineering, International Container, and BA Finance "may be deemed abandoned."56 On the effect of
considered, as a matter of evidence, an adjudication on the merits. This does not, however, mean that there is likewise such amendment to Section 3, Rule 17, the commentators are in general agreement,57 although there is less unanimity of views insofar
absence of evidence to prove defendant's counterclaim although the same arises out of the subject matter of the complaint which as Section 2, Rule 17 is concerned.58
was merely terminated for lack of proof. To hold otherwise would not only work injustice to defendant but would be reading a To be certain, when the Court promulgated the 1997 Rules of Civil Procedure, including the amended Rule 17, those previous
further provision into Section 3 and wresting a meaning therefrom although neither exists even by mere implication. Thus jural doctrines that were inconsistent with the new rules incorporated in the 1997 Rules of Civil Procedure were implicitly
understood, the complaint can accordingly be dismissed, but relief can nevertheless be granted as a matter of course to defendant abandoned insofar as incidents arising after the effectivity of the new procedural rules on 1 July 1997. BA Finance, or even the
on his counterclaim as alleged and proved, with or without any reservation therefor on his part, unless from his conduct, express or doctrine that a counterclaim may be necessarily dismissed along with the complaint, clearly conflicts with the 1997 Rules of Civil
implied, he has virtually consented to the concomitant dismissal of his counterclaim.50 Procedure. The abandonment of BA Finance as doctrine extends as far back as 1997, when the Court adopted the new Rules of
Civil Procedure. If, since then, such abandonment has not been affirmed in jurisprudence, it is only because no proper case has
arisen that would warrant express confirmation of the new rule. That opportunity is here and now, and we thus rule that the pursue such action, let the dismissal of the counterclaim be premised on those grounds imputable to the defendant, and not on the
dismissal of a complaint due to fault of the plaintiff is without prejudice to the right of the defendant to prosecute any pending actuations of the plaintiff.
counterclaims of whatever nature in the same or separate action. We confirm that BA Finance and all previous rulings of the Court The other considerations supplied in Metals are anchored on the premise that the jurisdictional foundation of the counterclaim is
that are inconsistent with this present holding are now abandoned. the complaint itself. The theory is correct, but there are other facets to this subject that should be taken into account as well. On the
Accordingly, the RTC clearly erred when it ordered the dismissal of the counterclaim, since Section 3, Rule 17 mandates that the established premise that a counterclaim involves separate causes of action than the complaint even if derived from the same
dismissal of the complaint is without prejudice to the right of the defendant to prosecute the counterclaim in the same or separate transaction or series of transactions, the counterclaim could have very well been lodged as a complaint had the defendant filed the
action. If the RTC were to dismiss the counterclaim, it should be on the merits of such counterclaim. Reversal of the RTC is in action ahead of the complainant.69 The terms "ancillary" or "auxiliary" may mislead in signifying that a complaint innately
order, and a remand is necessary for trial on the merits of the counterclaim. possesses more credence than a counterclaim, yet there are many instances wherein the complaint is trivial but the counterclaim is
It would be perfectly satisfactory for the Court to leave this matter at that. Still, an explanation of the reason behind the new rule is meritorious. In truth, the notion that a counterclaim is, or better still, appears to be merely "ancillary" or "auxiliary" is chiefly the
called for, considering that the rationale behind the previous rule was frequently elaborated upon. offshoot of an accident of chronology, more than anything else.
Under Act No. 190, or the Code of Procedure in Civil Actions promulgated in 1901, it was recognized in Section 127(1) that the The formalistic distinction between a complaint and a counterclaim does not detract from the fact that both of them embody causes
plaintiff had the right to seek the dismissal of the complaint at any time before trial, "provided a counterclaim has not been made, of action that have in their end the vindication of rights. While the distinction is necessary as a means to facilitate order and clarity
or affirmative relief sought by the cross-complaint or answer of the defendant."59Note that no qualification was made then as to the in the rules of procedure, it should be remembered that the primordial purpose of procedural rules is to provide the means for the
nature of the counterclaim, whether it be compulsory or permissive. The protection of the defendant’s right to prosecute the vindication of rights. A party with a valid cause of action against another party cannot be denied the right to relief simply because
counterclaim was indeed unqualified. In City of Manila, decided in 1918, the Court explained: the opposing side had the good fortune of filing the case first. Yet this in effect was what had happened under the previous
By paragraph 1 [of Section 127], it will be seen that, where the defendant has interposed a counterclaim, or is seeking affirmative procedural rule and correspondent doctrine, which under their final permutation, prescribed the automatic dismissal of the
relief by a cross-complaint, that then, and in that case, the plaintiff cannot dismiss the action so as to affect the right of the compulsory counterclaim upon the dismissal of the complaint, whether upon the initiative of the plaintiff or of the defendant.
defendant in his counterclaim or prayer for affirmative relief. The reason for that exception is clear. When the answer sets up an Thus, the present rule embodied in Sections 2 and 3 of Rule 17 ordains a more equitable disposition of the counterclaims by
independent action against the plaintiff, it then becomes an action by the defendant against the plaintiff, and, of course, the ensuring that any judgment thereon is based on the merit of the counterclaim itself and not on the survival of the main complaint.
plaintiff has no right to ask for a dismissal of the defendant’s action.60 Certainly, if the counterclaim is palpably without merit or suffers jurisdictional flaws which stand independent of the complaint,
Nonetheless, a new rule was introduced when Act No. 190 was replaced by the 1940 Rules of Court. Section 2, Rule 30 of the the trial court is not precluded from dismissing it under the amended rules, provided that the judgment or order dismissing the
1940 Rules specified that if a counterclaim is pleaded by a defendant prior to the service of the plaintiff’s motion to dismiss, the counterclaim is premised on those defects. At the same time, if the counterclaim is justified, the amended rules now unequivocally
action shall not be dismissed against the defendant’s objection unless the counterclaim can remain pending for independent protect such counterclaim from peremptory dismissal by reason of the dismissal of the complaint.
adjudication by the court. This qualification remained intact when the 1964 Rules of Court was introduced.61 The rule referred WHEREFORE, the petition is GRANTED. The Orders dated 9 August 2005 and 10 October 2005 of Branch 29, Regional Trial
only to compulsory counterclaims, or counterclaims which arise out of or are necessarily connected with the transaction or Court of San Miguel, Zamboanga del Sur in Civil Case No. 98-012 are SET ASIDE. Petitioner’s counterclaim as defendant in
occurrence that is the subject matter of the plaintiff’s claim, since the rights of the parties arising out of the same transaction Civil Case. No. 98-012 is REINSTATED. The Regional Trial Court is ORDERED to hear and decide the counterclaim with
should be settled at the same time.62 As was evident in Metals, International Container and BA Finance, the rule was eventually deliberate dispatch.
extended to instances wherein it was the defendant with the pending counterclaim, and not the plaintiff, that moved for the SO ORDERED.
dismissal of the complaint.
We should not ignore the theoretical bases of the rule distinguishing compulsory counterclaims from permissive counterclaims
insofar as the dismissal of the action is concerned. There is a particular school of thought that informs the broad proposition
in Dalman that "if the civil case is dismissed, so also is the counterclaim filed therein,"63 or the more nuanced discussions offered
in Metals, International Container, and BA Finance. The most potent statement of the theory may be found in Metals,64 which
proceeds from the following fundamental premises—a compulsory counterclaim must be set up in the same proceeding or would
otherwise be abated or barred in a separate or subsequent litigation on the ground of auter action pendant, litis pendentia or res
judicata; a compulsory counterclaim is auxiliary to the main suit and derives its jurisdictional support therefrom as it arises out of
or is necessarily connected with the transaction or occurrence that is the subject matter of the complaint;65 and that if the court
dismisses the complaint on the ground of lack of jurisdiction, the compulsory counterclaim must also be dismissed as it is merely
ancilliary to the main action and no jurisdiction remained for any grant of relief under the counterclaim.
The first point is derived from Section 4, Rule 9, of the 1964 Rules of Court, while the two latter points are sourced from
American jurisprudence. There is no disputing the theoretical viability of these three points. In fact, the requirement that the
compulsory counterclaim must be set up in the same proceeding remains extant under the 1997 Rules of Civil Procedure.66 At the
same time, other considerations rooted in actual practice provide a counterbalance to the above-cited rationales.
Whatever the nature of the counterclaim, it bears the same integral characteristics as a complaint; namely a cause (or causes) of
action constituting an act or omission by which a party violates the right of another. The main difference lies in that the cause of
action in the counterclaim is maintained by the defendant against the plaintiff, while the converse holds true with the complaint.
Yet, as with a complaint, a counterclaim without a cause of action cannot survive.
It would then seemingly follow that if the dismissal of the complaint somehow eliminates the cause(s) of the counterclaim, then
the counterclaim cannot survive. Yet that hardly is the case, especially as a general rule. More often than not, the allegations
that form the counterclaim are rooted in an act or omission of the plaintiff other than the plaintiff’s very act of filing the
complaint. Moreover, such acts or omissions imputed to the plaintiff are often claimed to have occurred prior to the filing
of the complaint itself. The only apparent exception to this circumstance is if it is alleged in the counterclaim that the very
act of the plaintiff in filing the complaint precisely causes the violation of the defendant’s rights. Yet even in such an
instance, it remains debatable whether the dismissal or withdrawal of the complaint is sufficient to obviate the pending
cause of action maintained by the defendant against the plaintiff. 67
These considerations persist whether the counterclaim in question is permissive or compulsory. A compulsory counterclaim arises
out of or is connected with the transaction or occurrence constituting the subject matter of the opposing party’s claim, does not
require for its adjudication the presence of third parties, and stands within the jurisdiction of the court both as to the amount
involved and the nature of the claim.68 The fact that the culpable acts on which the counterclaim is based are founded within the
same transaction or occurrence as the complaint, is insufficient causation to negate the counterclaim together with the complaint.
The dismissal or withdrawal of the complaint does not traverse the boundaries of time to undo the act or omission of the plaintiff
against the defendant, or vice versa. While such dismissal or withdrawal precludes the pursuit of litigation
by the plaintiff, either through his/her own initiative or fault, it would be iniquitous to similarly encumber the defendant who
maintained no such initiative or fault. If the defendant similarly moves for the dismissal of the counterclaim or neglects to timely
 FIRST DIVISION On 26 March 1990, respondents filed a complaint against Mercedes Oliver and Filinvest before the Provincial Agrarian Reform
G.R. No. 142439             December 6, 2006 Adjudication (PARAD) of Sta. Cruz, Laguna, seeking to annul the Deed of Sale between the Spouses Alvarez and Mercedes
FILINVEST LAND, INC., petitioner,  Oliver and the subsequent transfer between Mercedes Oliver and Filinvest, on grounds similar to the complaint filed before the
vs. RTC of Biñan. They also sought the issuance of a restraining order enjoining Filinvest from bulldozing the subject land, which
HON. COURT OF APPEALS and ROMEO, ANTONIO, JOSEFINA, RICARDO (JR.), all surnamed ALVAREZ and was occupied and cultivated by the respondents. Mercedes Oliver filed a Motion to Dismiss on the grounds of res judicata and that
VENANCIA R. Vda. de ALVAREZ, for herself as guardian ad litem for her minor children, RAMON, VERONICA, and the PARAD had no jurisdiction over the subject matter of the case. Filinvest similarly filed a motion to dismiss on the grounds
FLORDELIZA, all surnamed ALVAREZ, and as necessary and indispensable party plaintiffs JAIME, VICTORIA, and of res judicata and laches. It also alleged, in its defense, that it was a purchaser for value and in good faith. In its Position Paper,
MANUEL, all surnamed ALVAREZ, and ROSARIO PARAM Vda. de ALVAREZ,respondents. Filinvest likewise asserted that the restriction against selling the subject land within ten years, provided under the Deed of Sale
executed by DAR in favor of the Spouses Alvarez had already been superseded by Presidential Decree No. 1474, which took
effect in 1978.14
On 25 August 1993, the PARAD of Sta. Cruz, Laguna, dismissed the complaint on the ground of res judicata. Moreover, it ruled
DECISION that the sale between the Spouses Alvarez and Mercedes Oliver was valid.15 The dispositive part of this Decision16 reads:
WHEREFORE, in view therefrom, Judgment is hereby rendered dismissing the instant case for lack of merit.
On appeal, the DARAB reversed and set aside the Decision dismissing the complaint, and ordered the reversion of the subject
CHICO-NAZARIO, J.: property to the government. The dispositive portion of the said Order,17 dated 1 July 1998 reads:
This is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Court, as amended, seeking to set aside a WHEREFORE, premises considered, the challenged decision dated August 25, 1993 is hereby REVERSED and SET
Decision1 of the Court of Appeals dated 11 November 1998 in CA–G.R. SP No. 48396 annulling the sale of a parcel of land ASIDE and a new judgment is hereby rendered as follows:
specified as Lot No. 329, GSS-877 of the Laguna Resettlement Project, to the late Ricardo Alvarez and the subsequent transfers to 1. Annulling the transfer of the land in question to the late Ricardo Alvarez and its subsequent transfers to defendant
Mercedes Oliver and petitioner Filinvest Land Inc. (Filinvest); and the reversion of the subject property to the ownership of the Mercedes Oliver and defendant Filinvest Land Incorporated;
government. The Court of Appeals in its assailed Decision affirmed the Decision2 of the Department of Agrarian Reform 2. Ordering the cancellation of Transfer Certificate of Title No. 201836, covering the subject land, issued by the
Adjudication Board (DARAB) dated 1 July 1998. Register of Deeds for the Province of Laguna, Calamba branch, in the name of defendant Filinvest; and
The subject matter in this case is a parcel of land registered as Lot No. 329 of the Laguna Resettlement Project, located in Barrio 3. Directing the Register of Deeds for the Province of Laguna, Calamba branch, to issue in lieu of TCT No. 201836, a
San Vicente, San Pedro, Laguna, with an area of 16,495 square meters. The Department of Agrarian Reform (DAR) awarded to Certificate of Title in the name of the Republic of the Philippines, through DAR, for distribution to qualified farmer-
Ricardo Alvarez the right to purchase the land in question, pursuant to an Order of Award dated 9 October 1973.3 On 15 August beneficiary in accordance with Administrative Order No. 01, Series of 1992, which is the Revised Rules and
1977, Ricardo Alvarez, with the consent of his wife, respondent Rosario Param, purchased the land, evidenced by a Deed of Sale Procedures Governing the Disposition of Homelots and other Lots in Barangay Sites and Residential, Commercial,
executed by the DAR.4 This Deed of Sale specifically prohibited the transfer of the land within ten (10) years from the issuance of and Industrial Lots in Townsites within DAR Settlement Project and Similar Other Areas under DAR Jurisdiction.
the certificate of title to any person other than the vendee’s relatives within the third civil degree by consanguinity or affinity who The DARAB ruled, too, that res judicata as a bar against filing a complaint with the PARAD is not applicable in this case since
are, at the same time, qualified beneficiaries.5 This restriction was in accordance with Section 62 of Republic Act No. 3844, or the there was no adjudication of the merits before the RTC of Biñan.
Agricultural Land Reform Code.6 The DARAB considered as self-serving and unsupported by evidence the allegations of the respondents that the consent of the
However, pending the issuance of the certificate of title of the said land, Presidential Decree No. 1474, Declaring the San Pedro Spouses Alvarez was obtained through fraud in connection with the sale made in favor of Mercedes Oliver. It also ruled that the
Tunasan Estate (also known as the Laguna Resettlement Project) of the Department of Agrarian Reform Suitable for Residential, sale between Ricardo Alvarez and Mercedes Oliver was a violation of the ten-year prohibition against the transfer of the land
Commercial, or Industrial, or other Non-Agricultural Purposes, was enacted on 11 June 1978 and published in the Official Gazette imposed by the Deed of Sale between the government and Ricardo Alvarez, in accordance with Section 62 of Republic Act No.
on 27 November 1978. This effectively repealed the ten-year prohibition on the transfer of agrarian lands situated in the Laguna 3844. Such act rendered the Deed of Sale executed by the DAR in favor of Ricardo Alvarez void, and, therefore, the subsequent
Resettlement Project. Presidential Decree No. 1474 provided that: transfers to Mercedes Oliver and Filinvest were, likewise, void.18
Section 1. The Department of Agrarian Reform, as Administrator of the San Pedro Tunasan Estate, is hereby ordered In negating Filinvest’s claim that Presidential Decree No. 1474 has superseded Section 62 of Republic Act No. 3844, the DARAB
to convert such estate into a commercial, industrial and residential site and to transfer the same to the National cited the case of Tipon v. Intermediate Appellate Court,19 where the Court upheld the validity of the ten-year prohibition on the
Housing Authority. transfer of land given by the government to farmer-beneficiaries. The DARAB added that the restriction on transfer of land is
Section 2. Individuals who have legally acquired farm lots in the Estate under Orders of Award or Certificates of contained in our present agrarian laws, particularly Republic Act No. 6675.20
Land Transfer or Agreement to Sell or Deeds of Sale, may sell or transfer their lots covered thereby or convert the The petitioners then filed a Petition for Certiorari under Section 43 of the 1997 Rules of Court before the Court of Appeals, but on
same for the purposes mentioned in Section 1 hereof. 11 November 1998, the appeal was again dismissed for lack of merit and the assailed Decision of the DARAB was affirmed. 21
The Register of Deeds of the Province of Laguna issued Transfer Certificate of Title (TCT) No. 62731, covering the subject land, The petitioners filed a Motion for Reconsideration, which was subsequently denied in a Resolution dated 8 February 1999.22
in the name of Ricardo Alvarez on 25 May 1979. On 10 June 1979, only 16 days after the title was issued, Ricardo Alvarez and his Hence this petition, wherein Filinvest raised the following issues:
wife, Rosario Param, sold the said land to Mercedes Oliver for Ten Thousand Pesos (P10, 000.00). Oliver was not a relative within I
the third degree of consanguinity and had no capacity to personally cultivate the land, as required of a qualified beneficiary. Thus, WHETHER OR NOT THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AND COMMITTED
TCT No. 62731 was cancelled, and TCT No. 64967 was issued in the name of Mercedes Oliver.7 REVERSIBLE ERROR IN HOLDING THAT THE SALE OF THE SUBJECT PARCEL OF LAND BY RICARDO
On 22 December 1989, Mercedes Oliver sold the subject land to Filinvest, resulting in the issuance of TCT No. 201836 on 23 ALVAREZ TO MERCEDES OLIVER VIOLATED THE TRANSFER RESTRICTION CONTAINED IN THE
January 1990 in the name of Filinvest.8 PRIOR DEED OF SALE OF THE SAME PROPERTY EXECUTED BY THE DEPARTMENT OF AGRARIAN
On 7 March 1982, the heirs of the late Ricardo Alvarez filed a case for reconveyance, redemption and damages against Mercedes REFORM IN FAVOR OF RICARDO ALVAREZ AND SECTION 62, ARTICLE II, CHAPTER III OF REPUBLIC
Oliver, Avelino Ramos and Jose Nunez, before the Regional Trial Court (RTC) of Biñan, Laguna.9Respondents filed an Amended ACT NO. 3844
Complaint for Annulment of Title with Reconveyance, dated 4 December 1985, wherein they claim that the sale of the subject II
land was made without their knowledge, and it was only in the 1980’s that they learned of such sale. They alleged that their WHETHER OR NOT THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION AND
mother and father, both illiterate, were deceived by the defendants into executing the Deed of Sale covering the subject land in COMMITTED REVERSIBLE ERROR IN APPLYING SECTION 1 (C), RULE II OF THE NEW RULES OF
favor of Mercedes Oliver. Respondents also argued that such sale was void since the Deed of Sale was executed in violation of the PROCEDURE OF THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD (DARAB),
law which enjoins the sale of the subject land.10 This case was, however, dismissed for failure of the respondents and counsel to CONFERRING JURISDICTION OF THE DARAB OVER THE INSTANT CASE, IN DISREGARD OF THE
appear during the hearing for the reception of their evidence, despite due notice and after eight postponements11. The RTC, in its PROVISIONS OF PRESIDENTIAL DECREE NO. 1474
Order,12 dated 17 February 1989, ruled that: III
Further considering that without the evidence of said witness and the plaintiffs not having presented any evidence on WHETHER OR NOT THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION AND
record, upon motion of counsel for defendants that this case be dismissed and further manifestation by the defendants COMMITTED REVERSIBLE ERROR IN RULING THAT THE DOCTRINE OF RES JUDICATA DOES NOT
that they are waiving their right to a counterclaim, the Court hereby orders the dismissal of this case (both the APPLY TO BAR RESPONDENTS’ COMPLAINT IN DARAB CASE NO. IV-032-L
complaint and counterclaim). IV
Let copy of this Order be furnished party plaintiff. WHETHER OR NOT THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF DISCRETION AND
The order became final and executory when the respondents failed to file a motion for reconsideration of this Order, despite COMMITTED REVERSIBLE ERROR IN NOT RULING THAT PETITIONER IS A BUYER IN GOOD FAITH
receipt thereof.13 WHO SHOULD BE ENTITLED TO PROTECTION AGAINST THE ALLEGED CLAIM OF THE RESPONDENT
HEREIN, PURSUANT TO THIS HONORABLE COURT’S RULING IN AGRICULTURAL AND HOME
 EXTENSION DEVELOPMENT GROUP VS. COURT OF APPEALS, ET AL., G.R. NO. 92319, SEPTEMBER 3, Decree No. 1474 as a special law should govern lands within the Laguna Resettlement Project, while Republic Act No. 3844 is a
199223 law generally applied to agrarian lands.
This petition is meritorious. The second issue Filinvest raised is whether the DARAB had jurisdiction over a case involving the subject land. Rule II, Section 1,
The first issue raised by Filinvest is whether the sale between Ricardo Alvarez and Mercedes Oliver was void because it violated of the DARAB Revised Rules of Procedure provides that the DARAB shall have primary jurisdiction, both original and appellate
the prohibitory condition contained in the Deed of Sale between Ricardo Alvarez and the Government, to wit: over:
2. That from the date of the pertinent Order of Award and within TEN (10) years from the date of issuance by the (c) Cases involving the annulment or cancellation of orders or decisions of DAR officials other than the Secretary,
proper Register of Deeds of the certificate of title, the land subject hereof shall not, except by hereditary succession, lease contracts or deeds of sale or their amendments under the administration and disposition of the DAR and LBP; x
be subdivided, sold or in any manner transferred or encumbered except in favor of any of the VENDEE’S relative x x.
within the third civil degree by consanguinity or affinity who fulfill the four (4) requirements in Section 6 Land However, Filinvest argued that under Section 1 of Presidential Decree No. 1474, the Laguna Resettlement Project was no longer
Authority Administrative Order No. 4, Series of 1967, or in favor of the Government and its financial or banking agricultural land but was effectively converted into a commercial, industrial and residential site, and was therefore outside the
institutions or rural banks, and only upon prior written consent of the Secretary of the Department of Agrarian jurisdiction of the DARAB. Section 1 of Presidential Decree No. 1474 reads:
Reform; and any sale, transfer, encumberance or alienation made in violation hereof shall be null and void: x x x24 Section 1. The Department of Agrarian Reform, as Administrator of the San Pedro Tunasan Estate, is hereby ordered
This condition is in accordance with Section 62 of Republic Act No. 3844, The Agricultural Land Reform Code, which provided to convert such estate into a commercial, industrial and residential site and to transfer the same to the National
that: Housing Authority.
Section 62. Limitation on Land Rights. - Except in case of hereditary succession by one heir, landholdings acquired under this From the aforecited provision, it is clear that the DAR had lost jurisdiction over government lands located in the Laguna
Code may not be resold, mortgaged, encumbered, or transferred until after the lapse of ten years from the date of full payment and Resettlement Project formerly under its administration which it was ordered to transfer to the National Housing Authority (NHA).
acquisition and after such ten-year period, any transfer, sale or disposition may be made only in favor of persons qualified to More importantly, the DARAB can no longer annul the Deed of Sale between the government and Ricardo Alvarez, or the
acquire economic family-size farm units in accordance with the provisions of this Code: Provided, That a purchaser who acquired subsequent transfers, on the ground that Alvarez violated Section 62 of Republic Act No. 3844 and the conditions laid down in the
his landholding under a contract to sell may secure a loan on the same from any private lending institution or individual for an Deed of Sale regarding the ten-year restriction on the transfer of the same land. At that time, the transfer between Alvarez and
amount not exceeding his equity on said landholding upon a guaranty by the Land Bank. Oliver was made, these aforementioned rules were repealed by the provisions of Presidential Decree No. 1474. These rules were
Filinvest, however, contends that these restrictions were already revoked by the issuance of Presidential Decree No. 1474, no longer applicable to the land in question, as it was no longer under the administration of the DAR nor agrarian in character. The
Declaring the San Pedro Tunasan Estate of the Department of Agrarian Reform Suitable for Residential, Commercial or Industrial, validity of the subsequent transfer of the subject land between Ricardo Alvarez and Mercedes Oliver, or even the later transfer
or Other Non-Agricultural Purposes. This law reclassifies the San Pedro Tunasan Estate, known as and hereinafter referred to as between Mercedes Oliver and Filinvest, was no longer subject to agrarian laws, as the land was already commercial, industrial, or
the Laguna Resettlement Project, into a commercial, industrial and residential site as it is no longer conducive to agricultural residential in nature at the time of the transfer. Therefore, any proceeding which attacks the validity of the subsequent transfers are
development. within the jurisdiction of regular courts.
The position taken by Filinvest is justified. Section 2 of Presidential Decree No. 147425 categorically empowers "individuals who Clearly, the respondents filed the case before the PARAD, not because the case involved a dispute that would be properly resolved
have legally acquired lots in the (San Pedro Tunasan) Estate" under Orders of Awards or Deeds of Sale, among others things, to by the PARAD, but because they were already barred from filing the case before the proper forum. The allegations and relief
"sell or transfer their lots covered thereby." Therefore, transfers of land located within the Laguna Resettlement Project, made after found in the Complaint filed by the respondents before the PARAD are conspicuously similar to those in the Amended Complaint
the law took effect, are valid and the restriction on transfer of the land within ten years after its registration is no longer applicable. which they had earlier filed before the trial court of Biñan.29 As earlier discussed, the trial court ordered the dismissal of the case
In the present case, the government, through the DAR had already issued an Order of Award and a Deed of Sale in favor of for failure to prosecute. When the respondents failed to file a motion for reconsideration, despite due notice, such order became
Ricardo Alvarez covering a parcel of land located within the Laguna Resettlement Project, when Presidential Decree No. 1474 final.
was enacted on 11 June 1978. In 1979, Alvarez, with the consent of his spouse, Rosario Param, transferred the same parcel of land This Court cannot countenance the party-litigant’s recourse to such measures. The foundation principle upon which the doctrine
to Mercedes Oliver. Such transfer was clearly sanctioned. As earlier adverted to, Section 2 of Presidential Decree No. 1474 of res judicata rests is that parties should not be permitted to litigate the same issue more than once. When a right or fact has been
revoked the application of Section 62 of Republic Act No. 3844 and the condition prohibiting the transfer of the land contained in judicially tried and determined by a court of competent jurisdiction, or an opportunity for such trial has been given, the judgment
the Deed of Sale executed by the DAR in favor of Alvarez, in so far as land within the Laguna Resettlement Project was of the court, so long as it is not reversed, should be conclusive upon the parties and those in privity with them in law or estate.30
concerned. Since the transfer made by Ricardo Alvarez to Mercedes Oliver was valid, the subsequent transfer made by Mercedes The following requisites must concur in order that a prior judgment may bar a subsequent action: (1) the former judgment or order
Oliver to Filinvest is also valid. 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
DARAB’s reliance on the ruling of the Court in Tipon v. Intermediate Appellate Court,26 upholding the ten-year prohibition on the stipulations submitted by the parties at the trial of the case; (3) it must have been rendered by a court having jurisdiction over the
transfer of land distributed by the government in favor of its beneficiaries, is misplaced. This case is not applicable for it did not subject matter and the parties; and (4) there must be, between the first and second actions, identity of parties, of subject matter and
take into account Presidential Decree No. 1474 because of different factual circumstances. It is true that the Tipon case shares of cause of action. 31
some similarities with the present case - the subject property was part of the Laguna Resettlement Project, and the Deed of Sale A perusal of the records easily shows that the first, third and fourth requirements have been complied with in this case. The Order
between the DAR and the farmer-beneficiary, Renato Tipon, was executed before the enactment of Presidential Decree No. 1474 rendered by Branch XXIV of the RTC of Biñan, dated 17 February 1989, dismissing the case, is clearly final, as it disposed of all
in 1978. However, there is a crucial difference. Unlike the present case where the subsequent transfer by the farmer-beneficiary, the rights and obligations of the parties before it.32 There was never any question raised on the jurisdiction of Branch XXIV of the
Ricardo Alvarez, to Mercedes Oliver was made in 1979 after Presidential Decree No. 1474 took effect, the subsequent transfer by RTC to hear and decide the question of whether the sale executed between Ricardo Alvarez and Mercedes Oliver was valid. It is
farmer-beneficiary Renato Tipon to Atty. Umiral Matic, was made in 1976 before the enactment of Presidential Decree No. 1474. also obvious that the allegations of the respondents in their Amended Complaint filed before the RTC of Biñan are substantially
The factual background of the Tipon case, as recounted by the Court, are thus: identical to the Complaint filed before the PARAD; involved the same subject matter, and raised the same causes of
Petitioner Renato Tipon acquired the lot in question (Lot No. 386 of the Laguna Settlement Project) from the action.33 Filinvest was named as a party only in the complaint before the PARAD, since it acquired the property from Mercedes
government by virtue of a Deed of Sale executed in his favor by the Department of Agrarian Reform on November Oliver only on 22 December 1989,34 after the case before the RTC was dismissed on 17 February 1997. Moreover, the fact that its
23, 1976, for the price of P1,251.20. x x x. predecessor-in interest, Mercedes Oliver, was a party in the case filed before the RTC of Biñan satisfies the requirement on the
xxxx identity of parties. In the case of Camara v. Court of Appeals,35 this Court has ruled that, "[t]here is identity of parties not only
On the day the Deed of Sale was executed in his favor, Tipon filed a request with the Department of Agrarian Reform where the parties are the same, but also those in privity with them, as between their successors-in-interest by title subsequent to the
for permission to transfer his rights and interest over the lot in question in favor of Atty. Umiral P. Matic (respondent commencement of the action, litigating for the same thing and under the same title and in the same capacity."
herein). This request was granted by the Regional Director of Region IV of the Department of Agrarian Reform on The only contention between the parties was whether the second requirement, that the decision or order must have been based on
December 9, 1976 "subject to the condition that the Deed of Transfer is submitted to this department for verification the merits of the case, was met. In situations contemplated in Section 3, Rule 17 of the Rules of Court,36 where a complaint is
and final approval. dismissed for failure of the plaintiff to comply with a lawful order of the court, such dismissal has the effect of an adjudication
On December 10, 1976, Tipon submitted the Deed of Absolute Sale in favor of Matic for approval and, on the same upon the merits.37 A dismissal for failure to prosecute has the effect of an adjudication on the merits, and operates as res judicata,
day, it was approved by the Regional Director of Region IV of the Department of Agrarian Reform. Thereafter, Matic particularly when the court did not direct that the dismissal was without prejudice.38
caused the titling of the property in the name of Tipon to whom was issued Transfer Certificate of Title No. 50617 Having complied with the four requisites needed for the doctrine of res judicata to operate, the Order rendered by the RTC of
and later, had the same transferred to his name under Transfer Certificate of Title No. 53850 dated July 12, 1977, of Biñan dismissing Civil Case No. B-1941 finally determined the ownership of the subject land, the heirs of the late Ricardo
the Registry of Deeds for the Province of Laguna.27 Alvarez, Mercedes Oliver, and her successor-in-interest, Filinvest, as no motion for reconsideration on this Order was filed.
A basic principle of statutory construction mandates that general legislation must give way to special legislation on the same Moreover, this would bar any dispute over the subject land from being brought before any judicial forum. Rule 39, Section 47 of
subject, and generally be so interpreted as to embrace only cases in which the special provisions are not applicable.28 There is no the Rules of Court39 provides that in case of a judgment or final order over a specific thing, rendered by a court having jurisdiction,
question that Section 2 of Presidential Decree No. 1474 is inconsistent with Section 62 of Republic Act No. 3844. The former the judgment or final order is conclusive upon the title to the thing and binding upon the parties and their successors-in-interest.
authorizes the sale or transfer of agricultural lands within the Laguna Resettlement Project, while the latter law prohibits the Furthermore, the allegations of the private respondents of their counsel’s negligence cannot be given any credence. In the
transfer of agricultural lands distributed by the government to farmer-beneficiaries, at least for a limited period. Presidential Affidavit of private respondent Romeo Alvarez, and reiterated in the Comment filed by the private respondents before the Court of
Appeals, it was alleged that on 12 December 1986, their counsel, Atty. Rosendo O. Chavez, executed a Notice of Withdrawal,
which was not filed before the trial court and did not bear the conformity of the private respondents.40 Thereafter, Atty. Chavez
allegedly stopped attending the hearings before the trial court. As a result thereof, the private respondents were not notified of the
17 February 1989 hearing, when the Order dismissing the case was issued.
Records clearly show that Atty. Chavez could not have withdrawn from the case on 12 December 1986. As of 14 December 1987,
Atty. Chavez presented as his witness, Rosario Param, one of the private respondents.41 Since he requested for continuance, he was
required to bring the witness on the next hearing date. However, seven postponements later, he was unable to bring the witness he
presented.42 On 17 October 1988, Atty. Chavez attended the hearing. He failed to attend the next hearing on 20 January 1989.
Nevertheless, he was still at that time the counsel of the private respondents and therefore the notice to him was binding upon the
parties. Moreover, the private respondent Rosario Param was perfectly aware that her testimony was far from finished, and that
she still needed to appear before the Court. Given the foregoing facts, private respondent’s allegations that their counsel was
grossly negligent and that he had deceived them is not credible.
Even if the allegations of the private respondents are to be believed, they should have raised them in a Motion for Reconsideration,
or a petition to annul the Order of the trial court dismissing the case. While they alleged that they did not receive the Order
requiring them to appear on the 17 February 1989 hearing, they never denied receiving the Order of dismissal. As the records
stand, the counsel for the respondents received the Order dismissing the case on 28 February 1989,43 and the respondents never
filed a Motion for Reconsideration or even a belated appeal to question the Order dismissing case. Instead, they waited for a full
year and filed with the DARAB a case which was under the jurisdiction of the regular courts.
WHEREFORE, premises considered, this Court GRANTS this petition and REVERSES the Decision of the Court of Appeals in
CA-G.R. SP No. 48396, dated 11 November 1998, affirming the Order of the DARAB nullifying the transfer certificate titles
issued in the names of Ricardo Alvarez, Mercedes Oliver and Filinvest Land Inc. since the DARAB was without jurisdiction to
issue the said Order. No costs.
SO ORDERED.
 THIRD DIVISION On appeal, the Court of Appeals affirmed the decision of the trial court.[6]
[G.R. No. 119879. March 11, 2004] The appellate court reiterated the reasons of the trial court in holding that Felix never sold his share in Lot 4389 to
HEIRS OF JUANA GAUDIANE, namely: DATIVA M. PASTOR, MARIA M. ALCORIZA, BEATRIZ M. PATROCIO, Juana. The order of dismissal of the action for quieting of title was not appealed and therefore the issues raised therein involving
SOLOMON I. MARIO, BENJAMIN I. MARIO, LILI MARIO, VERONICA I. MARIO, SEVERINA MARIO the same lot could not be raised in the subject action anymore. Lastly, according to the Court of Appeals, the doctrine that a titled
VDA. DE ISO, ROSITA ISO, AGRIPINO ISO, ELIZABETH ISO, VIRGINIA ISO, LEOPOLDO ISO, lot may be acquired by prescription in certain exceptional circumstances could not apply in the case at bar for the reason that
NAPOLEON ISO, petitioners, vs. COURT OF APPEALS and THE HEIRS OF FELIX GAUDIANE, namely: herein petitioners employed fraud in claiming exclusive ownership over Lot 4389.
ARNULFO GAUDIANE, GEORGE GAUDIANE, RODOLFO GAUDIANE, RAYMUNDO GAUDIANE, Hence, this petition for review based on the following assignment of errors:
SANDRA GAUDIANE, CEFERINA GAUDIANE, JONNA GAUDIANE, MILLARD GAUDIANE, GLORIA I
TORRES-GAUDIANE, WILFREDO GAUDIANE, ROLANDO GAUDIANE, ANTONIO GAUDIANE, THE RESPONDENT HONORABLE COURT GRAVELY ERRED IN AFFIRMING THAT WHAT WAS
KATHRYN GAUDIANE, PRISCILLA GAUDIANE, CATALINA PACIOS, DONATELLA PACIOS, SOLD BY THE LATE FELIX GAUDIANE TO HIS SISTER JUANA GAUDIANE WAS HIS ONE-HALF
REMEDIOS PACIOS, GUALBERTO GAUDIANE, VICTOR GAUDIANE, LORNA GAUDIANE, (1/2) SHARE OF ANOTHER LAND, LOT NO. 4156, COVERED BY ORIGINAL CERTIFICATE OF
DOLORES GAUDIANE, respondents. TITLE NO. 2986-A, PURSUANT TO THE ESCRITURA DE COMPRA VENTA, EXHIBIT A DATED
DECISION NOVEMBER 4, 1927, DISREGARDING THE DOCUMENTARY EVIDENCE OF THE PETITIONERS AS
CORONA, J.: WELL AS THE TESTIMONIAL EVIDENCE ADDUCED BY THE PETITIONERS;
Before us is a petition for review of the decision[1] dated February 24, 1995 of the Court of Appeals[2] affirming the II
decision[3] dated March 27, 1991 of the Regional Trial Court of Dumaguete City, Branch 34, ordering the partition of Lot 4389 and THAT THE RESPONDENT HONORABLE COURT GRAVELY ERRED IN FINDING THAT THE
directing the petitioners to make an accounting of the rentals and profits they have obtained from the said lot from the time the ARGUMENT OF THE PETITIONERS WITH REFERENCE TO THE SECOND ASSIGNMENT OF
case was filed and to remit to respondents their one-half share thereof. ERROR TO THE EFFECT THAT THE DISMISSAL OF THE COMPLAINT FOR QUESTING OF TITLE,
The facts, as found by the courts a quo, follow. DOCKETED AS CIVIL CASE NO. 6817 DID NOT BAR THEM FROM INTERPOSING AS A DEFENSE
The lot in controversy is Lot 4389 located at Dumaguete City and covered by Original Certificate of Title No. 2986-A IN THE CASE AT BAR THEIR CAUSE OF ACTION IN CIVIL CASE NO. 6817;
(OCT 2986-A) in the names of co-owners Felix and Juana Gaudiane. Felix died in 1943 while his sister Juana died in 1939. Herein III
respondents are the descendants of Felix while petitioners are the descendants of Juana. THAT RESPONDENT HONORABLE COURT GRAVELY ERRED BY NOT GIVING DUE COURSE TO
On November 4, 1927, Felix executed a document entitled Escritura de Compra-Venta (Escritura, for brevity) whereby he THE CLAIM OF PETITIONERS AND LEGAL EFFECT OF PRESCRIPTION AND LACHES
sold to his sister Juana his one-half share in Lot No. 4156 covered by Transfer Certificate of Title No. 3317- ADVERTED BY DEFENDANTS-APPELLANTS IN THEIR ANSWER AND AFFIRMATIVE DEFENSES
A. The Escritura described the lot sold as follows: PROVEN DURING THE HEARING BY DOCUMENTARY AND TESTIMONIAL EVIDENCE.[7]
A parcel of land (Lot No. 4156 of the Cadastral Survey of Dumaguete), with the improvements thereon, situated in Unconvinced by the rulings of the courts a quo, petitioners reiterate their arguments to support their claim of exclusive
the Municipality of Dumaguete. Bounded on the NE. and E. by Lot No. 4155; on the SW. by Lots Nos. 4157 and 4158; and on the ownership of Lot 4389.
NW. by Lot No. 4154. Containing an area of FIVE HUNDREDAND FIFTY-TWO (552) SQUARE METERS, more or less. Petitioners insist on their ownership over Felix share in said lot on the ground that the Escritura expressly mentioned Tax
What muddled the otherwise clear contract of sale was a statement in the Escritura that Lot No. 4156 was declared under Tax Declaration No. 18321 representing payment of taxes for Lot 4389. We disagree. As found by the courts a quo, a thorough reading
Declaration No. 18321. However, said tax declaration was for another parcel of land, Lot 4389 and not Lot 4156. of the Escritura reveals that Felix intended to sell his share in Lot 4156 only. In fact, only Lot 4156 was described in the Escritura.
Petitioners predecessors-in-interest, Geronimo and Ines Iso (the Isos), believed that the sale by Felix to their mother Juana Consequently, the citation of Tax Declaration No. 18321 vis--vis Lot 4156 was clearly a mistake. Even the petitioners
in 1927 included not only Lot 4156 but also Lot 4389. In 1974, they filed a pleading in the trial court seeking to direct the Register predecessors-in-interest, the Isos, believed that Lot 4389 was not included in the Escritura because they erased Lot 4156 and
of Deeds of Dumaguete City to cancel OCT 2986-A covering Lot 4389 and to issue a new title in favor of the Isos. This was later fraudulently replaced it with Lot 4389 in their prayer to cancel OCT 2986-A. Had they honestly believed that Lot 4389 was
withdrawn after respondents predecessors-in-interest, Procopio Gaudiane and Segundo Gaudiane, opposed it on the ground that included in the sale, there would have been no need for them to resort to falsification.  Moreover, if Felix had really sold his share
the Isos falsified their copy of the Escritura by erasing Lot 4156 and intercalating in its place Lot 4389. in Lot 4389 to Juana, the latter would have had the title to the property transferred to her name alone. But she never did and the
The Isos again tried their luck to acquire title in their name by filing in 1975 a case for quieting of title of Lot 4389 but the title to Lot 4389 continued to be in the names of both Felix and Juana.
same was dismissed without prejudice. According to the petitioners, the order dated January 10, 1985 in Civil Case No. 6817 of the RTC of Negros Oreintal,
The Isos later filed another action for quieting of title, docketed as Civil Case No. 6817, but it was again Branch 35, dismissing their case for quieting of title on the ground of failure to prosecute and to comply with the lawful orders of
dismissed[4] on January 10, 1985 by the RTC of Negros Oriental, Branch 35, due to the failure of the plaintiffs (the Isos) to the court was erroneously issued, considering that all the plaintiffs therein (petitioners), except their counsel, failed to attend the
prosecute and to comply with the orders of the court. When the judgment became final, respondents sent a letter to Ines Iso asking supposed hearing. And assuming arguendo that the order was dismissal with prejudice, petitioners contend that they are not barred
her to surrender the possession of the one-half portion of Lot No. 4389 comprising Felix share. The Isos refused. from raising the defense of exclusive ownership in the instant case for partition because their present defense was not the issue in
On August 20, 1986, the respondents filed the present case for partition of Lot 4389, accounting of proceeds and damages the case for quieting of title. Also, the effect of said order was effectively waived when the petitioners were allowed during the
against herein petitioners. trial to present evidence of their exclusive ownership of Lot 4389 without any objection from the respondents.
On March 27, 1991, the trial court rendered a decision in favor of the respondents, the dispositive portion of which read: Petitioners arguments are misplaced.
WHEREFORE, judgment is hereby rendered ordering the partition of the land in question, i.e., Lot No. 4389 of the Dumaguete We cannot delve anymore into the legality and validity of the order of dismissal dated January 10, 1985 in Civil Case No.
Cadastre, covered by Original Certificate of Title No. 2986-A, in the names of Felix Gaudiane and his sister Juana Gaudiane, 6817 because it has long become final and executory for failure of the petitioners to file an appeal. In accordance with Section 3,
consisting of 36,988 square meters, between the plaintiffs and the defendants in the following proportion: one-half (1/2) share will Rule 17 of the 1997 Rules of Civil Procedure, [8] said order had the effect of judgment on the merits although no trial was
go to the heirs of the late Felix Gaudiane, (1/2) share will go to the heirs of the late Juana Gaudiane, defendants herein. conducted because it did not contain any statement that the case was dismissed without prejudice to the filing of a similar future
The defendants who are in possession of the subject property are likewise directed within thirty (30) days from receipt of this action. As such, based on the principle of res judicata,[9] the petitioners are barred in another action (involving the same subject
decision to make an accounting of the rents and profits they may have obtained from the real estate in question, from the time this matter, parties and issues) from raising a defense and from asking for a relief inconsistent with an order dismissing an earlier case
action was instituted, and to remit to plaintiffs their proportionate one-half (1/2) share thereof.[5] with prejudice.
According to the trial court, Felix did not sell to Juana his one-half share in Lot 4389. The Escritura clearly stated and Petitioners argue that res judicata does not apply in the case at bar for the reason that a petition to quiet title has a cause of
described that what was sold was Lot 4156, not Lot 4389. Had it been his intention to include Lot 4389, he would have so action different from a petition for partition.
identified and described it in the deed of sale. The fact that the title to Lot 4389 was still in the names of siblings Felix and Juana We do not think so.
was proof that the subject lot continued to be under their co-ownership. The trial court refused to give weight to the tax In Medija vs. Patcho, et al.,[10] we ruled that a case for partition and an action for quieting of title have identical causes of
declarations supposedly evidencing petitioners exercise of ownership over said lot after discovering that said declarations did not action and can therefore be the subject of res judicata:
state the lot number or the certificate of title number. Is there identity of cause of action between the first and second actions? The answer is yes. The fact that Civil Case No. 1884, filed
The trial court also ruled that the dismissal of petitioners second case for quieting of title due to failure to prosecute and for by the appellees against the appellant was for partition of the hereditary estate with accounting of fruits of several parcels of land,
failure to comply with court orders had the effect of adjudication on the merits, pursuant to the Rules of Court. Consequently, while Civil Case No. 2665, brought by appellant against the appellees, was for quieting of title over two parcels which are parts of
petitioners claim of exclusive ownership over Lot 4389 was without merit because it was barred by the order of dismissal the same properties subject of the previous case, does not remove the present proceeding from the operation of the principle of bar
dated January 10, 1985 in Civil Case No. 6817. by former judgment. As specifically stated in the decision of the Court of Appeals in Civil Case No. 1884, now final and
As to whether the respondents lost by prescription their right to their share in the lot, the trial court held that a title, once executory, the right of therein plaintiffs (appellees herein) to partition the several parcels of land was based on Article 1103 of the
registered, could not be defeated even by adverse, open and notorious possession. Laches did not also set in because, when Civil Code. The appellees' right to ownership is based on succession they being heirs of the deceased Lorenzo Morante. What the
petitioners repudiated the respondents share in the second case for quieting of title, the latter immediately opposed the move.  They appellant did is to institute another action which would preclude the execution of the judgment of the lower court in Civil Case No.
were therefore never negligent in pursuing their rights. 1884. It must be remembered that a change in the form of action or in the relief sought does not remove a proper case from the
application of res judicata. In other words, a party cannot, by varying the form of action, or adopting a different method of
presenting his case, escape the operation of the principle that one and the same cause of action shall not be twice litigated between
the same parties (Ramos vs. Pangasinan Transportation Company, Inc., 79 SCRA 171; Aguila vs. J.M. Tuason & Co., Inc., 22
SCRA 690, citing Clemente vs. H.E. Heacock Co., G.R. No. L-23212, May 18, 1967; Francisco vs. Blas, 93 Phil. 43).[11]
Petitioners filed an action to quiet title for the sole purpose of claiming for themselves exclusive ownership
of Lot 4389. On the other hand, in the case for partition filed by respondents, petitioners set up the defense of sole dominion in
order to frustrate the equal division of the property between the heirs of Felix and Juana. Considering the similarity of petitioners
defense in this case with their main averment in the case for quieting of title, petitioners are barred by res judicata from claiming
sole ownership of Lot 4389.
We also find that respondents never waived their right to object to petitioners barred defense of exclusive ownership.
While the petitioners were allowed in the subject case for partition, accounting and damages to present their evidence of exclusive
ownership, the respondents failure to oppose did not mean that the latter waived their right to object to the petitioners
evidence. For reasons of public policy, res judicata cannot be waived by a party because the time and energy of the State and the
taxpayers are wasted by the re-litigation of settled issues. That is the reason why, under Rule 9 of the 1997 Rules of Civil
Procedure, a trial court may dismiss a case motu proprio on grounds of res judicata although it is not raised, and apparently
waived, in a motion to dismiss or answer. Conversely, a plaintiff, or the trial court itself, may invoke res judicata to resist a
defense barred by prior judgment even after trial on the merits.
Lastly, petitioners argue that they acquired Felix share in the lot in question through prescription and laches. As a general
rule, ownership over titled property cannot be lost through prescription.[12] Petitioners, however, invoke our ruling in Tambot vs.
Court of Appeals[13] which held that titled property may be acquired through prescription by a person who possessed the same for
36 years without any objection from the registered owner who was obviously guilty of laches.
Petitioners claim is already rendered moot by our ruling barring petitioners from raising the defense of exclusive
ownership due to res judicata. Even assuming arguendo that petitioners are not so barred, their contention is erroneous. As
correctly observed by the appellate court:
The TAMBOT case is inapplicable. The case of Bicarme vs. Court of Appeals would be more in point. In the case at bar, appellees
predecessor-in-interest fraudulently denied possession of one-half of Lot No. 4389 to appellants by misrepresenting
the Escritura executed by Felix Gaudiane included not only Lot No. 4156 but also Lot No. 4389. That of course is not true. As
explained earlier, only Lot No. 4156 was sold. It was through this misrepresentation that appellees predecessor-in-interest
succeeded in withholding possession of appellees share in Lot No. 4389. Appellees cannot, by their own fraudulent act, benefit
therefrom by alleging prescription and laches.[14]
WHEREFORE, the petition is DENIED. Costs against the petitioners.
SO ORDERED.
Vitug, (Chairman), Sandoval-Gutierrez, and Carpio-Morales, JJ., concur.
G.R. No. 164797                   February 13, 2006 Second. Private respondent Mariano Bunag denied that he authorized Carlos Bunag to sign the Verified Complaint in his behalf.
JOSEFINA M. CRUZ and ERNESTINA M. CONCEPCION, Petitioners,  Because of this, Mariano Bunag cannot be considered as a party litigant in the Injunction case. Concomitantly, there is no identity
vs. of parties between the present case and in Civil Case No. 2573-02 (Injunction). As correctly ruled by the trial court, thus:
THE HON. COURT OF APPEALS, SECOND DIVISION, MARIANO "BOY" BUNAG and ROLANDO x x x           x x x          x x x
BUNAG,Respondents. While it is true that this Court has earlier made a declaration in Civil Case No. 2573 that Carlos Bunag was authorized by his co-
DECISION plaintiffs to file Civil Case No. 1600 including herein plaintiff Mariano Bunag, against herein defendants, such declaration was
CHICO-NAZARIO, J.: based on the verified complain[t] signed by Carlos Bunag. In the absence of any evidence to the contrary, the Court has to assume
Before Us is a Petition for Certiorari under Rule 65 of the Rules of Court which seeks to reverse and set aside the decision1 of that indeed Carlos Bunag was authorized by his co-plaintiff Mariano Bunag to file Civil Case No. 1600. However, with the
public respondent Court of Appeals dated 19 March 2004 which dismissed the petition for certiorari asking for the nullity of the 13 submission of the affidavit of Mariano Bunag on April 14, 2003, wherein he claimed that Civil Case No. 1600 for quieting of title
May 2003 Order of the Regional Trial Court of Gapan, Nueva Ecija, Branch 35, in Civil Case No. 2583-02, and its was filed without his knowledge by Carlos Bunag for and in behalf of the other plaintiffs including himself, the verified complaint
Resolution 2 dated 29 June 2004 denying petitioners' motion for reconsideration. of Carlos Bunag is now disputed.
The antecedents are substantially stated by the Court of Appeals as follows: The categorical denial of Mariano Bunag that he was not aware that Carlos included him as one of the plaintiffs in Civil Case No.
There are four (4) cases involved in this controversy. The first case that was filed between the parties is Civil Case No. 4365 for 1600 for quieting of title has disputed the verified complaint of Carlos Bunag. What is more, Rolando Bunag, one of the herein
Unlawful Detainer litigated before the Municipal Trial Court of Gapan, Nueva Ecija entitled "Josefina M. Cruz and Ernestina M. plaintiffs was never made a party in the said Civil Case No. 1600 for quieting of title. Since Mariano Bunag did not authorize nor
Concepcion, plaintiffs, vs. Mariano `Boy' Bunag, Rolando Bunag, Remedios Bunag, et al., Defendants." This case was decided on give his consent to Carlos Bunag to include him as one of the plaintiffs in Civil Case No. 1600 and that herein plaintiffs Rolando
6 November 1998 by the Municipal Trial Court in favor of herein petitioner Josefina M. Cruz and Ernestina M. Concepcion. Bunag is not a party to the said case, the dismissal of Civil Case No. 1600 will not bind them. Hence, the dismissal of Civil Case
The second case is Civil Case No. 1600 for Quieting of Title, filed before the Regional Trial Court of Gapan, Nueva Ecija, Branch No. 1600 will not bar the filing of the instant complaint as one of the requisites of res judicata is absent. There is no identity of
36 with "Carlos L. Bunag, Elias Bunag Natividad, Mariano Bunag, Salud Bunag Clanaoc and Juliana Bunag Arevalo, as Plaintiffs parties between Civil Case No. 1600 and the instant case for the simple reason that herein plaintiffs were not parties in Civil Case
and Josefina M. Cruz and Ernestina M. Concepcion as Heirs of Sps. Carlos Maniquis and Marina Bunag, as Defendants." This No. 1600 as discussed above. Consequently, plaintiffs and their counsel can not be said to have violated the rule against forum
case was dismissed for failure to prosecute as evidenced by the Regional Trial Court Order dated 10 March 2000. shopping. Plaintiffs and their counsel did not file Civil Case No. 1600 and therefore they are not obligated to inform this Court that
The third case is Civil Case No. 2573-02 for Injunction, with "Mariano `Boy' Bunag and Rolando Bunag as Petitioners against they have filed a similar action involving the same issue with other court.
Carlos Bunag, Elias Bunag Natividad, Mariano Bunag, Salud Bunag Clanaoc and Juliana Bunag Arevalo as Defendants." This x x x"
case, which was filed before the Regional Trial Court of Gapan City, Branch 35, was dismissed on ground of res judicata. The 6 Third. As the court of justice abhors the disposition of the case based on technicalities, this Court further concurs with the trial
November 2002 Order, in effect, ruled that there is a substantial identity of parties in this case and in Civil Case No. 1600, a court's disquisition, to quote:
Petition for Quieting of Title. x x x           x x x          x x x
The fourth case is the instant controversy for Annulment of Title With Damages. Docketed as Civil Case No. 2583-02, it was Moreover, substantial justice demands that technicalities should not be allowed to prevail over the substantive rights of a party-
lodged by herein private respondents Mariano "Bo[y]" Bunag and Rolando Bunag against herein petitioners Josefina M. Cruz and litigant. If the subject property is really owned by the plaintiffs, then it would be the height of injustice if they are not allowed to
Ernestina M. Concepcion before the sala of Branch 35, Regional Trial Court of Gapan City. prove their cause of action because of mere technicality. It would amount to deprivation of their property without due process.4
It appears that herein petitioners interposed a Motion for Outright Dismissal of Civil Case No. 2583 which was granted by the Petitioners filed a motion for reconsideration5 which was denied in a resolution dated 29 June 2004.6
Court a quo as evidenced by an Order dated 18 February 2003, ratiocinating: Dissatisfied, petitioners are now before us charging that the Court of Appeals committed grave abuse of discretion amounting to
x x x           x x x          x x x lack or excess of jurisdiction in rendering the assailed decision and resolution.7
After a careful study of the arguments of both parties, the Court has found that herein case (2583) involve the same parties, subject Petitioners contend that all the elements of res judicata are present in the instant case. They argue that the shuffling of parties
matter and issue as that in Civil Case No. 1600 which has become final and executory and Civil Case No. 2573-02 which was should not prevent the application of res judicata considering that three prior cases (Civil Case No. 4365 for Unlawful Detainer,
already dismissed by this Court on the ground of res judicata. In all three cases, Mariano Bunag was included as party-plaintiff and Civil Case No. 1600 for Quieting of Title and Civil Case No. 2573 for Injunction) against substantially the same parties over the
Ernestina Concepcion as party-defendant. The subject matter involves a parcel of land located in San Nicolas, Gapan City with an same subject matter and cause of action have all been decided in their favor. They point out that private respondent Mariano "Boy"
area of 1,160 square meters, more or less, and the issue is who between the two parties has the lawful title over the same. Clearly, Bunag was one of the parties in the Ejectment and Quieting of Title cases (and Injunction), and that his allegation in his affidavit
not only res judicata but also accion pendente lite is present in herein case which the plaintiffs and their counsel should have that he neither authorized Carlos Bunag to include him in the Quieting of Title case nor was he (Mariano) informed thereof, leaves
revealed in the Certificate/Verification of their complaint. The allegation that it is only now that they have learned of the existence too much to be desired and that same was merely intended for delay. As regards the non-inclusion of private respondent Rolando
of Civil Case No. 1600 is without merit considering that in the Motion for the Outright Dismissal of Civil Case No. 2573, dated Bunag in the case for Quieting of Title but who was a party in the Ejectment case (as well as in the Injunction case), they claim
September 19, 2002, its existence was already disclosed and even became the ground for the dismissal of Civil Case No. 2573 on that same was in preparation for this stage of the proceedings. They added that insofar as identity of causes of action is concerned,
the ground of res judicata. it cannot be denied that the ownership and its concomitant right of possession are the issues in the cases for Quieting of Title,
Moreover, the Certification against forum shopping does not only refer to final and executory actions but also to pending Injunction and Annulment of Title.
controversies. Considering that plaintiffs have been represented by the same counsel in Civil Case No. 2573 and herein case (Civil In their comment,8 private respondents Rolando Bunag and Monina Luzong Vda. de Bunag9 maintain that the public respondent
Case No. 2583-02), it is very clear that plaintiffs counsel is appraised (sic) of the existence of Civil Case No. 1600 and Civil Case did not err when it held that there was no res judicata in the instant case and that the disposition of the case should not be based on
No. 2573. technicalities.
WHEREFORE, premises considered, the Motion for Outright Dismissal is granted by reason of res judicata and accion pendente The question to be resolved is: Does res judicata apply in the case at bar?
lite and the plaintiffs and their counsel are declared guilty of indirect Contempt of Court by reason of non-disclosure of Civil Case Under the rule of res judicata, also known as "bar by prior judgment," a final judgment or order on the merits, rendered by a Court
No. 1600 and Civil Case No. 2573 as required by Section 5, Rule 7 of the Revised Rules of Court and ordered them to pay a fine having jurisdiction of the subject matter and of the parties, is conclusive in a subsequent case between the same parties and their
of P1,000.00 each. successor-in-interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing and
SO ORDERED. (Rollo, p. 36) under the same title and in the same capacity. The requisites essential for the application of the principle are: (1) there must be a
x x x           x x x          x x x final judgment or order; (2) said judgment or order must be on the merits; (3) the Court rendering the same must have jurisdiction
However, when herein private respondents interposed their Motion for Reconsideration, the court a quo reversed itself and on the subject matter and the parties; and (4) there must be between the two cases identity of parties, identity of subject matter, and
reinstated the present case, the fallo of the herein assailed Order reads: identity of causes of action.10
x x x           x x x          x x x Petitioners claim res judicata applies in this case because all the elements thereof are present. On the other hand, private
In the light of the foregoing, the Order dated February 18, 2003 of this Court, granting defendants' Motion for the Outright respondents argue the contrary alleging that the second and fourth elements are lacking.
Dismissal of this case and citing plaintiffs and counsel for contempt of court is hereby reconsidered and set aside. Accordingly, the There being no dispute as to the presence of the first and third elements, we now determine if the second and fourth elements are
instant case is reinstated and the defendants are directed to file their answer/responsive pleading within fifteen (15) days from attendant in the case.
receipt of this order. On the second element, private respondents argue that the dismissal of Civil Case No. 1600 (for Quieting of Title) was not a
SO ORDERED. (Rollo, pp. 11-13)3 dismissal on the merits. The dismissal of this case, they claim, will not bar the filing of the instant case (Civil Case No. 2583-02
Via petition for review, petitioners went to the Court of Appeals. The latter dismissed the petition for lack of merit. It ruled that for Annulment of Title) because there was neither litigious consideration of the evidence nor any stipulations submitted by the
one of the elements of res judicata, i.e., that there must be, between the first and the second actions, identity of parties, of subject parties at the trial. In fact, there was no pre-trial conference and that after four years of court inactivity, the case was dismissed for
matter and of cause of action, is lacking. It explained: failure to prosecute.11
First. The issue in the Injunction case is the propriety of the demolition order; while in the present action (Petition for Annulment Their argument does not hold water. Section 3 of Rule 17 of the 1997 Rules of Civil Procedure provides:
of Title With Damages), the pivot of inquiry is the ownership of the controversial estate. Section 3. Dismissal due to fault of plaintiff. - If, for no justifiable cause, the plaintiff fails to appear on the date of the presentation
of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of time, or to comply with these
Rules or any order of the court, the complaint may be dismissed upon motion of the defendant or upon the court's own motion, The underlying objectives or reliefs sought in both the quieting-of-title and the annulment-of-title cases are essentially the same --
without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action. This dismissal adjudication of the ownership of the disputed lot and nullification of one of the two certificates of title. Thus, it becomes readily
shall have the effect of an adjudication upon the merits, unless otherwise declared by the court.12 apparent that the same evidence or set of facts as those considered in the quieting-of-title case would also be used in this Petition.
The rule enumerates the instances where the complaint may be dismissed due to plaintiff's fault: (1) if he fails to appear on the The difference in form and nature of the two actions is immaterial and is not a reason to exempt petitioner from the effects of res
date for the presentation of his evidence in chief; (2) if he fails to prosecute his action for an unreasonable length of time; or (3) if judicata. The philosophy behind this rule prohibits the parties from litigating the same issue more than once. When a right or fact
he fails to comply with the rules or any order of the court. Once a case is dismissed for failure to prosecute, this has the effect of an has been judicially tried and determined by a court of competent jurisdiction or an opportunity for such trial has been given, the
adjudication on the merits and is understood to be with prejudice to the filing of another action unless otherwise provided in the judgment of the court, as long as it remains unreversed, should be conclusive upon the parties and those in privity with them.
order of dismissal. In other words, unless there be a qualification in the order of dismissal that it is without prejudice, the dismissal Verily, there should be an end to litigation by the same parties and their privies over a subject, once it is fully and fairly
should be regarded as an adjudication on the merits and is with prejudice.13 The order dismissing Civil Case No. 1600 reads: adjudicated.
For failure of the plaintiffs as well as counsel to appear on several settings despite due notices, precisely for the reception of Civil Case No. 1600 was for Quieting of Title, while Civil Case No. 2583 is for Annulment of Title with Damages. The two cases
plaintiffs' evidence, upon motion of the defendant through Atty. Mark Arcilla, this case is dismissed for failure to prosecute.14 are different only in the form of action but an examination of the allegations in the second case would reveal that the issue raised -
It is clear from the afore-mentioned order that said case was dismissed, upon petitioners' motion, for failure of private respondents ownership of the land -- and the relief sought - be declared as owner and TCTs be issued in their names -- are substantially the
and their counsel to attend several scheduled hearings for the presentation of their evidence. Since the order did not contain a same. The evidence required to substantiate their claims are likewise the same. The proceedings in the instant case, if permitted to
qualification whether same is with or without prejudice, following Section 3, it is deemed to be with prejudice and shall have the continue, would entail the presentation of evidence which should have been adduced in the case for Quieting of Title. The case for
effect of an adjudication on the merits. A ruling based on a motion to dismiss, without any trial on the merits or formal Annulment of Title is simply a second cycle of review involving a subject matter that has already been decided with finality in the
presentation of evidence, can still be a judgment on the merits.15 Quieting of Title case.
We now go to the fourth element - identity of parties, subject matter and cause of action. Finally, private respondents ask that the instant case be not decided based on technicalities, for substantial justice demands that
Petitioners, citing jurisprudence, argue that res judicata is not defeated by a minor difference of parties, as it does not require technicalities should not be allowed to prevail over the substantive right of a party litigant.lavvphil.ñe+
absolute but only substantial identity of parties16 in light of the fact that three prior cases before the instant case have been decided We find no reason not to adhere to the doctrine of res judicata. A case for Quieting of Title had been filed for the purpose of
in their favor against substantially the same parties over the same subject matter and cause of action.lavvphil.ñe+ determining the ownership of the subject land, but same was dismissed because the plaintiffs therein failed to attend the scheduled
Public respondent ruled there was no identity of parties for two reasons: (1) Private respondent Mariano Bunag was not a party hearings for the presentation of their evidence. As above discussed, the dismissal was an adjudication on the merits. They had all
litigant in the Quieting of Title17 case because he denied in an affidavit that he authorized Carlos Bunag to sign the Verified the opportunity to present all the evidence for their cause but they failed to do so. It is undeniable that there was no denial of due
Complaint and to make him a party thereof; (2) Private respondent Rolando Bunag was not made a party in the Quieting of Title process in this case.lavvphil.ñe+
case. The doctrine of res judicata is a rule which pervades every well-regulated system of jurisprudence and is founded upon two
Private respondent Mariano "Boy" Bunag's claim that the Quieting of Title case was filed without his knowledge does not inspire grounds embodied in various maxims of the common law, namely: (1) public policy and necessity, which makes it to the interest
belief. In the decision of the trial court in Civil Case No. 4365 (for Unlawful Detainer), it is very clear that the defendants in said of the State that there should be an end to litigation - republicae ut sit litium, and (2) the hardship on the individual that he should
case that included both private respondents, have knowledge of the pendency of the Quieting of Title case. A portion of the be vexed twice for the same cause - nemo debet bis vexari et eadem causa. A contrary doctrine would subject the public peace and
decision18 reads: quiet to the will and neglect of individuals and prefer the gratification of the litigious disposition on the part of suitors to the
Defendants claim of ownership of the property involved in this case which is now pending with the Regional Trial Court of preservation of the public tranquility and happiness.22 lavvphil.ñe+
Gapan, Nueva Ecija (paragraph 3, Pre-Trial brief of defendants) where the issue of ownership is the subject of the proceedings x x WHEREFORE, premises considered, the petition is GRANTED. The decision of the Court of Appeals dated 19 March 2004 and
x. its resolution dated 29 June 2004 are REVERSED and SET ASIDE. Civil Case No. 2583-02 for Annulment of Title with
It was the defendants, through their trial brief, that informed the court hearing the ejectment case that a case (Civil Case No. 1600 Damages, pending before Branch 35 of the Regional Trial Court of Gapan City, Nueva Ecija, is herby ordered DISMISSED. With
for Quieting of Title) is pending where the issue of ownership is the subject of the proceedings. Thus, as early as the pendency of costs.
the Ejectment case, private respondents had known of the case for Quieting of Title. If he really did not authorize Carlos Bunag to SO ORDERED.
include him as one of the plaintiffs in the Quieting of Title case, he could have easily questioned his inclusion therein at an earlier
time. This, he did not do. He executed his affidavit only on 14 April 2003 or more that three years after the case for Quieting of
Title has been dismissed, and after the Injunction case which he and private respondent Rolando Bunag filed, was dismissed. It is
evident that his affidavit is a mere afterthought executed after his Motion for Reconsideration in the injunction case was denied
because the court gave no weight on his counsel's allegation that he (Mariano Bunag) was unaware of the complaint signed and
filed by Carlos Bunag. It is too late in the day for him to claim lack of knowledge. It is very clear that the execution of the affidavit
is to make it appear that there is no identity of parties in the instant case and in the case for Quieting of Title.
Private respondents add that since Rolando Bunag was not a party in the Quieting of Title case, the dismissal of said case will not
bind him and thus not bar the filing of the instant case.
We do not agree. The principle of res judicata may not be evaded by the mere expedient of including an additional party to the
first and second action. Only substantial identity is necessary to warrant the application of res judicata. The addition or elimination
of some parties does not alter the situation. There is substantial identity of parties when there is a community of interest between a
party in the first case and a party in the second case albeit the latter was not impleaded in the first case.19
In the case at bar, it is apparent that from the face of the complaint for Quieting of Title, private respondent Rolando Bunag was
not a party therein as his name does not appear in the title. This, notwithstanding, his claim and that of the plaintiffs therein, which
included private respondent Mariano Bunag, are the same - to be declared the true owners of the parcel of land covered by
Original Certificate of Title (OCT) No. 22262 and Transfer Certificate of Title (TCT) No. 67161 of the Registry of Deeds of
Nueva Ecija. Private respondent Rolando Bunag and the plaintiffs are all heirs of the alleged owners of the parcel of land covered
by OCT No. 22262. Private respondent Rolando Bunag, though not a party therein, shared an identity of interest from which
flowed an identity of relief sought, namely, to declare them the true owners of the parcel of land covered by OCT No. 22262 and
TCT No. 67161. Such identity of interest is sufficient to make them privy-in-law, thereby satisfying the requisite of substantial
identity of parties.
As regards the identity of subject matter, we find that there is. In both Civil Case No. 1600 (for Quieting of Title) and Civil Case
No. 2583 (for Annulment of Title), what is involved is one and the same parcel of land covered by TCT No. 67161.
We likewise rule that there is identity of causes of action. Hornbook is the rule that identity of causes of action does not mean
absolute identity. Otherwise, a party could easily escape the operation of res judicata by changing the form of the action or the
relief sought. The test to determine whether the causes of action are identical is to ascertain whether the same evidence will sustain
both actions, or whether there is an identity in the facts essential to the maintenance of the two actions. If the same facts or
evidence would sustain both, the two actions are considered the same, and a judgment in the first case is a bar to the subsequent
action.20 In Stilianopulos v. The City of Legaspi,21 this Court had this to say:
 SECOND DIVISION WHETHER [OR] NOT THE REGIONAL TRIAL COURT ERRED IN DISMISSING THE
  COMPLAINT FOR BREACH OF CONTRACT AND DAMAGES BASED ON THE MOTION TO
  DISMISS FILED BY HEREIN RESPONDENTS AND NOT ON THE NOTICE OF DISMISSAL
FREDERICK DAEL, G.R. No. 156470 PROMPTLY [FILED] BY HEREIN PETITIONER BEFORE RESPONDENTS COULD FILE A
Petitioner,   RESPONSIVE PLEADING, UNDER RULE 17, SECTION 1 OF THE 1997 RULES O[F] CIVIL
  Present: PROCEDURE.
    II.
  QUISUMBING, J., Chairperson, WHETHER OR NOT THE REGIONAL TRIAL COURT ERRED IN DISMISSING THE
- versus - CARPIO MORALES, COMPLAINT FOR BREACH OF CONTRACT AND DAMAGES WITH PREJUDICE.[10]
  TINGA, On the other hand, respondents raise the following issues:
  VELASCO, JR., and I.
  BRION, JJ. WHETHER OR NOT THE REGIONAL TRIAL COURT ERRED IN DISMISSING THE ACTION
SPOUSES BENEDICTO and   FOR BREACH OF CONTRACT AND DAMAGES ON THE BASIS OF THE MOTION TO DISMISS
VILMA BELTRAN, Promulgated: FILED BY THE DEFENDANT AND NOT ON THE BASIS OF THE NOTICE OF DISMISSAL
Respondents.   FILED BY THE PLAINTIFF.
April 30, 2008 II.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x WHETHER OR NOT THE REGIONAL TRIAL COURT IS CORRECT IN DISMISSING THE CASE
DECISION WITH PREJUDICE.
QUISUMBING, J.: III.
Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure raising pure WHETHER OR NOT PETITIONERS RECOURSE UNTO THIS HONORABLE COURT BY WAY
questions of law, and seeking a reversal of the Resolution [1] dated May 28, 2002 of the Regional Trial Court (RTC), Branch 34, OF PETITION FOR REVIEW ON CERTIORARI IS PROPER.[11]
Negros Oriental, Dumaguete City, in Civil Case No. 13072, which dismissed with prejudice, petitioners complaint for breach of Essentially, the issues are (1) Did the RTC err in dismissing the complaint with prejudice? and (2) Was petitioners
contract and damages against the respondents. Also assailed is the trial courts Resolution [2] dated December 5, 2002, denying recourse to this Court by way of a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure proper?
petitioners motion for reconsideration. Petitioner, citing Serrano v. Cabrera and Makabulo [12] in his Memorandum,[13] argues that the 1997 Rules of Civil
The facts are as follows: Procedure expressly states that before the defendant has served his answer or moved for a summary judgment, he has, as a matter
On November 23, 2001, petitioner Frederick Dael filed before the RTC, Branch 34, Negros Oriental, a of right, the prerogative to cause the dismissal of a civil action filed, and such dismissal may be effected by a mere notice of
Complaint[3] for breach of contract and damages against respondent-spouses Benedicto and Vilma Beltran. In his complaint, dismissal. He further argues that such dismissal is without prejudice, except (a) where the notice of dismissal so provides; (b)
petitioner alleged that respondents sold him a parcel of land covering three hectares located at Palayuhan, Siaton, Negros where the plaintiff has previously dismissed the same case in a court of competent jurisdiction; or (c) where the dismissal is
Oriental. Petitioner alleged that respondents did not disclose that the land was previously mortgaged. Petitioner further alleged that premised on payment by the defendant of the claim involved. He asserts it is the prerogative of the plaintiff to indicate if the
it was only on August 6, 2001 when he discovered that an extrajudicial foreclosure over the property had already been instituted, Notice of Dismissal filed is with or without prejudice and the RTC cannot exercise its own discretion and dismiss the case with
and that he was constrained to bid in the extrajudicial sale of the land conducted on August 29, 2001. Possession and ownership of prejudice.
the property was delivered to him when he paid the bid price of P775,100. Petitioner argued that respondents non-disclosure of the On the other hand, respondents in their Memorandum,[14] counter that the RTC is correct in dismissing the case with
extrajudicial foreclosure constituted breach of contract on the implied warranties in a sale of property as provided under Article prejudice based on their Motion to Dismiss because they filed their motion on January 10, 2002, ahead of petitioner who filed his
1547[4] of the New Civil Code. He likewise claimed that he was entitled to damages because he had to pay for the property twice. Notice of Dismissal only on February 20, 2002. They further argue that although it is correct that under the 1997 Rules of Civil
On January 10, 2002, respondents filed a Motion to Dismiss [5] on the ground that petitioner had no cause of action Procedure a complaint may be dismissed by the plaintiff by filing a notice of dismissal before service of the answer or of a motion
since the contract to sell stated that the vendor was Benedicto Beltran and the vendee was Frederick George Ghent Dael, not the for summary judgment, the petitioner filed the Notice of Dismissal only as an afterthought after he realized that the Motion to
petitioner. Dismiss was meritorious.
On February 12, 2002, in a hearing on the motion, Atty. Dirkie Y. Palma, petitioners counsel, disclosed that petitioner Further, they point out that petitioner deceived the court when he filed the action knowing fully well that he was not
is the father of Frederick George Ghent Dael whose name appears as the contracting party in the Contract to Sell dated July 28, the real party-in-interest representing himself as Frederick George Ghent Dael.
2000. Atty. Palma moved to reset the hearing to enable the petitioner to withdraw and have the complaint dismissed, amended, or Respondents also argue that petitioners recourse to this Court by way of a petition for review on certiorari was not
to enter into a compromise agreement with respondents. proper since the proper remedy should have been to file an appeal of the order granting the Motion to Dismiss. He contends that
The RTC on the same day ordered petitioner to clarify whether or not he and Frederick George Ghent Dael were one the petitioner should have appealed to the Court of Appeals under Rule 41[15] instead of assailing the ruling of the RTC by way of a
and the same person; whether or not they were Filipinos and residents of Dumaguete City; and whether or not Frederick George petition for review on certiorari before the Supreme Court.
Ghent Dael was of legal age, and married, as stated in the Contract to Sell.[6] Petitioner did not comply. Instead, he filed a Notice As to the propriety of dismissal of the complaint with prejudice, Section 1, Rule 17 of the 1997 Rules of Civil
of Dismissal on February 20, 2002. The Notice of Dismissal states: Procedure provides:
Plaintiff, through counsel, unto this Honorable Court, respectfully files this notice of SECTION 1. Dismissal upon notice by plaintiff. A complaint may be dismissed by the
dismissal of the above-captioned case without prejudice by virtue of Rule 17, Section 1 of the 1997 plaintiff by filing a notice of dismissal at any time before service of the answer or of a motion for
Rules of Civil Procedure. By this notice, defendants[] Motion to Dismiss is then rendered moot and summary judgment. Upon such notice being filed, the court shall issue an order confirming the
academic. dismissal. Unless otherwise stated in the notice, the dismissal is without prejudice , except that a notice
WHEREFORE, plaintiff Frederick Dael respectfully prays that this Honorable Court operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in a
dismiss the above-captioned case without prejudice. competent court an action based on or including the same claim. [Emphasis supplied.]
RESPECTFULLY SUBMITTED.[7] Under this provision, it is mandatory that the trial court issue an order confirming such dismissal and, unless
On May 28, 2002, the RTC dismissed the complaint with prejudice. The dispositive portion of the Resolution reads otherwise stated in the notice, the dismissal is without prejudice and could be accomplished by the plaintiff through mere notice of
thus: dismissal, and not through motion subject to approval by the court. Dismissal is ipso facto upon notice, and without prejudice
WHEREFORE, finding merit to defendants contention that plaintiff Frederick Dael has no unless otherwise stated in the notice. [16] The trial court has no choice but to consider the complaint as dismissed, since the plaintiff
cause of action against them since said plaintiff is not one of the contracting parties in the Contract to may opt for such dismissal as a matter of right, regardless of the ground.[17]
Sell, which is allegedly breached, the Motion to Dismiss filed by defendants is granted.Consequently, the Respondents argue that the Motion to Dismiss they filed precedes the Notice of Dismissal filed by petitioner and
case at bar is DISMISSED, with prejudice. hence, the trial court correctly gave it precedence and ruled based on the motion.
SO ORDERED.[8] [Emphasis supplied.] This argument is erroneous. Section 1 of Rule 17 does not encompass a Motion to Dismiss.  The provision specifically
Arguing that the RTC erred in dismissing the complaint with prejudice based on respondents Motion to Dismiss, and provides that a plaintiff may file a notice of dismissal before service of the answer or a motion for summary judgment. Thus, upon
not without prejudice based on his Notice of Dismissal, petitioner filed a Motion for Reconsideration [9] but it was denied by the the filing of the Notice of Dismissal by the plaintiff, the Motion to Dismiss filed by respondents became moot and academic and
RTC in a Resolution dated December 5, 2002. the trial court should have dismissed the case without prejudice based on the Notice of Dismissal filed by the petitioner.
Hence, this petition. Moreover, to allow the case to be dismissed with prejudice would erroneously result in  res judicata [18] and imply that
Petitioner raises the following issues for our resolution: petitioner can no longer file a case against respondents without giving him a chance to present evidence to prove otherwise.
I.
 As to the second issue, petitioners recourse to this Court by way of a petition for review on certiorari under Rule 45 is 2. To participate in the bidding, to secure bid bonds and other documents pre-requisite in the bidding of
proper. An order of dismissal, whether correct or not, is a final order. It is not interlocutory because the proceedings were terminated; it Casicnan Multi-Purpose Irrigation and Power Plant (CMIPPL 04-99), National Irrigation
leaves nothing more to be done by the lower court. Therefore, the remedy of the plaintiff is to appeal the order.[19] Under the Rules of Authority, Muoz, Nueva Ecija.
Court, a party may directly appeal to the Supreme Court from a decision of the trial court only on pure questions of law.[20]  
WHEREFORE, the petition is GRANTED. The assailed Resolutions dated May 28, 2002 and December 5, 2002 of 3. To receive and collect payment in check in behalf of E.M. PAULE CONSTRUCTION & TRADING.
the Regional Trial Court, Branch 34, Negros Oriental are AFFIRMED with MODIFICATION such that the case is dismissed  
without prejudice. No pronouncement as to costs. 4. To do and perform such acts and things that may be necessary and/or required to make the herein
SO ORDERED. authority effective.[4]
   
On September 29, 1999, EMPCT, through MENDOZA, participated in the bidding of the NIA-Casecnan Multi-
THIRD DIVISION Purpose Irrigation and Power Project (NIA-CMIPP) and was awarded Packages A-10 and B-11 of the NIA-CMIPP Schedule
  A. On November 16, 1999, MENDOZA received the Notice of Award which was signed by Engineer Alexander M. Coloma
  (COLOMA), then Acting Project Manager for the NIA-CMIPP. Packages A-10 and B-11 involved the construction of a road
ZENAIDA G. MENDOZA, G.R. No. 175885 system, canal structures and drainage box culverts with a project cost of P5,613,591.69.
Petitioner,  
Present: When Manuel de la Cruz (CRUZ) learned that MENDOZA is in need of heavy equipment for use in the NIA project,
Ynares-Santiago, J. (Chairperson), he met up with MENDOZA in Bayuga, Muoz, Nueva Ecija, in an apartment where the latter was holding office under an EMPCT
- versus - Austria-Martinez, signboard. A series of meetings followed in said EMPCT office among CRUZ, MENDOZA and PAULE.
Chico-Nazario,  
Nachura, and On December 2 and 20, 1999, MENDOZA and CRUZ signed two Job Orders/Agreements [5] for the lease of the latters
Peralta, JJ. heavy equipment (dump trucks for hauling purposes) to EMPCT.
ENGR. EDUARDO PAULE,  
ENGR. ALEXANDER COLOMA On April 27, 2000, PAULE revoked[6] the SPA he previously issued in favor of MENDOZA; consequently, NIA
and NATIONAL IRRIGATION refused to make payment to MENDOZA on her billings. CRUZ, therefore, could not be paid for the rent of the equipment. Upon
ADMINISTRATION (NIA advice of MENDOZA, CRUZ addressed his demands for payment of lease rentals directly to NIA but the latter refused to
MUOZ, NUEVA ECIJA), acknowledge the same and informed CRUZ that it would be remitting payment only to EMPCT as the winning contractor for the
Respondents. project.
   
x ------------------------------------------------------ x In a letter dated April 5, 2000, CRUZ demanded from MENDOZA and/or EMPCT payment of the outstanding rentals
  which amounted to P726,000.00 as of March 31, 2000.
MANUEL DELA CRUZ, G.R. No. 176271  
Petitioner, On June 30, 2000, CRUZ filed Civil Case No. 18-SD (2000) with Branch 37 of the Regional Trial Court of Nueva
  Ecija, for collection of sum of money with damages and a prayer for the issuance of a writ of preliminary injunction against
- versus - PAULE, COLOMA and the NIA. PAULE in turn filed a third-party complaint against MENDOZA, who filed her answer thereto,
ENGR. EDUARDO M. PAULE, with a cross-claim against PAULE.
ENGR. ALEXANDER COLOMA  
and NATIONAL IRRIGATION Promulgated: MENDOZA alleged in her cross-claim that because of PAULEs whimsical revocation of the SPA, she was barred
ADMINISTRATION (NIA from collecting payments from NIA, thus resulting in her inability to fund her checks which she had issued to suppliers of
MUOZ, NUEVA ECIJA), materials, equipment and labor for the project. She claimed that estafa and B.P. Blg. 22 cases were filed against her; that she could
Respondents. February 13, 2009 no longer finance her childrens education; that she was evicted from her home; that her vehicle was foreclosed upon; and that her
  reputation was destroyed, thus entitling her to actual and moral damages in the respective amounts of P3 million and P1 million.
x ---------------------------------------------------------------------------------------- x  
  Meanwhile, on August 23, 2000, PAULE again constituted MENDOZA as his attorney-in-fact
 
1. To represent me (PAULE), in my capacity as General Manager of the E.M. PAULE
CONSTRUCTION AND TRADING, in all meetings, conferences and transactions exclusively for the
  construction of the projects known as Package A-10 of Schedule A and Package No. B-11 Schedule B,
DECISION which are 38.61% and 63.18% finished as of June 21, 2000, per attached Accomplishment Reports x x x;
   
YNARES-SANTIAGO, J.: 2. To implement, execute, administer and supervise the said projects in whatever stage they
  are in as of to date, to collect checks and other payments due on said projects and act as the Project
  Manager for E.M. PAULE CONSTRUCTION AND TRADING;
These consolidated petitions assail the August 28, 2006 Decision [1] of the Court of Appeals in CA-G.R. CV No.  
80819 dismissing the complaint in Civil Case No. 18-SD (2000), [2] and its December 11, 2006 Resolution[3] denying the herein 3. To do and perform such acts and things that may be necessary and required to make the
petitioners motion for reconsideration. herein power and authority effective.[7]
   
Engineer Eduardo M. Paule (PAULE) is the proprietor of E.M. Paule Construction and Trading (EMPCT). On May At the pre-trial conference, the other parties were declared as in default and CRUZ was allowed to present his
24, 1999, PAULE executed a special power of attorney (SPA) authorizing Zenaida G. Mendoza (MENDOZA) to participate in the evidence ex parte. Among the witnesses he presented was MENDOZA, who was impleaded as defendant in PAULEs third-party
pre-qualification and bidding of a National Irrigation Administration (NIA) project and to represent him in all transactions related complaint.
thereto, to wit:  
  On March 6, 2003, MENDOZA filed a motion to declare third-party plaintiff PAULE non-suited with prayer that she
1. To represent E.M. PAULE CONSTRUCTION & TRADING of which I (PAULE) am the General be allowed to present her evidence ex parte.
Manager in all my business transactions with National Irrigation Authority, Muoz, Nueva  
Ecija.
 
 However, without resolving MENDOZAs motion to declare PAULE non-suited, and without granting her the  
opportunity to present her evidence ex parte, the trial court rendered its decision dated August 7, 2003, the dispositive portion of CRUZ and MENDOZAs motions for reconsideration were denied; hence, these consolidated petitions:
which states, as follows:
 
WHEREFORE, judgment is hereby rendered in favor of the plaintiff as follows:
   
1. Ordering defendant Paule to pay the plaintiff the sum of P726,000.00 by way of actual G.R. No. 175885 (MENDOZA PETITION)
damages or compensation for the services rendered by him;  
  a) The Court of Appeals erred in sustaining the trial courts failure to resolve her motion
2. Ordering defendant Paule to pay plaintiff the sum of P500,000.00 by way of moral praying that PAULE be declared non-suited on his third-party complaint, as well as her motion seeking
damages; that she be allowed to present evidence ex parte on her cross-claim;
   
3. Ordering defendant Paule to pay plaintiff the sum of P50,000.00 by way of reasonable b) The Court of Appeals erred when it sanctioned the trial courts failure to resolve her
attorneys fees; cross-claim against PAULE; and,
   
4. Ordering defendant Paule to pay the costs of suit; and c) The Court of Appeals erred in its application of Article 1920 of the Civil Code, and in
  adjudging that MENDOZA had no right to claim actual damages from PAULE for debts incurred on
5. Ordering defendant National Irrigation Administration (NIA) to withhold the balance still account of the SPAs issued to her.
due from it to defendant Paule/E.M. Paule Construction and Trading under NIA-CMIPP Contract  
Package A-10 and to pay plaintiff therefrom to the extent of defendant Paules liability herein adjudged.  
  G.R. No. 176271 (CRUZ PETITION)
SO ORDERED.[8]  
  CRUZ argues that the decision of the Court of Appeals is contrary to the provisions of law
In holding PAULE liable, the trial court found that MENDOZA was duly constituted as EMPCTs agent for purposes on agency, and conflicts with the Resolution of the Court in G.R. No. 173275, which affirmed the Court
of the NIA project and that MENDOZA validly contracted with CRUZ for the rental of heavy equipment that was to be used of Appeals decision in CA-G.R. CV No. 81175, finding the existence of an agency relation and where
therefor. It found unavailing PAULEs assertion that MENDOZA merely borrowed and used his contractors license in exchange PAULE was declared as MENDOZAs principal under the subject SPAs and, thus, liable for obligations
for a consideration of 3% of the aggregate amount of the project. The trial court held that through the SPAs he executed, PAULE (unpaid construction materials, fuel and heavy equipment rentals) incurred by the latter for the purpose
clothed MENDOZA with apparent authority and held her out to the public as his agent; as principal, PAULE must comply with of implementing and carrying out the NIA project awarded to EMPCT.
the obligations which MENDOZA contracted within the scope of her authority and for his benefit. Furthermore, PAULE knew of  
the transactions which MENDOZA entered into since at various times when she and CRUZ met at the EMPCT office, PAULE CRUZ argues that MENDOZA was acting within the scope of her authority when she hired his services as hauler of
was present and offered no objections. The trial court declared that it would be unfair to allow PAULE to enrich himself and debris because the NIA project (both Packages A-10 and B-11 of the NIA-CMIPP) consisted of construction of canal structures,
disown his acts at the expense of CRUZ. which involved the clearing and disposal of waste, acts that are necessary and incidental to PAULEs obligation under the NIA
  project; and that the decision in a civil case involving the same SPAs, where PAULE was found liable as MENDOZAs principal
PAULE and MENDOZA both appealed the trial courts decision to the Court of Appeals. already became final and executory; that in Civil Case No. 90-SD filed by MENDOZA against PAULE, [12] the latter was adjudged
  liable to the former for unpaid rentals of heavy equipment and for construction materials which MENDOZA obtained for use in
PAULE claimed that he did not receive a copy of the order of default; that it was improper for MENDOZA, as third- the subject NIA project. On September 15, 2003, judgment was rendered in said civil case against PAULE, to wit:
party defendant, to have taken the stand as plaintiff CRUZs witness; and that the trial court erred in finding that an agency was  
created between him and MENDOZA, and that he was liable as principal thereunder. WHEREFORE, judgment is hereby rendered in favor of the plaintiff (MENDOZA) and
  against the defendant (PAULE) as follows:
On the other hand, MENDOZA argued that the trial court erred in deciding the case without affording her the  
opportunity to present evidence on her cross-claim against PAULE; that, as a result, her cross-claim against PAULE was not 1. Ordering defendant Paule to pay plaintiff the sum of P138,304.00 representing the
resolved, leaving her unable to collect the amounts of P3,018,864.04, P500,000.00, and P839,450.88 which allegedly represent the obligation incurred by the plaintiff with LGH Construction;
unpaid costs of the project and the amount PAULE received in excess of payments made by NIA.  
  2. Ordering defendant Paule to pay plaintiff the sum of P200,000.00 representing the
On August 28, 2006, the Court of Appeals rendered the assailed Decision which dismissed CRUZs complaint, as well balance of the obligation incurred by the plaintiff with Artemio Alejandrino;
as MENDOZAs appeal. The appellate court held that the SPAs issued in MENDOZAs favor did not grant the latter the authority  
to enter into contract with CRUZ for hauling services; the SPAs limit MENDOZAs authority to only represent EMPCT in its 3. Ordering defendant Paule to pay plaintiff the sum of P520,000.00 by way of moral
business transactions with NIA, to participate in the bidding of the project, to receive and collect payment in behalf of EMPCT, damages, and further sum of P100,000.00 by way of exemplary damages;
and to perform such acts as may be necessary and/or required to make the said authority effective.  Thus, the engagement of  
CRUZs hauling services was done beyond the scope of MENDOZAs authority. 4. Ordering defendant Paule to pay plaintiff the sum of P25,000.00 as for attorneys fees; and
   
As for CRUZ, the Court of Appeals held that he knew the limits of MENDOZAs authority under the SPAs yet he still 5. To pay the cost of suit.[13]
transacted with her. Citing Manila Memorial Park Cemetery, Inc. v. Linsangan,[9] the appellate court declared that the principal  
(PAULE) may not be bound by the acts of the agent (MENDOZA) where the third person (CRUZ) transacting with the agent PAULE appealed[14] the above decision, but it was dismissed by the Court of Appeals in a Decision[15] which reads, in
knew that the latter was acting beyond the scope of her power or authority under the agency. part:
   
With respect to MENDOZAs appeal, the Court of Appeals held that when the trial court rendered judgment, not only As to the finding of the trial court that the principle of agency is applicable in this case, this
did it rule on the plaintiffs complaint; in effect, it resolved the third-party complaint as well; [10] that the trial court correctly Court agrees therewith. It must be emphasized that appellant (PAULE) authorized appellee
dismissed the cross-claim and did not unduly ignore or disregard it; that MENDOZA may not claim, on appeal, the amounts of (MENDOZA) to perform any and all acts necessary to make the business transaction of EMPCT with
P3,018,864.04, P500,000.00, and P839,450.88 which allegedly represent the unpaid costs of the project and the amount PAULE NIA effective. Needless to state, said business transaction pertained to the construction of canal
received in excess of payments made by NIA, as these are not covered by her cross-claim in the court a quo, which seeks structures which necessitated the utilization of construction materials and equipments. Having given said
reimbursement only of the amounts of P3 million and P1 million, respectively, for actual damages (debts to suppliers, laborers, authority, appellant cannot be allowed to turn its back on the transactions entered into by appellee in
lessors of heavy equipment, lost personal property) and moral damages she claims she suffered as a result of PAULEs revocation behalf of EMPCT.
of the SPAs; and that the revocation of the SPAs is a prerogative that is allowed to PAULE under Article 1920 [11] of the Civil  
Code.
 The amount of moral damages and attorneys fees awarded by the trial court being justifiable There was no valid reason for PAULE to revoke MENDOZAs SPAs. Since MENDOZA took care of the funding and
and commensurate to the damage suffered by appellee, this Court shall not disturb the same. It is well- sourcing of labor, materials and equipment for the project, it is only logical that she controls the finances, which means that the
settled that the award of damages as well as attorneys fees lies upon the discretion of the court in the SPAs issued to her were necessary for the proper performance of her role in the partnership, and to discharge the obligations she
context of the facts and circumstances of each case. had already contracted prior to revocation. Without the SPAs, she could not collect from NIA, because as far as it is concerned,
  EMPCT and not the PAULE-MENDOZA partnership is the entity it had contracted with. Without these payments from NIA, there
WHEREFORE, the appeal is DISMISSED and the appealed Decision is AFFIRMED. would be no source of funds to complete the project and to pay off obligations incurred. As MENDOZA correctly argues, an
  agency cannot be revoked if a bilateral contract depends upon it, or if it is the means of fulfilling an obligation already contracted,
SO ORDERED.[16] or if a partner is appointed manager of a partnership in the contract of partnership and his removal from the management is
  unjustifiable.[21]
PAULE filed a petition to this Court docketed as G.R. No. 173275 but it was denied with finality on September 13,  
2006. PAULEs revocation of the SPAs was done in evident bad faith. Admitting all throughout that his only entitlement in
  the partnership with MENDOZA is his 3% royalty for the use of his contractors license, he knew that the rest of the amounts
MENDOZA, for her part, claims that she has a right to be heard on her cause of action as stated in her cross-claim collected from NIA was owing to MENDOZA and suppliers of materials and services, as well as the laborers. Yet, he deliberately
against PAULE; that the trial courts failure to resolve the cross-claim was a violation of her constitutional right to be apprised of revoked MENDOZAs authority such that the latter could no longer collect from NIA the amounts necessary to proceed with the
the facts or the law on which the trial courts decision is based; that PAULE may not revoke her appointment as attorney-in-fact for project and settle outstanding obligations.
and in behalf of EMPCT because, as manager of their partnership in the NIA project, she was obligated to collect from NIA the  
funds to be used for the payment of suppliers and contractors with whom she had earlier contracted for labor, materials and From the way he conducted himself, PAULE committed a willful and deliberate breach of his contractual duty to his
equipment. partner and those with whom the partnership had contracted. Thus, PAULE should be made liable for moral damages.
   
PAULE, on the other hand, argues in his Comment that MENDOZAs authority under the SPAs was for the limited Bad faith does not simply connote bad judgment or negligence; it imputes a dishonest
purpose of securing the NIA project; that MENDOZA was not authorized to contract with other parties with regard to the works purpose or some moral obliquity and conscious doing of a wrong; a breach of a sworn duty through some
and services required for the project, such as CRUZs hauling services; that MENDOZA acted beyond her authority in contracting motive or intent or ill-will; it partakes of the nature of fraud (Spiegel v. Beacon Participation, 8 NE 2nd
with CRUZ, and PAULE, as principal, should not be made civilly liable to CRUZ under the SPAs; and that MENDOZA has no Series, 895, 1007). It contemplates a state of mind affirmatively operating with furtive design or some
cause of action against him for actual and moral damages since the latter exceeded her authority under the agency. motive of self-interest or ill will for ulterior purposes (Air France v. Carrascoso, 18 SCRA 155, 166-
  167). Evident bad faith connotes a manifest deliberate intent on the part of the accused to do wrong or
We grant the consolidated petitions. cause damage.[22]
   
Records show that PAULE (or, more appropriately, EMPCT) and MENDOZA had entered into a partnership in  
regard to the NIA project. PAULEs contribution thereto is his contractors license and expertise, while MENDOZA would provide Moreover, PAULE should be made civilly liable for abandoning the partnership, leaving MENDOZA to fend for her
and secure the needed funds for labor, materials and services; deal with the suppliers and sub-contractors; and in general and own, and for unduly revoking her authority to collect payments from NIA, payments which were necessary for the settlement of
together with PAULE, oversee the effective implementation of the project. For this, PAULE would receive as his share three per obligations contracted for and already owing to laborers and suppliers of materials and equipment like CRUZ, not to mention the
cent (3%) of the project cost while the rest of the profits shall go to MENDOZA.  PAULE admits to this arrangement in all his agreed profits to be derived from the venture that are owing to MENDOZA by reason of their partnership agreement. Thus, the
pleadings.[17] trial court erred in disregarding and dismissing MENDOZAs cross-claim which is properly a counterclaim, since it is a claim
  made by her as defendant in a third-party complaint against PAULE, just as the appellate court erred in sustaining it on the
Although the SPAs limit MENDOZAs authority to such acts as representing EMPCT in its business transactions with justification that PAULEs revocation of the SPAs was within the bounds of his discretion under Article 1920 of the Civil Code.
NIA, participating in the bidding of the project, receiving and collecting payment in behalf of EMPCT, and performing other acts  
in furtherance thereof, the evidence shows that when MENDOZA and CRUZ met and discussed (at the EMPCT office in Bayuga, Where the defendant has interposed a counterclaim (whether compulsory or permissive) or is seeking affirmative
Muoz, Nueva Ecija) the lease of the latters heavy equipment for use in the project, PAULE was present and interposed no relief by a cross-complaint, the plaintiff cannot dismiss the action so as to affect the right of the defendant in his counterclaim or
objection to MENDOZAs actuations. In his pleadings, PAULE does not even deny this. Quite the contrary, MENDOZAs actions prayer for affirmative relief. The reason for that exception is clear. When the answer sets up an independent action against the
were in accord with what she and PAULE originally agreed upon, as to division of labor and delineation of functions within their plaintiff, it then becomes an action by the defendant against the plaintiff, and, of course, the plaintiff has no right to ask for a
partnership. Under the Civil Code, every partner is an agent of the partnership for the purpose of its business;[18] each one may dismissal of the defendants action. The present rule embodied in Sections 2 and 3 of Rule 17 of the 1997 Rules of Civil Procedure
separately execute all acts of administration, unless a specification of their respective duties has been agreed upon, or else it is ordains a more equitable disposition of the counterclaims by ensuring that any judgment thereon is based on the merit of the
stipulated that any one of them shall not act without the consent of all the others. [19] At any rate, PAULE does not have any valid counterclaim itself and not on the survival of the main complaint. Certainly, if the counterclaim is palpably without merit or
cause for opposition because his only role in the partnership is to provide his contractors license and expertise, while the sourcing suffers jurisdictional flaws which stand independent of the complaint, the trial court is not precluded from dismissing it under the
of funds, materials, labor and equipment has been relegated to MENDOZA. amended rules, provided that the judgment or order dismissing the counterclaim is premised on those defects. At the same time, if
  the counterclaim is justified, the amended rules now unequivocally protect such counterclaim from peremptory dismissal by
Moreover, it does not speak well for PAULE that he reinstated MENDOZA as his attorney-in-fact, this time with reason of the dismissal of the complaint.[23]
broader powers to implement, execute, administer and supervise the NIA project, to collect checks and other payments due on said  
project, and act as the Project Manager for EMPCT, even after CRUZ has already filed his complaint. Despite knowledge that he Notwithstanding the immutable character of PAULEs liability to MENDOZA, however, the exact amount thereof is
was already being sued on the SPAs, he proceeded to execute another in MENDOZAs favor, and even granted her broader powers yet to be determined by the trial court, after receiving evidence for and in behalf of MENDOZA on her counterclaim, which must
of administration than in those being sued upon. If he truly believed that MENDOZA exceeded her authority with respect to the be considered pending and unresolved.
initial SPA, then he would not have issued another SPA. If he thought that his trust had been violated, then he should not have  
executed another SPA in favor of MENDOZA, much less grant her broader authority. WHEREFORE, the petitions are GRANTED. The August 28, 2006 Decision of the Court of Appeals in CA-G.R.
  CV No. 80819 dismissing the complaint in Civil Case No. 18-SD (2000) and its December 11, 2006 Resolution denying the
Given the present factual milieu, CRUZ has a cause of action against PAULE and MENDOZA. Thus, the Court of motion for reconsideration are REVERSED and SET ASIDE. The August 7, 2003 Decision of the Regional Trial Court of
Appeals erred in dismissing CRUZs complaint on a finding of exceeded agency. Besides, that PAULE could be held liable under Nueva Ecija, Branch 37 in Civil Case No. 18-SD (2000) finding PAULE liable is REINSTATED, with
the SPAs for transactions entered into by MENDOZA with laborers, suppliers of materials and services for use in the NIA project, the MODIFICATION that the trial court is ORDERED to receive evidence on the counterclaim of petitioner Zenaida G.
has been settled with finality in G.R. No. 173275. What has been adjudged in said case as regards the SPAs should be made to Mendoza.
apply to the instant case. Although the said case involves different parties and transactions, it finally disposed of the matter  
regarding the SPAs specifically their effect as among PAULE, MENDOZA and third parties with whom MENDOZA had SO ORDERED.
contracted with by virtue of the SPAs a disposition that should apply to CRUZ as well. If a particular point or question is in issue  
in the second action, and the judgment will depend on the determination of that particular point or question, a former judgment  
between the same parties or their privies will be final and conclusive in the second if that same point or question was in issue and
adjudicated in the first suit. Identity of cause of action is not required but merely identity of issues.[20]
 
 Republic of the Philippines dispose of the same at the time, place, and for the price which it may deem convenient and reasonable; and (d) NASUTRA had
Supreme Court long been dissolved and liquidated under Presidential Decree No. 2005 and Executive Order No. 114.[15]
Manila  
  Lastly, petitioner argued that the issues posed by respondents are barred by res judicata and/or rendered moot by the decisions in
  the following cases, viz.: (a) G.R. No. 55798, entitled Corazon Zayco, et al. v. NASUTRA et al.; (b) Civil Case No. Q- 33723,
THIRD DIVISION entitled Hortensia Starke v. NASUTRA, et al.; (c) Civil Case No. 3265, entitled Cecilia Magsaysay, et al. v. NASUTRA et al.; and
  (d) Civil Case No. 16439, entitled John Keng Seng v. NASUTRA, et al.[16]
Benedicto v Lacsonx  
  On March 26, 1996, respondents filed a Consolidated Opposition to Motion to Dismiss. [17] Simultaneous thereto, respondents also
DECISION filed an Amended Certification to the following effect:
   
  xxxx
PERALTA, J.:  
Before this Court is a Petition for Review on certiorari,[1] under Rule 45 of the Rules of Court, seeking to set aside the September 2. That, except for the case entitled Manuel Lacson v. Roberto S. Benedicto, et al., Civil
30, 1999 Decision[2] and January 10, 2000 Resolution[3] of the Court of Appeals (CA) in CA-G.R. CV No. 53841. Case 65156, Pasig, RTC Branch 264, filed by some of the Plaintiffs on June 20, 1995 and
The facts of the case are as follows: subsequently withdrawn by them without prejudice on November 14, 1995 pursuant to Sec. 1,
Under Presidential Decree No. 388,[4] the Philippine Sugar Commission (PHILSUCOM) was created and vested with the power to Rule 17 prior to the filing of the present suit, Plaintiffs have not commenced any other action or
act as the single buying and selling agency of sugar in the Philippines. On September 7, 1977, PHILSUCOM further organized the proceeding involving the same issues in the Supreme Court, the Court of Appeals, or any other tribunal
National Sugar Trading Corporation (NASUTRA) as its buying marketing arm. Petitioner Robert S. Benedicto [5] was the or agency; that to the best of my knowledge, no such action or proceeding is pending the Supreme Court,
concurrent Chairman and President of Traders Royal Bank[6] and NASUTRA. the Court of Appeals, or any other tribunal or agency; and if I or they should hereafter learn that a similar
The case stems from a Complaint,[7] docketed as Civil Case No. 95-9137 (Bacolod Case), filed by respondents, action or proceeding has been filed or pending before the Supreme Court , Court of Appeals, or any other
individual sugar planters and agricultural corporations Manuel Lacson et al., on November 23, 1995, in the Regional Trial Court tribunal or agency, Plaintiffs and I hereby undertake to report such fact within five (5) days therefrom to
(RTC) of BacolodCity, Branch 44. Respondents complaint was premised on a claim for unpaid shares based on Sugar Order No. 2, this Honorable Court.[18]
series of 1979-1980[8] and Sugar Order No. 1, series of 1980-1981[9] issued by PHILSUCOM. The claims cover the sugar export  
sales[10] supposedly undervalued by NASUTRA and coursed through Traders Royal Bank, the total amount of which is claimed by On June 5, 1996, the RTC issued an Order[19] granting petitioners motion to dismiss the complaint, the dispositive portion of which
respondents to be $33,907,172. 47, to wit: reads:
   
  WHEREFORE, premises considered, the Motions to Dismiss are hereby GRANTED. The
SUMMARY OF CLAIMS UNDER THE FIRST TO FIFTEENTH case against all the defendants is ordered DISMISSED.
CAUSES OF ACTION  
  Furnish copies of this Order all counsel on record for their information.
92. As tabulated in Annex C hereof, while the total amount actually paid by the buyers and  
collected by the PHILSUCOM and the Defendants NASUTRA, BENEDICTO, MONTEBON and TRB on the SO ORDERED.[20]
sales of export sugar subject of the preceding Causes of Action, amounted to US$ 94,146,954.03, the  
PHILSUCOM and the said Defendants recorded and reported a total collection of only US$60,239,781.56, The RTC ruled that a perusal of the copies of the complaints in two cases, namely: Hector Lacson Case and Ramon Monfort
resulting in an undervaluation of Defendant NASUTRAs export sales by US$ 33, 907,172.74 and, Case show similarities with the present Bacolod Case such that different decisions or rulings would give rise to conflicting rules
correspondingly, in an equivalent understatement of the amount due the Plaintiffs and other sugar producers in on law on similar issues.[21] The RTC also held that respondents were guilty of forum shopping for failure to report in their original
the profits realized from such sales, pursuant to the directive of then President Marcos as implemented in the anti-forum shopping certification in the Bacolod Case that they had filed a similar case with the RTC of Pasig notwithstanding that
PHILSUCOM SUGAR ORDERS hereto attached as Annexes B and B-1 hereof. the same had been withdrawn by them. The RTC ruled that even if the Pasig Case had been withdrawn, the same had already been
  commenced.[22] Thus, the RTC held that there was a need to report the same in the anti-forum shopping certification in the Bacolod
93. Accordingly, on the basis of their respective production of A and C sugar for the 1980-1981 Case. Lastly, the RTC ruled that NASUTRA had already been dissolved and hence, respondents have no cause of action against
crop year vis--vis the national production of 20,474,653 piculs of the same classes of sugar for the same crop NASUTRA.[23] The other grounds raised, however, by petitioner in support of its motion to dismiss were denied by the RTC, as the
year, the Plaintiffs are entitled to the payment by Defendants of their pro rata share, in the amounts indicated same did not appear to be indubitable without further evidence.[24]
opposite their respective names in Annex C-1 hereof, in the undeclared profit of US$33,907,172.74 realized  
from the export sales, subject of the preceding Causes of Action, during the said crop year.[11] Respondents appealed the RTC Order to the CA.
   
  On September 30, 1999, the CA rendered a Decision reversing the assailed RTC Order. The CA found merit in respondents appeal
Petitioner, as President and concurrent Chairman of both Traders Royal Bank and NASUTRA, was charged by and ordered for the remand of the case to the RTC. The dispositive portion of the Decision reads:
respondents with fraud and bad faith, not only in refusing to furnish them accurate data on NASUTRAs export sugar sales, but,  
more importantly, in under-reporting and under-declaring the true prices of the shipments.[12] Respondents, thus, prayed for a WHEREFORE, the appeal is GRANTED and the Assailed Order dated June 5, 1996 is
refund of their shares in the undervalued shipments. REVERSED and SET ASIDE, and in lieu thereof, a new one is entered ordering the REMAND of the
  case to the court of origin for further proceedings.
On December 27, 1995, petitioner filed a Motion to Dismiss, [13] arguing therein (1) that respondents had violated the  
rule on forum shopping; (2) that respondents have no cause of action; (3) that the issues involved are res judicata or rendered SO ORDERED.[25]
moot by case law; and (4) that the claim or demand has already been paid.  
On the issue of forum shopping, petitioner argued that respondents have already filed the following cases Aggrieved by the CA Decision, petitioner filed a Motion for Reconsideration [26], which was, however, denied by the CA
beforehand, viz.: (a) Civil Case No. 4301, before Branch 51 of the RTC of Bacolod, entitled Hector Lacson, et al. v. NASUTRA et in a Resolution dated January 10, 2000.
al., (Hector Lacson Case); (b) Civil Case No. 88-46368, before Branch 23 of the RTC of Manila, entitled Ramon Monfort et al.  
v. NASUTRA et al. (Ramon Monfort Case); and (c) Civil Case No. 65156, before Branch 264 of the RTC of Pasig, Hence, herein petition, with petitioner raising the following errors committed by the CA, to wit:
entitled Manuel Lacson, et al. v. NASUTRA, et al. (Pasig Case).[14]  
   
On the issue of no cause of action, petitioner argued that: (a) not being their agent, NASUTRA had no obligation to 5.1. WHEN IT ABSOLVED THE PRIVATE RESPONDENTS OF ANY VIOLATION OF THE
share its profits with respondents; (b) the questioned transactions were already perfected and consummated both with respect to ANTI-FORUM SHOPPING RULE NOTWITHSTANDING THEIR (CONCEDED) FAILURE TO
the delivery of the sugar and full payment of the price; (c) respondents are estopped from questioning the subject transactions, SEASONABLY APPRISE THE BACOLOD COURT OF THE EARLIER FILING OF A SIMILAR CASE
having executed in favor of NASUTRA a Chattel Mortgage on Standing Crop which authorized the latter, among others, to sell or BEFORE THE PASIG COURT, THE SAME BEING A MATERIAL INFORMATION THE NON-
 DISCLOSURE OR CONCEALMENT THEREOF CONSTITUTING AN INEXCUSABLE OMISSION WHEREFORE, herein complaint is hereby DISMISSED and without prejudice to the re-filing
CLEARLY PENALIZED UNDER THE PERTINENT SC CIRCULARS AND SECTION 5, RULE 7 OF thereof.
THE NEW RULES OF CIVIL PROCEDURE;  
  Notify parties and counsel of this Order.
5.2. WHEN IT REFUSED TO APPLY THE PRINCIPLE OF LITIS PENDENTIA  
NOTWITHSTANDING THE (CONCEDED) SIMILARITIES IN THE CIRCUMSTANCES OF THE SO ORDERED.[29]
PLAINTIFFS, THE IDENTITIES OF THE DEFENDANTS AND, MOREOVER, THE SIMILARITIES IN  
SOME OF THE ANTECEDENT ISSUES IN CIVIL CASE NO. 95-9137 AND IN THE OTHER  
PENDING CASES AGAINST THE HEREIN PETITIONERS; and The essence of forum shopping is the filing by a party against whom an adverse judgment has been rendered in one
  forum, seeking another and possibly favorable opinion in another suit other than by appeal or special civil action for certiorari;
[30]
5.3. WHEN IT FAILED TO CONSIDER THAT CIVIL CASE NO. 95-9137 DESERVES  the act of filing of multiple suits involving the same parties for the same cause of action, either simultaneously or successively
DISMISSAL, AT ANY RATE, BASED ON THE OTHER GROUNDS INVOKED BY THE HEREIN for the purpose of obtaining a favorable judgment. [31] Forum shopping exists where the elements of litis pendentia are present or
PETITIONERS, NAMELY, LACK OF CAUSE OF ACTION, RES JUDICATA, PAYMENT AND where a final judgment in one case will amount to res judicata in the action under consideration.[32]
PRESCRIPTION.[27]  
  There is no dispute that the dismissal of the complaint in the Pasig case, upon notice of the plaintiffs therein, was
  sanctioned by Section 1, Rule 17 of the Revised Rules of Court. [33] Quite clearly, the Order declared that the dismissal of the
The petition is not meritorious. complaint was without prejudice to the re-filing thereof. Moreover, even if the same were tested under the rules on litis
  pendentia and res judicata, the danger of conflicting decisions cannot be present, since the Pasig case was dismissed even before a
On Forum Shopping: Civil Case No. 95-9137 (Bacolod Case) vis-a-vis Civil Case No. 65156 (Pasig Case) responsive pleading was filed by petitioner. Since a party resorts to forum shopping in order to increase his chances of obtaining a
  favorable decision or action, it has been held that a party cannot be said to have sought to improve his chances of obtaining a
  favorable decision or action where no unfavorable decision has even been rendered against him in any of the cases he has brought
Petitioner contends that respondents are guilty of forum shopping because they failed to disclose, at the time of the filing before the courts.[34]
of the Bacolod Case, the fact that some of the respondents had earlier commenced a similar action in Pasig. Petitioner claims that  
respondents should have informed the RTC of Bacolod of the commencement and subsequent withdrawal of the Pasig Case in the While the RTC may have been of the opinion that the Pasig Case was nevertheless commenced and, therefore, the same
certificate of non-forum shopping. Petitioner insists that even if the Pasig Case was subsequently withdrawn, the same still should have been stated by respondents in their certification of non-forum shopping in the Bacolod case, this Court does not share
constituted a commenced action, which is required to be disclosed under the rules of forum shopping. the same view.
   
Section 5, Rule 7 of the 1997 Rules of Civil Procedure provides that: In Roxas v. Court of Appeals,[35] this Court had on occasion ruled that when a complaint is dismissed without prejudice
  at the instance of the plaintiff, pursuant to Section 1, Rule 17 of the 1997 Rules of Civil Procedure, there is no need to state in the
SEC. 5. Certification against forum shopping. The plaintiff or principal party shall certify under oath in the certificate of non-forum shopping in a subsequent re-filed complaint the fact of the prior filing and dismissal of the former
complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed complaint, thus:
thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed  
any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his Considering that the complaint in Civil Case No. 97-0523 was dismissed without prejudice by
knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or virtue of the plaintiffs (herein petitioners) Notice of Dismissal dated November 20, 1997 filed pursuant
claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the to Section 1, Rule 17 of the 1997 Rules of Civil Procedure, there is no need to state in the certificate of
same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days non-forum shopping in Civil Case No. 97-0608 about the prior filing and dismissal of Civil Case No. 97-
therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed. 0523. In Gabionza v. Court of Appeals,  we ruled that it is scarcely necessary to add that Circular No. 28-91
  (now Section 5, Rule 7 of the 1997 Rules of Civil Procedure) must be so interpreted and applied as to achieve
Failure to comply with the foregoing requirements shall not be curable by mere amendment of the the purposes projected by the Supreme Court when it promulgated that Circular. Circular No. 28-91 was
complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice, designed to serve as an instrument to promote and facilitate the orderly administration of justice and should
unless otherwise provided, upon motion and after hearing. The submission of a false certification or non- not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective or the
compliance with any of the undertakings therein shall constitute indirect contempt of court, without goal of all rules or procedure which is to achieve substantial justice as expeditiously as possible. The fact that
prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel the Circular requires that it be strictly complied with merely underscores its mandatory nature in that it cannot
clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal be dispensed with or its requirements altogether disregarded, but it does not thereby interdict substantial
with prejudice and shall constitute direct contempt as well as a cause for administrative sanctions. compliance with its provisions under justifiable circumstances.
   
  Thus, an omission in the certificate of non-forum shopping about any event that would not
A perusal of the records shows that, with the exception of additional party-plaintiffs, the Pasig Case actually has a strong constitute res judicata and litis pendencia as in the case at bar, is not fatal as to merit the dismissal and
resemblance to the Bacolod Case. The Pasig Case, however, was dismissed upon the instance of the plaintiffs even before the nullification of the entire proceedings considering that the evils sought to be prevented by the said certificate
Bacolod Case was filed. The RTC Order[28] allowing the dismissal of the complaint in the Pasig Case is hereunder reproduced, to are not present. It is in this light that we ruled in Maricalum Mining Corp. v. National Labor Relations
wit: Commission that a liberal interpretation of Supreme Court Circular No. 04-94 on non-forum shopping would
  be more in keeping with the objectives of procedural rules which is to "secure a just, speedy and inexpensive
xxxx disposition of every action and proceeding."[36]
   
On November 14, 1995, A Notice of Dismissal was filed by plaintiffs thru counsel, Attys. Verily, in numerous occasions, this Court has relaxed the rigid application of the rules to afford the parties the
Ricardo G. Nepomuceno, Jr. and Epifanio Sedigo, Jr., pursuant to Section 1, Rule 17 of the Rules of Court. opportunity to fully ventilate their cases on the merits. This is in line with the time-honored principle that cases should be decided
  only after giving all parties the chance to argue their causes and defenses. Technicality and procedural imperfection should thus
According to the said Rule, plaintiff may, at any time before service of answer, dismiss an not serve as basis of decisions. [37] Technicalities should never be used to defeat the substantive rights of the other party. [38] Every
action by filing a notice of dismissal. party-litigant must be afforded the amplest opportunity for the proper and just determination of his cause, free from the constraints
  of technicalities.[39] In that way, the ends of justice would be better served.[40] For, indeed, the general objective of procedure is to
Records show that no answer has yet been filed by defendants. facilitate the application of justice to the rival claims of contending parties, bearing always in mind that procedure is not to hinder
  but to promote the administration of justice. [41] In the case at bar, considering that the same involves the various claims of 371
Being in conformity to the Rules, the same is hereby granted. respondents, this Court finds that justice and equity are best served by allowing respondents to prove their case on the merits rather
  than denying them their day in court on a strict application of the rules.
 
   
   
  It is the position of petitioner that the CA erred when it chose not to dismiss the case based on the other grounds
On Litis Pendentia: Bacolod Case, Hector Lacson Case, Ramon Monfort Case petitioner had earlier raised in its motion to dismiss. More specifically, petitioner claims that the grounds of lack of cause of
  action, res judicata, payment and prescription warrant the dismissal of the complaint.
   
Petitioner contends that the CA erred when it refused to apply the principle of litis pendentia notwithstanding the The same deserves scant consideration.
similarities in the circumstances of the plaintiffs, the identities of the defendants and the similarities in some of the antecedent It bears to stress that the RTC, in its June 5, 1996 Order, did not also consider the other grounds now raised by
issues in the Bacolod Case, the Hector Lacson Case and Ramon Monfort Case. petitioner, to wit:
   
The requisites of litis pendentia are: (a) the identity of parties, or at least, such as representing the same interests in both In view of the sufficiency of the grounds for dismissal discussed above, the other grounds invoked
actions; (b) the identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity of by the defendants in their Motion to Dismiss, which do not appear to be indubitable without additional
the two cases, such that judgment in one, regardless of which party is successful, would amount to res judicata in the other.[42] evidence need not be considered.[48]
   
The underlying principle of litis pendentia is the theory that a party is not allowed to vex another more than once  
regarding the same subject matter and for the same cause of action. [43] This theory is founded on the public policy that the same While petitioners Motion to Dismiss was granted by the RTC in its June 5, 1996 Order, the same Order, however,
subject matter should not be the subject of controversy in courts more than once, in order that possible conflicting judgments may effectively denied the other grounds raised by petitioner as the same did not appear to be indubitable without additional evidence.
be avoided for the sake of the stability of the rights and status of persons.[44]  
  It is a settled rule that an Order denying a motion to dismiss is merely interlocutory and, therefore, not appealable, nor
The CA was correct when it opined that: can it be 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
Our perusal of the record reveals that forum shopping cannot, indeed, be attributed to the appellants. decision is adverse, reiterate the issue on appeal from the final judgment.[49]
While it may be readily conceded that the plaintiffs in the instant case are more or less similarly situated as the  
plaintiffs in the cases previously filed and that the defendants, or at least the interest they represent, are While the rule refers to instances when a motion to dismiss is completely denied, this Court finds no reason not to apply
basically the same, the fact remains that there is no identity of causes of action and issues in the cases so far the same in instances when some of the grounds raised in a motion to dismiss are denied by the lower court. The other grounds
filed against the latter. The instant suit, as may be gleaned from the complaint, concerns the supposed now raised by petitioner were not before the CA because the same were not put in issue by respondents when they chose to assail
undervaluation by the appellees of fifteen (15) sugar export sales of the appellants export sugar production for the RTCs Order to dismiss the complaint. This is understandable especially since the other grounds were not made the basis of the
the crop years 1979-1980 and 1980-1981 (pp. 3-32, Orig. Rec.). In contrast, Civil Case No. 4301, RTCs Order. Procedurally then, the proper remedy of petitioner, should he choose to reassert the other grounds, is to interpose the
entitled Hector Lacson, et al. vs. National Sugar Trading Corporation, et al. concerns the overcharging of same as defenses in his answer and not to put them in issue in this appeal.
trading costs for the plaintiffs export sugar production for the crop years 1981-1982 and 1982-1983, WHEREFORE, premises considered, the petition is DENIED. The September 30, 1999 Decision and January 10,
underpayment resulting from the defendants use of an erroneous peso-dollar exchange rate and reimbursement 2000 Resolution of the Court of Appeals in CA-G.R. CV No. 53841, directing for the remand of the case, are AFFIRMED.
for amounts alleged to have been wrongfully withheld by the latter (pp. 163-171, ibid.) On the other hand, The Regional TrialCourt of Bacolod City, Branch 44, is hereby ordered to hear the case on the merits and decide the same with
Civil Case No. 88-46368 entitled Ramon Monfort, et al. vs. Philippine Sugar Commission, et al. concerned deliberate dispatch.
the deficiency due the plaintiffs therein from sugar export sales for which a lower exchange rate was allegedly  
used by the defendants, the recovery, among others, of excessive trading costs charged, unauthorized SO ORDERED.
deductions, damages, premiums and other sums supposedly still due from the defendants, as well as a detailed
accounting of the sales of the export sugar produced by the plaintiffs therein. While the amended complaint
filed in the case also sought to claim differentials for three (3) under-valued/under-declared NASUTRA export
sales from the crop year 1980-1981 harvest, the same significantly pertained to different shipments and were
coursed not through appellee Traders Royal Bank but through the Republic Planters Bank (pp. 246-271, ibid).
The variance in the subject matters of the instant case and the aforesaid cases are even conceded in the brief
filed by appellee Roberto Benedicto (pp. 153-155, Rollo).[45]
 
The test to determine identity of causes of action is to ascertain whether the same evidence necessary to sustain the
second cause of action is sufficient to authorize a recovery in the first, even if the forms or the nature of the two (2) actions are
different from each other. If the same facts or evidence would sustain both, the two (2) actions are considered the same within the
rule that the judgment in the former is a bar to the subsequent action; otherwise, it is not. This method has been considered the
most accurate test as to whether a former judgment is a bar in subsequent proceedings between the same parties. It has even been
designated as infallible.[46]
 
While the plaintiffs in the Bacolod Case are more or less similarly situated as the plaintiffs in the Hector Lacson Case
and Ramon Monfort Case, the CA was correct when it ruled that there was no identity of causes of action and issues [47] as it cannot
be said that exactly the same evidence are needed to prove the causes of action in all three cases.
 
Thus, in the Bacolod Case, the evidence needed to prove that petitioner undervalued fifteen sugar export sales of
respondents export sugar production for the crop years 1979-1980 and 1980-1981 is not the same evidence needed in the Hector
Lacson Case to prove the over-charging of trading costs for respondents export sugar production for the crop years 1981-
1982 and 1982-1983, underpayment resulting from the petitioners use of an erroneous peso-dollar exchange rate and
reimbursement for amounts alleged to have been wrongfully withheld by the latter. The same holds true for the Ramon Monfort
Case where the same significantly pertained to different shipments and were coursed not thru the Traders Royal Bank, but thru the
Republic Planters Bank. The Court of Appeals, therefore, did not abuse its discretion in finding that no litis pendentia existed in
the case at bar.
 
 
On the other grounds which warrant the dismissal of the action
   among the parties by referring the case to the Philippine Mediation Center for arbitration.  The arbitration proceedings were,
THIRD DIVISION however, unsuccessful. Thus, the case was referred back to the RTC for a full-blown trial.
   
  In order to simplify the issues to be threshed out in the trial, another pre-trial conference was scheduled by the RTC
ANSON TRADE CENTER, INC., ANSON EMPORIUM   G.R. No. 179999 on 10 October 2005, which respondent failed to attend.
CORPORATION and TEDDY KENG SE CHEN,    
Petitioners,   Petitioners moved for the dismissal of Civil Case No. 01-102198 on the ground of the non-appearance of respondent
  Present: at the pre-trial of 10 October 2005, which was granted, without prejudice, by the RTC in an Order issued on even
    date. Respondent filed with the RTC a Motion for Reconsideration of the courts order of dismissal, in which respondent prayed for
- versus - YNARES-SANTIAGO, J., the relaxation of the rule on non-appearance in the pre-trial, citing excusable negligence on its part and in the interest of justice and
  Chairperson, equity. The RTC denied the Motion for Reconsideration of respondent in another Order dated 17 January 2006.
  CARPIO,*  
PACIFIC BANKINGCORPORATION, Represented by Its CHICO-NAZARIO, The above precipitated respondent to file with the Court of Appeals a Petition for Certiorari under Rule 65 of the
Liquidator, the President of the Philippine Deposit Insurance NACHURA, and Revised Rules of Court, which was docketed as CA-G.R. SP No. 93734. Respondent prayed for the reversal of the RTC Orders
Corporation, PERALTA, JJ. dated 10 October 2005 and 17 January 2006, arguing that the RTC committed grave abuse of discretion amounting to lack or
Respondent.   excess of jurisdiction when it dismissed Civil Case No. 01-102198 due to the non-appearance of respondent at the pre-trial held
  on 10 October 2005. Respondent asserted that its absence was not deliberate or intentional. Its liquidator, PDIC, was undergoing a
Promulgated: reorganization resulting in, among other things, the trimming down of the departments handling litigation work from four to one;
  and the lack of manpower to handle more than 400 banks ordered closed by the Monetary Board. Respondent pleaded for the
March 17, 2009 relaxation of the rules to avert irreparable damage to it.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x  
  The Court of Appeals rendered a Decision on 31 May 2007, granting the Petition of respondent and reversing the
  assailed RTC Orders which dismissed Civil Case No. 01-102198. According to the appellate court, the RTC lost sight of the fact
DECISION that even the Rules of Court mandate a liberal construction of the rules and the pleadings in order to effect substantial justice; and
  that overriding all the foregoing technical considerations is the trend in the rulings of the court to afford every party-litigant the
  amplest opportunity for the proper and just determination of his cause, freed from the constraints of technicalities.[9]
CHICO-NAZARIO, J.:  
  In a Resolution dated 16 October 2007, the Court of Appeals refused to reconsider its earlier Decision.
   
Before Us is a Petition for Review on Certiorari[1] under Rule 45 of the Revised Rules of Court filed by petitioners Petitioners now come before us via this instant Petition for Review on Certiorari raising the following issues:
Anson Trade Center, Inc., (ATCI), Anson Emporium Corporation (AEC), and Teddy Keng Se Chen (Chen), seeking the reversal  
and the setting aside of the Decision [2] dated 31 May 2007 and Resolution [3] dated 16 October 2007 of the Court of Appeals in CA- I
G.R. SP No. 93734. In its assailed Decision, the Court of Appeals annulled the Order [4] dated 10 October 2005 of the Regional  
Trial Court (RTC) of Manila, Branch 52, dismissing Civil Case No. 01-102198 for failure of respondent Pacific Banking WHETHER OR NOT THE REVERSAL OF THE TRIAL COURTS ORDER DATED OCTOBER 10,
Corporation (PBC)[5] to appear during the pre-trial. In its assailed Resolution, the Court of Appeals refused to reconsider its earlier 2005 DISMISSING [herein respondent]S COMPLAINT FOR ITS FAILURE TO APPEAR AT THE
Decision. PRE-TRIAL WAS IN ACCORDANCE WITH THE 1997 RULES ON CIVIL PROCEDURE AND
The following are the undisputed facts: APPLICABLE JURISPRUDENCE.
   
Petitioners ATCI and AEC are corporations engaged in retail and/or wholesale general merchandising. [6] Petitioner II
Chen is the Vice Head of said commercial entities. Respondent is a closed banking institution undergoing liquidation by the  
Philippine Deposit Insurance Corporation (PDIC). WHETHER OR NOT THE TRIAL COURT ABUSED ITS DISCRETION IN DISMISSING
  RESPONDENTS COMPLAINT BECAUSE OF ITS NON-APPEARANCE AT PRE-TRIAL.[10]
On different dates, petitioner ATCI obtained several loans[7] from respondent, amounting to P4,350,000.00. On 26  
October 1984, petitioner AEC also received the amount of P1,000,000.00 as a loan from respondent. As security for the said loan  
obligations, petitioner Chen, with the late Keng Giok, [8] executed, on behalf of petitioners ATCI and AEC, two Continuing At the core of this controversy is a question of procedure.
Suretyship Agreements on 16 September 1981 and 1 March 1982. The Continuing Suretyship Agreements provided that, as  
security for any and all the indebtedness or obligation of petitioners ATCI and AEC, the respondent had the right to retain a lien The petitioners, on one hand, argue that the appearance of the parties during pre-trial is mandatory, and the absence of
upon any and all moneys or other properties and/or the proceeds thereof in the name or for the account or credit of petitioners respondent therefrom constitutes a serious procedural blunder that merits the dismissal of its case.
ATCI and AEC deposited or left with respondent. Subsequently, petitioners defaulted in the payment of their loans. Respondent  
made several demands for payment upon petitioners, to no avail. On the other hand, respondent claims that the Rules must be relaxed if it will cause irreparable damage to a party-
  litigant and to promote the ends of justice. Respondent urges us to brush aside technicalities and to excuse its non-appearance
This prompted respondent to file before the RTC a collection case against petitioners, docketed as Civil Case No. 01- during the pre-trial conference.
102198.  
  We find the Petition unmeritorious.
On 14 January 2002, petitioner Chen, instead of filing an Answer to the Complaint of respondent in Civil Case No.  
01-102198, filed a Motion to Dismiss. Petitioners ATCI and AEC, together with the Estate of Keng Giok, also jointly filed a Pre-trial, by definition, is a procedural device intended to clarify and limit the basic issues raised by the parties[11] and
Motion to Dismiss.Respondent filed its Comment/Opposition to the Motions to Dismiss Civil Case No. 01-102198, to which to take the trial of cases out of the realm of surprise and maneuvering. [12] It is an answer to the clarion call for the speedy
petitioners Chen, ATCI, and AEC, with the Estate of Keng Giok, filed their Replies. Due to the inaction of the RTC on the disposition of cases.Hailed as the most important procedural innovation in Anglo-Saxon justice in the nineteenth century, [13] it thus
Motions to Dismiss, respondent filed Motions to Resolve on 14 January 2003 and on 29 October 2003. In an Order dated 4 paves the way for a less cluttered trial and resolution of the case.[14]
November 2004, the RTC denied the Motions to Dismiss but granted the prayer to drop Keng Giok as defendant since he was long  
dead prior to the institution of Civil Case No. 01-102198. Pertinent provisions of Rule 18 of the Revised Rules of Court on Pre-Trial read:
   
After petitioners filed their joint Answer to the Complaint, a pre-trial conference was set by the RTC on  4 April SEC. 4. Appearance of parties. It shall be the duty of the parties and their counsel to appear
2005. All the parties were present at the scheduled pre-trial where the RTC first explored the possibility of an amicable settlement at the pre-trial. The non-appearance of a party may be excused only if a valid cause is shown therefor or
if a representative shall appear in his behalf fully authorized in writing to enter into an amicable
 settlement, to submit to alternative modes of dispute resolution, and to enter into stipulations or Litigation is not a game of technicality, in which one more deeply schooled and skilled in the subtle art of movement
admissions of facts and of documents. and position entraps and destroys the other. It is rather a contest in which each contending party fully and fairly lays before the
  court the facts in issue and then, brushing aside as wholly trivial and indecisive all imperfection of forms and technicalities of
SEC. 5. Effect of failure to appear. The failure of the plaintiff to appear when so required procedure, asks that justice be done upon the merits. Lawsuits, unlike duels, are not to be won by a rapiers thrust. Technicality,
pursuant to the next preceding section shall be cause for dismissal of the action. The dismissal shall be when it deserts its proper office as an aid to justice and becomes its great hindrance and chief enemy, deserves scant consideration
with prejudice, unless otherwise ordered by the court. A similar failure on the part of the defendant shall from courts.[17]
be cause to allow the plaintiff to present his evidence ex parte and the court to render judgment on the  
basis thereof. As we have stressed emphatically on previous occasions, the rules of procedure may not be misused and abused as
  instruments for the denial of substantial justice. Here is another demonstrative instance of how some members of the bar, availing
  themselves of their proficiency in invoking the letter of the rules without regard to their real spirit and intent, succeed in inducing
Pursuant to the afore-quoted provisions, non-appearance by the plaintiff in the pre-trial shall be cause for dismissal of courts to act contrary to the dictates of justice and equity, and, in some instances, to wittingly or unwittingly abet unfair advantage
the action. However, every rule is not without an exception. In fact, Section 4, Rule 18 of the Revised Rules of Court explicitly by ironically camouflaging their actuations as earnest efforts to satisfy the public clamor for speedy disposition of litigations,
provides that the non-appearance of a party may be excused if a valid cause is shown therefor. We find such a valid cause extant in forgetting all the while that the plain injunction of Section 2 of Rule 1 is that the rules shall be liberally construed in order to
the case at bar. promote their object and to assist the parties in obtaining not only speedy but more imperatively, just ... and inexpensive
  determination of every action and proceeding.[18]
There is no question that herein respondent received notice of the pre-trial conference scheduled on 10 October 2005,  
but it failed to attend the same. Such non-appearance notwithstanding, the Court Of Appeals annulled the 10 October 2005 Order WHEREFORE, premises considered, the instant Petition for Review on Certiorari is hereby DENIED. The Decision dated 31
of the RTC dismissing Civil Case No. 01-102198 after finding that respondent did not intentionally snub the pre-trial May 2007 and Resolution dated 16 October 2007 of the Court of Appeals are AFFIRMED. Costs against the petitioners.
conference. There is no reason for us to disturb such finding.  
  SO ORDERED.
The Monetary Board ordered the closure of respondent by reason of insolvency on 5 July 1985, and it has since been  
represented by its liquidator PDIC in all its undertakings. Still in the course of the liquidation of respondent, its liquidator PDIC
was reorganized in the late 2004 to early 2005. The four departments in the PDIC handling litigation were reduced to one, with the
new Litigation Department having only four in-house counsels who assumed thousands of cases arising from the closure by the
Monetary Board of more than 400 banks. It is understandable how the notice for the pre-trial conference in Civil Case No. 01-
102198 scheduled on 10 October 2005 could be lost or overlooked, as the PDIC was still coping and adjusting with the changes
resulting from its reorganization.
 
It is important to note that the respondent was not remiss in its duties to prosecute its case. Except for the lone
instance of the pre-trial conference on 10 October 2005, respondent promptly and religiously attended the hearings set by the
RTC. In fact, it appears on the records that a pre-trial conference in Civil Case No. 01-102198 was first held on 4 April 2005,
during which respondent was present. When the RTC did not immediately act on the Motions to Dismiss of petitioners, it was
respondent which filed two Motions to Resolve. The actuations of respondent reveal its interest in prosecuting the case, instead of
any intention to delay the proceedings.
 
In Bank of the Philippine Islands v. Court of Appeals,[15] we ruled that in the absence of a pattern or scheme to delay
the disposition of the case or a wanton failure to observe the mandatory requirement of the rules, courts should decide to dispense
rather than wield their authority to dismiss.
 
If Civil Case No. 01-102198 is allowed to proceed to trial, it will not clog the dockets of the RTC or run counter to
the purposes for holding a pre- trial. Inconsiderate dismissals, even without prejudice, do not constitute a panacea or a solution to
the congestion of court dockets; while they lend a deceptive aura of efficiency to records of individual judges, they merely
postpone the ultimate reckoning between the parties. In the absence of clear lack of merit or intention to delay, justice is better
served by a brief continuance, trial on the merits, and final disposition of cases before the court.[16]
 
Moreover, respondent is already insolvent and undergoing liquidation. It instituted Civil Case No. 01-102198
precisely to recover from petitioners the unpaid loans. Even if the dismissal of Civil Case No. 01-102198 by the RTC was without
prejudice, the re-filing of the case would be injurious to respondent. Respondent already paid P344,878.23 as docket fees for Civil
Case No. 01-102198 and with the dismissal of said case, the amount would be forfeited. Respondent would have to pay docket
fees once more when it re-files its Complaint, a substantial amount considering that respondent is already financially shaped. As
the Court of Appeals noted, for respondent to again pay docket fees for the re-filing of its Complaint against petitioners would
truly be detrimental to the creditors of respondent.
 
Given the foregoing, the Court of Appeals did not err in pronouncing that the RTC committed grave abuse of
discretion when it dismissed Civil Case No. 01-102198 for the failure of respondent to attend the pre-trial conference on 10
October 2005. As the appellate court so astutely stated:
 
In refusing to resuscitate Civil Case No. 01-102 198 despite a showing that there was an
excusable ground for the [herein respondent]s absence during the pre-trial, the respondent judge
manifested a dire fixation towards procedural perfection. Indeed, the extraordinary writ of certiorari
would lie when a triers obsession with the stringent tenets of technicality would occasion an injustice
against a party litigant.
 
 
 FIRST DIVISION 1992, respondents counsel did not controvert the stipulation they agreed upon and should be considered estopped from attacking
[G.R. No. 144190. March 6, 2002] the assailed stipulation.
INTERLINING CORPORATION, PABLO GONZALES, SR., ARSENIO GONZALES, ELENA TAN CHIN SUI AND Respondent, on the other hand, contends that petitioners anchor their appeal on the alleged Pre-Trial Conference Order,
THOMAS GONZALES, petitioners, vs. PHILIPPINE TRUST COMPANY, respondent. dated March 6, 1989, where it was allegedly agreed upon by the parties counsels that the individual petitioners shall be relieved of
DECISION their solidary obligation. However, respondent argues that petitioners conveniently ignored subsequent proceedings and pleadings
PUNO, J.: where both parties submitted the issue of solidary liability for resolution by the trial court.
This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to set aside the Decision, dated May We find no merit in the petition.
12, 2000, of the Court of Appeals in C.A.-G.R. CV No. 41129, and its Resolution, dated July 25, 2000, denying petitioners Motion The conduct of a pre-trial in civil actions has been mandatory as early as January 1, 1964, upon the effectivity of the
for Reconsideration. Revised Rules of Court.[7] Pre-trial is a procedural device intended to clarify and limit the basic issues between the parties. It thus
The records disclose that in April 1980, respondent Philippine Trust Company (Philtrust) granted a P.5 million packing paves the way for a less cluttered trial and resolution of the case. Its main objective is to simplify, abbreviate and expedite the trial,
credit line and a P1.5 million domestic letter of credit and trust receipt to petitioner Interlining Corporation for the importation of or totally dispense with it,[8] as in the case at bar.
raw materials for its business. A month later, individual petitioners Pablo Gonzales, Sr., Elena Tan Chin Sui, Pablo Gonzales, Jr., Prescinding therefrom, it is a basic legal precept that the parties are bound to honor the stipulations they made during the
Thomas Gonzales and Arsenio Gonzales executed an Undertaking of Suretyship agreement binding themselves to guarantee, pre-trial. The issue in the case at bar involves a determination of whether or not the counsel of respondent agreed to stipulate as to
jointly and severally with petitioner corporation, all such amount as may be due to respondent Philtrust by virtue of the availment the release of the individual petitioners from their solidary liability.
of its credit facilities. A careful and thorough review of the records, particularly the pre-trial hearings conducted on March 6, 1989 and April 8,
On numerous occasions, petitioner corporation availed of respondents credit facilities. Partial payments were made by 1991 and the subsequent pleadings in the case, reveals that respondents counsel did not agree to relieve the individual petitioners
petitioner corporation but it failed to pay in full its obligations, which amounted to over P2 million by June 1984, despite repeated of their obligation. A close scrutiny of the transcript of the March 6, 1989 pre-trial conference shows that the parties counsels
demands. merely stated their proposed stipulations. Specifically, the trial judge opened the proceedings on said day by inquiring from the
In July 1984, respondent filed a complaint for collection of a sum of money [1] against petitioner corporation and the counsels of the parties their respective positions on the facts and issues of the case. Both counsels presented their proposed facts
individual petitioners before the Regional Trial Court of Manila. Pre-trial hearings were duly conducted by the trial court. and issues but at no time did they commit themselves to stipulate on any of the matters brought out during said conference.  Nor
On April 7, 1989, the trial court issued its Pre-Trial Conference Order,[2] stating in paragraph 5, under the heading did the trial judge ask any of the counsels whether they agreed to stipulate on any of the matters presented therein.  In fact, what
Stipulations, the following: appears on the March 6, 1989 transcript was a mere enumeration of the proposed stipulations by both counsels, most of which
5. Under the first, second, third and fourth causes of action, defendants Pablo Gonzales, Sr., Elena Tan Chin Siu, Pablo Gonzales, were only copied by the stenographer from the counsels pre-trial briefs. There was no agreement whatsoever on the proposed
Jr., Thomas Gonzales, and Arsenio Gonzales were relieved from their obligations because there was arrangement made facts. This conclusion is further bolstered by the fact that at the continuation of the pre-trial conference, the respondents counsel
between the plaintiff and the defendant corporation. declared that he would not agree to stipulate on the release of the individual petitioners on their solidary liability.[9] Hence, in its
The content of said Order was based on the transcript of the pre-trial conference held on March 6, 1989. 1st Supplemental Pre-Trial Order, dated April 8, 1991, the trial court itself included the solidary liability of the individual
On December 14, 1990, respondents counsel Atty. Eulogio V. Reyes and petitioners counsel Atty. Servando S. Timbol, Jr. petitioners as one of the issues to be resolved in the case.[10] Most importantly, the same issue was repeatedly raised by both
submitted to the trial court a Joint Stipulation of Facts and Motion for Summary Judgment [3] stating therein two (2) issues for parties in subsequent proceedings and pleadings filed in the trial court. In the Joint Stipulation of Facts, dated December 14,
consideration by the trial court, viz: 1990, signed by both counsels for respondent and petitioners and submitted to the trial court, the solidary liability of the
a) whether or not defendants (petitioners herein) can be made jointly or severally liable to the plaintiff (respondent herein) individual petitioners was clearly put in issue. Clearly, the entire pre-trial proceedings undisputably show that the issue as to the
in the amount claimed in the complaint; solidary liability of the individual petitioners should have been properly considered in the resolution of the collection case.
b) whether or not there is novation which had released the individual defendants from their obligations as sureties under the Deed Neither could respondent be faulted for failing to question paragraph 5 of the first pre-trial Order, dated March 6, 1989,
of Undertaking of Suretyship. stating therein the release of the individual petitioners from liability, as the proceedings and pleadings subsequent thereto, filed
On April 8, 1991, the trial court issued its 1st Supplemental Pre-Trial Order.[4] It stated in paragraph III that, as per by both parties, clearly included the issue of solidary liability for resolution of the trial court.  Thus, it came as a surprise for
stipulation of the parties, the same two (2) issues were submitted for resolution. the respondent that the decision rendered by the trial court excluded the individual petitioners from liability, citing as ground
On July 9, 1982, the trial court issued its Decision finding for the respondent. However, it ordered petitioner corporation to therefor the alleged stipulation made by by the respondent in March 1989.
answer solely for its obligation. The trial court absolved the individual petitioners from their joint and solidary liability for the debt IN VIEW WHEREOF, the petition is DISMISSED and the assailed Decision of the Court of Appeals, dated May 12,
of petitioner corporation although there was no novation of the loan contract between the parties. It held that the total liability for 2000, is affirmed in toto. Costs against petitioners.
the obligation was assumed by the petitioner corporation as per the parties stipulation during the April 8, 1991 Pre-Trial SO ORDERED.
Conference, particularly paragraph 5 thereof.
Respondent moved for reconsideration insofar as the trial court absolved the individual petitioners from solidary liability.
When its motion was denied, respondent sought recourse before the Court of Appeals.
In its Decision,[5] dated May 12, 2000, the Court of Appeals found for the respondent. It held that the Deed of Undertaking
of Suretyship was not abrogated and remained in full force and effect. It also found that as the respondent did not stipulate on the
exclusion of the solidary liability issue, the individual petitioners should be held solidarily liable with petitioner corporation for the
amount adjudged by the trial court.
When petitioners motion for reconsideration was denied, they filed the present appeal, raising the following issues:
I
THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN DISREGARDING THE STIPULATIONS
AGREED UPON IN THE PRE-TRIAL ORDER OF THE REGIONAL TRIAL COURT OF MANILA DATED
MARCH 6, 1989.
II
THE COURT OF APPEALS COMMITED AN ERROR OF LAW IN DISREGARDING THE AFFIRMATION
OF THE PRE-TRIAL ORDER DATED MARCH 6, 1989 MADE BY RESPONDENTS COUNSEL.
III
THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN DISREGARDING THE FAILURE OF RESPONDENTS
COUNSEL TO CONTROVERT THE PRE-TRIAL ORDER DATED MARCH 6, 1989 UP TO THE TIME THAT THE CASE
WAS FINALLY DECIDED BY THE REGIONAL TRIAL COURT OF MANILA.
We shall discuss the issues jointly.
Petitioners insist that as per the records, respondents counsel agreed in the stipulation of facts contained in the Pre-Trial
Conference Order, dated March 6, 1989, particularly paragraph 5 thereof, that the individual petitioners would be relieved from
their solidary obligations. Petitioners also charge that the contents of this Pre-Trial Conference Order were confirmed by
respondents counsel during the April 8, 1991 pre-trial hearing of the case. [6] Hence, petitioners contend that respondent should be
held as bound by said agreement and the Court of Appeals erred in disregarding this stipulation.  Petitioners likewise point out that
from the date of the issuance of the pre-trial order on March 6, 1989 until the promulgation of the trial courts decision on July 9,
 HIRD DIVISION On July 19, 2002, respondents Lazaro filed a Cautionary Answer with Manifestation and a Motion to File a
  Supplemental/Amended Answer. On August 5, 2002, petitioners received a copy of the cautionary answer, pertinent portions of
  which are quoted as follows
JAZMIN L. ESPIRITU and PORFIRIO LAZARO, JR., G.R. No. 181020  
Petitioners,   3. Undersigned counsel, on account of his heavy workload in equally important cases,
  Present: would be needing more time to file herein defendants Answer. In the meantime however, by way of a
    Cautionary Answer, herein defendants hereby manifest that they are adopting subject to further
- versus - CORONA, J., qualification part of co-defendant Sisons Answer dated March 29, 2000, more
  Chairperson, particularly, portions of sub-headings I. Denials and Admissions, II. Special and Affirmative
  CHICO-NAZARIO, Defenses and III. Counterclaim which are personal, relevant and pertinent to their defense.
VLADIMIR G. LAZARO, MA. CORAZON S. LAZARO, MA. ESPERENZA S. VELASCO, JR., 4. Nonetheless, herein defendants reserve their right to file a Supplemental/Amended
LAZARO, VLADI MIGUEL S. LAZARO, CHINA BANKING NACHURA, and Answer in due time;
CORPORATION, and WINIFRIDA B. SISON, PERALTA, JJ.  
Respondents.   WHEREFORE, in view of the foregoing, it is respectfully prayed that the instant Cautionary
    Answer with Manifestation be admitted and herein defendants given a twenty (20)-day period within
Promulgated: which to file a Supplemental/Amended Answer.[11]
   
November 25, 2009  
  On July 24, 2003, the trial court dismissed the complaint due to petitioners failure to prosecute for an unreasonable
x------------------------------------------------------------------------------------x length of time. The court noted that despite the lapse of time since respondents filed a cautionary answer, petitioners failed to file a
  motion to set the case for pre-trial, which under Section 1, Rule 18 of the 1997 Rules of Civil Procedure is petitioners duty as
DECISION plaintiffs.[12] The trial court denied petitioners Motion for Reconsideration of the said order.[13]
   
NACHURA, J.: On June 29, 2007, the CA affirmed the dismissal of the case.[14] Citing Olave v. Mistas,[15] the CA stressed that it is
  plaintiffs duty to promptly set the case for pre-trial, and that failure to do so may result in the dismissal of the case. According to
This petition for review on certiorari assails the June 29, 2007 Decision [1] of the Court of Appeals (CA), which the CA, petitioners should not have waited for a supplemental answer or an order by the trial court and done nothing for more than
affirmed the dismissal of the case for failure to prosecute. Likewise assailed in this petition is its Resolution dated December 19, 11 months from the receipt of the last pleading.
2007, which denied the motion for reconsideration of the said decision.  
  The CA also denied petitioners motion for reconsideration of the said decision;[16] hence, this petition.
On June 29, 1998, petitioners Jazmin L. Espiritu and Porfirio Lazaro, Jr., together with a certain Mariquit Lazaro,  
filed a complaint for recovery of personal property with damages and preliminary attachment against respondents, Vladimir G. Petitioners assign the following errors to the CA:
Lazaro, Ma. Corazon S. Lazaro, Ma. Esperanza S. Lazaro, Vladi Miguel S. Lazaro, China Banking Corporation, and Winifrida B.  
Sison. Petitioners, Mariquit Lazaro and respondent Vladimir Lazaro are the legitimate children and only surviving heirs of the late A.      THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN APPLYING THE RULING
Porfirio Lazaro, Sr. who died on March 13, 1998. Respondent Ma. Corazon Lazaro is the wife of Vladimir Lazaro, while OF THE SUPREME COURT IN OLAVE vs. MISTAS [TO THE] CASE.
respondents Ma. Esperanza Lazaro and Vladi Miguel Lazaro are their children.  
  B.      THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT RULING THAT THE
The complaint alleged that (1) the deceased had two dollar time deposit accounts with respondent China Banking CASE WAS NOT YET RIPE FOR PRE-TRIAL.
Corporation in the amounts of US$117,859.99 and US$163,492.32; (2) petitioners demanded from respondents Vladimir and Ma.  
Corazon Lazaro their share in the said amounts but the latter told them that the deposits had already been transferred to their C.      THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE
children; (3) they requested respondent Winifrida Sison, branch manager of the bank, to freeze the time deposit accounts in the APPEAL BASED ON SECTION 3, RULE 17 OF THE RULES OF COURT.
names of said children; (4) respondent Sison subsequently replied that there were no existing accounts under the childrens names;  
(5) petitioners then requested respondent Sison to apprise them of the status of the two dollar time deposit accounts; and (6) D.      THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT TAKING
respondent Sison refused to comply, saying that, unless there is a court order, she may not give out the details of the time deposit COGNIZANCE OF SECTION 1.2 OF A.M. NO. 03-1-09-SC, IN EFFECT SINCE AUGUST 16,
accounts because of the Bank Secrecy Law. Petitioners prayed that respondents be ordered to pay them their three-fourths share in 2004.[17]
the time deposit accounts or US$211,014.23, with interest, P1,000,000.00 as moral damages, P1,000,000.00 as exemplary  
damages, P300,000.00 as attorneys fees and costs of the suit.[2]  
  On the grounds of equity, due process and fair play, petitioners urge the Court to set aside technicalities and to allow
The trial court granted the prayer for preliminary attachment and the corresponding writ was subsequently issued after the case to proceed and be resolved on the merits. They, likewise, point out that, in accordance with the Courts pronouncement
petitioners posted a bond. Five real properties were levied upon. [3] Respondents Lazaro filed an urgent motion to set aside and in Olave v. Mistas,[18] dismissal of their case is not warranted since no substantial prejudice was caused to respondents, and strong
discharge the attachment,[4] which was opposed by petitioners. They, likewise, filed a motion to dismiss[5] the complaint for failure and compelling reasons justify a liberal application of the rule. They explain that the reason why they did not move to set the case
to state a cause of action. Respondent Sison also filed a motion to dismiss[6] on the same ground. for pre-trial was that the case was not yet ripe for it. They point out that the trial court had not yet resolved respondents motion for
  extension to file a supplemental answer and respondents had not yet filed their supplemental answer. Petitioners stress that the
On February 12, 1999, the trial court denied the motion to discharge the attachment and the two motions to dismiss delay was, therefore, not due to their inaction; hence, the dismissal of their case was not justified.
and directed respondents to file their answer. Respondents Lazaro and Sison filed their respective motions for reconsideration,  
[7]
 which were again opposed by petitioners. [8] In an Omnibus Order dated January 20, 2000, the trial court partially granted Further, petitioners cite A.M. No. 03-1-09-SC (Guidelines to be Observed by Trial Court Judges and Clerks of Court
respondents Lazaros prayer for a partial discharge of their attached properties. in the Conduct of Pre-Trial and Use of Deposition-Discovery Measures) which allegedly provides that it is not solely the duty of
  the plaintiff to set the case for pre-trial as the Clerk of Court is likewise directed to issue the notice of pre-trial should the plaintiff
On March 31, 2000, respondent Sison filed her Answer with Counterclaim and Crossclaim.[9] fail to do so.
   
Respondents Lazaro questioned the February 12, 1999 Order in a petition for certiorari filed with the CA. When the The petition has no merit.
latter did not rule favorably, they elevated the case to this Court. In a Resolution dated January 21, 2002, this Court denied the  
petition. The Resolution became final and executory on July 17, 2002.[10] In every action, the plaintiffs are duty-bound to prosecute their case with utmost diligence and with reasonable
  dispatch to enable them to obtain the relief prayed for and, at the same time, to minimize the clogging of the court dockets.
[19]
 Parallel to this is the defendants right to have a speedy disposition of the case filed against them, essentially, to prevent their
defenses from being impaired.
  
Since the incidents occurred prior to the effectivity of A.M. No. 03-1-09-SC on August 16, 2004, the guidelines stated
therein should not be made applicable to this case. Instead, the prevailing rule and jurisprudence at that time should be utilized in
resolving the case.
 
Section 1 of Rule 18 of the Rules of Court imposes upon the plaintiff the duty to set the case for pre-trial after the last
pleading is served and filed. Under Section 3 of Rule 17, failure to comply with the said duty makes the case susceptible to
dismissal for failure to prosecute for an unreasonable length of time or failure to comply with the rules.
 
Respondents Lazaro filed the Cautionary Answer with Manifestation and Motion to File a Supplemental/Amended
Answer on July 19, 2002, a copy of which was received by petitioners on August 5, 2002. Believing that the pending motion had
to be resolved first, petitioners waited for the court to act on the motion to file a supplemental answer. Despite the lapse of almost
one year, petitioners kept on waiting, without doing anything to stir the court into action.
 
In any case, petitioners should not have waited for the court to act on the motion to file a supplemental answer or for
the defendants to file a supplemental answer. As previously stated, the rule clearly states that the case must be set for pre-trial after
the last pleading is served and filed. Since respondents already filed a cautionary answer and [petitioners did not file any reply to
it] the case was already ripe for pre-trial.
 
It bears stressing that the sanction of dismissal may be imposed even absent any allegation and proof of the plaintiffs
lack of interest to prosecute the action, or of any prejudice to the defendant resulting from the failure of the plaintiff to comply
with the rules.[20] The failure of the plaintiff to prosecute the action without any justifiable cause within a reasonable period of time
will give rise to the presumption that he is no longer interested in obtaining the relief prayed for.[21]
 
In this case, there was no justifiable reason for petitioners failure to file a motion to set the case for pre-trial.
Petitioners stubborn insistence that the case was not yet ripe for pre-trial is erroneous. Although petitioners state that there are
strong and compelling reasons justifying a liberal application of the rule, the Court finds none in this case. The burden to show that
there are compelling reasons that would make a dismissal of the case unjustified is on petitioners, and they have not adduced any
such compelling reason.
 
WHEREFORE, the petition is DENIED DUE COURSE. The Court of Appeals Decision dated June 29, 2007 and
Resolution dated December 19, 2007 are AFFIRMED.
 
SO ORDERED.
 respondent; and that justice would be better served if the case is remanded to the trial court for further proceedings and final
  disposition.
ZENAIDA POLANCO, CARLOS G.R. No. 182426  
DE JESUS, AVELINO DE JESUS, On March 28, 2008, the Court of Appeals denied petitioners Motion for Reconsideration; hence, this petition based on
BABY DE JESUS, LUZ DE JESUS, the following ground:
and DEMETRIO SANTOS,  
Petitioners, Present: WHETHER OR NOT THE DECISION OF THE HONORABLE COURT OF APPEALS IN C.A.-G.R.
Ynares-Santiago, J. (Chairperson), CV No. 75079, NULLIFYING AND/OR REVERSING AND/OR SETTING ASIDE THE ORDERS
- versus - Austria-Martinez, DATED JANUARY 9, 2002 AND MAY 8, 2002 ISSUED BY THE RTC-BULACAN IN CIVIL CASE
Chico-Nazario, No. 542-M-00, IS CONTRARY TO LAW AND PREVAILING JURISPRUDENCE.
Nachura, and  
Peralta, JJ. Petitioners allege that respondent failed to comply with the mandate of the 1997 Rules of Civil Procedure to promptly
CARMEN CRUZ, represented by her move for the setting of the case for pre-trial; that heavy pressures of work does not justify the failure to move for the setting of the
attorney-in-fact, VIRGILIO CRUZ, Promulgated: case for pre-trial; that the allegations in the Complaint which pertain to respondents status as a tenant of Elena C. De Jesus amount
Respondent. to forum shopping that would extremely prejudice them. Petitioners thus pray for the nullification of the Decision and Resolution
February 13, 2009 of the Court of Appeals and the affirmation of the dismissal of the Complaint by the trial court.
x ---------------------------------------------------------------------------------------- x  
  The petition lacks merit.
DECISION  
  The Court of Appeals correctly noted that petitioners raised the matter of respondents alleged forum shopping for the
YNARES-SANTIAGO, J.: first time only in their Motion for Reconsideration. Issues not previously ventilated cannot be raised for the first time on appeal,
[18]
   much less when first raised in the motion for reconsideration of a decision of the appellate court.
   
This Petition for Review on Certiorari[1] assails the August 28, 2007 Decision[2] of the Court of Appeals in CA-G.R. CV No. At any rate, this Court does not find respondents allegations in her complaint in Civil Case No. 542-M-00 to be constitutive of the
75079, setting aside the Order[3] of Branch 17 of the Regional Trial Court of Malolos in Civil Case No. 542-M-2000, which elements of forum-shopping. Respondent merely described herself as a tenant of petitioners and mentioned that there was an
dismissed respondents Complaint[4] for failure to prosecute. Also assailed is the March 28, 2008 Resolution [5] denying petitioners unlawful detainer case[19] involving the parcel of land which is also involved in the instant civil case for damages.
Motion for Reconsideration.[6]  
  There is forum-shopping when as a result of an adverse decision in one forum, or in anticipation thereof, a party seeks
The facts are as follows: a favorable opinion in another forum through means other than appeal or certiorari. Forum-shopping exists when two or more
  actions involve the same transactions, essential facts, and circumstances; and raise identical causes of action, subject matter, and
Respondent Carmen Cruz, through her attorney-in-fact, Virgilio Cruz, filed a complaint for damages [7] against petitioners for issues. Still another test of forum-shopping is when the elements of litis pendencia are present or where a final judgment in one
allegedly destroying her palay crops. While admitting that petitioners own the agricultural land she tilled, respondent claimed she case will amount to res judicata in another whether in the two or more pending cases, there is an identity of (a) parties (or at least
was a lawful tenant thereof and had been in actual possession when petitioners maliciously filled so with soil and palay husk on such parties as represent the same interests in both actions), (b) rights or causes of action, and (c) reliefs sought.[20]
July 1 and 2, 2000. Respondent prayed that petitioners be held liable for actual damages, moral damages, exemplary damages,  
litigation expenses and attorneys fees, and costs of the suit. Although there is an identity of some of the parties in the instant case for damages and the unlawful detainer case,
  there is, however, no identity of reliefs prayed for.  The former is for recovery of damages allegedly caused by petitioners acts on
Petitioners filed a Motion to Dismiss, [8] which was denied by the trial court in an Order[9] dated December 4, 2000. It held that it respondents palay crops; while the latter case involved possessory and tenancy rights of respondent. As such, respondent did not
has jurisdiction over the case because the allegations in the Complaint made a claim for damages, and not an agrarian dispute violate the rule on forum-shopping. 
which should be referred to the Department of Agrarian Reform Adjudication Board (DARAB); and that the Complaint was  
properly filed because the Certification of Non-forum Shopping was signed by respondents attorney-in-fact. Section 1, Rule 18 of the 1997 Rules of Civil Procedure imposes upon the plaintiff the duty to promptly move ex
  parte to have the case set for pre-trial after the last pleading has been served and filed. Moreover, Section 3, Rule 17[21] provides
Petitioners simultaneously filed an Answer[10] to the complaint and a Motion for Reconsideration [11] of the December 4, 2000 that failure on the part of the plaintiff to comply with said duty without any justifiable cause may result to the dismissal of the
Order. However, the court a quo denied the motion for lack of merit in an Order[12] dated September 10, 2001. On January 9, 2002, complaint for failure to prosecute his action for an unreasonable length of time or failure to comply with the rules of procedure.
the trial court issued an Order[13] dismissing the case due to respondents failure to prosecute.  
  It must be stressed that even if the plaintiff fails to promptly move for pre-trial without any justifiable cause for such
With the denial[14] of her Motion for Reconsideration, [15] respondent interposed an appeal to the Court of Appeals delay, the extreme sanction of dismissal of the complaint might not be warranted if no substantial prejudice would be caused to the
which rendered the assailed Decision dated August 28, 2007, the dispositive portion of which states: defendant, and there are special and compelling reasons which would make the strict application of the rule clearly unjustified.[22]
   
WHEREFORE, the appeal is hereby GRANTED. Accordingly, the Order, dated January 9, In the instant case, the Court of Appeals correctly held that the dismissal of respondents complaint is too severe a
2002, of the RTC [Branch 17, Malolos] is hereby REVERSED and SET ASIDE. Plaintiff-appellants sanction for her failure to file a motion to set the case for pre-trial.  It must be pointed out that respondent prosecuted her action
Complaint is hereby REINSTATED and the case is hereby REMANDED to the RTC [Branch 17, with utmost diligence and with reasonable dispatch since filing the complaint she filed an opposition to petitioners motion to
Malolos] for further proceedings. dismiss the complaint; a comment to petitioners motion for reconsideration of the December 4, 2000 Order of the trial court; and
  an Answer to Counterclaim of petitioners. When the trial court issued an order dismissing the case, respondent filed without delay
SO ORDERED.[16] a motion for reconsideration; and upon its denial, she immediately filed a Notice of Appeal. [23] Moreover, contrary to petitioners
  claim that respondent was silent for one year since she filed her Answer to Counterclaim until the trial courts dismissal order,
[24]
The Court of Appeals ruled that the trial court erred in finding that the parties failed to take necessary action regarding the case  records show that between said period, both parties and the trial court were threshing out petitioners motion for reconsideration
because the records plainly show that petitioners filed an Answer to the complaint, while respondent filed an Opposition to the of the December 4, 2000 Order.
Motion for Reconsideration with Manifestation Re: Answer of Defendants.[17]  
  While heavy pressures of work was not considered a persuasive reason to justify the failure to set the case for pre-trial
With regard to the order of the trial court dismissing the complaint on the ground of failure to prosecute, the appellate in Olave v. Mistas,[25] however, unlike the respondents in the said case, herein respondent never failed to comply with the Rules of
court held that the previous acts of respondent do not manifest lack of interest to prosecute the case; that since filing the Court or any order of the trial court at any other time. Failing to file a motion to set the case for pre-trial was her first and only
Complaint, respondent filed an Opposition to petitioners Motion to Dismiss, an Answer to petitioners counterclaim, and a technical lapse during the entire proceedings. Neither has she manifested an evident pattern or a scheme to delay the disposition of
Comment to petitioners Motion for Reconsideration; that respondent did not ignore petitioners Motion to Dismiss nor did she the case nor a wanton failure to observe the mandatory requirement of the rules. Accordingly, the ends of justice and fairness
repeatedly fail to appear before the court; that no substantial prejudice would be caused to petitioners and that strict application of would best be served if the parties are given the full opportunity to litigate their claims and the real issues involved in the case are
the rule on dismissal is unjustified considering the absence of pattern or scheme to delay the disposition of the case on the part of
threshed out in a full-blown trial. Besides, petitioners would not be prejudiced should the case proceed as they are not stripped of
any affirmative defenses nor deprived of due process of law.
 
This is not to say that adherence to the Rules could be dispensed with. However, exigencies and situations might
occasionally demand flexibility in their application. [26] Indeed, on several occasions, the Court relaxed the rigid application of the
rules of procedure to afford the parties opportunity to fully ventilate the merits of their cases.  This is in line with the time-honored
principle that cases should be decided only after giving all parties the chance to argue their causes and defenses.  Technicality and
procedural imperfection should thus not serve as basis of decisions.[27]
 
Finally, A.M. No. 03-1-09-SC or the new Guidelines To Be Observed By Trial Court Judges And Clerks Of Court In
The Conduct Of Pre-Trial And Use Of Deposition-Discovery Measures, which took effect on August 16, 2004, aims to abbreviate
court proceedings, ensure prompt disposition of cases and decongest court dockets, and to further implement the pre-trial
guidelines laid down in Administrative Circular No. 3-99[28] dated January 15, 1999. A.M. No. 03-1-09-SC states that: Within five
(5) days from date of filing of the reply, [29] the plaintiff must promptly move ex parte that the case be set for pre-trial conference.
[30]
 If the plaintiff fails to file said motion within the given period, the Branch COC shall issue a notice of pre-trial.  As such, the
clerk of court of Branch 17 of the Regional Trial Court of Malolos should issue a notice of pre-trial to the parties and set the case
for pre-trial.
 
WHEREFORE, the Petition for Review on Certiorari is DENIED. The August 28, 2007 Decision of the Court of
Appeals in CA-G.R. CV No. 75079, setting aside the Order of Branch 17 of the Regional Trial Court of Malolos dismissing Civil
Case No. 542-M-2000 for respondents failure to prosecute, and its March 28, 2008 Resolution denying petitioners Motion for
Reconsideration are AFFIRMED. The clerk of court of Branch 17 of the Regional Trial Court of Malolos is DIRECTED to issue
a notice of pre-trial to the parties.
 
SO ORDERED.
 
SECOND DIVISION Petitioner-defendant Madrid, for his part, claimed that he started occupying a portion of the properties in 1974, and
  constructed a house on this portion in 1989 with the permission of Bernardo, the son of Gregorio Miranda.
   
FRANCISCO MADRID and G.R. No. 150887 On the basis of the length of their claimed occupation of the properties, the petitioners-defendants likewise invoked
EDGARDO BERNARDO,   Section 6 of Presidential Decree No. 1517 (PD 1517), also known as the Urban Land Reform Law, which provides that legitimate
Petitioners, Present: tenants of 10 year or more, who have built their homes on these lands and who have continuously resided thereon for the past ten
    years, shall not be dispossessed of their occupied lands and shall be allowed the right of first refusal to purchase these lands within
*
  CARPIO-MORALES, J., a reasonable time and at reasonable prices.
-   versus - Acting Chairperson,  
**
  CARPIO, THE RTC RULING
***
  CHICO-NAZARIO,  
****
SPOUSES BONIFACIO MAPOYand FELICIDAD MARTINEZ, LEONARDO-DE CASTRO, and On July 21, 1994, the RTC-Manila, Branch 3, rendered its decision,[5] the dispositive portion of which states:
Respondents. BRION, JJ.  
  WHEREFORE, judgment is rendered, ordering the defendants and all persons claiming
  rights thereto to vacate the premises located at the corner of Ma. Clara and Craig Streets, Sampaloc,
  Manila, evidenced by TCT No. 130064 and 130065 and restore the same to the plaintiffs. The
Promulgated: defendants are hereby ordered to pay plaintiff the sum of P10,000.00 as attorneys fees and the sum
  of P1,000.00 as reasonable rental for the use and occupation of the premises beginning from the filing
August 14, 2009 of this complaint until they vacated the premises.
x --------------------------------------------------------------------------------------- x  
  SO ORDERED.[6]
   
DECISION The RTC upheld the respondents-plaintiffs right of possession as registered owners of the properties. It found no merit
  in the petitioners-defendants claims of ownership via an oral sale given the absence of any public instrument or at least a note or
BRION, J.: memorandum supporting their claims. The RTC also found the petitioners-defendants invocation of PD 1517 futile, since its
  Section 6 refers to a legitimate tenant who has legally occupied the lands by contract; the petitioners-defendants are mere squatters.
Before us is the Petition for Review on Certiorari[1] filed by petitioners Francisco Madrid and Edgardo Bernardo  
(petitioners-defendants) to reverse and set aside the Decision [2] dated July 16, 2001 and Resolution [3] dated November 19, 2001 of The petitioners-defendants elevated the RTC decision to the CA via an ordinary appeal under Rule 41 of the Rules of
the Former Second Division of the Court of Appeals (CA) in CA-G.R. CV No. 47691 entitled Spouses Bonifacio Mapoy and Court. The Mirandas did not join them, and thus failed to file a timely appeal. The petitioners-defendants objected to the RTCs
Felicidad Martinez v. Edgardo Bernardo and Francisco Madrid. ruling that the sale or promise of sale should appear in a public instrument, or at least in a note or memorandum, to be binding and
  enforceable. They argued that the RTC failed to consider the respondents-plaintiffs bad faith in acquiring the properties since they
FACTUAL BACKGROUND knew of the defects in the title of the owner. They further argued that the CA should have noted Gregorio Mirandas occupancy
  since 1948, Bernardos since 1966 and Madrids since 1973. The petitioners-defendants further submitted that their continuous
The facts of the case, based on the records, are summarized below. residence for more than ten (10) years entitled them to the rights and privileges granted by PD 1517. They also argued that the RTC
  should not have applied the pre-trial order to them, since they had not then been served with summons and were not present during
The spouses Bonifacio and Felicidad Mapoy (respondents-plaintiffs) are the absolute owners of two parcels of the pre-trial.
land (the properties) known as Lot Nos. 79 and 80 of Block No. 27 of the Rizal Park Subdivision, located at No. 1400 Craig  
Street corner Maria Clara Street, Sampaloc, Manila, under Transfer Certificate of Title (TCT) Nos. 130064 and 130065 of the THE CA RULING
Registry of Deeds of Manila. The properties have a combined area of two-hundred seventy (270) square meters.  
  The CA dismissed the appeal in its decision[7] of July 16, 2001, affirming as a consequence the RTC decision of July
On April 4, 1988, the respondents-plaintiffs sought to recover possession of the properties through an accion 21, 1994. The CA held that the certificate of title in the name of the respondents-plaintiffs serves as evidence of an indefeasible and
publiciana filed with the Regional Trial Court (RTC) of Manila[4] against Gregorio Miranda and his family (Mirandas) and two incontrovertible title to the properties. The CA found that the petitioners-defendants never submitted any proof of ownership. Also,
other unnamed defendants. After the pre-trial conference, the unnamed defendants were identified as the present petitioners and their reliance on their alleged continuous occupation is misplaced since petitioner-defendant Bernardos occupation in the concept
summons were duly served on them. These defendants are referred to in this Decision as the petitioners-defendants. The Mirandas of owner started only in 1975 when Antonio allegedly gave him a portion of the properties as a gift, while petitioner-defendant
are no longer parties to the present case; they did not appeal the lower court decision to the CA. Madrids occupation could not have been in the concept of an owner, as he recognized Gregorio Miranda as the owner and paid him
  rents. The CA noted that the petitioners-defendants are not covered by PD 1517 because the law does not apply to occupants whose
The respondents-plaintiffs alleged that they acquired the properties from the spouses Procopio and Encarnacion possession is by the owners mere tolerance. The CA also observed that the RTC did not err in applying the pre-trial order to the
Castelo under a Deed of Absolute Sale dated June 20, 1978. They merely tolerated the petitioners-defendants continued occupancy petitioners-defendants because they derive the right of possession from the principal defendants, the Mirandas, who were duly
and possession until their possession became illegal when demands to vacate the properties were made. Despite the demands, the represented at the pre-trial; they waived their right to pre-trial by failing to move that one be held.
petitioners-defendants continued to occupy and unlawfully withhold possession of the properties from the respondents-plaintiffs, to  
their damage and prejudice. Efforts to amicably settle the case proved futile, leaving the respondents-plaintiffs no recourse but to The petitioners-defendants moved[8] but failed[9] to secure a reconsideration of the CA decision; hence, they came to us
file a complaint for ejectment which the lower court dismissed because the respondents-plaintiffs should have filed an accion through the present petition.
publiciana. Thus, they filed their complaint for accion publiciana, praying for recovery of possession of the properties and the  
payment of P1,000.00 as monthly rental for the use of the properties from January 1987 until the petitioners-defendants vacate the THE PETITION and THE PARTIES POSITIONS
properties, plus P50,000.00 as moral and exemplary damages, and P30,000.00 as attorneys fees.  
The Mirandas countered that Gregorio Miranda owned the properties by virtue of an oral sale made in his favor by the The petitioners-defendants essentially reiterate the issues they raised before the CA, i.e., that the ruling court failed to
original owner, Vivencio Antonio (Antonio). They claimed that in 1948, Gregorio Miranda was Antonios carpenter, and they had a consider: (1) the respondents-plaintiffs bad faith in the acquisition of the properties; (2) the occupancy of Gregorio Miranda since
verbal contract for Miranda to stay in, develop, fix and guard the properties; in 1972, Antonio gave the properties to Gregorio 1948, Bernardos since 1966, and Madrids since 1973; and, (3) petitioners-defendants continuous residence for more than ten (10)
Miranda in consideration of his more than twenty (20) years of loyal service. years entitling them to the rights and privileges granted by PD 1517. They also contend that the principle of indefeasibility of the
  certificate of title should not apply in this case because fraud attended the respondents-plaintiffs acquisition of title. They again
Petitioner-defendant Bernardo also asserted ownership over the portion he occupies based on an oral sale to him by point out that the pre-trial order should not have been applied to them since they were not present during the pre-trial conference.
Antonio. He alleged that he became a ward of Gregorio Miranda in 1965 when he was 10 years old and helped in the  
development of the properties; he helped construct a bodega and a house within the properties. He and Antonio met in 1975, and The respondents-plaintiffs counter-argue that the issues raised by the petitioners-defendants are essentially factual in
Antonio promised that the bodega would be given to him in gratitude for his work. nature and all have been well-considered and adequately refuted in the challenged CA decision.
   
 OUR RULING To qualify for protection under PD 1517 and avail of the rights and privileges granted by the said decree, the claimant
  must be: (1) a legitimate tenant of the land for ten (10) years or more; (2) must have built his home on the land by contract; and, (3)
We resolve to deny the petition for lack of merit. has resided continuously for the last ten (10) years. The tenant covered by PD 1517 is, as defined under Section 3(f) thereof, "the
  rightful occupant of land and its structures, but does not include those whose presence on the land is merely tolerated and without
  the benefit of contract, those who enter the land by force or deceit, or those whose possession is under litigation."
   
a.     Accion Publiciana and Ownership Stated differently, those whose possession or occupation of land is devoid of any legal authority or those whose
  contracts of lease are already terminated, or had already expired, or whose possession is under litigation are not considered
Accion publiciana, also known as accion plenaria de posesion,[10] is an ordinary civil proceeding to determine the "tenants" under the decree. Conversely, a legitimate tenant is one who is not a usurper or an occupant by tolerance.[25] The
better right of possession of realty independently of title. [11] It refers to an ejectment suit filed after the expiration of one year from petitioners-defendants whose occupation has been merely by the owners tolerance obviously fall outside the coverage of PD 1517
the accrual of the cause of action or from the unlawful withholding of possession of the realty.[12] and cannot seek its protection.
   
The objective of the plaintiffs in accion publiciana is to recover possession only, not ownership.[13] However, where e. The Pre-Trial-based Objection
the parties raise the issue of ownership, the courts may pass upon the issue to determine who between or among the parties has the  
right to possess the property. This adjudication, however, is not a final and binding determination of the issue of ownership; it is Without doubt, the petitioners-defendants, having been belatedly served summons and brought into the case, were
only for the purpose of resolving the issue of possession, where the issue of ownership is inseparably linked to the issue of entitled to a pre-trial as ordained by Section 2, Rule 18 of the Rules of Court. Unless substantial prejudice is shown, however, the
possession. The adjudication of the issue of ownership, being provisional, is not a bar to an action between the same parties trial courts failure to schedule a case for new trial does not render the proceedings illegal or void  ab initio.[26] Where, as in this case,
involving title to the property.[14] The adjudication, in short, is not conclusive on the issue of ownership.[15] the trial proceeded without any objection on the part of the petitioners-defendants by their failure to bring the matter to the attention
  of the RTC, the petitioners-defendants are deemed to have effectively forfeited a procedural right granted them under the Rules.
In the present case, both the petitioners-defendants and the respondents-plaintiffs raised the issue of ownership. The Issues raised for the first time on appeal and not raised timely in the proceedings in the lower court are barred by estoppel. [27] Points
petitioners-defendants claim ownership based on the oral sale to and occupation by Gregorio Miranda, their predecessor-in-interest, of law, theories, issues and arguments not brought to the attention of the trial court ought not to be considered by a reviewing court,
since 1948. On the other hand, the respondents-plaintiffs claim that they are the owners, and their ownership is evidenced by the as these cannot be raised for the first time on appeal. [28] To consider the alleged facts and arguments raised belatedly would amount
TCTs in their names. Under this legal situation, resolution of these conflicting claims will depend on the weight of the parties' to trampling on the basic principles of fair play, justice, and due process.
respective evidence, i.e., whose evidence deserves more weight.  
  In arriving at this conclusion, we considered, as the CA did, that the petitioners-defendants anchored their right to
b. Findings of Fact Below Final and Conclusive possess the property on the defenses raised by the original defendant, Gregorio Miranda, their predecessor-in-interest. While
  belatedly summoned, the petitioners-defendants did not raise a substantial matter in their answer differently from those propounded
A weighing of evidence necessarily involves the consideration of factual issues an exercise that is not appropriate for by Gregorio Miranda; they merely echoed Mirandas positions and arguments. Thus, no prejudice could have resulted to the
the Rule 45 petition that the petitioners-defendants filed; under the Rules of Court, the parties may raise only questions of law petitioners-defendants, especially after they entered trial and had the opportunity to fully ventilate their positions.
under Rule 45, as the Supreme Court is not a trier of facts. [16] As a rule, we are not duty-bound to again analyze and weigh the  
evidence introduced and considered in the tribunals below.[17] This is particularly true where the CA has affirmed the trial court's f. Attorneys Fees
factual findings, as in the present case. These trial court findings, when affirmed by the CA, are final and conclusive and are not  
open for our review on appeal.[18] As a general rule, the appellate court may only pass upon errors assigned by the parties.  By way of exception, even
  unassigned errors may be taken up by the court on appeal if they involve (1) errors affecting the lower court's jurisdiction over the
In the present case, both the RTC and the CA gave more weight to the certificate of title the respondents-plaintiffs subject matter, (2) plain errors not specified, and (3) clerical errors. [29] In the present case, we note that the award of attorney's fees
presented, and likewise found that the petitioners-defendants' possession of the properties was merely upon the respondents- appears only in the dispositive portion of the RTC decision without any elaboration, explanation, and justification. The award stood
plaintiffs tolerance. We see no reason to doubt or question the validity of these findings and thus recognize their finality. there all by itself. We view this as a plain legal error by the RTC that must be rectified.
   
As a matter of law, a Torrens Certificate of Title is evidence of indefeasible title of property in favor of the person in Article 2208 of the Civil Code enumerates the instances justifying the grant of attorneys fees; in all cases, the award
whose name the title appears. The title holder is entitled to all the attributes of ownership of the property, including possession, must be reasonable, just and equitable. Attorney's fees as part of damages are not meant to enrich the winning party at the expense
subject only to limits imposed by law. [19] In the present case, the respondents-plaintiffs are indisputably the holders of a certificate of the losing litigant. They are not awarded every time a party prevails in a suit because of the policy that no premium should be
of title against which the petitioners-defendants claim of oral sale cannot prevail. As registered titleholders, they are entitled to placed on the right to litigate.[30] The award of attorney's fees is the exception rather than the general rule. Thus, findings reflecting
possession of the properties. the conditions imposed by Article 2208 are necessary to justify an award; attorney's fees mentioned only in the dispositive portion
  of the decision without any prior justification in the body of the decision is a baseless award that must be struck down.[31]
c. Claim of Fraud a Prohibited Collateral Attack  
 
WHEREFORE, premises considered, we here DENY the petition for lack of any reversible error, and
Registration of land under the Torrens system, aside from perfecting the title and rendering it indefeasible after the consequently AFFIRM the decision of July 16, 2001 of the Court of Appeals in CA-G.R. CV No. 47691, with
lapse of the period allowed by law, also renders the title immune from collateral attack. [20] A collateral attack transpires when, in the MODIFICATION that the attorney's fees awarded to respondents-plaintiffs are hereby DELETED. Costs against the
another action to obtain a different relief and as an incident of the present action, an attack is made against the judgment granting petitioners-defendants.
the title.[21] This manner of attack is to be distinguished from a direct attack against a judgment granting the title, through an action  
whose main objective is to annul, set aside, or enjoin the enforcement of such judgment if not yet implemented, or to seek recovery SO ORDERED.
if the property titled under the judgment had been disposed of. [22] To permit a collateral attack on respondents-plaintiffs title is to  
water down the integrity and guaranteed legal indefeasibility of a Torrens title.[23]
 
The petitioners-defendants attack on the validity of respondents-plaintiffs title, by claiming that fraud attended its
acquisition, is a collateral attack on the title. It is an attack incidental to their quest to defend their possession of the properties in an
"accion publiciana," not in a direct action whose main objective is to impugn the validity of the judgment granting the title. [24] This
is the attack that possession of a Torrens Title specifically guards against; hence, we cannot entertain, much less accord credit to,
the petitioners-defendants claim of fraud to impugn the validity of the respondents-plaintiffs title to their property.
 
 
 
d. Claimed Protection under PD 1517
 
 FIRST DIVISION On May 17, 1993, the children of the siblings of Eustaquia who predeceased her filed a complaint with the Regional
  Trial Court (RTC) of Quezon City for partition and accounting with receivership against Magno Sarreal and private respondents
HEIRS OF VICENTE REYES, represented by DOMINADOR   herein, Anatalia Reyes and Gloria Reyes-Paulino. They allegedly just discovered that the property was clandestinely, fraudulently
REYES; HEIRS OF APOLONIA REYES SAMSON,   and unlawfully divided between private respondents who caused its registration in their names under TCT Nos. 272976 and
represented by MILAGROS FRANCISCO; MONICO REYES   272977 by means of simulated or fictitious and unlawful conveyances. They contended that, not having waived or repudiated their
PALMARIO; FELICISIMA REYES CHING-CUANCO;   lawful shares and participation in the property, they are co-owners of the resulting subdivision lots with private respondents, the
JULIA REYES; LEONORA REYES; EDILBERTA REYES;   same being held in trust by the latter for the co-ownership. Similarly, the rents from the market stalls on the property belong not
MAXIMA REYES; BIENVENIDO REYES; HEIRS OF   only to private respondents but also to them and private respondents should be made to account for all rents received from the date
MANUEL REYES SAMSON, represented by ZENADIA   of Eustaquias death. They further prayed that the property be placed under receivership pending the resolution of the case.[11]
FRILLES; MARIO SAMSON; GLISERIO SAMSON; G.R. No. 157959 Private respondents filed a joint answer[12] to the complaint claiming, among others, that 1) the complaint does not
CRISPIN SAMSON; NUMERIANO SAMSON; FERMENIA   state any cause of action; 2) they are the owners in fee simple of the property under TCT Nos. 272977 and 272976; 3)
SAMSON, HEIRS OF MARTIN SAMSON, represented by Present: complainants are not compulsory heirs of Eustaquia; and 4) the title to the property has been transferred in the names of private
MA. CLARA SAMSON; ELPIDIO SAMSON; RICARDO PUNO, C.J., Chairperson, respondents pursuant to a valid sale long before the death of Eustaquia.
SAMSON; VICTORINO SAMSON; EMILIANO SAMSON, SANDOVAL-GUTIERREZ,  
JR.; CARMELITA SAMSON VERGARA; SHEILA ANN CORONA, A separate answer[13] was filed on behalf of Magno Sarreal by his purported guardian ad litem and natural daughter,
SAMSON; FRANCISCO SAMSON AND MAGNO AZCUNA, and Aida Sarreal, which admitted virtually all the allegations of the complaint except the portion which stated that the property
SARREAL, represented by the substituted heirs, AIDA GARCIA, JJ. belonged exclusively to Eustaquia. It alleged that the property, while originally paraphernal, became conjugal in character because
SARREAL and the HEIRS OF CELERINA SARREAL   of the improvements introduced therein from the income of the spouses and/or from the income or fruits of their separate
KAMANTIGUE, represented by LAURA S. KAMANTIGUE, Promulgated: properties.
   
  However, at that time, it appeared that the status of Aida Sarreal as guardian ad litem was still in issue in two pending
March 28, 2007 consolidated civil cases, namely, Civil Case No. Q-51482[14] and Special Proceeding No. 50893.[15] The appointed guardian ad
Petitioners,   litem of Magno in those cases, the University of the Philippines Office of Legal Aid, filed a motion to be appointed as guardian ad
- versus -   litem of Magno, which the RTC granted in an order[16] dated August 26, 1994. Thereafter, the Office of Legal Aid filed, on his
  behalf, the answer[17] dated September 5, 1994 which now denied for lack of knowledge the personal circumstances of the
    complainants, their relationship to their respective progenitors and to Eustaquia, and the relationship of complainants and private
THE HONORABLE COURT OF APPEALS, ANATALIA   respondents to each other and of private respondents to Eustaquia. The paraphernal character of the property was likewise denied,
REYES AND GLORIA REYES-PAULINO,   with Magno now claiming that the property was part of the conjugal partnership from the very beginning.
Respondents.    
X----------------------------------------------------------------------------------------X On December 12, 1994, Magno died and was substituted as defendant by Celerina Sarreal Kamantigue, his sister, and Aida
  Sarreal.[18] During pre-trial, the parties agreed that the sole issue to be resolved in the case was whether the sale of the property to
DECISION private respondents was simulated or fictitious.
   
  On September 11, 1996, petitioners separate applications for receivership were denied. [19] Thereafter, trial ensued.
AZCUNA, J.: Petitioners presented as witnesses Celerina Sarreal Kamantigue, Monico Reyes Palmario and Aida Sarreal. The sole witness for the
  defense, on the other hand, was private respondent Gloria Reyes-Paulino.
   
This is a petition for review on certiorari[1] assailing the Decision[2] and Resolution[3] of the Court of Appeals (CA) dated February After the parties presented their respective evidence, another motion for the appointment of a receiver was filed by the
10, 2003 and April 28, 2003, respectively, in CA-G.R. CV No. 71807. children of Eustaquias siblings but before a ruling could be made thereon, the decision [20] dated September 7, 2001 was rendered by
  the RTC on September 12, 2001 in favor of petitioners which 1) declared the Deed of Absolute Sale executed between Eustaquia
The case stemmed from the action for partition and accounting filed by the children of the siblings of the late Eustaquia and private respondents null and void; 2) ordered the Register of Deeds of Quezon City to cancel TCT Nos. 272976 and 272977; 3)
Reyes[4] against Magno Sarreal, Anatalia Reyes and Gloria Reyes-Paulino, Eustaquias husband and nieces, respectively, in relation allowed the partition of the property among the legal heirs of Eustaquia and the legal heirs of her deceased husband, Magno; 4)
to a parcel of land situated in Balintawak, Quezon City, with an area of Seven Thousand Four Hundred Eighty-Four (7,484) square appointed the Branch Clerk of Court as commissioner for the purpose of partitioning the property and rendering an account of all
meters (the property). income received from the date of Eustaquias death; 5) pending partition, appointed the Clerk of Court as receiver of the property;
  and 6) ordered the defendants to pay attorneys fees, litigation expenses and costs of suit.
The property was originally registered in the name of Eustaquia under Transfer Certificate of Title (TCT) No. 26031  
issued by the Registry of Deeds of Quezon City and was inherited by her prior to her marriage to Magno Sarreal. Not satisfied, private respondents appealed the decision to the CA. On February 10, 2003, the CA reversed the
  decision of the RTC and rendered the assailed Decision,[21] the dispositive portion of which reads:
On June 5, 1963, Eustaquia leased a portion of the property to ACME Abrasive Manufacturing Corporation (ACME)  
for a period of twenty (20) years commencing on June 1, 1963 until June 1, 1983.[5] The lease contract provided that ACME as the WHEREFORE, the appealed decision is REVERSED and SET ASIDE, and another is
lessee shall have the right to build, construct and place additional improvements within the property during the term of the lease entered:
subject to the condition, among others, that upon the expiration of such term, the ownership of all the improvements found within a)                  Dismissing the complaint;
the leased property would automatically be transferred to the lessor without need for reimbursement. [6] The contract was b)                 Revoking the appointment of a receiver over the property in suit;
thumbmarked by Eustaquia as the lessor, with Magno Sarreal likewise affixing his signature to the instrument to indicate his c)                  Discharging forthwith the appointed receiver, Atty. Mercedes Gatmaytan, the
marital consent to the transaction.[7] Clerk of Court of the Regional Trial Court of Quezon City; and
  d)                 Ordering the discharged receiver to restore forthwith the possession of the
On January 24, 1979, Eustaquia purportedly sold the property to private respondents Anatalia Reyes and Gloria subject property to the appellants Anatalia Reyes and Gloria Reyes-Paulino and
Reyes-Paulino in a notarized document entitled Patuluyang Pagbibili ng Lupa (Deed of Absolute Sale).[8] In the second paragraph render a full accounting and settlement of her receivership to the latter.
of the deed, Eustaquia expressly stated that the property was paraphernal or exclusive in character and did not belong to the  
conjugal partnership because it formed part of her inheritance. Accordingly, it was only her signature and thumbmark which The CA pointed out that during pre-trial, the parties agreed that the sole issue that would limit or control the course of the trial was
appeared on the deed. Anatalia and Gloria subsequently divided the property between themselves and registered their respective whether the conveyance of the property to private respondents was simulated or fictitious. The CA ruled that the burden of proof,
shares under their own names.[9] which rested upon complainants in this instance, was not met, after finding that the testimonies of the complainants two
  witnesses[22] to the effect that private respondents had no means or source of income that would enable them to buy the property
Eustaquia died of natural causes on May 7, 1987.[10] and that they merely lived with the spouses Eustaquia and Magno 
 
Sarreal during their lifetime were mere generalities and fell short of the clear, convincing and more than merely preponderant The Court is mindful of the rule that the determination of issues at a pre-trial conference bars the consideration of
evidence necessary to overcome the notarized deed of sale. [23] The CA, moreover, found the testimony of private respondent Gloria other questions on appeal. A pre-trial is meant to serve as a device to clarify and narrow down the basic issues between the parties,
Reyes-Paulino more convincing in that she was able to establish she was earning an income and that she lived with her husband to ascertain the facts relative to those issues and to enable the parties to obtain the fullest possible knowledge of the issues and
independently of the spouses Eustaquia and Magno. facts before civil trials and thus prevent trials from being carried on in the dark. Thus, to obviate the element of surprise, parties
  are expected to disclose at a pre-trial conference all issues of law and fact which they intend to raise at the trial, except such as
The CA held that the RTC showed undue bias in favor of complainants by resolving the case on issues not agreed may involve privileged or impeaching matters. [27] The rule, however, is not to be applied with rigidity and admits of certain
upon during the pre-trial, particularly with regard to the true nature of the property and whether the same was paraphernal or exceptions.[28]
conjugal. It should be kept in mind that because the property was deemed conjugal, the RTC held that the Deed of Absolute Sale  
which did not bear Magnos signature was void. There is merit in petitioners claim that the limitation upon the issue embodied in the pre-trial order did not control the
  course of the trial. The issue on the nature of the property was embodied in the pleadings filed by the parties subsequent to the
Thereafter, separate motions for reconsideration [24] were filed by the children of Eustaquias siblings and the heirs of Magno complaint and was actively litigated by them without any objection on the part of private respondents. In view thereof, the
Sarreal. Collaborating counsel for private respondents, on the other hand, filed a notice of entry of appearance with omnibus latter are deemed to have given their implied consent for the RTC to try this issue. It is worthy to note that a careful perusal of the
motion.[25] The omnibus motion, attached as Annex A to the notice, prayed for 1) the revocation of the appointment of the receiver RTC decision would reveal that the trial court found it unnecessary to make a categorical finding as to whether the deed was
over the property; 2) the discharge of the appointed receiver; and 3) an order for the discharged receiver to restore possession of simulated or fictitious, the focal point being the character of the property at the time of the transfer to private respondents. While it
the property to private respondents. is true that the RTC cited the evidence introduced by petitioners to establish that the sale was simulated or fictitious, it did not
  make a clear and definitive ruling on this matter, and instead stated as follows:
After petitioners interposed their comment/opposition to the omnibus motion, another collaborating counsel for  
private respondents filed a notice of entry of appearance with application for damages against receivers bond[26] on March 25, While these circumstances may be considered in the determination of the alleged fraud in the
2003 praying that the receivers bond in the amount of P1,000,000.00 be declared liable for damages sustained by private transfer of property by way of Deed of Sale allegedly executed by Eustaquia Reyes in favor of defendants
respondents. On April 2, 2003, private respondents also filed, with leave of court, a consolidated comment to the motions for Gloria Reyes-Paulino and Anatalia Reyes, the Court is nevertheless confronted with a significant factual
reconsideration filed by petitioners. element which, by and in itself alone and independent of circumstances indicative of fraud, nullifies the
  said Deed of Sale. There is a clear absence of Magno Sarreals signature in the Deed of  Sale of the subject
In the assailed Resolution dated April 28, 2003, private respondents omnibus motion for the immediate execution of property in favor of Gloria Reyes-Paulino and Anatalia Reyes. [29]
the directives regarding the receivership and accounting aspects of the CA decision was granted. Private respondents application  
for damages against the receivers bond was, on the other hand, referred to the RTC for hearing and disposition. Finally, petitioners Contrary to the assumption made by the CA, the deed was clearly not nullified on the basis that it was simulated or
motions for reconsideration were denied for lack of merit. fictitious. Rather, the ruling was that the absence of Magnos conformity rendered the deed of absolute sale fatally defective. In this
  regard, the evidence relied upon by the RTC to support its conclusion that the property had become conjugal and therefore required
This petition was thereupon filed on May 9, 2003. This Court issued a status quo order on May 15, 2003, to stop the Magnos consent was principally the testimony of Monico Reyes Palmario as well as the lease agreement executed with ACME, to
immediate execution of the CA decision and resolution. wit:
   
Petitioners anchor their petition on the following grounds: After a careful examination of the testimonial and documentary evidence adduced by both
  parties, it appears to the Court that:
1.                 Respondent Court of Appeals committed serious deviations from the law and settled  
jurisprudence in holding that the land in dispute did not become conjugal property of the late xxx
spouses Magno Sarreal and Eustaquia Reyes and in reversing the trial court on the issue of  
nullity of the deed of sale. 6. The subject property was acquired by Eustaquia Reyes prior to her marriage
  to Magno Sarreal. During the lifetime of the marriage,
2.                 Respondent Court likewise erred most grievously in overturning the trial courts factual improvements were made thereon as declared in page 4 Paragraph
findings on the basis of a uniquely one-sided or lopsided treatment of the facts and in total XI (Exhibit A-7) of the Lease Agreement showing that all
disregard of the tenet in law that issues of credibility should be left for the trial court to improvements in the said parcel of land as of June 5, 1983, at the
resolve because unlike the appellate court, it had the opportunity to observe the demeanor of expiration of the lease, shall belong to the lessors. Witness plaintiff
witnesses at close range. Monico Reyes Palmario likewise testified that he had been
  engaged by the spouses as a carpenter and mason to make
3.                 Respondent Court acted in grave abuse of discretion tantamount to excess of jurisdiction improvements on the property. He made repairs on the
when it ordered the trial court to issue forthwith a writ of execution of the directives in its buildings constructed on the property. He further testified that
decision despite their lack of finality. there were at least ten (10) houses on the said property and a
  building housing a knitting company. (TSN of October 2, 1997,
4.                 The Resolution turns a blind eye upon the ruling of the Honorable Supreme Court in Heirs of p. 10)
the Late Justice Jose B.L. Reyes vs. Court of Appeals (338 SCRA 282), and has the  
deleterious effect of opening the door to a dissipation of the fruits of the property in dispute to xxx
the grave detriment of the petitioners should the assailed Decision be reversed by the As in the Embrado Case, the sale of the subject property to defendants Gloria Reyes-Paulino and Anatalia
Honorable Court. Reyes was void because Magno Sarreal did not consent to the sale, which consent was necessary because
  the property is conjugal, hence the consent of Magno Sarreal as spouse is necessary. While it is true that
  the parcel of land covered by TCT 26031 was acquired by Eustaquia Reyes prior to her marriage to
The crux of the present controversy involves the resolution of validity or invalidity of the conveyance of the property defendant Sarreal, it was established that improvements were made consisting of houses, buildings
to private respondents. for rent. Likewise, all improvements introduced thereon by Acme-Abrasive Manufacturing Corporation
The trial court concluded on the basis of the evidence presented that the Deed of Absolute Sale was void for not upon the expiration of the lease on June 5, 1983 became conjugal properties of Spouses Eustaquia Reyes
embodying the consent of Eustaquias husband. The conclusion was drawn upon the finding of the RTC that the property subject of Sarreal and Magno Sarreal. There is no substantial evidence presented as to the source of funds used in
the deed was conjugal in character due to the improvements constructed thereon at the expense of the conjugal partnership. the improvements but it was testified upon that the same were made during the subsistence of the
  marriage hence the presumption that the funds used were conjugal stands. Under Article 158 of the Civil
To reiterate, in reversing the decision of the trial court, the CA pointed out that the RTC had gone beyond the scope Code, the land becomes conjugal upon the construction of the building without awaiting reimbursement
of the lone issue agreed upon by the parties during pre-trial, that is, whether the sale of the property to private respondents was before or at the liquidation of the partnership upon the concurrence of two conditions, to wit: (a) the
simulated or fictitious. construction of the building at the expense of the partnership; and (b) the ownership of the land by one of
  the spouses (Embrado vs. Court of Appeals, supra). Thus, in this instant case, while the land originally
 belonged to Eustaquia Reyes, the same became conjugal upon the construction of improvements thereon. A Balintawak, sir.
[30]
 
  x x x x x x x x x
   
In the present case, the CA considered only the improvements introduced by ACME during the subsistence of the Q Do you know the area of this parcel of land?
latters lease to determine whether the property became conjugal. It ruled in the negative after concluding that these improvements  
were not at the partnerships expense, but rather at the expense of the lessee. A Seven thousand square meters, sir.
   
It is argued by private respondents that the improvements made by ACME did not transform the character of the Q Is that parcel of land you identified the same parcel of land subject matter of
property from being paraphernal into being conjugal. The statutory requirement set forth under  this case?
Article 158 of the Civil Code[31] is that the improvements have to be made or undertaken at the expense of the conjugal  
partnership. Under the terms of the lease agreement, the lessee was allowed to build on the property at its own expense, subject A Yes, sir.
to the condition that after the termination of the lease, ownership over the same would inure to the benefit of the lessor. This Court  
agrees that the expense incurred by ACME in constructing the buildings on Eustaquias property cannot be construed as being Q Mr. witness, do you have any occasion to work on the Seven Thousand square
converted into an expense taken against the civil fruits of the property by virtue of the lease. Rather, under the terms of the lease meter parcel of land?
contract, it was the building itself that would inure to the lessor as fruits but only at the end of the lease period on June 1,  
1983. At that time, however, Eustaquia had already sold the land, on January 24, 1979, to private respondents. Hence, the transfer A Yes, sir.
of the ownership of the building from the lessee to the lessor could not convert the land into conjugal property since the land itself  
no longer belonged to one of the spouses at that time. Q What was that work that you did, Mr. Witness?
   
This notwithstanding, the RTC did not rely solely upon the improvements introduced by ACME in ruling that the A I worked as a carpenter, sir.
property became conjugal. As mentioned above, it likewise gave full faith and credence to the testimony of Monico Reyes  
Palmario who testified that there were houses and buildings that were constructed on the property prior to the purported sale to Q You made mention of house. How many houses are there inside this property?
private respondents.  
  A More or less ten (10) houses, sir.
The CA, however, held otherwise, stating that the testimony of private respondent Gloria Reyes-Paulino was more  
credible, thus: Q By the way, who was . . . or who spent for the construction of those houses, if
  you know?
The complaint, however, never mentioned any house or a building occupied by a knitting  
company; it confined itself only to a parcel of land and market stalls. Hence, Palmario must be referring to A The spouses Eustaquia Reyes and Magno Sarreal, sir.
another land and his lack of certitude is confirmed by his inability to be sure of the number of houses that  
he was talking about. Q Aside from those houses, do you know if there are other improvements or
  other building inside the property?
Indeed, appellant GLORIA, who is renting one of those houses or apartments from Eustaquia  
and Magno, and who is thus more knowledgeable of the place and hence, more reliable, declared that they A Yes, sir, knitting company.
are outside the land in controversy.[32]  
  Q Who owns the building that occupy the factory?
Applying the well-known test of credibility called the actors rule, it is the witness whose action is more closely  
connected to the point at issue that should be given more credence. [33] In the present case, the RTC gave credence to the testimony A Spouses Eustaquia Reyes and Magno Sarreal, sir.
of petitioner Monico Reyes Palmario, who claimed he worked as carpenter on the property in question, and there were houses and  
buildings constructed on the property including a knitting factory. The CA, however, sustained the testimony of private respondent The complaint, however, never mentioned any house or a building occupied by a knitting
Gloria Reyes-Paulino, who rented from the spouses Eustaquia and Magno one of the houses or apartments, and lived therein, and company; it confined itself only to a parcel of land and market stalls. Hence, Palmario must be referring
who testified that these houses and buildings were on a different property. As between these two witnesses, the latter is more to another land and his lack of certitude is confirmed by his inability to be sure of the number of the
reliable since her act of renting and living in one of the houses or apartments makes her the actor more closely related to the point houses that he was talking about.
at issue, i.e., whether or not the houses were on the property in question. For while a carpenter would not concern himself with the  
title of the property, a lessee would normally look into the title covering the property leased, including its precise location or Indeed, appellant GLORIA, who is renting one of those houses or apartments from
boundaries, and in fact Gloria Reyes-Paulino testified that the lot on which the house she rented was found had a separate title. EUSTAQUIA and Magno, and who is thus more knowledgeable of the place and, hence, more reliable
  declared that they are outside the land in controversy.
Accordingly, the CA aptly held as follows:  
  Q Now, let us talk about the parcel of land. How far is this parcel of land from
For his part, plaintiff-appellee Monico Reyes Palmario testified on more or less ten (10) the place where you were residing in 1979?
houses constructed on the land in dispute by EUSTAQUIA and Magno, on which he even had the  
occasion to work on them as a carpenter, aside from a building occupied by a knitting company, viz.: A It is just at the back, sir.
   
Q And will you also inform this Honorable Court if the spouses Magno Sarreal Q Do you mean to tell us that the land of which your apartment was situated is
and Eustaquia Reyes had left any property? not part of the parcel of land with an area of 7,484 square meters?
   
A Yes, sir, they have a portion of land and a paupahang bahay. A No, sir.
   
Q Do you know where is this parcel of land? Q When you say hindi, the lot on which your apartment was situated has a
  separate title of its own?
A Balintawak, sir, Samson Road.  
 [34]
  A Yes, sir.
[Q] What city?  
  Q And the title to that apartment was in the name of the spouses?
 A Yes, sir. WHEREFORE, the petition is DENIED and the assailed Decision and Resolution dated February 10,
  2003 and April 28, 2003, respectively, rendered by the Court of Appeals in CA-G.R. CV No. 71807 are
Be that as it may, the improvements referred to by the trial court which purportedly made the property hereby AFFIRMED. The status quo order issued by this Court on May 15, 2003 is LIFTED effective upon the finality of this
conjugal consisted of houses, buildings for rent and improvements introduced thereon by lessee Acme- Decision.
Abrasive Manufacturing Corporation upon the expiration of the lease on June [1], 1983. It said:  
  Costs against petitioners.
As in the Embrado Case, the sale of the subject property to defendants Gloria  
Reyes Paulino and Anatalia Reyes was void because Magno Sarreal did not SO ORDERED.
consent to the sale, which consent was necessary because the property is conjugal
hence the consent of Magno Sarreal as spouse is necessary. While it is true that
the parcel of land covered by TCT 26031 was acquired by Eustaquia Reyes prior
to her marriage to defendant Sarreal, it was established that improvements were
made consisting of houses, buildings for rent. Likewise, all improvements
introduced thereon by lessee Acme-Abrasive Manufacturing Corporation upon
the expiration of the lease on June [1], 1983 became the conjugal properties of
Spouses Eustaquia Reyes Sarreal and Magno Sarreal. There is no substantial
evidence presented as to the source of funds used in the improvements but it was
testified upon that the same were made during the subsistence of the marriage
hence the presumption that the funds used were conjugal stands. Under Article
158 of the Civil Code, the land becomes conjugal upon the construction of the
building without awaiting reimbursement before or at the liquidation of the
partnership upon the concurrence of two conditions, to wit: (a) the construction
of the building at the expense of the partnership, and (b) the ownership of the
land by one of the spouses. (Embrado vs. Court of Appeals, supra)Thus, in this
instant case, while the land originally belonged to Eustaquia Reyes, the same
became conjugal upon the construction of improvements thereon.
 
The houses or apartments being outside the land in suit, the only improvements that should
be looked into in the case at bench are the improvements introduced thereon by the lessee Acme-
Abrasive Manufacturing Corporation. In this connection, it is worth reiterating that paragraph XI of the
contract of lease provided:
 
XI
 
That this contract of lease shall be for a period of TWENTY (20) YEARS from
June 1st, 1963 and expiring on June 1st 1983; and that upon termination of the
period of this contract, the ownership of all the improvements found within the
leased property, (except machineries of any kind, stocks, furniture and other
personal property found in the building) shall be automatically transferred to the
LESSOR without reimbursement and without paying the cost and value thereof
to the LESSEE; and that if it is necessary for the LESSEE to execute and deliver
papers, documents and other writings, whatsoever to effect the transfer of the
ownership of all the said improvements to the LESSOR, the LESSEE shall
execute and deliver the same to the LESSOR.
 
Two (2) decisive facts are clearly discernible therefrom: first, no conjugal fund ever went into the
construction of the improvements as they were all done at the expense of the lessee; and second, the
improvements shall devolve to the ownership of the lessor only upon the expiration of the lease.
 
The lease expired on June 1, 1983. At that time, the lessor was no longer EUSTAQUIA but the
appellants ANATALIA and GLORIA. This is for the simple reason that in the interim, or on January
24, 1979, the lessor EUSTAQUIA sold the land to ANATALIA and GLORIA who thereupon
succeeded EUSTAQUIA as lessor. Necessarily, ANATALIA and GLORIA became the owners of the
land, together with all the improvements thereon, upon the expiration of the lease on June 1, 1983,
being already the lessors on that date. Logically, too, when EUSTAQUIA sold the property, it was still
paraphernal, as she correctly repeatedly emphasized in the deed of sale paraphernal or exclusive
property ko, at hindi conjugal naming mag-asawa; ito ay aking minana o isang inheritance
property. Resultantly, when EUSTAQUIA died on May 7, 1987, the plaintiffs, including the surviving
husband, Magno Sarreal, could no longer inherit the property from her since she was then not anymore
the owner thereof.[35]
 
 
Accordingly, since the property sold by Eustaquia to private respondents on January 24, 1979 was paraphernal, the
consent of Magno was not required and the sale cannot be held invalid on the basis of its absence.
 
 FIRST DIVISION 7) Interest at the rate of 12% per annum on all attorneys fees in favor of plaintiffs computed from October 19, 1985 in respect to
[G.R. No. 111159. June 10, 2003] the claims of plaintiffs crewmembers, and with respect to the claim of Shipmaster Ulstrup computed from December 25, 1985 and
NORDIC ASIA LIMITED (now known as DnC Limited) and BANKERS TRUST COMPANY,  petitioners, vs. THE on the claim of Ship Superintendent Kim Jeong Seong computed from October 19, 1985.
HONORABLE COURT OF APPEALS, NAM UNG MARINE CO., LTD., KIM JEONG SEONG, P. U. The awards granted herein in favor of plaintiffs to be paid in US dollars or its Philippine currency equivalent at the time of
ULSTRUP, BAK JEONG RANG, SIN SUK NO, HWANG IN CHAN, 0 JEONG SUK, LEE MYUNG UNG, payment.
CHAE DOO EUP, SEOK HAEONG JO, KIM YONG JIN, KIM BU YUL, JEONG DONG SONG, LEE ON Further ordering the counterbond posted by the intervenors DnC Limited and Bankers Trust Company and issued by Prudential
CHUN, GYEONG GI GIM, MUN KU HAN, SEUNG HO AN, BYANG YEOL YANG, SEOG MAN HAN, Guarantee and Assurance, Inc. in the amount of P10,211,361.02 which is the equivalent of plaintiffs maritime liens amounting to
KIM JUNG GON, LEE DONG HWA, LEE MOON HYEONG, SEONG MUG JANG, HAN IL IM, SANG US$567,297.84, the said counterbond having been posted by intervenors in place of the which is the defendant vessel M/V
MYEONG GIM, WOO JEONG SUL, GIL HUN GIM, CHAE DONG CHONG, respondents. Fylyppa, as liable to answer for all the awards in favor of plaintiffs.
DECISION Granting, likewise, as it is hereby granted the Motion to Dismiss Complaint filed by JIBFAIR only; and denying as it is hereby
AZCUNA, J.: denied, the Motion of Sextant Maritime to Lift Order of Default and the Motion of intervenors to lift writ of attachment, for lack of
Before this Court is a petition for review on certiorari, under Rule 45 of the Rules of Court, assailing the decision [1] of the merit.
Court of Appeals in CA G.R. CV No. 21343, dated October 27, 1994. SO ORDERED.
The facts are not disputed. Petitioners filed a notice of appeal from the aforementioned decision of the RTC of Manila on November 10, 1987. The
On May 26, 1981, a loan agreement was entered into between petitioners Nordic Asia Limited and Bankers Trust appeal was docketed in the Court of Appeals as CA-G.R. CV No. 21343. On the same day, .respondents filed a motion for
Company, as lenders, and Sextant Maritime, S.A., as borrower, involving the sum of US$5,300,000. The amount was used by execution pending appeal. In an order dated January 29, 1988, the RTC of Manila granted the motion for execution pending
Sextant Maritime, S.A. to purchase the vessel M/V Fylyppa. As a security for the loan, Sextant Maritime, S.A., executed in favor appeal.
of petitioners a First Preferred Mortgage over the vessel M/V Fylyppa.[2] To forestall the execution of the decision, petitioners instituted another action with the Court of Appeals assailing the
When Sextant Maritime, S.A. defaulted on the loan, petitioners instituted on January 29, 1986 extrajudicial foreclosure January 29, 1988 order. This second case was docketed as CA-G.R. SP No. 13874. On October 11, 1988, the Court of Appeals
proceedings under section 14 of Presidential Decree 1521, otherwise known as the Ship Mortgage Decree of 1978. As part of the promulgated its decision in CA-G.R. SP No. 13874, affirming in all respects the RTC of Manilas January 29, 1988 order except
said proceedings, petitioners filed with the Regional Trial Court of Pasay City a petition for the issuance of an arrest order against the portion allowing execution pending appeal on the awards of moral damages, attorneys fees, litigation expenses and interest.
the vessel M/V Fylyppa.[3] Petitioners and respondents separately filed motions for partial reconsideration. Both motions were denied and the decision in CA-
On the same day, January 29, 1986, respondents Nam Ung Marine Co., Ltd. and the twenty-seven (27) crew members of G.R. SP No. 13874 became final and executory.
the vessel M/V Fylyppa also filed a complaint for a sum of money before the Regional Trial Court of Manila against the vessel On January 29, 1993, the Court of Appeals rendered its decision in CA-G.R. CV No. 21343 dismissing the appeal and
M/V Fylyppa.[4] Respondents filed the suit to claim their preferred maritime liens under the Code of Commerce and P.D. 1521, affirming in all respects the October 30, 1987 decision of the RTC of Manila. It is this decision that is the subject of the present
consisting of unpaid wages, overtime pay, allowances and other benefits due to them for services rendered on board the vessel and petition.
for the manning and provisioning thereof. Other impleaded defendants were Sextant Maritime, S.A. (the registered owner of the In this petition for review, petitioners assign the following as errors:
vessel), P.V. Christensen Lines (the time-charterer of the vessel), Theil Bolvinkel Shipping, A.S. (the ship manager of the vessel) I
and Jibfair Shipping Agency Corporation (the alleged local ship agent of the vessel).[5] The Court of Appeals, in affirming the decision of the RTC of Manila, totally disregarded the principles embodied in the due
On January 30, 1986, the RTC of Pasay City issued an order for the arrest of the vessel. The arrest order was implemented process clause of the Constitution, thus:
the following day, on January 31, 1986.[6] Likewise, the RTC of Manila issued on January 30, 1986 an order for the arrest and/or a. The Court of Appeals erred in finding that petitioners have waived their right to present evidence.
attachment of the vessel. Per sheriffs partial return dated February 3, 1986, [7] the vessel M/V Fylyppa was also arrested on January b. The Court of Appeals erred in ruling that a pre-trial conference is not mandatory in the present case.
31, 1986. c. The Court of Appeals erred in ruling that petitioners have no right to point out certain procedural lapses
On February 10, 1986, petitioners filed with the RTC of Manila an urgent motion for leave to intervene in the collection committed by the RTC of Manila.
case as plaintiffs-intervenors against respondents. Petitioners alleged that they hold and possess a Panamanian First Preferred Ship II
Mortgage over the vessel M/V Fylyppa and that their intervention is only for the purpose of opposing the herein plaintiffs The Court of Appeals erred in holding that the amount of US$501,797.84 awarded by the RTC of Manila is fully supported by
unfounded and/or grossly exaggerated claim.[8] The motion for leave was granted and the complaint-in-intervention admitted.[9] competent proof.
On February 14, 1986, petitioners, as plaintiffs-intervenors, filed a manifestation/motion with the RTC of Manila praying III
for the discharge of the attachment of the vessel M/V Fylyppa and offering a counterbond in the amount of US$327,269.73. The The Court of Appeals erred in ruling that the RTC of Manilas award of attorneys fees cannot be challenged by petitioners.
RTC of Manila initially granted the manifestation/motion based on the counterbond offered. However, upon motion for IV
reconsideration filed by respondents, the amount of the bond was increased to US$567,297.84. Petitioners posted the required The Court of Appeals erred in awarding moral damages, there being no factual or legal basis.
bond and the attachment over the vessel was lifted.[10] A rudimentary doctrine on appealed cases is that this Court is clothed with ample authority to review matters, even if they
A motion to dismiss was seasonably filed by defendant Jibfair Shipping Agency Corporation in the collection case. All are not assigned as errors on appeal, if it finds that their consideration is necessary at arriving at a just decision of the case. Thus,
other impleaded defendants failed to file responsive pleadings to the complaint within the time allowed under the Rules of Court. the Court may consider an unassigned error closely related to an error properly assigned or upon which the determination of the
As a result, respondents, on February 19, 1986, moved to declare these defendants in default and to be allowed to present evidence question properly assigned is dependent, notwithstanding the failure to assign it as error.[13]
immediately. The RTC of Manila, in an order dated February 21, 1986, declared in default M/V Fylyppa, Sextant Maritime, S.A., In examining the factual circumstances of the case at bar, the Court finds questionable the legal interest of petitioners to
P.V. Christensen Lines and Theil Bolvinkel Shipping, A.S., and allowed respondents to present their evidence. intervene and, eventually, file this petition. Petitioners entered their appearance as plaintiffs-in-intervention in the collection case,
Respondents were able to present their evidence on February 27, 28 and March 3 and 4, 1986. Despite due notice, impleading respondents as defendants-in-intervention. In the complaint-in-intervention, petitioners alleged the following:
petitioners did not participate in the hearings to receive evidence. Instead, petitioners filed a motion for reconsideration and/or to 1) Plaintiffs-in-intervention hold and possess a Panamanian FIRST PREFERRED SHIP MORTGAGE dated May 29, 1981
expunge ex-parte evidence on March 3, 1986. At the March 4, 1986 hearing, petitioners counsel appeared and manifested that he over the vessel, M/V Fylyppa, executed in their favor by Sextant Maritime S.A., one of the defendants in the action.
purposely did not appear at the previous hearings because he did not want to waive petitioners right to question the proceedings, 2) On January 29, 1986, plaintiffs-in-intervention filed with the sheriff of Manila a verified request or petition for
which he considered to be illegal. Said counsel further manifested that petitioners motion for reconsideration and/or to extrajudicial foreclosure of the aforementioned Panamanian FIRST PREFERRED SHIP MORTGAGE over the vessel, M/V
expunge ex-parte evidence remains unresolved.[11] Fylyppa.
On October 30, 1987, the RTC of Manila rendered a decision, the dispositive portion of which reads:[12] 3) As a consequence of the extrajudicial foreclosure proceedings, plaintiffs-in-intervention filed a petition for an arrest
WHEREFORE, premises considered, judgment is hereby rendered ordering defendants M/V Fylyppa, Sextant Maritime, S.A., order against the vessel M/V Fylyppa.
P.V. Christensen Lines, Theil Bolvinkel, A.S., to pay plaintiffs jointly and severally, the following amounts: 4) By virtue of their unpaid mortgage lien, plaintiffs-in-intervention have a clear, direct and substantial legal interest in the
1) Wages, allowances, medical expenses and overtime charges of the 25 Korean crewmen - US$310,369.37; action and are so situated as to be adversely affected by any distribution or other disposition of the property involved in this action.
2) To pay Shipmaster Ulstrup US$12,400.00 and Ship Superintendent Kim Jeong Seong US$4,500.00; 5) Their intervention is only for the purpose of opposing therein plaintiffs unfounded and/or grossly exaggerated claim and
3) To plaintiff Nam Ung Marine Ltd., the amount of US$69,028.47 representing agents fees and other expenses incurred for is entirely without prejudice to the result or outcome of the extrajudicial foreclosure proceedings against said vessel before the
manning the defendant M/V Fylyppa during its last voyage; Sheriff of Manila.
4) The amount of US$12,500.00 representing repatriation expenses for the 25 Korean crewmen and US$2,000.00 each for A cursory reading of petitioners complaint-in-intervention plainly shows that petitioners intention in intervening in the
Shipmaster Ulstrup and Ship Superintendent Kim Jeong Seong; collection case was not to enforce their maritime lien against the defendants therein, it already being enforced through extrajudicial
5) Moral damages for US$1,000.00 each in favor of the 25 Korean crewmen and US$2,000.00 each for the Shipmaster Ulstrup foreclosure proceedings, but solely to oppose the claims of respondents. The reason is obvious. The higher the claims awarded to
and Ship Superintendent Kim Jeong Seong; respondents in the collection case, which would be recovered from the attached vessel, the lesser the amount petitioners can obtain
6) Attorneys fees and expenses of litigation in the amount of US$60,000.00; from their extrajudicial foreclosure proceedings given that respondents lien is superior to petitioners mortgage lien.[14]
 This Court is therefore left to ponder on the question of whether a claimant or creditor should be allowed to intervene in a In addition to petitioners lack of legal interest, this Court finds further justification to dismiss the petition on the ground
collection case filed by a co-claimant/co-creditor possessing a superior lien or preferred credit, solely for the purpose of opposing that petitioners have violated the rule against forum shopping.
such claims in order that the intervenors share may not be diminished substantially, or to prevent it from being diminished at all. Forum shopping consists of filing multiple suits involving the same parties for the same cause of action, either
In Republic v. De los Angeles, [15] this Court ruled that every complaint, including a complaint-in-intervention, must state simultaneously or successively, for the purpose of obtaining a favorable judgment. [21] Forum shopping is an unethical practice that
the ultimate facts upon which a party relies for his cause of action. A cause of action is the act or omission by which a party subverts justice. For this reason, rules have been promulgated authorizing the dismissal of multiple cases.[22]
violates the right of another.[16] As aforementioned, the RTC of Manila issued two rulings adverse to petitioners: (1) the October 30, 1987 decision
In the case at bar, the complaint-in-intervention merely alleged that petitioners possess a mortgage lien and that petitioners granting the award of claims and damages to respondents; and (2) the January 29, 1987 order granting the execution pending
are so situated as to be adversely affected by respondents collection case. Putting things in perspective, petitioners mortgage lien appeal of the October 30, 1987 decision. Petitioners filed CA-G.R. CV No. 21343 to nullify the October 30, 1987 decision.
only gives rise to a connection between them and the defendants, the vessel M/V Fylyppa and Sextant Maritime, S.A. Being just a Petitioners also filed a separate petition before the Court of Appeals to assail the January 29, 1988 order, which was docketed as
mortgagee, the cause of action lies with the vessel and mortgagor, and not with a co-claimant. However, as aforestated, petitioners CA-G.R. SP No. 13874.
did not intervene to make a claim against the defendants, respondents herein, but merely to oppose. their claims. Petitioners were However, in CA-G.R. SP No. 13874, petitioners did not limit itself to questioning the January 29, 1988 order, but also
unable to allege what specific act or omission can be attributed to respondents, which violated petitioners rights. Petitioners simply sought to overturn the October 30, 1987 decision.[23] In fact, in petitioners second and third prayers for relief contained in the
made a conclusionary statement that, by reason of their mortgage lien, they are so situated as to be adversely affected by the petition, they specifically prayed:
collection case. The complaint-in-intervention, therefore, failed to state a cause of action. xxx xxx xxx
Furthermore, jurisprudence has laid down the requirements for intervention: [a] it must be shown that the movant has legal 2. To declare null and void the Decision (Annex A).
interest in the matter in litigation; and [b] consideration must be given as to whether the adjudication of the rights of the original 3. To set aside the ex-parte evidence of the plaintiffs (herein private respondents), which was not directed against,
parties may be delayed or prejudiced, or whether or not the intervenors rights may be protected in a separate proceeding. and have no binding effect on herein petitioners.[24]
[17]
 Petitioners failed to meet both requirements. It did not escape this Courts attention that when petitioners filed their appellants brief in CA-G.R. CV No. 21343, the
With respect to the first requisite, it has been explained that the interest which entitles a person to intervene in a suit Court of Appeals had rendered a decision in CA-G.R. SP No. 13874, partially affirming the RTC of Manilas order of execution
between other parties must be in the matter in litigation and of such direct and immediate character that the intervenor will either pending appeal. In an apparent attempt to overturn the decision in CA-G.R. SP No. 13874, petitioners included in their appellants
gain or lose by direct legal operation and effect of the judgment. Otherwise, if persons not parties to the action were allowed to brief in CA-G.R. CV No. 21343 a prayer for: b. Setting aside the execution pending appeal of said decision.[25]
intervene, proceedings would become unnecessarily complicated, expensive and interminable. And this would be against the It is quite apparent that when petitioners initiated the two actions before the Court of Appeals, purportedly seeking
policy of the law. The words an interest in the subject mean a direct interest in the cause of action as pleaded, one that would put separately to reverse the two rulings, petitioners deliberately prayed for the reversal of both rulings in each of the cases. This is a
the intervenor in a legal position to litigate a fact alleged in the complaint without the establishment of which plaintiff could not precise instance of forum-shopping wherein petitioners have filed multiple cases hoping that one or the other case will be a
recover.[18] favorable disposition. Petitioners are therefore guilty of forum shopping.
Petitioners do not own the vessel, but merely hold a mortgage lien over it. Consequently, whatever judgment is rendered in WHEREFORE, the petition is DENIED, and the assailed decision of the Court of Appeals is hereby AFFIRMED. Costs
the collection case against the vessel is not of such a direct and immediate character that the intervenor would either gain or lose against petitioners.
by direct legal operation and effect of the judgment. SO ORDERED.
Assuming judgment is rendered against the vessel, petitioners are not precluded from proceeding with their foreclosure of
the vessel. While there is a chance that petitioners would not be able fully to satisfy their claims due to respondents preferred
claims, the effect is merely indirect as it is contingent upon two eventualities: 1) petitioners being able successfully to foreclose on
the vessel; and 2) the proceeds of the sale being insufficient to cover the loan amount. It would have been different if petitioners
were the owners of the vessel, for then petitioners may be said to have a direct interest in the cause of action pleaded, as the
execution of the judgment would be implemented on their property.
The second requisite for intervention states that consideration must be given as to whether the adjudication of the rights of
the original parties may be delayed or prejudiced, or whether or not the intervenors rights may be protected in a separate
proceeding. In the present case, petitioners rights were already protected through their extrajudicial foreclosure proceedings. There
was no exigency to grant the intervention. On the other hand, respondents rights have been unduly delayed or prejudiced by the
intervention. The decision of the RTC of Manila in favor of respondents, rendered in October 30, 1987, has not attained finality
through the sole efforts of petitioners, even though the actual judgment obligors, the defendants, did not appeal from the said
decision.
The purpose of intervention is not to obstruct nor unnecessarily delay the placid operation of the machinery of trial, but
merely to afford one not an original party, yet having a certain right or interest in the pending case, the opportunity to appear and
be joined so he could assert or protect such right or interest. [19] Before this Court is a striking example of the disastrous results
incident to an improper intervention. By being admitted as intervenors, petitioners were able to elevate the collection case all the
way to this Court to contest.the award of damages that was not directed against them but against the main defendants who did not
appeal from the judgment.
In effect, petitioners intervention is a device to defeat the order of preference of claims enumerated in P.D. 1521. If
petitioners tactics were allowed, it would virtually pave the way for any creditor with a secondary lien or junior mortgage to block
the claims of a preferred creditor or claimant by simply intervening to oppose such credits or claims. This would inevitably delay
and prejudice the rights of the original parties, unnecessarily complicate the case, and result in expensive and interminable
litigation.
It is apt to mention Nordic Asia Limited v. Agton,[20] wherein a similar procedure wrought havoc on the other claimants
against the vessel.
In that case, plaintiffs JIBSEN Trading Corp. and JIBFAIR Shipping Corp. filed a collection case against P.V. Christensen
Lines, THEILSHIP and SEXTANT Maritime S.A. before the RTC of Davao. In the course of the proceedings, the same vessel
M/V Fylyppa was attached. At this point, Nordic Asia Limited and Bankers Trust Company, the same petitioners herein,
intervened, citing again their rights as unpaid mortgagees. Petitioners moved to lift the order of attachment by offering to post a
counterbond. The counterbond was denied by the RTC of Davao as they were not the owners of the vessel nor were they appearing
on behalf of its owners. The order of denial was appealed to this Court in G.R. No. 74694.
As aforestated, petitioners in the meantime succeeded in lifting the arrest order on the same vessel issued by the RTC of
Manila in the collection case herein involved through the filing of the counterbond in the amount of US$567,297.84. As a result,
petitioners were able to sell the vessel through public auction on May 29, 1986 and, thereafter, the vessel sailed out of Philippine
territory, despite the writ of attachment issued by the RTC of Davao. This development effectively rendered moot G.R. No. 74694,
causing its dismissal. The claimants in the RTC of Davao had lost their security.
 Republic of the Philippines was received by defendants by registered mail) until they finally vacate the premises and 2) the amount of P15,000.00 as and
Supreme Court for attorneys fees.
Manila  
  The counterclaim of the defendants is dismissed for lack of merit.
   
THIRD DIVISION SO ORDERED.[7]
   
  Dissatisfied, Spouses Fernandez appealed to the RTC. Respondents then filed a Motion for Execution Pending Appeal with the
SOFIA ANIOSA SALANDANAN,   G.R. No. 160280 RTC. On December 9, 2002, the RTC issued an Order directing the issuance of a writ of execution to place respondents in possession of the disputed
Petitioner,     property on the ground that Spouses Fernandez failed to periodically deposit the monthly rentals as they fell due. The Writ of Execution was issued
    Present: on January 10, 2003. The Spouses Fernandez moved for reconsideration of the Order for issuance of the writ of execution, but the same was denied.
      Thus, on February 20, 2003, the sheriff went to the subject premises to implement the writ of execution but found the place padlocked. The
    YNARES-SANTIAGO, J., sheriff also found the petitioner, an old woman, all alone inside the house. Taking pity on the old woman, the sheriff was unable to implement the writ. On the
- versus -   Chairperson, same day, respondents filed an Urgent Motion to Break Open, alleging that Spouses Fernandez fetched petitioner earlier that day from her residence in
    AUSTRIA-MARTINEZ, Dasmarias, Cavite and purposely placed her inside the subject premises so the old woman could plead for mercy from the executing sheriff.
    CHICO-NAZARIO,  
    NACHURA, and On March 6, 2003, the RTC promulgated its Decision affirming the decision of the MeTC of Manila, [8] and on April 8, 2003, the RTC also
    PERALTA, JJ. issued an Order authorizing the sheriff to employ the necessary force to enable him to enter the subject premises and place the plaintiffs-appellees in actual
SPOUSES MA. ISABEL and     possession thereof.[9]
BAYANI MENDEZ,   Promulgated:  
Respondents.*   March 13, 2009 Meanwhile, on April 4, 2003, Spouses Fernandez filed before the CA a petition for review with prayer for a temporary restraining order
x-------------------------------------------------------x seeking to stay the immediate execution pending appeal. [10] In a Resolution dated April 15, 2003, the CA granted the prayer for a Temporary Restraining
  Order.
   
DECISION On June 27, 2003, the CA rendered its Decision affirming in toto the decision of the RTC and ordered Spouses Fernandez and all persons
  claiming rights under them including petitioner to vacate the premises, ruling thus:
   
AUSTRIA-MARTINEZ, J.: Verily, the only issue to be resolved in the present ejectment case is who between petitioners [Spouses
  Fernandez] and respondents has the better right to possess the disputed premises. The issue as to who between Sofia Aniosa
This refers to the Petition for Review on Certiorari of the June 27, 2003 Decision[1] of the Court of Appeals (CA) and its September 3, 2003 Salandanan and respondents is the real owner of subject premises could be properly threshed out in a separate proceedings,
Resolution[2] in CA-G.R. SP No. 76336 denying the petition for clarification and intervention filed by Sofia Aniosa Salandanan (petitioner) and affirming in which in this case is already pending resolution in another court.
toto the March 6, 2003 Decision of the Regional Trial Court (RTC) of Manila, Branch 30 in Civil Case No. 02-104406 which affirmed the August 9, 2002  
Decision of the Metropolitan Trial Court (MeTC) of Manila, Branch 15 in Civil Case No. 172530 ordering Delfin Fernandez [3] and Carmen Fernandez Interestingly, nowhere in any pleadings of petitioners submitted below could We find any allegations to the
(Spouses Fernandez) and all persons claiming rights under them to vacate and surrender possession of a house and lot located at 1881 Antipolo St., corner effect that their possession of the disputed premises sprung from their claim of ownership over the same nor, at the very least,
Vision St., Sta. Cruz, Manila (subject lot) to Spouses Bayani Mendez and Ma. Isabel S. Mendez (respondents) and to pay the latter monthly rental that they are in possession of any document that would support their entitlement to enjoy the disputed premises.
of P5,000.00 from January 29, 2002 until they vacate the property and P15,000.00 as attorneys fees.  
  As between respondents' Torrens Title to the premises juxtaposed that of petitioners' barren claim of ownership
The case stemmed from a complaint for ejectment instituted by respondents against Spouses Fernandez before the MeTC on April 18, 2002. and absence of any document showing that they are entitled to possess the same, the choice is not difficult. Simply put,
  petitioners plainly have no basis to insist that they have a better right to possess the premises over respondents who have a
In their Complaint,[4] respondents alleged that they are the owners of the subject property as evidenced by Transfer Certificate of Title No. Torrens Title over the same. Hence, the MTC, as well as the RTC, correctly ordered petitioners to vacate the premises since
246767 of the Registry of Deeds of Manila; that they became the owners thereof by virtue of a deed of donation; that Spouses Fernandez and their families respondents have a better right to possess the same by virtue of the latter's Torrens Title.[11]
were occupying the subject property for free through the generosity of respondent Isabels father; that a letter of demand to vacate the subject property was sent  
to Spouses Fernandez but they refused to vacate the same; that respondents brought the matter to the Barangay Lupon for possible settlement but the same The dispositive portion of the CA Decision reads as follows:
failed.  
  WHEREFORE, the instant appeal is DISMISSED for lack of merit. The assailed Decision, dated 06 March
In their Answer,[5] Spouses Fernandez denied the allegations of the complaint and averred that Spouses Pablo and Sofia Salandanan (Spouses 2003, of Hon. Judge Lucia Pea Purugganan of the Regional Trial Court of Manila, Brach 50, affirming on appeal the Decision
Salandanan) are the registered owners of the subject property and the improvements therein; that respondent Isabel is not a daughter of Spouses Salandanan; of the Metropolitan Trial Court of Manila (MTC for brevity), Branch 15, is hereby AFFIRMED in toto. Accordingly, the
that Delfin Fernandez (Delfin) is the nearest of kin of Pablo Salandanan being the nephew of the latter; that Delfin has continuously occupied the said property Temporary Restraining Order is hereby LIFTED. As a legal consequence, petitioners and all persons claiming rights
since time immemorial with the permission of Spouses Salandanan; that they did not receive any notice to vacate the subject property either from respondents under them, including Sofia Aniosa Salandanan, are hereby ORDERED to vacate the premises immediately upon
or their counsel. receipt hereof. Costs against petitioners.
   
Further, Spouses Fernandez claimed that respondents were able to transfer the subject property to their name through fraud; that sometime in SO ORDERED.[12] (Emphasis supplied)
November 1999, respondents went to the house of Spouses Salandanan in Dasmarias, Cavite and asked the latter to sign a special power of attorney; that the  
supposed special power of attorney was in fact a deed of donation wherein Spouses Salandanan was alleged to have donated in favor of respondents the On July 29, 2003, Spouses Fernandez filed their motion for reconsideration.[13]
subject property; that said deed of donation was simulated and fictitious and that by virtue of the alleged deed of donation, respondent Isabel was able to  
transfer the title of the subject property in her name; that in fact, the subject property is the subject of a separate case filed on July 31, 2001 before the RTC of On even date, Sofia Salandanan (petitioner) filed a Motion for Clarification and Intervention [14] and attached a Motion for Reconsideration.
Manila docketed as Civil Case No. 01101487[6] for annulment, revocation and reconveyance of title. By way of counterclaim, Spouses Fernandez prayed for [15]
 In her motion for clarification and intervention, she alleged that she and her deceased spouse are the real owners of the subject property; that she was not a
moral damages and attorneys fees. party to the case for ejectment and did not receive any notice therefrom; and that by virtue of the said decision, she was about to be evicted from her property
  without having participated in the entire process of the ejectment proceeding.
On August 9, 2002 the MeTC rendered its decision in favor of respondents and against Spouses Fernandez, the dispositive portion of which  
reads: Petitioner further claims that sometime in 1999, respondents went to their house and showed certain papers purportedly copies of a special
  power of attorney but which turned out to be a deed of donation involving the subject property; that by virtue of the said donation, respondents were able to
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants, ordering the register the subject properties in their name and were issued Transfer Certificate of Title No. 246767; that on July 31, 2001, Spouses Salandanan with the
latter and all persons claiming rights under them to peacefully vacate the premises and surrender possession thereof to the assistance of Delfin, filed a civil case before the RTC of Manila for Revocation/Annulment of the said title and Reconveyance; and that consequently,
plaintiffs and for the defendants to pay plaintiffs: 1) P5,000.00 a month beginning January 29, 2002 (when the demand letter petitioner was forced to intervene in order to protect her interests over the subject property. Petitioner prayed for (1) clarification of the CAs decision asking
whether the said decision applies to her as a relative of Spouses Fernandez claiming right under them or as possessor of the subject property in her right as to exclude others from using the same. Petitioner further claims that respondents were able to transfer the title of the subject property in their name through
owner of the subject property; (2) that she be allowed to intervene in the appeal; and (3) that the attached motion for reconsideration be admitted. manipulation wherein respondents asked her and her deceased husband to sign a special power of attorney but later turned out to be a deed of donation.  As a
  matter of fact, upon learning of the said transfer, petitioner filed before the RTC of Manila a case for annulment and/or revocation of the title.
In a Resolution dated September 3, 2003, the CA denied the motion for reconsideration filed by Spouses Fernandez and petitioners motion for  
clarification and intervention, for lack of merit,[16] thus: We find the petition unmeritorious.
   
We have carefully perused petitioners Motion and find the arguments raised therein a mere rehash, if not a Let us first tackle the issue of whether petitioner should have been allowed to intervene even after the CA had promulgated its Decision.
repetition, of the arguments raised in their petition, which have already been thoroughly discussed and passed upon in our Sections 1 and 2 of Rule 19 of the Rules of Court provide:
Decision.  
  Section 1. Who may intervene. A person who has a legal interest in the matter in litigation, or in the success of
Anent the movant Sofia Salandanans Motion for Clarification and Intervention, We hereby deny the same on either of the parties, or an interest against both, or is so situated as to be adversely affected by a distribution or other disposition
the ground that it is belatedly filed by virtue of the rendition of Our Decision on June 27, 2003. of property in the custody of the court or of an officer thereof may, with leave of court, be allowed to intervene in the
  action. The court shall consider whether or not the intervention will unduly delay or prejudice the adjudication of the
Section 2, Rule 19 of 1997 Rules of Civil Procedure expressly provides: rights of the original parties, and whether or not the intervenors rights may be fully protected in a separate
  proceeding.
Section 2. Time to Intervene. The motion to intervene may be filed at any time  
before rendition of judgment by the trial court. x x x Section 2. Time to intervene. The motion to intervene may be filed at any time before rendition of judgment by
  the trial court. A copy of the pleading-in-intervention shall be attached to the motion and served on the original parties.
Moreover, it is undisputed that on 31 July 2001, movant Sofia Salandanan represented by petitioner has already  
instituted a Civil Case for Revocation/ Annulment of T.C.T. 246767 and Reconveyance before the Regional Trial Court of As a rule, intervention is allowed at any time before rendition of judgment by the trial court. After the lapse of this period, it will not be
Manila, Branch 50 and docketed as Civil Case No. 01101487. As such We find movants motion to be wanting of merit as her warranted anymore because intervention is not an independent action but is ancillary and supplemental to an existing litigation. [19] The permissive tenor of the
rights are already fully protected in said separate proceeding. provision on intervention shows the intention of the Rules to give to the court the full measure of discretion in permitting or disallowing the same, [20] but under
  Section 1, Rule 19 of the Rules of Court, the courts are nevertheless mandated to consider several factors in determining whether or not to allow
WHEREFORE, the Motion for Reconsideration and Motion for Clarification and Intervention are hereby intervention. The factors that should be reckoned are whether intervention will unduly delay or prejudice the adjudication of the rights of the original
DENIED for lack of merit. parties and whether the intervenors rights may be fully protected in a separate proceeding.
SO ORDERED.[17]  
  Keeping these factors in mind, the courts have to give much consideration to the fact that actions for ejectment are designed
Hence, herein petition anchored on the following assignment of errors: to summarily restore physical possession to one who has been illegally deprived of such possession. [21] It is primarily a quieting process intended to provide
  an expeditious manner for protecting possession or right to possession without involvement of the title. [22] In Five Star Marketing Co., Inc. v. Booc,[23] the
1. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR Court elucidated the purpose of actions for ejectment in this wise:
EXCESS OF JURISDICTION WHEN IT INCLUDED PETITIONER IN ITS ADVERSE JUDGMENT IN  
VIOLATION OF THE LATTERS CONSTITUTIONAL RIGHT TO DUE PROCESS DESPITE THE FACT Forcible entry and unlawful detainer cases are summary proceedings designed to provide for an expeditious
THAT PETITIONER WAS NOT PRIVY TO THE INSTANT CASE AND DOES NOT DERIVE HER RIGHT means of protecting actual possession or the right to the possession of the property involved. It does not admit of a delay in
TO STAY IN THE CONTESTED PROPERTY FROM THE SPOUSES DELFIN AND CARMEN the determination thereof. It is a time procedure designed to remedy the situation. Stated in another way, the avowed
FERNANDEZ. objective of actions for forcible entry and unlawful detainer, which have purposely been made summary in nature, is
  to provide a peaceful, speedy and expeditious means of preventing an alleged illegal possessor of property from
2. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR unjustly continuing his possession for a long time, thereby ensuring the maintenance of peace and order in the
EXCESS OF JURISDICTION WHEN IT DENIED THE MOTION FOR INTERVENTION BY PETITIONER community; otherwise, the party illegally deprived of possession might feel the despair of long waiting and decide as a
DESPITE THE FACT IT WAS ONLY BY VIRTUE OF ITS DECISION DATED JUNE 27, 2003 THAT measure of self-protection to take the law into his hands and seize the same by force and violence. And since the law
PETITIONER WAS INCLUDED IN THE EJECTMENT PROCEEDINGS, AND THE EARLIEST discourages continued wrangling over possession of property for it involves perturbation of social order which must be restored
OPPURTUNE TIME WHEN PETITIONER COULD HAVE INTERVENED WAS AFTER THE COURT OF as promptly as possible, technicalities or details of procedure which may cause unnecessary delays should accordingly
APPEALS RULED AGAINST HER. and carefully be avoided.[24] (Emphasis supplied)
   
3. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR Thus, as stated above, ejectment cases must be resolved with great dispatch.
EXCESS OF JURISDICTION WHEN IT DID NOT TAKE INTO ACCOUNT THE ISSUE OF OWNERSHIP  
IN RESOLVING THE ISSUE OF WHO HAS BETTER POSSESSION. Moreover, petitioner's intervention in the ejectment case would not result in a complete adjudication of her rights. The issue raised by petitioner
  is mainly that of ownership, claiming that the property in dispute was registered and titled in the name of respondents through the use of fraud.Such issue
4. THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR cannot even be properly threshed out in an action for ejectment, as Section 18, Rule 70 provides that [t]he judgment rendered in an action for forcible entry or
EXCESS OF JURISDICTION WHEN IT DID NOT SUSPEND THE CASE DESPITE THE EQUITABLE detainer shall be conclusive with respect to the possession only and shall in no wise bind the title or affect the ownership of the land or building. x x
CIRCUMSTANCES PRESENT IN THE CASE AT BAR IN THE LIGHT OF THE AMAGAN VS. x In Malison v. Court of Appeals,[25] the Court held thus:
MARAMAG CASE.[18]  
Petitioner contends that the CA committed grave abuse of discretion when it included petitioner in its decision despite the fact that she is not a Verily, in ejectment cases, the word possession means nothing more than actual physical possession, not legal
party in the ejectment case, thus, violating her right to due process; and considering that the court did not acquire jurisdiction over her person, she cannot be possession, in the sense contemplated in civil law. The only issue in such cases is who is entitled to the physical or material
bound by the Decision of the CA. possession of the property involved, independently of any claim of ownership set forth by any of the party-litigants. It does not
  even matter if the party's title to the property is questionable.[26] (Emphasis supplied)
Petitioner also asserts that the CA committed grave abuse of discretion amounting to lack or excess of jurisdiction when it denied petitioners  
motion for clarification and intervention. According to her, she was constrained to file a motion for clarification and intervention because the CA included her Hence, a just and complete determination of petitioner's rights could actually be had in the action for annulment, revocation and reconveyance of title that she
in its decision in spite of the fact that she was not impleaded as a party to the unlawful detainer case. had previously filed, not in the instant action for ejectment.
   
Petitioner ascribes grave abuse of discretion when the CA failed to resolve the issue of ownership in order to determine the party who has the It is likewise for this reason that petitioner is not an indispensable party in the instant case. The records bear out that the disputed property is in
better right to possess the subject property. She asserts that the CA should have suspended the unlawful detainer case since the ownership of the subject the possession of Spouses Fernandez. Even petitioner does not allege that she was in the possession of subject premises prior to or during the commencement
property is in issue. of the ejectment proceedings. Since her claim of ownership cannot be properly adjudicated in said action, she is, therefore, not an indispensable party therein.
   
Finally, petitioner maintains that she is the owner of the property by virtue of Transfer Certificate of Title No. 9937 issued on October 2, It is also misleading for petitioner to say that the earliest opportune time when petitioner could have intervened was after the CA ordered her to
1947 by the Register of Deeds of Manila. Hence, as the owner of the subject property, she has all the right to use, the right to allow others to use and the right vacate the subject property in its Decision dated June 27, 2003. As early as when the sheriff attempted to implement the writ of execution pending appeal
issued by the RTC, when she pleaded not to be evicted from the subject premises, she already became aware that the RTC had ordered to place respondents in
possession of the subject property pending appeal with the RTC. That would have been the proper time for her to intervene if she truly believed that her
interests would be best protected by being a party to the ejectment case.
 
Verily, allowing petitioner's intervention at this late stage of the ejectment proceedings would only cause undue delay without affording
petitioner the relief sought since the issue of ownership cannot be determined with finality in the unlawful detainer case.
 
There is also no merit to petitioner's argument that it was grave abuse of discretion for the CA to include her in its
Decision because she is not a party to the ejectment case, and neither is she claiming right to possession under the Spouses
Fernandez, but as its alleged rightful owner.
 
Note that the MeTC, RTC, and the CA unanimously found that the disputed property is presently registered under the Torrens System in the
name of respondents. The lower courts then concluded that respondents presented the best proof to establish the right to possess the same.  It should be borne
in mind that unless the case falls under one of the recognized exceptions, to wit:
 
(1) when the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference
made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based
on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when in making its findings the Court of
Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee;
(7) when the findings are contrary to the trial court; (8) when the findings are conclusions without citation of specific evidence
on which they are based; (9) when the facts set forth in the petition as well as in the petitioners main and reply briefs are not
disputed by the respondent; (10) when the findings of fact are premised on the supposed absence of evidence and contradicted
by the evidence on record; and (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the
parties, which, if properly considered, would justify a different conclusion.[27]
 
factual findings of the trial court are conclusive on the parties and not reviewable by this Court, more so when the CA affirms the factual findings of the trial
court.[28] This case does not fall under any of the exceptions, thus, the factual finding of the lower courts, that the new registered owners of the subject premises
are respondents, must be respected and upheld by this Court.
 
In Malison, the Court emphasized that when property is registered under the Torrens system, the registered owner's title to the property is
presumed legal and cannot be collaterally attacked, especially in a mere action for unlawful detainer. [29] In this particular action where petitioner's alleged
ownership cannot be established, coupled with the presumption that respondents' title to the property is legal, then the lower courts are correct in ruling that
respondents are the ones entitled to possession of the subject premises.
 
Petitioner's ownership not having been fully established in this case, she cannot, therefore, claim that the lower court's decision divesting the
Spouses Fernandez of possession should not apply to her. In Stilgrove v. Sabas,[30] the Court held that:
 
A judgment directing a party to deliver possession of a property to another is in personam. x x x Any
judgment therein is binding only upon the parties properly impleaded and duly heard or given an opportunity to be
heard. However, this rule admits of the exception, such that even a non-party may be bound by the judgment in an
ejectment suit where he is any of the following: (a) trespasser, squatter or agent of the defendant fraudulently occupying
the property to frustrate the judgment; (b) guest or occupant of the premises with the permission of the defendant; (c)
transferee pendente lite; (d) sublessee; (e) co-lessee; or (f) member of the family, relative or privy of the defendant.
[31]
 (Emphasis supplied)
 
Of particular significance is the fact that in Spouses Fernandez's Answer, they never alleged that petitioner was in actual possession of the
disputed property. In fact, in said Answer, they stated that it was Delfin Fernandez, Jr. who has continuously occupied the premises since time immemorial
and that petitioner resides in her house in Dasmarias, Cavite. Likewise worthy of note is the fact that the Spouses Fernandez never refuted in their Opposition
to Amended Motion to Break Open the allegation of respondents that petitioner was merely fetched by the Spouses Fernandez from her residence in
Dasmarias, Cavite on the day (February 20, 2003) that the sheriff was to implement the writ of execution, and placed her inside the subject premises so the old
woman could plead for mercy from the executing sheriff. In the petition for review dated April 3, 2003 filed with the CA, Spouses Fernandez admitted that it
was only after the RTC issued its Order dated February 10, 2003, denying the motion for reconsideration of the Order for issuance of the writ of execution, that
petitioner took possession of the subject premises.[32]
 
Taking the foregoing into account, it is clear that petitioner, even though a non-party, is bound by the judgment because aside from being a
relative of or privy to Spouses Fernandez, she is also acting as their agent when she occupied the property after the RTC ordered execution pending appeal in
order to frustrate the judgment.
 
WHEREFORE, the petition for review on certiorari is DENIED. The assailed Decision of the Court of Appeals dated June 27, 2003
affirming the decision of the Regional Trial Court and its Resolution dated September 3, 2003 in CA-G.R. SP No. 76336, denying the petition for clarification
and intervention filed by Sofia Aniosa Salandanan, are AFFIRMED.
 
Cost against petitioner.
 
SO ORDERED.
 Republic of the Philippines a. Declaring herein intervenors as the true, legal and legitimate heirs of the late spouses Estanislao Mioza
Supreme Court and Inocencia Togono;
Manila  
  b. Declaring herein intervenors as the true, rightful and registered owners of Lots 986 and 991-A of the
SECOND DIVISION Banilad Friar Lands Estate;
   
MACTAN-CEBU INTERNATIONAL AIRPORT G.R. No. 186045 c. Declaring the Extrajudicial Settlement executed on January 21, 1958 by the late Adriana Mioza and
AUTHORITY, Present: the late Patricio Mioza and the late Santiago Mioza that they are the only heirs of the late spouses
Petitioner,   Estanislao Mioza and Inocencia Togono, who died intestate and without any debts or obligations and
  CARPIO, J., Chairperson, adjudicating among themselves the estate of the deceased x x x as void ab initio;
-         versus - NACHURA,  
  PERALTA, d. Declaring the sale of Lots 986 and 991-A of the Banilad Friar Lands Estate executed by the late
  ABAD, and Adriana Mioza, the late Patricio Mioza and the late Santiago Mioza in favor of the National Airport
  MENDOZA, JJ. Corporation on February 15, 1958 x x x as void ab initio;
HEIRS of ESTANISLAO MIOZA, namely: The HEIRS of    
FILOMENO T. MIOZA, represented by LAUREANO   e. Ordering the cancellation of Transfer Certificate of Title Nos. 120370 and 120372 for Lots 986 and
M. MIOZA; The HEIRS of PEDRO T. MIOZA; and The   991-A in the name of the Mactan-Cebu International Airport Authority and restoring Transfer Certificate
HEIRS of FLORENCIA T. MIOZA, represented by   of Title Nos. RT-6101 (T-10534) and RT-6102 (T-10026) to be the true and valid torrens titles to Lots
ANTONIO M. URBIZTONDO,   986 and 991-[A].
Respondents. Promulgated:  
  f. Condemning plaintiffs Leila M. Hermosisima and Constancio Mioza to pay intervenors, who are the
February 2, 2011 true, lawful and legitimate heirs of the late Spouses Estanislao Mioza and Inocencia Togono, the
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x amounts of P300,000.00 and P100,000.00 as moral and exemplary damages respectively;
   
DECISION g. Condemning plaintiffs to pay the cost of suit.[6]
   
  On February 18, 2000, the RTC of Cebu City, Branch 22, issued an Order[7] denying the Motion for Intervention.
PERALTA, J.:  
  In denying the motion, the trial court opined that the ownership of the subject lots was merely a collateral issue in the
This is a petition for review on certiorari seeking to reverse and set aside the Decision[1] dated March 25, 2008 of the action. The principal issue to be resolved was whether or not the heirs of the late Estanislao Mioza whoever they may be have a
Court of Appeals (CA) in CA-G.R. CV No. 70429, and the Resolution [2] dated January 8, 2009 denying petitioners motion for right to repurchase the said lots from the MCIAA. Consequently, the rights being claimed by the intervenors should be asserted in
reconsideration. and would be fully protected by a separate proceeding. Moreover, if the motion was granted, it would unduly delay the
The procedural and factual antecedents, as found by the CA, are as follows: proceedings in the instant case. Finally, the complaint-in-intervention was flawed, considering that it was not verified and does not
  contain the requisite certification of non-forum shopping.
On July 6, 1998, a Complaint[3] for Reconveyance, Cancellation of Defendants Title, Issuance of New Title to  
Plaintiffs and Damages was filed by Leila M. Hermosisima (Leila) for herself and on behalf of the other heirs of the late Estanislao The intervenors filed a Motion for Reconsideration,[8] to which was attached a Complaint-in-Intervention with the
Mioza. The complaint alleged that Leilas late great grandfather, Estanislao Mioza, was the registered owner of Cadastral Lot Nos. required Verification and Certificate of Non-Forum Shopping.[9] However, the RTC denied the motion in its Order dated July 25,
986 and 991-A, located at Banilad Estate, Cebu City, per TCT Nos. RT-6101 (T-10534) and RT-6102 (T10026). It was, likewise, 2000.
alleged that the late Estanislao Mioza had three children, namely, Adriana, Patricio, and Santiago, all surnamed Mioza.  In the late  
1940s, the National Airports Corporation (NAC) embarked in an expansion project of the Lahug Airport. For said purpose, the Aggrieved, the intervenors sought recourse before the CA, docketed as CA-G.R. CV No. 70429, on the following
NAC acquired several properties which surrounded the airport either through negotiated sale or through expropriation. Among the assignment of errors:
properties that were acquired by the NAC through a negotiated sale were Lot Nos. 986 and 991-A.[4]  
  I.
Leila claimed that their predecessors-in-interest, specifically, Adriana, Patricio, and Santiago executed a Deed of Sale  
on February 15, 1950 conveying the subject lots to the NAC on the assurance made by the latter that they (Leilas predecessors-in- THE COURT A QUO IN ITS ORDER DATED FEBRUARY 18, 2000 GRAVELY ERRED IN
interest) can buy the properties back if the lots are no longer needed. Consequently, they sold Lot No. 986 to the NAC for DISMISSING THE ABOVE CAPTIONED COMPLAINT BASED ON THE GROUND THAT: 1).
only P157.20 and Lot No. 991-A for P105.40. However, the expansion project did not push through. More than forty years after THE RIGHTS CLAIMED BY MOVANTS-INTERVERNORS (NOW INTERVENORS-
the sale, plaintiffs informed the NACs successor-in-interest, the Mactan-Cebu International Airport Authority (MCIAA), that they APPELLANTS) WOULD MORE APPROPRIATELY BE ASSERTED IN, AND WOULD BE FULLY
were exercising the buy-back option of the agreement, but the MCIAA refused to allow the repurchase on the ground that the sale PROTECTED BY, A SEPARATE PROCEEDING; 2). IT (THE COMPLAINT-IN-INTERVENTION)
was in fact unconditional. WILL DELAY THE PROCEEDINGS OF THE INSTANT CASE; AND 3). THAT THE COMPLAINT-
The MCIAA, through the Office of the Solicitor General (OSG), filed an Answer with Counterclaim. IN-INTERVENTION IS NOT VERIFIED AND DOES NOT CONTAIN THE REQUISITE
After the parties filed their respective pleadings, trial ensued. CERTIFICATION OF NON-FORUM SHOPPING.
On November 16, 1999, before the MCIAA could present evidence in support of its case, a Motion for Intervention,  
[5]
 with an attached Complainant-in-Intervention, was filed before the Regional Trial Court (RTC) of Cebu City, Branch 22, by the  
heirs of Filomeno T. Mioza, represented by Laureano M. Mioza; the heirs of Pedro T, Mioza, represented by Leoncio J. Mioza; II.
and the Heirs of Florencia T. Mioza, represented by Antonio M. Urbiztondo (Intervenors), who claimed to be the true, legal, and  
legitimate heirs of the late Estanislao Mioza. The intervenors alleged in their complaint (1) that the plaintiffs in the main case are THE COURT A QUO IN ITS ORDER DATED JULY 25, 2000 GRAVELY ERRED WHEN IT
not related to the late spouses Estanislao Mioza and Inocencia Togono whose true and legitimate children were: Filomeno, Pedro, DENIED MOVANTS-INTERVENORS (NOW INTERVENORS-APPELLANTS) MOTION FOR
and Florencia, all surnamed Mioza; (2) that, on January 21, 1958, Adriana, Patricio, and Santiago, executed, in fraud of the RECONSIDERATION DATED MARCH 20, 2000, AGAIN ON THE GROUND THAT TO ALLOW
intervenors, an Extrajudicial Settlement of the Estate of the late spouses Estanislao Mioza and Inocencia Togono and adjudicated THE INTERVENORS TO INTERVENE IN THIS CASE WHICH IS ALREADY SUBMITTED FOR
unto themselves the estate of the deceased spouses; and (3) that, on February 15, 1958, the same Adriana, Patricio, and Santiago, DECISION WOULD ONLY DELAY THE DISPOSAL OF THIS CASE AND THAT ANYWAY, THE
fraudulently, deceitfully, and in bad faith, sold Lot Nos. 986 and 991-A to the NAC. The intervenors thus prayed for the following INTERVERNORS HAVE NOTHING TO FEAR BECAUSE THEIR CLAIMS, IF THERE IS ANY,
reliefs: CAN BE WELL THRESHED OUT IN ANOTHER PROCEEDING.[10]
  On March 25, 2008, the CA rendered the assailed Decision, the decretal portion of which provides:
 
 WHEREFORE, the appealed Orders dated February 18, 2000 and July 25, 2000 of the claiming what is sought by the complaint, or uniting with defendant in resisting the claims of plaintiff, or demanding something
RTC of Cebu City, in Civil Case No. 22290, are REVERSED and SET ASIDE. The RTC of Cebu City adversely to both of them; the act or proceeding by which a third person becomes a party in a suit pending between others; the
is directed to resolve with deliberate dispatch Civil Case No. 22290 and to admit the complaint-in- admission, by leave of court, of a person not an original party to pending legal proceedings, by which such person becomes a party
intervention filed by the intervenors-appellants. thereto for the protection of some right of interest alleged by him to be affected by such proceedings.[17]
   
SO ORDERED.[11] Section 1, Rule 19 of the Rules of Court states:
   
In ruling for the intervenors, the CA ratiocinated that contrary to the findings of the trial court, the determination of SECTION 1. Who may intervene. A person who has a legal interest in the matter in litigation, or
the true heirs of the late Estanislao Mioza is not only a collateral, but the focal issue of the case, for if the intervenors can prove in the success of either of the parties, or an interest against both, or is so situated as to be adversely
that they are indeed the true heirs of Estanislao Mioza, there would be no more need to determine whether the right to buy back the affected by a distribution or other disposition of property in the custody of the court or of an officer
subject lots exists or not as the MCIAA would not have acquired rights to the subject lots in the first place.  In addition, to grant the thereof may, with leave of court, be allowed to intervene in the action. The court shall consider whether
motion for intervention would avoid multiplicity of suits. As to the lack of verification and certification on non-forum shopping, or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties,
the CA opined that the filing of the motion for reconsideration with an appended complaint-in-intervention containing the required and whether or not the intervenors rights may be fully protected in a separate proceeding.
verification and certificate of non-forum shopping amounted to substantial compliance of the Rules.  
  Under this Rule, intervention shall be allowed when a person has (1) a legal interest in the matter in litigation; (2) or
Petitioner then filed a motion for reconsideration, but it was denied in the Resolution dated January 8, 2009. in the success of any of the parties; (3) or an interest against the parties; (4) or when he is so situated as to be adversely affected by
  a distribution or disposition of property in the custody of the court or an officer thereof. [18] Moreover, the court must take into
Hence, the petition assigning the lone error that: consideration whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties,
  and whether or not the intervenors right or interest can be adequately pursued and protected in a separate proceeding.
THE COURT OF APPEALS (CEBU CITY) GRAVELY ERRED IN ALLOWING RESPONDENTS  
TO INTERVENE IN CIVIL CASE NO. CEB-22290.[12] In the case at bar, the intervenors are claiming that they are the legitimate heirs of Estanislao Mioza and Inocencia
  Togono and not the original plaintiffs represented by Leila Hermosisima. True, if their allegations were later proven to be valid
  claims, the intervenors would surely have a legal interest in the matter in litigation.  Nonetheless, this Court has ruled that the
Petitioner argues that to allow the intervenors to intervene in the proceedings before the trial court would not only interest contemplated by law must be actual, substantial, material, direct and immediate, and not simply contingent or expectant. It
unduly prolong and delay the resolution of the case, it would make the proceedings unnecessarily complicated and change the must be of such direct and immediate character that the intervenor will either gain or lose by the direct legal operation and effect
nature of the proceedings. Furthermore, contrary to the requirements for the allowance of a motion for intervention, their legal of the judgment.[19] Otherwise, if persons not parties to the action were allowed to intervene, proceedings would become
interest in the subject properties appear to be merely contingent or expectant and not of direct or immediate character. Petitioner unnecessarily complicated, expensive and interminable.[20]
also posits that the intervenors rights can be better protected in another proceeding.  
  Moreover, the intervenors contentions that Leilas predecessors-in-interest executed, in fraud of the intervenors, an
Anent the lack of verification and certification on non-forum shopping, petitioner maintains that the trial court was extra judicial settlement of the estate of the late spouses Estanislao Mioza and Inocencia Togono and adjudicated unto themselves
correct in denying the motion on this ground. In addition, even if the complaint-in-intervention with the required verification and the estate of the deceased spouses, and that subsequently, her predecessors-in-interest fraudulently and deceitfully sold the subject
certificate of non-forum shopping was appended to the intervenors motion for reconsideration, the complaint-in-intervention was lots to the NAC, would unnecessarily complicate and change the nature of the proceedings.
not verified by all the interested parties or all the heirs of Filomeno Mioza, which still warrants its dismissal.  
  In addition to resolving who the true and legitimate heirs of Estanislao Mioza and Inocencia Togono are, the parties
The petition is meritorious. would also present additional evidence in support of this new allegation of fraud, deceit, and bad faith and resolve issues of
  conflicting claims of ownership, authenticity of certificates of titles, and regularity in their acquisition. Verily, this would
At the outset, on the procedural aspect, contrary to petitioners contention, the initial lack of the complaint-in- definitely cause unjust delay in the adjudication of the rights claimed by the original parties, which primarily hinges only on the
intervention of the requisite verification and certification on non-forum shopping was cured when the intervenors, in their motion issue of whether or not the heirs represented by Leila have a right to repurchase the subject properties from the MCIAA.
for reconsideration of the order denying the motion to intervene, appended a complaint-in-intervention containing the required  
verification and certificate of non-forum shopping. Verily, the allegation of fraud and deceit is an independent controversy between the original parties and the
  intervenors. In general, an independent controversy cannot be injected into a suit by intervention, hence, such intervention will not
In the case of Altres v. Empleo,[13] this Court clarified, among other things, that as to verification, non-compliance be allowed where it would enlarge the issues in the action and expand the scope of the remedies.  It is not proper where there are
therewith or a defect therein does not necessarily render the pleading fatally defective. The court may order its submission or certain facts giving the intervenors case an aspect peculiar to himself and differentiating it clearly from that of the original parties;
correction, or act on the pleading if the attending circumstances are such that strict compliance with the Rule may be dispensed the proper course is for the would-be intervenor to litigate his claim in a separate suit. [21] Intervention is not intended to change the
with in order that the ends of justice may be served thereby. Further, a verification is deemed substantially complied with when nature and character of the action itself, or to stop or delay the placid operation of the machinery of the trial. The remedy of
one who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification, and when intervention is not proper where it will have the effect of retarding the principal suit or delaying the trial of the action.[22]
matters alleged in the petition have been made in good faith or are true and correct.[14]  
  To be sure, not only will the intervenors rights be fully protected in a separate proceeding, it would best determine the
Moreover, as to the certification against forum shopping, non-compliance therewith or a defect therein, unlike in rights of the parties in relation to the subject properties and the issue of who the legitimate heirs of Estanislao Mioza and Inocencia
verification, is generally not curable by its subsequent submission or correction thereof, unless there is a need to relax the Rules on Togono, would be laid to rest.
the ground of substantial compliance or presence of special circumstances or compelling reasons. Also, the certification against  
forum shopping must be signed by all the plaintiffs or petitioners in a case; otherwise, those who did not sign will be dropped as Furthermore, the allowance or disallowance of a motion for intervention rests on the sound discretion of the court
parties to the case. Under reasonable or justifiable circumstances, however, as when all the plaintiffs or petitioners share a after consideration of the appropriate circumstances.[23] It is not an absolute right. The statutory rules or conditions for the right of
common interest and invoke a common cause of action or defense, the signature of only one of them in the certification against intervention must be shown. The procedure to secure the right to intervene is to a great extent fixed by the statute or rule, and
forum shopping substantially complies with the Rule.[15] intervention can, as a rule, be secured only in accordance with the terms of the applicable provision.[24]
   
Thus, considering that the intervenors in their motion for reconsideration, appended a complaint-in-intervention with Consequently, the denial of the motion to intervene by the RTC was but just and proper. The conclusion of the RTC
the required verification and certificate of non-forum shopping, the requirement of the Rule was substantially complied with. is not bereft of rational bases. It denied the motion to intervene in the exercise of its sound discretion and after taking into
  consideration the particular circumstances of the case.
Notwithstanding the intervenors compliance with the procedural requirements, their attempt to intervene is doomed to  
fail. WHEREFORE, subject to the above disquisition, the petition is GRANTED. The Decision dated March 25, 2008
  and the Resolution dated January 8, 2009, of the Court of Appeals in CA-G.R. CV No. 70429, are REVERSED and SET
Intervention is a remedy by which a third party, not originally impleaded in the proceedings, becomes a litigant ASIDE. The Orders of the Regional Trial Court of Cebu City, Branch 22, dated February 18, 2000 and July 25, 2000,
therein to enable him, her or it to protect or preserve a right or interest which may be affected by such proceedings. [16] It is a are REINSTATED.
proceeding in a suit or action by which a third person is permitted by the court to make himself a party, either joining plaintiff in  
SO ORDERED.
 On February 16, 1997, the GSIS filed a motion for reconsideration but the trial court denied the same, prompting the GSIS to file,
FIRST DIVISION on June 11, 1998, a petition for certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 47669.
   
  However, on November 24, 1998, the Court of Appeals dismissed the petition for the following reasons: (1) the petition was filed
GOVERNMENT SERVICE G.R. No. 175989 out of time; (2) the Verification and Certification of Non-Forum Shopping were not signed by an authorized officer of the GSIS;
INSURANCE SYSTEM,   (3) no copy of the questioned writ of execution dated April 24, 1995 was attached to the petition; (4) the copy of the Order dated
Petitioner, Present: January 16, 1997 is not a certified true copy; (5) petitioner did not rebut BENGSONs evidence; and (6) the assailed Order of April
    6, 1995 has become final and executory.
  PUNO, C.J., Chairperson,  
  SANDOVAL-GUTIERREZ, The GSIS filed a motion for reconsideration, but this was denied by the Court of Appeals in a Resolution dated January 29, 1999.
-         versus - CORONA, The GSIS then filed a petition for review on certiorari with the Supreme Court, docketed as G.R. No. 137448.
  AZCUNA, and  
  LEONARDO-DE CASTRO, JJ. Meanwhile, on December 16, 1998, the trial court issued an Order directing the issuance of an alias writ of execution for the
    satisfaction of the award of P31 million representing the costs of suit awarded to BENGSON in its Order of April 6, 1995. The
    sheriff then garnished the 6.2 million Class A shares of stock of San Miguel Corporation owned by the GSIS. They were sold at
MARIANO A. NOCOM, Promulgated: public auction, with BENGSON as the sole bidder.
Respondent. February 4, 2008 The GSIS filed a motion for reconsideration with motion to quash the alias writ of execution, but this was denied by the trial court
    on January 8, 1999. Hence, the GSIS filed with the Supreme Court a petition for certiorari docketed as G.R. No. 136874, seeking
x --------------------------------------------------------------------------------x to annul both the December 16, 1998 and January 8, 1999 Orders of the trial court directing the execution of its April 6, 1995
  Order and the issuance of the corresponding writ of execution.
DECISION  
  On January 21, 1999, this Court issued a Temporary Restraining Order (TRO) enjoining the implementation of the April 6,
SANDOVAL-GUTIERREZ, J.: 1995 Order (directing the transfer, registration, or issuance of new certificates of stock in the name of BENGSON). Thereafter,
  this Court referred the petition for certiorari in G.R. No. 136874 to the Court of Appeals for adjudication. It was then re-docketed
Before us is a petition for review on certiorari seeking to reverse the Decision[1] of the Court of Appeals (Eleventh as CA-G.R. SP No. 51131.
Division) promulgated on October 2, 2006 in CA-G.R. SP No. 87698.  
  In its Decision on January 14, 2000, the trial court dismissed the petition of the GSIS in CA-G.R. SP No. 51131. Consequently,
The instant case is inextricably linked with two earlier consolidated cases filed with this Court - G.R. No. 137448 (GSIS v. the GSIS filed with this Court a petition for certiorari with very urgent motion for the issuance of preliminary injunction and/or
Bengson Commercial Buildings, Inc.) and G.R. No. 141454 (GSIS v. Court of Appeals). Both were decided by the Court en TRO, docketed as G.R. No. 141454. Forthwith, this case was consolidated with G.R. No. 137448.
banc on January 31, 2002.[2] Accordingly, we adopt the factual findings in these cases.  
  On January 31, 2002, the Supreme Court rendered a Decision in G.R. Nos. 137448 and 141454, granting the petitions. This Court
Bengson Commercial Buildings, Inc. (BENGSON) obtained loans from the Government Service Insurance System (GSIS), herein held:
petitioner, on August 20, 1965 and November 23, 1971 in the amounts of P1.25 million and P3 million, respectively, or in the  
aggregate sum of P4.25 million. As security for the payment of these loans, BENGSON executed real estate and chattel mortgages Similarly, in the higher interest of justice and equity, and the ground for relief from the 6
in favor of the GSIS. For BENGSONs failure to settle its arrearages despite due notices, the mortgages were extrajudicially April 1995 Order of the trial court being evident, we shall reverse and set aside the 24 November 1998
foreclosed. Its properties then were sold at public auction to the highest bidder, the GSIS itself. A certificate of sale and new and 8 January 1999 Resolutions of the Court of Appeals, as well as the 16 January 1997 Decision and 23
certificates of title were thereafter issued in its name. April 1998 Order of the trial court. We shall then remand the case to the trial court, and pursuant to
  Section 6 of Rule 38 of the 1997 Rules of Civil Procedure the case shall stand as if the 6 April
On June 23, 1977, BENGSON filed with the then Court of First of Instance of San Fernando, La Union an action for annulment of 1995 Order has never been issued. Thereafter, the court shall proceed to hear and determine the case as
the auction sale, docketed as Civil Case No. 2794. Later on, the case was transferred to the Regional Trial Court (RTC), Branch if a timely motion for a new trial or reconsideration has been granted by it.
20, also in San Fernando, La Union. After hearing, it rendered a Decision (1) nullifying the auction sale of BENGSON's  
mortgaged properties; (2) ordering the cancellation of the titles issued to the GSIS and the issuance of new ones in the name of  
BENGSON; (3) ordering BENGSON to pay the GSIS P900,000 for the debenture bonds; and (4) ordering GSIS to (a) restore to The dispositive portion of the decision reads:
BENGSON full possession of the foreclosed properties; (b) restructure the P4.25 million loans with legal rate of interest from the  
finality of the judgment; (c) pay BENGSON P1.9 million representing accrued monthly rentals and P20,000 monthly rental until WHEREFORE, the petitions at bar are GRANTED. The Resolutions of the Court of Appeals dated 24
the properties are restored to BENGSONs possession, and (d) pay the costs of the suit. November 1998, 8 January 1999, and 14 January 2000, as well as the 16 January 1997 and 23 April 1998
  Orders of the Regional Trial Court, Branch 26, San Fernando, La Union, are hereby REVERSED and
On appeal, docketed as CA-G.R. CV No. 09361, the Court of Appeals rendered its Decision affirming the RTC judgment with SET ASIDE. The cases are hereby ordered remanded to the trial court, which shall then proceed to hear
modification. The appellate court ordered the remand of the case to the trial court for reception of evidence to determine the costs and determine the case as if a timely motion for a new trial or reconsideration has been granted by it.
of suit. On February 10, 1988, the Decision of the Court of Appeals became final and executory. Since the issues raised in CA-G.R. SP No. 51131 are irretrievably linked with, or are but a consequence
  of the 6 April 1995 Order of the trial court, the said case shall be suspended or held in abeyance until
On April 6, 1995, the trial court issued an Order awarding BENGSON P31 million as costs of suit. While Atty. Rogelio Terrado, after the aforementioned proceedings in the trial court shall have been finally resolved. The Temporary
counsel for GSIS, received a copy of the Order on the same date, however, he did not file a motion for reconsideration. It turned Restraining Order we issued on 7 February 2000 shall remain in effect until further orders from this
out that he was absent without official leave since April 6, 1995. Hence, the Order became final and executory. Eventually, court.
BENGSONs ex parte motion for the issuance of a writ of execution was granted by the trial court. SO ORDERED.
   
On May 4, 1995, the GSIS received a copy of the Order of execution. Hence, on May 15, 1995, the GSIS, through its corporate The records were eventually remanded to the trial court for hearing to determine the merits of the case.
counsel, Atty. Oscar Garcia, filed with the trial court an urgent omnibus motion. Attached thereto was an affidavit of merit On March 19, 2004, in the course of the proceedings, Mariano A. Nocom, respondent herein, filed a motion for
executed by Margarito C. Recto, manager of the GSIS Legal Services Group, praying that the motion should be considered as a intervention. Attached thereto is his Complaint-in-Intervention.
petition for relief from the April 6, 1995 Order and that Atty. Terrados gross negligence should not bind the GSIS, for to do so  
would result in the deprivation of its properties without due process. The GSIS filed its opposition, but in an Order dated June 14, 2004, the trial court denied the same and admitted the Complaint-in-
  Intervention.
On January 16, 1997, the trial court issued an Order denying the GSISs urgent omnibus motion on the ground, among others, that  
the questioned Order of April 6, 1995 has attained finality. The GSIS received a copy of the Order on February 4, 1997. The GSIS then filed a motion for reconsideration, but it was denied in an Order dated September 8, 2004.
   
On October 27, 2004, the trial court rendered a Partial Decision, the dispositive portion of which reads: Petitioner,  
    Present:
WHEREFORE, and in view of all the foregoing, the Order of this Court dated April 06, 1995, awarding    
the amount of THIRTY-ONE MILLION PESOS (P31,000,000.00) as costs of suit to plaintiff is hereby - versus - CORONA, J., Chairperson,
reinstated. Considering, however, that the garnished SIX POINT TWO (6.2) MILLION Class A SMC   VELASCO, JR.,
shares of defendant GSIS had already been sold to plaintiff at public auction for the satisfaction of the   NACHURA,
Alias Writ of Execution by virtue of the above-mentioned Order, the awarded costs of suit is hereby MAXIMO D. SISON, PERALTA, and
declared paid and satisfied. Respondent. MENDOZA, JJ.
In view thereof, let an Entry of Satisfaction of Judgment under Section 44 of Rule 39 of the Revised    
Rules of Court be entered in the record of the case.   Promulgated:
SO ORDERED. February 16, 2010
  x-----------------------------------------------------------------------------------------x
   
The GSIS moved for reconsideration, but it was denied by the trial court. The GSIS then interposed an appeal to the Court of DECISION
Appeals, docketed as CA-G.R. CV No. 8462. This case is still pending resolution.  
  VELASCO, JR., J.:
Meanwhile, on November 23, 2004, the GSIS filed a petition for certiorari and prohibition with the Court of Appeals, docketed as  
CA-G.R. SP No. 87698, contending that the trial court gravely abused its discretion in allowing respondent Nocom to The Case
intervene.However, the Court of Appeals denied the petition in its Resolution of October 2, 2006.  
  Before us is a Petition for Review on Certiorari under Rule 45 assailing and seeking to set aside the
Hence, the instant petition anchored on the sole issue of whether the Court of Appeals erred in holding that respondent has a right Resolution[1] dated December 18, 2008 of the Court of Appeals (CA) in CA-G.R. SP No. 96611, entitled Maximo D. Sison v. Fr.
to intervene. Noel Labendia for Himself and in Representation of Isog Han Samar Movement, Diocese of Calbayog, Catbalogan, Samar . The
Intervention is a proceeding in a suit or action by which a third person is permitted by the court to make himself a party, either CA Resolution denied petitioner Office of the Ombudsmans Omnibus Motion for Intervention and to Admit Attached Motion for
joining plaintiff in claiming what is sought by the complaint, or uniting with defendant in resisting the claims of plaintiff, or Reconsideration of the CAs June 26, 2008 Decision.[2]
demanding something adversely to both of them; the act or proceeding by which a third person becomes a party in a suit pending  
between others; the admission, by leave of court, of a person not an original party to pending legal proceedings, by which such  
person becomes a party thereto for the protection of some right of interest, alleged by him to be affected by such proceedings.[3]  
  The Facts
Section 1, Rule 19 of the 1997 Rules of Civil Procedure, as amended, provides for the parameters before a person, not a party to a  
case, can intervene, thus: On October 11, 2004, the Isog Han Samar Movement, represented by Fr. Noel Labendia of the Diocese of Calbayog,
  Catbalogan, Samar, filed a letter-complaint addressed to then Ombudsman, Hon. Simeon Marcelo, accusing Governor Milagrosa
SEC. 1. Who may intervene. A person who has a legal interest in the matter in litigation, or in the success T. Tan and other local public officials[3] of the Province of Samar, including respondent Maximo D. Sison, of highly anomalous
of either of the parties, or an interest against both, or is so situated as to be adversely affected by a transactions entered into by them amounting to several millions of pesos. Sison was the Provincial Budget Officer.
distribution or other disposition of property in the custody of the court or of an officer thereof, may with  
leave of court, be allowed to intervene in the action. The court shall consider whether or not the The letter-complaint stemmed from the audit investigation dated August 13, 2004 conducted by the Legal and
intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and Adjudication Office (LAO), Commission on Audit (COA), which found, among others, that various purchases totaling PhP 29.34
whether or not the intervenors rights may be fully protected in a separate proceeding. million went without proper bidding procedures and documentations; that calamity funds were expended without a State of
  Calamity having been declared by the President; and that purchases for rice, medicines, electric fans, and cement were
  substantially overpriced.
In Alfelor v. Halasan,[4] we held that an intervention is valid when a person has: (1) a legal interest in the matter in litigation; (2) or  
in the success of any of the parties; (3) or an interest against the parties;  (4) or when he is so situated as to be adversely affected by The Special Audit Team, which was created under LAO Office Order No. 2003-059 dated July 7, 2003, summarized
a distribution or disposition of property in the custody of the court or an officer thereof. the corresponding COA audit findings and observations, to wit:
In Perez v. Court of Appeals,[5] this Court ruled that the legal interest which entitles a person to intervene must be in the matter in  
litigation and of such direct and immediate character that the intervenor will either gain or lose by direct legal operation and effect 1.      Rules and regulations pertaining to procurement of supplies and materials were consciously and
of judgment. continually violated as disclosed in the verification of selected purchases of the Province. Below
  were the findings and observations:
In the instant case, records show that BENGSON transferred and assigned 2,406,666 SMC Class A shares to respondent, as  
evidenced by their Memorandum of Agreement and Deed of Assignment executed on August 24, 1999. We recall that these shares a.       Purchases of various items, totaling at least PhP 29.34 million and allegedly procured
of stock in question were sold to BENGSON to satisfy the costs of suit awarded to it by the trial court in its April 6, through public bidding, were found highly irregular for lack of proper bidding
1995 Order. Clearly, respondent has an interest in the outcome of the case before the trial court. The Court of Appeals, therefore, procedures and documentation;
did not err in ruling that respondents motion for intervention is in order. b.      At least PhP 28.165 million worth of purchases through repeat orders were made by
  the Province without observing the pertinent law, rules and regulations governing this
WHEREFORE, we DENY the petition. The Decision of the Court of Appeals (Eleventh Division) promulgated on October 2, mode of procurement; and
2006 in CA-G.R. SP No. 87698 is AFFIRMED. Costs against the petitioner. c.       Emergency purchases of medicines and assorted goods totaling PhP 14.67 million
  were found not complying with the requirements set forth under the Rules and
SO ORDERED. Regulations on Supplies and Property Management in Local Governments
Republic of the Philippines (RRSPMLG). Moreover, the purchases were charged against the calamity fund,
SUPREME COURT despite absence of any declaration from the President that Samar was under a state of
Manila calamity, in violation of Sec. 324(d) of R.A. 7160.
   
  2.      Inconsistencies in the dates of supporting documents relating to the purchases discussed in finding
THIRD DIVISION No. 1 were so glaring that they raised doubts on the validity of the transactions per se;
   
 
OFFICE OF THE OMBUDSMAN,   G.R. No. 185954
 3.      The use of the 5% budgetary reserves for calamity as funding source of emergency purchases was Accordingly, Governor Milagrosa T. Tan and Executive Director Presentacion R. Montesa
not legally established, there being no declaration from the Office of the President that Samar was of the Bureau of Local Government Finance, Department of Finance, are respectfully directed to
under a state of calamity, as required under Sec. 324(d) of R.A. 7160; implement this Order upon receipt hereof and to forthwith inform the Office of compliance herewith.
   
4.      Splitting of requisitions and purchase orders was resorted to in violation of COA Circular No. 76- 2.      The administrative complaint against respondents MILAGROSA T. TAN, FE
41 dated July 30, 1976; ORTEGA TAN ARCALES, SUSANO DIMAKILING SALURIO, BARTOLOME P.
  FIGUEROA, ANTONIO DE LEON BOLASTIG, III, ROSENAIDA A. ROSALES
5.      There was overpricing in the purchase of rice, medicines, electric fans and cement in the amount of and BARTOLOME R. CASTILLO III is DISMISSED in view of their re-election in
PhP 580,000.00, PhP 322,760.00, PhP 341,040.00, and PhP 3.6 million, respectively. An May 2004;
overpayment was also committed in the payments of cement in the amount of PhP 96,364.09;  
  3.      The administrative complaint against ERNESTO CARCILLAR ARCALES, FELIX T.
6.      Other observations gathered corollary to the purchases made are the following: BABALCON, JR., JIMMY R. DY, JUAN COLINARES LATORRE, JR., MARIA
  LOURDES CORTEZ UY, BIENVENIDA P. REPOL and RAMON P. DEAN, JR.,
a.       Purchase Orders were not duly accomplished to include a complete description of the who are no longer public officials, is DISMISSED.
items to be purchased, the delivery date and the terms of payment, in violation of the  
provisions of Section 74 and other corollary provisions of RRSPMLG. Some were 4.      For insufficiency of evidence, the administrative complaint against ANAMIE P.
even acknowledged by suppliers; MANATAD-NUNEZ and ROSIE AMARO VILLACORTE is DISMISSED.
b.      At least 36 vouchers/claims were not supported with an official receipt, in violation of  
the provisions of Section 4 of PD 1445 that all disbursements must be supported with 5.      The Fact-Finding and Intelligence Office is DIRECTED to conduct further fact-
complete documentation; and finding investigations on the following:
c.       Advanced deliveries of medicines and assorted goods were made on some purchases  
even before the purchase orders were prepared and before the public biddings were a.       On DV Nos. 221-2002-12-083 and 221-2002-11-065: (a) to
conducted. DETERMINE the other public officials who may be held
  administratively liable; and (b) to FILE, if necessary, the corresponding
7.      The necessity and veracity of the distribution of t-shirts/caps, medicines, assorted goods and Complaint;
cement purchased by the Province of Samar could not be established due to rampant b.      On Bid Nos. 079-2002, 442-2002, 554-2002, 861-2002, 937-2002, 947-
inconsistencies in dates, quantities, as well as the signatures of the alleged recipients in the 2002, 1221-2002, 1375-2002, 1411-2002, 007-2003, 014-2003, 023-
Requisition and Issue Slip; and, 2003, 047-2003 and 082-2002: (a) to VERIFY whether actual public
  biddings took place relative to the transactions covered by these bids; (b)
8.      Financial Assistance (FA)/Assistance to Individuals in Crisis Situation (AICS) totaling at least PhP to CHECK the veracity of the documents relative to the repeat orders
5.4 million in 2002 and PhP 2.78 million as of April 2003 were granted to various applicant- made; (c) to DETERMINE the other public officials who may appear to
recipients without subjecting them to the guidelines set forth by the Department of Social Welfare be administratively liable therefor; and (d) to FILE, if warranted, the
and Development (DSWD).[4] x x x corresponding Complaint; and
  c.       On Bid Nos. 078-2002, 448-2002, 931-2002, 1230-2001, 411-2002, 944-
  2002, 1244-2002, 1407-2001, 198-2002, 316-2002 and 431-2002: (a) to
On January 24, 2005, the Office of the Ombudsman, through Director Jose T. De Jesus, Jr., found basis to proceed DETERMINE whether actual public biddings were held relative to the
with the administrative case against the impleaded provincial officials of Samar, docketed as OMB-C-A-05-0051-B. The latter above-mentioned transactions; (b) to CHECK the veracity of the
were then required to file their counter-affidavits and countervailing evidence against the complaint. documents relative to the repeat orders made; (c) to ASCERTAIN the
  other public officials who may be held administratively liable therefor;
In his counter-affidavit, Sison vehemently denied the accusations contained in the letter-complaint and claimed his and (d) to FILE the corresponding Complaint, if warranted.
innocence on the charges. He asserted that his function is limited to the issuance of a certification that an appropriation for the  
requisition exists, that the corresponding amount has been obligated, and that funds are available. He did not, in any way, vouch Accordingly, let a copy of this Memorandum be furnished the Fact- Finding and
for the truthfulness of the certification issued by the requesting parties. In addition, he averred that he never participated in the Intelligence Office for its appropriate action.
alleged irregularities as shown in the minutes and attendance sheet of the bidding.  
  SO ORDERED.[5] (Emphasis supplied.)
Further, he alleged that not one of the documentary evidences so far attached in the letter-complaint bore his signature  
and that he was neither factually connected nor directly implicated in the complaint.  
  Aggrieved, Sison appealed to the CA via a Petition for Review under Rule 43, docketed as CA-G.R. SP No. 96611.
On May 6, 2005, Sison submitted his Position Paper to the Office of the Ombudsman and reiterated that he had not  
participated in the alleged anomalous purchases and use of public funds by the Province of Samar. On June 26, 2008, the CA rendered a decision reversing and setting aside the decision of the Office of the
  Ombudsman against Sison. The fallo of the CA decision reads:
On August 22, 2006, the Office of the Ombudsman rendered a Decision, finding Sison and several other local  
officials of the Province of Samar guilty of grave misconduct, dishonesty, and conduct prejudicial to the best interest of the service WHEREFORE, the decision of the Ombudsman dated 22 August 2006 in OMB-C-A-05-
and dismissing him from service. The dispositive portion of the Decision reads: 0051-B in so far as it finds the herein petitioner MAXIMO D. SISON administratively liable for grave
  misconduct, dishonesty and conduct prejudicial to the best interest of service is hereby REVERSED and
VIEWED IN THE FOREGOING LIGHT, DECISION is hereby rendered as follows: SET ASIDE for insufficiency of evidence. Accordingly, he is absolved from administrative liability as
  charged.
1.      Respondents ROLANDO B. MONTEJO, DAMIANO Z. CONDE, JR., ROMEO C.  
REALES, MAXIMO D. SISON, AURELIO A. BARDAJE and NUMERIANO C. SO ORDERED.[6]
LEGASPI are FOUND GUILTY of GRAVE MISCONDUCT, DISHONESTY and  
CONDUCT PREJUDICIAL TO THE BEST INTEREST OF THE SERVICE, and are  
METED the penalty of DISMISSAL FROM SERVICE, and shall carry with it the In ruling thus, the CA held that the Office of the Ombudsman failed to adduce substantial evidence in order to convict
cancellation of eligibility, forfeiture of retirement benefits, and the perpetual Sison. Moreover, it reasoned that Sisons responsibility as Provincial Budget Officer was to ensure that appropriations exist in
disqualification for re-employment in the government service. relation to the emergency purchase being made and that he had no hand or discretion in characterizing a particular purchase as
 
emergency in nature. Hence, he cannot be held administratively liable for simply attesting to the existence of appropriations for a  
certain purpose, save if such certification is proved to be false. Simply, intervention is a procedure by which third persons, not originally parties to the suit but claiming an interest in
On July 22, 2008, the Office of the Ombudsman filed an Omnibus Motion for Intervention and to Admit Attached the subject matter, come into the case in order to protect their right or interpose their claim. [10] Its main purpose is to settle in one
Motion for Reconsideration, which was subsequently denied by the CA in its assailed resolution of December 18, 2008. action and by a single judgment all conflicting claims of, or the whole controversy among, the persons involved.[11]
   
Hence, we have this petition. To warrant intervention under Rule 19 of the Rules of Court, two requisites must concur: (1) the movant has a legal
  interest in the matter in litigation; and (2) intervention must not unduly delay or prejudice the adjudication of the rights of the
The Issues parties, nor should the claim of the intervenor be capable of being properly decided in a separate proceeding. The interest, which
  entitles one to intervene, must involve the matter in litigation and of such direct and immediate character that the intervenor will
I either gain or lose by the direct legal operation and effect of the judgment.[12]
Whether the [CA] gravely erred in denying petitioners right to intervene in the proceedings, considering  
that (a) the Office of the Ombudsman has sufficient legal interest warranting its intervention in the In support of its argument that it has legal interest, the Office of the Ombudsman cites Philippine National Bank v.
proceedings before the [CA] since it rendered the subject decision pursuant to its administrative authority Garcia, Jr. (Garcia). [13] In the said case, the Philippine National Bank (PNB) imposed upon its employee, Garcia, the penalty of
over public officials and employees; and (b) contrary to the appellate court a quos ruling, petitioner forced resignation for gross neglect of duty. On appeal, the Civil Service Commission (CSC) exonerated Garcia from the
Office of the Ombudsman filed its Omnibus Motion to Intervene and to Admit Attached Motion for administrative charges against him. In accordance with the ruling in Civil Service Commission v. Dacoycoy,[14] this Court affirmed
Reconsideration on a patently erroneous decision of the [CA] which has not yet attained finality. the standing of the PNB to appeal to the CA the CSC resolution exonerating Garcia. After all, PNB was the aggrieved party which
  complained of Garcias acts of dishonesty. Should Garcia be finally exonerated, it might then be incumbent upon PNB to take him
II back into its fold. PNB should, therefore, be allowed to appeal a decision that, in its view, hampered its right to select honest and
Whether the [CA] erred in ruling that the finding of the Office of the Ombudsman was not supported by trustworthy employees, so that it can protect and preserve its name as a premier banking institution in the country.
substantial evidence.  
  Based on the facts above, the Office of the Ombudsman cannot use Garcia to support its intervention in the appellate
III court for the following reasons:
Whether the [CA] erred in giving due course to respondents petition for review when this was  
prematurely filed as it disregarded the well-entrenched jurisprudential doctrine of exhaustion of First, Sison was not exonerated from the administrative charges against him, and was, in fact, dismissed for grave
administrative remedies. misconduct, dishonesty, and conduct prejudicial to the best interest of the service by the Office of the Ombudsman in the
  administrative case, OMB-C-A-05-0051-B. Thus, it was Sison who appealed to the CA being, unquestionably, the party aggrieved
  by the judgment on appeal.
Our Ruling  
  Second, the issue here is the right of the Office of the Ombudsman to intervene in the appeal of its decision, not its
The appeal lacks merit. right to appeal.
   
Intervention Is Discretionary upon the Court And third, Garcia should be read along with Mathay, Jr. v. Court of Appeals[15] and National Appellate Board of the
  National Police Commission v. Mamauag (Mamauag),[16] in which this Court qualified and clarified the exercise of the right of a
  government agency to actively participate in the appeal of decisions in administrative cases. In Mamauag, this Court ruled:
The pivotal issue in this case is whether the Office of the Ombudsman may be allowed to intervene and seek  
reconsideration of the adverse decision rendered by the CA. RA 6975 itself does not authorize a private complainant to appeal a decision of the
  disciplining authority. Sections 43 and 45 of RA 6975 authorize either party to appeal in the instances
In its Decision, the CA did not allow the Office of the Ombudsman to intervene, because (1) the Office of the that the law allows appeal. One party is the PNP member-respondent when the disciplining authority
Ombudsman is not a third party who has a legal interest in the administrative case against petitioner; (2) the Omnibus Motion for imposes the penalty of demotion or dismissal from the service. The other party is the government when
Intervention was filed after the CA rendered its Decision; and (3) the Office of the Ombudsman was the quasi-judicial body which the disciplining authority imposes the penalty of demotion but the government believes that dismissal
rendered the impugned decision. from the service is the proper penalty.
   
In its Petition, however, the Office of the Ombudsman asserts that it has sufficient legal interest to warrant its However, the government party that can appeal is not the disciplining authority or tribunal
intervention in the proceedings, since it rendered the subject decision pursuant to its administrative authority over public officials which previously heard the case and imposed the penalty of demotion or dismissal from the service. The
and employees. Further, it contends that the Omnibus Motion to Intervene was timely filed, since, at the time of its filing, the government party appealing must be the one that is prosecuting the administrative case against the
decision of the CA had not yet attained finality. respondent. Otherwise, an anomalous situation will result where the disciplining authority or tribunal
  hearing the case, instead of being impartial and detached, becomes an active participant in prosecuting
We are not persuaded. the respondent. Thus, in Mathay, Jr. v. Court of Appeals, decided after Dacoycoy, the Court declared:
   
It is fundamental that the allowance or disallowance of a Motion to Intervene is addressed to the sound discretion of To be sure when the resolutions of the Civil Service Commission were brought
[7]
the court.  The permissive tenor of the rules shows the intention to give to the court the full measure of discretion in permitting or to the Court of Appeals, the Civil Service Commission was included only as a nominal
disallowing the intervention,[8] thus: party. As a quasi-judicial body, the Civil Service Commission can be likened to a judge who
  should detach himself from cases where his decision is appealed to a higher court for
SECTION 1. Who may intervene. A person who has a legal interest in the matter in review.
litigation, or in the success of either of the parties, or an interest against both, or is so situated as to be  
adversely affected by a distribution or other disposition of property in the custody of the court or of an In instituting G.R. No. 126354, the Civil Service Commission dangerously
officer thereof may, with leave of court, be allowed to intervene in the action. The court shall consider departed from its role as adjudicator and became an advocate. Its mandated function is to
whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the hear and decide administrative cases instituted by or brought before it directly or on appeal,
original parties, and whether or not the intervenors rights may be fully protected in a separate including contested appointments and to review decisions and actions of its offices and
proceeding. agencies, not to litigate.
   
SECTION 2. Time to intervene. The motion to intervene may be filed at any time before  
rendition of judgment by the trial court. A copy of the pleading-in-intervention shall be attached to Clearly, the Office of the Ombudsman is not an appropriate party to intervene in the instant case. It must remain
the motion and served on the original parties.[9] (Emphasis supplied.) partial and detached. More importantly, it must be mindful of its role as an adjudicator, not an advocate.
   
 It is an established doctrine that judges should detach themselves from cases where their decisions are appealed to a  
higher court for review. The raison detre for such a doctrine is the fact that judges are not active combatants in such proceeding In light of the foregoing considerations, all other issues raised in the petition are rendered moot and academic and no
and must leave the opposing parties to contend their individual positions and the appellate court to decide the issues without the further discussion is necessary.
judges active participation. [17] When judges actively participate in the appeal of their judgment, they, in a way, cease to be judicial  
and have become adversarial instead.[18] WHEREFORE, the petition is DENIED. The CA Resolution dated December 18, 2008 in CA-G.R. SP No. 96611
  is AFFIRMED.
In Pleyto v. Philippine National Police Criminal Investigation and Detection Group (PNP-CIDG) ,[19] the Court  
applied this doctrine when it held that the CA erred in granting the Motion to Intervene filed by the Office of the Ombudsman, to SO ORDERED.
wit:
 
The court or the quasi-judicial agency must be detached and impartial, not only when
hearing and resolving the case before it, but even when its judgment is brought on appeal before a higher
court. The judge of a court or the officer of a quasi-judicial agency must keep in mind that he is an
adjudicator who must settle the controversies between parties in accordance with the evidence and
applicable laws, regulations and/or jurisprudence. His judgment should already clearly and completely
state his findings of fact and law. There must be no more need for him to justify further his judgment
when it is appealed before appellate courts. When the court judge or the quasi-judicial officer intervenes
as a party in the appealed case, he inevitably forsakes his detachment and impartiality, and his interest in
the case becomes personal since his objective now is no longer only to settle the controversy between the
original parties (which he had already accomplished by rendering his judgment), but more significantly,
to refute the appellants assignment of errors, defend his judgment, and prevent it from being overturned
on appeal.
 
 
Likewise, the facts reveal that this case was elevated to the CA via a verified Petition for Review under Rule 43 of the
Rules of Court and Supreme Court Administrative Circular No. 1-95 dated May 16, 1995, which govern appeals to the CA from
judgments or final orders of quasi-judicial agencies.
 
Rule 43, as well as Administrative Circular No. 1-95, provides that the petition for review shall state the full names of
the parties to the case without impleading the court or agencies either as petitioners or respondents.[20] Thus, the only parties
in such an appeal are the appellant as petitioner and appellee as respondent. The court or, in this case, the administrative agency
that rendered the judgment appealed from, is not a party in the said appeal.
 
Therefore, the Office of the Ombudsman does not have the legal interest to intervene. As the CA held correctly:
 
 
The Office of the Ombudsman is not a third party who has a legal interest in the
administrative case against the petitioner such that it would be directly affected by the judgment that this
Court had rendered. It must be remembered that the legal interest required for an intervention must be
direct and immediate in character. Lest it be forgotten, what was brought on appeal before this Court is
the very Decision by the Office of the Ombudsman. Plainly, the Office of the Ombudsman, as an
adjudicator, and not an advocate, has no legal interest at stake in the outcome of this Rule 43 Petition.[21]
 
 
 
 
Motion for Intervention Was Not Filed on Time
 
 
Furthermore, the Rules provides explicitly that a motion to intervene may be filed at any time before rendition of
judgment by the trial court. In the instant case, the Omnibus Motion for Intervention was filed only on July 22, 2008, after the
Decision of the CA was promulgated on June 26, 2008.
 
In support of its position, petitioner cites Office of the Ombudsman v. Samaniego.[22] That case, however, is not
applicable here, since the Office of the Ombudsman filed the motion for intervention during the pendency of the proceedings
before the CA.
 
It should be noted that the Office of the Ombudsman was aware of the appeal filed by Sison. The Rules of Court
provides that the appeal shall be taken by filing a verified petition for review with the CA, with proof of service of a copy on the
court or agency a quo.[23] Clearly, the Office of the Ombudsman had sufficient time within which to file a motion to intervene. As
such, its failure to do so should not now be countenanced. The Office of the Ombudsman is expected to be an activist watchman,
not merely a passive onlooker.[24]
 
In this case, it cannot be denied that the Omnibus Motion for Intervention was belatedly filed. As we held
in Rockland Construction Co., Inc. v. Singzon, Jr., no intervention is permitted after a decision has already been rendered.[25]