Bayer Phils. Versus Agana, G.R. No. ownership of the goods levied upon.

levied upon." the parties to the action, she could not,

L38701 April 8, 1975 JUDGE ERICTA DECISION: DENIED 3 strictly speaking, appeal from the order
RD PARTY CLAIMS and granting the denying her claim, but should file a separate
authority sought by the Sheriff to break open reivindicatoy action against the execution
FACTS: gates and padlocks. But before the sheriff creditor or the purchaser of her property
could implement the sale of the properties after the sale at public auction, or a
BAYER secured a money judgment against under levy, SAN FRANCISCO AND complaint for damages against the bond
STANDARD. But because the said ISIDORO filed a complaint for damages in filed by the judgment creditor in favor of the
judgment was impugned in the Court of CFI-RIZAL against BAYER and the sheriff, sheriff.
Appeals, it did not become final and where JUDGE AGANA issued an order to
executory until 1974. Upon motion of maintain the status quo. BAYER, wanting to
BAYER, JUDGE ERICTA issued the execute, filed a motion to reiterate the order ISSUE:
corresponding writ of execution. Acting by to break open the gates which JUDGE
virtue of said writ, Sheriff Cachero levied on ERICTA granted. WHETHER OR NOT THE ORDER FOR
the properties consisting of paints, chemicals EXECUTION OF JUDGE ERICTA IS
and two motor vehicles found in the ISSUE: WON the order for execution by VALID IN LIGHT OF THE 3 RD PARTY
premises in del Monte, QC. It turned out, JUDGE ERICTA is valid in light of the 3rd CLAIM.
however, that said premises had been party claims? NO, INVALID! Intervention
acquired in 1970 by Monteverde, who later as contemplated in the rules is not confined RULING:
sold it to SAN FRANCISCO and ISIDORO. merely to the filing of the motion to
Hence, SAN FRANCISCO and ISIDORO intervene and the allowance or disallowance NO.
filed with Sheriff Cachero separate third- by the court of said intervention. The
party claims. Upon being notified of said granting of such motion merely opens the The questions raised are not new. It has long
claims, BAYER filed with the same sheriff door for the filing of the corresponding been settled in this jurisdiction that the claim
an indemnity bond in his favor in the complaint or answer in intervention, in of ownership of a third party over properties
amount of P240,000.00. But when the which the issues must be joined before a levied for execution of a judgment presents
sheriff went to the premises at to conduct the trial is held wherein the respective evidence no issue for determination by the court
sale, he was refused entrance, for which of the parties is submitted. From what We issuing the writ of execution. The moment a
reason, he filed with the Court of JUDGE can gather from the records of the instant third-party claim is filed, the sheriff is not
ERICTA a motion asking that he be cases, the parties did not file any such bound to keep the property levied upon,
authorized to break open the gates and pleadings. In other words, construing unless the creditor insists that it should be
padlocks therein. SAN FRANCISCO and Section 17 of Rule 39 of the Revised Rules continued, which may be done if such
ISIDORO the filed motions praying for the of Court, the rights of third-party claimants creditor files a bond sufficient to indemnify
dissolution or discharge of the levy, on the over certain properties levied upon by the the sheriff for whatever damages he may be
ground already stated that the properties sheriff to satisfy the judgment should not be held liable for should the third-party succeed
purported to be sold were theirs and not of decided in the action where the third-party in vindicating his title in a proper action
Standard. JUDGE ERICTA held a hearing claims have been presented, but in the brought separately for the purpose. The
specifically "for the purpose of (allowing the separate action instituted by the claimants. sheriff is not required to examine the title
parties to) present evidence to establish the since the third-party claimant is not one of deeds to pass upon the validity of the title,
since this is a question to be determined by protecting the third-party claimant’s right in by Judge Ericta on May 2, 1974 was far
the proper court. 1 Incidentally, it is also the an attachment proceeding, is not exclusive from being a proceeding in intervention,
rule that the sheriff may, in his discretion, but cumulative and suppletory to the right to considering that there were no proper
dispense with requiring an indemnity bond, bring a new, independent suit. But in Herald pleadings therein and what is more, there
such as when he believes from personal Publishing, We adverted to the intervention was already a final judgment on the main
knowledge of the facts that the third-party provided by Rule 13 of the Rules of Court controversy.
claim is baseless or untrue, but in such (now Sec. 2 of Rule 12, of the Revised Rules
event, he will answer for any damages with of Court) which required the filing of In other words, construing Section 17 of
his own personal funds, should his belief be appropriate pleadings, such as the motion for Rule 39 of the Revised Rules of Court, the
subsequently found to be erroneous. 2 intervention, complaint or answer in rights of third-party claimants over certain
intervention if permitted, on the basis of properties levied upon by the sheriff to
In any event, the point to be borne in mind is which a hearing shall be conducted. satisfy the judgment should not be decided
that the power of a court in the execution of Accordingly, Our ruling in that case must be in the action where the third party claims
its judgments extends only over properties construed to refer only to a third-party claim have been presented, but in the separate
unquestionably belonging to the judgment relative to a preliminary attachment, since action instituted by the claimants.
debtor. Once a court renders a final obviously it is not proper to speak of an
judgment, all the issues between or among intervention in a case already terminated by This is evident from the very nature of the
the parties before it are deemed resolved and final judgment. 4 proceedings. In Herald Publishing, supra,
its judicial function as regards any matter We intimated that the levy by the sheriff of a
related to the controversy litigated comes to As We see it, somehow, Judge Ericta must property by virtue of a writ of attachment
an end. The execution of its judgment is have had these considerations in mind, when may be considered as made under authority
purely a ministerial phase of adjudication. in his questioned order of May 9, 1974, he of the court only when the property levied
Indeed, the nature of its duty to see to it that expressly considered San Francisco’s and upon unquestionably belongs to the
the claim of the prevailing party is fully Isidoro’s motions to quash the levy in defendant. If he attach properties other than
satisfied from the properties of the loser is question as a motion to intervene. It must be those of the defendant, he acts beyond the
generally ministerial. Thus, when a property observed, however, that intervention as limits of his authority. Otherwise stated, the
levied upon by the sheriff pursuant to a writ contemplated in the rules is not confined court issuing a writ of execution is supposed
of execution is claimed by third person in a merely to the filing of the motion to to enforce its authority only over properties
sworn statement of ownership thereof, as intervene and the allowance or disallowance of the judgment debtor, and should a third
prescribed by the rules, an entirely different by the court of said intervention. The party appear to claim the property levied
matter calling for a new adjudication arises. granting of such motion merely opens the upon by the sheriff, the procedure laid down
And dealing as it does with the all important door for the filing of the corresponding by the Rules is that such claim should be the
question of title, it is reasonable to require complaint or answer in intervention, in subject of a separate and independent action.
the filing of proper pleadings and the which the issues must be joined before a
holding of a trial on the matter in view of the trial is held wherein the respective evidence As We explained in the Quebral case, 5
requirements of due process. of the parties is submitted. since the third-party claimant is not one of
the parties to the action, she could not,
We did declare in Herald publishing Co. v. In the case at bar, the parties did not file any strictly speaking, appeal from the order
Ramos, 3 that intervention as a means of such pleadings. Hence, the proceeding held denying her claim, but should file a separate
reivindicatory action against the execution have done was to refrain from hearing said
creditor or the purchaser of her property motions, and to direct the movants to file the "The doctrine as thus formulated is well
after the sale at public auction, or a appropriate separate action against the settled, and has been adhered to consistently
complaint for damages against the bond sheriff. whenever justified by the facts in order to
filed by the judgment creditor in favor of the avoid conflict of power between different
sheriff. As regards the claim of BAYER that the courts of coordinate jurisdiction and to bring
writ of preliminary injunction issued by about a harmonious and smooth functioning
We reiterated this in Potenciano v. Dineros, Judge Agana is an interference with the of their proceedings. For the doctrine to
Et. Al. 6 when We ruled that "such coordinate and co-equal authority of Judge apply, however, the injunction issued by one
reivindicatory action is resurged to the third- Ericta over the properties in question, again court must interfere with the judgment or
party claimant by Section 15 or Rule 39 We must say such question has already been decree issued by another court of equal or
despite disapproval of his claim by the court settled in Abiera v. Court of Appeals, 8 coordinate jurisdiction, and the relief sought
itself (Planas v. Madrigal, 94 Phil. 754, Lara thus:jgc:chanrobles.com.ph by such injunction must be one which could
v. Bayona, G. R. No. L-7920, decided May be granted by the court which rendered the
10, 1955)." This rule is dictated by reasons "The lone issue presented for resolution is judgment or issued the decree.
of convenience, as "intervention is more whether or not Branch VI of the Court of
likely to inject confusion into the issues First Instance of Negros Occidental acted "In the case at bar, there is no question that
between the parties in the case . . . with with authority in enjoining the Provincial the action filed by the De la Cruz spouses
which the third-party claimant has nothing Sheriff from proceeding with the execution wherein they claim ownership of the
to do and thereby retard instead of facilitate sale of properties levied upon by him properties levied upon by the provincial
the prompt dispatch of the controversy pursuant to a final judgment rendered by sheriff is sanctioned by Section 17 of Rule
which is the underlying objective of the Branch II but claimed by the petitioners 39, which provides:chanrob1es virtual 1aw
rules of pleading and practice." 7 Besides, herein, the De la Cruz spouses, in the action library
intervention may not be permitted after trial filed by them in the court which issued the
has been concluded and a final judgment injunction. ‘If property levied on be claimed by any
rendered in the case. other person than the judgment debtor or his
"The decision of the Court of Appeals now agent, and such person make an affidavit of
What has been said disposes of BAYER’s sought to be reviewed relies upon the case of his title thereto or right to the possession
contention to the effect that the issue of Hacbang, Et. Al. v. Clementino Diez, 8 thereof, stating the grounds of such right or
whether or not the properties in question SCRA 103 (May 30, 1963), where this Court title, and serve the same upon the officer
were illegally levied by the sheriff has acted and applied the doctrine earlier laid making the levy, and a copy thereof upon
already been settled by Judge Ericta’s order down in Cabigao v. Del Rosario and Lim, 44 the judgment creditor, the officer shall not
of May 9, 1974, denying San Francisco’s Phil. 192, and subsequently reiterated in be bound to keep the property, unless such
and Isidoro’s motions to lift said levy, several other cases, that ‘no court has power judgment creditor or his agent, on demand
finding that said corporations are mere to interfere by injunction, with the of the officer against such claim by a bond
"conduits or instruments" of Standard "to judgments or decrees of a court of in a sum not greater than the value of the
deceive its creditors," which admittedly was concurrent or coordinate jurisdiction having property levied on. In case of disagreement
not appealed by the parties aggrieved equal power to grant the relief sought by as to such value, the same shall be
thereby. Indeed, what Judge Ericta should injunction . . .’ determined by the court issuing the writ of
execution. party claim with the sheriff and that it assumes that the Sheriff is holding the
subsequently an action to enjoin the property in question by order of the court
‘The officer is not liable for damages for the attachment. This action fell to another handling the case for libel. In reality this is
taking or keeping of the property, to any branch of the Court of First Instance, which true only to a limited extent. That court did
third party claimant unless a claim is made issued the preliminary injunction against the not direct the Sheriff to attach the particular
by the latter and unless an action for sheriff. property in dispute. The order was for the
damages is brought by him against the Sheriff to attach Borres,’ Padilla’s and
officer from the date of the filing of the "This Court said, in relation to the point Pastor’s property. He was not supposed to
bond. But nothing herein contained shall which is of relevance here:chanrob1es touch any property other than that of these
prevent such claimant or any third person virtual 1aw library defendants’, and if he did, he acted beyond
from vindicating his claim to the property by the limits of his authority and upon his
any proper action. . . .’ (Emphasis supplied) ‘The objection that at once suggests itself to personal responsibility.
entertaining in Case No. 12263 the motion
"It may be inferred from the foregoing that to discharge the preliminary attachment It is true of course that property in custody
the right of a person who claims to be the levied in Case No. 115391 is that by so of the law can not be interfered with without
owner of property levied upon on execution doing one judge would interfere with the permission of the proper court and
to file a third-party claim with the sheriff is another judge’s actuations. The objection is property legally attached is property in
not exclusive, and that he may file an action superficial and will not bear analysis. custodia legis. But for the reason just stated,
to vindicate his claim even if the judgment this rule is confined to cases where the
creditor files an indemnity bond in favor of It has been seen that a separate action by the property belongs to the defendant or one in
the sheriff to answer for any damages that third party who claims to be the owner of the which the defendant has proprietary interest.
may be suffered by the third-party claimant. property attached is appropriate. If this is so, When the Sheriff acting beyond the bounds
By ‘action’, as stated in this Rule, what is it must be admitted that the judge trying of his office seizes a stranger’s property, the
meant is a separate and independent action, such action may render judgment ordering rule does not apply and interference with his
such as was resorted to the third-party the sheriff or whoever has in possession the custody is not interference with another
claimants in this case. So it has been held in attached property to deliver it to the court’s order of attachment.
Manila Herald Publishing Co., Inc. v. plaintiff-claimant or desist from seizing it. It
Ramos, 88 Phil. 94, where this Court, follows further that the court may make an It may be argued that the third-party claim
through Justice Pedro Tuason, resolved a interlocutory order, upon the filing of such may be unfounded; but so may it be
question similar to the one now before us. bond as may be necessary, to release the meritorious, for that matter. Speculations are
There an order of attachment was issued by property pending final adjudication of the however beside the point. The title is the
the court in a civil suit for libel filed by title. Jurisdiction over an action includes very issue in the case for the recovery of
Antonio Quirino against the editor, the jurisdiction over an interlocutory matter property or the dissolution of the attachment,
managing editor and a reporter of the Daily incidental to the cause and deemed and pending final decision, the court may
Record. By virtue of the writ the sheriff necessary to preserve the subject matter of enter any interlocutory order calculated to
levied upon certain properties found in the the suit or protect the parties’ interests. This preserve the property in litigation and
premises of the publication. The Herald is self-evident. protect the parties’ rights and interest . . .’
Publishing Company, alleging ownership of
the properties thus attached, filed a third- The fault with the respondents’ argument is "The rationale of the decision in the Herald
Publishing Company case is peculiarly consequently neither its judgment nor the filed a third-party claim. The Leyte court
applicable to the one before Us, and enforcement thereof was interfered with. denied the claim and directed that the sale of
removes it from the general doctrine Execution could still proceed with respect to the bus be carried out, on the ground that the
enunciated in the decisions cited by the the judgment debtor’s properties. said respondent was the very same company
respondents and quoted earlier herein. that was the defendant against whom the
4. The case of Cabigao v. Del Rosario and judgment had been rendered. Subsequently
1. Under Section 17 of Rule 39 a third Lim, supra, is not in point. In that case a writ the respondent filed another action in the
person who claims property levied upon on of execution was issued by one court Court of First Instance of Cebu, reproducing
execution may vindicate such claim by (second branch, Manila) to enforce its substantially the allegations in its third-party
action. Obviously a judgment rendered in his judgment for a sum of money. After the claim, and prayed that a writ of preliminary
favor, that is, declaring him to be the owner defendant’s property was levied upon he injunction be issued to restrain the sale of
of the property, would not constitute filed a petition in another court (first the passenger bus which had been levied
interference with the powers or processes of branch), praying that a writ of preliminary upon. The injunction was issued as prayed
the court which rendered the judgment to injunction be issued to restrain the sheriff for and the sheriff came to Us
enforce which the execution was levied. If from carrying out the execution on the on certiorari and prohibition.
that be so — and it is so because the ground that there was another action
property, being that of a stranger, is not pending between the same parties in the "This Court, through Justice Roberto
subject to levy — then an interlocutory order Supreme Court and in which action the Concepcion, now Chief Justice, granted the
such as injunction, upon a claim and prima defendant had been given a judgment by the petition and annulled the said writ, applying
facie showing of ownership by the claimant, Court of First Instance for a much larger the doctrine laid down in Cabigao v. Del
cannot be considered as such interference amount than that for which the execution Rosario, supra, and citing in its decision still
either. was issued. Under these facts, it is quite another case, namely, National Power
clear that the preliminary injunction issued Corporation v. Hon. Jesus de Veyra, 3
2. To adopt the statement in the Herald by Branch I was improper, and constituted SCRA 646 (Dec. 22, 1961).
Publishing Company decision and apply it undue interference with a decree of Branch
here, Branch II of the Court of First Instance II, where the same relief could have been "It is clear that in the Hacbang case the
of Negros Occidental, in Case No. 7435, did sought. injunction issued by the Cebu court
not direct the sheriff to levy upon the constituted an interference with the
particular properties in dispute. The order 5. The case of Hacbang v. Hon. Clemente processes of the Leyte court, since the latter
was for him to levy upon properties of the Diez, Et. Al. is not in point either. There had already denied the third-party claim
judgment debtor, without specifying them. judgment was rendered by the Court of First filed before it by the respondent company,
Instance of Leyte against the Leyte Autobus held that the latter was the very defendant
3. The issue presented by herein private Co., Inc. in Civil Case No. 2045. A writ of against whom judgment has been rendered,
respondents in Civil Case No. 293 before execution was issued, and a passenger bus and directed the sale of the specific property
respondent Judge was one of ownership, was levied upon by the provincial sheriff. claimed by it.
which could not have been presented to and The respondent, Leyte Autobus Co., Inc.,
resolved by the other court in Civil Case No. claiming that it was the owner of the bus and 6. The National Power Corporation case
7435. In other words, that court could not that it was not the defendant in Civil Case presented a more or less similar situation. As
grant the relief sought by the injunction, and No. 2045, although it bore the same name, stated in the decision penned by Chief
Justice Bengzon, ‘the question raised is over the writ issued in his favor. In
whether or not property which has been "In my view, which is not necessarily shared otherwords, there seems to be logic in the
levied upon in a garnishment proceeding by by all my colleagues, by adopting and proposition that in order to preserve the
one court (in Manila) may be subject to the reiterating in this case the doctrine laid down subject matter of the suit, the court issuing
jurisdiction of another court (in Baguio) in in Manila Herald Publishing Co., Inc. v. the writ should be the one to decide any
an independent suit impugning the legality Ramos, 88 Phil. 94, the Court is once more claim of any third party over the property
of said garnishment—the property garnished making it clear that in implementing a writ being subject by it to its ownership. Upon
allegedly being exempt from execution.’ of attachment or execution issued by a Court the other hand, there is the consideration that
This Court held: ‘The reason advanced by of First Instance, the Sheriff must see to it the taking up of such claim would have
the respondent court of Baguio City that it that only properties unquestionably nothing to do with the merits of the cause of
should grant relief when ‘there is apparently belonging to the attachment defendant or action in the litigation before the court and
an illegal service of the writ’ . . . may not be judgment debtor against whom the writ is could unnecessarily delay its complete
upheld, there being a better procedure to issued are levied upon and that should there termination. I for one am convinced that as
follow, i.e., a resort to the Manila Court, by any controversy as to the ownership of between these two considerations, the latter
wherein the remedy may be obtained, it said properties, such controversy may be is more weighty, particularly, because as
being the court under whose authority the submitted for resolution not necessarily to indicated by Mr. Justice Tuason in the
illegal levy had been made. Needless to say, the court issuing the writ involved but to any Manila Herald Publishing case, it is clearly
an effective ordering of legal relationships in other Court of First Instance. I believe it is inferable from the provisions of the Rules of
civil society is possible only when each necessary to make this point very clear Court on third party claims, both under Rule
court is granted exclusive jurisdiction over because at first blush, one would feel that 39 (section 17) and Rule 57 (section 14),
the property brought to it. To allow inasmuch as the property the ownership of that the ‘proper action’ referred to in both
coordinate courts to interfere with each which is being disputed is the subject of an sections, by which the third party may
other’s judgments or decrees by injunction order of a particular court for the seizing vindicate his claim to the property, is more
would obviously lead to confusion and thereof to the end that it may be used to appropriately an independent action instead
might seriously hinder the proper satisfy a judgment already rendered or to be of a mere intervention."cralaw virtua1aw
administration of justice.’ rendered by it, it would seem that the more library
logical rule should be to confine the
"As may be noted, the statement of the jurisdiction of such a controversy in the Incidentally, before closing, it may not be
doctrine relied upon by the respondents in same court, as a necessary consequence of inappropriate to make the observation that
the present case must be taken in context, its authority and power to make effective its while some of the circumstances relied upon
that is, in the particular factual setting judgment, since otherwise it would be the by Judge Ericta in his order of May 9, 1974
wherein it is applied. The facts of this case easiest thing for a defendant or a judgment may have bearing on the issue of ownership
do not lend themselves to its debtor to nullify the recognition by the court of the properties in question, they do not
application."cralaw virtua1aw library of the validity of the grounds of attachment appear to Us to be sufficiently supported by
of the plaintiff or the cause of action of the the record. More specifically, We cannot see
In his concurring opinion in this Abiera judgment creditor by simply asking or enough basis for the finding that all the
case, Justice Barredo laid emphasis on the allowing some friendly third party to file a incorporators of all three corporations,
point here in dispute, claim of ownership over his properties and Standard, San Francisco and Isidoro are
thus:jgc:chanrobles.com.ph thereby oust the jurisdiction of the court members of the same family. Neither do We
see enough indication that the properties
levied upon were properties belonging
originally to Standard.

IN VIEW OF ALL THE FOREGOING, the

petition in G. R. No. L-38701 is dismissed,
and in G. R. No. L-38801, the petition is
granted, and the orders of Judge Ericta of
May 9, 1974 and June 10, 1974 in Civil
Case No. Q-14029 and all proceedings and
orders subsequent and pursuant thereto are
hereby annulled and set aside. Respondent
Sheriff Mariano Cachero is ordered to lift
the levy on the properties enumerated in the
Notice of Sheriff’s Sale dated March 28,
1974, as well as on all properties subject of
San Francisco’s and Isidoro’s motions of
April 15, 1974. The restraining order issued
in G. R. No. L-38801 on June 19, 1974 is
hereby made permanent, while that issued in
G. R. No. L-38701 on May 29, 1974 is
hereby lifted. Costs against the petitioners in
G. R. No. L-38701 and the respondents in G.
R. No. L-38801.

Makalintal, C.J., Fernando, Barredo and

Aquino, JJ., concur.
HON. CARLOS ABIERA, Judge of the The decision having become final, a writ of
Court of First Instance of Negros execution was issued and the Sheriff of
Occidental and the SPOUSES MIGUEL Occidental Negros placed the plaintiff in On December 20, 1965 a certain Mr.
DE LA CRUZ AND JOVITA DE LA possession of the land. With respect to the Aniceto Lacson filed a third-party claim
CRUZ, Petitioners, vs. THE HON. buildings which as stated above were with the Sheriff alleging that he was the
COURT OF APPEALS and ANGELINA declared to be the property of the plaintiff owner of the building and school equipment
E. PUENTEVELLA, as Judicial for having been considered as part of the including the books and supplies, for having
Administratrix of the Intestate Estate of rentals of the lots, the acting Director of the allegedly purchased them from Mr. and Mrs.
Luis B. Puentevella, Respondents. Southern Negros College which was Jose Lopez. On December 28, 1965 another
occupying the building, informed the Sheriff third-party claim was filed over the same
The facts of the case as found by the Court that the President of the School and his wife, school buildings, equipment, books and
of Appeals are as follows: Mr. and Mrs. Jose Lopez, were then in supplies. In this second third-party claim,
Hongkong. It is implied from the return of the claimant is Jovita De la Cruz who, like
In Civil Case No. 7435 the herein petitioner the Sheriff that the buildings and the Mr. Lacson, alleges that she acquired the
as administratrix of the estate of Luis B. equipment of the school were not delivered same properties from Mr. and Mrs. Jose
Puentevella obtained a decision from Branch to the Lopez also by
11, Court of First Instance of Negros plaintiff.chanroblesvirtualawlibrarychanrobl purchase.chanroblesvirtualawlibrarychanrob
Occidental rescinding a contract of sale es virtual law library les virtual law library
entered into by Luis B. Puentevella as
vendor and Raul Javellana as vendee of 36 In view of the fact that the decision above On January 3, 1966 Jovita De la Cruz and
lots mentioned in the complaint and referred to provided for the payment of her husband Miguel De la Cruz filed a
declaring that the installments on account of additional rentals at the rate of P500.00 a complaint before Branch VI of the Court of
said lots paid by Raul Javellana as well as month from February, 1957 until the First Instance of Negros Occidental and
the buildings and other improvements premises shall have been delivered to the alleging that they are the owners of the
constructed thereon be considered as rental plaintiff, plus P5,000.00 as attorney's fees buildings occupied by the Southern Negros
for the use and occupation of the lots, and costs, the Sheriff, pursuant to the same College as well as the equipment, books, and
ordering further that the defendants Raul writ of execution, levied upon the books, supplies found therein, and that the same
Javellana and Southern Negros College equipment and supplies found in the were levied upon by the Sheriff to satisfy a
vacate the lots and deliver possession premises and presumably belonging to the judgment rendered by Branch II of the Court
thereof to the defendant Southern Negros College, for the of First Instance of Negros Occidental of
plaintiff.chanroblesvirtualawlibrarychanrobl satisfaction of the amounts mentioned in the which said plaintiffs Mr. and Mrs. De la
es virtual law library decision.chanroblesvirtualawlibrarychanrobl Cruz are not parties and, therefore, not
es virtual law library binding on them, obtained from the
Presiding Judge of Branch VI of the same
court Honorable Carlos Abiera a writ of
preliminary injunction ordering Angelina E.
Puentevella and her co-defendants Sheriff
and deputy sheriffs of the Province of
Negros Occidental "to refrain from taking enforcing the injunction issued by him in 44 Phil. 192, and subsequently reiterated in
possession of the buildings and other Civil Case No. 293."chanrobles virtual law several other cases, that "no court has power
properties mentioned in the depository library to interfere by injunction, with the
receipt mark as Exhibit A and the lots judgments or decree of a court of concurrent
wherein they are situated; and from going on Not satisfied with the said decision as well or coordinate jurisdiction having equal
with the sale of the properties; and from as with the order denying their motion for power to grant the relief sought by
preventing the students, instructors and other reconsideration, the spouses De la Cruz filed injunction ..."chanrobles virtual law library
personnel of the school from entering the the instant petition for review. On motion of
school premises and to remove the petitioners We issued, on October 21, 1966, The doctrine as thus formulated is well
barricades from the main gate of the school a restraining order to stop the Provincial settled, and has been adhered to consistently
premises, (until further orders) from this Sheriff of Negros Occidental from whenever justified by the facts in order to
court." proceeding with the auction sale in Civil avoid conflict of power between different
Case No. 7435; and on April 5, 1967 We courts of coordinate jurisdiction and to bring
In due course respondent Puentevella filed a issued a writ of preliminary injunction for about a harmonious and smooth functioning
petition for certiorari or mandamus with the the same purpose, upon a bond of P2,500.00. of their proceedings. For the doctrine to
Court of Appeals, with a prayer "that an ex- apply, however, the injunction issued by one
parte writ of preliminary injunction be ISSUE: court must interfere with the judgment or
issued, enjoining the Hon. Carlos Abiera decree issued by another court of equal or
from enforcing the writ of preliminary whether or not Branch VI of the Court of coordinate jurisdiction, and the relief sought
injunction issued by him in Civil Case No. First Instance of Negros Occidental acted by such injunction must be one which could
293 of the Court of First Instance of Negros with authority in enjoining the Provincial be granted by the court which rendered the
Occidental and from further issuing any Sheriff from proceeding with the judgment or issued the
other writ or process which would in any execution sale of properties levied upon decree.chanroblesvirtualawlibrarychanrobles
manner affect the enforcement of the by him pursuant to a final judgment virtual law library
judgment rendered by Branch II of the same rendered by Branch II but claimed by the
Court of First Instance of Negros Occidental petitioners herein, the De la Cruz spouses, in In the case at bar, there is no question that
in Civil Case No. 7435; that, after hearing, the action filed by them in the court which the action filed by the De la Cruz spouses
judgment be declared making the writ of issued the injunction. wherein they claim ownership of the
preliminary injunction prayed for in this properties levied upon by the provincial
case permanent." In its decision dated May RULING: sheriff is sanctioned by Section 17 of Rule
18, 1966 the Court of Appeals granted the 39, which provides:
petition and set aside the writ of preliminary NO
injunction issued by the trial court in Civil If property levied on be claimed by any
Case No. 293. The spouses De la Cruz The decision of the Court of Appeals now other person than the judgment debtor or his
moved to reconsider but the motion was sought to be reviewed relies upon the case agent, and such person make an affidavit of
denied in a resolution dated June 27, 1966. of Hacbang, et al. vs. Clementino Diez, 8 his title thereto or right to the possession
In the same resolution the Court of Appeals SCRA 103 (May 30, 1963), where this Court thereof, stating the grounds of such right or
issued a writ of preliminary injunction acted and applied the doctrine earlier laid title, and serve the same upon the officer
restraining "respondent Judge from further down in Cabigao vs. Del Rosario and Lim, making the levy, and a copy thereof upon
the judgment creditor, the officer shall not answer for any damages that may be
be bound to keep the property, unless such suffered by the third-party claimant.
judgment creditor or his agent, on demand It has been seen that a separate action by the
of the officer, indemnify the officer against By "action," as stated in this Rule, what is third party who claims to be the owner of the
such claim by a bond in a sum not greater meant is a separate and independent action, property attached is appropriate. If this is so,
than the value of the property levied on. In such as was resorted to by the third-party it must be admitted that the judge trying
case of disagreement as to such value, the claimants in this case. So it has been held such action may render judgment ordering
same shall be determined by the court in Manila Herald Publishing Co., Inc. vs. the sheriff or whoever has in possession the
issuing the writ of Ramos, 88 Phil. 94, where this Court, attached property to deliver it to the
execution.chanroblesvirtualawlibrarychanro through Justice Pedro Tuason, resolved a plaintiff-claimant or desist from seizing it. It
bles virtual law library question similar to the one now before us. follows further that the court may make an
There an order of attachment was issued by interlocutory order, upon the filing of such
The officer is not liable for damages, for the the court in a civil suit for libel filed by bond as may be necessary, to release the
taking or keeping of the property, to any Antonio Quirino against the editor, the property pending final adjudication of the
third party claimant unless a claim is made managing editor and a reporter of the Daily title. Jurisdiction over an action includes
by the latter and unless an action for Record. By virtue of the writ the sheriff jurisdiction over an interlocutory matter
damages is brought by him against the levied upon certain properties found in the incidental to the cause and deemed
officer within one hundred twenty (120) premises of the publication. The Herald necessary to preserve the subject matter of
days from the date of the filing of the Publishing Company, alleging ownership of the suit or protect the parties' interests. This
bond. But nothing herein contained shall the properties thus attached, filed a third- is self-
prevent such claimant or any third person party claim with the sheriff and evident.chanroblesvirtualawlibrarychanroble
from vindicating his claim to the property by subsequently an action to enjoin the s virtual law library
any proper attachment. This action fell to another
action.chanroblesvirtualawlibrarychanrobles branch of the Court of First Instance, which The fault with the respondents' argument is
virtual law library issued the preliminary injunction against the that it assumes that the Sheriff is holding the
sheriff. property in question by order of the court
xxx xxx xxxchanrobles virtual law library handling the case for libel. In reality this is
This Court said, in relation to the point true only to a limited extent. That court did
(Emphasis supplied) . which is of relevance here: not direct the Sheriff to attach the particular
property in dispute. The order was for the
It may be inferred from the foregoing The objection that at once suggests itself to Sheriff to attach Borres', Padilla's and
provision that the right of a person who entertaining in Case No. 12263 the motion Pastor's property. He was not supposed to
claims to be the owner of property levied to discharge the preliminary attachment touch any property other than that of these
upon on execution to file a third-party claim levied in Case No. L-15391 is that by so defendants, and if he did, he acted beyond
with the sheriff is not exclusive, and that he doing one judge would interfere with the limits of his authority and upon his
may file an action to vindicate his claim another judge's actuations. The objection is personal
even if the judgment creditor files an superficial and will not bear responsibility.chanroblesvirtualawlibrarycha
indemnity bond in favor of the sheriff to analysis.chanroblesvirtualawlibrarychanrobl nrobles virtual law library
es virtual law library
It is true of course that property in custody action. Obviously a judgment rendered in his 4. The case of Cabigao vs. Del Rosario and
of the law can not be interfered with without favor, that is, declaring him to be the owner Lim, supra, is not in point. In that case a writ
the permission of the proper court, and of the property, would not constitute of execution was issued by one court
property legally attached is property interference with the powers or processes of (second branch, Manila) to enforce its
in custodia legis. But for the reason just the court which rendered the judgment to judgment for a sum of money. After the
stated, this rule is confined to cases where enforce which the execution was levied. If defendant's property was levied upon he
the property belongs to the defendant or one that be so - and it is so because the property, filed a petition in another court (first
in which the defendant has proprietary being that of a stranger, is not subject to levy branch), praying that a writ of preliminary
interest. When the Sheriff acting beyond the - then an interlocutory order such as injunction be issued to restrain the sheriff
bounds of his office seizes a stranger's injunction, upon a claim and  prima from carrying out the execution on the
property, the rule does not apply and facie showing of ownership by the claimant, ground that there was another action
interference with his custody is not cannot be considered as such interference pending between the same parties in the
interference with another court's order of either.chanroblesvirtualawlibrarychanrobles Supreme Court and in which action the
attachment.chanroblesvirtualawlibrarychanr virtual law library defendant had been given a judgment by the
obles virtual law library Court of First Instance for a much larger
2. To adopt the statement in the Herald amount than that for which the execution
It may be argued that the third-party claim Publishing Company decision and apply it was issued. Under these facts, it is quite
may be unfounded; but so may it be here, Branch II of the Court of First Instance clear that the preliminary injunction issued
meritorious, for that matter. Speculations are of Negros Occidental, in Case No. 7435, did by Branch I was improper, and constituted
however beside the point. The title is the not direct the sheriff to levy upon the undue interference with a decree of Branch
very issue in the case for the recovery of particular properties in dispute. The order II, where the same relief could have been
property or the dissolution of the attachment, was for him to levy upon properties of the sought.chanroblesvirtualawlibrarychanrobles
and pending final decision, the court may judgment debtor, without specifying virtual law library
enter any interlocutory order calculated to them.chanroblesvirtualawlibrarychanrobles
preserve the property in litigation and virtual law library 5. The case of Hacbang vs. Hon.
protect the parties' rights and interest. ... Clementino Diez, et al. is not in point either.
3. The issue presented by herein private There judgment was rendered by the Court
The rationale of the decision in the Herald respondents in Civil Case No. 293 before of First Instance of Leyte against the Leyte
Publishing Company case is peculiarly respondent Judge was one of ownership, Autobus Co., Inc. in Civil Case No. 2045. A
applicable to the one before Us, and which could not have been presented to and writ of execution was issued, and a
removes it from the general doctrine resolved by the other court in Civil Case No. passenger bus was levied upon by the
enunciated in the decisions cited by the 7435. In other words, that court could not provincial sheriff. The respondent, Leyte
respondents and quoted earlier grant the relief sought by the injunction, and Autobus Co., Inc., claiming that it was the
herein.chanroblesvirtualawlibrarychanrobles consequently neither its judgment nor the owner of the bus and that it was not the
virtual law library enforcement thereof was interfered with. defendant in Civil Case No. 2045, although
Execution could still proceed with respect to it bore the same name, filed a third-party
1. Under Section 17 of Rule 39 a third the judgment debtor's claim. The Leyte court denied the claim and
person who claims property levied upon on properties.chanroblesvirtualawlibrarychanro directed that the sale of the bus be carried
execution may vindicate such claim by bles virtual law library out, on the ground that the said respondent
was the very same company that was the 6. The National Power Corporation case 7. Respondents assail the injunction issued
defendant against whom the judgment had presented a more or less similar situation. As by Judge Carlos Abiera on the ground that,
been rendered. Subsequently, the respondent stated in the decision penned by Chief irrespective of the question as to his
filed another action in the Court of First Justice Bengzon, "the question raised is authority, the facts and circumstances of the
Instance of Cebu, reproducing substantially whether or not property which has been case do not justify its issuance. This is,
the allegations in its third-party claim, and levied upon in a garnishment proceeding by however, a factual matter which we cannot
prayed that a writ of preliminary injunction one court (in Manila) may be subject to the here review, involving as it does evidence
be issued to restrain the sale of the passenger jurisdiction of another court (in Baguio) in adduced before the trial court, and which
bus which had been levied upon. The an independent suit impugning the legality should have been, if at all, raised in the
injunction was issued as prayed for and the of said garnishment - the property garnished Court of
sheriff came to Us on certiorari and allegedly being exempt from execution." Appeals.chanroblesvirtualawlibrarychanrobl
prohibition.chanroblesvirtualawlibrarychanr This Court held: "The reason advanced by es virtual law library
obles virtual law library the respondent court of Baguio City that it
should grant relief when 'there is apparently WHEREFORE, the decision of the Court of
This Court, through Justice Roberto an illegal service of the writ' ... may not be Appeals is reversed and set aside, and the
Concepcion, now Chief Justice, granted the upheld, there being a better procedure to authority of respondent Judge Carlos Abiera
petition and annulled the said writ, applying follow, i.e., a resort to the Manila Court, to issue the writ of preliminary injunction
the doctrine laid down in Cabigao vs. Del wherein the remedy may be obtained, it which he did in Civil Case No. 293 is
Rosario, supra, and citing in its decision still being the court under whose authority the upheld, without prejudice to whatever
another case, namely, National Power illegal levy had been made. Needless to say, further action he may take in respect thereof,
Corporation vs. Hon. Jesus de Veyra, 3 an effective ordering of legal relationships in as may be justified by the facts and
SCRA 646 (Dec. 22, civil society is possible only when each circumstances. No pronouncement as to
1961).chanroblesvirtualawlibrarychanrobles court is granted exclusive jurisdiction over costs.
virtual law library the property brought to it. To allow
coordinate courts to interfere with each
It is clear that in the Hacbang case the other's judgments or decrees by injunction
injunction issued by the Cebu court would obviously lead to confusion and
constituted an interference with the might seriously hinder the proper
processes of the Leyte court, since the latter administration of justice."chanrobles virtual
had already denied the third-party claim law library
filed before it by the respondent company,
held that the latter was the very defendant As may be noted, the statement of the
against whom judgment has been rendered, doctrine relied upon by the respondents in
and directed the sale of the specific property the present case must be taken in context,
claimed by that is, in the particular factual setting
it.chanroblesvirtualawlibrarychanrobles wherein it is applied. The facts of this case
virtual law library do not lend themselves to its
application.chanroblesvirtualawlibrarychanr
obles virtual law library
BANCO DE ORO-EPCI, INC. (formerly PCIB refused to pay JOCI the full amount of Juan, Metro Manila, where he maintained
Equitable PCI Bank), Petitioner, the check despite demands made by the Account No. 5703-03538-3 in his name
vs. latter. JOCI prayed for the payment of the and/or that of his wife, Anita. Respondent
JOHN TANSIPEK, Respondent. amount of the check (₱4,050,136.51), Tansipek had presented to PCIB a signed
₱500,000.00 in attorney’s fees, ₱100,000.00 copy of the Minutes of the meeting of the
J. O. Construction, Inc. (JOCI), a domestic in expenses, ₱50,000.00 for costs of suit, Board of Directors of JOCI stating the
corporation engaged in the construction and ₱500,000.00 in exemplary damages. resolution that –
business in Cebu City, filed a complaint
against Philippine Commercial and PCIB filed a Motion to Dismiss the Checks payable to J.O. Construction, Inc.
Industrial Bank (PCIB) in the Regional Trial Complaint on the grounds that (1) an may be deposited to Account No. 5703-
Court (RTC) of Makati City docketed as indispensable party was not impleaded, and 03538-3 under the name of John and/or
Civil Case No. 97-508. The Complaint (2) therein plaintiff JOCI had no cause of Anita Tansipek, maintained at PCIB, Wilson
alleges that JOCI entered into a contract action against PCIB. The RTC denied Branch.2
with Duty Free Philippines, Inc. for the PCIB’s Motion to Dismiss.
construction of a Duty Free Shop in Respondent Tansipek had also presented a
Mandaue City. As actual construction went PCIB filed its answer alleging as defenses copy of the Articles of Incorporation of
on, progress billings were made. Payments that (1) JOCI had clothed Tansipek with JOCI showing that he and his wife, Anita,
were received by JOCI directly or through authority to act as its agent, and was were incorporators of JOCI, with Anita as
herein respondent John Tansipek, its therefore estopped from denying the same; Treasurer. In the third-party complaint,
authorized collector. Payments received by (2) JOCI had no cause of action against PCIB prayed for subrogation and payment
respondent Tansipek were initially remitted PCIB ; (3) failure to implead Tansipek of attorney’s fees in the sum of ₱400,000.00.
to JOCI. However, payment through PNB rendered the proceedings taken after the
Check No. 0000302572 in the amount of filing of the complaint void; (4) PCIB’s act PCIB filed a Motion to Admit Amended
₱4,050,136.51 was not turned over to JOCI. of accepting the deposit was fully justified Third-Party Complaint. The amendment
Instead, respondent Tansipek endorsed said by established bank practices; (5) JOCI’s consisted in the correction of the caption, so
check and deposited the same to his account claim was barred by laches; and (6) the that PCIB appeared as Third-Party Plaintiff
in PCIB, Wilson Branch, Wilson Street, damages alleged by JOCI were hypothetical and Tansipek as Third-Party Defendant.
Greenhills, San Juan, Metro Manila. PCIB and speculative. PCIB incorporated in said
allowed the said deposit, despite the fact that Answer its counterclaims for exemplary Upon Motion, respondent Tansipek was
the check was crossed for the deposit to damages in the amount of ₱400,000.00, and granted time to file his Answer to the Third-
payee’s account only, and despite the litigation expenses and attorney’s fees in the Party Complaint. He was, however, declared
alleged lack of authority of respondent amount of ₱400,000.00. in default for failure to do so. The Motion to
Tansipek to endorse said check. Reconsider the Default Order was denied.
PCIB likewise moved for leave for the court
to admit the former’s third-party complaint Respondent Tansipek filed a Petition for
against respondent Tansipek. The third-party Certiorari with the Court of Appeals
complaint alleged that respondent Tansipek assailing the Default Order and the denial of
was a depositor at its Wilson Branch, San the Motion for Reconsideration. The Petition
was docketed as CA-G.R. SP No. 47727. On costs of suit. The other damages claimed by b) The trial court erred in utterly
29 May 1998, the Court of Appeals the plaintiff are denied for being speculative. depriving the appellant of his day in
dismissed the Petition for failure to attach court and in depriving constitutional,
the assailed Orders. On 28 September 1998, On the third party complaint, third-party substantive and procedural due
the Court of Appeals denied respondent defendant John Tansipek is ordered to pay process premised solely on pure and
Tansipek’s Motion for Reconsideration for the third-party plaintiff Philippine simple technicality which never
having been filed out of time. Commercial and Industrial Bank all amounts existed and are imaginary and
said defendant/third-party plaintiff shall illusory.
Pre-trial on the main case ensued, wherein have to pay to the plaintiff on account of this
JOCI and PCIB limited the issues as case.3 c) The trial court erred in ordering
follows: the third-party defendant-appellant
Respondent Tansipek appealed the Decision John Tansipek to pay the third party
1. Whether or not the defendant bank to the Court of Appeals. The case was plaintiff-appellee PCIBank all
erred in allowing the deposit of docketed as CA-G.R. CV No. 69130. amounts said bank shall have to pay
Check No. 0302572 (Exh. "A") in Respondent Tansipek assigned the following to the plaintiff-appellee by way of
the amount of ₱4,050,136.51 drawn alleged errors: subrogation since appellant if
in favor of plaintiff JO Construction, allowed to litigate in the trial court,
Inc. in John Tansipek’s account a) The trial court’s decision would have obtained a favorable
when such check was crossed and upholding the order of default and judgment as he has good, valid and
clearly marked for payee’s account the consequent ex-parte reception of meritorious defenses.4
only. appellee’s evidence was anchored on
erroneous and baseless conclusion On 18 August 2006, the Court of Appeals
2. Whether the alleged board that: issued the assailed Decision finding that it
resolution and the articles of was an error for the trial court to have acted
Incorporation are genuine and a valid 1) The original reglementary on PCIB’s motion to declare respondent
defense against plaintiff’s effort to period to plead has already Tansipek in default. The Court of Appeals
collect the amount of ₱4,050,136.51. expired. thus remanded the case to the RTC for
further proceedings, to wit:
On 14 July 2000, the RTC promulgated its 2) The ten day extended
Decision in Civil Case No. 97-508, the period to answer has likewise WHEREFORE, premises considered, the
dispositive portion of which reads: expired. appeal is GRANTED. The decision relative
to the third party complaint is REVERSED
WHEREFORE, judgment is hereby rendered 3) There is no need to pass and SET ASIDE. The case is ordered
in favor of the plaintiff [JOCI] and against upon a second motion to REMANDED to the trial court for further
the defendant bank [PCIB] ordering the plead much less, any need for proceedings on the third party complaint.5
latter to pay to the plaintiff the sum of a new motion for extended
₱4,050,136.51 with interest at the rate of period to plead. The Court of Appeals denied the Motion for
twelve percent (12%) per annum from the Reconsideration of PCIB in a Resolution
filing of this complaint until fully paid plus dated 9 January 2008.
Petitioner Banco de Oro-EPCI, Inc., as (b) Relief from order of default.—A party specifically, it means that whatever is once
successor-in-interest to PCIB, filed the declared in default may at any time after irrevocably established as the controlling
instant Petition for Review on Certiorari, notice thereof and before judgment file a legal rule of decision between the same
assailing the above Decision and Resolution motion under oath to set aside the order of parties in the same case continues to be the
of the Court of Appeals, and laying down a default upon proper showing that his failure law of the case, whether correct on general
lone issue for this Court’s consideration: to answer was due to fraud, accident, principles or not, so long as the facts on
mistake or excusable negligence and that he which such decision was predicated continue
Whether or not the motion for has a meritorious defense. In such case, the to be the facts of the case before the court.
reconsideration of the default order was order of default may be set aside on such
the correct remedy terms and conditions as the judge may It may be stated as a rule of general
impose in the interest of justice. application that, where the evidence on a
NO. second or succeeding appeal is substantially
A Motion to Lift Order of Default is the same as that on the first or preceding
To recapitulate, upon being declared in different from an ordinary motion in that the appeal, all matters, questions, points, or
default, respondent Tansipek filed a Motion Motion should be verified; and must show issues adjudicated on the prior appeal are the
for Reconsideration of the Default Order. fraud, accident, mistake or excusable law of the case on all subsequent appeals
Upon denial thereof, Tansipek filed a neglect, and meritorious defenses.7 The and will not be considered or readjudicated
Petition for Certiorari with the Court of allegations of (1) fraud, accident, mistake or therein.
Appeals, which was dismissed for failure to excusable neglect, and (2) of meritorious
attach the assailed Orders. Respondent defenses must concur.8 xxxx
Tansipek’s Motion for Reconsideration with
the Court of Appeals was denied for having Assuming for the sake of argument, As a general rule a decision on a prior
been filed out of time. Respondent Tansipek however, that respondent Tansipek’s Motion appeal of the same case is held to be the law
did not appeal said denial to this Court. for Reconsideration may be treated as a of the case whether that decision is right or
Motion to Lift Order of Default, his Petition wrong, the remedy of the party deeming
Respondent Tansipek’s remedy against the for Certiorari on the denial thereof has himself aggrieved being to seek a rehearing.
Order of Default was erroneous from the already been dismissed with finality by the
very beginning. Respondent Tansipek Court of Appeals. Respondent Tansipek did Questions necessarily involved in the
should have filed a Motion to Lift Order of not appeal said ruling of the Court of decision on a former appeal will be regarded
Default, and Appeals to this Court. The dismissal of the as the law of the case on a subsequent
Petition for Certiorari assailing the denial of appeal, although the questions are not
respondent Tansipek’s Motion constitutes a expressly treated in the opinion of the court,
bar to the retrial of the same issue of default as the presumption is that all the facts in the
under the doctrine of the law of the case. case bearing on the point decided have
received due consideration whether all or
not a Motion for Reconsideration, pursuant In People v. Pinuila,9 we held that: none of them are mentioned in the opinion.
to Section 3(b), Rule 9 of the Rules of (Emphasis supplied.)
Court: "Law of the case" has been defined as the
opinion delivered on a former appeal. More
The issue of the propriety of the Order of likewise denied. However, the Labor Arbiter Case. The doctrine is founded on the policy
Default had already been adjudicated in then issued an Order limiting the amount of of ending litigation. The doctrine is
Tansipek’s Petition for Certiorari with the backwages that was due to petitioners. The necessary to enable the appellate court to
Court of Appeals. As such, this issue cannot NLRC reversed this Order, but the Court of perform its duties satisfactorily and
be readjudicated in Tansipek’s appeal of the Appeals reinstated the same. This Court, efficiently, which would be impossible if a
Decision of the RTC on the main case. Once applying the Doctrine of the Law of the question once considered and decided by it
a decision attains finality, it becomes the law Case, held: were to be litigated anew in the same case
of the case, whether or not said decision is upon any and every subsequent appeal.14
erroneous.10 Having been rendered by a The decision of the NLRC dated March 26,
court of competent jurisdiction acting within 1996 has become final and executory upon Likewise, to say that the Doctrine of the
its authority, the judgment may no longer be the dismissal by this Court of Cottonway’s Law the Case applies only when the
altered even at the risk of legal infirmities petition for certiorari assailing said decision appellate court renders a decision on the
and errors it may contain.11 and the denial of its motion for merits would be putting a premium on the
reconsideration. Said judgment may no fault or negligence of the party losing the
In the case, the SC is not persuaded by the longer be disturbed or modified by any court previous appeal.
argument of Tansipek that the doctrine of or tribunal. It is a fundamental rule that
the law of the case is not applicable, when a judgment becomes final and In the case at bar, respondent Tansipek
inasmuch as a Petition for Certiorari is not executory, it becomes immutable and would be awarded (1) for his failure to
an appeal. Respondent Tansipek further unalterable, and any amendment or attach the necessary requirements to his
argues that the Doctrine of the Law of the alteration which substantially affects a final Petition for Certiorari with the Court of
Case applies only when the appellate court and executory judgment is void, including Appeals; (2) for his failure to file a Motion
renders a decision on the merits, and not the entire proceedings held for that purpose. for Reconsideration in time; and (3) for his
when such appeal was denied due to Once a judgment becomes final and failure to appeal the Decision of the Court of
technicalities. executory, the prevailing party can have it Appeals with this Court. The absurdity of
executed as a matter of right, and the such a situation is clearly apparent.
We are not persuaded. issuance of a writ of execution becomes a
ministerial duty of the court. A decision that It is important to note that a party declared
In Buenviaje v. Court of Appeals,  therein
12
has attained finality becomes the law of the in default – respondent Tansipek in this case
respondent Cottonway Marketing case regardless of any claim that it is – is not barred from appealing from the
Corporation filed a Petition for Certiorari erroneous. The writ of execution must judgment on the main case, whether or not
with this Court assailing the Decision of the therefore conform to the judgment to be he had previously filed a Motion to Set
National Labor Relations Commission executed and adhere strictly to the very Aside Order of Default, and regardless of
(NLRC) ordering, inter alia, the essential particulars.13 (Emphases the result of the latter and the appeals
reinstatement of therein petitioners and the supplied.)1avvphil therefrom. However, the appeal should be
payment of backwages from the time their based on the Decision’s being contrary to
salaries were withheld up to the time of Furthermore, there is no substantial law or the evidence already presented, and
actual reinstatement. The Petition for distinction between an appeal and a Petition not on the alleged invalidity of the default
Certiorari was dismissed by this Court. The for Certiorari when it comes to the order.15
subsequent Motion for Reconsideration was application of the Doctrine of the Law of the
WHEREFORE, the Decision of the Court of
Appeals in CA-G.R. CV No. 69130 dated 18
August 2006 and the Resolution of the same
court dated 9 January 2008 are hereby
REVERSED and SET ASIDE. The Decision
of the Regional Trial Court of Makati City
in Civil Case No. 97-508 dated 14 July 2000
is hereby REINSTATED. No
pronouncement as to costs.

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice
 GLICERIA SARMIENTO, Petitioner, In the Notice of Appealed Case,5 the RTC It should be stressed that while the rules
vs. directed respondent to submit her should be liberally construed, the provisions
EMERITA ZARATAN, Respondent. memorandum in accordance with the on reglemenatry periods are strictly applied
provisions of Section 7(b) of Rule 40 of the as they are "deemed indispensable to the
On 2 September 2002, petitioner Gliceria Rules of Court and petitioner to file a reply prevention of needless delays and necessary
Sarmiento filed an ejectment case2 against memorandum within 15 days from receipt. to the orderly and speedy discharge of
respondent Emerita Zaratan, in the judicial business" (Legaspi-Santos vs. Court
Metropolitan Trial Court (MeTC) of Quezon Respondent’s counsel having received the of Appeals, G.R. No. 60577, October 11,
City, Branch 36, docketed as Civil Case No. notice on 19 May 2003, he had until 3 June 1983) and strict compliance therewith is
29109. 2003 within which to file the requisite mandatory and imperative (FJR Garments
memorandum. But on 3 June 2003, he filed Industries vs. Court of Appeals, G.R. No. L-
On 31 March 2003, the MeTC rendered a a Motion for Extension of Time of five days 49329, June 29, 1984). The same is true with
decision in favor of petitioner, the due to his failure to finish the draft of the respect to the rules on the manner and
dispositive portion of which reads: said Memorandum. He cited as reasons for periods for perfecting appeals (Gutierrez vs.
the delay of filing his illness for one week, Court of Appeals, L-25972, November 26,
WHEREFORE, the Court finds that plaintiff lack of staff to do the work due to storm and 1968).
has sufficiently established her causes flood compounded by the grounding of the
against the defendant and hereby order the computers because the wirings got wet.6 But Premises considered, the instant appeal is
defendant and all persons claiming rights the motion remained unacted. hereby DISMISSED. This renders academic
under her: defendant-appellant’s application for a writ
On 9 June 2003, respondent filed her of preliminary injunction.7 1awphi1.net
1. to pay plaintiff the monthly rentals Memorandum. On 19 June 2003, the RTC
of ₱3,500.00 for the said premises dismissed the appeal as follows: On the basis of the above-quoted Order,
from August 1, 2002 until defendant petitioner filed a Motion for Immediate
vacates the premises; Record shows that defendant-appellant Execution,8 while respondent moved for the
received the Notice of Appealed Case, Reconsideration.9 Both motions were denied
2. to pay plaintiff the sum of through counsel, on May 19, 2003 (Registry by the RTC on 31 July 2003. The Order in
₱20,000.00 plus ₱1,500.00 per Return Receipt dated May 12, 2003, Record, part reads:
appearance of counsel in court, as back of p. 298). Thus, under Section 7(b),
and for attorney’s fees; and Rule 40 of the 1997 Rules of Civil Petitioner moved for reconsideration of the
Procedure, she had fifteen (15) days or until said Order, while respondent sought
to pay the cost of suit.3 June 3, 2003 within which to submit a clarification on whether the 31 July 2003
memorandum on appeal. As further appears Order dismissing the appeal was anchored
Respondent filed her notice of on record, however, the required on Section (b), Rule 40 or Section 7(c) of
appeal.4 Thereafter, the case was raffled to Memorandum was filed by defendant- the same Rule.
the RTC of Quezon City, Branch 223, appellant only on June 9, 2003 (Record, p.
docketed as Civil Case No. Q-03-49437. 623), or six (6) days beyond the expiration On 27 August 2003, the RTC reconsidered
of the aforesaid fifteen day period. its previous Order by granting petitioner’s
motion for Immediate Execution, but denied Aggrieved, respondent filed a Petition for Hence, this appeal by petitioner posing the
respondent’s Motion for Clarification, in this Certiorari in the Court of Appeals, which following issues,16 thus:
wise: was granted in a decision dated 17 August
2004. The appellate court nullified and set 1. Whether respondent’s petition for
Section 21, Rule 70 of the Rules of Court aside the 19 June 2003 and 31 July 2003 certiorari should have been
provides that "the judgment of the Regional Orders of the RTC and ordered the dismissed in the first place;
Trial Court against the defendant shall be reinstatement of respondent’s appeal.
immediately executory, without prejudice to Consequently, respondent’s appeal 2. Whether the trial court committed
a further appeal that may be taken memorandum was admitted and the case grave abuse of discretion in denying
therefrom. Pursuant to this Rule and taking remanded to the RTC for further respondent’s motion for extension;
into account the arguments of the plaintiff in proceedings.12
her "Urgent Motion for Reconsideration," 3. Whether it is Section 19 of Rule 7
the Court is inclined to grant the same. As Petitioner filed a motion for that applies, and not Section 21; and
further correctly argued by the plaintiff, reconsideration13 on 13 September 2004,
through counsel, during the hearing on her followed by a Motion for Inhibition14 of the 4. Whether the Court of Appeals
motion on August 15, 2003, the cases of members of the Eighth Division of the Court Justices should have inhibited
City of Manila v. Court of Appeals (204 of Appeals on 20 September 2004. Both themselves from further proceeding
SCRA 362) and Sy vs. Romero (214 SCRA motions were denied for lack of merit on 10 with the subject case.
187) cited in the July 31, 2003 Order refer to March 2005.
ejectment cases which has (sic) been Stated otherwise, the main issue for
decided with finality and hence, inapplicable ISSUE: resolution is whether the Court of Appeals
to this case where a further appeal is still committed a reversible error of law in
available to the defendant. It should likewise whether the lack of notice of hearing in granting the Writ of Certiorari. In granting
be noted that while the Supreme Court ruled the Motion for Extension of Time to file the petition, the Court of Appeals ruled that
in these cases that execution of a judgment Memorandum on Appeal is fatal , such the RTC erred in dismissing respondent’s
in an ejectment case must be sought with the that the filing of the motion is a worthless appeal for failure to file the required
inferior court which rendered the same, it piece of paper. Memorandum within the period provided by
likewise provided that for an exception to law and in granting petitioner’s Motion for
this rule, that is, in cases where the appellate RULING: Immediate Execution of the MeTC decision.
court grants an execution pending appeal, as
the case herein. YES, but such fatality is not applicable in Before resolving the substantive issues
this case. raised by petitioner, the Court will first
With regard to defendant’s Motion for address the procedural infirmities ascribed
Clarification, contained in her Opposition, by petitioner. Petitioner assails the
the Court notes that the issues raised therein correctness and propriety of the remedy
have already been squarely dealt with in the resorted to by respondent by filing a Petition
July 31, 2003 Order. The same must, for Certiorari in the Court of Appeals.
therefore, be denied.11 According to petitioner, certiorari is not
appropriate and unavailing as the proper Petitioner also contends that the Petition for the petition, instead of the petition itself,
remedy is an appeal. Certiorari filed in the Court of Appeals indicate that respondent did not understand
should be dismissed as the certification of what she was signing. The defect of the
It must be noted that respondent’s appeal in non-forum shopping was defective. The verification all renders the petition in the
the RTC was dismissed for failure to file the verification in part reads: Court of Appeals without legal effect and
required memorandum within the period constitutes ground for its dismissal.
allowed by law, as the Motion for Extension I, EMERITA ZARATAN, of legal age, after
of Time to file Memorandum was not acted having been duly sworn to, according to law, The contention is baseless.
upon for failure to attach a notice of hearing. depose and say:
From the said dismissal, respondent filed a The purpose of requiring a verification is to
Petition for Certiorari in the Court of That I, Emerita Zaratan is one of the secure an assurance that the allegations of
Appeals. respondent (sic) in the above entitled case, the petition have been made in good faith, or
hereby declare, that I have caused the are true and correct, not merely speculative.
Respondent correctly filed said petition preparation and filing of the This requirement is simply a condition
pursuant to Section 41 of the Rules of Court, foregoing Comment on the Petition;  that I affecting the form of pleadings and non-
which provides: have read all the allegations therein, which compliance therewith does not necessarily
are true and correct to the best of my own render it fatally defective.17 Perusal of the
Section 1. Subject of appeal. An appeal may knowledge. verification in question shows there was
be taken from a judgment or final order that sufficient compliance with the requirements
completely disposes of the case, or of a That as respondent, I further certify that I of the Rules and the alleged defects are not
particular matter therein when declared by have not commenced any other action or so material as to justify the dismissal of the
these Rules to be appealable. proceeding involving the same issues in the petition in the Court of Appeals. The defects
foregoing Petition in the Court of Appeals, are mere typographical errors. There appears
No appeal may be taken: the Supreme Court, or different Divisions to be no intention to circumvent the need for
thereof, respectively, or any tribunal, or proper verification and certification, which
xxxx agency; and should it be known that a are intended to assure the truthfulness and
similar action or proceeding has been filed correctness of the allegations in the petition
(d) An order disallowing or dismissing an or is pending in any of the abovementioned and to discourage forum shopping.18
appeal; Courts or different Divisions thereof, the
petitioner shall notify the Honorable Court Now, the substantial issues.
xxxx to which this certification is filed, within
five (5) days from such notice. Corollary to the dismissal of the appeal by
In all the above instances where the (Underscoring ours.) the RTC is the question of whether the lack
judgment or final order is not appealable, the of notice of hearing in the Motion for
aggrieved party may file an appropriate civil Petitioner avers that respondent by stating in Extension of Time to file Memorandum on
action under Rule 65. (Underscoring the above-quoted certification that she was Appeal is fatal, such that the filing of the
supplied.) the respondent, while in truth she was the motion is a worthless piece of paper.
petitioner and by stating that respondent
caused the preparation of the comment on
Petitioner avers that, because of the failure motion is mandatory. As a rule, a motion There are, indeed, reasons which would
of respondent to include a Notice of Hearing without a Notice of Hearing is considered warrant the suspension of the Rules: (a) the
in her Motion for Extension of Time to file pro forma and does not affect the existence of special or compelling
Memorandum on Appeal in the RTC, the reglementary period for the appeal or the circumstances, b) the merits of the case, (c)
latter’s motion is a worthless piece of paper filing of the requisite pleading.19 a cause not entirely attributable to the fault
with no legal effect. or negligence of the party favored by the
As a general rule, notice of motion is suspension of rules, (d) a lack of any
It is not disputed that respondent perfected required where a party has a right to resist showing that the review sought is merely
her appeal on 4 April 2003 with the filing of the relief sought by the motion and frivolous and dilatory, and (e) the other
her Notice of Appeal and payment of the principles of natural justice demand that his party will not be unjustly prejudiced
required docket fees. However, before the right be not affected without an opportunity thereby.24 
expiration of time to file the Memorandum, to be heard.20 The three-day notice required
she filed a Motion for Extension of Time by law is intended not for the benefit of the Elements or circumstances (c), (d) and (e)
seeking an additional period of five days movant but to avoid surprises upon the exist in the present case.
within which to file her Memorandum, adverse party and to give the latter time to
which motion lacked the Notice of Hearing study and meet the arguments of the The suspension of the Rules is warranted in
required by Section 4, Rule 15 of the 1997 motion.21 Principles of natural justice this case.
Rules of Court which provides: demand that the right of a party should not
be affected without giving it an opportunity In the case at bar, the motion in question
SEC. 4. Hearing of Motion. - Except for to be heard.22 does not affect the substantive rights of
motions which the court may act upon petitioner as it merely seeks to extend the
without prejudicing the rights of the adverse The test is the presence of the opportunity to period to file Memorandum. The required
party, every written motion shall be set for be heard, as well as to have time to study the extension was due to respondent’s counsel’s
hearing by the applicant. motion and meaningfully oppose or illness, lack of staff to do the work due to
controvert the grounds upon which it is storm and flood, compounded by the
Every written motion required to be heard based.23 Considering the circumstances of grounding of the computers. There is no
and the notice of the hearing thereof shall be the present case, we believe that procedural claim likewise that said motion was
served in such a manner as to ensure its due process was substantially complied interposed to delay the appeal.25 As it
receipt by the other party at least three (3) with. appears, respondent sought extension prior
days before the date of hearing, unless the to the expiration of the time to do so and the
court for good cause sets the hearing on memorandum was subsequently filed within
shorter notice. the requested extended period. Under the
circumstances, substantial justice requires
that we go into the merits of the case to
resolve the issue of who is entitled to the
possession of the land in question.

As may be gleaned above and as held time Further, it has been held that a "motion for
and again, the notice requirement in a extension of time x x x is not a litigated
motion where notice to the adverse party is for they are adopted to help secure, not On the issue of immediate execution of
necessary to afford the latter an opportunity override, substantial justice, and thereby judgment.
to resist the application, but an ex parte defeat their very aims. As has been the
motion made to the court in behalf of one or constant rulings of this Court, every party- The applicable provision is Section 19, Rule
the other of the parties to the action, in the litigant should be afforded the amplest 70 of the Rules of Court, which reads:
absence and usually without the knowledge opportunity for the proper and just
of the other party or parties." As a general disposition of his cause, free from SEC. 19. Immediate Execution of judgment;
rule, notice of motion is required where a constraints of technicalities.28 Indeed, rules how to stay the same.- If judgment is
party has a right to resist the relief sought by of procedure are mere tools designed to rendered against the defendant, execution
the motion and principles of natural justice expedite the resolution of cases and other shall issue immediately upon motion, unless
demand that his rights be not affected matters pending in court. A strict and rigid an appeal has been perfected and the
without an opportunity to be heard. It has application of the rules that would result in defendant to stay execution files a sufficient
been said that "ex parte motions are technicalities that tend to frustrate rather supersedeas bond, approved by the
frequently permissible in procedural matters, than promote justice must be avoided.29 Municipal Trial Court and executed in favor
and also in situations and under of the plaintiff to pay the rents, damages,
circumstances of emergency; and an The visible emerging trend is to afford every and costs accruing down to the time of the
exception to a rule requiring notice is party-litigant the amplest opportunity for the judgment appealed from, and unless, during
sometimes made where notice or the proper and just determination of his cause, the pendency of the appeal, he deposits with
resulting delay might tend to defeat the free from constraints and technicalities. the appellate court the amount of rent due
objective of the motion."26 from time to time under the contract, if any,
Parenthetically, it must be noted also that as determined by the judgment of the
It is well to remember that this Court, in not when the appeal was dismissed on 19 June Municipal Trial Court. x x x.
a few cases, has consistently held that cases 2003, the memorandum was already filed in
shall be determined on the merits, after full court on 9 June 2003. To stay the immediate execution of
opportunity to all parties for ventilation of judgment in ejectment proceedings, Section
their causes and defense, rather than on 19 requires that the defendant-appellant
technicality or some procedural must (a) perfect his appeal, (b) file a
imperfections. In so doing, the ends of supersedeas bond, and (c) periodically
justice would be better deposit the rentals falling due during the
served.27 Furthermore, this Court pendency of the appeal.
emphasized its policy that technical rules
should accede to the demands of substantial As correctly observed by the Court of
justice because there is no vested right in Appeals, execution pending appeal was
technicalities. Litigations, should, as much premature as respondent had already filed a
as possible, be decided on their merits and supersedeas bond and the monthly rental for
not on technicality. Dismissal of appeals the current month of the premises in
purely on technical grounds is frowned question.30
upon, and the rules of procedure ought not to
be applied in a very rigid, technical sense,
The invocation of petitioner of the We reject the proposition. As to petitioner’s allegation that the Court of
provisions of Section 21, Rule 70 of the Appeals was selective in choosing what
Rules of Court, which runs: Inhibition must be for just and valid causes. issues to resolve, it bears to stress again that
The mere imputation of bias and partiality is "a judge’s appreciation or misappreciation
Sec. 21. Immediate execution on appeal to not enough ground for judges to inhibit, of the sufficiency of evidence x x x adduced
Court of Appeals or Supreme Court.- The especially when the charge is without basis. by the parties, x x x, without proof of malice
judgment of the Regional Trial Court against This Court has to be shown acts or conduct on the part of respondent judge, is not
the defendant shall be immediately clearly indicative of arbitrariness or sufficient to show bias and partiality."34 We
executory, without prejudice to a further prejudice before it can brand them with the also emphasized that "repeated rulings
appeal that may be taken therefrom. stigma of bias and partiality. 31 This Court against a litigant, no matter how
has invariably held that for bias and erroneously, vigorously and consistently
to justify the issuance of the writ of prejudice to be considered valid reasons for expressed, do not amount to bias and
execution pending appeal in this case is the voluntary inhibition of judges, mere prejudice which can be bases for the
misplaced. suspicion is not enough. Bare allegations of disqualification of a judge."35
their partiality will not suffice "in the
A closer examination of the above-quoted absence of clear and convincing evidence to IN ALL, petitioner utterly failed to show
provision reveals that said provision applies overcome the presumption that the judge that the appellate court erred in issuing the
to decision of the RTC rendered in its will undertake his noble role to dispense assailed decision. On the contrary, it acted
appellate jurisdiction, affirming the decision justice according to law and evidence and prudently in accordance with law and
of the MeTC. without fear and favor."32 jurisprudence.

In the case at bar, the RTC order was an There is no factual support to petitioner’s WHEREFORE, the instant petition is hereby
order dismissing respondent’s appeal based charge of bias and partiality. A perusal of DENIED for lack of merit. The Decision
on technicality. It did not resolve substantive the records of the case fails to reveal that dated 17 August 2004 and the Resolution
matters delving on the merits of the parties’ any bias or prejudice motivated the Court of dated 10 March 2005 of the Court of
claim in the ejectment case. Thus, the case Appeals in granting respondent’s petition. Appeals in CA-G.R. SP No. 79001 are
brought to the Court of Appeals was the Neither did this Court find any questionable hereby AFFIRMED. No costs.
dismissal of the appeal for failure to file the or suspicious circumstances leading to the
required memorandum within the period issuance of the questioned decision, as SO ORDERED.
provided by law, and not on the merits of the suggested by petitioner.
ejectment case.
The fact alone that the Court of Appeals
Lastly, petitioner posited the view that the decided the case within eight months does
Court of Appeals’ justices should have not in any way indicate bias and partiality
inhibited themselves because of bias and against petitioner. It is within the
partiality for deciding the case within eight constitutional mandate to decide the case
months and for being very selective in within 12 months.33
discussing the issues.
UNITED INTERIOR MANGGAHAN Aggrieved, petitioner moved for attach a board resolution authorizing
HOMEOWNERS ASSOCIATION, reconsideration,  but was denied in an
8
Calilung to file the Notice of Appeal on its
REPRESENTED BY ITS PRESIDENT, Order9 dated May 6, 2014. Consequently, behalf; and had failed to show proof of
DANIEL CALILUNG, Petitioner, v. HON. petitioner filed a Notice of Appeal.10 For payment of the required appeal fees. They
AMBROSIO B. DE LUNA, PRESIDING their part, Sps. Villon filed an Omnibus added that petitioner's motion for
JUDGE, REGIONAL TRIAL COURT Motion to Strike Out Notice of Appeal and reconsideration failed to comply with the
OF PALAWAN AND PUERTO Issue Certificate of Finality,11 claiming that three (3)-day notice rule under Sections
PRINCESA CITY - BRANCH 51, petitioner failed to attach a board resolution 4,24 5,25 and 6,26 Rule 15 of the Rules of
SPOUSES EDILBERTO VILLON AND authorizing Calilung to file the Notice of Court.27
HELEN PE-VILLON, REPRESENTED Appeal on its behalf, pursuant to Section 12
BY THEIR HEIRS NAMELY: EMEE of Republic Act No. (RA) 9904.12 They also In an Order28 dated December 12, 2014, the
PE-VILLON, EMMANUEL PE- claimed that petitioner no longer exists and RTC denied petitioner's motion on the same
VILLON, ELSIE VILLON-CABRERA, that it failed to comply with the reportorial ground,29 adding that petitioner failed
ELMA VILLON-AUSTRIA, AND requirements mandated by Section 46, Rule to "present proof that the required docket
ELLEN FERRERO, Respondents. 813 and Section 63, Rule 1014 of Housing and and other court fees were paid" 30 and to
Land Use Regulatory Board Resolution No. comply with Section 4, Rule 15 of the same
Sometime in early 2000, petitioner, as 877, Series of 2011,15 and furthermore, did Rules that requires at least three (3) days
represented by its President, Daniel Calilung not show proof of payment of the required prior notice for the hearing of its motion for
(Calilung), filed before the RTC a appeal fees.16 reconsideration.31 Accordingly, the RTC
Complaint4for Specific Performance with declared the September 19, 2014 Order final
Prayer for the Issuance of a Temporary The RTC Ruling and executory.32
Restraining Order and Preliminary
Injunction with Damages against Undaunted, petitioner filed the
respondents Spouses Edilberto Villon and On September 19, 2014, the RTC present certiorari  petition against the heirs
Helen Pe-Villon (Sps. Villon), now ordered17 petitioner's Notice of Appeal of Sps. Villon, i.e., herein respondents.
represented by their heirs Emee Pe-Villon, expunged from the records "for lack of
Emmanuel Pe-Villon, Elsie Villon-Cabrera, authority from [its] Board of Directors to The Issue Before the Court
Elma Villon-Austria, and Ellen Ferrero initiate the appeal,"18 pursuant to Section 12
(respondents). After petitioner rested its of RA 9904. It, however, found The essential issue for the Court's resolution
case, Sps. Villon filed a Manifestation and that "[petitioner] has paid the appeal fee is whether or not the RTC gravely abused its
Motion to Dismiss on Demurrer to within the reglementary period."19 discretion in expunging petitioner's Notice
Evidence5 which the RTC eventually of Appeal from the records of the case.
granted in an Order6 dated March 5, Dissatisfied, petitioner sought
2014,7 and thereby dismissed petitioner's reconsideration,  attaching therewith a copy
20 The Court's Ruling
complaint. of Board Resolution No. 01, Series of
2013,21 confirming Calilung's authority to, YES.
among others, represent petitioner in the
case.22 For their part, Sps. Villon The petition is meritorious.
opposed,23 reiterating that petitioner did not
Preliminarily, respondents when the assailed orders were issued in
assail  petitioner's
33
present resort to excess of or without jurisdiction or with Under Section 9, Rule 41 of the Rules of
a certiorari  action arguing that: being final, grave abuse of discretion amounting to lack Court, "[i]n appeals by notice of appeal, the
the September 19, 2014 and December 12, or excess thereof. Grave abuse of discretion court loses jurisdiction over the case upon
2014 Orders are not the proper subject of a may arise when a lower court or tribunal the perfection of the appeals filed in due
petition for certiorari;34 and, in any case, violates or contravenes the Constitution, time  and the expiration of the time to
direct filing of the petition to the Court existing law, or jurisprudence. As will be appeal of the other parties."41 In fact, under
violates the doctrine of hierarchy of courts.35 discussed in detail below, the RTC's order, Section 13 of the same Rules, the trial court,
expunging from the records petitioner's prior to the transmittal of the original record
The Court finds petitioner's resort to Notice of Appeal was a grave legal error and or record on appeal, may, motu propio or on
a certiorari  petition before the Court proper. contradicts established procedural rules. motion, order the dismissal of the appeal on
the grounds specified therein.
Under Section 1, Rule 65 of the Rules of In this relation, it should be observed that
Court, an aggrieved party may file a petition while strict adherence to the judicial As such, the mere filing of a notice of appeal
for certiorari when "any tribunal, board, or hierarchy of courts has been the long does not automatically divest the trial court
officer exercising judicial or quasi-judicial standing policy of the courts, it is not of its jurisdiction, since the appeal is deemed
functions has acted without or in excess of without exception as the Court possesses full perfected as to the appellant only; it is not
its or his jurisdiction, or with grave abuse of discretionary power to take cognizance and "deemed perfected," for purposes of
discretion amounting to lack or excess of assume jurisdiction over petitions filed divesting the court of its jurisdiction, "before
jurisdiction, and there is no appeal, nor any directly with it. A direct resort to the Court the expiration of the period to appeal of the
plain, speedy, and adequate remedy in the is allowed when the questions involved are other parties." Thus, contrary to petitioner's
ordinary course of law."36 Section 1, Rule 41 dictated by public welfare and the position, the RTC has yet to lose its
of the same Rules provides that no appeal advancement of public policy, or demanded jurisdiction over the case when it filed its
may be taken from, among others, an order by the broader interest of justice, 37 as in this Notice of Appeal as respondents' period to
disallowing or dismissing an appeal; the case.38 appeal had not yet expired by then.
aggrieved party may, however, file an
appropriate special civil action under Rule Proceeding to the main issue, petitioner This notwithstanding, the Court finds that
65. argues that pursuant to Section 9, Rule 41 of the RTC committed grave abuse of
the Rules of Court, once an appeal is discretion when it expunged from the
In this case, the assailed September 19, 2014 perfected, the trial court is divested of records petitioner's Notice of Appeal for
Order – expunging petitioner's Notice of jurisdiction all over the judgment and the "lack of authority from its Board of
Appeal from the records of the case– is action in which it is rendered so far as the Directors to initiate the appeal."42 Under the
effectively an order disallowing or rights of the parties under the judgment are Rules, an appeal from cases decided by the
dismissing an appeal that precludes resort to concerned.39 Thus, it has no power to do RTC in the exercise of its original
an appeal. Hence, pursuant to Section 1 of anything which affects the substantial rights jurisdiction shall be made to the Court of
Rule 41, its only recourse is via the of the parties therein.40 Appeals by "filing a notice of appeal [(or
present certiorari action. record of appeal in cases required by law)]
with the court which rendered the judgment
Moreover, certiorari is the proper remedy The Court disagrees. or final order appealed from and serving a
copy thereof upon the adverse party."43 The the submission of documents which neither All told, in acting as it did, the RTC clearly
appeal shall be taken, with the full amount the law nor the Rules and jurisprudence committed grave legal error that far exceeds
of the appellate court docket and other require. the proper exercise of its jurisdiction.
lawful fees paid, within fifteen (15) days
from notice of the judgment or final order Moreover, it should be pointed out that WHEREFORE, the petition
appealed from.44 petitioner's failure to present proof of is GRANTED. The Orders dated September
payment of the appeal fees, as ruled by the 19, 2014 and December 12, 2014 of the
It is clear from the foregoing provisions that RTC in the December 12, 2014 Order, is not Regional Trial Court of Palawan and Puerto
a board resolution authorizing the fatal to petitioner's appeal especially Princesa City, Branch 51 (RTC) in Civil
representative to initiate the appeal is not considering its earlier finding that Case No. 3442 are hereby SET ASIDE. The
required for the purpose of filing a notice of petitioner "has paid the appeal fee within Regional Trial Court is DIRECTED to give
appeal. This is because a notice of appeal is the reglementary period."48 Under the Rules, due course to petitioner's Notice of Appeal.
not a pleading, initiatory or otherwise, that, it is the non-payment of the docket and other
when required by the law or the rules,45 must lawful fees within the reglementary period SO ORDERED.
contain, among others, a verification and that would justify the court in dismissing the
certification against forum shopping to be appeal.49
signed by the party or his/her representative,
and, in the case of a representative, proof of Finally, it should be reiterated that
his/her authority to file the procedural rules are meant to facilitate, not
action, i.e., power of attorney or secretary's defeat, the attainment of
certificate with copy of the board resolution. justice.50 Considering the grave legal error it
Besides, if only to put to rest any doubts had committed in expunging petitioner's
anent respondents' objection against Notice of Appeal from the records on
Calilung's authority to represent petitioner in grounds which neither the law nor the Rules
the case,46 the latter in fact submitted, with and jurisprudence require, it behooved the
its motion for reconsideration, a copy of RTC to set aside the procedural infirmity in
Board Resolution No. 01, Series of 201347 to petitioner's motion for reconsideration of the
this effect. Thus, when the RTC in this case September 19, 2014 Order, i.e., failure to
expunged petitioner's Notice of Appeal for comply with the three (3)-day notice rule,
lack of authority from petitioner's Board of and instead give due course to its appeal.
Directors to initiate the appeal, it not only The purpose, after all, of this notice
effectively requirement is to provide respondents with
the opportunity to be heard, and to
meaningfully oppose petitioner's motion or
participate in the hearing thereof, 51 which
expanded the procedural requirements for respondents were sufficiently able to do so
initiating an appeal; more than anything, it through their Comment/Opposition52 to
effectively deprived petitioner of further petitioner's motion.
recourse to the higher courts by asking for
 On August 7, 2002, Spouses Co and Jupiter
BANK OF PHILIPPINE ISLANDS v. filed a complaint for the nullification of SO ORDERED.
SPS. JOHNSON AND EVELYN CO foreclosure proceedings and damages before The motion for reconsideration of Spouses
AND JUPITER REAL ESTATE the Regional Trial Court of Parañaque City, Co and Jupiter was also denied. [15]
VENTURES + Branch 257 ("RTC Br. 257"), docketed as
Civil Case No. 02-0331.[11] On September 22, 2003, Jupiter filed a
On November 13, 1997, Jupiter Real Estate petition for corporate rehabilitation[16] dated
Ventures, Inc. ("Jupiter") and Spouses Co On April 29, 2003, BPI filed a petition for September 9, 2003 with the RTC of Pasay
obtained a loan from Far East Bank and the issuance of a writ of possession before City Br. 231 ("RTC Br. 231") docketed as
Trust Company ("FEBTC") in the amount of the Regional Trial Court of Parañaque City, RTC SEC No. 03-0006-CFM. On October 6,
P9,434,200.00.[5] As security for the loan, Branch 196 ("RTC Br. 196"), docketed as 2003, Spouses Co and Jupiter moved for the
Jupiter and Spouses Co mortgaged in favor LRC Case No. 03-0063.[12] suspension of the proceedings before the
of FEBTC eight parcels of land including RTC Br. 196.[17] They alleged that on
their improvements covered by Transfer On June 12, 2003, Spouses Co and Jupiter September 24, 2003, the RTC Br. 231 issued
Certificates of Title (TCT) Nos. 94204, moved for the consolidation of LRC Case a Stay Order after Jupiter filed its petition
94205, 94206, 94207, 94208, 94209, No. 03-0063 with Civil Case No. 02-0331. for rehabilitation and among the properties
(91437) 39728, and (91438) 39729.[6] [13]
  covered were those subject of the real estate
mortgage. Spouses Co and Jupiter alleged
Meanwhile, BPI and FEBTC merged, with In an Order[14] dated August 7, 2003, the that because of the Stay Order, the writ of
BPI as the surviving corporation.[7] RTC Br. 196 denied the motion, to wit: possession may not be issued.[18] Spouses
Co, however, admitted in their pleadings
Jupiter and Spouses Co defaulted on the Given the distinctiveness of the causes of that the Stay Order was later lifted. [19] In an
payment of the loan. BPI, as successor-in- action available to the parties herein a Order dated March 30, 2004, the RTC Br.
interest of FEBTC, foreclosed the real estate proceeding for issuance for a writ of 196 denied the Motion to Suspend
mortgage pursuant to Act No. 3135, as possession can be maintained independently Proceedings.[20]
amended.[8] An auction sale was held on July in relation to an action for annulment of
12, 2000 where the mortgaged properties document, without prejudice to the outcome In an Order[21] dated September 30, 2005, the
were sold to BPI as the highest bidder for of the latter. [Ong vs. Court of Appeals, 333 RTC Br. 196 issued a writ of possession in
P3,567,000.00. The Certificate of Sale was SCRA 189 (2000); Vaca vs. Court of favor of BPI. However, the order was
registered and annotated at the back of the Appeals, 234 SCRA 146 (1994); de Jacob mistakenly addressed to spouses Trinidad P.
certificates of title on August 22, 2000. vs. Court of Appeals, 184 SCRA 294 Salazar and Ranulfo M. Salazar and not to
[9]
 After the expiration of the period of (1990)]. Spouses Co.[22] Thus, BPI filed a motion to
redemption, BPI consolidated its ownership amend the order,[23] which was granted.[24] In
over the real properties, and new titles were WHEREFORE, premises considered, the an Amended Order[25] dated December 8,
issued in its name.[10] motion for consolidation dated June 9, 2002 2005, the RTC Br. 196 held:
is hereby DENIED for lack of merit.
WHEREFORE, premises considered, the BPI filed a motion for reconsideration to set Whether the CA erred in denying the
Petition dated March 10, 2003 is hereby aside the Order dated December 15, 2005, consolidation of LRC Case No. 03-0063
GRANTED, and, let a Writ of Possession be but the RTC Br. 196 denied the motion for with Civil Case No. 02-0331.
issued in favor of petitioner, Bank of the lack of merit in an Order dated January 13,
Philippine Islands, which writ, be made 2006.[31] The trial court held:
effective upon respondent, respondent Our Ruling
Spouses Johnson A. Co & Evelyn Sy-Co, Considering an appeal is a substantive right
their assigns, heirs and any person deriving of a party herein to undertake an appellate Validity of the Issuance of the Writ of
any interest from the latter, over the proceeding, petitioner's insistence on the Possession
properties identified as Eot Nos. 1 to 8 of nature of a writ of possession granted in its
Block 3 of the subd. plan (LRC) Psd-1643, favor cannot override the substantive right Under Section 7[52] of Act No. 3135, as
being a portion of Lot 5-A (ERC) Psd- of an oppositors-mortgagors to appeal. amended by Act No. 4118, the purchaser in
187700, LRC Record No. 54982, situated in a foreclosure sale may apply for a writ of
Barrio Ibayo, Municipality of Parañaque and WHEREFORE, premises considered, possession during the redemption period.
covered by Transfer Certificates of Title petitioner's Motion for Reconsideration Upon the purchaser's filing of an ex
Nos. TCT Nos. 150405 to 150412 issued by dated January 3, 2006 is denied for lack of parte petition and posting of the appropriate
the Register of Deeds of Pasay City. merit. bond, the RTC shall, as a matter of course,
order the issuance of the writ of possession
SO ORDERED. (Underscoring in the Let the records of this case be elevated in the purchaser's favor. But equally well
original) immediately to the appellate court. settled is the rule that a writ of possession
will issue as a matter of course, even without
On October 21, 2005, Spouses Co and The Issues the filing and approval of a bond, after
Jupiter filed a notice of appeal of the Order consolidation of ownership and the issuance
dated September 30, 2005.[26] In its The issues for resolution are: of a new TCT in the name of the purchaser.
comment, BPI argued that the order of the [53]

trial court granting a writ of possession is Whether the writ of possession was validly
merely interlocutory from which no appeal issued; Upon expiration of the redemption period,
is taken.[27] Spouses Co and Jupiter the right of the purchaser to the possession
countered that based on the case of Samson Whether the RTC Br. 196 erred in giving of the foreclosed property becomes absolute.
v. Rivera,[28] the remedy from an order due course to the Notice of Appeal of This right to possession is based on the
granting a writ of possession is an ordinary Spouses Co and Jupiter from its Order purchaser's ownership of the property.[54] In
appeal.[29] dated September 30, 2005 and Amended like manner, the mere filing of an ex
Order dated December 8, 2005 granting parte motion for the issuance of the writ of
In an Order dated December 15, 2005, the the writ of possession in favor of BPI; possession would suffice and the filing of a
RTC Br. 196 granted the notice of appeal of bond is no longer necessary. This is because
Spouses Co and Jupiter and ordered the possession has become the absolute right of
elevation of the records of the case to the Whether or not Act No. 3135, as amended, the purchaser as the confirmed owner.[55]
CA.[30] violates the Constitution; and
RULING: As pointed out, the remedy provided under
Section 8 of Act No. 3135 to the debtor
An error of judgment committed by a court becomes available only after the purchaser
in the exercise of its legitimate jurisdiction is acquires actual possession of the property.
Remedy to assail an order granting a writ of not the same as grave abuse of discretion. This is required because until then the
possession Errors of judgment are correctible by appeal debtor, as the owner of the property, does
while those of jurisdiction are reviewable not lose his right to possess.
We find no merit in BPI's argument that the by certiorari.[65] In 680 Home Appliances,
order of the RTC Br. 196 granting a writ of Inc. v. Court of Appeals,[66] we explained However, upon the lapse of the
possession is merely interlocutory from that Act No. 3135 finds no application after redemption period without the debtor
which no appeal may be taken. the lapse of the redemption period, and the exercising his right of redemption and the
remedy of a debtor to contest the possession purchaser consolidates his title, it
In Mallari v. Banco Filipino Savings and of the property is a separate action, and not becomes unnecessary to require the
Mortgage Bank,[62] we ruled that it is the the appeal provided for in Section 8 of the purchaser to assume actual possession
ministerial duty of the trial court to issue a Act. We explained: thereof before the debtor may contest it.
writ of possession in favor of the purchaser Possession of the land becomes an absolute
who has already consolidated its title. After In a number of cases, the Court declared that right of the purchaser, as this is merely an
the consolidation of title in the buyer's name Section 8 of Act No. 3135 is the available incident of his ownership. In fact, the
for failure of the mortgagor to redeem the remedy to set aside a writ of possession, issuance of the writ of possession at this
property, the writ of possession becomes a without considering whether the writ point becomes ministerial for the court. The
matter of right. Its issuance to a purchaser in involved in each of these cases was issued debtor contesting the purchaser's possession
an extrajudicial foreclosure sale is merely a during or after the lapse of the redemption may no longer avail of the remedy under
ministerial function. The trial court has no period. Upon revaluation, we find it Section 8 of Act No. 3135, but should
discretion on this matter. Hence, any necessary to make a distinction and clarify pursue a separate action e.g., action for
assertion of discretion in connection with when the remedy under Section 8 of Act No. recovery of ownership, for annulment of
such issuance is misplaced, and a petition 3135 may be availed of. mortgage and/or annulment of foreclosure.
for certiorari is not a proper remedy.[63] The FSAMI's consolidation of ownership
order for the issuance of a writ of possession xxx therefore makes the remedy under Section 8
being final, it is a proper subject for appeal. of Act No. 3135 unavailable for 680 Home.
Act No. 3135 governs only the manner of 680 Home cannot assail the writ of
We clarify, however, that this remedy of the sale and redemption of the mortgaged possession by filing a petition in LRC No.
appeal is different from the remedy provided real property in an extrajudicial foreclosure; M-5444.[67] (Citations omitted) (Emphasis in
in Section 8 of Act No. 3135, as amended by proceedings beyond these, i.e., upon the the original)
Act No. 4118.[64]  lapse of the redemption period and the
consolidation of the purchaser's title, are no Constitutionality of Act No. 3135, as
longer within its scope. xxx amended

Spouses Co alleged that the ex parte nature

of the proceedings under Section 7 of Act
No. 3135 violates the due process clause of person adversely interested. It is a foreclosure proceedings, and that the
the Constitution. In Rayo v. Metropolitan proceeding where the relief is granted issuance of the writ of possession should be
Bank and Trust Company, we already ruled without requiring an opportunity for the withheld.
that the issuance of the writ of possession in person against whom the relief is sought to
extrajudicial foreclosure proceedings docs be heard. No notice is needed to be served They alleged the existence of "unique and
not violate the mortgagor's right to upon persons interested in the subject peculiar set of facts"[73] that call for the
constitutional due process, thus: property. application of the cited cases. We disagree.

First, there was no violation of petitioner's xxx In Philippine Savings Bank, we upheld the
right to constitutional due process. In a long consolidation of a petition for the issuance
line of cases, we have consistently ruled that Now, petitioner is challenging the of a writ of possession with an ordinary civil
the issuance of a writ of possession in favor constitutionality of Section 7 of Act No. action in order to achieve a more expeditious
of the purchaser in a foreclosure sale of a 3135, as amended, lie avers that Section 7 resolution of the cases. However, in the
mortgaged property under Section 7 of Act violates the clue process clause because, by more recent case of Espinoza v. United
No. 3135, as amended is a ministerial duty the mere  filing of an ex parte motion in the Overseas Bank Phils.,[74] we held that the
of the court. The purchaser of the foreclosed proper cadastral court, the purchaser in a consolidation of a petition for the issuance
property, upon ex parte application and the foreclosure sale is allowed to obtain of a writ of possession with the proceedings
posting of the required bond, has the right to possession of the foreclosed property during for nullification of foreclosure would be
acquire possession of the foreclosed the redemption period. highly improper when title to the litigated
property during the 12-month redemption property had already been consolidated in
period and with more reason, after the The Court of Appeals ruled that petitioners the name of the mortgagee-purchaser, as in
expiration of the redemption period. attempt to challenge the constitutionality of the case of BPI. "Otherwise, not only will
Section 7 of Act No. 3135, as amended, the very purpose of consolidation (which is
An ex parte petition for the issuance of a constitutes a collateral attack that is not to avoid unnecessary delay) be defeated but
writ of possession under Section 7 of Act allowed. We fully agree with the appellate the procedural matter of consolidation will
No. 3135 is not, strictly speaking, a "judicial court's ruling, for reasons of public policy, also adversely affect the substantive right of
process" as contemplated in Article 433 of the constitutionality of a law cannot be possession as an incident of ownership."[75]
the Civil Code. It is a judicial proceeding for attacked collaterally.[68] (Emphasis and
the enforcement of one's right of possession citations omitted) In Bank of Commerce, we ordered the
as purchaser in a foreclosure sale. It is not an On the propriety of consolidation consolidation of a receivership case with the
ordinary suit filed in court, by which one petition for certiorari after a finding that
party "sues another for the enforcement of a Spouses Co claim that based on our rulings the certiorari petition therein is only a
wrong or protection of a right, or the in Philippine Savings Bank v. Mañalac, Jr., pending incident in the receivership case,
prevention or redress of a wrong." It is a [69]
 Bank of Commerce v. Perlas-Bernabe, and that the outcome of
non-litigious proceeding authorized in an [70]
 Sulit v. Court of Appeals,[71] and Barican the certiorari proceeding will have a bearing
extrajudicial foreclosure of mortgage v. Intermediate Appellate Court,[72] the on the receivership case. In this case, the
pursuant to Act No. 3135, as amended, and proceedings for the issuance of a writ of issuance of the writ of possession is not a
is brought for the benefit of one party only, possession should have been consolidated pending incident to the action for nullity of
and without notice to, or consent by any with their action for annulment of the foreclosure.
In Barican, we held that the obligation of a
court to issue a writ of possession ceases to
be ministerial if there is a third party holding
the property adversely to the judgment
debtor.[76] In this case, there is no third party
holding the property adversely to the
judgment debtor.

In Sulit, we withheld the issuance of a writ

of possession in favor of the mortgagee or
purchaser in an extrajudicial foreclosure sale
for failure of the mortgagee to pay a
substantial amount of the surplus proceeds
of the sale to the mortgagor. In this case, the
issue of payment of the foreclosure proceeds
was never raised. In fact, BPI already
consolidated title and ownership of the
subject properties and new titles issued in its
name after the expiration of the redemption
period.

In view of the foregoing, both petitions must

fail.

WHEREFORE, the petitions

are DENIED for lack of merit. The orders of
the RTC Br. 196 dated December 15, 2005
and January 13, 2006 assailed in G.R. No.
171172, as well as the Decision of the Court
of Appeals (CA) dated June 27, 2011 and its
Resolution dated January 9, 2012 assailed in
G.R. No. 200061 are hereby AFFIRMED.
The sheriff of the RTC Br. 196 is ordered
to PROCEED with the implementation of
the writ of possession without prejudice to
the outcome of Civil Case No. 02-0331.

SO ORDERED.
 UNITED ALLOY PHILIPPINES the lease, UniAlloy shall purchase the leased from taking possession of the disputed
CORPORATION, Petitioner, v. UNITED properties for P300 million to be paid on premises.10 The following day, respondent
COCONUT PLANTERS BANK [UCPB] staggered basis. UniAlloy also obtained Jakob Van Der Sluis filed a Motion to
AND/OR PHILIPPINE DEPOSIT loans from UCPB. Dismiss and Opposition to the Application
INSURANCE CORPORATION [PDIC], for Injunction or TRO11 on the grounds of
JAKOB VAN DER SLUIS AND On August 27, 2001, however, UniAlloy improper venue, forum-shopping,12 litis
ROBERT T.CHUA, Respondent. filed the aforesaid Complaint9 against pendentia, and for being a harassment suit
respondents. It claimed that, thru under the Interim Rules of Procedure for
UniAlloy is a domestic corporation engaged misrepresentation and manipulation, Intra-Corporate Cases. He argued that the
in the business of manufacturing and trading respondent Jakob Van Der Sluis took foil LPA specifically provides that any legal
on wholesale basis of alloy products, such as control of the management and operation of action aiising therefrom should be brought
ferrochrome, ferrosilicon and UniAlloy; that respondents connived with exclusively in the proper courts of Makati
ferromanganese. It has its principal office one another to obtain fictitious loans City. The Complaint did not disclose the
and business address at Phividec Industrial purportedly for UniAlloy as evidenced by pendency of Civil Case No. 2001-156
Area, Tagaloan, Misamis Oriental. Promissory Note Nos. 8111-00-00110-6, entitled "Ernesto Paraiso and United Alloy
Respondent UCPB, on the other hand, is a 8111-00-20031-1, and 8111-01-20005-6 for Philippines Corporation v. Jakob Van Der
banking corporation while respondent P6 million, US$10,000.00, and Sluis" before Branch 40, as well as CA-G.R.
Robert T. Chua (Chua) is one of its Vice- US$320,000.00, respectively; that UCPB SP No, 66240 entitled "Jakob Van Der Sluis
Presidents. Respondent Jakob Van Der Sluis demanded payment of said loans; and, that v. Honorable Epifanio T. Nacaya, et al." He
is a Dutch citizen and was the Chairman of UCPB unilaterally rescinded the LPA. further averred that what UniAlloy sought to
UniAlloy. Respondent Philippine Deposit UniAlloy prayed that judgment be issued: (i) enjoin is already  fait accompli.
Insurance Corporation is the assignee-in- ordering the annulment and/or reformation
interest of UCPB as regards the loan account of the three Promissory Notes; (ii) nullifying Respondents UCPB and Chua, on the other
of UniAlloy. UCPB's unilateral rescission of the LPA; hand, filed a Motion to Dismiss & Motion to
(iii) enjoining UCPB from taking possession Recall Temporary Restraining Order.13 In
On September 10, 1999, UniAlloy and of the leased premises; and (iv) ordering addition to the ground of improper venue,
UCPB entered into a Lease Purchase respondents to jointly and severally pay they raised the issue of lack of authority of
Agreement7 (LPA) wherein UniAlloy leased nominal and exemplary damages, as well as the person who verified the Complaint as no
from UCPB several parcels of land with a attorney's fees of P500,000.00 each. As secretary's certificate or a board resolution
total area of 156,372 square meters located ancillary relief, UniAlloy prayed for the was attached thereto.
in Barangay Gracia, Tagoloan, Misamis issuance of a temporary restraining order
Oriental,8 The three-year lease commenced and/or writ of preliminary injunction. During the hearing on the writ of
on August 1, 1999 to run until July 31, 2002 preliminary injunction on August 30, 2001,
for a monthly rent: of P756/700.00. The On the same day, the Executive Judge of the the RTC directed the parties to maintain
parties stipulated that upon the expiration of RTC, Cagayan de Oro City issued a 72-hour the status quo by not disturbing the
TRO directing UCPB to cease and desist possession of the present occupants of the
properties in question pending resolution of
respondents' motions,
 SO UniAlloy posted the requisite bond.
On September 13, 2001, the RTC, acting as ORDERED.15ChanRoblesVirtualawlibrary
Special Commercial Court, issued an cralawlawlibrary However, no writ of preliminary injunction
Order14 granting the motions to dismiss and was actually issued by the CA Manila
ordering the dismissal of the case on the Upon UCPB's motion, the RTC issued because of this Court's March 18, 2002
grounds of improper venue, forum-shopping another Order16 dated September 14, 2001 Resolution21 in G.R. No. 152238 restraining
and for being a harassment suit. The RTC directing the issuance of a writ of execution it from enforcing its February 18, 2002
held that venue was improperly laid to enforce its September 13, 2001 Order. Resolution. G.RNo. 152238 is a Petition
considering that the Promissory Notes Accordingly, a Writ of Execution 17 was for Certiorari initiated by UCPB assailing
sought to be annulled were issued pursuant issued directing the Sheriff to put UCPB in said Resolution of CA Manila. And, in
to a Credit Agreement which, in turn, possession of the disputed premises. It was deference to this Court, the CA Manila
stipulates that any legal action relating satisfied on September 17, 2001.18 The refrained from taking further action in CA-
thereto shall be initiated exclusively in the employees of UniAlloy were evicted from G.R. SP No. 67079 until G.R. No. 152238
proper courts of Makati City. It also opined the leased premises and UCPB's was resolved.22
that UniAlloy committed forum-shopping representatives were placed in possession
for failing to disclose in its certificate of thereof. On January 28, 2005, this Court rendered its
non-forum-shopping the pendency of Civil Decision23 in G.R. No. 152238 finding no
Case No, 2001-156 which involves the same On September 25, 2001, UniAlloy received grave abuse of discretion on the part of the
parties, the same transactions and the same copies of the RTC Orders.19 And on October CA in issuing its February 18, 2002
essential facts and circumstances. The cases, 9, 2001, it filed with the Court of Appeals, Resolution and, consequently, denying
as ruled by the RTC, have also identical Manila Station (CA Manila) its petition in UCPB's petition.
causes of action, subject matter and issues. CA-G.R. SP No. 67079 attributing grave
The dispositive portion of the September 13, abuse of discretion on the part of the court a Thereafter, and since this Court's Decision
2001 Order quo in (i) dismissing its petition on the in G.R. No. 152238 attained finality,
reads:chanRoblesvirtualLawlibrary grounds of improper venue, forum-shopping UniAUoy filed with the CA Manila a
and harassment, (ii) ordering the turnover of Motion to Issue and Implement Writ of
ACCORDINGLY, finding meritorious that the property in question to UCPB after the Preliminary Mandatory Injunction.24 In the
the venue is improperly laid and the dismissal of the Complaint, and (iii) meantime, the records of CA-G.R. SP No.
complain[an]t engaged in forum-shopping applying the Interim Rules of Procedure for 67079 were forwarded to CA CDO pursuant
and harassment of defendant Jakob Van der Intra-corporate Controversies. to Republic Act No. 8246.25cralawred
Sluis, this case is hereby DISMISSED
rendering the prayer issuance of a writ of On October 18,2001, the CA Manila issued On May 31, 2006, the CA CDO issued a
preliminary injunction moot and academic, a TRO. After hearing, the CA Manila issued Resolution26 denying UniAlloy's motion. It
and ordering plaintiff to turn over possession a Resolution20 dated February 18, 2002 found that UniAUoy had lost its right to
of the subject premises of the properties in granting UniAlloy's ancillary prayer for the remain in possession of the disputed
question at Barangay Gracia, Tagoloan, issuance of a writ of preliminary injunction premises because it defaulted in the payment
Misamis Oriental to defendant United upon posting of a bond in the amount of of lease rentals and it was duly served with a
Coconut Planters Bank. P300,000.00. notice of extrajudicial termination of the
LPA. Said court also found that UniAUoy
vacated the leased premises and UCPB was entirely free from some errors in substance,
already in actual physical possession thereof or lapses in procedure or in findings of fact In its Consolidated Reply,33 UniAlloy
as of August 24, 2001, or three days before or of law, and which that account could have counter-argues that it filed a Rule 65 petition
UniAUoy filed its complaint with the RTC. been reversed or modified on appeal, the with the CA because the remedy of appeal is
Hence, it could no longer avail of the indelible fact, however is that it was never inadequate as the RTC had already directed
remedy of preliminary injunction to regain appealed. It had become final and executory. the issuance of a writ of execution and that
possession of the disputed premises. It is now beyond the power of this Court to the RTC Orders are patently illegal.
modify it.29ChanRoblesVirtualawlibrary
UniAUoy filed a Motion for cralawlawlibrary UniAlloy availed of the correct remedy.
Reconsideration,27 which was denied in the Under Section 1 Rule 16 of the Rules of
CA CDO's November 29,2006 Resolution.28 ISSUE: Court, the following may be raised as
grounds in a motion to
On August 17, 2007, the CA CDO issued WHETHER OR NOT UNIALLOY dismiss:chanRoblesvirtualLawlibrary
the assailed Decision denying UniAlloy's AVAILED OF THE PROPER REMEDY
petition and affirming the RTC's questioned IN ASSAILING THE RTC’S ORDER SECTION 1. Grounds. — Within the time
Orders. It opined inter alia that UniAUoy DISMISSING THE COMPLAINT for but before filing the answer to the
erred in resorting to a Rule 65 petition complaint or pleading asserting a claim, a
because its proper recourse should have Our Ruling motion to dismiss may be made on any of
been to appeal the questioned Orders of the the following
RTC, viz.:chanRoblesvirtualLawlibrary grounds:chanRoblesvirtualLawlibrary
YES.
It is plain from the record, though, that (a) That the court has no jurisdiction over
Unialloy had lost its right to appeal. The UniAlloy availed of the proper remedy the person of the defending party;
time to make use of that remedy is gone. It is in assailing the RTC's September 13, 2001
glaringly obvious that Unialloy resorted to Order dismissing its Complaint (b) That the court has no jurisdiction over
this extraordinary remedy of certiorari and the subject matter of the claim;
mandamus as a substitute vehicle for In its Comment,31 UCPB defends the CA
securing a review and reversal of the CDO in denying due course to UniAlloy's (c) That venue is improperly laid;
questioned order of dismissal which it had, Petition for Certiorari and Mandamus. It
by its own fault, allowed to lapse into posits that UniAlloy should have filed with (d) That the plaintiff has no legal capacity to
finality. Unfortunately, none of the the RTC a Notice of Appeal from the Order sue;
arguments and issues raised by Unialloy in dated September 13, 2001 instead of a Rule
its petition can adequately brand the 13 65 petition before the CA, Respondents (e) That there is another action pending
September 2001 Order as void on its face for Jakob Van der Sluis and Chua echo UCPB's between the same parties for the same cause;
being jurisdietionaily flawed, nor mask the contention that UniAlloy resorted to a wrong (f) That the cause of action is barred by a
fact that it became final and executory by mode of remedy and that the dismissal of its prior judgment or by the statute of
Unialloy's failure to file an appeal on time. complaint had become final and executory limitations;
And so, even if the assailed order of which, in turn, rendered UniAlloy's Rule 65
dismissal might arguably not have been petition before the CA moot and academic. 32 (g) That the pleading asserting the claim
states no cause of action; before the RTC of Makati City, and not with
the RTC of Cagayan de Oro City.
(h) That the claim or demand set forth in the grounds of improper venue, forum-shopping
plaintiffs pleading has been paid, waived, and for being a harassment suit, which do But to justify its choice of venue, UniAlloy
abandoned, or otherwise extinguished; not fall under paragraphs (f), (h), or (i) of insists that the subject matter of its
Section 1, Rule 16. Stated differently, none Complaint in Civil Case No. 2001-219 is not
(i) That the claim on which the action is of the grounds for the dismissal of the LPA, but the fictitious loans that
founded is unenforceable under the UniAlloy's Complaint is included in Section purportedly matured on April 17, 2001.40
provisions of the statute of frauds; and 5 of Rule 16 of the Rules of Court. Hence,
since the dismissal of its Complaint was UniAlloy's insistence lacks merit. Its
(j) That a condition precedent for filing the without prejudice, the remedy then available Complaint unequivocally sought to declare
claim has not been complied to UniAlloy was a Rule 65 petition. "as null and void the unilateral rescission
with.cralawlawlibrary made by defendant UCPB of its subsisting
CA CDO did not err in affirming the Lease Purchase Agreement with
Except for cases falling under paragraphs dismissal of UniAlloy's Complaint on the [UniAlloy]."  What UCPB unilaterally
41

(f), (h), or (i), the dismissal of an action grounds of improper venue, forum- rescinded is the LPA and without it there
based on the above-enumerated grounds shopping can be no unilateral rescission to speak of.
is without prejudice and does not preclude and for being a harassment suit Hence, the LPA is the subject matter or at
the refiling of the same action. And, under least one of the subject matters of the
Section l(g) of Rule 41,34 an order The RTC was correct in dismissing Complaint. Moreover, and to paraphrase the
dismissing an action without prejudice is not UniAlloy's Complaint on the ground of aforecited paragraph 18 of the LPA, as long
appealable. The proper remedy therefrom is improper venue. In general, personal actions as the controversy arises out of or is
a special civil action for certiorari under must be commenced and tried (i) where the connected therewith, any legal action should
Rule 65,35 But, if the reason for the dismissal plaintiff or any of the principal plaintiffs be filed exclusively before the proper courts
is based on paragraphs (f), (h), or (i) resides, (ii) where the defendant or any of of Makati City. Thus, even assuming that the
(i.e., res judicata, prescription, the principal defendants resides, or (III) in LPA is not the main subject matter,
extinguishment of the claim or demand, and the case of a resident defendant where he considering that what is being sought to be
unenforceability under the Statute of Frauds) may be found, at the election of the annulled is an act connected and inseparably
the dismissal, under Section 5,36 of Rule 16, plaintiff.37 Nevertheless, the parties may related thereto, the Complaint should have
is with prejudice and the remedy of the agree in writing to limit the venue of future been filed before the proper courts in Makati
aggrieved party is to appeal the order actions between them to a specified place.38 City.
granting the motion to dismiss.
In the case at bench, paragraph 18 of the With regard forum-shopping, our review of
Here, the dismissal of UniAlloy's Complaint LPA expressly provides that "[a]ny legal the records of this case revealed that
was without prejudice. The September 13, action arising out of or in connection with UniAlloy did not disclose in the
2001 Order of the RTC dismissing this Agreement shall be Verification/Certification of the Complaint
UniAlloy's Complaint was based on the brought exclusively in the proper courts of the pendency of Civil Case No. 2001-156
Makati City, Metro Manila."39 Hence, entitled "Ernesto Paraiso and United Alloy
UniAlloy should have filed its complaint Philippines Corporation v. Jakob Van Der
Sluis." The trial court took judicial notice of Forum-shopping indeed exists in this case, a court, agency or a person to refrain from
its pendency as said case is also assigned for both actions involve the same doing a particular act or acts.44 In Bacolod
and pending before it. Thus, we adopt the transactions and same essential facts and City Water District v. Hon. Labayen, 45 this
following unrebutted finding of the circumstances as well as identical causes of Court elucidated that the auxiliary remedy of
RTC:chanRoblesvirtualLawlibrary action, subject matter and issues, x x preliminary injunction persists only until it
x42cralawlawlibrary is dissolved or until the tepnination of the
These two civil cases have identical causes main action without the court issuing a final
of action or issues against defendant Jakob The dismissal of UniAlloy's main injunction, viz.:chanRoblesvirtualLawlibrary
Van Der Sluis for having misrepresented to action carries with it the dissolution of
plaintiff and its stockholders that he can any ancillary relief previously granted x x x Injunction is a judicial writ, process or
extend financial assistance in running the therein. proceeding whereby a party is ordered to do
operation of the corporation, such that on or refrain from doing a certain act, It may be
April 6, 2001 plaintiff adopted a UniAlloy argues that the CA CDO erred in the main action or merely a provisional
Stockholders Resolution making defendant denying its petition considering that this remedy for and as an incident in the main
Jakob chairman of the corporation for Court has already sustained with finality the action.
having the financial capability to provide the CA Manila's February 18, 2002 Resolution
financial needs of plaintiff and willing to granting its prayer for the issuance of a writ The main action for injunction is distinct
finance the operational needs thereof; that a of preliminary mandatory injunction. from the provisional or ancillary remedy of
Memorandum of Agreement was preliminary injunction which cannot exist
subsequently entered between the parties The contention is non sequitur. except only as part or an incident of an
whereby defendant Jakob obligated to independent action or proceeding. As a
provide sufficient financial loan to plaintiff "Provisional remedies [also known as matter of course, in an action for injunction,
to make it profitable; that Jakob maliciously ancillary or auxiliary remedies], are writs the auxiliary remedy of preliminary
and willfiilly reneged [on] his financial and processes available during the pendency injunction, whether prohibitory or
commitments to plaintiff prompting the of the action which may be resorted to by a mandatory, may issue. Under the law, the
stockholders to call his attention and warned litigant to preserve and protect certain rights main action for injunction seeks a judgment
him of avoiding the said agreement; that and interests pending rendition, and for embodying a final injunction which is
defendant who had then complete control of purposes of the ultimate effects, of a final distinct from, and should not be confused
plaintiffs bank account with defendant judgment in the case. They are provisional with, the provisional remedy of preliminary
UCPB, through fraudulent machinations and because they constitute temporary measures injunction, the sole object of which is to
manipulations, was able to maliciously availed of during the pendency of the action, preserve the status quo until the merits can
convince David C. Chua to pre-sign several and they are ancillary because they are mere be heard. A preliminary injunction is granted
checks; that defendant Jakob facilitated incidents in and are dependent upon the at any stage of an action or proceeding prior
several huge loans purportedly obtained by result of the main action."43 One of the to the judgment or final order. It persists
plaintiff which defendant himself could not provisional remedies provided in the Rules until it is dissolved or until the termination
even account and did not even pay the debts of Court is preliminary injunction, which of the action without the court issuing a final
of the corporation but instead abused and may be resorted to by a litigant at any stage injunction.46cralawlawlibrary
maliciously manipulated plaintiffs account. of an action or proceeding prior to the
judgment or final order to compel a party or Based on the foregoing, it is indubitably
clear that the August 17, 2007 Decision of express caveat that the same shall remain in its execution and over all its incidents, and
CA CDO dismissing UniAlloy's Petition force until it has resolved respondents' to control, in furtherance of justice,, the
for Certiorari and Mandamus effectively motions to dismiss, which it subsequently conduct of ministerial officers acting in
superseded the February 18, 2002 granted. Consequently, UniAlloy has no connection with this judgment."48 But said
Resolution of the CA Manila granting more bases to remain in possession of the doctrine is not applicable to this case. Here,
UniAUoy's ancillary prayer for the issuance disputed premises. It must, therefore, the proceeding in CA CDO is a continuation
of a writ of preliminary injunction. It restitute whatever it may have possessed by of the proceeding conducted in CA Manila.
wrote finis not only to the main case but also virtue of the dissolved provisional remedy, There is only one case as what was resolved
to the ancillary relief of preliminary even if the opposing party did not pray for it. by CA CDO is the same case, CA-G.R. SP
injunction issued in the main case. No. 67079 earlier filed with and handled by
The August 17, 2007 Decision neither CA Manila. It was referred to CA CDO
For the same reason, there is no merit in violated this Court's January 28, 2005 pursuant to Republic Act No. 8246 creating
UniAUoy's contention that the RTC Decision in G.R. No. 152238 nor three divisions of the CA each in Cebu and
grievously erred in ordering it to turn over contradicted Cagayan de Qro. Section 5 thereof
the possession of the subject premises to the CA Manila's February 18, 2002 provides:chanRoblesvirtualLawlibrary
UCPB considering that the latter never Resolution.
prayed for it. As borne out by the records of SECTION 5. Upon the effectivity of this
the case, UCPB was already in actual UniAlloy further argues that in denying its Act, all pending cases, except those which
possession of the litigated premises prior to petition, CA CDO contradicted the earlier have been submitted for resolution, shall be
the filing of the Complaint on August 27, Resolution of a coordinate court, the CA referred to the proper division of the Court
2001. This conforms with the finding of the Manila, and the January 28, 2005 Decision of Appeals.cralawlawlibrary
CA CDO which pronounced that "an actual of this Court in G.R. No. 152238. It insists
turnover of the premises x x x was really that no court can interfere with the In fine, CA CDO did not intrude into an
effected on August 24, 2001, prior to the judgment, orders or decrees of another court order issued by another co-equal court in a
institution of the complaint a of concurrent or coordinate jurisdiction. different case. Rather, it continued to hear
quo."  UniAlloy was able to regain
47 the petition until its termination after the CA
possession of the disputed premises only by We are not persuaded. Manila referred the same to it by virtue of a
virtue of the RTC's 72-hour TRO. With the law.
issuance of the RTC's September 13, 2001 True, under the doctrine of judicial stability
Order dismissing the Complaint of or non-interference, "no court can interfere The fact that said February 18, 2002
UniAlloy, however, the RTC's 72-hour TRO by injunction with the judgments or orders Resolution of CA Manila was affirmed by
and August 30, 2001 order to of another court of concurrent jurisdiction this Court in its January 28, 2005 Decision
maintain status quo, which are mere having the power to grant the relief sought in G.R. No. 152238 is likewise of no
incidents of the main action, lost their by injunction. The rationale for the rule is moment. Said Resolution of CA Manila only
efficacy. As discussed above, one of the founded on the concept of jurisdiction: a granted UniAlloy's ancillary prayer for
inevitable consequences of the dismissal of court that acquires jurisdiction over the case injunctive relief. It did not touch on the
the main action is the dissolution of the and renders judgment therein has issues of improper venue, forum-shopping,
ancillary relief granted therein. Besides, the jurisdiction over its judgment, to the and harassment. Thus, neither did this Court
RTC issued the status quo order with the exclusion of all other coordinate courts, for tackle said issues in its January 28, 2005
Decision. In fact, this Court cautiously
limited its discussions on the propriety of the
CA's directive temporarily restraining the
RTC from placing UCPB in possession of
the disputed premises and deliberately
reserved to the CA the determination of
whether the RTC erred in dismissing the
main case.
Thus:chanRoblesvirtualLawlibrary

The dismissal of Civil Case No. 2001-219

on the grounds of forum-shopping, improper
venue and harassment - although raised, too,
by Unialloy in its Petition before the Court
of Appeals - was not passed upon in the
assailed interlocutory CA Resolution. As a
consequence, it would be premature and
improper for us to pass upon the RTC's
dismissal of the case. Hence, we shall limit
our discussion to the assailed Resolutions
temporarily stopping the trial court's
turnover of the litigated property to
petitioner.49ChanRoblesVirtualawlibrary
cralawlawlibrary

WHEREFORE, the instant petition is

hereby DENIED.

SO ORDERED.chanroblesvirtuallawlibrary
 LEAH PALMA, PETITIONER, VS. summons under Section 16, Rule 14 was not
HON. DANILO P. GALVEZ, IN HIS exclusive and may be effected by other
CAPACITY AS PRESIDING JUDGE OF a copy of the amended complaint and its modes of service, i.e., by personal or
THE REGIONAL TRIAL COURT OF annexes, were served upon private substituted service. Private respondent filed
ILOILO CITY, BRANCH 24; AND respondent thru her husband Alfredo Agudo, a Comment[8] on petitioner's Opposition, and
PSYCHE ELENA AGUDO, who received and signed the same as private petitioner filed a Reply[9] thereto.
RESPONDENTS. respondent was out of the country.[3]
On May 7, 2004, the RTC issued its assailed
On March 1, 2004, counsel of private Order granting private respondent's motion
On July 28, 2003, petitioner Leah Palma respondent filed a Notice of Appearance and to dismiss. It found that while the summons
filed with the RTC an action for damages a Motion for Extension of Time to File was served at private respondent's house and
against the Philippine Heart Center (PHC), Answer[4] stating that he was just engaged by received by respondent's husband, such
Dr. Danilo Giron and Dr. Bernadette O. private respondent's husband as she was out service did not qualify as a valid service of
Cruz, alleging that the defendants committed of the country and the Answer was already summons on her as she was out of the
professional fault, negligence and omission due. country at the time the summons was served,
for having removed her right ovary against thus, she was not personally served a
her will, and losing the same and the tissues On March 15, 2004, private respondent's summons; and even granting that she knew
extracted from her during the surgery; and counsel filed a Motion for Another that a complaint was filed against her,
that although the specimens were Extension of Time to File Answer,[5] and nevertheless, the court did not acquire
subsequently found, petitioner was doubtful stating that while the draft answer was jurisdiction over her person as she was not
and uncertain that the same was hers as the already finished, the same would be sent to validly served with summons; that
label therein pertained that of somebody private respondent for her substituted service could not be resorted to
else. clarification/verification before the since it was established that private
Philippine Consulate in Ireland; thus, the respondent was out of the country, thus,
Defendants filed their respective Answers. counsel prayed for another 20 days to file Section 16, Rule 14 provides for the service
Petitioner subsequently filed a Motion for the Answer. of summons on her by publication.
Leave to Admit Amended Complaint,
praying for the inclusion of additional On March 30, 2004, private respondent filed ISSUE:
defendants who were all nurses at the PHC, a Motion to Dismiss[6] on the ground that the
namely, Karla Reyes, Myra Mangaser and RTC had not acquired jurisdiction over her WHETHER OR NOT THE SPECIAL
herein private respondent Agudo. Thus, as she was not properly served with CIVIL ACTION FOR CERTIORARI IS
summons were subsequently issued to them. summons, since she was temporarily out of PROPER.
the country; that service of summons on her
On February 17, 2004, the RTC's process should conform to Section 16, Rule 14 of the RULING:
server submitted his return of summons Rules of Court. Petitioner filed her
stating that the alias summons, together with Opposition[7] to the motion to dismiss, YES
arguing that a substituted service of
summons on private respondent's husband Petitioner claims that the RTC committed a
was valid and binding on her; that service of grave abuse of discretion in ruling that
Section 16, Rule 14, limits the service of verification. Petitioner avers that when consent, confession or compromise on the
summons upon the defendant-resident who private respondent filed her two motions for ground of fraud, mistake or duress, or any
is temporarily out of the country exclusively extension of time to file answer, no special other ground vitiating consent; (f) an order
by means of extraterritorial service, i.e., by appearance was made to challenge the of execution; (g) a judgment or final order
personal service or by publication, pursuant validity of the service of summons on her. for or against one or more of several
to Section 15 of the same Rule. Petitioner parties or in separate claims,
further argues that in filing two motions for The parties subsequently filed their counterclaims, cross-claims and third-
extension of time to file answer, private respective memoranda as required. party complaints, while the main case is
respondent voluntarily submitted to the We shall first resolve the procedural issues pending, unless the court allows an appeal
jurisdiction of the court. raised by private respondent. therefrom; or (h) an order dismissing an
action without prejudice. In all the above
In her Comment, private respondent claims Private respondent's claim that the instances where the judgment or final order
that petitioner's certiorari under Rule 65 is petition for certiorari under Rule 65 is a is not appealable, the aggrieved party may
not the proper remedy but a petition for wrong remedy thus the petition should be file an appropriate special civil action
review under Rule 45, since the RTC ruling dismissed, is not persuasive. A petition for certiorari under Rule 65.
cannot be considered as having been issued for certiorari is proper when any tribunal,
with grave abuse of discretion; that the board or officer exercising judicial or quasi- In this case, the RTC Order granting the
petition was not properly verified because judicial functions has acted without or in motion to dismiss filed by private
while the verification was dated September excess of jurisdiction, or with grave abuse of respondent is a final order because it
15, 2004, the petition was dated September discretion amounting to lack or excess of terminates the proceedings against her, but it
30, 2004. She insists that since she was out jurisdiction and there is no appeal, or any falls within exception (g) of the Rule since
of the country at the time the service of plain, speedy, and adequate remedy at law. the case involves several defendants, and the
summons was made, such service should be [11]
 There is "grave abuse of discretion" when complaint for damages against these
governed by Section 16, in relation to public respondent acts in a capricious or defendants is still pending.[12] 
Section 15, Rule 14 of the Rules of Court; whimsical manner in the exercise of its
that there was no voluntary appearance on judgment as to be equivalent to lack of Since there is no appeal, or any plain,
her part when her counsel filed two motions jurisdiction. speedy, and adequate remedy in law, the
for extension of time to file answer, since remedy of a special civil action
she filed her motion to dismiss on the Section 1, Rule 41 of the 1997 Rules of for certiorari is proper as there is a need to
ground of lack of jurisdiction within the Civil Procedure states that an appeal may be promptly relieve the aggrieved party from
period provided under Section 1, Rule 16 of taken only from a final order that completely the injurious effects of the acts of an inferior
the Rules of Court. disposes of the case; that no appeal may be court or tribunal.[13]
taken from (a) an order denying a motion for
In her Reply, petitioner claims that the draft new trial or reconsideration; (b) an order Anent private respondent's allegation that
of the petition and the verification and denying a petition for relief or any similar the petition was not properly verified, we
certification against forum shopping were motion seeking relief from judgment; (c) an find the same to be devoid of merit. The
sent to her for her signature earlier than the interlocutory order; (d) an order disallowing purpose of requiring a verification is to
date of the finalized petition, since the or dismissing an appeal; (e) an order secure an assurance that the allegations of
petition could not be filed without her signed denying a motion to set aside a judgment by the petition have been made in good faith, or
are true and correct, not merely speculative. Rule 14 of the Rules of Court, which not be less than sixty (60) days after notice,
[14]
 In this instance, petitioner attached a provides: within which the defendant must answer.
verification to her petition although dated The Supreme Court does not agree with the
earlier than the filing of her petition. Sec. 16. Residents temporarily out of the finding of the RTC that since private
Petitioner explains that since a draft of the Philippines. - When an action is commenced respondent was abroad at the time of the
petition and the verification were earlier sent against a defendant who ordinarily resides service of summons, she was a resident who
to her in New York for her signature, the within the Philippines, but who is was temporarily out of the country; thus,
verification was earlier dated than the temporarily out of it, service may, by leave service of summons may be made only by
petition for certiorari filed with us. We of court, be also effected out of the publication.
accept such explanation. While Section 1, Philippines, as under the preceding section.
Rule 65 requires that the petition (Emphasis supplied) In Montefalcon v. Vasquez,[17] we said that
for certiorari be verified, this is not an because Section 16 of Rule 14 uses the
absolute necessity where the material facts The preceding section referred to in the words "may" and "also," it is not mandatory.
alleged are a matter of record and the above provision is Section 15, which speaks Other methods of service of summons
questions raised are mainly of law.[15] In this of extraterritorial service, thus: allowed under the Rules may also be availed
case, the issue raised is purely of law. of by the serving officer on a defendant-
SEC. 15. Extraterritorial service. ─ When resident who is temporarily out of the
Now on the merits, the issue for resolution is the defendant does not reside and is not Philippines. Thus, if a resident defendant is
whether there was a valid service of found in the Philippines, and the action temporarily out of the country, any of the
summons on private respondent. affects the personal status of the plaintiff or following modes of service may be resorted
relates to, or the subject of which is, to: (1) substituted service set forth in section
WHETHER OR NOT THERE WAS A property within the Philippines, in which the 7 ( formerly Section 8), Rule 14; (2)
VALID SERVICE OF SUMMONS ON defendant has or claims a lien or interest, personal service outside the country, with
PRIVATE RESPONDENT PSYCHE actual or contingent, or in which the relief leave of court; (3) service by publication,
ELENA AGUDO demanded consists, wholly or in part, in also with leave of court; or (4) in any other
excluding the defendant from any interest manner the court may deem sufficient.[18]
RULING: therein, or the property of the defendant has
been attached within the Philippines, service In Montalban v. Maximo,[19] we held that
YES may, by leave of court, be effected out of the substituted service of summons under the
Philippines by personal service as under present Section 7, Rule 14 of the Rules of
In civil cases, the trial court acquires section 6; or by publication in a newspaper Court in a suit in personam against residents
jurisdiction over the person of the defendant of general circulation in such places and for of the Philippines temporarily absent
either by the service of summons or by the such time as the court may order, in which therefrom is the normal method of service of
latter's voluntary appearance and submission case a copy of the summons and order of the summons that will confer jurisdiction on the
to the authority of the former. [16] Private court shall be sent by registered mail to the court over such defendant. In the same case,
respondent was a Filipino resident who was last known address of the defendant, or in we expounded on the rationale in providing
temporarily out of the Philippines at the time any other manner the court may deem for substituted service as the normal mode of
of the service of summons; thus, service of sufficient. Any order granting such leave service for residents temporarily out of the
summons on her is governed by Section 16, shall specify a reasonable time, which shall Philippines.
x x x A man temporarily absent from this Considering that private respondent was way give him notice thereof.[23]
country leaves a definite place of residence, temporarily out of the country, the summons
a dwelling where he lives, a local base, so to and complaint may be validly served on her In this case, the Sheriff's Return stated that
speak, to which any inquiry about him may through substituted service under Section 7, private respondent was out of the country;
be directed and where he is bound to return. Rule 14 of the Rules of Court which reads: thus, the service of summons was made at
Where one temporarily absents himself, he her residence with her husband, Alfredo P.
leaves his affairs in the hands of one who SEC. 7. Substituted service. -- If, for Agudo, acknowledging receipt thereof.
may be reasonably expected to act in his justifiable causes, the defendant cannot be Alfredo was presumably of suitable age and
place and stead; to do all that is necessary to served within a reasonable time as provided discretion, who was residing in that place
protect his interests; and to communicate in the preceding section, service may be and, therefore, was competent to receive the
with him from time to time any incident of effected (a) by leaving copies of the summons on private respondent's behalf.
importance that may affect him or his summons at the defendant's residence with
business or his affairs. It is usual for such a some person of suitable age and discretion Notably, private respondent makes no issue
man to leave at his home or with his then residing therein, or (b) by leaving the as to the fact that the place where the
business associates information as to where copies at defendant's office or regular place summons was served was her residence,
he may be contacted in the event a question of business with some competent person in though she was temporarily out of the
that affects him crops up. If he does not do charge thereof. country at that time, and that Alfredo is her
what is expected of him, and a case comes husband. In fact, in the notice of appearance
up in court against him, he cannot just raise We have held that a dwelling, house or and motion for extension of time to file
his voice and say that he is not subject to the residence refers to the place where the answer submitted by private respondent's
processes of our courts. He cannot stop a person named in the summons is living at counsel, he confirmed the Sheriff's Return
suit from being filed against him upon a the time when the service is made, even by stating that private respondent was out of
claim that he cannot be summoned at his though he may be temporarily out of the the country and that his service was engaged
dwelling house or residence or his office or country at the time.[21] It is, thus, the service by respondent's husband. In his motion for
regular place of business. of the summons intended for the defendant another extension of time to file answer,
that must be left with the person of suitable private respondent's counsel stated that a
Not that he cannot be reached within a age and discretion residing in the house of draft of the answer had already been
reasonable time to enable him to contest a the defendant. Compliance with the rules prepared, which would be submitted to
suit against him. There are now advanced regarding the service of summons is as private respondent, who was in Ireland for
facilities of communication. Long distance important as the issue of due process as that her clarification and/or verification before
telephone calls and cablegrams make it easy of jurisdiction.[22] the Philippine Consulate there. These
for one he left behind to communicate with statements establish the fact that private
him.[20] Section 7 also designates the persons with respondent had knowledge of the case filed
whom copies of the process may be left. The against her, and that her husband had told
rule presupposes that such a relation of her about the case as Alfredo even engaged
confidence exists between the person with the services of her counsel.
whom the copy is left and the defendant and,
therefore, assumes that such person will In addition, we agree with petitioner that the
deliver the process to defendant or in some RTC had indeed acquired jurisdiction over
the person of private respondent when the
latter's counsel entered his appearance on SO ORDERED.
private respondent's behalf, without
qualification and without questioning the
propriety of the service of summons, and
even filed two Motions for Extension of
Time to File Answer. In effect, private
respondent, through counsel, had already
invoked the RTC's jurisdiction over her
person by praying that the motions for
extension of time to file answer be granted.
We have held that the filing of motions
seeking affirmative relief, such as, to admit
answer, for additional time to file answer,
for reconsideration of a default judgment,
and to lift order of default with motion for
reconsideration, are considered voluntary
submission to the jurisdiction of the court.
[24]
 When private respondent earlier invoked
the jurisdiction of the RTC to secure
affirmative relief in her motions for
additional time to file answer, she
voluntarily submitted to the jurisdiction of
the RTC and is thereby estopped from
asserting otherwise.[25]

Considering the foregoing, we find that the

RTC committed a grave abuse of discretion
amounting to excess of jurisdiction in
issuing its assailed Orders.

WHEREFORE, the petition is GRANTED.

The Orders dated May 7, 2004 and July 21,
2004 of the Regional Trial Court of Iloilo
City, Branch 24, are hereby SET ASIDE.
Private respondent is DIRECTED to file
her Answer within the reglementary period
from receipt of this decision.
 THE CONSOLIDATED BANK AND Faced with UNAM's default, Solidbank tried Solidbank filed a Manifestation15 dated June
TRUST to collect payment from the account debtors 2, 1987 informing the Trial Court that it had
CORPORATION, Petitioner, v. THE stated in the List of Assigned Receivables. earlier filed a claim worth Eight Million
COURT OF APPEALS, UNITED Upon learning that UNAM had already Twenty-Four Thousand Pesos and Twenty-
PACIFIC LEASING AND FINANCE collected on some of the credits assigned, Seven Centavos (P8,024,000.27) before the
CORPORATION, Respondents. Solidbank sent letters to UNAM demanding Office of the Pacific Bank Liquidator
for the turnover of the collected amounts. ("Liquidator").16 This claim represents the
In 1982, Solidbank extended loans to eight (8) receivables assigned by UNAM to
UNAM evidenced by the following Unsuccessful, Solidbank, on January 21, Solidbank under the List of Assigned
promissory notes:4 1987, filed a Complaint for Sum of Money Receivables and which appear to be due
(with Prayer for Issuance of Writ of from Pacific Bank.17 According to
As security for the loans, UNAM executed Preliminary Attachment)11 against UNAM, Solidbank, it filed the claim based on the
Deeds of Assignment5 in Solidbank's favor. its executive vice-president Antonio Andal July 29, 1986 Order of the Liquidation Court
It also furnished Solidbank with a "Certified ("Andal") and his wife. Solidbank claimed mandating the filing of claims even for
List of Assigned Receivables."6 payment for the amount of Sixteen Million credits under litigation.18
Three Hundred Eighty-One Thousand Eight
In 1985, UNAM's majority shareholder - Hundred Eighty-Nine Pesos and Fifty-Three On June 30, 1987, UNAM filed its Answer
Pacific Banking Corporation ("Pacific Centavos (P16,381,889.53) as UNAM's with Special and Affirmative
Bank") - was forbidden to do business7 and outstanding principal loan obligation.12 Its Defenses,  which it later amended on June
19

later placed under liquidation pursuant to Complaint was docketed as Civil Case No. 21, 1991.20 UNAM stated that the
Monetary Board Resolution No. 1233 dated 87-39114 and raffled to Branch 46 of the Liquidation Court adjudged, per Decision
November 22, 1985.8 Liquidation Regional Trial Court of Manila ("Trial dated July 12, 1989, Twenty-Four Million
proceedings, docketed as Special Proceeding Court"). One Hundred Fifty-Eight Thousand Two
(SP) No. 86-35313, were thereafter Hundred Sixty-Three Pesos and Ten
commenced before Branch 31 of the On February 17, 1987, Solidbank amended Centavos (P24,158,263.10) in Solidbank's
Regional Trial Court of Manila its Complaint to include as defendants the favor ("loan award").21 In addition, and per
("Liquidation Court").9 These, in turn, members of UNAM's Board of Directors Order dated June 25, 1990,22 the Liquidation
resulted to UNAM's inability to properly and their spouses.13 The following were Court also awarded Solidbank an additional
comply with its loan obligations.10 impleaded: Antonio Roxas Chua Jr. Seventeen Million Six Hundred Twenty
("Chua"), Luis Tirso Rivilla, Jose F. Unson Thousand Six Hundred Fifty-Nine Pesos and
("Unson"), Oscar T. Africa, Ricardo R. Sixty Centavos (P17,620,659.60)
Zarate and Albert W. Ambs. Nevertheless, representing unpaid rentals for, and value of,
in the Pre-Trial Order dated May 4, 1992, computer machines allegedly leased by
only Andal, Unson and Chua remained as Solidbank to Pacific Bank for the period of
individual defendants.14 November 1988 to June 1990 ("lease
award").23

UNAM claims that Solidbank, by virtue of

an agreement submitted to (and thereafter The Ruling of the Trial Court interest was computed at 24% per annum as
approved by) the Liquidation Court without per provision in the ... notes. But
UNAM's knowledge and consent, In a Decision dated February 6, 1995, the SOLIDBANK, taking advantage of the
compromised the loan award of Twenty- Trial Court ruled in favor of provision... that allows increase or decrease
Four Million One Hundred Fifty-Eight UNAM.28 Finding that Solidbank had no of interest xxx has repeatedly used a higher
Thousand Two Hundred Sixty-Three Pesos authority to enter into the Compromise interest rate than 24%... If the Court will use
and Ten Centavos (P24,158,263.10) to the Agreement, the Trial Court deemed SOLIDBANK's procedure in computing
much lower amount of Ten Million Seven Solidbank to have received the entire sum of interest, the total liability of UNAM as of
Hundred Twenty-Two Thousand Seven the initial loan award and deducted the same October 4, 1989 will be in the vicinity of
Hundred Four Pesos and Eighty-Three from its computation of the total amount P10,722,704.83.
Centavos (P10,722,704.83).24 owing to Solidbank:
xxx
On January 12, 1989, the Liquidator made a Considering that the Compromise
partial payment of One Million Two Agreement was entered into without ... this Court rules that the correct total
Hundred Six Thousand Four Hundred UNAM's knowledge and consent, for amount owing to SOLIDBANK as of Oct.
Ninety-Five Pesos and Seventeen Centavos purposes of this case, SOLIDBANK will be 4, 1989 is P9,051,694.85. Thus, when the
(P1,206,495.17), consequently reducing the deemed to have received the entire sum of P24,158,263.10 was deemed paid as of
outstanding loan balance to Nine Million P24,158,263.10. October 4, 1989, the total obligation of
Five Hundred Sixteen Thousand Two UNAM to the tune of P9,051,694.85 as of
Hundred Nine Pesos and Sixty-Six Centavos As of August 2, 1985, the total outstanding October 4, 1989 was deemed FULLY
(P9,516,209.66).25 Thereafter, on October 4, balance of UNAM's loans from PAID and the obligation was
1989, two (2) Philippine National Bank SOLIDBANK was P3,620,677.94. extinguished.29
(PNB) checks representing the remaining
balance were delivered to Solidbank.26 Computing interest thereon from August 2, (Emphasis supplied)
1985 to October 4, 1989 at the rate of 24%
In view of the foregoing, UNAM pleaded per annum will come up to P3,620,677.94 Considering its ruling that the compromise
that (1) all amounts awarded to Solidbank by for fifty (50) months. Penalty at the rate of judgment had fully extinguished UNAM's
the Liquidation Court be credited by the 12% per annum, as per provision... will be loan obligation, the Trial Court also ordered
Trial Court to UNAM's outstanding loan P1,810,338.97. The total interests and Solidbank to return to UNAM the amount it
obligation; and, by way of counterclaim, (2) penalties due from August 2, 1985 to received as lease award, thus:
it be awarded the difference between the October 4, 1989 (50 months) is [sic] in the
loan award of Twenty-Four Million One amount of P5,431,016.91. Thus, as of UNAM also proved that in 1990
Hundred Fifty-Eight Thousand Two October 4, 1989, balance of principal plus SOLIDBANK claimed in the Liquidation
Hundred Sixty-Three Pesos and Ten interests and penalties due SOLIDBANK Court additional sums from UNAM and thru
Centavos (P24,158,263.10) and the from UNAM is in the total sum of its motion, succeeded in amending a writ of
compromised amount of Ten Million Seven P9,051,694.85. execution... thru an Order dated June 25,
Hundred Twenty-Two Thousand Seven 1990...
Hundred Four Pesos and Eighty-Three It must be noted that this sum of
Centavos (PI0,722,704.83).27 P9,051,694.85 was arrived at because the The total sum of the figures cited is
P17,620,659.60 plus three per cent (3%) Court's decision.31 In an Order dated August
monthly penalty for delayed payment. 9, 1995,32 the Trial Court, this time through Both Solidbank and UNAM appealed to the
Pairing Judge Lorenzo B. Veneracion, Court of Appeals ("CA").
How SOLIDBANK can find a new cause for reversed itself, ruling:
this further collection after full payment of The Ruling of the Court of Appeals
UNAM's obligation is beyond the Court's A review and analysis of the findings upon
comprehension. Not even in the name of which the awards in favor of the defendants In a Decision dated December 22,
error could this claim of SOLIDBANK be and against the plaintiff bank show that said 2004,34 the CA reversed and set aside the
explained. awards were clearly arrived at principally August 9, 1995 Order of the Trial Court, to
from the records of the Liquidation Court of wit:
This award of PI7,620,659.60 must be Pacific Bank, Branch 31 of this Court, Sp.
credited for UNAM, because Proc. No. 86-35313... WHEREFORE, premises considered, the
SOLIDBANK went to the Liquidation Order dated August 9, 1995 is
Court in its sole personality as UNAM's xxx hereby REVERSED and SET ASIDE.
Assignee of receivables and no other.
With respect to the claim of the plaintiff in The Decision dated February 6, 1995 is
xxx the amounts prayed for in the complaint, the hereby REINSTATED and MODIFIED to
Court believes that this Court does not the effect that Solidbank is ordered to
xxx For SOLIDBANK to claim in the possess the competence to rule on the said return to UNAM the sum of Twelve
Liquidation Court that it was the owner claims, the same properly falling within Million Seven Hundred Fifty-Four
of the computers subject matter of the the jurisdiction of the Liquidation Court Thousand Four Hundred Forty-Eight
assigned Leasesm [sic] is to defy the and we strongly feel that we cannot Pesos and Forty-Four Centavos
provisions of the Deeds of Assignment. substitute our judgment for that of the (P12,754,448.44), plus six percent (6%)
liquidation court. Moreover, the records per annum from the date of the trial
Hence, SOLIDBANK cannot escape the are in the possession of the said court's decision. After finality of this
liability to return to UNAM this sum of liquidation court and the latter Court can Decision, Solidbank is ordered to pay
P17,620,659.60 including the interests it properly rule on the evidence adduced interest at the rate of twelve percent (12%)
collected thereon. Not to require before it. per annum until full payment of the awarded
SOLIDBANK to return this sum to UNAM amount shall have been made.
is to allow SOLIDBANK to be unjustly (Emphasis
enriched by it. xxx30 supplied)ChanRoblesVirtualawlibrary The awards in favor of defendants Jose F.
Unson and Antonio M. Andal are
(Emphasis Thus, the complaint and respective hereby DELETED.
supplied)ChanRoblesVirtualawlibrary counterclaims were dismissed "without
prejudice to said parties litigating their SO ORDERED.35
respective claims before the Liquidation
Court in Special Proceeding No. 86-35313... (Emphasis
On February 27, 1995, Solidbank filed a which has jurisdiction over the subject supplied)ChanRoblesVirtualawlibrary
motion seeking reconsideration of the Trial matter in the complaint..."33
 whether or not the CA erred in applying UNAM's allegations in its Manifestation and
On January 19, 2005, Solidbank filed a the lease award to UNAM's outstanding Omnibus Motion dated March 9, 1991 that
Motion for Partial Reconsideration of the loan obligation. Solidbank was merely an assignee of
CA's Decision.36 Solidbank took issue with UNAM on all receivables from Pacific Bank
the deduction by the CA of the lease award Our Ruling and thus cannot claim the value of the leased
from UNAM's outstanding loan obligation. computers.43
Solidbank also disputed the CA's effective YES.
affirmance of the Trial Court's jurisdiction The Liquidation Court further noted that the
over UNAM's counterclaim, which The propriety or correctness of the orders of Liquidator opposed UNAM's motion to
Solidbank maintains, falls "exclusively the Liquidation Court in SP No. 86-35313 receive the amount corresponding to the
within the domain of the Liquidation Court is not at issue in this case. What is at issue is lease award on the following grounds:
to resolve in SPNo. 86-35313."37 the propriety of the application by the CA of
the lease award as payment to UNAM's a) xxx
The CA denied Solidbank's motion in a outstanding loan obligations. To resolve this
Resolution dated August 30, 2005.38 issue, we need to trace the circumstances of b) [Pacific Bank] leased the computers
the Liquidation Court's lease award.40 from the Solidbank and UNAM had not
Hence, this Petition for Review.39 [sic] transaction whatsoever with the
Background of grant of lease award Solidbank Corporation regarding the said
The Issue computers;
On June 25, 1990, the Liquidation Court
The petition shows that Solidbank did not issued a writ of execution directing the c) xxx
question the CA's re-computation of Pacific Bank Liquidator "to return and
UNAM's outstanding loan obligation. Save deliver the leased computer machines in d) When [Pacific Bank] was placed under
for the deduction of the amount of the lease working/operating condition" to Solidbank liquidation, all creditors were required to
award, neither did Solidbank take issue with and/or "pay the corresponding value thereof file their claims on or before June 3, 1987
the CA's application to UNAM's loan as stipulated in the contract of lease between and UNAM filed its claims for payment of
obligations of the other amounts it received the parties..." as well as the sum the computers only in March, 1991 and
as a result of the liquidation proceedings. "representing rentals due on the same from therefore the same is barred already by
November, 1988 to June, 1990" with prescription and laches.44
Our resolution of the case is thus limited to penalties.41
the issue of (Emphasis supplied)
It appears that this order was subject of an
Amended Notice of Appeal dated July 27, The Liquidation Court found that UNAM's
1990 and a Record on Appeal filed by the Manifestation and Omnibus Motion were
Liquidator. Both were denied by the "actually motions to intervene as claimant
Liquidation Court on October 28, 1991.42 against both the Solid Bank and the
Liquidator... which cannot be accepted
In the course of denying the Liquidator's without paying the corresponding filing
appeal, the Liquidation Court noted docket fees..."45 It held that UNAM should
"instead file a corresponding Motion to SOLIDBANK to return this sum to UNAM reduced to P8,541,871.78 as of October 25,
Intervene with a Complaint-in-Intervention, is to allow SOLIDBANK to be unjustly 1985, which balance earned monthly interest
under the provisions of Rule 12 of the Rules enriched by it. xxx at the stipulated rate of 22.5 percent per
of Court."46 This remedy is granted on grounds of annum or 1.875 percent per month.55The
equity...47 (Emphasis supplied) CA, thereafter, applied all the amounts
It does not appear that the parties took received by Solidbank from the
further action on either the June 25, 1990 or The Trial Court later on reconsidered and Liquidation Court namely, the
the October 28, 1991 orders of the ordered the dismissal of the complaint and compromised award of P10,722,704.83
Liquidation Court. the corresponding counterclaims.48  In its and the lease award of P17,620,659.60, to
challenged decision, however, the CA UNAM's total remaining loan obligation,
Action of the Trial Court on the reinstated the Trial Court's initial ruling. as follows:56
Orders of the Liquidation Court
Finding that Solidbank's action is one
In initially ordering Solidbank to return the "essentially seeking the payment of loans," The CA's foregoing re-computation of
amount it received as lease award, the Trial the amount of which exceeded "the UNAM's obligation and application of the
Court held: minimum jurisdictional amount provided amounts received by Solidbank resulted to
under Batas Pambansa Big. 129,"49 the CA "an excess payment in favor of Solidbank in
This award of P17,620,659.60 to held that the Trial Court clearly had the amount of P12,754,448.44," which the
SOLIDBANK must be credited for UNAM, jurisdiction over the subject matter of CA ordered Solidbank to return to UNAM.60
because SOLIDBANK went to the Solidbank's claim.50 It also ruled that while
Liquidation Court in its sole personality as Solidbank had no authority51 to enter into The SC agrees with Solidbank’s argument
UNAM's Assignee of receivables and no any compromise agreement over the that the CA erred in applying the amount
other. assigned receivables, UNAM's failure to awarded to Solidbank for the leased
assail the validity of the Compromise computers to UNAM's loan obligation, on
xxx But with this specific provision that the Agreement operated as a ratification of this the following grounds: (1) that there is no
assignment will not effect a dacion en Agreement. Thus, the CA considered "as evidence that Solidbank had actually
pago, it means that the ownership over the payment collected by Solidbank" only the received said amount,61 and (2) that even
receivables and other securities will remain compromise amount of P10,722,704.83, assuming (for the sake of argument) that the
with the Assignor UNAM. For (and not P24,158,263.10), for purposes of lease award was actually received by
SOLIDBANK to claim in the Liquidation applying the same as payment of UNAM's Solidbank, the same should not have been
Court that it was the owner of the loan obligation.52 deducted from UNAM's loan obligation as it
computers, subject matter of the assigned is "not per se a form of payment of the
Leasesm [sic] is to defy the provisions of the In addition, the CA found that as of January indebtedness evidenced by the various
Deeds of Assignment. 18, 1985, UNAM's total loan indebtedness promissory notes" assigned to Solidbank. 62 
to Solidbank (exclusive of interest) is It also asserts that UNAM's claim of alleged
Hence, SOLIDBANK cannot escape the equivalent to P13,666,666.63.53 Since overpayment should have been made before
liability to return to UNAM this sum of UNAM made partial payments to Solidbank the Liquidation Court.63
PI7,620,659.60 including the interests it from March 1, 1985 to August 2, 1985 of
collected thereon. Not to require P5,124,822.06,54 the principal balance was UNAM counters that Solidbank cannot
question the correctness of the CA's decision A liquidation proceeding, on the other hand, banking institution from doing business in
because "there was no evidence that it had is a special proceeding involving the the Philippines and designate a Receiver for
actually collected on the awards given by the administration and disposition, with judicial the institution. Such grounds include:
Liquidation Court."64 According to UNAM, intervention, of an insolvent's assets for the
Solidbank never raised the issue on appeal benefit of its creditors.68 Under the Central (1) Inability to pay its liabilities as they
with the CA. It did so for the first time in its Bank Act, this proceeding is cognizable by become due in the ordinary course of
motion for reconsideration of the CA's the Regional Trial Courts.69 business: Provided, That this shall not
decision.65 UNAM also claims to be the include inability to pay caused by
owner of the leased computers.66 Pursuant to Central Bank of the Philippines extraordinary demands induced by financial
Memorandum dated July 6, 1985, Pacific panic in the banking community; or
We rule in favor of Solidbank and resolve Bank was forbidden to do business. It was
to grant the Petition. subsequently placed under liquidation by (2) Has sufficient realizable assets, as
virtue of Monetary Board Resolution No. determined by the Bangko Sentral, to meet
This case concerns actions of two courts 1233 dated November 22, 1985. The its liabilities; or
over two different types of actions: one is a liquidation proceedings (involving Pacific
liquidation proceeding involving Pacific Bank's assets) were conducted by the (3) Cannot continue in business without
Bank (a shareholder of UNAM) and the Liquidation Court in SP No. 86-35313.70 involving probable losses to its depositors or
other, an action for collection of sum of creditors; or
money filed by Solidbank against UNAM. While both cases were properly cognizable
by the Regional Trial Courts, the Trial Court (4) Willful violation of a cease and desist
An action for collection or recovery of sum in this case had no jurisdiction to make a order that has become final, involving acts
of money falls under the general ruling on the amount awarded by the or transactions which amount to fraud or a
classification of actions capable of pecuniary Liquidation Court in Solidbank's favor. dissipation of the assets of the
estimation. Depending on the amount of institution...73ChanRoblesVirtualawlibrary
money in issue, such action may be filed Nature of a liquidation proceeding
with either the Municipal Trial Courts or the In Hernandez v. Rural Bank of Lucena
Regional Trial Courts.67 Since the collection Due to the nature of their transactions and Inc.,74  we held:
suit filed by Solidbank against functions, the banking industry is affected
UNAM involved millions of pesos, Civil with public interest and banks can properly Under section 29 of the Central Bank Act,
Case No. 87-39114 was filed with the be subject to reasonable regulation under the Republic Act No. 265, when the Monetary
Regional Trial Court (Branch 46 of the police power of the State.71  It is the Board, upon information submitted by the
Regional Trial Court of Manila). Government's responsibility to see to it that Superintendent of Banks, finds a bank to be
the financial interests of those who deal with insolvent, it shall forbid the bank to do
banks and banking institutions are business and it shall take care of its assets
protected.72 according to law.

Hence, the Monetary Board, under certain In that case, if the Monetary Board finds out
circumstances, is empowered to (summarily that the insolvent bank cannot resume
and without need for prior hearing) forbid a business with safety to its creditors, it shall
through the Solicitor General, file a petition The judicial liquidation is a pragmatic disturbed, much less overturned, by the Trial
in the Court of First Instance, praying for the arrangement designed to establish due Court.
assistance and supervision of the court in the process and orderliness in the liquidation
liquidation of the bank's affairs. Thereafter, of the bank, to obviate the proliferation of More, the action before the Trial Court is a
the Superintendent of Banks, upon order of litigations and to avoid injustice and collection suit filed against UNAM. The
the Monetary Board and under the arbitrariness.75 proceeding before the Liquidation Court, on
supervision of the court, shall convert to the other hand, involves claims against
money the bank's assets, xxx (Emphasis and underscoring Pacific Bank. These are different
supplied.)ChanRoblesVirtualawlibrary proceedings, albeit involving two related yet
The fact that the insolvent bank is forbidden distinct entities. While Pacific Bank may be
to do business, that its assets are turned over Notwithstanding this "pragmatic a major shareholder of UNAM, it still
to the Superintendent of Banks, as a arrangement," claims may, under certain retains a juridical personality separate and
receiver, for conversion into cash, and that circumstances, be litigated before distinct from its affiliate corporation. Any
its liquidation is undertaken with judicial courts other than the liquidation claim or suit against the latter does not bind
intervention means that, as far as lawful and court,76 This, however, does not mean that the former and vice-versa.80 Thus, in the
practicable, all claims against the insolvent the other courts can interfere with the same way that UNAM cannot be made to
bank should be filed in the liquidation liquidation proceedings. Adjudicated claims pay for debts directly incurred by Pacific
proceeding. must still be submitted to the liquidators for Bank, an award issued as a consequence of a
processing.77 successful claim against Pacific
The judicial liquidation is intended to Bank cannot be applied as payment for a
prevent multiplicity of actions against the When Solidbank's collection suit against claim against UNAM.
insolvent bank. The lawmaking body UNAM was filed on February 17, 1987, SP
contemplated that for convenience only No. 86-35313 was already on-going. In fact, Award of the Liquidation Court had long
one court, if possible, should pass upon when notice of said proceedings was attained finality and can no longer be
the claims against the insolvent bank and published, Solidbank filed a Manifestation modified
that the liquidation court should assist the before the Trial Court declaring that it had
Superintendent of Banks and control his also submitted claims with the Liquidation An order of a liquidation court allowing or
operations. Court.78 UNAM appears to have filed, by disallowing a claim is a final order, which
way of Manifestation and Omnibus Motion, may be the subject of an appeal. The
In the course of the liquidation, contentious certain claims in the liquidation proceedings issuance of such an order, by its nature,
cases might arise wherein a full-dress as well.79 affects only the particular claim involved,
hearing would be required and legal issues thereby creating a situation where multiple
would have to be resolved. Hence, it would Accordingly, the Liquidation Court in SP appeals are allowed. Consequently, a record
be necessary in justice to all concerned No. 86-35313 had special jurisdiction to on appeal is necessary in each and every
that a Court of First Instance should receive and adjudicate all claims against appeal made thereon.81
assist and supervise the liquidation and Pacific Bank, including the claim for the
should act as umpire and arbitrator in the unpaid rentals for, and value of, computers Here, although the June 25, 1990 Order of
allowance and disallowance of claims. allegedly leased by Solidbank to Pacific the Liquidation Court granting the lease
Bank. Its findings relative thereto cannot be award to Solidbank was initially subject of
several Notices of Appeal and a Record on to resolve the issue of whether or not
Appeal filed by the Liquidator, these were SO ORDERED. 83
Solidbank actually received the lease award.
denied due course by the Liquidation Court
on October 28, 1991.82 It does not appear (Emphasis and underscoring Setting aside the Court of Appeals'
that UNAM took any action relative thereto. supplied.)ChanRoblesVirtualawlibrary erroneous application of the lease award of
P17,620,659.60, UNAM would still have an
We note further the following directive of Rather than file a Complaint-in-intervention outstanding loan balance amounting to Four
the Liquidation Court, in its Order of as directed, UNAM appeared to have chosen Million Eight Hundred Sixty-Six Thousand
October 28, 1991: to pursue its claims against Pacific Bank for Two Hundred Eleven Pesos and Sixteen
the leased computers in its collection suit Centavos (P4,866,211.16), computed as
WHEREFORE, judgment is rendered, as against Solidbank. This, as already follows:
follows: explained earlier, it cannot do.

a) xxx UNAM's refusal or failure to properly seek WHEREFORE, premises considered, the
relief from the order (whether by way of Petition is GRANTED. The December 22,
b) UNAM's Manifestation dated January 8, filing a record on appeal, a complaint-in- 2004 Decision and August 30,
1991 and Omnibus Motion dated March 9, intervention or a petition for review or 2005 Resolution of the Court of Appeals in
1991 were actually motions to intervene as annulment of the order), to our minds, CA G.R. CV 50550 are
claimant against both the Solid Bank and suggests that the Liquidation Court's order hereby AFFIRMED with MODIFICATIO
the Liquidator of [Pacific Bank] which had become final, long before the February N. UNAM is ORDERED to pay
cannot be accepted without paying the 6, 1995 Decision, the August 9, 1995 Order Solidbank the amount of Four Million
corresponding filing docket fees under of the Trial Court, and the December 22, Eight Hundred Sixty-Six Thousand Two
Administrative Circular No. 7 2004 Decision of the Court of Appeals. Hundred Eleven Pesos and Sixteen
xxx;cralawlawlibrary Centavos (P4,866,211.16) to earn interest at
A decision that has acquired finality the rate of six percent (6%) per annum from
c) UNAM should instead file a becomes immutable and unalterable, and February 6, 199587 until the finality of this
corresponding Motion to Intervene with a may no longer be modified in any respect, Decision. Thereafter, the total amount due
Complaint-in- Intervention, under the even if the modification is meant to correct shall earn legal interest at the rate of six
provisions of Rule 12 of the Rules of erroneous conclusions of fact and law, and percent (6%) per annum until fully paid. No
Court; whether it be made by the court that pronouncement as to costs.
rendered it or by the Highest Court of the
d) There being a controversy between land.84 SO ORDERED.
claimant Solidbank and UNAM xxx the
same is hereby held in escrow by the present Hence, the CA erred when it effectively
depository xxx to bear interest, until further reversed the Liquidation Court's award to
Orders of this Court pending the resolution Solidbank by adjudging the same in
of UNAM's claims as Assignor of UNAM's favor and thereafter proceeded to
Solidbank, as will be litigated in his apply the amount to the latter's loan
projected complaint-in-intervention. obligation. With this ruling, we do not need