PART TWO: JURISDICTION procedural grounds—for lack of statement of material dates and for insufficient verification and certification

against forum shopping. An Entry of Judgment was later issued by the appellate court on September 20, 2000.
Subject matter jurisdiction
Aggrieved by this development, petitioners filed with the CA, on September 19, 2000, still within
Allegations of complaint determine jurisdiction the reglementary period, a second Petition for Certiorari under Rule 65 already stating therein the material
dates and attaching thereto the proper verification and certification. This second petition, which substantially
G.R. No. 149177               November 23, 2007 raised the same issues as those in the first, was docketed as CA-G.R. SP No. 60827.
KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD., Petitioners vs. Ruling on the merits of the second petition, the appellate court rendered the assailed April 18, 2001
MINORU KITAMURA, Respondent. Decision22 finding no grave abuse of discretion in the trial court's denial of the motion to dismiss. The CA
ruled, among others, that the principle of lex loci celebrationis was not applicable to the case, because nowhere
NACHURA, J.: in the pleadings was the validity of the written agreement put in issue. The CA thus declared that the trial court
was correct in applying instead the principle of lex loci solutionis.
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing
the April 18, 2001 Decision of the Court of Appeals (CA) in CA-G.R. SP No. 60827, and the July 25, 2001 Petitioners' motion for reconsideration was subsequently denied by the CA in the assailed July 25, 2001
Resolution2 denying the motion for reconsideration thereof. Resolution.
On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese Remaining steadfast in their stance despite the series of denials, petitioners instituted the instant Petition for
consultancy firm providing technical and management support in the infrastructure projects of foreign Review on Certiorari imputing the following errors to the appellate court:
governments, entered into an Independent Contractor Agreement (ICA) with respondent Minoru Kitamura, a
Japanese national permanently residing in the Philippines. The agreement provides that respondent was to A. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE
extend professional services to Nippon for a year starting on April 1, 1999. Nippon then assigned respondent TRIAL COURT VALIDLY EXERCISED JURISDICTION OVER THE INSTANT
to work as the project manager of the Southern Tagalog Access Road (STAR) Project in the Philippines, CONTROVERSY, DESPITE THE FACT THAT THE CONTRACT SUBJECT MATTER OF THE
following the company's consultancy contract with the Philippine Government. PROCEEDINGS A QUO WAS ENTERED INTO BY AND BETWEEN TWO JAPANESE
NATIONALS, WRITTEN WHOLLY IN THE JAPANESE LANGUAGE AND EXECUTED IN
When the STAR Project was near completion, the Department of Public Works and Highways TOKYO, JAPAN.
(DPWH) engaged the consultancy services of Nippon, on January 28, 2000, this time for the detailed
engineering and construction supervision of the Bongabon-Baler Road Improvement (BBRI) Project. B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN OVERLOOKING THE
Respondent was named as the project manager in the contract's Appendix 3.1. NEED TO REVIEW OUR ADHERENCE TO THE PRINCIPLE OF LEX LOCI SOLUTIONIS IN
THE LIGHT OF RECENT DEVELOPMENT[S] IN PRIVATE INTERNATIONAL LAWS.
On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager for its
International Division, informed respondent that the company had no more intention of automatically The pivotal question that this Court is called upon to resolve is whether the subject matter
renewing his ICA. His services would be engaged by the company only up to the substantial completion of the jurisdiction of Philippine courts in civil cases for specific performance and damages involving contracts
STAR Project on March 31, 2000, just in time for the ICA's expiry. executed outside the country by foreign nationals may be assailed on the principles of lex loci
celebrationis, lex contractus, the "state of the most significant relationship rule," or forum non conveniens.
Threatened with impending unemployment, respondent, through his lawyer, requested a negotiation
conference and demanded that he be assigned to the BBRI project. Nippon insisted that respondent’s contract However, before ruling on this issue, we must first dispose of the procedural matters raised by the
was for a fixed term that had already expired, and refused to negotiate for the renewal of the ICA. respondent.
As he was not able to generate a positive response from the petitioners, respondent consequently Kitamura contends that the finality of the appellate court's decision in CA-G.R. SP No. 60205 has
initiated on June 1, 2000 Civil Case No. 00-0264 for specific performance and damages with the Regional already barred the filing of the second petition docketed as CA-G.R. SP No. 60827 (fundamentally raising the
Trial Court of Lipa City. same issues as those in the first one) and the instant petition for review thereof.
For their part, petitioners, contending that the ICA had been perfected in Japan and executed by and We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of the petition's
between Japanese nationals, moved to dismiss the complaint for lack of jurisdiction. They asserted that the defective certification of non-forum shopping, it was a dismissal without prejudice. The same holds true in the
claim for improper pre-termination of respondent's ICA could only be heard and ventilated in the proper courts CA's dismissal of the said case due to defects in the formal requirement of verificationand in the other
of Japan following the principles of lex loci celebrationis and lex contractus. requirement in Rule 46 of the Rules of Court on the statement of the material dates. The dismissal being
without prejudice, petitioners can re-file the petition, or file a second petition attaching thereto the appropriate
In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the replacement of Kitamura by verification and certification—as they, in fact did—and stating therein the material dates, within the prescribed
a certain Y. Kotake as project manager of the BBRI Project. period in Section 4, Rule 65 of the said Rules.
On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank  that matters The dismissal of a case without prejudice signifies the absence of a decision on the merits and
connected with the performance of contracts are regulated by the law prevailing at the place of performance, leaves the parties free to litigate the matter in a subsequent action as though the dismissed action had not been
denied the motion to dismiss.16 The trial court subsequently denied petitioners' motion for reconsideration, commenced. In other words, the termination of a case not on the merits does not bar another action involving
prompting them to file with the appellate court, on August 14, 2000, their first Petition for Certiorari under the same parties, on the same subject matter and theory.
Rule 65 [docketed as CA-G.R. SP No. 60205]. On August 23, 2000, the CA resolved to dismiss the petition on
 Necessarily, because the said dismissal is without prejudice and has no res judicata effect, and even and introduced their new argument that the applicable principle is the [state of the] most significant
if petitioners still indicated in the verification and certification of the second certiorari petition that the first relationship rule.
had already been dismissed on procedural grounds, petitioners are no longer required by the Rules to indicate
in their certification of non-forum shopping in the instant petition for review of the second certiorari petition, Be that as it may, this Court is not inclined to deny this petition merely on the basis of the change in
the status of the aforesaid first petition before the CA. In any case, an omission in the certificate of non-forum theory, as explained in Philippine Ports Authority v. City of Iloilo. We only pointed out petitioners'
shopping about any event that will not constitute res judicata and litis pendentia, as in the present case, is not a inconstancy in their arguments to emphasize their incorrect assertion of conflict of laws principles.
fatal defect. It will not warrant the dismissal and nullification of the entire proceedings, considering that the
evils sought to be prevented by the said certificate are no longer present. To elucidate, in the judicial resolution of conflicts problems, three consecutive phases are involved:
jurisdiction, choice of law, and recognition and enforcement of judgments. Corresponding to these phases are
The Court also finds no merit in respondent's contention that petitioner Hasegawa is only authorized the following questions: (1) Where can or should litigation be initiated? (2) Which law will the court apply?
to verify and certify, on behalf of Nippon, the certiorari petition filed with the CA and not the instant petition. and (3) Where can the resulting judgment be enforced?
True, the Authorization dated September 4, 2000, which is attached to the second certiorari petition and which
is also attached to the instant petition for review, is limited in scope—its wordings indicate that Hasegawa is Analytically, jurisdiction and choice of law are two distinct concepts Jurisdiction considers whether
given the authority to sign for and act on behalf of the company only in the petition filed with the appellate it is fair to cause a defendant to travel to this state; choice of law asks the further question whether the
court, and that authority cannot extend to the instant petition for review. In a plethora of cases, however, this application of a substantive law which will determine the merits of the case is fair to both parties. The power to
Court has liberally applied the Rules or even suspended its application whenever a satisfactory explanation and exercise jurisdiction does not automatically give a state constitutional authority to apply forum law. While
a subsequent fulfillment of the requirements have been made. Given that petitioners herein sufficiently jurisdiction and the choice of the lex fori will often coincide, the "minimum contacts" for one do not always
explained their misgivings on this point and appended to their Reply an updated Authorization for Hasegawa provide the necessary "significant contacts" for the other.  The question of whether the law of a state can be
to act on behalf of the company in the instant petition, the Court finds the same as sufficient compliance with applied to a transaction is different from the question of whether the courts of that state have jurisdiction to
the Rules. enter a judgment.

However, the Court cannot extend the same liberal treatment to the defect in the verification and In this case, only the first phase is at issue—jurisdiction.Jurisdiction, however, has various aspects.
certification. As respondent pointed out, and to which we agree, Hasegawa is truly not authorized to act on For a court to validly exercise its power to adjudicate a controversy, it must have jurisdiction over the plaintiff
behalf of Nippon in this case. The aforesaid September 4, 2000 Authorization and even the subsequent August or the petitioner, over the defendant or the respondent, over the subject matter, over the issues of the case and,
17, 2001 Authorization were issued only by Nippon's president and chief executive officer, not by the in cases involving property, over the res or the thing which is the subject of the litigation. In assailing the trial
company's board of directors. In not a few cases, we have ruled that corporate powers are exercised by the court's jurisdiction herein, petitioners are actually referring to subject matter jurisdiction.
board of directors; thus, no person, not even its officers, can bind the corporation, in the absence of authority
Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority
from the board. Considering that Hasegawa verified and certified the petition only on his behalf and not on
which establishes and organizes the court. It is given only by law and in the manner prescribed by law. It is
behalf of the other petitioner, the petition has to be denied pursuant to Loquias v. Office of the
further determined by the allegations of the complaint irrespective of whether the plaintiff is entitled to all or
Ombudsman. Substantial compliance will not suffice in a matter that demands strict observance of the Rules.
some of the claims asserted therein. To succeed in its motion for the dismissal of an action for lack of
While technical rules of procedure are designed not to frustrate the ends of justice, nonetheless, they are
jurisdiction over the subject matter of the claim, the movant must show that the court or tribunal cannot act on
intended to effect the proper and orderly disposition of cases and effectively prevent the clogging of court
the matter submitted to it because no law grants it the power to adjudicate the claims.
dockets.
In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not
Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition to question the
properly vested by law with jurisdiction to hear the subject controversy for, indeed, Civil Case No. 00-0264 for
trial court's denial of their motion to dismiss. It is a well-established rule that an order denying a motion to
specific performance and damages is one not capable of pecuniary estimation and is properly cognizable by
dismiss is interlocutory, and cannot be the subject of the extraordinary petition for certiorari or mandamus.
the RTC of Lipa City. What they rather raise as grounds to question subject matter jurisdiction are the
The appropriate recourse is to file an answer and to interpose as defenses the objections raised in the motion,
principles of lex loci celebrationis and lex contractus, and the "state of the most significant relationship rule."
to proceed to trial, and, in case of an adverse decision, to elevate the entire case by appeal in due
course.44 While there are recognized exceptions to this rule, petitioners' case does not fall among them. The Court finds the invocation of these grounds unsound.
This brings us to the discussion of the substantive issue of the case. Lex loci celebrationis relates to the "law of the place of the ceremony" or the law of the place where
a contract is made. The doctrine of lex contractus or lex loci contractus means the "law of the place where a
Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its jurisdiction to
contract is executed or to be performed." It controls the nature, construction, and validity of the contract and it
hear and resolve the civil case for specific performance and damages filed by the respondent. The ICA subject
may pertain to the law voluntarily agreed upon by the parties or the law intended by them either expressly or
of the litigation was entered into and perfected in Tokyo, Japan, by Japanese nationals, and written wholly in
implicitly. Under the "state of the most significant relationship rule," to ascertain what state law to apply to a
the Japanese language. Thus, petitioners posit that local courts have no substantial relationship to the parties
dispute, the court should determine which state has the most substantial connection to the occurrence and the
following the [state of the] most significant relationship rule in Private International Law.
parties. In a case involving a contract, the court should consider where the contract was made, was negotiated,
The Court notes that petitioners adopted an additional but different theory when they elevated the was to be performed, and the domicile, place of business, or place of incorporation of the parties. This rule
case to the appellate court. In the Motion to Dismiss filed with the trial court, petitioners never contended that takes into account several contacts and evaluates them according to their relative importance with respect to
the RTC is an inconvenient forum. They merely argued that the applicable law which will determine the the particular issue to be resolved.
validity or invalidity of respondent's claim is that of Japan, following the principles of lex loci
Since these three principles in conflict of laws make reference to the law applicable to a dispute,
celebrationis and lex contractus. While not abandoning this stance in their petition before the appellate court,
they are rules proper for the second phase, the choice of law. They determine which state's law is to be applied
petitioners on certiorari significantly invoked the defense of forum non conveniens. On petition for review
in resolving the substantive issues of a conflicts problem. Necessarily, as the only issue in this case is that of
before this Court, petitioners dropped their other arguments, maintained the forum non conveniens defense,
jurisdiction, choice-of-law rules are not only inapplicable but also not yet called for.
 Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact that they BALIBAGO FAITH BAPTIST CHURCH, INC. AND PHILIPPINE BAPTIST S.B.C.,
have not yet pointed out any conflict between the laws of Japan and ours. Before determining which law INC., Petitioners, v. FAITH IN CHRIST JESUS BAPTIST CHURCH, INC. AND REYNALDO
should apply, first there should exist a conflict of laws situation requiring the application of the conflict of GALVAN, Respondent.
laws rules. Also, when the law of a foreign country is invoked to provide the proper rules for the solution of a
case, the existence of such law must be pleaded and proved. PERALTA, J.:
It should be noted that when a conflicts case, one involving a foreign element, is brought before a
court or administrative agency, there are three alternatives open to the latter in disposing of it: (1) dismiss the This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the reversal
case, either because of lack of jurisdiction or refusal to assume jurisdiction over the case; (2) assume of the Decision1 dated March 5, 2010 of the Court of Appeals (CA) in CA-G.R. SP No. 97292.
jurisdiction over the case and apply the internal law of the forum; or (3) assume jurisdiction over the case and
take into account or apply the law of some other State or States. The court’s power to hear cases and
The facts follow.
controversies is derived from the Constitution and the laws. While it may choose to recognize laws of foreign
nations, the court is not limited by foreign sovereign law short of treaties or other formal agreements, even in The instant petition originated from a Complaint 2 for unlawful detainer and damages filed by
matters regarding rights provided by foreign sovereigns. Balibago Faith Baptist Church, Inc. (BFBC) and Philippine Baptist S.B.C., Inc. (PBSBC) against Faith in
Christ Jesus Baptist Church, Inc. (FCJBC) and Reynaldo Galvan (Galvan) before the Municipal Trial Court
Neither can the other ground raised, forum non conveniens, be used to deprive the trial court of its jurisdiction (MTC), Branch 2, Angeles City, docketed as Civil Case No. 02-388. The complaint sought the ejectment of
herein. First, it is not a proper basis for a motion to dismiss because Section 1, Rule 16 of the Rules of Court FCJBC from the subject parcel of land with improvements, known as Lot 3, Blk. 35 of (LRC) PCS-2364,
does not include it as a ground. Second, whether a suit should be entertained or dismissed on the basis of the covered by Transfer Certificate of Title (TCT) No. 82587,3  and located at 35-3 Sarita St., Diamond
said doctrine depends largely upon the facts of the particular case and is addressed to the sound discretion of Subdivision, Balibago, Angeles City, and owned by PBSBC.
the trial court. In this case, the RTC decided to assume jurisdiction. Third, the propriety of dismissing a case
based on this principle requires a factual determination; hence, this conflicts principle is more properly On March 7, 1990, a contract of loan was entered into between PBSBC and BFBC where the latter
considered a matter of defense. borrowed money from the former to enable it to purchase the subject property. Thereafter, respondent BFBC
took possession of the subject property and held therein their religious activities.
Accordingly, since the RTC is vested by law with the power to entertain and hear the civil case filed
by respondent and the grounds raised by petitioners to assail that jurisdiction are inappropriate, the trial and While BFBC was still in possession of the subject property, Galvan and his companions began
appellate courts correctly denied the petitioners’ motion to dismiss. attending BFBC's religious activities at the subject property. BFBC alleged that Galvan apparently was
interested on the property because after some time Galvan formed and incorporated FCJBC and took control of
WHEREFORE, premises considered, the petition for review on certiorari is DENIED. the subject property.
SO ORDERED. Galvan's actuations came to the attention of the Luzon Convention of Southern Baptist Churches,
Inc. (LCSBC). Thus, in a Letter4 dated September 5, 2001, LCSBC upheld BFBC's right over the subject
property and recognized BFBC's pastor, Rev. Rolando T. Santos, as its legitimate pastor.

However, FCJBC continued to occupy the subject property, thus, in a Demand Letter dated
September 4, 2002, BFBC demanded that FCJBC vacate the property within five (5) days from notice and to
pay the amount of P10,000.00 per month beginning October 2001 as reasonable compensation for its use.

Due to non-compliance with its demand, on September 24, 2003, BFBC and PBSBC filed a
Complaint6 for unlawful detainer and damages against FCJBC and Galvan.

In its Answer, FCJBC and Galvan contend that it has been in existence since 1984. Allegedly, it was
formerly known as "Faith Baptist Church" (FBC) and held services at the Tacipit family residence at 31-1
Dona Maria St., Diamond Subdivision, Angeles City. FBC eventually moved to a building along MacArthur
Highway in the same subdivision. Sometime in 1990, some of the members of the FBC availed of the loan
from the Church Loan Fund of Foreign Mission Board, SBC, Philippine Baptist Mission for the purpose of
purchasing the subject property. This was embodied in a Contract of Simple Loan or Mutuum dated March 7,
1990.

Rolando Santos was the pastor of FBC from 1993 to 2000. Due to a misunderstanding within the
church group, Santos left FBC, together with some of its members. In February 2001, Santos' group formed
BFBC, an organization which was duly registered with the Securities and Exchange Commission.

Meanwhile, FBC continued to occupy the subject property and, on January 9, 2001, organized
themselves into FCJBC.
G.R. No. 191527, August 22, 2016
On May 30, 2001, FCJBC paid installments due on the subject property in the sum of P10,000.00,
leaving a balance of P240,615.53. FCJBC alleged that since June 2001, they were willing and able to pay the
installments due on the subject property, however, PBSBC refused to accept any payment from it. By INSTEAD OF DECIDING THE CASE ON THE MERITS IN LIGHT OF SECTION 8, RULE 140 OF THE
September 9, 2002, the installments due had reached P47,232.00. RULES OF COURT.

FCJBC further averred that, prior to BFBC's filing of the present complaint, a Petition for In a nutshell, the main issue before us is whether the instant case is one of unlawful detainer or forcible entry.
Consignation of Payment was already filed on October 9, 2002 with the RTC, Branch 62, Angeles City
entitled "Carlos Gelacio, et al. v. Foreign Mission Board, S.B.C. Philippine Baptist Mission, now Philippine In Sumulong v. Court of Appeals, the Court differentiated the distinct causes of action in forcible
Baptist, S.B.C, Inc." docketed as Civil Case No. 10713. FCJBC prayed that PBSBC be required to accept the entry vis-a-vis unlawful detainer, to wit:
amount of P240,615.53 as full payment of the Contract of Simple Loan or Mutuum.
Forcible entry and unlawful detainer are two distinct causes of ;. action defined in Section 1, Rule
On October 29, 2002, FCJBC filed a Motion seeking the suspension of proceedings in Civil Case 70 of the Rules of Court. In forcible entry, one is deprived of physical possession of any land or building by
No. 02-388 pending resolution of the petition for consignation. means of force, intimidation, threat, strategy, or stealth. In unlawful detainer, one unlawfully withholds
possession thereof after the expiration or termination of his right to hold possession under any contract,
On February 9, 2004, the MTC rendered its Decision 7 in favor of respondent BFBC in Civil Case express or implied. In forcible entry, the possession is illegal from the beginning and the only issue is who has
No. 02-388. The MTC ruled that the case was one of forcible entry and not unlawful detainer. The dispositive the prior possession de facto. In unlawful detainer, possession was originally lawful but became unlawful by
portion of the Decision reads: the expiration or termination of the right to possess and the issue of rightful possession is the one decisive, for
in such action, the defendant is the party in actual possession and the plaintiffs cause of action is the
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff Balibago
termination of the defendant's right to continue in possession.
Faith Baptist Church, Inc. and against the defendants Faith in Christ Jesus Baptist Church, Inc., Reynaldo
Galvan and all persons claiming rights under them, ordering the latter the following From the foregoing, it is then clear that unlawful detainer and forcible entry are entirely distinct
causes of action, to wit: (a) action to recover possession founded on illegal occupation from the beginning -
1. To   vacate  and  surrender  possession  of the   subject property to plaintiff within three forcible entry; and (b) action founded on unlawful detention by a person who originally acquired possession
(3) months from receipt of this Decision; lawfully - unlawful detainer.
2. To pay the sum of P20,000.00 as reasonable attorney's fees; and 
3. To pay the costs of the suit The rule is that the allegations in the complaint determine both the nature of the action and the
jurisdiction of the court. The cause of action in a complaint is not what the designation of the complaint states,
but what the allegations in the body of the complaint define and describe. The designation or caption is not
Defendants' counterclaim is hereby DISMISSED for lack of merit. controlling, more than the allegations in the complaint themselves are, for it is not even an indispensable part
of the complaint. The complaint must specifically allege the facts constituting unlawful detainer or forcible
SO ORDERED entry if the complaint filed was for unlawful detainer, or forcible entry, respectively. It cannot be made to
depend on the exclusive characterization of the case by one of the parties, jurisdiction cannot be made to
Both parties filed their respective appeal memoranda with the RTC. On April 19, 2006, the RTC depend upon the defenses set up in the answer, in a motion to dismiss or in a motion for reconsideration. 
issued the assailed Decision9 which affirmed the Decision of the MTC. FCJBC moved for reconsideration, but
It should then be stressed that what determines the cause of action is the nature of defendants' entry
was denied on November 24, 2006. Thus, FCJBC filed a petition for review on certiorari before the appellate
into the land. If entry is illegal, then the cause of action which may be filed against the intruder within one year
court.
therefrom is forcible entry. If, on the other hand, entry is legal but thereafter possession became illegal, the
In the disputed Decision dated March 5, 2010, the appellate court granted the petition, the
case is one of illegal detainer which must be filed within one year from the date of the last demand.
dispositive portion of which reads:
Indeed, to vest the court of jurisdiction to effect the ejectment of an occupant, it is necessary that the
WHEREFORE, premises considered, the instant petition is GRANTED. The assailed orders of the complaint should embody such a statement of facts which brings the party clearly within the class of cases for
Regional Trial Court, Branch 57, Angeles City, dated April 19, 2006 and November 24, 2006, are which the statutes provide a remedy, as these proceedings are summary in nature. The complaint must show
REVERSED and SET ASIDE. The complaint for unlawful detainer is DISMISSED. enough on its face the court's jurisdiction without resort to parol testimony. This is where petitioners' cause of
action fails.
SO ORDERED.
Undaunted, BFBC and PBSBC filed the instant petition for review on certiorari under Rule 45 of the Rules of In Cabrera, et al. v. Getaruela, et al. , 20 the Court held that a complaint sufficiently alleges a cause
Court raising the following issues: of action for unlawful detainer if it recites the following:
I
WHETHER THE COURT OF APPEALS ERRED IN DISMISSING THE COMPLAINT FOR UNLAWFUL (1)    initially, possession of property by the defendant was by contract with or by tolerance of the
DETAINER AND RULING THAT THE MTC HAS NO JURISDICTION OVER THE CASE. plaintiff;
II
WHETHER THE COURT OF APPEALS ERRED IN RAISING ISSUES ON THE SUFFICIENCY OF THE (2)    eventually, such possession became illegal upon notice by plaintiff to defendant of the
COMPLAINT AND THE MTC JURISDICTION WHICH WERE NOT BROUGHT OUT BY THE termination of the latter's right of possession;
PARTIES.
(3)    thereafter, the defendant remained in possession of the property and deprived the plaintiff of
the enjoyment thereof; and 
III
WHETHER THE COURT OF APPEALS ERRED WHEN IT RULED TO DISMISS THE COMPLAINT (4)    within one year from the last demand on defendant to vacate the property, the plaintiff
instituted the complaint for ejectment.
In this case, BFBC presented the following allegations in support of its unlawful detainer complaint: shows that FCJBC entered the land and occupied the house thereon without BFBC and PBSBC's consent or
x x x x permission which are constitutive of forcible entry. Unfortunately, BFBC and PB SBC's failure to allege when
the dispossession took place and how it was effected leaves the complaint wanting in jurisdictional ground.
2.    Plaintiff Philippine Baptist S.B.C., Inc. is the registered owner of a parcel of land with improvements
Suffice it to say, the one-year period within which to bring an action for forcible entry is generally
under Lot 3 Blk. 35 of (LRC) Pcs-2364 described under Transfer Certificate of Title (TCT) No. 82587 issued
counted from the date of actual entry on the land, except that when entry was made through stealth, the one-
by the Registry of Deeds of Angeles City, located at 35-3 Sarita St., Diamond Subd., Balibago, Angeles City,
year period is counted from the time the plaintiff learned thereof. 24 If the dispossession did not occur by any of
which is the subject matter of this case and hereinafter referred to as subject premises. A copy of the title is
the means stated in Section 1, Rule 70, as in this case, the proper recourse is to file a plenary action to recover
hereto attached as Annex "A" and to form an integral part hereof;4
possession with the Regional Trial Court. Consequently, the MTC has no jurisdiction over the case.
3.    On March 7, 1990, plaintiff PBSBC granted a contract of simple loan to plaintiff BFBC for the latter's
We likewise reiterate that a court's jurisdiction may be raised at any stage of the proceedings, even
purchase of the subject premises and plaintiff BFBC  started to possess the same and hold their religious
on appeal. The reason is that jurisdiction is conferred by law, and lack of it affects the very authority of the
activities thereat;
court to take cognizance of and to render judgment on the action. Indeed, a void judgment for want of
4.    While plaintiff BFBC was in possession of the subject premises, defendant Reynaldo Galvan and his jurisdiction is no judgment at all. It cannot be the source of any right nor the creator of any obligation. All acts
companions joined the regular religious services of plaintiff BFBC at the subject premises; performed pursuant to it and all claims emanating from it have no legal effect. Hence, it can never become
final and any writ of execution based on it is void.
5.    It turned out that defendants have an interest in the subject premises and defendant Reynaldo Galvan
formed and incorporated the defendant FCJBC and took control of the subject premises; WHEREFORE, all premises considered, the instant petition is DENIED for lack of merit.
Accordingly, the Decision dated March 5, 2010 of the Court of Appeals in CA-G.R. SP No. 97292
6.    The take-over of the defendants was brought to the attention of the Luzon Convention of Southern Baptist
is AFFIRMED in toto.
Churches, Inc., (LCSBC) and the latter, in letter dated September 5, 2001, has affirmed the right of the
plaintiff BFBC, headed by Rev. Rolando T. Santos, to occupy the subject premises. A copy of LCSBC's letter
dated September 5, 2001 is hereto attached as Annex "B";7.    Despite [LCSBC's] letter and plaintiffs peaceful
overtures for the defendants to turn over to plaintiffs the subject premises, defendants ignored the same;8.    
Due  to  exhaustion,  expense  and  exasperation,  plaintiffs  were constrained   to   refer   this   matter   to  
the   undersigned   counsel   and, accordingly, on September 4, 2002, a demand letter was sent to the
defendants   for  them   to   pay   the   reasonable   compensation of TEN THOUSAND (PI0,000.00) PESOS
per month beginning October 2001 for the use of the subject premises and to vacate the same within five (5)
[days upon] their receipt thereof. A copy of the demand
letter is hereto attached as Annex "C" and to form an integral part hereof;
9.    Despite plaintiffs' lawyer's demand letter, defendants failed and refused to pay the reasonable
compensation for the subject premises and to vacate the subject premises;
A perusal of the above-quoted allegations in the complaint would show that it contradicts the
requirements for unlawful detainer. In an unlawful detainer action, the possession of the defendant was
originally legal and its possession was tolerated or permitted by the owner through an express or implied
contract.
In this case, paragraphs 5 and 6 make it clear that FCJBC's occupancy was unlawful from the start
and was bereft of contractual or legal basis. There was, likewise, no allegation that BFBC and PBSBC
tolerated FCJBC's possession of the subject property. Neither was there any averment in the complaint which
shows any overt act on the part of BFBC and PBSBC indicative of permission to occupy the land. In an
unlawful detainer case, the defendant's possession becomes illegal only upon the plaintiffs demand for the
defendant to vacate the property and the defendant's subsequent refusal. Here, paragraphs 7 and 8 characterize
the defendant's occupancy as unlawful even before the formal demand letters were written by the petitioner's
counsel. Given these allegations, the unlawful withholding of possession should not be based on the date the
demand letters were sent, as the alleged unlawful act had taken place at an earlier unspecified date.
This case would have to fall under the concept of forcible entry as it has been long settled that in
forcible entry cases, no force is really necessary. The act of going on the property and excluding the lawful
possessor therefrom necessarily implies the exertion of force over the property, and this is all that is
necessary.23 However, while BFBC sufficiently alleged that they had prior physical possession of the subject
property, nothing has been said on how FCJBC's entry was effected or when dispossession started. It is in this
light that we rule that the present complaint is similarly defective even if we are to treat the same as forcible
G.R. No. 222821, August 09, 2017
entry as it failed to allege how and when entry was effected. The bare allegation of BFBC that "[i]t turned out
NORTH GREENHILLS ASSOCIATION, INC., Petitioner, v. ATTY. NARCISO
that defendants have an interest in the subject premises and defendant Reynaldo Galvan formed and
MORALES, Respondent.
incorporated the defendant FCJBC and took control of the subject premises," would not suffice since it only
 DECISION On April 13, 2003, the HLURB Arbiter conducted an ocular inspection of the park and noted that
MENDOZA, J.: the construction started by NGA blocked Atty. Morales' side access to the park.

On February 16, 2005, the HLURB Arbiter rendered a Decision, the decretal portion of which reads:
In this petition for review on certiorari with application for temporary restraining order and writ of
preliminary injunction1 filed under Rule 45 of the Rules of Court, petitioner North Greenhills Association, WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered ordering respondents
Inc. (NGA) seeks the review of the March 13, 2015 Decision2 and February 3, 2016 Resolution3 of the Court of
of the removal of the pavilion and the relocation of the common toilet in a place where it will not be a nuisance
Appeals (CA) in CA-G.R. SP No. 131707, which affirmed the February 17, 2010 Decision4 and August 8, to any resident. Respondents are further directed to remove the obstruction to the side door of the complainant.
2013 Resolution5 of the Office of the President (OP) in O.P. Case No. 08-1-004. The CA ruled in favor of
All other claims and counterclaims are hereby dismissed for lack of merit.
respondent Atty. Narciso Morales (Atty. Morales), a resident of North Greenhills Subdivision, who filed a
Complaint before the Housing and Land Use Regulatory Board (HLURB), docketed as HLURB Case No.
HOA-A-050425-0014, against the NGA for allegedly blocking his side access to the community park. IT IS SO ORDERED.

Factual Antecedents NGA appealed to the HLURB Board of Commissioners (HLURB Board). In its November 22, 2007
Decision,8 the HLURB Board modified the ruling of the HLURB Arbiter, thus:
Atty. Morales is a resident of North Greenhills Subdivision in San Juan City. His house is located
alongside Club Filipino Avenue and adjacent to McKinley Park, an open space/playground area owned and Further, the complaint against respondent Alviar should be dropped as no acts have been
operated by NGA. He also has a personal access door, which he built through a wall separating his house from particularly attributed to him in his personal capacity.
the park. This access door, when unlocked, opens directly into the park.
WHEREFORE, premises considered, the decision of the Regional Office is hereby MODIFIED.
On the other hand, NGA, an association composed of members of the subdivision, organized to Accordingly, respondent NGA is ordered to relocate the restroom constructed or being constructed in the
promote and advance the best interests, general welfare, prosperity, and safeguard the well-being of the McKinley Park away from the walls of any resident and where it will not block complainant's side door access
owners, lessees and occupants of North Greenhills, is the undisputed owner of the park. It has acquired to the park.
ownership thereof through a donation made by the original owner, Ortigas &. Co. Ltd.
SO ORDERED.
In June 2003, NGA started constructing a pavilion or kiosk occupying the side of the park adjacent
to the residence of Atty. Morales. Part of the design was a public restroom intended to serve the needs of park NGA appealed to the Office of the President (OP).
guests and members of NGA. Said restroom was constructed alongside the concrete wall separating the house
On February 17, 2010, the OP rendered its decision, affirming in toto the ruling of the HLURB
of Atty. Morales from the park.
Board.
NGA moved for reconsideration, but its motion was denied by the OP in its August 8, 2013
Objecting to the construction of the restroom, Atty. Morales filed on July 23, 2003 a complaint
Resolution.
before the HLURB, docketed as HLURB Case No. NCRHOA-072303-309. On August 13, 2013, he amended
his complaint and additionally sought the demolition of the pavilion which was then being built. Aggrieved, NGA filed a petition for review under Rule 43 of the Rules of Court before the CA,
arguing that the OP erred in its findings.
Ruling of the CA
In his Amended Complaint, Atty. Morales alleged that for a period spanning 33 years, he had an
open, continuous, immediate, and unhampered access to the subdivision park through his side door, which also In its March 13, 2015 Decision,10 the CA affirmed the ruling of the OP. It found no error on the part
served as an exit door in case of any eventuality; that having such access to the park was one of the of the OP in affirming the characterization of the restrooms built as nuisance per accidens considering that the
considerations why he purchased the lot; that the construction of the pavilion was illegal because it violated his structure posed sanitary issues which could adversely affect not only Atty. Morales, but also his entire
right to immediate access to the park, Presidential Decree No. 957 and the Deed of Donation of Ortigas & Co. household; that even if there existed a perimeter wall between the park and Atty. Morales' home, the odor
Ltd., which required the park to be maintained as an open area; and that the restroom constructed by NGA was emanating from the restroom could easily find its way to the dining area, and the foul and noxious smell would
a nuisance per se. make it very difficult and annoying for the residents of the house to eat; and that the proximity of the restroom
to Atty. Morales' house placed the people residing therein at a greater risk of contracting diseases both from
improperly disposed waste and human excrements, as well as from flies, mosquitoes and other insects, should
NGA, in its Answer with Compulsory Counterclaim, rejected the assertions of Atty. Morales. It NGA fail to maintain the cleanliness of the structures.
contended that as the absolute owner of the park, it had the absolute right to fence the property and impose
reasonable conditions for the use thereof by both its members and third parties; that the construction of the
restroom was for the use and benefit of all NGA members, including Atty. Morales; and that Atty. Morales' The CA stated that NGA's fear of being exposed to outsiders and criminals because Atty. Morales'
use of a side entrance to the park for 33 years could not have ripened into any right because easement of right access was unfounded. It pointed out that the door had been in existence for more than three decades and that
of way could not be acquired by prescription. NGA likewise sought the payment of P878,778.40 if dangers truly existed, NGA should have taken immediate action and blocked the side access years earlier. It
corresponding to the annual membership dues which Atty. Morales had not been paying since 1980. then pointed out other ways to remedy the security concerns of NGA, such as placing a wall strategically
placed at the border of the park or additional guards to patrol the vicinity.
 As to the counterclaim of NGA for association dues, the CA held that the claim was in the nature of SUBJECT TOILET HAS CAUSED PHYSICAL ANNOYANCE OR DISCOMFORT TO HIM. NO
a permissive counterclaim, which was correctly dismissed by the OP. TESTIMONY HAS EVER BEEN BROUGHT TO THE HLURB OR THE OFFICE OF THE
NGA moved for reconsideration, but its motion was denied by the CA in its February 3, 2016 PRESIDENT SHOWING THAT THE TOILET EMITTED ANY FOUL SMELL, OR ODOR, OR AT
Resolution.
THE VERY LEAST, ANNOYED RESPONDENT MORALES EVERY TIME HE WOULD EAT IN
Hence, this petition.
HIS DINING AREA.
GROUNDS: (2). AS A MATTER OF FACT, IT IS WORTH TO NOTE THAT THE RESPONDENT DID NOT
I. EVEN SUBMIT A POSITION PAPER BEFORE THE HLURB TO ATTEST TO AND PROVE SUCH
THE COURT OF APPEALS SERIOUSLY ERRED IN COMPLETELY DISREGARDING THE FACTUAL MATTERS.
HLURB'S LACK OF JURISDICTION OVER THE INSTANT CASE. (3). IN THE VERY CASE CITED BY THE COURT OF APPEALS, SMART COMMUNICATIONS V.
(1). RESPONDENT MORALES FAILED TO ALLEGE IN HIS COMPLAINT (OR AMENDED ALDECOA (G.R. NO. 166330, SEPTEMBER 11, 2013), THE HONORABLE COURT STRUCK DOWN
COMPLAINT) THAT HE IS A MEMBER OF NGA - A FATAL JURISDICTIONAL DEFECT THE RULING OF THE LOWER COURT AND PRONOUNCED THAT A DECISION THAT
FOR FAILURE TO PROPERLY LAY THE PREDICATE THAT WOULD HAVE ENABLED DECLARES A THING TO BE A NUISANCE PER ACCIDENS MUST BE SUPPORTED BY
THE HLURB TO ACQUIRE JURISDICTION OVER THE INSTANT ACTION. FACTUAL EVIDENCE AND NOT BY MERE CONJECTURES OR SUPPOSITIONS.
(2). IN THE CASE OF STA. CLARA HOMEOWNERS' ASSOCIATION V. GASTON (G.R. NO. IV.
141961, JANUARY 23, 2002), THE HONORABLE COURT RULED THAT WHERE THE THE COURT OF APPEALS SERIOUSLY ERRED IN UPHOLDING RESPONDENT ATTY.
BODY OF THE COMPLAINT FILED IN THE NOW HLURB FAILS TO MENTION THAT THE MORALES' UNBRIDLED ACCESS TO MCKINLEY PARK, EFFECTIVELY CONSTITUTING AN
COMPLAINANT IS A MEMBER OF THE ASSOCIATION HE IS SUING, SUCH COMPLAINT EASEMENT OF RIGHT OF WAY WITHOUT ANY BASIS - AS AGAINST THE CLEAR
MUST BE DISMISSED FOR LACK OF JURISDICTION. STATUTORY RIGHT OF PETITIONER NGA, AS THE OWNER OF MCKINLEY PARK TO
(3). PETITIONER NGA'S CLAIM FOR UNPAID ASSOCIATION DUES DOES NOT FENCE AND PROTECT ITS PROPERTY, GRANTED UNDER ARTICLES 429 AND 430 OF THE
PRECLUDE IT FROM ASSAILING RESPONDENT'S MEMBERSHIP IN THE NGA. CIVIL CODE.
(4). IN THE CASE OF GREGORIO C. JAVELOSA V. COURT OF APPEALS (G.R. NO. 124292, (1). CONTRARY TO THE ASSAILED DECISION, IT IS NOT INCUMBENT UPON
DECEMBER 10, 1996), THE HONORABLE COURT RULED THAT "IT IS SETTLED THAT PETITIONER NGA TO PROVE THE LEGALITY OF ITS ACT OF CONSTRUCTING THE
THE JURISDICTION OF COURTS OVER THE SUBJECT MATTER OF LITIGATION IS SUBJECT TOILET ON ITS OWN PROPERTY. INDEED, THIS IS A BASIS STATUTORY
DETERMINED BY THE ALLEGATIONS IN THE COMPLAINT. IT IS EQUALLY SETTLED RIGHT OF NGA AS AN "OWNER".
THAT AN ERROR OF JURISDICTION CAN BE RAISED AT ANY TIME AND EVEN FOR (2). RESPONDENT, ON THE OTHER HAND, BEING THE PROPONENT OF THE ACTION TO
THE FIRST TIME ON APPEAL." DECLARE THE TOILET A NUISANCE, IS THE ONE SADDLED BY LAW WITH THE
II. RESPONSIBILITY OF PROVING THAT THE STRUCTURE BUILT BY NGA IS A
THE COURT OF APPEALS SERIOUSLY ERRED AND IS MANIFESTLY MISTAKEN IN RULING NUISANCE. AS DISCUSSED, HOWEVER, RESPONDENT UTTERLY FAILED TO
THAT THE TOILET BUILT BY NGA AT THE MCKINLEY PARK IS A NUISANCE PER DISCHARGE SUCH BURDEN.
ACCIDENS, ON THE BASIS OF MERE SPECULATION, SUPPOSITION AND PURE (3). ARTICLE 430 OF THE CIVIL CODE GRANTS PETITIONER NGA OF ITS STATUTORY
CONJECTURE, CONSIDERING THE TOTAL LACK OF EVIDENCE ON RECORD TO PROVE RIGHT TO FENCE OFF HIS PROPERTY. ART. 430 STATES THAT "EVERY OWNER MAY
SO. ENCLOSE OR FENCE HIS LAND OR TENEMENTS BY MEANS OF WALLS, DITCHES,
(1). RESPONDENT ATTY. MORALES DID NOT SET OUT TO PROVE THAT THE TOILET LIVE OR DEAD HEDGES, OR BY ANY OTHER MEANS WITHOUT DETRIMENT TO
ADJACENT HIS HOUSE INJURED HIM OR THAT FOUL ODOR EMANATED FROM IT SERVITUDES CONSTITUTED THEREON."
BECAUSE HE MISTAKENLY ALLEGED THAT THE TOIILET WAS A NUISANCE PER SE. (4). MOREOVER, ARTICLE 429 OF THE CIVIL CODE LIKEWISE GRANTS PETITIONER
(2). BY FAILING TO ADDUCE EVIDENCE THAT THE TOILET, IN ANY WAY, ANNOYED NGA THE RIGHT TO EXCLUDE OTHERS FROM ACCESS TO AND ENJOYMENT OF ITS
RESPONDENT'S SENSES, OR THAT FOUL ODOR EMANATED FROM IT, OR THAT IT PROPERTY.
POSED SANITARY ISSUES DETRIMENTAL TO HIS FAMILY'S HEALTH - THE SUBJECT V.
TOILET CANNOT BE LEGALLY CONSIDERED NUISANCE PER ACCIDENS. THE COURT OF APPEALS SERIOUSLY ERRED IN RULING THAT PETITIONER NGA'S
(3). INDEED, A CURSORY VIEW OF THE PERTINENT DISCUSSION IN THE ASSAILED COUNTERCLAIM TO COLLECT ON RESPONDENT'S UNPAID ASSOCIATION DUES FOR THE
DECISION REVEALS THAT THE COURT OF APPEALS SADLY TOOK THE PATH OF PAST THIRTY-THREE (33) YEARS, IS NOT COMPULSORY BUT MERELY PERMISSIVE.
SPECULATION, SUPPOSITION AND PURE CONJECTURE IN JUSTIFYING ITS DECISION. (1). AS A PERSON SUING NGA FOR THE EXERCISE OF HIS RIGHTS AS AN ALLEGED
III. MEMBER THEREOF, NGA'S DEFENSE WILL, AS A MATTER OF COURSE, INVOLVE THE
THE ASSAILED 13 MARCH 2015 DECISION IS PATENTLY ERRONEOUS AS IT IS BASED ON CONTEST OF SUCH RIGHT. IN ORDER FOR NGA TO CONTEST RESPONDENT'S RIGHT
GRAVE MISAPPREHENSION OF FACTS AND OF THE EVIDENCE - OR THE TOTAL LACK OF TO USE THE PARK AS A MEMBER OF NGA, THE LATTER HAS NO OTHER
IT - ON RECORD. ALTERNATIVE BUT TO RAISE HIS NON-PAYMENT OF MEMBERSHIP DUES IN ORDER
(1). INDEED, A PERUSAL OF THE RECORDS WOULD REVEAL THAT THERE WAS NO TO ATTACK HIS RIGHT TO USE THE PARK, WHICH RIGHT INEXTRICABLY ARISES
EVIDENCE WHATSOEVER ADDUCED BY THE RESPONDENT DEMONSTRATING THAT THE OUT OF HIS STANDING AS AN ALLEGED MEMBER OF NGA.
 (2). AS A MATTER OF FACT, REPUBLIC ACT NO. 9904, OTHERWISE KNOWN AS THE In this case, it appears that Atty. Morales, by filing his complaint as a member whose rights have
"MAGNA CARTA FOR HOMEOWNERS AND HOMEOWNERS' ASSOCIATIONS" MAKES been allegedly violated, has satisfied such requirement. His status as a member has not been questioned. It is
IT A CONDITION SINE QUA NON THAT THE HOMEOWNER MUST PAY THE worthy to note that NGA, in its counterclaim, demanded the payment of association dues from Atty. Morales
as he has been refusing to pay his dues for more than three decades. In sum, there is no dispute that Atty.
ASSOCIATION FEES AND CHARGES BEFORE HE CAN ENJOY ITS FACILITIES.11
Morales is a member of NGA, albeit a delinquent member. In Tumpag v. Tumpag, the Court said:

In its Resolution, dated May 30, 2016, the Court required respondent to file his Comment on the Generally, the court should only look into the facts alleged in the complaint to determine whether a
petition. To date, no Comment has been filed. For said reason, the Court deemed, as it hereby deems, that suit is within its jurisdiction. There may be instances, however, when a rigid application of this rule may result
respondent had waived his right to file one. in defeating substantial justice or in prejudice to a party's substantial right. In Marcopper Mining Corp. v.
Garcia, we allowed the RTC to consider, in addition to the complaint, other pleadings submitted by the parties
ISSUES in deciding whether or not the complaint should be dismissed for lack of cause of action. In Guaranteed
Homes, Inc. v. Heirs of Valdez, et al., we held that the factual allegations in a complaint should be considered
in tandem with the statements and inscriptions on the documents attached to it as annexes or integral
1 WHETHER THE CA CORRECTLY RULED THAT THE HLURB HAD JURISDICTION
parts.20 [Citations omitted]
. OVER THE COMPLAINT FILED BY ATTY. MORALES;
2 WHETHER THE CA CORRECTLY RULED THAT THE RESTROOM BUILT BY NGA
. INSIDE THE MCKINLEY PARK IS A NUISANCE PER ACCIDENS; Considering that the requirement of membership is present, jurisdiction over the subject matter of
3 WHETHER NGA HAS THE RIGHT TO BLOCK ATTY. MORALES' ACCESS TO THE the case was properly vested in the HLURB. On the finding that the restroom
. PARK; AND was a nuisance per accidens
4 WHETHER THE CA CORRECTLY RULED THAT THE COUNTERCLAIM OF NGA
. AGAINST ATTY. MORALES FOR UNPAID ASSOCIATION DUES WAS A PERMISSIVE The CA in disposing the case, ruled that the restroom posed sanitary issues to Atty. Morales and is,
COUNTERCLAIM. therefore, a nuisance per accidens. Such is a finding of fact, which is generally conclusive upon the Court,
because it is not its function to analyze and weigh the evidence all over again
The Ruling of the Court
There are, however, well-recognized exceptions. These are (1) when the findings are grounded
The Court partly grants the petition. entirely on speculations, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd
or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a
misapprehension of facts; (5) when the findings of fact are conflicting; (6) when in making its findings the
On Jurisdiction
Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the
appellant and the appellee; (7) when the findings are contrary to that of the trial court; (8) when the findings
Basic is the rule that jurisdiction over the subject matter of a case is conferred by law and are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in
determined by the allegations in the complaint which comprise a concise statement of the ultimate facts the petition as well as in the petitioners main and reply briefs are not disputed by the respondent; (10) when the
constituting the plaintiff's cause of action. The nature of an action, as well as which court or body has findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record;
jurisdiction over it, is determined from the allegations contained in the complaint, irrespective of whether or or (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties,
not the plaintiff is entitled to recover upon all or some of the claims asserted therein. Once vested by the which, if properly considered, would justify a different conclusion.
allegations in the complaint, jurisdiction remains vested irrespective of whether or not the plaintiff is entitled
to recover upon all or some of the claims asserted therein.
NGA avers that the case falls under the said exceptions considering that no proof was ever presented
to prove that the restroom was a nuisance per accidens. Absent such evidence, the CA's finding was only
Relative thereto is the rule that lack of jurisdiction over the subject matter may be raised at any stage speculative, resulting in a grave misapprehension of facts.
of the proceedings. Jurisdiction over the subject matter is conferred only by the Constitution or the law. It
cannot be acquired through a waiver or enlarged by the omission of the parties or conferred by the
The Court agrees.
acquiescence of the court. Consequently, questions of jurisdiction may be cognizable even if raised for the first
time on appeal.
A nuisance per accidens is one which depends upon certain conditions and circumstances, and its
existence being a question of fact, it cannot be abated without due hearing thereon in a tribunal authorized to
NGA claims that the HLURB never had jurisdiction over the complaint filed by Atty. Morales
decide whether such a thing does in law constitute a nuisance. Obviously, it requires a determination of such
considering that there was no allegation that he was member of the association, entitling him to claim the use
circumstances as to warrant the abatement of the nuisance. That can only be done with reasonable notice to the
of the latter's facilities including the right of access to McKinley Park. Citing Sta. Clara Homeowner's
person alleged to be maintaining or doing the same of the time and place of hearing before a tribunal
Association v. Gaston, NGA asserts that for HLURB to acquire jurisdiction over disputes among members of
authorized to decide whether such a thing or act does in law constitute a nuisance per accidens.23
an association, it is a requirement that the allegation of membership must be clear in the complaint, otherwise,
no authority to hear and decide the case is vested in the concerned agency. Membership in a homeowners'
association is voluntary and cannot be unilaterally forced by a provision in the association's articles of In other words, it requires a proper appreciation of evidence before a court or tribunal rules that the
incorporation or by-laws, which the alleged member did not agree to be bound to. property being maintained is a nuisance per accidens.
 A reading of the CA's decision would easily reveal that its conclusions were merely speculative. It Counterclaim for unpaid dues was a permissive one and, therefore, the affirmation of its dismissal
wrote: was proper

A compulsory counterclaim is any claim for money or any relief, which a defending party may have
The said toilet, to Our mind, poses sanitary issues which could adversely affect not only the
Respondent but his entire household as well. Even if there exists a perimeter wall between Respondent's house against an opposing party, which at the time of suit arises out of, or is necessarily connected with, the same
transaction or occurrence that is the subject matter of the plaintiffs complaint. It is compulsory in the sense that
and the toilet, the odor emanating from the latter could easily find its way to the dining area, and the foul and
noxious smell would make it very difficult and annoying for the residents of the house to eat. Moreover, the it is within the jurisdiction of the court, does not require for its adjudication the presence of third parties over
whom the court cannot acquire jurisdiction, and will be barred in the future if not set up in the answer to the
proximity of the toilet to Respondent's house places the people residing therein at greater risk of contracting
diseases both from improperly disposed waste and human excrements, as well as from flies, mosquitoes, and complaint in the same case. Any other counterclaim is permissive.
other insects, should petitioner NGA fail to maintain the cleanliness in the said structure. Verily, the
determining factor when the toilet is the cause of the complaint is not how much it smells or stinks but where it The Court has held that the compelling test of compulsoriness characterizes a counterclaim as
is located as to produce actual physical discomfort and annoyance to a person of ordinary sensibilities compulsory if there should exist a logical relationship between the main claim and the counterclaim. The Court
further ruled that there exists such a relationship when conducting separate trials of the respective claims of the
By the use of the words "would, should, could," it can be discerned that the CA was not even sure parties would entail substantial duplication of time and effort by the parties and the court; when the multiple
claims involve the same factual and legal issues; or when the claims are offshoots of the same basic
that the restroom has caused such annoyance to Atty. Morales or his family. Its declaration that the restroom is
a nuisance per accidens had no basis in evidence. There is nothing in the records which discloses that Atty. controversy between the parties.
Morales had introduced any evidence, testimonial or documentary, to prove that the restroom annoyed his
senses, that foul odor emanated from it, or that it posed sanitary issues detrimental to his family's health. No The criteria to determine whether the counterclaim is compulsory or permissive are as follows:
certification by the City Health Officer was even submitted to the HLURB to attest on such matters.
(a) Are issues of fact and law raised by the claim and by the counterclaim largely the same?
It was improper on the part of the CA to assume those negative effects because modern day (b Would res judicata bar a subsequent suit on defendants claim absent the compulsory rule?
restrooms, even those for the use of the public, are clean, safe and emitting no odor as these are regularly )
maintained. For said reason, it was an error on the part of the CA to rule that the restroom was a nuisance per (c) Will substantially the same evidence support or refute plaintiffs claim as well as defendant's
accidens and to sustain the order that it should be relocated. counterclaim?
(d Is there any logical relations between the claim and the counterclaim?
Clearly, its finding was based on speculations, and not evidence. On the finding that Atty. )
Morales had no access to to McKinley Park
A positive answer to all four questions would indicate that the counterclaim is
NGA claims that the CA erred in upholding Atty. Morales' unbridled access to the park, which compulsory.28 Otherwise, the same is permissive.
effectively constituted an easement of right of way without any basis as against the clear statutory right of
NGA, as the owner of the park, to fence and protect its property on the basis of Articles 429 and 430 of the Here, the main issues in the complaint are limited only to the propriety of barring Atty. Morales
Civil Code. from accessing the park through the side door and whether the restroom constructed by NGA is a nuisance per
se. On the other hand, the counterclaim is simply concerned with collecting from Atty. Morales his unpaid
The Court agrees with NGA. association dues for the past thirty (30) years. Suffice it to state that payment or non-payment of association
Under the Civil Code, NGA, as owner of the park, has the right to enclose or fence his land or dues are distinct matters that do not relate to whether the main cause of Atty. Morales against NGA was
tenements by means of walls, ditches, live or dead hedges, or by any other means without detriment to proper. Whether there was payment or otherwise is irrelevant to the main issues considering that the pleadings
servitudes constituted thereon. It also has a right to exclude others from access to, and enjoyment of its filed by the parties essentially reflected an admission of membership of Atty. Morales in the association. The
property. failure to raise the issue of unpaid association dues in this case or its dismissal if properly raised will not be a
bar to the filing of the appropriate separate action to collect it.

NGA's legal right to block the access door is beyond doubt. Courts have no business in securing the
access of a person to another property absent any clear right on the part of the latter. WHEREFORE, the petition is PARTLY GRANTED. The March 13, 2015 Decision and the
February 3, 2016 Resolution of the Court of Appeals in CA-G.R. SP No. 131707, areREVERSED insofar as it
affirmed (1) Atty. Morales' entitlement to an unbridled access to the park through his side door; and (2) the
The CA essentially violated the right of NGA. Atty. Morales never introduced any evidence that he order to relocate the restroom to another area.. SO ORDERED.
had acquired any right by prescription or by agreement or legal easement to access the park through his side
door. Moreover, he never claimed that his side door was his only access to the park. He has other means and,
being adjacent to the park, going through other means is not cumbersome.
Aspects of jurisdiction
The conditions set forth under the Deed of Donation by Ortigas & Co. Ltd. to NGA could not be
used by Atty. Morales in his favor. Assuming that he has a right as a member to use the park, it does not mean G.R. No. 173946               June 19, 2013
that he can assert that his access to the park could only be done through his side door. Atty. Morales knows BOSTON EQUITY RESOURCES, INC., Petitionern vs. COURT OF APPEALS AND LOLITA G.
very well that he can access the park through some other parts of the park. TOLEDO, Respondents.
PEREZ, J.: x x x the court a quo’s denial of respondent’s motion to dismiss was based on its finding that respondent’s
attack on the jurisdiction of the court was already barred by laches as respondent failed to raise the said ground
Before the Court is a Petition for Review on Certiorari seeking to reverse and set aside: (1) the in its [sic] amended answer and during the pre-trial, despite her active participation in the proceedings.
Decision, dated 28 February 2006 and (2) the Resolution, dated 1 August 2006 of the Court of Appeals in CA-
G.R. SP No. 88586. The challenged decision granted herein respondent's petition for certiorari upon a finding However, x x x it is well-settled that issue on jurisdiction may be raised at any stage of the
that the trial court committed grave abuse of discretion in denying respondent's motion to dismiss the proceeding, even for the first time on appeal. By timely raising the issue on jurisdiction in her motion to
complaint against her. Based on this finding, the Court of Appeals reversed and set aside the Orders, dated 8 dismiss x x x respondent is not estopped from raising the question on jurisdiction.
November 20044 and 22 December 2004, respectively, of the Regional Trial Court (RTC) of Manila, Branch
24. Moreover, when issue on jurisdiction was raised by respondent, the court a quo had not yet decided
the case, hence, there is no basis for the court a quo to invoke estoppel to justify its denial of the motion for
The Facts reconsideration;

On 24 December 1997, petitioner filed a complaint for sum of money with a prayer for the issuance It should be stressed that when the complaint was filed, defendant Manuel S. Toledo was already
of a writ of preliminary attachment against the spouses Manuel and Lolita Toledo. Herein respondent filed an dead. The complaint should have impleaded the estate of Manuel S. Toledo as defendant, not only the wife,
Answer dated 19 March 1998 but on 7 May 1998, she filed a Motion for Leave to Admit Amended Answer in considering that the estate of Manuel S. Toledo is an indispensable party, which stands to be benefited or be
which she alleged, among others, that her husband and co-defendant, Manuel Toledo (Manuel), is already injured in the outcome of the case. x x x
dead. The death certificate9 of Manuel states "13 July 1995" as the date of death. As a result, petitioner filed a
motion, dated 5 August 1999, to require respondent to disclose the heirs of Manuel. In compliance with the Respondent’s motion to dismiss the complaint should have been granted by public respondent judge
verbal order of the court during the 11 October 1999 hearing of the case, respondent submitted the required as the same was in order. Considering that the obligation of Manuel S. Toledo is solidary with another debtor,
names and addresses of the heirs. Petitioner then filed a Motion for Substitution, dated 18 January 2000, x x x, the claim x x x should be filed against the estate of Manuel S. Toledo, in conformity with the provision
praying that Manuel be substituted by his children as party-defendants. It appears that this motion was granted of Section 6, Rule 86 of the Rules of Court, x x x.20
by the trial court in an Order dated 9 October 2000.
The Court of Appeals denied petitioner’s motion for reconsideration. Hence, this petition.
Pre-trial thereafter ensued and on 18 July 2001, the trial court issued its pre-trial order containing,
among others, the dates of hearing of the case. The Issues

The trial of the case then proceeded. Herein petitioner, as plaintiff, presented its evidence and its Petitioner claims that the Court of Appeals erred in not holding that:
exhibits were thereafter admitted.
1. Respondent is already estopped from questioning the trial court’s jurisdiction;
On 26 May 2004, the reception of evidence for herein respondent was cancelled upon agreement of 2. Petitioner never failed to implead an indispensable party as the estate of Manuel is not an
the parties. On 24 September 2004, counsel for herein respondent was given a period of fifteen days within indispensable party;
which to file a demurrer to evidence. However, on 7 October 2004, respondent instead filed a motion to 3. The inclusion of Manuel as party-defendant is a mere misjoinder of party not warranting the
dismiss the complaint, citing the following as grounds: (1) that the complaint failed to implead an dismissal of the case before the lower court; and
indispensable party or a real party in interest; hence, the case must be dismissed for failure to state a cause of 4. Since the estate of Manuel is not an indispensable party, it is not necessary that petitioner file its
action; (2) that the trial court did not acquire jurisdiction over the person of Manuel pursuant to Section 5, Rule
claim against the estate of Manuel.
86 of the Revised Rules of Court; (3) that the trial court erred in ordering the substitution of the deceased
Manuel by his heirs; and (4) that the court must also dismiss the case against Lolita Toledo in accordance with In essence, what is at issue here is the correctness of the trial court’s orders denying respondent’s
Section 6, Rule 86 of the Rules of Court. motion to dismiss.

The trial court, in an Order dated 8 November 2004, denied the motion to dismiss for having been The Ruling of the Court
filed out of time, citing Section 1, Rule 16 of the 1997 Rules of Court which states that: "Within the time for We find merit in the petition.
but before filing the answer to the complaint or pleading asserting a claim, a motion to dismiss may be made x Motion to dismiss filed out of time
x x." Respondent’s motion for reconsideration of the order of denial was likewise denied on the ground that To begin with, the Court of Appeals erred in granting the writ of certiorari in favor of respondent.
"defendants’ attack on the jurisdiction of this Court is now barred by estoppel by laches" since respondent Well settled is the rule that the special civil action for certiorari is not the proper remedy to assail the denial by
failed to raise the issue despite several chances to do so. the trial court of a motion to dismiss. The order of the trial court denying a motion to dismiss is merely
interlocutory, as it neither terminates nor finally disposes of a case and still leaves something to be done by the
Aggrieved, respondent filed a petition for certiorari with the Court of Appeals alleging that the trial court before a case is finally decided on the merits. Therefore, "the proper remedy in such a case is to appeal
court seriously erred and gravely abused its discretion in denying her motion to dismiss despite discovery, after a decision has been rendered."
during the trial of the case, of evidence that would constitute a ground for dismissal of the case.19
As the Supreme Court held in Indiana Aerospace University v. Comm. on Higher Education:
The Court of Appeals granted the petition based on the following grounds:
A writ of certiorari is not intended to correct every controversial interlocutory ruling; it is resorted
It is elementary that courts acquire jurisdiction over the person of the defendant x x x only when the only to correct a grave abuse of discretion or a whimsical exercise of judgment equivalent to lack of
latter voluntarily appeared or submitted to the court or by coercive process issued by the court to him, x x x. In jurisdiction. Its function is limited to keeping an inferior court within its jurisdiction and to relieve persons
this case, it is undisputed that when petitioner Boston filed the complaint on December 24, 1997, defendant from arbitrary acts – acts which courts or judges have no power or authority in law to perform. It is not
Manuel S. Toledo was already dead, x x x. Such being the case, the court a quo could not have acquired designed to correct erroneous findings and conclusions made by the courts. (Emphasis supplied)
jurisdiction over the person of defendant Manuel S. Toledo.
 Even assuming that certiorari is the proper remedy, the trial court did not commit grave abuse of but never did so for six straight years. Citing the doctrine laid down in the case of Tijam, et al. v. Sibonghanoy,
discretion in denying respondent’s motion to dismiss. It, in fact, acted correctly when it issued the questioned et al.30 petitioner claimed that respondent’s failure to raise the question of jurisdiction at an earlier stage bars
orders as respondent’s motion to dismiss was filed SIX YEARS AND FIVE MONTHS AFTER SHE FILED her from later questioning it, especially since she actively participated in the proceedings conducted by the trial
HER AMENDED ANSWER. This circumstance alone already warranted the outright dismissal of the motion court.
for having been filed in clear contravention of the express mandate of Section 1, Rule 16, of the Revised Rules
of Court. Under this provision, a motion to dismiss shall be filed within the time for but before the filing of an Petitioner’s argument is misplaced, in that, it failed to consider that the concept of jurisdiction has
answer to the complaint or pleading asserting a claim. several aspects, namely: (1) jurisdiction over the subject matter; (2) jurisdiction over the parties; (3)
jurisdiction over the issues of the case; and (4) in cases involving property, jurisdiction over the res or the
More importantly, respondent’s motion to dismiss was filed after petitioner has completed the thing which is the subject of the litigation.31
presentation of its evidence in the trial court, giving credence to petitioner’s and the trial court’s conclusion
that the filing of the motion to dismiss was a mere ploy on the part of respondent to delay the prompt The aspect of jurisdiction which may be barred from being assailed as a result of estoppel by laches
resolution of the case against her. is jurisdiction over the subject matter. Thus, in Tijam, the case relied upon by petitioner, the issue involved
was the authority of the then Court of First Instance to hear a case for the collection of a sum of money in the
Also worth mentioning is the fact that respondent’s motion to dismiss under consideration herein is amount of ₱1,908.00 which amount was, at that time, within the exclusive original jurisdiction of the
not the first motion to dismiss she filed in the trial court. It appears that she had filed an earlier motion to municipal courts.
dismiss xon the sole ground of the unenforceability of petitioner’s claim under the Statute of Frauds, which
motion was denied by the trial court. More telling is the following narration of the trial court in its Order In subsequent cases citing the ruling of the Court in Tijam, what was likewise at issue was the
denying respondent’s motion for reconsideration of the denial of her motion to dismiss: jurisdiction of the trial court over the subject matter of the case. Accordingly, in Spouses Gonzaga v. Court of
Appeals,32 the issue for consideration was the authority of the regional trial court to hear and decide an action
As can be gleaned from the records, with the admission of plaintiff’s exhibits, reception of for reformation of contract and damages involving a subdivision lot, it being argued therein that jurisdiction is
defendants’ evidence was set on March 31, and April 23, 2004 x x x . On motion of the defendants, the hearing vested in the Housing and Land Use Regulatory Board pursuant to PD 957 (The Subdivision and
on March 31, 2004 was cancelled. Condominium Buyers Protective Decree). In Lee v. Presiding Judge, MTC, Legaspi City,petitioners argued
that the respondent municipal trial court had no jurisdiction over the complaint for ejectment because the issue
On April 14, 2004, defendants sought the issuance of subpoena ad testificandum and duces tecum to of ownership was raised in the pleadings. Finally, in People v. Casuga, accused-appellant claimed that the
one Gina M. Madulid, to appear and testify for the defendants on April 23, 2004. Reception of defendants’ crime of grave slander, of which she was charged, falls within the concurrent jurisdiction of municipal courts
evidence was again deferred to May 26, June 2 and June 30, 2004, x x x. or city courts and the then courts of first instance, and that the judgment of the court of first instance, to which
she had appealed the municipal court's conviction, should be deemed null and void for want of jurisdiction as
On May 13, 2004, defendants sought again the issuance of a subpoena duces tecum and ad her appeal should have been filed with the Court of Appeals or the Supreme Court.
testificandum to the said Gina Madulid. On May 26, 2004, reception of defendants [sic] evidence was
cancelled upon the agreement of the parties. On July 28, 2004, in the absence of defendants’ witness, hearing In all of these cases, the Supreme Court barred the attack on the jurisdiction of the respective courts
was reset to September 24 and October 8, 2004 x x x. concerned over the subject matter of the case based on estoppel by laches, declaring that parties cannot be
allowed to belatedly adopt an inconsistent posture by attacking the jurisdiction of a court to which they
On September 24, 2004, counsel for defendants was given a period of fifteen (15) days to file a submitted their cause voluntarily.
demurrer to evidence. On October 7, 2004, defendants filed instead a Motion to Dismiss x x x.
Here, what respondent was questioning in her motion to dismiss before the trial court was that
Respondent’s act of filing multiple motions, such as the first and earlier motion to dismiss and then court’s jurisdiction over the person of defendant Manuel. Thus, the principle of estoppel by laches finds no
the motion to dismiss at issue here, as well as several motions for postponement, lends credibility to the application in this case. Instead, the principles relating to jurisdiction over the person of the parties are
position taken by petitioner, which is shared by the trial court, that respondent is deliberately impeding the pertinent herein.
early disposition of this case. The filing of the second motion to dismiss was, therefore, "not only improper but
also dilatory." Thus, the trial court, "far from deviating or straying off course from established jurisprudence The Rules of Court provide:
on the matter, x x x had in fact faithfully observed the law and legal precedents in this case." 29 The Court of
Appeals, therefore, erred not only in entertaining respondent’s petition for certiorari, it likewise erred in ruling RULE 9 EFFECT OF FAILURE TO PLEAD
that the trial court committed grave abuse of discretion when it denied respondent’s motion to dismiss.On
whether or not respondent is estopped from questioning the jurisdiction of the trial court. Section 1. Defenses and objections not pleaded. – Defenses and objections not pleaded either in a
motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the
At the outset, it must be here stated that, as the succeeding discussions will demonstrate, jurisdiction evidence on record that the court has no jurisdiction over the subject matter, that there is another action
over the person of Manuel should not be an issue in this case. A protracted discourse on jurisdiction is, pending between the same parties for the same cause, or that the action is barred by a prior judgment or by
nevertheless, demanded by the fact that jurisdiction has been raised as an issue from the lower court, to the statute of limitations, the court shall dismiss the claim.
Court of Appeals and, finally, before this Court. For the sake of clarity, and in order to finally settle the
controversy and fully dispose of all the issues in this case, it was deemed imperative to resolve the issue of RULE 15 MOTIONS
jurisdiction.
Sec. 8. Omnibus motion. – Subject to the provisions of Section 1 of Rule 9, a motion attacking a
1. Aspects of Jurisdiction pleading, order, judgment, or proceeding shall include all objections then available, and all objections not so
included shall be deemed waived.
Petitioner calls attention to the fact that respondent’s motion to dismiss questioning the trial court’s
jurisdiction was filed more than six years after her amended answer was filed. According to petitioner, Based on the foregoing provisions, the "objection on jurisdictional grounds which is not waived
respondent had several opportunities, at various stages of the proceedings, to assail the trial court’s jurisdiction even if not alleged in a motion to dismiss or the answer is lack of jurisdiction over the subject matter. x x x
Lack of jurisdiction over the subject matter can always be raised anytime, even for the first time on appeal, The court’s failure to acquire jurisdiction over one’s person is a defense which is personal to the person
since jurisdictional issues cannot be waived x x x subject, however, to the principle of estoppel by laches." claiming it. Obviously, it is now impossible for Sereno to invoke the same in view of his death. Neither can
petitioner invoke such ground, on behalf of Sereno, so as to reap the benefit of having the case dismissed
Since the defense of lack of jurisdiction over the person of a party to a case is not one of those against all of the defendants. Failure to serve summons on Sereno’s person will not be a cause for the dismissal
defenses which are not deemed waived under Section 1 of Rule 9, such defense must be invoked when an of the complaint against the other defendants, considering that they have been served with copies of the
answer or a motion to dismiss is filed in order to prevent a waiver of the defense. 37 If the objection is not raised summons and complaints and have long submitted their respective responsive pleadings. In fact, the other
either in a motion to dismiss or in the answer, the objection to the jurisdiction over the person of the plaintiff defendants in the complaint were given the chance to raise all possible defenses and objections personal to
or the defendant is deemed waived by virtue of the first sentence of the above-quoted Section 1 of Rule 9 of them in their respective motions to dismiss and their subsequent answers.43 (Emphasis supplied.)
the Rules of Court.38
Hence, the Supreme Court affirmed the dismissal by the trial court of the complaint against Sereno only.
The Court of Appeals, therefore, erred when it made a sweeping pronouncement in its questioned
decision, stating that "issue on jurisdiction may be raised at any stage of the proceeding, even for the first time Based on the foregoing pronouncements, there is no basis for dismissing the complaint against
on appeal" and that, therefore, respondent timely raised the issue in her motion to dismiss and is, consequently, respondent herein. Thus, as already emphasized above, the trial court correctly denied her motion to dismiss.
not estopped from raising the question of jurisdiction. As the question of jurisdiction involved here is that over On whether or not the estate of Manuel
the person of the defendant Manuel, the same is deemed waived if not raised in the answer or a motion to
Toledo is an indispensable party
dismiss. In any case, respondent cannot claim the defense since "lack of jurisdiction over the person, being
subject to waiver, is a personal defense which can only be asserted by the party who can thereby waive it by Rule 3, Section 7 of the 1997 Rules of Court states:
silence."39 SEC. 7. Compulsory joinder of indispensable parties. – Parties-in-interest without whom no final
determination can be had of an action shall be joined either as plaintiffs or defendants.
2. Jurisdiction over the person of a defendant is acquired through a valid service of summons; trial
court did not acquire jurisdiction over the person of Manuel Toledo An indispensable party is one who has such an interest in the controversy or subject matter of a case
that a final adjudication cannot be made in his or her absence, without injuring or affecting that interest. He or
In the first place, jurisdiction over the person of Manuel was never acquired by the trial court. A she is a party who has not only an interest in the subject matter of the controversy, but "an interest of such
defendant is informed of a case against him when he receives summons. "Summons is a writ by which the nature that a final decree cannot be made without affecting that interest or leaving the controversy in such a
defendant is notified of the action brought against him. Service of such writ is the means by which the court condition that its final determination may be wholly inconsistent with equity and good conscience. It has also
acquires jurisdiction over his person."40 been considered that an indispensable party is a person in whose absence there cannot be a determination
between the parties already before the court which is effective, complete or equitable." Further, an
In the case at bar, the trial court did not acquire jurisdiction over the person of Manuel since there indispensable party is one who must be included in an action before it may properly proceed.44
was no valid service of summons upon him, precisely because he was already dead even before the complaint
against him and his wife was filed in the trial court. The issues presented in this case are similar to those in the On the other hand, a "person is not an indispensable party if his interest in the controversy or subject
case of Sarsaba v. Vda. de Te.41 matter is separable from the interest of the other parties, so that it will not necessarily be directly or injuriously
affected by a decree which does complete justice between them. Also, a person is not an indispensable party if
In Sarsaba, the NLRC rendered a decision declaring that Patricio Sereno was illegally dismissed his presence would merely permit complete relief between him or her and those already parties to the action, or
from employment and ordering the payment of his monetary claims. To satisfy the claim, a truck in the if he or she has no interest in the subject matter of the action." It is not a sufficient reason to declare a person to
possession of Sereno’s employer was levied upon by a sheriff of the NLRC, accompanied by Sereno and his be an indispensable party simply because his or her presence will avoid multiple litigations.
lawyer, Rogelio Sarsaba, the petitioner in that case. A complaint for recovery of motor vehicle and damages,
with prayer for the delivery of the truck pendente lite was eventually filed against Sarsaba, Sereno, the NLRC Applying the foregoing pronouncements to the case at bar, it is clear that the estate of Manuel is not
sheriff and the NLRC by the registered owner of the truck. After his motion to dismiss was denied by the trial an indispensable party to the collection case, for the simple reason that the obligation of Manuel and his wife,
court, petitioner Sarsaba filed his answer. Later on, however, he filed an omnibus motion to dismiss citing, as respondent herein, is solidary.
one of the grounds, lack of jurisdiction over one of the principal defendants, in view of the fact that Sereno
was already dead when the complaint for recovery of possession was filed. The contract between petitioner, on the one hand and respondent and respondent’s husband, on the
other, states:
Although the factual milieu of the present case is not exactly similar to that of Sarsaba, one of the
issues submitted for resolution in both cases is similar: whether or not a case, where one of the named FOR VALUE RECEIVED, I/We jointly and severally46 (in solemn) promise to pay BOSTON
defendants was already dead at the time of its filing, should be dismissed so that the claim may be pursued EQUITY RESOURCES, INC. x x x the sum of PESOS: [ONE MILLION FOUR HUNDRED
instead in the proceedings for the settlement of the estate of the deceased defendant. The petitioner in the (₱1,400,000.00)] x x x.47
Sarsaba Case claimed, as did respondent herein, that since one of the defendants died before summons was
The provisions and stipulations of the contract were then followed by the respective signatures of
served on him, the trial court should have dismissed the complaint against all the defendants and the claim
should be filed against the estate of the deceased defendant. The petitioner in Sarsaba, therefore, prayed that respondent as "MAKER" and her husband as "CO-MAKER." 48 Thus, pursuant to Article 1216 of the Civil
Code, petitioner may collect the entire amount of the obligation from respondent only. The aforementioned
the complaint be dismissed, not only against Sereno, but as to all the defendants, considering that the RTC did
not acquire jurisdiction over the person of Sereno. 42 This is exactly the same prayer made by respondent herein provision states: "The creditor may proceed against any one of the solidary debtors or some or all of them
simultaneously. The demand made against one of them shall not be an obstacle to those which may
in her motion to dismiss.
subsequently be directed against the others, so long as the debt has not been fully collected."
The Court, in the Sarsaba Case, resolved the issue in this wise:
In other words, the collection case can proceed and the demands of petitioner can be satisfied by
x x x We cannot countenance petitioner’s argument that the complaint against the other defendants respondent only, even without impleading the estate of Manuel. Consequently, the estate of Manuel is not an
should have been dismissed, considering that the RTC never acquired jurisdiction over the person of Sereno. indispensable party to petitioner’s complaint for sum of money.
 However, the Court of Appeals, agreeing with the contention of respondent, held that the claim of the solidary debtors. Such a construction is not sanctioned by principle, which is too well settled to require
petitioner should have been filed against the estate of Manuel in accordance with Sections 5 and 6 of Rule 86 citation, that a substantive law cannot be amended by a procedural rule. Otherwise stated, Section 6, Rule 86
of the Rules of Court. The aforementioned provisions provide: of the Revised Rules of Court cannot be made to prevail over Article 1216 of the New Civil Code, the former
being merely procedural, while the latter, substantive.
SEC. 5. Claims which must be filed under the notice. If not filed, barred; exceptions. All claims for
money against the decedent, arising from contract, express or implied, whether the same be due, not due, or Based on the foregoing, the estate of Manuel is not an indispensable party and the case can proceed
contingent, all claims for funeral expenses and judgment for money against the decedent, must be filed within as against respondent only. That petitioner opted to collect from respondent and not from the estate of Manuel
the time limited in the notice; otherwise, they are barred forever, except that they may be set forth as is evidenced by its opposition to respondent’s motion to dismiss asserting that the case, as against her, should
counterclaims in any action that the executor or administrator may bring against the claimants. x x x. be dismissed so that petitioner can proceed against the estate of Manuel

SEC. 6. Solidary obligation of decedent. Where the obligation of the decedent is solidary with On whether or not the inclusion of Manuel as party defendant is a misjoinder of party
another debtor, the claim shall be filed against the decedent as if he were the only debtor, without prejudice to
the right of the estate to recover contribution from the other debtor. x x x. Section 11 of Rule 3 of the Rules of Court states that "neither misjoinder nor non-joinder of parties
is ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any
The Court of Appeals erred in its interpretation of the above-quoted provisions. party or on its own initiative at any stage of the action and on such terms as are just. Any claim against a
misjoined party may be severed and proceeded with separately."
In construing Section 6, Rule 87 of the old Rules of Court, the precursor of Section 6, Rule 86 of the
Revised Rules of Court, which latter provision has been retained in the present Rules of Court without any Based on the last sentence of the afore-quoted provision of law, a misjoined party must have the
revisions, the Supreme Court, in the case of Manila Surety & Fidelity Co., Inc. v. Villarama, et. al., held: capacity to sue or be sued in the event that the claim by or against the misjoined party is pursued in a separate
case. In this case, therefore, the inclusion of Manuel in the complaint cannot be considered a misjoinder, as in
Construing Section 698 of the Code of Civil Procedure from whence [Section 6, Rule 87] was taken, fact, the action would have proceeded against him had he been alive at the time the collection case was filed by
this Court held that where two persons are bound in solidum for the same debt and one of them dies, the whole petitioner. This being the case, the remedy provided by Section 11 of Rule 3 does not obtain here. The name of
indebtedness can be proved against the estate of the latter, the decedent’s liability being absolute and primary; Manuel as party-defendant cannot simply be dropped from the case. Instead, the procedure taken by the Court
x x x. It is evident from the foregoing that Section 6 of Rule 87 provides the procedure should the creditor in Sarsaba v. Vda. de Te,52 whose facts, as mentioned earlier, resemble those of this case, should be followed
desire to go against the deceased debtor, but there is certainly nothing in the said provision making compliance herein. There, the Supreme Court agreed with the trial court when it resolved the issue of jurisdiction over the
with such procedure a condition precedent before an ordinary action against the surviving solidary debtors, person of the deceased Sereno in this wise:
should the creditor choose to demand payment from the latter, could be entertained to the extent that failure to
observe the same would deprive the court jurisdiction to take cognizance of the action against the surviving As correctly pointed by defendants, the Honorable Court has not acquired jurisdiction over the
debtors. Upon the other hand, the Civil Code expressly allows the creditor to proceed against any one of the person of Patricio Sereno since there was indeed no valid service of summons insofar as Patricio Sereno is
solidary debtors or some or all of them simultaneously. There is, therefore, nothing improper in the creditor’s concerned. Patricio Sereno died before the summons, together with a copy of the complaint and its annexes,
filing of an action against the surviving solidary debtors alone, instead of instituting a proceeding for the could be served upon him.
settlement of the estate of the deceased debtor wherein his claim could be filed.
However, the failure to effect service of summons unto Patricio Sereno, one of the defendants
The foregoing ruling was reiterated and expounded in the later case of Philippine National Bank v. herein, does not render the action DISMISSIBLE, considering that the three (3) other defendants, x x x, were
Asuncion51 where the Supreme Court pronounced: validly served with summons and the case with respect to the answering defendants may still proceed
independently. Be it recalled that the three (3) answering defendants have previously filed a Motion to Dismiss
A cursory perusal of Section 6, Rule 86 of the Revised Rules of Court reveals that nothing therein the Complaint which was denied by the Court.
prevents a creditor from proceeding against the surviving solidary debtors. Said provision merely sets up the
procedure in enforcing collection in case a creditor chooses to pursue his claim against the estate of the Hence, only the case against Patricio Sereno will be DISMISSED and the same may be filed as a
deceased solidary debtor. The rule has been set forth that a creditor (in a solidary obligation) has the option claim against the estate of Patricio Sereno, but the case with respect to the three (3) other accused [sic] will
whether to file or not to file a claim against the estate of the solidary debtor. x x x proceed. (Emphasis supplied.)

It is crystal clear that Article 1216 of the New Civil Code is the applicable provision in this matter. As a result, the case, as against Manuel, must be dismissed.
Said provision gives the creditor the right to "proceed against anyone of the solidary debtors or some or all of
them simultaneously." The choice is undoubtedly left to the solidary creditor to determine against whom he In addition, the dismissal of the case against Manuel is further warranted by Section 1 of Rule 3 of the Rules of
will enforce collection. In case of the death of one of the solidary debtors, he (the creditor) may, if he so Court, which states that: only natural or juridical persons, or entities authorized by law may be parties in a civil
chooses, proceed against the surviving solidary debtors without necessity of filing a claim in the estate of the action." Applying this provision of law, the Court, in the case of Ventura v. Militante, held:
deceased debtors. It is not mandatory for him to have the case dismissed as against the surviving debtors and
file its claim against the estate of the deceased solidary debtor, x x x. For to require the creditor to proceed Parties may be either plaintiffs or defendants. x x x. In order to maintain an action in a court of
against the estate, making it a condition precedent for any collection action against the surviving debtors to justice, the plaintiff must have an actual legal existence, that is, he, she or it must be a person in law and
prosper, would deprive him of his substantive rightsprovided by Article 1216 of the New Civil Code. possessed of a legal entity as either a natural or an artificial person, and no suit can be lawfully prosecuted save
(Emphasis supplied.) in the name of such a person.

As correctly argued by petitioner, if Section 6, Rule 86 of the Revised Rules of Court were applied The rule is no different as regards party defendants. It is incumbent upon a plaintiff, when he
literally, Article 1216 of the New Civil Code would, in effect, be repealed since under the Rules of Court, institutes a judicial proceeding, to name the proper party defendant to his cause of action. In a suit or
petitioner has no choice but to proceed against the estate of [the deceased debtor] only. Obviously, this proceeding in personam of an adversary character, the court can acquire no jurisdiction for the purpose of trial
provision diminishes the [creditor’s] right under the New Civil Code to proceed against any one, some or all of or judgment until a party defendant who actually or legally exists and is legally capable of being sued, is
brought before it. It has even been held that the question of the legal personality of a party defendant is a On July 19, 1948 — barely one month after the effectivity of Republic Act No. 296 known as the
question of substance going to the jurisdiction of the court and not one of procedure. Judiciary Act of 1948 — the spouses Serafin Tijam and Felicitas Tagalog commenced Civil Case No. R-660 in
the Court of First Instance of Cebu against the spouses Magdaleno Sibonghanoy and Lucia Baguio to recover
The original complaint of petitioner named the "estate of Carlos Ngo as represented by surviving from them the sum of P1,908.00, with legal interest thereon from the date of the filing of the complaint until
spouse Ms. Sulpicia Ventura" as the defendant. Petitioner moved to dismiss the same on the ground that the the whole obligation is paid, plus costs. As prayed for in the complaint, a writ of attachment was issued by the
defendant as named in the complaint had no legal personality. We agree. court against defendants' properties, but the same was soon dissolved upon the filing of a counter-bond by
defendants and the Manila Surety and Fidelity Co., Inc. hereinafter referred to as the Surety, on the 31st of the
x x x. Considering that capacity to be sued is a correlative of the capacity to sue, to the same extent, a decedent same month.
does not have the capacity to be sued and may not be named a party defendant in a court action. (Emphases After being duly served with summons the defendants filed their answer in which, after making
supplied.) some admissions and denials of the material averments of the complaint, they interposed a counterclaim. This
counterclaim was answered by the plaintiffs.
Indeed, where the defendant is neither a natural nor a juridical person or an entity authorized by law,
the complaint may be dismissed on the ground that the pleading asserting the claim states no cause of action or After trial upon the issues thus joined, the Court rendered judgment in favor of the plaintiffs and,
for failure to state a cause of action pursuant to Section 1(g) of Rule 16 of the Rules of Court, because a after the same had become final and executory, upon motion of the latter, the Court issued a writ of execution
complaint cannot possibly state a cause of action against one who cannot be a party to a civil action.55 against the defendants. The writ having been returned unsatisfied, the plaintiffs moved for the issuance of a
writ of execution against the Surety's bond (Rec. on Appeal, pp. 46-49), against which the Surety filed a
Since the proper course of action against the wrongful inclusion of Manuel as party-defendant is the
written opposition (Id. pp. 49) upon two grounds, namely, (1) Failure to prosecute and (2) Absence of a
dismissal of the case as against him, thus did the trial court err when it ordered the substitution of Manuel by
demand upon the Surety for the payment of the amount due under the judgment. Upon these grounds the
his heirs. Substitution is proper only where the party to be substituted died during the pendency of the case, as
Surety prayed the Court not only to deny the motion for execution against its counter-bond but also the
expressly provided for by Section 16, Rule 3 of the Rules of Court, which states:
following affirmative relief : "to relieve the herein bonding company of its liability, if any, under the bond in
Death of party;duty of counsel. – Whenever a party to a pending action dies, and the claim is not question" (Id. p. 54) The Court denied this motion on the ground solely that no previous demand had been
thereby extinguished, it shall be the duty of his counsel to inform the court within thirty (30) days after such made on the Surety for the satisfaction of the judgment. Thereafter the necessary demand was made, and upon
death of the fact thereof, and to give the name and address of his legal representative or representatives. x x x failure of the Surety to satisfy the judgment, the plaintiffs filed a second motion for execution against the
counterbond. On the date set for the hearing thereon, the Court, upon motion of the Surety's counsel, granted
The heirs of the deceased may be allowed to be substituted for the deceased, without requiring the the latter a period of five days within which to answer the motion. Upon its failure to file such answer, the
appointment of an executor or administrator x x x. Court granted the motion for execution and the corresponding writ was issued.

The court shall forthwith order said legal representative or representatives to appear and be Subsequently, the Surety moved to quash the writ on the ground that the same was issued without
substituted within a period of thirty (30) days from notice. (Emphasis supplied.) the required summary hearing provided for in Section 17 of Rule 59 of the Rules of Court. As the Court denied
the motion, the Surety appealed to the Court of Appeals from such order of denial and from the one denying its
Here, since Manuel was already dead at the time of the filing of the complaint, the court never motion for reconsideration (Id. p. 97). Its record on appeal was then printed as required by the Rules, and in
acquired jurisdiction over his person and, in effect, there was no party to be substituted. due time it filed its brief raising therein no other question but the ones covered by the following assignment of
errors:
WHEREFORE, the petition is GRANTED. The Decision dated 28 February 2006 and the
Resolution dated 1 August 2006 of the Court of Appeals in CA-G.R. SP No. 88586 are REVERSED and SET I. That the Honorable Court a quo erred in issuing its order dated November 2, 1957, by holding the
ASIDE. The Orders of the Regional Trial Court dated 8 November 2004 and 22 December 2004, respectively, incident as submitted for resolution, without a summary hearing and compliance with the other
in Civil Case No. 97-86672, are REINSTATED. The Regional Trial Court, Branch 24, Manila is hereby mandatory requirements provided for in Section 17, Rule 59 of the Rules of Court.
DIRECTED to proceed with the trial of Civil Case No. 97-86672 against respondent Lolita G. Toledo only, in
accordance with the above pronouncements of the Court, and to decide the case with dispatch.. SO II. That the Honorable Court a quo erred in ordering the issuance of execution against the herein
ORDERED. bonding company-appellant.

III. That the Honorable Court a quo erred in denying the motion to quash the writ of execution filed
by the herein bonding company-appellant as well as its subsequent motion for reconsideration,
Jurisdiction by estoppel and/or in not quashing or setting aside the writ of execution.

G.R. No. L-21450             April 15, 1968 Not one of the assignment of errors — it is obvious — raises the question of lack of jurisdiction,
SERAFIN TIJAM, ET AL., plaintiffs-appellees, vs. neither directly nor indirectly.Although the appellees failed to file their brief, the Court of Appeals, on
MAGDALENO SIBONGHANOY alias GAVINO SIBONGHANOY and LUCIA BAGUIO, defendants, December 11, 1962, decided the case affirming the orders appealed from.
MANILA SURETY AND FIDELITY CO., INC. (CEBU BRANCH) bonding company and defendant-
appellant. On January 8, 1963 — five days after the Surety received notice of the decision, it filed a motion
F. S. Urot and G. A. Uriate for plaintiffs-appellees. Carlos J. Cuizon for defendants Gavino Sibonghanoy and asking for extension of time within which to file a motion for reconsideration. The Court of Appeals granted
Lucia Baguio. Villaluz Law Office, Velasco Law Office, Pages and Soberano for defendant-appellant Manilla the motion in its resolution of January 10 of the same year. Two days later the Surety filed a pleading entitled
Surety and Fidelity Company, Inc. MOTION TO DISMISS, alleging substantially that appellees action was filed in the Court of First Instance of
Cebu on July 19, 1948 for the recovery of the sum of P1,908.00 only; that a month before that date Republic
DIZON, J.: Act No. 296, otherwise known as the Judiciary Act of 1948, had already become effective, Section 88 of
which placed within the original exclusive jurisdiction of inferior courts all civil actions where the value of the
subject-matter or the amount of the demand does not exceed P2,000.00, exclusive of interest and costs; that the Upon the filing of the first motion for execution against the counter-bond the Surety not only filed a
Court of First Instance therefore had no jurisdiction to try and decide the case. Upon these premises the written opposition thereto praying for its denial but also asked for an additional affirmative relief — that it be
Surety's motion prayed the Court of Appeals to set aside its decision and to dismiss the case. By resolution of relieved of its liability under the counter-bond upon the grounds relied upon in support of its opposition —
January 16, 1963 the Court of Appeals required the appellees to answer the motion to dismiss, but they failed lack of jurisdiction of the court a quo not being one of them.
to do so. Whereupon, on May 20 of the same year, the Court resolved to set aside its decision and to certify the
case to Us. The pertinent portions of its resolution read as follows: Then, at the hearing on the second motion for execution against the counter-bond, the Surety
appeared, through counsel, to ask for time within which to file an answer or opposition thereto. This motion
It would indeed appear from the record that the action at bar, which is a suit for collection of money was granted, but instead of such answer or opposition, the Surety filed the motion to dismiss mentioned
in the sum of exactly P1,908.00 exclusive of interest, was originally instituted in the Court of First heretofore.
Instance of Cebu on July 19, 1948. But about a month prior to the filing of the complaint, more
specifically on June 17, 1948, the Judiciary Act of 1948 took effect, depriving the Court of First A party may be estopped or barred from raising a question in different ways and for different
Instance of original jurisdiction over cases in which the demand, exclusive of interest, is not more reasons. Thus we speak of estoppel in pais, or estoppel by deed or by record, and of estoppel by laches.
than P2,000.00. (Secs. 44[c] and 86[b], R.A. No. 296.)
Laches, in a general sense is failure or neglect, for an unreasonable and unexplained length of time,
We believe, therefore, that the point raised in appellant's motion is an important one which merits to do that which, by exercising due diligence, could or should have been done earlier; it is negligence or
serious consideration. As stated, the complaint was filed on July 19, 1948. This case therefore has omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it
been pending now for almost 15 years, and throughout the entire proceeding appellant never raised either has abandoned it or declined to assert it.
the question of jurisdiction until after receipt of this Court's adverse decision.
The doctrine of laches or of "stale demands" is based upon grounds of public policy which requires,
There are three cases decided by the Honorable Supreme Court which may be worthy of for the peace of society, the discouragement of stale claims and, unlike the statute of limitations, is not a mere
consideration in connection with this case, namely: Tyson Tan, et al. vs. Filipinas Compañia de question of time but is principally a question of the inequity or unfairness of permitting a right or claim to be
Seguros, et al., G.R. No. L-10096, March 23, 1956; Pindangan Agricultural Co., Inc. vs. Jose P. enforced or asserted.
Dans, etc., et al., G.R. No. L-14591, September 26, 1962; and Alfredo Montelibano, et al. vs.
Bacolod-Murcia Milling Co., Inc., G.R. No. L-15092, September 29, 1962, wherein the Honorable It has been held that a party can not invoke the jurisdiction of a court to sure affirmative relief
Supreme Court frowned upon the 'undesirable practice' of appellants submitting their case for against his opponent and, after obtaining or failing to obtain such relief, repudiate or question that same
decision and then accepting the judgment, if favorable, but attacking it for lack of jurisdiction when jurisdiction (Dean vs. Dean, 136 Or. 694, 86 A.L.R. 79). In the case just cited, by way of explaining the rule, it
adverse. was further said that the question whether the court had jurisdiction either of the subject-matter of the action or
of the parties was not important in such cases because the party is barred from such conduct not because the
Considering, however, that the Supreme Court has the "exclusive" appellate jurisdiction over "all judgment or order of the court is valid and conclusive as an adjudication, but for the reason that such a
cases in which the jurisdiction of any inferior court is in issue" (See. 1, Par. 3[3], Judiciary Act of practice can not be tolerated — obviously for reasons of public policy.
1948, as amended), we have no choice but to certify, as we hereby do certify, this case to the
Supreme Court. Furthermore, it has also been held that after voluntarily submitting a cause and encountering an
adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of the court
ACCORDINGLY, pursuant to Section 31 of the Judiciary Act of 1948 as amended, let the record of (Pease vs. Rathbun-Jones etc., 243 U.S. 273, 61 L. Ed. 715, 37 S. Ct. 283; St. Louis etc. vs. McBride, 141 U.S.
this case be forwarded to the Supreme Court. 127, 35 L. Ed. 659). And in Littleton vs. Burgess, 16 Wyo. 58, the Court said that it is not right for a party who
has affirmed and invoked the jurisdiction of a court in a particular matter to secure an affirmative relief, to
It is an undisputed fact that the action commenced by appellees in the Court of First Instance of afterwards deny that same jurisdiction to escape a penalty.
Cebu against the Sibonghanoy spouses was for the recovery of the sum of P1,908.00 only — an amount within
the original exclusive jurisdiction of inferior courts in accordance with the provisions of the Judiciary Act of Upon this same principle is what We said in the three cases mentioned in the resolution of the Court
1948 which had taken effect about a month prior to the date when the action was commenced. True also is the of Appeals of May 20, 1963 (supra) — to the effect that we frown upon the "undesirable practice" of a party
rule that jurisdiction over the subject matter is conferred upon the courts exclusively by law, and as the lack of submitting his case for decision and then accepting the judgment, only if favorable, and attacking it for lack of
it affects the very authority of the court to take cognizance of the case, the objection may be raised at any stage jurisdiction, when adverse — as well as in Pindañgan etc. vs. Dans, et al., G.R. L-14591, September 26,
of the proceedings. However, considering the facts and circumstances of the present case — which shall 1962; Montelibano, et al., vs. Bacolod-Murcia Milling Co., Inc., G.R. L-15092; Young Men Labor Union etc.
forthwith be set forth — We are of the opinion that the Surety is now barred by laches from invoking this plea vs. The Court of Industrial Relation et al., G.R. L-20307, Feb. 26, 1965, and Mejia vs. Lucas, 100 Phil. p. 277.
at this late hour for the purpose of annuling everything done heretofore in the case with its active participation.
The facts of this case show that from the time the Surety became a quasi-party on July 31, 1948, it
As already stated, the action was commenced in the Court of First Instance of Cebu on July 19, could have raised the question of the lack of jurisdiction of the Court of First Instance of Cebu to take
1948, that is, almost fifteen years before the Surety filed its motion to dismiss on January 12, 1963 raising the cognizance of the present action by reason of the sum of money involved which, according to the law then in
question of lack of jurisdiction for the first time. force, was within the original exclusive jurisdiction of inferior courts. It failed to do so. Instead, at several
stages of the proceedings in the court a quo as well as in the Court of Appeals, it invoked the jurisdiction of
It must be remembered that although the action, originally, was exclusively against the Sibonghanoy said courts to obtain affirmative relief and submitted its case for a final adjudication on the merits. It was only
spouses the Surety became a quasi-party therein since July 31, 1948 when it filed a counter-bond for the after an adverse decision was rendered by the Court of Appeals that it finally woke up to raise the question of
dissolution of the writ of attachment issued by the court of origin (Record on Appeal, pp. 15-19). Since then, it jurisdiction. Were we to sanction such conduct on its part, We would in effect be declaring as useless all the
acquired certain rights and assumed specific obligations in connection with the pending case, in accordance proceedings had in the present case since it was commenced on July 19, 1948 and compel the judgment
with sections 12 and 17, Rule 57, Rules of Court (Bautista vs. Joaquin, 46 Phil. 885; Kimpang & Co. vs. creditors to go up their Calvary once more. The inequity and unfairness of this is not only patent but revolting.
Javier, 65 Phil. 170). Coming now to the merits of the appeal: after going over the entire record, We have become persuaded that
We can do nothing better than to quote in toto, with approval, the decision rendered by the Court of Appeals given pursuant to the provisions of this role to secure the payment of the judgment shall
on December 11, 1962 as follows: become finally charged on such bond, and bound to pay to the plaintiff upon demand the
amount due under the judgment, which amount may be recovered from such surety or
In Civil Case No. R-660 of the Court of First Instance of Cebu, which was a suit for collection of a sureties after notice and summary hearing in the same action." (Emphasis ours)
sum of money, a writ of attachment was issued against defendants' properties. The attachment,
however, was subsequently discharged under Section 12 of Rule 59 upon the filing by defendants of Summary hearing is "not intended to be carried on in the formal manner in which
a bond subscribed by Manila Surety & Fidelity Co., Inc. ordinary actions are prosecuted" (83 C.J.S. 792). It is, rather, a procedure by which a question is
resolved "with dispatch, with the least possible delay, and in preference to ordinary legal and regular
After trial, judgment was rendered in favor of plaintiffs. judicial proceedings" (Ibid, p. 790). What is essential is that "the defendant is notified or summoned
to appear and is given an opportunity to hear what is urged upon him, and to interpose a defense,
The writ of execution against defendants having been returned totally unsatisfied, plaintiffs moved, after which follows an adjudication of the rights of the parties" (Ibid., pp. 793-794); and as to the
under Section 17 of Rule 59, for issuance of writ of execution against Manila Surety & Fidelity Co., Inc. to extent and latitude of the hearing, the same will naturally lie upon the discretion of the court,
enforce the obligation of the bond. But the motion was, upon the surety's opposition, denied on the ground that depending upon the attending circumstances and the nature of the incident up for consideration.
there was "no showing that a demand had been made, by the plaintiffs to the bonding company for payment of
the amount due under the judgment" (Record on Appeal, p. 60). In the case at bar, the surety had been notified of the plaintiffs' motion for execution and
of the date when the same would be submitted for consideration. In fact, the surety's counsel was
Hence, plaintiffs made the necessary demand upon the surety for satisfaction of the judgment, and present in court when the motion was called, and it was upon his request that the court a quo gave
upon the latter's failure to pay the amount due, plaintiffs again filed a motion dated October 31, 1957, for him a period of four days within which to file an answer. Yet he allowed that period to lapse without
issuance of writ of execution against the surety, with notice of hearing on November 2, 1957. On October 31, filing an answer or objection. The surety cannot now, therefore, complain that it was deprived of its
1957, the surety received copy of said motion and notice of hearing. day in court.
It appears that when the motion was called on November 2, 1957, the surety's counsel asked that he It is argued that the surety's counsel did not file an answer to the motion "for the simple
be given time within which to answer the motion, and so an order was issued in open court, as follows: reason that all its defenses can be set up during the hearing of the motion even if the same are not
reduced to writing" (Appellant's brief, p. 4). There is obviously no merit in this pretense because, as
As prayed for, Atty. Jose P. Soberano, Jr., counsel for the Manila Surety & Fidelity Co., Inc., Cebu
stated above, the record will show that when the motion was called, what the surety's counsel did
Branch, is given until Wednesday, November 6, 1957, to file his answer to the motion for the issuance of a writ
was to ask that he be allowed and given time to file an answer. Moreover, it was stated in the order
of execution dated October 30, 1957 of the plaintiffs, after which this incident shall be deemed submitted for
given in open court upon request of the surety's counsel that after the four-day period within which
resolution.SO ORDERED.
to file an answer, "the incident shall be deemed submitted for resolution"; and counsel apparently
Given in open court, this 2nd day of November, 1957, at Cebu City, Philippines. agreed, as the order was issued upon his instance and he interposed no objection thereto.

(Sgd.) JOSE M. MENDOZA It is also urged that although according to Section 17 of Rule 59, supra, there is no need for a
Judge (Record on Appeal, pp. separate action, there must, however, be a separate judgment against the surety in order to hold it
64-65, emphasis ours) liable on the bond (Appellant's Brief, p. 15). Not so, in our opinion. A bond filed for discharge of
attachment is, per Section 12 of Rule 59, "to secure the payment to the plaintiff of any judgment he
Since the surety's counsel failed to file any answer or objection within the period given him, the may recover in the action," and stands "in place of the property so released". Hence, after the
court, on December 7, 1957, issued an order granting plaintiffs' motion for execution against the surety; and on judgment for the plaintiff has become executory and the execution is "returned unsatisfied" (Sec. 17,
December 12, 1957, the corresponding writ of execution was issued. Rule 59), as in this case, the liability of the bond automatically attaches and, in failure of the surety
to satisfy the judgment against the defendant despite demand therefor, writ of execution may issue
On December 24, 1957, the surety filed a motion to quash the writ of execution on the ground that against the surety to enforce the obligation of the bond.
the same was "issued without the requirements of Section 17, Rule 59 of the Rules of Court having been
complied with," more specifically, that the same was issued without the required "summary hearing". This UPON ALL THE FOREGOING, the orders appealed from are hereby affirmed, with costs against the
motion was denied by order of February 10, 1958. appellant Manila Surety and Fidelity Company, Inc.

On February 25, 1958, the surety filed a motion for reconsideration of the above-stated order of
denial; which motion was likewise denied by order of March 26, 1958.

From the above-stated orders of February 10, 1958 and March 26, 1958 — denying the surety's motion to
quash the writ of execution and motion for reconsideration, respectively — the surety has interposed the G.R. No. 147406               July 14, 2008
appeal on hand. VENANCIO FIGUEROA y CERVANTES, Petitioner, vs. PEOPLE OF THE
PHILIPPINES, Respondent.
The surety insists that the lower court should have granted its motion to quash the writ of NACHURA, J.:
execution because the same was issued without the summary hearing required by Section 17 of Rule
59, which reads; When is a litigant estopped by laches from assailing the jurisdiction of a tribunal? This is the paramount issue
raised in this petition for review of the February 28, 2001 Decision of the Court of Appeals (CA) in CA-G.R.
"Sec. 17. When execution returned unsatisfied, recovery had upon bond. — If the CR No. 22697.
execution be returned unsatisfied in whole or in part, the surety or sureties on any bond
Pertinent are the following antecedent facts and proceedings:
On July 8, 1994, an information for reckless imprudence resulting in homicide was filed against the petitioner the civil liability arising from such offenses or predicated thereon, irrespective of kind, nature, value or amount
before the Regional Trial Court (RTC) of Bulacan, Branch 18. The case was docketed as Criminal Case No. thereof: Provided, however, That in offenses involving damage to property through criminal negligence, they
2235-M-94. Trial on the merits ensued and on August 19, 1998, the trial court convicted the petitioner as shall have exclusive original jurisdiction thereof.
charged. In his appeal before the CA, the petitioner questioned, among others, for the first time, the trial
court’s jurisdiction. As the imposable penalty for the crime charged herein is prision correccional in its medium and maximum
periods or imprisonment for 2 years, 4 months and 1 day to 6 years, jurisdiction to hear and try the same is
The appellate court, however, in the challenged decision, considered the petitioner to have actively conferred on the Municipal Trial Courts (MTCs). Clearly, therefore, the RTC of Bulacan does not have
participated in the trial and to have belatedly attacked the jurisdiction of the RTC; thus, he was already jurisdiction over Criminal Case No. 2235-M-94.
estopped by laches from asserting the trial court’s lack of jurisdiction. Finding no other ground to reverse the
trial court’s decision, the CA affirmed the petitioner’s conviction but modified the penalty imposed and the While both the appellate court and the Solicitor General acknowledge this fact, they nevertheless are of the
damages awarded. position that the principle of estoppel by laches has already precluded the petitioner from questioning the
jurisdiction of the RTC—the trial went on for 4 years with the petitioner actively participating therein and
Dissatisfied, the petitioner filed the instant petition for review on certiorari raising the following issues for our without him ever raising the jurisdictional infirmity. The petitioner, for his part, counters that the lack of
resolution: jurisdiction of a court over the subject matter may be raised at any time even for the first time on appeal. As
undue delay is further absent herein, the principle of laches will not be applicable.
a. Does the fact that the petitioner failed to raise the issue of jurisdiction during the trial of this case,
which was initiated and filed by the public prosecutor before the wrong court, constitute laches in To settle once and for all this problem of jurisdiction vis-à-vis estoppel by laches, which continuously
relation to the doctrine laid down in Tijam v. Sibonghanoy, notwithstanding the fact that said issue confounds the bench and the bar, we shall analyze the various Court decisions on the matter.
was immediately raised in petitioner’s appeal to the Honorable Court of Appeals? Conversely, does
the active participation of the petitioner in the trial of his case, which is initiated and filed not by As early as 1901, this Court has declared that unless jurisdiction has been conferred by some legislative act, no
him but by the public prosecutor, amount to estoppel? court or tribunal can act on a matter submitted to it We went on to state in U.S. v. De La Santa15 that:

b. Does the admission of the petitioner that it is difficult to immediately stop a bus while it is It has been frequently held that a lack of jurisdiction over the subject-matter is fatal, and subject to objection at
running at 40 kilometers per hour for the purpose of avoiding a person who unexpectedly crossed any stage of the proceedings, either in the court below or on appeal (Ency. of Pl. & Pr., vol. 12, p. 189, and
the road, constitute enough incriminating evidence to warrant his conviction for the crime charged? large array of cases there cited), and indeed, where the subject-matter is not within the jurisdiction, the court
may dismiss the proceeding ex mero motu. (4 Ill., 133; 190 Ind., 79; Chipman vs. Waterbury, 59 Conn., 496.)
c. Is the Honorable Court of Appeals justified in considering the place of accident as falling within
Item 4 of Section 35 (b) of the Land Transportation and Traffic Code, and subsequently ruling that Jurisdiction over the subject-matter in a judicial proceeding is conferred by the sovereign authority which
the speed limit thereto is only 20 kilometers per hour, when no evidence whatsoever to that effect organizes the court; it is given only by law and in the manner prescribed by law and an objection based on the
was ever presented by the prosecution during the trial of this case? lack of such jurisdiction cannot be waived by the parties. x x x

d. Is the Honorable Court of Appeals justified in convicting the petitioner for homicide through Later, in People v. Casiano, the Court explained:
reckless imprudence (the legally correct designation is "reckless imprudence resulting to
homicide") with violation of the Land Transportation and Traffic Code when the prosecution did not 4. The operation of the principle of estoppel on the question of jurisdiction seemingly depends upon
prove this during the trial and, more importantly, the information filed against the petitioner does whether the lower court actually had jurisdiction or not. If it had no jurisdiction, but the case was tried and
not contain an allegation to that effect? decided upon the theory that it had jurisdiction, the parties are not barred, on appeal, from assailing such
jurisdiction, for the same "must exist as a matter of law, and may not be conferred by consent of the parties or
e. Does the uncontroverted testimony of the defense witness Leonardo Hernal that the victim by estoppel" (5 C.J.S., 861-863). However, if the lower court had jurisdiction, and the case was heard and
unexpectedly crossed the road resulting in him getting hit by the bus driven by the petitioner not decided upon a given theory, such, for instance, as that the court had no jurisdiction, the party who induced it
enough evidence to acquit him of the crime charged? to adopt such theory will not be permitted, on appeal, to assume an inconsistent position—that the lower court
had jurisdiction. Here, the principle of estoppel applies. The rule that jurisdiction is conferred by law, and does
Applied uniformly is the familiar rule that the jurisdiction of the court to hear and decide a case is conferred by not depend upon the will of the parties, has no bearing thereon. Thus, Corpus Juris Secundum says:
the law in force at the time of the institution of the action, unless such statute provides for a retroactive
application thereof. In this case, at the time the criminal information for reckless imprudence resulting in Where accused has secured a decision that the indictment is void, or has been granted an instruction based on
homicide with violation of the Automobile Law (now Land Transportation and Traffic Code) was filed, its defective character directing the jury to acquit, he is estopped, when subsequently indicted, to assert that the
Section 32(2) of Batas Pambansa (B.P.) Blg. 129 had already been amended by Republic Act No. 7691. The former indictment was valid. In such case, there may be a new prosecution whether the indictment in the
said provision thus reads: former prosecution was good or bad. Similarly, where, after the jury was impaneled and sworn, the court on
accused's motion quashed the information on the erroneous assumption that the court had no jurisdiction,
Sec. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts accused cannot successfully plead former jeopardy to a new information. x x x (22 C.J.S., sec. 252, pp. 388-
in Criminal Cases.—Except in cases falling within the exclusive original jurisdiction of Regional Trial Courts 389; italics ours.)
and the Sandiganbayan, the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts shall exercise: Where accused procured a prior conviction to be set aside on the ground that the court was without
jurisdiction, he is estopped subsequently to assert, in support of a defense of previous jeopardy, that such court
xxxx had jurisdiction." (22 C.J.S. p. 378.)

(2) Exclusive original jurisdiction over all offenses punishable with imprisonment not exceeding six (6) years But in Pindañgan Agricultural Co., Inc. v. Dans, the Court, in not sustaining the plea of lack of jurisdiction by
irrespective of the amount of fine, and regardless of other imposable accessory or other penalties, including the plaintiff-appellee therein, made the following observations:
It is surprising why it is only now, after the decision has been rendered, that the plaintiff-appellee presents the The facts of this case show that from the time the Surety became a quasi-party on July 31, 1948, it could have
question of this Court’s jurisdiction over the case. Republic Act No. 2613 was enacted on August 1, 1959. This raised the question of the lack of jurisdiction of the Court of First Instance of Cebu to take cognizance of the
case was argued on January 29, 1960. Notwithstanding this fact, the jurisdiction of this Court was never present action by reason of the sum of money involved which, according to the law then in force, was within
impugned until the adverse decision of this Court was handed down. The conduct of counsel leads us to the original exclusive jurisdiction of inferior courts. It failed to do so. Instead, at several stages of the
believe that they must have always been of the belief that notwithstanding said enactment of Republic Act proceedings in the court a quo, as well as in the Court of Appeals, it invoked the jurisdiction of said courts to
2613 this Court has jurisdiction of the case, such conduct being born out of a conviction that the actual real obtain affirmative relief and submitted its case for a final adjudication on the merits. It was only after an
value of the properties in question actually exceeds the jurisdictional amount of this Court (over ₱200,000). adverse decision was rendered by the Court of Appeals that it finally woke up to raise the question of
Our minute resolution in G.R. No. L-10096, Hyson Tan, et al. vs. Filipinas Compaña de Seguros, et al., of jurisdiction. Were we to sanction such conduct on its part, We would in effect be declaring as useless all the
March 23, 1956, a parallel case, is applicable to the conduct of plaintiff-appellee in this case, thus: proceedings had in the present case since it was commenced on July 19, 1948 and compel the judgment
creditors to go up their Calvary once more. The inequity and unfairness of this is not only patent but revolting.
x x x that an appellant who files his brief and submits his case to the Court of Appeals for decision, without
questioning the latter’s jurisdiction until decision is rendered therein, should be considered as having For quite a time since we made this pronouncement in Sibonghanoy, courts and tribunals, in resolving issues
voluntarily waived so much of his claim as would exceed the jurisdiction of said Appellate Court; for the that involve the belated invocation of lack of jurisdiction, have applied the principle of estoppel by laches.
reason that a contrary rule would encourage the undesirable practice of appellants submitting their cases for Thus, in Calimlim v. Ramirez, we pointed out that Sibonghanoy was developing into a general rule rather than
decision to the Court of Appeals in expectation of favorable judgment, but with intent of attacking its the exception:
jurisdiction should the decision be unfavorable: x x x
A rule that had been settled by unquestioned acceptance and upheld in decisions so numerous to cite is that the
Then came our ruling in Tijam v. Sibonghanoy that a party may be barred by laches from invoking lack of jurisdiction of a court over the subject-matter of the action is a matter of law and may not be conferred by
jurisdiction at a late hour for the purpose of annulling everything done in the case with the active participation consent or agreement of the parties. The lack of jurisdiction of a court may be raised at any stage of the
of said party invoking the plea. We expounded, thus: proceedings, even on appeal. This doctrine has been qualified by recent pronouncements which stemmed
principally from the ruling in the cited case of Sibonghanoy. It is to be regretted, however, that the holding in
A party may be estopped or barred from raising a question in different ways and for different reasons. Thus, said case had been applied to situations which were obviously not contemplated therein. The exceptional
we speak of estoppel in pais, of estoppel by deed or by record, and of estoppel by laches. circumstance involved in Sibonghanoy which justified the departure from the accepted concept of non-
waivability of objection to jurisdiction has been ignored and, instead a blanket doctrine had been repeatedly
Laches, in a general sense, is failure or neglect, for an unreasonable and unexplained length of time, to do that upheld that rendered the supposed ruling in Sibonghanoy not as the exception, but rather the general rule,
which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to virtually overthrowing altogether the time-honored principle that the issue of jurisdiction is not lost by waiver
assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has or by estoppel.
abandoned it or declined to assert it.
In Sibonghanoy, the defense of lack of jurisdiction of the court that rendered the questioned ruling was held to
The doctrine of laches or of "stale demands" is based upon grounds of public policy which requires, for the be barred by estoppel by laches. It was ruled that the lack of jurisdiction having been raised for the first time in
peace of society, the discouragement of stale claims and, unlike the statute of limitations, is not a mere a motion to dismiss filed almost fifteen (15) years after the questioned ruling had been rendered, such a plea
question of time but is principally a question of the inequity or unfairness of permitting a right or claim to be may no longer be raised for being barred by laches. As defined in said case, laches is "failure or neglect, for an
enforced or asserted. unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should
have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a
It has been held that a party cannot invoke the jurisdiction of a court to secure affirmative relief against his
presumption that the party entitled to assert has abandoned it or declined to assert it.
opponent and, after obtaining or failing to obtain such relief, repudiate or question that same jurisdiction (Dean
vs. Dean, 136 Or. 694, 86 A.L.R. 79). In the case just cited, by way of explaining the rule, it was further said In Calimlim, despite the fact that the one who benefited from the plea of lack of jurisdiction was the one who
that the question whether the court had jurisdiction either of the subject matter of the action or of the parties invoked the court’s jurisdiction, and who later obtained an adverse judgment therein, we refused to apply the
was not important in such cases because the party is barred from such conduct not because the judgment or ruling in Sibonghanoy. The Court accorded supremacy to the time-honored principle that the issue of
order of the court is valid and conclusive as an adjudication, but for the reason that such a practice cannot be jurisdiction is not lost by waiver or by estoppel.
tolerated—obviously for reasons of public policy.
Yet, in subsequent cases decided after Calimlim, which by sheer volume are too plentiful to mention, the
Furthermore, it has also been held that after voluntarily submitting a cause and encountering an adverse Sibonghanoy doctrine, as foretold in Calimlim, became the rule rather than the exception. As such, in Soliven
decision on the merits, it is too late for the loser to question the jurisdiction or power of the court (Pease vs. v. Fastforms Philippines, Inc., the Court ruled:
Rathbun-Jones etc., 243 U.S. 273, 61 L. Ed. 715, 37 S.Ct. 283; St. Louis etc. vs. McBride, 141 U.S. 127, 35 L.
Ed. 659). And in Littleton vs. Burgess, 16 Wyo. 58, the Court said that it is not right for a party who has While it is true that jurisdiction may be raised at any time, "this rule presupposes that estoppel has not
affirmed and invoked the jurisdiction of a court in a particular matter to secure an affirmative relief, to supervened." In the instant case, respondent actively participated in all stages of the proceedings before the
afterwards deny that same jurisdiction to escape a penalty. trial court and invoked its authority by asking for an affirmative relief. Clearly, respondent is estopped from
challenging the trial court’s jurisdiction, especially when an adverse judgment has been rendered. In
Upon this same principle is what We said in the three cases mentioned in the resolution of the Court of PNOC Shipping and Transport Corporation vs. Court of Appeals, we held:
Appeals of May 20, 1963 (supra)—to the effect that we frown upon the "undesirable practice" of a party
submitting his case for decision and then accepting the judgment, only if favorable, and attacking it for lack of Moreover, we note that petitioner did not question at all the jurisdiction of the lower court x x x in its answers
jurisdiction, when adverse—as well as in Pindañgan etc. vs. Dans et al., G.R. L-14591, September 26, 1962; to both the amended complaint and the second amended complaint. It did so only in its motion for
Montelibano et al. vs. Bacolod-Murcia Milling Co., Inc., G.R. L-15092; Young Men Labor Union etc. vs. The reconsideration of the decision of the lower court after it had received an adverse decision. As this Court held
Court of Industrial Relations et al., G.R. L-20307, Feb. 26, 1965, and Mejia vs. Lucas, 100 Phil. p. 277. in Pantranco North Express, Inc. vs. Court of Appeals (G.R. No. 105180, July 5, 1993, 224 SCRA 477, 491),
participation in all stages of the case before the trial court, that included invoking its authority in asking for
affirmative relief, effectively barred petitioner by estoppel from challenging the court’s jurisdiction. Notably, lack of jurisdiction must have been raised so belatedly as to warrant the presumption that the party entitled to
from the time it filed its answer to the second amended complaint on April 16, 1985, petitioner did not assert it had abandoned or declined to assert it. That Sibonghanoy applies only to exceptional circumstances is
question the lower court’s jurisdiction. It was only on December 29, 1989 when it filed its motion for clarified in Calimlim v. Ramirez, which we quote:
reconsideration of the lower court’s decision that petitioner raised the question of the lower court’s lack of
jurisdiction. Petitioner thus foreclosed its right to raise the issue of jurisdiction by its own inaction. (italics A rule that had been settled by unquestioned acceptance and upheld in decisions so numerous to cite is that the
ours) jurisdiction of a court over the subject-matter of the action is a matter of law and may not be conferred by
consent or agreement of the parties. The lack of jurisdiction of a court may be raised at any stage of the
Similarly, in the subsequent case of Sta. Lucia Realty and Development, Inc. vs. Cabrigas, we ruled: proceedings, even on appeal. This doctrine has been qualified by recent pronouncements which stemmed
principally from the ruling in the cited case of Sibonghanoy. It is to be regretted, however, that the holding in
In the case at bar, it was found by the trial court in its 30 September 1996 decision in LCR Case No. Q- said case had been applied to situations which were obviously not contemplated therein. The exceptional
60161(93) that private respondents (who filed the petition for reconstitution of titles) failed to comply with circumstance involved in Sibonghanoy which justified the departure from the accepted concept of non-
both sections 12 and 13 of RA 26 and therefore, it had no jurisdiction over the subject matter of the case. waivability of objection to jurisdiction has been ignored and, instead a blanket doctrine had been repeatedly
However, private respondents never questioned the trial court’s jurisdiction over its petition for reconstitution upheld that rendered the supposed ruling in Sibonghanoy not as the exception, but rather the general rule,
throughout the duration of LCR Case No. Q-60161(93). On the contrary, private respondents actively virtually overthrowing altogether the time-honored principle that the issue of jurisdiction is not lost by waiver
participated in the reconstitution proceedings by filing pleadings and presenting its evidence. They invoked the or by estoppel.
trial court’s jurisdiction in order to obtain affirmative relief – the reconstitution of their titles. Private
respondents have thus foreclosed their right to raise the issue of jurisdiction by their own actions. Indeed, the general rule remains: a court’s lack of jurisdiction may be raised at any stage of the proceedings,
even on appeal. The reason is that jurisdiction is conferred by law, and lack of it affects the very authority of
The Court has constantly upheld the doctrine that while jurisdiction may be assailed at any stage, a litigant’s the court to take cognizance of and to render judgment on the action. Moreover, jurisdiction is determined by
participation in all stages of the case before the trial court, including the invocation of its authority in asking the averments of the complaint, not by the defenses contained in the answer.
for affirmative relief, bars such party from challenging the court’s jurisdiction (PNOC Shipping and Transport
Corporation vs. Court of Appeals, 297 SCRA 402 [1998]). A party cannot invoke the jurisdiction of a court to Also, in Mangaliag v. Catubig-Pastoral, even if the pleader of lack of jurisdiction actively took part in the trial
secure affirmative relief against his opponent and after obtaining or failing to obtain such relief, repudiate or proceedings by presenting a witness to seek exoneration, the Court, reiterating the doctrine in Calimlim, said:
question that same jurisdiction (Asset Privatization Trust vs. Court of Appeals, 300 SCRA 579
[1998]; Province of Bulacan vs. Court of Appeals, 299 SCRA 442 [1998]). The Court frowns upon the Private respondent argues that the defense of lack of jurisdiction may be waived by estoppel through active
undesirable practice of a party participating in the proceedings and submitting his case for decision and then participation in the trial. Such, however, is not the general rule but an exception, best characterized by the
accepting judgment, only if favorable, and attacking it for lack of jurisdiction, when adverse (Producers Bank peculiar circumstances in Tijam vs. Sibonghanoy. In Sibonghanoy, the party invoking lack of jurisdiction did
of the Philippines vs. NLRC, 298 SCRA 517 [1998], citing Ilocos Sur Electric Cooperative, Inc. vs. NLRC, so only after fifteen years and at a stage when the proceedings had already been elevated to the
241 SCRA 36 [1995]). (italics ours) CA. Sibonghanoy is an exceptional case because of the presence of laches, which was defined therein as
failure or neglect for an unreasonable and unexplained length of time to do that which, by exercising due
Noteworthy, however, is that, in the 2005 case of Metromedia Times Corporation v. Pastorin, 27 where the issue diligence, could or should have been done earlier; it is the negligence or omission to assert a right within a
of lack of jurisdiction was raised only in the National Labor Relations Commission (NLRC) on appeal, we reasonable time, warranting a presumption that the party entitled to assert has abandoned it or declined to
stated, after examining the doctrines of jurisdiction vis-à-vis estoppel, that the ruling in Sibonghanoy stands as assert it.
an exception, rather than the general rule. Metromedia, thus, was not estopped from assailing the jurisdiction
of the labor arbiter before the NLRC on appeal. And in the more recent Regalado v. Go, the Court again emphasized that laches should be clearly present for
the Sibonghanoy doctrine to be applicable, thus:
Later, in Francel Realty Corporation v. Sycip, the Court clarified that:
Laches is defined as the "failure or neglect for an unreasonable and unexplained length of time, to do that
Petitioner argues that the CA’s affirmation of the trial court’s dismissal of its case was erroneous, considering which, by exercising due diligence, could or should have been done earlier, it is negligence or omission to
that a full-blown trial had already been conducted. In effect, it contends that lack of jurisdiction could no assert a right within a reasonable length of time, warranting a presumption that the party entitled to assert it
longer be used as a ground for dismissal after trial had ensued and ended. either has abandoned it or declined to assert it."

The above argument is anchored on estoppel by laches, which has been used quite successfully in a number of The ruling in People v. Regalario that was based on the landmark doctrine enunciated in Tijam v. Sibonghanoy
cases to thwart dismissals based on lack of jurisdiction. Tijam v. Sibonghanoy, in which this doctrine was on the matter of jurisdiction by estoppel is the exception rather than the rule. Estoppel by laches may be
espoused, held that a party may be barred from questioning a court’s jurisdiction after being invoked to secure invoked to bar the issue of lack of jurisdiction only in cases in which the factual milieu is analogous to that in
affirmative relief against its opponent. In fine, laches prevents the issue of lack of jurisdiction from being the cited case. In such controversies, laches should have been clearly present; that is, lack of jurisdiction must
raised for the first time on appeal by a litigant whose purpose is to annul everything done in a trial in which it have been raised so belatedly as to warrant the presumption that the party entitled to assert it had abandoned or
has actively participated. declined to assert it.

Laches is defined as the "failure or neglect for an unreasonable and unexplained length of time, to do that In Sibonghanoy, the defense of lack of jurisdiction was raised for the first time in a motion to dismiss filed by
which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to the Surety almost 15 years after the questioned ruling had been rendered. At several stages of the proceedings,
assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has in the court a quo as well as in the Court of Appeals, the Surety invoked the jurisdiction of the said courts to
abandoned it or declined to assert it." obtain affirmative relief and submitted its case for final adjudication on the merits. It was only when the
adverse decision was rendered by the Court of Appeals that it finally woke up to raise the question of
The ruling in Sibonghanoy on the matter of jurisdiction is, however, the exception rather than the rule. jurisdiction.
Estoppel by laches may be invoked to bar the issue of lack of jurisdiction only in cases in which the factual
milieu is analogous to that in the cited case. In such controversies, laches should be clearly present; that is,
Clearly, the factual settings attendant in Sibonghanoy are not present in the case at bar. Petitioner Atty. WHEREFORE, premises considered, the petition for review on certiorari is GRANTED. Criminal Case No.
Regalado, after the receipt of the Court of Appeals resolution finding her guilty of contempt, promptly filed a 2235-M-94 is hereby DISMISSED without prejudice.
Motion for Reconsideration assailing the said court’s jurisdiction based on procedural infirmity in initiating the
action. Her compliance with the appellate court’s directive to show cause why she should not be cited for SO ORDERED
contempt and filing a single piece of pleading to that effect could not be considered as an active participation
in the judicial proceedings so as to take the case within the milieu of Sibonghanoy. Rather, it is the natural fear
to disobey the mandate of the court that could lead to dire consequences that impelled her to comply.

The Court, thus, wavered on when to apply the exceptional circumstance in Sibonghanoy and on when to
apply the general rule enunciated as early as in De La Santa and expounded at length in Calimlim. The general
rule should, however, be, as it has always been, that the issue of jurisdiction may be raised at any stage of the
proceedings, even on appeal, and is not lost by waiver or by estoppel. Estoppel by laches, to bar a litigant from
asserting the court’s absence or lack of jurisdiction, only supervenes in exceptional cases similar to the factual
milieu of Tijam v. Sibonghanoy. Indeed, the fact that a person attempts to invoke unauthorized jurisdiction of
a court does not estop him from thereafter challenging its jurisdiction over the subject matter, since such
jurisdiction must arise by law and not by mere consent of the parties. This is especially true where the person
seeking to invoke unauthorized jurisdiction of the court does not thereby secure any advantage or the adverse
party does not suffer any harm.

Applying the said doctrine to the instant case, the petitioner is in no way estopped by laches in assailing the
jurisdiction of the RTC, considering that he raised the lack thereof in his appeal before the appellate court. At
that time, no considerable period had yet elapsed for laches to attach. True, delay alone, though unreasonable,
will not sustain the defense of "estoppel by laches" unless it further appears that the party, knowing his rights,
has not sought to enforce them until the condition of the party pleading laches has in good faith become so
changed that he cannot be restored to his former state, if the rights be then enforced, due to loss of evidence,
change of title, intervention of equities, and other causes. In applying the principle of estoppel by laches in the
exceptional case of Sibonghanoy, the Court therein considered the patent and revolting inequity and unfairness
of having the judgment creditors go up their Calvary once more after more or less 15 years. The same,
however, does not obtain in the instant case.

We note at this point that estoppel, being in the nature of a forfeiture, is not favored by law. It is to be applied
rarely—only from necessity, and only in extraordinary circumstances. The doctrine must be applied with great
care and the equity must be strong in its favor. When misapplied, the doctrine of estoppel may be a most
effective weapon for the accomplishment of injustice. Moreover, a judgment rendered without jurisdiction
over the subject matter is void. Hence, the Revised Rules of Court provides for remedies in attacking Payment of filing fees
judgments rendered by courts or tribunals that have no jurisdiction over the concerned cases. No laches will
even attach when the judgment is null and void for want of jurisdiction. As we have stated in Heirs of Julian G.R. No. 75919 May 7, 1987
Dela Cruz and Leonora Talaro v. Heirs of Alberto Cruz, MANCHESTER DEVELOPMENT CORPORATION, ET AL., petitioners,
vs.
It is axiomatic that the jurisdiction of a tribunal, including a quasi-judicial officer or government agency, over COURT OF APPEALS, CITY LAND DEVELOPMENT CORPORATION, STEPHEN ROXAS,
the nature and subject matter of a petition or complaint is determined by the material allegations therein and ANDREW LUISON, GRACE LUISON and JOSE DE MAISIP, respondents.
the character of the relief prayed for, irrespective of whether the petitioner or complainant is entitled to any or Tanjuatco, Oreta and Tanjuatco for petitioners.
all such reliefs. Jurisdiction over the nature and subject matter of an action is conferred by the Constitution and Pecabar Law Offices for private respondents.
the law, and not by the consent or waiver of the parties where the court otherwise would have no jurisdiction
over the nature or subject matter of the action. Nor can it be acquired through, or waived by, any act or
omission of the parties. Moreover, estoppel does not apply to confer jurisdiction to a tribunal that has none GANCAYCO, J.:
over the cause of action. x x x
Acting on the motion for reconsideration of the resolution of the Second Division of January 28,1987 and
Indeed, the jurisdiction of the court or tribunal is not affected by the defenses or theories set up by the
another motion to refer the case to and to be heard in oral argument by the Court En Banc filed by petitioners,
defendant or respondent in his answer or motion to dismiss. Jurisdiction should be determined by considering the motion to refer the case to the Court en banc is granted but the motion to set the case for oral argument is
not only the status or the relationship of the parties but also the nature of the issues or questions that is the
denied.
subject of the controversy. x x x x The proceedings before a court or tribunal without jurisdiction, including its
decision, are null and void, hence, susceptible to direct and collateral attacks.
Petitioners in support of their contention that the filing fee must be assessed on the basis of the amended
With the above considerations, we find it unnecessary to resolve the other issues raised in the petition. complaint cite the case of Magaspi vs. Ramolete.They contend that the Court of Appeals erred in that the filing
fee should be levied by considering the amount of damages sought in the original complaint.
The environmental facts of said case differ from the present in that — In the Magaspi case, the action was considered not only one for recovery of ownership but also for damages,
so that the filing fee for the damages should be the basis of assessment. Although the payment of the docketing
1. The Magaspi case was an action for recovery of ownership and possession of a parcel of land with fee of P60.00 was found to be insufficient, nevertheless, it was held that since the payment was the result of an
"honest difference of opinion as to the correct amount to be paid as docket fee" the court "had acquired
damages.2 While the present case is an action for torts and damages and specific performance with prayer for
temporary restraining order, etc. jurisdiction over the case and the proceedings thereafter had were proper and regular." Hence, as the amended
complaint superseded the original complaint, the allegations of damages in the amended complaint should be
the basis of the computation of the filing fee. 
2. In the Magaspi case, the prayer in the complaint seeks not only the annulment of title of the defendant to the
property, the declaration of ownership and delivery of possession thereof to plaintiffs but also asks for the
In the present case no such honest difference of opinion was possible as the allegations of the complaint, the
payment of actual moral, exemplary damages and attorney's fees arising therefrom in the amounts specified
therein. However, in the present case, the prayer is for the issuance of a writ of preliminary prohibitory designation and the prayer show clearly that it is an action for damages and specific performance. The
docketing fee should be assessed by considering the amount of damages as alleged in the original
injunction during the pendency of the action against the defendants' announced forfeiture of the sum of P3
Million paid by the plaintiffs for the property in question, to attach such property of defendants that maybe complaint.
sufficient to satisfy any judgment that maybe rendered, and after hearing, to order defendants to execute a
contract of purchase and sale of the subject property and annul defendants' illegal forfeiture of the money of As reiterated in the Magaspi case the rule is well-settled "that a case is deemed filed only upon payment of
plaintiff, ordering defendants jointly and severally to pay plaintiff actual, compensatory and exemplary the docket fee regardless of the actual date of filing in court .  Thus, in the present case the trial court did
damages as well as 25% of said amounts as maybe proved during the trial as attorney's fees and declaring the not acquire jurisdiction over the case by the payment of only P410.00 as docket fee. Neither can the
tender of payment of the purchase price of plaintiff valid and producing the effect of payment and to make the amendment of the complaint thereby vest jurisdiction upon the Court.  For an legal purposes there is no such
injunction permanent. The amount of damages sought is not specified in the prayer although the body of the original complaint that was duly filed which could be amended. Consequently, the order admitting the
complaint alleges the total amount of over P78 Million as damages suffered by plaintiff. amended complaint and all subsequent proceedings and actions taken by the trial court are null and void.

3. Upon the filing of the complaint there was an honest difference of opinion as to the nature of the action in The Court of Appeals therefore, aptly ruled in the present case that the basis of assessment of the docket fee
the Magaspi case. The complaint was considered as primarily an action for recovery of ownership and should be the amount of damages sought in the original complaint and not in the amended complaint.
possession of a parcel of land. The damages stated were treated as merely to the main cause of action. Thus,
the docket fee of only P60.00 and P10.00 for the sheriff's fee were paid.  The Court cannot close this case without making the observation that it frowns at the practice of counsel
who filed the original complaint in this case of omitting any specification of the amount of damages in
In the present case there can be no such honest difference of opinion. As maybe gleaned from the allegations the prayer although the amount of over P78 million is alleged in the body of the complaint. This is clearly
of the complaint as well as the designation thereof, it is both an action for damages and specific performance. intended for no other purpose than to evade the payment of the correct filing fees if not to mislead the docket
The docket fee paid upon filing of complaint in the amount only of P410.00 by considering the action to be clerk in the assessment of the filing fee. This fraudulent practice was compounded when, even as this Court
merely one for specific performance where the amount involved is not capable of pecuniary estimation is had taken cognizance of the anomaly and ordered an investigation, petitioner through another counsel filed an
obviously erroneous. Although the total amount of damages sought is not stated in the prayer of the complaint amended complaint, deleting all mention of the amount of damages being asked for in the body of the
yet it is spelled out in the body of the complaint totalling in the amount of P78,750,000.00 which should be the complaint. It was only when in obedience to the order of this Court of October 18, 1985, the trial court
basis of assessment of the filing fee. directed that the amount of damages be specified in the amended complaint, that petitioners' counsel wrote the
damages sought in the much reduced amount of P10,000,000.00 in the body of the complaint but not in the
prayer thereof. The design to avoid payment of the required docket fee is obvious.
4. When this under-re assessment of the filing fee in this case was brought to the attention of this Court
together with similar other cases an investigation was immediately ordered by the Court. Meanwhile plaintiff
through another counsel with leave of court filed an amended complaint on September 12, 1985 for the The Court serves warning that it will take drastic action upon a repetition of this unethical practice.
inclusion of Philips Wire and Cable Corporation as co-plaintiff and by emanating any mention of the amount
of damages in the body of the complaint. The prayer in the original complaint was maintained. After this Court To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar pleadings
issued an order on October 15, 1985 ordering the re- assessment of the docket fee in the present case and other
should specify the amount of damages being prayed for not only in the body of the pleading but also in the
cases that were investigated, on November 12, 1985 the trial court directed plaintiffs to rectify the amended prayer, and said damages shall be considered in the assessment of the filing fees in any case. Any pleading that
complaint by stating the amounts which they are asking for. It was only then that plaintiffs specified the
fails to comply with this requirement shall not bib accepted nor admitted, or shall otherwise be expunged from
amount of damages in the body of the complaint in the reduced amount of P10,000,000.00. 7 Still no amount of the record.
damages were specified in the prayer. Said amended complaint was admitted.

The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee . An
On the other hand, in the Magaspi case, the trial court ordered the plaintiffs to pay the amount of P3,104.00 as amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less the
filing fee covering the damages alleged in the original complaint as it did not consider the damages to be
payment of the docket fee based on the amounts sought in the amended pleading. The ruling in the Magaspi
merely an or incidental to the action for recovery of ownership and possession of real property.  An amended case 14 in so far as it is inconsistent with this pronouncement is overturned and reversed.
complaint was filed by plaintiff with leave of court to include the government of the Republic as defendant and
reducing the amount of damages, and attorney's fees prayed for to P100,000.00. Said amended complaint was
also admitted.  WHEREFORE, the motion for reconsideration is denied for lack of merit.

SO ORDERED.
 On the other hand, on March 28, 1984, private respondent filed a complaint in the Regional Trial Court of
Quezon City for the refund of premiums and the issuance of a writ of preliminary attachment which was
docketed as Civil Case No. Q-41177, initially against petitioner SIOL, and thereafter including E.B. Philipps
and D.J. Warby as additional defendants. The complaint sought, among others, the payment of actual,
compensatory, moral, exemplary and liquidated damages, attorney's fees, expenses of litigation and costs of
the suit. Although the prayer in the complaint did not quantify the amount of damages sought said amount may
be inferred from the body of the complaint to be about Fifty Million Pesos (P50,000,000.00).

Only the amount of P210.00 was paid by private respondent as docket fee which prompted petitioners' counsel
to raise his objection. Said objection was disregarded by respondent Judge Jose P. Castro who was then
presiding over said case. Upon the order of this Court, the records of said case together with twenty-two other
cases assigned to different branches of the Regional Trial Court of Quezon City which were under
investigation for under-assessment of docket fees were transmitted to this Court. The Court thereafter returned
the said records to the trial court with the directive that they be re-raffled to the other judges in Quezon City, to
the exclusion of Judge Castro. Civil Case No. Q-41177 was re-raffled to Branch 104, a sala which was then
vacant.

On October 15, 1985, the Court en banc issued a Resolution in Administrative Case No. 85-10-8752-RTC
directing the judges in said cases to reassess the docket fees and that in case of deficiency, to order its
payment. The Resolution also requires all clerks of court to issue certificates of re-assessment of docket fees.
All litigants were likewise required to specify in their pleadings the amount sought to be recovered in their
complaints.

On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case No. Q-41177 was temporarily
assigned, issuedan order to the Clerk of Court instructing him to issue a certificate of assessment of the docket
fee paid by private respondent and, in case of deficiency, to include the same in said certificate.

On January 7, 1984, to forestall a default, a cautionary answer was filed by petitioners. On August 30,1984, an
amended complaint was filed by private respondent including the two additional defendants aforestated.

Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was thereafter assigned, after his assumption
into office on January 16, 1986, issued a Supplemental Order requiring the parties in the case to comment on
G.R. Nos. 79937-38 February 13, 1989 the Clerk of Court's letter-report signifying her difficulty in complying with the Resolution of this Court of
SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and D.J. WARBY, petitioners, vs. October 15, 1985 since the pleadings filed by private respondent did not indicate the exact amount sought to be
HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104, Regional Trial Court, Quezon City recovered. On January 23, 1986, private respondent filed a "Compliance" and a "Re-Amended Complaint"
and MANUEL CHUA UY PO TIONG, respondents. stating therein a claim of "not less than Pl0,000,000. 00 as actual compensatory damages" in the prayer. In the
body of the said second amended complaint however, private respondent alleges actual and compensatory
Romulo, Mabanta, Buenaventura, Sayoc & De los Angeles Law Offices for petitioners. Tanjuatco, Oreta, damages and attorney's fees in the total amount of about P44,601,623.70.
Tanjuatco, Berenguer & Sanvicente Law Offices for private respondent.
On January 24, 1986, Judge Asuncion issued another Order admitting the second amended complaint and
GANCAYCO, J.: stating therein that the same constituted proper compliance with the Resolution of this Court and that a copy
thereof should be furnished the Clerk of Court for the reassessment of the docket fees. The reassessment by the
Clerk of Court based on private respondent's claim of "not less than P10,000,000.00 as actual and
Again the Court is asked to resolve the issue of whether or not a court acquires jurisdiction over a case when compensatory damages" amounted to P39,786.00 as docket fee. This was subsequently paid by private
the correct and proper docket fee has not been paid. respondent.

On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for brevity) filed a complaint with the Petitioners then filed a petition for certiorari with the Court of Appeals questioning the said order of Judie
Regional Trial Court of Makati, Metro Manila for the consignation of a premium refund on a fire insurance Asuncion dated January 24, 1986.
policy with a prayer for the judicial declaration of its nullity against private respondent Manuel Uy Po Tiong.
Private respondent as declared in default for failure to file the required answer within the reglementary period.
On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of
P20,000,000.00 as d.qmages so the total claim amounts to about P64,601,623.70. On October 16, 1986, or
some seven months after filing the supplemental complaint, the private respondent paid the additional docket facts, this court held that the Court of First Instance did notacquire jurisdiction to hear and determine the
fee of P80,396.00 appeal as the appeal was not thereby perfected.

On August 13, 1987, the Court of Appeals rendered a decision ruling, among others, as follows: In Lee vs. Republic, the petitioner filed a verified declaration of intention to become a Filipino citizen by
sending it through registered mail to the Office of the Solicitor General in 1953 but the required filing fee was
WHEREFORE, judgment is hereby rendered: paid only in 1956, barely 5V2 months prior to the filing of the petition for citizenship. This Court ruled that the
declaration was not filed in accordance with the legal requirement that such declaration should be filed at least
1. Denying due course to the petition in CA-G.R. SP No. 1, 09715 insofar as it seeks
annulment of the order one year before the filing of the petition for citizenship. Citing Lazaro, this Court concluded that the filing of
petitioner's declaration of intention on October 23, 1953 produced no legal effect until the required filing fee
(a) denying petitioners' motion to dismiss the complaint, as amended, and
(b) granting the writ of preliminary attachment, but giving due course to the portion was paid on May 23, 1956.
thereof questioning the reassessment of the docketing fee, and requiring the Honorable
respondent Court to reassess the docketing fee to be paid by private respondent on the In Malimit vs. Degamo, the same principles enunciated in Lazaro and Lee were applied. It was an original
basis of the amount of P25,401,707.00.  petition for quo warranto contesting the right to office of proclaimed candidates which was mailed, addressed
to the clerk of the Court of First Instance, within the one-week period after the proclamation as provided
Hence, the instant petition. therefor by law. However, the required docket fees were paid only after the expiration of said period.
Consequently, this Court held that the date of such payment must be deemed to be the real date of filing of
aforesaid petition and not the date when it was mailed.
During the pendency of this petition and in conformity with the said judgment of respondent court, private
respondent paid the additional docket fee of P62,432.90 on April 28, 1988. 
Again, in Garica vs, Vasquez,  this Court reiterated the rule that the docket fee must be paid before a court will
act on a petition or complaint. However, we also held that said rule is not applicable when petitioner seeks the
The main thrust of the petition is that the Court of Appeals erred in not finding that the lower court did not probate of several wills of the same decedent as he is not required to file a separate action for each will but
acquire jurisdiction over Civil Case No. Q-41177 on the ground of nonpayment of the correct and proper instead he may have other wills probated in the same special proceeding then pending before the same court.
docket fee. Petitioners allege that while it may be true that private respondent had paid the amount of
P182,824.90 as docket fee as herein-above related, and considering that the total amount sought to be
Then in Magaspi, this Court reiterated the ruling in Malimit and Lee that a case is deemed filed only upon
recovered in the amended and supplemental complaint is P64,601,623.70 the docket fee that should be paid by
private respondent is P257,810.49, more or less. Not having paid the same, petitioners contend that the payment of the docket fee regardless of the actual date of its filing in court. Said case involved a complaint for
recovery of ownership and possession of a parcel of land with damages filed in the Court of First Instance of
complaint should be dismissed and all incidents arising therefrom should be annulled. In support of their
theory, petitioners cite the latest ruling of the Court in Manchester Development Corporation vs. CA,  as Cebu. Upon the payment of P60.00 for the docket fee and P10.00 for the sheriffs fee, the complaint was
docketed as Civil Case No. R-11882. The prayer of the complaint sought that the Transfer Certificate of Title
follows:
issued in the name of the defendant be declared as null and void. It was also prayed that plaintiff be declared as
owner thereof to whom the proper title should be issued, and that defendant be made to pay monthly rentals of
The Court acquires jurisdiction over any case only upon the payment of the prescribed P3,500.00 from June 2, 1948 up to the time the property is delivered to plaintiff, P500,000.00 as moral
docket fee. An amendment of the complaint or similar pleading will not thereby vest damages, attorney's fees in the amount of P250,000.00, the costs of the action and exemplary damages in the
jurisdiction in the Court, much less the payment of the docket fee based on the amounts amount of P500,000.00.
sought in the amended pleading. The ruling in the Magaspi Case in so far as it is
inconsistent with this pronouncement is overturned and reversed.
The defendant then filed a motion to compel the plaintiff to pay the correct amount of the docket fee to which
an opposition was filed by the plaintiff alleging that the action was for the recovery of a parcel of land so the
On the other hand, private respondent claims that the ruling in Manchester cannot apply retroactively to Civil docket fee must be based on its assessed value and that the amount of P60.00 was the correct docketing fee.
Case No. Q41177 for at the time said civil case was filed in court there was no such Manchester ruling as yet. The trial court ordered the plaintiff to pay P3,104.00 as filing fee.
Further, private respondent avers that what is applicable is the ruling of this Court in Magaspi v. Ramolete,
wherein this Court held that the trial court acquired jurisdiction over the case even if the docket fee paid was
The plaintiff then filed a motion to admit the amended complaint to include the Republic as the defendant. In
insufficient.
the prayer of the amended complaint the exemplary damages earlier sought was eliminated. The amended
prayer merely sought moral damages as the court may determine, attorney's fees of P100,000.00 and the costs
The contention that Manchester cannot apply retroactively to this case is untenable. Statutes regulating of the action. The defendant filed an opposition to the amended complaint. The opposition notwithstanding,
the procedure of the courts will be construed as applicable to actions pending and undetermined at the time of the amended complaint was admitted by the trial court. The trial court reiterated its order for the payment of
their passage. Procedural laws are retrospective in that sense and to that extent.  the additional docket fee which plaintiff assailed and then challenged before this Court. Plaintiff alleged that
he paid the total docket fee in the amount of P60.00 and that if he has to pay the additional fee it must be based
In Lazaro vs. Endencia and Andres,  this Court held that the payment of the full amount of the docket fee is an on the amended complaint.
indispensable step for the perfection of an appeal. In a forcible entry and detainer case before the justice of the
peace court of Manaoag, Pangasinan, after notice of a judgment dismissing the case, the plaintiff filed a notice The question posed, therefore, was whether or not the plaintiff may be considered to have filed the case even if
of appeal with said court but he deposited only P8.00 for the docket fee, instead of P16.00 as required, within the docketing fee paid was not sufficient. In Magaspi, We reiterated the rule that the case was deemed filed
the reglementary period of appeal of five (5) days after receiving notice of judgment. Plaintiff deposited the only upon the payment of the correct amount for the docket fee regardless of the actual date of the filing of the
additional P8.00 to complete the amount of the docket fee only fourteen (14) days later. On the basis of these complaint; that there was an honest difference of opinion as to the correct amount to be paid as docket fee in
that as the action appears to be one for the recovery of property the docket fee of P60.00 was correct; and that Said amended complaint was admitted and the private respondent was reassessed the additional docket fee of
as the action is also one, for damages, We upheld the assessment of the additional docket fee based on the P39,786.00 based on his prayer of not less than P10,000,000.00 in damages, which he paid.
damages alleged in the amended complaint as against the assessment of the trial court which was based on the
damages alleged in the original complaint.
On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of
P20,000,000.00 in damages so that his total claim is approximately P64,601,620.70. On October 16, 1986,
However, as aforecited, this Court overturned Magaspi in Manchester. Manchester involves an action for torts private respondent paid an additional docket fee of P80,396.00. After the promulgation of the decision of the
and damages and specific performance with a prayer for the issuance of a temporary restraining order, etc. The respondent court on August 31, 1987 wherein private respondent was ordered to be reassessed for additional
prayer in said case is for the issuance of a writ of preliminary prohibitory injunction during the pendency of docket fee, and during the pendency of this petition, and after the promulgation of Manchester, on April 28,
the action against the defendants' announced forfeiture of the sum of P3 Million paid by the plaintiffs for the 1988, private respondent paid an additional docket fee of P62,132.92. Although private respondent appears to
property in question, the attachment of such property of defendants that may be sufficient to satisfy any have paid a total amount of P182,824.90 for the docket fee considering the total amount of his claim in the
judgment that may be rendered, and, after hearing, the issuance of an order requiring defendants to execute a amended and supplemental complaint amounting to about P64,601,620.70, petitioner insists that private
contract of purchase and sale of the subject property and annul defendants' illegal forfeiture of the money of respondent must pay a docket fee of P257,810.49.
plaintiff. It was also prayed that the defendants be made to pay the plaintiff jointly and severally, actual,
compensatory and exemplary damages as well as 25% of said amounts as may be proved during the trial for The principle in Manchester could very well be applied in the present case. The pattern and the intent to
attorney's fees. The plaintiff also asked the trial court to declare the tender of payment of the purchase price of
defraud the government of the docket fee due it is obvious not only in the filing of the original complaint but
plaintiff valid and sufficient for purposes of payment, and to make the injunction permanent. The amount of also in the filing of the second amended complaint.
damages sought is not specified in the prayer although the body of the complaint alleges the total amount of
over P78 Millon allegedly suffered by plaintiff.
However, in Manchester, petitioner did not pay any additional docket fee until] the case was decided by this
Court on May 7, 1987. Thus, in Manchester, due to the fraud committed on the government, this Court held
Upon the filing of the complaint, the plaintiff paid the amount of only P410.00 for the docket fee based on the
that the court a quo did not acquire jurisdiction over the case and that the amended complaint could not have
nature of the action for specific performance where the amount involved is not capable of pecuniary been admitted inasmuch as the original complaint was null and void.
estimation. However, it was obvious from the allegations of the complaint as well as its designation that the
action was one for damages and specific performance. Thus, this court held the plaintiff must be assessed the
correct docket fee computed against the amount of damages of about P78 Million, although the same was not In the present case, a more liberal interpretation of the rules is called for considering that, unlike Manchester,
spelled out in the prayer of the complaint. private respondent demonstrated his willingness to abide by the rules by paying the additional docket fees as
required. The promulgation of the decision in Manchester must have had that sobering influence on private
respondent who thus paid the additional docket fee as ordered by the respondent court. It triggered his change
Meanwhile, plaintiff through another counsel, with leave of court, filed an amended complaint on September
of stance by manifesting his willingness to pay such additional docket fee as may be ordered.
12, 1985 by the inclusion of another co-plaintiff and eliminating any mention of the amount of damages in the
body of the complaint. The prayer in the original complaint was maintained.
Nevertheless, petitioners contend that the docket fee that was paid is still insufficient considering the total
amount of the claim. This is a matter which the clerk of court of the lower court and/or his duly authorized
On October 15, 1985, this Court ordered the re-assessment of the docket fee in the said case and other cases docket clerk or clerk in-charge should determine and, thereafter, if any amount is found due, he must require
that were investigated. On November 12, 1985, the trial court directed the plaintiff to rectify the amended
the private respondent to pay the same.
complaint by stating the amounts which they were asking for. This plaintiff did as instructed. In the body of
the complaint the amount of damages alleged was reduced to P10,000,000.00 but still no amount of damages
was specified in the prayer. Said amended complaint was admitted. Thus, the Court rules as follows:

Applying the principle in Magaspi that "the case is deemed filed only upon payment of the docket fee 1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the
regardless of the actual date of filing in court," this Court held that the trial court did not acquire jurisdiction prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action.
over the case by payment of only P410.00 for the docket fee. Neither can the amendment of the complaint Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may
thereby vest jurisdiction upon the Court. For all legal purposes there was no such original complaint duly filed allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or
which could be amended. Consequently, the order admitting the amended complaint and all subsequent reglementary period.
proceedings and actions taken by the trial court were declared null and void.
2. The same rule applies to permissive counterclaims, third party claims and similar pleadings, which shall not
The present case, as above discussed, is among the several cases of under-assessment of docket fee which be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow
were investigated by this Court together with Manchester. The facts and circumstances of this case are similar payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or
to Manchester. In the body of the original complaint, the total amount of damages sought amounted to about reglementary period.
P50 Million. In the prayer, the amount of damages asked for was not stated. The action was for the refund of
the premium and the issuance of the writ of preliminary attachment with damages. The amount of only 3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment
P210.00 was paid for the docket fee. On January 23, 1986, private respondent filed an amended complaint of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if
wherein in the prayer it is asked that he be awarded no less than P10,000,000.00 as actual and exemplary specified the same has been left for determination by the court, the additional filing fee therefor shall constitute
damages but in the body of the complaint the amount of his pecuniary claim is approximately P44,601,623.70. a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to
enforce said lien and assess and collect the additional fee.
WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of Court of the court a quo is hereby petitioner was unable to pay the loan when it became due and demandable, respondents Tan and Obiedo
instructed to reassess and determine the additional filing fee that should be paid by private respondent agreed to an extension of the same.
considering the total amount of the claim sought in the original complaint and the supplemental complaint as
may be gleaned from the allegations and the prayer thereof and to require private respondent to pay the
deficiency, if any, without pronouncement as to costs. In a Memorandum of Agreement dated 17 March 2005, respondents Tan and Obiedo granted petitioner until
31 December 2005 to settle its indebtedness, and condoned the interests, penalties and surcharges accruing
thereon from 1 October 2004 to 31 December 2005 which amounted to ₱74,678,647.00. The Memorandum of
SO ORDERED. Agreement required, in turn, that petitioner execute simultaneously with the said Memorandum, "by way of
dacion en pago," Deeds of Absolute Sale in favor of respondents Tan and Obiedo, covering the same parcels of
land subject of the mortgages. The Deeds of Absolute Sale would be uniformly dated 2 January 2006, and state
that petitioner sold to respondents Tan and Obiedo the parcels of land for the following purchase prices:

TCT No. Purchase Price

38376 ₱ 9,340,000.00
29918 ₱ 28,000,000.00
38374 ₱ 12,000,000.00
39232 ₱ 1,600,000.00
39225 ₱ 1,600,000.00

Petitioner could choose to pay off its indebtedness with individual or all five parcels of land; or it could
redeem said properties by paying respondents Tan and Obiedo the following prices for the same, inclusive of
interest and penalties:

TCT No. Redemption Price

38376 ₱ 25,328,939.00
29918 ₱ 35,660,800.00
38374 ₱ 28,477,600.00
39232 ₱ 6,233,381.00
39225 ₱ 6,233,381.00
G.R. No. 175914               February 10, 2009
RUBY SHELTER BUILDERS AND REALTY DEVELOPMENT CORPORATION, Petitioner, vs. In the event that petitioner is able to redeem any of the afore-mentioned parcels of land, the Deed of Absolute
HON. PABLO C. FORMARAN III, Presiding Judge of Regional Trial Court Branch 21, Naga City, as Pairing Sale covering the said property shall be nullified and have no force and effect; and respondents Tan and
Judge for Regional Trial Court Branch 22, Formerly Presided By HON. NOVELITA VILLEGAS-LLAGUNO Obiedo shall then return the owner’s duplicate of the corresponding TCT to petitioner and also execute a Deed
(Retired 01 May 2006), ROMEO Y. TAN, ROBERTO L. OBIEDO and ATTY. TOMAS A. of Discharge of Mortgage. However, if petitioner is unable to redeem the parcels of land within the period
REYES, Respondents. agreed upon, respondents Tan and Obiedo could already present the Deeds of Absolute Sale covering the same
to the Office of the Register of Deeds for Naga City so respondents Tan and Obiedo could acquire TCTs to the
DECISION said properties in their names.

CHICO-NAZARIO, J.: The Memorandum of Agreement further provided that should petitioner contest, judicially or otherwise, any
act, transaction, or event related to or necessarily connected with the said Memorandum and the Deeds of
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the Absolute Sale involving the five parcels of land, it would pay respondents Tan and Obiedo ₱10,000,000.00 as
reversal of the Decision dated 22 November 2006 of the Court of Appeals in CA-G.R. SP No. 94800. The liquidated damages inclusive of costs and attorney’s fees. Petitioner would likewise pay respondents Tan and
Court of Appeals, in its assailed Decision, affirmed the Order2 dated 24 March 2006 of the Regional Trial Obiedo the condoned interests, surcharges and penalties. Finally, should a contest arise from the Memorandum
Court (RTC), Branch 22, of Naga City, in Civil Case No. RTC-2006-0030, ordering petitioner Ruby Shelter of Agreement, Mr. Ruben Sia (Sia), President of petitioner corporation, personally assumes, jointly and
Builders and Realty Development Corporation to pay additional docket/filing fees, computed based on Section severally with petitioner, the latter’s monetary obligation to respondent Tan and Obiedo.
7(a) of Rule 141 of the Rules of Court, as amended.
Respondent Atty. Tomas A. Reyes (Reyes) was the Notary Public who notarized the Memorandum of
The present Petition arose from the following facts:
Agreement dated 17 March 2005 between respondent Tan and Obiedo, on one hand, and petitioner, on the
Petitioner obtained a loan in the total amount of ₱95,700,620.00 from respondents Romeo Y. Tan (Tan) and other.
Roberto L. Obiedo (Obiedo), secured by real estate mortgages over five parcels of land, all located in
Triangulo, Naga City, covered by Transfer Certificates of Title (TCTs) No. 38376, No. 29918, No. 38374, No. Pursuant to the Memorandum of Agreement, petitioner, represented by Mr. Sia, executed separate Deeds of
39232, and No. 39225, issued by the Registry of Deeds for Naga City, in the name of petitioner. When Absolute Sale, over the five parcels of land, in favor of respondents Tan and Obiedo. On the blank spaces
provided for in the said Deeds, somebody wrote the 3rd of January 2006 as the date of their execution. The (a) Restraining [herein respondents] Tan and Obiedo, their agents, privies or representatives, from committing
Deeds were again notarized by respondent Atty. Reyes also on 3 January 2006. act/s tending to alienate the mortgaged properties from the [herein petitioner] pending the resolution of the
case, including but not limited to the acts complained of in paragraph "14", above;
Without payment having been made by petitioner on 31 December 2005, respondents Tan and Obiedo (b) Restraining the Register of Deeds of Naga City from entertaining moves by the [respondents] to have
presented the Deeds of Absolute Sale dated 3 January 2006 before the Register of Deeds of Naga City on 8 [petitioner’s] certificates of title to the mortgaged properties cancelled and changed/registered in [respondents]
March 2006, as a result of which, they were able to secure TCTs over the five parcels of land in their names. Tan’s and Obiedo’s names, and/or released to them;
(c) After notice and hearing, that a writ of preliminary injunction be issued imposing the same restraints
On 16 March 2006, petitioner filed before the RTC a Complaint against respondents Tan, Obiedo, and Atty. indicated in the next preceding two paragraphs of this prayer; and
Reyes, for declaration of nullity of deeds of sales and damages, with prayer for the issuance of a writ of (d) After trial, judgment be rendered:
preliminary injunction and/or temporary restraining order (TRO). The Complaint was docketed as Civil Case
No. 2006-0030.
1. Making the injunction permanent;
2. Declaring the provision in the Memorandum of Agreement requiring the [petitioner] to execute deed of sales
On the basis of the facts already recounted above, petitioner raised two causes of action in its Complaint. (sic) in favor of the [respondents Tan and Obiedo] as dacion en pago in the event of non-payment of the debt
as pactum commissorium;
As for the first cause of action, petitioner alleged that as early as 27 December 2005, its President already 3. Annulling the Deed[s] of Sale for TCT Nos. 29918, 38374, 38376, 39225 and 39232, all dated January 3,
wrote a letter informing respondents Tan and Obiedo of the intention of petitioner to pay its loan and 2006, the same being in contravention of law;
requesting a meeting to compute the final amount due. The parties held meetings on 3 and 4 January 2006 but 4. Ordering the [respondents] jointly and solidarily to pay the [petitioner] actual damages of at least
they failed to arrive at a mutually acceptable computation of the final amount of loan payable. Respondents ₱300,000.00; attorney’s fees in the amount of ₱100,000.00 plus P1,000.00 per court attendance of counsel as
Tan and Obiedo then refused the request of petitioner for further dialogues. Unbeknownst to petitioner, despite appearance fee; litigation expenses in the amount of at least ₱10,000.00 and exemplary damages in the amount
the ongoing meetings, respondents Tan and Obiedo, in evident bad faith, already had the pre-executed Deeds of ₱300,000.00, plus the costs.
of Absolute Sale notarized on 3 January 2006 by respondent Atty. Reyes. Atty. Reyes, in connivance with
respondents Tan and Obiedo, falsely made it appear in the Deeds of Absolute Sale that Mr. Sia had personally [Petitioner] further prays for such other reliefs as may be proper, just and equitable under the premises.
acknowledged/ratified the said Deeds before Atty. Reyes.
Upon filing its Complaint with the RTC on 16 March 2006, petitioner paid the sum of ₱13,644.25 for docket
Asserting that the Deeds of Absolute Sale over the five parcels of land were executed merely as security for and other legal fees, as assessed by the Office of the Clerk of Court. The Clerk of Court initially considered
the payment of its loan to respondents Tan and Obiedo; that the Deeds of Absolute Sale, executed in Civil Case No. 2006-0030 as an action incapable of pecuniary estimation and computed the docket and other
accordance with the Memorandum of Agreement, constituted pactum commisorium and as such, were null and legal fees due thereon according to Section 7(b)(1), Rule 141 of the Rules of Court.
void; and that the acknowledgment in the Deeds of Absolute Sale were falsified, petitioner averred:
Only respondent Tan filed an Answer to the Complaint of petitioner. Respondent Tan did admit that meetings
13. That by reason of the fraudulent actions by the [herein respondents], [herein petitioner] is prejudiced and is were held with Mr. Sia, as the representative of petitioner, to thresh out Mr. Sia’s charge that the computation
now in danger of being deprived, physically and legally, of the mortgaged properties without benefit of legal by respondents Tan and Obiedo of the interests, surcharges and penalties accruing on the loan of petitioner was
processes such as the remedy of foreclosure and its attendant procedures, solemnities and remedies available to replete with errors and uncertainties. However, Mr. Sia failed to back up his accusation of errors and
a mortgagor, while [petitioner] is desirous and willing to pay its obligation and have the mortgaged properties uncertainties and to present his own final computation of the amount due. Disappointed and exasperated,
released respondents Tan and Obiedo informed Mr. Sia that they had already asked respondent Atty. Reyes to come
over to notarize the Deeds of Absolute Sale. Respondent Atty. Reyes asked Mr. Sia whether it was his
In support of its second cause of action, petitioner narrated in its Complaint that on 18 January 2006, signature appearing above his printed name on the Deeds of Absolute Sale, to which Mr. Sia replied yes. On 4
respondents Tan and Obiedo forcibly took over, with the use of armed men, possession of the five parcels of January 2006, Mr. Sia still failed to establish his claim of errors and uncertainties in the computation of the
land subject of the falsified Deeds of Absolute Sale and fenced the said properties with barbed wire. Beginning total amount which petitioner must pay respondent Tan and Obiedo. Mr. Sia, instead, sought a nine-month
3 March 2006, respondents Tan and Obiedo started demolishing some of the commercial spaces standing on extension for paying the loan obligation of petitioner and the reduction of the interest rate thereon to only one
the parcels of land in question which were being rented out by petitioner. Respondents Tan and Obiedo were percent (1%) per month. Respondents Tan and Obiedo rejected both demands.
also about to tear down a principal improvement on the properties consisting of a steel-and-concrete structure
housing a motor vehicle terminal operated by petitioner. The actions of respondents Tan and Obiedo were to Respondent Tan maintained that the Deeds of Absolute Sale were not executed merely as securities for the
the damage and prejudice of petitioner and its tenants/lessees. Petitioner, alone, claimed to have suffered at loan of petitioner. The Deeds of Absolute Sale over the five parcels of land were the consideration for the
least ₱300,000.00 in actual damages by reason of the physical invasion by respondents Tan and Obiedo and payment of the total indebtedness of petitioner to respondents Tan and Obiedo, and the condonation of the 15-
their armed goons of the five parcels of land. month interest which already accrued on the loan, while providing petitioner with the golden opportunity to
still redeem all or even portions of the properties covered by said Deeds. Unfortunately, petitioner failed to
Ultimately, petitioner’s prayer in its Complaint reads: exercise its right to redeem any of the said properties.

WHEREFORE, premises considered, it is most respectfully prayed of this Honorable Court that upon the Belying that they forcibly took possession of the five parcels of land, respondent Tan alleged that it was Mr.
filing of this complaint, a 72-hour temporary restraining order be forthwith issued ex parte: Sia who, with the aid of armed men, on board a Sports Utility Vehicle and a truck, rammed into the personnel
of respondents Tan and Obiedo causing melee and disturbance. Moreover, by the execution of the Deeds of
Absolute Sale, the properties subject thereof were, ipso jure, delivered to respondents Tan and Obiedo. The Petitioner moved for the partial reconsideration of the 24 March 2006 Order of the RTC, arguing that Civil
demolition of the existing structures on the properties was nothing but an exercise of dominion by respondents Case No. 2006-0030 was principally for the annulment of the Deeds of Absolute Sale and, as such, incapable
Tan and Obiedo. of pecuniary estimation. Petitioner submitted that the RTC erred in applying Section 7(a), Rule 141 of the
Rules of Court, as amended, to petitioner’s first cause of action in its Complaint in Civil Case No. 2006-0030.
Respondent Tan, thus, sought not just the dismissal of the Complaint of petitioner, but also the grant of his
counterclaim. The prayer in his Answer is faithfully reproduced below: In its Order dated 29 March 2006, the RTC refused to reconsider its 24 March 2006 Order, based on the
following ratiocination:
Wherefore, premises considered, it is most respectfully prayed that, after due hearing, judgment be rendered
dismissing the complaint, and on the counterclaim, [herein petitioner] and Ruben Sia, be ordered to indemnify, Analyzing, the action herein pertains to real property, for as admitted by the [herein petitioner], "the deeds of
jointly and severally [herein respondents Tan and Obiedo] the amounts of not less than ₱10,000,000.00 as sale in question pertain to real property" x x x. The Deeds of Sale subject of the instant case have already been
liquidated damages and the further sum of not less than ₱500,000.00 as attorney’s fees. In the alternative, and transferred in the name of the [herein respondents Tan and Obiedo].
should it become necessary, it is hereby prayed that [petitioner] be ordered to pay herein [respondents Tan and
Obiedo] the entire principal loan of ₱95,700,620.00, plus interests, surcharges and penalties computed from Compared with Quieting of Title, the latter action is brought when there is cloud on the title to real property or
March 17, 2005 until the entire sum is fully paid, including the amount of ₱74,678,647.00 foregone interest
any interest therein or to prevent a cloud from being cast upon title to the real property (Art. 476, Civil Code of
covering the period from October 1, 2004 to December 31, 2005 or for a total of fifteen (15) months, plus the Philippines) and the plaintiff must have legal or equitable title to or interest in the real property which is
incidental expenses as may be proved in court, in the event that Annexes "G" to "L" be nullified. Other relief
the subject matter of the action (Art. 447, ibid.), and yet plaintiff in QUIETING OF TITLE is required to pay
and remedies as are just and equitable under the premises are hereby prayed for. the fees in accordance with paragraph (a) of Section 7 of the said Amended Administrative Circular No. 35-
2004, hence, with more reason that the [petitioner] who no longer has title to the real properties subject of the
Thereafter, respondent Tan filed before the RTC an Omnibus Motion in which he contended that Civil Case instant case must be required to pay the required fees in accordance with Section 7(a) of the Amended
No. 2006-0030 involved real properties, the docket fees for which should be computed in accordance with Administrative Circular No. 35-2004 afore-mentioned.
Section 7(a), not Section 7(b)(1), of Rule 141 of the Rules of Court, as amended by A.M. No. 04-2-04-SC
which took effect on 16 August 2004. Since petitioner did not pay the appropriate docket fees for Civil Case Furthermore, while [petitioner] claims that the action for declaration of nullity of deed of sale and
No. 2006-0030, the RTC did not acquire jurisdiction over the said case. Hence, respondent Tan asked the RTC
memorandum of agreement is one incapable of pecuniary estimation, however, as argued by the [respondent
to issue an order requiring petitioner to pay the correct and accurate docket fees pursuant to Section 7(a), Rule Tan], the issue as to how much filing and docket fees should be paid was never raised as an issue in the case of
141 of the Rules of Court, as amended; and should petitioner fail to do so, to deny and dismiss the prayer of
Russell vs. Vestil, 304 SCRA 738.
petitioner for the annulment of the Deeds of Absolute Sale for having been executed in contravention of the
law or of the Memorandum of Agreement as pactum commisorium.
WHEREFORE, the Motion for Partial Reconsideration is hereby DENIED.
In a letter dated 19 April 2006, the RTC Clerk of Court computed, upon the request of counsel for the
As required by the RTC, the parties submitted their Position Papers on the matter. On 24 March 2006, the RTC petitioner, the additional docket fees petitioner must pay for in Civil Case No. 2006-0030 as directed in the
issued an Order17 granting respondent Tan’s Omnibus Motion. In holding that both petitioner and respondent
afore-mentioned RTC Orders. Per the computation of the RTC Clerk of Court, after excluding the amount
Tan must pay docket fees in accordance with Section 7(a), Rule 141 of the Rules of Court, as amended, the petitioner previously paid on 16 March 2006, petitioner must still pay the amount of ₱720,392.60 as docket
RTC reasoned:
fees.

It must be noted that under paragraph (b) 2. of the said Section 7, it is provided that QUIETING OF TITLE Petitioner, however, had not yet conceded, and it filed a Petition for Certiorari with the Court of Appeals; the
which is an action classified as beyond pecuniary estimation "shall be governed by paragraph (a)". Hence, the
petition was docketed as CA-G.R. SP No. 94800. According to petitioner, the RTC acted with grave abuse of
filing fee in an action for Declaration of Nullity of Deed which is also classified as beyond pecuniary
discretion, amounting to lack or excess of jurisdiction, when it issued its Orders dated 24 March 2006 and 29
estimation, must be computed based on the provision of Section 7(A) herein-above, in part, quoted.
March 2006 mandating that the docket/filing fees for Civil Case No. 2006-0030, an action for annulment of
deeds of sale, be assessed under Section 7(a), Rule 141 of the Rules of Court, as amended. If the Orders would
Since [herein respondent], Romeo Tan in his Answer has a counterclaim against the plaintiff, the former must not be revoked, corrected, or rectified, petitioner would suffer grave injustice and irreparable damage.
likewise pay the necessary filling (sic) fees as provided for under Section 7 (A) of Amended Administrative
Circular No. 35-2004 issued by the Supreme Court.
On 22 November 2006, the Court of Appeals promulgated its Decision wherein it held that:

Consequently, the RTC decreed on the matter of docket/filing fees:

Clearly, the petitioner’s complaint involves not only the annulment of the deeds of sale, but also the recovery
of the real properties identified in the said documents. In other words, the objectives of the petitioner in filing
WHEREFORE, premises considered, the [herein petitioner] is hereby ordered to pay additional filing fee and the complaint were to cancel the deeds of sale and ultimately, to recover possession of the same. It is therefore
the [herein respondent], Romeo Tan is also ordered to pay docket and filing fees on his counterclaim, both a real action.
computed based on Section 7(a) of the Supreme Court Amended Administrative Circular No. 35-2004 within
fifteen (15) days from receipt of this Order to the Clerk of Court, Regional Trial Court, Naga City and for the
Consequently, the additional docket fees that must be paid cannot be assessed in accordance with Section 7(b).
latter to compute and to collect the said fees accordingly.
As a real action, Section 7(a) must be applied in the assessment and payment of the proper docket fee.
Resultantly, there is no grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the Consistent with the liberal tenor of Sun Insurance, the RTC, instead of dismissing outright petitioner’s
court a quo. By grave abuse of discretion is meant capricious and whimsical exercise of judgment as is Complaint in Civil Case No. 2006-0030, granted petitioner time to pay the additional docket fees. Despite the
equivalent to lack of jurisdiction, and mere abuse of discretion is not enough – it must be grave. The abuse seeming munificence of the RTC, petitioner refused to pay the additional docket fees assessed against it,
must be grave and patent, and it must be shown that the discretion was exercised arbitrarily and despotically. believing that it had already paid the correct amount before, pursuant to Section 7(b)(1), Rule 141 of the Rules
of Court, as amended.
Such a situation does not exist in this particular case. The evidence is insufficient to prove that the court a quo
acted despotically in rendering the assailed orders. It acted properly and in accordance with law. Hence, error Relevant to the present controversy are the following provisions under Rule 141 of the Rules of Court, as
cannot be attributed to it. amended by A.M. No. 04-2-04-SC and Supreme Court Amended Administrative Circular No. 35-200431 :

Hence, the fallo of the Decision of the appellate court reads: SEC. 7. Clerks of Regional Trial Courts. –

WHEREFORE, the petition for certiorari is DENIED. The assailed Orders of the court a quo are AFFIRMED. (a) For filing an action or a permissive OR COMPULSORY counterclaim, CROSS-CLAIM, or money claim
against an estate not based on judgment, or for filing a third-party, fourth-party, etc. complaint, or a complaint-
Without seeking reconsideration of the foregoing Decision with the Court of Appeals, petitioner filed its in-intervention, if the total sum claimed, INCLUSIVE OF INTERESTS, PENALTIES, SURCHARGES,
Petition for Review on Certiorari before this Court, with a lone assignment of error, to wit: DAMAGES OF WHATEVER KIND, AND ATTORNEY’S FEES, LITIGATIO NEXPENSES AND COSTS
and/or in cases involving property, the FAIR MARKET value of the REAL property in litigation STATED IN
THE CURRENT TAX DECLARATION OR CURRENT ZONAL VALUATION OF THE BUREAU OF
18. The herein petitioner most respectfully submits that the Court of Appeals committed a grave and serious INTERNAL REVENUE, WHICHEVER IS HIGHER, OR IF THERE IS NONE, THE STATED VALUE OF
reversible error in affirming the assailed Orders of the Regional Trial Court which are clearly contrary to the THE PROPERTY IN LITIGATION OR THE VALUE OF THE PERSONAL PROPERTY IN LITIGATION
pronouncement of this Honorable Court in the case of Spouses De Leon v. Court of Appeals, G.R. No. OR THE VALUE OF THE PERSONAL PROPERTY IN LITIGATION AS ALLEGED BY THE
104796, March 6, 1998, not to mention the fact that if the said judgment is allowed to stand and not rectified, CLAIMANT, is:[Table of fees omitted.]
the same would result in grave injustice and irreparable damage to herein petitioner in view of the prohibitive
amount assessed as a consequence of said Orders
If the action involves both a money claim and relief pertaining to property, then THE fees will be charged on
both the amounts claimed and value of property based on the formula prescribed in this paragraph a.
In Manchester Development Corporation v. Court of Appeals, the Court explicitly pronounced that "[t]he court
acquires jurisdiction over any case only upon the payment of the prescribed docket fee." Hence, the payment
of docket fees is not only mandatory, but also jurisdictional. (b) For filing:
1. Actions where the value of the subject matter cannot be estimated
2. Special civil actions, except judicial foreclosure of mortgage, EXPROPRIATION
In Sun Insurance Office, Ltd. (SIOL) v. Asuncion,29 the Court laid down guidelines for the implementation of PROCEEDINGS, PARTITION AND QUIETING OF TITLE which will
its previous pronouncement in Manchester under particular circumstances, to wit:
3. All other actions not involving property
1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the
prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action.
Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may [Table of fees omitted.]
allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or
reglementary period. The docket fees under Section 7(a), Rule 141, in cases involving real property depend on the fair market value
of the same: the higher the value of the real property, the higher the docket fees due. In contrast, Section 7(b)
2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not (1), Rule 141 imposes a fixed or flat rate of docket fees on actions incapable of pecuniary estimation.
be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow
payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or In order to resolve the issue of whether petitioner paid the correct amount of docket fees, it is necessary to
reglementary period. determine the true nature of its Complaint. The dictum adhered to in this jurisdiction is that the nature of an
action is determined by the allegations in the body of the pleading or Complaint itself, rather than by its title or
3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment heading.32 However, the Court finds it necessary, in ascertaining the true nature of Civil Case No. 2006-0030,
of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if to take into account significant facts and circumstances beyond the Complaint of petitioner, facts and
specified the same has been left for determination by the court, the additional filing fee therefor shall constitute circumstances which petitioner failed to state in its Complaint but were disclosed in the preliminary
a lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly authorized deputy to proceedings before the court a quo.
enforce said lien and assess and collect the additional fee.
Petitioner persistently avers that its Complaint in Civil Case No. 2006-0030 is primarily for the annulment of
In the Petition at bar, the RTC found, and the Court of Appeals affirmed, that petitioner did not pay the correct the Deeds of Absolute Sale. Based on the allegations and reliefs in the Complaint alone, one would get the
amount of docket fees for Civil Case No. 2006-0030. According to both the trial and appellate courts, impression that the titles to the subject real properties still rest with petitioner; and that the interest of
petitioner should pay docket fees in accordance with Section 7(a), Rule 141 of the Rules of Court, as amended. respondents Tan and Obiedo in the same lies only in the Deeds of Absolute Sale sought to be annulled.
What petitioner failed to mention in its Complaint was that respondents Tan and Obiedo already had the In his amended petition, respondent Manalo prayed that NTA’s sale of the property in dispute to Standford
Memorandum of Agreement, which clearly provided for the execution of the Deeds of Absolute Sale, East Realty Corporation and the title issued to the latter on the basis thereof, be declared null and void. In a
registered on the TCTs over the five parcels of land, then still in the name of petitioner. After respondents Tan very real sense, albeit the amended petition is styled as one for "Mandamus with Revocation of Title and
and Obiedo had the Deeds of Absolute Sale notarized on 3 January 2006 and presented the same to Register of Damages," it is, at bottom, a suit to recover from Standford the realty in question and to vest in respondent the
Deeds for Naga City on 8 March 2006, they were already issued TCTs over the real properties in question, in ownership and possession thereof. In short, the amended petition is in reality an action in res or a real action.
their own names. Respondents Tan and Obiedo have also acquired possession of the said properties, enabling Our pronouncement in Fortune Motors (Phils.), Inc. vs. Court of Appeals is instructive. There, we said:
them, by petitioner’s own admission, to demolish the improvements thereon.
A prayer for annulment or rescission of contract does not operate to efface the true objectives and nature of the
It is, thus, suspect that petitioner kept mum about the afore-mentioned facts and circumstances when they had action which is to recover real property. (Inton, et al., v. Quintan, 81 Phil. 97, 1948)
already taken place before it filed its Complaint before the RTC on 16 March 2006. Petitioner never expressed
surprise when such facts and circumstances were established before the RTC, nor moved to amend its
An action for the annulment or rescission of a sale of real property is a real action. Its prime objective is to
Complaint accordingly. Even though the Memorandum of Agreement was supposed to have long been recover said real property. (Gavieres v. Sanchez, 94 Phil. 760, 1954)
registered on its TCTs over the five parcels of land, petitioner did not pray for the removal of the same as a
cloud on its title. In the same vein, although petitioner alleged that respondents Tan and Obiedo forcibly took
physical possession of the subject real properties, petitioner did not seek the restoration of such possession to An action to annul a real estate mortgage foreclosure sale is no different from an action to annul a private sale
itself. And despite learning that respondents Tan and Obiedo already secured TCTs over the subject properties of real property. (Muñoz v. Llamas, 87 Phil. 737, 1950).
in their names, petitioner did not ask for the cancellation of said titles. The only logical and reasonable
explanation is that petitioner is reluctant to bring to the attention of the Court certain facts and circumstances, While it is true that petitioner does not directly seek the recovery of title or possession of the property in
keeping its Complaint safely worded, so as to institute only an action for annulment of Deeds of Absolute Sale. question, his action for annulment of sale and his claim for damages are closely intertwined with the issue of
Petitioner deliberately avoided raising issues on the title and possession of the real properties that may lead the ownership of the building which, under the law, is considered immovable property, the recovery of which is
Court to classify its case as a real action. petitioner's primary objective. The prevalent doctrine is that an action for the annulment or rescission of a sale
of real property does not operate to efface the fundamental and prime objective and nature of the case, which is
No matter how fastidiously petitioner attempts to conceal them, the allegations and reliefs it sought in its to recover said real property. It is a real action.
Complaint in Civil Case No. 2006-0030 appears to be ultimately a real action, involving as they do the
recovery by petitioner of its title to and possession of the five parcels of land from respondents Tan and Unfortunately, and evidently to evade payment of the correct amount of filing fee, respondent Manalo never
Obiedo. alleged in the body of his amended petition, much less in the prayer portion thereof, the assessed value of the
subject res, or, if there is none, the estimated value thereof, to serve as basis for the receiving clerk in
A real action is one in which the plaintiff seeks the recovery of real property; or, as indicated in what is now computing and arriving at the proper amount of filing fee due thereon, as required under Section 7 of this
Section 1, Rule 4 of the Rules of Court, a real action is an action affecting title to or recovery of possession of Court’s en banc resolution of 04 September 1990 (Re: Proposed Amendments to Rule 141 on Legal Fees).
real property.
Even the amended petition, therefore, should have been expunged from the records.
Section 7, Rule 141 of the Rules of Court, prior to its amendment by A.M. No. 04-2-04-SC, had a specific
paragraph governing the assessment of the docket fees for real action, to wit: In fine, we rule and so hold that the trial court never acquired jurisdiction over its Civil Case No. Q-95-
24791.36
In a real action, the assessed value of the property, or if there is none, the estimated value thereof shall be It was in Serrano v. Delica however, that the Court dealt with a complaint that bore the most similarity to the
alleged by the claimant and shall be the basis in computing the fees. one at bar. Therein respondent Delica averred that undue influence, coercion, and intimidation were exerted
upon him by therein petitioners Serrano, et al. to effect transfer of his properties. Thus, Delica filed a
It was in accordance with the afore-quoted provision that the Court, in Gochan v. Gochan, held that although complaint before the RTC against Serrano, et al., praying that the special power of attorney, the affidavit, the
the caption of the complaint filed by therein respondents Mercedes Gochan, et al. with the RTC was new titles issued in the names of Serrano, et al., and the contracts of sale of the disputed properties be
denominated as one for "specific performance and damages," the relief sought was the conveyance or transfer cancelled; that Serrano, et al. be ordered to pay Delica, jointly and severally, actual, moral and exemplary
of real property, or ultimately, the execution of deeds of conveyance in their favor of the real properties
damages in the amount of ₱200,000.00, as well as attorney’s fee of ₱200,000.00 and costs of litigation; that a
enumerated in the provisional memorandum of agreement. Under these circumstances, the case before the
RTC was actually a real action, affecting as it did title to or possession of real property. Consequently, the TRO and a writ of preliminary injunction be issued ordering Serrano, et al. to immediately restore him to his
basis for determining the correct docket fees shall be the assessed value of the property, or the estimated value possession of the parcels of land in question; and that after trial, the writ of injunction be made permanent. The
thereof as alleged in the complaint. But since Mercedes Gochan failed to allege in their complaint the value of Court dismissed Delica’s complaint for the following reasons:
the real properties, the Court found that the RTC did not acquire jurisdiction over the same for non-payment of
the correct docket fees. A careful examination of respondent’s complaint is that it is a real action. In Paderanga vs. Buissan, we held
that "in a real action, the plaintiff seeks the recovery of real property, or, as stated in Section 2(a), Rule 4 of the
Likewise, in Siapno v. Manalo,35 the Court disregarded the title/denomination of therein plaintiff Manalo’s Revised Rules of Court, a real action is one ‘affecting title to real property or for the recovery of possession of,
amended petition as one for Mandamus with Revocation of Title and Damages; and adjudged the same to be a or for partition or condemnation of, or foreclosure of a mortgage on a real property.’"
real action, the filing fees for which should have been computed based on the assessed value of the subject
property or, if there was none, the estimated value thereof. The Court expounded in Siapno that:
Obviously, respondent’s complaint is a real action involving not only the recovery of real properties, but computation of the docket fees. Would such an amendment have an impact on Gochan, Siapno, and Serrano?
likewise the cancellation of the titles thereto. The Court rules in the negative.

Considering that respondent’s complaint is a real action, the Rule requires that "the assessed value of the A real action indisputably involves real property. The docket fees for a real action would still be determined in
property, or if there is none, the estimated value thereof shall be alleged by the claimant and shall be the basis accordance with the value of the real property involved therein; the only difference is in what constitutes the
in computing the fees." acceptable value. In computing the docket fees for cases involving real properties, the courts, instead of relying
on the assessed or estimated value, would now be using the fair market value of the real properties (as stated in
the Tax Declaration or the Zonal Valuation of the Bureau of Internal Revenue, whichever is higher) or, in the
We note, however, that neither the "assessed value" nor the "estimated value" of the questioned parcels of land absence thereof, the stated value of the same.
were alleged by respondent in both his original and amended complaint. What he stated in his amended
complaint is that the disputed realties have a "BIR zonal valuation" of ₱1,200.00 per square meter. However,
In sum, the Court finds that the true nature of the action instituted by petitioner against respondents is the
the alleged "BIR zonal valuation" is not the kind of valuation required by the Rule. It is the assessed value of
recovery of title to and possession of real property. It is a real action necessarily involving real property, the
the realty. Having utterly failed to comply with the requirement of the Rule that he shall allege in his
docket fees for which must be computed in accordance with Section 7(1), Rule 141 of the Rules of Court, as
complaint the assessed value of his real properties in controversy, the correct docket fee cannot be computed.
amended. The Court of Appeals, therefore, did not commit any error in affirming the RTC Orders requiring
As such, his complaint should not have been accepted by the trial court. We thus rule that it has not acquired
petitioner to pay additional docket fees for its Complaint in Civil Case No. 2006-0030.
jurisdiction over the present case for failure of herein respondent to pay the required docket fee. On this
ground alone, respondent’s complaint is vulnerable to dismissal
The Court does not give much credence to the allegation of petitioner that if the judgment of the Court of
Appeals is allowed to stand and not rectified, it would result in grave injustice and irreparable injury to
Brushing aside the significance of Serrano, petitioner argues that said decision, rendered by the Third Division
petitioner in view of the prohibitive amount assessed against it. It is a sweeping assertion which lacks
of the Court, and not by the Court en banc, cannot modify or reverse the doctrine laid down in Spouses De
evidentiary support. Undeniably, before the Court can conclude that the amount of docket fees is indeed
Leon v. Court of Appeals Petitioner relies heavily on the declaration of this Court in Spouses De Leon that an
prohibitive for a party, it would have to look into the financial capacity of said party. It baffles this Court that
action for annulment or rescission of a contract of sale of real property is incapable of pecuniary estimation.
herein petitioner, having the capacity to enter into multi-million transactions, now stalls at paying ₱720,392.60
additional docket fees so it could champion before the courts its rights over the disputed real properties.
The Court, however, does not perceive a contradiction between Serrano and the Spouses De Leon. The Court Moreover, even though the Court exempts individuals, as indigent or pauper litigants, from paying docket fees,
calls attention to the following statement in Spouses De Leon: "A review of the jurisprudence of this Court it has never extended such an exemption to a corporate entity.WHEREFORE, premises considered, the
indicates that in determining whether an action is one the subject matter of which is not capable of pecuniary instant Petition for Review is hereby DENIED. The Decision, dated 22 November 2006, of the Court of
estimation, this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy Appeals in CA-G.R. SP No. 94800, which affirmed the Orders dated 24 March 2006 and 29 March 2006 of the
sought." Necessarily, the determination must be done on a case-to-case basis, depending on the facts and RTC, Branch 22, of Naga City, in Civil Case No. RTC-2006-0030, ordering petitioner Ruby Shelter Builders
circumstances of each. What petitioner conveniently ignores is that in Spouses De Leon, the action therein that and Realty Development Corporation to pay additional docket/filing fees, computed based on Section 7(a),
private respondents instituted before the RTC was "solely for annulment or rescission" of the contract of sale Rule 141 of the Rules of Court, as amended, is hereby AFFIRMED. Costs against the petitioner
over a real property.40 There appeared to be no transfer of title or possession to the adverse party. Their
complaint simply prayed for:

1. Ordering the nullification or rescission of the Contract of Conditional Sale (Supplementary Agreement) for
having violated the rights of plaintiffs (private respondents) guaranteed to them under Article 886 of the Civil
Code and/or violation of the terms and conditions of the said contract.
2. Declaring void ab initio the Deed of Absolute Sale for being absolutely simulated; and
3. Ordering defendants (petitioners) to pay plaintiffs (private respondents) attorney's fees in the amount of
₱100,000.00

As this Court has previously discussed herein, the nature of Civil Case No. 2006-0030 instituted by petitioner
before the RTC is closer to that of Serrano, rather than of Spouses De Leon, hence, calling for the application
of the ruling of the Court in the former, rather than in the latter.

It is also important to note that, with the amendments introduced by A.M. No. 04-2-04-SC, which became
effective on 16 August 2004, the paragraph in Section 7, Rule 141 of the Rules of Court, pertaining
specifically to the basis for computation of docket fees for real actions was deleted. Instead, Section 7(1) of
Rule 141, as amended, provides that "in cases involving real property, the FAIR MARKET value of the REAL
property in litigation STATED IN THE CURRENT TAX DECLARATION OR CURRENT ZONAL
VALUATION OF THE BUREAU OF INTERNAL REVENUE, WHICH IS HIGHER, OR IF THERE IS
NONE, THE STATED VALUE OF THE PROPERTY IN LITIGATION x x x" shall be the basis for the
 01251-MIN on the ground of such remand being a deviation from the rulings of the Court to the effect that the
courts would acquire jurisdiction over cases only upon the payment of the prescribed docket fees.

Antecedents

Pangcatan commenced Civil Case No. 1888-02 in the RTC to recover various damages he had suffered in
April 2002 from the vehicular accident caused by the negligence of the defendants. Defendants Alexandro
"Dodong" Maghuyop and Belindo Bankiao, the petitioners in G.R. No. 194568, were respectively the owner
and driver of the passenger van that Pangcatan had hired to transport himself and the goods he had purchased
in Pagadian City to his store in Margosatubig, Zamboanga del Sur. Based on the police report on the vehicular
accident, Bankiao had stopped his vehicle in the middle of the right lane of the highway in order to call for
more passengers when the dump truck of defendant Engr. Arnulfo Garcia then driven by defendant Eldefonso
Densing suddenly bumped the rear of the van, causing Pangcatan to lose consciousness. After Pangcatan
regained consciousness in the hospital, he discovered that his right leg had been fractured, and that he had lost
all the goods he had bought in Pagadian City.

Pangcatan's complaint alleged that his estimated daily income before the accident was P400.00/day; that
because of his injury, he could never sell again or engage in any other business; and that his medical bills and
the costs of his surgical operation would easily run up to P500,000.00. 7 When he filed his complaint in
September 2002, Pangcatan also filed his Ex Parte Motion for Leave to File Case as Pauper Litigant, which
the RTC granted through its order of September 4, 2002 under the condition that the filing fees would
constitute a first lien on any favorable monetary judgment that he would recover from the suit.

Instead of filing their answer, Maghuyop and Bankiao moved to dismiss the complaint based on several
grounds, namely: (1) that the venue was improperly laid; (2) that the complaint stated no cause of action
G.R. No. 194412, November 16, 2016 against them; (3) that the claim or demand had been paid or otherwise extinguished; (4) that the plaintiff was
SAMSODEN PANGCATAN, Petitioner, v. ALEXANDRO "DODONG" MAGHUYOP AND BELINDO estopped from filing the case; (5) that the plaintiff did not comply with a condition precedent; and (6) that the
BANKIAO, Respondents. plaintiff, a well known businessman and resident of Margosatubig, Zamboanga del Sur, was not an indigent
litigant.
G.R. No. 194566, November 16, 2016 On January 27, 2003, the RTC denied the motion to dismiss because the movants did not substantiate the
ALEXANDRO "DODONG" MAGHUYOP AND BELINDO BANKIAO, Petitioners, v. SAMSODEN grounds of the motion on the day of the hearing thereof.
PANGCATAN, Respondent.
DECISION Maghuyop and Bakiao did not file their answer subsequently, and were declared in default as a consequence.
Pangcatan then presented ex parte his evidence against them. Later on, they submitted their Comment and
BERSAMIN, J.: Opposition to Plaintiff's Formal Offer of Evidence with Motion to Strike Out All Pleadings filed by the
Plaintiff, whereby they maintained that Pangcatan was not an indigent litigant based on his offer of
The issue is whether or not the Court of Appeals (CA) justifiably annulled and set aside the judgment of the
documentary evidence and his pleadings, and that, as such, he was not entitled to the services and
Regional Trial Court (RT) in favor of the plaintiff on the ground that the RTC had not received evidence
representation of any lawyer from the Public Attorney's Office; that the RTC did not acquire jurisdiction over
showing said party's being an indigent litigant exempt from the payment of filing fees.
the case by virtue of the non-payment of the required docket fees; and that the complaint should be expunged
The Cases from the records.

G.R. No. 194412 is the appeal brought by Samsoden Pangcatan, the plaintiff in Civil Case No. 1888-02 The RTC denied the Motion to Strike Out All Pleadings filed by the Plaintiff through the order of August 22,
entitled Samsoden Pangcatan v. Alexandra "Dodong" Maghuyop, Belinda Bankiao, Engr. Arnulfo Garcia and 2006.
Eldefonso Densing, to reverse and set aside the decision promulgated on December 18, 2009, whereby the
It is noted that the RTC dismissed the complaint against Engr. Garcia and Densing because they had entered
Court of Appeals (CA), in C.A.-G.R. CV No. 01251-MIN, annulled and set aside the decision rendered on
into a compromise with Pangcatan.
February 9, 2007 by the Regional Trial Court (RTC), Branch 8, in Marawi City on the ground that the RTC
had improperly allowed the filing of the suit on the basis of his being an indigent litigant despite not having Judgment of the RTC
received evidence of his indigency pursuant to the guidelines and standards set and defined by Section 21,
Rule 3 and Section 19, Rule 141 of the Rules of Court. The nullification of the decision of the RTC On February 9, 2007, the RTC rendered judgment in favor of Pangcatan and against Maghuyop and
notwithstanding, the CA remanded the case, and required the RTC to hear and resolve the plaintiff's Ex Parte Bankiao, disposing thusly:
Motion for Leave to File Case as Pauper Litigant in accordance with said guidelines and standards.
Defendants Alexandro Maghuyop and Belindo Bankiao are ordered to pay the plaintiff (Pangcatan) jointly and
G.R. No. 194566 is the appeal brought by the defendants in Civil Case No. 1888-02 to reverse the remand of severally the following amounts:
the case to the RTC pursuant to the same decision of December 18, 2009 promulgated in CA-G.R. CV No.
1) P50,000.00 as medical expenses incurred from April to August 2002;
2) P34,465.00 for the cost of the lost goods; The rule in this jurisdiction is that when an action is filed in court, the complaint must be accompanied by the
3) the unrealized profit of P400.00 a day counting from April 5, 2002 up to the present; payment of the requisite docket and filing fees Section 1, Rule 141 of the Rules of Court expressly requires that
4) P10,000.00 as transportation expenses incurred; upon the filing of the pleading or other application that initiates an action or proceeding, the prescribed fees for
such action or proceeding shall be paid in full. If the complaint is filed but the prescribed fees are not paid at
5) P200,000.00 as moral damages;
the time of filing, the courts acquire jurisdiction only upon the full payment of such fees within a reasonable
6) P100,000.00 as exemplary damages; and time as the courts may grant, barring prescription.
7) To pay the costs.
SO ORDERED. Nonetheless, Section 11, Article III of the Constitution has guaranteed free access to the courts, to wit:
Decision of the CA
Section 11. Free access to the courts and quasi-judicial bodies and adequate legal assistance shall not be denied
Maghuyop and Bankiao appealed, contending that the RTC erred in acquiring jurisdiction over the claim of to any person by reason of poverty.
Pangcatan; and that the RTC further erred in rendering judgment in favor of Pangcatan and against them.
This guarantee of free access to the courts is extended to litigants who may be indigent by exempting them
As stated, on December 18, 2009, the CA promulgated the now assailed decision,viz.: from the obligation to pay docket and filing fees. But not everyone who claims to be indigent may demand free
access to the courts. In Re: Query of Mr. Roger C. Prioreschi Re Exemption from Legal and Filing Fees of the
ACCORDINGLY, the appealed decision in Civil Case No. 1888-02 before the Marawi City RTC, Branch 8, is Good Shepherd Foundation, Inc., the Court has declared that the exemption may be extended only to natural
ANNULLED and SET ASIDE. The case is REMANDED to the RTC a quo which is ordered to hear the party litigants; the exemption may not be extended to juridical persons even if they worked for indigent and
plaintiff-appellee's Ex-Parte Motion for Leave to File Case as Pauper Litigant, applying Rule 3, Section 21 of underprivileged people because the Constitution has explicitly premised the free access clause on a person's
the Rules of Court to determine whether plaintiff-appellee can qualify as an indigent litigant; and, after which poverty, a condition that only a natural person can suffer. To prevent the abuse of the exemption, therefore, the
to decide the case on the merits with dispatch. Court has incorporated Section 21, Rule 3 and Section 19, Rule 141 in the Rules of Court in order to set the
guidelines implementing as well as regulating the exercise of the right of free access to the courts. The
SO ORDERED. procedure governing an application for authority to litigate as an indigent party as provided under Section 21,
Rule 3 and Section 19, Rule 141 of the Rules of Court have been synthesized in Algura v. The Local
Hence, the appeals now under consideration. Government Unit of the City of Naga.
Issues Algura stipulates that when the application to litigate as an indigent litigant is filed, the trial court shall
scrutinize the affidavits and supporting documents submitted by the applicant to determine if he complies with
Pangcatan submits that the CA erred because he was exempt from the payment of docket fees by virtue of his
the income and property standards prescribed in the present Section 19 of Rule 141—that his gross income and
being a client of the Public Attorney's Office (PAO), the exemption being pursuant to Republic Act No. 9406
that of his immediate family do not exceed an amount double the monthly minimum wage of an employee; and
and OCA Circular No. 121-2007, under which the clients of the PAO were exempt from the payment of docket
that he does not own real property with a fair market value of more than P300,000.00; that if the trial court
and other fees incidental to the filing of actions in court, whether as original or appellate proceedings. He
finds that he meets the income and property requirements, the authority to litigate as indigent litigant is
argues that OCA Circular No. 121-2007 revoked OCA Circular No. 67-2007;that his having passed the
automatically granted, and the grant is a matter of right; that, however, if the trial court finds that one or both
indigency test of the PAO entitled him to the exemption; that although Republic Act No. 9406 was not yet
requirements have not been met, it should then set a hearing to enable the applicant to prove that he has "no
enacted at the time of the filing of his complaint in the RTC, the manner of a PAO client establishing his
money or property sufficient and available for food, shelter and basic necessities for himself and his family;"
indigency was procedural in nature, and, therefore, Republic Act No. 9406 retroactively applied to him; and
that in that hearing, the adverse party may adduce countervailing evidence to disprove the evidence presented
that the order of the CA remanding his case to the RTC for determination of his indigency was not only
by the applicant; that, afterwards, the trial court will rule on the application depending on the evidence
contrary to law but also impractical.
adduced; that, in addition, Section 21 of Rule 3 provides that the adverse party may later still contest the grant
On their part, Maghuyop and Bankiao mainly contend that Pangcatan was not a indigent litigant because his of such authority at any time before judgment is rendered by the trial court, possibly based on newly
estimated daily earnings had amounted to P400.00; that he had been considered as a pauper litigant by the discovered evidence not obtained at the time the application was heard; that, if the trial court determines after
PAO without complying with the requirements of Section 19, Rule 141 of the Rules of Court, like the hearing that the party declared as an indigent is in fact a person with sufficient income or property, the proper
submission of the affidavit stating: (1) that his gross income and that of his immediate family did not exceed docket and other lawful fees shall be assessed and collected by the clerk of court; and that if payment is not
an amount double the monthly minimum wage of an employee; and (2) that he did not own real property with made within the time fixed by the trial court, execution shall issue or the payment of the prescribed fees shall
a fair market value of more than P300,000.00, as stated in the appended current tax declaration; that such be made, without prejudice to other sanctions that the trial court may impose.
affidavit of the indigent client was required to be corroborated by the affidavit of a disinterested person
The RTC allowed Pangcatan to litigate as an indigent party at the start of the case by approving his Ex Parte
attesting to the truth of the former, but such corroborating affidavit he also did not submit; and that the RTC
Motion for Leave to File Case as Pauper Litigant. The RTC dismissed the objections interposed by Maghuyop
did not acquire jurisdiction over the case because Pangcatan did not pay docket fees.
and Bankiao in their motion to dismiss, which included his not being an indigent litigant, because they did not
Did the CA err in setting aside the judgment of the RTC, and in remanding the case to the RTC for the substantiate the grounds of their motion on the day of the hearing of the motion.24 On appeal to the CA,
determination of whether or not Pangcatan was exempt from the payment of filing and docket fees as an Maghuyop and Bankiao reiterated their objection based on Pangcatan's not being an indigent litigant, and
indigent litigant? submitted that the CA did not consequently acquire jurisdiction over his claim against them.

Ruling of the Court As earlier mentioned, the CA promulgated its now assailed decision annulling and setting aside the judgment
of the RTC based on the non-payment of the filing fees although it remanded the case for the purpose of
The petition for review in G.R. No. 194412 is granted, but the petition for review in G.R. No. 194566 is receiving evidence from Pangcatan upon which the RTC could determine if he was exempt therefrom as an
denied. indigent litigant, or not. It opined as follows:
In the instant case, defendants-appellants maintain that plaintiff-appellee's ex parte motion to litigate as an of the aforementioned guidelines set by the Rules of Court that Pangcatan was entitled to be exempted from
indigent is defective since it was not accompanied or supported by the required affidavits executed by the the payment of the filing fees because his daily income was P400.00.
latter attesting that he and his immediate family do not earn the gross income of PhP3,000.00, and that they do
not own any real property with an assessed value of more than PhP300,000.00, and by a disinterested person It is true that the non-payment of the filing fees usually prevents the trial court from acquiring jurisdiction over
attesting to the truth of his affidavit. the claim stated in the complaint But for the CA to annul the judgment rendered after trial based solely on such
non-payment was not right and just considering that the non-payment of the filing fees had not been entirely
The argument is well taken. Section 19 clearly states that the litigant shall execute the required affidavits in attributable to the plaintiff alone. The trial court was more, if not exclusively, to blame for the omission. For
order to support by sufficient evidence his indigent status. It appears from the record that plaintiff-appellee sure, all that Pangcatan had done was to apply for the exemption, leaving to the RTC the decision whether or
was exempted from payment of legal fees on account of his alleged poverty. Yet there is scant evidence of not to grant his application. Moreover, the CA disregarded the fact that the RTC, through its order of
that. Samsoden failed to meet the evidentiary requirements for prosecuting a motion to litigate as an indigent September 4, 2002,26 had granted his Ex Parte Motion for Leave to File Case as Pauper Litigant  and had
party. What he has presented before the court a quo was only a Certification from the Office of the Provincial allowed him to litigate as an indigent party subject to the condition that the legal fees would constitute a first
Assessor's Office that he has no land holdings or real properties. Quite clearly, the court a quo has erroneously lien on the monetary judgment to be rendered after trial.
allowed the suit in forma pauperis without following the requirement of the Rules. But just because the court
below has so erred does not mean We should at once castigate plaintiff-appellee by outrightly dismissing his At any rate, Pangcatan was represented from the start by the Public Attorney's Office (PAO). The exemption
complaint outright (sic) for non-payment of the docket fees. of the clients of the PAO like him from the payment of the legal fees was expressly declared by law for the
first time in Republic Act No. 9406,27 particularly its amendment of Section 16-D of the Administrative Code
Examining the pertinent rules, We note that while Rule 141, Section 19 lays down specific standards, Rule 3, of 1987, as follows:
Section 21 does not clearly draw the parameters for exemption from payment of fees in case of an indigent
party. Knowing that litigants may abuse the grant of authority, the trial court must use sound discretion and Section 16-D. Exemption from Fees and Costs of the Suit.- The clients of the PAO shall be exempt from
scrutinize evidence strictly in granting exemptions in order to determine whether the applicant has hurdled the payment of docket and other fees incidental to instituting an action in court and other quasi-judicial
precise standards under Rule 141. The trial court must also guard against abuse and misuse of the privilege to bodies, as an original proceeding or on appeal. The costs of the suit, attorney's fees and contingent fees
litigate as an indigent litigant to prevent the filing of exorbitant claims which would otherwise be regulated by imposed upon the adversary of the PAO clients after a successful litigation shall be deposited in the National
a legal fee requirement. Treasury as trust fund and shall be disbursed for special allowances of authorized officials and lawyers of the
PAO.
Thus, a remand of the case is warranted for the trial court to determine whether plaintiff-appellee can be
considered as an indigent litigant using the standards set in Rule 3, Section 21. Plaintiff-appellee must produce Such exemption by virtue of Republic Act No. 9406 was recognized by the Court Administrator through OCA
affidavits and supporting documents showing that he satisfies the twin requirements on gross monthly income Circular No. 67-2007, but the clients of the PAO remained required to submit relevant documentation to
and ownership of real property under Rule 141. Otherwise, the trial court should call a hearing as required by comply with the conditions prescribed by Section 19, Rule 141 of the Rules of Court. Later on, the Court
Rule 3, Section 21 to enable plaintiff-appellee to adduce evidence to show that he does not have property and Administrator removed the conditions prescribed under OCA Circular No. 67-2007 by issuing Circular No.
money sufficient and available for food, shelter, and basic necessities for him and his family. In that hearing, 121-2007.Since then until the present, all clients of the PAO have been exempt from the payment of docket
the defendants-appellants would have the right to also present evidence to refute the allegations and evidence and other fees incidental to instituting an action in court whether as an original proceeding or on appeal.
in support of the application of plaintiff-appellee to litigate as an indigent litigant.
It is notable that the Court has pointed out in its ruling in Re: Petition for Recognition of the Exemption of the
To recapitulate the rules on indigent litigants, if the applicant for exemption meets the salary and property Government Service Insurance System from Payment of Legal Fees that its acknowledgment of the exemption
requirements under Section 19 of Rule 141, then the grant of his application is mandatory. On the other hand, Bowed to the clients of the PAO pursuant to Section 16D of the Administrative Code of 1987, as amended by
when the application does not satisfy one or both requirements, then the application should not be denied Republic Act No. 9406, was not an abdication of its rule-making power but simply its recognition of the limits
outright; instead, the court should apply the indigency test under Section 21 of Rule 3 and use its sound of that power; and that, in particular, such acknowledgment reflected a keen awareness that, in the exercise of
discretion in determining the merits of the prayer for exemption. its rule-making power, it may not dilute or defeat the right of access to justice of indigent litigants.

The Constitution holds sacrosanct the access to justice by the impoverished. Without doubt, the unhampered The exemption of clients of the PAO from the payment of the legal fees under Republic Act No. 9406 and
access to the justice system by the poor, the underprivileged, and the marginalized is one of the most precious OCA Circular No. 121-2007 was not yet a matter of law at the time Pangcatan initiated Civil Case No. 1888-
rights which must be shielded and secured. 02 on September 4, 2002. Yet, we cannot avoid applying the exemption in his favor for purposes of this case.
The remand to the RTC for the purpose of determining the factual basis for the exemption would be
With the above discussion, the Court finds it unnecessary to delve on the second issue raised. superfluous. To start with, the exemption, being a matter of procedure, can be retrospectively applied to his
case. It is fundamental wisdom, indeed, that procedural laws do not come within the legal conception of a
ACCORDINGLY, the appealed decision in Civil Case No. 1888-02 before the Marawi City RTC, Branch 8, is retroactive law, or the general rule against the retroactive operation of statutes, and, as such, they may be given
ANNULLED and SET ASIDE. The case is REMANDED to the RTC a quo which is ordered to hear the retroactive effect on actions pending and undetermined at the time of their passage. Doing so will not violate
plaintiff-appellee's Ex-Parte Motion for Leave to File Case as Pauper Litigant, applying Rule 3, Section 21 of any right of a person who may feel that he is adversely affected, inasmuch as there are no vested rights in rules
the Rules of Court to determine whether plaintiff-appellee can qualify as an indigent litigant; and, after which, of procedure. And, secondly, if the ultimate objective to be served by all courts is the administration of justice,
to decide the case on the merits with dispatch. the remand of the case after the trial by the RTC would be unreasonable and burdensome on all the parties as
well as on the trial court.
SO ORDERED.
Instead, the judgment of the RTC in favor of Pangcatan and against Maghuyop and Bankiao should be allowed
Under the circumstances, the CA grossly erred in annulling and setting aside the judgment of the RTC based to stand. This appeal to the Court by the latter, which also delves into the merits of the judgment against them,
solely on the non-payment of the filing fees. If the RTC had incorrectly granted Pangcatan's Ex Parte Motion should fail as to them for lack of any arguable error committed by the trial court. The records contain no
for Leave to File Case as Pauper Litigant, the grant was not jurisdictional but an error of judgment on its part evidence adduced by them considering that they had waived their evidence on any legitimate defenses they
as the trial court. It can hardly be disputed that the RTC apparently believed based on its erroneous application
might have raised due to their being declared in default for non-filing of their answer. It would be futile to still amount corresponded to several loans Dragon obtained from
defer the judgment rendered upon Pangcatan's evidence in order to still hear them thereafter. A party in default
- of which both of them were - could lift the default only by filing a motion to set aside the default before Manila Banking from 1976 to 1983.
judgment is rendered. Their right to appeal the judgment by default notwithstanding, their chances of reversing
the adverse judgment are nil, for in the first place they had no answer whereby they would have controverted
the allegations of fact against them, and, necessarily, they had no evidence with which to defeat the claim
against them.
From 1976 to 1982, Dragon obtained several loans from Manila
Accordingly, we affirm the judgment rendered in favor of Pangcatan. Banking, which were evidenced by four (4) Promissory Notes:
WHEREFORE, the Court GRANTS the petition for review on certiorari in G.R. No. 194412, (1) Promissory Note No. 20669 dated March 30, 1976; 5 (2)
but DENIES the petition for review on certiorari in GR. No. 194566; REVERSES and SETS ASIDE the Promissory Note No. 20670 dated March 30, 1976; 6 (3)
decision of the Court of Appeals in CA-GR. CV No. 01251-MIN, and, accordingly, REINSTATES the
decision rendered on February 9, 2007 by the Regional Trial Court in Civil Case No. 1888-02, ordering the Promissory Note No. 7426 dated June 28, 1979; 7 and (4)
respondents in GR. No. 194412, namely: Alexandra Maghuyop and Belindo Bakiao, liable jointly and Promissory Note No. 10973 dated February 26, 1982. 8 The total
severally to pay petitioner Samsoden Pangcatan as follows: (1) P50,000.00 as medical expenses; (2)
P34,465.00 for the cost of the lost goods; (3) P10,000.00 as transportation expenses; (4) P60,000.00 as principal amount of his loans was P6,945,642.00. 9 Each
temperate damages; (5) P50,000.00 moral damages; (6) P20,000.00 as exemplary damages; (7) Interest at the Promissory Note stipulated a rate of interest, penalty interest
legal rate of 6% per annum on each of the foregoing amounts stated in items (1) to (6), inclusive, from the in case of default, and attorney's fees, and due dates from 1976
finality of this decision until fully paid; and (8) Costs of suit.
to 1983.
SO ORDERED.

G.R. No. 205068, March 06, 2019

In 1987, Manila Banking was placed under receivership by the
HEIRS OF RENATO P. DRAGON, REPRESENTED BY PATRICIA Bangko Sentral ng Pilipinas. The bank's receiver sent Dragon
ANGELI D. NUBLA, PETITIONERS, v. THE MANILA BANKING
several demand letters10 requiring him to pay his outstanding
CORPORATION, RESPONDENT. loans, the final letter being dated August 12, 1998. 11 In a
Statement of Account attached to the final letter, Manila
Banking computed the amount Dragon owed as
DECISION P44,038,995.00, consisting of the principal amount of
P6,945,642.00, plus accrued interest, penalties, and attorney's
LEONEN, J.: fees as of July 31, 1998.12

Payment of the correct amount of filing fees should not be

made contingent on the result of a case.
Dragon failed to pay his outstanding obligation. Thus, on
January 7, 1999, Manila Banking filed before the Regional Trial
Court a Complaint for collection of sum of money. 13 The prayer
This is a Petition for Review on Certiorari 1 assailing the June
of the Complaint read:
27, 2012 Decision2 and December 5, 2012 Resolution 3 of the
Court of Appeals in CA-G.R. CV No. 92266. The Court of Appeals WHEREFORE, premises considered, it is most
upheld the September 26, 2007 Decision 4 of the Regional Trial respectfully prayed that, after hearing, judgment be
Court, which ordered Renato P. Dragon (Dragon) to pay The rendered ordering the defendant to pay plaintiff the
Manila Banking Corporation (Manila Banking) P6,945,642.00, above principal sum of P6,945,642, plus interests,
plus interest and penalties, as well as attorney's fees. The penalties, and attorney's fees computed up to the
 date of actual payment pursuant to the On September 26, 2007, the Regional Trial Court issued its
corresponding Promissory Notes. Plaintiff further Decision20 in favor of Manila Banking. The dispositive portion of
prays for such other reliefs and remedies as may be the Decision read:
deemed just and equitable in the premises. 14
WHEREFORE, plaintiff having proved its claim by
15
In his Answer with Compulsory Counterclaim, Dragon claimed preponderance of evidence against defendant Renato
that he had already partially paid his debts to Manila Banking, 16 P. Dragon, judgment is hereby rendered ordering
and that his loans with the bank had been extinguished by defendant to pay plaintiff the following:
novation. Allegedly, in 1984, Kalilid Wood Industries
Corporation (Kalilid Wood), of which he was an officer and 1. The amount of Php6,945,642.00 plus interest
stockholder, wrote to Manila Banking requesting that Kalilid and penalties, the rates of which are indicated
Wood's loans and the accounts of other persons, including that in the [preceding] paragraphs starting August
of Dragon's, be restructured. Manila Banking allegedly agreed 12, 1998 until the obligation is fully paid;
to the restructuring, allowing Kalilid Wood to assume Dragon's
loan obligations, including those covered by the four (4) 2. Attorney's fees equivalent to 5% of the total
Promissory Notes. Supposedly, this novation was confirmed in amount due;
an April 22, 1991 Decision of the Regional Trial Court, Branch
58 of Makati City in Civil Case No. 46961 titled, "The Manila 3. Costs of suit.
Banking Corporation v. Builders Wood Products, Inc., Claudio J.
Sanchez, Horacio Abrantes, and Renato P. Dragon" which had SO ORDERED.21
become final and executory.17 The Regional Trial Court noted that Dragon's defenses of
prescription and novation were neither pleaded in his Answer
nor raised in a motion to dismiss. 22 Even if it could have taken
Dragon further claimed that Manila Banking's cause of action cognizance of these defenses, the Regional Trial Court found
had prescribed, since it failed to demand payment on the that Manila Banking's cause of action had not prescribed and
Promissory Notes within 10 years from their due date. He that the obligations were not novated. It held that Manila
alleged that he never received the demand letters sent by Banking's cause of action began to accrue only on August 12,
Manila Banking, which would have otherwise interrupted the 1998, when Dragon refused to pay, and not on the maturity
prescriptive period.18 dates stated in the promissory notes.23

He prayed that he be awarded P2,000,000.00 as moral Further, the Regional Trial Court found that Dragon could not
damages for Manila Banking's act of dispossessing him of his prove that the obligations had been novated. It ruled that the
properties for the settlement of accounts that could not be April 22, 1991 Decision of the Regional Trial Court in Civil Case
established, which allegedly caused him emotional trauma. 19 No. 46961 could not be proof of the alleged novation since the
facts and subject matter of that case were different from this
case.24
Nonetheless, the Regional Trial Court held that it could only As to Dragon, the Court of Appeals held that he proved neither
order Dragon to pay the amount of P6,945.642.00, novation nor prescription. By failing to raise these defenses in
representing his principal obligation, plus the interest and his Answer and before the termination of pre-trial, Dragon
penalty charges, as stipulated in the Promissory Notes, and not waived them in accordance with Rule 9, Section 1 of the Rules
P48,028,268.98, per the Statement of Account submitted by of Court.34
Manila Banking. During trial, Manila Banking failed to submit
documents to justify or support the computation in the
Statement of Account.25 Moreover, the Court of Appeals found that the correspondence
between Manila Banking and Kalilid Wood could not serve as
basis for Dragon's claim of novation. Manila Banking's reply to
Both parties filed Motions for Reconsideration of the Regional Kalilid Wood's request to restructure the loans did not
Trial Court September 26, 2007 Decision. 26 Notably, in his Reply expressly state that Dragon had been released from his
and Supplemental Opposition to Manila Banking's Motion for obligations under the Promissory Notes, or that there was an
Partial Reconsideration,27 Dragon raised for the first time the agreement that Kalilid Wood would assume Dragon's
issue of the trial court's lack of jurisdiction over the Complaint. obligations under the Promissory Notes. Since novation is
He alleged that Manila Banking willfully and deliberately never presumed, but must be shown through an express
evaded payment of the correct docket fees for the amounts it agreement or by the parties' intent, the Court of Appeals held
claimed.28 that Dragon failed to prove that novation had extinguished his
obligations to Manila Banking.35

In its April 3, 2008 Order, 29 the Regional Trial Court denied

both parties' Motions. As to the issue of docket fees, it held Similarly, the Court of Appeals ruled that the April 22, 1991
that this Court's ruling in Sun Insurance Office, Ltd. v. Decision of the Regional Trial Court in Civil Case No. 46961
Asuncion30 applied; hence, there was no need to resolve it. 31 could not serve as the "law of the case" 36 for this case. That
Decision, it held, never mentioned or alluded to the Promissory
Notes for which Manila Banking was now demanding payment.
Upon appeal by both parties, the Court of Appeals, in its June The transaction in that case involved a different transaction
27, 2012 Decision,32 affirmed the Regional Trial Court that Kalilid Wood and Dragon had entered into.37
September 26, 2007 Decision and April 3, 2008 Order.

Dragon's defense of prescription was, likewise, not given

As to Manila Banking, the Court of Appeals affirmed the trial credence by the Court of Appeals. It found that the 10-year
court's finding that since the Statement of Account was not prescriptive period on the enforcement of the Promissory
substantiated, the amount to be considered should only be Notes, which matured from 1982 to 1983, was interrupted by
P6,945.642.00, plus the stipulated interest and penalty Manila Banking's demand letters to Dragon in November 1988,
charges.33 October 1991, February 1993, November 1994, January 1996,
and August 1998. It did not give credence to Dragon's claim
that he never received the demand letters, as he admitted in
his Answer that they had been sent to him. Dragon also failed Petitioners argue that the Regional Trial Court had no
to specifically deny Manila Banking's allegation that he jurisdiction to award Manila Banking's claims due to
received the demand letters.38 insufficient payment of docket fees. Manila Banking only paid
P34,975.75 corresponding to its P6,945,642.00 claim in its
Complaint. However, as shown by the Statement of Account
In its December 5, 2012 Resolution, 39 the Court of Appeals attached to the Complaint, the true amount it claimed was
denied both parties' Motions for Reconsideration. In addition to P44,03 8,995.00. Petitioners claim that Manila Banking
its earlier ruling, the Court of Appeals found that the deficient concealed the true amount it claimed to mislead the trial
payment of docket fees did not automatically result in the court's clerk of court and, thus, avoid paying the correct docket
case's dismissal as the trial court may still allow payment of fees.44
the difference within a reasonable period, but before the expiry
of the reglementary period. The deficiency could also be a lien
on the judgment award. It ruled that the claimed interests, For petitioners, Sun Insurance Office is inapplicable to this
penalties, and attorney's fees could not be determined with case. In Sun Insurance Office, the amount of damages could be
certainty until the resolution of the case.40 inferred from the body of the complaint, and the plaintiff
indicated willingness to abide by the rules by paying the
additional fees when he amended his complaint, even without
On January 22, 2013, the Heirs of Dragon, represented by an order from the court. Here, Manila Banking knew the exact
Patricia Angeli D. Nubia (Heirs of Dragon), filed before this amount that it wanted to collect by way of interest, penalties,
Court a Notice of Death with Motion for Substitution of and attorney's fees; yet, it did not state these in its Complaint's
Petitioner and a Motion for Extension of Time to File Petition for prayer.45
Review under Rule 45.41 The Heirs of Dragon stated that Dragon
died on October 22, 2012 and under Rule 3, Section 16 of the
Rules of Court, his counsel informed this Court of this fact and They argue that the applicable case is Tacay v. Regional Trial
moved for the substitution of parties. They further prayed for Court of Tagum, Davao del Norte,46 where this Court held that
an additional 30 days within which to file their Petition for the phrase "awards of claims not specified in the pleading"
Review. should only refer to "damages arising after the filing of the
complaint or similar pleading."47

In its February 18, 2013 Resolution,42 this Court granted the

Motion for Substitution and Motion for Extension of Time. Further, petitioners claim that the April 22, 1991 Decision of
the Regional Trial Court in Civil Case No. 46961 settled the
novation of Dragon's obligations to Manila Banking. They point
On February 21, 2013, the Heirs of Dragon filed their Petition out that in the proceedings in Civil Case No. 46961, Dragon
for Review on Certiorari,43 assailing the June 27, 2012 Decision presented two (2) letters, dated November 14, 1984 and
and December 5, 2012 Resolution of the Court of Appeals. September 19, 1984, which the trial court found to be proof
that Builders Wood Products, Inc. and Dragon as guarantor
were replaced by Kalilid Wood, the new debtor. Here, Dragon
again offered these letters before the Regional Trial Court to Respondent points out that the issues raised in the Petition
prove that there was a consolidation of his loan accounts to were never raised during pre-trial in the Regional Trial Court.
Kalilid Wood's loan accounts.48 For being belatedly raised, these defenses should be waived. In
particular, petitioners were estopped from questioning the non-
payment of correct docket fees since they only raised this issue
Petitioners argue that the Court of Appeals was incorrect in after the Regional Trial Court rendered its September 26, 2007
finding that the April 22, 1991 Decision of the Regional Trial Decision against Dragon.54
Court in Civil Case No. 46961 did not cover the Promissory
Notes. They claim that the Promissory Notes were part of the
obligations that Kalilid Wood assumed when it proposed the Respondent further claims that it paid the correct amount of
loan restructuring in 1984 even though they were not docket fees for the Complaint based on the principal amount of
specifically stated in Civil Case No. 46961. For them, since the P6,945,642.00. It argues that it was impossible to compute the
Promissory Notes all bore dates prior to 1984, they were interests, penalties, and attorney's fees it should claim because
necessarily included in the loan restructuring. 49 the date of actual payment by Dragon was uncertain at the
time of the filing of the Complaint. However, even if the trial
court rendered a judgment award more than the P6,945,642.00
Finally, petitioners argue that Manila Banking's cause of action it claimed, respondent argues that Sun Insurance Office should
had prescribed, claiming that Dragon never admitted to apply, and the additional docket fees shall be a lien on the
receiving the demand letters allegedly sent by Manila Banking, judgment.55
which would have interrupted the prescriptive period. 50

Respondent further argues that: (1) the April 22, 1991 Decision
On April 3, 2013, this Court ordered Manila Banking to of the Regional Trial Court in Civil Case No. 46961 was not the
comment on the Petition.51 law of the case; (2) petitioners failed to prove novation; and
(3) Dragon had failed to specifically deny receipt of Manila
Banking's demand letters.56
In its Comment filed on June 10, 2013, 52 respondent claims that
the Petition raises issues which constitute questions of fact,
namely: (1) whether respondent paid the correct docket fees; On July 31, 2013,57 this Court required petitioners to file their
(2) whether novation took place; and (3) whether its cause of reply to respondent's Comment.
action had prescribed. These issues, it avers, are improper in a
Rule 45 petition, which only involves questions of law.
Moreover, petitioners failed to prove that any of the exceptions, In their Reply filed on October 29, 2013, 58 petitioners argue
which would allow this Court to resolve a question of fact, that their Petition raises questions of law cognizable by this
exist.53 Court, namely: (1) whether the Regional Trial Court had
jurisdiction over Manila Banking's claims for interests,
penalties, and attorney's fees despite its failure to pay the
correct docket fees; (2) whether the April 22, 1991 Decision
served as res judicata for this case; and (3) whether the Petitioners claim that Kalilid Wood had agreed to assume
prescriptive period began to run only upon alleged service of Dragon's personal loans to respondent, including those arising
the demand letter, or upon maturity of the Promissory Notes. 59 from the Promissory Notes, an agreement given judicial
recognition in the April 22, 1991 Decision of the Regional Trial
Court, Branch 58 of Makati City in Civil Case No. 46961. 64
In its March 3, 2014 Resolution, 60 this Court gave due course to
the Petition and required the parties to submit their
Memoranda. Respondent and petitioners filed their Memoranda Based on the April 22, 1991 Decision of the Regional Trial Court
on May 8, 201461 and May 12, 2014,62 respectively. in Civil Case No. 46961, Builders Wood Products, Inc. obtained
a loan from respondent, with Dragon as surety, in 1980. 65 When
Builders Wood Products, Inc. defaulted, respondent filed an
The issues to be resolved are: action for sum of money against it and its sureties. 66 In 1983,
while the action was pending, Builders Wood Products, Inc.
ceded its timber concession to Kalilid Wood, of which Dragon
First, whether or not the Petition for Review on Certiorari was an officer. Thus, Kalilid Wood assumed all the existing
raises questions of fact not cognizable under Rule 45 of the obligations of Builders Wood Products, Inc. and, later on, the
Rules of Court; and obligations of Dragon as part of its repayment schedule.67

Second, whether or not the trial court acquired jurisdiction The Court of Appeals is correct that the April 22, 1991 Decision
over the Complaint of respondent The Manila Banking does not mention the Promissory Notes included in the loans
Corporation in view of the insufficient payment of docket fees. Kalilid Wood had assumed from Dragon. What Kalilid Wood had
assumed were Dragon's obligations as surety for Builders Wood
Products, Inc. It did not include his personal loans to
respondent.68
I

Further, it is telling that petitioners cannot substantiate their

The existence of novation and prescription of an action is a
claim that the Promissory Notes are included in the April 22,
question of fact not cognizable under a petition for review on
1991 Decision.
certiorari under Rule 45 of the Rules of Court.

The April 22, 1991 Decision declares that "the proposed

To determine if there was novation, the facts on record must be
repayment plan by [Kalilid Wood] regarding the various
examined to show if the elements are present. 63 Here, the
accounts mentioned in the letter (Exh. 1-Dragon) and the letter
Regional Trial Court and the Court of Appeals did not err in
dated September 19, 1984 (Exhs. 2-Dragon, 2-A-Dragon),
finding that there was no novation of the Promissory Notes.
including that of Builders and Dragon were accepted by plaintiff
Manila Banking Corporation."69 Yet, petitioners were unable to
prove or even claim that the Promissory Notes were included in II
these "various accounts." These exhibits should have been
easy to present, as they should be extant judicial records, but
they have not been presented by petitioners. The general rale is that the issue of jurisdiction may be raised
at any stage of the proceedings, even on appeal, and is not lost
by waiver or by estoppel.73 A party is only estopped from
Novation must be clear and unequivocal, and is never raising the issue when it does so "in an unjustly belated
presumed.70 It is the burden of the party asserting that manner especially when it actively participated during trial." 74
novation has taken place to prove that all the elements exist. In Villagracia v. Fifth Shari'a District Court:75

In [Tijam v. Sibonghanoy], it took Manila Surety and

Fidelity Co., Inc. 15 years before assailing the
Likewise, the question of prescription of an action is a factual
jurisdiction of the Court of First Instance. As early as
matter.71 The Court of Appeals did not err when it held:
1948, the surety company became a party to the case
In addition, it cannot be said that appellant-bank's when it issued the counter-bond to the writ of
cause of action based on such promissory notes had attachment. During trial, it invoked the jurisdiction of
prescribed. Actions based upon a written contract the Court of First Instance by seeking several
should be brought within ten (10) years from the affirmative reliefs, including a motion to quash the
time the right of action accrues. Indubitably, such writ of execution. The surety company only assailed
right of action accrue from the moment the breach of the jurisdiction of the Court of First Instance in 1963
right or duty occurs. Prescription of actions is, when the Court of Appeals affirmed the lower court's
nevertheless, interrupted when they are filed before decision. This court said:
the courts, when there is a written extrajudicial
. . . Were we to sanction such conduct on
demand by the creditors, and when there is any
[Manila Surety and Fidelity, Co. Inc.'s]
written acknowledgement of the debt by the debtor.
part, We would in effect be declaring as
In the present case, the ten-year (10) prescriptive
useless all the proceedings had in the
period on the enforcement of said promissory notes
present case since it was commenced on
that matured in 1982 - 1983, was timely interrupted
July 19, 1948 and compel [the spouses
by appellant-bank's demand letters to defendant-
Tijam] to go up their Calvary once more.
appellant in November 1988, October 1991, February
The inequity and unfairness of this is not
1993, November 1994, January 1996 and August
only patent but revolting.
1998. Verily, every time the defendant-appellant
receives said demand letters, a new ten-year (10) After this court had rendered the decision in Tijam,
period is added, and the elapsed period is, thereby, this court observed that the "non-waivability of
eliminated. Indeed, a written extrajudicial demand objection to jurisdiction" has been ignored, and the
wipes out the period which has already elapsed, and Tijam doctrine has become more the general rule
it starts anew the prescriptive period. 72 (Citations than the exception. In Calimlim v. Ramirez, this court
omitted) said:
 A rule that had been settled by accomplishment of injustice. ... a judgment
unquestioned acceptance and upheld in rendered without jurisdiction over the
decisions so numerous to cite is that the subject matter is void. ... No laches will
jurisdiction of a court over the subject- even attach when the judgment is null and
matter of the action is a matter of law and void for want of jurisdiction[.] 76 (Citations
may not be conferred by consent or omitted)
agreement of the parties. The lack of
In this regard, this Court has consistently held that a party may
jurisdiction of a court may be raised at any
be estopped from questioning the lack of jurisdiction due to
stage of the proceedings, even on appeal.
insufficient payment of filing or docket fees, if the objection is
This doctrine has been qualified by recent
not timely raised.77
pronouncements which stemmed
principally from the ruling in the cited case
of [Tijam v. Sibonghanoy]. It is to be
regretted, however, that the holding in The records show that Dragon raised the defense of
said case had been applied to situations prematurity, and no other, in his Answer with Compulsory
which were obviously not contemplated Counterclaim dated January 31, 2000. 78 Dragon later actively
therein. . . . participated in the proceedings of the case, including trial on
the merits. Respondent's insufficient payment of docket fees
Thus, the court reiterated the "unquestionably was raised for the first time before the trial court in Dragon's
accepted" rule that objections to a court's Reply (To: Plaintiffs Opposition to Defendant's Motion for
jurisdiction over the subject matter may be raised at Reconsideration) and Supplemental Opposition (To: Plaintiffs
any stage of the proceedings, even on appeal. This is Motion for Partial Reconsideration), 79 filed on February 26,
because jurisdiction over the subject matter is a 2008, following the September 26, 2007 Decision. The
"matter of law" and "may not be conferred by jurisdictional objection had been available to petitioners long
consent or agreement of the parties." before then, but they failed to timely raise it.

In Figueroa, this court ruled that the Tijam doctrine Nonetheless, the circumstances of this case warrant an
"must be applied with great care;" otherwise, the examination of the rules and principles on payment of docket
doctrine "may be a most effective weapon for the fees.
accomplishment of injustice":

. . . estoppel, being in the nature of a

forfeiture, is not favored by law. It is to be Under Rule 141, Section 1 of the Rules of Court, filing fees must
applied rarely — only from necessity, and be paid in full at the time an initiatory pleading or application is
only in extraordinary circumstances. The filed.80 Payment is indispensable for jurisdiction to vest in a
doctrine must be applied with great care court.81
and the equity must be strong in its favor.
When misapplied, the doctrine of estoppel
may be a most effective weapon for the
The amount must be paid in full. Nonetheless, in Magaspi v.
Ramolete82 despite insufficient payment of filing fees, a
To put a stop to this irregularity, henceforth all
complaint for recovery of ownership and possession was
complaints, petitions, answers and other similar
deemed docketed as there had been an "honest difference of
pleadings should specify the amount of damages
opinion as to the correct amount to be paid[.]" 83 However, this
being prayed for not only in the body of the pleading
Court declined to apply Magaspi in Manchester Development
but also in the prayer, and said damages shall be
Corporation v. Court of Appeals.84 There, the counsel
considered in the assessment of the filing fees in any
deliberately did not specify the amount of damages in the
case. Any pleading that fails to comply with this
complaint's prayer even though at least P78 million was
requirement shall not be accepted nor admitted, or
alleged in the body. It later even amended the same complaint
shall otherwise be expunged from the record.
to remove all mentions of damages in the body. Thus:

The Court cannot close this case without making the

observation that it frowns at the practice of counsel The Court acquires jurisdiction over any case only
who filed the original complaint in this case of upon the payment of the prescribed docket fee. An
omitting any specification of the amount of damages amendment of the complaint or similar pleading will
in the prayer although the amount of over P78 not thereby vest jurisdiction in the Court, much less
million is alleged in the body of the complaint. This is the payment of the docket fee based on the amounts
clearly intended for no other purpose than to evade sought in the amended pleading. The ruling in the
the payment of the correct filing fees if not to Magaspi case in so far as it is inconsistent with this
mislead the docket clerk in the assessment of the pronouncement is overturned and reversed. 85
filing fee. This fraudulent practice was compounded (Citation omitted)
when, even as this Court had taken cognizance of the
anomaly and ordered an investigation, petitioner Later, in Sun Insurance Office,86 this Court laid down the rules
through another counsel filed an amended complaint, concerning the payment of filing fees, taking into consideration
deleting all mention of the amount of damages being Magaspi, Manchester Development Corporation, and other
asked for in the body of the complaint. It was only earlier rulings:
when in obedience to the order of this Court of Thus, the Court rules as follows:
October 18, 1985, the trial court directed that the
amount of damages be specified in the amended
complaint, that petitioners' counsel wrote the
1. It is not simply the filing of the complaint or
damages sought in the much reduced amount of
appropriate initiatory pleading, but the payment of
P10,000,000.00 in the body of the complaint but not
the prescribed docket fee, that vests a trial court
in the prayer thereof. The design to avoid payment of
with jurisdiction over the subject matter or nature of
the required docket fee is obvious.
the action. Where the filing of the initiatory pleading
is not accompanied by payment of the docket fee, the
court may allow payment of the fee within a
The Court serves warning that it will take drastic reasonable time but in no case beyond the applicable
action upon a repetition of this unethical practice. prescriptive or reglementary period.
 Moreover, the filing party must show that there was no
intention to defraud the government of the appropriate filing
2. The same rule applies to permissive counterclaims,
fees due it.90 In Manchester Development Corporation, this
third-party claims and similar pleadings, which shall
Court found that the filing party, in repeatedly omitting the
not be considered filed until and unless the filing fee
amount of damages it was asking for, aimed to evade payment
prescribed therefor is paid. The court may also allow
of docket fees.
payment of said fee within a reasonable time but also
in no case beyond its applicable prescriptive or
reglementary period.
In Philippine First Insurance Company, Inc. v. Pyramid
Logistics and Trucking Corporation,91 the respondent attempted
to pass off its action for collection of money as one for "specific
3. Where the trial court acquires jurisdiction over a
performance and damages,"92 failing to specify the amounts in
claim by the filing of the appropriate pleading and
the prayer of its complaint. Thus:
payment of the prescribed filing fee but,
subsequently, the judgment awards a claim not If respondent Pyramid's counsel had only been
specified in the pleading, or if specified the same has forthright in drafting the complaint and taking the
been left for determination by the court, the cudgels for his client and the trial judge assiduous in
additional filing fee therefor shall constitute a lien on applying Circular No. 7 vis-a-vis prevailing
the judgment. It shall be the responsibility of the jurisprudence, the precious time of this Court, as well
Clerk of Court or his duly authorized deputy to as of that of the appellate court, would not have been
enforce said lien and assess and collect the unnecessarily sapped.
additional fee.87

Notwithstanding Sun Insurance Office, it must be emphasized

The Court at this juncture thus reminds Pyramid's
that payment of filing fees in full at the time the initiatory
counsel to observe Canon 12 of the Code of
pleading or application is filed is still the general rule.
Professional Ethics which enjoins a lawyer to "exert
Exceptions that grant liberality for insufficient payment are
every effort and consider it his duty to assist in the
strictly construed against the filing party. In Colarina v. Court
speedy and efficient administration of justice," and
of Appeals:88
Rule 12.04 of the same Canon which enjoins a lawyer
While the payment of docket fees, like other "not [to] unduly delay a case, impede the execution
procedural rules, may have been liberally construed of a judgment or misuse court processes." And the
in certain cases if only to secure a just and speedy Court reminds too the trial judge to bear in mind that
disposition of every action and proceeding, it should the nature of an action is determined by the
not be ignored or belittled lest it scathes and allegations of the pleadings and to keep abreast of all
prejudices the other party's substantive rights. The laws and prevailing jurisprudence, consistent with
payment of the docket fee in the proper amount the standard that magistrates must be the
should be followed subject only to certain exceptions embodiments of competence, integrity and
which should be strictly construed. 89 independence.93 (Citations omitted)
Likewise, this Court applied the Manchester Development The trial court should have closely examined whether the
Corporation doctrine in Central Bank of the Philippines v. Court circumstances here warrant the liberality of the Sun Insurance
of Appeals.94 There, private respondent Producers Bank of the Office doctrine, especially when even a cursory application of
Philippines concealed its intent to collect damages by making it the governing rules on docket fees at that time shows a glaring
appear that its complaint was principally for injunction. Thus, it omission on respondent's part.
avoided the need to pay filing fees on the amount of damages.

For actions involving recovery of money or damages, the

Should there be a finding that the filing party intended to aggregate amount claimed should be the basis for assessment
conceal the amount of its claims to pay a smaller amount of of docket fees. In Tacay:97
docket fees, demonstrating an intent to defraud the court what
Where the action is purely for the recovery of money
it is owed, then the doctrine in Manchester Development
or damages, the docket fees are assessed on the
Corporation, not Sun Insurance Office, shall apply.95
basis of the aggregate amount claimed, exclusive
only of interests and costs. In this case, the
complaint or similar pleading should, according to
Thus, the Regional Trial Court gravely erred when it merely
Circular No. 7 of this Court, "specify the amount of
stated in its April 3, 2008 Order that Sun Insurance Office was
damages being prayed for not only in the body of the
applicable:
pleading but also in the prayer, and said damages
The court however is intrigued with the issue raised shall be considered in the assessment of the filing
for the first time by defendant in his reply and fees in any case."
supplemental opposition. According to the defendant,
since plaintiff willfully and deliberately evaded
payment of the correct docket fees for the amounts Two situations may arise. One is where the complaint
claimed for interests, penalties and attorney's fees, or similar pleading sets out a claim purely for money
plaintiff is deemed to have abandoned such claims. or damages and there is no precise statement of the
Defendant further argues that as a consequence of amounts being claimed. In this event the rule is that
the non-payment of the correct docket fees by the pleading will "not be accepted nor admitted, or
plaintiff, this court has not acquired jurisdiction to shall otherwise be expunged from the record." In
award the amounts claimed by the plaintiff. other words, the complaint or pleading may be
dismissed, or the claims as to which the amounts are
unspecified may be expunged, although as
The concern of defendant in this case is not novel. aforestated the Court may, on motion, permit
Nevertheless, the case of Sun Insurance Office, Ltd. amendment of the complaint and payment of the fees
Et al. vs. Hon. Maximiano C. Asuncion and Manuel provided the claim has not in the meantime become
ChuaUy Po (G.R. Nos. 79937-38, 13 February 1989) time-barred. The other is where the pleading does
provides a solution on this issue. Hence, there is no specify the amount of every claim, but the fees paid
more necessity of delving further on this matter. 96 are insufficient; and here again, the rule now is that
the court may allow a reasonable time for the
 payment of the prescribed fees, or the balance In its defense, respondent claims that it did not willfully
thereof, and upon such payment, the defect is cured conceal the amount it sought to collect from petitioners, as its
and the court may properly take cognizance of the Complaint "clearly states"99 that it intended to collect both the
action, unless in the meantime prescription has set in principal amount, plus interests, penalties, and attorney's fees
and consequently barred the right of action.98 up to the date of actual payment. In effect, respondent claims
that it had stated the amount of its claim accurately to assess
When respondent filed its Complaint in 1999, the applicable
the filing fees it should pay. Yet, respondent blatantly did not
rule on the basis of the assessment of docket fees was the
comply with the requirement in Supreme Court Administrative
Supreme Court Administrative Circular No. 11-94, dated June
Circular No. 11-94 that the total aggregate amount, including
28, 1994, amending Rule 141 of the Rules of Court. It states in
interest claimed, should be specified in the body and prayer of
part:
a complaint.
RULE 141

LEGAL FEES
Respondent alleges that it could not determine with certainty
the accrued interests, penalties, and attorney's fees petitioners
are liable for, pointing to the uncertainty of the date when
.... these additional claims would be awarded by the Regional Trial
Court.100 According to respondent, only the principal amount to
be collected could be determined with absolute certainty:
Sec. 7. Clerks of Regional Trial Courts
It is clear that the computation of such interest,
penalties and attorney's fees would have been
impossible to perform on the date of filing of the
(a) For filing an action or a permissive counterclaim
Complaint as the date of actual payment of the
or money claim against an estate not based on
instant claim could not be foreseen or forecasted
judgment, or for filing with leave of court a third-
when the Complaint was filed as evidenced by the
party, fourth-party, etc. complaint, or a complaint in
fact that to date, Decedent Dragon has willfully and
intervention, and for all clerical services in the same,
deliberately evaded payment of these loan
if the total sum claimed, inclusive of interest,
obligations he obtained from plaintiff TMBC.101
damages of whatever kind, attorney's fees, litigation
(Emphasis supplied)
expenses, and costs, or the stated value of the
property in litigation, is: . . . (Emphasis supplied) Similarly, the Court of Appeals explained:
Thus, the basis for the assessment of the filing fees for Truly, the payment of complete docket fees for the
respondent's Complaint should not have been only the principal claimed interests, penalties and attorney's fees
amounts due on the loans, but also the accrued interests, cannot be made at the time of the filing of the
penalties, and attorney's fees. These amounts should have all complaint since their true or exact amount cannot be
been specified in both the Complaint's body and prayer. determined as yet with certainty until after the
resolution of the case.102
However, the demand letters sent to Dragon prior to the filing recoup the filing fees in the form of a lien over the judgment
of respondent's Complaint already contained respondent's award in the event that it be awarded all the amounts it is
computation of the accrued interests, penalties, and attorney's allegedly owed.
fees corresponding to the Promissory Notes. 103 In its last
demand letter before it filed its Complaint, respondent
demanded P37,093,353.00 in addition to the P6,945,642.00 In its March 19, 2008 Rejoinder (To Defendant's Reply dated 21
principal amount.104 February 2008) with Supplemental Reply (To Defendant's
Supplemental Opposition dated 21 February 2008):107

8. Following the Sun Insurance (Supra.) ruling, any

Respondent itself, in multiple pleadings, stated that as of April
additional filing fees due on the award made by this
3, 2002, it had computed the outstanding interests, penalties,
Honorable Court upon its proper determination of the
and attorney's fees owed it in the amount of P41,082,626.98. 105
interest, penalties and attorney's fees that should
rightfully be paid by defendant Dragon for putting
plaintiff TMBC through all this trouble, shall
Clearly, respondent is perfectly capable of estimating the
constitute a lien upon this Honorable Court's
accrued interests, penalties, and charges it demanded as of the
Judgment. As such, the government will not be
date it filed its Complaint. But despite respondent's demand
defrauded, of the filing fees due it and defendant
letters containing computations of accrued interests, penalties,
Dragon will not be spared from paying what he
and attorney's fees, none of these computations were
should rightfully be held liable for. 108 (Emphasis in
mentioned in the Complaint, either in its body or prayer.
the original)

In its October 23, 2009 Plaintiff-Appellee's Brief: 109

This stands in stark contrast to Proton Pilipinas Corporation v.
Banque Nationale De Paris.106 There, the amount of
US$1,544,984.40 claimed by Banque Nationale De Paris, for 20. Following the Sun Insurance (Supra.) and Soriano and
which it paid filing fees, represented the principal amount and Padilla (Supra.) rulings, any additional filing fees due on the
interest claimed until August 15, 1998. The insufficient Appealed Decision, upon the proper determination of the
payment there pertained only to the unstated accrued interest amount of interest, penalties and attorney's fees that should
from August 16, 1998 until September 7, 1998, the day the rightfully be paid by Defendant-Appellant Dragon to TMBC,
complaint was filed. shall constitute a lien upon the Judgment. As such, the
government will not be defrauded of the filing fees due it and
Defendant-Appellant Dragon will not be spared from paying
Here, on the other hand, absolutely no filing fees were paid by what he should rightfully be held liable for. 110 (Emphasis in the
respondent for the accrued interest it claimed. original)

In multiple pleadings, respondent reasons that it has not In its November 3, 2009 Reply Brief:111
defrauded the government because the court may simply
 19. Following the Sun Insurance (Supra.) and What respondent forgets is that the payment of correct docket
Soriano and Padilla (Supra.) rulings, any additional fees cannot be made contingent on the result of the case. 117
filing fees due on the award in favor of TMBC, upon Otherwise, the government and the judiciary would sustain
the proper determination of the amount of interest, tremendous losses, as these fees "take care of court expenses
penalties and attorney's fees that should rightfully be in the handling of cases in terms of cost of supplies, use of
paid by Defendant Dragon to TMBC, shall constitute a equipmen[t], salaries and fringe benefits of personnel, etc.,
lien upon such award. As such, the government will computed as to man hours used in handling of each case." 118
not be defrauded of the filing fees due it and
Defendant Dragon will not be spared from paying
what he should rightfully be held liable for. 112 Concededly, Rule 141, Section 2 of the Rules of Court states:
(Emphasis in the original)
SEC. 2. Fees in lien. — Where the court in its final
In its June 10, 2013 Comment:113 judgment awards a claim not alleged, or a relief
different from, or more than that claimed in the
96. Following the Sun Insurance (Supra.) and
pleading, the party concerned shall pay the additional
Soriano and Padilla (Supra.) rulings, any additional
fees which shall constitute a lien on the judgment in
filing fees due on the Appealed Decision, upon the
satisfaction of said lien. The clerk of court shall
proper determination of the amount of interest,
assess and collect the corresponding fees.
penalties and attorney's fees that should rightfully be
paid by Decedent Dragon to TMBC, shall constitute a However, the rule on after-judgment liens applies to instances
lien upon the Judgment. As such, the government of incorrectly assessed or paid filing fees, or where the court
will not be defrauded of the filing fees due it and has discretion to fix the amount to be awarded. 119 In Proton
Decedent Dragon will not be spared from paying Pilipinas Corporation:120
what he should rightfully be held liable for. 114
(Emphasis in the original) In Ayala Corporation v. Madayag, in interpreting the
third rule laid down in Sun Insurance regarding
In its May 8, 2014 Memorandum:115 awards of claims not specified in the pleading, this
Court held that the same refers only to damages
106. Following the Sun Insurance (Supra.) and
arising after the filing of the complaint or similar
Soriano and Padilla (Supra.) rulings, any additional
pleading as to which the additional filing fee therefor
filing fees due on the Appealed Decision, upon the
shall constitute a lien on the judgment.
proper determination of the amount of interest,
penalties and attorney's fees that should rightfully be . . . The amount of any claim for damages,
paid by Decedent Dragon to TMBC, shall constitute a therefore, arising on or before the filing of
lien upon the judgment. As such, the government will the complaint or any pleading should be
not be defrauded of the filing fees due it and specified. While it is true that the
Decedent Dragon will not be spared from paying determination of certain damages as
what he should rightfully be held liable for. 116 exemplary or corrective damages is left to
(Emphasis in the original) the sound discretion of the court, it is the
duty of the parties claiming such damages
 to specify the amount sought on the basis Under the circumstances, a liberal application of the rules on
of which the court may make a proper payment of filing fees is unwarranted. In accordance with
determination, and for the proper Manchester Development Corporation, the Regional Trial Court
assessment of the appropriate docket fees. did not acquire jurisdiction over the Complaint due to
The exception contemplated as to claims respondent's insufficient payment of filing fees.
not specified or to claims although
specified are left for determination of the
court is limited only to any damages that WHEREFORE, the Petition for Review on Certiorari is GRANTED.
may arise after the filing of the complaint The Court of Appeals June 27, 2012 Decision and December 5,
or similar pleading for then it will not be 2012 Resolution in CA-G.R. CV No. 92266 are REVERSED AND
possible for the claimant to specify nor SET ASIDE. The January 7, 1999 Complaint filed by respondent
speculate as to the amount thereof.121 The Manila Banking Corporation before the Regional Trial Court
(Emphasis in the original) is DISMISSED for lack of jurisdiction due to non-payment of
filing fees.
Further, nowhere in any of respondent's pleadings filed before
any court did respondent manifest its willingness, to the
Regional Trial Court or to the Court of Appeals or to this Court,
that it will be paying additional docket fees when required. Its SO ORDERED.
repeated invocation of Sun Insurance Office is not a
manifestation of willingness to pay additional docket fees
Exercise of jurisdiction
contemplated in United Overseas Bank and subsequent
cases.122 In none of its pleadings did respondent allude to G.R. No. 156118             November 19, 2004
PABLO T. TOLENTINO and TEMPUS PLACE REALTY MANAGEMENT
paying any additional docket fee if so ordered; instead, it left it CORPORATION, petitioners vs.
to the courts to constitute a lien over a hypothetical award, to HON. OSCAR LEVISTE, Presiding Judge, RTC, Quezon City, Br. 97 and SPOUSES GERARDO
CINCO, JR. and PAMELA H. CINCO, respondents.
which it was not entitled, as both lower courts have already
held.
DECISION

PUNO, J.:
123
Unlike other cases, the amount of unremitted filing fees here
Petitioners Pablo T. Tolentino and Tempus Place Realty Management Corporation seek the review
is substantial. Respondent paid only P34,975.75 in filing fees
and reversal of the decision and amended decision of the Court of Appeals in CA-G.R. SP No. 59506 entitled
based on its P6,945,642.00 claim alleged in its Complaint. 124 If "Tempus Place Realty Management Corporation and Pablo T. Tolentino vs. Hon. Oscar Leviste, Presiding
respondent had properly stated the total sum it claimed in its Judge, RTC - Quezon City, Branch 97 and Sps. Gerardo Cinco, Jr., and Pamela H. Cinco." The Court of
Appeals denied petitioners’ petition for annulment of the decision of the Regional Trial Court (RTC) of
prayer, including the interests, penalties, and charges, it should Quezon City, Branch 97, on the action for specific performance with damages filed by respondents Spouses
have paid P222,300.43, as computed by the clerk of court. 125 In Gerardo and Pamela Cinco against them.
effect, respondent only paid 15.7% of the docket fees it owes
The antecedent facts are as follows:
the court.
On October 18, 1996, respondents Spouses Gerardo Cinco, Jr. and Pamela Cinco filed a complaint for specific
performance with damages against petitioners Tempus Place Realty Management Corporation and Pablo T.
Tolentino. The complaint alleged that respondents purchased from petitioners a condominium unit in Tempus
Place Condominium II at Katarungan St., Diliman, Quezon City. Despite, however, the execution of the Deed
of Absolute Sale and the delivery of the owner’s copy of the condominium certificate of title, petitioners failed 4. The judgment in default was rendered in violation of the rights of the petitioner to substantive and
to deliver possession of the unit because they have allegedly leased it to a third party. The complaint further procedural due process.
alleged that petitioners refused to pay the corresponding capital gains tax and documentary stamp tax on the 5. Corrollarily, the gargantuan award for damages by the court a quo in patent and blatant violation
transaction, and execute the necessary board resolution for the transfer of the property, thus preventing
of the law and settled jurisprudence [is] unconscionable and clearly violative of substantial justice
respondents from registering the Deed of Absolute Sale and transferring the title to the unit in their names. The
respondents claimed that because petitioners refused to deliver possession of the unit and instead leased it to a and equities of the case.
third party, they are entitled to a reasonable rental value in the amount of P20,000.00 a month from May 1994 6. Petitioners have good and substantial defenses in respect of private respondents’ claims.
until the time the possession of the unit is delivered to them. They also claimed moral damages in the amount 7. A fortiori, the court has no jurisdiction and/or authority and has committed a grave abuse of
of P1,000,000.00 and exemplary damages in the amount of P1,000,000.00 plus attorney’s fees in the amount discretion in awarding amounts in excess of what is prayed for in the complaint nor proved by the
of P1,000,000.00. evidence as well as in palpable violation of the mandatory provisions of the Civil Code and the
Rules of Court and applicable decisions of the Supreme Court. Consequently, the challenged
As petitioners failed to file their answer to the complaint, Hon. Oscar Leviste, Presiding Judge, RTC, Branch judgment in default is an absolute nullity.
97, Quezon City, issued an order on January 17, 1997 granting respondents’ motion to declare petitioners in
default. He also appointed the Branch Clerk of Court to act as commissioner to receive respondents’ evidence
ex parte. After reception of evidence, the trial court, on April 15, 1997, issued a decision for the respondents. It On April 23, 2002, the appellate court issued a decision modifying the trial court decision. It explained that the
stated: annulment of judgment may be based on the grounds of extrinsic fraud and lack of jurisdiction, and it is
important that petitioner failed to move for new trial, or appeal, or file a petition for relief, or take other
appropriate remedies assailing the questioned judgment, final order or resolution through no fault attributable
This Court after considering the oral and documentary evidences presented by the plaintiff finds that the to him. The Court of Appeals found that the trial court decision may not be annulled on the ground of extrinsic
allegation contained in their pleadings are all true facts and are entitled to the relief as prayed for, to wit: fraud. It stated that the failure of petitioners’ counsel to file an appellant’s brief in the Court of Appeals did not
amount to extrinsic fraud as to justify annulment of judgment, as it was not shown that their former counsel’s
1) To deliver to the plaintiffs the possession of the condominium unit covered by CCT No. 5002 of omission was tainted with fraud and/or deception tantamount to extrinsic or collateral fraud. Neither may it be
the Register of Deeds of Quezon City; annulled on the ground of lack of jurisdiction as the action for specific performance and damages was within
2) To pay the corresponding capital gains tax and documentary stamps tax on the transaction, and the jurisdiction of the RTC. Nonetheless, the appellate court, in the interest of justice and in the exercise of its
deliver the receipts thereof to the plaintiffs; sound discretion in determining the amount of damages that may be awarded, held that the moral damages in
3) To execute and deliver to the plaintiffs the necessary Board Resolution; the amount of one million pesos (P1,000,000.00) was excessive. It lowered the moral damages to P100,000.00.
4) Jointly and severally, to pay plaintiffs the following: It also reduced the exemplary damages to P100,000.00, and the attorney’s fees to P100,000.00.
a. Actual damages in the amount of P20,000.00 a month from May 1994, up to the time
possession of the condominium units (sic) is delivered to the plaintiffs representing the Respondents filed a motion for reconsideration of the Decision of the Court of Appeals. On November 18,
reasonable rental value of the unit; 2002, the Court of Appeals issued an Amended Decision, the dispositive portion of which reads:
b. Moral damages in the amount of P1,000,000.00;
c. Exemplary damages in the amount of P1,000,000.00;
d. Attorney’s fees in the amount of P1,000,000.00. WHEREFORE, the Motion for Reconsideration is partly GRANTED in that the dispositive portion
of the assailed decision is modified as follows:

Petitioners thereafter filed a motion for new trial. They contended that their right to fair and impartial trial had
been impaired by reason of accident, mistake or excusable negligence of their former counsel, a certain Atty. a) Actual damages in the amount of P10,000.00 a month from May 1994, up to the time possession
Villamor. The trial court denied the motion for new trial for lack of merit. of the condominium units [sic] is delivered to the plaintiffs (private respondents herein) representing
the reasonable rental value of the unit.
b) Moral damages in the amount of One Hundred Thousand Pesos (P100,000.00);
On November 3, 1997, petitioners, through their new counsel, Atty. Ricardo A. Santos, filed a notice of appeal c) Exemplary damages in the amount of One Hundred Thousand Pesos (P100,000.00); and,
of the April 15 decision of the trial court. The Court of Appeals, however, dismissed the appeal on February d) Attorney’s fees in the amount of One [H]undred Thousand Pesos (P100,000.00).
26, 1999 on the ground of abandonment as petitioners failed to submit the required appeal brief. The decision
became final and executory on March 26, 1999 and was recorded in the Book of Entries of Judgment.
SO ORDERED.

On July 4, 2000, petitioners filed with the Court of Appeals an action for annulment of judgment based on the
following grounds: Petitioners filed the instant petition for review of the decision and amended decision of the Court of Appeals.
They raise the following arguments:

1. The judgment in default granted reliefs in excess of what is prayed for in the complaint in gross
1. The petitioners can avail of the remedy of annulment of judgment to annul the decision of the
violation of the clear provisions of the 1997 Rules of Civil Procedure.
RTC in Civil Case No. 96-29707 as Hon. Judge Leviste had no jurisdiction and/or acted without
2. The judgment in default awarded unliquidated damages in palpable violation of the mandatory jurisdiction in issuing the April 15, 1997 Decision because:
provision of Section 3[,] Rule 9, 1997 Rules of Civil Procedure.
3. The judgment in default is in gross violation of Section 14, Article VIII, 1987 Constitution and
a. The judgment in default granted reliefs in excess of what is prayed for in the complaint
Section 1, Rule 36, 1997 Rules of Civil Procedure. in gross violation of the clear provisions of the 1997 Rules of Civil Procedure.
 b. The judgment in default awarded unliquidated damages in palpable violation of the negligence of their former counsel in failing to file the appeal brief amounts to extrinsic fraud which would
mandatory provision of Section 3[,] Rule 9, 1997 Rules of Civil Procedure. serve as basis for their petition for annulment of judgment. We disagree. The Court has held that when a party
retains the services of a lawyer, he is bound by his counsel’s actions and decisions regarding the conduct of the
case. This is true especially where he does not complain against the manner his counsel handles the suit.14 Such
c. The judgment in default is in gross violation of Sec. 14, Art. VIII, 1987 Constitution
and Sec. 1, Rule 36, 1997 Rules of Civil Procedure. is the case here. When the complaint was filed before the trial court, summons was served upon the
petitioners.15 They allegedly referred the matter to Atty. Villamor who was holding office at the building
owned and managed by respondent Tempus Place Realty Management Corporation.16 However, after they have
d. The judgment in default was rendered in violation of the rights of the petitioner to endorsed the summons to said lawyer, they did not exert any effort to follow up the developments of the suit.
substantive and procedural due process. Hence, they were declared in default and judgment was rendered against them. Even in the course of the
appeal, they never bothered to check with their counsel, Atty. Ricardo Santos, the status of the appeal. The
2. The petitioners were prevented from having their day in court because of the gross negligence of notice of appeal was filed on November 3, 1997 and petitioners learned of the dismissal of the appeal in
their former counsel, which gross negligence amounts to extrinsic fraud. October 1999, after petitioner Tolentino received notice of garnishment of his insurance benefits in connection
with the judgment in Civil Case No. Q-96-29207. It was only at that time that they learned that Atty. Santos
had migrated to Australia. This only shows that petitioners, as what happened during the pendency of the case
3. The remedies of appeal, petition for relief or other remedies are no longer available through no before the trial court, never bothered to confer with their counsel regarding the conduct and status of their
fault of petitioners. appeal. The Court stated in Villaruel, Jr. vs. Fernando:17

4. The petitioners have valid and substantial defenses to respondents’ cause of action.12 xxx Litigants represented by counsel should not expect that all they need to do is sit back, relax and
await the outcome of their case. To agree with petitioner’s stance would enable every party to
The petition is without merit. render inutile any adverse order or decision through the simple expedient of alleging negligence on
the part of his counsel. The Court will not countenance such ill-founded argument which contradicts
long-settled doctrines of trial and procedure.18
The issue that needs to be resolved in this petition for review is whether the Court of Appeals erred in
dismissing the petition for annulment of judgment filed by petitioners.
We reiterate the rule that a client is bound by the mistakes of his counsel except when the negligence of his
counsel is so gross, reckless and inexcusable that the client is deprived of his day in court.19 Only when the
The governing rule is Rule 47 of the 1997 Rules of Civil Procedure on Annulment of Judgments or Final application of the general rule would result in serious injustice should the exception apply. 20 We find no reason
Orders and Resolutions. Sections 1 and 2 of the Rule provide for its coverage and the grounds therefor, thus: to apply the exception in this case.

Sec. 1. Coverage. - This Rule shall govern the annulment by the Court of Appeals of judgments or In addition, it is provided in Section 2 of Rule 47 that extrinsic fraud shall not be a valid ground if it was
final orders and resolutions in civil actions of Regional Trial Courts for which the ordinary remedies availed of, or could have been availed of, in a motion for new trial or petition for relief. In other words, it is
of new trial, appeal, petition for relief or other appropriate remedies are no longer available through effectively barred if it could have been raised as a ground in an available remedial measure.21 The records show
no fault of the petitioner. that after petitioners learned of the judgment of default, they filed a motion for new trial on the ground of
extrinsic fraud. It was however denied by the trial court. They filed a notice of appeal thereafter. Hence, they
Sec. 2. Grounds for annulment. - The annulment may be based only on the grounds of extrinsic are now precluded from alleging extrinsic fraud as a ground for their petition for annulment of the trial court
fraud and lack of jurisdiction. decision.

Extrinsic fraud shall not be a valid ground if it was availed of, or could have been availed of, in a motion for We are also not persuaded by petitioners’ assertion that the trial court judge lacked jurisdiction so as to justify
new trial or petition for relief. the annulment of his decision in Civil Case No. Q-96-29207. Lack of jurisdiction as a ground for annulment of
judgment refers to either lack of jurisdiction over the person of the defending party or over the subject matter
of the claim.22 Jurisdiction over the person of the defendant or respondent is acquired by voluntary appearance
Under the Rule, an action for annulment of judgments may only be availed of on the following grounds: (1)
or submission by the defendant or respondent to the court, or by coercive process issued by the court to him,
extrinsic fraud and (2) lack of jurisdiction.
generally by the service of summons. The trial court clearly had jurisdiction over the person of the defending
party, the petitioners herein, when the latter received the summons from the court. On the other hand,
Extrinsic fraud refers to any fraudulent act of the prevailing party in the litigation which is committed outside jurisdiction over the subject matter of the claim is conferred by law and is determined from the allegations in
of the trial of the case, whereby the unsuccessful party has been prevented from exhibiting fully his case, by the complaint. Under the law, the action for specific performance and damages is within the jurisdiction of the
fraud or deception practiced on him by his opponent. Fraud is regarded as extrinsic where it prevents a party RTC. Petitioners’ submission, therefore, that the trial court lacked jurisdiction does not hold water.
from having a trial or from presenting his entire case to the court, or where it operates upon matters pertaining
not to the judgment itself but to the manner in which it is procured. The overriding consideration when
We note that petitioners’ arguments to support their stand that the trial court did not have jurisdiction actually
extrinsic fraud is alleged is that the fraudulent scheme of the prevailing litigant prevented a party from having
pertain to the substance of the decision. Jurisdiction is not the same as the exercise of jurisdiction. As
his day in court.13
distinguished from the exercise of jurisdiction, jurisdiction is the authority to decide a cause, and not the
decision rendered therein. Where there is jurisdiction over the person and the subject matter, the decision on all
Petitioners in this case did not allege nor present evidence of fraud or deception employed on them by the other questions arising in the case is but an exercise of the jurisdiction. And the errors which the court may
respondents to deprive them of opportunity to present their case to the court. They, however, assert that the commit in the exercise of jurisdiction are merely errors of judgment which are the proper subject of an
appeal.23 The errors raised by petitioners in their petition for annulment assail the content of the decision of the On May 4, 1990, the Department of Agrarian Reform (DAR), through its Municipal Agrarian Reform Officer,
trial court and not the court’s authority to decide the suit. In other words, they relate to the court’s exercise of issued a Notice of Coverage, placing the property under the coverage of Republic Act (R.A.) No. 6657 or the
its jurisdiction, but petitioners failed to show that the trial court did not have the authority to decide the case. Comprehensive Agrarian Reform Law of 1988. There being an opposition from the heirs of Petra Piit, the case
was docketed as DARAB Case No. X-305. On August 27, 1991, DARAB Provincial Adjudicator Abeto A.
Based on the foregoing discussion, it is clear that petitioners’ petition for annulment of judgment had no basis Salcedo, Jr. rendered a decision declaring the nature of the property as residential and not suitable for
agriculture. The Regional Director filed a notice of appeal, which the Provincial Adjudicator disallowed for
and was rightly dismissed by the Court of Appeals.
being pro forma and frivolous. The decision became final and executory and Springfield proceeded to develop
the property.
IN VIEW WHEREOF, the petition at bar is DENIED.
The DAR Regional Director then filed a petition for relief from judgment of the DARAB Decision, docketed
as DARAB Case No. 0555. In its Decision dated October 5, 1995, the DARAB granted the petition and gave
SO ORDERED.
due course to the Notice of Coverage. It also directed the Municipal Agrarian Reform Office to proceed with
the documentation, acquisition, and distribution of the property to the true and lawful beneficiaries.

The DARAB also issued an Order dated May 22, 1997, ordering the heirs of Piit and Springfield to pay the
farmer-beneficiaries the amount of Twelve Million, Three Hundred Forty Thousand, Eight Hundred Pesos
(₱12,340,800.00), corresponding to the value of the property since the property has already been developed
into a subdivision.

On June 13, 1997, Springfield and the heirs of Piit (petitioners) filed with the RTC of Cagayan de Oro City,
Branch 40, a petition for annulment of the DARAB Decision dated October 5, 1995 and all its subsequent
proceedings. Petitioners contend that the DARAB decision was rendered without affording petitioners any
notice and hearing.

On motion filed by the farmer-beneficiaries, the RTC issued an Order dated June 25, 1997, dismissing the case
for lack of jurisdiction.
Doctrine of non-interference
On July 2, 1997, petitioners filed with the Court of Appeals (CA) a special civil action for certiorari,
G.R. NO. 142628             February 6, 2007 mandamus, and prohibition with prayer for the issuance of writ of preliminary injunction and/or temporary
restraining order, docketed as CA-G.R. SP No. 44563. Petitioners alleged that the RTC committed grave abuse
SPRINGFIELD DEVELOPMENT CORPORATION, INC. and HEIRS OF PETRA CAPISTRANO
of discretion when it ruled that the annulment of judgment filed before it is actually an action for certiorari in a
PIIT, Petitioners,
different color. According to petitioners, what it sought before the RTC is an annulment of the DARAB
vs.
Decision and not certiorari, as the DARAB Decision is void ab initio for having been rendered without due
HONORABLE PRESIDING JUDGE OF REGIONAL TRIAL COURT OF MISAMIS ORIENTAL,
process of law.
BRANCH 40, CAGAYAN DE ORO CITY, DEPARTMENT OF AGRARIAN REFORM
ADJUDICATION BOARD (DARAB), DAR REGION X DIRECTOR, ROSALIO GAMULO, In the assailed Decision dated July 16, 1998, the CA dismissed the petition for lack of merit, ruling that the
FORTUNATO TELEN, EMERITA OLANGO, THERESA MONTUERTO, DOMINGO H. CLAPERO, RTC does not have jurisdiction to annul the DARAB Decision because it is a co-equal body.
JOEL U. LIM, JENEMAIR U. POLLEY, FIDELA U. POLLEY, JESUS BATUTAY, NICANOR
UCAB, EMERIA U. LIM, EMILITO CLAPERO, ANTONINA RIAS, AURILLIO ROMULO, ERWIN However, on January 12, 1999, the CA ordered the elevation of the DARAB records before it, declaring that it
P. CLAPERO, EVELITO CULANGO, VILMA/CRUISINE ALONG, EFREN EMATA, GREGORIO "overlooked the fact that petitioners likewise applied for a writ of prohibition against the enforcement of the
CABARIBAN, and SABINA CANTORANA, Respondents. DARAB decision which they claim to be patently void." Forwarded to the CA were the records of the original
case filed with the DARAB-Region X, and it appearing that the petition for relief from judgment and its
DECISION pertinent records were forwarded to the DARAB Central Office, the CA issued another Resolution on
December 20, 1999, requiring the DARAB Central Office to forward the records of the case. But after receipt
AUSTRIA-MARTINEZ, J.:
of the records, the CA simply denied petitioners' motion for reconsideration per Resolution dated February 23,
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court. The principal issue 2000 without specifically resolving the issues raised concerning the prayer for a writ of prohibition.
presented for resolution is whether the Regional Trial Court (RTC) has jurisdiction to annul final judgment of
Hence, the present petition on the following grounds:
the Department of Agrarian Reform Adjudication Board (DARAB).
I
The antecedent facts:
THE COURT OF APPEALS COMMITTED A CLEAR ERROR OF LAW IN APPLYING THE
Petra Capistrano Piit previously owned Lot No. 2291 located in Cagayan de Oro City which measured 123,408
PRINCIPLE OF JUDICIAL STABILITY TO JUSTIFY ITS CONCLUSION DIVESTING THE
square meters under Transfer Certificate of Title No. T-62623. Springfield Development Corporation, Inc.
REGIONAL TRIAL COURT OF ITS JURISDICTION VESTED BY LAW OVER CASES
(Springfield) bought Lot No. 2291-C with an area of 68,732 square meters, and Lot No. 2291-D with an area
WHERE THE EXCLUSIVE JURISDICTION WAS NOT EXPRESSLY GRANTED TO ANY
of 49,778 square meters. Springfield developed these properties into a subdivision project called Mega Heights
OTHER COURTS [SIC] OR TRIBUNAL, IN EFFECT, MODIFYING THE APPLICABLE LAW
Subdivision.
ON THE MATTER.
 II Guidelines implementing B.P. Blg. 129, the quasi-judicial bodies whose decisions are exclusively appealable
to the CA are those, which under the law, R.A. No. 5434, or its enabling acts, are specifically appealable to the
THE COURT OF APPEALS IRREGULARLY DISMISSED PETITIONERS' MOTION FOR CA.
RECONSIDERATION AFTER IT HAD RESOLVED TO ENTERTAIN PETITIONERS'
PETITION FOR PROHIBITION AND TO REVIEW THE DARAB PROCEEDINGS, THEREBY Significantly, B.P. Blg. 129 does not specifically provide for any power of the RTC to annul judgments of
DEPARTING FROM THE USUAL COURSE OF JUDICIAL PROCEEDINGS. quasi-judicial bodies. However, in BF Northwest Homeowners Association, Inc. v. Intermediate Appellate
Court,25 the Court ruled that the RTCs have jurisdiction over actions for annulment of the decisions of the
III National Water Resources Council, which is a quasi-judicial body ranked with inferior courts, pursuant to its
original jurisdiction to issue writs of certiorari, prohibition, and mandamus, under Sec. 21(1) of B.P. Blg. 129,
THE HONORABLE SUPREME COURT, BEING THE HIGHEST TEMPLE OF RIGHTS, AND in relation to acts or omissions of an inferior court. This led to the conclusion that despite the absence of any
TO AVOID SERIOUS MISCARRIAGE OF JUSTICE AND NEEDLESS DELAYS, IS MOST provision in B.P. Blg. 129, the RTC had the power to entertain petitions for annulment of judgments of inferior
RESPECTFULLY URGED TO TAKE COGNIZANCE OF THE PETITION FILED IN CA-G.R. courts and administrative or quasi-judicial bodies of equal ranking. This is also in harmony with the "pre-
SP No. 44563 IN THE EXERCISE OF ITS CONCURRENT JURISDICTION, AS IF THE B.P. Blg. 129" rulings of the Court recognizing the power of a trial court (court of first instance) to annul final
PETITION WAS ORIGINALLY LODGED BEFORE IT. judgments. Hence, while it is true, as petitioners contend, that the RTC had the authority to annul final
judgments, such authority pertained only to final judgments rendered by inferior courts and quasi-judicial
Petitioners argue that under Batas Pambansa (B.P.) Blg. 129, there is no provision that vests with the CA
bodies of equal ranking with such inferior courts.
jurisdiction over actions for annulment of DARAB judgments. Petitioners, however, contend that the RTC
may take cognizance of the annulment case since Section 19 of B.P. Blg. 129 vests the RTC with general The foregoing statements beg the next question, i.e., whether the DARAB is a quasi-judicial body with the
jurisdiction and an action for annulment is covered under such general jurisdiction. According to petitioners, rank of an inferior court such that the RTC may take cognizance of an action for the annulments of its
"this is but a logical consequence of the fact that no other courts were expressly given the jurisdiction over judgments. The answer is no.
such actions." Petitioners further argue that the CA was in error when it summarily ignored their application
for a writ of prohibition, as it was necessary to restrain the DARAB from enforcing its void decision; and even The DARAB is a quasi-judicial body created by Executive Order Nos. 229 and 129-A. R.A. No. 6657
if the DARAB decision was valid, the writ of prohibition could have enjoined the execution of the DARAB delineated its adjudicatory powers and functions. The DARAB Revised Rules of Procedure adopted on
decision since there have been changes which will make the execution unjust and inequitable. December 26, 1988 specifically provides for the manner of judicial review of its decisions, orders, rulings, or
awards. Rule XIV, Section 1 states:
In their Joint-Comments, the farmer-beneficiaries and the DARAB (respondents) refute petitioners' allegation
that they were not afforded due process in the DARAB proceedings, stating that petitioners were impleaded as SECTION 1. Certiorari to the Court of Appeals. Any decision, order, award or ruling by the Board or its
a party thereto, and in fact, they attended some of the hearings although their counsel was absent. Respondents Adjudicators on any agrarian dispute or on any matter pertaining to the application, implementation,
also adopt the CA's ruling that the RTC is not vested with any jurisdiction to annul the DARAB decision. enforcement or interpretation of agrarian reform laws or rules and regulations promulgated thereunder, may be
brought within fifteen (15) days from receipt of a copy thereof, to the Court of Appeals by certiorari, except as
As stated at the outset, the main issue in this case is whether the RTC has jurisdiction to annul a final judgment provided in the next succeeding section. Notwithstanding an appeal to the Court of Appeals the decision of the
of the DARAB. Board or Adjudicator appealed from, shall be immediately executory.
Note must be made that the petition for annulment of the DARAB decision was filed with the RTC on June 13, Further, the prevailing 1997 Rules of Civil Procedure, as amended, expressly provides for an appeal from the
1997, before the advent of the 1997 Rules of Civil Procedure, which took effect on July 1, 1997. Thus, the DARAB decisions to the CA.
applicable law is B.P. Blg. 129 or the Judiciary Reorganization Act of 1980, enacted on August 10, 1981.
The rule is that where legislation provides for an appeal from decisions of certain administrative bodies to the
It is also worthy of note that before the effectivity of B.P. Blg. 129, a court of first instance has the authority to CA, it means that such bodies are co-equal with the RTC, in terms of rank and stature, and logically, beyond
annul a final and executory judgment rendered by another court of first instance or by another branch of the the control of the latter.29
same court. This was the Court's ruling in Dulap v. Court of Appeals. Yet, in subsequent cases, the Court held
that the better policy, as a matter of comity or courteous interaction between courts of first instance and the Given that DARAB decisions are appealable to the CA, the inevitable conclusion is that the DARAB is a co-
branches thereof, is for the annulment cases to be tried by the same court or branch which heard the main equal body with the RTC and its decisions are beyond the RTC's control. The CA was therefore correct in
action. sustaining the RTC's dismissal of the petition for annulment of the DARAB Decision dated October 5, 1995,
as the RTC does not have any jurisdiction to entertain the same.
The foregoing doctrines were modified in Ngo Bun Tiong v. Sayo, where the Court expressed that pursuant to
the policy of judicial stability, the doctrine of non-interference between concurrent and coordinate courts This brings to fore the issue of whether the petition for annulment of the DARAB judgment could be brought
should be regarded as highly important in the administration of justice whereby the judgment of a court of to the CA. As previously noted, Section 9(2) of B.P. Blg. 129 vested in the CA the exclusive original
competent jurisdiction may not be opened, modified or vacated by any court of concurrent jurisdiction. jurisdiction over actions for annulment of judgments, but only those rendered by the RTCs. It does not
expressly give the CA the power to annul judgments of quasi-judicial bodies. Thus, in Elcee Farms, Inc. v.
With the introduction of B.P. Blg. 129, the rule on annulment of judgments was specifically provided in Semillano,30 the Court affirmed the ruling of the CA that it has no jurisdiction to entertain a petition for
Section 9(2), which vested in the then Intermediate Appellate Court (now the CA) the exclusive original annulment of a final and executory judgment of the NLRC, citing Section 9 of B.P. Blg. 129, as amended,
jurisdiction over actions for annulment of judgments of RTCs. Sec. 9(3) of B.P. Blg. 129 also vested the CA which only vests in the CA "exclusive jurisdiction over actions for annulment of judgments of Regional Trial
with "exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders, or awards of Courts." This was reiterated in Galang v. Court of Appeals, 31 where the Court ruled that that the CA is without
Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, except those jurisdiction to entertain a petition for annulment of judgment of a final decision of the Securities and Exchange
falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Commission.
provisions of this Act, and of sub-paragraph (1) of the third paragraph and subparagraph (4) of the fourth
paragraph of Section 17 of the Judiciary Act of 1948." As provided in paragraph 16 of the Interim Rules and
Recent rulings on similar cases involving annulments of judgments of quasi-judicial bodies are also quite appeal with the OP, while NQSRMDC filed with the CA a petition for certiorari, and prohibition with
instructive on this matter. preliminary injunction.

In Cole v. Court of Appeals,32 involving an annulment of the judgment of the HLURB Arbiter and the Office The OP then issued a Decision dated March 29, 1996 reversing the DAR Secretary's decision and approving
of the President (OP), filed with the CA, the Court stated that, "(U)nder Rule 47 of the Rules of Court, the the application for conversion. Executive Secretary Ruben D. Torres denied the DAR's motion for
remedy of annulment of judgment is confined to decisions of the Regional Trial Court on the ground of reconsideration for having been filed beyond the reglementary period of 15 days, and it was also declared that
extrinsic fraud and lack of jurisdiction x x x." The Court further ruled, viz.: the OP Decision dated March 29, 1996 had already become final and executory.

Although the grounds set forth in the petition for annulment of judgment are fraud and lack of jurisdiction, Because of this, the farmer-beneficiaries staged a hunger strike on October 9, 1997, protesting the OP's
said petition cannot prosper for the simple reason that the decision sought to be annulled was not rendered decision. In order to resolve the strike, the OP issued a so-called "Win/Win" resolution on November 7, 1997,
by the Regional Trial Court but by an administrative agency (HLU Arbiter and Office of the President), modifying the decision in that NQSRMDC's application for conversion is approved only with respect to the
hence, not within the jurisdiction of the Court of Appeals. There is no such remedy as annulment of approximately 44-hectare portion of the land adjacent to the highway, as recommended by the Department of
judgment of the HLURB or the Office of the President. Assuming arguendo that the annulment petition can Agriculture, while the remaining approximately 100 hectares traversed by an irrigation canal and found to be
be treated as a petition for review under Rule 43 of the 1997 Rules of Civil Procedure, the same should have suitable for agriculture shall be distributed to qualified farmer-beneficiaries.1awphi1.net
been dismissed by the Court of Appeals, because no error of judgment was imputed to the HLURB and the
Office of the President. Fraud and lack of jurisdiction are beyond the province of petitions under Rule 43 of A petition for certiorari and prohibition under Rule 65 of the Revised Rules of Court36 was then filed with the
the Rules of Court, as it covers only errors of judgment. A petition for annulment of judgment is an initiatory Court, which was contested by the Office of the Solicitor General on the ground that the proper remedy should
remedy, hence no error of judgment can be the subject thereof. Besides, the Arbiter and the Office of the have been to file a petition for review directly with the CA in accordance with Rule 43 of the Revised Rules of
President indisputably have jurisdiction over the cases brought before them in line with our ruling in Francisco Court.
Sycip, Jr. vs. Court of Appeals, promulgated on March 17, 2000, where the aggrieved townhouse buyers may
seek protection from the HLURB under Presidential Decree No. 957, otherwise known as "Subdivision and In resolving the issue, the Court recognized the rule that the Supreme Court, CA and RTC have original
Condominium Buyers' Protective Decree."33 (Emphasis supplied) concurrent jurisdiction to issue a writ of certiorari, prohibition, and mandamus. However, due to compelling
reasons and in the interest of speedy justice, the Court resolved to take primary jurisdiction over the petition in
In Macalalag v. Ombudsman,34 the Court ruled that Rule 47 of the 1997 Rules of Civil Procedure on the interest of speedy justice, after which the Court nullified the act of the OP in re-opening the case and
annulment of judgments or final orders and resolutions covers "annulment by the Court of Appeals of substantially modifying its March 29, 1996 Decision which had already become final and executory, as it was
judgments or final orders and resolutions in civil actions of Regional Trial Courts for which the ordinary in gross disregard of the rules and basic legal precept that accord finality to administrative determinations.
remedies of new trial, appeal, petition for relief or other appropriate remedies could no longer be availed of
through no fault of the petitioner." Thus, the Court concluded that judgments or final orders and resolutions of It must be stressed at this point that the Court, as a rule, will not entertain direct resort to it unless the redress
the Ombudsman in administrative cases cannot be annulled by the CA, more so, since The Ombudsman Act desired cannot be obtained in the appropriate courts, and exceptional and compelling circumstances, such as
specifically deals with the remedy of an aggrieved party from orders, directives and decisions of the cases of national interest and of serious implications, justify the availment of the extraordinary remedy of writ
Ombudsman in administrative disciplinary cases only, and the right to appeal is not to be considered granted to of certiorari, prohibition, or mandamus calling for the exercise of its primary jurisdiction.37 The Court finds no
parties aggrieved by orders and decisions of the Ombudsman in criminal or non-administrative cases. compelling circumstances in this case to warrant a relaxation of the foregoing rule. The Fortich case is not
analogous with the present case such that the Court is not bound to abandon all rules, take primary jurisdiction,
While these cases involve annulments of judgments under the 1997 Rules of Civil Procedure, as amended, and resolve the merits of petitioners' application for a writ of prohibition.
still, they still find application in the present case, as the provisions of B.P. Blg. 129 and the 1997 Rules of
Civil Procedure, as amended, on annulment of judgments are identical. In the present case, the assailed DARAB Decision dated October 5, 1995 granting the petition for relief from
judgment and giving due course to the Notice of Coverage was made pursuant to a petition for relief from
Consequently, the silence of B.P. Blg. 129 on the jurisdiction of the CA to annul judgments or final orders and judgment filed by the DAR, albeit petitioners are contesting the validity of the proceedings held thereon. On
resolutions of quasi-judicial bodies like the DARAB indicates its lack of such authority. the other hand, in Fortich, the OP's "Win/Win" resolution dated November 7, 1997 was made motu proprio, as
a result of the hunger strike staged by the farmer-beneficiaries.
Further, petitioners are also asking the Court to take cognizance of their prayer for the issuance of a writ of
prohibition, which they claim was not acted upon by the CA, citing the Court's action in Fortich v. Further, the OP's "Win/Win" Resolution dated November 7, 1997 in the Fortich case is a patently void
Corona35 where the Court took cognizance of the petition previously filed with the CA due to compelling judgment since it was evident that there was already an existing final and executory OP Decision dated March
reasons. The Court is not persuaded to do so. 29, 1996. In this case, the assailed DARAB Decision dated October 5, 1995 appears to be regular on its face,
and for its alleged nullity to be resolved, the Court must delve into the records of the case in order to determine
Fortich involved a 144-hectare land located at San Vicente, Sumilao, Bukidnon, owned by the Norberto the validity of petitioners' argument of lack of due process, absent notice and hearing.
Quisumbing, Sr. Management and Development Corporation (NQSRMDC), which was leased as a pineapple
plantation to Del Monte Philippines, Inc. for a period of 10 years. During the existence of the lease, the DAR Moreover, the principle of hierarchy of courts applies generally to cases involving factual questions. As it is
placed the entire 144-hectare property under compulsory acquisition and assessed the land value at ₱2.38 not a trier of facts, the Court cannot entertain cases involving factual issues. 38 The question of whether the
million. When the NQSRMDC/BAIDA (Bukidnon Agro-Industrial Development Association) filed an DARAB Decision dated October 5, 1995 is null and void and enforceable against petitioners for having been
application for conversion due to the passage of Resolution No. 6 by the Provincial Development Council of rendered without affording petitioners due process is a factual question which requires a review of the records
Bukidnon and Ordinance No. 24 by the Sangguniang Bayan of Sumilao, Bukidnon, reclassifying the area from of this case for it to be judiciously resolved.
agricultural to industrial/institutional, the same was disapproved by the DAR Secretary and instead, the
property was placed under the compulsory coverage of Comprehensive Agrarian Reform Program for The Court notes that the CA, indeed, failed to resolve petitioners' prayer for the issuance of the writ of
distribution to all qualified beneficiaries. This prompted Governor Carlos O. Fortich of Bukidnon to file an prohibition, which, significantly, focuses on the alleged nullity of the DARAB Decision dated October 5,
1995. On this score, the CA found that the application for the issuance of the writ of prohibition was actually a
collateral attack on the validity of the DARAB decision. But, a final and executory judgment may be set aside
in three ways;39 and a collateral attack, whereby in an action to obtain a different relief, an attack on the reinstated the Decision4 of the Provincial Agrarian Reform Adjudicator (PARAD) of Laguna dated October
judgment is nevertheless made as an incident thereof,40 is one of these. This tenet is based upon a court's 12, 1993.
inherent authority to expunge void acts from its records.41 Despite recognizing the need to resolve petitioners'
application for the writ of prohibition in its Resolution dated January 12, 1999, the CA nonetheless summarily The Facts
denied petitioners' motion for reconsideration in its Resolution dated February 23, 2000,42 leaving the matter
hanging and unresolved. Respondent Leon Carpo (Leon) and his brother Francisco G. Carpo are the registered co-owners of a parcel of
land designated as Lot No. 2175 of the Santa Rosa Estate Subdivision, situated at Sta. Rosa, Laguna, covered
At first, the Court considered resolving the merits of petitioners' motion for reconsideration concerning their by Transfer Certificate of Title (TCT) No. T-17272 of the Register of Deeds of Laguna, with an area of 91,337
application for a writ of prohibition against enforcing the DARAB Decision dated October 5, 1995. Thus, in a square meters, more or less. A portion thereof, consisting of 3.5 hectares, pertained to Leon and his wife,
Resolution dated June 5, 2006, the Court directed the CA to transmit the records of DARAB Case No. 0555, respondent Aurora Carpo. It was devoted to rice and corn production (subject land) and was tenanted by one
which was previously required by the CA to be forwarded to it per Resolution dated December 20, Domingo Pastolero (Domingo), husband of Adoracion Pastolero (Adoracion). When Domingo passed away,
1999.43 However, as of even date, the CA has not complied with the Court's Resolution. Withal, upon re- Adoracion together with her son Elpidio Pastolero, assumed the tenancy rights of Domingo over the subject
examination of the issues involved in this case, the Court deems it more judicious to remand this case to the land.
CA for immediate resolution of petitioners' motion for reconsideration, re: their application for the writ of
prohibition. However, on December 29, 1983, Adoracion, by executing a notarized Pinanumpaang Salaysay with the
conformity of Leon, and for a consideration of P72,500.00, transferred her rights in favor of petitioner Otilia
Moreover, the radical conflict in the findings of the Provincial Adjudicator and the DARAB as regards the Sta. Ana (petitioner) who, together with her husband, Marciano de la Cruz (Marciano), became the new
nature of the subject property necessitates a review of the present case. In this regard, the CA is in a better tenants of the subject land.
position to fully adjudicate the case for it can delve into the records to determine the probative value of the
evidence supporting the findings of the Provincial Adjudicator and of the DARAB. In addition, the CA is At the outset, the parties had a harmonious tenancy relationship. Unfortunately, circumstances transpired
empowered by its internal rules to require parties to submit additional documents, as it may find necessary to which abraded the relationship. The Department of Agrarian Reform (DAR) mediated in order to amicably
promote the ends of substantial justice, and further order the transmittal of the proper records for it to fully settle the controversy, but no settlement was reached by the parties. Thus, the instant case.
adjudicate the case. After all, it is an avowed policy of the courts that cases should be determined on the
In their Complaint for Ejectment due to Non-Payment of Lease Rentals dated December 1, 1989, respondents
merits, after full opportunity to all parties for ventilation of their causes and defenses, rather than on
alleged that it was their agreement with petitioner and Marciano to increase the existing rentals from 36 cavans
technicality or some procedural imperfections. In that way, the ends of justice would be served better.44
to 45 cavans, and that, if respondents wanted to repossess the property, they only had to pay the petitioner the
WHEREFORE, the petition is PARTLY GRANTED. This case is REMANDED to the Court of Appeals amount of P72,500.00, the same amount paid by the latter to Adoracion. Respondents further averred that
which is DIRECTED to resolve petitioners' prayer for the issuance of the writ of prohibition in their Motion despite repeated demands, petitioner refused to pay the actual rentals from July 1985 to September 1989, in
for Reconsideration. violation of Presidential Decree (P.D.) No. 817; and that the subject land had been declared, upon the
recommendation of the Human Settlements Committee, suitable for commercial and industrial purposes, per
Upon finality of this Decision, let the records be remanded forthwith to the Court of Appeals. Zoning Ordinance of 1981 of the Municipality of Sta. Rosa, Laguna. Respondents prayed that petitioner be
ejected from the subject land and be directed to pay P75,016.00 as unpaid rentals.
No pronouncement as to costs.
In their Answer dated January 26, 1990, petitioner and Marciano denied that there was an agreement to
SO ORDERED. increase the existing rental which was already fixed at 36 cavans of palay, once or twice a year depending on
the availability of irrigation water; that neither was there an agreement as to the future surrender of the land in
favor of the respondents; that they did not refuse to pay the rentals because they even sent verbal and written
notices to the respondents, advising them to accept the same; and that in view of the latter’s failure to respond,
petitioner and Marciano were compelled to sell the harvest and to deposit the proceeds thereof in Savings
Account No. 9166 with the Universal Savings Bank at Sta. Rosa, Laguna under the names of Leon and
Marciano. As their special affirmative defense, petitioner and Marciano claimed that Marciano is a farmer-
beneficiary of the subject land pursuant to P.D. 27. Petitioner and Marciano prayed for the outright dismissal
of the complaint and for the declaration of Marciano as full owner of the subject land.

Thereafter, trial on the merits ensued.

Primary jurisdiction The PARAD’s Ruling
G.R. No. 164340             November 28, 2008 On October 12, 1993, the PARAD ruled that petitioner and Marciano deliberately defaulted in the payment of
OTILIA STA. ANA,petitioner vs. SPOUSES LEON G. CARPO and AURORA CARPO, respondents. the rentals due the respondents. The PARAD found that the deposit made with Republic Planters Bank was
actually in the names of petitioner and Marciano, hence, personal to them. The PARAD also found that it was
DECISION only during the hearing that petitioner and Marciano deposited the amount of P40,000.00 with the Universal
NACHURA, J.: Savings Bank for the unpaid rentals. As such the PARAD considered the deposits as late payments and as
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure seeking implied admission that indeed petitioner and Marciano did not pay the past rentals when they fell due. The
the reversal of the Court of Appeals (CA) Decision dated March 5, 2004 which reversed and set aside the PARAD further held and disposed thus:
Decision of the Department of Agrarian Reform Adjudication Board (DARAB) dated June 24, 1998 and
 The intent of the defendant to subject the said area under PD 27 should pass the criteria set. No costs.
Foremost is the determination of the aggregate riceland of plaintiff. He must have more than seven SO ORDERED.
(7) hectares of land principally devoted to the planting of palay. Area over seven (7) hectares shall Aggrieved, respondents appealed to the CA. On April 16, 2003, Marciano passed away
be the one to be covered by PD 27 on Operation Land Transfer (OLT). In the case at bar, defendants
failed to prove that plaintiff has more than the required riceland. In fact the subject 3.5 hectares are The CA’s Ruling
jointly owned by two. Hence, coverage for OLT is remote.
On March 5, 2004, the CA affirmed the factual findings of the PARAD that petitioner and Marciano failed to
Defendant claimed that plaintiff is covered by LOI 474, and therefore, he is zero retention of area. pay the rentals and that there was no valid tender of payment. The CA added that this failure to pay was tainted
In reference to said law, wherein it provides landowner with other agricultural land of more than 7 with bad faith and deliberate intent. Thus, petitioner and Marciano did not legally comply with their duties as
hectares, or have other industrial lands from where he and his family derived resources, then, the tenants. Moreover, the CA held that the subject land was not covered by P.D. 27, Republic Act (R.A.) No.
owner cannot retain any riceland. However, this is not applicable in the instant case, as the 6657 and Executive Order (E.O.) No. 228, since the same had become a residential, commercial and industrial
defendant failed to prove that plaintiff has other source of income from where they will derive their land, to wit:
sustenance.
In the case at bar, We opted to give more weight to the petitioners contention that the "subject
WHEREFORE, in view of the foregoing, Judgment is hereby rendered: landholding is for residential, commercial, and industrial purposes as declared by zoning ordinance
of 1981 of the town of Sta. Rosa, Laguna upon recommendation of the Human Settlement
a) Ordering the ejectment of defendant from the subject landholding for non-payment of lease rentals; Committee xxx." The vicinity map of the subject landholding shows that it is almost beside Nissan
b) Ordering the defendant Marciano de la Cruz to surrender the possession and cultivation of the subject land Motors Technopa[r]k and surrounded by the South Expressway and several companies such as the
to herein plaintiffs; Coca-Cola Bottlers Philippines, Inc. and Toyota Motors Philippines along the Pulong Santa Cruz,
National Road. The vicinity map shows therefore that the subject landholding is a residential,
c) Ordering the defendant to pay as actual damage the amount of P75,016.00 corresponding to the unpaid
commercial, and industrial area exempted from the coverage of P.D. No. 27, Republic Act. No.
rentals from July 18, 1985 up to September 16, 1989[; and] 6657 and Executive Order No. 228.
d) [D]eclaring the subject land not covered by Presidential Decree No. 27, Republic Act [No.] 6657, and
Executive Order No. 228. The CA ruled in favor of the respondents in this wise:
SO ORDERED.
WHEREFORE, premises considered and pursuant to applicable law and jurisprudence on the
Petitioner and Marciano sought relief from the DARAB.13 matter, the present Petition is hereby GRANTED. Accordingly, the decision of the Department of
Agrarian Reform Adjudication Board-Central Office, Elliptical Road, Diliman, Quezon City
The DARAB’s Ruling (promulgated on June 24, 1998) is hereby REVERSED and SET ASIDE and a new one
entered- REINSTATING the decision of the Department of Agrarian Reform Adjudication Board-
On June 24, 1998, the DARAB held: Region IV, Office of the Provincial Adjudicator, Sta. Cruz, Laguna (dated October 12, 1993). No
pronouncement as to costs.
It is a fundamental rule in this jurisdiction that for non-payment of lease rentals to warrant the
dispossession and ejectment of a tenant, the same must be made in a willful and deliberate manner SO ORDERED.
(Cabero v. Caturna, et al., CA-G.R. 05886-R, March 10, 1977). For a valid ouster or ejectment of a
farmer-tenant, the willful and deliberate intent not to pay lease rentals and/or share can be Petitioner filed a Motion for Reconsideration assailing the aforementioned Decision which the CA, however,
ascertained when there is a determination of will not to do a certain act. denied in its Resolution dated June 28, 2004.

Considering the circumstances obtaining in this case, it cannot be concluded that the defendants- Hence, this Petition based on the following grounds:
appellants deliberately failed or refused to pay their lease rentals. It was not the fault of defendants-
appellants herein that the rentals did not reach the plaintiffs-appellees because the latter choose to THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN ARROGATING UPON
lend a deaf ear to the notices sent to them. Clearly, therefore plaintiffs-appellees failed to show by ITSELF WHAT IS OTHERWISE DAR’S POWER TO DETERMINE WHETHER THE SUBJECT
substantial evidence that the defendants-appellants deliberately failed or refused to pay their lease AGRICULTURAL LAND HAS BECOME RESIDENTIAL/INDUSTRIAL/COMMERCIAL.
rentals. It has been held that the mere failure of a tenant to pay the landowner’s share does not
necessarily give the latter the right to eject the former when there is lack of deliberate intent on the THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT EQUATED "LAND
part of the tenant to pay (Roxas y Cia v. Cabatuando, 1 SCRA 1106). RECLASSIFICATION" WITH "LAND CONVERSION" FOR PURPOSES OF DETERMINING
THE PROPRIETY OF EJECTMENT OF AN AGRICULTURAL LESSEE.
Thus:
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT FAILED TO NOTE
WHEREFORE, finding the appeal interposed by the defendants-appellants to be meritorious, the THAT AN EJECTMENT SUIT BASED ON A CLAIM OF NON-PAYMENT OF LEASE
Decision appealed from is hereby SET ASIDE and another judgment issued as follows: RENTAL IS DIAMETRICALLY ANTITHETICAL TO THE CLAIM THAT THE SUBJECT
LAND IS NO LONGER AGRICULTURAL BUT "A RESIDENTIAL, COMMERCIAL AND
1. Enjoining plaintiffs-appellees to respect the peaceful possession and cultivation of the INDUSTRIAL AREA EXEMPTED FROM THE COVERAGE OF P.D. NO. 27, REPUBLIC ACT
land in suit by the defendants-appellants; and NO. 6657 AND EXECUTIVE ORDER NO. 228.

2. Directing the MARO of Sta. Rosa, Laguna to assist the parties in the proper accounting THE DECISION DATED MARCH 5, 2004--INSOFAR AS IT ADOPTED THE FINDING OF
of lease rentals to be paid by the defendants-appellants to the plaintiffs-appellees. DARAB-REGION IV, OFFICE OF THE PROVINCIAL ADJUDICATOR, STA. CRUZ,
 LAGUNA INSTEAD OF THAT OF THE DARAB-CENTRAL--IS VIOLATIVE OF SEC. 14, Before we resolve this case on the merits, a procedural issue must be disposed of.
ART. VIII OF THE 1987 CONSTITUTION FOR HAVING DECIDED WITHOUT EXPRESSING
THEREIN CLEARLY AND DISTINCTLY THE FACTS AND THE LAW ON WHICH SAID Respondents strongly argue that the instant Petition was filed out of time because, while petitioner originally
DECISION IS BASED. claimed to have received her copy of the CA Resolution dated June 28, 2004, denying her Motion for
Reconsideration, on July 12, 2004, petitioner eventually admitted, after respondents showed proof to the
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN RESORTING TO contrary, that she actually received the said Resolution on July 7, 2004. Thus, petitioner had only up to July
SURMISES AND CONJECTURES WHEN IT RULED THAT THE FAILURE OF THE HEREIN 22, 2004 to appeal the CA's ruling to this Court. In this case, petitioner filed her Motion for Extension of Time
PETITIONER AND HER DECEASED HUSBAND TO DELIVER THE LEASE RENTALS TO to File Petition for Review on Certiorari (Motion) on July 23, 2004. As such, there was no more period to
HEREIN RESPONDENTS, WAS DONE SO IN BAD FAITH AND WITH DELIBERATE extend. Further, the instant Petition was filed on August 27, 2004, or three (3) days beyond the thirty-day
INTENT TO DEPRIVE THE LAND OWNERS THEREOF. extended period. Hence, respondents submit that the CA decision had already become final and executory.

Petitioner asseverates that there is no evidence to support respondents' claim that the failure to pay the lease Petitioner alleges that on July 15, 2004, she met with her counsel to engage the latter's legal services. During
rentals was tainted with malevolence, as the records are replete with acts indicative of good faith on the part of said meeting, counsel asked petitioner about the date of receipt of the assailed CA Resolution. Petitioner
the petitioner and Marciano and bad faith on the part of respondents. replied that she received her copy on July 12, 2004. On July 20, 2004, counsel filed an Entry of Appearance
with the CA On July 23, 2004, petitioner through counsel filed the Motion for Extension of Time to File
Moreover, petitioner claimed that the power to determine whether or not the subject land is non-agricultural, Petition for Review. On August 11, 2004, petitioner received a copy of respondents' Opposition to the Motion.
hence, exempt from the coverage of the Comprehensive Agrarian Reform Law (CARL), lies with the DAR, Thereafter, upon verification, petitioner admitted that she received the copy of the CA Resolution on July 7,
and not with the courts; that mere reclassification by way of a zoning ordinance does not warrant the 2004. Thus, her Motion was admittedly filed one day late. Petitioner begs the indulgence of this Court for her
dispossession of a tenant but conversion does, and entitles the tenant to payment of disturbance compensation; oversight and mistake, attributing the same to her lack of education and old age.
the legal concepts of reclassification and conversion are separate and distinct from each other; that
respondents' complaint before the PARAD alleged and established the fact that the subject land is a riceland, Rules of procedure are merely tools designed to facilitate the attainment of justice. If the application of the
therefore, agricultural; that the CA failed to explain why it upheld the findings of the PARAD on the issue of Rules would tend to frustrate rather than to promote justice, it is always within our power to suspend the rules
non-payment of lease rentals; and that though the issue of non-payment of lease rentals is a question of fact, or except a particular case from their operation. Law and jurisprudence grant to courts the prerogative to relax
due to the conflict of the factual findings of the PARAD and CA with those of the DARAB, petitioner asks compliance with the procedural rules, even the most mandatory in character, mindful of the duty to reconcile
that this Court review the evidence on record, and pursuant to the CA decision in Cabero v. Caturna, et the need to put an end to litigation speedily and the parties' right to an opportunity to be heard.
al., rule on whether petitioner willfully and deliberately refused to pay lease rentals as to warrant her
dispossession from the subject land. Our recent ruling in Tanenglian v. Lorenzo is instructive:

On the other hand, respondents aver that petitioner and her family are wealthy, as they own numerous We have not been oblivious to or unmindful of the extraordinary situations that merit liberal
properties in Sta. Rosa, Laguna including a luxurious house; 19 that, as such, petitioner cannot be considered as application of the Rules, allowing us, depending on the circumstances, to set aside technical
a landless tenant deserving the protection of agrarian reform laws; that the DARAB negated the highest degree infirmities and give due course to the appeal. In cases where we dispense with the technicalities, we
of respect the factual findings of the PARAD deserved; that petitioner's claims that Marciano repeatedly made do not mean to undermine the force and effectivity of the periods set by law. In those rare cases
verbal and written notices for Leon to accept their lease rentals were fraudulent designs to disguise the where we did not stringently apply the procedural rules, there always existed a clear need to prevent
deliberate intent of petitioner not to pay the lease rentals; that when Leon went to petitioner's residence, the commission of a grave injustice. Our judicial system and the courts have always tried to
petitioner did not pay the P10,000.00 due as lease rentals; that during the hearing before the PARAD, when maintain a healthy balance between the strict enforcement of procedural laws and the guarantee that
respondents' counsel requested that they be furnished a bank certificate as to the existence of said bank every litigant be given the full opportunity for the just and proper disposition of his cause.
deposits in Republic Planters Bank as of April 20, 1987 and October 1, 1987, petitioner herself commented,
"Nagdeposito ho talaga kami sa pangalan namin"; that the statement of petitioner is an admission that bank In this case, petitioner was one day late in filing her Motion for Extension. To deny the Petition on this ground
deposits, if any, were made, not in the name of Leon as contained in the written notices, but rather in the alone is too harsh a penalty for a day’s delay, taking into consideration the time, resources and effort spent by
names of petitioner and Marciano; that such certificate was not introduced in evidence and that upon inquiry, petitioner and even by the respondents, in order to pursue this case all the way to this Court. Thus, we dispense
said deposits do not actually exist; that per recent inquiry, the bank deposit in Universal Savings Bank only with the apparent procedural defect and resolve this case on the merits. The ends of justice are better served
contains P1,020.19 due to previous withdrawals made by Marciano; that the foregoing circumstances indicate when cases are determined on the merits – with all parties given full opportunity to ventilate their causes and
a pattern of fraudulent misrepresentations by the petitioner to mislead the DARAB into believing that defenses – rather than on technicality or some procedural imperfections.
petitioner and Marciano did not deliberately refuse to pay the lease rentals; that from July 18, 1985 up to the
The Petition is impressed with merit.
present, petitioner failed to pay the lease rentals showing again, the deliberate refusal to pay; that this default
on the part of the petitioner has been recurring for several years already, thus depriving the respondents as In sum, there are two (2) ultimate issues that require resolution in this case:
landowners of their share of the subject land in violation of the principle of social justice; that as raised in
respondents Omnibus Supplemental Motion for Reconsideration before the DARAB and as found by the CA 1) Whether the CA erred in ruling that the subject land had already become residential, commercial
based on its vicinity map, the subject land is of a residential, commercial and industrial character, exempted and/or industrial, thus, excluded from the coverage of our laws on agrarian reform; and
from agrarian reform coverage; and that the DARAB erred in not finding the sale of the tenancy rights of
Adoracion to petitioner and Marciano for P72,500.00 violative of P.D. 27 even if the same was with Leon's 2) Whether the petitioner, as an agricultural tenant, failed to pay her lease rentals when the same fell
consent. The sale, respondents contend was therefore, null and void ab initio, not susceptible of any due as to warrant her dispossession of the subject land.
ratification.
On the first issue, we rule in the affirmative.
Our Ruling
To recapitulate, the instant case sprang from a Complaint for Ejectment based on Non-Payment of lease Thus, Section 3, Rule II of the 2003 DARAB Rules of Procedure provides:
rentals. Though an allegation was made by the respondents that the land had been declared, upon the
recommendation of the Human Settlements Committee, suitable for commercial and industrial purposes, per SECTION 3. Agrarian Law Implementation Cases. – The Adjudicator or the Board shall have no
Zoning Ordinance of 1981 of the Municipality of Sta. Rosa, no argument was advanced by respondents to jurisdiction over matters involving the administrative implementation of RA No. 6657, otherwise
support such allegation, in the same way that no prayer for the ejectment of the tenants was raised based on known as the Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian laws as
that allegation. The PARAD held that petitioner should be ejected for non-payment of lease rentals. It also enunciated by pertinent rules and administrative orders, which shall be under the exclusive
ruled that the subject land is not covered by P.D. No. 27, R.A. No. 6657, and E.O. No. 228, not on the basis of prerogative of and cognizable by the Office of the Secretary of the DAR in accordance with his
the allegation in the complaint, but on the respondents' right of retention. issuances, to wit:

On appeal, the DARAB concentrated on the issue of petitioner’s failure to pay lease rentals. When the 3.1 Classification and identification of landholdings for coverage under the agrarian
DARAB ruled that petitioner and Marciano did not deliberately fail to pay said rentals, respondents raised a reform program and the initial issuance of CLOAs and EPs, including protests or
new issue in their Omnibus Motion that the transaction between Adoracion and petitioner was void in violation oppositions thereto and petitions for lifting of such coverage;
of P.D. No. 27, despite the conformity of Leon. This issue was not resolved by the DARAB. 3.2 Classification, identification, inclusion, exclusion, qualification, or disqualification of
Finally, when the case reached the CA, the appellate court affirmed the findings of the PARAD that petitioner potential/actual farmer-beneficiaries;
and Marciano deliberately and in bad faith did not pay the lease rentals. The CA, however, also held that the 3.3 Subdivision surveys of land under CARP;
subject land had already become a residential, commercial and industrial area based on the vicinity map 3.4 Recall, or cancellation of provisional lease rentals, Certificates of Land Transfers
showing that the land was surrounded by commercial and industrial establishments. (CLTs) and CARP Beneficiary Certificates (CBCs) in cases outside the purview of
Presidential Decree (PD) No. 816, including the issuance, recall, or cancellation of EPs or
Without doubt, the PARAD acted without jurisdiction when it held that the subject land was no longer covered
CLOAs not yet registered with the Register of Deeds;
by our agrarian laws because of the retention rights of the respondents. The CA likewise acted without
jurisdiction when it ruled that the land had become non-agricultural based on a zoning ordinance of 1981– on 3.5 Exercise of the right of retention by the landowner;
the strength of a mere vicinity map. These rulings violated the doctrine of primary jurisdiction. 3.6 Application for exemption from coverage under Section 10 of RA 6657;
3.7 Application for exemption pursuant to Department of Justice (DOJ) Opinion No. 44
The doctrine of primary jurisdiction precludes the courts from resolving a controversy over which jurisdiction (1990);
has initially been lodged in an administrative body of special competence. For agrarian reform cases,
3.8 Exclusion from CARP coverage of agricultural land used for livestock, swine, and
jurisdiction is vested in the Department of Agrarian Reform (DAR); more specifically, in the Department of
Agrarian Reform Adjudication Board (DARAB). Executive Order 229 vested the DAR with (1) quasi-judicial poultry raising;
powers to determine and adjudicate agrarian reform matters; and (2) jurisdiction over all matters involving the 3.9 Cases of exemption/exclusion of fish pond and prawn farms from the coverage of
implementation of agrarian reform, except those falling under the exclusive original jurisdiction of the CARP pursuant to RA 7881;
Department of Agriculture and the Department of Environment and Natural Resources. 3.10 Issuance of Certificate of Exemption for land subject of Voluntary Offer to Sell
(VOS) and Compulsory Acquisition (CA) found unsuitable for agricultural purposes;
In Department of Agrarian Reform v. Abdulwahid, we held:
3.11 Application for conversion of agricultural land to residential, commercial, industrial,
As held by this Court in Centeno v. Centeno [343 SCRA 153], "the DAR is vested with the primary or other non-agricultural uses and purposes including protests or oppositions thereto;
jurisdiction to determine and adjudicate agrarian reform matters and shall have the exclusive 3.12 Determination of the rights of agrarian reform beneficiaries to homelots;
jurisdiction over all matters involving the implementation of the agrarian reform program." The 3.13 Disposition of excess area of the tenants/farmer-beneficiary's landholdings;
DARAB has primary, original and appellate jurisdiction "to determine and adjudicate all agrarian 3.14 Increase in area of tillage of a tenant/farmer-beneficiary;
disputes, cases, controversies, and matters or incidents involving the implementation of the 3.15 Conflict of claims in landed estates administered by DAR and its predecessors; or
Comprehensive Agrarian Reform Program under R.A. No. 6657, E.O. Nos. 229, 228 and 129-A,
R.A. No. 3844 as amended by R.A. No. 6389, P.D. No. 27 and other agrarian laws and their 3.16 Such other agrarian cases, disputes, matters or concerns referred to it by the
implementing rules and regulations." Secretary of the DAR.
Verily, there is an established tenancy relationship between petitioner and respondents in this case. An action
Under Section 3 (d) of R.A. No. 6657 (CARP Law), "agrarian dispute" is defined to include "(d) . . . for Ejectment for Non-Payment of lease rentals is clearly an agrarian dispute, cognizable at the initial stage by
any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or
otherwise over lands devoted to agriculture, including disputes concerning farmworkers associations the PARAD and thereafter by the DARAB. 36 But issues with respect to the retention rights of the respondents
or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange as landowners and the exclusion/exemption of the subject land from the coverage of agrarian reform are issues
terms or conditions of such tenurial arrangements. It includes any controversy relating to not cognizable by the PARAD and the DARAB, but by the DAR Secretary because, as aforementioned, the
compensation of lands acquired under this Act and other terms and conditions of transfer of same are Agrarian Law Implementation (ALI) Cases.
ownership from landowners to farmworkers, tenants and other agrarian reform beneficiaries,
whether the disputants stand in the proximate relation of farm operator and beneficiary, landowner It has not escaped our notice that, as this case progressed and reached a higher level in the hierarchy of
and tenant, or lessor and lessee." tribunals, the respondents would, invariably, proffer an additional theory or defense, in order to effect
petitioner’s eviction from the land. As a consequence, the simple issue of ejectment based on non-payment of
Simply put, agrarian disputes, as defined by law and settled in jurisprudence, are within the primary and rentals has been muddled.
exclusive original jurisdiction of the PARAD and the DARAB, while issues of retention and non-coverage of a
land under agrarian reform, among others, are within the domain of the DAR Secretary. Proof necessary for the resolution of the issue of the land being covered by, or excluded/exempted from, P.D.
No. 27, R.A. No. 6657, and other pertinent agrarian laws, as well as of the issue of the right of retention of the
respondents, was not offered in evidence. Worse, the PARAD resolved the issue of retention even if it was not in Roxas y Cia v. Cabatuando, et al.,43 we held that under our law and jurisprudence, mere failure of a tenant to
raised by the respondents at that level, and even if the PARAD had no jurisdiction over the same. pay the landholder's share does not necessarily give the latter the right to eject the former when there is lack of
deliberate intent on the part of the tenant to pay. This ruling has not been overturned.
Likewise, the CA ruled that the land had ceased being agricultural on the basis of a mere vicinity map, in open
disregard of the Doctrine of Primary Jurisdiction, since the issue was within the province of the Secretary of The term "deliberate" is characterized by or results from slow, careful, thorough calculation and consideration
DAR. of effects and consequences.44 The term "willful," on the other hand, is defined as one governed by will
without yielding to reason or without regard to reason.45
We take this opportunity to remind the PARAD and the CA that "courts of justice have no power to decide a
question not in issue." A judgment that goes beyond the issues, and purports to adjudicate something on which We agree with the findings of the DARAB that it was not the fault of petitioner that the lease rentals did not
the parties were not heard, is extra-judicial, irregular and invalid. This norm applies not only to courts of reach the respondents because the latter chose to ignore the notices sent to them. To note, as early as
justice, but also to quasi-judicial November 10, 1986, Marciano executed an Affidavit46 stating that Leon refused to receive the respective lease
rentals consisting of 37 cavans for November 1985 and July 1986. For 1987, Marciano wrote Leon two
bodies such as the PARAD. Accordingly, premature and irregular were the PARAD ruling on the retention letters47 informing him of the availability of the lease rentals for April and October of the same year. On April
rights of the respondents, and the CA decision on the non-agricultural character of the land subject of this 27, 1988, Marciano sought DAR intervention and mediation with respect to the execution of a leasehold
controversy -- these issues not having passed the scrutiny of the DAR Secretary -- are premature and contract and the fixing of the leasehold rentals.48 Meetings were set but respondents failed to attend. 49 The
irregular.37 dispute was referred to the barangay but the parties failed to amicably settle.50
Thus, we cannot allow ourselves to fall into the same error as that committed by the PARAD and the CA, and These factual circumstances negate the PARAD findings of Marciano’s and petitioner's deliberate and willful
resolve the issue of the non-agricultural nature of the subject land by receiving, at this stage, pieces of intent not to pay lease rentals. Good faith was clearly demonstrated by Marciano and petitioner when, because
evidence and evaluating the same, without the respondents having first introduced them in the proper forum. respondents refused to accept the proffered payment, they even went to the point of seeking government
The Office of the DAR Secretary is in a better position to resolve the issues on retention and intervention in order to address their problems with respondents. Absent such deliberate and willful refusal to
exclusion/exemption from agrarian reform coverage, being the agency lodged with such authority inasmuch it pay lease rentals, petitioner's ejectment from the subject land is not justified.
possesses the necessary expertise on the matter.38
WHEREFORE, the instant Petition is GRANTED. The assailed Decision of the Court of Appeals in CA-
Likewise, we refrain from entertaining the issue raised by respondents that petitioner and her family are not G.R. SP No. 60640 is hereby REVERSED and SET ASIDE. The Decision of the Department of Agrarian
landless tenants and are therefore not deserving of any protection under our laws on agrarian reform, because Reform Adjudication Board (DARAB) dated June 24, 1998 in DARAB Case No. 2203
fairness and due process dictate that issues not raised in the proceedings below should not be raised for the is REINSTATED without prejudice to the rights of respondent-spouses Leon and Aurora Carpo to seek
first time on appeal.39 recourse from the Office of the Department of Agrarian Reform (DAR) Secretary on the other issues they
raised. No costs.
On the second issue, we rule in the negative.
SO ORDERED.
Under Section 37 of Republic Act No. 3844,40 as amended, coupled with the fact that the respondents are the
complainants themselves, the burden of proof to show the existence of a lawful cause for the ejectment of the
petitioner as an agricultural lessee rests upon the respondents as agricultural lessors.41 This proceeds from the
principle that a tenancy relationship, once established, entitles the tenant to security of tenure. Petitioner can
only be ejected from the agricultural landholding on grounds provided by law. 42 Section 36 of the same law
pertinently provides:

Sec. 36. Possession of Landholding; Exceptions. – Notwithstanding any agreement as to the period
or future surrender, of the land, an agricultural lessee shall continue in the enjoyment and possession
of his landholding except when his dispossession has been authorized by the Court in a judgment
that is final and executory if after due hearing it is shown that:

xxxx

(6) The agricultural lessee does not pay the lease rental when it falls due: Provided, That if the non-
payment of the rental shall be due to crop failure to the extent of seventy-five per centum as a result
of a fortuitous event, the non-payment shall not be a ground for dispossession, although the
obligation to pay the rental due that particular crop is not thereby extinguished;

xxxx Supreme Court

Respondents failed to discharge such burden. The agricultural tenant's failure to pay the lease rentals must be Philippine Constitution, Article VIII
willful and deliberate in order to warrant his dispossession of the land that he tills.
ARTICLE VIII
Petitioner's counsel opines that there appears to be no decision by this Court on the matter; he thus submits that JUDICIAL DEPARTMENT
we should use the CA decision in Cabero v. Caturna. This is not correct. In an En Banc Decision by this Court
 Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may (4) Order a change of venue or place of trial to avoid a miscarriage of justice.
be established by law. (5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading,
Judicial power includes the duty of the courts of justice to settle actual controversies involving practice, and procedure in all courts, the admission to the practice of law, the integrated bar, and legal
rights which are legally demandable and enforceable, and to determine whether or not there has been a grave assistance to the underprivileged. Such rules shall provide a simplified and inexpensive procedure for the
abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of speedy disposition of cases, shall be uniform for all courts of the same grade, and shall not diminish, increase,
the Government. or modify substantive rights. Rules of procedure of special courts and quasi-judicial bodies shall remain
effective unless disapproved by the Supreme Court.
Section 2. The Congress shall have the power to define, prescribe, and apportion the jurisdiction of  (6) Appoint all officials and employees of the Judiciary in accordance with the Civil Service Law.
the various courts but may not deprive the Supreme Court of its jurisdiction over cases enumerated in Section
5 hereof. Section 6. The Supreme Court shall have administrative supervision over all courts and the
No law shall be passed reorganizing the Judiciary when it undermines the security of tenure of its personnel thereof.
Members.
Section 7. (1) No person shall be appointed Member of the Supreme Court or any lower collegiate
Section 3. The Judiciary shall enjoy fiscal autonomy. Appropriations for the Judiciary may not be court unless he is a natural-born citizen of the Philippines. A Member of the Supreme Court must be at least
reduced by the legislature below the amount appropriated for the previous year and, after approval, shall be forty years of age, and must have been for fifteen years or more, a judge of a lower court or engaged in the
automatically and regularly released. practice of law in the Philippines.
(2) The Congress shall prescribe the qualifications of judges of lower courts, but no person may be
Section 4. (1) The Supreme Court shall be composed of a Chief Justice and fourteen Associate appointed judge thereof unless he is a citizen of the Philippines and a member of the Philippine Bar.
Justices. It may sit en banc or in its discretion, in division of three, five, or seven Members. Any vacancy shall (3) A Member of the Judiciary must be a person of proven competence, integrity, probity, and
be filled within ninety days from the occurrence thereof. independence.
(2) All cases involving the constitutionality of a treaty, international or executive agreement, or law,
which shall be heard by the Supreme Court en banc, and all other cases which under the Rules of Court are Section 8. (1) A Judicial and Bar Council is hereby created under the supervision of the Supreme
required to be heard en banc, including those involving the constitutionality, application, or operation of Court composed of the Chief Justice as ex officio Chairman, the Secretary of Justice, and a representative of
presidential decrees, proclamations, orders, instructions, ordinances, and other regulations, shall be decided the Congress as ex officio Members, a representative of the Integrated Bar, a professor of law, a retired
with the concurrence of a majority of the Members who actually took part in the deliberations on the issues in Member of the Supreme Court, and a representative of the private sector.
the case and voted thereon. (2) The regular members of the Council shall be appointed by the President for a term of four years
(3) Cases or matters heard by a division shall be decided or resolved with the concurrence of a with the consent of the Commission on Appointments. Of the Members first appointed, the representative of
majority of the Members who actually took part in the deliberations on the issues in the case and voted the Integrated Bar shall serve for four years, the professor of law for three years, the retired Justice for two
thereon, and in no case without the concurrence of at least three of such Members. When the required number years, and the representative of the private sector for one year.
is not obtained, the case shall be decided en banc: Provided, that no doctrine or principle of law laid down by (3) The Clerk of the Supreme Court shall be the Secretary ex officio of the Council and shall keep a
the court in a decision rendered en banc or in division may be modified or reversed except by the court record of its proceedings.
sitting en banc. (4) The regular Members of the Council shall receive such emoluments as may be determined by the
Supreme Court. The Supreme Court shall provide in its annual budget the appropriations for the Council.
Section 5. The Supreme Court shall have the following powers: (5) The Council shall have the principal function of recommending appointees to the Judiciary. It
(1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers and may exercise such other functions and duties as the Supreme Court may assign to it.
consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Section 9. The Members of the Supreme Court and judges of the lower courts shall be appointed by
Court may provide, final judgments and orders of lower courts in: the President from a list of at least three nominees prepared by the Judicial and Bar Council for every vacancy.
(a) All cases in which the constitutionality or validity of any treaty, international or Such appointments need no confirmation.
executive agreement, law, presidential decree, proclamation, order, instruction, For the lower courts, the President shall issue the appointments within ninety days from the
ordinance, or regulation is in question. submission of the list.
(b) All cases involving the legality of any tax, impost, assessment, or toll, or any penalty
imposed in relation thereto. Section 10. The salary of the Chief Justice and of the Associate Justices of the Supreme Court, and
(c) All cases in which the jurisdiction of any lower court is in issue. of judges of lower courts, shall be fixed by law. During their continuance in office, their salary shall not be
(d) All criminal cases in which the penalty imposed is reclusion perpetua or higher. decreased.
(e) All cases in which only an error or question of law is involved.
(3) Assign temporarily judges of lower courts to other stations as public interest may require. Such Section 11. The Members of the Supreme Court and judges of lower courts shall hold office during
temporary assignment shall not exceed six months without the consent of the judge concerned. good behavior until they reach the age of seventy years or become incapacitated to discharge the duties of their
office. The Supreme Court en banc shall have the power to discipline judges of lower courts, or order their CARMELO F. LAZATIN, MARINO A. MORALES, TEODORO L. DAVID and ANGELITO A.
dismissal by a vote of a majority of the Members who actually took part in the deliberations on the issues in PELAYO, Petitioner, vs. HON. ANIANO A. DESIERTO as OMBUDSMAN, and SANDIGANBAYAN,
the case and voted thereon. THIRD DIVISION, Respondents.
DECISION
Section 12. The Members of the Supreme Court and of other courts established by law shall not be PERALTA, J.:
designated to any agency performing quasi-judicial or administrative functions.
This resolves the petition for certiorari under Rule 65 of the Rules of Court, praying that the Ombudsman's
Section 13. The conclusions of the Supreme Court in any case submitted to it for decision en disapproval of the Office of the Special Prosecutor's (OSP) Resolution dated September 18, 2000,
recommending dismissal of the criminal cases filed against herein petitioners, be reversed and set aside.
banc or in division shall be reached in consultation before the case is assigned to a Member for the writing of
the opinion of the Court. A certification to this effect signed by the Chief Justice shall be issued and a copy The antecedent facts are as follows.
thereof attached to the record of the case and served upon the parties. Any Member who took no part, or
dissented, or abstained from a decision or resolution, must state the reason therefor. The same requirements On July 22, 1998, the Fact-Finding and Intelligence Bureau of the Office of the Ombudsman filed a
Complaint-Affidavit docketed as OMB-0-98-1500, charging herein petitioners with Illegal Use of Public
shall be observed by all lower collegiate courts.
Funds as defined and penalized under Article 220 of the Revised Penal Code and violation of Section 3,
paragraphs (a) and (e) of Republic Act (R.A.) No. 3019, as amended.
Section 14. No decision shall be rendered by any court without expressing therein clearly and
distinctly the facts and the law on which it is based. The complaint alleged that there were irregularities in the use by then Congressman Carmello F. Lazatin of his
No petition for review or motion for reconsideration of a decision of the court shall be refused due Countrywide Development Fund (CDF) for the calendar year 1996, i.e., he was both proponent and
course or denied without stating the legal basis therefor. implementer of the projects funded from his CDF; he signed vouchers and supporting papers pertinent to the
disbursement as Disbursing Officer; and he received, as claimant, eighteen (18) checks amounting to
₱4,868,277.08. Thus, petitioner Lazatin, with the help of petitioners Marino A. Morales, Angelito A. Pelayo
Section 15. (1) All cases or matters filed after the effectivity of this Constitution must be decided or and Teodoro L. David, was allegedly able to convert his CDF into cash.
resolved within twenty-four months from date of submission for the Supreme Court, and, unless reduced by
the Supreme Court, twelve months for all lower collegiate courts, and three months for all other lower courts. A preliminary investigation was conducted and, thereafter, the Evaluation and Preliminary Investigation
(2) A case or matter shall be deemed submitted for decision or resolution upon the filing of the last Bureau (EPIB) issued a Resolution dated May 29, 2000 recommending the filing against herein petitioners of
fourteen (14) counts each of Malversation of Public Funds and violation of Section 3 (e) of R.A. No. 3019.
pleading, brief, or memorandum required by the Rules of Court or by the court itself.
Said Resolution was approved by the Ombudsman; hence, twenty-eight (28) Informations docketed as
(3) Upon the expiration of the corresponding period, a certification to this effect signed by the Chief Criminal Case Nos. 26087 to 26114 were filed against herein petitioners before the Sandiganbayan.
Justice or the presiding judge shall forthwith be issued and a copy thereof attached to the record of the case or
matter, and served upon the parties. The certification shall state why a decision or resolution has not been Petitioner Lazatin and his co-petitioners then filed their respective Motions for
rendered or issued within said period. Reconsideration/Reinvestigation, which motions were granted by the Sandiganbayan (Third Division). The
(4) Despite the expiration of the applicable mandatory period, the court, without prejudice to such Sandiganbayan also ordered the prosecution to re-evaluate the cases against petitioners.
responsibility as may have been incurred in consequence thereof, shall decide or resolve the case or matter Subsequently, the OSP submitted to the Ombudsman its Resolution dated September 18, 2000. It
submitted thereto for determination, without further delay. recommended the dismissal of the cases against petitioners for lack or insufficiency of evidence.

Section 16. The Supreme Court shall, within thirty days from the opening of each regular session of The Ombudsman, however, ordered the Office of the Legal Affairs (OLA) to review the OSP Resolution. In a
Memorandum4 dated October 24, 2000, the OLA recommended that the OSP Resolution be disapproved and
the Congress, submit to the President and the Congress an annual report on the operations and activities of the
the OSP be directed to proceed with the trial of the cases against petitioners. On October 27, 2000, the
Judiciary. Ombudsman adopted the OLA Memorandum, thereby disapproving the OSP Resolution dated September 18,
2000 and ordering the aggressive prosecution of the subject cases. The cases were then returned to the
Sandiganbayan for continuation of criminal proceedings.

Thus, petitioners filed the instant petition.

Petitioners allege that:

I.
Power of judicial review THE OMBUDSMAN ACTED WITH GRAVE ABUSE OF DISCRETION OR ACTED WITHOUT OR IN
EXCESS OF HIS JURISDICTION.
Doctrine of stare decisis II.
THE QUESTIONED RESOLUTION WAS BASED ON MISAPPREHENSION OF FACTS,
G.R. No. 147097               June 5, 2009 SPECULATIONS, SURMISES AND CONJECTURES
Amplifying their arguments, petitioners asseverate that the Ombudsman had no authority to overturn the OSP's
Resolution dismissing the cases against petitioners because, under Section 13, Article XI of the 1987
Constitution, the Ombudsman is clothed only with the power to watch, investigate and recommend the filing And precisely, Section 12(6) says that among the functions that can be performed by the
of proper cases against erring officials, but it was not granted the power to prosecute. They point out that under Ombudsman are "such functions or duties as may be provided by law." The sponsors admitted that
the Constitution, the power to prosecute belongs to the OSP (formerly the Tanodbayan), which was intended the legislature later on might remove some powers from the Tanodbayan and transfer these to the
by the framers to be a separate and distinct entity from the Office of the Ombudsman. Petitioners conclude Ombudsman.
that, as provided by the Constitution, the OSP being a separate and distinct entity, the Ombudsman should MR. COLAYCO:
have no power and authority over the OSP. Thus, petitioners maintain that R.A. No. 6770 (The Ombudsman Madam President, that is correct.
Act of 1989), which made the OSP an organic component of the Office of the Ombudsman, should be struck xxxx
down for being unconstitutional. MR. RODRIGO:
Madam President, what I am worried about is, if we create a constitutional body which has neither
Next, petitioners insist that they should be absolved from any liability because the checks were issued to punitive nor prosecutory powers but only persuasive powers, we might be raising the hopes of our
petitioner Lazatin allegedly as reimbursement for the advances he made from his personal funds for expenses people too much and then disappoint them.
incurred to ensure the immediate implementation of projects that are badly needed by the Pinatubo victims. MR. MONSOD:
I agree with the Commissioner.
The Court finds the petition unmeritorious. MR. RODRIGO:
Anyway, since we state that the powers of the Ombudsman can later on be implemented by the
Petitioners' attack against the constitutionality of R.A. No. 6770 is stale. It has long been settled that the
legislature, why not leave this to the legislature?
provisions of R.A. No. 6770 granting the Office of the Ombudsman prosecutorial powers and placing the OSP
xxxx
under said office have no constitutional infirmity. The issue of whether said provisions of R.A. No. 6770
MR. MONSOD: (reacting to statements of Commissioner Blas Ople):
violated the Constitution had been fully dissected as far back as 1995 in Acop v. Office of the Ombudsman.6
With respect to the argument that he is a toothless animal, we would like to say that we are
Therein, the Court held that giving prosecutorial powers to the Ombudsman is in accordance with the promoting the concept in its form at the present, but we are also saying that he can exercise such powers and
Constitution as paragraph 8, Section 13, Article XI provides that the Ombudsman shall "exercise such other functions as may be provided by law in accordance with the direction of the thinking of Commissioner
functions or duties as may be provided by law." Elucidating on this matter, the Court stated: Rodrigo. We do not think that at this time we should prescribe this, but we leave it up to Congress at some
future time if it feels that it may need to designate what powers the Ombudsman need in order that he be more
x x x While the intention to withhold prosecutorial powers from the Ombudsman was indeed present, the effective.1awphi1 This is not foreclosed.
Commission [referring to the Constitutional Commission of 1986] did not hesitate to recommend that the
Legislature could, through statute, prescribe such other powers, functions, and duties to the Ombudsman. x x x So, this is a reversible disability, unlike that of a eunuch; it is not an irreversible disability.7
As finally approved by the Commission after several amendments, this is now embodied in paragraph 8,
The constitutionality of Section 3 of R.A. No. 6770, which subsumed the OSP under the Office of the
Section 13, Article XI (Accountability of Public Officers) of the Constitution, which provides:
Ombudsman, was likewise upheld by the Court in Acop. It was explained, thus:
Sec.13. The Office of the Ombudsman shall have the following powers, functions, and duties:
x x x the petitioners conclude that the inclusion of the Office of the Special Prosecutor as among the offices
Promulgate its rules and procedure and exercise such other functions or duties as may be provided by law. under the Office of the Ombudsman in Section 3 of R.A. No. 6770 ("An Act Providing for the Functional and
Structural Organization of the Office of the Ombudsman and for Other Purposes") is unconstitutional and void.
Expounding on this power of Congress to prescribe other powers, functions, and duties to the Ombudsman, we
quote Commissioners Colayco and Monsod during interpellation by Commissioner Rodrigo: The contention is not impressed with merit. x x x

MR. RODRIGO: x x Section 7 of Article XI expressly provides that the then existing Tanodbayan, to be henceforth known as
the Office of the Special Prosecutor, "shall continue to function and exercise its powers as now or hereafter
Precisely, I am coming to that. The last of the enumerated functions of the Ombudsman is: "to may be provided by law, except those conferred on the Office of the Ombudsman created under this
exercise such powers or perform such functions or duties as may be provided by law." So, the Constitution." The underscored phrase evidently refers to the Tanodbayan's powers under P.D. No. 1630 or
legislature may vest him with powers taken away from the Tanodbayan, may it not? subsequent amendatory legislation. It follows then that Congress may remove any of the Tanodbayan's/Special
MR. COLAYCO: Prosecutor's powers under P.D. No. 1630 or grant it other powers, except those powers conferred by the
Yes. Constitution on the Office of the Ombudsman.
MR. MONSOD:
Yes. Pursuing the present line of reasoning, when one considers that by express mandate of paragraph 8, Section 13,
xxxx Article XI of the Constitution, the Ombudsman may "exercise such other powers or perform functions or
MR. RODRIGO: duties as may be provided by law," it is indubitable then that Congress has the power to place the Office of the
Madam President. Section 5 reads: "The Tanodbayan shall continue to function and exercise its Special Prosecutor under the Office of the Ombudsman. In the same vein, Congress may remove some of the
powers as provided by law." powers granted to the Tanodbayan by P.D. No. 1630 and transfer them to the Ombudsman; or grant the Office
MR. COLAYCO: of the Special Prosecutor such other powers and functions and duties as Congress may deem fit and wise. This
That is correct, because it is under P.D. No. 1630. Congress did through the passage of R.A. No. 6770.
MR. RODRIGO:
The foregoing ruling of the Court has been reiterated in Camanag v. Guerrero More recently, in Office of the
So, if it is provided by law, it can be taken away by law, I suppose.
Ombudsman v. Valera, the Court, basing its ratio decidendi on its ruling in Acop and Camanag, declared that
MR. COLAYCO:
the OSP is "merely a component of the Office of the Ombudsman and may only act under the supervision and
That is correct.
control, and upon authority of the Ombudsman" and ruled that under R.A. No. 6770, the power to preventively
MR. RODRIGO:
suspend is lodged only with the Ombudsman and Deputy Ombudsman. The Court's ruling in Acop that the stressed that certiorari is a remedy meant to correct only errors of jurisdiction, not errors of judgment. This has
authority of the Ombudsman to prosecute based on R.A. No. 6770 was authorized by the Constitution was also been emphasized in First Corporation v. Former Sixth Division of the Court of Appeals, to wit:
made the foundation for the decision in Perez v. Sandiganbayan, where it was held that the power to prosecute
carries with it the power to authorize the filing of informations, which power had not been delegated to the It is a fundamental aphorism in law that a review of facts and evidence is not the province of the extraordinary
OSP. It is, therefore, beyond cavil that under the Constitution, Congress was not proscribed from legislating remedy of certiorari, which is extra ordinem - beyond the ambit of appeal. In certiorari proceedings, judicial
the grant of additional powers to the Ombudsman or placing the OSP under the Office of the Ombudsman. review does not go as far as to examine and assess the evidence of the parties and to weigh the probative
value thereof. It does not include an inquiry as to the correctness of the evaluation of evidence. Any
Petitioners now assert that the Court's ruling on the constitutionality of the provisions of R.A. No. 6770 should error committed in the evaluation of evidence is merely an error of judgment that cannot be remedied
be revisited and the principle of stare decisis set aside. Again, this contention deserves scant consideration. by certiorari. An error of judgment is one which the court may commit in the exercise of its jurisdiction. An
error of jurisdiction is one where the act complained of was issued by the court without or in excess of
The doctrine of stare decisis et non quieta movere (to adhere to precedents and not to unsettle things which are jurisdiction, or with grave abuse of discretion, which is tantamount to lack or in excess of jurisdiction and
established) is embodied in Article 8 of the Civil Code of the Philippines which provides, thus: which error is correctible only by the extraordinary writ of certiorari. Certiorari will not be issued to cure
errors of the trial court in its appreciation of the evidence of the parties, or its conclusions anchored on
ART. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal the said findings and its conclusions of law. It is not for this Court to re-examine conflicting evidence, re-
system of the Philippines. evaluate the credibility of the witnesses or substitute the findings of fact of the court a quo.
It was further explained in Fermin v. People as follows: Evidently, the issue of whether the evidence indeed supports a finding of probable cause would necessitate an
examination and re-evaluation of the evidence upon which the Ombudsman based its disapproval of the OSP
The doctrine of stare decisis enjoins adherence to judicial precedents. It requires courts in a country to
Resolution. Hence, the Petition for Certiorari should not be given due course.
follow the rule established in a decision of the Supreme Court thereof. That decision becomes a judicial
precedent to be followed in subsequent cases by all courts in the land. The doctrine of stare decisis is based on Likewise noteworthy is the holding of the Court in Presidential Ad Hoc Fact-Finding Committee on Behest
the principle that once a question of law has been examined and decided, it should be deemed settled and Loans v. Desierto, imparting the value of the Ombudsman's independence, stating thus:
closed to further argument.
Under Sections 12 and 13, Article XI of the 1987 Constitution and RA 6770 (The Ombudsman Act of 1989),
In Chinese Young Men's Christian Association of the Philippine Islands v. Remington Steel Corporation, the the Ombudsman has the power to investigate and prosecute any act or omission of a public officer or employee
Court expounded on the importance of the foregoing doctrine, stating that: when such act or omission appears to be illegal, unjust, improper or inefficient. It has been the consistent
ruling of the Court not to interfere with the Ombudsman's exercise of his investigatory and prosecutory
The doctrine of stare decisis is one of policy grounded on the necessity for securing certainty and stability of
powers as long as his rulings are supported by substantial evidence. Envisioned as the champion of the
judicial decisions, thus:
people and preserver of the integrity of public service, he has wide latitude in exercising his powers and is
Time and again, the court has held that it is a very desirable and necessary judicial practice that when a free from intervention from the three branches of government. This is to ensure that his Office is
court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle insulated from any outside pressure and improper influence.
and apply it to all future cases in which the facts are substantially the same. Stare decisis et non quieta movere.
Indeed, for the Court to overturn the Ombudsman's finding of probable cause, it is imperative for petitioners to
Stand by the decisions and disturb not what is settled. Stare decisis simply means that for the sake of
clearly prove that said public official acted with grave abuse of discretion. In Presidential Commission on
certainty, a conclusion reached in one case should be applied to those that follow if the facts are
Good Government v. Desierto, the Court elaborated on what constitutes such abuse, to wit:
substantially the same, even though the parties may be different. It proceeds from the first principle of justice
that, absent any powerful countervailing considerations, like cases ought to be decided alike. Thus, where Grave abuse of discretion implies a capricious and whimsical exercise of judgment tantamount to lack of
the same questions relating to the same event have been put forward by the parties similarly situated as in a jurisdiction. The Ombudsman's exercise of power must have been done in an arbitrary or despotic manner
previous case litigated and decided by a competent court, the rule of stare decisis is a bar to any attempt to which must be so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform
relitigate the same issue the duty enjoined or to act at all in contemplation of law. x x x23
The doctrine has assumed such value in our judicial system that the Court has ruled that "[a]bandonment In this case, petitioners failed to demonstrate that the Ombudsman acted in a manner described above. Clearly,
thereof must be based only on strong and compelling reasons, otherwise, the becoming virtue of the Ombudsman was acting in accordance with R.A. No. 6770 and properly exercised its power of control and
predictability which is expected from this Court would be immeasurably affected and the public's confidence supervision over the OSP when it disapproved the Resolution dated September 18, 2000.
in the stability of the solemn pronouncements diminished." Verily, only upon showing that circumstances
attendant in a particular case override the great benefits derived by our judicial system from the doctrine It should also be noted that the petition does not question any order or action of the Sandiganbayan Third
of stare decisis, can the courts be justified in setting aside the same. Division; hence, it should not have been included as a respondent in this petition.
In this case, petitioners have not shown any strong, compelling reason to convince the Court that the doctrine IN VIEW OF THE FOREGOING, the petition is DISMISSED for lack of merit. No costs.
of stare decisis should not be applied to this case. They have not successfully demonstrated how or why it
would be grave abuse of discretion for the Ombudsman, who has been validly conferred by law with the power SO ORDERED.
of control and supervision over the OSP, to disapprove or overturn any resolution issued by the latter.

The second issue advanced by petitioners is that the Ombudsman's disapproval of the OSP Resolution
recommending dismissal of the cases is based on misapprehension of facts, speculations, surmises and
conjectures. The question is really whether the Ombudsman correctly ruled that there was enough evidence to
support a finding of probable cause. That issue, however, pertains to a mere error of judgment. It must be
 On March 6, 2002, petitioner Cruz filed a Manifestation and Motion to Inhibit, 4 praying for the
voluntary inhibition of Judge Mijares. The Motion alleged that expected partiality on the part of the respondent
judge in the conduct of the trial could be inferred from the contumacious remarks of Judge Mijares during the
pre-trial. It asserts that the judge, in uttering an uncalled for remark, reflects a negative frame of mind, which
engenders the belief that justice will not be served.5

In an Order6 dated April 19, 2002, Judge Mijares denied the motion for inhibition stating that
throwing tenuous allegations of partiality based on the said remark is not enough to warrant her voluntary
inhibition, considering that it was said even prior to the start of pre-trial. Petitioner filed a motion for
reconsideration7 of the said order.

On May 10, 2002, Judge Mijares denied the motion with finality.8 In the same Order, the trial court
held that for the failure of petitioner Cruz to submit the promised document and jurisprudence, and for his
failure to satisfy the requirements or conditions under Rule 138-A of the Rules of Court, his appearance was
denied.

In a motion for reconsideration,9 petitioner reiterated that the basis of his appearance was not Rule
138-A, but Section 34 of Rule 138. He contended that the two Rules were distinct and are applicable to
Hierarchy of courts different circumstances, but the respondent judge denied the same, still invoking Rule 138-A, in an
Order10 dated July 31, 2002.
[G.R. NO. 154464, September 11, 2008]
On August 16, 2002, the petitioner directly filed with this Court, the instant petition and assigns the
following errors:
FERDINAND A. CRUZ, 332 EDANG ST., PASAY CITY, Petitioner, v. JUDGE PRISCILLA
MIJARES, PRESIDING JUDGE, REGIONAL TRIAL COURT, BRANCH 108, PASAY CITY, I.
METRO MANILA, PUBLIC, Respondents.
THE RESPONDENT REGIONAL TRIAL COURT GRAVELY ERRED AND ABUSED ITS DISCRETION
BENJAMIN MINA, JR., 332 EDANG ST., PASAY CITY, Private Respondents.. WHEN IT DENIED THE APPEARANCE OF THE PETITIONER, FOR AND IN THE LATTER'S BEHALF,
IN CIVIL CASE NO. 01-0401 [sic] CONTRARY TO RULE 138, SECTION 34 OF THE RULES OF
DECISION COURT, PROVIDING FOR THE APPEARANCE OF NON-LAWYERS AS A PARTY LITIGANT;

II.
NACHURA, J.:
THE RESPONDENT COURT GRAVELY ERRED AND ABUSED ITS DISCRETION WHEN IT DID NOT
This is a Petition for Certiorari, Prohibition and Mandamus, with prayer for the issuance of a writ of VOLUNTARILY INHIBIT DESPITE THE ADVENT OF JURISPRUDENCE [sic] THAT SUCH AN
preliminary injunction under Rule 65 of the Rules of Court. It was directly filed with this Court assailing the INHIBITION IS PROPER TO PRESERVE THE PEOPLE'S FAITH AND CONFIDENCE TO THE
Resolutions dated May 10, 20021 and July 31, 20022 of the Regional Trial Court (RTC), Branch 108, Pasay COURTS.
City, which denied the appearance of the plaintiff Ferdinand A. Cruz, herein petitioner, as party litigant, and
The core issues raised before the Court are: (1) whether the extraordinary writs of certiorari,
the refusal of the public respondent, Judge Priscilla Mijares, to voluntarily inhibit herself from trying the case.
prohibition and mandamus under Rule 65 of the 1997 Rules of Court may issue; and (2) whether the
No writ of preliminary injunction was issued by this Court.
respondent court acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it
denied the appearance of the petitioner as party litigant and when the judge refused to inhibit herself from
The antecedents:
trying the case.
`
This Court's jurisdiction to issue writs of certiorari, prohibition, mandamus and injunction is not
On March 5, 2002, Ferdinand A. Cruz (petitioner) sought permission to enter his appearance for and
exclusive; it has concurrent jurisdiction with the RTCs and the Court of Appeals. This concurrence of
on his behalf, before the RTC, Branch 108, Pasay City, as the plaintiff in Civil Case No. 01-0410, for
jurisdiction is not, however, to be taken as an absolute, unrestrained freedom to choose the court where the
Abatement of Nuisance. Petitioner, a fourth year law student, anchors his claim on Section 34 of Rule 138 of
application therefor will be directed.11 A becoming regard of the judicial hierarchy most certainly indicates that
the Rules of Court3 that a non-lawyer may appear before any court and conduct his litigation personally.
petitions for the issuance of extraordinary writs against the RTCs should be filed with the Court of
Appeals.12 The hierarchy of courts is determinative of the appropriate forum for petitions for the extraordinary
During the pre-trial, Judge Priscilla Mijares required the petitioner to secure a written permission
writs; and only in exceptional cases and for compelling reasons, or if warranted by the nature of the issues
from the Court Administrator before he could be allowed to appear as counsel for himself, a party-litigant.
reviewed, may this Court take cognizance of petitions filed directly before it.13
Atty. Stanley Cabrera, counsel for Benjamin Mina, Jr., filed a Motion to Dismiss instead of a pre-trial brief to
Considering, however, that this case involves the interpretation of Section 34, Rule 138 and Rule
which petitioner Cruz vehemently objected alleging that a Motion to Dismiss is not allowed after the Answer
138-A of the Rules of Court, the Court takes cognizance of herein petition. Nonetheless, the petitioner is
had been filed. Judge Mijares then remarked, "Hay naku, masama `yung marunong pa sa Huwes. Ok?" and
cautioned not to continue his practice of filing directly before this Court petitions under Rule 65 when the
proceeded to hear the pending Motion to Dismiss and calendared the next hearing on May 2, 2002.
issue raised can be resolved with dispatch by the Court of Appeals. We will not tolerate litigants who make a
mockery of the judicial hierarchy as it necessarily delays more important concerns before us.
 It may be relevant to recall that, in respect to the constitutional right of an accused to be heard by
In resolving the second issue, a comparative reading of Rule 138, Section 34 and Rule 138-A is necessary. himself and counsel,16 this Court has held that during the trial, the right to counsel cannot be waived.17 The
rationale for this ruling was articulated in People v. Holgado,18 where we declared that "even the most
Rule 138-A, or the Law Student Practice Rule, provides: intelligent or educated man may have no skill in the science of law, particularly in the rules of procedure, and
RULE 138-A without counsel, he may be convicted not because he is guilty but because he does not know how to establish
his innocence."
LAW STUDENT PRACTICE RULE
The case at bar involves a civil case, with the petitioner as plaintiff therein. The solicitous concern
Section 1. Conditions for Student Practice. - A law student who has successfully completed his 3rd that the Constitution accords the accused in a criminal prosecution obviously does not obtain in a civil case.
year of the regular four-year prescribed law curriculum and is enrolled in a recognized law school's clinical Thus, a party litigant in a civil case, who insists that he can, without a lawyer's assistance, effectively
legal education program approved by the Supreme Court, may appear without compensation in any civil, undertake the successful pursuit of his claim, may be given the chance to do so. In this case, petitioner alleges
criminal or administrative case before any trial court, tribunal, board or officer, to represent indigent clients that he is a law student and impliedly asserts that he has the competence to litigate the case himself. Evidently,
accepted by the legal clinic of the law school. he is aware of the perils incident to this decision.

Sec. 2. Appearance. - The appearance of the law student authorized by this rule, shall be under the
In addition, it was subsequently clarified in Bar Matter 730, that by virtue of Section 34, Rule 138, a
direct supervision and control of a member of the Integrated Bar of the Philippines duly accredited by
law student may appear as an agent or a friend of a party litigant, without need of the supervision of a lawyer,
the law school. Any and all pleadings, motions, briefs, memoranda or other papers to be filed, must be signed
before inferior courts. Here, we have a law student who, as party litigant, wishes to represent himself in court.
by the supervising attorney for and in behalf of the legal clinic.
We should grant his wish.
The respondent court held that the petitioner could not appear for himself and on his behalf because of his
failure to comply with Rule 138-A. In denying petitioner's appearance, the court a quo tersely finds refuge in
the fact that, on December 18, 1986, this Court issued Circular No. 19, which eventually became Rule 138-A, Additionally, however, petitioner contends that the respondent judge committed manifest bias and
and the failure of Cruz to prove on record that he is enrolled in a recognized school's clinical legal education partiality by ruling that there is no valid ground for her voluntary inhibition despite her alleged negative
program and is under supervision of an attorney duly accredited by the law school. demeanor during the pre-trial when she said: "Hay naku, masama `yung marunong pa sa Huwes. Ok?"
Petitioner avers that by denying his motion, the respondent judge already manifested conduct indicative of
However, the petitioner insisted that the basis of his appearance was Section 34 of Rule 138, which provides: arbitrariness and prejudice, causing petitioner's and his co-plaintiff's loss of faith and confidence in the
respondent's impartiality.
Sec. 34. By whom litigation is conducted. - In the court of a justice of the peace, a party may
conduct his litigation in person, with the aid of an agent or friend appointed by him for that purpose, or with We do not agree.
the aid of an attorney. In any other court, a party may conduct his litigation personally or by aid of an
attorney, and his appearance must be either personal or by a duly authorized member of the bar. It must be noted that because of this incident, the petitioner filed an administrative case 19 against the
and is a rule distinct from Rule 138-A. respondent for violation of the Canons of Judicial Ethics, which we dismissed for lack of merit on September
15, 2002. We now adopt the Court's findings of fact in the administrative case and rule that there was no grave
From the clear language of this provision of the Rules, it will have to be conceded that the abuse of discretion on the part of Judge Mijares when she did not inhibit herself from the trial of the case.
contention of the petitioner has merit. It recognizes the right of an individual to represent himself in any case
to which he is a party. The Rules state that a party may conduct his litigation personally or with the aid of an In a Motion for Inhibition, the movant must prove the ground for bias and prejudice by clear and
attorney, and that his appearance must either be personal or by a duly authorized member of the Bar. The convincing evidence to disqualify a judge from participating in a particular trial, 20 as voluntary inhibition is
individual litigant may personally do everything in the course of proceedings from commencement to the primarily a matter of conscience and addressed to the sound discretion of the judge. The decision on whether
termination of the litigation.14 Considering that a party personally conducting his litigation is restricted to the she should inhibit herself must be based on her rational and logical assessment of the circumstances prevailing
same rules of evidence and procedure as those qualified to practice law, 15Petitioner, not being a lawyer in the case before her.21 Absent clear and convincing proof of grave abuse of discretion on the part of the
himself, runs the risk of falling into the snares and hazards of his own ignorance. Therefore, Cruz as plaintiff, judge, this Court will rule in favor of the presumption that official duty has been regularly performed.
at his own instance, can personally conduct the litigation of Civil Case No. 01-0410. He would then be acting
not as a counsel or lawyer, but as a party exercising his right to represent himself. WHEREFORE, the Petition is PARTIALLY GRANTED. The assailed Resolution and Order of
the Regional Trial Court, Branch 108, Pasay City are MODIFIED. Regional Trial Court, Branch 108, Pasay
The trial court must have been misled by the fact that the petitioner is a law student and must, City is DIRECTED to ADMIT the Entry of Appearance of petitioner in Civil Case No. 01-0410 as a party
therefore, be subject to the conditions of the Law Student Practice Rule. It erred in applying Rule 138-A, when litigant.
the basis of the petitioner's claim is Section 34 of Rule 138. The former rule provides for conditions when a
law student may appear in courts, while the latter rule allows the appearance of a non-lawyer as a party No pronouncement as to costs.
representing himself.

The conclusion of the trial court that Rule 138-A superseded Rule 138 by virtue of Circular No. 19 SO ORDERED.
is misplaced. The Court never intended to repeal Rule 138 when it released the guidelines for limited law
student practice. In fact, it was intended as an addendum to the instances when a non-lawyer may appear in
courts and was incorporated to the Rules of Court through Rule 138-A.
 WHEREFORE, in view of the foregoing, the PROTEST filed by FUCC which is under consideration is
hereby DISMISSED for lack of merit.

The FILING FEE paid by FUCC, the protestant, via Metro Bank Cashier’s Check No. 0600018513, dated
March 19, 2007, in the amount of Four Million Seven Hundred Twenty-One Thousand Pesos
(₱4,721,000.00), Philippine Currency, which is equivalent to one [percent] (%) of the ABC being NON-
REFUNDABLE (Sec. 55.1, IRR-A, RA 1984), the same is hereby ordered FORFEITED in favor of PPMC.
SO ORDERED.

SBAC then scheduled a re-bidding and issued new invitations to bid for the project. To enjoin the re-bidding
set on May 8, 2007, FUCC filed a petition for injunction with prayer for the issuance of a preliminary
G.R. No. 178799               January 19, 2009 injunction or temporary restraining order (TRO) with the Regional Trial Court (RTC) of La Union, docketed
FIRST UNITED CONSTRUCTORS CORPORATION, Petitioner, vs. as Civil Case No. 7274.
PORO POINT MANAGEMENT CORPORATION (PPMC), THE SPECIAL BIDS & AWARDS
On May 2, 2007, the RTC issued a TRO which, however, was lifted on May 4, 2007 because under Section 3
COMMITTEE (SBAC) of PPMC, ATTY. FELIX S. RACADIO, and SATRAP CONSTRUCTION
of Republic Act No. 8975, no court, except the Supreme Court, shall issue a TRO or injunction or prohibit the
COMPANY, INC., Respondents.
bidding or award of a government infrastructure project. SBAC thus proceeded with the re-bidding of the
DECISION
project on May 8, 2007 and awarded the project to SCCI as the lowest qualified bidder. The Contract for the
NACHURA, J.: project was signed, and a notice to proceed was served on SCCI on May 29, 2007.

First United Constructors Corporation (FUCC) filed this special civil action for certiorari and prohibition with FUCC filed an amended petition with the RTC to enjoin the implementation of the project. The Office of the
prayer for the issuance of a temporary restraining order, seeking to annul (i) the re-bidding of the contract for Government Corporate Counsel (OGCC) moved to dismiss the petition for lack of jurisdiction.
the Upgrading of the San Fernando Airport Project, Phase I, held on May 8, 2007; (ii) the Notice of Award
Pending resolution of OGCC’s motion to dismiss, FUCC moved for the dismissal of its amended petition,
dated May 23, 2007 to Satrap Construction Company, Inc. (SCCI); and (iii) Notice to Proceed dated May 29,
which was granted by the RTC on July 4, 2007, to wit:
2007 also to SCCI. FUCC also seeks to permanently enjoin the Special Bids and Awards Committee (SBAC)
and Poro Point Management Corporation (PPMC) from implementing the Contract3 in favor of SCCI. Acting on the above-stated notice of dismissal, this Court hereby confirms the dismissal of the amended
petition, in effect the dismissal of the whole action, without prejudice, pursuant to Sec. 1, Rule 17 of the Rules
The factual antecedents are as follows:
of Court.
On January 26, 2007, PPMC approved the Contract for the Upgrading of the San Fernando Airport Phase I.
WHEREFORE, this case is hereby DISMISSED.
The SBAC then issued invitations to reputable contractors to pre-qualify for the project.
SO ORDERED.
FUCC and two (2) other contractors - C.M. Pancho Construction, Inc. (C.M. Pancho) and EEI-New Kanlaon
Construction, Inc. Joint Venture (EEI-New Kanlaon JV) responded to the invitation and were pre-qualified to Claiming that there is no appeal, or any speedy and adequate remedy in the ordinary course of law, FUCC
bid for the project. However, upon evaluation, none of the pre-qualified bidders was chosen. C.M. Pancho was comes to us via this petition. It also asks for the issuance of a TRO to enjoin the implementation of the project,
disqualified because it did not possess the required minimum years of experience in airport projects, while EEI asserting that SCCI is not qualified to undertake the project and the award clearly poses a real threat to the
New Kanlaon JV was disqualified because it did not submit a special license to bid as joint venture. FUCC’s public welfare and safety. In its November 12, 2007 Resolution, this Court denied FUCC’s application for the
technical proposal, on the other hand, obtained a failing mark because it failed to submit the automated issuance of a TRO for lack of merit.
weather observation system (AWOS) and its authorized representative did not sign some pages of the narrative
construction method and the tax returns. FUCC sought reconsideration of the SBAC decision, but it was FUCC filed this petition praying for the following relief, viz.:
denied.
(a) That upon receipt of this Petition, a Temporary Restraining Order (TRO) be issued enjoining the
FUCC then filed a protest5 with the PPMC. On March 26, 2007, Atty. Felix S. Racadio, PPMC Head, resolved implementation of the contract for the Upgrading of the San Fernando Airport Project, Phase I with
FUCC’s protest, viz.: respondent [SCCI] as the contractor;
In sum, based on the issues raised and [the] arguments presented by FUCC, this OFFICE finds NO (b) That after proper proceeding, judgment be rendered: (1) permanently enjoining the
REVERSIBLE ERROR committed by SBAC, both on its findings of 06 March 2007 (giving FUCC the implementation of the contract for the Upgrading of the San Fernando Airport Project, Phase I with
FAILED rating) and 12 March 2007 (denial of FUCC’s Motion for Reconsideration). respondent [SCCI] as the contractor; (2) declaring the re-bidding of the contract for the Upgrading
of the San Fernando Airport Project, Phase I on 08 May 2007 illegal and nullifying the results
In addition to the "NO REVERSIBLE ERROR FINDING," there exists a PRESUMPTION OF thereof; (3) annulling the Notice of Award dated 23 May 2007, the Contract for the Upgrading of
REGULARITY OF OFFICIAL ACTION OF A PUBLIC OFFICER. In the case at bar, such presumption the San Fernando Airport, Phase I entered into, by and between respondent PPMC and respondent
applies. The burden of proof lies with the FUCC. On this score, FUCC failed to even just scratch the surface of [SCCI] on 29 May 2007, and the Notice to Proceed dated 29 May 2007; and (4) directing
the same. respondent SBAC and/or respondent PPMC and/or respondent Atty. Recadio to reconsider the
"Failed" rating of the bid of FUCC, open the Financial Proposal Envelope submitted by FUCC
The proceedings and findings of SBAC, in the Pre-Qualification stage not having been put into issue by the
during the original bidding, declare FUCC as the winning bidder, and forthwith award the contract
PROTEST, then, FUCC had opted to leave them as they were, thus, let them remain UNDISTURBED.
to FUCC, as the winning bidder and being the only qualified contractor for the project.12
It asserts that SBAC and PPMC committed grave abuse of discretion in disqualifying its bid, in denying its preliminary injunction, or preliminary mandatory injunction against the government, or any of its subdivisions,
protest, in conducting a re-bidding and in awarding the project to SCCI. It insists that it is the only qualified officials or any person or entity to restrain, prohibit or compel the bidding or awarding of a contract or project
contractor for the project and prays that it be declared the winning bidder. of the national government. The proscription, however, covers only temporary restraining orders or writs but
not decisions on the merits granting permanent injunction. Therefore, while courts below are prohibited by RA
We dismiss the petition. No. 8795 from issuing TROs or preliminary restraining orders pending the adjudication of the case, said
statute, however, does not explicitly proscribe the issuance of a permanent injunction granted by a court of law
Republic Act (RA) No. 9184, or the Government Procurement Reform Act, outlines the procedure to assail arising from an adjudication of a case on the merits.17
decisions of the SBAC in this wise:
As we explained in Alvarez v. PICOP Resources, Inc.:18
SEC. 55. Protests on Decisions of the BAC. – Decisions of BAC in all stages of procurement may be protested
to the head of the procuring entity and shall be in writing. Decisions of the BAC may be protested by filing a x x x Republic Act No. 8975 merely proscribes the issuance of temporary restraining orders and writs of
verified position paper and paying a nonrefundable protest fee. The amount of protest fee and the periods preliminary injunction and preliminary mandatory injunction. [It] cannot, under pain of violating the
during which the protests may be filed and resolved shall be specified in the IRR. Constitution, deprive the courts of authority to take cognizance of the issues raised in the principal action, as
long as such action and the relief sought are within their jurisdiction.
SEC. 56. Resolution of Protests. - The protests shall be resolved strictly on the basis of records of the BAC. Up
to a certain amount specified in the IRR, the decisions of the Head of the Procuring Entity shall be final. Clearly, except for the prayer for the issuance of a TRO or preliminary injunction, the issues raised by FUCC
and the relief it sought are within the jurisdiction of the RTC. It is a procedural faux pas for FUCC to invoke
SEC. 57. Non-interruption of the Bidding Process. – In no case shall any protest taken from any decision the original jurisdiction of this Court over the issuance of a writ of certiorari and permanent injunction.
treated in this Article stay or delay the bidding process. Protests must first be resolved before any award is
made. In any event, the invitation to bid contains a reservation for PPMC to reject any bid. It has been held that
where the right to reject is so reserved, the lowest bid, or any bid for that matter, may be rejected on a mere
SEC. 58. Resort to Regular Courts; Certiorari. – Court action may be resorted only after the protest technicality.19 The discretion to accept or reject bid and award contracts is vested in the government agencies
contemplated in this Article shall have been completed. Cases that are filed in violation of the process entrusted with that function. This discretion is of such wide latitude that the Courts will not interfere therewith
specified in this Article shall be dismissed for lack of jurisdiction. The regional trial court shall have or direct the committee on bids to do a particular act or to enjoin such act within its prerogatives unless it is
jurisdiction over final decisions of the head of the procuring entity. Court actions shall be governed by Rule 65 apparent that it is used as a shield to a fraudulent award; 20 or an unfairness or injustice is shown; 21 or when in
of the 1997 Rules of Civil Procedure. the exercise of its authority, it gravely abuses or exceeds its jurisdiction. Thus, where PPMC as advertiser,
availing itself of that right, opts to reject any or all bids, the losing bidder has no cause to complain or right to
This provision is without prejudice to any law conferring on the Supreme Court the sole jurisdiction to issue
dispute that choice, unless fraudulent acts, injustice, unfairness or grave abuse of discretion is shown.
temporary restraining orders and injunctions relating to Infrastructure Projects of Government.
FUCC alleges that SBAC and PPMC, along with the SCCI and five (5) other bidders, colluded to rig the
FUCC challenged the decision of SBAC in a protest filed with Atty. Racadio of the PPMC who affirmed the
results of the re-bidding so that SCCI would emerge as the so-called lowest bidder. The record, however, is
SBAC decision. Instead of filing a petition for certiorari, as provided in Section 58, FUCC filed a petition for
bereft of any proof to substantiate the allegation. Neither is there any evidence offered to establish unfairness,
injunction with prayer for the issuance of a temporary restraining order and/or preliminary injunction with the
injustice, caprice or arbitrariness on the part of the SBAC or the PPMC in awarding the contract to SCCI, the
RTC. FUCC, however, later moved for its dismissal theorizing that the RTC had no jurisdiction over petitions
lowest bidder. The presumption of regularity of the bidding must thus be upheld.
for injunction. Thereafter, it filed this petition for certiorari with this Court.
As we explained in JG Summit Holdings, Inc. v. Court of Appeals:22
Section 4, Rule 65 of the 1997 Rules of Civil Procedure provides that a special civil action for certiorari shall
be filed not later than sixty (60) days from the notice of the judgment, order or resolution. 13 FUCC admitted The discretion to accept or reject a bid and award contracts is vested in the Government agencies entrusted
that it received the PPMC decision on March 27, 2007.14 However, it filed this petition assailing the said with that function. The discretion given to the authorities on this matter is of such wide latitude that the Courts
decision only on July 30, 2007. It is, therefore, too late in the day for FUCC, via this petition, to assail the will not interfere therewith, unless it is apparent that it is used as a shield to a fraudulent award (Jalandoni v.
PPMC decision which rated its bid as failed. NARRA, 108 Phil. 486 [1960]). x x x The exercise of this discretion is a policy decision that necessitates prior
inquiry, investigation, comparison, evaluation, and deliberation. This task can best be discharged by the
Besides, FUCC violated the doctrine of judicial hierarchy in filing this petition for certiorari directly with this
Government agencies concerned, not by the Courts. The role of the Courts is to ascertain whether a branch or
Court. Section 58 is clear that petitions for the issuance of a writ of certiorari against the decision of the head
instrumentality of the Government has transgressed its constitutional boundaries. But the Courts will not
of the procuring agency, like PPMC, should be filed with the Regional Trial Court. Indeed, the jurisdiction of
interfere with executive or legislative discretion exercised within those boundaries. Otherwise, it strays into the
the RTC over petitions for certiorari is concurrent with this Court. However, such concurrence does not allow
realm of policy decision-making.
unrestricted freedom of choice of the court forum. A direct invocation of the Supreme Court’s original
jurisdiction to issue this writ should be allowed only when there are special and important reasons, clearly and It is only upon a clear showing of grave abuse of discretion that the Courts will set aside the award of a
specifically set out in the petition.15 contract made by a government entity. Grave abuse of discretion implies a capricious, arbitrary and whimsical
exercise of power (Filinvest Credit Corp. v. Intermediate Appellate Court, No. 65935, 30 September 1988, 166
In the present case, FUCC adduced no special and important reason why direct recourse to this Court should
SCRA 155). The abuse of discretion must be so patent and gross as to amount to an evasion of positive duty or
be allowed. Thus, we reaffirm the judicial policy that this Court will not entertain a direct invocation of its
to a virtual refusal to perform a duty enjoined by law, as to act at all in contemplation of law, where the power
jurisdiction unless the redress desired cannot be obtained in the appropriate lower courts, and exceptional and
is exercised in an arbitrary and despotic manner by reason of passion or hostility (Litton Mills, Inc. v. Galleon
compelling circumstances justify the resort to the extraordinary remedy of a writ of certiorari.
Trader, Inc., et al[.], L-40867, 26 July 1988, 163 SCRA 489).
Similarly, the RTC is the proper venue to hear FUCC’s prayer for permanent injunction. Unquestionably, RA
Accordingly, there being no showing of grave abuse of discretion, FUCC has no valid ground to demand
No. 897516 enjoins all courts, except the Supreme Court, from issuing any temporary restraining order,
annulment of the contract between PPMC and SCCI.
WHEREFORE, the petition is DISMISSED. The assailed Decision of the PPMC is AFFIRMED. is reappointed to the Court after rendering service in any other position in the government shall retain the
precedence to which he was entitled under his original appointment, and his service in the Court shall, for all
SO ORDERED. intents and purposes, be considered as continuous and uninterrupted. (as amended by Exec. Order No. 33,, July
28, 1986.)
Appellate jurisdiction
Section 4. Exercise of powers and functions. – The Court Appeals shall exercise its powers,
functions, and duties, through seventeen (17) divisions, each composed of three (3) members. The Court may
sit en banc only for the purpose of exercising administrative, ceremonial, or other non-adjudicatory
functions. (as amended by Exec. Order No. 33,.)

Section 5. Succession to Office of Presiding Justice. – In case of a vacancy in the absence of
inability to perform the powers, functions, and duties of his office, the associate Justice who is first in
precedence shall perform his powers, functions, and duties until such disability is removed, or another
Presiding Justice is appointed and has qualified.

Section 6. Who presides over session of a division. – If the Presiding Justice is present in any
session of a division of the Court, he shall preside. In his absence, the Associate Justice attending such session
who has precedence shall preside.
SC Power of administrative supervision
Section 7. Qualifications. – The Presiding Justice and the Associate Justice shall have the same
qualifications as those provided in Constitution for Justice of the Supreme Court.

Section 8. Grouping of Divisions. – (Expressly repealed by Section 4, Exec. Order No. 33, July 28,
1986.)

Section 9. Jurisdiction. – The Court of Appeals shall Exercise:

1. Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo

warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction;

2. Exclusive original jurisdiction over actions for annulment of judgements of Regional Trial
Courts; and

3. Exclusive appellate jurisdiction over all final judgements, resolutions, orders or awards of
Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commission,
including the Securities and Exchange Commission, the Social Security Commission, the
Employees Compensation Commission and the Civil Service Commission, Except those falling
within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the
Court of Appeals
Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this
BATAS PAMBANSA Blg. 129 Act, and of subparagraph (1) of the third paragraph and subparagraph 4 of the fourth paragraph od
AN ACT REORGANIZING THE JUDICIARY, APPROPRIATING FUNDS THEREFOR, AND FOR Section 17 of the Judiciary Act of 1948.
OTHER PURPOSES The court of Appeals shall have the power to try cases and conduct hearings, receive evidence and
PRELIMINARY CHAPTER perform any and all acts necessary to resolve factual issues raised in cases falling within its original and
Section 1. Title. – This Act shall be known as "The Judiciary Reorganization Act of 1980." appellate jurisdiction, including the power to grant and conduct new trials or Appeals must be continuous and
Section 2. Scope. – The reorganization herein provided shall include the Court of Appeals, the must be completed within three (3) months, unless extended by the Chief Justice. (as amended by R.A. No.
Court of First Instance, the Circuit Criminal Courts, the Juvenile and Domestic Relations Courts, the Courts of 7902.)
Agrarian Relations, the City Courts, the Municipal Courts, and the Municipal Circuit Courts. Section 10. Place of holding sessions. – The Court of Appeals shall have its permanent station in
CHAPTER I the City of Manila. Whenever demanded by public interest, the Supreme Court, upon its own initiative or upon
COURT OF APPEALS recommendation of the Presiding Justice, may authorize a division of the Court to hold sessions outside
Manila, periodically, or for such periods and at such places as the Supreme Court may determine, for the
Section 3. Organization. – There is hereby created a Court of Appeals which consists of a Presiding purpose of hearing and deciding cases.
Justice and fifty Associate Justice who shall be appointed by the President of the Philippines. The Presiding
Justice shall be so designated in his appointment, and the Associate Justice shall have precedence according to Section 11. Quorum – A majority of the actual members of the Court shall constitute a quorum for
the dates of their respective appointments, or when the appointments of two or more of them shall bear the its session en banc. Three members shall constitute a quorum for the session of a division. The unanimous vote
same date, according to the order in which their appointments were issued by the President. Any member who of the three members of a division shall be necessary for the pronouncement of a decision of final resolution,
which shall be reached in consultation before the writing of the opinion by any members of the division. In the ● The Eleventh Judicial Region, consistingnof the provinces of Davao del Norte, Davao Oriental,
event that the three members do not reach a unanimous vote, the Presiding Justice shall request the Raffle Davao del Sur, South Cotabato, and Surigao del Sur, and the cities of Davao, and General Santos;
Committee of the Court for the designation of two additional Justice to sit temporarily with them, forming a and
special division of five members and the concurrence of a majority of such division shall be necessary for the
● The Twelfth Judicial Region, consisting of the provinces of Lanao del Norte, Lanao del Sur,
pronouncement of a decision or final resolution. The designation of such additional Justice shall be made
strictly by raffle. Maguindanao, North Cotabato, and Sultan Kudarat, and the cities of Cotabato, Iligan, and Marawi.
● In case of transfer or redistribution of the provinces, subprovinces, cities or municipalities
A month for reconsideration of its decision or final resolution shall be resolved by the Court within comprising the regions established by law of purposes of the administrative field organization of the
ninety (90) days from the time it is submitted for resolution, and no second motion for reconsideration from various departments and agencies of the government, the composition of the judicial regions herein
the same party shall be entertainment. (as amended by Exec. Order No. 33, July 28, 1986.) constituted shall be deemed modified accordingly.
Section 12. Internal Rules. – The court en banc is authorized to promulgate rules or orders Section 14. Regional Trial Courts.
governing the constitution of the divisions and the assignment of Appellate Justices thereto, the distribution of
(a) Fifty-seven Regional Trial Judges shall be commissioned for the First Judicial Region. There
cases, and other matters pertaining to the operations of the Court of its divisions. Copies of such rules and
shall be.
orders shall be furnished by the Supreme Court, which rules and orders shall be effective fifteen (15) days
after receipt thereof, unless directed otherwise by the Supreme Court. ● Two branches (Branches III ans II) for the province of Abra, with seats at
Bangued;
CHAPTER II
● Eight branches (Branches III to X) for the province of Benguet and the city of
REGIONAL TRIAL COURTS
Baguio, Branches III to VII with seats at Baguio City, and Branches VIII to X
Section 13. Creation of Regional Trial Courts. – There are hereby created thirteen (13) Regional at La Trinidad;
Trial Courts, one for each of the following judicial regions: ● Nine branches (Branches XI to XIX) for the province of Ilocos Norte and the
city of Laoag, Branches XI to XVI with seats at Laoag City, Branches XVII
● The First Judicial Region, consisting of the provinces of Abra, Benguet, Ilocos Norte, Ilocos Sur, La and XVIII at Batac, and Branch XIX at Bangui;
Union, Mountain Province, and Pangasinan, and cities of Baguio, Dagupan, Laog and San Carlos; ● Six branches (Braches XX to XXV) for the province of Ilocos Sur, Branches
● The Second Judicial Region, consisting of the provinces of Batanes, Cagayan, Ifugao, Kalinga- XX and XXI with seats at Vigan, Branch XXII at Narvacan, Branch XXIII at
Candon, Branch XXIV at Cabugao, and Branch XXV at Tagudin;
Apayao, Nueva Viscaya, and Quirino; ● Nine branches (Branches XXVI to XXXIV) for the province of La Union,
● The Third Judicial Region, consisting of the provinces of Bataan, Bulacan (except the municipality Branches XXVI to XXX with seats at San Fernando, Branches XXXI and
of valenzuela), Nueva Ecija, Pampanga, Tarlac, and Zambales, and the cities of Angeles, XXXII at Agoo, Branch XXXIII at Bauang, and Branch XXXIV at Balaoan;
Cabanatuan, Olongapo, Palayan and San Jose; ● Two branches (Branches XXXV and XXXVI) for the province of Mountain
● The National Capital Judicial Region, consisting of the cities of Manila, Quezon, Pasay, Caloocan province, with seats at Bontoc; and
and Mandaluyong, and the municipalities of Navotas, Malabon, San Juan, Makati, Pasig, Pateros, ● Twenty-one branches (Branches XXXVII to LVII) for the province of
Pangasinan and the citie sof dagupan and san Carlos, Branches XXXVII to
Taguig, Marikina, Parañaque, Las Piñas, Muntinlupa, and Valenzuela;
XXXIX with seats at Lingayen, Branches XL to XLIV at dagupan, Branches
● The Fourth Judicial Region, consisting of the provinces of Batangas, Cavite, Laguna, Marinduque, XLV to XLIX at Urdaneta, Branch L at Villasis, Branches LI and LII at Tayug,
Mindoro Occidental, Mindoro Oriental, Palawan, Quezon, Rizal (except the cities and Branch LIII at Rosalaes, Branches LIV and LV at Alaminos, and Branch LVI
municipalities embraced within the National Capital Judicial Region0, Romblon, and Aurora, and and LVII at san Carlos.
the cities of Batangas, Cavite, Lipa, Lucena, Puerto Princessa, San Pablo, Tagaytay, and Trece (b) Thirty-two Regional Trial Judges shall be commissioned for the Second Judicial region. There
Martires; shall be:
● The Fifth Judicial Region, consisting of the provinces of Albay, Camarines Sur, Camarines Norte,
● Twelve branches (Branches I to XII) for the province of Cagayan, Branches I
Catanduanes, Masbate, and Sorsogon, and the cities of Legaspi, Naga and Iriga; to V with seats at Tuguegarao, Branches VI to X at Aparri, Branch XI at Tuao,
● The Sixth Judicial Region, consisting of the provinces of Aklan, Antique, Capiz, Iloilo, La Calota, and Branch XII at Sanchez Mira;
Roxas, San Carlos, and Silay, and the subprovince of Guimaras; ● One branch (Branch XIII) for the province of Batanes, with seat at Basco;
● The Seventh Judicial Region, consisting of the provinces of Bohol, Cebu, Negros Oriental, and ● Two branches (Branches XIV and XV) for the province of Ifugao, Branch XIV
Siquijor, and the cities of Bais, Canlaon, Cebu, Danao, Dumaguete, Lapu-lapu, Mandaue, with seat at Lagawe, and Branch XV at Potia;
Tagbilaran, and Toledo, ● Nine branches (Branches XVI to XXIV) for the province of Isabela, Branches
XVI to XVIII with seats at Ilagan, Branches XIX and XX at cauayan, Branch
● The Eighth Judicial Region, consisting of the provinces or Eastern Samar, Leyte, Northern, Samar, XXI at Santiago, Branch XXII at Cabagan, Branch XXIII at Roxas, and
Southern Leyte, Ormoc, and Tacloban: Branch XXIV at Echague;
● The Ninth Judicial Region, consisting of the provinces of Basilan, Sulu, Tawi-Tawi, Zamboanga del ● Two branches (Branches XXV and XXVI) for the province of kalinga-Apayao,
Sur, and the cities of Dapitan, Dipolog, Pagadian, and Zamboanga; Branch XXV with seat at Tabuk, and Branch XXVI at Luna;
● The Tenth Judicial Region, consisting of the provinces of Agusan del Norte, Agusan del Sur, ● Four branches (Branches XXVII to XXX) for the province of Nueva Vizcaya,
Bukidnon, Camiguin, Misamis Occidental, Misamis Oriental, and Surigao del Norte, and the cities Branches XXVII to XXIX with seats at Bayombong, and Branch XXX at
Bambang;
of Butuan, Cagayan de Oro, Gingoog, Ozamis, Oroquieta, Surigao, and Tangub;
 ● Two branches (Branches XXXI and XXXII) for the province of Quirino, with ● Five branches (Branches XXXIX to XLIII) for the province of Mindoro
seats at Cabarroguis. Oriental, Branches XXXIX to XL with seats at Calapan, Branches XLI and
(c) Seventy-five Regional Trial judges shall be commissioned for the Third Judicial Region. There XLII at Pinamalayan, and Branch XLII at Roxas;
shall be: ● Three branches (Branches XLVII to XLVI) for the province of Mindoro
Occidental, Branch XLIV with seat at Mamburao, and Branches XLV and
● Five branches (Branches I to V) for the province of Bataan, Branches I to III XLVI at San Jose;
with seats at Balanga, Branch IV at Mariveles, and Branch V at Dinalupihan; ● Six branches (Branches XLVII to LII) for the province of Palawan and the city
● Seventeen branches (Branches VI to XXII) for the province of Bulacan (except of Puerto Princesa, with seats at Puerto Princesa City;
the municipality of Valuenzuela), with seats at Malolos; ● Thirteen branches (Branches LIII to LXV) for the province of Quezon and the
● Eighteen branches (Branches XXIII to XL) for the province of Nueva Ecija city of Lucena, Branches LIII to LX with seats at Lucena City, Branches LXI
and the cities of Cabanatuan, San Jose and Palayan, Branches XXIII to XXX and LXII at Gumaca, Branch LXIII at Calauag, Branch LXIV at Mauban, and
with seats at Cabanatuan City, Branches XXXI to XXXIII at Guimba, Branch LXV at Infanta;
Branches XXXIV to XXXVI at Gapan, Branch XXXVII at Sto. Domingo, ● One branchj(Branch LXVI) for the province of Aurora, with seat at Baler;
Branches XXXVIII and XXXIX at San Jose, and Branch XL at Palayan. ● Fourteen branches (Branches LXVII to LXXX) for the province of Rizal
● Twenty-two branches (Branches XLI to LXII) for the province of Pampanga except the cities and municipalities embraced within the National Capital
and the city of Angeles, Branches XLI to XLVIII with seats at San Fernando, Judicial Region, Branches LXVII to LXX with seats at Binangonan, Branches
Branches XLIX to LIII at Guagua, Branches LIV and LV at Macabebe, and LXXI to LXXIV at Antipolo, Branches LXXV to LXXVII at San Mateo, and
Branches LVI to LXII at Angeles City; Branches LXXVIII to LXXX at Morong; and
● Six branches (Branches LXIII to LXVIII) for the province of Tarlac, Branches ● Two branches (Branches LXXXI and LXXXII) for the province of Romblon,
LXVI at Capas, Branch LXVII at Paniqui, and Branch LXVIII at Camiling; Branch LXXXI with seat at Romblon, and Branch LXXXII at Odiongan.
and (f) Fifty-five Regional Trial Judges shall be commissioned for the Fifth Judicial Region. There shall
● Seven branches (Branches LXIX to LXXV) for the province of Zambales and be:
the city of Olongapo, Branches LXIX to LXXI with seats at Iba and Branches
LXXII to LXXV at Olongapo City ● Eighteen branches (Branches I to XVIII) for the province of Albay and the city
(d) One hundred seventy-two (172) Regional Trial Judges shall be commissioned for the National of Legaspi, Branches I to X with seats at Legaspi City, Branches XI to XIV at
Capital Judicial Region. There shall be: Ligao, and Branches XV to XVIII at Tabaco;
● Nineteen branches (Branches XIX to XXXVII) for the province of Camarines
● Fifty-five branches (Branches 1 to 55) for the City of Manila, wit seats thereat; Sur and the cities of Naga and Iriga, Branches XIX to XXVIII with seats at
● Thirty-two branches (Branches 76 to 107) for Quezon City, with seats thereat; Naga City, Branch XXIX at Libmanan, Branch XXX at Tigaon, Braches
● Twelve branches (Branches 108 to 119) for Pasay City, with seats thereat; XXXI to XXXIII at Pili, and Branches XXXIV to XXXVII at Iriga City;
● Twelve branches (Branches 120 to 131) for Caloocan City, with seats thereat; ● Four branches (Branches XXXVIII to XLII) for the province of Camarines
● Fifty-eight branches (Branches 56 to 74 and 132 to 170) for the Municipalities Norte, with seat at Daet;
of Navotas, Malabon, San Juan, Madaluyong, Makati, Pasig, Pateros, Taguig, ● Two branches (Branches XLII and XLII) for the province of Catanduanes,
Marikina, Parañaque, Las Piñas, and Muntinlupa; Branches 67 to 71 and 151 to with seats at Virac;
168 at Pasig; and Branches 72 to 74, 169 and 170 at Malabon; and ● Seven branches (Branches XLIV to L) for the province of Masbate, Branches
● Three branches (Branches 75, 171 and 172) for the municipality of Valenzuela, XLIV to XLVIII with seats at Masbate, Branch XLIX at Cataingan, and
with seats thereat. (As amended by EO No. 33, July 30, 1986.) Branch L at San Jacinto; and
(e) Eihty-two Regional Trial Judges shall be commissioned for the Fourth Judicial Region. There ● Five branches (Branches LI to LV) for the province of Sorsogon, Branches LI
shall be: to LIII with seats at Sorsogon, Branch LVI at Gubat, and Branch LV at Irosin.
(g) Sixty-three Regional Trial Judges shall be commissioned for the Sixth Judicial Region. There
● Fourteen branches (Branches I to XIV) for the province of Batangas and the shall be:
cities of Lipa and Batangas, Branches I to VI with seats at Batangas City,
Branch V at Lemery, Branches VI to VIII at Tanuan, Branches IX to XI at ● Nine branches (Branches I to IX) for the province of Aklan, with seats at
Balayan, Branches XII and XIII at Lipa, and Branch XIV at Nasugbu; Kalibo;
● Nine branches (Branches XV to XXIII) for the province of Cavite and the ● Four branches (Branches X to XIII) for the province of Antique, Branches X to
cities of Cavite, Tagaytay and Trece Matires, Branch XV with seat at Naic, XII with seats at San Jose, and Branch XIII and Culasi;
Branches XVII at Cavite City, Branch XVIII at Tagayatay City, Branch XIX at ● Eighr branches (Branches XIV to XXI) for the province of Capiz and the city
Bacoor, Branches XX to XXII at Imus, and Branch XXIII at Trece Martires; of Roxas, Branches XIV to XIX with seats at Roxas City and Branches XX
● Fourteen branches (Branches XXIV to XXXVII) for the province of Laguna and XXI at Mambusao;
and the city of San Pablo, Branches XXVIII at Sta. Cruz, Branches XXIX to ● Eighteen branches (Branches XXII to XXXIX) for the province of Iloilo, the
XXXII at San Pable City, Branch XXXIII at Siniloan, and Branches XXXIV to subprovince of Guimaras, and the city of Iloilo, with seats at Iloilo City; and
XXXVI at Calamba; ● Twenty-four branches (Branches XL to LXIII) for the province of Negros
● One branch (Branch XXXVIII) for the province of Marinduque, with seat at Occidental, and the cities of Bacolod,Bago, Cadiz, La Carlota, San Carlos and
Boac; Silay, Branch XL with seat at Silay City, Branches XLI to LIV at Bacolod
 City, Branches LV and LVI at Himamaylan, Branches LVII to LIX at ● Five branches (Branches I to V) for the province of Agusan del Norte and the
Kabankalan, Branch LXII at Bago City, and Branch LXII at La Carlota City. city of Butuan, with seats at Butuan City;
(h) Forty-six Regional Trial Judges shall be commissioned for the Seventh Judicial Region. There ● Two branches (Branches VI and VII) for the province of Agusan del Sur,
shall be: Branches VI with seat at Prosperidad and Branch VII with seat at Bayugan;
● Four branches (Branches VIII to XI) for the province of Bukidnon, Branches
● Four branches (Branches I to IV) for the province of Bohol and the city of VIII to X with seats at Malaybalay and Branch XI at Manalo Fortich;
Tagbilaran, with seats at Tagbilaran City; ● Five branches (Branches XII to XI) for the province of Misamis Occidental
● Twenty-five branches (Branches V to XXIX) for the province of Cebu and the and the cities of Oroquieta, Ozamis, and Tangub, Branches XII to XIV with
cities of Cebu, Danao, Lapu-Lapu, Mandaue and Toledo, Branches V to XXIV seats at Oroquieta City, Branch XV at Ozamis City, and Branch XVI at
with seats at Cebu City, Branch XXV at Danao City, Branch XXVI at Argao, Tangub City;
Branch XXVII at Lapu-Lapu City, Branch XXVIII at Mandaue City, and ● Eleven branches (Branches XVII to XXVII) for the province of Misamis
Branch XXIX at Toledo City; Oriental and the cities of Cagayan de Oro and Gingoog, Branches XVII to
● Sixteen branches (Branches XXX to XLV) for the province of Negros Oriental XXV with seats at Cagayan de Oro City, Branch XXVI at Medina, and Branch
and the cities of Dumaguete, Bais and Canlaon, Branches XXX to XLIV with XXVII at Gingoog City;
seats at Dumaguete City, and Branch XLV at Bais City; and ● One branch (Branch XXVIII) for the province of Camiguin, with seat at
● One branch (Branch XLVI) for the province of Siquijor, with seat at Larena. Mambajao; and
(i) Thirty-three Regional Trial Judges shall be commissioned for the Eighth Judicial Region. There ● Four branches (Branches XXIX to XXXII) for the province of Surigao del
shall be: Norte and the City of Surigao, Branches XXIX and XXX with seats at Surigao
City, Branch XXXI at Dapa, and Branch XXXII at Dinagat, Dinagat Island.
● Five branches (Branches I to V) for the province of Eastern Samar, Branches I (l) Twenty-nine Regional Trial Judges shall be commissioned for the Eleventh Judicial Region.
and II with seats at Borongan, Branch III at Guiuan, Branch IV at Dolores, and There shall be
Branch V at Oras;
● Thirteen branches (Branches VI to XVIII) for the province of Leyte, the sub- ● Four branches (Branches I to IV) for the province of Davao del Norte,
province of Biliran, and the cities of Ormoc and Tacloban, Branches VI and IX Branches I and II with seats at Tagum, Branch III at Nabunturan, and Branch
with seats at Tacloban City, Branch X at Abuyog, Branch XI at Calubian, IV at Panabo;
Branch XII at Ormoc City, Branch XIII at Carigara, Branch XIV at Baybay, ● Three branches (Branches V to VII) for the province of Davao Oriental,
Branch XV at Burauen, Branch XVI at Naval, Branch XVII at Palompon, and Branches V and VI with seats at Mati and Branch VII at Banganga;
Branch XVIII at Hilongos; ● Fourteen branches (Branches VIII to XXI) for the province of Davao del Sur
● Five branches (Branches XIX to XXIII) for the province of Northern Samar, and the city of Davao, Branches VIII to XVII with seats at Davao City,
Branches XIX and XX with seats at Catarman, Branches XXI and XXII at Branches XVIII and XIX at Digos, Branch XX at Malinta, and Branch XXI a
Laoang, and Branch XXIII at Allen; Bansalan;
● Three branches (Branches XXIV to XXVI) for the province of Southern Leyte, ● Five Branches (Branches XXII to XXVI) for the province of South Cotabato
Branches XXIV and XXV with seats at Maasin, and Branch XXVI at San and the city of General Santos, Branches XXII and XXIII with seats at General
Juan; and Santos City, Branches XXIV and XXV at Koronadal, and Branch XXVI at
● Seven branches (Branches XXVII to XXXIII) for the province of Samar and Surallah; and
the city of Calbayog, Branches XXVII to XXIX with seats at Catbalogan, ● Three branches (Branches XXVII to XXIX) for the province of Surigao del
Branch XXX at Basey, Branches XXXI and XXXII at Calbayog City, and Sur, Branch XXVII with seat at Tandag, Branch XXVIII at Lianga, and Branch
Branch XXXIII at Calbiga. XXIX at Bislig.
(j) Twenty-four Regional Trial Judges shall be commissioned for the Ninth Judicial Region. There ● (m) Twenty Regional Trial Judges shall be commissioned for the Twelfth
shall be: Judicial Region. There shall be:
● Seven branches (Branches I to VII) for the province of Lanao del Norte and the
● Two branches (Branches I and II) for the province of Basilan, with seats at city of Iligan, Branches I to VI with seats at Iligan City, and Branch VII at
Isabela; Tubod;
● Two branches (Branches III and IV) for the province of Sulu, Branch III with ● Five branches (Branches VIII to XII) for the province of Lanao del Sur and the
seat at Jolo, and Branch IV at Parang; city of Marawi, Branches VIII to X with seats at Marawi City, and Branches
● One branch (Branch V) for the province of Tawi-Tawi, with seat at Bongao; XI and XII at Malabang;
● Six branches (Branches VI to XI) for the province of Zamboanga del Norte, ● Three branches (Branches XIII to XV) for the province of Maguindanao and
and the cities of Dipolog and Dapitan, Branches VI to X seats at Dipolog City, the city of Cotabato, Branches XIII and XIV with seats at Cotabato City, and
and Branch XI at Sindangan; and Branch XV at Maganoy;
● Thirteen branches (Branches XII to XXIV) for the province of Zamboanga del ● Three branches (Branches XVI to XVIII) for the province of North Cotabato,
Sur and the cities of Pagadian and Zamboanga Branches XII to XVII with seats Branch XVI with seat at Kabacan, Branch XVII at Kidapawan, and Branch
at Zamboanga City, Branches, XVIII to XXII at Pagadian City, Branch XXIII XVIII at Missayap; and
at Molave, and Branch XXIV at Ipil. ● Two branches (Branches XIX and XX) for the province of Sultan Kudarat,
(k) Thirty-two Regional Trial Judges shall be commissioned for the Tenth Judicial Region. There Branch XIX, with seat at Isulan, and Branch XX at Tacurong.
shall be:
 Section 15. Qualifications. – No persons shall be appointed Regional Trial Judge unless he is a (7) In all civil actions and special proceedings falling within the exclusive original jurisdiction of a
natural-born citizen of the Philippines, at least thirty-five years of age, and for at least ten years, has been Juvenile and Domestic Relations Court and of the Courts of Agrarian Relations as now provided by
engaged in the practice of law in the Philippines or has held a public office in the Philippines requiring law; and
admission to the practice of law as an indispensable requisite.
(8) In all other cases in which the demand, exclusive of interest, damages of whatever kind,
Section 16. Time and duration of sessions. – The time and duration of daily sessions of the Regional attorney's fees, litigation expenses, and costs or the value of the property in controversy exceeds
Trial Courts shall be determined by the Supreme Court: Provided, however, That all motions, except those One hundred thousand pesos (100,000.00) or, in such other abovementioned items exceeds Two
requiring immediate action, shall be heard in the afternoon of every Friday, unless it falls on a holiday, in hundred thousand pesos (200,000.00). (as amended by R.A. No. 7691*)
which case, the hearing shall be held on the afternoon of the next succeeding business day: Provided, further,
That the Supreme Court may, for good reasons, fix a different motion day in specified areas Section 20. Jurisdiction in criminal cases. – Regional Trial Courts shall exercise exclusive original
jurisdiction in all criminal cases not within the exclusive jurisdiction of any court, tribunal or body, except
Section 17. Appointment and assignment of Regional Trial Judges. – Every Regional Trial Judge those now falling under the exclusive and concurrent jurisdiction of the Sandiganbayan which shall hereafter
shall be appointed to a region which shall be his permanent station, and his appointment shall state the branch be exclusively taken cognizance of by the latter.
of the court and the seat thereof to which he shall be originally assigned. However, the Supreme Court may
assign temporarily a Regional Trial Judge to another region as public interest may require, provided that such Section 21. Original jurisdiction in other cases. – Regional Trial Courts shall exercise original
temporary assignment shall not last longer than six (6) months without the consent of the Regional Trial Judge jurisdiction:
concerned.
(1) In the issuance of writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and
A Regional Trial Judge may be assigned by the Supreme Court to any branch or city or municipality injunction which may be enforced in any part of their respective regions; and
within the same region as public interest may require, and such assignment shall not be deemed an assignment
to another station within the meaning of this section. (2) In actions affecting ambassadors and other public ministers and consuls.

Section 18. Authority to define territory appurtenant to each branch. – The Supreme Court shall Section 22. Appellate jurisdiction. – Regional Trial Courts shall exercise appellate jurisdiction over
define the territory over which a branch of the Regional Trial Court shall exercise its authority. The territory all cases decided by Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts in
thus defined shall be deemed to be the territorial area of the branch concerned for purposes of determining the their respective territorial jurisdictions. Such cases shall be decided on the basis of the entire record of the
venue of all suits, proceedings or actions, whether civil or criminal, as well as determining the Metropolitan proceedings had in the court of origin and such memoranda and/or briefs as may be submitted by the parties or
Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts over the said branch may exercise required by the Regional Trial Courts. The decision of the Regional Trial Courts in such cases shall be
appellate jurisdiction. The power herein granted shall be exercised with a view to making the courts readily appealable by petition for review to the
accessible to the people of the different parts of the region and making the attendance of litigants and
Court of Appeals which may give it due course only when the petition shows prima facie that the lower court
witnesses as inexpensive as possible.
has committed an error of fact or law that will warrant a reversal or modification of the decision or judgment
Section 19. Jurisdiction in civil cases. – Regional Trial Courts shall exercise exclusive original sought to be reviewed.
jurisdiction:
Section 23. Special jurisdiction to try special cases. – The Supreme Court may designate certain
(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation; branches of the Regional Trial Courts to handle exclusively criminal cases, juvenile and domestic relations
cases, agrarian cases, urban land reform cases which do not fall under the jurisdiction of quasi-judicial bodies
(2) In all civil actions which involve the title to, or possession of, real property, or any interest and agencies, and/or such other special cases as the Supreme Court may determine in the interest of a speedy
therein, where the assessed value of the property involved exceeds Twenty thousand pesos and efficient administration of justice.
(P20,000.00) or for civil actions in Metro Manila, where such the value exceeds Fifty thousand
pesos (50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, Section 24. Special Rules of Procedure. – Whenever a Regional Trial Court takes cognizance of
original jurisdiction over which is conferred upon Metropolitan Trial Courts, Municipal Trial juvenile and domestic relation cases and/or agrarian cases, the special rules of procedure applicable under
Courts, and Municipal Circuit Trial Courts; present laws to such cases shall continue to be applied, unless subsequently amended by law or by rules of
court promulgated by the Supreme Court.
(3) In all actions in admiralty and maritime jurisdiction where he demand or claim exceeds One
hundred thousand pesos (P100,000.00) or , in Metro Manila, where such demand or claim exceeds CHAPTER III
Two hundred thousand pesos (200,000.00); METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL COURTS, AND MUNICIPAL CIRCUIT
TRIAL COURTS
(4) In all matters of probate, both testate and intestate, where the gross value of the estate exceeds
One hundred thousand pesos (P100,000.00) or, in probate matters in Metro Manila, where such Section 25. Establishment of Metropolitan Trial Courts, Municipal Trial Courts and Municipal
gross value exceeds Two hundred thousand pesos (200,000.00); Circuit Trial Courts. – There shall be created a Metropolitan Trial Court in each metropolitan area established
by law, a Municipal Trial Court in each of the other cities or municipalities, and a Municipal Circuit Trial
(5) In all actions involving the contract of marriage and marital relations; Court in each circuit comprising such cities and/or municipalities as are grouped together pursuant to law.

(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising Section 26. Qualifications. – No person shall be appointed judge of a Metropolitan Trial Court,
jurisdiction or any court, tribunal, person or body exercising judicial or quasi-judicial functions; Municipal Trial Court, or Municipal Circuit Trial Court unless he is a natural-born citizen of the Philippines, at
least 30 years of age, and, for at least five years, has been engaged in the practice of law in the Philippines, or
has held a public office in the Philippines requiring admission to the practice of law as an indispensable ● Three branches for Mandaue City;
requisite. ● Two branches for Tagbilaran City;
● Two branches for Surigao City;
Section 27. Metropolitan Trial Courts of the National Capital Region. – There shall be a Metropolitan Trial ● Two branches for Butuan City;
Court in the National Capital Region, to be known as the Metropolitan Trial Court of Metro Manila, which ● Five branches for Cagayan de Oro City;
shall be composed of eighty-two (82) branches. There shall be: ● Seven branches for Davao City;
● Three branches for General Santos City;
● Thirty branches (Branches I to XXX) for the city of Manila with seats thereat; ● Two branches for Oroquieta City;
● Thirteen branches (Branches XXXI to XLIII) for Quezon City with seats thereat; ● Three branches for Ozamis City;
● Five branches (Branches XLIV to XLVIII) for Pasay City with seats thereat; ● Two branches for Dipolog City;
● Five branches (Branches XLIX to LIII) for Caloocan City with seats thereat; ● Four branches for Zamboanga City;
● One branch (Branch LIV) for Navotas with seat thereat; ● Two branches for Pagadian City; and
● Two branches (Branches LV and LVI) for Malabon with seats thereat; ● Two branches for Iligan City.
● Two branches (Branches LVII and LVIII) for San Juan with seats thereat; Section 30. Municipal Trial Courts. – In each of the municipalities that are not comprised
● Two branches (Branches LIX and LX) for Mandaluyong with seats thereat; within a metropolitan area and a municipal circuit there shall be a Municipal Trial Court which shall
● Seven branches (Branches LXI and LXVII) for Makati with seats thereat; have one branch, except as hereunder provided:
● Five branches (Branches LXVIII to LXXII) for Pasig with seats thereat;
● One branch (Branch LXXIII) for Pateros with seat thereat; ● Two branches for San Fernando, La Union;
● One branch (Branch LXXIV) for Taguig with seat thereat; ● Four branches for Tuguegarao;
● Two branches (Branches LXXV and LXXVI) for Marikina with seats thereat; ● Three branches for Lallo, and two branches for Aparri, both of Cagayan;
● Two branches (Branches LXXVII and LXXVIII) for Parañaque with seats thereat; ● Two branches for Santiago, Isabela;
● One branch (Branch LXXIX) for Las Piñas with seat thereat; ● Two branches each for Malolos, Meycauayan and Bulacan, all of Bulacan Province;
● One branch (Branch LXXX) for Muntinlupa with seat thereat; ● Four branches for San Fernando and two branches for Guagua, both of Pampanga;
● Two branches (Branches LXXXI and LXXXII) for Valenzuela with seats thereat; ● Two branches for Tarlac, Tarlac;
Section 28. Other Metropolitan Trial Courts. – The Supreme Court shall constitute Metropolitan ● Two branches for San Pedro, Laguna; and
Trial Courts in such other metropolitan areas as may be established by law whose territorial jurisdiction shall ● Two branches each for Antipolo and Binangonan, both in Rizal.
be co-extensive with the cities and municipalities comprising the metropolitan area.
Section 31. Municipal Circuit Trial Court. – There shall be a Municipal Circuit Trial Court in each
Every Metropolitan Trial Judge shall be appointed to a metropolitan area which shall be his permanent station area defined as a municipal circuit, comprising one or more cities and/or one or more municipalities. The
and his appointment shall state branch of the court and the seat thereof to which he shall be originally municipalities comprising municipal circuits as organized under Administrative Order No. 33, issued on June
assigned. A Metropolitan Trial Judge may be assigned by the Supreme Court to any branch within said 13, 1978 by the Supreme Court pursuant to Presidential Decree No. 537, are hereby constituted as municipal
metropolitan area as the interest of justice may require, and such assignment shall not be deemed an circuits for purposes of the establishment of the Municipal Circuit Trial Courts, and the appointment thereto of
assignment to another station within the meaning of this section. Municipal Circuit Trial Judges: Provided, however, That the Supreme Court may, as the interests of justice
may require, further reorganize the said courts taking into account workload, geographical location, and such
Section 29. Municipal Trial Courts in cities. – In every city which does not form part of a
other factors as will contribute to a rational allocation thereof, pursuant to the provisions of Presidential Decree
metropolitan area, there shall be a Municipal Trial Court with one branch, except as hereunder provided:
No. 537 which shall be applicable insofar as they are not inconsistent with this Act.
● Two branches for Laoag City; Every Municipal Circuit Trial Judge shall be appointed to a municipal circuit which shall be his official
● Four branches for Baguio City; station.
● Three branches for Dagupan City; The Supreme Court shall determine the city or municipality where the Municipal Circuit Trial Court shall hold
● Five branches for Olongapo City; sessions.
● Three branches for Cabanatuan City; Section 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal
● Two branches for San Jose City; Circuit Trial Courts in criminal cases. – Except in cases falling within the exclusive original jurisdiction of
● Three branches for Angeles City; Regional Trial Courts and of the Sandiganbayan, the Metropolitan Trial Courts, Municipal Trial Courts, and
● Two branches for Cavite City; Municipal Circuit Trial Courts shall exercise:
● Two branches for Batangas City;
(1) Exclusive original jurisdiction over all violations of city or municipal ordinances committed
● Two branches for Lucena City;
within their respective territorial jurisdiction; and
● Three branches for Naga City;
● Two branches for Iriga City; (2) Exclusive original jurisdiction over all offenses punishable with imprisonment not exceeding six
● Three branches for Legaspi City; (6) years irrespective of the amount of fine, and regardless of other imposable accessory or other
● Two branches for Roxas City; penalties, including the civil liability arising from such offenses or predicated thereon, irrespective
● Four branches for Iloilo City; of kind, nature, value, or amount thereof: Provided, however, That in offenses involving damage to
● Seven branches for Bacolod City; property through criminal negligence they shall have exclusive original jurisdiction thereof. (as
● Two branches for Dumaguete City; amended by R.A, No. 7691)
● Two branches for Tacloban City;
● Eight branches for Cebu City;
 Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal The preliminary investigation shall be conducted in accordance with the procedure prescribed in Section 1,
Circuit Trial Courts in civil cases. – Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit paragraphs (a), (b), (c), and (d), of Presidential Decree No. 911: Provided, however, That if after the
Trial Courts shall exercise: preliminary investigation the Judge finds a prima facie case, he shall forward the records of the case to the
Provincial/City Fiscal for the filing of the corresponding information with the proper court.
(1) Exclusive original jurisdiction over civil actions and probate proceedings, testate and intestate,
including the grant of provisional remedies in proper cases, where the value of the personal No warrant of arrest shall be issued by the Judge in connection with any criminal complaint filed with him for
property, estate, or amount of the demand does not exceed One hundred thousand pesos preliminary investigation, unless after an examination in writing and under oath or affirmation of the
(P100,000.00) or, in Metro Manila where such personal property, estate, or amount of the demand complainant and his witnesses, he finds that a probable cause exists.
does not exceed Two hundred thousand pesos (P200,000.00) exclusive of interest damages of
whatever kind, attorney's fees, litigation expenses, and costs, the amount of which must be Any warrant of arrest issued in accordance herewith may be served anywhere in the Philippines.
specifically alleged: Provided, That where there are several claims or causes of action between the
same or different parties, embodied in the same complaint, the amount of the demand shall be the Section 38. Judgments and processes. –
totality of the claims in all the causes of action, irrespective of whether the causes of action arose
(1) All judgments determining the merits of cases shall be in writing, stating clearly the facts and the
out of the same or different transactions;
law on which they were based, signed by the Judge and filed with the Clerk of Court. Such
(2) Exclusive original jurisdiction over cases of forcible entry and unlawful detainer: Provided, That judgment shall be appealable to the Regional Trial Courts in accordance with the procedure now
when, in such cases, the defendant raises the question of ownership in his pleadings and the question prescribed by law for appeals to the Court of First Instance, by the provisions of this Act, and by
of possession cannot be resolved without deciding the issue of ownership, the issue of ownership such rules as the Supreme Court may hereafter prescribe.
shall be resolved only to determine the issue of possession.
(2) All processes issued by the Metropolitan Trial Courts, Municipal Trial Courts and Municipal
(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real Circuit Trial Courts, in cases falling within their jurisdiction, may be served anywhere in the
property, or any interest therein where the assessed value of the property or interest therein does not Philippines without the necessity of certification by the Judge of the Regional Trial Court.
exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such
CHAPTER IV
assessed value does not exceed Fifty thousand pesos (P50,000.00) exclusive of interest, damages of
GENERAL PROVISIONS
whatever kind, attorney's fees, litigation expenses and costs: Provided, That value of such property
shall be determined by the assessed value of the adjacent lots. (as amended by R.A. No. 7691) Section 39. Appeals. – The period for appeal from final orders, resolutions, awards, judgments, or
decisions of any court in all cases shall be fifteen (15) days counted from the notice of the final order,
Section 34. Delegated jurisdiction in cadastral and land registration cases. – Metropolitan Trial
resolution, award, judgment, or decision appealed from: Provided however, That in habeas corpus cases, the
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts may be assigned by the Supreme Court to
period for appeal shall be forty-eight (48) hours from the notice of the judgment appealed from.
hear and determine cadastral or land registration cases covering lots where there is no controversy or
opposition, or contested lots the where the value of which does not exceed One hundred thousand pesos No record on appeal shall be required to take an appeal. In lieu thereof, the entire record shall be
(P100,000.00), such value to be ascertained by the affidavit of the claimant or by agreement of the respective transmitted with all the pages prominently numbered consecutively, together with an index of the contents
claimants if there are more than one, or from the corresponding tax declaration of the real property. Their thereof.
decisions in these cases shall be appealable in the same manner as decisions of the Regional Trial Courts. (as
amended by R.A. No. 7691) This section shall not apply in appeals in special proceedings and in other cases wherein multiple appeals are
allowed under applicable provisions of the Rules of Court.
Section 35. Special jurisdiction in certain cases. – In the absence of all the Regional Trial Judges in
a province or city, any Metropolitan Trial Judge, Municipal Trial Judge, Municipal Circuit Trial Judge may Section 40. Form of decision in appealed cases. – Every decision of final resolution of a
hear and decide petitions for a writ of habeas corpus or applications for bail in criminal cases in the province court in appealed cases shall clearly and distinctly state the findings of fact and the conclusions of
or city where the absent Regional Trial Judges sit. law on which it is based, which may be contained in the decision or final resolution itself, or
adopted by reference from those set forth in the decision, order, or resolution appealed from.
Section 36. Summary procedures in special cases. – In Metropolitan Trial Courts and Municipal
Trial Courts with at least two branches, the Supreme Court may designate one or more branches thereof to try Section 41. Salaries. – Intermediate Appellate Justices, Regional Trial Judges, Metropolitan Trial
exclusively forcible entry and unlawful detainer cases, those involving violations of traffic laws, rules and Judges, Municipal Trial Judges, and Municipal Circuit Trial Judges shall receive such compensation and
regulations, violations of the rental law, and such other cases requiring summary disposition as the Supreme allowances as may be authorized by the President along the guidelines set forth in Letter of Implementation
Court may determine. The Supreme Court shall adopt special rules or procedures applicable to such cases in No. 93 pursuant to Presidential Decree No. 985, as amended by Presidential Decree No. 1597.
order to achieve an expeditious and inexpensive determination thereof without regard to technical rules. Such
simplified procedures may provide that affidavits and counter-affidavits may be admitted in lieu of oral Section 42. Longevity pay. – A monthly longevity pay equivalent to 5% of the monthly basic pay
testimony and that the periods for filing pleadings shall be non-extendible. shall be paid to the Justices and Judges of the courts herein created for each five years of continuous, efficient,
and meritorious service rendered in the judiciary; Provided, That in no case shall the total salary of each
Section 37. Preliminary investigation. – Judges of Metropolitan Trial Courts, except those in the Justice or Judge concerned, after this longevity pay is added, exceed the salary of the Justice or Judge next in
National Capital Region, of Municipal Trial Courts, and Municipal Circuit Trial Courts shall have authority to rank.
conduct preliminary investigation of crimes alleged to have been committed within their respective territorial
jurisdictions which are cognizable by the Regional Trial Courts. Section 43. Staffing pattern. – The Supreme Court shall submit to the President, within thirty (30)
days from the date of the effectivity of this Act, a staffing pattern for all courts constituted pursuant to this Act
which shall be the basis of the implementing order to be issued by the President in accordance with the
immediately succeeding section.
REPUBLIC ACT No. 7902
Section 44. Transitory provisions. – The provisions of this Act shall be immediately carried out in
accordance with an Executive Order to be issued by the President. The Court of Appeals, the Courts of First AN ACT EXPANDING THE JURISDICTION OF THE COURT OF APPEALS, AMENDING FOR
Instance, the Circuit Criminal Courts, the Juvenile and Domestic Relations Courts, the Courts of Agrarian THE PURPOSE SECTION NINE OF BATAS PAMBANSA BLG. 129, AS AMENDED, KNOWN AS
Relations, the City Courts, the Municipal Courts, and the Municipal Circuit Courts shall continue to function THE JUDICIARY REORGANIZATION ACT OF 1980
as presently constituted and organized, until the completion of the reorganization provided in this Act as
declared by the President. Upon such declaration, the said courts shall be deemed automatically abolished and Section 1. Section 9 of Batas Pambansa Blg. 129, as amended, known as the Judiciary Reorganization Act of
the incumbents thereof shall cease to hold office. The cases pending in the old Courts shall be transferred to 1980, is hereby further amended to read as follows:
the appropriate Courts constituted pursuant to this Act, together with the pertinent functions, records,
"Sec. 9. Jurisdiction. — The Court of Appeals shall exercise:
equipment, property and the necessary personnel.
"(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo
The applicable appropriations shall likewise be transferred to the appropriate courts constituted pursuant to this
warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction;
Act, to be augmented as may be necessary from the funds for organizational changes as provided in Batas
Pambansa Blg. 80. Said funding shall thereafter be included in the annual General Appropriations Act. "(2) Exclusive original jurisdiction over actions for annulment of judgment of Regional Trial
Courts; and
Section 45. Shari'a Courts. – Shari'a Courts to be constituted as provided for in Presidential Decree
No. 1083, otherwise known as the "Code of Muslim Personal Laws of the Philippines," shall be included in the "(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or
funding appropriations so provided in this Act. awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or
commissions, including the Securities and Exchange Commission, the Social Security Commission,
Section 46. Gratuity of judges and personnel separated from office. – All members of the judiciary
the Employees Compensation Commission and the Civil Service Commission, except those falling
and subordinate employees who shall be separated from office by reason of the reorganization authorized
within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the
herein, shall be granted a gratuity at a rate equivalent to one month's salary for every year of continuous
Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this
service rendered in any branch of the government or equivalent nearest fraction thereof favorable to them on
Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of
the basis of the highest salary received: Provided, That such member of the judiciary or employee shall have
Section 17 of the Judiciary Act of 1948.
the option to retire under the Judiciary Retirement Law or general retirement law, if he has met or satisfied the
requirements therefor. "The Court of Appeals shall have the power to try cases and conduct hearings, receive evidence and perform
any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate
Section 47. Repealing clause. – The provisions of Republic Act No. 296, otherwise known as the
jurisdiction, including the power to grant and conduct new trials or further proceedings. Trials or hearings in
Judiciary Act of 1948, as amended, of Republic Act No. 5179 as amended, of the Rules of Court, and of all
the Court of Appeals must be continuous and must be completed within three (3) months, unless extended by
other statutes, letters of instructions and general order or parts thereof, inconsistent with the provisions of this
the Chief Justice."
Act are hereby repealed or accordingly modified.
Section 2. All provisions of laws and rules inconsistent with the provisions of this Act are hereby repealed or
Section 48. Date of Effectivity. – This Act shall take effect immediately.
amended accordingly.
Approved: August 14, 1981
Section 3. This Act shall take effect after fifteen (15) days following its publication in a newspaper of general
circulation.

Approved: February 23, 1995

Republic Act No. 8246             December 30, 1996

Amending Section 3,4 & 10 of BP 129

AN ACT CREATING ADDITIONAL DIVISIONS IN THE COURT OF APPEALS, INCREASING

THE NUMBER OF COURT OF APPEALS JUSTICES FROM FIFTY-ONE (51) TO SIXTY-NINE
(69), AMENDING FOR THE PURPOSE BATAS PAMBANSA BILANG 129, AS AMENDED,
OTHERWISE KNOWN AS THE JUDICIARY REORGANIZATION ACT OF 1980,
APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: The Supreme Court shall submit the findings and recommendation of this Committee to Congress
one (1) year after the effectivity of this Act.
Section 1. Section 3, Chapter 1 of Batas Pambansa Blg. 129, as amended, is hereby further amended to read as
follows: Section 8. Separability Clause. – If any portion or provision of this Act is declared unconstitutional,
the remainder of this Act or any provision not affected thereby shall remain in force and effect.
"Sec 3. Organization. – There is hereby created a Court of Appeals which shall consist of a
Presiding Justice and sixty-eight (68) Associate Justices who shall be appointed by the President of Section 9. Repealing Clause. – All laws, presidential decrees, letters of instruction
the Philippines. The Presiding Justice shall be so designated in his appointment, and the Associate executive orders, rules and regulations, or an part thereof inconsistent with the provisions of this Act
Justices shall have precedence according to the dates of their respective appointments, or when the are hereby repealed or modified accordingly.
appointments of two or more of them shall bear the same date, according to the order in which their
appointments were issued by the President. Any member who is reappointed to the Court after Section 10. Effectivity. – This Act shall take effect after fifteen (15) days following its publication
rendering service in another position in the government shall retain the precedence to which he was in two (2) newspapers of general circulation.
entitled under his original appointment. and his service in the Court shall, for all intents and
purposes, be considered as continuous and uninterrupted. Approved: December 30, 1996

Section 2. Section 4 of Batas Pambansa Blg. 129, as amended, is hereby further amended to read as follows:

"Sec. 4. Exercise of Powers and Functions. – The Court of Appeals shall exercise its powers,
functions, and duties through twenty-three (23) divisions. each composed of three (3) members. The
Court may sit en banc for the purpose of exercising administrative, ceremonial or other
nonadjudicatory functions.

Section 3. Section 10 of Batas Pambansa Blg. 129, as amended, is hereby further amended to read as follows:

"Sec. 10. Place of Holding Sessions. – The Court of Appeals shall have its permanent stations as
follows: The first seventeen (17) divisions shall be stationed in the City of Manila for cases coming
from the First to the Fifth Judicial Regions; the Eighteenth, Nineteenth, and Twentieth Divisions
shall be in Cebu City for cases coming from the Sixth, Seventh and Eighth Judicial Regions; the
Twenty-first, Twenty-second and Twenty-third Divisions shall be in Cagayan de Oro City for cases
coming from the Ninth, Tenth, Eleventh, and Twelfth Judicial Regions. Whenever demanded by
public interest, or whenever justified by an increase in case load, the Supreme Court, upon its own
initiative or upon recommendation of the Presiding Justice of the Court of Appeals, may authorize
any division of the Court to hold sessions periodically, or for such periods and at such places ;as the
Supreme Court may determine. for the purpose of hearing and deciding. cases. Trials or hearings in
the Court of Appeals must be continuous and must be completed within three (3) months unless
extended by the Chief Justice of the Supreme Court."
Question of law, fact or both
Section 4. The amount necessary to carry out the provisions of this Act shall be included in the
General Appropriations Act of the year following its enactment into law and thereafter. [G.R. NO. 164547 : March 28, 2007]
CGP TRANSPORTATION AND SERVICES CORPORATION, Petitioner, v. PCI LEASING AND
Section 5. Upon the effectivity of this Act, all pending cases, except those which have been FINANCE, INCORPORATED, Respondent.
submitted for resolution, shall be referred to the proper division of the Court of Appeals. CHICO-NAZARIO, J.:
Before us is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court seeking to annul
Section 6. Nothing in this Act shall be construed to allow the transfer, except in cases of temporary
and set aside the 26 March 2004 Decision and 13 July 2004 Resolution of the Court of Appeals in CA G.R. SP
assignme nt, of any member of the Court of Appeals to any place or station without his or her written consent,
No. 68528 entitled "PCI Leasing and Finance, Inc. v. Hon. Alberto L. Lerma in His Capacity as Presiding
or to undermine the security of tenure of its members as provided in the Constitution, or alter the seniority in
Judge of Branch 256 of the Regional Trial Court of Muntinlupa City and CGP Transportation and Services
said Court in accordance with existing laws.
Corporation." In the assailed decision, the Court of Appeals set aside the 27 March 2001 and 30 August
Section 7. The Supreme Court, is hereby authorized and empowered to constitute a Study 2001 Orders of the Regional Trial Court (RTC), Branch 256, of the City of Muntinlupa in LRC Case No. 99-
Committee composed of a member of the Judiciary, the prosecution, the Integrated Bar of the Philippines 020 entitled "In re: Petition for Issuance of Writ of Possession for Real Properties Covered by Transfer
(IBP), a representative of the association of law colleges and law professors, and a member of the public at Certificates of Title Nos. 172319 and 180241 of the Register of Deeds for Makati City (CGP Transportation &
large. Services Corporation Properties)." Herein respondent PCI Leasing and Finance, Incorporated (PCI) was
originally the petitioner in the aforequoted case, while herein petitioner CGP Transportation and Services
The Committee shall undertake a serious study as to the feasibility and desirability of setting up a Corporation (CGP) was the oppositor therein.
Regional Circuit Courts of Appeals in lieu and in place of the present Courts of Appeals System. This case stemmed from the extra-judicial foreclosure proceedings instituted by herein respondent PCI against
the Real Estate Mortgage and the Amendment of Real Estate Mortgage executed by herein petitioner CGP.
The facts are as follows: There is basis to the pending motion of petitioner insofar as the reinstatement of preliminary injunction earlier
issued by this court and submission for resolution of motions are concerned, as they all refer to Civil Case No.
Petitioner CGP obtained two loans from respondent PCI, the collective principal sum of which amounted to 99-234. This Court recognizes the snafu brought about by the several pleadings and pending incidents both in
Sixteen Million (P16,000,000.00) pesos. Both loans were secured by real estate mortgages over two parcels of the instant case and Civil Case No. 99-234 which involved the same parties and the same subject matter.
land located in Bo. Cupang, Muntinlupa City, and covered by Transfer Certificates of Title Nos. 172319 and
180241 issued by the Registry of Deeds of Makati City. Be that as it may, this court, after a careful review of the verified opposition of the oppositor, including it
annexes, is not inclined to grant the ex-parte proceedings as asserted by the petitioner. This court reviewed the
Petitioner CGP failed to pay its indebtedness to respondent PCI pursuant to the terms and conditions extant on grounds of oppositor in its motion for reconsideration of the order dated November 15, 2000, which allowed
the face of the Promissory Notes covering the two loans aforementioned. Accordingly, the latter filed a ex-parte presentation of evidence in this case. These grounds are: (a) Presence on record of a verified
petition for extra-judicial foreclosure of the real properties subject of the Real Estate Mortgage and the opposition to the petition and (b) there was an injunction earlier issued by this court on September 3, 1999 on
Amendment of Real Estate Mortgage, pursuant to Act No. 3135, as amended. the complaint for annulment of foreclosure proceedings of the subject properties filed by oppositor in Civil
Case No. 99-234 also before this court.
During the public auction held thereafter, respondent PCI was the highest bidder of the subject real properties.
Consequently, the corresponding Certificates of Sale were issued in the name of respondent PCI. It is the considered view of this court that the verified opposition on record joined issues that need to be heard
in the presence of both parties, a basic requirement of due process. The general rule frowns [on] ex-parte
On 19 November 1997, the above-mentioned Certificates of Sale were registered with the Registry of Deeds of proceedings. When this court issued a writ of injunction in Civil Case No. 99-234, taking into consideration
Makati City. the allegations in the complaint it was convinced that there was a need for a status quo between the parties
until all the issues joined therein are heard and disposed. On technical ground, the complaint in Civil Case No.
Petitioner CGP, however, failed to redeem the real properties during the redemption period; thus, respondent
99-234 was dismissed by this court. Although it may be too late for this court to say, there were indeed
PCI insisted that actual possession thereof be turned over to it. Expectedly, petitioner CGP balked at the idea
pending incidents that needed to be resolved in Civil Case No. 99-234. Precisely, when this court mentioned of
and refused the demand. On 12 April 1999, respondent PCI filed before the Regional Trial Court of
pending motions, it was actually referring to the pending incidents in Civil Case No. 99-234, as correctly
Muntinlupa City, Branch 256, and docketed as LRC Case No. 99-020, a petition for an ex-parte issuance of a
pointed out by the Oppositor, petitioner at the time of the dismissal of the complaint in Civil Case No. 99-234,
Writ of Possession. Petitioner CGP opposed the subject petition.
it has not filed yet its answer to the complaint in intervention of the plaintiff-intervenor. Petitioner, apparently,
On 15 November 2000, the RTC issued an Order ruling against oppositor (herein petitioner) CGP's stance. The took advantage of the inadvertence in the issuance of the order of dismissal in Civil Case No. 99-234 when it
Order, in part, reads: kept silent of the fact that it has not filed yet an answer to the complaint in intervention.

The petitioner is correct, the law expressly authorized the purchaser to petition for a writ of possession during This court is cognizant of the rule that the dismissal of the complaint on the merits automatically dissolves the
the redemption period by filing an Ex-parte Motion under oath for that purpose and that the pendency of any injunction issued therein even if the decision or order of dismissal is on appeal. The dismissal of this court
separate civil action can be no obstacle to the issuance of the writ of possession which is a ministerial act of however, of the complaint in Civil Case No. 99-234 was not the result of trial on the merits but rather on mere
the trial court after a title on the property has been consolidated in the mortgage. technicality. It is in this light that this court believes that considering that the dissolution of the injunction was
the consequence of the order of dismissal of the complaint in Civil Case No. 99-234, which was not the result
Accordingly, Ex-parte reception of evidence is scheduled on December 1, 2000, at 2:00 o'clock in the of a trial on the merits, and the said order of dismissal is now the subject of appeal, there is a need to suspend
afternoon. the proceedings in this case until the said appeal is disposed.

In its Motion for Reconsideration, petitioner CGP averred that the scheduled hearing was violative of the writ Aggrieved, respondent PCI filed before this Court, a Petition for Certiorari under Rule 65 of the Revised
of preliminary injunction issued in its favor by the same trial court, albeit in a different case involving the Rules of Court, premised on the following grounds:
same parties - particularly Civil Case No. 99-234, respecting a complaint for the annulment of the foreclosure
proceedings earlier mentioned. It argued that notwithstanding the fact that the complaint for annulment of 1. THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION, AMOUNTING TO
foreclosure proceedings had already been dismissed by the trial court, such order had not yet become final and LACK OR IN EXCESS OF JURISDICTION, WHEN IT NULLIFIED AND SET ASIDE THE EX PARTE
executory inasmuch as it was appealed to the Court of Appeals. That being the case, the writ should still be PROCEEDINGS IN THE CASE A QUO.
considered in effect and subsisting.
2. THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION, AMOUNTING TO
On 27 March 2001, the RTC reconsidered its Order, viz: LACK OR IN EXCESS OF JURISDICTION, WHEN IT REINSTATED IN THE CASE A QUO THE
PRELIMINARY INJUNCTION WHICH WAS ISSUED IN ANOTHER CASE (CIVIL CASE NO. 99-234).
[F]inding the grounds relied upon by the oppositor to be meritorious and considering further that there are
several motions to be resolved yet by the court, the Motion for Reconsideration is GRANTED, the order of 3. THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION, AMOUNTING TO
this court dated October 20, 2000 is set aside and the ex-parte proceedings is hereby nullified and set aside. LACK OR IN EXCESS OF JURISDICTION, WHEN IT SET ASIDE IN THE CASE A QUO THE ORDER
The Preliminary Injunction previously issued is reinstated. DATED 20 OCTOBER 2000 WHICH WAS ISSUED IN CIVIL CASE NO. 99-234.

Consequently, it was respondent PCI's turn to file a Motion for Reconsideration. 4. THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION, AMOUNTING TO
LACK OR IN EXCESS OF JURISDICTION, WHEN IT SUSPENDED THE PROCEEDINGS A QUO
In an Order dated 30 August 2001, the RTC stood pat on its position that the Opposition filed by herein UNTIL THE APPEAL IN CIVIL CASE NO. 99-234 IS RESOLVED.
petitioner CGP raised issues that needed to be heard in the presence of both parties. Said Order stated:
The petition (G.R. No. 150483) was, however, referred to the Court of Appeals by this Court for appropriate
This resolves the Motion for Reconsideration filed by petitioner on the order of this court dated March 27, action in a Resolution, dated 3 December 2001, pursuant to Section 6, Rule 56 of the 1997 Revised Rules of
2001, which granted the motion for reconsideration filed by Oppositor to the Order dated November 15, 2000. Civil Procedure, factual issues being involved.
In response to the referral, the Court of Appeals docketed the petition as CA G.R. SP No. 68528. Respondent PCI, in contrast, maintains that in rendering its assailed Decision, the "' Honorable Court of
Appeals simply discharged the duty assigned to it by this Honorable Court," apropos the latter's 3 December
In its Decision promulgated on 26 March 2004, the Court of Appeals granted herein respondent PCI's petition 2001 Resolution.
and set aside the RTC Order dated 30 August 2001. The dispositive portion reads:
We sustain respondent PCI's importunings and dismiss petitioner CGP's petition.
WHEREFORE, the instant petition is hereby GRANTED. The orders dated March 27, 2001 and August 28
(sic), 2001 of the Regional Trial Court, Branch 256, Muntinlupa City, in LRC Case No. 99-020 are SET Although the form or mode of the original petition filed by herein respondent PCI from the Order of the RTC
ASIDE. Further, the public respondent judge is ordered to continue with the proceedings and to decide the was a special civil action for certiorari, an incorrect mode of appeal there being questions of fact as assigned
case with dispatch. errors, i.e., the existence and relevancy of specific surrounding circumstance, their relation to each other and to
the whole situation, this Court, in order to serve the demands of substantial justice, considers and disposes of
The appellate court found public respondent RTC Judge to have gravely abused his discretion amounting to the case as an appeal by certiorari instead.
lack or excess of jurisdiction in suspending the proceedings in LRC Case No. 99-020 relating to the writ of
possession asked for by herein respondent PCI. The Court of Appeals did not favor the RTC Judge who, "in In an appeal by certiorari under Rule 45, only questions of law may be raised. In petitions such as the one
effect took cognizance of the proceedings in Civil Case No. 99-234, an action for annulment of foreclosure filed in G.R. No. 150483, questions of fact may not be the proper subject of appeal under Rule 45 as this mode
proceedings filed by" herein petitioner CGP - one that is entirely separate from the case earlier filed. of appeal is generally confined to questions of law. Well entrenched is the rule that this Court is not a trier of
Moreover, "[w]ith the dismissal of the main case, (an) injunction (issued therein) is automatically lifted and the facts. The resolution of factual issues is the function of lower courts, whose findings on these matters are
dissolution thereof is not appealable." The Court of Appeals then clarified that though the preceding principle received with respect and are in fact binding on us subject to certain exceptions. Cases where an appeal
is the general rule, the circumstances surrounding the reinstatement of the subject writ of preliminary involved questions of fact, of law, or both fall within the exclusive appellate jurisdiction of the Court of
injunction do not necessarily entitle the application of the exception stated in Section 4, Rule 39 of the 1997 Appeals. This is attested to by Section 15, Rule 44 of the 1997 Revised Rules of Civil Procedure. The section
Revised Rules of Civil Procedure, which states: reads:

SEC. 4. Judgments not stayed by appeal. - Judgments in actions for injunction, receivership, accounting and SEC. 15. Questions that may be raised on appeal. - x x x he may include in his assignment of errors any
support, and such other judgments as are now or may hereafter be declared to be immediately executory, shall question of law or fact that has been raised in the court below and which is within the issues framed by the
be enforceable after their rendition and shall not be stayed by an appeal taken therefrom, unless otherwise parties.
ordered by the trial court. On appeal therefrom, the appellate court in its discretion may make an order
suspending, modifying, restoring or granting the injunction, receivership, accounting, or award of support. It was on this score that we referred the subject petition to the appellate court.

The stay of execution shall be upon such terms as to bond or otherwise as may be considered proper for the Under Section 5(f) of Rule 56 of the 1997 Revised Rules of Civil Procedure, an appeal may be dismissed on
security or protection of the rights of the adverse party. the ground of erroneous choice or mode of appeal. Said section reads:

It likewise noted that the fact that there was no dispute vis - à-vis herein petitioner CGP's failure to redeem SEC. 5. Grounds for dismissal of appeal. - The appeal MAY be dismissed motu proprio or on motion of the
the foreclosed real properties within the period, herein respondent PCI's right to possession thereof is quite respondent on the following grounds:
patent and absolute; and that "any question regarding the validity of the mortgage or its foreclosure cannot be a
legal ground for refusing the issuance of a writ of possession xxx." (f) Error in the choice or mode of appeal.

On 13 July 2004, the Court of Appeals denied the motion for reconsideration filed by herein petitioner CGP. This notwithstanding, the Court may refer the case to the Court of Appeals under par. 2, Section 6 of the same
rule. Said section states:
Hence, this Petition for Review on Certiorari filed under Rule 45 of the 1997 Revised Rules of Civil
Procedure. Petitioner CGP does not question at all the substantive aspect of the decision of the Court of SEC. 6. Disposition of improper appeal. - x x x
Appeals. It's petition is predicated solely on the issue of "whether or not the Honorable Court of Appeals An appeal by certiorari taken to the Supreme Court from the Regional Trial Court submitting issues of
gravely erred in giving due course to the petition for certiorari of respondent, there being already a final fact may be referred to the Court of Appeals for decision or appropriate action. The determination of the
finding by this Honorable Court in its Resolution dated December 3, 2001, in G.R. No. 150483, that the said Supreme Court on whether or not issues of fact are involved shall be final. [Emphasis supplied.]
petition raised questions of facts and therefore not proper for petition for certiorari ." This Court's discretion to refer the case to the Court of Appeals is by reason of the term "may" in both
sections. Such term denotes discretion on our part in dismissing an appeal or referring one to the Court of
In its one page argument, Petitioner CGP contends, in whole, that: Appeals.
It is undisputed that this Honorable Court in its resolution dated December 3, 2001 in G.R. No. 150483 has
found that issues of facts are raised in the petition filed therein. That these conclusion and finding of this Besides, it must be borne in mind that procedural rules are intended to ensure proper administration of law and
Honorable Court are final and therefore no court for that matter, including the Court of Appeals, can disturb justice. The rules of procedure ought not to be applied in a very rigid, technical sense, for they are adopted to
the same. [In fact and in truth, the factual issues are pending for resolution in the case before the Court of help secure, not override, substantial justice.26 A deviation from its rigid enforcement may thus be allowed to
Appeals, in the case entitled CGP TRANSPORTATION AND SERVICES CORPORATION, Plaintiff- attain its prime objective, for after all, the dispensation of justice is the core reason for the existence of the
appellant v. PCI LEASING AND FINANCE CORPORATION, defendant-appellee docketed as C.A. G.R. No. courts.
69466.] With this factual backdrop, petitioner honestly believes, that there can be no other fate on the said
In the case at bar, substantial ends of justice warranted the referral of the case to the appellate court for further
petition [of respondent] but the dismissal, it being a settled jurisprudence that in a Petition for Review, only
appropriate proceedings.
questions of law can be raised. Even the Honorable Court of Appeals agree on this point when it says in its
aforequoted decision, citing the doctrine laid down by this Honorable Court in BCI Employees & Workers WHEREFORE, premises considered, the instant petition is hereby DENIED. The assailed 26 March 2004
Union v. Marcos, 39 SCRA 178, that "It is however basic that when facts are disputed, certiorari is not an Decision and 13 July 2004 Resolution, both of the Court of Appeals, in CA G.R. SP No. 68528 entitled "PCI
appropriate remedy".
Leasing and Finances, Inc. v. Hon. Alberto L. Lerma, In His Capacity as Presiding Judge of Branch 256 of the Section 3. Section 3 of the same Act is hereby amended to read as follows:
Regional Trial Court of Muntinlupa City and CGP Transportation and Services Corporation," are AFFIRMED.
No costs "SEC. 3. Clerk of Court; Division Clerks of Court; Appointment; Qualification;
Compensation. - The CTA shall have a Clerk of Court and three (3) Division Clerks of Court who
Court of Tax Appeals shall be appointed by the Supreme Court. No person shall be appointed Clerk of Court or Division
Clerk of Court unless he is duly authorized to practice law in the Philippines. The Clerk of Court
Republic Act No. 9282             March 30 2004 and Division Clerks of Court shall exercise the same powers and perform the same duties in regard
to all matters within the Court's jurisdiction, as are exercised and performed by the Clerk of Court
AN ACT EXPANDING THE JURISDICTION OF THE COURT OF TAX APPEALS (CTA), and Division Clerks of Court of the Court of Appeals, in so far as the same may be applicable or
ELEVATING ITS RANK TO THE LEVEL OF A COLLEGIATE COURT WITH SPECIAL analogous; and in the exercise of those powers and the performance of those duties they shall be
JURISDICTION AND ENLARGING ITS MEMBERSHIP, AMENDING FOR THE PURPOSE under the direction of the Court. The Clerk of Court and the Division Clerks of Court shall have the
CERTAIN SECTIONS OR REPUBLIC ACT NO. 1125, AS AMENDED, OTHERWISE KNOWN AS same rank, privileges, salary, emoluments, retirement and other benefits as those provided for the
THE LAW CREATING THE COURT OF TAX APPEALS, AND FOR OTHER PURPOSES Clerk of Court and Division Clerks of Court of the Court of Appeals, respectively.'
Be it enacted by the Senate and House of Representatives of the Philippine Congress Assembled: Section 4. Section 4 of the same Act is hereby amended to read as follows:
Section 1. Section 1 of Republic Act No. 1125, as amended is hereby further amended to read as "SEC. 4. Other Subordinate Employees. - The Supreme Court shall appoint all officials
follows: and employees of the CTA, in accordance with the Civil Service Law. The Supreme Court shall fix
their salaries and prescribe their duties."
"SECTION 1. Court; Justices; Qualifications; Salary; Tenure. - There is hereby created a Court of
Tax Appeals (CTA) which shall be of the same level as the Court of Appeals, possessing all the Section 5. Section 5 of the same Act is hereby amended to read as follows:
inherent powers of a Court of Justice, and shall consist of a Presiding Justice and five (5) Associate
Justices. The incumbent Presiding Judge and Associate Judges shall continue in office and bear the "SEC. 5. Disqualifications. - No Justice or other officer or employee of the CTA shall
new titles of Presiding Justice and Associate Justices. The Presiding Justice and the most Senior intervene, directly or indirectly, in the management or control of any private enterprise which in any
Associate Justice shall serve as chairmen of the two (2) Divisions. The additional three (3) Justices way may be affected by the functions of the Court. Justices of the Court shall be disqualified from
and succeeding members of the Court shall be appointed by the President upon nomination by the sitting in any case on the same grounds provided under Rule one hundred thirty-seven of the Rules
Judicial and Bar Council. The Presiding Justice shall be so designated in his appointment, and the of Court for the disqualification of judicial officers. No person who has once served in the Court in
Associate Justices shall have precedence according to the date of their respective appointments, or a permanent capacity, either as Presiding Justice or as Associate Justice thereof, shall be qualified to
when the appointments of two (2) or more of them shall bear the same date, according to the order practice as counsel before the Court for a period of one (1) year from his retirement or resignation."
in which their appointments were issued by the President. They shall have the same qualifications,
rank, category, salary, emoluments and other privileges, be subject to the same inhibitions and Section 6. Section 6 of the same Act is hereby amended to read as follows:
disqualifications, and enjoy the same retirements and other benefits as those provided for under
existing laws for the Presiding Justice and Associate Justices of the Court of Appeals. "SEC. 6. Place of Office. - The CTA shall have its principal office in Metro
Manila and shall hold hearings at such time and place as it may, by order in writing,
"Whenever the salaries of the Presiding Justice and the Associate Justices of the Court of Appeals designate."
are increased, such increases in salaries shall be deemed correspondingly extended to and enjoyed
by the Presiding Justice and Associate Justices of the CTA. Section 7. Section 7 of the same Act is hereby amended to read as follows:

"The Presiding Justice and Associate Justices shall hold office during good behavior, until they "Sec. 7. Jurisdiction. - The CTA shall exercise:
reach the age of seventy (70), or become incapacitated to discharge the duties of their office, unless
sooner removed for the same causes and in the same manner provided by law for members of the "a. Exclusive appellate jurisdiction to review by appeal, as herein provided:
judiciary of equivalent rank." "1. Decisions of the Commissioner of Internal Revenue in cases involving
Section 2. Section 2 of the same Act is hereby amended to read as follows: disputed assessments, refunds of internal revenue taxes, fees or other charges,
penalties in relation thereto, or other matters arising under the National Internal
"SEC. 2. Sitting En Banc or Division; Quorum; Proceedings. - The CTA may Revenue or other laws administered by the Bureau of Internal Revenue;
sit en banc or in two (2) Divisions, each Division consisting of three (3) Justices.
"2. Inaction by the Commissioner of Internal Revenue in cases involving
"Four (4) Justices shall constitute a quorum for sessions en banc and two (2) disputed assessments, refunds of internal revenue taxes, fees or other charges,
Justices for sessions of a Division: Provided, That when the required quorum cannot be penalties in relations thereto, or other matters arising under the National
constituted due to any vacancy, disqualification, inhibition, disability, or any other lawful Internal Revenue Code or other laws administered by the Bureau of Internal
cause, the Presiding Justice shall designate any Justice of other Divisions of the Court to Revenue, where the National Internal Revenue Code provides a specific period
sit temporarily therein. of action, in which case the inaction shall be deemed a denial;

"The affirmative votes of four (4) members of the Court en banc or two (2) members of a "3. Decisions, orders or resolutions of the Regional Trial Courts in local tax
Division, as the case may be, shall be necessary for the rendition of a decision or resolution." cases originally decided or resolved by them in the exercise of their original or
appellate jurisdiction;
 "4. Decisions of the Commissioner of Customs in cases involving liability for "1. Exclusive original jurisdiction in tax collection cases
customs duties, fees or other money charges, seizure, detention or release of involving final and executory assessments for taxes, fees,
property affected, fines, forfeitures or other penalties in relation thereto, or charges and penalties: Provided, however, That collection
other matters arising under the Customs Law or other laws administered by the cases where the principal amount of taxes and fees,
Bureau of Customs; exclusive of charges and penalties, claimed is less than
One million pesos (P1,000,000.00) shall be tried by the
"5. Decisions of the Central Board of Assessment Appeals in the exercise of its proper Municipal Trial Court, Metropolitan Trial Court
appellate jurisdiction over cases involving the assessment and taxation of real and Regional Trial Court.
property originally decided by the provincial or city board of assessment
appeals; "2. Exclusive appellate jurisdiction in tax collection
cases:
"6. Decisions of the Secretary of Finance on customs cases elevated to him
automatically for review from decisions of the Commissioner of Customs "a. Over appeals from the judgments,
which are adverse to the Government under Section 2315 of the Tariff and resolutions or orders of the Regional Trial
Customs Code; Courts in tax collection cases originally
decided by them, in their respective territorial
"7. Decisions of the Secretary of Trade and Industry, in the case of jurisdiction.
nonagricultural product, commodity or article, and the Secretary of Agriculture
in the case of agricultural product, commodity or article, involving dumping "b. Over petitions for review of the judgments,
and countervailing duties under Section 301 and 302, respectively, of the Tariff resolutions or orders of the Regional Trial
and Customs Code, and safeguard measures under Republic Act No. 8800, Courts in the Exercise of their appellate
where either party may appeal the decision to impose or not to impose said jurisdiction over tax collection cases originally
duties. decided by the Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit
"b. Jurisdiction over cases involving criminal offenses as herein provided: Trial Courts, in their respective jurisdiction."
"1. Exclusive original jurisdiction over all criminal offenses arising from Section 8. Section 10 of the same Act is hereby amended to read as follows:
violations of the National Internal Revenue Code or Tariff and Customs Code
and other laws administered by the Bureau of Internal Revenue or the Bureau "SEC. 10. Power to Administer Oaths; Issue Subpoena; Punish for Contempt. - The Court shall have
of Customs: Provided, however, That offenses or felonies mentioned in this the power to administer oaths, receive evidence, summon witnesses by subpoena duces tecum,
paragraph where the principal amount o taxes and fees, exclusive of charges subject in all respects to the same restrictions and qualifications as applied in judicial proceedings of
and penalties, claimed is less than One million pesos (P1,000,000.00) or where a similar nature. The Court shall, in accordance with Rule seventy-one of the Rules of Court, have
there is no specified amount claimed shall be tried by the regular Courts and the power to punish for contempt for the same causes, under the same procedure and with the same
the jurisdiction of the CTA shall be appellate. Any provision of law or the penalties provided therein."
Rules of Court to the contrary notwithstanding, the criminal action and the
corresponding civil action for the recovery of civil liability for taxes and Section 9. Section 11 of the same Act is hereby amended to read as follows:
penalties shall at all times be simultaneously instituted with, and jointly
determined in the same proceeding by the CTA, the filing of the criminal "SEC. 11. Who May Appeal; Mode of Appeal; Effect of Appeal. - Any party adversely affected by
action being deemed to necessarily carry with it the filing of the civil action, a decision, ruling or inaction of the Commissioner of Internal Revenue, the Commissioner of
and no right to reserve the filling of such civil action separately from the Customs, the Secretary of Finance, the Secretary of Trade and Industry or the Secretary of
criminal action will be recognized. Agriculture or the Central Board of Assessment Appeals or the Regional Trial Courts may file an
appeal with the CTA within thirty (30) days after the receipt of such decision or ruling or after the
"2. Exclusive appellate jurisdiction in criminal offenses: expiration of the period fixed by law for action as referred to in Section 7(a)(2) herein.

"a. Over appeals from the judgments, resolutions or orders of the "Appeal shall be made by filing a petition for review under a procedure analogous to that provided
Regional Trial Courts in tax cases originally decided by them, in for under Rule 42 of the 1997 Rules of Civil Procedure with the CTA within thirty (30) days from
their respected territorial jurisdiction. the receipt of the decision or ruling or in the case of inaction as herein provided, from the expiration
of the period fixed by law to act thereon. A Division of the CTA shall hear the appeal: Provided,
"b. Over petitions for review of the judgments, resolutions or orders however, That with respect to decisions or rulings of the Central Board of Assessment Appeals and
of the Regional Trial Courts in the exercise of their appellate the Regional Trial Court in the exercise of its appellate jurisdiction appeal shall be made by filing a
jurisdiction over tax cases originally decided by the Metropolitan petition for review under a procedure analogous to that provided for under rule 43 of the 1997 Rules
Trial Courts, Municipal Trial Courts and Municipal Circuit Trial of Civil Procedure with the CTA, which shall hear the case en banc.
Courts in their respective jurisdiction.
"All other cases involving rulings, orders or decisions filed with the CTA as provided for in Section
"c. Jurisdiction over tax collection cases as herein provided: 7 shall be raffled to its Divisions. A party adversely affected by a ruling, order or decision of a
Division of the CTA may file a motion for reconsideration of new trial before the same Division of
 the CTA within fifteens (15) days from notice thereof: Provide, however, That in criminal cases, the Section 14. Retention of Personnel; Security of Tenure; Upgrading of Positions and Salaries. - All
general rule applicable in regular Courts on matters of prosecution and appeal shall likewise apply. existing permanent personnel of the CTA shall not be adversely affected by this Act. They shall continue in
office and shall not be removed or separated from the service except for cause as provided for by existing
"No appeal taken to the CTA from the decision of the Commissioner of Internal Revenue or the laws. Further, the present positions and salaries of personnel shall be upgraded to the level of their counterparts
Commissioner of Customs or the Regional Trial Court, provincial, city or municipal treasurer or the in the Court of Appeals.
Secretary of Finance, the Secretary of Trade and Industry and Secretary of Agriculture, as the case
may be shall suspend the payment, levy, distraint, and/or sale of any property of the taxpayer for the Section 15. Transitory Provisions. - In consonance with the above provision, the incumbent
satisfaction of his tax liability as provided by existing law: Provided, however, That when in the Presiding Judge and Associate Judges shall comprise a Division pending the constitution of the entire Court.
opinion of the Court the collection by the aforementioned government agencies may jeopardize the
interest of the Government and/or the taxpayer the Court any stage of the proceeding may suspend Section 16. Appropriations. - The amount necessary to carry out the provisions of this Act shall be
the said collection and require the taxpayer either to deposit the amount claimed or to file a surety included in the General Appropriations Act of the year following its enactment into law and thereafter.
bond for not more than double the amount with the Court.
Section 17. Repealing Clause. - All laws, executive orders, executive issuances or letter of
"In criminal and collection cases covered respectively by Section 7(b) and (c) of this Act, the instructions, or any part thereof, inconsistent with or contrary to the provisions of this Act are hereby deemed
Government may directly file the said cases with the CTA covering amounts within its exclusive repealed, amended or modified accordingly.
and original jurisdiction."
Section 18. Separability Clause. - If for any reason, any section or provision of this Act shall be
Section 10. Section 13 of the same Act is hereby amended to read as follows: declared unconstitutional or invalid, the other parts thereof not affected thereby shall remain valid.

"SEC. 13. Decision, Maximum Period for Termination of Cases. - Cases brought before the Court Section 19. Effectivity Clause - This Act shall take effect after fifteen (15) days following its
shall be decided in accordance with Section 15, paragraph (1), Article VIII (Judicial Department) of publication in at least (2) newspapers of general circulation.
the 1987 Constitution. Decisions of the Court shall be in writing, stating clearly and distinctly the
facts and the law on which they are based, and signed by the Justices concurring therein. The Court
shall provide for the publication of its decision in the Official Gazette in such form and manner as
may best be adopted for public information and use.
REPUBLIC ACT No. 9503             June 12, 2008
"The Justices of the Court shall each certify on their applications for leave, and upon salary
Further amending Sec. 1 and 2 of RA 1125
vouchers presented by them for payment, or upon the payrolls under which their salaries are paid,
that all proceedings, petitions and motions which have been submitted to the Court for AN ACT ENLARGING THE ORGANIZATIONAL STRUCTURE OF THE COURT OF TAX
determination or decision for a period required by the law or the Constitution, as the case may be, APPEALS, AMENDING FOR THE PURPOSE CERTAIN SECTIONS OF THE LAW CREATING
have been determined or decided by the Court on or before the date of making the certificate, and no THE COURT OF TAX APPEALS, AND FOR OTHER PURPOSES
leave shall be granted and no salary shall be paid without such certificate."
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
Section 11. Section 18 of the same Act is hereby amended as follows:
SECTION 1. Section 1 of Republic Act No. 1125, as amended, is hereby further amended to read
"SEC. 18. Appeal to the Court of Tax Appeals En Banc. - No civil proceeding involving matter as follows:
arising under the National Internal Revenue Code, the Tariff and Customs Code or the Local
Government Code shall be maintained, except as herein provided, until and unless an appeal has "SECTION 1. Court; Justices, Qualifications; Salary; Tenure. - There is hereby created a Court of
been previously filed with the CTA and disposed of in accordance with the provisions of this Act. Tax Appeals (CTA) which shall be of the same level as the Court of Appeals, possessing all the
inherent powers of a Court of Justice, and shall consist of a Presiding Justice and eight (8) Associate
"A party adversely affected by a resolution of a Division of the CTA on a motion for Justices. The incumbent Presiding Judge and Associate Judges shall continue in office and bear the
reconsideration or new trial, may file a petition for review with the CTA en banc." new titles of Presiding Justice and Associate Justices. The Presiding Justices and the two (2) most
Senior Associate Justices, all of whom are incumbent, shall serve as chairmen of the three (3)
"SEC. 19. Review by Certiorari. - A party adversely affected by a decision or ruling of the CTA en
Divisions. The other three (3) incumbent Associate Justices and the three (3) additional Associate
banc may file with the Supreme Court a verified petition for review on certiorari pursuant to Rule
Justices shall serve as members of the Divisions. The additional three (3) Justices as provided herein
45 of the 1997 Rules of Civil Procedure."
and the succeeding members of the Court shall be appointed by the President upon nomination by
Section 13. Distraint of Personal Property and/or Levy on Real Property. - Upon the issuance of any the Judicial and Bar Council. The Presiding Justice shall be so designated in his appointment, and
ruling, order or decision by the CTA favorable to the national government, the CTA shall issue an order the Associate Justices shall have precedence according to the date of their respective appointment or
authorizing the Bureau of Internal Revenue, through the Commissioner to seize and distraint any goods, when the appointments of two (2) or more of them shall bear the same date, according to the order
chattels, or effects, and the personal property, including stocks and other securities, debts, credits, bank in which their appointments were issued by the President. They shall have the same qualifications,
accounts, and interests in and rights to personal property and/or levy the real property of such persons in rank, category, salary, emoluments and other privileges, be subject to the same inhibitions and
sufficient quantity to satisfy the tax or charge together with any increment thereto incident to delinquency. disqualifications, and enjoy the same retirement and other benefits as those provided for under
This remedy shall not be exclusive and shall not preclude the Court from availing of other means under the existing laws for the Presiding Justice and Associate Justices of the Court of Appeals.
Rules of Court.
 "Whenever the salaries of the Presiding Justice and the Associate Justices of the Court of Appeals
are increased, such increases in salaries shall be deemed correspondingly extended to and enjoyed
by the Presiding Justice and Associate Justices of the CTA.

"The Presiding Justice and Associate Justices shall hold office during good behavior, until they
reach the age of seventy (70), or become incapacitated to discharge the duties of their office, unless
sooner removed for the same causes and in the same manner provided by law for members of the
judiciary of equivalent rank."

SEC. 2. Section 2 of the same Act, as amended, is hereby further amended, to reach as
Sandiganbayan
follows:

"SEC. 2. Sitting En Banc or Division; Quorum; Proceedings. - The CTA may sit en banc or in three PRESIDENTIAL DECREE No. 1606 December 10, 1978
(3) Divisions, each Division consisting of three (3) Justices.

"Five (5) Justices shall constitute a quorum for sessions en banc and two (2) Justices for sessions of REVISING PRESIDENTIAL DECREE NO. 1486 CREATING A SPECIAL COURT TO BE KNOWN
a Division. Provided, That when the required quorum cannot be constituted due to any vacancy, AS "SANDIGANBAYAN" AND FOR OTHER PURPOSES
disqualification, inhibition, disability, or any other lawful cause, the Presiding Justice shall
designate any Justice of other Divisions of the Court to sit temporarily therein. WHEREAS, the new Constitution declares that a public office is a public trust and ordains that public officers
and employees shall serve with the highest degree of responsibility, integrity, loyalty and efficiency and shall
"The affirmative votes of five (5) members of the Court en banc shall be necessary to reverse a remain at all times accountable to the people;
decision of a Division but a simple majority of the Justices present necessary to promulgate a
resolution or decision in all other cases or two (2) members of a Division, as the case may be, shall
be necessary for the rendition of a decision or resolution in the Division Level." WHEREAS, to attain the highest norms of official conduct required of public officers and employees, Section
5, Article XIII of the New Constitution provides for the creation of a special court to be known as
SEC. 3. Appropriations. - The amount of Twenty million pesos (20,000,000.00) necessary to carry Sandiganbayan;
out the provisions of this Act shall be appropriated immediately to be generated from whatever source that are
available in the National Treasury, based on a special supplemental budget to be submitted to the Department NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in
of Budget and Management (DBM) which shall not exceed the herein appropriation. me vested by the Constitution, do hereby order and decree as follows:
SEC. 4. Repealing Clause. - - All laws, executive orders, executive issuances or letters of
instruction or any part thereof inconsistent with or contrary to the provisions of this Act are hereby deemed Section 1. Sandiganbayan; composition; qualifications; tenure; removal and composition. A special
repealed, amended or modified accordingly. court, of the same level as the Court of Appeals and possessing all the inherent powers of a court of justice, to
be known as the Sandiganbayan is hereby created composed of a Presiding Justice and eight Associate Justices
SEC. 5. Separability Clause. - If, for any reason, any section or provision of this Act shall be who shall be appointed by the President.
declared unconstitutional or invalid, the other parts thereof not affected thereby shall remain valid.

SEC. 6. Effectivity Clause. - This Act shall take effect after fifteen (15) days following its No person shall be appointed Presiding Justice or Associate Justice of the Sandiganbayan; unless he
publication in at least two (2) newspapers of general circulation. is a natural-born citizen of the Philippines, at least 40 years of age and for at least ten years has been a judge of
a court of record or been engaged in the practice of law in the Philippines or has held office requiring
admission to the bar as a pre-requisite for a like period.

The Presiding Justice shall be so designated in his commission and the other Justices shall have
precedence according to the dates of their respective commissions, or, when the commissions of two or more
of them shall bear the same date, according to the order in which their commissions have been issued by the
President.

The Presiding Justice and the Associate Justices shall not be removed from office except on
impeachment upon the grounds and in the manner provided for in Sections 2, 3 and 4 of Article XIII of the
1973 Constitution.

The Presiding Justice shall receive an annual compensation of P60,000.00 and each Associate
Justice P55,000.00 which shall not be diminished during their continuance in office. They shall have the same
rank, privileges and other emoluments, be subject to the same inhibitions and disqualifications, and enjoy the
same retirement and other benefits as those provided for under existing laws of the Presiding Justice and the filing of the criminal action being deemed to necessarily carry with it the filing of the civil action, and no
Associate Justices of the Court of Appeals. right to reserve the filing of such action shall be recognized; Provided, however, that, in cases within the
exclusive jurisdiction of the Sandiganbayan, where the civil action had therefore been filed separately with a
regular court but judgment therein has not yet been rendered and the criminal case is hereafter filed with the
Whenever the salaries of the Presiding Justice and the Associate Justices of the Court of Appeals are
increased, such increases in salaries shall be correspondingly extended to and enjoyed by the Presiding Justice Sandiganbayan, said civil action shall be transferred to the Sandiganbayan for consolidation and joint
determination with the criminal action, otherwise, the criminal action may no longer be filed with the
and the Associate Justices of the Sandiganbayan.
Sandiganbayan, its exclusive jurisdiction over the same notwithstanding, but may be filed and prosecuted only
in the regular courts of competent jurisdiction; Provided, further, that, in cases within the concurrent
They shall hold office until they reach the age of 65 years or become incapacitated to discharge the duties of jurisdiction of the Sandiganbayan and the regular courts, where either the criminal or civil action is first filed
their office. with the regular courts, the corresponding civil or criminal action, as the case may be, shall only be filed with
the regular courts of competent jurisdiction.
Section 2. Official Station; Place of Holding Sessions. The Sandiganbayan shall have its principal
office in the Metro Manila area and shall hold sessions thereat for the trial and determination of all cases filed Excepted from the foregoing provisions, during martial law, are criminal cases against officers and members
with it irrespective of the place where they may have arisen; Provided, however, that the Presiding Justice may of the armed forces in the active service.
authorize any division or divisions of court to hold sessions at any time and place outside Metro Manila to hear
and decide cases emanating from any of the existing judicial districts. Whenever necessary, the Sandiganbayan
Section 5. Proceedings, how conducted; votes required. The unanimous vote of the three justices in
may require the services of the personnel and the use of the facilities of any agency of the Government,
national or local, including the courts of first instance of the province where any of the divisions is holding a division shall be necessary for the pronouncement of a judgment. In the event that the three justices do not
reach a unanimous vote, the Presiding Judge shall designate two other justices from among the members of the
session, and those personnel of such agencies or courts shall be subject to the orders of the Sandiganbayan.
Court to sit temporarily with them, forming a division of five justices, and the concurrence of a majority of
such division shall be necessary for rendering judgment.
Section 3. Divisions of the Courts; Quorum. The Sandiganbayan shall sit in three divisions of three
Justices each. The three divisions may sit at the same time.
Section 6. Maximum period for termination of cases. As far as practicable, the trial of cases before
the Sandiganbayan once commenced shall be continuos until terminated and the judgment shall be rendered
Three Justices shall constitute a quorum for session in division; Provided, that when the required within three (3) months from the date the case was submitted for decision.
quorum cannot be had due to the legal disqualification or temporary disability of a Justice or of a vacancy
occurring therein, the President shall, upon recommendation of the Presiding Justice, designate any Justice of
Section 7. Form, finality and enforcement of decisions. Decisions and final orders of the
the Court of Appeals or Judge of the Court of First Instance or of the Circuit Criminal Court of the judicial
district concerned to sit temporarily therein. Sandiganbayan shall contain complete findings of facts on all issues properly raised before it.

A petition for reconsideration of any final order or decision maybe filed within (15) days from
Section 4. Jurisdiction. The Sandiganbayan shall have jurisdiction over:
(a) Violations of Republic Act No. 3019, as amended, otherwise, known as the Anti-Graft and promulgation or notice of the final order or judgment, and such petition for reconsideration shall be decided
within thirty (30) days from submission thereon.
Corrupt Practices Act, and Republic Act No. 1379;
(b) Crimes committed by public officers and employees including those employed in government-
owned or controlled corporations, embraced in Title VII of the Revised Penal Code, whether simple Decisions and final orders shall be subject to review on certiorari by the Supreme Court in
or complexed with other crimes; and accordance with Rule 45 of the Rules of Court. The Supreme Court shall decide any case on appeal promptly
(c) Other crimes or offenses committed by public officers or employees, including those employed and without the necessity of placing it upon the regular calendar. Whenever, in any case decided, the death
in government-owned or controlled corporations, in relation to their office. penalty shall have been imposed, the records shall be forwarded to the Supreme Court, whether the accused
The jurisdiction herein conferred shall be original and exclusive if the offense charged is punishable shall have appealed or not, for review and judgment, as law and justice shall dictate.
by a penalty higher than prision correccional, or its equivalent, except as herein provided; in other offenses, it
shall be concurrent with the regular courts. Final judgments and orders of the Sandiganbayan shall be executed and enforced in the manner
provided by law.
In case private individuals are charged as co-principals, accomplices or accessories with the public
officers or employees including those employed in government-owned or controlled corporations, they shall be Section 8. Transfer of cases. As of the date of the effectivity of this decree, any case cognizable by
tried jointly with said public officers and employees.
the Sandiganbayan within its exclusive jurisdiction where none of the accused has been arraigned shall be
transferred to the Sandiganbayan.
Where an accused is tried for any of the above offenses and the evidence is insufficient to establish
the offense charged, he may nevertheless be convicted and sentenced for the offense proved, included in that
Section 9. Rule-making Power. The Sandiganbayan shall have the power to promulgate its own
which is charged. rules of procedure and, pending such promulgation, the Rules of Court shall govern its proceedings.

Any provision of law or the Rules of Court to the contrary notwithstanding, the criminal action and
Section 10. Authority over internal affairs. The Sandiganbayan shall administer its own internal
the corresponding civil action for the recovery of civil liability arising from the offense charged shall at all affairs and may adopt such rules governing the constitution of its divisions, the allocation of cases among
times be simultaneously instituted with, and jointly determined in the same proceeding by, the Sandiganbayan,
them, the rotation of justices and other matters relating to its business.
 Section 11. Proceeding free of charge. All proceedings in the Sandiganbayan shall be conducted at Section 1. Title of the Rules. These Rules shall be known and cited as the Rules of the Sandiganbayan.
no cost to the complainant and/or his witnesses.
Section 2. Construction. These Rules shall be liberally construed in order to promote their objectives and to
No criminal information or complaint shall be entertained by the Sandiganbayan except upon a achieve a just, expeditious and inexpensive determination of every action and proceeding before the
certification by the Investigating Prosecutor of the existence of a prima facie case to be determined after a Sandiganbayan.
preliminary investigation conducted in accordance with applicable laws and approved by the Chief Special
Prosecutor.

Section 12. Administrative personnel. The Sandiganbayan shall reelect and appoint such personnel RULE II
as it may deem necessary to discharge its functions under this Decree including a Clerk of Court and three (3) CONTROL OF FUNCTIONS AND SUCCESSION
Deputy Clerks of Court who shall be members of the Bar.
Section 1. Exclusive Control. Except as otherwise provided by the Constitution and Presidential Decree No.
The Clerk of Court shall have an annual compensation of P36,000.00 and the Deputy Clerks of 1606, the Sandiganbayan shall have exclusive control, direction and supervision of all matters pertaining to its
Court, P30,000.00. internal affairs and the operation of its business.

All other subordinate employees of the Sandiganbayan shall be governed by the provisions of the Section 2. Succession in the Office of the Presiding Justice. In case of vacancy in the position of Presiding
Civil Service Law; Provided, that the Sandiganbayan may, by resolution en banc, remove any of them for Justice of the Sandiganbayan or his temporary incapacity to exercise the powers and perform the duties of his
cause. office, the same shall devolve upon the qualified most senior Associate Justices until such incapacity is
removed or another Presiding Justice is appointed and has duly qualified.
Section 13. Report to the President. The Sandiganbayan shall submit an annual report to the
President, including all disbursements of funds entrusted to it, within two months from the end of the Fiscal RULE III
Year. COMPOSITION OF DIVISIONS

Section 14. Funding. There is hereby immediately appropriated the sum of Five Million Pesos Section 1. How Divisions Constituted. The Sandiganbayan shall consist of three divisions which shall be
(P5,000.00) out of any funds in the National Treasury to carry out the provisions of this Decree and thereafter known as the First Division, Second Division, and Third Division, and shall each be composed of Presiding
to be included in the general appropriations act. The appropriations for the Sandiganbayan shall be Justice and the first two Associate Justices in the order of precedence as the respective Chairmen; the next
automatically released in accordance with a schedule submitted by the Sandiganbayan. three Associate Justices in the order of precedence as the respective senior members; and the last three
Associate Justices in the order of precedence as the respective junior members. However, until the entire
Section 15. Separability of Provisions. If for any reason, any section or provision of this Decree is complement of the Sandiganbayan shall have been appointed and qualified, the Presiding justice and the two
Associate Justices first appointed and qualified shall constitute the First Division.
declared to be unconstitutional or invalid, other sections or provisions thereof which are not affected thereby,
shall continue in full force and effect.
Section 2. Vacancy; How Filled. In case of any vacancy in the composition of a division, whether permanent
or temporary, the Presiding Justice may designate an Associate Justice of the Court, to be determined by strict
Section 16. Repealing Clause. This Decree hereby repeals Presidential Decree No. 1486 and all
other provisions of law, General Orders, Presidential Decrees, Letters of Instructions, rules or regulations rotation on the basis of the reverse order of precedence, to sit as a special member of said division with all the
rights and prerogatives of a regular member of said division in the trial and determination of cases assigned
inconsistent herewith.
thereto, unless the operation of the other divisions of the Court will be prejudiced thereby, in which case, the
procedure provided in Section 3, Rule VIII of these Rules shall apply.
Section 17. Effectivity. This Decree shall take effect immediately.
RULE IV
Done in the City of Manila, this 10th day of December, in the year of Our Lord, nineteen hundred FILING OF CASES
and seventy-eight.
Section 1. Proceedings Free of Charge. All proceedings in the Sandiganbayan be conducted at no cost to the
RULES OF THE SANDIGANBAYAN complainant and/or his witnesses.

Pursuant to the provisions of Section 5 of Article XIII of the Constitution of the Philippines, as Section 2. Preliminary Investigation Necessary. No criminal information or complaint shall be entertained by
implemented by Presidential Decree No. 1606, the Sandiganbayan hereby adopts and promulgates the the Sandiganbayan except upon a certification by the investigating Prosecutor of the existence of a prima facie
following rules to govern the conduct of its business. case to be determined after a preliminary investigation conducted in accordance with applicable laws and
approved by the Chief Special Prosecutor.
RULE I
TITLE AND CONSTRUCTION
Section 3. Where Cases Filed. All cases to be filed with the Sandiganbayan shall be filed with the Office of Section 1. How Amount Fixed; Approval. The amount of bail to be posted in cases in the Sandiganbayan shall
the Clerk of Court of the Sandiganbayan which shall be open for the purpose of receiving complaints, be fixed by the Chairman of the division thereof to which they are assigned; and such bail may be approved by
information, motions and the like from eight to twelve o'clock in the morning and twelve thirty to four-thirty any Justice of the Sandiganbayan, but preferably by a Justice of the division concerned: Provided, however,
o'clock in the afternoon, on Mondays to Fridays, except on public or special holidays. That where the accused is arrested, detained or otherwise placed in custody outside the Metropolitan Manila
area, any judge of the Court of First Instance or Circuit Criminal Court may accept and approve the bail for his
appearance before the division to which his case is assigned and release him, and shall inform the division
RULE V
DISTRIBUTION AND CONSOLIDATION OF CASES issuing the order of arrest of his action, forwarding thereto the papers in this case.

Section 2. Condition of the Bail. The condition of the bail is that the accused shall appear and answer the
Section 1. Distribution of Cases. All cases filed with the Sandiganbayan shall be allotted among the three
divisions for hearing and decision by raffle to be conducted by a Raffle Committee composed of the Presiding complaint or information in the division of the Sandiganbayan to which it is assigned or transferred for trial
and submit himself to the orders and processes thereof and, after conviction, if the case is appealed to the
Justice and the two most senior Associate Justices available, on such days as may hereafter be fixed by the
Presiding Justice depending upon the need for such raffle to be made in view of the number of cases filed, with Supreme Court, that he will surrender himself for the execution of such judgment as the Supreme Court may
render; or, that, in case the cause is to be tried anew or remanded for a new trial, he will appear in the division
notice to the interested parties who may, if they so desire, be present therein by themselves or through counsel.
to which it may be remanded and submit himself to the orders and processes thereof.

Section 2. Consolidation of Cases. Cases arising from the same incident on series of incidents, or involving
RULE VIII
common questions of fact and law, may, in the discretion of Sandiganbayan, be consolidated in only one
division. Should the propriety of such consolidation appear upon the filing of the cases concerned and before SESSIONS AND TRIAL
they are raffled, all such cases shall be considered as one case for purposes of the raffle; but, should the
propriety of such consolidation may be affected upon motion of an interested party filed with the division Section 1. How Sessions Held. The Sandiganbayan shall for administrative purposes, sit en banc; and, for the
taking cognizance of the case to be consolidated and, if granted, consolidation shall be made in the division trial and determination of cases, sit in three divisions of three Justices each. The three divisions may sit at the
before which the case with the lowest number is pending. In either case, the division in which consolidation is same time.
effected shall be entitled to be credited in the distribution of cases with the same number of cases transferred to
it to the end that all divisions shall, as much as possible, receive more or less the same number of cases filed
Section 2. Presiding Officer. Sessions of the Sandiganbayan en banc shall be presided by the Presiding Justice;
with the Sandiganbayan. whereas sessions in division shall be presided by the respective Chairman of each division. In the absence of
the Presiding Justice or the Chairman of a division, as the case may be, the Associate Justice attending the
Section 3. Assignment of Cases Permanent. Cases assigned to a division of the Sandiganbayan in accordance session en banc or in division who is first in the order of precedence and able to preside, shall do so.
with these Rules shall remain with said division notwithstanding changes in the composition thereof and all
matters raised therein shall be deemed to be submitted for consideration and adjudication by any and all of the
Section 3. Quorum. Five Justices shall constitute a quorum for sessions en banc, and three Justices for sessions
Justices who are members of the division aforesaid at the time said matters are taken up, irrespective of in division: Provided, That when a quorum and/or the votes required for a resolution or decision of the
whether they were or were not members of the division at the time the case was first assigned thereto:
Sandiganbayan, either en banc or in division, or the trial or hearing of cases cannot be had due to the legal
Provided, however, That only Justices who are members of the division at the time a case is submitted for disqualification or temporary disability of a Justice or of a vacancy occurring therein, the President shall, upon
decision shall take part in the consideration and adjudication of said case, unless any such member thereafter
recommendation of the Presiding Justice, designate any Justice of the Court of Appeals, Judge of the Court of
ceases to be a member of the Sandiganbayan for any reason whatsoever in which case any Justice chosen to First Instance or of the Circuit Criminal Court to sit temporarily therein.
fill the vacancy in accordance with the manner provided in Section 2, Rule III, of these Rules shall participate
in the consideration and adjudication of said case; Provided, lastly, that the Sandiganbayan en banc may, for
special or compelling reasons, transfer cases from one division thereof to another. Section 4. Place of Holding Sessions. Sessions of the Sandiganbayan, whether en banc or in division, shall be
held in the place of its principal office in the Metropolitan Manila area where it shall try and determine all
cases filed with it irrespective of the place where they may have arisen: Provided, however, That the Presiding
RULE VI Justice may authorize any division or divisions of the Court to hold sessions at any time and place outside
PROCESSES
Metropolitan Manila to hear and decide cases emanating therefrom. For this purpose and whenever necessary,
the Sandiganbayan may require the services of the personnel and the use of the facilities of any agency of the
Processes and writs of the Sandiganbayan which by their nature or by provision of existing laws or the Rules Government, national or local, including the Courts of First Instance or Circuit Criminal Court of the province
of Court are to be issued under the signature of a Judge or a Justice shall be signed by the Chairman of the or city where any of the divisions is holding session, and those personnel of such agencies or courts shall be
division concerned: Provided, That if there is an urgent necessity for the issuance thereof before the case is subject to the orders of the Sandiganbayan.
raffled to a division, the same shall be signed by the Presiding Justice. In the absence of the Presiding Justice
or the Chairman aforesaid, the process or writ shall be signed by the senior Associate Justice in the Section 5. Time of Holding Sessions. Sessions of the Sandiganbayan en banc may be called at any time by the
Sandiganbayan or in the divisions concerned, respectively. All other processes or writs issued upon authority
Presiding Justice or at the instance at least five Associate Justices. Sessions for the trial of cases cognizable by
of the Sandiganbayan or a division thereof shall be signed by the Clerk of Court or, in his absence, by the it shall be held on such days and at such times as the divisions thereof may, by order and upon notice to the
Deputy Clerk of Court of the division concerned.
parties concerned, fix.

RULE VII
BAIL
Section 6. Pre-trial Inquest. After the arraignment of an accused who pleads not guilty, the division concerned RULE XI
shall, without prejudice to the invocation by the accused of his constitutional rights, direct the prosecutor and PROMULGATION OF JUDGMENT
the accused and his counsel to appear before any of the Justices thereof for a conference to consider;
A judgment of a division of the Sandiganbayan shall be promulgated by reading the judgment or sentence in
(a) Admissions of facts about which there can be no dispute; the presence of the accused and any Justice of the division which rendered the same: Provided, That, if the
(b) Marking for identification of documentary or real evidence of the parties; accused is confined or detained in a place outside Metropolitan Manila or of the city or province in which any
(c) Waiver of objections to admissibility of evidence; division of the Sandiganbayan is sitting at the time of such promulgation, the judgment may, upon delegation
(d) Procedure on objections where there are multiple counsel; by the division concerned be promulgated by any judge of the Court of First Instance or Circuit Criminal Court
(e) Order of presentation of evidence and arguments where there are multiple accused; having jurisdiction over the place of confinement or detention, in which event the Court so promulgating the
(f) Order of cross-examination where there are multiple accused; and judgment shall have authority to accept and approve the appeal bond.
(g) Such other matter as will promote a fair and expeditious termination of the trial.
RULE XII
After the pre-trial inquest, a pre-trial order shall be issued by the Associate Justice presiding the conference PETITION FOR RECONSIDERATION
reciting the actions and/or proceedings taken thereat, the admissions of facts made, the documents and real
evidence marked, and the agreement entered into by the parties as to any of the matters taken up therein. Such Within fifteen (15) days from the promulgation or notice of a judgment or final order of a division of the
order shall limit the issues for trial to those not disposed of by the admissions or agreements of the parties and
Sandiganbayan, unless said judgment or order had in the meantime otherwise attained finality, a petition for
when entered shall blind the parties and control the course of the action during the trial, on appeal, and in post- the reconsideration thereof may be filed upon the grounds, in the form and subject to the requirements, for
conviction proceedings, unless modified by the division concerned before trial to prevent manifest injustice.
motions for new trial in criminal cases under Rule 121 of the Rules of Court, and such petition for
reconsideration shall be decided within thirty (30 days from submission thereof.
RULE IX
MOTIONS
RULE XIII
REVIEW OF JUDGMENTS AND FINAL ORDERS
Section 1. Motion Day. The first hours of the morning session of the divisions every Friday shall be devoted to
the hearing of motions, unless, upon motion of an interested party and for special reasons, the division
Section 1. Method of Review. A party may appeal from a judgment or final order of a division of the
concerned shall fix another day for the hearing of any particular motion. Sandiganbayan by filing with the Supreme Court a petition for certiorari in accordance with Rule 45 of Rules
of Court and by serving a copy thereof to the Sandiganbayan.
Section 2. Resolution on Interlocutory or Incidental Motions. Rulings on all written motions submitted to the
Sandiganbayan or any division thereof for resolution shall be reached in consultation among the Justices Whenever, in any case decided, the death penalty shall have been imposed, the records shall be forwarded to
participating in the consideration thereof: Provided, however, That rulings on oral motions or on objections
the Supreme Court, whether the accused shall have appealed or not, for review and judgment, as law and
made in the course of the trial or hearing shall be handed down by the Chairman of the division concerned. justice shall dictate.

RULE X
Section 2. Bail Pending Appeal. An accused who has been released on bail shall not committed to jail upon
JUDGMENT conviction pending the expiration of the period for appeal or pending an appeal seasonably taken, except when
the penalty imposed is reclusion perpetua or death, in which case, the accused may forthwith be committed to
Section 1. Votes Necessary to Decide. The unanimous vote of three Justices in a division shall be necessary for jail after promulgation of the sentence. The division of the Sandiganbayan concerned, however, may, for good
the rendition of a judgment or order. In the event that the three Justices do not reach a unanimous vote, the cause, cancel the bond or increase the amount of bail and commit the accused into custody pending appeal,
Presiding Justice shall designated by raffle two Justices from among the other members of the Sandiganbayan unless he gives bail in the increased amount. The surely shall also be responsible for the surrender or the
to sit temporarily with them forming a special division of five Justices, and the vote of a majority of such accused after judgment shall have become final.
special division shall be necessary for the rendition of a judgment or order.
RULE XIV
Section 2. Procedure in Deciding Cases. The conclusions of a division of the Sandiganbayan in any case PUBLICATION OF DECISIONS
submitted to it for decision shall be reached in consultation before the case is assigned to a Justice for the
writing of the opinion of the division. Any Justice dissenting from a judgment shall state the reasons for his With the consent of the respective writers thereof, the decisions of the Sandiganbayan may be published in the
dissent.
Official Gazette in the language in which they have been originally written. The syllabi for the decisions shall
be prepared by the Clerk of Court in consultation with writers thereof.
Section 3. Maximum Period to Decide Cases. The judgment or final order of a division of the Sandiganbayan
shall be rendered within three (3) months from the date the case was submitted for decision.
RULE XV
APPLICABILITY OF THE RULES OF COURT
Section 4. Form of judgment and final order of a division of the Sandiganbayan shall contain complete
findings of fact and a statement of the law on all issues properly raised before it.
Except as otherwise herein provided or as may hereafter be modified from time to time by the Sandiganbayan
and insofar as practicable, the Rules of Court shall govern proceedings in the Sandiganbayan.

RULE XVI REPUBLIC ACT No. 7975

SEAL OF THE SANDIGANBAYAN
AN ACT TO STRENGTHEN THE FUNCTIONAL AND STRUCTURAL ORGANIZATION OF THE
The seal of the Sandiganbayan shall be of standard size, circular in form, consisting of two concentric circles SANDIGANBAYAN, AMENDING FOR THAT PURPOSE PRESIDENTIAL DECREE NO. 1606, AS
as its margin, with the inscription, running from left to right, on the upper margin of the word AMENDED
"Sandiganbayan" and on the lower margin of the words "Republika ng Pilipinas"; with 16 stars, representing Section 1. Section 3 of Presidential Decree No. 1606, as amended by Executive Order No. 184, is
the existing 16 judicial districts, immediately along the outer edge of the inner circle; and with a design at the hereby further amended to read as follows:
center of a triangle, with a trisected area composed of the national colors of white on its upper part, blue on the
left and red on the right, with the words "KATAPATAN" on the right side, "KAPANAGUTAN" on the left "Sec. 3. Division of the Court; Quorum. - The Sandiganbayan shall sit in five (5) divisions of three justices
side, and "KARANGALAN" on the base; a star in each corner of the triangle representing Luzon, Visayas and each. The five (5) may sit at the same time.
Mindanao; and a bolo inside the triangle on which is superimposed a balance.
"The first three divisions shall be stationed in the Metro Manila area, the fourth division shall be in Cebu City
RULE XVII for cases coming from the Visayas region, and the fifth division shall be in Cagayan de Oro City for cases
SEPARABILITY CLAUSE coming from the Mindanao region.

"Three Justices shall constitute a quorum for sessions in divisions: Provided, That when the required quorum
If, for any reason, any section or provision of these Rules shall be held to be unconstitutional or invalid, no for the particular division cannot be had due to the legal disqualification or temporary disability of a Justice or
other section or provision thereof shall be effected thereby. of a vacancy occurring therein, the Presiding Justice may designate an Associate Justice of the Court, to be
determined by strict rotation on the basis of the reverse order of precedence, to sit as a special member of said
division with all the rights and prerogatives of a regular member of said division in the trial and determination
RULE XVIII
EFFECTIVITY of a case or cases assigned thereto, unless the operation of the court will be prejudiced thereby, in which case,
the President shall, upon the recommendation of the Presiding Justice, designate any Justice or Justices of the
Court of Appeals to sit temporarily therein."
The Rules shall take effect upon approval.
Section 2. Section 4 of the same Decree is hereby further amended to read as follows:
Done in the City of Manila, this 10th day of January, in the year of Our Lord, nineteen hundred and seventy- "Sec. 4. Jurisdiction. The Sandiganbayan shall exercise original jurisdiction in all cases involving:
nine
"a. Violations of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and
Corrupt Practices Act, Republic Act No. 1379, and Chapter II, Section 2, Title VII of the Revised
Penal Code, where one or more of the principal accused are officials occupying the following
positions in the government, whether in permanent, acting or interim capacity, at the time of the
commission of the offense:

"(1) Officials of the executive branch occupying the positions of regional director and
higher, otherwise classified as grade 27 and higher, of the Compensation and Position
Classification Act of 1989 (Republic Act No. 6758), specifically including:

"(a) Provincial governors, vice-governors, members of the sangguniang

panlalawigan, and provincial treasurers, assessors, engineers, and other
provincial department heads;

"(b) City mayors, vice-mayors, members of the sangguniang panlungsod, city

treasurers, assessors, engineers, and other city department heads;

"(c) Officials of the diplomatic service occupying the position of consul and
higher;

"(d) Philippine army and air force colonels, naval captains, and all officers of
higher rank;

"(e) PNP chief superintendent and PNP officers of higher rank;

 "(f) City and provincial prosecutors and their assistants, and officials and therein has not yet been rendered, and the criminal case is hereafter filed with the Sandiganbayan or the
prosecutors in the Office of the Ombudsman and special prosecutor; appropriate court, said civil action shall be transferred to the Sandiganbayan or the appropriate court as the
case may be, for consolidation and joint determination with the criminal action, otherwise the separate civil
"(g) Presidents, directors or trustees, or managers of government-owned or action shall be deemed abandoned."
controlled corporations, state universities or educational institutions or
foundations; Section 3. Section 7 of the same decree is hereby amended to read as follows:

"(2) Members of Congress and officials thereof classified as Grade "27" and up under the "Sec. 7. Form, Finality and Enforcement of Decisions. - All decisions and final orders determining the merits
Compensation and Position Classification Act of 1989; of a case or finally disposing of the action or proceedings of the Sandiganbayan shall contain complete
findings of the facts and the law on which they are based, on all issues properly raised before it and necessary
"(3) Members of the judiciary without prejudice to the provisions of the Constitution; in deciding the case.
"(4) Chairmen and members of Constitutional Commissions, without prejudice to the "A petition for reconsideration of any final order or decision may be filed within fifteen (15) days from
provisions of the Constitution; and promulgation or notice of the final order or judgment, and such motion for reconsideration shall be decided
within thirty (30) days from submission thereon.
"(5) All other national and local officials classified as Grade "27" and higher under the
Compensation and Position Classification Act of 1989; "Decisions and final orders of the Sandiganbayan shall be appealable to the Supreme Court by petition for
review on certiorari raising pure questions of law in accordance with Rule 45 of the Rules of Court. Whenever,
"b. Other offenses or felonies committed by the public officials and employees mentioned in in any case decided by the Sandiganbayan, the penalty of reclusion perpetua or higher is imposed, the decision
subsection (a) of this section in relation to their office. shall be appealable to the Supreme Court in the manner prescribed in the Rules of Court. In case the penalty
imposed is death, review by the Supreme Court shall be automatic, whether or not the accused filed an appeal.
"c. Civil and criminal cases filed pursuant to and in connection with Executive Order Nos. 1, 2, 14
and 14-A. "Judgments and orders of the Sandiganbayan shall be executed and enforced in the manner provided by law.
"In cases where none of the principal accused are occupying positions corresponding to salary grade "27" or "Decisions and final orders of other courts, in cases cognizable by said courts under this Act shall be
higher, as prescribed in the said Republic Act No. 6758, or PNP officers occupying the rank of superintendent appealable to the Sandiganbayan within fifteen (15) days from promulgation or notice to the parties."
or higher, or their equivalent, exclusive jurisdiction thereof shall be vested in the proper Regional Trial Court,
Metropolitan Trial Court, Municipal Trial Court, and Municipal Circuit Trial Court, as the case may be, Section 4. Section 9 of the same Decree is hereby amended to read as follows:
pursuant to their respective jurisdictions as provided in Batas Pambansa Blg. 129.
"Sec. 9. Rules of Procedure. - The Rules of Court promulgated by the Supreme Court shall apply to all cases
"The Sandiganbayan shall exercise exclusive appellate jurisdiction on appeals from the final judgments, and proceedings filed with the Sandiganbayan. The Sandiganbayan shall have no power to promulgate its own
resolutions or orders of regular courts where all the accused are occupying positions lower than salary grade rules of procedure, except to adopt internal rules governing the allotment of cases among the divisions, the
"27", or not otherwise covered by the preceding enumeration. rotation of justices among them, and other matters relating to the internal operations of the court which shall be
inforced until repealed or modified by the Supreme Court."
"The Sandiganbayan shall have exclusive original jurisdiction over petitions for the issuance of the writs of
mandamus, prohibition, certiorari, habeas corpus, injunction, and other ancillary writs and processes in aid of Section 5. Section 10 of the same Decree is hereby repealed.
its appellate jurisdiction: Provided, That the jurisdiction over these petitions shall not be exclusive of the
Supreme Court. Section 6. Presidential Decrees Nos. 1486, 1606 and 1861, Executive Orders Nos. 101 and 184 and
all other laws, decrees, orders and rules of which are inconsistent therewith are hereby repealed or modified
"The procedure prescribed in Batas Pambansa Blg. 129, as well as the implementing rules that the Supreme accordingly.
Court has promulgated and may hereafter promulgate, relative to appeals/petitions for review to the Court of
Appeals shall apply to appeals and petitions for review filed with the Sandiganbayan. In all cases elevated to Section 7. Upon the effectivity of this Act, all criminal cases in which trial has not begun in the
the Sandiganbayan and from the Sandiganbayan to the Supreme Court, the office of the Ombudsman, through Sandiganbayan shall be referred to the proper courts.
its special prosecutor, shall represent the people of the Philippines except in cases filed pursuant to Executive
Orders Nos. 1, 2, 14 and 14-A. Section 8. This Act shall take effect fifteen (15) days following its publication in the Official
Gazette or in two (2) national newspapers of general circulation.
"In case private individuals are charged as co-principals, accomplices or accessories with the public officers or
employees, including those employed in government-owned or controlled corporations, they shall be tried Approved: 30 March 1995
jointly with said public officers and employees in the proper courts which shall exercise exclusive jurisdiction
over them.

"Any provision of law or Rules of Court to the contrary notwithstanding, the criminal action and the
corresponding civil action for the recovery of civil liability arising from the offense charged shall at all times
be simultaneously instituted with, and jointly determined in, the same proceeding by the Sandiganbayan or the
appropriate courts, the filing of the criminal action being deemed to necessarily carry with it the filing of the
civil action, and no right to reserve the filing of such civil action separately from the criminal action shall be
recognized: Provided, however, That where the civil action had heretofore been filed separately but judgment
 Section 4. Section 4 of the same decree is hereby further amended to read as follows:

"a. Violations of Republic Act No. 3019, as amended, otherwise known as the Anti-graft and
Corrupt Practices Act, Republic Act No. 1379, and Chapter II, Section 2, Title VII, Book II of the
Revised Penal Code, where one or more of the accused are officials occupying the following
positions in the government whether in a permanent, acting or interim capacity, at the time of the
commission of the offense:

"(1) Officials of the executive branch occupying the positions of regional director and
higher, otherwise classified as Grade '27' and higher, of the Compensation and Position
Classification Act of 1989 (Republic Act No. 6758), specifically including:

"(a) Provincial governors, vice-governors, members of the sangguniang

panlalawigan and provincial treasurers, assessors, engineers and other
provincial department heads;

"(b) City mayors, vice-mayors, members of the sangguniang panlungsod, city

treasurers, assessors engineers and other city department heads;

"(c) Officials of the diplomatic service occupying the position of consul and
higher;

"(d) Philippine army and air force colonels, naval captains, and all officers of
REPUBLIC ACT No. 8249             February 5, 1997 higher rank;

AN ACT FURTHER DEFINING THE JURISDICTION OF THE SANDIGANBAYAN, AMENDING "(e) Officers of the Philippine National Police while occupying the position of
FOR THE PURPOSE PRESIDENTIAL DECREE NO. 1606, AS AMENDED, PROVIDING FUNDS provincial director and those holding the rank of senior superintendent or
THEREFOR, AND FOR OTHER PURPOSES higher;

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: "(f) City and provincial prosecutors and their assistants, and officials and
prosecutors in the Office of the Ombudsman and special prosecutor;
Section 1. The first paragraph of Section 1 of Presidential Decree No. 1606, as amended, is hereby further
amended to read as follows: "(g) Presidents, directors or trustees, or managers of government-owned or -
controlled corporations, state universities or educational institutions or
"SECTION 1. Sandiganbayan; Composition, Qualifications; Tenure; Removal and Compensation. - foundations;
A special court, of the same level as the Court of Appeals and possessing all the inherent powers of
a court ofjustice, to be known as the Sandiganbayan is hereby created composed of a presiding "(2) Members of Congress and officials thereof classified as Grade'27'and up under the
justice and fourteen associate justices who shall be appointed by the President." Compensation and Position Classification Act of 1989;

Section 2. Section 2 of the same decree is hereby further amended to read as follows: "(3) Members of the judiciary without prejudice to the provisions of the Constitution;

"SECTION 2. Official Station; Place of Holding Sessions. - The Sandiganbayan shall have its "(4) Chairmen and members of Constitutional Commissions, without prejudice to the
principal office in the Metro Manila area and shall hold sessions thereat for the trial and provisions of the Constitution; and
determination of cases filed with it: Provided, however, That cases originating from the principal
geographical regions of the country, that is, from Luzon, Visayas or Mindanao, shall be heard in "(5) All other national and local officials classified as Grade'27'and higher under the
their respective regions of origin except only when the greater convenience of the accused and of Compensation and Position Classification Act of 1989.
the witnesses, or other compelling considerations require the contrary, in which instance a case
originating from one geographical region may be heard in another geographical region: Provided, "b. Other offenses orfelonies whether simple or complexed with other crimes committed by the
further, That for this purpose the presiding justice shall authorize any divisions of the court to hold public officials and employees mentioned in subsection a of this section in relation to their office.
sessions at any time and place outside Metro Manila and, where the interest of justice so requires,
"c. Civil and criminal cases filed pursuant to and in connection with Executive Order Nos. 1, 2, 14
outside the territorial boundaries of the Philippines. The Sandiganbayan may require the services of
and 14-A, issued in 1986.
the personnel and the use of facilities of the courts or other government offices where any of the
divisions is holding sessions and the personnel of such courts or offices shall be subject to the orders "In cases where none of the accused are occupying positions corresponding to salary grade '27' or
of the Sandiganbayan." higher, as prescribed in the said Republic Act No. 6758, or military or PNP officers mentioned
above, exclusive original jurisdiction thereof shall be vested in the proper regional trial court,
Section 3. The second paragraph of Section 3 of the same decree is hereby deleted.
metropolitan trial court, municipal trial court and municipal circuit trial court ' as the case may be,
pursuant to their respective jurisdiction as provided in Batas Pambansa Blg. 129, as amended.
 "The Sandiganbayan shall exercise exclusive appellate jurisdiction over final judgments, resolutions "Decisions and final orders of other courts in cases cognizable by said courts under this decree as
or orders or regional trial courts whether in the exercise of their own original jurisdiction orof their well as those rendered by them in the exercise of their appellate jurisdiction shall be appealable to,
appellate jurisdiction as herein provided. or be reviewable by, the Sandiganbayan in the manner provided by Rule 122 of the Rules of the
Court.
"The Sandiganbayan shall have exclusive original jurisdiction over petitions for the issuance of the
writs of mandamus, prohibition, certiorari, habeas corpus, injunctions, and other ancillary writs and "In case, however, the imposed penalty by the Sandiganbayan or the regional trial court in the
processes in aid of its appellate jurisdiction and over petitions of similar nature, including quo proper exercise of their respective jurisdictions, is death, review by the Supreme Court shall be
warranto, arising or that may arise in cases filed or which may be filed under Executive Order Nos. automatic, whether or not accused files an appeal."
1,2,14 and 14-A, issued in 1986: Provided, That the jurisdiction over these petitions shall not be
exclusive of the Supreme Court. Section 6. Appropriations. - The amount necessary to carry out the initial implementation of this Act shall be
charged against the current fiscal year appropriations of the Sandiganbayan. Thereafter, such sums as may be
The procedure prescribed in Batas Pambansa Blg. 129, as well as the implementing rules that the needed for its continued implementation shall be included in the annual General Appropriations Act.
Supreme Court has promulgated and may hereafter promulgate, relative to appeals/petitions for
review to the Court of Appeals, shall apply to appeals and petitions for review filed with the Section 7. Transitory Provision. - This Act shall apply to all cases pending in any court over which trial has
Sandiganbayan. In all cases elevated to the Sandiganbayan and from the Sandiganbayan to the not begun as of the approval hereof
Supreme Court, the Office of the Ombudsman, through its special prosecutor, shall represent the
People of the Philippines, except in cases filed pursuant to Executive Order Nos. 1, 2, 14 and 14-A, Section 8. Separability of Provisions. - If for any reason any provision of this Act is declared unconstitutional
issued in 1986. or invalid, such parts or portions not affected thereby shall remain in full force and effect.

"In case private individuals are charged as co-principals, accomplices or accessories with the public Section 9. Repealing Clause. - All acts, decrees, general orders and circulars, or parts thereof inconsistent
officers or employees, including those employed in govemment-owned or controlled corporations, with the provisions of this Act are hereby repealed or modified accordingly.
they shall be tried jointly with said public officers and employees in the proper courts which shall
Section 10. Effectivity. - This Act shall take effect fifteen (15) days after its complete publication in at least
exercise exclusive jurisdiction over them.
two (2) newspapers of general circulation.
"Any provisions of law or Rules of Court to the contrary notwithstanding, the criminal action and
Approved:
the corresponding civil action for the recovery of civil liability shall at all times be simultaneously
instituted with, and jointly determined in, the same proceeding by the Sandiganbayan or the
appropriate courts, the filing of the criminal action being deemed to necessarily carry with it the
filing of the civil action, and no right to reserve the filing of such civil action separately from the
criminal action shall be recognized: Provided, however, That where the civil action had therefore
been filed separately but judgment therein has not yet been rendered, and the criminal case is
hereafter filed with the Sandiganbayan or the appropriate court, said civil action shall be transferred
to the Sandiganbayan or the appropriate court, as the case may be, for consolidation and joint
determination with the criminal action, otherwise the separate civil action shall be deemed
abandoned."

Section 5. Section 7 of the same decree is hereby further amended to read as follows:

'SECTION 7. Form, Finality and Enforcement of Decisions. - All decisions and final orders
determining the merits of a case or finally disposing of the action or proceedings of the
Sandijanbayan shall contain complete findings of the facts and the law on which they are based, on
all issues properly raised before it and necessary in deciding the case.

"A petition for reconsideration of any final order or decision may be filed within fifteen (15) days
from promulgation or notice of the final order on judgment, and such motion for reconsideration
shall be decided within thirty (30) days from submission thereon.

"Decisions and final orders ofthe Sandiganbyan shall be appealable to the Supreme Court by
petition for review on certiorari raising pure questions of law in accordance with Rule 45 of the
Rules of Court. Whenever, in any case decided by the Sandiganbayan, the penalty of reclusion
perpetua, life imprisonment or death is imposed, the decision shall be appealable to the Supreme
Court in the manner prescribed in the Rules of Court. Regional Trial Courts

"Judgments and orders of the Sandiganbayan shall be executed and enforced in the manner provided [ REPUBLIC ACT NO. 11576, July 30, 2021 ]
by law.
AN ACT FURTHER EXPANDING THE JURISDICTION OF THE METROPOLITAN TRIAL
COURTS, MUNICIPAL TRIAL COURTS IN CITIES, MUNICIPAL TRIAL COURTS, AND
 MUNICIPAL CIRCUIT TRIAL COURTS, AMENDING FOR THE PURPOSE BATAS PAMBANSA "(2) In all civil actions which involve the title to, or possession of, real property, or any
BLG. 129, OTHERWISE KNOWN AS “THE JUDICIARY REORGANIZATION ACT OF 1980,” AS interest therein, where the assessed value of the property involved exceeds Twenty
AMENDED thousand pesos (P20,000,00) or, for civil actions in Metro Manila, where such value
exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon
the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as “The Judiciary Reorganization Act of Courts;
1980,” as amended, is hereby amended to read as follows:
"(3) In all actions in admiralty and maritime jurisdiction where the demand or claim
“Section 19. Jurisdiction of the Regional Trial Courts in Civil Cases. – Regional Trial Courts shall exercise exceeds One hundred thousand pesos (P100,000.00) or, in Metro Manila, where such
exclusive original jurisdiction: demand or claim exceeds Two hundred thousand pesos (P200,000.00);
“x x x "(4) In all matters of probate, both testate and intestate, where the gross value of the
estate exceeds One hundred thousand pesos (P100,000.00) or, in probate matters in Metro
“(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where
Manila, where such gross value exceeds Two Hundred thousand pesos (P200,000.00);
the assessed value exceeds Four hundred thousand pesos (P400,000.00), except for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan "(5) In all actions involving the contract of marriage and marital relations;
Trial Courts, and Municipal Trial Courts in Cities, Municipal Trial Courts, and Municipal Circuit Trial Courts;
"(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or
“(3) In all actions in admiralty and maritime jurisdiction where the demand or claims exceeds Two million body exercising jurisdiction of any court, tribunal, person or body exercising judicial or
pesos (P2,000,000.00); quasi-judicial functions;
“(4) In all matters of probate, both estate and intestate, where the gross value of the estate exceeds Two million "(7) In all civil actions and special proceedings falling within the exclusive original
pesos (P2,000,000.00)’ jurisdiction of a Juvenile and Domestic Relations Court and of the Court of Agrarian
Relations as now provided by law; and
“x x x
"(8) In all other cases in which the demand, exclusive of interest, damages of whatever
“(8) In all other cases in which the demand, exclusive of interest, damages of whatever kind, attorney’s fees,
kind, attorney's fees, litigation expenses, and costs or the value of the property in
litigation expenses and costs or the value of the property in controversy exceeds Two million pesos
controversy exceeds One hundred thousand pesos (P100,000.00) or, in such other cases in
(P2,000,000.00).”
Metro Manila, where the demand exclusive of the abovementioned items exceeds Two
Hundred thousand pesos (P200,000.00)."

Section 2. Section 32 of the same law is hereby amended to read as follows:

"Sec. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit
Trial Courts in Criminal Cases. – Except in cases falling within the exclusive original jurisdiction of
Regional Trial Courts and of the Sandiganbayan, the Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts shall exercise:

"(1) Exclusive original jurisdiction over all violations of city or municipal ordinances
Republic Act No. 7691             March 25, 1994 committed within their respective territorial jurisdiction; and

AN ACT EXPANDING THE JURISDICTION OF THE METROPOLITAN TRIAL COURTS, "(2) Exclusive original jurisdiction over all offenses punishable with imprisonment not
MUNICIPAL TRIAL COURTS, AND MUNICIPAL CIRCUIT TRIAL COURTS, AMENDING FOR exceeding six (6) years irrespective of the amount of fine, and regardless of other
THE PURPOSE BATAS PAMBANSA, BLG. 129, OTHERWISE KNOWN AS THE "JUDICIARY imposable accessory or other penalties, including the civil liability arising from such
REORGANIZATION ACT OF 1980" offenses or predicated thereon, irrespective of kind, nature, value or amount thereof:
Provided, however, That in offenses involving damage to property through criminal
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: negligence, they shall have exclusive original jurisdiction thereof."
Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of Section 3. Section 33 of the same law is hereby amended to read as follows:
1980", is hereby amended to read as follows:
"Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit
"Sec. 19. Jurisdiction in civil cases. – Regional Trial Courts shall exercise exclusive original Trial Courts in Civil Cases. – Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
jurisdiction. Circuit Trial Courts shall exercise:
"(1) In all civil actions in which the subject of the litigation is incapable of pecuniary "(1) Exclusive original jurisdiction over civil actions and probate proceedings, testate and
estimation; intestate, including the grant of provisional remedies in proper cases, where the value of
 the personal property, estate, or amount of the demand does not exceed One hundred Approved: March 25, 1994
thousand pesos (P100,000.00) or, in Metro Manila where such personal property, estate,
or amount of the demand does not exceed Two hundred thousand pesos (P200,000.00),
exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses, and
costs, the amount of which must be specifically alleged: Provided, That interest, damages
of whatever kind, attorney's fees, litigation expenses, and costs shall be included in the
determination of the filing fees: Provided, further, That where there are several claims or
causes of actions between the same or different parties, embodied in the same complaint,
the amount of the demand shall be the totality of the claims in all the causes of action,
irrespective of whether the causes of action arose out of the same or different
transactions;

"(2) Exclusive original jurisdiction over cases of forcible entry and unlawful detainer:
Provided, That when, in such cases, the defendant raises the questions of ownership in his
pleadings and the question of possession cannot be resolved without deciding the issue of
ownership, the issue of ownership shall be resolved only to determine the issue of
possession; and

"(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession
of, real property, or any interest therein where the assessed value of the property or
interest therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil actions
in Metro Manila, where such assessed value does not exceed Fifty thousand pesos
(P50,000.00) exclusive of interest, damages of whatever kind, attorney's fees, litigation
expenses and costs: Provided, That in cases of land not declared for taxation purposes, Incapable of pecuniary estimation
the value of such property shall be determined by the assessed value of the adjacent lots."

Section 4. Section 34 of the same law is hereby amended to read as follows: G.R. No. 212413, June 06, 2018

"Sec. 34. Delegated Jurisdiction in Cadastral and Land Registration Cases. – Metropolitan Trial MA. ROSARIO AGARRADO, RUTH LIBRADA AGARRADO AND ROY AGARRADO, FOR
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts may be assigned by the Supreme THEMSELVES AND FOR THE BENEFIT OF THEIR SIBLINGS AND CO-OWNERS ROBERTO
Court to hear and determine cadastral or land registration cases covering lots where there is no AGARRADO, REUEL ANDRES AGARRADO, HEIRS OF THE LATE RODRIGO AGARRADO, JR.,
controversy or opposition, or contested lots where the value of which does not exceed One hundred REX AGARRADO AND JUDY AGARRADO, Petitioners, v. CRISTITA LIBRANDO-AGARRADO
thousand pesos (P100,000.00), such value to be ascertained by the affidavit of the claimant or by AND ANA LOU AGARRADO-KING, Respondents.
agreement of the respective claimants if there are more than one, or from the corresponding tax
declaration of the real property. Their decisions in these cases shall be appealable in the same
manner as decisions of the Regional Trial Courts." DECISION

Section 5. After five (5) years from the effectivity of this Act, the jurisdictional amounts mentioned in Sec. REYES, JR., J.:
19(3), (4), and (8); and Sec. 33(1) of Batas Pambansa Blg. 129 as amended by this Act, shall be adjusted to
Two hundred thousand pesos (P200,000.00). Five (5) years thereafter, such jurisdictional amounts shall be
adjusted further to Three hundred thousand pesos (P300,000.00): Provided, however, That in the case of Metro An action for partition of real estate is at once an action for the determination of the co-owners of the subject
Manila, the abovementioned jurisdictional amounts shall be adjusted after five (5) years from the effectivity of property and an action for the eventual conveyance of specific portions thereof to the co-owners. While this
this Act to Four hundred thousand pesos (P400,000.00). subject matter is incapable of pecuniary estimation, the proper court which would have jurisdiction over the
action would still depend on the subject property's assessed values in accordance with Secs. 19(2) and 33(3) of
Section 6. All laws, decrees, and orders inconsistent with the provisions of this Act shall be considered The Judiciary Reorganization Act of 1980, as amended
amended or modified accordingly.

Section 7. The provisions of this Act shall apply to all civil cases that have not yet reached the pre-trial stage. The Case
However, by agreement of all the parties, civil cases cognizable by municipal and metropolitan courts by the
provisions of this Act may be transferred from the Regional Trial Courts to the latter. The executive judge of Challenged before the Court via this Petition for Review on Certiorari under Rule 45 of the Rules of Court is
the appropriate Regional Trial Courts shall define the administrative procedure of transferring the cases the April 19, 2013 Decision of the Court of Appeals (CA) in CA-G.R. CV. No. 02669, which affirmed with
affected by the redefinition of jurisdiction to the Metropolitan Trial Courts, Municipal Trial Courts, and modification the January 17, 2007 DecisiOn of the Regional Trial Court (RTC), Branch 44, of Bacolod City in
Municipal Circuit Trial Courts. Civil Case No. 03-11893. Likewise cha1lenged is the subsequent March 27, 2014 Resolution4 of the CA which
upheld its earlier decision.
Section 8. This Act shall take effect fifteen (15) days following its publication in the Official Gazette or in two
(2) national newspapers of general circulation.
The Antecedent Facts
As borne by the records of the case, it appears that the petitioners Ma. Rosario Agarrado (Ma. Rosario), Ruth (b) Ma. Rosario, Ruth and Roy Agarrado are entitled to 6/9 plus ¼ to be divided equally among them unless
Librada Agarrado (Ruth), and Roy Agarrado (Roy) are children of the late spouses Rodrigo (Rodrigo) and they agree otherwise; and
Emilia (Emilia) Agarrado, who, during their lifetime, acquired a 287-square meter land (subject property) in
Bacolod City, Negros Occidental. The subject property was registered in the name of the spouses Rodrigo and
(c) Ana Lou Agarrado-King is entitled to 1/9 of the property.
Emilia and was covered by Transfer Certificate of Title No. T-29842-B.

The partition and segregation of the subject property is hereby ordered as outlined in Rule 69 of the Revised
On August 18, 1978, Emilia died intestate, leaving Rodrigo and their children as her compulsory heirs.
Rules of Court, as amended.

Meanwhile, unknown to the petitioners, Rodrigo was involved in an illicit affair with respondent Cristita No pronouncements as to costs.
Librando-Agarrado (Cristita), with whom Rodrigo begot respondent Ana Lou Agarrado-King (Ana Lou). As it
turned out, Ana Lou was conceived during the existence of the marriage between Rodrigo and Emilia, but was
born on September 27, 1978—one month after the dissolution of Rodrigo and Emilia's marriage through the SO ORDERED.9
latter's death.
Despite the petitioners' motion for reconsideration, the CA affirmed its April 19, 2013 Decision via the March
Eventually, Rodrigo married Cristita on July 6, 1981. 27, 2014 Resolution.

On December 8, 2000, Rodrigo also succumbed to mortality and died. He left his surviving spouse, Cristita, Hence, this petition.
his legitimate children by his marriage with Emilia, and Ana Lou.
The Issues
On January 23, 2003, Cristita and Ana Lou filed a complaint before the Regional Trial Court (RTC), Branch
44, of Bacolod City for the partition of the subject property, with Ma. Rosario, Ruth, Roy, "and other heirs of The petitioners anchor their prayer for the reversal of the April 19, 2013 Decision and March 27, 2014
Rodrigo Agarrado" as defendants. None of the other heirs were however named in any pleading filed by either Resolution based on the following issues:
the plaintiffs (now respondents) or defendants (now petitioners).

a. Whether the Hon. Court of Appeals erred in excluding the FIVE OTHER heirs (children of the first
Eventually, the RTC rendered its January 17, 2007 Decision, which ordered the parties to partition the subject marriage) of their inheritance by the alleged failure to prove their filiation in the proceedings before
property "among themselves by proper instruments of conveyance or any other means or the Honorable Regional Trial Court;
method."7 The fallo of the decision reads:
b. Harmonizing substantive and procedural law, whether the Honorable Court of Appeals erred in not
WHEREFORE, plaintiff Ana Lou Agarrado-King and the defendants herein are ordered to partition the appreciating Respondents' implied recognition or "admission by silence" under Section 32 of Rule
property subject of this case (Lot 10, Block 6) among themselves by proper instruments of conveyance or any 130 of the Rules of Court as evidence of the filiation of the five (5) other children of the late
other means or method after which the Court shall confirm the partition so agreed upon by them, otherwise the Rodrigo Agarrado, Sr. (namely Reuel Andres Agarrado, Rodrigo Agarrado, Jr., Rex Agarrado,
Court will appoint commissioners to effect partition at the expense of the parties. Roberto Agarrado and Judy Agarrado);

SO ORDERED.8 c. Whether the Hon. Court of Appeals in its contested Decision, mathematically MISAPPLIED the
formula under the pertinent rules of succession in the Family Code and/or Civil Code to determine
the shares of both Petitioners and Respondents to the subject house and lot;
Aggrieved, the petitioners elevated the case to the Court of Appeals, which, through the assailed April 19,
2013 Decision, affirmed with modification the January 17, 2007 Decision of the RTC. The fallo of the
decision of the appellate court reads: d. Relatedly, whether the Hon. Court of Appeals is correct in ruling that a family home cannot be
recognized as such simply because it was not registered as such;

WHEREFORE, the appeal is DISMISSED. The Decision dated January 17, 2007, of the Regional Trial
e. Whether all the GSIS, PHILHEALTH and other benefits all claimed, taken, and received by the
Court, 6th Judicial Region, Branch 44, Bacolod City in Civil Case No. 03-11893 is AFFIRMED with
Respondents are to be charged against whatever share they may have over the subject "house and
MODIFICATION in that:
lot" of the late Rodrigo Agarrado, Sr., as well as the funeral expenses expended by the first family
alone?
1. We declare plaintiffs-appellees Cristita Librando Agarrado and Ana Lou Agarrado-King
as well as defendants-appellants as co-owners of the subject property; f. Whether the Hon. Court of Appeals was correct in not ordering the dismissal of the case for failure
of Plaintiffs-Respondents to allege the market value and pay the right docket fees at the incipience
2. We grant judicial partition in the following manner: of the Complaint.

(a) Plaintiff-appellee Cristita Librando Agarrado is entitled to 2/9;

In sum, the submissions of the petitioners seek to determine the following: (1) the compulsory heirs of the late Court has considered such actions as cases where the subject of the litigation may not be estimated in terms of
Rodrigo; (2) the portion of the estate to which each of the compulsory heirs are entitled; (3) the propriety of money, and are cognizable exclusively by Courts of First Instance (now Regional Trial Courts). (Emphasis and
collating to the total estate the medical and burial expenses shouldered by the petitioners and the benefits underscoring supplied
(GSIS, PHILHEALTH) received by the respondents; (4) the effect of the allegation that the subject property is
the petitioners' family home; and (5) the effect on jurisdiction of the failure to indicate the market value of the For actions on partition, the subject matter is two-phased. In Bagayas vs. Bagayas, the Court ruled that
subject property in the complaint filed before the RTC.
partition is at once an action (1) for declaration of co-ownership and (2) for segregation and conveyance of a
determinate portion of the properties involved. Thus, in a complaint for partition, the plaintiff seeks, first, a
The Court's Ruling declaration that he/she is a co-owner of the subject properties, and second, the conveyance of his/her lawful
share.
After a careful perusal of the arguments presented and the evidence submitted, the Court finds merit in the
petition. The case of Russel, the very same case cited by the Court of Appeals, determined that while actions for
partition are incapable of pecuniary estimation owing to its two-phased subject matter, the determination of
For obvious reasons, the Court shall first consider the issue on jurisdiction. the court which will acquire jurisdiction over the same must still conform to Sec. 33(3) of B.P. 129, as
amended. Russel said:

The petitioners argue that the complaint must be dismissed for the failure of the respondents to allege the
assessed value of the subject property. They said that the appellate court failed to appreciate this jurisdictional While actions under Sec. 33(3) of B.P. 129 are also incapable of pecuniary estimation, the law specifically
mandates that they are cognizable by the MTC, METC, or MCTC where the assessed value of the real
requirement, which was indispensable in the determination of the jurisdiction of the RTC. They further averred
that the case should not have proceeded in the first place.11 property involved does exceed P20,000.00 in Metro Manila, or P50,000.00, if located elsewhere. If the value
exceeds P20,000.00 or P50,000.00 as the case may be, it is the Regional Trial Courts which have
jurisdiction under Sec. 19(2). (Emphasis and underscoring supplied)
The CA glossed over this issue by saying that the action for partition instituted by the respondents in the RTC
is one incapable of pecuniary estimation, which would thus confer jurisdiction over the case to the RTC. In
This is also the tenor of the case of Barrido vs. Nonato where the Court upheld the jurisdiction of the
ruling thus, the appellate court invoked the guidance of the case of Russel vs. Vestil,12 and stated that:
Municipal Trial Court in Cities (MTCC), Branch 3, of Bacolod City over the action for partition because the
assessed value of the subject property was only P8,080.00. As basis, Barrido likewise cited Sec. 33(3) of B.P.
We are guided by the ruling in Russel vs Vestil, 304 SCRA 739, March 17, 1999 wherein the Supreme Court 129, as amended.
considered petitioners' complaint seeking the annulment of the document entitled "Declaration of Heirs
and Deed of Confirmation of Previous Oral Partition," as an action incapable of pecuniary
To be sure, according to the recent case of Foronda-Crystal vs. Son, jurisdiction is defined as the power and
estimation, rationalizing that the resolution of the same principally involved the determination of hereditary
rights. In effect, the partition aspect is an action incapable of pecuniary estimation. (Emphasis and authority of a court to hear, try, and decide a case. To exercise this, the court or adjudicative body must
acquire, among others, jurisdiction over the subject matter,which is conferred by law and not by the consent
underscoring supplied)13
or acquiescence of any or all of the parties or by erroneous belief of the court that it exists.

This, however, is an error that must be reversed. The appellate court's reliance on Russel is misplaced.
Jurisdiction over cases for partition of real properties therefore, like all others, is determined by law.
Particularly, the same is identified by Sections 19(2) and 33(3) of the Judiciary Reorganization Act of 1980, as
The Court, in Russel, explained that the complaint filed by the plaintiff is one incapable of pecuniary amended by Republic Act 7691.
estimation because the subject matter of the complaint is not one of partition, but one of the annulment of a
document denominated as a "Declaration of Heirs and Deed of Confirmation of Previous Oral Partition."
Considering that the annulment of a document is the main subject matter, and that the same is incapable of The provisions state that in all civil actions which involve title to, or possession of, real property, or any
interest therein, the RTC shall exercise exclusive original jurisdiction where the assessed value of the property
pecuniary estimation, then necessarily, the RTC has jurisdiction.
exceeds P20,000.00 or, for civil actions in Metro Manila, where such value exceeds P50,000.00. For those
below the foregoing threshold amounts, exclusive jurisdiction lies with the Metropolitan Trial Courts (MeTC),
This is not so in the present case. Municipal Trial Courts (MTC), or Municipal Circuit Trial Courts (MCTC).25

In determining whether a case is incapable of pecuniary estimation, the case of Cabrera vs. Francisco, in Thus, the determination of the assessed value of the property, which is the subject matter of the partition, is
reiterating the case of Singson vs. Isabela Sawmill teaches that identifying the nature of the principal action or essential. This, the courts could identify through an examination of the allegations of the complaint.
remedy sought is primarily necessary. It states:
According to the case of Tumpag vs. Tumpag, it is a hornbook doctrine that the court should only look into the
In determining whether an action is one the subject matter of which is not capable of pecuniary estimation this facts alleged in the complaint to determine whether a suit is within its jurisdiction.According to the case
Court has adopted the criterion of first ascertaining the nature of the principal action or remedy of Spouses Cruz vs. Spouses Cruz, et al., only these facts can be the basis of the court's competence to take
sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary cognizance of a case, and that one cannot advert to anything not set forth in the complaint, such as evidence
estimation, and whether jurisdiction is in the municipal courts or in the Courts of First Instance would depend adduced at the trial, to determine the nature of the action thereby initiated.
on the amount of the claim. However, where the basic issue is something other than the right to recover a sum
of money, where the money claim is purely incidental to, or a consequence of, the principal relief sought, this
According to Foronda-Crystal, failure to allege the assessed value of a real property in the complaint would None of these assertions indicate the assessed value of the property to be partitioned that would invariably
result to a dismissal of the case. The reason put forth by the Court is that: determine as to which court has the authority to acquire jurisdiction. More, none of the documents annexed to
the complaint and as attached in the records of this case indicates any such amount Thus, the petitioners are
correct in restating their argument against the RTC's jurisdiction, for it has none to exercise.
x x x absent any allegation in the complaint of the assessed value of the property, it cannot be determined
whether the RTC or the MTC has original and exclusive jurisdiction over the petitioner's action.  Indeed,
the courts cannot take judicial notice of the assessed or market value of the land. (Emphasis and underscoring Clearly, therefore, jurisprudence has ruled that an action for partition, while one not capable of pecuniary
supplied, citations omitted) estimation, falls under the jurisdiction of either the first or second level courts depending on the amounts
specified in Secs. 19(2) and 33(3) of B.P. 129, as amended. Consequently, a failure by the plaintiff to indicate
the assessed value of the subject property in his/her complaint, or at the very least, in the attachments in the
This same ratio has been repeated in a number of cases, including the cases of Spouses Cruz vs. Spouses Cruz,
et al.30 and Quinagoran vs. Court of Appeals, where the Court concluded that: complaint as ruled in Foronda-Crystal, is dismissible because the court which would exercise jurisdiction over
the same could not be identified.

Considering that the respondents failed to allege in their complaint the assessed value of the subject property,
the RTC seriously erred in denying the motion to dismiss. Consequently, all proceedings in the RTC are null Consequently, as the complaint in this case is dismissible for its failure to abide by the rules in Foronda-
Crystal, then the Court sees no further necessity to discuss the other issues raised.
and void, and the CA erred in affirming the RTC.

Based on the foregoing, in Foronda-Crystal, the Court already established the rules that have to be followed in WHEREFORE, premises considered, the April 19, 2013 Decision and March 27, 2014 Resolution of the
Court of Appeals in CA-G.R. CV. No. 02669, as well as the January 17, 2007 Decision of the Regional Trial
determining the jurisdiction of the first and second level courts. It said:
Court, Branch 44, of Bacolod City in Civil Case No. 03-11893 are hereby SET ASIDE. The complaint is
hereby DISMISSED without prejudice to its refiling in the proper court.
A reading of the quoted cases would reveal a pattern which would invariably guide both the bench and the bar
in similar situations. Based on the foregoing, the rule on determining the assessed value of a real property,
insofar as the identification of the jurisdiction of the first and second level courts is concerned, would be SO ORDERED
two-tiered:
G.R. No. 161739             May 4, 2006
First, the general rule is that jurisdiction is determined by the assessed value of the real property as alleged in ALFREDO BOKINGO, Petitioner, vs. THE HONORABLE COURT OF APPEALS, the HEIRS OF
CELESTINO BUSA, represented by FELICIDAD BUSA-PANAL and ERNESTO M.
the complaint; and
CAMPOS, Respondents.
DECISION
Second, the rule would be liberally applied if the assessed value of the property, while not alleged in the
complaint, could still be identified through a facial examination of the documents already attached to the CALLEJO, SR., J.:
complaint. (Emphasis and underscoring supplied)
Before the Court is the petition for review on certiorari filed by Alfredo Bokingo seeking to reverse and set
aside the Decision1 dated December 17, 2003 of the Court of Appeals (CA) in CA-G.R. SP No. 71510 which
On the basis of this most recent ruling, the Court is without any recourse but to agree with the petitioners in dismissed his petition for certiorari filed therewith.
dismissing the complaint filed before the RTC for lack of jurisdiction.
The factual and procedural antecedents are as follows:
A scouring of the records of this case revealed that the complaint did indeed lack any indication as to the
Petitioner Alfredo Bokingo is one of the defendants in the complaint for injunction and damages filed by
assessed value of the subject property. In fact, the only reference to the same in the complaint are found in
Ernesto Campos, the Heirs of Celestino Busa,2 the Heirs of Felicidad Busa-Panal3 and the Heirs of Concordia
paragraphs six, seven, and eight thereof, which state that:
Busa.4 The complaint was filed with the Regional Trial Court (RTC) of Butuan City, Branch 3 thereof, and
docketed as Civil Case No. 1003. The complaint alleged as follows:
"6. Meanwhile, during the lifetime of Rodrigo Agarrado, he acquired certain real and personal properties due
to his hard work, one of which is the parcel of land with improvements standing thereon, located at Barangay CAUSE OF ACTION
Villamonte, Bacolod City, more particularly described as follows, to wit:
3. Plaintiffs [herein respondents] are co-owners of the land subject matter. By virtue of the right of
representation, the heirs of FELICIDAD BUSA-PANAL and CONCORDIA S. BUSA and
xxxx REYNALDO S. BUSA, respectively;

7. RODRIGO AGARRADO died intestate and leaving no debts. Upon his death, plaintiffs by operation of law, 4. Defendants in this case are heirs of MIGUEL BOKINGO;
became co-owners of the afore-described property jointly with the other heirs, the herein defendants;
5. Defendants ALFREDO BOKINGO [herein petitioner], WENCESLAO B. AMBRAY, JR., ROSA
B. AMBRAY, CELIA A. ALMORA and JOSELITO B. AMBRAY, filed an application for titling
8. Demand thru counsel has been made by the herein plaintiffs upon the defendants for the partition of the of a parcel of land before the Department of Environment and Natural Resources, Office of the
subject property, but the same was simply ignored. Copy of the Demand Letter is hereto attached and marked CENRO, Ochoa Avenue, Butuan City;
as Annex 'D' and forming part hereof."33
 6. The land subject matter of the application of defendants is a parcel of land located at Baan 16. The defendants did not exercise honesty and good faith in their acts which is a violation of
(Buhangin), Butuan City, containing an area of 2.1600 hectares, more or less; Article 19 of the New Civil Code, and which entitles the plaintiffs for damages;

7. The land subject matter of the application for titling of defendants is a parcel of land inherited by 17. The acts of defendants constrained the plaintiff[s] to litigate and to incur attorney’s fees in the
plaintiffs from their father, the late CELESTINO BUSA. This parcel of land is described amount of PhP10,000.00 plus litigation expenses estimated at PhP10,000.00.
particularly as:
PRAYER
TAX DECLARATION NO. GR.-10-002-0189-A
Wherefore, premises considered, it is respectfully prayed that after hearing, this Honorable Court:
"A parcel of land covered by Tax Declaration No. GR-10-002-0189-A, situated in Buhangin,
Butuan City, containing an area of 2.1600 HAS., more or less. Bounded on the North – Elisa Busa, 1) Enjoin permanently the illegal acts of defendants of preventing the survey of the land subject
South - Pastor Ago, East – Ho. Miguel Bokingo and on the West – Baan River." matter of this case by ENGR. ERNESTO M. CAMPOS;

8. When plaintiffs knew of defendants’ application, plaintiffs filed a protest against defendants’ 2) Order defendants to pay plaintiffs the sum of P10,000.00 as attorney’s fees, P10,000.00 as
application on February 5, 1996. Attached as Annex A is the Protest; litigation expenses;

9. On November 24, 1998, the Provincial Environment and Natural Resources Officer, HUGO I. 3) Order defendants to pay damages to plaintiff;
BAÑOSIA, resolved the Protest in favor of Plaintiffs-the protestant in the DENR case. Attached as
Annex B is the order; 4) Such other reliefs just and reasonable under the circumstances.5

10. On January 6, 1999, the Provincial Environment and Natural Resources Officer, HUGO T. Petitioner Bokingo, as one of the defendants in the above complaint, filed with the court a quo a motion to
BAÑOSIA, issued a certification stating that the order dated November 24, 1998 has become final dismiss alleging that the latter has no jurisdiction over the subject matter of the claim. Specifically, petitioner
and executory. Attached as Annex C is the machine copy of the Certification; Bokingo contended that it could be gleaned from the complaint that the issue between the parties involved the
possession of the land. As such, the assessed value of the land was crucial to determine the court’s jurisdiction
11. On September 9, 1999, the same DENR Officer HUGO T. BAÑOSIA issued an Order of over the subject matter in accordance with either Section 19(2) 6 or Section 33(3)7 of Batasang Pambansa Blg.
Execution which states that: 1298 as amended by Republic Act No. 7691. If the assessed value thereof is P20,000.00 or less, then the
Municipal Trial Court (MTC) has jurisdiction over the subject matter. Otherwise, jurisdiction is with the RTC.
In complying herewith, the Land Management Officer III concerned should be instructed to set forth the whole
proceeding in writing signed by the parties and witnesses, if possible, submit and return to this Office within Petitioner Bokingo pointed out in his Motion to Dismiss that the assessed value of the land subject matter of
sixty (60) days from receipt hereof, to be used as evidence should it be necessary to institute any action, the complaint was not indicated. Nonetheless, he proffered that based on his father’s tax declaration covering
criminal or otherwise, against any party who may refuse to obey the same. the subject land, its assessed value was only P14,410.00. Consequently, it was allegedly clear that the court a
quo, a Regional Trial Court, had no jurisdiction over the subject matter of the complaint filed by the
SO ORDERED, Butuan City, September 9, 1999. respondents. Rather, in view of the assessed value of the subject land which was allegedly less than
the P15,000.00, jurisdiction properly belonged to the MTC.
12. Plaintiffs requested on June 23, 1999, for a Survey Authority to survey the land subject matter of
this case before the CENRO Office of Butuan City. Attached as Annex D is the Survey Application; Petitioner Bokingo thus urged the court a quo to dismiss the complaint filed by the respondents for lack of
jurisdiction over the subject matter thereof.
13. On July 30, 1999, A Survey Authority was issued by the CENRO of Butuan City, authorizing
plaintiff ENGR. ERNESTO M. CAMPOS, JR., to survey the land subject matter of the DENR case Acting thereon, the court a quo issued the Order dated March 13, 2002 denying the motion to dismiss. It
and the case at bar. Attached as Annex E is the Survey Authority; pointed out that the complaint’s allegation is that the respondents, as plaintiffs, are entitled to have the subject
land surveyed after petitioner Bokingo’s and his co-claimants’ application for the titling of the subject land
14. On November 18, 1999 at 11:00 A.M., FELICIDAD BUSA-PANAL, MILAGROS BUSA was dismissed by the Provincial Environment and Natural Resources Officer (PENRO) and the respondents
SIMOGAN, TERESITA BUSA LINAO, JIMMY BUSA-PANAL, son of Felicidad Busa-Panal, were declared to have a better right to file a public land application covering the same. Further, the relief being
ALFREDO BUSA-PANAL, son-in-law of Concordia S. Busa, personnel of the Butuan PNP and the sought in the complaint is injunction in order that the respondents’ right to survey the subject land would not
personnel of ENGR. ERNESTO M. CAMPOS went to the area subject matter of this case to survey be defeated.
the land. Unfortunately, Defendant SPO3 FERDINAND B. DACILLO and Defendant ALFREDO
BOKINGO, representatives of defendants, told the survey group to stop and not to enter the area Based on these allegations, the court a quo held that it had jurisdiction over the subject matter of the claim
subject matter of this case. Attached as Annex F is the report of CENRO Officer who [was] present under Section 2 of Rule 58 of the Rules of Court which provides in part that "[a] preliminary injunction may
during the November 18, 1999 survey which was stopped by SPO3 FERDINAND B. DACILLO be granted by the court where the action or proceeding is pending." It accordingly denied petitioner Bokingo’s
and ALFREDO BOKINGO; motion to dismiss the complaint for lack of jurisdiction.1avvphil.net

15. Plaintiff[s] availed of the Barangay Justice System to resolve the controversy regarding the Petitioner Bokingo forthwith filed with the Court of Appeals a petition for certiorari alleging grave abuse of
survey but to no avail, defendants still refused to allow plaintiffs to survey the area. Thus, a discretion on the part of the court a quo in denying his motion to dismiss.
Certificate to File Action was issued by the Lupong Tagapamayapa. Copy of the same is hereto
attached as Annex G; On December 17, 2003, the CA rendered the assailed Decision dismissing the said petition for lack of merit, in
fact and in law. It ruled that the remedy of certiorari is unavailing to petitioner Bokingo because "an order
denying a motion to dismiss is interlocutory and cannot be the subject of the extraordinary petition for action is one where the subject of litigation may not be estimated in terms of money, which is cognizable
certiorari or mandamus."9 exclusively by Regional Trial Courts."13

It was noted that the records fail to disclose that petitioner Bokingo filed a motion for reconsideration of the As gleaned from the complaint, the principal relief sought by the respondents in their complaint is for the court
order of the court a quo. According to the CA, such omission warranted the outright dismissal of the petition a quo to issue an injunction against petitioner Bokingo and his representatives to permanently enjoin them
for certiorari. Finally, it was not shown or even alleged in the petition that the court a quo, in issuing the from preventing the survey of the subject land. For clarity, the prayer of the complaint reads:
assailed order, acted with grave abuse of discretion amounting to lack of jurisdiction. The issue raised by
petitioner Bokingo, the CA held, was proper for an appeal but not a petition for certiorari. Wherefore, premises considered, it is respectfully prayed that after hearing, this Honorable Court:

Aggrieved, petitioner Bokingo now comes to the Court seeking the reversal of the said decision of the CA 1) Enjoin permanently the illegal acts of defendants of preventing the survey of the land subject
which dismissed his petition for certiorari filed therewith. He insists that the complaint filed by the matter of this case by ENGR. ERNESTO M. CAMPOS;
respondents with the court a quo is a possessory action. To determine which court, the RTC or MTC, has
primary jurisdiction, petitioner Bokingo theorizes that it is necessary that the assessed value of the land be 2) Order defendants to pay plaintiffs the sum of P10,000.00 as attorney’s fees, P10,000.00 as
alleged in the initiatory complaint. Absent such allegation, the court where the case was filed should allegedly litigation expenses;
preliminarily determine the assessed value of the subject property to determine whether or not it has
3) Order defendants to pay damages to plaintiff;
jurisdiction over the subject matter of the claim. In the present case, according to petitioner Bokingo, the
assessed value of the subject land is only P14,410.00; hence, jurisdiction thereof properly belongs to the MTC 4) Such other reliefs just and reasonable under the circumstances.14
in accordance with Section 19(2) or 33(3) of BP Blg. 129 as amended by RA 7691.
Contrary to the view posited by petitioner Bokingo, the cause of action of the respondents’ complaint is not, as
The petition is bereft of merit. yet, to recover the possession of the subject land. There are three kinds of actions to judicially recover
possession of real property and these are distinguished in this wise:
Preliminarily, the Court finds no reversible error in the dismissal by the CA of petitioner Bokingo’s petition
for certiorari filed therewith. As correctly held by the CA, the mere fact that he failed to move for the What really distinguishes an action for unlawful detainer from a possessory action (accion publiciana) and
reconsideration of the court a quo’s order denying his motion to dismiss was sufficient cause for the outright from a reinvindicatory action (accion reinvindicatoria) is that the first is limited to the question of possession
dismissal of the said petition. Certiorari as a special civil action will not lie unless a motion for reconsideration de facto. An unlawful detainer suit (accion interdictal) together with forcible entry are the two forms of an
is first filed before the respondent court to allow it an opportunity to correct its errors, if any. 10 Petitioner ejectment suit that may be filed to recover possession of real property. Aside from the summary action of
Bokingo did not proffer any compelling reason to warrant deviation by the CA from this salutary rule. As ejectment, accion publiciana or the plenary action to recover the right of possession and accion
further observed by the CA, petitioner Bokingo failed to even allege grave abuse of discretion on the part of reinvindicatoria or the action to recover ownership which includes recovery of possession, make up the three
the court a quo in rendering the order denying his motion to dismiss. kinds of actions to judicially recover possession.15
In any case, the present petition lacks substantive merit. It is axiomatic that the nature of the action and which Significantly, the respondents’ complaint has not sought to recover the possession or ownership of the subject
court has original and exclusive jurisdiction over the same is determined by the material allegations of the land. Rather, it is principally an action to enjoin petitioner Bokingo and his representatives from committing
complaint, the type of relief prayed for by the plaintiff, and the law in effect when the action is filed, acts that would tend to prevent the survey of the subject land. It cannot be said therefore that it is one of a
irrespective of whether the plaintiffs are entitled to some or all of the claims asserted therein.11 The caption of possessory action. The respondents, as plaintiffs in the court a quo, to be entitled to the injunctive relief
the complaint is not determinative of the nature of the action. Nor does the jurisdiction of the court depend sought, need to establish the following requirements: (1) the existence of a right to be protected; and (2) that
upon the answer of the defendant or agreement of the parties, or to the waiver or acquiescence of the parties.12 the acts against which the injunction is to be directed are violative of the said right. As such, the subject matter
of litigation is incapable of pecuniary estimation and properly cognizable exclusively by the court a quo, a
A careful perusal of the respondents’ complaint, quoted earlier, shows that it alleges that per the Order dated
Regional Trial Court under Section 19 (1) of BP Blg. 129, as amended by RA 7691:
November 24, 1998 of PENRO of Butuan City, petitioner Bokingo’s and his co-claimants’ application for
titling of the subject land was rejected. On the other hand, in the same order it was declared that the SEC. 19. Jurisdiction in Civil Cases. – Regional Trial Courts shall exercise exclusive original jurisdiction:
respondents, if qualified, may file an appropriate public land application covering the same land. It was further
alleged that the said order became final and executory, and in connection therewith, the respondents were (1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation;
authorized by the City Environment and Natural Resources Officer (CENRO) of Butuan City to conduct a
survey on the subject land. However, petitioner Bokingo, through his representatives, unjustly prevented the xxx
conduct of the said survey. Even when the matter regarding the survey was submitted to the Lupong
Tagapamayapa, petitioner Bokingo still allegedly refused to allow the respondents to survey the subject land. Hence, the court a quo did not err in denying petitioner Bokingo’s motion to dismiss.
Hence, the Complaint for Injunction filed by the respondents where the principal relief sought is to enjoin
permanently the illegal acts of the defendants therein, including petitioner Bokingo, of preventing the survey WHEREFORE, premises considered, the petition is DENIED and the assailed Decision dated December 17,
2003 of the Court of Appeals in CA-G.R. SP No. 71510 is AFFIRMED in toto.
of the land subject matter of the case.

In this connection, it is well to note that the Court had the occasion to explain that "in determining whether an SO ORDERED
action is one the subject matter of which is not capable of pecuniary estimation, the nature of the principal G.R. No. 172293               August 28, 2013
action, or remedy sought must first be ascertained. If it is primarily for the recovery of a sum of money, the
claim is considered capable of pecuniary estimation, and jurisdiction over the action will depend on the ARACELI J. CABRERA and ARNEL CABRERA and in behalf of the heirs of SEVERINO
amount of the claim. However, where the basic issue is something other than the right to recover a sum of CABRERA, Petitioners,
money, where the money claim is purely incidental to, or a consequence of, the principal relief sought, the vs.
ANGELA G. FRANCISCO, FELIPE C. GELLA, VICTOR C. CELLA, ELENA LEILANI G. REYES, has no jurisdiction over petitioners’ Complaint. Respondents also posited that the Complaint states no cause of
MA. RIZALINA G.ILIGAN and DIANA ROSE GELLA, Respondents. action since petitioners’ supposed right to any commission remained inchoate as Lot No. 1782-B has not yet
been sold; in fact, the Complaint merely alleged that petitioners introduced a real estate broker to respondents.
DECISION Lastly, respondents averred that petitioners have no legal capacity to sue on behalf of Severino’s other heirs
and that the verification and certification of non-forum shopping attached to the Complaint only mentioned
DEL CASTILLO, J.: Araceli and Arnel as plaintiffs.
"The nature of an action, as well as which court or body has jurisdiction over it, is determined based on the Finding respondents’ arguments to be well-taken, the RTC, in an Order dated May 2, 2002 ruled:
allegations contained in the Complaint of the plaintiffs x x x. The averments in the Complaint and the
character of the relief sought arc the ones to be consulted. x x x" WHEREFORE, premises considered, the respondents’ Motion to Dismiss is granted. Consequently, this case
is hereby DISMISSED. Costs against the petitioners.
This Petition for Review on Certiorari assails the July 6, 2005 Decision of the Court of Appeals (CA) in CA-
G.R. CV No. 75126 which dismissed the appeal filed by petitioners Arceli J. Cabrera (Arceli) and Arnel SO ORDERED.
Cabrera (Arnel), in their own behalf and in behalf of the heirs of Severino Cabrera (petitioners), and affirmed
the Orderdated May 2, 2002 of the Regional Trial Court (RTC), Branch 12, San Jose, Antique in Civil Case Petitioners filed a Notice of Appeal, hence, the elevation of the records of the case to the CA.
No. 2001-9-3267. The said RTC Order granted the Motion to Dismiss of respondents Angela G. Francisco,
Felipe C. Gella, Victor C. Gella, Elena Leilani G. Reyes, Ma. Rizalina G. Iligan and Diana Rose Gella Ruling of the Court of Appeals
(respondents) and dismissed petitioners’ Complaint denominated as Collection of Agents’ Compensation,
Commission and Damages. Likewise assailed is the CA Resolution dated April 5, 2006 which denied Petitioners averred that their claim is one which is incapable of pecuniary estimation or one involving interest
petitioners’ Motion for Reconsideration. in real property the assessed value of which exceeds ₱200,000.00. Hence, it falls under the exclusive original
jurisdiction of the RTC. Moreover, they asserted that they are not only claiming for commission but also for
Factual Antecedents compensation for the services rendered by Severino as well as by Araceli and Arnel for the administration of
respondents’ properties. Citing Section 3, Rule 3 of the Rules of Court, petitioners justified the inclusion of
On October 25, 1976, respondents’ father, Atty. Lorenzo C. Gella (Atty. Gella), executed a private document Severino’s other heirs as plaintiffs in the Complaint.
confirming that he has appointed Severino Cabrera (Severino), husband of Araceli and father of Arnel as
administrator of all his real properties located in San Jose, Antique 9 consisting of about 24 hectares of land In the Decision dated July 6, 2005, the CA concluded that the Complaint is mainly for collection of sum of
described as Lot No. 1782-B and covered by Transfer Certificate of Title No. T-16987. money and not one which is incapable of pecuniary estimation since petitioners are claiming five percent of
the total purchase price of Lot No. 1782-B. Neither does it involve an interest over a property since petitioners
When Severino died in 1991, Araceli and Arnel, with the consent of respondents, took over the administration are merely claiming payment for their services. The appellate court also ruled that the Complaint did not state
of the properties. Respondents likewise instructed them to look for buyers of the properties, allegedly a cause of action since it failed to show the existence of petitioners’ right that was allegedly violated by
promising them "a commission of five percent of the total purchase price of the said properties as respondents. Moreover, it found no evidence of Araceli’s and Arnel’s authority to file the Complaint for and in
compensation for their long and continued administration"thereof. behalf of Severino’s other heirs. In sum, the CA found no error on the part of the RTC in granting respondents’
Motion to Dismiss. Thus:
Accordingly, petitioners introduced real estate broker and President of ESV Marketing and Development
Corporation, Erlinda Veñegas (Erlinda), to the respondents who agreed to have the said properties developed WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DISMISSING the
by Erlinda’s company. However, a conflict arose when respondents appointed Erlinda as the new appeal filed in this case and AFFIRMING the Order rendered by the lower court in Civil Case No. 2001-9-
administratrix of the properties and terminated Araceli’s and Arnel’s services. 3267 with double costs against petitioners.

Petitioners, through counsel, wrote respondents and demanded for their five percent commission and SO ORDERED.
compensation to no avail. Hence, on September 3, 2001, they filed a Complaint for Collection of Agent’s
Compensation, Commission and Damages against respondents before the RTC. Attached to their Complaint is Petitioners filed a Motion for Reconsideration questioning solely the CA’s affirmance of the RTC’s finding on
a copy of the tax declaration for Lot No. 1782-B lack of jurisdiction. This was, however, also denied in a Resolution23 dated April 5, 2006.

Ruling of the Regional Trial Court Hence, the present Petition for Review on Certiorari.

Petitioners prayed that they be paid (1) commission and compensation in the form of real property equivalent Issues
to five percent of the 24-hectare Lot No. 1782-B, (2) moral damages of ₱100,000.00, and (3) attorney’s fees
and litigation expenses of ₱100,000.00. Whether the CA erred in affirming the RTC’s findings that it has no jurisdiction over the subject matter of the
case; that the Complaint states no cause of action; and that petitioners Araceli and Arnel have no legal capacity
Respondents filed a Motion to Dismiss based on the following grounds: (1) lack of jurisdiction, (2) failure to to sue in behalf of the other heirs of Severino.
state a cause of action, and (3) lack of legal capacity of Araceli and Arnel to sue in behalf of the other heirs of
Severino. The Parties’ Arguments

Respondents argued that for RTCs outside of Metro Manila to take cognizance of a civil suit, the jurisdictional At the outset, petitioners claim that the RTC did not make its own independent assessment of the
amount must exceed ₱200,000.00 pursuant to Section 5 of Republic Act (RA) No. 7691 which amended merits of respondents’ Motion to Dismiss but only blindly adopted the arguments raised therein. This, to them,
Section 19 of Batas Pambansa Blg. (BP) 129. And since the total market value of Lot No. 1782-B is violates the Court’s pronouncement in Atty. Osumo v. Judge Serrano enjoining judges to be faithful to the law
₱3,550,072, five percent thereof is only ₱177,506.60 or less than the said jurisdictional amount, then the RTC and to maintain professional competence
 As to the substantial issues, petitioners reiterate the arguments they raised before the CA. They what had been agreed upon between him and Atty. Lorenzo C. Gella, relative to his designation as
insist that their Complaint is one which is incapable of pecuniary estimation or involves interest in real administrator of Atty. Gella. As such, the plaintiffs cannot claim now that Severino Cabrera is entitled to any
property the assessed value of which exceeds ₱200,000.00 and falls within the RTC’s jurisdiction. At any rate, compensation or commission as Annex "A" does not so provide.
they emphasize that they likewise seek to recover damages, the amount of which should have been considered
by the RTC in determining jurisdiction. Moreover, they have a cause of action against the respondents because An examination of the records of this case reveals that there is nothing in plaintiffs’ complaint showing that
an agency under the Civil Code is presumed to be for a compensation. And what they are claiming in their they were empowered by the other heirs of the late Severino Cabrera to take this action on their behalf. x x x
Complaint is such compensation for the services rendered not only by Severino but also by Araceli and Arnel
as administrators/agents of respondents’ properties. Lastly, they allege that pursuant to Section 3, Rule 3 of the Clearly, petitioners’ claim that the RTC merely adopted the arguments of respondents in their Motion to
Rules of Court, the joining of Severino’s other heirs as plaintiffs in the Complaint, is proper. Dismiss when it resolved the same is belied by the above-quoted disquisition of the RTC on the matter and
therefore deserves no credence
On the other hand, respondents assert that petitioners’ Complaint, as correctly found by the CA, is
for a specific sum of money seeking to recover the amount of ₱177,503.60, which is below the jurisdictional Petitioners’ Complaint is neither one which is incapable of pecuniary estimation nor involvesinterest
amount for RTCs outside of Metro Manila. As to petitioners’ claim for damages, the same is only incidental to in a real property
the principal claim for agent’s compensation and therefore should not be included in computing the total
Section 19(1) and (2) of BP 129 as amended by RA 7691 read:
amount of the claim for purposes of determining jurisdiction. Respondents likewise point out that the CA’s
affirmance of the RTC’s findings that the Complaint states no cause of action and that Araceli and Arnel have SEC. 19. Jurisdiction in Civil Cases. – Regional Trial Courts shall exercise exclusive original jurisdiction:
no capacity to sue in behalf of the other heirs can no longer be questioned before this Court as they are already
final and executory since petitioners failed to assail them in their Motion for Reconsideration with the CA. Be (1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation;
that as it may, no error can be imputed to the CA for affirming the said findings as they are in accordance with
law. (2) In all civil actions which involve the title to, or possession of, real property, or any interest
therein, where the assessed value of the property involved exceeds twenty thousand pesos
Our Ruling, The Petition lacks merit. Contrary to petitioners’ claim, the RTC made an independent (₱20,000.00) or for civil actions in Metro Manila, where such value exceeds Fifty thousand pesos
assessment of the merits of respondents’ Motion to Dismiss. (₱50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings,
original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial
It cannot be gainsaid that "it is the Court’s bounden duty to assess independently the merits of a Courts, and Municipal Circuit Trial Courts;
motion x x x." In this case, the RTC complied with this duty by making its own independent assessment of the
merits of respondents’ Motion to Dismiss. A reading of the RTC’s Order will show that in resolving said xxxx
motion, it judiciously examined the Complaint and the documents attached thereto as well as the other
pleadings filed in connection with the said motion. Based on these, it made an extensive discussion of its Insisting that the RTC has jurisdiction over their Complaint, petitioners contend that the same is one which is
observations and conclusions. This is apparent from the following portions of the said Order, to wit: incapable of pecuniary estimation or involves interest in a real property the assessed value of which exceeds
₱200,000.00.
x x x In the instant case, the plaintiffs’ complaint does not even mention specifically the amount of their
demand outside of their claim for damages and attorney’s fees. They are only demanding the payment of their The Court does not agree. To ascertain the correctness of petitioner’s contention, the averments in the
alleged commission/compensation and that of the late Severino Cabrera which they fixed at 5% of Lot No. Complaint and the character of the relief sought in the said Complaint must be consulted. This is because the
1782-B allegedly with an area of 24 hectares. They did not also state the total monetary value of Lot 1782-B jurisdiction of the court is determined by the nature of the action pleaded as appearing from the allegations in
neither did they mention the monetary equivalent of 5% of Lot No. 1782-B. In short, the complaint fails to the Complaint.35 Hence, the pertinent portions of petitioners’ Complaint are hereunder reproduced:
establish that this Court has jurisdiction over the subject matter of the claim.
xxxx
As the tax declaration covering Lot No. 1782-B has been attached to the complaint as Annex "C" and made an
integral part thereof, the court, in its desire to determine whether it has jurisdiction over the subject matter of 2. That on October 25, 1976 the defendants’ father the late Atty. Lorenzo Gella, x x x designated x x
plaintiff’s claim computed the total market value of Lot No. 1782-B, including the value of the trees and the x Severino Cabrera as agent or administrator of all his real properties located in San Jose, Antique x
plants standing thereon, as appearing in said Annex "C". The computation shows the amount of ₱3,508,370.00. x x.
Five percent thereof is ₱175,418.50. It is way below the jurisdictional amount for the Regional Trial Court
3. That said Severino Cabrera immediately assumed his duties and responsibilities faithfully as
outside Metro Manila which is pegged at more than ₱200,000. Clearly, therefore, this Court has no jurisdiction
over the subject matter of the plaintiff’s complaint as correctly contended by the defendants. agent or administrator until his death in 1991 of the properties of Lorenzo Gella in San Jose,
Antique consisting of about 24 hectares x x x which later became Lot No. 1782-B in the name of the
xxxx defendants, covered by T.C.T. No. T-16987, Register of Deeds of Antique x x x.

A careful scrutiny of the complaint in this case reveals that it is bereft of any allegation that Lot No. 1782-B or 4. That after the death of said Severino Cabrera in 1991, with the consent of the defendants, his wife
any portion thereof has already been sold thru the plaintiffs’ efforts prior to the alleged dismissal as agents or took over his duties and responsibilities as agent or administratrix of the above-named properties of
brokers of the defendants. As they failed to sell Lot No. 1782-B or any portion thereof, then they are not the defendants in San Jose, Antique with the help of her son, Arnel Cabrera as ‘encargado’ and the
entitled to any commission, assuming in gratia argumenti that they were promised 5% commission by plaintiffs were also instructed by the defendants to look for buyers of their properties and plaintiffs
defendants should they be able to sell Lot No. 1782-B or any part or parcel of the said lot. were promised by defendants a commission of five percent of the total purchase price of the said
properties as compensation for their long and continued administration of all the said properties.
Besides, the court notices that the appointment of the plaintiffs’ father (Annex "A"-Complaint) does not state
in any manner that he is entitled to a compensation or commission when it is supposed to be the repository of 5. That sometime in 1994 plaintiffs approached the real estate broker Erlinda Veñegas to sell the
above-described Lot No. 1782-B and the plaintiffs gave her the addresses of the defendants who at
 all times live in Metro Manila. Thereafter defendants agreed to have the said property developed by Lot No. 1782-B. Therefore, the CA did not err when it ruled that petitioners’ Complaint is not incapable of
ESV Marketing & Development Corporation represented by its President, said Erlinda Veñegas and pecuniary estimation.
defendants also designated said Erlinda Veñegas as administratrix of said property and at the same
time defendants dismissed plaintiffs as agents or administrators thereof; The Court cannot also give credence to petitioners’ contention that their action involves interest in a real
property. The October 25, 1976 letter of Atty. Gella confirming Severino’s appointment as administrator of his
6. That on August 1, 2001 plaintiffs, through counsel wrote defendants demanding payment of their properties does not provide that the latter’s services would be compensated in the form of real estate or, at the
five percent of twenty four hectares properties under their administration for twenty five years in the very least, that it was for a compensation. Neither was it alleged in the Complaint that the five percent
form of real estate in the subdivision of Lot 1782-B as their compensation or commission, but commission promised to Araceli and Arnel would be equivalent to such portion of Lot No. 1782-B. What is
defendants refused and failed to pay plaintiffs in cash or in kind of what is due them; clear from paragraph 4 thereof is that respondents instructed petitioners to look for buyers of their properties
and "were promised by respondents a commission of five percent of the total purchase price of the said
7. That in view of the aforesaid failure and refusal of defendants to pay their compensation or properties as compensation for their long and continued administration of all the said properties." Also,
commission and instead they were dismissed and replaced by the said Erlinda Veñegas they petitioners’ allegation in paragraph 6 that respondents failed to pay them "in cash or in kind" of what is due
themselves recommended to defendants, the plaintiffs have suffered public humiliation, mental them negates any agreement between the parties that they should be paid in the form of real estate. Clearly, the
anguish, and serious anxiety for which plaintiffs should be adjudged and entitled to moral damages allegations in their Complaint failed to sufficiently show that they have interest of whatever kind over the
in the sum of not less than Php100,000.00 each. properties of respondents. Given these, petitioners’ claim that their action involves interest over a real property
is unavailing. Thus, the Court quotes with approval the CA’s ratiocination with respect to the same:
8. That defendants’ ingratitude and unjustified refusal to pay plaintiffs x x x their compensation or
commission for twenty five years service as administrators and had successfully found a developer As to their weak claim of interest over the property, it is apparent that their only interest is to be compensated
of defendants’ property but only to be dismissed, plaintiffs were compelled to institute this action for their long-term administration of the properties. They do not claim an interest in the properties themselves
and incur expenses as well as attorney’s fees in the sum of Php100,000.00. but merely payment for their services, such payment they compute to be equivalent to five (5%) percent of the
value of the properties. Under Section 1, Rule 4 of the Rules of Court, a real action is an action affecting title
PRAYER to or possession of real property, or interest therein. These include partition or condemnation of, or foreclosure
of mortgage on, real property. Plaintiffs-appellants’ interest is obviously not the one contemplated under the
WHEREFORE, it is respectfully prayed that after due hearing, judgment be rendered against defendants
rules on jurisdiction.
jointly and severally in favor of the plaintiffs, as follows:
Petitioners’ demand is below the jurisdictional amount required for RTCs outside of Metro Manila,
a. To pay plaintiffs their compensation or commission in the form of real estate from Lot No. 1782-
hence, the RTC concerned in this case has no jurisdiction over petitioners’ Complaint.
B subdivision equivalent to five percent of twenty four hectares properties under their
administration; To determine whether the RTC in this case has jurisdiction over petitioners’ Complaint, respondents correctly
argued that the same be considered vis-à-vis Section 19(8) of BP 129, which provides:
b. To pay plaintiffs moral damages in the amount of not less than Php100,000.00 each;
SEC. 19. Jurisdiction in Civil Cases. – Regional Trial Courts shall exercise exclusive original jurisdiction:
c. Attorney’s fee and litigation expenses in the amount of not less than Php100,000.00 each and pay
the costs of suit xxxx
x x x x (Italics and Emphases supplied) (8) In all other cases in which the demand, exclusive of interests, damages of whatever kind, attorney’s fees,
litigation expenses, and costs or the value of the property exceeds One hundred thousand pesos (₱100,000.00)
The Court in Ungria v. Court of Appeals37 restated the criterion laid down in Singson v. Isabela Sawmill 38 to
or, in such other cases in Metro Manila, where the demand, exclusive of the abovementioned items exceeds
ascertain if an action is capable or not of pecuniary estimation, viz:
Two hundred thousand pesos (₱200,000.00).
In determining whether an action is one the subject matter of which is not capable of pecuniary estimation this
This jurisdictional amount of exceeding ₱100,000.00 for RTC’s outside of Metro Manila was adjusted to
Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If it is
₱200,000.00 effective March 20, 1999 in pursuance to Section 5 of RA 7691 which further provides:
primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and
whether jurisdiction is in the municipal courts or in the Courts of First Instance would depend on the amount SEC. 5. After five (5) years from the effectivity of this Act, the jurisdictional amounts mentioned in Sec. 19(3),
of the claim. However, where the basic issue is something other than the right to recover a sum of money, (4), and (8); and Sec. 33(1) of Batas Pambansa Blg. 129 as amended by this Act, shall be adjusted to Two
where the money claim is purely incidental to, or a consequence of, the principal relief sought, this Court has hundred thousand pesos (₱200,000.00). Five (5) years thereafter, such jurisdictional amounts shall be adjusted
considered such actions as cases where the subject of the litigation may not be estimated in terms of money, further to Three hundred thousand pesos (₱300,000.00): Provided, however, That in the case of Metro Manila,
and are cognizable exclusively by Courts of First Instance (now Regional Trial Courts). the abovementioned jurisdictional amounts shall be adjusted after five (5) years from the effectivity of this Act
to Four hundred thousand pesos (₱400,000.00).
It can be readily seen from the allegations in the Complaint that petitioners’ main purpose in filing the same is
to collect the commission allegedly promised them by respondents should they be able to sell Lot No. 1782-B, Hence, when petitioners filed their Complaint on September 3, 2001, the said increased jurisdictional amount
as well as the compensation for the services rendered by Severino, Araceli and Arnel for the administration of was already effective. The demand in their Complaint must therefore exceed ₱200,000.00 in order for it to fall
respondents’ properties. Captioned as a Complaint for Collection of Agent’s Compensation, Commission and under the jurisdiction of the RTC.
Damages, it is principally for the collection of a sum of money representing such compensation and
commission. Indeed, the payment of such money claim is the principal relief sought and not merely incidental Petitioners prayed that they be paid five percent of the total purchase price of Lot No. 1782-B. However, since
to, or a consequence of another action where the subject of litigation may not be estimated in terms of money. the Complaint did not allege that the said property has already been sold, as in fact it has not yet been sold as
In fact, petitioners in this case estimated their claim to be equivalent to five percent of the purchase price of respondents contend, there is no purchase price which can be used as basis for computing the five percent that
petitioners are claiming. Nevertheless and as mentioned, petitioners were able to attach to their Complaint a G.R. No. 195834, November 09, 2016
copy of the tax declaration for Lot No. 1782-B showing a total market value of ₱3,550,072.00. And since "the
fair market value is the price at which a property may be sold by a seller, who is not compelled to sell, and GUILLERMO SALVADOR, REMEDIOS CASTRO, REPRESENTED BY PAZ "CHIT" CASTRO,
bought by a buyer, who is not compelled to buy," the RTC correctly computed the amount of petitioners’
LEONILA GUEVARRA, FELIPE MARIANO, RICARDO DE GUZMAN, VIRGILIO JIMENEZ,
claim based on the property’s market value. And since five percent of ₱3,550,072.00 is only ₱177,503.60 or REPRESENTED BY JOSIE JIMENEZ, ASUNCION JUAMIZ, ROLANDO BATANG,
below the jurisdictional amount of exceeding ₱200,000.00 set for RTCs outside of Metro Manila, the RTC in
CARMENCITA SAMSON, AUGUSTO TORTOSA, REPRESENTED BY FERNANDO TORTOSA,
this case has no jurisdiction over petitioners’ claim. SUSANA MORANTE, LUZVIMINDA BULARAN, LUZ OROZCO, JOSE SAPICO, LEONARDO
There is no merit to petitioners’ averment that their demand for moral damages should be included in the PALAD, ABEL BAKING, REPRESENTED BY ABELINA BAKING, GRACIANO ARNALDO,
computation of their total claims. Paragraph 8, Section 19 of BP 129 expressly speaks of demand which is REPRESENTED BY LUDY ARNALDO, JUDITH HIDALGO, AND IGMIDIO JUSTINIANO,
exclusive of damages of whatever kind. This exclusion was later explained by the Court in Administrative CIRIACO MIJARES, REPRESENTED BY FREDEZWINDA MIJARES, JENNIFER MORANTE,
Circular No. 09-94 dated June 14, 1994 as follows: TERESITA DIALA, AND ANITA P. SALAR, Petitioners, v. PATRICIA, INC., RESPONDENT. THE
CITY OF MANILA AND CIRIACO C. MIJARES, Intervenors-Appellees.
2. The exclusion of the term "damages of whatever kind" in determining the jurisdictional amount under
Section 19 (8) and Section 33 (1) of B.P. Blg. 129, as amended by R.A. No. 7691, applies to cases where the DECISION
damages are merely incidental to or a consequence of the main cause of action. However, in cases where the
claim for damages is the main cause of action, or one of the causes of action, the amount of such claim shall be
considered in determining the jurisdiction of the court. BERSAMIN, J.:

Here, the moral damages being claimed by petitioners are merely the consequence of respondents’ alleged Jurisdiction over a real action is determined based on the allegations in the complaint of the assessed value of
non-payment of commission and compensation the collection of which is petitioners’ main cause of action. the property involved. The silence of the complaint on such value is ground to dismiss the action for lack of
Thus, the said claim for moral damages cannot be included in determining the jurisdictional amount. jurisdiction because the trial court is not given the basis for making the determination.
In view of the foregoing, the CA did not err in affirming the RTC’s conclusion that it has no jurisdiction over
petitioners’ claim. The Case

The CA’s affirmance of the RTC’s findings that the Complaint states no cause of action and that Araceli and
For review is the decision promulgated on June 25, 2010  and the resolution promulgated on February 16, 2011
Arnel have no authority to sue in behalf of Severino’s other heirs cannot be raised in this Petition.
in CA-G.R. CV No. 86735, whereby the Court of Appeals (CA) dismissed the petitioners' complaint in Civil
As pointed out by respondents, petitioners tailed to question in their Motion for Reconsideration before the CA Case No. 96-81167, thereby respectively reversing and setting aside the decision rendered on May 30, 2005 by
its affirmance of the RTC's findings that the Complaint states no cause of action and that Araceli and Arne! the Regional Trial Court (RTC), Branch 32, in Manila,3 and denying their motion for reconsideration.
have no authority to sue in behalf of the other heirs of Severino. Suffice it to say that ''prior to raising these
arguments before this Court, they should have raised the matter in their Motion for Reconsideration in order to Antecedents
give the appellate court an opportunity to correct its ruling. For them to raise these issues be tore this Court
now would be improper, since they failed to do so be tore the CA."
The CA adopted the summary by the RTC of the relevant factual and procedural antecedents, as follows:
WHEREFORE, the Petition for Review on Certiorari is DENIED and the assailed Decision dated July 6, 2005
and the Resolution dated April 5, 2006 of the Court of Appeals in CA-G.R. CV No. 75126 are AFFIRMED. This is an action for injunction and quieting of title to determine who owns the property occupied by the
plaintiffs and intervenor, Ciriano C. Mijares.
SO ORDERED.

Additionally, to prevent the defendant Patricia Inc., from evicting the plaintiffs from their respective
improvements along Juan Luna Street, plaintiffs applied for a preliminary injunction in their Complaint
pending the quieting of title on the merits.

The complaint was amended to include different branches of the Metropolitan Trial Courts of Manila. A
Complaint-in-Intervention was filed by the City of Manila as owner of the land occupied by the plaintiffs.
Another Complaint-in-Intervention by Ciriano Mijares was also filed alleging that he was similarly situated as
the other plaintiffs.

A preliminary injunction was granted and served on all the defendants.

Based on the allegations of the parties involved, the main issue to be resolved is whether the improvements of
the plaintiffs stand on land that belongs to Patricia Inc., or the City of Manila. Who owns the same? Is it
covered by a Certificate of Title?
All parties agreed and admitted in evidence by stipulation as to the authenticity of the following documents: WHEREFORE, premises considered, We hereby REVERSE and SET ASIDE the decision dated May 30,
2005 of the Regional Trial Court of Manila, Branch 32. Civil Case No. 96-81167 is hereby DISMISSED for
(1) Transfer Certificate of Title No. 44247 in the name of the City of Manila; utter want of merit. Accordingly, the questioned order enjoining Patricia and all other person/s acting on its
stead (sic) to refrain and desist from evicting or ejecting plaintiffs/appellees in Patricia's own land and from
(2) Transfer Certificate of Title No. 35727 in the name of Patricia Inc.;
(3) Approved Plan PSD-38540; and collecting rentals is LIFTED effective immediately.
(4) Approved Subdivision Plan PCS-3290 for Ricardo Manotok.
No costs.
The issue as to whether TCT 35727 should be cancelled as prayed for by the plaintiffs and intervenor, Ciriano
C. Mijares is laid to rest by agreement of the parties that this particular document is genuine and duly SO ORDERED.
executed. Nonetheless, the cancellation of a Transfer Certificate of Title should be in a separate action before
another forum. The CA denied the motions for reconsideration of the petitioners and intervenor Mijares through the assailed
resolution of February 16, 2011.
Since the Transfer Certificates of Title of both Patricia Inc. and the City of Manila are admitted as genuine, the
question now is: Where are the boundaries based on the description in the respective titles? Hence, this appeal by the petitioners.

To resolve the question about the boundaries of the properties of the City of Manila and respondent Patricia,
Issues
Inc., the RTC appointed, with the concurrence of the parties, three geodetic engineers as commissioners,
namely: Engr. Rosario Mercado, Engr. Ernesto Pamular and Engr. Delfin Bumanlag.5 These commissioners
ultimately submitted their reports. The petitioners maintain that the CA erred in dismissing the complaint, arguing that the parties had openly
raised and litigated the boundary issue in the RTC, and had thereby amended the complaint to conform to the
evidence pursuant to Section 5, Rule 10 of the Rules of Court; that they had the sufficient interest to bring the
On May 30, 2005, the RTC rendered judgment in favor of the petitioners and against Patricia, Inc.,
suit for quieting of title because they had built their improvements on the property; and that the RTC correctly
permanently enjoining the latter from doing any act that would evict the former from their respective premises, relied on the reports of the majority of the commissioners.
and from collecting any rentals from them. The RTC deemed it more sound to side with two of the
commissioners who had found that the land belonged to the City of Manila, and disposed:
On its part, the City of Manila urges the Court to reinstate the decision of the RTC. It reprises the grounds
relied upon by the petitioners, particularly the application of Section 5, Rule 10 of the Rules of Court.
WHEREFORE, it is hereby ORDERED:

In response, Patricia, Inc. counters that the boundary dispute, which the allegations of the complaint eventually
1. Defendant Patricia Inc. and other person/s claiming under it, are PERMANENTLY boiled down to, was not proper in the action for quieting of title under Rule 63, Rules of Court; and that
ENJOINED to REFRAIN and DESIST from any act of EVICTION OR
Section 5, Rule 10 of the Rules of Court did not apply to vest the authority to resolve the boundary dispute in
EJECTMENT of the PLAINTIFFS in the premises they occupy; the RTCC.

2. Defendant Patricia Inc. STOP COLLECTING any rentals from the plaintiffs who may
seek reimbursement of previous payments in a separate action subject to the ownership of In other words, did the CA err m dismissing the petitioners' complaint?
the City of Manila and;
Ruling of the Court
3. Attorney's fees of P10,000.00 to each plaintiff and intervenor, Ciriano Mijares;
P20,000.00 to the City of Manila. (emphasis ours) The appeal lacks merit.

No pronouncement as to costs. 1.
Jurisdiction over a real action depends on
SO ORDERED. the assessed value of the property involved
as alleged in the complaint
Decision of the CA
The complaint was ostensibly for the separate causes of action for injunction and for quieting of title. As such,
the allegations that would support both causes of action must be properly stated in the complaint. One of the
On appeal, the CA, in CA-G.R. CV No. 86735, reversed the RTC's judgment, and dismissed the complaint. important allegations would be those vesting jurisdiction in the trial court.
The CA declared that the petitioners were without the necessary interest, either legal or equitable title, to
maintain a suit for quieting of title; castigated the RTC for acting like a mere rubber stamp of the majority of
the commissioners; opined that the RTC should have conducted hearings on the reports of the commissioners; The power of a court to hear and decide a controversy is called its jurisdiction, which includes the power to
ruled as highly improper the adjudication of the boundary dispute in an action for quieting of title; and determine whether or not it has the authority to hear and determine the controversy presented, and the right to
decreed: decide whether or not the statement of facts that confer jurisdiction exists, as well as all other matters that arise
in the case legitimately before the court. Jurisdiction imports the power and authority to declare the law, to (3) In all actions in admiralty and maritime jurisdiction where he demand or claim exceeds twenty thousand
expound or to apply the laws exclusive of the idea of the power to make the laws, to hear and determine issues pesos (P20,000.00);
of law and of fact, the power to hear, determine, and pronounce judgment on the issues before the court, and (4) In all matters of probate, both testate and intestate, where the gross value of the estate exceeds twenty
the power to inquire into the facts, to apply the law, and to pronounce the judgment.
thousand pesos (P20,000.00);
(5) In all actions involving the contract of marriage and marital relations;
But judicial power is to be distinguished from jurisdiction in that the former cannot exist without the latter and (6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising judicial or
must of necessity be exercised within the scope of the latter, not beyond it.
quasi-judicial functions;
(7) In all civil actions and special proceedings falling within the exclusive original jurisdiction of a Juvenile
Jurisdiction is a matter of substantive law because it is conferred only by law, as distinguished from venue, and Domestic Relations Court and of the Courts of Agrarian Relations as now provided by law; and
which is a purely procedural matter. The conferring law may be the Constitution, or the statute organizing the
(8) In all other cases in which the demand, exclusive of interest and costs or the value of the property in
court or tribunal, or the special or general statute defining the jurisdiction of an existing court or tribunal, but it
must be in force at the time of the commencement of the action.Jurisdiction cannot be presumed or implied, controversy, amounts to more than twenty thousand pesos (P20,000.00).
but must appear clearly from the law or it will not be held to exist,but it may be conferred on a court or
tribunal by necessary implication as well as by express terms. It cannot be conferred by the agreement of the For the purpose of determining jurisdiction, the trial court must interpret and apply the law on jurisdiction in
parties; or by the court's acquiescence; or by the erroneous belief of the court that it had jurisdiction; or by the relation to the averments or allegations of ultimate facts in the complaint regardless of whether or not the
waiver of objections; or by the silence of the parties. plaintiff is entitled to recover upon all or some of the claims asserted therein. Based on the foregoing provision
of law, therefore, the RTC had jurisdiction over the cause of action for injunction because it was one in which
The three essential elements of jurisdiction are: one, that the court must have cognizance of the class of cases the subject of the litigation was incapable of pecuniary estimation. But the same was not true in the case of the
to which the one to be adjudged belongs; two, that the proper parties must be present; and, three, that the point cause of action for the quieting of title, which had the nature of a real action — that is, an action that involves
decided must be, in substance and effect, within the issue. The test for determining jurisdiction is ordinarily the the issue of ownership or possession of real property, or any interest in real property — in view of the
nature of the case as made by the complaint and the relief sought; and the primary and essential nature of the expansion of the jurisdiction of the first level courts under Republic Act No. 7691, which amended Section
suit, not its incidental character, determines the jurisdiction of the court relative to it. 33(3) of Batas Pambansa Blg. 129 effective on April 15, 1994,32 to now pertinently provide as follows:

Jurisdiction may be classified into original and appellate, the former being the power to take judicial Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial
cognizance of a case instituted for judicial action for the first time under conditions provided by law, and the Courts in Civil Cases. -
latter being the authority of a court higher in rank to re-examine the final order or judgment of a lower court
that tried the case elevated for judicial review. Considering that the two classes of jurisdiction are exclusive of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts shall exercise:
each other, one must be expressly conferred by law. One does not flow, nor is inferred, from the other.
(3) Exclusive original jurisdiction in all civil actions which involve title to, possession of, real property,
Jurisdiction is to be distinguished from its exercise.When there is jurisdiction over the person and subject or any interest therein where the assessed value of the property or interest therein does not exceed
matter, the decision of all other questions arising in the case is but an exercise of that jurisdiction.Considering Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed value does
that jurisdiction over the subject matter determines the power of a court or tribunal to hear and determine a not exceeds (sic) Fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind,
particular case, its existence does not depend upon the regularity of its exercise by the court or tribunal. The attorneys fees, litigation expenses and costs: x x x
test of jurisdiction is whether or not the court or tribunal had the power to enter on the inquiry, not whether or
not its conclusions in the course thereof were correct, for the power to decide necessarily carries with it the
power to decide wrongly as well as rightly. In a manner of speaking, the lack of the power to act at all results As such, the determination of which trial court had the exclusive original jurisdiction over the real action is
in a judgment that is void; while the lack of the power to render an erroneous decision results in a judgment dependent on the assessed value of the property in dispute.
that is valid until set aside. That the decision is erroneous does not divest the court or tribunal that rendered it
of the jurisdiction conferred by law to try the case. Hence, if the court or tribunal has jurisdiction over the civil An action to quiet title is to be brought as a special civil action under Rule 63 of the Rules of Court. Although
action, whatever error may be attributed to it is simply one of judgment, not of jurisdiction; appeal, Section 1 of Rule 63 specifies the forum to be "the appropriate Regional Trial Court," the specification does
not certiorari, lies to correct the error. not override the statutory provision on jurisdiction. This the Court has pointed out in Malana v. Tappa,34 to
wit:
The exclusive original jurisdiction of the RTC in civil cases is conferred and provided for in Section 19 of
Batas Pambansa Blg. 129 (Judiciary Reorganization Act of 1980), viz.: To determine which court has jurisdiction over the actions identified in the second paragraph of Section 1,
Rule 63 of the Rules of Court, said provision must be read together with those of the Judiciary Reorganization
Sec. 19. Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive original jurisdiction: Act of 1980, as amended.

(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation; It is important to note that Section 1, Rule 63 of the Rules of Court does not categorically require that an action
to quiet title be filed before the RTC. It repeatedly uses the word "may"- that an action for quieting of title
(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, except
"may be brought under [the] Rule" on petitions for declaratory relief, and a person desiring to file a petition for
actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is declaratory relief "may x x x bring an action in the appropriate Regional Trial Court." The use of the word
conferred upon Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts;
"may" in a statute denotes that the provision is merely permissive and indicates a mere possibility, an The refusal of the petitioners to accept the severance would have led to the dismissal of the case conformably
opportunity or an option. with the mandate of Section, Rule 17 of the Rules of Court, to wit:

In contrast, the mandatory provision of the Judiciary Reorganization Act of 1980, as amended, uses the word Section 3. Dismissal due to fault of plaintiff. - If, for no justifiable cause, the plaintiff fails to appear on the
shall and explicitly requires the MTC to exercise exclusive original jurisdiction over all civil actions which date of the presentation of his evidence in chief on the complaint, or to prosecute his action for an
involve title to or possession of real property where the assessed value does not exceed P20,000.00, thus: unreasonable length of time, or to comply with these Rules or any order of the court, the complaint may be
dismissed upon motion of the defendant or upon the court's own motion, without prejudice to the right of the
xxxx defendant to prosecute his counterclaim in the same or in a separate action. This dismissal shall have the effect
of an adjudication upon the merits, unless otherwise declared by the court. (3a)

As found by the RTC, the assessed value of the subject property as stated in Tax Declaration No. 02-48386 is
only P410.00; therefore, petitioners Complaint involving title to and possession of the said property is within 3.
The petitioners did not show that they were real parties in interest to demand either injunction or
the exclusive original jurisdiction of the MTC, not the RTC.
quieting of title

The complaint of the petitioners did not contain any averment of the assessed value of the property. Such
Even assuming that the RTC had jurisdiction over the cause of action for quieting of title, the petitioners failed
failure left the trial court bereft of any basis to determine which court could validly take cognizance of the
cause of action for quieting of title. Thus, the RTC could not proceed with the case and render judgment for to allege and prove their interest to maintain the suit. Hence, the dismissal of this cause of action was
warranted.
lack of jurisdiction. Although neither the parties nor the lower courts raised jurisdiction of the trial court in the
proceedings, the issue did not simply vanish because the Court can hereby motu proprio consider and resolve
it now by virtue of jurisdiction being conferred only by law, and could not be vested by any act or omission of An action to quiet title or remove the clouds over the title is a special civil action governed by the second
any party. paragraph of Section 1, Rule 63 of the Rules of Court. Specifically, an action for quieting of title is essentially
a common law remedy grounded on equity. The competent court is tasked to determine the respective rights of
the complainant and other claimants, not only to put things in their proper place, to make the one who has no
2.
The joinder of the action for injunction and the action to quiet title was disallowed by the Rules of Court rights to said immovable respect and not disturb the other, but also for the benefit of both, so that he who has
the right would see every cloud of doubt over the property dissipated, and he could afterwards without fear
introduce the improvements he may desire, to use, and even to abuse the property as he deems best. But "for
Another noticeable area of stumble for the petitioners related to their having joined two causes of action, i.e., an action to quiet title to prosper, two indispensable requisites must concur, namely: (1) the plaintiff or
injunction and quieting of title, despite the first being an ordinary suit and the latter a special civil action under complainant has a legal or an equitable title to or interest in the real property subject of the action; and (2) the
Rule 63. Section 5, Rule 2 of the Rules of Court disallowed the joinder, viz.: deed, claim, encumbrance, or proceeding claimed to be casting cloud on his title must be shown to be in fact
invalid or inoperative despite its prima facie appearance of validity or legal efficacy.
Section 5. Joinder of causes of action. — A party may in one pleading assert, in the alternative or otherwise, as
many causes of action as he may have against an opposing party, subject to the following conditions: The first requisite is based on Article 477 of the Civil Code which requires that the plaintiff must have legal or
equitable title to, or interest in the real property which is the subject matter of the action. Legal title denotes
(a) The party joining the causes of action shall comply with the rules on joinder of parties; registered ownership, while equitable title means beneficial ownership,38 meaning a title derived through a
valid contract or relation, and based on recognized equitable principles; the right in the party, to whom it
belongs, to have the legal title transferred to him.
(b) The joinder shall not include special civil actions or actions governed by special rules;
To determine whether the petitioners as plaintiffs had the requisite interest to bring the suit, a resort to the
(c) Where the causes of action arc between the same parties but pertain to different venues or jurisdictions, the allegations of the complaint is necessary. In that regard, the complaint pertinently alleged as follows:
joinder may be allowed in the Regional Trial Court provided one of the causes of action falls within the
jurisdiction of said court and the venue lies therein; and
THE CAUSE OF ACTION

(d) Where the claims in all the causes of action arc principally for recovery of money, the aggregate amount
claimed shall he the test of jurisdiction. 5. Plaintiffs are occupants of a parcel of land situated at Juan Luna Street, Gagalangin, Tondo (hereinafter
"subject property");

Consequently, the RTC should have severed the causes of action, either upon motion or motu proprio, and
tried them separately, assuming it had jurisdiction over both. Such severance was pursuant to Section 6, Rule 2 6. Plaintiffs and their predecessor-in-interest have been in open and notorious possession of the subject
of the Rules of Court, which expressly provides: property for more than thirty (30) years;

Section 6. Misjoinder of causes of action. -- Misjoinder of causes of action is not a ground for dismissal of an 7. Plaintiffs have constructed in good faith their houses and other improvements on the subject property;
action. A misjoined cause of action may, on motion of a party or on the initiative of the court, be severed and
proceeded with separately. (n)
8. The subject property is declared an Area for Priority Development (APD) under Presidential Decree No. 21. The plaintiffs and the defendants are not required to undergo conciliation proceeding before the
1967, as amended; Katarungan Pambarangay prior to the filing of this action.40

9. Defendant is claiming ownership of the subject property by virtue of Transfer Certificate of Title (TCT) No. The petitioners did not claim ownership of the land itself, and did not show their authority or other legal basis
35727 of the Registry of Deeds for the City of Manila. x x x on which they had anchored their alleged lawful occupation and superior possession of the property. On the
contrary, they only contended that their continued possession of the property had been for more than 30 years;
that they had built their houses in good faith; and that the area had been declared an Area for Priority
10. Defendant's claim of ownership over the subject property is without any legal or factual basis because,
assuming but not conceding that the TCT No. 35727 covers the subject property, the parcel of land covered by Development (APD) under Presidential Decree No. 1967, as amended. Yet, none of such reasons validly
clothed them with the necessary interest to maintain the action for quieting of title. For one, the authenticity of
and embraced in TCT No. 35727 has already been sold and conveyed by defendant and, under the law, TCT
No. 35727 should have been cancelled; the title of the City of Manila and Patricia, Inc. was not disputed but was even admitted by them during trial.
As such, they could not expect to have any right in the property other than that of occupants whose possession
was only tolerated by the owners and rightful possessors. This was because land covered by a Torrens title
11. By virtue of TCT No. 35727, defendant is evicting, is about to evict or threatening to evict the plaintiffs cannot b e acquired by prescription or by adverse possession.41 Moreover, they would not be builders entitled
from the said parcel of land; to the protection of the Civil Code as builders in good faith. Worse for them, as alleged in the respondent's
comments,42 which they did not deny, they had been lessees of Patricia, Inc. Such circumstances indicated that
12. Because of the prior sales and conveyances, even assuming but not conceding that the subject property is they had no claim to possession in good faith, their occupation not being in the concept of owners.
covered by and embraced in Transfer Certificate of title No. 35727, defendant cannot lawfully evict the
plaintiffs from the subject property since it no longer owns the subject property; At this juncture, the Court observes that the fact that the area was declared an area for priority development
(APD) under Presidential Decree No. 1967, as amended, did not provide sufficient interest to the petitioners.
13. Any attempted eviction of the plaintiffs from the subject property would be without legal basis and When an area is declared as an APD, the occupants would enjoy the benefits provided for in Presidential
consequently, would only be acts of harassment which are contrary to morals, good customs and public policy Decree No. 1517 (Proclaiming Urban land Reform in the Philippines and Providing for the Implementing
and therefore, plaintiffs are entitled to enjoin the defendant from further harassing them; Machinery Thereof). In Frilles v. Yambao,43 the Court has summarized the salient features of Presidential
Decree No. 1517, thus:

14. Plaintiffs recently discovered that the subject property is owned by the City of Manila and covered by and
embraced in Transfer Certificate of Title No. 44247, a copy of which is attached hereto as Annex "B", of the P. D. No. 1517, which took effect on June 11, 1978, seeks to protect the rights of bona-fide tenants in urban
Registry of Deeds for the City of Manila; lands by prohibiting their ejectment therefrom under certain conditions, and by according them preferential
right to purchase the land occupied by them. The law covers all urban and urbanizable lands which have been
proclaimed as urban land reform zones by the President of the Philippines. If a particular property is within a
15. TCT No. 35727 which is apparently valid and effective is in truth and in fact invalid, ineffective, voidable declared Area for Priority Development and Urban Land Reform Zone, the qualified lessee of the said
or unenforceable, and constitutes a cloud on the rights and interests of the plaintiffs over the subject property; property in that area can avail of the right of first refusal to purchase the same in accordance with
Section 6 of the same law. Only legitimate tenants who have resided for ten years or more on specific
16. Plaintiffs are entitled to the removal of such cloud on their rights and interests over the subject property; parcels of land situated in declared Urban Land Reform Zones or Urban Zones, and who have built their
homes thereon, have the right not to be dispossessed therefrom and the right of first refusal to purchase
the property under reasonable terms and conditions to be determined by the appropriate government
17. Even assuming, but not admitting, that defendant owns the subject property, it cannot evict the plaintiffs agency. [Bold emphasis supplied]
from the subject property because plaintiffs' right to possess the subject property is protected by Presidential
Decree No. 2016.
Presidential Decree No. 1517 only granted to the occupants of APDs the right of first refusal, but such grant
was true only if and when the owner of the property decided to sell the property. Only then would the right of
18. Even assuming, but not admitting, that defendant owns the subject property, it cannot evict the plaintiffs first refusal accrue. Consequently, the right of first refusal remained contingent, and was for that reason
from the subject property without reimbursing the plaintiffs for the cost of the improvements made upon the insufficient to vest any title, legal or equitable, in the petitioners.
subject property;

Moreover, the CA's adverse judgment dismissing their complaint as far as the action to quiet title was
19. Because of defendant's unwarranted claim of ownership over the subject property and its attempt to evict concerned was correct. The main requirement for the action to be brought is that there is a deed, claim,
or disposses the plaintiffs from the subject property, plaintiffs experienced mental anguish, serious anxiety, encumbrance, or proceeding casting cloud on the plaintiffs' title that is alleged and shown to be in fact invalid
social humiliation, sleepless nights and loss of appetite for which defendant should be ordered to pay each or inoperative despite its prima facie appearance of validity or legal efficacy, the eliminates the existence of
plaintiff the amount of P20,000.00 as moral damages; the requirement. Their admission of the genuineness and authenticity of Patricia, Inc.'s title negated the
existence of such deed, instrument, encumbrance or proceeding that was invalid, and thus the action must
20. Because of defendant's unwarranted claim of ownership over the subject property and its attempt to evict necessarily fail.
or disposses the plaintiffs from the subject property, plaintiffs were constrained to litigate to protect their rights
and interests, and hire services of a lawyer, for which they should each be awarded the amount of P10,000.00. 4.
The petitioners did not have a cause of action for injunction
The petitioners did not also make out a case for injunction in their favor.

The nature of the remedy of injunction and the requirements for the issuance of the injunctive writ have been
expounded in Philippine Economic Zone Authority v. Carantes,44 as follows:

Injunction is a judicial writ, process or proceeding whereby a party is directed either to do a particular act, in
which case it is called a mandatory injunction or to refrain from doing a particular act, in which case it is
called a prohibitory injunction. As a main action, injunction seeks to permanently enjoin the defendant through
a final injunction issued by the court and contained in the judgment. Section 9, Rule 58 of the 1997 Rules of
Civil Procedure, as amended, provides, G.R. No. 197022, January 15, 2020

SEC. 9. When final injunction granted. If after the trial of the action it appears that the applicant is entitled to PHILIPPINE-JAPAN ACTIVE CARBON CORPORATION, PETITIONER, v. HABIB BORGAILY,
have the act or acts complained of permanently enjoined, the court shall grant a final injunction perpetually RESPONDENT.
restraining the party or person enjoined from the commission or continuance of the act or acts or confirming
the preliminary mandatory injunction. DECISION

Two (2) requisites must concur for injunction to issue: (1) there must be a right to be protected and (2) the CARANDANG, J.:
acts against which the injunction is to be directed are violative of said right. Particularly, in actions involving
realty, preliminary injunction will lie only after the plaintiff has fully established his title or right thereto by a Before Us is a Petition for Review on Certiorari filed by petitioner Philippine-Japan Active Carbon
proper action for the purpose. [Emphasis Supplied] Corporation assailing, the Decision dated Feb1uary 25, 2011 of the Court of Appeals (CA) in CA-G.R. SP No.
01315 dismissing the complaint of petitioner for lack of jurisdiction.
Accordingly, the petitioners must prove the existence of a right to be protected. The records show, however,
that they did not have any right to be protected because they had established only the existence of the Antecedents
boundary dispute between Patricia, Inc. and the City of Manila. Any violation of the boundary by Patricia,
Inc., if any, would give rise to the right of action in favor of the City of Manila only. The dispute did not On July 17, 2002, Philippine-Japan Active Carbon Corporation (petitioner) leased two apartment units from
concern the petitioners at all. Habib Borgaily (respondent) for P15,000.00 each unit. The two lease contracts have a lease period from
August 1, 2002 to August 1, 2003. To secure faithful compliance of the obligations of petitioner under the
5. lease contracts, a security deposit was required, to wit:
Section 5, Rule 10 of the Rules of Court did not save the day for the petitioners 19. Upon signing hereof, the LESSEE shall pay a deposit of FORTY FIVE THOUSAND PESOS (P45,000.00)
as a security for the faithful performance by the LESSEE of his obligations herein provide[d], as well as to
answer for any liability or obligation that the LESSEE may incur to third parties arising from or regarding the
The invocation of Section 5, Rule 10 of the Rules of Court in order to enable the raising of the boundary use of the subject premises. Accordingly, said deposit may not be applied to any rental due under this contract
dispute was unwarranted. First of all, a boundary dispute should not be litigated in an action for the quieting of and shall be refunded to the LESSEE only upon termination hereof after ascertaining that the latter has no
title due to the limited scope of the action. The action for the quieting of title is a tool specifically used to further obligations under this contract or to any person or entity from or regarding the use of the premises.
remove of any cloud upon, doubt, or unce1iainty affecting title to real property; 45 it should not be used for any
other purpose. And, secondly, the boundary dispute would essentially seek to alter or modify either the Petitioner deposited the amount of P90,000.00 as security deposit for the two apartment units.
Torrens title of the City of Manila or that of Patricia, Inc., but any alteration or modification either way should
be initiated only by direct proceedings, not as an issue incidentally raised by the parties herein. To allow the
boundary dispute to be litigated in the action for quieting of title would violate Section 48 46 of the Property The lease contract was not renewed after the expiration of the lease on August 1, 2003. However, petitioner
Registration Decree by virtue of its prohibition against collateral attacks on Torrens titles. A collateral attack still occupied the premises until October 31, 2003.
takes place when, in another action to obtain a different relief, the certificate of title is assailed as an incident
in said action.47 This is exactly what the petitioners sought to do herein, seeking to modify or otherwise cancel
Patricia, Inc.'s title. After vacating the premises, petitioner asked respondent to return the amount of P90,000.00. Petitioner alleged
that it has no outstanding obligation to any person or entity relative to the use of the apartment units to which
the security deposit may be held accountable.
WHEREFORE, the Court AFFIRMS the decision promulgated on June 25, 2010 by the Court of Appeals in
CA-G.R. CV No. 86735; and ORDERS the petitioners to pay the costs of suit. As counterclaim in his Answer, respondent claimed that petitioner failed to comply with its obligations in the
lease contracts, such as keeping the apartment units "neat[-]looking" and keeping the lawns and hedges
SO ORDERED. watered and trimmed. Petitioner was also obliged to keep the leased premises in good and tenantable
condition. Further, upon termination of the lease, the lessee should surrender the leased premises to the lessor
in a good and tenantable condition with the exception of ordinary fair wear and tear.
Respondent alleged that when petitioner vacated the leased premises, the same was destroyed and rendered
inhabitable. As such, respondent had to make the necessary repairs amounting to P79,534.00 to the units. Upon Petition for Review under Rule 42 to the CA, petitioner ascribed to the RTC grave abuse of discretion
Respondent furnished petitioner with the receipts of the expenses incurred from the labor and materials for the when it ruled that the claim for the refund of the security deposit has already been offset by the amount
repair of the units. Hence, respondent had the right to withhold the release of the deposits due to the violation respondent spent for the repairs, and when the RTC ruled that defendant is entitled to nominal damages.
of the terms and conditions of the lease agreements. However, the CA in its Decision 17 dated February 25, 2011, resolved the case completely different from the
raised errors by petitioner. The CA held that the pivotal issue was whether the MTCC has jurisdiction over the
Respondent claimed that when petitioner leased the two apartment units, the latter made respondent believe complaint. The CA ruled that the allegations in petitioner's complaint make out a case for breach of contract
that the apartment units were going to be occupied by petitioner's executives and their families while assigned and, therefore, an action for specific performance is an available remedy. As such, the same is an action
in Davao City. Instead, petitioner used the apartment units as staff houses. The use and occupancy of the incapable of pecuniary estimation. Therefore, the MTCC has no jurisdiction over the case. The action for sum
apartment units became hazardous because petitioner's occupants, recklessly and with impunity, disregarded of money representing the security deposit is merely incidental to the main action for specific
all norms of decent living in apartments and destroyed the units. Thus, as counterclaim, respondent claimed performance.20 Thus, the CA dismissed the case for lack of jurisdiction, to wit:
that he had the right to withhold the refund of the security deposit amounting to P90,000.00 and apply the WHEREFORE, the instant petition is DENIED. The Decision dated August 16, 2006 and the Order dated
same to the cost of the repairs amounting to P79,534.00. September 19, 2006 of the RTC are SET ASIDE. The Decision dated May 20, 2005 of the MTCC is also SET
ASIDE. The Complaint is DISMISSED for lack of jurisdiction.
Since respondent refused to return the security deposit, petitioner filed an action for collection of sum of SO ORDERED.
money equivalent to the amount of the security deposit against the respondent.
Aggrieved by the CA Decision, petitioner filed a Petition for Review on Certiorari before this Court, alleging
that the nature of its complaint is one for collection of sum of money and attorney's fees, and not one for
MTCC ruling breach of contract. Petitioner claimed that the lease contracts were already terminated at the time of
respondent's refusal to return the security deposit.24 Since an action of breach of contract presupposes the
In a Decision dated May 20, 2005, the Municipal Trial Court Cities (MTCC) of Davao City, 11th Judicial existence of a contract, and that breach must be committed during the effectivity of the same, petitioner's
Region, Branch 1, found that respondent had the obligation to return the security deposit. Under the lease action for the return of the security deposit cannot be considered as an action for breach of contract.
agreement, it is provided that the security deposit shall be returned after the expiration of the lease. The lease
agreement does not authorize the outright withholding of the security deposit by the lessor if it appears to him
Respondent, in his Comment, claimed that the ruling of the CA that the action is one for breach of contract is
that the terms and conditions of the lease are violated. The lessor should first bring it to the proper forum to
determine whether the lease contracts were violated, thus: correct. However, respondent has a legal and justifiable reason to withhold the refund of the security deposits,
because petitioner vandalized the leased units and destroyed the same when the latter left the premises.
WHEREFORE, judgment is hereby rendered m favor of the plaintiff and against the defendant:
a.) Ordering the defendant to refund plaintiff its security deposit in the amount of Ninety Thousand Pesos Issues
(P90,000.00) with interest at twelve percent (12%) per annum, until refunded in full;
b.) Ordering the defendant to pay plaintiff the amount of Ten Thousand Pesos (P10,000.00) as attorney's fees The issues for Our resolution are: (1) whether the MTCC has jurisdiction over the case; and (2) whether the
plus cost of suit. RTC was correct when it offset the amount of the security deposit with the amount of the repairs made by the
respondent, plus the amount of nominal damages awarded to respondent.
SO ORDERED.
RTC ruling Ruling of the Court

In a Decision dated August 16, 2006, the Regional Trial Court (RTC) of Davao City, 11 th Judicial Region, In order to determine whether the subject matter of an action is one which is capable of pecuniary estimation,
Branch 13, reversed the ruling of the MTCC. The RTC held that, according to Paragraph 19 of the lease the nature of the principal action or remedy sought must be considered. If it is primarily for recovery of a sum
agreements, the security deposit is for the faithful performance by the lessee of its obligations under the lease of money, then the claim is considered as capable of pecuniary estimation, and the jurisdiction lies with the
agreement.Respondent had the right to withhold the deposit until his claim for damages to the units which municipal trial courts if the amount of the claim does not exceed P300,000.00 outside Metro Manila, and does
were not caused by ordinary wear and tear have been reimbursed. The pictures showing the damage to the not exceed P400,000.00 within Metro Manila. However, where the basic issue of the case is something other
leased premises presented by the respondent during the hearing showed that when petitioner vacated the than the right to recover a sum of money, where the money claim is merely incidental to the principal relief
premises, the same were in need of major repairs. Furthermore, the RTC found that the major repairs were all sought, then the subject matter of the action is not capable of pecuniary estimation, and is within the
covered by receipts, which convinced the court that respondent spent P79,534.00 for the repairs for the two jurisdiction of the RTC.
apartment units, thus: The CA held that the allegations of the complaint filed by petitioner make out a case for breach of contract
WHEREFORE, the decision of the court a quo is hereby reversed and set aside. where an action for specific performance is an available remedy. Since the same is incapable of pecuniary
estimation, the same is cognizable by the RTC. The refund of the P90,000.00 security deposit was merely
The court finds that the claim of plaintiff for refund of the amount of P90,000.00 which it paid defendant as
incidental to the main action for specific performance.
security deposit for the two apartment units which plaintiff leased, had already been offset by amount of
The CA was mistaken in appreciating the facts of the case. Contrary to its ruling, a perusal of the complaint
P79,534.00 which defendant spent for the repairs of the leased premises and the nominal damage in the
filed by petitioner makes out a case for collection of sum of money and not for breach of contract. It is to be
amount of P11,464.00 which the court hereby awards to defendant. Plaintiff and defendant have therefore no
noted that the lease agreement had already expired when petitioner filed an action for the return of the security
more claims against each other.
deposit. Since the lease had already expired, there is no more contract to breach.30 The demand for the return of
SO ORDERED. the security deposit was merely a collection suit. What the petitioner prayed for before the MTCC was the
return of the amount of P90,000.00, and not to compel respondent to comply with his obligation under the
CA ruling
lease agreement. As such, the CA erred when it held that the MTCC has no jurisdiction over the case and
dismissed the same for lack of jurisdiction

Respondent pleaded as counterclaim in his answer the cost of the repairs amounting to P79,534.00, which he
incurred in fixing the two units leased by the petitioner. Petitioner rendered the two apartment units hazardous
because petitioner recklessly and with impunity disregarded all norms of decent living. Petitioner destroyed
the two apartment units and rendered it inhabitable and in need of major repairs. Thus, while respondent must
return the security deposit to petitioner, respondent had the right to withhold the same and to apply it to the
damages incurred by the apartment units occupied by petitioner. The RTC found that respondent spent a total
of P79,534.00 for the repairs on the leased premises. Petitioner, when it occupied the apartment units,
Recovery of possession
acknowledged that the leased premises were in good and tenantable condition. Petitioner shouldered all
expenses for repairs of the apartment units, regardless of its nature, and that upon termination of the lease,
petitioner must surrender the premises, also in the same good and tenantable condition when taken, with the [G.R. No. 183357 : March 15, 2010]
exception of ordinary wear and tear. However, photographs of the extent of the damage on the leased premises HONORIO BERNARDO, PETITIONER, VS. HEIRS OF EUSEBIO VILLEGAS, RESPONDENTS.
presented during trial showed that when petitioner vacated the apartment units, they were in need of major
repairs. The repairs undertaken by respondent were all covered by receipts, which the latter furnished to DECISION
petitioner. The failure of petitioner to inspect the repairs undertaken by respondent, despite notice of the same,
bars petitioner to question the propriety of the repairs on the apartment units. Therefore, the RTC was correct PEREZ, J.:
when it ordered the offsetting of the P90,000.00 security deposit to the expenses of the repairs amounting to
P79,534.00. This petition for review on certiorari under Rule 45 of the Rules of Court seeks to assail the validity
of the Decision dated 21 April 2008 of the Court of Appeals, which affirmed the judgment of the Regional
However, the award of nominal damages has no basis. It has been settled that nominal damages cannot co- Trial Court (RTC) of Binangonan, Rizal in Civil Case No. R-00-035.
exist with actual damages.31 Nominal damages are adjudicated in order that a right of the plaintiff, which has
been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him. Since respondent has already been indemnified for the This controversy stemmed from a Complaint dated 14 November 2000 for accion publiciana filed
damages made on the leased premises, there is no more reason to further grant nominal damages. by respondent Heirs of Eusebio Villegas against petitioner Honorio Bernardo, Romeo Gaza (Gaza) and
Monina Francisco (Francisco). Respondents had earlier filed an ejectment case against the trio, docketed as
Since respondent must return the security deposit of P90,000.00 less than the cost of repairs amounting to Civil Case No. 99-065 with the Municipal Trial Court (MTC) of Binangonan, Rizal, which case was dismissed
P79,534.00, the remaining amount of P10,466.00, should still be returned by respondent to petitioner. on the ground of lack of jurisdiction for having been filed beyond the one-year prescriptive period for filing a
forcible entry case
WHEREFORE, the Decision dated February 25, 2011 of the Court of Appeals in CA-G.R. SP No. 01315
dismissing the complaint and holding that the case is one for specific performance incapable of pecuniary Respondents alleged in the Complaint that their father, Eusebio Villegas, is the registered owner of
estimation and, therefore, within the original jurisdiction of the Regional Trial Court is a parcel of land covered by Transfer Certificate of Title (TCT) No. 46891 with an area of 18,369 square meters
hereby REVERSED and SET ASIDE. Accordingly, the Decision dated August 16, 2006 of the Regional and situated in Barangay Pag-asa, Binangonan, Rizal; that petitioner, by stealth and in the guise of merely
Trial Court of Davao City, Branch 13 in Civil Case No. 31, 103-2005 is AFFIRMED with grazing his cattle, surreptitiously entered into possession of a portion of respondents' land; that petitioner
MODIFICATION. The security deposit in the amount of P90,000.00 has already been offset by the amount conspired and confederated with Gaza and Francisco by illegally constructing their own houses on the subject
of P79,534.00 as expenses for the repairs of the apartment units. Nevertheless, respondent Habib Borgaily land; that the issue of possession was brought to the barangay for conciliation but no settlement was reached
is ORDERED to return the amount of P10,466.00, the remaining amount of the security deposit, to petitioner by the parties; and that petitioner, Gaza and Francisco had forcibly, unlawfully and unjustly possessed and
Philippine-Japan Active Carbon Corporation. continue to possess the subject property and had refused to vacate the same.

SO ORDERED. In his Answer, petitioner denied taking possession of any portion of the property of respondents. He
argued that the cause of action is barred by the judgment in the ejectment case. He claimed that he had been in
possession of his land since the early 1950s. As he did before the MTC, petitioner also alleged lack of
jurisdiction on the part of the RTC.

Gaza alleged that he has been occupying an abandoned river bed adjacent to the property allegedly
owned by respondents. Gaza averred that he entered into a written agreement with petitioner, who claimed to
own the land and allowed him to build a nipa hut thereon.

An ocular inspection was conducted by the trial court judge. On 5 March 2007, the trial court
rendered judgment in favor of respondents and ordered petitioner, Gaza and Francisco to vacate the subject
land covered by TCT No. 46891 and to pay jointly and severally respondents the amount of P30,000.00 as
attorney's fees and the cost of suit.
 The trial court held that the suit, being an accion publiciana, falls within its jurisdiction. It found forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred
that the houses of petitioner and Gaza were inside the titled property of respondents. Its findings were based on upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts.
the testimony of one of the respondents, Estelito Villegas; the relocation plan prepared by Engineer Rico J.
Rasay; and the Technical Report on Verification Survey submitted by Engineer Robert C. Pangyarihan, Under the law as modified, jurisdiction is determined by the assessed value of the property.
petitioner's own witness. The trial court noted that petitioner failed to present any title or tax declaration to
prove ownership or possessory right.
A reading of the complaint shows that respondents failed to state the assessed value of the disputed
land. The averments read
On appeal, the Court of Appeals affirmed the ruling of the trial court.
xxxx
In his appeal, petitioner questioned the jurisdiction of the trial court over the subject matter and
argued that in their complaint, the respondents failed to state the assessed value of the property in dispute. The
3. EUSEBIO VILLEGAS, deceased father of hte plaintiffs, is the registered owner of a parcel of
appellate court ruled that petitioner is estopped from raising the issue of jurisdiction because he failed to file a
land situated in Barangay Pag-asa (formerly Barangay Tayuman), Binangonan, Rizal with a land area of
motion to dismiss on such ground and, instead, actively participated in the proceedings before the trial court.
18,369 square meters. The same is covered by and embraced in Transfer Certificate of Title No. 46891 of the
Registry of Deeds for the Province of Rizal. x x x.
With respect to the argument that being indispensable parties, all of the heirs of Eusebio Villegas
should have been impleaded as parties, the appellate court disagreed and invoked Article 487 of the Civil
4. Plaintiffs are the legal heirs of EUSEBIO VILLEGAS and succeeded to the subject parcel of land
Code, which provides that any one of the co-owners may bring an action for ejectment. The appellate court
by virtue of their inheritance rights as compulsory heirs of said deceased Eusebio Villegas and upon his death,
construed said provision to cover all kinds of actions for recovery of possession.
immediately took over and were enjoying the peaceful possession of the said parcel of land and exercising said
rights of possession and ownership thereof;
The appellate court sustained the trial court's finding that the portions of the land occupied by
petitioner and Gaza are owned by respondents. The appellate court likewise ruled that respondents could not
5. That sometime in 1996, defendant Honorio Bernardo, by stealth and in guise of merely grazing
be guilty of laches considering that Estelito Villegas, upon seeing for the first time in 1996 that petitioner was
his cattle, without the consent of the plaintiffs, surreptitiously entered into the possession of a portion of the
already building his house on the premises, verbally asked him to discontinue the construction.
subject parcel of land. Employing threats and intimidations, he claimed later that the area he illegally occupied
is purportedly not part and parcel of the land owned by the plaintiff's predecessor, Eusebio Villegas, and
His motion for reconsideration having been denied, petitioner filed the instant petition. forcibly fenced and built his house on the portion of land he illegally occupied;

Petitioner insists that the trial court had no jurisdiction over the subject matter of the action for 6. Not being content with his own forcible and unlawful invasion, usurpation and incursion into the
failure of respondents to allege the assessed value of the property involved in their complaint. Petitioner belies plaintiffs' parcel of land, and in furtherance of his desire to forcibly exclude the plaintiffs of their lawful and
the ruling of the appellate court that he failed to raise objections before the trial court. Petitioner reiterates that for possession of the subject portion of plaintiffs' parcel of land, defendant Bernardo, conspired and
he raised the defense of lack of jurisdiction as early as in his Answer filed before the trial court. Moreover, he confederated with defendants Romeo Gaza and Monina Francisco by surreptitiously and illegally constructing
argues that even if he did not raise the defense of lack of jurisdiction, the trial court should have dismissed the their own houses on the subject parcel of land through stealth and intimidation;
complaint motu proprio. Petitioner disputes the application to him of the doctrine of estoppel by laches
in Tijam v. Sibonghanoy. Petitioner avers that unlike in Tijam, he raised the issue of jurisdiction, not only in
7. That the issue of the possession of the subject parcel of land was brought under the Barangay
his answer, but also in his appeal. 
Justice System in 1996 for conciliation but, no settlement was reached by the parties. Copies of the
Certifications issued by the Barangay for that matter is hereto attached and marked as Annex "B";
Respondents defend the ruling of the Court of Appeals and maintain that petitioner is estopped from
challenging the jurisdiction of the trial court.
8. That the defendants have forcibly, unlawfully, and unjustly dispossessed and still continues to
forcibly, unlawfully, and unjustly dispossesses the plaintiffs of their lawful rights of possession and ownership
The issue presented before this Court is simple: Whether or not estoppel bars petitioner from raising on a portion of the subject property since 1966 up to the present;
the issue of lack of jurisdiction.
9. Because of the unjust refusal of the defendants to vacate the premises, plaintiffs were constrained
Under Batas Pambansa Bilang 129, the plenary action of accion publiciana must be brought before to engage the services of counsel to protect their interest on the property for an agreed attorney's fee of
the regional trial courts. With the modifications introduced by Republic Act No. 7691 [14] in 1994, the P50,000.00, and have incurred litigation expenses[;]
jurisdiction of the regional trial courts was limited to real actions where the assessed value exceeds
P20,000.00, and P50,000.00 where the action is filed in Metro Manila, thus
10. By reason of the unlawful and forcible invasion by the defendants of the property of the
plaintiffs which was accompanied by threats and intimidation, the plaintiffs have suffered and continue to
SEC. 19. Jurisdiction in civil cases. -- Regional Trial Courts shall exercise exclusive original suffer anxiety and sleepless nights for which the defendants should be made to indemnify by way of moral
jurisdiction: damages in the amount of at least P100,000.00;

(2) In all civil actions which involve the title to, or possession of, real property, or any interest 11. To serve as an example to others who might be minded to commit similar wanton and unlawful
therein, where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or, for acts, defendants should be held answerable for exemplary damages of not less than P50,000.00.[15]
civil actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except actions for
 This fact was noted by the Court of Appeals in its Decision but it proceeded to rule in this wise Moreover, petitioner did not bring up the issue of jurisdictional amount that would have led the MTC to
proceed with the trial of the case. Petitioner obviously considered the dismissal to be in his favor. When, as a
Records show that at the time plaintiffs-appellees filed their complaint below, R.A. No. 7691 which result of such dismissal, respondents brought the case as accion publiciana before the RTC, petitioner never
amended Batas Pambansa Blg. 129 was already in effect. However, the complaint failed to allege the assessed brought up the issue of jurisdictional amount. What petitioner mentioned in his Answer before the RTC was
value of the real property involved. Although appellant indeed raised the issue of jurisdiction in his answer, he the generally phrased allegation that "the Honorable Court has no jurisdiction over the subject matter and the
had not filed a motion to dismiss on this ground nor reiterated the matter thereafter but actively participated in nature of the action in the above-entitled case."[23]
the proceedings after the denial of his demurrer to evidence anchored on the failure of the plaintiffs to identify
in their complaint all the heirs of the registered owner and supposed lack of technical description of the This general assertion, which lacks any basis, is not sufficient. Clearly, petitioner failed to point out
property in the certificate of title. Indeed, appellant is now estopped to question the trial court's jurisdiction the omission of the assessed value in the complaint. Petitioner actively participated during the trial by
over the subject matter and nature of the case having actively pursued throughout the trial, by filing various adducing evidence and filing numerous pleadings, none of which mentioned any defect in the jurisdiction of
pleadings and presenting all relevant documentary and testimonial evidence, his theory that the portion the RTC. It was only on appeal before the Court of Appeals, after he obtained an adverse judgment in the trial
occupied by him is not covered by the torrens title of Eusebio Villegas.[16] court, that petitioner, for the first time, came up with the argument that the decision is void because there was
no allegation in the complaint about the value of the property.
We agree
Clearly, petitioner is estopped from questioning the jurisdiction of the RTC.
As already shown, nowhere in the complaint was the assessed value of the subject property ever
mentioned. There is no showing on the face of the complaint that the RTC has jurisdiction exclusive of the We note that the decisions of the RTC and of the Court of Appeals discussed extensively the merits
MTC. Indeed, absent any allegation in the complaint of the assessed value of the property, it cannot readily be of the case, which has been pending for nearly ten (10) years. It was handled by two (2) judges and its records
determined which of the two trial courts had original and exclusive jurisdiction over the case.[17] had to be reconstituted after the fire that gutted the courthouse. [24] If we were to accede to petitioner's prayer,
all the effort, time and expenses of parties who participated in the litigation would be wasted. Quite obviously,
The general rule is that the jurisdiction of a court may be questioned at any stage of the proceedings. petitioner wants a repetition of the process hoping for the possibility of a reversal of the decision. The Court
 Lack of jurisdiction is one of those excepted grounds where the court may dismiss a claim or a case at any
[18] will not countenance such practice.
time when it appears from the pleadings or the evidence on record that any of those grounds exists, even if
they were not raised in the answer or in a motion to dismiss. [19] The reason is that jurisdiction is conferred by Significantly, the Technical Report on Verification Survey [25] by Engineer Robert C. Pangyarihan,
law, and lack of it affects the very authority of the court to take cognizance of and to render judgment on the which was attached to and formed part of the records, contained a tax declaration [26] indicating that the subject
action.[20] property has an assessed value of P110,220.00. It is basic that the tax declaration indicating the assessed value
of the property enjoys the presumption of regularity as it has been issued by the proper government agency.
However, estoppel sets in when a party participates in all stages of a case before challenging the
[27]
 Under Republic Act No. 7691, the RTC in fact has jurisdiction over the subject matter of the action.
jurisdiction of the lower court. One cannot belatedly reject or repudiate its decision after voluntarily submitting
to its jurisdiction, just to secure affirmative relief against one's opponent or after failing to obtain such relief. Taking into consideration the decision of the MTC proclaiming that the case is one
The Court has, time and again, frowned upon the undesirable practice of a party submitting a case for decision for accion publiciana and the assessed value of the property as evidenced by the case records, jurisdiction
and then accepting the judgment, only if favorable, and attacking it for lack of jurisdiction when adverse.[21] pertains, rightfully so, with the RTC. Perforce, the petition should be denied.

In Tijam, the Court held that it is iniquitous and unfair to void the trial court's decision for lack of WHEREFORE, the decision of the Court of Appeals dated 21 April 2008, affirming the judgment
jurisdiction considering that it was raised only after fifteen (15) years of tedious litigation, thus of the Regional Trial Court of Binangonan, Rizal dated 5 March 2007, is AFFIRMED.

The facts of this case show that from the time the Surety became a quasi-party on July 31, 1948, it
could have raised the question of the lack of jurisdiction of the Court of First Instance of Cebu to take SO ORDERED.
cognizance of the present action by reason of the sum of money involved which, according to the law then in
force, was within the original exclusive jurisdiction of inferior courts. It failed to do so. Instead, at several
stages of the proceedings in the court a quo as well as in the Court of Appeals, it invoked the jurisdiction of
said courts to obtain affirmative relief and submitted its case for a final adjudication on the merits. It was only
after an adverse decision was rendered by the Court of Appeals that it finally woke up to raise the question of
jurisdiction. Were we to sanction such conduct on its part, We would in effect be declaring as useless all the
proceedings had in the present case since it was commenced on July 19, 1948 and compel the judgment
creditors to go up their Calvary once more. The inequity and unfairness of this is not only patent but revolting.
[22]

The principle of justice and equity as espoused in Tijam should be applied in this case. The MTC
dismissed the ejectment case upon its ruling that the case is for accion publiciana. It did not assert jurisdiction
over the case even if it could have done so based on the assessed value of the property subject of
the accion publiciana. And there was no showing, indeed, not even an allegation, that the MTC was not aware
of its jurisdictional authority over an accion publiciana involving property in the amount stated in the law.
 COSTS against the defendant.SO ORDERED.

On appeal, the Regional Trial Court of Cauayan, Isabela, Branch 20, ruled as follows:

WHEREFORE, judgment is hereby rendered dismissing the case on the ground that as the
Municipal Court had no jurisdiction over the case, this Court acquired no appellate jurisdiction
G.R. No. 169793             September 15, 2006 thereof. Costs against plaintiff-appellee.
VICTORIANO M. ENCARNACION, petitioner, vs.
NIEVES AMIGO, respondent. SO ORDERED.
DECISION
Aggrieved, petitioner filed a petition for review under Rule 42 of the Rules of Court before the Court of
YNARES-SANTIAGO, J.: Appeals which promulgated the assailed Decision remanding the case to the Regional Trial Court. The
dispositive portion thereof reads:
This petition for review assails the June 30, 2005 Decision1 of the Court of Appeals in CA-G.R. SP No. 73857,
ordering the remand of Civil Case No. Br. 20-1194 to the Regional Trial Court of Cauayan, Isabela, Branch WHEREFORE, premises considered, this case is hereby REMANDED to Branch 20, Regional Trial
20, for further proceedings. Court of Cauayan, Isabela for further proceedings.

The antecedent facts are as follows: No costs.

Petitioner Victoriano M. Encarnacion is the registered owner of Lot No. 2121-B-1, consisting of 100 square SO ORDERED.
meters and covered by TCT No. T-256650; and Lot No. 2121-B-2 consisting of 607 square meters with TCT
No. T-256651, located at District 1, National Hi-way, Cauayan, Isabela. Said two lots originally form part of Hence the present petition raising the sole issue:
Lot No. 2121, a single 707 square meter track of land owned by Rogelio Valiente who sold the same to
Nicasio Mallapitan on January 18, 1982. On March 21, 1985, Mallapitan sold the land to Victoriano [WHETHER] THE COURT OF APPEALS ERRED IN HOLDING THAT THE PROPER
Magpantay. After the death of the latter in 1992, his widow, Anita N. Magpantay executed an Affidavit of ACTION IN THIS CASE IS ACCION PUBLICIANA AND NOT UNLAWFUL DETAINER AS
Waiver on April 11, 1995 waving her right over the property in favor of her son-in-law, herein petitioner, DETERMINED BY THE ALLEGATIONS IN THE COMPLAINT FILED BY PETITIONER.
Victoriano Encarnacion. Thereafter, the latter caused the subdivision of the land into two lots3 and the issuance
The petition lacks merit.
of titles in his name on July 18, 1996.
In this jurisdiction, the three kinds of actions for the recovery of possession of real property are:
Respondent Nieves Amigo allegedly entered the premises and took possession of a portion of the property
sometime in 1985 without the permission of the then owner, Victoriano Magpantay. Said occupation by 1. Accion interdictal, or an ejectment proceeding which may be either that for forcible entry
respondent continued even after TCT Nos. T-256650 and T-256651 were issue to petitioner. (detentacion) or unlawful detainer (desahucio), which is a summary action for recovery of physical
possession where the dispossession has not lasted for more than one year, and should be brought in
Consequently, petitioner, through his lawyer sent a letter dated Febuary 1, 2001 demanding that the respondent
the proper inferior court;
vacate the subject property. As evidenced by the registry return receipt, the demand letter was delivered by
registered mail to the respondent on February 12, 2001. Notwithstanding receipt of the demand letter, 2. Accion publiciana or the plenary action for the recovery of the real right of possession, which
respondent still refused to vacate the subject property. Thereafter, on March 2, 2001, petitioner filed a should be brought in the proper Regional Trial Court when the dispossession has lasted for more
complaint for ejectment, damages with injunction and prayer for restraining order with the Municipal Trial than one year; and
Court in Cities of Isabela which was docketed as CV-01-030. In his Answer, respondent alleged that he has
been in actual possession and occupation of a portion of the subject land since 1968 and that the issuance of 3. Accion reinvindicatoria or accion de reivindicacion, which is an action for the recovery of
Free Patent and titles in the name of petitioner was tainted with irregularities. ownership which must be brought in the proper Regional Trial Court.
On October 24, 2001, the Municipal Trial Court in Cities rendered judgment, which reads: Based on the foregoing distinctions, the material element that determines the proper action to be filed for the
recovery of the possession of the property in this case is the length of time of dispossession. Under the Rules
WHERE[FO]RE, there being a preponderance of evidence, a JUDGMENT is hereby rendered in of Court, the remedies of forcible entry and unlawful detainer are granted to a person deprived of the
favor of the plaintiff VICTORIANO M. ENCARNACION and against the defendant NIEVES possession of any land or building by force, intimidation, threat, strategy, or stealth, or a lessor, vendor,
AMIGOE (sic) as follows: vendee, or other person against whom the possession of any land or building is unlawfully withheld after the
expiration or termination of the right to hold possession by virtue of any contract, express or implied, or the
a) ORDERING the defendant to vacate the portion of the parcels of land described in Transfer
legal representatives or assigns of any such lessor, vendor, vendee, or other person. These remedies afford the
Certificates of Title Nos. T-256650 and T-256651 he is now occupying and surrender it to the
person deprived of the possession to file at any time within one year after such unlawful deprivation or
plaintiff;
withholding of possession, an action in the proper Municipal Trial Court against the person or persons
b) ORDERING the defendant to pay the plaintiff the sum of FIVE THOUSAND PESOS (P5,000) unlawfully withholding or depriving of possession, or any person or persons claiming under them, for the
as attorney's fees, and restitution of such possession, together with damages and costs.14 Thus, if the dispossession has not lasted for
more than one year, an ejectment proceeding is proper and the inferior court acquires jurisdiction. On the other
c) ORDERING the defendant to pay rentals equivalent [to] P500.00 per month from February, 2001 hand, if the dispossession lasted for more than one year, the proper action to be filed is an accion
until the portion of the land occupied by him is surrendered to the plaintiff. publiciana which should be brought to the proper Regional Trial Court.
After a careful evaluation of the evidence on record of this case, we find that the Court of Appeals committed If the case was tried on the merits by the lower court without jurisdiction over the subject
no reversible error in holding that the proper action in this case is accion publiciana; and in ordering the matter, the Regional Trial Court on appeal shall not dismiss the case if it has original
remand of the case to the Regional Trial Court of Cauayan, Isabela, Branch 20, for further proceedings. jurisdiction thereof, but shall decide the case in accordance with the preceding section,
without prejudice to the admission of amended pleadings and additional evidence in the
Well settled is the rule that jurisdiction of the court over the subject matter of the action is determined by the interest of justice.
allegations of the complaint at the time of its filing, irrespective of whether or not the plaintiff is entitled to
recover upon all or some of the claims asserted therein. What determines the jurisdiction of the court is the The RTC should have taken cognizance of the case. If the case is tried on the merits by the
nature of the action pleaded as appearing from the allegations in the complaint. The averments therein and the Municipal Court without jurisdiction over the subject matter, the RTC on appeal may no
character of the relief sought are the ones to be consulted. On its face, the complaint must show enough ground longer dismiss the case if it has original jurisdiction thereof. Moreover, the RTC shall no
for the court to assume jurisdiction without resort to parol testimony. longer try the case on the merits, but shall decide the case on the basis of the evidence
presented in the lower court, without prejudice to the admission of the amended pleadings and
From the allegations in the complaint, it appears that the petitioner became the owner of the property on April additional evidence in the interest of justice.1
11, 1995 by virtue of the waiver of rights executed by his mother-in-law. He filed the complaint for ejectment
on March 2, 2001 after his February 1, 2001 letter to the respondent demanding that the latter vacate the WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated June 30, 2005 in CA-
premises remained unheeded. While it is true that the demand letter was received by the respondent on G.R. SP No. 73857 ordering the remand of Civil Case No. Br. 20-1194 to the Regional Trial Court of
February 12, 2001, thereby making the filing of the complaint for ejectment fall within the requisite one year Cauayan, Isabela, Branch 20, for further proceedings, is AFFIRMED.
from last demand for complaints for unlawful detainer, it is also equally true that petitioner became the owner
of the subject lot in 1995 and has been since that time deprived possession of a portion thereof. From the date
of the petitioner's dispossession in 1995 up to his filing of his complaint for ejectment in 2001, almost 6 years
have elapsed. The length of time that the petitioner was dispossessed of his property made his cause of action
beyond the ambit of an accion interdictal and effectively made it one for accion publiciana. After the lapse of
the one-year period, the suit must be commenced in the Regional Trial Court via an accion publiciana which is
a suit for recovery of the right to possess. It is an ordinary civil proceeding to determine the better right of
possession of realty independently of title. It also refers to an ejectment suit filed after the expiration of one
year from the accrual of the cause of action or from the unlawful withholding of possession of the realty.

Previously, we have held that if the owner of the land knew that another person was occupying his property
way back in 1977 but the said owner only filed the complaint for ejectment in 1995, the proper action would
be one for accion publiciana and not one under the summary procedure on ejectment. As explained by the
Court:

We agree with the Court of Appeals that if petitioners are indeed the owners of the subject lot and
were unlawfully deprived of their right of possession, they should present their claim before the
regional trial court in an accion publiciana or an accion reivindicatoria, and not before the
metropolitan trial court in a summary proceeding for unlawful detainer or forcible entry. For even if
one is the owner of the property, the possession thereof cannot be wrested from another who had
been in physical or material possession of the same for more than one year by resorting to a
summary action for ejectment. G.R. No. 207269, July 26, 2021
ROSIE COLLANTES LAGUNDI, Petitioner, v. PACITA BAUTISTA, SUBSTITUTED BY HER
Hence, we agree with the Court of Appeals when it declared that:
SURVIVING CHILDREN, LINA JUDITH C. BAUTISTA, EDITH C. BAUTISTA, AND DAVID C.
The respondent's actual entry on the land of the petitioner was in 1985 but it was only on March 2, BAUTISTA, JR., Respondents.
2001 or sixteen years after, when petitioner filed his ejectment case. The respondent should have
filed an accion publiciana case which is under the jurisdiction of the RTC. DECISION

However, the RTC should have not dismissed the case.

LEONEN, J.:
Section 8, Rule 40 of the Rules of Court provides:
Where a party raised the issue of lack of jurisdiction over the subject matter after actively participating in the
SECTION 8. Appeal from orders dismissing case without trial; lack of jurisdiction. — If
proceedings before the courts and only after an adverse judgment against them became final and executory,
an appeal is taken from an order of the lower court dismissing the case without a trial on
then that party invoking it is estopped by laches from doing so.
the merits, the Regional Trial Court may affirm or reverse it, as the case may be. In case
of affirmance and the ground of dismissal is lack of jurisdiction over the subject matter,
the Regional Trial Court, if it has jurisdiction thereover, shall try the case on the merits as This Petition for Review on Certiorari assails the November 15, 2012 Decision and May 3, 2013 Resolution of
if the case was originally filed with it. In case of reversal, the case shall be remanded for the Court of Appeals in CA-G.R. SP No. 114274, which affirmed the December 11, 2009 Order and March 10,
further proceedings. 2010 Order of the Regional Trial Court of Cauayan City, Isabela, Branch 20 in Civil Case No. Br. 20-909.
On January 30, 1997, Pacita Bautista (Bautista), claiming to be the owner of parcels of land situated in WHEREFORE, the Petition is DISMISSED. The assailed Orders dated December 11, 2009 and March 10,
Barangay Cabaruan, Municipality of Cauayan, Isabela, filed a Complaint for "Ownership, Possession and 2010 issued by the Regional Trial Court of Cauayan City, Isabela, Branch 20, in Civil Case No. Br. 20-909
Damages with Prayer for Preliminary Mandatory Injunction and Temporary Restraining Order" before the hereby STAND.
Regional Trial Court of Cauayan City, Isabela, Branch 20, docketed as Civil Case No. Br. 20-909.6 Rosie
Collantes Lagundi (Lagundi) filed an Answer on June 10, 1997, and an Amended Answer with Counterclaim SO ORDERED. (Emphasis in the original)
on November 12, 1997.

The Court of Appeals found Lagundi estopped by laches in assailing the trial court's jurisdiction, since she
On April 20, 1998, Bautista filed an Amended Complaint for "Ejectment, Quieting of Title and Damages with raised the lack of it at the late stage of the proceedings, during execution of judgment. The Court of Appeals
Prayer for Preliminary Mandatory Injunction and Temporary Restraining Order," to which Lagundi filed an
noted that Lagundi did not question the trial court's jurisdiction during the 10-year pendency of the case before
Answer with Counterclaim on July 1, 1998 the Regional Trial Court and Court of Appeals, and raised it only after the decision became final and
executory. She actively participated in the lower court's proceedings by filing responsive pleadings, attending
In a June 22, 2000 Order, the Regional Trial Court denied the motion for summary judgment filed by Bautista conferences, and appealing the adverse decisions against her. The Court of Appeals held that Lagundi
expressly recognized and invoked the jurisdiction of the trial court by filing a counterclaim. Finally, it ruled
that Lagundi was afforded due process and was given ample opportunity to answer both the original and
However, in a January 30, 2001 Decision the trial court granted the motion for reconsideration and rendered a
summary judgment in favor of Bautista, ordering Lagundi to vacate the property. The trial court held that amended complaints filed against her.
Lagundi's mere denial of Bautista's ownership over the subject property was sham, pro forma, and did not raise
any genuine issue as to a material fact. In a May 3, 2013 Resolution, the Court of Appeals denied Lagundi's motion for reconsideration.

In a January 16, 2007 Decision, the Court of Appeals affirmed the trial court's decision granting the summary On July 9, 2013, Lagundi filed a Petition for Review on Certiorari before this Court.
judgment.
In an October 15, 2014 Resolution, Bautista was substituted by her surviving children namely: Lina Judith
In a July 16, 2007 Resolution,this Court, through the First Division, denied Lagundi's petition for review on Bautista, Edith Bautista, and David Bautista, Jr. They filed their Comment on the Petition on February 24,
certiorari for being filed beyond the extended period. The Resolution became final and executory on March 4, 2015. Thereafter, petitioner filed a Reply on May 30, 2017.In a July 26, 2017 Resolution, this Court required
2008, and an Entry of Judgment was subsequently issued. the parties to submit their respective memoranda.

On August 22, 2008, Bautista filed a Motion for the Issuance of a Writ of Execution, 16 which was granted by Petitioner claims that although the judgment sought to be executed attained finality, the Court of Appeals erred
the Regional Trial Court in a December 11, 2009 Order: in affirming the execution by the trial court, because the judgment was void from the beginning for lack of
jurisdiction. Petitioner argues that Bautista filed a forcible entry case, which should have been filed with the
WHEREFORE, finding the motion to be meritorious, the Court hereby GRANTS the motion. Municipal Trial Court at the first instance, and not before the Regional Trial Court.Petitioner insists that the
execution of the decision would be unjust and inequitable, because of the prevailing situation of the
parties. Finally, petitioner argues that even assuming that the judgment is issued with jurisdiction, it would still
The office of the Clerk of Court, Cauayan City, Isabela is hereby Ordered to issue a Writ of Execution be void for violating petitioner's right to due process as the motion for summary judgment was granted without
directing the Sheriff of this Court to implement the same. petitioner being able to present evidence.

SO ORDERED. (Emphasis in the original) On the other hand, respondent's heirs assert their right to defend their interests over the properties, having
executed an Extra-Judicial Settlement of the Estate since respondent died.They argue for the outright dismissal
The Writ of Execution was issued on December 18, 2009. of the petition on the ground of res judicata, since the ownership of the subject property was settled and
restored to respondent, through this Court's Resolution in G.R. No. 177574, Rosie Collantes-Lagundi, et al. v.
Pacita Bautista, which became final and executory on March 4, 2008.
Lagundi filed a Motion for Reconsideration, which the trial court denied in a March 10, 2010 Order.The trial
court stated that the case already became final and executory and that the sheriff had already implemented the
writ of execution as evidenced by the Sheriffs Return dated January 5, 2010. Lagundi also failed to show that In her Reply, petitioner reiterates her arguments in the Petition
she invoked her rights and exhausted the available legal remedies while the case was pending before this
Court. In a June 8, 2018 Memorandum,petitioner emphasizes that although the decision is final and executory, it
cannot be executed since it was void for lack of jurisdiction. Even assuming that the Regional Trial Court had
In a November 15, 2012 Decision, the Court of Appeals affirmed the Orders of the trial court upon finding that jurisdiction, petitioner insists on its non-implementation to prevent injustice.
it did not commit grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the assailed
Orders. The dispositive portion of the Court of Appeals Decision states: In their November 14, 2017 Memorandum, respondent's heirs argue that petitioner did not question the
Regional Trial Court's jurisdiction in the Answer to the Amended Complaint, even until the case reached this
Court. Only when the decision's execution was imminent that petitioner belatedly objected on the ground of
lack of jurisdiction. Nevertheless, respondent's heirs claim that the amended complaint was an action for
quieting of title and possession, which was well within the jurisdiction of the Regional Trial Court.As to
petitioner's allegation of denial of due process, respondent's heirs contend that the records petitioner herself jurisdiction over this action depends on the assessed value of the real property.For injunction, the Regional
attached to the Petition reveal that she answered the complaint and amended complaint, and participated in Trial Court has jurisdiction over such cause of action, because its subject is incapable of pecuniary estimation.
every incident of the case before the courts.
Here, respondent filed an Amended Complaint for "Ejectment, Quieting of Title and Damages with Prayer for
Respondent's heirs reiterate that the Petition is barred by the finality of the decision in G.R. No. Preliminary Mandatory Injunction and Temporary Restraining Order" before the Regional Trial Court on April
177574.Finally, they claim that the implementation of the writ of execution rendered the present case moot and 20, 1998. The Amended Complaint states:
academic.
2. That plaintiff Pacita C. Bautista is the registered owner and occupant of the following described parcels of
The only issue for resolution is whether or not the Court of Appeals erred in finding that petitioner is estopped land situated at Cabaruan, Cauayan, Isabela, and which may be more particularly described as follows:
by laches from assailing the trial court's jurisdiction during the execution of judgment.
PARCEL ONE ........... A PARCEL OF COMMERCIAL LAND containing an area of 56,222 square meters,
We deny the Petition. more or less, covered by TRANSFER CERTIFICATE OF TITLE NO. T-143059 of the Register of Deed of
Isabela, declared for taxation under TAX DECLARATION NO. 94-07435;
Jurisdiction over the subject matter of a complaint or "the power to hear and determine cases of the general
class to which the proceedings in question belong" is conferred by law, and not by mere consent of the PARCEL TWO .......... CONTAINING an area of 123,778 square meter, more or less, covered by TRANSFER
parties.  Being conferred by law, the issue of jurisdiction over the subject matter may be raised at any stage of CERTIFICATE OF TITLE NO. T-143060 of the Register of Deeds of Isabela;
the proceedings, during trial or on appeal, and is not lost by waiver or by estoppel. Lack of jurisdiction over
the subject matter is one of the exceptional grounds when the court may dismiss a case at any time, if it
PARCEL THREE .......... CONTAINING AN AREA OF 7,903 square meters, more or less, covered by
appears from the pleadings or evidence on record that this ground exists. More so, a party challenging a court's TRANSFER CERTIFICATE OF TITLE NO. T-143058 of the Register of Deeds of Isabela;
lack of jurisdiction is not estopped, where that party does not secure any advantage or the adverse party does
not suffer any harm.
PARCEL FOUR .......... CONTAINING an area of 2,193 square meters, more or less, covered by TRANSFER
CERTIFICATE OF TITLE NO. T-143061 of the Register of Deeds of Isabela.
To determine whether a court has jurisdiction over the subject matter, the material allegations of the complaint
must be examined, along with the relief sought by the party, and the law in force at the commencement of the
action. Courts must apply the law on jurisdiction in relation to the allegations of ultimate facts in the which are the plaintiff, Pacita C. Bautista 's paraphernal properties, copies of the corresponding Transfer
complaint, regardless of whether the party is entitled to recover upon some or all of the claims asserted in the Certificate of Title No. which are herewith attached as Annexes '"A", "B", "C", and "D"
complaint.
3. That plaintiff Pacita C. Bautista is in physical possession and dominion of all of the above described four (4)
Under Republic Act No. 7691,Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial parcels of land continuously and adversely in the concept of owner, some for more than forty (40) years and
Courts have exclusive original jurisdiction over cases of forcible entry and unlawful detainer, and "in all civil even had a portion, thereof, leased to Caltex, Philippines, for twenty (20) years, which leased had already
actions which involve title to, or possession of, real property, or any interest therein where the assessed value expired, had the frontage of the parcel adjacent to the National Highway fenced with concrete hollowblocks
of the property or interest therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil actions in and installed a steel gate with that prohibition written in bold letters on the steel gate: "NO TRESPASSING
Metro Manila, where such assessed value does not exceed Fifty thousand pesos (P50,000.00)[.]" PRIVATE PROPERTY";

On the other hand, the Regional Trial Courts exercise exclusive original jurisdiction in all civil actions where 4. That, unfortunately, on January 10, 1997, without prior notice nor permission from the plaintiff Pacita C.
the subject of the litigation is incapable of pecuniary estimation, and those "which involve the title to, or Bautista, and in utter disregard, defiance and violation of the prohibition of "NO TRESPASSING" placed by
possession of, real property, or any interest therein, where the assessed value of the property involved exceeds said plaintiff on her steel gate installed on the properties in question, the defendants, confederating and helping
Twenty thousand pesos (P20,000,00) or for civil actions in Metro Manila, where such value exceeds Fifty one another, thru stealth and strategy, surreptitiously, clandestinely and unlawfully entered the properties of
thousand pesos (P50,000.00)." the aforesaid plaintiff and put-up a barbed wire perimeter fence by placing it on top of the hollow blocks fence
of said plaintiff and proceeded to retrace the "NO TRESPASSING" prohibition placed by said plaintiff with
white paint and adding the words "Collantes and Lagundi property", on the steel gate, fence and standing walls
There are three kinds of action to recover possession of real property: (1) an action for ejectment, either for of the plaintiff, to deceptively make it appear that they own the property in question to the great damage and
unlawful detainer or forcible entry, when the dispossession lasted for not more than a year; (2) accion
prejudice of said plaintiff; that several days thereafter, said defendants maliciously and feloniously dumped on
publiciana, a plenary action for recovery of real right of possession, when dispossession lasted for more than the property in question about five (5) truckloads of gravel with the intention of putting up a structure thereon;
one year; and (3) accion reivindicatoria, or an action for recovery of ownership.

5. That sometime on December 3, 1997, defendants maliciously and unlawfully registered with Register of
In the special civil action for ejectment, title to the property is not involved, and jurisdiction is vested with the Deeds of Isabela, adverse claim on the three (3) other titles of the said plaintiff, namely, TCT-T-143060, T-
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts. On the other hand, the
143058 and T-143061 aside from T-143059 which was the subject of the original complaint, with the obvious
assessed value of the real property determines which court has jurisdiction over accion publiciana and accion intention to harass the said plaintiff, hence, there is a need to further amend the complaint to include the three
reivindicatoria. Similarly, an action for quieting of title involves the issue of ownership or possession of real
(3) other titles, if only, to avoid multiplicity of suits;
property, or any interest in real property, and the determination of the court which has exclusive original
6. That, under this new scenario of events, said plaintiff seeks to take refuge under the legal benefits of Article The doctrine of laches or of "stale demands" is based upon grounds of public policy which requires, for the
476, Chapter 3 of the New Civil Code of the Philippines under the topic "Quieting of Title" quoted hereunder: peace of society, the discouragement of stale claims and, unlike the statute of limitations, is not a mere
question of time but is principally a question of the inequity or unfairness of permitting a right or claim to be
enforced or asserted.
7. That defendants have shown positive designs of encroaching into and taking the law into their own hands in
forcibly taking possession of the lands in question, hence, all these things being done by the defendants against
and prejudicial to the said plaintiff, have cast a cloud on the titles of the said plaintiff on the lands in question, It has been held that a party cannot invoke the jurisdiction of a court to secure affirmative relief against his
which justice demands must be removed and quieted; opponent and, after obtaining or failing to obtain such relief, repudiate or question that same jurisdiction (Dean
vs. Dean, 136 Or. 694, 86 A.L.R. 79). In the case just cited, by way of explaining the rule, it was further said
that the question whether the court had jurisdiction either of the subject-matter of the action or of the parties
8. That despite conciliatory steps taken by the plaintiff with the Barangay Lupon of Cabaruan, Cauayan,
Isabela, no amicable settlement had been reached, as per Barangay Certification herewith attached as Annex was not important in such cases because the party is barred from such conduct not because the judgment or
order of the court is valid and conclusive as an adjudication, but for the reason that such a practice cannot be
"E";
tolerated —obviously for reasons of public policy.

9. That, by reason of the afore-mentioned unlawful acts of the defendants, said plaintiff has no other
Furthermore, it has also been held that after voluntarily submitting a cause and encountering an adverse
immediate and adequate remedy in law other than to ask that the said unlawful acts of the defendants be
restrained and enjoined forthwith from committing further acts of dispossession against the plaintiff[.] decision on the merits, it is too late for the loser to question the jurisdiction or power of the court (Pease vs.
Rathbun-Jones etc. 243 U.S. 273, 61 L. 5, 37 S. Ct. 283; St. Louis etc. vs. McBride, 141 U.S. 127, 35 L. Ed.
659). And in Littleton vs. Burgess, the Court said that it is not right for a party who has affirmed and invoked
Although the caption includes ejectment, the Amended Complaint was filed on April 20, 1998, more than a the jurisdiction of a court in a particular matter to secure an affirmative relief, to afterwards deny that same
year after the dispossession on January 10, 1997. Thus, the Amended Complaint can only be either accion jurisdiction to escape a penalty.
publiciana or accion reivindicatoria, and an action for quieting of title, where jurisdiction will depend on the
assessed value of the real property.However, the Amended Complaint here did not indicate the assessed value
Upon this same principle is what We said in the three cases mentioned in the resolution of the Court of
of the real properties involved.
Appeals of May 20, 1963 (supra) — to the effect that we frown upon the "undesirable practice" of a party
submitting his case for decision and then accepting the judgment, only if favorable, and attacking it for lack of
In Salvador v. Patricia, Inc., the Regional Trial Court could not proceed with the case and render judgment for jurisdiction, when adverse — as well as in Pindañgan etc. vs. Dans et al., G. R. L-14591, September 26,
lack of jurisdiction, since petitioners' complaint did not aver the assessed value of the property, and there was 1962; Montelibano et al. vs. Bacolod-Murcia Milling Co., Inc., G. R. L-15092; Young Men Labor Union etc.
no basis to determine which court had jurisdiction over the cause of action for quieting of title. vs. the Court of Industrial Relations et al., G. R. L-20307, Feb. 26, 1965, and Mejia vs. Lucas, 100 Phil. p.
277.
Similarly, in Regalado v. Dela Pena, it could not be determined which court had exclusive original jurisdiction
over respondents' action as the assessed value of the properties was likewise not alleged in the complaint. This The facts of this case show that from the time the Surety became a quasi-party on July 31, 1948, it could have
Court ruled that the Regional Trial Court had no jurisdiction because courts cannot simply take judicial notice raised the question of the lack of jurisdiction of the Court of First Instance of Cebu to take cognizance of the
of the assessed value or market value of a land, and jurisdiction cannot be presumed or conferred on the court's present action by reason of the sum of money involved which, according to the law then in force, was within
erroneous belief that it had jurisdiction over a case. the original exclusive jurisdiction of inferior courts. It failed to do so. Instead, at several stages of the
proceedings in the court a quo as well as in the Court of Appeals, it invoked the jurisdiction of said courts to
In this case, petitioner is correct in saying that the Regional Trial Court had no jurisdiction over the subject obtain affirmative relief and submitted its case for a final adjudication on the merits. It was only after an
matter of the case, not for the reason she invokes, but because the assessed value of the real properties adverse decision was rendered by the Court of Appeals that it finally woke up to raise the question of
involved was not averred. jurisdiction. Were We to sanction such conduct on its part, We would in effect be declaring as useless all the
proceedings had in the present case since it was commenced on July 19, 1948 and compel the judgment
creditors to go up their Calvary once more. The inequity and unfairness of this is not only patent but
Even so, petitioner is estopped by laches from assailing the Regional Trial Court's lack of jurisdiction. revolting. (Emphasis in the original)

Based on equity, estoppel by laches bars a party from invoking the court's lack of jurisdiction over the subject Figueroa v. People of the Philippines, however, clarified that: "[t]he general rule should, however, be, as it has
matter when there is "failure or neglect, for an unreasonable and unexplained length of time, to do that which, always been, that the issue of jurisdiction may be raised at any stage of the proceedings, even on appeal, and is
by the exercising due diligence, could or should have been done earlier," or in cases of similar factual not lost by waiver or by estoppel. Estoppel by laches, to bar a litigant from asserting the court's absence or lack
circumstances as Tijam v. Sibonghanoy: of jurisdiction, only supervenes in exceptional cases similar to the factual milieu of Tijam v. Sibonghanoy."

A party may be estopped or barred from raising a question in different ways and for different reasons. Thus, In Romago, Inc. v. Siemens Building, this Court applied the exception, considering that petitioner actively
we speak of estoppel in pais, of estoppel by deed or by record, and of estoppel by laches. participated in the proceedings before the arbitrator, yet it was only in its petition for certiorari with the Court
of Appeals and after a writ of execution had been issued, that petitioner raised the issue of lack of jurisdiction.
Laches, in a general sense, is failure or neglect, for an unreasonable and unexplained length of time, to do that
which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to In Bernardo v. Heirs of Villegas,petitioner was likewise found estopped from questioning the jurisdiction of
assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has the Regional Trial Court. There, petitioner actively participated during the trial by filing numerous pleadings
abandoned it or declined to assert it. and adducing evidence, but failed to mention the defect in its jurisdiction. Upon an adverse judgment against
petitioner in the trial court, they then raised the nullity of the decision due to the complaint's omission of the ) jurisdiction;
assessed value before the Court of Appeals. (5 the claimant knew or had constructive knowledge of which forum possesses subject matter
) jurisdiction;
(6 irreparable damage will be caused to the other party who relied on the forum and the claimant's
In Far East Bank and Trust Co. v. Chua, estoppel by laches was also decreed when respondent actively
participated in the proceedings before a commission, and assailed the commission's jurisdiction after it ruled ) implicit waiver.
against it twice.
This Court emphasized that the edict in Tijam is not an exception to the rule on jurisdiction, but it is a waiver
Thus, in Amoguis v. Ballado, this Court explained: or an estoppel in questioning jurisdiction, when the circumstances in Tijam are present.81 Thus, in ruling that
estoppel by laches set in, Tijam held that petitioners did not question the jurisdiction of the Regional Trial
Court during trial and on appeal despite the apparent lack of jurisdiction on the face of the complaint. There,
In estoppel by laches, a claimant has a right that he or she could otherwise exercise if not for his or her delay in petitioners even sought affirmative relief from the Regional Trial Court and actively participated in all stages
asserting it. This delay in the exercise of the right unjustly misleads the court and the opposing party of its of the proceedings, and only 22 years after the complaint was filed did they raise without justification the
waiver. Thus, to claim it belatedly given the specific circumstances of the case would be unjust...[F]airness court's lack of jurisdiction.
and equity must temper the parties' bravado to raise jurisdiction when they have participated in proceedings in
the lower courts or when an unfavorable judgment against them has been rendered.
In Spouses Rebamonte v. Spouses Lucero, the exceptional circumstances in Tijam were found present when
petitioners failed to invoke the ground of lack of jurisdiction for 22 years, without justification, despite having
Amoguis then cited cases when this Court considered estoppel by laches, and summarized the circumstances to full knowledge of it, and participating in every stage of the proceedings before the courts by filing Answers
consider in applying Tijam, thus: with affirmative reliefs, Motions for Reconsideration, and Appeal.

Thus, Tijam will only apply when given the circumstances of a case, allowing the belated objection to the Here, petitioner never questioned the Regional Trial Court's jurisdiction during trial or even on appeal before
jurisdiction of the court will additionally cause irreparable damages, and therefore, injustice to the other party the Court of Appeals. Petitioner filed her Answer and Amended Answer seeking affirmative reliefs, actively
that relied on the forum and the implicit waiver. participated during trial, filed an appeal before the Court of Appeals, and stayed silent on this issue. For failing
to file the appeal on time, this Court thereafter declared the Regional Trial Court's decision final and
In Tijam, this Court ruled that long delay in raising lack of jurisdiction is unfair to the party pleading laches executory. A writ of execution was then issued and implemented. It was only during the execution of the
because he or she was misled into believing that this defense would no longer be pursued. A delay of 15 years judgment, or after the lapse of 12 years from the filing of the Amended Complaint that petitioner challenged
in raising questions on subject matter jurisdiction was appreciated by this Court as estoppel by laches. the jurisdiction of the Regional Trial Court. There was no justification offered for such belated action.
Petitioner neither invoked her right nor exhausted the available legal remedies during the pendency of the case.
To allow petitioner to question the jurisdiction of a court after seeking affirmative reliefs, actively participating
In Metromedia Times Corporation v. Pastorin, this Court recognized the unfairness in allowing a party who in its proceedings, and only after the decision against her was rendered final and already implemented, would
sought affirmative relief from a tribunal and invoked its jurisdiction to later disavow the same jurisdiction be the height of unfairness, inequity, and injustice to respondents—the evils which the doctrine of estoppel by
upon passage of an adverse ruling. It ruled that raising lack of jurisdiction over a subject matter a little under a laches precisely seeks to prevent.
year since a complaint is filed does not amount to laches.
WHEREFORE, the Petition is DENIED. The November 15, 2012 Decision and May 3, 2013 Resolution of
In Figueroa, this Court observed the injustice caused to the party pleading laches. Restoration of and the Court of Appeals in CA-G.R. SP No. 114274 are AFFIRMED.
reparation towards the party may no longer be accomplished due to the changes in his or her circumstances.
Laches, however, was not appreciated as it was a mere four (4) years since trial began that the petitioner in that
case raised the issue of jurisdiction on appeal. SO ORDERED

In Bernardo v. Heirs of Villegas, this Court identified the propensity of litigants who, to exhaust the time and
resources of their opponents, will plead lack of jurisdiction only when an unfavorable decision is obtained in
order to re-litigate the case. The delay of 10 years in raising jurisdictional issues in that case was appreciated Issue of constitutionality
as laches.
G.R. No. 166006               March 14, 2008
In summary, Tijam applies to a party claiming lack of subject matter jurisdiction when: PLANTERS PRODUCTS, INC., Petitioner, vs. FERTIPHIL CORPORATION, Respondent.
DECISION
(1 there was a statutory right in favor of the claimant;
REYES, R.T., J.:
)
(2 the statutory right was not invoked; THE Regional Trial Courts (RTC) have the authority and jurisdiction to consider the constitutionality of
) statutes, executive orders, presidential decrees and other issuances. The Constitution vests that power not only
(3 an unreasonable length of time lapsed before the claimant raised the issue of jurisdiction; in the Supreme Court but in all Regional Trial Courts.
)
(4 the claimant actively participated in the case and sought affirmative relief from the court without
The principle is relevant in this petition for review on certiorari of the Decision1 of the Court of Appeals (CA) the legislature to their constituents. However, there are two kinds of limitations on the power of taxation: the
affirming with modification that of the RTC in Makati City, finding petitioner Planters Products, Inc. (PPI) inherent limitations and the constitutional limitations.
liable to private respondent Fertiphil Corporation (Fertiphil) for the levies it paid under Letter of Instruction
(LOI) No. 1465. One of the inherent limitations is that a tax may be levied only for public purposes:

The Facts The power to tax can be resorted to only for a constitutionally valid public purpose. By the same token, taxes
may not be levied for purely private purposes, for building up of private fortunes, or for the redress of private
Petitioner PPI and private respondent Fertiphil are private corporations incorporated under Philippine laws. wrongs. They cannot be levied for the improvement of private property, or for the benefit, and promotion of
They are both engaged in the importation and distribution of fertilizers, pesticides and agricultural chemicals. private enterprises, except where the aid is incident to the public benefit. It is well-settled principle of
constitutional law that no general tax can be levied except for the purpose of raising money which is to be
On June 3, 1985, then President Ferdinand Marcos, exercising his legislative powers, issued LOI No. 1465 expended for public use. Funds cannot be exacted under the guise of taxation to promote a purpose that is not
which provided, among others, for the imposition of a capital recovery component (CRC) on the domestic sale of public interest. Without such limitation, the power to tax could be exercised or employed as an authority to
of all grades of fertilizers in the Philippines.4 The LOI provides: destroy the economy of the people. A tax, however, is not held void on the ground of want of public interest
unless the want of such interest is clear. (71 Am. Jur. pp. 371-372)
3. The Administrator of the Fertilizer Pesticide Authority to include in its fertilizer pricing formula a capital
contribution component of not less than ₱10 per bag. This capital contribution shall be collected until adequate In the case at bar, the plaintiff paid the amount of ₱6,698,144.00 to the Fertilizer and Pesticide Authority
capital is raised to make PPI viable. Such capital contribution shall be applied by FPA to all domestic sales of pursuant to the ₱10 per bag of fertilizer sold imposition under LOI 1465 which, in turn, remitted the amount to
fertilizers in the Philippines. (Underscoring supplied) the defendant Planters Products, Inc. thru the latter’s depository bank, Far East Bank and Trust Co. Thus, by
virtue of LOI 1465 the plaintiff, Fertiphil Corporation, which is a private domestic corporation, became poorer
Pursuant to the LOI, Fertiphil paid ₱10 for every bag of fertilizer it sold in the domestic market to the by the amount of ₱6,698,144.00 and the defendant, Planters Product, Inc., another private domestic
Fertilizer and Pesticide Authority (FPA). FPA then remitted the amount collected to the Far East Bank and corporation, became richer by the amount of ₱6,698,144.00.
Trust Company, the depositary bank of PPI. Fertiphil paid ₱6,689,144 to FPA from July 8, 1985 to January 24,
1986. Tested by the standards of constitutionality as set forth in the afore-quoted jurisprudence, it is quite evident
that LOI 1465 insofar as it imposes the amount of ₱10 per fertilizer bag sold in the country and orders that the
After the 1986 Edsa Revolution, FPA voluntarily stopped the imposition of the ₱10 levy. With the return of said amount should go to the defendant Planters Product, Inc. is unlawful because it violates the mandate that a
democracy, Fertiphil demanded from PPI a refund of the amounts it paid under LOI No. 1465, but PPI refused tax can be levied only for a public purpose and not to benefit, aid and promote a private enterprise such as
to accede to the demand. Planters Product, Inc.
Fertiphil filed a complaint for collection and damages8 against FPA and PPI with the RTC in Makati. It PPI moved for reconsideration but its motion was denied. PPI then filed a notice of appeal with the RTC but it
questioned the constitutionality of LOI No. 1465 for being unjust, unreasonable, oppressive, invalid and an failed to pay the requisite appeal docket fee. In a separate but related proceeding, this Court allowed the appeal
unlawful imposition that amounted to a denial of due process of law. 9 Fertiphil alleged that the LOI solely of PPI and remanded the case to the CA for proper disposition.
favored PPI, a privately owned corporation, which used the proceeds to maintain its monopoly of the fertilizer
industry. CA Decision
In its Answer, FPA, through the Solicitor General, countered that the issuance of LOI No. 1465 was a valid On November 28, 2003, the CA handed down its decision affirming with modification that of the RTC, with
exercise of the police power of the State in ensuring the stability of the fertilizer industry in the country. It also the following fallo:
averred that Fertiphil did not sustain any damage from the LOI because the burden imposed by the levy fell on
the ultimate consumer, not the seller. IN VIEW OF ALL THE FOREGOING, the decision appealed from is hereby AFFIRMED, subject to the
MODIFICATION that the award of attorney’s fees is hereby DELETED.
RTC Disposition
In affirming the RTC decision, the CA ruled that the lis mota of the complaint for collection was the
On November 20, 1991, the RTC rendered judgment in favor of Fertiphil, disposing as follows: constitutionality of LOI No. 1465, thus:
WHEREFORE, in view of the foregoing, the Court hereby renders judgment in favor of the plaintiff and The question then is whether it was proper for the trial court to exercise its power to judicially determine the
against the defendant Planters Product, Inc., ordering the latter to pay the former: constitutionality of the subject statute in the instant case.
1) the sum of ₱6,698,144.00 with interest at 12% from the time of judicial demand; As a rule, where the controversy can be settled on other grounds, the courts will not resolve the
2) the sum of ₱100,000 as attorney’s fees; constitutionality of a law (Lim v. Pacquing, 240 SCRA 649 [1995]). The policy of the courts is to avoid ruling
3) the cost of suit. on constitutional questions and to presume that the acts of political departments are valid, absent a clear and
SO ORDERED. unmistakable showing to the contrary.
Ruling that the imposition of the ₱10 CRC was an exercise of the State’s inherent power of taxation, the RTC However, the courts are not precluded from exercising such power when the following requisites are obtaining
invalidated the levy for violating the basic principle that taxes can only be levied for public purpose, viz.: in a controversy before it: First, there must be before the court an actual case calling for the exercise of judicial
review. Second, the question must be ripe for adjudication. Third, the person challenging the validity of the act
It is apparent that the imposition of ₱10 per fertilizer bag sold in the country by LOI 1465 is purportedly in the must have standing to challenge. Fourth, the question of constitutionality must have been raised at the earliest
exercise of the power of taxation. It is a settled principle that the power of taxation by the state is plenary. opportunity; and lastly, the issue of constitutionality must be the very lis mota of the case (Integrated Bar of
Comprehensive and supreme, the principal check upon its abuse resting in the responsibility of the members of the Philippines v. Zamora, 338 SCRA 81 [2000]).
Indisputably, the present case was primarily instituted for collection and damages. However, a perusal of the capital stock of Planters being hereafter referred to as the ‘Unpaid Capital’), and subsequently for such capital
complaint also reveals that the instant action is founded on the claim that the levy imposed was an unlawful increases as may be required for the continuing viability of Planters.
and unconstitutional special assessment. Consequently, the requisite that the constitutionality of the law in
question be the very lis mota of the case is present, making it proper for the trial court to rule on the The capital recovery component shall be in the minimum amount of ₱10 per bag, which will be added to the
constitutionality of LOI 1465. price of all domestic sales of fertilizer in the Philippines by any importer and/or fertilizer mother company. In
this connection, the Republic hereby acknowledges that the advances by Planters to Planters Foundation which
The CA held that even on the assumption that LOI No. 1465 was issued under the police power of the state, it were applied to the payment of the Planters shares now held in trust by Planters Foundation, have been
is still unconstitutional because it did not promote public welfare. The CA explained: assigned to, among others, the Creditors. Accordingly, the Republic, through FPA, hereby agrees to deposit
the proceeds of the capital recovery component in the special trust account designated in the notice dated April
In declaring LOI 1465 unconstitutional, the trial court held that the levy imposed under the said law was an 2, 1985, addressed by counsel for the Creditors to Planters Foundation. Such proceeds shall be deposited by
invalid exercise of the State’s power of taxation inasmuch as it violated the inherent and constitutional FPA on or before the 15th day of each month.
prescription that taxes be levied only for public purposes. It reasoned out that the amount collected under the
levy was remitted to the depository bank of PPI, which the latter used to advance its private interest. The capital recovery component shall continue to be charged and collected until payment in full of (a) the
Unpaid Capital and/or (b) any shortfall in the payment of the Subsidy Receivables, (c) any carrying cost
On the other hand, appellant submits that the subject statute’s passage was a valid exercise of police power. In accruing from the date hereof on the amounts which may be outstanding from time to time of the Unpaid
addition, it disputes the court a quo’s findings arguing that the collections under LOI 1465 was for the benefit Capital and/or the Subsidy Receivables and (d) the capital increases contemplated in paragraph 2 hereof. For
of Planters Foundation, Incorporated (PFI), a foundation created by law to hold in trust for millions of farmers, the purpose of the foregoing clause (c), the ‘carrying cost’ shall be at such rate as will represent the full and
the stock ownership of PPI. reasonable cost to Planters of servicing its debts, taking into account both its peso and foreign currency-
denominated obligations." (Records, pp. 42-43)
Of the three fundamental powers of the State, the exercise of police power has been characterized as the most
essential, insistent and the least limitable of powers, extending as it does to all the great public needs. It may Appellant’s proposition is open to question, to say the least. The LOU issued by then Prime Minister Virata
be exercised as long as the activity or the property sought to be regulated has some relevance to public welfare taken together with the Justice Secretary’s Opinion does not preponderantly demonstrate that the collections
(Constitutional Law, by Isagani A. Cruz, p. 38, 1995 Edition). made were held in trust in favor of millions of farmers. Unfortunately for appellant, in the absence of sufficient
evidence to establish its claims, this Court is constrained to rely on what is explicitly provided in LOI 1465 –
Vast as the power is, however, it must be exercised within the limits set by the Constitution, which requires the that one of the primary aims in imposing the levy is to support the successful rehabilitation and continued
concurrence of a lawful subject and a lawful method. Thus, our courts have laid down the test to determine the viability of PPI.
validity of a police measure as follows: (1) the interests of the public generally, as distinguished from those of
a particular class, requires its exercise; and (2) the means employed are reasonably necessary for the PPI moved for reconsideration but its motion was denied. It then filed the present petition with this Court.
accomplishment of the purpose and not unduly oppressive upon individuals (National Development Company
v. Philippine Veterans Bank, 192 SCRA 257 [1990]). Issues
Petitioner PPI raises four issues for Our consideration, viz.:
It is upon applying this established tests that We sustain the trial court’s holding LOI 1465 unconstitutional. To I
be sure, ensuring the continued supply and distribution of fertilizer in the country is an undertaking imbued
with public interest. However, the method by which LOI 1465 sought to achieve this is by no means a measure THE CONSTITUTIONALITY OF LOI 1465 CANNOT BE COLLATERALLY ATTACKED AND BE
that will promote the public welfare. The government’s commitment to support the successful rehabilitation DECREED VIA A DEFAULT JUDGMENT IN A CASE FILED FOR COLLECTION AND DAMAGES
and continued viability of PPI, a private corporation, is an unmistakable attempt to mask the subject statute’s WHERE THE ISSUE OF CONSTITUTIONALITY IS NOT THE VERY LIS MOTA OF THE
impartiality. There is no way to treat the self-interest of a favored entity, like PPI, as identical with the general CASE. NEITHER CAN LOI 1465 BE CHALLENGED BY ANY PERSON OR ENTITY WHICH HAS NO
interest of the country’s farmers or even the Filipino people in general. Well to stress, substantive due process STANDING TO DO SO.
exacts fairness and equal protection disallows distinction where none is needed. When a statute’s public
purpose is spoiled by private interest, the use of police power becomes a travesty which must be struck down II
for being an arbitrary exercise of government power. To rule in favor of appellant would contravene the
general principle that revenues derived from taxes cannot be used for purely private purposes or for the LOI 1465, BEING A LAW IMPLEMENTED FOR THE PURPOSE OF ASSURING THE FERTILIZER
exclusive benefit of private individuals. SUPPLY AND DISTRIBUTION IN THE COUNTRY, AND FOR BENEFITING A FOUNDATION
CREATED BY LAW TO HOLD IN TRUST FOR MILLIONS OF FARMERS THEIR STOCK
The CA did not accept PPI’s claim that the levy imposed under LOI No. 1465 was for the benefit of Planters OWNERSHIP IN PPI CONSTITUTES A VALID LEGISLATION PURSUANT TO THE EXERCISE OF
Foundation, Inc., a foundation created to hold in trust the stock ownership of PPI. The CA stated: TAXATION AND POLICE POWER FOR PUBLIC PURPOSES.

Appellant next claims that the collections under LOI 1465 was for the benefit of Planters Foundation, III
Incorporated (PFI), a foundation created by law to hold in trust for millions of farmers, the stock ownership of
PFI on the strength of Letter of Undertaking (LOU) issued by then Prime Minister Cesar Virata on April 18, THE AMOUNT COLLECTED UNDER THE CAPITAL RECOVERY COMPONENT WAS REMITTED TO
1985 and affirmed by the Secretary of Justice in an Opinion dated October 12, 1987, to wit: THE GOVERNMENT, AND BECAME GOVERNMENT FUNDS PURSUANT TO AN EFFECTIVE AND
VALIDLY ENACTED LAW WHICH IMPOSED DUTIES AND CONFERRED RIGHTS BY VIRTUE OF
"2. Upon the effective date of this Letter of Undertaking, the Republic shall cause FPA to include in its THE PRINCIPLE OF "OPERATIVE FACT" PRIOR TO ANY DECLARATION OF
fertilizer pricing formula a capital recovery component, the proceeds of which will be used initially for the UNCONSTITUTIONALITY OF LOI 1465.
purpose of funding the unpaid portion of the outstanding capital stock of Planters presently held in trust by
Planters Foundation, Inc. (Planters Foundation), which unpaid capital is estimated at approximately ₱206 IV
million (subject to validation by Planters and Planters Foundation) (such unpaid portion of the outstanding
THE PRINCIPLE OF UNJUST VEXATION (SHOULD BE ENRICHMENT) FINDS NO APPLICATION IN This is clear from the text of the LOI. PPI is expressly named in the LOI as the direct beneficiary of the levy.
THE INSTANT CASE. (Underscoring supplied) Worse, the levy was made dependent and conditional upon PPI becoming financially viable. The LOI provided
that "the capital contribution shall be collected until adequate capital is raised to make PPI viable."
Our Ruling
The constitutionality of the levy is already in doubt on a plain reading of the statute. It is Our constitutional
We shall first tackle the procedural issues of locus standi and the jurisdiction of the RTC to resolve duty to squarely resolve the issue as the final arbiter of all justiciable controversies. The doctrine of standing,
constitutional issues. being a mere procedural technicality, should be waived, if at all, to adequately thresh out an important
constitutional issue.
Fertiphil has locus standi because it suffered direct injury; doctrine of standing is a mere procedural
technicality which may be waived. RTC may resolve constitutional issues; the constitutional issue was adequately raised in the complaint; it is the
lis mota of the case.
PPI argues that Fertiphil has no locus standi to question the constitutionality of LOI No. 1465 because it does
not have a "personal and substantial interest in the case or will sustain direct injury as a result of its PPI insists that the RTC and the CA erred in ruling on the constitutionality of the LOI. It asserts that the
enforcement." It asserts that Fertiphil did not suffer any damage from the CRC imposition because "incidence constitutionality of the LOI cannot be collaterally attacked in a complaint for collection. Alternatively, the
of the levy fell on the ultimate consumer or the farmers themselves, not on the seller fertilizer company." resolution of the constitutional issue is not necessary for a determination of the complaint for collection.
We cannot agree. The doctrine of locus standi or the right of appearance in a court of justice has been Fertiphil counters that the constitutionality of the LOI was adequately pleaded in its complaint. It claims that
adequately discussed by this Court in a catena of cases. Succinctly put, the doctrine requires a litigant to have a the constitutionality of LOI No. 1465 is the very lis mota of the case because the trial court cannot determine
material interest in the outcome of a case. In private suits, locus standi requires a litigant to be a "real party in its claim without resolving the issue.
interest," which is defined as "the party who stands to be benefited or injured by the judgment in the suit or the
party entitled to the avails of the suit." It is settled that the RTC has jurisdiction to resolve the constitutionality of a statute, presidential decree or an
executive order. This is clear from Section 5, Article VIII of the 1987 Constitution, which provides:
In public suits, this Court recognizes the difficulty of applying the doctrine especially when plaintiff asserts a
public right on behalf of the general public because of conflicting public policy issues.  On one end, there is SECTION 5. The Supreme Court shall have the following powers:
the right of the ordinary citizen to petition the courts to be freed from unlawful government intrusion and
illegal official action. At the other end, there is the public policy precluding excessive judicial interference in (2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court may
official acts, which may unnecessarily hinder the delivery of basic public services. provide, final judgments and orders of lower courts in:

In this jurisdiction, We have adopted the "direct injury test" to determine locus standi in public suits. In People (a) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law,
v. Vera,it was held that a person who impugns the validity of a statute must have "a personal and substantial presidential decree, proclamation, order, instruction, ordinance, or regulation is in question. (Underscoring
interest in the case such that he has sustained, or will sustain direct injury as a result." The "direct injury test" supplied)
in public suits is similar to the "real party in interest" rule for private suits under Section 2, Rule 3 of the 1997
Rules of Civil Procedure. In Mirasol v. Court of Appeals, this Court recognized the power of the RTC to resolve constitutional issues,
thus:
Recognizing that a strict application of the "direct injury" test may hamper public interest, this Court relaxed
the requirement in cases of "transcendental importance" or with "far reaching implications." Being a mere On the first issue. It is settled that Regional Trial Courts have the authority and jurisdiction to consider the
procedural technicality, it has also been held that locus standi may be waived in the public interest. constitutionality of a statute, presidential decree, or executive order. The Constitution vests the power of
judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree,
Whether or not the complaint for collection is characterized as a private or public suit, Fertiphil has locus order, instruction, ordinance, or regulation not only in this Court, but in all Regional Trial Courts.
standi to file it. Fertiphil suffered a direct injury from the enforcement of LOI No. 1465. It was required, and it
did pay, the ₱10 levy imposed for every bag of fertilizer sold on the domestic market. It may be true that In the recent case of Equi-Asia Placement, Inc. v. Department of Foreign Affairs, this Court reiterated:
Fertiphil has passed some or all of the levy to the ultimate consumer, but that does not disqualify it from
There is no denying that regular courts have jurisdiction over cases involving the validity or constitutionality
attacking the constitutionality of the LOI or from seeking a refund. As seller, it bore the ultimate burden of
of a rule or regulation issued by administrative agencies. Such jurisdiction, however, is not limited to the Court
paying the levy. It faced the possibility of severe sanctions for failure to pay the levy. The fact of payment is
of Appeals or to this Court alone for even the regional trial courts can take cognizance of actions assailing a
sufficient injury to Fertiphil.
specific rule or set of rules promulgated by administrative bodies. Indeed, the Constitution vests the power of
Moreover, Fertiphil suffered harm from the enforcement of the LOI because it was compelled to factor in its judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree,
product the levy. The levy certainly rendered the fertilizer products of Fertiphil and other domestic sellers order, instruction, ordinance, or regulation in the courts, including the regional trial courts.
much more expensive. The harm to their business consists not only in fewer clients because of the increased
Judicial review of official acts on the ground of unconstitutionality may be sought or availed of through any of
price, but also in adopting alternative corporate strategies to meet the demands of LOI No. 1465. Fertiphil and
the actions cognizable by courts of justice, not necessarily in a suit for declaratory relief. Such review may be
other fertilizer sellers may have shouldered all or part of the levy just to be competitive in the market. The
had in criminal actions, as in People v. Ferre involving the constitutionality of the now defunct Anti-
harm occasioned on the business of Fertiphil is sufficient injury for purposes of locus standi.
Subversion law, or in ordinary actions, as in Krivenko v. Register of Deeds36 involving the constitutionality of
Even assuming arguendo that there is no direct injury, We find that the liberal policy consistently adopted by laws prohibiting aliens from acquiring public lands. The constitutional issue, however, (a) must be properly
this Court on locus standi must apply. The issues raised by Fertiphil are of paramount public importance. It raised and presented in the case, and (b) its resolution is necessary to a determination of the case, i.e., the issue
involves not only the constitutionality of a tax law but, more importantly, the use of taxes for public purpose. of constitutionality must be the very lis mota presented.
Former President Marcos issued LOI No. 1465 with the intention of rehabilitating an ailing private company.
Contrary to PPI’s claim, the constitutionality of LOI No. 1465 was properly and adequately raised in the the levy is revenue generation. If the purpose is primarily revenue, or if revenue is, at least, one of the real and
complaint for collection filed with the RTC. The pertinent portions of the complaint allege: substantial purposes, then the exaction is properly called a tax.

6. The CRC of ₱10 per bag levied under LOI 1465 on domestic sales of all grades of fertilizer in the In Philippine Airlines, Inc. v. Edu, it was held that the imposition of a vehicle registration fee is not an exercise
Philippines, is unlawful, unjust, uncalled for, unreasonable, inequitable and oppressive because: by the State of its police power, but of its taxation power, thus:

xxxx It is clear from the provisions of Section 73 of Commonwealth Act 123 and Section 61 of the Land
Transportation and Traffic Code that the legislative intent and purpose behind the law requiring owners of
(c) It favors only one private domestic corporation, i.e., defendant PPPI, and imposed at the expense and vehicles to pay for their registration is mainly to raise funds for the construction and maintenance of highways
disadvantage of the other fertilizer importers/distributors who were themselves in tight business situation and and to a much lesser degree, pay for the operating expenses of the administering agency. x x x Fees may be
were then exerting all efforts and maximizing management and marketing skills to remain viable; properly regarded as taxes even though they also serve as an instrument of regulation.
xxxx Taxation may be made the implement of the state's police power (Lutz v. Araneta, 98 Phil. 148). If the purpose
is primarily revenue, or if revenue is, at least, one of the real and substantial purposes, then the exaction is
(e) It was a glaring example of crony capitalism, a forced program through which the PPI, having been properly called a tax. Such is the case of motor vehicle registration fees. The same provision appears as
presumptuously masqueraded as "the" fertilizer industry itself, was the sole and anointed beneficiary; Section 59(b) in the Land Transportation Code. It is patent therefrom that the legislators had in mind a
regulatory tax as the law refers to the imposition on the registration, operation or ownership of a motor vehicle
7. The CRC was an unlawful; and unconstitutional special assessment and its imposition is tantamount to
as a "tax or fee." x x x Simply put, if the exaction under Rep. Act 4136 were merely a regulatory fee, the
illegal exaction amounting to a denial of due process since the persons of entities which had to bear the burden
imposition in Rep. Act 5448 need not be an "additional" tax. Rep. Act 4136 also speaks of other "fees" such as
of paying the CRC derived no benefit therefrom; that on the contrary it was used by PPI in trying to regain its
the special permit fees for certain types of motor vehicles (Sec. 10) and additional fees for change of
former despicable monopoly of the fertilizer industry to the detriment of other distributors and
registration (Sec. 11). These are not to be understood as taxes because such fees are very minimal to be
importers. (Underscoring supplied)
revenue-raising. Thus, they are not mentioned by Sec. 59(b) of the Code as taxes like the motor vehicle
The constitutionality of LOI No. 1465 is also the very lis mota of the complaint for collection. Fertiphil filed registration fee and chauffeurs’ license fee. Such fees are to go into the expenditures of the Land
the complaint to compel PPI to refund the levies paid under the statute on the ground that the law imposing the Transportation Commission as provided for in the last proviso of Sec. 61. (Underscoring supplied)
levy is unconstitutional. The thesis is that an unconstitutional law is void. It has no legal effect. Being void,
The ₱10 levy under LOI No. 1465 is too excessive to serve a mere regulatory purpose. The levy, no doubt, was
Fertiphil had no legal obligation to pay the levy. Necessarily, all levies duly paid pursuant to an
a big burden on the seller or the ultimate consumer. It increased the price of a bag of fertilizer by as much as
unconstitutional law should be refunded under the civil code principle against unjust enrichment. The refund is
five percent. A plain reading of the LOI also supports the conclusion that the levy was for revenue generation.
a mere consequence of the law being declared unconstitutional. The RTC surely cannot order PPI to refund
The LOI expressly provided that the levy was imposed "until adequate capital is raised to make PPI viable."
Fertiphil if it does not declare the LOI unconstitutional. It is the unconstitutionality of the LOI which triggers
the refund. The issue of constitutionality is the very lis mota of the complaint with the RTC. Taxes are exacted only for a public purpose. The ₱10 levy is unconstitutional because it was not for a public
purpose. The levy was imposed to give undue benefit to PPI.
The ₱10 levy under LOI No. 1465 is an exercise of the power of taxation.
An inherent limitation on the power of taxation is public purpose. Taxes are exacted only for a public purpose.
At any rate, the Court holds that the RTC and the CA did not err in ruling against the constitutionality of the
They cannot be used for purely private purposes or for the exclusive benefit of private persons. The reason for
LOI.
this is simple. The power to tax exists for the general welfare; hence, implicit in its power is the limitation that
PPI insists that LOI No. 1465 is a valid exercise either of the police power or the power of taxation. It claims it should be used only for a public purpose. It would be a robbery for the State to tax its citizens and use the
that the LOI was implemented for the purpose of assuring the fertilizer supply and distribution in the country funds generated for a private purpose. As an old United States case bluntly put it: "To lay with one hand, the
and for benefiting a foundation created by law to hold in trust for millions of farmers their stock ownership in power of the government on the property of the citizen, and with the other to bestow it upon favored
PPI. individuals to aid private enterprises and build up private fortunes, is nonetheless a robbery because it is done
under the forms of law and is called taxation."
Fertiphil counters that the LOI is unconstitutional because it was enacted to give benefit to a private company.
The levy was imposed to pay the corporate debt of PPI. Fertiphil also argues that, even if the LOI is enacted The term "public purpose" is not defined. It is an elastic concept that can be hammered to fit modern standards.
under the police power, it is still unconstitutional because it did not promote the general welfare of the people Jurisprudence states that "public purpose" should be given a broad interpretation. It does not only pertain to
or public interest. those purposes which are traditionally viewed as essentially government functions, such as building roads and
delivery of basic services, but also includes those purposes designed to promote social justice. Thus, public
Police power and the power of taxation are inherent powers of the State. These powers are distinct and have money may now be used for the relocation of illegal settlers, low-cost housing and urban or agrarian reform.
different tests for validity. Police power is the power of the State to enact legislation that may interfere with
personal liberty or property in order to promote the general welfare, while the power of taxation is the power While the categories of what may constitute a public purpose are continually expanding in light of the
to levy taxes to be used for public purpose. The main purpose of police power is the regulation of a behavior or expansion of government functions, the inherent requirement that taxes can only be exacted for a public
conduct, while taxation is revenue generation. The "lawful subjects" and "lawful means" tests are used to purpose still stands. Public purpose is the heart of a tax law. When a tax law is only a mask to exact funds
determine the validity of a law enacted under the police power. The power of taxation, on the other hand, is from the public when its true intent is to give undue benefit and advantage to a private enterprise, that law will
circumscribed by inherent and constitutional limitations. not satisfy the requirement of "public purpose."

We agree with the RTC that the imposition of the levy was an exercise by the State of its taxation power. The purpose of a law is evident from its text or inferable from other secondary sources. Here, We agree with
While it is true that the power of taxation can be used as an implement of police power, the primary purpose of the RTC and that CA that the levy imposed under LOI No. 1465 was not for a public purpose.
First, the LOI expressly provided that the levy be imposed to benefit PPI, a private company. The purpose is your expressed willingness to consider and participate in the effort to rehabilitate Planters, the Republic hereby
explicit from Clause 3 of the law, thus: manifests its full and unqualified support of the successful rehabilitation and continuing viability of Planters,
and to that end, hereby binds and obligates itself to the creditors and Planters, as follows:
3. The Administrator of the Fertilizer Pesticide Authority to include in its fertilizer pricing formula a capital
contribution component of not less than ₱10 per bag. This capital contribution shall be collected until adequate xxxx
capital is raised to make PPI viable. Such capital contribution shall be applied by FPA to all domestic sales of
fertilizers in the Philippines (Underscoring supplied) 2. Upon the effective date of this Letter of Undertaking, the Republic shall cause FPA to include in its fertilizer
pricing formula a capital recovery component, the proceeds of which will be used initially for the purpose of
It is a basic rule of statutory construction that the text of a statute should be given a literal meaning. In this funding the unpaid portion of the outstanding capital stock of Planters presently held in trust by Planters
case, the text of the LOI is plain that the levy was imposed in order to raise capital for PPI. The framers of the Foundation, Inc. ("Planters Foundation"), which unpaid capital is estimated at approximately ₱206 million
LOI did not even hide the insidious purpose of the law. They were cavalier enough to name PPI as the ultimate (subject to validation by Planters and Planters Foundation) such unpaid portion of the outstanding capital stock
beneficiary of the taxes levied under the LOI. We find it utterly repulsive that a tax law would expressly name of Planters being hereafter referred to as the "Unpaid Capital"), and subsequently for such capital increases as
a private company as the ultimate beneficiary of the taxes to be levied from the public. This is a clear case of may be required for the continuing viability of Planters.
crony capitalism.
The capital recovery component shall continue to be charged and collected until payment in full of (a) the
Second, the LOI provides that the imposition of the ₱10 levy was conditional and dependent upon PPI Unpaid Capital and/or (b) any shortfall in the payment of the Subsidy Receivables, (c) any carrying cost
becoming financially "viable." This suggests that the levy was actually imposed to benefit PPI. The LOI accruing from the date hereof on the amounts which may be outstanding from time to time of the Unpaid
notably does not fix a maximum amount when PPI is deemed financially "viable." Worse, the liability of Capital and/or the Subsidy Receivables, and (d) the capital increases contemplated in paragraph 2 hereof. For
Fertiphil and other domestic sellers of fertilizer to pay the levy is made indefinite. They are required to the purpose of the foregoing clause (c), the "carrying cost" shall be at such rate as will represent the full and
continuously pay the levy until adequate capital is raised for PPI. reasonable cost to Planters of servicing its debts, taking into account both its peso and foreign currency-
denominated obligations.
Third, the RTC and the CA held that the levies paid under the LOI were directly remitted and deposited by
FPA to Far East Bank and Trust Company, the depositary bank of PPI. This proves that PPI benefited from the REPUBLIC OF THE PHILIPPINES
LOI. It is also proves that the main purpose of the law was to give undue benefit and advantage to PPI.
By:
Fourth, the levy was used to pay the corporate debts of PPI. A reading of the Letter of Understanding 50 dated
May 18, 1985 signed by then Prime Minister Cesar Virata reveals that PPI was in deep financial problem (signed)
because of its huge corporate debts. There were pending petitions for rehabilitation against PPI before the CESAR E. A. VIRATA
Securities and Exchange Commission. The government guaranteed payment of PPI’s debts to its foreign Prime Minister and Minister of Finance51
creditors. To fund the payment, President Marcos issued LOI No. 1465. The pertinent portions of the letter of
understanding read: It is clear from the Letter of Understanding that the levy was imposed precisely to pay the corporate debts of
PPI. We cannot agree with PPI that the levy was imposed to ensure the stability of the fertilizer industry in the
Republic of the Philippines country. The letter of understanding and the plain text of the LOI clearly indicate that the levy was exacted for
Office of the Prime Minister the benefit of a private corporation.
Manila
All told, the RTC and the CA did not err in holding that the levy imposed under LOI No. 1465 was not for a
LETTER OF UNDERTAKING public purpose. LOI No. 1465 failed to comply with the public purpose requirement for tax laws.

May 18, 1985 The LOI is still unconstitutional even if enacted under the police power; it did not promote public interest.

TO: THE BANKING AND FINANCIAL INSTITUTIONS Even if We consider LOI No. 1695 enacted under the police power of the State, it would still be invalid for
LISTED IN ANNEX A HERETO WHICH ARE failing to comply with the test of "lawful subjects" and "lawful means." Jurisprudence states the test as
CREDITORS (COLLECTIVELY, THE "CREDITORS") follows: (1) the interest of the public generally, as distinguished from those of particular class, requires its
OF PLANTERS PRODUCTS, INC. ("PLANTERS") exercise; and (2) the means employed are reasonably necessary for the accomplishment of the purpose and not
unduly oppressive upon individuals.
Gentlemen:
For the same reasons as discussed, LOI No. 1695 is invalid because it did not promote public interest. The law
This has reference to Planters which is the principal importer and distributor of fertilizer, pesticides and was enacted to give undue advantage to a private corporation. We quote with approval the CA ratiocination on
agricultural chemicals in the Philippines. As regards Planters, the Philippine Government confirms its this point, thus:
awareness of the following: (1) that Planters has outstanding obligations in foreign currency and/or pesos, to
the Creditors, (2) that Planters is currently experiencing financial difficulties, and (3) that there are presently It is upon applying this established tests that We sustain the trial court’s holding LOI 1465 unconstitutional. To
pending with the Securities and Exchange Commission of the Philippines a petition filed at Planters’ own be sure, ensuring the continued supply and distribution of fertilizer in the country is an undertaking imbued
behest for the suspension of payment of all its obligations, and a separate petition filed by Manufacturers with public interest. However, the method by which LOI 1465 sought to achieve this is by no means a measure
Hanover Trust Company, Manila Offshore Branch for the appointment of a rehabilitation receiver for Planters. that will promote the public welfare. The government’s commitment to support the successful rehabilitation
and continued viability of PPI, a private corporation, is an unmistakable attempt to mask the subject statute’s
In connection with the foregoing, the Republic of the Philippines (the "Republic") confirms that it considers impartiality. There is no way to treat the self-interest of a favored entity, like PPI, as identical with the general
and continues to consider Planters as a major fertilizer distributor. Accordingly, for and in consideration of interest of the country’s farmers or even the Filipino people in general. Well to stress, substantive due process
exacts fairness and equal protection disallows distinction where none is needed. When a statute’s public
purpose is spoiled by private interest, the use of police power becomes a travesty which must be struck down
for being an arbitrary exercise of government power. To rule in favor of appellant would contravene the
general principle that revenues derived from taxes cannot be used for purely private purposes or for the
exclusive benefit of private individuals. (Underscoring supplied)

The general rule is that an unconstitutional law is void; the doctrine of operative fact is inapplicable.

PPI also argues that Fertiphil cannot seek a refund even if LOI No. 1465 is declared unconstitutional. It banks
on the doctrine of operative fact, which provides that an unconstitutional law has an effect before being
Quasi judicial agency/Labor cases
declared unconstitutional. PPI wants to retain the levies paid under LOI No. 1465 even if it is subsequently
declared to be unconstitutional. G.R. No. 131903             June 26, 2008
We cannot agree. It is settled that no question, issue or argument will be entertained on appeal, unless it has OSCAR R. BADILLO, GIOVANNI C. ONG, EDGAR A. RAGASA represented by heirs CYNTHIA G.
been raised in the court a quo. PPI did not raise the applicability of the doctrine of operative fact with the RTC RAGASA, and their children JOSEPH, CATHERINE and CHARMAINE all surnamed RAGASA,
and the CA. It cannot belatedly raise the issue with Us in order to extricate itself from the dire effects of an ROLANDO SANCADA, and DIONISIO UMBALIN, petitioners,
unconstitutional law. vs.
COURT OF APPEALS, REGISTER OF DEEDS OF QUEZON CITY, GOLDKEY DEVELOPMENT
At any rate, We find the doctrine inapplicable. The general rule is that an unconstitutional law is void. It
CORPORATION, JOSEFA CONEJERO, IGNACIO D. SONORON, PEDRO DEL ROSARIO, and
produces no rights, imposes no duties and affords no protection. It has no legal effect. It is, in legal
DOWAL REALTY AND MANAGEMENT SYSTEM COMPANY, respondents.
contemplation, inoperative as if it has not been passed. Being void, Fertiphil is not required to pay the levy. All
levies paid should be refunded in accordance with the general civil code principle against unjust enrichment. DECISION
The general rule is supported by Article 7 of the Civil Code, which provides:
CARPIO, J.:
ART. 7. Laws are repealed only by subsequent ones, and their violation or non-observance shall not be
excused by disuse or custom or practice to the contrary. The Case
When the courts declare a law to be inconsistent with the Constitution, the former shall be void and the latter This petition for certiorari assails the 17 September 1997 Decision of the Court of Appeals in CA-G.R. CV
shall govern. No. 50035. The Court of Appeals dismissed the appeal filed by petitioners Oscar R. Badillo, Giovanni C. Ong,
Edgar A. Ragasa, Rolando Sancada, and Dionisio Umbalin (petitioners) questioning the 5 June 1995 Order of
The doctrine of operative fact, as an exception to the general rule, only applies as a matter of equity and fair Branch 222 of the Regional Trial Court of Quezon City in Civil Case No. Q-91-10510 for Annulment of
play. It nullifies the effects of an unconstitutional law by recognizing that the existence of a statute prior to a Documents with Prayer for Issuance of Prohibitory and Mandatory Injunction and Damages.
determination of unconstitutionality is an operative fact and may have consequences which cannot always be
ignored. The past cannot always be erased by a new judicial declaration. The Facts
The doctrine is applicable when a declaration of unconstitutionality will impose an undue burden on those who Petitioners alleged that they are the registered owners of several lots adjoining a road lot known as Lot 369-A-
have relied on the invalid law. Thus, it was applied to a criminal case when a declaration of unconstitutionality 29 or Apollo Street of subdivision plan Psd-37971 (road lot). The road lot is a short access road which
would put the accused in double jeopardy or would put in limbo the acts done by a municipality in reliance connects petitioners’ properties to the main road known as Road 20. The road lot is covered by Transfer
upon a law creating it. Certificate of Title (TCT) No. RT-20895 (22682) and registered in the name of respondent Pedro del Rosario
(del Rosario). Annotated at the back of TCT No. RT-20895 is a court-ordered Entry No. 605/T-22655 which
Here, We do not find anything iniquitous in ordering PPI to refund the amounts paid by Fertiphil under LOI reads as follows: "It is hereby made of record that as per order of the Court, the street lot covered by this title
No. 1465. It unduly benefited from the levy. It was proven during the trial that the levies paid were remitted shall not be closed or disposed of by the registered owner without previous approval of the court."
and deposited to its bank account. Quite the reverse, it would be inequitable and unjust not to order a refund.
To do so would unjustly enrich PPI at the expense of Fertiphil. Article 22 of the Civil Code explicitly provides Petitioners alleged that in gross violation of the court order, del Rosario sold an unsegregated portion of the
that "every person who, through an act of performance by another comes into possession of something at the road lot to his co-respondents Josefa Conejero (Conejero) and Ignacio Sonoron (Sonoron) without obtaining
expense of the latter without just or legal ground shall return the same to him." We cannot allow PPI to profit prior court approval. Del Rosario, Conejero, and Sonoron then entered into a partition agreement to divide the
from an unconstitutional law. Justice and equity dictate that PPI must refund the amounts paid by Fertiphil. road lot into four lots which resulted in the partial cancellation of TCT No. RT-20895 and the subsequent
issuance of TCT Nos. 35899 and 35100 in the name of Conejero, TCT No. 35101 in the name of del Rosario,
WHEREFORE, the petition is DENIED. The Court of Appeals Decision dated November 28, 2003 is and TCT No. 35102 in the name of Sonoron.
AFFIRMED.
Petitioners stated that del Rosario sold TCT No. 35101 to Goldkey Development Corporation (Goldkey).
SO ORDERED.
Petitioners alleged that the Register of Deeds violated the court order when it allowed the registration of the
sales and the subsequent issuance of new titles without first obtaining judicial approval. Petitioners claimed
that Goldkey had built cement fences on the lot, thus blocking the ingress and egress of petitioners.
Petitioners prayed that the sales made in favor of Conejero, Sonoron, and Goldkey and the partition of the road Further, the appellate court ruled that the error assigned by petitioners involves the issue on what law will
lot be declared void. apply to determine the jurisdiction of a tribunal over the subject matter of the complaints. Petitioners’ assigned
error involves a pure question of law; hence, petitioners appealed to the wrong forum. Petitioners should have
In its Comment, Goldkey alleged that the Housing and Land Use Regulatory Board (HLURB) has exclusive elevated their appeal to the Supreme Court and not to the Court of Appeals by way of a simple appeal.
jurisdiction over the cases mentioned in Section 1 of Presidential Decree No. (PD) 1344. 9 Goldkey argued that
the Court of Appeals correctly dismissed petitioners’ appeal because petitioners merely assigned an error Hence, this petition.
involving a pure question of law. Goldkey added that petitioners are using the present petition as a substitute
for an already lost appeal since petitioners’ counsel had received the decision on 17 October 1997 and the The Issues
present petition was posted only on 16 December 1997.
Petitioners raise three issues in this petition:
In May 1991, petitioners filed an initial complaint with the Office of the Building Official (building official) of
Quezon City, docketed as Building Case No. R-10-91-006 entitled Giovanni C. Ong, et al. v. Manuel Chua 1. Whether the appellate court acted without or in excess of jurisdiction or with grave abuse of
(building case). Petitioners, who initiated the building case when Goldkey started putting up fences in some discretion by dismissing petitioners’ appeal on the ground that jurisdiction does not lie with the
portions of the property, claimed that the parcel of land was a road lot. regular courts but with the HLURB;
2. Whether the Court of Appeals acted without or in excess of jurisdiction or grave abuse of
On 10 September 1991, the HLURB issued a Development Permit to Goldkey allowing it to develop the land discretion by dismissing petitioners’ appeal on the ground that petitioners did not assign any error of
into residential townhouse units. The permit also mentioned that the project is classified as "Residential fact; and
Townhouse Subdivision" and, as evaluated, the same is "in accordance with the Zoning Ordinance of Quezon 3. Whether a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure is the proper
City." remedy for petitioners.
The Ruling of the Court
On 4 November 1991, petitioners filed a case for Annulment of Title and Damages with the Regional Trial
Court of Quezon City. The petition lacks merit.

Subsequently, the building official of Quezon City resolved the building case against petitioners and this The HLURB is the sole regulatory body for housing and land development. The extent to which an
decision became final and executory. The ruling held that the property is not a road lot but a residential lot. administrative agency may exercise its powers depends on the provisions of the statute creating such
agency.Courts will not determine a controversy where the issues for resolution demand the exercise of sound
On 5 June 1995, Branch 222 of the Regional Trial Court (trial court) of Quezon City issued an order administrative discretion.
dismissing the case for lack of jurisdiction over the subject matter.
Jurisdiction Lies with the HLURB
The Ruling of the Trial Court
PD 957, otherwise known as "The Subdivision and Condominium Buyers’ Protective Decree," granted the
The trial court dismissed petitioners’ case for lack of jurisdiction over the subject matter. The trial court National Housing Authority (NHA) the exclusive jurisdiction to regulate the real estate business. The scope of
pointed out that there was a decision rendered by the building official of Quezon City declaring the disputed the regulatory authority lodged in the NHA is indicated in the second whereas clause which states:
property a residential lot and not a road lot; hence, the building official issued a building permit. The HLURB
also issued a permit for the development of the land into a townhouse project. Petitioners did not appeal both "WHEREAS, numerous reports reveal that many real estate subdivision owners, developers,
rulings. The trial court stated that petitioners’ contention that the property is a road lot had been rendered moot operators, and/or sellers have reneged on their representations and obligations to provide and
by the finding of the building official which made the contrary declaration. If petitioners had any objection to maintain properly subdivision roads, drainage, sewerage, water systems, lighting systems, and
the ruling, they should have appealed the same to the Secretary of Public Works and Highways as provided in other similar basic requirements, thus endangering the health and safety of home and lot buyers,"
Section 307 of Executive Order No. (EO) 1096. The findings of administrative agencies which have expertise (Emphasis supplied)
are generally accorded not only respect but even finality.
Thus, Section 22 of PD 957 provides:
The trial court also stated that the property had been approved by the HLURB for development into a
townhouse project. The subject land was therefore removed from the jurisdiction of the regular courts. The Sec. 22. Alteration of Plans. — No owner or developer shall change or alter the roads, open
HLURB’s decision was also not appealed to the Office of the President as provided in Section 4 of PD 1344 spaces, infrastructures, facilities for public use and/or other form of subdivision development as
which gave the HLURB quasi-judicial powers. contained in the approved subdivision plan and/or represented in its advertisements, without the
permission of the Authority and the written conformity or consent of the duly organized
The Ruling of the Appellate Court homeowners association, or in the absence of the latter, by the majority of the lot buyers in the
subdivision. (Emphasis supplied)
On 17 September 1997, the Court of Appeals dismissed the appeal on the ground that it has no jurisdiction to
entertain the same. The appellate court stated that the original and amended complaints filed by petitioners PD 1344 amended PD 957 by empowering the NHA to issue writs of execution in the enforcement of its
were both premised on the claim that the subject parcels of land were subdivision road lots that were illegally decisions. Section 1 of PD 1344 states:
converted into residential lots and thereafter disposed by del Rosario, the subdivision developer. Therefore,
petitioners’ complaints were filed for the purpose of enforcing a contractual and statutory obligation of del Section 1. In the exercise of its functions to regulate the real estate trade and business and in addition to its
Rosario to preserve a subdivision road lot for street purposes. As such, the agency with jurisdiction is the powers provided for in Presidential Decree No. 957, the National Housing Authority shall have exclusive
HLURB, pursuant to the provisions of PD 957, 1216, and 1344, EO 648 dated 7 February 1981 and EO 90 jurisdiction to hear and decide cases of the following nature:
dated 17 December 1986.
a. Unsound real estate business practices;
 b. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer In Peña v. GSIS, the Court ruled that when an administrative agency is conferred quasi-judicial functions, all
against the project owner, developer, dealer, broker or salesman; and controversies relating to the subject matter pertaining to its specialization are deemed to be included within its
c. Cases involving specific performance of contractual and statutory obligations filed by jurisdiction. Split jurisdiction is not favored
buyers of subdivision lot or condominium unit against the owner, developer, dealer, broker or
salesman. (Emphasis supplied) As observed in C.T. Torres Enterprises, Inc. v. Hibionada:
Under EO 648, the NHA’s functions were transferred to the Human Settlement Regulatory Commission.
Section 8 of EO 648 provides: The argument that only courts of justice can adjudicate claims resoluble under the provisions of the
Civil Code is out of step with the fast-changing times. There are hundreds of administrative bodies
Section 8. Transfer of Functions. — The regulatory functions of the National Housing Authority now performing this function by virtue of a valid authorization from the legislature. This quasi-
pursuant to Presidential Decrees No. 957, 1216, 1344 and other related laws are hereby transferred judicial function, as it is called, is exercised by them as an incident of the principal power entrusted
to the Commission, together with such applicable personnel, appropriation, records, equipment and to them of regulating certain activities falling under their particular expertise.
property necessary for the enforcement and implementation of such functions. Among these
regulatory functions are: (1) Regulation of the real estate trade and business; (2) Registration of In the Solid Homes case for example the Court affirmed the competence of the Housing and Land
subdivision lots and condominium projects; (3) Issuance of license to sell subdivision lots and Use Regulatory Board to award damages although this is an essentially judicial power exercisable
condominium units in the registered units; (4) Approval of performance bond and the suspension of ordinarily only by the courts of justice. This departure from the traditional allocation of
license to sell; (5) Registration of dealers, brokers and salesmen engaged in the business of selling governmental powers is justified by expediency, or the need of the government to respond swiftly
subdivision lots or condominium units; (6) Revocation of registration of dealers, brokers and and competently to the pressing problems of the modern world.
salesmen; (7) Approval or mortgage on any subdivision lot or condominium unit made by the owner
Finally, in Cristobal v. Court of Appeals,we held that "questions relating to non-compliance with the requisites
or developer; (8) Granting of permits for the alteration of plans and the extension of period for
for conversion of subdivision lots are properly cognizable by the NHA, now the HLURB, pursuant to Section
completion of subdivision or condominium projects; (9) Approval of the conversion to other
22 of PD 957 and not by the regular courts."
purposes of roads and open spaces found within the project which have been donated to the city
or municipality concerned; (10) Regulation of the relationship between lessors and lessees; and Appeal by Certiorari Involving Questions of Law
(11) Hear and decide cases on unsound real estate business practices; claims involving refund filed
against project owners, developers, dealers, brokers or salesmen and cases of specific Section 2, Rule 41 of the Rules of Court states:
performance.(Emphasis supplied)
Sec. 2. Mode of appeal.—
EO 90 renamed the Human Settlement Regulatory Commission the Housing and Land Use Regulatory Board.
The HLURB retained the regulatory and adjudicatory functions of the NHA. (a) Ordinary Appeal. — The appeal to the Court of Appeals in cases decided by the Regional Trial
Court in the exercise of its original jurisdiction shall be taken by filing a notice of appeal with the
Clearly, the scope and limitation of the HLURB’s jurisdiction are well-defined. The HLURB’s jurisdiction to court which rendered the judgment or final order appealed from and serving a copy thereof upon the
hear and decide cases is determined by the nature of the cause of action, the subject matter or property adverse party. No record on appeal shall be required except in special proceedings and other cases
involved, and the parties. In the present case, petitioners are the registered owners of several lots adjoining a of multiple or separate appeals where the law or these Rules so require. In such cases, the record on
subdivision road lot connecting their properties to the main road. Petitioners allege that the subdivision lot appeal shall be filed and served in like manner.
owners sold the road lot to a developer who is now constructing cement fences, thus blocking the passageway
from their lots to the main road. In sum, petitioners are enforcing their statutory and contractual rights against (b) Petition for Review. — The appeal to the Court of Appeals in cases decided by the Regional
the subdivision owners. This is a specific performance case which falls under the HLURB’s exclusive Trial Court in the exercise of its appellate jurisdiction shall be by petition for review in accordance
jurisdiction. with Rule 42.

In Osea v. Ambrosio, the Court held that the provisions of PD 957 were intended to encompass all questions (c) Appeal by certiorari. — In all cases where only questions of law are raised or involved, the
relating to subdivisions. This intention was aimed to provide for an appropriate government agency, which is appeal shall be to the Supreme Court by petition for review on certiorari in accordance with
the HLURB, to which all parties aggrieved in the implementation of provisions and the enforcement of Rule 45. (Emphasis supplied)
contractual rights with respect to said category of real estate may take recourse.
In Sevilleno v. Carilo, citing Macawiwili Gold Mining and Development Co., Inc. v. Court of Appeals, this
Petitioners claim that respondents violated the annotation at the back of TCT No. RT-20895 by selling an Court summarized the rule on appeals:
unsegregated portion of the lot without obtaining prior court approval. The date of entry of this annotation is
18 August 1953. When PD 957, PD 1344, and EO 648 were enacted in 1976, 1978, and 1981, respectively, (1) In all cases decided by the RTC in the exercise of its original jurisdiction, appeal may be made
this annotation was impliedly modified such that the conversion of the road lot in the subdivision plan would to the Court of Appeals by mere notice of appeal where the appellant raises questions of fact or
fall under the HLURB’s jurisdiction pursuant to these laws. mixed questions of fact and law;

Petitioners argue that they can file a specific performance case to compel respondents to comply with their (2) In all cases decided by the RTC in the exercise of its original jurisdiction where the
contractual and statutory obligation to maintain the road lot. However, petitioners can only be granted appellant raises only questions of law, the appeal must be taken to the Supreme Court on a
complete relief if the subject sales are declared void and the subsequent partition is declared illegal. Petitioners petition for review on certiorari under Rule 45.
further contend that the HLURB, having only the jurisdiction to hear and decide specific performance cases,
can only compel petitioners to file a case for annulment of title and prosecute the action. Petitioners insist that (3) All appeals from judgments rendered by the RTC in the exercise of its appellate jurisdiction,
regardless of whether the appellant raises questions of fact, questions of law, or mixed questions of
in the final analysis, a case for annulment of title would still have to be filed with the ordinary courts.
 fact and law, shall be brought to the Court of Appeals by filing a petition for review under Rule 42. There were instances when the Court has relaxed the rule on the special civil action for certiorari as a
(Emphasis supplied) substitute for failure to file a timely petition for review on certiorari under Rule 45 such as where the
application of this rule would result in a manifest failure or miscarriage of justice. Although the Court has the
In First Bancorp, Inc. v. Court of Appeals this Court also explained the two modes of appeal from a final order discretion to treat a petition for certiorari as having been filed under Rule 45, there is nothing in the present
of the trial court in the exercise of its original jurisdiction: case to warrant a liberal application of the rules.
(1) by writ of error under Section 2(a), Rule 41 of the Rules of Court if questions of fact or WHEREFORE, we DISMISS the petition. We AFFIRM the 17 September 1997 Decision of the Court of
questions of fact and law are raised or involved; or Appeals. Costs against petitioners.
(2) appeal by certiorari under Section 2(c), Rule 41, in relation to Rule 45, where only
questions of law are raised or involved. (Emphasis supplied)

In the present case, petitioners raised only one issue in their Appellants’ Brief — whether "the Honorable Trial
Court a quo seriously erred in holding that it has no jurisdiction over the subject matter of the case when in
fact it has already acquired jurisdiction over the persons of the defendants and the subject matter of the case."

The question on jurisdiction is undoubtedly one of law. We have held that "a question of law exists when the
doubt or controversy concerns the correct application of law or jurisprudence to a certain set of facts; or when
the issue does not call for an examination of the probative value of the evidence presented, the truth or
falsehood of facts being admitted." Consequently, it is not disputed that the issue brought by petitioners to the
Court of Appeals involves solely the trial court’s jurisdiction over the subject matter of the case. The appellate [ G.R. No. 241865, February 19, 2020 ]
court can determine the issue raised without reviewing or evaluating the evidence. TRIFON B. TUMAODOS, PETITIONER, VS. SAN MIGUEL YAMAMURA PACKAGINC
CORPORATION, RESPONDENT
As petitioners’ appeal solely involves a question of law, the appellate court did not err in dismissing the appeal
on the ground of lack of jurisdiction pursuant to Section 2, Rule 50 of the Rules of Court which provides:
DECISION
Sec. 2. Dismissal of improper appeal to the Court of Appeals. — An appeal under Rule 41 taken
from the Regional Trial Court to the Court of Appeals raising only questions of law shall be INTING, J.:
dismissed, issues purely of law not being reviewable by said court. Similarly, an appeal by notice of
appeal instead of by petition for review from the appellate judgment of a Regional Trial Court shall
be dismissed. Before the Court is a Petition for Review under Rule 45 of the Rules of Court assailing the Decision dated
August 9, 2017 and the Resolution dated April 19, 2018 of the Court of Appeals (CA) in CA-G.R. SP No.
An appeal erroneously taken to the Court of Appeals shall not be transferred to the appropriate court 10322. The assailed Decision granted the petition for certiorari filed by San Miguel Yamamura Packaging
but shall be dismissed outright. (Emphasis supplied) Corporation (respondent), and nullified and set aside the Decision dated March 1, 2016 and the
Resolution dated May 18, 2016 of the National Labor Relations Commission (NLRC) in NLRC Case No.
Rule 65 is not a remedy for lost appeal. VAC-02-000081-2016 as well as all other issuances and proceedings rendered in the same case.

Petitioners should have directly taken their appeal to this Court by filing a petition for review
The assailed Resolution, on the other hand, denied the Motion for Reconsideration filed by Trifon B.
on certiorari under Rule 45 and not an ordinary appeal with the Court of Appeals under Rule 41 nor a petition
Tumaodos (petitioner).
for certiorari with this Court under Rule 65.

As held in Balayan v. Acorda, "the special civil action for certiorari is a limited form of review and is a The Antecedents
remedy of last recourse." It lies only where there is no appeal or plain, speedy, and adequate remedy in the
ordinary course of law.
Petitioner became an employee of respondent on October 6, 1988. As an employee of respondent, petitioner
In the present case, petitioners chose the wrong mode of appeal. Hence, the instant petition cannot prevail became a member of SMC Employees & Its Subsidiaries Multi-Purpose Cooperative (Cooperative).
since a petition for certiorari is not a substitute for a lost appeal, especially if the loss or lapse was an error in
petitioners’ choice of remedy. We have held in David v. Cordova that: Due to its plant reorganization, respondent implemented an Involuntary Separation Program effective
November 15, 2014. Petitioner was one of the employees who availed himself of the program. His separation
A petition for certiorari cannot be a substitute for an appeal from a lower court decision. Where package was computed at P3,080,244.66, but respondent withheld the amount of P1,400,000.00 on behalf of
appeal is available to the aggrieved party, the action for certiorari will not be entertained. The the Cooperative, to which petitioner allegedly had an outstanding indebtedness.
remedies of appeal (including petitions for review) and certiorari are mutually exclusive, not
alternate or successive. Hence, certiorari is not and cannot be a substitute for an appeal,
especially if one’s own negligence or error in one’s choice of remedy occasioned such loss or On October 13, 2014, respondent paid out petitioner's separation benefits, less the amount withheld. Petitioner
lapse. One of the requisites of certiorari is that there be no available appeal or any plain, speedy and signed a Receipt and Release in favor of respondent, but he made a notation that the amount of P1,400,000.00
adequate remedy. Where an appeal is available, certiorari will not prosper, even if the ground was still subject to verification.
therefore is grave abuse of discretion. (Emphasis supplied)
On November 28, 2014, respondent received a letter from petitioner wherein he claimed that he no longer had Petitioner, however, asserted that he no longer had any obligation to the Cooperative. He thus demanded the
any outstanding obligation to the Cooperative. Thus, petitioner demanded respondent to release to him the release of the withheld amount. At the same time, the Cooperative also claimed entitlement to the same
withheld amount. On February 13, 2015, respondent also received a letter from the Cooperative, disputing amount and invoked the provisions of the MOA and the Cooperative Code of the Philippines. Moreover, the
petitioner's assertions and also claiming entitlement to the withheld amount. Cooperative filed a complaint for collection of sum of money before the Cooperative Development Authority
Voluntary Arbitration Secretariat in relation to petitioner's alleged outstanding obligations to it.
Due to petitioner's and the Cooperative's conflicting claims, respondent, on March 17, 2015, filed a Complaint
for Interpleader with Consignation before Branch 55, Regional Trial Court (RTC), Mandaue City. Respondent averred that it acted in good faith when it withheld the sum supposedly due to petitioner or to the
Cooperative in the hope of determining who between the two is entitled to such amount.
Meanwhile, on April 22, 2015, petitioner filed a complaint before the NLRC Regional Arbitration Branch No.
VII for non-payment of separation pay and damages. The case was docketed as NLRC RAB VII 04-1000- On October 29, 2015, the LA rendered a Decision, the dispositive portion of which reads:
15. Considering that settlements failed, the Labor Arbiter (LA) directed the parties to simultaneously file their
respective position papers.
WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered ordering the respondent
corporation SAN MIGUEL YAMAMURA PACKAGING CORPORATION to pay complainant the
In the [Petitioner's] Position Paper,petitioner alleged that on March 13, 2007, he applied for an ordinary loan following:
with the Cooperative in the amount of P250,000.00. When the loan was granted, respondent had been
deducting from his salary the amount of P5,091.00 per payday, or a total of P10,182.00 per month, even
though he had not so authorized respondent to make deductions for the payment of his loan with the
Cooperative. Deductions were made from petitioner's salary since March 2007 until June 2011, when
respondent allegedly noticed certain anomalous and unscrupulous practices of the Cooperative. For this Refund of the deductions since March
P 529,464.00
reason, respondent issued a Memorandum dated June 23, 2011 informing the Cooperative that it would no 2007
longer accommodate deductions on the employees' payrolls. P
Separation Pay Withheld
1,400.000.00
Plus 6% interest P 115,767.84
Petitioner claimed that respondent made deductions totaling P529,464.00, which was more than double the Moral Damages P 50,000.00
sum that he owed to the Cooperative. He averred that he had not only paid his loan in full but had made excess Exemplary Damages P 30,000.00
payment in the amount of P279,464.00, which respondent must return. P
2,125,231.84
Petitioner further alleged that sometime in the early part of 2011, he applied for a loan with Home 10% Attorneys Fees P 212,523.18
Development and Mutual Fund (Pag-IBIG). As a requirement for the Pag-IBIG loan, he requested for a
Certificate of Employment and Compensation from respondent. However, the Human Resource (HR) Manager Or in the total aggregate sum of TWO MILLION THREE HUNDRED THIRTY SEVEN THOUSAND
refused to issue the document unless petitioner would sign what appeared, then, to be a blank form, but later SEVEN HUNDRED FIFTY FIVE PESOS AND 2/100 (P2,337,755.02)[.]
turned out to be an Authority to Deduct. Petitioner signed the form in order that he could obtain the required
employment certificate.
Other claims are denied for lack of merit and basis.
Anent the deduction of P1,400,000.00 from his separation pay, petitioner alleged that respondent merely relied
on the purported Authority to Deduct without seeing the loan documents or determining his total obligations. SO ORDERED.
Petitioner asserted that the Authority to Deduct had suspicious discrepancies; that the loans reflected therein
were fictitious and fabricated; and that the Cooperative and the HR Manager took advantage of the existing Respondent appealed to the NLRC. It posted the full amount of the judgment award but subsequently moved
deductions from petitioner's salary to make it appear that petitioner obtained a loan from the Cooperative, to reduce the required bond on the ground that the amount of P1,400,000.00 had already been consigned
when in truth, he did not. Petitioner averred that the Cooperative could not have known about the P5,091.00 before the RTC in connection with the Complaint for Interpleader with Consignation it previously filed.
deduction in his salary, unless respondent connived with it in disclosing such amount and allowed it to unduly
"piggyback" on the same deduction as if it were in payment of the alleged fictitious loans appearing in the
Authority to Deduct. On March 1, 2016, the NLRC rendered its Decision affirming the ruling of the LA. On March 18, 2016, the
NLRC issued a Resolution which merely noted the motion to reduce bond. Subsequently, in the
Resolution dated May 18, 2016, the NLRC denied respondent's motion for reconsideration with respect to both
For its part, respondent alleged in its Position Paper that it had a long-standing agreement with the its Decision and its inaction on the motion to reduce bond.
Cooperative, whereby it undertook to deduct the amount of monthly amortizations from the salary of the
employees who were members of the Cooperative, subject to the company's policies on deduction. This
agreement was formalized in the Memorandum of Agreement (MOA)22 dated May 14, 2013. After the Aggrieved, respondent filed a petition for certiorari with the CA. Respondent contended, among others, that
execution of the MOA, the Cooperative submitted to the HR Department several Authorities to Deduct signed the NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction when it held that
by the employee-members concerned, including petitioner, to effect the implementation of the payroll the LA had jurisdiction over the case, notwithstanding the fact that petitioner's asserted claim has no
deductions. In view of such authority from the employees and due to its obligations under the MOA to make reasonable causal connection with the employer-employee relationship, and that the ultimate issue at hand is
the subject deductions, respondent withheld a portion of petitioner's separation pay. the validity or authority to deduct or the lack thereof which should be brought before the RTC. Respondent
also averred that the interpleader case was filed prior to the labor case and was the more appropriate action;
hence, the labor case should be dismissed and the resolution of the issue should be deferred to the RTC in 217) of the Labor Code, as amended, bestows upon the LA original and exclusive jurisdiction over cases filed
which the interpleader case was pending. Respondent further argued that the NLRC committed grave abuse of by workers involving wages, among others, if accompanied by a claim for reinstatement; all claims, except
discretion when it affirmed the order for the refund of P529,464.00, notwithstanding that it is contrary to the those for Employees Compensation, Social Security, Medicare and maternity benefits, arising from employer-
principle of unjust enrichment and that petitioner was already barred by estoppel. employee relations involving an amount exceeding P5,000.00 regardless of whether accompanied with a claim
for reinstatement; and claims for actual, moral, exemplary and other forms of damages arising from employer-
employee relations.
In resolving the petition for certiorari, the CA particularly concentrated on the issue of whether the labor
tribunals had jurisdiction to resolve the instant case. Answering in the negative, the CA ruled that the issues
raised and the reliefs prayed for by petitioner in his position paper are not cognizable by the labor As can be gleaned above, the jurisdiction of the LA over money claims and damages is confined to those cases
tribunals. The dispositive portion of the CA assailed Decision dated August 9, 2017 reads: which are either accompanied by a claim for reinstatement or arising from employer-employee relations. Here,
the Court finds that petitioner's claims do not fall under any of these cases.
WHEREFORE, the Petition is GRANTED. The Decision and Resolution dated March 1, 2016 and May 18,
2016, respectively, as well as all other issuances and proceedings rendered in NLRC Case No. VAC-02- In ruling that the determination of the case is beyond the competence of the labor tribunals, the CA found that
000081-2016, are NULLIFIED and SET ASIDE. although employment relations existed between respondent and petitioner, and the subject of the complaint
before the LA was petitioner's money claims against respondent, such money claims did not involve and did
SO ORDERED. not arise out of such employment relationship. Hence, the CA held that the jurisdiction over petitioner's claims
belonged to the RTC, and not the labor tribunals.

The CA found that petitioner was not seeking to enforce his rights under the Labor Code, other labor statutes,
or any collective bargaining agreement, and his claims could not be resolved by referring to labor law The Court agrees.
provisions. On the contrary, the CA held that the money claim presented before the labor tribunal relates, on
the one hand, to petitioner's supposed financial obligations to the Cooperative, if there were still any; and on In Indophil Textile Mills, Inc. v. Engr. Adviento,48 the Court declared:
the other hand, to respondent's contractual obligation to the Cooperative pursuant to the MOA provision
wherein respondent undertook to deduct any unpaid loan balances from the final pay of the borrower-
While we have upheld the present trend to refer worker-employer controversies to labor courts in light of the
employee in the event of his/her retirement, resignation, or termination. To the CA, the determination of these aforequoted provision, we have also recognized that not all claims involving employees can be resolved solely
matters does not require the expertise in labor management relations, wage structures or other terms and
by our labor courts, specifically when the law provides otherwise. For this reason, we have formulated the
conditions of employment; rather, it entails the application of civil law, particularly on obligations and "reasonable causal connection rule," wherein if there is a reasonable causal connection between the claim
contracts.
asserted and the employer-employee relations, then the case is within the jurisdiction of the labor courts; and
in the absence thereof, it is the regular courts that have jurisdiction. Such distinction is apt since it cannot be
Hence, this petition. presumed that money claims of workers which do not arise out of or in connection with their employer-
employee relationship. and which would therefore fall within the general jurisdiction of the regular courts of
Assignment of Errors justice, were intended by the legislative authority to be taken away from the jurisdiction of the courts and
lodged with Labor Arbiters on an exclusive basis.

I
AS A MATTER OF LAW, LABOR COURTS HAVE JURISDICTION OVER, AND THE AUTHORITY TO To the Court, petitioner's claims have no "reasonable causal connection" with his employment relationship
with respondent. It bears to point out that the case that petitioner filed was neither a complaint for illegal
AWARD, EMPLOYMENT BENEFITS SUCH AS SEPARATION PAY. THUS, THE COURT OF
APPEALS GRAVELY ERRED WHEN IT HELD THAT THE LABOR COURT HAS NO JURISDICTION dismissal nor a claim for reinstatement. His complaint was for alleged non-payment of separation benefits and
damages. It is notable, however, that respondent never denied petitioner's entitlement to his separation pay. In
OVER THE SUBJECT MATTER.
II fact, on October 13, 2014, respondent paid out petitioner's separation package, except that it withheld the
amount of P1,400,000.00, which, purportedly, was his outstanding indebtedness to the Cooperative. Petitioner,
THE HONORABLE COURT ERRED WHEN IT HELD THAT THE ISSUES IN THIS CASE DO NOT
REQUIRE THE APPLICATION OF ANY LABOR LAWS. in turn, signed a Receipt and Release in favor of respondent but made notation that the amount of
P1,400,000.00 was still subject to verification. Thus, by signing the Receipt and Release, petitioner had in fact
acknowledged that he had been paid all amounts due him comprising his separation benefits, except that he
The Court's Ruling questioned the withholding of the P1,400,000.00 as he claimed that he no longer had existing loan obligations
to the Cooperative. It appears, thus, that the principal relief sought by petitioner in his complaint was not the
The petition is bereft of merit. payment of his separation package but the release to him of the withheld amount of P1,400,000.00, to which
both he and the Cooperative claimed entitlement. In addition, he also sought the return of the alleged excess
deductions made for his 2007 loan in the amount of P279,464.00.
In cases involving workers and their employers, the delineation between the jurisdiction of the regular courts
and that of the labor courts has always been a matter of dispute. In this case, the Court agrees with the CA that
it is the regular courts that have jurisdiction over petitioner's claims. Ergo, given that the disputed amount of P1,400,000.00 and the alleged excess deductions of P279,464.00 both
relate to petitioner's alleged indebtedness to the Cooperative and not to respondent, it becomes apparent that
the controversy involves debtor-creditor relations between petitioner and the Cooperative, rather than
Not all controversies or money claims by an employee against the employer or vice versa fall within the employer-employee relations between respondent and petitioner. Evidently, the employer-employee
exclusive jurisdiction of the LA. With regard to money claims and damages, Article 224 (formerly Article relationship between respondent and petitioner in this case is merely incidental and the principal relief sought
by petitioner can be resolved not by reference to the Labor Code or other labor relations statute or a collective When the Corporation filed its Position Paper, it wasted no time to inform the labor arbiter that prior to
bargaining agreement but by the general civil law. Tumaodos' filing of his money claim complaint, there was already an Interpleader with Consignation case
before the RTC, since the amount subject of Tumaodos' money claim was also being claimed by the
Cooperative. This fact should have cautioned the [LA], and later the NLRC, that the subject matter of the case
Thus, as held in Halagueña, et al. v. PAL, Inc.:
is beyond their competence.

Not every controversy or money claim by an employee against the employer or vice-versa is within the
Noteworthy, Tumaodos himself admitted being a member of the Cooperative and having incurred a loan
exclusive jurisdiction of the labor arbiter. Actions between employees and employer where the employer-
employee relationship is merely incidental and the cause of action precedes from a different source of therefrom in 2007. Considering these circumstances, the determination of Tumaodos' entitlement to the
amount he was claiming could not, and should not just be made to rest on his bare allegation. Instead, the
obligation is within the exclusive jurisdiction of the regular court. Here, the employer-employee relationship
between the parties is merely incidental and the cause of action ultimately arose from different sources of adjudicating body should entail the presentation of loan documents, payment slips, and other documents to
support Tumaodos' and the Cooperative's respective claims. The [LA] and the NLRC's area of competence or
obligation, i.e., the Constitution and CEDAW.
expertise simply do not encompass these matters; hence, the said labor tribunals should have prudently
dismissed the case and yielded to the jurisdiction of the RTC. x x x
Thus, where the principal relief sought is to be resolved not by reference to the Labor Code or other labor
relations statute or a collective bargaining agreement but by the general civil law, the jurisdiction over the
dispute belongs to the regular courts of justice and not to the labor arbiter and the NLRC. In such situations, The Court also finds that the LA and the NLRC erred in ordering the refund to petitioner of the amount of
P529,464.00, the total deductions on his salary which started in March 2007. According to petitioner,
resolution of the dispute requires expertise, not in labor management relations nor in wage structures and other
terms and conditions of employment, but rather in the application of the general civil law. Clearly, such claims respondent made total deductions amounting to P529,464.00 and he had made an excess payment of
P279,464.00, which respondent must return. Thus, petitioner had in fact admitted that he was indebted to the
fall outside the area of competence or expertise ordinarily ascribed to labor arbiters and the NLRC and the
rationale for granting jurisdiction over such claims to these agencies disappears. Cooperative but only for the amount of P250,000.00; yet, the LA and the NLRC both found proper the refund
of P529,464.00 based on their conclusion that this whole amount constituted an illegal deduction on his salary.
In any case, the Court finds that the refund of either P529,464.00 or P279,464.00 has no sufficient basis. To
Here, since both petitioner and the Cooperative claimed entitlement to the withheld amount of P1,400,000.00, reiterate, the presentation of all pertinent loan documents is necessary in order to arrive at a complete and just
respondent appropriately filed a Complaint for Interpleader with Consignation before Branch 55 of the RTC of resolution of the case. Apparently, this cannot be possible in this labor complaint filed by petitioner against
Mandaue City. Under Section 1, Rule 62 of the Rules of Court, a person may file a special civil action for respondent considering that the Cooperative is not afforded the opportunity to present its own evidence and the
interpleader if conflicting claims are made against him/her/it over a subject matter in which he/she/it has no determination of the case would be based merely on the unilateral claims of petitioner.
interest. The action is brought against the claimants to compel them to litigate their claims among themselves.
Section 1, Rule 62 of the Rules of Court provides:
In sum, the determination of petitioner's case is beyond the competence of the labor tribunals for the following
reasons: 1) petitioner's claims have no reasonable causal connection with his employment relationship with
SECTION 1. When interpleader proper. - Whenever conflicting claims upon the same subject matter are or respondent; 2) the Cooperative is not a party to the labor complaint and would therefore be deprived of the
may be made against a person who claims no interest whatever in the subject matter, or an interest which in opportunity to plead its claims; and 3) the Interpleader with Consignation case before the RTC, which was
whole or in part is not disputed by the claimants, he may bring an action against the conflicting claimants to filed by respondent prior to petitioner's labor complaint, was the proper forum to ventilate the claimants'
compel them to interplead and litigate their several claims among themselves. respective claims over the disputed amount of P1,400,000.00.

It bears emphasis that the interpleader case before the RTC was filed prior to petitioner's filing of his WHEREFORE, the Petition for Review is DENIED. The Decision dated August 9, 2017 and the Resolution
complaint before the LA. The fact that respondent filed the interpleader case is even an indication of good dated April 19, 2018 of the Court of Appeals in CA-G.R. SP No. 10322 are AFFIRMED.
faith on its part as both petitioner and the Cooperative would be given the right to have their respective claims
ventilated before the court. Contrarily, the Cooperative who is not a party to the labor complaint before the LA
SO ORDERED.
would not have the opportunity to oppose or refute petitioner's unilateral claims therein. In addition, the fact
that respondent had consigned the amount of P1,400,000.00 in the RTC where the interpleader case was
pending demonstrates the lack of intention on its part to deprive petitioner of such amount, if he was indeed
the one entitled to it.

Moreover, it is also worthy to mention that neither petitioner nor respondent presented before the LA the
purported loan agreement between petitioner and the Cooperative. To the Court, given that the disputed sum of
P1,400,000.00 pertained to the alleged outstanding loan obligation of petitioner to the Cooperative, it was
necessary that all documents pertinent thereto, most especially the loan agreement itself, be presented before
the adjudicating body, assessed, and taken into consideration in determining who is entitled to the amount
contested. As correctly submitted by respondent in his Commen to the petition, a just resolution of petitioner's
complaint cannot be done without affording the Cooperative a fair and equal opportunity to prove its
entitlement to the amount of P1,400,000.00.

Thus, the CA aptly ruled:

 Factual Antecedents

GMCLI engaged the services of RSII for the construction of its hospital in Cabuyao, Laguna, in accordance
with a Construction Contract (Contract) which valued the entire construction project at P248,500,000.00,with
15% of said contract price to be paid to RSII as down payment, and the remaining balance to be paid in
monthly installments based on the percentage of work accomplished. Under Section 9 of the Contract, all
taxes on the services rendered were for the account of RSII. Finally, an arbitration clause additionally
stipulated the parties' resort to arbitration in the event of dispute.

On April 12, 2015, RSII submitted to GMCLI its Progress Billing No. 15, which indicated that it had already
accomplished 79.31% of the project, equivalent to P9,228,286.77, inclusive of VAT. After receipt and upon
evaluation of GMCLI, however, it estimated that the accomplished percentage was only at 78.84% of the
entire contract price or equivalent to P7,043,260.00 for Progress Billing No. 15, to wit:

Accomplishment Percent as of April 12, 2015:

As submitted by [RSII]: 79.31% x 248,500,000.00 = P197,088,497.00

As submitted by [GMCLI]: 78.84% x 248,500,000.00 = P195,920,749.0014

CIAC GMCLI, after its internal audit, learned that it was unable to withhold and remit 2% CWT on RSII's Progress
Billings Nos. 1 to 14. On April 29, 2015, in order to make up for its previous non-remittances, GMCLI
EN BANC withheld the 2% CWT not only from Progress Billing No. 15 (or from the amount of P7,043,260.00) but from
[ G.R. No. 230112, May 11, 2021 ] the cumulative amount of all Progress Billings Nos. 1-1516 (or from the amount of P197,088,497.00,
GLOBAL MEDICAL CENTER OF LAGUNA, INC., PETITIONER, VS. ROSS SYSTEMS equivalent to the submitted 79.31% accomplishment of RSII).17 Thus, for RSII's Progress Billing No. 15
INTERNATIONAL, INC., RESPONDENT. priced at P7,043,260.00., GMCLI only paid a total of P3,101,491.00, with computation as cited by the CIAC
[G.R. No. 230119, May 11, 2021] arbitral award18 as follows:
ROSS SYSTEMS INTERNATIONAL, INC., PETITIONER, VS. GLOBAL MEDICAL CENTER OF
LAGUNA, INC., RESPONDENT. P7,043,260.00

DECISION Less: 2% of P197,088,497.01 (submitted billing of (P3,941,769.0

RSII, instead of P195,920,749.00, as submitted by 0)
CAGUIOA, J.: GMCLI)

Before the Court are Consolidated Petitions for Review on Certiorari (petitions) under Rule 45 of the Rules of ____________
Court (Rules) filed by Ross Systems International, Inc., (RSII) and Global Medical Center of Laguna, Inc. _
(GMCLI), both assailing the Decision dated October 28, 2016 (assailed Decision) of the Court of Appeals, Payment P3,101,491.00
Sixth Division (CA), in CA-G.R. SP No. 145753.
RSII sent two demand letters to GMCLI, claiming that it still had a balance of P4,884,778.92 to collect from
The assailed Decision affirmed with modification the arbitral award4 dated May 10, 2016 of the Construction the latter, under the following allegations: (1) GMCLI's outstanding obligation under Progress Billing No. 15
Industry Arbitration Commission (CIAC), which mainly adjudged: (1) GMCLI was without authority to should have been P8,131,474.83, and not merely P7,043,260.00; and (2) GMCLI should not have belatedly
withhold and remit the 2% Creditable Withholding Tax (CWT) on the cumulative amount of 15 progress withheld the 2% CWT on Progress Billings Nos. 1 to 14, but should only have withheld the 2% CWT from
billings of RSII; (2) RSII was not entitled to the release of the amount of P4,884,778.92, equivalent to the 2% Progress Billing No. 15.
CWT withheld; and (3) RSII was still entitled to the amount of P1,088,214.33, representing the balance due
after deducting from P8,131,474.83 the 2% CWT on Progress Billings Nos. 1 to 15 (in the amount of
Proceedings before the CIAC
P3,941,769.00) and the payment already made to RSII (in the amount of P3,101,491.00).5

With its demand unheeded, RSII filed a complaint and request for arbitration before the CIAC on August 6,
The CA likewise denied the motion for reconsideration of RSII through its Resolution6 dated February 21,
2015. GMCLI filed a motion to dismiss on August 27, 2015,assailing the jurisdiction of the CIAC. A Case
2017.
Management Conference was held on October 20, 2015,23 followed by a Preliminary Conference on
November , 2015 where a set of Terms of Reference (TOR) was signed. After the parties submitted their
respective affidavits and pieces of documentary evidence, and presented their respective witnesses,both RSII Finally, the CIAC held that GMCLI was not entitled to its claim of moral damages, as it could not be
and GMCLI submitted their Supplemental Draft Awards to the CIAC on April 26, 2016. considered faultless, and that neither party could be awarded attorney's fees due to both parties' contributory
lapses.
On May 10, 2016, the CIAC promulgated its Final Award, which ruled that:
Proceedings before the CA
1. The CIAC has jurisdiction over the instant case as it involves a construction dispute.
2. [GMCLI] is not authorized to withhold and remit the CWT of 2% on the cumulative amount Aggrieved, RSII filed a petition for review under Rule 43 of the Rules before the CA and assailed the CIAC
based on Progress Billings Nos. 1 to 15. arbitral award, imputing the following as errors: (1) the ruling that it was not entitled to the release of
3. [RSII] is not entitled to the release of the amount of [P]4,884,778,92 as the balance for Progress P4,884,778.92 as the balance of the payment for Progress Billing No. 15, and (2) the finding that it was not
Billing No. 15. entitled to attorney's fees.
4. [GMCLI] is not entitled to moral damages.
5. No attorney's fees shall be paid by either party to the other.
In its Decision dated October 28, 2016, the CA partially granted the petition, the dispositive portion of which
6. The cost of arbitration shall be shouldered by the Parties in proportion to their respective claims. reads:

The CIAC held that the crux of the controversy was the correct computation of the amount due RSII under
WHEREFORE, the appeal is PARTIALLY GRANTED. The Final Award dated [May 10, 2016 issued by
Progress Billing No. 15, and since the same claim stemmed from a construction contract, said controversy the Construction Industry Arbitration Commission (CIAC) in CIAC Case No. 20-2015
qualified as a construction dispute within the contemplation of Executive Order No. (E.O.) 1008, and within
is AFFIRMED with MODIFICATION in that [RSII] is still entitled to the payment of the amount of
the ambit of the CIAC. [P]1,088,214.83, which represents the balance after deducting from [P]8,131,474.83 (at 78.84% work
accomplishment) the 2% CWT on Progress Billing[s] Nos. 1 to 15 in the amount of [P]3,941,769.00 and the
The CIAC further determined that with respect to the propriety of GMCLI's act of withholding and remitting payment already made to RSII in the amount of [P]3,101,491.00.
the 2% CWT on the cumulative amount based on Progress Billings Nos. 1 to 15, GMCLI had no more
authority to withhold and remit the same, reasoning thus:
In affirming the CIAC's award, the CA ruled that the amount of P3,815,996.50, equivalent to the 2% CWT on
Progress Billings Nos. 1 to 14 was already remitted to the BIR, and it would be unjust to require GMCLI, as
Both [RSII] and GMCLI agree that, citing Revenue Regulation No. 2-98, as amended (RR 2-98), the 2% the withholding agent, to effectively shoulder the amount of tax which RSII had the legal duty to pay.
withholding tax must be withheld or deducted by the latter, as the withholding agent, from its payments for the
former's services at the time said payments were made. x x x. With respect to granting RSII's entitlement to P1,088,214.83, the CA reasoned thus:

xxxx
[RSII] is still, however, entitled to collect the amount of P1,088,214.83.

Applying the above provision to this case, [GMCLI]'s obligation to withhold the 2% withholding tax on the To recall, [GMCLI] initially evaluated [RSII]'s accomplishment at 78.84% and computed the amount due to
income derived by the [RSII] from the former's payments of Progress Billings Nos. 1 to 14 arose at the time it
[RSII] at [P]7,043,260.00. Subtracted from this amount was the 2% CWT on the amount of
paid for each of said progress billings submitted to it by [RSII]. Not later, or worse, much later spanning at [P]197,088,497.01, equivalent to [P]3,941,769,00, which [GMCLI] already remitted to the BIR. Thus,
least three years, as what [GMCLI] did.
[GMCLI] paid [RSII] the amount of [P]3,101,491.00.

To justify its action of applying the 2% CWT deduction on the cumulative amount from Progress Billing[s] [RSII] accepted [GMCLI]'s evaluation of its work accomplishment at 78.84% but argued that the amount due
No[s]. 1 to [] 15, GMCLI recorded the amount in two installments as incomes of [RSII] for 2015. x x x This is
for Progress Billing No. 15 was [P]8,131,474.83, and not [P]7,043,260.00, and computed the amount it is still
falsehood and contrary to the above-cited provision of the Rules and Regulations of the BIR. entitled to collect from [GMCLI] as follows:

However, the CIAC held that despite GMCLI's lack of authority to withhold the 2% CWT on the cumulative
Submitted billing at
bill, RSII was still not entitled to the release of P4,884,778.92, or the amount equivalent to the 2% CWT 78.84% P8,131,474,8
withheld on the cumulative billings. Apart from observing that there was actually no dispute as to the
Accomplishment 3.
computation as the same was not contested by GMCLI, the CIAC held that RSII was no longer entitled to the Les
said amount because at the time the same was remitted to the Bureau of Internal Revenue (BIR), RSII had not
s:
yet paid income taxes on the payments from Progress Billings Nos. 1 to 15. 2% withholding tax for
Progressive Billing No. 15 P145,204.91
In addition, the CIAC held that the fact that RSII did declare the income taxes on those payments on March 22, P7,986,269.9
2016, or after GMCLI remitted the cumulated 2% CWT to BIR, was of no moment. Applying the doctrine of 2
Last Clear Chance analogously, the CIAC held that RSII, having knowledge of GMCLI's prior remittance, had Les
the last clear opportunity to avoid the loss through a double payment of the 2% CWT. It held that RSII's failure s:
to avert the effective double payment could only be held on its own account. P3,101,491.0
Payment made to [RSII] 0
 P4,884,778.9 As will be seen in the succeeding discussions, the historical arc of this relationship appears to maintain the
Amount due / collectible 2 early, original legislative intent of judicial restraint in favor of the empowerment of arbitration. More
particularly, a historical survey informs the Court of the intent of affording parties with a direct recourse to this
Court in challenging a CIAC arbitral award on pure questions of law48 or one where only the application of
The CIAC ruled that there is no issue on the [RSII]'s computation since [GMCLI] did not contest the same.
This said, [RSII] is still entitled to the amount of P1,088,214.83, which is computed as follows: the law as to uncontroverted facts is raised, which, under CIAC's original charter, and apart from the most
excepting of circumstances, are the only questions that may be raised against it.

Submitted billing at 78.84% P8,131,474,83

Accomplishment 0 Original and Affirmed Intent of E.O. 1008
Les
s: The construction industry, in and of itself wrought with factual complexity, is not a stranger to the industry-
Payment made to [RSII] P3,101,491.00 specific arbitration. In its international history, as early as the turn of the 20th century, the peculiar intricacies
2% withholding tax for of the construction processes and contracts have led to the call for industry-focused dispute resolution that
Progressive Billing[s] Nos. 1 to implored professional decision-making and arbitration mechanisms.
15 P3,941,769.00
P1,088,214.83 In the Philippines, the birth of construction arbitration can be traced back to the issuance of Presidential
Amount due / collectible 44
Decree No. (P.D.) 1746, which created the Construction Industry Authority of the Philippines (CIAP).
Recognizing the need to provide a national environment conducive for its expansion, P.D. 1746 was issued to
Both RSII's Motion for Partial Reconsideration and GMCLI's Motion for Reconsideration were denied through address the then non-cohesive government policies by providing a central agency tasked to accelerate as well
the CA's Resolution dated February 21, 2017. Hence the separate, now consolidated, petitions filed by GMCLI as regulate the growth of the industry.
and RSII before the Court.
On February 4, 1985, with the growth of the construction industry in full swing, then President Ferdinand E.
On the one hand, GMCLI prays that the assailed Decision be partially modified and the CIAC arbitral award Marcos issued E.O. 1008 which created the Construction Industry Arbitration Commission (CIAC) as the
be reinstated in toto. On the other, RSII claims that it is entitled not only to the balance of P1,088,214.83, but arbitration machinery for the Philippine construction industry. Its policy sought to ensure "early and
to the amount of P3,815,996.50, equivalent to the allegedly improperly withheld 2% CWT, or that, in the expeditious settlement of disputes" in order to provide stability for its enterprises, and fairly insulate them
alternative, GMCLI should be ordered to issue BIR Form 2307 (Certificate of Creditable Tax Withheld at from bureaucratic lags. Its whereas clause clearly provided for the law's resolve to remove the disputes of the
Source) in favor of RSII. industry from the languid and problematic machinery of the courts, with the full awareness that disputes held
up in the judiciary's dockets easily translated to infrastructure projects that halted to a standstill.
Issues
The law likewise designed the CIAC awards to be decisive and conclusive, to wit:
The parties come before the Court bearing the following consolidated issues: (1) whether RSII is entitled to the
release of P3,815,996.50 or the equivalent of 2% CWT on Progress Billings Nos. 1 to 14, in addition to the SECTION 19. Finality of Awards. - The arbitral award shall be binding upon the parties. It shall be final and
award of P1,088,214.83 and (2) whether GMCLI may be ordered to issue BIR Form 2307 to RSII. [u]nappealable except on questions of law which shall be appealable to the Supreme Court.

The Court's Ruling SECTION 20. Execution and Enforcement of Awards. As soon as a decision, order or award has become final
and executory, the Arbitral Tribunal or the single arbitrator, with the concurrence of the CIAC, shall [motu
The Court's resolution of the case before it is three-pronged and involves: (1) a revisit and untangling of the proprio] or on motion of any interested party, issue a writ of execution requiring any sheriff or other proper
officer to execute said decision, order or award.
relevant laws and case pronouncements on the extent of judicial review of CIAC arbitral awards;

(2) a decisive harmonization of the standing laws on CIAC review vis-à-vis perceptible Constitutional Section 19 of the CIAC Charter provides that findings of fact of the CIAC are no longer open to challenge on
appeal, but its legal conclusions may be assailed before the Court. This narrow corridor of remedies against a
limitations; and finally, (3) a determination of rights of the parties in accordance with existing tax laws on
creditable withholding tax. CIAC award as categorically provided for in its Charter was broadened by two succeeding procedural rules
which significantly altered the review mode of a CIAC award, with the final sum a scenario akin to procedural
laws defeating specialized substantive law and its inceptive spirit.
I - Extent of Judicial Review vis-à-vis CIAC awards
Procedural Departures:
The case at bar presents the Court a timely opportunity to review and demarcate the laws and rules relevant to Revised Administrative Circular No. 1-95 and
the relationship between the courts and the CIAC. Seen through the lens of the national policy of enabling Rule 43 of 1997 Rules of Civil Procedure
alternatives to dispute resolution, the Court here takes a second look at judicial review and the specific
mandate and authority of the CIAC, with the end of tracing how the extent of the former's reach over the latter,
or the understanding thereof, has evolved over the years. The first procedural law which effectively expanded the reach of judicial review vis-à-vis CIAC arbitral
awards is Revised Administrative Circular No. 1-95, issued for the Court by then Chief Justice Andres R.
Narvasa on May 16, 1995, which amended Circular No. 1-91 and prescribed the rules governing appeals to the
CA from final orders or decisions of the Court of Tax Appeals and quasi-judicial agencies. For the first time, more than an additional layer in the process, and its resolution of construction disputes no longer the
the CIAC was included in the enumeration of quasi-judicial agencies, the decisions of which may be appealed alternative to litigation, but only the beginning.
to the CA. This inclusion is the first clear departure from E.O. 1008's original provision that a CIAC arbitral
award may only be appealed to this Court. Further, Revised Administrative Circular No. 1-95 also
Substantive Realignment towards Deference to CIAC: R.A. 9285 and the Special ADR Rules
substantially extended judicial review powers in its categorical inclusion of questions of fact as those that may
be appealed, to wit:
Significantly, however, on July 28, 2003, this departure would be unequivocally corrected and realigned with
the passing of R.A. 9285, also known as the Alternative Dispute Resolution Law of 2004. Preliminarily, telling
3. WHERE TO APPEAL. — An appear under these rules may be taken to the Court of Appeals within the are the exchanges during the deliberations of the House Committee on Justice of its provisions. Then
period and in the manner herein provided, whether the appeal involves questions of fact, of law, or mixed
deliberated as House Bill 5654, its records reflected the legislative desire to provide alternative modes of
questions of fact and law. (Emphasis supplied) dispute resolution in order to provide dispute settlement machineries that are far removed from notoriously
cumbersome judicial mechanisms, in order, for one, to decongest the courts' dockets:
This procedural expansion was affirmed by the 1997 Rules of Civil Procedure, as amended, particularly Rule
43 thereof, which once more included the CIAC as among the quasi-judicial agencies the decisions of which THE CHAIRMAN [(Rep. Marcelino C. Libanan)]: x x x x
may be appealed to the CA with respect to either points of fact, or law, or both.

x x x I think from the Philippine Judicial Academy who raised the issue on separation of powers. Nevertheless,
In retrospect, what may be gleaned is that the enabling of the CA to review questions of fact pertaining to the it is the impression of the Chair that this is a very good bill and that this will de-clog our cases in our regular
CIAC awards departed from E.O. 1008's original design of the relationship between the courts and the CIAC,
courts and so we have to pass this if possible this 12th [C]ongress.
when it created the latter. In effect, the authoritative expertise of the CIAC was undone with these two new
procedural changes because with the CA's power to review the arbitral tribunal's factual determinations, the
CA then acts as a trial court, before which factual assertions already threshed out in the CIAC are litigated xxxx
anew. Needless to say, one may be reasonably hard-pressed to find sound basis for a court's exercise of
reviewing a specialized tribunal's findings of fact that are well within its specialized competence and well- MR. ANTONIO M. MARTINEZ (Vice Chancellor, Philippine Judicial Academy): Thank you, Mr. Chairman.
outside the court's.

Just like Atty. Pilando and Dean Parlade, I would like to voice out also the sentiments of the Judiciary on this
More so, such a factual review easily runs the peril of being speculative, as it overly extends the review aspect that we certainly welcome this bill. It is really a laudable piece of legislation and would, in effect, be a
powers that may invite ridicule upon the courts, which are forced to venture into industry-specific technical very helpful device to decongest the courts of [their] clogged dockets.
findings that they are not designed to do.

xxxx
To be sure, the Court dispels with utmost import any conclusion to the effect that upholding the CIAC's
authoritative expertise on questions of facts before it necessarily translates to even the slightest implication of
inadequacy of intelligence or inferiority of competence on the part of appellate judges. This inference is as As a matter of fact, recently, we launched the mediation project in the appellate level. We hope that in due
unintended as it is unsupported by the succeeding exhaustive discussion of the history and the constitutional time, we will be able to eventually saturate all of the courts nationwide with mediators and will be able to help
schema within which this particular mode of review is found. us in decongesting the clogged docket of court.

The Court's iteration of the original limits set upon judicial review of the CIAC arbitral awards must not be R.A. 9285 was also designed to draw a broad and bright line between litigation and alternative resolutions of
considered impertinence against appellate judges, lest all rulings that delineate limits be seen as a put-down of disputes, as was shown by the comment of the head of the Chartered Institute of Arbitrators:
the competence of the jurisdiction they confine. The Court here simply upholds the persuasive weight of
factual findings of the CIAC, and consequently rules against a factual judicial review that effectively MR. MARIO VALDERAMA (Representative, Chartered Institute of Arbitrators): Thank you, Your Honor.
undermines the CIAC's conclusive and authoritative findings, consistent with the prevailing laws as outlined.
Now, now to go directly to the point, when we talked about ADR, Your Honor, please, we talk about party
It further goes without saying that appellate judges are fully equipped to conduct factual review by evaluating autonomy and of course the promotion of ADR is only the means resulting to the effect, among them, the
whether or not factual findings of lower courts or tribunals are supported by evidence. This fact is affirmed not declogging of courts, and probably, we can do something about the declaration of policy instead of promoting,
in the least by the fact that in the event that a factual review of the CIAC arbitral awards is merited in the merely promoting ADR, then probably, what would have to be upheld would be the autonomy of the parties
narrowest of sense, the same may be brought before the CA through the appropriate petition. Demonstratively, insofar as their dispute resolution is concerned. The thinking being that... since we are adults, with sufficient
therefore, the CA is ultimately not divested of any review powers that it was not intended to wield, to begin discretion, then we may... we should have the option of choosing whether to go to litigation or to go ADR.58
with, but merely donned with the authority of review of the CIAC arbitral awards that falls within the original
extent of E.O. 1008.
Consistent with the above rationale for demarcating options for parties in dispute, as well as relieving the
courts of the workload that may no longer necessitate litigation, Sections 34-40, Chapter 6 of R.A. 9285, on
Finally, this factual review of the courts also weighs heavily in costs for the parties, in that instead of having the governing laws over construction disputes, distinctly resolved all doubts in favor of the restrictive
an abridged resolution of their disputes, the same is, in fact, lengthened, with resort to the CIAC becoming no limitation of judicial review only to questions of law, and a categorical deference to the CIAC with respect to
its findings of fact.
First, Section 34 positively provided for the return to E.O. 1008, as the original applicable law, which in turn The court shall not set aside or vacate the award of the arbitral tribunal merely on the ground that the arbitral
rules out judicial review of the CIAC's factual determination, and exclusively provides that appeal may only be tribunal committed errors of fact, or of law, or of fact and law, as the court cannot substitute its judgment for
to the Court, and on the narrow limit of questions of law only: that of the arbitral tribunal. (Emphasis supplied)

SEC. 34. Arbitration of Construction Disputes: Governing Law. - The arbitration of construction disputes In December of the same year, the Department of Justice (DOJ) likewise issued Department Circular No.
shall be governed by Executive Order No. 1008, otherwise known as the Construction Industry Arbitration 98, which resonated R.A. 9285's intent to restore E.O. 1008's pertinent provisions on the CIAC, as provided in
Law. Chapter 6 thereof:

Second, evidencing the legislative intent to defer the threshing of facts to the CIAC and not the courts, Section CHAPTER 6
39 likewise fittingly provides that in the event that a trial court is notified of a construction arbitration clause ARBITRA
between parties who are litigating before it, the court is bound to dismiss the case, unless the parties agree to
the contrary:
TION OF CONSTRUCTION DISPUTES

SEC. 39. Court to Dismiss Case Involving a Construction Dispute. - A regional trial court where a construction The Construction Industry Arbitration Commission (CIAC), which has original and exclusive jurisdiction over
dispute is filed shall, upon becoming aware, not later than the pretrial conference, that the parties had entered
arbitration of construction disputes pursuant to Executive Order No. 1008, s. 1985, otherwise known as the
into an arbitration to be conducted by the CIAC, unless both parties, assisted by their respective counsel, shall "Construction Industry Arbitration Law", shall promulgate the Implementing Rules and Regulations governing
submit to the regional trial court a written agreement exclusive for the Court, rather than the CIAC, to resolve
arbitration of construction disputes, incorporating therein the pertinent provisions of the ADR Act.
the dispute.

A slight, recent digression from this bright-line demarcation occurred in the 2011 amendment of CIAC
Finally, on September 1, 2009, for the avoidance of uncertainties as to where the line of review is drawn, the
Revised Rules of Procedure Governing Construction Arbitration (CIAC Rules), specifically Section 18.2
Supreme Court, through Chief Justice Reynato S. Puno, issued Administrative Matter No. (A.M) 7-11-08- thereof, which echoed Rule 43 of the Rules with respect to appeal of the CIAC award to the CA on questions
SC, also known as the Special ADR Rules, which definitively affirmed the bright-line rule on judicial restraint
of fact.
with regard to factual review. Undeniably clear are Rule 19.7 and 19.10 of the Special ADR Rules, which
provide:
It is crucial to note, however, that the CIAC Rules only iterated the procedural license provided in Rule 43 of
the Rules, which, as seen, was already reconsidered by R.A. 9285.
PART VI

In the final analysis, it appears that a circumspect consideration of the evolution of laws illustrates that
RULE 19: MOTION FOR RECONSIDERATION, APPEAL AND
although the procedural rules have expanded the judicial review to include questions of fact, R.A. 9285 in
CERTIORARI 2003, as seconded by the Special ADR Rules in 2009, recalibrated said extent and restated the limit of the
Court's review powers as to include only questions of law.
xxxx
Exceptions to the Rule on Pure Questions of Law
B. GENERAL PROVISIONS ON APPEAL AND CERTIORARI
Numerous cases decided both prior to and after the passage of R.A. 9285 have confirmed the persuasive
RULE 19.7. No appeal or certiorari on the merits of an arbitral award.  An agreement to refer a dispute to authority of the CIAC in determining merits in a construction dispute. The vital role of the neutral expertise of
arbitration shall mean that the arbitral award shall be final and binding. Consequently, a party to an arbitration the arbitral tribunal in such disputes has been underscored in a 2011 New York State Bar Report on the
is precluded from filing an appeal or a petition for certiorari questioning the merits of an arbitral advantages of arbitration in the field of construction:
award. (Emphasis supplied)
In arbitration, the experienced construction neutral requires much less "setting the stage" for the context of the
xxxx dispute. He or she will understand substantive case law in the area, for instance case law regarding change
orders, betterment, "quantum meruit" claims and other specialties of construction law. These concepts will not
be "new" to the arbitrator so while time may be spent on describing the application of these laws to the
RULE 19.10. Rule on judicial review on arbitration in the Philippines. - As a general rule, the court can only
vacate or set aside the decision of an arbitral tribunal upon a clear showing that the award suffers from any of particular case, the arbitrator will not need to be introduced to the concepts.
the infirmities or grounds for vacating an arbitral award under Section 24 of Republic Act No. 876 or under
Rule 34 of the Model Law in a domestic arbitration, or for setting aside an award in an international arbitration An experienced construction arbitrator will also have the ability to understand complex construction disputes
under Article 34 of the Model Law, or for such other grounds provided under these Special Rules. on a technical level. Construction disputes are usually resolved on the facts and the contract. In cases that
haven't settled, there is often a disagreement on the facts and the contract. Was there a material delay by the
If the Regional Trial Court is asked to set aside an arbitral award in a domestic or international arbitration on, engineer in approving shop drawings? Were the shop drawings complete? Do the disputed Change Orders
actually represent work outside the scope of the contract? Were proper procedures followed during drilling?
any ground other than those provided in the Special ADR Rules, the court shall entertain such ground for the
setting aside or non-recognition of the arbitral award only if the same amounts to a violation of public policy. Does the contract promise payment for unanticipated sub-surface site conditions or not? Experienced
arbitrators frequently commiserate that attorneys inexperienced in arbitration often spend their time proving Corporation, the Court upheld the autonomy of arbitral awards, and refrained from reviewing factual findings
the filings of character or ethics in the participants, while neglecting to address that which every arbitrator thereof, reasoning thus:
cares about, the facts and the contract. Construction cases do not deserve to be settled on emotion, but rather
on a matrix of complex facts and contractual responsibilities.
We have deliberately refrained from passing upon the merits of the arbitral award — not because the award
was erroneous — but because it would be improper. None of the grounds to vacate an arbitral award are
In related fashion, several notable decisions have illustrated how CIAC awards serve the premium of present in this case and as already established, the merits of the award cannot be reviewed by the courts.
persuasive factual determination, but are nevertheless not insulated from judicial review on grounds that go
into the integrity of the arbitral tribunal. Our refusal to review the award is not a simple matter of putting procedural technicalities over the substantive
merits of a case; it goes into the very legal substance of the issues. There is no law granting the judiciary
In Metropolitan Cebu Water District v. Mactan Rock Industries, Inc.,the Court repeated the early recognition authority to review the merits of an arbitral award. If we were to insist on reviewing the correctness of the
of the peculiar nature of the construction industry as one that is considered "x x x vital for the fulfilment of award (or consent to the CA's doing so), it would be tantamount to expanding our jurisdiction without the
national development goals x x x and the corresponding need to have its disputes decided with dispatch. In benefit of legislation. This translates to judicial legislation — a breach of the fundamental principle of
similar import, in R.V. Santos Company, Inc. v. Belle Corporation,65 the Court expounded on the deference to separation of powers.
the factual findings of the CIAC, to wit:
The CA reversed the arbitral award — an action that it has no power to do — because it disagreed with
Section 19 [of E.O. 1008 makes it crystal clear that questions of fact cannot be raised in proceedings before the the tribunal's factual findings and application of the law. However, the alleged incorrectness of the award
Supreme Court — which is not a trier of facts — in respect of an arbitral award rendered under the aegis of the is insufficient cause to vacate the award, given the State's policy of upholding the autonomy of arbitral
CIAC. Consideration of the animating purpose of voluntary arbitration in general, and arbitration awards.
under the aegis of the CIAC in particular, requires us to apply rigorously the above principle embodied
in Section 19 that the Arbitral Tribunal's findings of fact shall be final and [u]nappealable. More, in CE Construction Corporation v. Araneta Center, Inc., the Court was similarly inclined to refrain from
reviewing the CIAC's factual conclusions, ruling in this wise:
xxxx
x x x When their awards become the subject of judicial review, courts must defer to the factual findings borne
Aware of the objective of voluntary arbitration in the labor field, in the construction industry, and in any other by arbitral tribunals' technical expertise and irreplaceable experience of presiding over the arbitral process.
area for that matter, the Court will not assist one or the other or even both parties in any effort to subvert or Exceptions may be availing but only in instances when the integrity of the arbitral tribunal itself has been put
defeat that objective for their private purposes. The Court will not review the factual findings of an arbitral in jeopardy. These grounds are more exceptional than those which are regularly sanctioned in Rule 45
tribunal upon the artful allegation that such body had "misapprehended the facts" and will not pass petitions.
upon issues which are, at bottom, issues of fact, no matter how cleverly disguised they might be as "legal
questions["]. The parties here had recourse to arbitration and chose the arbitrators themselves; they must have
xxxx
had confidence in such arbitrators. The Court will not, therefore, permit the parties to relitigate before it
the issues of facts previously presented and argued before the Arbitral Tribunal, save only where a very
clear showing is made that, in reaching its factual conclusions, the Arbitral Tribunal committed an The CIAC does not only serve the interest of speedy dispute resolution, it also facilitates authoritative dispute
error so egregious and hurtful to one party as to constitute a grave abuse of discretion resulting in lack resolution. Its authority proceeds not only from juridical legitimacy but equally from technical expertise. The
or loss of jurisdiction. Prototypical examples would be factual conclusions of the Tribunal which creation of a special adjudicatory body for construction disputes presupposes distinctive and nuanced
resulted in deprivation of one or the other party of a fair opportunity to present its position before the competence on matters that are conceded to be outside the innate expertise of regular courts and adjudicatory
Arbitral Tribunal, and an award obtained through fraud or the corruption of arbitrators. Any other, bodies concerned with other specialized fields. The CIAC has the state's confidence concerning the entire
more relaxed, rule would result in setting at naught the basic objective of a voluntary arbitration and technical expanse of construction, defined in jurisprudence as "referring to all on-site works on buildings or
would reduce arbitration to a largely inutile institution. altering structures, from land clearance through completion including excavation, erection and assembly and
installation of components and equipment."
In another case, we have also held that:
xxxx
It is settled that findings of fact of quasi-judicial bodies, which have acquired expertise because their
jurisdiction is confined to specific matters, are generally accorded not only respect,  but also finality, This is not to say that factual findings of CIAC arbitral tribunals may now be assailed before the Court of
especially when affirmed by the Court of Appeals. In particular, factual findings of construction arbitrators are Appeals. Section 3's statement "whether the appeal involves questions of fact, of law, or mixed questions of
final and conclusive and not reviewable by this Court on appeal. fact and law" merely recognizes variances in the disparate modes of appeal that Rule 43 standardizes: there
were those that enabled questions of fact; there were those that enabled questions of law, and there were those
that enabled mixed questions fact and law. Rule 43 emphasizes that though there may have been variances, all
In 2015, in Philippine Race Horse Trainer's Association, Inc. v. Piedras Negras Construction and Development appeals under its scope are to be brought before the Court of Appeals. However, in keeping with the
Corporation the Court found that the matters the parties brought for resolution essentially required factual
Construction Industry Arbitration Law, any appeal from CIAC arbitral tribunals must remain limited
determination, which it held must "rightly be left to the CIAC's sound expertise." Subsequently, in the case to questions of law.
of Fruehauf Electronics Philippines Corporation v. Technology Electronics Assembly and Management Pacific
In his Concurring Opinion, Associate Justice Marvic M.V.F. Leonen (Justice Leonen) adds on the rationale for exceeded their powers, or so imperfectly executed them, that a mutual, final and definite award
the high degree of deference accorded to CIAC awards, to wit: upon the subject matter submitted to them was not made) and;

The CIAC serves the interest not only of speedy dispute resolution, but also of authoritative dispute resolution. (2) Allegation of the arbitral tribunal's violation of the Constitution or positive law.
It was created with a particular view of enabling "early and expeditious settlement of disputes" aware of the
exceptional role of construction to "the furtherance of national development goals". x x x. In addition to the prototypical examples that exceptionally trigger a factual review of the CIAC's arbitral
awards, the Court here discerns the merit in adding the otherwise forgotten presumption that factual findings of
xxxx the CIAC arbitral tribunal may also be revisited by the Court upon an allegation that the arbitral tribunal
committed an act that is violative of the Constitution or other positive laws. To abate fears, the delimitation
discerned in the Court's power to review factual findings of the CIAC shall in no way plausibly allow for a
CE Construction further discussed how "[t]he creation of a special adjudicatory body for construction disputes
presupposes distinctive and nuanced competence on matters that are conceded to be outside the innate situation wherein the Court's hand is stayed from correcting a blatant constitutional or legal violation because
the autonomy of the arbitral process is paramount. Contrarily, the Court underscores that the contracted or very
expertise of regular courts and adjudicatory bodies concerned with other specialized fields." It drew attention
to how the CIAC is a "quasi-judicial administrative agency equipped with the technical proficiency that limited grounds for alleging grave abuse of discretion on the part of the CIAC arbitral tribunal, however
narrow, are still principally tethered to the courts' primary duty of upholding the Constitution and positive
enables it to efficiently and promptly resolve conflicts. x x x.
laws. The addition of the second ground makes plain that no amount of contracting or expanding grounds for
grave abuse will ever be permitted to lay waste to the original purpose of the courts and their mandate to
This judicial restraint and deference was further reaffirmed in the subsequent cases of Metro Rail Transit uphold the rule of law.
Development, Corporation v. Gammon Philippines, Inc., Camp John Hay Development Corporation v. Charter
Chemical and Coating Corporation and Metro Bottled Water Corporation v. Andrada Construction &
Given the above Court pronouncements on judicial restraint in favor of animating and upholding the autonomy
Development Corporation, Inc.
of the CIAC, as well as the more reasonable exceptions that all only involve a determination of whether the
arbitral award in question was tainted with a challenge on the integrity of the arbitrators themselves or
Far from being absolute, however, the general rule proscribing against judicial review of factual matters otherwise a violation of the Constitution or positive law in the course of the arbitral process, the Court deems it
admits of exceptions, with the standing litmus test that which pertain to either a challenge on the integrity of high time to revisit prior decisions that include among the exceptions meriting a factual review the mere
the arbitral tribunal, or otherwise an allegation of a violation of the Constitution or positive law. The 2019 case disagreement of the factual findings of the CA vis-à-vis those made by the CIAC, as in the oft-cited case
of Tondo Medical Center v. Rante illustrates: of Uniwide Sales Realty and Resources Corporation v. Titan-Ikeda Construction and Development
Corporation and the more recent case of Shangri-La Properties, Inc. v. B.F. Corporation.
Thus, questions on whether the CIAC arbitral tribunals conducted their affairs in a haphazard and immodest
manner that the most basic integrity of the arbitral process was imperiled are not insulated from judicial All told, the Court must now, sitting en banc, inescapably re-weigh the applicable laws and harmonize them in
review. Thus: order to make the pertinent rules consistent with the spirit of the law that gave form to the CIAC, along with
the overriding and uncontroverted national policy of favoring the unfettered and enabled operations of the
x x x We reiterate the rule that factual findings of construction arbitrators are final and conclusive and not alternative modes of resolutions such as the CIAC.
reviewable by this Court on appeal, except when the petitioner proves affirmatively that: (1) the award was
procured by corruption, fraud or other undue means; (2) there was evident partiality or corruption of the II - Mode of Appeal of CIAC awards vis-à-vis Constitutional Limitations
arbitrators or of any of them; (3) the arbitrators were guilty of misconduct in refusing to postpone the hearing
upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; (4) one
or more of the arbitrators were disqualified to act as such under section nine of Republic Act No. 876 and Unmistakably, the tracing of the evolution of laws relating to judicial review of the CIAC awards as shown
above demonstrates that the mode of appeal of the CIAC awards exists within a latticework of constitutional
willfully refrained from disclosing such disqualifications or of any other misbehavior by which the rights of
any party have been materially prejudiced; or (5) the arbitrators exceeded their powers, or so imperfectly licenses and restraints. These constitutional parameters converge on three key points: (1) the prescriptive
apportionment' of the powers and appellate jurisdictions of both the CA and the Court, (2) the correlated
executed them, that a mutual, final and definite award upon the subject matter submitted to them was not
made. x x x. limitation on the Congress' power to determine and confer a court's jurisdiction, and (3) the limitations on the
Court's rule-making power. These constitutional conditions bear upon the ultimate question of whether E.O.
1008, as echoed by the R.A. 9285, validly provided for a direct resort to this Court for appeals on the CIAC
In other words, the scenarios that will trigger a factual review of the CIAC's arbitral award must fall within awards.
either of the following sets of grounds:
The Court here deems it fit that navigating these constitutional considerations be informed, foremost, by the
(1) Challenge on the integrity of the arbitral tribunal (i.e., (i) the award was procured by corruption, spirit of the CIAC Charter and the CIAC's primary function and design, with the end in view of clearing road
fraud or other undue means; (ii) there was evident partiality or corruption of the arbitrators or of any blocks where the Constitution and other laws have placed none.
of them; (iii) the arbitrators were guilty of misconduct in refusing to postpone the hearing upon
sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; (iv)
The construction industry necessitates the constant and supported availability of speedier and more efficient
one or more of the arbitrators were disqualified to act as such under Section 9 of R.A. 876 or "The
Arbitration Law", and willfully refrained from disclosing such disqualifications or of any other modes of resolving disputes precisely because of the very nature of the industry itself, where an unsettled
dispute can easily run projects to the ground with serious delays and irreparable damage. Major international
misbehavior by which the rights of any party have been materially prejudiced; or (v) the arbitrators
construction projects typically opt for arbitration as the final tier of dispute resolution for a variety of reasons (d) All criminal cases in which the penalty imposed is reclusion perpetua or higher.
that serve the parties' interest best, with courts limited to a supportive role.
(e) All cases in which only an error or question of law is involved.
The fundamental advantage of arbitration over litigation in the specialized context of a construction dispute
goes into the general flexibility of tailoring the resolution of disputes in a way that serves nuanced business
x x x x.
priorities.Arbitration also allows players in this highly competitive and collaborative industry to realize their
intentions of resolving conflicts while avoiding courts and preserving professional relationships:
Section 5(2), Article VIII has also been considered textually exclusive to courts and does not contemplate
quasi-judicial bodies. In Fabian v. Desierto (Fabian), the Solicitor General invoked the application of this
In each of its niches, construction cases can involve a number of contractors, subcontractors, material suppliers provision to support its argument that Section 27 of R.A. 6770 does not increase the Court's appellate
and design professionals. Mediation with a knowledgeable industry professional can not only resolve the
jurisdiction, as the Court already has jurisdiction over questions of law by virtue of Section 5(2)(e), Article
dispute, but resolve the dispute with a consensus regarding the cause of the dispute that allows the parties to VIII of the Constitution. This argument was, however, rejected by the Court, which interpreted this
accept responsibility for their respective obligations.
constitutional grant of appellate jurisdiction to cover only "courts composing the integrated judicial system":

This can lead to a resolution of the conflict which helps maintain relationships and allows companies to work We are not impressed by this discourse. It overlooks the fact that by jurisprudential developments over the
together again.
years, this Court has allowed appeals by [certiorari] under Rule 45 in a substantial number of cases and
instances even if questions of fact are directly involved and have to be resolved by the appellate court. Also,
With benefits to parties that include the cost and time-efficient process facilitated by neutral and qualified the very provision cited by petitioner specifies that the appellate jurisdiction of this Court contemplated therein
decision makers or the "knowledgeable neutral" which are typically architects, engineers or other industry is to be exercised over "final judgments and orders of lower courts," that is, the courts composing the
professionals,the availability of arbitration as a mode for resolving construction disputes in the country has integrated judicial system. It does not include the quasi-judicial bodies or agencies, hence whenever the
served as the impetus for the chartering of the CIAC. Primarily grounded on matters of policy, the CIAC was legislature intends that the decisions or resolutions of the quasi-judicial agency shall be reviewable by the
created precisely to forestall delays that resolution of construction disputes encounters in court litigation, with Supreme Court or the Court of Appeals, a specific provision to that effect is included in the law creating that
the recognized net effect of frustrating national development. quasi-judicial agency and, for that matter, any special statutory court. No such provision on appellate
procedure is required for the regular courts of the integrated judicial system because they are what are referred
to and already provided for, in Section 5, Article VIII of the Constitution:
After recapturing the original legislative intent inclined towards promoting arbitration in the area of the CIAC
awards, it is next incumbent upon this Court to determine with a firm degree of finality and
conclusiveness whether that precedent design was carried out with procedural and substantive validity, and Further, this constitutionally determined appellate jurisdiction is prescribed as the minimum breadth of the
ultimately whether it cleared all the relevant constitutional hurdles and conditions. Court's jurisdiction, as Section 2, Article VIII provides that Congress may not diminish the apportioned
appellate jurisdiction of the Court:
Appellate Jurisdiction of the Court
Section 2. The Congress shall have the power to define, prescribe, and apportion the jurisdiction of various
The first constitutional limitation that the CIAC's direct appeal to the Court must hurdle is the constitutionally courts but may not deprive the Supreme Court of its jurisdiction over cases enumerated in Section 5 hereof.
detailed jurisdiction of the Court. Article VIII of the 1987 Constitution outlines the powers of the Judiciary,
and Section 5(2) thereof prescribed the Court's appellate jurisdiction, to wit: No law shall be passed reorganizing the Judiciary when it undermines the security of tenure of its Members.

Section 5. The Supreme Court shall have the following powers: In elucidating on the operative interaction of Section 2, Article VIII of the Constitution with Section 5(2),
Article VIII, the Court in Morales v. Court of Appeals (Morales) held that:
xxxx
Jurisdiction is, of course, conferred by the Constitution or by Congress. Outside the cases enumerated in
Section 5(2) of Article VIII of the Constitution, Congress has the plenary power to define, prescribe and
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of
Court may provide, final judgments and orders of lower courts in: apportion the jurisdiction of various courts. Accordingly, Congress may, by law, provide that a certain class of
cases should be exclusively heard and determined by one court. Such would be a special law and must be
construed as an exception to the general law on jurisdiction of courts, namely, the Judiciary Act of 1948 as
(a) All cases in which the constitutionality or validity of any treaty, international or amended, or the Judiciary Reorganization Act of 1980. In short, the special law prevails over the general law.
executive agreement, law, presidential decree, proclamation, order, instruction,
ordinance, or regulation is in question.
This same constitutionally prescribed appellate jurisdiction of the Court is, however, not incapable of increase,
for as long as the Court's advice and concurrence under Section 30, Article VI are secured:
(b) All cases involving the legality of any tax, impost, assessment, or toll, or any penalty
imposed in relation thereto.
Section 30. No law shall be passed increasing the appellate jurisdiction of the Supreme Court as provided in
this Constitution without its advice and concurrence.
(c) All cases in which the jurisdiction of any lower court is in issue.
Stated differently, Congress may pass a law that increases the Court's jurisdiction, but not one which decreases SECTION 3. Until the Congress shall provide otherwise the Supreme Court shall have such original and
it. In case of a law increasing the Court's appellate jurisdiction, such would only violate the constitutional appellate jurisdiction as may be possessed and exercised by the Supreme Court of the Philippine Islands at the
proscription under Section 30, Article VI of the Constitution if it increases the appellate jurisdiction of this time of the adoption of this Constitution. The original jurisdiction of the Supreme Court shall include all cases
Court, not lower courts, without the former's advice and concurrence. affecting ambassadors, other public ministers, and consuls.

Proceeding from the doctrine in Morales, it follows that by the legislation of E.O. 1008, as reiterated by R.A. Similarly, the 1973 Constitution likewise granted Congress with the authority to define and apportion the
No, 9285, which articulated the law's intent to provide a direct route of appeal from the CIAC to this Court, Court's jurisdiction, with the sole limitation that its jurisdiction be not diminished. Section 1, Article X, in
Congress effectively increased the appellate jurisdiction of this Court to include awards of the CIAC. This relation to Section 5 provided:
increase in appellate jurisdiction, in turn, brings to fore the question of whether the requisite advice and
concurrence of the Court under Section 30, Article VI were triggered. ARTICLE X
The Judiciary
Thus, the first question distilled for the Court is whether the direct appeal of the CIAC awards to this Court
was an effective increase of the Court's appellate jurisdiction which therefore required the Court's blessing SECTION 1. The Judicial power shall be vested in one Supreme Court and in such inferior courts as may be
through its advice and concurrence.
established by law. The Batasang Pambansa shall have the power to define, prescribe and apportion the
jurisdiction of the various courts, but may not deprive the Supreme Court of its jurisdiction over cases
The Court finds that there was no such increase in the Court's jurisdiction that required such concurrence. It is enumerated in Section five hereof.
decisive to remember that when the 1987 Constitution was created, the Court was already enjoying the
jurisdiction over appeal from CIAC awards on pure questions of law, as conferred to it by Congress for two xxxx
years, by its passage of E.O. 1008. The direct resort to this Court from the CIAC awards on purely legal
questions was an increase of the Court's jurisdiction that was already in place prior to the 1987 Constitution's
Article VIII, Section 30 which required this Court's advice and concurrence. SECTION 5. The Supreme Court shall have the following powers:

To be sure, when E.O. 1008 was enacted in 1980, no such condition of the Court's advice and concurrence was (1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers
required anywhere in the 1973 Constitution, and hence at that time, no such concurrence was needed. With the and consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto,
earlier 1935 Constitution, under Section 2, Article VIII thereof, Congress was expressly authorized to define and habeas corpus.
and determine the Court's jurisdiction, without foreclosing the authority to increase the same, the only
limitation being against any diminishing of the existing jurisdiction conferred upon it, to wit: (2) Review and revise, reverse, modify, or affirm on appeal or certiorari, as the law or
the Rules of Court may provide, final judgments and decrees of inferior courts in—
ARTICLE VIII
Judicial Department (a) All cases in which the constitutionality or validity of any treaty, executive
agreement, law, ordinance, or executive order or regulation is in question.
xxxx (b) All cases involving the legality of any tax, impost, assessment, or toll, or
any penalty imposed in relation thereto.
(c) All cases in which the jurisdiction of any inferior court is in issue.
SECTION 2. The Congress shall have the power to define, prescribe and apportion the jurisdiction of various (d) All criminal cases in which the penalty imposed is death or life
courts, but may not deprive the Supreme Court of its original jurisdiction over cases affecting ambassadors,
imprisonment.
other public ministers, and consuls, nor of its jurisdiction to review, revise, reverse, modify, or affirm on (e) All cases in which only an error or question of law is involved.
appeal, certiorari, or writ of error, as the law or the rules of court may provide, final judgments and decrees of
inferior courts in —
(3) Assign temporarily judges of inferior courts to other stations as public interest may
require. Such temporary assignment shall not last longer than six months without the
(1) All cases in which the constitutionality or validity of any treaty, law, ordinance, or
consent of the judge concerned.
executive order or regulation is in question.

(4) Order a change of venue or place of trial to avoid a miscarriage of justice.

(2) All cases involving the legality of any tax, impost, assessment, or toll, or any penalty
imposed in relation thereto.
(5) Promulgate rules concerning pleading, practice, and procedure in all courts, the
admission to the practice of law, and the integration of the Bar, which, however, may be
(3) All cases in which the jurisdiction of any trial court is in issue.
repealed, altered or supplemented by the Batasang Pambansa. Such rules shall provide a
simplified and inexpensive procedure for the speedy disposition of cases, shall be
(4) All criminal cases in which the penalty imposed is death or life imprisonment. uniform for all courts of the same grade, and shall not diminish, increase, or modify
substantive rights.
(5) All cases in which an error or question of law is involved.
 (6) Appoint its officials and employees in accordance with the Civil Service Law.95 (1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas
corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of its
Demonstrably, the 1973 Constitution and its immediate predecessor allowed Congress to apportion the Court's appellate jurisdiction;
jurisdiction, without any concomitant requirement of the Court's prior acceptance or subsequent concurrence.
It stands to undeniable reason therefore that when E.O. 1008 vested this Court with the direct and exclusive (2) Exclusive original jurisdiction over actions for annulment of judgments of Regional
jurisdiction over appeals from CIAC awards, the Court's jurisdiction was increased without any need for it to Trial Courts; and
first accede to said increase.
(3) Exclusive appellate jurisdiction over all final judgements, resolutions, orders or
With all the constitutional conditions met for enabling a direct appeal to the Court, the next question for the awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or
Court's determination is the proper remedial route through which the direct appeal of the CIAC awards to this commission, including the Securities and Exchange Commission, the Social Security
Court may be submitted. Commission, the Employees Compensation Commission and the Civil Service
Commission, [e]xcept those falling within the appellate jurisdiction of the Supreme Court
Based on the prior discussions, appeal from the CIAC awards may no longer be filed under Rule 43. This in accordance with the Constitution, the Labor Code of the Philippines under Presidential
Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the
leaves only appeal by certiorari under Rule 45, which provides:
third paragraph and subparagraph 4 of the fourth paragraph of Section 17 of the Judiciary
Act of 1948.
RULE 45
Appeal by Certiorari to the Supreme Court
The Court of Appeals shall have the power to try cases and conduct hearings, receive evidence and perform
any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate
SECTION 1. Filing of Petition with Supreme Court. — A party desiring to appeal by certiorari from a jurisdiction, including the power to grant and conduct new trials or further proceedings. Trial or hearings in the
judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or Court of Appeals must be continuous and must be completed within three (3) months, unless extended by the
other courts whenever authorized by law, may file with the Supreme Court a verified petition for review Chief Justice. (As amended by R.A. No. 7902.) (Emphasis supplied)
on certiorari. The petition shall raise only questions of law which must be distinctly set forth. (1a, 2a)
This appellate jurisdiction of the CA is likewise textually exclusive. Section 1, Rule 43 of the Rules echoes the
As it stands, Rule 45 contemplates only appeals from final judgments and orders of lower courts, and does not grant of this appellate jurisdiction to the CA, to wit:
include quasi-judicial bodies or agencies.ℒαwρhi ৷ This differs from the former Rule 45 of the 1964 Rules of
Court which made mention only of the CA, and had to be adopted in statutes creating and providing for
SECTION 1. Scope. — This Rule shall apply to appeals from judgments or final orders of the Court of Tax
appeals from certain administrative or quasi-judicial agencies whenever the purpose was to restrict the scope
of the appeal to questions of law. Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasijudicial agency
in the exercise of its quasi-judicial functions. Among these agencies are the Civil Service Commission, Central
Board of Assessment Appeals, Securities and Exchange Commission, Office of the President, Land
In furtherance of the animating basis for the direct appeal of the CIAC awards to this Court, CIAC awards may Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks
reasonably be considered as an exemption to Rule 45's exclusive contemplation of lower courts. An and Technology Transfer, National Electrification Administration, Energy Regulatory Board, National
interpretation otherwise would create a scenario where a procedural limitation, which may be hurdled, i.e., Telecommunications Commission, Department of Agrarian Reform under Republic Act No. 6657,
jurisdiction may be increased provided it complies with Section 30, Article VI, operatively prevails over a Government Service Insurance System, Employees Compensation Commission, Agricultural Inventions
substantive intendment to the contrary provided by no less than the CIAC's very own charter. Given the unique Board, Insurance Commission, Philippine Atomic Energy Commission, Board of Investments, Construction
import of the CIAC's design as a specialized and expedient mode of resolving construction disputes with Industry Arbitration Commission, and voluntary arbitrators authorized by law. (Emphasis supplied)
persuasive finality, its substantive design must be granted primacy over procedural rules that, as will be
discussed further, place no insurmountable obstacle before it.
The language of the enumeration of quasi-judicial tribunals under Section 9(3) of B.P. 129, on the other hand,
indicates that it is not an exclusive list, so that if the enabling statute of a tribunal, later found to be a quasi-
Appellate Jurisdiction of the Court of judicial agency, does not categorically provide for an aggrieved party's judicial recourse, Section 9(3) of B.P.
Appeals as provided by Batas Pambansa Blg. 129 129 seems to serve to fill the gap.

With the increase in the Court's appellate jurisdiction found valid, the next constitutional condition that In a number of cases, this Court has relied on Section 9(3) of B.P. 129 to designate the CA, via Rule 43, as the
confronts this issue is whether E.O. 1008, issued on February 4, 1985, violated Batas Pambansa Blg. (B.P) proper court to which appeals from quasi-judicial agencies should be made, in spite of laws vesting jurisdiction
129,which was earlier passed on August 14, 1981 and amended by R.A. 7902, on February 23, 1995,98 when directly to the Court. In First Lepanto Ceramics, Inc. v. Court of Appeals, involving Article 82 of E.O. 226,
E.O. 1008 provided for the direct appeal of the CIAC awards to this Court, particularly, Section 9(3), Chapter I which provided for a direct appeal from the decisions or final orders of the Board of Investments directly with
of B.P. 129, which provides: the Court, this Court ruled that Circular 1-91, which implements B.P. 129 with respect to appeals to the CA
from final orders or decisions of the quasi judicial agencies, is controlling over said provision of E.O. 226.
SEC. 9. Jurisdiction. - The Court of Appeals shall [e]xercise:
In Carpio v. Sulu Resources Development Corporation, which involved the application of Section 79 of R.A.
7942, which states that decisions of the Mines' Adjudication Board (MAB) may be reviewed by this Court
through a petition for review by certiorari, the Court found that because said law increased its appellate A more acute case in point, involving a demonstration of a presidential decree carving out an exception in the
jurisdiction without its concurrence, appeals from decisions of the MAB shall be taken to the CA through Rule jurisdictions conferred under B.P. 129, is the case of Tomawis v. Balindong. Here, the Court settled the issue
43 of the Rules, in accordance with B.P. 129, Circular No. 1-91, and its rule-making power under the of jurisdiction over appeals from the Shari'a District Court, and ruled that B.P. 129 was enacted to reorganize
Constitution. only existing civil courts and is a law of general application to the judiciary, whereas P.D. 1083 is a special
law that only applies to Shari'a courts, and therefore must prevail in application to Shari 'a courts over the
former, viz.:
Still particularly with respect to the CIAC awards, this Court categorized the CIAC in Metro Construction, Inc.
v. Chatham Properties, Inc. (Chatham) as a quasi-judicial agency. There it held that arbitral awards may be
brought to the CA, pursuant to Circular No. 1-91, which provided a uniform procedure for appeals from quasi- We have held that a general law and a special law on the same subject are statutes in pari materia and should
judicial agencies. The Court also ruled that said circular, together with B.P. 129, as amended by R.A. 7902, be read together and harmonized, if possible, with a view to giving effect to both. In the instant case, we apply
Revised Administrative Circular No. 1-95, and Rule 43 of the Rules, effectively modified E.O. the principle generalia specialibus non derogant. A general law does not nullify a special law. The general law
1008. Consequently, the appeals from arbitral awards of the CIAC were also deemed to cover questions of fact will yield to the special law in the specific and particular subject embraced in the latter. We must read and
or mixed questions of fact and law. construe [B.P.] 129 and [P.D.] 1083 together, then by taking [P.D.] 1083 as an exception to the general law to
reconcile the two laws. This is so since the legislature has not made any express repeal or modification of
This apparent conflict between B.P. 129 and R.A. 9285, with respect to the mode of appeal of the CIAC [P.D.] 1083, and it is well-settled that repeals of statutes by implication are not favored. Implied repeals will
not be declared unless the intent of the legislators is manifest. Laws are assumed to be passed only after careful
awards, presents the Court with the overdue opportunity to crystallize with doctrinal precedent which between
the two laws must prevail. deliberation and with knowledge of all existing ones on the subject, and it follows that the legislature did not
intend to interfere with or abrogate a former law relating to the same subject matter.

On this point and in accordance with the elementary statutory construction principles of precedence of specific
laws over general laws, and later laws over earlier laws, this Court rules that R.A. 9285 prevails over B.P. 129, A more recent application of this basic principle of statutory construction is in the case of Philippine
Amusement and Gaming Corporation (PAGCOR) v. Bureau of Internal Revenue:
as the former enjoys preference over the latter with respect to both temporal precedence as well as that of
greater degree of particularity.
x x x The Legislature consider and make provision for all the circumstances of the particular case. The
Legislature having specially considered all of the facts and circumstances in the particular case in granting a
First, with respect to superiority in time, it is a canon of statutory construction that in case of conflict between
two laws, one a later law and the other an earlier law, the later law prevails as the prevailing law, being the special charter, it will not be considered that the Legislature, by adopting a general law containing provisions
repugnant to the provisions of the charter, and without making any mention of its intention to amend or modify
most current articulation of legislative intent. As applied to the case at bar, B.P. 129 is also an earlier law,
1980 vintage, whereas E.O. 1008 and R.A. 9285 are later laws, E.O. 1008 having been promulgated five years the charter, intended to amend, repeal, or modify the special act. (Lewis [v.] Cook County, 74 Ill. App.,
151; Philippine Railway Co. [v.] Nolting, 34 Phil., 401).
after B.P. 129, and R.A. 9285, which iterated E.O. 1008, being issued in 2004. Therefore, E.O. 1008 and R.A.
9285, as laws that were promulgated subsequent to B.P. 129 and are the later expressions of the legislative will
106 on the matter of CIAC's awards' mode of appeal, must prevail over B.P. 129, thereby carving out CIAC Bringing the case at bar through this second frame of statutory construction, the Court finds that with respect
awards as an exception to the CA's appellate jurisdiction over appeals from quasi-judicial agencies. to the level of generality or specialty, B.P. 129 is a general law of procedure and jurisdiction, and must
therefore yield to the more specific laws of E.O. 1008 and its iteration in R.A. 9285, which distinctively
pertain to the CIAC and other alternative modes of arbitration.
Second, with respect to the level of specificity in its application, the statutory canon that also finds bearing in
this case is the canon of generalia specialibus non derogant, or a general law does not nullify a specific or
special law, which provides that where two statutes are of equal theoretical application to a particular case, the In other words, this reconciliation of laws and rules stands on the uncontroverted premise that when E.O. 1008
one designed therefor should prevail. It is a rule of statutory construction that a special law prevails over a conferred on this Court the jurisdiction over appeals from CIAC awards, said conferment survived the
general law — regardless of their dates of passage — and the special law is to be considered as an exception to subsequent procedural digressions, so that R.A. 9285 and the Special ADR Rules needed no Court
the general law. In the earlier case of Valera v. Tuason, Jr. , the Court explained the rationale of the hierarchy concurrence, for they could no more restore to this Court a jurisdiction that it never validly lost. Stated
of laws, to wit: differently, when R.A. 9285 reiterated the direct recourse of appeals from CIAC awards to this Court, it did
not endow the Court with any new jurisdiction that it did not already have as validly apportioned to it as early
x x x A special law is not regarded as having been amended or repealed by a general law unless the intent to as 1980. There is therefore no need for the Court's concurrence as required under the 1987 Constitution, as
there was, in fact, no increase to concur with.
repeal or alter is manifest. Generalia specialibus non derogant. And this is true although the terms of the
general act are broad enough to include the matter in the special statute. ([Manila Railroad Company v.
Rafferty] , 40 Phil., 224.) At any rate, in the event harmony between provisions of this type in the same law or Pursuant to these two canons of reconciling apparent conflicts in application of laws, it inevitably appears that
in two laws is impossible, the specific provision controls unless the statute, considered in its entirely, indicates with respect to the conferment of jurisdiction to the CA of appellate jurisdiction over CIAC awards, both E.O.
a contrary intention upon the part of the legislature. Granting then that the two laws cannot be reconciled, in so 1008 and R.A. 9285 have sufficiently carved CIAC awards as an exception therefrom.
far as they are inconsistent with each other, [S]ection 73 of the Code of Civil Procedure, being a specific law,
should prevail over, or be considered as an exception to [S]ection 211 of the Administrative Code, which is a Exclusive Rule-Making Power of the Court
provision of general character. A general law is one which embraces a class of subjects or places and does not
omit any subject or place naturally belonging to such class, while a special act is one which relates to
particular persons or things of a class. The third and final circumscription that CIAC's awards' mode of appeal to the Court must consider is the
relation of the power of Congress under Section 2, Article VIII vis-à-vis Section 5(5), Article VIII of the
Constitution, with regard to the rule-making power of the Court. Section 5(5), Article VIII provides:
Section 5. The Supreme Court shall have the following powers: temporary restraining order and/or writ of preliminary injunction to enjoin an
investigation conducted by the Ombudsman, is unconstitutional as it contravenes Rule 58
xxxx of the Rules.

Considering that the aforesaid laws effectively modified the Rules, this Court asserted its discretion to amend,
(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice, and
procedure in all courts, the admission to the practice of law, the Integrated Bar, and legal assistance to the repeal or even establish new rules of procedure, to the exclusion of the legislative and executive branches of
government. To reiterate, the Court's authority to promulgate rules on pleading, practice, and procedure is
underprivileged. Such rules shall provide a simplified and inexpensive procedure for the speedy disposition of
cases, shall be uniform for all courts of the same grade, and shall not diminish, increase, or modify substantive exclusive and one of the safeguards of Our institutional independence.
rights. Rules of procedure of special courts and quasi-judicial bodies shall remain effective unless disapproved
by the Supreme Court. Balanced against the authority of Congress to grant or define the jurisdiction of courts, the rule-making power
of the Court is proscribed against promulgating rules that diminish, increase, or modify substantive rights.
x x x x.
In Fabian, the question was raised as to whether the Court, in holding that the CA is the proper court to review
Presently, Congress does not have the power to repeal, alter, or supplement the rules of the Court concerning the final judgements of quasi-judicial agencies even in light of a law vesting the Court with the power to do so,
would be disregarding a substantive right. The Court ruled in the negative, explaining in this wise:
pleading, practice, and procedure. In Echegaray v. Secretary of Justice116 the evolution of the rule-making
power of the Court was laid down, and its discussion was later iterated in Estipona, Jr. v. Lobrigo where it was
held that: x x x This brings to fore the question of whether Section 27 of [R.A.] 6770 is substantive or procedural.

While the power to define, prescribe, and apportion the jurisdiction of the various courts is, by constitutional It will be noted that no definitive line can be drawn between those rules or statutes which are procedural, hence
design, vested unto Congress, the power to promulgate rules concerning the protection and enforcement of within the scope of this Court's rule-making power, and those which are substantive. In fact, a particular rule
constitutional rights, pleading, practice, and procedure in all courts belongs exclusively to this Court under may be procedural in one context and substantive in another. It is admitted that what is procedural and what is
Section 5(5), Article VIII of the Constitution x x x. substantive is frequently a question of great difficulty. It is not, however, an insurmountable problem if a
rational and pragmatic approach is taken within the context of our own procedural and jurisdictional system.
xxxx
In determining whether a rule prescribed by the Supreme Court, for the practice and procedure of the lower
courts, abridges, enlarges, or modifies any substantive right, the test is whether the rule really regulates
The separation of powers among the three co[-]equal branches of our government has erected an impregnable
wall that keeps the power to promulgate rules of pleading, practice and procedure within the sole province of procedure, that is, the judicial process for enforcing rights and duties recognized by substantive law and for
justly administering remedy and redress for a disregard or infraction of them. If the rule takes away a vested
this Court. The other branches trespass upon this prerogative if they enact laws or issue orders that effectively
repeal, alter or modify any of the procedural rules promulgated by the Court. Viewed from this perspective, right, it is not procedural. If the rule creates a right such as the right to appeal, it may be classified as a
substantive matter; but if it operates as a means of implementing an existing right then the rule deals merely
We have rejected previous attempts on the part of the Congress, in the exercise of its legislative power, to
amend the Rules of Court [x x x], to wit: with procedure.

In the situation under consideration, a transfer by the Supreme Court, in the exercise of its rule-making power,
1. Fabian v. Desierto — Appeal from the decision of the Office of the Ombudsman in an
administrative disciplinary case should be taken to the Court of Appeals under the of pending cases involving a review of decisions of the Office of the Ombudsman in administrative
disciplinary actions to the Court of Appeals which shall now be vested with exclusive appellate jurisdiction
provisions of Rule 43 of the Rules instead of appeal by certiorari under Rule 45 as
provided in Section 27 of R.A. No. 6770. thereover, relates to procedure only. This is so because it is not the right to appeal of an aggrieved party which
is affected by the law. That right has been preserved. Only the procedure by which the appeal is to be made or
decided has been changed. The rationale for this is that no litigant has a vested right in a particular remedy,
2. Cathay Metal Corporation v. Laguna West Multi-Purpose Cooperative, Inc. — The which may be changed by substitution without impairing vested rights, hence he can have none in rules of
Cooperative Code provisions on notices cannot replace the rules on summons under Rule procedure which relate to the remedy.
14 of the Rules.
Furthermore, it cannot be said that the transfer of appellate jurisdiction to the Court of Appeals in this case is
3. RE: Petition for Recognition of the Exemption of the GSIS from Payment of Legal an act of creating a new right of appeal because such power of the Supreme Court to transfer appeals to
Fees; Baguio Market Vendors Multi-Purpose Cooperative (BAMARVEMPCO) v. Hon. subordinate appellate courts is purely a procedural and not a substantive power. Neither can we consider such
Judge Cabato-Cortes; In Re: Exemption of the National Power Corporation from transfer as impairing a vested right because the parties have still a remedy and still a competent tribunal to
Payment of Filing/Docket Fee; and Rep. of the Phils. v. Hon. Mangotara, et al. — Despite administer that remedy.
statutory provisions, the GSIS, BAMARVEMPCO, and NPC are not exempt from the
payment of legal fees imposed by Rule 141 of the Rules.
In Fabian, the Court went on to elucidate that the transfer by this Court, in the exercise of its rule-making
power, of pending cases involving a review of decisions of the Ombudsman (OMB) in administrative
4. Carpio-Morales v. Court of Appeals (Sixth Division) — The first paragraph of Section disciplinary actions to the CA which shall now be vested with exclusive appellate jurisdiction over these,
14 of R.A. No. 6770, which prohibits courts except the Supreme Court from issuing relates to procedure only. This is so because it is not the right to appeal of an aggrieved party which is affected
by the law, as that right has been preserved, with only the procedure by which the appeal is to be made or In all, the nexus between the judiciary and the arbitral tribunal is nothing short of paradoxical, in that on the
decided changed. one hand, the courts often ensure the integrity of the arbitration, but on the other, the apprehensions regarding
court involvement have precisely led parties to opt for arbitration, in the first instance. As the case at bar
exhibits, perhaps the point has always been not complete severance between the two, but only a guarantee that
A sharp distinction on the matter of the effect of the rule pulls the case of CIAC awards far from that
of Fabian, as in the latter, the Court's act of transferring appellate jurisdiction over the OMB decisions to the judicial involvement is limited to a minimum to promote the rationale of arbitration, so that it is not so much
judicial control, as it is judicial encouragement through restraint.
CA did not undermine or significantly alter the party's right to appeal.

In clear contrast, the Court's act of including CIAC awards among those situations the appeal from which must All told and reconciled, the Court sitting en banc takes this overdue opportunity to straighten out the route that
an appeal from a CIAC arbitral award may take, and inevitably carve its remedial recourse out of procedural
be brought before the CA via Rule 43, instead of on a direct recourse to it as specified under E.O. 1008, did
not provide a mere procedure of appeal of CIAC awards, but correspondingly diminished the substantive rights tiers that are wholly inconsistent with the very animus of this arbitral tribunal.
of parties who, pre-conflict, had elected arbitration as their speedier recourse in case of dispute.
A harmonization of these conflicting rules leaves the Court with the conclusion that the inclusion of the CIAC
The compelling weight of the preservation of the speed, autonomy and finality of CIAC awards is best under Rule 43 appeals is without footing in the legal history of the CIAC, and therefore must be unequivocally
reversed.
validated by the kind of tailor-made fit with which the design of arbitration serves the unique demands of the
construction industry. Parties in construction disputes have also been known to predictably choose arbitration
over litigation due to the limitation of the right to appeal thereto, particularly in that laws of many jurisdictions More specifically, the Court holds that the direct recourse of an appeal of a CIAC award on questions of law
permit appeals of arbitral awards only on limited grounds. directly to this Court is the rule, pursuant to E.O. 1008 and R.A. 9285, notwithstanding Rule 43 on the CA's
jurisdiction over quasi-judicial agencies, and Rule 45 in its exclusive application to lower courts. Thus, an
appeal from an arbitral award of the CIAC may take either of two tracks, as determined by the subject matter
Demonstrably, construction is a specialized industry with projects that are prone to disputes owing to multiple
parties, performance standards, as well as financing and profit considerations. The construction businesses' of the challenge.
resort to alternative modes of resolution that seek to settle controversies as opposed to pursuit of lawsuits was
even called a paradigm shift, which resulted from the wave of increasing need for dispute resolutions, and the On the one hand, if the parties seek to challenge a finding of law of the tribunal, then the same may be
inversely proportional decrease of incentives for litigation. Parties in construction disputes were afforded, by appealed only to this Court under Rule 45. To determine whether a question is one of law which may be
legislation, with the alternative route to an expedited and authoritative resolution of their disputes. The brought before the Court under Rule 45, it is useful to recall that a question of law involves a doubt or
availability of this conclusive alternative mode, which had been hailed as the preferred method of resolving controversy as to what the law is on a certain state of facts, as opposed to a question of fact which involves a
high-value disputes, is vital to the growth of the construction industry, and diluting the same undoubtedly doubt or difference that arises as to the truth or falsehood of facts, or when the query necessarily calls for a
amounts to the diminishing of the parties' substantive right. review and reevaluation of the whole evidence, including the credibility of witnesses, existence of specific
surrounding circumstances, and the decided probabilities of the situation.125 The test here is not the party's
Once more, the substantive right is contained in the parties' preference to avail of speed, flexibility, cost characterization of the question before the Court, but whether the Court may resolve the issue brought to it by
solely inquiring as to whether the law was properly applied and without going into a review of the evidence.
efficiency and industry knowledge to obtain the most autonomous arbitration result possible.

Autonomous arbitration is one which is initiated, conducted and concluded without any need or desire for On the other hand, if the parties seek to challenge the CIAC's finding of fact, the same may only be allowed
under either of two premises, namely assailing the very integrity of the composition of the tribunal, or alleging
judicial intervention, with the United States Supreme Court even affirming early on that the unmistakable
purpose of Congress in affording parties with the arbitration procedure was so that the resolution of the dispute the arbitral tribunal's violation of the Constitution or positive law, in which cases the appeal may be filed
before the CA on these limited grounds through the special civil action of a petition for certiorari under Rule
between parties who opt for arbitration be "speedy and not subject to delay and obstruction of the courts". The
paradigm of autonomy likewise gives the parties the confidence to invite specialists to resolve complex issues 65, in accordance with Section 4 in relation to Section 1, Rule 65 of the Rules:
which are beyond the proficiency of court judges.
SECTION 1. Petition for certiorari. — When any tribunal, board or officer exercising judicial or quasi-judicial
This substantive right to access this arbitration autonomy is unambiguously subverted by the Court's functions has acted without or in excess its or his jurisdiction, or with grave abuse of discretion amounting to
lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary
overreaching exercise of its rule-making power, in its act of delegating to the CA what the legislative wisdom
otherwise categorically conferred directly and exclusively upon this Court. The defeat of this right is evident in course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts
with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal,
the frustration of the reasons that prompted the parties to choose arbitration over litigation in the first place.
More particularly, the inclusion of the CIAC under Rule 43 weakened if not altogether destroyed the board or officer, and granting such incidental reliefs as law and justice may require.
authoritative autonomy of the CIAC, as well as eroded if not totally obliterated its very nature as the expedited,
economical, independent alternative dispute resolution to the otherwise protracted and costly court litigation. The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof,
copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum
shopping as provided in the third paragraph of section 3, Rule 46. (1a)
To be sure, the inclusion of the CIAC under Rule 43 is a clear impairment of the central substantive right
which animates the overall design of the CIAC, and is therefore invalid for overstepping the positive limitation
of the rule-making power of this Court under Section 5(5), Article VIII of the Constitution on non- SEC. 4. When and where petition filed. — The petition shall be filed not later than sixty (60) days from notice
modification of substantive rights. Thus, nothing prevents this Court from correcting this over-inclusion, as it of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether
now does in the case at bar.
such motion is required or not, the sixty (60) day period shall be counted from notice of the denial of said If a legal remedy exists for the review of factual findings of the arbitral tribunal in the context of assailing the
motion. integrity of its composition, the question that should be asked is, should the subject matter of the appeal pertain
to the alleged errors in the factual findings of the arbitral tribunal, or should the appeal center on the lack of
integrity of the composition of the arbitral tribunal? Definitely, if there is no question on the integrity of the
The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a lower court or of a
corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the territorial area composition of the arbital tribunal, its award may not be subject to appeal on factual considerations.
Consequently, the remedy contemplated is tribunal-centered and not fact-centered. This issue is important
as defined by the Supreme Court. It may also be filed in the Court of Appeals whether or not the same is in aid
of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves the because it will determine whether the CA has jurisdiction over the subject matter of the appeal in the first
place.
acts or omissions of a quasi-judicial agency, unless otherwise provided by law or these Rules, the petition shall
be filed in and cognizable only by the Court of Appeals.
Proceeding from this framing of factual issues which fall within the narrow window of the Court's factual
review of CIAC awards, the Court holds that these challenges to the CIAC tribunal's integrity or allegations of
In election cases involving an act or omission of a municipal or a regional trial court, the petition shall be filed
exclusively with the Commission on Elections in aid of its appellate jurisdiction. (As amended by A.M. No. constitutional or statutory violations on the part of the arbitral tribunal, as further enumerated under Section
24 of R.A. 876, partake of the nature of imputations of grave abuse which more accurately belong within the
07-7-12-SC, December 12, 2007.)
purview of a special civil action of a petition for certiorari under Rule 65. Stated differently, the Court
recognizes, as earlier distilled in jurisprudence, that although the challenges to the integrity of the CIAC
As observed by Chief Justice Alexander Gesmundo (Chief Justice Gesmundo) during the deliberations, it arbitral tribunal are first enumerated in Section 24 of R.A. 876, the same grounds are also descriptive of the
would be entirely unsupported for appeal under Rule 43 to remain available for CIAC awards after a clear narrow set of situations that may warrant the Court's review of the same, as an exception to the more general
demonstration to the contrary. rule that factual findings of the CIAC arbitral tribunal are beyond review. Once more, as correctly noted by
Chief Justice Gesmundo, this appears to be the Court's understanding in its discussion of the said grounds in
Furthermore, Justice Leonen, in his Concurring Opinion, sharply summarizes the utter lack of basis in this the case of Hi Precision Steel Center, Inc. v. Lim Kim Steel Builders, Inc. (Hi-Precision), when it reiterated
erroneous inclusion of the CIAC under Rule 43 appeals, which he calls out to be an "unfortunate mistake": that it will not relitigate issues of fact previously resolved by an arbitral tribunal, save for the instance of a
clear showing of grave abuse of discretion, citing as examples thereof those very instances referred to under
Section 24 of R.A. 876, viz.:
Since the Construction Industry Arbitration Law's adoption in 1985, procedural law and related jurisprudence
have made it appear that appeals may also be taken to the Court of Appeals. There, the factual findings of
CIAC arbitral tribunals may supposedly be assailed. This has been an unfortunate mistake. The Court of Aware of the objective of voluntary arbitration in the labor field, in the construction industry, and in any other
Appeal's supposed appellate jurisdiction to freely review factual issues finds no basis in substantive law. area for that matter, the Court will not assist one or the other or even both parties in any effort to subvert or
defeat that objective for their private purposes. The Court will not review the factual findings of an arbitral
tribunal upon the artful allegation that such body had "misapprehended the facts" and will not pass upon issues
xxxx which are, at bottom, issues of fact, no matter how cleverly disguised they might be as "legal questions." The
parties here had recourse to arbitration and chose the arbitrators themselves; they must have had confidence in
It is opportune to repudiate the mistaken notion that appeals on questions of fact of CIAC awards may be such arbitrators. The Court will not, therefore, permit the parties to relitigate before it the issues of facts
coursed through the Court of Appeals. No statute actually vests jurisdiction on the Court of Appeals to previously presented and argued before the Arbitral Tribunal, save only where a very clear showing is made
entertain petitions for review emanating from the CIAC. Metro Construction's reference to a "procedural that, in reaching its factual conclusions, the Arbitral Tribunal committed an error so egregious and hurtful to
mutation" effected by Circular No. 1-91, 1095 and Rule 43 of the 1997 Rules of Civil Procedure do not one party as to constitute a grave abuse of discretion resulting in lack or loss of jurisdiction. Prototypical
broaden the jurisdiction of the Court of Appeals. Neither do the amendments introduced to Batas Pambansa examples would be factual conclusions of the Tribunal which resulted in deprivation of one or the other party
Blg. 129 by Republic Act No. 7902 effect a broadening of the Court of Appeals' appellate jurisdiction thereby of a fair opportunity to present its position before the Arbitral Tribunal, and an award obtained through fraud
extending it to a factual review of CIAC arbitral awards. or the corruption of arbitrators. Any other, more relaxed, rule would result in setting at naught the basic
objective of a voluntary arbitration and would reduce arbitration to a largely inutile institution.
The resort to Rule 65, instead of Rule 43, further finds support in the very nature of the factual circumstances
which trigger said exceptional factual review—those that center not on the actual findings of fact but on the Collectively, these factual scenarios, when alleged, essentially challenge the integrity of the arbitral tribunal or
integrity of the tribunal that makes these findings, or their compliance with the Constitution or positive the constitutionality or legality of the conduct of the arbitral process, and therefore warrant an entertainment of
law, i.e., any of the following factual allegations: (1) the award was procured by corruption, fraud or other doubt with respect to the factual findings of said tribunal. These factual allegations, which replicate the
undue means; (2) there was evident partiality or corruption of the arbitrators or of any of them; (3) the grounds for vacating an arbitral award as provided in Section 24 of R.A. 876, have been found by the Court to
arbitrators were guilty of misconduct in refusing to hear evidence pertinent and material to the controversy; (4) be the same factual allegations that will trigger an exceptional factual review of CIAC arbitral awards, as this
one or more of the arbitrators were disqualified to act as such under Section 9 of R.A. 876, and willfully Court has laid down in Spouses David v. Construction Industry and Arbitration Commission,132 CE
refrained from disclosing such disqualifications or of any other misbehavior by which the rights of any party Construction Corp. v. Araneta Center, Inc., and Tondo Medical Center v. Rante. The Court, in these cases, saw
have been materially prejudiced; or (5) the arbitrators exceeded their powers, or so imperfectly executed them, it fit to exemplify the breadth of what may constitute grave abuse of discretion with the enumeration of
that a mutual, final and definite award upon the subject matter submitted to them was not made. scenarios carried over from Section 24 of R.A. 876, in order to fine-tune the operative examples of grave abuse
in the context of the CIAC arbitral tribunals. This is further consistent with the caution of the Court in Hi-
Precision when it warned that "x x x [a]ny other, more relaxed, rule would result in setting at naught the basic
These are the scenarios that Chief Justice Gesmundo, keenly referred to as "tribunal-centered" and not "fact- objective of a voluntary arbitration x x x."  The Court's consistent pronouncement in the above cases only
centered" which must necessarily reframe whether the CA may or may not review the decisions of the CIAC, reinforce its attitude towards CIAC arbitral awards, i.e., that factual findings of the CIAC arbitral tribunal are
to wit: final unless the integrity of said tribunal or the constitutionality or legality of its actions are put in question.
Told differently, the limited instances which parties may cite as impetus for a judicial factual review of a Judicial power includes the duty of the courts of justice to settle actual controversies involving rights
CIAC award pertain to integrity-centered or Constitution or law-anchored flaws which, in turn, translate to which are legally demandable and enforceable, and to determine whether or not there has been a grave
grave abuses of discretion that are within the ambit of a petition for certiorari under Rule 65. The abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
correspondence is made clear given the very nature of a Rule 65 petition, and the metes and bounds of the instrumentality of the Government. (Emphasis supplied)
issues it is designed to resolve. Demonstrably, in the case of Tagle v. Equitable PCI Bank, the Court spoke
plainly:
However, far from being static, the very contours of what constitutes grave abuse of discretion have always
been traced by the Court in a judicious but fragmentary manner, as called for by each case in jurisprudence.
A special civil action for Certiorari, or simply a Petition for Certiorari, under Rule 65 of the Revised Rules of Distinctively, therefore, although the remedy of petition for certiorari, as the procedural vehicle, is
Court is intended for the correction of errors of jurisdiction only or grave abuse of discretion amounting to lack purposefully rigid and unyielding in order to avoid overextension of the same over situations that do not raise
or excess of jurisdiction. Its principal office is only to keep the inferior court within the parameters of its an error of jurisdiction, the concept of grave abuse of discretion which must be alleged to avail of
jurisdiction or to prevent it from committing such a grave abuse of discretion amounting to lack or excess of the certiorari remedy is, in the same degree, deliberately flexible, in order to enable it to capture a whole
jurisdiction. spectrum of permutations of grave abuse. If the case were otherwise, i.e., if the concept of grave abuse were
rigid, and the certiorari remedy loose, the same would be exposed to the possibility of having a clear act of
A writ of certiorari may be issued only for the correction of errors of jurisdiction or grave abuse of discretion whim and caprice placed beyond the ambit of the court's certiorari power because of a definitional
discomfiture in the legal procedure.
amounting to lack or excess of jurisdiction. Such cannot be used for any other purpose, as its function is
limited to keeping the inferior court within the bounds of its jurisdiction.
On point is the case of Oposa v. Factoran, Jr., where the Court, citing Justice Isagani A. Cruz, described the
dynamic property of the concept of grave abuse in the context of the expanded judicial review power, and
For a petition for certiorari to prosper, the essential requisites that have to concur are: (1) the writ is directed
against a tribunal, a board or any officer exercising judicial or quasi-judicial functions; (2) such tribunal board succinctly described it thus:
or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or
excess of jurisdiction; and (3) there is no appeal or any plain, speedy and adequate remedy in the ordinary As worded, the new provision vests in the judiciary, and particularly the Supreme Court, the power to rule
course of law. upon even the wisdom of the decisions of the executive and the legislature and to declare their acts invalid for
lack or excess of jurisdiction because tainted with grave abuse of discretion. The catch, of course, is the
The phrase "without jurisdiction" means that the court acted with absolute lack of authority or want of legal meaning of 'grave abuse of discretion,' which is a very elastic phrase that can expand or
contract according to the disposition of the judiciary.
power, right or authority to hear and determine a cause or causes, considered either in general or with
reference to a particular matter. It means lack of power to exercise authority. "Excess of jurisdiction" occurs
when the court transcends its power or acts without any statutory authority; or results when an act, though The elasticity of the Court's use of its power of judicial review under the 'grave abuse of discretion' standard
within the general power of a tribunal, board or officer (to do) is not authorized, and invalid with respect to the has also been suggested as that which significantly depends on a variety of considerations, even including the
particular proceeding, because the conditions which alone authorize the exercise of the general power in "rationality, predispositions, and value judgments" of the Court's members. This conceptual malleability of
respect of it are wanting. While that of "grave abuse of discretion" implies such capricious and whimsical 'grave abuse of discretion' allows it to stretch as it needs to cover vast permutations of grave abuse, but also
exercise of judgment as to be equivalent to lack or excess of jurisdiction; simply put, power is exercised in an contracts, as the Court here deems it fit, so as not to negate categorical legislative intent as provided for by
arbitrary or despotic manner by reason of passion, prejudice, or personal hostility; and such exercise is so E.O. 1008.
patent or so gross as to amount to an evasion of a positive duty or to a virtual refusal either to perform the duty
enjoined or to act at all in contemplation of law.
In point of fact, grave abuse as a ground for judicial review covers a multitude of scenarios, with each
operative definition colored with caprice or whim, but fleshed out in a variety of commissions, and embraces
Further, the resort to a petition for certiorari under Rule 65 is confined to assailing the integrity of the arbitral not only those which betray a possible challenge on the integrity of an arbitral tribunal.
tribunal based on any of the aforementioned factual scenarios (e.g., corruption, fraud, evident partiality of the
tribunal), or the constitutionality or legality of the conduct of the arbitration process, and may not remain Early jurisprudence has laid down a broad construction of what constitutes grave abuse of discretion. In the
unqualified as to embrace other badges of grave abuse. The design and intent of the relevant laws on judicial
1939 case of Santos v. Province of Tarlac, the concept of abuse of discretion was construed as that which
review of CIAC arbitral awards do not empower the CA to look into the factual findings of the CIAC apart contemplates such a capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction.
from the foregoing circumscribed grounds, lest the authoritative and conclusive factual findings of the CIAC
This was later echoed in the 1941 case of Alafriz v. Nable, where the Court defined grave abuse as that where
be nevertheless defeated, albeit via a petition other than Rule 43. the court has acted "x x x with absolute want of jurisdiction x x x" or where the court has transcended its
jurisdiction or "x x x acted without any statutory authority x x x".
This operative limiting of the grounds under Rule 65 with respect to judicial review of CIAC arbitral awards
remains consistent with the Court's constitutionally granted authority, owing chiefly to the conceptually In the 1960 case of Hamoy v. Hon. Sec. of Agriculture and Natural Resources, et al.,the Court added that the
dynamic nature of grave abuse of discretion. To be sure, the Constitution provided the Court's power to take
abuse of discretion must be shown to be attended by "x x x passion, prejudice, or personal hostility amounting
cognizance of petitions alleging grave abuse of discretion, with the second paragraph of Section 1, Article VIII to an evasion of positive duty x x x." Still, in 1966, in the case of Palma and Ignacio v. Q. & S. Inc., et al., the
of the Constitution particularly stating:
Court further qualified abuse of discretion and added that an error of judgment is not abuse of discretion, as the
same must be colored with despotism or whim, viz.:
Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be
established by law.
x x x [A]n abuse of discretion is not sufficient by itself to justify the issuance of a writ of [certiorari]. x x x which show a grave abuse of discretion in relation to CIAC arbitral awards. There is nothing precarious in the
[T]he abuse must be grave and patent, and it must be shown that the discretion was exercised arbitrarily or Court's acknowledgment that the concept of grave abuse is elastic enough to lend itself to the Court's
despotically x x x.1 calibration depending on the context within which it is to be appreciated.

In 1979, in Dimayacyac v. Court of Appeals, the trial court therein was found to have committed grave abuse Contrary to the caution offered that the concept of grave abuse of discretion is tantamount to judicial
of discretion for declaring a party before in default and rendering judgment against them hurriedly, for mere legislation, the Court here discerns that its appropriation of the prototypical grounds as provided under Section
failure of the party in default to file a pre-trial brief. In the case of Producers Bank of the Phils. v. 24 of R.A. 876 into the judicial review of CIAC arbitral awards, as well as its appreciation of the nuanced
NLRC, grave abuse of discretion was construed as such capricious and whimsical exercise of judgment that is expressions of grave abuse of discretion in this specific context squarely fall within the rule-making power of
equivalent to lack of jurisdiction and involves power that is exercised in an arbitrary or despotic manner by the Court. The authority is rooted in Section 5(5), Article VIII of the Constitution, and the impetus therefor
reason of passion or personal hostility. Grave abuse of discretion must be so patent and gross as to amount to described as thus:
an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all m contemplation
of law. x x x This deliberate expansion of both judicial review and rule-making powers of the Philippine Supreme
Court typifies the active re-direction of the Court's role, away from the passivity under the standard political
To note, in the 1999 case of Nepomuceno v. Court of Appeals, the Court ruled that "grave abuse of discretion question doctrine that had predominated earlier constitutional eras under the 1973 and 1935 Constitutions.
is indeed a relative term" and admits of exceptions in the interest of substantial justice.
xxxx
Recent jurisprudential iterations have further maintained this construction of grave abuse of discretion. In the
case of Dueñas, Jr. v. House of Representatives Electoral Tribunal, grave abuse of discretion was defined as When the 1986 EDSA "People Power" Revolution successfully ousted Marcos, one of the first acts of the new
the capricious and whimsical exercise of judgment, or the exercise of power in an arbitrary manner, where the
government under Corazon Aquino (and facilitated by now Constitutional Commissioner Roberto Concepcion)
abuse is so patent and gross as to amount to an evasion of positive duty. In Cruz v. People, manifest disregard was to strengthen the independence and judicial review powers of the Philippine Supreme Court. Under the
of basic rules and procedures constituted grave abuse of discretion. In Comilang v. Belen, a showing of
1987 Constitution, the Philippine Supreme Court was intentionally entrusted with broader judicial review and
manifest bias and partiality likewise amounted to grave abuse. Neri v. Yu,also defined grave abuse as that rule-making powers. The framers of the 1987 Constitution envisioned that the Court as the institution most
which includes not only palpable errors of jurisdiction or violations of the Constitution, the law, and
critical to safeguarding democracy in the Philippines' post-dictatorship constitutional order. Wary of the
jurisprudence, but also includes gross misapprehension of facts. Court's reputational decline in Javellana, the Philippine Supreme Court under the 1987 Constitutional
reiterated fidelity to the Constitution as the foremost mandate of judicial conduct: "Justices and judges must
Indicatively, going by the jurisprudential construction of grave abuse of discretion as contemplated by Rule ever realize that they have no constituency, serve no majority nor minority but serve only the public interest as
65, the same decidedly casts a wider net than that which is consistent with the narrower confines of factual they see it in accordance with their oath of office, guided only by the Constitution and their own conscience
review of CIAC arbitral awards, and covers numerous other scenarios apart from that which may amount to a and honour."
challenge of the integrity of a tribunal. The above cases demonstrate badges of grave abuse that could not have
been contemplated as far as factual review of CIAC awards is concerned. To leave this Rule 65 resort
Markedly, as the Court has held in Echegaray v. Secretary of Justice and Estipona, Jr. v. Lobr the independent
unqualified is, therefore, to leave it overinclusive, at the expense of the weight and conclusiveness of findings rule-making power of the Court is a reaction to the prevenient disposition of the Court that consigns it to
of fact of the CIAC. Stated differently, precisely because challenging the integrity, constitutionality or legality
sidestep matters of inequity or injustice in the court proceedings because of its lack of power to procedurally
of the tribunal or its actions in the arbitral process are only some of the many permutations of grave abuse address them. The Court therefore holds that this is not a dangerous precedent but a mere exercise of extant
within the construction of Rule 65, the delimitation is crucial for purposes of factual review of CIAC arbitral
rule-making and certiorari powers of the Court. This authority also since pivoted the Court away from the
awards, if a resort to a petition for certiorari under Rule 65 is to be made consistent with E.O. 1008. previous institutional attitude of avoidance.

By extension, if the petition for certiorari under Rule 65 route for review of CIAC arbitral awards remains as
More, the exercise of contracting grave abuse of discretion in order to correct what has been shown to be a
indiscriminate as the scope of Rule 65 as it is more generally applied, it would entertain grounds for factual procedural confoundment in the instant case is not new either in the Court's jurisprudential history or its
review that E.O. 1008 and other relevant rules intended to keep out.
immediate horizon. Perhaps, there will be future inadequacies in procedure that the Court will be moved to
remedy, and that the same will require its reconciliation or harmonization with substantive laws. The
The Court herein emphasizes that the qualification and contraction of the concept of grave abuse of discretion reinforced rule-making power of the Court straightforwardly allows it to undertake the same, as it now does.
under Rule 65 with respect to a CIAC arbitral award calibrates, instead of confuses, the grounds for a Rule 65
petition. It is a contraction that is imperative if remedial law is to promote, and not frustrate, the unique As is apparent in the two grounds that trigger the exceptional factual review of CIAC arbitral awards, i.e.,
configuration of the CIAC, and enable it to unfold as designed within the structure of the present remedial
those that pertain to either the lack of integrity or the imputed unconstitutionality or illegality of the arbitrators
rules. It does not proceed from the presumption that said contraction is being made in order to address what or the arbitral process, the contracted grounds are tight enough, but nevertheless embrace and preserve the
may experientially be seen as a loose treatment of the certiorari action in practice. On the contrary, the
courts' power to re-examine factual findings of a CIAC arbitral tribunal, precisely when the latter's lack of
contraction is being made not because the certiorari power is being indiscriminately employed, but because in integrity, or its unconstitutional or illegal actions taint the same. Most assuredly, the power of the courts to
itself, even with its rigid application, said certiorari power is still not narrow enough given the framework that
uphold the Constitution and preserve observance of positive law are woven into the very fabric of the judicial
the persuasive authority of CIAC awards must be ascribed primacy. system, and remain undiminished in the Court's present interpretation of the available remedial routes from
CIAC arbitral awards.
The Court also holds with particular import that there is nothing procedurally problematic or constitutionally
abhorrent in distilling the prototypical grounds under Section 24 of R.A. 876 as reflective of the very grounds
Therefore, in the instant case and for purposes of judicial review of the CIAC arbitral awards, this Court now To note, although Section 24 of R.A. 876 has not been transplanted verbatim into the CIAC Rules, the logic
divines Rule 65, being confined to challenges only to the arbitral tribunal's integrity or allegations of its behind its adaption into the judicial review of the arbitral awards remains unrefuted. It likewise remains to be
actions' unconstitutionality or illegality, to be a warranted contraction of the breadth of the concept of 'grave negated the fact that the Court has already jurisprudentially appropriated Section 24 of R.A. 876 as the very
abuse of discretion', in order to harmonize a Rule 65 resort with the unequivocal intent of E.O. 1008, and other same situations that may justify the Court's examination of CIAC arbitral award's findings of fact.
relevant laws, including R.A. 876 and R.A. 9285, which apply supplementarily. To be sure, although E.O.
1008 applies specifically to the CIAC as a specialized arbitral institution for the construction industry, nothing
Furthermore, and assuredly, the resort to the courts was legislatively designed to succeed other remedies that
precludes the Court from applying the umbrella legislation of R.A. 876 and its significant amendment, R.A. disputants before the CIAC may avail themselves of in case of errors in an arbitral tribunal's award that merit
9285.
its modification. The current CIAC Rules provide a remedy that allows the parties to winnow through their
arbitral award and effect the correction of gross errors such as mathematical miscalculations and the like. The
Undoubtedly, R.A. 876, R.A. 9285 and E.O. 1008, while distinct, are conceptually and operatively related in more general R.A. 876, particularly, Section 25 thereof provides:
the sphere of arbitration law. For one, R.A. 9285 expressly references E.O. 1008 as the rules of procedure that
apply to construction disputes. The whole of its Chapter 6 pertains to arbitration of construction disputes Section 25. Grounds for modifying or correcting award. - In any one of the following cases, the court must
where, substantively: (1) Section 17(d)161 thereof provides its application to mediated construction disputes,
make an order modifying or correcting the award, upon the application of any party to the controversy which
(2) Sections 28162 and 29 163 thereof outline the availability of interim measures of protection in construction was arbitrated:
arbitration, (3) Section 35164 thereof enumerates the kinds of disputes that fall within the purview of the
CIAC's jurisdiction, and (4) Section 39165 thereof relatedly authorizes the regional trial courts to dismiss a
construction dispute before it, if the same involves an arbitration clause that was not previously resorted to. (a) Where there was an evident miscalculation of figures, or an evident mistake in the
description of any person, thing or property referred to in the award; or
(b) Where the arbitrators have awarded upon a matter not submitted to them, not affecting
As well, the Special ADR Rules further categorically refer to R.A. 876 when it laid down the grounds for the merits of the decision upon the matter submitted; or
which, as a general rule, the court may vacate or set aside the decision of an arbitral tribunal. Specifically,
(c) Where the award is imperfect in a matter of form not affecting the merits of the
Rule 19.10 of the same provides: controversy, and if it had been a commissioner's report, the defect could have been
amended or disregarded by the court.
RULE 19.10. Rule on judicial review on arbitration in the Philippines. - As a general rule, the court can only
vacate or set aside the decision of an arbitral tribunal upon a clear showing that the award suffers from any of The order may modify and correct the award so as to effect the intent thereof and promote justice between the
the infirmities or grounds for vacating an arbitral award under Section 24 of Republic Act No. 876 or under
parties. (Emphasis and underscoring supplied)
Rule 34 of the Model Law in a domestic arbitration, or for setting aside an award in an international arbitration
under Article 34 of the Model Law, or for such other grounds provided under these Special Rules.
This enumeration of grounds for correction of errors in arbitral awards was adopted and echoed in the CIAC
Rules,168 specifically Section 17 thereof:
If the Regional Trial Court is asked to set aside an arbitral award in a domestic or international arbitration on
any ground other than those provided in the Special ADR Rules, the court shall entertain such ground for the
setting aside or non-recognition of the arbitral award only if the same amounts to a violation of public policy. SECTION 17.1 Motion for correction of final award - Any of the parties may file a motion for correction of
the Final award within fifteen (15) days from receipt thereof upon any of the following grounds:
The court shall not set aside or vacate the award of the arbitral tribunal merely on the ground that the arbitral
tribunal committed errors of fact, or of law, or of fact and law, as the court cannot substitute its judgment for a. an evident miscalculation of figures, a typographical or arithmetical error;
that of the arbitral tribunal. (Emphasis supplied) b. an evident mistake in the description of any party, person, date, amount, thing or property referred to in the
award.
c. where the arbitrators have awarded upon a matter not submitted to them, not affecting the merits of the
Still, illustratively, in the case of LM Power Engineering Corporation v. Capitol Industrial Construction decision upon the matter submitted;
Groups Inc.,166 the Court found no impediment in applying R.A. 876 in a suppletory nature to an otherwise
d. where the arbitrators have failed or omitted to resolve certain issue/s formulated by the parties in the Terms
purely CIAC-governed dispute, in order to stay the court proceedings where the dispute was found to be of Reference (TOR) and submitted to them for resolution; and
arbitrable before the CIAC:
e. where the award is imperfect in a matter of form not affecting the merits of the controversy.

The arbitral clause in the Agreement is a commitment on the part of the parties to submit to arbitration the The motion shall be acted upon by the Arbitral Tribunal or the surviving/remaining members.
disputes covered therein. Because that clause is binding, they are expected to abide by it in good faith. And
because it covers the dispute between the parties in the present case, either of them may compel the other to
arbitrate. 17.1.1 The filing of the motion for correction shall interrupt the running of the period for appeal.

Since petitioner has already filed a Complaint with the RTC without prior recourse to arbitration, the proper 17.1.2 A motion for correction upon grounds other than those mentioned in this section shall not interrupt the
procedure to enable the CIAC to decide on the dispute is to request the stay or suspension of such action, as running of the period for appeal. (Emphasis and underscoring supplied)
provided under [R.A.] 876 [the Arbitration Law].167
Crucially, however, the above grounds that merit a modification or correction of an arbitral award, whether in
the earlier provisions under R.A. 876 or in the recent iterations under the CIAC Rules, importantly: (1) do not
pertain to any allegation of fraud, corruption, or grave abuse; and (2) pertain only to honest mistakes, x x x [P]ursuant to Article 8 of the Civil Code "judicial decisions applying or interpreting the laws or the
miscalculations of figures, and do not affect the arbitral tribunal's findings with respect to the very merit of the Constitution shall form a part of the legal system of the Philippines." But while our decisions form part of the
dispute. law of the land, they are also subject to Article 4 of the Civil Code which provides that "laws shall have no
retroactive effect unless the contrary is provided." This is expressed in the familiar legal maxim lex prospicit,
Evidently therefore, the intent of the relevant laws with respect to the treatment of arbitral awards is two- non respicit, the law looks forward not backward. The rationale against retroactivity is easy to perceive. The
retroactive application of a law usually divests rights that have already become vested or impairs the
tiered: first, that they are final as far as their appreciation of the facts that go into the merit of the dispute is
concerned; and second, in case of obvious errors of facts (e.g., miscalculations), they are modifiable or obligations of contract and hence, is unconstitutional.
correctible only insofar as they do not affect the merits of the controversy. Such is the restrained attitude that
courts were intended to maintain with respect to arbitral awards. Such purposively narrow windows for The Court hereby sets the following guidelines with respect to the application of the present ruling on modes
changing the arbitral tribunal's award are most in consonance with the confined posture towards appeals as of judicial review vis-à-vis CIAC arbitral awards:
unambiguously provided for by E.O. 1008, and as fleshed out by R.A. 9285 and the Special ADR Rules.
1. For appeals from CIAC arbitral awards that have already been filed and are currently pending
For more than preserving expediency and convenience, this restrained attitude against challenging arbitral before the CA under Rule 43, the prior availability of the appeal on matters of fact and law thereon
awards on their merits most importantly respects party-autonomy, which is the essence of arbitration169 and applies. This is only proper since the parties resorted to this mode of review as it was the existing
the pro-arbitration State policy of the country. So that when the courts deem a CIAC arbitral award as final, procedural rules at the time of filing, prior to the instant amendment.
barring exceptions, the courts are really upholding the substantive rights of the disputing parties and their
exercise of autonomy in deciding in what manner, for how long, and before which forum their dispute is to be 2. For future appeals from CIAC arbitral awards that will be filed after the promulgation of this
resolved. This is but the Court's recognition that party-autonomy underpins the very option of disputing parties
Decision:
to refer their construction dispute before the CIAC, and that the same has been central in the legislative
intendment of a more limited and restricted mode of judicial review of CIAC arbitral awards.
a. If the issue to be raised by the parties is a pure question of law, the appeal should be
filed directly and exclusively with the Court through a petition for review under Rule 45.
For the avoidance of doubt, the Court now holds that the judicial review of CIAC arbitral awards takes either
of two remedial routes, depending on the issue being raised. First, if the issue raised is a pure question of law,
the petition should be filed directly and exclusively with the Court, notwithstanding Rule 43. Second, in cases b. If the parties will appeal factual issues, the appeal may be filed with the CA, but only
where the petition takes issue on the integrity of the arbitral tribunal and its decision, (i.e., allegations of on the limited grounds that pertain to either a challenge on the integrity of the CIAC
corruption, fraud, misconduct, evident partiality, incapacity or excess of powers within the tribunal), or the arbitral tribunal (i.e., allegations of corruption, fraud, misconduct, evident partiality,
unconstitutionality or invalidity of its actions in the arbitral process170 then the parties can and should appeal incapacity or excess of powers within the tribunal) or an allegation that the arbitral
the CIAC award before the CA under Rule 65, on grounds of grave abuse of discretion amounting to lack or tribunal violated the Constitution or positive law in the conduct of the arbitral process,
excess in jurisdiction, where a factual review may then be had by the CA. through the special civil action of a petition for certiorari under Rule 65, on grounds of
grave abuse of discretion amounting to lack or excess in jurisdiction. The CA may
conduct a factual review only upon sufficient and demonstrable showing that the integrity
Concomitantly, the availability of a resort to the CA via a Rule 65 petition under these circumstances must of the CIAC arbitral tribunal had indeed been compromised, or that it committed
also necessarily amend Rule 19.7 of the Special ADR Rules which proscribes any filing of a special civil
unconstitutional or illegal acts in the conduct of the arbitration.
action of a petition for certiorari. This necessary amendment will allow for the narrowest of grounds for a
factual review of a CIAC arbitral award to be brought before the proper court through the correct action. This
amendment is also merited so that the Special ADR Rules may not, without their intention, frustrate instead of 3. Under no other circumstances other than the limited grounds provided above may parties appeal
facilitate the modes of appeal from CIAC arbitral awards. to the CA a CIAC arbitral award.

This harmonization is most consistent with the spirit of the law which created the CIAC, as was reaffirmed by III - Judicial Review of the CIAC award in the case at bar
R.A. 9285 and the Special ADR Rules. Accordingly, all rules and regulations that allow the contrary,
including the pertinent provisions in the Revised Administrative Circular No. 1-95, Rule 43 of the Rules and With the terrain on the mode of appeal from CIAC awards defined for bright-line prospective application, this
the CIAC Rules, should be deemed amended to conform to the rule on direct resort to this Court on pure Court finally proceeds to the merit of the parties, as seen from the lens of this limited scope of judicial review.
questions of law. As well, all the previous cases of Uniwide Sales Realty and Resources Corporation v. Titan-
Ikeda Construction and Development Corporation171 and the more recent case of Shangri-La Properties, Inc.
v. B.F. Corporation172 are now deemed abandoned. The narrow exception to the general deference to the expert findings and conclusions of the CIAC attends the
present consolidated petitions, as the petition presents a pure question of law on which the construction dispute
turns, i.e., the nature and legal effect of a withholding agent's belated withholding and remitting of the 2%
Be that as it may, the Court nevertheless clarifies that this instant carving out of the CIAC from the CWT.
enumeration under Rule 43, along with the effective reversal of jurisprudence that provide otherwise,
is prospective in application, as judicial decisions applying or interpreting laws form part of the legal system of
the Philippines until they are reversed, and remain good law until abandoned.173 The prospective application Further, even without applying to the instant case the foregoing considerations on the history of judicial
of the present ruling on the proper modes of appeal from a CIAC arbitral award applies in favor of parties who review vis-à-vis CIAC awards, the Court nevertheless chiefly observes that the CA misapplied its appellate
have relied on the old doctrine and have acted in good faith.174 As the Court elaborated in Benzonan v. Court function when it delved into settling the factual matters and modified the mathematical computation of the
of Appeals:175 CIAC with respect to the presence or absence of an outstanding balance payable to RSII. This mathematical
re-computation is an error not because the new ruling on judicial review of CIAC awards is applicable to this
case (as it applies prospectively) but because the amounts reimbursable to RSII were not specifically raised by RR No. 2-98, Section 2.57.3, further recites the persons required to be withholding agents, under which
the RSII as an issue in its Rule 43 petition before the CA, since the issues raised before it were confined to the GMCLI falls to wit:
release of the amount deducted by GMCLI from its Progress Billing No. 15 to cover the CWT of 2% on
payments for the first 14 Progress Billings.
SECTION 2.57.3. Persons Required to Deduct and Withhold - The following persons are hereby constituted as
withholding agents for purposes of the creditable tax required to be withheld on income payments enumerated
In addition, that the CA made a precipitate factual conclusion of the correctness of RSII's mathematical in Section 2.57.2:
computation over that of GMCLI after citing gossamer-thin basis perhaps betrays the general impropriety of
an appellate court's review of factual findings of more specialized tribunals and quasi-judicial agencies, which (A) In general, any judicial person, whether or not engaged in trade or business:
were legally ascribed primacy.

xxxx
As has been said, the referral of construction disputes to the CIAC is grounded on the need for construction
efforts to, as far as possible, remain unfettered by lengthy and belabored court cases, and for parties in the
construction industry to be given enough breathing room to maneuver the same for the farsighted benefit of Agents, employees or any person purchasing goods or services, paying for and in behalf of the aforesaid
national development. withholding agents shall likewise withhold in their behalf, provided that the official receipts of
payments/sales invoice shall be issued in the name of the person whom the former represents and
the corresponding certificates of taxes withheld (BIR Form No. 2307) shall immediately be issued upon
Disputes such as the one presented by the petitions at bar, which to date already ran a lifespan of over four withholding of the tax.
years, illustrate the need for CIAC arbitral awards to henceforth be given the authoritative sway and deference
that they merit, as well as demonstrates the call for courts to stay their hands until a pure question of law can
be distilled from the dispute and brought before it. x x x x.180 (Emphasis supplied; underscoring omitted)

The CWT Issue Finally, the same RR likewise appoints the time when the 2% CWT should be withheld, under Section 2.57.4
thereof:
Secondly, with regard to the tax issue, and without leaving RSII deprived of any remedy under the law, the
Court finds that the CIAC, as affirmed by the CA, correctly found GMCLI to be without the authority to SECTION 2.57.4. Time of Withholding - The obligation of the payor to deduct and withhold the tax under
belatedly withhold the 2% withholding tax, but that despite the lack of authority of GMCLI to belatedly Section 2.57 of the Regulations arises at the time an income payment is paid or payable, or the income
withhold and remit the 2% CWT, RSII is nevertheless still not entitled to the release of the amount equivalent payment is accrued or recorded as an expense or asset, whichever is applicable, in the payor's books,
to that withheld in the cumulative. whichever comes first. The terms [sic] "payable" refers to the date the obligation becomes due, demandable or
legally enforceable.
The axis of the present dispute, as well as the remaining remedy herein, lies in the definition and design of the
CWT. The Expanded CWT, as defined under Section 2.57(B) of Revenue Regulation (RR) No. 2-98178 reads: The CWT's design, therefore, for tax creditability, stands on the twin conditions of the withholding agent's
withholding the CWT, on the one hand, and the payee's crediting of said amount in its income tax return, on
the other.
(B) Creditable Withholding Tax. - Under the CWT system, taxes withheld on certain income payments are
intended to equal or at least approximate the tax due of the payee on said income. The income recipient is still
required to file an income tax return, as prescribed in Sec. 51 and Sec. 52 of the NIRC, as amended, to report The black letter of the law is demonstrably clear and, as applied to the present case, prescribes that GMCLI
the income and/or pay the difference between the tax withheld and the tax due on the income. Taxes withheld should have remitted the 2% CWT as soon as each Progress Billing was paid and accordingly should have also
on income payments covered by the expanded withholding tax (referred to in Sec. 2.57.2 of these regulations) issued the corresponding BIR Fonn 2307 to RSII in order for the latter to have had a tax credit claim on the
and compensation income (referred to in Sec. 2.78 also of these regulations) are creditable in nature. same. GMCLI should therefore issue to RSII the pertinent BIR Form 2307 for all its belated withholding of
CWT, so that RSII may exhaust the remedies available to it in the law.
Among the classifications of withholding taxes, the CWT is a tax imposed on certain income payments and is
creditable against the income tax due of the payee for the taxable quarter/year in which the particular income It also warrants mentioning that withholding agents who delay the withholding and remittance of the CWT, are
was earned. Essentially, the CWT is an advance income tax on the payee. Prior to the actual filing of income liable to pay the 25% surcharge in accordance with Section 248181 of the National Revenue Code of 1997
tax return, the taxpayer already pays a portion of its foreseeable income tax liability in the form of the (NIRC), 12% interest rate in accordance with R.A. 10963182 or the TRAIN Law, and the compromise penalty
creditable income tax, withheld and remitted for him on his behalf by the withholding agent. of not less than P40,000.00, in compliance with Section 255183 of the NIRC, and more specifically Annex
A of the Revenue Memorandum Order (RMO) No. 7-2015.
Upon the filing of the payee's income tax return, the income of the payee which was subject to the CWT is still
reported in the income tax return, for the computation of the income tax due on it. In the event that the income Finally, this dispute over the construction of a hospital has already been pending for over four years, which in
tax computed is more than the CWT paid earlier, the difference shall be paid by the payee in order for his the construction industry exponentially translates to increasingly damaging delay, all the more necessitating
income tax to be paid in full.Conversely, in case the income tax calculated is less than the CWT paid, the resolution at the soonest possible time.
overpayment of CWT shall either be carried over to the next taxable period for the payee, or refunded in his
favor. Conclusion
It has been said that earlier forms of arbitration predated laws and organized courts, and that contrary to the
notion that arbitration modes are novel and untested, they are actually the courts' "next-of-kin",186 perhaps
even their progenitors. Along the same vein, the ability of a society to empower alternative modes of dispute
resolution is a hallmark of a democracy, with courts exercising their ability to stay their own hands, thereby
allowing space for the parties to a dispute to exercise their voluntary autonomy in the name and under the
principle of expedited conflict resolutions. This need to enable the quickest and most conclusive conflict
resolution possible finds exacting relevance in the case of the construction industry, with its inherently
complex dynamics, and with the stakes that involve national interests, not in the least of which are public
infrastructure and safety.

The attributes and functions of the CIAC also operatively place it in a hybrid classification, in that it is
categorized as a quasi-judicial agency, but its very nature as an arbitral tribunal effectively places it at par with
other commercial arbitral tribunals, with their characteristic speed, subject matter authoritativeness and overall
autonomy. This amalgamation of its design and utilities created a whole new legal animal, which, like all
things novel, poses for the Court a challenge of ascertaining its parameters and remedial routes set by law.
Perhaps, unless the legislature deems it fit to create a new and independent set of rules that apply to the CIAC
more responsively, the Court must continue to contend with harmonizing varying material rules, all m a
manner that is as just as it is tenable under existing laws.

It is central, therefore, that the CIAC be empowered and enabled to fulfill its function as the professionally
authoritative venue for settlement of construction disputes, and not straitjacketed to fit into the mold of the
court system which it was meant to be an alternative of. To this end, and perhaps somewhat ironically, the
courts can contribute best through non-participation, save on the narrowest of grounds. The courts are, after
all, ultimately dealers of justice, more so in industries that are of greater consequence, and must remain true to
this highest mandate, even if it means relinquishing review powers that, in the sum of things, it was
demonstrably not meant to bear.

Further, the Court in this wise irretrievably unravels the previous hesitation to completely remove CIAC
awards from the purview of Rule 43 appeals. A clear historical affirmation of their exclusion begs no other
consequence, and the Court would be remiss if it insists on maintaining the existing procedural route after the
same has been shown to be not only substantively counterintuitive but more so unfounded.

As has been fleshed out by the present controversy, this overarching attempt towards less court litigation and RTC acting as Special Agrarian Court
more of alternative conflict resolution in the construction industry must only get support from the Court
through its own restraint, lest it be accused of being eager towards copious and lengthy litigations, or worse, G.R. No. 164631               June 26, 2009
indifferent to their costs. LAND BANK OF THE PHILIPPINES, Petitioner, vs. RENE RALLA BELISTA, Respondent.
PERALTA, J.:
WHEREFORE, the Petition is hereby PARTIALLY GRANTED. Accordingly, the Decision dated October Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court filed by Land Bank
28, 2016 of the Court of Appeals, Sixth Division, in CA-G.R. SP No. 145753 is PARTIALLY of the Philippines (petitioner), seeking to annul and set aside the May 26, 2004 Decision and the July 28, 2004
REVERSED with respect to Ross Systems International, Inc.'s entitlement to the amount of P1,088,214.83. Resolution of the Court of Appeals (CA) in CA-G.R. SP No. 81096.
The Construction Industry Arbitration Commission's Final Award dated May 10, 2016 is
hereby REINSTATED with MODIFICATION, in that Global Medical Center of Laguna, Inc. is The antecedent facts and proceedings, as narrated by the CA, are as follows:
further ORDERED to furnish Ross Systems International, Inc. with the pertinent BIR Form 2307, in
compliance with Section 2.57.3, Revenue Regulation No. 2-98.
It appears that spouses Pablo Ralla and Carmen Munoz Ralla had donated their eight (8) parcels of lot located
Furthermore, the new ruling of the Court with respect to the modes of judicial review of the Construction in Ligao, Albay to their daughter, Rene Ralla Belista, the herein private respondent.
Industry Arbitration Commission arbitral awards is accorded PROSPECTIVE application and does not apply
to appeals therefrom that are currently pending before the Court of Appeals. The eight (8) parcels of lot were placed by the Department of Agrarian Reform (DAR, for brevity) under the
coverage of the Comprehensive Agrarian Reform Program (Presidential Decree No. 27 and Executive Order
No. 228). Consequently, private respondent claimed payment of just compensation over said agricultural lands.
It further appears that the DAR's evaluation of the subject farms was only ₱227,582.58, while petitioner Land case before the RTC without first seeking the intervention of the DARAB is violative of the doctrine of non-
Bank of the Philippines (LBP, for brevity) assessed the same at ₱317,259.31. exhaustion of administrative remedies. The CA found that petitioner's petition for determination of just
compensation was filed in the RTC on October 28, 2003 when the 2003 DARAB Rules of Procedure was
already in effect, i.e., on February 8, 2003, and under its transitory provision, it is provided that the 2003 Rules
Believing that her lots were grossly underestimated, private respondent, on 11 November 2002, filed a Petition shall govern all cases filed on or after its effectivity; and, since an appeal from the adjudicator's resolution
for Valuation and Payment of Just Compensation against petitioning bank before the DARAB-Regional should first be filed with the DARAB, the RTC, sitting as a Special Agrarian Court (SAC), did not err in
Adjudicator for Region V (RARAD-V) docketed as DCN D-05-02-VC-005. dismissing petitioner's petition.

Petitioner filed a motion for reconsideration, which was denied in a Resolution dated July 28, 2004.
On 07 July 2003, the RARAD-V issued a Decision, in favor of herein private respondent, the fallo of which
reads: Petitioner is now before the Court raising the following arguments:

1. THE COURT OF APPEALS ERRED IN LAW IN DISMISSING THE PETITION FOR REVIEW
Wherefore, just compensation for the subject areas is hereby preliminarily fixed at TWO MILLION EIGHT CONSIDERING THAT THE LBP DID NOT VIOLATE THE "DOCTRINE OF NON-EXHAUSTION OF
HUNDRED NINETY-SIX THOUSAND and FOUR HUNDRED EIGHT & 91/100 (₱2,896,408.91) PESOS. ADMINISTRATIVE REMEDIES" WHEN IT FILED THE ORIGINAL PETITION FOR DETERMINATION
Land Bank of the Philippines, Legaspi City, is hereby ordered to pay herein petitioner said amount pursuant to OF JUST COMPENSATION BEFORE THE COURT A QUO WITHOUT FIRST SEEKING THE
existing rules and guidelines, minus the sum already remitted per Order dated January 2, 2003. SO INTERVENTION OF THE DARAB.
ORDERED. 2. THE COURT OF APPEALS ERRED IN DECLARING THAT THE APPLICABLE RULE IS THE 2003
DARAB RULES OF PROCEDURE, DESPITE THE FACT THAT THE PETITION (FOR VALUATION
As both parties interposed their respective motions for reconsideration, the RARAD-V eventually issued an AND PAYMENT OF JUST COMPENSATION) WAS FILED BEFORE THE RARAD ON NOVEMBER 11,
Order dated 8 October 2003, the decretal portion of which reads: 2002.

Petitioner contends that the petition for valuation and payment of just compensation was filed with the
Wherefore, the Decision dated July 7, 2003 is MODIFIED, fixing the valuation claim of petitioner herein with DARAB- Regional Adjudicator for Region V (RARAD) on November 11, 2002, long before the effectivity of
respect to her due share in the above lots to the tune of Two Million Five Hundred Forty Thousand, Two the 2003 Rules of Procedure; that under the transitory provision of the 2003 DARAB Rules, all cases pending
with the Board and the adjudicators prior to the date of the Rules' effectivity shall be governed by the DARAB
Hundred Eleven and 58/100 (₱2,540,211.58) Pesos. Land Bank Legaspi City is hereby ordered to pay herein
Rules prevailing at the time of their filing; that clear from the transitory provision that it is the proceeding of
petitioner said amount pursuant to existing rules and guidelines, minus the sum already paid per Order dated the DARAB which is governed by the 2003 DARAB Rules of Procedure, thus, it is the date of filing of the
January 2, 2003. SO ORDERED. petition with the DARAB or any of its adjudicators which is the reckoning date of the applicability of the 2003
DARAB Rules and not the date of filing with the SAC; that under the 1994 DARAB Rules prevailing at the
Aggrieved, petitioner Bank, on 28 October 2003, filed an original Petition for Determination of Just time of the filing of the respondent's claim for just compensation, the Rules provided that the decision of the
Compensation at the same sala of the RTC, docketed as Agrarian Case No. 03-06. adjudicator on land valuation and preliminary determination of just compensation shall not be appealable to
the Board, but shall be brought
The court a quo motu propio dismissed the case when it issued the herein first assailed Order dated 12
November 2003 "for failure to exhaust administrative remedies and/or comply with Sections 5, 6, and 7, Rule directly to the RTC; that it was in the observance of the 1994 DARAB Rules that petitioner brought the
XIX, 2003 DARAB Rules of Procedure. adjudicator's decision to the RTC sitting as SAC.

Petitioner LBP lodged a Motion for Reconsideration arguing, inter alia, "that the DARAB 2003 Rules of In his Comment, respondent claims that petitioner's petition with the RTC is an original action and, since the
Procedure does not apply to SAC nor its precursor DARAB Case and that the ground for dismissal of the case case was filed at a time when appeal to the DARAB Central Office was already provided in the 2003 DARAB
is not among the instances when a court may dismiss a case on its motion." Rules before resorting to judicial action, the RTC correctly dismissed the petition, which was correctly
affirmed by the CA.
As the court a quo denied its Motion for Reconsideration in an Order dated 28 November 2003, petitioner LBP
elevated the case before the Tribunal through the present Petition for Review, theorizing: Petitioner filed a Reply reiterating its arguments in the petition.

I. WHETHER OR NOT THE SAC A QUO ERRED IN DISMISSING THE CASE MOTU PROPIO ON THE The issue for resolution is whether it is necessary that in cases involving claims for just compensation under
GROUND OF PLAINTIFF'S FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES. Republic Act (RA) No. 6657 that the decision of the Adjudicator must first be appealed to the DARAB before
a party can resort to the RTC sitting as SAC.
II. WHETHER OR NOT SECTIONS 5, 6, AND 7, RULE XIX OF THE DARAB 2003 RULES OF
PROCEDURE APPLY TO CASES FILED AND PENDING BEFORE THE DARAB OR ITS The court rules in the negative.
ADJUDICATORS PRIOR TO ITS EFFECTIVITY AND TO CASES FILED AND PENDING WITH THE
SPECIAL AGRARIAN COURTS. Sections 50 and 57 of RA No. 6657 provide:
Section 50. Quasi-judicial Powers of the DAR. – The DAR is hereby vested with primary
On May 26, 2004, the CA rendered its assailed Decision dismissing the petition. jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction
over all matters involving the implementation of agrarian reform, except those falling under the exclusive
The CA ruled that under Section 5, Rule XIX of the 2003 DARAB Rules of Procedure, an appeal from the jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources
adjudicator's resolution shall be filed before the DARAB and not before the RTC; that petitioner's filing of the (DENR) x x x
Section 57. Special Jurisdiction. – The Special Agrarian Court shall have original and exclusive jurisdiction In Land Bank of the Philippines v. Natividad, wherein Land Bank questioned the alleged failure of private
over all petitions for the determination of just compensation to landowners, and the prosecution of all criminal respondents to seek reconsideration of the DAR's valuation, but instead filed a petition to fix just
offenses under this Act. x x x compensation with the RTC, the Court said:

The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) At any rate, in Philippine Veterans Bank v. CA, we held that there is nothing contradictory between the DAR’s
days from submission of the case for decision. primary jurisdiction to determine and adjudicate agrarian reform matters and exclusive original jurisdiction
over all matters involving the implementation of agrarian reform, which includes the determination of
Clearly, under Section 50, DAR has primary jurisdiction to determine and adjudicate agrarian reform matters questions of just compensation, and the original and exclusive jurisdiction of regional trial courts over all
and exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except petitions for the determination of just compensation. The first refers to administrative proceedings, while the
those falling under the exclusive jurisdiction of the DA and the DENR. Further exception to the DAR's second refers to judicial proceedings.
original and exclusive jurisdiction are all petitions for the determination of just compensation to landowners
and the prosecution of all criminal offenses under RA No. 6657, which are within the jurisdiction of the RTC In accordance with settled principles of administrative law, primary jurisdiction is vested in the DAR to
sitting as a Special Agrarian Court. Thus, jurisdiction on just compensation cases for the taking of lands under determine in a preliminary manner the just compensation for the lands taken under the agrarian reform
RA No. 6657 is vested in the courts. program, but such determination is subject to challenge before the courts. The resolution of just compensation
cases for the taking of lands under agrarian reform is, after all, essentially a judicial function.
In Republic v. CA,the Court explained:
Thus, the trial court did not err in taking cognizance of the case as the determination of just compensation is a
Thus, Special Agrarian Courts, which are Regional Trial Courts, are given original and exclusive jurisdiction function addressed to the courts of justice.
over two categories of cases, to wit: (1) "all petitions for the determination of just compensation to
landowners" and (2) "the prosecution of all criminal offenses under [R.A. No. 6657]." The provisions of §50 In Land Bank of the Philippines v. Celada, where the issue was whether the SAC erred in assuming
must be construed in harmony with this provision by considering cases involving the determination of just jurisdiction over respondent's petition for determination of just compensation despite the pendency of the
compensation and criminal cases for violations of R.A. No. 6657 as excepted from the plenitude of power administrative proceedings before the DARAB, the Court stated that:
conferred on the DAR. Indeed, there is a reason for this distinction. The DAR is an administrative agency
which cannot be granted jurisdiction over cases of eminent domain (for such are takings under R.A. No. 6657) It would be well to emphasize that the taking of property under RA No. 6657 is an exercise of the power of
and over criminal cases. Thus, in EPZA v. Dulay and Sumulong v. Guerrero - we held that the valuation of eminent domain by the State. The valuation of property or determination of just compensation in eminent
property in eminent domain is essentially a judicial function which cannot be vested in administrative domain proceedings is essentially a judicial function which is vested with the courts and not with
agencies, while in Scoty’s Department Store v. Micaller, we struck down a law granting the then Court of administrative agencies. Consequently, the SAC properly took cognizance of respondent's petition for
Industrial Relations jurisdiction to try criminal cases for violations of the Industrial Peace Act. determination of just compensation.

In a number of cases, the Court has upheld the original and exclusive jurisdiction of the RTC, sitting as SAC, The RTC dismissed petitioner's petition for determination of just compensation relying on Sections 5, 6 and 7
over all petitions for determination of just compensation to landowners in accordance with Section 57 of RA of Article XIX of the 2003 DARAB Rules of Procedure, to wit:
No. 6657.
Section 5. Appeal. A party who disagrees with the resolution of the Adjudicator may bring the matter to the
In Land Bank of the Philippines v. Wycoco,7 the Court upheld the RTC's jurisdiction over Wycoco's petition Board by filing with the Adjudicator concerned a Notice of Appeal within fifteen (15) days from receipt of the
for determination of just compensation even where no summary administrative proceedings was held before resolution. The filing of a Motion for Reconsideration of said resolution shall interrupt the period herein fixed.
the DARAB which has primary jurisdiction over the determination of land valuation. The Court held: If the motion is denied, the aggrieved party may file the appeal within the remaining period, but in no case
shall it be less than five (5) days.
In Land Bank of the Philippines v. Court of Appeals, the landowner filed an action for determination of just
compensation without waiting for the completion of DARAB’s re-evaluation of the land. This, Section 6. When Resolution Deemed Final. Failure on the part of the aggrieved party to contest the resolution
notwithstanding, the Court held that the trial court properly acquired jurisdiction because of its exclusive and of the Adjudicator within the aforecited reglementary period provided shall be deemed a concurrence by such
original jurisdiction over determination of just compensation, thus – party with the land valuation, hence said valuation shall become final and executory.

… It is clear from Sec. 57 that the RTC, sitting as a Special Agrarian Court, has "original and exclusive Section 7. Filing of Original Action with the Special Agrarian Court for Final Determination. The party who
jurisdiction over all petitions for the determination of just compensation to landowners." This "original and disagrees with the decision of the Board may contest the same by filing an original action with the Special
exclusive" jurisdiction of the RTC would be undermined if the DAR would vest in administrative officials Agrarian Court (SAC) having jurisdiction over the subject property within fifteen (15) days from his receipt of
original jurisdiction in compensation cases and make the RTC an appellate court for the review of the Board's decision.
administrative decisions. Thus, although the new rules speak of directly appealing the decision of adjudicators
to the RTCs sitting as Special Agrarian Courts, it is clear from Sec. 57 that the original and exclusive Notably, the above-mentioned provisions deviated from Section 11, Rule XIII of the 1994 DARAB Rules of
jurisdiction to determine such cases is in the RTCs. Any effort to transfer such jurisdiction to the adjudicators Procedure which provides:
and to convert the original jurisdiction of the RTCs into an appellate jurisdiction would be contrary to Sec. 57
Section 11. Land Valuation and Preliminary Determination and Payment of Just Compensation – The decision
and, therefore, would be void. Thus, direct resort to the SAC [Special Agrarian Court] by private respondent is
of the Adjudicator on land valuation and preliminary determination and payment of just compensation shall
valid.
not be appealable to the Board, but shall be brought directly to the Regional Trial Courts designated as Special
In the case at bar, therefore, the trial court properly acquired jurisdiction over Wycoco’s complaint for Agrarian Courts within fifteen (15) days from receipt of the notice thereof. Any party shall be entitled to only
determination of just compensation. It must be stressed that although no summary administrative proceeding one motion for reconsideration.
was held before the DARAB, LBP was able to perform its legal mandate of initially determining the value of
Wycoco's land pursuant to Executive Order No. 405, Series of 1990. x x x
where DARAB acknowledges that the decision of just compensation cases for the taking of lands under RA
6657 is a power vested in the courts.Although Section 5, Rule XIX of the 2003 DARAB Rules of Procedure
provides that the land valuation cases decided by the adjudicator are now appealable to the Board, such rule
could not change the clear import of Section 57 of RA No. 6657 that the original and exclusive jurisdiction to
determine just compensation is in the RTC. Thus, Section 57 authorizes direct resort to the SAC in cases
involving petitions for the determination of just compensation.In accordance with the said Section 57,
petitioner properly filed the petition before the RTC and, hence, the RTC erred in dismissing the case.
Jurisdiction over the subject matter is conferred by law. Only a statute can confer jurisdiction on courts and
administrative agencies while rules of procedure cannot.

WHEREFORE, the petition for review on certiorari is GRANTED. The Decision dated May 26, 2004 and the Default jurisdiction
Resolution dated July 28, 2004, of the Court of Appeals in CA-G.R. SP No. 81096, are REVERSED and SET
ASIDE. The Regional Trial Court, Branch 3, Legaspi City, sitting as Special Agrarian Court, is directed to [G.R. NO. 157714 : June 16, 2009]
MUNICIPALITY OF PATEROS, Petitioner, v. THE HONORABLE COURT OF APPEALS, THE
hear without delay petitioner's petition for the determination of just compensation. SO ORDERED
MUNICIPALITY OF MAKATI, THE DIRECTOR OF LANDS, and THE DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES, Respondents.
NACHURA, J.:

Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure, seeking
the reversal of the Court of Appeals (CA) Decision dated January 22, 2003, which denied the appeal of
petitioner Municipality of Pateros (Pateros) for undertaking a wrong mode of appeal. Subject of the appeal was
the Order of the Regional Trial Court (RTC) of Makati City, Branch 139, dated June 14, 1996, which
dismissed petitioner's complaint for lack of jurisdiction.

The Facts

The property subject of this case consists of portions of then Fort William McKinley, now known as Fort
Bonifacio (subject property), currently comprising Barangays Cembo, South Cembo, West Rembo, East
Rembo, Comembo, Pembo, and Pitogo (entire property). The subject property is allegedly situated within the
territorial jurisdiction of respondent Municipality (now City) of Makati (Makati) per Proclamation No. 2475
issued on January 7, 1986 (Proclamation No. 2475) by former President Ferdinand E. Marcos (President
Marcos). Subsequently, on January 31, 1990, former President Corazon C. Aquino (President Aquino) issued
Proclamation No. 518, amending Proclamation No. 2475. Parenthetically, it may be noted that a similar
boundary dispute over the entire property exists between the Municipality (now City) of Taguig and Makati,
docketed as Civil Case No. 63896 and pending before the RTC of Pasig City, Branch 153.

As Proclamation Nos. 2475 and 518 respectively stated that the entire property is situated in Makati, Pateros,
on January 18, 1991, filed an action for Judicial Declaration of the Territorial Boundaries of Pateros against
Makati before the RTC of Pasig City, Branch 154 (Pasig RTC). The case was, however, dismissed for lack of
jurisdiction inasmuch as the subject property is located in Makati and it should have been filed before the
Makati RTC. Heeding the directive of the Pasig RTC, Pateros, on December 8, 1993, filed with the RTC of
Makati a Complaint against Makati and co-respondents, Director of Lands and the Department of Environment
and Natural Resources (DENR), for the Judicial Declaration of the Territorial Boundaries of Pateros with a
prayer for the issuance of a writ of Preliminary Injunction and Temporary Restraining Order (TRO). Pateros
claimed that, based on historical and official records, it had an original area of one thousand thirty-eight
(1,038) hectares, more or less. However, when a cadastral mapping was conducted by the Bureau of Lands in
1978, Pateros was appalled to learn that its territorial boundaries had been substantially reduced to merely one
hundred sixty-six (166) hectares. Pateros opined that this disparity was brought about by the issuance of
Proclamation Nos. 2475 and 518. Thus, Pateros prayed that the RTC judicially declare the territorial
boundaries of Pateros based on supporting pieces of evidence, and that it nullify Proclamation No. 2475.

Makati filed a Motion to Dismiss, contending that the issue was not the nullification of Proclamation No.
2475; that the RTC had no jurisdiction over the subject matter of the action because original jurisdiction to
resolve boundary disputes among municipalities situated in Metro Manila is vested in the Metropolitan Manila
Authority (MMA); that the RTC's jurisdiction is merely appellate; that the complaint failed to state a cause of
action as Pateros failed to exhaust administrative remedies by failing to settle the dispute amicably; and that
Pateros' claims had already been barred by laches because Makati, throughout the years, had already assailed CA Decision be reversed and set aside, and that the RTC be directed to proceed with the trial of the
developed the subject property and had spent millions on such development. instant case.

Makati also filed a Motion to Suspend Proceedings, arguing that the bill converting Makati into a city was On the other hand, Makati claims that the sole issue in Pateros' appeal before the CA is jurisdiction and as the
pending approval before the Senate and portions of the subject property are included in the proposed charter. question of jurisdiction is a question of law and as the CA lacks jurisdiction over pure questions of law,
Makati, thus, opined that the continuation of the RTC proceedings would create a conflict between the judicial therefore, Pateros resorted to a wrong mode of appeal. The issues raised by Pateros do not consist of questions
and the legislative branches. In its Order dated October 21, 1994, the RTC granted Makati's Motion. of fact as the RTC rendered the assailed Order based on Makati's Motion to Dismiss and no trial on the merits
was ever conducted. Makati points out that the CA quoted the decision of the RTC's discourse in order to show
On July 19, 1994, Republic Act No. 7854 was enacted into law, converting Makati into a highly urbanized that only a question of law was involved in Pateros' appeal. Thus, Makati posits that Pateros defies the rules on
city. Pateros then moved for the revival of the proceedings before the RTC, which it granted in its Order dated trial, evidence, and jurisdiction in a desperate bid to extricate itself from its mistake in taking a wrong mode of
March 17, 1995. However, due to the pending Motion to Dismiss earlier filed by Makati, the RTC required the appeal, i.e., by notice of appeal to the CA rather than a Petition for Review on Certiorari under Rule 45 of the
parties to submit their respective Memoranda. Revised Rules of Civil Procedure filed before this Court. Makati submits that the dismissal of Pateros' appeal
was proper, as mandated by Section 2, Rule 50 of the said Rules. Due to the availment of the wrong mode of
The RTC's Ruling appeal, the RTC's Order dismissing the case already attained finality.
On June 14, 1996, the RTC issued an Order, dismissing the case on the ground of lack of jurisdiction. The The Director of Lands and the DENR, through the Office of the Solicitor General (OSG), share the stand and
RTC held that Proclamation No. 2475 specifically declared that the subject property is within the territorial arguments of Makati. The OSG stresses that the parties never presented any evidence before the RTC which
jurisdiction of Makati and, inasmuch as the Proclamation was not declared unconstitutional, the same is a valid resolved the case based on the parties' undisputed factual submissions and the application thereto of the
and subsisting law. In the main, citing pertinent laws, Rules of Civil Procedure, and jurisprudence. Hence, the OSG concludes that the appeal before
the CA involved a pure question of law.
Sections 10 and 11, Article X of the 1987 Constitution, and pursuant to this Court's ruling in Municipality of
Sogod v. Rosal, the RTC held that the modification or substantial alteration of boundaries of municipalities can Our Ruling
be done only through a law enacted by Congress which shall be subject to approval by a majority of the votes
cast in a plebiscite in the political units directly affected. Hence, the RTC opined that it is without jurisdiction We agree that Pateros indeed committed a procedural infraction. It is clear that the issue raised by Pateros to
to fix the territorial boundaries of the parties. Pateros filed a Motion for Reconsideration which was, however, the CA involves the jurisdiction of the RTC over the subject matter of the case. The jurisdiction of a court over
denied by the RTC in its Order dated August 30, 1996. Aggrieved, Pateros appealed to the CA. the subject matter of the action is a matter of law; it is conferred by the Constitution or by law. Consequently,
issues which deal with the jurisdiction of a court over the subject matter of a case are pure questions of law. As
The CA's Ruling Pateros' appeal solely involves a question of law, it should have directly taken its appeal to this Court by filing
a Petition for Review on Certiorari under Rule 45, not an ordinary appeal with the CA under Rule 41. The CA
On January 22, 2003, the CA denied Pateros' appeal. The CA held that the RTC did not make any findings of did not err in holding that Pateros pursued the wrong mode of appeal.
fact but merely applied various provisions of law and jurisprudence. Thus, the case presented a pure question
of law, which Pateros should have brought directly to the Supreme Court, pursuant to Section 5(2), Article However, in the interest of justice and in order to write finis to this controversy, we opt to relax the rules. Our
VIII of the 1987 Constitution and Section 2, Rule 41 of the Revised Rules of Civil Procedure. The CA also ruling in Atty. Ernesto A. Tabujara III and Christine S. Dayrit v. People of the Philippines and Daisy
held that it would amount to grave abuse of discretion amounting to lack of jurisdiction if the CA insisted on Afable31 provides us with ample justification, viz.:
resolving the issues raised therein. Thus, by undertaking a wrong mode of appeal and citing Section 2, Rule 50
of the Revised Rules of Civil Procedure, the CA denied Pateros' appeal. Pateros filed a Motion for While it is true that rules of procedure are intended to promote rather than frustrate the ends of justice, and
Reconsideration, which the CA denied in its Resolution dated March 27, 2003. while the swift unclogging of the dockets of the courts is a laudable objective, it nevertheless must not be met
at the expense of substantial justice.
The Issue
The Court has allowed some meritorious cases to proceed despite inherent procedural defects and lapses. This
Hence, this Petition based on the sole ground that the CA committed grave abuse of discretion in dismissing is in keeping with the principle that rules of procedure are mere tools designed to facilitate the attainment of
the appeal for lack of jurisdiction. justice, and that strict and rigid application of rules which would result in technicalities that tend to frustrate
rather than promote substantial justice must always be avoided. It is a far better and more prudent cause of
Pateros asseverates that the issues raised before the CA involved mixed questions of fact and law, because action for the court to excuse a technical lapse and afford the parties a review of the case to attain the ends of
Pateros sought the determination of its territorial boundaries and the nullification of Proclamation No. 2475; justice, rather than dispose of the case on technicality and cause grave injustice to the parties, giving a false
that Pateros does not seek the alteration, modification, or creation of another or a new local government unit impression of speedy disposal of cases while actually resulting in more delay, if not a miscarriage of justice.
(LGU), but is concerned only with its territorial boundaries which, according to existing records, consisted of
1,038 hectares; that non-presentation of evidence before the RTC does not make the appeal purely a question In those rare cases to which we did not stringently apply the procedural rules, there always existed a clear need
of law, because the parties were prevented from presenting any evidence due to the RTC's erroneous dismissal to prevent the commission of a grave injustice. Our judicial system and the courts have always tried to
of the case based on lack of jurisdiction; that Proclamation Nos. 2475 and 518 suffer from Constitutional maintain a healthy balance between the strict enforcement of procedural laws and the guarantee that every
infirmity; that the alteration or modification of the boundaries of municipalities or cities can only be made by a litigant is given the full opportunity for a just and proper disposition of his cause.
law enacted by Congress and approved by the majority of the votes cast in a plebiscite in the political units
directly affected; that Proclamation No. 2475, although issued by then President Marcos during the Marcos The emerging trend in the rulings of this Court is to afford every party litigant the amplest opportunity for the
era, was not a legislative enactment, pursuant to Section 6 of the 1976 Amendment to the Constitution; and proper and just determination of his cause, free from the constraints of technicalities. Time and again, we have
granting, without admitting, that Proclamation No. 2475 is a law, it should be subject to approval by the consistently held that rules must not be applied so rigidly as to override substantial justice.
majority of the votes cast in a plebiscite in the political units directly affected. Thus, Pateros prays that the
Given the circumstances surrounding the instant case, we find sufficient reason to relax the rules. Thus, we envisioned under Section 118(e) of the LGC, a certification shall be issued to that effect, and the dispute shall
now resolve the sole issue of whether the RTC has jurisdiction to entertain the boundary dispute between be formally tried by the Sanggunian concerned within sixty (60) days from the date of the aforementioned
Pateros and Makati. certification. In this regard, Rule III of the Rules and Regulations Implementing the LGC shall govern.

Apart from the doctrine that the jurisdiction of a tribunal over the subject matter of an action is conferred by Only upon failure of these intermediary steps will resort to the RTC follow, as specifically provided in Section
law, it is also the rule that the court's exercise of jurisdiction is determined by the material allegations of the 119 of the LGC:
complaint or information and the law applicable at the time the action was commenced. Lack of jurisdiction of
the court over an action or the subject matter of an action cannot be cured by the silence, by acquiescence, or Section 119. Appeal. - Within the time and manner prescribed by the Rules of Court, any party may elevate the
even by express consent of the parties. Thus, the jurisdiction of a court over the nature of the action and the decision of the sanggunian concerned to the proper Regional Trial Court having jurisdiction over the area in
subject matter thereof cannot be made to depend upon the defenses set up in court or upon a motion to dismiss dispute. The Regional Trial Court shall decide the appeal within one (1) year from the filing thereof. Pending
for, otherwise, the question of jurisdiction would depend almost entirely on the defendant. Once jurisdiction is final resolution of the disputed area prior to the dispute shall be maintained and continued for all legal
vested, the same is retained up to the end of the litigation. purposes.

It is worth stressing that, at the time the instant case was filed, the 1987 Constitution and the Local On this score, the jurisdiction of the RTC over boundary disputes among LGUs was settled in National
Government Code (LGC) of 1991 were already in effect. Thus, the law in point is Section 118 of the LGC, Housing Authority v. Commission on the Settlement of Land Problems, 36 where this Court recognized the
which provides: appellate jurisdiction of the proper RTC. The jurisdiction of the RTC was clarified in Municipality of Kananga
v. Judge Madrona, where this Court held that, even in the absence of any specific provision of law, "RTCs
Section. 118. Jurisdictional Responsibility for Settlement of Boundary Disputes. - Boundary disputes between have general jurisdiction to adjudicate all controversies except those expressly withheld from their plenary
and among local government units shall, as much as possible, be settled amicably. To this end: powers. They have the power not only to take judicial cognizance of a case instituted for judicial action for the
first time, but also to do so to the exclusion of all other courts at that stage. Indeed, the power is not only
(a) Boundary disputes involving two (2) or more barangays in the same city or municipality shall be referred original, but also exclusive."
for settlement to the sangguniang panlungsod or sangguniang bayan concerned.
Corollarily, we feel obliged to inform Congress of the need to pass a law specifically delineating the metes and
(b) Boundary disputes involving two (2) or more municipalities within the same province shall be bounds of the disputing LGUs. In Mariano, Jr. v. COMELEC, we held that the existence of a boundary dispute
referred for settlement to the sangguniang panlalawigan concerned. does not per se present an unsurmountable difficulty which will prevent Congress from defining with
reasonable certitude the territorial jurisdiction of an LGU. Congress, by virtue of the powers vested in it by the
(c) Boundary disputes involving municipalities or component cities of different provinces shall be jointly Constitution, could very well put an end to this dispute. We reiterate what we already said about the
referred for settlement to the sanggunians of the province concerned. importance and sanctity of the territorial jurisdiction of an LGU:
(d) Boundary disputes involving a component city or municipality on the one hand and a highly The importance of drawing with precise strokes the territorial boundaries of a local unit of government cannot
urbanized city on the other, or two (2) or more highly urbanized cities, shall be jointly referred for be overemphasized. The boundaries must be clear for they define the limits of the territorial jurisdiction of a
settlement to the respective sanggunians of the parties. local government unit. It can legitimately exercise powers of government only within the limits of its territorial
jurisdiction. Beyond these limits, its acts are ultra vires. Needless to state, any uncertainty in the boundaries
(e) In the event the sanggunian fails to effect an amicable settlement within sixty (60) days from the date the
of local government units will sow costly conflicts in the exercise of governmental powers which ultimately
dispute was referred thereto, it shall issue a certification to that effect. Thereafter, the dispute shall be formally
will prejudice the people's welfare. This is the evil sought to be avoided by the Local Government Unit in
tried by the sanggunian concerned which shall decide the issue within sixty (60) days from the date of the
requiring that the land area of a local government unit must be spelled out in metes and bounds, with technical
certification referred to above.
descriptions.
Notably, when Pateros filed its complaint with the RTC of Makati, Makati was still a municipality. We take
WHEREFORE, the instant Petition is DENIED, having been mooted by the conversion of respondent
judicial notice of the fact that there was no Sangguniang Panlalawigan that could take cognizance of the
Municipality of Makati into a highly urbanized city. The parties are hereby DIRECTED to comply with
boundary dispute, as provided in Section 118(b) of the LGC. Neither was it feasible to apply Section 118(c) or
Section 118(d) and (e) of the Local Government Code, and Rule III of the Rules and Regulations
Section 118(d), because these two provisions clearly refer to situations different from that obtaining in this
Implementing the Local Government Code of 1991 without prejudice to judicial recourse, as provided in the
case. Also, contrary to Makati's postulation, the former MMA did not also have the authority to take the place
Local Government Code. No costs.SO ORDERED.
of the Sangguniang Panlalawigan because the MMA's power was limited to the delivery of basic urban
services requiring coordination in Metropolitan Manila. The MMA's governing body, the Metropolitan Manila HLURB
Council, although composed of the mayors of the component cities and municipalities, was merely given the [G.R. No. 157095 : January 15, 2010]
power of: (1) formulation of policies on the delivery of basic services requiring coordination and
MA. LUISA G. DAZON, PETITIONER, VS. KENNETH Y. YAP AND PEOPLE OF THE
consolidation; and (2) promulgation of resolutions and other issuances, approval of a code of basic services,
and exercise of its rule-making power. Thus, there is no merit in Makati's argument that Pateros failed to PHILIPPINES, RESPONDENTS.
exhaust administrative remedies inasmuch as the LGC is silent as to the governing body in charge of boundary
disputes involving municipalities located in the Metropolitan Manila area.

However, now that Makati is already a highly urbanized city, the parties should follow Section 118(d) of the DEL CASTILLO, J.:
LGC and should opt to amicably settle this dispute by joint referral to the respective sanggunians of the
parties. This has become imperative because, after all, no attempt had been made earlier to settle the dispute
amicably under the aegis of the LGC. The specific provision of the LGC, now made applicable because of the
altered status of Makati, must be complied with. In the event that no amicable settlement is reached, as
The primordial function of the Housing and Land Use Regulatory Board (HLURB) is the regulation of the real Respondent, on the other hand, contends that there is no error of law involved in this case and that petitioner
estate trade and business.  Though the agency's jurisdiction has been expanded by law, it has not grown to the failed to give due regard to the hierarchy of courts by filing the present petition directly with the Supreme
extent of encompassing the conviction and punishment of criminals. Court instead of with the Court of Appeals. He further argues that the real issue is not of jurisdiction but the
existence of probable cause. The Secretary of Justice, according to respondent, found no probable cause to
The present Petition for Review on Certiorari assails the Orders of the Regional Trial Court (RTC) of Lapu- warrant the filing of the Information, hence its directive to cause the withdrawal of the Information.
Lapu City, Branch 54 dated October 2, 2002 and January 13,2003, which granted the Motion to Withdraw
Information filed by the public prosecutor and denied the motion for reconsideration filed by petitioner, Our Ruling
respectively. The petition has merit.
Factual Antecedents The DOJ Resolution dated June 14, 2002 which ordered the withdrawal of the information was based on the
finding that the HLURB, and not the regular court, has jurisdiction over the case.
Respondent Kenneth Y. Yap was the president of Primetown Property Group, Inc., (Primetown) the developer
of Kiener Hills Mactan Condominium, a low-rise condominium project. In November 1996, petitioner Ma. Both the respondent] and the OSG] agree with the petitioner that the regular courts and not the HLURB have
Luisa G. Dazon entered into a contract with Primetown for the purchase of Unit No. C-108 of the said jurisdiction over the criminal aspect of PD 957.  The parties, however, disagree on the basis of the directive of
condominium project. Petitioner made a downpayment and several installment payments, totaling the DOJ for the withdrawal of the Information.  Was it, as argued by petitioner, lack of jurisdiction of the RTC
P1,114,274.30. Primetown, however, failed to finish the condominium project. Thus, on March 22, 1999, or was it, as argued by respondent, lack of probable cause? We perused the DOJ Resolution dated June 14,
petitioner demanded for the refund of her payments from Primetown, pursuant to Section 23 of Presidential 2002 and we find that the basis of the resolution was, not that there was lack of probable cause but, the finding
Decree (PD) No. 957 (1976), otherwise known as "The Subdivision and Condominium Buyers' Protective that it is the HLURB that has jurisdiction over Hie case.  Pertinent portions of the said DOJ Resolution
Decree". Primetown failed to refund petitioner's payments. provide:

On October 26,2000, petitioner filed a criminal complaint with the Office of the City Prosecutor of Lapu-Lapu The petition is impressed with merit.
City against respondent as president of Primetown for violation of Section 23 in relation to Section 39 of PD
A perusal of the allegations in the complaint-affidavit would show complainant's grievance against respondent
957. Subsequently, after a finding of probable cause, an Information was filed with the RTC of Lapu-Lapu
was the failure of the latter's firm to refund the payments she made for one of the units in the aborted Mactan
City docketed as Criminal Case No. 015331-L.
condominium project in the total amount of P1,114,274.30.

Meanwhile, respondent, in connection with the resolution finding probable cause filed a Petition for Review
As early as in the case of Solid Homes, Inc. vs. Payawal, 177 SCRA 72, the Supreme Court had ruled that the
with the Department of Justice (DOJ).  On June 14,2002, the DOJ rendered a Resolution ordering the trial
Housing and Land Use Regulatory Board (HLURB) has exclusive jurisdiction over cases involving real estate
prosecutor to cause the withdrawal of the Information. Hence, the prosecutor filed a Motion to Withdraw
business and practices under PD 957.  This ruling is reiterated in several subsequent cases, to name a few of
Information with the RTC.
them, Union Bank of the Philippines-versus-HLURB, G.R. No. 953364, June 29, 1992; C.T. Torres
Enterprises vs. Hilionada, 191 SCRA 286; Villaflor vs. Court of Appeals, 280 SCRA 297; Marina Properties
The RTC disposed of the matter as follows Coip. vs. Court of Appeals, 294 SCRA 273; and Raet vs. Court of Appeals, 295 SCRA 677. Of significant
relevance is the following pronouncement of the Supreme Court in Raet vs. Court of Appeals (supra), as
Wherefore, in view of the foregoing, the Motion to Withdraw Information filed by [the] public prosecutor is follows:
hereby granted.  Accordingly, the information' filed against the herein accused is ordered withdrawn and to be
transmitted back to the City Prosecutor's Office of Lapu-Lapu City. xxx The contention has merit.  The decision in the ejectment suit is conclusive only on the question of
possession of the subject premises.  It does not settle the principal question involved in the present case,
Furnish copies of this order to Prosecutor Rubi, Attys. Valdez and Pangan. namely, whether there was perfected contract of sale between petitioners and private respondent PVDHC
involving the units in question.   Under 8(100) of E.O. No. 648 dated February 7, 1981, as amended by E.O.
SO ORDERED.Petitioner's motion for reconsideration was denied. No. 90 dated December 17, 1986 this question is for the HLURB to decide. The said provision of law gives
that agency the power to—
Hear and decide cases of unsound real estate business practices; claims involving refijnd filed against project
Issue owners, developers, dealers, brokers, or salesmen; and cases of specific performance.
Hence, the present Petition for Review on Certiorari raising the following issue: ''Whether or not a regional
trial court has jurisdiction over a criminal action arising from violation of PD 957". This jurisdiction of the HLURB is exclusive.  It has been held to extend to the determination of the question
whether there is a perfected contract of sale between condominium buyers and [the] developer x x x.

Petitioner's Arguments In fine, the Rule of Law dictates that we should yield to this judicial declaration upholding the jurisdiction of
Petitioner contends that jurisdiction is conferred by law and that there is no law expressly vesting on the the HLURB over cases of this nature.
HLUKB exclusive jurisdiction over criminal actions arising from violations of PD 957.
Hence, there is a need for the Court to make a definite ruling on a question of law - the matter of jurisdiction
Respondent's Arguments over the criminal aspect of PD 957.
 Jurisdiction over criminal actionsarising from violations of PD 957 is vested in the regular courts.
Having limited, under Section 38 of PD 957, the grant of power to the former NHA, now HLURB, over the
Jurisdiction is" conferred by law and determined by the material averments in the complaint as well as the imposition of fines to those which do not exceed ten thousand pesos, it is clear that the power in relation to
character of the relief sought.15 The scope and limitation of the jurisdiction of the HLURB are well-defined.'6 criminal liability mentioned in the immediately succeeding provision, to impose, upon conviction, fines above
Its precusor, the National Housing Authority (NHA),17 was vested under PD 957 with exclusive jurisdiction ten thousand pesos and/or imprisonment, was not conferred on it.  Section 39, unlike Section 38,
to regulate the real estate trade and business,18 specifically the registration of subdivision or condominium conspicuously does not state that it is the MIA that may impose the punishment specified therein.
projects and dealers, brokers and salesmen of subdivision lots or condominium units, issuance and suspension
of license to sell; and revocation of registration certificate and license to sell. Its jurisdiction was later Not having been specifically conferred with power to hear and decide cases which are criminal in nature, as
expanded under PD 1344 (1978) to include adjudication of certain cases, to wit: well as to impose penalties therefor, we find that the HLURB has no jurisdiction over criminal actions arising
from violations of PD 957.
Sec. 1. In the exercise of its functions to regulate the real estate trade and business and in addition to its
powers provided for in Presidential Decree No. 957, the National Housing Authority shall have the exclusive On the other hand, BP Big. 129 states
jurisdiction to hear and decide cases of the following nature:
a) Unsound real estate business practices; Sec. 20. Jurisdiction in Criminal Cases. - Regional Trial Courts shall exercise exclusive original jurisdiction in
all criminal cases not within the exclusive jurisdiction of any court, tribunal or body, except those now falling
b) Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against
under the exclusive and concurrent jurisdiction of the Sandiganbayan which shall hereafter be exclusively
the project owner, developer, dealer, broker or salesman; and taken cognizance of by the latter.
c) Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision
lot or condominium unit against the owner, developer, dealer, broker or salesman. (Italics supplied)
Based on the above-quoted provision, it is the RTC that has jurisdiction over criminal cases arising from
It is a settled rule of statutory construction that the express mention of one thing in the law means the violations of PD 957.
exclusion of others not expressly mentioned. This rule is expressed in the familiar maxim expressio unius est
exclusio alterius[19].  Where a statute, by its terms, is expressly limited to certain matters, it may not, by In the present case, the affidavit-complaint alleges the violation of Section 23 oFTD 957 and asks for the
interpretation or construction, be extended to others. The rule proceeds from the premise that the legislature institution of a criminal action against respondent Yap, as President of Primetown.  The Office of the City
would not have made specified enumerations in a statute had the intention been not to restrict its meaning and Prosecutor found probable cause for the filing of an'Information for the subject offense.  The DOJ made no
to confine its terms to statute had the intention been not to restrict its meaning and to confine its terms to those reversal of such finding of probable cause.  Instead, it directed the withdrawal of the information on the
expressly mentioned.[20] Noticeably, cases that are criminal in nature are not mentioned in the enumeration erroneous premise that it is the HLURB which has jurisdiction over the case.  However, as above-discussed,
quoted above.  The primordial function of the HLURB, after all, is the regulation of the real estate trade and and contrary to the resolution of the Secretary of Justice, it is not the HLURB but the RTC that has jurisdiction
business and not the conviction and punishment of criminals.  "It may be conceded that the legislature may to hear the said criminal action.
confer on administrative boards or bodies quasi-judicial powers involving the exercise of judgment and
discretion, as incident to the performance of administrative functions.  But in so doing, the legislature must WHEREFORE, the petition is GRANTED. The assailed October 2, 2002 and January 13, 2003 Orders of the
state its intention in express terms that would leave no doubt, as even such quasi-judicial prerogatives must be Regional Trial Court of Lapu-Lapu City, Branch 54, are REVERSED and SET ASIDE.  The said Court
limited, if they are to be valid, only to those incidental to or in connection with the performance is DIRECTED to proceed with the arraignment of the respondent and to hear the case with dispatch.
of administrative duties, which do not amount to conferment of jurisdiction over a matter exclusively vested in
the courts". SO ORDERED.

Administrative agencies being tribunals of limited jurisdiction can only wield such powers as are specifically
granted to them by their enabling statutes. PD 957 makes the following specific grant of powers to the NHA
(now HLURB) for the imposition of administrative fines, and it also mentions penalties for criminal cases, to
wit

Sec. 38. Administrative Fines.- The Authority may prescribe and impose fines not exceeding ten thousand
pesos for violations of the provisions of this Decree or any rule or regulation thereunder.  Fines shall be
payable to the Authority and enforceable through writs of execution in accordance with the provisions of the
Rules of Court (Italics supplied)

Sec. 39. Penalties.- Any person who shall violate any of the provisions of this Decree and/or any rule or
regulation that may be issued pursuant to this Decree shall, upon conviction, be punished by a fine of not more
than twenty thousand (P20,000.00) pesos and/or imprisonment of not more than ten years: Provided, That in
the case of corporations, partnership, cooperatives, or associations, the President, Manager or Administrator or Family Courts
the person who has charge of the administration of the business shall be criminally responsible for any
violation of this/Decree and/or the rules and regulations promulgated pursuant thereto, Republic Act No. 8369             October 28, 1997
 AN ACT ESTABLISHING FAMILY COURTS, GRANTING THEM EXCLUSIVE ORIGINAL           Acting on the letter of the Chairman of the Committee on Revision of the Rules of Court submitting for
JURISDICTION OVER CHILD AND FAMILY CASES, AMENDING BATAS PAMBANSA BILANG this Court's consideration and approval the Proposed Rule on Declaration of Absolute Nullity of Void
129,AS AMENDED, OTHERWISE KNOWN AS ACT OF 1980, APPROPRIATING FUNDS Marriages and Annulment of Voidable Marriages, the Court Resolved to APPROVE the same.
THEREFOR AND FOR OTHER PURPOSES
Section 5. Jurisdiction offamily Courts. - The Family Courts shall have exclusive original jurisdiction to hear           The Rule shall take effect on March 15, 2003 following its publication in a newspaper of general
and decide the following cases: circulation not later than March 7, 2003
a) Criminal cases where one or more of the accused is below eighteen (18) years of age but not less
          March 4, 2003
than nine (9) years of age but not less than nine (9) years of age or where one or more of the victims
is a minor at the time of the commission of the offense: Provided, That if the minor is found guilty, Davide, C.J. Bellosillo, Puno, Vitug Mendoza, Panganiban, Quisumbing, Sandoval-Gutierrez, Carpio,
the court shall promulgate sentence and ascertain any civil liability which the accused may have Austria-Martinez, Carpio Morales, Callejo, Sr. and Azcuna
incurred. Ynares-Santiago, on leave
The sentence, however, shall be suspended without need of application pursuant to Ptesidential Corona, on official leave
Decree No. 603, otherwise known as the "Child and Youth Welfare Code"; RULE ON DECLARATION OF ABSOLUTE NULLITY OF VOID MARIAGES AND ANNULMENT
b) Petitions for guardianship, custody of children, habeas corpus in relation to the latter; OF VOIDABLE MARRIAGES
c) Petitions for adoption of children and the revocation thereof;
d) Complaints for annulment of marriage, declaration of nullity of marriage and those relating to Section 1. Scope - This Rule shall govern petitions for declaration of absolute nullity of void marriages and
marital status and property relations of husband and wife or those living together under different annulment of voidable marriages under the Family Code of te Philippines.
status and agreements, and petitions for dissolution of conjugal partnership of gains;           The Rules of Court shall apply suppletorily.
e) Petitions for support and/or acknowledgment;
f) Summary judicial proceedings brought under the provisions of Executive Order No. 209, Section 2. Petition for declaration of absolute nullity of void marriages.
otherwise known as the "Family Code of the Philippines";
(a) Who may file. - A petition for declaration of absolute nullity of void marriage may be filed solely
g) Petitions for declaration of status of children as abandoned, dependent o neglected children, by the husband or the wife. (n)
petitions for voluntary or involuntary commitment of children; the suspension, termination, or
restoration of parental authority and other cases cognizable under Presidential Decree No. 603, (b) Where to file. - The petition shal be filed in the Family Court.
Executive Order No. 56, (Series of 1986), and other related laws;
(c) Imprecriptibility ofaction or defense. - An Action or defense for the declaration of absolute
h) Petitions for the constitution of the family home; nullity of void marriage shall not prescribe.
i) Cases against minors cognizable under the Dangerous Drugs Act, as amended;
j) Violations of Republic Act No. 7610, otherwise known as the "Special Protection of Children (d) What to allege. - A petition under Article 36 of Family Code shall specially allege te complete
Against Child Abuse, Exploitation and Discrimination Act," as amended by Republic Act No. 7658; facts showing the either or both parties were psychologically incapacitated from complying with the
and essential marital obligations of marriages at the time of the celebration of marriage even if such
incapacity becomes manifest only after its celebration.
k) Cases of domestic violence against:
1) Women - which are acts of gender based violence that results, or are likely to result in           The complete facts should allege the physical manifestations, if any, as are indicative of psychological
physical, sexual or psychological harm or suffering to women; and other forms of incapacity at the time of the celebration of the marriage but expert opinion need not be alleged.
physical abuse such as battering or threats and coercion which violate a woman's
personhood, integrity and freedom movement; and Section 3. Petition for annulment of voidable marriages. -

2) Children - which include the commission of all forms of abuse, neglect, cruelty, (a) Who may file. - The following persons may file a petition for annulment of voidable marriage
exploitation, violence, and discrimination and all other conditions prejudicial to their based on any of the grounds under article 45 of the Family Code and within the period herein
development. indicated:

If an act constitutes a criminal offense, the accused or batterer shall be subject to criminal proceedings and the (1) The contracting party whose parent, or guardian, or person exercising substitute
corresponding penalties. parental authority did not give his or her consent, within five years after attaining the age
of twenty-one unless, after attaining the age of twenty-one, such party freely cohabitated
If any question involving any of the above matters should arise as an incident in any case pending in the with the other as husband or wife; or the parent, guardian or person having legal charge
regular courts, said incident shall be determined in that court of the contracting party , at any time before such party has reached the age of twenty-one;
A.M. No. 02-11-10-SC             March 4, 2003 (2) The sane spouse who had no knowledge of the other's insanity; or by any relative,
RE: PROPOSED RULE ON DECLARATION OF ABSOLUTE NULLITY OF VOID MARRIAGES guardian, or person having legal charge of the insane, at any time before the death of
AND ANNULMENT OF VOIDABLE MARRIAGES either party; or by the insane spouse during the a lucid interval or after regaining sanity,
RESOLUTION provided that the petitioner , after coming to reason, has not freely cohabited with the
other as husband or wife;
 (3) The injured party whose consent was obtained by fraud, within five years after the           If the petitioner is in a foreign country, the verification and certification against forum
discovery of the fraud, provided that said party, with full knowledge of the facts shopping shall be authenticated by the duly authorized officer of the Philippine embassy or legation,
constituting the fraud, has not freely cohabited with the other as husband or wife; consul general, consul or vice-consul or consular agent in said country.

(4) The injured party whose consent was obtained by force, intimidation, or undue (4) it shall be filed in six copies. The petitioner shall serve a copy of the petition on the Office of the
influence, within five years from the time the force intimidation, or undue influence Solicitor General and the Office of the City or Provincial Prosecutor, within five days from the date
disappeared or ceased, provided that the force, intimidation, or undue influence having of its filing and submit to the court proof of such service within the same period.
disappeared or ceased, said party has not thereafter freely cohabited with the other as
husband or wife;           Failure to comply with any of the preceding requirements may be a ground for immediate
dismissal of the petition.
(5) The injured party where the other spouse is physically incapable of consummating the
marriage with the other and such incapability continues and appears to be incurable, Section 6. Summons. - The service of summons shall be governed by Rule 14 of the Rules of Court and by the
within five years after the celebration of marriage; and following rules:

(6) Te injured party where the other party was afflicted with a sexually-transmissible (1) Where the respondent cannot be located at his given address or his whereabouts are unknown
disease found to be serious and appears to be incurable, within five years after the and cannot be ascertained by diligent inquiry, service of summons may, by leave of court, be
celebration of marriage. effected upon him by publication once a week for two consecutive weeks in a newspaper of general
circulation in the Philippines and in such places as the court may order In addition, a copy of the
(b) Where to file. - The petition shall be filed in the Family Court. summons shall be served on the respondent at his last known address by registered mail or any other
means the court may deem sufficient.
Section 4. Venue. - The Petition shall be filed in the Family Court of the province or city where the petitioner
or the respondent has been residing for at least six months prior to the date of filing. Or in the case of non- (2) The summons to be published shall be contained in an order of the court with the following data:
resident respondent, where he may be found in the Philippines, at the election of the petitioner. (a) title of the case; (b) docket number; (c) nature of the petition; (d) principal grounds of the
petition and the reliefs prayed for; and (e) a directive for the respondent to answer within thirty days
Section 5. Contents and form of petition. - (1) The petition shall allege the complete facts constituting the from the last issue of publication.
cause of action.
Section 7. Motion to dismiss. - No motion to dismiss the petition shall be allowed except on the ground of lack
(2) It shall state the names and ages of the common children of the parties and specify the regime of jurisdiction over the subject matter or over the parties; provided, however, that any other ground that might
governing their property relations, as well as the properties involved. warrant a dismissal of the case may be raised as an affirmative defense in an answer.
          If there is no adequate provision in a written agreement between the parties, the petitioner Section 8. Answer. - (1) The respondent shall file his answer within fifteen days from service of summons, or
may apply for a provisional order for spousal support, the custody and support of common children, within thirty days from the last issue of publication in case of service of summons by publication. The answer
visitation rights, administration of community or conjugal property, and other matters similarly must be verified by the respondent himself and not by counsel or attorney-in-fact.
requiringurgent action.
(2) If the respondent fails to file an answer, the court shall not declare him or her in default.
(3) It must be verified and accompanied celebration of marriage. (b) Where to file.-The petition
shall be filed in the Family Court. (3) Where no answer is filed or if the answer does not tender an issue, the court shall order the
public prosecutor to investigate whether collusion exists between the parties.
Section 4. Venue. - The petition shall be filed in the Family Court of the province or city where the petitioner
or the respondent has been residing for at least six months prior to the date of filing, or in the case of a non- Section 9. Investigation report of public prosecutor. - (1) Within one month after receipt of the court order
resident respondent, where he may be found in the Philippines at the election of the petitioner. mentioned in paragraph (3) of Section 8 above, the public prosecutor shall submit a report to the court stating
whether the parties are in collusion and serve copies thereof on the parties and their respective counsels, if any.
Section 5. Contents and form of petition. - (1) The petition shall allege the complete facts constituting the
cause of action. (2) If the public prosecutor finds that collusion exists, he shall state the on the finding of collusion
within ten days from receipt of a copy of a report The court shall set the report for hearing and If
(2) it shall state the names and ages of the common children of the parties and specify the regime convinced that the parties are in collusion, it shall dismiss the petition.
governing their property relations, as well as the properties involved.
(3) If the public prosecutor reports that no collusion exists, the court shall set the case for pre-trial. It
          If there is no adequate provision in a written agreement between the parties, the petitioner shall be the duty of the public prosecutor to appear for the State at the pre-trial.
may apply for a provisional order for spousal support, custody and support of common children,
visitation rights, administration of community or conjugal property, and other matters similarly Section 10. Social worker. - The court may require a social worker to conduct a case study and submit the
requiring urgent action. corresponding report at least three days before the pre-trial. The court may also require a case study at any
stage of the case whenever necessary.
(3) it must be verified and accompanied by a certification against forum shopping. The verification
and certification must be signed personally by me petitioner. No petition may be filed solely by Section 11. Pre-trial. -
counsel or through an attorney-in-fact.
 (1) Pre-trial mandatory. - A pre-trial is mandatory. On motion or motu proprio, the court shall set (b) In case mediation is not availed of or where it fails, the court shall proceed with the pre-trial
the pre-trial after the last pleading has been served and filed, or upon receipt of the report of the conference, on which occasion it shall consider the advisability of receiving expert testimony and
public prosecutor that no collusion exists between the parties. such other makers as may aid in the prompt disposition of the petition.

(2) Notice of pre-trial. - (a) The notice of pre-trial shall contain: Section 15. Pre-trial order. - {a) The proceedings in the pre-trial shall be recorded. Upon termination of the
pre-trial, the court shall Issue a pre-trial order which shall recite in detail the matters taken up In the
(1) the date of pre-trial conference; and conference, the action taken thereon, the amendments allowed on the pleadings, and except as to the ground of
declaration of nullity or annulment, the agreements or admissions made by the parties on any of the matters
(2) an order directing the parties to file and serve their respective pre-trial considered, including any provisional order that may be necessary or agreed upon by the parties.
briefs in such manner as shall ensure the receipt thereof by the adverse party at
least three days before the date of pre-trial. (b) Should the action proceed to trial, the order shall contain a recital of the following;
(b) The notice shall be served separately on the parties and their respective counsels as (1) Facts undisputed, admitted, and those which need not be proved subject to Section 16
well as on the public prosecutor. It shall be their duty to appear personally at the pre-trial. of this Rule;
(c) Notice of pre-trial shall be sent to the respondent even if he fails to file an answer. In (2) Factual and legal issues to be litigated;
case of summons by publication and the respondent failed to file his answer, notice of
pre-trial shall be sent to respondent at his last known address. (3) Evidence, including objects and documents, that have been marked and will be
presented;
Section 12. Contents of pre-trial brief. - The pre-trial brief shall contain the following:
(4) Names of witnesses who will be presented and their testimonies in the form of
(a) A statement of the willingness of the parties to enter into agreements as may be allowed by law, affidavits; and
indicating the desired terms thereof;
(5) Schedule of the presentation of evidence.
(b) A concise statement of their respective claims together with the applicable laws and authorities;
(c) The pre-trial order shall also contain a directive to the public prosecutor to appear for the State
(c) Admitted facts and proposed stipulations of facts, as well as the disputed factual and legal issues; and take steps to prevent collusion between the parties at any stage of the proceedings and
fabrication or suppression of evidence during the trial on the merits.
(d) All the evidence to be presented, including expert opinion, if any, briefly stating or describing
the nature and purpose thereof; (d) The parlies shall not be allowed to raise issues or present witnesses and evidence other than
those stated in the pre-trial order.
(e) The number and names of the witnesses and their respective affidavits; and
The order shall control the trial of the case, unless modified by the court to prevent manifest
(f) Such other matters as the court may require. injustice.
          Failure to file the pre-trial brief or to comply with its required contents shall have the same effect as (e) The parties shall have five days from receipt of the pre-trial order to propose corrections or
failure to appear at the pre-trial under the succeeding paragraphs. modifications.
Section 13. Effect of failure to appear at the pre-trial. - {a) If the petitioner fails to appear personally, the case Section 16. Prohibited compromise. - The court-shall not allow compromise on prohibited matters, such as the
shall be dismissed unless his counsel or a duly authorized representative appears in court and proves a valid following:
excuse for the non-appearance of the petitioner.
(a) The civil status of persons;
(b) If the respondent has filed his answer but fails to appear, the court shall proceed with the pre-
trial and require the public prosecutor to investigate the non-appearance of the respondent and (b) The validity of a marriage or of a legal separation;
submit within fifteen days thereafter a report to the court stating whether his non-appearance is due
to any collusion between the parties. If there Is no collusion, the court shall require the public (c) Any ground for legal separation;
prosecutor to intervene for the State during the trial on the merits to prevent suppression or
fabrication of evidence. (d) Future support;

Section 14. Pre-trial conference. -At the pre-trial conference, the court: (e) The jurisdiction of courts; and

(a) May refer the issues to a mediator who shall assist the parties in reaching an agreement on (f) Future legitime.
matters not prohibited by law.
Section 17. Trial. - (1) The presiding judge shall personally conduct the trial of the case. No delegation of the
          The mediator shall render a report within one month from referral which, for good reasons, reception of evidence to a commissioner shall be allowed except as to matters involving property relations of
the court may extend for a period not exceeding one month. the spouses.
 (2) The grounds for declaration of absolute nullity or annulment of marriage must be proved. No support of common children and delivery of their presumptive legitimes pursuant to Articles 50 and 51 of the
judgment on the pleadings, summary judgment, or confession of judgment shall be allowed. Family Code unless such matters had been adjudicated in previous judicial proceedings.

(3) The court may order the exclusion from the courtroom of all persons, including members of the Section 22. Issuance of Decree of Declaration of Absolute Nullity or Annulment of Marriage." (a) The court
press, who do not have a direct interest in the case. Such an order may be made if the court shall issue the Decree after;
determines on the record that requiring a party to testify in open court would not enhance the
ascertainment of truth; would cause to the party psychological harm or inability to effectively (1) Registration of the entry of judgment granting the petition for declaration of nullity or
communicate due to embarrassment, fear, or timidity; would violate the right of a party to privacy; annulment of marriage in the Civil Registry where the marriage was celebrated and in the
or would be offensive to decency or public morals. Civil Registry of the place where the Family Court is located;

(4) No copy shall be taken nor any examination or perusal of the records of the case or parts thereof (2) Registration of the approved partition and distribution of the properties of the spouses,
be made by any person other than a party or counsel of a party, except by order of the court. in the proper Register of Deeds where the real properties are located; and

Section 18. Memoranda. - The court may require the parties and the public prosecutor, in consultation with the (3) The delivery of the children's presumptive legitimes in cash, property, or sound
Office of the Solicitor General, to file their respective memoranda support of their claims within fifteen days securities.
from the date the trial is terminated. It may require the Office of the Solicitor General to file its own
memorandum if the case is of significant interest to the State. No other pleadings or papers may be submitted (b) The court shall quote in the Decree the dispositive portion of the judgment entered and attach to
without leave of court. After the lapse of the period herein provided, the case will be considered submitted for the Decree the approved deed of partition.
decision, with or without the memoranda.
          Except in the case of children under Articles 36 and 53 of the Family Code, the court shall order the
Section 19. Decision. - (1) If the court renders a decision granting the petition, it shall declare therein that the Local Civil Registrar to issue an amended birth certificate indicating the new civil status of the children
decree of absolute nullity or decree of annulment shall be issued by the court only after compliance with affected.
Article 50 and 51 of the Family Code as implemented under the Rule on Liquidation, Partition and
Section 23. Registration and publication of the decree; decree as best evidence. - (a) The prevailing party
Distribution of Properties.
shall cause the registration of the Decree in the Civil Registry where the marriage was registered, the Civil
(2) The parties, including the Solicitor General and the public prosecutor, shall be served with Registry of the place where the Family Court is situated, and in the National Census and Statistics Office. He
copies of the decision personally or by registered mail. If the respondent summoned by publication shall report td the court compliance with this requirement within thirty days from receipt of the copy of the
failed to appear in the action, the dispositive part of the decision shall be published once in a Decree.
newspaper of general circulation.
(b) In case service of summons was made by publication, the parties shall cause the publication of
(3) The decision becomes final upon the expiration of fifteen days from notice to the parties. Entry the Decree once in a newspaper of general circulation.
of judgment shall be made if no motion for reconsideration or new trial, or appeal Is filed by any of
(c) The registered Decree shall be the best evidence to prove the declaration of absolute nullity or
the parties the public prosecutor, or the Solicitor General.
annulment of marriage and shall serve as notice to third persons concerning the properties of
(4) Upon the finality of the decision, the court shall forthwith issue the corresponding decree if the petitioner and respondent as well as the properties or presumptive legitimes delivered to their
parties have no properties. common children.

          If the parties have properties, the court shall observe the procedure prescribed in Section 21 of this Rule. Section 24. Effect of death of a party; duty of the Family Court or Appellate Court.  - (a) In case a party dies at
any stage of the proceedings before the entry of judgment, the court shall order the case closed and terminated,
          The entry of judgment shall be registered in the Civil Registry where the marriage was recorded and In without prejudice to the settlement of the estate in proper proceedings in the regular courts.
the Civil Registry where the Family Court'granting the petition for declaration of absolute nullity or annulment
of marriage is located. (b) If the party dies after the entry of judgment of nullity or annulment, the judgment shall be
binding upon the parties and their successors in interest in the settlement of the estate in the regular
Section 20. Appeal. - courts.

(1) Pre-condition. - No appeal from the decision shall be allowed unless the appellant has filed a Section 25. Effectlvity. - This Rule shall take effect on March 15, 2003 following its publication in a
motion for reconsideration or new trial within fifteen days from notice of judgment. newspaper of general circulation not later than March 7, 2003.

(2) Notice of appeal. - An aggrieved party or the Solicitor General may appeal from the decision by
filing a Notice of Appeal within fifteen days from notice of denial of the motion for reconsideration
or new trial. The appellant shall serve a copy of the notice of appeal on the adverse parties. A.M. No. 02-11-11-SC             March 4, 2003
RE: PROPOSED RULE ON LEGAL SEPARATION
Section 21. Liquidation, partition and distribution, custody, support of common children and delivery of their RESOLUTION
presumptive iegltimes. - Upon entry of the judgment granting the petition, or, in case of appeal, upon receipt of
the entry of judgment of the appellate court granting the petition, the Family Court, on motion of either party,           Acting on the letter of the Chairman of the Committee on Revision of the Rules of Court submitting for
shall proceed with the liquidation, partition and distribution of the properties of the spouses, including custody, this Court's consideration and approval the Proposed Rule on Legal Separation, the Court Resolved to
APPROVED the same.
          The Rule shall take effect on March 15, 2003 following its publication in a newspaper of general (4) Be filed in six copies. The petitioner shall, within five days from such filing, furnish a
circulation not later than March 7, 2003 copy of the petition to the City or Provincial Prosecutor and the creditors, if any, and
submit to the court proof of such service within the same period.
          March 4, 2003
          Failure to comply with the preceding requirements may be a ground for immediate
Davide Jr. C.J., Bellosillo, Puno, Vitug, Mendoza, Panganiban, Quisumbing, Sandoval Gutierrez, Carpio, dismissal of the petition.
Austria-Martinez, Carpio-Morales, Callejo, Sr. and Azcuna, JJ.
Ynares-Santiago, on leave, (c) Venue. - The petition shall be filed in the Family Court of the province or city where the
Corona, officially on leave. petitioner or the respondent has been residing for at least six months prior to the date of filing "or in
The case of a non-resident respondent, where he may be found in the Philippines, at the election of
RULE ON LEGAL SEPARATION the petitioner.
Section 1. Scope. - This Rule shall govern petitions for legal separation under the Family Code of the Section 3. Summons. - The service of summons shall be governed by Rule 14 of the Rules of Court and by the
Philippines.The Rules of Court shall apply suppletorily. following rules:
Section 2. Petition. - (a) Who may and when to file. - (1) A petition for legal separation may be filed only by (a) Where the respondent cannot be located at his given address or his whereabouts are unknown
the husband or the wife, as the case may be within five years from the time of the occurrence of any of the and cannot be ascertained by diligent inquiry, service of summons may, by leave of court, be
following causes: effected upon him by publication once a week for two consecutive weeks in a newspaper of general
circulation in the Philippines and in such place as the court may order. In addition, a copy of the
(a) Repeated physical violence or grossly abusive conduct directed against the petitioner, summons shall be served on respondent at his last known address by registered mail or by any other
a common child, or a child of the petitioner; means the court may deem sufficient.
(b) Physical violence or moral pressure to compel the petitioner to change religious or
political affiliation; (b) The summons to be published shall be contained in an order of the court with the following data;
(c) Attempt of respondent to corrupt or induce the petitioner, a common child, or a child (1) title of the case; (2) docket number; (3) nature of the petition; (4) principal grounds of the
petition and the reliefs prayed for, and (5) a directive for respondent to answer within thirty days
of the petitioner, to engage in prostitution, or connivance in such corruption or
from the last issue of publication.
inducement;
(d) Final judgment sentencing the respondent to imprisonment of more than six years, Section 4. Motion to Dismiss. - No motion to dismiss the petition shall be allowed except on the ground of
even if pardoned; lack of jurisdiction over the subject matter or over the parties; provided, however, that any other ground that
(e) Drug addiction or habitual alcoholism of the respondent; might warrant a dismissal of the case may be raised as an affirmative defense in an answer.
(f) Lesbianism or homosexuality of the respondent; Section 5. Answer. - (a) The respondent shall file his answer within fifteen days from receipt of summons, or
(g) Contracting by the respondent of a subsequent bigamous marriage, whether in or within thirty days from the last issue of publication in case of service of summons by publication. The answer
outside the Philippines; must be verified by respondent himself and not by counsel or attorney-in-fact.
(h) Sexual infidelity or perversion of the respondent;
(b) If the respondent fails to file an answer, the court shall not declare him in default.
(i) Attempt on the life of petitioner by the respondent; or
(j) Abandonment of petitioner by respondent without justifiable cause for more than one (c) Where no answer is filed/or if the answer does not tender an issue the court shall order the public
year. prosecutor to investigate whether collusion exists between the parties.
(b) Contents and form. - The petition for legal separation shall:
Section 6. Investigation Report of Public Prosecutor. - (a) Within one one month after receipt of the court
(1) Allege the complete facts constituting the cause of action. order mentioned in paragraph (c) of the preceeding section, the public prosecutor shall submit a report to the
court on whether the parties are in collusion and serve copies on the parties and their respective counsels, if
(2) State the names and ages of the common children of the parties, specify the regime any.
governing their property relations, the properties involved, and creditors, if any. If there is
no adequate provision in a written agreement between the parties, the petitioner may (b) If the public prosecutor finds that collusion exists, he shall state the basis thereof in his report.
apply for a provisional order for spousal support, custody and support of common The parties shall file their respective comments on the finding of collusion within ten days from
children, visitation rights, administration of community or conjugal property, and other receipt of copy of the report. The court shall set the report for hearing and if convinced that parties
similar matters requiring urgent action, are in collusion,-it shall dismiss the petition.

(3) Be verified and accompanied by a certification against forum shopping. The (c) If the public prosecutor reports that no collusion exists, the court shall set the case for pre-trial. It
verification and certification must be personally signed by the petitioner. No petition may shall be the duty of the public prosecutor to appear for the State at the pre-trial.
be filed solely by counsel or through an attorney-in-fact. If the petitioner is in a foreign
country, the verification and certification against forum shopping shall be authenticated Section 7. Social Worker. - The court may require a social worker to conduct a case study and to submit the
by the duly authorized officer of the Philippine embassy or legation, consul general, corresponding report at least three days before the pre-trial. The court may also require a case study at any
consul or vice-consul or consular agent in said country stage of the case whenever necessary,
Section 8. Pre-trial. - (b) Should the action proceed to trial, the order shall contain a recital of the following:

(a) Pre-trial mandatory.-A pre-trial is mandatory. On motion or motu proprio, the court shall set the (1) Facts undisputed, admitted, and those which need not be proved subject to Section 13
pre-trial after the last pleading has been served and filed, or upon receipt of the report of the public of this Rule;
prosecutor that no collusion exists between the parties on a date not earlier than six months from (2) Factual and legal issues to be litigated;
date of the filing of the petition.
(3) Evidence, including objects and documents, that have been marked and will be
(b) Notice of Pre-trial.-(1) The notice of pre-trial shall contain:
(a) the date of pre-trial conference; and presented;
(b) an order directing the parties to file and serve their respective pre-trial (4) Names of witnesses who will be presented and their testimonies in the form of
briefs in such manner as shall ensure the receipt thereof by the adverse party at affidavits; and
least three days before the date of pre-trial. (5) Schedule of the presentation of evidence.
(2) The notice shall be served separately on the parties and their respective counsels as           The pre-trial order shall also contain a directive to the public prosecutor to appear for the
well as on the public prosecutor. It shall be their duty to appear personally at the pre-trial. State and take steps to prevent collusion between the parties at any stage of the proceedings and
(3) Notice of pre-trial shall be sent to the respondent even if he fails to file an answer. In fabrication or suppression of evidence during the trial on the merits.
case of summons by publication and the respondent failed to file his answer, notice of
pre-trial shall be sent to respondent at his last known address. (c) The parties shall not be allowed to raise issues or present witnesses and evidence other than
Section 9. Contents of pre-trial brief. - The pre-trial brief shall contain the following: those stated in the pre-trial order. The order shall control the trial of the case unless modified by the
court to prevent manifest injustice.
(1) A statement of the willingness of the parties to enter into agreements as may be allowed by law,
indicating the desired terms thereof; (d) The parties shall have five days from receipt of the pre-trial order to propose corrections or
(2) A concise statement of their respective claims together with the applicable laws and authorities; modifications.
(3) Admitted facts and proposed stipulations of facts, as well as the disputed factual and legal Section 13. Prohibited compromise. - The court shall not allow compromise on prohibited matters, such as the
issues; following:
(4) All the evidence to be presented, including expert opinion, if any, briefly stating or describing
the nature and purpose thereof; (1) The civil status of persons;
(5) The number and names of the witnesses and their respective affidavits; and (2) The validity of a marriage or of a legal separation;
(6) Such other matters as the court may require. (3) Any ground lor legal separation;
          Failure to file the pre-trial brief or to comply with its required contents shall have the same effect as (4) Future support;
failure to appear at the pre-trial under the succeeding section. (5) The jurisdiction of courts; and
(6) Future legitime.
Section 10. Effect of failure to appear at the pre-trial. - (1) If the petitioner fails to appear personally, the case Section 14. Trial. - (a) The presiding judge shall personally conduct the trial of the case. No delegation of the
shall be dismissed unless his counsel or a duly authorized representative appears in court and proves a valid reception of evidence to a commissioner shall be allowed except as to matters involving property relations of
excuse for the non-appearance of the petitioner. the spouses.
(2) If the respondent filed his answer but fails to appear, the court shall proceed with the pre-trial (b) The grounds for legal separation must be proved. No judgment on the pleadings, summary
and require the public prosecutor to investigate the non-appearance of the respondent and submit judgment, or confession of judgment shall be allowed.
within fifteen days a report to the court stating whether his non-appearance is due to any collusion
between the parties/ If there is no collusion the court shall require the public prosecutor to intervene (c) The court may order the exclusion from the courtroom of all persons, including members of the
for the State during the trial on the.merits to prevent suppression or fabrication of evidence. press, who do not have a direct interest in the case. Such an order may be made if the court
determines on the record othat requiring a party to testify in open court would not enhance the
Section 11. Pre-trial conference. - At the pre-trial conference, the court may refer the issues to a mediator who ascertainment of truth; would cause to the party psychological harm or inability to effectively
shall assist the parties in reaching an agreement on matters not prohibited by law. communicate due to embarrassment, fear, or timidity; would violate the party's right to privacy; or
would be offensive to decency
          The mediator shall render a report within one month from referral which, for good reasons, the court
may extend for a period not exceeding one month. (d) No copy shall be taken nor any examination or perusal of the records of the case or parts thereof
be made by any person other than a party or counsel of a party, except by order of the court.
          In case mediation is not availed of or where it fails, the court shall proceed with the pre-trial conference,
on which occasion it shall consider the advisability of receiving expert testimony and such other matters as Section 15. Memoranda. - The court may require the parties and the public prosecutor to file their respective
may aid in the prompt disposition of the petition. memoranda in support of their claims within fifteen days from the date the trial is terminated. No other
Section 12. Pre-trial order. - (a) The proceedings in the pre-trial shall be recorded. Upon termination of the pleadings or papers may be submitted without leave of court. After the lapse of the period herein provided, the
case will be considered submitted for decision, with or without the memoranda.
pre-trial, the court shall issue a pre-trial order which shall recite in detail the matters taken up in the
conference, the action taken thereon, the amendments allowed on the pleadings, and, except as to the ground Section 16. Decision. - (a) The court shall deny the petition on any of the following grounds:
of legal separation, the agreements or admissions made by the parties on any of the matters considered,
including any provisional order that may be necessary or agreed upon by the parties.
 (1) The aggrieved party has condoned the offense or act complained of or has consented (a) Registration of decree.-The prevailing party shall cause the registration of the Decree in the Civil
to the commission of the offense or act complained of; Registry where the marriage was registered, in the Civil Registry of the place where the Family
(2) There is connivance in the commission of the offense-or act constituting the ground Court is situated, and in the National Census and Statistics Office. He shall report to the court
compliance with this requirement within thirty days iron receipt of the copy of the Decree.
for legal separation;
(3) Both parties have given ground for legal separation; (b) Publication of decree.-- In case service of summons was made by publication, the parties shall
(4) There is collusion between the parties to obtain the decree of legal separation; or cause the publication of the Decree once in a newspaper of general circulation.
(5) The action is barred by prescription.
(b) If the court renders a decision granting the petition, it shall declare therein that the Decree of (c) Best evidence.-The registered Decree shall be the best evidence to prove the legal separation of
the parties and shall serve as notice to third persons concerning the properties of petitioner and
Legal Separation shall be issued by the court only after full compliance with liquidation under the
respondent.
Family Code.
          However, in the absence of any property of.the parties, the court shall forthwith issue a Section 21. Effect of death of a party; duty of the Family Court or Appellate Court.  - (a) In case a party dies at
Decree of Legal Separation which shall be registered in the Civil Registry where the marriage was any stage of me proceedings before the entry of judgment, the court shall order the case closed and terminated
recorded and in the Civil Registry where the Family Court granting the legal separation is located. without prejudice to the settlement of estate proper proceedings in the regular courts.
(c) The decision shall likewise declare that: (b) If the party dies after the entry of judgment, the same shall be binding upon the parties and their
(1) The spouses are entitled to live separately from each other but the marriage bond is successors in interest in the settlement of the estate in the regular courts.
not severed;
(2) The obligation of mutual support between the spouses ceases; and Section 22. Petition for revocation of donations. - (a) Within five (5) years from the date the decision granting
(3) The offending spouse is disqualified from inheriting from the innocent spouse by the petition for legal separation has become final, the innocent spouse may file a petition under oath the same
proceeding for legal separation to revoke the donations in favor of the offending spouse.
intestate succession, and provisions in favor of the offending spouse made in the will of
the innocent spouse are revoked by operation of law. (b)The revocation of the donations shall be recorded in the Register of Deeds of Deeds in the places
(d) The parties, including the Solicitor General and the public prosecutor, shall be served with where the properties are located.
copies of the decision personally or by registered mail. If the respondent summoned by publication
(c)Alienations, liens, and encumbrances registered in good faith. before the recording of the petition
failed to appear in the action, the dispositive part of the decision shall also be published once in a
for revocation in the registries of property shall be respected.
newspaper of general circulation.
Section 17. Appeal. - (d)After the issuance of the Decree of Legal Separation, the innocent spouse may revoke the
designation of the offending spouse as a beneficiary in any insurance policy even if such
(a) Pre-condition. - No appeal from the decision shall be allowed unless the appellant has filed a designation be stipulated as irrevocable. The revocation or change shall take effect upon written
motion for reconsideration or new trial within fifteen days from notice of judgment. notification thereof to the insurer.
(b) Notice of Appeal - An aggrieved party or the Solicitor General may appeal from the decision by
filing a Notice of Appeal within fifteen days from notice of denial of the motion for reconsideration Section 23. Decree of Reconciliation. - (a) If the spouses had reconciled, a joint manifestation under oath, duly
or new trial. The appellant shall serve a copy of the notice of appeal upon the adverse parties. signed by the spouses, may be filed in the same proceeding for legal separation.

Section 18. Liquidation, partition and distribution, custody, and support of minor children. - Upon entry of the (b) If the reconciliation occurred while the proceeding for legal separation is pending, the court shall
judgment granting the petition, or, in case of appeal, upon receipt of the entry of judgment of the appellate immediately issue an order terminating the proceeding.
court granting the petition, the Family Court, on motion of either party, shall proceed with the liquidation,
partition and distribution of the properties of the spouses, including custody and support of common children, (c) If the reconciliation occurred after the rendition of the judgment granting the petition for legal
under the Family Code unless such matters had been adjudicated in previous judicial proceedings. separation but before the issuance of the Decree, the spouses shall express in their manifestation
whether or not they agree to revive the former regime of their property relations or choose a new
Section 19. Issuance of Decree of Legal Separation. - (a) The court shall issue the Decree of Legal Separation regime.
after:
          The court shall immediately issue a Decree of Reconciliation declaring that the legal
(1) registration of the entry of judgment granting the petition tor legal separation in the separation proceeding is set aside and specifying the regime of property relations under which the
Civil Registry where the marriage was celebrated and in the Civil Registry where the spouses shall be covered.
Family Court is located; and (d) If the spouses reconciled after the issuance of the Decree, the court, upon proper motion, shall
(2) registration of the approved partition and distribution of the properties of the spouses, issue a decree of reconciliation declaring therein that the Decree is set aside but the separation of
in the proper Register of Deeds where the real properties are located. property and any forfeiture of the share of the guilty spouse already effected subsists, unless the
(b) The court shall quote in the Decree the dispositive portion of the judgment entered and attach to spouses have agreed to revive their former regime of property relations or adopt a new regime.
the Decree the approved deed of partition.
(e) In case of paragraphs (b), (c), and (d). if the reconciled spouses choose to adopt a regime of
Section 20. Registration and publication of the Decree of Legal Separation; decree as best evidence. - property relations different from that which they had prior to the filing of the petition for legal
separation, the spouses shall comply with Section 24 hereof.
 (f) The decree of reconciliation shall be recorded in the Civil Registries where the marriage and the Davide Jr. C.J., Bellosillo, Puno, Vitug, Mendoza, Panganiban, Quisumbing, Sandoval Gutierrez, Carpio,
Decree had been registered. Austria-Martinez, Carpio-Morales, Callejo, Sr. and Azcuna, JJ.
Ynares-Santiago, on leave,
Section 24. Revival of property regime or adoption of another. - Corona, officially on leave.
(a) In case of reconciliation under Section 23, paragraph (c) above, the parties shall file a verified RULE ON PROVISIONAL ORDERS
motion for revival of regime of property relations or the adoption of another regime of property
relations in the same proceeding for legal separation attaching to said motion their agreement for the Section 1. When Issued, - Upon receipt of a verified petition for declaration of absolute nullity of void
approval of the court. marriage or for annulment of voidable marriage, or for legal separation, and at any time during the proceeding,
the court, motu proprio or upon application under oath of any of the parties, guardian or designated custodian,
(b) The agreement which shall be verified shall specify the following: may issue provisional orders and protection orders with or without a hearing. These orders may be enforced
immediately, with or without a bond, and for such period and under such terms" and conditions as the court
(1) The properties to be contributed to the restored or new regime; may deem necessary.
(2) Those to be retained as separate properties of each spouse; and Section 2. Spousal Support. - In determining support for the spouses, the court may be guided by the following
rules:
(3) The names of all their known creditors, their addresses, and the amounts owing to
each. (a) In the absence of adequate provisions in a written agreement between the spouses, the spouses
may be supported from the properties of the absolute community or the conjugal partnership.
(c) The creditors shall be furnished with copies of the motion and the agreement.
(b) The court may award support to either spouse in such amount and for such period of time as the
(d) The court shall require the spouses to cause the publication of their verified motion for two
court may deem just and reasonable based on their standard of living during the marriage.
consecutive weeks in a newspaper of general circulation.
(c) The court may likewise consider the following factors: (1) whether the spouse seeking support is
(e) After due hearing, and the court decides to grant the motion, it shall issue an order directing the
the custodian of a child whose circumstances make it appropriate for that spouse not to seek outside
parties to record the order in the proper registries of property within thirty days from receipt of a
employment; (2) the time necessary to acquire sufficient education and training to enable the spouse
copy of the order and submit proof of compliance within the same period.
seeking support to find appropriate employment, and that spouse's future earning capacity; (3) the-
Section 25. Effectivity. - This Rule shall take effect on March 15,2003 following its publication in a newspaper duration of the marriage; (4) the comparative financial resources of the spouses, including their
of general circulation not later than March 7, 2003. comparative earning abilities in the labor market; (5) the needs and obligations of each spouse; (6)
the contribution of each spouse to the marriage, including services rendered in home-making, child
care, education, and career building of the other spouse; (7) the age and health of the spouses; (8)
the physical and emotional conditions of the spouses; (9) the ability of the supporting spouse to give
support, taking into account that spouse's earning capacity, earned and unearned income, assets, and
standard of living; and (10) any other factor the court may deem just and equitable.

(d) The Family Court may direct the deduction of the provisional support from the salary of the
spouse.

Section 3. Child Support. - The common children of the spouses shall be supported from the properties of the
absolute community or the conjugal partnership.

          Subject to the sound discretion of the court, either parent or both may be ordered to give an amount
necessary for the support, maintenance, and education of the child. It shall be in proportion to the resources or
means of the giver and to the necessities of the recipient.

          In determining the amount of provisional support, the court may likewise consider the following factors:
(1) the financial resources of the custodial and non-custodial parent and those of the child; (2) the physical and
A.M. No. 02-11-12-SC             March 4, 2003 emotional health of the child and his or her special needs and aptitudes; (3) the standard of living the child has
RE: PROPOSED RULE ON PROVISIONAL ORDERS been accustomed to; (4) the non-monetary contributions that the parents will make toward the care and well-
RESOLUTION being of the child.

          Acting on the letter of the Chairman of the Committee on Revision of the Rules of Court submitting for           The Family Court may direct the deduction of the provisional support from the salary of the parent.
this Court's consideration and approval the Proposed Rule on Provisional Orders, the Court Resolved to
APPROVED the same. Section 4. Child Custody. - In determining the right party or person to whom the custody of the child of the
          The Rule shall take effect on March 15, 2003 following its publication in a newspaper of general parties may be awarded pending the petition, the court shall consider the best interests of the child and shall
circulation not later than March 7, 2003 give paramount consideration to the material and moral welfare of the child.
          March 4, 2003
          The court may likewise consider the following factors: (a) the agreement of the parties; (b) the desire (b) to refrain from harassing, intimidating, or threatening such child or the other parent or any
and ability of each parent to foster an open and loving relationship between the child and the other parent; (c) person to whom custody of the child is awarded;
the child's health, safety, and welfare; (d) any history of child or spousal abase by the person seeking custody (c) to refrain from acts of commission or omission that create an unreasonable risk to the health,
or who has had any filial relationship with the child, including anyone courting the parent; (e) the nature and
safety, or welfare of the child;
frequency of contact with both parents; (f) habitual use of alcohol or regulated substances; (g) marital
misconduct; (h) the most suitable physical, emotional, spiritual, psychological and educational environment; (d) to permit a parent, or a person entitled to visitation by a court order or a separation agreement, to
and (i) the preference of the child, if over seven years of age and of sufficient discernment, unless the parent visit the child at stated periods;
chosen is unfit. (e) to permit a designated party to enter the residence during a specified period of time in order to
take persona! belongings not contested in a proceeding pending with the Family Court;
          The court may award provisional custody in the following order of preference: (1) to both parents (f) to comply with such other orders as are necessary for the protection of the child.
jointly; (2) to either parent taking into account all relevant considerations under the foregoing paragraph,
Section 8. Administration of Common Property. - If a spouse without just cause abandons the other or-fails to
especially the choice of the child over seven years of age, unless the parent chosen is unfit; (3} to the surviving
comply with his or her obligations to the family, the court may, upon application of the aggrieved party under
grandparent, or if there are several of them, to the grandparent chosen by the child over seven years of age and
oath, issue a provisional order appointing the applicant or a third person as receiver or sole administrator of the
of sufficient discernment, unless the grandparent is unfit or disqualified; (4) to the eldest brother or sister over
common property subject to such precautionary conditions it may impose.
twenty-one years of age, unless he or she is unfit or disqualified; (5) to the child's actual custodian over
twenty-one years of age, unless unfit or disqualified; or (6) to any other person deemed by the court suitable to           The receiver or administrator may not dispose of or encumber any common property or specific separate
provide proper care and guidance for the child. property of either spouse without prior authority of the court.
          The custodian temporarily designated by the" court shall give the court and the parents five days notice           The provisional order issued by the court shall be registered in the proper Register of Deeds and
of any plan to change the residence of the child or take him out of his residence for more than three days annotated in all titles of properties subject of the receivership or administration.
provided it does not prejudice the visitation rights of the parents.
Section 9. Effectivity. - This Rule shall take effect on March 15, 2003 following its publication in a newspaper
Section 5. Visitation Rights. - Appropriate visitation rights shall be provided to the parent who is not awarded of general circulation not later than March 7, 2003
provisional custody unless found unfit or disqualified by the court. .
A.M. No. 03-04-04-SC             April 22, 2003
Section 6. Hold Departure Order. - Pending resolution of the petition, no child of the parties shall be brought RE: PROPOSED RULE ON CUSTODY OF MINORS AND WRIT OF HABEAS CORPUS
out of the country without prior order from the court. IN RELATION TO CUSTODY OF MINORS
          The court, motu proprio or upon application under oath, may issue ex-parte a hold departure order,
addressed to the Bureau of Immigration and Deportation, directing it not to allow the departure of the child RESOLUTION
from the Philippines without the permission of the court.

          The Family Court issuing the hold departure order shall furnish the Department of Foreign Affairs and Acting on the letter of the Chairman of the Committee on Revision of the Rules of Court submitting for this
the Bureau of Immigration and Deportation of the Department of Justice a copy of the hold departure order Court’s consideration and approval the Proposed Rule on custody of Minors and Writ of Habeas Corpus in
issued within twenty-four hours from the time of its issuance and through the fastest available means of Relation to Custody of Minors, the Court Resolved to APPROVE the same.
transmittal.
The Rule shall take effect on May 15, 2003 following its publication in a newspaper of general circulation not
          The hold-departure order shall contain the following information: later than April 30, 2003.
(a) the complete name (including the middle name), the date and place of birth, and the place of last
residence of the person against whom a hold-departure order has been issued or whose departure April 22, 2003
from the country has been enjoined;
(b) the complete title and docket number of the case in which the hold departure was issued; Davide, Jr., C.J., Bellosillo, Puno, Vitug, Panganiban, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-
(c) the specific nature of the case; and Martinez, Corona, Carpio-Morales, Callejo, Sr., and Azcuna, JJ., concur.
Quisumbing, J., on official leave.
(d) the date of the hold-departure order.
          If available, a recent photograph of the person against whom a hold-departure order has been issued or
whose departure from the country has been enjoined should also be included. RULE ON CUSTODY OF MINORS AND WRIT OF HABEAS CORPUS
IN RELATION TO CUSTODY OF MINORS
          The court may recall the order. motu proprio or upon verified motion of any of the parties after summary
hearing, subject to such terms and conditions as may be necessary for the best interests of the child. SECTION 1. Applicability. - This rule shall apply to petitions for custody of minors and writs of habeas
Section 7. Order of Protection. - The court may issue an Order of Protection requiring any person: corpus in relation thereto.

(a) to stay away from the home, school, business, or place of employment of the child, other parent The Rules of Court shall apply suppletorily.
or any other party, and to stay away from any other specific place designated by the court;
Section 2. Petition for custody of minors; who may file.- A verified petition for the rightful custody of a (a) A statement of the willingness of the parties to enter into agreements that may be allowed by
minor may be filed by any person claiming such right. The party against whom it may be filed shall be law, indicating its terms;
designated as the respondent.
(b) A concise statement of their respective claims together with the applicable laws and authorities;
Section 3. Where to file petition. - The petition for custody of minors shall be filed with the Family Court of
the province or city where the petitioner resides or where the minor may be found. (c) Admitted facts and proposed stipulations of facts;

Section 4. Contents of petition. - The verified petition shall allege the following:
(d) The disputed factual and legal issues;

(a) The personal circumstances of the petitioner and of the respondent; (e) All the evidence to be presented, briefly stating or describing its nature and purpose;

(b) The name, age and present whereabouts of the minor and his or her relationship to the petitioner
(f) The number and names of the witnesses and their respective affidavits which shall serve as the
and the respondent; affiant's testimony on direct examination; and

(c) The material operative facts constituting deprivation of custody; and

(g) Such other matters as the court may require to be included in the pre-trial brief.

(d) Such other matters which are relevant to the custody of the minor. Failure to file the pre-trial brief or to comply with its required contents shall have the same effect as failure to
appear at the pre-trial.
The verified petition shall be accompanied by a certificate against forum shopping, which the petitioner must
sign personally. Section 11. Effect of failure to appear at the pre-trial.-(a) If the petitioner fails to appear personally at the
pre-trial, the case shall be dismissed, unless his counsel or a duly authorized representative appears in court
Section 5. Summons; personal service on respondent. - If the court is satisfied that the petition is sufficient and proves a valid excuse for the non-appearance of the petitioner.
in form and substance, it shall direct the clerk of court to issue summons, which shall be served together with a
copy of the petition personally on the respondent.
(b) If the respondent has filed his answer but fails to appear at the pre-trial, the petitioner shall be allowed to
present his evidence ex parte. The court shall then render judgment on the basis of the pleadings and the
Section 6. Motion to Dismiss. - A motion to dismiss the petition is not allowed except on the ground of lack of evidence thus presented.
jurisdiction over the subject matter or over the parties. Any other ground that might warrant the dismissal of
the petition may be raised as an affirmative defense in the answer. Section 12. What may be done at pre-trial. - At the pre-trial, the parties may agree on the custody of the
minor. If the parties fail to agree, the court may refer the matter to a mediator who shall have five days to
Section 7. Verified Answer. - The respondent shall file an answer to the petition, personally verified by him, effect an agreement between the parties. If the issue is not settled through mediation, the court shall proceed
within five days after service of summons and a copy of the petition. with the pre-trial conference, on which occasion it shall consider such other matters as may aid in the prompt
disposition of the petition.
Section 8. Case study; duty of social worker. - Upon the filing of the verified answer or the expiration of the
period to file it, the court may order a social worker to make a case study of the minor and the parties and to Section 13. Provisional order awarding custody. - After an answer has been filed or after expiration of the
submit a report and recommendation to the court at least three days before the scheduled pre-trial. period to file it, the court may issue a provisional order awarding custody of the minor. As far as practicable,
the following order of preference shall be observed in the award of custody:
Section 9. Notice of mandatory pre-trial. - Within fifteen days after the filing of the answer or the expiration
of the period to file answer, the court shall issue an order: (1) fixing a date for the pre-trial conference; (2) (a) Both parents jointly;
directing the parties to file and serve their respective pre-trial briefs in such manner as shall ensure receipt
thereof by the adverse party at least three days before the date of pre-trial; and (3) requiring the respondent to
(b) Either parent, taking into account all relevant considerations, especially the choice of the minor
present the minor before the court. over seven years of age and of sufficient discernment, unless the parent chosen is unfit;

The notice of its order shall be served separately on both the parties and their respective counsels. The pre-trial
(c) The grandparent, or if there are several grandparents, the grandparent chosen by the minor over
is mandatory. seven years of age and of sufficient discernment, unless the grandparent chosen is unfit or
disqualified;
Section 10. Contents of pre-trial brief. - The pre-trial brief shall contain the following:
(d) The eldest brother or sister over twenty-one years of age, unless he or she is unfit or disqualified;
 (e) The actual custodian of the minor over twenty-one years of age, unless the former is unfit or Section 16. Hold Departure Order. - The minor child subject of the petition shall not be brought out of the
disqualified; or country without prior order from the court while the petition is pending.

(f) Any other person or institution the court may deem suitable to provide proper care and guidance The court, motu proprio or upon application under oath, may issue ex parte a hold departure order, addressed
for the minor. to the Bureau of Immigration and Deportation, directing it not to allow the departure of the minor from the
Philippines without the permission of the court.
Section 14. Factors to consider in determining custody. - In awarding custody, the court shall consider the
best interests of the minor and shall give paramount consideration to his material and moral welfare. The best The Family Court issuing the hold departure order shall furnish the Department of Foreign Affairs and the
interests of the minor refer to the totality of the circumstances and conditions as are most congenial to the Bureau of Immigration and Deportation of the Department of Justice a copy of the hold departure order within
survival, protection, and feelings of security of the minor encouraging to his physical, psychological and twenty-four hours from its issuance and through the fastest available means of transmittal.
emotional development. It also means the least detrimental available alternative for safeguarding the growth
and development of the minor.
The hold departure order shall contain the following information:

The court shall also consider the following: (a) The complete name (including the middle name), the date and place of birth, the nationality and
the place of last residence of the person against whom a hold departure order has been issued or
(a) Any extrajudicial agreement which the parties may have bound themselves to comply with whose departure from the country has been enjoined;
respecting the rights of the minor to maintain direct contact with the non custodial parent on a
regular basis, except when there is an existing threat or danger of physical, mental, sexual or
(b) The complete title and docket number of the case in which the hold departure order was issued;
emotional violence which endangers the safety and best interests of the minor;

(c) The specific nature of the case;

(b) The desire and ability of one parent to foster an open and loving relationship between the minor
and the other parent;
(d) The date of the hold departure order; and
(c) The health, safety and welfare of the minor;
(e) A recent photograph, if available, of the party against whom a hold departure order has been
issued or whose departure from the country has been enjoined.
(d) Any history of child or spousal abuse by the person seeking custody or who has had any filial
relationship with the minor, including anyone courting the parent;
The court may recall the hold departure order motu proprio, or upon verified motion of any of the parties after
summary hearing, subject to such terms and conditions as may be necessary for the best interests of the minor.
(e) The nature and frequency of contact with both parents;

Section 17. Protection Order. - The court may issue a Protection Order requiring any person:
(f) Habitual use of alcohol, dangerous drugs or regulated substances;

(a) To stay away from the home, school, business, or place of employment of the minor, other
(g) Marital misconduct; parent or any other party, or from any other specific place designated by the court;

(h) The most suitable physical, emotional, spiritual, psychological and educational environment for
(b) To cease and desist from harassing, intimidating, or threatening such minor or the other parent or
the holistic development and growth of the minor; and any person to whom custody of the minor is awarded;

(i) The preference of the minor over seven years of age and of sufficient discernment, unless the
(c) To refrain from acts of commission or omission that create an unreasonable risk to the health,
parent chosen is unfit. safety, or welfare of the minor;

Section 15. Temporary visitation rights. - The court shall provide in its order awarding provisional custody
(d) To permit a parent, or a party entitled to visitation by a court order or a separation agreement, to
appropriate visitation rights to the non-custodial parent or parents, unless the court finds said parent or parents visit the minor at stated periods;
unfit or disqualified.

(e) To permit a designated party to enter the residence during a specified period of time in order to
The temporary custodian shall give the court and non custodial parent or parents at least five days' notice of take personal belongings not contested in a proceeding pending with the Family Court; and
any plan to change the residence of the minor or take him out of his residence for more than three days
provided it does not prejudice the visitation rights of the non-custodial parent or parents.
(f) To comply with such other orders as are necessary for the protection of the minor.
Section 18. Judgment. - After trial, the court shall render judgment awarding the custody of the minor to the Section 22. Effectivity. - This Rule shall take effect on May 15, 2003 following its publication in a newspaper
proper party considering the best interests of the minor. of general circulation not later than April 30, 2003.

If it appears that both parties are unfit to have the care and custody of the minor, the court may designate either Relation to Custody of Minors
the paternal or maternal grandparent of the minor, or his oldest brother or sister, or any reputable person to
take charge of such minor, or commit him to any suitable home for children.

In its judgment, the court may order either or both parents to give an amount necessary for the support,
maintenance and education of the minor, irrespective of who may be its custodian. In determining the amount
of support, the court may consider the following factors: (1) the financial resources of the custodial and non-
custodial parent and those of the minor; (2) the physical and emotional health, special needs, and aptitude of
the minor; (3) the standard of living the minor has been accustomed to; and (4) the non-monetary contributions
that the parents would make toward the care and well-being of the minor.

The court may also issue any order that is just and reasonable permitting the parent who is deprived of the care
and custody of the minor to visit or have temporary custody.

Section 19. Appeal. - No appeal from the decision shall be allowed unless the appellant has filed a motion for
reconsideration or new trial within fifteen days from notice of judgment.

An aggrieved party may appeal from the decision by filing a Notice of Appeal within fifteen days from notice
of the denial of the motion for reconsideration or new trial and serving a copy thereof on the adverse parties.

Section 20. Petition for writ of habeas corpus. - A verified petition for a writ of habeas corpus involving
custody of minors shall be filed with the Family Court. The writ shall be enforceable within its judicial region
to which the Family Court belongs.

However, the petition may be filed with the regular court in the absence of the presiding judge of the Family A.M. No. 03-02-05-SC
Court, provided, however, that the regular court shall refer the case to the Family Court as soon as its presiding [MAY 01, 2003]
judge returns to duty. RE: PROPOSED RULE ON GUARDIANSHIP OF MINORS

The petition may also be filed with the appropriate regular courts in places where there are no Family Courts. Republic of the Philippines 
Supreme Court 
Manila
The writ issued by the Family Court or the regular court shall be enforceable in the judicial region where they A.M. NO. 03-02-05-SC
belong. [MAY 01, 2003]

The petition may likewise be filed with the Supreme Court, Court of Appeals, or with any of its members and, RE: PROPOSED RULE ON GUARDIANSHIP OF MINORS
if so granted, the writ shall be enforceable anywhere in the Philippines. The writ may be made returnable to a RESOLUTION
Family Court or to any regular court within the region where the petitioner resides or where the minor may be Acting on the letter of the Chairman of the Committee on Revision of the Rules of Court submitting
found for hearing and decision on the merits. for this Court’s consideration and approval the Proposed Rule on Guardianship of Minors, the Court Resolved
to APPROVE the same.
Upon return of the writ, the court shall decide the issue on custody of minors. The appellate court, or the The Rule shall take effect on May 1, 2003 following its publication in a newspaper of general
member thereof, issuing the writ shall be furnished a copy of the decision. circulation not later than April 15, 2003. 
April 1, 2003.
Davide, Jr. C.J., Bellosillo, Puno, Vitug, Mendoza, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-
Section 21. Confidentiality of proceedings. - The hearings on custody of minors may, at the discretion of the Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-Moralez,Callejo Sr., Azcuna, JJ., concur
court, be closed to the public and the records of the case shall not be released to non-parties without its    
approval. RULE ON GUARDIANSHIP OF MINORS
Section 1. Applicability of the Rule. – This Rule shall apply to petitions for guardianship over the
person or property, or both, of a minor. 
The father and the mother shall jointly exercise legal guardianship over the person and property of their (h) The name, age and residence of the person for whom letters of guardianship are prayed.
unemancipated common child without the necessity of a court appointment. In such case, this Rule shall be The petition shall be verified and accompanied by a certification against forum shopping. However,
suppletory to the provisions of the Family Code on guardianship. no defect in the petition or verification shall render void the issuance of letters of guardianship.

Sec. 2. Who may petition for appointment of guardian. – On grounds authorized by law, any Sec. 8. Time and notice of hearing. – When a petition for the appointment of a general guardian is
relative or other person on behalf of a minor, or the minor himself if fourteen years of age or over, may filed, the court shall fix a time and place for its hearing, and shall cause reasonable notice to be given to the
petition the Family Court for the appointment of a general guardian over the person or property, or both, of persons mentioned in the petition, including the minor if he is fourteen years of age or over, and may direct
such minor. The petition may also be filed by the Secretary of Social Welfare and Development and by the other general or special notice to be given.
Secretary of Health in the case of an insane minor who needs to be hospitalized. 
Sec. 9. Case study report. – The court shall order a social worker to conduct a case study of the
Sec. 3. Where to file petition. – A petition for guardianship over the person or property, or both, of minor and all the prospective guardians and submit his report and recommendation to the court for its guidance
a minor may be filed in the Family Court of the province or city where the minor actually resides. If he resides before the scheduled hearing. The social worker may intervene on behalf of the minor if he finds that the
in a foreign country, the petition shall be flied with the Family Court of the province or city where his property petition for guardianship should be denied. 
or any part thereof is situated.
Sec. 10. Opposition to petition. – Any interested person may contest the petition by filing a written
Sec. 4. Grounds of petition. - The grounds for the appointment of a guardian over the person or opposition based on such grounds as the majority of the minor or the unsuitability of the person for whom
property, or both, of a minor are the following: letters are prayed, and pray that the petition be denied, or that letters of guardianship issue to himself, or to any
(a) death, continued absence, or incapacity of his parents; suitable person named in the opposition.
(b) suspension, deprivation or termination of parental authority; 
(c) remarriage of his surviving parent, if the latter Is found unsuitable to exercise parental authority; Sec. 11. Hearing and order for letters to issue. – At the hearing of the petition, it must be shown
or that the requirement of notice has been complied with. The prospective ward shall be presented to the court.
(d) when the best interests of the minor so require. The court shall hear the evidence of the parties in support of their respective allegations. If warranted, the court
shall appoint a suitable guardian of the person or property, or both, of the minor. 
Sec. 5. Qualifications of guardians. – In appointing a guardian, the court shall consider the At the discretion of the court, the hearing on guardianship may be closed to the public and the records of the
guardian’s: case shall not be released without its approval.
(a) moral character; 
(b) physical, mental and psychological condition; Sec. 12. When and how a guardian of the property for non-resident minor is appointed;
(c) financial status; notice. – When the minor resides outside the Philippines but has property in the Philippines, any relative or
(d) relationship of trust with the minor;  friend of such minor, or any one interested in his property, in expectancy or otherwise, may petition the Family
(e) availability to exercise the powers and duties of a guardian for the full period of the Court for the appointment of a guardian over the property
guardianship; Notice of hearing of the petition shall be given to the minor by publication or any other means as the court may
(f) lack of conflict of interest with the minor; and deem proper. The court may dispense with the presence of the non-resident minor.
(g) ability to manage the property of the minor. If after hearing the court is satisfied that such non-resident is a minor and a guardian is necessary or
convenient, it may appoint a guardian over his property. 
Sec. 6. Who may be appointed guardian of the person or property, or both, of a minor. – In
default of parents or a court-appointed guardian, the court may appoint a guardian of the person or property, or Sec. 13. Service of final and executory judgment or order. – The final and executory judgment or
both, of a minor, observing as far as practicable, the following order of preference: order shall be served upon the Local Civil Registrar of the municipality or city where the minor resides and the
(a) the surviving grandparent and In case several grandparents survive, the court shall select any of Register of Deeds of the place where his property or part thereof is situated shall annotate the same in the
them taking Into account all relevant considerations; corresponding title, and report to the court his compliance within fifteen days from receipt of the order.
(b) the oldest brother or sister of the minor over twenty-one years of age, unless unfit or
disqualified; Sec. 14. Bond of guardian; amount; conditions. - Before he enters upon the execution of his trust,
(c) the actual custodian of the minor over twenty-one years of age, unless unfit or disqualified; and  or letters of guardianship issue, an appointed guardian may be required to post a bond in such sum as the court
(d) any other person, who in the sound discretion of the court, would serve the best interests of the shall determine and conditioned as follows:
minor. (a)     To make and return to the court, within three months after the issuance of his letters of
Sec. 7. Contents of petition. – A petition for the appointment of a general guardian must allege the guardianship, a true and complete Inventory of all the property, real and personal, of his ward which
following: shall come to his possession or knowledge or to the possession or knowledge of any other person in
(a) The jurisdictional facts; his behalf;
(b)  The name, age and residence of the prospective ward;  (b)     To faithfully execute the duties of his trust, to manage and dispose of the property according
(c)  The ground rendering the appointment necessary or convenient;  to this rule for the best interests of the ward, and to provide for his proper care, custody and
(d) The death of the parents of the minor or the termination, deprivation or suspension of their education;
parental authority; (c)     To render a true and Just account of all the property of the ward in his hands, and of all
(e) The remarriage of the minor’s surviving parent; proceeds or interest derived therefrom, and of the management and disposition of the same, at the
(f) The names, ages, and residences of relatives within the 4th civil degree of the minor, and of time designated by this rule and such other times as the court directs; and at the expiration of his
persons having him in their care and custody; trust, to settle his accounts with the court and deliver and pay over all the property, effects, and
(g) The probable value, character and location of the property of the minor; and 
 monies remaining in his hands, or due from him on such settlement, to the person lawfully entitled of any money, goods or interest, or a written instrument belonging to the ward or his property to
thereto; and appear for examination concerning any thereof and issue such orders as would secure the property
(d)     To perform all orders of the court and such other duties as may be required by law. against such embezzlement, concealment or conveyance.
Sec. 15. Where to file the bond; action thereon. – The bond posted by a guardian shall be filed in
the Family Court and, In case of breach of any of its conditions, the guardian may be prosecuted in the same Sec. 19. Petition to sell or encumber property. - When the income of a property under
proceeding for the benefit of the ward or of any other person legally interested in the property. guardianship is insufficient to maintain and educate the ward, or when it is for his benefit that his personal or
Whenever necessary, the court may require the guardian to post a new bond and may discharge from further real property or any part thereof be sold, mortgaged or otherwise encumbered, and the proceeds invested in
liability the sureties on the old bond after due notice to interested persons, if no injury may result therefrom to safe and productive security, or in the improvement or security of other real property, the guardian may file a
those interested in the property.  verified petition setting forth such facts, and praying that an order issue authorizing the sale or encumbrance of
Sec. 16. Bond of parents as guardians of property of minor. – If the market value of the property or the the property. 
annual Income of the child exceeds P50,000.00, the parent concerned shall furnish a bond In such amount as
the court may determine, but in no case less than ten per centurn of the value of such property or annual Sec. 20. Order to show cause. – If the sale or encumbrance is necessary or would be beneficial to
income, to guarantee the performance of the obligations prescribed for general guardians. the ward, the court shall order his next of kin and all person/s interested in the property to appear at a
A verified petition for approval of the bond shall be flied in the Family Court of the place where the child reasonable time and place therein specified and show cause why the petition should not be granted.
resides or, if the child resides in a foreign country, in the Family Court of the place where the property or any
part thereof is situated. Sec. 21. Hearing on return of order; costs. – At the time and place designated in the order to show
The petition shall be docketed as a summary special proceeding In which all incidents and issues regarding the cause, the court shall hear the allegations and evidence of the petitioner and next of kin, and other persons
performance of the obligations of a general guardian shall be heard and resolved.  interested, together with their witnesses, and grant or deny the petition as the best interests of the ward may
require.
Sec. 17. General duties of guardian. – A guardian shall have the care and custody of the person of
his ward and the management of his property, or only the management of his property. The guardian of the Sec. 22. Contents of order for sale or encumbrance and its duration; bond. – If, after full
property of a nonresident minor shall have the management of all his property within the Philippines. examination, it is necessary, or would be beneficial to the ward, to sell or encumber the property, or some
A guardian shall perform the following duties: portion of it, the court shall order such sale or encumbrance the proceeds of which shall be expended for the
(a) To pay the just debts of the ward out of the personal property and the income of the real property maintenance or the education of the ward, or invested as the circumstances may require. The order shall
of the ward, If the same is sufficient; otherwise, out of the real property of the ward upon obtaining specify the grounds for the sale or encumbrance and may direct that the property ordered sold be disposed of at
an order for its sale or encumbrance; public sale, subject to such conditions as to the time and manner of payment, and security where a part of the
(b) To settle all accounts of his ward, and demand, sue for, receive all debts due him, or may, with payment is deferred. The original bond of the guardian shall stand as security for the proper appropriation of
the approval of the court, compound for the same and give discharges to the debtor on receiving a the proceeds of the sale or encumbrance, but the court may, if deemed expedient, require an additional bond as
fair and just dividend of the property and effects; and to appear for and represent the ward in all a condition for the sale or encumbrance. The authority to sell or encumber shall not extend beyond one year,
actions and special proceedings, unless another person is appointed for that purpose; unless renewed by the court
(c) To manage the property of the ward frugally and without waste, and apply the income and
profits thereon, insofar as may be necessary, to the comfortable and suitable maintenance of the Sec. 23. Court may order investment of proceeds and direct management of property. – The
ward; and if such income and profits be insufficient for that purpose, to sell or encumber the real or court may authorize and require the guardian to invest the proceeds of sales or encumbrances, and any other
personal property, upon being authorized by the court to do so; money of his ward in his hands, in real or personal property, for the best interests of the ward, and may make
(d) To consent to a partition of real or personal property owned by the ward jointly or in common such other orders for the management, investment, and disposition of the property and effects, as
with others upon authority granted by the court after hearing, notice to relatives of the ward, and a circumstances may warrant.
careful investigation as to the necessity and propriety of the proposed action;
(e) To submit to the court a verified inventory of the property of his ward within three months after Sec. 24. Grounds for removal or resignation of guardian. – When a guardian becomes insane or
his appointment, and annually thereafter, the rendition of which may be required upon the otherwise incapable of discharging his trust or is found thereafter to be unsuitable, or has wasted or
application of an interested person;  mismanaged the property of the ward, or has failed to render an account or make a return for thirty days after it
(f) To report to the court any property of the ward not included in the inventory which is discovered, is due, the court may, upon reasonable notice to the guardian, remove him as such and require him to surrender
or succeeded to, or acquired by the ward within three months after such discovery, succession, or the property of the ward to the person found to be lawfully entitled thereto.
acquisition; and The court may allow the guardian to resign for justifiable causes.
(g) To render to the court for its approval an accounting of the property one year from his Upon the removal or resignation of the guardian, the court shall appoint a new oneNo motion for
appointment, and every year thereafter or as often as may be required. removal or resignation shall be granted unless the guardian has submitted the proper accounting of the
property of the ward and the court has approved the same
Sec. 18. Power and duty of the court – The court may: 
(a)  Request the assistance of one or more commissioners in the appraisal of the property of the Sec. 25. Ground for termination of guardianship. – The court motu proprio or upon verified
ward reported in the initial and subsequent inventories; motion of any person allowed to file a petition for guardianship may terminate the guardianship on the ground
(b)  Authorize reimbursement to the guardian, other than a parent, of reasonable expenses incurred that the ward has come of age or has died. The guardian shall notify the court of such fact within ten days of its
in the execution of his trust, and allow payment of compensation for his services as the court may occurrence.
deem just, not exceeding ten per centum of the net income of the ward, if any; otherwise, in such
amount the court determines to be a reasonable compensation for his services; and Sec. 26. Service of final and executory judgment or order. – The final and executory judgment or
(c) Upon complaint of the guardian or ward, or of any person having actual or prospective interest in order shall be served upon the Local Civil Registrar of the municipality or city where the minor resides and the
the property at the ward, require any person suspected of having embezzled, concealed, or disposed Register of Deeds of the province or city where his property or any part thereof is situated. Both the Local
Civil Registrar and’ the Register of Deeds shall enter the final and executory judgment or order in the prove insufficient and no appropriate placement or adoption within the child’s extended family is available
appropriate books in their offices. shall adoption by an unrelated person be considered.
(ii) safeguard the biological parents from making hasty decisions in relinquishing their parental authority over
Sec. 27. Effect of the rule. – This Rule amends Rules 92 to 97 inclusive of the Rules of Court on
their child;
guardianship of minors. Guardianship of incompetents who are not minors shall continue to be under the
jurisdiction of the regular courts and governed by the Rules of Court.  (iii) prevent the child from unnecessary separation from his biological parents;
(iv) conduct public information and educational campaigns to promote a positive environment for adoption;
Sec. 28. Effectivity. -  This Rule shall take effect on May 1, 2003 following its publication in a (v) ensure that government and private sector agencies have the capacity to handle adoption inquiries, process
newspaper of general circulation not later than April 15, 2003. domestic adoption applications and offer adoption-related services including, but not limited to, parent
preparation and post-adoption education and counseling;
(vi) encourage domestic adoption so as to preserve the child’s identity and culture in his native land, and only
when this is not available shall inter-country adoption be considered as a last resort; and
(vii) protect adoptive parents from attempts to disturb their parental authority and custody over their adopted
child.
Any voluntary or involuntary termination of parental authority shall be administratively or judicially declared
so as to establish the status of the child as “legally available for adoption” and his custody transferred to the
Department of Social Welfare and Development or to any duly licensed and accredited child-placing or child-
caring agency, which entity shall be authorized to take steps for the permanent placement of the child.

SEC. 3. Definition of Terms. – For purposes of this Rule:

(a) “Child” is a person below eighteen (18) years of age at the time of the filing of the petition for adoption.
(b) “A child legally available for adoption” refers to a child who has been voluntarily or involuntarily
committed to the Department or to a duly licensed and accredited child-placing or child-caring agency, freed
of the parental authority of his biological parents, or in case of rescission of adoption, his guardian or
adopter(s).
(c) “Voluntarily committed child” is one whose parents knowingly and willingly relinquish parental authority
over him in favor of the Department.
(d) “Involuntarily committed child” is one whose parents, known or unknown, have been permanently and
judicially deprived of parental authority over him due to abandonment; substantial, continuous or repeated
neglect and abuse; or incompetence to discharge parental responsibilities.
(e) “Foundling” refers to a deserted or abandoned infant or child whose parents, guardian or relatives are
A.M. No. 02-6-02-SC unknown; or a child committed to an orphanage or charitable or similar institution with unknown facts of birth
RULE ON ADOPTION and parentage and registered in the Civil Register as a “foundling.”
A. DOMESTIC ADOPTION (f)”Abandoned child” refers to one who has no proper parental care or guardianship or whose parents have
deserted him for a period of at least six (6) continuous months and has been judicially declared as such.
SECTION 1. Applicability of the Rule. – This Rule covers the domestic adoption of Filipino (g) “Dependent child” refers to one who is without a parent, guardian or custodian or one whose parents,
children. guardian or other custodian for good cause desires to be relieved of his care and custody and is dependent
upon the public for support.
SEC. 2. Objectives. – (a) The best interests of the child shall be the paramount consideration in all (h) “Neglected child” is one whose basic needs have been deliberately not attended to or inadequately attended
matters relating to his care, custody and adoption, in accordance with Philippine laws, the United Nations to, physically or emotionally, by his parents or guardian.
(UN) Convention on the Rights of the Child, UN Declaration on Social and Legal Principles Relating to the (i) “Physical neglect” occurs when the child is malnourished, ill-clad and without proper shelter.
Protection and Welfare of Children with Special Reference to Foster Placement and Adoption, Nationally and (j) “Emotional neglect” exists when a child is raped, seduced, maltreated, exploited, overworked or made to
Internationally, and the Hague Convention on the Protection of Children and Cooperation in Respect of Inter- work under conditions not conducive to good health or made to beg in the streets or public places, or placed in
country Adoption. moral danger, or exposed to drugs, alcohol, gambling, prostitution and other vices.
(b) The State shall provide alternative protection and assistance through foster care or adoption for every child (k) “Child-placement agency” refers to an agency duly licensed and accredited by the Department to provide
who is a foundling, neglected, orphaned, or abandoned. To this end, the State shall: comprehensive child welfare services including, but not limited to, receiving applications for adoption,
(i) ensure that every child remains under the care and custody of his parents and is provided with love, care, evaluating the prospective adoptive parents and preparing the adoption home study report.
understanding and security for the full and harmonious development of his personality. Only when such efforts (1) “Child-caring agency” refers to an agency duly licensed and accredited by the Department that provides
24-hour residential care services for abandoned, orphaned, neglected or voluntarily committed children.
(m) “Department” refers to the Department of Social Welfare and Development. (i) a former Filipino citizen who seeks to adopt a relative within the fourth (4) degree of consanguinity or
(n) “Deed of Voluntary Commitment” refers to the written and notarized instrument relinquishing parental affinity; or
authority and committing the child to the care and custody of the Department executed by the child’s (ii) one who seeks to adopt the legitimate child of his Filipino spouse; or
biological parents or in their absence, mental incapacity or death, by the child’s legal guardian, to be witnessed (iii) one who is married to a Filipino citizen and seeks to adopt jointly with his spouse a relative within the
by an authorized representative of the Department after counseling and other services have been made fourth (4th) degree of consanguinity or affinity of the Filipino spouse.
available to encourage the biological parents to keep the child. (3) The guardian with respect to the ward after the termination of the guardianship and clearance of his
(o) “Child Study Report” refers to a study made by the court social worker of the child’s legal status, financial accountabilities.
placement history, psychological, social, spiritual, medical, ethno-cultural background and that of his Husband and wife shall jointly adopt, except in the following cases:
biological family needed in determining the most appropriate placement for him. (i) if one spouse seeks to adopt the legitimate chili of one spouse by the other spouse; or
(p) “Home Study Report” refers to a study made by the court social worker of the motivation and capacity of (ii) if one spouse seeks to adopt his own illegitimate child: Provided, however, That the other spouse has
the prospective adoptive parents to provide a home that meets the needs of a child. signified his consent thereto; or
(q) “Supervised trial custody” refers to the period of time during which a social worker oversees the (iii) if the spouses are legally separated from each other.
adjustment and emotional readiness of both adopters and adoptee in stabilizing their filial relationship. In case husband and wife jointly adopt or one spouse adopts the illegitimate child of the other, joint parental
(r) “Licensed Social Worker” refers to one who possesses a degree in bachelor of science in social work as a authority shall be exercised by the spouses.
minimum educational requirement and who has passed the government licensure examination for social
workers as required by Republic Act No. 4373. SEC. 5. Who may be adopted. – The following may be adopted:
(s) “Simulation of birth” is the tampering of the civil registry to make it appear in the birth records that a
certain child was born to a person who is not his biological mother, thus causing such child to lose his true (1)    Any person below eighteen (18) years of age who has been voluntarily committed to the Department
identity and status. under Articles 154, 155 and 156 of P.D. No. 603 or judicially declared available for adoption;
(t) “Biological Parents” refer to the child’s mother and father by nature. (2) The legitimate child of one spouse, by the other spouse;
(u) “Pre-Adoption Services” refer to psycho-social services provided by professionally-trained social workers (3) An illegitimate child, by a qualified adopter to raise the status of the former to that of legitimacy;
of the Department, the social services units of local governments, private and government health facilities, (4) A person of legal age regardless of civil status, if, prior to the adoption, said person has been consistently
Family Courts, licensed and accredited child-caring and child-placement agencies and other individuals or considered and treated by the adopters as their own child since minority;
entities involved in adoption as authorized by the Department. (5) A child whose adoption has been previously rescinded; or
(v) “Residence” means a person’s actual stay in the Philippines for three (3) continuous years immediately (6) A child whose biological or adoptive parents have died: Provided, That no proceedings shall be initiated
prior to the filing of a petition for adoption and which is maintained until the adoption decree is entered. within six (6) months from the time of death of said parents.
Temporary absences for professional, business, health, or emergency reasons not exceeding sixty (60) days in (7) A child not otherwise disqualified by law or these rules.
one (1) year does not break the continuity requirement.
(w) “Alien” refers to any person, not a Filipino citizen, who enters and remains in the Philippines and is in
SEC. 6. Venue. – The petition for adoption shall be filed with the Family Court of the province or
possession of a valid passport or travel documents and visa.
city where the prospective adoptive parents reside.

SEC. 4. Who may adopt. – The following may adopt: SEC. 7. Contents of the Petition. – The petition shall be verified and specifically state at the
heading of the initiatory pleading whether the petition contains an application for change of name, rectification
(1) Any Filipino citizen of legal age, in possession of full civil capacity and legal rights, of good moral of simulated birth, voluntary or involuntary commitment of children, or declaration of child as abandoned,
character, has not been convicted of any crime involving moral turpitude; who is emotionally and dependent or neglected.
psychologically capable of caring for children, at least sixteen (16) years older than the adoptee, and who is in
a position to support and care for his children in keeping with the means of the family. The requirement of a 1) If the adopter is a Filipino citizen, the petition shall allege the following:
16-year difference between the age of the adopter and adoptee may be waived when the adopter is the (a) The jurisdictional facts;
biological parent of the adoptee or is the spouse of the adoptee’s parent; (b) That the petitioner is of legal age, in possession of full civil capacity and legal rights; is of good
(2) Any alien possessing the same qualifications as above-stated for Filipino nationals: Provided, That his moral character; has not been convicted of any crime involving moral turpitude; is emotionally and
country has diplomatic relations with the Republic of the Philippines, that he. has been living in the psychologically capable of caring for children; is at least sixteen (16) years older than the adoptee,
Philippines for at least three (3) continuous years prior to the filing of the petition’ for adoption and maintains unless the adopter is the biological parent of the adoptee or is the spouse of the adoptee’s parent;
such residence until the adoption decree is entered, that he has been certified by his diplomatic or consular and is in a position to support and care for his children in keeping with the means of the family and
office or any appropriate government agency to have the legal capacity to adopt in his country, and that his has undergone pre-adoption services as required by Section 4 of Republic Act No. 8552.
government allows the adoptee to enter his country as his adopted child. Provided, further, That the 2)     If the adopter is an alien, the petition shall allege the following:
requirements on residency and certification of the alien’s qualification to adopt in his country may be waived (a) The jurisdictional facts;
for the following: (b) Sub-paragraph 1(b) above;
(c) That his country has diplomatic relations with the Republic of the Philippines;
 (d) That he has been certified by his diplomatic or consular office or any appropriate government (a) The facts showing that the child is a foundling, abandoned, dependent or neglected;
agency to have the legal capacity to adopt in his country and his government allows the adoptee to (b) The names of the parents, if known, and their residence. If the child has no known or living parents, then
enter his country as his adopted child and reside there permanently as an adopted child; and the name and residence of the guardian, if any;
(e) That he has been living in the Philippines for at least three (3) continuous years prior to the filing (c) The name of the duly licensed child-placement agency or individual under whose care the child is in
of the petition and he maintains such residence until the adoption decree is entered. custody; and
The requirements of certification of the alien’s qualification to adopt in his country and of residency (d) That the Department, child-placement or child-caring agency is authorized to give its consent.
may be waived if the alien:
(i) is a former Filipino citizen who seeks to adopt a relative within the fourth degree of SEC. 10. Change of name. – In case the petition also prays for change of name, the title or caption
consanguinity or affinity; or must contain:
(ii) seeks to adopt the legitimate child of his Filipino spouse;
or (a) The registered name of the child;
(iii)    is married to a Filipino citizen and seeks to adopt jointly with his spouse a relative (b) Aliases or other names by which the child has been known; and
within the fourth degree of consanguinity or affinity of the Filipino spouse. (c) The full name by which the child is to be known.
3) If the adopter is the legal guardian of the adoptee, the petition shall allege that guardianship had been
terminated and the guardian had cleared his financial accountabilities. SEC. 11. Annexes to the Petition. – The following documents shall be attached to the petition:
4) If the adopter is married, the spouse shall be a co-petitioner for joint adoption except if:
(a) one spouse seeks to adopt the legitimate child of the other, or A. Birth, baptismal or foundling certificate, as the case may be, and school records showing the
(b) if one spouse seeks to adopt his own illegitimate child and the other spouse signified written name, age and residence of the adoptee;
consent thereto, or
(c) if the spouses are legally separated from each other. B. Affidavit of consent of the following:
5) If the adoptee is a foundling, the petition shall allege the entries which should appear in his birth certificate,
such as name of child, date of birth, place of birth, if known; sex, name and citizenship of adoptive mother and 1. The adoptee, if ten (10) years of age or over;
father, and the date and place of their marriage. 2. The biological parents of the child, if known, or the legal guardian, or the child-placement agency,
6) If the petition prays for a change of name, it shall also state the cause or reason for the change of name. child-caring agency, or the proper government instrumentality which has legal custody of the child;
In all petitions, it shall be alleged: 3. The legitimate and adopted children of the adopter and of the adoptee, if any, who are ten (10) years
(a) The first name, surname or names, age and residence of the adoptee as shown by his record of of age or over;
birth, baptismal or foundling certificate and school records. 4. The illegitimate children of the adopter living with him who are ten (10) years of age or over; and
5. The spouse, if any, of the adopter or adoptee.
(b) That the adoptee is not disqualified by law to be adopted.
(c) The probable value and character of the estate of the adoptee.
(d) The first name, surname or names by which the adoptee is to be known and registered in the C. Child study report on the adoptee and his biological parents;
Civil Registry.
A certification of non-forum shopping shall be included pursuant to Section 5, Rule 7 of the 1997 D. If the petitioner is an alien, certification by his diplomatic or consular office or any appropriate government
Rules of Civil Procedure. agency that he has the legal capacity to adopt in his country and that his government allows the adoptee
to enter his country as his own adopted child unless exempted under Section 4(2);
E. Home study report on the adopters. If the adopter is an alien or residing abroad but qualified to adopt, the
Sec. 8. Rectification of Simulated Birth. – In case the petition also seeks rectification of a home study report by a foreign adoption agency duly accredited by the Inter-Country Adoption Board; and
simulated of birth, it shall allege that: F. Decree of annulment, nullity or legal separation of the adopter as well as that of the biological parents of the
adoptee, if any.
(a) Petitioner is applying for rectification of a simulated birth;
(b) The simulation of birth was made prior to the date of effectivity of Republic Act No. 8552 and the SEC. 12. Order of Hearing. – If the petition and attachments are sufficient in form and substance,
application for rectification of the birth registration and the petition for adoption were filed within five years the court shall issue an order which shall contain the following:
from said date;
(c) The petitioner made the simulation of birth for the best interests of the adoptee; and (1) the registered name of the adoptee in the birth certificate and the names by which the adoptee has been
(d) The adoptee has been consistently considered and treated by petitioner as his own child. known which shall be stated in the caption;
(2) the purpose of the petition;
SEC. 9. Adoption of a foundling, an abandoned, dependent or neglected child. – In case the (3) the complete name which the adoptee will use if the petition is granted;
adoptee is a foundling, an abandoned, dependent or neglected child, the petition shall allege: (4) the date and place of hearing which shall be set within six (6) months from the date of the issuance of the
order and shall direct that a copy thereof be published before the date of hearing at least once a week for three
successive weeks in a newspaper of general circulation in the province or city where the court is
situated; Provided, that in case of application for change of name, the date set for hearing shall not be within The court may, motu propria or upon motion of any party, reduce the period or exempt the parties if it finds
four (4) months after the last publication of the notice nor within thirty (30) days prior to an election. that the same shall be for the best interests of the adoptee, stating the reasons therefor.
The newspaper shall be selected by raffle under the supervision of the Executive Judge.
(5) a directive to the social worker of the court, the social service office of the local government unit or any An alien adopter however must complete the 6-month trial custody except the following:
child-placing or child-caring agency, or the Department to prepare and submit child and home study reports
before the hearing if such reports had not been attached to the petition due to unavailability at the time of the a) a former Filipino citizen who seeks to adopt a relative within the fourth (4th) degree of
filing of the latter; and consanguinity or affinity; or
(6) a directive to the social worker of the court to conduct counseling sessions with the biological parents on b) one who seeks to adopt the legitimate child of his Filipino spouse; or
the matter of adoption of the adoptee and submit her report before the date of hearing. c) one who is married to a Filipino citizen and seeks to adopt jointly with his or her spouse the
latter’s relative within the fourth (4th) degree of consanguinity or affinity.
At the discretion of the court, copies of the order of hearing shall also be furnished the Office of the Solicitor
General through the provincial or city prosecutor, the Department and the biological parents of the adoptee, if
known. If the child is below seven (7) years of age and is placed with the prospective adopter through a pre-adoption
placement authority issued by the Department, the court shall order that the prospective adopter shall enjoy all
If a change in the name of the adoptee is prayed for in the petition, notice to the Solicitor General shall be
the benefits to which the biological parent is entitled from the date the adoptee is placed with him.
mandatory.

The social worker shall submit to the court a report on the result of the trial custody within two weeks after its
SEC. 13. Child and Home Study Reports. – In preparing the child study report on the adoptee, the termination.
concerned social worker shall verify with the Civil Registry the real identity and registered name of the
adoptee. If the birth of the adoptee was not registered with the Civil Registry, it shall be the responsibility of
the social worker to register the adoptee and secure a certificate of foundling or late registration, as the case SEC. 16. Decree of Adoption. – If the supervised trial custody is satisfactory to the parties and the
may be. court is convinced from the trial custody report and the evidence adduced that the adoption shall redound to
the best interests of the adoptee, a decree of adoption shall be issued which shall take effect as of the date the
original petition was filed even if the petitioners die before its issuance.
The social worker shall establish that the child is legally available for adoption and the documents in support
thereof are valid and authentic, that the adopter has sincere intentions and that the adoption shall inure to the
best interests of the child. The decree shall:
A. State the name by which the child is to be known and registered;
B. Order:
In case the adopter is an alien, the home study report must show the legal capacity to adopt and that his
government allows the adoptee to enter his country as his adopted child in the absence of the certification 1) the Clerk of Court to issue to the adopter a certificate of finality upon expiration of the 15-day reglementary
required under Section 7(b) of Republic Act No. 8552. period within which to appeal;
2) the adopter to submit a certified true copy of the decree of adoption and the certificate of finality to the Civil
If after the conduct of the case studies, the social worker finds that there are grounds to deny the petition, he Registrar where the child was originally registered within thirty (30) days from receipt of the certificate of
shall make the proper recommendation to the court, furnishing a copy thereof to the petitioner. finality. In case of change of name, the decree shall be submitted to the Civil Registrar where the court issuing
the same is situated.
SEC. 14. Hearing. – Upon satisfactory proof that the order of hearing has been published and 3) the Civil Registrar of the place where the adoptee was registered:
jurisdictional requirements have been complied with, the court shall proceed to hear the petition. The a. to annotate on the adoptee’s original certificate of birth the decree of adoption within thirty (30) days from
petitioner and the adoptee must personally appear and the former must testify before the presiding judge of the receipt of, the certificate of finality;
court on the date set for hearing. b. to issue a certificate of birth which shall not bear any notation that it is a new or amended certificate and
which shall show, among others, the following: registry number, date of registration, name of child, sex, date
The court shall verify from the social worker and determine whether the biological parent has been properly of birth, place of birth, name and citizenship of adoptive mother and father, and the date and place of their
counseled against making hasty decisions caused by strain or anxiety to give up the child; ensure that all marriage, when applicable;
measures to strengthen the family have been exhausted; and ascertain if any prolonged stay of the child in his c. to seal the original certificate of birth in the civil registry records which can be opened only upon order of
own home will be inimical to his welfare and interest.
the court which issued the decree of adoption; and
d. to submit to the court issuing the decree of adoption proof of compliance with all the foregoing within thirty
SEC. 15. Supervised Trial Custody. – Before issuance of the decree of adoption, the court shall days from receipt of the decree. If the adoptee is a foundling, the court shall order the Civil Registrar where the
give the adopter trial custody of the adoptee for a period of at least six (6) months within which the parties are
foundling was registered, to annotate the decree of adoption on the foundling certificate and a new birth
expected to adjust psychologically and emotionally to each other and establish a bonding relationship. The trial
custody shall be monitored by the social worker of the court, the Department, or the social service of the local certificate shall be ordered prepared by the Civil Registrar in accordance with the decree.
government unit, or the child-placement or child-caring agency which submitted and prepared the case studies.
During said period, temporary parental authority shall be vested in the adopter. SEC. 17. Book of Adoptions. – The Clerk of Court shall keep a book of adoptions showing the date
of issuance of the decree in each case, compliance by the Civil Registrar with Section 16(B)(3) and all
incidents arising after the issuance of the decree.
 SEC. 18. Confidential Nature of Proceedings and Records. – All hearings in adoption cases, SEC. 24. Service of Judgment. – A certified true copy of the judgment together with a certificate of
after .compliance with the jurisdictional requirements shall be confidential and shall not be open to the public. finality issued by the Branch Clerk of the Court which rendered the decision in accordance with the preceding
All records, books and papers relating to the adoption cases in the files of the court, the Department, or any Section shall be served by the petitioner upon the Civil Registrar concerned within thirty (30) days from
other agency or institution participating in the adoption proceedings shall be kept strictly confidential. receipt of the certificate of finality. The Civil Registrar shall forthwith enter the rescission decree in the
register and submit proof of compliance to the court issuing the decree and the Clerk of Court within thirty
(30) days from receipt of the decree.
If the court finds that the disclosure of the information to a third person is necessary for security reasons or for
purposes connected with or arising out of the adoption and will be for the best interests of the adoptee, the
court may, upon proper motion, order the necessary information to be released, restricting the purposes for The Clerk of Court shall enter the compliance in accordance with Section 17 hereof.
which it may be used.
SEC. 25. Repeal. – This supersedes Rule 99 on Adoption and Rule 100 of the Rules of Court.
SEC. 19. Rescission of Adoption of the Adoptee. – The petition shall be verified and filed by the
adoptee who is over eighteen (18) years of age, or with the assistance of the Department, if he is a minor, or if
B. INTER-COUNTRY ADOPTION
he is over eighteen (18) years of age but is incapacitated, by his guardian or counsel.

SEC. 26. Applicability. – The following sections apply to i adoption of Filipino children by foreign
The adoption may be rescinded based on any of the following grounds committed by the adopter:
nationals and Filipino citizens permanently residing abroad.

1) repeated physical and verbal maltreatment by the adopter despite having undergone counseling; SEC. 27. Objectives. – The State shall:
2) attempt on the life of the adoptee;
3) sexual assault or violence; or
4) abandonment or failure to comply with parental obligations. Adoption, being in the best interests of the a) consider inter-country adoption as an alternative means of child care, if the child cannot be placed in a foster
child, shall not be subject to or an adoptive family or cannot, in any suitable manner, be cared for in the Philippines;
rescission by the adopter. However, the adopter may disinherit the adoptee for causes provided in Article 919 b) ensure that the child subject of inter-country adoption enjoys the same protection accorded to children in
of the Civil Code. domestic adoption; and
c) take all measures to ensure that the placement arising therefrom does not result in improper financial gain
for those involved.
SEC. 20. Venue. – The petition shall be filed with the Family Court of the city or province where
the adoptee resides. SEC. 28. Where to File Petition. – A verified petition to adopt a Filipino child may be filed by a
foreign national or Filipino citizen permanently residing abroad with the Family Court having jurisdiction over
SEC. 21. Time within which to file petition. – The adoptee, if incapacitated, must file the petition the place where the child resides or may be found.
for rescission or revocation of adoption within five (5) years after he reaches the age of majority, or if he was
incompetent at the time of the adoption, within five (5) years after recovery from such incompetency.
It may be filed directly with the Inter-Country Adoption Board

SEC. 22. Order to Answer. – The court shall issue an order requiring the adverse party to answer SEC. 29. Who may be adopted. – Only a child legally available for domestic adoption may be the
the petition within fifteen (15) days from receipt of a copy thereof. The order and copy of the petition shall be
subject of inter-country adoption.
served on the adverse party in such manner as the court may direct.

SEC. 30. Contents of Petition. – The petitioner must allege:

SEC. 23. Judgment. ~ If the court finds that the allegations of the petition are true, it shall render
judgment ordering the rescission of adoption, with or without costs, as justice requires.
a) his age and the age of the child to be adopted, showing that he is at least twenty-seven (27) years
of age and at least sixteen (16) years older than the child to be adopted at the time of application,
The court shall order that the parental authority of the biological parent of the adoptee, if known, or the legal
unless the petitioner is the parent by nature of the child to be adopted or the spouse of such parent,
custody of the Department shall be restored if the adoptee is still a minor or incapacitated and declare that the in which case the age difference does not apply;
reciprocal rights and obligations of the adopter and the adoptee to each other shall be extinguished.
b) if married, the name of the spouse who must be joined as co-petitioner except when the adoptee
is a legitimate child of his spouse;
The court shall further declare that successional rights shall revert to its status prior to adoption, as of the date c) that he has the capacity to act and assume all rights and responsibilities of parental authority
of judgment of judicial rescission. Vested rights acquired prior to judicial rescission shall be respected. under his national laws, and has undergone the appropriate counseling from an accredited counselor
in his country;
d) that he has not been convicted of a crime involving moral turpitude;
It shall also order the adoptee to use the name stated in his original birth or foundling certificate.
e) that he is eligible to adopt under his national law;
f) that he can provide the proper care and support and instill the necessary moral values and
The court shall further order the Civil Registrar where the adoption decree was registered to cancel the new example to all his children, including the child to be adopted;
birth certificate of the adoptee and reinstate his original birth or foundling certificate.
 g) that he agrees to uphold the basic rights of the child, as embodied under Philippine laws and the The petition shall attach the proposed deed, if any, embodying the transaction, and, if none, shall
U. N. Convention on the Rights of the Child, and to abide by the rules and regulations issued to describe in detail the said transaction and state the reason why the required consent thereto cannot be secured.
implement the provisions of Republic Act No. 8043; In any case, the final deed duly executed by the parties shall be submitted to and approved by the court. (n)
h) that he comes from a country with which the Philippines has diplomatic relations and whose
government maintains a similarly authorized and accredited agency and that adoption of a Filipino Art. 240. Claims for damages by either spouse, except costs of the proceedings, may be litigated
child is allowed under his national laws; and only in a separate action. (n)
i) that he possesses all the qualifications and none of the disqualifications provided in this Rule, in
Republic Act No. 8043 and in all other applicable Philippine laws. Art. 241. Jurisdiction over the petition shall, upon proof of notice to the other spouse, be exercised
by the proper court authorized to hear family cases, if one exists, or in the regional trial court or its equivalent
SEC. 31. Annexes. – The petition for adoption shall contain the following annexes written and officially sitting in the place where either of the spouses resides. (n)
translated in English:
Art. 242. Upon the filing of the petition, the court shall notify the other spouse, whose consent to
the transaction is required, of said petition, ordering said spouse to show cause why the petition should not be
a) Birth certificate of petitioner; granted, on or before the date set in said notice for the initial conference. The notice shall be accompanied by a
b) Marriage contract, if married, and, if applicable, the divorce decree, or judgment dissolving the
copy of the petition and shall be served at the last known address of the spouse concerned. (n)
marriage;
c) Sworn statement of consent of petitioner’s biological or adopted children above ten (10) years of Art. 243. A preliminary conference shall be conducted by the judge personally without the parties
age; being assisted by counsel. After the initial conference, if the court deems it useful, the parties may be assisted
d) Physical, medical and psychological evaluation of the petitioner certified by a duly licensed
by counsel at the succeeding conferences and hearings. (n)
physician and psychologist;
e) Income tax returns or any authentic document showing the current financial capability of the Art. 244. In case of non-appearance of the spouse whose consent is sought, the court shall inquire
petitioner;
into the reasons for his failure to appear, and shall require such appearance, if possible. (n)
f) Police clearance of petitioner issued within six (6) months before the filing of the petitioner;
g) Character reference from the local church/minister, the petitioner’s employer and a member of Art. 245. If, despite all efforts, the attendance of the non-consenting spouse is not secured, the court
the immediate community who have known the petitioner for at least five (5) years;
may proceed ex parte and render judgment as the facts and circumstances may warrant. In any case, the judge
h) Full body postcard-size pictures of the petitioner and his immediate family taken at least six (6)
shall endeavor to protect the interests of the non-appearing spouse. (n)
months before the filing of the petition.
Art. 246. If the petition is not resolved at the initial conference, said petition shall be decided in a
SEC. 32. Duty of Court. – The court, after finding that the petition is sufficient in form and substance and a summary hearing on the basis of affidavits, documentary evidence or oral testimonies at the sound discretion
proper case for inter-country adoption, shall immediately transmit the petition to the Inter-Country Adoption of the court. If testimony is needed, the court shall specify the witnesses to be heard and the subject-matter of
Board for appropriate action. their testimonies, directing the parties to present said witnesses. (n)

SEC. 33. Effectivity. – This Rule shall take effect on August 22, 2002 following its publication in a Art. 247. The judgment of the court shall be immediately final and executory. (n)
newspaper of general circulation.
Art. 248. The petition for judicial authority to administer or encumber specific separate property of
the abandoning spouse and to use the fruits or proceeds thereof for the support of the family shall also be
TITLE XI governed by these rules. (n)
SUMMARY JUDICIAL PROCEEDINGS IN THE FAMILY LAW Chapter 3. Incidents Involving Parental Authority
Chapter 1. Prefatory Provisions Art. 249. Petitions filed under Articles 223, 225 and 235 of this Code involving parental authority
shall be verified. (n)
Art. 238. Until modified by the Supreme Court, the procedural rules provided for in this Title shall
apply as regards separation in fact between husband and wife, abandonment by one of the other, and incidents Art. 250. Such petitions shall be verified and filed in the proper court of the place where the child
involving parental authority. (n) resides. (n)
Chapter 2. Separation in Fact Art. 251. Upon the filing of the petition, the court shall notify the parents or, in their absence or
incapacity, the individuals, entities or institutions exercising parental authority over the child. (n)
Art. 239. When a husband and wife are separated in fact, or one has abandoned the other and one of
them seeks judicial authorization for a transaction where the consent of the other spouse is required by law but Art. 252. The rules in Chapter 2 hereof shall also govern summary proceedings under this Chapter
such consent is withheld or cannot be obtained, a verified petition may be filed in court alleging the foregoing insofar as they are applicable
facts.

Chapter 4 on Art. 41 (declaration of a spouse as presumptively dead),

 Art. 41. A marriage contracted by any person during subsistence of a previous marriage shall be In the event that one spouse is incapacitated or otherwise unable to participate in the administration
null and void, unless before the celebration of the subsequent marriage, the prior spouse had been absent for of the common properties, the other spouse may assume sole powers of administration. These powers do not
four consecutive years and the spouse present has a well-founded belief that the absent spouse was already include disposition or encumbrance without authority of the court or the written consent of the other spouse. In
dead. In case of disappearance where there is danger of death under the circumstances set forth in the the absence of such authority or consent, the disposition or encumbrance shall be void. However, the
provisions of Article 391 of the Civil Code, an absence of only two years shall be sufficient. transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person,
and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the
For the purpose of contracting the subsequent marriage under the preceding paragraph the spouse court before the offer is withdrawn by either or both offerors. (206a)
present must institute a summary proceeding as provided in this Code for the declaration of presumptive death
of the absentee, without prejudice to the effect of reappearance of the absent spouse. Art. 124. The administration and enjoyment of the conjugal partnership shall belong to both spouses
jointly. In case of disagreement, the husband’s decision shall prevail, subject to recourse to the court by the
Art. 51 (action of a child for presumptive legitime), wife for proper remedy, which must be availed of within five years from the date of the contract implementing
such decision.
Art. 51. In said partition, the value of the presumptive legitimes of all common children, computed
as of the date of the final judgment of the trial court, shall be delivered in cash, property or sound securities, In the event that one spouse is incapacitated or otherwise unable to participate in the administration
unless the parties, by mutual agreement judicially approved, had already provided for such matters. of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not
include disposition or encumbrance without authority of the court or the written consent of the other spouse. In
The children or their guardian or the trustee of their property may ask for the enforcement of the the absence of such authority or consent, the disposition or encumbrance shall be void. However, the
judgment. transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person,
and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the
The delivery of the presumptive legitimes herein prescribed shall in no way prejudice the ultimate
court before the offer is withdrawn by either or both offerors. 
successional rights of the children accruing upon the death of either of both of the parents; but the value of the
properties already received under the decree of annulment or absolute nullity shall be considered as advances Art. 217. In case of foundlings, abandoned neglected or abused children and other children
on their legitime. 
similarly situated, parental authority shall be entrusted in summary judicial proceedings to heads of children’s
Art. 69 (judicial declaration of family domicile in case of disagreement of the spouses), homes, orphanages and similar institutions duly accredited by the proper government agency

Art. 69. The husband and wife shall fix the family domicile. In case of disagreement, the court shall G.R. No. 159374               July 12, 2007
decide. FELIPE N. MADRIÑAN, Petitioner, vs. FRANCISCA R. MADRIÑAN, Respondent.
DECISION
The court may exempt one spouse from living with the other if the latter should live abroad or there
are other valid and compelling reasons for the exemption. However, such exemption shall not apply if the CORONA, J.:
same is not compatible with the solidarity of the family. (110a)
When a family breaks up, the children are always the victims. The ensuing battle for custody of the minor
Art. 73 (spouse’s objection to the profession of the other spouse), children is not only a thorny issue but also a highly sensitive and heart-rending affair. Such is the case here.
Even the usually technical subject of jurisdiction became emotionally charged.
Art. 73. Either spouse may exercise any legitimate profession, occupation, business or activity
without the consent of the other. The latter may object only on valid, serious, and moral grounds. Petitioner Felipe N. Madriñan and respondent Francisca R. Madriñan were married on July 7, 1993 in
Parañaque City. They resided in San Agustin Village, Brgy. Moonwalk, Parañaque City.
In case of disagreement, the court shall decide whether or not:
Their union was blessed with three sons and a daughter: Ronnick, born on January 30, 1994; Phillip, born on
(1) The objection is proper; and November 19, 1996; Francis Angelo, born on May 12, 1998 and Krizia Ann, born on December 12, 2000.

(2) Benefit has occurred to the family prior to the objection or thereafter. If the benefit accrued prior After a bitter quarrel on May 18, 2002, petitioner allegedly left their conjugal abode and took their three sons
to the objection, the resulting obligation shall be enforced against the separate property of the with him to Ligao City, Albay and subsequently to Sta. Rosa, Laguna. Respondent sought the help of her
spouse who has not obtained consent. parents and parents-in-law to patch things up between her and petitioner to no avail. She then brought the
matter to the Lupong Tagapamayapa in their barangay but this too proved futile.
The foregoing provisions shall not prejudice the rights of creditors who acted in good faith. (117a)
Thus respondent filed a petition for habeas corpus of Ronnick, Phillip and Francis Angelo in the Court of
Arts. 96 and 124 (annulment of husband’s decision in the administration and enjoyment of community Appeals, alleging that petitioner’s act of leaving the conjugal dwelling and going to Albay and then to Laguna
or conjugal property; appointment of spouse as sole administrator except cases of “incompetent” other disrupted the education of their children and deprived them of their mother’s care. She prayed that petitioner
spouse which shall be under Rules 93 and 95) and Art. 217 (entrusting children to homes and be ordered to appear and produce their sons before the court and to explain why they should not be returned to
orphanages). her custody.
Art. 96. The administration and enjoyment of the community property shall belong to both spouses Petitioner and respondent appeared at the hearing on September 17, 2002. They initially agreed that petitioner
jointly. In case of disagreement, the husband’s decision shall prevail, subject to recourse to the court by the would return the custody of their three sons to respondent. Petitioner, however, had a change of heart1 and
wife for proper remedy, which must be availed of within five years from the date of the contract implementing decided to file a memorandum.
such decision.
On September 3, 2002, petitioner filed his memorandum2 alleging that respondent was unfit to take custody of The jurisdiction of the Court of Appeals over petitions for habeas corpus was further affirmed by A.M. No.
their three sons because she was habitually drunk, frequently went home late at night or in the wee hours of the 03-03-04-SC (April 22, 2004) in Re: Rule on Custody of Minors and Writ of Habeas Corpus in Relation to
morning, spent much of her time at a beer house and neglected her duties as a mother. He claimed that, after Custody of Minors:
their squabble on May 18, 2002, it was respondent who left, taking their daughter with her. It was only then
that he went to Sta. Rosa, Laguna where he worked as a tricycle driver. He submitted a certification from the In any case, whatever uncertainty there was has been settled with the adoption of A.M. No. 03-03-04-SC
principal of the Dila Elementary School in Sta. Rosa, Laguna that Ronnick and Phillip were enrolled there. He Re: Rule on Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors. Section 20
also questioned the jurisdiction of the Court of Appeals claiming that under Section 5(b) of RA 8369 of the rule provides that:
(otherwise known as the "Family Courts Act of 1997") family courts have exclusive original jurisdiction to
hear and decide the petition for habeas corpus filed by respondent.3 Section 20. Petition for writ of habeas corpus. – A verified petition for a writ of habeas corpus involving
custody of minors shall be filed with the Family Court. The writ shall be enforceable within its judicial region
For her part, respondent averred that she did not leave their home on May 18, 2002 but was driven out by to which the Family Court belongs.
petitioner. She alleged that it was petitioner who was an alcoholic, gambler and drug addict. Petitioner’s
alcoholism and drug addiction impaired his mental faculties, causing him to commit acts of violence against The petition may likewise be filed with the Supreme Court, Court of Appeals, or with any of its
her and their children. The situation was aggravated by the fact that their home was adjacent to that of her in- members and, if so granted, the writ shall be enforceable anywhere in the Philippines. The writ may be
laws who frequently meddled in their personal problems.4 made returnable to a Family Court or to any regular court within the region where the petitioner resides or
where the minor may be found for hearing and decision on the merits.
On October 21, 2002, the Court of Appeals 5 rendered a decision6 asserting its authority to take cognizance of
the petition and ruling that, under Article 213 of the Family Code, respondent was entitled to the custody of From the foregoing, there is no doubt that the Court of Appeals and Supreme Court have concurrent
Phillip and Francis Angelo who were at that time aged six and four, respectively, subject to the visitation rights jurisdiction with family courts in habeas corpus cases where the custody of minors is
of petitioner. With respect to Ronnick who was then eight years old, the court ruled that his custody should be involved.9 (emphases supplied)
determined by the proper family court in a special proceeding on custody of minors under Rule 99 of the Rules
We note that after petitioner moved out of their Parañaque residence on May 18, 2002, he twice transferred his
of Court.
sons to provinces covered by different judicial regions. This situation is what the Thornton interpretation of
Petitioner moved for reconsideration of the Court of Appeals decision but it was denied. Hence, this recourse. RA 8369’s provision on jurisdiction precisely addressed:

Petitioner challenges the jurisdiction of the Court of Appeals over the petition for habeas corpus and insists [The reasoning that by giving family courts exclusive jurisdiction over habeas corpus cases, the lawmakers
that jurisdiction over the case is lodged in the family courts under RA 8369. He invokes Section 5(b) of RA intended them to be the sole courts which can issue writs of habeas corpus] will result in an iniquitous
8369: situation, leaving individuals like [respondent] without legal recourse in obtaining custody of their children.
Individuals who do not know the whereabouts of minors they are looking for would be helpless since they
Section 5. Jurisdiction of Family Courts. – The Family Courts shall have exclusive original jurisdiction to hear cannot seek redress from family courts whose writs are enforceable only in their respective territorial
and decide the following cases: jurisdictions. Thus, if a minor is being transferred from one place to another, which seems to be the case
here, the petitioner in a habeas corpus case will be left without legal remedy. This lack of recourse could
b) Petitions for guardianship, custody of children, habeas corpus in relation to the latter; not have been the intention of the lawmakers when they passed [RA 8369].10

Petitioner is wrong. Moreover, a careful reading of Section 5(b) of RA 8369 reveals that family courts are vested with original
exclusive jurisdiction in custody cases, not in habeas corpus cases. Writs of habeas corpus which may be
In Thornton v. Thornton,7 this Court resolved the issue of the Court of Appeals’ jurisdiction to issue writs issued exclusively by family courts under Section 5(b) of RA 8369 pertain to the ancillary remedy that may
of habeas corpus in cases involving custody of minors in the light of the provision in RA 8369 giving family be availed of in conjunction with a petition for custody of minors under Rule 99 of the Rules of Court. In other
courts exclusive original jurisdiction over such petitions: words, the issuance of the writ is merely ancillary to the custody case pending before the family court. The
writ must be issued by the same court to avoid splitting of jurisdiction, conflicting decisions, interference by a
The Court of Appeals should take cognizance of the case since there is nothing in RA 8369 that revoked co-equal court and judicial instability.
its jurisdiction to issue writs of habeas corpus involving the custody of minors.
The rule therefore is: when by law jurisdiction is conferred on a court or judicial officer, all auxiliary writs,
We rule therefore that RA 8369 did not divest the Court of Appeals and the Supreme Court of their processes and other means necessary to carry it into effect may be employed by such court or officer. 11 Once a
jurisdiction over habeas corpus cases involving the custody of minors. court acquires jurisdiction over the subject matter of a case, it does so to the exclusion of all other courts,
including related incidents and ancillary matters.
The provisions of RA 8369 reveal no manifest intent to revoke the jurisdiction of the Court of Appeals and
Supreme Court to issue writs of habeas corpus relating to the custody of minors. Further, it cannot be said that Accordingly, the petition is hereby DENIED.
the provisions of RA 8369, RA 7092 [An Act Expanding the Jurisdiction of the Court of Appeals] and BP 129
[The Judiciary Reorganization Act of 1980] are absolutely incompatible since RA 8369 does not prohibit the Costs against petitioner.
Court of Appeals and the Supreme Court from issuing writs of habeas corpus in cases involving the custody of
minors. Thus, the provisions of RA 8369 must be read in harmony with RA 7029 and BP 129 – that family
courts have concurrent jurisdiction with the Court of Appeals and the Supreme Court in petitions
for habeas corpus where the custody of minors is at issue.8 (emphases supplied)
 Not to be outdone, petitioner filed on July 25, 2003 before the Pasig RTC in his petition for declaration of
nullity of marriage an urgent motion praying for the custody of Bianca for the duration of the case.

Acting on respondent’s petition, Branch 113 of the Pasay RTC issued a Writ of Habeas Corpus, a Hold
G.R. No. 164915             March 10, 2006 Departure Order and Summons addressed to petitioner, drawing petitioner to file a motion to dismiss the
ERIC JONATHAN YU, Petitioner, vs. CAROLINE T. YU, Respondent. petition on the ground of lack of jurisdiction, failure to state a cause of action, forum shopping and litis
CARPIO MORALES, J.: pendentia, he citing the pending petition for declaration of nullity of marriage which he filed before the Pasig
RTC.
On January 11, 2002, Eric Jonathan Yu (petitioner) filed a petition for habeas corpus before the Court of
Appeals alleging that his estranged wife Caroline Tanchay-Yu (respondent) unlawfully withheld from him the The Pasay RTC, in the meantime, issued an Order of August 12, 2003 declaring that pending the disposition of
custody of their minor child Bianca. The petition, which included a prayer for the award to him of the sole respondent’s petition, Bianca should stay with petitioner from Sunday afternoon to Saturday morning and
custody of Bianca, was docketed as CA-G.R. SP No. 68460. "with the company of her mother from Saturday 1:00 in the afternoon up to Sunday 1:00 in the afternoon." To
this Order, petitioner filed a Motion for Reconsideration, arguing that the Pasay RTC did not have jurisdiction
Subsequently or on March 3, 2002, respondent filed a petition against petitioner before the Pasig Regional to issue the same. He likewise filed a Manifestation of August 14, 2003 stating that he was constrained to
Trial Court (RTC) for declaration of nullity of marriage and dissolution of the absolute community of submit to the said court’s order but with the reservation that he was not submitting the issue of custody and
property. The petition included a prayer for the award to her of the sole custody of Bianca and for the fixing of himself to its jurisdiction.
schedule of petitioner’s visiting rights "subject only to the final and executory judgment of the Court of
Appeals in CA-G.R. SP No. 68460." Respondent soon filed her Answer with Counter-Petition on the nullity case before the Pasig RTC wherein she
also prayed for the award of the sole custody to her of Bianca, subject to the final disposition of the habeas
In the meantime, the appellate court, by Resolution of March 21, 2002, awarded petitioner full custody of corpus petition which she filed before the Pasay RTC.
Bianca during the pendency of the habeas corpus case, with full visitation rights of respondent.
By Omnibus Order of October 30, 2003, the Pasig RTC asserted its jurisdiction over the custody aspect of the
Petitioner and respondent later filed on April 5, 2002 before the appellate court a Joint Motion to Approve petition filed by petitioner and directed the parties to comply with the provisions of the Interim Visitation
Interim Visitation Agreement which was, by Resolution of April 24, 2002, approved. Agreement, unless they agreed to a new bilateral agreement bearing the approval of the court; and granted
custody of Bianca to petitioner for the duration of the case.
On April 18, 2002, respondent filed before the appellate court a Motion for the Modification of her visiting
rights under the Interim Visitation Agreement. To the Motion, petitioner filed an Opposition with Motion to The Pasay RTC in the meantime denied, by Order of November 27, 2003, petitioner’s motion to dismiss. The
Cite Respondent for Contempt of Court in light of her filing of the petition for declaration of nullity of court, citing Sombong v. Court of Appeals,1 held that in custody cases involving minors, the question of illegal
marriage before the Pasig RTC which, so he contended, constituted forum shopping. and involuntary restraint of liberty is not the underlying rationale for the availability of a writ of habeas corpus
as a remedy; rather, a writ of habeas corpus is prosecuted for the purpose of determining the right of custody
By Resolution of July 5, 2002, the appellate court ordered respondent and her counsel to make the necessary
over the child.2 And it further held that the filing before it of the habeas corpus case by respondent, who is a
amendment in her petition for declaration of nullity of marriage before the Pasig City RTC in so far as the
resident of Pasay, is well within the ambit of the provisions of A.M. No. 03-04-04-SC.3
custody aspect is concerned, under pain of contempt.
On the issue of forum shopping, the Pasay RTC held that it is petitioner, not respondent, who committed
In compliance with the appellate court’s Resolution of July 5, 2002, respondent filed a Motion to Admit
forum shopping, he having filed (on June 12, 2003) the petition for declaration of nullity of marriage before
Amended Petition before the Pasig RTC. She, however, later filed in December 2002 a Motion to Dismiss her
the Pasig RTC while his petition for habeas corpus before the Court of Appeals was still pending.4
petition, without prejudice, on the ground that since she started residing and conducting business at her new
address at Pasay City, constraints on resources and her very busy schedule rendered her unable to devote the The Pasay RTC held that assuming arguendo that petitioner’s filing before the Pasig RTC of the declaration of
necessary time and attention to the petition. The Pasig RTC granted respondent’s motion and accordingly nullity of marriage case did not constitute forum shopping, it (the Pasay RTC) acquired jurisdiction over the
dismissed the petition without prejudice, by Order of March 28, 2003. custody issue ahead of the Pasig RTC, petitioner not having amended his petition before the Pasig RTC as
soon as the Court of Appeals dismissed his petition for habeas corpus5 (on July 3, 2003).
On June 12, 2003, petitioner filed his own petition for declaration of nullity of marriage and dissolution of the
absolute community of property before the Pasig RTC, docketed as JDRC Case No. 6190, with prayer for the Finally, the Pasay RTC held that there was no litis pendentia because two elements thereof are lacking,
award to him of the sole custody of Bianca, subject to the final resolution by the appellate court of his petition namely, 1) identity of the rights asserted and reliefs prayed for, the relief being founded on the same facts, and
for habeas corpus. 2) identity with respect to the two preceding particulars in the two cases such that any judgment that may be
rendered in the pending case, regardless of which party is successful, would amount to res judicata in the other
The appellate court eventually dismissed the habeas corpus petition, by Resolution of July 3, 2003, for having
case.6
become moot and academic, "the restraint on the liberty of the person alleged to be in restraint [having been]
lifted." Petitioner thereupon assailed the Pasay RTC’s denial of his Motion to Dismiss via Petition for Certiorari,
Prohibition and Mandamus before the appellate court wherein he raised the following issues:
In the meantime, respondent filed on July 24, 2003 before the Pasay RTC a petition for habeas corpus, which
she denominated as "Amended Petition," praying for, among other things, the award of the sole custody to her A. RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION BY DENYING
of Bianca or, in the alternative, pending the hearing of the petition, the issuance of an order "replicating and PETITIONER’S MOTION TO DISMISS DESPITE THE EVIDENT LACK OF JURISDICTION
reiterating the enforceability of the Interim Visiting Agreement" which was approved by the appellate court. OVER THE SUBJECT MATTER OF CUSTODY, LITIS PENDENTIA, AND DELIBERATE
The petition was docketed as SP Proc. No. 03-0048. AND WILLFUL FORUM-SHOPPING ON THE PART OF RESPONDENT CAROLINE T. YU.7
 B. RESPONDENT JUDGE ACTED WHIMSICALLY, CAPRICIOUSLY AND ARBITRARILY The petition is impressed with merit.
IN ISSUING THE AUGUST 12, 2003 ORDER GRANTING RESPONDENT CAROLINE T. YU
OVERNIGHT VISITATION RIGHTS OVER THE MINOR CHILD BIANCA AND DENYING The main issue raised in the present petition is whether the question of custody over Bianca should be litigated
PETITIONER’S URGENT MOTION FOR RECONSIDERATION OF THE SAID before the Pasay RTC or before the Pasig RTC.
ORDER.8 (Underscoring supplied)
Judgment on the issue of custody in the nullity of marriage case before the Pasig RTC, regardless of which
By Decision of August 10, 2004,9 the appellate court denied petitioner’s petition, it holding that the party would prevail, would constitute res judicata on the habeas corpus case before the Pasay RTC since the
assumption of jurisdiction by the Pasay RTC over the habeas corpus case does not constitute grave abuse of former has jurisdiction over the parties and the subject matter.
discretion; the filing by respondent before the Pasay RTC of a petition for habeas corpus could not be
considered forum shopping in the strictest sense of the word as before she filed it after petitioner’s petition for There is identity in the causes of action in Pasig and Pasay because there is identity in the facts and evidence
habeas corpus filed before the appellate court was dismissed; and it was petitioner who committed forum essential to the resolution of the identical issue raised in both actions11 – whether it would serve the best
shopping when he filed the declaration of nullity of marriage case while his habeas corpus petition was still interest of Bianca to be in the custody of petitioner rather than respondent or vice versa.
pending before the appellate court.
Since the ground invoked in the petition for declaration of nullity of marriage before the Pasig RTC is
In fine, the appellate court held that since respondent filed the petition for declaration of nullity of marriage respondent’s alleged psychological incapacity to perform her essential marital obligations 12 as provided in
before the Pasig RTC during the pendency of the habeas corpus case he filed before the appellate court, Article 36 of the Family Code, the evidence to support this cause of action necessarily involves evidence of
whereas respondent filed the habeas corpus petition before the Pasay RTC on July 24, 2003 after the dismissal respondent’s fitness to take custody of Bianca. Thus, the elements of litis pendentia, to wit: a) identity of
on July 3, 2003 by the appellate court of petitioner’s habeas corpus case, jurisdiction over the issue custody of parties, or at least such as representing the same interest in both actions; b) identity of rights asserted and
Bianca did not attach to the Pasig RTC. reliefs prayed for, the relief being founded on the same facts; and c) the identity in the two cases should be
such that the judgment that may be rendered in the pending case would, regardless of which party is
As for the questioned order of the Pasay RTC which modified the Interim Visiting Agreement, the appellate successful, amount to res judicata in the other,13 are present.
court, noting that the proper remedy for the custody of Bianca was filed with the Pasay RTC, held that said
court had the authority to issue the same. Respondent argues in her Comment to the petition at bar that the Pasig RTC never acquired jurisdiction over
the custody issue raised therein.
Hence, the present petition filed by petitioner faulting the appellate court for
"[T]he subsequent dismissal of the habeas corpus petition by the Court of Appeals on 3 July 2003 could not
I. . . . DECLARING THAT PETITIONER ERIC YU COMMITTED FORUM-SHOPPING IN FILLING THE have the effect of conferring jurisdiction over the issue on the Pasig court. For the Pasig court to acquire
PETITION FOR DECLARATION OF NULLITY OF MARRIAGE WITH PRAYER FOR CUSTODY jurisdiction over the custody issue after the dismissal of the habeas corpus petition before the Court of
BEFORE THE PASIG FAMILY COURT AND THAT THE LATTER COURT WAS BARRED FROM Appeals, the rule is that petitioner must furnish the occasion for the acquisition of jurisdiction by repleading
ACQUIRING JURISDICTION OVER THE CUSTODY ASPECT OF THE NULLITY CASE IN RECKLESS his cause of action for custody and invoking said cause anew."14 (Emphasis and underscoring supplied)
DISREGARD OF THE PRINCIPLE THAT THE FILING OF A PETITION FOR NULLITY OF
MARRIAGE BEFORE THE FAMILY COURTS VESTS THE LATTER WITH EXCLUSIVE And respondent cites Caluag v. Pecson,15 wherein this Court held:
JURISDICTION TO DETERMINE THE NECESSARY ISSUE OF CUSTODY.
Jurisdiction of the subject matter of a particular case is something more than the general power conferred by
II. . . . APPL[YING] THE LAW OF THE CASE DOCTRINE BY RULING THAT THE PASIG FAMILY law upon a court to take cognizance of cases of the general class to which the particular case belongs. It is not
COURT HAS NO JURISDICTION OVER THE CUSTODY ASPECT OF THE NULLITY CASE ON THE enough that a court has power in abstract to try and decide the class litigations [sic] to which a case belongs; it
BASIS OF THE JULY 5, 2002 RESOLUTION OF THE COURT OF APPEALS IN CA GR SP NO. 68460 is necessary that said power be properly invoked, or called into activity, by the filing of a petition, or
WHEN THE SAID RESOLUTION CLEARLY APPLIES ONLY TO THE NULLITY CASE FILED BY complaint or other appropriate pleading. (Underscoring supplied by Caroline.)16
PRIVATE RESPONDENT ON MARCH 7, 2002 DOCKETED AS JDRC CASE NO. 5745 AND NOT TO
Specific provisions of law govern the case at bar, however. Thus Articles 49 and 50 of the Family Code
HEREIN PETITIONER’S JUNE 12, 2003 PETITION FOR NULLITY DOCKETED AS JDRC CASE NO.
provide:
6190.
Art. 49. During the pendency of the action [for annulment or declaration of nullity of marriage] and in the
III. . . . DECLARING THAT THE PASIG FAMILY COURT MUST YIELD TO THE JURISDICTION OF
absence of adequate provisions in a written agreement between the spouses, the Court shall provide for the
THE PASAY COURT INSOFAR AS THE ISSUE OF CUSTODY IS CONCERNED IN GRAVE
support of the spouses and the custody and support of their common children. x x x It shall also provide
VIOLATION OF THE DOCTRINE OF JUDICIAL STABILITY AND NON-INTERFERENCE.
for appropriate visitation rights of the other parent. (Emphasis and underscoring supplied)17
IV. . . . RULING THAT PRIVATE RESPONDENT CAROLINE DID NOT COMMIT FORUM-
Art. 50. x x x x
SHOPING IN FILING THE HABEAS CORPUS CASE WITH PRAYER FOR CUSTODY BEFORE THE
RESPONDENT PASAY COURT DESPITE THE FACT THAT AN EARLIER FILED PETITION FOR The final judgment in such cases [for the annulment or declaration of nullity of marriage] shall provide for the
DECLARATION OF NULLITY OF MARRIAGE WITH PRAYER FOR CUSTODY IS STILL PENDING liquidation, partition and distribution of the properties of the spouses, the custody and support of the
BEFORE THE PASIG FAMILY COURT WHEN THE FORMER CASE WAS INSTITUTED. common children, and the delivery of their presumptive legitimes, unless such other matters had been
adjudicated in previous judicial proceedings." (Emphasis and underscoring added)
V. . . . RULING THAT RESPONDENT CAROLINE YU DID NOT SUBMIT TO THE JURISDICTION OF
THE PASIG FAMILY COURT BASED ON AN ERRONEOUS FACTUAL FINDING THAT SHE FILED By petitioner’s filing of the case for declaration of nullity of marriage before the Pasig RTC he automatically
ON AUGUST 25, 2003 AN OMNIBUS OPPOSITION IN PETITIONER’S ACTION FOR NULLITY submitted the issue of the custody of Bianca as an incident thereof. After the appellate court subsequently
BEFORE THE PASIG COURT.10 (Underscoring supplied) dismissed the habeas corpus case, there was no need for petitioner to replead his prayer for custody for, as
above-quoted provisions of the Family Code provide, the custody issue in a declaration of nullity case is
deemed pleaded. That that is so gains light from Section 21 of the "Rule on Declaration Of Absolute Nullity
Of Void Marriages and Annulment of Voidable Marriages"18 which provides:

Sec. 21. Liquidation, partition and distribution, custody, support of common children and delivery of their
presumptive legitimes.–Upon entry of the judgment granting the petition, or, in case of appeal, upon receipt of
the entry of judgment of the appellate court granting the petition, the Family Court, on motion of either
party, shall proceed with the liquidation, partition and distribution of the properties of the spouses,
including custody, support of common children and delivery of their presumptive legitimes pursuant to
Articles 50 and 51 of the Family Code unless such matters had been adjudicated in previous judicial
proceedings. (Emphasis and underscoring supplied)

Since this immediately-quoted provision directs the court taking jurisdiction over a petition for declaration of
nullity of marriage to resolve the custody of common children, by mere motion of either party, it could only
mean that the filing of a new action is not necessary for the court to consider the issue of custody of a minor.19

The only explicit exception to the earlier-quoted second paragraph of Art. 50 of the Family Code is when
"such matters had been adjudicated in previous judicial proceedings," which is not the case here.

The elements of litis pendentia having been established, the more appropriate action criterion guides this
Court in deciding which of the two pending actions to abate.20

The petition filed by petitioner for the declaration of nullity of marriage before the Pasig RTC is the more
appropriate action to determine the issue of who between the parties should have custody over Bianca in view
of the express provision of the second paragraph of Article 50 of the Family Code. This must be so in line with
the policy of avoiding multiplicity of suits.21
Commercial Courts
The appellate court thus erroneously applied the law of the case doctrine when it ruled that in its July 5, 2002
Resolution that the pendency of the habeas corpus petition in CA-G.R. SP No. 68460 prevented the Pasig RTC REPUBLIC ACT NO. 8799
from acquiring jurisdiction over the custody aspect of petitioner’s petition for declaration of nullity. The
factual circumstances of the case refelected above do not justify the application of the law of the case doctrine
which has been defined as follows: THE SECURITIES REGULATION CODE

Law of the case has been defined as the opinion delivered on a former appeal. It is a term applied to an Section 5. Powers and Functions of the Commission.– 5.1. The commission shall act with
established rule that when an appellate court passes on a question and remands the case to the lower court transparency and shall have the powers and functions provided by this code, Presidential Decree No. 902-A,
for further proceedings, the question there settled becomes the law of the case upon subsequent the Corporation Code, the Investment Houses law, the Financing Company Act and other existing laws.
appeal. It means that whatever is once irrevocably established as the controlling legal rule or decision between Pursuant thereto the Commission shall have, among others, the following powers and functions:
the same parties in the same case continues to be the law of the case, whether correct on general principles or
not, so long as the facts on which such decision was predicated continue to be the facts of the case before the
court." (Emphasis and underscoring supplied, italics in the original)22 (a) Have jurisdiction and supervision over all corporations, partnership or associations who are the
grantees of primary franchises and/or a license or a permit issued by the Government;
WHEREFORE, the petition is GRANTED. The August 10, 2004 decision of the Court of Appeals
is REVERSED and SET ASIDE,and another is entered DISMISSING Pasay City Regional Trial Court Sp. (b) Formulate policies and recommendations on issues concerning the securities market, advise
Proc. No. 03-0048-CFM and ordering Branch 69 of Pasig City Regional Trial Court to continue, with dispatch, Congress and other government agencies on all aspect of the securities market and propose
the proceedings in JDRC No. 6190. legislation and amendments thereto;
SO ORDERED.
(c) Approve, reject, suspend, revoke or require amendments to registration statements, and
registration and licensing applications;

(d) Regulate, investigate or supervise the activities of persons to ensure compliance;

(e) Supervise, monitor, suspend or take over the activities of exchanges, clearing agencies and other
SROs;
 (f) Impose sanctions for the violation of laws and rules, regulations and orders, and issued pursuant
thereto;

(g) Prepare, approve, amend or repeal rules, regulations and orders, and issue opinions and provide
guidance on and supervise compliance with such rules, regulation and orders;

(h) Enlist the aid and support of and/or deputized any and all enforcement agencies of the
Government, civil or military as well as any private institution, corporation, firm, association or
person in the implementation of its powers and function under its Code;

(i) Issue cease and desist orders to prevent fraud or injury to the investing public;

(j) Punish for the contempt of the Commission, both direct and indirect, in accordance with the
pertinent provisions of and penalties prescribed by the Rules of Court;

(k) Compel the officers of any registered corporation or association to call meetings of stockholders
or members thereof under its supervision;

(l) Issue subpoena duces tecum and summon witnesses to appear in any proceedings of the
Commission and in appropriate cases, order the examination, search and seizure of all documents,
papers, files and records, tax returns and books of accounts of any entity or person under
investigation as may be necessary for the proper disposition of the cases before it, subject to the
provisions of existing laws; A.M. No. 01-2-04-SC. March 13, 2001
Re: PROPOSED INTERIM RULES OF PROCEDURE GOVERNING INTRA-CORPORATE
(m) Suspend, or revoke, after proper notice and hearing the franchise or certificate of registration of CONTROVERSIES UNDER R. A. NO. 8799
corporations, partnership or associations, upon any of the grounds provided by law; and RESOLUTION
INTERIM RULES OF PROCEDURE FOR INTRA-CORPORATE CONTROVERSIES
(n) Exercise such other powers as may be provided by law as well as those which may be implied
from, or which are necessary or incidental to the carrying out of, the express powers granted the RULE 1
Commission to achieve the objectives and purposes of these laws.
GENERAL PROVISIONS
5.2. The Commission’s jurisdiction over all cases enumerated under section 5 of Presidential
Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial
SECTION 1. (a) Cases covered. – These Rules shall govern the procedure to be observed in civil
Court: Provided, That the Supreme Court in the exercise of its authority may designate the Regional Trial
cases involving the following:
Court branches that shall exercise jurisdiction over the cases. The Commission shall retain jurisdiction over
pending cases involving intra-corporate disputes submitted for final resolution which should be resolved
within one (1) year from the enactment of this Code. The Commission shall retain jurisdiction over pending 1. Devices or schemes employed by, or any act of, the board of directors, business
suspension of payment/rehabilitation cases filed as of 30 June 2000 until finally disposed. associates, officers or partners, amounting to fraud or misrepresentation which may be
detrimental to the interest of the public and/or of the stockholders, partners, or members
of any corporation, partnership, or association;
2. Controversies arising out of intra-corporate, partnership, or association relations, between
and among stockholders, members, or associates; and between, any or all of them and the
corporation, partnership, or association of which they are stockholders, members, or
associates, respectively;
3. Controversies in the election or appointment of directors, trustees, officers, or managers
of corporations, partnerships, or associations;
4. Derivative suits; and
5. Inspection of corporate books.
(b) prohibition against nuisance and harassment suits. - Nuisance and harassment suits are prohibited. In SEC. 8. Prohibited pleadings. – The following pleadings are prohibited:
determining whether a suit is a nuisance or harassment suit, the court shall consider, among others, the
following: 1. Motion to dismiss;
2. Motion for a bill of particulars;
1. The extent of the shareholding or interest of the initiating stockholder or member; 3. Motion for new trial, or for reconsideration of judgment or order, or for re-opening of
2. Subject matter of the suit; trial;
3. Legal and factual basis of the complaint; 4. Motion for extension of time to file pleadings, affidavits or any other paper, except those
4. Availability of appraisal rights for the act or acts complained of; and filed due to clearly compelling reasons. Such motion must be verified and under oath; and
5. Prejudice or damage to the corporation, partnership, or association in relation to the relief 5. Motion for postponement and other motions of similar intent, except those filed due to
sought. clearly compelling reasons. Such motion must be verified and under oath.

In case of nuisance or harassment suits, the court may, moto proprio or upon motion, forthwith dismiss the SEC. 9. Assignment of cases. – All cases filed under these Rules shall be tried by judges designated
case. by the Supreme Court to hear and decide cases transferred from the Securities and Exchange Commission to
the Regional Trial Courts and filed directly with said courts pursuant to Republic Act No. 8799, otherwise
SEC. 2. Suppletory application of the Rules of Court. – The Rules of Court, in so far as they may known as the Securities and Regulation Cod
be applicable and are not inconsistent with these Rules, are hereby adopted to form an integral part of these
Rules.  

SEC. 3. Construction. – These Rules shall be liberally construed in order to promote their objective
of securing a just, summary, speedy and inexpensive determination of every action or proceeding.

SEC. 4. Executory nature of decisions and orders. – All decisions and orders issued under these
Rules shall immediately be executory. No appeal or petition taken therefrom shall stay the enforcement or
implementation of the decision or order, unless restrained by an appellate court. Interlocutory orders shall not
be subject to appeal.

SEC. 5. Venue. – All actions covered by these Rules shall be commenced and tried in the Regional
Trial Court which has jurisdiction over the principal office of the corporation, partnership, or association RULE 2
concerned. Where the principal office of the corporation, partnership or association is registered in the COMMENCEMENT OF ACTION AND PLEADINGS
Securities and Exchange Commission as Metro Manila, the action must be filed in the city or municipality
where the head office is located.
SECTION 1. Commencement of action. – An action under these Rules is commenced by the filing
of a verified complaint with the proper Regional Trial Court.
SEC. 6. Service of pleadings. – When so authorized by the court, any pleading and/or document
required by these Rules may be filed with the court and/or served upon the other parties by facsimile
transmission (tax) or electronic mail (e-mail. In such cases, the date of transmission shall be deemed to SEC. 2. Pleadings allowed. – The only pleadings allowed to be filed under these Rules are the
be prima facie the date of service. complaint, answer, compulsory counterclaims or cross-claims pleaded in the answer, and the answer to the
counterclaims or cross-claims.

SEC. 7. Signing of pleadings, motions and other papers. – Every pleading, motion, and other
paper of a party represented by an attorney shall be signed by at least one attorney of record in the attorney’s SEC. 3. Verification. – The complaint and the answer shall be verified by an affidavit stating that
individual name, whose address shall be stated. A party who is not represented by an attorney shall sign the the affiant has read the pleading and the allegations therein are true and correct based on his own personal
pleading, motion, or other paper and state his address. knowledge or on authentic records.

The signature of an attorney or party constitutes a certification by the signer that he has read the pleading, SEC. 4. Complaint. – The complaint shall state or contain:
motion, or other paper; that to the best of his knowledge, information, and belief formed after reasonable
inquiry, it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, 1. the names, addresses, and other relevant personal or juridical circumstances of the parties;
modification, or reversal of existing jurisprudence; and that it is not interposed for any improper purpose, such 2. all facts material and relevant to the plaintiff’s cause or causes of action, which shall be
as to harass or to cause unnecessary delay or needless increase in the cost of litigation. supported by affidavits of the plaintiff or his witnesses and copies of documentary and
other evidence supportive of such cause or causes of action;
If a pleading, motion, or other paper is not signed, it shall be stricken off the record unless it is promptly 3. the law, rule, or regulation relied upon, violated, or sought to be enforced;
signed by the pleader or movant, after he is notified of the omission. 4. a certification that (a) the plaintiff has not theretofore commenced any action or filed any
claim involving the same issues in any court, tribunal or quasi-judicial agency, and, to the
 best of his knowledge, no such other action or claim is pending therein; (b) if there is affiant is competent to testify on the matters stated therein. The affidavits shall be in question and answer
such other action or claim, a complete statement of the present status thereof; and (c) if he form, and shall comply with the rules on admissibility of evidence.
should thereafter learn that the same or similar action or claim has been filed or is
pending, he shall report that fact within five (5) days therefrom to the court; and
Affidavits of witnesses as well as documentary and other evidence shall be attached to the appropriate
5. the relief sought. pleading; Provided, however, that affidavits, documentary and other evidence not so submitted may be
attached to the pre-trial brief required under these Rules. Affidavits and other evidence not so submitted shall
SEC. 5. Summons. – The summons and the complaint shall be served together not later than five not be admitted in evidence, except in the following cases:
(5) days from the date of filing of the complaint.
1. Testimony of unwilling, hostile, or adverse party witnesses. A witness is presumed prima
a. Service upon domestic private juridical entities. – If the defendant is a domestic facie hostile if he fails or refuses to execute an affidavit after a written request therefor;
corporation, service shall be deemed adequate if made upon any of the statutory or 2. If the failure to submit the evidence is for meritorious and compelling reasons; and
corporate officers as fixed by the by-laws or their respective secretaries. If the defendant 3. Newly discovered evidence.
is a partnership, service shall be deemed adequate if made upon any of the managing or
general partners or upon their respective secretaries. If the defendant is an association,
In case of (2) and (3) above, the affidavit and evidence must be submitted not later than five (5) days prior to
service shall be deemed adequate if made upon any of its officers or their respective its introduction in evidence.
secretaries.
b. Service upon foreign private juridical entity. – When the defendant is a foreign private
juridical entity which is transacting or has transacted business in the Philippines, service
may be made on its resident agent designated in accordance with law for that purpose, or,
if there be no such agent, on the government official designated by law to that effect, or
on any of its officers or agents within the Philippines.

SEC. 6. Answer. – The defendant shall file his answer to the complaint, serving a copy thereof on
the plaintiff, within fifteen (15) days from service of summons.

In the answer, the defendant shall:

1. Specify each material allegation of fact the truth of which he admits; RULE 3
2. Specify each material allegation of fact the truth of which he does not admit. Where the MODES OF DISCOVERY
defendant desires to deny only a part of an averment, he shall specify so much of it as
true and material and shall deny only the remainder;
3. Specify each material allegation of fact as to which truth he has no knowledge or SECTION 1. In general. – A party can only avail of any of the modes of discovery not later than
information sufficient to form a belief, and this shall have the effect of a denial; fifteen (15) days from the joinder of issues.
4. State the defenses, including grounds for a motion to dismiss under the Rules of Court;
5. State the law, rule, or regulation relied upon; SEC. 2. Objections. – Any mode of discovery such as interrogatories, request for admission,
6. Address each of the causes of action stated in the complaint; production or inspection of documents or things, may be objected to within ten (10) days from receipt of the
7. State the facts upon which he relies for his defense, including affidavits of witnesses and discovery device and only on the ground that the matter requested is patently incompetent, immaterial,
copies of documentary and other evidence supportive of such cause or causes of action; irrelevant or privileged in nature.
8. State any compulsory counterclaim/s and cross-claim/s; and
9. State the relief sought.
The court shall rule on the objections not later than fifteen (15) days from the filing thereof.

The answer to counterclaims or cross-claims shall be filed within ten (10) days from service of the answer in
which they are pleaded. SEC. 3. Compliance. – Compliance with any mode of discovery shall be made within ten (10) days
from receipt of the discovery device, or if there are objections, from receipt of the ruling of the court.

SEC. 7. Effect of failure to answer. – If the defendant fails to answer within the period above
provided, he shall be considered in default. Upon motion or motu proprio, the court shall render judgment SEC. 4. Sanctions. – The sanctions prescribed in the Rules of Court for failure to avail of, or refusal
either dismissing the complaint or granting the relief prayed for as the records may warrant. In no case shall to comply with, the modes of discovery shall apply. In addition, the court may, upon motion, declare a party
the court award a relief beyond or different from that prayed for. non-suited or as in default, as the case may be, if the refusal to comply with a mode of discovery is patently
unjustified.

SEC. 8. Affidavits, documentary and other evidence. – Affidavits shall be based on personal
knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the
 10. Possibility of referral to mediation or other alternative modes of dispute resolution;
11. Proposed schedule of hearings; and
12. Such other matters as may aid in the just and speedy disposition of the case.

SEC. 2. Nature and purpose of pre-trial conference. – During the pre-trial conference, the court
shall, with its active participation, ensure that the parties consider in detail all of the following:

1. The possibility of an amicable settlement;

2. Referral of the dispute to mediation or other forms of dispute resolution;
3. Facts that need not be proven, either because they are matters of judicial notice or
expressly or deemed admitted;
4. Amendments to the pleadings;
5. The possibility of obtaining stipulations and admissions of facts and documents;
6. Objections to the admissibility of testimonial, documentary and other evidence;
7. Objections to the form or substance of any affidavit, or part thereof;
8. Simplification of the issues;
9. The possibility of submitting the case for decision on the basis of position papers,
affidavits, documentary and real evidence;
10. A complete schedule of hearing dates; and
11. Such other matters as may aid in the speedy and summary disposition of the case.

SEC. 3. Termination. – The preliminary conference shall be terminated not later than ten (10) days
after its commencement, whether or not the parties have agreed to settle amicably.

SEC. 4. Judgment before pre-trial. – If, after submission of the pre-trial briefs, the court determines
that, upon consideration of the pleadings, the affidavits and other evidence submitted by the parties, a
judgment may be rendered, the court may order the parties to file simultaneously their respective memoranda
RULE 4 within a non-extendible period of twenty (20) days from receipt of the order. Thereafter, the court shall render
PRE-TRIAL judgment, either full or otherwise, not later than ninety (90) days from the expiration of the period to file the
memoranda.
SECTION 1. Pre-trial conference; mandatory nature. – Within five (5) days after the period for
availment of, and compliance with, the modes of discovery prescribed in Rule 3 hereof, whichever comes SEC. 5. Pre-trial order; judgment after pre-trial. – The proceedings in the pre-trial shall be
later, the court shall issue and serve an order immediately setting the case for pre-trial conference and directing recorded. Within ten (10) days after the termination of the pre-trial, the court shall issue an order which shall
the parties to submit their respective pre-trial briefs. The parties shall file with the court and furnish each other recite in detail the matters taken up in the conference, the actions taken thereon, the amendments allowed in
copies of their respective pre-trial brief in such manner as to ensure its receipt by the court and the other party the pleadings, and the agreements or admissions made by the parties as to any of the matters considered. The
at least five (5) days before the date set for the pre-trial. court shall rule on all objections to or comments on the admissibility of any documentary or other evidence,
including any affidavit or any part thereof. Should the action proceed to trial, the order shall explicitly define
and limit the issues to be tried and shall strictly follow the form set forth in Annex "A" of these Rules.
The parties shall set forth in their pre-trial briefs, among other matters, the following:
The contents of the order shall control the subsequent course of the action, unless modified before trial to
1. Brief statement of the nature of the case, which shall summarize the theory or theories of prevent manifest injustice.
the party in clear and concise language;
2. Allegations expressly admitted by either or both parties;
3. Allegations deemed admitted by either or both parties; After the pre-trial, the court may render judgment, either full or partial, as the evidence presented during the
4. Documents not specifically denied under oath by either or both parties; pre-trial may warrant.
5. Amendments to the pleadings;
6. Statement of the issues, which shall separately summarize the factual and legal issues
involved in the case;
7. Names of witnesses to be presented and the summary of their testimony as contained in
their affidavits supporting their positions on each of the issues;
8. All other pieces of evidence, whether documentary or otherwise and their respective
purposes;
9. Specific proposals for an amicable settlement;
 SEC. 4. Memoranda. – Immediately after ruling on the last offer of evidence, the court shall order
the parties to simultaneously file, within thirty (30) days from receipt of the order, their respective memoranda.
The memoranda shall contain the following:

1. A "Statement of the Case," which is a clear and concise statement of the nature of the
action and a summary of the proceedings;
2. A "Statement of the Facts," which is a clear and concise statement in narrative form of
the established facts, with reference to the testimonial, documentary or other evidence in
support thereof;
3. A "Statement of the issues," which is a clear and concise statement of the issues presented
to the court for resolution;
4. The "Arguments," which is a clear and concise presentation of the argument in support of
each issue; and
5. The "Relief," which is a specification of the order or judgment which the party seeks to
obtain.

No reply memorandum shall be allowed.

SEC. 5. Decision after trial. – The court shall render a decision not later than (90) days from the
lapse of the period to file the memoranda, with or without said pleading having been filed.

RULE 5 RULE 6
TRIAL ELECTION CONTESTS

SECTION 1. Witnesses. – If the court deems necessary to hold hearings to determine specific SECTION 1. Cases covered. – The provisions of this rule shall apply to election contests in stock
factual matters before rendering judgment, it shall, in the pre-trial order, set the case for trial on the dates and non-stock corporations.
agreed upon by the parties.
SEC. 2. Definition. – An election contest refers to any controversy or dispute involving title or
Only persons whose affidavits were submitted may be presented as witnesses, except in cases specified in claim to any elective office in a stock or non-stock corporation, the validation of proxies, the manner and
section 8, Rule 2 of these Rules. The affidavits of the witnesses shall serve as their direct testimonies, subject validity of elections, and the qualifications of candidates, including the proclamation of winners, to the office
to cross-examination in accordance with existing rules on evidence. of director, trustee or other officer directly elected by the stockholders in a close corporation or by members of
a non-stock corporation where the articles of incorporation or by-laws so provide.
SEC. 2. Trial schedule.  Unless judgment is rendered pursuant to Rule 4 of these Rules, the initial
hearing shall be held not later than thirty (30) days from the date of the pre-trial order. The hearings shall be SEC. 3. Complaint. – In addition to the requirements in section 4, Rule 2 of these Rules, the
completed not later than sixty (60) days from the date of the initial hearing, thirty (30) days of which shall be complaint in an election contest must state the following:
allotted to the plaintiffs and thirty (30) days to the defendants in the manner prescribed in the rep-trial order.
The failure of a party to present a witness on a scheduled hearing date shall be deemed a waiver of such 1. The case was filed within fifteen (15) days from the date of the election if the by-laws of
hearing date. However, a party may present such witness or witnesses within his remaining allotted hearing the corporation do not provide for a procedure for resolution of the controversy, or within
dates. fifteen (15) days from the resolution of the controversy by the corporation as provided in
its by-laws; and
SEC. 3. Written offer of evidence. – Evidence not otherwise admitted by the parties or ruled upon 2. The plaintiff has exhausted all intra-corporate remedies in election cases as provided for
by the court during the pre-trial conference shall be offered in writing not later than five (5) days from the in the by-laws of the corporation.
completion of the presentation of evidence of the party concerned. The opposing party shall have five (5) days
from receipt of the offer to file his comments or objections. The court shall make its ruling on the offer within SEC. 4. Duty of the court upon the filing of the complaint. – Within two (2) days from the filing of
five (5) days from the expiration of the period to file comments or objections. the complaint, the court, upon a consideration of the allegations thereof, may dismiss the complaint outright if
it is not sufficient in form and substance, or, if it is sufficient, order the issuance of summons which shall be Court pursuant to Republic Act No. 8799, otherwise known as The Securities Regulation Code, shall likewise
served, together with a copy of the complaint, on the defendant within two (2) days from its issuance. be governed by these Rules.

SEC. 5. Answer. – The defendant shall file his answer to the complaint, serving a copy thereof on RULE 2
the plaintiff, within ten (10) days from service of summons and the complaint. The answer shall contain the DEFINITION OF TERMS AND CONSTRUCTION
matters required in section 6, Rule 2 of these Rules.
Section 1. Definition of Terms. - For purpose of these Rules:
SEC. 6. Affidavits, documentary and other evidence. – The parties shall attach to the complaint
and answer the affidavits of witnesses, documentary and other evidence in support thereof, if any. "Administrative Expenses" shall refer to (a) reasonable and necessary expenses that are incurred in
connection with the filing of the petition; (b) expenses incurred in the ordinary course of business
  after the issuance of the stay order, excluding interest payable to the creditors for loans and credit
accommodations existing at the time of the issuance of the stay order, and (c) other expenses that
are authorized under this Rules.
Acting on the Memorandum of the Committee on SEC Cases submitting for this Court’s consideration and
approval the Proposed Interim Rules of Procedure for Intra-Corporate Controversies, the Court Resolved
to APPROVE the same. "Affidavit of General Financial Condition" shall refer to a verified statement on the general
financial condition of the debtor requiredin Section 2, Rule 4 of these Rules.
The Interim Rules shall take effect on April 1, 2001 following its publication in two (2) newspapers of general
circulation. "Affiliate" is a corporation that directly or indirectly, through one or more intermediaries, is
controlled by, or is under the common control of another corporation, which thereby becomes its
parent corporation.

"Asset" is anything of value that can be in the form of money, such as cash at the bank or amounts
owed; fixed assets such as property or equipment; or intangibles including intellectual property, the
book value of which is shown in the last three audited financial statement immediately preceding
the filing of the petition, In case the debtor is less than three years in operation, it is sufficient that
the book value is based on the audited financial statement\s for the years or year immediately
A.M. No. 00-8-10-SC             December 2, 2008 preceding the filing of petition, as the case may be.
RULES OF PROCEDURE ON CORPORATE REHABILITATION
RESOLUTION "Board of Directors" shall include the executive committee or the management of partnership or
association
Acting on the recommendation of the Subcommittee on Special Rules for Special Commercial
Courts, submitting for the consideration and approval of the Court the Resolved to APPROVED the same. "Claim" shall include all claims or demands of whatever nature or charter against a debtor or its
property, whether for money or otherwise
The Rule shall take effect on January 16, 2009 following its publication in two (2) newspapers of
general circulation "Control" is the power of a parent corporation to direct or govern the financial and operating
policies of an enterprise so as to obtain benefits from its activities. Control is presumed to exit when
December 2, 2008 the parent owns, directly or indirectly though subsidiaries, more than one - half (½) of the voting
power of the voting power of an enterprise unless, unless, in exception circumstances, it can clearly
be demonstrated that such own ship does not constitute control. Control also exits even when the
RULES OF PROCEDURE ON CORPORATE REHABILITATION (2008) parents owns one-half (1/2) or less of the voting power of an enterprise when there is power.

RULE 1 (A) Over more than one-half (½) of agreement with investors;
COVERAGE
(B) To direct or govern the financial and operating policies of the enterprise under a
Section 1. Scope - These Rules shall apply to petitions for rehabilitation of corporations, statute or agreement;
partnerships and associations pursuant to Presidential Decree No. 902-A, as amended.
(C) To appoint or remove the majority of the member of the board of directors or
Section 2. Applicability to Rehabilitation Cases Transferred from the Securities and Exchange equivalent governing body; or
Commission. - Cases for rehabilitation transferred from Securities Exchange Commission to the Regional Trial
 (D) To cast the majority votes at meeting of the board of directors or equivalent "Unsecured clan" shall mean any clan other than a seared claim.
governing body.
Section 2. Construction - These Rules shall be liberally construed to carry out the objectives of
"Creditor" shall mean any holder or a Chain Section 5(d), 6(d) and 6(d) of Presidential Decree No. 902-A, as amended, and to assist the parties in obtaining
a jut, expeditious and inexpensive determination of case. Where applicable, the Rules of Court shall apply
"Court" shall refer to the proper Regional Trial Court designated to hear and decide the cases supplementary to proceedings under these Rules.
contemplated contemplated under these Rules.
RULES 3
"Days" shall refer to calendar days unless otherwise provided in these Rules. GENERAL PROVISONS

Section 1. Nature of Proceeding - Any proceeding initiated under these Rules shall be considered in
"Debtor" shall mean any corporation, partnership or association or a group of companies, whether
supervised or regulated by the Securities and Exchange Commission or other government agencies, rem. Jurisdiction over all persons affected by the proceeding shall be considered as acquired upon publication
of the notice of the commencement of the proceedings in any newspaper or general circulation in the
on whose behalf a petition for rehabilitation has been filed under these rules.
Philippines in the manner prescribed by these rules.

"Foreign count" means a judicial or other authority competent to control or supervise a foreign

The proceedings shall also be summary and non-adversarial in nature. The following pleading are prohibited:
proceeding.

"Foreign proceeding" means a collective judicial or administrative proceeding in a foreign State, (a) Motion to dismiss;
(b) Motion for a bill of particulars:
interim proceeding, pursuant to a law re solvency in which proceeding the assets and affairs of the
debtor are subject to control or supervision by a foreign count, for the purpose of rehabilitation or (c) Petition for relief;
(d) Motion for extension;
re-organization
(e) Motion for postponement
(f) Third-party complaint;
"Foreign Representative" means person or entity, including one appointed on an interim basis, (g) Intervention;
authorized in a foreign proceeding to administer the reorganization or rehabilitation of the debtor or (h) Motion to hear affirmative defenses; and
act as a representative of the foreign proceeding. (I) Any pleading or motion which is similar to or of like effect as any of the foregoing.

"Group of companies" refers to, and can cover only, corporation that are financially refers to, and Any pleading, motion, opposition, defense or claim filed by any interested party shall be supported by verified
can cover only, corporations that are financially rated to one another as parent corporation, statements that the affiant has read same and that the factual allegations therein are true and correct of his
subsidiaries and affiliates. personal knowledge or based on authentic records, and correct of his personal knowledge or based on
authentic records, and shall contain as annexes such documents as may be deemed by the party court may be
When the petition covers a group of companies, all reference under these Rules to "debtor" shall decide matters on the basis of affidavits and other documentary evidence. Where necessary, the court shall
include and apply include and apply to the group of companies. conduct clarificatory hearings before resolving any matter submitted to it for resolution.

"Liabilities" shall refer to monetary claims against the debtor, including stockholders advances that Section 2. Venue. - Petitions for rehabilitation pursuant to these Rules shall be filed in the regional trial court
have been recoded in the debtor's audited financial statements as advances for subscription. which has jurisdiction over the principal office of the debtor as specified in its articles of incorporation or
partnership. Where the principal office of the corporation, partnership or association is registered in the
Securities and Exchange Commission as Metro Manila, the action must be filed in the regional trial court of
"Parent" is a corporation directly or indirectly though one or more intermediaries. the city or municipality where the head office is located.

"Rehabilitation" shall mean the restoration of the debtor to a position of successful operation and A joint petition by a group of companies shall be filed in the Regional Trial Court which has jurisdiction over
solvency, if it is shown that its continuance of operation is economically feasible and its creditors the principal office of the parent company, as specified in its Articles of Incorporation.
can recover by way of the present value of payments projected in the plan more if the corporation
continues as a going concern than if it immediately liquidated.
Section 3. Service of Pleadings and Documents. - When so authorized by the court, any pleading and/or
document required by these Rules may be filed with the court and/or served upon the other parties by facsimile
"Secured claim" shall refer to any clan whose payment or fulfillment is secured by contract or by transmission (fax) or electronic mail (e-mail). In such cases, the date of transmission shall be deemed to be the
law, including any clam or credit enumerated under Articles 2241 and 2242 of the civil Code and dtae of service. Where the pleading or document is voluminous, the court may, upon motion, waive the
Article 110, as amended, of the Labor code of the Philippines. requirement of service; provided that a copy thereof together with all its attachments is duly filed with the
court and is made available for examination and reproduction by any party, and provided, further, that a notice
"Subsidiary" mean a corporation more than fifty percent (50%) of the voting stock of which is of such filing and availability is duly served on the parties.
owned or controlled directly or indirectly though one or more intermediaries by another corporation
Section 4. Trade Secrets and Other Confidential Information. - Upon motion, the court may issue an order to Section 8. Service of Stay Order on Rehabilitation Receiver. - The petitioner shall immediately serve a copy of
protect trade secrets or other confidential research, development or commercial information belonging to the the stay order on the rehabilitation receiver appointed by the court, who shall manifest his acceptance or non-
debtor. acceptance of his appointment not later than ten (10) days from receipt of the order.

Section 5. Executory Nature of Orders. - Any order issued by the court under these Rules is immediately Section 9. Period of Stay Order. - The stay order shall be effective from the date of its issuance until the
executory. A petition to review the order shall not stay the execution of the order unless restrained or enjoined approval of the rehabilitation plan or the dismissal of the petition.
by the appellate court. Unless otherwise provided in these Rules, the review of any order or decision of the
court or an appeal therefrom shall be in accordance with the Rules of Court; provided, however, that the reliefs Section 10. Relief from, Modification, or Termination of Stay Order. -
ordered by the trial or appellate courts shall take into account the need for resolution of proceedings in a just,
equitable and speedy manner.
(a) The court may, upon motion, terminate, modify, or set conditions for the continuance of the stay
order, or relieve a claim from the coverage thereof upon showing that (1) any of the allegations in
Section 6. Nullification of Illegal Transfers and Preferences. - Upon motion the court may nullify any transfer
the petition, or any of the contents of any attachment, or the verification thereof has ceased to be
of property or any other conveyance, sale, payment or agreement made in violation of its stay order or in true; (2) a creditor does not have adequate protection over property securing its claims; (3) the
violation of these Rules.
debtor's secured obligation is more than the fair market value of the property subject of the stay and
such property is not necessary for the rehabilitation of the debtor; or (4) the property covered by the
Section 7. Stay Order. - If the court finds the petition to be sufficient in form and substance, it shall; not later stay order is not essential or necessary to the rehabilitation and the creditor's failure to enforce its
than five (5) working days from the filing of the petition, issue an order: (a) appointing a rehabilitation receive claim will cause more damage to the creditor than to the debtor.
and fixing his bond; (b) staying enforcement of all claims, whether for money or otherwise and whether such
enforcement is by court action or otherwise, against the debtor, its guarantors and persons not solidarily liable
(b) For purposes of this Section, the creditor lacks adequate protection if it can be shown that:
with the debtor; provided, that the stay order shall not cover claims against letters of credit and similar security
arrangements issued by a third party to secure the payment of the debtor's obligations; provided, further, that
the stay order shall not cover foreclosure by a creditor of property not belonging to a debtor under corporate (1) The debtor fails or refuses to honor a pre-existing agreement with the to keep the
rehabilitation; provided, however, that where the owner of such property sought to be foreclosed is also a property insured;
guarantor or one who is not solidarily liable, said owner shall be entitled to the benefit of excussion as such (2) The debtor fails or refuses to take commercially reasonable steps to maintain the
guarantor; (c) prohibiting the debtor from selling, encumbering, transferring, or disposing in any manner any property; or
of its properties except in the ordinary course of business; (d) prohibiting the debtor from making any payment (3) The property has depreciated to an extent that the creditor is undersecured
of its liabilities except as provided in items (e), (f) and (g) of this Section or when ordered by the court
pursuant to Section 10 of Rule 3; (e) prohibiting the debtor's suppliers of goods or services from withholding (c) Upon showing the creditor's lack of adequate protection, the court shall order the rehabilitation
supply of goods and services in the ordinary course of business for as long as the debtor makes payments for receiver to (1) make arrangements to provide for the insurance or maintenance of the property, or
the services and goods supplied after the issuance of the stay order; (f) directing the payment in full of all (2) to make payments or otherwise provide additional or replacement security such as that the
administrative expenses incurred after the issuance of the stay order; (g) directing the payment of new loans or obligation is fully secured. If such arrangements are not feasible, the court shall modify the stay
other forms of credit accommodations obtained for the rehabilitation of the debtor with prior court approval; order to allow the secured creditor lacking adequate protection to enforce its claim against the
(h) fixing the dates of the initial hearing on the petition not earlier than forty-five (45) days but not later than debtor; provided, however, that the court may deny the creditor the remedies in this paragraph if
sixty (60) days from the filing thereof; (I) directing the petitioner to publish the Order in a newspaper of such remedies would prevent the continuation of the debtor as a going concern or otherwise prevent
general circulation in the Philippines once a week for two (2) consecutive weeks; (j) directing the petitioner to the approval and implementation of a rehabilitation plan.
furnish a copy of the petition and its annexes, as well as the stay order, to the creditors named in the petition
and the appropriate regulatory agencies such as, but not limited to, the Securities and Exchange Commission,
the Bangko Sentral ng Pilipinas, the Insurance Commission, the National Telecommunications Commission, Section 11. Qualifications of Rehabilitation Receiver. -
the Housing and Land Use Regulatory Board and the Energy Regulatory Commission; (k) directing the
petitioner that foreign creditors with no known addresses in the Philippines be individually given a copy of the (a) In the appointment of the rehabilitation receiver, the following qualifications shall be taken into
stay order at their foreign addresses; (l) directing all creditors and all interested parties (including the consideration by the court:
regulatory agencies concerned) to file and serve on the debtor a verified comment on or opposition to the
petition, with supporting affidavits and documents, not later than fifteen (15) days before the date of the first
initial hearing and putting them on notice that their failure to do so will bar them from participating in the (1) Expertise and acumen to manage and operate a business similar in size and
proceedings; and (m) directing the creditors and interested parties to secure from the court copies of the complexity to that of the debtor;
petition and its annexes within such time as to enable themselves to file their comment on or opposition to the (2) Knowledge in management, finance and rehabilitation of distressed companies;
petition and to prepare for the initial hearing of the petition. (3) General familiarity with the rights of creditors in suspension of payments or
rehabilitation and general understanding of the duties and obligations of a rehabilitation
receiver;
The issuance of a stay order does not affect the right to commence actions or proceedings insofar as it is (4) Good moral character, independence and integrity;
necessary to preserve a claim against the debtor. (5) Lack of conflict of interest as defined in this Section; and
(6) Willingness and ability to file a bond in such amount as may be determined by the
court.
 (b) Without limiting the generality of the following, a rehabilitation receiver may be deemed to have (m) To study the rehabilitation plan proposed by the debtor or any rehabilitation plan submitted
a conflict of interest if: during the proceedings, together with any comments made thereon;
(n) To prohibit and report to the court any encumbrance, transfer or disposition of the debtor's
(1) He is creditor or stockholder of the debtor; property outside of the ordinary course of business or what is allowed by the court;
(2) He is engaged in a line of business which competes with the debtor; (o) To prohibit and report to the court any payments outside of the ordinary course of business;
(3) He is, or was within two (2) years from the filing of the petition, a director, officer, or (p) To have unlimited access to the debtor's employees, premises, books, records and financial
employee or the auditor or accountant of the debtor;
documents during business hours;
(4) He is or was within two (2) years from the filing of the petition, an underwriter of the
outstanding securities of the debtor; (q) To inspect, copy, photocopy or photograph any document, paper, book, account or letter,
(5) He is related by consanguinity or affinity within the fourth civil degree to any whether in the possession of the debtor or other persons;
creditor, stockholder, director, officer, employee, or underwriter of the debtor; or (r) To gain entry into any property for the purpose of inspecting, measuring, surveying or
(6) He has any other direct or indirect material interest in the debtor or any creditor. photographing it or any designated relevant object or operation thereon;
(s) To take possession, control and custody of the debtor's assets;
Section 12. Powers and Functions of Rehabilitation Receiver. - The rehabilitation receiver shall not take over (t) To notify counterparties and the court as to contracts that the debtor has decided to continue to
the management and control of the debtor but shall closely oversee and monitor the operations of the debtor perform the breach;
during the pendency of the proceedings. For this purpose, the rehabilitation receiver shall have the powers, (u) To be notified of and to attend all meetings of the board of directors and stockholder of the
duties and functions of a receiver under Presidential Decree No. 902-A, as amended, and the Rules of Court. debtor;
(v) To recommend any modification of an approved rehabilitation plan as he may deem appropriate;
The rehabilitation receiver shall be considered as an officer of the court. He shall be primarily tasked to study (w) To bring to the attention of the court any material change affecting the debtor's ability to meet
the best way to rehabilitate the debtor and to ensure that the value of the debtor's property is reasonably the obligations under the rehabilitation plan;
maintained pending the determination of whether or not the debtor should be rehabilitated, as well as
(x) To recommend the appointment of a management committee in the cases provided for under
implement the rehabilitation plan after its approval. Accordingly, he shall have the following powers and
functions: Presidential Decree No. 902-A, as amended;
(y) To recommend the termination of the proceedings and the dissolution of the debtor if he
determines that the continuance in business of such entity is no longer feasible or profitable or no
(a) To verify the accuracy of the petition, including its annexes such as the Schedule of Debts and
longer works to the best interest of the stockholders, parties-litigants, creditors or the general public;
Liabilities and the Inventory of Assets submitted in support to the petition;
(z) To apply to the court for any order or directive that he may deem necessary or desirable to aid
(b) To accept and incorporate, when justified, amendments to the Schedule of Debts and Liabilities;
him in the exercise of his powers and performance of his duties and functions; and
(c) To recommend to the court the disallowance of claims and rejection of amendments t the
(aa) To exercise such other powers as may from time to time be conferred upon him by the court.
Schedule of Debts and Liabilities that lack sufficient proof and justification;
(d) To submit to the court and make available for review by the creditors, a revised Schedule of
Debts and Liabilities; Section 13. Oath and Bond. - Before entering upon his powers, duties and functions, the rehabilitation receiver
(e) To investigate the acts, conduct, properties, liabilities and financial condition of the debtor, the must be sworn in to perform them faithfully, and must post a bond executed in favor of the debtor in such sum
as the court may direct, to guarantee that he will faithfully discharge his duties and obey the orders of the
operation of its business and the desirability of the continuance thereof; and, any other matter
court. If necessary, he shall also declare under oath that he will perform the duties of a trustee of the assets of
relevant to the proceeding or to the formulation of a rehabilitation plan; the debtor, will act honestly and in good faith, and deal with the assets of the debtor on a commercially
(f) To examine under oath the directors and officers of the debtor and any other witnesses that he reasonable manner.
may deem appropriate;
(g) To make available to the creditors documents and notices necessary for them to follow and Section 14. Fees and Expenses. - The rehabilitation receiver and the persons hired by him shall be entitled to
participate in the proceedings; reasonable professional fees and reimbursement of expenses which shall be considered as administrative
(h) To report to the court any fact ascertained by him pertaining to the causes of the debtor's expenses.
problems, fraud, preferences, dispositions, encumbrances, misconduct, mismanagement and
irregularities committed by the stockholders, directors, management,, or any other person against Section 15. Immunity from Suit. - The rehabilitation receiver shall not be subject to any action, claim or
the debtor; demand in connection with any act done or omitted by him in good faith in the exercise of his functions and
(i) To employ such person or persons such as lawyers, accountants, appraisers and staff are powers herein conferred.
necessary in performing his functions and duties as rehabilitation receiver;
(j) To monitor the operations of the debtor and to immediately report to the court any material Section 16. Reports. - The rehabilitation receiver shall file a written report every three (3) months to the court
adverse change in the debtor's business; or as often as the court may require on the general condition of the debtor. The report shall include, at the
(k) To evaluate the existing assets and liabilities, earnings and operations of the debtor; minimum, interim financial statements of the debtor.
(l) To determine and recommend to the court the best way to salvage and protect the interests of the
creditors, stockholders and the general public; Section 17. Dismissal of Rehabilitation Receiver. - A rehabilitation receiver may, upon motion, be dismissed
by the court on the following grounds: (a) if he fails, without just cause, to perform any of his powers and
functions under these Rules; or (b) on any of the grounds for removing a trustee under the general principles of (f) Determination that the rehabilitation plan may no longer be implemented in accordance with its
trusts. terms, conditions, restrictions or assumptions; or
(g) Successful implementation of the rehabilitation plan.
Section 18. Rehabilitation Plan. - The rehabilitation plan shall include (a) the desired business targets or goals
and the duration and coverage of the rehabilitation; (b) the terms and conditions of such rehabilitation which
Section 24. Discharge of Rehabilitation Receiver. - Upon termination of the rehabilitation proceedings, the
shall include the manner of its implementation, giving due regard to the interests of secured creditors such as,
rehabilitation receiver shall submit his final report and accounting with such period of time as the court will
but not limited, to the non-impairment of their security liens or interests; (c) the material financial
allow him. Upon approval of his report and accounting, the court shall order his discharge.
commitments to support the rehabilitation plan; (d) the means for the execution of the rehabilitation plan,
which may include debt to equity conversion, restructuring of the debts, dacion en pago or sale exchange or
any disposition of assets or of the interest of shareholders, partners or members; (e) a liquidation analysis RULE 4
setting out for each creditor that the present value of payments it would receive under the plan is more than DEBTOR-INITIATED REHABILITATION
that which it would receive if the assets of the debtor were sold by a liquidator within a six-month period from
the estimated date of filing of the petition; and (f) such other relevant information to enable a reasonable Section 1. Who May Petition. - Any debtor who foresees the impossibility of meeting its debts when they
investor to make an informed decision on the feasibility of the rehabilitation plan. respectively fall due, may petition the proper regional trial court for rehabilitation.

Section 19. Repayment Period. - If the rehabilitation plan extends the period for the debtor to pay its A group of companies may jointly file a petition for rehabilitation under these Rules when one or more of its
contractual obligations, the new period should not extend beyond fifteen (15) years from the expiration of the constituent corporations foresee the impossibility of meeting debts when they respectively fall due, and the
stipulated term existing at the time of filing of the petition. financial distress would likely adversely affect the financial condition and/or operations of the other member
companies of the group is essential under the terms and conditions of the proposed rehabilitation plan.
Section 20. Effects of Rehabilitation Plan. - The approval of the rehabilitation plan by the court shall result in
the following: Section 2. Contents of Petition. -

(a) The plan and its provisions shall be binding upon the debtor and all persons who may be affected (a) The petition filed by the debtor must be verified and must set forth with sufficient particularity
thereby, including the creditors, whether or not such persons have participated in the proceedings or all the following material facts: (1) the name and business of the debtor; (2) the nature of the
opposed the plan or whether or not their claims have been scheduled; business of the debtor; (3) the history of the debtor; (4) the cause of its inability to pay its debts; (5)
(b) The debtor shall comply with the provisions of the plan and shall take all actions necessary to all the pending actions or proceedings known to the debtor and the courts or tribunals where they
carry out the plan; are pending; (6) threats or demands to enforce claims or liens against the debtor; and (7) the manner
(c) Payments shall be made to the creditors in accordance with the provisions of the plan; by which the debtor may be rehabilitated and how such rehabilitation may benefit the general body
of creditors, employees and stockholders.
(d) Contracts and other arrangements between the debtor and its creditors shall be interpreted as
continuing to apply to the extent that they do not conflict with the provisions of the plan; and
(b) The petition shall be accompanied by the following documents:
(e) Any compromises on amounts or rescheduling of timing of payments by the debtor shall be
binding on creditors regardless of whether or not the plan is successfully implemented.
(1) An audited financial statement of the debtor at the end of its last fiscal year;
Section 21. Revocation of Rehabilitation Plan on Grounds of Fraud. - Upon motion, within ninety (90) days
from the approval of the rehabilitation plan, and after notice and hearing, the court may revoke the approval (2) Interim financial statements as of the end of the month prior to the filing of the
thereof on the ground that the same was secured through fraud. petition;

Section 22. Alteration or Modification of Rehabilitation Plan. - An approved rehabilitation plan may, upon (3) A Schedule of Debts and Liabilities which lists all the creditors of the debtor,
motion, be altered or modified if, in the judgement of the court, such alteration or modification is necessary to indicating the name and last address of record of each creditor; the amount of each claim
achieve the desired targets or goals set forth therein. as to principal, interest, or penalties due as of the date of filing; the nature of the claim;
and any pledge, lien, mortgage judgement or other security given for the payment thereof;
Section 23. Termination of Proceedings. - The court shall, upon motion or upon recommendation of the
rehabilitation receiver, terminate the proceeding in any of the following cases: (4) An Inventory of Assets which must list with reasonable specificity all the assets of the
debtor, stating the nature of each asset, the location and condition thereof, the book value
or market value of the asset, and attaching the corresponding certificate of title thereof in
(a) Dismissal of the petition; case of real property, or the evidence of title or ownership in case of movable property,
(b) Failure of the debtor to submit the rehabilitation plan; the encumbrances, liens or claims thereon, if any, and the identities and addresses of the
(c) Disapproval of the rehabilitation plan by the court; lienholders and claimants. The Inventory shall include a Schedule of Accounts
(d) Failure to achieve the desired targets or goals as set forth in the rehabilitation plan; Receivable which must indicate the amount of each, the persons from who due, the date
(e) Failure of the debtor to perform its obligations under the plan; of maturity and the degree of collectibility categorizing them as highly collectible to
remotely collectible;
 (5) A rehabilitation plan which conforms with the minimal requirements set out in personal property, estate, effects or rights of action, and petitioner, its officers, directors and stockholders have
Section 18 of Rule 3; not in any way compounded with any of its creditors in order to give preference to such creditors, or to receive
or to accept any profit or advantage therefrom, or to defraud or deceive in any manner any creditor to whom
petitioner is indebted. Petitioner, its officers, directors, and stockholders have been acting in good faith and
(6) A Schedule of Payments and Disposition of Assets which the debtor may have
effected within three (3) months immediately preceding the filing of the petition; with due diligence.

Section 4. Opposition to or Comment on Petition. - Every creditor of the debtor or any interested party shall
(7) A Schedule of Cash Flow of the debtor for three (3) months immediately preceding
the filing of the petition, and a detailed schedule of the projected cash flow for the file his verified opposition to or comment on the petition not later than fifteen (15) days before the date of the
initial hearing fixed in the stay order. After such time, no creditor or interested party shall be allowed to file
succeeding three (3) months;
any comment thereon or opposition thereto without leave of court.

(8) A Statement of Possible Claims by or against the debtor which must contain a brief
If the Schedule of Debts and Liabilities omits a claim or liability, the creditor concerned shall attach to its
statement of the facts which might give rise to the claim and an estimate of the probable
amount thereof; comment or opposition a verified statement of the obligations allegedly due it.

Section 5. Initial Hearing. -

(9) An Affidavit of General Financial Condition which shall contain answers to the
questions or matters prescribed in Annex "A" hereof;
(a) On or before the initial hearing set in the order mentioned in Section 7 of Rule 3, the petitioner
shall file a publisher's affidavit showing that the publication requirements and a petitioner's affidavit
(10) At least three (3) nominees for the position of rehabilitation receiver as well as their
qualifications and addresses, including but not limited to their telephone numbers, fax showing that the notification requirement for foreign creditors had been complied with, as required
in the stay order.
numbers and e-mail address; and

(11) A certificate attesting under oath that (i) the filing of the petition has been duly (b) Before proceeding with the initial hearing, the court shall determine whether the jurisdictional
requirements set forth above had been complied with. After finding that such requirements are met,
authorized; and (ii) the directors and stockholders of the debtor have irrevocably
approved and/or consented to, in accordance with existing laws, all actions or matters the court shall ensure that the parties consider in detail all of the following:
necessary and desirable to rehabilitate the debtor including, but not limited to,
amendments to the articles of incorporation and by-laws or articles of partnership; (1) Amendments to the rehabilitation plan proposed by the debtor;
increase or decrease in the authorized capital stock; issuance of bonded indebtedness;
alienation, transfer, or encumbrance of assets of the debtor; and modification of
(2) Simplification of the issues;
shareholders' rights.

(3) The possibility of obtaining stipulations and admission of facts and documents,
(c) Five (5) copies of the petition shall be filed with the court.
including resort to request for admission under Rule 26 of the Rule of Court;

Section 3. Verification by Debtor. - The petition filed by the debtor must be verified by an affidavit of a (4) The possibility of amicably agreeing on any issue brought up in the comments on, or
responsible officer of the debtor and shall be in a form substantially as follows:
opposition to, the petition;

"I, ___________________, (position) of (name of petitioner), do solemnly swear that the petitioner has been (5) Referral of any accounting, financial and other technical issues to an expert;
duly authorized to file the petition and that the stockholders and board of directors (or governing body) have
approved and/or consented to, accordance with law, all actions or matters necessary or desirable to rehabilitate
the debtor. The petition is being filed to protect the interests of the debtor, the stockholders, the inventors and (6) The possibility of submitting the petition for decision on the basis of the comments,
the creditors of the debtor, which warrant the appointment of a rehabilitation receiver. There is no petition for opposition, affidavit and other documents on record;
insolvency filed with any other body, court of tribunal affecting the petitioner. The Inventory of Assets and the
Schedule of Debts and Liabilities contains a full, correct and true description of all debts and liabilities and of (7) The possibility of a new rehabilitation plan voluntarily agreed upon by the debtor and
all goods, effects, estate and property of whatever kind of class belonging to petitioner. The Inventory also its creditors; and
contains a full, correct and true statement of all debts owing or due to petitioner, or to any person or persons in
trust for petitioner and of all securities and contracts whereby any money may hereafter become due or
payable to petitioner or by or through which any benefit or advantage may accrue to petitioner. The petition (8) Such other matters as may aid in the speedy and summary disposition of the case.
contains a concise statement of the facts giving rise, or which might give rise, to any cause of action in favor
of petitioner. Petitioner has no land, money, stock, expectancy, or property of any kind, except those set forth Section 6. Additional Hearings. - The court may hold additional hearings as part of the initial hearing
in the Inventory of Assets. Petitioner has, in no instance, created or acknowledged a debt for a greater sum contemplated in these Rules but the initial hearing must be concluded not later than ninety (90) days from the
than the true and correct amount. Petitioner, its officers, directors and stockholders have not, directly or initial date of the initial hearing fixed in the stay order.
indirectly, concealed, fraudulently sold or otherwise fraudulently disposed of, any part of petitioner's real or
Section 7. Order After Initial Hearing. - Section 10. modification of Proposed Rehabilitation Plan. - The debtor may modify its rehabilitation plan in
the light of the comments of the rehabilitation receiver and creditors or any interested party and submit a
(a) Within twenty (20) days after the last hearing, the court shall issue an order which shall: revised or substitute rehabilitation plan for the final approval of the court. Such rehabilitation plan must be
submitted to the court not later than ten (10) moths from the date of filing of the petition.

(1) Give due course to the petition and immediately refer the petition and its annexes to
the rehabilitation receiver who shall evaluate the rehabilitation plan and submit his Section 11. Approval of Rehabilitation Plan. - The court may approve a rehabilitation plan even over the
opposition of creditors of the debtor if, in its judgement, the rehabilitation of the debtor is feasible and the
recommendations to the court not later than ninety (90) days from the date of the last
initial hearing, if the court is satisfied that there is merit to the petition, otherwise the opposition of the creditors is manifestly unreasonable if the following are present:
court shall immediately dismiss the petition; and
(a) The rehabilitation plan complies with the requirements specified in Section 18 of Rule 3;
(2) Recite in detail the matters taken up in the initial hearing and the action taken thereon,
including a substitute rehabilitation plan contemplated in Sections 5 (b)(7) and (8) of this (b) The rehabilitation plan would provide the objecting class of creditors with payments whose
Rule; present value projected in the plan would be greater than that which they would have received if the
assets of the debtor were sold by a liquidator within a six (6)-month period from the date of filing of
the petition; and
(b) If the debtor and creditors agree on a new rehabilitation plan pursuant to Section 5 (b)(7) of this
Rule, the order shall so state the fact and require the rehabilitation receiver to supply the details of
the plan and submit it for the approval of the court not later than sixty (6) days from the date of the (c) The rehabilitation receiver has recommended approval of the plan.
last initial hearing. The court shall approve the new rehabilitation plan not later than ninety (90)
days from the date of the last initial hearing upon concurrence of the following: In approving the rehabilitation plan, the court shall ensure that the rights of the secured creditors are not
impaired. The court shall also issue the necessary orders or processes for its immediate and successful
(1) Approval or endorsement of creditors holding at least two-thirds (2/3) of the total implementation. it may impose such terms, conditions, or restrictions as the effective implementation and
liabilities of the debtor including secured creditors holding more than fifty percent (50%) monitoring thereof may reasonably require, or for the protection and preservation of the interests of the
of the total secured claims of the debtor and unsecured creditors holding more than fifty creditors should the plan fall.
percent (50%) of the total unsecured claims of the debtor;
Section 12. Period to Decide Petition. - The court shall decide the petition within one (1) year from the date of
(2) The rehabilitation plan complies with the requirements specified in Section 18 of Rule filing of the petition, unless the court, for good cause shown, is able to secure an extension of the period from
3; the Supreme Court.

(3) The rehabilitation plan would provide the objecting class of creditors with payments RULE 5
whose present value projected in the plan would be greater than that which they would CREDITOR-INITIATED REHABILITATION
have received if the assets of the debtor were sold by a liquidator within a six (6) month
period from the date of filing of the petition; and Section 1. Who May Petition. - Any creditor or creditors holding at least twenty percent (20%) of the debtor's
total liabilities may file a petition with the proper regional trial court for rehabilitation of a debtor that cannot
(4) The rehabilitation receiver has recommended approval of the plan. meet its debts as they respectively fall due.

The approval by the court of the new rehabilitation plan shall have the same effect as approval of a Section 2. Requirements for Creditor-Initiated Petitions. - Where the petition is filed by a creditor or creditors
rehabilitation plan under Section 20 of Rule 3. under this Rule, it is sufficient that the petition is accompanied by a rehabilitation plan and a list of at least
three (3) nominees to the position of rehabilitation receiver and verified by a sworn statement that the affiant
has read the petition and that its contents are true and correct of his personal knowledge or based on authentic
Section 8. Creditors' Meetings. - If no new rehabilitation plan is agreed upon by the debtor and the creditors,
the rehabilitation receiver, at any time before he submits his evaluation on the debtor-proposed rehabilitation records and that the petition is being filed to protect the interests of the debtor, the stockholders, the investors
and the creditors of the debtor.
plan to the court as prescribed in Section 7(a)(1) of this Rule, shall, either alone or with the debtor, meet with
the creditors or any interested party t discuss the plan with a view to clarifying or resolving any matter
connected therewith. Section 3. Applicability of Provisions Relating to Debtor-Initiated Rehabilitation. - The provisions of Sections
5 to 12 of Rule 4 shall apply to rehabilitation under this Rule.
Section 9. Comments on or Opposition to Rehabilitation Plan. - Any creditor or interested party of record may
file comments on or opposition to the proposed rehabilitation plan, with a copy given to the rehabilitation RULE 6
receiver, not later than sixty (60) days from the date of the last initial hearing. The court shall conduct PRE-NEGOTIATED REHABILITATION
summary and non-adversarial proceedings to receive evidence, if necessary, in hearing the comments on and
opposition to the plan.
Section 1. Pre-negotiated Rehabilitation Plan. - A debtor that foresees the impossibility of meeting its debts as
they fall due may, by itself or jointly with any of its creditors, file a verified petition for the approval of a pre-
negotiated rehabilitation plan. The petition shall comply with Section 2 of Rule 4 and be supported by an (j) Prohibit the debtor from making any payment of its liabilities outstanding as of the date of filing
affidavit showing the written approval or endorsement of creditors holding at least two-thirds (2/3) of the total of the petition;
liabilities of the debtor, including secured creditors holding more than fifty percent (50%) of the total secured
claims of the debtor and unsecured creditors holding more than fifty percent (50%) of the total unsecured
(k) Prohibit the debtor's suppliers of goods or services from withholding supply of goods and
claims of the debtor. services in the ordinary course of business for as long as the debtor makes payments for the services
and goods supplied after the issuance of the stay order;
Section 2. Issuance of Order. - If the court finds the petition sufficient in form and substance, it shall, not later
than five (5) working days from the filing of the petition, issue an order which shall: (l) Direct the payment in full of all administrative expenses incurred after the issuance of the stay
order; and
(a) Identify the debtor, its principal business or activity/ies and its principal place of business;
(m) Direct the payment of new loans or other forms of credit accommodations obtained for the
(b) Direct the publication of the order in a newspaper of general circulation once a week for at least rehabilitation of the debtor with prior court approval.
two (2) consecutive weeks, with the first publication to be made within seven (7) days from the time
of its issuance; Section 3. Approval of Plan. - Within ten (10) days from the date of the second publication of the order
referred to in Section 2 of this Rule, the court shall approve the rehabilitation plan unless a creditor or other
(c) Direct the service by personal delivery of a copy of the petition on each creditor who is not a interested party submits a verified objection to it in accordance with the next succeeding section.
petitioner holding at least five percent (5%) of the total liabilities of the debtor, as determined in the
schedule attached to the petition, within three (3) days;
Section 4. Objection to Petition or Rehabilitation Plan. - Any creditor or other interested party may submit to
the court a verified objection to the petition or the rehabilitation plan. The objection shall be limited to the
(d) Direct the petitioner to furnish a copy of the petition and its annexes, as well as the stay order, to following:
the relevant regulatory agency;
(a) The petition or the rehabilitation plan or their attachments contain material omissions or are
(e) State that copies of the petition and the rehabilitation plan are available for examination and materially false or misleading;
copying by any interested party;
(b) The terms of rehabilitation are unattainable; or
(f) Direct creditors and other parties interested (including the Securities and Exchange Commission
and the relevant regulatory agencies such as, but not limited to, the Bangko Sentral ng Pilipinas, the
(c) The approval or endorsement of creditors required under Section 1 of this Rule has not been
Insurance Commission, the National Telecommunications Commission, the Housing and Land Use obtained
Regulatory Board and the Energy Regulatory Commission) in opposing the petition or rehabilitation
plan to file their verified objections thereto or comments thereon within a period of not later than
twenty (20) days from the second publication of the order, with a warning that failure to do so will Copies of any objection to the petition or the rehabilitation plan shall be served on the petitioning debtor
bar them from participating in the proceedings; and/or creditors.

(g) Appoint the rehabilitation receiver named in the plan, unless the court finds that he is not Section 5. Hearing on Objections. - The court shall set the case for hearing not earlier than ten (10) days and
qualified under these Rules in which case it may appoint a qualified rehabilitation receiver of its no longer than twenty (20) days from the date of the second publication of the order mentioned in Section 2 of
choice; this Rule on the objections is in accordance with the immediately preceding section, it shall direct the
petitioner to cure the defect within a period fifteen (15) days from receipt of the order.
(h) Stay enforcement of all claims, whether for money or otherwise and whether such enforcement
is by court action or otherwise, against the debtor, its guarantors and persons not solidarily liable Section 6. Period for Approval of Rehabilitation Plan. - The court shall decide the petition not later than one
with the debtor; provided, that the stay order shall not cover claims against letters of credit and hundred twenty (120) days from the date of the filing of the petition. If the court fails to do so within said
similar security arrangements issued by a third party to secure the payment of the debtor's period, the rehabilitation plan shall be deemed approved.
obligations; provided further, that the stay order shall not cover foreclosure by a creditor of property
not belonging to a debtor under corporate rehabilitation; provided, however, that where the owner of Section 7. Effects of Approval of Rehabilitation Plan. - Approval of the rehabilitation plan under this Rule
such property sought to be foreclosed is also a guarantor or one who is not solidarily liable, said shall have the same legal effect as approval of a rehabilitation plan under Section 20 of Rule 3.
owner shall be entitled to be benefit of excussion as such guarantor;

Section 8. Revocation of Approved Rehabilitation Plan. - Not later than thirty (30) days from the approval of a
(i) Prohibit the debtor from selling, encumbering, transferring, or disposing in any manner any of its rehabilitation plan under this Rule, the plan may, upon motion and after notice and hearing, be revoked on the
properties except in the ordinary course of business; ground that the approval was secured by fraud or that the petitioner has failed to cure the defect ordered by the
court pursuant to Section 5 of this Rule.
Section 9. Effect of Rule on Pending Petitions. - Any pending petition for rehabilitation that has not undergone Section 7. Provisional Relief that May be Granted upon Application for Recognition of Foreign Proceeding.  -
the initial hearing prescribed under the Interim Rules of Procedure for Corporate Rehabilitation at the time of From the time of filing a petition for recognition until the same is decided upon, the court may, upon motion of
the effectivity of these Rules may be converted into a rehabilitation proceeding under this Rule. the foreign representative where relief is urgently needed to protect the assets of the debtor or the interests of
the creditors, grant relief of a provisional nature, including:
RULE 7
RECOGNITION OF FOREIGN PROCEEDINGS (a) Staying execution against the debtor's assets;

Section 1. Scope of Application. - This Rule applies where (a) assistance is sought in a Philippine court by a (b) Entrusting the administration or realization of all or part of the debtor's assets located in the
foreign court or a foreign representative in connection with a foreign proceeding; (b) assistance is sought in a Philippines to the foreign representative or another person designated by the court in order to protect
foreign State in connection with a domestic proceeding governed by these Rules; or (c) a foreign proceeding and preserve the value of assets that, by their nature or because of other circumstances, are
and a domestic proceeding are concurrently taking place. perishable, susceptible to devaluation or otherwise in jeopardy;

The sole fact that a petition is filed pursuant to this Rule does not subject the foreign representative or the (c) Any relief mentioned in Section 9(a)(1), (2) and (7) of this Rule.
foreign assets and affairs of the debtor to the jurisdiction of the local courts for any purpose other than the
petition.
Section 8. Effects of Recognition of Foreign Proceeding. - Upon recognition of a foreign proceeding:

Section 2. Non-Recognition of Foreign Proceeding. - Nothing in this Rule prevents the court from refusing to (a) Commencement or continuation of individual actions or individual proceedings concerning the
take an action governed by this Rule if (a) the action would be manifestly contrary to the public policy of the
debtor's assets, rights, obligations or liabilities is stayed; provided, that such stay does not affect the
Philippines; and (b) if the court finds that the country of which the petitioner is a national does not grant right to commence individual actions or proceedings to the extent necessary to preserve a claim
recognition to a Philippine rehabilitation proceeding in a manner substantially in accordance with this Rule.
against the debtor.

Section 3. Petition for Recognition of Foreign Proceeding. - A foreign representative may apply with the (b) Execution against the debtor's assets is stayed; and
Regional Trial Court where the debtor resides for recognition of the foreign proceeding in which the foreign
representative has been appointed.
(c) The right to transfer, encumber or otherwise dispose of any assets of the debtor is suspended.
A petition for recognition shall be accompanied by:
Section 9. Relief That May be Granted After Recognition of Foreign Proceeding. -
(a) A certified copy of the decision commencing the foreign proceeding and appointing the foreign
representative; or (a) Upon recognition of a foreign proceeding, where necessary to protect the assets of the debtor or
(b) A certificate from the foreign court affirming the existence of the foreign proceeding and of the the interests of the creditors, the court may, upon motion of the foreign representative, grant any
appointment of the foreign representative; or appropriate relief including:
(c) In the absence of evidence referred to in subparagraph (a) and (b), any other evidence acceptable
to the court of the existence of the foreign proceeding and of the appointment of the foreign (1) Staying the commencement or continuation of individual actions or individual
representative. proceedings concerning the debtor's assets, rights, obligations or liabilities to the extent
they have not been stayed under Section 8(a) of this Rule;

Section 4. Recognition of Foreign Proceeding. - A foreign proceeding shall be recognized if: (2) Staying execution against the debtor's assets to the extent it has not been stayed under
Section 8(b) of this Rule;
(a) The proceeding is a foreign proceeding as defined herein;
(b) The person or body applying for recognition is a foreign representative as defined herein; and (3) Suspending the right to transfer, encumber or otherwise dispose of any assets of the
(c) The petition meets the requirements of Section 3 of this Rule; debtor to the extent this right has not been suspended under Section 8(c) of this Rule;
Section 5. Period to Recognize Foreign Proceeding. - A petition for recognition of a foreign proceeding shall
be decided within thirty (30) days from the filing thereof. (4) Providing for the examination of witnesses, the taking of evidence or the delivery of
information concerning the debtor's assets, affairs, rights, obligations or liabilities;
Section 6. Notification to Court. - From the time of filing the petition for recognition f the foreign proceeding,
the foreign representative shall inform the court promptly of: (5) Entrusting the administration or realization of all or part of the debtor's assets located
(a) Any substantial change in the status of the foreign proceeding or the status of the foreign in the Philippines to the foreign representative or another person designated by the court;
representative's appointment; and
(b) Any other foreign proceeding regarding the same debtor that becomes known to the foreign
representative. (6) Extending the relief granted under Section 7 of this Rule;
 (7) Granting any additional relief that may be available to the rehabilitation receiver (h) Implementation of rehabilitation or re-organization plan for the debtor.
under these laws.
Nothing in this Rule limits the power of the court to provide additional assistance to the foreign representative
(b) Upon recognition of a foreign proceeding, the court may, at the request of the foreign under other applicable laws.
representative, entrust the distribution of all or part of the debtor's assets located in the Philippines
to the foreign representative or another person designated by the court; provided that the court is
satisfied that the interests of local creditors are adequately protected. Section 15. Commencement of Local Proceeding after Recognition of Foreign Proceeding. - After the
recognition of a foreign proceeding, a local proceeding under these Rules may be commenced only if the
debtor is doing business in the Philippines, the effects of the proceedings shall be restricted to the assets of the
Section 10. Protection of Creditors and Other Interested Persons. - debtor located in the country and, to the extent necessary to implement cooperation and coordination under
Sections 13 and 14 of this Rule, to the other assets of the debtor that, under local laws, must be administered in
(a) In granting or denying relief under this Rule or in modifying or terminating the relief under that proceeding.
paragraph (c) of this Section, the court must be satisfied that the interests of the creditors and other
interested persons, including the debtor, are adequately protected. Section 16. Local and Foreign Proceedings. - Where a foreign proceeding and a local proceeding are taking
place concurrently regarding the same debtor, the court shall seek cooperation and coordination under Section
(b) The court may subject the relief granted under Section 7 or Section 9. Of this Rule to conditions 13 and 14 of this Rule. Any relief granted to the foreign proceeding must be made consistent with the relief
it considers appropriate. granted in the local proceeding.

(c) The court may, upon motion of the foreign representative or a person affected by the relief RULE 8
granted under Section 7 or Section 9 of this Rule, or on its own motion, modify or terminate such PROCEDURAL REMEDIES
relief.
Section 1. Motion for Reconsideration. - A party may file a motion for reconsideration of any order issued by
Section 11. Actions to Avoid Acts Detrimental to Creditors. - Upon recognition of a foreign proceeding, the the court prior to the approval of the rehabilitation plan. No relief can be extended to the party aggrieved by
foreign representative acquires the standing to initiate actions to avoid or otherwise render ineffective acts the court's order on the motion through a special civil action for certiorari under Rule 65 of the rules of Court.
detrimental to creditors that are available under these Rules. Such order can only be elevated to the Court of Appeals as an assigned error in the petition for review of the
decision or order approving or disapproving the rehabilitation plan.
Section 12. Intervention by Foreign Representative in Philippine Proceedings. - Upon recognition of a foreign
proceeding, the foreign representative may intervene in any action or proceeding in the Philippines in which An order issued after the approval of the rehabilitation plan can de reviewed only through a special civil action
the debtor is a party. for certiorari under Rule 65 of the Rules of Court.

Section 13. Cooperation and Direct Communication with Foreign Courts and Foreign Representatives. - In Section 2. Review of Decision or Order on Rehabilitation Plan. - an order approving or disapproving a
matters covered by this Rule, the court shall cooperate to the maximum extent possible with foreign courts or rehabilitation plan can only be reviewed through a petition for review to the Court of Appeals under Rule 43 of
foreign representatives. the Rules of Court within fifteen (15) days from notice of the decision or order.

The court is entitled to communicate directly with, or request information or assistance directly from, foreign RULE 9
courts or foreign representatives. FINAL PROVISIONS

Section 14. Forms of Cooperation. - Cooperation may be implemented by any appropriate means, including Section 1. Severability. - If any provision or section of these Rules is held invalid, the other provisions or
but not limited to the following: sections shall not be affected thereby.

(a) Appointment of a person or body to act at the discretion of the court; Section 2. Transitory Provision. - Unless the court orders otherwise to prevent manifest injustice, any pending
petition for rehabilitation that has not undergone the initial hearing prescribed under the Interim Rules of
(b) Communication of information by any means considered appropriate by the court;
Procedure for Corporate Rehabilitation at the time of the effectivity of these Rules shall be governed by these
(c) Coordination of the administration and supervision of the debtor's assets and affairs; rules.
(d) Approval or implementation by courts of agreements concerning the coordination of
proceedings;
Section 3. Effectivity. - These Rules shall take affect on 16 January 2009 following its publication in two (2)
(e) Coordination of concurrent proceedings regarding the same debtor; newspapers of general circulation in the Philippines.
(f) Suspension of proceedings against the debtor;
(g) Limiting the relief of assets that should be administered in a foreign proceeding pending in a
ANNEX "A"
jurisdiction other than the place where the debtor has its principal place of business (foreign non- AFFIDAVIT OF GENERAL FINANCIAL CONDITION
main proceeding) or information required in that proceeding; and
(1) Are you an officer of the debtor referred to in these proceedings? (29) Have employees' wages and salaries been kept current? If not, how much are in arrears and
(2) What is your full name and what position do you hold in the debtor? what time period do the arrears represent?
(3) What is the full name of the debtor and what is the address of its head office?
(4) When was it formed or incorporated? (30) Have obligation to the government and its agencies been kept current? If not, how much are in
(5) When did the debtor commence business? arrears and what time period do the arrears represent?
(6) What is the nature of its business? What is the market share of the debtor in the industry in
which it is engaged?
(7) Who are the parties, members, or stockholders? How many employees?
(8) What is the capital of the debtor?
(9) What is the capital contribution and what is the amount of the capital, paid and unpaid, of each
of the partners or shareholders?
(10) Do any of these people hold the shares in trust for others?
(11) Who are the directors and officers of the debtors?
(12) Has the debtor any subsidiary corporation? If so, give particulars?
(13) Has the debtor properly maintained its books and are they updated?
(14) Were the books audited annually?
(15) If so, what is the name of the auditor and when was the last audited statement drawn up?
(16) Have all proper returns been made to the various government agencies requiring same?
(17) When did the debtor first become aware of its problems?
(18) Has the debtor within the twelve months preceding the filing of the petition:
(a) made any payments, returned any goods or delivered any property to any of its
creditors, except in the normal course of business?
(b) executed any mortgage, pledge, or security over any of its properties in favor of any
creditor?
(c) transferred or disposed of any of its properties in payment of any debt?
(d) sold, disposed of, or removed any of its property except in the ordinary course of
business?
(e) sold any merchandise at less than fair market value or purchased merchandise or
services at more than fair market value? G.R. No. 165744             August 11, 2008
(f) made or been a party to any settlement of property in favor of any person? OSCAR C. REYES, petitioner vs. HON. REGIONAL TRIAL COURT OF MAKATI, Branch 142,
If, so, give particulars. ZENITH INSURANCE CORPORATION, and RODRIGO C. REYES, respondents.
(19) Has the debtor recorded all sales or dispositions of assets? DECISION
(20) What were the sales for the last three years and what percentage of the sales represented the BRION, J.:
profit or markup?
(21) What were the profits or losses for the debtor for the last three years? This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set aside the Decision of
(22) What are the causes of the problems of the debtor? Please provide particulars? the Court of Appeals (CA)1 promulgated on May 26, 2004 in CA-G.R. SP No. 74970. The CA Decision
(23) When did you first notice these problems and what actions did the debtor take to rectify them? affirmed the Order of the Regional Trial Court (RTC), Branch 142, Makati City dated November 29, 2002 2 in
Civil Case No. 00-1553 (entitled "Accounting of All Corporate Funds and Assets, and Damages") which
(24) How much do you estimate is needed to rehabilitate the debtor?
denied petitioner Oscar C. Reyes’ (Oscar) Motion to Declare Complaint as Nuisance or Harassment Suit.
(25) Has any person expressed interest in investing new money into the debtor?
BACKGROUND FACTS
(26) Are there any pending and threatened legal actions against the debtor? If so, please provide Oscar and private respondent Rodrigo C. Reyes (Rodrigo) are two of the four children of the spouses Pedro
particulars. and Anastacia Reyes. Pedro, Anastacia, Oscar, and Rodrigo each owned shares of stock of Zenith Insurance
Corporation (Zenith), a domestic corporation established by their family. Pedro died in 1964, while Anastacia
(27) Has the debtor discussed any restructuring or repayment plan with any of the creditors? Please died in 1993. Although Pedro’s estate was judicially partitioned among his heirs sometime in the 1970s, no
provide status and details. similar settlement and partition appear to have been made with Anastacia’s estate, which included her
shareholdings in Zenith. As of June 30, 1990, Anastacia owned 136,598 shares of Zenith; Oscar and Rodrigo
owned 8,715,637 and 4,250 shares, respectively.3
(28) Has any creditor expressed interest in restructuring the debts of the debtor? If so, please give
particulars.
On May 9, 2000, Zenith and Rodrigo filed a complaint 4 with the Securities and Exchange Commission (SEC) Accordingly, he prays for the setting aside and annulment of the CA decision and resolution, and the dismissal
against Oscar, docketed as SEC Case No. 05-00-6615. The complaint stated that it is "a derivative suit of Rodrigo’s complaint before the RTC.
initiated and filed by the complainant Rodrigo C. Reyes to obtain an accounting of the funds and assets of
ZENITH INSURANCE CORPORATION which are now or formerly in the control, custody, and/or THE COURT’S RULING
possession of respondent [herein petitioner Oscar] and to determine the shares of stock of deceased spouses
Pedro and Anastacia Reyes that were arbitrarily and fraudulently appropriated [by Oscar] for himself [and] We find the petition meritorious.
which were not collated and taken into account in the partition, distribution, and/or settlement of the estate of
The core question for our determination is whether the trial court, sitting as a special commercial court, has
the deceased spouses, for which he should be ordered to account for all the income from the time he took these
jurisdiction over the subject matter of Rodrigo’s complaint. To resolve it, we rely on the judicial principle that
shares of stock, and should now deliver to his brothers and sisters their just and respective
"jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations of the
shares."5 [Emphasis supplied.]
complaint, irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein."12
In his Answer with Counterclaim,6 Oscar denied the charge that he illegally acquired the shares of Anastacia
JURISDICTION OF SPECIAL COMMERCIAL COURTS
Reyes. He asserted, as a defense, that he purchased the subject shares with his own funds from the unissued
stocks of Zenith, and that the suit is not a bona fide derivative suit because the requisites therefor have not P.D. No. 902-A enumerates the cases over which the SEC (now the RTC acting as a special commercial court)
been complied with. He thus questioned the SEC’s jurisdiction to entertain the complaint because it pertains to exercises exclusive jurisdiction:
the settlement of the estate of Anastacia Reyes.
SECTION 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange
When Republic Act (R.A.) No. 87997 took effect, the SEC’s exclusive and original jurisdiction over cases Commission over corporations, partnership, and other forms of associations registered with it as
enumerated in Section 5 of Presidential Decree (P.D.) No. 902-A was transferred to the RTC designated as a expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to
special commercial court.8 The records of Rodrigo’s SEC case were thus turned over to the RTC, Branch 142, hear and decide cases involving:
Makati, and docketed as Civil Case No. 00-1553.
a) Devices or schemes employed by or any acts of the board of directors, business
On October 22, 2002, Oscar filed a Motion to Declare Complaint as Nuisance or Harassment Suit. 9 He claimed associates, its officers or partners, amounting to fraud and misrepresentation which may
that the complaint is a mere nuisance or harassment suit and should, according to the Interim Rules of be detrimental to the interest of the public and/or of the stockholders, partners, members
Procedure for Intra-Corporate Controversies, be dismissed; and that it is not a bona fide derivative suit as it of associations or organizations registered with the Commission.
partakes of the nature of a petition for the settlement of estate of the deceased Anastacia that is outside the
jurisdiction of a special commercial court. The RTC, in its Order dated November 29, 2002 (RTC Order), b) Controversies arising out of intra-corporate or partnership relations, between and
denied the motion in part and declared: among stockholders, members, or associates; between any or all of them and the
corporation, partnership or association of which they are stockholders, members, or
A close reading of the Complaint disclosed the presence of two (2) causes of action, namely: a) a associates, respectively; and between such corporation, partnership or association and the
derivative suit for accounting of the funds and assets of the corporation which are in the control, State insofar as it concerns their individual franchise or right to exist as such entity; and
custody, and/or possession of the respondent [herein petitioner Oscar] with prayer to appoint a
management committee; and b) an action for determination of the shares of stock of deceased c) Controversies in the election or appointment of directors, trustees, officers, or
spouses Pedro and Anastacia Reyes allegedly taken by respondent, its accounting and the managers of such corporations, partnerships, or associations.
corresponding delivery of these shares to the parties’ brothers and sisters. The latter is not a
derivative suit and should properly be threshed out in a petition for settlement of estate. The allegations set forth in Rodrigo’s complaint principally invoke Section 5, paragraphs (a) and (b) above as
basis for the exercise of the RTC’s special court jurisdiction. Our focus in examining the allegations of the
Accordingly, the motion is denied. However, only the derivative suit consisting of the first cause of complaint shall therefore be on these two provisions.
action will be taken cognizance of by this Court.10
Fraudulent Devices and Schemes
Oscar thereupon went to the CA on a petition for certiorari, prohibition, and mandamus11 and prayed that the
RTC Order be annulled and set aside and that the trial court be prohibited from continuing with the The rule is that a complaint must contain a plain, concise, and direct statement of the ultimate facts
proceedings. The appellate court affirmed the RTC Order and denied the petition in its Decision dated May 26, constituting the plaintiff’s cause of action and must specify the relief sought.13 Section 5, Rule 8 of the Revised
2004. It likewise denied Oscar’s motion for reconsideration in a Resolution dated October 21, 2004. Rules of Court provides that in all averments of fraud or mistake, the circumstances constituting fraud or
mistake must be stated with particularity.14 These rules find specific application to Section 5(a) of P.D. No.
Petitioner now comes before us on appeal through a petition for review on certiorari under Rule 45 of the 902-A which speaks of corporate devices or schemes that amount to fraud or misrepresentation detrimental to
Rules of Court. the public and/or to the stockholders.
ASSIGNMENT OF ERRORS In an attempt to hold Oscar responsible for corporate fraud, Rodrigo alleged in the complaint the following:
Petitioner Oscar presents the following points as conclusions the CA should have made: 3. This is a complaint…to determine the shares of stock of the deceased spouses Pedro and
Anastacia Reyes that were arbitrarily and fraudulently appropriated for himself [herein
1. that the complaint is a mere nuisance or harassment suit that should be dismissed under the Interim Rules of petitioner Oscar] which were not collated and taken into account in the partition, distribution,
Procedure of Intra-Corporate Controversies; and and/or settlement of the estate of the deceased Spouses Pedro and Anastacia Reyes, for which he
should be ordered to account for all the income from the time he took these shares of stock, and
2. that the complaint is not a bona fide derivative suit but is in fact in the nature of a petition for settlement of
should now deliver to his brothers and sisters their just and respective shares with the corresponding
estate; hence, it is outside the jurisdiction of the RTC acting as a special commercial court.
 equivalent amount of P7,099,934.82 plus interest thereon from 1978 representing his obligations to to his corporate personality, was alleged to have transferred the shares of Anastacia to his name, allowing him
the Associated Citizens’ Bank that was paid for his account by his late mother, Anastacia C. Reyes. to become the majority and controlling stockholder of Zenith, and eventually, the corporation’s President. This
This amount was not collated or taken into account in the partition or distribution of the estate of is the essence of the complaint read as a whole and is particularly demonstrated under the following
their late mother, Anastacia C. Reyes. allegations:

3.1. Respondent Oscar C. Reyes, through other schemes of fraud including misrepresentation, 5. The complainant Rodrigo C. Reyes discovered that by some manipulative scheme, the
unilaterally, and for his own benefit, capriciously transferred and took possession and control shareholdings of their deceased mother, Doña Anastacia C. Reyes, shares of stocks and [sic] valued
of the management of Zenith Insurance Corporation which is considered as a family in the corporate books at P7,699,934.28, more or less, excluding interest and/or dividends, had been
corporation, and other properties and businesses belonging to Spouses Pedro and Anastacia Reyes. transferred solely in the name of respondent. By such fraudulent manipulations and
misrepresentation, the shareholdings of said respondent Oscar C. Reyes abruptly increased to
4.1. During the increase of capitalization of Zenith Insurance Corporation, sometime in 1968, the property P8,715,637.00 [sic] and becomes [sic] the majority stockholder of Zenith Insurance
covered by TCT No. 225324 was illegally and fraudulently used by respondent as a collateral. Corporation, which portion of said shares must be distributed equally amongst the brothers and
sisters of the respondent Oscar C. Reyes including the complainant herein.
5. The complainant Rodrigo C. Reyes discovered that by some manipulative scheme, the
shareholdings of their deceased mother, Doña Anastacia C. Reyes, shares of stocks and [sic] 9.1 The shareholdings of deceased Spouses Pedro Reyes and Anastacia C. Reyes valued at
valued in the corporate books at P7,699,934.28, more or less, excluding interest and/or P7,099,934.28 were illegally and fraudulently transferred solely to the respondent’s [herein
dividends, had been transferred solely in the name of respondent. By such fraudulent petitioner Oscar] name and installed himself as a majority stockholder of Zenith Insurance
manipulations and misrepresentation, the shareholdings of said respondent Oscar C. Reyes abruptly Corporation [and] thereby deprived his brothers and sisters of their respective equal shares thereof
increased to P8,715,637.00 [sic] and becomes [sic] the majority stockholder of Zenith Insurance including complainant hereto. [Emphasis supplied.]
Corporation, which portion of said shares must be distributed equally amongst the brothers and
sisters of the respondent Oscar C. Reyes including the complainant herein. In ordinary cases, the failure to specifically allege the fraudulent acts does not constitute a ground for dismissal
since such defect can be cured by a bill of particulars. In cases governed by the Interim Rules of Procedure on
9.1 The shareholdings of deceased Spouses Pedro Reyes and Anastacia C. Reyes valued at Intra-Corporate Controversies, however, a bill of particulars is a prohibited pleading. 17 It is essential, therefore,
P7,099,934.28 were illegally and fraudulently transferred solely to the respondent’s [herein for the complaint to show on its face what are claimed to be the fraudulent corporate acts if the complainant
petitioner Oscar] name and installed himself as a majority stockholder of Zenith Insurance wishes to invoke the court’s special commercial jurisdiction.
Corporation [and] thereby deprived his brothers and sisters of their respective equal shares thereof
including complainant hereto. We note that twice in the course of this case, Rodrigo had been given the opportunity to study the propriety of
amending or withdrawing the complaint, but he consistently refused. The court’s function in resolving issues
10.1 By refusal of the respondent to account of his [sic] shareholdings in the company, he of jurisdiction is limited to the review of the allegations of the complaint and, on the basis of these allegations,
illegally and fraudulently transferred solely in his name wherein [sic] the shares of stock of the to the determination of whether they are of such nature and subject that they fall within the terms of the law
deceased Anastacia C. Reyes [which] must be properly collated and/or distributed equally defining the court’s jurisdiction. Regretfully, we cannot read into the complaint any specifically alleged
amongst the children, including the complainant Rodrigo C. Reyes herein, to their damage corporate fraud that will call for the exercise of the court’s special commercial jurisdiction. Thus, we cannot
and prejudice. affirm the RTC’s assumption of jurisdiction over Rodrigo’s complaint on the basis of Section 5(a) of P.D. No.
902-A.18
11.1 By continuous refusal of the respondent to account of his [sic] shareholding with Zenith
Insurance Corporation[,] particularly the number of shares of stocks illegally and fraudulently Intra-Corporate Controversy
transferred to him from their deceased parents Sps. Pedro and Anastacia Reyes[,] which are all
subject for collation and/or partition in equal shares among their children. [Emphasis supplied.] A review of relevant jurisprudence shows a development in the Court’s approach in classifying what
constitutes an intra-corporate controversy. Initially, the main consideration in determining whether a dispute
Allegations of deceit, machination, false pretenses, misrepresentation, and threats are largely conclusions of constitutes an intra-corporate controversy was limited to a consideration of the intra-corporate relationship
law that, without supporting statements of the facts to which the allegations of fraud refer, do not sufficiently existing between or among the parties.19 The types of relationships embraced under Section 5(b), as declared in
state an effective cause of action.15 The late Justice Jose Feria, a noted authority in Remedial Law, declared the case of Union Glass & Container Corp. v. SEC,20 were as follows:
that fraud and mistake are required to be averred with particularity in order to enable the opposing party to
controvert the particular facts allegedly constituting such fraud or mistake.16 a) between the corporation, partnership, or association and the public;

Tested against these standards, we find that the charges of fraud against Oscar were not properly supported by b) between the corporation, partnership, or association and its stockholders, partners, members, or
the required factual allegations. While the complaint contained allegations of fraud purportedly committed by officers;
him, these allegations are not particular enough to bring the controversy within the special commercial court’s
jurisdiction; they are not statements of ultimate facts, but are mere conclusions of law: how and why the c) between the corporation, partnership, or association and the State as far as its franchise, permit or
alleged appropriation of shares can be characterized as "illegal and fraudulent" were not explained nor license to operate is concerned; and
elaborated on.
d) among the stockholders, partners, or associates themselves. [Emphasis supplied.]
Not every allegation of fraud done in a corporate setting or perpetrated by corporate officers will bring the case
within the special commercial court’s jurisdiction. To fall within this jurisdiction, there must be sufficient The existence of any of the above intra-corporate relations was sufficient to confer jurisdiction to the SEC,
nexus showing that the corporation’s nature, structure, or powers were used to facilitate the fraudulent device regardless of the subject matter of the dispute. This came to be known as the relationship test.
or scheme. Contrary to this concept, the complaint presented a reverse situation. No corporate power or office
was alleged to have facilitated the transfer of the shares; rather, Oscar, as an individual and without reference
However, in the 1984 case of DMRC Enterprises v. Esta del Sol Mountain Reserve, Inc.,21 the Court Section 63. Certificate of stock and transfer of shares. – The capital stock of stock corporations
introduced the nature of the controversy test. We declared in this case that it is not the mere existence of an shall be divided into shares for which certificates signed by the president or vice-president,
intra-corporate relationship that gives rise to an intra-corporate controversy; to rely on the relationship test countersigned by the secretary or assistant secretary, and sealed with the seal of the corporation
alone will divest the regular courts of their jurisdiction for the sole reason that the dispute involves a shall be issued in accordance with the by-laws. Shares of stock so issued are personal property and
corporation, its directors, officers, or stockholders. We saw that there is no legal sense in disregarding or may be transferred by delivery of the certificate or certificates indorsed by the owner or his
minimizing the value of the nature of the transactions which gives rise to the dispute. attorney-in-fact or other person legally authorized to make the transfer. No transfer, however, shall
be valid, except as between the parties, until the transfer is recorded in the books of the
Under the nature of the controversy test, the incidents of that relationship must also be considered for the corporation so as to show the names of the parties to the transaction, the date of the transfer,
purpose of ascertaining whether the controversy itself is intra-corporate. 22 The controversy must not only be the number of the certificate or certificates, and the number of shares transferred.  [Emphasis
rooted in the existence of an intra-corporate relationship, but must as well pertain to the enforcement of the supplied.]
parties’ correlative rights and obligations under the Corporation Code and the internal and intra-corporate
regulatory rules of the corporation. If the relationship and its incidents are merely incidental to the controversy No shares of stock against which the corporation holds any unpaid claim shall be transferable in the
or if there will still be conflict even if the relationship does not exist, then no intra-corporate controversy books of the corporation.
exists.
Simply stated, the transfer of title by means of succession, though effective and valid between the parties
The Court then combined the two tests and declared that jurisdiction should be determined by considering not involved (i.e., between the decedent’s estate and her heirs), does not bind the corporation and third parties. The
only the status or relationship of the parties, but also the nature of the question under controversy.23 This two- transfer must be registered in the books of the corporation to make the transferee-heir a stockholder entitled to
tier test was adopted in the recent case of Speed Distribution, Inc. v. Court of Appeals:24 recognition as such both by the corporation and by third parties.26

To determine whether a case involves an intra-corporate controversy, and is to be heard and decided We note, in relation with the above statement, that in Abejo v. Dela Cruz27 and TCL Sales Corporation v.
by the branches of the RTC specifically designated by the Court to try and decide such cases, two Court of Appeals28 we did not require the registration of the transfer before considering the transferee a
elements must concur: (a) the status or relationship of the parties; and (2) the nature of the question stockholder of the corporation (in effect upholding the existence of an intra-corporate relation between the
that is the subject of their controversy. parties and bringing the case within the jurisdiction of the SEC as an intra-corporate controversy). A marked
difference, however, exists between these cases and the present one.
The first element requires that the controversy must arise out of intra-corporate or partnership
relations between any or all of the parties and the corporation, partnership, or association of which In Abejo and TCL Sales, the transferees held definite and uncontested titles to a specific number of shares
they are stockholders, members or associates; between any or all of them and the corporation, of the corporation; after the transferee had established prima facie ownership over the shares of stocks in
partnership, or association of which they are stockholders, members, or associates, respectively; and question, registration became a mere formality in confirming their status as stockholders. In the present case,
between such corporation, partnership, or association and the State insofar as it concerns their each of Anastacia’s heirs holds only an undivided interest in the shares. This interest, at this point, is still
individual franchises. The second element requires that the dispute among the parties be intrinsically inchoate and subject to the outcome of a settlement proceeding; the right of the heirs to specific, distributive
connected with the regulation of the corporation. If the nature of the controversy involves matters shares of inheritance will not be determined until all the debts of the estate of the decedent are paid. In short,
that are purely civil in character, necessarily, the case does not involve an intra-corporate the heirs are only entitled to what remains after payment of the decedent’s debts;29 whether there will be
controversy. residue remains to be seen. Justice Jurado aptly puts it as follows:

Given these standards, we now tackle the question posed for our determination under the specific No succession shall be declared unless and until a liquidation of the assets and debts left by the
circumstances of this case: decedent shall have been made and all his creditors are fully paid. Until a final liquidation is made
and all the debts are paid, the right of the heirs to inherit remains inchoate. This is so because under
Application of the Relationship Test our rules of procedure, liquidation is necessary in order to determine whether or not the
decedent has left any liquid assets which may be transmitted to his heirs.30 [Emphasis supplied.]
Is there an intra-corporate relationship between the parties that would characterize the case as an intra-
corporate dispute? Rodrigo must, therefore, hurdle two obstacles before he can be considered a stockholder of Zenith with respect
to the shareholdings originally belonging to Anastacia. First, he must prove that there are shareholdings that
We point out at the outset that while Rodrigo holds shares of stock in Zenith, he holds them in two capacities: will be left to him and his co-heirs, and this can be determined only in a settlement of the decedent’s estate. No
in his own right with respect to the 4,250 shares registered in his name, and as one of the heirs of Anastacia such proceeding has been commenced to date. Second, he must register the transfer of the shares allotted to
Reyes with respect to the 136,598 shares registered in her name. What is material in resolving the issues of this him to make it binding against the corporation. He cannot demand that this be done unless and until he has
case under the allegations of the complaint is Rodrigo’s interest as an heir since the subject matter of the established his specific allotment (and prima facie ownership) of the shares. Without the settlement of
present controversy centers on the shares of stocks belonging to Anastacia, not on Rodrigo’s personally-owned Anastacia’s estate, there can be no definite partition and distribution of the estate to the heirs. Without the
shares nor on his personality as shareholder owning these shares. In this light, all reference to shares of stocks partition and distribution, there can be no registration of the transfer. And without the registration, we cannot
in this case shall pertain to the shareholdings of the deceased Anastacia and the parties’ interest therein as her consider the transferee-heir a stockholder who may invoke the existence of an intra-corporate relationship as
heirs. premise for an intra-corporate controversy within the jurisdiction of a special commercial court.
Article 777 of the Civil Code declares that the successional rights are transmitted from the moment of death of In sum, we find that – insofar as the subject shares of stock (i.e., Anastacia’s shares) are concerned – Rodrigo
the decedent. Accordingly, upon Anastacia’s death, her children acquired legal title to her estate (which title cannot be considered a stockholder of Zenith. Consequently, we cannot declare that an intra-corporate
includes her shareholdings in Zenith), and they are, prior to the estate’s partition, deemed co-owners relationship exists that would serve as basis to bring this case within the special commercial court’s
thereof.25 This status as co-owners, however, does not immediately and necessarily make them stockholders of jurisdiction under Section 5(b) of PD 902-A, as amended. Rodrigo’s complaint, therefore, fails the relationship
the corporation. Unless and until there is compliance with Section 63 of the Corporation Code on the manner test.
of transferring shares, the heirs do not become registered stockholders of the corporation. Section 63 provides:
Application of the Nature of Controversy Test administered, divided up, and distributed. Beyond this, the determination of title or ownership over the subject
shares (whether belonging to Anastacia or Oscar) may be conclusively settled by the probate court as a
The body rather than the title of the complaint determines the nature of an action.  Our examination of the
31
question of collation or advancement. We had occasion to recognize the court’s authority to act on questions of
complaint yields the conclusion that, more than anything else, the complaint is about the protection and title or ownership in a collation or advancement situation in Coca v. Pangilinan33 where we ruled:
enforcement of successional rights. The controversy it presents is purely civil rather than corporate, although it
is denominated as a "complaint for accounting of all corporate funds and assets." It should be clarified that whether a particular matter should be resolved by the Court of First
Instance in the exercise of its general jurisdiction or of its limited probate jurisdiction is in reality
Contrary to the findings of both the trial and appellate courts, we read only one cause of action alleged in the not a jurisdictional question. In essence, it is a procedural question involving a mode of practice
complaint. The "derivative suit for accounting of the funds and assets of the corporation which are in the "which may be waived."
control, custody, and/or possession of the respondent [herein petitioner Oscar]" does not constitute a separate
cause of action but is, as correctly claimed by Oscar, only an incident to the "action for determination of the As a general rule, the question as to title to property should not be passed upon in the testate or
shares of stock of deceased spouses Pedro and Anastacia Reyes allegedly taken by respondent, its accounting intestate proceeding. That question should be ventilated in a separate action. That general rule has
and the corresponding delivery of these shares to the parties’ brothers and sisters." There can be no mistake of qualifications or exceptions justified by expediency and convenience.
the relationship between the "accounting" mentioned in the complaint and the objective of partition and
distribution when Rodrigo claimed in paragraph 10.1 of the complaint that: Thus, the probate court may provisionally pass upon in an intestate or testate proceeding the
question of inclusion in, or exclusion from, the inventory of a piece of property without prejudice to
10.1 By refusal of the respondent to account of [sic] his shareholdings in the company, he illegally its final determination in a separate action.
and fraudulently transferred solely in his name wherein [sic] the shares of stock of the deceased
Anastacia C. Reyes [which] must be properly collated and/or distributed equally amongst the Although generally, a probate court may not decide a question of title or ownership, yet if  the
children including the complainant Rodrigo C. Reyes herein to their damage and prejudice. interested parties are all heirs, or the question is one of collation or advancement, or the parties
consent to the assumption of jurisdiction by the probate court and the rights of third parties are not
We particularly note that the complaint contained no sufficient allegation that justified the need for an impaired, the probate court is competent to decide the question of ownership. [Citations
accounting other than to determine the extent of Anastacia’s shareholdings for purposes of distribution. omitted. Emphasis supplied.]

Another significant indicator that points us to the real nature of the complaint are Rodrigo’s repeated claims of In sum, we hold that the nature of the present controversy is not one which may be classified as an intra-
illegal and fraudulent transfers of Anastacia’s shares by Oscar to the prejudice of the other heirs of the corporate dispute and is beyond the jurisdiction of the special commercial court to resolve. In short, Rodrigo’s
decedent; he cited these allegedly fraudulent acts as basis for his demand for the collation and distribution of complaint also fails the nature of the controversy test.
Anastacia’s shares to the heirs. These claims tell us unequivocally that the present controversy arose from the
parties’ relationship as heirs of Anastacia and not as shareholders of Zenith. Rodrigo, in filing the complaint, DERIVATIVE SUIT
is enforcing his rights as a co-heir and not as a stockholder of Zenith. The injury he seeks to remedy is one
suffered by an heir (for the impairment of his successional rights) and not by the corporation nor by Rodrigo as Rodrigo’s bare claim that the complaint is a derivative suit will not suffice to confer jurisdiction on the RTC
a shareholder on record. (as a special commercial court) if he cannot comply with the requisites for the existence of a derivative suit.
These requisites are:
More than the matters of injury and redress, what Rodrigo clearly aims to accomplish through his allegations
of illegal acquisition by Oscar is the distribution of Anastacia’s shareholdings without a prior settlement of her a. the party bringing suit should be a shareholder during the time of the act or transaction
estate – an objective that, by law and established jurisprudence, cannot be done. The RTC of Makati, acting as complained of, the number of shares not being material;
a special commercial court, has no jurisdiction to settle, partition, and distribute the estate of a deceased. A
b. the party has tried to exhaust intra-corporate remedies, i.e., has made a demand on the board of
relevant provision – Section 2 of Rule 90 of the Revised Rules of Court – that contemplates properties of the
directors for the appropriate relief, but the latter has failed or refused to heed his plea; and
decedent held by one of the heirs declares:
c. the cause of action actually devolves on the corporation; the wrongdoing or harm having been or
Questions as to advancement made or alleged to have been made by the deceased to any heir may
being caused to the corporation and not to the particular stockholder bringing the suit.34
be heard and determined by the court having jurisdiction of the estate proceedings; and the final
order of the court thereon shall be binding on the person raising the questions and on the heir. Based on these standards, we hold that the allegations of the present complaint do not amount to a derivative
[Emphasis supplied.] suit.
Worth noting are this Court’s statements in the case of Natcher v. Court of Appeals:32 First, as already discussed above, Rodrigo is not a shareholder with respect to the shareholdings originally
belonging to Anastacia; he only stands as a transferee-heir whose rights to the share are inchoate and
Matters which involve settlement and distribution of the estate of the decedent fall within the
unrecorded. With respect to his own individually-held shareholdings, Rodrigo has not alleged any individual
exclusive province of the probate court in the exercise of its limited jurisdiction.
cause or basis as a shareholder on record to proceed against Oscar.
It is clear that trial courts trying an ordinary action cannot resolve to perform acts pertaining
Second, in order that a stockholder may show a right to sue on behalf of the corporation, he must allege with
to a special proceeding because it is subject to specific prescribed rules. [Emphasis supplied.]
some particularity in his complaint that he has exhausted his remedies within the corporation by making a
That an accounting of the funds and assets of Zenith to determine the extent and value of Anastacia’s sufficient demand upon the directors or other officers for appropriate relief with the expressed intent to sue if
shareholdings will be undertaken by a probate court and not by a special commercial court is completely relief is denied.35 Paragraph 8 of the complaint hardly satisfies this requirement since what the rule
consistent with the probate court’s limited jurisdiction. It has the power to enforce an accounting as a contemplates is the exhaustion of remedies within the corporate setting:
necessary means to its authority to determine the properties included in the inventory of the estate to be
 8. As members of the same family, complainant Rodrigo C. Reyes has resorted [to] and exhausted selling any and all kinds of shares, bonds, debentures, securities, products, commodities, gold bullion,
all legal means of resolving the dispute with the end view of amicably settling the case, but the monetary exchange, and any and all other kinds of properties in the Philippines or in any foreign country.
dispute between them ensued. Petitioner Stephen Y. Ku, on the other hand, opened an account with respondent on June 5, 2007, for the
purchase and sale of securities.
Lastly, we find no injury, actual or threatened, alleged to have been done to the corporation due to Oscar’s
acts. If indeed he illegally and fraudulently transferred Anastacia’s shares in his own name, then the damage is
not to the corporation but to his co-heirs; the wrongful transfer did not affect the capital stock or the assets of On February 22, 2013, petitioner filed with the RTC of Makati a Complaint for Sum of Money and Specific
Zenith. As already mentioned, neither has Rodrigo alleged any particular cause or wrongdoing against the Performance with Damages against respondent. Pertinent portions of his allegations read as follows:
corporation that he can champion in his capacity as a shareholder on record.36
xxxx
In summary, whether as an individual or as a derivative suit, the RTC – sitting as special commercial court –
has no jurisdiction to hear Rodrigo’s complaint since what is involved is the determination and distribution of
successional rights to the shareholdings of Anastacia Reyes. Rodrigo’s proper remedy, under the 3. Sometime in June 2007, plaintiff [herein petitioner] opened a trade account with RSEC [herein respondent]
circumstances, is to institute a special proceeding for the settlement of the estate of the deceased Anastacia for the purpose of buying and selling securities as evidenced by the Customer Account Information Form and
Reyes, a move that is not foreclosed by the dismissal of his present complaint. Agreement dated 05 June 2007.

WHEREFORE, we hereby GRANT the petition and REVERSE the decision of the Court of Appeals dated xxxx
May 26, 2004 in CA-G.R. SP No. 74970. The complaint before the Regional Trial Court, Branch 142, Makati,
docketed as Civil Case No. 00-1553, is ordered DISMISSED for lack of jurisdiction.
4. Unknown to plaintiff, the name of M.G. Valbuena ("MGV") was deliberately inserted beside the name of
SO ORDERED. Ivan L. Zalameda as one of the agents after plaintiff completed and signed the Agreement.

5. As to when the fraudulent insertion was made, plaintiff has no idea. Plaintiff only discovered this anomaly
when plaintiff recently requested for a copy of his Account Information.

6. In the course of plaintiff's trading transactions with RSEC, MGV represented herself as a Sales Director of
RSEC, duly authorized to transact business on behalf of the latter.

xxxx

7. With this representation, plaintiff continued to transact business with RSEC through MGV, on the honest
belief that the latter was acting for and in behalf of RSEC.
THIRD DIVISION
G.R. No. 219491, October 17, 2018
8. In the beginning, plaintiff's dealings with RSEC through MGV went on smoothly.
STEPHEN Y. KU, Petitioner, v. RCBC SECURITIES, INC., Respondent.
DECISION
9. Every time plaintiff authorized a trade, plaintiff would be furnished with a Trade Confirmation by RSEC.
Having successfully and profitably managed plaintiff's account, or as so represented to plaintiff, MGV was
PERALTA, J.: able to gain the trust and confidence of plaintiff.

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking the reversal 10. In addition to acting as broker for plaintiff's trading account, investment in ARPO was also successfully
and setting aside of the Decision1 and Resolution2 of the Court of Appeals (CA), promulgated on October 9, solicited by plaintiff.
2014 and July 14, 2015, respectively, in CA-G.R. SP No. 132816. The assailed CA Decision reversed and set
aside the: (1) September 12, 2013 Order3 of the Regional Trial Court (RTC) of Makati City, Branch 63 which
directed the re-raffle of the Complaint filed by petitioner Stephen Y. Ku; and (2) October 25, 2013 Order4 of 11. ARPO, as represented to plaintiff, is an investment arm of RSEC that offers considerably higher interest
the RTC of Makati City, Branch 149, which denied respondent RCBC Securities, Inc.'s Motion to Dismiss and rate of return as compared to any other financing company.
ordered petitioner to pay the docket fees based on the value of the shares of stocks which he prays to be
returned to him. 12. Thus, sometime in November 2007, plaintiff agreed to invest in ARPO funds, which continued to run for
more than two (2) years, the total of which amounted to Php38,300,205.00. x x x.
The facts are as follows:
13. Sometime in January 2012, it came to the knowledge of plaintiff that his account with RSEC was subject
Respondent RCBC Securities, Inc. is a corporation duly organized and existing under the laws of the of mismanagement. MGV was blacklisted by RSEC due to numerous fraudulent and unauthorized transactions
Philippines. It is primarily engaged in the brokerage business, specifically for the purpose of buying and
committed by the former. Worse, MGV allegedly was able to divert investments made by "high networth" 38. In summary, plaintiff's audit report would show that RSEC owes plaintiff the total amount of
clients of RSEC into some other accounts. Php70,064,426.88 as of 31 October 2012, broken down as follows:

14. On 17 January 2012, plaintiff was furnished by RSEC of a copy of an undated audit report (sometimes a. Php992,970.78, representing remaining cash in plaintiff's trade account;
referred to as "ledger") principally showing that the total claim of plaintiff with RSEC amounts to b. Php15,166,251.10, representing unaccounted for and/or wrongfully credited payments to
Php77,561,602.75 plaintiff's trade account;
c. Php38,300,205.00 representing total principal investment in ARPO; and
xxxx d. Php15,605,000.00 as unpaid ARPO interests as of 31 October 2012.

xxxx
15. On 18 January 2012, plaintiff wrote RSEC informing the latter that simultaneous to RSEC's audit, plaintiff
likewise is in the process of conducting an independent audit of his own account in order to validate the
amount claimed by RSEC. 39. Deeply bothered by the turn of events, plaintiff wrote RSEC on 10 May 2012 and demanded payment for
the said amounts. Plaintiff also demanded return of the shares of stocks identified in Paragraph 16 hereof.
16. In the same letter, plaintiff made clear to RSEC that it has never authorized a discretionary account with
MGV and requested for all documents relative to plaintiff's audit. xxxx

xxxx 40. However, despite the detailed presentation of plaintiff's payments to RSEC, RSEC, in its letter-reply dated
29 May 2012, only made categorical denials of its relationship with ARPO and failed to sufficiently explain
what happened to plaintiff's account or where did all of plaintiff's money intended for ARPO go.
17. After audit, plaintiff has conclusively determined that there were FOUR HUNDRED SIXTY-SEVEN
(467) unauthorized transactions in his account. A review of the said transactions would show that multiple
buying and selling transactions on the same day were repeatedly done over a period of four (4) years. xxxx

18. Being unauthorized, plaintiff also never received any document confirming any of the said transactions. 41. Not satisfied, plaintiff again wrote RSEC to reiterate its (sic) request for documents in support of RSEC's
Worse, plaintiff was given and is in the possession of fabricated confirmation statements for trades he actually defense. Plaintiff also made it clear to RSEC that dealings of plaintiff with MGV were all made in trust and
authorized, but were not, in reality executed. confidence and on honest belief that MGV was vested with apparent authority from RSEC to transact business
on the latter's behalf.
19. After evaluation and audit, and after exclusion of all the unauthorized trades, plaintiff should have
remaining cash in his trade account in the amount of Php992,970.78 and the following stock position under his xxxx
trade account to date:
42. After completing the audit report x x x, plaintiff sent a demand letter dated 11 January 2013 to RSEC, x x
Stock x.
Qty
Symbol
AGI 500,000
43. Without any valid and justifiable reason, however, RSEC refused and still continues to refuse to heed
COL 50,000 plaintiff's demand.
EG 57,940
GERI 400,000
IP 50,000 x x x.5
KPP 400,000
LC 3,000,000 Petitioner prayed for the payment of the amounts mentioned in Paragraph 38 of the Complaint as well as the
LR 100,000 shares of stocks enumerated in Paragraph 19 of the said Complaint. Petitioner also sought the recovery of
50,000,00 treble damages, exemplary damages and attorney's fees.
MA
0
MEG 2,215,000
PA 3,100,000 The Complaint, docketed as Civil Case No. 13-171, was raffled-off to Branch 63, RTC of Makati.
SHNG 143
SLI 1,000,000 On May 29, 2013, respondent filed a Motion to Dismiss 6 contending that: (1) the RTC of Makati did not
acquire jurisdiction over the subject matter of the case because petitioner deliberately evaded the payment of
xxxx the correct docket fees; (2) the Complaint stated no cause of action for its failure to state with particularity the
circumstances constituting fraud, in violation of the Rules of Court, as well as for failing to allege the basis of
petitioner's cause of action for the amounts claimed as principal investment and unpaid interest in ARPO, an
investment arm owned and managed by respondent; and (3) petitioner has waived, abandoned or otherwise
extinguished his claims after he failed to raise any objection, with respect to his statements of account, within The CA held that, based on the language of the Order of September 12, 2013, the RTC of Makati, Branch 63,
the prescriptive period to do so under the parties' agreement. has acknowledged that it has no jurisdiction over the subject matter of the case; and having acknowledged its
lack of jurisdiction, Branch 63 should have dismissed the Complaint, instead of having it re-raffled to another
Branch. Thus, the CA ruled that Judge Salvador, Jr. of Branch 63 committed grave abuse of discretion
Petitioner filed his Comment/Opposition to the Motion to Dismiss.7 Subsequently, respondent filed its Reply.8
amounting to lack or excess of jurisdiction in ordering the re-raffle of the case. The CA further ruled that, as a
consequence, "all the proceedings undertaken [by Branch 149 of the same RTC] under Judge Untalan, who
After conducting several hearings on the Motion to Dismiss, the RTC of Makati, Branch 63, issued its received the case after the questionable re-raffle, are utterly null and void, including, but not limited to, the
questioned Order dated September 12, 2013, to wit: issuance of the [Order dated October 25, 2013]."

xxxx Petitioner filed a Motion for Reconsideration, but the CA denied it in its Resolution dated July 14, 2015.

After going over plaintiff's [herein petitioner's] Complaint and defendant's [herein respondent's] Motion to Hence, the present petition based on the following Assignment of Errors:
Dismiss and the Reply that followed, the Court is of the considered view that this case involves trading of
securities. Consequently, the case should be heard and tried before a Special Commercial Court.
A.

Accordingly, the Court's Branch Clerk of Court is forthwith directed to forward the entire record of the case to
THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT FOUND THAT THE
the Office of the Clerk of Court for re-raffle.
ORDERS WERE ISSUED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
EXCESS [OF] JURISDICTION.
SO ORDERED.
B.
x x x.9
THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT FOUND THAT THE
The case was, subsequently, re-raffled to Branch 149 of the RTC of Makati. HONORABLE JUDGE TRANQUIL SALVADOR, JR. ACKNOWLEDGED THE ABSENCE OF
JURISDICTION OF HIS REGULAR COURT OVER THE CASE.
Thereafter, in its Order10 dated October 25, 2013, the RTC of Makati, Branch 149, denied the Motion to
Dismiss for lack of merit. It held that petitioner's payment of insufficient docket fees does not warrant the C.
dismissal of the Complaint and that the trial court still acquires jurisdiction over the case subject to the
payment of the deficiency assessment. The RTC, thus, ordered petitioner "to pay the docket fees on the value
THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT FOUND THAT
of the shares of stocks being prayed to be returned to him, within thirty (30) days from receipt" of the said
Order. As to petitioner's alleged failure to state a cause of action, Branch 149 ruled that an examination of the BOTH HONORABLE TRIAL COURTS, BRANCHES 63 AND 149, HAVE NO JURISDICTION
OVER THE INSTANT CASE DUE TO THE INSUFFICIENT PAYMENT OF DOCKET FEES.
Complaint would show that "certain allegations of fraud therein [are] sufficiently pleaded x x x." With respect
to the alleged waiver, abandonment or extinguishment of petitioner's claims, Branch 149 held that the parties
presented conflicting assertions, the resolution of which should be properly made in a full-blown trial. D.

Aggrieved, respondent filed with the CA a petition for certiorari under Rule 65 of the Rules of Court, THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT FOUND THAT A
imputing grave abuse of discretion upon Judges Tranquil P. Salvador, Jr. and Cesar O. Untalan by reason of MOTION FOR RECONSIDERATION BEFORE THE FILING OF THIS PETITION CAN BE
their issuance of the said Orders in their respective capacities as Presiding Judges of the RTC of Makati City, DISPENSED WITH.12
Branches 63 and 149.
The issue which confronts this Court in the instant case is whether the CA erred in granting herein respondent's
On October 9, 2014, the CA promulgated its assailed Decision by disposing as follows: petition for certiorari, and reversing and setting aside the September 12, 2013 and October 25, 2013 Orders of
the RTC of Makati City, Branches 63 and 149, respectively.
WHEREFORE, premises considered, the instant Petition for Certiorari is GRANTED and the assailed
Orders dated 12 September 2013 and 25 October 2013 issued by the Regional Trial Court of Makati City, The petition is meritorious.
Branches 63 and 149, respectively, are hereby REVERSED and SET ASIDE. Concomitantly, Civil Case No.
13-171, entitled Stephen K. Yu (sic) v. RCBC Securities, Inc. is DISMISSED for lack of jurisdiction. Finally,
The basic question that should be resolved is: which court has jurisdiction over the complaint filed by
the Urgent Verified Motion for Issuance of Temporary Restraining Order and/or Writ of Preliminary petitioner?
Injunction is DENIED for being moot and academic.

The settled rule is that jurisdiction over the subject matter of a case is conferred by law and determined by the
SO ORDERED.11 allegations in the complaint, which comprise a concise statement of the ultimate facts constituting the
plaintiff's cause of action.13 The nature of an action, as well as which court or body has jurisdiction over it, is
determined based on the allegations contained in the complaint of the plaintiff. 14 The averments in the As it now stands, jurisdiction over the cases enumerated under. Section 5 of PD 902-A, collectively known as
complaint and the character of the relief sought are the ones to be consulted. 15 Once vested by the allegations intra-corporate controversies or disputes, now falls under the jurisdiction of the RTCs.
in the complaint, jurisdiction also remains vested, irrespective of whether or not the plaintiff is entitled to
recover upon all or some of the claims asserted therein. 16
In this regard, it is worthy to reiterate this Court's ruling in Gonzales, et al., v. GJH Land, Inc., et al.20 which
characterizes and explains the transfer of jurisdiction of all cases enumerated under Section 5 of PD 902-A
In the present case, the provisions of law which need to be examined are Republic Act No. 8799 17 (RA 8799), from the Securities and Exchange Commission (SEC) to the RTCs. In the said Decision, which was
Presidential Decree No. 902-A18 (PD 902-A) and Batas Pambansa Blg. 12919 (BP 129), as amended by promulgated subsequent to the issuance of the questioned RTC Orders in the present case, this Court made a
Republic Act No. 7691 (RA 7691). distinction between a court's "subject matter jurisdiction" and its "exercise of jurisdiction." Pertinent portions
of the said ruling provide, thus:
Section 5.2 of RA 8799 provides:
As a basic premise, let it be emphasized that a court's acquisition of jurisdiction over a particular case's subject
matter is different from incidents pertaining to the exercise of its jurisdiction. Jurisdiction over the subject
The Commission's jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is
hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court: Provided, That matter of a case is conferred by law, whereas a court's exercise of jurisdiction, unless provided by the law
itself, is governed by the Rules of Court or by the orders issued from time to time by the Court. In  Lozada v.
the Supreme Court in the exercise of its authority may designate the Regional Trial Court branches that shall
exercise jurisdiction over the cases. The Commission shall retain jurisdiction over pending cases involving Bracewell, it was recently held that the matter of whether the RTC resolves an issue in the exercise of its
general jurisdiction or of its limited jurisdiction as a special court is only a matter of procedure and has
intra-corporate disputes submitted for final resolution which should be resolved within one (1) year from the
enactment of this Code. The Commission shall retain jurisdiction over pending suspension of nothing to do with the question of jurisdiction.
payment/rehabilitation cases filed as of 30 June 2000 until finally disposed.
Pertinent to this case is RA 8799 which took effect on August 8, 2000. By virtue of said law, jurisdiction over
In relation to the above provision, Section 5 of PD 902-A states that: cases enumerated in Section 5 of Presidential Decree No. 902-A was transferred from the Securities and
Exchange Commission (SEC) to the RTCs, being court of general jurisdiction . x x x

In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over
corporations, partnerships and other forms of associations registered with it as expressly granted under existing xxxx
laws and decrees, it shall have original and exclusive jurisdiction to hear and decide cases involving.
The legal attribution of Regional Trial Courts as courts of general jurisdiction stems from Section 19 (6),
(a) Devices or schemes employed by or any acts, of the board of directors, business associates, its officers or Chapter II of Batas Pambansa Bilang (BP) 129, known as "The Judiciary Reorganization Act of 1980":
partnership, amounting to fraud and misrepresentation which may be detrimental to the interest of the public
and/or of the stockholder, partners, members of associations or organizations registered with the Commission; xxxx

(b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders, Therefore, one must be disabused of the notion that the transfer of jurisdiction was made only in favor of
members, or associates; between any or all of them and the corporation, partnership or association of which particular RTC branches, and not the RTCs in general.
they are stockholders, members or associates, respectively; and between such corporation, partnership or
association and the state insofar as it concerns their individual franchise or right to exist as such entity; and
xxxx

(c) Controversies in the election or appointments of directors, trustees, officers or managers of such x x x Harkening back to the statute that had conferred subject matter jurisdiction, two things are apparently
corporations, partnerships or associations.
clear: (a) that the SEC's subject matter jurisdiction over intra-corporate cases under Section 5 of Presidential
Decree No. 902-A was transferred to the Courts of general jurisdiction, i.e., the appropriate Regional Trial
On the other hand, Section 19(1) and (8) of BP 129, as amended, provides: Courts; and (b) the designated branches of the Regional Trial Court, as per the rules promulgated by the
Supreme Court, shall exercise jurisdiction over such cases. x x x.
Regional Trial Courts shall exercise exclusive original jurisdiction:
xxxx
(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation;
For further guidance, the Court finds it apt to point out that the same principles apply to the inverse situation
xxx xxx xxx of ordinary civil cases filed before the proper RTCs but wrongly raffled to its branches designated as
Special Commercial Courts. In such a scenario, the ordinary civil case should then be referred to the
Executive Judge for re-docketing as an ordinary civil case; thereafter, the Executive Judge should then
(8) In all other cases in which the demand, exclusive of interest, damages of whatever kind, attorney's fees, order the raffling of the case to all branches of the same RTC, subject to limitations under existing
litigation expenses, and costs or the value of the property in controversy exceeds Three hundred thousand internal rules, and the payment of the correct docket fees in case of any difference. Unlike the limited
pesos (P300,000.00) or, in such other cases in Metro Manila, where the demand exclusive of the above- assignment raffling of a commercial case only to branches designated as Special Commercial Courts in the
mentioned items exceeds Four hundred thousand pesos (P400,000.00). scenarios stated above, the re-raffling of an ordinary civil case in this instance to all courts is permissible due
to the fact that a particular branch which has been designated as a Special Commercial Court does not shed the Under the nature of the controversy test, "the controversy must not only be rooted in the existence of an intra-
RTC's general jurisdiction over ordinary civil cases under the imprimatur of statutory law, i.e., Batas corporate relationship, but must as well pertain to the enforcement of the parties' correlative rights and
Pambansa Bilang (BP) 129. To restate, the designation of Special Commercial Courts was merely intended as obligations under the Corporation Code and the internal and intra-corporate regulatory rules of the
a procedural tool to expedite the resolution of commercial cases in line with the court's exercise of corporation." In other words, jurisdiction should be determined by considering both the relationship of the
jurisdiction. This designation was not made by statute but only by an internal Supreme Court rule under its parties as well as the nature of the question involved.23
authority to promulgate rules governing matters of procedure and its constitutional mandate to supervise the
administration of all courts and the personnel thereof. Certainly, an internal rule promulgated by the Court Applying the above tests, the Court finds, and so holds, that the case is not an intra-corporate dispute and,
cannot go beyond the commanding statute. But as a more fundamental reason, the designation of Special
instead, is an ordinary civil action. There are no intra-corporate relations between the parties. Petitioner is
Commercial Courts is, to stress, merely an incident related to the court's exercise of jurisdiction, which, as first neither a stockholder, partner, member or officer of respondent corporation. The parties' relationship is limited
discussed, is distinct from the concept of jurisdiction over the subject matter. The RTC's general jurisdiction
to that of an investor and a securities broker. Moreover, the questions involved neither pertain to the parties'
over ordinary civil cases is therefore not abdicated by an internal rule streamlining court procedure. rights and obligations under the Corporation Code, if any, nor to matters directly relating to the regulation of
the corporation.
x x x.21
On the basis of the foregoing, since the Complaint filed by petitioner partakes of the nature of an ordinary civil
In short, jurisdiction over intra-corporate controversies is transferred by law (RA 8799) from the SEC to the action, it is clear that it was correctly raffled-off to Branch 63. Hence, it is improper for it (Branch 63) to have
RTCs in general, but the authority to exercise such jurisdiction is given by the Supreme Court, in the exercise ordered the re-raffle of the case to another branch of the Makati RTC. Nonetheless, the September 12, 2013
of its rule-making power under the Constitution, to RTCs which are specifically designated as Special Order of Branch 63, although erroneous, was issued in the valid exercise of the RTC's jurisdiction. Such
Commercial Courts. On the other hand, the cases enumerated under Section 19 of BP 129, as amended, are mistaken Order can, thus, be considered as a mere procedural lapse which does not affect the jurisdiction
taken cognizance of by the RTCs in the exercise of their general jurisdiction. which the RTC of Makati had already acquired. Moreover, while designated as a Special Commercial Court,
Branch 149, to which it was subsequently re-raffled, retains its general jurisdiction to try ordinary civil cases
Thus, based on the allegations in petitioner's Complaint, in relation to the above provisions of law, there is no such as petitioner's Complaint. In addition, after its re-raffle to Branch 149, the case remained docketed as an
ordinary civil case. Thus, the Order dated October 12, 2013 was, likewise issued by Branch 149 in the valid
dispute that the case falls under the jurisdiction of the RTC. However, whether or not the RTC shall take
cognizance of the case in the exercise of its general jurisdiction, or as a special commercial court, is another exercise of the RTC's jurisdiction. In sum, it is error to conclude that the questioned Orders of Branches 63 and
149 are null and void on the ground of lack of jurisdiction, because, in fact, both branches of the Makati RTC
matter. In resolving this issue, what needs to be determined, at the first instance, is the nature of petitioner's
complaint. Is it an ordinary civil action for collection, specific performance and damages as would fall under have jurisdiction over the subject matter of petitioner's Complaint.
the jurisdiction of regular courts or is it an intra-corporate controversy or of such nature that it is required to be
heard and tried by a special commercial court? Hence, considering that the RTC of Makati has jurisdiction over the subject matter of petitioner's complaint,
and that Branch 149 continued and continues to exercise jurisdiction over the case during the pendency of the
proceedings leading to this petition and, thus, has presumably conducted hearings towards the resolution of
Petitioner contends that the allegations in his Complaint indicate that it is an action for collection of a sum of
money and specific performance with damages and, as such, it falls under the general jurisdiction of the RTC. petitioner's complaint, this Court, in the interest of expediency and in promoting the parties' respective rights to
a speedy disposition of their case, finds it proper that Civil Case No. 13-171 should remain with Branch 149,
instead of being remanded to Branch 63 or re-raffled anew among all courts of the same RTC.
The CA, on the other hand, did not directly resolve the issue as to the nature of the complaint and, instead,
proceeded to decide the case by working on the premise that Branch 63 has acknowledged its lack of
With respect to petitioner's payment of insufficient docket fees, this Court's ruling in The Heirs of the Late
jurisdiction over the subject matter of petitioner's complaint and, as such, should have dismissed the same and
not order its re-raffle to another branch. Ruben Reinoso, Sr. v. Court of Appeals, et al.,24 is instructive, to wit:

The rule is that payment in full of the docket fees within the prescribed period is mandatory. In Manchester v.
The Court agrees with petitioner.
Court of Appeals [233 Phil 579, (1987)], it was held that a court acquires jurisdiction over any case only upon
the payment of the prescribed docket fee. The strict application of this rule was, however, relaxed two (2)
In the case of Medical Plaza Makati Condominium Corporation v. Cullen,22 this Court held as follows: years after in the case of Sun Insurance Office, Ltd. v. Asuncion, wherein the Court decreed that where the
initiatory pleading is not accompanied by the payment of the docket fee, the court may allow payment of the
In determining whether a dispute constitutes an intra-corporate controversy, the Court uses two tests, namely, fee within a reasonable period of time, but in no case beyond the applicable prescriptive or reglementary
the relationship test and the nature of the controversy test. period. This ruling was made on the premise that the plaintiff had demonstrated his willingness to abide by the
rules by paying the additional docket fees required. Thus, in the more recent case of United Overseas Bank v.
Ros, the Court explained that where the party does not deliberately intend to defraud the court in payment of
An intra-corporate controversy is one which pertains to any of the following relationships: (1) between the docket fees, and manifests its willingness to abide by the rules by paying additional docket fees when required
corporation, partnership or association and the public; (2) between the corporation, partnership or association by the court, the liberal doctrine enunciated in Sun Insurance Office, Ltd., and not the strict regulations set
and the State insofar as its franchise, permit or license to operate is concerned; (3) between the corporation, in Manchester, will apply. It has been on record that the Court, in several instances, allowed the relaxation of
partnership or association and its stockholders, partners, members or officers; and (4) among the stockholders, the rule on non-payment of docket fees in order to afford the parties the opportunity to fully ventilate their
partners or associates themselves. Thus, under the relationship test, the existence of any of the above intra- cases on the merits. .In the case of La Salette College v. Pilotin, the Court stated:
corporate relations makes the case intra-corporate.
Notwithstanding the mandatory nature of the requirement of payment of appellate docket fees, we also
recognize that its strict application is qualified by the following: first, failure to pay those fees within the
reglementary period allows only discretionary, not automatic, dismissal; second, such power should be used by
the court in conjunction with its exercise of sound discretion in accordance with the tenets of justice and fair
play, as well as with a great deal of circumspection in consideration of all attendant circumstances.

While there is a crying need to unclog court dockets on the one hand, there is, on the other, a greater demand
for resolving genuine disputes fairly and equitably, for it is far better to dispose of a case on the merit which is
a primordial end, rather than on a technicality that may result in injustice.25

Indeed, this Court has held that the ruling in Manchester does not apply to cases where insufficient filing fees
were paid based on the assessment made by the clerk of court, and there was no intention to defraud the
government.26 It was further held that the filing of the complaint or appropriate initiatory pleading and the
payment of the prescribed docket fee vest a trial court with jurisdiction over the subject matter or nature of the
action.27 If the amount of docket fees paid is insufficient considering the amount of the claim, the clerk of court
of the lower court involved or his duly-authorized deputy has the responsibility of making a deficiency
assessment.28 The party filing the case will be required to pay the deficiency, but jurisdiction is not
automatically lost.29

In the present case, the Court does not agree with the CA when it ruled that "the intention of [petitioner] Ku to
evade payment of the correct filing fees[,] if not to mislead the docket clerk in the assessment of the filing
fees[,] is manifest." The fact alone that petitioner failed to indicate in the body of his Complaint as well as in
his prayer, the value of the shares of stocks he wishes to recover from respondent is not sufficient proof of a
deliberate intent to defraud the court in the payment of docket fees. On the contrary, there is no dispute that
upon filing of his Complaint, petitioner paid docket fees amounting to P1,465,971.41, which was based on the
assessment made by the clerk of court. In a number of cases, 30 this Court has ruled that the plaintiff's payment
of the docket fees based on the assessment made by the docket clerk negates bad faith or intent to defraud the
government. There is, likewise, no dispute that, subsequently, when ordered by Branch 149 to pay additional Metropolitan Trial Courts, Municipal Trial Courts/Circuit Trial Courts
docket fees corresponding to the value of the shares of stocks being recovered, petitioner immediately paid an
additional sum of P464,535.83. Moreover, unlike in Manchester where the complainant specified in the body
of the complaint the amount of damages sought to be recovered but omitted the same in its prayer, petitioner in [ REPUBLIC ACT NO. 11576, July 30, 2021 ]
the instant case consistently indicated both in the body of his Complaint and in his prayer, the number of
shares sought to be recovered, albeit without their corresponding values. The foregoing circumstances would AN ACT FURTHER EXPANDING THE JURISDICTION OF THE METROPOLITAN TRIAL
show that there was no deliberate intent to defraud the court in the payment of docket fees. COURTS, MUNICIPAL TRIAL COURTS IN CITIES, MUNICIPAL TRIAL COURTS, AND
MUNICIPAL CIRCUIT TRIAL COURTS, AMENDING FOR THE PURPOSE BATAS PAMBANSA
WHEREFORE, the instant petition for review on certiorari is GRANTED. The Decision and Resolution of BLG. 129, OTHERWISE KNOWN AS “THE JUDICIARY REORGANIZATION ACT OF 1980,” AS
the Court of Appeals promulgated on October 9, 2014 and July 14, 2015, respectively, in CA-G.R. SP No. AMENDED
132816, are REVERSED and SET ASIDE. Civil Case No. 13-171, entitled Stephen Y. Ku v. RCBC
Securities, Inc., is hereby REINSTATED and the Regional Trial Court of Makati City, Branch 149, Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
is DIRECTED to PROCEED WITH THE HEARING of the case, with utmost dispatch, until its
termination.
Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as “The Judiciary Reorganization Act of
1980,” as amended, is hereby amended to read as follows:
SO ORDERED.
“Section 19. Jurisdiction of the Regional Trial Courts in Civil Cases. – Regional Trial Courts shall exercise
exclusive original jurisdiction:

“x x x

“(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where
the assessed value exceeds Four hundred thousand pesos (P400,000.00), except for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan "(4) In all matters of probate, both testate and intestate, where the gross value of the
Trial Courts, and Municipal Trial Courts in Cities, Municipal Trial Courts, and Municipal Circuit Trial Courts; estate exceeds One hundred thousand pesos (P100,000.00) or, in probate matters in Metro
Manila, where such gross value exceeds Two Hundred thousand pesos (P200,000.00);
“(3) In all actions in admiralty and maritime jurisdiction where the demand or claims exceeds Two million "(5) In all actions involving the contract of marriage and marital relations;
pesos (P2,000,000.00);
"(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or
“(4) In all matters of probate, both estate and intestate, where the gross value of the estate exceeds Two million body exercising jurisdiction of any court, tribunal, person or body exercising judicial or
pesos (P2,000,000.00)’ quasi-judicial functions;

"(7) In all civil actions and special proceedings falling within the exclusive original
“x x x jurisdiction of a Juvenile and Domestic Relations Court and of the Court of Agrarian
Relations as now provided by law; and
“(8) In all other cases in which the demand, exclusive of interest, damages of whatever kind, attorney’s fees,
"(8) In all other cases in which the demand, exclusive of interest, damages of whatever
litigation expenses and costs or the value of the property in controversy exceeds Two million pesos
kind, attorney's fees, litigation expenses, and costs or the value of the property in
(P2,000,000.00).”
controversy exceeds One hundred thousand pesos (P100,000.00) or, in such other cases in
Metro Manila, where the demand exclusive of the abovementioned items exceeds Two
Hundred thousand pesos (P200,000.00)."

Section 2. Section 32 of the same law is hereby amended to read as follows:

"Sec. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit
Trial Courts in Criminal Cases. – Except in cases falling within the exclusive original jurisdiction of
Regional Trial Courts and of the Sandiganbayan, the Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts shall exercise:

"(1) Exclusive original jurisdiction over all violations of city or municipal ordinances
Republic Act No. 7691             March 25, 1994
committed within their respective territorial jurisdiction; and
AN ACT EXPANDING THE JURISDICTION OF THE METROPOLITAN TRIAL COURTS,
"(2) Exclusive original jurisdiction over all offenses punishable with imprisonment not
MUNICIPAL TRIAL COURTS, AND MUNICIPAL CIRCUIT TRIAL COURTS, AMENDING FOR
exceeding six (6) years irrespective of the amount of fine, and regardless of other
THE PURPOSE BATAS PAMBANSA, BLG. 129, OTHERWISE KNOWN AS THE "JUDICIARY
imposable accessory or other penalties, including the civil liability arising from such
REORGANIZATION ACT OF 1980"
offenses or predicated thereon, irrespective of kind, nature, value or amount thereof:
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: Provided, however, That in offenses involving damage to property through criminal
negligence, they shall have exclusive original jurisdiction thereof."
Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of
1980", is hereby amended to read as follows: Section 3. Section 33 of the same law is hereby amended to read as follows:

"Sec. 19. Jurisdiction in civil cases. – Regional Trial Courts shall exercise exclusive original "Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit
jurisdiction. Trial Courts in Civil Cases. – Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
Circuit Trial Courts shall exercise:
"(1) In all civil actions in which the subject of the litigation is incapable of pecuniary
estimation; "(1) Exclusive original jurisdiction over civil actions and probate proceedings, testate and
intestate, including the grant of provisional remedies in proper cases, where the value of
"(2) In all civil actions which involve the title to, or possession of, real property, or any the personal property, estate, or amount of the demand does not exceed One hundred
interest therein, where the assessed value of the property involved exceeds Twenty thousand pesos (P100,000.00) or, in Metro Manila where such personal property, estate,
thousand pesos (P20,000,00) or, for civil actions in Metro Manila, where such value or amount of the demand does not exceed Two hundred thousand pesos (P200,000.00),
exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses, and
unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon costs, the amount of which must be specifically alleged: Provided, That interest, damages
the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial of whatever kind, attorney's fees, litigation expenses, and costs shall be included in the
Courts; determination of the filing fees: Provided, further, That where there are several claims or
causes of actions between the same or different parties, embodied in the same complaint,
"(3) In all actions in admiralty and maritime jurisdiction where the demand or claim the amount of the demand shall be the totality of the claims in all the causes of action,
exceeds One hundred thousand pesos (P100,000.00) or, in Metro Manila, where such irrespective of whether the causes of action arose out of the same or different
demand or claim exceeds Two hundred thousand pesos (P200,000.00); transactions;
 "(2) Exclusive original jurisdiction over cases of forcible entry and unlawful detainer:
Provided, That when, in such cases, the defendant raises the questions of ownership in his
pleadings and the question of possession cannot be resolved without deciding the issue of
ownership, the issue of ownership shall be resolved only to determine the issue of
possession; and

"(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession
of, real property, or any interest therein where the assessed value of the property or
interest therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil actions
in Metro Manila, where such assessed value does not exceed Fifty thousand pesos
(P50,000.00) exclusive of interest, damages of whatever kind, attorney's fees, litigation
expenses and costs: Provided, That in cases of land not declared for taxation purposes,
the value of such property shall be determined by the assessed value of the adjacent lots."

Section 4. Section 34 of the same law is hereby amended to read as follows:

"Sec. 34. Delegated Jurisdiction in Cadastral and Land Registration Cases. – Metropolitan Trial REVISED RULES ON SUMMARY PROCEDURE
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts may be assigned by the Supreme
Court to hear and determine cadastral or land registration cases covering lots where there is no RESOLUTION OF THE COURT EN BANC DATED OCTOBER 15, 1991 PROVIDING FOR THE
controversy or opposition, or contested lots where the value of which does not exceed One hundred REVISED RULE ON SUMMARY PROCEDURE FOR METROPOLITAN TRIAL COURTS,
thousand pesos (P100,000.00), such value to be ascertained by the affidavit of the claimant or by MUNICIPAL TRIAL COURTS IN CITIES, MUNICIPAL TRIAL COURTS AND MUNICIPAL
agreement of the respective claimants if there are more than one, or from the corresponding tax CIRCUIT TRIAL COURTS.
declaration of the real property. Their decisions in these cases shall be appealable in the same
manner as decisions of the Regional Trial Courts."

Pursuant to Section 36 of the Judiciary Reorganization Act of 1980 (B.P Blg. 129) and to achieve an
expeditious and inexpensive determination of the cases referred to herein, the Court Resolved to promulgate
the following Revised Rule on Summary Procedure:

I.

Applicability

Section 1. Scope. — This rule shall govern the summary procedure in the Metropolitan Trial
Courts, the Municipal Trial Courts in Cities, the Municipal Trial Courts, and the Municipal Circuit Trial
Courts in the following cases falling within their jurisdiction:

A. Civil Cases:

(1) All cases of forcible entry and unlawful detainer, irrespective of the amount of damages or
unpaid rentals sought to be recovered. Where attorney's fees are awarded, the same shall not exceed twenty
thousand pesos (P20,000.00).

(2) All other civil cases, except probate proceedings, where the total amount of the plaintiff's claim
does not exceed ten thousand pesos (P10,000.00), exclusive of interest and costs.

B. Criminal Cases:

(1) Violations of traffic laws, rules and regulations;

(2) Violations of the rental law;

(3) Violations of municipal or city ordinances;

(4) All other criminal cases where the penalty prescribed by law for the offense charged is
imprisonment not exceeding six months, or a fine not exceeding (P1,000.00), or both, irrespective of other
imposable penalties, accessory or otherwise, or of the civil liability arising therefrom: Provided, however, that If a sole defendant shall fail to appear, the plaintiff shall be entitled to judgment in accordance with
in offenses involving damage to property through criminal negligence, this Rule shall govern where the Section 6 hereof. This Rule shall not apply where one of two or more defendants sued under a common cause
imposable fine does not exceed ten thousand pesos (P10,000.00). of action who had pleaded a common defense shall appear at the preliminary conference.

This Rule shall not apply to a civil case where the plaintiffs cause of action is pleaded in the same
complaint with another cause of action subject to the ordinary procedure; nor to a criminal case where the
offense charged is necessarily related to another criminal case subject to the ordinary procedure. Sec. 8. Record of preliminary conference. — Within five (5) days after the termination of the
preliminary conference, the court shall issue an order stating the matters taken up therein, including but not
limited to:

Sec. 2. Determination of applicability. — Upon the filing of a civil or criminal action, the court (a) Whether the parties have arrived at an amicable settlement, and if so, the terms thereof;
shall issue an order declaring whether or not the case shall be governed by this Rule A patently erroneous
determination to avoid the application of the Rule on Summary Procedure is a ground for disciplinary action. (b) The stipulations or admissions entered into by the parties;.

II. (c) Whether, on the basis of the pleadings and the stipulations and admissions made by the parties,
judgment may be rendered without the need of further proceedings, in which event the judgment shall be
Civil Cases rendered within thirty (30) days from issuance of the order;

Sec. 3. Pleadings. — (d) A clear specification of material facts which remain controverted; and

A. Pleadings allowed. — The only pleadings allowed to be filed are the complaints, compulsory (e) Such other matters intended to expedite the disposition of the case.
counterclaims and cross-claims' pleaded in the answer, and the answers thereto.
Sec. 9. Submission of affidavits and position papers. — Within ten (10) days from receipt of the
B. Verifications. — All pleadings shall be verified. order mentioned in the next preceding section, the parties shall submit the affidavits of their witnesses and
other evidence on the factual issues defined in the order, together with their position papers setting forth the
Sec. 4. Duty of court. — After the court determines that the case falls under summary procedure, law and the facts relied upon by them.
it may, from an examination of the allegations therein and such evidence as may be attached thereto, dismiss
the case outright on any of the grounds apparent therefrom for the dismissal of a civil action. If no ground for Sec. 10. Rendition of judgment. — Within thirty (30) days after receipt of the last affidavits and
dismissal is found it shall forthwith issue summons which shall state that the summary procedure under this position papers, or the expiration of the period for filing the same, the court shall render judgment.
Rule shall apply. d-
However should the court find it necessary to clarify certain material facts, it may, during the said
Sec. 5. Answer. — Within ten (10) days from service of summons, the defendant shall file his period, issue an order specifying the matters to be clarified, and require the parties to submit affidavits or other
answer to the complaint and serve a copy thereof on the plaintiff. Affirmative and negative defenses not evidence on the said matters within ten (10) days from receipt of said order. Judgment shall be rendered within
pleaded therein shall be deemed waived, except for lack of jurisdiction over the subject matter. Cross-claims fifteen (15) days after the receipt of the last clarificatory affidavits, or the expiration of the period for filing the
and compulsory counterclaims not asserted in the answer shall be considered barred. The answer to same.
counterclaims or cross-claims shall be filed and served within ten (10) days from service of the answer in
which they are pleaded. The court shall not resort to the clarificatory procedure to gain time for the rendition of the
judgment.
Sec. 6. Effect of failure to answer. — Should the defendant fail to answer the complaint within
the period above provided, the court, motu proprio, or on motion of the plaintiff, shall render judgment as may III.
be warranted by the facts alleged in the complaint and limited to what is prayed for therein: Provided,
Criminal Cases
however, that the court may in its discretion reduce the amount of damages and attorney's fees claimed for
being excessive or otherwise unconscionable. This is without prejudice to the applicability of Section 4, Rule Sec. 11. How commenced. — The filing of criminal cases falling within the scope of this Rule
15 of the Rules of Court, if there are two or more defendants. shall be either by complaint or by information: Provided, however, that in Metropolitan Manila and in
Chartered Cities. such cases shall be commenced only by information, except when the offense cannot be
Sec. 7. Preliminary conference; appearance of parties. — Not later than thirty (30) days after
prosecuted de oficio.
the last answer is filed, a preliminary conference shall be held. The rules on pre-trial in ordinary cases shall be
applicable to the preliminary conference unless inconsistent with the provisions of this Rule. The complaint or information shall be accompanied by the affidavits of the compliant and of his
witnesses in such number of copies as there are accused plus two (2) copies for the court's files.If this
The failure of the plaintiff to appear in the preliminary conference shall be a cause for the dismissal
requirement is not complied with within five (5) days from date of filing, the care may be dismissed.
of his complaint. The defendant who appears in the absence of the plaintiff shall be entitled to judgment on his
counterclaim in accordance with Section 6 hereof. All cross-claims shall be dismissed. Sec. 12. Duty of court. —
 (a) If commenced by compliant. — On the basis of the compliant and the affidavits and other shall be dismissed without prejudice and may be revived only after such requirement shall have been complied
evidence accompanying the same, the court may dismiss the case outright for being patently without basis or with. This provision shall not apply to criminal cases where the accused was arrested without a warrant.
merit and order the release of the amused if in custody.
Sec. 19. Prohibited pleadings and motions. — The following pleadings, motions or petitions
(b) If commenced by information. — When the case is commenced by information, or is not shall not be allowed in the cases covered by this Rule:
dismissed pursuant to the next preceding paragraph, the court shall issue an order which, together with copies
of the affidavits and other evidence submitted by the prosecution, shall require the accused to submit his (a) Motion to dismiss the complaint or to quash the complaint or information except on the ground
counter-affidavit and the affidavits of his witnesses as well as any evidence in his behalf, serving copies of lack of jurisdiction over the subject matter, or failure to comply with the preceding section;
thereof on the complainant or prosecutor not later than ten (10) days from receipt of said order. The
(b) Motion for a bill of particulars;
prosecution may file reply affidavits within ten (10) days after receipt of the counter-affidavits of the defense.
(c) Motion for new trial, or for reconsideration of a judgment, or for opening of trial;
Sec. 13. Arraignment and trial. — Should the court, upon a consideration of the complaint or
information and the affidavits submitted by both parties, find no cause or ground to hold the accused for trial, (d) Petition for relief from judgment;
it shall order the dismissal of the case; otherwise, the court shall set the case for arraignment and trial.
(e) Motion for extension of time to file pleadings, affidavits or any other paper;
If the accused is in custody for the crime charged, he shall be immediately arraigned and if he enters
a plea of guilty, he shall forthwith be sentenced. (f) Memoranda;

Sec. 14. Preliminary conference. — Before conducting the trial, the court shall call the parties to (g) Petition for certiorari, mandamus, or prohibition against any interlocutory order issued by the
a preliminary conference during which a stipulation of facts may be entered into, or the propriety of allowing court;
the accused to enter a plea of guilty to a lesser offense may be considered, or such other matters may be taken
up to clarify the issues and to ensure a speedy disposition of the case.However, no admission by the accused (h) Motion to declare the defendant in default
shall be used against him unless reduced to writing and signed by the accused and his counsel.A refusal or
(i) Dilatory motions for postponement;
failure to stipulate shall not prejudice the accused.
(j) Reply;
Sec. 15. Procedure of trial. — At the trial, the affidavits submitted by the parties shall constitute
the direct testimonies of the witnesses who executed the same. Witnesses who testified may be subjected to (k) Third party complaints;
cross-examination, redirect or re-cross examination. Should the affiant fail to testify, his affidavit shall not be
considered as competent evidence for the party presenting the affidavit, but the adverse party may utilize the (l) Interventions.
same for any admissible purpose.
Sec. 20. Affidavits. — The affidavits required to be submitted under this Rule shall state only facts
Except in rebuttal or surrebuttal, no witness shall be allowed to testify unless his affidavit was of direct personal knowledge of the affiants which are admissible in evidence, and shall show their competence
previously submitted to the court in accordance with Section 12 hereof. to testify to the matters stated therein.

However, should a party desire to present additional affidavits or counter-affidavits as part of his A violation of this requirement may subject the party or the counsel who submits the same to
direct evidence, he shall so manifest during the preliminary conference, stating the purpose thereof. If allowed disciplinary action, and shall be cause to expunge the inadmissible affidavit or portion thereof from the record.
by the court, the additional affidavits of the prosecution or the counter-affidavits of the defense shall be
submitted to the court and served on the adverse party not later than three (3) days after the termination of the Sec. 21. Appeal. — The judgment or final order shall be appealable to the appropriate regional
preliminary conference. If the additional affidavits are presented by the prosecution, the accused may file his trial court which shall decide the same in accordance with Section 22 of Batas Pambansa Blg. 129. The
counter-affidavits and serve the same on the prosecution within three (3) days from such service. decision of the regional trial court in civil cases governed by this Rule, including forcible entry and unlawful
detainer, shall be immediately executory, without prejudice to a further appeal that may be taken therefrom.
Sec. 16. Arrest of accused. — The court shall not order the arrest of the accused except for failure Section 10 of Rule 70 shall be deemed repealed.
to appear whenever required. Release of the person arrested shall either be on bail or on recognizance by a
responsible citizen acceptable to the court. Sec. 22. Applicability of the regular rules. — The regular procedure prescribed in the Rules of
Court shall apply to the special cases herein provided for in a suppletory capacity insofar as they are not
Sec. 17. Judgment. — Where a trial has been conducted, the court shall promulgate the judgment inconsistent herewith.
not later than thirty (30) days after the termination of trial.
Sec. 23. Effectivity. — This revised Rule on Summary Procedure shall be effective on November
IV. 15, 1991.

COMMON PROVISIONS

Sec. 18. Referral to Lupon. — Cases requiring referral to the Lupon for conciliation under the
provisions of Presidential Decree No. 1508 where there is no showing of compliance with such requirement,
 Section 5. Applicability. - The Metropolitan Trial Courts, Municipal Trial Courts in Cities,
Municipal Trial Courts, and Municipal Circuit Trial Courts shall apply this Rule in all actions that are purely
civil in nature where the claim or relief prayed for by the plaintiff is solely for payment or
reimbursement of sum of money.
The claim or demand may be:

(a) For money owed under any of the following:

1. Contract of Lease;
2. Contract of Loan;
3. Contract of Services;
4. Contract of Sale; or
5. Contract of Mortgage;
(b) For liquidated damages arising from contracts;

(c) The enforcement of a barangay amicable settlement or an arbitration award involving a money
claim covered by this Rule pursuant to Sec. 417 of Republic Act 7160, otherwise known as The Local
Government Code of 1991.
A. M. No. 08-8-7-SC February 1, 2016
THE REVISED RULES OF PROCEDURE FOR SMALL CLAIMS CASES Section 6. Commencement of Small Claims Action. - A small claims action is commenced by
RESOLUTION filing with the court an accomplished and verified Statement of Claim (Form 1-SCC) in duplicate,
accompanied by a Certification Against Forum Shopping, Splitting a Single Cause of Action, and Multiplicity
Section 1. Title. - These Rules shall be known as "The Revised Rules of Procedure for Small of Suits (Form 1-A SCC), and two (2) duly certified photocopies of the actionable document/s subject of the
Claims Cases." claim, as well as the affidavits of witnesses and other evidence to support the claim. No evidence shall be
allowed during the hearing which was not attached to or submitted together with the Statement of Claim,
Section 2. Scope. - These Rules shall govern the procedure in actions before the Metropolitan Trial unless good cause is shown for the admission of additional evidence.
Courts (MeTCs), Municipal Trial Courts in Cities (MTCCs), Municipal Trial Courts (MTCs) and Municipal
Circuit Trial Courts (MCTCs) for payment of money where the value of the claim does not exceed Two The plaintiff must state in the Statement of Claims if he/she/it is engaged in the business of lending,
Hundred Thousand Pesos (P200,000.00) exclusive of interest and costs. banking and similar activities, and the number of small claims cases filed within the calendar year regardless
of judicial station.
Section 3. Objectives. -
No formal pleading, other than the Statement of Claim/s described in this Rule, is necessary to
(a) To protect and advance the constitutional right of persons to a speedy disposition of their cases; initiate a small claims action.
(b) To provide a simplified and inexpensive procedure for the disposition of small claims cases; and,
(c) To introduce innovations and best practices for the benefit of the underprivileged. Section 7. Venue. - The regular rules on venue shall apply.

However, if the plaintiff is engaged in the business of lending, banking and similar activities, and
Section 4. Definition of Terms. - For purposes of this Rule:
has a branch within the municipality or city where the defendant resides, the Statement of Claim/s shall be
(a) Plaintiff refers to the party who initiated a small claims action. The term includes a defendant who has filed where that branch is located.
filed a counterclaim against plaintiff;
(b) Defendant is the party against whom the plaintiff has filed a small claims action. The term includes a Section 8. Joinder of Claims. - Plaintiff may join in a single statement of claim one or more
plaintiff against whom a defendant has filed a claim, or a person who replies to the claim; separate small claims against a defendant provided that the total amount claimed, exclusive of interest and
(c) Person is an individual, corporation, partnership, limited liability partnership, association, or other juridical costs, does not exceed Two Hundred Thousand Pesos (P200,000.00).
entity endowed with personality by law;
Section 9. Affidavits. - The affidavits submitted under this Rule shall state only facts of direct
(d) Individual is a natural person;
personal knowledge of the affiants or based on authentic records, which are admissible in evidence.
(e) Motion means a party's request, written or oral, to the court for an order or other action. It shall include an
informal written request to the court, such as a letter; A violation of this requirement shall subject the party, and the counsel who assisted the party in the
(f) Good cause means circumstances sufficient to justify the requested order or other action, as determined by preparation of the affidavits, if any, to appropriate disciplinary action. The inadmissible affidavit(s) or
the judge; and, portion(s) thereof shall be expunged from the record.
(g) Affidavit means a written statement or declaration of facts that are sworn or affirmed to be true.
The non-submission of the required affidavits will cause the immediate dismissal of the claim or
counterclaim.
 Section 10. Payment of Filing Fees. - The plaintiff shall pay the docket and other legal fees If Summons is returned without being served on any or all of the defendants, the court shall order
prescribed under Rule 141 of the Revised Rules of Court, unless allowed to litigate as an indigent. Exemption the plaintiff to cause the service of summons and shall inform the court within thirty (30) days from notice if
from the payment of filing fees shall be granted only by the Supreme Court. said summons was served or not; otherwise, the Statement of Claim/s shall be dismissed without prejudice as
to those who were not served with summons.
However, if more than five (5) small claims are filed by one party within the calendar year,
regardless of the judicial station, an additional filing fee of P500.00 shall be paid for every claim filed after the Section 13. Response. - The defendant shall file with the court and serve on the plaintiff a duly
fifth (5th) claim, and an additional P100.00 or a total of P600.00 for every claim filed after the tenth (10th) accomplished and verified Response within a non-extendible period of ten (10) days from receipt of summons.
claim, and another P100.00 or a total of P700 for every claim filed after the fifteenth (15th) claim, The Response shall be accompanied by certified photocopies of documents, as well as affidavits of witnesses
progressively and cumulatively. and other evidence in support thereof. No evidence shall be allowed during the hearing which was not attached
to or submitted together with the Response, unless good cause is shown for the admission of additional
If the plaintiff is engaged in the business of banking, lending and similar activities, the amount of evidence.
filing and other legal fees shall be the same as those applicable to cases filed under the regular rules.
Section 14. Effect of Failure to File Response. - Should the defendant fail to file his/her/its
A claim filed with a motion to sue as indigent (Form 6-SCC) shall be referred to the Executive Response within the required period, and likewise fail to appear on the date set for hearing, the court shall
Judge for immediate action in case of multi-sala courts. If the motion is granted by the Executive Judge, the render judgment on the same day, as may be warranted by the facts alleged in the Statement of Claim/s.
case shall be raffled off or assigned to the court designated to hear small claims cases. If the motion is denied,
the plaintiff shall be given five (5) days within which to pay the docket fees, otherwise, the case shall be Should the defendant fail to file his/her/its Response within the required period but appears on the
dismissed without prejudice. In no case shall a party, even if declared an indigent, be exempt from the date set for hearing, the court shall ascertain what defense he/she/it has to offer which shall constitute
payment of the P1,000.00 fee for service of summons and processes. his/her/its Response, and proceed to hear or adjudicate the case on the same day as if a Response has been
filed.
Section 11. Dismissal of the Claim. - After the court determines that the case falls under these
Rules, it may, from an examination of the allegations of the Statement of Claim/s and such evidence attached Section 15. Counterclaims Within the Coverage of this Rule. - If at the time the action is
thereto, by itself, dismiss the case outright on any of the grounds for the dismissal of the case. The order of commenced, the defendant possesses a claim against the plaintiff that (a) is within the coverage of this Rule,
dismissal shall state if it is with or without prejudice. exclusive of interest and costs; (b) arises out of the same transaction or event that is the subject matter of the
plaintiff's claim; (c) does not require for its adjudication the joinder of third parties; and (d) is not the subject
If, during the hearing, the court is able to determine that there exists a ground for dismissal of the of another pending action, the claim shall be filed as a counterclaim in the Response; otherwise, the defendant
Statement of Claim/s, the court may, by itself, dismiss the case even if such ground is not pleaded in the shall be barred from suing on the counterclaim.
defendant's Response.
The defendant may also elect to file a counterclaim against the plaintiff that does not arise out of the
If plaintiff misrepresents that he/she/it is not engaged in the business of banking, lending or similar same transaction or occurrence, provided that the amount and nature thereof are within the coverage of this
activities when in fact he/she/it is so engaged, the Statement of Claim/s shall be dismissed with prejudice and Rule and the prescribed docket and other legal fees are paid.
plaintiff shall be meted the appropriate sanctions, such as direct contempt.
Section 16. Prohibited Pleadings and Motions. - The following pleadings, motions, or petitions shall
However, if the case does not fall under this Rule, but falls under summary or regular procedure, the not be allowed in the cases covered by this Rule:
case shall not be dismissed. Instead, the case shall be re-docketed under the appropriate procedure, and
returned to the court where it was assigned, subject to payment of any deficiency in the applicable regular rate (a) Motion to dismiss the Statement of Claim/s;
of filing fees. If a case is filed under the regular or summary procedure, but actually falls under this Rule, the (b) Motion for a bill of particulars;
case shall be referred to the Executive Judge for appropriate assignment. (c) Motion for new trial, or for reconsideration of a judgment, or for reopening of trial;
(d) Petition for relief from judgment;
Section 12. Summons and Notice of Hearing. - If no ground for dismissal is found, the court shall
(e) Motion for extension of time to file pleadings, affidavits, or any other paper;
forthwith issue Summons (Form 2-SCC) on the day of receipt of the Statement of Claim/s, directing the
(f) Memoranda;
defendant to submit a verified Response.
(g) Petition for certiorari, mandamus, or prohibition against any interlocutory order issued by the court;
The court shall also issue a Notice of Hearing (Form 4-SCC) to both parties, directing them to (h) Motion to declare the defendant in default;
appear before it on a specific date and time for hearing, with a warning that no unjustified postponement shall (i) Dilatory motions for postponement;
be allowed, as provided in Section 21 of this Rule. (j) Reply and rejoinder;
(k) Third-party complaints; and
The Summons to be served on the defendant shall be accompanied by a copy of the Statement of
(l) Interventions.
Claim/s and documents submitted by plaintiff, and a blank Response Form (Form 3-SCC) to be accomplished
Section 17. Availability of Forms; Assistance by Court Personnel. - The Clerk of Court or other
by the defendant.
court personnel shall provide such assistance as may be requested by a plaintiff or a defendant regarding the
A Notice of Hearing shall accompany the Summons and shall contain: (a) the date of the hearing, availability of forms and other information about the coverage, requirements as well as procedure for small
which shall not be more than thirty (30) days from the filing of the Statement of Claim/s; and (b) the express claims cases.
prohibition against the filing of a motion to dismiss or any other motion under Section 16 of this Rule.
 Section 18. Appearance. - The parties shall personally appear on the designated date of hearing. Section 27. Applicability of the Rules of Civil Procedure. - The Rules of Civil Procedure shall
apply suppletorily insofar as they are not inconsistent with this Rule.
Appearance through a representative must be for a valid cause. The representative of an individual-
party must not be a lawyer and must be related to or next-of-kin of the individual-party. Juridical entities shall Section 28. Non-applicability. - The rules on mediation/judicial dispute resolution shall not apply,
not be represented by a lawyer in any capacity inasmuch as the parties may enter into compromise at any stage of the proceedings.

The representative must be authorized under a Special Power of Attorney (Form 7-SCC) to enter Section 29. Effectivity. - These Revised Rules shall take effect on February 1, 2016 following their
into an amicable settlement of the dispute and to enter into stipulations or admissions of facts and of publication in two newspapers of general circulation. They shall govern all cases filed after their effectivity,
documentary exhibits. and also all pending proceedings, except to the extent that in the opinion of the court, their application would
not be feasible or would work injustice, in which case the procedure under which the cases were filed shall
Section 19. Appearance of Attorneys Not Allowed. - No attorney shall appear in behalf of or govern.
represent a party at the hearing, unless the attorney is the plaintiff or defendant.
The following forms shall be used. Substantial compliance therewith shall be sufficient.
If the court determines that a party cannot properly present his/her claim or defense and needs
assistance, the court may, in its discretion, allow another individual who is not an attorney to assist that party (See attached forms)
upon the latter's consent.

Section 20. Non-appearance of Parties. - Failure of the plaintiff to appear shall be cause for the
dismissal of the Statement of Claim/s without prejudice. The defendant who appears in the absence of the
plaintiff shall be entitled to judgment on a permissive counterclaim.

Failure of the defendant to appear shall have the same effect as failure to file a Response under
Unlawful detainer v. agrarian dispute
Section 14 of this Rule. This shall not apply where one of two or more defendants who are sued under a
common cause of action and have pleaded a common defense appears at the hearing. G.R. No. 167891               January 15, 2010
Failure of both parties to appear shall cause the dismissal with prejudice of both the Statement of SPOUSES JESUS FAJARDO and EMER FAJARDO, Petitioners, vs. ANITA R. FLORES, assisted by
Claim/s and the counterclaim. her husband, BIENVENIDO FLORES, Respondent.

Section 21. Postponement When Allowed. - A request for postponement of a hearing may be DECISION
granted only upon proof of the physical inability of the party to appear before the court on the scheduled date
and time. A party may avail of only one (1) postponement NACHURA, J.:

Section 22. Duty of the Court. - At the beginning of the court session, the judge shall read aloud a Before us is a petition for review of the Decision 1 of the Court of Appeals (CA) dated October 28, 2004 and its
short statement explaining the nature, purpose and the rule of procedure of small claims cases. Resolution dated April 19, 2005, denying the motion for reconsideration thereof.

The facts are as follows:

Section 23. Hearing. - At the hearing, the judge shall first exert efforts to bring the parties to an
amicable settlement of their dispute. If efforts at settlement fail, the hearing shall immediately proceed in an Leopoldo delos Reyes owned a parcel of land, denominated as Lot No. 2351 (Cad. 320-D), with an area of
informal and expeditious manner and be terminated within the same day. 25,513 square meters (sq m), located in Barangay Sumandig in Hacienda Buenavista, San Ildefonso, Bulacan.
In 1963, he allowed petitioner Jesus Fajardo to cultivate said land. The net harvests were divided equally
Any settlement (Form 8-SCC) or resolution of the dispute shall be reduced into writing, signed by between the two until 1975 when the relationship was converted to leasehold tenancy. Per Order 2 from the
the parties and submitted to the court for approval (Form 9-SCC and Form 10-SCC). Department of Agrarian Reform (DAR), Regional Office, Region III, San Fernando, Pampanga, rent was
provisionally fixed at 27.42 cavans per year, which Jesus Fajardo religiously complied with. From the time
Section 24. Decision. - After the hearing, the court shall render its decision based on the facts petitioner cultivated the land, he was allowed by Leopoldo delos Reyes to erect a house for his family on the
established by the evidence (Form 11-SCC), within twenty-four (24) hours from termination of the hearing. stony part of the land, which is the subject of controversy.
The decision shall immediately be entered by the Clerk of Court in the court docket for civil cases and a copy
thereof forthwith served on the parties. On January 26, 1988, Leopoldo delos Reyes died. His daughter and sole heir, herein respondent Anita Flores,
inherited the property. On June 28, 1991, Anita Flores and Jesus Fajardo executed an agreement, denominated
The decision shall be final, executory and unappealable. as "KASUNDUAN NG PAGHAHATI NG LUPA AT PAGTATALAGA NG DAAN UKOL SA
MAGKABILANG PANIG."3 This was followed by another agreement, "KASUNDUAN SA HATIAN SA
Section 25. Execution. - When the decision is rendered, execution shall issue upon motion (Form LUPA," executed on July 10, 1991, wherein the parties agreed to deduct from Lot No. 2351 an area of 10,923
12-SCC) of the winning party. sq m, allotting the same to petitioner. Apparently, there was a conflict of claims in the interpretation of the
Kasunduan between Anita Flores and Jesus Fajardo, which was referred to the DAR, Provincial Agrarian
Section 26. Certification of Documents. - All documents attached to the Statement of Claim/s or Reform Office, Baliuag, Bulacan.4 In the Report and Recommendation dated May 3, 2000, the Legal Officer
Response that are required to be certified, except public or official documents, shall be certified by the advised the parties to ventilate their claims and counterclaims with the Department of Agrarian Reform
signature of the plaintiff or defendant concerned. Adjudication Board (DARAB), Malolos, Bulacan.5
On December 22, 2000, a complaint for ejectment was filed by herein respondent Anita Flores, assisted by her and residential in nature, one that may not be made to fall within the ambit of the operation of Philippine
husband Bienvenido Flores, against petitioners with the Municipal Trial Court (MTC), San Ildefonso, Bulacan. agrarian laws, owing to its non-agriculture character. The CA explained that, on the strength of the two
In the complaint, she alleged that, as the sole heir of the late Leopoldo delos Reyes, she inherited a parcel of instruments, the parties made a partition and divided the agricultural portion of Lot No. 2351 equally among
land consisting of stony land, not devoted to agriculture, and land suitable and devoted to agriculture located in themselves. By virtue of said division, the parties effectively severed and terminated the agricultural
Barangay Sumandig, San Ildefonso, Bulacan; that, sometime in the 1960s, during the lifetime of Leopoldo leasehold/tenancy relationship between them; thus, there was no longer any agrarian dispute to speak of.
delos Reyes, Jesus Fajardo requested the former to allow him to work and cultivate that portion of land Fajardo had already acquired the benefits under the Comprehensive Agrarian Reform Law when one-half of
devoted to agriculture; that Jesus Fajardo was then allowed to erect a house on the stony part of the land, and the agricultural portion of Lot No. 2351 was allotted to him. Petitioners cannot, therefore, be allowed to
that the use and occupation of the stony part of the land was by mere tolerance only; and that the land, which continue possession of a part of the stony portion, which was not included in the land he was cultivating.9 The
was divided equally between the two parties, excluded the stony portion. In February 1999, respondent dispositive portion of the CA Decision reads as follows:
approached petitioners and verbally informed them of her intention to repossess the stony portion, but
petitioners refused to heed the request. WHEREFORE, premises considered, finding that the court a quo seriously erred when it reversed itself, its
Order dated December 10, 2002 is REVERSED and SET ASIDE. Accordingly, the Decision dated April 25,
Petitioners filed a Motion to Dismiss, alleging that Lot No. 2351, with an area of 25,513 sq m, was agricultural 2001 of the MTC of San Ildefonso, Bulacan is hereby REINSTATED.10
land; that they had been continuously, uninterruptedly, and personally cultivating the same since 1960 up to
the present; that the MTC had no jurisdiction over the case, considering that the dispute between the parties, The subsequent motion for reconsideration was denied; hence, this petition.
regarding the Kasunduan, was referred to the DARAB; and that the assumption by the DARAB of jurisdiction
over the controversy involving the lot in question therefore precluded the MTC from exercising jurisdiction The issue in this case is whether it is MTC or the DARAB which has jurisdiction over the case.
over the case.
There is no dispute that, on June 28, 1991, the parties executed an agreement, denominated as "KASUNDUAN
Resolving the Motion to Dismiss, the MTC ruled that, while at first glance, the court did not have jurisdiction NG PAGHAHATI NG LUPA AT PAGTATALAGA NG DAAN UKOL SA MAGKABILANG PANIG."
over the case, considering that it was admitted that petitioner was allowed to cultivate the land, a closer look at Therein, it was admitted that Jesus Fajardo was the tiller of the land. This Kasunduan was subsequently
the Kasunduan, however, revealed that what was divided was only the portion being tilled. By contrast, the followed by another agreement, "KASUNDUAN SA HATIAN SA LUPA," whereby an area of 10,923 sq m of
subject matter of the complaint was the stony portion where petitioners’ house was erected. Thus, the court Lot No. 2351 was given to petitioners. The portion of the land where petitioners’ house is erected is the subject
ruled that it had jurisdiction over the subject matter.6 of the instant case for unlawful detainer. Respondent argues that this portion is not included in the deed of
partition, while petitioners insist that it is.
On April 25, 2001, the MTC rendered judgment in favor of respondent. The dispositive portion reads as
follows: We agree with the RTC when it clearly pointed out in its Order dated December 10, 2002 that the resolution of
this case hinges on the correct interpretation of the contracts executed by the parties. The issue of who has a
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff (respondent), better right of possession over the subject land cannot be determined without resolving first the matter as to
ORDERING defendants (petitioners) – whom the subject property was allotted. Thus, this is not simply a case for unlawful detainer, but one that is
incapable of pecuniary estimation, definitely beyond the competence of the MTC.11
1) and all persons claiming rights under them to VACATE the subject premises where they have
erected their house, which is a portion of Lot No. 2351, Cad-320-D situated [in] Barangay More importantly, the controversy involves an agricultural land, which petitioners have continuously and
Sumandig, San Ildefonso, Bulacan; personally cultivated since the 1960s. In the Kasunduan, it was admitted that Jesus Fajardo was the tiller of the
land. Being agricultural lessees, petitioners have a right to a home lot and a right to exclusive possession
2) to DEMOLISH their house on the subject premises; thereof by virtue of Section 24, R.A. No. 3844 of the Agricultural Land Reform Code.12 Logically, therefore,
the case involves an agrarian dispute, which falls within the contemplation of R.A. No. 6657, or the
3) to PAY plaintiff the sum of ₱400.00 a month by way of reasonable compensation for their use Comprehensive Agrarian Reform Law.
and occupation of the subject premises starting [in] June 2000 and every month thereafter until they
finally vacate the same; and An agrarian dispute13 refers to any controversy relating to tenurial arrangements, whether leasehold, tenancy,
stewardship, or otherwise, over lands devoted to agriculture, including disputes concerning farmworkers’
4) to PAY attorney’s fees of ₱10,000.00 and the cost of suit.7 associations or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange
terms or conditions of such tenurial arrangements. It includes any controversy relating to compensation of
On appeal, the Regional Trial Court (RTC), Branch 16, Third Judicial Region, Malolos, Bulacan, affirmed the lands acquired under this Act and other terms and conditions of transfer of ownership from landowner to
MTC Decision in toto upon a finding that no reversible error was committed by the court a quo in its farmworkers, tenants, and other agrarian reform beneficiaries, whether the disputants stand in the proximate
Decision8 dated August 29, 2002. relation of farm operator and beneficiary, landowner and tenant, or lessor and lessee. It relates to any
controversy relating to, inter alia, tenancy over lands devoted to agriculture.14
On motion for reconsideration, however, the RTC issued an Order on December 10, 2002, reversing its
decision dated August 29, 2002. The RTC found that the issue involved appeared to be an agrarian dispute, Undeniably, the instant case involves a controversy regarding tenurial arrangements. The contention that the
which fell within the contemplation of Republic Act (R.A.) No. 6657, otherwise known as the Comprehensive Kasunduans, which allegedly terminated the tenancy relationship between the parties and, therefore, removed
Agrarian Reform Law of 1988, and thus ordered the dismissal of the case for lack of jurisdiction. the case from the ambit of R.A. No. 6657, is untenable. There still exists an agrarian dispute because the
controversy involves the home lot of petitioners, an incident arising from the landlord-tenant relationship.
A petition for review was then filed by respondents with the CA to annul the Order of the RTC dated
December 10, 2002.
● Amurao v. Villalobos is quite instructive:
On October 28, 2004, the CA rendered the assailed decision, which reinstated the MTC decision. It disagreed
with the findings of the RTC and ruled that the part of Lot No. 2351 where petitioners’ house stood was stony
The instant case undeniably involves a controversy involving tenurial arrangements because the Kasulatan will SECOND DIVISION
definitely modify, nay, terminate the same. Even assuming that the tenancy relationship between the parties
had ceased due to the Kasulatan, there still exists an agrarian dispute because the action involves an incident FERNANDA GEONZON VDA. DE BARRERA G.R. No. 174346
arising from the landlord and tenant relationship. AND JOHNNY OCO, JR., Present:
Petitioners, QUISUMBING, J., Chairperson,
In Teresita S. David v. Agustin Rivera, this Court held that: - versus - CARPIO MORALES,
HEIRS OF VICENTE LEGASPI, TINGA,
[I]t is safe to conclude that the existence of prior agricultural tenancy relationship, if true, will divest the REPRESENTED BY PEDRO LEGASPI, VELASCO, JR., and
MCTC of its jurisdiction the previous juridical tie compels the characterization of the controversy as an Respondents. BRION, JJ.
"agrarian dispute." x x x Even if the tenurial arrangement has been severed, the action still involves an incident Promulgated:
arising from the landlord and tenant relationship. Where the case involves the dispossession by a former September 12, 2008
landlord of a former tenant of the land claimed to have been given as compensation in consideration of the
renunciation of the tenurial rights, there clearly exists an agrarian dispute. On this point the Court has already CARPIO MORALES, J.:
ruled:
Under review before this Court is the July 31, 2006 Decision of the Court of Appeals,which affirmed that
"Indeed, section 21 of the Republic Act No. 1199, provides that ‘all cases involving the dispossession of a of the Regional Trial Court, Branch 16, of Tangub City in Civil Case No. TC-97-001, ordering the
tenant by the landlord or by a third party and/or the settlement and disposition of disputes arising from the defendants-petitioners herein, Fernanda Geonzon vda. de Barrera and Johnny Oco. Jr. to return possession
relationship of landlord and tenant . . . shall be under the original and exclusive jurisdiction of the Court of of the subject property to the plaintiffs-herein respondents, Heirs of Vicente Legaspi.
Agrarian Relations.’ This jurisdiction does not require the continuance of the relationship of landlord and
tenant—at the time of the dispute. The same may have arisen, and often times arises, precisely from the On October 1, 1996, petitioner Johnny Oco Jr. (Oco), said to be a "peace officer connected with the PNP,"
previous termination of such relationship. If the same existed immediately, or shortly, before the controversy accompanied by "unidentified CAFGU members," forced his way into respondents’ 0.9504-hectare
and the subject-matter thereof is whether or not said relationship has been lawfully terminated, or if the dispute irrigated farmland located at Liloan, Bonifacio, Misamis Occidental. After dispossessing respondents of the
springs or originates from the relationship of landlord and tenant, the litigation is (then) cognizable by the property, Oco and company used a tractor to destroy the planted crops, took possession of the land, and had
Court of Agrarian Relations . . ." since tended it.

In the case at bar, petitioners’ claim that the tenancy relationship has been terminated by the Kasulatan is of no Respondents thus filed on February 7, 1997 a complaint before the Regional Trial Court of Tangub City for
moment. As long as the subject matter of the dispute is the legality of the termination of the relationship, or if Reconveyance of Possession with Preliminary Mandatory Injunction and Damages against petitioners.
the dispute originates from such relationship, the case is cognizable by the DAR, through the DARAB. The
severance of the tenurial arrangement will not render the action beyond the ambit of an agrarian dispute.15 In their Answer, petitioners claimed that the subject land forms part of a three-hectare property described in
OCT No. P-447 issued on February 10, 1956 in the name of Andrea Lacson who sold a 2-hectare portion
Furthermore, the records disclose that the dispute between the parties, regarding the interpretation of the thereof to Eleuterio Geonzon who, in turn, sold 1.1148 thereof to his sister petitioner Fernanda Geonzon
Kasunduan, was, in fact, raised and referred to the DAR, which in turn referred the case to the DARAB. 16 In vda. de Barrera (Fernanda).
view of the foregoing, we reiterate Hilario v. Prudente,17 that:
Respondents, on the other hand, asserted that the land was occupied, possessed and cultivated by their
The doctrine of primary jurisdiction precludes the courts from resolving a controversy over which jurisdiction predecessor-in-interest Vicente Legaspi and his wife Lorenza since 1935; after a subdivision survey was
has initially been lodged with an administrative body of special competence. For agrarian reform cases, conducted in November 30, 1976, it was found out that the land formed part of the titled property of
jurisdiction is vested in the Department of Agrarian Reform (DAR); more specifically, in the Department of Andrea Lacson; and despite this discovery, they never filed any action to recover ownership thereof since
Agrarian Reform Adjudication Board (DARAB). they were left undisturbed in their possession, until October 1, 1996 when petitioners forced their way into
it.
WHEREFORE, the Decision dated October 28, 2004 of the Court of Appeals is REVERSED and SET ASIDE.
The Order of the Regional Trial Court dated December 10, 2002 is REINSTATED. Petitioners raised the issue of ownership as a special affirmative defense. In their Memorandum, however,
they questioned the jurisdiction of the RTC over the subject matter of the complaint, the assessed value of
the land being only P11,160, as reflected in Tax Declaration No. 7565.

By Decision of November 27, 1998, the trial court found for respondents, disposing as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs [herein respondents] and against the
defendants [-herein petitioners]:

1. Ordering the latter to return the possession of the land in question to the plaintiffs and

2. Ordering the latter to desist from further depriving and disturbing plaintiffs’ peaceful possession thereof,
unless there be another court judgment to the contrary.

SO ORDERED.

Recovery of possession
On the issue of jurisdiction over the subject matter, the trial court, maintaining that it had, held: Assessed value is understood to be "the worth or value of property established by taxing authorities on the
basis of which the tax rate is applied. Commonly, however, it does not represent the true or market value of
The Court is not persuaded by [the defendants’] arguments. What determines the nature of the action as the property."
well as the jurisdiction of the [c]ourt are the facts alleged in the complaint and not those alleged in the
answer of the defendants. The subject land has an assessed value of P11,160 as reflected in Tax Declaration No. 7565, a common
exhibit of the parties. The bare claim of respondents that it has a value of P50,000 thus fails. The case,
In [p]ar. 2 of plaintiffs’ complaint, the land in question was described as a riceland "situated at Liloan, therefore, falls within the exclusive original jurisdiction of the municipal trial court.
Bonifacio, Misamis Occ. and declared under [T]ax [D]eclaration No. 7564 in the name of Vicente Legaspi
and bounded on the north by a creek, on the east Sec. 12, on the south Lot No. 007 and on the west also by It was error then for the RTC to take cognizance of the complaint based on the allegation that "the present
Lot No. 007 which tax declaration cancels former [T]ax [D]eclaration No. 12933 under the name of estimated value [of the land is] P50,000," which allegation is, oddly, handwritten on the printed pleading.
Lorenza Bacul Legaspi which likewise cancels [T]ax [D]eclaration No. 5454 covering the bigger portion of The estimated value, commonly referred to as fair market value, is entirely different from the assessed
the land under which the land described under [T]ax [D]eclaration No. 7565 is part and parcel thereof value of the property.
[sic]; the present estimated value being P50,000."11 (Emphasis and underscoring supplied)
Lack of jurisdiction is one of those excepted grounds where the court may dismiss a claim or a case at any
Petitioners thereupon appealed to the Court of Appeals which affirmed the trial court’s disposition of the time when it appears from the pleadings or the evidence on record that any of those grounds exists, even if
issue of jurisdiction over the subject matter. they were not raised in the answer or in a motion to dismiss. That the issue of lack of jurisdiction was raised
by petitioners only in their Memorandum filed before the trial court did not thus render them in estoppel.
On the merits, the appellate court affirmed too the trial court’s decision, finding that "both testimonial and
documentary evidence on record established that appellees, through their predecessors-in-interest, have En passant, the Court notes that respondents’ cause of action – accion publiciana is a wrong mode. The
been in peaceful, continuous, public and actual possession of the property in dispute even before the year dispossession took place on October 1, 1996 and the complaint was filed four months thereafter or on
1930." February 7, 1997. Respondents’ exclusion from the property had thus not lasted for more than one year to
call for the remedy of accion publiciana.
The appellate court emphasized that in an accion publiciana, the only issue involved is the determination of
possession de jure. In fine, since the RTC has no jurisdiction over the complaint filed by respondents, all the proceedings
therein as well as the Decision of November 27, 1998, are null and void. The complaint should perforce be
Hence, the present petition for review which raises the following issues: dismissed. This leaves it unnecessary to still dwell on the first issue.
I. . . . WHETHER OWNERSHIP AND TITLE CANNOT BE AN ISSUE TO DETERMINE WHO HAS A WHEREFORE, the petition is hereby GRANTED. The challenged July 31, 2006 Decision of the Court of
BETTER RIGHT [TO] THE PORTION LITIGATED; AND Appeals is SET ASIDE. The decision of Branch 16 of the Regional Trial Court of Tangub City in Civil
Case No. TC-97-001 is declared NULL and VOID for lack of jurisdiction.
II. WHETHER . . . THE NATURE OF THE ACTION AS WELL AS THE JURISDICTION OF THE
COURT DEPEND ON THE FACTS AS ALLEGED IN THE COMPLAINT. SO ORDERED.
For obvious reasons, the issue of lack of jurisdiction over the subject matter shall be first considered. G.R. No. 134230            July 17, 2002
JOVENAL OUANO, petitioner, vs. PGTT INTERNATIONAL INVESTMENT CORPORATION and
Section 33 of Batas Pambansa Bilang 129, (the Judiciary Reorganization Act of 1980), as amended by HON. JUDGE RAMON G. CODILLA, JR., respondents.
Republic Act No. 7691 provides for the jurisdiction of metropolitan trial courts, municipal trial courts and SANDOVAL-GUTIERREZ, J.:
municipal circuit trial courts, to wit: PGTT International Investment Corporation (PGTT), respondent, is a corporation duly organized under
existing laws, with address at YASCO Bldg., M. J. Cuenco Ave., Cebu City.
xxxx
On December 11, 1997, PGTT filed with the Regional Trial Court (RTC), Branch 20, Cebu City, a verified
(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real property,
complaint against Jovenal Ouano, petitioner, docketed as Civil Case No. CEB- 21319, entitled "PGTT
or any interest therein where the assessed value of the property or interest therein does not exceed Twenty
INTERNATIONAL INVESTMENT CORPORATION, Plaintiff, vs. JUVENAL OUANO, Defendant," for
thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed value does not
"Recovery of Ownership and Possession of Real Property and Damages." 1 In its complaint, PGTT alleged that
exceed Fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney’s fees,
it is the owner of Lot Nos. 1-10, Block 2 of the Sunnymeade Crescent Subdivision located at Pit-os, Talamban,
litigation expenses and costs: Provided, That in cases of land not declared for taxation purposes, the value
Cebu City. Sometime in October of 1996, PGTT found that Ouano uprooted the concrete monuments of the
of such property shall be determined by the assessed value of the adjacent lots. (Emphasis, italics and
said lots, plowed them and planted corn thereon. Despite PGTT’s demand that he vacate the lots and restore
underscoring supplied)
them to their original condition, Ouano refused, claiming he is the owner and lawful possessor of the 380
Before the amendments introduced by Republic Act No. 7691, the plenary action of accion publiciana was square meters he occupied. Due to Ouano’s wrongful act, PGTT was deprived of the use of its property and
to be brought before the regional trial court. With the modifications introduced by R.A. No. 7691 in 1994, suffered damages in the amount of P100,000.00 a year. Likewise, PGTT was constrained to file the subject
the jurisdiction of the first level courts has been expanded to include jurisdiction over other real actions action and hired the services of his counsel for P100,000.00. PGTT prayed:
where the assessed value does not exceed P20,000, P50,000 where the action is filed in Metro Manila. The
"WHEREFORE, in view of all the foregoing, it is most respectfully prayed that after due notice and
first level courts thus have exclusive original jurisdiction over accion publiciana and accion reivindicatoria
hearing, judgment be rendered ordering defendant (Jovenal Ouano) to vacate the premises and
where the assessed value of the real property does not exceed the aforestated amounts. Accordingly, the
restore the lots to their original condition; pay plaintiff (PGTT) P100,000.00 as damages per year,
jurisdictional element is the assessed value of the property.
beginning October, 1996 until he shall have vacated the premises and restored the lots to their
original condition; pay P100,000.00 as attorney's fees; and pay P50,000.00 as expenses of litigation.
 "Plaintiff prays for such other reliefs and remedies, just and equitable under the premises."2 "Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit
Trial Courts in Civil Cases. – Metropolitan Trial Courts, Municipal Trial Courts and Municipal
On February 5, 1998, Ouano filed a motion to dismiss the complaint on the ground that it is the Municipal Circuit Trial Courts shall exercise:
Trial Court (MTC), not the RTC, which has jurisdiction over it considering that the assessed value of the lots
involved is only P2,910, as indicated in the latest tax declaration,3 citing Section 19 (paragraph 2) and Section (3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real
33 (paragraph 3) of Batas Pambansa Bilang 129 (The Judiciary Reorganization Act of 1980), as amended by property, or any interest therein where the assessed value of the property or interest therein
Republic Act No. 7691.4 does not exceed Twenty Thousand Pesos (P20,000.00) or, in civil actions in Metro Manila, where
such assessed value does not exceed Fifty Thousand Pesos (P50,000.00) exclusive of interest,
In its opposition to Ouano’s motion, PGTT contends that the RTC has jurisdiction since the market value of damages of whatever kind, attorney’s fees, litigation expenses and costs: Provided, That in
the lots is P49,760.00.5 Besides, the complaint is not only an action for recovery of ownership and possession cases of land not declared for taxation purposes, the value of such property shall be determined by
of real property, but also for damages exceeding P100,000.00, over which claim the RTC has exclusive the assessed value of the adjacent lots.
original jurisdiction under Section 19 (paragraph 8) of the same law.
x x x." (Emphasis ours)
On March 6, 1998, the RTC, presided by Judge Ramon G. Codilla, Jr., issued an Order denying the motion to
dismiss, holding that: Likewise, Section 19 (paragraph 2) of the same law reads:

"This court believes that this court has jurisdiction to try this case considering that the real "Sec. 19. Jurisdiction in civil cases. - The Regional Trial Court shall exercise exclusive
properties consist of ten parcels of land in a subdivision and the court takes note that there is a original jurisdiction:
discrepancy somewhere by the Office of the City Assessor in the Assessment of the parcels of land
for only less than P2,000.00 and that the government is very much at a loss by these unrealistic x x x.
valuation."6
(2) In all civil actions, which involve the title to, or possession of, real property, or any interest
Ouano filed a motion for reconsideration but was likewise denied by the RTC in its Order dated May 27, 1998. therein, where the assessed value of the property involved exceeds Twenty Thousand Pesos
The trial court ruled it has jurisdiction over the case because "(i)t is of judicial knowledge that the real (P20,000.00) or, for civil actions in Metro Manila, where such value exceeds Fifty Thousand Pesos
properties situated in Cebu City command a higher valuation than those indicated in the tax declaration. The (P50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings,
observation of plaintiff’s (PGTT’s) counsel as to the issue on damages is likewise sustained considering that, original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial
being a corporation, it may have incurred damages in the form of unrealized profits."7 Courts, and Municipal Circuit Trial Courts;

Hence the present petition for certiorari filed by Ouano under Rule 65 of the 1997 Rules of Civil Procedure, as x x x." (Emphasis ours)
amended, assailing the Orders of respondent judge dated March 6, 1998 and May 27, 1998 as having been It is undisputed that the assessed value of the property involved, as shown by the corresponding tax
issued with grave abuse of discretion amounting to lack or excess of jurisdiction. declaration, is only P2,910.00. As such, the complaint is well within the MTC’s P20,000.00 jurisdictional
limit.
At the outset, it is necessary to stress that a direct recourse to this Court is highly improper, for it violates the The finding of respondent judge that the value of the lots is higher than that indicated in the tax declaration and
established policy of strict observance of the judicial hierarchy of courts.8 We need to reiterate, for the that, therefore, the RTC has jurisdiction over the case is highly speculative. It is elementary that the tax
guidance of petitioner, that this Court’s original jurisdiction to issue a writ of certiorari (as well as declaration indicating the assessed value of the property enjoys the presumption of regularity as it has been
prohibition, mandamus, quo warranto, habeas corpus and injunction) is concurrent with the Court of Appeals issued by the proper government agency.
(CA), as in the present case, and with the RTCs in proper cases within their respective regions. 9 However, this
concurrence of jurisdiction does not grant a party seeking any of the extraordinary writs the absolute freedom Respondent judge further held that since the complaint also seeks the recovery of damages
to file his petition with the court of his choice. This Court is a court of last resort, and must so remain if it is to exceeding P100,000.00, then it is within the competence of the RTC pursuant to Section 19 (paragraph 8)
satisfactorily perform the functions assigned to it by the Constitution and immemorial tradition.10 The of Batas Pambansa Blg. 129, as amended by R.A. 7691, which states:
hierarchy of courts determines the appropriate forum for such petitions. Thus, petitions for the issuance of such
extraordinary writs against the first level ("inferior") courts should be filed with the RTC, and those against the "SEC. 19. Jurisdiction in civil cases. – Regional Trial Courts shall exercise exclusive original
latter, with the CA.11 A direct invocation of this Court’s original jurisdiction to issue these writs should be jurisdiction:
allowed only when there are special and important reasons therefor, clearly and specifically set out in the
"(8) In all other cases in which the demand, exclusive of interest, damages of whatever kind,
petition. This is the established policy. It is a policy that is necessary to prevent inordinate demands upon this
attorney’s fees, litigation expenses, and costs or the value of the property in controversy exceeds
Court’s time and attention which are better devoted to those matters within its exclusive jurisdiction, and to
One Hundred Thousand Pesos (P100,000.00) or, in such other cases in Metro Manila, where the
prevent further over-crowding of its docket.12 Unfortunately, the instant petition does not allege any special
demand, exclusive of the above mentioned items exceeds Two hundred thousand pesos
and compelling reason to justify a direct recourse to this Court. However, we deem it more appropriate and
(P200,000.00)." (Emphasis ours)
practical to resolve the controversy in order to avoid further delay, but only in this instance.
The above provision does not apply to the instant case. It is applicable only to "all other cases" other than an
The lone issue for our resolution is whether the RTC has jurisdiction over Civil Case No. CEB-21319.
action involving title to, or possession of real property in which the assessed value is the controlling factor
The complaint seeks to recover from private respondent the ownership and possession of the lots in question in determining the court’s jurisdiction. Besides, the same provision explicitly excludes from the determination
and the payment of damages. Since the action involves ownership and possession of real property, the of the jurisdictional amount the demand for "interest, damages of whatever kind, attorney’s fees,
jurisdiction over the subject matter of the claim is determined by the assessed value, not the market litigation expenses, and costs". The exclusion of such damages is reiterated in Section 33, paragraph 3 of the
value, thereof, pursuant to Batas Pambansa Blg. 129, as amended by R.A. 7691. Section 33 (paragraph 3) of same Batas Pambansa Blg. 129, as amended, quoted earlier. The said damages are merely incidental to, or a
the said law provides: consequence of, the main cause of action for recovery of ownership and possession of real property. In this
connection, this Court issued Administrative Circular No. 09-94 setting the guidelines in the implementation To illustrate their point, the Sebes drew parallelisms between their case and the cases of De Rivera v.
of R.A. 7691. Paragraph 2 states: Halili16 and Copioso v. Copioso.

"2. The exclusion of the term ‘damages of whatever kind’ in determining the jurisdictional The De Rivera involved the possession of a fishpond. The Supreme Court there said that, since it also had to
amount under Section 19 (8) and Section 33 (1) of B.P. Blg. 129, as amended by R.A. 7691, resolve the issue of the validity of the contracts of lease on which the opposing parties based their rights of
applies to cases where the damages are merely incidental to or a consequence of the main possession, the case had been transformed from a mere detainer suit to one that was incapable of pecuniary
cause of action. However, in cases where the claim for damages is the main cause of action, or one estimation. Under Republic Act 296 or the Judiciary Act of 1948, as amended, civil actions, which were
of the causes of action, the amount of such claim shall be considered in determining the jurisdiction incapable of pecuniary estimation, came under the original jurisdiction of the Court of First Instance (now the
of the court." (Emphasis ours) RTC). The Sebes pointed out that, like De Rivera, the subject of their case was "incapable of pecuniary
estimation" since they asked the court, not only to resolve the dispute over possession of the lots, but also to
We thus find that in issuing the assailed orders denying petitioner’s motion to dismiss, thus taking cognizance rule on the validity of the affidavits of quitclaim, the deeds of confirmation of sale, and the titles over the
of the case, the RTC committed grave abuse of discretion. properties. Thus, the RTC should try the case.
WHEREFORE, the instant petition is GRANTED. The assailed Orders issued by respondent RTC on March The Copioso, on the other hand, involves the reconveyance of land the assessed value of which was allegedly
6, 1998 and May 27, 1998 in Civil Case No. CEB-21319 are SET ASIDE. Accordingly, the complaint is ₱3,770.00. The Supreme Court ruled that the case comprehended more than just the title to, possession of, or
ordered DISMISSED.SO ORDERED any interest in the real property. It sought the annulment of contracts, reconveyance or specific performance,
and a claim for damages. In other words, there had been a joinder of causes of action, some of which were
G.R. No. 174497               October 12, 2009 incapable of pecuniary estimation. Consequently, the case properly fell within the jurisdiction of the RTC.
HEIRS OF GENEROSO SEBE AURELIA CENSERO SEBE and LYDIA SEBE, Petitioners, vs. HEIRS Here, petitioners argued that their case had the same causes of actions and reliefs as those involved in Copioso.
OF VERONICO SEVILLA and TECHNOLOGY AND LIVELIHOOD RESOURCE Thus, the RTC had jurisdiction over their case.
CENTER, Respondents.
ABAD, J.: On August 31, 2006 the RTC denied the Sebes’s motion for reconsideration, pointing out that the Copioso
This case concerns the jurisdiction of Municipal Trial Courts over actions involving real properties with ruling had already been overturned by Spouses Huguete v. Spouses Embudo. Before the Huguete, cancellation
assessed values of less than ₱20,000.00. of titles, declaration of deeds of sale as null and void and partition were actions incapable of pecuniary
estimation. Now, however, the jurisdiction over actions of this nature, said the RTC, depended on the valuation
The Facts and the Case of the properties. In this case, the MTC had jurisdiction because the assessed value of the lots did not exceed
₱20,000.00.
In this petition for review on certiorari1 petitioners seek to reverse the Order2 dated August 8, 2006, of the
Regional Trial Court (RTC) of Dipolog City, Branch 9, in Civil Case 5435, for annulment of documents, The Issue
reconveyance and recovery of possession with damages. The trial court dismissed the complaint for lack of
jurisdiction over an action where the assessed value of the properties is less than ₱20,000.00. Petitioners asked The issue in this case is whether or not the Sebes’s action involving the two lots valued at less than ₱20,000.00
for reconsideration3 but the court denied it.4 falls within the jurisdiction of the RTC.
On August 10, 1999 plaintiff spouses Generoso and Aurelia Sebe and their daughter, Lydia Sebe, (the Sebes) The Court’s Ruling
filed with the RTC of Dipolog City5 a complaint against defendants Veronico Sevilla and Technology and
Livelihood Resources Center for Annulment of Document, Reconveyance and Recovery of Possession of two Whether a court has jurisdiction over the subject matter of a particular action is determined by the plaintiff’s
lots, which had a total assessed value of ₱9,910.00, plus damages.6 On November 25, 1999 they amended their allegations in the complaint and the principal relief he seeks in the light of the law that apportions the
complaint7 to address a deed of confirmation of sale that surfaced in defendant Sevilla’s Answer8 to the jurisdiction of courts.
complaint. The Sebes claimed that they owned the subject lots but, through fraud, defendant Sevilla got them
The gist of the Sebes’s complaint is that they had been the owner for over 40 years of two unregistered lots 22 in
to sign documents conveying the lots to him. In his Answer Sevilla insisted that he bought the lots from the
Dampalan, San Jose, Dipolog City, covered by Tax Declaration 012-239, with a total assessed value of
Sebes in a regular manner. ₱9,910.00.23 On June 3, 1991 defendant Sevilla caused the Sebes to sign documents entitled affidavits of
While the case was pending before the RTC, plaintiff Generoso Sebe died so his wife and children substituted quitclaim.24 Being illiterate, they relied on Sevilla’s explanation that what they signed were "deeds of real
him. Parenthetically, with defendant Veronico Sevilla’s death in 2006, his heirs substituted him as respondents estate mortgage" covering a loan that they got from him.25 And, although the documents which turned out to be
in this case. On August 8, 2006 the RTC dismissed the case for lack of jurisdiction over the subject matter deeds conveying ownership over the two lots to Sevilla for ₱10,000.00 26 were notarized, the Sebes did not
considering that the ultimate relief that the Sebes sought was the reconveyance of title and possession over two appear before any notary public.27 Using the affidavits of quitclaim, defendant Sevilla applied for 28 and
lots that had a total assessed value of less than ₱20,000.00. Under the law, said the RTC, it has jurisdiction obtained free patent titles covering the two lots on September 23, 1991. 29 Subsequently, he mortgaged the lots
over such actions when the assessed value of the property exceeds ₱20,000.00, otherwise, jurisdiction shall be to defendant Technology and Livelihood Resource Center for ₱869,555.00.30
with the first level courts. The RTC concluded that the Sebes should have filed their action with the Municipal On December 24, 1991 the Sebes signed deeds of confirmation of sale covering the two lots. 31 Upon closer
Trial Court (MTC) of Dipolog City. examination, however, their signatures had apparently been forged.32 The Sebes were perplexed with the
On August 22, 2006 the Sebes filed a motion for reconsideration. They pointed out that the RTC mistakenly reason for making them sign such documents to confirm the sale of the lots when defendant Sevilla already got
classified their action as one involving title to or possession of real property when, in fact, it was a case for the titles to them as early as September.33 At any rate, in 1992, defendant Sevilla declared the lots for tax purposes
annulment of the documents and titles that defendant Sevilla got. Since such an action for annulment was under his name.34 Then, using force and intimidation, he seized possession of the lots from their tenants 35 and
incapable of pecuniary estimation, it squarely fell within the jurisdiction of the RTC as provided in Section 19 harvested that planting season’s yield36 of coconut and palay worth ₱20,000.00.37
of Batas Pambansa 129, as amended.
Despite demands by the Sebes, defendant Sevilla refused to return the lots, forcing them to hire a lawyer 38 and An action "involving title to real property" means that the plaintiff’s cause of action is based on a claim that he
incur expenses of litigation.39 Further the Sebes suffered loss of earnings over the years.40 They were also owns such property or that he has the legal rights to have exclusive control, possession, enjoyment, or
entitled to moral41 and exemplary damages.42 They thus asked the RTC a) to declare void the affidavits of disposition of the same.47 Title is the "legal link between (1) a person who owns property and (2) the property
quitclaim and the deeds of confirmation of sale in the case; b) to declare the Sebes as lawful owners of the two itself."48
lots; c) to restore possession to them; and d) to order defendant Sevilla to pay them ₱140,000.00 in lost
produce from June 3, 1991 to the date of the filing of the complaint, ₱30,000.00 in moral damages, "Title" is different from a "certificate of title" which is the document of ownership under the Torrens system of
₱100,000.00 in attorney’s fee, ₱30,000.00 in litigation expenses, and such amount of exemplary damages as registration issued by the government through the Register of Deeds. 49 While title is the claim, right or interest
the RTC might fix.43 in real property, a certificate of title is the evidence of such claim.

Based on the above allegations and prayers of the Sebes’s complaint, the law that applies to the action is Batas Another way of looking at it is that, while "title" gives the owner the right to demand or be issued a "certificate
Pambansa 129, as amended. If this case were decided under the original text of Batas Pambansa 129 or even of title," the holder of a certificate of title does not necessarily possess valid title to the real property. The
under its predecessor, Republic Act 296, determination of the nature of the case as a real action would have issuance of a certificate of title does not give the owner any better title than what he actually has in
ended the controversy. Both real actions and actions incapable of pecuniary estimation fell within the law.50 Thus, a plaintiff’s action for cancellation or nullification of a certificate of title may only be a necessary
exclusive original jurisdiction of the RTC. consequence of the defendant’s lack of title to real property. Further, although the certificate of title may have
been lost, burned, or destroyed and later on reconstituted, title subsists and remains unaffected unless it is
But, with the amendment of Batas Pambansa 129 by Republic Act 7601, the distinction between these two transferred or conveyed to another or subjected to a lien or encumbrance.51
kinds of actions has become pivotal. The amendment expanded the exclusive original jurisdiction of the first
level courts to include real actions involving property with an assessed value of less than ₱20,000.00.44 Nestled between what distinguishes a "title" from a "certificate of title" is the present controversy between the
Sebes and defendant Sevilla. Which of them has valid title to the two lots and would thus be legally entitled to
The power of the RTC under Section 19 of Batas Pambansa 129, 45 as amended,46 to hear actions involving title the certificates of title covering them?
to, or possession of, real property or any interest in it now covers only real properties with assessed value in
excess of ₱20,000.00. But the RTC retained the exclusive power to hear actions the subject matter of which is The Sebes claim ownership because according to them, they never transferred ownership of the same to
not capable of pecuniary estimation. Thus– anyone. Such title, they insist, has remained with them untouched throughout the years, excepting only that in
1991 they constituted a real estate mortgage over it in defendant Sevilla’s favor. The Sebes alleged that
SEC. 19. Jurisdiction in Civil Cases. – Regional Trial Courts shall exercise exclusive original jurisdiction: defendant Sevilla violated their right of ownership by tricking them into signing documents of absolute sale,
rather than just a real estate mortgage to secure the loan that they got from him.
(1) In all civil actions in which the subject of the litigations is incapable of pecuniary estimation.
Assuming that the Sebes can prove that they have title to or a rightful claim of ownership over the two lots,
(2) In all civil actions which involve the title to, or possession of, real property, or any interest they would then be entitled, first, to secure evidence of ownership or certificates of title covering the same and,
therein, where the assessed value of the property involved exceeds Twenty thousand pesos second, to possess and enjoy them. The court, in this situation, may in the exercise of its equity jurisdiction and
(₱20,000.00) or for civil actions in Metro Manila, where such value exceeds Fifty thousand pesos without ordering the cancellation of the Torrens titles issued to defendant Sevilla, direct the latter to reconvey
(₱50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, the two lots and their corresponding Torrens titles to them as true owners.52
original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts; x x x. The present action is, therefore, not about the declaration of the nullity of the documents or the reconveyance
to the Sebes of the certificates of title covering the two lots. These would merely follow after the trial court
Section 33, on the other hand provides that, if the assessed value of the real property outside Metro Manila shall have first resolved the issue of which between the contending parties is the lawful owner of such lots, the
involved in the suit is ₱20,000.00 and below, as in this case, jurisdiction over the action lies in the first level one also entitled to their possession. Based on the pleadings, the ultimate issue is whether or not defendant
courts. Thus— Sevilla defrauded the Sebes of their property by making them sign documents of conveyance rather than just a
deed of real mortgage to secure their debt to him. The action is, therefore, about ascertaining which of these
SEC. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts parties is the lawful owner of the subject lots, jurisdiction over which is determined by the assessed value of
in Civil Cases -- Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts shall such lots.
exercise:
Here, the total assessed value of the two lots subject of the suit is ₱9,910.00. Clearly, this amount does not
xxxx exceed the jurisdictional threshold value of ₱20,000.00 fixed by law. The other damages that the Sebes claim
are merely incidental to their main action and, therefore, are excluded in the computation of the jurisdictional
(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real property, or
amount.
any interest therein where the assessed value of the property or interest therein does not exceed Twenty
thousand pesos (₱20,000.00) or, in civil actions in Metro Manila, where such assessed value does not exceed WHEREFORE, premises considered, the petition is DISMISSED. The Order dated August 8, 2006, of the
Fifty thousand pesos (₱50,000.00) x x x. Regional Trial Court of Dipolog City, Branch 9, in Civil Case 5435, is AFFIRMED.SO ORDERED.
But was the Sebes’s action one involving title to, or possession of, real property or any interest in it or one the Barangay Lupon
subject of which is incapable of pecuniary estimation?
THE LOCAL GOVERNMENT CODE OF THE PHILIPPINES
The Sebes claim that their action is, first, for the declaration of nullity of the documents of conveyance that
defendant Sevilla tricked them into signing and, second, for the reconveyance of the certificate of title for the CHAPTER 7 - KATARUNGANG PAMBARANGAY
two lots that Sevilla succeeded in getting. The subject of their action is, they conclude, incapable of pecuniary
estimation
 SECTION. 399. Lupong Tagapamayapa. - (a) There is hereby created in each Barangay a Lupong SECTION. 404. Pangkat ng Tagapagkasundo. - (a) There shall be constituted for each dispute
Tagapamayapa, hereinafter referred to as the lupon, composed of the Punong Barangay as chairman and brought before the lupon a conciliation panel to be known as the pangkat ng tagapagkasundo, hereinafter
ten(10) to twenty (20) members. The lupon shall be constituted every three (3) years in the manner provided referred to as the pangkat, consisting of three (3) members who shall be chosen by the parties to the dispute
herein. from the list of members of the lupon.

(a) Any person actually residing or working in the Barangay, not otherwise expressly disqualified Should the parties fail to agree on the pangkat membership, the same shall be determined by lots
by law, and possessing integrity, impartiality, independence of mind, sense of fairness, and reputation for drawn by the lupon chairman.
probity, may be appointed a member of the lupon.
(b) The three (3) members constituting the pangkat shall elect from among themselves the chairman
(a) A notice to constitute the lupon, which shall include the names of proposed members who have and the secretary. The secretary shall prepare the minutes of the pangkat proceedings and submit a copy duly
expressed their willingness to serve, shall be prepared by the Punong Barangay within the first fifteen (15) attested to by the chairman to the lupon secretary and to the proper city or municipal court. He shall issue and
days from the start of his term of office. Such notice shall be posted in three (3) conspicuous places in the cause to be served notices to the parties concerned.
Barangay continuously for a period of not less than three(3) weeks;
The lupon secretary shall issue certified true copies of any public record in his custody that is not
(b) The Punong Barangay, taking into consideration any opposition to the proposed appointment or by law otherwise declared confidential.
any recommendations for appointments as may have been made within the period of posting, shall within ten
(10) days thereafter, appoint as members those whom he determines to be suitable therefor. Appointments SECTION. 405. Vacancies in the Pangkat. - Any vacancy in the pangkat shall be chosen by the
shall be in writing, signed by the Punong Barangay, and attested to by the Barangay secretary. parties to the dispute from among the other lupon members. Should the parties fail to agree on a common
choice, the vacancy shall be filled by lot to be drawn by the lupon chairman.
(c) The list of appointed members shall be posted in three (3) conspicuous places in the Barangay
for the entire duration of their term of office; and SECTION. 406. Character of Office and Service of Lupon Members. -(a) The lupon members,
while in the performance of their official duties or on theoccasion thereof, shall be deemed as persons in
(d) In Barangays where majority of the inhabitants are members of indigenous cultural authority, as defined in the Revised Penal Code.
communities, local systems of es through their councils of datus or elders shall be recognized without
prejudice to the applicable provisions of this Code. (b) The lupon or pangkat members shall serve without compensation, except as provided for in
Section 393 and without prejudice toincentives as provided for in this Section and in Book IV of this
SECTION. 400. Oath and Term of Office. - Upon appointment, each lupon member shall take an
oath of office before the Punong Barangay. He shallhold office until a new lupon is constituted on the third Code. The Department of the Interior and Local Government shall provide for a system of granting economic
year following his appointment unless sooner terminated by resignation, transfer of residence or place of work, or other incentives to the lupon or pangkat members who adequately demonstrate the ability to judiciously and
or withdrawal of appointment by the Punong Barangay with the concurrence of the majority of all the expeditiously resolve cases referred to them. While in the performance of their duties, the lupon or pangkat
members of the lupon. members, whether in public or private employment, shall be deemed to be on official time, and shall not suffer
from any diminution in compensation or allowance from said employment by reason thereof.
SECTION. 401. Vacancies. - Should a vacancy occur in the lupon for any cause, the Punong
Barangay shall immediately appoint a qualified person who shall hold office only for the unexpired portion of SECTION. 407. Legal Advice on Matters Involving Questions of Law. – The provincial, city
the term. legal officer or prosecutor or the municipal legal officer shall render legal advice on matters involving
questions of law to the Punong Barangay or any lupon or pangkat member whenever necessary in the exercise
SECTION. 402. Functions of the Lupon. - The lupon shall: of his functions in the administration of the katarungang pamBarangay.

(a) Exercise administrative supervision over the conciliation panels provided herein; SECTION. 408. Subject Matter for Amicable Settlement; Exception Thereto. - The lupon of
each Barangay shall have authority to bring together the parties actually residing in the same city or
(b) Meet regularly once a month to provide a forum for exchange of ideas among its members and municipality for amicable settlement of all disputes except:
the public on matters relevant to the amicable settlement of disputes, and to enable various conciliation panel
members to share with one another their observations and experiences in effecting speedy resolution of (a) Where one party is the government, or any subdivision or instrumentality thereof;
disputes; and
(b) Where one party is a public officer or employee, and the dispute relates to the performance of
(c) Exercise such other powers and perform such other duties and functions as may be prescribed by his official functions;
law or ordinance.
(c) Offenses punishable by imprisonment exceeding one (1) year or a fine exceeding Five thousand
SECTION. 403. Secretary of the Lupon. - The Barangay secretary shall concurrently serve as the pesos (Php5,000.00);
secretary of the lupon. He shall record the results of mediation proceedings before the Punong Barangay and
shall submit a report thereon to the proper city or municipal courts. He shall also receive and keep the records (d) Offenses where there is no private offended party;
of proceedings submitted to him by the various conciliation panels.
(e) Where the dispute involves real properties located in different cities or municipalities unless the
parties thereto agree to submit their differences to amicable settlement by an appropriate lupon;
 (f) Disputes involving parties who actually reside in Barangays of different cities or municipalities, vote of the majority of the pangkat whose decision shall be final. Should disqualification be decided upon, the
except where such Barangay units adjoin each other and the parties thereto agree to submit their differences to resulting vacancy shall be filled as herein provided for.
amicable settlement by an appropriate lupon;
(e) Period to arrive at a settlement - The pangkat shall arrive at a settlement or resolution of the
(d) Such other classes of disputes which the President may determine in the interest of justice or dispute within fifteen (15) days from the day it convenes in accordance with this section. This period shall, at
upon the recommendation of the secretary of Justice. the discretion of the pangkat, be extendible for another period which shall not exceed fifteen (15) days, except
in clearly meritorious cases.
The court in which non-criminal cases not falling within the authority of the lupon under this Code
are filed may, at any time before trial, motu proprio refer the case to the lupon concerned for amicable SECTION. 411. Form of Settlement. - All amicable settlements shall be in writing, in a language
settlement. or dialect known to the parties, signed by them, and attested to by the lupon chairman or the pangkat chairman,
as the case may be. When the parties to the dispute do not use the same language or dialect, the settlement
SECTION. 409. Venue. - (a) Disputes between persons actually residing in the same Barangay shall be written in the language or dialect known to them.
shall be brought for amicable settlement before the lupon of said Barangay.
SECTION. 412. Conciliation. - (a) Pre-condition to Filing of Complaint in Court. - No complaint,
(b) Those involving actual residents of different Barangays within the same city or municipality petition, action, or proceeding involving any matter within the authority of the lupon shall be filed or instituted
shall be brought in the Barangay where the respondent or any of the respondents actually resides, at the directly in court or any other government office for adjudication, unless there has been a confrontation
election of the complainant. between the parties before the lupon chairman or the pangkat, and that no conciliation or settlement has been
reached as certified by the lupon secretary or pangkat secretary as attested to by the lupon or pangkat chairman
(c) All disputes involving real property or any interest therein shall be brought in the Barangay
or unless the settlement has been repudiated by the parties thereto.
where the real property or the larger portion thereof is situated.
(b) Where Parties May Go Directly to Court. - The parties may go directly to court in the following
(d) Those arising at the workplace where the contending parties are employed or at the institution
instances:
where such parties are enrolled for study, shall be brought in the Barangay where such workplace or institution
is located. (1) Where the accused is under detention;
Objections to venue shall be raised in the mediation proceedings before the Punong Barangay; (2) Where a person has otherwise been deprived of personal liberty calling for habeas
otherwise, the same shall be deemed waived. Any legal question which may confront the Punong Barangay in corpus proceedings;
resolving objections to venue herein referred to maybe submitted to the secretary of Justice, or his duly
designated representative, whose ruling thereon shall be binding. (3) Where actions are coupled with provisional remedies such as preliminary injunction,
attachment, delivery of personal property, and support pendente lite; and
SECTION. 410. Procedure for Amicable Settlement. - (a) Who may initiate proceeding - Upon
payment of the appropriate filing fee, any individual who has a cause of action against another individual (4) Where the action may otherwise be barred by the statute of limitations.
involving any matter within the authority of the lupon may complain, orally or in writing, to the lupon
chairman of the Barangay. (c) Conciliation among members of indigenous cultural communities. - The customs and traditions
of indigenous cultural communities shall be applied in settling disputes between members of the cultural
(b) Mediation by lupon chairman - Upon receipt of the complaint, the lupon chairman shall within communities.
the next working day summon the respondent(s), with notice to the complainant(s) for them and theirwitnesses
to appear before him for a mediation of their conflicting interests. If he fails in his mediation effort within SECTION. 413. Arbitration. - (a) The parties may, at any stage of the proceedings, agree in
fifteen (15) days from the first meeting of the parties before him, he shall forthwith set a date for the writing that they shall abide by the arbitration award of the lupon chairman or the pangkat. Such agreement to
constitution of the pangkat in accordance with the provisions of this Chapter. arbitrate may be repudiated within five (5) days from the date thereof for the same grounds and in accordance
with the procedure hereinafter prescribed. The arbitration award shall be made after the lapse of the period for
(c) Suspension of prescriptive period of offenses - While the dispute is under mediation, repudiation and within ten (10) days thereafter.
conciliation, or arbitration, the prescriptive periods for offenses and cause of action under existing laws shall
be interrupted upon filing of the complaint with the Punong Barangay. The prescriptive periods shall resume (b) The arbitration award shall be in writing in a language or dialect known to the parties. When the
upon receipt by the complainant of the complaint or the certificate of repudiation or of the certification to file parties to the dispute do not use the same language or dialect, the award shall be written in the language or
action issued by the lupon or pangkat secretary: Provided, however, That such interruption shall not exceed dialect known to them.
sixty (60) days from the filing of the complaint with the Punong Barangay.
SECTION. 414. Proceedings Open to the Public; Exception. - All proceedings for settlement
(d) Issuance of summons; hearing; grounds for disqualification- The pangkat shall convene not later shall be public and informal: Provided, however, That the lupon chairman or the pangkat chairman, as the case
than three (3) days from its constitution, on the day and hour set by the lupon chairman, to hear both parties may be, may motu proprio or upon request of a party, exclude the public from the proceedings in the interest
and their witnesses, simplify issues, and explore all possibilities for amicable settlement. For this purpose, the of privacy, decency, or public morals.
pangkat may issue summons for the personal appearance of parties and witnesses before it. In the event that a
party moves to disqualify any member of the pangkat by reason of relationship, bias, interest, or any other
similar grounds discovered after the constitution of the pangkat, the matter shall be resolved by the affirmative
 SECTION. 415. Appearance of Parties in Person. - In all katarungang pamBarangay proceedings, LEO WEE, petitioner, vs. GEORGE DE CASTRO (on his behalf and as attorney-in-fact of ANNIE DE
the parties must appear in person without the assistance of counsel or representative, except for minors and CASTRO and FELOMINA UBAN) and MARTINIANA DE CASTRO, respondents.
incompetents who may be assisted by their next-of-kin who are not lawyers.
DECISION
SECTION. 416. Effect of Amicable Settlement and Arbitration Award. – The amicable
settlement and arbitration award shall have the force and effect of a final judgment of a court upon the
expiration of ten (10) days from the date thereof, unless repudiation of the settlement has been made or a CHICO-NAZARIO, J.:
petition to nullify the award has been filed before the proper city or municipal court.
Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Revised Rules of Court filed by
However, this provision shall not apply to court cases settled by the lupon under the last paragraph petitioner Leo Wee, seeking the reversal and setting aside of the Decision 2 dated 19 September 2006 and the
of section 408 of this Code, in which case the compromise settlement agreed upon by the parties before the Resolution3 dated 25 January 2007 of the Court of Appeals in CA-G.R. SP No. 90906. The appellate court, in
lupon chairman or the pangkat chairman shall be submitted to the court and upon approval thereof, have the its assailed Decision, reversed the dismissal of Civil Case. No. 1990, an action for ejectment instituted by
force and effect of a judgment of said court. respondent George de Castro, on his own behalf and on behalf of Annie de Castro, Felomina de Castro Uban
and Jesus de Castro4 against petitioner, by the Municipal Trial Court (MTC) of Alaminos City, which was
SECTION. 417. Execution. - The amicable settlement or arbitration award may be enforced by affirmed by the Regional Trial Court (RTC), Branch 54, Alaminos City, Pangasinan; and, ruling in favor of the
execution by the lupon within six (6) months from the date of the settlement. After the lapse of such time, the respondents, ordered the petitioner to vacate the subject property. In its assailed Resolution dated 25 January
settlement may be enforced by action in the appropriate city or municipal court. 2007, the Court of Appeals refused to reconsider its earlier Decision of 19 September 2006.

SECTION. 418. Repudiation. - Any party to the dispute may, within ten (10) days from the date of In their Complaint5 filed on 1 July 2002 with the MTC of Alaminos City, docketed as Civil Case No. 1990,
the settlement, repudiate the same by filing with the lupon chairman a statement to that effect sworn to before respondents alleged that they are the registered owners of the subject property, a two-storey building erected
him, where the consent is vitiated by fraud, violence, or intimidation. Such repudiation shall be sufficient basis on a parcel of land registered under Transfer Certificate of Title (TCT) No. 16193 in the Registry of Deeds of
for the issuance of the certification for filing a complaint as hereinabove provided. Pangasinan, described and bounded as follows:

SECTION. 419. Transmittal of Settlement and Arbitration Award to theCourt. - The secretary
of the lupon shall transmit the settlement or the arbitration award to the appropriate city or municipal court A parcel of land (Lot 13033-D-2, Psd-01550-022319, being a portion of Lot 13033-D, Psd-018529,
LRC Rec. No. ____) situated in Pob., Alaminos City; bounded on the NW. along line 1-2 by Lot
within five (5) days from the date of the award or from the lapse of the ten-day period repudiating the
13035-D-1 of the subdivision plan; on the NE. along line 2-3 by Vericiano St.; on the SE. along line
settlement and shall furnish copies thereof to each of the parties to the settlement and the lupon chairman.
3-4 by Lot 13033-D-2 of the subdivision plan; on the SW. along line 4-1 by Lot 575, Numeriano
Rabago. It is coverd by TCT No. 16193 of the Register of Deeds of Pangasinan (Alaminos City) and
SECTION. 420. Power to Administer Oaths. - The Punong Barangay, as chairman of the Lupong
declared for taxation purposes per T.D. No. 2075, and assessed in the sum of P93,400.00.6
Tagapamayapa, and the members of the pangkat are hereby authorized to administer oaths in connection with
any matter relating to all proceedings in the implementation of the katarungang pamBarangay.
Respondents rented out the subject property to petitioner on a month to month basis for P9,000.00 per
SECTION. 421. Administration; Rules and Regulations. - The city or municipal mayor, as the month.7 Both parties agreed that effective 1 October 2001, the rental payment shall be increased
case may be, shall see to the efficient and effective implementation and administration of the katarungang from P9,000.00 to P15,000.00. Petitioner, however, failed or refused to pay the corresponding increase on rent
pamBarangay. The secretary of Justice shall promulgate the rules and regulations necessary to implement this when his rental obligation for the month of 1 October 2001 became due. The rental dispute was brought to
Chapter. the Lupon Tagapagpamayapa of Poblacion, Alaminos, Pangasinan, in an attempt to amicably settle the matter
but the parties failed to reach an agreement, resulting in the issuance by the Barangay Lupon of a Certification
SECTION. 422. Appropriations. - Such amount as may be necessary for the effective to file action in court on 18 January 2002. On 10 June 2002, respondent George de Castro sent a letter to
implementation of the katarungang pamBarangay shall be provided for in the annual budget of the city or petitioner terminating their lease agreement and demanding that the latter vacate and turn over the subject
municipality concerned. property to respondents. Since petitioner stubbornly refused to comply with said demand letter, respondent
George de Castro, together with his siblings and co-respondents, Annie de Castro, Felomina de Castro Uban
and Jesus de Castro, filed the Complaint for ejectment before the MTC.

It must be noted, at this point, that although the Complaint stated that it was being filed by all of the
respondents, the Verification and the Certificate of Non-Forum Shopping were signed by respondent George
de Castro alone. He would subsequently attach to his position paper filed before the MTC on 28 October 2002
the Special Powers of Attorney (SPAs) executed by his sisters Annie de Castro and Felomina de Castro Uban
dated 7 February 2002 and 14 March 2002 respectively, authorizing him to institute the ejectment case against
petitioner.

Substantial Compliance Petitioner, on the other hand, countered that there was no agreement between the parties to increase the
monthly rentals and respondents' demand for an increase was exorbitant. The agreed monthly rental was only
G.R. No. 176405             August 20, 2008 for the amount of P9,000.00 and he was religiously paying the same every month. Petitioner then argued that
respondents failed to comply with the jurisdictional requirement of conciliation before the Barangay Lupon On 19 September 2006, the Court of Appeals rendered a Decision granting the respondents' Petition and
prior to the filing of Civil Case. No. 1990, meriting the dismissal of their Complaint therein. The Certification ordering petitioner to vacate the subject property and turn over the same to respondents. The Court of Appeals
to file action issued by the Barangay Lupon appended to the respondents' Complaint merely referred to the decreed:
issue of rental increase and not the matter of ejectment. Petitioner asserted further that the MTC lacked
jurisdiction over the ejectment suit, since respondents' Complaint was devoid of any allegation that there was WHEREFORE, premises considered, the instant petition is GRANTED. The assailed Decision
an "unlawful withholding" of the subject property by the petitioner.8
dated June 27, 2005 issued by the RTC of Alaminos City, Pangasinan, Branch 54, is REVERSED
and SET ASIDE. A new one is hereby rendered ordering [herein petitioner] Leo Wee to
During the Pre-Trial Conference9 held before the MTC, the parties stipulated that in May 2002, petitioner SURRENDER and VACATE the leased premises in question as well as to pay the sum of
tendered to respondents the sum of P9,000.00 as rental payment for the month of January 2002; petitioner paid P15,000.00 per month reckoned from March, 2002 until he shall have actually turned over the
rentals for the months of October 2001 to January 2002 but only in the amount of P9,000.00 per month; possession thereof to petitioners plus the rental arrearages of P30,000.00 representing unpaid
respondents, thru counsel, sent a letter to petitioner on 10 June 2002 terminating their lease agreement which increase in rent for the period from October, 2001 to February, 2002, with legal interest at 6% per
petitioner ignored; and the Barangay Lupon did issue a Certification to file action after the parties failed to annum to be computed from June 7, 2002 until finality of this decision and 12% thereafter until full
reach an agreement before it. payment thereof. Respondent is likewise hereby ordered to pay petitioners the amount
of P20,000.00 as and for attorney's fees and the costs of suit.14
After the submission of the parties of their respective Position Papers, the MTC, on 21 November 2002,
rendered a Decision10 dismissing respondents' Complaint in Civil Case No. 1990 for failure to comply with the In a Resolution dated 25 January 2007, the appellate court denied the Motion for Reconsideration interposed
prior conciliation requirement before the Barangay Lupon. The decretal portion of the MTC Decision reads: by petitioner for lack of merit.

WHEREFORE, premised considered, judgment is hereby rendered ordering the dismissal of this Petitioner is now before this Court via the Petition at bar, making the following assignment of errors:
case. Costs against the [herein respondents].
I.
On appeal, docketed as Civil Case No. A-2835, the RTC of Alaminos, Pangasinan, Branch 54, promulgated its
Decision11 dated 27 June 2005 affirming the dismissal of respondents' Complaint for ejectment after finding THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT
that the appealed MTC Decision was based on facts and law on the matter. The RTC declared that since the
CONCILIATION PROCESS IS NOT A JURISDICTIONAL REQUIREMENT THAT NON-
original agreement entered into by the parties was for petitioner to pay only the sum of P9.000.00 per month COMPLIANCE THEREWITH DOES NOT AFFECT THE JURISDICTION IN EJECTMENT
for the rent of the subject property, and no concession was reached by the parties to increase such amount
CASE;
to P15.000.00, petitioner cannot be faulted for paying only the originally agreed upon monthly rentals.
Adopting petitioner's position, the RTC declared that respondents' failure to refer the matter to
the Barangay court for conciliation process barred the ejectment case, conciliation before the Lupon being a II.
condition sine qua non in the filing of ejectment suits. The RTC likewise agreed with petitioner in ruling that
the allegation in the Complaint was flawed, since respondents failed to allege that there was an "unlawful THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN UPHOLDING THE
withholding" of possession of the subject property, taking out Civil Case No. 1990 from the purview of an SUFFICIENCY OF THE ALLEGATIONS IN THE COMPLAINT FOR EJECTMENT DESPITE
action for unlawful detainer. Finally, the RTC decreed that respondents' Complaint failed to comply with the THE WANT OF ALLEGATION OF "UNLAWFUL WITHOLDING PREMISES" (sic)
rule that a co-owner could not maintain an action without joining all the other co-owners. Thus, according to QUESTIONED BY PETITIONER;
the dispositive portion of the RTC Decision:

III.
WHEREFORE the appellate Court finds no cogent reason to disturb the findings of the court a quo.
The Decision dated November 21, 2002 appealed from is hereby AFFIRMED IN TOTO.12
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE
FILING OF THE COMPLAINT OF RESPONDENT GEORGE DE CASTRO WITHOUT
Undaunted, respondents filed a Petition for Review on Certiorari  with the Court of Appeals where it was
13
JOINING ALL HIS OTHER CO-OWNERS OVER THE SUBJECT PROPERTY IS PROPER;
docketed as CA-G.R. SP No. 90906. Respondents argued in their Petition that the RTC gravely erred in ruling
that their failure to comply with the conciliation process was fatal to their Complaint, since it is only
respondent George de Castro who resides in Alaminos City, Pangasinan, while respondent Annie de Castro IV.
resides in Pennsylvania, United States of America (USA); respondent Felomina de Castro Uban, in California,
USA; and respondent Jesus de Castro, now substituted by his wife, Martiniana, resides in Manila. Respondents THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT APPLYING
further claimed that the MTC was not divested of jurisdiction over their Complaint for ejectment because of SUPREME COURT CIRCULAR NO. 10 WHICH DIRECTS A PLEADER TO INDICATE IN HIS
the mere absence therein of the term "unlawful withholding" of their subject property, considering that they PLEADINGS HIS OFFICIAL RECEIPT OF HIS PAYMENT OF HIS IBP DUES.15
had sufficiently alleged the same in their Complaint, albeit worded differently. Finally, respondents posited
that the fact that only respondent George de Castro signed the Verification and the Certificate of Non-Forum
Shopping attached to the Complaint was irrelevant since the other respondents already executed Special Petitioner avers that respondents failed to go through the conciliation process before the Barangay Lupon, a
Powers of Attorney (SPAs) authorizing him to act as their attorney-in-fact in the institution of the ejectment jurisdictional defect that bars the legal action for ejectment. The Certification to file action dated 18 January
suit against the petitioner. 2002 issued by the Barangay Lupon, appended by the respondents to their Complaint in Civil Case No. 1990,
is of no moment, for it attested only that there was confrontation between the parties on the matter of rental
increase but not on unlawful detainer of the subject property by the petitioner. If it was the intention of the (b) Where one party is a public officer or employee, and the dispute relates to the performance of
respondents from the very beginning to eject petitioner from the subject property, they should have brought up his official functions;
the alleged unlawful stay of the petitioner on the subject property for conciliation before the Barangay Lupon.
(c) Offenses punishable by imprisonment exceeding one (1) year or a fine exceeding Five thousand
The barangay justice system was established primarily as a means of easing up the congestion of cases in the pesos (P5,000.00);
judicial courts. This could be accomplished through a proceeding before the barangay courts which, according
to the one who conceived of the system, the late Chief Justice Fred Ruiz Castro, is essentially arbitration in
(d) Offenses where there is no private offended party;
character; and to make it truly effective, it should also be compulsory. With this primary objective of
the barangay justice system in mind, it would be wholly in keeping with the underlying philosophy of
Presidential Decree No. 1508 (Katarungang Pambarangay Law), which would be better served if an out-of- (e) Where the dispute involves real properties located in different cities or municipalities unless the
court settlement of the case is reached voluntarily by the parties.16 To ensure this objective, Section 6 of parties thereto agree to submit their differences to amicable settlement by an appropriate lupon;
Presidential Decree No. 1508 requires the parties to undergo a conciliation process before the Lupon
Chairman or the Pangkat ng Tagapagkasundo as a precondition to filing a complaint in court subject to certain (f) Disputes involving parties who actually reside in barangays of different cities or municipalities,
exceptions. The said section has been declared compulsory in nature. except where such barangay units adjoin each other and the parties thereto agree to submit their
differences to amicable settlement by an appropriate lupon;
Presidential Decree No. 1508 is now incorporated in Republic Act No. 7160 (The Local Government Code),
which took effect on 1 January 1992. (g) Such other classes of disputes which the President may determine in the interest of justice or
upon the recommendation of the Secretary of Justice.
The pertinent provisions of the Local Government Code making conciliation a precondition to the filing of
complaints in court are reproduced below: There is no question that the parties to this case appeared before the Barangay Lupon for conciliation
proceedings. There is also no dispute that the only matter referred to the Barangay Lupon for conciliation was
SEC. 412. Conciliation.- (a) Pre-condition to filing of complaint in court. - No complaint, petition, the rental increase, and not the ejectment of petitioner from the subject property. This is apparent from a
action, or proceeding involving any matter within the authority of the lupon shall be filed or perusal of the Certification to file action in court issued by the Barangay Lupon on 18 January 2002, to wit:
instituted directly in court or any other government office for adjudication, unless there has been a
confrontation between the parties before the lupon chairman or the pangkat, and that no conciliation CERTIFICATION TO FILE COMPLAINTS
or settlement has been reached as certified by the lupon secretary or pangkat secretary as attested to
by the lupon or pangkat chairman or unless the settlement has been repudiated by the parties thereto.
This is to certify that:
(b) Where parties may go directly to court. - The parties may go directly to court in the following
instances: 1. There was personal confrontation between parties before the barangay Lupon regarding rental
increase of a commercial building but conciliation failed;
(1) Where the accused is under detention;
2. Therefore, the corresponding dispute of the above-entitled case may now be filed in
Court/Government Office.18 (Emphasis ours.)
(2) Where a person has otherwise been deprived of personal liberty calling for habeas
corpus proceedings;
The question now to be resolved by this Court is whether the Certification dated 18 January 2002 issued by
the Barangay Lupon stating that no settlement was reached by the parties on the matter of rental increase
(3) Where actions are coupled with provisional remedies such as preliminary injunction, sufficient to comply with the prior conciliation requirement under the Katarungang Pambarangay Law to
attachment, delivery of personal property, and support pendente lite; and authorize the respondents to institute the ejectment suit against petitioner.

(4) Where the action may otherwise be barred by the statute of limitations. The Court rules affirmatively.

(c) Conciliation among members of indigenous cultural communities. - The customs and traditions While it is true that the Certification to file action dated 18 January 2002 of the Barangay Lupon refers only to
of indigenous cultural communities shall be applied in settling disputes between members of the rental increase and not to the ejectment of petitioner from the subject property, the submission of the same for
cultural communities. conciliation before the Barangay Lupon constitutes sufficient compliance with the provisions of
the Katarungang Pambarangay Law. Given the particular circumstances of the case at bar, the conciliation
SEC. 408. Subject Matter for Amicable Settlement; Exception Thereto. - The lupon of each proceedings for the amount of monthly rental should logically and reasonably include also the matter of the
barangay shall have authority to bring together the parties actually residing in the same city or possession of the property subject of the rental, the lease agreement, and the violation of the terms thereof.
municipality for amicable settlement of all disputes except:
We now proceed to discuss the meat of the controversy.
(a) Where one party is the government or any subdivision or instrumentality thereof;
The contract of lease between the parties did not stipulate a fixed period. Hence, the parties agreed to the In the more recent case of Carandang v. Heirs of De Guzman, 21 this Court declared that a co-owner is not even
payment of rentals on a monthly basis. On this score, Article 1687 of the Civil Code provides: a necessary party to an action for ejectment, for complete relief can be afforded even in his absence, thus:

Art. 1687. If the period for the lease has not been fixed, it is understood to be from year to year, if In sum, in suits to recover properties, all co-owners are real parties in interest. However, pursuant to
the rent agreed upon is annual; from month to month, if it is monthly; from week to week, if the Article 487 of the Civil Code and the relevant jurisprudence, any one of them may bring an action,
rent is weekly; and from day to day, if the rent is to be paid daily. However, even though a monthly any kind of action for the recovery of co-owned properties. Therefore, only one of the co-owners,
rent is paid, and no period for the lease has been set, the courts may fix a longer term for the lease namely the co-owner who filed the suit for the recovery of the co-owned property, is an
after the lessee has occupied the premises for over one year. If the rent is weekly, the courts may indispensable party thereto. The other co-owners are not indispensable parties. They are not even
likewise determine a longer period after the lessee has been in possession for over six months. In necessary parties, for a complete relief can be afforded in the suit even without their participation,
case of daily rent, the courts may also fix a longer period after the lessee has stayed in the place for since the suit is presumed to have been filed for the benefit of all co-owners.
over one month. (Emphasis supplied.)
Moreover, respondents Annie de Castro and Felomina de Castro Uban each executed a Special Power of
The rentals being paid monthly, the period of such lease is deemed terminated at the end of each month. Thus, Attorney, giving respondent George de Castro the authority to initiate Civil Case No. 1990.
respondents have every right to demand the ejectment of petitioners at the end of each month, the contract
having expired by operation of law. Without a lease contract, petitioner has no right of possession to the A power of attorney is an instrument in writing by which one person, as principal, appoints another as his
subject property and must vacate the same. Respondents, thus, should be allowed to resort to an action for
agent and confers upon him the authority to perform certain specified acts or kinds of acts on behalf of the
ejectment before the MTC to recover possession of the subject property from petitioner. principal. The written authorization itself is the power of attorney, and this is clearly indicated by the fact that
it has also been called a "letter of attorney.
Corollarily, petitioner's ejectment, in this case, is only the reasonable consequence of his unrelenting refusal to
comply with the respondents' demand for the payment of rental increase agreed upon by both parties. Verily, Even then, the Court views the SPAs as mere surplusage, such that the lack thereof does not in any way affect
the lessor's right to rescind the contract of lease for non-payment of the demanded increased rental was
the validity of the action for ejectment instituted by respondent George de Castro. This also disposes of
recognized by this Court in Chua v. Victorio petitioner's contention that respondent George de Castro lacked the authority to sign the Verification and the
Certificate of Non-Forum Shopping. As the Court ruled in Mendoza v. CoronEL
The right of rescission is statutorily recognized in reciprocal obligations, such as contracts of lease. In addition
to the general remedy of rescission granted under Article 1191 of the Civil Code, there is an independent We likewise hold that the execution of the certification against forum shopping by the
provision granting the remedy of rescission for breach of any of the lessor or lessee's statutory obligations.
attorney-in-fact in the case at bar is not a violation of the requirement that the parties must
Under Article 1659 of the Civil Code, the aggrieved party may, at his option, ask for (1) the rescission of the personally sign the same. The attorney-in-fact, who has authority to file, and who actually filed the
contract; (2) rescission and indemnification for damages; or (3) only indemnification for damages, allowing
complaint as the representative of the plaintiff co-owner, pursuant to a Special Power of Attorney, is
the contract to remain in force. a party to the ejectment suit. In fact, Section 1, Rule 70 of the Rules of Court includes the
representative of the owner in an ejectment suit as one of the parties authorized to institute the
Payment of the rent is one of a lessee's statutory obligations, and, upon non-payment by proceedings. (Emphasis supplied.)
petitioners of the increased rental in September 1994, the lessor acquired the right to avail of
any of the three remedies outlined above. (Emphasis supplied.)
Failure by respondent George de Castro to attach the said SPAs to the Complaint is innocuous, since it is
undisputed that he was granted by his sisters the authority to file the action for ejectment against petitioner
Petitioner next argues that respondent George de Castro cannot maintain an action for ejectment against prior to the institution of Civil Case No. 1990. The SPAs in his favor were respectively executed by
petitioner, without joining all his co-owners. respondents Annie de Castro and Felomina de Castro Uban on 7 February 2002 and 14 March 2002; while
Civil Case No. 1990 was filed by respondent George de Castro on his own behalf and on behalf of his siblings
only on 1 July 2002, or way after he was given by his siblings the authority to file said action. The Court
Article 487 of the New Civil Code is explicit on this point:
quotes with approval the following disquisition of the Court of Appeals:

ART. 487. Any one of the co-owners may bring an action in ejectment.
Moreover, records show that [herein respondent] George de Castro was indeed authorized by his
sisters Annie de Castro and Felomina de Castro Uban, to prosecute the case in their behalf as shown
This article covers all kinds of action for the recovery of possession,  i.e., forcible entry and unlawful detainer by the Special Power of Attorney dated February 7, 2002 and March 14, 2002. That these
(accion interdictal), recovery of possession (accion publiciana), and recovery of ownership (accion de documents were appended only to [respondent George de Castro's] position paper is of no moment
reivindicacion). As explained by the renowned civilist, Professor Arturo M. Tolentino20: considering that the authority conferred therein was given prior to the institution of the complaint in
July, 2002. x x x.24

A co-owner may bring such an action, without the necessity of joining all the other co-owners Respondent deceased Jesus de Castro's failure to sign the Verification and Certificate of Non-Forum Shopping
as co-plaintiffs, because the suit is deemed to be instituted for the benefit of all . If the action is may be excused since he already executed an Affidavit 25 with respondent George de Castro that he had
for the benefit of the plaintiff alone, such that he claims possession for himself and not for the co- personal knowledge of the filing of Civil Case No. 1990. In Torres v. Specialized Packaging Development
ownership, the action will not prosper. (Emphasis added.) Corporation,26 the Court ruled that the personal signing of the verification requirement was deemed
substantially complied with when, as in the instant case, two out of 25 real parties-in-interest, who
undoubtedly have sufficient knowledge and belief to swear to the truth of the allegations in the petition, signed
the verification attached to it.

In the same vein, this Court is not persuaded by petitioner's assertion that respondents' failure to allege the
jurisdictional fact that there was "unlawful withholding" of the subject property was fatal to their cause of
action.

It is apodictic that what determines the nature of an action as well as which court has jurisdiction over it are
the allegations in the complaint and the character of the relief sought. In an unlawful detainer case, the
defendant's possession was originally lawful but ceased to be so upon the expiration of his right to possess.
Hence, the phrase "unlawful withholding" has been held to imply possession on the part of defendant, which
was legal in the beginning, having no other source than a contract, express or implied, and which later expired
as a right and is being withheld by defendant

In Barba v. Court of Appeals, the Court held that although the phrase "unlawfully withholding" was not
actually used by therein petitioner in her complaint, the Court held that her allegations, nonetheless, amounted
to an unlawful withholding of the subject property by therein private respondents, because they continuously
refused to vacate the premises even after notice and demand.

In the Petition at bar, respondents alleged in their Complaint that they are the registered owners of the subject
property; the subject property was being occupied by the petitioner pursuant to a monthly lease contract;
petitioner refused to accede to respondents' demand for rental increase; the respondents sent petitioner a letter
terminating the lease agreement and demanding that petitioner vacate and turn over the possession of the
subject property to respondents; and despite such demand, petitioner failed to surrender the subject property to
respondents. The Complaint sufficiently alleges the unlawful withholding of the subject property by petitioner,
constitutive of unlawful detainer, although the exact words "unlawful withholding" were not used. In an action
for unlawful detainer, an allegation that the defendant is unlawfully withholding possession from the plaintiff
is deemed sufficient, without necessarily employing the terminology of the law.

Petitioner's averment that the Court of Appeals should have dismissed respondents' Petition in light of the
failure of their counsel to attach the Official Receipt of his updated payment of Integrated Bar of the
Philippines (IBP) dues is now moot and academic, since respondents' counsel has already duly complied
therewith. It must be stressed that judicial cases do not come and go through the portals of a court of law by
the mere mandate of technicalities. Where a rigid application of the rules will result in a manifest failure or
miscarriage of justice, technicalities should be disregarded in order to resolve the case.

Finally, we agree in the ruling of the Court of Appeals that petitioner is liable for the payment of back rentals,
attorney's fees and cost of the suit. Respondents must be duly indemnified for the loss of income from the
subject property on account of petitioner's refusal to vacate the leased premises.

WHEREFORE, premises considered, the instant Petition is DENIED. The Decision dated 19 September
2006 and Resolution dated 25 January 2007 of the Court of Appeals in CA-G.R. SP No. 90906 are
hereby AFFIRMED in toto. Costs against petitioner.

SO ORDERED.