CIVIL PROCEDURE

CASE#1 It was agreed that petitioners will sign a deed of sale conveying the
mortgaged property in favor of private respondent Cruz and thereafter,
[G.R. No. 139884. February 15, 2001] Cruz will apply for a housing loan with Land Bank, using the subject
property as collateral. It was further agreed that out of the proceeds of
SPOUSES OCTAVIO and EPIFANIA LORBES, petitioners, vs. COURT OF the loan, P500,000.00 will be paid to the Carloses as mortgagees, and any
APPEALS, RICARDO DELOS REYES and JOSEFINA CRUZ, respondents. such balance will be applied by petitioners for capital gains tax, expenses
for the cancellation of the mortgage to the Carloses, transfer of title to
DECISION Josefina Cruz, and registration of a mortgage in favor of Land Bank.i[1]
Moreover, the monthly amortization on the housing loan which was
GONZAGA-REYES, J.: supposed to be deducted from the salary of private respondent Cruz will
be reimbursed by private respondent delos Reyes.
This petition for review on certiorari arose from an action for reformation
of instrument and damages originally filed with the Regional Trial Court of On September 29, 1992, the Land Bank issued a letter of guarantee in
Antipolo, Rizal, Branch 74, the decision on which was reviewed and favor of the Carloses, informing them that Cruzs loan had been approved.
reversed by the Third Division of the Court of Appeals. On October 22, 1992, Transfer Certificate of Title No. 165009 was
cancelled and Transfer Certificate of Title No. 229891 in the name of
Petitioners were the registered owners of a 225-square meter parcel of Josefina Cruz was issued in lieu thereof.ii[2] On November 25, 1992, the
land located in Antipolo, Rizal covered by Transfer Certificate of Title No. mortgage was discharged.
165009. Sometime in August 1991, petitioners mortgaged this property
to Florencio and Nestor Carlos in the amount of P150,000.00. Sometime in 1993, petitioners notified private respondent delos Reyes
that they were ready to redeem the property but the offer was refused.
About a year later, the mortgage obligation had increased to P500,000.00 Aggrieved, petitioners filed on July 22, 1994 a complaint for reformation
and fearing foreclosure of the property, petitioners asked their son-in- of instrument and damages with the RTC of Antipolo, Rizal, docketed as
law, herein private respondent Ricardo delos Reyes, for help in Civil Case No. 94-3296.
redeeming their property. Private respondent delos Reyes agreed to
redeem the property but because he allegedly had no money then for the In the complaint, petitioners claimed that the deed was merely a
purpose he solicited the assistance of private respondent Josefina Cruz, a formality to meet the requirements of the bank for the housing loan, and
family friend of the delos Reyeses and an employee of the Land Bank of that the real intention of the parties in securing the loan was to apply the
the Philippines. proceeds thereof for the payment of the mortgage obligation.iii[3] They

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alleged that the deed of sale did not reflect the true intention of the On October 12, 1994, private respondents filed a motion to lift order of
parties, and that the transaction was not an absolute sale but an default and to strike out evidence presented ex parte, which the court
equitable mortgage, considering that the price of the sale was inadequate denied in an order dated October 26, 1994.
considering the market value of the subject property and because they
continued paying the real estate taxes thereto even after the execution of On June 20, 1995, the trial court rendered judgment in favor of
the said deed of sale. Petitioners averred that they did not see any reason petitioners, upon finding that: (1) the Deed of Absolute Sale dated
why private respondents would retract from their original agreement October 21, 1992 did not reflect the true intention of the parties, and (2)
other than that they (petitioners) and the members of their family the transaction entered into between petitioners and Cruz was not an
resigned en masse from the Mahal Namin Organization, of which private absolute sale but an equitable mortgage, considering that the price
respondent delos Reyes was the president and chairman of the board of stated in the Deed of Absolute Sale was insufficient compared to the
directors, and private respondent Cruz was the treasurer. In the same value of the property, petitioners are still in possession of the property,
complaint, they demanded moral damages, exemplary damages, and and petitioners had continued to pay the real estate taxes thereon after
attorneys fees. the execution of the said deed of sale. As explained by the trial court in its
decision:
On July 29, 1996, the trial court issued a temporary restraining order
enjoining private respondents from ejecting petitioners from the The foregoing uncontroverted facts clearly show that the transaction
premises of the disputed property; this was soon replaced by a writ of entered into between the plaintiffs and the defendants is not an absolute
preliminary injunction. sale but merely an equitable mortgage as the sale was executed in order
to secure a loan from a certain bank to save the property from the danger
Summons and a copy of the complaint were served upon private of foreclosure and to use it as collateral thereof for bank loan purposes
respondents on August 1, 1994. Private respondents filed their answer and that the same does not reflect the real intention of the parties in
beyond the reglamentary period, or only on September 1, 1994. Thus, on executing the said Deed of Sale. The court notes that at the time the
September 5, 1994, petitioners filed a motion to declare private transaction and the Deed of Absolute Sale was executed by the plaintiffs
respondents in default, which the trial court granted in an order dated sometime in 1992, the prevailing market value of the lot alone was
September 16, 1994. On September 30 of the same year, petitioners P400,000.00 per square meter such that the lot alone consisting of 255
presented their evidence ex parte before the trial court. The principal square meters, excluding the house and improvements thereon would
witness presented was petitioner Octavio Lorbes, whose testimony was already cost more than a million pesos already hence, the consideration
corroborated by his son, Atty. Salvador Lorbes. of P600,000.00 in the said Deed of Sale is considerably insufficient
compared to the value of the property. Further, the plaintiffs are still in

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possession of the subject property and had been paying the realty taxes SO ORDERED.v[5]
thereon even after the execution of the sale and the transfer of the title
from the plaintiffs to defendant Josephine Cruz which clearly evinces the The Court of Appeals reversed the above decision, finding that private
true badge of the transaction which occurred between the plaintiffs and respondents were denied due process by the refusal of the trial court to
defendants as that of an equitable mortgage and not an absolute sale and lift the order of default against them, and that the transaction between
that the plaintiffs were only compelled to enter into the said transaction petitioners and Cruz was one of absolute sale, not of equitable mortgage.
of sale with the defendants as the former were in extreme need of It also held the RTC decision to be constitutionally infirm for its failure to
money in order to redeem their only conjugal property and to save it clearly and distinctly state the facts and the law on which it is based.
from being foreclosed for non-payment of the mortgage obligation and
that it was never the intention of the plaintiffs to sell the property to the The Court of Appeals held that the reformation of the Deed of Absolute
defendants, as it was their agreement that plaintiffs can redeem the Sale in the instant case is improper because there is no showing that such
property or any member of the family thereof, when they become instrument failed to express the true intention of the parties by reason of
financially stable.iv[4] mistake, fraud, inequitable conduct, or accident in the execution
thereof.vi[6] To the Court of Appeals, the transaction was unmistakably a
The dispositive portion of the trial courts decision thus provides: contract of sale, as evidenced by the numerous supporting documents
thereto, such as the Contract to Sell dated June 1992, Affidavit of
WHEREFORE, in view of the foregoing, judgment is hereby rendered in Waiver/Assignment dated August 14, 1992, Receipt of Partial Advance
favor of the plaintiffs and against the defendants, ordering the latter Payment dated September 9, 1992, and Transfer Certificate of Title No.
jointly and severally, as follows: 229891 issued in the name of private respondent Cruz. Going over the
indicators giving rise to a presumption of equitable mortgage cited in the
1. To reconvey the subject property to the plaintiffs upon payment decision of the RTC, the Court of Appeals held: (1) inadequacy of price is
of the price stipulated in the contract of sale; material only in a sale with right to repurchase, which is not the case with
herein petitioners and Cruz; moreover, the estimate of the market value
2. To pay plaintiffs the sum of P50,000.00 as moral damages; of the property came only from the bare testimony of petitioner Octavio
Lorbes, (2) petitioners remaining in possession of the property resulted
3. To pay plaintiffs the sum of P50,000.00 as and by way of attorneys only from their refusal to vacate the same despite the lawful demands of
fees plus P1,000.00 per court appearance; private respondent Cruz, and (3) there was no documentary evidence
that petitioners continued paying the taxes on the disputed property
4. To pay the costs of suit. after the execution of the Deed of Absolute Sale.

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In its decision, the Court of Appeals also pointed out that under the usual the holding of the Court of Appeals that the default order of the RTC was
arrangement of pacto de retro the vendor of the property is a debtor of immoderate and in violation of private respondents due process rights.
the vendee, and the property is used as security for his obligation. In the However, we do not think that the violation was of a degree as to justify a
instant case, the mortgage creditors (the Carloses) are third persons to remand of the proceedings to the trial court, first, because such relief was
the Deed of Absolute Sale. not prayed for by private respondents, and second, because the
affirmative defenses and evidence that private respondents would have
This petition raises three issues before the Court: (1) whether respondent presented before the RTC were capably ventilated before respondent
court erred in ruling that the Deed of Absolute Sale dated October 21, court, and were taken into account by the latter in reviewing the
1992 was an equitable mortgage, (2) whether respondent court erred in correctness of the evaluation of petitioners evidence by the RTC and
ruling that by declaring private respondents in default they were denied ultimately, in reversing the decision of the RTC. This is evident from the
due process of law, and (3) whether respondent court erred in ruling that discussions in the decision of the Court of Appeals, which cited with
the trial courts decision violates the constitutional requirement that it approval a number of private respondents arguments and evidence,
should clearly and distinctly state the facts and the law on which it is including the documents annexed to their opposition to the issuance of a
based.vii[7] writ of preliminary injunction filed with the RTC.x[10] To emphasize, the
reversal of respondent court was not simply on due process grounds but
We shall first deal with the second and third issues, these being on the merits, going into the issue of whether the transaction was one of
preliminary matters. equitable mortgage or of sale, and so we find that we can properly take
cognizance of the substantive issue in this case, while of course bearing in
Well-settled is the rule that courts should be liberal in setting aside mind the inordinate manner by which the RTC issued its default order.
orders of default for judgments of default are frowned upon, unless in
cases where it clearly appears that the reopening of the case is intended As regards the third issue, we reverse for being unfounded the holding of
for delay.viii[8] The issuance of orders of default should be the exception the Court of Appeals since the RTC decision, some parts of which we even
rather than the rule, to be allowed only in clear cases of obstinate refusal reproduced in our earlier discussions, clearly complied with the
by the defendant to comply with the orders of the trial court.ix[9] constitutional requirement to state clearly and distinctly the facts and the
law on which it was based.
Under the factual milieu of this case, the RTC was indeed remiss in
denying private respondents motion to lift the order of default and to Thus, the one issue essential to the resolution of this case is the nature of
strike out the evidence presented by petitioners ex parte, especially the transaction between petitioners and private respondent Cruz
considering that an answer was filed, though out of time. We thus sustain concerning the subject parcel of land. Did the parties intend for the

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contested Deed of Absolute Sale to be a bona fide and absolute repurchase another instrument extending the period of redemption or
conveyance of the property, or merely an equitable mortgage? granting a new period is executed; (d) the purchaser retains for himself a
part of the purchase price; (e) the vendor binds himself to pay the taxes
On the outset, it must be emphasized that there is no conclusive test to on the thing sold; and, (f) in any other case where it may be fairly inferred
determine whether a deed absolute on its face is really a simple loan that the real intention of the parties is that the transaction shall secure
accommodation secured by a mortgage.xi[11] The decisive factor in the payment of a debt or the performance of any other obligation.
evaluating such agreement is the intention of the parties, as shown not
necessarily by the terminology used in the contract but by all the Applying the foregoing considerations to the instant case, the Court finds
surrounding circumstances, such as the relative situation of the parties at that the true intention between the parties for executing the Deed of
that time, the attitude, acts, conduct, declarations of the parties, the Absolute Sale was not to convey ownership of the property in question
negotiations between them leading to the deed, and generally, all but merely to secure the housing loan of Cruz, in which petitioners had a
pertinent facts having a tendency to fix and determine the real nature of direct interest since the proceeds thereof were to be immediately applied
their design and understanding. As such, documentary and parol to their outstanding mortgage obligation to the Carloses.
evidence may be submitted and admitted to prove the intention of the
parties.xii[12] It is not disputed that before the execution of the Deed of Absolute Sale
petitioners mortgage obligation to the Carloses was nearing maturity and
The conditions which give way to a presumption of equitable mortgage, they were in dire need of money to meet the same. Hence, they asked for
as set out in Article 1602 of the Civil Code, apply with equal force to a the help of their son-in-law delos Reyes who in turn requested Cruz to
contract purporting to be one of absolute sale.xiii[13] Moreover, the take out a housing loan with Land Bank. Since collateral is a standard
presence of even one of the circumstances laid out in Article 1602, and requirement of banks in giving out loans, it was made to appear that the
not a concurrence of the circumstances therein enumerated, suffices to subject property was sold to Cruz so she can declare the same as
construe a contract of sale to be one of equitable mortgage.xiv[14] This is collateral for the housing loan. This was simply in line with the basic
simply in consonance with the rule that the law favors the least requirement in our laws that the mortgagor be the absolute owner of the
transmission of property rights.xv[15] property sought to be mortgaged.xvi[16] Consistent with their
agreement, as soon as the housing loan was approved, the full amount of
Thus, under Article 1602 of the Civil Code, a contract shall be presumed the proceeds were immediately turned over to petitioners, who promptly
to be an equitable mortgage when --- (a) the price of a sale with right to paid P500,000.00 therefrom to the Carloses in full satisfaction of their
repurchase is unusually inadequate; (b) the vendor remains in possession mortgage obligation. The balance was spent by petitioners in transferring
as lessee or otherwise; (c) upon or after the expiration of the right of

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title to the property to Cruz and registering the new mortgage with Land funds. Necessitous men are not, truly speaking, free men; but to answer a
Bank. present emergency, will submit to any terms that the crafty may impose
upon them.xvii[17]
Understandably, the Deed of Absolute Sale and its supporting documents
do not reflect the true arrangement between the parties as to how the The facts further bear out that petitioners remained in possession of the
loan proceeds are to be actually applied because it was not the intention disputed property after the execution of the Deed of Absolute Sale and
of the parties for these documents to do so. The sole purpose for the transfer of registered title to Cruz in October 1992. Cruz made no
preparing these documents was to satisfy Land Bank that the demand on petitioners to vacate the subject premises until March 19,
requirement of collateral relative to Cruzs application for a housing loan 1994;xviii[18] interestingly, this was two days after petitioners signified
was met. their intention to redeem the property by paying the full amount of
P600,000.00.xix[19] On this basis, the finding of respondent court that
Were we to accept, as respondent court had, that the loan that Cruz took petitioners remained in possession of the property only because they
out with Land Bank was indeed a housing loan, then it is rather curious refused to vacate on Cruzs demand is not accurate because the records
that Cruz kept none of the loan proceeds but allowed for the bulk thereof reflect that no such demand was made until more than a year since the
to be immediately applied to the payment of petitioners outstanding purported sale of the property.
mortgage obligation. It also strains credulity that petitioners, who were
exhausting all means to save their sole conjugal real property from being Copies of realty tax receipts attached to the record also show that
foreclosed by the Carloses, would concurrently part with the same in petitioners continued paying for the taxes on the property for the period
favor of Cruz. 1992 to 1994,xx[20] or after the property was supposed to have been
sold to Cruz.
Such urgent prospect of foreclosure helps to explain why petitioners
would subscribe to an agreement like the Deed of Absolute Sale in the From the above, the Court is satisfied that enough of the circumstances
herein case, which on its face represents their unconditional set out in Article 1602 of the Civil Code are attendant in the instant case,
relinquishment of ownership over their property. Passing upon previous as to show that the true arrangement between petitioners and private
similar situations the Court has declared that while it was true that respondent Cruz was an equitable mortgage.
plaintiffs were aware of the contents of the contracts, the preponderance
of the evidence showed however that they signed knowing that said That a transfer certificate of title was issued in favor of private
contracts did not express their real intention, and if they did so respondent Cruz also does not import conclusive evidence of ownership
notwithstanding this, it was due to the urgent necessity of obtaining or that the agreement between the parties was one of sale. As was stated

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in Oronce vs. Court of Appeals,xxi[21] citing Macapinlac vs. Gutierrez preclude the Court from passing upon the issue of whether the
Repidexxii[22] transaction was in fact an equitable mortgage as the same has been
squarely raised in the complaint and had been the subject of arguments
xxx it must be borne in mind that the equitable doctrine xxx to the effect and evidence of the parties. Thus we have held that it is not the caption
that any conveyance intended as security for a debt will be held in effect of the pleading but the allegations therein that determine the nature of
to be a mortgage, whether so actually expressed in the instrument or not, the action, and the Court shall grant relief warranted by the allegations
operates regardless of the form of the agreement chosen by the and the proof even if no such relief is prayed for.xxiv[24]
contracting parties as the repository of their will. Equity looks through the
form and considers the substance; and no kind of engagement can be Finally, on the award of damages. Considering the due process flaws that
adopted which will enable the parties to escape from the equitable attended the default judgment of the RTC, and applying the rule adopted
doctrine to which reference is made. In other words, a conveyance of by this Court that in instances where no actual damages are adjudicated
land, accompanied by registration in the name of the transferee and the the awards for moral and exemplary damages may be reduced,xxv[25] we
issuance of a new certificate, is no more secured from the operation of reduce the award for moral damages in the instant case from P50,000.00
the equitable doctrine than the most informal conveyance that could be to P30,000.00. At the same time, we sustain the award of attorneys fees
devised. in the amount of P50,000.00, it being clear that petitioners were
compelled to incur expenses and undergo the rigors of litigation to
Before we fully set aside this issue, it will be recalled that the instant recover their property.
petition originated as a complaint for reformation filed before the RTC of
Antipolo, Rizal. The Court of Appeals found petitioners action for WHEREFORE, the decision of the Court of Appeals is REVERSED and SET
reformation unmeritorious because there was no showing that the failure ASIDE. The decision of the Regional Trial Court of Antipolo, Rizal is
of the deed of sale to express the parties true intention was because of REINSTATED, with the MODIFICATION that the award of moral damages is
mistake, fraud, inequitable conduct, or accident.xxiii[23] Indeed, under reduced to P30,000.00, and in all other respects AFFIRMED. Costs against
the facts of the present case, reformation may not be proper for failure private respondents.
to fully meet the requisites in Article 1359 of the Civil Code, and because
as the evidence eventually bore out the contested Deed of Absolute Sale SO ORDERED.
was not intended to reflect the true agreement between the parties but
was merely to comply with the collateral requirements of Land Bank.
However, the fact that the complaint filed by petitioners before the trial
CASE #2
court was categorized to be one for reformation of instrument should not

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G.R. No. 173559 January 7, 2013 The facts of this case are simple and undisputed.

LETICIA DIONA, represented by her Attorney-in-Fact, MARCELINA On March 2, 1991, respondents obtained a loan of ₱45,000.00 from
DIONA, Petitioner, petitioner payable in six months and secured by a Real Estate Mortgage 6
vs. over their 202-square meter property located in Marulas, Valenzuela and
ROMEO A. BALANGUE, SONNY A. BALANGUE, REYNALDO A. BALANGUE, covered by Transfer Certificate of Title (TCT) No. V-12296.7 When the
and ESTEBAN A. BALANGUE, JR., Respondents. debt became due, respondents failed to pay notwithstanding demand.
Thus, on September 17, 1999, petitioner filed with the RTC a Complaint8
DECISION praying that respondents be ordered:

DEL CASTILLO, J.: (a) To pay petitioner the principal obligation of ₱45,000.00, with
interest thereon at the rate of 12% per annum, from 02 March
The great of a relief neither sought by the party in whose favor it was 1991 until the full obligation is paid.
given not supported by the evidence presented violates the opposing
party’s right to due process and may be declared void ab initio in a proper (b) To pay petitioner actual damages as may be proven during the
proceeding. trial but shall in no case be less than ₱10,000.00; ₱25,000.00 by
way of attorney’s fee, plus ₱2,000.00 per hearing as appearance
This Petition for Review on Certiorari1 assails the November 24, 2005 fee.
Resolution2 of the Court of Appeals (CA) issued in G.R. SP No. 85541
which granted the Petition for Annulment of Judgment 3 filed by the (c) To issue a decree of foreclosure for the sale at public auction of
respondents seeking to nullify that portion of the October 17, 2000 the aforementioned parcel of land, and for the disposition of the
Decision4 of the Regional Trial Court (RTC), Branch 75, Valenzuela City proceeds thereof in accordance with law, upon failure of the
awarding petitioner 5% monthly interest rate for the principal amount of respondents to fully pay petitioner within the period set by law
the loan respondent obtained from her. the sums set forth in this complaint.

This Petition likewise assails the CA’s June 26, 2006 Resolution5 denying (d) Costs of this suit.
petitioner’s Motion for Reconsideration.
Other reliefs and remedies just and equitable under the premises are
Factual Antecedents likewise prayed for.9 (Emphasis supplied)

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Respondents were served with summons thru respondent Sonny A. SO ORDERED.12 (Emphasis supplied)
Balangue (Sonny). On October 15, 1999, with the assistance of Atty.
Arthur C. Coroza (Atty. Coroza) of the Public Attorney’s Office, they filed a Subsequently, petitioner filed a Motion for Execution,13 alleging that
Motion to Extend Period to Answer. Despite the requested extension, respondents did not interpose a timely appeal despite receipt by their
however, respondents failed to file any responsive pleadings. Thus, upon former counsel of the RTC’s Decision on November 13, 2000. Before it
motion of the petitioner, the RTC declared them in default and allowed could be resolved, however, respondents filed a Motion to Set Aside
petitioner to present her evidence ex parte.10 Judgment14 dated January 26, 2001, claiming that not all of them were
duly served with summons. According to the other respondents, they had
Ruling of the RTC sought to be annulled. no knowledge of the case because their co-respondent Sonny did not
inform them about it. They prayed that the RTC’s October 17, 2000
In a Decision11 dated October 17, 2000, the RTC granted petitioner’s Decision be set aside and a new trial be conducted.
Complaint. The dispositive portion of said Decision reads:
But on March 16, 2001, the RTC ordered15 the issuance of a Writ of
WHEREFORE, judgment is hereby rendered in favor of the petitioner, Execution to implement its October 17, 2000 Decision. However, since
ordering the respondents to pay the petitioner as follows: the writ could not be satisfied, petitioner moved for the public auction of
the mortgaged property,16 which the RTC granted.17 In an auction sale
a) the sum of FORTY FIVE THOUSAND (₱45,000.00) PESOS, conducted on November 7, 2001, petitioner was the only bidder in the
representing the unpaid principal loan obligation plus interest at amount of ₱420,000.00. Thus, a Certificate of Sale18 was issued in her
5% per month [sic] reckoned from March 2, 1991, until the same favor and accordingly annotated at the back of TCT No. V-12296.
is fully paid;
Respondents then filed a Motion to Correct/Amend Judgment and To Set
b) ₱20,000.00 as attorney’s fees plus cost of suit; Aside Execution Sale19 dated December 17, 2001, claiming that the
parties did not agree in writing on any rate of interest and that petitioner
c) in the event the [respondents] fail to satisfy the aforesaid merely sought for a 12% per annum interest in her Complaint.
obligation, an order of foreclosure shall be issued accordingly for Surprisingly, the RTC awarded 5% monthly interest (or 60% per annum)
the sale at public auction of the subject property covered by from March 2, 1991 until full payment. Resultantly, their indebtedness
Transfer Certificate of Title No. V-12296 and the improvements inclusive of the exorbitant interest from March 2, 1991 to May 22, 2001
thereon for the satisfaction of the petitioner’s claim. ballooned from ₱124,400.00 to ₱652,000.00.

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In an Order20 dated May 7, 2002, the RTC granted respondents’ motion WHEREFORE, foregoing premises considered, the Petition having merit, is
and accordingly modified the interest rate awarded from 5% monthly to hereby GIVEN DUE COURSE. Resultantly, the challenged May 7, 2002 and
12% per annum. Then on August 2, 2002, respondents filed a Motion for September 5, 2000 orders of Public Respondent Court are hereby
Leave To Deposit/Consign Judgment Obligation21 in the total amount of ANNULLED and SET ASIDE for having been issued with grave abuse of
₱126,650.00.22 discretion amounting to lack or in excess of jurisdiction. No costs.

Displeased with the RTC’s May 7, 2002 Order, petitioner elevated the SO ORDERED.25 (Emphases in the original; italics supplied.)
matter to the CA via a Petition for Certiorari23 under Rule 65 of the Rules
of Court. On August 5, 2003, the CA rendered a Decision 24 declaring that Proceedings before the Court of Appeals
the RTC exceeded its jurisdiction in awarding the 5% monthly interest but
at the same time pronouncing that the RTC gravely abused its discretion Taking their cue from the Decision of the CA in the special civil action for
in subsequently reducing the rate of interest to 12% per annum. In so certiorari, respondents filed with the same court a Petition for Annulment
ruling, the CA ratiocinated: of Judgment and Execution Sale with Damages.26 They contended that
the portion of the RTC Decision granting petitioner 5% monthly interest
Indeed, We are convinced that the Trial Court exceeded its jurisdiction rate is in gross violation of Section 3(d) of Rule 9 of the Rules of Court and
when it granted 5% monthly interest instead of the 12% per annum of their right to due process. According to respondents, the loan did not
prayed for in the complaint. However, the proper remedy is not to amend carry any interest as it was the verbal agreement of the parties that in
the judgment but to declare that portion as a nullity. Void judgment for lieu thereof petitioner’s family can continue occupying respondents’
want of jurisdiction is no judgment at all. It cannot be the source of any residential building located in Marulas, Valenzuela for free until said loan
right nor the creator of any obligation (Leonor vs. CA, 256 SCRA 69). No is fully paid.
legal rights can emanate from a resolution that is null and void (Fortich
vs. Corona, 312 SCRA 751). Ruling of the Court of Appeals

From the foregoing, the remedy of the respondents is to have the Court Initially, the CA denied due course to the Petition.27 Upon respondents’
declare the portion of the judgment providing for a higher interest than motion, however, it reinstated and granted the Petition. In setting aside
that prayed for as null and void for want of or in excess of jurisdiction. A portions of the RTC’s October 17, 2000 Decision, the CA ruled that aside
void judgment never acquire[s] finality and any action to declare its from being unconscionably excessive, the monthly interest rate of 5%
nullity does not prescribe (Heirs of Mayor Nemencio Galvez vs. CA, 255 was not agreed upon by the parties and that petitioner’s Complaint
SCRA 672). clearly sought only the legal rate of 12% per annum. Following the

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mandate of Section 3(d) of Rule 9 of the Rules of Court, the CA concluded I. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND
that the awarded rate of interest is void for being in excess of the relief SERIOUS ERROR OF LAW WHEN IT GRANTED RESPONDENTS’
sought in the Complaint. It ruled thus: PETITION FOR ANNULMENT OF JUDGMENT AS A SUBSTITUTE OR
ALTERNATIVE REMEDY OF A LOST APPEAL.
WHEREFORE, respondents’ motion for reconsideration is GRANTED and
our resolution dated October 13, 2004 is, accordingly, REVERSED and SET II. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND
ASIDE. In lieu thereof, another is entered ordering the ANNULMENT OF: SERIOUS ERROR AND MISAPPREHENSION OF LAW AND THE FACTS
WHEN IT GRANTED RESPONDENTS’ PETITION FOR ANNULMENT
(a) public respondent’s impugned October 17, 2000 judgment, OF JUDGMENT OF THE DECISION OF THE REGIONAL TRIAL COURT
insofar as it awarded 5% monthly interest in favor of petitioner; OF VALENZUELA, BRANCH 75 DATED OCTOBER 17, 2000 IN CIVIL
and CASE NO. 241-V-99, DESPITE THE FACT THAT SAID DECISION HAS
BECOME FINAL AND ALREADY EXECUTED CONTRARY TO THE
(b) all proceedings relative to the sale at public auction of the DOCTRINE OF IMMUTABILITY OF JUDGMENT.30
property titled in respondents’ names under Transfer Certificate
of Title No. V-12296 of the Valenzuela registry. Petitioner’s Arguments

The judgment debt adjudicated in public respondent’s impugned October Petitioner claims that the CA erred in partially annulling the RTC’s
17, 2000 judgment is, likewise, ordered RECOMPUTED at the rate of 12% October 17, 2000 Decision. She contends that a Petition for Annulment of
per annum from March 2, 1991. No costs. Judgment may be availed of only when the ordinary remedies of new
trial, appeal, petition for relief or other appropriate remedies are no
SO ORDERED.28 (Emphases in the original.) longer available through no fault of the claimant. In the present case,
however, respondents had all the opportunity to question the October
Petitioner sought reconsideration, which was denied by the CA in its June 17, 2000 Decision of the RTC, but because of their own inaction or
26, 2006 Resolution.29 negligence they failed to avail of the remedies sanctioned by the rules.
Instead, they contented themselves with the filing of a Motion to Set
Issues Aside Judgment and then a Motion to Correct/Amend Judgment and to
Set Aside Execution Sale.
Hence, this Petition anchored on the following grounds:

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 CIVIL PROCEDURE

Petitioner likewise argues that for a Rule 47 petition to prosper, the same that Section (3)d of Rule 9 of the Rules of Court is clear that when the
must either be based on extrinsic fraud or lack of jurisdiction. However, defendant is declared in default, the court cannot grant a relief more
the allegations in respondents’ Rule 47 petition do not constitute than what is being prayed for in the Complaint. A judgment which
extrinsic fraud because they simply pass the blame to the negligence of transgresses said rule, according to the respondents, is void for having
their former counsel. In addition, it is too late for respondents to pass the been issued without jurisdiction and for being violative of due process of
buck to their erstwhile counsel considering that when they filed their law.
Motion to Correct/Amend Judgment and To Set Aside Execution Sale they
were already assisted by their new lawyer, Atty. Reynaldo A. Ruiz, who Respondents maintain that it was through no fault of their own, but
did not also avail of the remedies of new trial, appeal, etc. As to the through the gross negligence of their former counsel, Atty. Coroza, that
ground of lack of jurisdiction, petitioner posits that there is no reason to the remedies of new trial, appeal or petition for relief from judgment
doubt that the RTC had jurisdiction over the subject matter of the case were lost. They allege that after filing a Motion to Extend Period to
and over the persons of the respondents. Answer, Atty. Coroza did not file any pleading resulting to their being
declared in default. While the said lawyer filed on their behalf a Motion
While conceding that the RTC patently made a mistake in awarding 5% to Set Aside Judgment dated January 26, 2001, he however took no steps
monthly interest, petitioner nonetheless invokes the doctrine of to appeal from the Decision of the RTC, thereby allowing said judgment
immutability of final judgment and contends that the RTC Decision can no to lapse into finality. Citing Legarda v. Court of Appeals,31 respondents
longer be corrected or modified since it had long become final and aver that clients are not always bound by the actions of their counsel, as
executory. She likewise points out that respondents received a copy of in the present case where the clients are to lose their property due to the
said Decision on November 13, 2000 but did nothing to correct the same. gross negligence of their counsel.
They did not even question the award of 5% monthly interest when they
filed their Motion to Set Aside Judgment which they anchored on the sole With regard to petitioner’s invocation of immutability of judgment,
ground of the RTC’s lack of jurisdiction over the persons of some of the respondents argue that said doctrine applies only to valid and not to void
respondents. judgments.

Respondents’ Arguments Our Ruling

Respondents do not contest the existence of their obligation and the The petition must fail.
principal amount thereof. They only seek quittance from the 5% monthly
interest or 60% per annum imposed by the RTC. Respondents contend

12
 CIVIL PROCEDURE

We agree with respondents that the award of 5% monthly interest Grant of 5% monthly interest is way beyond the 12% per annum interest
violated their right to due process and, hence, the same may be set aside sought in the Complaint and smacks of violation of due process.
in a Petition for Annulment of Judgment filed under Rule 47 of the Rules
of Court. It is settled that courts cannot grant a relief not prayed for in the
pleadings or in excess of what is being sought by the party. They cannot
Annulment of judgment under Rule 47; an exception to the final also grant a relief without first ascertaining the evidence presented in
judgment rule; grounds therefor. support thereof. Due process considerations require that judgments must
conform to and be supported by the pleadings and evidence presented in
A Petition for Annulment of Judgment under Rule 47 of the Rules of Court court. In Development Bank of the Philippines v. Teston,36 this Court
is a remedy granted only under exceptional circumstances where a party, expounded that:
without fault on his part, has failed to avail of the ordinary remedies of
new trial, appeal, petition for relief or other appropriate remedies. Said Due process considerations justify this requirement. It is improper to
rule explicitly provides that it is not available as a substitute for a remedy enter an order which exceeds the scope of relief sought by the pleadings,
which was lost due to the party’s own neglect in promptly availing of the absent notice which affords the opposing party an opportunity to be
same. "The underlying reason is traceable to the notion that annulling heard with respect to the proposed relief. The fundamental purpose of
final judgments goes against the grain of finality of judgment. Litigation the requirement that allegations of a complaint must provide the
must end and terminate sometime and somewhere, and it is essential to measure of recovery is to prevent surprise to the defendant.
an effective administration of justice that once a judgment has become
final, the issue or cause involved therein should be laid to rest."32 Notably, the Rules is even more strict in safeguarding the right to due
process of a defendant who was declared in default than of a defendant
While under Section 2, Rule 4733 of the Rules of Court a Petition for who participated in trial. For instance, amendment to conform to the
Annulment of Judgment may be based only on the grounds of extrinsic evidence presented during trial is allowed the parties under the Rules.37
fraud and lack of jurisdiction, jurisprudence recognizes lack of due But the same is not feasible when the defendant is declared in default
process as additional ground to annul a judgment.34 In Arcelona v. Court because Section 3(d), Rule 9 of the Rules of Court comes into play and
of Appeals,35 this Court declared that a final and executory judgment may limits the relief that may be granted by the courts to what has been
still be set aside if, upon mere inspection thereof, its patent nullity can be prayed for in the Complaint. It provides:
shown for having been issued without jurisdiction or for lack of due
process of law.

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 CIVIL PROCEDURE

(d) Extent of relief to be awarded. – A judgment rendered against a party complainant petitioner was seeking for what she merely stated in her
in default shall not exceed the amount or be different in kind from that Complaint.
prayed for nor award unliquidated damages.
Neither can the grant of the 5% monthly interest be considered
The raison d’être in limiting the extent of relief that may be granted is subsumed by petitioner’s general prayer for "other reliefs and remedies
that it cannot be presumed that the defendant would not file an Answer just and equitable under the premises x x x."42 To repeat, the court’s
and allow himself to be declared in default had he known that the grant of relief is limited only to what has been prayed for in the
plaintiff will be accorded a relief greater than or different in kind from Complaint or related thereto, supported by evidence, and covered by the
that sought in the Complaint.38 No doubt, the reason behind Section 3(d), party’s cause of action.43 Besides, even assuming that the awarded 5%
Rule 9 of the Rules of Court is to safeguard defendant’s right to due monthly or 60% per annum interest was properly alleged and proven
process against unforeseen and arbitrarily issued judgment. This, to the during trial, the same remains unconscionably excessive and ought to be
mind of this Court, is akin to the very essence of due process. It embodies equitably reduced in accordance with applicable jurisprudence. In Bulos,
"the sporting idea of fair play"39 and forbids the grant of relief on matters Jr. v. Yasuma,44 this Court held:
where the defendant was not given the opportunity to be heard thereon.
In the case of Ruiz v. Court of Appeals, citing the cases of Medel v. Court
In the case at bench, the award of 5% monthly interest rate is not of Appeals, Garcia v. Court of Appeals, Spouses Bautista v. Pilar
supported both by the allegations in the pleadings and the evidence on Development Corporation and the recent case of Spouses Solangon v.
record. The Real Estate Mortgage40 executed by the parties does not Salazar, this Court considered the 3% interest per month or 36% interest
include any provision on interest. When petitioner filed her Complaint per annum as excessive and unconscionable. Thereby, the Court, in the
before the RTC, she alleged that respondents borrowed from her "the said case, equitably reduced the rate of interest to 1% interest per month
sum of FORTY-FIVE THOUSAND PESOS (₱45,000.00), with interest thereon or 12% interest per annum. (Citations omitted)
at the rate of 12% per annum"41 and sought payment thereof. She did not
allege or pray for the disputed 5% monthly interest. Neither did she It is understandable for the respondents not to contest the default order
present evidence nor testified thereon. Clearly, the RTC’s award of 5% for, as alleged in their Comment, "it is not their intention to impugn or
monthly interest or 60% per annum lacks basis and disregards due run away from their just and valid obligation."45 Nonetheless, their waiver
process. It violated the due process requirement because respondents to present evidence should never be construed as waiver to contest
were not informed of the possibility that the RTC may award 5% monthly patently erroneous award which already transgresses their right to due
interest. They were deprived of reasonable opportunity to refute and process, as well as applicable jurisprudence.
present controverting evidence as they were made to believe that the

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 CIVIL PROCEDURE

Respondents’ former counsel was grossly negligent in handling the case of lack of jurisdiction, oblivious to the fact that the erroneous award of
of his clients; respondents did not lose ordinary remedies of new trial, 5% monthly interest would result to his clients’ deprivation of property
petition for relief, etc. through their own fault. without due process of law. Worse, he even allowed the RTC Decision to
become final by not perfecting an appeal. Neither did he file a petition for
Ordinarily, the mistake, negligence or lack of competence of counsel relief therefrom. It was only a year later that the patently erroneous
binds the client.1âwphi1 This is based on the rule that any act performed award of 5% monthly interest was brought to the attention of the RTC
by a counsel within the scope of his general or implied authority is when respondents, thru their new counsel, filed a Motion to
regarded as an act of his client. A recognized exception to the rule is Correct/Amend Judgment and To Set Aside Execution Sale. Even the RTC
when the lawyers were grossly negligent in their duty to maintain their candidly admitted that it "made a glaring mistake in directing the
client’s cause and such amounted to a deprivation of their client’s defendants to pay interest on the principal loan at 5% per month which is
property without due process of law.46 In which case, the courts must very different from what was prayed for by the plaintiff."50
step in and accord relief to a client who suffered thereby.47
"A lawyer owes entire devotion to the interest of his client, warmth and
The manifest indifference of respondents’ former counsel in handling the zeal in the maintenance and defense of his rights and the exertion of his
cause of his client was already present even from the beginning. It should utmost learning and ability, to the end that nothing can be taken or
be recalled that after filing in behalf of his clients a Motion to Extend withheld from his client except in accordance with the law."51 Judging
Period to Answer, said counsel allowed the requested extension to pass from how respondents’ former counsel handled the cause of his clients,
without filing an Answer, which resulted to respondents being declared in there is no doubt that he was grossly negligent in protecting their rights,
default. His negligence was aggravated by the fact that he did not to the extent that they were deprived of their property without due
question the awarded 5% monthly interest despite receipt of the RTC process of law.
Decision on November 13, 2000.48 A simple reading of the dispositive
portion of the RTC Decision readily reveals that it awarded exorbitant and In fine, respondents did not lose the remedies of new trial, appeal,
unconscionable rate of interest. Its difference from what is being prayed petition for relief and other remedies through their own fault. It can only
for by the petitioner in her Complaint is so blatant and very patent. It also be attributed to the gross negligence of their erstwhile counsel which
defies elementary jurisprudence on legal rate of interests. Had the prevented them from pursuing such remedies. We cannot also blame
counsel carefully read the judgment it would have caught his attention respondents for relying too much on their former counsel. Clients have
and compelled him to take the necessary steps to protect the interest of reasonable expectations that their lawyer would amply protect their
his client. But he did not. Instead, he filed in behalf of his clients a Motion interest during the trial of the case.52 Here,
to Set Aside Judgment49 dated January 26, 2001 based on the sole ground

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 CIVIL PROCEDURE

"respondents are plain and ordinary people x x x who are totally ignorant SO ORDERED.
of the intricacies and technicalities of law and legal procedures. Being so,
they completely relied upon and trusted their former counsel to
appropriately act as their interest may lawfully warrant and require."53
CASE#3
As a final word, it is worth noting that respondents’ principal obligation PHILIPPINE CHARTER G.R. No. 185066
was only ₱45,000.00. Due to their former counsel’s gross negligence in
handling their cause, coupled with the RTC’s erroneous, baseless, and INSURANCE CORPORATION,
illegal award of 5% monthly interest, they now stand to lose their
property and still owe petitioner a large amount of money. As aptly Petitioner, Present:
observed by the CA:

x x x If the impugned judgment is not, therefore, rightfully nullified,

petitioners will not only end up losing their property but will additionally
owe private respondent the sum of ₱232,000.00 plus the legal interest *YNARES-SANTIAGO,
said balance had, in the meantime, earned. As a court of justice and
equity, we cannot, in good conscience, allow this unconscionable **CARPIO-MORALES,
- versus -
situation to prevail.54
Acting Chairperson,
Indeed, this Court is appalled by petitioner’s invocation of the doctrine of
immutability of judgment. Petitioner does not contest as she even admits BRION,
that the RTC made a glaring mistake in awarding 5% monthly interest.55
Amazingly, she wants to benefit from such erroneous award. This Court
cannot allow this injustice to happen.

WHEREFORE, the instant Petition is hereby DENIED and the assailed

November 24, 2005 and June 26, 2006 Resolution of the Court of Appeals
in CA-G.R. SP No. 85541 are AFFIRMED.

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 CIVIL PROCEDURE

DEL CASTILLO, and Petitioner Philippine Charter Insurance Corporation (PCIC) submits
the present motion for the reconsideration1[1] of our Resolution dated
ABAD, JJ.
December 17, 2008, which denied due course to its petition for review on
certiorari.2[2] It seeks to reinstate the petition and effect a reversal of the
Court of Appeals (CA) Decision3[3] and Resolution4[4] dated January 7,
2008 and October 29, 2008, respectively, in CA-G.R. CV No. 86948. In its
PHILIPPINE NATIONAL Promulgated: petition, the petitioner imputes reversible error on the appellate court

CONSTRUCTION CORPORATION, for ruling that it is liable under PCIC Bond No. 27547 and under PCIC Bond
No. 27546, as the latter bond was not covered by the complaint for
Respondent.

October 2, 2009

x ---------------------------------------------------------------------------------------- x

RESOLUTION

BRION, J.:

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 CIVIL PROCEDURE

collection of sum of money filed by respondent Philippine National On November 13, 1997, PNCC issued in favor of Kalingo Purchase
Construction Corporation (PNCC).5[5] Order (P.O.) No. 71024L for 25 units of tollbooths for a total of
P2,100,000.00, and P.O. No. 71025L for two units of tollbooths
amounting to P168,000.00. These issuances were subject to the
condition, among others, that each P.O. shall be covered by a surety bond
The facts, as drawn from the records, are briefly summarized
equivalent to 100% of the total down payment (50% of the total cost
below.
reflected on the P.O.), and that the surety bond shall continue in full force
until the supplier shall have complied with all the undertakings and
covenants to the full satisfaction of PNCC.
PNCC is engaged in the construction business and tollway
operations. On October 16, 1997, PNCC conducted a public bidding for
the supply of labor, materials, tools, supervision, equipment, and other
Kalingo, hence, posted surety bonds Surety Bond Nos. 27546 and
incidentals necessary for the fabrication and delivery of 27 tollbooths to
27547 issued by the PCIC and whose terms and conditions read:
be used for the automation of toll collection along the expressways.
Orlando Kalingo (Kalingo) won in the bidding and was awarded the
contract.
Surety Bond No. 27546

To supply labor, materials, tools, supervision

equipment, and other incidentals necessary for the

18
 CIVIL PROCEDURE

fabrication and delivery of Two (2) Units Toll Booth at San part of the Principal to finish the project due to his own
Fernando Interchange SB Entry as per Purchase Order No. fault.
71025L, copy of which is attached as Annex A. This bond
also guarantees the repayment of the down payment or It is understood that the liability of the Surety
whatever balance thereof in the event of failure on the under this bond shall in no case exceed the sum of
part of the Principal to finish the project due to his own P1,050,000.00, Philippine Currency.7[7]
fault.

It is understood that the liability of the Surety

under this bond shall in no case exceed the sum of
P84,000.00, Philippine Currency.6[6]
To illustrate, the PCIC surety bonds are in the amounts
corresponding to down payments on each P.O., as follows:
Surety Bond No. 27547

To supply labor, materials, tools, supervision Surety Bond Purchase Units Total Cost Surety Amount
equipment, and other incidentals necessary for the No. Order Covered (equivalent to
fabrication and delivery of Twenty-five (25) Units Toll 50% down
Booth at designated Toll Plaza as per Purchase Order No. payment)
71024L, copy of which is attached as Annex A. This bond Bond No. P.O. No. 25 P2,100,000 P1,050,000
also guarantees the repayment of the down payment or
27547 71024L
whatever balance thereof in the event of failure on the

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 CIVIL PROCEDURE

Bond No. P.O. No. 2 P 168,000 P 84,000 claim or file any court action against the Surety after the
termination of FIFTEEN (15) DAYS from the time its cause
27546 71025L of action accrues.8[8] (Emphasis supplied.)

Both surety bonds also contain the following conditions: (1) the PNCC released two checks to Kalingo representing the down
liability of PCIC under the bonds expires on March 16, 1998; and (2) a payment of 50% of the total project cost, which were properly receipted
written extrajudicial demand must first be tendered to the surety, PCIC, by Kalingo.9[9] Kalingo in turn submitted the two PCIC surety bonds
within 15 days from the expiration date; otherwise PCIC shall not be securing the down payments, which bonds were accepted by PNCC.
liable thereunder and the obligee waives the right to claim or file any
court action to collect on the bond. The following stipulation appears in
the last paragraph of these bonds:
On March 3, 4, and 5, 1998, Kalingo made partial/initial delivery of
four units of tollbooths under P.O. No. 71024L. However, the tollbooths
delivered were incomplete or were not fabricated according to PNCC
The liability of PHILIPPINE CHARTER INSURANCE
CORPORATION under this bond will expire on March 16,
1998. Furthermore, it is hereby agreed and understood
that PHILIPPINE CHARTER INSURANCE CORPORATION will
not be liable for any claim not presented to it in writing
within FIFTEEN (15) DAYS from the expiration of this
bond, and that the Obligee hereby waives its right to

20
 CIVIL PROCEDURE

specifications. Kalingo failed to deliver the other 23 tollbooths up to the

time of filing of the complaint; despite demands, he failed and refused to
PCIC, in its answer, argued that the partial delivery of four out of
comply with his obligation under the POs.
the 25 units of tollbooth by Kalingo under P.O. No. 71024L should reduce
Kalingo's obligation.

On March 9, 1998, six days before the expiration of the surety

bonds and after the expiration of the delivery period provided for under
The RTC, by Decision of October 31, 2005, ruled in favor of PNCC
the award, PNCC filed a written extrajudicial claim against PCIC notifying
and ordered PCIC and Kalingo to jointly and severally pay the latter
it of Kalingos default and demanding the repayment of the down
P1,050,000.00, representing the value of PCIC Bond No. 27547, plus legal
payment on P.O. No. 71024L as secured by PCIC Bond No. 27547, in the
interest from last demand, and P50,000.00 as attorney's fees.
amount of P1,050,000.00. The claim went unheeded despite repeated
Reconsideration of the trial court's decision was denied. The trial court
demands. For this reason, on April 24, 2001, PNCC filed with the Regional
made no ruling on PCICs liability under PCIC Bond No. 27546, a claim
Trial Court (RTC), Mandaluyong City a complaint for collection of a sum of
that was not pleaded in the complaint.
money against Kalingo and PCIC.10[10] PNCC's complaint against PCIC
called solely on PCIC Bond No. 27547; it did not raise or plead collection
under PCIC Bond No. 27546 which secured the down payment of
P84,000.00 on P.O. No. 71025L. On appeal, the CA, by Decision11[11] of January 7, 2008, held that
the RTC erred in ruling that PCIC's liability is limited only to the payment

21
 CIVIL PROCEDURE

of P1,050,000.00 under PCIC Bond No. 27547 which secured the down The Court, by Resolution of December 17, 2008, denied due
payment on P.O. No. 71024L. The appellate court held that PCIC, as course to the petition.14[14] Hence, the PCIC filed the present motion for
surety, is liable jointly and severally with Kalingo for the amount of the reconsideration submitting the following issues for our resolution:
two bonds securing the two POs to Kalingo; thus, the CA also held PCIC
liable under PCIC Bond No. 27546 which secured the P84,000.00 down
payment on P.O. No. 71025L.
I. WHETHER THE APPELLATE COURT ERRED IN
RULING THAT PCIC SHOULD ALSO BE HELD LIABLE
UNDER BOND NO. 27546, COLLECTION UNDER
WHICH WAS NOT SUBJECT OF RESPONDENT PNCC's
COMPLAINT FOR COLLECTION OF SUM OF MONEY;
Reconsideration having been denied by the appellate court in its
Resolution12[12] of October 29, 2008, the PCIC lodged a petition for II. WHETHER THE CHECKS ISSUED IN 1997 BY
RESPONDENT PNCC TO KALINGO WERE GIVEN 10
review on certiorari13[13] before this Court.
MONTHS PRIOR TO THE AWARD OF THE PROJECT
AND AMOUNTS TO CONCEALMENT OF MATERIAL
FACT VITIATING THE SURETY BONDS ISSUED BY THE
PETITIONER; and

III. WHETHER THE APPELLATE COURT ERRED IN

HOLDING PETITIONER PCIC LIABLE FOR
ATTORNEY'S FEES.

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 CIVIL PROCEDURE

The PCIC presents, as its first issue, the argument that [w]hen the
Court of Appeals rendered judgment on Bond No. 27546, which was not
subject of respondent's complaint, on the ground that respondent was
The second issue is a factual matter not proper in proceedings
incorrect in not filing suit for Bond No. 27546, the Court of Appeals
before this Court. The PCICs position that the checks were issued 10
virtually acted as lawyer for respondent.16[16]
months prior to the award had already been rejected by both the RTC
and the CA; both found that the year 1997 appearing on the checks was a
mere typographical error which should have been written as 1998.15[15]
We find the PCICs position meritorious.
Consequently, we shall no longer discuss the PCIC's allegation of material
concealment; the factual findings of the RTC, as affirmed by the CA, are
conclusive on us.
The issue before us calls for a discussion of a courts basic
appreciation of allegations in a complaint. The fundamental rule is that
reliefs granted a litigant are limited to those specifically prayed for in the
Our consideration shall focus on the remaining two issues.
complaint; other reliefs prayed for may be granted only when related to
the specific prayer(s) in the pleadings and supported by the evidence on
record. Necessarily, any such relief may be granted only where a cause of

23
 CIVIL PROCEDURE

action therefor exists, based on the complaint, the pleadings, and the breach of the obligation of the defendant to the plaintiff
for which the latter may maintain an action for recovery of
evidence on record.
damages or other appropriate relief.18[18]

Section 2, Rule 2 of the 1997 Rules of Civil Procedure defines a Only upon the occurrence of the last element does a cause of
cause of action as the act or omission by which a party violates the right action arise, giving the plaintiff the right to maintain an action in court for
of another. It is the delict or the wrongful act or omission committed by recovery of damages or other appropriate relief.19[19]
the defendant in violation of the primary right of the plaintiff.17[17] Its
essential elements are as follows:

Each of the surety bonds issued by PCIC created a right in favor of

PNCC to collect the repayment of the bonded down payments made on
1. A right in favor of the plaintiff by whatever means and
the two POs if contractor Kalingo defaults on his obligation under the
under whatever law it arises or is created;
award to fabricate and deliver to PNCC the tollbooths contracted for.
2. An obligation on the part of the named defendant to
Concomitantly, PCIC, as surety, had the obligation to comply with its
respect or not to violate such right; and

3. Act or omission on the part of such defendant in

violation of the right of the plaintiff or constituting a

24
 CIVIL PROCEDURE

undertaking under the bonds to repay PNCC the down payments the extinguishing PCICs liability and constitutes a waiver by PNCC of the
latter made on the POs if Kalingo defaults. right to claim or sue under the bond.

It must be borne in mind that each of the two bonds is a distinct Liability on a bond is contractual in nature and is ordinarily
contract by itself, subject to its own terms and conditions. They each restricted to the obligation expressly assumed therein. We have
contain a provision that the surety, PCIC, will not be liable for any claim repeatedly held that the extent of a surety's liability is determined only by
not presented to it in writing within 15 days from the expiration of the the clause of the contract of suretyship and by the conditions stated in
bond, and that the obligee (PNCC) thereby waives its right to claim or file the bond. It cannot be extended by implication beyond the terms of the
any court action against the surety (PCIC) after the termination of 15 days contract.20[20] Equally basic is the principle that obligations arising from
from the time its cause of action accrues. This written claim provision contracts have the force of law between the parties and should be
creates a condition precedent for the accrual of: (1) PCICs obligation to complied with in good faith.21[21] Nothing can stop the parties from
comply with its promise under the particular bond, and of (2) PNCC's establishing stipulations, clauses, terms and conditions as they may deem
right to collect or sue on these bonds. PCICs liability to repay the convenient, provided they are not contrary to law, morals, good customs,
bonded down payments arises only upon PNCC's filing of a written claim
notifying PCIC of principal Kalingos default and demanding collection
under the bond within 15 days from the bonds expiry date. PNCCs
failure to comply with the written claim provision has the effect of

25
 CIVIL PROCEDURE

public order, or public policy.22[22] Here, nothing in the records shows

the invalidity of the written claim provision; therefore, the parties must
Hence, the trial courts decision finding PCIC liable solely under
strictly and in good faith comply with this requirement.
PCIC Bond No. 27547 is correct not only because collection under the
other bond, PCIC Bond No. 27546, was not raised or pleaded in the
complaint, but for the more important reason that no cause of action
The records reveal that PNCC complied with the written claim
arose in PNCCs favor with respect to this bond. Consequently, the
provision, but only with respect to PCIC Bond No. 27547. PNCC filed an
appellate court was in error for including liability under PCIC Bond No.
extrajudicial demand with PCIC informing it of Kalingos default under the
27546.
award and demanding the repayment of the bonded down payment on
P.O. No. 71024L. Conversely, nothing in the records shows that PNCC
ever complied with the provision with respect to PCIC Bond No. 27546.
PNCC insists that conformably with the ruling of the CA, it should
Why PNCC complied with the written claim provision with respect to
be entitled to collection under PCIC Bond No. 27546, although collection
PCIC Bond No. 27547, but not with respect to PCIC Bond No. 27546, has
thereunder was not specifically raised or pleaded in its complaint,
not been explained by PNCC. Under the circumstances, PNCCs cause of
because the bond was attached to the complaint and formed part of the
action with respect to PCIC Bond No. 27546 did not and cannot exist,
records. Also, considering that PCICs liability as surety has been duly
such that no relief for collection thereunder may be validly awarded.
proven before the trial and appellate courts, PNCC posits that it is entitled
to repayment under PCIC Bond No. 27546.

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 CIVIL PROCEDURE

PNCC might be alluding to Section 2(c), Rule 7 of the Rules of normally enables the court to award reliefs supported by the complaint
Court, which provides that a pleading shall specify the relief sought, but or other pleadings, by the facts admitted at the trial, and by the evidence
may add a general prayer for such further or other reliefs as may be adduced by the parties, even if these reliefs are not specifically prayed for
deemed just and equitable. Under this rule, a court can grant the relief in the complaint. We cannot, however, grant PNCC the other relief of
warranted by the allegation and the proof even if it is not specifically recovering under PCIC Bond No. 27546 because of the respect due the
sought by the injured party;23[23] the inclusion of a general prayer may contractual stipulations of the parties. While it is true that PCICs liability
justify the grant of a remedy different from or together with the specific under PCIC Bond No. 27546 would have been clear under ordinary
remedy sought,24[24] if the facts alleged in the complaint and the circumstances (considering that Kalingo's default under his contract with
evidence introduced so warrant.25[25] PNCC is now beyond dispute), it cannot be denied that the bond contains
a written claim provision, and compliance with it is essential for the
accrual of PCICs liability and PNCCs right to collect under the bond.

We find PNCCs argument to be misplaced. A general prayer for

other reliefs just and equitable appearing on a complaint or pleading
As already discussed, this provision is the law between the parties
on the matter of liability and collection under the bond. Knowing fully
well that PCIC Bond No. 27546 is a matter of record, duly proven and
susceptible of the courts scrutiny, the trial and appellate courts must
respect the terms of the bond and cannot just disregard its terms and
conditions in the absence of any showing that they are contrary to law,

27
 CIVIL PROCEDURE

morals, good customs, public order, or public policy. For its failure to file GRANTED. The assailed Court of Appeals Decision of January 7, 2008 and
a written claim with PCIC within 15 days from the bonds expiry date, Resolution of October 29, 2008 are hereby AFFIRMED with
PNCC clearly waived its right to collect under PCIC Bond No. 27546. That, MODIFICATION, deleting petitioner PCIC's liability under PCIC Bond No.
wittingly or unwittingly, PNCC did not collect under one bond in favor of 27546. All other matters in the assailed Court of Appeals decision and
calling on the other creates no other conclusion than that the right to resolution are AFFIRMED.
collect under the former had been lost. Consequently, PNCCs cause of
action with respect to PCIC Bond No. 27546 cannot juridically exist and no
relief therefore may be validly given. Hence, the CA invalidly rendered SO ORDERED.
judgment with respect to PCIC Bond No. 27546, and its award based on CASE #4
this bond must be deleted.
MARIANO, ESTRELLA, RAMON, MA. G.R. No. 142627
DULCE, CARMEL, and STELLA MARIS, all
On the third issue, we hold that PCIC should be held liable for the surnamed NAJARRO,
attorney's fees PNCC incurred in bringing suit. PCICs unjust refusal to pay
Petitioners,
despite PNCCs written claim compelled the latter to hire the services of
an attorney to collect on PCIC Bond No. 27547.

- versus -
WHEREFORE, premises considered, we SET ASIDE our Resolution
of December 17, 2008 and GRANT the present motion for
reconsideration. The petition for review on certiorari is PARTLY
28
 CIVIL PROCEDURE

MARIANO, ESTRELLA, RAMON, MA. SANDOVAL-GUTIERREZ,

DULCE, CARMEL, and STELLA MARIS, all
JARSON DEVELOPMENT CORPORATION, surnamed NAJARRO, CORONA,
JOSE P. MABUGAT and ELISEO C. GALANG,
Respondents. AZCUNA, and
Respondents.
LEONARDO-DE CASTRO, JJ.

x----------------------------------------------x
Promulgated:

JARSON DEVELOPMENT CORPORATION

January 28, 2008
AND JOSE P. MABUGAT,
x-----------------------------------------------------------------------------------------x
Petitioners, G.R. No. 172750
DECISION

SANDOVAL-GUTIERREZ, J.:
Present:
- versus -

PUNO, C.J., Chairperson, For our resolution are two (2) consolidated Petitions for Review
on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as

29
 CIVIL PROCEDURE

amended, seeking to nullify the following: (I) in G.R. No. 142627, the The other petitioners, Ramon, Ma. Dulce, Carmel, and Stella
Resolutions26[1] dated September 10, 1999 and February 22, 2000 of Maris, all surnamed Najarro, are the legitimate children of spouses
the Court of Appeals in CA-G.R. CV No. 60680; and (II) in G.R. No. Najarro. They are the registered co-owners of Lot 1394-C. Except Ma.
172750, the Resolutions27[2] dated March 17, 2006 and May 5, 2006 of Dulce, all of them together with their respective spouses and children,
the Court of Appeals, Cebu City, in CA-G.R. CV No. 60680. reside in the residential building of spouses Najarro.

G.R. No. 142627 Respondent Jarson Development Corporation (JDC), on the other
hand, is a corporation registered and existing under Philippine laws. It is
engaged in the business, among others, of acquiring and managing real
Spouses Mariano and Estrella Najarro (spouses Najarro),
estate, buildings and other structures.
petitioners, are the registered owners of a residential building
constructed on Lot 1394-C of the Banilad Friar Lands located on V. Sotto
Among JDCs various projects is the development of Richmond
Street, Cebu City.

Plaza, a 12-story commercial building located at Lot 1394-B, also of the

Banilad Friar Lands, adjacent to Lot 1394-C owned by petitioners.

30
 CIVIL PROCEDURE

Jose P. Mabugat and Engineer Eliseo C. Galang, respondents, are On March 1, 1994, respondent Mabugat wrote petitioners stating
the project designer and the project engineer, respectively, of the that the wet and loose condition of their soil was the cause of the
Richmond Plaza project. damage to their properties. JDC refused to pay.

Sometime in November 1993, respondent JDC started excavation Meanwhile, the Office of the Building Official issued a Stop-Work
and construction works on the Richmond Plaza project. However, during Order to respondents because their on-going excavation works violated
the excavation, slippages or cave-ins of soil occurred on Lot 1394-C the Building Code and greatly affected the safety of the adjacent
causing massive cracks on the wall and floor of petitioners residential residents, including petitioners.
building. It became unsafe for human habitation. Hence, petitioners left
the same.
Respondents, however, continuously refused to comply with the
said Order.
Sometime in February, 1994, a conciliation meeting was held
between petitioners and respondent Mabugat. During this meeting, he
On May 26, 1994, petitioners filed with the Regional Trial Court,
assured petitioners that JDC will repair their building and restore the
Branch 58, Cebu City, a petition for injunction with damages against
foundation of the soil that caved-in and pay damages in case of any
respondents, docketed as Civil Case No. 60680.
defect in the construction of their building.

Before the start of the hearing on July 1, 1994, the parties agreed
to dispense with the issue of injunction in view of respondents

31
 CIVIL PROCEDURE

undertaking to reconstruct petitioners damaged residential building and permit and to secure the necessary Certificate of
Occupancy, all at the expense of the respondents. A copy
to completely restore the foundation of the soil that caved-in to its
of the plans, specifications and bills of materials shall be
original condition. furnished the petitioners who may make the necessary
suggestions thereabout to the Office of the Building
Official. That the respondents and/or the contractor of the
On July 11, 1994, the trial court issued an Order reflecting the building hired by the respondents to construct and/or
reconstruct the damaged residential building of the
agreement between the parties, pertinent portions of which read:
petitioners should restore the foundation or the soil which
caved-in during the start of the construction and/or
excavation of the respondents building, Richmond Plaza,
xxx which is only about six (6) meters from the petitioners
residence, and the soil/foundation should be filled up and
Before the start of the hearing of the urgent restored to its original condition and in accordance with
motions on July 1, 1994, the Court inquired from the the standard requirements. That respondents bind
parties why the Memorandum of Agreement, copy of themselves jointly and severally to pay the petitioners for
which was attached to their motions, was not pushed any damage in case of any defect in the construction of
through or not signed, and it was during the exchange of petitioners residence and or the collapse or any damage
words between the parties and counsels that they have thereof as a result and by reason of the foundation or
finally agreed to dispense with the issue on the injunction, condition of the soil.
leaving the issue on damages alone to be litigated
between the parties in the instant action, because they
have arrived at certain agreements, thus: the respondents By virtue of the foregoing agreements, the issue on
shall restore the damaged building or residence of the the injunction has been dispensed with, correspondingly,
petitioners by preparing the necessary plans, specifications the temporary restraining order was deemed lifted.
and bills of materials, and to submit the same to the Office
of the Building Official of Cebu City for the issuance of a

32
 CIVIL PROCEDURE

Compliance with the foregoing agreement is of November 23, 1995 on the ground that the motion should be resolved
hereby enjoined.
when the case shall be decided.

On October 19, 1994, after the pre-trial conference, the trial court The court conducted trial to determine only the issue of damages.
issued a pre-trial Order stating that: Thereafter, it rendered its Decision, the dispositive portion of which
reads:

During the hearing of the issuance of a writ of WHEREFORE, premises considered, judgment is
preliminary injunction, the parties agreed to dispense with hereby rendered in favor of the plaintiffs and against the
the issue on injunction, hence, the only issue to be defendants by ordering the defendants to pay jointly and
resolved in this case is whether or not the plaintiffs are severally the plaintiffs the sum of P500,000.00 as moral
entitled to recover damages in accordance with their damages, the sum of P200,000.00 as exemplary damages,
complaint and the defendants in accordance with their the sum of P50,000.00 as attorneys fees, the sum of
counterclaim. P5,000.00 as litigation expenses, and the costs of the suit.
The counterclaim is hereby dismissed.
Further, the defendants are hereby ordered to do
and perform all at the expense of defendants, the
On August 28, 1995, petitioners filed a motion for execution of the following:
July 11, 1994 Order. However, it was denied by the trial court in its Order i. To
complete the restoration of the foundation
of the soil which caved-in to its original
33
 CIVIL PROCEDURE

condition and in accordance with the On appeal by respondents, the Court of Appeals,28[3] on February
standard requirements;
17, 2005, rendered its Decision affirming the trial courts Decision with
ii. Prepar
modification in the sense that the award of moral damages is reduced to
e the plans, specifications and bills of
material for the restoration of the damaged P300,000.00 from P500,000.00.
residential building of the plaintiffs;
iii. Submit
said plans, specifications and bills of On April 30, 1999, while the appeal was still pending in the Court
materials to the Office of the Building of Appeals, petitioners filed a motion for execution pending appeal.
Official of Cebu City;
iv. Secure
the necessary permit from the Office of the On September 10, 1999, the appellate court denied petitioners
Building Official of Cebu City as well as the
motion for execution pending appeal, ratiocinating as follows:
necessary Certificate of Occupancy; and
v. Constr
uct and/or reconstruct the damaged Appellees pray for the issuance of an execution
residential building of the plaintiffs in pending appeal on the grounds that appellants have
accordance with the approved plans, succeeded in delaying the appeal, that both appellees are
specifications and bills of materials. of advanced age and suffering from debilitating diseases,
and that the appellants have disposed of some of their
properties, thus, threatening the judgment on appeal to be
ineffectual.

34
 CIVIL PROCEDURE

As records would show, the herein contested may not be liable for moral damages and
decision, inter-alia, orders the payment of moral damages exemplary damages. Or as in some cases
together with attorneys fees wherein execution pending elevated to the Supreme Court, the awards
appeal are not allowed (Engineering Construction Inc. v. may be reduced.
NPC, 163 SCRA 9 [1988]; Valencia v. CA, 184 SCRA 561
[1990]; Echauz v. CA, 199 SCRA 381 [1991]; RCPI v. Lantin,
[985]). The said High Court: Accordingly, the Motion for Execution Pending
Appeal dated April 28, 1999 is DENIED.

xxx The execution of any award for

moral and exemplary damages is dependent SO ORDERED.
on the outcome of the main case. Unlike
actual damages for which the petitioners
may clearly be held liable if they breach a On February 22, 2000, the Court of Appeals denied petitioners
specific contract and the amounts of which motion for reconsideration.
are fixed and certain, liabilities with respect
to moral and exemplary damages as well as
the exact amounts remain uncertain and
Hence, this petition.
indefinite pending resolution by the
Intermediate Appellate Court and
eventually the Supreme Court. The
existence of the factual bases of these types We rule that the petition has become moot as shown by the
of damages and their causal relation to the following events:
petitioners act will have to be determined in
the light of the assignments of errors on
appeal. It is possible that the petitioners,
after all, while liable for actual damages
35
 CIVIL PROCEDURE

On December 12, 2005, petitioners filed a Motion for Entry of They contend that they did not receive a copy of the Decision, hence, it
Finality of Judgment. Respondents filed their Opposition thereto alleging did not attain finality as against them.
that they and their counsel did not receive a copy of the February 17,
2005 Decision of the Court of Appeals.
However, the Court of Appeals found that copies of the Notice of
Judgment and its Decision were sent through registered mail to
On March 17, 2006, the appellate court rendered a Resolution petitioners counsel at M.B. Mahinay Bldg. (3rd Floor), F. Sotto St., Cebu
granting petitioners Motion for Entry of Finality of Judgment and City. Said counsel received the same. The latter admitted that through
declaring that its Decision dated February 17, 2005 has become final and inadvertence, he did not file with the Court of Appeals a formal notice of
executory and ordering that such judgment be entered in the book of his change of address.
entries of judgments.

The Court of Appeals, in granting respondents Motion for Entry of

Finality of Judgment, held:
G.R. No. 172750

Section 3, Rule 7 of the Rules of Court pertinently provides:

Sec. 3. Signature and address. Every

In this case, JDC and Jose P. Mabugat, petitioners, assail the pleading must be signed by the party or
counsel representing him, stating in either
Resolution of the Court of Appeals dated March 17, 2006 declaring that case his address which should not be a post
office box.
its Decision dated February 17, 2005 has become final and executory.

36
 CIVIL PROCEDURE

xxx when the same was served to him in his old address, which
is the address of record when the said judgment was
Counsel who deliberately files an
promulgated, binds defendants-appellants.
unsigned pleading, or signs a pleading in
violation of this Rule or alleges scandalous xxx
or indecent matters therein, or fails to
promptly report to the court a change of The service of our Decision to defendants-
his address, shall be subject to appropriate appellants counsel at his address of record on March 2,
disciplinary action. 2005 was valid. It follows that the reglementary period of
fifteen days within which the defendants-appellants may
file a motion for reconsideration or a petition for review
Clearly, it is the duty of the counsel to promptly on certiorari to the Supreme Court on Our Decision shall
inform the court of a change of his address. The be counted from such date or defendants-appellants had
contention of defendants-appellants counsel that his only until March 17, 2005 to file a motion for
failure to inform the Court of his change of address was reconsideration or petition for review on certiorari to the
due to the fault of his legal secretary in not including the Supreme Court. Apparently, when plaintiffs-appellees filed
instant case in the inventory of his cases is a lame excuse the motion for entry of finality of judgment on December
and deserves no consideration. It has to be stressed that it 12, 2005, Our Decision had already attained finality as no
devolves upon every counsel to take full responsibility in motion for reconsideration or petition for review on
supervising the work in his office with respect to all the certiorari to the Supreme Court was ever filed by
cases he handles and he should not delegate this defendants-appellants within the reglementary period, or
responsibility to his legal secretary. on or before March 17, 2005.
xxx

Sad to say, the negligence of defendants-appellants xxx

counsel in failing to inform the Court of his change of
address which resulted to his non-receipt of Our Decision

37
 CIVIL PROCEDURE

Suffice it to state at this point that the Court of Appeals did not err
in granting petitioners motion. They and their counsel are deemed to
ALMA B. RUSSEL, G.R. No. 184542
have received a copy of its Decision. Indeed, the latters failure to file with
the Court of Appeals a notice of change of address is fatal to petitioners Petitioner,
case. Present:

CORONA, J.,
WHEREFORE, in G.R. No. 142627, we DENY the petition filed by
Mariano Najarro, et al., the same being MOOT. Chairperson,

- versus - VELASCO, JR.,

In G.R. No. 172750, we DENY the petition filed by Jarson NACHURA,

Development Corporation and Jose Mabugat and AFFIRM the assailed
PERALTA, and
Resolutions of the Court of Appeals, Cebu City dated March 17, 2006 and
MENDOZA, JJ.
May 5, 2006 in CA-G.R. CV No. 60680. Costs against petitioners.

SO ORDERED. TEOFISTA EBASAN and AGAPITO AUSTRIA, Promulgated:

Respondents.
CASE #5

38
 CIVIL PROCEDURE

April 23, 2010 August 26, 200830[2] Resolutions of the Court of Appeals (CA) in CA-G.R.
SP No. 01675.

x------------------------------------------------------------------------------------x

The petition stems from a complaint for forcible entry filed by

petitioner Alma B. Russel against respondents Teofista Ebasan and

RESOLUTION Agapito Austria. The Municipal Trial Court in Cities (MTCC) of Iligan City
heard the ejectment proceedings and rendered judgment on November
23, 2006 in favor of petitioner.31[3] The trial court ordered respondents
to vacate the property involved and to pay attorneys fees and costs.32[4]
NACHURA, J.:

Before the Court is a petition for review on certiorari under Rule

45 of the Rules of Court, questioning the June 18, 200729[1] and the

39
 CIVIL PROCEDURE

Prejudiced by the ruling, respondents appealed to the Regional filing and docket fees.35[7] She consequently filed via registered mail her
Trial Court (RTC). The RTC, in its March 28, 2007 Decision,33[5] reversed petition for review with the appellate court on May 15, 2007.36[8]
the ruling of the MTCC and ordered the dismissal of the complaint.

In the assailed June 18, 2007 Resolution,37[9] the CA dismissed

Petitioner received her copy of the RTC decision on April 13, the appeal on the following grounds:
2007.34[6] Inclined to appeal the adverse ruling to the CA, petitioner, on
April 20, 2007, filed a motion for an extension of 15 days from the expiry
of the reglementary period for the filing of a petition for review. 1. The petition is filed out of time, in violation of Sec. 1,
Petitioner attached to her motion postal money orders representing the Rule 42. Even if petitioners Motion for Extension of
Time to File Petition for Review were granted, the
Petition would have still been filed six (6) days late
from the requested extension of time.

40
 CIVIL PROCEDURE

2. There is no Written Explanation why the Petition was She pointed out in her motion that the petition was filed within the
filed by mail instead of the preferred mode of personal
extended reglementary period. She also explained that her office clerk
filing, as is required under Sec. 11, Rule 13.
inadvertently failed to attach the page containing the explanation why
3. The Verification and Certification page is defective,
filing by registered mail was resorted to. Petitioner also begged the
since there is no statement and therefore no assurance
that the allegations in the Petition are based on appellate courts indulgence to accept the verification because only the
authentic records, in violation of Sec. 4, Rule 7.
phrase based on authentic records was missing in the same. She claimed
4. Pertinent documents such as the Complaint and that this was merely a formal requisite which does not affect the validity
Answer filed before the MTCC, which are material
or efficacy of the pleading. She then pleaded for liberality in the
portions of the record referred to in the Petition are
not attached, in violation of Sec. 2(d), Rule 42.38[10] application of the rules of procedure and for the consequent admission of
her amended petition containing the written explanation, the corrected
verification, and the certified true copies of the complaint and the answer
filed before the trial court.40[12]
Petitioner received her copy of the June 18, 2007 Resolution on
July 18, 2007.39[11] On July 27, 2007, petitioner filed by registered mail
her motion for reconsideration and admission of her amended petition.
The appellate court, however, in the assailed August 26, 2008
Resolution,41[13] denied petitioners motion. It ruled that the motion for

41
 CIVIL PROCEDURE

reconsideration was filed only on October 4, 2007, or 63 days after the

expiry of the reglementary period for the filing thereof.
It must be noted that petitioner received her copy of the RTC
decision on April 13, 2007. Following the Rules of Court, she had 15 days
or until April 28, 2007 to file her petition for review before the CA.
Aggrieved, petitioner elevated the matter to this Court via the
Section 1 of Rule 42 provides:
instant petition for review on certiorari.

Sec. 1. How appeal taken; time for filing.A party

desiring to appeal from a decision of the Regional Trial
Court rendered in the exercise of its appellate jurisdiction
may file a verified petition for review with the Court of
The Court grants the petition and remands the case to the
Appeals, paying at the same time to the clerk of said court
appellate court for disposition on the merits. the corresponding docket and other lawful fees, depositing
the amount of P500.00 for costs, and furnishing the
Regional Trial Court and the adverse party with a copy of
the petition. The petition shall be filed and served within
fifteen (15) days from notice of the decision sought to be
Petitioners petition for review (under Rule 42) and motion for reviewed or of the denial of petitioners motion for new
reconsideration before the appellate court were filed well within the trial or reconsideration filed in due time after judgment.
Upon proper motion and the payment of the full amount
reglementary period for the filing thereof. of the docket and other lawful fees and the deposit for
costs before the expiration of the reglementary period, the
Court of Appeals may grant an additional period of fifteen
(15) days only within which to file the petition for review.

42
 CIVIL PROCEDURE

No further extension shall be granted except for the most the act or event from which the designated period of time
compelling reason and in no case to exceed fifteen (15) begins to run is to be excluded and the date of
days. performance included. If the last day of the period, as thus
computed, falls on a Saturday, a Sunday, or a legal holiday
in the place where the court sits, the time shall not run
until the next working day.
On April 20, 2007, petitioner filed before the CA, via registered
mail, her motion for extension of time to file the petition for review. She
pleaded in her motion that she be granted an additional 15 days, counted Therefore, when petitioner filed her petition for review with the
from the expiry of the reglementary period. Petitioner likewise attached appellate court on May 15, 2007, the same was well within the extended
to her motion postal money orders representing the docket fees. period for the filing thereof.

Fifteen days from April 28, 2007 would be May 13, 2007. This was, Petitioners motion for reconsideration was likewise filed on time.
however, a Sunday. May 14, 2007, the following day, was a legal She received a copy of the June 18, 2007 CA Resolution on July 18, 2007.
holidaythe holding of the national and local elections. Section 1 of Rule Under Section 1 of Rule 52, she had 15 days from notice, or until August
22 states: 2, 2007, to file a motion for reconsideration.42[14] Petitioner filed by
registered mail her motion for reconsideration on July 27, 2007. The fact

Sec. 1. How to compute time.In computing any

period of time prescribed or allowed by these Rules, or by
order of the court, or by any applicable statute, the day of
43
 CIVIL PROCEDURE

of mailing on the said date is proven by the registry return receipt,43[15] As to the CAs dismissal of the petition for review on the ground
the affidavit of service,44[16] and the certification of the Office of the that petitioner failed to attach a written explanation for non-personal
Postmaster of Iligan City.45[17] Section 3, Rule 13 of the Rules of filing, the Court finds the same improper. Iligan City, where petitioner
Court46[18] provides that if a pleading is filed by registered mail, then the resides and where her counsel holds office, and Cagayan de Oro City,
date of mailing shall be considered as the date of filing. It does not matter where the concerned division of the CA is stationed, are separated by a
when the court actually receives the mailed pleading. Thus, in this case, considerable distance. The CA, in the exercise of its discretion, should
as the pleading was filed by registered mail on July 27, 2007, within the have realized that it was indeed impracticable for petitioner to personally
reglementary period, it is inconsequential that the CA actually received file the petition for review in Cagayan De Oro City. Given the obvious
the motion in October of that year. time, effort and expense that would have been spent in the personal
filing of the pleadings in this case, the written explanation why service
had not been done personally, as required by Section 11 of Rule 13, may
be considered as superfluous.47[19]

Relative to the defective verification, the Court excuses the same.

The purpose of the verification is to secure an assurance that the
allegations in the petition have been made in good faith, or are true and

44
 CIVIL PROCEDURE

correct and not merely speculative. The requirement is simply a condition principle that rules of procedure are mere tools designed to facilitate the
affecting the form of pleadings and non-compliance therewith is neither attainment of justice and that strict and rigid application of rules which
jurisdictional nor does it render the pleading fatally defective.48[20] would result in technicalities that tend to frustrate rather than promote
Here, the perceived defect is excusable and does not justify a dismissal of substantial justice must always be avoided. It is a far better and wiser
the petition. In any case, petitioner, in her subsequent pleading, course of action for the Court to excuse a technical lapse and afford the
submitted a corrected verification. The same degree of liberality should parties a conscientious review of the case in order to attain the ends of
apply to petitioners failure to attach a copy of the complaint and answer justice, rather than dispose of it on a technicality and cause grave
filed before the MTCC in her petition for review. After all, petitioner injustice to the parties, giving a false impression of speedy disposal of
substantially complied with the requirement when she filed her amended cases which actually results in more delay, if not in an outright
petition. miscarriage of justice.49[21]

In sum, the Court finds that the CA erred in dismissing petitioners

appeal. The appellate court should have been more prudent in computing
WHEREFORE, premises considered, the petition is GRANTED. The
the reglementary period for the filing of petitions. The CA could have
instant case is REMANDED to the Court of Appeals for disposition on the
been more liberal in the application of the Rules considering that, in this
merits.
case, the MTCC and the RTC arrived at conflicting rulings, necessitating a
thorough review of the merits of the case. This is in keeping with the

45
 CIVIL PROCEDURE

SO ORDERED. RAMOS, ROBERTO NOVELLA, RUBEN CONDE, DANILO POLISTICO,

DOMINGO MENDOZA, FERNANDO SAN GABRIEL, AND DOMINGO ROTO,
Petitioners,
CASE # 6
vs.
NEW SAN JOSE BUILDERS, INC., Respondent.
G.R. No. 192650 October 24, 2012
DECISION
FELIX MARTOS, JIMMY ECLANA, RODEL PILONES, RONALDO NOVAL,
JONATHAN PAILAGO, ERNESTO MONTANO, DOYONG JOSE, DEO
MENDOZA, J.:
MAMALATEO, ROSELO MAGNO, BONNIE SANTILLAN, ARSENIO
GONZALES, ALEX EDRADAN, MICHAEL ERASCA, MARLON MONTANO,
Questioned in this Petition for Review is the July 31, 2009 Decision1 of
VICENTE OLIVEROS, REYNALDO LAMBOSON, DOMINGO ROTA, EDDIE
the Court of Appeals (CA) and its June 17, 2010 Resolution,2 which
ROTA, ZALDY OLIVEROS, ANTONIO NATIL, HERMIE BUISON, ROGER
reversed and set aside the July 30, 2008 Decision3 and October 28, 2008,
BUISON, MARIANO LAZATE, JUAN VILLABER, LIMUEL LLANETA, LITO
Resolution4 of the National Labor Relations Commission (NLRC); and
BANTILO, TERSO GARAY, ROWEL BESTOLO, JERRY YORTAS, PASTOR
reinstated the May 23, 2003 Decision5 of the Labor Arbiter (LA). The
PANTIG, GAVINO NICOLAS, RAFAEL VILLA, FELIX YORTAS, MELVIN
dispositive portion of the CA Decision reads:
GARAY, NEIL DOMINGUEZ REYNALDO EVANGELISTA, JR., JOSE RAMOS,
ELVIN ROSALES, JUN GRANEHO, DANNY ASPARES, SALVEDOR TONLOC, WHEREFORE, decision is hereby rendered, as follows:
ROLANDO EVANGELISTA, RICKY M. FRANCISCO, EDUARDO ALEGRIA,
SALVADOR SANTOS, GREG BISONIA, RUFO CARBILLO, MARVIN 1. Declaring the complainant Felix Martos was illegally dismissed and
MONTERO, DANILO BESSIRE, ALLAN CABALLERO, ORLANDO LIMOS, ordering respondent New San Jose Builders, Inc. to pay him his
EDGARDO BICLAR, MANDY MAMALATEO, ALFRED GAJO, ERIC separation pay, backwages, salary differentials, 13th month pay, service
CASTRENCE, ANTHONY MOLINA, JAIME SALIM, ROY SILVA, DANILO incentive leave pay, and attorney’s fees in the total amount of TWO
BEGORIE, PEPING CALISANA, ERIC RONDA, RUFO CARBANILLO, ROWEL HUNDRED SIXTY THOUSAND SIX HUNDRED SIXTY ONE PESOS and
BATA, RICARDO TOLENTINO, ARNEL ARDINEZ, FERDINAND R. ARANDIA, 50/1000 (P260, 661.50).
ROMEO R. GARBO, ANTONIO ROTA, REYNIELANDRE QUINTANILLA,
JOSELITO HILARIO, JIMMY CAMPANA, DANILO LIDO-AN, EMERSON The awards for separation pay, backwages and the corresponding
PENAFLOR, CESAR PABALINAS, JONATHAN MELCHOR, ALEX DAVID, attorney’s fees are subject to further computation until the decision in
EUTIQUIO ALCALA, MICHAEL CARANDANG, EDUARDO MANUEL, this case becomes final and executory; and
RAMON EVANGELISTA, RUBEN MENDOZA, ERNESTO MENDOZA, RICKY
46
 CIVIL PROCEDURE

2. Dismissing the complaints/claim of the other complainants without 3. Rodel Pilones February 1999 July 2001
prejudice.
4. Ronaldo Noval
SO ORDERED.6
5. Jonathan Pailago
The Facts 6. Ernesto Montaño 1998 2000

The factual and procedural antecedents were succinctly summarized by 7. Doyong Jose 1996 July 2001
the CA as follows:
8. Deo Mamalateo 1999 July 2001
New San Jose Builders, Inc. (hereafter petitioner) is a domestic 9. Roselo Magno 1994 November 2000
corporation duly organized and existing under the laws of the Philippines
and is engaged in the construction of road, bridges, buildings, and low 10. Bonnie Santillan 1998 July 2001
cost houses primarily for the government. One of the projects of 11. Arsenio Gonzales 1998 July 2001
petitioner is the San Jose Plains Project (hereafter SJPP), located in
Montalban, Rizal. SJPP, which is also known as the "Erap City" calls for the 12. Alex Edradan 1998 November 2001
construction of low cost housing, which are being turned over to the
National Housing Authority to be awarded to deserving poor families. 13. Michael Erasca 1999 July 2001
14. Marlon Montaño 1998 July 2001
Private respondents alleged that, on various dates, petitioner hired them
on different positions, hereunder specified: 15. Vicente Oliveros April 5, 1998 July 2001
16. Reynaldo Lamboson 1999 July 2001
1âwphi1
Names Date Employed Date Dismissed 17. Domingo Rota 1998

February 25, 18. Eddie Rota 1998

1. Felix Martos October 5, 1998
2002
19. Zaldy Oliveros 1999 July 2001
2. Jimmy Eclana 1999 July 2001
20. Antonio Natel 1998 July 2001

47
 CIVIL PROCEDURE

21. Hermie Buison 1998 July 2001 38. Elvis Rosales June 14, 1998
22. Roger Buison 1998 2000 39. Jun Graneho January 15, 1998
23. Mariano Lazate February 19, 1995 40. Danny Espares April 1999
24. Juan Villaber January 10, 1997 41. Salvador Tonloc January 8, 1998
25. Limuel Llaneta March 5, 1994 42. Rolando Evangelista March 15, 1998
26. Lito Bantilo May 1987 September 28,
43. Ricky M. Francisco
1991
27. Terso Garay October 3, 1986
44. Eduardo Alegria May 2001
28. Rowel Bestolo February 6, 1999
September 22,
29. Jerry Yortas May 1994 45. Salvador Santos
2000
30. Pastor Pantig April 11,1998 46. Greg Bisonia March 28, 1993
31. Gavino Nicolas June 20, 1997 47. Rufo Carbillo March 28, 1993
32. Rafael Villa March 9, 1998 48. Marvin Montero 1997 January 2001
33. Felix Yortas 1992 49. Danilo Bessiri 1997 2002
34. Melvin Garay February 2, 1994 50. Allan Caballero 1997 2002
35. Neil Dominguez February 16, 1998 51. Orlando Limos 1997 July 2001
36. Reynaldo Evangelista, 52. Edgardo Biclar 1997 July 2001
October 10, 1998
Jr.
53. Mandy Mamalatco 1989 2002
37. Jose Ramos October 10, 1998
54. Alfred Gajo 1998 July 2001
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 CIVIL PROCEDURE

55. Eric Castrence 1988 2002 72. Danilo Lido-An September 8, 1998
56. Anthony Molina 1997 2002 73. Emerson Peñaflor August 8,1998
57. Jaime Salin 74. Cesar Pabalinas
58. Roy Silva 1997 2002 75. Jonathan Melchor November 1998
59. Danilo V. Begorie 1994 January 2001 76. Alex David 1998
60. Peping Celisana 1999 July 2001 77. Eutiquio Alcala December 1999
61. Eric Ronda 1998 July 2001 78. Michael Carandang June 2000
62. Rufo Carbanillo 1998 July 2001 79. Eduardo Nanuel October 1999
63. Rowel Batta 1999 July 2001 80. Ramon Evangelista February 15, 1998
64. Ricardo Tolentino 1997 July 2001 81. Ruben Mendoza 1999 July 2001
65. Arnel Ardinez 1998 July 2001 82. Ernesto A. Mendoza 1998 July 2001
66. Ferdinand P. Arandia 1998 1999 83. Ricky Ramos 1999 July 2001
67. Romeo R. Garbo 1998 2000 84. Roberto Novella 1998 July 2001
68. Antonio Rota 1998 July 2001 85. Ruben Conde 1998 July 2001
69. Reynielande 86. Ramon Evangelista 1997 July 2001
February 28, 1998 2002
Quintanilla
87. Danilo Polistico 1999 July 2001
70. Joselito Hilario 1998 2002
88. Domingo Mendoza 1999 July 2001
71. Jimmy Campana August 15, 1998 August 2001
89. Fernando San Gabriel 1999 July 2001

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 CIVIL PROCEDURE

90. Domingo Roto 1994 July 2001 Petitioner denies that private respondents were illegally dismissed, and
alleged that they were project employees, whose employments were
automatically terminated upon completion of the project for which they
Sometime in 2000, petitioner was constrained to slow down and suspend were hired. On the other hand, private respondents claim that petitioner
most of the works on the SJPP project due to lack of funds of the National hired them as regular employees, continuously and without interruption,
Housing Authority. Thus, the workers were informed that many of them until their dismissal on February 28, 2002.
[would] be laid off and the rest would be reassigned to other projects.
Juan Villaber, Terso Garay, Rowell Batta, Pastor Pantig, Rafael Villa, and Subsequently, the three Complaints were consolidated and assigned to
Melvin Garay were laid off. While on the other hand, Felix Martos, Ariel Labor Arbiter Facundo Leda.7
Dominguez, Greg Bisonia, Allan Caballera, Orlando Limos, Mandy
Mamalateo, Eric Castrence, Anthony Molina, and Roy Silva were among Ruling of the Labor Arbiter
those who were retained and were issued new appointment papers to
their respective assignments, indicating therein that they are project As earlier stated, on May 23, 2003, the LA handed down a decision
employees. However, they refused to sign the appointment papers as declaring, among others, that petitioner Felix Martos (Martos) was
project employees and subsequently refused to continue to work. illegally dismissed and entitled to separation pay, backwages and other
monetary benefits; and dismissing, without prejudice, the
On different dates, three (3) Complaints for Illegal Dismissal and for complaints/claims of the other complainants (petitioners).
money claims were filed before the NLRC against petitioner and Jose
Acuzar, by private respondents who claimed to be the former employees Ruling of The NLRC
of petitioner, to wit:
Both parties appealed the LA decision to the NLRC. Petitioners appealed
1. Complaint dated March 11, 2002, entitled "Felix Martos, et al. that part which dismissed all the complaints, without prejudice, except
vs. NSJBI", docketed as NLRC-NCR Case No. 03-01639-2002; that of Martos. On the other hand, New San Jose Builders, Inc.
(respondent) appealed that part which held that Martos was its regular
2. Complaint dated July 9, 2002, entitled "Jimmy Campana, et al. employee and that he was illegally dismissed.
vs. NSJBI," docketed as NLRC-NCR Case No. 07-04969-2002;
On July 30, 2008, the NLRC resolved the appeal by dismissing the one
3. Complaint dated July 4, 2002, entitled "Greg Bisonia, et al. vs. filed by respondent and partially granting that of the other petitioners.
NSJBI", docketed as NLRC-NCR Case No. 07-02888-2002. The dispositive portion of the NLRC decision reads as follows:

50
 CIVIL PROCEDURE

WHEREFORE, premises considered, respondent’s appeal is DISMISSED for III) The public respondent has committed grave abuse of
lack of merit. The appeal of the complainants is, however, PARTIALLY discretion when it upheld the findings of the Labor Arbiter
GRANTED by modifying the 23 May 2003 Decision of the Labor Arbiter granting relief in favor of those supposed complainants who did
Facundo L. Leda, in that, respondents are ordered to reinstate all the not even render service to the petitioner and, hence, are not on
complainants to their former positions, without loss of seniority rights its payroll.
and with full backwages, counted from the time their compensation was
withheld from them until actual reinstatement. On July 31, 2009, the CA rendered a decision reversing and setting aside
the July 30, 2008 Decision and the October 28, 2008 Resolution of the
Respondents are likewise ordered to pay complainants their salary NLRC and reinstating the May 23, 2003 Decision of the LA. The dispositive
differentials, service incentive leave pay, and 13th month pay, using, as portion of the CA decision reads:
basis, the computation made on the claims of complainant Felix Martos.
WHEREFORE, premises considered, the present petition is hereby
In all other aspects, the Decision is AFFIRMED. GRANTED. Accordingly, the assailed Resolution dated October 28, 2008 of
public respondent National Labor Relations Commission is REVERSED and
SO ORDERED.8 SET ASIDE, and the Decision dated May 23, 2003 of Labor Arbiter Facundo
L. Leda, is hereby ordered reinstated.
Ruling Of The CA
SO ORDERED.9
After the denial of its motion for reconsideration, respondent filed before
the CA a petition for certiorari under Rule 65 of the 1997 Rules of Civil The CA explained that the NLRC committed grave abuse of discretion in
Procedure, as amended, raising the following issues: reviving the complaints of petitioners despite their failure to verify the
same. Out of the 102 complainants, only Martos verified the position
I) The public respondent has committed grave abuse of discretion paper and his counsel never offered any explanation for his failure to
in holding that the private respondents were regular employees secure the verification of the others. The CA also held that the NLRC
and, thus, have been illegally dismissed. gravely abused its discretion when it took cognizance of petitioners’
appeal because Rule 41, Section 1(h) of the 1997 Rules of Civil Procedure,
II) The public respondent has committed grave abuse of discretion as amended, which is suppletory, provides that no appeal may be taken
in reviving the complaints of the other private respondents from an order dismissing an action without prejudice.
despite their failure to verify the same.

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 CIVIL PROCEDURE

Nevertheless, the CA stated that the factual circumstances of Martos’ therein that he was a project employee and that his appointment would
employment and his dismissal from work could not equally apply to be co-terminus with the project.
petitioners because they were not similarly situated. The NLRC did not
even bother to look at the evidence on record and inappropriately Not in conformity with the CA decision, petitioners filed this petition
granted monetary awards to petitioners who had either denied having anchored on the following
filed a case or withdrawn the case against respondent. According to the
CA, the position papers should have covered only those claims and causes ASSIGNMENT OF ERRORS
of action raised in the complaint excluding those that might have been
amicably settled. A

With respect to Martos, the CA ruled that he was a regular employee of WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS AND
respondent and his termination was illegal. It explained that Martos THE LABOR ARBITER BELOW GRAVELY ERRED IN DISMISSING THE
should have been considered a regular employee because there was no COMPLAINTS OF THE NINETY NINE (99) PETITIONERS DUE TO
indication that he was merely a project employee when he was hired. To FAILURE OF THE LATTER TO VERIFY THEIR POSITION PAPER WHEN,
show otherwise, respondent should have presented his employment OBVIOUSLY, SUCH TECHNICALITY SHOULD NOT HAVE BEEN
contract for the alleged specific project and the successive employment RESORTED TO BY THEM AS IT WILL DEPRIVE THESE PETITIONERS
contracts for the different projects or phases for which he was hired. In OF THEIR PROPERTY RIGHT TO WORK.
the absence of such document, he could not be considered such an
employee because his work was necessary and desirable to the B
respondent’s usual business and that he was not required to sign any
employment contract fixing a definite period or duration of his WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS AND
engagement. Thus, Martos already attained the status of a regular THE LABOR ARBITER BELOW GRAVELY ERRED IN NOT ORDERING
employee. Moreover, the CA noted that respondent did not report the THE REINSTATEMENT OF PETITIONER MARTOS AND THE OTHER
termination of Martos’ supposed project employment to the Department 99 PETITIONERS WHEN, OBVIOUSLY, AND AS FOUND BY THEM,
of Labor and Employment (DOLE), as required under Department Order THE DISMISSAL OF MARTOS IS ILLEGAL WHICH WOULD WARRANT
No. 19. HIS REINSTATEMENT AND THE GRANT TO HIM OF FULL
BACKWAGES AND OTHER EMPLOYEES’ BENEFITS.
Being a regular employee, the CA concluded that he was constructively
dismissed when he was asked to sign a new appointment paper indicating C

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 CIVIL PROCEDURE

WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS act of violating labor standard laws, the minimum wage law and the 13th
GRAVELY ERRED IN NOT ORDERING THE RESPONDENTS TO PAY month pay law.
THE PETITIONERS ACTUAL, MORAL AND EXEMPLARY DAMAGES.
Position of Respondents
Position of Petitioners
On the other hand, respondent principally counters that the CA and the
Petitioners basically argue that the CA was wrong in affirming the LA 1) did not err in dismissing the complaints of the 88 petitioners who
dismissal of their complaints due to their failure to verify their position failed to verify their position paper, without prejudice; 2) correctly ruled
paper. They insist that the lack of verification of a position paper is only a that Martos and the 88 petitioners concerned were not entitled to
formal and not a jurisdictional defect. Hence, it was not fatal to their reinstatement; and 3) correctly ruled that petitioners were not entitled to
cause of action considering that the CA could have required them to an award of actual, moral and exemplary damages.
submit the needed verification.
Petitioners have the propensity to disregard the mandatory provisions of
The CA overlooked the fact that all of them verified their complaints by the 2005 Revised Rules of Procedure of the NLRC (NLRC Rules) which
declaring under oath relevant and material facts such as their names, require the parties to submit simultaneously their verified position papers
addresses, employment status, salary rates, facts, causes of action, and with supporting documents and affidavits. In the proceedings before the
reliefs common to all of them. The information supplied in their LA, the complaints of the 99 workers were dismissed because they failed
complaints is sufficient to prove their status of employment and to verify or affix their signatures to the position paper filed with the LA.
entitlement of their monetary claims. In the adjudication of labor cases,
the adherence to stringent technical rules may be relaxed in the interest While it is true that the NLRC Rules must be liberally construed and that
of the working man. Moreover, respondent failed to adduce evidence of the NLRC is not bound by the technicalities of law and procedure, it
payment of their money claims. should not be the first to arbitrarily disregard specific provisions of the
rules which are precisely intended to assist the parties in obtaining just,
Finally, petitioners argue that they and Martos were similarly situated. expeditious and inexpensive settlement of labor disputes. It was only
The award of separation pay instead of reinstatement to an illegally Felix Martos who verified their position paper and their memorandum of
dismissed employee was improper because the strained relations appeal. It was only he alone who was vigilant in looking after his interest
between the parties was not clearly established. Moreover, they are and enforcing his rights. Petitioners should be considered to have waived
entitled to actual, moral and exemplary damages for respondent’s illegal their rights and interests in the case for their consistent neglect and
passive attitude.

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 CIVIL PROCEDURE

Moreover, Martos was never authorized by any of his fellow Regarding the first issue, the Court agrees with the respondent.
complainants through a special power of attorney or other document in
the proceedings to represent them before the LA and the NLRC. His acts Sections 4 and 5 of Rule 7 of the 1997 Rules of Civil Procedure provide:
and verifications were made only in his own personal capacity and did not
bind or benefit petitioners. There is only one logical reason why a SEC. 4. Verification. – Except when otherwise specifically required by law
majority of them failed to verify their position paper, their appeal and or rule, pleadings need not be under oath, verified or accompanied by
now their petition: they were not in any way employees of the affidavit.
respondent. They were total strangers to the respondent. They even
refused to identify themselves during the proceedings by their failure to A pleading is verified by an affidavit that the affiant has read the
appear thereat. Hence, it is too late for the others to participate in the pleadings and that the allegations therein are true and correct of his
fruits, if any, of this litigation. personal knowledge or based on authentic records.

Finally, the reinstatement being sought by Martos and the others was no A pleading required to be verified which contains a verification based on
longer practicable because of the strained relation between the parties. "information and belief" or upon "knowledge, information and belief" or
Petitioners can no longer question this fact. This issue was never raised or lacks a proper verification, shall be treated as an unsigned pleading.
taken up on appeal before the NLRC. It was only when the petitioners lost
in the appeal in the CA that they first raised the issue of strained relation. SEC. 5. Certification against forum shopping. – The plaintiff or principal
Moreover, no proof of actual damages was presented by the petitioners. party shall certify under oath in the complaint or other initiatory pleading
There is no clear and convincing evidence on record showing that the asserting a claim for relief, or in a sworn certification annexed thereto
termination of an employee’s services had been carried out in an and simultaneously filed therewith:
arbitrary, capricious or malicious manner.
(a) that he has not theretofore commenced any action or filed any claim
The Court’s Ruling 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
The Court is basically asked to resolve two (2) issues: 1 whether or not pending therein; (b) if there is such other pending action or claim, a
the CA was correct in dismissing the complaints filed by those petitioners complete statement of the present status thereof; and (c) if he should
who failed to verify their position papers; and 2 whether or not Martos thereafter learn that the same or similar action or claim has been filed or
should be reinstated. is pending, he shall report that fact within five (5) days therefrom to the

54
 CIVIL PROCEDURE

court wherein his aforesaid complaint or initiatory pleading has been petitioners failed to adduce proof that he was so authorized. The
filed. complaints of the other parties in the case of Nellie Vda. De Formoso v. v.
PNB13 suffered a similar fate. Thus:
Failure to comply with the foregoing requirements shall not be curable by
mere amendment of the complaint or other initiatory pleading but shall Admittedly, among the seven (7) petitioners mentioned, only Malcaba
be cause for the dismissal of the case without prejudice, unless otherwise signed the verification and certification of non-forum shopping in the
provided, upon motion and after hearing. The submission of a false subject petition. There was no proof that Malcaba was authorized by his
certification or non-compliance with any of the undertakings therein shall co-petitioners to sign for them. There was no special power of attorney
constitute indirect contempt of court, without prejudice to the shown by the Formosos authorizing Malcaba as their attorney-in-fact in
corresponding administrative and criminal actions. If the acts of the party filing a petition for review on certiorari. Neither could the petitioners give
or his counsel clearly constitute willful and deliberate forum shopping, at least a reasonable explanation as to why only he signed the verification
the same shall be ground for summary dismissal with prejudice and shall and certification of non-forum shopping.
constitute direct contempt, as well as a cause for administrative
sanctions. x x x. [Emphases supplied] The liberal construction of the rules may be invoked in situations where
there may be some excusable formal deficiency or error in a pleading,
The verification requirement is significant, as it is intended to secure an provided that the same does not subvert the essence of the proceeding
assurance that the allegations in the pleading are true and correct and and it at least connotes a reasonable attempt at compliance with the
not the product of the imagination or a matter of speculation, and that rules. Besides, fundamental is the precept that rules of procedure are
the pleading is filed in good faith.10 Verification is deemed substantially meant not to thwart but to facilitate the attainment of justice; hence,
complied with when, as in this case, one who has ample knowledge to their rigid application may, for deserving reasons, be subordinated by the
swear to the truth of the allegations in the complaint or petition signs the need for an apt dispensation of substantial justice in the normal course.
verification, and when matters alleged in the petition have been made in They ought to be relaxed when there is subsequent or even substantial
good faith or are true and correct.11 compliance, consistent with the policy of liberality espoused by Rule 1,
Section 6.14 Not being inflexible, the rule on verification allows for such
The absence of a proper verification is cause to treat the pleading as liberality.15
unsigned and dismissible.12
Considering that the dismissal of the other complaints by the LA was
The lone signature of Martos would have been sufficient if he was without prejudice, the other complainants should have taken the
authorized by his co-petitioners to sign for them. Unfortunately, necessary steps to rectify their procedural mistake after the decision of

55
 CIVIL PROCEDURE

the LA was rendered. They should have corrected this procedural flaw by construction projects. From the sworn statements executed by Felix
immediately filing another complaint with the correct verification this Yortas,19 Marvin Batta,20
time. Surprisingly, they did not even attempt to correct this technical
blunder. Worse, they committed the same procedural error when they Lito Bantillo,21 Gavino Felix Nicolas,22 and Romeo Pangacian Martos,23
filed their appeal16 with the NLRC. they already withdrew their complaints against respondent. Their status
and cause of action not being clear and proven, it is just not right that
Under the circumstances, the Court agrees with the CA that the dismissal these complaints be considered as similarly situated as Martos and
of the other complaints were brought about by the own negligence and entitled to the same benefits.
passive attitude of the complainants themselves. In Formoso, the Court
further wrote: As to Martos, the Court agrees that the reinstatement being sought by
him was no longer practicable because of strained relation between the
The petitioners were given a chance by the CA to comply with the Rules parties. Indeed, he can no longer question this fact. This issue was never
when they filed their motion for reconsideration, but they refused to do raised or taken up on appeal before the MLRC. It was only after he lost
so. Despite the opportunity given to them to make all of them sign the the appeal in the CA that he raised it.
verification and certification of non-forum shopping, they still failed to
comply. Thus, the CA was constrained to deny their motion and affirm the Thus, the Court deems it fair to award separation pay in lieu of
earlier resolution. reinstatement.1âwphi1 In addition to his separation pay. Martos is also
entitled to payment of full backwages, 13th month pay, service incentive
The Court can only do so much for them. leave pay, and attorney’s fees.

Most probably, as the list17 submitted is not complete with the The accepted doctrine is that separation pay may avail in lieu of
information as to when each started and when each was dismissed there reinstatement if reinstatement is no longer practical or in the best
must be some truth in the claim of respondent that those complainants interest of the parties. Separation pay in lieu of reinstatement may
who failed to affix their signatures in the verification were either not likewise be awarded if the employee decides not to be reinstated.
employees of respondent at all or they simply refused to prosecute their
complaints. In its position paper,18 respondent alleged that, aside from Under the doctrine of stained relations, the payment of separation pay is
the four (4) complainants who withdrew their complaints, only 17 out of considered an acceptable alternative to reinstatement when the latter
the more or less 104 complainants appeared on its records as its former opinion is no longer desirable or viable. On one hand, such payment
project employees or at least known by it to have worked in one of its liberates the employee from what could be highly oppressive work

56
 CIVIL PROCEDURE

environment. On the other hand, it release the employer from the grossly
unpalatable obligation of maintaining in its employ a worker it could no In G.R. No. 165338, Makilito B. Mahinay (Mahinay), thru a petition for certiorari1
longer trust.24 directly filed with this Court, seeks to nullify the December 12, 2003 Resolution2
of the Regional Trial Court (RTC), Branch 5, Cebu City in Civil Case No. CEB-
WHEREFORE, the petition is DENIED. 16335. The questioned RTC Resolution denied Mahinay’s motion to compel
Jocelyn B. Sorensen (Sorensen) to produce and turn over to him the owner’s
SO ORDERED. copy of Transfer Certificate of Title (TCT) No. 117531.3 In the same petition,
Mahinay also charges respondent Judge Ireneo Lee Gako, Jr. (Judge Gako) with
gross ignorance of the law, abdication of judicial duty, and failure to resolve a
motion within the period prescribed by law.

G.R. No. 165338 November 28, 2011 Mahinay likewise assails the July 20, 2004 Order4 of the RTC denying his Motion
for Reconsideration.5
MAKILITO B. MAHINAY, Petitioner,
vs. In G.R. No. 179375, Sorensen on the other hand seeks to reverse and set aside
HON. IRENEO LEE GAKO, JR., Presiding Judge, Regional Trial Court, Branch 5, the April 24, 2007 Resolution6 of the Court of Appeals (CA) which dismissed her
Cebu City and JOCELYN B. SORENSEN, Respondents. Petition for Certiorari7 in CA-G.R. CEB-SP No. 02193. Sorensen filed said
certiorari petition after Judge Gako volte faced and issued an Order8 dated
x - - - - - - - - - - - - - - - - - - - - - - -x
September 1, 2006 ordering her to surrender to Mahinay TCT No. 117531.
G.R. No. 179375
Sorensen likewise challenges the August 3, 2007 Resolution9 of the CA denying
JOCELYN B. SORENSEN, Petitioner, her Motion for Reconsideration.10
vs.
Factual Antecedents
MAKILITO B. MAHINAY, Respondent.
Constantina H. Sanchez, Josefina H. Lopez and Susan Honoridez are the
DECISION
registered owners (the owners) of a 406-square meter parcel of land known as
DEL CASTILLO, J.: Lot 5 located in Cebu City and covered by TCT No. 117531. On July 25, 1994,
Mahinay filed a complaint11 for specific performance (docketed as Civil Case No.
These consolidated petitions pertain to a legal tug-of-war between persons CEB-16335) against the owners and one Felimon Suarez (Suarez), to compel
trying to wrest possession of a coveted Torrens certificate of title, and its them to convey Lot 5 to him.
collateral effect to the judge who heard their case.

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 CIVIL PROCEDURE

In said complaint, Mahinay alleged that in an earlier case12 he filed against the the owners asked the Bureau of Internal Revenue for the refund of the capital
owners, the parties therein arrived at a Compromise Agreement wherein the gains and documentary stamp taxes they earlier paid.
owners gave him preferential right to buy a 200-square meter portion of Lot 5
Mahinay riposted, postulating that the Deed of Absolute Sale he attached to his
on condition that he will withdraw said case. On February 8, 1993, the trial court
Complaint sufficiently confutes the owners’ defense of equitable mortgage.
thus issued a Judgment13 based on said Compromise Agreement.
Besides, the owners and Suarez failed to deny under oath the authenticity and
On November 9, 1993, however, the owners sold the entire Lot 5 to Suarez for due execution of said Deed of Absolute Sale. 19
₱300,000.00 without first offering the same to Mahinay. According to Mahinay,
On June 7, 1996, the RTC rendered a Decision20 debunking the owners’ theory of
said transaction violated his preferential right to buy as he was willing and
equitable mortgage. It held that the notarized documents Mahinay presented,
capable of buying the property. To bolster his claim, Mahinay attached to his
particularly the Deed of Absolute Sale, outweigh the owners’ evidence
second complaint the February 8, 1993 Judgment in the earlier case and a
consisting of private documents. Its dispositive portion reads:
notarized Deed of Absolute Sale14 dated November 9, 1993 between the owners
and Suarez. WHEREFORE, this [C]ourt declares [Mahinay] as being entitled to redeem Lot
No. 5 from defendant Felimon Suarez.
During the pendency of Civil Case No. CEB-16335, Mahinay filed an Ex-Parte
Manifestation and Motion15 informing the RTC that he caused the annotation of Defendant Felimon Suarez, his heirs, successors and assigns are hereby directed
an adverse claim and then a Notice of Lis Pendens16 on TCT No. 117531 on to execute the Deed of Conveyance, such papers and documents necessary for
August 17, 1994. the transfer of the title of the said lot to [Mahinay] upon the deposit before this
Court of the same consideration as stated in the Deed of Absolute Sale of the
In traversing Mahinay’s allegations, the owners asserted that they did not
same lot between defendant Suarez and the other defendants.
violate Mahinay’s preferential right to buy as the transaction between them and
Suarez was actually an equitable mortgage, and not a sale. In support of their No pronouncement as to costs.
defense of equitable mortgage, the owners averred that they remained the
occupants and registered owners of Lot 5 and that TCT No. 117531 has always SO ORDERED.21
been in their possession. With regard to the execution of the alleged Deed of The owners and Suarez moved for reconsideration.22 On November 22, 1996,
Absolute Sale, the owners explained that Suarez merely imposed the same as however, the RTC denied the same.23
one of the conditions before granting the loan application. To prove their theory
of defense, the owners submitted an Acknowledgement Receipt17 dated Unhappy, they appealed to the CA.24 Finding no reversible error therefrom, the
September 1, 1994 wherein Suarez declared that no sale between him and the CA affirmed the ruling of the RTC in a Decision25 dated December 29, 2000,
owners actually pushed thru and a letter18 dated September 20, 1994 wherein which became final and executory on February 8, 2001.26

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 CIVIL PROCEDURE

About a year later, Mahinay and Suarez filed a Joint Manifestation27 informing The court indeed believes that a mortgage lien is superior to a Notice of Lis
the RTC that in compliance with its Decision, Suarez executed a Deed of Pendens pursuant to Article 2126 of the Civil Code, which provides that the
Conveyance28 in favor of Mahinay, who, in turn, deposited with the RTC the mortgage directly and immediately subjects the property upon which it is
amount of ₱300,000.00.29 imposed to the fulfilment of the obligation for whose security it was constituted.
Article 2129 also provides that the creditor may claim from a third person in
Thereafter, to pave the way for the complete implementation of the RTC’s final
possession of the mortgaged property, the payment of the part of the credit
Decision and have Lot 5 registered in his name, Mahinay filed on February 7,
secured by the property which said person possesses. In short, not even a sale
2002 an Omnibus Motion30 seeking to compel the owners to vacate the property
or transfer of the mortgaged property can affect or release the mortgage
and turn over to him the owner’s copy of TCT No. 117531. On March 12, 2002,
because the purchasers are necessarily bound to acknowledge and respect the
the RTC, then already presided by Judge Gako, issued a Resolution31 granting
encumbrance of a recorded real estate mortgage, whether the sale or transfer
Mahinay’s motion. Thus:
to them be with or without the consent of the mortgagee.
WHEREFORE, in view of the foregoing, defendants Susan Honoridez, Constantina
WHEREFORE, in view of the foregoing, [Mahinay’s] Motion to Direct Jocelyn B.
Sanchez and Josefina Lopez are directed to turn over the Owner’s Duplicate
Sorensen to turn over Transfer Certificate of Title No. 117531 to the sheriff is
Copy of the Certificate of Title of Lot 5 to [Mahinay], and to vacate the premises
hereby denied.
thereof in favor of the latter within thirty (30) days from receipt of this
resolution.32 On January 12, 2004, Mahinay filed a Motion for Reconsideration38 of the
December 12, 2003 Resolution followed by a Supplemental Arguments in
Pursuant to said Resolution, the branch sheriff placed Mahinay in actual and
Support of the Motion for Reconsideration.39 Sorensen opposed40 the motion
physical possession of the entire Lot 5. However, TCT No. 117531 could not be
and to which opposition, on January 20, 2004, Mahinay replied.41
surrendered to him as the same was already in possession of Sorensen by virtue
of a Real Estate Mortgage executed by the owners subsequent to the filing of Raring to end his decade long legal battle, Mahinay filed on April 19, 2004 an Ex-
Mahinay’s complaint.33 parte Motion for Early Resolution.42 A month later, Mahinay filed a Second Ex-
Parte Motion for Early Resolution,43 furnishing the Court Administrator a copy
Whereupon, Mahinay filed a Motion to Issue an Order Directing Sorensen to
thereof with express reservation of making the same as his formal
Turn Over TCT No. 11753134 to him. This drew Sorensen’s Opposition,35 to which
administrative complaint in the future.
Mahinay tendered his Reply.36
On July 20, 2004, what seemed to be an interminable wait for Mahinay finally
On December 12, 2003, Judge Gako issued the assailed Resolution37 in G.R. No.
ended, albeit with unwanted result on his part – Judge Gako came up with a
165338 denying Mahinay’s motion, the pertinent portions of which read:
one-page Order44 denying his Motion for Reconsideration.

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 CIVIL PROCEDURE

Aggrieved yet still refusing to concede defeat, Mahinay directly went to this filed by the owners which eventually reached the Supreme Court and docketed
Court on October 8, 2004 by filing a petition for certiorari under Rule 65 of the as G.R. No. 153762,48 this Court held that the Decision in Civil Case No. CEB-
Rules of Court against Sorensen and Judge Gako. He raises the following matters 16335 had long become final and executory, thereby erasing any doubt that the
for consideration of this Court: transaction between the owners and Suarez was indeed a contract of sale. For
Mahinay, this Court’s ruling in G.R. No. 153762 is a supervening event which
I.
would justify Judge Gako to reconsider his earlier position on the matter of
RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION, AMOUNTING TO LACK directing Sorensen to hand over to him the owner’s copy of TCT No. 117531. He
OR EXCESS OF JURISDICTION, IN ISSUING THE RESOLUTION AND ORDER DATED also suggested that if Judge Gako would grant his motion, the administrative
DECEMBER 12, 2003 AND JULY 20, 2004 (ANNEXES A AND B RESPECTIVELY), charge of gross ignorance of the law against the good judge would become
WHEREBY, ASIDE FROM REFUSING TO PERFORM A MINISTERIAL DUTY TO moot.
IMPLEMENT THE FINAL AND EXECUTORY DECISION IN CEB-16335, HE AMENDED
Apparently persuaded by Mahinay’s formulations, Judge Gako granted his
THE SAME AND MADE ERRONEOUS CONCLUSIONS OF LAW, INDICATIVE OF
Reiteratory Motion on September 1, 2006.49
GROSS IGNORANCE OF THE LAW CHARACTERIZED WITH DISHONESTY, FRAUD
AND BAD FAITH. It thus became Sorensen’s turn to file a Motion for Reconsideration.50 She
contended that Mahinay violated the rule against forum shopping as the relief
II.
sought in aforesaid Reiteratory Motion is the same relief prayed for in G. R. No.
RESPONDENT JUDGE IS GUILTY OF VIOLATING THE CONSTITUTIONAL PROVISION 165338. She also pointed out that Judge Gako gravely abused his discretion in
REQUIRING JUDGES TO DECIDE PENDING INCIDENTS WITHIN NINETY (90) DAYS granting said motion for he effectively pre-empted the action of the Supreme
FROM DATE OF SUBMISSION. Court in G.R. No. 165338. With regard to the Decision of this Court in G.R. No.
153762, Sorensen argued that the same is not conclusive as to whether she
III. cannot remain in possession of the disputed TCT.
THAT PETITIONER HAS NO APPEAL [OR] OTHER PLAIN, SPEEDY AND ADEQUATE After Mahinay filed his Opposition,51 Judge Gako issued an Order52 dated
REMEDY AGAINST THE QUESTIONED RESOLUTION AND ORDER OF RESPONDENT September 18, 2006 denying Sorensen’s Motion for Reconsideration.
COURT SOUGHT TO BE NULLIFIED IN THIS PETITION.45
Sorensen thus filed with the CA a petition for certiorari53 assailing Judge Gako’s
During the pendency of G.R. No. 165338, or on August 29, 2006, Mahinay filed September 1, 2006 Order granting Mahinay’s Reiteratory Motion. In said
with the RTC a Reiteratory Motion to Compel Jocelyn "Joy" B. Sorensen to petition, she gave her version of the story as follows –
Surrender Owner’s Duplicate Copy of TCT No. 117531.46 In persuading Judge
Gako to reconsider his earlier position, Mahinay alleged that in a related case47
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 CIVIL PROCEDURE

In October 1994, [the owners] approached [Sorensen] in order to obtain a loan It is at this juncture, when [Mahinay] asked the Honorable public respondent
from her. So the former offered Lot No. 5, Block 68 of the Subdivision Plan, now Judge to compel [Sorensen] to surrender the said owner’s duplicate original
subject of this case, as a security or collateral to said loan. In procuring said loan, copy of T.C.T. 117531 but the latter in its order dated July 20, 2004 denied said
the said [owners] showed to [Sorensen] a true copy of their title over said motion. A motion for reconsideration was filed but the same was denied.
property, T.C.T. No. 11753.
Subsequently, [Mahinay] filed a petition for certiorari dated September 21, 2004
After some negotiation[s], [Sorensen], in utmost good faith, relying on the fact with the Supreme Court docketed as G.R. No. 165338 entitled "Makilito B.
that there [is] no adverse annotation at the back of said title, agreed to extend Mahinay vs. Hon. Ireneo Lee Gako, Jr., Presiding Judge of RTC-Branch 5, Cebu
to them a loan. As a matter of fact, [Sorensen] released to said mortgagors a City and Jocelyn B. Sorensen" questioning the propriety of the issuance of said
loan of ₱709,827.00. Thereafter, a real estate mortgage was executed by said order dated January 6, 2004 which denied the motion to compel petitioner to
mortgagors in favor of [Sorensen] as mortgagee to said loan. surrender T.C.T No. 117531.

[Sorensen], in good faith, received the owner’s duplicate original copy of said Despite the fact that the said petition for certiorari is still pending and not yet
T.C.T. No. 117531 from [the owners] which when presented and shown to resolved by the Supreme Court until the present, the Honorable public
[Sorensen], the same did not contain any adverse claim over the property to be respondent Judge issued the questioned order dated September 1, 2006
mortgaged to her; and, until now, the said owner’s duplicate original copy of directing herein petitioner to surrender T.C.T. No. 117531 which virtually sets
said title is in actual custody of [Sorensen]; aside his previous order dated January 6, 2004 which is now the subject of said
petition for certiorari before the Supreme Court. 541âwphi1
Upon default of [the owners] in the payment of said loan, [Sorensen] instituted
an extra-judicial foreclosure over the said mortgaged property. In a Resolution55 promulgated on April 24, 2007, however, the CA outrightly
dismissed Sorensen’s petition for her failure to state that the allegations in her
During the public auction of said mortgaged property, [Sorensen] became the
petition are true and correct not only based on her personal knowledge but also
lone and highest bidder. Consequently, the Court Sheriff issued the said
based on authentic records.
certificate of sale dated November 12, 2004 in favor of [Sorensen] stating
therein that [Sorensen] was the lone and highest bidder over the land sold in Sorensen filed a Motion for Reconsideration56 and to remedy the defect in her
public auction for ₱3,362,633.00. petition submitted an Amended Petition57 with corrected verification. But the
CA was not moved by Sorensen’s subsequent compliance and, consequently,
With the issuance of said certificate of sale, [Sorensen] became entitled to
denied her motion in a Resolution58 dated August 3, 2007. Hence, the petition
possess the mortgaged property which she acquired in a public auction;
for review on certiorari in G.R. No. 179375 where Sorensen advances the
following arguments:

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First Reason/Argument Unfortunately, Judge Gako not only failed to comprehend the implication of
such pronouncement by still recognizing the mortgage, he also effectively
THAT THE RESPONDENT COURT OF APPEALS COMMITTED A GRAVE ABUSE OF
modified the final and executory judgment in Civil Case No. CEB-16335.
DISCRETION IN DISMISSING THE PETITION FOR CERTIORARI FOR FAILING TO
STATE IN ITS VERIFICATION PORTION THE PHRASE ‘OR BASED ON AUTHENTIC Mahinay also contends that Judge Gako committed serious and egregious error
RECORDS’ AS REQUIRED IN SECTION 4, RULE 7 OF THE 1997 RULES ON CIVIL in ruling that the mortgage is superior to the previously annotated adverse claim
PROCEDURE AS AMENDED BY AM NO. 00-2-10-SC [E]SPECIALLY SO WHEN and Notice of Lis Pendens. He continues that Judge Gako is guilty of gross
PETITIONER HAD ALREADY FILED AN AMENDED PETITION FOR CERTIORARI WITH ignorance of the law, evident bad faith, fraud, and dishonesty. Mahinay asserts
THE CORRECTED VERIFICATION PORTION THIS TIME CONTAINING THE PHRASE that it is an elementary rule which ought to be known by lawyers and judges
"BASED ON AUTHENTIC RECORDS"; that a final and executory judgment is unalterable. However, Judge Gako
deliberately ignored such basic rule and even feigned ignorance of the common
Second Reason/Argument
rules on adverse claim and lis pendens.
THAT THE RESPONDENT COURT OF APPEALS FURTHER COMMITTED A GRAVE
Lastly, Mahinay accuses Judge Gako of unjustifiably sitting on his Motion for
ABUSE OF DISCRETION IN FAILING TO CONSIDER THAT THE RESOLUTION OF THE
Reconsideration. He claims that he filed his Motion for Reconsideration on
ISSUES INVOLVED IN THE DISMISSED PETITION FOR CERTIORARI IS MORE THAN
January 12, 2004 while Sorensen filed her opposition thereto on January 20,
ENOUGH REASON TO LIBERALIZE THE STRINGENT REQUIREMENT OF
2004. The issues raised in said motion are not difficult to resolve, yet Judge Gako
VERIFICATION OF A PETITION FOR CERTIORARI PURSUANT TO SECTION 4, RULE 7
issued his single-page Order denying said motion only on July 20, 2004. What is
OF THE 1997 RULES ON CIVIL PROCEDURE AS AMENDED BY AM No. 00-2-10-
more, Judge Gako did not report to the Supreme Court that he had a pending
SC;59
motion which remained unresolved beyond the constitutionally mandated 90-
In a Resolution60 dated July 21, 2008, this Court ordered the consolidation of day period for resolving motions.
G.R. Nos. 165338 and 179375.
For her part, Sorensen stands by the RTC and argues that a mortgage lien is
Parties’ Arguments superior to a notice of lis pendens; that she is not bound by the Decision in Civil
Case No. CEB-16335 as she is not a party thereto; and, that she is an innocent
In G.R. No. 165338, Mahinay argues that the final and executory Decision61 mortgagee for value entitled to remain in possession of TCT No. 117531.
dated June 7, 1996 in Civil Case No. CEB-16335 pronounced in no uncertain Sorensen also points out that the delay in the resolution of Mahinay’s motion
terms that the November 9, 1993 transaction between the owners and Suarez only shows that Judge Gako meticulously studied the case.
was a contract of sale. Hence, said owners could not have validly mortgaged Lot
5 on November 27, 1994 as they are no longer the owners thereof at that time.

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Sorensen claims that in filing his Reiteratory Motion, Mahinay violated the rule It is a rule of universal application, almost, that courts of justice constituted to
on exhaustion of administrative remedies. She argues that the proper remedy to pass upon substantial rights will not consider questions in which no actual
obtain unlawfully withheld duplicate certificate of title is to file a case in interests are involved; they decline jurisdiction of moot cases. And where the
accordance with Section 10762 of Presidential Decree (PD) No. 1529.63 issue has become moot and academic, there is no justiciable controversy, so
that a declaration thereon would be of no practical use or value. There is no
Lastly, Sorensen calls our attention to the Comment/Manifestation64 Suarez
actual substantial relief to which petitioners would be entitled and which would
filed in G.R. No. 153762 wherein he affirmed that the transaction between him be negated by the dismissal of the petition.
and the owners was a mere mortgage; that he received the amount of
At this point it may not be amiss to add (though no longer contested in these
₱419,500.00 from Sorensen as redemption price for the mortgaged property;
petitions) that Mahinay further continued to pursue his quest at the trial court
and, that he in turn gave to her the owner’s duplicate copy of TCT No. 117531.
level to have TCT No. 117531 in his possession. On November 14, 2007, he filed
Our Ruling a motion68 praying for the issuance of a writ of possession directing the sheriff
to take possession of the owner’s copy of TCT No. 117531. This was granted by
The grant of Mahinay’s Reiteratory Motion rendered G.R. No. 165338 moot. the RTC in an Order69 dated March 26, 2008. After serving the writ, the sheriff
In G.R. No. 165338, Mahinay essentially seeks to nullify the December 12, 2003 made a return70 informing the RTC that Sorensen refused to surrender the
Resolution65 of Judge Gako which denied his motion to compel Sorensen to turn certificate of title.
over to him TCT No. 117531. During the pendency of G.R. No. 165338, however, Mahinay then changed tack and filed a motion to declare the title in Sorensen’s
Mahinay filed his Reiteratory Motion with the same objective – to compel possession as null and void and in lieu thereof to issue a new one under his
Sorensen to surrender to him the coveted TCT. On September 1, 2006, Judge name.71 In an Order72 dated September 5, 2008, the RTC granted the motion,
Gako issued an Order66 granting Mahinay’s Reiteratory Motion and directing the dispositive portion of which reads:
Sorensen to turn over to him subject TCT. Sorensen moved for a reconsideration
which Judge Gako denied until, eventually, Sorensen came to this Court. Such a WHEREFORE, the Motion to declare as null and void the owner’s duplicate copy
change of heart on the part of Judge Gako negated Mahinay’s contention that of Transfer Certificate of Title No. 117531, dated 5 August 2008, filed by
the honorable magistrate committed grave abuse of discretion in denying his plaintiff, is granted.
motion to compel Sorensen to turn over to him TCT No. 117531. It also
The title of Lot No. 5, Block 68, is ordered transferred to the name of plaintiff,
effectively mooted his petition. Thus, we have no other recourse but to dismiss
MAKILITO B. MAHINAY, pursuant to the Deed of Conveyance, attached as Annex
G.R. No. 165338. In Gancho-on v. Secretary of Labor and Employment,67 this
"A" to the Motion, without the need of surrendering the owner’s duplicate copy
Court pronounced that –
of the said title, TCT No. 117531.

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The owner’s duplicate copy of TCT No. 117531 is declared null and void, and the AGAINST THE PRESIDING JUDGE OF THIS HONORABLE COURT IN G.R. No.
Register of Deeds, Cebu City, is ordered to issue a new owner’s duplicate 153762 [sic].75
containing a memorandum to this effect.
Indubitably, Mahinay’s allegations of gross ignorance of the law and abdication
Notify all the parties concerned of this order and the Office of the Register of of judicial duty are not based on his sincere and strong belief that Judge Gako
Deeds of Cebu City, for its compliance. should be disciplined. They are mere ploys calculated to induce Judge Gako to
grant his motion. We cannot countenance such lamentable scheme of Mahinay.
SO ORDERED.73
It is settled that disciplinary proceedings against judges do not complement,
This sequence of events which transpired during the pendency of G.R. No. supplement or substitute judicial remedies. Administrative complaints are not
165338 all the more rendered it moot. intended to coerce judges to rule in complainant’s favor. Fittingly, we reiterate
our pronouncement in Atty. Flores v. Hon. Abesamis:76
The administrative charges of gross ignorance of the law and abdication of a
judicial duty lack merit; the administrative charge of failure to resolve a motion Law and logic decree that "administrative or criminal remedies are neither
within the prescribed period should be referred to the Office of the Court alternative nor cumulative to judicial review where such review is available, and
Administrator for appropriate action. must wait on the result thereof." Indeed, since judges must be free to judge,
without pressure or influence from external forces or factors, they should not be
Mahinay accuses Judge Gako, among others, of gross ignorance of the law and subject to intimidation, the fear of civil, criminal or administrative sanctions for
abdication of judicial duty. From the facts of these cases as set out above, acts they may do and dispositions they may make in the performance of their
however, it is quite obvious that Mahinay would not have accused Judge Gako duties and functions; and it is sound rule, which must be recognized
of such charges had the judge ruled in his favor. It should be recalled that independently of statute, that judges are not generally liable for acts done
Mahinay first cocked the gun, so to speak, when he filed his Second Ex-Parte within the scope of their jurisdiction and in good faith; and that exceptionally,
Motion for Early Resolution74 intimating to Judge Gako that he was prosecution of the judge can be had only if "there be a final declaration by a
contemplating on filing an administrative charge against the magistrate before competent court in some appropriate proceeding of the manifestly unjust
the Office of the Court Administrator. Then he filed his Rule 65 petition in G.R. character of the challenged judgment or order, and also evidence of malice or
No. 165338 incorporating therein aforesaid administrative charges against Judge bad faith, ignorance or inexcusable negligence, on the part of the judge in
Gako. Yet during the pendency of said petition Mahinay filed with the RTC his rendering said judgment or order" x x x.
Reiteratory Motion alleging that –
Indeed, unless it can be shown that their acts are tainted with bad faith, malice
THE GRANT OF THIS REITERATORY MOTION, IT IS BELIEVED, WILL HAVE THE or corrupt purpose, judges cannot be held administratively liable for rendering
EFFECT OF RENDERING MOOT AND ACADEMIC THE ADMINISTRATIVE CHARGE an erroneous judgment77 simply because they are not infallible.78
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 CIVIL PROCEDURE

Instead of threatening Judge Gako with administrative charges, Mahinay could raised are mainly of law,"80 just like in her CA petition. After all, the absence of
have simply awaited the resolution of G.R. No. 165338. Unfortunately, as earlier verification is a mere formal, not jurisdictional, defect.
discussed, his own impatience mooted G.R. No. 165338.
Sorensen misses the point.
With regard to Judge Gako’s alleged tardiness in resolving the Reiteratory
The rule requiring certain pleadings to be verified is embodied in Section 4, Rule
Motion, it cannot escape our attention, however, that he was never given a
7 of the Rules of Court. It reads:
chance to comment or answer the complaint against him. Thus, we cannot
resolve the administrative charge of failing to resolve the motion on time SEC. 4. Verification. – Except when otherwise specifically required by law or rule,
without trifling with his constitutionally enshrined right to due process. pleadings need not be under oath, verified or accompanied by affidavit.
The cardinal precept is that where there is a violation of basic constitutional A pleading is verified by an affidavit that the affiant has read the pleading and
rights, courts are ousted from their jurisdiction. The violation of a party's right to that the allegations therein are true and correct of his personal knowledge or
due process raises a serious jurisdictional issue which cannot be glossed over or based on authentic records.
disregarded at will. Where the denial of the fundamental right to due process is
apparent, a decision rendered in disregard of that right is void for lack of A pleading required to be verified which contains a verification based on
jurisdiction.79 "information and belief," or upon "knowledge, information and belief," or lacks
a proper verification, shall be treated as an unsigned pleading.
For the expeditious and orderly conduct of proceedings, therefore, we find it
appropriate to refer said administrative charge to the Office of the Court Verification of pleading is not an empty ritual bereft of any legal importance. It
Administrator for appropriate action. is intended to secure an assurance that the allegations contained in the pleading
are true and correct; are not speculative or merely imagined; and have been
The Court of Appeals did not err in dismissing Sorensen’s petition for certiorari. made in good faith.81 A pleading may be verified by stating that the pleaders
have read the allegations in their petition and that the same are true and
With regard to G.R. No. 179375, Sorensen admits that due to inadvertence she
correct based either on their personal knowledge or authentic records, or based
failed to state in the verification portion of her petition that the allegations
both on their personal knowledge and authentic records. While the rule gives
therein are true and correct based on authentic records. Nonetheless, such
the pleaders several ways of verifying their pleading, the use of the phrase
omission, according to Sorensen, does not justify the outright dismissal of her
personal knowledge or authentic records is not without any legal signification
petition. She posits that the purpose of verification is simply to secure an
and the pleaders are not at liberty to choose any of these phrases fancifully. Hun
assurance that the allegations in the pleading are true and correct. Thus, "the
Hyung Park v. Eung Won Choi82 teaches us when to properly use authentic
requirement that a petition for certiorari be verified is not an absolute necessity
records in verifying a pleading:
where the material facts alleged are a matter of records and all the questions
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 CIVIL PROCEDURE

"[A]uthentic" records as a basis for verification bear significance in petitions Rule may be dispensed with in order that the needs of justice may be served
wherein the greater portions of the allegations are based on the records of the thereby."
proceedings in the court of origin and/or the court a quo, and not solely on the
Pitted against this test, we sustain the CA for not taking a liberal stance in
personal knowledge of the petitioner. To illustrate, petitioner himself could not
resolving Sorensen’s petition for certiorari as the dismissal thereof did not
have affirmed, based on his personal knowledge, the truthfulness of the
impair or affect her substantive rights.
statement in his petition before the CA that at the pre-trial conference
respondent admitted having received the letter of demand, because he No circumstances were present in Sorensen’s petition which would warrant the
(petitioner) was not present during the conference. Hence, petitioner needed to liberal application of the rules to serve the needs of justice.
rely on the records to confirm its veracity.
In claiming that the CA erred in dismissing her petition, Sorensen alleges that
In her CA petition, Sorensen questioned the September 1, 2006 and September the appellate court glossed over the merits of her certiorari petition. She
18, 2006 Orders of Judge Gako which respectively granted Mahinay’s maintains that as an innocent mortgagee for value, she has the superior right to
Reiteratory Motion and denied her Motion for Reconsideration. In addition to remain in custody of the owner’s copy of TCT No. 117531. She insists that she
said Orders and Motions, and to support the allegations in her petition, merely relied on the four corners of said TCT which at the time of the
Sorensen also attached copies of the August 12, 2005 Decision of this Court in transaction did not contain any annotation of lis pendens.
G.R. No. 153762 and other material portions of the records of Civil Case No.
CEB-16335. Quite obviously, Sorensen had no participation in the preparation We are not impressed. True, when a mortgagee relies upon what appears on the
and execution of these documents although they constitute the main bulk of her face of a Torrens title and lends money in all good faith on the basis of the title
evidence. Hence, it was necessary for Sorensen to state in the verification that in the name of the mortgagor, only thereafter to learn that the latter’s title was
the allegations in her petition are true and correct not only based on her defective, being thus an innocent mortgagee for value, his or her right or lien
personal knowledge but also based on the information she gathered from upon the land mortgaged must be respected and protected.86 The rationale for
authentic records.83 The CA is, therefore, correct in its observation that this ruling is, if the rule were otherwise public confidence in the certificate of
Sorensen’s verification is insufficient. title would be impaired as everyone dealing with property registered under the
Torrens system would have to inquire on the regularity of its issuance.
Nonetheless, the Rules84 and jurisprudence on the matter have it that the court
may allow such deficiency to be remedied. In Altres v. Empleo,85 this Court Such is not the case in the present controversy however. As borne out by the
pronounced for the guidance of the bench and the bar that "non-compliance x x records, Mahinay’s Notice of Lis Pendens was duly annotated on the original
x or a defect [in the verification] does not necessarily render the pleading fatally copy of TCT No. 117531 as early as August 17, 1994. On the other hand, the Real
defective. The court may order its submission or correction or act on the Estate Mortgage upon which Sorensen based her alleged superior right was
pleading if the attending circumstances are such that strict compliance with the executed only on October 27, 1994 and inscribed at the back of said title only on
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the following day, October 28, 1994. The prior registration of Mahinay’s Notice Third persons like the respondent-spouses should not be satisfied with merely
of Lis Pendens bound the whole world,87 including Sorensen. It charged her with examining the owner's copy of the certificate of title. They should examine the
notice that the land being offered to her as security for the loan is under original on file with the Register of Deeds for they are all constructively notified
litigation and that whatever rights she may acquire by virtue of the Real Estate of pending litigations involving real property through notices of lis pendens
Mortgage are subject to the outcome of the case.88 More importantly, it also annotated therein.
gave Mahinay a preferential right over subsequent liens and encumbrances
WHEREFORE, the petition in G.R. No. 165338 is hereby DISMISSED for being
annotated on the title.89 "It is settled that in this jurisdiction the maxim prior est
moot. Let the administrative charge of failure to resolve motion within the
in tempore, potior est in jure (he who is first in time is preferred in right) is
prescribed period against Judge Ireneo Lee Gako, Jr. be referred to the Office of
followed in land registration.90 Having registered his instrument ahead of
the Court Administrator for appropriate action.
Sorensen’s Real Estate Mortgage, Mahinay’s Notice of Lis Pendens takes
precedence over the said Real Estate Mortgage. The petition in G.R. No. 179375 is likewise DENIED and the Resolutions of the
Court of Appeals dated April 24, 2007 and August 3, 2007 in CA-G.R. CEB-SP No.
The claim of Sorensen that the owner’s copy of TCT No. 117531 does not
02193 are AFFIRMED.
contain any adverse annotation at the time the owners transacted with her is of
no moment. Being in the nature of involuntary registration, the annotation of SO ORDERED
the Notice of Lis Pendens on the original copy of TCT No. 117531 on file with the
Registry of Deeds is sufficient to bind third parties. It affects the whole world
even if the owner’s copy does not contain the same annotation. The reason for
this ruling was explained in Yu v. Court of Appeals:91

The annotation of a notice of lis pendens at the back of the original copy of the
certificate of title on file with the Register of Deeds is sufficient to constitute
constructive notice to purchasers or other persons subsequently dealing with
the same property. It is not required that said annotation be also inscribed upon
the owner's copy because such copy is usually unavailable to the registrant; it is
normally in the hands of the adverse party, or as in this case, in the hands of a
stranger to the suit.

xxxx

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 CIVIL PROCEDURE

GILBERT G. GUY, G.R. No. 174874

Petitioner,

Present: In this appeal by way of a petition for review on certiorari under Rule 45
of the Rules of Court, petitioner Gilbert G. Guy (Guy, for short) seeks to annul
and set aside the Decisioni[1] dated September 25, 2006 of the Court of Appeals
PUNO, C.J., Chairperson, (CA) in CA-G.R. SP No. 94361, reversing the Resolutioni[2] dated April 20, 2006
of the Secretary of Justicei[3] in I.S. No. 05-01-00365 and I.S. No. 05-03-02371.
SANDOVAL-GUTIERREZ,

- versus - CORONA,

AZCUNA, and
Undisputed are the following factual antecedents:
GARCIA, JJ.

In 1993, herein respondent Asia United Bank (AUB) granted 3D Industries, Inc.
Promulgated: (3D, hereafter) a loan in the form of stand-by letter of credit (L/C) in the amount
ASIA UNITED BANK, of P30 million. To guarantee the loan accommodation, Guy, as then Vice
President for Operations of 3D and a member of its Board of Directors, and then
Respondent. October 4, 2007 3D President Paulino Delfin Pe (Pe) executed on March 23, 1999 a Continuing
x-----------------------------------------------------------------------------------------x Guaranty in AUBs favor. Sometime between the months of July and September
2004, AUB issued several L/Cs for 3Ds importations in the total amount of
US$216,391.26 or the peso equivalent of P11,287,264.00, more or less. For the
import transactions, Pe signed several trust receipts in favor of AUB before the
imported goods were released to 3D. As specifically provided in the trust
DECISION receipts thus signed, 3D shall sell the goods for the account of, and, thereafter,
remit the proceeds of the sale to, AUB not later than the fixed periods therein
stated, or to account for the same, if unsold.i[4]
GARCIA, J.:
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 CIVIL PROCEDURE

[Petitioner] GUY further alleged that the goods [covered by] the trust
receipts were subsequently delivered [by 3D] to Northern Islands Company, Inc.
The succeeding relevant events are summarized in the assailed CA Decision, as
(NICI), the exclusive distributor of 3D, for the sale and distribution thereof. Thus,
follows:
when the said goods or the proceeds of the sale thereof were not accounted for
by NICI after demands to account for the same were made by 3D, the latter filed
several cases against NICI. This circumstance purportedly prevented 3D from
complying with the terms and conditions provided for under the subject trust
receipts.

However, 3D failed to comply with its obligation as expressly specified in

the trust receipts. Consequently, [respondent] AUB sent [two] demand letters to xxx xxx xxx
3D [and], to [petitioner] GUY, for the latter to remit the proceeds of the goods in
the total amount of P12, 148,816.90 covered by the subject trust receipts. When
said demands went unheeded, AUB filed with the Office of the City Prosecutor
On October 13, 2005, the Investigating Prosecutor, Emmanuel L. Obungen, came
of Pasig City two (2) complaints against GUY, as majority and controlling out with the Joint Resolution, in I.S. No. 05-01-00365 and I.S. No. 05-03-02371,
stockholder [of 3D] and by virtue of his continuing guaranty, for estafa under finding probable cause for the offenses charged. Accordingly, he filed with the
Article 315 1(b) of the Revised Penal Code [RPC] in relation to P.D. No. 115 or Regional Trial Court (RTC), Branch 67, Pasig City two (2) Informations for estafa
the Trust Receipts Law, docketed as I.S. No. 05-01-00365 and I.S. No. 05-03- under Article 315 1(b) of the [RPC] in relation to P.D. No. 115, docketed as
02371, respectively. Criminal Case Nos. 131883 and 131884.

During the preliminary investigation, GUY alleged that PE, 3Ds former Aggrieved, [Guy] filed with the DOJ [Department of Justice] a Petition
President, who executed and signed the subject trust receipts, should have been for Review, to which [AUB filed] a comment .
charged instead of him because it was PE who actively managed the business
affairs of 3D at the time when the subject trust receipts were issued. He claimed
that being the majority and controlling stockholder of 3D did not automatically
On December 22, 2005, [DOJ Secretary Raul] GONZALES issued a
make him liable for the offenses charged because he had no hand in the
Resolution, denying the petition for review .
management of 3D.

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 CIVIL PROCEDURE

[Petitioner] GUY admittedly received a copy of the December 22, 2005 SO ORDERED. (Words in brackets added.)
Resolution on December 28, 2005. On January 11, 2006, [he] filed a motion for
In gist, the Secretary of Justice predicated his reversal order on the absence of
reconsidered thereto.
evidence to prove (a) the actual and direct participation of Guy in the trust
receipts transactions; (b) Guys receipt of the goods covered by the trust
receipts; and (c) finally Guys misappropriation or conversion of the goods
[Respondent] AUB filed its its Comment/Manifestation [to the motion for
subject of the trust receipts and/or the proceeds of the sale thereof.
reconsideration] on April 26, 2006.

On May 8, 2006, AUB went to the CA on a petition for certiorari under Rule 65 of
xxx xxx xxx
the Rules of Court with a prayer for preliminary injunctive relief. Docketed as
CA-G.R. SP No. 94361, the petition ascribed grave abuse of discretion on the
part of the Department of Justice (DOJ) Secretary in issuing his resolution of
On April 20, 2006, [DOJ Secretary] GONZALEZ, issued the assailed Resolution, in April 20, 2006, it being AUBs main posture that the former had already lost
I.S. No. 05-01-00365 and I.S. No. 05-03-02371, this time, granting the petition jurisdiction over Guys motion for reconsideration subject of the resolution. AUB,
for review and reversing his December 22, 2005 Resolution, [disposing] as as petitioner a quo, invoked two other grounds for allowing certiorari.
follows:

By Resolutioni[5] dated May 10, 2006, the CA directed Guy to file his comment
WHEREFORE, the Petition for Review filed by respondent-appellant Gilbert G. and, at the same time, issued a temporary restraining order to enjoin the
Guy is hereby GRANTED, and the assailed Resolution dated October 13, 2005 of enforcement of the DOJs April 20, 2006 resolution. On May 19, 2006, Guy
the Pasig City Prosecutors Office is hereby REVERSED and SET ASIDE, and both sought the inhibition of CA Associate Justices Vicente Q. Roxas and Juan Q.
complaints against respondent-appellant Gilbert G. Guy are hereby DISMISSED. Enriquez on grounds, inter alia, of alleged bias and prejudice against Guy as
Further, the City Prosecutor of Pasig is hereby ordered to file the corresponding purportedly manifested by their ruling, with Justice Roxas as ponente, in the
motion to withdraw the Informations in the instant cases for the crime of Estafa related case, i.e., CA G.R. SP No. 87104, involving NICI, Guy and the trust
under Article 315 (b) of the [RPC] in relation to P.D. 115, and report the action receipts-covered goods imported by 3D and subject of the estafa case adverted
taken thereon within five (5) days from receipt hereof to above.i[6]

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Eventually, on September 25, 2006, the former First Division of the CA rendered In this case, Secretary of Justice GONZALES acted without jurisdiction in issuing
its assailed Decisioni[7] reversing the April 20, 2006 Resolutioni[8] of the the April 20, 2006 Resolution which was issued long after his first December 22,
Secretary of Justice. The decretal portion of said decision reads: 2005 Resolution that held that there was probable cause against accused, had
already become final and executory when no motion for reconsideration or
WHEREFORE, premises considered, the petition is hereby GRANTED. The April
appeal filed thereto within the reglementary period of appeal. When GONZALES
20, 2006 Resolution of the Secretary of Justice is hereby REVERSED and SET
issued his second April 20, 2006 Resolution that reversed his earlier finding and
ASIDE. The October 13, 2005 Joint Resolution of the Office of the City
held that there was no probable cause against accused, the DOJ had already
Prosecutor of Pasig City, which found probable cause for estafa against
lost jurisdiction over the case because [of the finality of the December 22,
[petitioner Guy], and the December 22, 2005 Resolution of the Department of
2005 Resolution]. Emphasis and words in brackets added.)
Justice, which denied [Guys] petition for review, are hereby REINSTATED.

SO ORDERED. (Words in brackets added; emphasis in the original.)

Hence, the instant petition for review on three (3) grounds. Under the second
and what easily is his main submission, petitioner alleged that the CA committed
a grave error in finding that the DOJ Resolution dated December 22, 2005 was
already final and executory and that the Secretary of Justice, having meanwhile
The CA confined and predicated its reversal action on the lone issue of loss of lost jurisdiction over the case, is precluded from recalling or setting aside such
jurisdiction, as reflected on the ensuing statements embodied in its challenged resolution, and directing the withdrawal of the Informations in question for
decision: estafa, as his April 20, 2006 resolution did.

This decision is purely about the [DOJ Secretarys) loss of jurisdiction. It is basic How the CA arrived at its conclusion that the DOJ resolution the December 22,
that all [his] Resolutions are void after his loss of jurisdiction. There is no 2005 Resolutioni[9] - became final and executory and, hence, beyond the
weighing evidence nor any discretion at all when loss of jurisdiction is the issue. jurisdiction of the Secretary of Justice to set aside, is made simple by a
The law is explicit that Resolutions rendered without jurisdiction produce no consideration of the following premises excerpted from the assailed CA
legal effect whatsoever. decision, thus:

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 CIVIL PROCEDURE

1. Petitioner Guy received a copy of the one-paged DOJ Resolution dated for reconsideration on the merits and set aside technicalities in the higher
December 22, 2005 finding a prima facie case against him for estafa on interest of justice.
December 28, 2005.

Respondent counters that the DOJ Secretarys Resolution of April 20, 2006 is
2. Fourteen (14) days from such receipt, or on January 11, 2006, petitioner indeed void for the reason set forth in the assailed CA decision. Furthermore,
moved for reconsideration; respondent would have the Court deny this petition owing to what it perceives
to be the formal defects thereof, such as lack of proper verification and false
certification against forum shopping. It is further alleged that the petition raises
3. Section 13 of the DOJ Circular No. 70, series of 2000, on the subject: matters of facts which are not proper in a review proceedings under Rule 45 of
National Prosecution Service (NPS) Rule on Appeal, gives a party aggrieved by the Rules of Court.
the decision of the DOJ Secretary in criminal investigation cases ten (10) days
from notice within which to file a motion for reconsideration; and
The petition is impressed with merit.

4 The motion of the petitioner for reconsideration was filed beyond the
ten-day reglementary period prescribed under the NPS Rule on Appeal and thus
concluded that when Secretary Gonzales issued the April 20, 2006 Resolution
First off, it should be stressed that the determination of probable cause
the DOJ had already lost jurisdiction over the case because the December 22,
to warrant prosecution in court is, under our criminal justice system, entrusted
2005 Resolution of the DOJ had already become final and executory and
at the first instance to public prosecutors and finally to the Secretary of Justice
therefore the loss of jurisdiction wrote finis to the case.
as reviewer of the findings and resolutions of the prosecutors in preliminary
investigation cases.i[10] In this regard, the authority of the Secretary of Justice
to review and order the withdrawal of an information in instances where he
finds the absence of a prima facie case is not time-barred, albeit subject to the
Petitioner admits to the belated filing, due to an inadvertent approval of the court if its jurisdiction over the accused has meanwhile
miscalculation of and misapprehension on the period of filing, of his motion for attached.i[11] And it is not prudent or even permissible for a court to compel
reconsideration. Among others, he argues, however, that it was proper for, and the Secretary of Justice or the fiscal, as the case may be, to prosecute a
within the jurisdictional discretion of, the DOJ Secretary to resolve the motion proceeding originally initiated by him on an information, if he finds that the
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 CIVIL PROCEDURE

evidence relied upon by him is insufficient for conviction.i[12] Now, then, if the the NPS Rule on Appeal (DOJ Circular No. 70, s. of 2000) which pertinently
Secretary of Justice possesses sufficient latitude of discretion in his provides:
determination of what constitutes probable cause and can legally order a
reinvestigation even in those extreme instances where an information has
already been filed in court, is it not just logical and valid to assume that he can SEC. 13. Motion for reconsideration.- The aggrieved party may file a
take cognizance of and competently act on a motion for reconsideration, motion for reconsideration within a non-extendible period of ten (10) days from
belatedly filed it might have been, dealing with probable cause? And is it not a receipt of the resolution on appeal with [the Secretary of Justice] . No second or
grievous error on the part of the CA if it virtually orders the filing of an further motion for reconsideration shall be entertained. (Words in bracket
information, as here, despite a categorical statement from the Secretary of added.)
Justice about the lack of evidence to proceed with the prosecution of the
petitioner? The answer to both posers should be in the affirmative. As we said in
Santos v. Go:i[13] But to strike down the April 20, 2006 DOJ Secretarys Resolution as
absolutely void and without effect whatsoever, as the assailed CA decision did,
for having been issued after the Secretary had supposedly lost jurisdiction over
[C]ourts cannot interfere with the discretion of the public prosecutor in the motion for reconsideration subject of the resolution may be reading into the
evaluating the offense charged. He may dismiss the complaint forthwith, if he aforequoted provision a sense not intended. For, the irresistible thrust of the
finds the charge insufficient in form or substance, or without any ground. Or, he assailed CA decision is that the DOJ Secretary is peremptorily barred from taking
may proceed with the investigation if the complaint in his view is sufficient and a second hard look at his decision and, in appropriate cases, reverse or modify
in proper form. The decision whether to dismiss a complaint or not, is the same unless and until a motion for reconsideration is timely interposed and
dependent upon the sound discretion of the prosecuting fiscal and, ultimately, pursued. The Court cannot accord cogency to the posture assumed by the CA
that of the Secretary of Justice. Findings of the Secretary of Justice are not under the premises which, needless to stress, would deny the DOJ the authority
subject to review unless made with grave abuse of discretion. to motu proprio undertake a review of his own decision with the end in view of
protecting, in line with his oath of office, innocent persons from groundless,
false or malicious prosecution. As the Court pointed out in Torres, Jr. v.
There can be no quibbling that the motion interposed by the petitioner Aguinaldo,i[14] the Secretary of Justice would be committing a serious
for reconsideration of the December 22, 2005 DOJ Resolution was filed beyond dereliction of duty if he orders or sanctions the filing of an information based
the 10-day reglementary period, or four days late to be precise, prescribed by upon a complaint where he is not convinced that the evidence warrants the filing
of the action in court.

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 CIVIL PROCEDURE

Appealsi[17] we went on to state in Amorganda that in the absence of an

indication of malice to delay the proceedings, the Court would grant relief
And lest it be overlooked, the DOJ Secretary, when he took cognizance
where a stringent application of the requirement of timeliness of pleadings
of the petitioners motion for reconsideration, effectively excepted such motion
would deny a litigant, with a meritorious case, substantial justice.
from the operation of the aforequoted Section 13, supra, of DOJ Circular No. 70,
s. 2000. This show of liberality is, to us, within the competence of the DOJ
Secretary to make, and the Court loathes to disturb the same absent compelling
To reiterate what we said in Ginete v. Court of Appealsi[18] and other
proof, as here, that he acted out of whim and that the petitioner was out to
cases, the rules of procedure should be viewed as mere instruments designed to
delay the proceedings to the prejudice of AUB, as private complainant in I.S.
facilitate the attainment of justice. They are not to be applied with severity and
Nos. 05-01-00365 and 05-03-02371, when he (petitioner) interposed his motion
rigidity when such application would clearly defeat the very rationale for their
for reconsideration. While perhaps not in all fours, what the Court said in Yao v.
conception and existence. Even the Rules of Court reflects this principle. The
Court of Appealsi[15] augurs well for the petitioner:
peculiarities of this case impel us to sustain the validity the DOJ Secretarys
taking cognizance of Guys motion for reconsideration in question and eventually
resolving the same on the merits.
In the interest of justice, procedural rules of the most mandatory
character in terms of compliance may be relaxed. In other words, if strict
adherence to the letter of the law would result in absurdity and manifest
In the light of the foregoing considerations, we rule that the Secretary of
injustices, or where the merit of a partys cause is apparent and outweighs
Justice has not, contrary to the assailed holding of the CA, lost jurisdiction over
consideration of non-compliance with certain formal requirements, procedural
I.S. No. 05-01-00365 and I.S. No. 05-03-02371 due to the perceived finality of his
rules should definitely be liberally construed. A party-litigant is to be given the
December 22, 2005 Resolution when he issued his Resolution of April 20, 2006.
fullest opportunity to establish the merits of his complaint or defense rather
Stated a bit differently, the Secretary of Justice had full power and authority to
than for him to lose life, liberty, honor or property on mere technicalities.
issue his subsequent resolution dated April 20, 2006 granting petitioners motion
for reconsideration and reversing his earlier resolution of December 22, 2005.
The said April 20, 2006 Resolution should, therefore, be considered valid and
So does Amorganda v. Court of Appealsi[16] where the Court allowed
fully enforceable.
the belated filing by Amorganda of a motion for reconsideration in the CA so as
not to prejudice the cause of movant-petitioner Amorganda whom the Court
determined not to have been motivated by an impulse to delay the proceedings
or obstruct the administration of justice. Citing Lagunsad v. Court of
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 CIVIL PROCEDURE

Respondent AUBs claim respecting the flaw of the verification aspect of As in the perceived flaw in the verification, respondent also urges that
the instant petition is clearly untenable. Respondent states that the verification the present petition be expunged or summarily denied considering that it fails to
attached to the petition is not a proper verification because the petitioner, comply with the requirements on forum shopping. In the concrete, respondent
instead of stating that he has read the petition as required under Rule 7 (Sec. 4) alleges that the petition contains a false certification against forum shopping,
of the Rules of Court, wrote that he has caused the preparation of the herein noting, in this regard that, while the petitioner attests that to (his) knowledge,
Petition x x x and the allegations contained herein are true and correct to my there is no similar action or proceedings involving the same issues pending in any
personal knowledge, as well as on the basis of the authentic records. tribunal or agency, he did not mention four (4) such actions/cases, namely:
People v. Gilbert G. Guy, Crim. Case No. PSG-131-883-84, pending before the
Respondent is wrong. For, the statement in the verification that the
RTC of Pasig City, Branch 67; Asia United Bank v. Gilbert G. Guy, I.S. No. 05-12-
allegations in the petition are true and correct of his [petitioners] own personal
11759 which resulted in the filing of Criminal Case No. 133244 (People v. Gilbert
knowledge presupposes that the petitioner, as affiant, has read the petition for
G. Guy) now on appeal with the CA; and Asia United Bank v. Hon. Raul Gonzales,
he could not have had attested, in the first place, to the veracity of the
CA-G.R. SP No. 97850, respondent AUBs petition for certiorari filed with the CA.
allegations if he has not first read the petition. It would perhaps be different had
Respondent AUB asserts that these cases involve very similar issues as those
petitioner merely stated reading the petition since a mere reading is not an
raised in this petition and stem from the same series of transactions, the only
assurance that the reader has understood what he had read. It is in
basic difference being in the trust receipts subject thereof.
understanding what is written that one can logically say that the allegations in
the petition are true and correct of ones own personal knowledge.

Respondents stance fails to persuade.

In any event, the purpose of requiring a verification is to secure an

assurance that the allegations in the petition have been made in good faith, or
As it were, the petitioners failure to mention the cases immediately
are true and correct, not merely speculative.i[19] The requirement is simply a
adverted to above did not in any way detract from the correctness of the
condition affecting the form of pleadings and non-compliance therewith is
certification on non-forum shopping or breach the purpose behind the rules on
neither jurisdictional nor renders the pleading fatally defective.i[20] A perusal of
forum shopping. And as the petitioner aptly explained without controversion,
the verification in question shows sufficient compliance with the requirements
People v. Guy (Crim. Case No. 131-883-84) is the case filed pursuant to the
of the Rules and the perceived defects, if that be the case, are not so material as
December 22, 2005 DOJ resolution before the same was reconsidered or
to justify the dismissal of the petition.
reversed by the DOJ in its subsequent resolution of April 20, 2006, which, in
turn, AUB elevated to the CA in CA-G.R. SP No. 94361, whose decision thereon is

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 CIVIL PROCEDURE

now the subject of the instant petition. The differing issues in Crim. Case No. The essence of forum shopping is the filing of multiple suits involving the
131-883-84 and the present petition need no belaboring. same parties for the same cause of action, either simultaneously or successively,
for the purpose of obtaining a favorable judgment,i[21] through means other
than by appeal or certiorari.i[22] The rule thus does not apply to cases that arise
As to AUB v. Guy (I.S. No. 05-12-11759), petitioner claims that his from an initiatory or original action which has been elevated by way of appeal or
defense of non-receipt of the goods subject of the trust receipts involved certiorari to higher or appellate courts or authorities. This is so not only because
therein was, among other defenses, found by the DOJ to be tenable, which thus the issues in the appellate courts necessarily differ from those in the lower
led to the issuance of DOJ resolution dated October 4, 2006 ordering the court, but also because the appealed cases are a continuation of the original
withdrawal of the corresponding information earlier filed in court. case and treated as only one case. For, it would be absurd to require, say in this
instant petition, to make mention in the certification against non-forum
shopping the CA case that is being sought to be reviewed in the petition at
People v. Guy (Criminal Case No. 133244), on the other hand, appears to bench.
have already been withdrawn pursuant to aforementioned DOJ resolution of
October 4, 2006 and, thus, there is not even an issue to speak of in that
terminated case. And while it is perhaps anti-climactic to so state as this juncture, a
certificate of non-forum shopping is not required or necessary in criminal cases
and distinct causes of action.i[23] The absence of a provision on non-forum
And AUB v. Gonzales (CA-G.R. SP No. 97850) is another offshoot of I.S. shopping in the Revised Rules of Criminal Procedure, unlike in the Rules on Civil
No. 05-12-11759 filed by respondent AUB, assailing the aforementioned DOJ Procedure, suggests as much.
resolution of October 4, 2006, by way of petition for certiorari dated February 8,
2007, i.e., long after the filing of the instant petition on November 27, 2006.
With the foregoing disquisitions, the question of whether or not the
petition ought to be summarily dismissed because it allegedly sets forth
Parenthetically, all four (4) cases were initiated by the respondent. And question of facts need not detain us long.
since it insists that all four involve similar or identical issues as that presented in
the present case, perhaps the accusing finger of violating the rule against forum
shopping ought to be pointed at respondent. Reading the petition juxtaposed with the assailed ruling and the
premises holding it together wherein the CA stressed that its decision is purely

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about public respondents (DOJ Secretarys) loss of jurisdiction, it is at once and SET ASIDE and the Resolution of the Secretary of Justice dated April 20,
apparent that the principal, if not the only issue to be considered in this case, is 2006 is REINSTATED.
whether or not the DOJ Resolution of April 20, 2006 is, on jurisdictional ground,
a nullity which, definitely is a question of law rather than of fact. For, a question
of law exists when a) the controversy concerns the correct application of law No pronouncement as to costs.
and jurisprudence to a certain set of facts; b) the issue does not call for the
examination of the probative value of the evidence presented, the truth or
falsity of the facts being admitted.i[24] A question of fact, on the other hand,
exists when the doubt or difference arises as to the truth or falsity of facts or
when the query invites calibration of the whole evidence and relevancy of SO ORDERED.
specific surrounding as well as those in relation to each other and to the whole,
and the probability of the situation.i[25] While the petitioner may have
interspersed his arguments with matters which are factual in nature, the desired
dismissal of the petition cannot be granted on that basis. For the petition and
the core question pivoting on the DOJ Secretarys jurisdiction to issue his April
20, 2006 Resolution can very well be resolved on the basis of operative facts
already established or at least not disputed by the parties.

We must make it clear, however, that the withdrawal of the

Informations against the petitioner in Criminal Case Nos. 131883 and 131884 of
Branch 67 of the RTC of Pasig City, as directed in the April 20, 2006 Resolution of
the DOJ Secretary, is a matter addressed to the sole discretion of that court,
consistent with our ruling in Crespo v. Mogul.i[26]
G.R. No. 198172

WHEREFORE, the petition is GRANTED. Accordingly, the Decision of the

Court of Appeals dated September 25, 2006 in CA-G.R. SP No. 94361 is NULLIFED REGULUS DEVELOPMENT, INC., Petitioner,

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 CIVIL PROCEDURE

vs. The petitioner sent the respondent a letter to terminate the lease of the two
subject units. Due to the respondent’s refusal to vacate the units, the petitioner
ANTONIO DELA CRUZ, Respondent.
filed a complaint3 for ejectment before the Metropolitan Trial Court (MTC) of
Pasay City, Manila, on May 1, 2001.

DECISION
The MTC resolved the case in the petitioner’s favor and ordered the respondent
to vacate the premises, and pay the rentals due until the respondent actually
BRION, J.: complies.4

Before us is a petition for review on certiorari filed by petitioner Regulus The respondent appealed to the Regional Trial Court (RTC). Pending appeal, the
Development, Inc. (petitioner) to challenge the November 23, 2010 Decision1 respondent consigned the monthly rentals to the RTC due to the petitioner’s
and August 10, 2011 resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. refusal to receive the rentals.
105290. CA Associate Justice Juan Q. Enriquez, Jr. penned the rulings, concurred
in by Associate Justices Ramon M. Bato, Jr. and Fiorito S. Macalino.
The RTC affirmed5 the decision of the MTC in toto and denied the motion for
reconsideration filed by the respondent.
ANTECEDENT FACTS

CA-G.R. SP No. 69504: Dismissal of Ejectment Case

The petitioner is the owner of an apartment (San Juan Apartments) located at
San Juan Street, Pasay City. Antonio dela Cruz (respondent) leased two units
(Unit 2002-A and Unit 2002-B) of the San Juan Apartments in 1993 and 1994.
In a Petition for Review filed by the respondent, the CA reversed the lower
The contract of lease for each of the two units similarly provides a lease period
courts’ decisions and dismissed the ejectment case.6 On March 19, 2003, the
of one (1) month, subject to automatic renewals, unless terminated by the
dismissal of the case became final and executory.7
petitioner upon written notice.

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 CIVIL PROCEDURE

Orders dated July 25, 2003 and November 28, 2003 for payment of rentals due The respondent filed a petition for certiorari under Rule 65 before the CA to
under lease contracts assail the RTC Orders dated July 25, 2003 and November 28, 2003 (RTC orders),
which granted the petitioner’s motion to withdraw funds.

The petitioner filed a motion (to withdraw funds deposited by the defendant-
appellant as lessee)8 praying for the withdrawal of the rentals consigned by the The CA dismissed13 the petition and held that the assailed RTC Orders were
respondent with the RTC. issued pursuant to its equity jurisdiction, in accordance with Section 5, Rule
39,14 and Rules 515 and 616 of Rule 135 of the Rules of Court. The respondent’s
motion for reconsideration was similarly denied.
In an order dated July 25, 2003,9 the RTC granted the petitioner’s motion. The
RTC explained that the effect of the complaint’s dismissal would mean that
there was no complaint filed at all. The petitioner, however, is entitled to the G.R. SP No. 171429: Affirmed CA Ruling on RTC Orders
amount of rentals for the use and occupation of the subject units, as provided in
the executed contracts of lease and on the basis of justice and equity.
The respondent filed a petition for review on certiorari before this Court to
assail the decision of the CA in CA-G.R. SP No. 81277. In a resolution dated June
The court denied the respondent’s motion for reconsideration10 in an order 7, 2006,17 we denied the petition for insufficiency in form and for failure to
dated November 28, 2003.11 show any reversible error committed by the CA.

On the petitioner’s motion, the RTC issued a writ of execution on December 18, Our resolution became final and executory and an entry of judgment18 was
2003, to cause the enforcement of its order dated July 25, 2003.12 issued.

CA-G.R. SP No. 81277: Affirmed RTC Orders Execution of RTC Orders

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 CIVIL PROCEDURE

The petitioner returned to the RTC and moved for the issuance of a writ of On October 3, 2008, the respondent filed with the CA a Petition for Certiorari25
execution to allow it to proceed against the supersedeas bond the respondent with application for issuance of a temporary restraining order. The petition
posted, representing rentals for the leased properties from May 2001 to sought to nullify and set aside the orders of the RTC directing the levy of the
October 2001, and to withdraw the lease payments deposited by respondent respondent’s real property. The CA dismissed the petition. Thereafter, the
from November 2001 until August 2003.19 The RTC granted the motion.20 respondent filed a motion for reconsideration26 dated November 3, 2008.

The RTC issued an Alias Writ of Execution21 dated April 26, 2007, allowing the Pursuant to the order dated June 30, 2008, a public auction for the respondent’s
withdrawal of the rental deposits and the value of the supersedeas bond. property covered by TCT No. 136829 was held on November 4, 2008,27 where
the petitioner was declared highest bidder. Subsequently, the Certificate of
Sale28 in favor of the petitioner was registered.
The petitioner claimed that the withdrawn deposits, supersedeas bond, and
payments directly made by the respondent to the petitioner, were insufficient
to cover rentals due for the period of May 2001 to May 2004. Hence, the Meanwhile, on January 7, 2010, the respondent redeemed the property with
petitioner filed a manifestation and motion22 dated October 23, 2007, praying the RTC Clerk of Court, paying the equivalent of the petitioner’s bid price with
that the RTC levy upon the respondent’s property covered by Transfer legal interest. The petitioner filed a motion to release funds29 for the release of
Certificate of Title (TCT) No. 136829 to satisfy the judgment credit. the redemption price paid. The RTC granted30 the motion.

The RTC granted the petitioner’s motion in an order dated June 30, 2008.23 The On February 12, 2010, the respondent filed a manifestation and motion31
respondent filed a motion for reconsideration which was denied by the RTC in before the CA to withdraw the petition for the reason that the redemption of
an order dated August 26, 2008.24 the property and release of the price paid rendered the petition moot and
academic.

CA-G.R. SP No. 105290: Assailed the levy of the respondent’s property

Thereafter, the petitioner received the CA decision dated November 23, 2010,
which reversed and set aside the orders of the RTC directing the levy of the
respondent’s property. The CA held that while the approval of the petitioner’s

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 CIVIL PROCEDURE

motion to withdraw the consigned rentals and the posted supersedeas bond property; third, that the petition in CAG. R. SP No. 105290 should have been
was within the RTC’s jurisdiction, the RTC had no jurisdiction to levy on the dismissed outright for lack of signature under oath on the Verification and
respondent’s real property. Certification against Forum Shopping.

The CA explained that the approval of the levy on the respondent’s real property The respondent duly filed its comment33 and refuted the petitioner’s
could not be considered as a case pending appeal, because the decision of the arguments. On the first argument, respondent merely reiterated the CA’s
MTC had already become final and executory. As such, the matter of execution conclusion that the RTC had no jurisdiction to order the levy on respondent’s
of the judgment lies with the MTC where the complaint for ejectment was real property as it no longer falls under the allowed execution pending appeal.
originally filed and presented. On the second argument, the respondent contended that the levy on execution
and sale at public auction were null and void, hence the CA decision is not moot
and academic. On the third argument, the respondent simply argued that it was
The CA ordered the RTC to remand the case to the MTC for execution. The too late to raise the alleged formal defect as an issue.
petitioner filed its motion for reconsideration which was denied32 by the CA.

THE ISSUE
THE PETITION

The petitioner poses the core issue of whether the RTC had jurisdiction to levy
The petitioner filed the present petition for review on certiorari to challenge the on the respondent’s real property.
CA ruling in CA-G.R. SP No. 105290 which held that the RTC had no jurisdiction
to levy on the respondent’s real property.
OUR RULING

The petitioner argues: first, that the RTC’s release of the consigned rentals and
levy were ordered in the exercise of its equity jurisdiction; second, that the We grant the petition.
respondent’s petition in CA-G.R. SP No. 105290 was already moot and academic
with the conduct of the auction sale and redemption of the respondent’s real
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 CIVIL PROCEDURE

Procedural issue: Lack of notarial seal on the Verification and Certification reasons."36 Although the submission of a certificate against forum shopping is
against Forum Shopping is not fatal to the petition. deemed obligatory, it is not however jurisdictional.37

The petitioner alleged that the assailed CA petition should have been dismissed In the present case, the Verification and Certification against Forum Shopping
since the notary public failed to affix his seal on the attached Verification and were in fact submitted. An examination of these documents shows that the
Certification against Forum Shopping. notary public’s signature and stamp were duly affixed. Except for the notarial
seal, all the requirements for the verification and certification documents were
complied with.
We cannot uphold the petitioner’s argument.

The rule is that courts should not be unduly strict on procedural lapses that do
The lack of notarial seal in the notarial certificate34 is a defect in a document not really impair the proper administration of justice. The higher objective of
that is required to be executed under oath. procedural rules is to ensure that the substantive rights of the parties are
protected. Litigations should, as much as possible, be decided on the merits and
not on technicalities. Every party-litigant must be afforded ample opportunity
Nevertheless, a defect in the verification does not necessarily render the for the proper and just determination of his case, free from the unacceptable
pleading fatally defective. The court may order its submission or correction, or plea of technicalities.38
act on the pleading if the attending circumstances are such that strict
compliance with the Rule may be dispensed with in order that the ends of
justice may be served.35 The CA correctly refused to dismiss and instead gave due course to the petition
as it substantially complied with the requirements on the Verification and
Certification against Forum Shopping.
Noncompliance or a defect in a certification against forum shopping, unlike in
the case of a verification, is generally not curable by its subsequent submission
or correction, unless the covering Rule is relaxed on the ground of "substantial An issue on jurisdiction prevents the petition from becoming "moot and
compliance" or based on the presence of "special circumstances or compelling academic."

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 CIVIL PROCEDURE

The petitioner claims that the assailed CA petition should have been dismissed Even assuming that the case has been rendered moot due to the respondent’s
because the subsequent redemption of the property by the respondent and the redemption of the property, the CA may still entertain the jurisdictional issue
release of the price paid to the petitioner rendered the case moot and since it poses a situation capable of repetition yet evading judicial review.
academic.

Under this perspective, the CA correctly exercised its jurisdiction over the
A case or issue is considered moot and academic when it ceases to present a petition.
justiciable controversy because of supervening events, rendering the
adjudication of the case or the resolution of the issue without any practical use
or value.39 Courts generally decline jurisdiction over such case or dismiss it on Equity jurisdiction versus appellate jurisdiction of the RTC
the ground of mootness except when, among others, the case is capable of
repetition yet evades judicial review.40
The appellate jurisdiction of courts is conferred by law. The appellate court
acquires jurisdiction over the subject matter and parties when an appeal is
The CA found that there is an issue on whether the RTC had jurisdiction to issue perfected.42
the orders directing the levy of the respondent’s property. The issue on
jurisdiction is a justiciable controversy that prevented the assailed CA petition
from becoming moot and academic. On the other hand, equity jurisdiction aims to provide complete justice in cases
where a court of law is unable to adapt its judgments to the special
circumstances of a case because of a resulting legal inflexibility when the law is
It is well-settled in jurisprudence that jurisdiction is vested by law and cannot be applied to a given situation. The purpose of the exercise of equity jurisdiction,
conferred or waived by the parties. "Even on appeal and even if the reviewing among others, is to prevent unjust enrichment and to ensure restitution.43
parties did not raise the issue of jurisdiction, the reviewing court is not
precluded from ruling that the lower court had no jurisdiction over the case."41
The RTC orders which allowed the withdrawal of the deposited funds for the use
and occupation of the subject units were issued pursuant to the RTC’s equity
jurisdiction, as the CA held in the petition docketed as CA-G.R. SP No. 81277.

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 CIVIL PROCEDURE

The RTC’s equity jurisdiction is separate and distinct from its appellate
jurisdiction on the ejectment case. The RTC could not have issued its orders in
The CA erred when it concluded that the RTC exercised its appellate jurisdiction
the exercise of its appellate jurisdiction since there was nothing more to execute
in the ejectment case when it directed the levy of the respondent’s property.
on the dismissed ejectment case. As the RTC orders explained, the dismissal of
the ejectment case effectively and completely blotted out and cancelled the
complaint. Hence, the RTC orders were clearly issued in the exercise of the RTC’s
equity jurisdiction, not on the basis of its appellate jurisdiction. Furthermore, the order to levy on the respondent’s real property was consistent
with the first writ of execution issued by the RTC on December 18, 2003, to
implement the RTC orders. The writ of execution states that:
This Court takes judicial notice44 that the validity of the RTC Orders has been
upheld in a separate petition before this Court, under G.R. SP No. 171429
entitled Antonio Dela Cruz v. Regulus Development, Inc. xxx In case of [sic] sufficient personal property of the defendant cannot be
found whereof to satisfy the amount of the said judgment, you are directed to
levy [on] the real property of said defendant and to sell the same or so much
thereof in the manner provided by law for the satisfaction of the said judgment
The levy of real property was ordered by the RTC in the exercise of its equity
and to make return of your proceedings together with this Writ within sixty (60)
jurisdiction.
days from receipt hereof. (emphasis supplied)

The levy of the respondent’s property was made pursuant to the RTC orders
The subsequent order of the RTC to levy on the respondent’s property was
issued in the exercise of its equity jurisdiction, independent of the ejectment
merely a reiteration and an enforcement of the original writ of execution
case originally filed with the MTC.
issued.1âwphi1

An examination of the RTC order dated June 30, 2008, directing the levy of the
Since the order of levy is clearly rooted on the RTC Orders, the only question
respondent’s real property shows that it was based on the RTC order dated July
that needs to be resolved is which court has jurisdiction to order the execution
25, 2003. The levy of the respondent’s property was issued to satisfy the
of the RTC orders.
amounts due under the lease contracts, and not as a result of the decision in the
ejectment case.

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 CIVIL PROCEDURE

The RTC, as the court of origin, has jurisdiction to order the levy of the
respondent's real property.

Execution shall be applied for in the court of origin, in accordance with Section
1,45 Rule 39 of the Rules of Court.

The court of origin with respect to the assailed RTC orders is the court which
issued these orders. The RTC is the court with jurisdiction to order the execution
of the issued RTC orders.

Hence, the petitioner correctly moved for the issuance of the writ of execution
and levy of the respondent's real property before the RTC as the court of origin.

WHEREFORE, we hereby GRANT the petition for review on certiorari. The

decision dated November 23, 2010, and the resolution dated August 10, 2011,
of the Court of Appeals in CA-G.R. SP No. 105290 are hereby REVERSED and SET
ASIDE. The orders dated June 30, 2008, and August 26, 2008, of Branch 108 of SPOUSES DAISY and SOCRATES M. AREVALO,
the Regional Trial Court of Pasay City, are hereby REINSTATED. Costs against Petitioners,
respondent Antonio dela Cruz.
- versus

PLANTERS DEVELOPMENT BANK and THE REGISTER OF DEEDS OF PARAAQUE

SO ORDERED. CITY,

Respondents.

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 CIVIL PROCEDURE

G. R. No. 193415 remedy of preliminary injunction was based; and (2) petitioners are guilty of
forum-shopping.
April 18, 2012

The conflict between the parties arose from a Loan Agreement[6] petitioners
x--------------------------------------------------x
executed with respondent Planters Development Bank (Bank). Petitioners
DECISION obtained from respondent Bank a ₱2,100,000 loan secured by a mortgage on
their property situated in Muntinlupa. Due to their failure to pay the loaned
SERENO, J.: amount, the Bank undertook to extra-judicially foreclose the mortgage. The
This is a Rule 45 Petition for Review, which seeks to reverse the Decision dated Clerk of Court issued a Notice of Sheriffs Sale and set the auction sale on 21 and
24 March 2010[1] and Resolution dated 05 August 2010[2] of the Court of 28 April 2009.[7]
Appeals (CA) in CA-G.R. SP No. 110806. The CA affirmed the trial courts Decision
not to grant petitioners application for a writ of preliminary injunction.
Petitioners thereafter filed the First Complaint wherein they asked for the
nullification of interests, penalties and other charges, as well as for specific
As stated, this case involves the trial courts refusal to issue a writ of preliminary performance with an application for a temporary restraining order (TRO) and
injunction in favor of petitioner Spouses Daisy and Socrates M. Arevalo (Spouses writ of preliminary injunction to enjoin the then impending auction sale of their
Arevalo) based on their failure to comply with Section 2 of the Procedure in Muntinlupa property. They alleged that it was respondent Bank who breached
Extra-Judicial or Judicial Foreclosure of Real Estate Mortgages (Procedure on its obligations under the loan agreement; and that the auction sale was
Foreclosure)[3] issued by this Court. This procedure required them to pay twelve premature, arbitrary and confiscatory, as their inability to pay the loan was
percent (12%) per annum interest on the amount of the principal obligation, as caused and aggravated by the Banks illegal schemes.[8]
stated in the application for foreclosure sale, before an injunctive writ may issue
against the extra-judicial foreclosure of real estate mortgage.[4]
During the hearing of petitioners application for preliminary injunction, the trial
court ruled that, as a precondition for the issuance of the writ and pursuant to
We deny the instant Petition for the following reasons: (1) the Petition is moot, the Procedure on Foreclosure, petitioners were directed to pay 12% per annum
because the trial court has already dismissed the Complaint dated 07 April 2009 interest on the principal obligation as stated in the application for foreclosure
(the First Complaint),[5] upon which petitioners application for the provisional sale. Otherwise, the writ shall not issue. [9] The trial court further ruled that the

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 CIVIL PROCEDURE

evidence in support of their application was evidentiary in nature and should Meanwhile, proceedings for the First Complaint ensued at the trial court. Acting
thus be presented during trial.[10] on the Motion to Dismiss filed by respondent Bank, the trial court granted the
motion and dismissed the First Complaint for lack of cause of action.[20]
Petitioner Spouses Arevalo then proceeded again to the CA to appeal[21] the
Petitioner Spouses Arevalo sought to clarify the trial courts Order,[11] inquiring dismissal of the main case. The record does not reveal the status of the case.
whether they should be required to pay 12% per annum interest. They argue
that the rule requiring the payment of 12% interest as a condition for the
issuance of an injunctive writ against an impending foreclosure sale was With regard to the Rule 65 Petition to the CA questioning the non-issuance of
applicable only when applicant alleges that the interest rate is the writ, respondent Bank filed its Comment[22] thereon. Subsequently, the CA
unconscionable.[12] According to petitioners, nowhere in the Complaint did rendered the present assailed Decision dated 24 March 2010, affirming the
they allege that the interest charges were unconscionable.[13] Instead, what applicability of Section 2 of the Procedure on Foreclosure. It ruled that the trial
they raised in the First Complaint as their principal cause of action was the court was correct in refusing to issue the writ due to petitioners inexplicable
Banks deliberate withholding of loan releases on various pretexts and the failure and even stubborn refusal to pay the accrued interest at 12% per
propriety of the acts of the Bank charging them with interests and penalties due annum.[23] The CA held that the words used by petitioners in their First
to the delay caused by the Bank itself.[14] The trial court, however, affirmed its Complaint, such as manifestly unjust, purely potestative condition, void ab
earlier ruling.[15] initio, clearly contravenes morals, good customs and public policy, whimsical,
capricious violation of the legal and inherent principles of mutuality of contracts,
illegal, invalid, unilateral impositionsall of which pertained to interest imposed
Petitioners moved for reconsideration,[16] but their motion was denied.[17] by the Bankundeniably meant that petitioners were challenging the interest for
Consequently, they did not pay the required interest; thus, no writ of being unconscionable, while opting to use other words of similar import.[24]
preliminary injunction was issued in their favor.

Petitioners moved for reconsideration, but the CA denied their motion.[25]

Aggrieved, petitioner Spouses Arevalo filed a Rule 65 Petition[18] with the CA to
assail the Orders of the trial court involving the non-issuance of the injunctive
writ.[19] Aggrieved, they filed the instant Rule 45 Petition to assail the Decision of the CA
affirming the non-issuance of the injunctive writ.

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 CIVIL PROCEDURE

There are thus two (2) cases arising from similar facts and circumstances; more Petitioners filed their Reply[32] and Comment[33] to the charges on contempt.
particularly, the instant Rule 45 Petition and the appeal of the dismissal of the
main case with the CA.[26] It appears on record also that on 12 November 2010,
petitioners filed yet another Complaint dated 11 November 2010[27] (Second Based on the parties submissions, the following issues are presented for the
Complaint) with the trial court. This time, they prayed for the nullification of the resolution of this Court:
real estate mortgage, the extra-judicial foreclosure sale, and the subsequent
proceedings, with a prayer for preliminary injunction and TRO.
1. Whether the requirement to pay 12% interest per annum before the
issuance of an injunctive writ to enjoin an impending foreclosure sale is
With regard to the instant Rule 45 Petition, petitioners assail the Decision and applicable to the instant case; and
Resolution of the CA based on the following grounds:[28] (1) they were deprived
of the opportunity to present evidence on their application for a writ of
preliminary injunction; and (2) the CA erred when it required them to pay 12% 2. Whether petitioner Spouses Arevalo are guilty of forum-shopping and
interest per annum based on Section 2 of the Procedure on Foreclosure, when should consequently be punished for contempt.
the core of their First Complaint was not excessiveness of the interest but the
Banks supposed breach of their obligations in the loan agreement.[29]
RULING OF THE COURT

Respondent Bank, on the other hand, countered as follows:[30] (1) petitioner

Spouses Arevalo were not denied due process, since they were accorded several I. The issue of the applicability to this case of the requirement to pay
opportunities to be heard on their application for the issuance of an injunctive 12% interest per annum before the issuance of an injunctive writ to enjoin an
writ; (2) the CA correctly required petitioners to pay the interest; and (3) impending foreclosure sale is moot.
petitioner Spouses Arevalo were guilty of forum-shopping when they filed their
Second Complaint. For forum-shopping, respondent Bank likewise moved to
hold them in contempt,[31] arguing that they had sought similar reliefs in their
The Court rules that upon dismissal of the First Complaint by the trial court on
Second Complaint with the trial court as in the present Petition.
27 October 2009,[34] the issue of whether the writ of injunction should issue
has become moot. Although both parties failed to raise this particular argument
in their submissions, we deny the instant Petition on this ground.
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 CIVIL PROCEDURE

act or threatening the immediate commission of an act that will cause

irreparable injury or destroy the status quo of the controversy before a full
A case becomes moot and academic when there is no more actual controversy
hearing can be had on the merits of the case.
between the parties or useful purpose that can be served in passing upon the
merits.[35]

xxxxxxxxx

There remains no actual controversy in the instant Petition because the First
Complaint has already been dismissed by the trial court. Upon its dismissal, the
The present case having been heard and found dismissible as it was in fact
question of the non-issuance of a writ of preliminary injunction necessarily died
dismissed, the writ of preliminary injunction is deemed lifted, its purpose as a
with it.
provisional remedy having been served, the appeal therefrom notwithstanding.

A writ of preliminary injunction is a provisional remedy. It is auxiliary to, an

Unionbank v. Court of Appeals enlightens:
adjunct of, and subject to the outcome of the main case.[36] Thus, a writ of
preliminary injunction is deemed lifted upon dismissal of the main case, any
appeal therefrom notwithstanding,[37] as this Court emphasized in Buyco v.
Baraquia[38] from which we quote: xxx a dismissal, discontinuance or non-suit of an action in which a restraining
order or temporary injunction has been granted operates as a dissolution of the
restraining order or temporary injunction, regardless of whether the period for
filing a motion for reconsideration of the order dismissing the case or appeal
The writ is provisional because it constitutes a temporary measure availed of
therefrom has expired. The rationale therefor is that even in cases where an
during the pendency of the action and it is ancillary because it is a mere incident
appeal is taken from a judgment dismissing an action on the merits, the appeal
in and is dependent upon the result of the main action.
does not suspend the judgment, hence the general rule applies that a temporary
injunction terminates automatically on the dismissal of the action. (Emphases
supplied.)[39]
It is well-settled that the sole object of a preliminary injunction, whether
prohibitory or mandatory, is to preserve the status quo until the merits of the
case can be heard. It is usually granted when it is made to appear that there is a
substantial controversy between the parties and one of them is committing an
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 CIVIL PROCEDURE

There will be no practical value in resolving the question of the non-issuance of dispute.[47] There must be a contrariety of legal rights that can be interpreted
an injunctive writ in this case. Setting aside the assailed Orders is manifestly and enforced on the basis of existing law and jurisprudence.[48]
pointless, considering that the First Complaint itself has already been dismissed,
and there is nothing left to enjoin. The reversal of the assailed Orders would
have a practical effect only if the dismissal were set aside and the First This Court cannot issue a mere advisory opinion in relation to the applicability of
Complaint reinstated.[40] In this case, however, petitioner Spouses Arevalo the provisions of the Procedure on Foreclosure.
admitted to the impossibility of the reinstatement of the First Complaint when
they filed their Second Complaint.[41]
II. Petitioners are guilty of forum-shopping.

Even petitioners plea that this Court give due course to the Petition for a ruling
on the proper application of the Procedure on Foreclosure[42] cannot compel us Petitioners have committed two distinct acts of forum-shopping,[49] namely: (1)
to resolve this issue. petitioners willfully and deliberately went to different courts to avail themselves
of multiple judicial remedies founded on similar facts and raising substantially
similar reliefs, and (2) they did not comply with their undertaking to report the
The Constitution provides that judicial power includes the duty of the courts of filing of the Second Complaint within five days from its filing.
justice to settle actual controversies involving rights which are legally
demandable and enforceable.[43] The exercise of judicial power requires an
actual case calling for it. The courts have no authority to pass upon issues
through advisory opinions, or to resolve hypothetical or feigned problems or
friendly suits collusively arranged between parties without real adverse
interests.[44] Furthermore, courts do not sit to adjudicate mere academic A. Petitioners filed multiple suits based on similar facts while seeking similar
questions to satisfy scholarly interest, however intellectually challenging.[45] As reliefsacts proscribed by the rules on forum-shopping.
a condition precedent to the exercise of judicial power, an actual controversy
between litigants must first exist.[46] An actual case or controversy involves a
conflict of legal rights, an assertion of opposite legal claims susceptible of
We rule that petitioners were guilty of willful and deliberate forum-shopping
judicial resolution, as distinguished from a hypothetical or abstract difference or
when they filed their Second Complaint with the trial court insofar as they
undertook to obtain similar reliefs as those sought in the instant Petition.
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 CIVIL PROCEDURE

In Yu v. Lim,[54] this Court enumerated the requisites of forum-shopping, as

follows:
Respondent Bank argues that the rights asserted by petitioners, as well as the
reliefs petitioners seek in the instant Petition, are identical to those raised in
their Second Complaint.[50]
Forum-shopping exists when the elements of litis pendentia are present or
where a final judgment in one case will amount to res judicata in another. Litis
pendentia requires the concurrence of the following requisites: (1) identity of
Petitioners, on the other hand, counter that the disparity between the two cases
parties, or at least such parties as those representing the same interests in both
lies in the issue to be resolved. More particularly, they allege that the issue in
actions; (2) identity of rights asserted and reliefs prayed for, the reliefs being
this Petition is the summary application of the payment of 12% interest per
founded on the same facts; and (3) identity with respect to the two preceding
annum as a precondition for the issuance of a writ, as opposed to the issue in
particulars in the two cases, such that any judgment that may be rendered in
the Second Complaint involving the validity of the real estate mortgage and
the pending case, regardless of which party is successful, would amount to res
compliance with the rules on the holding of the extrajudicial foreclosure
judicata in the other case.[55]
sale.[51]

What is essential in determining the existence of forum-shopping is the vexation

Forum shopping is the act of litigants who repetitively avail themselves of
caused the courts and litigants by a party who asks different courts and/or
multiple judicial remedies in different fora, simultaneously or successively, all
administrative agencies to rule on similar or related causes and/or grant the
substantially founded on the same transactions and the same essential facts and
same or substantially similar reliefs, in the process creating the possibility of
circumstances; and raising substantially similar issues either pending in or
conflicting decisions being rendered upon the same issues.[56]
already resolved adversely by some other court; or for the purpose of increasing
their chances of obtaining a favorable decision, if not in one court, then in
another.[52] The rationale against forum-shopping is that a party should not be
A comparison of the reliefs sought by petitioners in the instant Petition and in
allowed to pursue simultaneous remedies in two different courts, for to do so
their Second Complaint confirms that they are substantially similar on two
would constitute abuse of court processes which tends to degrade the
points: (1) revocation and cancellation of the Certificate of Sale and (2)
administration of justice, wreaks havoc upon orderly judicial procedure, and
permanent injunction on any transfer and/or consolidation of title in favor of
adds to the congestion of the heavily burdened dockets of the courts.[53]
respondent Bank. These similarities undoubtedly create the possibility of
conflicting decisions from different courts:

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 CIVIL PROCEDURE

of Sale on November 13, 2009 and other proceedings had thereafter, the
petition be given due course and judgment be rendered as follows:
Instant Petition

Second Complaint
1. Making the injunction permanent.

WHEREFORE, it is most respectfully prayed that immediately upon filing of this

petition, the same be given due course, and an order issue, ex parte:

2. Issuing a writ of mandatory injunction for the respondent Ex-Officio

Sheriff to undo, revoke and cancel the Certificate of Sale issued and/or directing
the Register of Deeds to undo, revoke and cancel the registration of the
(1) A Resolution be issued directing the Ex-Officio Sheriff and his Certificate of Sale and/or defer any consolidation of title in favor of respondent
Assisting Sheriff to undo, cancel, revoke the Certificate of Sale they issued; bank pending final resolution of this petition.

(2) Enjoining the Register of Deeds of Paranaque (or any of her 3. Reversing and setting aside the Decision of the Court of Appeals
subordinates, agents, representatives and persons acting in their behalf to cease dated March 24, 2010 and Resolution dated August 5, 2010.[57] (Emphasis
and desist from allowing any transfer and/or consolidation of respondents supplied.)
banks title to the property in question and an order be issued directing the
Register of Deeds to undo, cancel and revoke the registration of the Certificate
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 CIVIL PROCEDURE

WHEREFORE, it is respectfully prayed of the Honorable Court that pending

consideration and hearing on the principal reliefs herein prayed for, a
3. After due hearing, the preliminary injunction be declared permanent. x x
Temporary Restraining order (TRO) and/or Writ of Preliminary Injunction be
x[58] (Emphases supplied.)
issued immediately restraining and/or stopping the defendants Ex-Officio Sheriff
Atty. Jerry R. Toledo and Deputy Sheriff Paulo Jose N. Cusi from executing and
issuing a final deed of sale in favor of the defendant bank and further ordering
the defendant Registrar of Deeds of Paranaque City to hold in abeyance the As illustrated above, there is a clear violation of the rules on forum-shopping, as
registration of the final deed of sale and other documents of consolidation the Court is being asked to grant substantially similar reliefs as those that may
pending resolution of this Honorable Court. Plaintiffs pray for the following also be granted by the trial court, in the process creating a possibility of
additional reliefs: conflicting decisions.

We emphasize that the grave evil sought to be avoided by the rule against
forum-shopping is the rendition by two competent tribunals of two separate
and contradictory decisions.[59] To avoid any confusion, this Court adheres
strictly to the rules against forum shopping, and any violation of these rules
1. After hearing on the merits, the Real Estate Mortgage be declared and
results in the dismissal of a case.[60] The acts committed and described herein
rescinded and/or null and void;
can possibly constitute direct contempt.[61]

B. Petitioners did not report the filing of their Second Complaint within five (5)
days, in violation of their undertaking to do so.

2. The Certificate of Sale [dated November 4, 2009] issued by the

defendant Sheriffs and its subsequent registration on November 13, 2009 with
Aside from the fact that petitioners sought substantially similar reliefs from
the Registry of Deeds be declared null and void;
different courts, they likewise failed to disclose to this Court the filing of their

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 CIVIL PROCEDURE

Second Complaint within five (5) days from its filing, in violation of their While in a limited sense, petitioners have already been given the chance to
previous undertaking to do so.[62] rebut the prayer to hold them in contempt, We hereby provide sufficient
avenue for them to explain themselves by requiring them to show cause, within
fifteen (15) days, why they should not be held in direct and indirect contempt of
Every litigant is required to notify the court of the filing or pendency of any court.
other action or such other proceeding involving the same or similar action or
WHEREFORE, the instant Petition for Review filed by Spouses Daisy Arevalo and
claim within five (5) days of learning of that fact.[63] Petitioners claim that it
Socrates M. Arevalo is hereby DENIED. The Decision dated 24 March 2010 and
was merely due to inadvertence that they failed to disclose the said filing within
Resolution dated 05 August 2010 issued by the Court of Appeals in CA-G.R. SP
five (5) days, contrary to their undertaking. [64]
No. 110806 are AFFIRMED.

Accordingly, petitioners are required to SHOW CAUSE, within fifteen (15) days
This Court is not inclined to accept this self-serving explanation. We cannot from receipt of this Decision, why they should not be held in contempt; more
disregard the glaring fact that respondents had to call the attention of specifically: (a) for direct contempt of courtfor availing of multiple judicial
petitioners to the said requirement before the latter admitted that they had remedies founded on similar facts and raising substantially similar reliefs from
indeed filed their Second Complaint. different courts; and (b) for indirect contempt of courtfor not complying with
their undertaking to report the filing of the Second Complaint within five days
from its filing.
As previously established, petitioners have violated two (2) components of
forum-shopping, more particularly: (1) petitioners willfully and deliberately went
to different courts to avail themselves of multiple judicial remedies founded on SO ORDERED.
similar facts and raising substantially similar reliefs, an act which may be
G.R. No. 178611 January 14, 2013
punishable as direct contempt;[65] and (2) they did not comply with their
undertaking to report the filing of the Second Complaint within five days from ESTRELLA ADUAN ORPIANO, Petitioner,
its filing. The latter action may also possibly be construed as a separate count for vs.
indirect contempt. SPOUSES ANTONIO C. TOMAS and MYRNA U. TOMAS, Respondents.

DECISION

DEL CASTILLO, J.:

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 CIVIL PROCEDURE

Considerations of expediency cannot justify a resort to procedural shortcuts. court), seeking collection of the balance of the price in the amount of
The end does not justify the means; a meritorious case cannot overshadow the ₱4,314,100.00 supposedly left unpaid by the Tomas spouses, with damages.[4]
condition that the means employed to pursue it must be in keeping with the
During the pendency of the collection case, Alejandro passed away. His heirs,
Rules.
Estrella included, were substituted in his stead in the collection case. Estrella
Assailed in this Petition for Review on Certiorari1 are the May 7, 2007 Decision2 moved to amend the Complaint to one for rescission/annulment of sale and
of the Court of Appeals (CA) which dismissed the petition in CA-G.R. SP No. cancellation of title, but the court denied her motion. She next moved to be
97341, and its June 28, 2007 Resolution3 denying petitioner's motion for dropped as party plaintiff but was again rebuffed.
reconsideration.
On June 11, 2005, Estrella filed Civil Case No. Q-05-56216 (the annulment case)
Factual Antecedents for annulment of the March 1996 sale and cancellation of TCT No. N-152326,
with damages, against the Tomas spouses and the Register of Deeds of Quezon
Petitioner Estrella Aduan Orpiano (Estrella) is the widow of Alejandro Orpiano
City which was impleaded as a nominal party.5 The case was raffled to Branch 97
(Alejandro). Part of their conjugal estate is an 809.5-square meter lot in Quezon
of the Quezon City RTC (the annulment court). In her Complaint, Estrella claimed
City covered by Transfer Certificate of Title (TCT) No. RT-23468 (the lot).
that the 1979 declaration of her absence and accompanying authority to sell the
In 1979, a Decision was rendered by the defunct Juvenile and Domestic lot were obtained by Alejandro through misrepresentation, fraud and deceit,
Relations Court (JDRC) of Quezon City declaring Estrella an absent/absentee adding that the May 1979 JDRC Decision was not published as required by law
spouse and granting Alejandro the authority to sell the lot. The JDRC Decision and by the domestic relations court. Thus, the declaration of absence and
was annotated on the back of TCT No. RT-23468. Alejandro’s authority to sell the lot are null and void. Correspondingly, the
ensuing sale to the Tomas spouses should be voided, and TCT No. N-152326
On March 19, 1996, Alejandro sold the lot on installment basis to respondent cancelled.
spouses Antonio and Myrna Tomas (the Tomas spouses) for ₱12,170,283.00.
That very same day, a new title – TCT No. N-152326 – was issued in the name of In their Answer to the annulment Complaint, the Tomas spouses prayed for the
the Tomas spouses despite the fact that the purchase price has not been paid in dismissal thereof on the ground of forum shopping, arguing that the filing of the
full, the spouses having been given until December of that same year to annulment case was prompted by the denial of Estrella’s motion initiated in the
complete their payment. collection case to amend the Complaint to one for annulment of sale. The
annulment case is Estrella’s attempt at securing a remedy which she could not
On October 28, 1996, Alejandro filed Civil Case No. Q-96-29261 (the collection obtain in the collection case. The Tomas spouses added that the dismissal of the
case) in the Regional Trial Court (RTC) of Quezon City, Branch 226 (the collection annulment case would preclude the possibility that the two courts might render
conflicting decisions.
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 CIVIL PROCEDURE

After pre-trial in the annulment case, the court proceeded to tackle the issue of the sale between Alejandro and the Tomas spouses is a valid sale. This then
forum shopping. The parties submitted their respective memoranda touching on would prevent a declaration of nullity of the sale in the annulment case.
the sole issue of whether Estrella is guilty of forum shopping.
Accordingly, the CA dismissed Estrella’s Petition for Certiorari. Her Motion for
Ruling of the Regional Trial Court Reconsideration was likewise denied, hence the present Petition.

On September 25, 2006, the trial court issued an Order6 dismissing the Issue
annulment case. It sustained the view taken by the Tomas spouses that Estrella
The sole issue to be resolved in this case is whether there is indeed forum
filed the annulment case only because the collection court denied her motion to
shopping.
amend the case to one for annulment of the sale, and thus the annulment case
was Estrella’s attempt at obtaining a remedy which she could not secure in the Petitioner’s Arguments
collection case. It added that because the two cases involve the same subject
matter, issues, and parties, there indeed is a possibility that conflicting decisions Estrella argues that it was Alejandro and not she who initiated the collection
could be rendered by it and the collection court, the possibility made even case, and that she, their two children, and Alejandro’s four illegitimate children
greater because the two cases involve antithetical remedies. were merely substituted in the case as his heirs by operation of law; thus, she
should not be bound by the collection case. She claims that in the first place, she
Estrella moved for reconsideration but the court was unmoved. was not privy to Alejandro’s sale of the lot to the Tomas spouses. Having been
unwillingly substituted in the collection case, she forthwith moved to amend the
Ruling of the Court of Appeals
Complaint in order to include, as one of the remedies sought therein, annulment
On December 27, 2006, Estrella filed with the CA a Petition for Certiorari7 of the sale insofar as her conjugal share in the lot is concerned. But the court
questioning the September 25, 2006 Order of the annulment court. The denied her motion. Next, she moved to be dropped or stricken out as plaintiff to
appellate court, however, could not be persuaded. Finding no grave abuse of the collection case, but again, the trial court rebuffed her.
discretion in the annulment court's dismissal of the annulment case, the CA
Estrella maintains that on account of these repeated denials, she was left with
found that Estrella was indeed guilty of forum shopping in filing the annulment
no other alternative but to institute the annulment case. She claims that since
suit while the collection case was pending. Applying the test articulated in a
the collection case does not further her interest — which is to seek annulment
multitude of decided cases – that where a final judgment in one case will
of the sale and recover her conjugal share — and the collection court would not
amount to res judicata in another – it follows that there is forum shopping. The
grant her motions to amend and to be dropped or stricken out as party plaintiff
CA held that a final judgment in the collection case ordering the Tomas spouses
therein, she thus has a right to maintain a suit to have the sale annulled. It is
to pay the supposed balance of the price will necessarily result in a finding that
therefore erroneous for the CA to state that she initiated the annulment suit

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 CIVIL PROCEDURE

only for the purpose of obtaining a favorable ruling in said court, which she The petition must be denied.
could not achieve in the collection court.
"Forum shopping is defined as an act of a party, against whom an adverse
She further adds that there is obviously no identity of parties, cause of action, or judgment or order has been rendered in one forum, of seeking and possibly
reliefs prayed for between the collection and annulment cases; the two involve getting a favorable opinion in another forum, other than by appeal or special
absolutely opposite reliefs. She stresses the fact that she is seeking annulment civil action for certiorari. It may also be the institution of two or more actions or
of the sale with respect only to her conjugal share, and not those of her co-heirs. proceedings grounded on the same cause on the supposition that one or the
other court would make a favorable disposition. x x x It is expressly prohibited x
Respondents’ Arguments
x x because it trifles with and abuses court processes, degrades the
The Tomas spouses, apart from echoing the trial court and the CA, emphasize administration of justice, and congests court dockets. A willful and deliberate
that the rule prohibiting forum shopping precisely seeks to avoid the situation violation of the rule against forum shopping is a ground for summary dismissal
where the two courts – the collection court and the annulment court – might of the case, and may also constitute direct contempt."8
render two separate and contradictory decisions. If the annulment case is
Although the Court believes that Estrella was not prompted by a desire to trifle
allowed to proceed, then it could result in a judgment declaring the sale null and
with judicial processes, and was acting in good faith in initiating the annulment
void, just as a decision in the collection case could be issued ordering them to
case, still the said case should be dismissed because it produces the same effect
pay the balance of the price, which is tantamount to a declaration that the sale
which the rule on forum shopping was fashioned to preclude. If the collection
is valid.
case is not dismissed and it, together with the annulment case, proceeds to
They add that Estrella could no longer question the 1979 JDRC Decision, having finality, not only do we have a possibility of conflicting decisions being rendered;
failed to challenge the same immediately upon obtaining notice thereof; she did an unfair situation, as envisioned by the Tomas spouses, might arise where after
not even bother to have her declaration of absence lifted. They claim that after having paid the balance of the price as ordered by the collection court, the
the lapse of 26 years, prescription has finally set in. They likewise argue that if cancellation of the TCT and return of the property could be decreed by the
both cases are allowed to remain pending, a ridiculous situation could arise annulment court. Besides, allowing the two cases to remain pending makes
where, after having paid the balance as ordered by the collection court, they litigation simply a game of chance where parties may hedge their position by
could lose not only the lot but also their payments in case a decision in the betting on both sides of the case, or by filing several cases involving the same
annulment court is rendered nullifying and canceling the sale and ordering the issue, subject matter, and parties, in the hope of securing victory in at least one
return of the lot to Alejandro’s heirs, Estrella included. of them. But, as is already well known, the "trek to justice is not a game of
chance or skill but rather a quest for truth x x x."9
Our Ruling

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 CIVIL PROCEDURE

Moreover, allowing Estrella to proceed with the annulment case while the her co-heirs, which is precisely to obtain payment of the supposed balance of
collection case is still pending is like saying that she may accept the deed of sale the sale price.
and question it at the same time. For this is the necessary import of the two
Nor may Estrella simultaneously maintain the two actions in both capacities, as
pending cases: joining as plaintiff in the collection case implies approval of the
heir in the collection case and as separate owner of her conjugal share in the
deed, while suing to declare it null and void in the annulment court entails a
annulment case. This may not be done, because, as was earlier on declared, this
denunciation thereof. This may not be done. "A person cannot accept and reject
amounts to simultaneously accepting and rejecting the same deed of sale. Nor is
the same instrument"10 at the same time. It must be remembered that "the
it possible to prosecute the annulment case simultaneously with the collection
absence of the consent of one (spouse to a sale) renders the entire sale null and
case, on the premise that what is merely being annulled is the sale by Alejandro
void, including the portion of the conjugal property pertaining to the spouse
of Estrella’s conjugal share. To repeat, the absence of the consent of one spouse
who contracted the sale."11
to a sale renders the entire sale null and void, including the portion of the
The Court realizes the quandary that Estrella — motivated by the solitary desire conjugal property pertaining to the spouse who contracted the sale.
to protect her conjugal share in the lot from what she believes was Alejandro’s
Undoubtedly, Estrella had the right to maintain the annulment case as a
undue interference in disposing the same without her knowledge and consent
measure of protecting her conjugal share. There thus exists a just cause for her
— finds herself in. While raring to file the annulment case, she has to first cause
to be dropped as party plaintiff in the collection case so that she may institute
the dismissal of the collection case because she was by necessity substituted
and maintain the annulment case without violating the rule against forum
therein by virtue of her being Alejandro’s heir; but the collection court
shopping. Unless this is done, she stands to lose her share in the conjugal
nonetheless blocked all her attempts toward such end. The collection court
property. But the issue of whether the sale should be annulled is a different
failed to comprehend her predicament, her need to be dropped as party to the
matter altogether.1âwphi1
collection case in order to pursue the annulment of the sale.
Under the Rules, parties may be dropped or added by order of the court on
As plaintiff in the collection case, Estrella – though merely succeeding to
motion of any party or on its own initiative at any stage of the action and on
Alejandro’s rights – was an indispensable party, or one without whom no final
such terms as are just.13 Indeed, it would have been just for the collection court
determination can be had in the collection case.12 Strictly, she may not be
to have allowed Estrella to prosecute her annulment case by dropping her as a
dropped from the case. However, because of her dual identity, first as heir and
party plaintiff in the collection case, not only so that she could protect her
second as owner of her conjugal share, she has been placed in the unique
conjugal share, but also to prevent the interests of her co-plaintiffs from being
position where she has to succeed to her husband’s rights, even as she must
adversely affected by her conflicting actions in the same case. By seeking to be
protect her separate conjugal share from Alejandro’s perceived undue
dropped from the collection case, Estrella was foregoing collection of her share
disposition. She may not seek to amend the cause of action in the collection
case to one for annulment of sale, because this adversely affects the interests of
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 CIVIL PROCEDURE

in the amount that may be due and owing from the sale. It does not imply a
waiver in any manner that affects the rights of the other heirs.

While Estrella correctly made use of the remedies available to her – amending
the Complaint and filing a motion to drop her as a party – she committed a
mistake in proceeding to file the annulment case directly after these remedies
were denied her by the collection court without first questioning or addressing
the propriety of these denials. While she may have been frustrated by the
collection court’s repeated rejection of her motions and its apparent inability to MAKING ENTERPRISES, INC. AND G.R. No. 152239
appreciate her plight, her proper recourse nevertheless should have been to file SPOUSES JOAQUIN TAMANO AND
a petition for certiorari or otherwise question the trial court’s denial of her ANGELITA TAMANO,
motion to be dropped as plaintiff, citing just reasons which call for a ruling to Present:
the contrary. Issues arising from joinder or misjoinder of parties are the proper Petitioners,
subject of certiorari.14

In fine, we reiterate that considerations of expediency cannot justify a resort to CORONA, C.J.,
procedural shortcuts. The end does not justify the means; a meritorious case
Chairperson,
cannot overshadow the condition that the means employed to pursue it must
be in keeping with the Rules. LEONARDO-DE CASTRO,
- versus -
WHEREFORE, premises considered, the Petition is DENIED for lack of merit. BERSAMIN,

SO ORDERED. DEL CASTILLO, and

VILLARAMA, JR., JJ.

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 CIVIL PROCEDURE

JOSE MARFORI AND EMERENCIANA Promulgated: shall become the PPAs sole property. Marfori then incurred huge expenses for
MARFORI, the rehabilitation of the building and leased some portions of the building to the
PPA.
Respondents.
August 17, 2011
Thereafter, on April 10, 1987, Marfori executed a dacion en pago and
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x assignment of rights transferring the ownership of the Marsman Building to
Making Enterprises, Inc. (Making), on the condition that Making would assume
all of Marforis obligations.i[3] Making was represented by its General Manager,
DECISION Cristina Lee, and Executive Vice-President, Angelita Ma. Tamano, in the said
transaction.
VILLARAMA, JR., J.:
Marforis wife, Emerenciana, alleged that she did not consent to the transfer of
Before us is a petition for review on certiorari assailing the July 24, 2000 the Marsman Building to Making. She claimed that the building is part of their
Decisioni[1]of the Court of Appeals (CA) in CA-G.R. SP No. 43076. The CA had conjugal property as it was acquired during their marriage.i[4] On April 12, 1994,
ordered the issuance of writs of certiorari and prohibition permanently she filed with the RTC of Manila a complaint against Making, the spouses
enjoining the prosecution of Jose Marfori in Criminal Case Nos. 170660 to Joaquin and Angelita Tamano, the spouses Lester and Cristina Lee, and the PPA
170676 before the Metropolitan Trial Court (MeTC) of Caloocan City, and for Recovery of Ownership, Annulment of Contract with Damages, Receivership,
ordered the appointment of a receiver in Civil Case No. 94-70092, pending Accounting and Preliminary Injunction with Prayer for Restraining Order.i[5] She
before the Regional Trial Court (RTC) of Manila. Likewise assailed is the sought, among others, to annul the dacion en pago and assignment of rights and
appellate courts Resolutioni[2]dated February 12, 2002, denying petitioners prayed for the appointment of a receiver to preserve the rentals of the building.
motion for reconsideration. She also prayed for the issuance of a writ of preliminary injunction to enjoin the
The antecedent facts follow: PPA from paying its rentals to Making and from approving the transfer of the
Marsman Building.
On June 4, 1984, Jose F. Marfori acquired a five-storey commercial building,
known as the Marsman Building, from the Development Bank of the Philippines. In an Orderi[6]dated October 18, 1995, Judge Catalino Castaeda, Jr. of the RTC,
As the land on which the building stood was owned by the Philippine Ports Branch 17, of Manila denied the prayer for the issuance of a writ of preliminary
Authority (PPA), Marfori entered into a contract of lease of the said lot with the injunction and the application for receivership.
PPA. The contract was for a period of twenty-five (25) years, renewable for a The RTC noted that in 1987, Emerencianas complaint for the same cause of
similar period, and was subject to the condition that upon the expiration of action was dismissed by the RTC, Branch 51, of Manila for improper venue.i[7]
lease, the building and all other improvements found on the leased premises
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The RTC was not convinced that she would indeed suffer grave injustice and City Prosecutor to conduct a reinvestigation. Upon reinvestigation, Assistant City
irreparable damages if a writ of injunction enjoining the PPA from paying rentals Prosecutor Afable E. Cajigal rendered a joint resolution,i[13]which was later
to Making and approving the transfer of the Marsman Building is not issued approved by City Prosecutor Gabriel N. Dela Cruz, finding cause to dismiss the
considering that she re-filed her complaint only on April 12, 1994, or more than criminal complaints against Marfori. On August 11, 1995, Asst. City Prosecutor
six years after her first complaint was dismissed. As regards her prayer for the Cajigal filed a motion to dismiss before the RTC of Caloocan City, which motion
appointment of a receiver, the RTC held that the appointment of a receiver is an was granted by Judge Emilio L. Leachon, Jr. on the same date.i[14]
equitable relief and a court of equity will not ordinarily appoint a receiver where
Claiming that she was not notified of the order for reinvestigation, Angelita Ma.
the rights of the parties depend on the determination of adverse claims of legal
Tamano moved to set aside the joint resolution.i[15]Prosecutor Cajigal then
title to real property and one party is in possession.
reversed his previous findings and recommended the setting aside of the joint
Emerenciana moved for reconsideration of the order. However, the RTC denied resolution and dismissal order.i[16]Said resolution was approved by 1st Assistant
the motion.i[8] City Prosecutor Rosauro Silverio. Thus, Asst. City Prosecutor Cajigal filed
seventeen (17) informations for violation of B.P. 22 against Marfori before the
Not satisfied, Emerenciana filed before the CA a petition for certiorari and
MeTC of Caloocan City.i[17] Warrants for Marforis arrest were also issued by
receivership with prayer for preliminary injunction, which was docketed as CA-
Judge Marcelino L. Sayo.
G.R. SP No. 39161. On March 29, 1996, however, the CA dismissed the petition
for being insufficient in form and substance.i[9] Reconsideration of the dismissal Aggrieved, Marfori filed with the Caloocan City RTC a petitioni[18] for certiorari
was likewise denied in a Resolution dated November 29, 1996.i[10] and injunction with prayer for temporary restraining order against Judge Sayo;
Asst. City Prosecutors Cajigal, Silverio and Dela Cruz; and Making, who was
Meanwhile, with regard to the criminal cases mentioned at the outset,
represented by Tamano. Marfori maintained that all the checks were drawn in
records show that in 1987, Marfori issued twenty-two (22) checks in favor of
favor of Cristina Lee, but the prosecutors deliberately made it appear in the new
Cristina Lee. Lee deposited the checks to her account with the Philippine Bank of
informations that the checks were drawn in favor of Making. He prayed that
Communications, but the same were dishonored for the reason of Account
Judge Sayo be enjoined from proceeding with the trial of the criminal cases and
Closed. Thus, she filed complaints against Marfori for estafa and violation of
that the informations for violation of B.P. 22, as well as the warrants of arrest,
Batas Pambansa Blg. 22 with the Prosecutor's Office of Caloocan City.i[11]
be declared void.
Before he could be arraigned, Marfori sought reinvestigation of the
Making, represented by Tamano, filed a motion to dismiss arguing that the
criminal cases against him, arguing that he was not given the opportunity to
general rule is that a criminal prosecution may not be restrained by
present controverting evidence to prove that the checks were already paid or
injunction.i[19]
liquidated.i[12]The RTC granted Marforis motion and ordered the Office of the

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 CIVIL PROCEDURE

In an Order dated April 18, 1997, the RTC granted Makings motion and the real purpose of their action by cleverly lumping together the civil and the
dismissed Marfori's petition.i[20] criminal cases in their Consolidated Petition.

Meanwhile, on November 27, 1996, Marfori and his wife had filed with On July 24, 2000, the CA rendered the assailed Decision, to wit:
this Court a Consolidated Petitioni[21]docketed as G.R. No. 126841 asking among
WHEREFORE, premises considered, the petition filed by petitioners Jose and
others, for the appointment of a receiver to preserve the rentals collected from
Emerenciana Marfori is hereby GRANTED, and judgment rendered as follows:
the Marsman Building and the issuance of an injunction to enjoin the
implementation of the warrants of arrest issued against him. Respondents 1) That writs of certiorari and prohibition be issued permanently enjoining
argued that the filing of the criminal cases against Marfori had no factual and the further prosecution of Criminal Case Nos. 170660 to 170676, inclusive,
legal justification and hence, should be enjoined. against petitioner Jose Marfori; and
The Court, after finding no special and important reasons for it to take 2) That, after posting of a bond in an amount to be determined by the Trial
cognizance of the case in the first instance, referred the petition to the CA for Court, let a receiver be appointed in Civil Case No. 94-70092, to take custody,
consideration and adjudication on the merits.i[22] manage, and administer the Marsman Building and all rents collected
therefrom, during the pendency of the proceedings.
On February 16, 1998, respondents filed an Amended Consolidated
Petitioni[23]with the CA. They added that Judge Castaeda, Jr. likewise erred in SO ORDERED.i[25]
denying in Civil Case No. 94-70092 their motion to present crucial documents
wherein Tamano allegedly made a declaration against her interest. They likewise The CA brushed aside petitioners' argument that respondents were
reiterated in their amended petition their prayer for the appointment of a guilty of forum shopping, holding that technical rules of procedure must be
receiver to take over, manage, and administer the Marsman Building. relaxed in the interest of substantial justice.

In their Comment, petitioners countered that respondents had lost all their As to the order granting the prayer for the appointment of a receiver, the CA
rights to the building after they ceded it to Making in 1987. Petitioners also ruled that respondents have sufficiently proven their interest in the Marsman
charged respondents with forum shopping.i[24]They argued that when Building. The CA found that unless a receiver is appointed, there is a danger of
Emerencianas application for a writ of preliminary injunction and receivership loss or material injury considering that petitioners possess absolute control of
was denied by the RTC, she appealed the denial to the CA. When she failed to the building.
obtain a favorable action, she and her husband filed a petition with the Supreme Meanwhile, as to the criminal cases, the CA ruled that the public
Court involving the same subject matter and the same issues as in Emerencianas prosecutors gravely abused their discretion when they set aside the earlier
earlier petition in CA-G.R. SP No. 39161. Petitioners alleged that respondents hid resolution recommending the dismissal of the criminal cases against Marfori

102
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based solely on the ground that Tamano was not given the chance to comment We note that the petition for appointment of a receiver for the Marsman
on Marforis motion for reinvestigation. The CA noted that in the joint resolution, Building was originally filed by Emerenciana before the RTC of Manila in Civil
the prosecutors thoroughly studied the case and concluded that the checks Case No. 94-70092. The RTC denied the prayer for the issuance of a writ of
subject of the criminal cases were not issued with valuable consideration since it preliminary injunction and the application for receivership. Emerenciana filed a
was impossible for Marfori to have been indebted or for petitioners to lend the motion for reconsideration, which was denied by the RTC. She then filed a
amount of P4,051,518.08 stated in the checks because the petition for certiorari and receivership with prayer for preliminary injunction
complainants/Making Enterprises only earned P49,352.95 in 1987. before the CA docketed as CA-G.R. SP No. 39161. In a Resolution dated March
29, 1996, the petition was dismissed for being insufficient in form and
Petitioners filed motions for reconsideration questioning the
substance. She sought reconsideration of the dismissal, and her motion was
appointment of a receiveri[26]and the order permanently enjoining the further
likewise denied by the CA on November 29, 1996.
prosecution of Marfori in Criminal Case Nos. 170660 to 170676.i[27] However, the
CA denied both motions in its Resolution of February 12, 2002 as follows: However, records show that two days earlier, or on November 27, 1996,
while her motion for reconsideration of the CA resolution dismissing her petition
WHEREFORE, the motions are hereby DENIED. However, in order to
was still pending resolution before the CA, she and her husband filed with this
ensure that the objectives of Sec. 1 (a) Rule 59, the basis of Our decision, will be
Court a consolidated petition, praying for the appointment of a receiver over the
carried out effectively, the trial court is DIRECTED to appoint [as] a receiver,
Marsman Building. Clearly, CA-G.R. SP No. 39161 was still pending with the CA
after compliance of the bond requirement, a private banking institution which
when respondents filed their consolidated petition with this Court.
shall exercisepowers as such pursuant to Sec. 6, Rule 59 of the Rules of Court.
Moreover, we note that respondents were not candid when they stated in their
SO ORDERED.i[28]
certification of non-forum shopping that there is no other action or proceeding
Hence, the present petition. involving the same issues that is pending before this Court, the CA, or any other
tribunal or agency.i[29]
Essentially, petitioners present the following issues: (1) Whether the CA
erred in granting the application for the appointment of a receiver for the There is forum-shopping when as a result of an adverse decision in one
Marsman Building; and (2) Whether the CA erred in permanently enjoining the forum, or in anticipation thereof, a party seeks a favorable opinion in another
criminal prosecution of Jose Marfori. forum through means other than appeal or certiorari. Forum-shopping exists
when two or more actions involve the same transactions, essential facts, and
We grant the petition. circumstances; and raise identical causes of action, subject matter, and
At the outset, we note that the CA erred in taking cognizance of respondents issues. Forum-shopping exists when the elements of litis pendentia are present
consolidated petition as respondents are guilty of deliberate forum shopping. or where a final judgment in one case will amount to res judicata in the
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other.i[30] Thus, there is forum-shopping when, between an action pending receiver has an interest in the property or fund which is the subject of the action
before this Court and another one, there exist: (1) identity of parties, or at least or proceeding, and that such property or fund is in danger of being lost,
such parties as represent the same interests in both actions, (2) identity of rights removed, or materially injured unless a receiver be appointed to administer and
asserted and relief prayed for, the relief being founded on the same facts, and preserve it;
(3) the identity of the two preceding particulars is such that any judgment
xxxx
rendered in the other action will, regardless of which party is successful, amount
to res judicata in the action under consideration; said requisites also constitutive Here, respondents submit that they have satisfactorily established their
of the requisites for auter action pendant or lis pendens.i[31] legal right over the Marsman Building. They alleged that the building and the
income and rentals thereof are in danger of being lost, removed or materially
Applying the above test, there is no question that there is identity of
injured by the apathy, neglect and fraudulent design of petitioners thereby
parties, cause of action and reliefs sought between the consolidated petition in
rendering the appointment of a receiver both urgent and imperative.i[32]
G.R. No. 126841 and the petition in CA-G.R. SP No. 39161. For resorting to
However, they failed to show how the building as well as the income thereof
forum shopping, the consolidated petition of the spouses Marfori should have
would disappear or be wasted if not entrusted to a receiver. They were not able
been dismissed with prejudice.
to prove that the property has been materially injured, necessitating its
But even on the merits, the application for an appointment of a receiver protection and preservation. Because receivership is a harsh remedy that can be
must be denied. granted only in extreme situations,i[33] respondents must prove a clear right to
its issuance. This they failed to do.
An application for the appointment of a receiver under Section 1(a),
Rule 59 of the 1997 Rules of Civil Procedure, as amended, requires that the We furthermore observe that in granting the appointment of a receiver, the CA
property or fund subject of the action is in danger of being lost, removed, or merely concluded that respondents have sufficiently proven that they have an
materially injured, necessitating its protection or preservation. Section 1 interest in the Marsman Building. It further held that unless a receiver is
provides, appointed, there is a danger of loss or material injury, considering that
petitioners presently possess absolute control of the building and the rentals
SECTION 1. Appointment of receiver.Upon a verified application, one or
accruing thereof. However, there was no justification on how the CA arrived at
more receivers of the property subject of the action or proceeding may be
its conclusion.
appointed by the court where the action is pending, or by the Court of Appeals
or by the Supreme Court, or a member thereof, in the following cases: It must be stressed that the issue of the validity of the dacion en pago and
assignment of rights executed by Marfori in favor of Making still has to be
(a) When it appears from the verified application, and such other proof
resolved in Civil Case No. 94-70092. Until the contract is rescinded or nullified,
as the court may require, that the party applying for the appointment of a
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 CIVIL PROCEDURE

the same remains to be valid and binding. Thus, we agree with the RTC when it
held that courts of equity will not ordinarily appoint a receiver where the rights
of the parties depend on the determination of adverse claims of legal title to
real property and one party is in possession.

As regards the second issue, the Court finds no longer necessary to pass
upon the correctness of the order of the CA permanently enjoining the
prosecution of Jose Marfori in Criminal Case Nos. 170660 to 170676 before the
MeTC of Caloocan City. The Court notes that during the pendency of this
petition, Jose Marfori passed away on October 2, 2004.i[34]Pursuant to Article 89,
paragraph 1i[35] of the Revised Penal Code, as amended, the death of Marfori
totally extinguished his criminal liability. Because Marfori died even before
arraignment and trial, there is no relevance in declaring the extinction as well of
civil liability that was based exclusively on the crime for which an accused is
convicted (i.e., ex delicto). Only civil liability predicated on a source of obligation
other than the delict, if any, survived the death of the accused, which the
offended party can recover by means of a separate civil action.i[36]

WHEREFORE, the petition for review on certiorari is PARTLY GRANTED. The July
24, 2000 Decision and February 12, 2002 Resolution of the Court of Appeals in
CA-G.R. SP No. 43076, insofar as they ordered the appointment of a receiver in
Civil Case No. 94-70092, are hereby REVERSED and SET ASIDE. In view of the
death of Jose Marfori, Criminal Case Nos. 170660 to 170676 before the
Metropolitan Trial Court of Caloocan City are hereby ordered DISMISSED. G.R. No. 80863 April 27, 1989

No pronouncement as to costs. ANTONIO M. VILLANUEVA and FULGENCIO B. LAVAREZ, petitioners,

vs.
SO ORDERED. HONORABLE ABEDNEGO O. ADRE, Presiding Judge, Regional Trial Court,
Branch 22, 11th Judicial Region, and LUCIO VELAYO, respondents.

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 CIVIL PROCEDURE

SARMIENTO, J.: parcels of land, both registered in Lucio Velayo's name, with an area of 400 and
979 square meters.
The central question in the petition at bar is whether or not the regular courts
may stay an execution decreed by the labor arbiters and what the consequences On February 14, 1987, both SCIPSI and Velayo petitioned this Court 2 on
are of such a recourse to the courts. certiorari with injunction on the ground, fundamentally that the Department of
Labor's examiner erred in her determination of the private respondents
The case began from a complaint, dated January 6, 1977, for recovery of unpaid
pecuniary liabilities.
thirteenth-month pay filed by the Sarangani Marine and General Workers
Union-ALU with the Department of Labor (Regional Office No. XI, General Santos On February 16,1987, Velayo alone filed a petition with the respondent court
City) against the South Cotabato Integrated Port Services, Inc. (SCIPSI), a (Special Case No. 227) on a cause of action based on an alleged irregular
Philippine corporation. Later, thirty-seven SCIPSI employees, non-union execution, on the ground that he "was never a party to the labor case" 3 and
members apparently, filed their own complaint. The labor arbiter consolidated that "a corporation (that is, SCIPSI has a separate and distinct personality from
the twin complaints and after hearing, ordered a dismissal on December 29, this incorporators, stockholders and officers." 4
1977. On appeal, however, the National Labor Relations Commission, on June 9,
On February 17, 1987, the respondent court issued a temporary restraining
1981, reversed and accordingly, ordered the private respondents, SCIPSI and its
order enjoining execution of the judgment in the aforementioned labor cases.
president and general, Lucio Velayo, to pay the thirteenth-month pays
On March 5, 1987, the petitioner moved for dismissal for lack of jurisdiction and
demanded. The private respondents' motion for reconsideration was denied,
litis pendentia.
and the decision has since attained finality.
On the strength of this Court's decision in National Mines Allied Workers Union
Thereafter, the parties, on orders of the labor arbiter, were made to appear
v. Vera,5 the trial judge denied the motion to dismiss. Reconsideration having
before a corporate auditing examiner to determine the private respondents'
been likewise denied, the union as well as the labor arbiter (Antonio Villanueva)
exact liability. On October 24, 1986, the corporate auditing examiner submitted
and the sheriff (Fulgencio Lavarez) themselves, on October 22, 1987, instituted
an accounting and found the private respondents liable in the total sum of
these certiorari proceedings. 6
Pl,134,000.00. Thereupon, the private respondents interposed an objection and
prayed for a revision. It appears, however, that the private respondents never Meanwhile, on April 27,1988, the parties (in G.R. Nos. 7730001) submitted a
pursued their exceptions.1 Compromise Agreement whereby the private respondents agreed to pay, in
installments, the reduced sum of P637,400.00 to the workers. On May 11, 1988,
On January 16,1987, the union moved for execution and pursuant thereto, the
we issued a Resolution approving the Compromise Agreement, and considering
labor arbiter issued a writ of execution. As a result, the sheriff levied on two
the cases (G.R. Nos. 77300-01) closed and terminated. 7

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At the same time, we issued (in this petition) a Resolution requiring the private commencement of Special Case No. 227 and G.R. Nos. 77300-01. This is not the
respondents and/or counsel, Atty. Oscar Dinipol, to show cause why they should act that forced suspicions on our part of efforts by the private respondents to
not be held in contempt for forum-shopping. On December 9,1988, Atty. "shop for a friendly forum". Rather, it is the institution of Special Case No. 227,
Dinopol filed a manifestation praying for dismissal "not because it has become despite the pendency of the labor proceedings below, that led us to those
moot and academic in view of the compromise agreement executed by the suspicions. G.R. Nos. 77300-01, on the other hand, were brought primarily on
parties in G.R. Nos. 77300-01 (but because) the subject or cause of action the question of the exact amount SCIPSI is liable to pay. It is on its face, a
(thereof) is totally different from the cause of action in the above-entitled case." legitimate ground for certiorari, and for this reason we accepted the parties
8 compromise reached there, instead of dismissing it.

On whether or not this case has become moot and academic in view of the There is forum-shopping whenever, as a result of an adverse opinion in one
compromise reached in G.R. Nos. 77300-01, the Court rules in the affirmative. It forum, a party seeks a favorable opinion (other than by appeal or certiorari) in
should be noted that the instant petition has been brought as a result of the another. The principle applies not only with respect to suits filed in the courts
execution of the judgment rendered below, and since the parties, by virtue of but also in connection with litigations commenced in the courts while an
the compromise, have spelled out the manner by which payment shall be made, administrative proceeding is pending, as in this case, in order to defeat
execution by means of levy, the question confronting the court herein, may no administrative processes and in anticipation of an unfavorable administrative
longer be carried out. Nevertheless, because of the ethical implications of the ruling and a favorable court ruling. This is specially so, as in this case, where the
acts of the private respondents, the Court is constrained to render its judgment court in which the second suit was brought, has no jurisdiction.
if only to forestall future similar acts and for the guidance of the bench and the
Accordingly, the respondent court must be held to be in error assuming
bar.
jurisdiction over Special Case No. 227. It is well-established that the courts
We likewise render judgment notwithstanding Atty. Oscar Dinopol's pending cannot enjoin execution of judgment rendered by the National Labor Relations
prayer for extension of time to file his comment to our show cause Resolution of Commission. 9
November 7, 1988. We consider his manifestation, dated November 29,1988,
The respondent Lucio Velayo's reliance upon National Mines and Allied Workers
urging us not to dismiss this case for having became moot and academic but
Union v. Vera10 is not well-taken. In that case, the properties involved belonged
because the petition lacks merit as his comment. We do so for one because it
to third persons, a development that provided a civil dimension to the labor
has been the position of the private respondents that Special Case No. 227 and
case, and a development that gave the courts the jurisdiction. In the case at bar,
G.R. Nos. 77300-01 could stand together and for another, because of the
however, Velayo cannot be said to be a stranger to the proceedings for a
compelling need to dispose of labor cases with utmost dispatch. We take this as
number of reasons. First, and as pointed out by the Solicitor General, and as the
his defense to that show-cause Resolution. Parenthetically, we find him
mistaken for supposing that our Resolution is based on the simultaneous
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records will amply show, he, Velayo, was a party to the proceedings below Article 273 of the Code provides that:
where he took part actively in defense of his case. We quote:
Any person violating any of the provisions of Article 265 of this Code shall be
... It is not true that Lucio Velayo was not a party in the labor cases. The caption punished by a fine of not exceeding five hundred pesos and/or imprisonment for
of the labor cases shows he was a respondent. The records of the labor cases not less than one (1) day nor more than six (6) months.
show that he participated in the proceedings therein, without raising the issue
(b) How can the foregoing provisions be implemented when the employer is a
that he was not a party nor the employer of the complainants. Thus, the Motion
corporation? The answer is found in Article 212 (c) of the Labor Code which
for Reconsideration dated August 7, 1981 attached to the Petition as Annex B
provides:
was filed by both SCIPS and Lucio Velayo. SCIPS and Velayo discussed the merits
of the cases in said motion and there was nary a mention of the allegation of (c) 'Employer' of the Labor Code which provides: which 'Employer' includes any
Velayo now that he not not a party in the cases nor an employer of the person acting in the interest of an employer, directly or indirectly. The term shall
complainants. Likewise, the Exception and/or Opposition to Report of Examiner not include any labor organization or any of its officers or agents except when
dated November 13, 1986, attached to the Petition as Annex F, was also filed by acting as employer.
both SCIPS and Velayo and, like the Motion for Reconsideration
aforementioned, it does not mention anything about Velayo not being a party The foregoing was culled from Section 2 of RA 602, the Minimum Wage Law.
and not being an employer of complainants. 11 Since RANSOM is an artificial person, it must have an officer who can be
presumed to be the employer, being "the person acting in the interest of (the)
Certainly, he cannot now be heard to say that he was no party to the employer" RANSOM. The corporation, only in the technical sense, is the
controversy. employer.
The fact that he was never mentioned in the pleadings before the petitioner- The responsible officer of an employer corporation can be held personally, not
labor arbiter is of no moment.The fact is that he himself had questioned the to say even criminally, liable for non-payment of back wages. That is the policy
findings of the corporate auditor (in G.R. Nos. 77300-01) and this is enough of the law. In the Minimum Wage Law, Section 15(b) provided:
evidence that he admits personal liability, although he does not agree with the
amount supposedly due from him. His remonstrances came too late in the day. (b) If any violation of this Act is committed by a corporation, trust, partnership
or association, the manager or in his default, the person acting as such when the
But other than estoppel, the law itself stands as a formidable obstacle to violation took place, shall be responsible. In the case of a government
Velayo's claims. In A.C. Ransom Labor Union-CCLU v. NLRC 12 we held that in corporation, the managing head shall be made responsible, except when shown
case of corporations. It is the president who responds personally for violation of that the violation was due to an act or commission of some other person, over
the labor pay laws. We quote: whom he has no control, in which case the latter shall be held responsible.

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In PD 525, where a corporation fails to pay the emergency allowance therein entity, in the first place, was not meant to promote unfair objectives or
provided, the prescribed penalty shall be imposed upon the guilty officer or otherwise, to shield them. This Court has not hesitated in penetrating the veil of
officers of the corporation. corporate fiction when it would defeat the ends envisaged by law, 14 not to
mention the clear decree of the Labor Code.
(c) If the policy of the law were otherwise, the corporation employer can have
devious ways for evading payment of back wages. In the instant case, it would And if Velayo truly had a valid objection (to the levy on his properties), he could
appear that RANSOM, in 1969, foreesing the possibility or probability of have raised it at the earliest hour, and in the course of the labor proceedings
payment of back wages to the 22 strikers, organized ROSARIO to replace themselves. But, as we earlier indicated, he raised nary a finger there, and he
RANSOM, with the latter to be eventually phased out if the 22 strikers win their cannot raise it now, much less in a separate proceeding. He is not only
case. RANSOM actually ceased operations on May 1, 1973 after the December estopped, litis pendencia is a bar to such a separate action.15
19, 1972 Decision of the Court of Industrial Relations was promulgated against
While the instant case has been rendered moot and academic by reason of the
RANSOM.
out-of-court settlement between the parties, that development will not absolve
(d) The record does not clearly Identify the "officer or officers" of RANSOM Velayo and/or his counsel, Atty. Oscar Dinopol 16 from charges of forum-
directly responsible for failure to pay the back wages of the 22 strikers. In the shopping. In Buan v. Lopez, Jr., supra, we declared that forum- shopping is an act
absence of definite proof in that regard, we behave it should be presumed that of malpractice that constitutes contempt of court.
the responsible officer is the President of the corporation who can be deemed
In this connection, we reject Atty. Dinopol's pretense that no Identity exists
the chief operation officer thereof. Thus, in RA 602, criminal responsibility is
between Special Case No. 227 and the labor case that had precipitated it. The
with the "Manager or in his default, the person acting as such." In RANSOM, the
fact remains that in Special Case No. 227, he assails the execution of the
President appears to be the Manager.
judgment of the National Labor Relations Commission, the same relief he could
(e) Considering that non-payment of the back wages of the 22 strikers has been have asked for in the very labor proceeding. The fact that he likewise prayed for
a continuing situation, it is our opinion that the personal liability of the RANSOM damages therein will not alter the essence of the petition- to stay execution-and
President, at the time the back wages were ordered to be paid should also be a in which the claim for damages is but an incidental relief.
continuing joint and several personal liabilities of all who may have thereafter
Clearly, both Velayo and Atty. Dinopol must account for forum-shopping.
succeeded to the office of president; otherwise, the 22 striken may be deprived
of their rights by the election of a president without leviable assets.13 WHEREFORE, judgment is rendered: (1) DISMISSING the petition for having
become moot and academic; (2) ORDERING the respondent judge to dismiss
Accordingly, Velayo cannot be excused from payment of SCIPSI's liability by
Special Case No. 227; (3) DECLARING the respondent, Lucio Velayo and Atty.
mere reason of SCIPSI's separate corporate existence. The theory of corporate
Oscar Dinopol IN CONTEMPT and ORDERING them to pay a fine of Pl,000.00
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each within five (5) days from notice; and (4) SUSPENDING Atty. Oscar Dinopol,
for a period of three (3) months effective from notice, from the practice of law.
Let a copy of this Decision be entered in his record.

THIS DECISION IS IMMEDIATELY EXECUTORY.

IT IS SO ORDERED.

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