G.R. No.
L-34362 November 19, 1982 certificate of title in the name of the Independent Mercantile Corporation and the
MODESTA CALIMLIM AND LAMBERTO MAGALI IN HIS CAPACITY AS
ADMINISTRATOR OF THE ESTATE OF DOMINGO MAGALI, petitioners,
vs.
HON. PEDRO A. RAMIREZ IN HIS CAPACITY AS PRESIDING JUDGE OF THE
COURT OF FIRST INSTANCE OF PANGASINAN, BRANCH I, and FRANCISCO
RAMOS, respondents.
VASQUEZ, J.:
The dismissal of Civil Case No. SCC-180 filed by the herein petitioners in the
respondent Court against the private respondent is sought to be annulled and set
aside by this Petition For Review On Certiorari.
The antecedent material facts are not disputed. Sometime in 1961, a judgment for
a sum of money was rendered in favor of Independent Mercantile Corporation
against a certain Manuel Magali by the Municipal Court of Manila in Civil Case No.
85136. After said judgment became final, a writ of execution was issued on July
31, 1961. The Notice of Levy made on September 21, 1961 on a parcel of land
covered by Transfer Certificate of Title No. 9138 registered in the name of
"Domingo Magali, married to Modesta Calimlim", specified that the said levy was
only against "all rights, title, action, interest and participation of the defendant
Manuel Magali over the parcel of land described in this title. " The Certificate of
Sale executed by the Provincial Sheriff of Pangasinan on October 17, 1961 in
favor of Independent Mercantile Corporation also stated that the sale referred only
to the rights and interest of Manuel Magali over the land described in TCT No.
9138. Manuel Magali is one of the several children of Domingo Magali who had
died in 1940 and herein petitioner Modesta Calimlim.
However, when the Sheriff issued the final Deed of Sale on January 25, 1963, it
was erroneously stated therein that the sale was with respect to "the parcel of land
described in this title" (referring to TCT No. 9138) and not only over the rights and
interest of Manuel Magali in the same. The execution of the said final Deed of Sale
was annotated at the back of said title.
On February 23, 1967, Independent Mercantile Corporation filed a petition in the
respondent Court to compel Manuel Magali to surrender the owner's duplicate of
TCT No. 9138 in order that the same may be cancelled and a new one issued in
the name of the said corporation. Not being the registered owner and the title not
being in his possession, Manuel Magali failed to comply with the order of the Court
directing him to surrender the said title. On June 20, 1967, Independent Mercantile
Corporation filed an ex-parte petition to declare TCT No. 9138 as cancelled and to
issue a new title in its name. The said petition was granted by the respondent
Court and in its Order dated July 13, 1967, it directed the issuance of a new
cancellation of TCT No. 9138. By virtue of said Order, the Register of Deeds of
Pangasinan issued a new title in the name of the corporation, Identified as TCT
No. 68568.
On November 21, 1967, petitioner Modesta Calimlim, surviving spouse of Domingo
Magali, upon learning that her husband's title over the parcel of land had been
cancelled, filed a petition with the respondent Court, sitting as a cadastral court,
praying for the cancellation of TCT No. 68568. An opposition to the said petition
was filed by Independent Mercantile Corporation. After the parties submitted their
respective Memoranda, the respondent Court issued an Order dated June 3, 1968
dismissing the petition. (Rollo, pp. 31-38.)
The herein petitioners did not appeal the dismissal of the petition they filed in LRC
Record No. 39492 for the cancellation of TCT No. 68568. Instead, on January 11,
1971, they filed the complaint in Civil Case No. SCC-180 praying for the
cancellation of the conveyances and sales that had been made with respect to the
property, covered by TCT No. 9138 previously registered in the name of Domingo
Magali, married to Modesta Calimlim. Named as defendant in said civil case was
herein private respondent Francisco Ramos who claimed to have bought the
property from Independent Mercantile Corporation on July 25, 1967. Private
respondent Francisco Ramos, however, failed to obtain a title over the property in
his name in view of the existence of an adverse claim annotated on the title thereof
at the instance of the herein petitioners.
Private respondent Francisco Ramos filed a Motion To Dismiss Civil Case No.
SCC-180 on the ground that the same is barred by prior judgement or by statute of
limitations (Rollo. pp. 42-45). Resolving the said Motion, the respondent Court, in
its Order dated April 21, 1971, dismissed Civil Case No. SCC- 180 on the ground
of estoppel by prior judgment. (Ibid., pp, 10-13.) A Motion For Reconsideration filed
by the petitioners was denied by the respondent Judge in his Order of September
2, 1971. (Ibid., pp. 13-15.) A second Motion For Reconsideration was similarly
denied in the Order dated September 29, 197 1. (Rollo, pp. 16-17.) Hence, this
Petition.
We find merit in this appeal.
It is error to consider the dismissal of the petition filed by the herein petitioner in
LRC Record No. 39492 for the cancellation of TCT No. 68568 as a bar by prior
judgment against the filing of Civil Case No. SCC-180. In order to avail of the
defense of res judicata, it must be shown, among others, that the judgment in the
prior action must have been rendered by a court with the proper jurisdiction to take
cognizance of the proceeding in which the prior judgment or order was rendered. If
there is lack of jurisdiction over the subject-matter of the suit or of the parties, the
judgment or order cannot operate as an adjudication of the controversy. (2 Moran
Comments on the Rules of Court, 1970 Edition, p. 364.) This essential element of
the defense of bar by prior judgment or res judicata does not exist in the case
presently considered.
The petition filed by the herein petitioners in LRC Record No. 39492 was an
apparent invocation of the authority of the respondent Court sitting as a land
registration court, Although the said petition did not so state, that reliance was
apparently placed on Section 112 of the Land Registration Act. It has been settled
by consistent rulings of this Court that a court of first instance, acting as a land
registration court, is a court of limited and special jurisdiction. As such, its
proceedings are not adequate for the litigation of issues pertaining to an ordinary
civil action, such as, questions involving ownership or title to real property. (Bareng
vs. Shintoist Shrine and Japanese Charity Bureau, 83 SCRA 418; Manalo vs.
Mariano, 69 SCRA 80; In re: Nicanor T Santos, 102 SCRA 747; Santos vs. Aquino,
101 SCRA 377.) In Hu chon Sunpongco vs. Heirs of Nicolas Ronquillo, L- 27040,
December 19, 1970, 36 SCRA 395, we have held that:
Section 112 of Act 496 confers authority upon the land registration
court to order the cancellation, alteration or amendment of a
certificate of title but withdraws from the Court the power to pass
upon any question concerning ownership of the registered
property, or any incident where the issues involved have become
controversial.
It may hardly be questioned that the issues raised by the petitioners in their petition
to cancel TCT No. 68568 refer to the ownership or title over the property covered
thereby. The said petition presented before the respondent Court in the exercise of
its limited jurisdiction as a cadastral court, the question of who should be
considered the true and lawful owner of the parcel of land embraced in said title.
The petitioners alleged therein that they are the true owners of the property, and
that TCT No. 68568 which they sought to cancel was issued as a result of the
errors which were not of their own making. In short, the petition raised a highly
controversial matter which is beyond the judicial competence of a cadastral court
to pass upon or to adjudicate.
It may neither be claimed that the parties have mutually agreed to submit the
aforesaid issues for the determination by the court, it being a fact that herein
private respondent was not a party in the petition in LRC Record No. 39492.
Incidentally, although the said petition was filed by the herein petitioners on
November 21, 1967, the Opposition filed by Independent Mercantile Corporation to
the said petition made no mention of the alleged sale of the property in question in
favor of private respondent Francisco Ramos on July 5, 1967. This circumstance
places in grave doubt the sincerity of said sale and the claim that the private
respondent was an innocent purchaser for value of the property in question.
In the order of the respondent Judge dated September 29, 1971 denying the
second motion for reconsideration, he cited the case of Tijam vs. Sibonghanoy, 23
SCRA 29, to uphold the view that the petitioners are deemed estopped from
questioning the jurisdiction of the respondent Court in having taken cognizance of
the petition for cancellation of TCT No. 68568, they being the ones who invoked
the jurisdiction of the said Court to grant the affirmative relief prayed for therein.
We are of the opinion that the ruling laid down in Sibonghanoy may not be applied
herein. Neither its factual backdrop nor the philosophy of the doctrine therein
expounded fits the case at bar.
A rule that had been settled by unquestioned acceptance and upheld in decisions
so numerous to cite is that the jurisdiction of a court over the subject-matter of the
action is a matter of law and may not be conferred by consent or agreement of the
parties. The lack of jurisdiction of a court may be raised at any stage of the
proceedings, even on appeal. This doctrine has been qualified by recent
pronouncements which stemmed principally from the ruling in the cited case
of Sibonghanoy. It is to be regretted, however, that the holding in said case had
been applied to situations which were obviously not contemplated therein. The
exceptional circumstance involved in Sibonghanoy which justified the departure
from the accepted concept of non-waivability of objection to jurisdiction has been
ignored and, instead a blanket doctrine had been repeatedly upheld that rendered
the supposed ruling in Sibonghanoy not as the exception, but rather the general
rule, virtually overthrowing altogether the time-honored principle that the issue of
jurisdiction is not lost by waiver or by estoppel.
In Sibonghanoy, the defense of lack of jurisdiction of the court that rendered the
questioned ruling was held to be barred by estoppel by laches. It was ruled that the
lack of jurisdiction having been raised for the first time in a motion to dismiss filed
almost fifteen (15) years after the questioned ruling had been rendered, such a
plea may no longer be raised for being barred by laches. As defined in said case,
laches is "failure or neglect, for an unreasonable and unexplained length of time, to
do that which, by exercising due diligence, could or should have been done earlier;
it is negligence or omission to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert has abandoned it or declined to assert
it."
The petitioners in the instant case may not be faulted with laches. When they
learned that the title to the property owned by them had erroneously and illegally
been cancelled and registered in the name of another entity or person who had no
right to the same, they filed a petition to cancel the latter's title. It is unfortunate
that in pursuing said remedy, their counsel had to invoke the authority of the
respondent Court as a cadastral court, instead of its capacity as a court of general the court render a judgment without jurisdiction, such judgment may be impeached
jurisdiction. Their petition to cancel the title in the name of Independent Mercantile or annulled for lack of jurisdiction (Sec. 30, Rule 132, Ibid), within ten (10) years
Corporation was dismissed upon a finding by the respondent Court that the same from the finality of the same. (Art. 1144, par. 3, Civil Code.)
was "without merit." No explanation was given for such dismissal nor why the
petition lacked merit. There was no hearing, and the petition was resolved solely The inequity of barring the petitioners from vindicating their right over their property
on the basis of memoranda filed by the parties which do not appear of record. It is in Civil Case No. SCC-180 is rendered more acute in the face of the undisputed
even a possibility that such dismissal was in view of the realization of the fact that the property in question admittedly belonged to the petitioners, and that
respondent Court that, sitting as a cadastral court, it lacked the authority to the title in the name of the private respondent was the result of an error committed
entertain the petition involving as it does a highly controversial issue. Upon such by the Provincial Sheriff in issuing the deed of sale in the execution proceeding.
petition being dismissed, the petitioners instituted Civil Case No. SCC-180 on The justness of the relief sought by herein petitioners may not be ignored or
January 1, 1971, or only two and one-half years after the dismissal of their petition rendered futile by reason of a doctrine which is of highly doubtful applicability
in LRC Record No. 39492. Hence, we see no unreasonable delay in the assertion herein.
by the petitioners of their right to claim the property which rightfully belongs to
them. They can hardly be presumed to have abandoned or waived such right by WHEREFORE, the Orders appealed from are hereby REVERSED and SET
inaction within an unreasonable length of time or inexcusable negligence. In short, ASIDE. The Motion To Dismiss filed by the private respondent in Civil Case No.
their filing of Civil Case No. SCC-180 which in itself is an implied non-acceptance
SCC-180 shall be deemed denied and the respondent Court is ordered to conduct
of the validity of the proceedings had in LRC Record No. 39492 may not be
further proceedings in the case. With costs against the private respondent.
deemed barred by estoppel by laches.
SO ORDERED.
It is neither fair nor legal to bind a party by the result of a suit or proceeding which
was taken cognizance of in a court which lacks jurisdiction over the same
irrespective of the attendant circumstances. The equitable defense of estoppel
requires knowledge or consciousness of the facts upon which it is based. The
same thing is true with estoppel by conduct which may be asserted only when it is
shown, among others, that the representation must have been made with
knowledge of the facts and that the party to whom it was made is ignorant of the
truth of the matter. (De Castro vs. Gineta, 27 SCRA 623.) The filing of an action or
suit in a court that does not possess jurisdiction to entertain the same may not be
presumed to be deliberate and intended to secure a ruling which could later be
annulled if not favorable to the party who filed such suit or proceeding. Instituting
such an action is not a one-sided affair. It can just as well be prejudicial to the one
who filed the action or suit in the event that he obtains a favorable judgment
therein which could also be attacked for having been rendered without jurisdiction.
The determination of the correct jurisdiction of a court is not a simple matter. It can
raise highly debatable issues of such importance that the highest tribunal of the
land is given the exclusive appellate jurisdiction to entertain the same. The point
simply is that when a party commits error in filing his suit or proceeding in a court
that lacks jurisdiction to take cognizance of the same, such act may not at once be
deemed sufficient basis of estoppel. It could have been the result of an honest
mistake, or of divergent interpretations of doubtful legal provisions. If any fault is to
be imputed to a party taking such course of action, part of the blame should be
placed on the court which shall entertain the suit, thereby lulling the parties into
believing that they pursued their remedies in the correct forum. Under the rules, it
is the duty of the court to dismiss an action "whenever it appears that the court has
no jurisdiction over the subject matter." (Sec. 2, Rule 9, Rules of Court.) Should
G.R. No. 83588 September 29, 1997 Pampanga. On December 12, 1985, the trial court rendered its decision, the
decretal part of which provides:
Spouses ADORACION C. PANGILINAN and GEORGE B. PANGILINAN
represented in this suit by their Attorney-in-fact. ARCADIO S. In view of all the foregoing, judgment is hereby rendered against
MALLARI, petitioners, the defendants Jose R. Canlas and Luis R. Canlas ordering them
vs. the following:
COURT OF APPEALS, JOSE R. CANLAS and LUIS R. CANLAS and RURAL
BANK OF STA. RITA, INC., respondents. 1) to accept the final payment or balance of the
consideration of the lot in the amount of
TORRES, JR., J.: P2,277.82;

This petition for review seeks to set aside the January 14, 1988 decision1 and May 2) to execute the final deed of sale of the lot in
31, 1988 resolution of the Court of Appeals in CA-GR CV No. 09175 which question in favor of herein plaintiffs;
reversed the December 12, 1985 decision of the Regional Trial Court, Third
Judicial Region, Branch XLVIII, San Fernando, Pampanga. 3) to pay the mortgage loan to the defendant
Rural bank for the purpose of releasing the said
On May 18, 1968, petitioners Pangilinan (husband and wife), and the private lot embraced in Transfer Certificate of Title No.
respondents Jose R. Canlas and Luis R. Canlas entered into a Contract to Buy 89745-R, Registry of Deeds for the Province of
and To Sell a subdivision lot at Sto. Niño Village, San Fernando, Pampanga, Pampanga in order to free the said lot from
particularly Lot No. 1, Block 3; with an area of 577 square meters at P30.00 per encumbrances;
square meter, for a total contract price of P17,310.00, payable on installment basis
at P189.02 a month for 120 months.2 The sum of P1,731 representing 10% of the 4) to pay plaintiff the amount of P5,000.00 for
total price of the lot was paid by the petitioners to the private respondents and attorney's fees; P2,000.00 for litigation expenses;
thereafter monthly installments which amounted to about 85% of the total price
were effected as of January, 1974; the last payment thereof was made on May 14,
5) to pay plaintiff the amount of P10,000.00 for
1975 (Exh. C-54).3 Paragraph 5 of the contract provided for automatic extrajudicial
exemplary damages as a corrective measure due
rescission upon default in payment of three (3) consecutive monthly installments or
to malevolent act of defendants Canlases;
to comply with any of the terms and conditions, with forfeitures of installments as
rents and as payment for damages. The said contract to buy and to sell as well as
the receipts of various payments made by petitioners in favor of private 6) to pay the costs of the suit.
respondents were given by the former to Mr. Arcadio S. Mallari. Mr. Mallari
equipped with a Special Power of Attorney dated May 15, 1983 from the spouses The counterclaim interposed by the defendant Jose R. Canlas and
Adoracion C. Pangilinan and George Pangilinan went personally to the private Luis R. Canlas are hereby dismissed for lack of evidence.
respondents and requested them to release the title of the lot as he would pay in
full the alleged remaining balance of P1,875.00. The private respondents told him The defendant Rural Bank of Sta. Rita Incorporated is hereby
to return after two weeks as they would confer with each other. When he returned, absolved of any liability but its counterclaim is hereby dismissed
the private respondent Jose R. Canlas told him that they were not in a position to for lack of evidence.
release the title to said lot because the same had already been disposed of Mr.
Mallari discovered that the lot was mortgaged to the Rural Bank of Sta. Rita. On SO ORDERED.4
July 25, 1983, after the lapse of eight years from the last date of payment, he
instituted a complaint for Specific Performance and Damages docketed as Civil
Private respondents appealed the abovementioned decision to the Court of
Case No. 6843 entitled "Spouses Adoracion G. Pangilinan, et. al. vs. Jose R.
Appeals which on January 14, 1988, promulgated its judgment which reversed and
Canlas, et. al." before the Regional Trial Court, Branch XLVIII, San Fernando,
set aside the decision of the trial court, to wit:
 WHEREFORE, the decision appealed from is hereby SET ASIDE.
Another judgment is hereby entered DISMISSING Civil Case No.
6843 before the court below. The counter-claim of defendants-
appellants is hereby DISMISSED.
SO ORDERED.5
Petitioners filed a motion for reconsideration but it was denied for lack of merit by
the Court of Appeals in its resolution of May 31, 1988. Hence, petitioner instituted
the instant petition for review raising two (2) assignment of errors, viz.:
1) THE COURT OF APPEALS ERRED THAT A
CREDITOR CAN UNILATERALLY AND
SUMMARILY RESCIND A CONTRACT TO SELL
A SUBDIVISION LOT;
2) THE COURT OF APPEALS ERRED IN
RULING THAT HEREIN PETITIONERS ARE
GUILTY OF LACHES.
Petitioners vigorously argue that automatic rescission of a contract extrajudicially
undertaken by a creditor maybe effected only if the defaulter was duly informed of
the intention of the creditor to rescind the contract. If the defaulter will not object,
then the creditor may proceed to extrajudicially rescind or cancel the contract,
however, if the defaulter will manifest his objection, then the matter of rescission
will be subjected to judicial determination. They further alleged that even if there is
a waiver stipulated in the contract of adhesion, regarding rescission, such waiver
will not apply because the waiver must be unequivocal and intelligently made.
Moreover, granting that petitioners have committed a breach of contract for their
failure to pay the balance of the consideration, yet this breach is slight, considering
that 85% of the total consideration for the lot has been paid.
The Court is not persuaded.
The fifth paragraph of the Contract to Buy and to Sell pertinently reads:
This contract shall be considered automatically rescinded and
canceled and of no further force or effect, upon failure of the
VENDEE to pay when due, three (3) consecutive monthly
installments or to comply with any of the terms and conditions
hereof, in which case the VENDORS shall have the right to resell
said parcel of land to any person or purchaser, as if this contract
has never been entered into. In such case of cancellation of this
contract, all amounts paid in accordance with the agreement
together with all the improvements made on the premises shall be
considered as rents paid for the use and occupation of the above-
mentioned premises and as payment for the damages suffered for
the failure of the VENDEE to fulfill his part of this agreement; and
for the VENDEE hereby renounces his right to demand or reclaim
the return of the same obliges himself to peacefully vacate the
premises and deliver the same to the VENDORS.6
Article 15927 of the New Civil Code, requiring demand by suit or by notarial act in
case the vendor of realty wants to rescind does not apply to a contract to sell but
only to contract of sale. In contracts to sell, where ownership is retained by the
seller and is not to pass until the full payment, such payment, as we said, is a
positive suspensive condition, the failure of which is not a breach, casual or
serious, but simply an event that prevented the obligation of the vendor to convey
title from acquiring binding force. To argue that there was only a casual breach is
to proceed from the assumption that the contract is one of absolute sale, where
non-payment is a resolutory condition, which is not the case.8
The applicable provision of law in instant case is Article 1191 of the New Civil
Code which provides as follows:
Art. 1191. The power to rescind obligations is implied in reciprocal
ones, in case one of the obligors should not comply with what is
incumbent upon him.
The injured party may choose between the fulfillment and the
rescission of the obligation, with the payment of damages in either
case. He may also seek rescission, even after he has chosen
fulfillment, if the latter should become impossible.
The Court shall decree the rescission claimed, unless there be just
cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third
persons who have acquired the thing, in accordance with articles
1385 and 1388 and the Mortgage Law. (1124)
Pursuant to the above, the law makes it available to the injured party alternative
remedies such as the power to rescind or enforce fulfillment of the contract, with
damages in either case if the obligor does not comply with what is incumbent upon
him. There is nothing in this law which prohibits the parties from entering into an
agreement that a violation of the terms of the contract would cause its cancellation
even without court intervention. The rationale for the foregoing is that in contracts
providing for automatic revocation, judicial intervention is necessary not for
purposes of obtaining a judicial declaration rescinding a contract already deemed
rescinded by virtue of an agreement providing for rescission even without judicial
intervention, but in order to determine whether or not the rescission was proper.
Where such propriety is sustained, the decision of the court will be merely
declaratory of the revocation, but it is not in itself the revocatory act.9 Moreover,
the vendor's right in contracts to sell with reserved title to extrajudicially cancel the
sale upon failure of the vendee to pay the stipulated installments and retain the
sums and installments already received has long been recognized by the well-
established doctrine of 39 years standing. 10The validity of the stipulation in the
contract providing for automatic rescission upon non-payment cannot be doubted.
It is in the nature of an agreement granting a party the right to rescind a contract
unilaterally in case of breach without need of going to court. Thus, rescission under
Article 1191 was inevitable due to petitioners' failure to pay the stipulated price
within the original period fixed in the agreement.
On the second assigned error, petitioners aver that the doctrine of laches is not
applicable in this particular case because (1) petitioner's failure to pay in full the
balance of 15% of the total price of the lot was due to the reneged obligation of the
private respondent to improve the subdivision and install facilities; and, (2) the
mortgage of the lot to the Rural Bank of Sta. Rita was done without their consent
and knowledge.
The same has no merit. It must be noted that upon a careful examination of the
records of this case, it appears that the contention of the petitioners that their
failure to pay the balance of 15% of the total contract price of the lot was due to the
inability of the private respondent to improve the subdivision and install facilities
which was raised only for the first time on appeal. They did not raise this issue
before the lower courts. It is settled that an issue which was neither averred in the
complaint nor raised during the trial in the court below cannot be raised for the first
time on appeal. 11 Issues of fact and arguments not adequately brought to the
attention of the trial court need not be and ordinarily will not be considered by a
reviewing court as they cannot be raised for the first time on
appeal. 12Assuming arguendo that it was raised before the trial court, the same
would be without merit because the failure of the private respondents to install
facilities would not deter them from asking for the rescission of the agreement if
petitioners failed to comply with their obligation to pay the monthly installments
when they become due, otherwise, the right of rescission would be rendered
inutile. In the same vein, petitioners by virtue of their contract with private
respondents should have complied in good faith with its terms and conditions
being the law between them. From the moment the contract is perfected, the
parties are bound not only to the fulfillment of what has been expressly stipulated
but also to all consequences which, according to their nature, may be in keeping
with good faith, usage and law. 13 The Contract to Buy and to Sell, specifically
paragraph 5 thereof, not being contrary to law, morals, good customs, public order
or public policy, is valid and binding between the parties thereto.
As stated by the appellate court, thus:
The peculiar fact that militates against the cause of the appellees
is that the appellees spouses Pangilinan did not directly and
personally prosecute the present proceedings. As shown from the
records, Mr. Mallari had equipped himself with the special power
of attorney in his favor by the appellees executed only on May 15,
1983 or about six (should be eight) years from the date of last
payment, made on May 14, 1975 for the January, 1974
installment, during which time, the actual buyers, the Pangilinans
had not by themselves personally shown interest in compelling the
appellants to accept the remaining balance of the purchase price
of the said subdivision lot, to execute in their favor the Deed of
Absolute Sale and deliver to them the Transfer Certificate of Title
over the said property. The aforesaid circumstances constitute
laches. There was failure or neglect on the part of the Pangilinan
spouses for an unreasonable and unexplained length of time to do
that which by exercising due diligence or could have been done
earlier, such failure or negligence warrants a presumption that
they had abandoned or declined to assert such right (Tejado vs.
Zamacoma, 138 SCRA 78).
Further, the Court of Appeals, stated:
The disturbing fact in the case at bar is that the spouses
Pangilinan who bought the subject lot from the appellant seller did
not directly and personally prosecute the present case from May,
1975 (date of last payment for January, 1974 installment). Mr.
Arcadio S. Mallari, the alleged attorney-in-fact of the said spouses,
represented them in the instant case which was filed only on July
25, 1983. He has an alleged special power of attorney in his favor
by the appellees which appears to have been executed on May
15, 1983 or about eight (8) years from the date of last payment on
May 14, 1975 by the buyer spouses for the January, 1974
installment. Mr. Mallari was the only witness for the prosecution.
He alone identified the said power of attorney executed in his
favor and testified on its due execution. The notary public who
appears to have notarized the said document was not presented
neither did the Pangilinan spouses appear in the lower court.
There was no mention in his (Mallari) testimony of the
whereabouts of the said Pangilinan spouses nor why the instant
 case had to be filed by him for them. The Court has doubts
whether or not the said Pangilinan spouses are really interested in
the prosecution of this case. And more than this, in the mind of the
Court, the genuineness of the said special power of attorney has
not been satisfactorily proved.

It also bears emphasis that from the said last payment on May 14,
1975, for the January, 1974 installment up to the execution of the
alleged special power of attorney (assuming the same to be true)
in favor of Mr. Mallari, on May 15, 1983, and the filing of Mallari of
the instant case (which covers a period of eight (8) years)* the
actual buyers, the Pangilinan spouses had not by themselves
personally shown interest in compelling the appellants to accept
the remaining balance of the purchase price of the subdivision lot,
to execute in their favor the Deed of Absolute Sale and deliver to
them the Transfer Certificate of Title over the said lot. Such
failure/neglect on their part constitutes laches because for an
unreasonable and unexplained length of time [eight (8) years],
they failed/neglected to do that which by exercising due diligence
could or should have been done earlier, and as stated in the
decision rendered in the present appeal, such failure or
negligence warrants a presumption that they had abandoned or
declined to assert such right.

Explicitly, spouses Pangilinan instead of being vigilant and diligent in asserting

their rights over the subject property had failed to assert their rights when the law
requires them to act. Laches or "stale demands" is based upon grounds of public
policy which requires, for the peace of society, the discouragement of stale claims
and unlike the statute of limitations, is not a mere question of time but is principally
a question of the inequity or unfairness of permitting a right or claim to be enforced
or asserted. 14

The legal adage finds application in the case at bar. Tempus enim modus tollendi
obligationes et actiones, quia tempus currit contra desides et sui juris
contemptores — For time is a means of dissipating obligations and actions,
because time runs against the slothful and careless of their own rights.

IN VIEW WHEREOF, the petition is hereby DENIED and the decision of

respondent court AFFIRMED in toto.
MA. CONCEPCION L. REGALADO v. ANTONIO S. GO (G.R. No. 167988, February 1. Declaring [EHSI, Kunack and Barin] guilty of illegal
6, 2007) dismissal;

CHICO-NAZARIO, J.: 2. Considering that reinstatement would not be feasible

because of strained relations, [EHSI, Kunack and Barin] are
ordered to pay [herein respondent Go] backwages in the amount of
Php900,000.00 (Php60,000 x 15 months), separation pay of
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Php180,000.00 (one month pay for every year of service =
Php60,000 x 3 years);
Court, of the Resolution[1] dated 30 August 2004 of the Court of Appeals, finding
petitioner Ma. Concepcion L. Regalado (Atty. Regalado) guilty of indirect 3. Ordering [EHSI, Kunack and Barin] to pay
[respondent Go] Php500,000.00 as moral damages;
contempt. Likewise assailed in this petition is the Resolution[2] denying her Motion
for Reconsideration. The dispositive portion of the Resolution reads: 4. Ordering [EHSI, Kunack and Barin] to pay
[respondent Go] Php300,000 as exemplary damages;
WHEREFORE, Atty. Ma. Concepcion Regalado of 5. Ordering the payment of ten percent (10%) of the total
De Borja Medialdea Bello Guevarra and Gerodias Law Offices is monetary award as attorneys fees in the sum of Php188,000.00.
declared GUILTY of INDIRECT CONTEMPT and is ordered to pay
a fine of Five Thousand Pesos (P5,000), with a STERN WARNING All other claims are hereby dismissed for lack of merit.
that a repetition of the same or similar acts in the future will be dealt
with more severely. The imposed fine should be paid to this Court
upon finality hereof.
On appeal to the National Labor Relations Commission
Let a copy of this resolution be furnished the Bar Confidant
(sic), the Integrated Bar of the Philippines and the Court (NLRC), EHSI, Kunack and Barin employed the legal services of
Administrator for investigation and possible administrative
De Borja Medialdea Bello Guevarra and Gerodias Law Offices where herein
sanction.[3]
petitioner Atty. Regalado worked as an associate.[5]

The present controversy stemmed from the complaint of illegal dismissal

On 11 June 2001, the NLRC rendered a Decision [6] reversing the Labor Arbiters
filed before the Labor Arbiter by herein respondent Antonio S. Go
decision and declaring that respondent Gos separation from employment was legal
against Eurotech Hair Systems, Inc. (EHSI), and its President Lutz Kunackand
for it was attended by a just cause and was validly effected
General Manager Jose E. Barin.
by EHSI, Kunack and Barin. The dispositive part of the decision reads:

In a Decision[4] dated 29 December 2000, the Labor Arbiter ruled that respondent WHEREFORE, the appealed decision is set aside. The complaint
below is dismissed for being without merit.
Go was illegally dismissed from employment, the decretal portion of which reads:

WHEREFORE, premises considered, judgment is hereby

For lack of patent or palpable error, the Motion for Reconsideration interposed
rendered as follows:
by respondent Go was denied by the NLRC in an Order [7] dated 20 December 2001.
 Aggrieved, respondent Go elevated the adverse decision to the Court of
Appeals which was docketed as CA-G.R. SP No. 69909 entitled, Antonio S. Go v.
National Labor Relations Commission, Eurotech Hair Systems,
Lutz Kunack and Jose Barin.
On 9 July 2003, the Court of Appeals promulgated a Decision[8] setting
aside the ruling of the NLRC and reinstating the decision of the Labor Arbiter
adjudging EHSI, Kunack and Barin guilty of illegal dismissal.The appellate court
thus ordered EHSI, Kunack and Barin to pay respondent Go full backwages,
separation pay, moral and exemplary damages. The fallo of the decision reads:
WHEREFORE, the petition for certiorari is GRANTED. The
assailed decision of the NLRC promulgated on July 30, 2001 and
its Order dated December 20, 2001 are SET ASIDE while the
decision of Labor Arbiter Waldo Emerson R. Gan dated December
29, 2000 declaring the dismissal of [herein respondent Go] as illegal
is hereby REINSTATED with the modification that [EHSI] is hereby
Ordered to pay [respondent Go]:
1. His full backwages from the time of his illegal dismissal
until the finality of this decision;
2. Separation pay equal to one month pay for every year of service;
3. Moral damages in the amount of P50,000.00; and
4. Exemplary damages in the amount of P20,000.00
The award of attorneys fees is DELETED.
EHSI, Kunack and Barin were able to receive a copy of the decision through
registered mail on 17 July 2003 while respondent Go received his copy on 21 July
2003.[9]
On 16 July 2003, after the promulgation of the Court of Appeals decision
Inc., but prior to the receipt of the parties of their respective copies, the parties decided
to settle the case and signed a Release Waiver and Quitclaim [10] with the approval
of the Labor Arbiter. In view of the amicable settlement, the Labor Arbiter, on the
same day, issued an Order[11] dismissing the illegal dismissal case with
prejudice. The order thus reads:
In view of the Release, Waiver and Quitclaim voluntarily
executed by the [herein respondent] Antonio S. Go, let the instant
case be as it is hereby DISMISSED WITH PREJUDICE.
The execution of the compromise agreement was attended by the counsel
for EHSI, Kunack and Barin, petitioner Atty. Regalado, and respondent Go, but in
the absence and without the knowledge of respondent Gos lawyer.[12]
After the receipt of a copy of the Court of Appeals decision, respondent Go,
through counsel, filed, on 29 July 2003, a Manifestation with Omnibus
Motion[13] seeking to nullify the Release Waiver and Quitclaim dated 16 July
2003 on the ground of fraud, mistake or undue influence. In the same motion,
respondent Go, through counsel, moved that petitioner Atty. Regalado be made
to explain her unethical conduct for directly negotiating with respondent Go without
the knowledge of his counsel. The motion thus prays:
WHEREFORE, premises considered, it is most respectfully
prayed for the Honorable Court to declare Null and Void the
dismissal of the instant (sic), with prejudice, by Labor (sic) Waldo
Emerson Gan, as well as the Release Waiver and Quitclaim dated
 July 16, 2003 signed by [herein respondent Go] for having been
obtained through mistake, fraud or undue influence committed by
[EHSI, Kunack and Barin] and their counsels (sic).
It is likewise prayed for [EHSI, Kunack and Barins] counsel,
particularly Atty. Ma. Concepcion Regalado, to be required to
explain why no disciplinary action should be taken against them
(sic) for their (sic), unethical conduct of directly negotiating with
[respondent Go] without the presence of undersigned counsel, and
for submitting the Release, Waiver and Quitclaim before Labor
Arbiter Waldo Emerson Gan knowing fully well that the controversy
between [respondent Go] and [EHSI] is still pending before this
Honorable Court.
[Respondent Go] likewise prays for such other relief [as
may be] just and equitable under the premises.[14]
For their part, EHSI, Kunack and Barin submitted a Manifestation and
Motion with Leave of Court[15] praying that CA-G.R. SP No. 69909 be considered
settled with finality in view of the amicable settlement among the parties which
resulted in the dismissal of respondent Gos complaint with prejudice in the Labor
Arbiters Order dated 16 July 2003.
In addition, EHSI, Kunack and Barin also filed a Motion for Reconsideration[16] with
an ad cautelam that in case of unfavorable action on their foregoing Manifestation
and Motion, the appellate court should reconsider its decision dated 9 July 2003.
Acting on the motions, the appellate court issued a Resolution[17] on 19
November 2003 annulling the Order of the Labor Arbiter dated 16 July 2003 for lack
of jurisdiction. It also denied for lack of merit EHSI, Kunack and Barins Motion for
Reconsideration Ad Cautelam. In the same resolution, petitioner
Atty. Regalado was ordered to explain why she should not be cited for contempt of
court for violating Canon 9 of the Canons of Professional
Ethics. The decretal portion of the Resolution reads:
WHEREFORE, premises considered, the Manifestation
with Omnibus Motion is PARTIALLY GRANTED. The order of Labor
Arbiter Gan dismissing the case with prejudice is hereby declared
NULL and VOID for lack of jurisdiction. [EHSI, Kunack and Barins]
counsel, [herein petitioner] Atty. Ma. Concepcion Regalado is
ordered to SHOW CAUSE within five (5) days from receipt of this
Resolution why she should not be cited for contempt of court for
directly negotiating with [herein respondent Go] in violation of
Canon 9 of the Canons of Professional Ethics. On the other hand,
the Motion for Reconsideration Ad Cautelam is hereby denied for
lack of merit.
EHSI, Kunack and Barin thus filed a Petition for Review on Certiorari before this
Court, assailing the Court of Appeals decision promulgated on 9 July 2003 and its
Resolution dated 19 November 2003, denying their Motion for Reconsideration. The
case is cognized by another division of this Court.
For her part, petitioner Atty. Regalado submitted a Compliance[18] and explained
that she never took part in the negotiation for the amicable settlement of the illegal
dismissal case with respondent Go which led to the execution of a compromise
agreement by the parties on 16 July 2003. EHSI, Kunack and Barin, through a
Mr. Ragay, a former EHSI employee and a close ally of respondent Go, were the
ones who negotiated the settlement.
Further, petitioner Atty. Regalado maintained that she never met personally
respondent Go, not until 16 July 2003, when the latter appeared before the Labor
Arbiter for the execution of the Release Waiver and Quitclaim. Petitioner
Atty. Regalado claimed that she was in fact apprehensive to release the money to Undaunted, petitioner Atty. Regalado filed a Motion for Reconsideration which was

respondent Go because the latter cannot present any valid identification card to also denied by the appellate court for lack of merit.[20]

prove his identity. It was only upon the assurance of Labor Arbiter Gan that Antonio

S. Go and the person representing himself as such were one and the same, that the Hence, this instant Petition for Review on Certiorari,[21] raising the following

execution of the agreement was consummated. issues:

I.

Considering the circumstances, petitioner Atty. Regalado firmly stood that WHETHER OR NOT THE COURT OF APPEALS COMPLETELY
VIOLATED PETITIONERS CONSTITUTIONAL RIGHTS.
there was no way that she had directly dealt with respondent Go, to the latters

damage and prejudice, and misled him to enter into an amicable settlement with her II.
client.
WHETHER OR NOT THE COURT OF APPEALS TOTALLY
DISREGARDED THE MANDATORY PROVISION OF RULE 71 OF
THE 1997 RULES OF CIVIL PROCEDURE.

On 30 August 2004, the Court of Appeals issued a Resolution [19] disregarding

III.
petitioner Atty. Regalados defenses and adjudging her guilty of indirect contempt
WHETHER OR NOT THE COURT OF APPEALS COMMITTED A
under Rule 71 of the Revised Rules of Court. As declared by the appellate court, MANIFEST ERROR OF LAW IN RULING THAT PETITIONER IS
ESTOPPED FROM CHALLENGING ITS AUTHORITY TO
even granting arguendo that petitioner Atty. Regalado did not participate in the ENTERTAIN THE CONTEMPT CHARGES AGAINST HER.
negotiation process, she was nonetheless under the obligation to restrain her clients
IV.
from doing acts that she herself was prohibited to perform as mandated by Canon

16 of the Canons of Professional Ethics. However, instead of preventing her clients WHETHER OR NOT THE COURT OF APPEALS ACTED WITH
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR
from negotiating with respondent Go who was unassisted by his counsel, EXCESS OF JURISDICTION IN DISREGARDING THE
OVERWHELMING EVIDENCE ON RECORD TO EFFECT THAT
Atty. Regaladoactively participated in the consummation of the compromise PETITIONER DID NOT COMMIT ANY CONTUMACIOUS
CONDUCT.
agreement by dealing directly with respondent Go and allowing him to sign the
V.
Release Waiver and Quitclaim without his lawyer.
WHETHER OR NOT THE COURT OF APPEALS ACTED WITH
GRAVE ABUSE OF DISCRETION AND COMMITTED A GROSS
MISAPPRECIATION OF FACTS IN FINDING THE PETITIONER
 GUILTY OF INDIRECT CONTEMPT ON THE BASIS OF THE
CONFLICTING, UNCORROBORATED, AND UNVERIFIED
ASSERTIONS OF THE RESPONDENT.
Considering that the issues raised herein are both questions of law and fact, and
consistent with our policy that this Court is not a trier of facts, we shall address only
the pure questions of law and leave the factual issues, which are supported by
evidence, as found by the appellate court. It is an oft-repeated principle that in the
exercise of the Supreme Courts power of review, the Court is not a trier of facts and
does not normally undertake the re-examination of the evidence presented by the
contending parties during the trial of the case considering that the findings of facts
of the Court of Appeals, if supported by evidence, are conclusive and binding upon
this Court.[22]
Contempt of court is a defiance of the authority, justice or dignity of the court; such
conduct as tends to bring the authority and administration of the law into disrespect
or to interfere with or prejudice parties litigant or their witnesses during litigation.[23]
is defined as disobedience to the Court by acting in opposition to its authority, justice,
and dignity. It signifies not only a willful disregard or disobedience of the courts
orders, but such conduct as tends to bring the authority of the court and the
administration of law into disrepute or in some manner to impede the due
administration of justice.[24]
The power to punish for contempt is inherent in all courts and is essential to the
preservation of order in judicial proceedings and to the enforcement of judgments,
orders, and mandates of the court, and consequently, to the due administration of
justice.[25]
Thus, contempt proceedings has a dual function: (1) vindication of public
interest by punishment of contemptuous conduct; and (2) coercion to compel the
contemnor to do what the law requires him to uphold the power of the Court, and
also to secure the rights of the parties to a suit awarded by the Court.[26]
In our jurisdiction, the Rules of Court penalizes two types of contempt, namely direct
contempt and indirect contempt. [27]
Direct contempt is committed in the presence of or so near a court as to
obstruct or interrupt the proceedings before the same, and includes disrespect
toward the court, offensive personalities toward others, or refusal to be sworn or
answer as a witness, or to subscribe an affidavit or deposition when lawfully required
to do so.[28]
It
On the other hand, Section 3, Rule 71 of the Rules of Court enumerates
particular acts which constitute indirect contempt, thus:
(a) Misbehavior of an officer of a court in the performance of his
official duties or in his official transactions;
(b) Disobedience of or resistance to a lawful writ, process, order, or
judgment of a court, including the act of a person who, after being
dispossessed or ejected from any real property by the judgment or
process of any court of competent jurisdiction, enters or attempts or
induces another to enter into or upon such real property, for the
purpose of executing acts of ownership or possession, or in any
 manner disturbs the possession given to the person adjudged to be orders the consolidation of the contempt charge and the principal
entitled thereto; action for joint hearing and decision. (Emphases supplied.)

(c) Any abuse of or any unlawful interference with the processes or

proceedings of a court not constituting direct contempt under
Section 1 of this Rule; As can be gleaned above, the provisions of the Rules are unequivocal.

(d) Any improper conduct tending, directly or indirectly, to impede, Indirect contempt proceedings may be initiated only in two ways: (1) motu proprio by
obstruct, or degrade the administration of justice;
the court; or (2) through a verified petition and upon compliance with the
(e) Assuming to be an attorney or an officer of a court, and acting requirements for initiatory pleadings. Procedural requirements as outlined must be
as such without authority;
complied with.
(f) Failure to obey a subpoena duly served;

(g) The rescue, or attempted rescue, of a person or property in

There is no doubt that the complained acts of Atty. Regalado would fall under
the custody of an officer by virtue of an order or process of a court
held by him. paragraphs (a) and (d) of Section 3, Rule 71, as in fact, she was adjudged guilty of
indirect contempt. But were the proceedings conducted in convicting petitioner done
But nothing in this section shall be so construed as to
prevent the court from issuing process to bring the respondent into in accordance with law?
court, or from holding him in custody pending such
proceedings. (Emphasis supplied.)[29]
In the instant case, the indirect contempt proceedings was initiated by respondent
Go through a Manifestation with Omnibus Motion.[30] It was based on the aforesaid
Section 4, Rule 71 of the same Rules provides how proceedings for indirect Motion that the appellate court issued a Resolution[31]dated 19 November 2003,
contempt should be commenced, thus: requiring petitioner Atty. Regalado to show cause why she should not be cited for
contempt.
SEC. 4. How proceedings commenced. Proceedings for
indirect contempt may be initiated motu proprio by the court against Clearly, respondent Gos Manifestation with Omnibus Motion was the catalyst which
which the contempt was committed by an order or any other formal
charge requiring the respondent to show cause why he should not set everything in motion and led to the eventual conviction of Atty. Regalado. It was
be punished for contempt.
respondent Go who brought to the attention of the appellate court the alleged
In all other cases, charges for indirect contempt shall
be commenced by a verified petition with supporting misbehavior committed by petitioner Atty. Regalado. Without such positive act on
particulars and certified true copies of documents or papers
the part of respondent Go, no indirect contempt charge could have been initiated at
involved therein, and upon full compliance with the
requirements for filing initiatory pleadings for civil actions in all.
the court concerned. If the contempt charges arose out of or are
related to a principal action pending in the court, the petition for
contempt shall allege that fact but said petition shall be docketed,
heard and decided separately, unless the court in its discretion
Indeed, the appellate court itself, in its Resolution dated 30 August 2004, made
This above-cited case, however, has no application in the case at bar for
categorical findings as to how the contempt charge was initiated, to wit:
In the present case, [respondents Go] the factual milieu of the cases are different from each other. In Leonidas, there was
Manifestation With Omnibus Motion which led to our 19
November 2003 Resolution requiring Atty. Regalado to explain an order of the court that was utterly violated by Union Bank. Thus, even in the
why she should not be cited for contempt, x x x.[32]
absence of the motion of spouses Tamondong to cite Union Bank in contempt, the

court a quo on its own can verily initiate the action. In the present case, the appellate
We cannot, therefore, argue that the Court of Appeals on its own initiated
court could not have acquired knowledge of petitioner Atty. Regalados misbehavior
the indirect contempt charge without contradicting the factual findings made by the
without respondent Gos Manifestation with Omnibus Motion reiterating the alleged
very same court which rendered the questioned resolution.
deceitful conduct committed by the former.

It is true in Leonidas v. Judge Supnet,[33] this Court ruled that the contempt
Having painstakingly laid down that the instant case was not initiated by the
proceedings was considered commenced by the court motu proprio even if the show
court motu proprio necessitates us to look into the second mode of filing indirect
cause order came after the filing of the motions to cite for contempt filed by the
contempt proceedings.
adverse party. The Decision thus reads:

In cases where the court did not initiate the contempt charge, the Rules
Thus, independently of the motions filed by
the Tamondong Spouses, it was the Pasay MTC which prescribe that a verified petition which has complied with the requirements of
commenced the contempt proceedings motu proprio. No verified
initiatory pleadings as outlined in the heretofore quoted provision of second
petition is required if proceedings for indirect contempt are initiated
in this manner, and the absence of a verified petition does not affect paragraph, Section 4, Rule 71 of the Rules of Court, must be filed.
the procedure adopted.
It is true that the Tamondong Spouses did file a Motion To
Cite Plaintiff For Contempt Of Court, dated May 17, 2000. In this The manner upon which the case at bar was commenced is clearly in
pleading they prayed that Union Bank be declared in indirect
contempt of court for its disobedience to the PasayMTCs Order contravention with the categorical mandate of the Rules. Respondent Go filed a
dated May 9, 2000. This Order dated May 9, 2000 specifically
directed Union Bank to return immediately to the defendants Manifestation with Omnibus Motion, which was unverified and without any
the replevied motor vehicle. However, the Tamondong Spouses
unverified motion dated May 17, 2000cannot invalidate the supporting particulars and documents. Such procedural flaw notwithstanding, the
contempt proceedings because these proceedings were initiated by
respondent judge motu proprio in accordance with Section 4, Rule appellate court granted the motion and directed petitioner Atty. Regalado to
71 of the 1997 Rules of Civil Procedure.
show cause why she should not be cited for contempt. Upon petitioner

Atty. Regalados compliance with the appellate courts directive, the tribunal
proceeded in adjudging her guilty of indirect contempt and imposing a penalty of
fine, completely ignoring the procedural infirmities in the commencement of the
indirect contempt action.
It bears to stress that the power to punish for contempt is not limitless. It must be
used sparingly with caution, restraint, judiciousness, deliberation, and due regard to
[34]
the provisions of the law and the constitutional rights of the individual.
The limitations in the exercise of the power to punish for indirect contempt are
delineated by the procedural guidelines specified under Section 4, Rule 71 of the
Rules of Court. Strict compliance with such procedural guidelines is mandatory
considering that proceedings against person alleged to be guilty of contempt are
commonly treated as criminal in nature.[35]
As explained by Justice Florenz Regalado,[36] the filing of a verified petition
that has complied with the requirements for the filing of initiatory pleading, is
mandatory, and thus states:
1. This new provision clarifies with a regularity norm the
proper procedure for commencing contempt proceedings. While
such proceeding has been classified as special civil action under
the former Rules, the heterogenous practice tolerated by the courts,
has been for any party to file a motion without paying any docket or
lawful fees therefore and without complying with the requirements
for initiatory pleadings, which is now required in the second
paragraph of this amended section.
xxxx
Henceforth, except for indirect contempt proceedings
initiated motu propio by order of or a formal charge by the offended
court, all charges shall be commenced by a verified petition with
full compliance with the requirements therefore and shall be
disposed in accordance with the second paragraph of this section.
Time and again we rule that the use of the word shall underscores the
mandatory character of the Rule. The term shall is a word of command, and one
which has always or which must be given a compulsory meaning, and it is generally
imperative or mandatory.[37]
In Enriquez v. Enriquez,[38] this Court applied the word shall by giving it
mandatory and imperative import and ruled that non-compliance with the mandatory
requirements of the Rules goes into the very authority of the court to acquire
jurisdiction over the subject matter of the case, thus:
However, the 1997 Rules of Civil Procedure, as amended,
which took effect on July 1, 1997, now require that appellate docket
and other lawful fees must be paid within the same period for taking
an appeal. This is clear from the opening sentence of Section 4,
Rule 41 of the same rules that, (W)ithin the period for taking an
appeal, the appellant shall pay to the clerk of court which rendered
the judgment or final order appealed from, the full amount of the
appellate court docket and other lawful fees.
xxxx
Time and again, this Court has consistently held that
payment of docket fee within the prescribed period is mandatory for
the perfection of an appeal. Without such payment, the appellate
court does not acquire jurisdiction over the subject matter of
the action and the decision sought to be appealed from becomes
final and executory.[39] (Emphases supplied.)
In United States v. de la Santa,[40] which bears parallelism in the instant
case, we held:
The objection in this case is not, strictly speaking, to the
sufficiency of the complaint, but goes directly to the
 jurisdiction of the court over the crime with which the
accused was charged. x x x. (Emphasis supplied.) The ruling in People v. Regalario[44] that was based on the landmark

doctrine enunciated in Tijam v. Sibonghanoy[45] on the matter of jurisdiction

Even if the contempt proceedings stemmed from the main case over which by estoppel is the exception rather than the rule. Estoppel by lachesmay be invoked
the court already acquired jurisdiction, the Rules direct that the petition for contempt
to bar the issue of lack of jurisdiction only in cases in which the factual milieu is
be treated independently of the principal action.Consequently, the necessary
analogous to that in the cited case. In such controversies, laches should have been
prerequisites for the filing of initiatory pleadings, such as the filing of a verified
clearly present; that is, lack of jurisdiction must have been raised so belatedly as to
petition, attachment of a certification on non-forum shopping, and the payment of
the necessary docket fees, must be faithfully observed. [41] warrant the presumption that the party entitled to assert it had abandoned or

declined to assert it.[46]

We now proceed to the issue of estoppel raised by the Court of

Appeals. When petitioner Atty. Regalado brought to the attention of the appellate In Sibonghanoy,[47] the defense of lack of jurisdiction was raised for the first

court through a Motion for Reconsideration the remedial defect attendant to her time in a motion to dismiss filed by the Surety[48] almost 15 years after the questioned

conviction, the Court of Appeals, instead of rectifying the palpable and patent ruling had been rendered.[49] At several stages of the proceedings, in the court a

procedural error it earlier committed, altogether disregarded the glaring mistake by quo as well as in the Court of Appeals, the Surety invoked the jurisdiction of the said

interposing the doctrine of estoppel. The appellate court ruled that having actively courts to obtain affirmative relief and submitted its case for final adjudication on the

participated in the contempt proceedings, petitioner Atty. Regalado is now barred merits. It was only when the adverse decision was rendered by the Court of Appeals

from impugning the Court of Appeals jurisdiction over her contempt case citing the that it finally woke up to raise the question of jurisdiction.[50]
case of People v. Regalario.[42]

We do not agree. Clearly, the factual settings attendant in Sibonghanoy are not present in the

case at bar. Petitioner Atty. Regalado, after the receipt of the Court of Appeals

Laches is defined as the failure or neglect for an unreasonable and resolution finding her guilty of contempt, promptly filed a Motion for Reconsideration

unexplained length of time, to do that which, by exercising due diligence, could or assailing the said courts jurisdiction based on procedural infirmity in initiating the

should have been done earlier, it is negligence or omission to assert a right within a action. Her compliance with the appellate courts directive to show cause why she

reasonable length of time, warranting a presumption that the party entitled to assert should not be cited for contempt and filing a single piece of pleading to that effect

it either has abandoned it or declined to assert it.[43] could not be considered as an active participation in the judicial proceedings so as
to take the case within the milieu of Sibonghanoy. Rather, it is the natural fear to

disobey the mandate of the court that could lead to dire consequences that impelled

her to comply.

The provisions of the Rules are worded in very clear and categorical

language. In case where the indirect contempt charge is not initiated by the courts,

the filing of a verified petition which fulfills the requirements on initiatory pleadings is

a prerequisite. Beyond question now is the mandatory requirement of a verified

petition in initiating an indirect contempt proceeding. Truly, prior to the amendment

of the 1997 Rules of Civil Procedure, mere motion without complying with the

requirements for initiatory pleadings was tolerated by the courts. [51] At the onset of

the 1997 Revised Rules of Civil Procedure, however, such practice can no longer

be countenanced.

Evidently, the proceedings attendant to the conviction of petitioner

Atty. Regalado for indirect contempt suffered a serious procedural defect to which
this Court cannot close its eyes without offending the fundamental principles
enunciated in the Rules that we, ourselves, had promulgated.

The other issues raised on the merits of the contempt case have become
moot and academic.

WHEREFORE, premises considered, the instant Petition is GRANTED. The indirect

contempt proceedings before the Court of Appeals is DECLARED null and void.

SO ORDERED.
SPOUSES MARIANO P. MARASIGAN and JOSEFINA LEAL v. CHEVRON
PHILS., INC., ACCRA INVESTMENTS, CORP., and ANGARAABELLO
CONCEPCION REGALA & CRUZ (G.R. No. 184015, February 8, 2012) 350, 000.00 Bo. Cambal, 75470

San Mateo, Rizal

MENDOZA, J.:

Challenged in this petition is the January 31, 2008 Decision [1] of the Court 3,242,000.00 Quezon City 227086

of Appeals (CA), in CA-G.R. CV No. 85223, which reversed and set aside the
January 4, 2005 Decision[2] of the Regional Trial Court, Branch 61, Gumaca, 1,975, 600.00 Bo. Burgos, Rodriguez TD No. 02-4813/
Quezon (RTC-Gumaca), in Civil Case No. 2448-G, declaring the subject foreclosure
Rizal TD No. 02-4860
sale and the consequent certificate of sale null and void and ordering the petitioners,
Spouses Mariano P. Marasigan and Josefina Leal (Spouses Marasigan) to pay
1,600, 000.00 Mulanay, Quezon T- 199817
respondent Chevron Phils., Inc. (Chevron [formerly Caltex Philippines, Inc.]), moral Province
₱9,053,600.00
damages, attorneys fees and costs of suit.

The Facts Records further show that by September 30, 1993, Spouses Marasigan exceeded
their credit line and owed Chevron the amount of ₱12,075,261.02. Spouses
Records disclose Spouses Marasigan were operators of a gasoline station in
Marasigan failed to pay the obligation despite oral and written demands from
Montalban, Rizal, while Chevron is a corporation engaged in the business of refining,
Chevron. Thus, Chevron through its counsel, the Angara Abello Concepcion Regala
manufacturing, storing, distributing, and marketing of fuels, lubricants and other
and Cruz (ACCRALAW), initiated foreclosure proceedings by filing a petition for
petroleum products. Spouses Marasigan and Chevron entered into a dealership and
extrajudicial foreclosure against the real estate mortgages executed by Spouses
distributorship agreement wherein the former can purchase petroleum products from
Marasigan in favor of Chevron.
the latter on credit. To complete said agreement, Spouses Marasigan executed
deeds of real estate mortgage over their properties, as collateral, in favor of Chevron, through ACCRALAW, was able to foreclose all the real estate

Chevron. mortgages on Spouses Marasigans subject properties. Chevron, however, was only
able to recover the total amount of ₱4,925,000.00 from the public auction sales of
the mortgaged properties including the sale of the 167.1597 hectare coconut farm

Credit Lines Secured by property located in Mulanay, Quezon, which was sold for ₱130,000.00 to the only

Location TCT No. bidder, ACCRA Investments,Corp. (ACCRAIN).

₱1,886.000.00 Diliman, Q.C. 93559/290739

 Subsequently, on November 7, 1995, Chevron filed a complaint (Civil Case
No. 95-1619 for Sum of Money entitled Caltex Philippines, Inc. v. Sps. Mariano P.
Marasigan and Mareal Corporation) against Spouses Marasigan before the RTC,
Branch 136, Makati City (RTCMakati) to recover the deficiency in the amount of
₱7,667,188.10. Chevron basically alleged therein that Spouses Marasigans
outstanding obligation as of October 15, 1995 was ₱7,667,188.10 and that said
obligation remained unpaid.
In their Answer, Spouses Marasigan mainly alleged that they were greatly
prejudiced because the foreclosure sales on the subject mortgaged properties were
illegal and that the bid price of the Mulanay property in particular was shockingly
low.
On February 8, 1996, Spouses Marasigan filed a complaint [Civil Case No.
2448-C for Declaration of Nullity and/or Annulment of Foreclosure with Damages
entitled Sps. Mariano P. Marasigan and Josefina Leal Marasigan v. Caltex
(Philippines), Inc., ACCRA Investment Corporation, Angara Abello Concepcion
Regala & Cruz and Romeo N. Villafranca] against Chevron, ACCRAIN and
ACCRALAW and Sheriff Romeo Villafranca before the RTC-Gumaca. Spouses
Marasigan principally alleged therein that the bid price was grossly inadequate and
shockingly low which rendered the foreclosure sale fatally defective and the
foreclosure proceedings invalid and illegal. Chevron, ACCRAIN and ACCRALAW
filed a motion to dismiss citing as ground Spouses Marasigans failure to disclose in
their certification against forum shopping the pending case filed before the RTC-
Makati and the consequent violation of the rule on litis pendentia.
On August 21, 1996, the RTC issued an order[3] denying the motion to
dismiss, and ruling that there was no forum shopping because there was no decision
yet in the RTC-Makati case (Civil Case No. 95-1619) when the RTC-Gumaca case
(Civil Case No. 2448-G) was filed and that there were parties in the former who were
not parties in the latter.
Chevron, ACCRAIN and ACCRALAW then filed their Answer with
Compulsory Counterclaim alleging, among others, that the foreclosure sale was
conducted in accordance with law and that the complaint in Civil Case No. 2448-G
violated the rule on forum shopping and litis pendentia.
On January 4, 2005, the RTC-Gumaca rendered a decision in favor of
Spouses Marasigan and against Chevron, ACCRAIN and ACCRALAW, the
dispositive portion of which reads, as follows:
WHEREFORE, premises considered, judgment is hereby
rendered in favor of the plaintiff and against the defendant:
1. Declaring the foreclosure sale of Mulanay
property conducted by Provincial Sheriff of
Gumaca on September 12, 1995 as well as the
certificate of sale dated September 18,
1995 issued thereto as null and void and hereby
ordered the same cancelled and set aside.
2. Ordering defendants jointly and severally to
pay plaintiffs the amount of Php25,000.00 as
moral damages, and the amount of
Php50,000.00 as attorneys fees and costs of the
suit.
The defendants counterclaim being merely the result of the
filing of the plaintiffs complaint is hereby dismissed.
SO ORDERED.[4]

Chevron, ACCRAIN and ACCRALAW appealed to the CA which summed
up the issues to be resolved as follow:
1) Whether or not the instant case is dismissible on the grounds
of forum shopping and litis pendentia;
2) Whether or not the foreclosure sale can be declared null and
void for gross inadequacy of the price;
3) Whether or not appellees are entitled to moral damages,
attorneys fees and costs of suit; and
4) Whether or not the appellants are entitled to
counterclaims.
On January 31, 2008, the CA rendered a decision reversing and setting
aside the RTC decision. The CA ruled that Spouses Marasigan committed forum
shopping and that all the elements of litis pendentia are present. Accordingly, Civil
Case No. 2448-G, filed by Spouses Marasigan in the RTC-Gumaca was dismissible
on the grounds of forum shopping and litis pendentia. The CA ruled as follows:
On the other hand, forum shopping is the act of the party
against whom an adverse judgment has been rendered in one
forum, of seeking another opinion in another forum other than by
appeal or the special civil action of certiorari; or the institution of two
or more actions or proceedings grounded on the same cause on the
supposition that one or the other court would make a favorable
disposition. We find that the appellees committed forum shopping
which is cause for the dismissal of the case. Under the last part of
Section 5, Rule 7 of the Rules, if the acts of the party or his counsel
clearly constitute willful and deliberate forum shopping, the same
shall be ground for summary dismissal with prejudice and shall
constitute direct contempt as well as cause for administrative
sanctions. Forum shopping is an act of malpractice because it
abuses court processes.
The test for determining whether a party violates the rule
against forum shopping is where a final judgment in one case will
amount to res judicata in the action under consideration or where
the elements of litis pendentia are present: The requisites of litis
pendentia are the following: (a) identity of parties, or at least such
as representing the same interests in both actions; (b) identity of
rights asserted and relief prayed for, the relief founded on the same
facts; and (c) identity of the two cases such that judgment in one,
regardless of which party is successful, would amount to res
judicata in the other.
In the instant case, We find the elements of litis
pendentia present. On identity of parties, appellant Chevron and the
their
appellees are the same parties in both cases. Appellant Chevron is
the plaintiff while the appellees and Mareal Co., Inc. are the
defendants in the Makati RTC case. On the other hand, in the
instant case, the appellees are the plaintiffs while appellants
Chevron, ACCRALAW and ACCRAIN are the defendants. It is of no
moment that ACCRALAW and ACCRAIN are not party-plaintiffs in
the Makati RTC case because the rule does not require absolute
identity of parties; substantial identity of parties is sufficient. The fact
that there are additional parties in the present case is not material
as long as the principal parties Chevron and the Spouses
Marasigan remain.
As to subject matter, the rights asserted by both parties are
based on the same credit lines and real estate mortgages. In the
Makati RTC case, appellant Chevron has to prove that deliveries of
Chevron products were made pursuant to the credit lines and the
real estate mortgages securing the same; and that the subsequent
foreclosure are valid but there is still a deficiency after conducting
the proceeds of the foreclosure sale from appellees obligation. In
the instant case, appellees seek to evade or diminish their liability
under the credit lines and real estate mortgages by either having
the foreclosure sale of the Mulanay property annulled or by
collecting the alleged discrepancy between the market value of the
property and the bid price offered by ACCRAIN. Thus, although the
instant case pertains only to the Mulanay property, the resolution of
 both cases would require a determination of the validity and
enforceability of the deliveries made by Chevron, of the real estate
mortgages and foreclosure proceedings. In both cases, the same
evidence would be presented and the same subject matter would
be litigated. The difference in the form of the actions is of no
moment as the test of identity of causes of action lies not in the form
of an action but on whether the same evidence would support and
establish the former and the present causes of action.
Xxx
It must be stressed that the appellees raised an affirmative
defense in their amended answer in the Makati RTC case the
illegality of the foreclosure sale of the Mulanay property; appellees
raise the same issue in the instant complaint. There is no doubt that
a judgment in the Makati RTC case as regards the validity of the
foreclosure sale of the Mulanay property will constitute res
judicata in the instant case, and vice versa.
Accordingly, the instant case is dismissible on the litis
pendentia pursuant to Section 1 (e). Rule 16 of the Rules of Civil
Procedure. The case is also dismissible on the ground of forum
shopping since forum shopping exists where the elements of litis
pendentia are present.
The Makati case should subsist because it was filed ahead
and is an appropriate vehicle for litigating all issues in this
controversy.
Xxx
We find no need to expound on the other issues raised in
this case. Indeed, to do so would preempt the judgment of the RTC
in Civil Case No. 95-1619 which is still pending with Branch 136,
and result in the miscarriage of justice.
Aggrieved by the CA decision, Spouses Marasigan filed this petition praying
for its reversal and setting aside anchored on the following
GROUNDS:
I
THE CA ERRED IN RULING THAT THE RTC-GUMACA ERRED
WHEN IT DENIED RESPONDENTS MOTION TO DISMISS ON
THE GROUND OF FORUM SHOPPING AND LITIS PENDENTIA.
II
THE CA ERRED IN RULING THAT THE MAKATI CASE (CIVIL
CASE NO. 95-1619) SHOULD SUBSIST BECAUSE IT WAS
FILED AHEAD AND IS AN APPROPRIATE VEHICLE FOR
LITIGATING ALL THE ISSUES IN THE CONTROVERSY.
III
THE COURT OF APPEALS GROSSLY ERRED IN NOT
APPRECIATING THE DECISION OF ITS FIFTEENTH DIVISION
DATED MAY 21, 1999 FINDING ANOMALY IN THE CONDUCT
OF FORECLOSURE BY RESPONDENTS. RESPONDENTS
DELIBERATELY OMITTED THE DECISION OF THE FIFTEENTH
DIVISION IN ITS APPELLANTS BRIEF IN CA G.R. NO. C.V. NO.
85223.
IV
RESPONDENTS CHEVRON, ACCRALAW AND ACCRAIN DID
NOT INCLUDE RESPONDENT SHERIFF OF GUMACA
(QUEZON) IN THEIR APPEAL BEFORE THE COURT OF
APPEALS. SHERIFF IS INDISPENSABLE PARTY TO THE
GUMACA CASE (CIVIL CASE NO. 2448-G).
V
 RESPONDENTS ACCRALAW AND ACCRAIN VIOLATED The petitioners state that ACCRAIN, ACCRALAW and Villafranca did not
ARTICLE 1461 OF THE CIVIL CODE.
join Chevron in the RTC-Makati case. Neither did they participate in, nor claim

responsibility for, the acts complained of against Chevron. Said defendants had

Spouses Marasigan argue that the RTC-Gumaca properly denied the nothing to do with the deficiency claim and the application, issuance and

respondents motion to dismiss on the ground of forum shopping and litis pendentia. implementation of the writ of attachment which pertain solely to Chevron. Hence,

Citing the decision of the RTC-Gumaca, Spouses Marasigan claim that Civil Case any judgment that may be rendered in the RTC-Makati case cannot be legally

No. 95-1619 filed by Chevron in the RTC-Makati was for collection with preliminary enforced against said defendants because they cannot be held responsible for the

attachment with prayer for preliminary injunction, and that Mareal Co., Inc. and acts of Chevron.

themselves are the defendants therein. On the other hand, Civil Case No. 2448-G

filed by them before the RTC-Gumaca was for declaration of nullity and/or Further, according to Spouses Marasigan, the rights alleged to have been

annulment of foreclosure with damages against Chevron, ACCRALAW and violated in the two (2) cases arose out of separate sources. They claim that in the

ACCRAIN. They further claim that in the Makati RTC case, Chevron endeavored to RTC-Makati case, the legal basis for the claim of damages was the application,

collect the deficiency arising from the foreclosure of mortgage on the properties of issuance and implementation of a writ of attachment which resulted in damage to

Spouses Marasigan, including their Gumaca property, while in the RTC-Gumaca said defendants consisting of damaged reputation, credit standing before the banks

case, they sought a court declaration that the foreclosure sale, specially the Mulanay and their creditors and the business community; that, in effect, the issues in the

property, was a nullity. RTC-Makati case were basically anchored on the applicability of the legal provisions

Spouses Marasigan also insist that there is no forum shopping because of on damages defined in Articles 2195 to 2232 of the Civil Code and the pertinent

the diversity of parties in the RTC-Makati case and the RTC-Gumaca case. They provisions of the Rules of Court; that, on the other hand, the issues in the RTC-

argue that in the RTC-Gumaca case, only the Spouses Marasigan stand as plaintiffs Gumaca case were based on the application of Article 1491 of the Civil Code which

while Chevron, ACCRAIN and ACCRALAW are the defendants. They likewise aver relates to the validity of the acquisition of real property at public or judicial action by

that Mareal Co., Inc. is not a party plaintiff in the RTC-Gumaca case and ACCRAIN, officers of the court; and that since the issues in the two (2) civil actions were distinct,

ACCRALAW and Romeo Villafranca are not parties in the RTC-Makati case. they did not engage in forum shopping.
 Thus, Spouses Marasigan are adamant that litis pendentia is not a valid
ground for the dismissal of the RTC-Gumaca case because a judgment in the RTC-
Makati case or vice versa, will not be res judicata on the other.
Spouses Marasigan further argue that the CA violated the rule on venue
and jurisdiction when it ruled that the RTC-Makati was the appropriate vehicle for
litigating the annulment of foreclosure of the Mulanay property. They add that the
RTC-Gumaca is the appropriate vehicle for it because the subject property is located
there.
Finally, Spouses Marasigan assert that the CA erred in not appreciating the
finding of an anomaly in the conduct of the foreclosure by the respondents; that the
respondents did not include the Sheriff of Gumaca in their appeal before the CA;
that the Sheriff is an indispensable party to the RTC-Gumaca case; and that Article
1461 of the Civil Code was violated by the acquisition of the Mulanay property by
ACCRAIN, an investment arm of ACCRALAW, and controlled by the latter.
On the other hand, the respondents counter, among others, that the petition
should have been dismissed outright considering that the petitioners failed to comply
with the most basic and express requirements of the Rules of Court; that despite
being given the opportunity to do so, the petitioners failed to submit a Verification
and Certification and an Affidavit of Service that complies with the 2004 Rules on
Notarial Practice; that the petitioners failed to attach material portions of the record,
such as their Amended Answer to the complaint in the RTC-Makati case; that the
petitioners repeated non-compliance with procedural rules, absent special and
compelling circumstances to justify the same, is undeserving of a liberal application
of the rules; that the petition raises questions of facts; that the petitioners committed
forum-shopping in instituting the RTC-Gumaca Case notwithstanding the pendency
of the RTC-Makati Case; that the petitioners prayed for the same relief in their
complaint in the RTC-Gumaca Case and in their Answer in the Makati Case; that
the petitioners are estopped from questioning the jurisdiction of the court in the RTC-
Makati case considering that they were the ones who submitted the issues before
said court, and prayed for relief from said court; that the petitioners failed to appeal
the decision of the Makati RTC rejecting their claim that the foreclosure sale violated
Article 1491 of the Civil Code, thus, they are bound by such ruling and that, in any
case, there was no violation of Article 1491 by ACCRALAW and ACCRAIN and that
the petitioners have no personality to question the foreclosure sale on the ground of
Article 1491; and that the foreclosure sale was valid and complied strictly with the
requirements of Act No. 3135 and that inadequacy of the bid price is not a ground
to annul the foreclosure sale.
THE COURTS RULING
The petition cannot prosper.
This Court shall first tackle the issue of whether or not the CA correctly ordered the
dismissal of the complaint in Civil Case No. 2448-G filed by Spouses Marasigan
before the RTC-Gumaca on the grounds of forum shopping and litis pendentia.
Simply put, the determinative questions in this petition are: (1) is litis
pendentia present? and (2) did petitioners violate the rules on forum shopping? An
affirmative answer to these particular questions would necessarily mean that there
would be no need to discuss, much less, resolve all the other issues raised in this
petition.
The essence of forum shopping is the filing by a party against whom an
adverse judgment has been rendered in one forum, seeking another and possibly
favorable opinion in another suit other than by appeal or special civil action for
certiorari. It is the act of filing of multiple suits involving the same parties for the same
cause of action, either simultaneously or successively for the purpose of obtaining
a favorable judgment. Forum shopping exists where the elements of litis
pendentia are present or where a final judgment in one case will amount to res
judicata in the action under consideration.[5]
Litis pendentia is a Latin term, which literally means "a pending suit" and is
variously referred to in some decisions as lis pendens and auter action pendant. As
a ground for the dismissal of a civil action, it refers to the situation where two actions
are pending between the same parties for the same cause of action, so that one of
them becomes unnecessary and vexatious. It is based on the policy against
multiplicity of suits.[6]
Litis pendentia requires the concurrence of the following requisites: (1)
identity of parties, or at least such parties as those representing the same interests
in both actions; (2) identity of rights asserted and reliefs prayed for, the reliefs being
founded on the same facts; and (3) identity with respect to the two preceding
particulars in the two cases, such that any judgment that may be rendered in the
pending case, regardless of which party is successful, would amount to res
judicata in the other case.
What is pivotal in determining whether forum shopping exists or not is the
vexation caused to the courts and parties-litigants by a party who asks different
courts and/or administrative agencies to rule on the same or related cases and/or
grant the same or substantially the same reliefs, in the process creating the
possibility of conflicting decisions being rendered by the different courts and/or
administrative agencies upon the same issues.[7]
In the case at bench, all the requisites of litis pendentia are present. The
first element, identity of parties, or at least representing the same interest in both
actions, exists. The Court agrees with the ruling of the CA that Chevron and Spouses
Marasigan are the same parties in the RTC-Makati Case and the RTC-Gumaca
Case. Unquestionably, the plaintiff and the defendants in the RTC-Makati Case are
Chevron and Spouses Marasigan as well as Mareal Co., Inc., respectively. On the
other hand, the plaintiffs in the RTC-Gumaca Case are the Spouses Marasigan and
the defendants therein are Chevron, ACCRAIN and ACCRALAW. The absence of
ACCRAIN and ACCRALAW as party plaintiffs in the RTC-Makati case and their
additional presence as party defendants in the RTC-Gumaca case would not
unfavorably affect the respondents because the rule does not require absolute
identity of parties. A substantial identity of parties is enough to qualify under the first
requisite. What is important here is that the principal parties Chevron and Spouses
Marasigan are the same in both cases. The Court held:
In this case, the first requisite, identity of parties or at least
such as represent the same interest in both actions, is present. The
Court of Appeals correctly ruled that the fact that there is no
absolute identity of parties in both cases will not preclude the
application of the rule of litis pendentia, since only substantial and
not absolute identity of parties is required for litis pendentia to
lie.[8] [Emphasis supplied]

The second element, identity of rights asserted and reliefs prayed for, the
reliefs being founded on the same facts, likewise subsists here. It cannot be denied
that the complaint filed in the RTC-Makati was for a Sum of Money while that filed
in the RTC-Gumaca was for Declaration of Nullity and/or Annulment of Foreclosure
with Damages. Although both cases differ in form or nature, the same facts would
be alleged and the same evidence would be presented considering that the
resolution of both cases would be based on the validity and enforceability of the
same credit lines, real estate mortgages and foreclosure proceedings. Indeed, the
true test in determining the identity of causes of action lies not in the form or nature
of the actions but rather in the evidence that would be presented.
The test to determine identity of causes of action is to
ascertain whether the same evidence necessary to sustain the
second cause of action is sufficient to authorize a recovery in the
first, even if the forms or the nature of the two (2) actions are
different from each other. If the same facts or evidence would
sustain both, the two (2) actions are considered the same within the
rule that the judgment in the former is a bar to the subsequent
action; otherwise, it is not. This method has been considered the
most accurate test as to whether a former judgment is a bar in
subsequent proceedings between the same parties. It has even
been designated as infallible.[9]
In this regard, the CA aptly explained this matter, as follows:
As to subject matter, the rights asserted by both parties are
based on the same credit lines and real estate mortgages. In the
Makati RTC case, appellant Chevron has to prove that deliveries of
Chevron products were made pursuant to the credit lines and the
real estate mortgages securing the same; and that the subsequent
foreclosure are valid but there is still a deficiency after deducting the
proceeds of the foreclosure sale from appellees obligation. In the
instant case, appellees seek to evade or diminish their liability under
the credit lines and real estate mortgages by either having the
foreclosure sale of the Mulanay property annulled or by collecting
the alleged discrepancy between the market value of the property
and the bid price offered by ACCRAIN. Thus, although the instant
case pertains only to the Mulanay property, the resolution of both
cases would require a determination of the validity and
enforceability of the deliveries made by Chevron of the real estate
mortgages and foreclosure proceedings. In both cases, the same
evidence would be presented and the same subject matter would
be litigated. The difference in the form of actions is of no moment
as the test of identity of causes of action lies not in the form of an
action but on whether the same evidence would support and
establish the former and the present causes of action.
Finally, the presence of the third element, that the identity of the two cases
should be such that the judgment that may be rendered in one would, regardless of
which party is successful, amount to res judicata in the other, cannot be disputed
either.
Spouses Marasigan do not deny the fact that the affirmative defense that
they raised in the RTC-Makati case was the illegality of the foreclosure sale of the
Mulanay property.[10] They raised the same issue in the RTC-Gumaca case.[11] As
correctly ruled by the CA, the judgment in the RTC-Makati with regard to the validity
of the foreclosure sale of the Mulanay property will constitute res judicata in the
case, and vice versa. The Court also agrees with its ruling that the RTC-Makati case
should be the priority case because it was filed earlier and, therefore, the appropriate
vehicle for litigating all issues in this case.
The Court having ruled that the CA properly dismissed the petitioners
complaint due to the presence of litis pendentia and the violation of the rule on forum
shopping, there is no need to rule further on the other issues raised by the petitioners
and the respondents in this case.
WHEREFORE, the petition is DENIED. SO ORDERED.
ERMELINDA C. MANALOTO, AURORA J. CIFRA, FLORDELIZA J. ARCILLA,
LOURDES J. CATALAN, ETHELINDA J. HOLT, BIENVENIDO R. JONGCO,
ARTEMIO R. JONGCO, JR. and JOEL JONGCO v. ISMAEL VELOSO III (G.R.
No. 171365, October 6, 2010)
DECISION
LEONARDO-DE CASTRO, J.:
Before Us is a Petition for Review on Certiorari of the Decision[1] dated
January 31, 2006 of the Court Appeals in CA-G.R. CV No. 82610, which affirmed
with modification the Resolution[2] dated September 2, 2003 of Branch 227 of the
Regional Trial Court (RTC-Branch 227) of Quezon City in Civil Case No. Q-02-
48341.
We partly reproduce below the facts of the case as culled by the Court of
Appeals from the records:
This case is an off-shoot of an unlawful detainer case filed
by [herein petitioners] Ermelinda C. Manaloto, Aurora J. Cifra,
Flordeliza J. Arcilla, Lourdes J. Catalan, Ethelinda J. Holt,
Bienvenido R. Jongco, Artemio R. Jongco, Jr. and Joel Jongco
against [herein respondent]. In said complaint for unlawful detainer,
it was alleged that they are the lessors of a residential house located
at No. 42 Big Horseshoe Drive, Horseshoe Village, Quezon City
[subject property] which was leased to [respondent] at a monthly
rental of P17,000.00. The action was instituted on the ground of
[respondents] failure to pay rentals from May 23, 1997 to December
22, 1998 despite repeated demands. [Respondent] denied the non-
payment of rentals and alleged that he made an advance payment
of P825,000.00 when he paid for the repairs done on the leased
property.
After trial, the Metropolitan Trial Court (MeTC) decided in
favor of [petitioners] by ordering [respondent] to (a) vacate the
premises at No. 42 Big Horseshoe Drive, Horseshoe Village,
Quezon City; (b) pay [petitioners] the sum of P306,000.00
corresponding to the rentals due from May 23, 1997 to November
22, 1998, and the sum of P17,000.00 a month thereafter until
[respondent] vacates the premises; and (c) pay [petitioners] the
sum of P5,000.00 as attorneys fees.
On appeal to the Regional Trial Court (RTC) [Branch 88,
Quezon City], the MeTC decision was reversed. [Respondent] was
ordered to pay arrearages from May 23, 1997 up to the date of the
decision but he was also given an option to choose between staying
in the leased property or vacating the same, subject to the
reimbursement by [petitioners] of one-half of the value of the
improvements which it found to be in the amount
of P120,000.00. [Respondent] was also given the right to remove
said improvements pursuant to Article 1678 of the Civil Code,
should [petitioners] refuse to pay P60,000.00.
When both parties moved for the reconsideration of the
RTC decision, the RTC issued an Order dated February 23, 2001
modifying its previous ruling by increasing the value of the
improvements from P120,000.00 to P800,000.00.
After successive appeals to the Court of Appeals and the
Supreme Court, the decision of the RTC dated November 29, 2000
which reversed the decision of the MeTC, became final and
executory.[3]
Whilst respondents appeal of the Metropolitan Trial Court (MeTC) judgment
in the unlawful detainer case was pending before the RTC-Branch 88, respondent
filed before the RTC-Branch 227 on November 26, 2002 a Complaint for Breach of
Contract and Damages[4] against the petitioners, docketed as Civil Case No. Q-02-
48341. The said complaint alleged two causes of action. The first cause of
action was for damages because the respondent supposedly suffered
embarrassment and humiliation when petitioners distributed copies of the above-
mentioned MeTC decision in the unlawful detainer case to the homeowners of
Horseshoe Village while respondents appeal was still pending before the Quezon

City RTC-Branch 88. The second cause of action was for breach of contract since
petitioners, as lessors, failed to make continuing repairs on the subject property to
preserve and keep it tenantable. Thus, respondent sought the following from the
court a quo:
PRAYER
WHEREFORE, premises considered, it is respectfully prayed that
after hearing the court render a decision against the [herein
petitioners] and in favor of the [herein respondent] by
1. Ordering [petitioners] to pay [respondent] the following amounts:
a) P1,500,000.00 as moral damages and
consequential damages;
b) P500,000.00 as exemplary damages;
c) P425,000.00 representing the difference of the
expenses of the improvements of P825,000.00
and P400,000.00 pursuant to Art. 1678 of the Civil Code;
d) P594,000.00 representing interest for three (3)
years from 1998 to 2000 on the P825,000.00 advanced by
the [respondent] at the rate of 24% per annum;
e) P250,000.00 as compensation for the
[respondents] labor and efforts in overseeing and attending
the needs of contractors the repair/renovation of the leased
premises;
f) P250,000.00, plus 20% of all recoveries from
[petitioners] and P2,500.00 per hearing as attorneys fees;
g) Cost of suit.
[Respondent] further prays for such other reliefs and
remedies which are just and equitable under the premises.[5]
The petitioners filed an Omnibus Motion[6] on February 18, 2003 praying for,
among other reliefs, the dismissal of respondents complaint in Civil Case No. Q-02-
48341. Petitioners argued that respondent had no cause of action against them
because the MeTC decision in the unlawful detainer case was a matter of public
record and its disclosure to the public violated no law or any legal right of the
respondent. Moreover, petitioners averred that the respondents present Complaint
for Breach of Contract and Damages was barred by prior judgment since it was a
mere replication of respondents Answer with Compulsory Counterclaim in the
unlawful detainer case before the MeTC. The said unlawful detainer case was
already judicially decided with finality.
On September 2, 2003, the RTC-Branch 227 issued a Resolution
dismissing respondents complaint in Civil Case No. Q-02-48341 for violating the rule
against splitting of cause of action, lack of jurisdiction, and failure to disclose the
pendency of a related case. The RTC-Branch 227 adjudged that Civil Case No. Q-
02-48341 involved the same facts, parties, and causes of action as those in the
unlawful detainer case, and the MeTC had already properly taken cognizance of the
latter case.
Respondent received a copy of the RTC-Branch 227 decision in Civil Case No. Q-
02-48341 on September 26, 2003. He filed a Motion for Reconsideration[7] of said
judgment on October 10, 2003, which RTC-Branch 227 denied in an Order[8] dated
December 30, 2003.
 Respondent received a copy of the RTC-Branch 227 order denying his
Motion for Reconsideration on February 20, 2004, and he filed his Notice of
Appeal[9] on March 1, 2004. However, the RTC-Branch 227, in an Order[10] dated
March 23, 2004, dismissed respondents appeal for being filed out of time.
Respondent received a copy of the RTC-Branch 27 order dismissing his
appeal on April 30, 2004 and he filed a Motion for Reconsideration [11] of the same
on May 3, 2004. The RTC-Branch 227, in another Order[12] dated May 31, 2004,
granted respondents latest motion because it was convinced that it is but appropriate
and fair to both parties that this matter of whether or not the Appeal was filed on
time, be resolved by the appellate court rather than by this Court. The RTC-Branch
227 then ordered that the records of the case be forwarded as soon as possible to
the Court of Appeals for further proceedings.
The Court of Appeals, in a Resolution[13] dated February 8, 2005, resolved
to give due course to respondents appeal. Said appeal was docketed as CA-G.R.
CV No. 82610.
On January 31, 2006, the Court of Appeals rendered its Decision in CA-
G.R. CV No. 82610. The Court of Appeals fully agreed with the RTC-Branch 227 in
dismissing respondents second cause of action (i.e., breach of contract) in Civil
Case No. Q-02-48341. The appellate court, however, held that RTC-Branch 227
should have proceeded with the trial on the merits of the first cause of action (i.e.,
damages) in Civil Case No. Q-02-48341, because [a]lthough [herein respondent]
may have stated the same factual antecedents that transpired in the unlawful
detainer case, such allegations were necessary to give an overview of the facts
leading to the institution of another case between the parties before the RTC acting
in its original jurisdiction.[14]
The Court of Appeals then went on to find that petitioners were indeed liable
to respondent for damages:
No doubt, distributing the copies was primarily intended to
embarrass [herein respondent] in the community he mingled in. We
are not unmindful of the fact that court decisions are public
documents and the general public is allowed access thereto to
make inquiries thereon or to secure a copy thereof. Nevertheless,
under the circumstances of this case, although court decisions are
public documents, distribution of the same during the pendency of
an appeal was clearly intended to cause [respondent] some form of
harassment and/or humiliation so that [respondent] would be
ostracized by his neighbors. The appeal may have delayed the
attainment of finality of the determination of the rights of the parties
and the execution in the unlawful detainer case but it did not justify
[herein petitioners] pre-emption of the outcome of the appeal. By
distributing copies of the MeTC decision, [petitioners] appeared to
have assumed that the MeTC decision would simply be affirmed
and therefore they tried to cause the early ouster of [respondent]
thinking that a humiliated [respondent] would scurry out of the
leased premises. Clearly, there was evident bad faith intended to
mock [respondents] right to appeal which is a statutory remedy to
correct errors which might have been committed by the lower court.
Thus, moral damages may be awarded since [petitioners]
acted in bad faith. Bad faith does not simply connote bad judgment
or negligence, it imports a dishonest purpose or some moral
obliquity and conscious doing of a wrong, a breach of known duty
through some motive or interest or ill will that partakes of the nature
of fraud. However, an award of moral damages would require
certain conditions to be met, to wit: (1) first, there must be an injury,
whether physical, mental or psychological, clearly sustained by the
claimant; (2) second, there must be culpable act or omission
factually established; (3) third, the wrongful act or omission of the
defendant is the proximate cause of the injury sustained by the
claimant; and (4) fourth, the award of damages is predicated on any
of the cases stated in Article 2219 of the Civil Code.
But it must again be stressed that moral damages are
emphatically not intended to enrich a plaintiff at the expense of the
defendant. When awarded, moral damages must not be palpably
and scandalously excessive as to indicate that it was the result of
 passion, prejudice or corruption on the part of the trial court
judge. For this reason, this Court finds an award of P30,000.00
moral damages sufficient under the circumstances.
On the other hand, to warrant the award of exemplary
damages, the wrongful act must be accompanied by bad faith, and
an award of damages would be allowed only if the guilty party acted
in a wanton, fraudulent, reckless or malevolent
manner. Accordingly, exemplary damages in the amount
of P10,000.00 is appropriate.[15]
In the end, the Court of Appeals decreed:
WHEREFORE, the decision of the Regional Trial Court is
AFFIRMED with the MODIFICATION that the case is dismissed
only as to the second cause of action. As to the first cause of action,
[herein petitioners] are ordered to pay [herein respondent] moral
damages of P30,000.00 and exemplary damages of P10,000.00.[16]
Hence, the instant Petition for Review.
Petitioners assert that respondents appeal of the RTC-Branch 227
Resolution dated September 2, 2003, which dismissed the latters complaint in Civil
Case No. Q-02-48341, was filed out of time. Respondent received a copy of the said
resolution on September 26, 2003, and he only had 15 days from such date to file
his appeal, or until October 11, 2003. Respondent, instead, filed a Motion for
Reconsideration of the resolution on October 10, 2003, which left him with only one
more day to file his appeal. The RTC-Branch 227 subsequently denied respondents
Motion for Reconsideration in an Order dated December 30, 2003, which the
respondent received on February 20, 2004. Respondent only had until the following
day, February 21, 2004, to file the appeal. However, respondent filed his Notice of
Appeal only on March 1, 2004. Hence, petitioners conclude that the dismissal of
respondents complaint in Civil Case No. Q-02-48341 already attained finality.
Petitioners argue in the alternative that the award of damages in
respondents favor has no factual and legal bases. They contend that the Court of
Appeals erred in awarding moral and exemplary damages to respondent based on
the bare and unproven allegations in the latters complaint and without the benefit of
any hearing or trial. While the appellate court declared that RTC-Branch 227 should
have proceeded with the trial on the merits involving the action for damages, it
surprisingly went ahead and ruled on petitioners liability for said damages even
without trial. Even assuming for the sake of argument that respondents allegations
in his complaint are true, he still has no cause of action for damages against
petitioners, for the disclosure of a court decision, which is part of public record, did
not cause any legal and compensable injury to respondent.
Respondent, on the other hand, maintains that his appeal of the September
2, 2003 Resolution of the RTC-Branch 227 to the Court of Appeals was timely filed
and that the same was aptly given due course. In addition, respondent asserts that
the appellate court was correct in holding petitioners liable for damages even without
any hearing or trial since petitioners, in filing their omnibus motion praying for the
dismissal of respondents complaint on the ground of no cause of action, were
deemed to have hypothetically admitted as true the allegations in said complaint.
The petition is partly meritorious.
We note, at the outset, that the propriety of the dismissal by the RTC-Branch
227 of respondents second cause of action against petitioners (e.g., for breach of
contract) was no longer disputed by the parties. Thus, the present appeal pertains
only to respondents first cause of action (e.g., for damages), and in connection
therewith, we are called upon to resolve the following issues: (1) whether respondent
timely filed his appeal of the Resolution dated September 2, 2003 of the RTC-Branch
227 before the Court of Appeals; and (2) whether respondent is entitled to the award
of moral and exemplary damages.
We answer the first issue on the timeliness of respondents appeal
affirmatively.
Jurisprudence has settled the fresh period rule, according to which, an
ordinary appeal from the RTC to the Court of Appeals, under Section 3 of Rule 41
of the Rules of Court, shall be taken within fifteen (15) days either from receipt of
the original judgment of the trial court or from receipt of the final order of the trial
court dismissing or denying the motion for new trial or motion
reconsideration. In Sumiran v. Damaso,[17] we presented a survey of the cases
applying the fresh period rule:
As early as 2005, the Court categorically declared
in Neypes v. Court of Appeals that by virtue of the power of the
Supreme Court to amend, repeal and create new procedural rules
in all courts, the Court is allowing a fresh period of 15 days within
which to file a notice of appeal in the RTC, counted from receipt
of the order dismissing or denying a motion for new trial or
motion for reconsideration. This would standardize the appeal
periods provided in the Rules and do away with the confusion as to
when the 15-day appeal period should be counted. Thus, the Court
stated:
To recapitulate, a party-litigant may
either file his notice of appeal within 15 days
from receipt of the Regional Trial Court's
decision or file it within 15 days from receipt of
the order (the "final order") denying his motion
for new trial or motion for reconsideration.
Obviously, the new 15-day period may be
availed of only if either motion is filed;
otherwise, the decision becomes final and
executory after the lapse of the original appeal
period provided in Rule 41, Section 3.
The foregoing ruling of the Court was reiterated in Makati
Insurance Co., Inc. v. Reyes, to wit:
Propitious to petitioner is Neypes v. Court
of Appeals, promulgated on 14 September 2005
while the present Petition was already pending
before us. x x x.
xxxx
for
With the advent of the "fresh period
rule" parties who availed themselves of the
remedy of motion for reconsideration are now
allowed to file a notice of appeal within fifteen
days from the denial of that motion.
The "fresh period rule" is not inconsistent
with Rule 41, Section 3 of the Revised Rules of
Court which states that the appeal shall be taken
"within fifteen (15) days from notice of judgment or
final order appealed from." The use of the
disjunctive word "or" signifies disassociation and
independence of one thing from another. It should,
as a rule, be construed in the sense which it
ordinarily implies. Hence, the use of "or" in the
above provision supposes that the notice of
appeal may be filed within 15 days from the
notice of judgment or within 15 days from
notice of the "final order," x x x.
xxxx
 The "fresh period rule" finally eradicates
the confusion as to when the 15-day appeal period
should be counted from receipt of notice of
judgment or from receipt of notice of "final order"
appealed from.
Taking our bearings from Neypes,
in Sumaway v. Urban Bank, Inc., we set aside the
denial of a notice of appeal which was purportedly
filed five days late. With the fresh period rule, the
15-day period within which to file the notice of
appeal was counted from notice of the denial of the
therein petitioner's motion for reconsideration.
We followed suit in Elbia v. Ceniza,
wherein we applied the principle granting a fresh
period of 15 days within which to file the notice of
appeal, counted from receipt of the order
dismissing a motion for new trial or motion for
reconsideration or any final order or resolution.
Thereafter, in First Aqua Sugar Traders,
Inc. v. Bank of the Philippine Islands, we held that
a party-litigant may now file his notice of appeal
either within fifteen days from receipt of the original
decision or within fifteen days from the receipt of
the order denying the motion for reconsideration.
In De los Santos v. Vda. de Mangubat, we
applied the same principle of "fresh period rule,"
expostulating that procedural law refers to the
adjective law which prescribes rules and forms of
procedure in order that courts may be able to
administer justice. Procedural laws do not come
within the legal conception of a retroactive law, or
the general rule against the retroactive operation of
statutes. The "fresh period rule" is irrefragably
procedural, prescribing the manner in which the
appropriate period for appeal is to be computed or
determined and, therefore, can be made applicable
to actions pending upon its effectivity, such as the
present case, without danger of violating anyone
else's rights.[18] (Emphases supplied.)
Also in Sumiran, we recognized the retroactive application of the fresh
period rule to cases pending and undetermined upon its effectivity:
The retroactivity of the Neypes rule in cases where the
period for appeal had lapsed prior to the date of promulgation of
Neypes on September 14, 2005, was clearly explained by the
Court in Fil-Estate Properties, Inc. v. Homena-Valencia, stating
thus:
The determinative issue is whether the
"fresh period" rule announced in Neypes could
retroactively apply in cases where the period for
appeal had lapsed prior to 14 September 2005
when Neypes was promulgated. That question
may be answered with the guidance of the
general rule that procedural laws may be given
retroactive effect to actions pending and
undetermined at the time of their passage,
there being no vested rights in the rules of
procedure. Amendments to procedural rules are
procedural or remedial in character as they do not
create new or remove vested rights, but only
operate in furtherance of the remedy or
confirmation of rights already
existing.[19] (Emphases supplied.)
In the case before us, respondent received a copy of the Resolution dated
September 2, 2003 of the RTC-Branch 227 dismissing his complaint in Civil Case
No. Q-02-48341 on September 26, 2003. Fourteen days thereafter, on October 10,
2003, respondent filed a Motion for Reconsideration of said resolution. The RTC-

Branch 227 denied respondents Motion for Reconsideration in an Order dated
December 30, 2003, which the respondent received on February 20,
2004. On March 1, 2004, just after nine days from receipt of the order denying his
Motion for Reconsideration, respondent already filed his Notice of Appeal. Clearly,
under the fresh period rule, respondent was able to file his appeal well-within the
prescriptive period of 15 days, and the Court of Appeals did not err in giving due
course to said appeal in CA-G.R. CV No. 82610.
We likewise agree with the Court of Appeals that the RTC-Branch 227
should not have dismissed respondents complaint for damages on the ground of
failure to state a cause of action.
According to Rule 2, Section 2 of the Rules of Court, a cause of action is
the act or omission by which a party violates a right of another.
When the ground for dismissal is that the complaint states no cause of
action, such fact can be determined only from the facts alleged in the complaint and
from no other, and the court cannot consider other matters aliunde. The test,
therefore, is whether, assuming the allegations of fact in the complaint to be true, a
valid judgment could be rendered in accordance with the prayer stated therein.[20]
Respondent made the following allegations in support of his claim for
damages against petitioners:
FIRST CAUSE OF ACTION
28. After the promulgation of the Metropolitan Trial Court of
its Decision dated August 3, 1999, ordering the [herein respondent]
and all person claiming rights under him to
(a) Vacate the leased premises;
(b) pay the [herein petitioners] the sum
of P306,000.00 as unpaid rentals from May 23,
1997 to November 22, 1998; and
(c) pay the sum of P5,000.00 as attorneys fees;
But while said Decision was still pending appeal with the Regional
Trial Court, the [petitioners], through [petitioner] Manaloto, already
distributed copies of said Decision to some of the homeowners of
Horseshoe Village, who personally know the [respondent]. This act
is a direct assault or character assassination on the part of the
[respondent] because as stated in the said decision, [respondent]
has been staying in the premises but did not or refused to pay his
monthly rentals for a long period of time when in truth and in fact
was untrue.
29. That from the time the said decision was distributed to
said members homeowners, the [respondent] became the subject
of conversation or talk of the town and by virtue of which
[respondents] good name within the community or society where he
belongs was greatly damaged; his reputation was besmirched;
[respondent] suffered sleepless night and serious
anxiety. [Respondent], who is the grandson of the late Senator Jose
Veloso and Congressman Ismael Veloso, was deprived of political
career and to start with was to run as candidate for Barangay
Chairman within their area which was being offered to him by the
homeowners but this offer has started to fade and ultimately totally
vanished after the distribution of said Decision. Damages to his
good names and reputations and other damages which he suffered
as a consequence thereof, may be reasonably compensated for at
least P1,500,000.00 as moral and consequential damages.
30. In order to deter [petitioners] and others from doing as
abovementioned, [petitioners] should likewise be assessed
exemplary damages in the amount of P500,000.00.[21]
A cause of action (for damages) exists if the following elements are present:
(1) a right in favor of the plaintiff by whatever means and under whatever law it arises
or is created; (2) an obligation on the part of the named defendant to respect or not
to violate such right; and (3) an act or omission on the part of such defendant
violative of the right of the plaintiff or constituting a breach of the obligation of
defendant to the plaintiff for which the latter may maintain an action for recovery of

damages.[22] We find that all three elements exist in the case at bar. Respondent
may not have specifically identified each element, but it may be sufficiently
determined from the allegations in his complaint.
First, respondent filed the complaint to protect his good character, name,
and reputation. Every man has a right to build, keep, and be favored with a good
name. This right is protected by law with the recognition of slander and libel as
actionable wrongs, whether as criminal offenses or tortuous conduct. [23]
Second, petitioners are obliged to respect respondents good name even
though they are opposing parties in the unlawful detainer case. As Article 19 of the
Civil Code requires, [e]very person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe
honesty and good faith. A violation of such principle constitutes an abuse of rights,
a tortuous conduct. We expounded in Sea Commercial Company, Inc. v. Court of
Appeals[24] that:
The principle of abuse of rights stated in the above article,
departs from the classical theory that he who uses a right injures no
one. The modern tendency is to depart from the classical and
traditional theory, and to grant indemnity for damages in cases
where there is an abuse of rights, even when the act is not illicit.
Article 19 was intended to expand the concept of torts by
granting adequate legal remedy for the untold number of moral
wrongs which is impossible for human foresight to provide
specifically in statutory law. If mere fault or negligence in ones acts
can make him liable for damages for injury caused thereby, with
more reason should abuse or bad faith make him liable. The
absence of good faith is essential to abuse of right. Good faith is an
honest intention to abstain from taking any unconscientious
advantage of another, even through the forms or technicalities of
the law, together with an absence of all information or belief of fact
which would render the transaction unconscientious. In business
relations, it means good faith as understood by men of affairs.
While Article 19 may have been intended as a mere
declaration of principle, the cardinal law on human conduct
expressed in said article has given rise to certain rules, e.g. that
where a person exercises his rights but does so arbitrarily or
unjustly or performs his duties in a manner that is not in keeping
with honesty and good faith, he opens himself to liability. The
elements of an abuse of rights under Article 19 are: (1) there is a
legal right or duty; (2) which is exercised in bad faith; (3) for the sole
intent of prejudicing or injuring another.[25]
Petitioners are also expected to respect respondents dignity, personality,
privacy and peace of mind under Article 26 of the Civil Code, which provides:
ART. 26. Every person shall respect the dignity,
personality, privacy and peace of mind of his neighbors and other
persons. The following and similar acts, though they may not
constitute a criminal offense, shall produce a cause of action for
damages, prevention and other relief:
(1) Prying into the privacy of anothers residence;
(2) Meddling with or disturbing the private life or
family relations of another;
(3) Intriguing to cause another to be alienated from
his friends;
(4) Vexing or humiliating another on account of his
religious beliefs, lowly station in life, place of birth, physical defect,
or other personal condition.
Thus, Article 2219(10) of the Civil Code allows the recovery of moral
damages for acts and actions referred to in Article 26, among other provisions, of
the Civil Code.
In Concepcion v. Court of Appeals,[26] we explained that:
 The philosophy behind Art. 26 underscores the necessity for its
inclusion in our civil law. The Code Commission stressed in no
uncertain terms that the human personality must be exalted. The
sacredness of human personality is a concomitant consideration of
every plan for human amelioration. The touchstone of every system
of law, of the culture and civilization of every country, is how far it
dignifies man. If the statutes insufficiently protect a person from
being unjustly humiliated, in short, if human personality is not
exalted - then the laws are indeed defective. Thus, under this article,
the rights of persons are amply protected, and damages are
provided for violations of a persons dignity, personality, privacy and
peace of mind.
It is petitioners position that the act imputed to him does not
constitute any of those enumerated in Arts. 26 and 2219. In this
respect, the law is clear. The violations mentioned in the codal
provisions are not exclusive but are merely examples and do not
preclude other similar or analogous acts. Damages therefore are
allowable for actions against a persons dignity, such as profane,
insulting, humiliating, scandalous or abusive language. Under Art.
2217 of the Civil Code, moral damages which include physical
suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and
similar injury, although incapable of pecuniary computation, may be
recovered if they are the proximate result of the defendants
wrongful act or omission.[27]
And third, respondent alleged that the distribution by petitioners to
Horseshoe Village homeowners of copies of the MeTC decision in the unlawful
detainer case, which was adverse to respondent and still on appeal before the RTC-
Branch 88, had no apparent lawful or just purpose except to humiliate respondent
or assault his character. As a result, respondent suffered damages becoming the
talk of the town and being deprived of his political career.
Petitioners reason that respondent has no cause of action against them
since the MeTC decision in the unlawful detainer case was part of public records.
It is already settled that the public has a right to see and copy judicial records
and documents.[28] However, this is not a case of the public seeking and being
denied access to judicial records and documents. The controversy is rooted in the
dissemination by petitioners of the MeTC judgment against respondent to
Horseshoe Village homeowners, who were not involved at all in the unlawful detainer
case, thus, purportedly affecting negatively respondents good name and reputation
among said homeowners. The unlawful detainer case was a private dispute
between petitioners and respondent, and the MeTC decision against respondent
was then still pending appeal before the RTC-Branch 88, rendering suspect
petitioners intentions for distributing copies of said MeTC decision to non-parties in
the case. While petitioners were free to copy and distribute such copies of the MeTC
judgment to the public, the question is whether they did so with the intent of
humiliating respondent and destroying the latters good name and reputation in the
community.
Nevertheless, we further declare that the Court of Appeals erred in already
awarding moral and exemplary damages in respondents favor when the parties
have not yet had the chance to present any evidence before the RTC-Branch 227. In
civil cases, he who alleges a fact has the burden of proving it by a preponderance
of evidence. It is incumbent upon the party claiming affirmative relief from the court
to convincingly prove its claim.Bare allegations, unsubstantiated by evidence are
not equivalent to proof under our Rules. In short, mere allegations are not
evidence.[29]
At this point, the finding of the Court of Appeals of bad faith and malice on
the part of petitioners has no factual basis. Good faith is presumed and he who
alleges bad faith has the duty to prove the same. Good faith refers to the state of
the mind which is manifested by the acts of the individual concerned. It consists of
the intention to abstain from taking an unconscionable and unscrupulous advantage
of another. Bad faith, on the other hand, does not simply connote bad judgment to
simple negligence. It imports a dishonest purpose or some moral obliquity and
conscious doing of a wrong, a breach of known duty due to some motive or interest
or ill will that partakes of the nature of fraud. Malice connotes ill will or spite and
speaks not in response to duty. It implies an intention to do ulterior and unjustifiable
harm.[30]

We cannot subscribe to respondents argument that there is no more need

for the presentation of evidence by the parties since petitioners, in moving for the
dismissal of respondents complaint for damages, hypothetically admitted
respondents allegations. The hypothetical admission of respondents allegations in
the complaint only goes so far as determining whether said complaint should be
dismissed on the ground of failure to state a cause of action. A finding that the
complaint sufficiently states a cause of action does not necessarily mean that the
complaint is meritorious; it shall only result in the reinstatement of the complaint and
the hearing of the case for presentation of evidence by the parties.

WHEREFORE, in view of all the foregoing, the petition is PARTIALLY

GRANTED. The Decision dated January 31, 2006 of the Court of Appeals in CA-
G.R. CV No. 82610 is AFFIRMED WITH MODIFICATIONS. The award of moral and
exemplary damages made by the Court of Appeals in favor of respondent Ismael
Veloso III is DELETED. The complaint of respondent Ismael Veloso III in Civil Case
No. Q-02-48341 is hereby REINSTATED before Branch 227 of the Regional Trial
Court of Quezon City only in so far as the first cause of action is concerned. The
said court is DIRECTED to hear and dispose of the case with dispatch.

SO ORDERED.
DOLORES ADORA MACASLANG v. RENATO AND MELBA ZAMORA (G.R.
No. 156375, May 30, 2011)
DECISION
BERSAMIN, J.:
The Regional Trial Court (RTC) is not limited in its review of the decision of
the Municipal Trial Court (MTC) to the issues assigned by the appellant, but can
decide on the basis of the entire records of the proceedings of the trial court and
such memoranda or briefs as may be submitted by the parties or required by the
RTC.
The petitioner appeals the decision promulgated on July 3, 2002, [1] whereby
the Court of Appeals (CA) reversedfor having no basis in fact and in law the decision
rendered on May 18, 2000[2] by the Regional Trial Court, Branch 25, in Danao City
(RTC) thathad dismissed the respondents action
for ejectment against the petitioner, andreinstated the decision dated September 13,
1999 of the Municipal Trial Court in Cities (MTCC) of DanaoCity (ordering the
petitioner as defendant to vacate the premises and to pay attorneys fees
of P10,000.00 and monthly rental of P5,000.00 starting December 1997 until they
vacated the premises).[3]
We grant the petition for review and rule that contrary to the CAs conclusion,
the RTCas an appellate court properly considered and resolved issues even if not
raised in the appeal from the decisionrendered in an ejectment case by the MTCC.
ANTECEDENTS
On March 10, 1999, the respondents filed a complaint for unlawful detainer in the
MTCC, alleging that the [petitioner] sold to [respondents] a residential land located
in Sabang, DanaoCity and that the [petitioner] requested to be allowed to live in the
house with a promise to vacate as soon as she would be able to find a new
residence. They further alleged thatdespitetheir demand after a year, the petitioner
failed or refused to vacate the premises.
Despite the due service of the summons and copy of the complaint, the
petitioner did not file heranswer. The MTCC declared her in defaultupon the
respondents motion to declare her in default, and proceeded to receivethe
respondentsoral testimony and documentary evidence. Thereafter, on September
13, 1999, the MTCC rendered judgment against her, disposing:
WHEREFORE, considering the foregoing, Judgment is
hereby rendered in favor [of] plaintiffs (sic) spouses Renato Zamora
and Melba Zamora and against defendant Dolores
AdoraMacaslang, ordering defendant to vacate the properties in
question, to pay to plaintiffs Attorneys Fees in the sum
of P10,000.00 and monthly rental of P5,000.00 starting December,
1997 until the time the defendant shall have vacated the properties
in question.
SO ORDERED.[4]
The petitioner appealed to the RTC, averring the following as reversible errors,
namely:
1. Extrinsic Fraud was practiced upon defendant-appellant
which ordinary prudence could not have guarded against and
by reason of which she has been impaired of her rights.
2. Defendant-Appellant has a meritorious defense in that there
was no actual sale considering that the absolute deed of sale
relied upon by the plaintiff-appell[ees] is a patent-nullity as her
signature therein was procured through fraud and trickery.[5]
and praying through her appeal memorandum as follows:
 Wherefore, in view of the foregoing, it is most respectfully prayed
for that judgment be rendered in favor of defendant-appellant
ordering that this case be remanded back to the Court of Origin,
Municipal Trial Court of Danao City, for further proceedings to allow
the defendant to present her evidence, and thereafter, to render a
judgment anew.[6]
On May 18, 2000, the RTC resolved the appeal, to wit:[7]
WHEREFORE,judgment is hereby rendered dismissing the
complaint for failure to state a cause of action.
The same may, however, be refiled in the same Court, by
alleging plaintiffs cause of action, if any.
Plaintiffs Motion for Execution of Judgment of the lower court
is rendered moot by this judgment.
SO ORDERED.
The respondents appealed to the CA, assailing the RTCs decision for disregarding
the allegations in the complaint in determining the existence or non-existence of a
cause of action.
On July 3, 2002, the CA reversed and set aside the RTCs decision and
reinstated the MTCCs decision in favor of the respondents, disposing:
WHEREFORE,foregoing premises considered, the Petition is
hereby GIVEN DUE COURSE. Resultantly, the impugned decision
of the Regional Trial Court is hereby REVERSED and SET ASIDE
for having no basis in fact and in law, and the Decision of the
Municipal Trial Court in Cities REINSTATED and AFFIRMED. No
costs.
SO ORDERED.[8]
The petitionersmotion for reconsideration was denied onNovember 19, 2002.
ISSUES
Hence, the petitioner appeals the CAs adverse decision, submitting legal issues, as
follows:
1. Whether or not the Regional Trial Court in the exercise of its
Appellate Jurisdiction is limited to the assigned errors in the
Memorandum or brief filed before it or whether it can decide the
case based on the entire records of the case, as provided for in
Rule 40, Sec. 7. This is a novel issue which, we respectfully
submit, deserves a definitive ruling by this Honorable Supreme
Court since it involves the application of a new provision,
specifically underlined now under the 1997 Revised Rules on
Civil procedure.
2. Whether or not in an action for unlawful detainer, where there
was no prior demand to vacate and comply with the conditions
of the lease made, a valid cause of action exists?
3. Whether or not in reversing the Regional Trial Court Decision
and reinstating and affirming the decision of the Municipal
Circuit Trial Court, which was tried and decided by the MCTC
in violation of the Rules on Summary Procedure, the Court of
Appeals sanctioned a gross departure from the usual course of
judicial proceedings?[9]
The issues that this Court has to resolve are stated thuswise:
1. Whether or not the CA correctly found that the RTC committed
reversible error in ruling on issues not raised by the petitioner
in her appeal;
2. Whether or not the CA correctly found that the complaint stated
a valid cause of action;
3. Whether or not the CA erred in finding that there was a valid
demand to vacate made by the respondents on the petitioner;
and
 4. Whether or not the petitioners defense of ownership was
meritorious.
RULING
We grant the petition for review.
A.
As an appellate court, RTC may rule
upon an issue notraised on appeal
In its decision, the CA ruled that the RTC could not resolve issues that were
not assigned by the petitioner in her appeal memorandum, explaining:
Indeed(,) We are rather perplexed why the Regional Trial Court, in
arriving at its decision, discussed and ruled on issues or grounds
which were never raised, assigned, or argued on by the Defendant-
appellee in her appeal to the former. A careful reading of the
Defendant-appellees appeal memorandum clearly shows that it
only raised two (2) grounds, namely (a) alleged extrinsic fraud, (b)
meritorious defenses based on nullity of the Deed of Sale
Instrument. And yet the Trial Court, in its decision, ruled on issues
not raised such as lack of cause of action and no prior demand to
vacate having been made.
Only errors assigned and properly argued on the brief and those
necessarily related thereto, may be considered by the appellate
court in resolving an appeal in a civil case. Based on said clear
jurisprudence, the court a quo committed grave abuse of discretion
amounting to lack of jurisdiction when it resolved Defendant-
appellees appeal based on grounds or issues not raised before it,
much less assigned by Defendant-appellee as an error.
Not only that. It is settled that an issue which was not raised during
the Trial in the court below would not be raised for the first time on
appeal as to do so would be offensive to the basic rules of fair play,
justice and due process (Victorias Milling Co., Inc. vs. CA, 333
SCRA 663). We can therefore appreciate Plaintiffs-appellants
dismay caused by the Regional Trial Courts blatant disregard of a
basic and fundamental right to due process.[10]
The petitioner disagrees with the CA and contends that the RTC as an
appellate courtcould rule on the failure of the complaint to state a cause of action
and the lack of demand to vacate even if not assigned in the appeal.
We concur with the petitioners contention.
The CA might have been correct had the appeal been a first appeal from
the RTC to the CA or another proper superior court, in which instance Section 8 of
Rule 51, which applies to appeals from the RTC to the CA,imposesthe express
limitation of the review to only those specified in the assignment of errorsor closely
related to or dependent on an assigned error and properly argued in the appellants
brief, viz:
Section 8. Questions that may be decided. No error which
does not affect the jurisdiction over the subject matter or the validity
of the judgment appealed from or the proceeding therein will be
considered unless stated in the assignment of errors, or
closely related to or dependent on an assigned error and
properly argued in the brief, save as the court may pass upon
plain errors and clerical errors.
Butthe petitioners appeal herein,being taken from the decision of the MTCC
to the RTC, was governed by a different rule, specifically Section 18 of Rule 70 of
the Rules of Court, to wit:
Section 18. xxx
xxx
The judgment or final order shall be appealable to the
appropriate Regional Trial Court which shall decide the same
on the basis of the entire record of the proceedings had in the
court of origin and such memoranda and/or briefs as may be
submitted by the parties or required by the Regional Trial
Court. (7a)

As such,the RTC, in exercising appellate jurisdiction,was not limited to the
errors assigned in the petitioners appeal memorandum, but coulddecide on the
basis of the entire record of the proceedingshad in the trial court and such
memoranda and/or briefs as may be submitted by the parties or required by the
RTC.
The difference between the procedures for deciding on review is traceable
to Section 22 of Batas PambansaBlg. 129,[11]which provides:
Section 22. Appellate Jurisdiction. Regional Trial Courts shall
exercise appellate jurisdiction over all cases decided by
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
Circuit Trial Courts in their respective territorial jurisdictions.Such
cases shall be decided on the basis of the entire record of the
proceedings had in the court of origin [and] such memoranda
and/or briefs as may be submitted by the parties or required
by the Regional Trial Courts.The decision of the Regional Trial
Courts in such cases shall be appealable by petition for review to
the Court of Appeals which may give it due course only when the
petition shows prima facie that the lower court has committed an
error of fact or law that will warrant a reversal or modification of the
decision or judgment sought to be reviewed.[12]
As its compliance with the requirement of Section 36 of Batas
PambansaBlg. 129to adopt special rules or procedures applicable to such cases in
order to achieve an expeditious and inexpensive determination thereof without
regard to technical rules, the Court promulgated the 1991 Revised Rules on
Summary Procedure, whereby it institutionalized the summary procedure for all the
first level courts. Section 21 of the 1991 Revised Rules on Summary
Procedurespecifically stated:
Section 21. Appeal. Thejudgment or final order shall be
appealable to the appropriate Regional Trial Court which shall
decide the same in accordance with Section 22 of Batas
PambansaBlg. 129. The decision of the Regional Trial Court in civil
cases governed by this Rule, including forcible entry and unlawful
detainer shall be immediately executory, without prejudice to a
further appeal that may be taken therefrom. Section 10 of Rule 70
shall be deemed repealed.
Later on, the Court promulgated the 1997 Rules of Civil Procedure, effective
on July 1, 1997, and incorporated in Section 7 of Rule 40 thereof the directive to the
RTC to decide appealed caseson the basis of the entire record of the proceedings
had in the court of origin and such memoranda as are filed,viz:
Section 7. Procedure in the Regional Trial Court.
(a) Upon receipt of the complete record or the record on
appeal, the clerk of court of the Regional Trial Court shall notify the
parties of such fact.
(b) Within fifteen (15) days from such notice, it shall be the
duty of the appellant to submit a memorandum which shall briefly
discuss the errors imputed to the lower court, a copy of which shall
be furnished by him to the adverse party. Within fifteen (15) days
from receipt of the appellants memorandum, the appellee may file
his memorandum. Failure of the appellant to file a memorandum
shall be a ground for dismissal of the appeal.
(c) Upon the filing of the memorandum of the appellee, or the
expiration of the period to do so, the case shall be considered
submitted for decision. The Regional Trial Court shall decide the
case on the basis of the entire record of the proceedings had
in the court of origin and such memoranda as are filed. (n)
As a result, the RTC presently decides all appeals from the MTC based
on the entire record of the proceedings had in the court of origin and such
memoranda or briefs as are filed in the RTC.
Yet, even withoutthe differentiation in the procedures of deciding appeals,
thelimitation of the review to onlythe errors assigned and properly argued in the
appeal brief or memorandum and the errors necessarily related to such assigned
errorsought not to have obstructed the CA from resolving the unassigned issues by
virtue of their coming under one or several of the following recognized exceptions to
the limitation, namely:
(a) When the question affectsjurisdiction over the subject matter;
(b) Matters that are evidently plain or clerical errors within
contemplation of law;
(c) Matters whose consideration is necessary in arriving at a just
decision and complete resolution of the case or in serving the
interests of justice or avoiding dispensing piecemeal justice;
(d) Matters raised in the trial court and are of record having some
bearing on the issue submitted that the parties failed to raise
or that the lower court ignored;
(e) Matters closely related to an error assigned; and
(f) Matters upon which the determination of a question properly
assigned is dependent.[13]
Consequently, the CA improperly disallowed the consideration and
resolution of the two errors despite their being: (a)necessary in arriving at a just
decision and acomplete resolution of the case; and (b) matters of record having
some bearing on the issues submitted that the lower court ignored.
B.
CA correctly delved into and determined
whether or not complaint stateda cause of action
The RTC opined that the complaint failed to state a cause of action because
the evidence showed that there was no demand to vacate made upon the petitioner.
The CA disagreed, observingin its appealed decision:
But what is worse is that a careful reading of Plaintiffs-appellants
Complaint would readily reveal that they have sufficiently
established (sic) a cause of action against Defendant-appellee. It is
undisputed that as alleged in the complaint and testified to by
Plaintiffs-appellants, a demand to vacate was made before the
action for unlawful detainer was instituted.
A complaint for unlawful detainer is sufficient if it alleges that the
withholding of possession or the refusal is unlawful without
necessarily employing the terminology of the law (Jimenez vs.
Patricia, Inc., 340 SCRA 525). In the case at bench, par. 4 of the
Complaint alleges, thus:
4. After a period of one (1) year living in the
aforementioned house, Plaintiff demanded upon
defendant to vacate but she failed and refused;
From the foregoing allegation, it cannot be disputed that a demand
to vacate has not only been made but that the same was alleged in
the complaint. How the Regional Trial Court came to the
questionable conclusion that Plaintiffs-appellants had no cause of
action is beyond Us.[14]
We concur with the CA.
A complaint sufficiently alleges a cause of action for unlawful detainer if it
states the following:
(a)Initially, the possession of the property by the defendant was by
contract with or by tolerance of the plaintiff;
(b)Eventually, such possession became illegal upon notice by the
plaintiff to the defendant about the termination of the latters
right of possession;
(c)Thereafter, the defendant remained in possession of the
property and deprived the plaintiff of its enjoyment; and
 (d)Within one year from the making of the last demand to vacate
the propertyon the defendant, the plaintiff instituted the
complaint for ejectment.[15]
In resolving whether the complaint states a cause of actionor not, only the
facts alleged in the complaint are considered. The test is whether the court can
render a valid judgment on the complaint based on the facts alleged and the prayer
asked for.[16] Only ultimate facts, not legal conclusions or evidentiary facts, are
considered for purposes of applying the test.[17]
To resolve the issue, therefore, a look at the respondents complaint is
helpful:
2. On September 10, 1997, defendant sold to plaintiffs a
residential land located in Sabang, Danao City, covered by Tax
Dec.0312417 RB with an area of 400 square meters, including a
residential house where defendant was then living covered by Tax
Dec. 0312417 RB, a copy of the deed of absolute [sale] of these
properties is hereto attached as Annex A;
3. After the sale, defendant requested to be allowed to live
in the house which plaintiff granted on reliance of
defendants promise to vacate as soon as she would be able to
find a new residence;
4. After a period of one (1) year living in the aforementioned
house, plaintiffs demanded upon defendant to vacate but she
failed or refused.
5. Plaintiffs sought the aid of the barangay Lupon of Sabang,
Danao City for arbitration but no settlement was reached as shown
by a certification to file action hereto attached as Annex B;
6. Plaintiffs were compelled to file this action and hire counsel
for P10,000 by way of attorneys fee;
7. Defendant agreed to pay plaintiffs a monthly rental
of P5,000 for the period of time that the former continued to live in
the said house in question.
WHEREFORE, it is respectfully prayed of this Honorable
Court to render judgment ordering the defendant to vacate the
properties in question, ordering the defendant to pay plaintiffs
attorneys fees in the sum of P10,000, ordering the defendant to pay
the plaintiffs a monthly rental of P5,000 starting in October 1997,
until the time that defendant vacates the properties in question.
Plaintiffs pray for such other refiefs consistent with justice and
equity.[18]
Based on its allegations, the complaintsufficiently stated a cause of action
for unlawful detainer. Firstly, it averred that the petitioner possessed the property by
the mere tolerance of the respondents. Secondly, the respondents demanded that
the petitioner vacate the property, thereby rendering her possession illegal.
Thirdly,she remained in possession of the property despite the demand to vacate.
And, fourthly, the respondents instituted the complaint on March 10, 1999,which was
well within a year after the demand to vacate was made around September of 1998
or later.
Yet, even as we rule that the respondents complaint stated a cause of
action, we must find and hold that both the RTC and the CA erroneously
appreciatedthe real issue to be about the complaints failure to state a cause of
action. It certainly was not so, butthe respondents lack of cause of action. Their
erroneous appreciationexpectedly prevented the correct resolution of the action.
Failure to state a cause of action and lack of cause of action are really
different from each other.On the one hand, failure to state a cause of actionrefers to
the insufficiency of the pleading, and is a ground for dismissal under Rule 16 of
the Rules of Court. On the other hand, lack of cause action refers to a situation
where the evidence does not prove the cause of action alleged in the pleading.
Justice Regalado, a recognized commentator on remedial law, has explained the
distinction:[19]

xxx What is contemplated, therefore, is a failure to state a
cause of action which is provided in Sec. 1(g) of Rule 16. This is a
matter of insufficiency of the pleading. Sec. 5 of Rule 10, which was
also included as the last mode for raising the issue to the court,
refers to the situation where the evidence does not prove a cause
of action. This is, therefore, a matter of insufficiency of evidence.
Failure to state a cause of action is different from failure to prove a
cause of action. The remedy in the first is to move for dismissal of
the pleading, while the remedy in the second is to demur to the
evidence, hence reference to Sec. 5 of Rule 10 has been eliminated
in this section. The procedure would consequently be to require the
pleading to state a cause of action, by timely objection to its
deficiency; or, at the trial, to file a demurrer to evidence, if such
motion is warranted.
A complaint states a cause of action if it avers the existence of the three
essential elements of a cause of action, namely:
(a) The legal right of the plaintiff;
(b) The correlative obligation of the defendant; and
(c) The act or omission of the defendant in violation of said legal
right.
If the allegations of the complaint do not aver the concurrence of these
elements, the complaint becomes vulnerable to a motion to dismiss on the ground
of failure to state a cause of action.Evidently, it is not the lack or absence of a cause
of action that is a ground for the dismissal of the complaint but the fact that the
complaint states no cause of action.Failure to state a cause of action may be raised
at the earliest stages of an action through a motion to dismiss, but lack of cause of
action may be raised at any time after the questions of fact have been resolved on
the basis of the stipulations, admissions, or evidence presented. [20]
Having found that neither Exhibit C nor Exhibit E was a proper demand to
vacate,[21] considering that Exhibit C (the respondents letter dated February 11,
1998)demanded the payment of P1,101,089.90, and Exhibit E (theirletter dated
January 21, 1999) demandedthe payment of P1,600,000.00, the RTC concluded
that the demand alleged in the complaint did not constitute a demand to pay rent
and to vacate the premises necessary in an action for unlawful detainer. It was this
conclusion that caused the RTC to confuse the defect as failure of the complaint to
state a cause of action for unlawful detainer.
The RTCerred even in that regard.
To begin with, it was undeniable that Exhibit D (the respondents letter dated
April 28, 1998) constitutedthedemand to vacate that validly supported their action
for unlawful detainer, because of its unmistakable tenor as a demand to vacate,
which the following portion indicates:[22]
This is to give notice that since the mortgage to your property
has long expired and that since the property is already in my name, I
will be taking over the occupancy of said property two (2)
months from date of this letter.
Exhibit D, despite not explicitly using the wordvacate, relayed to the
petitionerthe respondents desire to take over the possession of the property by
givingher no alternative exceptto vacate.The word vacate,according toGolden Gate
Realty Corporation v. Intermediate Appellate Court,[23]is not a talismanic word that
must be employed in all notices to vacate.The tenantsin Golden Gate Realty
Corporationhad defaulted in the payment of rents, leading theirlessorto notify them
to pay with a warning that a case of ejectment would be filed against themshould
they not do so. The Court held that the lessor had thereby given strong notice that

you either pay your unpaid rentals or I will file a court case to have you thrown out
of my property,for therewas no other interpretation of the import of the notice due to
the alternatives being clear cut, in that the tenants must pay rentals that had been
fixed and had become payable in the past, failing in which they must move out.[24]
Also, the demand not being to pay rent and to vacate did not render the
cause of action deficient. Based on the complaint, the petitioners possession was
allegedly based on the respondents tolerance, not on any contract between them.
Hence, thedemand to vacate sufficed.
C.
Ejectment was not proper due
to defense of ownership being established
The respondents cause of action for unlawful detainer was based on their
supposed right to possession resulting from their having acquired it through sale.
The RTCdismissed the complaint based on its following findings, to wit:
In the case at bench, there is conflict between the allegation
of the complaint and the document attached thereto.
Simply stated, plaintiff alleged that she bought the house of
the defendant for P100,000.00 on September 10, 1997 as stated in
an alleged Deed of Absolute Sale marked as Exhibit A to the
complaint. Insofar as plaintiff is concerned, the best evidence is the
said Deed of Absolute Sale.
The Court is surprised why in plaintiffs letter dated February
11, 1998, marked as Exhibit C and attached to the same complaint,
she demanded from the defendant the whooping sum
of P1,101,089.90. It must be remembered that this letter was written
five (5) months after the deed of absolute sale was executed.
The same letter (Exhibit C) is not a letter of demand as
contemplated by law and jurisprudence. The plaintiff simply said
that she will appreciate payment per notarized document. There is
no explanation what this document is.
Plaintiffs letter dated April 28, 1998 (Exhibit D) contradicts
her allegation that she purchased the house and lot mentioned in
the complaint. Exhibit D, which is part of the pleading and a judicial
admission clearly shows that the house and lot of the defendant
was not sold but mortgaged.
Again, for purposes of emphasis and clarity, a portion of the
letter (Exhibit D) reads:
This is to give notice that since the mortgage to
your property has long expired and that since the
property is already in my name, I will be taking over
the occupancy of said property two (2) months from
date of this letter.
x xxx
Exhibit E, which is a letter dated January 21, 1999, shows the
real transaction between the parties in their case. To reiterate, the
consideration in the deed of sale (Exhibit A) is P100,000.00 but in
their letter (Exhibit E) she is already demanding the sum
of P1,600,000.00 because somebody was going to buy it
for P2,000,000.00.
There are indications that point out that the real transaction
between the parties is one of equitable mortgage and not sale.[25]
Despite holding herein that the respondents demand to vacate sufficed, we
uphold the result of the RTC decision in favor of the petitioner. This we do,because
therespondents Exhibit Cand Exhibit E, by demandingpayment from the petitioner,
respectively,of P1,101,089.90 and P1,600,000.00, revealedthe true nature of the
transaction involving the property in question as one of equitable mortgage, not a
sale.

Our upholding of the result reached by the RTC rests on the following
circumstancesthat tended to show that the petitioner had not really sold the property
to the respondents, contrary to the latters averments, namely:
(a)The petitioner, as the vendor, was paid the amount of
only P100,000.00,[26] a price too inadequate in comparison
with the sum of P1,600,000.00 demanded in Exhibit E;[27]
(b) The petitioner retained possession of the property despite the
supposed sale; and
(c) The deed of sale wasexecuted as a result or by reason of the
loan the respondents extended to the petitioner,because they
still allowed the petitioner to redeem the property by paying
her obligation under the loan.[28]
Submissions of the petitioner further supported the findings of the RTCon
the equitable mortgage. Firstly, there was the earlier dated instrument (deed of
pactode retro)involving the same property, albeit the consideration was
only P480,000.00, executed between the petitioner as vendor a retro and the
respondent Renato Zamora as vendee a retro.[29] Secondly, there were two receipts
for the payments the petitioner had made to
respondentstotaling P300,000.00.[30] And, thirdly, the former secretary
respondent Melba Zamora executed an affidavit acknowledging that the petitioner
had already paid a total of P500,000.00 to the respondents.[31]All these confirmed
the petitioners claim that she remained the owner of the property and was still
entitled to its possession.
Article 1602 of the Civil Codeenumerates the instances when a contract,
regardless of its nomenclature, may be presumed to be an equitable mortgage,
namely:
(a) When the price of a sale with right to repurchase is unusually
inadequate;
(b) When the vendor remains in possession as lessee or otherwise;
(c) When upon or after the expiration of the right to repurchase
another instrument extending the period of redemption or
granting a new period is executed;
(d)When the purchaser retains for himself a part of the purchase
price;
(e)When the vendor binds himself to pay the taxes on the thing sold;
and,
(f) In any other case where it may be fairly inferred that the real
intention of the parties is that the transaction shall secure the
payment of a debt or the performance of any other obligation.
The circumstances earlier mentioned were, indeed, badges of an equitable
mortgage within the context ofArticle 1602 of the Civil Code.
Nonetheless, the findingsfavorable to the petitioners ownership are
neitherfinally determinative of the title in the property, nor conclusive in any other
proceeding where ownership of the property involved herein may be more fittingly
the
adjudicated.Verily, where the cause of action in an ejectment suit is based on
of
ownership of the property, the defense that the defendantretainedtitle or ownership
is a proper subject for determination by the MTC but only for the purpose of
adjudicating the rightful possessor of the property.[32]This is based on Rule 70 of
the Rules of Court, viz:
Section 16. Resolving defense of ownership. When the
defendant raises the defense of ownership in his pleadings and the
question of possession cannot be resolved without deciding the
issue of ownership, the issue of ownership shall be resolved only to
determine the issue of possession.(4a)
 D.
MTC committed procedural lapses The procedural lapses committed in this case are beyond
that must be noted and corrected comprehension.The MTCC judge could not have been unfamiliar with the prevailing
procedure, considering that therevised version of Rule 70, although taking effect
The Court seizes theopportunity to note and to correctseveralnoticeable only on July 1, 1997,was derived from the 1991 Revised Rule on Summary
procedural lapses on the part of the MTCC, to avoid the impression that the Court Procedure, in effect since November 15, 1991. It was not likely, therefore, that the
condones or tolerates the lapses. MTCC judge committed the lapses out of his unfamiliarity with the relevant rule. We
discern thatthe cause of the lapses was his lack of enthusiasm in
The first lapse wasthe MTCCs granting of the respondents motion to declare implementingcorrect procedures in this case. If that was the true reason, the Court
the petitioner in default following her failure to file an answer. The proper can only be alarmed and concerned, for a judge should not lack enthusiasm in
procedurewas not for the plaintiffs to move for the declaration in default of the applying the rules of procedure lest the worthy objectives of their promulgation be
defendant who failed to file the answer. Such a motion to declare in default has been unwarrantedly sacrificed and brushed aside. The MTCC judge should not forget that
expressly prohibited under Section 13, Rule 70 of the rules of procedure were always meant to be implemented deliberately, not
theRules of Court.[33]Instead, the trial court, either motuproprio or on motion of the casually, and their non-compliance should only be excused in the higher interest of
plaintiff, should render judgment as the facts alleged in the complaint might the administration of justice.
warrant.[34]In other words, the defendants failure to file an answer under Rule 70 of
the Rules of Courtmight result to a judgment by default, not to a declaration of It is timely, therefore, to remind all MTC judges to display full and
default. enthusiastic compliance with all the rules of procedure, especially those intended for
expediting proceedings.
The second lapse wasthe MTCCsreception of the oral testimony of
respondent Melba Zamora. Rule 70 of the Rules of Courthas envisioned the WHEREFORE,we grant the petition for review on certiorari; set aside the
submission only of affidavits of the witnesses (not oral testimony) and other proofs decision promulgated on July 3, 2002 by the Court of Appeals; and dismiss the
on the factual issues defined in the order issued within five days from the termination complaint for unlawful detainer for lack of a cause of action.
of the preliminary conference;[35]and has permittedthe trial court, should it find the
need to clarify material facts, to thereafterissue an order during the 30-day period The respondents shall pay the costs of suit.
from submission of the affidavits and other proofs specifying the matters to be
clarified, and requiring the parties to submit affidavits or other evidence upon such SO ORDERED.
matters within ten days from receipt of the order.[36]
SEVERINO S. CAPIRAL v. SIMEONA CAPIRAL ROBLES and VICENTE
CAPIRAL (G.R. No. 173628, November 16, 2011)
DECISION
PERALTA, J.:
Assailed in the present petition for review on certiorari under Rule 45 of the Rules
of Court are the Decision1 dated May 29, 2006 and Resolution2 dated July 20,
2006 of the Court of Appeals (CA) in CA-G.R. SP No. 83223. The CA Decision
dismissed petitioner's petition for certiorari and affirmed the August 15, 2003 and
January 12, 2004 Orders of the Regional Trial Court (RTC) of Malabon City,
Branch 74, in Civil Case No. 3430-MN, while the CA Resolution denied petitioner's
Motion for Reconsideration.
The following are the factual and procedural antecedents of the instant case:
The instant petition arose from a Complaint for Partition with Damages filed with
the RTC of Malabon City by herein respondents against herein petitioner and five
other persons, all surnamed Capiral, whom respondents claim to be their co-heirs.3
On September 5, 2002, herein petitioner filed a Motion to Dismiss 4 on grounds that
respondents' Complaint lacked cause of action or that the same is barred by
prescription and laches.
In their Opposition to herein petitioner's Motion to Dismiss, private respondents
questioned the factual allegations of petitioner and contended that the property
subject of the Complaint for Partition is covered by a Transfer Certificate of Title
having been duly registered under the Torrens System and as such may not be
acquired by prescription. Private respondents also argued that neither is the
principle of laches applicable; instead, the doctrine of imprescriptibility of an action
for partition should apply.
On February 21, 2003, the RTC issued an Order holding as follows:
In the subject motion, defendant-movant [herein petitioner]
claimed that prior to the death of their [predecessor-in-
interest] Apolonio Capiral, he and his aunt, Arsenia Capiral, who
died on 26 November 2002, has been in actual possession of the
subject property and has been the one paying for its realty tax;
that after the death of Apolonio Capiral,
defendant movant repudiated the co-ownership by permanently
residing [in] the said property... that for more than ten (10) years
now, defendant [-movant] has been openly, continuously and
exclusively possessing the same in the concept of an owner thus,
the subject property cannot be the subject of the instant action for
partition because the same has been acquired by defendant[-
movant] . thru prescription; and that further, by plaintiffs' inaction
for more than ten years in asserting their rights as co-owners, the
principle of estoppel bars them from filing the instant complaint.
The Court finds it necessary to set first the subject motion for
further hearing for the reception of evidence of the parties
pursuant to Sec. 2, Rule 16 of the 1997 Rules of Civil Procedure,
xxx
xxxx
The allegations of defendant-movant that he has already
repudiated the co-ownership and that plaintiffs are guilty
of laches involve factual issues warranting a hearing on the
matters in order for the parties herein, as mandated by
the aforequotedrules, to submit their respective evidence on
question of facts involved and for the Court to appreciate the
same.
 WHEREFORE, premised considered, let the instant motion be set
for hearing on April 10, 2003 at 8:30 o'clock in the morning.5
On August 12, 2003, petitioner filed a Motion to Resolve6 praying that an Order be
issued by the RTC resolving petitioner's Motion to Dismiss.
On August 15, 2003, the RTC issued its first assailed Order 7 denying petitioner's
Motion to Resolve.
Petitioner filed a Motion for Reconsideration contending that there is no longer any
need to set the case for hearing for the reception of evidence to prove the
allegations in the Motion to Dismiss considering that, in their Opposition, herein
respondents failed to deny nor rebut the material factual allegations in the said
Motion.8
However, the RTC, in its second assailed Order dated January 12, 2004, denied
petitioner's Motion for Reconsideration.9
Subsequently, petitioner filed a special civil action for certiorari with the CA,
arguing that the RTC is guilty of grave abuse of discretion in issuing the
abovementioned Orders.
On May 29, 2006, the CA promulgated its assailed Decision dismissing the special
civil action for certiorari and affirming the disputed Orders of the RTC.
Petitioner filed a Motion for Reconsideration, but the CA denied it via its Resolution
dated July 20, 2006.
Hence, the present petition with a sole Assignment of Error, to wit:
THE COURT OF APPEALS COMMITTED A CLEAR AND
REVERSIBLE ERROR WHEN IT HELD THAT THE TRIAL-TYPE
HEARING REQUIRED BY THE TRIAL COURT FOR THE
RESOLUTION OF THE MOTION TO DISMISS IS IN ACCORD
WITH SECTION 2, RULE 16 OF [THE] RULES OF COURT.10
Petitioner contends that there is nothing in Section 2, Rule 16 of the Rules of Court
which requires a trial-type hearing for the resolution of a motion to dismiss.
Petitioner argues that the RTC, in requiring a trial-type hearing deferred the
resolution of the subject Motion to Dismiss and, in so doing, violated Section 3,
Rule 16 of the Rules of Court.
The Court does not agree.
Contrary to petitioners contention, insofar as hearings on a motion to dismiss are
concerned, Section 2, Rule 16 of the Rules of Court sanctions trial-type
proceedings in the sense that the parties are allowed to present evidence and
argue their respective positions before the court, thus:
Sec. 2. Hearing of Motion. - At the hearing of the motion, the
parties shall submit their arguments on the questions of law and
their evidence on the questions of fact involved except those not
available at that time. Should the case go to trial, the evidence
presented during the hearing shall automatically be part of the
evidence of the party presenting the same.
In Rimbunan Hijau Group of Companies v. Oriental Wood Processing
Corporation,11 this Court had occasion to rule that the issues raised in a motion to
dismiss have to be determined in accordance with the evidence and facts
presented, not on the basis of unsubstantiated allegations and that the courts
could not afford to dismiss a litigant's complaint on the basis of half-baked
conclusions with no evidence to show for it. In emphasizing the need for a formal
hearing, this Court held that the demand for a clear factual finding to justify the
grant or denial of a motion to dismiss cannot be dispensed with.12 To this end,
Section 2, Rule 16 of the Rules of Court allows not only a hearing on the motion to
dismiss, but also for the parties to submit their evidence on the questions of fact
involved, which may be litigated extensively at the hearing or hearings on the
motion.13 During the said hearings, the parties are allowed to submit their
respective evidence, and even rebut the opposing parties' evidence. 14 The
hearings should provide the parties the forum for full presentation of their
sides.15 Moreover, from the trial court's perspective, the extent of such hearings
would depend on its satisfaction that the ground in filing the motion to dismiss has
been established or disestablished.16
In the present case, petitioner's ground in filing his Motion to Dismiss is that he has
been openly, continuously and exclusively possessing the subject property in the
concept of an owner for more than ten years and that he has explicitly repudiated
his co-ownership of the subject property with his co-heirs. Evidence is quite
obviously needed in this situation, for it is not to be expected that said ground, or
any facts from which its existence may be inferred, will be found in the averments
of the complaint.17 When such a ground is asserted in a motion to dismiss, the
general rule governing evidence on motions applies.18 The rule is embodied in
Section 7, Rule 133 of the Rules of Court which provides that [w]hen a motion is
based on facts not appearing of record the court may hear the matter on affidavits
or depositions presented by the respective parties, but the court may direct that the
matter be heard wholly or partly on oral testimony or depositions.
However, in the present case, there was no affidavit or any other documentary
evidence attached to petitioner's Motion to Dismiss as proof of the averments
contained therein. Thus, the RTC is justified in directing the conduct of further
hearings to ascertain petitioner's factual allegations in its motion.
Indeed, unlike a motion to dismiss based on the failure of the complaint to state a
cause of action, which may be resolved solely on the basis of the allegations of the
complaint, the Motion to Dismiss filed by petitioner raised an affirmative defense
that he has long been in possession of the disputed property as an owner and that
he has repudiated his co-ownership of the subject property with private
respondents and the other co-heirs. The motion thus posed a question of fact that
should be resolved after due hearing.19
Neither may the trial court's act of setting the case for hearing in order to receive
evidence be considered as a move to defer the resolution of petitioner's Motion to
Dismiss. As discussed above, Section 2, Rule 16 is explicit in allowing the conduct
of hearings and the reception of evidence on the questions of fact involved in the
motion to dismiss.
Contrary to petitioner's asseveration, what is prohibited by the second paragraph
of Section 3, Rule 16 of the same Rules is the deferment until trial of the resolution
of the motion to dismiss itself.20 Under the circumstances obtaining in the instant
case, the assailed Orders of the RTC may not be construed as tantamount to
deferring action on the motion to dismiss until trial is conducted.
In sum, the Court finds no error on the part of the CA in holding that the RTC did
not commit grave abuse of discretion in issuing its assailed Orders.
WHEREFORE, the petition is DENIED. The May 29, 2006 Decision and the July
20, 2006 Resolution of the Court of Appeals in CA-G.R. SP No. 83223
are AFFIRMED. Let the records of this case be remanded to the Regional Trial
Court of Malabon City, Branch 74, for further proceedings with dispatch.
SO ORDERED.
SPOUSES ERNESTO and VICENTA TOPACIO, as represented by their attorney-in- RTC granted the petition, conditioned on the posting of a P100,000.00 bond. Upon
fact MARILOU TOPACIO-NARCISO v. BANCO FILIPINO SAVINGS and MORTGAGE
BANK (G.R. No. 157644, November 17, 2010) posting of the required bond, the RTC issued, on February 16, 1984, a writ of

Before the Court is a petition for review on certiorari,[1] filed by petitioner possession, commanding the sheriff to place the respondent in possession of the

spouses Ernesto and Vicenta Topacio (petitioners), assailing the August 26, 2002 property.

Decision[2] of the Court of Appeals (CA) in CA-G.R. SP No. 32389, as well as its
March 17, 2003 Resolution[3] denying the petitioners motion for reconsideration. The The writ of possession was not implemented[7] because, on February 27, 1984, the

CA Decision and Resolution affirmed in toto the October 1, 1993 Order of the petitioners, filed with the RTC, a petition to set aside the auction sale and the writ of

Regional Trial Court of Valenzuela City, Branch 75, which issued an alias writ of possession (with application for a temporary restraining order and a writ of

possession in favor of the respondent Banco Filipino Savings and Mortgage Bank preliminary injunction).[8] In an Order dated February 28, 1984, the RTC issued a

(respondent). temporary restraining order enjoining the respondent and the Deputy Sheriff from
implementing the writ of possession it previously issued. [9] After hearing, the RTC,

THE BACKGROUND FACTS issued on March 13, 1984, a writ of preliminary injunction ordering the respondent

The backgrounds facts, as culled from the records, are summarized below. and the Provincial Sheriff to desist from implementing the writ of possession and to
refrain from interfering with and disrupting the possession of the petitioners over the

The petitioners obtained a loan amounting to P400,000.00 from the respondent. To subject parcel of land.[10]

secure the loan, the petitioners executed on May 8, 1980, a real estate mortgage
over Lot 1224-B-1 LRC Psd-15436, covered by TCT No. T-191117 (now 13554) of Sometime in April 1984, the respondent filed with the RTC its Motion to Admit

the Registry of Deeds of Bulacan, in favor of the respondent. The petitioners failed Answer with Opposition to the Petition to Set Aside Auction Sale and Writ of

to pay the loan, prompting the respondent to file a Petition for Extrajudicial Possession with Motion to Dissolve or Lift Preliminary Injunction (Answer) which was

Foreclosure of Mortgage, pursuant to Act No. 3135. To satisfy the obligation, the granted on April 26, 1984.[11] On May 21, 1984, the petitioners filed their Reply

Provincial Sheriff of Bulacan, on November 8, 1982, sold the mortgaged property at thereto, praying that the writ of preliminary injunction previously issued be

public auction, where the respondent emerged as the highest bidder. Accordingly, a maintained.[12]

Certification of Sale was issued in favor of the respondent and registered with the
Registry of Deeds.[4] More than two years after the filing of the Answer and the Reply, and after a series
of postponements at the instance of both parties, then Presiding Judge Teresita D.

On May 26, 1983, the respondent filed a Petition for the Issuance of a Writ Capulong issued an Order dated December 16, 1986, dismissing the respondents

of Possession[5] over the mortgaged property before the Regional Trial Court, petition for the issuance of a writ of possession on the ground of failure to

Branch 172, Valenzuela City (RTC). In an Order[6] datedDecember 12, 1983, the prosecute.[13] The Order reads in full:
 When this case was called for hearing, counsel for the oppositors
[now petitioners], Atty. Constancio R. Gallamos, was present. Atty. On October 1, 1993, the RTC, now presided by Judge Jaime F.
Francisco Rivera [counsel for the respondent] was absent despite Bautista, issued the assailed Order[21] which denied the petitioners motion for
notice. Upon petition of the counsel for the oppositors, this case is
hereby ordered dismissed for failure to prosecute. reconsideration and reiterated its order for the issuance of an alias writ of
SO ORDERED. possession in favor of the respondent. The assailed RTC Order is summarized
below.
No copy of the above Order was served on the respondent[14] whose operations the
Monetary Board (Central Bank of the Philippines) shut down on January 25, 1985,
First, the RTC ruled that the Order of Dismissal was granted on a
for reasons not relevant to the present case.[15]
technicality and that [t]he ground of failure to prosecute is manifestly
unfounded.[22] The RTC held that the power of the trial court to dismiss an action on
Nearly six (6) years later (after the Court ordered the reorganization and resumption
the ground of non prosequitur is not unbounded. The real test x x x is whether under
of the respondents operations in G.R. No. 70054) [16] or on August 19, 1992, the
the facts and circumstances, the plaintiff is chargeable with want of due diligence in
respondent filed a Motion to Clarify the Order of December 16, 1986. In the same
[failing] to proceed with reasonable promptitude.[23] In the present case, the RTC
motion, the respondent likewise moved for the issuance of an alias writ of
noted that the records show that the case dragged on for years because of several
possession. [17]
postponements at the request of both parties, particularly petitioner Ernesto Topacio
who went abroad for a long time during the pendency of the case.[24]
In an Order[18] dated September 18, 1992, the RTC made a clarification that the
Order of Dismissal of December 16, 1986 refers to the dismissal of the main case
Second, the RTC held that the December 16, 1986 Dismissal Order cannot
for issuance of a writ of possession. In that same Order, the RTC denied the
be considered a dismissal on the merits as it was founded not on a substantial
respondents motion for the issuance of an alias writ of possession.
ground but on a technical one; it does not amount to a declaration of the law [on] the
On May 18, 1993, the respondent moved for the reconsideration [19] of
respective rights and duties of the parties, based upon the ultimate x x x facts
the September 18, 1992 Order. In an Order[20] dated June 2, 1993, the RTC, this
disclosed by the pleadings and evidence, and upon which the right of recovery
time presided by Judge Emilio L. Leachon, Jr., reconsidered and set aside the Order
depends, irrespective of formal, technical or dilatory objectives or contentions. [25]
of December 16, 1986 and granted the respondents prayer for the issuance of
an alias writ of possession. The petitioners moved for a reconsideration of the June
Third, the RTC ruled that the revival by a motion for reconsideration (filed
2, 1993 Order and prayed that the implementation of the alias writ of possession be
on May 18, 1993) of the February 16, 1984 Order, granting the writ of possession,
held in abeyance.
was seasonably filed by the respondent, pursuant to the period allowed under
Section 6, Rule 39 of the Rules of Court. Citing National Power Corporation v. Court
The RTC Ruling
of Appeals,[26] the RTC held that [i]n computing the time [limit] for suing out an
execution, x x x the general rule is that there should not be included the time when
execution is stayed, either by agreement of the parties for a definite time, by
injunction, by the taking of an appeal or writ of error so as to operate as
a supersedeas, by the death of a party, or otherwise. The RTC noted that the
running of the five-year period under Section 6 of the Rules of Court had been
interrupted by the erroneous issuance of a writ of preliminary injunction; the
February 16, 1984 Order never attained finality and was overtaken by the issuance
of the Order dated June 2, 1993, granting the issuance of an alias writ of
execution.[27]
Finally, the RTC held that the respondent, as the winning bidder, has an
absolute right to a writ of possession,[28] considering that: (1) a writ of possession
had been issued on February 16, 1984 and the corresponding bond had already
been posted, although the writ was not enforced because of the erroneous injunction
issued by Judge Capulong; and (2) there was no redemption by the petitioners.[29]
On October 20, 1993, the petitioners filed their Petition for Certiorari and Prohibition
under Rule 65 of the 1997 Rules of Court with prayer for the issuance of a
preliminary injunction (petition), docketed as CA-G.R. SP No. 32389.[30] Before the
CA, the petitioners argued that the RTC acted without jurisdiction or with grave
abuse of discretion when it: (1) reinstated the respondents case more than seven
(7) years after the December 16, 1986 Dismissal Order became final and executory,
and (2) issued an alias writ of execution upon a mere motion for reconsideration and
not by an independent action pursuant to Section 6, Rule 39 of the Rules of Court.
The CA Ruling
On August 26, 2002, the CA denied the petitioners petition and affirmed
in toto the June 2, 1993 and October 1, 1993 Orders of the RTC. The CA found that
the December 16, 1986 Order of the RTC does not amount to a dismissal on the
merits as it was based on purely technical grounds. It noted that the records show
that the respondent was not furnished a copy of the Dismissal Order; hence, the
case cannot be deemed to be final with respect to the respondent. The CA also
agreed with the RTCs conclusion that the delay in the resolution of the case cannot
be solely attributed to the respondent and did not warrant its outright dismissal.[31]
The CA held that an independent action for the revival of the writ of
possession need not be filed in order to enforce the writ of possession issued
on December 12, 1983 since Section 6, Rule 39 of the Rules of Court applies only
to civil actions and not to special proceedings,[32] citing Heirs of Cristobal Marcos v.
de Banuvar.[33]
The Petition
In the present petition,[34] the petitioners contend that the CA erred in affirming
the October 1, 1993 Order of the RTC considering that:
1) the December 16, 1986 Dismissal Order constitutes an adjudication on the
merits which has already attained finality, and
2) a writ of possession may not be enforced upon mere motion of the applicant
after the lapse of more than five (5) years from the time of its issuance.
On the first assignment of error, the petitioners submit that the December
16, 1986 Dismissal Order for failure to prosecute constitutes adjudication upon the
merits, considering that the RTC did not declare otherwise, pursuant to Section 3,
Rule 17 of the Rules of Court. The petitioners further contend that the Dismissal
Order has become final and executory since the respondent belatedly filed the
Motion to Clarify the Order of December 16, 1986 on August 19, 1992 or almost six
years later. On these premises, the petitioners argue that res judicata has set in and
consequently, the RTC had no jurisdiction to grant the motion for reconsideration
and to issue an alias writ of possession in favor of the respondent.[35]
On the second assignment of error, the petitioners contend that pursuant to
Section 6, Rule 39 of the Rules of Court, the writ of possession issued on February
16, 1984 may no longer be enforced by a mere motion but by a separate action,
considering that more than five years had elapsed from its issuance. The petitioners
also argue that Section 6, Rule 39 of the Rules of Court applies to the present case
since a petition for the issuance of a writ of possession is neither a special
proceeding nor a land registration case.[36]
In their Memorandum, the petitioners additionally submit that they do not dispute
that the CA made a finding that the December 16, 1986 Dismissal Order was not
properly served. They, however, point out that the CA made no such finding with
respect to the September 18, 1992 Order of the RTC. The petitioners contend that
the Motion for Reconsideration, filed on May 18, 1993 or eight months later from
the September 18, 1992 Order by the respondent, was filed out of time. Thus, they
conclude that any subsequent ruling of the RTC, including the June 2,
1993 and October 1, 1993 Orders, is barred by res judicata.[37]
OUR RULING
We deny the petition for lack of merit.
A. Preliminary Considerations
Our review of the records, particularly the CA decision, indicates that the CA did not
determine the presence or absence of grave abuse of discretion in the RTC decision
before it. Given that the petition before the CA was a petition for certiorari and
prohibition under Rule 65 of the Rules of Court, it appears that the CA instead
incorrectly reviewed the case on the basis of whether the RTC decision on the merits
was correct.
To put the case in its proper perspective, the task before us is to examine the CA
decision from the prism of whether it correctly determined the presence or absence
of grave abuse of discretion in the RTC decision before it.Stated otherwise, did the
CA correctly determine whether the RTC committed grave abuse of discretion
amounting to lack or excess of jurisdiction in ruling on the case?
As discussed below, our review of the records and the CA decision shows
that the RTC did not commit grave abuse of discretion in issuing an alias writ of
possession in favor of the respondent.
B. Applicability of Res Judicata
Under the rule of res judicata, a final judgment or decree on the merits by a
court of competent jurisdiction is conclusive of the rights of the parties or their privies,
in all later suits and on all points and matters determined in the previous suit. The
term literally means a matter adjudged, judicially acted upon, or settled by
judgment.[38] The principle bars a subsequent suit involving the same parties, subject
matter, and cause of action. The rationale for the rule is that public policy requires
that controversies must be settled with finality at a given point in time. [39]
The doctrine of res judicata embraces two (2) concepts: the first is "bar by
prior judgment" under paragraph (b) of Rule 39, Section 47 of the Rules of Court,
and the second is "conclusiveness of judgment" under paragraph (c) thereof. Res
judicata applies in the concept of "bar by prior judgment" if the following requisites
concur: (1) the former judgment or order must be final; (2) the judgment or order

must be on the merits; (3) the decision must have been rendered by a court having
jurisdiction over the subject matter and the parties; and (4) there must be, between
the first and the second action, identity of parties, of subject matter and of causes of
action.[40]
The petitioners claim that res judicata under the first concept applies in the
present case because all of the elements thereof are present. In response, the
respondent argues that res judicata did not set in as the first element is lacking.
We agree with the respondent.
The December
16, 1986
Dismissal Order
never attained
finality as it was
not properly
served
The following provisions under Rule 13 of the Rules of Court define the
proper modes of service of judgments:[41]
SEC. 2. Filing and service, defined. x x x
Service is the act of providing a party with a copy of the
pleading or paper concerned. x x x
SEC. 5. Modes of service. Service of pleadings, motions,
notices, orders, judgments and other papers shall be made either
personally or by mail.
SEC. 6. Personal service. Service of the papers may be
made by delivering personally a copy to the party or his counsel, or
by leaving it in his office with his clerk or with a person having
charge thereof. If no person is found in his office, or his office is not
known, or he has no office, then by leaving the copy, between the
hours of eight in the morning and six in the evening, at the partys or
counsels residence, if known, with a person of sufficient age and
discretion then residing therein.
SEC. 7. Service by mail. Service by registered mail shall be
made by depositing the copy in the office, in a sealed envelope,
plainly addressed to the party or his counsel at his office, if known,
otherwise at his residence, if known, with postage fully pre-paid, and
with instructions to the postmaster to return the mail to the sender
after ten (10) days if undelivered. If no registry service is available
in the locality of either the sender or the addressee, service may be
done by ordinary mail.
SEC. 8. Substituted service. If service of pleadings,
motions, notices, resolutions, orders and other papers cannot be
made under the two preceding sections, the office and place of
residence of the party or his counsel being unknown, service may
be made by delivering the copy to the clerk of court, with proof of
failure of both personal service and service by mail. The service is
complete at the time of such delivery.
SEC. 9. Service of judgments, final orders or resolutions.
Judgments, final orders or resolutions shall be served either
personally or by registered mail. When a party summoned by
publication has failed to appear in the action, judgments, final orders
or resolutions against him shall be served upon him also by
publication at the expense of the prevailing party.
As a rule, judgments are sufficiently served when they are delivered
personally, or through registered mail to the counsel of record, or by leaving them in
his office with his clerk or with a person having charge thereof.After service, a
judgment or order which is not appealed nor made subject of a motion for
reconsideration within the prescribed 15-day period attains finality.[42]
In Philemploy Services and Resources, Inc. v. Rodriguez,[43] the Court ruled
that the Resolution of the National Labor Relations Commission, denying the
respondents motion for reconsideration, cannot be deemed to have become final
and executory as there is no conclusive proof of service of the said resolution. In the
words of the Court, there was no proof of actual receipt of the notice of the registered
mail by the respondents counsel.[44] Based on these findings, the Court concluded
that the CA properly acquired jurisdiction over the respondents petition
for certiorari filed before it; in the absence of a reckoning date of the period provided
by law for the filing of the petition, the Court could not assume that it was improperly
or belatedly filed.
Similarly, in Tomawis v. Tabao-Cudang,[45] the Court held that the decision
of the Regional Trial Court did not become final and executory where, from the
records, the respondent had not received a copy of the resolution denying her
motion for reconsideration.[46] The Court also noted that there was no sufficient proof
that the respondent actually received a copy of the said Order or that she indeed
received a first notice. Thus, the Court concluded that there could be no valid basis
for the issuance of the writ of execution as the decision never attained finality.
In the present case, we note that the December 16, 1986 Dismissal Order
cannot be deemed to have become final and executory in view of the absence of a
valid service, whether personally or via registered mail, on the respondents
counsel. We note in this regard that the petitioners do not dispute the CA finding that
the records failed to show that the private respondent was furnished with a copy of
the said order of dismissal[.][47]Accordingly, the Dismissal Order never attained
finality.
The petitioners now claim that the Motion for Reconsideration, filed by the
respondent on May 18, 1993 from the September 18, 1992 Order of the RTC, was
filed out of time. The petitioners make this claim to justify their contention that the
subsequent rulings of the RTC, including the June 2, 1993 and October 1,
1993 Orders, are barred by res judicata.
We reject this belated claim as the petitioners raised this only for the first
time on appeal, particularly, in their Memorandum. In fact, the petitioners never
raised this issue in the proceedings before the court a quo or in the present petition
for review.
As a rule, a party who deliberately adopts a certain theory upon which the
case is tried and decided by the lower court will not be permitted to change the
theory on appeal.[48] Points of law, theories, issues and arguments not brought to
the attention of the lower court need not be, and ordinarily will not be, considered by
a reviewing court, as these cannot be raised for the first time at such late stage. It
would be unfair to the adverse party who would have no opportunity to present
further evidence material to the new theory, which it could have done had it been
aware of it at the time of the hearing before the trial court.[49] Thus, to permit the
petitioners in this case to change their theory on appeal would thus be unfair to the
respondent and offend the basic rules of fair play, justice and due process. [50]
C. Applicability of the Rule on Execution
by Motion or by Independent Action
The petitioners finally submit that the writ of possession, issued by the RTC
on February 16, 1984, may no longer be enforced by a mere motion, but by a
separate action, considering that more than five years had elapsed from its
issuance, pursuant to Section 6, Rule 39 of the Rules of Court, which states:
Sec. 6. Execution by motion or by independent action. A
final and executory judgment or order may be executed on motion
within five (5) years from the date of its entry. After the lapse of
such time, and before it is barred by the statute of limitations, a
judgment may be enforced by action. The revived judgment may
also be enforced by motion within five (5) years from the date of its
 entry and thereafter by action before it is barred by the statute of
limitations.
Section 6, Rule
39 of the Rules
of Court only
applies to civil
actions
In rejecting a similar argument, the Court held in Paderes v. Court of Appeals[51] that
Section 6, Rule 39 of the Rules of Court finds application only to civil actions and
not to special proceedings. Citing Sta. Ana v. Menla,[52] which extensively discussed
the rationale behind the rule, the Court held:
In a later case [Sta. Ana v. Menla, 111 Phil. 947 (1961)],
the Court also ruled that the provision in the Rules of Court to
the effect that judgment may be enforced within five years by
motion, and after five years but within ten years by an action
(Section 6, Rule 39) refers to civil actions and is not applicable
to special proceedings, such as land registration cases. x x x x
We fail to understand the arguments of the appellant in
support of the above assignment, except in so far as it supports his
theory that after a decision in a land registration case has become
final, it may not be enforced after the lapse of a period of 10 years,
except by another proceeding to enforce the judgment or decision.
Authority for this theory is the provision in the Rules of Court to the
effect that judgment may be enforced within 5 years by motion, and
after five years but within 10 years, by an action (Sec. 6, Rule
39). This provision of the Rules refers to civil actions and is not
applicable to special proceedings, such as a land registration
case. This is so because a party in a civil action must
immediately enforce a judgment that is secured as against the
adverse party, and his failure to act to enforce the same within
a reasonable time as provided in the Rules makes the decision
unenforceable against the losing party. In special proceedings
the purpose is to establish a status, condition or fact; in land
registration proceedings, the ownership by a person of a
parcel of land is sought to be established. After the ownership
has been proved and confirmed by judicial declaration, no
further proceeding to enforce said ownership is necessary,
except when the adverse or losing party had been in
possession of the land and the winning party desires to oust
him therefrom.
Subsequently, the Court, in Republic v. Nillas,[53] affirmed the dictum in Sta. Ana and
clarified that Rule 39 x x x applies only to ordinary civil actions, not to other or
extraordinary proceedings not expressly governed by the Rules of Civil Procedure
but by some other specific law or legal modality, viz:
Rule 39, as invoked by the Republic, applies only to
ordinary civil actions, not to other or extraordinary proceedings not
expressly governed by the Rules of Civil Procedure but by some
other specific law or legal modality such as land registration cases.
Unlike in ordinary civil actions governed by the Rules of Civil
Procedure, the intent of land registration proceedings is to establish
ownership by a person of a parcel of land, consistent with the
purpose of such extraordinary proceedings to declare by judicial fiat
a status, condition or fact. Hence, upon the finality of a decision
adjudicating such ownership, no further step is required to
effectuate the decision and a ministerial duty exists alike on the part
of the land registration court to order the issuance of, and the LRA
to issue, the decree of registration.
In the present case, Section 6, Rule 39 of the Rules of Court is not applicable to
an ex parte petition for the issuance of the writ of possession as it is not in the nature
of a civil action[54] governed by the Rules of Civil Procedure but a judicial proceeding
governed separately by Section 7 of Act No. 3135 which regulates the methods of
effecting an extrajudicial foreclosure of mortgage. The provision states:
Section 7. Possession during redemption period. In any
sale made under the provisions of this Act, the purchaser may
petition the [Regional Trial Court] where the property or any part
thereof is situated, to give him possession thereof during the
redemption period, furnishing bond in an amount equivalent to the
use of the property for a period of twelve months, to indemnify the
debtor in case it be shown that the sale was made without violating
the mortgage or without complying with the requirements of this Act.
 Such petition shall be made under oath and filed in form of an ex
parte motion in the registration or cadastral proceedings if the upon compliance with the requirements set forth by law, and the provincial sheriff is
property is registered, or in special proceedings in the case of likewise mandated to implement the writ immediately.
property registered under the Mortgage Law or under section one
hundred and ninety-four of the Administrative Code, or of any other
real property encumbered with a mortgage duly registered in the Clearly, the exacting procedure provided in Act No. 3135, from the moment
office of any register of deeds in accordance with any existing law,
and in each case the clerk of the court shall, upon the filing of such of the issuance of the writ of possession, leaves no room for the application of
petition, collect the fees specified in paragraph eleven of section Section 6, Rule 39 of the Rules of Court which we consistently ruled, as early as
one hundred and fourteen of Act Numbered Four hundred and
ninety-six, as amended by Act Numbered Twenty-eight hundred 1961 in Sta. Ana, to be applicable only to civil actions. From another perspective,
and sixty-six, and the court shall, upon approval of the bond,
the judgment or the order does not have to be executed by motion or enforced by
order that a writ of possession issue, addressed to the sheriff
of the province in which the property is situated, who shall action within the purview of Rule 39 of the Rules of Court. [58]
execute said order immediately.

D. Conclusion

The above-cited provision lays down the procedure that commences from
In sum, based on these considerations, we find that the RTC committed no grave
the filing of a motion for the issuance of a writ of possession, to the issuance of the
abuse of discretion in issuing an alias writ of possession in favor of the respondent.
writ of possession by the Court, and finally to the execution of the order by the sheriff
of the province in which the property is located. Based on the text of the law, we
WHEREFORE, the present petition is DENIED. The August 26,
have also consistently ruled that the duty of the trial court to grant a writ of
2002 Decision and the March 17, 2003 Resolution of the Court of Appeals in CA-
possession is ministerial; the writ issues as a matter of course upon the filing of the
G.R. SP No. 32389 are AFFIRMED. Costs against the petitioners.
proper motion and the approval of the corresponding bond.[55] In fact, the issuance
SO ORDERED.
and the immediate implementation of the writ are declared ministerial and
mandatory under the law.

Thus, in Philippine National Bank v. Adil,[56] we emphatically ruled that once

the writ of possession has been issued, the trial court has no alternative but to
enforce the writ without delay. The issuance of a writ of possession to a purchaser
in an extrajudicial foreclosure is summary and ministerial in nature as such
proceeding is merely an incident in the transfer of title. The trial court does not
exercise discretion in the issuance thereof;[57] it must grant the issuance of the writ
A.M. No. RTJ-02-1696 June 20, 2002
MELISSA DOMONDON, ALMIRA BASALO, and CLEO
VILLAREIZ, complainants,
vs.
JUDGE PERCIVAL MANDAP LOPEZ, respondent.
MENDOZA, J.:
This is an administrative complaint against Judge Percival Mandap Lopez of the
Regional Trial Court, Branch 78, Quezon City for undue delay and gross ignorance
of the law in the resolution of a case filed by complainants.
Complainants were students of the AMA Computer College in Quezon City and
members of the editorial board of the official school publication called Dataline. It
appears that on December 7, 1996, complainants published a spoof edition of
the Dataline, which they called Amable Tonite. After conducting an investigation,
the student Disciplinary Tribunal of the college recommended the expulsion of
complainants from the school.1
On March 14, 1997, complainants and other members of the Dataline editorial
board filed a complaint for damages with prayer for the issuance of a writ of
preliminary mandatory injunction against AMA Computer College and Mauricia
Herrera, Dean of Student Affairs. The case was filed in the Regional Trial Court of
Quezon City, where it was docketed as Civil Case No. Q-97-30549 and assigned
to respondent judge of Branch 78. Complainants alleged that they had been
expelled from the defendant school in a despotic and oppressive manner in
violation of their constitutional rights to due process and to free speech as well as
the provisions of R.A. No. 7079, otherwise known as the Campus Journalism Act
of 1991. They sought an award of damages in their favor and the issuance of a
temporary preliminary mandatory injunction to enjoin the defendant school in the
meantime to allow them to attend their classes and take their examinations. 2
On March 25, 1997, AMA Computer College and Mauricia Herrera filed an
"Opposition," contending that the articles in the spoof edition which complainants
had published were slanderous and derogatory; that R.A. No. 7079 itself enjoins
student publications to observe the pertinent laws and school policies in the
selection of articles for publication; that complainants had been given the
opportunity to controvert the charges against them before they were expelled; and
that complainants were guilty of using indecent language, committing vulgar and
obscene acts, libel, and unauthorized disbursement of Dataline funds in the
amount of P25,000.00.3
On April 3, 1997, complainants filed a reply, contending that the issue in the case
was not the alleged defamatory nature of the questioned publication but the
legality of their expulsion because they were expelled solely on the basis of their
activities as members of the editorial board of Dataline and claiming that they were
deprived of their right to due process.4
On June 2, 1997, defendants AMA Computer College and Mauricia Herrera filed a
rejoinder, opposing complainants’ prayer for the issuance of a writ of preliminary
injunction. They contended that, under R.A. No. 7079, editorial policies of the
student publication should take into account the pertinent laws as well as the
school policies in the selection of articles for publication; that the Amable
Tonite was not a legitimate issue of the Dataline; and that complainants could have
submitted their grievances to the Commission on Higher Education (CHED) but the
fact was that their complaint was dismissed because of their failure to attend a
hearing previously set.5
On June 7, 1997, complainants pressed their request for the immediate resolution
of their application for preliminary mandatory injunction before the end of the
enrollment period. They alleged that the delay in the resolution of the writ was due
to the defendants’ failure to submit their rejoinder within the period given to them
as the rejoinder was actually filed more than a month after the prescribed period
had lapsed.6
On June 14, 1997, on the basis of the pleadings of the parties, respondent judge
issued a resolution dismissing the case itself after finding that the expulsion of the
complainants from the school was for cause and was effected only after an
investigation during which they were duly heard.
Complainants moved for a reconsideration on the ground that the dismissal of the
complaint could not be made solely on the basis of the parties’ pleadings and
affidavits and that trial must first be conducted to receive the evidence of the
parties before the case was decided. They reiterated their allegation that a writ of
preliminary injunction was necessary because they were expelled from the school
solely on the basis of the articles published in their lampoon edition. 7
Complainants then sought the disqualification of respondent judge on the following
grounds: (a) that he had deliberately delayed the resolution of the injunctive writ
which tended to arouse suspicion as to his ability to decide the case with fairness
and integrity; (b) that he dismissed their complaint without legal or procedural basis
and thus deprived them of their day in court; and (c) that they filed an
administrative case against him with this Court.8
On September 26, 1997, respondent judge denied complainants’ motion for
reconsideration and motion to inhibit him for lack of merit. Respondent judge said
he had conducted a hearing on the motion for preliminary mandatory injunction
after which the parties were given time to file their pleadings and only after that did
he resolve the case.9
Complainants blame respondent Judge Lopez for allowing the question of whether
an injunction should be issued become moot by failing to resolve their motion
before the start of the enrollment period on the first week of June 1997. In addition,
they charge respondent judge with gross ignorance of the law in dismissing their
case considering that: (a) no answer or motion to dismiss had been filed by the
defendant school; (b) the pleadings and evidence, if any, on record referred only to
the issuance of a temporary preliminary mandatory injunction and none of the
defendant’s pleadings which averred additional factual matters was verified; and
(c) they were not given an opportunity to present their evidence. 10
In his comment, respondent judge denied that he was guilty of undue delay in
resolving complainants’ application for injunction. He claimed that it took him only
eight days to render his resolution after the issue of the injunction was submitted
for resolution on June 6, 1997, the date of the filing of the defendants’ rejoinder.
He denied that he acted with malice in resolving the matter, claiming that he saw
no urgency for the writ of preliminary injunction because (a) complainants’
expulsion was for cause, the articles written by complainants being indecent and
obscene; (b) complainants had been duly heard before they were expelled; (c) not
all of the complainants were graduating students; and (d) the status quo at that
point was that complainants were already expelled from the defendant school and
such should not be disturbed in the absence of proof of their claims. As for his
dismissal of the case on the merits, respondent judge justified his decision on the
ground that the defendants’ rejoinder contained a prayer for the same. He
contends that this was tantamount to a motion to dismiss filed on the ground of
lack of cause of action on the part of the complainants.11
Complainants filed a "Supplement to the Complaint for Dismissal/Separation from
Service," dated November 19, 1998, insisting that no hearing had actually been
held on March 31, 1997 as both respondent judge and the defendants’ counsel
failed to appear during the said date and that respondent judge did not show up
despite being contacted by his clerk of court by telephone. Moreover, complainants
claim that, although the resolution dismissing their case was dated September 26,
1997, it was actually received by them only on February 19, 1998, almost five
months after its supposed issuance, raising the suspicion that the resolution had
been antedated by respondent judge to make it appear that it was issued prior to
the filing of the present administrative complaint.12
Respondent judge filed his comment, making a general denial of the charges
against him.13
The Office of the Court Administrator (OCA), to which this case was referred,
found respondent judge guilty of undue delay and gross ignorance of the law in his
handling of Civil Case No. Q-97-30549 and recommended that he be ordered to
pay a fine of P2,000.00 with warning that repetition of the same or similar offenses
shall be dealt with more severely.
We find the recommendation, except as to the penalty, to be on the main well
taken.
First. As regards the charge of delay in resolving the injunction issue raised by
complainants, respondent judge says that the Rules of Court does not provide a
period within which to resolve a prayer for a preliminary injunction. However, as
the OCA well observed:
Judge Lopez cannot invoke the absence of any provision prescribing a
period within which to resolve an application for a writ of injunction. He
should have been guided by the exigencies of the situation. He knew that
complainants were seeking the writ of preliminary mandatory injunction
precisely because they wanted to be readmitted by the college and for
them to be able to enroll in the first trimester of school year 1997-1998.
This is evident from the affidavit of Merit attached to the complaint. (Rollo,
pp. 15-16) The least that respondent Judge could have done was to
resolve immediately the application for injunctive relief after the defendants
failed to submit their Rejoinder on time so as to allow the complainants
enough time to seek recourse to a higher court. As it is, even if he granted
the application, considering that it was done only on June 14, the same
would have been useless because complainants could no longer enroll
since, according to them, the period to enroll expires on the second week
of June 1997. (Rollo, p. 17)14
We agree with this observation and only add that Canon 3, Rule 3.05 of the Code
of Judicial Conduct in fact enjoins judges to "dispose of the court’s business
promptly and decide cases within the required periods."15 That respondent judge
found the application for mandatory injunction to be without merit is of no moment.
What was important is that he should have resolved the matter before the start of
the enrollment for the first semester of the school year 1997-1998 so that
complainants could avail themselves of other remedies if they were not satisfied
with the ruling. Complainants repeatedly urged respondent judge to resolve the
issue of the injunctive writ with utmost dispatch considering the little time left for
them to enroll for the coming semester. But respondent judge failed to heed their
plea.1âwphi1.nêt
Respondent judge says that the delay was due to the defendants’ failure to file
their rejoinder on time but he lost no time promulgating his resolution dismissing
the complaint as it was in fact issued only eight days after the filing of the rejoinder.
This contention has no merit. If this excuse of respondent judge were accepted, all
it would do for a party favored by a delay would be to mark time before filing his
pleading until an event (e.g., the end of the enrollment period) supervenes to
render the issue moot.
As respondent judge admits, the defendants’ rejoinder was filed only on June 2,
1997, although the last day for submission of the same was on May 9,
1997.16 Respondent judge should have considered the defendants to have waived
the filing of their rejoinder and resolved the issue of injunction promptly.
Respondent judge’s procrastination only opens him to suspicion that he was
favoring the defendants.17
Second. It is undisputed that no trial was ever conducted by respondent judge
before issuing his resolution, dated June 14, 1997, dismissing the complaint in
Civil Case No. Q-97-30549 for lack of merit. Respondent judge, however, justifies
his action on the ground that the defendants’ rejoinder sought the dismissal of the
case for lack of merit and the same was in the nature of a motion to dismiss the
case for lack of cause of action.
To be sure, the defendants did not file a motion to dismiss. What they filed was an
"Opposition," dated March 25, 1997, in which they raised factual matters and
affirmative defenses to answer the allegations in the complaint against them and
prayed for the denial of the writ prayed for. The fact that the defendants filed a
responsive pleading seeking affirmative relief and setting up defenses 18 negates
the intent on their part to file a motion to dismiss.
It is apparent that respondent judge failed to distinguish between a motion to
dismiss for failure of the complaint to state a cause of action and a motion to
dismiss based on lack of cause of action. The first is governed by Rule 16, §1(g),
while the second by Rule 33 of the 1997 Revised Rules of Civil Procedure.19 The
distinction between these two has been explained thus:
. . . The first [situation where the complaint does not allege a sufficient
cause of action] is raised in a motion to dismiss under Rule 16 before a
responsive pleading is filed and can be determined only from the
allegations in the initiatory pleading and not from evidentiary or other
matters aliunde. The second [situation where the evidence does not
sustain the cause of action alleged] is raised in a demurrer to evidence
under Rule 33 after the plaintiff has rested his case and can be resolved
only on the basis of the evidence he has presented in support of his claim.
The first does not concern itself with the truth and falsity of the allegations
while the second arises precisely because the judge has determined the
truth and falsity of the allegations and has found the evidence wanting. 20
Hence, a motion to dismiss based on lack of cause of action is filed by the
defendant after the plaintiff has presented his evidence on the ground that the
latter has shown no right to the relief sought. While a motion to dismiss under Rule
16 is based on preliminary objections which can be ventilated before the beginning
of the trial, a motion to dismiss under Rule 33 is in the nature of a demurrer to
evidence on the ground of insufficiency of evidence and is presented only after the
plaintiff has rested his case.21
As the rejoinder filed by the defendants was not based on the failure of the
complaint to state a cause of action but on factual and legal matters allegedly
excusing them from liability, the same could not be considered a motion to dismiss
under Rule 16, §1(g).
Actually, what respondent judge did was to render a decision. Thus, in his so-
called resolution, he stated:
Pertinent provisions of Republic Act No. 7099 provides that a set of
guidelines by which a student publication is operated and managed, taking
into account pertinent laws as well as the school administration’s policies.
Said guidelines shall determine the frequency of publication, the manner of
selecting articles and features and other similar matters, (section 3(c)
thereof); and students who are members of the editorial board shall not be
suspended or expelled solely on the basis of articles he or she has written,
or on the basis of the performance of his or her duties in the student
publication, (section 7 thereof) (underscoring supplied).
The plaintiffs, who are all members of the editorial board, were not
expelled solely on the basis of the articles they wrote in the alleged spoof
publication of Dataline. They violated the Manual of the school with regard
to the manner of selecting articles and features they are supposed to write
or feature therein. . . . What they wrote is not in consonance with the
principle of the State to promote campus journalism. . . but degrading and
insulting to the tenets of professional journalism in the level of campus
journalism.
Defendant school, through its Dean of Student Affairs, conducted an
investigation and subsequently a hearing on December 9 and 10, 1996.
During these hearings, plaintiffs admitted that they have knowledge of and
consented to the publication of the tabloid or the spoof edition of the
Dataline and their purpose for publishing such spoof edition is merely to
entertain the studentry of AMACC. This was likewise not disputed nor
denied by the plaintiffs in their verified Reply. On December 17, 1996,
plaintiffs, through their Editor-In-Chief Ian Dexter R. Marquez, filed a
complaint before the Commission of Higher [Education] against the
 administration of AMA Computer College for the malicious, arbitrary
dismissal or expulsion of plaintiffs herein which was detrimental to
students’ rights and welfare, in violation of Republic Act No. 7079, (Annex
"2", Rejoinder). However, said complaint was dismissed for failure on the
part of the plaintiffs themselves to comply with the Order of the
Commission dated February 19, 1997 for a formal hearing. Hence, this
instant case.
....
. . . . Also, the Manual of Regulation for Private Schools provides that the
school or university can impose penalty for cause after due investigation
having been conducted. The exclusion by the AMACC of plaintiffs from the
roll of students to be admitted is warranted and in accordance with the law
and in consonance with its regulatory and supervisory power so that the
spirit of the law is observed.22
Respondent judge could not do this since there were issues of facts which had to
be resolved. Respondent could dismiss Civil Case No. Q-97-30549 for lack of
cause of action only after a trial on the merits. The manner in which the hearing
before the disciplinary tribunal was held, whether complainants were expelled on
the sole basis of the articles written in Amable Tonite, and whether or not Mauricia
Herrera, who was one of the complainants in the disciplinary tribunal, was indeed a
member thereof are factual issues which require the presentation of evidence
before respondent judge could determine the veracity of the parties’ claims. As
admitted in his comment, dated October 23, 1997, respondent judge simply
accepted as facts the affirmative defenses raised by the defendants, namely: (1)
that complainants had given cause for their expulsion with the publication of the
spoof edition of the Dataline; (2) that the articles in the said spoof edition, as
"selectively reproduced" by the defendants in their Opposition, contained obscene
and indecent language; and (3) that complainants were given due process before
their expulsion.23
Without evidence as to their truthfulness or veracity, the allegations in the
opposition filed by the defendants remained mere allegations and did not rise to
the dignity of proof.24 There is thus no factual support for respondent judge’s
resolution. Indeed, all that was submitted to respondent judge for resolution was
merely the issue of whether or not to grant a preliminary mandatory injunction to
compel the defendant school to allow complainants to enroll for the school year
1997-1998.
Only ignorance of basic procedure can account for the bizarre proceedings before
respondent judge. When the law is elementary, not to be aware of it constitutes
gross ignorance thereof. Judges are expected to have more than just a modicum
of acquaintance with the statutes and procedural rules.25 Truly, respondent judge
failed to live up to the demands of his position as a member of the bench.
Third. Complainants also claim that respondent judge’s resolution, dated
September 26, 1997, denying their motion for reconsideration and motion to inhibit
him was received by them only on February 19, 1998, or almost five months after
its supposed issuance.26 Respondent judge does not deny this allegation by
complainants in his comment.27
This is not the first time a charge of this nature has been made against respondent
judge. In A.M. No. RTJ-92-840, entitled "Atty. Arturo V. Miranda v. Judge Percival
Lopez, Regional Trial Court, Branch 78, Quezon City," respondent judge was
reprimanded by this Court for undue delay in the service of his decision in a civil
case upon the parties. Respondent judge was thus not above covering up his
shortcomings by making it appear that he timely resolved a matter before him.
Considering that counsel for complainants maintains his office only in Makati
City28 while respondent judge presides over a court located in Quezon City, it is
hard to believe that the supposed September 27, 1997 resolution took five months
before it could be served on complainants and their counsel. In any event, it is
incumbent upon a judge to manage his court in such manner as to promote prompt
and convenient disposition of its business.29 Hence, the responsibility for the delay
in the service of the resolution, dated September 26, 1997, on the complainants in
this case lies only with respondent judge.
We now consider the penalty to be imposed on respondent judge. In a recent
case30 decided by this Court, a judge was fined in the amount of P1,000.00 for
having incurred a delay of four months in resolving the issue of injunctive writ. On
the other hand, a fine of P2,000.00 was imposed by this Court in previous
cases31 where judges were found guilty of gross ignorance of the law. In this case,
where we find respondent judge guilty of undue delay in the resolution of a motion,
gross ignorance of the law, and failure to heed a prior warning from this Court, a
fine of P5,000.00 with warning of a more drastic sanction should he repeat the
same offenses is appropriate.1âwphi1.nêt
WHEREFORE, this Court finds respondent Judge Percival Mandap Lopez, of the
Regional Trial Court, Branch 78, Quezon City, GUILTY of gross ignorance of the
law, undue delay in the resolution of the writ of preliminary mandatory injunction in
Civil Case No. Q-97-30549, and failure to heed a prior warning by this Court and
hereby imposes on him a FINE of P5,000.00, with warning that repetition of the
same or similar offenses will be dealt with more severely.
SO ORDERED.
G.R. No. L-44980 February 6, 1990
VIRGINIA MARAHAY, petitioner,
vs.
HON. MENELEO C. MELICOR, as Presiding Judge, Court of First Instance,
Branch VI, Carigara, Leyte; ALIWANAG B. VALLERAMOS, LIGAYA BRAZIL y
PEREZ, FRUTO BRAZIL, MATIBAY BRAZIL Y PALADIN and DALISAY BRAZIL
Y AYASO, respondents.
In this petition for certiorari under Rule 65 of the Rules of Court, petitioner imputes
grave abuse of discretion on the part of respondent judge for issuing an order,
dated February 27, 1976, in Civil Case No. C-1222, entitled "Virginia Marahay vs.
Aliwanag B. Valleramos et. al.," dismissing the complaint; an order, issued on June
26, 1976, denying the motion for reconsideration filed by therein plaintiff, and an
order, dated September 18, 1976, denying her second motion for reconsideration.
The records show that on June 20, 1974, petitioner filed with respondent court an
action for recovery of real property against Aliwanag B. Valleramos. Later, the
complaint was amended to implead and include other defendants, the other private
respondents herein, as indispensable parties. 1
After the issues were joined, the case was set for pre-trial on August 9,1974, but
this was deferred to a later date due to the absence of petitioner and her
counsel. 2 On April 4, 1975, the same case was again scheduled for pre-trial but
the same did not proceed due to the fact that petitioner appeared without her
counsel while only one of the defendants appeared with counsel. 3 Later, informed
of her lawyer's inability to attend the pre-trial, petitioner secured the services of
another lawyer, Atty. Dominador Monjardin, who was present at the next pre-trial
conference held on October 9, 1975.
Trial on the merits commenced on November 13, 1975 with the petitioner taking
the witness stand on direct examination. 4 The defense failed to cross-examine her
since the proceedings were cut short for lack of time and the continuation thereof
was set for January 19, 1976.
On January 7, 1976, Atty. Monjardin filed a motion for postponement for the
reason that he was taking the examination for government prosecutors in Manila
on January 15, 1976, with a prayer that the case be reset either in the first week of
January or the second week of February of said year. 5 The court eventually
issued an order resetting the trial to February 18, 1976 with notice to petitioner and
her counsel. 6
On said date, petitioner appeared without counsel prompting private respondents,
through their counsel, to move for the dismissal of the case for petitioner's alleged
inability to prosecute her case and for apparent lack of interest. 7
The motion to dismiss, which was made orally in open court, was submitted for
resolution by the trial court. As earlier stated, the court below in its order dated
February 27, 1976, dismissed the complaint. Two motions for reconsideration were
filed by petitioner but the same were denied by respondent judge, hence, the
present special civil action.
The sole issue is whether or not respondent judge committed grave abuse of
discretion amounting to lack or excess of jurisdiction in ordering the dismissal of
the case and, consequently, denying petitioner the right to fully prosecute her
case.
Before resolving said issue, it would be judicious to first clear the air of any
misconception as to the procedural propriety of giving due course to this petition.
An order of dismissal, whether right or wrong, is a final order. If it is erroneous,
ordinarily the remedy of the aggrieved party is appeal, hence the same cannot be
assailed by certiorari. 8
Nevertheless, in the broader interests of justice, this Court has given due course to
the present petition in consideration of the fact that this is not the first time we have
passed upon a petition for certiorari, although the proper remedy is
appeal, 9 where the equities warrant such extraordinary recourse. This is
especially true where, as in the case, petitioner's affidavit of merits shows that she
has a good cause of action, that her counsel's affidavit of merits avers justifiable
reasons for his non-appearance at said hearing, and the trial court is faulted with
gravely abusing its discretion to the extent of denying due process to therein
plaintiff. Significantly, it was respondent judge himself who advised petitioner to
avail of said remedy in his order dismissing petitioner's second motion for
reconsideration, 10 obviously because appeal would not be a speedy and adequate
remedy under the circumstances and considering that dismissals on technicalities
are viewed with disapproval.
Turning now to the main issue, petitioner asseverates that respondent-judge acted
capriciously in denying her day in court by not postponing the continuation of the
trial to some future time and giving her an opportunity to secure the services of
another lawyer. Parenthetically, it is of record that petitioner is an invalid and
moves around in a wheel chair.
The petition has the imprint of merit and the writ will lie.
Section 3, Rule 17 of the Rules of Court provides that —
If plaintiff fails to appear at the time of the trial, or to prosecute his
action for an unreasonable length of time, or to comply with these
rules or any order of the court, the action may be dismissed upon
motion of the defendant or upon the court's own motion. This
dismissal shall have the effect of an adjudication on the merits,
unless otherwise provided by the court.
It is, therefore, the absence of the plaintiff, and not the absence of the lawyer,
which may warrant the dismissal of the case on the ground of non-suit. 11 In the
case at bar, only the counsel for plaintiff was absent, plaintiff herself being in
attendance in court.
While the aforequoted provision also provides sanctions for failure to prosecute for
an unreasonable length of time, despite the presence of the interested parties, it
cannot be said that such neglect or failing obtains in the present case. There is
failure to prosecute when the plaintiff, being present, is not ready or is unwilling to
proceed with the scheduled trial. 12 In the instant case, petitioner did not in the
least manifest unwillingness to proceed with the hearing. Upon the call for
appearances, petitioner responded that her counsel was in Manila and that he had
not yet returned. Unschooled as she is in the vagaries of procedural law, petitioner
indeed could not have responded otherwise nor done any better.
Considering all the attendant circumstances, the least that the trial court could
have done was to afford petitioner a reasonable time, especially considering her
handicap, to procure the services of another lawyer and, if necessary, with a stern
warning that any further postponement of the trial shall cause the dismissal of the
case.
The counter-argument that petitioner had already moved for postponements in the
past should take into account the fact that the circumstances thereof were not of
her making nor intended to be dilatory and that no substantial prejudice has been
caused private respondents. Besides, judgments of non-suit are generally
disfavored in the same manner that default judgments are discouraged. Thus,
in Padua vs. Ericta, etc., et al ., 13 we had the occasion to rule that:
Courts should not brook undue delays in the ventilation and
determination of causes. It should be their constant effort to
ensure that litigations are prosecuted and resolved with dispatch.
Postponements of trials and hearings should not be allowed
except on meritorious grounds; and the grant or refusal thereof
rests entirely in the sound discretion of the Judge. It goes without
saying, however, that discretion must be reasonably and wisely
exercised, in the light of the attendant circumstances. Some
reasonable deferment of the proceedings may be allowed or
tolerated to the end that cases may be adjudged only after full and
free presentation of evidence by all the parties, especially where
the deferment would cause no substantial prejudice to any party.
The desideratum of a speedy disposition of cases should not, if at
all possible, result in the precipitate loss of a party's right to
present evidence and either in the plaintiffs being non-suited or of
the defendant's being pronounced liable under an ex-
parte judgment.
Indeed, after the issues had been duly joined, a plaintiff is entitled to
present his case. Seldom does departure from orderly procedure bring
satisfactory results. 14
While a court can dismiss a case on the ground of non prosequitur, the real test for
the exercise of such power is whether, under the circumstances, plaintiff is
chargeable with want of due diligence in failing to proceed with reasonable
promptitude. 15 In the absence of a pattern or scheme to delay the disposition of
the case or a wanton failure to observe the mandatory requirement of the rules on
the part of the plaintiff, as in the case at bar, courts should decide to dispense with
rather than wield their authority to dismiss.
Further, when a party, without malice, fault, or inexcusable negligence, is not really
prepared for trial, the court would be abusing its discretion if a reasonable
opportunity is denied him for preparing therefor and for obtaining due process of
law. 16
Time and again, we have emphasized that the rules should be liberally construed
in order to promote their object and assist the parties in obtaining not only speedy
but, more importantly, just and inexpensive determination of every action or
proceeding. 17
ACCORDINGLY, the writ of certiorari is hereby granted and the order of the
court a quo of February 27, 1976 dismissing petitioner's complaint, as well as its
orders dated June 26, 1976 and September 18, 1976 denying petitioner's first and
second motions for reconsideration, respectively, are hereby ANNULLED and SET
ASIDE. Civil Case No. C-1222 is hereby REINSTATED and the Regional Trial
Court which replaced Branch VI of the defunct Court of First Instance and/or in
which this action is now pending is DIRECTED to continue with the trial of
petitioner's action and decide the same on the merits in due course.
SO ORDERED.