G.R. No. 188213, January 11, 2016 - NATIVIDAD C. CRUZ AND BENJAMIN DELA CRUZ, Petitioners, v.

PANDACAN HIKER'S CLUB, INC., REPRESENTED BY ITS PRESIDENT, PRISCILAILAO, Respondent.

THIRD DIVISION

G.R. No. 188213, January 11, 2016

NATIVIDAD C. CRUZ AND BENJAMIN DELA CRUZ, Petitioners, v. PANDACAN HIKER'S CLUB, INC.,
REPRESENTED BY ITS PRESIDENT, PRISCILAILAO, Respondent.

DECISION

PERALTA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to annul
and set aside the Court of Appeals Decision1 dated March 31, 2008 in CA-G.R. SP. No. 104474. The
appellate court reversed and set aside the earlier decision of the Office of the Ombudsman dismissing the
complaint filed against petitioners.

Below are the facts of the case.

Petitioner Natividad C. Cruz (Cruz) was Punong Barangay or Chairperson of Barangay 848, Zone 92, City of
Manila.2 On November 10, 2006, around five o'clock in the afternoon, and along Central Street, Pandacan,
Manila, within the vicinity of her barangay, she allegedly confronted persons playing basketball with the
following statements:

Bakit nakabukas ang (basketball) court? Wala kayong karapatang maglaro sa court na 'to, barangay namin
ito! xxx xxx xxx Wala kayong magagawa. Ako ang chairman dito. Mga walanghiya kayo, patay gutom! Hindi
ako natatakot! Kaya kong panagutan lahat!3 chanroble slaw

Then, she allegedly gave an order to the other petitioner, Barangay Tanod Benjamin dela Cruz (Dela Cruz),
to destroy the basketball ring by cutting it up with a hacksaw which Dela Cruz promptly complied with, thus,
rendering the said basketball court unusable.4 chanrob lesvi rtua llawli bra ry

The acts of petitioners prompted the filing of a Complaint (for Malicious Mischief, Grave Misconduct, Conduct
Prejudicial to the Best Interest of the Service and Abuse o.f Authority)5 before the Prosecutor's Office and
the Office of the Ombudsman by the group that claims to be the basketball court's owners, herein
respondents Pandacan Hiker's Club, Inc. (PHC) and its president Priscila Ilao (Ilao). In the complaint, they
alleged that PHC, a non-stock, non-profit civic organization engaged in "health, infrastructure, sports and
other so-called poverty alleviation activities" in the Pandacan area of Manila, is the group that had donated,
administered and operated the subject basketball court for the Pandacan community until its alleged
destruction by petitioners.6
chan roble svirtuallawl ibra ry

The complaint averred that the damage caused by petitioners was in the amount of around P2,000.00. It
was supported by the affidavits of ten (10) members of PHC who allegedly witnessed the destruction.
Meanwhile, respondent Ilao added that the acts of petitioner Cruz, the Barangay Chairperson, of ordering
the cutting up of the basketball ring and uttering abusive language were "unwarranted and unbecoming of a
public official."7 cha nrob lesvi rtua llawli bra ry

In answer to the complaint, Cruz alleged that the basketball court affected the peace in the barangay and
was the subject of many complaints from residents asking for its closure. She alleged that the playing court
blocked jeepneys from passing through and was the site of rampant bettings and fights involving persons
from within and outside the barangay. She claimed that innocent persons have been hurt and property had
been damaged by such armed confrontations, which often involved the throwing of rocks and improvised
"molotov" bombs. She also averred that noise from the games caused lack of sleep among some residents
and that the place's frequent visitors used the community's fences as places to urinate. Cruz maintained
that the court's users never heeded the barangay officials' efforts to pacify them and when the basketball
ring was once padlocked, such was just removed at will while members of the complainants' club continued
playing. When Cruz asked for the PHC to return the steel bar and padlock, the request was simply ignored,
thus, prompting her to order Dela Cruz to destroy the basketball ring. The destruction was allegedly also a
response to the ongoing clamor of residents to stop the basketball games.8 Cruz denied allegations that she
shouted invectives at the PHC members. In support of her answer, Cruz attached copies of the complaints, a
"certification" and letters of barangay residents asking for a solution to the problems arising from the
disruptive activities on the said playing venue.9 chan roble svirtuallaw lib rary

After the parties' submission of their respective Position Papers,10 the Office of the Ombudsman rendered its
Decision11 dated April 26, 2007 dismissing the complaint filed by Ilao, et al. The Ombudsman found that the
act of destroying the basketball ring was only motivated by Cruz and Dela Cruz performing their sworn duty,
as defined in the Local Government Code.12 It found the act to be a mere response to the clamor of
constituents.13 The office found that though the cutting of the ring was "drastic," it was done by the
barangay officials within their lawful duties, as the act was only the result of the unauthorized removal of
and failure to return the steel bar and padlock that were earlier placed thereon.14 Neither did the office give
credence to the allegation that Cruz uttered invectives against the complainants' witnesses, noting that the
said witnesses are tainted by their personal animosity against the barangay officials.15 chan roblesv irt uallawl ibra ry

After the Ombudsman's ruling dismissing the complaint filed against Cruz and Dela Cruz, the complainants
Ilao, et al. filed a petition for review before the Court of Appeals praying for the latter court to nullify the
Ombudsman's decision.16 The petition's thesis was that any actions in furtherance of the community's
welfare must be approved by ordinance and that unless a thing is a nuisance per se, such a thing may not
be abated via an ordinance and extrajudicially.17 cha nrob lesvi rtua llawli bra ry

Commenting on the petition for review, the Office of the Ombudsman, through the Office of the Solicitor
General, averred that Section 389 of the Local Government Code, which defines the powers, duties and
functions of the punong barangay, among which are the power to enforce all laws and ordinances applicable
within the barangay and the power to maintain public order in the barangay and, in pursuance thereof, to
assist the city or municipal mayor and the sanggunian members in the performance of their duties and
functions, does not require an ordinance for the said official to perform said functions.18 The acts were also
in pursuance of the promotion of the general welfare of the community, as mentioned in Section 16 of the
Code.19 chanro blesvi rtua llawli bra ry

In its assailed Decision dated March 31, 2008, the Court of Appeals reversed and set aside the decision of
the Office of the Ombudsman. The appellate court found petitioner Natividad C. Cruz liable for conduct
prejudicial to the best interest of the service and penalized her with a suspension of six (6) months and one
(1) day, while it reprimanded the other petitioner Benjamin dela Cruz, and also warned both officials that a
future repetition of the same or similar acts will be dealt with more severely.

The appellate court sustained the contentions of Ilao, et al. that Cruz and Dela Cruz performed an
abatement of what they thought was a public nuisance but did the same without following the proper legal
procedure, thus making them liable for said acts.20 It held Cruz to be without the power to declare a thing a
nuisance unless it is a nuisance per se.21 It declared the subject basketball ring as not such a nuisance and,
thus, not subject to summary abatement. The court added that even if the same was to be considered a
nuisance per accidens, the only way to establish it as such is after a hearing conducted for that
purpose.22 chan roble svi rtual lawlib rary

A motion for reconsideration, filed by Cruz and Dela Cruz was likewise denied by the appellate
court.23Hence, they filed this petition.

Petitioners maintain that they acted merely with the intention to regain free passage of people and vehicles
over the street and restore the peace, health and sanitation of those affected by the basketball court. Cruz,
in particular, asserts that she merely abated a public nuisance which she claimed was within her power as
barangay chief executive to perform and was part of her duty to maintain peace and order.24 cha nrob lesvi rtua llawli bra ry

We deny the petition.

Under normal circumstances, this Court would not disturb the findings of fact of the Office of the
Ombudsman when they are supported by substantial evidence.25 However, We make an exception of the
case at bar because the findings, of fact of the Ombudsman and the Court of Appeals widely differ.26 c han roblesv irt uallawl ibra ry

It is held that the administrative offense of conduct prejudicial to the interest of the service is committed
when the questioned conduct tarnished the image and integrity of the officer's public office; the conduct
need not be related or connected to the public officer's official functions for the said officer to be meted the
corresponding penalty.27 The basis for such liability is Republic Act No. 6713, or the Code of Conduct and
Ethical Standards for Public Officials and Employees, particularly Section 4 (c) thereof, which ordains that
public officials and employees shall at all times respect the rights of others, and shall refrain from doing acts
contrary to public safety and public interest.28 In one case, this Court also stated that the Machiavellian
principle that "the end justifies the means" has no place in government service, which thrives on the rule of
law, consistency and stability.29 chanro blesvi rt uallawl ibra ry

For these reasons, in the case at bar, We agree with the appellate court that the petitioners' actions, though
well-intentioned, were improper and done in excess of what was required by the situation and fell short of
the aforementioned standards of behavior for public officials.

It is clear from the records that petitioners indeed cut or sawed in half the subject basketball ring, which
resulted in the destruction of the said equipment and rendered it completely unusable.30 Petitioners also
moved instantaneously and did not deliberate nor consult with the Sangguniang Barangay prior to
committing the subject acts; neither did they involve any police or law enforcement agent in their actions.
They acted while tempers were running high as petitioner Cruz, the Barangay Chairperson, became incensed
at the removal of the steel bar and padlock that was earlier used to close access to the ring and at the
inability or refusal of respondents' group to return the said steel bar and padlock to her as she had ordered.

The destructive acts of petitioners, however, find no legal sanction. This Court has ruled time and again that
no public official is above the law.31 The Court of Appeals correctly ruled that although petitioners claim to
have merely performed an abatement of a public nuisance, the same was done summarily while failing to
follow the proper procedure therefor and for which, petitioners must be held administratively liable.

Prevailing jurisprudence holds that unless a nuisance is a nuisance per se, it may not be summarily
abated.32chanrob lesvi rtual lawlib rary

There is a nuisance when there is "any act, omission, establishment, business, condition of property, or
anything else which: (1) injures or endangers the health or safety of others; or (2) annoys or offends the
senses; or (3) shocks, defies or disregards decency or morality; or (4) obstructs or interferes with the free
passage of any public highway or street, or any body of water; or (5) hinders or impairs the use of
property."33 But other than the statutory definition, jurisprudence recognizes that the term "nuisance" is so
comprehensive that it has been applied to almost all ways which have interfered with the rights of the
citizens, either in person, property, the enjoyment of his property, or his comfort.34 chan roble svi rt uallawlib ra ry

A nuisance is classified in two ways: (1) according to the object it affects; or (2) according to its
susceptibility to summary abatement.

As for a nuisance classified according to the object or objects that it affects, a nuisance may either be: (a) a
public nuisance, i.e., one which "affects a community or neighborhood or any considerable number of
persons, although the extent of the annoyance, danger or damage upon individuals may be unequal"; or (b)
a private nuisance, or one "that is not included in the foregoing definition" which, in jurisprudence, is one
which "violates only private rights and produces damages to but one or a few persons."35 chanroble svi rtual lawlib rary

A nuisance may also be classified as to whether it is susceptible to a legal summary abatement, in which
case, it may either be: (a) a nuisance per se, when it affects the immediate safety of persons and property,
which may be summarily abated under the undefined law of necessity;36 or, (b) a nuisance per accidens,
which "depends upon certain conditions and circumstances, and its existence being a question of fact, it
cannot be abated without due hearing thereon in a tribunal authorized to decide whether such a thing does
in law constitute a nuisance;"37 it may only be so proven in a hearing conducted for that purpose and may
not be summarily abated without judicial intervention.38 chan roblesv irt uallawl ibra ry

In the case at bar, none of the tribunals below made a factual finding that the basketball ring was a
nuisance per se that is susceptible to a summary abatement. And based on what appears in the records, it
can be held, at most, as a mere nuisance per accidens, for it does not pose an immediate effect upon the
safety of persons and property, the definition of a nuisance per se. Culling from examples cited in
jurisprudence, it is unlike a mad dog on the loose, which may be killed "on sight because of the immediate
danger it poses to the safety an.d lives of the people; nor is it like pornographic materials, contaminated
meat and narcotic drugs which are inherently pernicious and which may be summarily destroyed; nor is it
similar to a filthy restaurant which may be summarily padlocked in the interest of the public health.39 A
basketball ring, by itself, poses no immediate harm or danger to anyone but is merely an object of
recreation. Neither is it, by its nature, injurious to rights of property, of health or of comfort of the
community and, thus, it may not be abated as a nuisance without the benefit of a judicial hearing.40 c hanro blesvi rt uallawl ibra ry

But even if it is assumed, ex gratia argumenti, that the basketball ring was a nuisance per se, but without
posing any immediate harm or threat that required instantaneous action, the destruction or abatement
performed by petitioners failed to observe the proper procedure for such an action which puts the said act
into legal question.

Under Article 700 of the Civil Code, the abatement, including one without judicial proceedings, of a public
nuisance is the responsibility of the district health officer. Under Article 702 of the Code, the district health
officer is also the official who shall determine whether or not abatement, without judicial proceedings, is the
best remedy against & public nuisance. The two articles do not mention that the chief executive of the local
government, like the Punong Barangay, is authorized as the official who can determine the propriety of a
summary abatement.

Further, both petitioner Cruz, as Punong Barangay, and petitioner Dela Cruz, as Barangay Tanod, claim to
have acted in their official capacities in the exercise of their powers under the general welfare clause of the
Local Government Code. However, petitioners could cite no barangay nor city ordinance that would have
justified their summary abatement through the exercise of police powers found in the said clause. No
barangay nor city ordinance was violated; neither was there one which specifically declared the said
basketball ring as a nuisance per se that may be summarily abated. Though it has been held that a
nuisance per se may be abated via an ordinance, without judicial proceedings,41 We add that, in the case at
bar, petitioners were required to justify their abatement via such an ordinance because the power they claim
to have exercised - the police power under the general welfare clause - is a power exercised by the
government mainly through its legislative, and not the executive, branch. The prevailing jurisprudence is
that local government units such as the provinces, cities, municipalities and barangays exercise police power
through their respective legislative bodies.42c han roblesv irt uallawl ibra ry

The general welfare clause provides for the exercise of police power for the attainment or maintenance of
the general welfare of the community. The power, however, is exercised by the government through its
legislative branch by the enactment of laws regulating those and other constitutional and civil
rights.43Jurisprudence defines police power as the plenary power vested in the legislature to make
statutes and ordinances to promote the health, morals, peace, education, good order or safety and general
welfare of the people.44 The Latin maxim is salus populi est suprema lex (the welfare of the people is the
supreme law).45 Police power is vested primarily with the national legislature, which may delegate the same
to local governments through the enactment of ordinances through their legislative bodies
(thesanggunians)46 The so-called general welfare clause, provided for in Section 16 of the Local Government
Code, provides for such delegation of police power, to wit:

Section 16. General Welfare. Every local government unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and
effective governance, and those which are essential to the promotion of the general welfare. Within their
respective territorial jurisdictions, local government units shall ensure and support, among other things, the
preservation and enrichment of culture, promote health and safety, enhance the right of the people to a
balanced ecology, encourage and support the development of appropriate and self-reliant scientific and
technological capabilities, improve public morale, enhance economic prosperity and social justice, promote
full employment among their residents, maintain peace and order, and preserve the comfort and
convenience of their inhabitants.

Flowing from this delegated police power of local governments, a local government unit like Barangay 848,
Zone 92 in which petitioners were public officials, exercises police power through its legislative body, in this
case, its Sangguniang Barangay.47 Particularly, the ordinances passed by the sanggunian partly relate to the
general welfare of the barangay, as also provided for by the Local Government Code as follows:

Section 391. Powers, Duties, and Functions. -

(a) The sangguniang barangay, as the legislative body of the barangay, shall: ChanRoble sVirt ualawli bra ry

(1) Enact ordinances as may be necessary to discharge the responsibilities conferred upon it by law or
ordinance and to promote the general welfare of the inhabitants therein; (Emphasis supplied)

Even the powers granted to the punong barangay consist mainly of executing only those laws and
ordinances already enacted by the legislative bodies, including the said official's own sangguniang
barangay, to wit:

Section 389. Chief Executive: Powers, Duties, and Functions. -

(a) The punong barangay, as the chief executive of the barangay government, shall exercise such powers
and perform such duties and functions, as provided by this Code and other laws.

(b) For efficient, effective and economical governance, the purpose of which is the general welfare of the
barangay and its inhabitants pursuant to Section 16 of this Code, the punong barangay shall: ChanRobles Virtualawl ibra ry

(1) Enforce all laws and ordinances which are applicable within the barangay;

xxxx

(3) Maintain public order in the barangay and, in pursuance thereof, assist the city or municipal mayor
and the sanggunian members in the performance of their duties and functions;

xxxx

(14) Promote the general welfare of the barangay;

(15) Exercise such other powers and perform such other duties and functions as may be prescribed by
law or ordinance.48

Clearly, the complete destruction of the basketball ring by the petitioners is justified neither by law or
ordinance nor even by equity or necessity, which makes the act illegal and petitioners liable. And even as an
action to maintain public order, it was done excessively and was unjustified. Where a less damaging action,
such as the mere padlocking, removal or confiscation of the ring would have sufficed, petitioners resorted to
the drastic measure of completely destroying and rendering as unusable the said ring, which was a private
property, without due process. Such an act went beyond what the law required and, in being so, it tarnished
the image and integrity of the offices held by petitioners and diminished the public's confidence in the legal
system. Petitioners who were public officials should not have been too earnest at what they believed was an
act of restoring peace and order in the community if in the process they would end up disturbing it
themselves. They cannot break the law that they were duty-bound to enforce. Although the Court bestows
sympathy to the numerous constituents who allegedly complained against the basketball court to
petitioners, it cannot legally agree with the methods employed by the said officials. Their good intentions do
not justify the destruction of private property without a legal warrant, because the promotion of the general
welfare is not antithetical to the preservation of the rule of law.49Unlike the examples cited earlier of a mad
dog on the loose, pornography on display or a filthy restaurant, which all pose immediate danger to the
public and, therefore, could be addressed by anyone on sight, a basketball ring as a nuisance poses no such
urgency that could have prevented petitioners from exercising any form of deliberation or circumspection
before acting on the same.

Petitioners do not claim to have acted in their private capacities but in their capacities as public officials,
thus, they are held administratively liable for their acts. And even in their capacities as private individuals
who may have abated a public nuisance, petitioners come up short of the legal requirements. They do not
claim to have complied with any of the requisites laid down in Article 704 of the Civil Code, to wit:

Art. 704. Any private person may abate a public nuisance which is specially injurious to him by removing, or
if necessary, by destroying the thing which constitutes the same, without committing a breach of the peace,
or doing unnecessary injury. But it is necessary: ChanRoblesVi rt ualawlib ra ry
(1) That demand be first made upon the owner or possessor of the property to abate the nuisance;

(2) That such demand has been rejected;

(3) That the abatement be approved by the district health officer and executed with the assistance of the
local police; and

(4) That the value of the destruction does not exceed three thousand pesos.

WHEREFORE, premises considered, the petition is DENIED. The Court of Appeals Decision dated March 31,
2008 in CA-G.R. SP. No. 104474 is AFFIRMED.

SO ORDERED. cralawlawlibra ry

Velasco, Jr., (Chairperson), Villarama, Jr., Reyes, and Jardeleza, JJ., concur. cralawlawl ibra ry
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 192861 June 30, 2014

LINDA RANA, Petitioner,

vs.
TERESITA LEE WONG, SPS. SHIRLEY LEE ONG and RUBEN ANG ONG, represented by their
Attorney-in-fact WILSON UY, and SPS. ROSARIO and.WILSON UY, Respondents.

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

G.R. No. 192862

SPS. ROSARIO and WILSON UY, WILSON UY as attorney-in-fact of TERESITA LEE WONG,
and SPS. SHIRLEY LEE ONG and RUBEN ANG ONG, Petitioners,
vs.
SPS. REYNALDO. and LINDA RANA, Respondents.

DECISION

PERLAS-BERNABE, J.:

Assailed in these consolidated petitions for review on certiorari1 are the Decision2 dated July 13,
2005 and the Resolution3 dated June 18, 2010 of the Court of Appeals (CA) in CA-G.R. CV No.
78463 which affirmed the Decision4 dated December 20, 2002 of the Regional Trial Court of Cebu
City, 7th Judicial Region, Branch 22 (RTC) in Civil Case Nos. CEB-20893 and CEB-21296.

The Facts

Teresita Lee Wong (Wong) and Spouses Shirley and Ruben Ang Ong (Sps. Ong) are co-owners
pro-indivisoof a residential land situated in Peace Valley Subdivision, Lahug, Cebu City, covered by
Transfer Certificate of Title (TCT) No. 1391605 (Wong-Ong property), abutting6 a 10-meter7 wide
subdivision road (subject road).

On the opposite side of the subject road, across the Wong-Ong property, are the adjacent lots of
Spouses Wilson and Rosario Uy (Sps. Uy) and Spouses Reynaldo and Linda Rana (Sps. Rana),
respectively covered by TCT Nos. 1240958 (Uy property) and T-1155699 (Rana property). The said
lots follow a rolling terrain10 with the Rana property standing about two (2) meters11 higher than and
overlooking the Uy property, while the Wong-Ong property is at the same level with the subject
road.12

Sometime in 1997, Sps. Rana elevated and cemented a portion of the subject road that runs
between the Rana and Wong-Ong properties (subject portion) in order to level the said portion with
their gate.13 Sps. Rana likewise backfilled a portion (subject backfilling) of the perimeter fence
separating the Rana and Uyproperties without erecting a retaining wall that would hold the weight of
the added filling materials. The matter was referred to the Office of the Barangay Captain of
Lahug14 as well as the Office of the Building Official of Cebu City (OBO),15 but to no avail.16

The RTC Proceedings

On September 19, 1997, Wong, Sps. Ong, and Sps. Uy (Wong, et al.) filed a Complaint17 for
Abatement of Nuisance with Damages against Sps. Rana before the RTC, docketed as Civil Case
No. CEB-20893, seeking to: (a) declare the subject portion as a nuisance which affected the ingress
and egress of Wong and Sps. Ong to their lot "in the usual and [normal] manner, such that they now
have to practically jump from the elevated road to gain access to their lot and scale the same
elevation in order to get out";18 (b) declare the subject backfilling as a nuisance considering that it
poses a clear and present danger to the life and limb of the Uy family arising from the premature
weakening of Sps. Uys perimeter fence due to the seeping of rain water from the Rana property that
could cause its sudden collapse;19 (c) compel Sps. Rana to restore the subject portion to its original
condition; (d) compel Sps. Rana to remove the backfilling materials along Sps. Uys perimeter fence
and repair the damage to the fence; and (e) pay moral and exemplary damages, attorneys fees,
litigation expenses, and costs of suit.20

In their Answer dated October 23, 1997,21 Sps. Rana countered that prior to the construction of their
residence, there was no existing road and they merely developed the subject portion which abuts
their gate in view of the rolling terrain. They claimed thatWong and Sps. Ong do not have any need
for the subject portion because their property is facing an existing road, i.e., Justice Street. They
likewise denied having undertaken any backfilling along the boundary of the Uy property considering
the natural elevation of their own property, which renders backfilling unnecessary.22

After the filing of Sps. Ranas Answer, Wong, et al., in turn, filed a Motion for Leave to be Allowed to
Bring in Heavy Equipment23 for the intermediate development of the Wong-Ong property with a view
to the use of the subject road as access to their lot. Notwithstanding Sps. Ranas opposition, the
RTC granted Wong,et al.s motion in an Order24dated November 27, 1997 (November 27, 1997
Order), the dispositive portion of which reads as follows: WHEREFORE, as prayed for, the motion is
hereby GRANTED. Consequently, the plaintiffs are hereby allowed to use heavy
equipments/machineries in order to develop the area and make use of the right of way which is
located between the [Wong-Ong and Rana properties]. (Emphasis supplied)

Despite the limited tenor of the November 27, 1997 Order, Wong, et al., on May 23 and 24, 1998,
proceeded to level the subject portion, which, in the process, hampered Sps. Ranas ingress and
egress to their residence, resulting too to the entrapment of their vehicle inside their
garage.25 Feeling aggrieved, Sps. Rana, on June 19, 1998, filed a Supplemental Answer,26 praying
for: (a) the restoration of the soil, boulders, grade, contour, and level of the subject portion; and (b)
payment of moral damages, actual and consequential damages, and exemplary damages.

Meanwhile, on December 8, 1997, Sps. Rana filed with another branch of the same trial court a
Complaint27 for Recovery of Property and Damages against Sps. Uy, docketed as Civil Case No.
CEB-21296. They alleged that in October 1997, theycaused a resurvey of their property which
purportedly showed that Sps. Uyencroached upon an11-square meter (sq. m.) portion along the
common boundary of their properties. Their demands for rectification as well as barangay
conciliation efforts were, however, ignored. Thus, they prayed that Sps. Uy be ordered to remove
their fence along the common boundary and return the encroached portion, as well as to pay moral
damages, attorneys fees, and litigation expenses. After the filing of Sps. Ranas complaint, Civil
Case No. CEB-21296 was consolidated with Civil Case No. CEB-20893.28
In response thereto, Sps. Uy filed an Answer with Counterclaim,29 averring that prior to putting up
their fence, they caused a relocation survey of their property and were, thus, confident that their
fence did not encroach upon the Rana property. In view of Sps.Ranas complaint, they then caused
another relocation survey which allegedly showed, however, that while they encroached around 3
sq. m. of the Rana property, Sps. Rana intruded into 7 sq. m. of their property. Hence, theyposited
that they had "a bigger cause than that of [Sps. Rana] in [so] far as encroachment is
concerned."30 Accordingly, they prayed for the dismissal of Sps. Ranas complaint with counterclaim
for damages, attorneys fees, and litigation expenses.

In light of the foregoing, the RTC appointed three (3) commissioners to conduct a resurvey of the Uy
and Rana properties for the purpose of determining if any encroachment occurred whatsoever.31

The RTC Ruling

On December 20, 2002, the RTC rendered a Decision32 in the consolidated cases.

In Civil Case No. CEB-20893, the RTC found that: (a) Sps. Rana, without prior consultation with the
subdivision owner or their neighbors, developed to their sole advantage the subject portion
consisting of one-half of the width of the 10-meter subject road by introducing filling materials, and
rip rapping the side of the road; (b) the said act denied Wong and Sps. Ong the use of the subject
portion and affected the market value of their property; (c) Sps. Uy have no intention of using the
subject portion for ingress or egress considering that theybuilt a wall fronting the same; and (d)
Wong, et al.s manner of enforcing the November 27, 1997 Order caused damage and injury to Sps.
Rana and amounted to bad faith. In view of these findings, the RTC declared that the parties all
acted in bad faith, and, therefore, no relief can be granted to them against each other.33

Separately, however, the RTC found that the backfilling done by Sps. Rana on their property exerted
pressure on the perimeter fence of the Uy property, thereby constituting a nuisance. As such, the
former were directed to construct a retaining wall at their own expense.34 Meanwhile, in Civil Case
No. CEB-21296, the RTC, despite having adopted the findings of Atty. Reuel T. Pintor (Atty. Pintor)
a court-appointed commissioner who determined that Sps. Uy encroached the Rana property by 2
sq. m35 dismissed both the complaint and counterclaim for damages because of the failure ofboth
parties to substantiate their respective claims of bad faith against each other.36

Dissatisfied with the RTCs verdict, the parties filed separate appeals with the CA.

The CA Ruling

On July 13, 2005, the CA rendered a Decision37 affirming the RTC.

With respect to Civil Case No. CEB-20893, the CA found that (a) Sps. Ranas act of elevating and
cementing the subject portion curtailed the use and enjoyment by Wong and Sps. Ong of their
properties; (b) the undue demolition of the subject portion by Wong, et al.hampered Sps. Ranas
ingress and egress to their residence and deprived them of the use of their vehicle which was
entrapped in their garage; and (c) both parties were equally at fault in causingdamage and injury to
each other and, thus, are not entitled to the reliefs sought for.38

On the other hand, the CA found that the backfilling done by Sps. Rana on their property requires
necessary works to prevent it from jeopardizing someones life or limb.39
As for Civil Case No. CEB-21296, the CA sustained the dismissal of the complaint as well as the
parties respective claims for damages for lack of legal and factual bases.40

The parties filed separate motions for reconsideration41 which were, however, denied in the
Resolution42 dated June 18, 2010, hence, the instant petitions.

The Issues Before the Court

In G.R. No. 192861, petitioner Linda Rana (Linda Rana)43 faults the RTC in (a) not finding Wong and
Sps. Uyguilty of malice and bad faith both in instituting Civil Case No. CEB-20893 and in erroneously
implementing the November 27, 1997 Order, and (b) failing or refusing to grant the reliefs initially
prayed for,among others, the reconveyance of the encroached property.44

On the other hand, in G.R. No. 192862, petitioners Wong, et al. fault the RTC in (a) applying the in
pari delictodoctrine against them and failing to abate the nuisance45 which still continues and actually
exists as Sps. Rana caused the same to be reconstructed and restored to their prejudice,46 and (b)
not finding Sps. Rana guilty of bad faith in instituting Civil Case No. CEB-21296 and ordering them to
pay damages to petitioners Wong, et al.47

The Courts Ruling

The petitions are partly meritorious.

As both petitions traverse the issues intersectingly, the Court deems it apt to proceed with its
disquisition according to the subject matters of the cases as originally filed before the RTC.

A. Civil Case No. CEB-20893

For Abatement of Nuisance and Damages.

Under Article 694 of the Civil Code, a nuisance is defined as "any act, omission, establishment,
business, condition of property, or anything else which: (1) Injures or endangers the healthor safety
of others; or (2) Annoys or offends the senses; or(3) Shocks, defies or disregards decency or
morality; or (4) Obstructs or interferes with the free passage of any public highway or street, or any
body of water;or (5) Hinders or impairs the use of property." Based on case law, however, the term
"nuisance" is deemed to be "so comprehensive that it has been applied to almost all ways which
have interfered with the rights of the citizens, either in person, property, the enjoyment of his
property, or his comfort."48

Article 695 of the Civil Code classifies nuisances with respect to the object or objects that they affect.
In this regard, a nuisance may either be: (a) a public nuisance (or one which "affects a community or
neighborhood or any considerable number of persons, although the extent of the annoyance, danger
or damage upon individuals may be unequal"); or (b) a private nuisance (or one "that is not included
in the foregoing definition" [or, as case law puts it, one which "violates only private rights and
produces damages to but one or a few persons"]).49

Jurisprudence further classifies nuisances in relation to their legal susceptibility to summary

abatement (that is, corrective action without prior judicial permission). In this regard, a nuisance may
either be: (a) a nuisance per se(or one which "affects the immediate safety of persons and property
and may be summarily abated under the undefined law of necessity");50 or (b) a nuisance per
accidens(or that which "depends upon certain conditions and circumstances, and its existence being
a question of fact, it cannot be abated without due hearing thereon ina tribunal authorized to decide
whether such a thing does in law constitute a nuisance.")51

It is a standing jurisprudentialrule that unless a nuisance is a nuisance per se, it may not be
summarily abated. In Lucena Grand Central Terminal, Inc. v. Jac Liner, Inc.,52 the Court, citing other
cases on the matter, emphasized the need for judicial intervention when the nuisance is not a
nuisance per se, to wit:

In Estate of Gregoria Francisco v. Court of Appeals, this Court held:

Respondents can not seek cover under the general welfare clause authorizing the abatement of
nuisances without judicial proceedings. That tenet applies to a nuisance per se, or one which affects
the immediate safety of persons and property and may be summarily abated under the undefined
law of necessity. The storage of copra in the quonset building is a legitimate business. By its nature,
it can not be said to be injurious to rights of property, of health or of comfort of the community. If it be
a nuisance per accidensit may be so proven in a hearing conducted for thatpurpose. It is not per sea
nuisance warranting its summary abatement without judicial intervention.

In Pampanga Bus Co., Inc. v. Municipality of Tarlacwhere the appellant-municipality similarly argued
that the terminal involved therein is a nuisance that may be abated by the Municipal Council viaan
ordinance, this Court held: "Suffice it to say that in the abatement of nuisances the provisions of the
Civil Code (Articles 694-707) must be observed and followed. This appellant failed to
do."53 (Emphases supplied; citations omitted)

Aside from the remedy of summary abatement which should be taken under the parameters stated
in Articles 70454(for public nuisances) and 70655 (for private nuisances) of the Civil Code, a private
person whose property right was invaded or unreasonably interfered with by the act, omission,
establishment, business or condition of the property of another may file a civil action to recover
personal damages.56 Abatement may be judicially sought through a civil action therefor57 if the
pertinent requirements under the Civil Code for summary abatement, or the requisite that the
nuisance is a nuisance per se, do not concur. To note, the remedies of abatement and damages are
cumulative; hence, both may be demanded.58

In the present cases, Wong, et al. availed of the remedy of judicial abatement and damages against
Sps.Rana, claiming that both the elevated and cemented subject portionand the subject
backfillingare "nuisances" caused/created by the latter which curtailed their use and enjoyment of
their properties.

With respect to the elevated and cemented subject portion, the Court finds that the same is not a
nuisance per se. By its nature, it is not injurious to the health or comfort of the community. It was
built primarily to facilitate the ingress and egress of Sps. Rana from their house which was
admittedly located on a higher elevation than the subject road and the adjoining Uy and Wong-Ong
properties.Since the subject portion is not a nuisance per se(but actually a nuisance per accidensas
will be later discussed) it cannot be summarily abated. As such, Wong, et al.s demolition of Sps.
Ranas subject portion, which was not sanctioned under the RTCs November 27, 1997
Order,remains unwarranted. Resultantly, damages ought to be awarded in favor of Sps. Rana
particularly that of (a) nominal damages59 for the vindication and recognition of Sps. Ranas right to
be heard before the court prior to Wong, et al.sabatement of the subject portion (erroneously
perceived as a nuisance per se) and (b) temperate damages60 for the pecuniary loss owing to the
demolition of the subject portion, which had been established albeit uncertain as to the actual
amount of loss.
Sps. Ranas entitlement to the above-mentioned damages, however, only stands in theory. This is 1wphi1

because the actual award thereof is precluded by the damage they themselves have caused Wong,
et al. in view of their construction of the subject portion. As the records establish, Sps. Rana, without
prior consultation with Wong, et al. and to their sole advantage, elevated and cemented almost
half61 of the 10-meter wide subject road. As homeowners of Peace Valley Subdivision, Wong, et al.
maintain the rights to the unobstructed use of and free passage over the subject road. By
constructing the subject portion, Sps. Rana introduced a nuisance per accidensthat particularly
transgressed the aforesaid rights. Thus, for the vindication and recognition of Wong, et al.srights,
Sps. Rana should be similarly held liable for nominal damages. Under Article 2216 of the Civil
Code,62courts have the discretion to determine awards of nominal and temperate damages without
actual proof of pecuniary loss, as in this case. Assessing the respective infractions of the parties
herein, the Court finds it prudent to sustain the CAs verdict offsetting the damage caused by said
parties against each other. The Court can, however, only concur with the CA in result since the latter
inaccurately applied,63 as basis for its ruling, the in pari delictoprinciple enunciated in the case of Yu
Bun Guan v. Ong64 (Yu Guan).In said case, the Court discussed the in pari delicto principle with
respect to the subject matter ofinexistent and void contracts, viz.:

Inapplicability of the in Pari Delicto Principle

The principle of in pari delictoprovides that when two parties are equally at fault, the law leaves them
as they are and denies recovery by either one of them. However, this principle does not apply with
respect to inexistent and void contracts. Said this Court in Modina v. Court of Appeals:

"The principle of in pari delicto non oritur actio denies all recovery to the guilty parties inter se. It
applies to cases where the nullity arises from the illegality of the consideration orthe purpose of the
contract. When two persons are equally at fault, the law does not relieve them. The exception to this
general rule is when the principle is invoked with respect to inexistent contracts."65 (emphasis
supplied; citations omitted)

Clearly, no void or inexistent contract is hereinat issue, hence, the Courts disagreement with the
CAs invocation of Yu Guanin this respect.

As for the subject backfillingtouching the perimeter fence of the Uy property, records show that the
said fence was not designed to act as a retaining wall66 but merely to withhold windload and its own
load.67 Both the RTC and the CA found the subject backfilling to have added pressure on the
fence,68 consequently endangering the safety of the occupants of the Uy property, especially
considering the higher elevation of the Rana property. With these findings, the Court thus agrees
with the courts a quothat there is a need for Linda Rana to construct a retaining wall69 which would
bear the weight and pressure of the filling materials introduced on their property. The Court,
however, observed that neither the RTC nor the CA specified in their respective decisions the
backfilled areas which would require the retaining wall. Due to the technicality of the matter, and
considering that the due authenticity and genuineness of the findings/recommendation70 of the OBO
and the accompanying sketch71 thereto were not specifically denied by Sps. Rana,72 the required
retaining wall shall beconstructed in accordance with the said sketch which showed the area
backfilled.

B. Civil Case No. CEB-21296

For Recovery of Property.

Now, with respect to Civil Case No. CEB-21296, the Court finds that the CA erred in affirming the
RTCs dismissal thereof considering that it was determined that Sps. Uy had actually encroached
upon the Rana property to the extent of 2 sq. m.

Settled is the rule that in order that an action for the recovery of property may prosper, the party
prosecuting the same need only prove the identity of the thing and his ownership thereof.73 In the
present cases, the Report74 of the court-appointed commissioner, Atty. Pintor, who conducted a
relocation survey75 of the Rana and Uy properties identified and delineated the boundaries of the two
properties and showed that Sps. Uys perimeter fence intruded on 2 sq. m.of the Rana
property.76 Both the RTC and the CA relied upon the said report; thus, absent any competent
showing that the said finding was erroneous, the Court sees no reason to deviate from the
conclusions reached by the courts a quo. Having sufficiently proven their claim, Sps. Rana are,
therefore entitled to the return of the 2 sq.m. encroached portion. Corollary thereto, compliance by
Linda Rana with the directive in Civil Case No. CEB-20893to build a retaining wall on their property
shall be held in abeyance pending return of the encroached portion.

C. Claims Common to Both Civil Case No. CEB-20893 and Civil Case No. CEB-21296: Malicious
Prosecution of Both Cases, Moral and Exemplary Damages, Attorneys Fees, and Litigation

Expenses.

As a final matter, the Court resolvesthe claims common to both Civil Case No. CEB-20893 and Civil
Case No. CEB-21296, particularly those on malicious prosecution, as well asmoral and exemplary
damages, attorneys fees, and litigation expenses.

As the Court sees it, the filing bythe parties of their respective complaints against each other was
notclearly and convincingly shown to have been precipitated by any maliceor bad faith, sufficient
enough to warrant the payment of damages in favor of either party. As correctly pointed out by the
CA, malicious prosecution, both in criminal and civil cases, requires the presence oftwo (2)
elements, namely: (a) malice; and (b) absence of probable cause. Moreover, there must be proof
that the prosecution was prompted by a sinister design to vex and humiliate a person; and that it was
initiated deliberately knowing that the charge was false and baseless.77 Hence, the mere filing of a
suitwhich subsequently turns out to be unsuccessful does not render a person liable for malicious
prosecution, for the law could not have meant toimpose a penalty on the right to litigate.78 As the
aforementioned elements were not duly proven, the claims for malicious prosecution are hereby
denied.

With respect to the claims for moral damages, although the Court found the parties to have
sustained nominal damages as a result of the other parties acts, an award of moral damages would
nonetheless be improper in this case. Article 2217 of the Civil Code states that "[m]oral damages
include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary
computation, moral damages may be recovered if they are the proximate result of the defendant's
wrongful act for omission." Corollary thereto, Article 2219 of the same code (Article 2219) states that
"[m]oral damages may be recovered in the following and analogous cases: (1) A criminal offense
resulting in physical injuries; (2) Quasi-delicts causing physical injuries; (3) Seduction, abduction,
rape, or other lascivious acts; (4) Adultery or concubinage; (5) Illegal or arbitrary detention or arrest;
(6) Illegal search; (7) Libel, slander or any other form of defamation; (8) Malicious prosecution; (9)
Acts mentioned in Article 309; [and] (10) Actsand actions referred to in Articles 21, 26, 27, 28, 29,
30, 32, 34, and 35."
Here, it was not proven thatthe damage caused by (a) Sps. Rana against Wong, et al., arising from
the elevation and cementing of the subject portion and the subject backfilling, and (b) Sps. Uy
against Sps. Rana, by virtue of their 2 sq. m. encroachment, could be characterized as a form of or
had resulted in physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, or any other similar injury. Neitherwas it
convincingly shown that the present controversies fall within the class of cases enumerated under
Article 2219. Therefore, no moral damages should be awarded.

Similarly, the Court deems that an award of exemplary damages would be inappropriate since these
damages are imposed only "by way of example or correction for the publicgood, in addition to the
moral, temperate, liquidated or compensatory damages."79 Bluntly placed, the Court does not view
the present matters of such caliber. Hence, there is no reason to grant the parties claims for the
same.

Lastly, considering that neither of the parties was able to successfully prove (a) their claims for
malicious prosecution,80 (b) their entitlement to moral and exemplary damages,81 and (c) the
attendance of any of the circumstances under Article 220882 of the Civil Code, their respective claims
for attorneys fees and litigation expensesagainst each other are also denied. WHEREFORE, the
Decision dated July 13, 2005 and the Resolution dated June 18, 2010 in CA-G.R. CV No. 78463 are
SET ASIDE and a new one is entered as follows:

In Civil Case No. CEB-20893:

(a) The awards of damages in favor of each party are OFFSETagainst each other as herein
discussed;

(b) Linda Rana is hereby ORDEREDto build, at her own expense, a retaining wall on the
property covered by TCT No. 124095 in accordance with the sketch of the Office of the
Building Official of Cebu City attached to the records of the case, subject to the condition as
shall be hereunder set; and

(c) All other claims and counterclaims are DISMISSED for lack of legal and factual bases.

In Civil Case No. CEB-21296:

(a) Spouses Rosario and Wilson Uy are DIRECTED to return to Linda Rana the 2-square
meter encroached portion as reflected in the relocation survey conducted by court-appointed
commissioner Atty. Reuel T. Pintor, after which Linda Rana shall be OBLIGED to build the
retaining wall as directed by the Court; and

(b) All other claims and counterclaims are DISMISSED for lack of merit.

SO ORDERED.

ESTELA M. PERLAS-BERNABE
Associate Justice
 Republic of the Philippines
Supreme Court
Manila

THIRD DIVISION

MARTIN PEOSO and G.R. No. 154018

ELIZABETH PEOSO,
Petitioners, Present:

YNARES-SANTIAGO, J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CALLEJO, SR.,
CHICO-NAZARIO, and
NACHURA, JJ.

MACROSMAN DONA, Promulgated:

Respondent. April 3, 2007
x----------------------------------------x

DECISION

AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Review on Certiorari under Rule

45 of the Rules of Court assailing the Resolution [ 1 ] dated March 22,
2002 promulgated by the Court of Appeals (CA) in CA-G.R. SP No.
69472, which dismissed the appeal before it because Martin Peoso and
his mother Elizabeth Peoso (petitioners) failed to submit a written
explanation why service of pleading was not done personally as required
under Section 11 of Rule 13 of the Rules of Court and to pay the
requisite docket fees; and, the CA Resolution [ 2] dated June 3, 2002
which denied petitioners Motion for Reconsideration.

This case originated from a Complaint for Abatement of Nuisance

filed with the Municipal Trial Court (MTC), Branch No. 001, San Jose,
Occidental Mindoro, by Macrosman Dona (respondent) against the
petitioners, which was tried and decided under the Rule on Summary
Procedure. Respondent alleged that he is the owner of a house and lot
located at San Jose, Occidental Mindoro; that in front of the house and
lot is a barangay road where the petitioners constructed their house
against the objections of the respondent; and that the house of the
petitioners constituted a public nuisance.

The petitioners, in their defense, contended that their house was

constructed by the late Praxido Peoso, Martins father and Elizabeths
husband, way ahead before the respondent arrived; that their house
constitutes no public nuisance; that the respondent cannot demand a
right of way; that the continued existence of their house brings no harm
to the respondent; and that the respondent is not authorized to file the
instant Complaint.

On October 1, 1997, the MTC rendered its Decision, in favor of the

petitioners and against the respondent on the ground that respondent has
no cause of action against the petitioners. It ordered the dismissal of the
complaint on the ground that the house in question was constructed on
a public property which may be abated only by the Municipal Mayor,
unless it is specially injurious to a private person; and the respondent
to pay petitioners P10,000.00 by way of attorneys fee. [ 3]

Respondent appealed the Decision of the MTC to the RTC, docketed as

Civil Case No. R-1061.
 On January 2, 2002, the RTC rendered its Decision reversi ng the
MTC. The RTC declared the house erected by the petitioners on a
portion of the road fronting the house of the respondent as a nuisance;
ordered the petitioners to immediately remove the said house at their
own expense; ordered the petitioners to joi ntly and severally pay
plaintiff-appellant the amount of P20,000.00, as and for reasonable
attorneys fees; and, ordered the petitioners to pay respondent P5,000.00
as litigation expenses and to pay the costs of this suit. [ 4]

On January 21, 2002, the RTC denied the petitioners Motion for
Reconsideration.

Petitioners filed a Petition for Review with the CA. On March 22, 2002,
the CA issued a Resolution dismissing the Petition, to wit:
For failure of the petitioners to include in their petition the
required explanation on why personal service upon the
respondent was not resorted to pursuant to Sec. 11, Rule 13 of
the 1997 Rules of Civil Procedure , as amended, the herein
petition is hereby DISMISSED OUTRIGHT. Strict compliance
with this rule is mandated. (Solar Team Entertainment, Inc. v.
Hon. Helen Bautista-Ricafort, et al., 293 SCRA 661).

Moreover, payment of the required docketing and other legal

fees is short by P530.00.
SO ORDERED. [ 5 ] (emphasis in the original)

On May 16, 2002, a Motion for Reconsideration was filed by the

petitioners attaching a Certification dated April 15, 2002 from the
Postmaster that the pleading in question had been actually received by
the respondent as well as a Letter dated February 12, 2002 to the CA
Clerk of Court stating that if the docket fee is insufficient, counsel f or
the petitioners shall remit the balance immediately, if any. But on June
3, 2002, the CA issued another Resolution which states:

Petitioners motion for reconsideration is hereby DENIED, for

lack of merit. Petitioners subsequent compliance with
the RULES does not cleanse the petition of its infirmity.
 Atty. Ma. Conchita Lucero -De Mesa is hereby ordered
to RETURN the two (2) Postal Money Orders for P530.00 to
the petitioners.

SO ORDERED. [ 6 ] (emphasis in the original)

Hence, the instant Petition averring that the CA erred in dismissing the
petition on the following grounds:

A.

FAILURE OF THE PETITIONERS TO INCLUDE IN THEIR

PETITION THE REQUIRED EXPLANATION ON WHY
PERSONAL SERVICE UPON THE RESPONDENT WAS NOT
RESORTED TO PURSUANT TO SECTION 11, RULE 13, OF
THE 1997 RULES OF CIVIL PROCEDURE;

B.

PAYMENT OF THE REQUIRED DOCKETING AND OTHER

LEGAL FEES IS SHORT BY P520.00. [ 7 ]

The petition has merit.

Section 11, Rule 13 of the Rules of Court provides:

Sec. 11. Priorities in modes of service and

filing. Whenever practicable, the service and filing of
pleadings and other papers shall be done personally. Except
with respect to papers emanating from the court, a resort to
other modes must be accompanied by a written explanation
why the service or filing was not done personally. A violation
of this Rule may be cause to consider the paper as not filed.

Jurisprudence holds that the rule that a pleading must be

accompanied by a written explanation why the service or filing was not
done personally is mandatory. [ 8 ]
 However, in Ello v. Court of Appeals, [ 9] the Court defined the
circumstances when the court may exercise its discretionary power
under Section 11 of Rule 13, viz:

However, such discretionary power of the court must be

exercised properly and reasonably, taking into account the
following factors: (1) the practicability of personal service; (2)
the importance of the subject matter of the case or the issues
involved therein; and (3) the prima facie merit of the
pleading sought to be expunged for violation of Section 11.
x x x[10]

Considering the prima facie merit of the pleading involving the issues
whether the petitioners house is a public nuisance; whether the subject
house is constructed on an abandoned road; and whether the alleged
nuisance is specially injurious to respondent; and, considering further
the fact that the MTC and the RTC decisions are conflicting, the CA had
valid grounds to refrain from dismissing the appeal solely on technical
grounds. [ 1 1]
As the Court has expounded in Aguam vs. Court of Appeals: [ 1 2]
The court has the discretion to dismiss or not to dismiss an
appellant's appeal. It is a power conferred on the court, not a
duty. The "discretion must be a sound one, to be exercised in
accordance with the tenets of justice and fair play, ha ving in
mind the circumstances obtaining in each
case." Technicalities, however, must be avoided. The law
abhors technicalities that impede the cause of justice. The
court's primary duty is to render or dispense justice. "A
litigation is not a game of tech nicalities." "Lawsuits unlike
duels are not to be won by a rapier's thrust. Technicality, when
it deserts its proper office as an aid to justice and becomes its
great hindrance and chief enemy, deserves scant consideration
from courts." Litigations must be decided on their merits and
not on technicality. Every party litigant must be afforded the
amplest opportunity for the proper and just determination of
his cause, free from the unacceptable plea of
technicalities. Thus, dismissal of appeals purely on
 technical grounds is frowned upon where the policy of the
court is to encourage hearings of appeals on their merits
and the rules of procedure ought not to be applied in a very
rigid, technical sense; rules of procedure are used only to
help secure, not override substantial justice. It is a far
better and more prudent course of action for the court to
excuse a technical lapse and afford the parties a review of
the case on appeal to attain the ends of justice rather than
dispose of the case on technicality and c ause a grave
injustice to the parties, giving a false impression of speedy
disposal of cases while actually resulting in more delay, if
not a miscarriage of justice. [ 1 3 ] (Emphasis supplied)

In Ginete v. Court of Appeals, [ 1 4] the Court further held:

Let it be emphasized that the rules of procedure should

be viewed as mere tools designed to facilitate the attainment
of justice. Their strict and rigid application, which would
result in technicalities that tend to frustrate rather than
promote substantial justice, must always be eschewed. Even
the Rules of Court reflect this principle. The power to suspend
or even disregard rules can be so pervasive and compelling as
to alter even that which this Court itself has already declared
to be final, as we are now constrained to do in the instant case.

xxxx

The emerging trend in the rulings of this Court is to

afford every party litigant the amplest opportunity for the
proper and just determination of his cause, free from the
constraints of technicalities. Time and again, this Court has
consistently held that rules must not be applied rigidly so
as not to override substantial justice. [ 1 5 ] (Emphasis supplied)

Rules of procedure being designed to facilitate the attainment of

justice, their rigid application resulting in technicalities that tend to
delay or frustrate rather than promote substantial justice, must always
be avoided. [ 16 ]
 In Philippine Amusement and Gaming Corporation
[ 1 7]
v. Angara, this Court held:

While it is true that rules of procedure are intended to

promote rather than frustrate the ends of justice, a nd the swift
unclogging of court dockets is a laudable objective, it
nevertheless must not be met at the expense of substantial
justice. Time and again, this Court has reiterated the doctrine
that the rules of procedure are mere tools intended to facilitat e
the attainment of justice, rather than frustrate it. A strict and
rigid application of the rules must always be eschewed when it
would subvert the primary objective of the rules, that is, to
enhance fair trials and expedite justice. Technicalities should
never be used to defeat the substantive rights of the other
party. Every party-litigant must be afforded the amplest
opportunity for the proper and just determination of his cause,
free from the constraints of technicalities. Thus, the CA should
have refrained from hastily dismissing the petition on
procedural flaws.

In similar cases, the Court ordinarily remands the case to

the CA for proper disposition on the merits. However, in the
present case, considering the issues raised and the fact that the
records of the case are before us, the Court deems it more
appropriate and practical to resolve the present controversy in
order to avoid further delay. [ 1 8 ]

Thus, in view of the foregoing jurisprudential trend to afford every

party litigant the amplest opportunity for a just determination of his
case, free from the severities of technicalities; the prima facie merit of
the pleading; and, especially considering the conflicting rulings of
the MTC and the RTC, the CA erred in dismissing the appeal on mere
technical grounds.

Furthermore, considering the peculiar circumstances of the case, the

shortage of the payment of the docketing fee cannot be used as a grou nd
for dismissing petitioners appeal before the CA. It is undisputed that
they and their counsel are living in a remote town and are not aware of
the exact amount of the lawful fees for petitions for review. Hence, it
is understandable why they place sheer reliance on the Rules of Court,
notably, Section 1 of Rule 42, which only specifies the amount
of P500.00 for the appeal cost in question. Petitioners sent P500.00
with a request from the Clerk of Court for notification of any
insufficiency which will be sent immediately if there is any. The
deficiency in payment was not at all intentional. There was a
willingness to comply should any deficiency occur, as stated in their
Letter to the CA Clerk of Court: Please acknowledge receipt of the
amount and if the amount is insufficient pursuant to Sec. 1, Rule 42 of
the Revised Rules of Court, kindly notify the undersigned and the
balance if any will be immediately sent. Thank you very much. This
clearly shows that the petitioners acted in good faith and substantial ly
complied with the Rules.

In Heirs of Bertuldo Hinog v. Melicor, [ 1 9] the Court held:

Time and again, the Court has held that

the Manchester rule has been modified in Sun Insurance
Office, Ltd. (SIOL) vs. Asuncion which defined the following
guidelines involving the payment of docket fees:

xxxx

Plainly, while the payment of the prescribed docket fee

is a jurisdictional requirement, even its n on-payment at the
time of filing does not automatically cause the dismissal of the
case, as long as the fee is paid within the applicable
prescriptive or reglementary period, more so when the party
involved demonstrates a willingness to abide by the rules
prescribing such payment. Thus, when insufficient filing fees
were initially paid by the plaintiffs and there was no
intention to defraud the government, the Manchester rule
does not apply. [ 2 0 ]
In fine, the CA erred in dismissing the petition for review outright.

In light of Philippine Amusement and Gaming Corporation

v. Angara, [ 2 1] since the records of the case are not before this Court, a
remand of the case to the CA for proper disposition on the merits is
necessary, bearing in mind the judicial policy to resolve the present
controversy with all dispatch in order to avoid further delay.

WHEREFORE, the instant petition is GRANTED and the

assailed Resolutions of the Court of Appeals are REVERSED and SET
ASIDE. The Court of Appeals is directed to REINSTATE the petition
for review, docketed as CA-G.R. SP No. 69472, for further proceedings.

No costs.
SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

WE CONCUR:
 THIRD DIVISION

GUILLERMO M. TELMO, G.R. No. 182567

Petitioner,
Present:

YNARES-SANTIAGO, J.,
Chairperson,
CHICO-NAZARIO,
- versus -
VELASCO, JR.,
NACHURA, and
PERALTA, JJ.

Promulgated:
LUCIANO M. BUSTAMANTE,
Respondent.
July 13, 2009

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

DECISION
NACHURA, J.:

For our consideration is a Petition[1] for Review on Certiorari under Rule 45

of the Rules of Court in relation to Section 27, paragraph 3 of the Ombudsman Act
of 1989 (Republic Act No. 6770). Subject of the Petition is the Decision[2] dated
October 13, 2005 and the Order[3] dated March 17, 2006 of the Office of the Deputy
Ombudsman for Luzon.

This case arose from the Verified Complaint[4] filed by respondent Luciano M.
Bustamante before the Office of the Deputy Ombudsman for Luzon against
petitioner Guillermo Telmo, Municipal Engineer of Naic, Cavite, Danilo Consumo,
Barangay (Brgy.) Chairman, Brgy. Halang, Naic, Cavite, and Elizalde Telmo, a private
individual.

The complaint alleged that respondent is a co-owner of a real property of

616 square meters in Brgy. Halang, Naic, Cavite, known as Lot 952-A and covered
by Transfer Certificate of Title No. T-957643 of the Register of Deeds
of Cavite.Petitioner and Elizalde Telmo (Telmos) are the owners of the two (2)
parcels of land denominated as Lot 952-B and 952-C, respectively, located at the
back of respondents lot. When his lot was transgressed by the construction of
the Noveleta-Naic-Tagaytay Road, respondent offered for sale the remaining lot to
the Telmos. The latter refused because they said they would have no use for it, the
remaining portion being covered by the roads 10-meter easement.

The complaint further alleged that, on May 8, 2005, respondent caused the
resurvey of Lot 952-A in the presence of the Telmos. The resurvey showed that the
Telmos encroached upon respondents lot. Petitioner then uttered, Hanggat ako
ang municipal engineer ng Naic, Cavite, hindi kayo makakapagtayo ng anuman sa
lupa nyo; hindi ko kayo bibigyan ng building permit.

On May 10, 2005, respondent put up concrete poles on his lot. However,
around 7:00 p.m. of the same day, the Telmos and their men allegedly destroyed
the concrete poles. The following day, respondents relatives went to Brgy.
Chairman Consumo to report the destruction of the concrete poles. Consumo told
them that he would not record the same, because he was present when the
incident occurred. Consumo never recorded the incident in the barangay blotter.

Respondent complained that he and his co-owners did not receive any
just compensation from the government when it took a portion of their
property for the construction of the Noveleta-Naic-Tagaytay Road. Worse, they
could not enjoy the use of the remaining part of their lot due to the abusive, Illegal,
and unjust acts of the Telmos and Consumo. Respondent charged the latter
criminallyfor violation of Article 312[5] of the Revised Penal Code and Section
3(e)[6] of Republic Act No. 3019[7]and administrativelyfor violation of Section 4
(a)[8], (b)[9], (c)[10], and (e)[11] of Republic Act No. 6713.[12]

In his Counter-Affidavit,[13] petitioner denied having uttered the words

attributed to him by respondent, and claimed that he only performed his official
duties in requiring an application for a building permit before any structure can be
erected on government property. He said that respondent insisted on enclosing
with barbed wire and concrete posts the lot that already belonged to the national
government, which had now been converted into a national road. He also alleged
that if he allowed the enclosures erected by the respondent, other residents would
be denied ingress to and egress from their own properties.

In his own counter-affidavit, Consumo denied collusion with petitioner in not

recording in the barangay blotter the subject incident. He explained that on May
10, 2005 at around 5:00 p.m., he was summoned by petitioner to intercede,
because the respondent and his men were fencing the subject property. Consumo
obliged, personally saw the fence being built, and observed that even the trucks
owned by petitioner were enclosed therein. When he asked respondent if he had
the necessary permit and the proper barangay clearance to do so, respondents
lawyer, Atty. San Gaspar, replied that there was no need for the permit and
clearance since respondent was just fencing his own property. Thus, Consumo
could not prevent the ongoing fencing, but told respondent and company to wait
for petitioner to decide the matter.

Consumo further alleged that after putting up the fence, respondent and his
companions left without waiting for the arrival of petitioner. When petitioner
arrived, he explained to the people present that the property enclosed by
respondent is owned by the government and that no one is allowed to construct
any fence without a permit from him, as the Municipal Engineer, or from any
building official of the local government of Naic, Cavite. Consumo said that the
residents affected by the fence constructed by respondent were the ones who
pulled out the concrete posts in order to provide access to the national road. These
residents included the petitioner, whose trucks used for delivering sand and hollow
blocks were enclosed and also denied access.

In his Counter-Affidavit,[14] Elizalde Telmo denied having encroached,

occupied or taken possession of respondents property. He claimed that, on May
10, 2005, he was merely an onlooker to the altercation between petitioner and
respondent. He said that petitioner, his brother, insisted that respondent could not
enclose the property in question unless the latter obtains a building permit from
the Office of the Municipal Engineer/Building Official, since it appeared that the
subject property was no longer a property of respondent but was converted into
government property by virtue of the 30-meter road set-back imposed by the
Zoning Ordinance of the Municipality of Naic, Cavite. Elizalde Telmo stated that he
did not offer any resistance to the fencing of the property in question. He observed,
though, that when they learned that petitioner was arriving at the place,
respondent and his companions just left the vicinity.
 Later, petitioner and respondent filed their respective position
papers[15] upon the directive of the Graft Investigating and Prosecuting
Officer. Their position papers reiterated the allegations made in their respective
affidavits earlier submitted.

In the Decision[16] dated October 13, 2005, the Office of the Deputy
Ombudsman for Luzon found petitioner and Danilo Consumo administratively
liable, but dismissed the charge against Elizalde Telmo for lack of jurisdiction over
his person, he being a private individual. The dispositive portion of the Decision
states

WHEREFORE, premises considered, the undersigned investigator

respectfully recommends the following, to wit:

(1) That the administrative complaint against respondent Elizalde

Telmo be DISMISSED for lack of jurisdiction;

(2) That respondent Guillermo Telmo be meted the PENALTY OF FINE

EQUIVALENT TO SIX (6) MONTHS SALARY for violation of Section
4 of Republic Act No. 6713; and

(3) That respondent Danilo Consumo be meted the PENALTY OF FINE

EQUIVALENT TO THREE (3) MONTHS HONORARIA for violation of
Section 4 of Republic Act No. 6713.

SO DECIDED.[17]
 Petitioner filed a Motion for Reconsideration,[18] wherein he elaborated that
he just performed his official duties when he summarily removed the concrete
posts erected by respondent to enclose the property.

In the Order[19] dated March 17, 2006, the Office of the Deputy Ombudsman
for Luzon denied the Motion for Reconsideration for lack of merit.

Hence, this petition anchored on the following grounds:

A. THE HONORABLE DEPUTY OMBUDSMAN FOR LUZON

SERIOUSLY ERRED WHEN HE DECLARED THAT THERE WAS NO VALID
TAKING OF RESPONDENTS LOT BY MEANS OF EXPROPRIATION.

B. THE HONORABLE DEPUTY OMBUDSMAN FOR LUZON

SERIOUSLY ERRED WHEN HE DECLARED THAT PETITIONER SHOULD BE
AUTHORIZED BY THE MUNICIPAL MAYOR OR BY THE COURT TO ABATE
PUBLIC NUISANCE OR NUISANCE PER SE.

C. THE HONORABLE DEPUTY OMBUDSMAN FOR LUZON ERRED

WHEN HE METED THE PENALTY OF FINE EQUIVALENT TO SIX (6) MONTHS
SALARY FOR VIOLATION OF SECTION 4 OF REPUBLIC ACT NO. 6713.[20]

In essence, petitioner contends that the property claimed and enclosed with
concrete posts by respondent was validly taken by the National Government
through its power of eminent domain, pursuant to Executive Order No. 113, as
amended by Executive Order No. 253, creating the Noveleta-Naic-Tagaytay
Road. In this context, petitioner contends that the concrete posts erected by
respondent were a public nuisance under Article 694 (4)[21] of the Civil Code, more
particularly a nuisance per se, which may be summarily abated under Article 699
(3)[22] of the same Code. Petitioner says that as the Municipal Engineer, he is also
the Building Official of Naic, Cavite; and thus, it was well within his authority,
pursuant to Section 214, paragraph two (2) of the National Building Code, to order
the removal of the concrete posts. Petitioner likewise claims that Section 23 of
Revised Philippine Highway Act (Presidential Decree No. 17)[23] mandated him to
remove respondents concrete posts.Petitioner concludes that since he merely
performed his official duties in removing the concrete posts erected by petitioner
from the property, which is already owned by the government, he must be
absolved of any administrative liability.

Instead of filing his comment on the petition, respondent manifested

through counsel that he is no longer interested in pursuing this case, submitting
therewith his Affidavit of Desistance[24] dated December 5, 2007. Respondent
alleged in the affidavit that the administrative charges he lodged against petitioner
were brought about by a misunderstanding between them, which differences have
already been settled. Consequently, this case should now be dismissed.

We disagree.

The desistance of the complainant does not necessarily result in the dismissal
of the administrative complaint because the Court attaches no persuasive value to
a desistance, especially when executed as an afterthought.[25] It should be
remembered that the issue in an administrative case is not whether the complaint
states a cause of action against the respondent, but whether the public officials
have breached the norms and standards of the public service.[26] Considering that
petitioner admitted in his pleadings that he summarily removed the concrete posts
erected by respondent, allegedly within the parameters of his authority as
Municipal Engineer of Naic, Cavite, it is only proper that this case be decided on its
merits rather than on the basis of the desistance of respondent.

It cannot be denied that respondents property was taken by the National

Government thru the Department of Public Works and Highways when it
constructed the Noveleta-Naic-Tagaytay Road. What is not clear from the records
of this case is whether respondents property was taken as part of the national road
itself or only as part of the right-of-way easement therefor. We observe that the
re-survey plan[27] of his property attached by respondent to his complaint and the
survey plan[28] of the Noveleta-Naic-Tagaytay Road submitted by petitioner appear
to be different. Nevertheless, it is evident from the sketch plans that respondent
could not enclose his property because it is now being used by the National
Government. Therefore, whatever cause of action respondent may have in his
claim for just compensation for the taking of his property, the same should be
lodged against the National Government.

While it is settled that respondent does not have the legal right to enclose
the property, we should now determine whether petitioner indeed performed his
official functions properly.

First. Petitioner claims that his act of summarily removing respondents

concrete posts was authorized under the National Building Code (Presidential
Decree No. 1096). The provision he cites correctly pertains to Section 215, which
reads

Sec. 215. Abatement of Dangerous Buildings.When any building or

structure is found or declared to be dangerous or ruinous, the Building
Official shall order its repair, vacation or demolition depending upon the
decree of danger to life, health, or safety. This is without prejudice to
further action that may be taken under the provisions of Articles 482 and
694 to 707 of the Civil Code of the Philippines.

To better understand this provision, we refer to Section 214 of the same law,
which defines what are dangerous and ruinous buildings or structures susceptible
of abatement. It provides
 Sec. 214. Dangerous and Ruinous Buildings or
Structures. Dangerous buildings are those which are herein declared as
such or are structurally unsafe or not provided with safe egress, or which
constitute a fire hazard, or are otherwise dangerous to human life, or
which in relation to existing use, constitute a hazard to safety or health
or public welfare because of inadequate maintenance, dilapidation,
obsolescence, or abandonment, or which otherwise contribute to the
pollution of the site or the community to an intolerable degree.

A careful reading of the foregoing provisions would readily show that they
do not apply to the respondents situation. Nowhere was it shown that the concrete
posts put up by respondent in what he believed was his and his co-owners property
were ever declared dangerous or ruinous, such that they can be summarily
demolished by petitioner.

What is more, it appears that the concrete posts do not even fall within the
scope of the provisions of the National Building Code. The Code does not expressly
define the word building. However, we find helpful the dictionary definition of the
word building, viz:

[A] constructed edifice designed usually covered by a roof and

more or less completely enclosed by walls, and serving as a dwelling,
storehouse, factory, shelter for animals, or other useful structure
distinguished from structures not designed for occupancy (as fences or
monuments) and from structures not intended for use in one place (as
boats or trailers) even though subject to occupancy.[29]

The provisions of the National Building Code would confirm that building as
used therein conforms to this definition. Thus, applying the statutory construction
principle of ejusdem generic,[30] the word structure should be construed in the
context of the definition of the word building. The concrete posts put up by
respondent on the property are not properly covered by the definition of the word
building nor is it embraced in the corresponding interpretation of the word
structure.

Second. Petitioner contends that respondents concrete posts were in the

nature of a nuisance per se, which may be the subject of summary
abatement sans any judicial proceedings. Again, we disagree.

A nuisance per se is that which affects the immediate safety of persons and
property and may be summarily abated under the undefined law of
necessity.[31] Evidently, the concrete posts summarily removed by petitioner did
not at all pose a hazard to the safety of persons and properties, which would have
necessitated immediate and summary abatement. What they did, at most, was to
pose an inconvenience to the public by blocking the free passage of people to and
from the national road.

Third. Petitioner likewise maintains that his authority to perform the assailed
official act sprang from Section 23 of the Revised Philippine Highway Act. He posits
that this provision is particularly implemented by Department Order No.
52,[32]Series of 2003 of the Department of Public Works and Highways for the
Removal of Obstructions and Prohibited Uses within the Right-of-Way of National
Roads.

Department Order No. 52 directs all District Engineers to immediately

remove or cause the removal of all obstructions and prohibited uses within the
right-of-way of all national roads in their respective jurisdictions. These
obstructions and prohibited uses include, among others, all kinds of private,
temporary and permanent structures, such as buildings, houses, shanties, stores,
shops, stalls, sheds, posts, canopies, billboards, signages, advertisements, fences,
walls, railings, basketball courts, garbage receptacles, and the like. The Department
Order requires the District Engineers to issue notices to the concerned persons to
remove the obstructions and prohibited uses within the right-of-way, and shall
follow through prompt compliance with these notices and full implementation of
the Order. It further provides that appropriate sanctions will be taken against those
who fail to comply with its provisions.

Gauging the action of petitioner based on the guidelines set by Department

Order No. 52, from which he claims his authority, we cannot but conclude that
petitioner went beyond the scope of his official power because it is the concerned
District Engineer of the Department of Public Works and Highways who should have
ordered respondent to remove the concrete posts. The petitioner failed to show
that he was duly authorized by the District Engineer to implement the Department
Order in Naic, Cavite. More importantly, even assuming that petitioner had been
duly authorized to order the removal of the concrete posts of respondent, he failed
to prove that he issued the required notice to respondent to remove the said
structures before he did the removal himself. Note that petitioner, in fact, admitted
in his pleadings that he summarily removed the said posts.

The Revised Philippine Highway Act and Department Order No. 52 do not
expressly provide for the administrative sanction to be taken against public officials
violating their provisions. Hence, we must refer to the Uniform Rules on
Administrative Cases in the Civil Service. We believe that the administrative offense
committed by petitioner through the questioned act was only Discourtesy in the
Course of Official Duties, which is a light offense under Rule IV, Section 52 of the
said Rules. The penalties imposable for such an offense are a reprimand for the first
offense, a suspension from 1 day to 30 days for the second offense, and dismissal
from public service for the third offense. Since this appears to be petitioners first
offense, his action warrants only a REPRIMAND.

WHEREFORE, the Decision dated October 13, 2005 and the Order dated
March 17, 2006 of the Office of the Deputy Ombudsman for Luzon finding
petitioner Guillermo M. Telmo, Municipal Engineer of Naic, Cavite, administratively
culpable for violation of Section 4 of Republic Act No. 6713, imposing upon him the
penalty of fine equivalent to his six 6-month salary, must be MODIFIED. Guillermo
M. Telmo is instead found administratively guilty of DISCOURTESY IN THE COURSE
OF OFFICIAL DUTIES and is hereby REPRIMANDED. Costs against petitioner.

SO ORDERED.
FIRST DIVISION

JAIME S. PEREZ, both in his personal G.R. No. 184478

and official capacity as Chief,
Marikina Demolition Office, Present:
Petitioner,
CORONA, C.J.,
Chairperson,
LEONARDO-DE CASTRO,
- versus - BERSAMIN,
VILLARAMA, JR., and
PERLAS-BERNABE, JJ.

SPOUSES FORTUNITO L. MADRONA Promulgated:

and YOLANDA B. PANTE,
Respondents.
March 21, 2012
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION
VILLARAMA, JR., J.:
 Before this Court is a petition for review on certiorari under Rule 45 of
the 1997 Rules of Civil Procedure, as amended, seeking to set aside the March 31,
2008 Decision[1] and September 10, 2008 Resolution[2] of the Court of Appeals (CA)
in CA-G.R. CV. No. 83675. The CA affirmed in toto the Decision[3] of the Regional
Trial Court (RTC) of Marikina City, Branch 192 granting respondents prayer for
injunction against petitioner.

The antecedents follow:

Respondent-spouses Fortunito Madrona and Yolanda B. Pante are registered

owners of a residential property located in Lot 22, Block 5, France
Street corner Italy Street, Greenheights Subdivision, Phase II, Marikina City and
covered by Transfer Certificate of Title No. 169365[4] of the Registry of Deeds of
Marikina. In 1989, respondents built their house thereon and enclosed it with a
concrete fence and steel gate.

In 1999, respondents received the following letter dated May 25, 1999 from
petitioner Jaime S. Perez, Chief of the Marikina Demolition Office:
Owner Judge F.L. Madrona

Lot 22 B. 5 Phase II

Green Heights[, Concepcion,] Marikina City

G./ Gng. F.L. Madrona[:]

Ito po ay may kinalaman sa bahay/istruktura na inyong itinayo sa (naturang

lugar), Marikina, Kalakhang Maynila.

Bakod umusli sa Bangketa

Ang naturang pagtatayo ng bahay/istruktura ay isang paglabag sa umiiral na

batas/programa na ipatutupad ng Pamahalaang Bayan ng Marikina na nauukol sa:

[] PD 1096

(National Building Code of the Philippines)

 [ ] PD 772

(Anti-Squatting Law)

[] Programa sa Kalinisan at Disiplina sa Bangketa

[ ] RA 7279

(Urban Development and Housing Act of 1992)

[ ] PD 296

(Encroachment on rivers, esteros, drainage channels and other

waterways)

[] RA 917 as amended by Section 23, PD. No. 17, DO No. 4

Series of 1987

(Illegally occupied/constructed improvements within the road

right-of-way)

Dahil po dito, kayo ay binibigyan ng taning na Pitong (7) araw simula sa pagkatanggap ng
sulat na ito para kusang alisin ang inyong istruktura. Ang hindi ninyo pagsunod sa ipinag-
uutos na ito ay magbubunsod sa amin upang gumawa ng kaukulang hakbang na naa[a]yon
sa itinatadhana ng Batas.

Sa inyong kaalaman, panuntuan at pagtalima.

Lubos na gumagalang,

(Sgd.)

JAIME S. PEREZ

Tagapamahala

Marikina Demolition Office[5]

As response, respondent Madrona sent petitioner a three-page letter[6] dated June

8, 1999 stating that the May 25, 1999 letter (1) contained an accusation libelous in
nature as it is condemning him and his property without due process; (2) has no
basis and authority since there is no court order authorizing him to demolish their
structure; (3) cited legal bases which do not expressly give petitioner authority to
demolish; and (4) contained a false accusation since their fence did not in fact
extend to the sidewalk.

On June 9, 1999, respondents received a letter[7] from petitioner requesting them

to provide his office a copy of the relocation survey on the subject
property. Respondents, however, did not oblige because it was as if petitioner was
fishing evidence from them.

More than a year later or on February 28, 2001, petitioner sent another
letter[8] with the same contents as the May 25, 1999 letter but this time giving
respondents ten days from receipt thereof to remove the structure allegedly
protruding to the sidewalk. This prompted respondents to file a complaint[9] for
injunction before the Marikina City RTC on March 12, 2001.

In respondents injunction complaint, they alleged that (1) petitioners letters made
it appear that their fence was encroaching on the sidewalk and directed them to
remove it, otherwise he would take the corresponding action; (2) petitioners threat
of action would be damaging and adverse to respondents and appears real, earnest
and imminent; (3) the removal of their fence, which would include the main gate,
would certainly expose the premises and its occupants to intruders or third
persons; (4) petitioner has no legal authority to demolish structures in private
properties and the laws he cited in his letters do not give him any authority to do
so; (5) respondents enjoy the legal presumption of rightful possession of every inch
of their property; (6) if petitioner accuses them of erroneous possession, he should
so prove only through the proper forum which is the courts; (7) their fence is beside
the sidewalk and the land on which it stands has never been the subject of
acquisition either by negotiation or expropriation from the government; (8)
petitioners intended act of demolition even in the guise of a road right of way has
no factual or legal basis since there is no existing infrastructure project of the
national government or Marikina City government; and (9) petitioners letter and
his intended act of demolition are malicious, unfounded, meant only to harass
respondents in gross violation of their rights and in excess and outside the scope of
his authority, thereby rendering him accountable both in his personal and official
capacity.

Respondents likewise sought the issuance of a temporary restraining order (TRO)

and a writ of preliminary injunction to enjoin petitioner and all persons acting
under him from doing any act of demolition on their property and that after trial,
the injunction be made permanent. They also prayed for moral and exemplary
damages and attorneys fees.

On March 14, 2001, petitioner was served the corresponding summons.[10]

On March 16, 2001, the RTC issued a TRO against petitioner.[11]

On March 29, 2001, petitioner filed an Urgent Ex Parte Motion for Extension to File
Answer[12] until April 13, 2001. It appears however that petitioners counsel failed
to file an Answer within the extended period requested. Thus, on motion[13] of
respondents, petitioner was declared in default on July 13, 2001.[14]

On July 25, 2001, petitioner filed a Motion to Lift Order of Default (with Ex-Parte
Motion to Admit Answer and Notice Entry of Appearance).[15] According to
petitioners new counsel, an answer was not filed due to the former counsels
voluminous work load as lone lawyer in the City Legal Office.

On December 10, 2001, the RTC issued an Order[16] denying the motion to lift the
order of default. Aside from finding that the motion failed to include a notice of
hearing, the RTC also held that the alleged cause of delay is not excusable as
voluminous work load of the counsel cannot justify the disregard of court processes
or failure to abide by the period fixed by the rules and since the delay consisted not
only a few days but over a hundred and three days. Petitioner moved to reconsider
the order but the same was denied by the RTC in its March 6, 2002 Order.[17]

Petitioner thereafter filed a petition for certiorari[18] before the CA assailing the
default order. Thus, on April 18, 2002, the RTC issued an order suspending the
proceedings of the injunction case until such time when the Petition for Certiorari
shall have been disposed of with finality.[19]

On August 20, 2002, the CA rendered a decision[20] dismissing the petition for
certiorari for lack of merit. Petitioner moved to reconsider the appellate courts
decision, but the motion was denied by Resolution[21] dated January 30, 2003.

On September 15, 2003, the RTC issued an Order[22] dismissing the injunction
complaint without prejudice. It held that respondents have not instituted any
action before th[e] Court showing that they are still interested in further
prosecuting th[e] case and [i]n accordance with Section 3, Rule 17 of the Rules of
Court, the Court is constrained to dismiss the complaint for failure of [respondents]
to prosecute their complaint for an unreasonable length of time. However, upon
motion of respondents, the dismissal order was set aside and the complaint was
reinstated by Order[23] dated December 3, 2003. The RTC agreed with the
observation of respondents that it was the court which suspended the proceedings
in the injunction case pending final disposition of the petition for certiorari before
the CA, and when the RTC issued the dismissal order, there was yet no entry of
judgment from the CA and so it cannot be said that the petition was already
disposed of with finality. Respondents were then allowed to present their
evidence ex parte before the branch clerk of court.

On July 27, 2004, the RTC rendered a Decision[24] in favor of

respondents. The fallo of the RTC decision reads:
WHEREFORE, Judgment is hereby rendered in favor of the plaintiffs. As prayed for,
defendant Jaime S. Perez, Chief of the Demolition Office of Marikina City, or any person
 acting for and in his behalf as well as the successors to his office, is permanently enjoined
from performing any act which would tend to destroy or demolish the perimeter fence
and steel gate of the plaintiffs property situated at Lot 22, Block 5, France
Street corner Italy Street, Phase II, Greenheights Subdivision, Concepcion, Marikina City.

Defendant is further ordered to pay the amount of Twenty Thousand (P20,000.00) Pesos
as attorneys fees and Five Thousand (P5,000.00) Pesos for the costs of suit.[25]

The RTC held that respondents, being lawful owners of the subject property,
are entitled to the peaceful and open possession of every inch of their property and
petitioners threat to demolish the concrete fence around their property is
tantamount to a violation of their rights as property owners who are entitled to
protection under the Constitution and laws. The RTC also ruled that there is no
showing that respondents fence is a nuisance per se and presents an immediate
danger to the communitys welfare, nor is there basis for petitioners claim that the
fence has encroached on the sidewalk as to justify its summary demolition.

Petitioner appealed the RTC decision to the CA. On March 31, 2008, the
appellate court rendered the assailed decision affirming the RTC decision.

Hence this petition based on the following grounds:

I.

THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN AFFIRMING THE ACTION

OF THE LOWER COURT IN REINSTATING/REVIVING THE COMPLAINT FILED BY THE
RESPONDENTS.

II.

THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN AFFIRMING THE RULING

OF THE LOWER COURT THAT THE RESPONDENTS ARE ENTITLED TO PERMANENT
INJUNCTION, THEREBY RESTRAINING THE PETITIONER OR ANYONE ACTING FOR AND ON
HIS BEHALF FROM CARRYING OUT THE THREATENED DEMOLITION OF THEIR PERIMETER
FENCE AND STEEL GATE.

III.
 THE COURT OF APPEALS COMMITTED A REVERSIBLE [ERROR] IN AFFIRMING THE RULING
OF THE LOWER COURT ORDERING THE PETITIONER TO PAY THE RESPONDENTS THE
AMOUNTS OF TWENTY THOUSAND PESOS (P20,000.00) AS ATTORNEYS FEES AND FIVE
THOUSAND PESOS (P5,000.00) AS COSTS OF SUIT.[26]

Essentially, the issues to be resolved in the instant case are: (1) Did the trial court
err in reinstating the complaint of respondents? (2) Are the requisites for the
issuance of a writ of injunction present? and (3) Is petitioner liable to pay attorneys
fees and costs of suit?

Petitioner argues that there was express admission of negligence by

respondents and therefore, reinstatement of their dismissed complaint was not
justified.

We disagree.

A perusal of the respondents motion for reconsideration[27] of the order of

dismissal reveals that there was no admission of negligence by respondents, either
express or implied. Respondents only contended that (1) they were under the
impression that it would be the RTC which would issue the order to continue the
proceedings once it considers that the petition before the CA had already been
disposed of with finality, and (2) their counsels records do not show that the CA
had already issued an entry of judgment at the time the dismissal order was
issued. They also only stated that they followed up with the CA the issuance of the
entry of judgment but they were just told to wait for its delivery by mail. Petitioners
imputation that respondents expressly admitted negligence is therefore clearly
unfounded.

Additionally, as correctly found by both the RTC and the CA, it did not appear
that respondent lost interest in prosecuting their case nor was their counsel
negligent in handling it. Accordingly, there was no basis for the dismissal order and
reinstatement of respondents complaint was justified.
 As to the propriety of the issuance of the writ of injunction, petitioner claims
that the requisites therefor are not present in the instant case. Petitioner contends
that service of a mere notice cannot be construed as an invasion of a right and only
presupposes the giving of an opportunity to be heard before any action could be
taken. He also claims that it is clear from the records of the case that respondents
concrete fence was constructed on a part of the sidewalk in gross violation of
existing laws and ordinance and thus, they do not have absolute right over the
same. According to petitioner, the encroachment is clearly apparent in the Sketch
Plan of the government geodetic engineer as compared to the Location Plan
attached to respondents complaint. He likewise contends that the clearing of the
sidewalks is an infrastructure project of the Marikina City Government and cannot
be restrained by the courts as provided in Presidential Decree No. 1818.[28] Lastly,
petitioner points out that the trial court should not have merely relied on the
testimonies of respondents alleging that his men were already in the subdivision
and destroying properties on other streets to prove that there was urgent necessity
for the issuance of the writ.

We disagree.

For injunction to issue, two requisites must concur: first, there must be a
right to be protected and second, the acts against which the injunction is to be
directed are violative of said right.[29] Here, the two requisites are clearly present:
there is a right to be protected, that is, respondents right over their concrete fence
which cannot be removed without due process; and the act, the summary
demolition of the concrete fence, against which the injunction is directed, would
violate said right.

If petitioner indeed found respondents fence to have encroached on the

sidewalk, his remedy is not to demolish the same summarily after respondents
failed to heed his request to remove it. Instead, he should go to court and prove
respondents supposed violations in the construction of the concrete fence. Indeed,
unless a thing is a nuisance per se, it may not be abated summarily without judicial
intervention.[30] Our ruling in Lucena Grand Central Terminal, Inc. v. JAC Liner, Inc.,
on the need for judicial intervention when the nuisance is not a nuisance per se, is
well worth mentioning. In said case, we ruled:
Respondents can not seek cover under the general welfare clause authorizing the
abatement of nuisances without judicial proceedings. That tenet applies to a nuisance per
se, or one which affects the immediate safety of persons and property and may be
summarily abated under the undefined law of necessity (Monteverde v. Generoso, 52
Phil. 123 [1982]). The storage of copra in the quonset building is a legitimate business. By
its nature, it can not be said to be injurious to rights of property, of health or of comfort
of the community. If it be a nuisance per accidens it may be so proven in a hearing
conducted for that purpose. It is not per se a nuisance warranting its summary abatement
without judicial intervention. [Underscoring supplied.]

In Pampanga Bus Co., Inc. v. Municipality of Tarlac where the appellant-

municipality similarly argued that the terminal involved therein is a nuisance that may be
abated by the Municipal Council via an ordinance, this Court held: Suffice it to say that in
the abatement of nuisances the provisions of the Civil Code (Articles 694-707) must be
observed and followed. This appellant failed to do.[31]

Respondents fence is not a nuisance per se. By its nature, it is not injurious to the
health or comfort of the community. It was built primarily to secure the property
of respondents and prevent intruders from entering it. And as correctly pointed out
by respondents, the sidewalk still exists. If petitioner believes that respondents
fence indeed encroaches on the sidewalk, it may be so proven in a hearing
conducted for that purpose. Not being a nuisance per se, but at most a nuisance per
accidens, its summary abatement without judicial intervention is unwarranted.

Regarding the third issue, petitioner argues that he was just performing his duties
and as public officer, he is entitled to the presumption of regularity in the
performance of his official functions. Unless there is clear proof that he acted beyond
his authority or in evident malice or bad faith, he contends that he cannot be held
liable for attorneys fees and costs of suit.
Respondents, for their part, counter that the presumption of regularity has been
negated by the fact that despite their reply to the first notice, which put petitioner
on notice that what he was doing was ultra vires, he still reiterated his earlier
demand and threat of demolition. Having been warned by respondents that his
acts were in fact violations of law, petitioner should have been more circumspect
in his actions and should have pursued the proper remedies that were more in
consonance with the dictates of due process. Respondents further pray for moral
damages for the serious anxieties and sleepless nights they suffered and exemplary
damages to serve as an example to other public officials that they should be more
circumspect in the performance of their duties.

We agree with respondents.

As respondents were forced to file a case against petitioner to enjoin the impending
demolition of their property, the award of attorneys fees and costs of suit is
justified. Clearly, respondents wanted to settle the problem on their alleged
encroachment without resorting to court processes when they replied by letter
after receiving petitioners first notice. Petitioner, however, instead of considering
the points raised in respondents reply-letter, required them to submit the
relocation plan as if he wants respondents to prove that they are not encroaching
on the sidewalk even if it was he who made the accusation of violation in the first
place. And when he did not get the proof he was requiring from respondents, he
again sent a notice with a threat of summary demolition. This gave respondents no
other choice but to file an injunction complaint against petitioner to protect their
rights.

With regard to respondents claim for moral damages, this Court rules that
they are entitled thereto in the amount of P10,000.00 pursuant to Article
2217[32] of the Civil Code. As testified to by respondents, they suffered anxiety and
sleepless nights since they were worried what would happen to their children who
were left by themselves in their Marikina residence while they were in Ormoc City
if petitioner would make real his threat of demolition on their fence.

We likewise hold that respondents are entitled to exemplary damages in the

amount of P5,000.00 to serve as an example to other public officials that they
should be more circumspect in the performance of their duties.

WHEREFORE, the March 31, 2008 Decision and September 10, 2008 Resolution of
the Court of Appeals in CA-G.R. CV. No. 83675 are AFFIRMED with
MODIFICATION. Petitioner Jaime S. Perez, Chief of the Demolition Office of
Marikina City is ORDERED to pay respondent Spouses Fortunito L. Madrona and
Yolanda B. Pante moral damages in the amount of P10,000.00 and exemplary
damages in the amount of P5,000.00.

SO ORDERED.

MARTIN S. VILLARAMA, JR.

Associate Justice

WE CONCUR:
 Republic of the Philippines
Supreme Court
Manila

FIRST DIVISION

SPOUSES RICARDO HIPOLITO, JR. G.R. No. 174143

and LIZA HIPOLITO,
Petitioners, Present:

CORONA, C.J., Chairperson,

- versus - LEONARDO-DE CASTRO,
BERSAMIN,
DEL CASTILLO, and
TERESITA CINCO, VILLARAMA, JR., JJ.
CARLOTA BALDE CINCO
and ATTY. CARLOS CINCO, Promulgated:
Respondents. November 28, 2011
x-----------------------------------------------------------------
--x

DECISION

DEL CASTILLO, J.:

Findings of fact by administrative agencies are generally accorded great respect, if

not finality, by the courts[1] by reason of the special knowledge and expertise of said
administrative agencies over matters falling under their jurisdiction.

Challenged in this Petition for Review on Certiorari[2] are the May 19, 2006
Decision[3] and August 15, 2006 Resolution[4] of the Court of Appeals (CA) in CA-G.R.
SP No. 89783 which dismissed petitioners Petition for Review and denied their Motion for
Reconsideration respectively. Said assailed CA Decision which affirmed the February 28,
2005 Resolution[5] of the Office of the President (OP), in O.P. Case No. 04-F-262,
states, viz:
In fine, we hold that public respondent Office of the President, in
affirming the resolution of the Secretary of the DPWH which sustained the
resolution and the demolition order of the OBO, committed no grave abuse of
discretion, the same being supported by evidence and having been issued in
accordance with law and jurisprudence.

WHEREFORE, the petition is DISMISSED. The assailed Resolution

dated February 28, 2005 of the Office of the President of the Philippines, issued
through the Deputy Executive Secretary for Legal Affairs in O.P. Case No. 04-
F-262, is AFFIRMED.

SO ORDERED.[6]

Petitioners beseech this Court to reverse and set aside said Decision and
consequently, to alter a string of consistent Resolutions issued by the OP in the said O.P.
Case No. F-262, the Secretary of the Department of Public Works and Highways (DPWH)
in NBC Case No. 17-03-I-MLA,[7] and the Office of the Building Official (OBO) of the
City of Manila in NBC Case No. NG-2002-06.[8]

Factual Antecedents

Petitioner-spouses Ricardo Hipolito, Jr. and Liza Hipolito (petitioners) allege that
on June 15, 1989, Edeltrudis Hipolito y Mariano (Edeltrudis)[9] entered into an
agreement[10] with Francisco Villena[11] (now deceased) to rent a portion of the property
located at 2176 Nakar Street, San Andres Bukid, Manila and to construct an apartment-
style building adjacent to the existing house thereon. The contract was for a period of 20
years. Pursuant to the agreement, Edeltrudis built a three-storey apartment building without
securing a building permit. Petitioners inherited the apartment building upon the death of
Edeltrudis.

In 2002 or 13 years after the execution of the agreement, petitioners and the heirs of
Francisco Villena, all residing in the property, were informed that respondent Atty. Carlos
D. Cinco (Atty. Cinco) acquired the subject property through a deed of sale sometime in
1976.
 On June 17, 2002, herein respondents Atty. Cinco, Teresita Cinco and Dr. Carlota
Balde Cinco (respondents) filed with the OBO a verified request[12] for structural inspection
of an old structure located at 2176 Nakar Street, San Andres Bukid, Manila.

Acting on the request, Building Inspector Engineer Leonardo B. Rico (Engr. Rico)
conducted an initial inspection. In his memorandum Engr. Rico reported that two old and
dilapidated buildings made of wooden materials were found in the premises and
recommended that the matter be referred to the Committee on Buildings (Committee) for
further appropriate action and disposition.

Deemed as a petition for condemnation/abatement pursuant to the National

Building Code (NBC) and its Implementing Rules and Regulations, the verified request of
the respondents was referred to the Committee for Hearing/ Investigation.

With prior notices to the parties and the tenants, three hearings were subsequently
held from August 12, 2002 to September 20, 2002 for purposes of resolving the focal issue
of the structural stability, architectural presentability, electrical and fire safety aspect to
determine [whether] or not the subject buildings are still safe for continued
occupancy.[13] On September 20, 2002, Victoria Villena, wife and heir of Francisco Villena
and owner of one of the two buildings, filed a counter manifestation questioning
respondents personality to file the petition for condemnation, and refuting the technical
evaluation reports of Engr. Rico and respondents commissioned engineer. Whereupon, the
Committee was constrained to schedule an ocular inspection of the subject buildings on
October 7, 2002. A report on the ocular inspection conducted was thereafter submitted
through a Memorandum[14] dated October 8, 2002, which states:

x x x The subject structure is a 3-storey at the rear portion and Two (2)[-] storey
at the front made up of wooden materials with G.I. sheet roofings.

II. Findings:

1. Corrugated G.I. sheet roofings and its accessories incurred extensive

deterioration/[dilapidation] due to weathering.

2. Ceiling boards [bulging] attributed to water leaks from defective

roofing.
 3. Exterior and interior wooden boards deteriorated.

4. Doors/windows including its jambs deteriorated/[dilapidated].

5. No provisions of firewall on the sides abutting private lot.

6. Rafters, purlins, and girts deteriorated due to neglect of maintenance.

7. Vibrations were felt on the wooden flooring when exerting wt. An

indication that its support suffered [material] fatigue due to wear and tear
and termite infestation.

8. Wooden columns incurred deterioration/[dilapidation] due to

weathering and termite infestation.

9. Open wiring installation/fire hazard.

10. With notices of condemned installation No. 2K3-62042 EPM issued

by OIC, City Electrical Division, DEPW.

11. Inadequate water supply and drainage system.

12. Outmoded T & G due to neglect of maintenance.

13. Inadequate sanitary/plumbing installation.

III. RECOMMENDATION:

From the foregoing, the subject buildings [appear] to have incurred extensive
deterioration/[dilapidation] [attributed] mainly to long weather exposure, poor
maintenance and termite infestation on its architectural and structural
components by 60-80% which constitutes an Architectural eyesore, structurally
unsafe as well as fire and electrical hazard thereby endangering the life, safety,
health and welfare [of] the general public specifically the tenants thereat, hence,
it is strongly recommended that the subject building be declared dangerous and
ruinous in pursuance of Sec. 214 and 215 and Rules VII and Rule VIII of the
Implementing Rules and Regulations of P.D. 1096.

Ruling of the Office of the Building Official

 In a Resolution[15] dated March 26, 2003, the OBO declared the buildings dangerous
and ruinous, and recommended their demolition, to wit:

xxxx

On the basis of the ocular inspection report submitted by the Committee

on Buildings and the findings of the OIC, City Electrical Division DEPW which
form part of this resolution, it appearing that the subject structures incurred an
extensive degree of [dilapidation]/deterioration by 60-80% attributed mainly to
long weather exposure, termite infestation and neglect of maintenance on its
architectural and structural component which constitute architectural eyesore,
structurally unsafe as well as electrical hazards thereby endangering the life,
health property and welfare of the general public particularly the tenants thereat
[sic].

Such sorry condition of said structures exist to the extent that remedial/
rehabilitation which is no longer practical and economical as it would entail/
necessitate a total overdone thereof [sic].

WHEREFORE, premises considered the Committee on Buildings and

in consonance with the findings of the OIC, City Electrical Division DEPW the
subject buildings are hereby found and declared Dangerous and Ruinous and
strongly recommending the issuance of the corresponding Demolition Order in
pursuance of Section[s] 214 and 215 of the National Building Code and Rule
VII and VIII of its Implementing Rules and Regulations further directing the
tenants/ occupants thereat to vacate the premises within fifteen (15) days from
receipt hereof to pave the way for its peaceful and orderly [d]emolition activity.

SO ORDERED.

A Demolition Order[16] addressed to the respondents was accordingly issued on

even date with petitioners and their tenants duly furnished with a copy thereof.

Petitioners thus appealed[17] to the DPWH.

Ruling of the Department of Public Works and Highways

 In their appeal, petitioners prayed for the reversal of the Resolution of the OBO and
for the setting aside of the Demolition Order on the ground that same were anomalously
issued. They likewise contended that respondents petition for condemnation was actually
an attempt to circumvent their rights as builders in good faith. Petitioners prayed for a
separate inspection of the two buildings by an impartial body.

Thus, another ocular inspection was conducted by the Inspectorate Team of the
DPWH to determine the actual physical condition of the subject buildings. The
Inspectorate Team reported thus:

There are two (2) Buildings/Structures subject of this appeal. For proper
identification of the two (2) Storey Residential Building located at front No.
2176 Nakar Street, San Andres Bukid, is designated as Building I while the
Three (3) Storey Residential Building located at the rear portion is designated
as [B]uilding 2.

Building 1

Building I is pre-war vintage (t)wo (2)[-](s)torey structure generally made of

wooden materials. Corrugated G.I. roofing sheets and its accessories are
extensively corroded and deteriorated due to long existence, weather exposure
and improper maintenance. Gutters and [down spouts] are already missing.
Interior and exterior wooden board partitions are deteriorated by about eighty
percent (80%). Roof eaves and media agues are deteriorated and some wooden
members are ready to collapse. Doors and windows including [their] jambs are
deteriorated by about eighty percent (80%). Wooden stair[s] leading to second
floor is rotten and deteriorated due to long existence and termite infestation.
Wooden board floorings are sagging and vibration can be felt when walking on
it. Plywood ceiling boards are deteriorated by about eighty percent (80%).

The wooden roof framing parts such as rafters, purlins, and girts are rotten.
Majority of the wooden posts are termite infested and deteriorated. The wooden
beams and floor joists are noted to have incurred deterioration. Vibration is felt
at the second floor wooden flooring when walked upon, an indication that its
wooden structural supports show signs of material fatigue due to wear and tear
and termite infestation. Structural components of the structure were observed to
have deteriorated by about seventy five percent (75%).

Sanitary/Plumbing fixtures and systems within the building are noted

outmoded, inadequate and not properly maintained. Inadequate water supply
and drainage system within the building is noted. The comfort room is useable
and functioning but is not properly ventilated and unsanitary.

The electrical wiring insulation shows sign of brittleness due to excessive

exposure to ambient heat, moisture and time element. Excessive octopus
connections and dangling of wires/extensions [sic] cords are observed. Some
switches and convenience outlets are detached and defective.
Junction/pullboxes are not properly covered thus exposing electrical wiring
connections. Some electrical wiring installations are attached to deteriorated
parts of the building. The electrical wiring installations are already old, not
properly maintained and inadequate to conform to the rules and regulations of
the Philippine Electrical Code (PEC).

Building 2

Building 2 is a three (3)[-](s)torey structure located at the back of the Building

I, and the usage is purely for residential purposes. The building is constructed
[out] of wooden materials, corrugated G.I. roofing sheets and plain G.I. sheets
for its accessories. The said building was constructed sometime in 1989,
however, the construction is not in accordance with the standard and the
requirements of the National Building Code (PD 1096). Corrugated G.I. roofing
sheets are corroded and deterioration is about seventy percent (70%). [Down
spouts] and gutters are no longer in place. Interior and exterior wooden board
sidings have incurred about sixty percent (60%) deterioration. Some rooms have
no proper ventilation due to excessive partitioning. Eaves [have] no ceiling.
Wooden board floorings are sagging and vibration is felt when walked upon due
to undersized wooden framing. Substandard ceiling height. Plywood ceiling
boards are bulging. No fire resistive wall provided between the two buildings.

As to the Structural, Sanitary/Plumbing and Electrical aspects, Building 2 has

the same findings as in Building I.

From the foregoing, it appears that the subject building attained a degree of
dilapidation that repair works are no longer practical and economical to
undertake.

Therefore, it is recommended that the Demolition Order issued by the

OBO, Manila be sustained.[18]
 On May 19, 2004, the Secretary of the DPWH rendered a Resolution[19] dismissing
the appeal of the petitioners for lack of merit and affirming the Resolution of the OBO and
the issuance of the Demolition Order.

In the same Resolution, the Secretary of the DPWH opined:

xxxx

In condemnation proceedings of dangerous and ruinous building

pursuant to the National Building Code (NBC) and its Implementing Rules and
Regulations (IRR), the authority of the Building Official is confined to the
assessment of the physical condition of the building sought to be condemned
and abated, and depending on the degree of its deterioration and dilapidation, to
issue appropriate order, taking into consideration the welfare and safety not only
of its occupants, but the public in general as well. Corollary thereto, said official
is mandated under the Code, even in the absence of a petitioner or complainant,
to motu propio initiate condemnation proceedings of reported dangerous and
ruinous buildings. The inclusion thereof of the 3-storey building which
appellant claims to have been built by Ediltrudis Villena on the subject property
in the hearing/investigation of the case was within the bounds of the duties and
responsibilities of the OBO. In the said proceedings, the Building Official shall
not delve on issues affecting contract involving the property or of the building
subject of the case or of lessee-lessor relationship, since those are matters within
the competence of the court to pass upon.

Appellants allegation that inspection of the premises was done without

their participation and [that they were] not given the chance to engage the
services of an engineer deserves scant consideration. Records revealed that
appellants who actively participated in the proceedings of the case were duly
furnished with copies of appellees petition for condemnation and the technical
evaluation report of their (appellees) commissioned engineer, and were enjoined
to submit their counter technical report. They however failed to comply.
Appellants who at the same time are residents of the building subject of the
proceedings could have easily participated or hire[d] an engineer to represent
them in the inspection conducted by the Committee on Buildings on the
premises as they were duly notified about it and of which they signified their
conformity during the hearing on September 20, 2002. x x x[20]

Undaunted, petitioners filed an appeal[21] with the OP.

Ruling of the Office of the President

Before the OP, the petitioners asserted that the findings of the DPWH Inspectorate
Team is erroneous and that they are builders in good faith. However, the OP found no
reversible error to justify the reversal or modification of the DPWH Resolution, and thus
resolved to dismiss the appeal in a Resolution[22] dated February 28, 2005.

The OP likewise subsequently denied with finality petitioners Motion for

Reconsideration[23] in an Order[24] dated April 25, 2005.

Aggrieved, petitioners filed a Petition for Review[25] with the CA.

Ruling of the Court of Appeals

Before the CA, petitioners again raised the issues they advanced before the administrative
bodies, particularly the issue regarding the ownership of the lot vis--vis their right as
builders in good faith.

However, the CA dismissed the petition for review and affirmed the OP Resolution
without addressing the issue of ownership. Petitioners filed a Motion for
Reconsideration[26] but same was denied in a Resolution[27] dated August 15, 2006 for
being a mere rehash or repetition of the issues raised in the petition.

Unwilling to concede, petitioners now come before this Court by way of Petition
for Review on Certiorari under Rule 45 of the Rules of Court.

Issues

Petitioners raise the following issues:

A.
WHETHER X X X THE COURT OF APPEALS ERRED IN AFFIRMING
THE RESOLUTION OF THE ADMINISTRATIVE AUTHORITIES
SUSTAINING THE RECOMMENDATIONS OF THE OFFICE OF THE
BUILDING OFFICIAL OF MANILA.
 B.
WHETHER X X X THE OFFICE OF THE BUILDING OFFICIAL
GRAVELY ERRED IN NOT OBSERVING THE CARDINAL PRIMARY
RIGHTS/DUE PROCESS REQUIREMENTS IN THE CONDUCT OF THE
HEARING AND IN THE CONTENTS OF THE INSPECTION REPORT
SUBMITTED BY THE INSPECTION TEAM INCLUDING THE
RESOLUTION OF THE OBO.

C.
WHETHER X X X [THE] OFFICE OF THE BUILDING OFFICIAL (OBO)
OF MANILA OVERSTEPPED THE BOUNDS OF ITS AUTHORITY IN
NOT APPLYING ARTICLE 482 AND ARTICLES 694 TO 707 OF THE
NEW CIVIL CODE IN IMPLEMENTING THE PROVISIONS OF
SECTION 215 OF THE BUILDING CODE P.D. 1096 IN THIS CASE.

D.
WHETHER X X X THE PETITIONER[S] OR THEIR PREDECESSOR IN
INTEREST [ARE]/IS A BUILDER IN GOOD FAITH OF THE 3[-]STOREY
APARTMENT BUILDING LOCATED AT THE REAR PORTION OF THE
PROPERTY AND REFERRED TO AS BLDG. 2.

E.
WHETHER X X X THE ACTION FOR EXTRAJUDICIAL ABATEMENT
OF NUISANCE IS PROPER IN THIS CASE.[28]

Our Ruling

The petition lacks merit.

At the outset, [i]t bears stressing that in a petition for review on certiorari [under
Rule 45 of the Rules of Court], the scope of this Courts judicial review of decisions of the
[CA] is generally confined only to errors of law, and questions of fact are not
entertained.[29]The Supreme Court is not a trier of facts and it is not duty-bound to analyze
and weigh again the evidence considered in the proceedings below.[30] More so, this Court
is not duty-bound to analyze and weigh evidence pertaining to factual issues which have
not been subject of any proper proceedings below. Well-entrenched and settled is the rule
that points of law, theories, issues and arguments not brought to the attention of the trial
court adequately and on time need not be, and ordinarily will not be, considered by a
reviewing court as they cannot be raised for the first time on appeal.[31] The determination
of who owns the subject property, the authenticity of the evidence of both parties, and
whether petitioners are builders in good faith are questions of fact, the resolution of which
requires the examination of evidence that should be ventilated in a separate action brought
before a proper forum.

As correctly stated by the Secretary of the DPWH in its Resolution,[32] the

administrative agencies jurisdiction in this case is confined to the assessment of the
physical condition of the building sought to be condemned and the issuance of the
appropriate order relative thereto. Issues affecting contract involving the property or of the
buildings subject of the case are not within their competence to rule upon. Lest this Court
becomes a court of first instance instead of a court of last resort, we decline to act on matters
that have not run the proper legal course.

Nevertheless, we note that petitioners purported right to occupy the property has
already ended two years ago when the 20-year period of the lease agreement expired in
year 2009. There being no provision in the contract, tacit or otherwise, for renewal or
extension of the lease, petitioners no longer have basis to keep hold of Building 2. Hence,
the determination of whether petitioners are builders in good faith is no longer necessary.

As to the other issues, suffice it to say that they boil down to the question of whether
the issuance of the OBO Resolution and Demolition Order was proper, and whether the
CA erred when it affirmed the Resolutions of the OP and the Secretary of the DPWH,
which in turn, likewise affirmed the said OBO Resolution.

A Building Official has the authority to order the

condemnation and demolition of buildings which
are found to be in a dangerous or ruinous
condition.
 [I]t is unquestionable that the Building Official has the authority to order the
condemnation and demolition of buildings which are found to be in a dangerous or ruinous
condition.[33] This authority emanates from Sections 214 and 215 of the National Building
Code (Presidential Decree [P.D.] No. 1096) which provides:

Section 214. Dangerous and Ruinous Buildings or Structures

Dangerous buildings are those which are herein declared as such or are
structurally unsafe or not provided with safe egress, or which constitute a fire
hazard, or are otherwise dangerous to human life, or which in relation to existing
use, constitute a hazard to safety or health or public welfare because of
inadequate maintenance, dilapidation, obsolescence, or abandonment; or which
otherwise contribute to the pollution of the site or the community to an
intolerable degree.

Section 215. Abatement of Dangerous Buildings

When any building or structure is found or declared to be dangerous or

ruinous, the Building Official shall order its repair, vacation or demolition
depending upon the degree of danger to life, health, or safety. This is without
prejudice to further action that may be taken under the provisions of Articles
482 and 694 to 707 of the Civil Code of the Philippines.

There is, therefore, no question as to the authority of the OBO to render the
challenged issuances. Here, the Building Official was authorized to issue the questioned
Demolition Order in view of his finding that the disputed structures are dangerous and
ruinous buildings within the purview of P.D. No. 1096, in relation to its Implementing
Rules and Regulations. Correspondingly, no irregularity in the process in which the
resolution and demolition order were issued is evident. As found by the CA, the records
show that the OBO issued the resolution and Demolition Order only after ocular
inspections and hearings were conducted. Notably, the Inspectorate Team of the DPWH
came up with the same conclusion as the OBO when it conducted its own ocular inspection
of the premises, that is both Buildings 1 and 2 had structural, sanitary, plumbing and
electrical defects of up to 80%.[34]

What is more, contrary to the position of the petitioners that the provisions of the Civil
Code on abatement of nuisances should have been applied in their case, the fact that the
buildings in question could also constitute nuisances under the Civil Code does not
preclude the Building Official from issuing the assailed Demolition Order. As provided by
P.D. No. 1096, the authority of the Building Official to order the repair, vacation or
demolition, as the case may be, is without prejudice to further action that may be
undertaken under the relevant provisions of the Civil Code.[35]

The position taken by petitioners that the OBO is duty-bound to first order the repair of
ruinous and dangerous buildings is erroneous. Petitioners, in their Memorandum,[36] quoted
Section 215 of the National Building Code, thus:

Section 215. Abatement of Dangerous Buildings

When any building or structure is found or declared to be dangerous or

ruinous, the Building Official shall order its repair, vacation or demolition
depending upon the degree of danger to life, health, or safety. This is without
prejudice to further action that may be taken under the provisions of Articles
482 and 694 to 707 of the Civil Code of the Philippines.[37]

A careful reading of the provision shows that it does not require the OBO to take
actions in the same order or sequence that Section 215 enumerates them. Instead, it
authorizes the Building Official to order either the repair, vacation, or demolition of the
building depending on the circumstances presented before it, particularly on the degree of
danger to life, health and safety. In the case at bench, the OBO, based on its assessment of
the buildings, deemed it necessary to recommend and order the demolition of the said
buildings, having found them dilapidated and deteriorated by up to 80%.

The Court of Appeals correctly affirmed the

resolution issued by the Office of the President

Petitioners find error in the CAs reliance on the report of the OBO in affirming the
resolution of the OP. Petitioners contend that the initiation of the proceedings in the OBO
was calculated to oust them from the property and to circumvent their rights as builders in
good faith thereby making the findings and issuances of the OBO unreliable. Petitioners
thus beseech this Court to ascertain facts that have already been determined by the
administrative agencies involved and thereafter reviewed and affirmed by the CA.

We find the contention without merit.

 The mandate of the OBO is to act motu proprio, or upon petition validly received,
on reported dangerous and ruinous buildings and structures that pose a threat to the life,
health and well-being of the inhabitants, and the general public. Hence, the OBO, based on
its findings, can still act on the matter pursuant to such mandate, notwithstanding
petitioners claim that respondents initiated the proceedings to circumvent their rights under
the law as builders in good faith. Otherwise stated, respondents motive in initiating the
proceedings which led to the issuance of the challenged OBO Resolution and Demolition
Order is immaterial as far as the OBO is concerned, so long as it is satisfied that a building
or structure is dangerous and ruinous.

Remarkably, both the DPWH and the OP found no irregularities in the manner that
officials of the OBO performed their duties and in coming up with its Resolution and
Demolition Order. This conclusion was affirmed by the CA when it resolved the petition
before it.
We find no error on the part of the CA when it relied on the findings of fact of the
OBO and the other administrative bodies. As correctly stated by the CA in its Decision:

The powers granted by law, particularly the National Building Code to

the Building Official regarding demolition of buildings are executive and
administrative in nature. It is a well-recognized principle that purely
administrative and discretionary functions may not be interfered with by the
courts. In general, courts have no supervising power over the proceedings and
actions of the administrative departments of the government. This is generally
true with respect to acts involving the exercise of judgment or discretion and
findings of fact. The established exception to the rule is where the issuing
authority has gone beyond its statutory authority, exercised unconstitutional
powers or clearly acted arbitrarily and without regard to his duty or with grave
abuse of discretion. None of these obtains in the case at bar. (Citations
omitted.)[38]

By reason of the special knowledge and expertise of said administrative agencies

over matters falling under their jurisdiction, they are in a better position to pass judgment
thereon; thus, their findings of fact in that regard are generally accorded great respect, if
not finality, by the courts.[39] Such findings must be respected as long as they are supported
by substantial evidence, even if such evidence is not overwhelming or even
preponderant.[40] It is not the task of the appellate court to once again weigh the evidence
submitted before and passed upon by the administrative body and to substitute its own
judgment regarding sufficiency of evidence.[41]

Similarly, this Court will not disturb these factual findings absent compelling
reasons to do so. This Court, in numerous occasions, has cited exceptions to the general
rule that it is not a trier of facts. None of the said exceptions is present in this case. The
conclusion reached by the administrative agencies involved after thoroughly conducting
their ocular inspections and hearings and considering all pieces of evidence presented
before them, which finding was affirmed by the CA, must now be regarded with great
respect and finality by this Court.

We take this opportunity to inform petitioners that the appellate court cannot be
expected to actually perform the inspection itself for purposes of validating the findings of
the administrative bodies. Reliance on findings of fact of the lower courts or, in this case,
administrative bodies, does not mean that the appellate court does not conduct its own
review. In fact, the appellate court painstakingly studies every piece of document that
comes into its hands, putting together every piece of the puzzle to come up with the whole
picture of the controversy brought before it. That is no easy task.

WHEREFORE, the petition is DENIED. The Decision dated May 19, 2006 and
the Resolution dated August 15, 2006 of the Court of Appeals in CA-G.R. SP No. 89783
are AFFIRMED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 166330 September 11, 2013

SMART COMMUNICATIONS, INC., Petitioner,

vs.
ARSENIO ALDECOA, JOSE B. TORRE, CONRADO U. PUA, GREGORIO V. MANSANO, JERRY
CORPUZ and ESTELITAACOSTA, Respondents.

DECISION

LEONARDO-DE CASTRO, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court filed by
petitioner Smart Communications, Inc., seeking the reversal of the Decision1 dated July 16, 2004
and Resolution2 dated December 9, 2004 of the Court of Appeals in CA-G.R. CV No. 71337. The
appellate court (I) reversed and set aside the Order3dated January 16, 2001 of the Regional Trial
Court (RTC), Branch 23, of Roxas, Isabela, in Civil Case No. Br. 23-632-2000 dismissing the
complaint for abatement of nuisance and injunction against petitioner, and (2) entered a new
judgment declaring petitioner's cellular base station located in Barangay Vira, Municipality of Roxas,
Province of Isabela, a nuisance and ordering petitioner to cease and desist from operating the said
cellular base station.

The instant Petition arose from the following facts:

Petitioner is a domestic corporation engaged in the telecommunications business. On March 9,

2000, petitioner entered into a contract of lease4 with Florentino Sebastian in which the latter agreed
to lease to the former a piece of vacant lot, measuring around 300 square meters, located in
Barangay Vira, Roxas, Isabela (leased property).Petitioner, through its contractor, Allarilla
Construction, immediately constructed and installed a cellular base station on the leased property.
Inside the cellular base station is a communications tower, rising as high as150 feet, with antennas
and transmitters; as well as a power house open on three sides containing a 25KVA diesel power
generator. Around and close to the cellular base station are houses, hospitals, clinics, and
establishments, including the properties of respondents Arsenio Aldecoa, Jose B. Torre, Conrado U.
Pua, Gregorio V. Mansano, Jerry Corpuz, and Estelita Acosta.

Respondents filed before the RTC on May 23, 2000 a Complaint against petitioner for abatement of
nuisance and injunction with prayer for temporary restraining order and writ of preliminary injunction,
docketed as Civil Case No. Br. 23-632-2000. Respondents alleged in their Complaint that:

5. Petitioners communications tower is 150 feet in height equivalent to a 15-storey building.

It is a tripod-type tower made of tubular steel sections and the last section, to which the huge
and heavy antenna/transponder array will be attached, about to be bolted on. Weight of the
antenna mast is estimated at one (1) to three (3) tons, more or less. As designed, the
antenna/transponder array are held only by steel bolts without support of guy wires;
6. This SMART tower is no different from the Mobiline tower constructed at Reina Mercedes,
Isabela which collapsed during a typhoon that hit Isabela in October 1998, an incident which
is of public knowledge;

7. With its structural design, SMARTs tower being constructed at Vira, Roxas, Isabela, is
weak, unstable, and infirm, susceptible to collapse like the Mobiline tower which fell during a
typhoon as earlier alleged, and its structural integrity being doubtful, and not earthquake
proof, this tower poses great danger to life and limb of persons as well as their property,
particularly, the respondents whose houses a but, or are near or within the periphery of the
communications tower;

8. This tower is powered by a standby generator that emitsnoxious and deleterious fumes,
not to mention the constant noise it produces, hence, a hazard to the health, not only of the
respondents, but the residents in the area as well;

9. When in operation, the tower would also pose danger to the life and health of respondents
and residents of the barangay, especially children, because of the ultra high frequency (UHF)
radio wave emissions it radiates. Only recently, Cable News Network (CNN) reported that
cell phones, with minimal radiated power, are dangerous to children, so more it is for this
communications tower, whose radiated power is thousands of times more than that of a
cellphone;

10. Worse, and in violation of law, petitioner constructed the tower without the necessary
public hearing, permit of the barangay, as well as that of the municipality, the Environmental
Compliance Certificate of the [Department of Environment and Natural Resources
(DENR)],construction permit, and other requirements of the National Telecommunications
Commission (NTC), and in fact committed fraud in its application by forging an undated
certification " that Barangay Vira does not interpose any objection to the proposed
construction of a 150 ft. tower & site development, " as this certification was never issued
byrespondent Jose Torre, the Barangay Captain of Vira, Roxas, Isabela, and without the
official barangay seal, attached as Annex "A" and Certification of the Barangay Officer of the
Day that no public hearing was held, attached as Annex "B" made integral part hereof;

11. Not being armed with the requisite permits/authority as above mentioned, the
construction of the tower is illegal and should be abated;

12. Respondents and petitioner should not wait for the occurrence of death, injuries and
damage on account of this structure and judicial intervention is needed to ensure that such
event will not happen.5

Respondents thus prayed for the RTC to:

1. Issue a temporary restraining order and after due hearing to issue a writ of
preliminary mandatory injunction;

2. Render judgment:

- Making the writ of preliminary mandatory injunction permanent;

- Declaring the construction of the SMART tower as a nuisance per se or per

accidens;
 - Ordering the abatement of this nuisance by ordering the removal and/or
demolition of petitioners communication tower;

- Condemning petitioner to pay respondents moral damages in the sum of

150,000.00 and exemplary damages in the sum of 30,000.00;

- Ordering petitioner to pay attorneys fees in the amount of 20,000.00 plus

trial honoraria of 1,000.00 for every appearance in Court;

- Ordering petitioner to refund to respondents litigation expenses in the

amount of not less than 10,000.00;

3. And for such other reliefs as are just and equitable in the premises.6

In its Answer/Motion to Oppose Temporary Restraining Order with Compulsory

Counterclaim, petitioner raised the following special and affirmative defenses:

13. Petitioner through its contractor, Allarilla Construction(hereafter Allarilla), applied

for a Building Permit through the office of Municipal engineer Virgilio A. Batucal on 13
April 2000 and subsequently received its approval 17 April 2000. (a copy of the
Official receipt and the Building Permit is hereto attached respectively as Annex "A"
and "B" and made an integral part hereof)

14. Petitioner, again through Allarilla applied for an Environmental Compliance

Certificate (ECC) the approval of which, at present, remains pending with the DENR-
[Environment Management Bureau (EMB)].

15. Petitioner should not in anyway be liable for fraud or bad faith as it had
painstakingly secured the consent of majority of the residents surrounding the
location of the Tower in order to seek their approval therewith. (a copy of the list of
residents who consented there to is attached herewith as Annex "C" and made an
integral part hereof)

16. Among the residents who signed the consent list secured by petitioner include
the respondent Jose B. Torre and a certain Linaflor Aldecoa, who is related to
respondent Arsenio Aldecoa.

17. Petitioner did not forge the Barangay Certification but actually secured the
consent of Barangay Captain Jose Torre through the efforts of Sangguniang Bayan
(SB) Board Member Florentino Sebastian.(a copy of the Barangay Certification is
attached herewith as Annex "D" and made an integral part hereof)

18. Petitioner Towers safety has been pre-cleared and is unlikely to cause harm in
exposing the members of the public to levels exceeding health limits considering that
the antenna height of the Tower is 45.73 meters or equivalent to 150 feet as stated in
a Radio Frequency Evaluation report by Elizabeth H. Mendoza health Physicist II, of
the Department of Health Radiation Health Service dated 9 May 2000. (a copy is
hereto attached as Annex "E" and made an integral part hereof)

19. The structural stability and soundness of the Tower has been certified by Engr.
Melanio A. Guillen Jr. of the Engineering Consulting firm Microflect as contained in
 their Stress Analysis Report (a copy is hereto attached as Annex "F" and made an
integral part hereof)

20. petitioners impetus to push through with the construction of the Tower is spurred
by the Telecommunications Act of 1995 or Republic Act 7925 which states that the
"expansion of the telecommunications network shall give priority to improving and
extending basic services to areas not yet served." Article II, Sec. 4 par. B.(a copy of
RA 7925 is hereto attached as Annex "G" and made an integral part hereof)7

In the end, petitioner sought the dismissal of respondents Complaint; the denial of respondents
prayer for the issuance of a temporary restraining order and writ of preliminary mandatory injunction;
the award of moral, nominal, and exemplary damages in the amounts which the court deem just and
reasonable; and the award of attorneys fees in the sum of 500,000.00 and litigation expenses as
may be proven at the trial.

Respondents then contested petitioners allegations and averred in their Reply and Answer to
Counterclaim that:

- Petitioners cell site relay antenna operates on the ultra high frequency (UHF) band, or
gigabyte band, that is much higher than that of TV and radio broadcasts which operates only
on the Very High Frequency (VHF) band, hence, petitioners equipment generates
dangerously high radiation and emission that is hazardous to the people exposed to it like
respondents, whose houses are clustered around petitioners cell site
antenna/communications tower;

- As admitted, petitioner has not secured the required Environmental Compliance Certificate
(ECC). It has not even obtained the initial compliance certificate (ICC). In short,petitioner
should have waited for these documents before constructing its tower, hence, it violated the
law and such construction is illegal and all the more sustains the assertions of respondents;

- The alleged building permit issued to petitioner is illegal because of the lack of an ECC and
that petitioners application for a building permit covered only a building and not a cell site
antenna tower. Moreover, the petitioner failed to obtain a National Telecommunications
Commission (NTC) Clearance to construct the communications tower. As will be seen in the
application and permit, the documents are dated April, 2000 while the construction begun in
March, 2000;

- The technical data that served as the basis of the Radio Frequency Radiation Evaluation of
petitioners mobile telephone base station was provided solely by the petitioner and in fact
misled the DOH Radiation Health Service. It states an absurdly low transmitted power of
twenty (20) watts for a dual band mobile phone service such as petitioner Smarts GSM
900/1800 Dual Band which is the standard service it offers to the public;

- The Stress Analysis Report is self-serving and tested against the communications tower,
the structural integrity is flawed;

- While respondents may yield to the mandate of Republic Act No.7925, otherwise known as
the Telecommunications Act of 1995,extending and improving or upgrading of basic services
to are as not yet served, this should not be taken as a license to gamble and/or destroy the
health and well-being of the people;
 - Petitioners alleged certification (Annex "D", should be Annex "4") is the very same
certification appended to respondents complaint which they have assailed as a forgery and
which respondent Jose Torre, the Barangay Captain of Vira, Roxas, Isabela, emphatically
denies having signed and/or issued the same. Moreover, the certification gives petitioner
away because respondent Jose Torre has no technical education using the
telecommunications term "SMART GSM & ETACS project," in said falsified certification;

- Petitioners claim that it is not liable for fraud or bad faith, proudly stating that it has
painstakingly secured the consent of the majority of the residents surrounding the tower site,
is belied by the alleged Conformity of Host Community (Residential) Annex "C" should be
Annex "3" where only a handful of residents signed the document prepared by petitioner
and the contents of which were misrepresented by a Sangguniang Bayan Member in the
person of Nick Sebastian who is an interested party being the owner of the land where the
tower is constructed. It was misrepresented to Linaflor Aldecoa, wife of respondent Arsenio
Aldecoa that it was already anyway approved and signed by Barangay Captain Jose Torre
when in truth his signature was again forged by the petitioner and/or its employees or agents
or person working for said company. Also, there are persons who are not residents of Vira,
Roxas, Isabela who signed the document such as Melanio C. Gapultos of Rizal, Roxas,
Isabela, Carlito Castillo of Nuesa, Roxas, Isabela, and another, Gennie Feliciano from San
Antonio, Roxas, Isabela. Certainly six (6) persons do not constitute the conformity of the
majority of the residents of Vira, Roxas, Isabela, and those immediately affected by the
cellsite tower like respondents. This document is likewise flawed and cannot help petitioners
cause. Besides, respondents and other residents, sixty-two (62) of them, communicated their
protest against the erection of the cell tower specifying their reasons therefor and expressing
their sentiments and fears about petitioners communications tower, xerox copy attached as
Annex "A" and made integral part hereof;

- Respondents likewise specifically deny the truth of the allegation in paragraph 12 of the
answer, the truth being that the lot leased to petitioner is owned by SB Member Nick
Sebastian and that Florentino Sebastian is dummying for the former in avoidance of possible
anti-graft charges against his son concerning this project. It is also further denied for lack of
knowledge or information sufficient to form a belief as to the truth thereof. Moreover, the
lease contract, copy not annexed to petitioners answer, would automatically be terminated
or ended in the event of complaints and/or protests from the residents.8

Civil Case No. Br. 23-632-2000 was set for pre-trial on September 28, 2000.9

On September 11, 2000, petitioner filed its Pre-Trial Brief in which it identified the following issues:

4.1. Whether respondents have a cause of action against the petitioner SMART for this
Honorable Court to issue a Preliminary Mandatory Injunction over the SMART tower in
Roxas, Isabela as it allegedly poses a threat to the lives and safety of the residents within the
area and if respondents are entitled to moral and exemplary damages as well as attorneys
fees and expenses of litigation.

4.2 Whether the complaint should be dismissed in that the claim or demand set forth in the
Complaint is fictitious, imaginary, sham and without any real basis.

4.3. What petitioner SMART is entitled under its compulsory counterclaim against
respondents for moral and exemplary damages, attorneys fees, and other expenses of
litigation.10
On even date, petitioner filed a Motion for Summary Judgment that reads:

Petitioner SMART Communications Inc., thru counsel, respectfully manifests that:

1. There is no need for a full-blown trial as the causes of action and issues have already
been identified in all the pleadings submitted to this Honorable court by both respondents
and petitioner

2. There is clearly no genuine issue as to any material fact or cause in the action.

3. There is no extreme urgency to issue a Preliminary Mandatory Injunction as stated in an

affidavit executed by SMART Senior Supervisor Andres V. Romero in an affidavit hereto
attached as Annex "A"

4. Petitioner seeks immediate declaratory relief from respondents contrived allegations as

set forth in their complaint;

Wherefore, it is most respectfully prayed of this Honorable Court that summary judgment be
rendered pursuant to Rule 35 of the Revised Rules of Court.11

Respondents filed their Pre-Trial Brief on September 21, 2000, proposing to limit the issues,

viz:

- Whether petitioners communications tower is a nuisance per se/per accidens and together
with its standby generator maybe abated for posing danger to the property and life and limb
of the residents of Vira, Roxas, Isabela more particularly the respondents and those whose
houses are clustered around or in the periphery of the cell site.

- Damages, attorneys fees, litigation expenses and other claims.12

Respondents likewise filed on September 21, 2000 their Opposition to petitioners Motion for
Summary Judgment, maintaining that there were several genuine issues relating to the cause of
action and material facts of their Complaint. They asserted that there was a need for a full blown trial
to prove the allegations in their Complaint, as well as the defenses put up by petitioner.13

In its Order14 dated September 28, 2000, the RTC indefinitely postponed the pre-trial until it has
resolved petitioners Motion for Summary Judgment. In the same Order, the RTC directed the
counsels of both parties to submit their memoranda, including supporting affidavits and other
documents within 30 days.

Petitioner submitted its Memorandum15 on October 26, 2000; while respondents, following several
motions for extension of time, filed their Memorandum16 on November 22, 2000. In their
Memorandum, respondents additionally alleged that:

The cellsite base station is powered by a roaring 25 KVA power generator. Operated 24 hours since
it started more than a month ago, it has sent "jackhammers into the brains" of all the inhabitants
nearby. Everyone is going crazy. A resident just recently operated for breast cancer is complaining
that the noise emanating from the generator is fast tracking her appointment with death. She can no
longer bear the unceasing and irritating roar of the power generator.
For this, the residents, led by the respondents, sought a noise emission test of the power generator
of petitioner SMART Communications with the DENR. The test was conducted on November 14 and
15, 2000 and the result shows that the petitioners power generator failed the noise emission test,
day and night time. Result of this test was furnished the Municipal Mayor of Roxas, Isabela (See
Communication of DENR Regional Director Lorenzo C. Aguiluz to Mayor Benedicto Calderon dated
November 16, 2000 and the Inspection Monitoring Report).

With these findings, the power generator is also a nuisance. It must also be abated.17

On January 16, 2001, the RTC issued its Order granting petitioners Motion for Summary Judgment
and dismissing respondents Complaint. The RTC ruled as follows:

What is of prime importance is the fact that contrary to the respondents speculation, the radio
frequency radiation as found out by the Department of Health is much lower compared to that of TV
and radio broadcast. The respondents counter to this claim is that the Department of Health was
misled. This is a mere conclusion of the respondents.

The respondents in opposing the Smarts construction of their cellsite is anchored on the supposition
that the operation of said cellsite tower would pose a great hazard to the health of the alleged cluster
of residents nearby and the perceived danger that the said tower might also collapse in case of a
strong typhoon that fell the Mobiline Cellsite tower of Mobiline (sic). The structured built of the
Smarts Cellsite tower is similar to that of the Mobiline.

Now, as to the Courts assessment of the circumstances obtaining, we find the claim of the
respondents to be highly speculative, if not an isolated one. Elsewhere, we find several cellsite
towers scattered (sic) allover, both of the Smart, Globe, and others, nay even in thickly populated
areas like in Metro Manila and also in key cities nationwide, yet they have not been outlawed or
declared nuisance as the respondents now want this Court to heed. To the thinking of the Court, the
respondents are harping imagined perils to their health for reason only known to them perhaps
especially were we to consider that the Brgy. Captain of Vira earlier gave its imprimatur to this
project. Noteworthy is the fact that the alleged cluster of residential houses that abut the cellsite
tower in question might be endangered thereby, the respondents are but a few of those residents. If
indeed, all those residents in Vira were adversely affected for the perceived hazards posed by the
tower in question, they should also have been joined in as respondents in a class suit. The sinister
motive is perhaps obvious.

All the foregoing reasons impel this Court to grant the petitioners motion for the dismissal of the
complaint, the perceived dangers being highly speculative without any bases in fact. Allegations in
the complaint being more imaginary than real, do not constitute factual bases to require further
proceeding or a trial. As to the claim that there is no certification or clearance from the DENR for the
petitioner to lay in wait before the construction, suffice it to say that no action as yet has been taken
by said office to stop the ongoing operation of said cellsite now in operation. There has been no hue
and cry from among the greater majority of the people of Roxas, Isabela, against it. Al contrario, it is
most welcome to them as this is another landmark towards the progress of this town.18

The dispositive portion of the RTC Order reads:

WHEREFORE, in view of the foregoing considerations, the Court hereby renders judgment
dismissing the complaint as the allegations therein are purely speculative and hence no basis in fact
to warrant further proceedings of this case.

The Court finds no compelling grounds to award damages.

Without costs.19

In another Order20 dated February 27, 2001, the RTC denied respondents Motion for
Reconsideration.

Respondents filed an appeal with the Court of Appeals, docketed as CA-G.R. CV No. 71337.

The Court of Appeals rendered its Decision on July 16, 2004. The appellate court declared the
cellular base station of petitioner a nuisance that endangered the health and safety of the residents
of Barangay Vira, Roxas, Isabela because: (1) the locational clearance granted to petitioner was a
nullity due to the lack of approval by majority of the actual residents of the

barangay and a barangay resolution endorsing the construction of the cellular base station; and (2)
the sound emission of the generator at the cellular base station exceeded the Department of
Environment and Natural Resources (DENR) standards. Consequently, the Court of Appeals
decreed:

WHEREFORE, the appealed decision is hereby REVERSED and SET ASIDE. A new one is entered
declaring the communications tower or base station of petitioner Smart Communications, Inc.
located at Brigido Pascual Street in Vira, Municipality of Roxas, Province of Isabela, a nuisance.
Petitioner is ordered to cease and desist from operating the said tower or station.21

Petitioner filed its Motion for Reconsideration arguing that: (1) the basis for the judgment of the
appellate court that the cellular base station was a nuisance had been extinguished as the generator
subject of the Complaint was already removed; and (2) there had been substantial compliance in
securing all required permits for the cellular base station.22

The Court of Appeals, in a Resolution dated December 9, 2004,refused to reconsider its earlier
Decision, reasoning that:

Petitioner principally anchors its pleas for reconsideration on the Certification issued by Roxas,
Isabela Municipal Engineer Virgilio Batucal, declaring that upon actual inspection, no Denyo
Generator Set has been found in the companys cell site in Roxas, Isabela. We hold, however, that
the certification dated August 12, 2004, taken on its own, does not prove Smarts allegation that it
has abandoned using diesel- powered generators since January 2002. Respondents current
photographs of the cell site clearly shows (sic) that Smart continues to use a mobile generator
emitting high level of noise and fumes.

We have gone over [petitioners] other arguments and observed that they are merely repetitive of
previous contentions which we have judiciously ruled upon.23 (Citations omitted.)

Petitioner seeks recourse from the Court through the instant Petition, assigning the following errors
on the part of the Court of Appeals:

21.0 The Court of Appeals erred when it encroached upon an executive function of
determining the validity of a locational clearance when it declared, contrary to the
administrative findings of the Housing Land Use and Regulatory Board ("HLURB"), that the
locational clearance of Petitioner was void.

22.0 The Court of Appeals erred when it resolved an issue that was not submitted to it for
resolution and in the process had usurped a purely executive function.
 23.0 The Court of Appeals erred in declaring Petitioners entire base station a nuisance
considering that it was only a small part of the base station, a generator that initially powered
the base station, that was reportedly producing unacceptable levels of noise.

24.0 The Court of Appeals erred in not considering that the supervening event of shut down
and pull out of the generator in the base station, the source of the perceived nuisance, made
the complaint for abatement of nuisance academic.24

The Petition is partly meritorious. While the Court agrees that the Court of Appeals should not have
taken cognizance of the issue of whether the locational clearance for petitioners cellular base
station is valid, the Court will still not reinstate the RTC Order dated January 16, 2001 granting
petitioners Motion for Summary Judgment and entirely dismissing Civil Case No. Br. 23-632-2000.
The issues of (1) whether petitioners cellular base station is a nuisance, and (2) whether the
generator at petitioners cellular base station is, by itself, also a nuisance, ultimately involve disputed
or contested factual matters that call for the presentation of evidence at a full-blown trial.

On the finding of the Court of

Appeals that petitioners locational
clearance for its cellular base station
is a nullity

Based on the principle of exhaustion of administrative remedies and its corollary doctrine of primary
jurisdiction, it was premature for the Court of Appeals to take cognizance of and rule upon the issue
of the validity or nullity of petitioners locational clearance for its cellular base station.

The principle of exhaustion of administrative remedies and the doctrine of primary jurisdiction were
explained at length by the Court in Province of Zamboanga del Norte v. Court of Appeals,25 as
follows:

The Court in a long line of cases has held that before a party is allowed to seek the intervention of
the courts, it is a pre-condition that he avail himself of all administrative processes afforded him.
Hence, if a remedy within the administrative machinery can be resorted to by giving the
administrative officer every opportunity to decide on a matter that comes within his jurisdiction, then
such remedy must be exhausted first before the court's power of judicial review can be sought. The
premature resort to the court is fatal to one's cause of action. Accordingly, absent any finding of
waiver or estoppel, the case may be dismissed for lack of cause of action.

The doctrine of exhaustion of administrative remedies is not without its practical and legal reasons.
Indeed, resort to administrative remedies entails lesser expenses and provides for speedier
disposition of controversies. Our courts of justice for reason of comity and convenience will shy away
from a dispute until the system of administrative redress has been completed and complied with so
as to give the administrative agency every opportunity to correct its error and to dispose of the case.

xxxx

The doctrine of primary jurisdiction does not warrant a court to arrogate unto itself the authority to
resolve a controversy the jurisdiction over which is initially lodged with an administrative body of
special competence.

We have held that while the administration grapples with the complex and multifarious problems
caused by unbridled exploitation of our resources, the judiciary will stand clear. A long line of cases
establishes the basic rule that the court will not interfere in matters which are addressed to the
sound discretion of government agencies entrusted with the regulation of activities coming under the
special technical knowledge and training of such agencies.

In fact, a party with an administrative remedy must not merely initiate the prescribed administrative
procedure to obtain relief, but also pursue it to its appropriate conclusion before seeking judicial
intervention. The underlying principle of the rule on exhaustion of administrative remedies rests on
the presumption that when the administrative body, or grievance machinery, is afforded a chance to
pass upon the matter, it will decide the same correctly. (Citations omitted.)

The Court again discussed the said principle and doctrine in Addition Hills Mandaluyong Civic &
Social Organization, Inc. v. Megaworld Properties & Holdings, Inc., et al.,26 citing Republic v.
Lacap,27 to wit:

We have consistently declared that the doctrine of exhaustion of administrative remedies is a

cornerstone of our judicial system. The thrust of the rule is that courts must allow administrative
agencies to carry out their functions and discharge their responsibilities within the specialized areas
of their respective competence. The rationale for this doctrine is obvious. It entails lesser expenses
and provides for the speedier resolution of controversies. Comity and convenience also impel courts
of justice to shy away from a dispute until the system of administrative redress has been completed.

In the case of Republic v. Lacap, we expounded on the doctrine of exhaustion of administrative

remedies and the related doctrine of primary jurisdiction in this wise:

The general rule is that before a party may seek the intervention of the court, he should first avail of
all the means afforded him by administrative processes. The issues which administrative agencies
are authorized to decide should not be summarily taken from them and submitted to a court without
first giving such administrative agency the opportunity to dispose of the same after due deliberation.

Corollary to the doctrine of exhaustion of administrative remedies is the doctrine of primary

jurisdiction; that is, courts cannot or will not determine a controversy involving a question which is
within the jurisdiction of the administrative tribunal prior to the resolution of that question by the
administrative tribunal, where the question demands the exercise of sound administrative discretion
requiring the special knowledge, experience and services of the administrative tribunal to determine
technical and intricate matters of fact. (Citations omitted.)

The Housing and Land Use Regulatory Board (HLURB)28 is the planning, regulatory, and quasi-
judicial instrumentality of government for land use development.29 In the exercise of its mandate to
ensure rational land use by regulating land development, it issued HLURB Resolution No.R-626,
series of 1998, Approving the Locational Guidelines for Base Stations of Cellular Mobile Telephone
Service, Paging Service, Trunking Service, Wireless Loop Service and Other Wireless
Communication Services (HLURB Guidelines). Said HLURB Guidelines aim to protect" providers
and users, as well as the public in general while ensuring efficient and responsive communication
services."

Indeed, the HLURB Guidelines require the submission of several documents for the issuance of a
locational clearance for a cellular base station, including:

IV. Requirements and Procedures in Securing Locational Clearance

A. The following documents shall be submitted in duplicate:

 xxxx

g. Written Consent:

g.1 Subdivisions

xxxx

g. 1.2 In the absence of an established Homeowners Association, consent/affidavit of non-objection

from majority of actual occupants and owners of properties within a radial distance equivalent to the
height of the proposed base station measured from its base, including all those whose properties is
adjoining the proposed site of the base station.(Refer to Figure 2)

xxxx

h. Barangay Council Resolution endorsing the base station.

Correlatively, the HLURB provides administrative remedies for non-compliance with its
requirements.

In 2000, when factual precedents to the instant case began to take place, HLURB Resolution No. R-
586, series of 1996, otherwise known as the 1996 HLURB Rules of Procedure, as amended, was in
effect. The original 1996 HLURB Rules of Procedure was precisely amended by HLURB Resolution
No. R-655, series of 1999, "so as to afford oppositors with the proper channel and expeditious
means to ventilate their objections and oppositions to applications for permits, clearances and
licenses, as well as to protect the rights of applicants against frivolous oppositions that may cause
undue delay to their projects. "Under the 1996 HLURB Rules of Procedure, as amended, an
opposition to an application for a locational clearance for a cellular base station or a complaint for
the revocation of a locational clearance for a cellular base station already issued, is within the
original jurisdiction of the HLURB Executive Committee. Relevant provisions read:

RULE III

Commencement of Action, Summons and Answer

xxxx

SECTION 2. Opposition to Application for Permit/License/ Clearance. When an opposition is filed

to an application for a license, permit or clearance with the Board or any of its Regional Field Office,
the Regional Officer shall make a preliminary evaluation and determination whether the case is
impressed with significant economic, social, environmental or national policy implications. If he/she
determines that the case is so impressed with significant economic, social, environmental or national
policy implications, such as, but not limited to:

1) Projects of national significance, for purposes of this rule, a project is of national

significance if it is one or falls under any of those enumerated in Rule III, Section 3 of these
Rules, as amended;

2) Those involving zoning variances and exceptions;

3) Those involving significant public interest or policy issues;

 4) Those endorsed by the zoning administrators of local government units.

The Regional Officer shall cause the records of the case to be transmitted to the Executive
Committee which shall assume original jurisdiction over the case, otherwise, the Regional Officer
shall act on and resolve the Opposition.

SECTION 3. A project is of national significance if it involves any of the following:

a) Power generating plants (e.g., coal-fired thermal plants)and related facilities (e.g.,
transmission lines);

b) Airport/seaports; dumping sites/sanitary landfills; reclamation projects;

c) Large-scale piggery and poultry projects;

d) Mining/quarrying projects;

e) National government centers;

f) Golf courses;

g) Fish ponds and aqua culture projects;

h) Cell sites and telecommunication facilities;

i) Economic zones, regional industrial centers, regional agro-industrial centers, provincial

industrial centers;

j) All other industrial activities classified as high-intensity uses (1-3 Projects).

SECTION 4. Any party aggrieved, by reason of the elevation or non-elevation of any contested
application by the Regional Officer, may file a verified petition for review thereof within thirty (30)
days from receipt of the notice of elevation or non-elevation of the contested application with the
Executive Committee which shall resolve whether it shall assume jurisdiction thereon.

The contested application for clearance, permit or license shall be treated as a complaint and all
other provisions of these rules on complaints not inconsistent with the preceding section shall, as far
as practicable, be made applicable to oppositions except that the decision of the Board en banc on
such contested applications shall be final and executory as provided in Rule XIX, Section 2 of these
Rules, as amended.

The Rules pertaining to contested applications for license, permit or clearance shall, by analogy,
apply to cases filed primarily for the revocation thereof.

xxxx

RULE XVII
Proceedings Before the Board of Commissioners

xxxx
SECTION 15. The Executive Committee. The Executive Committee shall be composed of the four
regular Commissioners and the Ex-Officio Commissioner from the Department of Justice.

xxxx

The Executive Committee shall act for the Board on policy matters, measures or proposals
concerning the management and substantive administrative operations of the Board subject to
ratification by the Board en banc, and shall assume original jurisdiction over cases involving
opposition to an application for license, permit or clearance for projects or cases impressed with
significant economic, social, environmental or national policy implications or issues in accordance
with Section 2, Rule II of these Rules, as amended. It shall also approve the proposed agenda of the
meetings of the Board en banc. (Emphases supplied.)

After the HLURB Executive Committee had rendered its Decision, the aggrieved party could still
avail itself of a system of administrative appeal, also provided in the 1996 HLURB Rules of
Procedure, as amended:

RULE XII
Petition for Review

SECTION 1. Petition for Review. Any party aggrieved by the Decision of the Regional Officer, on
any legal ground and upon payment of the review fee may file with the Regional Office a verified
Petition for Review of such decision within thirty (30) calendar days from receipt thereof.

In cases decided by the Executive Committee pursuant to Rule II, Section 2 of these Rules, as
amended, the verified Petition shall be filed with the Executive Committee within thirty (30) calendar
days from receipt of the Committees Decision. Copy of such petition shall be furnished the other
party and the Board of Commissioners. No motion for reconsideration or mere notice of petition for
review of the decision shall be entertained.

Within ten (10) calendar days from receipt of the petition, the Regional Officer, or the Executive
Committee, as the case may be, shall elevate the records to the Board of Commissioner together
with the summary of proceedings before the Regional Office. The Petition for Review of a decision
rendered by the Executive Committee shall betaken cognizance of by the Board en banc.

RULE XVIII
Appeal from Board Decisions

SECTION 1.

Motion for Reconsideration. Within the period for filing an appeal from a Board decision, order or
ruling of the Board of Commissioners, any aggrieved party may file a motion for reconsideration with
the Board only on the following grounds: (1) serious errors of law which would result in grave
injustice if not corrected; and (2) newly discovered evidence.

Only one (1) motion for reconsideration shall be entertained.

Motions for reconsideration shall be assigned to the division from which the decision, order or ruling
originated.
SECTION 2. Appeal. Any party may upon notice to the Board and the other party appeal a
decision rendered by the Board of Commissioners en banc or by one of its divisions to the Office of
the President within fifteen (15) calendar days from receipt thereof, in accordance with P.D. No.
1344 and A.O. No. 18 Series of 1987.

RULE XIX
Entry of Judgment

xxxx

SECTION 2. Rules on Finality. For purposes of determining when a decision or order has become
final and executory for purposes of entry in the Book of Judgment, the following shall be observed:

a. Unless otherwise provided in a decision or resolution rendered by the Regional Officer, the
Executive Committee, or the Board of Commissioners, as the case may be, the orders contained
therein shall become final as regards a party thirty (30) calendar days after the date of receipt
thereof and no petition for review or appeal therefrom has been filed within the said period.
(Emphases supplied.)

There is no showing that respondents availed themselves of the afore-mentioned administrative

remedies prior to instituting Civil Case No. Br. 23-632-2000 before the RTC. While there are
accepted exceptions to the principle of exhaustion of administrative remedies and the doctrine of
primary jurisdiction,30 respondents never asserted nor argued any of them. Thus, there is no cogent
reason for the Court to apply the exceptions instead of the general rule to this case.

Ordinarily, failure to comply with the principle of exhaustion of administrative remedies and the
doctrine of primary jurisdiction will result in the dismissal of the case for lack of cause of action.
However, the Court herein will not go to the extent of entirely dismissing Civil Case No. Br. 23-632-
2000. The Court does not lose sight of the fact that respondents Complaint in Civil Case No. Br. 23-
632-2000 is primarily for abatement of nuisance; and respondents alleged the lack of HLURB
requirements for the cellular base station, not to seek nullification of petitioners locational clearance,
but to support their chief argument that said cellular base station is a nuisance which needs to be
abated. The issue of whether or not the locational clearance for said cellular base station is valid is
actually separate and distinct from the issue of whether or not the cellular base station is a nuisance;
one is not necessarily determinative of the other. While the first is within the primary jurisdiction of
the HLURB and, therefore, premature for the courts to rule upon in the present case, the latter is
within the jurisdiction of the courts to determine but only after trial proper.

On the declaration of the Court of

Appeals that petitioners cellular
base station is a nuisance that must
be abated

Article 694 of the Civil Code defines nuisance as:

ART. 694. A nuisance is any act, omission, establishment, business, condition of property, or
anything else which:

(1) Injures or endangers the health or safety of others; or

(2) Annoys or offends the senses; or

 (3) Shocks, defies or disregards decency or morality; or

(4) Obstructs or interferes with the free passage of any public highway or street, or any body
of water; or

(5) Hinders or impairs the use of property.

The term "nuisance" is so comprehensive that it has been applied to almost all ways which have
interfered with the rights of the citizens, either in person, property, the enjoyment of his property, or
his comfort.31

The Court, in AC Enterprises, Inc. v. Frabelle Properties Corporation,32 settled that a simple suit for
abatement of nuisance, being incapable of pecuniary estimation, is within the exclusive jurisdiction of
the RTC. Although respondents also prayed for judgment for moral and exemplary damages,
attorneys fees, and litigation expenses, such claims are merely incidental to or as a consequence
of, their principal relief.

Nonetheless, while jurisdiction over respondents Complaint for abatement of nuisance lies with the
courts, the respective judgments of the RTC and the Court of Appeals cannot be upheld.

At the outset, the RTC erred in granting petitioners Motion for Summary Judgment and ordering the
dismissal of respondents Complaint in Civil Case No. Br. 23-632-2000.

Summary judgments are governed by Rule 35 of the Rules of Court, pertinent provisions of which
state:

SEC. 2. Summary judgment for defending party. A party against whom a claim, counterclaim, or
cross-claim is asserted or a declaratory relief is sought may, at any time, move with supporting
affidavits, depositions or admissions for a summary judgment in his favor as to all or any part
thereof.

SEC. 3. Motion and proceedings thereon. The motion shall be served at least ten (10) days before
the time specified for the hearing. The adverse party may serve opposing affidavits, depositions, or
admissions at least three (3) days before the hearing. After the hearing, the judgment sought shall
be rendered forthwith if the pleadings, supporting affidavits, depositions, and admissions on file,
show that, except as to the amount of damages, there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a matter of law. (Emphases supplied.)

In Rivera v. Solidbank Corporation,33 the Court discussed extensively when a summary judgment is
proper:

For a summary judgment to be proper, the movant must establish two requisites: (a) there must be
no genuine issue as to any material fact, except for the amount of damages; and (b) the party
presenting the motion for summary judgment must be entitled to a judgment as a matter of law.
Where, on the basis of the pleadings of a moving party, including documents appended thereto, no
genuine issue as to a material fact exists, the burden to produce a genuine issue shifts to the
opposing party. If the opposing party fails, the moving party is entitled to a summary judgment.

A genuine issue is an issue of fact which requires the presentation of evidence as distinguished from
an issue which is a sham, fictitious, contrived or a false claim.
The trial court can determine a genuine issue on the basis of the pleadings, admissions, documents,
affidavits or counter affidavits submitted by the parties. When the facts as pleaded appear
uncontested or undisputed, then there is no real or genuine issue or question as to any fact and
summary judgment called for. On the other hand, where the facts pleaded by the parties are
disputed or contested, proceedings for a summary judgment cannot take the place of a trial. The
evidence on record must be viewed in light most favorable to the party opposing the motion who
must be given the benefit of all favorable inferences as can reasonably be drawn from the evidence.

Courts must be critical of the papers presented by the moving party and not of the
papers/documents in opposition thereto. Conclusory assertions are insufficient to raise an issue of
material fact. A party cannot create a genuine dispute of material fact through mere speculations or
compilation of differences. He may not create an issue of fact through bald assertions, unsupported
contentions and conclusory statements. He must do more than rely upon allegations but must come
forward with specific facts in support of a claim. Where the factual context makes his claim
implausible, he must come forward with more persuasive evidence demonstrating a genuine issue
for trial. (Emphases supplied; citations omitted.)

Judging by the aforequoted standards, summary judgment cannot be rendered in this case as there
are clearly factual issues disputed or contested by the parties. As respondents correctly argued in
their Opposition to petitioners Motion for Summary Judgment:

1. Contrary to the claim of petitioner, there are several genuine issues as to the cause of action and
material facts related to the complaint. For one there is an issue on the structural integrity of the
tower, the ultra high frequency (UHF) radio wave emission radiated by the communications tower
affecting the life, health and well being of the[respondents] and the barangay residents, especially
their children. Also, the noxious/deleterious fumes and the noise produce[d] by the standby
generator and the danger posted by the tower if it collapses in regard to life and limb as well as the
property of the [respondents] particularly those whose houses abut, or are near/within the periphery
of the communications tower. x x x34

Likewise constituting real or genuine issues for trial, which arose from subsequent events, are the
following: whether the generator subject of respondents Complaint had been removed; whether said
generator had been replaced by another that produces as much or even more noise and fumes; and
whether the generator is a nuisance that can be abated separately from the rest of the cellular base
station.

Furthermore, the Court demonstrated in AC Enterprises, Inc. the extensive factual considerations of
a court before it can arrive at a judgment in an action for abatement of nuisance:

Whether or not noise emanating from a blower of the air conditioning units of the Feliza Building is
nuisance is to be resolved only by the court in due course of proceedings. The plaintiff must prove
1wphi 1

that the noise is a nuisance and the consequences thereof. Noise is not a nuisance per se. It may be
of such a character as to constitute a nuisance, even though it arises from the operation of a lawful
business, only if it affects injuriously the health or comfort of ordinary people in the vicinity to an
unreasonable extent. Injury to a particular person in a peculiar position or of especially sensitive
characteristics will not render the noise an actionable nuisance. In the conditions of present living,
noise seems inseparable from the conduct of many necessary occupations. Its presence is a
nuisance in the popular sense in which that word is used, but in the absence of statute, noise
becomes actionable only when it passes the limits of reasonable adjustment to the conditions of the
locality and of the needs of the maker to the needs of the listener. What those limits are cannot be
fixed by any definite measure of quantity or quality; they depend upon the circumstances of the
particular case. They may be affected, but are not controlled, by zoning ordinances. The delimitation
of designated areas to use for manufacturing, industry or general business is not a license to emit
every noise profitably attending the conduct of any one of them.

The test is whether rights of property, of health or of comfort are so injuriously affected by the noise
in question that the sufferer is subjected to a loss which goes beyond the reasonable limit imposed
upon him by the condition of living, or of holding property, in a particular locality in fact devoted to
uses which involve the emission of noise although ordinary care is taken to confine it within
reasonable bounds; or in the vicinity of property of another owner who, though creating a noise, is
acting with reasonable regard for the rights of those affected by it.

Commercial and industrial activities which are lawful in themselves may become nuisances if they
are so offensive to the senses that they render the enjoyment of life and property uncomfortable.
The fact that the cause of the complaint must be substantial has often led to expressions in the
opinions that to be a nuisance the noise must be deafening or loud or excessive and unreasonable.
The determining factor when noise alone is the cause of complaint is not its intensity or volume. It is
that the noise is of such character as to produce actual physical discomfort and annoyance to a
person of ordinary sensibilities, rendering adjacent property less comfortable and valuable. If the
noise does that it can well be said to be substantial and unreasonable in degree, and
reasonableness is a question of fact dependent upon all the circumstances and conditions. There
can be no fixed standard as to what kind of noise constitutes a nuisance.

The courts have made it clear that in every case the question is one of reasonableness. What is a
reasonable use of ones property and whether a particular use is an unreasonable invasion of
anothers use and enjoyment of his property so as to constitute a nuisance cannot be determined by
exact rules, but must necessarily depend upon the circumstances of each case, such as locality and
the character of the surroundings, the nature, utility and social value of the use, the extent and
nature of the harm involved, the nature, utility and social value of the use or enjoyment invaded, and
the like.

Persons who live or work in thickly populated business districts must necessarily endure the usual
annoyances and of those trades and businesses which are properly located and carried on in the
neighborhood where they live or work. But these annoyances and discomforts must not be more
than those ordinarily to be expected in the community or district, and which are incident to the lawful
conduct of such trades and businesses. If they exceed what might be reasonably expected and
cause unnecessary harm, then the court will grant relief.

A finding by the LGU that the noise quality standards under the law have not been complied with is
not a prerequisite nor constitutes indispensable evidence to prove that the defendant is or is not
liable for a nuisance and for damages. Such finding is merely corroborative to the testimonial and/or
other evidence to be presented by the parties. The exercise of due care by the owner of a business
in its operation does not constitute a defense where, notwithstanding the same, the business as
conducted, seriously affects the rights of those in its vicinity.35 (Citations omitted.)

A reading of the RTC Order dated January 16, 2001 readily shows that the trial court did not take
into account any of the foregoing considerations or tests before summarily dismissing Civil Case No.
Br. 23-632-2000. The reasoning of the RTC that similar cellular base stations are scattered in
heavily populated areas nationwide and are not declared nuisances is unacceptable. As to whether
or not this specific cellular base station of petitioner is a nuisance to respondents is largely
dependent on the particular factual circumstances involved in the instant case, which is exactly why
a trial for threshing out disputed or contested factual issues is indispensable. Evidently, it was the
RTC which engaged in speculations and unsubstantiated conclusions.
For the same reasons cited above, without presentation by the parties of evidence on the contested
or disputed facts, there was no factual basis for declaring petitioner's cellular base station a nuisance
and ordering petitioner to cease and desist from operating the same.

Given the equally important interests of the parties in this case, i.e., on one hand, respondents'
health, safety, and property, and on the other, petitioner's business interest and the public's need for
accessible and better cellular mobile telephone services, the wise and prudent course to take is to
remand the case to the RTC for trial and give the parties the opportunity to prove their respective
factual claims.

WHEREFORE, premises considered, the instant Petition is PARTIALLY GRANTED. The Decision
dated July 16, 2004 and Resolution dated December 9, 2004 of the Court of Appeals in CA-G.R. CV
No. 71337 are REVERSED and SET ASIDE. Let the records of the case be REMANDED to the
Regional Trial Court, Branch 23, of Roxas, Isabela, which is DIRECTED to reinstate Civil Case No.
Br. 23-632-2000 to its docket and proceed with the trial and adjudication thereof with appropriate
dispatch in accordance with this Decision.

SO ORDERED.

TERESITA J. LEONARDO-DE CASTRO

Associate Justice

WE CONCUR:

.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 201781 December 10, 2014

ANNIE GERONIMO, SUSAN GERONIMO AND SILVERLAND ALLIANCE CHRISTIAN

CHURCH*, Petitioners,
vs.
SPS. ESTELA C. CALDERON AND RODOLFO T. CALDERON, Respondents.

DECISION

VILLARAMA, JR., J.:

Assailed in this petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure,
as amended, are the Decision1 dated February 16, 2012 and the Resolution2 dated May 8, 2012 of
the Court of Appeals (CA) in CA-G.R. SP No. 120371 entitled "Silver/and Realty & Development
Corporation, Silver/and Village 1 Home owners Association, Silver Alliance Christian Church, Joel
Geronimo, Annie Geronimo, Jonas Geronimo and Susan Geronimo v. Spouses Estela C. Calderon
and Rodolfo T. Calderon." The CA affirmed the Decision3 dated January 14, 2011 and the
Resolution4 dated June 27, 2011 of the Office of the President (OP) in OP Case No. 09-E-200
affirming the ruling of the Housing and Land Use Regulatory Board (HLURB).

The antecedents giving rise to the present petition follow:

On May 15, 2006, respondents spouses Estela and Rodolfo Calderon (respondents, for brevity) filed
a verified complaint5 before the HLURB Regional Office against Silverland Realty & Development
Corporation, Silverland Village I Homeowners Association, Silverland Alliance Christian Church
(SACC), Joel Geronimo, Annie Geronimo, Jonas Geronimo and Susan Geronimo, for specific
performance and for the issuance of cease and desist order and damages. The case was docketed
as REM-051506-13334.

In their complaint, respondents alleged that they are residents of #31 Silverlane Street, Silverland
Subdivision, Pasong Tamo, Tandang Sora, Quezon City. Spouses Joel and Annie Geronimo are
residents of #48 Silverlane Street just across their house. Sometime in May 2005, a building was
erected beside the house of Joel and Annie. Jonas Geronimo directed the construction. When
respondents asked about the building, Susan Geronimo told them that her son, Joel, had bought the
adjacent lot to build an extension house in order to create a wider playing area for the Geronimo
grandchildren because their two-storey house could no longer accommodate their growing family.
When the construction was finished, the building turned out to be the church of petitioner SACC. The
church was used for different religious activities including daily worship services, baptisms, summer
school, choir rehearsals, band practices, playing of different musical instruments and use of a loud
sound system which would last until late in the evening. The noise allegedly affected respondents
health and caused inconvenience to respondents because they were forced to leave their house if
they want peace and tranquility. Respondents sought assistance from the President of the
homeowners association. SACC, through Atty. Alan Alambra promised that it will take steps to avoid
church activities beyond 10:00 p.m. However, the intolerable noise still continued. In fact, another
residence situated at #36 Silverlane Street was used for Sunday school. Due to the added noise and
tension, Estelas nose bled. Respondents went to the Commission on Human Rights, but no
settlement was reached.

SACC, Joel Geronimo, Annie Geronimo, Susan Geronimo and Jonas Geronimo denied the
allegations with regard to the activities that allegedly caused disturbance and stress to respondents.
They averred that the HLURB has no jurisdiction over the case which primarily involves abatement
of nuisance, primarily lodged with the regular courts. They also alleged lack of privity with
respondents and that they are not real parties-in-interest with respect to the subject matterof the
complaint.

Silverland Realty & Development Corporation and Silverland Village 1 Homeowners Association did
not respond to the complaint.

The HLURB Arbiter rendered a Decision6 on October 22, 2007 and ordered petitioners not to use the
property at #46 Silverlane Street for religious purposes and as a location of a church, to wit:

WHEREFORE, premises considered, this Board hereby enjoins the respondents from using the
property at #46 Silverlane Street, Silverland Subdivision I, Barangay Pasong Tamo, Tandang Sora,
Quezon City for religious purposes and as a location of a church. The temporary injunction is
likewise declared as permanent.

Costs against the respondent.7

Petitioners appealed. The First Division of the Board of Commissioners of the HLURB denied the
appeal and affirmed the decision of the HLURB Regional Office.8 Petitioners filed an appeal before
the OP, but the OP denied the appeal.9 Hence, petitioners filed a petition for review with the CA.

In its Decision dated February 16, 2012, the CA dismissed the petition and affirmed the ruling of the
OP. The CA noted that respondents sued Silverland Realty & Development Corporation for violation
of the Contract to Sell, for failure to disallow the construction and operation of SACC since August
2005. The CA also noted that under the Contract to Sell, the parcel of land shall "be used exclusively
for one single-family residential building."9-a Thus, the CA ruled that respondents action which sought
the enforcement of the Contract to Sell clearly falls under the jurisdiction of the HLURB.

The CA agreed with the OP that the case involves the failure of a developer of a subdivision project
and the homeowners association to ensure that the construction of structures inside the subdivision
conforms to the approved plan. The CA said that the Development Permit issued for the subdivision
project clearly indicates that the subject lots use is residential. Petitioners, however, succeeded in
constructing a church thereon, and the developer and the homeowners association failed to
maintain the residential usage of the lot.

The CA held that under the Deed of Restrictions, a developer and the homeowners association are
contractually bound to the buyers of subdivision lots to maintain and preserve the intended use of a
certain lot, and to see to it that each and every construction conforms to the approved plan. Cases
involving specific performance of contractual and statutory obligations filed by buyers of subdivision
lots against the owner or developer of a subdivision project fall under the jurisdiction of the HLURB
pursuant to Section 1 of Presidential Decree No. 1344, said the CA.

In its Resolution dated May 8, 2012, the CA denied petitioners motion for reconsideration. Hence,
this petition raising the following issues:
 I. WHETHER OR NOT THE COURT OF APPEALS ERRED IN AFFIRMING THAT THE
HLURB HAS JURISDICTION OVER THE PRESENT CONTROVERSY;

II. ASSUMING ARGUENDO THAT THE HLURB INDEED HAS JURISDICTION OVER THE
COMPLAINT BELOW, WHETHER OR NOT THE COURT OF APPEALS ERRED IN
AFFIRMING THE "VALIDITY" OF HLURBS TAKING JUDICIAL NOTICE OF THE ALLEGED
"DEVELOPMENT PERMIT";

III. ASSUMING ARGUENDO THAT THE HLURB HAS JURISDICTION OVER THE
PRESENT COMPLAINT, WHETHER OR NOT THE COURT OF APPEALS ERRED IN
AFFIRMING THE HLURB DECISION, IN THE LIGHT OF THE ABSENCE OF A DEFAULT
JUDGMENT AGAINST THE INDISPENSABLE PARTIES;

IV. WHETHER OR NOT THE COURT OF APPEALS, IN TACITLY CONCLUDING THAT

THE HLURB DECISION IS SUPPORTED BY SUBSTANTIAL EVIDENCE, BASED SUCH
CONCLUSION MERELY ON SURMISES, CONJECTURES OR SPECULATION.10

The issues are: (1) whether the CAerred in ruling that the HLURB has jurisdiction over the present
controversy; and (2) whether the CA erred in affirming the HLURBs ruling that petitioners cannot
use #46 of Silverlane Street for religious purposes and as a location of a church.

Petitioners insist that the HLURB has no jurisdiction over the case. They claim that the complaint of
respondents mainly seeks to abate a perceived nuisance, the elimination of the allegedly boisterous
activity supposedly traceable to the worship and religious activities of petitioner SACC. Petitioners
submit that this type of action isnot within the HLURBs jurisdiction. They add that the action is
incapable of pecuniary estimation and that it is the Regional Trial Court of Quezon City that has
jurisdiction over the same.

Also, petitioners claim that even assuming that the action below is for enforcement of statutory and
contractual obligations of the subdivision owner/developer, the CA erred in affirming the HLURBs
act of taking judicial notice of the Development Permit. The Development Permit is the only
justification used in denying them the right to use the present structure for religious purposes and
asa location of a church.

Petitioners further claim that even assuming that the action below is for the enforcement of statutory
and contractual obligations of the subdivision owner/developer, it is the developer, Silverland Realty
& Development Corporation which is an indispensable party to the case and they are merely
necessary parties. To bind them, there should have been a prior judgment directing and
commanding the developer to enforce its contractual undertakings or abide by its legal obligations.
This is the only way by which they could in turn be compelled to abate a nuisance, by desisting from
using the alleged offensive structure for religious purposes.

For their part, respondents maintain that the HLURB has jurisdiction over their complaint aimed at
compelling the subdivision developer to comply with its contractual and statutory obligations.
According to respondents, judicial notice of the Development Permit is in accordance with the
HLURB Rules of Procedure.

Respondents counter that petitioners are indispensable parties because they will be affected by the
outcome of the action against the developer and the home owners association. An indispensable
party is a party in interest without whom no final determination can be had of an action, and who
shall be joined either as plaintiffs or defendants. The joinder of petitioners and Joel Geronimo and
Jonas Geronimo is necessary in order to vest the HLURB with jurisdiction to render a decision that
will finally settle the action against the developer, Silverland Realty& Development Corporation.

We deny the petition and affirm the CA ruling.

On the first issue, we agree with the CA that the HLURB has jurisdiction over the present
controversy. Jurisdiction over the subject matter of a case is conferred by law and determined by the
allegations in the complaint which comprise a concise statement of the ultimate facts constituting the
plaintiffs cause of action. The nature of an action, as well as which court or body has jurisdiction
over it, is determined based on the allegations contained in the complaint of the plaintiff, irrespective
of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein.
The averments in the complaint and the character of the relief sought are the ones to be consulted.
Once vested by the allegations in the complaint, jurisdiction also remains vested irrespective of
whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein.11 We
have ruled that the jurisdiction of the HLURB to hear and decide cases is determined by the nature
of the cause of action, the subject matter or property involved and the parties.12

We explained the HLURBs exclusive jurisdiction in Christian General Assembly, Inc. v. Spouses
Ignacio13 in this wise:

Generally, the extent to which an administrative agency may exercise its powers depends largely, if
not wholly, on the provisions of the statute creating or empowering such agency. Presidential Decree
(P.D.) No. 1344, "EMPOWERING THE NATIONAL HOUSING AUTHORITY TO ISSUE WRIT OF
EXECUTION IN THE ENFORCEMENT OF ITS DECISION UNDER PRESIDENTIAL DECREE NO.
957," clarifies and spells out the quasi-judicial dimensions of the grant of jurisdiction to the HLURB in
the following specific terms:

SEC. 1. In the exercise of itsfunctions to regulate the real estate trade and business and in addition
to its powers provided for in Presidential Decree No. 957, the National Housing Authority shall have
exclusive jurisdiction to hear and decide cases of the following nature:

A. Unsound real estate business practices;

B. Claims involving refund and any other claims filed by subdivision lot or condominium unit
buyer against the project owner, developer, dealer, broker or salesman; and

C. Cases involving specific performance of contractual and statutory obligations filed by

buyers of subdivision lots or condominium units against the owner, developer, dealer, broker
or salesman.

The extent to which the HLURB has been vested with quasi- judicial authority must also be
determined by referring to the terms of P.D. No. 957, "THE SUBDIVISION AND CONDOMINIUM
BUYERS PROTECTIVE DECREE." Section 3 of this statute provides:

x x x National Housing Authority [now HLURB]. The National Housing Authority shall have
exclusive jurisdiction to regulate the real estate trade and business in accordance with the provisions
of this Decree.

In Maria Luisa Park Association,Inc. (MPLAI) v. Almendras,14 we also ruled that:

The provisions of P.D. No. 957 were intended to encompass all questions regarding subdivisions
and condominiums. The intention was aimed at providing for an appropriate government agency, the
HLURB, to which all parties aggrieved in the implementation of provisions and the enforcement of
contractual rights with respect to said category of real estate may take recourse. The business of
developing subdivisions and corporations being imbued with public interest and welfare, any
question arising from the exercise of that prerogative should be brought to the HLURB which has the
technical know-how on the matter. In the exercise of its powers, the HLURB must commonly
interpret and apply contracts and determine the rights of private parties under such contracts. This
ancillary power is no longer a uniquely judicial function, exercisable only by the regular courts.
(Emphasis supplied)

And in Spouses Chua v. Ang,15 we held that:

The law recognized, too, that subdivision and condominium development involves public interest and
welfare and should be brought to a body, like the HLURB, that has technical expertise. In the
exercise of its powers, the HLURB, on the other hand, is empowered to interpret and apply
contracts, and determine the rights of private parties under these contracts. This ancillary power,
generally judicial, is now no longer with the regular courts to the extent that the pertinent HLURB
laws provide.

Viewed from this perspective, the HLURBs jurisdiction over contractual rights and obligations of
parties under subdivision and condominium contracts comes out very clearly. x x x

In the present case, respondents are buyers of a subdivision lot from subdivision owner and
developer Silverland Realty & Development Corporation. Respondents action against Silverland
Realty & Development Corporation was for violation of its own subdivision plan when it allowed the
construction and operation of SACC.16 Respondents sued to stop the church activities inside the
subdivision which isin contravention of the residential use of the subdivision lots. Undoubtedly, the
present suit for the enforcement of statutory and contractual obligations of the subdivision developer
clearly falls within the ambit of the HLURBs jurisdiction. Needless to stress, when an administrative
agency or body is conferred quasi-judicial functions, all controversies relating to the subject matter
pertaining to its specialization are deemed to be included within the jurisdiction of said administrative
agency or body.17 Split jurisdiction is not favored.18

Thus, respondents properly filed their complaint before the HLURB. The HLURB has exclusive
jurisdiction over complaints arising from contracts between the subdivision developer and the lot
buyer, or those aimed at compelling the subdivision developer to comply with its contractual and
statutory obligations tomake the subdivision a better place to live in.19

On the second issue, we uphold the ruling that petitioners cannot use #46 of Silverlane Street for
religious purposes or as a location of a church.

Here, as noted by the HLURB, the Development Permit indicates the use of the property as
residential except for the designated open spaces. Petitioners do not deny that the building built
beside the lot of Annie and Joel Geronimo is used as a church and that other religious activities are
performed there. Clearly, this usage contravenes the land use policy particularly prescribed in the
subdivision plan and in the Development Permit. Respondents, as subdivision lot owners, are
entitled to assert that the use of the said property for religious activities be enjoined since it clearly
violates the intended use of the subject lot.

Also, we find no fault on the part of the CA in affirming the HLURBs act of taking judicial notice of
the Development Permit issued for the project. To begin with, it is well-settled that the rules of
evidence are not strictly applied in proceedings before administrative bodies.20 Although trial courts
are enjoined to observe strict enforcement of the rules of evidence, in connection with evidence
which may appear to be of doubtful relevancy, incompetency, or admissibility, we have held that:

[I]t is the safest policy to be liberal, not rejecting them on doubtful or technical grounds, but admitting
them unless plainly irrelevant, immaterial or incompetent, for the reason that their rejection places
them beyond the consideration of the court, if they are thereafter found relevant or competent; on the
other hand, their admission, if they turn out later to be irrelevant or incompetent, can easily be
remedied by completely discarding them or ignoring them.21

The issue of taking judicial notice of the Development Permit was also properly discussed and
justified by the Board of Commissioners of the HLURB, First Division, to wit:

With respect to the assailed documents which the Office relied upon to arrive at its conclusion, Rule
X, Section 6 of the HLURB Rules of Procedure provides:

Section 6. Summary resolution. With or without the position paper or draft decision, the Arbiter
shall resume (sic) the cases on bases of the pleadings and pertinent records of the case and of the
Board.

The Regional Office can therefore take judicialnotice of all documents forming part of its official
records. The rule is in accord with Section 22 of Chapter IV, Book VI of Executive Order No. 292, s.
1987, otherwise known as the Administrative Code.

Neither can the argument that herein respondents are not bound by the development permit as this
is only between the government and the developer, be held valid. To accept such rationalization
would be to say that buyers, after acquiring title to a subdivision property, are free to set aside all
zoning and development plans the government has deemed appropriate for the area in
consideration of the general welfare.

Respondents, in deciding to acquire property ina subdivision project, are deemed to have accepted
and understood, that they are not merely trying to possess a property but are in fact joining a unique
community with a distinctive lifestyle envisioned since its development.

While the construction and establishment of any church is not prohibited within a subdivision, the
same should be located in an area designed or allowable in the approved development plan for the
purpose.22

As to petitioners' claim that they are merely necessary parties and that there must be a prior
judgment directing and commanding the developer Silverland Realty & Development Corporation to
enforce its contractual obligations, we are not convinced.

Respondents have sued not only the petitioners but also the developer corporation and the
homeowners' association. That Silverland Realty & Development Corporation and Silverland Village
1wphi 1

1 Homeowners Association did not file their answer, did not divest the HLURB of jurisdiction over the
case. We agree with respondents that petitioners are indispensable parties for they were the ones
who built and operate the church inside the subdivision and without them no final determination can
be had of the action. Petitioners are the ones who will be affected by the judgment. In fact, they are
the ones who are prohibited from using the subject property as a church.
In fine, we agree with the rulings of the HLURB, OP and the CA that respondents are entitled to the
relief sought. Well-entrenched is the rule that courts will not interfere in matters which are addressed
to the sound discretion of the government agency entrusted with the regulation of activities coming
under the special and technical training and knowledge of such agency.23 Administrative agencies
are given a wide latitude in the evaluation of evidence and in the exercise of their adjudicative
functions, latitude which includes the authority to take judicial notice of facts within their special
competence.24

WHEREFORE, the petition for review on certiorari is hereby DENIED. The Decision dated February
16, 2012 and the Resolution dated May 8, 2012 of the Court of Appeals in CA-G.R. No. SP No.
120371 are AFFIRMED.

With costs against the petitioners.

SO ORDERED.

MARTIN S. VILLARAMA, JR.

Associate Justice

WE CONCUR:
 epublic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 174353 September 10, 2014

NESTOR CHING and ANDREW WELLINGTON, Petitioners,

vs.
SUBIC BAY GOLF AND COUNTRY CLUB, INC., HU HO HSIU LIEN alias SUSAN HU, HU
TSUNG CHIEH alias JACK HU, HU TSUNG HUI, HU TSUNG TZU and REYNALD R.
SUAREZ, Respondents.

DECISION

LEONARDO-DE CASTRO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the review of
the Decision1dated October 27, 2005 of the Court of Appeals in CA-G.R. CV No. 81441, which
affirmed the Order2 dated July 8, 2003 of the Regional Trial Court (RTC), Branch 72 of Olongapo
City in Civil Case No. 03-001 dismissing the Complaint filed by herein petitioners.

On February 26, 2003, petitioners Nestor Ching and Andrew Wellington filed a Complaint3 with the
RTC of Olongapo City on behalf of the members of Subic Bay Golf and Country Club, Inc. (SBGCCI)
against the said country club and its Board of Directors and officers under the provisions of
Presidential Decree No. 902-A in relation to Section 5.2 of the Securities Regulation Code. The
Subic Bay Golfers and Shareholders Incorporated (SBGSI), a corporation composed of shareholders
of the defendant corporation, was also named as plaintiff. The officers impleaded as defendants
were the following: (1) itsPresident, Hu Ho Hsiu Lien alias Susan Hu; (2) its treasurer, Hu Tsung
Chieh alias Jack Hu; (3) corporate secretary Reynald Suarez; and (4) directors Hu Tsung Hui and
Hu Tsung Tzu. The case was docketed as Civil Case No. 03-001. The complaint alleged that the
defendant corporation sold shares to plaintiffs at US$22,000.00 per share, presenting to them the
Articles of Incorporation which contained the following provision:

No profit shall inure to the exclusive benefit of any of its shareholders, hence, no dividends shall be
declared in their favor. Shareholders shall be entitled only to a pro-rata share of the assets of the
Club at the time of its dissolution or liquidation.4

However, on June 27, 1996, an amendment to the Articles of Incorporation was approved by the
Securities and Exchange Commission (SEC), wherein the above provision was changed as follows:

No profit shall inure to the exclusive benefit of any of its shareholders, hence, no dividends shall be
declared in their favor. In accordance with the Lease and Development Agreement by and between
Subic Bay Metropolitan Authority and The Universal International Group of Taiwan, where the golf
courseand clubhouse component thereof was assigned to the Club, the shareholders shall not have
proprietary rights or interests over the properties of the Club.5x x x. (Emphasis supplied.)

Petitioners claimed in the Complaint that defendant corporation did not disclose to them the above
amendment which allegedly makes the shares non-proprietary, as it takes away the rightof the
shareholders to participate in the pro-rata distribution of the assets of the corporation after its
dissolution. According to petitioners, this is in fraud of the stockholders who only discovered the
amendment when they filed a case for injunction to restrain the corporation from suspending their
rights to use all the facilities of the club. Furthermore, petitioners alleged that the Board of Directors
and officers of the corporation did not call any stockholders meeting from the time of the
incorporation, in violation of Section 50 of the Corporation Code and the By-Laws of the corporation.
Neither did the defendant directors and officers furnish the stockholders with the financial statements
of the corporation nor the financial report of the operation of the corporation in violation of Section 75
of the Corporation Code. Petitioners also claim that on August 15, 1997, SBGCCI presented to the
SEC an amendment to the By-Laws of the corporation suspending the voting rights of the
shareholders except for the five founders shares. Said amendment was allegedly passed without
any stockholders meeting or notices to the stockholders in violation of Section 48 of the Corporation
Code.

The Complaint furthermore enumerated several instances of fraud in the management of the
corporation allegedly committed by the Board of Directors and officers of the corporation,
particularly:

a. The Board of Directors and the officers of the corporation did not indicate in its financial
report for the year 1999 the amount of 235,584,000.00 collected from the subscription of
409 shareholders who paid U.S.$22,000.00 for one (1) share of stock at the then prevailing
rate of 26.18 to a dollar. The stockholders were not informed how these funds were spent
or its whereabouts.

b. The Corporation has been collecting green fees from the patrons of the golf course at an
average sum of 1,600.00 per eighteen (18) holes but the income is not reported in their
yearly report. The yearly report for the year 1999 contains the report of the Independent
Public Accountant who stated that the company was incorporated on April 1, 1996 but has
not yet started its regular business operation. The golf course has been in operation since
1997 and as such has collected green fees from non-members and foreigners who played
golf in the club. There is no financial report as to the income derived from these sources.

c. There is reliable information that the Defendant Corporation has not paid its rentals to the
Subic Bay Metropolitan Authority which up to the present is estimated to be not less than one
(1) million U.S. Dollars. Furthermore, the electric billings of the corporation [have] not been
paid which amounts also to several millions of pesos.

d. That the Supreme Court sustained the pre-termination of its contract with the SBMA and
presently the club is operating without any valid contract with SBMA. The defendant was
ordered by the Supreme Court to yield the possession, the operation and the management of
the golf course to SBMA. Up to now the defendants [have] defied this Order.

e. That the value of the shares of stock of the corporation has drastically declined from its
issued value of U.S.$22,000.00 to only Two Hundred Thousand Pesos, (200,000.00)
Philippine Currency. The shareholders [have] lost in terms ofinvestment the sum estimated
to be more than two hundred thousand pesos.This loss is due to the fact that the Club is
mismanaged and the golf course is poorly maintained. Other amenities of the Club has (sic)
not yet been constructed and are not existing despite the lapse of morethan five (5) years
from the time the stocks were offered for sale to the public. The cause of the decrease in
value of the sharesof stocks is the fraudulent mismanagement of the club.6

Alleging that the stockholders suffered damages as a result of the fraudulent mismanagement of the
corporation, petitioners prayed in their Complaint for the following:
WHEREFORE, it is most respectfully prayed that upon the filing of this case a temporary restraining
order be issued enjoining the defendants from acting as Officers and Board of Directors of the
Corporation. After hearing[,] a writ of preliminary injunction be issued enjoining defendants to act as
Board of Directors and Officers of the Corporation. In the meantime a Receiver be appointed by the
Court to act as such until a duly constituted Board of Directors and Officers of the Corporation be
elected and qualified.

That defendants be ordered to pay the stockholders damages in the sum of Two Hundred Thousand
Pesos each representing the decrease in value of their shares of stocks plus the sum of
100,000.00 as legal expense and attorneys fees, as well as appearance fee of 4,000.00 per
hearing.7

In their Answer, respondents specifically denied the allegations of the Complaint and essentially
averred that:

(a) The subscriptions of the 409 shareholders were paid to Universal International Group
Development Corporation (UIGDC), the majority shareholder of SBGCCI, from whom
plaintiffs and other shareholders bought their shares;8

(b) Contrary to the allegations in the Complaint, said subscriptions were reflected
inSBGCCIs balance sheets for the fiscal years 1998 and 1999;9

(c) Plaintiffs were never presented the original Articles of Incorporation of SBGCCI since
their shares were purchased after the amendment of the Articles of Incorporation and such
amendment was publicly known to all members prior and subsequent to the said
amendment;10

(d) Shareholders meetingshad been held and the corporate acts complained of were
approved at shareholders meetings;11

(e) Financial statements of SBGCCI had always been presented to shareholders justifiably
requesting copies;12

(f) Green fees collected were reported in SBGCCIs audited financial statements;13

(g) Any unpaid rentals are the obligation of UIGDC with SBMA and SBGCCI continued to
operate under a valid contract with the SBMA;14 and

(h) SBGCCIs Board of Directors was not guilty of any mismanagement and in fact the value
of members shares have increased.15

Respondents further claimed by way ofdefense that petitioners failed (a) to show that it was
authorized by SBGSI to file the Complaint on the said corporations behalf; (b) to comply with the
requisites for filing a derivative suit and an action for receivership; and (c) to justify their prayer for
injunctive relief since the Complaint may be considered a nuisance or harassment suit under Section
1(b), Rule1 of the Interim Rules of Procedure for Intra-Corporate Controversies.16 Thus, they prayed
for the dismissal of the Complaint.

On July 8, 2003, the RTC issued an Order dismissing the Complaint. The RTC held that the action is
a derivative suit, explaining thus:
The Court finds that this case is intended not only for the benefit of the two petitioners. This is
apparentfrom the caption of the case which reads Nestor Ching, Andrew Wellington and the Subic
Bay Golfers and Shareholders, Inc., for and in behalf of all its members as petitioners. This is also
shown in the allegations of the petition[.] x x x.

On the bases of these allegations of the petition, the Court finds that the case is a derivative suit.
Being a derivative suit in accordance with Rule 8 of the Interim Rules, the stockholders and
members may bring an action in the name of the corporation or association provided that he (the
minority stockholder) exerted all reasonable efforts and allege[d] the same with particularity in the
complaint to exhaust of (sic) all remedies available under the articles of incorporation, by-laws or
rules governing the corporation or partnership to obtain the reliefs he desires. An examination of the
petition does not show any allegation that the petitioners applied for redress to the Board of
Directors of respondent corporation there being no demand, oralor written on the respondents to
address their complaints. Neither did the petitioners appl[y] for redress to the stockholders of the
respondent corporation and ma[k]e an effort to obtain action by the stockholders as a whole.
Petitioners should have asked the Board of Directors of the respondent corporation and/or its
stockholders to hold a meeting for the taking up of the petitioners rights in this petition.17

The RTC held that petitioners failed to exhaust their remedies within the respondent corporation
itself. The RTC further observed that petitioners Ching and Wellington were not authorized by their
co-petitioner Subic Bay Golfers and Shareholders Inc. to filethe Complaint, and therefore had no
personality to file the same on behalf ofthe said shareholders corporation. According to the RTC, the
shareholdings of petitioners comprised of two shares out of the 409 alleged outstanding shares or
0.24% is an indication that the action is a nuisance or harassment suit which may be dismissed
either motu proprio or upon motion in accordance with Section 1(b) of the Interim Rules of Procedure
for Intra-Corporate Controversies.18

Petitioners Ching and Wellington elevated the case to the Court of Appeals, where it was docketed
as CA-G.R. CV No. 81441. On October 27, 2005, the Court of Appeals rendered the assailed
Decision affirming that of the RTC.

Hence, petitioners resort to the present Petition for Review, wherein they argue that the Complaint
they filed with the RTC was not a derivative suit. They claim that they filed the suit in their own right
as stockholders against the officers and Board of Directors of the corporation under Section 5(a) of
Presidential DecreeNo. 902-A, which provides:

Sec. 5. In addition tothe regulatory and adjudicative functions of the Securities and Exchange
Commission over corporations, partnerships and other forms of associations registered with it as
expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to
hear and decide cases involving:

(a) Devices or schemes employed by or any acts of the board of directors, business
associates, its officers or partners, amounting to fraud and misrepresentation which may be
detrimental to the interest of the public and/or of the stockholders, partners, members of
associations or organizations registered with the Commission.

According to petitioners, the above provision (which should be read in relation to Section 5.2 of the
Securities Regulation Code which transfers jurisdiction over such cases to the RTC) allows any
stockholder to file a complaint against the Board of Directors for employing devices or schemes
amounting to fraud and misrepresentation which is detrimental to the interest of the public and/or the
stockholders.
In the alternative, petitioners allege that if this Court rules that the Complaint is a derivative suit, it
should nevertheless reverse the RTCs dismissal thereof on the ground of failure to exhaust
remedies within the corporation. Petitioners cite Republic Bank v. Cuaderno19 wherein the Court
allowed the derivative suit even without the exhaustion of said remedies as it was futile to do so
since the Board ofDirectors were all members of the same family. Petitioners also point out that in
Cuadernothis Court held that the fact that therein petitioners had only one share of stock does not
justify the denial of the relief prayed for.

To refute the lower courts ruling that there had been non-exhaustion of intra-corporate remedies on
petitioners part, they claim that they filed in Court a case for Injunction docketed as Civil Case No.
103-0-01, to restrain the corporation from suspending their rights to use all the facilities of the club,
on the ground that the club cannot collect membership fees until they have completed the amenities
as advertised when the shares of stock were sold to them. They allegedly asked the Club to produce
the minutes of the meeting of the Board of Directors allowing the amendments of the Articles of
Incorporation and By-Laws. Petitioners likewise assail the dismissal of the Complaint for being a
harassment ornuisance suit before the presentation of evidence. They claim that the evidence they
were supposed to present will show that the members of the Board of Directors are not qualified
managers of a golf course.

We find the petition unmeritorious.

At the outset, it should be noted thatthe Complaint in question appears to have been filed only by the
two petitioners, namely Nestor Ching and Andrew Wellington, who each own one stock in the
respondent corporation SBGCCI. While the caption of the Complaint also names the "Subic Bay
Golfers and Shareholders Inc. for and in behalf of all its members," petitioners did not attach any
authorization from said alleged corporation or its members to file the Complaint. Thus, the Complaint
is deemed filed only by petitioners and not by SBGSI.

On the issue of whether the Complaint is indeed a derivative suit, we are mindful of the doctrine that
the nature of an action, as well as which court or body has jurisdiction over it, isdetermined based on
the allegations contained in the complaint of the plaintiff, irrespective of whether or not the plaintiff is
entitled to recover upon all or some of the claims asserted therein.20

We have also held that the body rather than the title of the complaint determines the nature of an
action.21

In Cua, Jr. v. Tan,22 the Court previously elaborated on the distinctions among a derivative suit,
anindividual suit, and a representative or class suit:

A derivative suit must be differentiated from individual and representative or class suits, thus:

"Suits by stockholders or members of a corporation based on wrongful or fraudulent acts of directors

or other persons may be classified intoindividual suits, class suits, and derivative suits. Where a
stockholder or member is denied the right of inspection, his suit would be individual because the
wrong is done to him personally and not to the other stockholders or the corporation. Where the
wrong is done to a group of stockholders, as where preferred stockholders rights are violated, a
class or representative suitwill be proper for the protection of all stockholders belonging to the same
group. But where the acts complained of constitute a wrong to the corporation itself, the cause of
action belongs to the corporation and not to the individual stockholder or member. Although in most
every case of wrong to the corporation, each stockholder is necessarily affected because the value
of his interest therein would be impaired, this fact of itself is not sufficient to give him an individual
cause of action since the corporation is a person distinct and separate from him, and can and should
itself sue the wrongdoer. Otherwise, not only would the theory of separate entity be violated, but
there would be multiplicity of suits as well as a violation of the priority rights of creditors.
Furthermore,there is the difficulty of determining the amount of damages that should be paid to each
individual stockholder.

However, in cases of mismanagement where the wrongful acts are committed by the directors or
trustees themselves, a stockholder or member may find that he has no redress because the former
are vested by law with the right to decide whether or notthe corporation should sue, and they will
never be willing to sue themselves. The corporation would thus be helpless to seek remedy.
Because of the frequent occurrence of such a situation, the common law gradually recognized the
right of a stockholder to sue on behalf of a corporation in what eventually became known as a
"derivative suit." It has been proven to be an effective remedy of the minority against the abuses of
management. Thus, an individual stockholder is permitted to institute a derivative suit on behalf of
the corporation wherein he holds stock in order to protect or vindicate corporate rights, whenever
officials of the corporation refuse to sue orare the ones to be sued or hold the control of the
corporation. In such actions, the suing stockholder is regarded as the nominal party, with the
corporation as the party in interest."

xxxx

Indeed, the Court notes American jurisprudence to the effect that a derivative suit, on one hand, and
individual and class suits, on the other, are mutually exclusive, viz.:

"As the Supreme Court has explained: "A shareholders derivative suit seeks to recover for the
benefit of the corporation and its whole body of shareholders when injury is caused to the
corporation that may not otherwise be redressed because of failureof the corporation to act. Thus,
the action is derivative, i.e., in the corporate right, if the gravamen of the complaint is injury to the
corporation, or to the whole body of its stock and property without any severance or distribution
among individual holders, or it seeks to recover assets for the corporation or to prevent the
dissipation of its assets. x x x. In contrast, "a directaction [is one] filed by the shareholder individually
(or on behalf of a classof shareholders to which he or she belongs) for injury to his or her interestas
a shareholder. x x x. [T]he two actions are mutually exclusive: i.e., the right of action and recovery
belongs to either the shareholders (direct action) *651 or the corporation(derivative action)." x x x.

Thus, in Nelson v. Anderson(1999), x x x, the **289 minority shareholder alleged that the other
shareholder of the corporation negligently managed the business, resulting in its total failure. x x x.
The appellate court concluded that the plaintiff could not maintain the suit as a direct action:
"Because the gravamen of the complaint is injury to the whole body of its stockholders, it was for the
corporation to institute and maintain a remedial action. x x x. A derivative action would have been
appropriate if its responsible officials had refused or failed to act." x x x. The court wenton to note
that the damages shown at trial were the loss of corporate profits. x x x. Since "[s]hareholders own
neither the property nor the earnings of the corporation," any damages that the plaintiff alleged that
resulted from such loss of corporate profits "were incidental to the injury to the corporation."
(Citations omitted.)

The reliefs sought in the Complaint, namely that of enjoining defendants from acting as officers and
Board of Directors of the corporation, the appointment of a receiver, and the prayer for damages in
the amount of the decrease in the value of the sharesof stock, clearly show that the Complaint was
filed to curb the alleged mismanagement of SBGCCI. The causes of action pleaded by petitioners do
not accrue to a single shareholder or a class of shareholders but to the corporation itself.
However, as minority stockholders, petitioners do not have any statutory right to override the
business judgments of SBGCCIs officers and Board of Directors on the ground of the latters alleged
lackof qualification to manage a golf course. Contraryto the arguments of petitioners, Presidential
Decree No. 902-A, which is entitled REORGANIZATION OF THE SECURITIES AND EXCHANGE
COMMISSION WITH ADDITIONAL POWERS AND PLACING THE SAID AGENCY UNDER THE
ADMINISTRATIVE SUPERVISION OF THE OFFICE OF THE PRESIDENT, does not grant minority
stockholders a cause of action against waste and diversion by the Board of Directors, but merely
identifies the jurisdiction of the SEC over actionsalready authorized by law or jurisprudence. It is
settled that a stockholders right to institute a derivative suit is not based on any express provisionof
the Corporation Code, or even the Securities Regulation Code, but is impliedly recognized when the
said laws make corporate directors or officers liable for damages suffered by the corporation and its
stockholders for violation of their fiduciary duties.23

At this point, we should take note that while there were allegations in the Complaint of fraud in their
subscription agreements, such as the misrepresentation of the Articles of Incorporation, petitioners
do not pray for the rescission of their subscription or seekto avail of their appraisal rights. Instead,
they ask that defendants be enjoined from managing the corporation and to pay damages for their
mismanagement. Petitioners only possible cause of action as minority stockholders against the
actions of the Board of Directors is the common law right to file a derivative suit. The legal standing
of minority stockholders to bring derivative suits is not a statutory right, there being no provision in
the Corporation Code or related statutes authorizing the same, but is instead a product of
jurisprudence based on equity. However, a derivative suit cannot prosper without first complying with
the legal requisites for its institution.24

Section 1, Rule 8 of the Interim Rules of Procedure Governing IntraCorporate Controversies

imposes the following requirements for derivative suits:

(1) He was a stockholder or member at the time the acts or transactions subject of the action
occurred and at the time the action was filed;

(2) He exerted all reasonable efforts, and alleges the same with particularity in the complaint,
to exhaust all remedies available under the articles of incorporation, by-laws, laws or rules
governing the corporation or partnership to obtain the relief he desires;

(3) No appraisal rights are available for the act or acts complained of; and

(4) The suit is not a nuisance or harassment suit.

The RTC dismissed the Complaint for failure to comply with the second and fourth requisites above.

Upon a careful examination of the Complaint, this Court finds that the same should not have been
dismissed on the ground that it is a nuisance or harassment suit. Although the shareholdings of
petitioners are indeed only two out of the 409 alleged outstanding shares or 0.24%, the Court has
held that it is enough that a member or a minority of stockholders file a derivative suit for and in
behalf of a corporation.25

With regard, however, to the second requisite, we find that petitioners failed to state with particularity
in the Complaint that they had exerted all reasonable efforts to exhaust all remedies available under
the articles of incorporation, by-laws, and laws or rules governing the corporation to obtain the relief
they desire. The Complaint contained no allegation whatsoever of any effort to avail of intra-
corporate remedies. Indeed, even if petitioners thought it was futile to exhaust intra-corporate
remedies, they should have stated the same in the Complaint and specified the reasons for such
opinion. Failure to do so allows the RTC to dismiss the Complaint, even motu proprio, in accordance
with the Interim Rules. The requirement of this allegation in the Complaint is not a useless formality
which may be disregarded at will. We ruled in Yu v. Yukayguan26:
1wphi1

The wordings of Section 1, Rule8 of the Interim Rules of Procedure Governing Intra-Corporate
Controversies are simple and do not leave room for statutory construction. The second paragraph
thereof requires that the stockholder filing a derivative suit should have exerted all reasonable efforts
to exhaust all remedies availableunder the articles of incorporation, by-laws, laws or rules governing
the corporation or partnership to obtain the relief he desires; and to allege such fact with
particularityin the complaint. The obvious intent behind the rule is to make the derivative suit the final
recourse of the stockholder, after all other remedies to obtain the relief sought had failed.

WHEREFORE, the Petition for Review is hereby DENIED. The Decision of the Court of Appeals in
CA-G.R. CV No. 81441 which affirmed the Order of the Regional Trial Court (RTC) of Olongapo City
dismissing the Complaint filed thereon by herein petitioners is AFFIRMED.

SO ORDERED.

TERESITA J.LEONARDO-DE CASTRO**

Acting Chairperson, Associate Justice

WE CONCUR:
 FERDINAND A. CRUZ, 332 Edang G.R. No. 154464
St., Pasay City,
Petitioner, Present:

- versus - TINGA, J.,*

CHICO-NAZARIO,

JUDGE PRISCILLA MIJARES, Presiding Judge, Acting Chairperson,

Regional Trial Court, Branch 108, Pasay VELASCO, JR.,*
City, Metro Manila,
NACHURA, and
Public Respondent.
REYES, JJ.

BENJAMIN MINA, JR., 332 Edang

St., Pasay City, Promulgated:

Private Respondent.
September 11, 2008

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

DECISION

NACHURA, J.:

This is a Petition for Certiorari, Prohibition and Mandamus, with prayer for
the issuance of a writ of preliminary injunction under Rule 65 of the Rules of
Court. It was directly filed with this Court assailing the Resolutions dated May 10,
2002[1]and July 31, 2002[2] of the Regional Trial Court (RTC), Branch 108, Pasay City,
which denied the appearance of the plaintiff Ferdinand A. Cruz, herein petitioner,
as party litigant, and the refusal of the public respondent, Judge Priscilla Mijares,
to voluntarily inhibit herself from trying the case. No writ of preliminary injunction
was issued by this Court.

The antecedents:

On March 5, 2002, Ferdinand A. Cruz (petitioner) sought permission to enter his

appearance for and on his behalf, before the RTC, Branch 108, Pasay City, as the
plaintiff in Civil Case No. 01-0410, for Abatement of Nuisance. Petitioner, a fourth
year law student, anchors his claim on Section 34 of Rule 138 of the Rules of
Court[3] that a non-lawyer may appear before any court and conduct his litigation
personally.

During the pre-trial, Judge Priscilla Mijares required the petitioner to secure
a written permission from the Court Administrator before he could be allowed to
appear as counsel for himself, a party-litigant. Atty. Stanley Cabrera, counsel for
Benjamin Mina, Jr., filed a Motion to Dismiss instead of a pre-trial brief to which
petitioner Cruz vehemently objected alleging that a Motion to Dismiss is not
allowed after the Answer had been filed. Judge Mijares then remarked, Hay naku,
masama yung marunong pa sa Huwes. Ok? and proceeded to hear the pending
Motion to Dismiss and calendared the next hearing on May 2, 2002.

On March 6, 2002, petitioner Cruz filed a Manifestation and Motion to

Inhibit,[4] praying for the voluntary inhibition of Judge Mijares. The Motion alleged
that expected partiality on the part of the respondent judge in the conduct of the
trial could be inferred from the contumacious remarks of Judge Mijares during the
pre-trial. It asserts that the judge, in uttering an uncalled for remark, reflects a
negative frame of mind, which engenders the belief that justice will not be
served.[5]
 In an Order[6] dated April 19, 2002, Judge Mijares denied the motion for
inhibition stating that throwing tenuous allegations of partiality based on the said
remark is not enough to warrant her voluntary inhibition, considering that it was
said even prior to the start of pre-trial. Petitioner filed a motion for
reconsideration[7] of the said order.

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

In a motion for reconsideration,[9] petitioner reiterated that the basis of his

appearance was not Rule 138-A, but Section 34 of Rule 138. He contended that the
two Rules were distinct and are applicable to different circumstances, but the
respondent judge denied the same, still invoking Rule 138-A, in an Order[10] dated
July 31, 2002.

On August 16, 2002, the petitioner directly filed with this Court, the instant
petition and assigns the following errors:

I.

THE RESPONDENT REGIONAL TRIAL COURT GRAVELY ERRED AND

ABUSED ITS DISCRETION WHEN IT DENIED THE APPEARANCE OF THE
PETITIONER, FOR AND IN THE LATTERS BEHALF, IN CIVIL CASE NO. 01-
0401 [sic] CONTRARY TO RULE 138, SECTION 34 OF THE RULES OF COURT,
PROVIDING FOR THE APPEARANCE OF NON-LAWYERS AS A PARTY
LITIGANT;
 II.

THE RESPONDENT COURT GRAVELY ERRED AND ABUSED ITS DISCRETION

WHEN IT DID NOT VOLUNTARILY INHIBIT DESPITE THE ADVENT OF
JURISPRUDENCE [sic] THAT SUCH AN INHIBITION IS PROPER TO
PRESERVE THE PEOPLES FAITH AND CONFIDENCE TO THE COURTS.

The core issues raised before the Court are: (1) whether the extraordinary
writs of certiorari, prohibition and mandamus under Rule 65 of the 1997 Rules of
Court may issue; and (2) whether the respondent court acted with grave abuse of
discretion amounting to lack or excess of jurisdiction when it denied the
appearance of the petitioner as party litigant and when the judge refused to inhibit
herself from trying the case.

This Courts jurisdiction to issue writs of certiorari, prohibition, mandamus

and injunction is not exclusive; it has concurrent jurisdiction with the RTCs and the
Court of Appeals. This concurrence of jurisdiction is not, however, to be taken as
an absolute, unrestrained freedom to choose the court where the application
therefor will be directed.[11] A becoming regard of the judicial hierarchy most
certainly indicates that petitions for the issuance of extraordinary writs against the
RTCs should be filed with the Court of Appeals.[12] The hierarchy of courts is
determinative of the appropriate forum for petitions for the extraordinary writs;
and only in exceptional cases and for compelling reasons, or if warranted by the
nature of the issues reviewed, may this Court take cognizance of petitions filed
directly before it.[13]

Considering, however, that this case involves the interpretation of Section

34, Rule 138 and Rule 138-A of the Rules of Court, the Court takes cognizance of
herein petition. Nonetheless, the petitioner is cautioned not to continue his
practice of filing directly before this Court petitions under Rule 65 when the issue
raised can be resolved with dispatch by the Court of Appeals. We will not tolerate
litigants who make a mockery of the judicial hierarchy as it necessarily delays more
important concerns before us.

In resolving the second issue, a comparative reading of Rule 138, Section 34 and
Rule 138-A is necessary.

Rule 138-A, or the Law Student Practice Rule, provides:

RULE 138-A

LAW STUDENT PRACTICE RULE

Section 1. Conditions for Student Practice. A law student who has

successfully completed his 3rd year of the regular four-year prescribed
law curriculum and is enrolled in a recognized law school's clinical legal
education program approved by the Supreme Court, may appear
without compensation in any civil, criminal or administrative case before
any trial court, tribunal, board or officer, to represent indigent clients
accepted by the legal clinic of the law school.

Sec. 2. Appearance. The appearance of the law student authorized by

this rule, shall be under the direct supervision and control of a member
of the Integrated Bar of the Philippines duly accredited by the law
school. Any and all pleadings, motions, briefs, memoranda or other
papers to be filed, must be signed by the supervising attorney for and in
behalf of the legal clinic.
 The respondent court held that the petitioner could not appear for himself
and on his behalf because of his failure to comply with Rule 138-A. In denying
petitioners appearance, the court a quo tersely finds refuge in the fact that, on
December 18, 1986, this Court issued Circular No. 19, which eventually became
Rule 138-A, and the failure of Cruz to prove on record that he is enrolled in a
recognized schools clinical legal education program and is under supervision of an
attorney duly accredited by the law school.

However, the petitioner insisted that the basis of his appearance was Section 34 of
Rule 138, which provides:

Sec. 34. By whom litigation is conducted. - In the court of a justice of the

peace, a party may conduct his litigation in person, with the aid of an
agent or friend appointed by him for that purpose, or with the aid of an
attorney. In any other court, a party may conduct his litigation
personally or by aid of an attorney, and his appearance must be either
personal or by a duly authorized member of the bar.

and is a rule distinct from Rule 138-A.

From the clear language of this provision of the Rules, it will have to be
conceded that the contention of the petitioner has merit. It recognizes the right of
an individual to represent himself in any case to which he is a party. The Rules state
that a party may conduct his litigation personally or with the aid of an attorney, and
that his appearance must either be personal or by a duly authorized member of the
Bar. The individual litigant may personally do everything in the course of
proceedings from commencement to the termination of the
[14]
litigation. Considering that a party personally conducting his litigation is
restricted to the same rules of evidence and procedure as those qualified to
practice law,[15] petitioner, not being a lawyer himself, runs the risk of falling into
the snares and hazards of his own ignorance. Therefore, Cruz as plaintiff, at his own
instance, can personally conduct the litigation of Civil Case No. 01-0410. He would
then be acting not as a counsel or lawyer, but as a party exercising his right to
represent himself.

The trial court must have been misled by the fact that the petitioner is a law
student and must, therefore, be subject to the conditions of the Law Student
Practice Rule. It erred in applying Rule 138-A, when the basis of the petitioners
claim is Section 34 of Rule 138. The former rule provides for conditions when a law
student may appear in courts, while the latter rule allows the appearance of a non-
lawyer as a party representing himself.

The conclusion of the trial court that Rule 138-A superseded Rule 138 by
virtue of Circular No. 19 is misplaced. The Court never intended to repeal Rule 138
when it released the guidelines for limited law student practice. In fact, it was
intended as an addendum to the instances when a non-lawyer may appear in courts
and was incorporated to the Rules of Court through Rule 138-A.

It may be relevant to recall that, in respect to the constitutional right of an

accused to be heard by himself and counsel,[16] this Court has held that during the
trial, the right to counsel cannot be waived.[17] The rationale for this ruling was
articulated in People v. Holgado,[18] where we declared that even the most
intelligent or educated man may have no skill in the science of law, particularly in
the rules of procedure, and without counsel, he may be convicted not because he
is guilty but because he does not know how to establish his innocence.

The case at bar involves a civil case, with the petitioner as plaintiff
therein. The solicitous concern that the Constitution accords the accused in a
criminal prosecution obviously does not obtain in a civil case. Thus, a party litigant
in a civil case, who insists that he can, without a lawyers assistance, effectively
undertake the successful pursuit of his claim, may be given the chance to do so. In
this case, petitioner alleges that he is a law student and impliedly asserts that he
has the competence to litigate the case himself. Evidently, he is aware of the perils
incident to this decision.

In addition, it was subsequently clarified in Bar Matter 730, that by virtue of

Section 34, Rule 138, a law student may appear as an agent or a friend of a party
litigant, without need of the supervision of a lawyer, before inferior courts. Here,
we have a law student who, as party litigant, wishes to represent himself in
court. We should grant his wish.

Additionally, however, petitioner contends that the respondent judge

committed manifest bias and partiality by ruling that there is no valid ground for
her voluntary inhibition despite her alleged negative demeanor during the pre-trial
when she said: Hay naku, masama yung marunong pa sa Huwes. Ok? Petitioner
avers that by denying his motion, the respondent judge already manifested
conduct indicative of arbitrariness and prejudice, causing petitioners and his co-
plaintiffs loss of faith and confidence in the respondents impartiality.

We do not agree.

It must be noted that because of this incident, the petitioner filed an

administrative case[19] against the respondent for violation of the Canons of Judicial
Ethics, which we dismissed for lack of merit on September 15, 2002. We now adopt
the Courts findings of fact in the administrative case and rule that there was no
grave abuse of discretion on the part of Judge Mijares when she did not inhibit
herself from the trial of the case.

In a Motion for Inhibition, the movant must prove the ground for bias and
prejudice by clear and convincing evidence to disqualify a judge from participating
in a particular trial,[20] as voluntary inhibition is primarily a matter of conscience and
addressed to the sound discretion of the judge. The decision on whether she should
inhibit herself must be based on her rational and logical assessment of the
circumstances prevailing in the case before her.[21] Absent clear and convincing
proof of grave abuse of discretion on the part of the judge, this Court will rule in
favor of the presumption that official duty has been regularly performed.

WHEREFORE, the Petition is PARTIALLY GRANTED. The assailed Resolution

and Order of the Regional Trial Court, Branch
108, Pasay City are MODIFIED. Regional Trial Court, Branch 108, Pasay City
is DIRECTED to ADMIT the Entry of Appearance of petitioner in Civil Case No. 01-
0410 as a party litigant.

No pronouncement as to costs.

SO ORDERED.
 SECOND DIVISION

THE REPUBLIC OF THE PHILIPPINES, G.R. Nos. 170615-16

represented by the OFFICE OF THE
OMBUDSMAN, MA. MERCEDITAS N. Present:
GUTIERREZ, in her capacity as the
Ombudsman,
Petitioner, QUISUMBING, J., Chairperson,
CARPIO MORALES,
CHICO-NAZARIO,
LEONARDO-DE CASTRO, and
- versus - BRION, JJ.

RUFINO V. MIJARES, ROBERTO G.

FERRERA, ALFREDO M. RUBA and
Promulgated:
ROMEO QUERUBIN,
Respondents.
July 9, 2009
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DECISION
QUISUMBING, J.:

For review on certiorari are the Decision[1] dated June 23, 2005, and the
Resolution[2] dated November 25, 2005, of the Court of Appeals in CA-G.R. SP Nos.
76700 and 76484. The appellate court had reversed and set aside the
Decision[3]dated March 5, 2002, of the Office of the Ombudsman in OMB-ADM-0-
00-0336 and ordered (1) the reinstatement of respondents Romeo Querubin and
Rufino V. Mijares to their respective positions in the government service with full
payment of backwages and other benefits, and (2) the full payment of backwages
and other benefits of respondent Alfredo M. Ruba.

The administrative case against respondents stemmed from a controversy

involving a parcel of land owned by the Philippine Communications Satellite
Corporation (PHILCOMSAT) located in Barangay Pinugay, Baras, Rizal. Claiming that
the subject land is covered by the Comprehensive Agrarian Reform Program
(CARP), members of the Southern Pinugay Farmers Multi-Purpose Cooperative, Inc.
(SPFMPCI) occupied about 100 hectares thereof. They introduced improvements
such as houses, fruit-bearing trees, vegetables, palay and other crops.

PHILCOMSAT filed a protest before the Department of Agrarian Reform

(DAR) claiming that the land was exempt from CARP coverage since it was an
integral part of the Philippine Space Communications Operation. The DAR denied
the protest. PHILCOMSAT then filed a petition for review with the Court of Appeals.

During the pendency of the petition, respondent Mayor Roberto G. Ferrera

issued an order[4] directing respondent Engr. Romeo Querubin to demolish the said
houses and improvements. Meanwhile, in a pending case between PHILCOMSAT
and SPFMPCI before the Commission on the Settlement of Land Problems,
respondent Commissioner Rufino V. Mijares issued an order[5] interposing no
objection to the order of demolition. Ferrera then directed Querubin to implement
the order. He also sought police assistance.

On March 24, 2000, the houses and improvements on the subject land were
demolished and destroyed. As a result, SPFMPCI filed an administrative case for
grave misconduct and harassment against respondents before the Office of the
Ombudsman.

In their Joint Counter-Affidavit,[6] respondents argued that the SPFMPCI

members were not in the list of occupants/potential farmer-beneficiaries of
PHILCOMSAT landholdings on file with the Municipal Agrarian Reform Office (MARO)
and Provincial Agrarian Reform Office (PARO). Thus, they were illegal entrants whose
houses and improvements constituted a nuisance that may be abated. More
importantly, the houses and improvements were constructed without the required
building permits under Section 301[7] of Presidential Decree No. 1096 or the National
Building Code.[8] Thus, its summary demolition was justified under Section
27,[9] Article VII of Republic Act No. 7279 or the Urban Development and Housing Act
of 1992.[10]

In the meantime, on November 23, 2001, the Court of Appeals rendered a

decision in the petition for review of the DAR decision finding the subject land
exempt from CARP coverage.[11] This was later affirmed by the Supreme Court in a
Decision dated June 15, 2006.[12]

Meanwhile on March 5, 2002, the Office of the Ombudsman declared the

demolition unjustified. It noted that the demolished houses and improvements were
traditional indigenous family dwellings intended for the use and occupancy by the
owners family only and made of native materials, the total cost of which does not
exceed P15,000 and deemed exempted from the payment of building permit fees. It
added that the fact that the same were constructed without the necessary building
permits do not automatically necessitate its demolition since only dangerous or
ruinous buildings or structures may be ordered repaired, vacated or demolished
under Section 215[13] of P.D. No. 1096. In this case, the demolished houses and
improvements were neither dangerous nor ruinous. Further, the same cannot be
summarily demolished under Section 27, Article VII of Rep. Act No. 7279 since the
law does not apply to rural lands and lands under CARP coverage. In conclusion, the
Office of the Ombudsman held respondents guilty of grave misconduct for their
flagrant disregard of established rules, thus:
WHEREFORE, the foregoing premises considered, this Office hereby find[s]:

(1) Respondents RUFINO V. MIJARES, Commissioner, Commission on the

Settlement of Land Problems with office address at Aries Bldg., 103 Quezon Avenue,
Quezon City; MAYOR ROBERT FERRERA, Municipal Mayor, Baras, Rizal; ENGR. ROMEO
QUERUBIN, Municipal Engineer, Baras, Rizal, and ALFREDO RUBA, Barangay Chairman of
Barangay Pinugay, Baras, Rizal GUILTY of the administrative offense of GRAVE
MISCONDUCT with the penalty of DISMISSAL FROM THE SERVICE with FORFEITURE OF
RETIREMENT BENEFITS, CANCELLATION OF ELIGIBILITY, AND THE PERPETUAL
DISQUALIFICATION FOR REEMPLOYMENT IN THE GOVERNMENT SERVICE pursuant to
Section 25 of Republic Act No. 6770, otherwise known as the Ombudsman Act of 1989 and
the pertinent provisions of Civil Service Commission Resolution No. 991936 otherwise
known as the UNIFORM RULES ON ADMINISTRATIVE CASES IN THE CIVIL SERVICE.

(2) Respondents LUIZO TICMAN, PNP Superintendent, Provincial Director of the

Rizal Provincial Office and ORLANDO PAZ, Police Inspector, Baras, Rizal Police Station are
hereby EXONERATED and the case against them DISMISSED.
 (3) The Governor of the Province of Rizal, the Secretary of the Department of
Interior and Local Government and the Secretary of the Department of Justice are hereby
directed to immediately implement this Decision in accordance with law and to inform
this Office of their action within thirty (30) days upon receipt [hereof].

SO ORDERED.[14]

Mijares, Ferrera and Ruba filed a joint motion for reconsideration while
Querubin filed a separate motion for reconsideration. Both motions were
denied. Thus, they filed petitions for review with the Court of Appeals which were
later consolidated.

On June 23, 2005, the appellate court ruled that: First, the order of
demolition was based solely on the failure of the SPFMPCI members to secure the
necessary building permits to construct the houses and improvements. According
to the order, this violated Section 301 of P.D. No. 1096 thereby warranting
summary demolition under Section 27, Article VII of Rep. Act No. 7279. Second,
respondents presented a list of the SPFMPCI members whose houses and
improvements were demolished as well as a list of occupants/potential farmer-
beneficiaries of PHILCOMSAT landholdings on file with the MARO and PARO. None
of the SPFMPCI members was in the list of occupants/potential farmer-
beneficiaries of PHILCOMSAT landholdings. Thus, they are not the owners
or bona fide occupants of the subject land and may be summarily evicted
therefrom. Third, Section 28[15] of Rep. Act No. 7279 which sets the guidelines in
executing eviction or demolition orders involving underprivileged and homeless
citizens does not apply to the eviction or demolition of professional
squatters. Neither are they entitled to the benefits of resettlement and/or
relocation under Rep. Act No. 7279. The mere identification of persons or groups
as professional squatters or squatting syndicates is sufficient authority for the local
government unit concerned to summarily evict them and to demolish their
dwellings or structures as well as to disqualify them from availing the benefits of
Rep. Act No. 7279.

The decretal portion of the Court of Appeals decision reads:

WHEREFORE, the petitions are GRANTED. The assailed decision of the Office of
the Ombudsman dated March 5, 2002, as well as the order dated February 17, 2003 in
OMB-ADM-0-00-0336 are hereby REVERSED and SET ASIDE. Petitioners Romeo Querubin
and Rufino V. Mijares are hereby REINSTATED immediately to their respective positions
 in the government service, more particularly in the Office of the
Mayor, Municipality of Baras, Rizal and the Commission on the Settlement of Land
Problems (COSLAP), with full payment of backwages and other benefits upon finality of
this decision. Petitioner Alfredo Ruba, who was re-elected as Barangay Chairman of
Pinugay, Baras, Rizal in the 2002 barangay election, is likewise entitled to full payment of
backwages and other benefits upon the finality of this decision.[16]

SO ORDERED.[17]

Dissatisfied, the Office of the Ombudsman appealed to this Court raising the
following issues:
I.

WHETHER OR NOT THE SUMMARY DEMOLITION OF THE HOUSES OWNED BY FARMER-

MEMBERS OF THE SPFMPCI WAS VALID UNDER R.A. 7279 AND P.D. 1096.

II.

WHETHER OR NOT RESPONDENTS ARE GUILTY OF GRAVE MISCONDUCT.

III.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS DECISION REVERSING THE

DECISION OF THE OMBUDSMAN IS VALID.[18]

There are two issues for our resolution: first, whether the summary
demolition of the houses and improvements was justified under Rep. Act No. 7279
and P.D. No. 1096; and second, whether respondents were guilty of grave
misconduct.

The Office of the Ombudsman contends that respondents acted in bad faith
in proceeding with the demolition although they knew that Rep. Act No. 7279 and
P.D. No. 1096 were inapplicable. Rep. Act No. 7279 applies only to urbanized areas
and does not include the subject land which is under CARP coverage. Respondents
also failed to follow the prescribed guidelines in carrying out a demolition. On the
other hand, P.D. No. 1096 exempts from the payment of building permit fees
traditional indigenous family dwellings such as the demolished houses and
improvements in this case. Likewise, only dangerous or ruinous buildings or
structures may be ordered repaired, vacated or demolished. The Office of the
Ombudsman concludes that respondents were guilty of grave misconduct.
 Respondents Mijares, Ferrera and Ruba counter that they were charged with
violating Rep. Act No. 7279. If this law is inapplicable to the instant case, then they
have no liability at all. They add that in the criminal case against them, the Office of
the Ombudsman recognized that the SPFMPCI members were professional
squatters.[19] They ratiocinate that as such, they should be summarily abated whether
the subject land was urbanized or not. They also argue that even if Rep. Act No. 7279
was inapplicable, they enforced the demolition in good faith. On the other hand,
respondent Querubin reiterates that the SPFMPCI members were professional
squatters who are not entitled to protection under either Rep. Act No. 7279 or P.D.
No. 1096.

It bears stressing that in administrative proceedings, the complainant has the

burden of proving, by substantial evidence, the allegations in the
complaint. Substantial evidence does not necessarily import preponderance of
evidence as is required in an ordinary civil case; rather, it is such relevant evidence as
a reasonable mind might accept as adequate to support a conclusion.[20] A thorough
examination of the records of this case reveals that such quantum of proof was not
met here.

Foremost, we find the reliance of both parties on the provisions of Rep. Act
No. 7279 and P.D. No. 1096 to determine the propriety of the demolition
implemented by respondents, misplaced.

Rep. Act No. 7279 covers lands in urban and urbanizable areas, including
existing areas for priority development, zonal improvement sites, slum improvement
and resettlement sites, and in other areas that may be identified by the local
government units as suitable for socialized housing.[21] On the other hand, P.D. No.
1096 applies to the design, location, sitting, construction, alteration, repair,
conversion, use, occupancy, maintenance, moving, demolition of, and addition to
public and private buildings and structures, except traditional indigenous family
dwellings as defined therein.[22]

The parcel of land involved in this case hosts the Philippine Space
Communications Center which consists of a satellite earth station that serves as the
communications gateway of the Philippines to more than two-thirds of the
world.[23] It was declared by P.D. No. 1845,[24] as amended by P.D. No. 1848,[25] as a
security zone to ensure its security and uninterrupted operation considering the
vital role of the earth station in the countrys telecommunications and national
development.[26] The law also placed it under the jurisdiction of the Ministry (now
Department) of National Defense which has the power and the authority to
determine who can occupy the areas within the security zone, and how the lands
shall be utilized.[27]

Clearly, P.D. Nos. 1845 and 1848 should govern notwithstanding the provisions
of Rep. Act No. 7279 and P.D. No. 1096 since the former laws have specific reference
to the use and occupation of the parcel of land in this case.

Based on these laws, we find the demolition implemented by respondents in

order. The SPFMPCI members occupied and introduced improvements in the parcel
of land under no right, title or vested interest whatsoever. They never secured the
prior written permission of the Secretary of National Defense as required by
law. Although the land was initially placed under CARP coverage and they claimed
to be farmer-beneficiaries, they were not included in the list of occupants/potential
farmer-beneficiaries of PHILCOMSAT landholdings on file with the MARO and
PARO.[28] In short, the SPFMPCI members never controverted the evidence
presented by respondents that they (the SPFMPCI members) were illegal occupants
of the land. Interestingly, even the Office of the Ombudsman recognized in the
criminal case against respondents that the SPFMPCI members were professional
squatters.

If under Rep. Act No. 7279, demolition and eviction are allowed when
individuals have been identified as professional squatters and squatting
syndicates[29] or when they occupy danger areas and other public places,[30] and
under P.D. No. 1096, they construct dangerous and ruinous buildings or
structures, [31] then with more reason the SPFMPCI members should be summarily
evicted and their structures and dwellings demolished. The parcel of land involved
in this case is a security zone whose operations must be protected from any form of
disruption. It must be protected from all types of squatters, including the SPFMPCI
members, who might create danger to a very important national
telecommunications facility.

Having said that, we do not find respondents guilty of grave

misconduct. Misconduct is a transgression of some established and definite rule of
action, more particularly, unlawful behavior or gross negligence by a public
officer. And when the elements of corruption, clear intent to violate the law or
flagrant disregard of established rule are manifest, the public officer shall be liable
for grave misconduct.[32]

Respondents rightfully determined the occupation by the SPFMPCI members

unauthorized (albeit on a different basis). As the Court of Appeals observed,
respondents also presented a list of settlers who were affected by the
demolition. The production of such list was made to support their claim that they
notified the SPFMPCI members of the demolition and that a conference was held
prior thereto.[33] Had respondents been impelled by ill motive, they would not have
taken measures to properly identify who were legal occupants and who were
squatters in the parcel of land in this case. Clearly, respondents acted within the
limits of the law when they implemented the demolition.

WHEREFORE, the petition is DENIED. The Decision dated June 23, 2005 and
the Resolution dated November 25, 2005 of the Court of Appeals in CA-G.R. SP Nos.
76700 and 76484 are AFFIRMED.

SO ORDERED.
 Republic of the Philippines
Supreme Court
Manila

THIRD DIVISION

G.R. No. 152319

Present:
HEIRS OF THE LATE JOAQUIN
LIMENSE, namely: CONCESA
LIMENSE, Surviving Spouse; and QUISUMBING,* J.,
DANILO and JOSELITO, both
surnamed Limense, children, CARPIO, J., Chairperson,
Petitioners, CHICO-NAZARIO,

- versus - PERALTA, and

ABAD,** JJ.
RITA VDA. DE RAMOS, RESTITUTO
RAMOS, VIRGILIO DIAZ, IRENEO
RAMOS, BENJAMIN RAMOS,
WALDYTRUDES RAMOS-
BASILIO, TRINIDAD RAMOS-
BRAVO, PAZ RAMOS-PASCUA,
FELICISIMA RAMOS-REYES, and Promulgated:
JACINTA RAMOS,
Respondents. October 28, 2009
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DECISION
PERALTA, J.,

This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking
to annul and set aside the Decision[1] of the Court of Appeals dated December 20,
2001 in CA-G.R. CV No. 33589 affirming in toto the Decision[2] of the Regional Trial
Court of Manila, Branch 15, dated September 21, 1990 in Civil Case No. 83-16128.

The antecedent facts are as follows:

Dalmacio Lozada was the registered owner of a parcel of land identified as Lot No.
12, Block No. 1074 of the cadastral survey of the City of Manila covered by Original
Certificate of Title (OCT) No. 7036 issued at the City of Manila on June 14,
1927,[3] containing an area of 873.80 square meters, more or less, located in Beata
Street, Pandacan, Manila.

Dalmacio Lozada subdivided his property into five (5) lots, namely: Lot Nos. 12-A,
12-B, 12-C, 12-D and 12-E. Through a Deed of Donation dated March 9, 1932,[4] he
donated the subdivided lots to his daughters, namely: Isabel, Salud, Catalina, and
Felicidad, all surnamed Lozada. The Deed of Donation was registered with the office
of the Register of Deeds of Manila on March 15, 1932.

Under the said Deed of Donation, the lots were adjudicated to Dalmacio's
daughters in the following manner:

a. Lot No. 12-A in favor of Isabel Lozada, married to Isaac Limense;

b. Lot No. 12-B in favor of Catalina Lozada, married to Sotero Natividad;
c. Lot No. 12-C in favor of Catalina Lozada, married to Sotero Natividad; Isabel
Lozada, married to Isaac Limense; and Salud Lozada, married to Francisco Ramos,
in equal parts;
d. Lot No. 12-D in favor of Salud Lozada, married to Francisco Ramos; and
e. Lot No. 12-E in favor of Isabel Lozada, married to Isaac Limense, and Felicidad
Lozada, married to Galicano Centeno.

By virtue of the Deed of Donation executed by Dalmacio Lozada, OCT No. 7036,
which was registered in his name, was cancelled and, in lieu thereof, Transfer
Certificates of Title (TCTs) bearing Nos. 40041, 40042, 40043, 40044, and 40045
were issued in favor of the donees, except TCT No. 40044, which remained in his
name. These new TCTs were annotated at the back of OCT No. 7036.[5]

TCT No. 40043, which covered Lot No. 12-C, was issued in the name of its co-owners
Catalina Lozada, married to Sotero Natividad; Isabel Lozada, married to Isaac
Limense; and Salud Lozada, married to Francisco Ramos. It covered an area of 68.60
square meters, more or less, was bounded on the northeast by Lot No. 12-A, on the
southwest by Calle Beata, and on the northwest by Lot No. 12-D of the subdivision
plan. In 1932, respondents' predecessor-in-interest constructed their residential
building on Lot No. 12-D, adjacent to Lot No. 12-C.

On May 16, 1969, TCT No. 96886[6] was issued in the name of Joaquin Limense
covering the very same area of Lot No. 12-C.

On October 1, 1981, Joaquin Limense secured a building permit for the

construction of a hollow block fence on the boundary line between his aforesaid
property and the adjacent parcel of land located at 2759 Beata Street, Pandacan,
Manila, designated as Lot No. 12-D, which was being occupied by respondents. The
fence, however, could not be constructed because a substantial portion of
respondents' residential building in Lot No. 12-D encroached upon portions of
Joaquin Limense's property in Lot No. 12-C.

Joaquin Limense demanded the removal of the encroached area; however,

respondent ignored both oral and written demands. The parties failed to amicably
settle the differences between them despite referral to the barangay. Thus,
on March 9, 1983, Joaquin Limense, duly represented by his Attorney-in-Fact,
Teofista L. Reyes, instituted a Complaint[7] against respondents before the Regional
Trial Court (RTC) of Manila, Branch 15, for removal of obstruction and damages.

Joaquin Limense prayed that the RTC issue an order directing respondents, jointly
and severally, to remove the portion which illegally encroached upon his property
on Lot No. 12-C and, likewise, prayed for the payment of damages, attorneys fees
and costs of suit.

Respondents, on the other hand, averred in their Answer[8] that they were the
surviving heirs of Francisco Ramos,[9] who, during his lifetime, was married to Salud
Lozada, one of the daughters of Dalmacio Lozada, the original owner of Lot No.
12. After subdividing the said lot, Dalmacio Lozada donated Lot No. 12-C in favor of
his daughters Catalina, married to Sotero Natividad; Isabel, married to Isaac
Limense; and Salud, married to Francisco Ramos. Being the surviving heirs of
Francisco Ramos, respondents later became co-owners of Lot No. 12-C. Lot No. 12-
C has served as right of way or common alley of all the heirs of Dalmacio Lozada
since 1932 up to the present. As a common alley, it could not be closed or fenced
by Joaquin Limense without causing damage and prejudice to respondents.

After trial on the merits, the RTC rendered a Decision[10] dated September 21,
1990 dismissing the complaint of Joaquin Limense. It ruled that an apparent
easement of right of way existed in favor of respondents. Pertinent portions of the
decision read as follows:

The Court finds that an apparent easement of right of way exists

in favor of the defendants under Article 624 of the Civil Code. It cannot
be denied that there is an alley which shows its existence. It is admitted
that this alley was established by the original owner of Lot 12 and that in
dividing his property, the alley established by him continued to be used
actively and passively as such. Even when the division of the property
 occurred, the non-existence of the easement was not expressed in the
corresponding titles nor were the apparent sign of the alley made to
disappear before the issuance of said titles.

The Court also finds that when plaintiff acquired the lot (12-C)
which forms the alley, he knew that said lot could serve no other purpose
than as an alley. That is why even after he acquired it in 1969, the lot
continued to be used by defendants and occupants of the other adjoining
lots as an alley. The existence of the easement of right of way was
therefore known to plaintiff who must respect the same in spite of the
fact that his transfer certificate of title does not mention the lot of
defendants as among those listed therein as entitled to such right of way.
It is an established principle that actual notice or knowledge is as binding
as registration.[11]

Aggrieved by said decision, Joaquin Limense filed a notice of appeal. The records of
the case were transmitted to the Court of Appeals (CA). During the pendency of the
appeal with the CA, Joaquin Limense died in 1999.[12]

The CA, Seventh Division, in CA-G.R. CV No. 33589, in its Decision[13] dated
December 20, 2001 dismissed the appeal and affirmed in toto the decision of the
RTC.

Frustrated by this turn of events, petitioners, as surviving heirs of Joaquin Limense,

elevated the case to this Court via a Petition for Review on Certiorari[14] raising the
following issues:

1. DID THE HONORABLE COURT OF APPEALS COMMIT A GRAVE ABUSE

OF DISCRETION AMOUNTING TO LACK OF JURISDICTION, IN HOLDING,
LIKE THE TRIAL COURT DID, THAT RESPONDENTS' LOT 12-D HAS AN
EASEMENT OF RIGHT OF WAY OVER JOAQUIN LIMENSE'S LOT 12-C?
 2. DID THE HONORABLE COURT OF APPEALS COMMIT A GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OF JURISDICTION, IN FAILING
TO HOLD, LIKE THE TRIAL COURT DID, THAT THE PROTRUDING
PORTIONS OF RESPONDENTS' HOUSE ON LOT 12-D EXTENDING INTO
JOAQUIN LIMENSE'S LOT 12-C CONSTITUTE A NUISANCE AND, AS
SUCH, SHOULD BE REMOVED?

Petitioners aver that the CA erred in ruling that since Lot No. 12-C was covered by
two TCT's, i.e., TCT Nos. 40043 and 96886, and there was no evidence on record to
show how Joaquin Limense was able to secure another title over an already titled
property, then one of these titles must be of dubious origin. According to the CA,
TCT No. 96886, issued in the name of Joaquin Limense, was spurious because the
Lozada sisters never disposed of the said property covered by TCT No. 40043. The
CA further ruled that a co-ownership existed over Lot No. 12-C between petitioners
and respondents. Petitioners countered that TCT No. 96886, being the only and
best legitimate proof of ownership over Lot No. 12-C, must prevail over TCT No.
40043.

Respondents allege that it was possible that TCT No. 96886, in the name of Joaquin
Limense, was obtained thru fraud, misrepresentation or falsification of documents
because the donees of said property could not possibly execute any valid transfer
of title to Joaquin Limense, as they were already dead prior to the issuance of TCT
No. 96886 in 1969. Respondents further allege that petitioners failed to produce
proof substantiating the issuance of TCT No. 96886 in the name of Joaquin
Limense.

Apparently, respondents are questioning the legality of TCT No. 96886, an issue that
this Court cannot pass upon in the present case. It is a rule that the validity of a
torrens title cannot be assailed collaterally.[15] Section 48 of Presidential Decree (PD)
No. 1529 provides that:
 [a] certificate of title shall not be subject to collateral attack. It cannot be
altered, modified, or cancelled except in a direct proceeding in accordance
with law.

In the case at bar, the action filed before the RTC against respondents was an action
for removal of obstruction and damages. Respondents raised the defense that
Joaquin Limense's title could have been obtained through fraud and
misrepresentation in the trial proceedings before the RTC. Such defense is in the
nature of a collateral attack, which is not allowed by law.

Further, it has been held that a certificate of title, once registered, should not
thereafter be impugned, altered, changed, modified, enlarged or diminished, except
in a direct proceeding permitted by law. Otherwise, the reliance on registered titles
would be lost. The title became indefeasible and incontrovertible after the lapse of
one year from the time of its registration and issuance. Section 32 of PD 1529
provides that upon the expiration of said period of one year, the decree of registration
and the certificate of title shall become incontrovertible. Any person aggrieved by
such decree of registration in any case may pursue his remedy by action for damages
against the applicant or other persons responsible for the fraud.[16] It has, therefore,
become an ancient rule that the issue on the validity of title, i.e., whether or not it
was fraudulently issued, can only be raised in an action expressly instituted for that
purpose.[17] In the present case, TCT No. 96886 was registered in 1969 and
respondents never instituted any direct proceeding or action to assail Joaquin
Limense's title.

Additionally, an examination of TCT No. 40043 would readily show that there is an
annotation that it has been CANCELLED.[18] A reading of TCT No. 96886 would also
reveal that said title is a transfer from TCT No. 48866[19] and not TCT 40043.Thus, it
is possible that there was a series of transfers effected from TCT No. 40043 prior
to the issuance of TCT No. 96886. Hence, respondents' position that the issuance
of TCT No. 96886 in the name of Joaquin Limense is impossible, because the
registered owners of TCT No. 40043 were already dead prior to 1969 and could not
have transferred the property to Joaquin Limense, cannot be taken as proof that
TCT No. 96886 was obtained through fraud, misrepresentation or falsification of
documents.
Findings of fact of the CA, although generally deemed conclusive, may admit review
by this Court if the CA failed to notice certain relevant facts that, if properly
considered, would justify a different conclusion, and if the judgment of the CA is
premised on a misapprehension of facts.[20] As with the present case, the CA's
observation that TCT No. 96886 is of dubious origin, as TCT No. 40043 does not
appear to have been disposed of by Catalina, Isabel and Salud Lozada, is improper
and constitutes an indirect attack on TCT No. 96886. As we see it, TCT No. 96886,
at present, is the best proof of Joaquin Limenses ownership over Lot No. 12-
C. Thus, the CA erred in ruling that respondents and petitioners co-owned Lot No.
12-C, as said lot is now registered exclusively in the name of Joaquin Limense.

Due to the foregoing, Joaquin Limense, as the registered owner of Lot 12-C, and his
successors-in-interest, may enclose or fence his land or tenements by means of walls,
ditches, live or dead hedges, or by any other means without detriment to servitudes
constituted thereon.[21]

However, although the owner of the property has the right to enclose or fence his
property, he must respect servitudes constituted thereon. The question now is
whether respondents are entitled to an easement of right of way.

Petitioners contend that respondents are not entitled to an easement of right of

way over Lot No. 12-C, because their Lot No. 12-D is not duly annotated at the back
of TCT No. 96886 which would entitle them to enjoy the easement, unlike Lot Nos.
12-A-1, 12-A-2, 12-A-3, 12-A-4, 12-A-5, and 12-A-6. Respondents, on the other
hand, allege that they are entitled to an easement of right of way over Lot No. 12-
C, which has been continuously used as an alley by the heirs of Dalmacio Lozada,
the residents in the area and the public in general from 1932 up to the present.
Since petitioners are fully aware of the long existence of the said alley or easement
of right of way, they are bound to respect the same.

As defined, an easement is a real right on another's property, corporeal and

immovable, whereby the owner of the latter must refrain from doing or allowing
somebody else to do or something to be done on his property, for the benefit of
another person or tenement.[22]

Easements may be continuous or discontinuous, apparent or non-apparent.

Continuous easements are those the use of which is or may be incessant, without
the intervention of any act of man. Discontinuous easements are those which are
used at intervals and depend upon the acts of man. Apparent easements are those
which are made known and are continually kept in view by external signs that
reveal the use and enjoyment of the same. Non-apparent easements are those
which show no external indication of their existence.[23]

In the present case, the easement of right of way is discontinuous and apparent. It
is discontinuous, as the use depends upon the acts of respondents and other
persons passing through the property. Being an alley that shows a permanent path
going to and from Beata Street, the same is apparent.

Being a discontinuous and apparent easement, the same can be acquired only by
virtue of a title.[24]

In the case at bar, TCT No. 96886, issued in the name of Joaquin Limense, does not
contain any annotation that Lot No. 12-D was given an easement of right of way
over Lot No. 12-C. However, Joaquin Limense and his successors-in-interests are
fully aware that Lot No. 12-C has been continuously used and utilized as an alley by
respondents and residents in the area for a long period of time.
Joaquin Limense's Attorney-in-Fact, Teofista L. Reyes, testified that respondents
and several other residents in the area have been using the alley to reach Beata
Street since 1932. Thus:

Atty. Manuel B. Tomacruz:

Q: Mrs. Witness, by virtue of that Deed of Donation you claim that titles
were issued to the children of Dalmacio Lozada namely Salud
Lozada, Catalina Lozada and Isabel Lozada, is that right?
A: Yes, sir.

Q: And after the said property was adjudicated to his said children the
latter constructed their houses on their lots.
A: Yes, sir.

Q: As a matter of fact, the herein defendants have constructed their

houses on the premises alloted to them since the year 1932?
A: Yes, sir, they were able to construct their house fronting Beata Street.

Q: And that house they have constructed on their lot in 1932 is still
existing today?
A: Yes, sir and they still used the alley in question and they are supposed
to use Beata Street but they are not using Beata Street.

Q: They are using the alley?

A: Yes, sir, they are using the alley and they do not pass through Beata
Street.

Q: And they have been using the alley since 1932 up to the present?
A: Yes, sir they have been using the alley since that time. That was their
mistake and they should be using Beata Street because they are
fronting Beata Strret.
 Q: As a matter of fact, it is not only herein defendants who have been
using that alley since 1932 up to the present?
A: Yes, sir they are using the alley up to now.

Q: As a matter of fact, in this picture marked as Exh. C-1 the alley is very
apparent. This is the alley?
A: Yes, sir.

Q: And there are houses on either side of this alley?

A: Yes, sir.

Q: As a matter of fact, all the residents on either side of the alley are
passing through this alley?
A: Yes, sir, because the others have permit to use this alley and they are
now allowed to use the alley but the Ramos's family are now [not]
allowed to use this alley.[25]

In Mendoza v. Rosel,[26] this Court held that:

Petitioners claim that inasmuch as their transfer certificates of title do

not mention any lien or encumbrance on their lots, they are purchasers
in good faith and for value, and as such have a right to demand
from respondents some payment for the use of the alley. However, the
Court of Appeals found, as a fact, that when respondents acquired the
two lots which form the alley, they knew that said lots could serve no
other purpose than as an alley. The existence of the easement of right of
way was therefore known to petitioners who must respect the same, in
spite of the fact that their transfer certificates of title do not mention
 any burden or easement. It is an established principle that actual notice
or knowledge is as binding as registration.

Every buyer of a registered land who takes a certificate of title for value and in good
faith shall hold the same free of all encumbrances except those noted on said
certificate. It has been held, however, that where the party has knowledge of a
prior existing interest that was unregistered at the time he acquired a right to the
same land, his knowledge of that prior unregistered interest has the effect of
registration as to him.[27]

In the case at bar, Lot No. 12-C has been used as an alley ever since it was donated
by Dalmacio Lozada to his heirs. It is undisputed that prior to and after the
registration of TCT No. 96886, Lot No. 12-C has served as a right of way in favor of
respondents and the public in general. We quote from the RTC's decision:

x x x It cannot be denied that there is an alley which shows its existence.

It is admitted that this alley was established by the original owner
of Lot 12 and that in dividing his property the alley established by him
continued to be used actively and passively as such. Even when the
division of the property occurred, the non-existence of the easement was
not expressed in the corresponding titles nor were the apparent sign of
the alley made to disappear before the issuance of said titles.

The Court also finds that when plaintiff acquired the lot (12-C)
which forms the alley, he knew that said lot could serve no other purpose
than as an alley. That is why even after he acquired it in 1969 the lot
continued to be used by defendants and occupants of the other adjoining
lots as an alley. x x x[28]

Thus, petitioners are bound by the easement of right of way over Lot No. 12-C, even
though no registration of the servitude has been made on TCT No. 96886.
However, respondents right to have access to the property of petitioners does not
include the right to continually encroach upon the latters property. It is not
disputed that portions of respondents' house on Lot No. 12-D encroach upon Lot
No. 12-C. Geodetic Engineer Jose Agres, Jr. testified on the encroachment of
respondents' house on Lot No. 12-C, which he surveyed.[29] In order to settle the
rights of the parties relative to the encroachment, We should determine whether
respondents were builders in good faith.

Good faith is an intangible and abstract quality with no technical meaning or

statutory definition; and it encompasses, among other things, an honest belief, the
absence of malice and the absence of a design to defraud or to seek an
unconscionable advantage. An individuals personal good faith is a concept of his
own mind and, therefore, may not conclusively be determined by his protestations
alone. It implies honesty of intention, and freedom from knowledge of
circumstances which ought to put the holder upon inquiry. The essence
of good faith lies in an honest belief in the validity of ones right, ignorance of a
superior claim, and absence of intention to overreach another. Applied to
possession, one is considered in good faith if he is not aware that there exists in his
title or mode of acquisition any flaw which invalidates it.[30]

Good faith is always presumed, and upon him who alleges bad faith on the part of
the possessor rests the burden of proof.[31] It is a matter of record that respondents'
predecessor-in-interest constructed their residential building on Lot No. 12-D,
adjacent to Lot No. 12-C, in 1932.[32] Respondents' predecessor-in-interest owned
the 1/3 portion of Lot No. 12-C at the time the property was donated to them by
Dalmacio Lozada in 1932. The Deed of Donation executed by the late Dalmacio
Lozada, dated March 9, 1932, specifically provides that:

I hereby grant, cede and donate in favor of Catalina Lozada married to

Sotero Natividad, Isabel Lozada married to Isaac Simense and Salud
 Lozada married to Francisco Ramos, all Filipinos, of legal age, the parcel
of land known as Lot No. 12-C, in equal parts.[33]

The portions of Lot No. 12-D, particularly the overhang, covering 1 meter in width
and 17 meters in length; the stairs; and the concrete structures are all within the
1/3 share alloted to them by their donor Dalmacio Lozada and, hence, there was
absence of a showing that respondents acted in bad faith when they built portions
of their house on Lot No. 12-C.

Using the above parameters, we are convinced that respondents' predecessors-in-

interest acted in good faith when they built portions of their house on Lot 12-
C. Respondents being builders in good faith, we shall now discuss the respective
rights of the parties relative to the portions encroaching upon respondents' house.

Articles 448 and 546 of the New Civil Code provide:

Art. 448. The owner of the land on which anything has been built,
sown or planted in good faith, shall have the right to appropriate as his
own the works, sowing or planting, after payment of the indemnity
provided for in Articles 546 and 548, or to oblige the one who built or
planted to pay the price of the land, and the one who sowed, the proper
rent. However, the builder or planter cannot be obliged to buy the land if
its value is considerably more than that of the building or trees. In such
case, he shall pay reasonable rent, if the owner of the land does not choose
to appropriate the building or trees after proper indemnity. The parties
shall agree upon the terms of the lease and, in case of disagreement, the
court shall fix the terms thereof.

Art. 546. Necessary expenses shall be refunded to every possessor;

but only the possessor in good faith may retain the thing until he has been
reimbursed therefor.
Useful expenses shall be refunded only to the possessor
in good faith with the same right of retention, the person who has defeated
 him in the possession having the option of refunding the amount of the
expenses or of paying the increase in value which the thing may have
acquired by reason thereof.

In Spouses Del Campo v. Abesia,[34] this provision was applied to one whose house,
despite having been built at the time he was still co-owner, overlapped with the
land of another. In that case, this Court ruled:

The court a quo correctly held that Article 448 of the Civil Code
cannot apply where a co-owner builds, plants or sows on the land owned
in common for then he did not build, plant or sow upon the land that
exclusively belongs to another but of which he is a co-owner. The co-
owner is not a third person under the circumstances, and the situation is
governed by the rules of co-ownership.

However, when, as in this case, the ownership is terminated by the

partition and it appears that the house of defendants overlaps or
occupies a portion of 5 square meters of the land pertaining to plaintiffs
which the defendants obviously built in good faith, then the provisions of
Article 448 of the new Civil Code should apply. x x x[35]

In other words, when the co-ownership is terminated by a partition, and it appears

that the house of an erstwhile co-owner has encroached upon a portion pertaining
to another co-owner, but the encroachment was in good faith, then the provisions
of Article 448 should apply to determine the respective rights of the parties. In this
case, the co-ownership was terminated due to the transfer of the title of the whole
property in favor of Joaquin Limense.
Under the foregoing provision, petitioners have the right to appropriate said
portion of the house of respondents upon payment of indemnity to respondents,
as provided for in Article 546 of the Civil Code. Otherwise, petitioners may oblige
respondents to pay the price of the land occupied by their house. However, if the
price asked for is considerably much more than the value of the portion of the
house of respondents built thereon, then the latter cannot be obliged to buy the
land. Respondents shall then pay the reasonable rent to petitioners upon such
terms and conditions that they may agree. In case of disagreement, the trial court
shall fix the terms thereof. Of course, respondents may demolish or remove the
said portion of their house, at their own expense, if they so decide.[36]

The choice belongs to the owner of the land, a rule that accords with the principle
of accession that the accessory follows the principal and not the other way
around.[37] Even as the option lies with the landowner, the grant to him,
nevertheless, is preclusive. He must choose one. He cannot, for instance, compel
the owner of the building to instead remove it from the land.[38]

The obvious benefit to the builder under this article is that, instead of being
outrightly ejected from the land, he can compel the landowner to make a choice
between two options: (1) to appropriate the building by paying the indemnity
required by law, or (2) to sell the land to the builder.[39]

The raison detre for this provision has been enunciated, thus:

Where the builder, planter or sower has acted in good faith, a conflict of
rights arises between the owners, and it becomes necessary to protect the
owner of the improvements without causing injustice to the owner of the
land. In view of the impracticability of creating a state of forced co-
ownership, the law has provided a just solution by giving the owner of the
land the option to acquire the improvements after payment of the proper
indemnity, or to oblige the builder or planter to pay for the land and the
sower the proper rent. He cannot refuse to exercise either option. It is the
owner of the land who is authorized to exercise the option, because his
right is older, and because, by the principle of accession, he is entitled to
the ownership of the accessory thing.[40]
In accordance with Depra v. Dumlao,[41] this case must be remanded to the trial
court to determine matters necessary for the proper application of Article 448 in
relation to Article 546. Such matters include the option that petitioners would take
and the amount of indemnity that they would pay, should they decide to
appropriate the improvements on the lots.

Anent the second issue, although it may seem that the portions encroaching upon
respondents' house can be considered a nuisance, because it hinders petitioners'
use of their property, it cannot simply be removed at respondents' expense, as
prayed for by petitioner. This is because respondents built the subject
encroachment in good faith, and the law affords them certain rights as discussed
above.

WHEREFORE, the petition is DENIED, the Decision of the Court of Appeals

dated December 20, 2001 in CA-G.R. CV No. 33589 is AFFIRMED with the
following MODIFICATIONS:

1. No co-ownership exists over Lot No. 12-C, covered by TCT No. 96886,
between petitioners and respondents.

2. The case is REMANDED to the Regional Trial Court, Branch 15, Manila, for
further proceedings without further delay to determine the facts essential to the
proper application of Articles 448 and 546 of the Civil Code.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

WE CONCUR:
 SECOND DIVISION

[G.R. No. 137862. November 11, 2004]

ALFREDO ESTRADA, RENATO T. CANILANG and MANUEL C.

LIM, petitioners, vs. COURT OF APPEALS AND BACNOTAN
CEMENT CORPORATION (BCC), respondents.

DECISION
AUSTRIA-MARTINEZ, J.:

Before this Court is a petition for review on certiorari of the decision[1] of the
Court of Appeals in CA-G.R. SP No. 44324, promulgated on April 6, 1998, and
the resolution[2] dated February 24, 1999 denying petitioners motion for
reconsideration.
The facts are as follows:
Alfredo Estrada, Renato T. Canilang and Manuel C. Lim, as concerned
citizens and taxpayers, filed on July 31, 1996, before the Regional Trial Court
(RTC) of Olongapo City, a complaint for Injunction and Damages with Prayer
for Preliminary Injunction and Temporary Restraining Order against Bacnotan
Cement Corp. (BCC), Wawandue Fishing Port, Inc. (WFPI), Jeffrey Khong Hun
as President of WFPI, Manuel Molina as Mayor of Subic, Zambales, and
Ricardo Serrano as Regional Director of the Department of Environment and
Natural Resources (DENR).
The complaint alleges that: WFPI and the Municipality of Subic entered into
an illegal lease contract, which in turn became the basis of a sub-lease in favor
of BCC; the sub-lease between WFPI and BCC is a violation of the first lease
because the cement plant, which BCC intended to operate in Wawandue,
Subic, Zambales, is not related to the fish port business of WFPI; and BCCs
cement plant is a nuisance because it will cause pollution, endanger the health,
life and limb of the residents and deprive them of the full use and enjoyment of
their properties. The plaintiffs prayed that an order be issued: to restrain and
prohibit BCC from opening, commissioning, or otherwise operating its cement
plant; and to require the defendants to jointly and solidarily pay the
plaintiffs P205,000.00 by way of actual, moral and exemplary damages and
attorneys fees.[3]
 Defendants WFPI/Khong Hun and BCC filed separate motions to dismiss,
both alleging that the complaint states no cause of action. BCC, in its motion,
added that: the plaintiffs failed to exhaust administrative remedies before going
to court; that the complaint was premature; and that the RTC has no jurisdiction
on the matter. Respondent Serrano of the DENR also filed a motion to dismiss
stating that there was no cause of action insofar as he is concerned since there
was nothing in the complaint that shows any dereliction of duty on his part.[4]
On December 6, 1996, Judge Eliodoro G. Ubiadas of RTC Olongapo City,
Branch 72, issued an order denying respondents motions to dismiss and
granting the prayer for a writ of preliminary injunction.[5] Pertinent portions of the
order read as follows:

The Court notes that the powers vested by law under Executive Order 192, Republic
Act 3931 and Presidential Decree 984 are regulatory merely and for the purpose of
determining whether pollution exists.

However, under the laws above-mentioned, the powers granted to the DENR thru the
Pollution Adjudication Board did not expressly exclude the Courts which under the
law are empowered to try both questions of facts and law to determine whether
pollution which maybe nuisance per se or by accidents (sic) exist or likely to
exist. Under the Constitution, the courts are imbued the inherent power of general
jurisdiction to resolve these issues. While it maybe (sic) true that petitioners might
have first to seek relief thru the DENRs Pollution Adjudication Board a resort to the
remedy provided under the Pollution Adjudication Board is rendered useless and
ineffective in the light of the urgency that the said pollution be restrained outright in
lieu of the impending risk described in the petition. It will be noted that the DENR
did not have the power either in Executive Order 192, Republic Act 3931 and
Presidential Decree 984 to issue a writ of injunction. The argument therefore for the
exhaustion of administrative remedy and lack of jurisdiction does not warrant the
dismissal of this petition against Bacnotan Cement Corporation.[6]

Respondents motions for reconsideration were likewise denied by the trial court
in an order dated May 13, 1997.[7]
Respondent BCC then went to the Court of Appeals on a petition
for certiorari and prohibition with preliminary injunction and/or temporary
restraining order seeking to reverse and set aside the orders dated December
6, 1996 and May 13, 1997 as well as to lift the writ of preliminary injunction
dated December 11, 1996.
On April 6, 1998, the Court of Appeals rendered its decision, granting BCCs
petition, thus:
WHEREFORE, in the light of the foregoing disquisitions, the instant petition for
certiorari is GRANTED. The assailed Orders dated December 6, 1996 and May 13,
1997 are hereby SET ASIDE. The writ of injunction issued by the public respondent
under date of December 11, 1996 is forthwith, LIFTED and the Complaint insofar as
petitioner BCC is concerned is ordered forthwith DISMISSED. No costs.

SO ORDERED.[8]

It reasoned that:

FIRSTLY. We find that the denial of said Motion to Dismiss by the Court a quo, was a
grave abuse of discretion because of the doctrine of Administrative Remedy which
requires that where an administrative remedy is provided by statute, relief must be
sought administratively first before the Court will take action thereon. As ruled by the
Supreme Court in the case of Abe Abe, et al. vs. Manta (90 SCRA 524). When an
adequate remedy may be had within the Executive Department of the government but
nevertheless a litigant fails or refuses to avail himself of the same, the Judiciary shall
decline to interfere. This traditional attitude of the Court is based not only on respect
for party litigants but also on respect for a co-equal office in the government. In fine,
our Supreme Court has categorically explained in Aquino vs. Mariano (129 SCRA
209) that whenever, there is an available Administrative Remedy provided by law, no
judicial recourse can be made until such remedy has been availed of and exhausted
for three (3) reasons that: (1) Resort to court maybe unnecessary if administrative
remedy is available; (2) Administrative Agency may be given a chance to correct
itself; and (3) The principle of Amity and Convenience requires that no court can act
until administrative processes are completed. Commissioner of Customs vs.
Navarro (77 SCRA 264).

SECONDLY, it is a well-settled rule that the jurisdiction of the Regional Trial Court is
general in character, referring to the existence of nuisance under the provision of
Article 694 of the New Civil Code. On the other hand, the Department of
Environment and Natural Resources, through the Pollution Adjudication Board (PAB)
under R.A. 3931 as amended by P.D. 984, prescribes the Abatement of Pollution. In
fine, when it comes to nuisance, the Court has general jurisdiction under the New
Civil Code. But when it comes to pollution which is specific, the administrative body
like the DENR has jurisdiction. Clearly, nuisance is general or broader in concept
while pollution is specific. Following the rule that the specific issue of pollution,
which is under the jurisdiction of DENR prevails over the general issue of nuisance
which is under the jurisdiction of the RTC (Lagman vs. City of Manila, 17 SCRA
579), there is no doubt that the DENR and not the Court should have
jurisdiction. Hence, the motion to dismiss filed by petitioner should have been
GRANTED by the Court a quo. Since it has no jurisdiction over the subject
matter. Its denial by public respondent was therefore a grave abuse of discretion,
which is correctible by certiorari.

THIRDLY. We should not lose sight of the fact that the authority to construct in this
case is necessarily required prior to the actual construction of petitioners cement bulk
terminal while the permit to operate likewise is required before the petitioners cement
bulk terminal commences its operation. In this case, the petitioner, at the time, had
only the authority to construct, pursuant to a valid contract between the WFPI and the
petitioner BCC, approved by the Sangguniang Bayan of Subic and Sangguniang
Panlalawigan of Zambales and pursuant to the requisite of DENR. Again, it should be
remembered that, at the time, petitioner did not yet have the permit to operate (which
should properly be made only after a factual determination of the levels of
pollution by the DENR). Hence, the injunction issued in this case is premature and
should not have been issued at all by public respondent.

FOURTHLY. The effect of the writ of injunction enjoining petitioner from operating
the cement bulk terminal (Order of December 6, 1996) and the public respondents
refusal to defer the proceedings below, virtually preempt the DENR from making
such determination, nay even the authority to issue the permit to operate is likewise
preempted. How can we therefore enjoin operation before the issuance of the permit
to operate? It is also a settled rule that the remedy of injunction is not proper where
an administrative remedy is available. The permit to operate may not even be issued,
at all, by the DENR (Buayan Cattle Co. Inc., vs. Quintillan, 128 SCRA 276).

Evidently, the writ of injunction issued in this case, as We view it, is premature. In
fact, by issuing the Order of Dec. 6, 1996, the public respondent wrestled the
authority from the DENR to determine whether the cement bulk terminal will cause
pollution or not, or whether the pollution may only be on acceptable level as to justify
the issuance of the permit to operate.

While conceding that prior resort should be made to the DENR, the respondent Judge
proceeded to take the contrary stand, following the private respondents contention that
the doctrine of exhaustion of administrative remedies are [sic] inapplicable, since it
would cause irreparable injury if private respondents should avail of administrative
step before taking Court action.

We do not agree.

The respondents contention is clearly baseless and highly speculative because how
can it possibly produce irreparable injury before the actual operation since petitioner
has not yet been issued permit to operate. Besides, We find no evidence shown in the
complaint or alleged therein that will support the presence of pollution and which
could properly be the subject of injunction.

Finally, it is interesting to note that the complaint filed by the private respondents has
no prayer for preliminary injunction (it was not asked, why then should it be
given?). Furthermore, the Sublease Agreement having been partly executed, it could
no longer be enjoined.

By and large, the lower courts denial of petitioners motion to dismiss is undoubtedly
a grave abuse of discretion amounting to lack of jurisdiction.[9]

The Court of Appeals denied petitioners motion for reconsideration on

February 24, 1999.[10] Hence the present petition alleging that:
I

. . . THE HONORABLE COURT OF APPEALS HAD CLEARLY DEPARTED

FROM THE ESTABLISHED JURISPRUDENCE ENUNCIATED BY THIS
HONORABLE COURT WHEN IT RULED THAT THE HEREIN PETITIONERS
FAILED TO EXHAUST ADMINISTRATIVE REMEDIES AVAILABLE TO
THEM BEFORE THE DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES (DENR) POLLUTION ADJUDICATION BOARD (PAB); and that

II

THE COURT OF APPEALS ALSO GROSSLY ERRED IN RULING THAT THE

REGIONAL TRIAL COURT OF OLONGAPO CITY, BRANCH 72 HAS NO
JURISDICTION OVER THE ISSUE OF POLLUTION.[11]

Petitioners argue that: prior resort to an administrative agency is futile and

unnecessary since great and irreparable injury would ensue if the cement
repacking plant is allowed to operate in Wawandue, Subic, Zambales; only the
court can grant them speedy, effective and immediate relief since the DENR-
Pollution Adjudication Board (PAB) has no authority to issue the needed writ of
injunction prayed for by petitioners; E.O. No. 192,[12] R.A. No. 3931[13] or P.D.
No. 984[14] does not expressly exclude the power and authority of the RTC to
try both questions of fact and of law relative to the determination of the existence
of pollution arising from the operation of respondents cement repacking plant
either as a nuisance per se or a nuisance per accidens; and the lower court
under the Constitution is imbued with the inherent power and jurisdiction to
resolve the issue of pollution.[15]
 In its Comment, BCC contends that: the instant petition should be dismissed
because it is not accompanied by a copy of the petition in CA G.R. SP No.
44324, which violates Rule 45, Sec. 4 of the Rules of Court requiring that the
petition be accompanied by relevant pleadings;[16] the Court of Appeals
correctly held that the jurisdiction to determine the issue of pollution is lodged
primarily with the DENR and not with the RTC; under P.D. No. 984, the task of
determining the existence of pollution was bestowed on the National Pollution
Control Commission (NPCC), the powers of which were assumed by the DENR
under E.O. No. 192; the jurisdiction of the trial courts anent abatement of
nuisance in general cannot prevail over the specific, specialized and technical
jurisdiction of the DENR-PAB; under the doctrine of exhaustion of administrative
remedies, where competence to determine the same issue is placed in the trial
court and an administrative body and the issue involves a specialized and
technical matter, relief should first be sought before the administrative body
prior to instituting suit before the regular courts; the relief sought by the
petitioners to prevent the supposedly injurious operation of BCCs cement bulk
terminal can be effectively obtained from the DENR, which, under P.D. No. 984,
has the authority to grant, modify and revoke permits, and to issue orders for
the abatement of pollution and impose mandatory pollution control measures
for compliance;[17] since the BCC only has an authority to construct and not yet
permit to operate at the time of the filing of the complaint, the writ of injunction
issued by the trial court preempted the DENR from making the determination of
whether or not BCC should be allowed to operate; the complaint was properly
dismissed since petitioners have no legal capacity to bring a suit for abatement
of nuisance; and the right invoked by petitioners is abstract and is not sufficient
to confer locus standi.[18]
In their Reply, petitioners reiterated their arguments and added that they
have fully complied with the requirements of Rule 45.[19]
The principal issue that needs to be resolved is whether or not the instant
case falls under the exceptional cases where prior resort to administrative
agencies need not be made before going to court.
We answer in the negative.
The doctrine of exhaustion of administrative remedies requires that resort
be first made with the administrative authorities in the resolution of a
controversy falling under their jurisdiction before the same may be elevated to
a court of justice for review.[20] If a remedy within the administrative machinery
is still available, with a procedure pursuant to law for an administrative officer
to decide the controversy, a party should first exhaust such remedy before
going to court. A premature invocation of a courts intervention renders the
complaint without cause of action and dismissible on such ground.[21]
The reason for this is that prior availment of administrative remedy entails
lesser expenses and provides for a speedier disposition of
controversies. Comity and convenience also impel courts of justice to shy away
from a dispute until the system of administrative redress has been completed
and complied with.[22]
As we explained in Gonzales vs. Court of Appeals,[23]

The thrust of the rule on exhaustion of administrative remedies is that the courts must
allow the administrative agencies to carry out their functions and discharge their
responsibilities within the specialized areas of their respective competence. It is
presumed that an administrative agency, if afforded an opportunity to pass upon a
matter, will decide the same correctly, or correct any previous error committed in its
forum. Furthermore, reasons of law, comity and convenience prevent the courts from
entertaining cases proper for determination by administrative agencies. Hence,
premature resort to the courts necessarily becomes fatal to the cause of action of the
petitioner.[24]

While the doctrine of exhaustion of administrative remedies is flexible and

may be disregarded in certain instances, such as:
(1) when there is a violation of due process,
(2) when the issue involved is purely a legal question,
(3) when the administrative action is patently illegal amounting to lack or excess of
jurisdiction,
(4) when there is estoppel on the part of the administrative agency concerned,
(5) when there is irreparable injury,
(6) when the respondent is a department secretary whose acts as an alter ego of
the President bears [sic] the implied and assumed approval of the latter,
(7) when to require exhaustion of administrative remedies would be unreasonable,
(8) when it would amount to a nullification of a claim,
(9) when the subject matter is a private land in land case proceedings,
(10) when the rule does not provide a plain, speedy and adequate remedy,
(11) when there are circumstances indicating the urgency of judicial intervention,
(12) when no administrative review is provided by law,
(13) where the rule of qualified political agency applies, and
(14) when the issue of non-exhaustion of administrative remedies has been
rendered moot.[25]

we find, however, that the instant case does not fall under any of the recognized
exceptional circumstances.
Petitioners claim that their action before the trial court, without going to the
DENR first, is justified because they are in danger of suffering grave and
irreparable injury from the operation of respondents cement repacking plant and
the DENR does not have the power to grant them the relief they are praying for.
We do not agree.
Republic Act No. 3931, An Act Creating the National Water and Air Pollution
Control Commission, was passed on June 18, 1964 to maintain reasonable
standards of purity for the waters and air of the country with their utilization for
domestic, agricultural, industrial and other legitimate purposes. It created the
NPCC which had the power, to issue, renew, or deny permits, for the prevention
and abatement of pollution.[26]
In 1976, Presidential Decree No. 984 was enacted to strengthen the NPCC
giving it, among others, the following:

Sec. 6. Powers and Functions . . .

...

(e) Issue orders or decisions to compel compliance with the provisions of this
Decree and its implementing rules and regulations only after proper notice and
hearing.
(f) Make, alter or modify orders requiring the discontinuance of pollution
specifying the conditions and the time within which such discontinuance must be
accomplished.
(g) Issue, renew, or deny permits, under such conditions as it may determine to
be reasonable, for the prevention and abatement of pollution, for the discharge
of sewage, industrial waste, or for the installation or operation of sewage works
and industrial disposal system or parts thereof
(j) serve as arbitrator for the determination of reparations, or restitution of the
damages and losses resulting from pollution.

P.D. No. 984 also empowered the commission to issue ex parte orders
directing the discontinuance or temporary suspension or cessation of operation
of an establishment or person generating sewage or wastes without the
necessity of prior public hearing whenever it finds a prima facie evidence that
the discharged sewage or wastes are of immediate threat to life, public health,
safety or welfare, or to animal or plant life, or exceed the allowable standards
set by the commission.[27]
In 1987, Executive Order No. 192 was passed, reorganizing the DENR. It
transferred the power of the NPCC to the Environmental Management
Bureau[28] and created the PAB, under the Office of the Secretary, which
assumed the powers and functions of the NPCC with respect to the adjudication
of pollution cases under R.A. No. 3931 and P.D. No. 984.[29]
 In Pollution Adjudication Board vs. Court of Appeals,[30] we stated that the
PAB is the very agency of the government with the task of determining whether
the effluents of a particular industrial establishment comply with or violate
applicable anti-pollution statutory and regulatory provisions.[31] We also
recognized its power to issue, ex parte, cease and desist orders, thus:

. . . under . . . Section 7(a) of P.D. No. 984, an ex parte cease and desist order may be
issued by the (PAB) (a) whenever the wastes discharged by an establishment pose an
immediate threat to life, public health, safety or welfare, or to animal or plant life, or
(b) whenever such discharges or wastes exceed the allowable standards set by the
[NPCC]. . . . [I]t is not essential that the Board prove that an immediate threat to life,
public health, safety or welfare, or to animal or plant life exists before an ex
parte cease and desist order may be issued. It is enough if the Board finds that the
wastes discharged do exceed the allowable standards set by the [NPCC]. In respect of
discharges of wastes as to which allowable standards have been set by the
Commission, the Board may issue an ex parte cease and desist order when there
is prima-facie evidence of an establishment exceeding such allowable
standards. Where, however, the effluents or discharges have not yet been the subject
matter of allowable standards set by the Commission, then the Board may act on an ex
parte basis when it finds at least prima facie proof that the wastewater or material
involved presents an immediate threat to life, public health, safety or welfare or to
animal or plant life. . . .

...

Ex parte cease and desist orders are permitted by law and regulations in situations like
that here presented precisely because stopping continuous discharge of pollutive and
untreated effluents into the rivers and other inland waters of the Philippines cannot be
made to wait until protracted litigation over the ultimate correctness or propriety of
such orders has run its full course, including multiple and sequential appeals such as
those which Solar has taken, which of course may take several years. The relevant
pollution control statute and implementing regulations were enacted and promulgated
in the exercise of that pervasive, sovereign power to protect the safety, health, and
general welfare and comfort of the public, as well as the protection of plant and
animal life, commonly designated as the police power. It is a constitutional
commonplace that the ordinary requirements of procedural due process yield to the
necessities of protecting vital public interests like those here involved, through the
exercise of police power. . . .[32]

In Laguna Lake Development Authority vs. Court of Appeals,[33] we also pronounced

that:
The matter of determining whether there ispollution of the environment that requires
control, if not prohibition, of the operation of a business establishment is essentially
addressed to the Environmental Management Bureau (EMB) of the DENR which, by
virtue of Section 16 of Executive Order No. 192, series of 1987 has assumed the
powers and functions of the defunct National Pollution Control Commission created
under Republic Act No. 3931. Under said Executive Order, a Pollution Adjudication
Board (PAB) under the Office of the DENR Secretary now assumes the powers and
functions of the National Pollution Control Commission with respect to adjudication
of pollution cases.

As a general rule, the adjudication of pollution cases generally pertains to the

Pollution Adjudication Board (PAB), except in cases where the special law provides
for another forum.[34]

Clearly, the claim of petitioners that their immediate recourse to the regular
courts is justified because the DENR is powerless to grant them proper relief is
without basis.
The Court of Appeals correctly found that the petitioners failed to exhaust
administrative remedies before going to court which renders their complaint
dismissible on the ground of lack of cause of action.
WHEREFORE, the petition is denied for lack of merit.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 206423 July 1, 2015

LEONCIO ALANGDEO, ARTHUR VERCELES, and DANNY VERGARA, Petitioners,

vs.
The City Mayor of Baguio, HON. BRAULIO D. YARANON (to be substituted by incumbent City
Mayor, HON. MAURICIO DO MOGAN), JEOFREY MORTELA, Head Demolition Team, CITY
ENGINEER'S OFFICE, and ERNESTO LARDIZABAL, Respondents.

DECISION

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari 1are the Decision2 dated June 29, 2012 and the
Resolution 3 dated March 5, 2013 of the Court of Appeals (CA) in CA-G.R. CV No. 87439, which
reversed the Decision 4, dated April 27, 2006 of the Regional Trial Court of Baguio City, Branch 60
(RTC) in Civil Case No. 6007-R granting the complaint for injunction filed by herein petitioners
Leoncio Alangdeo, Arthur Verceles (Verceles ), and Danny Vergara (collectively, petitioners).

The Facts

On November 13, 2003, respondent Ernesto Lardizabal (Ernesto) filed a complaint for
demolition, 5before the City Engineer's Office 6of Baguio City (City Engineer's Office), questioning the
ongoing construction of a: residential structure and garage extension by petitioners on a parcel of
land, situated at Barangay Atok Trail, Baguio City (subject property), allegedly owned by Mariano
Pangloy and Ernesto's father, Juanito Lardizabal. 7 Upon investigation, the City Engineer's Office
found out that the construction had no building permit. Consequently, the City Mayor issued, through
the Secretary to the Mayor, Demolition Order No. 05, series of 2005 (DO No. 05) directing the City
Demolition Team to summarily demolish the said structures, to wit: 8

WHEREFORE, the CITY DEMOLITION TEAM is hereby directed to SUMMARILY DEMOLISH the
aforesaid structures of Atty. Leoncio Alangdeo, Arthur Verceles and/or Danny Vergara in accordance
with Section 3[,] par. 2.5 (a) of the implementing rules and regulations governing summary eviction
jointly issued by the Department of Interior and Local Government (DILG) and the Housing and
Urban Development Coordinating Council pursuant to Section 44, [A]rticle XII of [Republic Act (RA)
No. 7279 9(Emphases supplied)

Aggrieved, petitioners moved for a reconsideration of DO No. 05, but was denied by the City Mayor.
Thus, they were prompted to file a complaint for injunction and prohibition with the RTC, docketed as
Civil Case No. 6007-R, seeking to enjoin the implementation of said order. 10

In their complaint, petitioners applied for a temporary restraining order, which was granted by the
RTC. Subsequently, the RTC issued a writ of preliminary injunction pending the final determination
of the merits of the case.11
During trial, Verceles testified, among others, that he has a Tax Declaration and a pending
application for Ancestral Land Claim over the subject property filed before the National Commission
on Indigenous Peoples (NCIP), and that he has been paying taxes therefore and occupying the
same since 1977. 12 He also testified that Ernesto had previously filed a case with the Office of the
Department of Environment and Natural Resources (DENR)-Cordillera Administrative Region (CAR),
questioning his possession thereof, as well as, seeking the cancellation of his tax declaration over
the said property.13 The DENR-CAR dismissed the case in his favor, but Ernesto appealed to the
Office of the DENR Secretary. At the time the appeal was pending, Ernesto filed the complaint for
demolition before the City Engineer's Office. Verceles further testified that Barangay Atok Trail is
covered by Proclamation No. 414, series of 1957 (Proclamation 414), which declared the same as
mineral reservation for Baguio City, for which reason he was unable to get a title over the subject
property despite his possession thereof 14

Punong Barangay Stephen T. Aligo was also presented by petitioners as a witness. He testified that
by Resolution No.386, series of 1995, the City Council requested for the release of the vast area
covered by Proclamation 414, for housing purposes to be awarded to the occupants of Barangay
Atok Trail. Also, he narrated that in a census conducted in 2003, it was found that there were two
hundred thirty (230) houses in Barangay Atok Trail and none of these houses had building permits.15

On the other hand, respondents' witnesses, Antonio 0. Visperas, Robert Albas Awingan, and George
Addawe, Jr., all testified that the structures of petitioners on the subject property were not covered
by any building permit.16Additionally, Ernesto testified that the issue of possession over the said
property was the subject of an appeal pending before the Office of the DENR Secretary. 17

The RTC Ruling

In a Decision 18 dated April 27, 2006, the RTC enjoined the City Government of Baguio and its agents
from implementing DO No. 5 "until and after the resolution of all the cases/issues involving the
subject property and/or area affected by the appropriate government agencies concerned." The
injunction stemmed from its finding that Proclamation 414 declared the entire area of Barangay Atok
Trail as a buffer zone for the mining industry, and, for that reason, all structures constructed thereon
(and not only that of petitioners) were not covered by building permits. Thus, the RTC held that it
would violate the equal protection clause if it would allow the demolition of petitioners' structures
while leaving untouched the other structures in the area.19

Dissatisfied, respondents appealed 20 to the CA.

The CA Ruling

In a Decision 21 dated June 29, 2012, the CA reversed the ruling of the RTC, finding that petitioners
failed to show any right to be protected. It relied on the Decision 22 rendered on August 31, 2006 by
then DENR Secretary Angelo Reyes in DENR Case No. 5625, which recognized and respected the
ancestral and preferential rights of Mariano Pangloy and the Heirs of Juanito Lardizabal over the
subject property pending the final determination by the NCIP of their ancestral claim. 23 Accordingly,
the CA held that where the plaintiff - as petitioners in this case - failed to demonstrate that he has an
existing right to be protected by injunction, the suit for injunction must be dismissed for lack of cause
of action 24

Unperturbed, petitioners filed a motion for reconsideration, raising therein the Decision 25 of the NCIP
Regional Hearing Office dated May 18, 2012, which ruled that between petitioners and Ernesto, the
former have a better right to the issuance of ancestral land titles over the portions they are claiming
to be their ancestral lands. 26 The CA, however, denied the motion in a Resolution 27 dated March 5,
2013, maintaining that petitioners have no right in esse. Thus, considering that petitioners have no
building permit over the subject constructions, it ruled that the public respondents have the right to
demolish the subject structures.28

Hence, this petition.

The Issues before the Court

The issues for resolution are: (a) whether the CA should have dismissed respondents' appeal as it
involves pure questions of law and/ or for lack of merit; and ( b) whether the issuance of a writ of
injunction is warranted.

The Court's Ruling

The petition is meritorious.

I.

On the preliminary procedural issue, Rule 41 of the Rules of Court (Rules) provides for three (3)
ways by which an appeal from the RTC's decision may be undertaken, depending on the nature of
the attendant circumstances of the case, namely: (a) an ordinary appeal to the CA in cases decided
by the RTC in the exercise of its original jurisdiction; ( b) a petition for review to the CA in cases
decided by the RTC in the exercise of its appellate jurisdiction; and ( c) a petition for review on
certiorari directly filed with the Court where only questions of law are raised or involved.29 The first
mode of appeal under Rule 41 of the Rules is available on questions of fact or mixed questions of
fact and of law. The second mode of appeal, governed by Rule 42 of the Rules, is brought to the CA
on questions of fact, of law, or mixed questions of fact and of law. The third mode of appeal under
Rule 45 of the Rules is filed with the Court only on questions of law.30

There is a "question of law" when the doubt or difference arises as to what the law is on a certain
state of facts, and which does not call for an examination of the probative value of the evidence
presented by the parties-litigants. On the other hand, there is a "question of fact" when the doubt or
controversy arises as to the truth or falsity of the alleged facts. Simply put, when there is no dispute
as to fact, the question of whether or not the conclusion drawn there from is correct, is a question of
law. 31

In this case, the CA was called upon, not to examine the probative value of the evidence presented,
but to determine whether the legal conclusions made based on the recorded evidence is correct.
Essentially, the issue raised before the CA was whether the order for the summary demolition of
petitioners' structures authorized under the law, and in that relation, whether the RTC's grant of the
complaint for injunction based on the equal protection clause was proper. Clearly, with none of the
factual circumstances contested, the appeal involved pure questions of law that should have been
brought directly to the Court. Consequently, on a technical note, the CA should have dismissed
respondents' appeal for having been filed with the wrong tribunal pursuant to Section 2, Rule 50 of
the Rules which reads:

SEC. 2. Dismissal of improper appeal to the Court of Appeals. -An appeal under Rule 41 taken from
the Regional Trial Court to the Court of Appeals raising only questions of law shall be dismissed,
issues purely of law not being reviewable by said court.
Be that as it may, a review of the substantive merits of this case would nevertheless warrant the
grant of the present petition which seeks the reversal of the CA decision.

II.

DO No. 5 32 states on its face that it was issued in accordance with Section 3, paragraph 2.5 (a) of
the Implementing Rules and Regulations (IRR) Governing Summary Eviction (Summary Eviction
IRR), to wit:

SECTION 3. Procedures and Guidelines

xxxx

2.0 Issuance of Summary Eviction Notice

xxxx

2.5 In the Issuance of notice, the following shall be strictly observed:

a. For on-going construction, no notice shall be served. Dismantling of the structures shall be
immediately enforced by the LGU or the concerned agency to demolish.

To note, the Summary Eviction IRR was issued pursuant to Section 28, Article VII of RA 7279, which
equally provides for the situations wherein eviction or demolition is allowed as crafted exceptions to
the moratorium on eviction under Section 44, Article XII 33 of the same law.

Sec. 28. Eviction and Demolition. - Eviction or demolition as a practice shall be discouraged. Eviction
or demolition, however, may be allowed under the following situations

(a) When persons or entities occupy danger areas such as esteros, railroad tracks,
garbage dumps, riverbanks, shorelines, waterways, and other public places such as
sidewalks, roads, parks, and playgrounds;

(b) When government infrastructure projects with available funding are about to be
implemented; or

(c) When there is a court order for eviction and demolition.

xxxx

This Department of the Interior and Local Government and the Housing and Urban Development
Coordinating Council shall jointly promulgate the necessary rules and regulations to carry out the
above provision. (Emphases supplied)

Section 2 of the Summary Eviction IRR provides that only new squatter 34 families whose structures
were built after the effectively of RA 7279, otherwise known as the "Urban Development and
Housing Act of 1992," and squatter families identified by the local government unit (LGU) as
professional squatters 35 or members of squatting syndicates shall be subject of summary eviction:

SECTION 2. Coverage - The following shall be subject for summary Eviction:

 1.0 New squatter families whose structures were built after the affectivity of RA 7279; and

2.0 Squatter families identified by the LGU in cooperation with the Presidential Commission
of the Urban Poor (PCUP), Philippine National Police (PNP) and accredited Urban Poor
[O]rganization (UPO) as professional squatters or members of squatting syndicates as
defined in the Act.

Under the Summary Eviction IRR, the term "summary eviction" has been defined as "the immediate
dismantling of new illegal structures by the local government units or government agency authorized
to [demolish] in coordination with the affected urban poor organizations without providing the
structure owner(s) any benefits of the Urban Development and Housing Program. " 36

Meanwhile, the terms "new squatter," "professional squatters," and "squatting syndicates" have been
respectively defined as follows:

"New squatter" refers to individual groups who occupy land without the express consent of the
landowner after March 28, 1992. Their structures shall be dismantled and appropriate charges shall
be filed against them by the proper authorities if they refuse to vacate the premises. 37 "Professional
squatters" refers to individuals or groups who occupy lands without the express consent of the
landowner and who have sufficient income for legitimate housing. The term shall also apply to
persons who have previously been awarded home lots or housing units by the Government but who
sold, leased or transferred the same to settle illegally in the same place or in another urban area,
and non-bona fide occupants and intruders of lands reserved for socialized

Housing. The term shall not apply to individuals or groups who simply rent land and housing from
professional squatters or squatting syndicates. 38

"Squatting syndicates" refers to groups of persons engaged in the business of squatter housing for
profit or gain. 39

In this case, petitioners cannot be considered as new squatters, since, although their structures were
built after March 28, 1992, they or their predecessors-in-interest had occupied, and were claimants
of the subject property long before the said date. Neither have they been identified by the LGU as
professional squatters nor members of a squatting syndicate. Thus, since petitioners do not fall
under the coverage of the said IRR, the issuance of DO No. 05 had no legal basis at the onset.

More significantly, none of the three (3) situations enumerated under Section 28, Article VII of RA
7279 as above-cited, when eviction or demolition is allowed, have been shown to be present in the
case at bar. Specifically, it was not shown that the structures are in danger areas or public areas,
such as a sidewalk, road, park, or playground; that a government infrastructure project is about to be
implemented; and that there is a court order for demolition or eviction. Therefore, the issuance by
the City Mayor of an order for the summary demolition of petitioners' structures finds no basis in the
said law permitting summary demolition or eviction.

While respondents make much ado of petitioners' lack of building permits, it should be underscored
that under Presidential Decree No. 1096, 40 otherwise known as the "National Building Code of the
Philippines" (NBCP), the mere fact that a structure is constructed without a building permit, as well
as non-compliance with work stoppage order, without more, will not call for a summary demolition,
but subjects the violator to an administrative fine under Section 212, 41 Chapter II of the NBCP, or a
criminal case under Section 213 42 of the same law.
Indeed, while Section 301, Chapter III of the NBCP states that " [ n] o person, firm or corporation,
including any agency or instrumentality of the government shall erect, construct, alter, repair, move,
convert or demolish any building or structure or cause the same to be done without first obtaining a
building permit therefore from the Building Official assigned in the place where the subject building is
located or the building work is to be done," the remedy of summary abatement against the bare
absence of a building permit was not provided for.

Meanwhile, Section 215 of the NBCP, and its corresponding IRR provision (both of which are
respectively quoted hereunder) states that before a structure may be abated or demolished, there
must first be a finding or declaration by the Building Official that the building/structure is a nuisance,
ruinous or dangerous:

Section 215. Abatement of Dangerous Buildings.

When any building or structure is found or declared to be dangerous or ruinous, the Building Official
shall order its repair, vacation or demolition depending upon the degree of danger to life, health, or
safety. This is without prejudice to further action that may be taken under the provisions of Articles
482 and 694 to 707 of the Civil Code of the Philippines.

PROCEDURE FOR ABATEMENT/ DEMOLITION OF DANGEROUS/ RUINOUS BUILDINGS/

STRUCTURES

5. Procedure for Demolition of Buildings

The following steps shall be observed in the abatement/demolition of buildings under this Rule:

5.1 There must be a finding or declaration by the Building Official that the building/structure is a
nuisance, ruinous or dangerous.

5.2 Written notice or advice shall be served upon the owner and occupant/s of such finding or
declaration, giving him at least fifteen ( 15) days within which to vacate or cause to be vacated,
repaired, renovated, demolished and removed as the case may be, the nuisance, ruinous or
dangerous building/structure or any part or portion thereof.

5.3 Within the fifteen-day (15) period, the owner may, if he so desires, appeal to the Secretary the
finding or declaration of the Building Official and ask that a re-inspection or re-investigation of the
building/structure be made.

x x x x 43

To this, it bears noting that it is the Building Official, and not the City Mayor, who has the authority to
order the demolition of the structures under the NBCP. As held in Gancayco v. City Government of
Quezon City: 44

[T]he Building Code clearly provides the process by which a building may be demolished. The
authority to order the demolition of any structure lies with the Building Official. The pertinent
provisions of the Building Code provide:

SECTION 205. Building Officials. - Except as otherwise provided herein, the Building Official shall be
responsible for carrying out the provisions of this Code in the field as well as the enforcement of
orders and decisions made pursuant thereto
Due to the exigencies of the service, the Secretary may designate incumbent Public Works District
Engineers, City Engineers and Municipal Engineers [to] act as Building Officials in their respective
areas of jurisdiction.

The designation made by the Secretary under this Section shall continue until regular positions of
Building Official are provided or unless sooner terminated for causes provided by law or decree.

[x x x x]

SECTION 207. Duties of a Building Official. - In his respective territorial jurisdiction, the Building
Official shall be primarily responsible for the enforcement of the provisions of this Code as well as of
the implementing rules and regulations issued therefore. He is the official charged with the duties of
issuing building permits.

In the performance of his duties, a Building Official may enter any building or its premises at all
reasonable times to inspect and determine compliance with the requirements of this Code, and the
terms and conditions provided for in the building permit as issued.

When any building work is found to be contrary to the provisions of this Code, the Building Official
may order the work stopped and prescribe the terms and/or conditions when the work will be allowed
to resume. Likewise, the Building Official is authorized to order the discontinuance of the occupancy
or use of any building or structure or portion thereof found to be occupied or used contrary to the
provisions of this Code.

x x x x (Emphases supplied)

In this case, none of the foregoing requisites were shown to concur. Plainly, records are bereft of
any declaration coming from the Building Official, and it is undisputed that the demolition order was
issued by the City Mayor. Notably, while respondents invoke the City Mayor's authority under
Section 455 (b) 3 (vi) 45of the Local Government Code 46to order the

demolition or removal of an illegally constructed house, building, or structure within the period
prescribed by law or ordinance and their allegation that respondents' structures were constructed
without building permits, records disclose that the same was not raised before the trial court. Since
respondents invoked the said section for the first time in their comment to the instant petition, 47the
argumentation cannot thus be entertained, it being settled that matters, theories or arguments not
brought out in the proceedings below will ordinarily not be considered by a reviewing court as they
cannot be raised for the first time on appeal. 48

Besides, it is clear that DO No. 05 was not issued pursuant to Section 455 (b) 3 (vi) of the Local
Government Code, but pursuant to "Section 3 par. 2.5 (a) of the implementing rules and regulations
governing summary eviction jointly issued by the Department of Interior and Local Government
(DILG) and the Housing and Urban Development Coordinating Council xx x," 49 implementing Section
28, Article VII of RA 7279, the application of which, however, has been herein debunked.

In fine, DO No. 05, which ordered the summary demolition of petitioners' structures has no legal
moorings and perforce was invalidly issued. Accordingly, an injunctive writ to enjoin its
1wphi 1

implementation is in order. It is well-settled that for an injunction to issue, two requisites must concur:
first, there must be a right to be protected; and second, the acts against which the injunction is to be
directed are violative of said right. 50 Here, the two (2) requisites are present: there is a right to be
protected - that is, petitioners' right over their structures which should be preserved unless their
removal is warranted by law; and the act, i.e., the summary demolition of the structures under DO
No. 05, against which the injunction is directed, would violate said right.51

As a final note, the Court exhorts that absent compliance with the laws allowing for summary
eviction, respondents cannot resort to the procedural shortcut of ousting petitioners by the simple
expedient of a summary demolition order from the Office of the City Mayor. They have to undergo
the appropriate proceeding as set out in the NBCP and its IRR or avail of the proper judicial process
to recover the subject property from petitioners. In pursuing said recourse, it would also not be amiss
for the parties to await the final resolution of any pending case involving the subject property
between petitioners and Ernesto, before the appropriate government agencies, in order to avoid any
further complication on the matter.

That being said, it is then unnecessary to delve into the other ancillary issues raised in these
proceedings.

WHEREFORE, the petition is GRANTED. The Decision dated June 29, 2012 and the Resolution
dated March 5, 2013 of the Court of Appeals in CA-G.R. CV No. 87439 is hereby REVERSED and
SET ASIDE. The implementation of Demolition Order No. 05, series of 2005 is ENJOINED.

SO ORDERED.

ESTELA M. PERLAS-BERNABE
Associate Justice

WE CONCUR:
.R. No. 198774, April 04, 2016 - TEOFILO ALOLINO, Petitioner, v. FORTUNATO FLORES AND ANASTACIA
MARIE FLORES, Respondents.

SECOND DIVISION

G.R. No. 198774, April 04, 2016

TEOFILO ALOLINO, Petitioner, v. FORTUNATO FLORES AND ANASTACIA MARIE

FLORES, Respondents.

DECISION

BRION, J.:

This is a petition for review on certiorari filed from the July 8, 2011 decision of the Court of Appeals (CA)
in CA-G.R. CV No. 94524.1 The CA reversed the Regional Trial Court's (RTC) decision2 in Civil Case No.
693203 and dismissed petitioner Teofilo Alolino's complaint against the respondents for the removal of their
illegally constructed structure.

Antecedents

Alolino is the registered owner of two (2) contiguous parcels of land situated at No. 47 Gen. Luna Street,
Barangay Tuktukan, Taguig, covered by Transfer Certificate of Title (TCT) Nos. 784 and 976. TCT No. 784
was issued on August 30, 1976 covering an area of 26 square meters; while TCT No. 976 was issued on
August 29, 1977, with an area of 95 square meters.

Alolino initially constructed a bungalow-type house on the property. In 1980, he added a second floor to the
structure. He also extended his two-storey house up to the edge of his property. There are terraces on both
floors. There are also six (6) windows on the perimeter wall: three (3) on the ground floor and another three
(3) on the second floor.

In 1994, the respondent spouses Fortunato and Anastacia (Marie) Flores constructed their house/sari
sari store on the vacant municipal/barrio road immediately adjoining the rear perimeter wall of Alolino's
house. Since they were constructing on a municipal road, the respondents could not secure a building
permit. The structure is only about two (2) to three (3) inches away from the back of Alolino's house,
covering five windows and the exit door. The respondents' construction deprived Alolino of the light and
ventilation he had previously enjoyed and prevented his ingress and egress to the municipal road through
the rear door of his house.

Alolino demanded that the respondent spouses remove their structure but the latter refused. Thus, he
complained about the illegal construction to the Building Official of the Municipality of Taguig. He also filed a
complaint with the Barangay of Tuktukan.

Acting on Alolino's complaint, the Building Official issued a Notice of Illegal Construction against the
respondents on February 15, 1995, directing them to immediately stop further construction.4

Sometime in 2001 or 2002, the respondents began constructing a second floor to their structure, again
without securing a building permit. This floor was to serve as residence for their daughter, Maria Teresa
Sison. The construction prompted Alolino to file another complaint with the Building Official of Taguig.

The building official issued a second Notice of Illegal Construction against the respondents on May 6, 2002,
directing the respondents to desist from their illegal construction.5

On May 17, 2002, the Office of the Barangay Council of Tuktukan issued a certification that no settlement
was reached between the parties relative to Alolino's 1994 complaint.6

The respondents did not comply with the directive from the building official. This prompted Alolino to send
them a letter dated January 23, 2003, demanding the removal of their illegally constructed structure.

Despite receipt of the demand letter, the respondents refused to comply. Thus, on February 14, 2003,
Alolino filed a complaint against the respondents with the RTC praying for: (1) the removal of the
encroaching structure; (2) the enforcement of his right to easement of light and view; and (3) the payment
of damages. Alolino claimed that the respondents' encroaching structure deprived him of his light and view
and obstructed the air ventilation inside his house. The complaint was docketed as Civil Case No. 69320.

In their answer,7 the respondent spouses denied that Alolino had a cause of action against them. They
alleged that they had occupied their lot where they constructed their house in 1955, long before the plaintiff
purchased his lot in the 70s. They further alleged that plaintiff only has himself to blame because he
constructed his house up to the very boundary of his lot without observing the required setback. Finally,
they emphasized that the wall of their house facing Alolino's does not violate the latter's alleged easement of
light and view because it has no window.

The respondents also admitted to them that they did not secure a building permit because the property was
constructed on a municipal/barrio road. They claimed, however, that on March 1, 2004, the Sangguniang
Bayan of Taguig (the Sanggunian) reclassified the property as a residential lot from its prior classification as
a barrio/municipal road.8

During the trial, both parties moved for an ocular inspection of the premises. Consequently, on November
19, 2007, the RTC ordered the branch clerk of court, the deputy sheriff, and the stenographer to conduct
the inspection. The ocular inspection was conducted on December 6, 2007.

In their report dated January 30, 2008,9 the inspection team confirmed that the respondents' property
blocked the entry of light and air to Alolino's house.

On April 20, 2009, the RTC rendered a judgment ordering the respondents to remove their illegal structure
obstructing Alolino's right to light and view.

The RTC found that Alolino had already previously acquired an easement of light and view and that the
respondents subsequently blocked this easement with their construction. It held that the respondents' illegal
construction was a private nuisance with respect to Alolino because it prevented him from using the back
portion of his property and obstructed his free passage to the barrio/municipal road. The court farther held
that the respondents' house was a public nuisance, having been illegally constructed on a barrio road - a
government property - without a building permit.

The respondents appealed the decision to the CA and was docketed as CA-G.R. CV No. 94524.

On July 8, 2011, the CA reversed the RTC decision and dismissed the complaint for lack of merit.

The CA held (1) that Alolino had not acquired an easement of light and view because he never gave a formal
prohibition against the respondents pursuant to Article 66810 of the Civil Code; (2) that Alolino was also at
fault, having built his fyouse up to the edge of the property line in violation of the National Building
Code;11 (3) that Alolino had not acquired an easement of right of way to the barrio Road; and (4) that the
respondents' house was not a public nuisance because it did not endanger the safety of its immediate
surroundings.

The CA concluded that the Government had already abandoned the barrio road pursuant to the 2004
Sanggunian resolution. It further held that the respondents' property could not be demolished, citing Section
28 of the Urban Development and Housing Act.12

Alolino moved for reconsideration on July 28, 2011.

On September 28, 2011, the CA denied the motion for reconsideration and maintained that Alolino had not
acquired an easement of light and view.
Thus, on November 15, 2011, Alolino filed the present petition for review on certiorari.

The Petition

Alolino insists (1) that he acquired an easement of light and view by virtue of a title because the
respondents constructed their house on a barrio road; (2) that the provision of Sec. 708 of the National
Building Code and Article 670 of the Civil Code prescribing the setbacks is inapplicable because the property
is adjacent to a barrio road; (3) that he has a right of way over the lot occupied by the respondents because
it is a barrio road; and (4) that the respondents' house/sari sari store is a nuisance per se.

In its comment, the respondent counters (1) that Alolino has not acquired an easement of light and view or
an easement of right of way, by either prescription or title; (2) that Alolino is at fault for constructing his
house up to the edge of his property line without observing the setbacks required in Article 670 of the Civil
Code and Section 702 of the National Building Code; and (3) that their house/sari sari store is not a
nuisance because it is not a serious threat to public safety and the Sanggunian has already reclassified the
lot as residential.

Our Ruling

We find the petition meritorious.

There is no dispute that respondents built their house/sari sari store on government property. Properties of
Local Government Units (LGUs) are classified as either property for public use or patrimonial
property.13 Article 424 of the Civil Code distinguishes between the two classifications:
chanRoble svirtual Lawlib ra ry

Article 424. Property for public use, in the provinces, cities, and municipalities, consist of the provincial
roads, city streets, municipal streets, the squares, fountains, public waters, promenades, and public
works for public service paid for by said provinces, cities, or municipalities.

All other property possessed by any of them is patrimonial and shall be governed by this Code, without
prejudice to the provisions of special laws.14 (emphasis supplied)
From the foregoing, the barrio road adjacent to Alolino's house is property of public dominion devoted to
public use.

We find no merit in the respondents' contention that the Local Government of Taguig had already withdrawn
the subject barrio road from public use and reclassified it as a residential lot. The Local Government
Code15 (LGC) authorizes an LGU to withdraw a local road from public use under the folio wing conditions:
chanRoble svirtual Lawlib ra ry

Section 21. Closure and Opening of Roads. -

(a) A local government unit may, pursuant to an ordinance,

permanently or temporarily close or open any local road,
alley, park, or square falling within its jurisdiction; Provided,
however, That in case of permanent closure, such ordinance must
be approved by at least two-thirds (2/3) of all the members of the
Sanggunian, and when necessary, an adequate substitute for the.
public facility that is subject to closure is provided.

(b) No such way or place or any part thereof shall be permanently closed
without making provisions for the maintenance of public safety
therein. A property thus permanently withdrawn from public
use may be used or conveyed for any purpose for which other
 real property belonging to the local government unit
concerned may be lawfully used or conveyed. x x x
To convert a barrio road into patrimonial property, the law requires the LGU to enact an ordinance,
approved by at least two-thirds (2/3) of the Sanggunian members, permanently closing the road.

In this case, the Sanggunian did not enact an ordinance but merely passed a resolution. The difference
between an ordinance and a resolution is settled in jurisprudence: an ordinance is a law but a resolution is
only a declaration of sentiment or opinion of the legislative body.16

Properties of the local government that are devoted to public service are deemed public and are under the
absolute control of Congress.17 Hence, LGUs cannot control or regulate the use of these properties unless
specifically authorized by Congress, as is the case with Section 21 of the LGC.18 In exercising this authority,
the LGU must comply with the conditions and observe the limitations prescribed by Congress. The
Sanggunian's failure to comply with Section 21 renders ineffective its reclassification of the barrioroad.

As a barrio road, the subject lot's purpose is to serve the benefit of the collective citizenry. It is outside the
commerce of man and as a consequence: (1) it is not alienable or disposable;19 (2) it is not subject to
registration under Presidential Decree No. 1529 and cannot be the subject of a Torrens title;20 (3) it is not
susceptible to prescription;21 (4) it cannot be leased, sold, or otherwise be the object of a contract;22 (5)
it is not subject to attachment and execution;23 and (6) it cannot be burdened by any voluntary
easements.24

An easement is an encumbrance imposed upon an immovable for the benefit of another immovable
belonging to a different owner or for the benefit of a community, or of one or more persons to whom the
encumbered estate does not belong.25Continuous and apparent easements may be acquired by virtue of
a title or by prescription of ten years.26 Meanwhile, continuous but non-apparent easements and
discontinuous ones can only be acquired by virtue of a title.27 Used in this sense, title refers to a juridical
justification for the acquisition of a right. It may refer to a law, a will, a donation, or a contract.

We must distinguish between the respondents' house and the land it is built on. The land itself is public
property devoted to public use. It is not susceptible to prescription and cannot be burdened with voluntary
easements. On the other hand, the respondents' house is private property, albeit illegally constructed on
public property. It can be the object of prescription and can be burdened with voluntary easements.
Nevertheless, it is indisputable that the respondents have not voluntarily burdened their property with an
easement in favor of Alolino.

An easement of a right of way is discontinuous and cannot be acquired through prescription.28 On the other
hand, an easement of light and view can be acquired through prescription counting from the time when the
owner of the dominant estate formally prohibits the adjoining lot owner from blocking the view of a window
located within the dominant estate.29

Notably, Alolino had not made (and could not have made) a formal prohibition upon the respondents prior to
their construction in 1994; Alolino could not have acquired an easement of light and view through
prescription. Thus, only easements created by law can burden the respondents' property.

The provisions on legal easements are found in Book II, Title VII, Chapter 2 of the Civil Code whose specific
coverage we list and recite below for clarity and convenience.

Section 3 (Articles 649-657) governs legal easements of right of way. Article 649 creates a legal easement
in favor of an owner or any person entitled to use any immovable, which is landlocked by other immovables
pertaining to other persons without an adequate access to a public highway. Article 652 creates a legal
easement in favor of an isolated piece of land acquired by sale, exchange, partition, or donation when it is
surrounded by other estates of the vendor, exchanger, co-owner, or donor. Article 653 grants the same
right of way. in favor of the vendor, exchanger, co-owner, or donor when his property is the one that
becomes isolated. Article 656 grants the owner of an estate, after payment of indemnity, a right of way to
carry materials through the estate of another when it.is indispensable for the construction or repair of a
building in his estate. Finally, Article 657 governs right of way easements for the passage of livestock.

None of these provisions are applicable to Alolino's property with respect to the barrio road where the
respondents' house stands on.
On the other hand, Section 5 of Book II, Title VII, Chapter 2 of the Civil Code (Articles 667-673)
governs legal easements of light and view. These seven provisions are:
chanRoble svirtual Lawlib ra ry

SECTION 5
Easement of Light and View

Article 667. No part-owner may, without the consent of the others, open through the party wall any
window or aperture of any kind.

Article 668. The period of prescription for the acquisition of an easement of light and view shall be
counted: (1) From the time of the opening of the window, if it is through a party wall; or (2) From the time
of the formal prohibition ipon the proprietor of the adjoining land or tenement, if the window is through a
wall on the dominant estate.

Article 669. When the distances in article 670 are not observed, the owner of a wall which is not party wall,
adjoining a tenement or piece of land belonging to another, c^n make in it openings to admit light at the
height of the ceiling joints or immediately under the ceiling, and of the size of thirty centimeters square,
and, in every case, with an iron grating imbedded in|the wall and with a wire screen.

Nevertheless, the owner of the tenement or property adjoining the wall in which the openings are made can
close them should he acquire part-ownership thereof, if there be no stipulation to the contrary.

He can also obstruct them by constructing a building on his land or by raising a wall thereon contiguous to
that having such openings, unless an easement of light has been acquired.

Article 670. No windows, apertures, balconies, or other similar projections which afford a direct view upon
or towards an adjoining land or tenement can be made, without leaving a distance of two meters between
the wall in which they are made and such contiguous property.

Neither can side or oblique views upon or towards such conterminous property be had, unless there be a
distance of sixty centimeters.

The nonobservance of these distances does not give rise to prescription.

Article 671. The distance referred to in the preceding article shall be measured in cases of direct views
from the outer line of the wall when the openings do not project, from the outer line of the latter when they
do, and, in cases of oblique view, from the dividing line between the two properties.

Article 672. The provisions of article 670 are not applicable to buildings separated by a public way or alley,
which is not less than three meters wide, subject to special regulations and local ordinances.

Article 673. Whenever by any title a right has been acquired to have direct views, balconies or belvederes
overlooking an adjoining property, the owner of the servient estate cannot build thereon at less than a
distance of three meters to be measured in the manner provided in article 671. Any stipulation permitting
distances less than those prescribed in article 670 is void.
However, none of these provisions actually create a legal easement of light and view which can only be
acquired through prescription or a by virtue of a voluntary title.

From the foregoing, we agree with the respondents that Alolino does not have an easement of light and view
or an easement of right of way over the respondents' property or the barrio road it stands on. This does not
mean, however, that the respondents are entitled to continue occupying the barrio road and blocking the
rear of Alolino's house. Every building is subject to the easement which prohibits the proprietor or possessor
from committing nuisance.30 Under Article 694 of the Civil Code, the respondents' house is evidently a
nuisance:
chanRoble svirtual Lawlib ra ry

Art. 694. A nuisance is any act, omission, establishment, business, condition of property, or anything else
which:

(1) Injures or endangers the health or safety of others; or

(2) Annoys or offends the senses; or

(3) Shocks, defies or disregards decency or morality; or

(4) Obstructs or interferes with the free passage of any public highway or street, or any body of
water; or

(5) Hinders or impairs the use of property, (emphasis supplied)

A barrio road is designated for the use of the general public who are entitled to free and unobstructed
passage thereon. Permanent obstructions on these roads, such as the respondents' illegally constructed
house, are injurious to public welfare and convenience. The occupation and use of private individuals of
public places devoted to public use constitute public and private nuisances and nuisance per se.31

The CA clearly erred when it invoked Section 28 of the Urban Development and Housing Act as a ground
to.deny the demolition of respondents' illegal structure. The invoked provision reads:
chanRoble svirtual Lawlib ra ry

Sec. 28. Eviction and Demolition. - Eviction or demolition as a practice shall be discouraged. Eviction or
demolition, however, may be allowed under the following situations:

(a) When persons or entities occupy danger -areas such as esteros,

railroad tracks, garbage dumps, riverbanks, shorelines, waterways,
and other public places such as sidewalks, roads, parks, and
playgrounds;

xxxx

(c) When there is a court order for eviction and demolition. x x x

(emphasis supplied)
The invoked provision itself allows the demolition of illegal structures on public roads and sidewalks because
these nuisances are injurious to public welfare. Evidently, the respondents have no right to maintain their
occupation and permanent obstruction of the barrio road. The interests of the few do not outweigh the
greater interest of public health, public safety, good order, and general welfare. chan roble slaw

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CA-G.R. CV No.
94524 is REVERSED and SET ASIDE and the decision of the Regional Trial Court, Pasig City, Branch 153
in Civil Case No. 69320 is REINSTATED.

The respondents, and all persons claiming rights under them, are ORDERED to remove and demolish their
illegal structure. The respondents are also ORDERED to pay the petitioner the sum of One Hundred
Thousand Pesos (P100,000.00) as attorney's fees. Costs against the respondents.

SO ORDERED. cralawlawlibra ry
G.R. No. 182944, November 09, 2016 - DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS (DPWH),
REPRESENTED BY SEC. HERMOGENES E. EBDANE, JR, AND METROPOLITAN MANILA DEVELOPMENT
AUTHORITY, REPRESENTED BY CHAIRMAN BAYANI F. FERNANDO, Petitioners, v. CITY ADVERTISING
VENTURES CORPORATION, REPRESENTED BY DEXTER Y. LIM, Respondent.

SECOND DIVISION

G.R. No. 182944, November 09, 2016

DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS (DPWH), REPRESENTED BY SEC. HERMOGENES

E. EBDANE, JR, AND METROPOLITAN MANILA DEVELOPMENT AUTHORITY, REPRESENTED BY
CHAIRMAN BAYANI F. FERNANDO, Petitioners, v. CITY ADVERTISING VENTURES CORPORATION,
REPRESENTED BY DEXTER Y. LIM, Respondent.

DECISION

LEONEN, J.:

For a writ of preliminary injunction to be issued, the applicant must show, by prima facie evidence, an
existing right before trial, a material and substantial invasion of this right, and that a writ of preliminary
injunction is necessary to prevent irreparable injury.

This resolves a Petition for Review on Certiorari1 praying that the assailed December 3, 20072 and May 14,
20083 Resolutions of the Court of Appeals in CA G.R. SP No. 101420 be set aside; and that Branch 66 of the
Regional Trial Court of Makati City be prohibited from conducting further proceedings in Civil Case No. 06-
899.4 The Petition also prays that the Regional Trial Court be ordered to dismiss Civil Case No. 06-899.5

The Court of Appeals' December 3, 2007 Resolution denied petitioners Department of Public Works and
Highways and the Metropolitan Manila Development Authority's Petition for Certiorari and Prohibition,6which
sought to annul the Regional Trial Court's November 21, 20067 and April 11, 20078 Orders in Civil Case No.
06-899. The Court of Appeals' May 14, 2008 Resolution denied the Motion for Reconsideration of the
Department of Public Works and Highways and the Metropolitan Manila Development Authority.9

The Regional Trial Court's November 21, 2006 Order granted City Advertising Ventures Corporation's prayer
for the issuance of a writ of preliminary injunction in its Complaint for "Violation of [Administrative Order
No.] 160, Tort, [and] Injunction,"10 which was docketed as Civil Case No. 06-899. The April 11, 2007 Order
of the Regional Trial Court denied the Department of Public Works and Highways and the Metropolitan
Manila Development Authority's Omnibus Motion,11 which sought reconsideration of its November 21, 2006
Order.

Respondent City Advertising Ventures Corporation is a company engaged in the advertising business, such
as putting up banners and signages within Metro Manila.12

On December 28, 2005, City Advertising Ventures Corporation entered into a lease agreement with the
MERALCO Financing Services Corporation13 for the use of 5,000 of Manila Electric Company's (MERALCO)
lampposts to display advertising banners.14 Under this contract, City Advertising Ventures Corporation
obtained sign permits from Quezon City's Department of Engineering, Office of the Building Official,
Signboard Permit Section.15 It obtained similar permits for the cities of Pasay and Makati.16 City Advertising
Ventures Corporation likewise obtained permits for setting up pedestrian overpass banners in Quezon City.17

When Typhoon Milenyo hit in September 2006, several billboards in Metro Manila were blown by strong
winds and fell. In its wake, Former President Gloria Macapagal-Arroyo, through Executive Secretary Eduardo
R. Ermita, issued Administrative Order No. 16018 dated October 4, 2006 "[d]irecting the Department of
Public Works and Highways to conduct field investigations, evaluations and assessments of all billboards and
determine those that are hazardous and pose imminent danger to life, health, safety and property of the
general public and to abate and dismantle the same."19 Six (6) days later, on October 10, 2006,
Administrative Order No. 160-A20 was issued, supplementing Administrative Order No. 160 and "[s]pecifying
the legal grounds and procedures for the prohibition and abatement of billboards and signboards
constituting public nuisance or other violations of law."21

Section 1 of Administrative Order No. 160 laid out instructions to the Department of Public Works and
Highways, as follows:

SECTION 1. Tasks of the DPWH. The DPWH is hereby tasked to:

1.1. Conduct field inspection and determine (a) billboards posing imminent danger or threat to the life,
health, safety and property of the public; (b) billboards violating applicable laws, rules and regulations; (c)
billboards constructed within the easement of road right-of-way; and (d) billboards constructed without the
necessary permit. Priority shall be given to billboards located along major roads in Metro Manila and other
cities and other national highways and major thoroughfares, as determined by DPWH;

1.2. Upon evaluation and assessment, issue a certification as to those billboards found to be hazardous and
violative of existing standards prescribed by the National Building Code, Structural Code of the Philippines
and other related legal issuances furnishing copy [sic] of the certification to the LGUs concerned which have
jurisdiction over the location of the billboards;

1.3. Abate and dismantle those billboards, commercial or non-commercial, constructed on private or public
properties found to be falling under any and all grounds enumerated in paragraph 1.1. above;

1.4. Submit a detailed written report to the Department of Justice (DOJ) to serve as basis for the possible
filing of appropriate civil or criminal cases;

1.5. Call upon the Philippine National Police (PNP) to provide assistance in the dismantling of billboards and
other off-site signs declared as covered under paragraph 1.1. above.22
chanroblesv irt uallawl ibra ry

Section 2 of Administrative Order No. 160 provided that the Department of Public Works and Highways shall
be assisted by the Metro Manila Development Authority and by local government units:

SECTION 2. Assistance by MMDA and LGUs. The Metropolitan Manila Development Authority (MMDA) and/or
the concerned LGUs are hereby directed to give full support and assistance to the DPWH for the immediate
inspection, assessment and abatement of billboards found to be hazardous and violative of the National
Building Code, Structural Code of the Philippines and other related issuances.23
chanroblesv irt uallawl ibra ry

Proceeding from Articles 694,24 695,25 and 69926 of the Civil Code, Administrative Order No. 160-A
cralaw red

identified the remedies available to the Department of Public Works and Highways:

SECTION 4. Remedies Against Public Nuisance. Pursuant to Article 699 of the Civil Code, in relation to AO
No. 160, dated October 4, 2006, the Department of Public Works and Highways (DPWH), through its
Secretary, with the help of the Metropolitan Manila Development Authority (MMDA), and the various local
government units (LGUs), through the local Building Officials, shall take care that one or all of the following
remedies against public nuisances are availed of:

(a) A prosecution under the Revised Penal Code or any local ordinance;
or

(b) A civil action; or

 (c) Abatement, without judicial proceedings, if the local Building Official
determines that this is the best remedy under the circumstances.27
chanroblesv irt uallawl ibra ry

On October 6, 2006, the Department of Public Works and Highways announced that they would start
dismantling billboards.28 During its operations, it was able to remove 250 of City Advertising Ventures
Corporation's lamppost banners and frames, 12 pedestrian overpass banners, 17 pedestrian overpass
frames, and 36 halogen lamps.29

City Advertising Ventures Corporation then filed before the Regional Trial Court of Makati City its Complaint
for "Violation of [Administrative Order No.] 160, Tort, [and] Injunction with Prayer for [Temporary
Restraining Order], Preliminary Injunction, and Preliminary Mandatory Injunction"30 dated October 18, 2006.

Asserting that Administrative Order No. 160 pertained specifically to "billboards" (i.e., "large panel[s] that
carr[y] outdoor advertising") and not to small advertising fixtures such as its signages and banners, City
Advertising Ventures Corporation claimed that the Department of Public Works and Highways exceeded its
authority when it dismantled its banners and other fixtures.31 It also claimed that the Department of Public
Works and Highways "seriously impeded the pursuit of [its] legitimate business and ... unlawfully deprived
[it] of property, income and income opportunities ... without due process of law,"32 violated Articles
19,33 20,34 2135 and 32(2), (6), and (8)36 of the Civil Code, and impaired contractual obligations.37

After conducting summary hearings on October 25 and 30, 2006, Branch 66 of the Regional Trial Court of
Makati City issued the Order38 dated October 31, 2006 granting City Advertising Ventures Corporation's
prayer for a temporary restraining order. This Order stated:

Such being the case, the Court is left with no recourse but to GRANT the Temporary Restraining Order from
[sic] a period of twenty (20) days from today.

ACCORDINGLY, the defendants are hereby restrained from further removing, dismantling, and confiscating
any of plaintiff's lamppost and pedestrian overpass banners.

In the meantime, let the hearing on the plaintiff's application for Writ of Preliminary Injunction [be set] on
November 8, 2006 at 2:00 p.m.

Let a copy of this order be served upon the defendants at the expense of the plaintiff through the Process
Server of this Court.

SO ORDERED.39
chanroblesv irt uallawl ibra ry

In the Order40 dated November 21, 2006, the Regional Trial Court granted City Advertising Ventures
Corporation's prayer for the issuance of a writ of preliminary injunction:

Wherefore, plaintiff's prayer for the issuance of a writ or preliminary injunction is granted. Accordingly, let a
writ of injunction issue upon the filing by the plaintiff of a bond in the amount of PESOS ONE HUNDRED
THOUSAND (P100,000.00) executed to the defendants to the effect that the plaintiff will pay all damages
defendants may suffer by reason of this injunction should the Court finally decide that the plaintiff is not
entitled thereto. The defendants, their agents and representatives are hereby ordered to cease and desist
from further removing, dismantling and confiscating any of plaintiff's lamppost and pedestrian overpass
banners.

Let the hearing on the main case be set on January 23, 2006 [sic] at 8:30 in the morning.

SO ORDERED.41
chanroblesv irt uallawl ibra ry

In response, the Department of Public Works and Highways and the Metropolitan Manila Development
Authority filed an Omnibus Motion for Reconsideration and Clarification of the November 21, 2006 Order and
for the Dissolution of the Writ of Preliminary Injunction.42 They asserted that City Advertising Ventures
Corporation failed to show a clear legal right worthy of protection and that it did not stand to suffer grave
and irreparable injury.43 They likewise asserted that the Regional Trial Court exceeded its authority in
issuing a writ of preliminary injunction.44

In the Order45 dated April 11, 2007, the Regional Trial Court denied the Omnibus Motion.

Thereafter, the Department of Public Works and Highways and the Metropolitan Manila Department
Authority filed before the Court of Appeals a Petition for Certiorari and Prohibition.46 In its assailed
December 3, 2007 Resolution,47 the Court of Appeals denied the Petition. In its assailed May 14, 2008
Resolution,48 the Court of Appeals denied the Motion for Reconsideration.

Hence, this Petition49 was filed.

On November 3, 2008, respondent City Advertising Ventures Corporation filed its Comment.50 On April 14,
2009, petitioners filed their Reply.51

In the Resolution52 dated July 7, 2010, this Court issued a temporary restraining order enjoining the
implementation of the Regional Trial Court's November 21, 2006 and April 11, 2007 Orders, as well as of a
subsequent May 21, 2010 Order, which reiterated the trial court's November 21, 2006 and April 11, 2007
Orders.

For resolution is the sole issue of whether the Regional Trial Court gravely abused its discretion in issuing its
November 21, 2006 and April 11, 2007 Orders.

After seeking relief from the Court of Appeals through the remedy of a petition for certiorari and prohibition
under Rule 65 of the 1997 Rules of Civil Procedure, petitioners come to this Court through a petition for
review on certiorari under Rule 45. The distinctions between Rule 65 and Rule 45 petitions have long been
settled. A Rule 65 petition is an original action, independent of the action from which the assailed ruling
arose. A Rule 45 petition, on the other hand, is a mode of appeal. As such, it is a continuation of the case
subject of the appeal. In Sy v. Commission on Settlement of Land Problems:53

[T]he remedy of certiorari under Rule 65 is not a component of the appeal process. It is an original and
independent action that is not a part of the trial which resulted in the rendition of the judgment complained
of. In contrast, the exercise of our appellate jurisdiction refers to a process which is but a continuation of the
original suit.54
chanroblesv irt uallawl ibra ry

As it is a mere continuation, a Rule 45 petition (apart from being limited to questions of law) cannot go
beyond the issues that were subject of the original action giving rise to it. This is consistent with the basic
precept that:

As a rule, no question will be entertained on appeal unless it has been raised in the court below. 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 they cannot be raised for the first time at that late
stage. Basic considerations of due process impel this rule.55
chanroblesv irt uallawl ibra ry

Rule 45 petitions engendered by prior Rule 65 petitions for certiorari and/or prohibition are, therefore,
bound by the same basic issue at the crux of the prior Rule 65 petition, that is, "issues of jurisdiction or
grave abuse of discretion." 56 When Rule 45 petitions are brought before this Court, they remain tethered to
the "sole office"57 of the original action to which they owe their existence: "the correction of errors of
jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of
jurisdiction."58

When petitioners sought relief from the Court of Appeals, what they sought to remedy was the Regional Trial
Court's issuance of its November 21, 2006 and April 11, 2007 Orders. These were interlocutory orders
pertaining to a temporary relief extended to respondent, that is, a writ of preliminary injunction. These
orders were not judgments that completely disposed of Civil Case No. 06-899. They were not the Regional
Trial Court's final ruling on Civil Case No. 06-899. By the time petitioners sought redress from the Court of
Appeals (and even at the time of the filing of their appeal before this Court), the Regional Trial Court had
not yet even ruled on the merits of Civil Case No. 06-899.

The question before the Court of Appeals was, therefore, limited to the matter of whether the Regional Trial
Court's issuance of a writ of preliminary injunction was tainted with grave abuse of discretion. On appeal
from the original action brought before the Court of Appeals, it is this same, singular issue that confronts us.

This Court cannot, at this juncture, entertain petitioners' prayer that the Regional Trial Court be ordered to
dismiss Civil Case No. 06-899. Ruling on the complete cessation of a civil action on grounds other than those
permitted by Rule 1659 of the 1997 Rules of Civil Procedure (on motions to dismiss filed before the filing of
an answer and before the conduct of trial; on grounds such as supervening events that render a pending
action moot, unlitigable; or on grounds that render relief impracticable or impossible) compels an
examination of the merits of a case. The case must then be litigatedthrough trial, reception of evidence,
and examination of witnesses. This entire process will be frustrated were this Court to rule on Civil Case No.
06-899's dismissal on the basis only of allegations made in reference to provisional relief extended before
trial even started.

In ruling on the propriety of the Regional Trial Court's issuance of a writ of preliminary injunction, both the
Court of Appeals and this Court are to be guided by the established standard on what constitutes grave
abuse of discretion:

By grave abuse of discretion is meant capricious and whimsical exercise of judgment as is equivalent to lack
of jurisdiction. Mere abuse of discretion is not enough. It must be grave abuse of discretion as when the
power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must
be so patent and so gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the
duty enjoined or to act at all in contemplation of law.60
chanroblesv irt uallawl ibra ry

The sole question, then, is whether the Regional Trial Court, in issuing a writ of preliminary injunction in
favor of respondent, acted in a manner that was practically bereft of or violative of legally acceptable
standards.

We turn to the basic principles governing the Issuance of writs of preliminary injunction.

II

A writ of preliminary injunction is issued in order to:

[P]revent threatened or continuous irremediable injury to some of the parties before their claims can be
thoroughly studied and adjudicated. Its sole aim is to preserve the status quo until the merits of the case
can be heard fully[.] Thus, it will be issued only upon a showing of a clear and unmistakable right that is
violated. Moreover, an urgent necessity for its issuance must be shown by the applicant.61 (Emphasis
supplied)
cralawlawl ibra ry

Rule 58, Section 3 of the 1997 Rules of Civil Procedure identifies the instances when a writ of preliminary
injunction may be issued:

Section 3. Grounds for issuance of preliminary injunction. A preliminary injunction may be granted when
it is established:

(a) That the applicant is entitled to the relief demanded, and the whole
or part of such relief consists in restraining the commission or
continuance of the act or acts complained of, or in requiring the
performance of an act or acts either for a limited period or
perpetually;
 (b) That the commission, continuance or non-performance of the act or
acts complained of during the litigation would probably work injustice
to the applicant; or

(c) That a party, court, agency or a person is doing, threatening, or is

attempting to do, or is procuring or suffering to be done some act or
acts probably in violation of the rights of the applicant respecting the
subject of the action or proceeding, and tending to render the
judgment ineffectual.
chanroblesv irt uallawl ibra ry

As Marquez v. Sanchez62 summarized, "the requisites of preliminary injunction whether mandatory or

prohibitory are the following":

(1) the applicant must have a clear and unmistakable right, that is a
right in esse;

(2) there is a material and substantial invasion of such right;

(3) there is an urgent need for the writ to prevent irreparable injury to
the applicant; and

(4) no other ordinary, speedy, and adequate remedy exists to prevent

the infliction of irreparable injury.63 (Emphasis in the original)
chanroblesv irt uallawl ibra ry

In satisfying these requisites, parties applying for a writ of preliminary injunction need not set out their
claims by complete and conclusive evidence. Prima facie evidence suffices:

It is crystal clear that at the hearing for the issuance of a writ of preliminary injunction, mere prima facie
evidence is needed to establish the applicant's rights or interests in the subject matter of the main action. It
is not required that the applicant should conclusively show that there was a violation of his rights as this
issue will still be fully litigated in the main case. Thus, an applicant for a writ is required only to show that he
has an ostensible right to the final relief prayed for in his complaint.64 (Emphasis supplied)
chanroblesv irt uallawl ibra ry

Spouses Nisce v. Equitable PCI Bank65 discussed the requisites, vis-a-vis the proof required, for issuing a
writ of preliminary injunction:

The plaintiff praying for a writ of preliminary injunction must further establish that he or she has a present
and unmistakable right to be protected; that the facts against which injunction is directed violate such right;
and there is a special and paramount necessity for the writ to prevent serious damages. In the absence of
proof of a legal right and the injury sustained by the plaintiff, an order for the issuance of a writ of
preliminary injunction will be nullified. Thus, where the plaintiff's right is doubtful or disputed, a preliminary
injunction is not proper. The possibility of irreparable damage without proof of an actual existing right is not
a ground for a preliminary injunction.

However, to establish the essential requisites for a preliminary injunction, the evidence to be submitted by
the plaintiff need not be conclusive and complete. The plaintiffs are only required to show that they have an
ostensible right to the final relief prayed for in their complaint. A writ of preliminary injunction is generally
based solely on initial or incomplete evidence. Such evidence need only be a sampling intended merely to
give the court an evidence of justification for a preliminary injunction pending the decision on the merits of
the case, and is not conclusive of the principal action which has yet to be decided.66
chanroblesv irt uallawl ibra ry

Clearly, a writ of preliminary injunction is an ancillary and interlocutory order issued as a result of an
impartial determination of the context of both parties. It entails a procedure for the judge to assess whether
the reliefs prayed for by the complainant will be rendered moot simply as a result of the parties' having to
go through the full requirements of a case being fully heard on its merits. Although a trial court judge is
given a latitude of discretion, he or she cannot grant a writ of injunction if there is no clear legal right
materially and substantially breached from a prima facie evaluation of the evidence of the complainant. Even
if this is present, the trial court must satisfy itself that the injury to be suffered is irreparable.

III

Respondent satisfied the standards for the issuance of a writ of preliminary injunction. The Regional Trial
Court acted in keeping with these standards and did not gravely abuse its discretion in extending temporary
relief to respondent.

III.A

Petitioners have conceded that respondent entered into a lease agreement enabling the latter to use
MERALCO's lampposts to display advertising banners.67 Respondent obtained permits from the local
government units of Makati, Pasay, and Quezon City so that it could put up banners and signages on
lampposts and pedestrian overpasses.68

There was no allegation nor contrary proof "[t]hat the ordinary course of business has been
followed."69Respondent must have obtained the customary permits and clearances (e.g., Mayor's and
business permits as well as registration with the Securities and Exchange Commission and with the Bureau
of Internal Revenue) necessary to make itself a going concern.

Respondent's lease agreement with MERALCO Financing Services Corporation and its having secured
permits from local government units, for the specific purpose of putting up advertising banners and
signages, gave it the right to put up such banners and signages. Respondent had in its favor a property
right, of which it cannot be deprived without due process. This is respondent's right in esse, that is, an
actual right. It is not merely a right in posse, or a potential right.

III.B

Petitioners counter that respondent had no right to put up banners and signages. They point out that on
September 2, 2004, the Metro Manila Council passed MMDA Regulation No. 04-004, "[p]rescribing guidelines
on the installation and display of billboards and advertising signs along major and secondary thoroughfares,
avenues, streets, roads, parks and open spaces within Metro Manila and providing penalties for violation
thereof."70

Section 13 of this Regulation identified the officers responsible for issuing clearances for the installation of
"billboards/signages and advertising signs," as follows:

Section 13. The MMDA, thru the Chairman or his duly authorized representative, shall be the approving
authority in the issuance of clearance in the installation of billboards/signboards and advertising signs along
major thoroughfares of Metro Manila. Upon securing clearance from the MMDA, a permit from the Local
Government Unit must be secured. (The list of major thoroughfares is hereto attached as Appendix A of this
Regulation).
The City/Municipal Mayor or his duly authorized representative shall be the approving authority in the
issuance of permit for the installation/posting billboards/signboards and advertising signs along local roads
and private properties of Metro Manila.
chanroblesv irt uallawl ibra ry

Petitioners claim that the dismantling of respondent's banners and signages was "[f]or want of the required
MMDA clearance(s) ... and for other violation[s] of MMDA Regulation No. 04-004."71 Petitioners also counter
that "sidewalk and streetlight posts are outside the commerce of men"72 and, therefore, cannot be spaces
for respondent's commercial activities. They also claim that respondent's contract with MERALCO Financing
Services Corporation has since expired.73 Petitioners likewise underscore that the right to non-impairment of
contracts "is limited by the exercise of the police power of the State, in the interest of public health, safety,
morals and general welfare."74

Petitioners may subsequently and after trial prove that they are correct. A more thorough examination of
prevailing laws, ordinances, and pertinent regulations may later on establish that the use of lampposts and
pedestrian overpasses as platforms for visual advertisements advancing private commercial interests
contradict the public character of certain spaces. Likewise, petitioners did subsequently adduce evidence
that, by December 29, 2006, respondent's contract with MERALCO Financing Services Corporation had
expired.75 After trial, it may later on be found that respondent's proprietary interest may be trumped by the
general welfare.

However, at the point when the Regional Trial Court was confronted with respondents prayer fortemporary
relief, all that respondent needed was a right ostensibly in existence. Precisely, a writ of preliminary
injunction is issued "before [parties'] claims can be thoroughly studied and adjudicated."76

MMDA Regulation No. 04-004's clearance requirements appear to stand in contrast with the permits
obtained by respondent from the local government units of Makati, Pasay, and Quezon City. Whether the
permits suffice by themselves, or whether respondent's alleged non-compliance with MMDA Regulation No.
04-004 is fatal to its cause, are matters better resolved by a process more painstaking than the summary
hearings conducted purely for the purpose of extending provisional remedy.

The phrase "outside the commerce of men"77 is not an incantation that can be invoked to instantly establish
the accuracy of petitioners' claims. 'Public spaces' are not a monolithic, homogenous mass that is impervious
to private activity. Determining whether the specific locations where respondent conducts its business is
absolutely excluded from commercial activity requires more rigorous fact-finding and analysis.

Although "public health, safety, morals and general welfare"78 may justify intrusion into private commercial
interests, the exercise of police power entails considerations of due process, fitness, and propriety. Even
when these considerations are invoked, they do not peremptorily and invariably set aside private property
rights. When acting in view of these considerations, state organs must still do so with restraint and act only
to the extent reasonably necessary. Whether state organs actually did so is something that can only be
adjudged when the competing claims of the State and of private entities are conscientiously and deliberately
appraised.

Even by petitioners' own allegation, the expiration of respondent's lease agreement with MERALCO Financing
Services Corporation did not happen until after November 21, 2006, when the Regional Trial Court issued
the contentious writ of preliminary injunction.79 It was a subsequent fact, which could have only been
proven later during trial, and which was still inefficacious when respondent pleaded for provisional relief.

Petitioners' own arguments demonstrate the need for litigationa thorough study and adjudicationof the
parties' competing claims. When the Regional Trial Court extended provisional relief on November 21, 2006,
it did not yet have the benefit of exhaustive litigation. That it acted without such benefit is not something for
which it can be faulted. It did not gravely abuse its discretion then, because it did not yetneed to engage in
full litigation.

III.C

Turning to the other requisites for the issuance of a writ of preliminary injunction, we find that respondent
adequately averred and showed a material and substantial invasion of its ostensible right, for which the writ
or preliminary injunction was necessary lest that invasion persist and it be made to suffer irreparable injury.
As respondent pointed out, the filing of its Complaint was precipitated by the removal of no less than 250 of
its lamppost banners and frames, as well as 12 of its pedestrian overpass banners, 17 pedestrian overpass
frames, and 36 halogen lamps.80 All these were done in the span of less than two (2) weeks.81Petitioners do
not dispute this. Moreover, nowhere does it appear that petitioners intended to restrict themselves to these
250 lamppost banners and frames, 12 pedestrian overpass banners, 17 pedestrian overpass frames, and 36
halogen lamps. On the contrary, their incessant attempts at having the Regional Trial Court's writ of
preliminary injunction liftedfirst, on reconsideration at the Regional Trial Court itself; next, on certiorari
and prohibition, and later, on reconsideration at the Court of Appeals; then, on appeal before this Court; and
still later, on their June 15, 2010 Motion before this Courtare indicative of their sheer resolve to dismantle
more. Respondent was left with no justifiable recourse but to seek relief from our courts.

Petitioners' admitted and pronounced course of action directly obstructed respondent's ability to avail itself
of its rights under its lease agreement and the permits it secured from local government units. What
petitioners sought to restrict was the very essence of respondent's activity as a business engaged in
advertising via banners and signages. As the Regional Trial Court explained in its April 11, 2007 Order:

It bears stressing that the lifeblood of a business rests on effective advertising strategies. One of which is
the posting of billboards and signages at strategic places. The manner of posting may be regulated by the
government but must comply with certain requirements, and should not result in taking of property without
due process or in wanton disregard of existing laws. It stands to reason that [petitioners] are not vested
with blanket authority to confiscate billboards without warning and in violation of existing laws.82

IV

Administrative Order No. 160's mere existence, absent a showing of compliance with its instructions, gives
no solace to petitioners. Administrative Order No. 160 expressed the Chief Executive's general directive for
the abatement of billboards that pose a hazard to the general welfare. In doing so, it did not give petitioner
Department of Public Works and Highways unbridled authority to dismantle all billboards and signages.
Administrative Order No. 160 prescribed a well-defined process for the carrying out of petitioner Department
of Public Works and Highways' functions. Before any such abatement and dismantlingas permitted by
paragraph 1.3paragraphs 1.1 and 1.2 of Administrative Order No. 160 require the Department of Public
Works and Highways to: first, conduct field inspections; second, make evaluations and assessments; third,
issue certifications as to those billboards found to be hazardous and violative of existing standards; and
fourth, furnish copies of these certifications to concerned local government units.

Six (6) days after it was issued, Administrative Order No. 160 was supplemented by Administrative Order
No. 160-A.83 This subsequent issuance recognized that hazardous billboards are public nuisances.84 Thus, in
its Section 4, it prescribed remedies consistent with Article 699 of the Civil Code:

(a) A prosecution under the Revised Penal Code or any local ordinance; or
(b) A civil action; or
(c) Abatement, without judicial proceedings, if the local Building Official determines that this is the best
remedy under the circumstances.85
chanroblesv irt uallawl ibra ry

In its October 31, 2006 Order, which issued an initial 20-day temporary restraining order in favor of
respondent, the Regional Trial Court emphasized that despite the opportunity extended to petitioners (in the
October 25 and 30, 2006 summary hearings) to present evidence of their compliance with paragraphs 1.1
and 1.2 of Administrative Order No. 160, with Section 4 of Administrative Order No. 160-A, or with Article
699 of the Civil Code, petitioners failed to show any such evidence.86 From all indications, petitioners
proceeded to dismantle respondent's banners and signages without having first completed formal or
systematic field inspections, as well as evaluations and assessments, and without having first issued written
certifications and furnished local government units with copies of these certifications. In the 12-day span
between petitioner Department of Public Works and Highways' October 6, 2006 announcement that it would
start dismantling billboards, and respondent's October 18, 2006 Complaint, petitioners managed to
dismantle a considerable number of respondent's banners and signages while apparently ignoring the same
regulations from which they drew their authority:

So far, no evidence has been presented by the [petitioners] to the satisfaction of this Court that they had
strictly observed the procedure laid down by Administrative Order No. 160 and prescribed by law for the
abatement of billboards and signboards found to have been a public nuisance before carrying their tasks of
dismantling the banners and other temporary signages belonging to [respondent].87
chanroblesv irt uallawl ibra ry

In its November 21, 2006 Order, the Regional Trial Court reiterated that petitioners had yet to adduce proof
of their prior compliance with paragraphs 1.1 and 1.2 of Administrative Order No. 160, with Section 4 of
Administrative Order No. 160-A, or with Article 699 of the Civil Code. This, even after the conduct of another
hearing on November 8, 2006:88

The Court finds that the continuous removal and destruction of [respondent's] billboards without due notice
and without following the procedure provided under the law. No price can be placed on the deprivation of a
person's right to his property without due process of law.

The New Civil Code provides for remedies against a public nuisance which [respondent's] billboards are
classified by [petitioners].

Article 699 of the New Civil Code provides that a public nuisance [may be] prosecuted under the penal code
or any local ordinance, by civil action or by abatement. The district health officer if required to determine
whether or not abatement, without judicial proceedings, is the best remedy against a public nuisance. Any
private person may abate a public nuisance which is specially injurious to him by removing or if necessary,
by destroying the thing which constitutes the same, without committing a breach of the peace, or doing
unnecessary injury. But it is necessary: (1) That demand be first made upon the owner or possessor of the
property to abate the nuisance; (2) That such demand has been rejected; (3) That the abatement be
approved by the district health officer and executed with the assistance of the local police[; and] (4) That
the value of the destruction does not exceed three thousand pesos.

However, as found by the Court in the Order granting the temporary restraining order, no evidence was
presented by [petitioners] to prove that they had strictly observed the procedure laid down by
Administrative Order No. 160 or the provisions of the New Civil Code on abatement of public nuisance.89
chanroblesv irt uallawl ibra ry

In its April 11, 2007 Order, the Regional Trial Court again emphasized the utter lack of such proof from
petitioners:90

The Court maintains [that] there is no justifiable reason to dissolve the issued preliminary injunction. The
fact remains that [petitioners] disregarded the minimum requirements of due process under Administrative
Order [No.] 160 when they dismantled [respondent's] banners duly licensed by the local government
concerned and covered by a legitimate agreement with MERALCO. No proof was shown by [petitioners] that
they had complied with the requirements of [Administrative Order No.] 160 particularly as to the evaluation
and certification process prior to the dismantling, or to the creation of a task force, or at least a finding that
said banners or [respondent] are nuisances or hazardous. Worse, they jumped right into abatement,
skipping initial investigatory stages and the all-important feature that id due process.91
chanroblesv irt uallawl ibra ry

The Court of Appeals' assailed December 3, 2007 Resolution drew attention to petitioners' failure to show
proof of such compliance.92 Even now, in their Petition for Review on Certiorari before us, petitioners make
no reference whatsoever to satisfying Administrative Order No. 160's, 160-A's, and the Civil Code's
procedural requisites.

Even if it were to be assumed that Administrative Order No. 160's and 160-A's procedural requirements
completely and impeccably satisfy the standards of due process, it remains that petitioners have not shown
that they complied with these administrative mechanisms. Their complete and protracted silence on this
compliance is glaring. It would have been easy for them to simply state that they have complied with the
same instrument from which they are drawing their authority. Petitioners' utter inability to even make any
such allegation, let alone to offer proof of compliance with Administrative Order No. 160's and 160-A's due
process safeguards is detrimental to their cause.

Petitioners' final bid at securing this Court's favor is through a reference to Republic Act No. 8975.93Section
3 of Republic Act No. 8975 provides:

Sec. 3. Prohibition on the Issuance of Temporary Restraining Orders, Preliminary Injunctions and Preliminary
Mandatory Injunctions. - No court, except the Supreme Court, shall issue any temporary restraining order,
preliminary injunction or preliminary mandatory injunction against the government, or any of its
subdivisions, officials or any person or entity, whether public or private, acting under the government's
direction, to restrain, prohibit or compel the following acts:

(a) Acquisition, clearance and development of the right-of-way and/or

site or location of any national government project;

(b) Bidding or awarding of contract/project of the national government

as defined under Section 2 hereof;

(c) Commencement, prosecution, execution, implementation, operation

of any such contract or project;

(d) Termination or rescission of any such contract/project; and

(e) The undertaking or authorization of any other lawful activity

necessary for such contract/project.
chanroblesv irt uallawl ibra ry

This prohibition shall apply in all cases, disputes or controversies instituted by a private party, including but
not limited to cases filed by bidders or those claiming to have rights through such bidders involving such
contract/project. This prohibition shall not apply when the matter is of extreme urgency involving a
constitutional issue, such that unless a temporary restraining order is issued, grave injustice and irreparable
injury will arise. The applicant shall file a bond, in an amount to be fixed by the court, which bond shall
accrue in favor of the government if the court should finally decide that the applicant was not entitled to the
relief sought.

If after due hearing the court finds that the award of the contract is null and void, the court may, if
appropriate under the circumstances, award the contract to the qualified and winning bidder or order a
rebidding of the same, without prejudice to any liability that the guilty party may incur under existing laws.
chanroblesv irt uallawl ibra ry

Petitioners claim that Republic Act No. 8975's prohibition applies to their efforts to protect the public's
welfare by dismantling billboards.94

Republic Act No. 8975 was enacted to "ensure the expeditious and efficient implementation and
completion of government infrastructure projects,"95 specifically for the purposes of "avoid[ing] unnecessary
increase in construction, maintenance and/or repair costs and to immediately enjoy the social and economic
benefits therefrom."96 Its scope and aims are clear.

Removing or dismantling billboards, banners, and signages cannot qualify as acts relating to the
implementation and completion of "government infrastructure projects," or of "national government
projects"97 within the contemplation of Republic Act No. 8975. They do not involve the construction,
operation, maintenance, repair, or rehabilitation of structures for public use. Neither do they involve the
acquisition, supply, or installation of equipment and materials relating to such structures; nor the reduction
of costs or the facilitation of public utility. What they entail are preventive and even confiscatory
mechanisms. Moreover, while it is also true that public taking may be a prelude to the completion of
facilities for public use (e.g., expropriation for infrastructure projects), petitioners' removal and confiscation
here do not serve that specific end. Rather, they serve the overarching interest of public safety.

Petitioners prevented and threatened to prevent respondent from engaging in its cardinal business activity.
Their admitted actions and apparent inactions show that the well-defined due process mechanisms outlined
by Administrative Order No. 160 and 160-A were not followed. Confronted with acts seemingly tantamount
to deprivation of property without due process of law, the Regional Trial Court acted well within its
competence when it required petitioners to temporarily desist, pending a more complete and circumspect
estimation of the parties' rights.

WHEREFORE, the Petition is DENIED. The assailed December 3, 2007 and May 14, 2008 Resolutions of the
Court of Appeals in CA-G.R. SP No. 101420 are AFFIRMED without prejudice to the ultimate disposition of
Civil Case No. 06-899.

The temporary restraining order dated July 7, 2010 is LIFTED.

SO ORDERED. cralawlawlibra ry
G.R. No. 211356, September 29, 2014 - CRISOSTOMO B. AQUINO, Petitioner, v. MUNICIPALITY
OF MALAY, AKLAN, REPRESENTED BY HON. MAYOR JOHN P. YAP, SANGGUNIANG BAYAN OF
MALAY, AKLAN, REPRESENTED BY HON. EZEL FLORES, DANTE PASUGUIRON, ROWEN AGUIRRE,
WILBEC GELITO, JUPITER GALLENERO, OFFICE OF THE MUNICIPAL ENGINEER, OFFICE OF THE
MUNICIPAL TREASURER, BORACAY PNP CHIEF, BORACAY FOUNDATION, INC., REPRESENTED BY
NENETTE GRAF, MUNICIPAL AUXILIARY POLICE, AND JOHN AND JANE DOES, Respondents.

THIRD DIVISION

G.R. No. 211356, September 29, 2014

CRISOSTOMO B. AQUINO, Petitioner, v. MUNICIPALITY OF MALAY, AKLAN, REPRESENTED

BY HON. MAYOR JOHN P. YAP, SANGGUNIANG BAYAN OF MALAY, AKLAN, REPRESENTED
BY HON. EZEL FLORES, DANTE PASUGUIRON, ROWEN AGUIRRE, WILBEC GELITO,
JUPITER GALLENERO, OFFICE OF THE MUNICIPAL ENGINEER, OFFICE OF THE
MUNICIPAL TREASURER, BORACAY PNP CHIEF, BORACAY FOUNDATION, INC.,
REPRESENTED BY NENETTE GRAF, MUNICIPAL AUXILIARY POLICE, AND JOHN AND JANE
DOES, Respondents.

DECISION

VELASCO JR., J.:

Nature of the Case

Before the Court is a Petition for Review on Certiorari challenging the Decision1 and the Resolution
of the Court of Appeals (CA) in CA-G.R. SP No. 120042 dated August 13, 2013 and February 3,
2014, respectively. The assailed rulings denied Crisostomo Aquinos Petition for Certiorari for not
being the proper remedy to question the issuance and implementation of Executive Order No. 10,
Series of 2011 (EO 10), ordering the demolition of his hotel establishment.

The Facts

Petitioner is the president and chief executive officer of Boracay Island West Cove Management
Philippines, Inc. (Boracay West Cove). On January 7, 2010, the company applied for a zoning
compliance with the municipal government of Malay, Aklan.2 While the company was already
operating a resort in the area, the application sought the issuance of a building permit covering
the construction of a three-storey hotel over a parcel of land measuring 998 sqm. located in Sitio
Diniwid, Barangay Balagab, Boracay Island, Malay, Aklan, which is covered by a Forest Land Use
Agreement for Tourism Purposes (FLAgT) issued by the Department of Environment and Natural
Resources (DENR) in favor of Boracay West Cove.

Through a Decision on Zoning dated January 20, 2010, the Municipal Zoning Administrator denied
petitioners application on the ground that the proposed construction site was within the no build
zone demarcated in Municipal Ordinance 2000-131 (Ordinance).3 As provided in the
Ordinance: chanRoble svirtual Lawlib ra ry

SECTION 2. Definition of Terms. As used in this Ordinance, the following words, terms and
phrases shall mean as follows: chanRoble svirtual Lawlib ra ry

xxxx
(b) No Build Zone the space twenty-five (25) meters from the edge of the mean high water mark
measured inland;

xxxx

SECTION 3. No building or structure of any kind whether temporary or permanent shall be

allowed to be set up, erected or constructed on the beaches around the Island of Boracay and in
its offshore waters. During the conduct of special activities or special events, the Sangguniang
Bayan may, through a Resolution, authorize the Office of the Mayor to issue Special Permits for
construction of temporary structures on the beach for the duration of the special activity as
embodied in the Resolution.

In due time, petitioner appealed the denial action to the Office of the Mayor on February 1, 2010.

On May 13, 2010, petitioner followed up his appeal through a letter but no action was ever taken
by the respondent mayor. On April 5, 2011, however, a Notice of Assessment was sent to
petitioner asking for the settlement of Boracay West Coves unpaid taxes and other liabilities under
pain of a recommendation for closure in view of its continuous commercial operation since 2009
sans the necessary zoning clearance, building permit, and business and mayors permit. In reply,
petitioner expressed willingness to settle the companys obligations, but the municipal treasurer
refused to accept the tendered payment. Meanwhile, petitioner continued with the construction,
expansion, and operation of the resort hotel.

Subsequently, on March 28, 2011, a Cease and Desist Order was issued by the municipal
government, enjoining the expansion of the resort, and on June 7, 2011, the Office of the Mayor of
Malay, Aklan issued the assailed EO 10, ordering the closure and demolition of Boracay West
Coves hotel.

EO 10 was partially implemented on June 10, 2011. Thereafter, two more instances followed
wherein respondents demolished the improvements introduced by Boracay West Cove, the most
recent of which was made in February 2014.

Alleging that the order was issued and executed with grave abuse of discretion, petitioner filed a
Petition for Certiorari with prayer for injunctive relief with the CA. He argued that judicial
proceedings should first be conducted before the respondent mayor could order the demolition of
the companys establishment; that Boracay West Cove was granted a FLAgT by the DENR, which
bestowed the company the right to construct permanent improvements on the area in question;
that since the area is a forestland, it is the DENRand not the municipality of Malay, or any other
local government unit for that matterthat has primary jurisdiction over the area, and that the
Regional Executive Director of DENR-Region 6 had officially issued an opinion regarding the legal
issues involved in the present case; that the Ordinance admits of exceptions; and lastly, that it is
the mayor who should be blamed for not issuing the necessary clearances in the companys favor.

In rebuttal, respondents contended that the FLAgT does not excuse the company from complying
with the Ordinance and Presidential Decree No. 1096 (PD 1096), otherwise known as the National
Building Code of the Philippines. Respondents also argued that the demolition needed no court
order because the municipal mayor has the express power under the Local Government Code
(LGC) to order the removal of illegally constructed buildings.

Ruling of the Court of Appeals

In its assailed Decision dated August 13, 2013, the CA dismissed the petition solely on procedural
ground, i.e., the special writ of certiorari can only be directed against a tribunal, board, or officer
exercising judicial or quasi-judicial functions and since the issuance of EO 10 was done in the
exercise of executive functions, and not of judicial or quasi-judicial functions, certiorari will not lie.
Instead, the proper remedy for the petitioner, according to the CA, is to file a petition for
declaratory relief with the Regional Trial Court.

Petitioner sought reconsideration but this was denied by the CA on February 3, 2014 through the
challenged Resolution. Hence, the instant petition raising arguments on both procedure and
substance.

The Issues

Stripped to the essentials, the pivotal issues in the extant case are as follows: chanRoble svirtual Lawli bra ry

The propriety under the premises of the filing of a petition for certiorari instead of a
petition for declaratory relief;

a. Whether or not declaratory relief is still available to petitioner;

b. Whether or not the CA correctly ruled that the respondent mayor was performing neither
a judicial nor quasi-judicial function when he ordered the closure and demolition of
Boracay West Coves hotel;

Whether or not respondent mayor committed grave abuse of discretion when he issued
EO 10;

a. Whether or not petitioners right to due process was violated when the respondent mayor
ordered the closure and demolition of Boracay West Coves hotel without first conducting
judicial proceedings;

b. Whether or not the LGUs refusal to issue petitioner the necessary building permit and
clearances was justified;

c. Whether or not petitioners rights under the FLAgT prevail over the municipal ordinance
providing for a no-build zone; and ChanRoblesVirtualawl ibra ry

d. Whether or not the DENR has primary jurisdiction over the controversy, not the LGU.

The Courts Ruling

We deny the petition.

Certiorari, not declaratory relief, is the proper remedy

a. Declaratory relief no longer viable

Resolving first the procedural aspect of the case, We find merit in petitioners contention that the
special writ of certiorari , and not declaratory relief, is the proper remedy for assailing EO 10. As
provided under Sec. 1, Rule 63 of the Rules of Court: chanRoblesvi rtua lLawl ib rary

SECTION 1. Who may file petition. Any person interested under a deed, will, contract or other
written instrument, whose rights are affected by a statute, executive order or regulation,
ordinance or any other governmental regulation may, before breach or violation thereof, bring
an action in the appropriate Regional Trial Court to determine any question of construction or
validity arising, and for a declaration of his rights or duties, thereunder. x x x (emphasis added)

An action for declaratory relief presupposes that there has been no actual breach of the
instruments involved or of the rights arising thereunder. Since the purpose of an action for
declaratory relief is to secure an authoritative statement of the rights and obligations of the parties
under a statute, deed, or contract for their guidance in the enforcement thereof, or compliance
therewith, and not to settle issues arising from an alleged breach thereof, it may be entertained
before the breach or violation of the statute, deed or contract to which it refers. A petition for
declaratory relief gives a practical remedy for ending controversies that have not reached the state
where another relief is immediately available; and supplies the need for a form of action that will
set controversies at rest before they lead to a repudiation of obligations, an invasion of rights, and
a commission of wrongs.4 cralawlawlib rary

In the case at bar, the petition for declaratory relief became unavailable by EO 10s enforcement
and implementation. The closure and demolition of the hotel rendered futile any possible
guidelines that may be issued by the trial court for carrying out the directives in the challenged EO
10. Indubitably, the CA erred when it ruled that declaratory relief is the proper remedy given such
a situation.

b. Petitioner correctly resorted to certiorari

On the propriety of filing a petition for certiorari , Sec. 1, Rule 65 of the Rules of Court
provides: c hanRoble svirtual Lawli bra ry

Section 1. Petition for certiorari . When any tribunal, board or officer exercising judicial or quasi-
judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy,
and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified
petition in the proper court, alleging the facts with certainty and praying that judgment be
rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting
such incidental reliefs as law and justice may require. x x x

For certiorari to prosper, the petitioner must establish the concurrence of the following requisites,
namely: chanRoble svirtual Lawlib ra ry

1. The writ is directed against a tribunal, board, or officer exercising judicial or quasi-judicial
functions;

2. Such tribunal, board, or officer has acted without or in excess of jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction; and ChanRobles Vi rtua lawlib rary

3. There is no appeal or any plain speedy, and adequate remedy in the ordinary course of
law.5

Guilty of reiteration, the CA immediately dismissed the Petition for Certiorari upon determining
that the first element is wantingthat respondent mayor was allegedly not exercising judicial or
quasi-judicial functions when he issued EO 10.

We are not persuaded.

The CA fell into a trap when it ruled that a mayor, an officer from the executive department,
exercises an executive function whenever he issues an Executive Order. This is tad too
presumptive for it is the nature of the act to be performed, rather than of the office, board, or
body which performs it, that determines whether or not a particular act is a discharge of judicial or
quasi-judicial functions. The first requirement for certiorari is satisfied if the officers act judicially in
making their decision, whatever may be their public character.6 cralawlawl ibra ry

It is not essential that the challenged proceedings should be strictly and technically judicial, in the
sense in which that word is used when applied to courts of justice, but it is sufficient if they are
quasi-judicial.7 To contrast, a party is said to be exercising a judicial function where he has the
power to determine what the law is and what legal rights of the parties are, and then undertakes
to determine these questions and adjudicate upon the rights of the parties, whereas quasi-judicial
function is a term which applies to the actions, discretion, etc., of public administrative officers or
bodies x x x required to investigate facts or ascertain the existence of facts, hold hearings, and
draw conclusions from them as a basis for their official action and to exercise discretion of a
judicial nature.8 cralawlawl ibra ry

In the case at bench, the assailed EO 10 was issued upon the respondent mayors finding that
Boracay West Coves construction, expansion, and operation of its hotel in Malay, Aklan is illegal.
Such a finding of illegality required the respondent mayors exercise of quasi-judicial functions,
against which the special writ of certiorari may lie. Apropos hereto is Our ruling in City Engineer of
Baguio v. Baniqued:9 cralawlawl ibra ry

There is no gainsaying that a city mayor is an executive official nor is the matter of issuing
demolition notices or orders not a ministerial one. In determining whether or not a structure is
illegal or it should be demolished, property rights are involved thereby needing notices and
opportunity to be heard as provided for in the constitutionally guaranteed right of due process. In
pursuit of these functions, the city mayor has to exercise quasi-judicial powers.

With the foregoing discussion, the CA erred in ruling that the respondent mayor was merely
exercising his executive functions, for clearly, the first requisite for the special writ has been
satisfied.

Aside from the first requisite, We likewise hold that the third element, i.e., the unavailability of a
plain, speedy, or adequate remedy, is also present herein. While it may be argued that, under the
LGC, Executive Orders issued by mayors are subject to review by provincial governors,10 this
cannot be considered as an adequate remedy given the exigencies of petitioners predicament.

In a litany of cases, We have held that it is inadequacy, not the mere absence of all other legal
remedies and the danger of failure of justice without the writ, that must usually determine the
propriety of certiorari . A remedy is plain, speedy and adequate if it will promptly relieve the
petitioner from the injurious effects of the judgment, order, or resolution of the lower court or
agency. It is understood, then, that a litigant need not mark time by resorting to the less speedy
remedy of appeal in order to have an order annulled and set aside for being patently void for
failure of the trial court to comply with the Rules of Court.11 cralawl awlib rary

Before applying this doctrine, it must first be borne in mind that respondents in this case have
already taken measures towards implementing EO 10. In fact, substantial segments of the hotel
have already been demolished pursuant to the mayors directive. It is then understandable why
petitioner prayed for the issuance of an injunctive writa provisional remedy that would otherwise
have been unavailable had he sought a reversal from the office of the provincial governor of Aklan.
Evidently, petitioner correctly saw the urgent need for judicial intervention via certiorari .

In light of the foregoing, the CA should have proceeded to grab the bull by its horns and determine
the existence of the second element of certiorari whether or not there was grave abuse of
discretion on the part of respondents.

Upon Our finding that a petition for certiorari under Rule 65 is the appropriate remedy, We will
proceed to resolve the core issues in view of the urgency of the reliefs prayed for in the petition.

Respondents did not commit grave abuse of discretion

a. The hotels classification as a nuisance

Article 694 of the Civil Code defines nuisance as any act, omission, establishment, business,
condition or property, or anything else that (1) injures or endangers the health or safety of others;
(2) annoys or offends the senses; (3) shocks, defies or disregards decency or morality; (4)
obstructs or interferes with the free passage of any public highway or street, or any body of water;
or (5) hinders or impairs the use of property.12 cra lawlawlib rary

In establishing a no build zone through local legislation, the LGU effectively made a determination
that constructions therein, without first securing exemptions from the local council, qualify as
nuisances for they pose a threat to public safety. No build zones are intended for the protection of
the public because the stability of the grounds foundation is adversely affected by the nearby
body of water. The ever present threat of high rising storm surges also justifies the ban on
permanent constructions near the shoreline. Indeed, the areas exposure to potential geo-hazards
cannot be ignored and ample protection to the residents of Malay, Aklan should be afforded.

Challenging the validity of the public respondents actuations, petitioner posits that the hotel
cannot summarily be abated because it is not a nuisance per se, given the hundred million peso-
worth of capital infused in the venture. Citing Asilo, Jr. v. People,13 petitioner also argues that
respondents should have first secured a court order before proceeding with the demolition.

Preliminarily, We agree with petitioners posture that the property involved cannot be classified as
a nuisance per se, but not for the reason he so offers. Property valuation, after all, is not the
litmus test for such a determination. More controlling is the propertys nature and conditions,
which should be evaluated to see if it qualifies as a nuisance as defined under the law.

As jurisprudence elucidates, nuisances are of two kinds: nuisance per se and nuisance per
accidens. The first is recognized as a nuisance under any and all circumstances, because it
constitutes a direct menace to public health or safety, and, for that reason, may be abated
summarily under the undefined law of necessity. The second is that which depends upon certain
conditions and circumstances, and its existence being a question of fact, it cannot be abated
without due hearing thereon in a tribunal authorized to decide whether such a thing does in law
constitute a nuisance.14cralawlawli bra ry

In the case at bar, the hotel, in itself, cannot be considered as a nuisance per se since this type of
nuisance is generally defined as an act, occupation, or structure, which is a nuisance at all
times and under any circumstances, regardless of location or surrounding.15 Here, it is merely
the hotels particular incidentits locationand not its inherent qualities that rendered it a
nuisance. Otherwise stated, had it not been constructed in the no build zone, Boracay West Cove
could have secured the necessary permits without issue. As such, petitioner is correct that the
hotel is not a nuisance per se, but to Our mind, it is still a nuisance per accidens.

b. Respondent mayor has the power to order the demolition of illegal constructions

Generally, LGUs have no power to declare a particular thing as a nuisance unless such a thing is a
nuisance per se.16 So it was held in AC Enterprises v. Frabelle Properties Corp:17 cra lawlawlib rary

We agree with petitioners contention that, under Section 447(a)(3)(i) of R.A. No. 7160, otherwise
known as the Local Government Code, the Sangguniang Panglungsod is empowered to enact
ordinances declaring, preventing or abating noise and other forms of nuisance. It bears stressing,
however, that the Sangguniang Bayan cannot declare a particular thing as a nuisance per se and
order its condemnation. It does not have the power to find, as a fact, that a particular
thing is a nuisance when such thing is not a nuisance per se; nor can it authorize the
extrajudicial condemnation and destruction of that as a nuisance which in its nature,
situation or use is not such. Those things must be determined and resolved in the
ordinary courts of law. If a thing, be in fact, a nuisance due to the manner of its operation, that
question cannot be determined by a mere resolution of the Sangguniang Bayan. (emphasis
supplied)

Despite the hotels classification as a nuisance per accidens, however, We still find in this case that
the LGU may nevertheless properly order the hotels demolition. This is because, in the exercise of
police power and the general welfare clause,18 property rights of individuals may be subjected to
restraints and burdens in order to fulfill the objectives of the government. Otherwise stated, the
government may enact legislation that may interfere with personal liberty, property, lawful
businesses and occupations to promote the general welfare.19 cralawlawl ibra ry

One such piece of legislation is the LGC, which authorizes city and municipal governments, acting
through their local chief executives, to issue demolition orders. Under existing laws, the office of
the mayor is given powers not only relative to its function as the executive official of the town; it
has also been endowed with authority to hear issues involving property rights of individuals and to
come out with an effective order or resolution thereon.20 Pertinent herein is Sec. 444 (b)(3)(vi) of
the LGC, which empowered the mayor to order the closure and removal of illegally constructed
establishments for failing to secure the necessary permits, to wit: chanRoblesv irt ual Lawlib rary

Section 444. The Chief Executive: Powers, Duties, Functions and Compensation.

xxxx

(b) For efficient, effective and economical governance the purpose of which is the general welfare
of the municipality and its inhabitants pursuant to Section 16 of this Code, the municipal mayor
shall:
chan roble svirtual lawlib rary

xxxx

(3) Initiate and maximize the generation of resources and revenues, and apply the same to the
implementation of development plans, program objectives and priorities as provided for under
Section 18 of this Code, particularly those resources and revenues programmed for agro-industrial
development and country-wide growth and progress, and relative thereto, shall: c han roblesv irt uallawl ibra ry

xxxx

(vi) Require owners of illegally constructed houses, buildings or other structures to

obtain the necessary permit, subject to such fines and penalties as may be imposed by
law or ordinance, or to make necessary changes in the construction of the same when
said construction violates any law or ordinance, or to order the demolition or removal of
said house, building or structure within the period prescribed by law or
ordinance. (emphasis supplied)

c. Requirements for the exercise of the power are present

i. Illegality of structures

In the case at bar, petitioner admittedly failed to secure the necessary permits, clearances, and
exemptions before the construction, expansion, and operation of Boracay Wet Coves hotel in
Malay, Aklan. To recall, petitioner declared that the application for zoning compliance was still
pending with the office of the mayor even though construction and operation were already ongoing
at the same time. As such, it could no longer be denied that petitioner openly violated Municipal
Ordinance 2000-131, which provides: c hanRoble svirtual Lawli bra ry

SECTION 9. Permits and Clearances.

(a) No building or structure shall be allowed to start

construction unless a Building Permit therefore has been
duly issued by the Office of the Municipal Engineer. Once
issued, the building owner or any person in charge of the
construction shall display on the lot or on the building undergoing
construction a placard containing the Building Permit Number and
the date of its issue. The office of the Municipal Engineer
shall not issue any building permit unless:
1. The proposed construction has been duly issued a
Zoning Clearance by the Office of the Municipal Zoning
Officer;
2. The proposed construction has been duly endorsed by the
Sangguniang Bayan through a Letter of Endorsement.

(b) Only buildings/structures which has complied with all the

requirements for its construction as verified to by the Building
Inspector and the Sangguniang Bayan shall be issued a Certificate
of Occupancy by the Office of the Municipal Engineer.
(c) No Business or Mayors Permit shall be issued to
businesses being undertaken on buildings or structures
which were not issued a certificate of Occupancy beginning
January 2001 and thereafter.
xxxx

SECTION 10. Penalties.

xxxx

(e) Any building, structure, or contraption erected in any public place within the Municipality of
Malay such as but not limited to streets, thoroughfares, sidewalks, plazas, beaches or in any other
public place are hereby declared as nuisance and illegal structure. Such building structure or
contraption shall be demolished by the owner thereof or any of his authorized
representative within ten (10) days from receipt of the notice to demolish. Failure or
refusal on the part of the owner or any of his authorized representative to demolish the
illegal structure within the period herein above specified shall automatically authorize
the government of the Municipality of Malay to demolish the same, gather and keep the
construction materials of the demolished structure. (emphasis supplied)

Petitioner cannot justify his position by passing the blame onto the respondent mayor and the
latters failure to act on his appeal for this does not, in any way, imply that petitioner can proceed
with his infrastructure projects. On the contrary, this only means that the decision of the
zoning administrator denying the application still stands and that petitioner acquired no
right to construct on the no build zone. The illegality of the construction cannot be cured by
merely tendering payment for the necessary fees and permits since the LGUs refusal rests on
valid grounds.

Instead of taking the law into his own hands, petitioner could have filed, as an alternative, a
petition for mandamus to compel the respondent mayor to exercise discretion and resolve the
controversy pending before his office. There is indeed an exception to the rule that matters
involving judgment and discretion are beyond the reach of a writ of mandamus, for such writ may
be issued to compel action in those matters, when refused. Whether or not the decision would be
for or against petitioner would be for the respondent mayor to decide, for while mandamus may be
invoked to compel the exercise of discretion, it cannot compel such discretion to be exercised in a
particular way.21 What would have been important was for the respondent mayor to immediately
resolve the case for petitioner to be able to go through the motions that the zoning clearance
application process entailed.

Alas, petitioner opted to defy the zoning administrators ruling. He consciously chose to violate not
only the Ordinance but also Sec. 301 of PD 1096, laying down the requirement of building permits,
which provides: c hanRoble svirtual Lawlib ra ry

Section 301. Building Permits. No person, firm or corporation, including any agency or
instrumentality of the government shall erect, construct, alter, repair, move, convert or demolish
any building or structure or cause the same to be done without first obtaining a building permit
therefor from the Building Official assigned in the place where the subject building is located or the
building work is to be done.

This twin violation of law and ordinance warranted the LGUs invocation of Sec. 444 (b)(3)(vi) of
the LGC, which power is separate and distinct from the power to summarily abate nuisances per
se. Under the law, insofar as illegal constructions are concerned, the mayor can, after satisfying
the requirement of due notice and hearing, order their closure and demolition.
ii. Observance of procedural due process rights
In the case at bench, the due process requirement is deemed to have been sufficiently complied
with. First, basic is the rule that public officers enjoy the presumption of regularity in the
performance of their duties.22 The burden is on the petitioner herein to prove that Boracay West
Cove was deprived of the opportunity to be heard before EO 10 was issued. Regrettably, copies of
the Cease and Desist Order issued by the LGU and of the assailed EO 10 itself were never attached
to the petition before this Court, which documents could have readily shed light on whether or not
petitioner has been accorded the 10-day grace period provided in Section 10 of the Ordinance. In
view of this fact, the presumption of regularity must be sustained. Second, as quoted by petitioner
in his petition before the CA, the assailed EO 10 states that petitioner received notices from the
municipality government on March 7 and 28, 2011, requiring Boracay West Cove to comply with
the zoning ordinance and yet it failed to do so.23 If such was the case, the grace period can be
deemed observed and the establishment was already ripe for closure and demolition by the time
EO 10 was issued in June. Third, the observance of the 10-day allowance for the owner to
demolish the hotel was never questioned by petitioner so there is no need to discuss the same.
Verily, the only grounds invoked by petitioner in crying due process violation are (1) the absence
of a court order prior to demolition and (2) the municipal governments exercise of jurisdiction
over the controversy instead of the DENR. Therefore, it can no longer be belatedly argued that the
10-day grace period was not observed because to entertain the same would result in the violation
of the respondents own due process rights.

Given the presence of the requirements under Sec. 444 (b)(3)(vi) of the LGC, whether the building
constituted a nuisance per se or a nuisance per accidens becomes immaterial. The hotel was
demolished not exactly because it is a nuisance but because it failed to comply with the legal
requirements prior to construction. It just so happened that, in the case at bar, the hotels incident
that qualified it as a nuisance per accidensits being constructed within the no build zone
further resulted in the non-issuance of the necessary permits and clearances, which is a ground for
demolition under the LGC. Under the premises, a court order that is required under normal
circumstances is hereby dispensed with.

d. The FLAgT cannot prevail over the municipal ordinance and PD 1096

Petitioner next directs our attention to the following FLAgT provision: cha nRoblesv irt ual Lawlib rary

VII. The SECOND PARTY may construct permanent and/or temporary improvements or
infrastructure in the FLAgT Area necessary and appropriate for its development for tourism
purposes pursuant to the approved SMP. Permanent Improvements refer to access roads, and
buildings or structures which adhere to the ground in a fixed and permanent manner. On the other
hand, Temporary Improvements include those which are detachable from the foundation or the
ground introduced by the SECOND PARTY in the FLAgT Area and which the SECOND PARTY may
remove or dismantle upon expiration or cancellation of this AGREEMENT x x x.24 chanrobles law

Taken in conjunction with the exceptions laid down in Sections 6 and 8 of the Ordinance, petitioner
argues that Boracay West Cove is exempted from securing permits from the LGU. Said exceptions
read:chanRob lesvi rtual Lawli bra ry

SECTION 6. No building or structure shall be allowed to be constructed on a slope Twenty Five

Percent (25%) or higher unless provided with soil erosion protective structures and authorized by
the Department of Environment and Natural Resources.

xxxx

SECTION 8. No building or structure shall be allowed to be constructed on a swamp or other

water-clogged areas unless authorized by the Department of Environment and Natural Resources.

According to petitioner, the fact that it was issued a FLAgT constitutes sufficient authorization from
the DENR to proceed with the construction of the three-storey hotel.

The argument does not persuade.

The rights granted to petitioner under the FLAgT are not unbridled. Forestlands, although under
the management of the DENR, are not exempt from the territorial application of municipal laws,
for local government units legitimately exercise their powers of government over their defined
territorial jurisdiction.

Furthermore, the conditions set forth in the FLAgT and the limitations circumscribed in the
ordinance are not mutually exclusive and are, in fact, cumulative. As sourced from Sec. 447
(a)(5)(i) of the LGC: chanRoblesvi rtua lLawl ib rary

Section 447. Powers, Duties, Functions and Compensation.

(a) The sangguniang bayan, as the legislative body of the municipality, shall enact ordinances,
approve resolutions and appropriate funds for the general welfare of the municipality and its
inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers
of the municipality as provided for under Section 22 of this Code, and shall: chan roble svirtuallaw lib rary

xxxx

(5) Approve ordinances which shall ensure the efficient and effective delivery of the basic services
and facilities as provided for under Section 17 of this Code, and in addition to said services and
facilities, shall:
c han roblesv irt uallawl ibra ry

(i) Provide for the establishment, maintenance, protection, and conservation of

communal forests and watersheds, tree parks, greenbelts, mangroves, and other similar
forest development projects x x x. (emphasis added)

Thus, aside from complying with the provisions in the FLAgT granted by the DENR, it was
incumbent on petitioner to likewise comply with the no build zone restriction under Municipal
Ordinance 2000-131, which was already in force even before the FLAgT was entered into. On this
point, it is well to stress that Sections 6 and 8 of the Ordinance do not exempt petitioner from
complying with the restrictions since these provisions adverted to grant exemptions from the ban
on constructions on slopes and swamps, not on the no build zone.

Additionally, the FLAgT does not excuse petitioner from complying with PD 1096. As correctly
pointed out by respondents, the agreement cannot and will not amend or change the law because
a legislative act cannot be altered by mere contractual agreement. Hence, petitioner has no valid
reason for its failure to secure a building permit pursuant to Sec. 301 of the National Building
Code.

e. The DENR does not have primary jurisdiction over the controversy

Lastly, in ascribing grave abuse of discretion on the part of the respondent mayor, petitioner
argued that the hotel site is a forestland under the primary jurisdiction of the DENR. As such, the
merits of the case should have been passed upon by the agency and not by the LGU. In the
alternative, petitioner explains that even if jurisdiction over the matter has been devolved in favor
of the LGU, the DENR still has the power of review and supervision over the formers rulings. As
cited by the petitioner, the LGC reads: chanRoblesvi rtua lLawl ibra ry

Section 17. Basic Services and Facilities.

xxxx

(b) Such basic services and facilities include, but are not limited to, the following: c hanroblesv irt uallawl ibra ry

xxxx

(2) For a Municipality: chan roble svirtuallaw lib rary

xxxx

(ii) Pursuant to national policies and subject to supervision, control and review of the DENR,
implementation of community-based forestry projects which include integrated social forestry
programs and similar projects; management and control of communal forests with an area not
exceeding fifty (50) square kilometers; establishment of tree parks, greenbelts, and similar forest
development projects. (emphasis added)

Petitioner has made much of the fact that in line with this provision, the DENR Region 6 had issued
an opinion favourable to petitioner.25 To petitioner, the adverted opinion effectively reversed the
findings of the respondent mayor that the structure introduced was illegally constructed.

We disagree.

In alleging that the case concerns the development and the proper use of the countrys
environment and natural resources, petitioner is skirting the principal issue, which is Boracay West
Coves non-compliance with the permit, clearance, and zoning requirements for building
constructions under national and municipal laws. He downplays Boracay West Coves omission in a
bid to justify ousting the LGU of jurisdiction over the case and transferring the same to the DENR.
He attempts to blow the issue out of proportion when it all boils down to whether or not the
construction of the three-storey hotel was supported by the necessary documentary requirements.

Based on law and jurisprudence, the office of the mayor has quasi-judicial powers to order the
closing and demolition of establishments. This power granted by the LGC, as earlier explained, We
believe, is not the same power devolved in favor of the LGU under Sec. 17 (b)(2)(ii), as above-
quoted, which is subject to review by the DENR. The fact that the building to be demolished is
located within a forestland under the administration of the DENR is of no moment, for what is
involved herein, strictly speaking, is not an issue on environmental protection, conservation of
natural resources, and the maintenance of ecological balance, but the legality or illegality of the
structure. Rather than treating this as an environmental issue then, focus should not be diverted
from the root cause of this debaclecompliance.

Ultimately, the purported power of review by a regional office of the DENR over respondents
actions exercised through an instrumentality of an ex-parte opinion, in this case, finds no sufficient
basis. At best, the legal opinion rendered, though perhaps informative, is not conclusive on the
courts and should be taken with a grain of salt.

WHEREFORE, in view of the foregoing, the petition is hereby DENIED for lack of merit. The
Decision and the Resolution of the Court of Appeals in CA-G.R. SP No. 120042 dated August 13,
2013 and February 3, 2014, respectively, are hereby AFFIRMED.

SO ORDERED. cralawred
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 206423 July 1, 2015

LEONCIO ALANGDEO, ARTHUR VERCELES, and DANNY VERGARA, Petitioners,

vs.
The City Mayor of Baguio, HON. BRAULIO D. YARANON (to be substituted by incumbent City
Mayor, HON. MAURICIO DO MOGAN), JEOFREY MORTELA, Head Demolition Team, CITY
ENGINEER'S OFFICE, and ERNESTO LARDIZABAL, Respondents.

DECISION

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari 1are the Decision2 dated June 29, 2012 and the
Resolution 3 dated March 5, 2013 of the Court of Appeals (CA) in CA-G.R. CV No. 87439, which
reversed the Decision 4, dated April 27, 2006 of the Regional Trial Court of Baguio City, Branch 60
(RTC) in Civil Case No. 6007-R granting the complaint for injunction filed by herein petitioners
Leoncio Alangdeo, Arthur Verceles (Verceles ), and Danny Vergara (collectively, petitioners).

The Facts

On November 13, 2003, respondent Ernesto Lardizabal (Ernesto) filed a complaint for
demolition, 5before the City Engineer's Office 6of Baguio City (City Engineer's Office), questioning the
ongoing construction of a: residential structure and garage extension by petitioners on a parcel of
land, situated at Barangay Atok Trail, Baguio City (subject property), allegedly owned by Mariano
Pangloy and Ernesto's father, Juanito Lardizabal. 7 Upon investigation, the City Engineer's Office
found out that the construction had no building permit. Consequently, the City Mayor issued, through
the Secretary to the Mayor, Demolition Order No. 05, series of 2005 (DO No. 05) directing the City
Demolition Team to summarily demolish the said structures, to wit: 8

WHEREFORE, the CITY DEMOLITION TEAM is hereby directed to SUMMARILY DEMOLISH the
aforesaid structures of Atty. Leoncio Alangdeo, Arthur Verceles and/or Danny Vergara in accordance
with Section 3[,] par. 2.5 (a) of the implementing rules and regulations governing summary eviction
jointly issued by the Department of Interior and Local Government (DILG) and the Housing and
Urban Development Coordinating Council pursuant to Section 44, [A]rticle XII of [Republic Act (RA)
No. 7279 9(Emphases supplied)

Aggrieved, petitioners moved for a reconsideration of DO No. 05, but was denied by the City Mayor.
Thus, they were prompted to file a complaint for injunction and prohibition with the RTC, docketed as
Civil Case No. 6007-R, seeking to enjoin the implementation of said order. 10

In their complaint, petitioners applied for a temporary restraining order, which was granted by the
RTC. Subsequently, the RTC issued a writ of preliminary injunction pending the final determination
of the merits of the case.11
During trial, Verceles testified, among others, that he has a Tax Declaration and a pending
application for Ancestral Land Claim over the subject property filed before the National Commission
on Indigenous Peoples (NCIP), and that he has been paying taxes therefore and occupying the
same since 1977. 12 He also testified that Ernesto had previously filed a case with the Office of the
Department of Environment and Natural Resources (DENR)-Cordillera Administrative Region (CAR),
questioning his possession thereof, as well as, seeking the cancellation of his tax declaration over
the said property.13 The DENR-CAR dismissed the case in his favor, but Ernesto appealed to the
Office of the DENR Secretary. At the time the appeal was pending, Ernesto filed the complaint for
demolition before the City Engineer's Office. Verceles further testified that Barangay Atok Trail is
covered by Proclamation No. 414, series of 1957 (Proclamation 414), which declared the same as
mineral reservation for Baguio City, for which reason he was unable to get a title over the subject
property despite his possession thereof 14

Punong Barangay Stephen T. Aligo was also presented by petitioners as a witness. He testified that
by Resolution No.386, series of 1995, the City Council requested for the release of the vast area
covered by Proclamation 414, for housing purposes to be awarded to the occupants of Barangay
Atok Trail. Also, he narrated that in a census conducted in 2003, it was found that there were two
hundred thirty (230) houses in Barangay Atok Trail and none of these houses had building permits.15

On the other hand, respondents' witnesses, Antonio 0. Visperas, Robert Albas Awingan, and George
Addawe, Jr., all testified that the structures of petitioners on the subject property were not covered
by any building permit.16Additionally, Ernesto testified that the issue of possession over the said
property was the subject of an appeal pending before the Office of the DENR Secretary. 17

The RTC Ruling

In a Decision 18 dated April 27, 2006, the RTC enjoined the City Government of Baguio and its agents
from implementing DO No. 5 "until and after the resolution of all the cases/issues involving the
subject property and/or area affected by the appropriate government agencies concerned." The
injunction stemmed from its finding that Proclamation 414 declared the entire area of Barangay Atok
Trail as a buffer zone for the mining industry, and, for that reason, all structures constructed thereon
(and not only that of petitioners) were not covered by building permits. Thus, the RTC held that it
would violate the equal protection clause if it would allow the demolition of petitioners' structures
while leaving untouched the other structures in the area.19

Dissatisfied, respondents appealed 20 to the CA.

The CA Ruling

In a Decision 21 dated June 29, 2012, the CA reversed the ruling of the RTC, finding that petitioners
failed to show any right to be protected. It relied on the Decision 22 rendered on August 31, 2006 by
then DENR Secretary Angelo Reyes in DENR Case No. 5625, which recognized and respected the
ancestral and preferential rights of Mariano Pangloy and the Heirs of Juanito Lardizabal over the
subject property pending the final determination by the NCIP of their ancestral claim. 23 Accordingly,
the CA held that where the plaintiff - as petitioners in this case - failed to demonstrate that he has an
existing right to be protected by injunction, the suit for injunction must be dismissed for lack of cause
of action 24

Unperturbed, petitioners filed a motion for reconsideration, raising therein the Decision 25 of the NCIP
Regional Hearing Office dated May 18, 2012, which ruled that between petitioners and Ernesto, the
former have a better right to the issuance of ancestral land titles over the portions they are claiming
to be their ancestral lands. 26 The CA, however, denied the motion in a Resolution 27 dated March 5,
2013, maintaining that petitioners have no right in esse. Thus, considering that petitioners have no
building permit over the subject constructions, it ruled that the public respondents have the right to
demolish the subject structures.28

Hence, this petition.

The Issues before the Court

The issues for resolution are: (a) whether the CA should have dismissed respondents' appeal as it
involves pure questions of law and/ or for lack of merit; and ( b) whether the issuance of a writ of
injunction is warranted.

The Court's Ruling

The petition is meritorious.

I.

On the preliminary procedural issue, Rule 41 of the Rules of Court (Rules) provides for three (3)
ways by which an appeal from the RTC's decision may be undertaken, depending on the nature of
the attendant circumstances of the case, namely: (a) an ordinary appeal to the CA in cases decided
by the RTC in the exercise of its original jurisdiction; ( b) a petition for review to the CA in cases
decided by the RTC in the exercise of its appellate jurisdiction; and ( c) a petition for review on
certiorari directly filed with the Court where only questions of law are raised or involved.29 The first
mode of appeal under Rule 41 of the Rules is available on questions of fact or mixed questions of
fact and of law. The second mode of appeal, governed by Rule 42 of the Rules, is brought to the CA
on questions of fact, of law, or mixed questions of fact and of law. The third mode of appeal under
Rule 45 of the Rules is filed with the Court only on questions of law.30

There is a "question of law" when the doubt or difference arises as to what the law is on a certain
state of facts, and which does not call for an examination of the probative value of the evidence
presented by the parties-litigants. On the other hand, there is a "question of fact" when the doubt or
controversy arises as to the truth or falsity of the alleged facts. Simply put, when there is no dispute
as to fact, the question of whether or not the conclusion drawn there from is correct, is a question of
law. 31

In this case, the CA was called upon, not to examine the probative value of the evidence presented,
but to determine whether the legal conclusions made based on the recorded evidence is correct.
Essentially, the issue raised before the CA was whether the order for the summary demolition of
petitioners' structures authorized under the law, and in that relation, whether the RTC's grant of the
complaint for injunction based on the equal protection clause was proper. Clearly, with none of the
factual circumstances contested, the appeal involved pure questions of law that should have been
brought directly to the Court. Consequently, on a technical note, the CA should have dismissed
respondents' appeal for having been filed with the wrong tribunal pursuant to Section 2, Rule 50 of
the Rules which reads:

SEC. 2. Dismissal of improper appeal to the Court of Appeals. -An appeal under Rule 41 taken from
the Regional Trial Court to the Court of Appeals raising only questions of law shall be dismissed,
issues purely of law not being reviewable by said court.
Be that as it may, a review of the substantive merits of this case would nevertheless warrant the
grant of the present petition which seeks the reversal of the CA decision.

II.

DO No. 5 32 states on its face that it was issued in accordance with Section 3, paragraph 2.5 (a) of
the Implementing Rules and Regulations (IRR) Governing Summary Eviction (Summary Eviction
IRR), to wit:

SECTION 3. Procedures and Guidelines

xxxx

2.0 Issuance of Summary Eviction Notice

xxxx

2.5 In the Issuance of notice, the following shall be strictly observed:

a. For on-going construction, no notice shall be served. Dismantling of the structures shall be
immediately enforced by the LGU or the concerned agency to demolish.

To note, the Summary Eviction IRR was issued pursuant to Section 28, Article VII of RA 7279, which
equally provides for the situations wherein eviction or demolition is allowed as crafted exceptions to
the moratorium on eviction under Section 44, Article XII 33 of the same law.

Sec. 28. Eviction and Demolition. - Eviction or demolition as a practice shall be discouraged. Eviction
or demolition, however, may be allowed under the following situations

(a) When persons or entities occupy danger areas such as esteros, railroad
tracks, garbage dumps, riverbanks, shorelines, waterways, and other public
places such as sidewalks, roads, parks, and playgrounds;

(b) When government infrastructure projects with available funding are about
to be implemented; or

(c) When there is a court order for eviction and demolition.

xxxx

This Department of the Interior and Local Government and the Housing and Urban Development
Coordinating Council shall jointly promulgate the necessary rules and regulations to carry out the
above provision. (Emphases supplied)

Section 2 of the Summary Eviction IRR provides that only new squatter 34 families whose structures
were built after the effectively of RA 7279, otherwise known as the "Urban Development and
Housing Act of 1992," and squatter families identified by the local government unit (LGU) as
professional squatters 35 or members of squatting syndicates shall be subject of summary eviction:

SECTION 2. Coverage - The following shall be subject for summary Eviction:

 1.0 New squatter families whose structures were built after the affectivity of RA 7279; and

2.0 Squatter families identified by the LGU in cooperation with the Presidential Commission
of the Urban Poor (PCUP), Philippine National Police (PNP) and accredited Urban Poor
[O]rganization (UPO) as professional squatters or members of squatting syndicates as
defined in the Act.

Under the Summary Eviction IRR, the term "summary eviction" has been defined as "the immediate
dismantling of new illegal structures by the local government units or government agency authorized
to [demolish] in coordination with the affected urban poor organizations without providing the
structure owner(s) any benefits of the Urban Development and Housing Program. " 36

Meanwhile, the terms "new squatter," "professional squatters," and "squatting syndicates" have been
respectively defined as follows:

"New squatter" refers to individual groups who occupy land without the express consent of the
landowner after March 28, 1992. Their structures shall be dismantled and appropriate charges shall
be filed against them by the proper authorities if they refuse to vacate the premises. 37 "Professional
squatters" refers to individuals or groups who occupy lands without the express consent of the
landowner and who have sufficient income for legitimate housing. The term shall also apply to
persons who have previously been awarded home lots or housing units by the Government but who
sold, leased or transferred the same to settle illegally in the same place or in another urban area,
and non-bona fide occupants and intruders of lands reserved for socialized

Housing. The term shall not apply to individuals or groups who simply rent land and housing from
professional squatters or squatting syndicates. 38

"Squatting syndicates" refers to groups of persons engaged in the business of squatter housing for
profit or gain. 39

In this case, petitioners cannot be considered as new squatters, since, although their structures were
built after March 28, 1992, they or their predecessors-in-interest had occupied, and were claimants
of the subject property long before the said date. Neither have they been identified by the LGU as
professional squatters nor members of a squatting syndicate. Thus, since petitioners do not fall
under the coverage of the said IRR, the issuance of DO No. 05 had no legal basis at the onset.

More significantly, none of the three (3) situations enumerated under Section 28, Article VII of RA
7279 as above-cited, when eviction or demolition is allowed, have been shown to be present in the
case at bar. Specifically, it was not shown that the structures are in danger areas or public areas,
such as a sidewalk, road, park, or playground; that a government infrastructure project is about to be
implemented; and that there is a court order for demolition or eviction. Therefore, the issuance by
the City Mayor of an order for the summary demolition of petitioners' structures finds no basis in the
said law permitting summary demolition or eviction.

While respondents make much ado of petitioners' lack of building permits, it should be underscored
that under Presidential Decree No. 1096, 40 otherwise known as the "National Building Code of the
Philippines" (NBCP), the mere fact that a structure is constructed without a building permit, as well
as non-compliance with work stoppage order, without more, will not call for a summary demolition,
but subjects the violator to an administrative fine under Section 212, 41 Chapter II of the NBCP, or a
criminal case under Section 213 42 of the same law.
Indeed, while Section 301, Chapter III of the NBCP states that " [ n] o person, firm or corporation,
including any agency or instrumentality of the government shall erect, construct, alter, repair, move,
convert or demolish any building or structure or cause the same to be done without first obtaining a
building permit therefore from the Building Official assigned in the place where the subject building is
located or the building work is to be done," the remedy of summary abatement against the bare
absence of a building permit was not provided for.

Meanwhile, Section 215 of the NBCP, and its corresponding IRR provision (both of which are
respectively quoted hereunder) states that before a structure may be abated or demolished, there
must first be a finding or declaration by the Building Official that the building/structure is a nuisance,
ruinous or dangerous:

Section 215. Abatement of Dangerous Buildings.

When any building or structure is found or declared to be dangerous or ruinous, the Building Official
shall order its repair, vacation or demolition depending upon the degree of danger to life, health, or
safety. This is without prejudice to further action that may be taken under the provisions of Articles
482 and 694 to 707 of the Civil Code of the Philippines.

PROCEDURE FOR ABATEMENT/ DEMOLITION OF DANGEROUS/ RUINOUS BUILDINGS/

STRUCTURES

5. Procedure for Demolition of Buildings

The following steps shall be observed in the abatement/demolition of buildings under this Rule:

5.1 There must be a finding or declaration by the Building Official that the building/structure is a
nuisance, ruinous or dangerous.

5.2 Written notice or advice shall be served upon the owner and occupant/s of such finding or
declaration, giving him at least fifteen ( 15) days within which to vacate or cause to be vacated,
repaired, renovated, demolished and removed as the case may be, the nuisance, ruinous or
dangerous building/structure or any part or portion thereof.

5.3 Within the fifteen-day (15) period, the owner may, if he so desires, appeal to the Secretary the
finding or declaration of the Building Official and ask that a re-inspection or re-investigation of the
building/structure be made.

x x x x 43

To this, it bears noting that it is the Building Official, and not the City Mayor, who has the authority to
order the demolition of the structures under the NBCP. As held in Gancayco v. City Government of
Quezon City: 44

[T]he Building Code clearly provides the process by which a building may be demolished. The
authority to order the demolition of any structure lies with the Building Official. The pertinent
provisions of the Building Code provide:

SECTION 205. Building Officials. - Except as otherwise provided herein, the Building Official shall be
responsible for carrying out the provisions of this Code in the field as well as the enforcement of
orders and decisions made pursuant thereto
Due to the exigencies of the service, the Secretary may designate incumbent Public Works District
Engineers, City Engineers and Municipal Engineers [to] act as Building Officials in their respective
areas of jurisdiction.

The designation made by the Secretary under this Section shall continue until regular positions of
Building Official are provided or unless sooner terminated for causes provided by law or decree.

[x x x x]

SECTION 207. Duties of a Building Official. - In his respective territorial jurisdiction, the Building
Official shall be primarily responsible for the enforcement of the provisions of this Code as well as of
the implementing rules and regulations issued therefore. He is the official charged with the duties of
issuing building permits.

In the performance of his duties, a Building Official may enter any building or its premises at all
reasonable times to inspect and determine compliance with the requirements of this Code, and the
terms and conditions provided for in the building permit as issued.

When any building work is found to be contrary to the provisions of this Code, the Building Official
may order the work stopped and prescribe the terms and/or conditions when the work will be allowed
to resume. Likewise, the Building Official is authorized to order the discontinuance of the occupancy
or use of any building or structure or portion thereof found to be occupied or used contrary to the
provisions of this Code.

x x x x (Emphases supplied)

In this case, none of the foregoing requisites were shown to concur. Plainly, records are bereft of
any declaration coming from the Building Official, and it is undisputed that the demolition order was
issued by the City Mayor. Notably, while respondents invoke the City Mayor's authority under
Section 455 (b) 3 (vi) 45of the Local Government Code 46to order the

demolition or removal of an illegally constructed house, building, or structure within the period
prescribed by law or ordinance and their allegation that respondents' structures were constructed
without building permits, records disclose that the same was not raised before the trial court. Since
respondents invoked the said section for the first time in their comment to the instant petition, 47the
argumentation cannot thus be entertained, it being settled that matters, theories or arguments not
brought out in the proceedings below will ordinarily not be considered by a reviewing court as they
cannot be raised for the first time on appeal. 48

Besides, it is clear that DO No. 05 was not issued pursuant to Section 455 (b) 3 (vi) of the Local
Government Code, but pursuant to "Section 3 par. 2.5 (a) of the implementing rules and regulations
governing summary eviction jointly issued by the Department of Interior and Local Government
(DILG) and the Housing and Urban Development Coordinating Council xx x," 49 implementing Section
28, Article VII of RA 7279, the application of which, however, has been herein debunked.

In fine, DO No. 05, which ordered the summary demolition of petitioners' structures has no legal
moorings and perforce was invalidly issued. Accordingly, an injunctive writ to enjoin its
1wphi 1

implementation is in order. It is well-settled that for an injunction to issue, two requisites must concur:
first, there must be a right to be protected; and second, the acts against which the injunction is to be
directed are violative of said right. 50 Here, the two (2) requisites are present: there is a right to be
protected - that is, petitioners' right over their structures which should be preserved unless their
removal is warranted by law; and the act, i.e., the summary demolition of the structures under DO
No. 05, against which the injunction is directed, would violate said right.51

As a final note, the Court exhorts that absent compliance with the laws allowing for summary
eviction, respondents cannot resort to the procedural shortcut of ousting petitioners by the simple
expedient of a summary demolition order from the Office of the City Mayor. They have to undergo
the appropriate proceeding as set out in the NBCP and its IRR or avail of the proper judicial process
to recover the subject property from petitioners. In pursuing said recourse, it would also not be amiss
for the parties to await the final resolution of any pending case involving the subject property
between petitioners and Ernesto, before the appropriate government agencies, in order to avoid any
further complication on the matter.

That being said, it is then unnecessary to delve into the other ancillary issues raised in these
proceedings.

WHEREFORE, the petition is GRANTED. The Decision dated June 29, 2012 and the Resolution
dated March 5, 2013 of the Court of Appeals in CA-G.R. CV No. 87439 is hereby REVERSED and
SET ASIDE. The implementation of Demolition Order No. 05, series of 2005 is ENJOINED.

SO ORDERED.

ESTELA M. PERLAS-BERNABE
Associate Justice

WE CONCUR:
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 171095 June 22, 2015

MAYOR MARCIAL VARGAS and ENGR. RAYMUNDO DEL ROSARIO, Petitioners,

vs.
FORTUNATO CAJUCOM, Respondent.

DECISION

PERALTA, J.:

Before the Court is a petition for review assailing the trial court's Order denying petitioners' motion to
quash a writ of execution.

The facts are as follows:

On August 15, 2000, Fortunato Cajucom (Cajucom) filed with the Regional Trial Court (RTC) of
Cabanatuan City a Complaint for mandamus and abatement of nuisance against the Municipal
Mayor of Aliaga, Nueva Ecija, in the person of Mayor Marcial Vargas (Mayor Vargas), the Municipal
Engineer of Aliaga, Nueva Ecija, namely, Engr. Raymundo del Rosario (Engr. del Rosario), and a
number of private persons, namely, Rodel Puno, Vicente Mata, Tony Maderia, Rene Maderia, and
German Maderia (Puna, et al.).1 The case was docketed as Civil Case No. 3776 and assigned to the
RTC of Cabanatuan City, Branch 86.2

In the complaint, Cajucom alleged that he had intended to start a gasoline station business on his lot
in Aliaga, Nueva Ecija, but several illegal structures built on the road shoulder by Puno, et al. were
obstructing access to his site, thus, also frustrating his plan. He claimed that demand was made for
Puno, et al. to remove their structures, but to no avail. Cajucom then alleged that he tried to enlist
the help of Mayor Vargas and Engr. Del Rosario, but the latter similarly did not act. Cajucom
ultimately prayed for the court to command the said municipal mayor and engineer to cause the
removal of all buildings and structures built on the concerned road shoulder by Puno, et al.

On February 14, 2001, the court rendered a Decision in favor of Cajucom.3 It held that as correctly
alleged by Cajucom, the mayor and municipal engineer failed to perform their duties under the Rules
and Regulations Implementing the Local Government Code (Republic Act No. 7160), among which
duties is the duty to order the demolition or removal of illegally constructed houses, buildings or
other structures on the road shoulder.4 Thus, the court held: WHEREFORE, in view of the foregoing
the petition for MANDAMUS is hereby GRANTED and the public defendants Municipal Mayor
Marcial Vargas and Municipal Engineer Raymundo del Rosario, both of the Municipality of Aliaga,
Nueva Ecija, are hereby ordered to comply with the above-cited provision of law.

IT IS SO ORDERED.5

No appeal was interposed from the decision.6 As the decision became final and executory, Cajucom
filed a Motion for the Issuance of a Writ of Execution.7
On May 11, 2001, the RTC issued an Order granting Cajucom's motion.8 It directed that a writ of
execution be issued to implement and enforce the decision of February 14, 2001. Subsequently, a
Writ of Execution was issued by the clerk of court on May 25, 2001.9

Then, the court sheriff reported that on May 28, 2001, he served a copy of the writ of execution on
MayorVargas and Engr. del Rosario.10 The writ of execution was signed as received by the mayor's
private secretary and by Engr. del Rosario on said date.11 However, the sheriff also reported in his
Return of Service dated July 2, 2001 that, as of June 13, 2001 the judgment has not been
executed.12

Meanwhile, on February 8, 2002, Puno, et al. filed a petition for Annulment of Judgment with the
Court of Appeals to annul the February 14, 2001 decision of the RTC.13 That case was docketed as
CA-G.R. SP No. 69035 entitled Rodel Puno et al. v. Raymundo Annang, et al. The grounds alleged
in the petition include the trial court's lack of jurisdiction and its speculation as to certain facts of the
case.14 The CA, in a Decision dated January 12, 200515 and a Resolution dated March 18,
2005,16 denied such petition. The appellate court held that the petition's allegations are flimsy and
unacceptable in addition to the fact that Puno, et al. indeed have no right to build residential and
commercial structures on the shoulder of a public road.17 Puno, et al. then went to the Supreme
Court via a Petition for certiorari with injunction and request for temporary restraining order (TRO),
dated April 8, 2005, to assail the CA's decision denying the petition for annulment of
judgment.18 However, on May 3, 2005, the Supreme Court, in G.R. No. 167537 entitled Rodel Puno,
et al. v. Fortunato Cajucom, denied the petition of Puno, et al.19 A subsequent motion for
reconsideration was likewise denied in another resolution dated July 27, 2005.20

On April 13, 2005, Cajucom filed a Motion to Compel Defendants Mayor Marcial Vargas and
Engineer Raymundo Del Rosario to Implement the Writ of Execution and to Explain Why They
Should Not Be Cited for Contempt of Court.21

In response to the said motion, Puno, et al. immediately filed their written Opposition (in lieu of oral
arguments) to the same.22 Likewise, Mayor Vargas and Engr. del Rosario filed their own Motion to
Quash Writ of Execution with Explanation Why Public Defendants Should Not Be Cited for Contempt
of Court.23

Cajucom then followed up with a Motion to Punish Respondents Mayor Marcial Vargas and
Municipal Engineer Raymundo Del Rosario for Contempt of Court.24 Mayor Vargas and Engr. Del
Rosario filed an Opposition25 to the same.

On September 15, 2005, the RTC issued its assailed Order26 denying the motion filed by Mayor
Vargas and Engr. Del Rosario to quash the writ of execution of the court's Decision dated February
14, 2001.The court held that the mayor can be compelled to do his duty by writ of mandamus.27 It
also held that issuance of the writ was not premature as Cajucom had previously demanded for the
structures to be removed but to no avail.28 Meanwhile, the court suspended the resolution of the
motion to punish Mayor Vargas and Engr. Del Rosario.29 The dispositive portion of the said assailed
Order states:

WHEREFORE, premises considered, the Motion to Quash Writ of Execution filed by public
defendants Mayor Marcial Vargas and Engr. Raymundo del Rosario, both of Aliaga, Nueva Ecija, is
hereby DENIED for lack of merit. Their Explanation Why They Should Not Be Cited For Contempt Of
Court is hereby NOTED. Said public defendants, however, are hereby granted a period of thirty (30)
days from notice within which to implement and execute the decision of this court dated February 14,
2001 with respect to private defendants Rodel Puno, Vicente Mata, Tony Maderia, Rene Maderia
and German Maderia, pursuant to Art. 87(b)(3)(VI) of Rule XV of the Implementing Rules and
Regulations of the Local Government Code of 1991. For this purpose, let a writ of Mandamus be
issued to Mayor Marcial Vargas and Municipal Engineer Raymundo del Rosario for execution.

The resolution of the Motion To Punish Respondents Municipal Mayor Marcial Vargas and Municipal
Engineer Raymundo del Rosario For Contempt Of Court Pursuant to Sections 7 and 8 of Rule 71 of
the 1997 Rules of Civil Procedure filed by the plaintiff through counsel is hereby SUSPENDED until
after the lapse of the 30-day period from notice granted to the said public defendants to execute the
decision of this court.

IT IS SO ORDERED.30

Hence, the petitioners, Mayor Vargas and Engr. Del Rosario, filed this petition. Petitioners sum up
their arguments for the allowance of their petition as follows:

1. THE WRIT OF EXECUTION IS BEING ENFORCED TO COMPEL ENGINEER

RAYMUNDO DEL ROSARIO TO EXERCISE THE POWERS AND PERFORM THE DUTIES
AND FUNCTIONS OF MAYOR MARCIAL VARGAS UNDER RULE XV, ART. 87(3) (VI) OF
THE IMPLEMENTING RULES AND REGULATIONS OF THE LOCAL GOVERNMENT
CODE OF 1991 (RA 7160);31

2. THE WRIT OF EXECUTION IS BEING ENFORCED TO COMPEL MAYOR MARCIAL

VARGAS TO PERFORM A DISCRETIONARY DUTY, CONTRARY TO LAW AND
APPLICABLE DECISIONS OF THE SUPREME COURT;32

3. RESPONDENT NOT HAVING EXHAUSTED ALL ADMINISTRATIVE REMEDIES

BEFORE FILING THE PETITION, THE WRIT OF MANDAMUS SHOULD NOT HAVE BEEN
GRANTED AND THE WRIT OF EXECUTION ISSUED TO ENFORCE IT ([SHOULD BE
QUASHED];33

4. RESPONDENT NOT HAVING [A] WELL-DEFINED, CLEAR AND CERTAIN RIGHT TO

WARRANT THE GRANT OF MANDAMUS, THE SAME SHOULD NOT HAVE BEEN
GRANTED AND THE WRIT OF EXECUTION ISSUED TO ENFORCE IT [SHOULD BE
QUASHED];34

5. THE WRIT OF EXECUTION IS NOT CAPABLE OF BEING ENFORCED AND SHOULD

NOT HAVE BEEN ISSUED IN THE FIRST PLACE.35

6. THE WRIT OF EXECUTION IS BEING ENFORCED IN A WAY [THAT] NOT ONLY

VARIES THE JUDGMENT, BUT [IS] CONTRARY TO LAW AND JURISPRUDENCE.36

The Court is now confronted with the singular issue of whether grounds exist to quash the subject
writ of execution.

It is a consistent practice that once a judgment has become final and executory, a writ of execution
is issued as a matter of course, in the absence of any order restraining its issuance.37 In addition,
even a writ of demolition, if the case calls for it, is ancillary to the process of execution and is
logically also issued as a consequence of the writ of execution earlier issued.38

Rule 39 of the Rules of Court is clear:

Section 1. Execution upon judgments or final orders. Execution shall issue as a matter of right, or
motion, upon a judgment or order that disposes of the action or proceeding upon the expiration of
the period to appeal therefrom if no appeal has been duly perfected. (1a)

If the appeal has been duly perfected and finally resolved, the execution may forthwith be applied for
in the court of origin, on motion of the judgment obligee, submitting therewith certified true copies of
the judgment or judgments or final order or orders sought to be enforced and of the entry thereof,
with notice to the adverse party.

The appellate court may, on motion in the same case, when the interest of justice so requires, direct
the court of origin to issue the writ of execution.39

Stated differently, once a judgment becomes final, the prevailing party is entitled as a matter of right
to a writ of execution.40 Its issuance is, in fact, the trial courts ministerial duty, the only limitation
being that the writ must conform substantially to every essential particular of the judgment
promulgated, more particularly, the orders or decrees in the dispositive portion of the
decision.41 Even the holding in abeyance of the issuance of a writ of execution of a final and
executory judgment can be considered abuse of discretion on the part of the trial court.42

In sum, this Court has explained the principle as follows:

It is not disputed that the judgment sought to be executed in the case at bar had already become
final and executory. It is fundamental that the prevailing party in a litigation may, at any time within
five (5) years after the entry thereof, have a writ of execution issued for its enforcement and the court
not only has the power and authority to order its execution but it is its ministerial duty to do so. It has
also been held that the court cannot refuse to issue a writ of execution upon a final and executory
judgment, or quash it, or order its stay, for, as a general rule, the parties will not be allowed, after
final judgment, to object to the execution by raising new issues of fact or of law, except when there
had been a change in the situation of the parties which makes such execution inequitable or when it
appears that the controversy has ever been submitted to the judgment of the court; or when it
appears that the writ of execution has been improvidently issued, or that it is defective in substance,
or is issued against the wrong party, or that judgment debt has been paid or otherwise satisfied; or
when the writ has been issued without authority. Defendant-appellant has not shown that she falls in
any of the situations afore-mentioned. Ordinarily, an order of execution of a final judgment is not
appealable. Otherwise, as was said by this Court in Molina v. De la Riva, a case could never end.
Once a court renders a final judgment, all the issues between or among the parties before it are
deemed resolved and itsjudicial function as regards any matter related to the controversy litigated
comes to an end. The execution of its judgment is purely a ministerial phase of adjudication. The
nature of its duty to see to it that the claim of the prevailing party is fully satisfied from the properties
of the loser is generally ministerial.43

And equally settled is the rule that when a judgment is final and executory, it becomes immutable
and unalterable.44It may no longer be modified in any respect, except to correct clerical errors or to
make nunc pro tunc entries, or when it is a void judgment.45 Outside of these exceptions, the court
which rendered judgment only has the ministerial duty to issue a writ of execution.46 A decision that
has attained finality becomes the law of the case regardless of any claim that it is erroneous.47 Any
amendment or alteration which substantially affects a final and executory judgment is null and void
for lack of jurisdiction, including the entire proceedings held for that purpose.48Thus, an order of
execution which varies the tenor of the judgment or exceeds the terms thereof is a nullity.49

In the case at bar, there is no dispute that the trial court's decision had become final and executory,
as petitioners themselves did not appeal the same. In the current petition, neither is there an
allegation that the judgment is a void one. But even if there is such an allegation, the issue is a
settled one, as this Court itself, in the petition for annulment of judgment filed by petitioner's co-
obligors, i.e., Puno et al., had upheld the judgment rather than declare the same void. That petition
also alleged lack of jurisdiction and raised other issues which are similarly raised in the instant
petition.

Therefore, at this late stage, nothing more may be done to disturb the said final judgment.

As for the regularity of the issuance of the writ of execution itself, it is uncontested that all the
requirements for the issuance of such a writ, as laid down in the rules, were followed in the case a
bar. No issue was raised before the trial court which qualifies as an exception to the general rule that
parties may not object to its issuance. Instead, for the most part, the petition appears to pray for a
quashal of the writ of execution on grounds that, when closely examined, go into the merits of the
case and the judgment being executed and are not based on any defect in the writ of execution itself
or in its issuance.

To illustrate, petitioners cite the following as grounds for the quashal of the writ of execution: (1) that
it allegedly would compel the municipal engineer to exercise the powers and duties of the mayor; (2)
that it forces the mayor to perform a discretionary duty;(3) that there was no exhaustion of
administrative remedies; and, (4) that the judgment obligee had no well-defined, clear and certain
right to warrant the grant of mandamus.

Such grounds, however, go into the substance and merits of the case which had been decided with
finality, and have no bearing on the validity of the issuance of the writ of execution. They raise issues
which have been properly joined and addressed by the trial court in its decision. But at this late stage
of execution, tackling those matters is a re-litigation of those issues, which no court can perform
without offending well-settled principles. Essentially, arguments as to these issues are proper for an
appeal, a remedy which none of the petitioners and the other judgment-obligors have taken. Instead,
petitioners' co-defendants in the case, the other judgment-obligors Puno, et al., filed a petition to
annul the judgment, also raising the trial court's alleged lack of jurisdiction and the same arguments
as aforementioned, but such petition was denied by the CA, which denial was affirmed with finality
by the Supreme Court. Hence, to this Court, the final judgment has become the law of the case
which is now immovable. The rudiments of fair play, justice, and due process require that parties
cannot raise for the first time on appeal from a denial of a motion to quash a writ of execution issues
which they could have raised but never did during the trial and even on appeal from the decision of
the trial court.50

The simple matter is that petitioners herein may not do indirectly, by assailing the writ of execution,
what they cannot do directly, which is attacking the final, immutable and unalterable judgment of the
RTC. They may not raise in their opposition to the writ of execution issues that they should have
raised in the case during the trial proper or against the judgment via an appeal. They may not object
to the execution by raising new issues of fact or law, except under the following circumstances:

(1) the writ of execution varies the judgment;

(2) there has been a change in the situation of the parties making execution inequitable or
unjust;

(3) execution is sought to be enforced against property exempt from execution;

(4) it appears that the controversy has been submitted to the judgment of the court;
 (5) the terms of the judgment are not clear enough and there remains room for interpretation
thereof; or

(6) it appears that the writ of execution has been improvidently issued, or that it is defective
in substance, or issued against the wrong party, or that the judgment debt has been paid or
otherwise satisfied, or the writ was issued without authority.51

For the most part, the petition does not clearly state whether the subject writ of execution falls under
any of the above exceptions. It raised two grounds, i.e., that the writ is incapable of being enforced
and that it varies the judgment, which can be interpreted as falling under the exceptions above, but
these grounds as applied to the case at bar simply lack merit. 1wphi1

Petitioners claim that the writ could not be enforced since Mayor Vargas had left office after the
elections of May 2001 before he was elected again in May 2004.52

This argument fails. Even on its face, the statement is untenable and fails to logically argue that the
writ is incapable of enforcement. The statement, is in fact, an admission that Mayor Vargas could
have implemented the writ during his two incumbencies the one before the May 2001 elections
and the one after the May 2004 elections - as both times, he was served with the writ well inside his
term as mayor. Such service, as well as Mayor Vargas' two terms, also fell within the five-year period
within which the Decision dated February 14, 2001 could have been enforced. Yet, the petition
admits that it was Mayor Vargas himself who refused, without any valid or legal reason, to enforce
the writ during his two terms even if it is clear that the judgment is final and there was no order
restraining its enforcement. Mayor Vargas had the time and opportunity to perform his obligation but
he did not. Then, it bears stressing that the writ was directed at Mayor Vargas not in his personal
capacity, but in his capacity as municipal mayor, so that it is not irregular whether it was served upon
him during his earlier term or in his subsequent one.53His failure to enforce the same on both times
suggests his own disobedience to the court's final judgment, so that it is even immaterial whether or
why the writ was not enforced by the other mayor who served between his two terms. Thus, it is
incorrect to state that the writ is incapable of enforcement, as it is only the petitioners themselves
who refuse to enforce the same.

Then, petitioners allege that the writ varies the judgment as the writ allegedly would require them to
demolish the houses of the other defendants, as opposed to the judgment which merely ordered
them to comply with their duties under the implementing rules.

Petitioners are in error because the writ does not contain anything other than a command to the
sheriff to enforce what is in the dispositive portion of the final judgment. The writ of execution merely
states:

TO: The Deputy Sheriff

Regional Trial Court
Branch 86
Cabanatuan City-wide

GREETINGS:

WHEREAS, on February 14, 2001, a decision was rendered by this Court in the above-entitled case,
the dispositive part of which reads as follows:
WHEREFORE, in view of the foregoing the petition for MANDAMUS is hereby GRANTED and the
public defendants Municipal Mayor Marcial Vargas and Municipal Engineer Raymundo del Rosario,
both of the Municipality of Aliaga, Nueva Ecija, are hereby ordered to comply with the above-cited
provision of law.

IT IS SO ORDERED.

WHEREAS, on May 11, 2001, an order was issued for the issuance of (a) Writ of Execution for the
full implementation of the decision against the defendants.

NOW THEREFORE, you are hereby commanded to execute and make effective the decision of
this Court dated February 14, 2001 in accordance with law, together with your lawful fees on this
Writ and return you proceedings pursuant to the 1997 Rules of Civil Procedure, as amended.54

Clearly, nothing in the writ alters or varies the judgment, the dispositive portion of which it faithfully
reproduces. Equally, nothing in it necessarily limits the judgment obligations to an order to demolish
the subject houses. Purely, the writ merely commands compliance by petitioners with the following
legal provisions: First, the law itself, or the Local Government Code, Book III, Title II, Chapter III,
Article I, Section 444(b) (3), which states:

ARTICLE I
The Municipal Mayor

Section 444. The Chief Executive: Powers, Duties, Functions and Compensation.

xxxx

(b) For efficient, effective and economical governance the purpose of which is the general welfare of
the municipality and its inhabitants pursuant to Section 16 of this Code, the municipal mayor shall:

x x x x (3) Initiate and maximize the generation of resources and revenues, and apply the same to
the implementation of development plans, program objectives and priorities as provided for under
Section 18 of this Code, particularly those resources and revenues programmed for agro-industrial
development and country-wide growth and progress, and relative thereto, shall:

xxxx

(vi) Require owners of illegally constructed houses, buildings or other structures to obtain the
necessary permit, subject to such fines and penalties as may be imposed by law or ordinance, or to
make necessary changes in the construction of the same when said construction violates any law or
ordinance, or to order the demolition or removal of said house, building or structure within the period
prescribed by law or ordinance;55

Next, the following provision of the Rules and Regulations Implementing the Local Government
Code, which is almost a verbatim reproduction of the law, states:

RULE XV
POWERS, DUTIES, AND FUNCTIONS OF LOCAL CHIEF EXECUTIVES

xxxx
Art. 87. Powers, Duties, and Functions of the Municipal Mayor. -

xxxx

(b) For efficient, effective and economical governance the purpose of which is the general welfare of
the municipality and its inhabitants pursuant to Section 16 of the Code, the municipal mayor shall:

xxxx

(3) Initiate and maximize the generation of resources and revenues, and apply the same to the
implementation of development plans, program objectives and priorities as provided under these
Rules, particularly those resources and revenues programmed for agro-industrial development and
countrywide growth and progress, and relative thereto, shall:

xxxx

(vi) Require owners of illegally constructed houses, buildings, or other structures to obtain the
necessary permit, subject to such fines and penalties as may be imposed by law or ordinance, or to
make necessary changes in the construction of the same when said construction violates any law or
ordinance, or to order the demolition or removal of said house, building, or structure within the period
prescribed by law or ordinance;56

And if the enforcement would be limited to a demolition of the structures, it is not due to any defect in
the writ itself, but to the circumstances of the case and the situation of the parties at the time of
execution. As the trial court correctly observed, the above enumerations speak of three (3)
alternative duties, namely: (1) require the owners of illegally constructed structures to obtain the
necessary permit, subject to fines and penalties; (2) make necessary changes in the construction of
the same when said construction violates any law or ordinance, or (3) order the demolition or
removal of said house, building, or structure within the period prescribed by law or ordinance. The
obligations as enumerated are separated by the word "or," which the rules in statutory construction
dictate should be treated as a disjunctive article indicating an alternative.57 The use of "or" often
connects a series of words or propositions indicating a choice of either, which means that the
various members of the enumeration are to be taken separately, with the term signifying
disassociation and independence of one thing from each of the other things enumerated.58 Thus,
petitioners are clearly obliged to perform a duty that is one of the three alternatives that the law
enumerates, where a choice of one excludes the others.

Flowing from this, however, is the reality that two of the three obligations, those which would "require
owners of illegally constructed structures to obtain the necessary permit" and "make necessary
changes in the construction of said structures" are simply not enforceable due to the inherent
illegality of the structures concerned which were all built on public areas. No amount of permits nor
change in construction would legitimize the illegal structures as they are built on property for public
use, which is the public highway. Such is a factual finding that is binding on this Court. The court
below found that the areas occupied are the shoulder and drainages which are part of the road's
right-of-way and which, in turn, is considered part of the highway under Presidential Decree No. 17,
as amended, otherwise known as the Revised Philippine Highway Act of 1972.59 Puno et al. will
never legally acquire the same by prescription, for prescription does not run against the State or its
subdivisions on any of its non-patrimonial property.60 The provincial road whose shoulder was
occupied by these defendants is one such non-patrimonial property.61 And as far as the structures
obstruct free passage to the road, they likewise will never attain legality by mere lapse of time.62
Therefore, the enforcement of the subject decision through the writ issued by the trial court is
presently limited to just one of the three alternatives, i.e., a demolition of the structures. The said
limitation is not because the writ "altered" the judgment; it is because the situation of the parties and
the practicalities of such enforcement require it. In addition, the decision subject of the execution
itself noted that it was the "failure of the public defendants to act on (Cajucom's) letter-complaint to
cause the removal of the structures located on the shoulder of the road" that "constrained (him) to
file the instant case."63 Removal or demolition of the structures was likewise what was prayed for by
Cajucom in the complaint.64 Thus, the trial court recognizes that a removal of the structures is what is
called for in this case. Such is expressed in the decision and the dispositive portion thereof must be
understood in this context. When interpreting the dispositive portion of the judgment, the findings of
the court as found in the whole decision must be considered; a decision must be considered in its
entirety, not just its specific portions, to grasp its true intent and meaning.65

But even if the decision was entirely silent on the matter, this Court has held that a judgment is not
confined to what appears upon the face of the decision, but extends to those necessarily included
therein or necessary thereto.66 In the case at bar, the dispositive part of the trial court's decision did
not specify which of the alternative duties the public officers were to perform, but since the decision
itself factually states that the plaintiff sues for the removal of the subject structures, and that the
structures are built on a public highway, then it follows that only one of the alternative duties - that of
demolition - is capable of enforcement. As demolition stands as the only and necessary way to
effectuate the judgment, then it is what the execution of the judgment should consist of. The writ of
execution and a companion writ of demolition, if later prayed for and issued by the trial court, are just
a natural consequence of and a necessary means to enforce the said decision.67

WHEREFORE, the petition is DISMISSED for lack of merit. The assailed Order dated September 15,
2005, of the Regional Trial Court of Cabanatuan City, Branch 86, is AFFIRMED. The parties and the
officers of the court below are hereby ORDERED to IMPLEMENT the writ of execution with dispatch.

No costs.

SO ORDERED.
 SECOND DIVISION

GR NO. 206649, July 20, 2016

FOREST HELLS GOLF & COUNTRY CLUB, INC., REPRESENTED BY RAINIER L. MADRID, IN A
DERIVATIVE CAPACITY AS SHAREHOLDER & CLUB MEMBER, PETITIONER,
~vs~
FIL-ESTATE PROPERTIES, INC., & FIL-ESTATE GOLF DEVELOPMENT, INC., RESPONDENTS.

DECISION

DEL CASTILLO, J.:

A derivative action is a suit by a shareholder to enforce a corporate cause of action x x x on behalf of the
corporation in order to protect or vindicate [its] rights [when its] officials refuse to sue, or are the ones to be
sued, or hold control of [it].[1] Upon the enactment of Republic Act (RA) No. 8799, otherwise known as The
Securities Regulation Code, jurisdiction over such action now lies with the special commercial courts
designated by this Court pursuant to A.M. No. 00- 11-03-SC promulgated on November 21, 2000.[2]
This Petition for Review on Certiorari[3] under Rule 45 of the Rules of Court assails the Orders dated May 14,
2012[4] and February 1, 2013[5] of the Regional Trial Court (RTC), Branch 74, Antipolo City, in Civil Case No. 10-
9042.
Factual Antecedents
On March 31, 1993, Kingsville Construction and Development Corporation (Kingsville) and Kings Properties
Corporation (KPC) entered into a project agreement with respondent Fil-Estate Properties, Inc. (FEPI),
whereby the latter agreed to finance and cause the development of several parcels of land owned by Kingsville
in Antipolo, Rizal, into Forest Hills Residential Estates and Golf and Country Club, a first-class residential
area/golf-course/commercial center.[6] Under the agreement, respondent FEPI was tasked to incorporate
petitioner Forest Hills Golf and Country Club, Inc. (FHGCCI) with an authorized stock of 3,600 shares; and to
perform the development and construction work and other undertakings as full payment of its subscription to
the authorized capital stock of the club.[7] As to the remaining shares of the club, they agreed that these should
be retained by Kingsville in exchange for the parcels of land used for the golf course development. [8]
On July 10, 1995, respondent FEPI assigned its rights and obligations over the project to a related corporation,
respondent Fil-Estate Golf Development, Inc. (FEGDI).[9]
On July 19, 1996, Rainier L. Madrid (Madrid) purchased two Class A shares at the secondary price of P3
80,000.00 each, and applied for a membership to the club for P25,000.00. [10]
Due to the delayed construction of the second 18-Hole Golf Course, Madrid wrote two demand letters dated
October 29, 2009 and March 15, 2010 to the Board of Directors of petitioner FHGCCI asking them to initiate the
appropriate legal action against respondents FEPI and FEGDI. [11] The Board of Directors, however, failed and/or
refused to act on the demand letters.[12]
Thus, on April 21, 2010, Madrid, in a derivative capacity on behalf of petitioner FHGCCI, filed with the RTC of
Antipolo City a Complaint for Specific Performance with Damages, [13] docketed as Civil Case No. 10-9042,
against respondents FEPI and FEGDI.[14]
In their Answer with Compulsory Counterclaim,[15] respondents FEPI and FEGDI argued that there is no cause
of action against them as petitioner FHGCCI failed to state the contractual and/or legal bases of their alleged
obligation; that no prior demand was made to them; that the action is not a proper derivative suit as petitioner
FHGCCI failed to exhaust all remedies available under the articles of incorporation and by-laws; and that
petitioner FHGCCI failed to implead its Board of Directors as indispensable parties.
Petitioner FHGCCI, in turn, filed a Reply[16] arguing that the case does not involve an intra-corporate controversy
and that the exhaustion of intra-corporate remedies was futile and useless as the Board of Directors of
petitioner FHGCCI also own respondent FEGDI.
Respondents FEPI and FEGDI filed a Rejoinder[17] followed by a Motion[18] to set their affirmative defenses for
preliminary hearing.
Petitioner FHGCCI filed a Motion[19] for leave to amend its Complaint to implead KPC and Kingsville as additional
defendants and to include Madrid as additional plaintiff in his personal capacity. Respondents FEPI and FEGDI
opposed the Motion.[20]
Ruling of the Regional Trial Court
On May 14, 2012, applying the relationship and nature of controversy tests in Reyes v. Hon. RTC of Makati, Br.
142[21] and taking into account the fact that petitioner FHGCCI denominated the Complaint as a derivative suit,
the RTC issued an Order[22] dismissing the case for lack of jurisdiction, without prejudice to the re-filing of the
same with the proper special commercial court sitting at Binangonan, Rizal. Consequently, the motion for leave
to amend the Complaint was mooted.
Feeling aggrieved, petitioner FHGCCI moved for reconsideration [23] but the RTC denied the same in its
Order[24] dated February 1, 2013.
Issue
Hence, petitioner FHGCCI directly filed before this Court the instant Petition for Review on Certiorari[25] under
Rule 45 of the Rules of Court on a pure question of law, raising the sole issue of:
WHETHER OR NOT PETITIONER [FHGCCIS] ORDINARY CIVIL SUIT FOR SPECIFIC PERFORMANCE WITH
DAMAGES AGAINST RESPONDENTS [FEPI & FEGDI] VIS-A-VIS THE LATTERS OBLIGATION UNDER THE
PROJECT AGREEMENT TO FULLY COMPLETE & DEVELOP THE FOREST HELLS RESIDENTIAL ESTATES &
GOLF COURSE & COUNTRY CLUB IS COGNIZABLE BY THE LOWER COURT AS A REGULAR COURT OR BY
THE RTC-BINANGONAN, BRANCH 70, AS A SPECIAL COMMERCIAL COURT FOR INTRA-CORPORATE
CONTROVERSIES.[26]
Petitioner FHGCCVs Arguments
Petitioner FHGCCI admits that it filed a derivative suit.[27] However, it contends that not all derivative suits
involve intra-corporate controversies.[28] In this case, it filed a derivative suit for specific performance in order
to enforce the project agreement between KPC, Kingsville, and respondents FEPI and FEGDI.[29] And although
respondent FEGDI is a stockholder of petitioner FHGCCI, it argues that this does not make the instant case an
intra-corporate controversy as the case was filed against respondents FEPI and FEGDI as developers, and not
as stockholders of petitioner FHGCCI.[30] In fact, the causes of action stated in the Complaint do not involve intra-
corporate controversies, nor do these involve the intra-corporate relations between and among the
stockholders and the corporations officials.[31] Thus, the RTC seriously erred in applying the case
of Reyes[32] without clearly explaining why the instant case involves an intra-corporate controversy.[33]
Respondents Arguments
Respondents FEPI and FEGDI, on the other hand, reiterate the arguments raised in their Answer before the
RTC, to wit: that petitioner FHGCCI has no cause of action as it failed to present any contract upon which it can
base its claim; that the filing of the case is premature as no prior demand was made to respondents FEPI and
FEGDI; that the Complaint is not a proper derivative suit as petitioner FHGCCI failed to exhaust all remedies
available under the articles of incorporation and by-laws; and that petitioner FHGCCI failed to implead its Board
of Directors as indispensable parties.[34] They also maintain that the instant case is an intra-corporate
controversy as the allegations in the Complaint clearly show that petitioner FHGCCI is suing respondents FEPI
and FEGDI not only as developers but also as stockholders of petitioner FHGCCI.[35] And since the instant case
involves an intra-corporate controversy, the RTC correctly dismissed the Complaint for lack of jurisdiction, as
the RTC is not a special commercial court.[36]
Our Ruling
The Petition lacks merit.
The Complaint, denominated as a
derivative suit for specific performance,
falls under the jurisdiction of special
commercial courts.
Petitioner FHGCCFs main contention is that its Complaint, although denominated as a derivative suit, does not
fall under the jurisdiction of special commercial courts, as it does not involve an intra-corporate controversy.
We do not agree.
It is a fundamental principle that jurisdiction is conferred by law and is determined by the material allegations
of the complaint, containing the concise statement of ultimate facts of a plaintifFs cause of action. [37]
In this case, petitioner FHGCCI alleged in its Complaint that:
PREFATORY
This is a derivative suit filed by Shareholder and Club Member Rainier Madrid on behalf of
[petitioner FHGCCI] to compel [respondents FEPI and FEGDI], to finish the construction and complete
development of Clubs Arnold Palmer 2nd Nine-Holes Golf Course and the adjunct Country Club Premises.
Despite repeated demands on FHGCCI, which appears controlled and managed by interlocking
directors of [respondents FEPI and FEGDI] as an OLD BOYS CLUB, and therefore guilty of grave
conflict of interest to initiate legal actions against developer [respondent] FEGDI vis-a-vis the
completion of the Clubs Arnold Palmer 2nd Nine-Holes Golf Course and the promised Country Club
Facilities, FHGCCI has failed, shirked, and refused to sue the [respondents FEPI and FEGDI].
This BAD FAITH inaction and refusal to sue [respondents FEPI and FEGDI] by the FHGCCI Board of
Directors is definitely prejudicial to FHGCCI and its members as they have been long deprived the
maximum use of the promised Full 36-Hole Golf Course and Country Club Amenities, thereby rendering
them in fundamental and material breach of their SEC Disclosure Statements, Marketing and Sales
Contracts.
The FHGCCI Board of Directors [are] guilty of grave conflict of interest as Founder Shareholders
Noel M. Carifio, Robert John L. Sobrepefia, Ferdinand T. Santos and Enrique Sobrepena, Jr. are also
the majority Board of Directors of [respondent] FEPI and later [respondent] FEGDI, who for more
than ten (10) years NOW has failed and refused to complete the Project for which they should have
sued [respondents] FEPI [and] FEGDI as early as 2000.
Indeed, the control, exclusive management and operations of FHGCCI, which should have been turned-over
to the General Membership, has been illegally withheld, retained and continued to be enjoyed by FHGCCI
Board of Directors via their abusive, void and illegal Founders Shares, subject now of a separate suit to
compel turnover of the FHGCCI to its General Membership.
The patent interlocking directorship of FHGCCI and [respondents] FEPI /FEGDI sufficiently shows
the abuse, high handed and condescending strong arm posture of FHGCCI Board of Directors in
failing or refraining from suing [respondents] FEPI [and] FEGDI as the developer for the full and
total completion of [the] 36-Hole Golf Course and adjunct Country Club facilities.
HENCE, THIS DERIVATIVE SUIT.
xxxx
ALLEGATIONS COMMON TO ALL CAUSES OF ACTION
xxxx
4. On June 29, 1995, [respondent] FEPI incorporated the Golf and Country Club Company [FHGCCf] x
x x.
Per FHGCCIs Articles of Incorporation, fifty (50%) percent of its authorized member shares appears to
have been distributed as follows:
SUBSCRIBERS NUMBER & KIND OF SHARES

1. Noel M. Cario 1 Founders Share

2. Robert John L. Sobrepea 1 Founders Share

3. Ferdinand T. Santos 1 Founders Share

4. Sabrina T.Santos 1 Founders Share

5. Enrique Sobrepea, Jr. 1 Founders Share

6. Johnson Ong 1 Founders Share

7. Romeo G. Carlos 1 Founders Share

8. Manuel Yu 1 Founders Share

9. FEGDI 537 Class A, 190 Class B, 292 Class C, 146 Class D; total
= 1165

10. Kings Properties Corp. 290 Class A, 102 Class B, 292 Class C, 146 Class D; total
= 627

xxxx
10. Worse, with manifest intention of giving undue benefit, gain and/or advantage to [respondents]
FEPI/FEGDI and to retain control of FHGCCI via the Founders Shares, the FHGCCI Board of
Directors appear to have deliberately failed, shirked and refused to sue, act and demand that
[respondents] FEPI/FEGDI complete and finish theconstruction and/or turn-over of the second golf
course, specifically the Arnold Palmer 2 nd Nine-Holes and the additional Country Club premises and
adjunct country club facilities, to enable them, as Founder Shareholders, to hold on to, continue their
control and exclusive management of the Club, as an OLD BOYS CLUB, to the damage and prejudice of
FHGCCI, and its members whose corporate rights remain IN LIMBO to date.
xxxx
13. To date, however, the FHGCCI Board of Directors intentionally and deliberately failed and/or
refused to heed Shareholder and Club Member Rainier L. Madrid and numerous undisclosed
members of FHGCCPs above valid and just demand, to the damage and prejudice of [petitioner]
FHGCCI and its Members.
xxxx
2.2 As shown, for more than ten (10) years now from the stipulated full completion of the 2 nd 18-Holes
Arnold Palmer Golf Course, and the country club facilities in September 2000, the FHGCCI Board of
Directors, being guilty of apparent conflict of interest prescinding from their interlocking
directorships, have deliberately and purposely failed, shirked and/or refused to demand and sue
[respondents] developer FEPI/FEGDI to fully complete the Project, especially the 36-Hole Golf Course,
and adjunct Country Club and commercial complex amenities, to the grave damage and prejudice of
[petitioner] FHGCCI and its Members. It is pure and simple, SYNDICATED ESTAFA.
2.3. Consequently, [respondents FEPI and FEGDI], jointly and severally, should be compelled, ordered and
directed to fully perform, finish, complete and turn-over the whole 36-Hole Golf Course and Country Club
Amenities soonest.
 xxxx
3.2. Additionally, [respondents] FEPI and FEGDI must be ordered to render an accounting of ALL work
done, EXISTING work-in-progress, if any, and differential backlog in connection with their performance
and delivery of the Project, including the contracted 36-Hole Golf Course and Country Club
Amenities.[38] (Emphasis supplied)
Based on the foregoing allegations, it is clear that Madrid filed a derivative suit on behalf of petitioner FHGCCI
to compel respondents FEPI and FEGDI to complete the golf course and country club project and to render an
accounting of all works done, existing work-in-progress and, if any, differential backlog. The fact that petitioner
FHGCCI denominated the Complaint as a derivative suit for specific performance is sufficient reason for the
RTC to dismiss it for lack of jurisdiction, as the RTC where the Complaint was raffled is not a special commercial
court. Upon the enactment of RA No. 8799, jurisdiction over intra- corporate disputes, including derivatives
suits, is now vested in the RTCs designated as special commercial courts by this Court pursuant to A.M. No. 00-
11-03-SC promulgated on November 21, 2000.[39]
Petitioner FHGCCIs contention that the instant case does not involve an intra-corporate controversy as it was
filed against respondents FEPI and FEGDI as developers, and not as shareholders of the corporation holds no
water. Apparent in the Complaint are allegations of the interlocking directorships of the Board of Directors of
petitioner FHGCCI and respondents FEPI and FEGDI, the conflict of interest of the Board of Directors of
petitioner FHGCCI, and their bad faith in carrying out their duties. Likewise alleged is that respondent FEPI and,
later, respondent FEGDI are shareholders of petitioner FHGCCI which under the project agreement, respondent
FEPI was tasked to perform the development and construction work and other obligations and undertakings
of the project as full payment of its subscription to the authorized capital stock of petitioner FHGCCI, which it
later assigned to respondent FEGDI. Considering these allegations, we find that, contrary to the claim of
petitioner FHGCCI, there are unavoidably intra- corporate controversies intertwined in the specific
performance case.
Moreover, a derivative suit is a remedy designed by equity as a principal defense of the minority shareholders
against the abuses of the majority.[40] Under the Corporation Code, the corporations power to sue is lodged with
its board of directors or trustees.[41] However, when its officials refuse to sue, or are the ones to be sued, or hold
control of the corporation, an individual stockholder may be permitted to institute a derivative suit to enforce
a corporate cause of action on behalf of a corporation in order to protect or vindicate its rights. [42] In such
actions, the corporation is the real party in interest, while the stockholder suing on behalf of the corporation is
only a nominal party.[43] Considering its purpose, a derivative suit, therefore, would necessarily touch upon the
internal affairs of a corporation.
It is for this reason that a derivative suit is among the cases covered by the Interim Rules of Procedure
Governing Intra-Corporate Controversies, A.M. No. 01-2-04- SC, March 13, 2001. Section l(a), Rule 1 of the said
Interim Rules states that:
RULE 1
General Provisions
SECTION 1. (a) Cases Covered These Rules shall govern the procedure to be observed in civil cases
involving the following:
(1) Devices or schemes employed by, or any act of, the board of directors, business associates, officers or
partners, amounting to fraud or misrepresentation which may be detrimental to the interest of the public
and/or of the stockholders, partners, or members of any corporation, partnership, or association;
(2) Controversies arising out of intra-corporate, partnership, or association relations, between and among
stockholders, members, or associates; and between, any or all of them and the corporation, partnership, or
association of which they are stockholders, members, or associates, respectively;
(3) Controversies in the election or appointment of directors, trustees, officers, or managers of
corporations, partnerships, or associations;
(4) Derivative suits; and
 (5) Inspection of corporate books.
In view of the foregoing, we agree with the RTC that the instant derivative suit for specific performance against
respondents FEPI and FEGDI falls under the jurisdiction of special commercial courts.
In Gonzales v. GJH Land, Inc.,[44] we laid down the guidelines to be observed if a commercial case filed before the
proper RTC is wrongly raffled to its regular branch. In that case, we said that if the RTC has no internal branch
designated as a Special Commercial Court, the proper recourse is to refer the case to the nearest RTC with a
designated Special Commercial Court branch within the judicial region. Upon referral, the RTC to which the
case was referred to should redocket the case as a commercial case. And if the said RTC has only one branch
designated as a Special Commercial Court, it should assign the case to the sole special branch.
The Complaint filed by petitioner FHGCCI failed to comply with the requisites for a valid derivative suit.
In this case, however, to refer the case to a special commercial court would be a waste of time since it is
apparent on the face of the Complaint, as pointed out by respondents FEPI and FEGDI in their Answer, that
petitioner FHGCCI failed to comply with the requisites for a valid derivative suit.
Rule 8, Section 1 of the Interim Rules of Procedure Governing Intra- Corporate Controversies provides:
SECTION 1. Derivative action. A stockholder or member may bring an action in the name of a
corporation or association, as the case may be, provided, that:
(1) He was a stockholder or member at the time the acts or transactions subject of the action occurred and
at the time the action was filed;
(2) He exerted all reasonable efforts, and alleges the same with particularity in the complaint, to exhaust
all remedies available under the articles of incorporation, by-laws, laws or rules governing the corporation
or partnership to obtain the relief he desires;
(3) No appraisal rights are available for the act or acts complained of; and
(4) The suit is not a nuisance or harassment suit.
In case of nuisance or harassment suit, the court shall forthwith dismiss the case.
Corollarily, [f]or a derivative suit to prosper, it is required that the minority stockholder suing for and on behalf
of the corporation must allege in his complaint that he is suing on a derivative cause of action on behalf of the
corporation and all other stockholders similarly situated who may wish to join him in the suit. [45] It is also
required that the stockholder should have exerted all reasonable efforts to exhaust all remedies available
under the articles of incorporation, by-laws, laws or rules governing the corporation or partnership to obtain
the relief he desires [and that such fact is alleged] with particularity in the complaint. [46] The purpose for this
rule is to make the derivative suit the final recourse of the stockholder, after all other remedies to obtain the
relief sought had failed.[47] Finally, the stockholder is also required to allege, explicitly or otherwise, the fact
that there were no appraisal rights available for the acts complained of, as well as a categorical statement that
the suit is not a nuisance or a harassment suit.[48]
In this case, Madrid, as a shareholder of petitioner FHGCCI, failed to allege with particularity in the Complaint,
and even in the Amended Complaint, that he exerted all reasonable efforts to exhaust all remedies available
under the articles of incorporation, by-laws, or rules governing the corporation; that no appraisal rights are
available for the acts or acts complained of; and that the suit is not a nuisance or a harassment suit. Although
the Complaint alleged that demand letters were sent to the Board of Directors of petitioner FHGCCI and that
these were unheeded, these allegations will not suffice.
Thus, for failing to meet the requirements set forth in Section 1, Rule 8 of the Interim Rules of Procedure
Governing Intra-Corporate Controversies, the Complaint, denominated as a derivative suit for specific
performance, must be dismissed.
WHEREFORE, the Petition is hereby DENIED. The assailed Orders dated May 14,2012 and February 1, 2013 of
the Regional Trial Court, Branch 74, Antipolo City, in Civil Case No. 10-9042 are hereby AFFIRMED.
SO ORDERED.
G.R. No. 175949, January 30, 2017 - UNITED ALLOY PHILIPPINES CORPORATION, SPOUSES DAVID C.
CHUA AND LUTEN CHUA, Petitioners, v. UNITED COCONUT PLANTERS BANK, Respondent.

SECOND DIVISION

G.R. No. 175949, January 30, 2017

UNITED ALLOY PHILIPPINES CORPORATION, SPOUSES DAVID C. CHUA AND LUTEN

CHUA, Petitioners, v. UNITED COCONUT PLANTERS BANK, Respondent.

DECISION

PERALTA, J.:

Before the Court is a petition for review on certiorari seeking the reversal and setting aside of the
Decision1 and Resolution2 of the Court of Appeals (CA), dated September 21, 2006 and December 11, 2006,
respectively, in CA-G.R. CV No. 81079. The assailed Decision affirmed the Decision of the Regional Trial
Court (RTC) of Makati City, Branch 135, in Civil Case No. 01-1332, while the questioned Resolution denied
petitioners' Motion for Reconsideration.

The pertinent factual and procedural antecedents of the case are as follows: chanRoblesvi rtua lLawl ibra ry

On December 18, 2000, herein petitioner corporation, United Alloy Philippines

Corporation (UNIALLOY) applied for and was granted a credit accommodation by herein respondent United
Coconut Planters Bank (UCPB) in the amount of PhP50,000,000.00, as evidenced by a Credit
Agreement.3 Part of UNIALLOY's obligation under the Credit Agreement was secured by a Surety
Agreement,4 dated December 18, 2000, executed by UNIALLOY Chairman, Jakob Van Der Sluis (Van Der
Sluis), UNIALLOY President, David Chua and his spouse, Luten Chua (Spouses Chua), and one Yang Kim
Eng (Yang). Six (6) Promissory Notes,5were later executed by UNIALLOY in UCPB's favor, to wit: chanRoblesvi rt ualLaw lib rary

1) #8111-00-20031-1, executed on December 18, 2000, in the amount of US$110,000.00;

2) #8111-00-00110-6, executed on December 18, 2000, in the amount of PhP6,000,000.00;
3) #8111-00-00112-2, executed on December 27, 2000, in the amount of PhP3,900,000.00;
4) #8111-01-20005-6, executed on February 7, 2001, in the amount of US$320,000.00;
5) #8111-01-00009-0, executed on February 26, 2001, in the amount of PhP1,600,000.00;
6) #8111-01-00030-8, executed on April 30, 2001, in the amount of PhP16,029,320.88.

In addition, as part of the consideration for the credit accommodation, UNIALLOY and UCPB also entered
into a "lease-purchase" contract wherein the former assured the latter that it will purchase several real
properties which UCPB co-owns with the Development Bank of the Philippines.

Subsequently, UNIALLOY failed to pay its loan obligations. As a result, UCPB filed against UNIALLOY, the
spouses Chua, Yang and Van Der Sluis an action for Sum of Money with Prayer for Preliminary
Attachment6 on August 27, 2001. The collection case was filed with the Regional Trial Court of Makati
City (RTC of Makati) and docketed as Civil Case No. 01-1332. Consequently, UCPB also unilaterally
rescinded its lease-purchase contract with UNIALLOY.

On the other hand, on even date, UNIALLOY filed against UCPB, UCPB Vice-President Robert Chua and Van
Der Sluis a complaint for Annulment and/or Reformation of Contract with Damages, with Prayer for a Writ of
Preliminary Injunction or Temporary Restraining Order.7 Claiming that it holds office and conducts its
business operations in Tagoloan, Misamis Oriental, UNIALLOY filed the case with the Regional Trial Court of
Cagayan De Oro City (RTC of CDO) and was docketed as Civil Case No. 2001-219. UNIALLOY contended that
Van Der Sluis, in cahoots with UCPB Vice-President Robert Chua, committed fraud, manipulation and
misrepresentation to obtain the subject loan for their own benefit. UNIALLOY prayed, among others, that
three (3) of the six (6) Promissory Notes it executed be annulled or reformed or that it be released from
liability thereon.

On September 12, 2001, UNIALLOY filed an Urgent Motion to Dismiss8 the collection case (Civil Case No. 01-
1332) filed by UCPB on the ground of litis pendentia and forum shopping. UNIALLOY contended that its
complaint for annulment of contract (Civil Case No. 2001-219) and the collection case filed by UCPB involves
the same parties and causes of action. On October 31, 2001, the RTC of Makati issued an Order9denying
UNIALLOY's motion to dismiss.

In the meantime, UCPB and its co-defendants also filed a Motion to Dismiss UNIALLOY's complaint for
annulment of contract on the grounds of improper venue, forum shopping, litis pendentia, and harassment
or nuisance suit. On September 13, 2001, the RTC of CDO issued an Order10 dismissing UNIALLOY's
complaint for annulment of contract. The dispositive portion of the Order reads, thus: chanRoble svirtual Lawli bra ry

ACCORDINGLY, finding meritorious that the venue is improperly laid and the complain[ant] engaged in
forum-shopping and harassment of defendant Jakob Van Der Sluis, this case is hereby DISMISSED
rendering the prayer for issuance of a writ of preliminary injunction moot and academic, and ordering
plaintiff to turn over possession of the subject premises of the properties in question at Barangay Gracia,
Tagoloan, Misamis Oriental to defendant United Coconut Planters Bank.

SO ORDERED.11

Thereafter, on motion, the RTC of CDO issued an Order of Execution, dated September 14, 2001, directing
UNIALLOY to tum over to UCPB the property subject of their lease-purchase agreement.

UNIALLOY then filed a petition for certiorari and mandamus with the CA questioning the September 13 and
September 14, 2001 Orders of the RTC of CDO. UNIALLOY also prayed for the issuance of a writ of
preliminary injunction. The case was docketed as CA G.R. SP. No. 67079.

On February 18, 2002, the CA promulgated a Resolution12 granting UNIALLOY's prayer for the issuance of a
writ of preliminary injunction. UCPB questioned the above CA Resolution by filing a petition
for certiorari with this Court, which was docketed as G.R. No. 152238. On March 18, 2002, this Court issued
a Resolution which restrained the CA from enforcing its February 18, 2002 Resolution.

On January 28, 2005, this Court, rendered its Decision in G.R. No. 152238 denying UCPB's petition
for certiorari and affirming the CA Resolution granting the writ of preliminary injunction.

Thereafter, on August 17, 2007, the CA promulgated a Decision dismissing UNIALLOY's certiorari petition
and affirming the September 13 and September 14, 2001 Orders of the RTC of CDO. UNIALLOY then filed a
petition for review on certiorari challenging the above CA Decision. The case was docketed as G.R. No.
179257.

On November 23, 2015, this Court promulgated a Decision in G.R. No. 179257 denying UNIALLOY's petition.
This Court held that the CA did not err in affirming the dismissal of UNIALLOY's complaint on the grounds of
improper venue, forum shopping and for being a harassment suit. This Court also ruled that the August 17,
2007 Decision of the CA neither violated this Court's January 28, 2005 Decision in G.R. No. 152238 nor
contradicted the CA's February 18, 2002 Resolution granting the preliminary injunction prayed for by
UNIALLOY because the dismissal of UNIALLOY's main action carried with it the dissolution of any ancillary
relief previously granted in the said case, such as the abovementioned preliminary injunction. Subsequently,
this Court's Decision in G.R. No. 179257 became final and executory per Entry of Judgment dated January
20, 2016.

Meanwhile, on March 15, 2002, UNIALLOY filed with the RTC of Makati an omnibus motion praying for the
suspension of the proceedings of the collection case in the said court on the ground of pendency of
the certiorari petition it filed with this Court.13 However, the RTC denied UNIALLOY's motion in its
Order14dated August 19, 2002.
Subsequently, on June 17, 2003, the RTC of Makati rendered Judgment in the collection case in favor of
UCPB. The dispositive portion of the RTC Decision reads, thus: chanRoblesvi rtua lLawl ibrary

WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff. Defendants are hereby
ordered to pay plaintiff the following:
chanRob lesvi rtua lLawl ibra ry

a. The sum of US DOLLARS: (US$435,494.44) with interest and penalty charges from August 1, 2001 until
fully paid.

b. The sum of P26,940,950.80 with interest and penalty charges from August 1, 2001 until fully paid.

c. Attorney's fees in the amount of P1,000,000.00.

d. Costs of suit.

SO ORDERED.15

UNIALLOY appealed the above RTC Decision with the CA.

On September 21, 2006, the CA rendered its assailed judgment denying UNIALLOY's appeal and affirming
the questioned RTC Decision.

Hence, the instant petition raising the following issues: chanRob lesvi rtualLaw lib rary

5.01 THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS, REVERSIBLE ERROR, IF NOT GRAVE
ABUSE OF DISCRETION, IN REFUSING TO RESOLVE AS TO

I
WHETHER OR NOT THE TRIAL COURT ERRED IN DENYING PETITIONERS' URGENT MOTION TO DISMISS

II
WHETHER OR NOT THE TRIAL COURT ERRED IN DENYING PETITIONERS' OMNIBUS MOTION TO SUSPEND
PROCEEDINGS AND TO LIFT WRIT OF PRELIMINARY ATTACHMENT

III
WHETHER OR NOT THE TRIAL COURT ERRED AND/OR COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION IN RENDERING THE ASSAILED QUESTIONED
DECISION WHEN THERE IS A PENDING CIVIL ACTION BEFORE THE REGIONAL TRIAL COURT OF CAGAYAN
DE ORO, BRANCH 40, INVOLVING THE SAME PARTIES AND SUBJECT MATTER WHICH CASE, IS NOW
PENDING AND ASSAILED BY THE PLAINTIFF-APPELLEE VIA PETITION BEFORE THE HONORABLE SUPREME
COURT.

5.02 THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS, REVERSIBLE ERROR IF NOT GRAVE
ABUSE OF DISCRETION, IN DENYING PETITIONERS' URGENT MOTION FOR RECONSIDERATION WITHOUT
STATING CLEARLY AND DISTINCTLY THE FACTUAL AND LEGAL BASIS THEREOF.16

Petitioners' basic argument is that the resolution of the instant petition basically hinges on the outcome of
the petition filed under G.R. No. 179257. Considering that the promissory notes subject of G.R. No. 179257
are among the promissory notes which are also involved in the present case, petitioner contends that a
judgment by this Court in G.R. No. 179257 that reverses the Decision of the RTC of Cagayan de Oro City,
which in effect would declare the nullity of the subject promissory notes, may conflict with the Decision of
this Court in the present petition, which involves the collection of the sum being represented in the same
promissory notes. Thus, petitioner prays for the dismissal of the collection case (Civil Case No. 01-1332)
filed by UCPB or the suspension of proceedings therein pending resolution of its petition in G.R. No. 179257.

However, as mentioned above, on November 23, 2015, the 2nd Division of this Court already came up with a
Decision in G.R. No. 179257 which affirmed the RTC's dismissal of UNIALLOY's complaint. Pertinent portions
of the said Decision read as follows: cha nRoblesv irt ual Lawlib rary

CA CDO did not err in affirming the

dismissal of UniAiloy's Complaint on the
grounds of improper venue, forum shopping
and for being a harassment suit

The RTC was correct in dismissing UniAlloy's Complaint on the ground of improper venue. In general,
personal actions must be commenced and tried (i) where the plaintiff or any of the principal plaintiffs
resides, (ii) where the defendant or any of the principal defendants resides, or (III) in the case of a resident
defendant where he may be found, at the election of the plaintiff. Nevertheless, the parties may agree in
writing to limit the venue of future actions between them to a specified place.

In the case at bench, paragraph 18 of the LPA expressly provides that "[a]ny legal action arising out of or in
connection with this Agreement shall be brought exclusively in the proper courts of Makati City, Metro
Manila." Hence, UniAlloy should have filed its complaint before the RTC of Makati City, and not with the RTC
of Cagayan de Oro City.

But to justify its choice of venue, UniAlloy insists that the subject matter of its Complaint in Civil Case No.
2001-219 is not the LPA, but the fictitious loans that purportedly matured on April 17, 2001.

UniAlloy's insistence lacks merit. Its Complaint unequivocally sought to declare "as null and void the
unilateral rescission made by defendant UCPB of its subsisting Lease Purchase Agreement with [UniAlloy]."
What UCPB unilaterally rescinded is the LPA and without it there can be no unilateral rescission to speak of.
Hence, the LPA is the subject matter or at least one of the subject matters of the Complaint. Moreover, and
to paraphrase the aforecited paragraph 18 of the LPA, as long as the controversy arises out of or is
connected therewith, any legal action should be filed exclusively before the proper courts of Makati City.
Thus, even assuming that the LPA is not the main subject matter, considering that what is being sought to
be annulled is an act connected and inseparably related thereto, the Complaint should have been filed
before the proper courts in Makati City.

With regard forum-shopping, our review of the records of this case revealed that UniAlloy did not disclose in
the Verification/Certification of the Complaint the pendency of Civil Case No. 2001-156 entitled "Ernesto
Paraiso and United Alloy Philippines Corporation v. Jakob Van Der Sluis." The trial court took judicial notice
of its pendency as said case is also assigned and pending before it. Thus, we adopt the following unrebutted
finding of the RTC:chanRoblesv irt ual Lawlib rary

These two civil cases have identical causes of action or issues against defendant Jakob Van Der Sluis for
having misrepresented to plaintiff and its stockholders that he can extend financial assistance in running the
operation of the corporation, such that on April 6, 2001 plaintiff adopted a Stockholders Resolution making
defendant Jakob chairman of the corporation for having the financial capability to provide the financial needs
of plaintiff and willing to finance the operational needs thereof; that a Memorandum of Agreement was
subsequently entered between the parties whereby defendant Jakob obligated to provide sufficient financial
loan to plaintiff to make it profitable; that Jakob maliciously and willfiilly reneged [on] his financial
commitments to plaintiff prompting the stockholders to call his attention and warned him of avoiding the
said agreement; that defendant who had then complete control of plaintiffs bank account with defendant
UCPB, through fraudulent machinations and manipulations, was able to maliciously convince David C. Chua
to pre-sign several checks; that defendant Jakob facilitated several huge loans purportedly obtained by
plaintiff which defendant himself could not even account and did not even pay the debts of the corporation
but instead abused and maliciously manipulated plaintiffs account.

Forum-shopping indeed exists in this case, for both actions involve the same transactions and same
essential facts and circumstances as well as identical causes of action, subject matter and issues, x x x

As mentioned above, this Court's Decision m the above case has become final and executory on January 20,
2016.

Thus, contrary to petitioners' position, there is no longer any possibility that the Decision of the RTC of CDO
may conflict with the disposition of the present case because UNIALLOY's complaint for annulment of
contract has already been dismissed with finality. This Court will, thus, proceed to resolve the merits of the
instant case.

The fundamental issue here is whether or not herein petitioners, together with their co-defendants Van Der
Sluis and Yang, are liable to pay respondent the amounts awarded by the RTC of Makati City in its June 17,
2003 Decision.17

The Court rules in the affirmative.

As ruled upon by both the RTC and the CA, UNIALLOY failed to pay its obligations under the above
promissory notes and that herein petitioner Spouses Chua, together with their co-defendants Van Der Sluis
and Yang freely executed a Surety Agreement whereby they bound themselves jointly and severally with
UNIALLOY, to pay the latter's loan obligations with UCPB. Pertinent portions of the said Surety Agreement
are reproduced hereunder, to wit: chanRob lesvi rtua lLawl ibra ry

xxxx

ARTICLE I

LIABILITIES OF SURETIES

Section 1.01. The SURETIES, jointly and severally with the PRINCIPAL, hereby unconditionally and
irrevocably guarantee the full and complete payment when due, whether at stated maturity, by acceleration
or otherwise, of all sums payable by the PRINCIPAL under the Credit Agreement, the Note/s and other
related documents or instruments referred to therein (hereinafter referred to collectively as the "Loan
Documents") the terms and conditions of which are hereby deemed incorporated by reference.

The liability of the SURETIES shall not be limited to the aggregate principal amount of FIFTY MILLION
PESOS (P50,000,000.00), Philippine Currency, or its foreign currency equivalent, but shall include
such interest, fees, penalties and other charges due thereon, as well as any and all renewals, extensions,
restructurings or conversions of the Accommodation or any portion thereof, as may appear in the books
and records of account of the BANK.

Such extension/s, renewal/s, restructuring/s, or conversion/s of the Accommodation or any portion

thereof, including any increase in the principal amount thereof, or the imposable interest rates and other
bank charges, shall be binding upon the SURETIESunder the terms of this SURETY AGREEMENT, without
need of any further notice to or consent or conformity of the SURETIES, all of which are hereby expressly
waived.

Section 1.02. This SURETY AGREEMENT is a guarantee of payment and not merely of collection and is
intended to be a perfect and continuing indemnity in favor of the BANKfor the amounts and to the extent
stated above. For this purpose, the SURETIES hereby commit that for as long as this SURETY
AGREEMENT is in effect, the SURETIES shall not sell, lease, transfer, assign or encumber any of its
present and future properties without the written consent of the BANK, which consent will not be
unreasonably withheld.

The liability of the SURETIES shall be absolute, irrevocable, unconditional, direct, immediate and not
contingent upon the pursuit by the BANK of whatever remedies it may have against the PRINCIPAL or the
other sureties for the Accommodation, and shall be performed by the SURETIES strictly in accordance with
the terms hereof and under any and all circumstances, including the existence of any claim, set-off, defense
or other rights which the SURETIES or any person or entity may have at any time against the BANK for
any reason whatsoever, whether or not related to this SURETY AGREEMENT, the Loan Documents or
under such other documents executed in relation thereto, or contemplated hereunder.

ARTICLE II

TERM

Section 2.01. This SURETY AGREEMENT shall remain in full force and effect until payment in full of all
amount for which the PRINCIPAL is or may be liable as set forth in ARTICLE I hereof, regardless of the
absence of any further or other assent or conformity of, or notice to the SURETIES, or any circumstance, or
provision of law which might otherwise constitute a defense or discharge of the SURETIES, all of which are
hereby expressly waived.

ARTICLE III

DEFAULT

Section 3.01. If the BANK shall declare the obligation of the PRINCIPAL to be due and payable because of
the happening of any of the event of default as defined in the Credit Agreement, the SURETIES, upon
receipt of written notice from the BANK, shall forthwith pay to the BANK the full amount of the said
obligations, without need of demand, protest or notice of any kind, other than the notice provided herein, all
of which are likewise expressly waived by the SURETIES.

In this connection, the BANK is hereby given full power and authority to apply whatever moneys or things
of value belonging to the SURETIES which may be in the possession or control of the BANK in payment of
the obligations mentioned above.

ARTICLE IV

BINDING EFFECT

Section 4.01. This SURETY AGREEMENT shall except upon the other SURETIES, if any whose liability(ies)
is/are extinguished by way of compromise or otherwise be binding upon the SURETIES, their heirs and
successors in interest and shall inure to the benefit of and be enforceable by the BANK, its assigns and
successors in interest. For this purpose, the SURETIES have agreed, as they hereby agree, that an
extinguishment of liability(ies) of any of the SURETIES shall not be an obstacle to the BANK from
demanding payment from the other SURETIES, if any, so long as the Accommodation has not been fully
collected.

x x x x18

Petitioners do not deny their liability under the abovequoted Surety Agreement.

As correctly held by both the RTC and the CA, Article 1159 of the Civil Code expressly provides that
"[o]bligations arising from contracts have the force of law between the contracting parties and should be
complied with in good faith." The RTC as well as the CA found nothing which would justify or excuse
petitioners from non-compliance with their obligations under the contract they have entered into. Thus, it
becomes apparent that petitioners are merely attempting to evade or, at least, delay the inevitable
performance of their obligation to pay under the Surety Agreement and the subject promissory notes which
were executed in respondent's favor.

The Court notes, however, that the interest rates imposed on the subject promissory notes were made
subject to review and adjustment at the sole discretion and under the exclusive will of UCPB. Moreover,
aside from the Consolidated Statement of Account attached to the demand letters addressed to petitioner
spouses Chua and their co-defendants,19 no other competent evidence was shown to prove the total amount
of interest due on the above promissory notes. In fact, based on the attached Consolidated Statement of
Account, UCPB has already imposed a 24% interest rate on the total amount due on respondents' peso
obligation for a short period of six months. Settled is the rule that any contract which appears to be heavily
weighed in favor of one of the parties so as to lead to an unconscionable result is void.19 Any stipulation
regarding the validity or compliance of the contract which is left solely to the will of one of the parties, is
likewise, invalid.20

Moreover, courts have the authority to strike down or to modify provisions in promissory notes that grant
the lenders unrestrained power to increase interest rates, penalties and other charges at the latter's sole
discretion and without giving prior notice to and securing the consent of the borrowers.21 This unilateral
authority is anathema to the mutuality of contracts and enable lenders to take undue advantage of
borrowers.22 Although the Usury Law has been effectively repealed, courts may still reduce iniquitous or
unconscionable rates charged for the use of money.23 Furthermore, excessive interests, penalties and other
charges not revealed in disclosure statements issued by banks, even if stipulated in the promissory notes,
cannot be given effect under the Truth in Lending Act.24

The Court, thus, finds it proper to modify the interest rates imposed on respondents' obligation. Pursuant to
the ruling in Nacar v. Gallery Frames, et. al.,25 the sums of US$435,494.44 and PhP26,940,950.80 due to
UCPB shall earn interest at the rate of 12% per annum from the date of default, on August, 1, 2001, until
June 30, 2013 and thereafter, at the rate of 6% per annum, from July 1, 2013 until finality of this Decision.
The total amount owing to UCPB as set forth in this Decision shall further earn legal interest at the rate of
6% per annum from its finality until full payment thereof, this interim period being deemed to be by then an
equivalent to a forbearance of credit.

Finally, pursuant to the parties' Credit Agreement as well as the subject Promissory Notes, respondents are
also liable to pay a penalty charge at the rate of 1% per month or 12% per annum.

WHEREFORE, the instant petition is DENIED. The Decision and Resolution of the Court of Appeals, dated
September 21, 2006 and December 11, 2006, respectively, in CA-G.R. CV No. 81079,
are AFFIRMED with MODIFICATION by directing petitioners and their co-defendants to pay respondent
UCPB the following: cha nRoblesvi rt ualLaw lib rary

(1) the principal amounts of US$435,494.44 and PhP26,940,950.80; chanro bles law

(2) legal interest of 12% per annum on the above principal amounts reckoned from August 1, 2001 until
June 30, 2013; chanrobles law

(3) penalty charge of 12% per annum from August 1, 2001 until fully paid; and

(4) an interest of 6% from July 1, 2013 until fully paid.

SO ORDERED. chanroblesvi rtua ll