CIVIL PROCEDURE CASES

RULE NO. 1-
SUN INSURANCE OFFICE, LTD., (SIOL), E.B. PHILIPPS and D.J. WARBY, petitioners,
vs.
HON. MAXIMIANO C. ASUNCION, Presiding Judge, Branch 104, Regional Trial Court, Quezon City and
MANUEL CHUA UY PO TIONG, respondents.
G.R. Nos. 79937-38 February 13, 1989

Again the Court is asked to resolve the issue of whether or not a court acquires jurisdiction over a case
when the correct and proper docket fee has not been paid.

On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for brevity) filed a complaint with the
Regional Trial Court of Makati, Metro Manila for the consignation of a premium refund on a fire
insurance policy with a prayer for the judicial declaration of its nullity against private respondent Manuel
Uy Po Tiong. Private respondent as declared in default for failure to file the required answer within the
reglementary period.

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

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

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

On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case No. Q-41177 was temporarily
assigned, issuedan order to the Clerk of Court instructing him to issue a certificate of assessment of the
docket fee paid by private respondent and, in case of deficiency, to include the same in said certificate.
On January 7, 1984, to forestall a default, a cautionary answer was filed by petitioners. On August
30,1984, an amended complaint was filed by private respondent including the two additional defendants
aforestated.

Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was thereafter assigned, after his
assumption into office on January 16, 1986, issued a Supplemental Order requiring the parties in the
case to comment on the Clerk of Court's letter-report signifying her difficulty in complying with the
Resolution of this Court of October 15, 1985 since the pleadings filed by private respondent did not
indicate the exact amount sought to be recovered. On January 23, 1986, private respondent filed a
"Compliance" and a "Re-Amended Complaint" stating therein a claim of "not less than Pl0,000,000. 00 as
actual compensatory damages" in the prayer. In the body of the said second amended complaint
however, private respondent alleges actual and compensatory damages and attorney's fees in the total
amount of about P44,601,623.70.

On January 24, 1986, Judge Asuncion issued another Order admitting the second amended complaint
and stating therein that the same constituted proper compliance with the Resolution of this Court and
that a copy thereof should be furnished the Clerk of Court for the reassessment of the docket fees. The
reassessment by the Clerk of Court based on private respondent's claim of "not less than P10,000,000.00
as actual and compensatory damages" amounted to P39,786.00 as docket fee. This was subsequently
paid by private respondent.

Petitioners then filed a petition for certiorari with the Court of Appeals questioning the said order of
Judie Asuncion dated January 24, 1986.

On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of
P20,000,000.00 as d.qmages so the total claim amounts to about P64,601,623.70. On October 16, 1986,
or some seven months after filing the supplemental complaint, the private respondent paid the
additional docket fee of P80,396.00.1

On August 13, 1987, the Court of Appeals rendered a decision ruling, among others, as follows:

WHEREFORE, judgment is hereby rendered:

1. Denying due course to the petition in CA-G.R. SP No. 1, 09715 insofar as it seeks annulment of
the order

(a) denying petitioners' motion to dismiss the complaint, as amended, and

(b) granting the writ of preliminary attachment, but giving due course to the portion thereof
questioning the reassessment of the docketing fee, and requiring the Honorable respondent Court to
reassess the docketing fee to be paid by private respondent on the basis of the amount of
P25,401,707.00. 2

Hence, the instant petition.

During the pendency of this petition and in conformity with the said judgment of respondent court,
private respondent paid the additional docket fee of P62,432.90 on April 28, 1988. 3
The main thrust of the petition is that the Court of Appeals erred in not finding that the lower court did
not acquire jurisdiction over Civil Case No. Q-41177 on the ground of nonpayment of the correct and
proper docket fee. Petitioners allege that while it may be true that private respondent had paid the
amount of P182,824.90 as docket fee as herein-above related, and considering that the total amount
sought to be recovered in the amended and supplemental complaint is P64,601,623.70 the docket fee
that should be paid by private respondent is P257,810.49, more or less. Not having paid the same,
petitioners contend that the complaint should be dismissed and all incidents arising therefrom should be
annulled. In support of their theory, petitioners cite the latest ruling of the Court in Manchester
Development Corporation vs. CA, 4 as follows:

The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An
amendment of the complaint or similar pleading will not thereby vest jurisdiction in the Court, much less
the payment of the docket fee based on the amounts sought in the amended pleading. The ruling in the
Magaspi Case in so far as it is inconsistent with this pronouncement is overturned and reversed.

On the other hand, private respondent claims that the ruling in Manchester cannot apply retroactively to
Civil Case No. Q41177 for at the time said civil case was filed in court there was no such Manchester
ruling as yet. Further, private respondent avers that what is applicable is the ruling of this Court in
Magaspi v. Ramolete, 5 wherein this Court held that the trial court acquired jurisdiction over the case
even if the docket fee paid was insufficient.

The contention that Manchester cannot apply retroactively to this case is untenable. Statutes regulating
the procedure of the courts will be construed as applicable to actions pending and undetermined at the
time of their passage. Procedural laws are retrospective in that sense and to that extent. 6

In Lazaro vs. Endencia and Andres, 7 this Court held that the payment of the full amount of the docket
fee is an indispensable step for the perfection of an appeal. In a forcible entry and detainer case before
the justice of the peace court of Manaoag, Pangasinan, after notice of a judgment dismissing the case,
the plaintiff filed a notice of appeal with said court but he deposited only P8.00 for the docket fee,
instead of P16.00 as required, within the reglementary period of appeal of five (5) days after receiving
notice of judgment. Plaintiff deposited the additional P8.00 to complete the amount of the docket fee
only fourteen (14) days later. On the basis of these facts, this court held that the Court of First Instance
did notacquire jurisdiction to hear and determine the appeal as the appeal was not thereby perfected.

In Lee vs. Republic, 8 the petitioner filed a verified declaration of intention to become a Filipino citizen by
sending it through registered mail to the Office of the Solicitor General in 1953 but the required filing fee
was paid only in 1956, barely 5V2 months prior to the filing of the petition for citizenship. This Court
ruled that the declaration was not filed in accordance with the legal requirement that such declaration
should be filed at least one year before the filing of the petition for citizenship. Citing Lazaro, this Court
concluded that the filing of petitioner's declaration of intention on October 23, 1953 produced no legal
effect until the required filing fee was paid on May 23, 1956.

In Malimit vs. Degamo, 9 the same principles enunciated in Lazaro and Lee were applied. It was an
original petition for quo warranto contesting the right to office of proclaimed candidates which was
mailed, addressed to the clerk of the Court of First Instance, within the one-week period after the
proclamation as provided therefor by law.10 However, the required docket fees were paid only after the
expiration of said period. Consequently, this Court held that the date of such payment must be deemed
to be the real date of filing of aforesaid petition and not the date when it was mailed.
Again, in Garica vs, Vasquez, 11 this Court reiterated the rule that the docket fee must be paid before a
court will act on a petition or complaint. However, we also held that said rule is not applicable when
petitioner seeks the probate of several wills of the same decedent as he is not required to file a separate
action for each will but instead he may have other wills probated in the same special proceeding then
pending before the same court.

Then in Magaspi, 12 this Court reiterated the ruling in Malimit and Lee that a case is deemed filed only
upon payment of the docket fee regardless of the actual date of its filing in court. Said case involved a
complaint for recovery of ownership and possession of a parcel of land with damages filed in the Court
of First Instance of Cebu. Upon the payment of P60.00 for the docket fee and P10.00 for the sheriffs fee,
the complaint was docketed as Civil Case No. R-11882. The prayer of the complaint sought that the
Transfer Certificate of Title issued in the name of the defendant be declared as null and void. It was also
prayed that plaintiff be declared as owner thereof to whom the proper title should be issued, and that
defendant be made to pay monthly rentals of P3,500.00 from June 2, 1948 up to the time the property is
delivered to plaintiff, P500,000.00 as moral damages, attorney's fees in the amount of P250,000.00, the
costs of the action and exemplary damages in the amount of P500,000.00.

The defendant then filed a motion to compel the plaintiff to pay the correct amount of the docket fee to
which an opposition was filed by the plaintiff alleging that the action was for the recovery of a parcel of
land so the docket fee must be based on its assessed value and that the amount of P60.00 was the
correct docketing fee. The trial court ordered the plaintiff to pay P3,104.00 as filing fee.

The plaintiff then filed a motion to admit the amended complaint to include the Republic as the
defendant. In the prayer of the amended complaint the exemplary damages earlier sought was
eliminated. The amended prayer merely sought moral damages as the court may determine, attorney's
fees of P100,000.00 and the costs of the action. The defendant filed an opposition to the amended
complaint. The opposition notwithstanding, the amended complaint was admitted by the trial court. The
trial court reiterated its order for the payment of the additional docket fee which plaintiff assailed and
then challenged before this Court. Plaintiff alleged that he paid the total docket fee in the amount of
P60.00 and that if he has to pay the additional fee it must be based on the amended complaint.

The question posed, therefore, was whether or not the plaintiff may be considered to have filed the case
even if the docketing fee paid was not sufficient. In Magaspi, We reiterated the rule that the case was
deemed filed only upon the payment of the correct amount for the docket fee regardless of the actual
date of the filing of the complaint; that there was an honest difference of opinion as to the correct
amount to be paid as docket fee in that as the action appears to be one for the recovery of property the
docket fee of P60.00 was correct; and that as the action is also one, for damages, We upheld the
assessment of the additional docket fee based on the damages alleged in the amended complaint as
against the assessment of the trial court which was based on the damages alleged in the original
complaint.

However, as aforecited, this Court overturned Magaspi in Manchester. Manchester involves an action for
torts and damages and specific performance with a prayer for the issuance of a temporary restraining
order, etc. The prayer in said case is for the issuance of a writ of preliminary prohibitory injunction during
the pendency of the action against the defendants' announced forfeiture of the sum of P3 Million paid
by the plaintiffs for the property in question, the attachment of such property of defendants that may be
sufficient to satisfy any judgment that may be rendered, and, after hearing, the issuance of an order
requiring defendants to execute a contract of purchase and sale of the subject property and annul
defendants' illegal forfeiture of the money of plaintiff. It was also prayed that the defendants be made to
pay the plaintiff jointly and severally, actual, compensatory and exemplary damages as well as 25% of
said amounts as may be proved during the trial for attorney's fees. The plaintiff also asked the trial court
to declare the tender of payment of the purchase price of plaintiff valid and sufficient for purposes of
payment, and to make the injunction permanent. The amount of damages sought is not specified in the
prayer although the body of the complaint alleges the total amount of over P78 Millon allegedly suffered
by plaintiff.

Upon the filing of the complaint, the plaintiff paid the amount of only P410.00 for the docket fee based
on the nature of the action for specific performance where the amount involved is not capable of
pecuniary estimation. However, it was obvious from the allegations of the complaint as well as its
designation that the action was one for damages and specific performance. Thus, this court held the
plaintiff must be assessed the correct docket fee computed against the amount of damages of about P78
Million, although the same was not spelled out in the prayer of the complaint.

Meanwhile, plaintiff through another counsel, with leave of court, filed an amended complaint on
September 12, 1985 by the inclusion of another co-plaintiff and eliminating any mention of the amount
of damages in the body of the complaint. The prayer in the original complaint was maintained.

On October 15, 1985, this Court ordered the re-assessment of the docket fee in the said case and other
cases that were investigated. On November 12, 1985, the trial court directed the plaintiff to rectify the
amended complaint by stating the amounts which they were asking for. This plaintiff did as instructed. In
the body of the complaint the amount of damages alleged was reduced to P10,000,000.00 but still no
amount of damages was specified in the prayer. Said amended complaint was admitted.

Applying the principle in Magaspi that "the case is deemed filed only upon payment of the docket fee
regardless of the actual date of filing in court," this Court held that the trial court did not acquire
jurisdiction over the case by payment of only P410.00 for the docket fee. Neither can the amendment of
the complaint thereby vest jurisdiction upon the Court. For all legal purposes there was no such original
complaint duly filed which could be amended. Consequently, the order admitting the amended
complaint and all subsequent proceedings and actions taken by the trial court were declared null and
void.13

The present case, as above discussed, is among the several cases of under-assessment of docket fee
which were investigated by this Court together with Manchester. The facts and circumstances of this
case are similar to Manchester. In the body of the original complaint, the total amount of damages
sought amounted to about P50 Million. In the prayer, the amount of damages asked for was not stated.
The action was for the refund of the premium and the issuance of the writ of preliminary attachment
with damages. The amount of only P210.00 was paid for the docket fee. On January 23, 1986, private
respondent filed an amended complaint wherein in the prayer it is asked that he be awarded no less
than P10,000,000.00 as actual and exemplary damages but in the body of the complaint the amount of
his pecuniary claim is approximately P44,601,623.70. Said amended complaint was admitted and the
private respondent was reassessed the additional docket fee of P39,786.00 based on his prayer of not
less than P10,000,000.00 in damages, which he paid.

On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of
P20,000,000.00 in damages so that his total claim is approximately P64,601,620.70. On October 16,
1986, private respondent paid an additional docket fee of P80,396.00. After the promulgation of the
decision of the respondent court on August 31, 1987 wherein private respondent was ordered to be
reassessed for additional docket fee, and during the pendency of this petition, and after the
promulgation of Manchester, on April 28, 1988, private respondent paid an additional docket fee of
P62,132.92. Although private respondent appears to have paid a total amount of P182,824.90 for the
docket fee considering the total amount of his claim in the amended and supplemental complaint
amounting to about P64,601,620.70, petitioner insists that private respondent must pay a docket fee of
P257,810.49.

The principle in Manchester could very well be applied in the present case. The pattern and the intent to
defraud the government of the docket fee due it is obvious not only in the filing of the original complaint
but also in the filing of the second amended complaint.

However, in Manchester, petitioner did not pay any additional docket fee until] the case was decided by
this Court on May 7, 1987. Thus, in Manchester, due to the fraud committed on the government, this
Court held that the court a quo did not acquire jurisdiction over the case and that the amended
complaint could not have been admitted inasmuch as the original complaint was null and void.

In the present case, a more liberal interpretation of the rules is called for considering that, unlike
Manchester, private respondent demonstrated his willingness to abide by the rules by paying the
additional docket fees as required. The promulgation of the decision in Manchester must have had that
sobering influence on private respondent who thus paid the additional docket fee as ordered by the
respondent court. It triggered his change of stance by manifesting his willingness to pay such additional
docket fee as may be ordered.

Nevertheless, petitioners contend that the docket fee that was paid is still insufficient considering the
total amount of the claim. This is a matter which the clerk of court of the lower court and/or his duly
authorized docket clerk or clerk in-charge should determine and, thereafter, if any amount is found due,
he must require the private respondent to pay the same.

Thus, the Court rules as follows:

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of
the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of
the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee,
the court may allow payment of the fee within a reasonable time but in no case beyond the applicable
prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third party claims and similar pleadings,
which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court
may also allow payment of said fee within a reasonable time but also in no case beyond its applicable
prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading
and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in
the pleading, or if specified the same has been left for determination by the court, the additional filing
fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court or
his duly authorized deputy to enforce said lien and assess and collect the additional fee.
WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of Court of the court a quo is hereby
instructed to reassess and determine the additional filing fee that should be paid by private respondent
considering the total amount of the claim sought in the original complaint and the supplemental
complaint as may be gleaned from the allegations and the prayer thereof and to require private
respondent to pay the deficiency, if any, without pronouncement as to costs.

SO ORDERED.

RULE NO. 2
GENESIS INVESTMENT, INC., CEBU JAYA REALTY INC., and SPOUSES RHODORA and LAMBERT LIM,
Petitioners,
vs.
HEIRS of CEFERINO EBARASABAL,* NAMELY: ROGELIO EBARASABAL, SPOUSES LIGAYA E. GULIMLIM AND
JOSE GULIMLIM, SPOUSES VISITACION E. CONEJOS and ELIAS CONEJOS, BEN TEJERO, POCAS TEJERO,
GERTRUDES TEJERO, BANING HAYO, LACIO EBARASABAL and JULIETA EBARASABAL; HEIRS OF FLORO
EBARASABAL, namely: SOFIA ABELONG, PEPITO EBARASABAL AND ELPIDIO EBARASABAL; HEIRS OF
LEONA EBARASABAL- APOLLO, namely: SILVESTRA A. MOJELLO and MARCELINO APOLLO; HEIRS OF
PEDRO EBARASABAL, namely: BONIFACIO EBARASABAL, SERGIO EBARASABAL and JAIME EBARASABAL;
HEIRS of ISIDRO EBARASABAL, NAMELY: SPOUSES CARLOSA E. NUEVO and FORTUNATO NUEVA;** HEIRS
of BENITO EBARASABAL, namely: PAULO BAGAAN, SPOUSES CATALINA A. MARIBAO and RENE MARIBAO,
VICENTE ABRINICA and PATRON EBARASABAL; HEIRS of JULIAN EBARASABAL, NAMELY: ALFREDO
BAGAAN, JUAN BAGAAN, AVELINO BAGAAN, FERDINAND BAGAAN, MAURO BAGAAN, SPOUSES ROWENA
B. LASACA and FRANCISCO LACASA,*** SPOUSES MARIA B. CABAG and EMILIO CABAG and ESTELITA
BAGAAN, all being represented herein by VICTOR MOJELLO, FEDERICO BAGAAN and PAULINO
EBARASABAL, as their Attorneys-in-Fact, Respondents.

G.R. No. 181622 November 20, 2013

DECISION
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to
reverse and set aside the Decision1 and Resolution,2 dated July 11, 2007 and January 10, 2008,
respectively, of the Court of Appeals (CA) in CA-G.R. CEB-SP No. 01017.

The antecedents of the case are as follows:

On November 12, 2003, herein respondents filed against herein petitioners a Complaint3 for Declaration
of Nullity of Documents, Recovery of Shares, Partition, Damages and Attorney's Fees. The Complaint was
filed with the Regional Trial Court (RTC) of Barili, Cebu.

On August 5, 2004, herein petitioners filed a Motion to Dismiss4 contending, among others, that the RTC
has no jurisdiction to try the case on the ground that, as the case involves title to or possession of real
property or any interest therein and since the assessed value of the subject property does not exceed
₱20,000.00 (the same being only ₱11,990.00), the action falls within the jurisdiction of the Municipal
Trial Court (MTC).5
In its Order6 dated September 29, 2004, the RTC granted petitioners' Motion to Dismiss, holding as
follows:

xxxx

And while the prayer of the plaintiffs for the annulment of documents qualified the case as one
incapable of pecuniary estimation thus, rendering it cognizable supposedly by the second level courts
but considering that Republic Act No. 7691 expressly provides to cover "all civil actions" which phrase
understandably is to include those incapable of pecuniary estimation, like the case at bar, this Court is of
the view that said law really finds application here more so that the same case also "involves title to, or
possession of, real property, or any interest therein." For being so, the assessed value of the real
property involved is determinative of which court has jurisdiction over the case. And the plaintiffs
admitting that the assessed value of the litigated area is less than ₱20,000.00, the defendants are correct
in arguing that the case is beyond this Court's jurisdiction.7

Respondents filed a Motion for Partial Reconsideration,8 arguing that their complaint consists of several
causes of action, including one for annulment of documents, which is incapable of pecuniary estimation
and, as such, falls within the jurisdiction of the RTC.9

On March 17, 2005, the RTC issued an Order granting respondents' Motion for Partial Reconsideration
and reversing its earlier Order dated September 29, 2004. The RTC ruled, thus:

On the issue of want of jurisdiction, this court likewise finds to be with merit the contention of the
movants as indeed the main case or the primary relief prayed for by the movants is for the declaration of
nullity or annulment of documents which unquestionably is incapable of pecuniary estimation and thus
within the exclusive original jurisdiction of this court to try although in the process of resolving the
controversy, claims of title or possession of the property in question is involved which together with all
the other remaining reliefs prayed for are but purely incidental to or as a consequence of the foregoing
principal relief sought.10

Petitioners filed a Motion for Reconsideration,11 but the RTC denied it in its Order dated June 23, 2005.

Aggrieved, petitioners filed a petition for certiorari with the CA. However, the CA dismissed the petition
via its assailed Decision dated July 11, 2007, holding that the subject matter of respondents' complaint is
incapable of pecuniary estimation and, therefore, within the jurisdiction of the RTC, considering that the
main purpose in filing the action is to declare null and void the documents assailed therein.12

Petitioners' Motion for Reconsideration was, subsequently, denied in the CA Resolution dated January
10, 2008.

Hence, the instant petition for review on certiorari raising the sole issue, to wit:

Whether or not the Honorable Court of Appeals gravely erred in concluding that the Regional Trial Court,
Branch 60 of Barili, Cebu has jurisdiction over the instant case when the ALLEGATIONS IN THE
COMPLAINT clearly shows that the main cause of action of the respondents is for the Recovery of their
Title, Interest, and Share over a Parcel of Land, which has an assessed value of ₱11,990.00 and thus,
within the jurisdiction of the Municipal Trial Court.13
The petition lacks merit.

For a clearer understanding of the case, this Court, like the CA, finds it proper to quote pertinent
portions of respondents' Complaint, to wit:

xxxx

1. Plaintiffs are all Filipino, of legal age, surviving descendants – either as grandchildren or great
grandchildren – and heirs and successors-in-interest of deceased Roman Ebarsabal, who died on 07
September 1952 x x x

xxxx

8. During the lifetime of Roman Ebarsabal, he acquired a parcel of land situated in Basdaku, Saavedra,
Moalboal, Cebu, x x x.

xxxx

with a total assessed value of ₱2,890.00 x x x. However, for the year 2002, the property was already
having (sic) a total assessed value of ₱11,990.00 x x x.

9. Upon the death of said Roman Ebarsabal, his eight (8) children named in par. 7 above, became co-
owners of his above-described property by hereditary succession; taking peaceful possession and
enjoyment of the same in fee simple pro indiviso, paying the real estate taxes thereon and did not
partition the said property among themselves until all of them likewise died, leaving, however, their
respective children and descendants and/or surviving heirs and successors-in-interest, and who are now
the above-named plaintiffs herein;

10. The plaintiffs who are mostly residents in (sic) Mindanao and Manila, have just recently uncovered
the fact that on 28th January 1997, the children and descendants of deceased Gil Ebarsabal, namely:
Pelagio, Hipolito, Precela, Fructuosa, Roberta, Florentino, Erlinda, Sebastian, Cirilo, all surnamed
Ebarsabal, have executed among themselves a Deed of Extrajudicial Settlement with Sale of Roman
Ebarsabal's entire property described above, by virtue of which they allegedly extrajudicially settled the
same and, for ₱2,600,000.00 – although only the sum of ₱950,000.00 was reflected in their Deed of Sale
for reason only known to them, they sold the whole property to defendants Genesis Investment Inc.
represented by co-defendant Rhodora B. Lim, the wife of Lambert Lim, without the knowledge,
permission and consent of the plaintiffs who are the vendors' co-owners of the lot in question, x x x.

11. Surprisingly, however, the defendant Genesis managed to have the Tax Declaration of the property
issued in the name of co-defendant Cebu Jaya Realty Incorporated, a firm which, as already intimated
above, is also owned by Spouses Lambert and Rhodora B. Lim, instead of in the name of Genesis
Investment, Incorporated, which is actually the vendee firm of the lot in question.

xxxx

Hence, the reason why Cebu Jaya Realty, Incorporated is joined and impleaded herein as a co-defendant.
12. Without the participation of the plaintiffs who are co-owners of the lot in question in the
proceedings, the aforementioned extrajudicial settlement with sale cannot be binding upon the plaintiff-
co-owners.

13. Further, where as in this case, the other heirs who are the plaintiffs herein, did not consent to the
sale of their ideal shares in the inherited property, the sale was only to be limited to the pro indiviso
share of the selling heirs.

xxxx

14. By representation, the plaintiffs, are therefore, by law, entitled to their rightful shares from the estate
of the deceased Roman Ebarsabal consisting of seven (7) shares that would have been due as the shares
of seven (7) other children of Roman Ebarsabal who are also now deceased, namely: Ceferino, Floro,
Leona, Pedro, Isidoro, Julian and Benito, all surnamed Ebarsabal.

15. The defendants who had prior knowledge of the existence of the other heirs who are co-owners of
the vendors of the property they purchased, had unlawfully acted in bad faith in insisting to buy the
whole property in co-ownership, only from the heirs and successors-in-interest of deceased Gil
Ebarsabal, who is only one (1) of the eight (8) children of deceased Roman Ebarsabal, and without
notifying thereof in whatever manner the plaintiffs who are the heirs and successors-in-interest of the
other co-owners of the property-in-question; thus, have compelled the plaintiffs herein to file this
instant case in court to protect their interests, x x x.

xxxx

PRAYER

WHEREFORE, in view of all the foregoing, it is most respectfully prayed of this Honorable Court that,
after due notice and hearing, judgment shall be rendered in favor of the plaintiffs, as follows, to wit:

1 – Declaring as null and void and not binding upon the plaintiffs, the following documents to wit:

(a) Deed of Extrajudicial Settlement with Sale executed by and between the heirs of deceased Gil
Ebarsabal headed by Pedro Ebarsabal, and Genesis Investment, Inc., represented by Rhodora Lim, dated
28th of January, 1997, marked as Annex-A;

(b) Memorandum of Agreement executed between Pedro Ebarsabal and Genesis Investment, Inc.,
represented by Rhodora Lim dated 27 January, which document is notarized;

(c) Tax Declaration of Real Property issued to Cebu Jaya Realty, Inc., marked as Annex-D;

2 – Ordering the defendants to make partition of the property in litigation with the plaintiffs into eight
(8) equal shares; to get one (1) share thereof, which is the only extent of what they allegedly acquired by
purchase as mentioned above, and to transfer, restore or reconvey and deliver to the plaintiffs, seven (7)
shares thereof, as pertaining to and due for the latter as the heirs and successors-in-interest of the seven
(7) brothers and sister of deceased Gil Ebarsabal already named earlier in this complaint;

xxxx
Further reliefs and remedies just and equitable in the premises are also herein prayed for.

x x x x14

It is true that one of the causes of action of respondents pertains to the title, possession and interest of
each of the contending parties over the contested property, the assessed value of which falls within the
jurisdiction of the MTC. However, a complete reading of the complaint would readily show that, based
on the nature of the suit, the allegations therein, and the reliefs prayed for, the action is within the
jurisdiction of the RTC.

As stated above, it is clear from the records that respondents' complaint was for "Declaration of Nullity
of Documents, Recovery of Shares, Partition, Damages and Attorney's Fees." In filing their Complaint
with the RTC, respondents sought to recover ownership and possession of their shares in the disputed
parcel of land by questioning the due execution and validity of the Deed of Extrajudicial Settlement with
Sale as well as the Memorandum of Agreement entered into by and between some of their co-heirs and
herein petitioners. Aside from praying that the RTC render judgment declaring as null and void the said
Deed of Extrajudicial Settlement with Sale and Memorandum of Agreement, respondents likewise
sought the following: (1) nullification of the Tax Declarations subsequently issued in the name of
petitioner Cebu Jaya Realty, Inc.; (2) partition of the property in litigation; (3) reconveyance of their
respective shares; and (3) payment of moral and exemplary damages, as well as attorney's fees, plus
appearance fees.1âwphi1

Clearly, this is a case of joinder of causes of action which comprehends more than the issue of partition
of or recovery of shares or interest over the real property in question but includes an action for
declaration of nullity of contracts and documents which is incapable of pecuniary estimation.15

As cited by the CA, this Court, in the case of Singson v. Isabela Sawmill,16 held that:

In determining whether an action is one the subject matter of which is not capable of pecuniary
estimation, this Court has adopted the criterion of first ascertaining the nature of the principal action or
remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of
pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts of first instance
would depend on the amount of the claim. However, where the basic issue is something other than the
right to recover a sum of money, where the money claim is purely incidental to, or a consequence of, the
principal relief sought, this Court has considered such actions as cases where the subject of the litigation
may not be estimated in terms of money, and are cognizable by courts of first instance [now Regional
Trial Courts].17

This rule was reiterated in Russell v. Vestil18 and Social Security System v. Atlantic Gulf and Pacific
Company of Manila Inc.19

Contrary to petitioners contention, the principal relief sought by petitioners is the nullification of the
subject Extrajudicial Settlement with Sale entered into by and between some of their co-heirs and
respondents, insofar as their individual shares in the subject property are concerned. Thus, the recovery
of their undivided shares or interest over the disputed lot, which were included in the sale, simply
becomes a necessary consequence if the above deed is nullified. Hence, since the principal action sought
in respondents Complaint is something other than the recovery of a sum of money, the action is
incapable of pecuniary estimation and, thus, cognizable by the RTC.20 Well entrenched is the rule that
jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations in
the complaint and the character of the relief sought, irrespective of whether the party is entitled to all or
some of the claims asserted.21

Moreover, it is provided under Section 5 (c), Rule 2 of the Rules of Court that where the causes of action
are between the same parties but pertain to different venues or jurisdictions, the joinder may be
allowed in the RTC provided one of the causes of action falls within the jurisdiction of said court and the
venue lies therein. Thus, as shown above, respondents complaint clearly falls within the jurisdiction of
the RTC.

WHEREFORE, the petition is DENIED. The Decision and Resolution dated July 11, 2007 and January 10,
2008, respectively, of the Court of Appeals in CA-G.R. CEB-SP No. 01017 are AFFIRMED.

SO ORDERED.

RULE NO. 3
RAMON A. GONZALES, petitioner, vs. PHILIPPINE AMUSEMENT AND GAMING CORPORATION, SPORTS
AND GAMES ENTERTAINMENT CORPORATION, BEST WORLD GAMING AND ENTERTAINMENT
CORPORATION, BELLE JAI-ALAI CORPORATION, and FILIPINAS GAMING ENTERTAINMENT TOTALIZATOR
CORPORATION, respondents.

[G. R. No. 144891. May 27, 2004]

DECISION
At bar is a special civil action for prohibition assailing the constitutionality of the creation of the
Philippine Amusement and Gaming Corporation (PAGCOR) as well as the grant of franchises by PAGCOR
to 1) Sports and Games Entertainment Corporation (SAGE) to engage in internet gambling, 2) Best World
Gaming and Entertainment Corporation (BEST WORLD) to engage in computerized bingo gaming, and 3)
Belle Jai-alai Corporation (BELLE) and Filipinas Gaming Entertainment Totalizator Corporation (FILGAME)
to engage in jai-alai operations.

Ramon A. Gonzales, as a citizen, taxpayer and member of the Philippine Bar, filed on September 28, 2000
the instant Petition[1] as a class suit under Section 12, Rule 3 of the Rules of Court[2] seeking to restrain
PAGCOR from continuing its operations and prohibit it and its co-respondents from enforcing: (1) the
Grant of an Authority and Agreement for the Operation of Sports Betting and Internet Gambling[3]
executed between PAGCOR and SAGE; (2) the Grant of Authority to Operate Computerized Bingo
Games[4] between PAGCOR and BEST WORLD; and (3) the Agreement[5] among PAGCOR, BELLE and
FILGAME to conduct jai-alai operations.

In compliance with this Courts Resolution of October 18, 2000, respondents filed their respective
comments on the petition, to which petitioner filed corresponding replies.
In Del Mar v. Phil. Amusement and Gaming Corp., et al.,[6] this Court, by Decision of November 29, 2000,
enjoined PAGCOR, BELLE, and FILGAME from managing, maintaining and operating jai-alai games, and
from enforcing the agreement entered into by them for that purpose. [7]

Their motions for reconsideration of said decision in Del Mar having been denied,[8] PAGCOR, BELLE and
FILGAME filed motions for clarification which this Court, by Resolution of August 24, 2001, resolved in
this wise:

WHEREFORE, . . . the Court resolves (a) to partially GRANT the motions for clarification insofar as it is
prayed that Philippine Amusement and Gaming Corporation (PAGCOR) has a valid franchise to, but only
by itself (i.e., not in association with any other person or entity) operate, maintain and/or manage the
game of jai-alai, and (b) to DENY the motions insofar as respondents would also seek a reconsideration
of the Courts decision of 29 November 2000 that has, since then, (i) enjoined the continued operation,
maintenance, and/or management of jai-alai games by PAGCOR in association with its co-respondents
Belle Jai-Alai Corporation and/or Filipinas Gaming Entertainment Totalizator Corporation and (ii) held to
be without force and effect the agreement of 17 June 1999 among said respondents.

SO ORDERED.[9] (Emphasis supplied)

Respondents BELLE and FILGAME thus filed on December 6, 2001 a Manifestation stating that:

1. Respondents [BELLE] and FILGAME were impleaded in the instant petition by reason of the
Agreement, dated 17 June 1999, which they executed with Philippine Amusement and Gaming
Corporation (PAGCOR).

2. However, the said Agreement was already declared invalid by the Supreme Court (en banc) in the
consolidated cases of Del Mar vs. PAGCOR, et al. [G.R. No. 138298] and Sandoval vs. PAGCOR, et al. [G.R.
No. 138982] through its Resolution dated 16 August 2001, which has already become final and
executory.

[3]. Considering that there is no more privity of contract between PAGCOR, [BELLE] and FILGAME, it is
respectfully submitted that the participation of respondents [BELLE] and FILGAME is no longer
warranted. Thus, there is no more necessity for respondents [BELLE] and FILGAME to file a
memorandum in the instant case.[10] (Emphasis supplied)

In its Comment on the petition at bar filed on March 29, 2001, BEST WORLD stated that it had been
unable to operate its bingo terminals and bingo games since its closure and shut down by PAGCOR and
DILG pursuant to a Memorandum dated October 19, 2000 issued by then President Joseph Ejercito
Estrada.[11] A copy of said Memorandum addressed to the Chairman of PAGCOR, which was attached to
BEST WORLDs Comment, reads:

MEMORANDUM FROM THE PRESIDENT

TO : The Chairman

Philippine Amusements and Gaming Corporation

(PAGCOR)
SUBJECT :CLOSURE OF CERTAIN PAGCOR

FACILITIES AND OUTLETS

DATE : 19 October 2000

You are hereby directed to take immediate steps to close down all PAGCOR facilities and outlets in Jai-
alai, on-line bingo and internet casino gaming.

For this purpose, you are authorized to secure the support of the Philippine National Police and all
concerned local government units.

I expect an initial report on the implementation of this directive, through the Executive Secretary, within
48 hours from receipt hereof.

For direct and immediate compliance.

(SGD. Joseph E. Estrada)[12] (Emphasis supplied)

This Court, by Resolution of August 13, 2001, granted the motion of Attys. Jose Salvador M. Rivera, E.
Hans S. Santos and Agnes H. Maranan of Rivera Santos and Maranan to withdraw as counsel for BEST
WORLD for the reason that despite diligent effort on its part, counsel has been unable to get in touch or
communicate with its principal client.[13]

The petition having been given due course by Resolution of September 19, 2001, the parties were
required to submit their respective Memoranda. Only respondents PAGCOR and SAGE submitted their
Memoranda, on December 6, 2001[14] and January 24, 2002,[15] respectively.

Gonzales having failed to file his Memorandum within the prescribed period, this Court which, in the
meantime, was informed of the alleged demise of Gonzales, required by Resolution of July 29, 2002 1)
respondents to confirm the death of Gonzales, and 2) the parties to manifest whether they were still
interested in prosecuting the petition, or whether supervening events had rendered it moot and
academic.[16]

On September 10, 2002, Attys. Manuel B. Imbong and Jo Aurea M. Imbong filed a Motion for
Substitution stating, among other things, that (1) Gonzales died on January 17, 2002; (2) his heirs are not
interested to pursue and prosecute the present special civil action or be substituted as petitioners
herein; and (3) the petition was instituted by Gonzales as a class suit in behalf of all Filipino citizens,
taxpayers and members of the Philippine Bar and, as such, survives his death. They thus pray that as they
are among the Filipino citizens, taxpayers and members of the Philippine Bar for whom the herein class
suit was instituted and are both capable of prosecuting the instant case, they be substituted as
petitioners in lieu of Gonzales and that they be given thirty days from notice within which to file their
memorandum.[17]

By Resolution of December 9, 2002, this Court required respondents to file their Comments on the
Motion for Substitution filed by Attys. Imbong and Imbong.
In their separate Comments,[18] respondents PAGCOR and SAGE both argue that, among others things,
movants Attys. Imbong and Imbong may not be substituted for Gonzales as the former are neither legal
representatives nor heirs of the latter within the purview of Section 16, Rule 3 of the Rules of Court
which reads:

Sec. 16. Death of party, duty of counsel. Whenever a party to a pending action dies, and the claim is not
thereby extinguished, it shall be the duty of his counsel to inform the court within thirty (30) days after
such death of the fact thereof, and to give the name and address of his legal representative or
representatives. Failure of counsel to comply with this duty shall be a ground for disciplinary action.

The heirs of the deceased may be allowed to be substituted for the deceased, without requiring the
appointment of an executor or administrator and the court may appoint a guardian ad litem for the
minor heirs.

The court shall forthwith order said legal representative or representatives to appear and be substituted
within a period of thirty (30) days from notice.

If no legal representative is named by the counsel for the deceased party, or if the one so named shall
fail to appear within the specified period, the court may order the opposing party, within a specified
time, to procure the appointment of an executor or administrator for the estate of the deceased and the
latter shall immediately appear for and on behalf of the deceased. The court charges in procuring such
appointment, if defrayed by the opposing party, may be recovered as costs. (16a, 17a) (Emphasis
supplied)

Respondents PAGCOR and SAGE further argue that neither Gonzales nor movants have substantiated the
allegation that the instant case is a class suit as defined under Section 12, Rule 3 of the Rules of Court.
Hence, so said respondents argue, the petition should be considered a personal action which was
extinguished with the death of Gonzales.

The criteria for determining whether an action survives the death of a plaintiff or petitioner was
elucidated upon in Bonilla v. Barcena[19] as follows:

x x x The question as to whether an action survives or not depends on the nature of the action and the
damage sued for. If the causes of action which survive the wrong complained [of] affects primarily and
principally property and property rights, the injuries to the person being merely incidental, while in the
causes of action which do not survive the injury complained of is to the person the property and rights of
property affected being incidental. x x x[20] (Emphasis supplied)

In claiming standing to bring the instant suit, Gonzales necessarily asserted a personal and substantial
interest in the case such that he has sustained or will sustain direct injury as a result of the governmental
act that is being challenged.[21] A reading of the allegations in the petition readily shows that Gonzales
alleged interest does not involve any claim to money or property which he could have assigned to
another or transmitted to his heirs. Rather, he claimed to be vindicating his rights as a citizen, taxpayer
and member of the bar. Being personal and non-transferable in nature, any interest that he might have
had in the outcome of this case cannot be deemed to have survived his death.

Movants argue, however, that unless the herein substitution is allowed, the citizens and taxpayers
represented by Gonzales in this class suit will be denied due process.[22] From this argument as well as
their averment that they are among the Filipino citizens and taxpayers and member[s] of the Philippine
Bar for whom the herein class suit was instituted and are interested to pursue this case,[23] it is evident
that movants are not asserting any right or interest transmitted to them by the death of Gonzales, but
are seeking to protect their own individual interests as members of the classes alleged to have been
represented by Gonzales.

As such, the more proper procedure would have been for them to file a Motion for Intervention as
expressly provided for in Section 12, Rule 3 of the Rules of Court, and not a Motion for Substitution
under Section 17 of the same rule. Ideally, such a Motion for Intervention should be filed before the
possibility of abatement is raised by the death of the named/representative party (or parties) to the class
suit; or where such is not possible, within a reasonable time from the death of the named or
representative party.

Considering that movants, as former law partners of Gonzales, could not have been unaware of the
latters death on January 17, 2002, respondents rightly question the timeliness of the Motion for
Substitution, it having been filed almost eight months thereafter, or only on September 10, 2002.

But even if this Court were to consider the Motion for Substitution as a seasonably filed Motion for
Intervention, still the instant petition would have to be dismissed for being moot and academic.

The Petition in essence raises two substantive issues. First, whether Presidential Decree (P.D.) 1869, as
amended (the PAGCOR Charter), is unconstitutional for having been issued pursuant to an unlawful
exercise of legislative power by then President Ferdinand E. Marcos. Second, whether the contracts
entered into by PAGCOR with its co-respondents are void for being undue delegations by PAGCOR of its
franchise[24] to operate and maintain gambling casinos, sports, gaming pools and the like.

The second issue has already been raised in the Del Mar cases,[25] this Court ruling that PAGCOR has a
valid franchise to, but only by itself (i.e., not in association with any other person or entity) operate,
maintain and/or manage the game of jai-alai, and that, consequently, the Agreement of June 17, 1999
among PAGCOR, BELLE and FILGAME was without force and effect. This ruling was recently reiterated in
Jaworski v. Phil. Amusement and Gaming Corp.[26] where this Court held:

In the case at bar, PAGCOR executed an agreement with SAGE whereby the former grants the latter the
authority to operate and maintain sports betting stations and Internet gaming operations. In essence,
the grant of authority gives SAGE the privilege to actively participate, partake and share PAGCORs
franchise to operate a gambling activity. The grant of franchise is a special privilege that constitutes a
right and a duty to be performed by the grantee. The grantee must not perform its activities arbitrarily
and whimsically but must abide by the limits set by its franchise and strictly adhere to its terms and
conditionalities. A corporation as a creature of the State is presumed to exist for the common good.
Hence, the special privileges and franchises it receives are subject to the laws of the State and the
limitations of its charter. There is therefore a reserved right of the State to inquire how these privileges
had been employed, and whether they have been abused.

While PAGCOR is allowed under its charter to enter into operators and/or management contracts, it is
not allowed under the same charter to relinquish or share its franchise, much less grant a veritable
franchise to another entity such as SAGE. PAGCOR can not delegate its power in view of the legal
principle of delegata potestas delegare non potest, inasmuch as there is nothing in the charter to show
that it has been expressly authorized to do so. In Lim v. Pacquing, the Court clarified that since ADC has
no franchise from Congress to operate the jai-alai, it may not so operate even if it has a license or permit
from the City Mayor to operate the jai-alai in the City of Manila. By the same token, SAGE has to obtain a
separate legislative franchise and not ride on PAGCORs franchise if it were to legally operate on-line
Internet gambling.

WHEREFORE, in view of all the foregoing, the instant petition is GRANTED. The Grant of Authority and
Agreement to Operate Sports Betting and Internet Gaming executed by PAGCOR in favor of SAGE is
declared NULL and VOID.

SO ORDERED.[27] (Emphasis supplied; citations omitted)

The first issue has likewise been rendered moot and academic.

In assailing the constitutionality of P.D. 1869, petitioner does not point to any inconsistency between it
and the present Constitution. Instead, it questions its issuance as an illegal exercise of legislative powers
by then President Marcos.

Thus, petitioner argues that: (1) P.D. 1416, which gives the President continuing authority to reorganize
the national government and is the basis of P.D. 1869, is an undue delegation to the President of the
legislative power to create public offices; (2) P.D. 1869 is an undue delegation of legislative power to the
President to create PAGCOR, a public corporation, and empowering it to grant franchises; (3)
Proclamation 1081 declaring martial law and authorizing the President to issue decrees is
unconstitutional, hence P.D. 1416 and P.D. 1869 issued pursuant thereto are likewise unconstitutional;
and (4) the 1973 Constitution was not validly ratified, hence it could not have legitimized Proclamation
1081.

Petitioners arguments come almost thirty years too late. As he himself was aware, the issues
surrounding the effectivity of Proclamation 1081, the force and effectivity of the 1973 Constitution, and
the former Presidents legislative powers under Martial Law and the 1973 Constitution were settled in
the cases of Javellana v. Executive Secretary,[28] Aquino, Jr. v. Enrile,[29] Aquino, Jr. v. Commission on
Elections,[30] and Legaspi v. Minister of Finance.[31] While legal scholars may continue to debate the
wisdom and reasoning of these decisions, their objective existence and historical impact on the
Philippine legal system cannot seriously be questioned.

Indeed, while petitioner made several poignant observations regarding the jurisprudence in the
foregoing cases, this Court is unable to accept his invitation to re-examine said cases for the simple
reason that the power conferred on it by the Constitution is limited to the adjudication of actual
controversies and the determination of whether a branch or instrumentality of the government has
acted with grave abuse of discretion amounting to lack or excess of jurisdiction.[32] Even with its
expanded jurisdiction, it is beyond the powers of this Court to re-write history.

To be sure, the People Power Revolution of 1986 put an end to both the dictatorship of Mr. Marcos and
the 1973 Constitution. At the same time, the ratification of the 1987 Constitution and the convening of
the first Congress on July 27, 1987 have restored the separation of legislative and executive powers.[33]
There is, therefore, no longer any occasion for this Court to pass upon the validity of the late dictators
exercise of lawmaking powers.

Furthermore, Section 3, Article XVIII of the Constitution expressly provides:

Sec. 3. All existing laws, decrees, executive orders, proclamations, letters of instructions, and other
executive issuances not inconsistent with this Constitution shall remain operative until amended,
repealed or revoked. (Emphasis supplied)

Since petitioner did not endeavor to show that P.D. 1869 itself is inconsistent with the Constitution, his
prayer that PAGCOR be enjoined from continuing its operations and doing acts in furtherance of its
existence must necessarily be denied.

Movants may derive some satisfaction in the knowledge that Gonzales prayer that respondents be
enjoined from enforcing the Agreement among PAGCOR, BELLE and FILGAME to conduct jai-alai
operations and the Grant of an Authority and Agreement for the Operation of Sports Betting and
Internet Gambling between PAGCOR and SAGE had been granted, albeit in the separate aforementioned
cases of Del Mar and Jaworski.

WHEREFORE, the instant Petition is hereby DISMISSED.

SO ORDERED.

RULE NO. 4

UNITED OVERSEAS BANK G.R. Nos. 159669 &

PHILS. (formerly WESTMONT 163521

BANK),

Petitioner, Present:

- versus -

ROSEMOORE MINING & DEVE- VELASCO, JR., JJ.

LOPMENT CORP. and DRA.

LOURDES PASCUAL,

Respondents. Promulgated:

DECISION
We resolve these two consolidated cases, which though with distinct courts of origin, pertain to issues
stemming from the same loan transaction.

The antecedent facts follow.

Respondent Rosemoor Mining and Development Corporation (Rosemoor), a Philippine mining
corporation with offices at Quezon City, applied for and was granted by petitioner Westmont Bank[1]
(Bank) a credit facility in the total amount of P80 million consisting of P50,000,000.00 as long term loan
and P30,000,000.00 as revolving credit line.[2]

To secure the credit facility, a lone real estate mortgage agreement was executed by Rosemoor and Dr.
Lourdes Pascual (Dr. Pascual), Rosemoors president, as mortgagors in favor of the Bank as mortgagee in
the City of Manila.[3] The agreement, however, covered six (6) parcels of land located in San Miguel,
Bulacan[4] (Bulacan properties), all registered under the name of Rosemoor,[5] and two (2) parcels of
land[6] situated in Gapan, Nueva Ecija (Nueva Ecija properties), owned and registered under the name of
Dr. Pascual.[7]

Rosemoor subsequently opened with the Bank four (4) irrevocable Letters of Credit (LCs) totaling
US$1,943,508.11.[8] To cover payments by the Bank under the LCs, Rosemoor proceeded to draw against
its credit facility and thereafter executed promissory notes amounting collectively to P49,862,682.50.[9]
Two (2) other promissory notes were also executed by Rosemoor in the amounts of P10,000,000.00 and
P3,500,000.00, respectively, to be drawn from its revolving credit line.[10]

Rosemoor defaulted in the payment of its various drawings under the LCs and promissory notes. In view
of the default, the Bank caused the extra-judicial foreclosure of the Nueva Ecija properties on 22 May
1998 and the Bulacan properties on 10 August 1998. The Bank was the highest bidder on both occasions.
[11]

On 8 October 1999, the Bank caused the annotation of the Notarial Certificate of Sale covering the
Nueva Ecija properties on the certificates of title concerned. Later, on 16 March 2001, the Notarial
Certificate of Sale covering the Bulacan properties was annotated on the certificates of title of said
properties.[12]

The foregoing facts led to Rosemoors filing of separate complaints against the Bank, one before the
Regional Trial Court of Manila (Manila RTC) and the other before the Regional Trial Court of Malolos,
Bulacan (Malolos RTC).

The Manila Case (G.R. No. 163521)

On 5 August 1998, Rosemoor and Dr. Pascual filed a Complaint, originally captioned as one for Damages,
Accounting and Release of Balance of Loan and Machinery and for Injunction before the Manila RTC.[13]
Impleaded as defendants were the Bank and Notary Public Jose Sineneng, whose office was used to
foreclose the mortgage.[14] The complaint was twice amended, the caption eventually reflecting an
action for Accounting, Specific Performance and Damages.[15] Through the amendments, Pascual was
dropped as a plaintiff while several officers of the Bank were included as defendants.[16]

The Bank moved for the dismissal of the original and amended complaints on the ground that the venue
had been improperly laid.[17] The motion was denied by the trial court through an Omnibus Resolution
dated 24 January 2000.[18]
Rosemoors prayer in the Second Amended Complaint, which was filed in November of 1999, reads as
follows:

WHEREFORE, plaintiff Rosemoor Mining & Development Corporation respectfully prays that, after trial of
the issues, this court promulgate judgment

1. Directing Westmont to render an accounting of the loan account of Rosemoor under the Long Term
Loan Facility and the Revolving Credit Line at least up to the dates of foreclosure of Rosemoors
mortgaged properties on May 22, 1998 and August 18, 1998, showing among others (a) the sums of
money paid by Rosemoor or otherwise debited from its deposit account in payment of the loans it had
obtained from Westmont to cover the cost of the machinery to be imported under the Unpaid LCs and
under LC No. 97-058 for the tiling plant, as well as for working capital, and (b) all interests, penalties and
charges imposed on the loans pertaining to the Unpaid LCs and LC No. 97-058 and for which Westmont
had foreclosed Rosemoors and Dra. Pascuals real estate mortgage; (c) the amount of import and customs
duties, demurrage, storage and other fees which Rosemoor had paid or which was otherwise debited
from Rosemoors deposit account, in connection with the importation of the tiling plant and as a
consequence of the non-release thereof by Westmont;

2. Ordering all the defendants jointly and severally to pay to Rosemoor, by way of actual damages, the
dollar equivalent of the amounts in (1) (a), (b) and (c) at the exchange rate prevailing at the time of the
opening of the LCs;

3. Ordering defendants jointly and severally to pay to Rosemoor actual damages for operational losses
suffered by Rosemoor due to its failure to use the tiling plaint which Westmont had refused to release to
Rosemoor, in such amount as may be proven at the trial;

4. Directing the defendants jointly and severally to pay, by way of correction for the public good,
exemplary damages in the amount of P 500,000.00 each;

5. Ordering defendants jointly and severally to indemnify Rosemoor in the sum of P350,000.00,
representing attorneys fees and litigation expenses incurred by Rosemoor for the protection and
enforcement of its rights and interests.

Plaintiff prays for further and other relief as may be just and equitable under the circumstances. [19]

On 15 August 2002, the Bank filed another motion to dismiss the Second Amended Complaint on the
ground of forum-shopping since, according to it, Rosemoor had filed another petition earlier on 11
March 2002 before the Malolos RTC.[20] The Bank contended that as between the action before the
Manila RTC and the petition before the Malolos RTC, there is identity of parties, rights asserted, and
reliefs prayed for, the relief being founded on the same set of facts. The Bank further claimed that any
judgment that may be rendered in either case will amount to res judicata in the other case.[21] Still, the
Manila RTC denied the motion to dismiss.[22] It also denied the Banks motion for reconsideration of the
order of denial.[23
The Bank challenged the Manila RTCs denial of the Banks second motion to dismiss before the Court of
Appeals, through a petition for certiorari. The appellate court dismissed the petition in a Decision dated
26 February 2004.[24] The Bank filed a motion for reconsideration which, however, was denied through
a Resolution dated 30 April 2004.[25]

In the Petition for Review on Certiorari in G.R. No. 163521, the Bank argues that the Court of Appeals
erred in holding that no forum-shopping attended the actions brought by Rosemoor.[26]

The Malolos Case (G.R. No. 159669)

After the complaint with the Manila RTC had been lodged, on 11 March 2002, Rosemoor and Dr. Pascual
filed another action against the Bank, this time before the Malolos RTC. Impleaded together with the
Bank as respondent was the Register of Deeds for the Province of Bulacan in the Petition for Injunction
with Damages, with Urgent Prayer for Temporary Restraining Order and/or Preliminary Injunction.[27]

In the Malolos case, Rosemoor and Dr. Pascual alleged that the redemption period for the Bulacan
properties would expire on 16 March 2002. They claimed that the threatened consolidation of titles by
the Bank is illegal, stressing that the foreclosure of the real estate mortgage by the Bank was fraudulent
and without basis,[28] as the Bank had made them sign two blank forms of Real Estate Mortgage and
several promissory notes also in blank forms. It appeared later, according to Rosemoor and Dr. Pascual,
that the two Real Estate Mortgage blank forms were made as security for two loans, one for P80 million
and the other for P48 million, when the total approved loan was only for P80 million. The Bank later
released only the amount of P10 million out of the P30 million revolving credit line, to the prejudice of
Rosemoor, they added.[29]

The Petitions prayer reads as follows:

WHEREFORE, premises considered, it is most respectfully prayed that this Honorable Court

1. Issue ex-parte a temporary restraining order before the matter could be heard on notice to restrain
and enjoin respondent BANK from proceeding with its threatened consolidation of its titles over the
subject properties of petitioner Rosemoor in San Miguel, Bulacan covered by TCT Nos. 42132; 42133;
42134; 42135; 42136 and RT 34569 (T-222448) on March 16, 2002 or at any time thereafter; that the
respondent Register of Deeds for the Province of Bulacan be enjoined and restrained from registering
any document(s) submitted and/or to be submitted by respondent BANK consolidating its titles over the
above-named properties of petitioner Rosemoor in San Miguel, Bulacan; and likewise, that the Register
of Deeds for the province of Bulacan be restrained and enjoined from canceling the titles of Rosemoor
over its properties, namely, TCT Nos. 42132; 42133; 42134; 42135; 42136 and RT 34569 (T-222448);

2. That after due notice, a writ of preliminary injunction be issued upon the posting of a bond in such
amount as may be fixed by this Court;

3. That after due hearing and trial, judgment be rendered in favor of petitioners and against respondent
BANK
a. Permanently enjoining respondent BANK from proceeding with the consolidation of its titles to
the subject properties of Rosemoor covered by TCT Nos. 42132; 42133; 42134; 42135; 42136 and RT
34569 (T-222448); and permanently restraining respondent Register of Deeds for the Province of Bulacan
from registering any document(s) submitted and/or to be submitted by respondent BANK consolidating
its titles over the above-named properties of petitioner Rosemoor in San Miguel, Bulacan; and likewise,
that the Register of Deeds for the province of Bulacan be restrained and enjoined from cancelling the
titles of Rosemoor over its properties, namely, TCT Nos. 42132; 42133; 42134; 42135; 42136 and RT
34569 (T-222448);

b. Declaring the foreclosures of Real Estate Mortgages on the properties of petitioners Rosemoor and
Dra. Pascual to be null and void;

c. Recognizing the ownership in fee simple of the petitioners over their properties above-mentioned;

d. Awarding to petitioners the damages prayed for, including attorneys fees and costs and expenses of
litigation.

Petitioners pray for such other reliefs and remedies as may be deemed just and equitable in the
premises.[30]

As it did before the Manila RTC, the Bank filed a motion to dismiss on 26 March 2002 on the ground that
Rosemoor had engaged in forum-shopping, adverting to the pending Manila case.[31] The Bank further
alleged that Dr. Pascual has no cause of action since the properties registered in her name are located in
Nueva Ecija. The Malolos RTC denied the motion to dismiss in an Order dated 13 May 2002.[32] In the
same Order, the Malolos RTC directed the Bank to file its answer to the petition within five (5) days from
notice.[33]

Despite receipt of the Order on 21 May 2002, the Bank opted not to file its answer as it filed instead a
motion for reconsideration on 5 June 2002.[34] Meanwhile, Rosemoor and Dr. Pascual moved to declare
the Bank in default for its failure to timely file its answer.[35] On 10 September 2002, the Malolos RTC
issued an order denying the Banks motion for reconsideration for lack of merit and at the same time
declaring the Bank in default for failure to file its answer.[36]

Hence, the Bank filed a second petition for certiorari before the Court of Appeals, where it assailed the
Orders dated 13 May 2002 and 10 September 2002 of the Malolos RTC. During the pendency of this
petition for certiorari, the Malolos RTC decided the Malolos case on the merits in favor of Rosemoor.[37]
The decision in the Malolos case was also appealed to the Court of Appeals.[38] Based on these
developments, the appellate court considered the prayer for preliminary injunction as moot and
academic and proceeded with the resolution of the petition, by then docketed as CA-G.R. SP No.73358,
on the merits. The appellate court dismissed the petition in a Decision dated 20 June 2003.[39]
Undaunted, the Bank filed the petition in G.R. No. 159669 before this Court.

The two petitions before this Court have been consolidated. We find one common issue in G.R. No.
159669 and G.R. No. 163521 whether Rosemoor committed forum-shopping in filing the two cases
against the Bank. The other issues for resolution were raised in G.R. No. 159669, pertaining as they do to
the orders issued by the Malolos RTC. These issues are whether the action to invalidate the foreclosure
sale was properly laid with the Malolos RTC even as regards the Nueva Ecija properties; whether it was
proper for the Malolos RTC to declare the Bank in default; and whether it was proper for the Malolos
RTC to deny the Banks motion to dismiss through a minute resolution.[40]

Forum-Shopping

The central issue in these consolidated cases is whether Rosemoor committed forum-shopping in filing
the Malolos case during the pendency of the Manila case.

The essence of forum-shopping is the filing of multiple suits involving the same parties for the same
cause of action, either simultaneously or successively, for the purpose of obtaining a favorable judgment.
[41] The elements of forum-shopping are: (a) identity of parties, or at least such parties as represent the
same interests in both actions; (b) identity of rights asserted and reliefs prayed for, the reliefs being
founded on the same facts; and (c) the identity with respect to the two preceding particulars in the two
cases is such that any judgment rendered in the pending cases, regardless of which party is successful,
amount to res judicata in the other case.[42]

As to the existence of identity of parties, several bank officers and employees impleaded in the
Amended Complaint in the Manila case were not included in the Malolos case. These bank officers and
employees were sued in Manila in their personal capacity. A finding of negligence or bad faith in their
participation in the preparation and execution of the loan agreement would render them personally
liable. Dr. Pascual, on the other hand, was included as petitioner only in the Malolos case because it
involved properties registered in her name. As correctly pointed out by the Court of Appeals, Dr. Pascual
is a real party-in-interest in the Malolos case because she stood to benefit or suffer from the judgment in
the suit. Dr. Pascual, however, was not included as plaintiff in the Manila case because her interest
therein was not personal but merely in her capacity as officer of Rosemoor.

As regards the identity of rights asserted and reliefs prayed for, the main contention of Rosemoor in the
Manila case is that the Bank had failed to deliver the full amount of the loan, as a consequence of which
Rosemoor demanded the remittance of the unreleased portion of the loan and payment of damages
consequent thereto.[43] In contrast, the Malolos case was filed for the purpose of restraining the Bank
from proceeding with the consolidation of the titles over the foreclosed Bulacan properties because the
loan secured by the mortgage had not yet become due and demandable.[44] While the right asserted in
the Manila case is to receive the proceeds of the loan, the right sought in the Malolos case is to restrain
the foreclosure of the properties mortgaged to secure a loan that was not yet due.

Moreover, the Malolos case is an action to annul the foreclosure sale that is necessarily an action
affecting the title of the property sold.[45] It is therefore a real action which should be commenced and

tried in the province where the property or part thereof lies.[46] The Manila case, on the other hand, is a
personal action[47] involving as it does the enforcement of a contract between Rosemoor, whose office
is in Quezon City, and the Bank, whose principal office is in Binondo, Manila.[48] Personal actions may be
commenced and tried where the plaintiff or any of the principal plaintiffs resides, or where the
defendants or any of the principal defendants resides, at the election of the plaintiff.[49]

It was subsequent to the filing of the Manila case that Rosemoor and Dr. Pascual saw the need to secure
a writ of injunction because the consolidation of the titles to the mortgaged properties in favor of the
Bank was in the offing. But then, this action can only be commenced where the properties, or a portion
thereof, is located. Otherwise, the petition for injunction would be dismissed for improper venue.
Rosemoor, therefore, was warranted in filing the Malolos case and cannot in turn be accused of forum-
shopping.

Clearly, with the foregoing premises, it cannot be said that respondents committed forum-shopping.

Action to nullify foreclosure sale ofmortgaged properties in Bulacan and Nueva Ecija before the Malolos
RTC

The Bank challenges the Malolos RTCs jurisdiction over the action to nullify the foreclosure sale of the
Nueva Ecija properties along with the Bulacan properties. This question is actually a question of venue
and not of jurisdiction,[50] which if improperly laid, could lead to the dismissal of the case.[51]

The rule on venue of real actions is provided in Section 1, Rule 4 of the 1997 Rules of Civil Procedure,
which reads in part:

Section 1. Venue of Real Actions. Actions affecting title to or possession of real property, or interest
therein, shall be commenced and tried in the proper court which has jurisdiction over the area wherein
the real property involved, or a portion thereof, is situated.

The venue of the action for the nullification of the foreclosure sale is properly laid with the Malolos RTC
although two of the properties together with the Bulacan properties are situated in Nueva Ecija.
Following the above-quoted provision of the Rules of Court, the venue of real actions affecting
properties found in different provinces is determined by the singularity or plurality of the transactions
involving said parcels of land. Where said parcels are the object of one and the same transaction, the
venue is in the court of any of the provinces wherein a parcel of land is situated.[52]

Ironically, the Bank itself correctly summarized the applicable jurisprudential rule in one of the pleadings
before the Court.[53] Yet the Bank itself has provided the noose on which it would be hung. Resorting to
deliberate misrepresentation, the Bank stated in the same pleading that the Bulacan and Nueva Ecija
[p]roperties were not the subject of one single real estate mortgage contract.[54]

In the present case, there is only one proceeding sought to be nullified and that is the extra-judicial
mortgage foreclosure sale. And there is only one initial transaction which served as the basis of the
foreclosure sale and that is the mortgage contract. Indeed, Rosemoor, through Dr. Pascual, executed a
lone mortgage contract where it undertook to mortgage the land/real property situated in Bulacan and
Nueva Ecija, with the list of mortgaged properties annexed thereto revealing six (6) properties in Bulacan
and two (2) properties in Nueva Ecija subject of the mortgage.

This apparent deliberate misrepresentation cannot simply pass without action. The real estate mortgage
form supplied to Rosemoor is the Banks standard pre-printed form. Yet the Bank perpetrated the
misrepresentation. Blame must be placed on its doorstep. But as the Banks pleading was obviously
prepared by its counsel, the latter should also share the blame. A lawyer shall not do any falsehood, nor
consent to the doing of any in court; nor shall he mislead, or allow the Court to be misled by any artifice.
[55] Both the Banks president and counsel should be made to explain why they should not be sanctioned
for contempt of court.

Propriety of Default Order

The Court of Appeals did not touch upon the soundness or unsoundness of the order of default although
it is one of the orders assailed by the Bank. However, the silence of the appellate court on the issue does
not improve the legal situation of the Bank.

To recall, the Bank filed a motion to dismiss the Malolos case. The Malolos RTC denied the motion in an
Order dated 13 May 2002.[56] In the same Order, the Malolos RTC directed the Bank to file its answer to
the petition within five (5) days from the receipt of the Order.[57] The Bank received a copy of the Order
on 21 May 2002. Instead of filing an answer, the Bank filed a motion for reconsideration but only on 5
June 2002.[58]

The motion for reconsideration[59] could not have tolled the running of the period to answer for two
reasons. One, it was filed late, nine (9) days after the due date of the answer. Two, it was a mere rehash
of the motion to dismiss; hence, pro forma in nature. Thus, the Malolos RTC did not err in declaring the
Bank in default.

Deviation from the Prescribed

Content of an Order

Denying a Motion to Dismiss

Finally, the Bank questions the Malolos RTCs Order dated 13 May 2002 denying its motion to dismiss on
the ground that it is contrary to law and jurisprudence because it had failed to apprise the Bank of the
legal basis for the denial.

The Bank adverts to the content requirement of an order denying a motion to dismiss prescribed by Sec.
3, Rule 16 of the Rules of Court. The Court in Lu Ym v. Nabua[60] made a thorough discussion on the
matter, to quote:

Sec. 3, Rule 16 of the Rules provides:

Sec. 3. Resolution of motion.After the hearing, the court may dismiss the action or claim, deny the
motion or order the amendment of the pleading.

The court shall not defer the resolution of the motion for the reason that the ground relied upon is not
indubitable.

In every case, the resolution shall state clearly and distinctly the reasons therefor.

xxxx

Further, it is now specifically required that the resolution on the motion shall clearly and distinctly state
the reasons therefor. This proscribes the common practice of perfunctorily dismissing the motion for lack
of merit. Such cavalier dispositions can often pose difficulty and misunderstanding on the part of the
aggrieved party in taking recourse therefrom and likewise on the higher court called upon to resolve the
same, usually on certiorari.[61]

The questioned order of the trial court denying the motion to dismiss with a mere statement that there
are justiciable questions which require a full blown trial falls short of the requirement of Rule 16 set
forth above. Owing to the terseness of its expressed justification, the challenged order ironically suffers
from undefined breadth which is a hallmark of imprecision. With its unspecific and amorphous thrust,
the issuance is inappropriate to the grounds detailed in the motion to dismiss.

While the requirement to state clearly and distinctly the reasons for the trial courts resolutory order
under Sec. 3, Rule 16 of the Rules does call for a liberal interpretation, especially since jurisprudence
dictates that it is decisions on cases submitted for decision that are subject to the stringent
requirement of specificity of rulings under Sec. 1, Rule 36[62] of the Rules, the trial courts order in this
case leaves too much to the imagination. (Emphasis supplied.)[63]

The assailed order disposed of the motion to dismiss in this wise:

xxxx

After a careful scrutiny of the grounds cited in the Motion to Dismiss and the arguments en contra
contained in the Opposition thereto and finding the Motion to Dismiss to be not well taken as grounds
cited are not applicable to the case at bar, the Court hereby DENIES the instant Motion to Dismiss.

x x x x[64]

Clearly, the subject order falls short of the content requirement as expounded in Lu Ym v. Nabua. Despite
the aberration, however, the Bank was not misled, though it could have encountered difficulties or
inconvenience because of it. Comprehending, as it did, that the Malolos RTC did not share its position
that Rosemoor had engaged in forum-shopping, it went to great lengths to impress upon the Court of

Appeals that there was indeed forum-shopping on Rosemoors part. But the appellate court did not
likewise agree with the Bank as it soundly debunked the forum-shopping charge. In fact, the same
forum-shopping argument has been fully ventilated before the Court but we are utterly unimpressed as
we made short shrift of the argument earlier on. In the ultimate analysis, therefore, the trial courts
blunder may be overlooked as it proved to be harmless.

WHEREFORE, considering the foregoing, the Decision of the Court of Appeals in G.R. 163521 dated 26
February 2004 and in G.R No. 159669 dated 20 June 2003 are AFFIRMED. Costs against petitioner.
Petitioner, United Overseas Bank, Phils. and its counsel, Siguion Reyna Montecillo & Ongsiako Law
Offices, are given ten (10) days from notice to EXPLAIN why they should not be held in contempt of court
for making a misrepresentation before the Court as adverted to in this Decision.

SO ORDERED.
RULE 6

CHINA BANKING CORPORATION, G.R. SP. 143490

Petitioner,
- versus -

DOLORES PADILLA
February 2, 2007

DECISION

Via this petition for review under Rule 45 of the Rules of Court, petitioner China Banking Corporation
(CBC) seeks the annulment and setting aside of the Resolution[1] dated January 26, 2000 of the Court of
Appeals (CA), as reiterated in its Resolution of June 2, 2000,[2] denying due course to and dismissing
CBCs Petition for Certiorari (with Prayer for Issuance of Restraining Order/Preliminary Injunction) in CA-
G.R. SP No. 55795, entitled China Banking Corporation v. Hon. Jose R. Bautista, in his capacity as
Presiding Judge of the Regional Trial Court, Makati City, Branch 136, and Dolores Padilla, for petitioner's
failure to comply with the requirement of Section 3, Rule 46, of the 1997 Rules of Civil Procedure, as
amended.

The facts:

On December 22, 1997, in the Regional Trial Court (RTC) of Makati City, private respondent Dolores
Padilla, who had a checking account with the petitioner's branch at Tuguegarao, Cagayan filed a
complaint[3] for sum of money with damages against the petitioner. In her complaint, docketed as Civil
Case No. 97-3020 and raffled to now Branch 136 of the court, Padilla, as plaintiff, alleges the following
causes of action against the petitioner:

1. Erroneous deductions from her Current Account No. 164-001371-5 of the following:

a. The amount of P23,425.00 on March 4, 1997;

b. The amount of P10,000.00, P35,000.00 and P100,000.00 or a total of P168,425.00 on April 1, 1997;

c. The total amount of P4,540,000.00 without debit memos on different dates;

2. Erroneous payment of China Bank Check No. 47050 with the amount in words stated therein as
Eighteen Thousand Pesos only but the figures were written as P80,000.00, resulting in an alleged loss of
P62,000.00;

3. Erroneous debiting from her account of PVB -Tuguegarao Branch Check No. 6969 in the amount of
P20,000.00.

Prior to the filing of the complaint, petitioner bank audited the transactions involving the respondent's
checking account with its Tuguegarao branch and came to the conclusion that if the foregoing allegations
were true, the same were imputable to its branch manager Emelina T. Quitan, who, in violation of the
petitioners Code of Ethics and Operations Procedure and Policy Manual, exceeded her authority in the
performance of her duties as branch manager. Petitioner also found out that Quitan had committed the
following acts, prompting it to terminate the latters services on November 13, 1998:[4]

1. Allowing the unauthorized overdraft of the respondent in the total amount of P1,475,731.43.

2. Accommodating the overdrawn checks of respondent, i.e., CBC Check Nos. 120935 and 120938 for
P100,000.00 each, depositing and posting them as available despite knowledge that they were drawn
from insufficient funds in order to fund another depositor's CBC Check No. 116461.

3. Making good CBC Check No. 111459 drawn by respondent for P250,000.00 despite the fact that said
check was not sufficiently funded.

4. Granting bills purchased facility without approval of the petitioner.

5. Allowing fund transfers from client's accounts to other accounts in violation of the petitioners policy
prohibiting fund transfers between accounts not owned by the same party.

6. Defying the lawful order of her superior.

7. And other numerous acts and omissions.

Believing that there was sufficient cause to hold its branch manager liable to it by way of indemnity,
subrogation and contribution in respect to Padilla's complaint, petitioner filed with the trial court a
motion for leave of court to file a third-party complaint[5] against Quitan.

In its Order[6] of August 17, 1999, the trial court denied the motion on the ground that petitioner, as a
corporation, could act only through its employees and was responsible for the acts committed by them
in the discharge of their function, adding that Quitan's inclusion in the case was not proper and
whatever claims the petitioner may have had against her should be ventilated in another forum.
Petitioner moved for a reconsideration but to no avail.

From the adverse action of the trial court, petitioner went to the CA on a petition for certiorari,
docketed as CA-G.R. SP No. 55795.

In the herein challenged Resolution[7] dated January 26, 2000, the CA denied due course to and
dismissed the petition for petitioners failure to comply with Section 3, Rule 46, infra, of the 1997 Rules of
Civil Procedure, as amended, which mandates that certified true copies of the documents or pleadings
mentioned in the petition must be attached thereto. Partly says the CA in its assailed Resolution:

Except for the orders of the court a quo denying the motion for leave of court to file third-party
complaint dated July 26, 1999 and August 17, 1999 and the order dated September 20, 1999 clarifying
the above two (2) orders and denying the motion for reconsideration, other relevant documents
attached to the petition are plain photo copies and not certified copies pursuant to the Rules (Annexes
"D", p. 29; "E", p. 103; and "F", p. 133, Rollo).

There are also pertinent documents which were referred to but not appended to the petition, such as
petitioner's motion for reconsideration filed on August 20, 1999, the pre-trial order dated February 25,
1998, motion for consolidation, order dated March 11, 1999 granting the motion for consolidation, order
of inhibition dated April 21, 1998, motion for consolidation filed on May 25, 1998, and comment on the
motion for leave of court including the counter-comment/reply.

In time, petitioner filed a motion for reconsideration, thereunder explaining that its failure to adhere to
the rule was due to honest mistake and excusable negligence and was not meant, in any slightest
degree, to defy the mandate of the procedural rules. In the same motion, petitioner also maintained that
it had now fully complied with Section 3 of Rule 46 because certified true copies of the
documents/pleadings mentioned in its petition were already attached to its motion.

In its subsequent Resolution[8] of June 2, 2000, the CA denied the petitioner's motion for
reconsideration, explaining that the latters subsequent compliance, without any compelling reason for
its failure to do so in the first instance, did not warrant the reconsideration sought.

Hence, this recourse by the petitioner raising the following issues:[9]

WHETHER THE COURT A QUO ERRED IN ADAMANTLY REFUSING TO RECONSIDER ITS RESOLUTION OF
JANUARY 26, 2000 AND TO REINSTATE THE PETITION DESPITE COMPLIANCE BY PETITIONER WITH THE
REQUIREMENT IN SECTION 3, RULE 46 OF THE 1997 RULES OF CIVIL PROCEDURE.

II

WHETHER THE TRIAL COURT ACTED WITH GRAVE ABUSE OF DISCRETION IN DENYING PETITIONER'S
MOTION FOR LEAVE TO FILE THIRD PARTY COMPLAINT.

We DENY.

Section 3, Rule 46, of the 1997 Rules of Civil Procedure, as amended, provides:

SEC. 3. Contents and filing of petition; effect of non-compliance with requirements. xxx

xxx xxx xxx

It shall be filed in seven (7) clearly legible copies together with proof of service thereof on the
respondent with the original copy intended for the court indicated as such by the petitioner, and shall be
accompanied by a clearly legible duplicate original or certified true copy of the judgment, order,
resolution, or ruling subject thereof, such material portions of the record as are referred to therein, and
other documents relevant or pertinent thereto. xxx

xx xxx xxx
The failure of the petitioner to comply with any of the foregoing requirements shall be sufficient ground
for the dismissal of the petition. (Italics ours)
The above rule is clear. Failure to comply with the requirement that the petition shall be accompanied by
a certified true copy of the resolutions, orders or any rulings subject thereof is a sufficient ground for the
dismissal of the petition.

Petitioner contends that its failure to attach the required documents to its petition is due to honest
mistake and excusable negligence and that it was not meant to defy the mandate of the procedural rule.
In Sea Power Shipping Enterprises, Inc. v. Court of Appeals, et al.,[10] the Court had already held that
oversight and excusable negligence have become an all too familiar and ready excuse on the part of
lawyers remiss in their bounden duty to comply with established rules. Rules of procedure are tools
designed to promote efficiency and orderliness, as well as to facilitate attainment of justice, such that
strict adherence thereto is required. The application of the Rules may be relaxed only when rigidity
would result in a defeat of equity and substantial justice,[11] which is not true in this case.

Even assuming that the petition filed in CA-G.R. SP No. 55795 is sufficient in form, still the same is
dismissible there being no grave abuse of discretion committed by the trial court in issuing its order of
August 17, 1999 which denied the petitioners motion for leave of court to file third-party complaint
against its branch manager. Explicitly, Section 11, Rule 6, of the 1997 Rules of Civil Procedure, as
amended, provides:

SEC. 11. Third (fourth, etc.)-party complaint. A third (fourth, etc.)-party complaint is a claim that a
defending party may, with leave of court, file against a person not a party to the action, called the third
(fourth, etc.)-party defendant, for contribution, indemnity, subrogation or any other relief, in respect of
his opponents claim.

A third-party complaint is actually a complaint independent of, and separate and distinct from, the
plaintiffs complaint. Were it not for the above rule, such third-party complaint would have to be filed
independently and separately from the original complaint. The purpose is to avoid circuitry of action and
unnecessary proliferation of lawsuits and of disposing expeditiously in one litigation all the matters
arising from one particular set of facts.[12]

Be that as it may, trial courts are not especially enjoined by law to admit a third-party complaint. They
are vested with discretion to allow or disallow a party to an action to implead an additional party. Thus,
a defendant has no vested right to file a third-party complaint.[13]

In any event, whatever claim the petitioner may have against its branch manager may, as correctly ruled
by the trial court in its Order of August 17, 1999, still be enforced in a separate action. In short, the
denial of petitioner's motion for leave of court to file a third-party complaint against Quitan for whatever
claim for contribution, indemnity, subrogation or any other relief it may have against the latter vis a vis
the basic complaint of the private respondent in Civil Case No. 97-3020 is not lost.

WHEREFORE, the petition is DENIED and the challenged resolutions of the Court of Appeals in CA-G.R.
SP No. 55795 are AFFIRMED.

Costs against the petitioner.

SO ORDERED.
RULE 9
GEORGE KATON, petitioner, vs. MANUEL PALANCA JR., LORENZO AGUSTIN, JESUS GAPILANGO and JUAN
FRESNILLO, respondents.
[G.R. No. 151149. September 7, 2004]

DECISION

Where prescription, lack of jurisdiction or failure to state a cause of action clearly appear from the
complaint filed with the trial court, the action may be dismissed motu proprio by the Court of Appeals,
even if the case has been elevated for review on different grounds. Verily, the dismissal of such cases
appropriately ends useless litigations.

The Case

Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, assailing the December 8, 2000
Decision[2] and the November 20, 2001 Resolution[3] of the Court of Appeals in CA-GR SP No. 57496.
The assailed Decision disposed as follows:

Assuming that petitioner is correct in saying that he has the exclusive right in applying for the patent
over the land in question, it appears that his action is already barred by laches because he slept on his
alleged right for almost 23 years from the time the original certificate of title has been issued to
respondent Manuel Palanca, Jr., or after 35 years from the time the land was certified as agricultural
land. In addition, the proper party in the annulment of patents or titles acquired through fraud is the
State; thus, the petitioners action is deemed misplaced as he really does not have any right to assert or
protect. What he had during the time he requested for the re-classification of the land was the privilege
of applying for the patent over the same upon the lands conversion from forest to agricultural.

WHEREFORE, the petition is hereby DISMISSED. No pronouncement as to cost.[4]

The assailed Resolution, on the other hand, denied the Motion for Reconsideration filed by petitioner. It
affirmed the RTCs dismissal of his Complaint in Civil Case No. 3231, not on the grounds relied upon by
the trial court, but because of prescription and lack of jurisdiction.

The Antecedent Facts

The CA narrates the antecedent facts as follows:

On August 2, 1963, herein [P]etitioner [George Katon] filed a request with the District Office of the
Bureau of Forestry in Puerto Princesa, Palawan, for the re-classification of a piece of real property known
as Sombrero Island, located in Tagpait, Aborlan, Palawan, which consists of approximately 18 hectares.
Said property is within Timberland Block of LC Project No. 10-C of Aborlan, Palawan, per BF Map LC No.
1582.

Thereafter, the Bureau of Forestry District Office, Puerto Princesa, Palawan, ordered the inspection,
investigation and survey of the land subject of the petitioners request for eventual conversion or re-
classification from forest to agricultural land, and thereafter for George Katon to apply for a homestead
patent.
Gabriel Mandocdoc (now retired Land Classification Investigator) undertook the investigation, inspection
and survey of the area in the presence of the petitioner, his brother Rodolfo Katon (deceased) and his
cousin, [R]espondent Manuel Palanca, Jr. During said survey, there were no actual occupants on the
island but there were some coconut trees claimed to have been planted by petitioner and [R]espondent
Manuel Palanca, Jr. (alleged overseer of petitioner) who went to the island from time to time to
undertake development work, like planting of additional coconut trees.

The application for conversion of the whole Sombrero Island was favorably endorsed by the Forestry
District Office of Puerto Princesa to its main office in Manila for appropriate action. The names of
Felicisimo Corpuz, Clemente Magdayao and Jesus Gapilango and Juan Fresnillo were included in the
endorsement as co-applicants of the petitioner.

In a letter dated September 23, 1965, then Asst. Director of Forestry R.J.L. Utleg informed the Director of
Lands, Manila, that since the subject land was no longer needed for forest purposes, the same is
therefore certified and released as agricultural land for disposition under the Public Land Act.

Petitioner contends that the whole area known as Sombrero Island had been classified from forest land
to agricultural land and certified available for disposition upon his request and at his instance. However,
Mr. Lucio Valera, then [l]and investigator of the District Land Office, Puerto Princesa, Palawan, favorably
endorsed the request of [R]espondents Manuel Palanca Jr. and Lorenzo Agustin, for authority to survey
on November 15, 1965. On November 22, a second endorsement was issued by Palawan District Officer
Diomedes De Guzman with specific instruction to survey vacant portions of Sombrero Island for the
respondents consisting of five (5) hectares each. On December 10, 1965, Survey Authority No. R III-342-
65 was issued authorizing Deputy Public Land Surveyor Eduardo Salvador to survey ten (10) hectares of
Sombrero Island for the respondents. On December 23, 1990, [R]espondent Lorenzo Agustin filed a
homestead patent application for a portion of the subject island consisting of an area of 4.3 hectares.

Records show that on November 8, 1996, [R]espondent Juan Fresnillo filed a homestead patent
application for a portion of the island comprising 8.5 hectares. Records also reveal that [R]espondent
Jesus Gapilango filed a homestead application on June 8, 1972. Respondent Manuel Palanca, Jr. was
issued Homestead Patent No. 145927 and OCT No. G-7089 on March 3, 1977[5] with an area of 6.84
hectares of Sombrero Island.

Petitioner assails the validity of the homestead patents and original certificates of title covering certain
portions of Sombrero Island issued in favor of respondents on the ground that the same were obtained
through fraud. Petitioner prays for the reconveyance of the whole island in his favor.

On the other hand, [R]espondent Manuel Palanca, Jr. claims that he himself requested for the
reclassification of the island in dispute and that on or about the time of such request, [R]espondents
Fresnillo, Palanca and Gapilango already occupied their respective areas and introduced numerous
improvements. In addition, Palanca said that petitioner never filed any homestead application for the
island. Respondents deny that Gabriel Mandocdoc undertook the inspection and survey of the island.

According to Mandocdoc, the island was uninhabited but the respondents insist that they already had
their respective occupancy and improvements on the island. Palanca denies that he is a mere overseer of
the petitioner because he said he was acting for himself in developing his own area and not as anybodys
caretaker.
Respondents aver that they are all bona fide and lawful possessors of their respective portions and have
declared said portions for taxation purposes and that they have been faithfully paying taxes thereon for
twenty years.

Respondents contend that the petitioner has no legal capacity to sue insofar as the island is concerned
because an action for reconveyance can only be brought by the owner and not a mere homestead
applicant and that petitioner is guilty of estoppel by laches for his failure to assert his right over the land
for an unreasonable and unexplained period of time.

In the instant case, petitioner seeks to nullify the homestead patents and original certificates of title
issued in favor of the respondents covering certain portions of the Sombrero Island as well as the
reconveyance of the whole island in his favor. The petitioner claims that he has the exclusive right to file
an application for homestead patent over the whole island since it was he who requested for its
conversion from forest land to agricultural land.[6]

Respondents filed their Answer with Special and/or Affirmative Defenses and Counterclaim in due time.
On June 30, 1999, they also filed a Motion to Dismiss on the ground of the alleged defiance by petitioner
of the trial courts Order to amend his Complaint so he could thus effect a substitution by the legal heirs
of the deceased, Respondent Gapilango. The Motion to Dismiss was granted by the RTC in its Order
dated July 29, 1999.

Petitioners Motion for Reconsideration of the July 29, 1999 Order was denied by the trial court in its
Resolution dated December 17, 1999, for being a third and prohibited motion. In his Petition for
Certiorari before the CA, petitioner charged the trial court with grave abuse of discretion on the ground
that the denied Motion was his first and only Motion for Reconsideration of the aforesaid Order.

Ruling of the Court of Appeals

Instead of limiting itself to the allegation of grave abuse of discretion, the CA ruled on the merits. It held
that while petitioner had caused the reclassification of Sombrero Island from forest to agricultural land,
he never applied for a homestead patent under the Public Land Act. Hence, he never acquired title to
that land.

The CA added that the annulment and cancellation of a homestead patent and the reversion of the
property to the State were matters between the latter and the homestead grantee. Unless and until the
government takes steps to annul the grant, the homesteaders right thereto stands.

Finally, granting arguendo that petitioner had the exclusive right to apply for a patent to the land in
question, he was already barred by laches for having slept on his right for almost 23 years from the time
Respondent Palancas title had been issued.

In the Assailed Resolution, the CA acknowledged that it had erred when it ruled on the merits of the
case. It agreed with petitioner that the trial court had acted without jurisdiction in perfunctorily
dismissing his September 10, 1999 Motion for Reconsideration, on the erroneous ground that it was a
third and prohibited motion when it was actually only his first motion.
Nonetheless, the Complaint was dismissed motu proprio by the challenged Resolution of the CA Special
Division of five members with two justices dissenting pursuant to its residual prerogative under Section 1
of Rule 9 of the Rules of Court.

From the allegations of the Complaint, the appellate court opined that petitioner clearly had no standing
to seek reconveyance of the disputed land, because he neither held title to it nor even applied for a
homestead patent. It reiterated that only the State could sue for cancellation of the title issued upon a
homestead patent, and for reversion of the land to the public domain.

Finally, it ruled that prescription had already barred the action for reconveyance. First, petitioners action
was brought 24 years after the issuance of Palancas homestead patent. Under the Public Land Act, such
action should have been taken within ten years from the issuance of the homestead certificate of title.
Second, it appears from the submission (Annex F of the Complaint) of petitioner himself that
Respondents Fresnillo and Palanca had been occupying six hectares of the island since 1965, or 33 years
before he took legal steps to assert his right to the property. His action was filed beyond the 30-year
prescriptive period under Articles 1141 and 1137 of the Civil Code.

Hence, this Petition.[7]

Issues

In his Memorandum, petitioner raises the following issues:

1. Is the Court of Appeals correct in resolving the Petition for Certiorari based on an issue not raised (the
merits of the case) in the Petition?

2. Is the Court of Appeals correct in invoking its alleged residual prerogative under Section 1, Rule 9 of
the 1997 Rules of Civil Procedure in resolving the Petition on an issue not raised in the Petition?[8]

The Courts Ruling

The Petition has no merit.

First Issue:

Propriety of Ruling on the Merits

This is not the first time that petitioner has taken issue with the propriety of the CAs ruling on the merits.
He raised it with the appellate court when he moved for reconsideration of its December 8, 2000
Decision. The CA even corrected itself in its November 20, 2001 Resolution, as follows:

Upon another review of the case, the Court concedes that it may indeed have lost its way and been
waylaid by the variety, complexity and seeming importance of the interests and issues involved in the
case below, the apparent reluctance of the judges, five in all, to hear the case, and the volume of the
conflicting, often confusing, submissions bearing on incidental matters. We stand corrected.[9]

That explanation should have been enough to settle the issue. The CAs Resolution on this point has
rendered petitioners issue moot. Hence, there is no need to discuss it further. Suffice it to say that the
appellate court indeed acted ultra jurisdictio in ruling on the merits of the case when the only issue that
could have been, and was in fact, raised was the alleged grave abuse of discretion committed by the trial
court in denying petitioners Motion for Reconsideration. Settled is the doctrine that the sole office of a
writ of certiorari is the correction of errors of jurisdiction. Such writ does not include a review of the
evidence,[10] more so when no determination of the merits has yet been made by the trial court, as in
this case.

Second Issue:

Dismissal for Prescription

and Lack of Jurisdiction

Petitioner next submits that the CA erroneously invoked its residual prerogatives under Section 1 of Rule
9 of the Rules of Court when it motu proprio dismissed the Petition for lack of jurisdiction and
prescription. According to him, residual prerogative refers to the power that the trial court, in the
exercise of its original jurisdiction, may still validly exercise even after perfection of an appeal. It follows
that such powers are not possessed by an appellate court.

Petitioner has confused what the CA adverted to as its residual prerogatives under Section 1 of Rule 9 of
the Rules of Court with the residual jurisdiction of trial courts over cases appealed to the CA.

Under Section 1 of Rule 9 of the Rules of Court, defenses and objections not pleaded either in a motion
to dismiss or in the answer are deemed waived, except when (1) lack of jurisdiction over the subject
matter, (2) litis pendentia, (3) res judicata and (4) prescription are evident from the pleadings or the
evidence on record. In the four excepted instances, the court shall motu proprio dismiss the claim or
action. In Gumabon v. Larin[11] we explained thus:

x x x [T]he motu proprio dismissal of a case was traditionally limited to instances when the court clearly
had no jurisdiction over the subject matter and when the plaintiff did not appear during trial, failed to
prosecute his action for an unreasonable length of time or neglected to comply with the rules or with
any order of the court. Outside of these instances, any motu proprio dismissal would amount to a
violation of the right of the plaintiff to be heard. Except for qualifying and expanding Section 2, Rule 9,
and Section 3, Rule 17, of the Revised Rules of Court, the amendatory 1997 Rules of Civil Procedure
brought about no radical change. Under the new rules, a court may motu proprio dismiss a claim when it
appears from the pleadings or evidence on record that it has no jurisdiction over the subject matter;
when there is another cause of action pending between the same parties for the same cause, or where
the action is barred by a prior judgment or by statute of limitations. x x x.[12] (Italics supplied)

On the other hand, residual jurisdiction is embodied in Section 9 of Rule 41 of the Rules of Court, as
follows:

SEC. 9. Perfection of appeal; effect thereof. A partys appeal by notice of appeal is deemed perfected as
to him upon the filing of the notice of appeal in due time.

A partys appeal by record on appeal is deemed perfected as to him with respect to the subject matter
thereof upon the approval of the record on appeal filed in due time.
In appeals by notice of appeal, the court loses jurisdiction over the case upon the perfection of the
appeals filed in due time and the expiration of the time to appeal of the other parties.

In appeals by record on appeal, the court loses jurisdiction only over the subject matter thereof upon the
approval of the records on appeal filed in due time and the expiration of the time to appeal of the other
parties.

In either case, prior to the transmittal of the original record or the record on appeal, the court may issue
orders for the protection and preservation of the rights of the parties which do not involve any matter
litigated by the appeal, approve compromises, permit appeals of indigent litigants, order execution
pending appeal in accordance with Section 2 of Rule 39, and allow withdrawal of the appeal. (Italics
supplied)

The residual jurisdiction of trial courts is available at a stage in which the court is normally deemed to
have lost jurisdiction over the case or the subject matter involved in the appeal. This stage is reached
upon the perfection of the appeals by the parties or upon the approval of the records on appeal, but
prior to the transmittal of the original records or the records on appeal.[13] In either instance, the trial
court still retains its so-called residual jurisdiction to issue protective orders, approve compromises,
permit appeals of indigent litigants, order execution pending appeal, and allow the withdrawal of the
appeal.

The CAs motu proprio dismissal of petitioners Complaint could not have been based, therefore, on
residual jurisdiction under Rule 41. Undeniably, such order of dismissal was not one for the protection
and preservation of the rights of the parties, pending the disposition of the case on appeal. What the CA
referred to as residual prerogatives were the general residual powers of the courts to dismiss an action
motu proprio upon the grounds mentioned in Section 1 of Rule 9 of the Rules of Court and under
authority of Section 2 of Rule 1[14] of the same rules.

To be sure, the CA had the excepted instances in mind when it dismissed the Complaint motu proprio on
more fundamental grounds directly bearing on the lower courts lack of jurisdiction[15] and for
prescription of the action. Indeed, when a court has no jurisdiction over the subject matter, the only
power it has is to dismiss the action.[16]

Jurisdiction over the subject matter is conferred by law and is determined by the allegations in the
complaint and the character of the relief sought.[17] In his Complaint for Nullification of Applications for
Homestead and Original Certificate of Title No. G-7089 and for Reconveyance of Title,[18] petitioner
averred:

2. That on November 10, 1965, without the knowledge of [petitioner, Respondent] Manuel Palanca Jr.,
[petitioners] cousin, in connivance with his co-[respondent], Lorenzo Agustin, x x x fraudulently and in
bad faith:

2.1. x x x made the request for authority to survey as a pre-requisite to the filing of an application for
homestead patent in his name and that of his Co-[Respondent] Agustin, [despite being] fully aware that
[Petitioner] KATON had previously applied or requested for re-classification and certification of the same
land from forest land to agricultural land which request was favorably acted upon and approved as
mentioned earlier; a clear case of intrinsic fraud and misrepresentation;
xxxxxxxxx

2.3. In stating in his application for homestead patent that he was applying for the VACANT PORTION of
Sombrero Island where there was none, the same constituted another clear case of fraud and
misrepresentation;

3. That the issuance of Homestead Patent No. 145927 and OCT No. G-7089 in the name of [Respondent]
Manuel Palanca Jr. and the filing of Homestead Patent Applications in the names of [respondents],
Lorenzo Agustin, Jesus Gapilango and Juan Fresnillo[,] having been done fraudulently and in bad faith,
are ipso facto null and void and of no effect whatsoever.[19]

xxxxxxxxx

x x x. By a wrongful act or a willful omission and intending the effects with natural necessity arise
knowing from such act or omission, [Respondent Palanca] on account of his blood relation, first degree
cousins, trust, interdependence and intimacy is guilty of intrinsic fraud [sic]. x x x.[20]

Thereupon, petitioner prayed, among others, for a judgment (1) nullifying the homestead patent
applications of Respondents Agustin, Fresnillo and Gapilango as well as Homestead Patent No. 145927
and OCT No. G-7089 in the name of Respondent Palanca; and (2) ordering the director of the Land
Management Bureau to reconvey the Sombrero Island to petitioner.[21]

The question is, did the Complaint sufficiently allege an action for declaration of nullity of the free patent
and certificate of title or, alternatively, for reconveyance? Or did it plead merely for reversion?

The Complaint did not sufficiently make a case for any of such actions, over which the trial court could
have exercised jurisdiction.

In an action for nullification of title or declaration of its nullity, the complaint must contain the following
allegations: 1) that the contested land was privately owned by the plaintiff prior to the issuance of the
assailed certificate of title to the defendant; and 2) that the defendant perpetuated a fraud or committed
a mistake in obtaining a document of title over the parcel of land claimed by the plaintiff.[22] In these
cases, the nullity arises not from fraud or deceit, but from the fact that the director of the Land
Management Bureau had no jurisdiction to bestow title; hence, the issued patent or certificate of title
was void ab initio.[23]

In an alternative action for reconveyance, the certificate of title is also respected as incontrovertible, but
the transfer of the property or title thereto is sought to be nullified on the ground that it was wrongfully
or erroneously registered in the defendants name.[24] As with an annulment of title, a complaint must
allege two facts that, if admitted, would entitle the plaintiff to recover title to the disputed land: (1) that
the plaintiff was the owner of the land, and (2) that the defendant illegally dispossessed the plaintiff of
the property.[25] Therefore, the defendant who acquired the property through mistake or fraud is bound
to hold and reconvey to the plaintiff the property or the title thereto.[26]

In the present case, nowhere in the Complaint did petitioner allege that he had previously held title to
the land in question. On the contrary, he acknowledged that the disputed island was public land,[27]
that it had never been privately titled in his name, and that he had not applied for a homestead under
the provisions of the Public Land Act.[28] This Court has held that a complaint by a private party who
alleges that a homestead patent was obtained by fraudulent means, and who consequently prays for its
annulment, does not state a cause of action; hence, such complaint must be dismissed. [29]

Neither can petitioners case be one for reversion. Section 101 of the Public Land Act categorically
declares that only the solicitor general or the officer in his stead may institute such an action.[30] A
private person may not bring an action for reversion or any other action that would have the effect of
canceling a free patent and its derivative title, with the result that the land thereby covered would again
form part of the public domain.[31]

Thus, when the plaintiff admits in the complaint that the disputed land will revert to the public domain
even if the title is canceled or amended, the action is for reversion; and the proper party who may bring
action is the government, to which the property will revert.[32] A mere homestead applicant, not being
the real party in interest, has no cause of action in a suit for reconveyance.[33] As it is, vested rights over
the land applied for under a homestead may be validly claimed only by the applicant, after approval by
the director of the Land Management Bureau of the formers final proof of homestead patent. [34]

Consequently, the dismissal of the Complaint is proper not only because of lack of jurisdiction, but also
because of the utter absence of a cause of action,[35] a defense raised by respondents in their Answer.
[36] Section 2 of Rule 3 of the Rules of Court[37] ordains that every action must be prosecuted or
defended in the name of the real party in interest, who stands to be benefited or injured by the
judgment in the suit. Indeed, one who has no right or interest to protect has no cause of action by which
to invoke, as a party-plaintiff, the jurisdiction of the court.[38]

Finally, assuming that petitioner is the proper party to bring the action for annulment of title or its
reconveyance, the case should still be dismissed for being time-barred.[39] It is not disputed that a
homestead patent and an Original Certificate of Title was issued to Palanca on February 21, 1977,[40]
while the Complaint was filed only on October 6, 1998. Clearly, the suit was brought way past ten years
from the date of the issuance of the Certificate, the prescriptive period for reconveyance of fraudulently
registered real property.[41]

It must likewise be stressed that Palancas title -- which attained the status of indefeasibility one year
from the issuance of the patent and the Certificate of Title in February 1977 -- is no longer open to
review on the ground of actual fraud. Ybanez v. Intermediate Appellate Court[42] ruled that a certificate
of title, issued under an administrative proceeding pursuant to a homestead patent, is as indefeasible as
one issued under a judicial registration proceeding one year from its issuance; provided, however, that
the land covered by it is disposable public land, as in this case.

In Aldovino v. Alunan,[43] the Court has held that when the plaintiffs own complaint shows clearly that
the action has prescribed, such action may be dismissed even if the defense of prescription has not been
invoked by the defendant. In Gicano v. Gegato,[44] we also explained thus:

"x x x [T]rial courts have authority and discretion to dismiss an action on the ground of prescription when
the parties' pleadings or other facts on record show it to be indeed time-barred; (Francisco v. Robles,
Feb. 15, 1954; Sison v. McQuaid, 50 O.G. 97; Bambao v. Lednicky, Jan. 28, 1961; Cordova v. Cordova, Jan.
14, 1958; Convets, Inc. v. NDC, Feb. 28, 1958; 32 SCRA 529; Sinaon v. Sorongan, 136 SCRA 408); and it
may do so on the basis of a motion to dismiss (Sec. 1,f, Rule 16, Rules of Court), or an answer which sets
up such ground as an affirmative defense (Sec. 5, Rule 16), or even if the ground is alleged after
judgment on the merits, as in a motion for reconsideration (Ferrer v. Ericta, 84 SCRA 705); or even if the
defense has not been asserted at all, as where no statement thereof is found in the pleadings (Garcia v.
Mathis, 100 SCRA 250; PNB v. Pacific Commission House, 27 SCRA 766; Chua Lamco v. Dioso, et al., 97
Phil. 821); or where a defendant has been declared in default (PNB v. Perez, 16 SCRA 270). What is
essential only, to repeat, is that the facts demonstrating the lapse of the prescriptive period be otherwise
sufficiently and satisfactorily apparent on the record; either in the averments of the plaintiff's complaint,
or otherwise established by the evidence."[45] (Italics supplied)

Clearly then, the CA did not err in dismissing the present case. After all, if and when they are able to do
so, courts must endeavor to settle entire controversies before them to prevent future litigations.[46]

WHEREFORE, the Petition is hereby DENIED, and the assailed Resolution AFFIRMED. The dismissal of the
Complaint in Civil Case No. 3231 is SUSTAINED on the grounds of lack of jurisdiction, failure to state a
cause of action and prescription. Costs against petitioner.

SO ORDERED.

RULE 10
PEFLG CORP. versus PHILIPPINE INFRASTRACTURE INC.

RULE 11
ERNESTINA L. CRISOLOGO-JOSE, Petitioner,
vs.
LAND BANK OF THE PHILIPPINES, Respondent.
G.R. No. 167399 June 22, 2006

DECISION
In this petition for review under Rule 45 of the Rules of Court, petitioner Ernestina L. Crisologo-Jose
seeks to set aside the Decision of the Court of Appeals (CA) dated October 15, 20041 in CA-G.R. CV No.
69463 and its Resolution of January 24, 20052 denying her motion for reconsideration.

Records yield the following facts:

Petitioner is the owner of 34.6960 hectares of land which used to form part of a larger expanse situated
in Talavera, Nueva Ecija and covered by Transfer Certificate of Title (TCT) No. NT-147218 of the land
records of North Nueva Ecija. She is also the owner of several parcels of land situated in the same
municipality with a total area of 27.09 hectares and covered by twelve (12) separate titles, i.e., TCT Nos.
155604 -09, 155611, 155615, 245112-15. According to the petitioner, respondent Land Bank of the
Philippines (Land Bank) gave these landholdings – which she inherited from her uncle, Alejandro T. Lim -
a measly valuation of P9,000.00 per hectare.

Excepting from the valuation purportedly thus given, petitioner filed on September 25, 1997, a
PETITION3 for determination of just compensation respecting her landholdings aforementioned. In said
petition, docketed as AGR. CASE No. 962-G of the Regional Trial Court of Guimba, Nueva Ecija, petitioner
prayed that "the sum of P100,000.00 at least per hectare, or the total sum of P6,178,600.00 be fixed as
just compensation of the total area of 61.7860 hectares," it being her allegation that her computation
hewed with the guidelines established under the Comprehensive Agrarian Reform Law4 and other
related statutes.

It appears that in the midst of petitioner’s presentation of her evidence, the trial court admitted Land
Bank’s ANSWER where, in gist, it alleged the following:

1. Of the 203.1060 hectares covered by TCT No. NT-147218, 168.31 hectares thereof was actually
acquired by DAR from Alejandro T. Lim pursuant to Operation Land Transfer under Presidential Decree
(P.D.) No. 27, at P8,732.51 per hectare. The remaining 34.7960 hectares were left out from the coverage
being either a school site, a creek, a road or residential area.

2. With respect to the other landholdings purportedly situated in Talavera, Nueva Ecija, the claim folders
thereof, if any, had not been forwarded to the bank by the DAR.

On September 8, 1999, the trial court, after due proceedings, rendered judgment fixing the fair market
value of the 61.7860 hectares of the land in question at P100,000.00 per hectare. But beyond value
determination, the trial court ordered the respondent to pay petitioner the total sum of P6,178,600.00,
subject to the usual rules and regulation regarding payment.5

Following the denial of its motion for reconsideration, respondent Land Bank went on appeal to the CA
whereat its recourse was docketed as CA-G.R. CV No. 69463.

Eventually, the CA, in a decision dated October 15, 2004, reversed that of the trial court, disposing as
follows:

WHEREFORE, premises considered, the instant appeal is hereby GRANTED. The assailed decision dated
September 8, 1999 is hereby REVERSED and SET ASIDE, entering a new one DISMISSING the case for lack
of merit.

SO ORDERED. (Emphasis in the original)

In time, petitioner moved for reconsideration but the CA denied her motion in its equally assailed
resolution of January 24, 2005.

Hence, petitioner’s present recourse on both procedural and substantive grounds.

The petition is without merit

On the procedural angle, petitioner faults the appellate court for relying on and lending credence to the
allegations and defenses that respondent averred in its answer which it filed beyond the 15-day period
prescribed under Section 1, Rule 11 of the Rules of Court.6 Petitioner also blames the trial court for
admitting, instead of expunging from the records, said answer and for not declaring the respondent in
default.

We are not persuaded.

To admit or to reject an answer filed after the prescribed period is addressed to the sound discretion of
the court.7 In fact, Section 11, Rule 11 of the Rules authorizes the court to accept answer though filed
late, thus:

SECTION. 11. Extension of time to plead. – Upon motion and on such terms as may be just, the court
may extend the time to plead provided in these Rules.

The court may also, upon like terms, allow an answer or other pleading to be filed after the time fixed by
these Rules. (Emphasis added.)

And as Indiana Aerospace University vs. Commission on Higher Education8 teaches, an answer should be
admitted where it had been filed before the defendant was declared in default and no prejudice is
caused to the plaintiff, as here. Indeed, petitioner has not demonstrated how the admission by the trial
court of respondent’s answer was prejudicial to her case which, at bottom, involves only the
determination of the fair market value of her property.

Given Indiana Aerospace and other related cases cited therein virtually all of which is one in saying that
default orders should be avoided, petitioner’s lament about the trial court not declaring the respondent
in default for alleged belated filing of answer should be denied cogency. What is more, a declaration of
default, if proper, shall not issue unless the claiming party asked for it. As we said in Trajano vs. Cruz,9
applying what is now Section 3, Rule 9 of the Rules of Court10 "the court cannot motu proprio declare a
party in default." In the words of Justice Regalado "there must be a motion [for a declaration of default]
by the plaintiff with proof of failure by the defendant to file his responsive pleading despite due
notice."11

Not lost on the Court, of course, is the fact that petitioner, after securing the desired ruling from the trial
court, never brought up the matter of respondent’s belated filing of an answer before the CA. Needless
to belabor, issues not raised below cannot, as a rule, be raised for the first time before the Court.

This brings us to the issue of just compensation, a component in the implementation of the agrarian
reform program which partakes of the exercise of the power of eminent domain.12

Just compensation, under the premises, presupposes the expropriation or taking of agricultural lands for
eventual distribution to agrarian reform beneficiaries. In the case at bench, respondent has averred and
the CA has peremptorily determined that the tracts of land for which petitioner is claiming just
compensation have not actually been acquired by the government.

With respect to the parcels of land with a total area of 27.09 hectares and covered by TCT Nos. 155604,
155605, 155606, 155607, 155608, 155609, 155611 155615, 245112, 245113, 245114 and 245115, the
appellate court found that the claim folders therefor have not been forwarded to the respondent bank
for processing and eventual payment of the transfer claims. This reality could only mean, so the CA
correctly concludes, that the Department of Agrarian Reform (DAR) has not yet expropriated the parcels
in question for agrarian reform purposes. In other words, ownership or at least control over the 27.09
hectares has not passed from the registered owner to the expropriator. Petitioner could have had proven
– but had not - the fact of actual or symbolic compulsory taking by presenting evidence to that effect,
such as the required Notice of Valuation which usually follows the Notice of Coverage, the letter of
invitation to a preliminary conference and the Notice of Acquisition that DAR sends, pursuant to DAR
administrative issuances, to the landowner affected.13
Just like the matter of the 27.09 hectares of land immediately referred to above, petitioner has not
discharged her burden of proving the acquisition by the DAR of the other 34.6960 hectares of land once
covered by TCT No. NT-147218. But even if perhaps she wanted to, she could not have possibly done so,
that portion being either a school site, a creek or residential area, ergo unsuitable for agricultural
activities and, hence, outside the scope of the agrarian reform program, be it under the CARL law14 or
the more exacting P.D. No. 27.15 It must be stressed, at this juncture, that respondent had all along –
i.e., in its basic answer, its CA appeal brief and finally in its Memorandum filed with the Court - stuck to
its position that the 27.09-hectare area was never taken over by the DAR; and that no claim for
compensation therefor was ever processed, as is usual in agrarian compulsory acquisition scheme, under
the summary administrative proceedings prescribed by governing DAR circulars. Yet, the petitioner never
attempted to prove the contrary. Significantly, save for determining the fair market value of the
landholdings in question, no reference is also made in the decision of the trial court regarding the actual
expropriation of the specific parcels of land subject of this case, albeit, quite strangely, it ordered
payment of the value of the property in question.

To reiterate, just compensation in agrarian reform cases shall be paid for private agricultural lands taken
under the compulsory acquisition scheme for distribution to tenant-farmer beneficiaries. Remove the
element of compulsory taking and it is futile even to dwell on the just compensation formula, let alone
ordering payment thereof. So it must be here.

WHEREFORE, the instant petition is DENIED and the assailed Decision and Resolution of the Court of
Appeals are accordingly AFFIRMED.

Costs against the petitioner.

SO ORDERED.

RULE 12
JOSE BARITUA and JB LINE, petitioners, vs. NIMFA DIVINA MERCADER in her capacity and as guardian of
DARWIN, GIOVANNI, RODEL and DENNIS, all surnamed MERCADER; LEONIDA Vda. de MERCADER on her
behalf and on behalf of her minor child MARY JOY MERCADER; SHIRLEY MERCADER DELA CRUZ; MARIA
THERESA MERCADER-GARCIA; DANILO MERCADER; JOSE DANTE MERCADER; and JOSEFINA MERCADER,
respondents.
[G.R. No. 136048. January 23, 2001]

DECISION

The Manchester ruling requiring the payment of docket and other fees as a condition for the acquisition
of jurisdiction has no retroactive effect and applies only to cases filed after its finality.

The Case

Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the April 17, 1998
Decision[1] and the October 28, 1998 Resolution[2] of the Court of Appeals (CA) in CA-GR CV No. 40772.
The decretal portion of said Decision reads as follows:
WHEREFORE, upon all the foregoing premises considered, the DECISION appealed from is AFFIRMED
with the MODIFICATION that the loss of earnings of the late Dominador Mercader is reduced to
P798,000.00.[3]

The assailed Resolution denied petitioners Motion for Reconsideration.

The Court of Appeals sustained the Decision of the Regional Trial Court (RTC) of Laoang, Northern Samar
(Branch 21). Except for the modification of the loss of earnings, it affirmed all the monetary damages
granted by the trial court to respondents. The decretal portion of the assailed RTC Decision reads as
follows:[4]

WHEREFORE, on preponderance of evidence, judgment is for [herein respondents] and against [herein
petitioners], ordering the latter to pay the former:

(a) As compensatory damages for the death of Dominador Mercader -- P50,000.00;

(b) For the loss of earnings of the late Dominador Mercader -- P1,660,000.00, more or less, based on the
average life span of 75 years from the time of his death who earned a net income of P5,000.00 monthly
out of his business;

(c) Actual damages of P30,000.00 receipted purchases of goods in Manila; P5,750.00 for the first class
coffin and a 15-day wake services evidenced by a receipt marked Exh. D; [P]850.00 for the 50 x 60
headstone, receipt marked Exh. E and P1,590.00 -- Deed of Absolute Sale of a burial lot, marked Exh. F;

(d) 25% of whatever amount is collected by [respondents] from [petitioners] but no less than P50,000.00
plus P1,000.00 per hearing by way of attorneys fees;

(e) As moral damages -- P50,000.00;

(f) As exemplary damages -- P30,000.00; and

(g) To pay the costs.

The Facts

The antecedents of the case are succinctly summarized by the Court of Appeals in this wise:

The original complaint was filed against JB Lines, Inc. [Petitioner JB Lines, Inc.] filed a motion to dismiss
complaint, to strike out false-impertinent matters therefrom, and/or for bill of particulars on the primary
grounds that [respondents] failed to implead Jose Baritua as an indispensable party and that the cause
of action is a suit against a wrong and non-existent party. [Respondents] filed an opposition to the said
motion and an amended complaint.

In an Order dated December 11, 1984 the trial court denied the aforesaid motion and admitted the
amended complaint of [respondents] impleading Jose Baritua and alleged the following:
(10) The late Dominador Mercader is a [b]usinessman mainly engaged in the buy and sell of dry goods in
Laoang, N. Samar. He buys his goods from Manila and bring[s] them to Laoang, Northern Samar for sale
at his store located in the said locality;

(11) Sometime on March 16, 1983, the late Dominador Mercader boarded [petitioners] bus No. 142 with
Plate No. 484 EU at [petitioners] Manila Station/terminal, bound for Brgy. Rawis, Laoang Northern Samar
as a paying passenger;

(12) At that time, Dominador Mercader had with him as his baggage, assorted goods (i.e. long pants,
short pants, dusters, etc.) which he likewise loaded in [petitioners] bus;

(13) The late Dominador Mercader was not able to reach his destination considering that on March 17,
1983 at Beily (Bugco) Bridge, Barangay Roxas, Mondragon, Northern Samar, while he was on board
[petitioners] bus no. 142 with Plate No. 484 EU, the said bus fell into the river as a result of which the
late Dominador Mercader died. x x x.

(14) The accident happened because [petitioners] driver negligently and recklessly operated the bus at a
fast speed in wanton disregard of traffic rules and regulations and the prevailing conditions then existing
that caused [the] bus to fall into the river.

[Respondents] then filed a motion to declare [petitioners] in default which motion was opposed by
[petitioners]. [Respondents] withdrew the said motion prompting the trial court to cancel the scheduled
hearing of the said motion to declare [petitioners] in default in an Order dated January 23, 1985.

In its answer, [petitioners] denied specifically all the material allegations in the complaint and alleged the
following:

2. The alleged person of Dominador Mercader did not board bus 142 at [petitioners] Manila
station/terminal x x x as a (supposed paying passenger). There is even no statement in the complaint
that Dominador Mercader (if it were true that he was a passenger of bus 142 at the [petitioners] Manila
station/terminal) was issued any passenger-freight ticket conformably with law and practice. It is a fact of
public knowledge that, in compliance with existing rules and laws, [Petitioner] Baritua, as a public utility
operator, issues, thru his conductors, in appropriate situations, to a true passenger, the familiar and
known passenger and freight ticket which reads in part:

NOTICE

Baggage carried at owners risk x x x liability on prepaid freight otherwise declared.

xxxxxxxxx

Whole Fare Paid P ______________

Declared value ____________ x x x.

Description of Freight _____________________________

Signature of Owner.
3. It is also a fact of public knowledge that [Petitioner] Baritua does not have any Manila
station/terminal, because what he has is a Pasay city station.

4. [Petitioner] Baritua had no prior knowledge that, on or about March 17, 1983, and/or previous
thereto, the Bugko Bailey Bridge (across Catarman-Laoang road) in Barangay Roxas, Mondragon,
Northern Samar, was in virtual dilapida[ted] and dangerous condition, in a state of decay and disrepair,
thus calling for the concerned government and public officials performance of their coordinative and
joint duties and responsibilities, to repair, improve and maintain that bridge, in good and reasonably safe
condition, but, far from performing or complying with said subject duties and responsibilities, the
adverted officials concerned, without just cause, not only failed and neglected to cause such needed
repair, improvement and maintenance of the Bugko Bailey Bridge, on or prior to March 17, 1983, but
also failed, and neglected to either close the Bugko Bridge to public use and travel, and/or to put
appropriate warning and cautionary signs, for repair, improvement, maintenance, and safety purposes.
So that, as a proximate and direct consequence of the aggregate officials nonfeasance, bad faith,
negligence, serious inefficiency, and callous indifference to public safety, that Bugko Bridge collapsed
inward and caved in ruin, on that March 17, 1983, while Barituas bus 142 was cautiously and prudently
passing and travelling across the said bridge, as a result of which the bus fell into the river and sea
waters, despite the exercise and compliance by Baritua and his driver of their duties in the matter of
their requisite degree of diligence, caution and prudence, Baritua also exercised and complied with the
requisite duty of diligence, care, and prudence in the selection and supervision over his driver, contrary
to the baseless imputation in paragraphs 14 and 20 of the original and amended complaints. Moreover,
Baritua and his driver did not violate any traffic rule and regulation, contrary to plaintiffs insinuation.

5. Furthermore, [Petitioner] Baritua and his driver have no causative connection with the alleged death
of Dominador Mercader who, according to a reliable source, was already seriously suffering from a
lingering illness even prior to his alleged demise. Baritua also learned lately, and so it is herein alleged
that Dominador Mercader contributed considerably, to, and/or provided the proximate and direct cause
of his own death, hence, he himself is to be blamed for whatever may have happened to him or for
whatever may have been sustained by his supposed heirs, vis--vis the suit against the wrong party.

6. Baritua and his driver, as earlier stated, did not commit any actionable breach of contract with the
alleged Dominador Mercader or the latters supposed heirs.

7. There is no factual nor any legal basis for plaintiffs proffered claims for damages.

II. AFFIRMATIVE DEFENSES

8. Based on the preceding averments, plaintiffs have neither a cause nor a right of action against
[Petitioner] Baritua and his driver.

8.1. The allegation that supposedly the x x x [p]laintiffs are the compulsory heirs of the late DOMINADOR
MERCADER x x x (par. 8, complaint) is too vague and too broad, as the subject allegation is a bare and
pure conclusionary averment unaccompanied by the requisite statement of ultimate facts constitutive of
a cause or right of action.
8.2. Even assuming arguendo, without however conceding, plaintiffs statement of a cause of action, the
complaint is nonetheless replete with false and impertinent matters which fit the rule on striking out
pleadings or parts thereof. To mention only a glaring few:

8.2.a. The allegation on exemplary damages x x x is impertinent and immaterial in the complaint against
a supposed employer. For, even theoretically assuming, without however admitting a negligent act-
omission on the part of a driver, nevertheless, in such a hypothetical situation, the causative negligence,
if any there was, is personal to the wrongdoer, i.e., the employee-driver, to the exclusion of the
employer.

8.2.b. The allegation on supposed minimum life of 75 years and on he expects to earn no less than
P1,680,000.00 x x x is false, a pure hyperbole, and bereft of factual and legal basis. Besides, what
jurisprudential rule refers to is only net earning. The law abhors a claim, akin to plaintiffs allegation,
which is manifestly speculative, as it may not exist at all. Furthermore, the questioned allegation in the
plaintiffs original and amended complaints is not preceded by the requisite statement of definitive facts,
nor of any specific fact, which could possibly afford a rational basis for a reasonable expectation of
supposed earning that could be lost, or impaired.

8.2.c. Likewise, the allegations that allegedly x x x the late Dominador Mercader boarded x x x Bus No.
142 x x x and that supposedly the latter had a baggage x x x containing drygoods x x x in which case
[petitioners have] to pay the value thereof in such amount as may be proven by [respondents] in court
during the trial x x x, apart from being false, are offensive to the rule on concise statement of ultimate
facts. The assailed allegations also contravene Interim Rule 11, (i)f any demand is for damages in a civil
action the amount thereof must be specifically alleged. In consequence of this averment, [respondents]
have not yet paid the correct docket fee, for which reason, [respondents] case may be dismissed on that
ground alone.

8.3. In violation also of the same Interim Rule 11, regarding the requisite definitive amount of claim, the
allegation on the supposed funeral expense x x x does not also indicate any specific amount. So with the
averment on supposed moral damage which may not be warranted because of absence of allegation of
fraud or bad faith, if any, there was, apart from want of causative connection with the defendant.

8.4. The allegation in paragraph 15 of the original and amended complaint is also a pure conclusionary
averment, without a factual premise.

9. [Petitioner] JB LINE, impleaded in the amended complaint, is merely a business name and sole
proprietorship of defendant Baritua. As such, JB Line is not a juridical person, nor an entity authorized by
law to sue and be sued, hence, it cannot legally be a party to any action. With this averment, correlated
with that in paragraphs 4-5 hereof, [respondents] amended complaint is essentially a suit against a
wrong party.[5]

The RTC, after due trial, rendered the aforesaid assailed Decision.

Ruling of the Court of Appeals

As earlier stated, the Court of Appeals affirmed the trial courts award of monetary damages in favor of
respondents, except the amount of Dominador Mercaders lost earnings, which it reduced to P798,000. It
held that petitioners failed to rebut the presumption that in the event a passenger died or was injured,
the carrier had acted negligently. Petitioners, it added, presented no sufficient proof that they had
exercised extraordinary diligence.

Hence, this Petition.[6]

The Issues

In their Memorandum, petitioners submit the following issues for our consideration:

Did the honorable Court of Appeals (CA) gravely abuse its discretion when it allowed to pass sub silencio
the trial courts failure to rule frontally on petitioners plea for a bill of particulars, and ignored the nature
of respondents prayer in the complaint pleading for an award of --

a) P12,000.00 -- representing the death compensation;

b) An amount to be proven in court, representing actual damages;

c) P1,660,000.00 or more as may be proven during the trial, by way of loss of earnings;

d) An amount to be proven in court as and by way of funeral expenses;

e) An amount to be proven during the trial, representing moral damages;

f) An amount to be determined by this Honorable Court, representing exemplary damages;

g) An amount equivalent to 25% of whatever amount the plaintiffs would be able to collect from the
defendant but in no case less than P50,000.00 plus an additional amount of P1,000.00 per hearing as
and by way of Attorneys fees;

II

Did the CA also ignore the fact that the trial court was not paid the correct amount of the docket and
other lawful fees; hence, without jurisdiction over the original and amended complaints or over the
subject matter of the case;

III

Did the CA likewise arbitrarily disregard petitioners constitutional right to procedural due process and
fairness when it ignored and thrust aside their right to present evidence and to expect that their
evidence will be duly considered and appreciated; and

IV

In awarding excessive and extravagant damages, did the CA and the trial court adhere to the rule that
their assailed decision must state clearly and distinctly the facts and the laws on which they are based?
[7]
Distilling the alleged errors cited above, petitioners raise two main issues for our consideration: (1)
whether the CA erred in holding that the RTC had jurisdiction over the subject matter of the case, and (2)
whether the CA disregarded petitioners procedural rights.

The Courts Ruling

The Petition is devoid of merit.

First Issue: Jurisdiction

Petitioners contend that since the correct amounts of docket and other lawful fees were not paid by
respondents, then the trial court did not acquire jurisdiction over the subject matter of the case.

The Court, in Manchester Development Corporation v. CA,[8] held that [t]he court acquires jurisdiction
over any case only upon the payment of the prescribed docket fee. An amendment of the complaint or
similar pleading will not thereby vest jurisdiction in the court, much less the payment of the docket fee
based on the amounts sought in the amended pleading. x x x.

Generally, the jurisdiction of a court is determined by the statute in force at the commencement of the
action,[9] unless such statute provides for its retroactive application.[10] Once the jurisdiction of a court
attaches, it continues until the case is finally terminated.[11] The trial court cannot be ousted therefrom
by subsequent happenings or events, although of a character that would have prevented jurisdiction
from attaching in the first instance.[12]

The Manchester ruling, which became final in 1987, has no retroactive application and cannot be
invoked in the subject Complaint filed in 1984. The Court explicitly declared:

To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar pleadings
should specify the amount of damages being prayed for not only in the body of the pleading but also in
the prayer, and said damages shall be considered in the assessment of the filing fees in any case. Any
pleading that fails to comply with this requirement shall not be accepted nor admitted, or shall
otherwise be expunged from the record.[13] (emphasis supplied)

Second Issue: Petitioners Procedural Rights

Motion for a Bill of Particulars

Petitioners argue that the Court of Appeals erred when it passed sub silencio on the trial courts failure to
rule frontally on their plea for a bill of particulars.

We are not impressed. It must be noted that petitioners counsel manifested in open court his desire to
file a motion for a bill of particulars. The RTC gave him ten days from March 12, 1985 within which to do
so.[14] He, however, filed the aforesaid motion only on April 2, 1985 or eleven days past the deadline set
by the trial court.[15] Moreover, such motion was already moot and academic because, prior to its filing,
petitioners had already filed their answer and several other pleadings to the amended Complaint.
Section 1, Rule 12 of the Rules of Court, provides:
Section 1. When applied for; purpose. -- Before responding to a pleading, a party may move for a more
definite statement or for a bill of particulars of any matter which is not averred with sufficient
definiteness or particularity to enable him properly to prepare his responsive pleading. If the pleading is
a reply, the motion must be filed within ten (10) days from service thereof. Such motion shall point out
the defects complained of, the paragraphs wherein they are contained, and the details desired.[16]
(emphasis supplied)

Petitioners Right to Adduce Evidence

Petitioners also argue that their right to present evidence was violated by the CA, because it did not
consider their contention that the trial judges who heard the case were biased and impartial. Petitioners
contend, as they did before the CA, that Judge Tomas B. Noynay based his Decision on certain chosen
partial testimonies of [respondents] witnesses x x x. They further maintain that Judge Fortunato
Operario, who initially handled the case, questioned some witnesses in an overzealous manner and
assum[ed] the dual role of magistrate and advocate.[17]

These arguments are not meritorious. First, judges cannot be expected to rely on the testimonies of
every witness. In ascertaining the facts, they determine who are credible and who are not. In doing so,
they consider all the evidence before them. In other words, the mere fact that Judge Noynay based his
decision on the testimonies of respondents witnesses does not necessarily mean that he did not
consider those of petitioners. Second, we find no sufficient showing that Judge Operario was overzealous
in questioning the witnesses. His questions merely sought to clarify their testimonies. In all, we reject
petitioners contention that their right to adduce evidence was violated.

Alleged Failure to State Clearly the Facts and the Law

We are not convinced by petitioners contention, either, that both the trial and the appellate courts failed
to state clearly and distinctly the facts and the law involved in the case. As can be gleaned from their
Decisions, both courts clearly laid down their bases for awarding monetary damages to respondents.

Both the RTC and the CA found that a contract of carriage existed between petitioners and Dominador
Mercader when he boarded Bus No. 142 in Pasay City on March 16, 1983. Petitioners failed to transport
him to his destination, because the bus fell into a river while traversing the Bugko Bailey Bridge.
Although he survived the fall, he later died of asphyxia secondary to drowning.

We agree with the findings of both courts that petitioners failed to observe extraordinary diligence[18]
that fateful morning. It must be noted that a common carrier, by the nature of its business and for
reasons of public policy, is bound to carry passengers safely as far as human care and foresight can
provide. It is supposed to do so by using the utmost diligence of very cautious persons, with due regard
for all the circumstances.[19] In case of death or injuries to passengers, it is presumed to have been at
fault or to have acted negligently, unless it proves that it observed extraordinary diligence as prescribed
in Articles 1733 and 1755[20] of the Civil Code.

We sustain the ruling of the CA that petitioners failed to prove that they had observed extraordinary
diligence.

First, petitioners did not present evidence on the skill or expertise of the driver of Bus No. 142 or the
condition of that vehicle at the time of the incident.
Second, the bus was overloaded at the time. In fact, several individuals were standing when the incident
occurred.[21]

Third, the bus was overspeeding. Its conductor testified that it had overtaken several buses before it
reached the Bugko Bailey Bridge.[22] Moreover, prior to crossing the bridge, it had accelerated and
maintained its speed towards the bridge.[23]

We therefore believe that there is no reason to overturn the assailed CA Decision, which affirmed that of
the RTC. It is a well-settled rule that the trial courts factual findings, when affirmed by the appellate
court, are conclusive and binding, if they are not tainted with arbitrariness or oversight of some fact or
circumstance of significance and influence.[24] As clearly discussed above, petitioners have not
presented sufficient ground to warrant a deviation from this rule.

Finally, we cannot fault the appellate court in its computation of the damages and lost earnings, since it
effectively computed only net earnings in accordance with existing jurisprudence.[25]

WHEREFORE, the Petition is hereby DENIED, and the assailed Decision AFFIRMED. Costs against
petitioners.

SO ORDERED.

RULE 13
[G.R. No. 141255. June 21, 2005]

LUCIANO ELLO and GAUDIOSA ELLO, petitioners, vs. THE COURT OF APPEALS, SPRINGFIELD
DEVELOPMENT CORPORATION, and CONSTANTINO G. JARAULA, respondents.

DECISION

Before us is a petition for certiorari[1] assailing the (1) Resolution[2] dated May 31, 1999 of the Court of
Appeals in CA-G.R. SP No. 49904 dismissing outright the petition for review filed by spouses Luciano and
Gaudiosa Ello, petitioners herein, on the ground that they failed to incorporate therein the affidavit of
proof of service required under Section 11 in relation to Section 13, Rule 13 of the 1997 Rules of Civil
Procedure, as amended; and (2) Resolution dated October 8, 1999 denying their motion for
reconsideration.

In their petition, petitioners averred that on May 15, 1996, Springfield Development Corporation and
Constantino G. Jaraula, respondents herein, jointly filed with the Municipal Trial Court in Cities (MTCC),
Branch 4, Cagayan de Oro City, a complaint against them for forcible entry with application for
preliminary mandatory injunction, docketed as Civil Case No. 96-May-346.

The complaint alleges inter alia that respondent Springfield Development Corporation is the owner and
actual possessor of Lot No. 19-C[3] covered by Transfer Certificate of Title (TCT) No. T-92571, while
respondent Constantino Jaraula is the owner and actual possessor of Lot No. 2291-B covered by TCT No.
T-63088, both situated at Gusa, Cagayan de Oro City. The two lots adjoin each other and were originally
parts of Lot No. 2291, a 12-hectare lot which has been developed by respondents as the Mega Heights
Subdivision. In January, March and April of 1996, petitioner spouses Luciano and Gaudiosa Ello and their
hired personnel surreptitiously and stealthily occupied respondents lots, built a make-shift shed under
the trees, and fenced the area they occupied. Respondents then demanded that petitioners and their
hired personnel vacate the area but they refused. Instead, they threatened and prevented respondents
from developing their lots into a subdivision. The matter reached the barangay but the parties failed to
reach an amicable settlement. Thus, the Barangay Lupon Tagapamayapa issued a Certificate to File
Action. Respondents prayed that petitioners be ordered to vacate the lots and to remove the
improvements they constructed thereon.[4]

Petitioners, in their answer, specifically denied respondents allegations, claiming that they have been in
possession of the disputed lots for over thirty (30) years; that the Department of Agrarian Reform
Adjudication Board (DARAB), in its Decision dated October 5, 1995 in DARAB Case No. 305, declared that
the lots are covered by the Comprehensive Agrarian Reform Program (CARP) and petitioners are among
the identified beneficiaries thereof; that the said Decision has become final and executory; and that,
therefore, the MTCC has no jurisdiction over respondents complaint for forcible entry.

On December 4, 1996, the MTCC rendered its Decision dismissing the complaint, thus:

WHEREFORE, in view of the foregoing consideration and for failure of the plaintiffs to establish by
preponderance of evidence that they have brought the instant case within one year from entry of
defendant, and in view of the fact that the land is subject matter of a DARAB Case No. 305, the court
believes that it has no jurisdiction to try the instant case and, therefore, orders the dismissal of the
same. The counterclaim filed by the defendants is also dismissed for lack of merit.

SO ORDERED.[5]

On appeal, the Regional Trial Court (RTC), Branch 17, Cagayan de Oro City, in its Decision dated August 5,
1998, reversed the MTCC Decision, thus:

WHEREFORE, premises considered, the Decision of the lower court in Civil Case No. 96-May-346 of
Branch 4, Municipal Trial Court in Cities, Cagayan de Oro City, rendered on December 4, 1996, is hereby
ordered reversed and set aside, and this court hereby finds a case in favor of the plaintiffs and against
the defendants, and hereby orders the defendants Luciano Ello and Gaudiosa Ello, their agents and
privies to vacate Lots Nos. 19-C and 2291-B within ninety (90) days and deliver the same to the plaintiffs
Springfield Development Corporation and Constantino Jaraula, and to refrain from ever disturbing and
interrupting the plaintiffs in their rightful and feaceful possession and enjoyment of the parcels of land
subject-matter of this case.

Costs against the defendants.

SO ORDERED.[6]

The RTC held in part:

The fact that the defendants are now occupying Lots. Nos. 19-C and 2291-B without any concrete
permanent improvement within the area is a testament that they only entered the same recently. And to
this effect was the testimony of Architect Richard Tan, project manager of Mega Heights Subdivision,
who explained that prior to January, 1996, the defendants were nowhere to be found in Lots Nos. 19-C
and 2291-B.

It is, therefore, the considered view of the court that the filing of the instant action for forcible entry in
May, 1996 was done within one (1) year from the time of entry by the defendants in Lots Nos. 19-C and
2291-B. The court is morally convinced that while the defendants were in possession and occupation of
Lot No. 2525 for many years, they have recently expanded their occupation and possession to Lots Nos.
19-C and 2291-B, lots adjacent to and adjoining Lot No. 2525. x x x.

On the second issue, the court is likewise of the considered view that the lower court has jurisdiction
over this case. The court is morally convinced that the Decision of DARAB dated October 5, 1995 has
become moot and academic with the payment and relocation of the occupants of Lot No. 2291 (Exhibits
F, G, H, and I), even before the DARAB Decision was rendered. The exclusion of the defendants from the
payment of compensation is consistent with the findings of the lower court that the heirs of Nicholas
Capistrano believes that the area occupied by the defendant is in excess of Lot 2291 per testimony of
Engr. Belen and defendant Luciano Ello. This is once more supported by the notes from CENRO (Exhibits
6 and 6-A) which show that defendants are occupants and possessors of Lot No. 2525. Apparently, the
DAR had the same thing in mind because the defendants were not included in the original listing of
actual occupants of Lot No. 2291.

On October 22, 1998, petitioners filed with the Court of Appeals a petition for review, docketed as CA-
G.R. SP No. 49904.

In a minute Resolution dated May 31, 1999,[7] the petition was dismissed outright on the ground that it
does not contain the affidavit of service required by Section 11 in relation to Section 13, Rule 13 of the
1997 Rules of Civil Procedure, as amended.

Petitioners, through the Public Attorneys Office, promptly filed a motion for reconsideration attaching
therewith the affidavit of service dated June 17, 1999, executed by Gabriel M. Manasan. In his affidavit,
Manasan stated that he is the messenger of the Public Attorneys Office, Cagayan de Oro City which
directed him to file with the Court of Appeals through the mail the petition for review in CA-G.R. SP No.
49904, LUCIANO CIANO ELLO and GAUDIOSA ELLO, Petitioners, versus SPRINGFIELD DEVT. CORP. and
CONSTANTINO JARAULA, Respondents; that on October 21, 1998, he personally served copies of the
petition to the Law Office of respondents counsel Atty. Constantino Jaraula at No. 12th St., Nazareth,
Cagayan de Oro City and to the RTC, Branch 4, Cagayan de Oro City, per the stamped receipt indicated in
their own copy of the petition;[8] and that the following day, October 22, 1998, he mailed copies thereof
to the Court of Appeals per postal Registry Receipt No. 36680 attached to his affidavit.[9]

In their motion for reconsideration, petitioners averred that they failed to append to their petition the
affidavit of service due to an excusable oversight considering the time constraint in filing the petition
with its voluminous annexes; that they have a meritorious case as evidenced by the final Decision in
DARAB Case No. 305 declaring them as CARP beneficiaries of the disputed property; and that there
would be a denial of substantial justice if their petition would be dismissed merely by reason of
technicality.[10] Citing previous rulings of this Court[11] that procedural rules should be liberally
construed in order to promote substantial justice, petitioners prayed that the affidavit of proof of service
attached to their motion be admitted and that their petition be given due course.
Still unconvinced, the Court of Appeals, in its Resolution dated October 8, 1999, denied petitioners
motion for reconsideration, invoking this Courts ruling in Solar Team Entertainment, Inc. vs. Judge
Ricafort[12] that strictest compliance with Section 11 of Rule 13 is mandated.[13]

Petitioners now come to us via the instant petition for certiorari assailing the twin minute Resolutions of
the Court of Appeals. They allege that the said court acted with grave abuse of discretion amounting to
lack of jurisdiction by persisting in dismissing their petition for review solely on technical grounds
without regard whatsoever to the substantial merit of their cause and the resulting injustice that could
be created thereby.[14] They pray that the challenged Resolutions be annulled and that their petition be
given due course.

Respondents, in their comment on the petition, counter that the Court of Appeals, in issuing the assailed
Resolutions, properly exercised its discretion. They contend that petitioners, by failing to attach to their
petition the required affidavit of service, only succeeded in demonstrating their contempt for the Rules
and the Honorable Supreme Courts directive in Solar Team Entertainment, Inc. vs. Judge Ricafort.[15]

The issue here is whether the Court of Appeals gravely abused its discretion when it dismissed outright
petitioners petition for review on the sole technical ground that it does not contain the affidavit of
service as required by Section 11 in relation to Section 13, Rule 13 of the 1997 Rules of Civil Procedure,
as amended.

Sections 3 and 5, Rule 13 of the 1997 Rules of Civil Procedure, as amended, prescribe two modes of filing
and service of pleadings, motions, notices, orders, judgments and other papers. These are: (a) by
personal delivery, governed by Section 6 of the same Rule; and (b) by mail, under Section 7 thereof. If
service cannot be done either personally or by mail, substituted service may be resorted to pursuant to
Section 8 of the same Rule.

However, Section 11 of Rule 13 requires that whenever practicable, the filing of pleadings and other
papers in court, as well as the service of said papers on the adverse party or his counsel, must be done
personally. But if such filing and service were through a different mode, the party concerned must
submit a written explanation why they were not done personally. Section 11 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. (n)

In relation to Section 11, Section 13 provides:

SEC. 13. Proof of service. Proof of personal service shall consist of a written admission of the party
served, or the official return of the server, or the affidavit of the party serving, containing a full
statement of the date, place and manner of service. If the service is by ordinary mail, proof thereof shall
consist of an affidavit of the person mailing of facts showing compliance with Section 7 of this Rule. If
service is made by registered mail, proof shall be made by such affidavit and the registry receipt issued
by the mailing office. The registry return card shall be filed immediately upon its receipt by the sender, or
in lieu thereof the unclaimed letter together with the certified or sworn copy of the notice given by the
postmaster to the addressee. (10a) (Underscoring supplied)
Section 11 is a new provision incorporated in the 1997 Rules of Civil Procedure, as amended, prescribing
the mode of filing and service of pleadings, motions and other papers. In Solar Team Entertainment, Inc.
vs. Judge Ricafort (supra), we explained that the primary objective of this new provision is to foil the
mischief of delay, thus:

Personal service and filing are preferred for obvious reasons. Plainly, such should expedite action or
resolution on a pleading, motion or other paper; and conversely, minimize, if not eliminate, delays likely
to be incurred if service or filing is done by mail, considering the inefficiency of the postal service.
Likewise, personal service will do away with the practice of some lawyers who, wanting to appear clever,
resort to the following less than ethical practices: (1) serving or filing pleadings by mail to catch opposing
counsel off-guard, thus leaving the latter with little or no time to prepare, for instance, responsive
pleadings or an opposition; or (2) upon receiving notice from the post office that the registered parcel
containing the pleading of or other paper from the adverse party may be claimed, unduly procrastinating
before claiming the parcel, or worse, not claiming it at all, thereby causing undue delay in the disposition
of such pleading or other papers.

The requirement under Section 11 is mandatory. Any violation of this Rule may be cause for the court to
consider the paper as not filed.

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. Thus, we stressed in Solar :

If only to underscore the mandatory nature of this innovation to our set of adjective rules requiring
personal service whenever practicable, Section 11 of Rule 13 then gives the court the discretion to
consider a pleading or paper as not filed if the other modes of service or filing were resorted to and no
written explanation was made as to why personal service was not done in the first place. The exercise of
discretion must, necessarily, consider the practicability of personal service, for Section 11 itself begins
with the clause whenever practicable.

We thus take this opportunity to clarify that under Section 11, Rule 13 of the Rules of Civil Procedure,
personal service and filing is the general rule, and resort to other modes of service and filing, the
exception. Henceforth, whenever personal service or filing is practicable, in light of the circumstances of
time, place and person, personal service or filing is mandatory. Only when personal service or filing is not
practicable may resort to other modes be had, which must then be accompanied by a written
explanation as to why personal service or filing was not practicable to begin with. In adjudging the
plausibility of an explanation, a court shall likewise consider the importance of the subject matter of the
case or the issues involved therein, and the prima facie merit of the pleading sought to be expunged for
violation of Section 11. x x x. (Underscoring supplied)

In the present case, there is no question that petitioners violated Section 11 of Rule 13 by failing to
append the affidavit of service to their petition for review filed with the Court of Appeals. We note,
though, that petitioners, upon receipt of the Court of Appeals challenged Resolution dismissing outright
their petition due to such omission, promptly filed a motion for reconsideration, readily acknowledging
their procedural lapse and attaching therewith the required affidavit of service.
Significantly, Gabriel Manasans affidavit of service shows that the petition for review was filed with the
Court of Appeals in Manila through registered mail. This mode of filing is permitted under Section 11 of
Rule 13 since it s obviously impractical for petitioners and their counsel, who are all residents of Cagayan
de Oro City, to personally file their petition in Manila. As to the service of copies of the petition,
Manasan personally served the same on respondents counsel and the RTC in Cagayan de Oro City, thus
fully complying with Section 11.

Clearly, Manasans affidavit of service is a substantial compliance with the requirement under Section 11.
It bears stressing that petitioners procedural lapse in not appending such affidavit to their petition did
not in any way thwart the laudable objective of Section 11 as stated in Solar, i.e., to quell the lawyers
unethical practice of deliberately resorting to delays in the filing and service of pleadings, motions and
other papers. Indeed, the evil sought to be prevented by the new rule is absent here. Also, there is
absolutely no indication from petitioners omission that they demonstrated their contempt for the Rules
and our directive in Solar, as claimed by respondents.

Moreover, we note that the Court of Appeals, despite petitioners motion for reconsideration showing
compliance with Section 11, still denied the same, without taking into account the importance of the
issues raised in the petition.

It must be stressed that the findings of fact of the MTCC and the RTC are diametrically opposed from
each other. The MTCC found that for many years before respondents filed the complaint for forcible
entry, petitioners have been in possession of the disputed property awarded to them by the CARP. On
the contrary, the RTC found that they are not CARP beneficiaries.

In their petition for review before the Court of Appeals, petitioners ascribed to the RTC the following
errors:

1. In ruling that the filing of the forcible entry complaint was within one (1) year from petitioners entry
on the subject land.

2. In finding that respondents are the owners in fee simple of the subject land; and

3. In ruling that the Decision in DARAB Case No. 305 has become moot and academic.

The assigned errors are purely factual in nature which only the Court of Appeals can determine. By
dismissing the petition outright would absolutely foreclose the resolution of these errors. Clearly, justice
would be better served if the Court of Appeals resolves the factual issues raised in the petition.

In Sebastian vs. Morales,[16] we ruled that rules of procedure must be faithfully followed except only
when for persuasive reasons, they may be relaxed to relieve a litigant of an injustice not commensurate
with his failure to comply with the prescribed procedure, which exception is present here.

In fine, we hold that the Court of Appeals, in issuing its assailed Resolutions, acted with grave abuse of
discretion amounting to lack or excess of jurisdiction.

WHEREFORE, the instant petition for certiorari is hereby GRANTED. The challenged Resolutions dated
May 31, 1999 and October 8, 1999 of the Court of Appeals in CA-G.R. SP No. 49904 are ANNULLED and
SET ASIDE. The petition for review is ordered REINSTATED.
SO ORDERED.

RULE 14
GUIGUINTO CREDIT COOPERATIVE, INC. (GUCCI), Petitioner,
- versus
Ynares-Santiago, Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ.

AIDA TORRES, NONILO TORRES and SHERYL ANN TORRES-HOLGADO, Respondents.

G.R. No. 170926

September 15, 2006

DECISION

This petition for review on certiorari under Rule 45 of the Rules of Court seeks to annul and set aside the
Decision of the Court of Appeals dated August 24, 2005[1] in CA-G.R. SP No. 89974, declaring the
Decision of the Regional Trial Court of Bulacan, Branch 14, dated September 15, 2004[2] in Civil Case No.
232-M-2003 null and void for having been rendered without jurisdiction, and its Resolution dated
December 9, 2005,[3] denying petitioners motion for reconsideration.

Respondents are members of Guiguinto Credit Cooperative, Inc. (GUCCI). They availed of loans from the
cooperative but were unable to pay on the due dates despite demands. Hence, on March 24, 2003,
petitioner filed a complaint before the Regional Trial Court of Bulacan for collection of sum of money and
damages which was docketed as Civil Case No. 232-M-2003 and raffled to Branch 14.

Summons against respondents were served through a certain Benita S. Pagtalunan who received the
same on April 22, 2003.[4] The Return of Summons was filed on April 24, 2003 by Process Server
Valeriano P. Badato which stated:

RESPECTFULLY RETURNED to the Honorable Court the herein Summons, together with their Complaints
and Annexes in connection with the service of the same with the information that it was received by Ms.
BENITA C. PAGTALUNAN secretary of the defendants on April 22, 2003 at their given address.

PROOF OF SERVICE CAN BE FOUND on the original copy of Summons as shown by her signature therein.

RESPECTFULLY SUBMITTED.

Malolos, Bulacan, April 24, 2003.

(Sgd.) VALERIANO P. BADATO

Process Server[5]
On November 18, 2003, petitioner filed a motion to declare respondents in default which was granted by
the trial court thus:
Submitted is a Motion to Declare Defendants in Default [f]iled by plaintiffs through counsel, Atty. Jose I.
dela Rama, Jr.

Records show that on April 22, 2003, Summons together with the complaint and its annexes were served
to defendants Aida Torres, Nonilo Torres and Sheryl Ann Torres through their Secretary Ms. Benita C.
Pagtalunan per process Servers Return dated April 24, 2003. Despite receipt of the same defendants
failed to file their Answer and/or responsive pleading within the reglementary period.

WHEREFORE, in view of the foregoing premises, the Motion to Declare Defendants in default is
GRANTED. The defendants are hereby declared in default.

The plaintiff is hereby allowed to present its evidence ex-parte before the court on February 10, 2004 at
8:30 a.m.

SO ORDERED.[6]

After presenting petitioners evidence ex-parte, the trial court rendered judgment on September 15,
2004, the dispositive portion of which reads:

ACCORDINGLY, judgment is hereby rendered, ordering the defendants to pay plaintiff the following:

1. For Aida Torres:

a. The amount of P163,516.80 from April, 2004 plus legal interest until the said amount is fully paid;

2. For Nonilo Torres:

a. The amount of P278,151.58 from April, 2004 plus legal interest until the said amount is fully paid;

3. For Sheryl Ann Torres:

a. The amount of P15,903.93 from April, 2004 plus legal interest until the said amount is fully paid;

4. To pay P10,000.00, jointly and severally, as attorneys fees.

5. Costs of suit.

SO ORDERED.[7]

Petitioner thereafter moved for the issuance of a writ of execution, which was granted and accordingly,
the writ of execution was issued on even date.[8]
On May 4, 2005, Sheriff Felixberto L. Samonte levied respondents house and lot covered by Transfer
Certificate of Title No. RT-22289 (T-285668) and the same was scheduled to be sold at public auction on
June 7, 2005 when the Court of Appeals issued a temporary restraining order.[9]
On August 24, 2005, the Court of Appeals annulled the judgment of the trial court on the ground that it
did not acquire jurisdiction over the persons of respondents since they were not validly served with
summons and neither did they voluntarily appear in court.[10] According to the appellate court, the
service of summons to Pagtalunan was in violation of Section 6, Rule 14 of the Rules of Court because
there was no explanation why resort to substituted service of summons was made. Thus, the appellate
court held that respondents were deprived of their right to due process.

The Court of Appeals denied petitioners motion for reconsideration,[11] hence, this petition on the
following assignment of errors:

The Court of Appeals erred when it granted the Annulment of Judgment despite the active participation
of the respondents in the court proceeding without questioning the jurisdiction of the Court.

II

The Court of Appeals erred when it granted the Annulment of Judgment despite the availability of legal
remedies provided for by law. Hence, respondents are barred by estoppel and laches to question the
jurisdiction of the court.

III

The Court of Appeals erred when it dismissed the Complaint and absolved the respondents of any civil
liability to the Cooperative without evidence having been presented in the Court of Appeals. The Court
of Appeals likewise erred when it acted beyond what is being prayed for.[12]

Petitioner alleges that the trial court rightly assumed jurisdiction over the persons of respondents,
asserting that No. 180 San Vicente Ferrer St., Rosaryville Subd., Sta. Cruz, Guiguinto, Bulacan, is the
residence of all the respondents as shown in (a) the Affidavit of Merit of Sheryl Ann Torres attached to
the Petition, (b) the Special Power of Attorney executed by Nonilo and Aida Torres and (c) the
Verification/Certification executed under oath by Sheryl Ann Torres.[13] Petitioner asserts that the
service of summons to Pagtalunan at the same address was valid pursuant to the rules and applicable
jurisprudence.

Petitioner avers that respondents cannot avail of the remedy of annulment of judgment under Rule 47
since there are other available remedies under the Rules of Court,[14] such as a motion for new trial or
reconsideration, petition for relief from judgment, or an original action for certiorari under Rule 65.

Finally, petitioner asserts that the Court of Appeals erred in concluding that the obligations of the
respondents are guaranteed by their co-signors capital investments. It claims that the appellate court
completely disregarded that the co-signors in the persons of Danilo Santos and Carmelita Reyes had
withdrawn their capital shares in the cooperative. The Court of Appeals, according to petitioner,
concluded that the obligations of the respondents were already paid, without the latter having
presented any proof or evidence to that effect.[15]
 On the other hand, respondents argue that the Court of Appeals did not commit reversible error when it
granted the annulment of judgment considering that the trial court, which rendered the judgment,
lacked jurisdiction over their persons. They were not validly served with summons nor did they
voluntarily appear and submit themselves to the jurisdiction of the trial court. Neither did they actively
participate in the proceedings conducted therein. Respondents assert that their right to due process was
violated when the trial court rendered the questioned decision.[16]

Respondents also aver that the filing of the petition for annulment of judgment is proper there being no
recourse to the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies,
which are no longer available through no fault of their own. They assert that laches and estoppel are not
applicable to the case at bar.[17]

The issues to be resolved are: (a) whether summons was validly served on the respondents; and (b)
whether the judgment of the trial court was correctly annulled by the Court of Appeals.

Summons is a writ by which the defendant is notified of the action brought against him. Service of such
writ is the means by which the court acquires jurisdiction over his person.[18] Jurisdiction over the
person of the defendant is acquired through coercive process, generally by the service of summons
issued by the court, or through the defendants voluntary appearance or submission to the court.

Where the defendant is a natural person, service may be personal, substituted, by publication and such
other mode of service as the court may deem sufficient.

In an action in personam, jurisdiction over the person of the defendant is necessary for the court to
validly try and decide the case. Jurisdiction over the person of a resident defendant who does not
voluntarily appear in court can be acquired by personal service of summons as provided under Section 7,
Rule 14 of the Rules of Court. If he cannot be personally served with summons within a reasonable time,
substituted service may be made in accordance with Section 8 of the said Rule. If he is temporarily out of
the country, any of the following modes of service may be resorted to: (1) substituted service set forth in
Section 8; (2) personal service outside the country, with leave of court; (3) service by publication, also
with leave of court; or (4) any other manner the court may deem sufficient.[19]

In these types of civil actions, summons on the defendant must be served by handing a copy thereof to
the defendant in person, or in case of refusal, by tendering it to him. If efforts to find defendant
personally makes prompt service impossible, service may be effected by leaving copies of the summons
at the defendants dwelling house or residence with some person of suitable age and discretion residing
therein, or by leaving the copies at the defendants office or regular place of business with some
competent person in charge thereof.[20] The proper service of summons is a critical step in litigation
because upon such service rests the courts acquisition of jurisdiction over the person of the defendant.
In the absence of a valid waiver, trial and judgment without such service are null and void.

In the instant case, the Court of Appeals correctly ruled that since substituted service was availed of in
lieu of personal service, there should be a report stating that Pagtalunan was one with whom
respondents had a relationship of trust and confidence that would ensure that the latter will receive or
be notified of the summons issued in their names. This is because substituted service may only be
availed of when the respondents could not be served personally within a reasonable period of time, and
such impossibility of prompt service must be shown by stating that earnest efforts have been made to
find the respondents personally and that such efforts have failed. Such requirements under Sections 6
and 7 of Rule 14 must be followed strictly, faithfully and fully in order not to deprive any person of his
property by violating his constitutional right to due process. The statutory requirements of substituted
service must be strictly construed since it is an extraordinary method of service in derogation of personal
service of summons, availed of only under certain conditions imposed by the Rules of Court. Any
substituted service other than that authorized under Section 7 is deemed ineffective and contrary to law.

Granting that Pagtalunan is the personal secretary of Aida Torres, as appearing in the Affidavit of Merit of
Sheryl Ann Torres and attached to the Petition of Annulment filed before the Court of Appeals, there is
no showing that the former had indeed a relationship of trust and confidence with the three
respondents. It appears that the process server hastily and capriciously resorted to substituted service of
summons without ascertaining the whereabouts of the respondents. Such service of summons is not
binding upon respondents Nonilo and Sheryl Ann Torres whose relationship with Pagtalunan was neither
readily ascertained nor adequately explained in the Return of Summons. Also, no earnest efforts were
made to locate respondent Aida Torres who was allegedly working abroad at the time summons was
served on her person. No explanation why substituted service was resorted to through Pagtalunan was
stated in the Return.

The Return of Summons by the process server showed that no effort was exerted and no positive step
was taken to locate and serve the summons personally on respondents. Without specifying the details of
the attendant circumstances or of the efforts exerted to serve the summons, a general statement that
such efforts were made will not suffice for purposes of complying with the rules of substituted service of
summons.

It must be emphasized that personal service of summons is the mode which must be adopted whenever
practicable. It ought to be effected either by handing a copy thereof to the defendant in person, or if he
refuses, by tendering it to him.

In Ang Ping v. Court of Appeals,[21] we ruled:

Jurisdiction over the person of the defendant in civil cases is acquired either by his voluntary
appearance in court and his submission to its authority or by service of summons. x x x

Well-settled is the rule that summons must be served upon the defendant himself. It is only when the
defendant cannot be served personally within a reasonable time that substituted service may be
resorted to and such impossibility of prompt service should be shown by stating that efforts have been
made to find the defendant personally and that such efforts have failed. This is necessary because
substituted service is in derogation of the usual method of service. It is a method extraordinary in
character and hence may be used only as prescribed and in the circumstances authorized by statute. The
statutory requirements of substituted service must be followed strictly, faithfully and fully, and any
substituted service other than that authorized by statute is considered ineffective.

It should be emphasized that the service of summons is not only required to give the court jurisdiction
over the person of the defendant, but also to afford the latter an opportunity to be heard on the claim
made against him. Thus, compliance with the rules regarding the service of summons is as much an issue
of due process as of jurisdiction.[22]
In Avon Insurance PLC v. Court of Appeals,[23] we held:

Fundamentally, the service of summons is intended to give official notice to the defendant or
respondent that an action has been commenced against it. The defendant or respondent is thus put on
guard as to the demands of the plaintiff as stated in the complaint. The service of summons upon the
defendant becomes an important element in the operation of a courts jurisdiction upon a party to a suit,
as service of summons upon the defendant is the means by which the court acquires jurisdiction over his
person. Without service of summons, or when summons are improperly made, both the trial and the
judgment, being in violation of due process, are null and void, unless the defendant waives the service of
summons by voluntarily appearing and answering the suit.

When a defendant voluntarily appears, he is deemed to have submitted himself to the jurisdiction of the
court. This is not, however, always the case. Admittedly, and without subjecting himself to the courts
jurisdiction, the defendant in an action can, by special appearance object to the courts assumption on
the ground of lack of jurisdiction. If he so wishes to assert this defense, he must do so seasonably by
motion for the purpose of objecting to the jurisdiction of the court, otherwise, he shall be deemed to
have submitted himself to that jurisdiction. x x x

xxxx

If the defendant, besides setting up in a motion to dismiss his objection to the jurisdiction of the court,
alleges at the same time any other ground for dismissing the action, or seeks an affirmative relief in the
motion, he is deemed to have submitted himself to the jurisdiction of the court.[24]

In Laus v. Court of Appeals,[25] we reiterated that substituted service must: (a) indicate the impossibility
of service of summons within a reasonable time, (b) specify the efforts exerted to locate the petitioners,
and (c) state that it was served on a person of sufficient age and discretion residing therein.[26] We held
that the pre-condition that substituted service may be resorted to only if personal service cannot be
made within a reasonable time must be strictly followed.

In the instant case, there was an undue, if not indecent, haste to serve the summons at the first attempt
without making sure that personal service was an impossibility because either the respondents had left
for a foreign country or an unknown destination with no definite date of returning within a reasonable
period, or had gone into hiding to avoid service of any process from the courts. Since the substituted
service was not validly effected, the trial court did not acquire jurisdiction over the persons of the
respondents. The order of default, the judgment by default, the writ of execution issued by it, as well as
the auction sale of the respondents properties levied on execution are, therefore, null and void.

Statutes prescribing modes other than personal service of summons must be strictly complied with to
give the court jurisdiction, and such compliance must appear affirmatively on the return.[27]
In the case of Jose v. Boyon,[28] we observed:

In the instant case, it appears that the process server hastily and capriciously resorted to substituted
service of summons without actually exerting any genuine effort to locate respondents. A review of the
records reveals that the only effort he exerted was to go to No. 32 Ariza Drive, Camella Homes, Alabang
on July 22, 1998, to try to serve the summons personally on respondents. While the Return of Summons
states that efforts to do so were ineffectual and unavailing because Helen Boyon was in the United States
and Romeo Boyon was in Bicol, it did not mention exactly what efforts if any were undertaken to find
respondents. Furthermore, it did not specify where or from whom the process server obtained the
information on their whereabouts. x x x

xxxx

The Return of Summons shows no effort was actually exerted and no positive step taken by either the
process server or petitioners to locate and serve the summons personally on respondents. At best, the
Return merely states the alleged whereabouts of respondents without indicating that such information
was verified from a person who had knowledge thereof. Certainly, without specifying the details of the
attendant circumstances or of the efforts exerted to serve the summons, a general statement that such
efforts were made will not suffice for purposes of complying with the rules of substituted service of
summons.[29]

We explained in Venturanza v. Court of Appeals[30] how the impossibility of personal service should be
shown by the process server:

The substituted service should be availed only when the defendant cannot be served promptly in
person. Impossibility of prompt service should be shown by stating the efforts made to find the
defendant personally and the failure of such efforts. The statement should be made in the proof of
service. This is necessary because substituted service is in derogation of the usual method of service. It
has been held that substituted service is a method extraordinary in character, and hence may be used
only as prescribed in the circumstances authorized by statute. Thus, the statutory requirements of
substituted service must be followed strictly, faithfully, and any substituted service other than that
authorized by the statute is considered ineffective.[31]

Jurisdiction over the persons of the respondents never vested with the trial court since the manner of
substituted service by the process server is deemed invalid and ineffective. Clearly, there was a violation
of due process because of the defective service of summons. The judgment of the trial court should be
annulled on the ground of lack of jurisdiction, since the respondents were not properly notified of the
action filed against them, and denied them the chance to answer the complaint before the court, thus
depriving them of an opportunity to be heard.

Under Section 2 of Rule 47, judgments may be annulled on grounds of extrinsic fraud and lack of
jurisdiction, which refers to either lack of jurisdiction over the person of the defending party or over the
subject matter of the claim.[32] A judgment of annulment sets aside the questioned judgment or final
order or resolution and renders the same null and void, without prejudice to the original action being
refiled in the proper court.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated August 24, 2005 in CA-
G.R. SP No. 89974, annulling the decision of the Regional Trial Court of Bulacan, Branch 14, dated
September 15, 2004 in Civil Case No. 232-M-2003 for having been rendered without jurisdiction and the
Resolution dated and December 9, 2005, denying the motion for reconsideration, are AFFIRMED.

No costs.

SO ORDERED.
RULE 15
SPOUSES VICENTE AFULUGENCIA and LETICIA AFULUGENCIA, Petitioners,
vs.
METROPOLITAN BANK & TRUST CO. and EMMANUEL L. ORTEGA, Clerk of Court, Regional Trial Court and
Ex-Officio Sheriff, Province of Bulacan, Respondents.
G.R. No. 185145 February 5, 2014

DECISION

Section 6,1 Rule 25 of the Rules of Court (Rules) provides that "a party not served with written
interrogatories may not be compelled by the adverse party to give testimony in open court, or to give a
deposition pending appeal." The provision seeks to prevent fishing expeditions and needless delays. Its
goal is to maintain order and facilitate the conduct of trial.

Assailed in this Petition for Review on Certiorari2 are the April 15, 2008 Decision3 of the Court of
Appeals (CA) in CA-G.R. SP No. 99535 which dismissed petitioners' Petition for Certiorari for lack of merit
and its October 2, 2008 Resolution4 denying petitioners' Motion for Reconsideration.5

Factual Antecedents

Petitioners, spouses Vicente and Leticia Afulugencia, filed a Complaint6 for nullification of mortgage,
foreclosure, auction sale, certificate of sale and other documents, with damages, against respondents
Metropolitan Bank & Trust Co. (Metrobank) and Emmanuel L. Ortega (Ortega) before the Regional Trial
Court (RTC) of Malolos City, where it was docketed as Civil Case No. 336-M-2004 and assigned to Branch
7.

Metrobank is a domestic banking corporation existing under Philippine laws, while Ortega is the Clerk of
Court and Ex-Officio Sheriff of the Malolos RTC.

After the filing of the parties’ pleadings and with the conclusion of pre-trial, petitioners filed a Motion for
Issuance of Subpoena Duces Tecum Ad Testificandum7 to require Metrobank’s officers8 to appear and
testify as the petitioners’ initial witnesses during the August 31, 2006 hearing for the presentation of
their evidence-in-chief, and to bring the documents relative to their loan with Metrobank, as well as
those covering the extrajudicial foreclosure and sale of petitioners’ 200-square meter land in
Meycauayan, Bulacan covered by Transfer Certificate of Title No. 20411 (M). The Motion contained a
notice of hearing written as follows:

NOTICE

The Branch Clerk of Court

Regional Trial Court
Branch 7, Malolos, Bulacan

Greetings:
Please submit the foregoing motion for the consideration and approval of the Hon. Court immediately
upon receipt hereof.

(signed)
Vicente C. Angeles9

Metrobank filed an Opposition10 arguing that for lack of a proper notice of hearing, the Motion must be
denied; that being a litigated motion, the failure of petitioners to set a date and time for the hearing
renders the Motion ineffective and pro forma; that pursuant to Sections 1 and 611 of Rule 25 of the
Rules, Metrobank’s officers – who are considered adverse parties – may not be compelled to appear and
testify in court for the petitioners since they were not initially served with written interrogatories; that
petitioners have not shown the materiality and relevance of the documents sought to be produced in
court; and that petitioners were merely fishing for evidence.

Petitioners submitted a Reply12 to Metrobank’s Opposition, stating that the lack of a proper notice of
hearing was cured by the filing of Metrobank’s Opposition; that applying the principle of liberality, the
defect may be ignored; that leave of court is not necessary for the taking of Metrobank’s officers’
depositions; that for their case, the issuance of a subpoena is not unreasonable and oppressive, but
instead favorable to Metrobank, since it will present the testimony of these officers just the same during
the presentation of its own evidence; that the documents sought to be produced are relevant and will
prove whether petitioners have paid their obligations to Metrobank in full, and will settle the issue
relative to the validity or invalidity of the foreclosure proceedings; and that the Rules do not prohibit a
party from presenting the adverse party as its own witness.

Ruling of the Regional Trial Court

On October 19, 2006, the trial court issued an Order13 denying petitioners’ Motion for Issuance of
Subpoena Duces Tecum Ad Testificandum, thus:

The motion lacks merit.

As pointed out by the defendant bank in its opposition, the motion under consideration is a mere scrap
of paper by reason of its failure to comply with the requirements for a valid notice of hearing as specified
in Sections 4 and 5 of Rule 15 of the Revised Rules of Court. Moreover, the defendant bank and its
officers are adverse parties who cannot be summoned to testify unless written interrogatories are first
served upon them, as provided in Sections 1 and 6, Rule 25 of the Revised Rules of Court.

In view of the foregoing, and for lack of merit, the motion under consideration is hereby DENIED.

SO ORDERED.14

Petitioners filed a Motion for Reconsideration15 pleading for leniency in the application of the Rules and
claiming that the defective notice was cured by the filing of Metrobank’s Opposition, which they claim is
tantamount to notice. They further argued that Metrobank’s officers – who are the subject of the
subpoena – are not party-defendants, and thus do not comprise the adverse party; they are individuals
separate and distinct from Metrobank, the defendant corporation being sued in the case.
In an Opposition16 to the Motion for Reconsideration, Metrobank insisted on the procedural defect of
improper notice of hearing, arguing that the rule relative to motions and the requirement of a valid
notice of hearing are mandatory and must be strictly observed. It added that the same rigid treatment
must be accorded to Rule 25, in that none of its officers may be summoned to testify for petitioners
unless written interrogatories are first served upon them. Finally, it said that since a corporation may act
only through its officers and employees, they are to be considered as adverse parties in a case against
the corporation itself.

In another Order17 dated April 17, 2007, the trial court denied petitioners’ Motion for Reconsideration.
The trial court held, thus:

Even if the motion is given consideration by relaxing Sections 4 and 5, Rule 15 of the Rules of Court, no
such laxity could be accorded to Sections 1 and 6 of Rule 25 of the Revised Rules of Court which require
prior service of written interrogatories to adverse parties before any material and relevant facts may be
elicited from them more so if the party is a private corporation who could be represented by its officers
as in this case. In other words, as the persons sought to be subpoenaed by the plaintiffs-movants are
officers of the defendant bank, they are in effect the very persons who represent the interest of the
latter and necessarily fall within the coverage of Sections 1 and 6, Rule 25 of the Revised Rules of Court.

In view of the foregoing, the motion for reconsideration is hereby denied.

SO ORDERED.18

Ruling of the Court of Appeals

Petitioners filed a Petition for Certiorari19 with the CA asserting this time that their Motion for Issuance
of Subpoena Duces Tecum Ad Testificandum is not a litigated motion; it does not seek relief, but aims for
the issuance of a mere process. For these reasons, the Motion need not be heard. They likewise insisted
on liberality, and the disposition of the case on its merits and not on mere technicalities.20 They added
that Rule 2121 of the Rules requires prior notice and hearing only with respect to the taking of
depositions; since their Motion sought to require Metrobank’s officers to appear and testify in court and
not to obtain their depositions, the requirement of notice and hearing may be dispensed with. Finally,
petitioners claimed that the Rules – particularly Section 10,22 Rule 132 – do not prohibit a party from
presenting the adverse party as its own witness.

On April 15, 2008, the CA issued the questioned Decision, which contained the following decretal
portion:

WHEREFORE, the petition is DISMISSED for lack of merit. The assailed orders dated October 19, 2006 and
April 17, 2007 in Civil Case No. 336-M-2004 issued by the RTC, Branch 7, Malolos City, Bulacan, are
AFFIRMED. Costs against petitioners.

SO ORDERED.23

The CA held that the trial court did not commit grave abuse of discretion in issuing the assailed Orders;
petitioners’ Motion is a litigated motion, especially as it seeks to require the adverse party, Metrobank’s
officers, to appear and testify in court as petitioners’ witnesses. It held that a proper notice of hearing,
addressed to the parties and specifying the date and time of the hearing, was required, consistent with
Sections 4 and 5,24 Rule 15 of the Rules.

The CA held further that the trial court did not err in denying petitioners’ Motion to secure a subpoena
duces tecum/ad testificandum, ratiocinating that Rule 25 is quite clear in providing that the consequence
of a party’s failure to serve written interrogatories upon the opposing party is that the latter may not be
compelled by the former to testify in court or to render a deposition pending appeal. By failing to serve
written interrogatories upon Metrobank, petitioners foreclosed their right to present the bank’s officers
as their witnesses.

The CA declared that the justification for the rule laid down in Section 6 is that by failing to seize the
opportunity to inquire upon the facts through means available under the Rules, petitioners should not
be allowed to later on burden Metrobank with court hearings or other processes. Thus, it held:

x x x Where a party unjustifiedly refuses to elicit facts material and relevant to his case by addressing
written interrogatories to the adverse party to elicit those facts, the latter may not thereafter be
compelled to testify thereon in court or give a deposition pending appeal. The justification for this is that
the party in need of said facts having foregone the opportunity to inquire into the same from the other
party through means available to him, he should not thereafter be permitted to unduly burden the latter
with courtroom appearances or other cumbersome processes. The sanction adopted by the Rules is not
one of compulsion in the sense that the party is being directly compelled to avail of the discovery
mechanics, but one of negation by depriving him of evidentiary sources which would otherwise have
been accessible to him.25

Petitioners filed their Motion for Reconsideration,26 which the CA denied in its assailed October 2, 2008
Resolution. Hence, the present Petition.

Issues

Petitioners now raise the following issues for resolution:

THE COURT OF APPEALS COMMITTED REVERSIBLE ERRORS IN REQUIRING NOTICE AND HEARING (SECS. 4
AND 5, RULE 15, RULES OF COURT) FOR A MERE MOTION FOR SUBPOENA OF RESPONDENT BANK’S
OFFICERS WHEN SUCH REQUIREMENTS APPLY ONLY TO DEPOSITION UNDER SEC. 6, RULE 25, RULES OF
COURT.

II

THE COURT OF APPEALS COMMITTED (REVERSIBLE) ERROR IN HOLDING THAT THE PETITIONERS MUST
FIRST SERVE WRITTEN INTERROGATORIES TO RESPONDENT BANK’S OFFICERS BEFORE THEY CAN BE
SUBPOENAED.27

Petitioners’ Arguments

Praying that the assailed CA dispositions be set aside and that the Court allow the issuance of the
subpoena duces tecum/ad testificandum, petitioners assert that the questioned Motion is not a litigated
motion, since it seeks not a relief, but the issuance of process. They insist that a motion which is subject
to notice and hearing under Sections 4 and 5 of Rule 15 is an application for relief other than a pleading;
since no relief is sought but just the process of subpoena, the hearing and notice requirements may be
done away with. They cite the case of Adorio v. Hon. Bersamin,28 which held that –

Requests by a party for the issuance of subpoenas do not require notice to other parties to the
action.1âwphi1 No violation of due process results by such lack of notice since the other parties would
have ample opportunity to examine the witnesses and documents subpoenaed once they are presented
in court.29

Petitioners add that the Rules should have been liberally construed in their favor, and that Metrobank’s
filing of its Opposition be considered to have cured whatever defect the Motion suffered from.

Petitioners likewise persist in the view that Metrobank’s officers – the subject of the Motion – do not
comprise the adverse party covered by the rule; they insist that these bank officers are mere employees
of the bank who may be called to testify for them.

Respondents’ Arguments

Metrobank essentially argues in its Comment30 that the subject Motion for the issuance of a subpoena
duces tecum/ad testificandum is a litigated motion, especially as it is directed toward its officers, whose
testimony and documentary evidence would affect it as the adverse party in the civil case. Thus, the lack
of a proper notice of hearing renders it useless and a mere scrap of paper. It adds that being its officers,
the persons sought to be called to the stand are themselves adverse parties who may not be compelled
to testify in the absence of prior written interrogatories; they are not ordinary witnesses whose presence
in court may be required by petitioners at any time and for any reason.

Finally, Metrobank insists on the correctness of the CA Decision, adding that since petitioners failed up to
this time to pay the witnesses’ fees and kilometrage as required by the Rules,31 the issuance of a
subpoena should be denied.

Our Ruling

The Court denies the Petition.

On the procedural issue, it is quite clear that Metrobank was notified of the Motion for Issuance of
Subpoena Duces Tecum Ad Testificandum; in fact, it filed a timely Opposition thereto. The technical
defect of lack of notice of hearing was thus cured by the filing of the Opposition.32

Nonetheless, contrary to petitioners’ submission, the case of Adorio cannot apply squarely to this case.
In Adorio, the request for subpoena duces tecum was sought against bank officials who were not parties
to the criminal case for violation of Batas Pambansa Blg. 22. The situation is different here, as officers of
the adverse party Metrobank are being compelled to testify as the calling party’s main witnesses;
likewise, they are tasked to bring with them documents which shall comprise the petitioners’ principal
evidence. This is not without significant consequences that affect the interests of the adverse party, as
will be shown below.
As a rule, in civil cases, the procedure of calling the adverse party to the witness stand is not allowed,
unless written interrogatories are first served upon the latter. This is embodied in Section 6, Rule 25 of
the Rules, which provides –

Sec. 6. Effect of failure to serve written interrogatories.

Unless thereafter allowed by the court for good cause shown and to prevent a failure of justice, a party
not served with written interrogatories may not be compelled by the adverse party to give testimony in
open court, or to give a deposition pending appeal.

One of the purposes of the above rule is to prevent fishing expeditions and needless delays; it is there to
maintain order and facilitate the conduct of trial. It will be presumed that a party who does not serve
written interrogatories on the adverse party beforehand will most likely be unable to elicit facts useful to
its case if it later opts to call the adverse party to the witness stand as its witness. Instead, the process
could be treated as a fishing expedition or an attempt at delaying the proceedings; it produces no
significant result that a prior written interrogatories might bring.

Besides, since the calling party is deemed bound by the adverse party’s testimony,33 compelling the
adverse party to take the witness stand may result in the calling party damaging its own case. Otherwise
stated, if a party cannot elicit facts or information useful to its case through the facility of written
interrogatories or other mode of discovery, then the calling of the adverse party to the witness stand
could only serve to weaken its own case as a result of the calling party’s being bound by the adverse
party’s testimony, which may only be worthless and instead detrimental to the calling party’s cause.

Another reason for the rule is that by requiring prior written interrogatories, the court may limit the
inquiry to what is relevant, and thus prevent the calling party from straying or harassing the adverse
party when it takes the latter to the stand.

Thus, the rule not only protects the adverse party from unwarranted surprises or harassment; it likewise
prevents the calling party from conducting a fishing expedition or bungling its own case. Using its own
judgment and discretion, the court can hold its own in resolving a dispute, and need not bear witness to
the parties perpetrating unfair court practices such as fishing for evidence, badgering, or altogether
ruining their own cases. Ultimately, such unnecessary processes can only constitute a waste of the
court’s precious time, if not pointless entertainment.

In the present case, petitioners seek to call Metrobank’s officers to the witness stand as their initial and
main witnesses, and to present documents in Metrobank’s possession as part of their principal
documentary evidence. This is improper. Petitioners may not be allowed, at the incipient phase of the
presentation of their evidence-in-chief at that, to present Metrobank’s officers – who are considered
adverse parties as well, based on the principle that corporations act only through their officers and duly
authorized agents34 – as their main witnesses; nor may they be allowed to gain access to Metrobank’s
documentary evidence for the purpose of making it their own. This is tantamount to building their whole
case from the evidence of their opponent. The burden of proof and evidence falls on petitioners, not on
Metrobank; if petitioners cannot prove their claim using their own evidence, then the adverse party
Metrobank may not be pressured to hang itself from its own defense.

It is true that under the Rules, a party may, for good cause shown and to prevent a failure of justice, be
compelled to give testimony in court by the adverse party who has not served written interrogatories.
But what petitioners seek goes against the very principles of justice and fair play; they would want that
Metrobank provide the very evidence with which to prosecute and build their case from the start. This
they may not be allowed to do.

Finally, the Court may not turn a blind eye to the possible consequences of such a move by petitioners.
As one of their causes of action in their Complaint, petitioners claim that they were not furnished with
specific documents relative to their loan agreement with Metrobank at the time they obtained the loan
and while it was outstanding. If Metrobank were to willingly provide petitioners with these documents
even before petitioners can present evidence to show that indeed they were never furnished the same,
any inferences generated from this would certainly not be useful for Metrobank. One may be that by
providing petitioners with these documents, Metrobank would be admitting that indeed, it did not
furnish petitioners with these documents prior to the signing of the loan agreement, and while the loan
was outstanding, in violation of the law.

With the view taken of the case, the Court finds it unnecessary to further address the other issues raised
by the parties, which are irrelevant and would not materially alter the conclusions arrived at.

WHEREFORE, the Petition is DENIED. The assailed April 15, 2008 Decision and October 2, 2008
Resolution of the Court of Appeals in CA-G.R. SP No. 99535 are AFFIRMED.

SO ORDERED.

RULE 16
ASSOCIATED BANK,*
Petitioner,
- versus -
SPOUSES JUSTINIANO S. MONTANO, SR., AND LIGAYA MONTANO and TRES CRUCES AGRO-INDUSTRIAL
CORPORATION,
Respondents.

G.R. No. 166383

Petitioner filed this Rule 45 petition seeking the review of the October 27, 2003 Decision[1] of the Court
of Appeals (CA), as well as its December 13, 2004 Resolution,[2] in CA-G.R. CV No. 61383. The CA, in its
assailed decision and resolution, set aside the April 14, 1997 Order[3] of the Regional Trial Court (RTC)
dismissing the complaint filed by herein respondents for reconveyance of title over three parcels of land
situated in Cavite.

Below are the facts.

In 1964, spouses Justiniano and Ligaya Montano (the Montanos) owned three (3) parcels of land
situated in Tanza, Cavite with an aggregate area of 590,558 square meters, more or less,[4] utilized as an
integrated farm and as a stud farm used for raising horses.[5] Justiniano was then serving as
congressman for the lone district of Cavite and as minority floor leader. In 1972, when then President
Ferdinand Marcos placed the country under martial law, Justiniano went on self-exile to the United
States of America (USA) to avoid the harassment and threats made against him by the dictator.
 Sometime in 1975, while still in the USA, the Montanos transferred the said properties to Tres Cruces
Agro-Industrial Corporation (TCAIC) in exchange for shares of stock in the company,[6] allowing the
Montanos to control 98% of the stockholdings of TCAIC.[7] Thus, on February 17, 1975, the certificates
of title registered in the name of the Montanos were cancelled and were replaced with transfer
certificates of title (TCTs) in TCAICs name.[8]

A year later, in October 1976, TCAIC sold the properties to International Country Club, Inc. (ICCI) for
P6,000,000.00.[9] The sale resulted in the cancellation of the titles of TCAIC, and in their transfer to ICCI
on May 27, 1977.[10]

After the transfer, ICCI immediately mortgaged the parcels of land to Citizens Bank and Trust Co. (later
renamed as Associated Bank) for P2,000,000.00.[11] The loan matured but remained unpaid, prompting
Associated Bank to foreclose the mortgage on May 31, 1984.[12] The properties were then put on public
auction and were sold for P5,700,000.00 to Associated Bank, the sole and highest bidder.[13] Ownership
over the said properties was consolidated by Associated Bank and, on May 19, 1987, new TCTs were
issued in its name.[14]

Meanwhile, in 1986, following the ouster of Marcos, the Montanos returned to the country. After
discovering the transfer of the properties, the Montanos immediately took physical possession of the
same and began cultivating the land.[15] On September 15, 1989, the Montanos filed an action for
reconveyance of title against herein petitioner, praying, in sum, that the transfer of the properties from
TCAIC to ICCI, and from ICCI to Associated Bank, be declared null and void.[16]

In their complaint, respondents averred that the transfer of the parcels of land to TCAIC was done only
to avoid the confiscatory acts being applied by the dictator against the Montanos properties, in
retaliation for the latters open opposition to Marcos.[17] They claimed that TCAIC was only forced to sell
the properties to ICCI after the latter intimidated and threatened the relatives of the Montanos who
were left in the country.[18] They also argued that the mortgage by ICCI to Associated Bank was made to
generate money for the latters corporate officers as evidenced by the lack of any effort on the part of
ICCI to service the loan.[19]

On October 11, 1989, Associated Bank filed an Answer[20] setting forth affirmative defenses. Among its
several pleas in avoidance were the arguments that the complaint did not state a cause of action; that
the allegation of threat and intimidation was not averred with particularity; that the bank was an
innocent purchaser for value; and that, even if the complaint stated a cause of action, the same had
already prescribed or had been barred by estoppel and laches.[21]

On February 17, 1997, eight (8) years after Associated Bank filed its answer and while the case was still
on its pretrial stage, the bank filed a Motion for Preliminary Hearing on the Affirmative Defenses and/or
Motion to Dismiss[22] focused on two crucial points, namely: that the complaint stated no cause of
action; and that the case was already barred by the statute of limitations.[23] Respondents prayed for
and were given an additional 10 days within which to file an omnibus opposition to petitioners motion.
[24] Respondents, however, failed to meet the trial courts deadline.[25]
On April 4, 1997, the trial court issued an Order[26] dismissing the complaint. In disposing of the case,
the RTC explained:
 Now, assuming gratia arguendo the truth of the allegations of the instant complaint, the question that
arises is whether or not this court could render a valid judgment in accordance with the prayer of the
complaint. Surely, in the absence of controverting evidence when the allegations of the complaint by
reason of the motion to dismiss based on the ground that the complaint states no cause of action
become the gospel truth. Apropos, there is no room for doubt that this Court could render a valid
judgment pursuant to the complaints prayer. Needless to say, the motion to dismiss based on the ground
that the complaint states no cause of action must necessarily crumble like a house of cards.

Anent the second ground that the institution of the instant case is barred by the statute of limitations,
this Court finds the same to be meritorious.

An action for reconveyance of real property resulting from fraud may be barred by the statute of
limitations, which requires that the action shall be filed within four (4) years from the discovery of the
fraud (Balbin versus Medalla, 108 SCRA 666; Alarcon versus Hon. Abdulwahid Bidin, et al., 120 SCRA
390). Under the circumstances of this case, such discovery must be deemed to have taken place when
Transfer Certificate of Title Nos. T-76107, [T-]76108 and [T-]76109 were issued in the name of Tres Cruces
in 1975 and TCT No[s]. T-90654, T-90655 and TCT No. T-90656 to the properties in the name of
International Country Club, Inc., in 1977, because the registration of the deeds of sale is considered a
constructive notice to the whole world of its contents, and all interests, legal and equitable, included
therein (Ramos versus Court of Appeals, et al., 112 SCRA 542). Here, plaintiffs waited for a period of
around fourteen (14) years or at least around twelve (12) years from the date of the issuance of the
certificates of title before filing the instant complaint in 1989.

Besides, it is very clear from Section 35 of the Land Registration Act that although an original owner of a
registered land may seek the annulment of a transfer thereof on the ground of fraud, such a remedy,
however, is without prejudice to the rights of any innocent value of the certification of title[] (Medina, et
al. versus Hon. Francisco M. Chanco, et al., 117 SCRA 201).

xxxx

The bottom line is that this Court finds merit in the Motion to Dismiss filed by defendant Westmont,
anchored on the second ground. The cause of action filed by plaintiffs Spouses Montano for
reconveyance of title of the three (3) parcels of land is a collateral attack on the indefeasible title of
Westmont. x x x.

Parenthetically, this Court, it will not be amiss, to state, finds that the allegations of threats,
intimidation, harassment made by plaintiffs are couched in general terms contrary to Section 5, Rule 8 of
the Rules of Court which states that in (sic) all averments of fraud, or mistake, the circumstances
constituting fraud or mistake must be stated with particularity.

This Court is not unmindful of the fact that in the various transactions of plaintiffs and defendants, all
were for valuable considerations. The property for stocks arrangement in 1975 between plaintiffs and
Tres Cruces was for the Montanos taking control of 98% of the stocks of Tres Cruces. The sale in 1977
from Tres Cruces to International Country Club was for six (6) Million Pesos (P6,000,000.00). The
foreclosure of mortgage and consolidation of title in 1987 was due to non-payment of a loan obtained by
International Country Club from the Associated Bank (now Westmont) for which the three (3) parcels of
land stood as security.
xxxx

WHEREFORE, premises considered, the Motion to Dismiss is hereby GRANTED and the instant case is
DISMISSED.

Apropos, the Register of Deeds for the Province of Cavite is thereby directed to cancel the notice of lis
pendens annotated in the subject certificates of title.

SO ORDERED.[27]

Respondents moved for reconsideration, but the trial court denied the same. Upon appeal, the CA, on
October 27, 2003, reversed the RTCs ruling and reinstated the case for further proceedings. The
appellate court ratiocinated:

The trial court discusses the issue as if it is an established fact that the bank was a buyer in good faith
and without prior notice of the adverse interests of the plaintiffs in the properties. We really do not
know this until trial is held and evidence presented. That is why it is necessary that the parties be heard.
The court fails to follow the basic and simple rule that in resolving a motion to dismiss based on
insufficiency of the complaint, it must hypothetically admit the facts alleged. Perpetual Savings Bank vs.
Fajardo 223 SCRA 720, State Investment House vs. Court of Appeals 206 SCRA 348. At this stage, the
subject of determination is the sufficiency of the allegations of the complaint to test which it (sic) is only
necessary to ask whether, assuming they are true, the facts alleged are sufficient to grant relief. Calalang
vs. Intermediate Appellate Court, 194 SCRA 514, Madrona vs. Rosal 204 SCRA 1. If the bank had actually
conspired with others to manipulate procedures to put the title out of reach of the plaintiffs, as alleged
in the complaint, it is beyond peradventure that the court can render valid judgment in accordance with
the prayer therein. It is not only a right but becomes the duty of the court to proceed to hear and
adjudicate the case on its merits.

IN VIEW OF THE FOREGOING, the order of the trial court dismissing the case is SET ASIDE. The case is
returned to the court of origin for further proceedings.

SO ORDERED.[28]

Associated Bank moved for reconsideration,[29] arguing that the cause of action of the Montanos, if
there had been any, had already prescribed. It also pointed out that the failure of the Montanos to file a
comment on or an objection to the motion to dismiss despite opportunity to do so should be construed
as a waiver in contesting the allegations and affirmative defenses raised by Associated Bank. The CA,
however, in its Resolution[30] dated December 13, 2004, denied the motion for reconsideration.

Petitioner now comes to this Court raising, in essence, two issues: first, whether it is proper to file a
motion to dismiss after an answer has already been filed; and second, whether the complaint should be
dismissed on the grounds set forth therein.

We find in favor of respondents.

I. On the propriety of the motion to dismiss

Section 6, Rule 16 of the Rules of Court provides:

SEC. 6. Pleading grounds as affirmative defenses. If no motion to dismiss has been filed, any of the
grounds for dismissal provided for in this Rule may be pleaded as an affirmative defense in the answer
and, in the discretion of the court, a preliminary hearing may be had thereon as if a motion to dismiss
had been filed.

The dismissal of the complaint under this section shall be without prejudice to the prosecution in the
same or separate action of a counterclaim pleaded in the answer.

The rule is based on practicality. Both the parties and the court can conveniently save time and expenses
necessarily involved in a case preparation and in a trial at large, when the issues involved in a particular
case can otherwise be disposed of in a preliminary hearing.[31]

Since the rule provides that the preliminary hearing may be had thereon as if a motion to dismiss had
been filed, such hearing shall therefore be conducted in the manner provided in Section 2, Rule 16 of the
Rules of Court,[32] which reads:

SEC. 2. Hearing of motion. At the hearing of the motion, the parties shall submit their arguments on the
question of law and their evidence on the questions of fact involved except those not available at that
time. Should the case go to trial, the evidence presented during the hearing shall automatically be part
of the evidence of the party presenting the same.

It is, therefore, inconsequential that petitioner had already filed an answer to the complaint prior to its
filing of a motion to dismiss. The option of whether to set the case for preliminary hearing after the filing
of an answer which raises affirmative defenses, or to file a motion to dismiss raising any of the grounds
set forth in Section 1, Rule 16 of the Rules are procedural options which are not mutually exclusive of
each other.

Moreover, as petitioner correctly pointed out, respondents failed to oppose the motion to dismiss
despite having been given the opportunity to do so by the RTC. Therefore, any right to contest the same
was already waived by them.

II. On whether the complaint for reconveyance should be dismissed

We agree with the RTCs and the CAs rulings that petitioners argument on the failure of the complaint to
state a cause of action is unavailing. When the ground for dismissal is that the complaint states no cause
of action, such fact can be determined only from the facts alleged in the complaint and from no other,
and the court cannot consider other matters aliunde.[33] The test, therefore, is whether, assuming the
allegations of fact in the complaint to be true, a valid judgment could be rendered in accordance with
the prayer stated therein. Where the allegations are sufficient but the veracity of the facts is assailed, the
motion to dismiss should be denied.[34]

In their complaint for reconveyance, respondents alleged that the transfer of the three parcels of land
from TCAIC to ICCI was facilitated through threat, duress and intimidation employed by certain
individuals. On its face, the complaint clearly states a cause of action and raises issues of fact that can be
properly settled only after a full-blown trial. On this ground, petitioners motion to dismiss must,
perforce, be denied.
We do not, however, subscribe to the RTCs ruling that the action has already prescribed.

It is true that an action for reconveyance of real property resulting from fraud may be barred by the
statute of limitations, which requires that the action shall be filed within four (4) years from the
discovery of the fraud.[35] The RTC, however, seemed to have overlooked the fact that the basis of
respondents complaint for reconveyance is not fraud but threat, duress and intimidation, allegedly
employed by Marcos cronies upon the relatives of the Montanos while the latter were on self-exile.[36]
In fact, fraud was neither specifically alleged nor remotely implied in the complaint.

Article 1391 of the Civil Code provides:

Art. 1391. An action for annulment shall be brought within four years.

This period shall begin: In case of intimidation, violence or undue influence, from the time the defect of
the consent ceases.

In case of mistake or fraud, from the time of the discovery of the same.

And when the action refers to contracts entered into by minors or other incapacitated persons, from the
time the guardianship ceases.

In the circumstances prevailing in this case, the threat or intimidation upon respondents is deemed to
have ceased only upon the ouster of then President Marcos from power on February 21, 1986. The four-
year prescriptive period must, therefore, be reckoned from the said date. Thus, when respondents filed
their complaint for reconveyance on September 15, 1989, the period provided for by law had not yet
prescribed. Therefore, petitioners motion to dismiss should be denied.

WHEREFORE, premises considered, the instant petition is DENIED for lack of merit. The Regional Trial
Court is ordered to proceed with the trial of the case with dispatch. Costs against petitioner.

SO ORDERED.

RULE 17
EDGARDO PINGA, Petitioner,
- versus -
THE HEIRS OF GERMAN TINGA, and SANTIAGO represented by VELASCO, JR. JJ., FERNANDO SANTIAGO,
Respondents.
G.R. No. 170354
June 30, 2006

The constitutional faculty of the Court to promulgate rules of practice and procedure[1] necessarily
carries the power to overturn judicial precedents on points of remedial law through the amendment of
the Rules of Court. One of the notable changes introduced in the 1997 Rules of Civil Procedure is the
explicit proviso that if a complaint is dismissed due to fault of the plaintiff, such dismissal is without
prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action.
[2] The innovation was instituted in spite of previous jurisprudence holding that the fact of the dismissal
of the complaint was sufficient to justify the dismissal as well of the compulsory counterclaim.[3]

In granting this petition, the Court recognizes that the former jurisprudential rule can no longer stand in
light of Section 3, Rule 17 of the 1997 Rules of Civil Procedure.

The relevant facts are simple enough. Petitioner Eduardo Pinga was named as one of two defendants in
a complaint for injunction[4] filed with Branch 29 of the Regional Trial Court (RTC)[5] of San Miguel,
Zamboanga del Sur, by respondent Heirs of German Santiago, represented by Fernando Santiago. The
Complaint[6] dated 28 May 1998 alleged in essence that petitioner and co-defendant Vicente Saavedra
had been unlawfully entering the coco lands of the respondent, cutting wood and bamboos and
harvesting the fruits of the coconut trees therein. Respondents prayed that petitioner and Saavedra be
enjoined from committing acts of depredation on their properties, and ordered to pay damages.

In their Amended Answer with Counterclaim,[7] petitioner and his co-defendant disputed respondents
ownership of the properties in question, asserting that petitioners father, Edmundo Pinga, from whom
defendants derived their interest in the properties, had been in possession thereof since the 1930s.[8]
They alleged that as far back as 1968, respondents had already been ordered ejected from the
properties after a complaint for forcible entry was filed by the heirs of Edmundo Pinga. It was further
claimed that respondents application for free patent over the properties was rejected by the Office of
the President in 1971. Defendants in turn prayed that owing to respondents forcible re-entry in the
properties and the irresponsible and reckless filing of the case, they be awarded various types of
damages instead in amounts totaling P2,100,000 plus costs of suit.[9]

By July of 2005, the trial of the case had not yet been completed. Moreover, respondents, as plaintiffs,
had failed to present their evidence. It appears that on 25 October 2004, the RTC already ordered the
dismissal of the complaint after respondents counsel had sought the postponement of the hearing
scheduled then.[10] However, the order of dismissal was subsequently reconsidered by the RTC in an
Order dated 9 June 2005, which took into account the assurance of respondents counsel that he would
give priority to that case.[11]

At the hearing of 27 July 2005, plaintiffs counsel on record failed to appear, sending in his stead a
representative who sought the postponement of the hearing. Counsel for defendants (who include
herein petitioner) opposed the move for postponement and moved instead for the dismissal of the case.
The RTC noted that it was obvious that respondents had failed to prosecute the case for an unreasonable
length of time, in fact not having presented their evidence yet. On that ground, the complaint was
dismissed. At the same time, the RTC allowed defendants to present their evidence ex-parte.[12]

Respondents filed a Motion for Reconsideration[13] of the order issued in open court on 27 July 2005,
opting however not to seek that their complaint be reinstated, but praying instead that the entire action
be dismissed and petitioner be disallowed from presenting evidence ex-parte. Respondents claimed that
the order of the RTC allowing petitioner to present evidence ex-parte was not in accord with established
jurisprudence. They cited cases, particularly City of Manila v. Ruymann[14] and Domingo v. Santos,[15]
which noted those instances in which a counterclaim could not remain pending for independent
adjudication.

On 9 August 2005, the RTC promulgated an order granting respondents Motion for Reconsideration and
dismissing the counterclaim, citing as the only ground therefor that there is no opposition to the Motion
for Reconsideration of the [respondents].[16] Petitioner filed a Motion for Reconsideration, but the same
was denied by the RTC in an Order dated 10 October 2005.[17] Notably, respondents filed an Opposition
to Defendants Urgent Motion for Reconsideration, wherein they argued that the prevailing
jurisprudential rule[18] is that compulsory counterclaims cannot be adjudicated independently of
plaintiffs cause of action, and a conversu, the dismissal of the complaint carries with it the dismissal of
the compulsory counterclaims.[19]

The matter was elevated to this Court directly by way of a Petition for Review under Rule 45 on a pure
question of law, the most relevant being whether the dismissal of the complaint necessarily carries the
dismissal of the compulsory counterclaim.

We hold that under Section 3, Rule 17 of the 1997 Rules of Civil Procedure, the dismissal of the
complaint due to the fault of plaintiff does not necessarily carry with it the dismissal of the counterclaim,
compulsory or otherwise. In fact, the dismissal of the complaint is without prejudice to the right of
defendants to prosecute the counterclaim.

On a prefatory note, the RTC, in dismissing the counterclaim, did not expressly adopt respondents
argument that the dismissal of their complaint extended as well to the counterclaim. Instead, the RTC
justified the dismissal of the counterclaim on the ground that there is no opposition to [plaintiffs] Motion
for Reconsideration [seeking the dismissal of the counterclaim].[20] This explanation is hollow,
considering that there is no mandatory rule requiring that an opposition be filed to a motion for
reconsideration without need for a court order to that effect; and, as posited by petitioner, the failure to
file an opposition to the Plaintiffs Motion for Reconsideration is definitely not one among the established
grounds for dismissal [of the counterclaim].[21] Still, the dismissal of the counterclaim by the RTC
betrays at very least a tacit recognition of respondents argument that the counterclaim did not survive
the dismissal of the complaint. At most, the dismissal of the counterclaim over the objection of the
defendant (herein petitioner) on grounds other than the merits of the counterclaim, despite the
provisions under Rule 17 of the 1997 Rules of Civil Procedure, constitutes a debatable question of law,
presently meriting justiciability through the instant action. Indeed, in reviewing the assailed orders of the
RTC, it is inevitable that the Court consider whether the dismissal of the complaint, upon motion of the
defendant, on the ground of the failure to prosecute on plaintiffs part precipitates or carries with it the
dismissal of the pending counterclaims.

Our core discussion begins with Section 3, Rule 17 of the 1997 Rules of Civil Procedure, which states:

SEC. 3. Dismissal due to fault of plaintiff.If, for no justifiable cause, the plaintiff fails to appear on the
date of the presentation of his evidence in chief on the complaint, or to prosecute his action for an
unreasonable length of time, or to comply with these Rules or any order of the court, the complaint may
be dismissed upon motion of defendant or upon the court's own motion, without prejudice to the right
of the defendant to prosecute his counterclaim in the same or in a separate action. This dismissal shall
have the effect of an adjudication upon the merits, unless otherwise declared by the court.

The express qualification in the provision that the dismissal of the complaint due to the plaintiffs fault, as
in the case for failure to prosecute, is without prejudice to the right of the defendant to prosecute his
counterclaim in the same or separate action. This stands in marked contrast to the provisions under Rule
17 of the 1964 Rules of Court which were superseded by the 1997 amendments. In the 1964 Rules,
dismissals due to failure to prosecute were governed by Section 3, Rule 17, to wit:
 SEC. 3. Failure to prosecute. If plaintiff fails to appear at the time of the trial, or to prosecute his action
for an unreasonable length of time, or to comply with these rules or any order of the court, the action
may be dismissed upon motion of the defendant or upon the courts own motion. This dismissal shall
have the effect of an adjudication upon the merits, unless otherwise provided by court.

Evidently, the old rule was silent on the effect of such dismissal due to failure to prosecute on the
pending counterclaims. As a result, there arose what one authority on remedial law characterized as the
nagging question of whether or not the dismissal of the complaint carries with it the dismissal of the
counterclaim.[22] Jurisprudence construing the previous Rules was hardly silent on the matter.

In their arguments before the RTC on the dismissal of the counterclaim, respondents cited in support
City of Manila v. Ruymann,[23] Domingo v. Santos,[24] Belleza v. Huntington,[25] and Froilan v. Pan
Oriental Shipping Co.,[26] all of which were decided more than five decades ago. Notably though, none
of the complaints in these four cases were dismissed either due to the fault of the plaintiff or upon the
instance of the defendant.[27]

The distinction is relevant, for under the previous and current incarnations of the Rules of Civil
Procedure, it is Section 3, Rule 17 that governs the dismissals due to the failure of the plaintiff to
prosecute the complaint, as had happened in the case at bar. Otherwise, it is Section 2, Rule 17, which
then, and still is now, covered dismissals ordered by the trial court upon the instance of the plaintiff.[28]
Yet, as will be seen in the foregoing discussion, a discussion of Section 2 cannot be avoided as the
postulate behind that provision was eventually extended as well in cases that should have properly been
governed by Section 3.

Even though the cases cited by respondents involved different factual antecedents, there exists more
appropriate precedents which they could have cited in support of their claim that the counterclaim
should have been dismissed even if the dismissal of the complaint was upon the defendants motion and
was predicated on the plaintiffs fault. BA Finance Corp. v. Co[29] particularly stands out in that regard,
although that ruling is itself grounded on other precedents as well. Elucidation of these cases is in order.

On the general effect of the dismissal of a complaint, regardless of cause, on the pending counterclaims,
previous jurisprudence laid emphasis on whether the counterclaim was compulsory or permissive in
character. The necessity of such distinction was provided in the 1964 Rules itself, particularly Section 2,
Rule 17, which stated that in instances wherein the plaintiff seeks the dismissal of the complaint, if a
counterclaim has been pleaded by a defendant prior to the service upon him of the plaintiffs motion to
dismiss, the action shall not be dismissed against the defendants objection unless the counterclaim can
remain pending for independent adjudication by the court.[30] The vaunted commentaries of Chief
Justice Moran, remarking on Section 2, Rule 17, noted that [t]here are instances in which a counterclaim
cannot remain pending for independent adjudication, as, where it arises out of, or is necessarily
connected with, the transaction or occurrence which is the subject matter of the opposing partys claim.
[31]
This view expressed in Morans Commentaries was adopted by the Court in cases where the application
of Section 2, Rule 17 of the 1964 Rules of Court was called for, such as in Lim Tanhu v. Ramolete,[32] and
Dalman v. City Court of Dipolog City.[33] The latter case warrants brief elaboration. Therein, the plaintiff
in a civil case for damages moved for the withdrawal of her own case on the ground that the dispute had
not been referred to the barangay council as required by law. Over the objection of the defendant, who
feared that her own counterclaim would be prejudiced by the dismissal, plaintiffs motion was granted,
the complaint and the counterclaim accordingly dismissed by the trial court. The Court refused to
reinstate the counterclaim, opining without elaboration, [i]f the civil case is dismissed, so also is the
counterclaim filed therein.[34] The broad nature of that statement gave rise to the notion that the
mandatory dismissal of the counterclaim upon dismissal of the complaint applied regardless of the cause
of the complaints dismissal.[35]

Notably, the qualification concerning compulsory counterclaims was provided in Section 2, Rule 17 of
the 1964 Rules, the provision governing dismissals by order of the court, and not Section 3, Rule 17. As
stated earlier, Section 3, which covered dismissals for failure to prosecute upon motion of the defendant
or upon motu proprio action of the trial court, was silent on the effect on the counterclaim of dismissals
of such nature.

Spouses Sta. Maria, Jr. v. Court of Appeals,[36] decided in 1972, ostensibly supplied the gap on the effect
on the counterclaim of complaints dismissed under Section 3. The defendants therein successfully
moved before the trial court for the dismissal of the complaint without prejudice and their declaration in
default on the counterclaim after plaintiffs therein failed to attend the pre-trial. After favorable judgment
was rendered on the counterclaim, plaintiffs interposed an appeal, citing among other grounds, that the
counterclaim could no longer have been heard after the dismissal of the complaint. While the Court
noted that the adjudication of the counterclaim in question does not depend upon the adjudication of
the claims made in the complaint since they were virtually abandoned by the non-appearance of the
plaintiffs themselves, it was also added that [t]he doctrine invoked is not available to plaintiffs like the
petitioners, who prevent or delay the hearing of their own claims and allegations.[37] The Court,
through Justice JBL Reyes, noted:

The doctrine that the complaint may not be dismissed if the counterclaim cannot be independently
adjudicated is not available to, and was not intended for the benefit of, a plaintiff who prevents or delays
the prosecution of his own complaint. Otherwise, the trial of counterclaims would be made to depend
upon the maneuvers of the plaintiff, and the rule would offer a premium to vexing or delaying tactics to
the prejudice of the counterclaimants. It is in the same spirit that we have ruled that a complaint may
not be withdrawn over the opposition of the defendant where the counterclaim is one that arises from,
or is necessarily connected with, the plaintiffs action and cannot remain pending for independent
adjudication.[38]

There is no doubt that under the 1964 Rules, the dismissal of a complaint due to the failure of the
plaintiff to appear during pre-trial, as what had happened in Sta. Maria, fell within the coverage of
Section 3, Rule 17. On the other hand, Section 2 was clearly limited in scope to those dismissals
sustained at the instance of the plaintiff.[39] Nonetheless, by the early 1990s, jurisprudence was settling
on a rule that compulsory counterclaims were necessarily terminated upon the dismissal of the
complaint not only if such dismissal was upon motion of the plaintiff, but at the instance of the
defendant as well. Two decisions from that period stand out in this regard, Metals Engineering Resources
Corp. v. Court of Appeals[40] and International Container Terminal Services v. Court of Appeals.[41]
In Metals, the complaint was expunged from the record after the defendant had filed a motion for
reconsideration of a trial court order allowing the filing of an amended complaint that corrected a
jurisdictional error in the original complaint pertaining to the specification of the amount of damages
sought. When the defendant was nonetheless allowed to present evidence on the counterclaim, the
plaintiff assailed such allowance on the ground that the counterclaim was compulsory and could no
longer remain pending for independent adjudication. The Court, in finding for the plaintiff, noted that
the counterclaim was indeed compulsory in nature, and as such, was auxiliary to the proceeding in the
original suit and derived its jurisdictional support therefrom.[42] It was further explained that the
doctrine was in consonance with the primary objective of a counterclaim, which was to avoid and
prevent circuitry of action by allowing the entire controversy between the parties to be litigated and
finally determined in one action, and to discourage multiplicity of suits.[43] Also, the Court noted that
since the complaint was dismissed for lack of jurisdiction, it was as if no claim was filed against the
defendant, and there was thus no more leg for the complaint to stand on.[44]

In International Container, the defendant filed a motion to dismiss which was granted by the trial court.
The defendants counterclaim was dismissed as well. The Court summarized the key question as what is
the effect of the dismissal of a complaint ordered at the instance of the defendant upon a compulsory
counterclaim duly raised in its answer.[45] Then it ruled that the counterclaim did not survive such
dismissal. After classifying the counterclaim therein as compulsory, the Court noted that [i]t is obvious
from the very nature of the counterclaim that it could not remain pending for independent adjudication,
that is, without adjudication by the court of the complaint itself on which the counterclaim was based.
[46]

Then in 1993, a divided Court ruled in BA Finance that the dismissal of the complaint for nonappearance
of plaintiff at the pre-trial, upon motion of the defendants, carried with it the dismissal of their
compulsory counterclaim.[47] The Court reiterated the rule that a compulsory counterclaim cannot
remain pending for independent adjudication by the court as it is auxiliary to the proceeding in the
original suit and merely derives its jurisdictional support therefrom.[48] Express reliance was made on
Metals, International Container, and even Dalman in support of the majoritys thesis. BA Finance likewise
advised that the proper remedy for defendants desirous that their counterclaims not be dismissed along
with the main complaint was for them to move to declare the plaintiffs to be non-suited on their
complaint and as in default on their compulsory counterclaim, instead of moving for the dismissal of the
complaint.[49]

Justice Regalado, joined by Chief Justice Narvasa, registered a strong objection to the theory of the
majority. They agreed that the trial court could no longer hear the counterclaim, but only on the ground
that defendants motion to be allowed to present evidence on the counterclaim was filed after the order
dismissing the complaint had already become final. They disagreed however that the compulsory
counterclaim was necessarily dismissed along with the main complaint, pointing out that a situation
wherein the dismissal of the complaint was occasioned by plaintiffs failure to appear during pre-trial was
governed under Section 3, Rule 17, and not Section 2 of the same rule. Justice Regalado, who ironically
penned the decision in Metals cited by the majority, explained:

Turning back to Rule 17, it is readily apparent that Sections 2 and 3 thereof envisage different factual
and adjective situations. The dismissal of the complaint under Section 2 is at the instance of plaintiff, for
whatever reason he is minded to move for such dismissal, and, as a matter of procedure, is without
prejudice unless otherwise stated in the order of the court or, for that matter, in plaintiff's motion to
dismiss his own complaint. By reason thereof, to curb any dubious or frivolous strategy of plaintiff for his
benefit or to obviate possible prejudice to defendant, the former may not dismiss his complaint over the
defendant's objection if the latter has a compulsory counterclaim since said counterclaim would
necessarily be divested of juridical basis and defendant would be deprived of possible recovery thereon
in that same judicial proceeding.

Section 3, on the other hand, contemplates a dismissal not procured by plaintiff, albeit justified by
causes imputable to him and which, in the present case, was petitioner's failure to appear at the pre-
trial. This situation is also covered by Section 3, as extended by judicial interpretation, and is ordered
upon motion of defendant or motu proprio by the court. Here, the issue of whether defendant has a
pending counterclaim, permissive or compulsory, is not of determinative significance. The dismissal of
plaintiff's complaint is evidently a confirmation of the failure of evidence to prove his cause of action
outlined therein, hence the dismissal is considered, as a matter of evidence, an adjudication on the
merits. This does not, however, mean that there is likewise such absence of evidence to prove
defendant's counterclaim although the same arises out of the subject matter of the complaint which was
merely terminated for lack of proof. To hold otherwise would not only work injustice to defendant but
would be reading a further provision into Section 3 and wresting a meaning therefrom although neither
exists even by mere implication. Thus understood, the complaint can accordingly be dismissed, but relief
can nevertheless be granted as a matter of course to defendant on his counterclaim as alleged and
proved, with or without any reservation therefor on his part, unless from his conduct, express or implied,
he has virtually consented to the concomitant dismissal of his counterclaim.[50]

Justice Regalado also adverted to Sta. Maria and noted that the objections raised and rejected by the
Court therein were the same as those now relied upon by the plaintiff. He pointed out that Dalman and
International Container, both relied upon by the majority, involved the application of Section 2, Rule 17
and not Section 3, which he insisted as the applicable provision in the case at bar.[51]

The partial dissent of Justice Regalado in BA Finance proved opportune, as he happened then to be a
member of the Rules of Court Revision Committee tasked with the revision of the 1964 Rules of Court.
Just a few months after BA Finance was decided, Justice Regalado proposed before the Committee an
amendment to Section 3, Rule 17 that would explicitly provide that the dismissal of the complaint due to
the fault of the plaintiff shall be without prejudice to the right of the defendant to prosecute his
counterclaim in the same or in a separate action. The amendment, which was approved by the
Committee, is reflected in the minutes of the meeting of the Committee held on 12 October 1993:

[Justice Regalado] then proposed that after the words upon the courts own motion in the 6th line of the
draft in Sec. 3 of Rule 17, the following provision be inserted: without prejudice to the right of the
defendant to prosecute his counterclaim in the same or in a separate action. The Committee agreed with
the proposed amendment of Justice Regalado.

Justice Herrera observed that under Secs. 1 to 3 of Rule 17, it is not the action that is dismissed but the
complaint. He asked whether there is any distinction between complaint and action. Justice Regalado
opined that the action of the plaintiff is initiated by his complaint.

Justice Feria then suggested that the dismissal be limited to the complaint[.] Thus, in the 1st line of Sec.
1, the words An action will be changed to a complaint; in the 2nd line of Sec. 2, the words an action will
be changed to a complaint and in Sec. 3, the word action on the 5th line of the draft will be changed to
complaint. The Committee agreed with Justice Ferias suggested amendments.
CA Pao believed that there is a need to clarify the counterclaim that the defendant will prosecute,
whether it is permissive or compulsory or all kinds of counterclaims.

Justice Regalado opined that there is no need of making a clarification because it is already understood
that it covers both counterclaims.[52]

It is apparent from these minutes that the survival of the counterclaim despite the dismissal of the
complaint under Section 3 stood irrespective of whether the counterclaim was permissive or
compulsory. Moreover, when the Court itself approved the revisions now contained in the 1997 Rules of
Civil Procedure, not only did Justice Regalados amendment to Section 3, Rule 17 remain intact, but the
final version likewise eliminated the qualification formerly offered under Section 2 on counterclaims that
can remain pending for independent adjudication by the court.[53] At present, even Section 2,
concerning dismissals on motion of the plaintiff, now recognizes the right of the defendant to prosecute
the counterclaim either in the same or separate action notwithstanding the dismissal of the complaint,
and without regard as to the permissive or compulsory nature of the counterclaim.

In his commentaries on the 1997 Rules of Civil Procedure, Justice Regalado expounds on the effects of
the amendments to Section 2 and 3 of Rule 17:

2. Under this revised section [2], where the plaintiff moves for the dismissal of his complaint to which a
counterclaim has been interposed, the dismissal shall be limited to the complaint. Such dismissal shall be
without prejudice to the right of the defendant to either prosecute his counterclaim in a separate action
or to have the same resolved in the same action. Should he opt for the first alternative, the court should
render the corresponding order granting and reserving his right to prosecute his claim in a separate
complaint. Should he choose to have his counterclaim disposed of in the same action wherein the
complaint had been dismissed, he must manifest such preference to the trial court within 15 days from
notice to him of plaintiffs motion to dismiss. These alternative remedies of the defendant are available to
him regardless of whether his counterclaim is compulsory or permissive. A similar alternative procedure,
with the same underlying reason therefor, is adopted in Sec. 6, Rule 16 and Sec. 3 of this Rule, wherein
the complaint is dismissed on the motion of the defendant or, in the latter instance, also by the court
motu proprio.

xxxx

2. The second substantial amendment to [Section 3] is with respect to the disposition of the defendants
counterclaim in the event the plaintiffs complaint is dismissed. As already observed, he is here granted
the choice to prosecute that counterclaim in either the same or a separate action. x x x x

3. With the aforestated amendments in Secs. 2 and 3 laying down specific rules on the disposition of
counterclaims involved in the dismissal actions, the controversial doctrine in BA Finance Corporation vs.
Co, et al., (G.R. No. 105751, June 30, 1993) has been abandoned, together with the apparent confusion
on the proper application of said Secs. 2 and 3. Said sections were distinguished and discussed in the
authors separate opinion in that case, even before they were clarified by the present amendments x x x.
[54]

Similarly, Justice Feria notes that the present rule reaffirms the right of the defendant to move for the
dismissal of the complaint and to prosecute his counterclaim, as stated in the separate opinion [of
Justice Regalado in BA Finance.][55] Retired Court of Appeals Justice Herrera pronounces that the
amendment to Section 3, Rule 17 settles that nagging question whether the dismissal of the complaint
carries with it the dismissal of the counterclaim, and opines that by reason of the amendments, the
rulings in Metals Engineering, International Container, and BA Finance may be deemed abandoned.[56]
On the effect of amendment to Section 3, Rule 17, the commentators are in general agreement,[57]
although there is less unanimity of views insofar as Section 2, Rule 17 is concerned.[58]

To be certain, when the Court promulgated the 1997 Rules of Civil Procedure, including the amended
Rule 17, those previous jural doctrines that were inconsistent with the new rules incorporated in the
1997 Rules of Civil Procedure were implicitly abandoned insofar as incidents arising after the effectivity
of the new procedural rules on 1 July 1997. BA Finance, or even the doctrine that a counterclaim may be
necessarily dismissed along with the complaint, clearly conflicts with the 1997 Rules of Civil Procedure.
The abandonment of BA Finance as doctrine extends as far back as 1997, when the Court adopted the
new Rules of Civil Procedure. If, since then, such abandonment has not been affirmed in jurisprudence, it
is only because no proper case has arisen that would warrant express confirmation of the new rule. That
opportunity is here and now, and we thus rule that the dismissal of a complaint due to fault of the
plaintiff is without prejudice to the right of the defendant to prosecute any pending counterclaims of
whatever nature in the same or separate action. We confirm that BA Finance and all previous rulings of
the Court that are inconsistent with this present holding are now abandoned.

Accordingly, the RTC clearly erred when it ordered the dismissal of the counterclaim, since Section 3,
Rule 17 mandates that the dismissal of the complaint is without prejudice to the right of the defendant
to prosecute the counterclaim in the same or separate action. If the RTC were to dismiss the
counterclaim, it should be on the merits of such counterclaim. Reversal of the RTC is in order, and a
remand is necessary for trial on the merits of the counterclaim.

It would be perfectly satisfactory for the Court to leave this matter at that. Still, an explanation of the
reason behind the new rule is called for, considering that the rationale behind the previous rule was
frequently elaborated upon.

Under Act No. 190, or the Code of Procedure in Civil Actions promulgated in 1901, it was recognized in
Section 127(1) that the plaintiff had the right to seek the dismissal of the complaint at any time before
trial, provided a counterclaim has not been made, or affirmative relief sought by the cross-complaint or
answer of the defendant.[59] Note that no qualification was made then as to the nature of the
counterclaim, whether it be compulsory or permissive. The protection of the defendants right to
prosecute the counterclaim was indeed unqualified. In City of Manila, decided in 1918, the Court
explained:

By paragraph 1 [of Section 127], it will be seen that, where the defendant has interposed a counterclaim,
or is seeking affirmative relief by a cross-complaint, that then, and in that case, the plaintiff cannot
dismiss the action so as to affect the right of the defendant in his counterclaim or prayer for affirmative
relief. The reason for that exception is clear. When the answer sets up an independent action against the
plaintiff, it then becomes an action by the defendant against the plaintiff, and, of course, the plaintiff has
no right to ask for a dismissal of the defendants action.[60]

Nonetheless, a new rule was introduced when Act No. 190 was replaced by the 1940 Rules of Court.
Section 2, Rule 30 of the 1940 Rules specified that if a counterclaim is pleaded by a defendant prior to
the service of the plaintiffs motion to dismiss, the action shall not be dismissed against the defendants
objection unless the counterclaim can remain pending for independent adjudication by the court. This
qualification remained intact when the 1964 Rules of Court was introduced.[61] The rule referred only to
compulsory counterclaims, or counterclaims which arise out of or are necessarily connected with the
transaction or occurrence that is the subject matter of the plaintiffs claim, since the rights of the parties
arising out of the same transaction should be settled at the same time.[62] As was evident in Metals,
International Container and BA Finance, the rule was eventually extended to instances wherein it was
the defendant with the pending counterclaim, and not the plaintiff, that moved for the dismissal of the
complaint.
 We should not ignore the theoretical bases of the rule distinguishing compulsory counterclaims from
permissive counterclaims insofar as the dismissal of the action is concerned. There is a particular school
of thought that informs the broad proposition in Dalman that if the civil case is dismissed, so also is the
counterclaim filed therein,[63] or the more nuanced discussions offered in Metals, International
Container, and BA Finance. The most potent statement of the theory may be found in Metals,[64] which
proceeds from the following fundamental premisesa compulsory counterclaim must be set up in the
same proceeding or would otherwise be abated or barred in a separate or subsequent litigation on the
ground of auter action pendant, litis pendentia or res judicata; a compulsory counterclaim is auxiliary to
the main suit and derives its jurisdictional support therefrom as it arises out of or is necessarily
connected with the transaction or occurrence that is the subject matter of the complaint;[65] and that if
the court dismisses the complaint on the ground of lack of jurisdiction, the compulsory counterclaim
must also be dismissed as it is merely ancilliary to the main action and no jurisdiction remained for any
grant of relief under the counterclaim.

The first point is derived from Section 4, Rule 9, of the 1964 Rules of Court, while the two latter points
are sourced from American jurisprudence. There is no disputing the theoretical viability of these three
points. In fact, the requirement that the compulsory counterclaim must be set up in the same
proceeding remains extant under the 1997 Rules of Civil Procedure.[66] At the same time, other
considerations rooted in actual practice provide a counterbalance to the above-cited rationales.

Whatever the nature of the counterclaim, it bears the same integral characteristics as a complaint;
namely a cause (or causes) of action constituting an act or omission by which a party violates the right of
another. The main difference lies in that the cause of action in the counterclaim is maintained by the
defendant against the plaintiff, while the converse holds true with the complaint. Yet, as with a
complaint, a counterclaim without a cause of action cannot survive.

It would then seemingly follow that if the dismissal of the complaint somehow eliminates the cause(s) of
the counterclaim, then the counterclaim cannot survive. Yet that hardly is the case, especially as a
general rule. More often than not, the allegations that form the counterclaim are rooted in an act or
omission of the plaintiff other than the plaintiffs very act of filing the complaint. Moreover, such acts or
omissions imputed to the plaintiff are often claimed to have occurred prior to the filing of the complaint
itself. The only apparent exception to this circumstance is if it is alleged in the counterclaim that the very
act of the plaintiff in filing the complaint precisely causes the violation of the defendants rights. Yet even
in such an instance, it remains debatable whether the dismissal or withdrawal of the complaint is
sufficient to obviate the pending cause of action maintained by the defendant against the plaintiff.[67]

These considerations persist whether the counterclaim in question is permissive or compulsory. A

compulsory counterclaim arises out of or is connected with the transaction or occurrence constituting
the subject matter of the opposing partys claim, does not require for its adjudication the presence of
third parties, and stands within the jurisdiction of the court both as to the amount involved and the
nature of the claim.[68] The fact that the culpable acts on which the counterclaim is based are founded
within the same transaction or occurrence as the complaint, is insufficient causation to negate the
counterclaim together with the complaint. The dismissal or withdrawal of the complaint does not
traverse the boundaries of time to undo the act or omission of the plaintiff against the defendant, or vice
versa. While such dismissal or withdrawal precludes the pursuit of litigation by the plaintiff, either
through his/her own initiative or fault, it would be iniquitous to similarly encumber the defendant who
maintained no such initiative or fault. If the defendant similarly moves for the dismissal of the
counterclaim or neglects to timely pursue such action, let the dismissal of the counterclaim be premised
on those grounds imputable to the defendant, and not on the actuations of the plaintiff.

The other considerations supplied in Metals are anchored on the premise that the jurisdictional
foundation of the counterclaim is the complaint itself. The theory is correct, but there are other facets to
this subject that should be taken into account as well. On the established premise that a counterclaim
involves separate causes of action than the complaint even if derived from the same transaction or
series of transactions, the counterclaim could have very well been lodged as a complaint had the
defendant filed the action ahead of the complainant.[69] The terms ancillary or auxiliary may mislead in
signifying that a complaint innately possesses more credence than a counterclaim, yet there are many
instances wherein the complaint is trivial but the counterclaim is meritorious. In truth, the notion that a
counterclaim is, or better still, appears to be merely ancillary or auxiliary is chiefly the offshoot of an
accident of chronology, more than anything else.

The formalistic distinction between a complaint and a counterclaim does not detract from the fact that
both of them embody causes of action that have in their end the vindication of rights. While the
distinction is necessary as a means to facilitate order and clarity in the rules of procedure, it should be
remembered that the primordial purpose of procedural rules is to provide the means for the vindication
of rights. A party with a valid cause of action against another party cannot be denied the right to relief
simply because the opposing side had the good fortune of filing the case first. Yet this in effect was what
had happened under the previous procedural rule and correspondent doctrine, which under their final
permutation, prescribed the automatic dismissal of the compulsory counterclaim upon the dismissal of
the complaint, whether upon the initiative of the plaintiff or of the defendant.

Thus, the present rule embodied in Sections 2 and 3 of Rule 17 ordains a more equitable disposition of
the counterclaims by ensuring that any judgment thereon is based on the merit of the counterclaim itself
and not on the survival of the main complaint. Certainly, if the counterclaim is palpably without merit or
suffers jurisdictional flaws which stand independent of the complaint, the trial court is not precluded
from dismissing it under the amended rules, provided that the judgment or order dismissing the
counterclaim is premised on those defects. At the same time, if the counterclaim is justified, the
amended rules now unequivocally protect such counterclaim from peremptory dismissal by reason of
the dismissal of the complaint.

WHEREFORE, the petition is GRANTED. The Orders dated 9 August 2005 and 10 October 2005 of Branch
29, Regional Trial Court of San Miguel, Zamboanga del Sur in Civil Case No. 98-012 are SET ASIDE.
Petitioners counterclaim as defendant in Civil Case. No. 98-012 is REINSTATED. The Regional Trial Court is
ORDERED to hear and decide the counterclaim with deliberate dispatch.

SO ORDERED.
RULE 18
PEFLG CORP. versus Amalgumated Management and Development Corp.

RULE 19
MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY, Petitioner,
- versus -
HEIRS of ESTANISLAO MIOZA, namely: The HEIRS of FILOMENO T. MIOZA, represented by LAUREANO M.
MIOZA; The HEIRS of PEDRO T. MIOZA; and The HEIRS of FLORENCIA T. MIOZA, represented by ANTONIO
M. URBIZTONDO, Respondents.
G.R. No. 186045 February 2, 2011

DECISION

This is a petition for review on certiorari seeking to reverse and set aside the Decision[1] dated March
25, 2008 of the Court of Appeals (CA) in CA-G.R. CV No. 70429, and the Resolution[2] dated January 8,
2009 denying petitioners motion for reconsideration.
The procedural and factual antecedents, as found by the CA, are as follows:

On July 6, 1998, a Complaint[3] for Reconveyance, Cancellation of Defendants Title, Issuance of New
Title to Plaintiffs and Damages was filed by Leila M. Hermosisima (Leila) for herself and on behalf of the
other heirs of the late Estanislao Mioza. The complaint alleged that Leilas late great grandfather,
Estanislao Mioza, was the registered owner of Cadastral Lot Nos. 986 and 991-A, located at Banilad
Estate, Cebu City, per TCT Nos. RT-6101 (T-10534) and RT-6102 (T10026). It was, likewise, alleged that the
late Estanislao Mioza had three children, namely, Adriana, Patricio, and Santiago, all surnamed Mioza. In
the late 1940s, the National Airports Corporation (NAC) embarked in an expansion project of the Lahug
Airport. For said purpose, the NAC acquired several properties which surrounded the airport either
through negotiated sale or through expropriation. Among the properties that were acquired by the NAC
through a negotiated sale were Lot Nos. 986 and 991-A.[4]

Leila claimed that their predecessors-in-interest, specifically, Adriana, Patricio, and Santiago executed a
Deed of Sale on February 15, 1950 conveying the subject lots to the NAC on the assurance made by the
latter that they (Leilas predecessors-in-interest) can buy the properties back if the lots are no longer
needed. Consequently, they sold Lot No. 986 to the NAC for only P157.20 and Lot No. 991-A for P105.40.
However, the expansion project did not push through. More than forty years after the sale, plaintiffs
informed the NACs successor-in-interest, the Mactan-Cebu International Airport Authority (MCIAA), that
they were exercising the buy-back option of the agreement, but the MCIAA refused to allow the
repurchase on the ground that the sale was in fact unconditional.

The MCIAA, through the Office of the Solicitor General (OSG), filed an Answer with Counterclaim.
After the parties filed their respective pleadings, trial ensued.

On November 16, 1999, before the MCIAA could present evidence in support of its case, a Motion for
Intervention,[5] with an attached Complainant-in-Intervention, was filed before the Regional Trial Court
(RTC) of Cebu City, Branch 22, by the heirs of Filomeno T. Mioza, represented by Laureano M. Mioza; the
heirs of Pedro T, Mioza, represented by Leoncio J. Mioza; and the Heirs of Florencia T. Mioza, represented
by Antonio M. Urbiztondo (Intervenors), who claimed to be the true, legal, and legitimate heirs of the
late Estanislao Mioza. The intervenors alleged in their complaint (1) that the plaintiffs in the main case
are not related to the late spouses Estanislao Mioza and Inocencia Togono whose true and legitimate
children were: Filomeno, Pedro, and Florencia, all surnamed Mioza; (2) that, on January 21, 1958,
Adriana, Patricio, and Santiago, executed, in fraud of the intervenors, an Extrajudicial Settlement of the
Estate of the late spouses Estanislao Mioza and Inocencia Togono and adjudicated unto themselves the
estate of the deceased spouses; and (3) that, on February 15, 1958, the same Adriana, Patricio, and
Santiago, fraudulently, deceitfully, and in bad faith, sold Lot Nos. 986 and 991-A to the NAC. The
intervenors thus prayed for the following reliefs:
a. Declaring herein intervenors as the true, legal and legitimate heirs of the late spouses Estanislao
Mioza and Inocencia Togono;

b. Declaring herein intervenors as the true, rightful and registered owners of Lots 986 and 991-A of the
Banilad Friar Lands Estate;

c. Declaring the Extrajudicial Settlement executed on January 21, 1958 by the late Adriana Mioza and the
late Patricio Mioza and the late Santiago Mioza that they are the only heirs of the late spouses Estanislao
Mioza and Inocencia Togono, who died intestate and without any debts or obligations and adjudicating
among themselves the estate of the deceased x x x as void ab initio;

d. Declaring the sale of Lots 986 and 991-A of the Banilad Friar Lands Estate executed by the late Adriana
Mioza, the late Patricio Mioza and the late Santiago Mioza in favor of the National Airport Corporation on
February 15, 1958 x x x as void ab initio;

e. Ordering the cancellation of Transfer Certificate of Title Nos. 120370 and 120372 for Lots 986 and 991-
A in the name of the Mactan-Cebu International Airport Authority and restoring Transfer Certificate of
Title Nos. RT-6101 (T-10534) and RT-6102 (T-10026) to be the true and valid torrens titles to Lots 986 and
991-[A].

f. Condemning plaintiffs Leila M. Hermosisima and Constancio Mioza to pay intervenors, who are the
true, lawful and legitimate heirs of the late Spouses Estanislao Mioza and Inocencia Togono, the amounts
of P300,000.00 and P100,000.00 as moral and exemplary damages respectively;

g. Condemning plaintiffs to pay the cost of suit.[6]

On February 18, 2000, the RTC of Cebu City, Branch 22, issued an Order[7] denying the Motion for
Intervention.

In denying the motion, the trial court opined that the ownership of the subject lots was merely a
collateral issue in the action. The principal issue to be resolved was whether or not the heirs of the late
Estanislao Mioza whoever they may be have a right to repurchase the said lots from the MCIAA.
Consequently, the rights being claimed by the intervenors should be asserted in and would be fully
protected by a separate proceeding. Moreover, if the motion was granted, it would unduly delay the
proceedings in the instant case. Finally, the complaint-in-intervention was flawed, considering that it was
not verified and does not contain the requisite certification of non-forum shopping.
The intervenors filed a Motion for Reconsideration,[8] to which was attached a Complaint-in-
Intervention with the required Verification and Certificate of Non-Forum Shopping.[9] However, the RTC
denied the motion in its Order dated July 25, 2000.

Aggrieved, the intervenors sought recourse before the CA, docketed as CA-G.R. CV No. 70429, on the
following assignment of errors:

I.

THE COURT A QUO IN ITS ORDER DATED FEBRUARY 18, 2000 GRAVELY ERRED IN DISMISSING THE ABOVE
CAPTIONED COMPLAINT BASED ON THE GROUND THAT: 1). THE RIGHTS CLAIMED BY MOVANTS-
INTERVERNORS (NOW INTERVENORS-APPELLANTS) WOULD MORE APPROPRIATELY BE ASSERTED IN,
AND WOULD BE FULLY PROTECTED BY, A SEPARATE PROCEEDING; 2). IT (THE COMPLAINT-IN-
INTERVENTION) WILL DELAY THE PROCEEDINGS OF THE INSTANT CASE; AND 3). THAT THE COMPLAINT-
IN-INTERVENTION IS NOT VERIFIED AND DOES NOT CONTAIN THE REQUISITE CERTIFICATION OF NON-
FORUM SHOPPING.

II.

THE COURT A QUO IN ITS ORDER DATED JULY 25, 2000 GRAVELY ERRED WHEN IT DENIED MOVANTS-
INTERVENORS (NOW INTERVENORS-APPELLANTS) MOTION FOR RECONSIDERATION DATED MARCH 20,
2000, AGAIN ON THE GROUND THAT TO ALLOW THE INTERVENORS TO INTERVENE IN THIS CASE WHICH
IS ALREADY SUBMITTED FOR DECISION WOULD ONLY DELAY THE DISPOSAL OF THIS CASE AND THAT
ANYWAY, THE INTERVERNORS HAVE NOTHING TO FEAR BECAUSE THEIR CLAIMS, IF THERE IS ANY, CAN BE
WELL THRESHED OUT IN ANOTHER PROCEEDING.[10]

On March 25, 2008, the CA rendered the assailed Decision, the decretal portion of which provides:

WHEREFORE, the appealed Orders dated February 18, 2000 and July 25, 2000 of the RTC of Cebu City, in
Civil Case No. 22290, are REVERSED and SET ASIDE. The RTC of Cebu City is directed to resolve with
deliberate dispatch Civil Case No. 22290 and to admit the complaint-in-intervention filed by the
intervenors-appellants.

SO ORDERED.[11]

In ruling for the intervenors, the CA ratiocinated that contrary to the findings of the trial court, the
determination of the true heirs of the late Estanislao Mioza is not only a collateral, but the focal issue of
the case, for if the intervenors can prove that they are indeed the true heirs of Estanislao Mioza, there
would be no more need to determine whether the right to buy back the subject lots exists or not as the
MCIAA would not have acquired rights to the subject lots in the first place. In addition, to grant the
motion for intervention would avoid multiplicity of suits. As to the lack of verification and certification on
non-forum shopping, the CA opined that the filing of the motion for reconsideration with an appended
complaint-in-intervention containing the required verification and certificate of non-forum shopping
amounted to substantial compliance of the Rules.

Petitioner then filed a motion for reconsideration, but it was denied in the Resolution dated January 8,
2009.

Hence, the petition assigning the lone error that:

THE COURT OF APPEALS (CEBU CITY) GRAVELY ERRED IN ALLOWING RESPONDENTS TO INTERVENE IN
CIVIL CASE NO. CEB-22290.[12]

Petitioner argues that to allow the intervenors to intervene in the proceedings before the trial court
would not only unduly prolong and delay the resolution of the case, it would make the proceedings
unnecessarily complicated and change the nature of the proceedings. Furthermore, contrary to the
requirements for the allowance of a motion for intervention, their legal interest in the subject properties
appear to be merely contingent or expectant and not of direct or immediate character. Petitioner also
posits that the intervenors rights can be better protected in another proceeding.

Anent the lack of verification and certification on non-forum shopping, petitioner maintains that the
trial court was correct in denying the motion on this ground. In addition, even if the complaint-in-
intervention with the required verification and certificate of non-forum shopping was appended to the
intervenors motion for reconsideration, the complaint-in-intervention was not verified by all the
interested parties or all the heirs of Filomeno Mioza, which still warrants its dismissal.

The petition is meritorious.

At the outset, on the procedural aspect, contrary to petitioners contention, the initial lack of the
complaint-in-intervention of the requisite verification and certification on non-forum shopping was cured
when the intervenors, in their motion for reconsideration of the order denying the motion to intervene,
appended a complaint-in-intervention containing the required verification and certificate of non-forum
shopping.

In the case of Altres v. Empleo,[13] this Court clarified, among other things, that as to verification, non-
compliance therewith or a defect therein does not necessarily render the pleading fatally defective. The
court may order its submission or correction, or act on the pleading if the attending circumstances are
such that strict compliance with the Rule may be dispensed with in order that the ends of justice may be
served thereby. Further, a verification is deemed substantially complied with when one who has ample
knowledge to swear to the truth of the allegations in the complaint or petition signs the verification, and
when matters alleged in the petition have been made in good faith or are true and correct.[14]

Moreover, as to the certification against forum shopping, non-compliance therewith or a defect therein,
unlike in verification, is generally not curable by its subsequent submission or correction thereof, unless
there is a need to relax the Rules on the ground of substantial compliance or presence of special
circumstances or compelling reasons. Also, the certification against forum shopping must be signed by all
the plaintiffs or petitioners in a case; otherwise, those who did not sign will be dropped as parties to the
case. Under reasonable or justifiable circumstances, however, as when all the plaintiffs or petitioners
share a common interest and invoke a common cause of action or defense, the signature of only one of
them in the certification against forum shopping substantially complies with the Rule.[15]

Thus, considering that the intervenors in their motion for reconsideration, appended a complaint-in-
intervention with the required verification and certificate of non-forum shopping, the requirement of the
Rule was substantially complied with.
Notwithstanding the intervenors compliance with the procedural requirements, their attempt to
intervene is doomed to fail.

Intervention is a remedy by which a third party, not originally impleaded in the proceedings, becomes a
litigant therein to enable him, her or it to protect or preserve a right or interest which may be affected by
such proceedings.[16] It is a proceeding in a suit or action by which a third person is permitted by the
court to make himself a party, either joining plaintiff in claiming what is sought by the complaint, or
uniting with defendant in resisting the claims of plaintiff, or demanding something adversely to both of
them; the act or proceeding by which a third person becomes a party in a suit pending between others;
the admission, by leave of court, of a person not an original party to pending legal proceedings, by which
such person becomes a party thereto for the protection of some right of interest alleged by him to be
affected by such proceedings.[17]

Section 1, Rule 19 of the Rules of Court states:

SECTION 1. Who may intervene. A person who has a legal interest in the matter in litigation, or in the
success of either of the parties, or an interest against both, or is so situated as to be adversely affected
by a distribution or other disposition of property in the custody of the court or of an officer thereof may,
with leave of court, be allowed to intervene in the action. The court shall consider whether or not the
intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and
whether or not the intervenors rights may be fully protected in a separate proceeding.

Under this Rule, intervention shall be allowed when a person has (1) a legal interest in the matter in
litigation; (2) or in the success of any of the parties; (3) or an interest against the parties; (4) or when he
is so situated as to be adversely affected by a distribution or disposition of property in the custody of the
court or an officer thereof.[18] Moreover, the court must take into consideration whether or not the
intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and
whether or not the intervenors right or interest can be adequately pursued and protected in a separate
proceeding.

In the case at bar, the intervenors are claiming that they are the legitimate heirs of Estanislao Mioza and
Inocencia Togono and not the original plaintiffs represented by Leila Hermosisima. True, if their
allegations were later proven to be valid claims, the intervenors would surely have a legal interest in the
matter in litigation. Nonetheless, this Court has ruled that the interest contemplated by law must be
actual, substantial, material, direct and immediate, and not simply contingent or expectant. It must be of
such direct and immediate character that the intervenor will either gain or lose by the direct legal
operation and effect of the judgment.[19] Otherwise, if persons not parties to the action were allowed
to intervene, proceedings would become unnecessarily complicated, expensive and interminable.[20]

Moreover, the intervenors contentions that Leilas predecessors-in-interest executed, in fraud of the
intervenors, an extra judicial settlement of the estate of the late spouses Estanislao Mioza and Inocencia
Togono and adjudicated unto themselves the estate of the deceased spouses, and that subsequently, her
predecessors-in-interest fraudulently and deceitfully sold the subject lots to the NAC, would
unnecessarily complicate and change the nature of the proceedings.

In addition to resolving who the true and legitimate heirs of Estanislao Mioza and Inocencia Togono are,
the parties would also present additional evidence in support of this new allegation of fraud, deceit, and
bad faith and resolve issues of conflicting claims of ownership, authenticity of certificates of titles, and
regularity in their acquisition. Verily, this would definitely cause unjust delay in the adjudication of the
rights claimed by the original parties, which primarily hinges only on the issue of whether or not the
heirs represented by Leila have a right to repurchase the subject properties from the MCIAA.

Verily, the allegation of fraud and deceit is an independent controversy between the original parties and
the intervenors. In general, an independent controversy cannot be injected into a suit by intervention,
hence, such intervention will not be allowed where it would enlarge the issues in the action and expand
the scope of the remedies. It is not proper where there are certain facts giving the intervenors case an
aspect peculiar to himself and differentiating it clearly from that of the original parties; the proper
course is for the would-be intervenor to litigate his claim in a separate suit.[21] Intervention is not
intended to change the nature and character of the action itself, or to stop or delay the placid operation
of the machinery of the trial. The remedy of intervention is not proper where it will have the effect of
retarding the principal suit or delaying the trial of the action.[22]

To be sure, not only will the intervenors rights be fully protected in a separate proceeding, it would best
determine the rights of the parties in relation to the subject properties and the issue of who the
legitimate heirs of Estanislao Mioza and Inocencia Togono, would be laid to rest.

Furthermore, the allowance or disallowance of a motion for intervention rests on the sound discretion
of the court after consideration of the appropriate circumstances.[23] It is not an absolute right. The
statutory rules or conditions for the right of intervention must be shown. The procedure to secure the
right to intervene is to a great extent fixed by the statute or rule, and intervention can, as a rule, be
secured only in accordance with the terms of the applicable provision.[24]

Consequently, the denial of the motion to intervene by the RTC was but just and proper. The conclusion
of the RTC is not bereft of rational bases. It denied the motion to intervene in the exercise of its sound
discretion and after taking into consideration the particular circumstances of the case.

WHEREFORE, subject to the above disquisition, the petition is GRANTED. The Decision dated March 25,
2008 and the Resolution dated January 8, 2009, of the Court of Appeals in CA-G.R. CV No. 70429, are
REVERSED and SET ASIDE. The Orders of the Regional Trial Court of Cebu City, Branch 22, dated February
18, 2000 and July 25, 2000, are REINSTATED.

SO ORDERED.

RULE 20
ANG KEK CHEN, petitioner,
vs.
THE HON. ABUNDIO BELLO, as Judge of the Metropolitan Trial Court of Manila, and the PEOPLE OF THE
PHILIPPINES, respondents.
Eriberto D. Ignacio for petitioner.

Petitioner questions the alleged grave abuse of discretion amounting to excess of jurisdiction committed
by respondent Judge Abundio Bello in violating Administrative Circular No. 7, dated September 23, 1974,
regarding the raffle of Criminal Cases Nos. 021429, 021430 and 021431, and prays that the Court orders
the outright dismissal of the cases.

It appears from the records that on December 28, 1977, petitioner Ang was charged before the then
Manila City Court (now Metropolitan Trial Court), Branch VIII, with the crimes of "MALTREATMENT,"
"THREATS," and "SLIGHT PHYSICAL INJURIES," committed according to the information as follows:

Criminal Case No. 021429 (Maltreatment)

That on or about December 26, 1977, in the City of Manila, Philippines, the said accused did then and
there wilfully, unlawfully and feloniously ill-treat by deed one, LE HE CO Y YU DE ANG by then and there,
slapping her and giving her fist/blows on her head several times, without, however, inflicting upon said
LE HE CO Y YU DE ANG any physical injury.

Criminal Case No. 021430 (Threats)

That on or about December 25, 1977, in the City of Manila, Philippines, the said accused in the heat of
anger, did then and there wilfully, unlawfully and feloniously threaten to commit a wrong and inflict
bodily harm upon the person of Le He Co y Yu De Ang by then and there threatening to kill her but,
accused, however, by subsequent acts, did not persist in the Idea conceived in his threats.

Criminal Case No. 021431 (Slight Physical Injuries)

That on or about December 26, 1977, in the City of Manila, Philippines, the said accused did then and
there willfully, unlawfully and feloniously attack, assault and use personal violence upon the person of
one LUCRECIA ANG Y GO by then and there slapping her on the face and by beating her thereby inflicting
upon the said LUCRECIA ANG Y GO physical injuries which have required and will require medical
attendance for a period of more than one but not more than 9 days and incapacitated and will
incapacitate the said Lucrecia Ang y Go from performing her customary labor during the said period of
time.

After the prosecution had presented its evidence, Ang filed a Demurrer to Evidence which was denied by
the respondent court. Ang elevated the incident to the Regional Trial Court of Manila on certiorari and
prohibition with prayer for preliminary injunction and/or temporary restraining orders. The petition was
likewise denied (Order dated November 18,1983). On appeal, the Court of Appeals affirmed in toto the
Regional Trial Court's Order.

Meanwhile, the then presiding judge of MTC Branch VIII (where the rases were pending) was promoted
to the Regional Trial Court of Manila. As a consequence, respondent judge, as officer-in-charge of the
MTC (Manila), directed the return of the case records to the Clerk of Court for "re-raffle." Petitioner,
however, alleged that he received the corresponding order only on August 23, 1984, or AFTER the cases
had already been actually "re-raffled" and assigned to respondent judge on August 16, 1984.

On September 27, 1984, Ang filed a motion to re-raffle the cases, which was denied. The subsequent
motion for reconsideration was likewise denied. 1 Hence, the present petition, alleging that:

1. Respondent judge committed grave abuse of discretion amounting to excess of jurisdiction in the
manner he conducted the raffle of Criminal Cases Nos. 021429,021430 and 021431 Annexes 'A', 'B' and
'C' hereof in gross violation of Circular No. 7 of this Hon. Court in his capacity as Acting Executive Judge
of the Metropolitan Trial Court of Manila resulting in the assignment to the branch presided by himself
of the aforesaid three (3) criminal cases and in denying peremptorily the motion for reconsideration filed
by petitioner contesting the manner of said raffle.

2. This Hon. Court in the exercise of its rule making power and supervision over all lower courts as
demonstrated in several cases decided by it since its reconstitution under the present administration in
having displayed judicial statemanship and activism and in the exercise of its equity jurisdiction may
order the outright dismissal of the said three (3) Criminal Cases Nos. 021429, 021430 and 021431
Annexes "A", "B" and "C" of this petition."
On November 17, 1986, the Court required the public respondents to comment on the petition. On
January 26, 1987, the Solicitor General, in an Urgent Manifestation and Motion, prayed that the entire
records of the case be ordered transmitted from Branch XIII, Metropolitan Court of Manila, to the
Solicitor General's Office, so that a comment may be prepared.

In the Comment dated June 23, 1987, the Solicitor General stated that the issue of the alleged non-
compliance with the Court's circular regarding the raffle of cases was trivial, that the Court's guidelines
on the matter did not vest any substantive right and a violation thereof did not per se infringe any
constitutional right of the accused, and that the raffling of cases did not involve an exercise of judicial
function, but was a mere administrative matter involving the distribution of cases among the different
branches of the court, which could not be the subject matter of a special civil action for certiorari. The
Solicitor General, however, stated in his comment that in Criminal Case No. 021430, for Light Threats, a
review of the records showed no evidence on the alleged threat to kill, hence it should be dismissed. As
regards Criminal Case 021429 (Maltreatment) and 021431 (Slight Physical Injuries) the Solicitor General
opined that it was premature to determine petitioner's guilt or innocence, for unless rebutted, evidence
on record appeared sufficient to establish the prosecution's cause.

The principal issue of alleged grave abuse of discretion in violation of Circular No. 7 of this Court,
regarding the manner of raffle of cases, not denied or explained by public respondent, is not a trivial
one. The raffle of cases is of vital importance to the administration of justice because it is intended to
insure impartial adjudication of cases. By raffling the cases public suspicion regarding assignment of
cases to predetermined judges is obviated.

A violation or disregard of the Court's circular on how the raffle of cases should be conducted is not to be
countenanced. A party has the right to be heard by an impartial and unbiased tribunal.

When the respondent judge conducted the raffle of the three criminal cases in question, apparently in
violation of the Court's Circular No. 7, he did not only arouse the suspicion that he had some ulterior
motive for doing so, but he violated the cardinal rule that all judicial processes must be done above
board. We consider the procedure of raffling cases to be an important element of judicial proceedings,
designed precisely to give assurance to the parties that the court hearing their case would be impartial.
On this point, we found the petition meritorious.

Regarding the other prayer of petitioner for the outright dismissal of the cases invoking the equity
jurisdiction of this Court, we are inclined to adopt the view of the Solicitor General that Criminal Case
No. 021430 (for Light Threats) should be dismissed for lack of evidence. Even Hon. Manuel T. Reyes (later
to become Justice of the Court of Appeals), before whom as a Regional Trial Judge the case was brought
on certiorari, was of the opinion that there was "utter paucity" of evidence with respect to the charge of
threats in Criminal Case No. 021430 to put to "serious doubt the legal cogency of the disputed orders of
April 21 and July 20, 1983;" however, on procedural grounds he refrained from granting the petition.
Considering the comment of the Solicitor General we find merit in petitioner's contention that Criminal
Case No. 021430 should be dismissed.

Accordingly, the order of the respondent court denying petitioner's motion to re-raffle the criminal cases
in question, except Criminal Case No. 021430 for threat which is hereby DISMISSED, is set aside and the
said cases Criminal Cases No. 021429 and 021431 are remanded to the Executive Judge for re-raffle in
accordance with this Court's Circular No. 7.
SO ORDERED.

RULE 21
RODOLFO NOEL LOZADA, JR., VIOLETA LOZADA and ARTURO LOZADA, Petitioners,
- versus -

PRESIDENT GLORIA MACAPAGAL ARROYO, EDUARDO ERMITA, AVELINO RAZON, ANGEL ATUTUBO and
SPO4 ROGER VALEROSO,* Respondents.

G.R. Nos. 184379-80 April 24, 2012

DECISION

SERENO, J.:

What the Court decides today has nothing to do with the substance or merits surrounding the aborted
deal of the Philippine government with the National Broadband Network and ZTE Corporation, or any
allegation of petitioner Rodolfo Noel June Lozada, Jr., (Lozada) regarding the same. There is only one
issue that we decide today whether circumstances are adequately alleged and proven by petitioner
Lozada to entitle him to the protection of the writ of amparo. Before us is a Petition for Review on
Certiorari of the Decision dated 12 September 2008 of the Court of Appeals (CA), dismissing the Petition
for the Issuance of a Writ of Amparo.[1]

Petitioner Lozada was the former President and Chief Executive Officer of the Philippine Forest
Corporation (PFC), a government-owned- and -controlled corporation under the Department of
Environment and Natural Resources (DENR).[2] Petitioner Violeta Lozada (Violeta) is his wife, while
petitioner Arturo Lozada (Arturo) is his brother.

At the time the Petition for the Writ of Amparo was filed, respondent former President Gloria Macapagal
Arroyo (former President Arroyo) was the incumbent President of the Philippines. Meanwhile, Eduardo
Ermita (ES Ermita) was then the Executive Secretary; Avelino Razon (Razon), the Director General of the
Philippine National Police (PNP); Angel Atutubo (Atutubo), the Assistant General Manager for Security
and Emergency Services of the Manila International Airport Authority; and Rodolfo Valeroso (Valeroso),
an agent of the Aviation Security Group (ASG) of the PNP.

Antecedent Facts

The instant Petition stems from the alleged corruption scandal precipitated by a transaction between the
Philippine government, represented by the National Broadband Network (NBN), and ZTE Corporation
(ZTE), a Chinese manufacturer of telecommunications equipment.[3] Former National Economic
Development Authority (NEDA) Secretary Romulo Neri (Sec. Neri) sought the services of Lozada as an
unofficial consultant in the ZTE-NBN deal.[4] The latter avers that during the course of his engagement,
he discovered several anomalies in the said transaction involving certain public officials.[5] These events
impelled the Senate of the Philippines Blue Ribbon Committee (Blue Ribbon Committee) to conduct an
investigation thereon,[6] for which it issued a subpoena directing Lozada to appear and testify on 30
January 2008.[7]
On that date, instead of appearing before the Blue Ribbon Committee, Lozada left the country for a
purported official trip to London, as announced by then DENR Secretary Lito Atienza (Sec. Atienza).[8] In
the Petition, Lozada alleged that his failure to appear at the scheduled hearing was upon the instructions
of then Executive Assistant Undersecretary Manuel Gaite (Usec. Gaite).[9] Consequently, the Senate
issued an Order dated 30 January 2008: (a) citing Lozada for contempt; (b) ordering his arrest and
detention; and (c) directing the Senate Sergeant-at-Arms to implement the Order and make a return
thereon.[10]

While overseas, Lozada asked Sec. Atienza whether the former could be allowed to go back to the
Philippines.[11] Upon the approval of Sec. Atienza, Lozada informed his family that he was returning
from Hong Kong on 5 February 2008 on board Cathay Pacific Flight No. 919, bound to arrive in Manila at
4:40 p.m. on the same day.[12]

In the Petition, Lozada claims that, upon disembarking from the aircraft, several men held his arms and
took his bag. Although he allegedly insisted on meeting with his family, he later realized that it was wiser
to just follow them, especially when he overheard from their handheld radio: [H]wag kayong dumaan
diyan sir nandyan ang mga taga senado.[13]

Lozada asked if he could go to the comfort room, an opportunity he used to call up his brother,
petitioner Arturo, and inform him of his situation.[14] The men thereafter led him through the departure
area of the airport and into a car waiting for them.[15] They made him sit alone at the back of the
vehicle, while a man, whom he later discovered to be respondent Valeroso, took the passenger seat and
was always in contact with other individuals.[16] Lozada observed that other cars tailed their vehicle.[17]

Sec. Atienza then phoned Lozada, assuring the latter that he was with people from the government, and
that the former was going to confer with ES and Ma[a]m. Lozada surmised that these individuals referred
to ES Ermita and former President Arroyo, respectively.[18] Sec. Atienza also purportedly instructed
Lozada to pacify his wife, petitioner Violeta, who was making public statements asking for her husbands
return.[19]

The vehicle traversed the South Luzon Expressway and drove towards the direction of Laguna.[20] Along
the way, the men asked Lozada to draft an antedated letter requesting police protection.[21]

Lozada requested that he be brought home to Pasig, but the men were allegedly compelled to deny his
request on account of unidentified security risks.[22] Eventually, however, the vehicle turned around and
drove to Libis, Quezon City. The group stopped at The Outback restaurant to meet with certain
individuals, who turned out to be Atty. Antonio Bautista (Atty. Bautista) and Colonel Paul Mascarinas
(Col. Mascarinas) of the Police Special Protection Office (PSPO). At the restaurant, Lozada claimed that
he was made to fill in the blanks of a prepared affidavit.[23]

After the meeting, the men informed Lozada that they were going to billet him in a hotel for a night, but
he suggested that they take him to La Salle Green Hills instead. The men acquiesced.[24]

Upon arriving in La Salle Green Hills, Lozada was met by Violeta and his sister, Carmen Lozada (Carmen).
[25] He observed that the perimeter was guarded by policemen, purportedly restraining his liberty and
threatening not only his security, but also that of his family and the De La Salle brothers.[26]
On 6 February 2008, at around 10:00 a.m., Col. Mascarinas supposedly brought Lozada to the office of
Atty. Bautista to finalize and sign an affidavit.[27]

At about 1:00 p.m., Violeta filed before this Court a Petition for Habeas Corpus, docketed as G.R. No.
181342 (the Habeas Corpus case).[28] Arturo likewise filed before this Court a Petition for a Writ of
Amparo, docketed as G.R. No. 181356 (the Amparo case), and prayed for the issuance of (a) the writ of
amparo; (b) a Temporary Protection Order (TPO); and (c) Inspection and Production Orders as regards
documents related to the authority ordering custody over Lozada, as well as any other document that
would show responsibility for his alleged abduction.[29]

At around the same time that Arturo filed the Petition for a Writ of Amparo, Col. Mascarinas drove
Lozada back to La Salle Green Hills.[30] Lozada was then made to sign a typewritten, antedated letter
requesting police protection.[31] Thereafter, former Presidential Spokesperson Michael Defensor (Sec.
Defensor) supposedly came and requested Lozada to refute reports that the latter was kidnapped and to
deny knowledge of alleged anomalies in the NBN-ZTE deal. Sec. Defensor then purportedly gave Lozada
P50,000 for the latters expenses.[32]

On 7 February 2008, Lozada decided to hold a press conference and contact the Senate Sergeant-at-
Arms, who served the warrant of arrest on him.[33] Lozada claimed that after his press conference and
testimony in the Senate, he and his family were since then harassed, stalked and threatened.[34]

On the same day, this Court issued a Resolution (a) consolidating the Habeas Corpus case and the
Amparo case; (b) requiring respondents in the Habeas Corpus case to comment on the Petition; (c)
issuing a Writ of Amparo; (d) ordering respondents in the Amparo case to file their verified Return; (e)
referring the consolidated Petitions to the CA; and (f) directing the CA to set the cases for hearing on 14
February 2008.[35] Accordingly, the court a quo set both cases for hearing on 14 February 2008.[36]

On 12 February 2008, respondents filed before the CA a Manifestation and Motion, praying for the
dismissal of the Habeas Corpus case.[37] They asserted that Lozada was never illegally deprived of his
liberty and was, at that time, no longer in their custody. They likewise averred that, beginning 8 February
2008, Lozada had already been under the supervision of the Senate and, from then on, had been
testifying before it.[38]

In their verified Return, respondents claimed that Sec. Atienza had arranged for the provision of a
security team to be assigned to Lozada, who was then fearful for his safety.[39] In effect, respondents
asserted that Lozada had knowledge and control of the events that took place on 5 February 2008,
voluntarily entrusted himself to their company, and was never deprived of his liberty. Hence,
respondents prayed for the denial of the interim reliefs and the dismissal of the Petition.[40]

During the initial hearing on 14 February 2008, Lozada and Violeta ratified the Petition in the Amparo
case[41] to comply with Section 2 of the Rule on the Writ of Amparo,[42] which imposes an order to be
followed by those who can sue for the writ.[43] The CA also dismissed the Habeas Corpus case in open
court for being moot and academic, as Lozada was physically present and was not confined or detained
by any of the respondents.[44] Considering that petitioners failed to question the dismissal of the
Habeas Corpus case, the said dismissal had lapsed into finality, leaving only the Amparo case open for
disposition.
Thereafter, Lozada filed a Motion for Temporary Protection Order and Production of Documents,[45]
while Arturo filed a Motion for Production of Documents.[46] Additionally, Arturo also filed a Motion for
the Issuance of Subpoena Ad Testificandum and Presentation of Hostile Witnesses and Adverse Parties
Romulo Neri, Benjamin Abalos, [Sr.], Rodolfo Valeroso, Jaime the Driver and Other Respondents.
Respondents opposed these motions.[47] The CA denied the Motion for the Issuance of Subpoena on
the ground that the alleged acts and statements attributed to Sec. Neri and Benjamin Abalos (Abalos)
were irrelevant to the Amparo case, and that to require them to testify would only result in a fishing
expedition.[48] The CA likewise denied Arturos subsequent Motion for Reconsideration.[49]

In its Resolution dated 5 March 2008, the CA dropped former President Arroyo as a respondent on the
ground that at the time the Petition in the Amparo case was filed, she was still the incumbent President
enjoying immunity from suit.[50] Arturo filed a Motion for Reconsideration,[51] which the CA denied in
its Resolution dated 25 March 2008.[52]

On 12 September 2008, the CA rendered its Decision denying petitioners the privilege of the Writ of
Amparo and dismissing the Petition.[53] The CA found that petitioners were unable to prove through
substantial evidence that respondents violated, or threatened with violation, the right to life, liberty and
security of Lozada.

Petitioners thus filed the instant Petition, praying for: (a) the reversal of the assailed CA Decision; (b) the
issuance of the TPO; and (c) the accreditation of the Association of Major Religious Superiors of the
Philippines and the De La Salle Brothers as the sanctuaries of Lozada and his family.[54] In the
alternative, petitioners pray that this Court remand the case to the CA for further hearings and reverse
the latters Orders: (a) denying the Motion to Issue a Subpoena Ad Testificandum and (b) dropping former
President Arroyo as a respondent. Petitioners raise the following issues:

(1) Whether the Court a [q]uo erred in ruling to dismiss the petition for a writ of amparo and
deny Petitioners prayer for a Temporary Protection Order, inter alia, because there is no substantial
evidence to prove that the right to life, liberty or security of Jun Lozada was violated or threatened with
violation. This rule is not in accord with the rule on the writ of amparo and Supreme Court jurisprudence
on substantial evidence[.]

(2) Whether the Ponencia erred and gravely abused its discretion by prematurely ruling that the
testimony of witnesses which Petitioners sought to present and who are subject of the Motion for
Issuance of Subpoena ad testificandum were irrelevant to the Petition for a Writ of Amparo in a way not
in accord with the Rules of Court and Supreme Court decisions.

(3) Whether the Court a quo erred in using and considering the affidavits of respondents in
coming up with the questioned decision when these were not offered as evidence and were not
subjected to cross-examination. This ruling is not in accord with the Rules of Court and jurisprudence.
(4) Whether the Court a [q]uo erred in dropping as respondent Pres. Gloria Arroyo despite her
failure to submit a verified return and personally claim presidential immunity in a way not in accord with
the Rule on the Writ of Amparo.[55]

The Office of the Solicitor General (OSG) asserts that petitioners failed to adduce substantial evidence, as
the allegations they propounded in support of their Petition were largely hearsay.[56] The OSG also
maintains that it was proper for the CA to have dropped former President Arroyo as respondent on
account of her presidential immunity from suit.[57]

Respondent Atutubo also alleges, among others, that: (a) Lozada voluntarily asked for security and
protection; (b) Lozada willingly submitted himself to the company of the police escorts; (c) Atutubo
merely accompanied him to pass through the contingency route customarily provided to VIP passengers,
public figures, foreign dignitaries, and the like; and (d) Atutubo only performed his job to ensure security
and maintain order at the airport upon the arrival of Lozada.[58]

In the face of these assertions by respondents, petitioners nevertheless insist that while they have
sufficiently established that Lozada was taken against his will and was put under restraint, respondents
have failed to discharge their own burden to prove that they exercised extraordinary diligence as public
officials.[59] Petitioners also maintain that it was erroneous for the CA to have denied their motion for
subpoena ad testificandum for being irrelevant, given that the relevancy of evidence must be examined
after it is offered, and not before.[60] Finally, petitioners contend that the presidential immunity from
suit cannot be invoked in amparo actions.[61]

Issues

In ruling on whether the CA committed reversible error in issuing its assailed Decision, three issues must
be discussed:

I. Whether the CA committed an error in dropping former President Arroyo as a respondent in

the Amparo case.

II. Whether the CA committed an error in denying petitioners Motion for the Issuance of a
Subpoena Ad Testificandum.

III. Whether petitioners should be granted the privilege of the writ of amparo.

Discussion

The writ of amparo is an independent and summary remedy that provides rapid judicial relief to protect
the peoples right to life, liberty and security.[62] Having been originally intended as a response to the
alarming cases of extrajudicial killings and enforced disappearances in the country, it serves both
preventive and curative roles to address the said human rights violations. It is preventive in that it breaks
the expectation of impunity in the commission of these offenses, and it is curative in that it facilitates the
subsequent punishment of perpetrators by inevitably leading to subsequent investigation and action.[63]

As it stands, the writ of amparo is confined only to cases of extrajudicial killings and enforced
disappearances, or to threats thereof.[64] Considering that this remedy is aimed at addressing these
serious violations of or threats to the right to life, liberty and security, it cannot be issued on amorphous
and uncertain grounds,[65] or in cases where the alleged threat has ceased and is no longer imminent or
continuing.[66] Instead, it must be granted judiciously so as not to dilute the extraordinary and remedial
character of the writ, thus:

The privilege of the writ of amparo is envisioned basically to protect and guarantee the rights to life,
liberty, and security of persons, free from fears and threats that vitiate the quality of this life. It is an
extraordinary writ conceptualized and adopted in light of and in response to the prevalence of extra-
legal killings and enforced disappearances. Accordingly, the remedy ought to be resorted to and granted
judiciously, lest the ideal sought by the Amparo Rule be diluted and undermined by the indiscriminate
filing of amparo petitions for purposes less than the desire to secure amparo reliefs and protection
and/or on the basis of unsubstantiated allegations.[67] (Emphasis supplied.)

Using this perspective as the working framework for evaluating the assailed CA decision and the
evidence adduced by the parties, this Court denies the Petition.

First issue: Presidential immunity from suit

It is settled in jurisprudence that the President enjoys immunity from suit during his or her tenure of
office or actual incumbency.[68] Conversely, this presidential privilege of immunity cannot be invoked by
a non-sitting president even for acts committed during his or her tenure.[69]

In the case at bar, the events that gave rise to the present action, as well as the filing of the original
Petition and the issuance of the CA Decision, occurred during the incumbency of former President
Arroyo. In that respect, it was proper for the court a quo to have dropped her as a respondent on
account of her presidential immunity from suit.

It must be underscored, however, that since her tenure of office has already ended, former President
Arroyo can no longer invoke the privilege of presidential immunity as a defense to evade judicial
determination of her responsibility or accountability for the alleged violation or threatened violation of
the right to life, liberty and security of Lozada.

Nonetheless, examining the merits of the case still results in the denial of the Petition on the issue of
former President Arroyos alleged responsibility or accountability. A thorough examination of the
allegations postulated and the evidence adduced by petitioners reveals their failure to sufficiently
establish any unlawful act or omission on her part that violated, or threatened with violation, the right to
life, liberty and security of Lozada. Except for the bare claims that: (a) Sec. Atienza mentioned a certain
Ma[a]m,[70] whom Lozada speculated to have referred to her, and (b) Sec. Defensor told Lozada that the
President was hurting from all the media frenzy,[71] there is nothing in the records that would
sufficiently establish the link of former President Arroyo to the events that transpired on 5-6 February
2010, as well as to the subsequent threats that Lozada and his family purportedly received.

Second issue: Denial of the issuance of a subpoena ad testificandum

This Court, in Roco v. Contreras,[72] ruled that for a subpoena to issue, it must first appear that the
person or documents sought to be presented are prima facie relevant to the issue subject of the
controversy, to wit:
A subpoena is a process directed to a person requiring him to attend and to testify at the hearing or trial
of an action or at any investigation conducted under the laws of the Philippines, or for the taking of his
deposition.

In this jurisdiction, there are two (2) kinds of subpoena, to wit: subpoena ad testificandum and subpoena
duces tecum. The first is used to compel a person to testify, while the second is used to compel the
production of books, records, things or documents therein specified. As characterized in H.C. Liebenow
vs. The Philippine Vegetable Oil Company:

The subpoena duces tecum is, in all respects, like the ordinary subpoena ad testificandum with the
exception that it concludes with an injunction that the witness shall bring with him and produce at the
examination the books, documents, or things described in the subpoena.

Well-settled is the rule that before a subpoena duces tecum may issue, the court must first be satisfied
that the following requisites are present: (1) the books, documents or other things requested must
appear prima facie relevant to the issue subject of the controversy (test of relevancy); and (2) such books
must be reasonably described by the parties to be readily identified (test of definiteness).[73] (Emphasis
supplied.)

In the present case, the CA correctly denied petitioners Motion for the Issuance of Subpoena Ad
Testificandum on the ground that the testimonies of the witnesses sought to be presented during trial
were prima facie irrelevant to the issues of the case. The court a quo aptly ruled in this manner:

The alleged acts and statements attributed by the petitioner to Neri and Abalos are not relevant to the
instant Amparo Petition where the issue involved is whether or not Lozadas right to life, liberty and
security was threatened or continues to be threatened with violation by the unlawful act/s of the
respondents. Evidence, to be relevant, must have such a relation to the fact in issue as to induce belief in
its existence or nonexistence. Further, Neri, Abalos and a certain driver Jaime are not respondents in this
Amparo Petition and the vague allegations averred in the Motion with respect to them do not pass the
test of relevancy. To Our mind, petitioner appears to be embarking on a fishing expedition. Petitioner
should present the aggrieved party [Lozada], who has been regularly attending the hearings, to prove
the allegations in the Amparo Petition, instead of dragging the names of other people into the picture.
We have repeatedly reminded the parties, in the course of the proceedings, that the instant Amparo
Petition does not involve the investigation of the ZTE-[NBN] contract. Petitioner should focus on the fact
in issue and not embroil this Court into said ZTE-NBN contract, which is now being investigated by the
Senate Blue Ribbon Committee and the Office of the Ombudsman.[74] (Emphasis supplied.)

All the references of petitioners to either Sec. Neri or Abalos were solely with respect to the ZTE-NBN
deal, and not to the events that transpired on 5-6 February 2008, or to the ensuing threats that
petitioners purportedly received. Although the present action is rooted from the involvement of Lozada
in the said government transaction, the testimonies of Sec. Neri or Abalos are nevertheless not prima
facie relevant to the main issue of whether there was an unlawful act or omission on the part of
respondents that violated the right to life, liberty and security of Lozada. Thus, the CA did not commit
any reversible error in denying the Motion for the Issuance of Subpoena Ad Testificandum.
Third issue: Grant of the privilege of the writ of amparo

A. Alleged violation of or threat to the right to life, liberty and security of Lozada

Sections 17 and 18 of the Rule on the Writ of Amparo requires the parties to establish their claims by
substantial evidence,[75] or such relevant evidence as a reasonable mind might accept as adequate to
support a conclusion.[76] The use of this evidentiary threshold reveals the clear intent of the framers of
the Rule on the Writ of Amparo to have the equivalent of an administrative proceeding, albeit judicially
conducted, in addressing amparo situations.[77]

In cases where the violation of the right to life, liberty or security has already ceased, it is necessary for
the petitioner in an amparo action to prove the existence of a continuing threat.[78] Thus, this Court
held in its Resolution in Razon v. Tagitis:[79]

Manalo is different from Tagitis in terms of their factual settings, as enforced disappearance was no
longer a problem in that case. The enforced disappearance of the brothers Raymond and Reynaldo
Manalo effectively ended when they escaped from captivity and surfaced, while Tagitis is still nowhere to
be found and remains missing more than two years after his reported disappearance. An Amparo
situation subsisted in Manalo, however, because of the continuing threat to the brothers right to
security; the brothers claimed that since the persons responsible for their enforced disappearance were
still at large and had not been held accountable, the former were still under the threat of being once
again abducted, kept captive or even killed, which threat constituted a direct violation of their right to
security of person.[80] (Emphasis supplied.)

In the present case, the totality of the evidence adduced by petitioners failed to meet the threshold of
substantial evidence. Sifting through all the evidence and allegations presented, the crux of the case
boils down to assessing the veracity and credibility of the parties diverging claims as to what actually
transpired on 5-6 February 2008. In this regard, this Court is in agreement with the factual findings of the
CA to the extent that Lozada was not illegally deprived of his liberty from the point when he
disembarked from the aircraft up to the time he was led to the departure area of the airport,[81] as he
voluntarily submitted himself to the custody of respondents:

[Lozada] was one of the first few passengers to get off the plane because he was instructed by Secretary
Atienza, th[r]ough a phone call on the night of 04 February 2008, while he was still in Hong Kong, to
proceed directly to the Bureau of Immigration so that few people would notice him and he could be
facilitated in going out of the airport without any hassle from the people of the Senate Sergeant-at-Arms.
Again, [Lozada] stated that he wanted to get away from the Senate people. [Lozada] even went to the
mens room of the airport, after he was allegedly grabbed, where he made a call to his brother Arturo,
using his Globe phone, and he was not prevented from making said call, and was simply advised by the
person who met him at the tube to (sic) sir, bilisan mo na. When they proceeded out of the tube and
while walking, [Lozada] heard from the radio track down, wag kayo dyan, sir, nandyan yong mga taga
Senado, so they took a detour and went up to the departure area, did not go out of the normal arrival
area, and proceeded towards the elevator near the Duty Free Shop and then down towards the tarmac.
Since [Lozada] was avoiding the people from the Office of the Senate Sergeant-at-Arms, said detour
appears to explain why they did not get out at the arrival area, where [Lozada] could have passed
through immigration so that his passport could be properly stamped.
This Court does not find any evidence on record that [Lozada] struggled or made an outcry for help when
he was allegedly grabbed or abducted at the airport. [Lozada] even testified that nobody held him, and
they were not hostile to him nor shouted at him. With noon day clarity, this Court finds that the reason
why [Lozada] was fetched at the airport was to help him avoid the Senate contingent, who would arrest
and detain him at the Office of the Senate Sergeant-at-Arms, until such time that he would appear and
give his testimony, pursuant to the Order of the Senate on the NBN-ZTE Project. [Lozada] clearly knew
this because at that time, it was still his decision not to testify before the Senate. He agreed with that
plan.[82] (Emphases supplied.)

The foregoing statements show that Lozada personally sought the help of Sec. Atienza to avoid the
Senate personnel, and thus knew that the men who met him at the airport were there to aid him in such
objective. Surely, the actions of Lozada evinced knowledge and voluntariness, uncharacteristic of
someone who claims to have been forcibly abducted.

However, these mens subsequent acts of directing Lozada to board the vehicle and driving him around,
without disclosing the exact purpose thereof, appear to be beyond what he had consented to and
requested from Sec. Atienza. These men neither informed him of where he was being transported nor
provided him complete liberty to contact his family members to assure them of his safety. These acts
demonstrated that he lacked absolute control over the situation, as well as an effective capacity to
challenge their instructions.

Nevertheless, it must be emphasized that if Lozada had in fact been illegally restrained, so much so that
his right to liberty and security had been violated, the acts that manifested this restraint had already
ceased and has consequently rendered the grant of the privilege of the writ of amparo moot. Whether
or not Lozada was deprived of his liberty from the point when he was led inside the vehicle waiting for
him at the airport up to the time he was taken to La Salle Green Hills, petitioners assertions that Lozada
and his family continue to suffer various threats from respondents remain unproven. The CA correctly
found as follows:

The supposed announcement of General Razon over the radio that [Lozada] was in the custody of the
PNP can neither be construed as a threat to [Lozadas] life, liberty and security. Certainly, no person in his
right mind would make that kind of media announcement if his intent was indeed to threaten
somebodys life, liberty and security.

xxx xxx xxx

He claims that he is threatened by the alleged presence of armed men riding in motorcycle passing
outside the De La Salle premises where he and his family are staying and by alleged threats of armed
men around him at places where he went to. Again, these alleged threats were not proven by any
evidence at all, as having originated from any of the respondents.

[Lozada] also considers the installation of the surveillance camera at the De La Salle and at St. Scholastica
as indirect threat to his right to life, liberty and security. He claims that these are spy cameras. However,
save for [Lozadas] self-serving claim, he simply failed to prove that they were installed or ordered
installed by the respondents for the purpose of threatening his right to life, liberty and security.

[Lozada] further maintains that there is an alleged trend, i.e., wherever he goes, there is a bomb threat.
There were bomb threats in the places where he went to like in [the Polytechnic University of the
Philippines], Dagupan, Cebu and Bohol. However, [Lozada] himself testified that he did not try to
ascertain where the bomb threats emanated. Plainly, there is no evidence on record that the bomb
threats were made by the respondents or done upon their instigation.

Moreover, [Lozada] views the pronouncement of the Secretary of Justice that he was put on the watch
list of the Bureau of Immigration as a threat to his life, liberty and security. This alleged threat is again
unsupported by evidence, as in fact, [Lozada] testified that he did not ascertain from the Bureau of
Immigration whether his name was actually in the official watch list of the Bureau. At any rate, the
Secretary of Justice is not one of the respondents in the amparo petition, and there is no showing in the
record that it was the respondents who ordered the same for the purpose of threatening him.

[Lozada] harps on the filing of alleged frivolous cases against him and his family as threat to his life,
liberty and security. xxx However, [Lozada] himself testified that he does not know whether the
respondents or any of the respondents ordered the filing of these cases against him. In any event, said
purported cases are to be determined based on their own merits and are clearly beyond the realm of the
instant amparo petition filed against the respondents.[83] (Emphasis supplied.)

Finally, petitioners insist that while they were able to sufficiently establish their case by the required
evidentiary standard, respondents failed to discharge their burden to prove their defenses by substantial
evidence and to show that respondents exercised extraordinary diligence as required by the Rule on the
Writ of Amparo.[84] This Court has squarely passed upon this contention in Yano v. Sanchez,[85] to wit:

The failure to establish that the public official observed extraordinary diligence in the performance of
duty does not result in the automatic grant of the privilege of the amparo writ. It does not relieve the
petitioner from establishing his or her claim by substantial evidence.

Thus, in amparo actions, petitioners must establish their claims by substantial evidence, and they cannot
merely rely on the supposed failure of respondents to prove either their defenses or their exercise of
extraordinary diligence. In this case, the totality of the evidence presented by petitioners fails to meet
the requisite evidentiary threshold, and the privilege of the writ of amparo has already been rendered
moot and academic by the cessation of the restraint to Lozadas liberty.

B. Propriety of the privilege of the writ of amparo and its interim reliefs

As previously discussed, there is no basis to grant Lozada the privilege of the writ of amparo, considering
that the illegal restraint alleged in this case had already ceased and there is no imminent or continuing
restriction on his liberty. In Castillo v. Cruz,[86] this Court held as follows:

Although respondents release from confinement does not necessarily hinder supplication for the writ of
amparo, absent any evidence or even an allegation in the petition that there is undue and continuing
restraint on their liberty, and/or that there exists threat or intimidation that destroys the efficacy of their
right to be secure in their persons, the issuance of the writ cannot be justified. (Emphasis supplied.)

Further, it appears that Lozada had already filed before the Department of Justice (DOJ) a Complaint
charging respondents with kidnapping and attempted murder, docketed as I.S. No. 2008-467.[87] In this
regard, this Courts ruling in Rubrico v. Arroyo[88] is worth considering:
First, a criminal complaint for kidnapping and, alternatively, for arbitrary detention rooted in the same
acts and incidents leading to the filing of the subject amparo petition has been instituted with the OMB,
docketed as OMB-P-C-O7-0602-E. The usual initial steps to determine the existence of a prima facie case
against the five (5) impleaded individuals suspected to be actually involved in the detention of Lourdes
have been set in motion. It must be pointed out, though, that the filing of the OMB complaint came
before the effectivity of the Amparo Rule on October 24, 2007.

Second, Sec. 22 of the Amparo Rule proscribes the filing of an amparo petition should a criminal action
have, in the meanwhile, been commenced. The succeeding Sec. 23, on the other hand, provides that
when the criminal suit is filed subsequent to a petition for amparo, the petition shall be consolidated
with the criminal action where the Amparo Rule shall nonetheless govern the disposition of the relief
under the Rule. Under the terms of said Sec. 22, the present petition ought to have been dismissed at
the outset. But as things stand, the outright dismissal of the petition by force of that section is no longer
technically feasible in light of the interplay of the following factual mix: (1) the Court has, pursuant to
Sec. 6 of the Rule, already issued ex parte the writ of amparo; (2) the CA, after a summary hearing, has
dismissed the petition, but not on the basis of Sec. 22; and (3) the complaint in OMB-P-C-O7-0602-E
named as respondents only those believed to be the actual abductors of Lourdes, while the instant
petition impleaded, in addition, those tasked to investigate the kidnapping and detention incidents and
their superiors at the top. Yet, the acts and/or omissions subject of the criminal complaint and the
amparo petition are so linked as to call for the consolidation of both proceedings to obviate the mischief
inherent in a multiplicity-of-suits situation.

Given the above perspective and to fully apply the beneficial nature of the writ of amparo as an
inexpensive and effective tool to protect certain rights violated or threatened to be violated, the Court
hereby adjusts to a degree the literal application of Secs. 22 and 23 of the Amparo Rule to fittingly
address the situation obtaining under the premises. Towards this end, two things are at once indicated:
(1) the consolidation of the probe and fact-finding aspects of the instant petition with the investigation
of the criminal complaint before the OMB; and (2) the incorporation in the same criminal complaint of
the allegations in this petition bearing on the threats to the right to security. Withal, the OMB should be
furnished copies of the investigation reports to aid that body in its own investigation and eventual
resolution of OMB-P-C-O7-0602-E. Then, too, the OMB shall be given easy access to all pertinent
documents and evidence, if any, adduced before the CA. Necessarily, Lourdes, as complainant in OMB-P-
C-O7-0602-E, should be allowed, if so minded, to amend her basic criminal complaint if the consolidation
of cases is to be fully effective. (Emphasis supplied.)

Thus, if the Complaint filed before the DOJ had already progressed into a criminal case, then the latter
action can more adequately dispose of the allegations made by petitioners. After all, one of the ultimate
objectives of the writ of amparo as a curative remedy is to facilitate the subsequent punishment of
perpetrators.[89] On the other hand, if there is no actual criminal case lodged before the courts, then
the denial of the Petition is without prejudice to the filing of the appropriate administrative, civil or
criminal case, if applicable, against those individuals whom Lozada deems to have unduly restrained his
liberty.

Finally, with respect to the interim reliefs sought by petitioners, this Court, in Yano v. Sanchez,[90]
declined to grant the prayer for the issuance of a TPO, as well as Inspection and Production Orders, upon
a finding that the implicated public officials were not accountable for the disappearance subject of that
case. Analogously, it would be incongruous to grant herein petitioners prayer for a TPO and Inspection
and Production Orders and at the same time rule that there no longer exists any imminent or continuing
threat to Lozadas right to life, liberty and security. Thus, there is no basis on which a prayer for the
issuance of these interim reliefs can be anchored.

WHEREFORE, the instant petition is DENIED for being moot and academic. The Court of Appeals denial of
the privilege of the writ of amparo is hereby AFFIRMED.

SO ORDERED.

RULE 22
ALFREDO JACA MONTAJES, Petitioner
- versus -
PEOPLE OF THE PHILIPPINES, Respondent.
G.R. No. 183449 March 12, 2012

DECISION

Assailed in this petition for review on certiorari are the Resolutions dated September 21, 2007[1] and
May 19, 2008 [2] of the Court of Appeals (CA) issued in CA-G.R. CR No. 00410 which dismissed the
petition for review filed by petitioner Alfredo Jaca Montajes for being filed out of time, and denied
reconsideration thereof, respectively.

In an Information[3] dated June 5, 2003, petitioner was charged with the crime of Direct Assault before
the Municipal Trial Court (MTC) of Buenavista, Agusan del Norte, the accusatory portion of which reads:

That on or about the 8th day of December, 2002, at 1:00 early morning, more or less, in Purok 10,
Barangay Abilan, Buenavista, Agusan del Norte, and within the jurisdiction of this Honorable Court, the
above-named accused, did then and there willfully, unlawfully and feloniously attack, assault, and hack
one JOSE B. RELLON, an elected Punong Barangay, while in the performance of his duties, and accused
fully know that Jose B. Rellon is a Barangay Official, to the damage and prejudice of said Jose B. Rellon.

CONTRARY TO LAW: Article 148 of the revised Penal Code.[4]

When arraigned, petitioner pleaded not guilty to the charge.[5]

Thereafter, trial ensued.

The evidence of the prosecution and the defense is summarized by the MTC as follows:

To substantiate the alleged commission of the crime of direct assault by the accused, complaining
witness Jose B. Rellon declared inter alia, that he has been the Barangay Captain of Barangay Abilan,
Buenavista, Agusan del Norte since the year 2002. On December 8, 2002, at about 1:00 o'clock in the
early morning, he was at the benefit dance sponsored by the Sangguniang Kabataan at Purok 4,
Barangay Abilan, Buenavista, Agusan del Norte. He met accused Alfredo Montajes who uttered to him
the words YOU'RE A USELESS CAPTAIN. Other words of similar import were likewise uttered by the
accused against him which he could no longer recall. After uttering the said words, the accused then
drew his bolo locally known as lagaraw and approached him. He then moved backward, but the accused
came near to him and struck him once with the lagaraw. Luckily, complainant was not hit as he managed
to move backward. Complainant's daughter named Vilma Dector and his wife, approached him and
brought him home. Many people, including two (2) CVO (Rodelio Laureto and Victorio Trinquite),
witnessed the incident.

During the mediation in the barangay hall, an investigation was conducted. The accused, according to the
complainant, asked for forgiveness from him which he declined, as he was of the impression that the law
must be applied and the accused should instead ask for forgiveness in court.

As proof that the accused asked for forgiveness, complainant presented a document (Exh. B) to that
effect.

Complainant had the incident blottered at the police station as evidenced by an extract thereof.

On cross-examination, complainant testified that he went to the benefit dance to stop it since it was
already 1:00 o'clock in the early morning and the benefit dance was still going on when it was supposed
to end at 12:00 o'clock midnight as the permit he gave was only up to 12:00 o'clock midnight. As a result
of the stoppage of the benefit dance, many persons got angry, and he heard that the house of the
accused was stoned which made the accused angry. In fact, he saw the accused murmuring as his house
was stoned by unknown persons. When the accused came near to him, the former did not ask for
assistance from him.

Prosecution witness Rodelio Laureto corroborated the declaration of the complainant that it was the
accused who hacked the complainant with the use of a lagaraw, but failed to hit him.

Accused Alfredo Montajes testified that in the evening of December 7, 2002, he was at home listening to
the disco as there was a benefit dance near their house. The benefit dance started at 7 o'clock in the
evening and ended at 1 o'clock in the early morning of December 8, 2002 when it was stopped by
Barangay Captain Jose Rellon. It was then that trouble started because many of those who have paid but
were not anymore allowed to dance complained to the Barangay Captain and requested that they be
given one more music so that they could avail for what they have paid for on that benefit dance, as they
were not refunded with their payments. When this protest went on, the CVO's reacted by clubbing them
using their jackets. Then a stoning incident followed. One of those hit by stones was his house. This
made him wild prompting him to get his lagaraw to look for the people responsible for stoning his house.
While looking for these persons along the road, he saw Barangay Captain Jose Rellon who was then two
(2) meters away from him, and he responded by telling him that he was looking for those persons
responsible for the stoning of his house. The complainant wanted to get the lagaraw from him but he
refused.

The accused explained, when confronted with a document (Exh. B) wherein it was stated that he asked
for apology from the Barangay Captain during the barangay level conciliation, that it was for the sole
purpose of not elevating this case and that they would settle amicably.

The accused also vehemently denied the accusation that he attacked the barangay captain.

Defense witness Luis A. Cajeles, Jr., a Barangay Kagawad of Barangay Abilan, Buenavista, Agusan del
Norte, testified that at about 1:00 o'clock in the early dawn of December 8, 2002, he heard of stoning
and shouting, in fact the window grill of his house was hit and he heard the people in panic. As a
barangay kagawad assigned to the Peace and Order Committee, he went out immediately from his house
and went to the road across the basketball court where the stoning was. He then saw accused Alfredo
Montajes holding a bolo. The accused was shouting that he was looking for the persons who stoned his
house. He also witnessed that the barangay captain asked the accused why he was bringing a bolo and
the accused replied that he was looking for the persons who stoned his house. He did not know what
else happened because he tried to drive the teenagers to their homes, because it was already very late
in the evening.

On cross-examination, he declared that the accused asked for forgiveness during the confrontation at
the Barangay because of the disturbance he made to the barangay captain and to the community
because some people were in panic as he was bringing a bolo, and not for attacking the Barangay
Captain.

Anatolio Lozada Bangahon, another defense witness, testified that he saw the accused coming out from
his house carrying a bolo, and when he asked him why he was bringing a bolo, the accused replied that
he was going to look for the persons who stoned his house. The accused was roaming around to look for
the persons who stoned his house, but he was not looking after the Barangay Captain.[6]

On December 29, 2005, the MTC issued its Judgment[7] finding petitioner guilty of the crime of direct
assault. The dispositive portion of the judgment reads:

WHEREFORE, the Court finds accused ALFREDO MONTAJES y JACA guilty beyond reasonable doubt of
the crime of Direct Assault as defined and penalized under Art. 148 of the Revised Penal Code and
hereby sentences him to suffer an indefinite prison term of FOUR (4) MONTHS AND ONE DAY of arresto
mayor in its maximum period, as minimum, to FOUR (4) YEARS, NINE MONTHS AND TEN DAYS of prision
correccional in its medium period, as maximum, there being no mitigating or aggravating circumstance
attending the commission of the offense charged. The accused is likewise ordered to pay a fine of ONE
THOUSAND PESOS (P1,000.00) Philippine Currency, without subsidiary imprisonment in case of
insolvency.[8]

On appeal, the Regional Trial Court (RTC), Branch 3, Butuan City, rendered its Decision[9] dated January
23, 2007 affirming in toto the judgment of the MTC.

Petitioner filed a motion for reconsideration which the RTC denied in an Order[10] dated May 4, 2007.
Petitioner filed with the CA a petition (should be motion) for extension of time to file petition for review
under Rule 42 of the Rules of Court praying for an extended period of 15 days from May 21, 2007, or
until June 5, 2007, within which to file his petition. Petitioner subsequently filed his petition for review
on June 5, 2007.
On September 21, 2007, the CA issued its assailed Resolution dismissing the petition outright for being
filed out of time. In so ruling, the CA said:

As borne by the records, the petitioner received the copy of the resolution denying his motion for
reconsideration on May 4, 2007, Thus, the 15-day reglementary period within which to file a petition for
review expired on May 21, 2007 (Monday) considering that the last day fell on a Saturday, May 19, 2007.
It appears that petitioner reckoned the extension from May 21, 2007 (Monday) and not from May 19,
2007 (Saturday). Petitioner should have reckoned the 15-day extension from May 19, 2007 and not from
May 21, 2007. It is well settled that when the day of the period falls on a Saturday, Sunday, or a legal
holiday, and a party is granted an extension of time, the extension should be counted from the last day
which is a Saturday, Sunday or legal holiday.[11]

Petitioner's motion for reconsideration was denied in a Resolution dated May 19, 2008.

Petitioner is now before us on the issue of whether the CA erred in denying due course to his petition for
review for being filed out of time.

Petitioner argues that he filed the motion for extension of time to file a petition for review with the CA
pursuant to Section 1, Rule 22 of the Rules of Court; that based on such provision, if the last day to file a
petition falls on a Saturday, the time shall not run until the next working day. Here, the last day of the
reglementary period within which to file the said petition for review with the CA fell on a Saturday, thus,
the last day to file the petition was moved to the next working day which was May 21, 2007, Monday.
Hence, he was not wrong in asking the CA to give him 15 days from May 21, 2007 to file the petition and
not from May 19, 2007, Saturday. Nonetheless, petitioner asks for liberality in the interest of justice
taking into consideration the merit of his petition claiming that his conviction was not supported by the
evidence on record. Moreover, he claims that his petition for review was filed with the CA on June 5,
2007, which was long before the CA dismissed the same on September 21, 2007 for being filed out of
time. He prays that the CA resolutions be reversed and set aside and the CA be directed to give due
course to his petition and to resolve the case on the merits.

We grant the petition.

Section 1, Rule 22 of the Rules of Court relied upon by petitioner provides:

Section 1. How to compute time. In computing any period of time prescribed or allowed by these Rules,
or by order of the court, or by any applicable statute, the day of the act or event from which the
designated period of time begins to run is to be excluded and the date of performance included. If the
last day of the period, as thus computed, falls on a Saturday, a Sunday, or a legal holiday in the place
where the court sits, the time shall not run until the next working day.

We then clarified the above-quoted provision when we issued A.M. No. 00-2-14-SC dated February 29,
2000 (Re: Computation of Time When the Last Day Falls on a Saturday, Sunday or a Legal Holiday and a
Motion for Extension on Next Working Day is Granted) which reads:

xxxx
Whereas, the aforecited provision [Section 1, Rule 22 of the Rules of Court] applies in the matter of filing
of pleadings in courts when the due date falls on a Saturday, Sunday or legal holiday, in which case, the
filing of the said pleading on the next working day is deemed on time;

Whereas, the question has been raised if the period is extended ipso jure to the next working day
immediately following where the last day of the period is a Saturday, Sunday or a legal holiday, so that
when a motion for extension of time is filed, the period of extension is to be reckoned from the next
working day and not from the original expiration of the period.

NOW THEREFORE, the Court Resolves, for the guidance of the Bench and the Bar, to declare that Section
1, Rule 22 speaks only of "the last day of the period" so that when a party seeks an extension and the
same is granted, the due date ceases to be the last day and hence, the provision no longer applies. Any
extension of time to file the required pleading should therefore be counted from the expiration of the
period regardless of the fact that said due date is a Saturday, Sunday or legal holiday.

In De la Cruz v. Maersk Filipinas Crewing, Inc.,[12] we said:

Section 1, Rule 22, as clarified by the circular, is clear. Should a party desire to file any pleading, even a
motion for extension of time to file a pleading, and the last day falls on a Saturday, Sunday or a legal
holiday, he may do so on the next working day. This is what petitioner did in the case at bar.

However, according to the same circular, the petition for review on certiorari was indeed filed out of
time. The provision states that in case a motion for extension is granted, the due date for the extended
period shall be counted from the original due date, not from the next working day on which the motion
for extension was filed. In Luz v. National Amnesty Commission, we had occasion to expound on the
matter. In that case, we held that the extension granted by the court should be tacked to the original
period and commences immediately after the expiration of such period.

In the case at bar, although petitioner's filing of the motion for extension was within the period provided
by law, the filing of the petition itself was not on time. Petitioner was granted an additional period of 30
days within which to file the petition. Reckoned from the original period, he should have filed it on May
8, 2006. Instead, he did so only on May 11, 2006, that is, 3 days late.[13]

Based on Section 1, Rule 22 of the Rules of Court, where the last day of the period for doing any act
required by law falls on a Saturday, a Sunday, or a legal holiday in the place where the court sits, the time
shall not run until the next working day. In this case, the original period for filing the petition for review
with the CA was on May 19, 2007, a Saturday. Petitioner's filing of his motion for extension of time to file
a petition for review on May 21, 2007, the next working day which followed the last day for filing which
fell on a Saturday, was therefore on time. However, petitioner prayed in his motion for extension that he
be granted 15 days from May 21, 2007 or up to June 5, 2007 within which to file his petition. He then
filed his petition for review on June 5, 2007. The CA did not act on the motion for extension, but instead
issued a Resolution dated September 21, 2007 dismissing the petition for review for being filed out of
time.

We find that the CA correctly ruled that the petition for review was filed out of time based on our
clarification in A.M. No. 00-2-14-SC that the 15-day extension period prayed for should be tacked to the
original period and commences immediately after the expiration of such period.[14] Thus, counting 15
days from the expiration of the period which was on May 19, 2007, the petition filed on June 5, 2007 was
already two days late. However, we find the circumstances obtaining in this case to merit the liberal
application of the rule in the interest of justice and fair play.
Notably, the petition for review was already filed on June 5, 2007, which was long before the CA issued
its Resolution dated September 21, 2007 dismissing the petition for review for being filed out of time.
There was no showing that respondent suffered any material injury or his cause was prejudiced by
reason of such delay. Moreover, the RTC decision which was sought to be reversed in the petition for
review filed in the CA had affirmed the MTC judgment convicting petitioner of direct assault, hence, the
petition involved no less than petitioners liberty.[15] We do not find anything on record that shows
petitioner's deliberate intent to delay the final disposition of the case as he had filed the petition for
review within the extended period sought, although erroneously computed. These circumstances should
have been taken into consideration for the CA not to dismiss the petition outright.
We have ruled that being a few days late in the filing of the petition for review does not automatically
warrant the dismissal thereof.[16] And even assuming that a petition for review is filed a few days late,
where strong considerations of substantial justice are manifest in the petition, we may relax the stringent
application of technical rules in the exercise of our equity jurisdiction.[17]

Courts should not be so strict about procedural lapses that do not really impair the proper
administration of justice.[18] After all, the higher objective of procedural rule is to insure that the
substantive rights of the parties are protected.[19] Litigations should, as much as possible, be decided on
the merits and not on technicalities. Every party-litigant must be afforded ample opportunity for the
proper and just determination of his case, free from the unacceptable plea of technicalities.[20]

WHEREFORE, the petition is granted. The assailed Resolutions of the Court of Appeals are SET ASIDE.
The Court of Appeals is ORDERED to reinstate the Petition for Review filed by petitioner in CA-G.R. CR
No. 00410.

SO ORDERED.

RULE 23
[G.R. No. 112710. May 30, 2001]

REPUBLIC OF THE PHILIPPINES, petitioner, vs. SANDIGANBAYAN (Second Division) and LUCIO TAN, ESTATE
OF FERDINAND E. MARCOS (represented By IMELDA R. MARCOS, IMEE M. MANOTOC, IRENE M.
ARANETA and FERDINAND MARCOS, JR.), IMELDA R. MARCOS, CARMEN KHAO TAN, FLORENCIO T.
SANTOS, NATIVIDAD P. SANTOS, DOMINGO CHUA, TAN HUI NEE, MARIANO TAN ENG LIAN, ESTATE OF
BENITO TAN KEE HIONG (represented by TARCIANA C. TAN), FLORENCIO N. SANTOS, JR., HARRY C. TAN,
TAN ENG CHAN, CHUNG POE KEE, MARIANO KHOO, MANUEL KHOO, MIGUEL KHOO, JAIME KHOO,
ELIZABETH KHOO, CELSO C. RANOLA, WILLIAM T. WONG, ERNESTO B. LIM, BENJAMIN T. ALBACITA, DON
FERRY, WILLY CO, FEDERICO MORENO, PANFILO O. DOMINGO, ESTATE/ HEIRS OF GREGORIO LICAROS,
CESAR ZALAMEA, SHAREHOLDINGS, INC., ALLIED BANKING CORP., FOREMOST FARMS, INC., FORTUNE
TOBACCO CORP. MARANAW HOTELS & RESORT CORP., VIRGINIA TOBACCO REDRYING PLANT, NORTHERN
TOBACCO REDRYING PLANT, ASIA BREWERY, INC., SIPALAY TRADING CORP., HIMMEL INDUSTRIES,
GRANDSPAN DEVELOPMENT CORP., BASIC HOLDINGS CORP., PROGRESSIVE FARMS, INC.,
MANUFACTURING SERVICES AND TRADE CORP., ALLIED LEASING & FINANCE CORPORATION, JEWEL
HOLDINGS, INC., IRIS HOLDINGS AND DEVELOPMENT CORP., VIRGO HOLDINGS AND DEVELOPMENT
CORP., POLO NOMINEES LTD., LIMITED SERVICES, LTD., RED SEAL LTD., COMMONS SEAL LTD., SPLENDID
NOMINEES LTD., YOUNG TAI LTD., YOUNG JIN LTD., CO FINANCE NOMINEES LTD., CORPORATE FINANCES
(D.C.T.) LTD., HARRIS SECRETARIES, ALLIED PACIFIC CORP., B & MCKAY NOMINEES LTD., ZANITH
ESTABLISHMENT, ARINSI, S.A., COTTON CORP. (B.V.I.) LTD., BARTONDALE LTD., HONGKONG, OCEANIC
BANK, SAN FRANCISCO, THE STERLING CARPET MAN LTD., THE STERLING CARPET SALES LTD., THE
STERLING CARPET DISTRIBUTORS LTD., MERCURY DRUG STORES LTD., CALGARY, ALBERTA, MERCURY
ENERGY RESOURCES LTD., respondents.

DECISION
This is a petition for certiorari under Rule 65 of the Rules of Court to set aside the Resolutions dated
August 23, 1993 and October 22, 1993 of the Sandiganbayan in SB Civil Case No. 0005 denying
petitioners Motion for Leave To Take the Deposition of Rolando C. Gapud Upon Oral Examination In the
Crown Colony of Hongkong.

On July 17, 1987, petitioner Republic of the Philippines, represented by the Philippine Commission for
Good Government, filed before the Sandiganbayan a complaint for Reversion, Reconveyance,
Restitution, Accounting and Damages. The complaint, docketed as Civil Case No. 0005, was filed against
26 individuals and was entitled Republic of the Philippines, Plaintiff v. Lucio C. Tan, Ferdinand E. Marcos,
Imelda R. Marcos, Carmen Khao Tan, Florencio T. Santos, Natividad P. Santos, Domingo Chua, Tan Hui
Nee, Mariano Tan Eng Lian, Estate of Benito Tan Kee Hiong (represented by Tarciana C. Tan), Florencio N.
Santos, Jr., Harry C. Tan, Tan Eng Chuan, Chung Poe Kee, Mariano Khoo, Manuel Khoo, Miguel Khoo,
Jaime Khoo, Elizabeth Khoo, Celso C. Ranola, William T. Wong, Ernesto B. Lim, Benjamin T. Albacita, Don
Ferry, Willy Co, Federico Moreno, Defendants.[1] The complaint alleged that defendant Ferdinand E.
Marcos, former President of the Philippines, and his wife Imelda, in violation of the Constitution and in
fraud of the Filipino people, embarked on a systematic plan accumulating wealth during their term as
President and First Lady of the Republic; that part of this plan was an agreement with herein private
respondent Lucio C. Tan whereby Mr. Marcos would own sixty per cent (60%) of Shareholdings, Inc., a
holding company which beneficially held and controlled substantial shares in corporations owned by Mr.
Tan such as Fortune Tobacco, Asia Brewery, Allied Banking Corporation and Foremost Farms; that in
addition to this agreement, Mr. Tan, from 1980 to 1986, paid Mr. Marcos sums of money as bribes and
commissions in consideration of the governments continued support for Mr. Tans diversified business
ventures; that to prevent disclosure of these transactions, Mr. Marcos and Mr. Tan used the other
defendants named in the complaint as their incorporators, directors, board members and/or
stockholders of corporations held and/or controlled by the two; that Mr. Tan, without sufficient collateral
and consideration but through the assistance of then Central Bank Governor Gregorio Licaros, acquired
control of the General Bank and Trust Company which eventually became Allied Banking Corporation;
that the Marcos spouses and Mr. Tan caused losses in millions of pesos to the Development Bank of the
Philippines (DBP) by unlawfully selling DBPs controlling interest in Century Park Sheraton Hotel Manila to
a company grossly undercapitalized but beneficially held and controlled by Mr. Tan, and that this
transaction was facilitated by defendant Don Ferry, then Vice-Chairman of DBP, and defendant Harry Tan.
Petitioner prayed for reconveyance of all funds and property or payment of the value of such funds and
property, for accounting and damages.[2]

In December 1987, petitioner filed a Manifestation and Motion praying for leave to expand or otherwise
make more specific certain allegations in the Complaint. This was granted by the Sandiganbayan in an
order dated December 11, 1987. Petitioner filed an Expanded Complaint on January 25, 1988.

In June 1988, herein respondent Don M. Ferry, one of the defendants therein, filed his answer. In March
1990, herein respondent Lucio Tan filed his answer. A separate answer was filed by the twenty-one (21)
defendants other than Ferdinand E. Marcos, Imelda Marcos, Don M. Ferry, Federico Moreno and Lucio
Tan.

On August 19, 1991, petitioner filed a Motion for Leave to Amend and for Admission of Second Amended
Complaint and attached thereto a Second Amended Complaint. Petitioner sought to substitute
defendant Ferdinand Marcos with his estate, President Marcos having died pendente lite, and include as
additional defendants three (3) individuals who allegedly participated in the Marcoses accumulation of
ill-gotten wealth, namely, Panfilo O. Domingo, then President of the Philippine National Bank which,
together with the Central Bank, assisted Mr. Tans acquisition of the General Bank and Trust Company;
the Estate of Central Bank Governor Licaros, Governor Licaros having likewise died pendente lite; and
Cesar Zalamea, then Chairman of the Board of the Development Bank of the Philippines, who
recommended the approval of and facilitated the acquisition by Mr. Tan of the DBP shares in Century
Park Sheraton Hotel.[3] Also named as additional defendants were forty-two (42) corporations believed
to be beneficially owned or controlled by the Lucio Tan group of business associates of the former
President.

The Motion was duly opposed by herein respondent Tan and defendants other than Ferdinand E.
Marcos, Imelda Marcos, Don Ferry and Federico Moreno.

On April 2, 1992, a Resolution was issued by the Sandiganbayan granting the Motion for Leave to Amend
and for Admission of the Second Amended Complaint and admitted the Second Amended Complaint.
The court ordered the issuance of summonses to the newly-impleaded defendants except the Estate of
Ferdinand E. Marcos which merely substituted the deceased Ferdinand E. Marcos, an original defendant.
[4]

On May 25, 1992, the 42 corporate defendants filed a Motion for a More Definite Statement or Bill of
Particulars. This motion was adopted by the rest of the additional defendants in a motion dated June 18,
1992.

Meanwhile, on May 8, 1992, respondent Panfilo Domingo received summons from respondent court
together with a copy of the Second Amended Complaint. On June 2, 1992, respondent Domingo filed an
Omnibus Motion praying for a copy of Annex A of the complaint, i.e., a list of corporations allegedly held
by Mr. Tan; the production of actionable documents, and submission of a Bill of Particulars.

In June 1993, petitioner filed a Motion for Leave To Take the Deposition of Rolando C. Gapud Upon Oral
Examination in the Crown Colony of Hongkong. Petitioner alleged that Mr. Rolando C. Gapud, former
financial adviser of President Marcos and his wife, was willing to testify on matters relevant to the
subject of the case; that Mr. Gapud executed three (3) sworn statements in Hongkong in 1987 setting
forth the various business activities of the former President, the manner in which these businesses were
conducted and managed, and identifying respondent Lucio Tan and thirty (30) other principal business
associates of the former President; that these affidavits were used by petitioner in filing civil and criminal
cases against the defendants; that Mr. Gapuds testimony is indispensable to establish the intricate
unlawful business activities of the Marcoses and their principal business associates or cronies, including
Mr. Tan; that in view of the nature of his testimony and the personal risks Mr. Gapud was facing in
assisting the government in the recovery of ill-gotten wealth, his testimony would be given only by
deposition upon oral examination. Petitioner prayed that the court allow the taking of the testimony by
deposition upon oral examination of Mr. Gapud before the Philippine Consulate in Hongkong, or in any
other Philippine Foreign Office, and on such dates and time as may be agreed upon by the parties.[5]

The individual defendants (except for the Estate of Ferdinand E. Marcos, Imelda R. Marcos, Don Ferry,
Federico Moreno, Panfilo O. Domingo, Estate/Heirs of Gregorio Licaros, and Cesar Zalamea) filed their
Opposition, to which petitioner replied.

In a Resolution dated August 23, 1993, respondent Sandiganbayan denied petitioners Motion for Leave
to Take Deposition of Rolando C. Gapud Upon Oral Examination in the Crown Colony of Hongkong.
Respondent court held that the taking of deposition is premature because not all defendants have been
summoned or have filed their answers to the complaint, and no special circumstances existed that
warranted the taking of the deposition before service of answers. Reconsideration of the resolution was
likewise denied on October 22, 1993. Hence this petition.

Petitioner claims that:

A. Respondent Sandiganbayan seriously erred in denying the petitioners Motion for Leave to Take the
Deposition of Rolando C. Gapud on the ground that summons have not yet been served upon all the
respondents and all the respondents have not yet filed their answer to the complaint.

B. Respondent Sandiganbayan erred in declaring that there is no showing of any special or unusual
circumstances to warrant the necessity of taking the deposition of Rolando C. Gapud.

C. Respondent Sandiganbayan erred in stating that the petitioner (plaintiff-movant) did not allege that
Rolando C. Gapud will be unavailable as witness to testify during the trial.[6]

Respondent Lucio Tan alleges that (1) the subject motion is premature because not all defendants in SB
Civil Case No. 0005 have been served with summons, the issues in the case have not been joined, the
allegations of the Second Amended Complaint are insufficient; (2) the taking of the proposed deposition
at this time would be highly prejudicial to the defendants; and (3) petitioner has not shown special
circumstances or unusual circumstances demonstrating a necessity to take the deposition in question.[7]

Respondent Panfilo Domingo, joined by respondent Cesar Zalamea,[8] alleges that: (1) the taking of the
deposition at this time is premature; (2) respondent Domingo was not given an opportunity to oppose
petitioners Motion for Leave to Take Deposition; (3) petitioner failed to show the existence of special
circumstances warranting the taking of deposition at this time; (4) respondent Sandiganbayan did not
commit grave abuse of discretion when it denied the Motion for Leave to Take Deposition.[9]

First of all, a deposition, in its technical and appropriate sense, is the written testimony of a witness
given in the course of a judicial proceeding, in advance of the trial or hearing upon oral examination or in
response to written interrogatories and where an opportunity is given for cross-examination.[10] A
deposition may be taken at any time after the institution of any action, whenever necessary or
convenient.[11] Pending action, it is governed by Rule 24, Section 1 of the Rules of Court which provides:

Section 1. Depositions pending action, when may be taken.By leave of court after jurisdiction has been
obtained over any defendant or over property which is the subject of the action, or without such leave
after an answer has been served, the testimony of any person, whether a party or not, may be taken, at
the instance of any party, by deposition upon oral examination or written interrogatories. The
attendance of witnesses may be compelled by the use of a subpoena as provided in Rule 23. Depositions
shall be taken only in accordance with these rules. The deposition of a person confined in prison may be
taken by leave of court on such terms as the court prescribes.[12]

Depositions pending action may be conducted by oral examination or written interrogatories, and may
be taken at the instance of any party, with or without leave of court. Leave of court is not necessary to
take a deposition after an answer to the complaint has been served. It is only when an answer has not
yet been filed (but jurisdiction has been obtained over any defendant or over property subject of the
action) that prior leave of court is required. The reason for this is that before filing of the answer, the
issues are not yet joined and the disputed facts are not clear.[13]

Petitioner does not dispute the fact that not all defendants have filed their respective answers to the
complaint. Petitioner claims, however, that the taking of Mr. Gapuds deposition does not require prior
leave of court because Section 1, Rule 24 states that a deposition may be taken after jurisdiction has
been obtained over ANY defendant. The provision does not state that jurisdiction should first be
acquired over ALL the defendants. And since summons has been served on most of the defendants and
some, particularly principal respondent Lucio Tan, have already filed their answers to the complaint,
jurisdiction has already been acquired by respondent Sandiganbayan, and there is no need for leave to
take Mr. Gapuds deposition.

The case at bar involves two (2) sets of defendantsthe first set named in the original complaint and the
second set in the Second Amended Complaint. The first names individual defendants while the second
set includes both individual and corporate defendants. Defendants Lucio Tan, Don Ferry and the 21 other
individual defendants (except Ferdinand E. Marcos, Imelda Marcos and Federico Moreno) filed answers
to the original complaint. To the Second Amended Complaint, no answer has been filed by the additional
defendants, namely, the Estate of Gregorio Licaros, Panfilo Domingo, Cesar Zalamea and the 42
corporations. Respondent court ordered the issuance of summonses in the Resolution of April 2, 1992
admitting the Second Amended Complaint.[14] Respondent Panfilo Domingo received summons and a
copy of the Second Amended Complaint on May 8, 1992.[15] Respondent Lucio Tan has stated, without
dispute from petitioner, that only two (2) of the 29 individual defendants have filed their answers to the
Second Amended Complaint. And not all of the 42 corporate defendants have been served with
summons, this petitioner admits.[16] Those corporate defendants who received summons merely filed a
Motion for a More Definite Statement or Bill of Particulars, not an answer.

Petitioner argues that the 42 corporations are owned and controlled by Mr. Tan. Following the ruling in
Republic v. Sandiganbayan (First Division),[17] the corporations are the res, the objects in the action for
the recovery of Mr. Tans illegally acquired wealth, hence, there is no cause of action against them and no
ground to implead them as defendants. Their inclusion in the Second Amended Complaint was
unnecessary and superfluous.[18]

Assuming that these corporations are merely the res in SB Civil Case No. 0005, they were not the only
defendants added in the Second Amended Complaint. Three (3) individual defendants, herein
respondents Panfilo Domingo, Estate of Gregorio Licaros and Cesar Zalamea, were added as well. A
careful reading of the Second Amended Complaint shows that the allegations against these three
individual defendants, although involving principal respondent Lucio Tan and his companies, rest mainly
on entirely different facts, were made on entirely different occasions and are separate and distinct from
the other. They are also different from the acts committed by the 22 other individual defendants in the
original complaint. The allegations against the additional defendants do not arise from their having acted
as dummies or alter-egos of the principal respondents, but as government officials who facilitated Mr.
Tans acquisition of private corporations despite non-compliance with legal requirements. It appears that
the allegations in the Second Amended Complaint against these three defendants are not clear for they
have adopted the corporate defendants Motion for a More Definite Statement or Bill of Particulars, and
respondent Domingo prayed for a bill of particulars in his Omnibus Motion. The additional defendants
should, at the very least, be given the opportunity to respond to the allegations against them and clarify
the disputed facts before discovery procedures may be resorted to.
Petitioner claims, however, that despite nonjoinder of issues, there exist special circumstances that
warrant the taking of Mr. Gapuds deposition.

Rule 24 entitled Depositions and Discovery was taken almost verbatim from Section V, Rule 26 (a) of the
Rules of Civil Procedure for the District Courts of the United States which has the same heading.[19] Rule
26 (a) is likewise contained in the Federal Rules of Civil Procedure of the United States. Rule 26 (a) was
however amended in 1948,[20] but prior to this amendment, the provision read:

(a) When Depositions May be Taken. By leave of court after jurisdiction has been obtained over any
defendant or over property which is the subject of the action or without such leave after an answer has
been served, the testimony of any person, whether a party or not, may be taken at the instance of any
party by deposition upon oral examination or written interrogatories for the purpose of discovery or for
use as evidence in the action or for both purposes. The attendance of witnesses may be compelled by
the use of subpoena as provided in Rule 45. Depositions shall be taken only in accordance with these
rules. The deposition of a person confined in prison may be taken only by leave of court on such terms as
the court prescribes.[21]

In Moores Federal Practice, it is stated that:

As originally promulgated, Rule 26 (a) provided (1) that depositions might be taken after jurisdiction had
been obtained over any defendant or over property which was the subject of the action and before an
answer was served, only upon leave of court; and (2) that after an answer had been served depositions
might be taken without leave of court.

x x x.

The expression an answer in original Rule 26 (a) was used in its generic sense as signifying a responsive
pleading to a pleading asserting a claim for relief. This follows of necessity from the principle upon which
the rule was drafted, namely, that the parties should be required to wait until the issues raised by a claim
of relief had been settled by the service of a responsive pleading to the claim of relief. Thus if the
defendant served an answer which contained a counterclaim against the plaintiff, both parties had to
wait until a reply containing an answer to the counterclaim had been served before they could proceed
to take depositions as of right with respect to the counterclaim. x x x[22]

Under the original Rule 26 (a) of the Federal Rules of Civil Procedure, any party desiring to take
depositions before answer was served was required to obtain leave of court. While the Rule did not
indicate in what situations the court should grant such leave, the applicable principles are found in
jurisprudence.[23]

The general rule is that a plaintiff may not be permitted to take depositions before answer is served.
Plaintiff must await joinder of issues because if the discovery is to deal with matters relevant to the case,
it is difficult to know exactly what is relevant until some progress has been made toward developing the
issues.[24] Ordinarily, the issues are made up before the need for discovery arises, hence, prior to the
time of delineation of the issues, the matter is in the control of the court.[25]

There are instances, however, when a deposition is allowed to be taken before service of answer once
jurisdiction has been acquired over the person or thing. Leave of court may be granted only in
exceptional or unusual cases,[26] and the decision is entirely within the discretion of the court.[27] It
should be granted only under special circumstances where conditions point to the necessity of
presenting a strong case for allowance of the motion.[28] There must be some necessity or good reason
for taking the testimony immediately[29] or that it would be prejudicial to the party seeking the order to
be compelled to await joinder of issue.[30] If the witness is aged or infirm, or about to leave the courts
jurisdiction, or is only temporarily in the jurisdiction, leave may be granted.[31] A general examination by
deposition before answer however is premature and ordinarily not allowed,[32] neither is mere
avoidance of delay a sufficient reason.[33]

In the case at bar, petitioner alleges that the taking of Mr. Gapuds deposition in lieu of his testimony is
necessary because the allegations in the complaint are based mainly on his disclosures regarding the
business activities of President Marcos and Lucio Tan; that although Mr. Gapud was granted immunity by
President Aquino from criminal, civil and administrative suits, he has been out of the country since 1987
and has no intention of returning, fearing for his safety; that this fear arose from his damaging
disclosures on the illicit activities of the cronies and business associates of former President Marcos
which therefore renders him unable to testify at the trial.

Petitioner has not cited any fact other than Mr. Gapuds cooperation with the Philippine government in
the recovery of ill-gotten wealth that would support the deponents claim of fear for his safety. No proof,
much less any allegation, has been presented to show that there exists a real threat to Mr. Gapuds life
once he returns to the Philippines and that adequate security cannot be provided by petitioner for such
a vital witness.

There is no question that the trial court has the power to direct, in its discretion, that a deposition shall
not be taken, if there are valid reasons for so ruling.[34] Petitioners reasons do not amount to an
exceptional or unusual case for us to grant leave and reverse respondent court. Petitioner has not
sufficiently shown the necessity for taking Mr. Gapuds deposition at this point in time before the other
defendants, particularly the individual defendants, have served their answers. Petitioner has not alleged
that Mr. Gapud is old, sick or infirm as to necessitate the taking of his deposition. Indeed, no urgency has
been cited and no ground given that would make it prejudicial for petitioner to await joinder of issues.

Finally, the Court notes that petitioner waited all these years for a ruling on this case instead of working
for the rest of the defendants to be summoned and their answers be filed. Petitioner can, as a matter of
course, take Mr. Gapuds deposition after the individual defendants have at least filed their answers.

IN VIEW WHEREOF, the petition is DISMISSED, the Resolutions dated August 23, 1993 and October 22,
1993 of respondent court in SB Civil Case No. 0005 are AFFIRMED.

SO ORDERED.

RULE 24
G.R. No. 176389 December 14, 2010

ANTONIO LEJANO, Petitioner,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.
G.R. No. 176864

PEOPLE OF THE PHILIPPINES, Appellee,

vs.
HUBERT JEFFREY P. WEBB, ANTONIO LEJANO, MICHAEL A. GATCHALIAN, HOSPICIO FERNANDEZ, MIGUEL
RODRIGUEZ, PETER ESTRADA and GERARDO BIONG, Appellants.

DECISION

Brief Background

On June 30, 1991 Estrellita Vizconde and her daughters Carmela, nineteen years old, and Jennifer, seven,
were brutally slain at their home in Parañaque City. Following an intense investigation, the police
arrested a group of suspects, some of whom gave detailed confessions. But the trial court smelled a
frame-up and eventually ordered them discharged. Thus, the identities of the real perpetrators remained
a mystery especially to the public whose interests were aroused by the gripping details of what
everybody referred to as the Vizconde massacre.

Four years later in 1995, the National Bureau of Investigation or NBI announced that it had solved the
crime. It presented star-witness Jessica M. Alfaro, one of its informers, who claimed that she witnessed
the crime. She pointed to accused Hubert Jeffrey P. Webb, Antonio "Tony Boy" Lejano, Artemio "Dong"
Ventura, Michael A. Gatchalian, Hospicio "Pyke" Fernandez, Peter Estrada, Miguel "Ging" Rodriguez, and
Joey Filart as the culprits. She also tagged accused police officer, Gerardo Biong, as an accessory after the
fact. Relying primarily on Alfaro's testimony, on August 10, 1995 the public prosecutors filed an
information for rape with homicide against Webb, et al.1

The Regional Trial Court of Parañaque City, Branch 274, presided over by Judge Amelita G. Tolentino,
tried only seven of the accused since Artemio Ventura and Joey Filart remained at large.2 The
prosecution presented Alfaro as its main witness with the others corroborating her testimony. These
included the medico-legal officer who autopsied the bodies of the victims, the security guards of Pitong
Daan Subdivision, the former laundrywoman of the Webb’s household, police officer Biong’s former
girlfriend, and Lauro G. Vizconde, Estrellita’s husband.

For their part, some of the accused testified, denying any part in the crime and saying they were
elsewhere when it took place. Webb’s alibi appeared the strongest since he claimed that he was then
across the ocean in the United States of America. He presented the testimonies of witnesses as well as
documentary and object evidence to prove this. In addition, the defense presented witnesses to show
Alfaro's bad reputation for truth and the incredible nature of her testimony.

But impressed by Alfaro’s detailed narration of the crime and the events surrounding it, the trial court
found a credible witness in her. It noted her categorical, straightforward, spontaneous, and frank
testimony, undamaged by grueling cross-examinations. The trial court remained unfazed by significant
discrepancies between Alfaro’s April 28 and May 22, 1995 affidavits, accepting her explanation that she
at first wanted to protect her former boyfriend, accused Estrada, and a relative, accused Gatchalian; that
no lawyer assisted her; that she did not trust the investigators who helped her prepare her first affidavit;
and that she felt unsure if she would get the support and security she needed once she disclosed all
about the Vizconde killings.
In contrast, the trial court thought little of the denials and alibis that Webb, Lejano, Rodriguez, and
Gatchalian set up for their defense. They paled, according to the court, compared to Alfaro’s testimony
that other witnesses and the physical evidence corroborated. Thus, on January 4, 2000, after four years
of arduous hearings, the trial court rendered judgment, finding all the accused guilty as charged and
imposing on Webb, Lejano, Gatchalian, Fernandez, Estrada, and Rodriguez the penalty of reclusion
perpetua and on Biong, an indeterminate prison term of eleven years, four months, and one day to
twelve years. The trial court also awarded damages to Lauro Vizconde.3

On appeal, the Court of Appeals affirmed the trial court’s decision, modifying the penalty imposed on
Biong to six years minimum and twelve years maximum and increasing the award of damages to Lauro
Vizconde.4 The appellate court did not agree that the accused were tried by publicity or that the trial
judge was biased. It found sufficient evidence of conspiracy that rendered Rodriguez, Gatchalian,
Fernandez, and Estrada equally guilty with those who had a part in raping and killing Carmela and in
executing her mother and sister.

On motion for reconsideration by the accused, the Court of Appeals' Special Division of five members
voted three against two to deny the motion,5 hence, the present appeal.

On April 20, 2010, as a result of its initial deliberation in this case, the Court issued a Resolution granting
the request of Webb to submit for DNA analysis the semen specimen taken from Carmela’s cadaver,
which specimen was then believed still under the safekeeping of the NBI. The Court granted the request
pursuant to section 4 of the Rule on DNA Evidence6 to give the accused and the prosecution access to
scientific evidence that they might want to avail themselves of, leading to a correct decision in the case.

Unfortunately, on April 27, 2010 the NBI informed the Court that it no longer has custody of the
specimen, the same having been turned over to the trial court. The trial record shows, however, that the
specimen was not among the object evidence that the prosecution offered in evidence in the case.

This outcome prompted accused Webb to file an urgent motion to acquit on the ground that the
government’s failure to preserve such vital evidence has resulted in the denial of his right to due process.

Issues Presented

Accused Webb’s motion to acquit presents a threshold issue: whether or not the Court should acquit
him outright, given the government’s failure to produce the semen specimen that the NBI found on
Carmela’s cadaver, thus depriving him of evidence that would prove his innocence.

In the main, all the accused raise the central issue of whether or not Webb, acting in conspiracy with
Lejano, Gatchalian, Fernandez, Estrada, Rodriguez, Ventura, and Filart, raped and killed Carmela and put
to death her mother and sister. But, ultimately, the controlling issues are:

1. Whether or not Alfaro’s testimony as eyewitness, describing the crime and identifying Webb, Lejano,
Gatchalian, Fernandez, Estrada, Rodriguez, and two others as the persons who committed it, is entitled
to belief; and

2. Whether or not Webb presented sufficient evidence to prove his alibi and rebut Alfaro’s testimony
that he led the others in committing the crime.
The issue respecting accused Biong is whether or not he acted to cover up the crime after its
commission.

The Right to Acquittal

Due to Loss of DNA Evidence

Webb claims, citing Brady v. Maryland,7 that he is entitled to outright acquittal on the ground of
violation of his right to due process given the State’s failure to produce on order of the Court either by
negligence or willful suppression the semen specimen taken from Carmela.

The medical evidence clearly established that Carmela was raped and, consistent with this, semen
specimen was found in her. It is true that Alfaro identified Webb in her testimony as Carmela’s rapist and
killer but serious questions had been raised about her credibility. At the very least, there exists a
possibility that Alfaro had lied. On the other hand, the semen specimen taken from Carmela cannot
possibly lie. It cannot be coached or allured by a promise of reward or financial support. No two persons
have the same DNA fingerprint, with the exception of identical twins.8 If, on examination, the DNA of the
subject specimen does not belong to Webb, then he did not rape Carmela. It is that simple. Thus, the
Court would have been able to determine that Alfaro committed perjury in saying that he did.

Still, Webb is not entitled to acquittal for the failure of the State to produce the semen specimen at this
late stage. For one thing, the ruling in Brady v. Maryland9 that he cites has long be overtaken by the
decision in Arizona v. Youngblood,10 where the U.S. Supreme Court held that due process does not
require the State to preserve the semen specimen although it might be useful to the accused unless the
latter is able to show bad faith on the part of the prosecution or the police. Here, the State presented a
medical expert who testified on the existence of the specimen and Webb in fact sought to have the same
subjected to DNA test.

For, another, when Webb raised the DNA issue, the rule governing DNA evidence did not yet exist, the
country did not yet have the technology for conducting the test, and no Philippine precedent had as yet
recognized its admissibility as evidence. Consequently, the idea of keeping the specimen secure even
after the trial court rejected the motion for DNA testing did not come up. Indeed, neither Webb nor his
co-accused brought up the matter of preserving the specimen in the meantime.

Parenthetically, after the trial court denied Webb’s application for DNA testing, he allowed the
proceeding to move on when he had on at least two occasions gone up to the Court of Appeals or the
Supreme Court to challenge alleged arbitrary actions taken against him and the other accused.11 They
raised the DNA issue before the Court of Appeals but merely as an error committed by the trial court in
rendering its decision in the case. None of the accused filed a motion with the appeals court to have the
DNA test done pending adjudication of their appeal. This, even when the Supreme Court had in the
meantime passed the rules allowing such test. Considering the accused’s lack of interest in having such
test done, the State cannot be deemed put on reasonable notice that it would be required to produce
the semen specimen at some future time.

Now, to the merit of the case.

Alfaro’s Story
Based on the prosecution’s version, culled from the decisions of the trial court and the Court of Appeals,
on June 29, 1991 at around 8:30 in the evening, Jessica Alfaro drove her Mitsubishi Lancer, with
boyfriend Peter Estrada as passenger, to the Ayala Alabang Commercial Center parking lot to buy shabu
from Artemio "Dong" Ventura. There, Ventura introduced her to his friends: Hubert Jeffrey P. Webb,
Antonio "Tony Boy" Lejano, Miguel "Ging" Rodriguez, Hospicio "Pyke" Fernandez, Michael Gatchalian,
and Joey Filart. Alfaro recalled frequently seeing them at a shabu house in Parañaque in January 1991,
except Ventura whom she had known earlier in December 1990.

As Alfaro smoked her shabu, Webb approached and requested her to relay a message for him to a girl,
whom she later identified as Carmela Vizconde. Alfaro agreed. After using up their shabu, the group
drove to Carmela’s house at 80 Vinzons Street, Pitong Daan Subdivision, BF Homes, Parañaque City.
Riding in her car, Alfaro and Estrada trailed Filart and Rodriguez who rode a Mazda pick-up and Webb,
Lejano, Ventura, Fernandez, and Gatchalian who were on a Nissan Patrol car.

On reaching their destination, Alfaro parked her car on Vinzons Street, alighted, and approached
Carmela’s house. Alfaro pressed the buzzer and a woman came out. Alfaro queried her about Carmela.
Alfaro had met Carmela twice before in January 1991. When Carmela came out, Alfaro gave her Webb’s
message that he was just around. Carmela replied, however, that she could not go out yet since she had
just arrived home. She told Alfaro to return after twenty minutes. Alfaro relayed this to Webb who then
told the group to drive back to the Ayala Alabang Commercial Center.

The group had another shabu session at the parking lot. After sometime, they drove back but only Alfaro
proceeded to Vinzons Street where Carmela lived. The Nissan Patrol and the Mazda pick-up, with their
passengers, parked somewhere along Aguirre Avenue. Carmela was at their garden. She approached
Alfaro on seeing her and told the latter that she (Carmela) had to leave the house for a while. Carmela
requested Alfaro to return before midnight and she would leave the pedestrian gate, the iron grills that
led to the kitchen, and the kitchen door unlocked. Carmela also told Alfaro to blink her car’s headlights
twice when she approached the pedestrian gate so Carmela would know that she had arrived.

Alfaro returned to her car but waited for Carmela to drive out of the house in her own car. Alfaro trailed
Carmela up to Aguirre Avenue where she dropped off a man whom Alfaro believed was Carmela’s
boyfriend. Alfaro looked for her group, found them, and relayed Carmela’s instructions to Webb. They
then all went back to the Ayala Alabang Commercial Center. At the parking lot, Alfaro told the group
about her talk with Carmela. When she told Webb of Carmela’s male companion, Webb’s mood changed
for the rest of the evening ("bad trip").

Webb gave out free cocaine. They all used it and some shabu, too. After about 40 to 45 minutes, Webb
decided that it was time for them to leave. He said, "Pipilahan natin siya [Carmela] at ako ang mauuna."
Lejano said, "Ako ang susunod" and the others responded "Okay, okay." They all left the parking lot in a
convoy of three vehicles and drove into Pitong Daan Subdivision for the third time. They arrived at
Carmela’s house shortly before midnight.

Alfaro parked her car between Vizconde’s house and the next. While waiting for the others to alight from
their cars, Fernandez approached Alfaro with a suggestion that they blow up the transformer near the
Vizconde’s residence to cause a brownout ("Pasabugin kaya natin ang transformer na ito"). But Alfaro
shrugged off the idea, telling Fernandez, "Malakas lang ang tama mo." When Webb, Lejano, and Ventura
were already before the house, Webb told the others again that they would line up for Carmela but he
would be the first. The others replied, "O sige, dito lang kami, magbabantay lang kami."
Alfaro was the first to pass through the pedestrian gate that had been left open. Webb, Lejano, and
Ventura followed her. On entering the garage, Ventura using a chair mounted the hood of the Vizcondes’
Nissan Sentra and loosened the electric bulb over it ("para daw walang ilaw"). The small group went
through the open iron grill gate and passed the dirty kitchen. Carmela opened the aluminum screen door
of the kitchen for them. She and Webb looked each other in the eyes for a moment and, together,
headed for the dining area.

As she lost sight of Carmela and Webb, Alfaro decided to go out. Lejano asked her where she was going
and she replied that she was going out to smoke. As she eased her way out through the kitchen door, she
saw Ventura pulling out a kitchen drawer. Alfaro smoked a cigarette at the garden. After about twenty
minutes, she was surprised to hear a woman’s voice ask, "Sino yan?" Alfaro immediately walked out of
the garden to her car. She found her other companions milling around it. Estrada who sat in the car
asked her, "Okay ba?"

After sitting in the car for about ten minutes, Alfaro returned to the Vizconde house, using the same
route. The interior of the house was dark but some light filtered in from outside. In the kitchen, Alfaro
saw Ventura searching a lady’s bag that lay on the dining table. When she asked him what he was
looking for, he said: "Ikaw na nga dito, maghanap ka ng susi." She asked him what key he wanted and he
replied: "Basta maghanap ka ng susi ng main door pati na rin ng susi ng kotse." When she found a bunch
of keys in the bag, she tried them on the main door but none fitted the lock. She also did not find the car
key.

Unable to open the main door, Alfaro returned to the kitchen. While she was at a spot leading to the
dining area, she heard a static noise (like a television that remained on after the station had signed off).
Out of curiosity, she approached the master’s bedroom from where the noise came, opened the door a
little, and peeked inside. The unusual sound grew even louder. As she walked in, she saw Webb on top of
Carmela while she lay with her back on the floor. Two bloodied bodies lay on the bed. Lejano was at the
foot of the bed about to wear his jacket. Carmela was gagged, moaning, and in tears while Webb raped
her, his bare buttocks exposed.

Webb gave Alfaro a meaningful look and she immediately left the room. She met Ventura at the dining
area. He told her, "Prepare an escape. Aalis na tayo." Shocked with what she saw, Alfaro rushed out of
the house to the others who were either sitting in her car or milling on the sidewalk. She entered her car
and turned on the engine but she did not know where to go. Webb, Lejano, and Ventura came out of the
house just then. Webb suddenly picked up a stone and threw it at the main door, breaking its glass
frame.

As the three men approached the pedestrian gate, Webb told Ventura that he forgot his jacket in the
house. But Ventura told him that they could not get in anymore as the iron grills had already locked.
They all rode in their cars and drove away until they reached Aguirre Avenue. As they got near an old
hotel at the Tropical Palace area, Alfaro noticed the Nissan Patrol slow down. Someone threw something
out of the car into the cogonal area.

The convoy of cars went to a large house with high walls, concrete fence, steel gate, and a long driveway
at BF Executive Village. They entered the compound and gathered at the lawn where the "blaming
session" took place. It was here that Alfaro and those who remained outside the Vizconde house learned
of what happened. The first to be killed was Carmela’s mother, then Jennifer, and finally, Carmella.
Ventura blamed Webb, telling him, "Bakit naman pati yung bata?" Webb replied that the girl woke up
and on seeing him molesting Carmela, she jumped on him, bit his shoulders, and pulled his hair. Webb
got mad, grabbed the girl, pushed her to the wall, and repeatedly stabbed her. Lejano excused himself at
this point to use the telephone in the house. Meanwhile, Webb called up someone on his cellular phone.

At around 2:00 in the morning, accused Gerardo Biong arrived. Webb ordered him to go and clean up
the Vizconde house and said to him, "Pera lang ang katapat nyan." Biong answered, "Okay lang." Webb
spoke to his companions and told them, "We don’t know each other. We haven’t seen each other…baka
maulit yan." Alfaro and Estrada left and they drove to her father’s house.12

1. The quality of the witness

Was Alfaro an ordinary subdivision girl who showed up at the NBI after four years, bothered by her
conscience or egged on by relatives or friends to come forward and do what was right? No. She was, at
the time she revealed her story, working for the NBI as an "asset," a stool pigeon, one who earned her
living by fraternizing with criminals so she could squeal on them to her NBI handlers. She had to live a
life of lies to get rewards that would pay for her subsistence and vices.

According to Atty. Artemio Sacaguing, former head of the NBI Anti-Kidnapping, Hijacking, and Armed
Robbery Task Force (AKHAR) Section, Alfaro had been hanging around at the NBI since November or
December 1994 as an "asset." She supplied her handlers with information against drug pushers and
other criminal elements. Some of this information led to the capture of notorious drug pushers like
Christopher Cruz Santos and Orlando Bacquir. Alfaro’s tip led to the arrest of the leader of the "Martilyo
gang" that killed a police officer. Because of her talent, the task force gave her "very special treatment"
and she became its "darling," allowed the privilege of spending nights in one of the rooms at the NBI
offices.

When Alfaro seemed unproductive for sometime, however, they teased her about it and she was piqued.
One day, she unexpectedly told Sacaguing that she knew someone who had the real story behind the
Vizconde massacre. Sacaguing showed interest. Alfaro promised to bring that someone to the NBI to tell
his story. When this did not happen and Sacaguing continued to press her, she told him that she might as
well assume the role of her informant. Sacaguing testified thus:

ATTY. ONGKIKO:

Q. Atty. Sacaguing, how did Jessica Alfaro become a witness in the Vizconde murder case? Will you tell
the Honorable Court?

xxxx

A. She told me. Your Honor, that she knew somebody who related to her the circumstances, I mean, the
details of the massacre of the Vizconde family. That’s what she told me, Your Honor.

ATTY. ONGKIKO:

Q. And what did you say?

xxxx
A. I was quite interested and I tried to persuade her to introduce to me that man and she promised that
in due time, she will bring to me the man, and together with her, we will try to convince him to act as a
state witness and help us in the solution of the case.

xxxx

Q. Atty. Sacaguing, were you able to interview this alleged witness?

WITNESS SACAGUING:

A. No, sir.

ATTY. ONGKIKO:

Q. Why not?

WITNESS SACAGUING:

A. Because Jessica Alfaro was never able to comply with her promise to bring the man to me. She told
me later that she could not and the man does not like to testify.

ATTY. ONGKIKO:

Q. All right, and what happened after that?

WITNESS SACAGUING:

A. She told me, "easy lang kayo, Sir," if I may quote, "easy lang Sir, huwag kayong…"

COURT:

How was that?

WITNESS SACAGUING:

A. "Easy lang, Sir. Sir, relax lang, Sir, papapelan ko, papapelan ko na lang ‘yan."

xxxx

ATTY. ONGKIKO:

Q. All right, and what was your reaction when Ms. Alfaro stated that "papapelan ko na lang yan?"

WITNESS SACAGUING:

A. I said, "hindi puwede yan, kasi hindi ka naman eye witness."

ATTY. ONGKIKO:

Q. And what was the reply of Ms. Alfaro?

WITNESS SACAGUING:

A. Hindi siya nakakibo, until she went away.

(TSN, May 28, 1996, pp. 49-50, 58, 77-79)

Quite significantly, Alfaro never refuted Sacaguing’s above testimony.

2. The suspicious details

But was it possible for Alfaro to lie with such abundant details some of which even tallied with the
physical evidence at the scene of the crime? No doubt, yes.

Firstly, the Vizconde massacre had been reported in the media with dizzying details. Everybody was
talking about what the police found at the crime scene and there were lots of speculations about them.

Secondly, the police had arrested some "akyat-bahay" group in Parañaque and charged them with the
crime. The police prepared the confessions of the men they apprehended and filled these up with details
that the evidence of the crime scene provided. Alfaro’s NBI handlers who were doing their own
investigation knew of these details as well. Since Alfaro hanged out at the NBI offices and practically lived
there, it was not too difficult for her to hear of these evidentiary details and gain access to the
documents.

Not surprisingly, the confessions of some members of the Barroso "akyat bahay" gang, condemned by
the Makati RTC as fabricated by the police to pin the crime on them, shows how crime investigators
could make a confession ring true by matching some of its details with the physical evidence at the crime
scene. Consider the following:

a. The Barroso gang members said that they got into Carmela’s house by breaking the glass panel of the
front door using a stone wrapped in cloth to deaden the noise. Alfaro could not use this line since the
core of her story was that Webb was Carmela’s boyfriend. Webb had no reason to smash her front door
to get to see her.

Consequently, to explain the smashed door, Alfaro had to settle for claiming that, on the way out of the
house, Webb picked up some stone and, out of the blue, hurled it at the glass-paneled front door of the
Vizconde residence. His action really made no sense. From Alfaro’s narration, Webb appeared rational in
his decisions. It was past midnight, the house was dark, and they wanted to get away quickly to avoid
detection. Hurling a stone at that glass door and causing a tremendous noise was bizarre, like inviting the
neighbors to come.

b. The crime scene showed that the house had been ransacked. The rejected confessions of the Barroso
"akyat-bahay" gang members said that they tried to rob the house. To explain this physical evidence,
Alfaro claimed that at one point Ventura was pulling a kitchen drawer, and at another point, going
through a handbag on the dining table. He said he was looking for the front-door key and the car key.
Again, this portion of Alfaro’s story appears tortured to accommodate the physical evidence of the
ransacked house. She never mentioned Ventura having taken some valuables with him when they left
Carmela’s house. And why would Ventura rummage a bag on the table for the front-door key, spilling the
contents, when they had already gotten into the house. It is a story made to fit in with the crime scene
although robbery was supposedly not the reason Webb and his companions entered that house.

c. It is the same thing with the garage light. The police investigators found that the bulb had been
loosened to turn off the light. The confessions of the Barroso gang claimed that one of them climbed the
parked car’s hood to reach up and darken that light. This made sense since they were going to rob the
place and they needed time to work in the dark trying to open the front door. Some passersby might
look in and see what they were doing.

Alfaro had to adjust her testimony to take into account that darkened garage light. So she claimed that
Ventura climbed the car’s hood, using a chair, to turn the light off. But, unlike the Barroso "akyat-bahay"
gang, Webb and his friends did not have anything to do in a darkened garage. They supposedly knew in
advance that Carmela left the doors to the kitchen open for them. It did not make sense for Ventura to
risk standing on the car’s hood and be seen in such an awkward position instead of going straight into
the house.

And, thirdly, Alfaro was the NBI’s star witness, their badge of excellent investigative work.lavvphil After
claiming that they had solved the crime of the decade, the NBI people had a stake in making her sound
credible and, obviously, they gave her all the preparations she needed for the job of becoming a fairly
good substitute witness. She was their "darling" of an asset. And this is not pure speculation. As pointed
out above, Sacaguing of the NBI, a lawyer and a ranking official, confirmed this to be a cold fact. Why the
trial court and the Court of Appeals failed to see this is mystifying.

At any rate, did Alfaro at least have a fine memory for faces that had a strong effect on her, given the
circumstances? Not likely. She named Miguel "Ging" Rodriguez as one of the culprits in the Vizconde
killings. But when the NBI found a certain Michael Rodriguez, a drug dependent from the Bicutan
Rehabilitation Center, initially suspected to be Alfaro’s Miguel Rodriguez and showed him to Alfaro at the
NBI office, she ran berserk, slapping and kicking Michael, exclaiming: "How can I forget your face. We just
saw each other in a disco one month ago and you told me then that you will kill me." As it turned out, he
was not Miguel Rodriguez, the accused in this case.13

Two possibilities exist: Michael was really the one Alfaro wanted to implicate to settle some score with
him but it was too late to change the name she already gave or she had myopic vision, tagging the wrong
people for what they did not do.

3. The quality of the testimony

There is another thing about a lying witness: her story lacks sense or suffers from inherent
inconsistencies. An understanding of the nature of things and the common behavior of people will help
expose a lie. And it has an abundant presence in this case.

One. In her desire to implicate Gatchalian, Fernandez, Estrada, Rodriguez, and Filart, who were supposed
to be Webb’s co-principals in the crime, Alfaro made it a point to testify that Webb proposed twice to his
friends the gang-rape of Carmela who had hurt him. And twice, they (including, if one believes Alfaro,
her own boyfriend Estrada) agreed in a chorus to his proposal. But when they got to Carmela’s house,
only Webb, Lejano, Ventura, and Alfaro entered the house.

Gatchalian, Fernandez, Estrada, and Rodriguez supposedly stayed around Alfaro’s car, which was parked
on the street between Carmela’s house and the next. Some of these men sat on top of the car’s lid while
others milled on the sidewalk, visible under the street light to anyone who cared to watch them,
particularly to the people who were having a drinking party in a nearby house. Obviously, the behavior
of Webb’s companions out on the street did not figure in a planned gang-rape of Carmela.

Two. Ventura, Alfaro’s dope supplier, introduced her for the first time in her life to Webb and his friends
in a parking lot by a mall. So why would she agree to act as Webb’s messenger, using her gas, to bring his
message to Carmela at her home. More inexplicably, what motivated Alfaro to stick it out the whole
night with Webb and his friends?

They were practically strangers to her and her boyfriend Estrada. When it came to a point that Webb
decided with his friends to gang-rape Carmela, clearly, there was nothing in it for Alfaro. Yet, she stuck it
out with them, as a police asset would, hanging in there until she had a crime to report, only she was not
yet an "asset" then. If, on the other hand, Alfaro had been too soaked in drugs to think clearly and just
followed along where the group took her, how could she remember so much details that only a drug-free
mind can?

Three. When Alfaro went to see Carmela at her house for the second time, Carmella told her that she
still had to go out and that Webb and his friends should come back around midnight. Alfaro returned to
her car and waited for Carmela to drive out in her own car. And she trailed her up to Aguirre Avenue
where she supposedly dropped off a man whom she thought was Carmela’s boyfriend. Alfaro’s trailing
Carmela to spy on her unfaithfulness to Webb did not make sense since she was on limited errand. But,
as a critical witness, Alfaro had to provide a reason for Webb to freak out and decide to come with his
friends and harm Carmela.

Four. According to Alfaro, when they returned to Carmela’s house the third time around midnight, she
led Webb, Lejano, and Ventura through the pedestrian gate that Carmela had left open. Now, this is
weird. Webb was the gang leader who decided what they were going to do. He decided and his friends
agreed with him to go to Carmela’s house and gang-rape her. Why would Alfaro, a woman, a stranger to
Webb before that night, and obviously with no role to play in the gang-rape of Carmela, lead him and the
others into her house? It made no sense. It would only make sense if Alfaro wanted to feign being a
witness to something she did not see.

Five. Alfaro went out of the house to smoke at the garden. After about twenty minutes, a woman
exclaimed, "Sino yan?" On hearing this, Alfaro immediately walked out of the garden and went to her car.
Apparently, she did this because she knew they came on a sly. Someone other than Carmela became
conscious of the presence of Webb and others in the house. Alfaro walked away because, obviously, she
did not want to get involved in a potential confrontation. This was supposedly her frame of mind: fear of
getting involved in what was not her business.

But if that were the case, how could she testify based on personal knowledge of what went on in the
house? Alfaro had to change that frame of mind to one of boldness and reckless curiosity. So that is what
she next claimed. She went back into the house to watch as Webb raped Carmela on the floor of the
master’s bedroom. He had apparently stabbed to death Carmela’s mom and her young sister whose
bloodied bodies were sprawled on the bed. Now, Alfaro testified that she got scared (another shift to
fear) for she hurriedly got out of the house after Webb supposedly gave her a meaningful look.

Alfaro quickly went to her car, not minding Gatchalian, Fernandez, Estrada, Rodriguez, and Filart who sat
on the car or milled on the sidewalk. She did not speak to them, even to Estrada, her boyfriend. She
entered her car and turned on the engine but she testified that she did not know where to go. This
woman who a few minutes back led Webb, Lejano, and Ventura into the house, knowing that they were
decided to rape and harm Carmela, was suddenly too shocked to know where to go! This emotional
pendulum swing indicates a witness who was confused with her own lies.

4. The supposed corroborations

Intending to provide corroboration to Alfaro’s testimony, the prosecution presented six additional
witnesses:

Dr. Prospero A. Cabanayan, the NBI Medico-Legal Officer who autopsied the bodies of the victims,
testified on the stab wounds they sustained14 and the presence of semen in Carmela’s genitalia,15
indicating that she had been raped.

Normal E. White, Jr., was the security guard on duty at Pitong Daan Subdivision from 7 p.m. of June 29 to
7 a.m. of June 30, 1991. He got a report on the morning of June 30 that something untoward happened
at the Vizconde residence. He went there and saw the dead bodies in the master’s bedroom, the bag on
the dining table, as well as the loud noise emanating from a television set.16

White claimed that he noticed Gatchalian and his companions, none of whom he could identify, go in
and out of Pitong Daan Subdivision. He also saw them along Vinzons Street. Later, they entered Pitong
Daan Subdivision in a three-car convoy. White could not, however, describe the kind of vehicles they
used or recall the time when he saw the group in those two instances. And he did not notice anything
suspicious about their coming and going.

But White’s testimony cannot be relied on. His initial claim turned out to be inaccurate. He actually saw
Gatchalian and his group enter the Pitong Daan Subdivision only once. They were not going in and out.
Furthermore, Alfaro testified that when the convoy of cars went back the second time in the direction of
Carmela’s house, she alone entered the subdivision and passed the guardhouse without stopping. Yet,
White who supposedly manned that guardhouse did not notice her.

Surprisingly, White failed to note Biong, a police officer, entering or exiting the subdivision on the early
morning of June 30 when he supposedly "cleaned up" Vizconde residence on Webb’s orders. What is
more, White did not notice Carmela arrive with her mom before Alfaro’s first visit that night. Carmela
supposedly left with a male companion in her car at around 10:30 p.m. but White did not notice it. He
also did not notice Carmela reenter the subdivision. White actually discredited Alfaro’s testimony about
the movements of the persons involved.

Further, while Alfaro testified that it was the Mazda pick-up driven by Filart that led the three-vehicle
convoy,17 White claimed it was the Nissan Patrol with Gatchalian on it that led the convoy since he
would not have let the convoy in without ascertaining that Gatchalian, a resident, was in it. Security
guard White did not, therefore, provide corroboration to Alfaro’s testimony.1avvphi1
Justo Cabanacan, the security supervisor at Pitong Daan Subdivision testified that he saw Webb around
the last week of May or the first week of June 1991 to prove his presence in the Philippines when he
claimed to be in the United States. He was manning the guard house at the entrance of the subdivision
of Pitong Daan when he flagged down a car driven by Webb. Webb said that he would see Lilet Sy.
Cabanacan asked him for an ID but he pointed to his United BF Homes sticker and said that he resided
there. Cabanacan replied, however, that Pitong Daan had a local sticker.

Cabanacan testified that, at this point, Webb introduced himself as the son of Congressman Webb. Still,
the supervisor insisted on seeing his ID. Webb grudgingly gave it and after seeing the picture and the
name on it, Cabanacan returned the same and allowed Webb to pass without being logged in as their
Standard Operating Procedure required.18

But Cabanacan's testimony could not be relied on. Although it was not common for a security guard to
challenge a Congressman’s son with such vehemence, Cabanacan did not log the incident on the
guardhouse book. Nor did he, contrary to prescribed procedure, record the visitor’s entry into the
subdivision. It did not make sense that Cabanacan was strict in the matter of seeing Webb’s ID but not in
recording the visit.

Mila Gaviola used to work as laundry woman for the Webbs at their house at BF Homes Executive
Village. She testified that she saw Webb at his parents’ house on the morning of June 30, 1991 when she
got the dirty clothes from the room that he and two brothers occupied at about 4.a.m. She saw him
again pacing the floor at 9 a.m. At about 1 p.m., Webb left the house in t-shirt and shorts, passing
through a secret door near the maid’s quarters on the way out. Finally, she saw Webb at 4 p.m. of the
same day.19

On cross-examination, however, Gaviola could not say what distinguished June 30, 1991 from the other
days she was on service at the Webb household as to enable her to distinctly remember, four years later,
what one of the Webb boys did and at what time. She could not remember any of the details that
happened in the household on the other days. She proved to have a selective photographic memory and
this only damaged her testimony.

Gaviola tried to corroborate Alfaro’'s testimony by claiming that on June 30, 1991 she noticed
bloodstains on Webb's t-shirt.20 She did not call the attention of anybody in the household about it
when it would have been a point of concern that Webb may have been hurt, hence the blood.

Besides, Victoria Ventoso, the Webbs' housemaid from March 1989 to May 1992, and Sgt. Miguel
Muñoz, the Webbs' security aide in 1991, testified that Gaviola worked for the Webbs only from January
1991 to April 1991. Ventoso further testified that it was not Gaviola's duty to collect the clothes from the
2nd floor bedrooms, this being the work of the housemaid charged with cleaning the rooms.

What is more, it was most unlikely for a laundrywoman who had been there for only four months to
collect, as she claimed, the laundry from the rooms of her employers and their grown up children at four
in the morning while they were asleep.

And it did not make sense, if Alfaro’s testimony were to be believed that Webb, who was so careful and
clever that he called Biong to go to the Vizconde residence at 2 a.m. to clean up the evidence against him
and his group, would bring his bloodied shirt home and put it in the hamper for laundrywoman Gaviola
to collect and wash at 4 a.m. as was her supposed habit.
Lolita De Birrer was accused Biong’s girlfriend around the time the Vizconde massacre took place. Birrer
testified that she was with Biong playing mahjong from the evening of June 29, 1991 to the early
morning of June 30, when Biong got a call at around 2 a.m. This prompted him, according to De Birrer, to
leave and go to BF. Someone sitting at the backseat of a taxi picked him up. When Biong returned at 7
a.m. he washed off what looked like dried blood from his fingernails. And he threw away a foul-smelling
handkerchief. She also saw Biong take out a knife with aluminum cover from his drawer and hid it in his
steel cabinet.21

The security guard at Pitong Daan did not notice any police investigator flashing a badge to get into the
village although Biong supposedly came in at the unholy hour of two in the morning. His departure
before 7 a.m. also remained unnoticed by the subdivision guards. Besides, if he had cleaned up the
crime scene shortly after midnight, what was the point of his returning there on the following morning
to dispose of some of the evidence in the presence of other police investigators and on-lookers? In fact,
why would he steal valuable items from the Vizconde residence on his return there hours later if he had
the opportunity to do it earlier?

At most, Birrer’s testimony only established Biong’s theft of certain items from the Vizconde residence
and gross neglect for failing to maintain the sanctity of the crime scene by moving around and altering
the effects of the crime. Birrer’s testimony failed to connect Biong's acts to Webb and the other accused.

Lauro Vizconde testified about how deeply he was affected by the loss of her wife and two daughters.
Carmella spoke to him of a rejected suitor she called "Bagyo," because he was a Parañaque politician’s
son. Unfortunately, Lauro did not appear curious enough to insist on finding out who the rejected fellow
was. Besides, his testimony contradicts that of Alfaro who testified that Carmela and Webb had an on-
going relation. Indeed, if Alfaro were to be believed, Carmela wanted Webb to come to her house
around midnight. She even left the kitchen door open so he could enter the house.

5. The missing corroboration

There is something truly remarkable about this case: the prosecution’s core theory that Carmela and
Webb had been sweethearts, that she had been unfaithful to him, and that it was for this reason that
Webb brought his friends to her house to gang-rape her is totally uncorroborated!

For instance, normally, if Webb, a Congressman’s son, courted the young Carmela, that would be news
among her circle of friends if not around town. But, here, none of her friends or even those who knew
either of them came forward to affirm this. And if Webb hanged around with her, trying to win her
favors, he would surely be seen with her. And this would all the more be so if they had become
sweethearts, a relation that Alfaro tried to project with her testimony.

But, except for Alfaro, the NBI asset, no one among Carmela’s friends or her friends’ friends would testify
ever hearing of such relationship or ever seeing them together in some popular hangouts in Parañaque
or Makati. Alfaro’s claim of a five-hour drama is like an alien page, rudely and unconnectedly inserted
into Webb and Carmela’s life stories or like a piece of jigsaw puzzle trimmed to fit into the shape on the
board but does not belong because it clashes with the surrounding pieces. It has neither antecedent nor
concomitant support in the verifiable facts of their personal histories. It is quite unreal.
What is more, Alfaro testified that she saw Carmela drive out of her house with a male passenger, Mr. X,
whom Alfaro thought the way it looked was also Carmela’s lover. This was the all-important reason Webb
supposedly had for wanting to harm her. Again, none of Carmela’s relatives, friends, or people who knew
her ever testified about the existence of Mr.X in her life. Nobody has come forward to testify having ever
seen him with Carmela. And despite the gruesome news about her death and how Mr. X had played a
role in it, he never presented himself like anyone who had lost a special friend normally would.
Obviously, Mr. X did not exist, a mere ghost of the imagination of Alfaro, the woman who made a living
informing on criminals.

Webb’s U.S. Alibi

Among the accused, Webb presented the strongest alibi.

a. The travel preparations

Webb claims that in 1991 his parents, Senator Freddie Webb and his wife, Elizabeth, sent their son to the
United States (U.S.) to learn the value of independence, hard work, and money.22 Gloria Webb, his aunt,
accompanied him. Rajah Tours booked their flight to San Francisco via United Airlines. Josefina Nolasco
of Rajah Tours confirmed that Webb and his aunt used their plane tickets.

Webb told his friends, including his neighbor, Jennifer Claire Cabrera, and his basketball buddy, Joselito
Orendain Escobar, of his travel plans. He even invited them to his despedida party on March 8, 1991 at
Faces Disco along Makati Ave.23 On March 8,1991, the eve of his departure, he took girlfriend Milagros
Castillo to a dinner at Bunchums at the Makati Cinema Square. His basketball buddy Rafael Jose with
Tina Calma, a blind date arranged by Webb, joined them. They afterwards went to Faces Disco for
Webb's despedida party. Among those present were his friends Paulo Santos and Jay Ortega.24

b. The two immigration checks

The following day, March 9, 1991, Webb left for San Francisco, California, with his Aunt Gloria on board
United Airlines Flight 808.25 Before boarding his plane, Webb passed through the Philippine Immigration
booth at the airport to have his passport cleared and stamped. Immigration Officer, Ferdinand Sampol
checked Webb’s visa, stamped, and initialed his passport, and let him pass through.26 He was listed on
the United Airlines Flight’s Passenger Manifest.27

On arrival at San Francisco, Webb went through the U.S. Immigration where his entry into that country
was recorded. Thus, the U.S. Immigration Naturalization Service, checking with its Non-immigrant
Information System, confirmed Webb's entry into the U.S. on March 9, 1991. Webb presented at the trial
the INS Certification issued by the U.S. Immigration and Naturalization Service,28 the computer-
generated print-out of the US-INS indicating Webb's entry on March 9, 1991,29 and the US-INS
Certification dated August 31, 1995, authenticated by the Philippine Department of Foreign Affairs,
correcting an earlier August 10, 1995 Certification.30

c. Details of U.S. sojourn

In San Francisco, Webb and his aunt Gloria were met by the latter’s daughter, Maria Teresa Keame, who
brought them to Gloria’s house in Daly City, California. During his stay with his aunt, Webb met
Christopher Paul Legaspi Esguerra, Gloria’s grandson. In April 1991, Webb, Christopher, and a certain
Daphne Domingo watched the concert of Deelite Band in San Francisco.31 In the same month, Dorothy
Wheelock and her family invited Webb to Lake Tahoe to return the Webbs’ hospitality when she was in
the Philippines.32

In May 1991, on invitation of another aunt, Susan Brottman, Webb moved to Anaheim Hills, California.33
During his stay there, he occupied himself with playing basketball once or twice a week with Steven
Keeler34 and working at his cousin-in-law’s pest control company.35 Webb presented the company’s
logbook showing the tasks he performed,36 his paycheck,37 his ID, and other employment papers. On
June 14, 1991 he applied for a driver's license38 and wrote three letters to his friend Jennifer Cabrera.39

On June 28, 1991, Webb’s parents visited him at Anaheim and stayed with the Brottmans. On the same
day, his father introduced Honesto Aragon to his son when he came to visit.40 On the following day, June
29, Webb, in the company of his father and Aragon went to Riverside, California, to look for a car. They
bought an MR2 Toyota car.41 Later that day, a visitor at the Brottman’s, Louis Whittacker, saw Webb
looking at the plates of his new car.42 To prove the purchase, Webb presented the Public Records of
California Department of Motor Vehicle43 and a car plate "LEW WEBB."44 In using the car in the U.S.,
Webb even received traffic citations.45

On June 30, 1991 Webb, again accompanied by his father and Aragon,46 bought a bicycle at Orange
Cycle Center.47 The Center issued Webb a receipt dated June 30, 1991.48 On July 4, 1991, Independence
Day, the Webbs, the Brottmans, and the Vaca family had a lakeside picnic.49

Webb stayed with the Brottmans until mid July and rented a place for less than a month. On August 4,
1991 he left for Longwood, Florida, to stay with the spouses Jack and Sonja Rodriguez.50 There, he met
Armando Rodriguez with whom he spent time, playing basketball on weekends, watching movies, and
playing billiards.51 In November 1991, Webb met performing artist Gary Valenciano, a friend of Jack
Rodriguez, who was invited for a dinner at the Rodriguez’s house.52 He left the Rodriguez’s home in
August 1992, returned to Anaheim and stayed with his aunt Imelda Pagaspas. He stayed there until he
left for the Philippines on October 26, 1992.

d. The second immigration checks

As with his trip going to the U.S., Webb also went through both the U.S. and Philippine immigrations on
his return trip. Thus, his departure from the U.S. was confirmed by the same certifications that
confirmed his entry.53 Furthermore, a Diplomatic Note of the U.S. Department of State with enclosed
letter from Acting Director Debora A. Farmer of the Records Operations, Office of Records of the US-INS
stated that the Certification dated August 31, 1995 is a true and accurate statement. And when he
boarded his plane, the Passenger Manifest of Philippine Airlines Flight No. 103,54 certified by Agnes
Tabuena55 confirmed his return trip.

When he arrived in Manila, Webb again went through the Philippine Immigration. In fact, the arrival
stamp and initial on his passport indicated his return to Manila on October 27, 1992. This was
authenticated by Carmelita Alipio, the immigration officer who processed Webb’s reentry.56 Upon his
return, in October 1992, Paolo Santos, Joselito Erondain Escobar, and Rafael Jose once again saw Webb
playing basketball at the BF's Phase III basketball court.

e. Alibi versus positive identification

The trial court and the Court of Appeals are one in rejecting as weak Webb’s alibi. Their reason is
uniform: Webb’s alibi cannot stand against Alfaro’s positive identification of him as the rapist and killer of
Carmela and, apparently, the killer as well of her mother and younger sister. Because of this, to the lower
courts, Webb’s denial and alibi were fabricated.

But not all denials and alibis should be regarded as fabricated. Indeed, if the accused is truly innocent, he
can have no other defense but denial and alibi. So how can such accused penetrate a mind that has been
made cynical by the rule drilled into his head that a defense of alibi is a hangman’s noose in the face of a
witness positively swearing, "I saw him do it."? Most judges believe that such assertion automatically
dooms an alibi which is so easy to fabricate. This quick stereotype thinking, however, is distressing. For
how else can the truth that the accused is really innocent have any chance of prevailing over such a
stone-cast tenet?

There is only one way. A judge must keep an open mind. He must guard against slipping into hasty
conclusion, often arising from a desire to quickly finish the job of deciding a case. A positive declaration
from a witness that he saw the accused commit the crime should not automatically cancel out the
accused’s claim that he did not do it. A lying witness can make as positive an identification as a truthful
witness can. The lying witness can also say as forthrightly and unequivocally, "He did it!" without blinking
an eye.

Rather, to be acceptable, the positive identification must meet at least two criteria:

First, the positive identification of the offender must come from a credible witness. She is credible who
can be trusted to tell the truth, usually based on past experiences with her. Her word has, to one who
knows her, its weight in gold.

And second, the witness’ story of what she personally saw must be believable, not inherently contrived.
A witness who testifies about something she never saw runs into inconsistencies and makes bewildering
claims.

Here, as already fully discussed above, Alfaro and her testimony fail to meet the above criteria.

She did not show up at the NBI as a spontaneous witness bothered by her conscience. She had been
hanging around that agency for sometime as a stool pigeon, one paid for mixing up with criminals and
squealing on them. Police assets are often criminals themselves. She was the prosecution’s worst
possible choice for a witness. Indeed, her superior testified that she volunteered to play the role of a
witness in the Vizconde killings when she could not produce a man she promised to the NBI.

And, although her testimony included details, Alfaro had prior access to the details that the investigators
knew of the case. She took advantage of her familiarity with these details to include in her testimony the
clearly incompatible act of Webb hurling a stone at the front door glass frames even when they were
trying to slip away quietly—just so she can accommodate this crime scene feature. She also had Ventura
rummaging a bag on the dining table for a front door key that nobody needed just to explain the physical
evidence of that bag and its scattered contents. And she had Ventura climbing the car’s hood, risking
being seen in such an awkward position, when they did not need to darken the garage to force open the
front door—just so to explain the darkened light and foot prints on the car hood.
Further, her testimony was inherently incredible. Her story that Gatchalian, Fernandez, Estrada,
Rodriguez, and Filart agreed to take their turns raping Carmela is incongruent with their indifference,
exemplified by remaining outside the house, milling under a street light, visible to neighbors and
passersby, and showing no interest in the developments inside the house, like if it was their turn to rape
Carmela. Alfaro’s story that she agreed to serve as Webb’s messenger to Carmela, using up her gas, and
staying with him till the bizarre end when they were practically strangers, also taxes incredulity.

To provide basis for Webb’s outrage, Alfaro said that she followed Carmela to the main road to watch her
let off a lover on Aguirre Avenue. And, inexplicably, although Alfaro had only played the role of
messenger, she claimed leading Webb, Lejano, and Ventura into the house to gang-rape Carmella, as if
Alfaro was establishing a reason for later on testifying on personal knowledge. Her swing from an
emotion of fear when a woman woke up to their presence in the house and of absolute courage when
she nonetheless returned to become the lone witness to a grim scene is also quite inexplicable.

Ultimately, Alfaro’s quality as a witness and her inconsistent, if not inherently unbelievable, testimony
cannot be the positive identification that jurisprudence acknowledges as sufficient to jettison a denial
and an alibi.

f. A documented alibi

To establish alibi, the accused must prove by positive, clear, and satisfactory evidence57 that (a) he was
present at another place at the time of the perpetration of the crime, and (b) that it was physically
impossible for him to be at the scene of the crime.58

The courts below held that, despite his evidence, Webb was actually in Parañaque when the Vizconde
killings took place; he was not in the U.S. from March 9, 1991 to October 27, 1992; and if he did leave on
March 9, 1991, he actually returned before June 29, 1991, committed the crime, erased the fact of his
return to the Philippines from the records of the U.S. and Philippine Immigrations, smuggled himself out
of the Philippines and into the U.S., and returned the normal way on October 27, 1992. But this ruling
practically makes the death of Webb and his passage into the next life the only acceptable alibi in the
Philippines. Courts must abandon this unjust and inhuman paradigm.

If one is cynical about the Philippine system, he could probably claim that Webb, with his father’s
connections, can arrange for the local immigration to put a March 9, 1991 departure stamp on his
passport and an October 27, 1992 arrival stamp on the same. But this is pure speculation since there had
been no indication that such arrangement was made. Besides, how could Webb fix a foreign airlines’
passenger manifest, officially filed in the Philippines and at the airport in the U.S. that had his name on
them? How could Webb fix with the U.S. Immigration’s record system those two dates in its record of his
travels as well as the dates when he supposedly departed in secret from the U.S. to commit the crime in
the Philippines and then return there? No one has come up with a logical and plausible answer to these
questions.

The Court of Appeals rejected the evidence of Webb’s passport since he did not leave the original to be
attached to the record. But, while the best evidence of a document is the original, this means that the
same is exhibited in court for the adverse party to examine and for the judge to see. As Court of Appeals
Justice Tagle said in his dissent,59 the practice when a party does not want to leave an important
document with the trial court is to have a photocopy of it marked as exhibit and stipulated among the
parties as a faithful reproduction of the original. Stipulations in the course of trial are binding on the
parties and on the court.

The U.S. Immigration certification and the computer print-out of Webb’s arrival in and departure from
that country were authenticated by no less than the Office of the U.S. Attorney General and the State
Department. Still the Court of Appeals refused to accept these documents for the reason that Webb
failed to present in court the immigration official who prepared the same. But this was unnecessary.
Webb’s passport is a document issued by the Philippine government, which under international practice,
is the official record of travels of the citizen to whom it is issued. The entries in that passport are
presumed true.60

The U.S. Immigration certification and computer print-out, the official certifications of which have been
authenticated by the Philippine Department of Foreign Affairs, merely validated the arrival and
departure stamps of the U.S. Immigration office on Webb’s passport. They have the same evidentiary
value. The officers who issued these certifications need not be presented in court to testify on them.
Their trustworthiness arises from the sense of official duty and the penalty attached to a breached duty,
in the routine and disinterested origin of such statement and in the publicity of the record.61

The Court of Appeals of course makes capital of the fact that an earlier certification from the U.S.
Immigration office said that it had no record of Webb entering the U.S. But that erroneous first
certification was amply explained by the U.S. Government and Court of Appeals Justice Tagle stated it in
his dissenting opinion, thus:

While it is true that an earlier Certification was issued by the U.S. INS on August 16, 1995 finding "no
evidence of lawful admission of Webb," this was already clarified and deemed erroneous by no less than
the US INS Officials. As explained by witness Leo Herrera-Lim, Consul and Second Secretary of the
Philippine Embassy in Washington D.C., said Certification did not pass through proper diplomatic
channels and was obtained in violation of the rules on protocol and standard procedure governing such
request.

The initial request was merely initiated by BID Commissioner Verceles who directly communicated with
the Philippine Consulate in San Francisco, USA, bypassing the Secretary of Foreign Affairs which is the
proper protocol procedure. Mr. Steven Bucher, the acting Chief of the Records Services Board of US-INS
Washington D.C. in his letter addressed to Philip Antweiler, Philippine Desk Officer, State Department,
declared the earlier Certification as incorrect and erroneous as it was "not exhaustive and did not reflect
all available information." Also, Richard L. Huff, Co-Director of the Office of Information and privacy, US
Department of Justice, in response to the appeal raised by Consul General Teresita V. Marzan, explained
that "the INS normally does not maintain records on individuals who are entering the country as visitors
rather than as immigrants: and that a notation concerning the entry of a visitor may be made at the
Nonimmigrant Information system. Since appellant Webb entered the U.S. on a mere tourist visa,
obviously, the initial search could not have produced the desired result inasmuch as the data base that
was looked into contained entries of the names of IMMIGRANTS and not that of NON-IMMIGRANT
visitors of the U.S..62

The trial court and the Court of Appeals expressed marked cynicism over the accuracy of travel
documents like the passport as well as the domestic and foreign records of departures and arrivals from
airports. They claim that it would not have been impossible for Webb to secretly return to the
Philippines after he supposedly left it on March 9, 1991, commit the crime, go back to the U.S., and
openly return to the Philippines again on October 26, 1992. Travel between the U.S. and the Philippines,
said the lower courts took only about twelve to fourteen hours.

If the Court were to subscribe to this extremely skeptical view, it might as well tear the rules of evidence
out of the law books and regard suspicions, surmises, or speculations as reasons for impeaching
evidence. It is not that official records, which carry the presumption of truth of what they state, are
immune to attack. They are not. That presumption can be overcome by evidence. Here, however, the
prosecution did not bother to present evidence to impeach the entries in Webb’s passport and the
certifications of the Philippine and U.S.’ immigration services regarding his travel to the U.S. and back.
The prosecution’s rebuttal evidence is the fear of the unknown that it planted in the lower court’s minds.

7. Effect of Webb’s alibi to others

Webb’s documented alibi altogether impeaches Alfaro's testimony, not only with respect to him, but also
with respect to Lejano, Estrada, Fernandez, Gatchalian, Rodriguez, and Biong. For, if the Court accepts
the proposition that Webb was in the U.S. when the crime took place, Alfaro’s testimony will not hold
together. Webb’s participation is the anchor of Alfaro’s story. Without it, the evidence against the others
must necessarily fall.

CONCLUSION

In our criminal justice system, what is important is, not whether the court entertains doubts about the
innocence of the accused since an open mind is willing to explore all possibilities, but whether it
entertains a reasonable, lingering doubt as to his guilt. For, it would be a serious mistake to send an
innocent man to jail where such kind of doubt hangs on to one’s inner being, like a piece of meat lodged
immovable between teeth.

Will the Court send the accused to spend the rest of their lives in prison on the testimony of an NBI asset
who proposed to her handlers that she take the role of the witness to the Vizconde massacre that she
could not produce?

WHEREFORE, the Court REVERSES and SETS ASIDE the Decision dated December 15, 2005 and Resolution
dated January 26, 2007 of the Court of Appeals in CA-G.R. CR-H.C. 00336 and ACQUITS accused-
appellants Hubert Jeffrey P. Webb, Antonio Lejano, Michael A. Gatchalian, Hospicio Fernandez, Miguel
Rodriguez, Peter Estrada and Gerardo Biong of the crimes of which they were charged for failure of the
prosecution to prove their guilt beyond reasonable doubt. They are ordered immediately RELEASED from
detention unless they are confined for another lawful cause.

Let a copy of this Decision be furnished the Director, Bureau of Corrections, Muntinlupa City for
immediate implementation. The Director of the Bureau of Corrections is DIRECTED to report the action
he has taken to this Court within five days from receipt of this Decision.

SO ORDERED

RULE 25
G.R. No. 214054, August 05, 2015
NG MENG TAM, Petitioner, v. CHINA BANKING CORPORATION, Respondent.

DECISION

Before this Court is a direct recourse from the Regional Trial Court (RTC) via petition1 for review on the
question of whether Section 52 of the Judicial Affidavit Rule (JAR) applies to hostile or adverse witnesses.
The petition seeks to annul and set aside the May 28, 20143 and August 27, 20144 Orders of the RTC,
Branch 139, Makati City in Civil Case No. 08-1028.

This case stemmed from a collection suit filed by China Banking Corporation (China Bank) against Ever
Electrical Manufacturing Company Inc. (Ever), the heirs of Go Tong, Vicente Go, George Go and
petitioner Ng Meng Tam sometime in December 2008.China Bank alleged that it granted Ever a loan
amounting to P5,532,331.63. The loan was allegedly backed by two surety agreements executed by
Vicente, George and petitioner in its favor, each for P5,000,000.00, and dated December 9, 1993 and
May 3, 1995, respectively. When Ever defaulted in its payment, China Bank sent demand letters
collectively addressed to George, Vicente and petitioner.The demands were unanswered. China Bank
filed the complaint for collection docketed as Civil Case No. 08-1028, which was raffled off to RTC Branch
62, Makati City.

In his Answer, petitioner alleged that the surety agreements were null and void since these were
executed before the loan was granted in 2004. Petitioner posited that the surety agreements were
contracts of adhesion to be construed against the entity which drafted the same. Petitioner also alleged
that he did not receive any demand letter.

In the course of the proceedings, petitioner moved that his affirmative defenses be heard by the RTC on
the ground that the suit is barred by the statute of limitations and laches.5 The motion was denied by
the court.6 On appeal, the Court of Appeals (CA) in its December 22, 2010 Decision7 ruled that a
preliminary hearing was proper pursuant to Section 6,8 Rule 16 of the Rules of Court due to the grounds
cited by petitioner. There being no appeal, the decision became final and executory on August 28, 2011.

On March 15, 2011, petitioner served interrogatories to parties10 pursuant to Sections 111 and 6,12
Rule 25 of the Rules of Court to China Bank and required Mr. George C. Yap, Account Officer of the
Account Management Group, to answer.

On June 22, 2011, George Yap executed his answers to interrogatories to parties.
In the meantime, having failed mediation and judicial dispute resolution, Civil Case No. 08-1028 was re-
raffled off to RTC Branch 139, Makati City.

Petitioner again moved for the hearing of his affirmative defenses.Because he found Yaps answers to the
interrogatories to parties evasive and not responsive, petitioner applied for the issuance of a subpoena
duces tecum and ad testificandum against George Yap pursuant to Section 6,14 Rule 25 of the Revised
Rules of Court.

On April 29, 2014, when the case was called for the presentation of George Yap as a witness, China Bank
objected citing Section 5 of the JAR. China Bank said that Yap cannot be compelled to testify in court
because petitioner did not obtain and present George Yaps judicial affidavit. The RTC required the parties
to submit their motions on the issue of whether the preparation of a judicial affidavit by George Yap as
an adverse or hostile witness is an exception to the judicial affidavit rule.

Petitioner contended that Section 5 does not apply to Yap because it specifically excludes adverse party
witnesses and hostile witnesses from its application. Petitioner insists that Yap needed to be called to
the stand so that he may be qualified as a hostile witness pursuant to the Rules of Court.

China Bank, on the other hand, stated that petitioners characterization of Yaps answers to the
interrogatories to parties as ambiguous and evasive is a declaration of what type of witness Yap is. It
theorizes that the interrogatories to parties answered by Yap serve as the judicial affidavit and there is
no need for Yap to be qualified as a hostile witness.

In its May 28, 2014 Order, the RTC denied for lack of merit petitioners motion to examine Yap without
executing a judicial affidavit. The RTC in interpreting Section 5 of the JAR stated:

x x x The aforementioned provision, which allows the requesting party to avail himself of the provisions
of Rule 21 of the Rules of Court finds applicability to: (a) a government employee or official, or the
requested witness, who is neither the witness of the adverse party nor a hostile witness and (b) who
unjustifiably declines to execute a judicial affidavit or refuses without just cause to make the relevant
books, documents, or other things under his control available for copying, authentication, and eventual
production in court.

In the case at bar, witness George Yap is being utilized as an adverse witness for the
[petitioner].Moreover, there was no showing that he unjustifiably declines to execute a judicial affidavit.
In fact, it was [China Bank]s counsel who insisted that said witness judicial affidavit be taken. Thus,
Section 5 of the [JAR] which [petitioner] invoked to exempt him from the Rule finds no application.Unless
there is contrary ruling on the matter by the Supreme Court, this court has no choice but to implement
the rule as written.

On this note, this Court also finds no merit on the contention of [China Bank] that the answer to the
written interrogatories by witness George Yap already constitutes his judicial affidavit. Inasmuch as the
Court strictly implemented the [JAR] on the part of [petitioner], so shall it rule in the same manner on
the part of [China Bank]. As correctly pointed out by [petitioner], the said answer to interrogatories does
not comply with Section 3 of the [JAR] which provides for the contents of the judicial affidavit.16

In essence, the RTC ruled that Section 5 did not apply to Yap since he was an adverse witness and he did
not unjustifiably decline to execute a judicial affidavit.

In view of the foregoing, the motion of the [petitioner] that witness George Yap be examined without
executing a Judicial Affidavit is hereby DENIED FOR LACK OF MERIT.17

Petitioner moved for reconsideration but it was denied by the RTC in its August 27, 2014 Order.18. The
RTC reiterated its position and stated:

It must be pointed out that the [petitioner] [was] the [one] who invoked the provisions of Section 5 of
the [JAR] to compel the attendance of witness George Yap and as such, it is their duty to show the
applicability of the said provisions to the case at bar.As stated in the challenged Order, Section 5 of the
[JAR] finds applicability to: (a) a government employee or official, or the requested witness, who is
neither the witness of the adverse party nor a hostile witness and (b) who unjustifiably declines to
execute a judicial affidavit or refuses without just cause to make the relevant books, documents, or other
things under his control available for copying, authentication, and eventual production in court.In the
case at bar, [petitioner] [does] not deny that witness George Yap is to be utilized as [his] adverse
witness.On this score alone, it is clear that the provisions invoked do not apply.19

The RTC stressed that Section 5 of the JAR required the requested witness refusal to be unjustifiable. It
stated:

x x x the [JAR] requires that the refusal must be unjustifiable and without just cause. It must be pointed
out that [China Bank]s previous motions to quash the subpoena was grounded on the claim that having
already submitted to this court his sworn written interrogatories, his being compelled to testify would be
unreasonable, oppressive and pure harassment. Thus, witness refusal to testify cannot be considered
unjustifiable since he raised valid grounds.20

Hence, this petition.

Petitioner contends that the RTC committed a grave error when it interpreted Section 5 to include
adverse party and hostile witnesses. Based on the wording of Section 5, adverse party and hostile
witnesses are clearly excluded.

China Bank asserts that Yap neither refused unjustifiably nor without just cause refused to a judicial
affidavit. It cited the RTCs August 27, 2014 Order where the court said that Yap had answered the
interrogatories and to compel him to testify in open court would be unreasonable, oppressive and pure
harassment. Moreover, it stated that based on the language used by Section 2 of the JAR the filing of
judicial affidavits is mandatory.

The petition is anchored on the following arguments:

RTC BR. 139-MAKATI COMMITTED AN ERROR OF LAW WHEN IT INTERPRETED SEC. 5 OF THE [JAR]
CONTRARY TO ITS WORDINGS.

II

RTC BR. 139-MAKATI COMMITTED AN ERROR OF LAW WHEN IT INTERPRETED SEC. 5 [OF THE JAR]
CONTRARY TO ITS PRACTICAL INTENTION AND COMMON SENSE.

III

RTC BR. 139-MAKATI COMMITTED AN ERROR OF LAW WHEN IT EFFECTIVELY DISREGARDED THE
RELEVANT RULES ON MODE OF DISCOVERY WHICH GOVERN THE PRESENTATION OF ADVERSE
WITNESSES.

IV
ON A POLICY LEVEL AND IN THE EVENT RTC BR. 139-MAKATIS INTERPRETATION AND APPLICATION OF
SEC. 5 OF THE [JAR] IS CORRECT (I.E., THAT OPPOSING PARTY WHO INTENDS TO PRESENT ADVERSE OR
HOSTILE WITNESS MUST GET AND SUBMIT THAT WITNESS JUDICIAL AFFIDAVIT NO MATTER WHAT) IT IS
HUMBLY SUBMITTED, WITH THE UTMOST INDULGENCE OF THE HONORABLE SUPREME COURT, THAT
THE SAME RULE BE IMPROVED OR AMENDED BY PROVIDING SANCTIONS IN THE EVENT THE ADVERSE OR
HOSTILE WITNESS REFUSES TO ANSWER OR EXECUTE JUDICIAL AFFIDAVIT AS REQUIRED BY THE
OPPOSING PARTY.21

We grant the petition.

THE JUDICIAL AFFIDAVIT RULE

APPLIES TO PENDING CASES

On September 4, 2012, the JAR was promulgated to address case congestion and delays in courts. To this
end, it seeks to reduce the time needed to take witnesses testimonies.22 The JAR took effect on January
1, 2013 and would also apply to pending cases pursuant to Section 12 to wit:

Sec. 12. Effectivity. This rule shall take effect on January 1, 2013 following its publication in two
newspapers of general circulation not later than September 15, 2012. It shall also apply to existing cases.
(Emphasis supplied)

The Court En Banc gave public prosecutors in first and second level courts one year of modified
compliance.23 The JAR thus took full effect on January 1, 2014.

Here, parties were presenting their evidence for the RTCs consideration when the JAR took
effect.Therefore, pursuant to Section 12 the JAR applies to the present collection suit.

SECTION 5 OF THE JAR DOES NOT

APPLY TO ADVERSE PARTY WITNESSES

The JAR primarily affects the manner by which evidence is presented in court. Section 2(a) of the JAR
provides that judicial affidavits are mandatorily filed by parties to a case except in small claims cases.
These judicial affidavits take the place of direct testimony in court.

Sec. 2. Submission of Judicial Affidavits and Exhibits in lieu of direct testimonies. (a) The parties shall file
with the court and serve on the adverse party, personally or by licensed courier service, not later than
five days before pre-trial or preliminary conference or the scheduled hearing with respect to motions
and incidents, the following:

(1) The judicial affidavits of their witnesses, which shall take the place of such witnesses direct
testimonies; and

(2) The parties documentary or object evidence, if any, which shall be attached to the judicial affidavits
and marked as Exhibits A, B, C, and so on in the case of the complainant or the plaintiff, and as Exhibits 1,
2, 3, and so on in the case of the respondent or the defendant.

xxxx
Section 324 of the JAR enumerates the content of a judicial affidavit.

Under Section 10,25 parties are to be penalized if they do not conform to the provisions of the JAR.
Parties are however allowed to resort to the application of a subpoena pursuant to Rule 21 of the Rules
of Court in Section 5 of the JAR in certain situations. Section 5 provides:

Sec. 5. Subpoena. If the government employee or official, or the requested witness, who is neither the
witness of the adverse party nor a hostile witness, unjustifiably declines to execute a judicial affidavit or
refuses without just cause to make the relevant books, documents, or other things under his control
available for copying, authentication, and eventual production in court, the requesting party may avail
himself of the issuance of a subpoena ad testificandum or duces tecum under Rule 21 of the Rules of
Court. The rules governing the issuance of a subpoena to the witness in this case shall be the same as
when taking his deposition except that the taking of a judicial affidavit shal1 be understood to be ex
parte.

While we agree with the RTC that Section 5 has no application to Yap as he was presented as a hostile
witness we cannot agree that there is need for a finding that witness unjustifiably refused to execute a
judicial affidavit.

Section 5 of the JAR contemplates a situation where there is a (a) government employee or official or (b)
requested witness who is not the (1) adverse partys witness nor (2) a hostile witness.If this person either
(a) unjustifiably declines to execute a judicial affidavit or (b) refuses without just cause to make the
relevant documents available to the other party and its presentation to court, Section 5 allows the
requesting party to avail of issuance of subpoena ad testificandum or duces tecum under Rule 21 of the
Rules of Court. Thus, adverse party witnesses and hostile witnesses being excluded they are not covered
by Section 5. Expressio unius est exclusion alterius: the express mention of one person, thing, or
consequence implies the exclusion of all others.
Here, Yap is a requested witness who is the adverse partys witness. Regardless of whether he
unjustifiably declines to execute a judicial affidavit or refuses without just cause to present the
documents, Section 5 cannot be made to apply to him for the reason that he is included in a group of
individuals expressly exempt from the provisions application.

The situation created before us begs the question: if the requested witness is the adverse partys witness
or a hostile witness, what procedure should be followed?

The JAR being silent on this point, we turn to the provisions governing the rules on evidence covering
hostile witnesses specially Section 12, Rule 132 of the Rules of Court which provides:

SEC. 12. Party may not impeach his own witness. Except with respect to witnesses referred to in
paragraphs (d) and (e) of Section 10, the party producing a witness is not allowed to impeach his
credibility.

A witness may be considered as unwilling or hostile only if so declared by the court upon adequate
showing of his adverse interest, unjustified reluctance to testify, or his having misled the party into
calling him to the witness stand.

The unwilling or hostile witness so declared, or the witness who is an adverse party, may be impeached
by the party presenting him in all respects as if he had been called by the adverse party, except by
evidence of his bad character. He may also be impeached and cross-examined by the adverse party, but
such cross-examination must only be on the subject matter of his examination-in-chief.

Before a party may be qualified under Section 12, Rule 132 of the Rules of Court, the party presenting
the adverse party witness must comply with Section 6, Rule 25 of the Rules of Court which provides:
SEC. 6. Effect of failure to serve written interrogatories. Unless thereafter allowed by the court for good
cause shown and to prevent a failure of justice, a party not served with written interrogatories may not
be compelled by the adverse party to give testimony in open court, or to give a deposition pending
appeal.

In Afulugencia v. Metropolitan Bank & Trust Co.,27 this Court stated that in civil cases, the procedure of
calling the adverse party to the witness stand is not allowed, unless written interrogatories are first
served upon the latter.There petitioners Spouses Afulugencia sought the issuance of a subpoena duces
tecum and ad testificandum to compel the officers of the bank to testify and bring documents pertaining
to the extrajudicial foreclosure and sale of a certain parcel of land. Metrobank moved to quash the
issuance of the subpoenas on the ground of non-compliance with Section 6, Rule 25 of the Rules of
Court. In quashing the issuance of the subpoena, the Court reminded litigants that the depositions are a
mechanism by which fishing expeditions and delays may be avoided. Further written interrogatories aid
the court in limiting harassment and to focus on what is essential to a case. The Court stated:

One of the purposes of the above rule is to prevent fishing expeditions and needless delays; it is there to
maintain order and facilitate the conduct of trial.It will be presumed that a party who does not serve
written interrogatories on the adverse party beforehand will most likely be unable to elicit facts useful to
its case if it later opts to call the adverse party to the witness stand as its witness. Instead, the process
could be treated as a fishing expedition or an attempt at delaying the proceedings; it produces no
significant result that a prior written interrogatories might bring.

Besides, since the calling party is deemed bound by the adverse partys testimony, compelling the
adverse party to take the witness stand may result in the calling party damaging its own case. Otherwise
stated, if a party cannot elicit facts or information useful to its case through the facility of written
interrogatories or other mode of discovery, then the calling of the adverse party to the witness stand
could only serve to weaken its own case as a result of the calling partys being bound by the adverse
partys testimony, which may only be worthless and instead detrimental to the calling partys cause.

Another reason for the rule is that by requiring prior written interrogatories, the court may limit the
inquiry to what is relevant, and thus prevent the calling party from straying or harassing the adverse
party when it takes the latter to the stand.

Thus, the rule not only protects the adverse party from unwarranted surprises or harassment; it likewise
prevents the calling party from conducting a fishing expedition or bungling its own case. Using its own
judgment and discretion, the court can hold its own in resolving a dispute, and need not bear witness to
the parties perpetrating unfair court practices such as fishing for evidence, badgering, or altogether
ruining their own cases. Ultimately, such unnecessary processes can only constitute a waste of the courts
precious time, if not pointless entertainment.29 (Citation omitted)

In this case, parties, with the approval of the Court, furnished and answered interrogatories to parties
pursuant to Rule 25 of the Rules of Court. They therefore complied with Section 6 of Rule 25 of the Rules
of Court. Before the present controversy arose, the RTC had already issued subpoenas for Yap to testify
and produce documents. He was called to the witness stand when China Bank interposed its objection
for non-compliance with Section 5 of the JAR. Having established that Yap, as an adverse party witness, is
not within Section 5 of the JARs scope, the rules in presentation of adverse party witnesses as provided
for under the Rules of Court shall apply.In keeping with this Courts decision in Afulugencia, there is no
reason for the RTC not to proceed with the presentation of Yap as a witness.

In sum, Section 5 of the JAR expressly excludes from its application adverse party and hostile
witnesses.For the presentation of these types of witnesses, the provisions on the Rules of Court under
the Revised Rules of Evidence and all other correlative rules including the modes of deposition and
discovery rules shall apply.

WHEREFORE, the petition is GRANTED. The May 28, 2014 and August 27, 2014 Orders of the Regional
Trial Court, Branch 139, Makati City are hereby ANNULLED and SET ASIDE.

No pronouncement as to costs.

SO ORDERED.

RULE 26
SPOUSES VILLUGA V. KELLY HARDWARE

RULE 27
EAGLERIDGE DEVELOPMENT CORPORATION, MARCELO N. NAVAL and CRISPIN I. OBEN, Petitioners,
vs.
CAMERON GRANVILLE 3 ASSET MANAGEMENT, INC., Respondent.
G.R. No. 204700 November 24, 2014

RESOLUTION

For resolution is respondent Cameron Granville 3 Asset Management, Inc. 's motion for reconsideration1
of our April 10, 2013 decision,2 which reversed and set aside the Court of Appeals' resolutions3 and
ordered respondent to produce the Loan Sale and Purchase Agreement (LSPA) dated April 7, 2006,
including its annexes and/or attachments, if any, in order that petitioners may inspect or photocopy the
same.

Petitioners Eagleridge Development Corporation, Marcelo N. Naval, and Crispin I. Oben filed on June 7,
2013 their motion to ad.mit attached opposition.4 Subsequently, respondent filed its reply5 and
petitioners their motion to admit attached rejoinder.6

The motion for reconsideration raises the following points:

(1) The motion for production was filed out of time;7

(2) The production of the LSPA would violate the parol evidence rule; and8

(3) The LSPA is a privileged and confidential document.9

Respondent asserts that there was no "insistent refusal" on its part to present the LSPA, but that
petitioners filed their motion for production way out of time, even beyond the protracted pre-trial
period from September 2005 to 2011.10 Hence, petitioners had no oneto blame but themselves when
the trial court denied their motion as it was filed only during the trial proper.11

Respondent further submits that "Article 1634 [of the] Civil Code had been inappropriately cited by
[p]etitioners"12 inasmuch as it is Republic Act No. 9182 (Special Purpose Vehicle Act) that is
applicable.13 Nonetheless, even assuming that Article 1634 is applicable, respondent argued that
petitioners are: 1) still liable to pay the whole of petitioner Eagleridge Development Corporation’s (EDC)
loanobligation, i.e., ₱10,232,998.00 exclusive of interests and/or damages;14 and 2) seven (7) years late
in extinguishing petitioner EDC’s loan obligation because pursuant to Article 1634, they should have
exercised their right of extinguishment within 30 days from the substitution of Export and Industry Bank
or EIB (the original creditor) by respondent in December 2006.15 According to respondent, the trial
court order "granting the substitution constituted sufficient judicial demand as contemplated under
Article 1634."16 Also, maintaining that the LSPA is immaterial or irrelevant to the case, respondent
contends that the "[o]rder of substitution settled the issue of [respondent’s] standing before the [c]ourt
and its right to fill in the shoes of [EIB]."17 It argues that the production of the LSPA will neither prevent
respondent from pursuing its claim of 10,232,998.00, exclusive of interests and penalties, from
petitioner EDC, nor write off petitioner EDC’s liability to respondent.18 The primordial issue of whether
petitioners owe respondent a sum of money via the deed of assignment can allegedly "be readily
resolved by application of Civil Code provisions and/or applicable jurisprudence and not by the
production/inspection of the LSPA[.]"19 Respondent also argues that "a consideration is not always a
requisite [in assignment of credits, and] an assignee may maintain an action based on his title and it is
immaterial whether ornot he paid any consideration [therefor][.]"20

Respondent also contends that: (1) the production of the LSPA will violate the parol evidence rule21
under Rule 130, Section 9 of the Rules of Court; (2) the LSPA is a privileged/confidential bank
document;22 and (3) under the Special Purpose Vehicle Act, "the only obligation of both the assignor
(bank) and the assignee (the SPV; respondent Cameron) is to give notice to the debtor (Eagleridge,
Naval,and Oben) that its account has been assigned/transferred to a special purpose vehicle (Sec. 12,
R.A. 9182) [and] [i]t does not require of the special purpose vehicle or the bank to disclose all financial
documents included in the assignment/sale/transfer[.]"23

Finally, respondent points out that the deed of assignment is a contested document. "Fair play would be
violated if the LSPA is produced without [p]etitioners acknowledging that respondent Cameron Granville
3 Asset Management, Inc. is the real party-in-interest because petitioners . . . would [thereafter] use . . .
the contents of a document (LSPA) to its benefit while at the same time"24 refuting the integrity of the
deed and the legal personality of respondent to sue petitioners.25

For their part, petitioners counter that their motion for production was not filed out of time, and
"[t]here is no proscription, under Rule 27 or any provision of the Rules of Court, from filing motions for
production, beyond the pre-trial."26
Further, assuming that there was a valid transfer of the loan obligation of petitioner EDC, Article 1634 is
applicable and, therefore, petitioners must be informed of the actual transfer price, which information
may only be supplied by the LSPA.27 Petitioners argue that the substitution of respondent in the case a
quowas "not sufficient ‘demand’as contemplated under Article 1634 of the Civil Code inasmuch
asrespondent Cameron failed . . . to inform petitioner EDC of the price it paid for the [transfer of the]
loan obligation,"28 which made it "impossible for petitioners to reimburse what was paid for the
acquisition of the . . . loan obligation [of EDC]."29 Additionally, petitioners contend that respondent was
not a party to the deed of assignment, but Cameron Granville Asset Management (SPV-AMC), Inc.,
hence, "as [to] the actual parties to the Deed of Assignment are concerned, no such demand has yet
been made."30

Petitioners add that the amount of their liability to respondent is one of the factual issues to be resolved
as stated in the November 21, 2011 pretrial order of the Regional Trial Court, which makes the LSPA
clearly relevant and material to the disposition of the case.31

Petitioners next argue that the parol evidence rule is not applicable to them because they were not
parties tothe deed of assignment, and "they cannot be prevented from seeking evidence to determine
the complete terms of the Deed of Assignment."32 Besides, the deedof assignment made express
reference to the LSPA, hence,the latter cannot be considered as extrinsic to it.33

As to respondent’s invocation that the LSPA is privileged/confidential, petitioners counter that "it has not
been shown that the parties fall under . . . or, at the very least . . . analogous to [any of the relationships
enumerated in Rule 130, Section 124] that would exempt [respondent] from disclosing information as to
their transaction."34

In reply, respondent argues that "[petitioners] cannot accept and reject the same instrument at the same
time."35 According to respondent, by allegedly "uphold[ing] the truth of the contents as well as the
validity of [the] Deed of Assignment [in] seeking the production of the [LSPA],"36 petitioners could no
longer be allowed to impugn the validity of the same deed.37

In their rejoinder, petitioners clarified that their consistent position was always to assail the validity of
the deed of assignment; that alternatively, they invoked the application of Article 1634 should the court
uphold the validity of the transfer of their alleged loan obligation; and that Rule 8, Section 2 of the Rules
of Court "permits parties to set forth alternative causes of action or defenses."38

We deny the motion for reconsideration.

Discovery mode of
production/inspection of
document may be availed of
even beyond pre-trial upon a
showing of good cause

The availment of a motion for production, as one of the modes of discovery, is not limited to the pre-trial
stage. Rule 27 does not provide for any time frame within which the discovery mode of production or
inspection of documents can be utilized. The rule only requires leave of court "upon due application and
a showing of due cause."39 Rule 27, Section 1 of the 1997 Rules of Court, states:
SECTION 1. Motion for production or inspection order — Upon motion of any party showing good cause
therefor the court in which an action is pending may (a) order any party to produce and permit the
inspection and copying or photographing, by or on behalf of the moving party, of any designated
documents, papers, books, accounts, letters, photographs, objects or tangible things, not privileged,
which constitute or contain evidence material to any matter involved in the action and which are in his
possession, custody or control[.] (Emphasis supplied)

In Producers Bank of the Philippines v. Court of Appeals,40 this court held that since the rules are silent
asto the period within which modes of discovery (in that case, written interrogatories) may still be
requested, it is necessary to determine: (1) the purposeof discovery; (2) whether, based on the stage of
the proceedings and evidence presented thus far, allowing it is proper and would facilitate the
disposition of the case; and (3) whether substantial rights of parties would be unduly prejudiced.41 This
court further held that "[t]he use of discovery is encouraged, for it operates with desirable flexibility
under the discretionary control of the trial court."42

In Dasmariñas Garments, Inc. v. Reyes,43 this court declared that depositions, as a mode ofdiscovery,
"may be taken at any time after the institution of any action [as there is] no prohibition against the
taking of depositions after pre-trial."44 Thus:

Dasmariñas also contends that the "taking of deposition is a mode of pretrial discovery to be availed of
before the action comes to trial." Not so. Depositions may be taken at any time after the institution of
any action, whenever necessary or convenient. There is no rule that limits deposition-taking only to the
period of pre-trial or before it; no prohibition against the taking of depositions after pre-trial. Indeed, the
law authorizes the taking of depositions of witnesses before or after an appeal is taken from the
judgment of a Regional Trial Court "to perpetuate their testimony for use in the event of further
proceedings in the said court" (Rule 134, Rules of Court), and even during the process of execution of a
final and executory judgment (East Asiatic Co. v. C.I.R., 40 SCRA 521, 544).45

"The modes of discovery are accorded a broad and liberal treatment."46 The evident purpose of
discovery procedures is "to enable the parties, consistent with recognized privileges, to obtain the fullest
possible knowledge of the issues and facts before civil trials"47 and, thus, facilitating an amicable
settlement or expediting the trial of the case.48

Technicalities in pleading should be avoided in order to obtain substantial justice. In Mutuc v. Judge
Agloro,49 this court directed the bank to give Mutuc a complete statement asto how his debt was
computed, and should he be dissatisfied with that statement, pursuant to Rule 27 of the Rules of Court,
to allow him to inspect and copy bank records supporting the items in that statement.50 This was held to
be "in consonance with the rules on discovery and the avowed policy of the Rules of Court . . . to require
the parties to lay their cards on the table to facilitate a settlement of the case before the trial."51

We have determined that the LSPA isrelevant and material to the issue on the validity of the deed of
assignment raised by petitioners in the court a quo, and allowing its production and inspection by
petitioners would be more in keeping with the objectives of the discovery rules. We find no great
practical difficulty, and respondent continuously fails to allege any, in presenting the document for
inspection and copying of petitioners. On the other hand, to deny petitioners the opportunity to inquire
into the LSPA would bar their access to relevant evidence and impair their fundamental right to due
process.52
Article 1634 of the New Civil Code is applicable

Contrary to respondent’s stance, Article 1634 of the Civil Code on assignment of credit in litigation is
applicable.

Section 13 of the Special Purpose Vehicle Act clearly provides that in the transfer of the non-performing
loans to a special purpose vehicle, "the provisions on subrogation and assignment of credits under the
New Civil Code shall apply." Thus:

Sec. 13. Nature of Transfer. – All sales or transfers of NPAs to an SPV shall be in the nature of a true sale
after proper notice in accordance with the procedures asprovided for in Section 12: Provided, That GFIs
and GOCCs shall be subject to existing law on the disposition of assets: Provided, further, That in the
transfer of the NPLs, the provisions on subrogation and assignment of credits under the New Civil Code
shall apply.

Furthermore, Section 19 of the Special Purpose Vehicle Act expressly states that redemption periods
allowed to borrowers under the banking law, the Rules of Court, and/or other laws are applicable.
Hence, the right of redemption allowed to a debtor under Article 1634 of the Civil Code is applicable to
the case a quo.

Accordingly, petitioners may extinguish their debt by paying the assignee-special purpose vehicle the
transfer price plus the cost of money up to the time of redemption and the judicial costs.

Petitioners’ right to
extinguish their debt has not
yet lapsed

Petitioners’ right to extinguish their debt under Article 1634 on assignment of credits has not yet lapsed.
The pertinent provision is reproduced here:

Art. 1634. When a credit or other incorporeal right in litigation is sold, the debtor shall have a right to
extinguish it by reimbursing the assignee for the price the latter paid therefor, the judicial costs incurred
by him, and the interest on the price from the day on which the same was paid. A credit or other
incorporeal right shall be considered in litigation from the time the complaint concerning the same is
answered.

The debtor may exercise his right within thirty days from the date the assignee demands payment from
him. (Emphasis supplied)

Under the last paragraph of Article 1634, the debtor may extinguish his or her debt within 30 days from
the date the assignee demands payment. In this case, insofar as the actual parties to the deed of
assignment are concerned, no demand has yet been made, and the 30-day period did not begin to run.
Indeed, petitioners assailed before the trial court the validity of the deed of assignment on the
groundsthat it did not comply with the mandatory requirements of the Special Purpose Vehicle Act,53
and it referred to Cameron Granville Asset Management (SPV-AMC), Inc., as the assignee, and not
respondent Cameron Granville 3 Asset Management, Inc.54 The law requires that payment should be
made only "to the person in whose favor the obligation has been constituted, or his [or her] successor in
interest, or any person authorized to receive it."55 It was held that payment made to a person who is not
the creditor, his or her successor-in-interest, or a person who is authorized to receive payment, even
through error or good faith, is not effective payment which will bind the creditor or release the debtor
from the obligation to pay.56 Therefore, it was important for petitioners to determine for sure the
proper assignee of the EIB credit or who to pay, in order to effectively extinguish their debt.

Moreover, even assuming that respondent is the proper assignee of the EIB credit, petitioners could not
exercise their right of extinguishment because they were not informed of the consideration paid for the
assignment.57

Respondent must, pursuant to Article 1634 of the Civil Code, disclose how much it paid to acquire the
EIB credit, so that petitioners could make the corresponding offer to pay, by way of redemption, the
same amount in final settlement of their obligation.

Respondent insists that the transfer price of the EIB credit is ₱10,232,998.00 (the actual amount and
value of the credit), and that petitioners should have paid the said amount within 30 days from the
December 8, 2006 order of the Regional Trial Court approving its substitution of EIB.58 Petitioners
believe otherwise, and as the deed of assignment was silent on the matter, it becomes necessary to
verify the amount of the consideration from the LSPA.

Assuming indeed that respondent acquired the EIB credit for a lesser consideration, it cannot compel
petitioners to pay or answer for the entire original EIB credit, or more thanwhat it paid for the
assignment.

Under the circumstances of this case, the 30-day period under Article 1634 within which petitioners
could exercise their right to extinguish their debt should begin to run only from the time they were
informed of the actual price paid by the assignee for the transfer of their debt. Parol evidence rule is not
applicable

Claiming further the impropriety of allowing the production of the LSPA, respondent contends that the
presentation of the document and its annexes would violate the parol evidence rule in Rule 130, Section
9:

SEC. 9. Evidence of written agreements.—When the terms of an agreement have been reduced to
writing, it is considered as containing all the terms agreed upon and there can be, between the parties
and their successors in interest, no evidence of such terms other than the contents of the written
agreement.

However, a party may present evidence to modify, explain or add to the terms of the written agreement
ifhe puts in issue in his pleading:

(a) An intrinsic ambiguity, mistake or imperfection in the written agreement;

(b) The failure of the written agreement to express the true intent and agreement of the parties thereto;

(c) The validity of the written agreement; or

(d) The existence of other terms agreed to by the parties or their successors in interest after the
execution of the written agreement.
The term "agreement" includes wills.

We disagree.

The parol evidence rule does notapply to petitioners who are not parties to the deed of assignment and
do not base a claim on it.59 Hence, they cannot be prevented from seeking evidence to determine the
complete terms of the deed of assignment.

Even assuming that Rule 130, Section 9 is applicable, an exception to the rule under the second
paragraph iswhen the party puts in issue the validity of the written agreement, as in the case a quo.

Besides, what is forbidden under the parol evidence rule is the presentation of oral or extrinsic evidence,
not those expressly referred to in the written agreement. "[D]ocuments canbe read together when one
refers to the other."60 By the express terms of the deed of assignment, it is clear that the deed of
assignment was meant to be read in conjunction with the LSPA.

As we have stated in our decision, Rule 132, Section 1761 of the Rules of Court allows a party to inquire
into the whole of the writing or record when a part of it is given in evidence by the other party. Since the
deed of assignment was produced in court by respondent and marked as one of its documentary
exhibits, the LSPA which was made a part thereof by explicit reference and which is necessary for its
understanding may also be inquired into by petitioners.

The LSPA is not privileged

and confidential in nature

Respondent’s contention that the LSPAis privileged and confidential is likewise untenable.

Indeed, Rule 27 contains the proviso that the documents sought to be produced and inspected must not
be privileged against disclosure. Rule 130, Section 24 describes the types of privileged communication.
These are communication between or involving the following: (a) between husband and wife; (b)
between attorney and client; (c) between physician and patient; (d) between priest and penitent; and (e)
public officers and public interest.

Privileged communications under the rules of evidence is premised on an accepted need to protect a
trust relationship. It has not been shown that the parties to the deed of assignment fall under any of the
foregoing categories.

This court has previously cited other privileged matters such as the following: "(a) editors may not be
compelled to disclose the source of published news; (b) voters may not be compelled to disclose for
whom they voted; (c) trade secrets; (d) information contained in tax census returns; . . . (d) bank
deposits"62 (pursuant to the Secrecy of Bank Deposits Act); (e) national security matters and intelligence
information;63 and (f) criminal matters.64 Nonetheless, the LSPA does not fall within any of these
classes of information. Moreover, the privilegeis not absolute, and the court may compel disclosure
where it is indispensable for doing justice.

At any rate, respondent failed to discharge the burden of showing that the LSPA is a privileged
document.1âwphi1 Respondent did not present any law or regulation that considers bank documents
such as the LSPA as classified information. Its contention that the Special Purpose Vehicle Act65 only
requires the creditor-bank to give notice to the debtor of the transfer of his or her account to a special
purpose vehicle, and that the assignee-special purpose vehicle has no obligation to disclose other
financial documents related to the sale, is untenable. The Special Purpose Vehicle Act does not explicitly
declare these financial documents as privileged matters. Further, as discussed, petitioners are not
precluded from inquiring as to the true consideration of the assignment, precisely because the same law
in relation to Article 1634 allows the debtor to extinguish its debt by reimbursing the assignee-special
purpose vehicle of the actual price the latter paid for the assignment.

An assignment of a credit "produce[s] no effect as against third persons, unless it appears ina public
instrument[.]"66 It strains reason why the LSPA, which by law must be a publicinstrument to be binding
against third persons such as petitioners-debtors, is privileged and confidential.

Alternative defenses are

allowed under the Rules

Finally, respondent’s contention that petitioners cannot claim the validity and invalidity of the deed
ofassignment at the same time is untenable.

The invocation by petitioners of Article 1634, which presupposes the validity of the deed of assignment
orthe transfer of the EIB credit to respondent, even if it would run counter to their defense on the
invalidity of the deed of assignment, is proper and sanctioned by Rule 8, Section 2 of the Rules of Court,
which reads:

SEC. 2. Alternative causes of action or defenses. — A party may set forth two or more statements of a
claim or defense alternatively or hypothetically, either in one causeof action or defense or in separate
causes of action or defenses. When two or more statements are made in the alternative and one of
them if made independently would be sufficient, the pleading is not made insufficient by the
insufficiency of one or more of the alternative statements. (Emphasis supplied)

All told, respondent failed to allege sufficient reasons for us to reconsider our decision. Verily, the
production and inspection of the LSPA and its annexes fulfill the discovery-procedures objective of
making the trial "less a game of blind man’s buff and morea fair contest with the basic issues and facts
disclosed to the fullest practicable extent."67

WHEREFORE, the motion for reconsideration is DENIED WITH FINALITY.

SO ORDERED.

RULE 28
CONCEPCION CUENCO VDA. DE MANGUERRA and THE HON. RAMON C. CODILLA, JR., Presiding Judge of
the Regional Trial Court of Cebu City, Branch 19, Petitioners,
- versus -
RAUL RISOS, SUSANA YONGCO, LEAH ABARQUEZ and ATTY. GAMALIEL D.B. BONJE, Respondents.
G.R. No. 152643
August 28, 2008

DECISION

NACHURA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Court of
Appeals (CA) Decision[1] dated August 15, 2001 and its Resolution[2] dated March 12, 2002. The CA
decision set aside the Regional Trial Court (RTC) Orders dated August 25, 2000[3] granting Concepcion
Cuenco Vda. de Manguerras (Concepcions) motion to take deposition, and dated November 3, 2000[4]
denying the motion for reconsideration of respondents Raul G. Risos, Susana Yongco, Leah Abarquez,
and Atty. Gamaliel D.B. Bonje.

The facts of the case, as culled from the records, follow:

On November 4, 1999, respondents were charged with Estafa Through Falsification of Public Document
before the RTC of Cebu City, Branch 19, through a criminal information dated October 27, 1999, which
was subsequently amended on November 18, 1999. The case, docketed as Criminal Case No. CBU-52248,
[5] arose from the falsification of a deed of real estate mortgage allegedly committed by respondents
where they made it appear that Concepcion, the owner of the mortgaged property known as the
Gorordo property, affixed her signature to the document. Hence, the criminal case.[6]

Earlier, on September 10, 1999, Concepcion, who was a resident of Cebu City, while on vacation in
Manila, was unexpectedly confined at the Makati Medical Center due to upper gastro-intestinal
bleeding; and was advised to stay in Manila for further treatment.[7]

On November 24, 1999, respondents filed a Motion for Suspension of the Proceedings in Criminal Case
No. CBU-52248 on the ground of prejudicial question. They argued that Civil Case No. CEB-20359, which
was an action for declaration of nullity of the mortgage, should first be resolved.[8] On May 11, 2000,
the RTC granted the aforesaid motion. Concepcions motion for reconsideration was denied on June 5,
2000.[9]

This prompted Concepcion to institute a special civil action for certiorari before the CA seeking the
nullification of the May 11 and June 5 RTC orders. The case was docketed as CA-G.R. SP No. 60266 and
remains pending before the appellate court to date.[10]

On August 16, 2000, the counsel of Concepcion filed a motion to take the latters deposition.[11] He
explained the need to perpetuate Concepcions testimony due to her weak physical condition and old
age, which limited her freedom of mobility.

On August 25, 2000, the RTC granted the motion and directed that Concepcions deposition be taken
before the Clerk of Court of Makati City.[12] The respondents motion for reconsideration was denied by
the trial court on November 3, 2000. The court ratiocinated that procedural technicalities should be
brushed aside because of the urgency of the situation, since Concepcion was already of advanced age.
[13] After several motions for change of venue of the deposition-taking, Concepcions deposition was
finally taken on March 9, 2001 at her residence.[14]

Aggrieved, respondents assailed the August 25 and November 3 RTC orders in a special civil action for
certiorari before the CA in CA-G.R. SP No. 62551.[15]

On August 15, 2001, the CA rendered a Decision[16] favorable to the respondents, the dispositive
portion of which reads:

WHEREFORE, the petition is GRANTED and the August 25, 2000 and November 3, 2000 orders of the
court a quo are hereby SET ASIDE, and any deposition that may have been taken on the authority of such
void orders is similarly declared void.

SO ORDERED.[17]

At the outset, the CA observed that there was a defect in the respondents petition by not impleading
the People of the Philippines, an indispensable party. This notwithstanding, the appellate court resolved
the matter on its merit, declaring that the examination of prosecution witnesses, as in the present case,
is governed by Section 15, Rule 119 of the Revised Rules of Criminal Procedure and not Rule 23 of the
Rules of Court. The latter provision, said the appellate court, only applies to civil cases. Pursuant to the
specific provision of Section 15, Rule 119, Concepcions deposition should have been taken before the
judge or the court where the case is pending, which is the RTC of Cebu, and not before the Clerk of Court
of Makati City; and thus, in issuing the assailed order, the RTC clearly committed grave abuse of
discretion. [18]

In its Resolution dated March 12, 2002 denying petitioners motion for reconsideration, the CA added
that the rationale of the Rules in requiring the taking of deposition before the same court is the
constitutional right of the accused to meet the witnesses face to face. The appellate court likewise
concluded that Rule 23 could not be applied suppletorily because the situation was adequately
addressed by a specific provision of the rules of criminal procedure.[19]

Hence, the instant petition raising the following issues:

I.

WHETHER OR NOT RULE 23 OF THE 1997 RULES OF CIVIL PROCEDURE APPLIES TO THE DEPOSITION OF
PETITIONER.

II.

WHETHER OR NOT FAILURE TO IMPLEAD THE PEOPLE OF THE PHILIPPINES IN A PETITION FOR
CERTIORARI ARISING FROM A CRIMINAL CASE A QUO CONSTITUTES A WAIVABLE DEFECT IN THE
PETITION FOR CERTIORARI.[20]
It is undisputed that in their petition for certiorari before the CA, respondents failed to implead the
People of the Philippines as a party thereto. Because of this, the petition was obviously defective. As
provided in Section 5, Rule 110 of the Revised Rules of Criminal Procedure, all criminal actions are
prosecuted under the direction and control of the public prosecutor. Therefore, it behooved the
petitioners (respondents herein) to implead the People of the Philippines as respondent in the CA case
to enable the Solicitor General to comment on the petition.[21]

However, this Court has repeatedly declared that the failure to implead an indispensable party is not a
ground for the dismissal of an action. In such a case, the remedy is to implead the non-party claimed to
be indispensable. Parties may be added by order of the court, on motion of the party or on its own
initiative at any stage of the action and/or such times as are just. If the petitioner/plaintiff refuses to
implead an indispensable party despite the order of the court, the latter may dismiss the
complaint/petition for the petitioners/plaintiffs failure to comply.[22]

In this case, the CA disregarded the procedural flaw by allowing the petition to proceed, in the interest
of substantial justice. Also noteworthy is that, notwithstanding the non-joinder of the People of the
Philippines as party-respondent, it managed, through the Office of the Solicitor General, to file its
Comment on the petition for certiorari. Thus, the People was given the opportunity to refute the
respondents arguments.

Instructive is the Courts pronouncement in Commissioner Domingo v. Scheer[23] in this wise:

There is nothing sacred about processes or pleadings, their forms or contents. Their sole purpose is to
facilitate the application of justice to the rival claims of contending parties. They were created, not to
hinder and delay, but to facilitate and promote, the administration of justice. They do not constitute the
thing itself, which courts are always striving to secure to litigants. They are designed as the means best
adapted to obtain that thing. In other words, they are a means to an end. When they lose the character
of the one and become the other, the administration of justice is at fault and courts are correspondingly
remiss in the performance of their obvious duty.[24]

Accordingly, the CA cannot be faulted for deciding the case on the merits despite the procedural defect.

On the more important issue of whether Rule 23 of the Rules of Court applies to the instant case, we
rule in the negative.

It is basic that all witnesses shall give their testimonies at the trial of the case in the presence of the
judge.[25] This is especially true in criminal cases in order that the accused may be afforded the
opportunity to cross-examine the witnesses pursuant to his constitutional right to confront the witnesses
face to face.[26] It also gives the parties and their counsel the chance to propound such questions as
they deem material and necessary to support their position or to test the credibility of said witnesses.
[27] Lastly, this rule enables the judge to observe the witnesses demeanor.[28]

This rule, however, is not absolute. As exceptions, Rules 23 to 28 of the Rules of Court provide for the
different modes of discovery that may be resorted to by a party to an action. These rules are adopted
either to perpetuate the testimonies of witnesses or as modes of discovery. In criminal proceedings,
Sections 12,[29] 13[30] and 15,[31] Rule 119 of the Revised Rules of Criminal Procedure, which took
effect on December 1, 2000, allow the conditional examination of both the defense and prosecution
witnesses.
In the case at bench, in issue is the examination of a prosecution witness, who, according to the
petitioners, was too sick to travel and appear before the trial court. Section 15 of Rule 119 thus comes
into play, and it provides:

Section 15. Examination of witness for the prosecution. When it satisfactorily appears that a witness for
the prosecution is too sick or infirm to appear at the trial as directed by the court, or has to leave the
Philippines with no definite date of returning, he may forthwith be conditionally examined before the
court where the case is pending. Such examination, in the presence of the accused, or in his absence
after reasonable notice to attend the examination has been served on him, shall be conducted in the
same manner as an examination at the trial. Failure or refusal of the accused to attend the examination
after notice shall be considered a waiver. The statement taken may be admitted in behalf of or against
the accused.

Petitioners contend that Concepcions advanced age and health condition exempt her from the
application of Section 15, Rule 119 of the Rules of Criminal Procedure, and thus, calls for the application
of Rule 23 of the Rules of Civil Procedure.

The contention does not persuade.

The very reason offered by the petitioners to exempt Concepcion from the coverage of Rule 119 is at
once the ground which places her squarely within the coverage of the same provision. Rule 119
specifically states that a witness may be conditionally examined: 1) if the witness is too sick or infirm to
appear at the trial; or 2) if the witness has to leave the Philippines with no definite date of returning.
Thus, when Concepcion moved that her deposition be taken, had she not been too sick at that time, her
motion would have been denied. Instead of conditionally examining her outside the trial court, she
would have been compelled to appear before the court for examination during the trial proper.

Undoubtedly, the procedure set forth in Rule 119 applies to the case at bar. It is thus required that the
conditional examination be made before the court where the case is pending. It is also necessary that
the accused be notified, so that he can attend the examination, subject to his right to waive the same
after reasonable notice. As to the manner of examination, the Rules mandate that it be conducted in the
same manner as an examination during trial, that is, through question and answer.

At this point, a query may thus be posed: in granting Concepcions motion and in actually taking her
deposition, were the above rules complied with? The CA answered in the negative. The appellate court
considered the taking of deposition before the Clerk of Court of Makati City erroneous and contrary to
the clear mandate of the Rules that the same be made before the court where the case is pending.
Accordingly, said the CA, the RTC order was issued with grave abuse of discretion.
We agree with the CA and quote with approval its ratiocination in this wise:

Unlike an examination of a defense witness which, pursuant to Section 5, Rule 119 of the previous Rules,
and now Section 13, Rule 119 of the present Revised Rules of Criminal Procedure, may be taken before
any judge, or, if not practicable, a member of the Bar in good standing so designated by the judge in the
order, or, if the order be made by a court of superior jurisdiction, before an inferior court to be
designated therein, the examination of a witness for the prosecution under Section 15 of the Revised
Rules of Criminal Procedure (December 1, 2000) may be done only before the court where the case is
pending.[32]
 Rule 119 categorically states that the conditional examination of a prosecution witness shall be made
before the court where the case is pending. Contrary to petitioners contention, there is nothing in the
rule which may remotely be interpreted to mean that such requirement applies only to cases where the
witness is within the jurisdiction of said court and not when he is kilometers away, as in the present case.
Therefore, the court may not introduce exceptions or conditions. Neither may it engraft into the law (or
the Rules) qualifications not contemplated.[33] When the words are clear and categorical, there is no
room for interpretation. There is only room for application.[34]

Petitioners further insist that Rule 23 applies to the instant case, because the rules on civil procedure
apply suppletorily to criminal cases.

It is true that Section 3, Rule 1 of the Rules of Court provides that the rules of civil procedure apply to all
actions, civil or criminal, and special proceedings. In effect, it says that the rules of civil procedure have
suppletory application to criminal cases. However, it is likewise true that the criminal proceedings are
primarily governed by the Revised Rules of Criminal Procedure. Considering that Rule 119 adequately
and squarely covers the situation in the instant case, we find no cogent reason to apply Rule 23
suppletorily or otherwise.

To reiterate, the conditional examination of a prosecution witness for the purpose of taking his
deposition should be made before the court, or at least before the judge, where the case is pending.
Such is the clear mandate of Section 15, Rule 119 of the Rules. We find no necessity to depart from, or to
relax, this rule. As correctly held by the CA, if the deposition is made elsewhere, the accused may not be
able to attend, as when he is under detention. More importantly, this requirement ensures that the
judge would be able to observe the witness deportment to enable him to properly assess his credibility.
This is especially true when the witness testimony is crucial to the prosecutions case.

While we recognize the prosecutions right to preserve its witness testimony to prove its case, we cannot
disregard rules which are designed mainly for the protection of the accuseds constitutional rights. The
giving of testimony during trial is the general rule. The conditional examination of a witness outside of
the trial is only an exception, and as such, calls for a strict construction of the rules.

WHEREFORE, the petition is hereby DENIED. The Court of Appeals Decision and Resolution dated August
25, 2000 and March 12, 2002, respectively, in CA-G.R. SP No. 62551, are AFFIRMED.

SO ORDERED.