SECOND DIVISION
 
 
ARTHUR DEL ROSARIO and G.R. No. 180595
ALEXANDER DEL ROSARIO,
Petitioners, Present:
CARPIO, J., Chairperson,
- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
HELLENOR D. DONATO, JR.
and RAFAEL V. GONZAGA, Promulgated:
Respondents.
March 5, 2010
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DECISION
 

ABAD, J.:
 

This case is about the need for plaintiff to state the facts constituting his
cause of action and the correct forum for actions for damages arising from alleged
wrongful procurement and enforcement of a search warrant issued in connection
with an alleged criminal violation of the intellectual property law.
 
 The Facts and the Case
 
On January 23, 2002 Philip Morris Products, Inc. (Philip Morris) wrote the
National Bureau of Investigation (NBI), requesting assistance in curtailing the
proliferation of fake Marlboro cigarettes in Angeles City, Pampanga. After doing
surveillance work in that city, respondent Hellenor Donato, Jr., the NBI agent
assigned to the case, succeeded in confirming the storage and sale of such fake
cigarettes at the house at 51 New York Street, Villasol Subdivision, Angeles City,
that belonged to petitioner Alexander del Rosario.
 
On March 5, 2002 respondent Donato applied for a search warrant with
Branch 57 of the Regional Trial Court (RTC) of Angeles City to search the subject
premises. But it took a week later or on March 12, 2002 for the RTC to hear the
application and issue the search warrant. Although Donato felt that the delayed
hearing compromised the operation, the NBI agents led by respondent Rafael V.
Gonzaga proceeded to implement the warrant. Their search yielded no fake
Marlboro cigarettes.
 
Subsequently, petitioners Alexander and Arthur del Rosario (the Del
Rosarios) filed a complaint for P50 million in damages against respondents NBI
agents Donato and Gonzaga and two others before the RTC of Angeles City,
Branch 62, in Civil Case 10584. On August 6, 2003 respondents NBI agents
answered the complaint with a motion to dismiss on the grounds of: a) the failure
of the complaint to state a cause of action; b) forum shopping; and c) the NBI
agents immunity from suit, they being sued as such agents.The RTC denied the
motion on March 25, 2003. The NBI agents filed a motion for reconsideration but
the RTC denied the same on June 27, 2003.
 
Dissatisfied, respondents NBI agents filed a special civil action
of certiorari before the Court of Appeals (CA) in CA-G.R. SP 79496. On June 29,
2007 the latter court granted the petition and annulled the RTCs orders, first, in
alleging merely that the NBI agents unlawfully procured the search warrant
without stating the facts that made the procurement unlawful, the complaint
failed to state a cause of action; and second, the Del Rosarios were guilty of forum
shopping in that they should have filed their claim for damages against the NBI
agents through a motion for compensation with the court that issued the search
warrant.
 
The Del Rosarios sought reconsideration of the decision but the CA denied
it on November 19, 2007, prompting them to file this petition for review.
 
The Issues Presented
 
The petition presents two issues:
 
1. Whether or not the CA correctly ruled that the complaint of the Del
Rosarios did not state a cause of action; and
 
2. Whether or not the CA correctly ruled that the Del Rosarios were guilty
of forum shopping.
 
The Courts Rulings
 
One. The CA held that the Del Rosarios complaint before the RTC failed to
state a cause of action against respondents NBI agents. Such complaint said that
the NBI agents unlawfully procured and enforced the search warrant issued
against the Del Rosarios but it failed to state the ultimate facts from which they
drew such conclusion.
 
The test of sufficiency of a complaint is whether or not, assuming the truth
of the facts that plaintiff alleges in it, the court can render judgment granting him
the judicial assistance he seeks.[1] And judgment would be right only if the facts he
alleges constitute a cause of action that consists of three elements: (1) the
plaintiffs legal right in the matter; (2) the defendants corresponding obligation to
honor or respect such right; and (3) the defendants subsequent violation of the
right. Absent any of these, the complaint would have failed to state a cause of
action.[2]
 
According to the Del Rosarios, the following allegations in their complaint
state a cause or causes of action against respondents NBI agents:
 
2.4 On 12 March 2002, elements of the [NBI] x x x led by Defendant Rafael I.
Gonzaga x x x entered by force the premises belonging to Plaintiff Alexander del
Rosario situated at No. 51 New York Street, Villasol Subdivision, Angeles City,
pursuant to a Search Warrant unlawfully obtained from the [RTC] of Angeles City,
Branch 57 x x x.

xxxx

2.6 Contrary to the sworn statements given before the court by defendants

2.7 The inclusion of Plaintiff Arthur del Rosario in Search Warrant No. 02-09
had no factual basis considering that the premises searched is the property solely of
Plaintiff Alexander del Rosario.

2.8 Worse the enforcement of Searched [sic] Warrant No. 02-09 was just part
of the series of raids and searches that was conducted in Angeles City and Pampanga,
which was done with much publicity in the community and had tended to include the
Plaintiffs in the same category as other persons and entities who were in fact found to
be dealing with fake Marlboro cigarettes.

xxxx

3.2 The baseless sworn allegations that Plaintiffs had under their control and
possession counterfeit Marlboro cigarettes and packaging to obtain a search warrant,
and the malicious service of the such warrant at the residential premises of Plaintiff
Alexander del Rosario in full and plain view of members of the community, as part of
 the series of raids and operations conducted within Angeles City and Pampanga during
that period, has tainted irreversibly the good names which Plaintiffs have
painstakingly built and maintained over the years.

xxxx

3.4 Plaintiffs were subjected to so much humiliation and embarrassment by

 
Essentially, however, all that the Del Rosarios allege is that respondents NBI
agents used an unlawfully obtained search warrant against them, evidenced by
the fact that, contrary to the sworn statements used to get such warrant, the NBI
agents found no fake Marlboro cigarettes in petitioner Alexander del Rosarios
premises.
 
But a judicially ordered search that fails to yield the described illicit article
does not of itself render the courts order unlawful. The Del Rosarios did not allege
that respondents NBI agents violated their right by fabricating testimonies to
convince the RTC of Angeles City to issue the search warrant. Their allegation that
the NBI agents used an unlawfully obtained search warrant is a mere conclusion
of law. While a motion to dismiss assumes as true the facts alleged in the
complaint, such admission does not extend to conclusions of law.[3] Statements of
mere conclusions of law expose the complaint to a motion to dismiss on ground
of failure to state a cause of action.[4]
 
Further, the allegation that the search warrant in this case was served in a
malicious manner is also not sufficient. Allegations of bad faith, malice, and other
related words without ultimate facts to support the same are mere conclusions of
law.[5]
 
The Del Rosarios broad assertion in their complaint that the search was
conducted in full and plain view of members of the community does not likewise
support their claim that such search was maliciously enforced. There is nothing
inherently wrong with search warrants being enforced in full view of neighbors. In
fact, when the respondent or his representative is not present during the search,
the rules require that it be done in the presence of two residents of the same
locality. These safeguards exist to protect persons from possible abuses that may
occur if searches were done surreptitiously or clandestinely.
 
Two. Invoking Section 21 of this Courts Administrative Matter (A.M.) 02-1-
06-SC (not A.O. 01-1-06-SC as cited), the CA held that, rather than file a separate
action for damages, the Del Rosarios should have filed their claim for
compensation in the same proceeding and with the same court that issued the
writ of search and seizure. The Del Rosarios were thus guilty of forum shopping.
 
A.M. 02-1-06-SC, the Rule on Search and Seizure in Civil Actions for
Infringement of Intellectual Property Rights, provides:
 
SEC. 21. Claim for damages. Where the writ [of search and seizure] is
discharged on any of the grounds provided in this Rule, or where it is found after trial
that there has been no infringement or threat of infringement of an intellectual
property right, the court, upon motion of the alleged infringing defendant or expected
adverse party and after due hearing, shall order the applicant to compensate the
defendant or expected adverse party upon the cash bond, surety bond or other
equivalent security for any injury or damage the latter suffered by the issuance and
enforcement of the writ. Should the damages exceed the amount of the bond, the
applicant shall be liable for the payment of the excess.

When a complaint is already filed in court, the motion shall be filed with the
same court during the trial or before appeal is perfected or before judgment becomes
executory, with due notice to the applicant, setting forth the facts showing the
defendants right to damages and the amount thereof. The award of damages shall be
included in the judgment in the main case.

Where no complaint is filed against the expected adverse party, the motion
shall be filed with the court which issued the writ. In such a case, the court shall set
the motion for summary hearing and immediately determine the expected adverse
partys right to damages.

 
 A judgment in favor of the applicant in its principal claim should not
necessarily bar the alleged infringing defendant from recovering damages where he
suffered losses by reason of the wrongful issuance or enforcement of the writ.

The damages provided for in this section shall be independent from the
damages claimed by the defendant in his counterclaim.

 
But the subject search warrant was not issued under A.M. 02-1-06-SC,
which governed the issuance of a writ of search and seizure in a civil action for
infringement filed by an intellectual property right owner against the supposed
infringer of his trademark or name. Philip Morris, the manufacturer of Marlboro
cigarettes, did not go by this route.Philip Morris did not file a civil action for
infringement of its trademark against the Del Rosarios before the RTC of Angeles
City.
 
Instead, Philip Morris sought assistance from the NBI for the apprehension
and criminal prosecution of those reportedly appropriating its trademark and
selling fake Marlboro cigarettes. In turn, the NBI instituted a police action that
included applying for a search and seizure warrant under Sections 3, 4, 5 and 6 of
Rule 126 of the Rules of Criminal Procedure (not under the provisions of A.M. 02-
1-06-SC) against the Del Rosarios upon the belief that they were storing and
selling fake Marlboro cigarettes in violation of the penal provisions of the
intellectual property law.
 
The proceeding under Rule 126, a limited criminal one, does not provide for
the filing of counterclaims for damages against those who may have improperly
sought the issuance of the search warrant. Consequently, the Del Rosarios had
the right to seek damages, if the circumstances warranted, by separate civil action
for the wrong inflicted on them by an improperly obtained or enforced search
warrant. Unfortunately, their complaint, as worded, failed to state a proper cause
of action.
 
Petitioner Arthur del Rosario claims that respondents NBI agents wrongfully
included him as respondent in their application for a search warrant since he
neither owned the house at 51 New York Street nor resided in it. But the rules do
not require respondents in search warrant proceedings to be residents of the
premises to be searched. If this were the case, criminals in possession of illegal
articles could simply use other peoples residence for storing such articles to avoid
being raided and searched.
 
The Del Rosarios raise a number of procedural issues: a) the supposed
failure of respondents NBI agents to file their motion for reconsideration of the
RTC order denying their motion to dismiss within 15 days of receipt of the order;
b) their resort to a special civil action of certiorari to challenge the RTCs denial of
their motion to dismiss; c) the propriety of their inclusion of a motion to dismiss in
their answer; d) the CAs grant to them in 2003 of a 15-day extension to file a
petition for certiorari after the lapse of 60 days when the Court did not yet come
out with a ruling that barred such extension; and e) their being represented by
private counsel rather than by the Office of the Solicitor General.
 
With the Courts rulings in the principal issues raised in this case, it finds no
sufficient reason to further dwell on the lesser issues that the Del Rosarios raise
above. Besides, the Court finds no error in the CAs disposition of the same.
 
WHEREFORE, the Court DENIES the petition and AFFIRMS the Decision of
the Court of Appeals in CA-G.R. SP 79496 dated June 29, 2007 and its Resolution
dated November 19, 2007 for the reasons stated in this Decision, with
the MODIFICATION that Civil Case 10584 is DISMISSED without prejudice.
 
SO ORDERED.
 
 

ROBERTO A. ABAD
Associate Justice
 
 
WE CONCUR:
 
 
 
ANTONIO T. CARPIO
Associate Justice
 
 

 
 
 
 
 
 
 
ARTURO D. BRION MARIANO C. DEL CASTILLO
Associate Justice Associate Justice
 
 
 
 
JOSE PORTUGAL PEREZ
Associate Justice
 
 

ATTESTATION
 

I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Courts Division.
 
 
 
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
 
 

CERTIFICATION
 

 
Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.
 
 
 
 
REYNATO S. PUNO
Chief Justice
 

[1]
 Guaranteed Homes, Inc. v. Heirs of Maria P. Valdez, G.R. No. 171531, January 30, 2009, 577 SCRA 441, 448-
449.
[2]
 Heirs of Loreto C. Maramag v. Maramag, G.R. No. 181132, June 5, 2009.
[3]
 Drilon v. Court of Appeals, 409 Phil. 14, 28 (2001).
[4]
 Philippine National Bank v. Encina, G.R. No. 174055, February 12, 2008, 544 SCRA 608, 620.
[5]
 Drilon v. Court of Appeals, supra note 3, at 30.