March 2011 Philippine Supreme Court Decisions on Remedial Law

Here are selected March 2011 rulings of the Supreme Court of the Philippines on remedial law:

CIVIL PROCEDURE 

Contempt; contempt proceedings distinguished from suspension proceedings.  Contempt and suspension proceedings are supposed to be separate and distinct.  They have different objects and purposes for which different procedures have been established.  Judge Blancaflor should have conducted separate proceedings.  As held in the case of People v. Godoy, thus:

 A contempt proceeding for misbehavior in court is designed to vindicate the authority of the court; on the other hand, the object of a disciplinary proceeding is to deal with the fitness of the court’s officer to continue in that office, to preserve and protect the court and the public from the official ministrations of persons unfit or unworthy to hold such office.  The principal purpose of the exercise of the power to cite for contempt is to safeguard the functions of the court and should thus be used sparingly on a preservative and not, on the vindictive principle.  The principal purpose of the exercise of disciplinary authority by the Supreme Court is to assure respect for orders of such court by attorneys who, as much as judges, are responsible for the orderly administration of justice.

x x x.  It has likewise been the rule that a notice to a lawyer to show cause why he should not be punished for contempt cannot be considered as a notice to show cause why he should not be suspended from the practice of law, considering that they have distinct objects and for each of them a different procedure is established. Contempt of court is governed by the procedures laid down under Rule 71 of the Rules of Court, whereas disciplinary actions in the practice of law are governed by Rules 138 and 139 thereof.

Thus, it was grossly improper for Judge Blancaflor to consider his July 30, 2009 Order on the contempt charge as the notice required in the disciplinary proceedings suspending petitioners from the practice of law.  Alen Ross Rodriguez and Regidor Tulali vs. The Hon. Bienvenido Blancaflor, etc. and People of the Philippines, G.R. No. 190171, March 14, 2011.

Contempt; direct contempt.  Direct contempt is any misbehavior in the presence of or so near a court as to obstruct or interrupt the proceedings before the same, including disrespect toward the court, offensive personalities toward others, or refusal to be sworn or to answer as a witness, or to subscribe an affidavit or deposition when lawfully required to do so.

Based on the foregoing definition, the act of Tulali in filing the Ex-Parte Manifestation cannot be construed as contumacious within the purview of direct contempt.  It must be recalled that the subject manifestation bore Tulali’s voluntary withdrawal from the arson case to dispel any suspicion of collusion between him and the accused.  Its filing on the day before the promulgation of the decision in the pending criminal case, did not in any way disrupt the proceedings before the court.  Accordingly, he should not be held accountable for his act which was done in good faith and without malice.

Neither should Rodriguez be liable for direct contempt as he had no knowledge of, or participation in, the preparation and filing of the subject manifestation.  It was signed and filed by Tulali alone in his capacity as the trial prosecutor in the arson case.  The attached complaint against Awayan was filed with the Office of the Palawan Governor, and  not with the RTC.

Apparently, Judge Blancaflor’s conclusion, that the subject manifestation containing derogatory matters was purposely filed to discredit the administration of justice in court, is unfounded and without basis.  There being no factual or legal basis for the charge of direct contempt, it is clear that Judge Blancaflor gravely abused his discretion in finding petitioners guilty as charged.  Alen Ross Rodriguez and Regidor Tulali vs. The Hon. Bienvenido Blancaflor, etc. and People of the Philippines, G.R. No. 190171, March 14, 2011.

Contempt; direct contempt; penalty.  Such grave abuse of authority is likewise manifested from the penalty imposed on the petitioners.  Under Section 1, Rule 71 of the Revised Rules of Court, direct contempt before the RTC or a court of equivalent or higher rank is punishable by a fine not exceeding P2,000.00 or imprisonment not exceeding ten (10) days, or both.  The penalty of indefinite suspension from the practice of law and to pay a fine of P100,000.00 each with the additional order to issue a public apology to the Court under pain of arrest, is evidently unreasonable, excessive and outside the bounds of the law.  Alen Ross Rodriguez and Regidor Tulali vs. The Hon. Bienvenido Blancaflor, etc. and People of the Philippines, G.R. No. 190171, March 14, 2011.

Contempt; direct contempt; remedy of contemnor.  In fine, having established that Judge Blancaflor committed grave abuse of discretion amounting to lack or excess of jurisdiction, petitioners are entitled to the remedy of prohibition under Section 2, Rule 71 of the Rules on Contempt which provides:

SEC. 2. Remedy therefrom. – The person adjudged in direct contempt by any court may not appeal therefrom, but may avail himself of the remedies of certiorari or prohibition. The execution of the judgment shall be suspended pending resolution of such petition, provided such person files a bond fixed by the court which rendered the judgment and conditioned that he will abide by and perform the judgment should the petition be decided against him.

Accordingly, an order of direct contempt is not immediately executory or enforceable. The contemnor must be afforded a reasonable remedy to extricate or purge himself of the contempt. Where the person adjudged in direct contempt by any court avails of the remedy of certiorari or prohibition, the execution of the judgment shall be suspended pending resolution of such petition provided the contemnor files a bond fixed by the court which rendered the judgment and conditioned that he will abide by and perform the judgment should the petition be decided against him.  Alen Ross Rodriguez and Regidor Tulali vs. The Hon. Bienvenido Blancaflor, etc. and People of the Philippines, G.R. No. 190171, March 14, 2011.

Contempt; indirect contempt; due process requirements.  Petitioners also fault Judge Blancaflor for non-observance of due process in conducting the contempt proceedings.  It must be emphasized that direct contempt is adjudged and punished summarily pursuant to Section 1, Rule 71 of the Rules.  Hence, hearings and opportunity to confront witnesses are absolutely unnecessary.

In the same vein, the petitioners’ alleged “vilification campaign” against Judge Blancaflor cannot be regarded as direct contempt.  At most, it may constitute indirect contempt, as correctly concluded by the OSG.  For indirect contempt citation to prosper, however, the requirements under Sections 3 and 4, Rule 71 of the Rules must be satisfied, to wit:

Sec. 3.  Indirect contempt to be punished after charge and hearing. – After a charge in writing has been filed, and an opportunity given to the respondent to comment thereon within such period as may be fixed by the court and to be heard by himself or counsel, a person guilty of any of the following acts may be punished for indirect contempt:

x x x

(d)     any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice;

x x x.

Sec. 4. How proceedings commenced. — Proceedings for indirect contempt may be initiated motu proprio by the court against which the contempt was committed by an order or any other formal charge requiring the respondent to show cause why he should not be punished for contempt.

In all other cases, charges for indirect contempt shall be commenced by a verified petition with supporting particulars and certified true copies of documents or papers involved therein, and upon full compliance with the requirements for filing initiatory pleadings for civil actions in the court concerned. If the contempt charges arose out of or are related to a principal action pending in the court, the petition for contempt shall allege that fact but said petition shall be docketed, heard and decided separately, unless the court in its discretion orders the consolidation of the contempt charge and the principal action for joint hearing and decision.

In the present case, Judge Blancaflor failed to observe the elementary procedure which requires written charge and due hearing.  There was no order issued to petitioners. Neither was there any written or formal charge filed against them.  In fact, Rodriguez only learned of the contempt proceedings upon his receipt of the July 30, 2009 Order, requiring him to appear before the Court in order to clarify certain matters contained in the said order.  Tulali, on the other hand, only learned of the proceedings when he was ordered to submit his compliance to explain how he came in possession of the administrative complaint against Awayan.  Alen Ross Rodriguez and Regidor Tulali vs. The Hon. Bienvenido Blancaflor, etc. and People of the Philippines, G.R. No. 190171, March 14, 2011.

Contempt; nature of contempt power.  The power to punish a person in contempt of court is inherent in all courts to preserve order in judicial proceedings and to uphold the orderly administration of justice. However, judges are enjoined to exercise the power judiciously and sparingly, with utmost restraint, and with the end in view of utilizing the same for correction and preservation of the dignity of the court, and not for retaliation or vindictiveness.  It bears stressing that the power to declare a person in contempt of court must be exercised on the preservative, not the vindictive principle; and on the corrective, not the retaliatory, idea of punishment.  Such power, being drastic and extraordinary in its nature, should not be resorted to unless necessary in the interest of justice.  In this case, the Court cannot sustain Judge Blancaflor’s order penalizing petitioners for direct contempt on the basis of Tulali’s Ex-Parte Manifestation.  Alen Ross Rodriguez and Regidor Tulali vs. The Hon. Bienvenido Blancaflor, etc. and People of the Philippines, G.R. No. 190171, March 14, 2011.

Forum shopping; identity of cause of action.  There is forum shopping “when a party repetitively avails of several judicial remedies in different courts, simultaneously or successively, all substantially founded on the same transactions and the same essential facts and circumstances, and all raising substantially the same issues either pending in or already resolved adversely by some other court.”  The different ways by which forum shopping may be committed were explained in Chua v. Metropolitan Bank & Trust Company:

Forum shopping can be committed in three ways:  (1) filing multiple cases based on the same cause of action and with the same prayer, the previous case not having been resolved yet (where the ground for dismissal is litis pendentia); (2) filing multiple cases based on the same cause of action and the same prayer, the previous case having been finally resolved (where the ground for dismissal is res judicata); and (3) filing multiple cases based on the same cause of action, but with different prayers (splitting causes of action, where the ground for dismissal is also either litis pendentia or res judicata).

Common in these types of forum shopping is the identity of the cause of action in the different cases filed.  Cause of action is defined as “the act or omission by which a party violates the right of another.”

The cause of action in the earlier Annulment Case is the alleged nullity of the REM (due to its allegedly falsified or spurious nature) which is allegedly violative of Goodland’s right to the mortgaged property.  It serves as the basis for the prayer for the nullification of the REM.  The Injunction Case involves the same cause of action, inasmuch as it also invokes the nullity of the REM as the basis for the prayer for the nullification of the extrajudicial foreclosure and for injunction against consolidation of title.  While the main relief sought in the Annulment Case (nullification of the REM) is ostensibly different from the main relief sought in the Injunction Case (nullification of the extrajudicial foreclosure and injunction against consolidation of title), the cause of action which serves as the basis for the said reliefs remains the same — the alleged nullity of the REM.  Thus, what is involved here is the third way of committing forum shopping, i.e., filing multiple cases based on the same cause of action, but with different prayers.  As previously held by the Court, there is still forum shopping even if the reliefs prayed for in the two cases are different, so long as both cases raise substantially the same issues.

There can be no determination of the validity of the extrajudicial foreclosure and the propriety of injunction in the Injunction Case without necessarily ruling on the validity of the REM, which is already the subject of the Annulment Case.  The identity of the causes of action in the two cases entails that the validity of the mortgage will be ruled upon in both, and creates a possibility that the two rulings will conflict with each other.  This is precisely what is sought to be avoided by the rule against forum shopping.  The substantial identity of the two cases remains even if the parties should add different grounds or legal theories for the nullity of the REM or should alter the designation or form of the action.  The well-entrenched rule is that “a party cannot, by varying the form of action, or adopting a different method of presenting his case, escape the operation of the principle that one and the same cause of action shall not be twice litigated.”

The CA ruled that the two cases are different because the events that gave rise to them are different.  The CA rationalized that the Annulment Case was brought about by the execution of a falsified document, while the Injunction Case arose from AUB’s foreclosure based on a falsified document.  The distinction is illusory.  The cause of action for both cases is the alleged nullity of the REM due to its falsified or spurious nature.  It is this nullity of the REM which Goodland sought to establish in the Annulment Case.  It is also this nullity of the REM which Goodland asserted in the Injunction Case as basis for seeking to nullify the foreclosure and enjoin the consolidation of title.  Clearly, the trial court cannot decide the Injunction Case without ruling on the validity of the mortgage, which issue is already within the jurisdiction of the trial court in the Annulment Case.

The recent development in Asia United Bank v. Goodland Company, Inc., which involved substantially the same parties and the same issue is another reason for Goodland’s loss in the instant case.  The issue that Goodland committed deliberate forum shopping when it successively filed the Annulment and Injunction Cases against AUB and its officers was decided with finality therein.  This ruling is conclusive on the petitioners and Goodland considering that they are substantially the same parties in that earlier case.  Asia United Bank, et al. v. Goodland Company, Inc., G.R. No. 191388, March 9, 2011.

Judgment; immutability and binding effect.  Settled is the rule that a judgment that has become final and executory is immutable and unalterable; the judgment may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the court rendering it or by the highest court of the land.  While there are recognized exceptions – e.g., the correction of clerical errors, the so-called nunc pro tunc entries which cause no prejudice to any party, void judgments, and whenever circumstances transpire after the finality of the decision rendering its execution unjust and inequitable – none of these exceptions apply to the present case.

There is no dispute that the November 14, 2002 Resolution of the CA in CA-G.R. SP No. 65703, which is being questioned by petitioner, had already become final and executory. The petition for review on certiorari filed by petitioner assailing the said CA Resolution had been denied with finality as this Court found no compelling reason to grant the said petition. Consequently, an entry of judgment was already issued by this Court on September 1, 2003.

It has been established in the assailed CA Resolution that the Certificate of Sale involving TCT No. T-105375 was not registered with the Register of Deeds of Bulacan. Owing to the finality of the said Resolution, the Court as well as the parties therein, which includes herein petitioner, are now bound by the said factual finding.

The determination of the questions of fact and of law by the CA in CA-G.R. SP No. 65703 already attained finality, and may not now be disputed or relitigated by a reopening of the same questions in a subsequent litigation between the same parties and their privies over the same subject matter.On the basis of the foregoing, the Court finds that the RTC did not err in relying on the November 14, 2002 Resolution of the CA in CA-G.R. SP No. 65703.  Philippine Veterans Bank v. Ramon Valenzuela, G.R. No. 163530, March 9, 2011.

Jurisdiction; court’s directive for re-raffle is improper where it finds that it has no jurisdiction over action.  Jurisdiction is defined as the authority to hear and determine a cause or the right to act in a case.  In addition to being conferred by the Constitution and the law, the rule is settled that a court’s jurisdiction over the subject matter is determined by the relevant allegations in the complaint, the law in effect when the action is filed, and the character of the relief sought irrespective of whether the plaintiff is entitled to all or some of the claims asserted.  Consistent with Section 1, Rule 141 of the Revised Rules of Court which provides that the prescribed fees shall be paid in full “upon the filing of the pleading or other application which initiates an action or proceeding”, the well-entrenched rule is to the effect that a court acquires jurisdiction over a case only upon the payment of the prescribed filing and docket fees.

The record shows that R-II Builders’ original complaint dated 23 August 2005 was initially docketed as Civil Case No. 05-113407 before Branch 24 of the Manila, a designated Special Commercial Court.  With HGC’s filing of a motion for a preliminary hearing on the affirmative defenses asserted in its answer and R-II Builders’ filing of its Amended and Supplemental Complaint dated 31 July 2007, said court issued an order dated 2 January 2008 ordering the re-raffle of the case upon the finding that the same is not an intra-corporate dispute.  In a clarificatory order dated 1 February 2008, the same court significantly took cognizance of its lack of jurisdiction over the case in the following wise:

At the outset, it must be stated that this Court is a designated Special Commercial Court tasked to try and hear, among others, intra-corporate controversies to the exclusion of ordinary civil cases.

When the case was initially assigned to this Court, it was classified as an intra-corporate case.  However, in the ensuing proceedings relative to the affirmative defences raised by defendants, even the plaintiff conceded that the case is not an intra-corporate controversy or even if it is, this Court is without authority to hear the same as the parties are all housed in Quezon City.

Thus, the more prudent course to take was for this Court to declare that it does not have the authority to hear the complaint it being an ordinary civil action.  As to whether it is personal or civil, this Court would rather leave the resolution of the same to Branch 22 of this Court. (Italics supplied).

We find that, having squarely raised the matter in its Rule 65 petition for certiorari and prohibition docketed as CA-G.R. SP No. 111153, HGC correctly faults the CA for not finding that Branch 24 of the Manila RTC had no authority to order the transfer of the case to respondent RTC.  Being outside the jurisdiction of Special Commercial Courts, the rule is settled that cases which are civil in nature, like the one commenced by R-II Builders, should be threshed out in a regular court.  With its acknowledged lack of jurisdiction over the case, Branch 24 of the Manila RTC should have ordered the dismissal of the complaint, since a court without subject matter jurisdiction cannot transfer the case to another court.  Instead, it should have simply ordered the dismissal of the complaint, considering that the affirmative defenses for which HGC sought hearing included its lack of jurisdiction over the case.

Calleja v. Panday, while on facts the other way around, i.e., a branch of the RTC exercising jurisdiction over a subject matter within the Special Commercial Court’s authority, dealt squarely with the issue:

Whether a branch of the Regional Trial Court which has no jurisdiction to try and decide a case has authority to remand the same to another co-equal Court in order to cure the defects on venue and jurisdiction.

Calleja ruled on the issue, thus:

Such being the case, RTC Br. 58 did not have the requisite authority or power to order the transfer of the case to another branch of the Regional Trial Court.  The only action that RTC-Br. 58 could take on the matter was to dismiss the petition for lack of jurisdiction.

Certainly, the pronouncement of Br. 24, the Special Commercial Court, in its Joint Order of 2 January 2008 that the case is not an intracorporate controversy, amplified in its Order of 1 February 2008 that it “does not have the authority to hear the complaint it being an ordinary civil action” is incompatible with the directive for the re-raffle of the case and to “leave the resolution of the same to Branch 22 of this Court.”  Such a directive is an exercise of authority over the case, which authority it had in the same breath declared it did not have.  What compounds the jurisdictional error is the fact that at the time of its surrender of jurisdiction, Br. 24 had already acted on the case and had in fact, on 26 October 2005, issued the writ of preliminary injunction sought by herein respondent R-II Builders.  At that point, there was absolutely no reason which could justify a re-raffle of the case considering that the order that was supposed to have caused the re-raffle was not an inhibition of the judge but a declaration of absence of jurisdiction.  So faulty was the order of re-raffle that it left the impression that its previously issued preliminary injunction remained effective since the case from which it issued was not dismissed but merely transferred to another court.  A re-raffle which causes a transfer of the case involves courts with the same subject matter jurisdiction; it cannot involve courts which have different jurisdictions exclusive of the other.  More apt in this case, a re-raffle of a case cannot cure a jurisdictional defect.

Prescinding from the foregoing considerations, and to show that the proceedings below was error upon error, we find that the CA also gravely erred in not ruling that respondent RTC’s (Branch 22, the regular court) jurisdiction over the case was curtailed by R-II Builders’ failure to pay the correct docket fees.  In other words, the jurisdictionally flawed transfer of the case from Branch 24, the SCC to Branch 22, the regular court, is topped by another jurisdictional defect which is the non-payment of the correct docket fees.  In its order dated 19 May 2008 which admitted R-II Builders’ Amended and Supplemental Complaint, respondent RTC distinctly ruled that the case was a real action and ordered the re-computation and payment of the correct docket fees.  In patent circumvention of said order, however, R-II Builders filed its 14 August 2008 motion to admit its Second Amended Complaint which effectively deleted its causes of action for accounting and conveyance of title to and/or possession of the entire Asset Pool and, in addition to reducing the claim for attorney’s fees and seeking its appointment as a receiver, reinstated its cause of action for resolution of the DAC.  Acting on said motion as well as the opposition and motion to dismiss interposed by HGC, respondent RTC ruled as follows in its assailed 3 March 2009 order, to wit:  Home Guaranty Corporation vs. R-II Builders, Inc. and National Housing Authority, G.R. No. 192649, March 9, 2011.

Jurisdiction; court’s inherent power to amend and control its process and orders.  Applicable, too, is what Sec. 5, Rule 135 of the Rules of Court states as one of the powers of a court:

Section 5. Inherent powers of the courts.¾Every court shall have power:

x x x x

(g) To amend and control its process and orders so as to make them conformable to law and justice.

Thus, the Court ruled in Mejia v. Gabayan:

x x x The inherent power of the court carries with it the right to determine every question of fact and law which may be involved in the execution. The court may stay or suspend the execution of its judgment if warranted by the higher interest of justice. It has the authority to cause a modification of the decision when it becomes imperative in the higher interest of justice or when supervening events warrant it. The court is also vested with inherent power to stay the enforcement of its decision based on antecedent facts which show fraud in its rendition or want of jurisdiction of the trial court apparent on the record. (Emphasis supplied.)

The writ of execution sought to be implemented does not take into consideration the circumstances that merit a modification of judgment. Given that there is a pending issue regarding the execution of judgment, the RTC should have afforded the parties the opportunity to adduce evidence to determine the period within which Danilo should pay monthly rentals before issuing the writ of execution in the instant case.  Should Danilo be unable to substantiate his claim that he vacated the premises in April 1994, the period to pay monthly rentals should be until June 19, 2007, the date he informed the CA that he had already left the premises.  Danilo L. Parel v. Heirs of Simeon Prudencio, G.R. No. 192217, March 2, 2011.

Jurisdiction; effect of failure to pay correct docket fees.  For failure of R-II Builders to pay the correct docket fees for its original complaint or, for that matter, its Amended and Supplemental Complaint as directed in respondent RTC’s 19 May 2008 order, it stands to reason that jurisdiction over the case had yet to properly attach.  Applying the rule that “a case is deemed filed only upon payment of the docket fee regardless of the actual date of filing in court” in the landmark case of Manchester Development Corporation v. Court of Appeals, this Court ruled that jurisdiction over any case is acquired only upon the payment of the prescribed docket fee which is both mandatory and jurisdictional.  To temper said ruling, the Court subsequently issued the following guidelines in Sun Insurance Office, Ltd. v. Hon. Maximiano Asuncion, viz.:

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.

True to the foregoing guidelines, respondent RTC admitted R-II Builder’s Amended and Supplemental Complaint and directed the assessment and payment of the appropriate docket fees in the order dated 19 May 2008.  Rather than complying with said directive, however, R-II Builders manifested its intent to evade payment of the correct docket fees by withdrawing its Amended and Supplemental Complaint and, in lieu thereof, filed its Second Amended Complaint which deleted its cause of action for accounting and conveyance of title to and/or possession of the entire Asset Pool, reduced its claim for attorney’s fees, sought its appointment as Receiver and prayed for the liquidation and distribution of the Asset Pool.  In upholding the admission of said Second Amended Complaint in respondent RTC’s assailed 3 March 2009 Order, however, the CA clearly lost sight of the fact that a real action was ensconced in R-II Builders’ original complaint and that the proper docket fees had yet to be paid in the premises.  Despite the latter’s withdrawal of its Amended and Supplemental Complaint, it cannot, therefore, be gainsaid that respondent RTC had yet to acquire jurisdiction over the case for non-payment of the correct docket fees.

In the 15 February 2011 Resolution issued in the case of David Lu v. Paterno Lu Ym, Sr., this Court, sitting En Banc, had occasion to rule that an action for declaration of nullity of share issue, receivership and corporate dissolution is one where the value of the subject matter is incapable of pecuniary estimation.  Subsequent to the trial court’s rendition of a decision on the merits declared to be immediately executory and the CA’s denial of their application for a writ of preliminary injunction and/or temporary restraining order to enjoin enforcement of said decision, the defendants questioned the sufficiency of the docket fees paid a quo which supposedly failed take into consideration the value of the shares as well as the real properties involved for which the plaintiff additionally caused notices of lis pendens to be annotated.  Finding that defendants were already estopped in questioning the jurisdiction of the trial court on the ground of non-payment of the correct docket fees, the Court discounted intent to defraud the government on the part of the plaintiff who can, at any rate, be required to pay the deficiency which may be considered a lien on the judgment that may be rendered, without automatic loss of the jurisdiction already acquired, in the first instance, by the trial court.

The factual and legal milieus of the case at bench could not, however, be more different.  While R-II Builders styled its original complaint and Amended and Supplemental Complaint as one primarily for the resolution and/or declaration of the DAC, it simultaneously and unmistakably prayed for the conveyance, possession and control of the Asset Pool.  Alongside the fact that HGC has consistently questioned the sufficiency of the docket fees paid by R-II Builders, estoppel cannot be said to have set in since, the lapse of more than five years from the commencement of the complaint notwithstanding, it appears that the case has yet to be tried on the merits.  Having admitted that its original complaint partook the nature of a real action and having been directed to pay the correct docket fees for its Amended and Supplemental Complaint, R-II Builders is, furthermore, clearly chargeable with knowledge of the insufficiency of the docket fees it paid.   Unmistakably manifesting its intent to evade payment of the correct docket fees, moreover, R-II Builders withdrew its Amended and Supplemental Complaint after its admission and, in lieu thereof, filed its’ Second Amended Complaint on the ground that said earlier pleading cannot be considered admitted in view of its non-payment of the docket and other fees it was directed to pay.  In so doing, however, R-II Builders  conveniently overlooked the fact that the very same argument could very well apply to its original complaint for which – given its admitted nature as a real action – the correct docket fees have also yet to be paid.

The importance of filing fees cannot be over-emphasized for they are intended to take care of court expenses in the handling of cases in terms of costs of supplies, use of equipment, salaries and fringe benefits of personnel, and others, computed as to man-hours used in the handling of each case.  The payment of said fees, therefore, cannot be made dependent on the result of the action taken without entailing tremendous losses to the government and to the judiciary in particular.  For non-payment of the correct docket fees which, for real actions, should be computed on the basis of the assessed value of the property, or if there is none, the estimated value thereof as alleged by the claimant, respondent RTC should have denied admission of R-II Builders’ Second Amended Complaint and ordered the dismissal of the case.  Although a catena of decisions rendered by this Court eschewed the application of the doctrine laid down in the Manchester case, said decisions had been consistently premised on the willingness of the party to pay the correct docket fees and/or absence of intention to evade payment of the correct docket fees.  This cannot be said of R-II Builders which not only failed to pay the correct docket fees for its original complaint and Amended and Supplemental Complaint but also clearly evaded payment of the same by filing its Second Amended Complaint.

By itself, the propriety of admitting R-II Builders’ Second Amended Complaint is also cast in dubious light when viewed through the prism of the general prohibition against amendments intended to confer jurisdiction where none has been acquired yet.  Although the policy in this jurisdiction is to the effect that amendments to pleadings are favored and liberally allowed in the interest of justice, amendment is not allowed where the court has no jurisdiction over the original complaint and the purpose of the amendment is to confer jurisdiction upon the court.  Hence, with jurisdiction over the case yet to properly attach, HGC correctly fault the CA for upholding respondent RTC’s admission of R-II Builders’ Second Amended Complaint despite non-payment of the docket fees for its original complaint and Amended and Supplemental Complaint as well as the clear intent to evade payment thereof.

With the determination  of the jurisdictional necessity of the dismissal of the complaint of R-II Builders docketed as Civil Case No. 05-113407, first before Br. 24 and later before Br. 22 both of the RTC of Manila, we no longer find any reason to go into a discussion of the remaining issues HGC proffers for resolution.  In view, particularly, of its non-acquisition of jurisdiction over the case, respondent RTC clearly had no authority to grant the receivership sought by R-II Builders.  It needs pointing out though that the prayer for receivership clearly indicates that the R-II Builders sought the transfer of possession of property consisting of the assets of the JVA from HGC to the former’s named Receiver.  As already noted, said transfer of possession was sought by respondent R-II Builders since the very start, overtly at the first two attempts, covertly in the last, the successive amendments betraying the deft maneuverings to evade payment of the correct docket fees.  Home Guaranty Corporation vs. R-II Builders, Inc. and National Housing Authority, G.R. No. 192649, March 9, 2011.

Jurisdiction; jurisdiction over unlawful detainer case determined by allegations of complaint.  Wilfredo points out that the MTC has no jurisdiction to hear and decide the case since it involved tenancy relation which comes under the jurisdiction of the DARAB.  But the jurisdiction of the court over the subject matter of the action is determined by the allegations of the complaint.  Besides, the records show that Wilfredo failed to substantiate his claim that he was a tenant of the land.  The MTC records show that aside from the assertion that he is a tenant, he did not present any evidence to prove the same.  To consider evidence presented only during appeal is offensive to the idea of fair play.

The remaining question is the nature of the action based on the allegations of the complaint.  The RTC characterized it as an action for forcible entry, Wilfredo having entered the property and taken over from widow Emiliana on the sly.  The problem with this characterization is that the complaint contained no allegation that the Dionisios were in possession of the property before Wilfredo occupied it either by force, intimidation, threat, strategy, or stealth, an element of that kind of eviction suit.  Nowhere in the recitation of the amended complaint did the Dionisios assert that they were in prior possession of the land and were ousted from such possession by Wilfredo’s unlawful occupation of the property.

Is the action one for unlawful detainer?  An action is for unlawful detainer if the complaint sufficiently alleges the following: (1) initially, the defendant has possession of property by contract with or by tolerance of the plaintiff; (2) eventually, however, such possession became illegal upon plaintiff’s notice to defendant, terminating the latter’s right of possession; (3) still, the defendant remains in possession, depriving the plaintiff of the enjoyment of his property; and (4) within a year from plaintiff’s last demand that defendant vacate the property, the plaintiff files a complaint for defendant’s ejectment.  If the defendant had possession of the land upon mere tolerance of the owner, such tolerance must be present at the beginning of defendant’s possession.

Here, based on the allegations of the amended complaint, the Dionisios allowed Emiliana, tenant Romualdo’s widow, to stay on the land for the meantime and leave when asked to do so.  But, without the knowledge or consent of the Dionisios, she sold her “right of tenancy” to Wilfredo.  When the Dionisios visited the land in April 2002 and found Wilfredo there, they demanded that he leave the land.  They did so in writing on April 22, 2002 but he refused to leave.  The Dionisios filed their eviction suit within the year.  Spouses Vicente Dionisio and Anita Dionisio v. Wilfredo Linsangan, G.R. No. 178159, March 2, 2011.

Jurisdiction; real actions.  In upholding the foregoing order as well as its affirmance in respondent RTC’s 29 September 2009 order, the CA ruled that the case – being one primarily instituted for the resolution/nullification of the DAC – involved an action incapable of pecuniary estimation.  While it is true, however, that R-II Builder’s continuing stake in the Asset Pool is “with respect only to its residual value after payment of all the regular SMPPCs holders and the Asset Pool creditors”, the CA failed to take into account the fact that R-II Builders’ original complaint and Amended and Supplemental Complaint both interposed causes of action for conveyance and/or recovery of possession of the entire Asset Pool.  Indeed, in connection with its second cause of action for appointment as trustee in its original complaint, R-II Builders distinctly sought the conveyance of the entire Asset Pool which it consistently estimated to be valued at P5,919,716,618.62 as of 30 June 2005.  In its opposition to HGC’s motion to dismiss, R-II Builders even admitted that the case is a real action as it affects title to or possession of real property or an interest therein. With R-II Builders’ incorporation of a cause of action for conveyance of title to and/or possession of the entire Asset Pool in its Amended and Supplemental Complaint, on the other hand, no less than respondent RTC, in its 19 May 2008 order, directed the assessment and payment of docket fees corresponding to a real action.

Admittedly, this Court has repeatedly laid down the test in ascertaining whether the subject matter of an action is incapable of pecuniary estimation by determining the nature of the principal action or remedy sought.  While a claim is, on the one hand, considered capable of pecuniary estimation if the action is primarily for recovery of a sum of money, the action is considered incapable of pecuniary estimation where the basic issue is something other than the right to recover a sum of money, the money claim being only incidental to or merely a consequence of, the principal relief sought.  To our mind, the application of foregoing test does not, however, preclude the further classification of actions into personal actions and real action, for which appropriate docket fees are prescribed.  In contrast to personal actions where the plaintiff seeks the recovery of personal property, the enforcement of a contract, or the recovery of damages, real actions are those which affect title to or possession of real property, or interest therein.  While personal actions should be commenced and tried where the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, or in the case of a non-resident defendant where he may be found, at the election of the plaintiff, the venue for real actions is the court of the place where the real property is located.

Although an action for resolution and/or the nullification of a contract, like an action for specific performance, fall squarely into the category of actions where the subject matter is considered incapable of pecuniary estimation, we find that the causes of action for resolution and/or nullification of the DAC was erroneously isolated by the CA from the other causes of action alleged in R-II Builders’ original complaint and Amended and Supplemental Complaint which prayed for the conveyance and/or transfer of possession of the Asset Pool.  In Gochan v. Gochan, this Court held that an action for specific performance would still be considered a real action where it seeks the conveyance or transfer of real property, or ultimately, the execution of deeds of conveyance of real property.  More to the point is the case of Ruby Shelter Builders and Realty Development Corporation v. Hon. Pablo C. Formaran III where, despite the annulment of contracts sought in the complaint, this Court upheld the directive to pay additional docket fees corresponding to a real action in the following wise, to wit:

x x x [I]n Siapno v. Manalo, the Court disregarded the title/denomination of therein plaintiff Manalo’s amended petition as one for Mandamus with Revocation of Title and Damages; and adjudged the same to be a real action, the filing fees for which should have been computed based on the assessed value of the subject property or, if there was none, the estimated value thereof. The Court expounded in Siapno that:

In his amended petition, respondent Manalo prayed that NTA’s sale of the property in dispute to Standford East Realty Corporation and the title issued to the latter on the basis thereof, be declared null and void. In a very real sense, albeit the amended petition is styled as one for “Mandamus with Revocation of Title and Damages”, it is, at bottom, a suit to recover from Standford the realty in question and to vest in respondent the ownership and possession thereof. In short, the amended petition is in reality an action in res or a real action. Our pronouncement in Fortune Motors (Phils.), Inc. vs. Court of Appeals is instructive. There, we said:

A prayer for annulment or rescission of contract does not operate to efface the true objectives and nature of the action which is to recover real property. (Inton, et al., v. Quintan, 81 Phil. 97, 1948)

An action to annul a real estate mortgage foreclosure sale is no different from an action to annul a private sale of real property. (Muñoz v. Llamas, 87 Phil. 737, 1950).

While it is true that petitioner does not directly seek the recovery of title or possession of the property in question, his action for annulment of sale and his claim for damages are closely intertwined with the issue of ownership of the building which, under the law, is considered immovable property, the recovery of which is petitioner’s primary objective. The prevalent doctrine is that an action for the annulment or rescission of a sale of real property does not operate to efface the fundamental and prime objective and nature of the case, which is to recover said real property. It is a real action.

Granted that R-II Builders is not claiming ownership of the Asset Pool because its continuing stake is, in the first place, limited only to the residual value thereof, the conveyance and/or transfer of possession of the same properties sought in the original complaint and Amended and Supplemental Complaint both presuppose a real action for which appropriate docket fees computed on the basis of the assessed or estimated value of said properties should have been assessed and paid.   In support of its original complaint’s second cause of action for appointment as trustee and conveyance of the properties in the Asset Pool, R-II Builders distinctly alleged as follows:

5.12. As the Court-appointed Trustee, R-II Builders shall have and exercise the same powers, rights and duties as if [it] had been originally appointed, having the principal duty of redeeming and buying back the Regular SMPPC’s and thereafter liquidating the Asset Pool, which are also the end goals of the Agreement.

5.12.1. R-II Builders, as the Trustee, shall have the power and right to invest, transfer, convey or assign any of the assets of the Asset Pool, whether funds, receivables, real or personal property, in exchange for shares of stocks, bonds, securities, real or personal properties of any kind, class or nature, provided that any such investment, transfer, conveyance or assignment shall not impair the value of the Asset Pool.

5.12.2. R-II Builders, as the Trustee, shall have the power and right to sell, change, assign or otherwise dispose of any stocks, bonds, securities, real or personal properties or other assets constituting the Asset Pool.

5.12. 3. R-II Builders, as the Trustee, shall have the power and right to enter into lease agreements as lessor or any other related contract for the benefit of the Asset Pool; and

5.12.4. It is understood that the aforecited powers and rights of R-II Builders as the court-appointed Trustee, are non-exclusive; and is deemed to include all the rights and powers necessary and incidental to achieve the goals and objectives of the Agreement.

From the foregoing allegations in its original complaint, it cannot be gainsaid that R-II Builders was unquestionably seeking possession and control of the properties in the Asset Pool which predominantly consisted of real properties.  Having admitted that “the case is a real action as it affects title to or possession of real property or (an) interest therein”, R-II Builders emphasized the real nature of its action by seeking the grant of the following main reliefs in the Amended and Supplemental Complaint it subsequently filed, to wit:

5.  After trial on the merits, render judgment:

(i) Declaring the annulment of the Deed of Assignment and conveyance executed by PDB in favor of HGC; or in the alternative, declaring the nullity of the said instrument;

(ii) Appointing R-II Builders as the Trustee of the Asset Pool Properties, with powers and responsibilities including but not limited to those stated in 5.12.1, 5.12.2, 5.12.3 and 5.12.4 herein and those spelled out in the Re-Stated Smokey Mountain Asset Pool Formation Trust Agreement;

(iii) Ordering HGC to render an accounting of all properties of the Asset Pool transferred thereto under the Deed of Assignment and Conveyance and thereafter convey title to and/or possession of the entire Asset Pool to R-II Builders as the Trustee thereof which assets consist of, but is not limited to the following:

(a105 parcels of land comprising the Smokey Mountain Site, and, the Reclamation Area, consisting of the 539,471.47 square meters, and all the buildings and improvements thereon, with their corresponding certificates of title;

(b) shares of stock of Harbour Center Port Terminal, Inc. which are presently registered in the books of the said company in the name of PDB for the account of the Smokey Mountain Asset Pool; and

(c) other documents as listed in Annex E of the Contract of Guaranty.

(iv) Ordering NHA to pay the Asset Pool the amount of Php1,803,729,757.88 including the direct and indirect cost thereon as may be found by this Honorable Court to be due thereon;

(v) Making the injunction permanent;

(vi) Ordering HGC and the NHA to pay Attorney’s fees in the amount of P2,000,000 and the costs of suit.

Home Guaranty Corporation vs. R-II Builders, Inc. and National Housing Authority, G.R. No. 192649, March 9, 2011.

Mandamus; allegations in petition.  Finally, the Alagars assert that PNB availed of the wrong remedy when it filed a special civil action of certiorari before the CA rather than one of mandamus to compel the RTC to give due course to its notice of appeal after the latter held that its pro forma motion for reconsideration did not toll the period of appeal which had then already elapsed

But a reading of PNB’s allegations in its petition in CA-G.R. SP 71116 shows that its action was not only for certiorari and prohibition but also for mandamus.  The bank alleged that by its whimsical, capricious and arbitrary actions the RTC deprived the PNB of its appeal, leaving it with no other plain, speedy, and adequate remedy in the ordinary course of law.  The PNB petition also specifically prayed the CA to direct the trial court to give due course to its appeal.  Following the rule that the nature of an action is determined by the allegations of the pleading and the character of the relief sought, it is unmistakable that CA-G.R. SP 71116 was also a petition for mandamusSpouses Antonio F. Alagar and Aurora Alagar v. Philippine National Bank, G.R. No. 171870, March 16, 2011.

Mandamus; proper remedy to compel issuance of writ of possession.  We rule that mandamus is a proper remedy to compel the issuance of a writ of possession.  The purpose of mandamus is to compel the performance of a ministerial duty.  A ministerial act is “one which an officer or tribunal performs in a given state of facts, in a prescribed manner, in obedience to the mandate of legal authority, without regard to or the exercise of his own judgment upon the propriety or impropriety of the act done.”

The issuance of a writ of possession is outlined in Section 7 of Act No. 3135, as amended by Act No. 4118, which provides:

SEC. 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of First Instance of the province or place where the property or any part thereof is situated, to give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without complying with the requirements of [this] Act. Such petition shall be made under oath and filed in form of an ex parte motion x x x and the court shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall execute said order immediately.

During the period of redemption, the mortgagee is entitled to a writ of possession upon depositing the approved bond.  When the redemption period expires without the mortgagor exercising his right of redemption, the mortgagor is deemed to have lost all interest over the foreclosed property, and the purchaser acquires absolute ownership of the property.   The purchaser’s right is aptly described thus:

Consequently, the purchaser, who has a right to possession after the expiration of the redemption period, becomes the absolute owner of the property when no redemption is made.  In this regard, the bond is no longer needed.  The purchaser can demand possession at any time following the consolidation of ownership in his name and the issuance to him of a new TCT.  After consolidation of title in the purchaser’s name for failure of the mortgagor to redeem the property, the purchaser’s right to possession ripens into the absolute right of a confirmed owner.  At that point, the issuance of a writ of possession, upon proper application and proof of title becomes merely a ministerial function.  Effectively, the court cannot exercise its discretion.

Therefore, the issuance by the RTC of a writ of possession in favor of the respondent in this case is proper.  We have consistently held that the duty of the trial court to grant a writ of possession in such instances is ministerial, and the court may not exercise discretion or judgment x x x

With the consolidated title, the purchaser becomes entitled to a writ of possession and the trial court has the ministerial duty to issue such writ of possession. Thus, “the remedy of mandamus lies to compel the performance of [this] ministerial duty.”   Spouses Fernando and Angelina Edralin v. Philippine Veterans Bank, G.R. No. 168523, March 9, 2011.

Mediation; sanction for non-appearance.  A.M. No. 01-10-5-SC-PHILJA dated October 16, 2001, otherwise known as the Second Revised Guidelines for the Implementation of Mediation Proceedings, was issued pursuant to par. (5), Section 5, Article VII of the 1987 Constitution mandating this Court to promulgate rules providing for a simplified and inexpensive procedure for the speedy disposition of cases. Also, Section 2(a), Rule 18 of the 1997 Rules of Civil Procedure, as amended, requires the courts to consider the possibility of an amicable settlement or of submission to alternative modes of resolution for the early settlement of disputes so as to put an end to litigations. The provisions of A.M. No. 01-10-5-SC-PHILJA pertinent to the case at bench are as follows:

9. Personal appearance/Proper authorizations

Individual parties are encouraged to personally appear for mediation. In the event they cannot attend, their representatives must be fully authorized to appear, negotiate and enter into a compromise by a Special Power of Attorney. A corporation shall, by board resolution, fully authorize its representative to appear, negotiate and enter into a compromise agreement.

12. Sanctions

Since mediation is part of Pre-Trial, the trial court shall impose the appropriate sanction including but not limited to censure, reprimand, contempt and such other sanctions as are provided under the Rules of Court for failure to appear for pre-trial, in case any or both of the parties absent himself/themselves, or for abusive conduct during mediation proceedings. [Underscoring supplied]

To reiterate, A.M. No. 01-10-5-SC-PHILJA regards mediation as part of pre-trial where parties are encouraged to personally attend the proceedings. The personal non-appearance, however, of a party may be excused only when the representative, who appears in his behalf, has been duly authorized to enter into possible amicable settlement or to submit to alternative modes of dispute resolution. To ensure the attendance of the parties, A.M. No. 01-10-5-SC-PHILJA specifically enumerates the sanctions that the court can impose upon a party who fails to appear in the proceedings which includes censure, reprimand, contempt, and even dismissal of the action in relation to Section 5, Rule 18 of the Rules of Court.  The respective lawyers of the parties may attend the proceedings and, if they do so, they are enjoined to cooperate with the mediator for the successful amicable settlement of disputes so as to effectively reduce docket congestion.

Although the RTC has legal basis to order the dismissal of Civil Case No. 13-2007, the Court finds this sanction too severe to be imposed on the petitioner where the records of the case is devoid of evidence of willful or flagrant disregard of the rules on mediation proceedings. There is no clear demonstration that the absence of petitioner’s representative during mediation proceedings on March 1, 2008 was intended to perpetuate delay in the litigation of the case. Neither is it indicative of lack of interest on the part of petitioner to enter into a possible amicable settlement of the case.

The Court notes that Manalang was not entirely at fault for the cancellation and resettings of the conferences. Let it be underscored that respondents’ representative and counsel, Atty. Miguel, came late during the January 19 and February 9, 2008 conferences which resulted in their cancellation and the final resetting of the mediation proceedings to March 1, 2008. Considering the circumstances, it would be most unfair to penalize petitioner for the neglect of her lawyer.

Assuming arguendo that the trial court correctly construed the absence of Manalang on March 1, 2008 as a deliberate refusal to comply with its Order or to be dilatory, it cannot be said that the court was powerless and virtually without recourse. Indeed, there are other available remedies to the court a quo under A.M. No. 01-10-5-SC-PHILJA, apart from immediately ordering the dismissal of the case. If Manalang’s absence upset the intention of the court a quo to promptly dispose the case, a mere censure or reprimand would have been sufficient for petitioner’s representative and her counsel so as to be informed of the court’s intolerance of tardiness and laxity in the observation of its order. By failing to do so and refusing to resuscitate the case, the RTC impetuously deprived petitioner of the opportunity to recover the land which she allegedly paid for.

Unless the conduct of the party is so negligent, irresponsible, contumacious, or dilatory as for non-appearance to provide substantial grounds for dismissal, the courts should consider lesser sanctions which would still achieve the desired end.  The Court has written “inconsiderate dismissals, even if without prejudice, do not constitute a panacea nor a solution to the congestion of court dockets, while they lend a deceptive aura of efficiency to records of the individual judges, they merely postpone the ultimate reckoning between the parties.  In the absence of clear lack of merit or intention to delay, justice is better served by a brief continuance, trial on the merits, and final disposition of the cases before the court.  Linda M. Chan Kent v. Dionesio C. Micarez, et al., G.R. No. 185758, March 9, 2011.

Motions; motion for reconsideration not pro forma.  The Alagars fail to show any reversible error in the CA’s decision. That court’s finding that PNB’s motion for reconsideration was not pro forma and, therefore, tolled the running of PNB’s period to appeal, is supported by the evidence on record.  The motion for reconsideration specified the RTC’s findings and conclusions in its decision that PNB thought to be contrary to law.  The latter even raised new arguments, not previously considered by the trial court, which even the latter recognized in its assailed March 25, 2002 order.  From all indications, the motion for reconsideration complied with requirements of Sections 1 and 2, Rule 37 of the Rules of Court.  Thus, it was grave abuse of discretion for the trial court to have simply concluded that the motion was pro forma and did not toll the running of the period to appeal.  The RTC should have given due course to PNB’s appeal.  Spouses Antonio F. Alagar and Aurora Alagar v. Philippine National Bank, G.R. No. 171870, March 16, 2011.

Petition for Review; motion for extension; Court of Appeals’ discretion to grant or not to grant motion for extension should be exercised wisely and prudently.  Although it is within the CA’s discretion to grant or not to grant a motion for extension, such discretion should be exercised wisely and prudently.  The rules regulating the filing of motions for extension of time to file certain pleadings are intended to promote the speedy disposition of cases in the interest of justice, not throw out such pleadings on pure technicality.

Here, on March 15, 2006 petitioner heirs filed their motion for extension of 30 days (counted from March 21 when the original period was to run out) within which to file their petition.  If the CA would want to deny that extension or shorten it to only 15 days up to April 5, 2006, it had technically at least 20 days (from March 15 to April 4) within which to so warn petitioners that they might have a chance to finish up and file their petition.  Yet, it did not.  While the parties have no right to expect the CA to grant their motion for extension, they have a right to expect reasonableness from it.

Technically the CA waited 44 days up to April 28, 2006 before acting on the motion that petitioners filed on March 15, 2006.  The CA knew, when it reduced to only 15 days the extension asked of it, that such reduced extension had already come to pass 23 days earlier on April 5, 2006.  Surely, the CA did not expect petitioners to still be able to cope with the reduced extension.  Since the rules allow the CA to grant an extra 15-day extension “for the most compelling reason,” the CA ought to have given petitioners reasonable notice that it did not regard its ground sufficiently compelling.  The CA gave petitioner heirs absolutely no chance to file a timely petition. What is more, when the CA acted on the motion for extension on April 28, 2006 the petition was already at hand, having been filed earlier on April 20.  The CA cannot pretend that it had been waiting with bated breath to have a look at the petition and that, consequently, it could only grant a shorter extension for its filing.  Indeed, the CA did not dismiss the petition outright when it did not get the same by April 5, its desired deadline.  The CA got the petition on April 20, 2006 but waited eight days more or until April 28, 2006 before looking at it.  So what was the point in its denying the longer extension when it was not ready to act promptly on the petition?  Heirs of Marilou K. Santiago, et al. v. Alfonso Aguila, G.R. No. 174034, March 9, 2011.

Pleading; effect of amendment of complaint on cause of action.  An amended complaint that changes the plaintiff’s cause of action is technically a new complaint.  Consequently, the action is deemed filed on the date of the filing of such amended pleading, not on the date of the filing of its original version.  Thus, the statute of limitation resumes its run until it is arrested by the filing of the amended pleading.  The Court acknowledges, however, that an amendment which does not alter the cause of action but merely supplements or amplifies the facts previously alleged, does not affect the reckoning date of filing based on the original complaint.  The cause of action, unchanged, is not barred by the statute of limitations that expired after the filing of the original complaint.

Here, the original complaint alleges that the Dionisios bought the land from Cruz on September 30, 1989; that Romualdo used to be the land’s tenant; that when he died, the Dionisios allowed his widow, Emiliana, to stay under a promise that she would leave the land upon demand; that in April 2002 the Dionisios discovered on visit to the land that Emiliana had left it and that Wilfredo now occupied it under a claim that he bought the right to stay from Emiliana under a “Kasunduan ng Bilihan ng Karapatan;” that the Dionisios did not know of and gave no consent to this sale which had not been annotated on their title; that the Dionisios verbally told Wilfredo to leave the property by April 31, 2002; that their lawyer reiterated such demand in writing on April 22, 2002; that Wilfredo did not heed the demand; that the Dionisios wanted to get possession so they could till the land and demolish Wilfredo’s house on it; that Wilfredo did not give the Dionisios’ just share in the harvest; and that the Dionisios were compelled to get the services of counsel for P100,000.00.

The amended complaint has essentially identical allegations.  The only new ones are that the Dionisios allowed Emiliana, Romualdo’s widow to stay “out of their kindness, tolerance, and generosity;” that they went to the land in April 2002, after deciding to occupy it, to tell Emiliana of their plan; that Wilfredo cannot deny that Cruz was the previous registered owner and that he sold the land to the Dionisios; and that a person occupying another’s land by the latter’s tolerance or permission, without contract, is bound by an implied promise to leave upon demand, failing which a summary action for ejectment is the proper remedy.

To determine if an amendment introduces a different cause of action, the test is whether such amendment now requires the defendant to answer for a liability or obligation which is completely different from that stated in the original complaint.  Here, both the original and the amended complaint required Wilfredo to defend his possession based on the allegation that he had stayed on the land after Emiliana left out of the owner’s mere tolerance and that the latter had demanded that he leave.  Indeed, Wilfredo did not find the need to file a new answer.  Spouses Vicente Dionisio and Anita Dionisio v. Wilfredo Linsangan, G.R. No. 178159, March 2, 2011.

Procedural rules; exceptions meriting relaxation of rules.  Moreover, there are exceptions that have been previously considered by the Court as meriting a relaxation of the rules in order to serve substantial justice. These are:  (1) matters of life, liberty, honor or property; (2) the existence of special or compelling circumstances; (3) the merits of the case; (4) a cause not entirely attributable to the fault or negligence of the party favored by the suspension of the rules; (5) a lack of any showing that the review sought is merely frivolous and dilatory; and (6) the other party will not be unjustly prejudiced thereby.  We find that Danilo’s situation merits a relaxation of the rules since special circumstances are involved; to determine if his allegation were true would allow a final resolution of the case.  Danilo L. Parel v. Heirs of Simeon Prudencio, G.R. No. 192217, March 2, 2011.

Procedural rules; policy for cases to be decided on merits rather than on technicalities.  It bears emphasis that the subject matter of the complaint is a valuable parcel of land measuring 328 square meters and that petitioner had allegedly spent a lot of money not only for the payment of the docket and other filing fees but also for the extra-territorial service of the summons to the respondents who are now permanent residents of the U.S.A. Certainly, petitioner stands to lose heavily on account of technicality. Even if the dismissal is without prejudice, the refiling of the case would still be injurious to petitioner because she would have to pay again all the litigation expenses which she previously paid for. The Court should afford party-litigants the amplest opportunity to enable them to have their cases justly determined, free from constraints of technicalities.  Technicalities should take a backseat against substantive rights and should give way to the realities of the situation. Besides, the petitioner has manifested her interest to pursue the case through the present petition. At any rate, it has not been shown that a remand of the case for trial would cause undue prejudice to respondents.

In the light of the foregoing, the Court finds it just and proper that petitioner be allowed to present her cause of action during trial on the merits to obviate jeopardizing substantive justice. Verily, the better and more prudent course of action in a judicial proceeding is to hear both sides and decide the case on the merits instead of disposing the case by technicalities. What should guide judicial action is the principle that a party-litigant is to be given the fullest opportunity to establish the merits of his complaint or defense rather than for him to lose life, liberty or property on technicalities.  The ends of justice and fairness would best be served if the issues involved in the case are threshed out in a full-blown trial. Trial courts are reminded to exert efforts to resolve the matters before them on the merits and to adjudge them accordingly to the satisfaction of the parties, lest in hastening the proceedings, they further delay the resolution of the cases.  Linda M. Chan Kent v. Dionesio C. Micarez, et al., G.R. No. 185758, March 9, 2011.

Procedural rules; purpose.  Procedural rules are intended to facilitate the administration of justice, not frustrate it.  It is always better that a case is decided on the merits rather than disposed of because of procedural infirmities.  Considering that the case involves tenancy relations and possession of agricultural landholding and that PARAD and DARAB have made conflicting findings, a review of the case by the CA was clearly in order.  Heirs of Marilou K. Santiago, et al. v. Alfonso Aguila, G.R. No. 174034, March 9, 2011.

Writ of execution; effect of compliance with writ on petition in higher court.  The Alagars contend that the issue of whether the RTC validly issued a writ of execution in the case had become moot since PNB willingly obeyed the writ, returned the General Luna title to the Alagars, and paid them the damages that the RTC awarded in its decision.  Going further, the Alagars argue that the full implementation of the writ foreclosed any question concerning the validity of the decision itself.

But the execution of a judgment pending an action in a higher court essentially challenging its finality cannot be deemed an abandonment of that action.  The rules grant parties the right to question by special civil actions those orders and rulings that inferior courts issue with grave abuse of discretion.  That the PNB complied with the writ of execution after its several attempts to stop it cannot be deemed a voluntary abandonment of its action before the CA.  PNB had no choice but to obey the RTC orders, given that the CA did not then deem it appropriate to issue a restraining order.  And PNB did not relent in pursuing its action before the CA.  Besides, the Alagars did not raise this issue of estoppel before the CA.  Consequently, they cannot raise the same for the first time before the Court.  Spouses Antonio F. Alagar and Aurora Alagar v. Philippine National Bank, G.R. No. 171870, March 16, 2011.

Writ of execution; instances where writ may be appealed.  It is true that Danilo should have brought to the Court’s attention the date he actually left the subject premises at an earlier time.  The RTC is also correct in ruling that the judgment involved was already final and executory. However, it would be inequitable to order him to pay monthly rentals “until he actually vacates” when it has not been determined when he actually vacated the ground floor of Simeon’s house. He would be paying monthly rentals indefinitely.  The RTC should have determined via hearing if Danilo’s allegation were true and accordingly modified the period Danilo is to be held accountable for monthly rentals.

Unjustified delay in the enforcement of a judgment sets at naught the role of courts in disposing justiciable controversies with finality.  Once a judgment becomes final and executory, all the issues between the parties are deemed resolved and laid to rest. All that remains is the execution of the decision which is a matter of right.  Banaga v. Majaducon, however, enumerates the instances where a writ of execution may be appealed:

1)     the writ of execution varies the judgment;

2)      there has been a change in the situation of the parties making execution inequitable or unjust;

3)      execution is sought to be enforced against property exempt from execution;

4)      it appears that the controversy has never been subject to the judgment of the court;

5)      the terms of the judgment are not clear enough and there remains room for interpretation thereof; or

6)     it appears that the writ of execution has been improvidently issued, or that it is defective in substance, or is issued against the wrong party, or that the judgment debt has been paid or otherwise satisfied, or the writ was issued without authority;

In these exceptional circumstances, considerations of justice and equity dictate that there be some mode available to the party aggrieved of elevating the question to a higher court. That mode of elevation may be either by appeal (writ of error or certiorari), or by a special civil action of certiorari, prohibition, or mandamus.

The instant case falls under one of the exceptions cited above. The fact that Danilo has left the property under dispute is a change in the situation of the parties that would make execution inequitable or unjust.  Danilo L. Parel v. Heirs of Simeon Prudencio, G.R. No. 192217, March 2, 2011.

OTHER PROCEEDINGS

Expropriation; commissioners to report on just compensation; nature of commissioner’s duties and functions.  Cecilio’s last source of authority to collect payment from the proceeds of the expropriation is the SPA executed on 18 October 1996 by the Hernandezes in favor of Cecilio as their “true and lawful” attorney with respect to the expropriation of the Hernandez property.  At the outset, it must be underscored that the SPA did not specify the compensation of Cecilio as attorney-in-fact of the Hernandezes.

The SPA, however, must be appreciated in the light of the fact that Cecilio was appointed and acted as appraisal commissioner in the expropriation case under the provisions of Section 5, Rule 67 of the Rules of Court, which provides:

SEC. 5. Ascertainment of compensation. — Upon the rendition of the order of expropriation, the court shall appoint not more than three (3) competent and disinterested persons as commissioners to ascertain and report to the court the just compensation for the property sought to be taken.   The order of appointment shall designate the time and place of the first session of the hearing to be held by the commissioners and specify the time within which their report shall be submitted to the court. (Emphasis ours).

The commissioner to be appointed is specifically required to be disinterested.  As defined, such person must be free from bias, prejudice or partiality.  The record of performance by Cecilio of his duties as commissioner shows: (1) Order dated 13 September 1996 appointing Cecilio and three others as court commissioners; (2) Agreement on the course of action of the commissioners appointed 13 September 1996 whereby respondent Cecilio signed as a court commissioner; (3) Appraisal Commission Report dated 10 January 1997 signed by respondent and his fellow court commissioners; (4) Dissenting Opinion on the Lone Minority Report dated 14 February 1997 signed by respondent and two other court commissioners; and (5) Decision dated 7 February 1997 which sets the fees of the court commissioners.

When Cecilio accepted the position as commissioner and proceeded to perform the duties of such commissioner until the completion of his mandate as such, he created a barrier that prevented his performance of his duties under the SPA.  Due to the nature of his duties and functions as commissioner, Cecilio became an officer of the court. As stated in Section 5, Rule 67 of the Rules of Court, the commissioner’s duty is to “ascertain and report to the court the just compensation for the property to be taken.” The undertaking of a commissioner is further stated under the rules, to wit:

SEC. 6. Proceedings by commissioners.—Before entering upon the performance of their duties, the commissioners shall take and subscribe an oath that they will faithfully perform their duties as commissioners, which oath shall be filed in court with the other proceedings in the case.  Evidence may be introduced by either party before the commissioners who are authorized to administer oaths on hearings before them, and the commissioners shall, unless the parties consent to the contrary, after due notice to the parties to attend, view and examine the property sought to be expropriated and its surroundings, and may measure the same, after which either party may, by himself or counsel, argue the case. The commissioners shall assess the consequential damages to the property not taken and deduct from such consequential damages the consequential benefits to be derived by the owner from the public use or purpose of the property taken, the operation of its franchise by the corporation or the carrying on of the business of the corporation or person taking the property.  But in no case shall the consequential benefits assessed exceed the consequential damages assessed, or the owner be deprived of the actual value of his property so taken.

Cecilio acted for the expropriation court.  He cannot be allowed to consider such action as an act for or in behalf of the defendant in the same case.  Cecilio could not have been a hearing officer and a defendant at the same time.  Indeed, Cecilio foisted fraud on both the Court and the Hernandezes when, after his appointment as commissioner, he accepted the appointment by the Hernandezes to “represent” and “sue for” them.  Cornelia M. Hernandez, substituted by Lourdes H. Castillo v. Cecilio F. Hernandez, G.R. No. 158576, March 9, 2011.

Extra-judicial foreclosure of mortgage; special power of attorney.  Moreover, the availability of extra-judicial foreclosure to a mortgagee depends upon the agreement of the contracting parties. Section 1 of Act No. 3135 provides:

Section 1.  When a sale is made under a special power inserted in or attached to any real-estate mortgage hereafter made as security for the payment of money or the fulfillment of any other obligation, the provisions of the following sections shall govern as to the manner in which the sale and redemption shall be effected, whether or not provision for the same is made in the power.  (Emphasis supplied.)

In the case at bar, paragraph (c) of the parties’ REM granted Veterans Bank the special power as attorney-in-fact of the petitioners to perform all acts necessary for the purpose of extrajudicial foreclosure under Act No. 3135.  Thus, there is no obstacle preventing Veterans Bank from availing itself of the remedy of extrajudicial foreclosure.  Spouses Fernando and Angelina Edralin v. Philippine Veterans Bank, G.R. No. 168523, March 9, 2011.

Writ of possession; non-prescription of purchaser’s right.  Petitioners assail the CA’s ruling that the issuance of a writ of possession does not prescribe. They maintain that Articles 1139, 1149, and 1150 of the Civil Code regarding prescriptive periods cover all kinds of action, which necessarily include the issuance of a writ of possession. Petitioners posit that, for purposes of the latter, it is the five-year prescriptive period provided in Article 1149 of the Civil Code which applies because Act No. 3135 itself did not provide for its prescriptive period. Thus, Veterans Bank had only five years from September 12, 1983, the date when the Certificate of Sale was issued in its favor, to move for the issuance of a writ of possession.

Respondent argues that jurisprudence has consistently held that a registered owner of the land, such as the buyer in an auction sale, is entitled to a writ of possession at any time after the consolidation of ownership.

We cannot accept petitioners’ contention.  We have held before that the purchaser’s right “to request for the issuance of the writ of possession of the land never prescribes.”  “The right to possess a property merely follows the right of ownership,” and it would be illogical to hold that a person having ownership of a parcel of land is barred from seeking possession thereof.  In Calacala v. Republic of the Philippines, the Republic was the highest bidder in the public auction but failed for a long period of time to execute an Affidavit of Consolidation and to seek a writ of possession.  Calacala insisted that, by such inaction, the Republic’s right over the land had prescribed, been abandoned or waived. The Court’s language in rejecting Calacala’s theory is illuminating:

[T]he Republic’s failure to execute the acts referred to by the petitioners within ten (10) years from the registration of the Certificate of Sale cannot, in any way, operate to restore whatever rights petitioners’ predecessors-in-interest had over the same.  For sure, petitioners have yet to cite any provision of law or rule of jurisprudence, and we are not aware of any, to the effect that the failure of a buyer in a foreclosure sale to secure a Certificate of Final Sale, execute an Affidavit of Consolidation of Ownership and obtain a writ of possession over the property thus acquired, within ten (10) years from the registration of the Certificate of Sale will operate to bring ownership back to him whose property has been previously foreclosed and sold.  x x x

x x x x

Moreover, with the rule that the expiration of the 1-year redemption period forecloses the obligors’ right to redeem and that the sale thereby becomes absolute, the issuance thereafter of a final deed of sale is at best a mere formality and mere confirmation of the title that is already vested in the purchaser. x x x

Moreover, the provisions cited by petitioners refer to prescription of actions.  An action is “defined as an ordinary suit in a court of justice, by which one party prosecutes another for the enforcement or protection of a right, or the prevention or redress of a wrong.”  On the other hand “[a] petition for the issuance of the writ, under Section 7 of Act No. 3135, as amended, is not an ordinary action filed in court, by which one party ‘sues another for the enforcement or protection of a right, or prevention or redress of a wrong.’  It is in the nature of an ex parte motion [in] which the court hears only one side.  It is taken or granted at the instance and for the benefit of one party, and without notice to or consent by any party adversely affected.  Accordingly, upon the filing of a proper motion by the purchaser in a foreclosure sale, and the approval of the corresponding bond, the writ of possession issues as a matter of course and the trial court has no discretion on this matter.”   Spouses Fernando and Angelina Edralin v. Philippine Veterans Bank, G.R. No. 168523, March 9, 2011.

EVIDENCE

Documentary evidence; interpretation of documents according to circumstances.  Section 13, Rule 130, Rules of Court on interpretation of an instrument provides:

SEC. 13. Interpretation according to circumstances – For the proper construction of an instrument, the circumstances under which it was made, including the situation of the subject thereof and of the parties to it, may be shown so that the judge may be placed in the position of those whose language he is to interpret.   (underscoring supplied)

A consideration of the circumstances under which Aragon’s letter-certifications were issued is thus in order.

Amarnani’s letter-request of August 21, 2000 for a conditional certification from Aragon was granted two days later when Aragon issued the letter-certification addressed to respondent.   Within that period, it could not have been possible for petitioner to even process  the application, given that Amarnani had not even complied with the requirements as he, himself, indicated in his letter-request to Aragon to “please tell [him] the requirements for the credit line so [he] c[ould] apply.”

The Distributorship Agreement between respondent and Keraj was forged on October 2, 2000 or 39 days after the issuance of the letter-certification, long enough for respondent to verify if indeed a bank guaranty was, to its impression, granted.

By respondent’s finance manager Leonora Armi Salvador’s testimony, upon receipt of the two letter-certifications, she concluded that they were bank guarantees considering their similarity with other bank guarantees in favor of respondent by other distributors; and she made  inquiries with petitioner only after Keraj defaulted in the payment of its obligation to respondent.

In light of the foregoing circumstances, petitioner could not have conveyed that it was issuing a bank guaranty in favor of Amarnani.

Respondent’s reliance on Aragon’s use of a “check writer,” a machine used to input a numerical or written value impression in the “payment amount field” of a check that is very difficult to alter, on the left side of each letter- certification, was misplaced, what prevails being the wordings of the letter-certifications. Bank of Commerce v. Goodman Fielder International Philippines, Inc., G.R. No. 191561, March 7, 2011.

Res gestae; nature and admissibility.  Further, the Court considers a res gestae Amalia’s recital of what she heard Alice utter when she came and rescued her.  Res gestae refers to statements made by the participants or the victims of, or the spectators to, a crime immediately before, during, or after its commission.  These statements are a spontaneous reaction or utterance inspired by the excitement of the occasion, without any opportunity for the declarant to fabricate a false statement.  An important consideration is whether there intervened, between the occurrence and the statement, any circumstance calculated to divert the mind and thus restore the mental balance of the declarant; and afford an opportunity for deliberation.  For spontaneous statements to be admitted in evidence, the following must concur: 1) the principal act, the res gestae, is a startling occurrence; 2) the statements were made before the declarant had time to contrive or devise; and 3) the statements concerned the occurrence in question and its immediately attending circumstances.

Here, Fallones’ act of forcing himself into Alice is a startling event.  And Amalia happened to be just outside his house when she heard Alice cry out “tama na, tama na!”  When Fallones opened the door upon Amalia’s incessant knocking, Alice came out from behind him, uttering “Amalia, may napkin na binigay si Romy o.”  The admissibility of Alice’s spontaneous statements rests on the valid assumption that they were spoken under circumstances where there had been no chance to contrive.  It is difficult to lie in an excited state and the impulsiveness of the expression is a guaranty of trustworthiness.  People of the Philippines v. Romy Fallones y Labana, G.R. No. 190341, March 16, 2011.

(Tito thanks Margarita R. Alias for her assistance in preparing this post.  This post will be updated to include additional March 2011 cases.)

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