November 2010 Philippine Supreme Court Decisions on Remedial Law

Here are selected November 2010 rulings of the Supreme Court of the Philippines on remedial law:

Civil Procedure

Appeal; argument raised for first time on appeal. As a last ditch effort, petitioner asserts that the property is a road right of way; thus, it cannot be subject of a writ of execution.  The argument must be rejected because it was raised for the first time in this petition.  In the trial court and the CA, petitioner’s arguments zeroed in on the alleged conjugal nature of the property.  It is well settled that issues raised for the first time on appeal and not raised in the proceedings in the lower court are barred by estoppel. Points of law, theories, issues, and arguments not brought to the attention of the trial court ought not to be considered by a reviewing court, as these cannot be raised for the first time on appeal.  To consider the alleged facts and arguments raised belatedly would amount to trampling on the basic principles of fair play, justice, and due process.  Evangeline D. Imani vs. Metroplitan Bank and Trust Company, G.R. No. 187023, November 17, 2010.

Appeal; argument raised for first time on appeal. The petitioners now claim that the Motion for Reconsideration, filed by the respondent on May 18, 1993 from the September 18, 1992 Order of the RTC, was filed out of time.  The petitioners make this claim to justify their contention that the subsequent rulings of the RTC, including the June 2, 1993 and October 1, 1993 Orders, are barred by res judicata.

We reject this belated claim as the petitioners raised this only for the first time on appeal, particularly, in their Memorandum.  In fact, the petitioners never raised this issue in the proceedings before the court a quo or in the present petition for review.

As a rule, a party who deliberately adopts a certain theory upon which the case is tried and decided by the lower court will not be permitted to change the theory on appeal.  Points of law, theories, issues and arguments not brought to the attention of the lower court need not be, and ordinarily will not be, considered by a reviewing court, as these cannot be raised for the first time at such late stage. It would be unfair to the adverse party who would have no opportunity to present further evidence material to the new theory, which it could have done had it been aware of it at the time of the hearing before the trial court.  Thus, to permit the petitioners in this case to change their theory on appeal would thus be unfair to the respondent and offend the basic rules of fair play, justice and due process.  Spouses Ernesto and Vicenta Topacio vs. Banco Filipino Savings and Mortgage Bank, G.R. No. 157644, November 17, 2010.

Appeal; findings of administrative agency. All told, Nacu was rightfully found guilty of grave misconduct, dishonesty, and conduct prejudicial to the best interest of the service, and penalized with dismissal from the service and its accessory penalties. The general rule is that where the findings of the administrative body are amply supported by substantial evidence, such findings are accorded not only respect but also finality, and are binding on this Court. It is not for the reviewing court to weigh the conflicting evidence, determine the credibility of witnesses, or otherwise substitute its own judgment for that of the administrative agency on the sufficiency of evidence.  Irene K. Nacu, etc. vs. Civil Service Commission, et al. G.R. No. 187752, November 23, 2010.

Appeal; findings of fact of Court of Appeals; when reviewable by Supreme Court. Respondents To Chip, Yap and Balila next argue that the instant petition raises questions of fact, which are not allowed in a petition for review on certiorari.  They, therefore, submit that the factual findings of the Court of Appeals are binding on this Court.  Section 1, Rule 45 of the Rules of Court categorically states that the petition filed thereunder shall raise only questions of law, which must be distinctly set forth.  A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts.  For a question to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants or any of them.  The resolution of the issue must rest solely on what the law provides on the given set of circumstances.  Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact.

The above rule, however, admits of certain exceptions, one of which is when the findings of the Court of Appeals are contrary to those of the trial court.  As will be discussed further, this exception is attendant in the case at bar.  Cebu Bionic Builders Supply, Inc. and Lydia Sia vs. Development Bank of the Philippines, et al. G.R. No. 154366, November 17, 2010

Appeal; findings of fact of lower courts. As a rule, the jurisdiction of this Court in cases brought to it from the CA is limited to the review and revision of errors of law allegedly committed by the appellate court.  The issues raised by petitioners are questions of fact necessarily calling for a reexamination and reevaluation of the evidence presented at the trial.  A question of fact arises when the doubt or difference pertains to the truth or falsehood of alleged facts, or when the query necessarily solicits calibration of the whole evidence, considering the credibility of witnesses, the existence and relevance of specific circumstances, and their relation to one another and to the whole situation.  The Court has consistently ruled that findings of fact of trial courts are entitled to great weight and should not be disturbed, except for strong and valid reasons, because the trial court is in a better position to examine the demeanor of witnesses while testifying.  It is not a function of this Court to analyze and weigh evidence all over again.  The factual findings of the CA affirming those of the trial court are final and conclusive; hence, they are binding on this Court.  The Court will not disturb such factual findings unless there are compelling or exceptional reasons.  No such reasons exist in this case.  Constancia G. Tamayo, et al. vs. Rosalia Abad Señora, et al., G.R. No. 176946, November 15, 2010.

Appeal; findings of fact of trial court. Indeed, the findings of the trial court, with respect to the operative facts and the credibility of witnesses, especially when affirmed by the appellate court, are accorded the highest degree of deference and respect by this Court, except when: (1) the findings of a trial court are grounded entirely on speculations, surmises, or conjectures; (2) a lower court’s inference from its factual findings is manifestly mistaken, absurd, or impossible; (3) there is grave abuse of discretion in the appreciation of facts; (4) the findings of the court go beyond the issues of the case or fail to notice certain relevant facts which, if properly considered, will justify a different conclusion; (5) there is misapprehension of facts; and (6) the findings of fact are conclusions without mention of the specific evidence on which they are based are premised on the absence of evidence, or are contradicted by evidence on record.  Notably, none of these exceptions is attendant in this case.  Sps. Mariano and Emma Bolaños vs. Roscef Zuñga Bernarte, et al., G.R. No. 180997, November 17, 2010.

Appeal; notice of appeal; disallowance due to improper substitution of counsel. Given the foregoing, we are bound to deny a liberal application of the rules on substitution of counsel and resolve definitively that GOODLAND’s notice of appeal merits a denial, for the failure of Atty. Mondragon to effect a valid substitution of the counsel on record. Substantial justice would be better served if the notice of appeal is disallowed. In the same way that the appellant in Pioneer was not permitted to profit from its own manipulation of the rules on substitution of counsel, so too can GOODLAND be not tolerated to foster vexatious delay by allowing its notice of appeal to carry on.  Asia United Bank vs. Goodland Company, Inc., G.R. No. 188051, November 22, 2010.

Appeal; questions that may be decided; assignment of error. SCP further contends that the CA denied it its right to procedural and substantive due process, because it granted a relief entirely different from those sought for by the parties and on which they were neither heard nor given the opportunity to be heard.  Respondent BDO-EPCIB, on the other hand, maintains that the CA has the power to grant such other appropriate relief as may be consistent with the allegations and proofs when a prayer for general relief is added to the demand of specific relief.  SCP’s contention deserves merit.

Sec. 8, Rule 51 of the 1997 Rules of Civil Procedure expressly provides:

SEC. 8. Questions that may be decided. – No error which does not affect the jurisdiction over the subject matter or the validity of the judgment appealed from or the proceedings therein will be considered unless stated in the assignment of errors, or closely related to or dependent on an assigned error and properly argued in the brief, save as the court pass upon plain errors and clerical errors.

Essentially, the general rule provides that an assignment of error is essential to appellate review and only those assigned will be considered, save for the following exceptions: (1) grounds not assigned as errors but affecting jurisdiction over the subject matter; (2) matters not assigned as errors on appeal but are evidently plain or clerical errors within the contemplation of the law; (3) matters not assigned as errors on appeal but consideration of which is necessary in arriving at a just decision and complete resolution of the case or to serve the interest of justice or to avoid dispensing piecemeal justice; (4) matters not specifically assigned as errors on appeal but raised in the trial court and are matters of record having some bearing on the issue submitted which the parties failed to raise or which the lower court ignored; (5) matters not assigned as errors on appeal but closely related to an error assigned; and (6) matters not assigned as errors on appeal but which the determination of a question properly assigned is dependent.  None of these exceptions exists in this case.

Notably, the prayer portion of the BDO-EPCIB petition in CA-G.R. SP No. 101881 only sought for the following reliefs:

WHEREFORE, it is respectfully prayed of the Honorable Court that the Decision dated 03 December 2007 of the Court a quo, or the approved Rehabilitation Plan, be MODIFIED accordingly, thus:

1.      Under its Phase 1, the articles of incorporation and by laws of SCP be accordingly amended to accommodate the additional equity of Php3.0 Billion.

2.      Under Phase 2, the present stockholders and/or the Rehabilitation Receiver shall offer for sale to acceptable investors SCP’s stocks, through negotiated sale or bidding for an amount not less than Php3.0 Billion, which is equivalent to approximately 64% of SCP; and

3.      Under Phase 3, there shall be an immediate conversion of debt to common shares in the required amount of Php3.0 Billion, which is equivalent to approximately 64% of SCP, pursuant to the terms and conditions of the Recommended Rehabilitation Plan.

Other reliefs, just and equitable under the premises, are likewise prayed for.

It is very plain in the language of the prayers of BDO-EPCIB that it only requested the CA to modify the existing rehabilitation plan. It never sought the termination of the rehabilitation proceedings.  Thus, given the factual backdrop of the case, it was inappropriate for the CA, motu proprio, to terminate the proceedings. The appellate court should have proceeded to resolve BDO-EPCIB’s appeal on its merits instead of terminating the proceedings, a result that has no ground in its pleadings in the CA.

In Abedes v. Court of Appeals, this Court emphasized the difference of appeals in criminal cases and in civil cases by saying, “Issues not raised in the pleadings, as opposed to ordinary appeal of criminal cases where the whole case is opened for review, are deemed waived or abandoned.” Essentially, to warrant consideration on appeal, there must be discussion of the error assigned, else, the error will be deemed abandoned or waived.

This Court even went further in Development Bank of the Philippines v. Teston, in which it held that it is improper to enter an order which exceeds the scope of the relief sought by the pleadings, to wit:

The Court of Appeals erred in ordering DBP to return to respondent “the P1,000,000.00” alleged down payment, a matter not raised in respondent’s Petition for Review before it. In Jose Clavano, Inc. v. Housing and Land Use Regulatory Board, this Court held:

“x x x It is elementary that a judgment must conform to, and be supported by, both the pleadings and the evidence, and must be in accordance with the theory of the action on which the pleadings are framed and the case was tried. The judgment must be secundum allegata et probate.” (Italics in original.)

Due process considerations justify this requirement. It is improper to enter an order which exceeds the scope of relief sought by the pleadings, absent notice which affords the opportunity to be heard with respect to the proposed relief. The fundamental purpose of the requirement that allegations of a complaint must provide the measure of recovery is to prevent surprise to the defendant.  (Emphasis supplied.)

Thus, this Court cannot sustain the ruling of the CA insofar as it granted a relief not prayed for by the BDO-EPCIB.  Steel Corporation of the Philippines vs. Equitable PCI Bank, Inc./DEG-Deutsche Investitions-Und Entwicklungsgesellschaft MBH vs. Equitable PCI Bank, Inc., G.R. No. 190462G.R. No. 190538, November 17, 2010.

Appeal; scope of review; exceptions. As a general rule, a petition for review under Rule 45 of the Rules of Court covers questions of law only. Questions of fact are not reviewable and passed upon by this Court in its exercise of judicial review. The distinction between questions of law and questions of fact has been well defined.  A question of law exists when the doubt or difference centers on what the law is on a certain state of facts.  A question of fact, on the other hand, exists if the doubt centers on the truth or falsity of the alleged facts.

The rule, however, admits of exceptions, namely: (1) when the findings are grounded entirely on speculations, surmises, or conjectures;    (2) when the inference made is manifestly mistaken, absurd, or impossible; (3) when there is a grave abuse of discretion; (4) when the judgment is based on misappreciation of facts; (5) when the findings of fact are conflicting;   (6) when in making its findings, the same are contrary to the admissions of both appellant and appellee; (7) when the findings are contrary to those of the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner’s main and reply briefs are not disputed by the respondent; and (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record.

The aforementioned exceptions, particularly the seventh exception, finds relevance in the case at bench since the findings of the CA are clearly in conflict with that of the trial court. For this reason, the Court is constrained to reevaluate the evidence adduced by both parties to resolve the issues which boil down to whether or not Losin is liable to Vitarich and, if so, to what extent.  Vitarich Corporation vs. Chona Losin, G.R. No. 181560, November 15, 2010.

Appeal; scope of review by Supreme Court. The Court finds no solid reason to disturb the findings of the CA. Verily, the evaluation and calibration of the evidence necessarily involves consideration of factual issues – an exercise that is not appropriate for a petition for review on certiorari under Rule 45.  This rule provides that the parties may raise only questions of law, because the Supreme Court is not a trier of facts.  Generally, the Court is not duty-bound to analyze and weigh again the evidence introduced in, and considered by, the tribunals below. When supported by substantial evidence, the findings of fact of the CA are conclusive and binding on the parties and are not reviewable by this Court, unless the case falls under any of the following recognized exceptions:   (1)  when the conclusion is a finding grounded entirely on speculation, surmises and conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) where there is a grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; (7) when the findings are contrary to those of the trial court; (8) when the findings of fact are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioners’ main and reply briefs are not disputed by the respondents; and (10) when the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and contradicted by the evidence on record.

Unfortunately for the Sevillas, they fail to convince this Court that any of the above exceptions applies in this case.  For this reason, the Court cannot but respect the findings and conclusions of the lower court. It is precluded from making further investigation on the facts of the case without violating established rules of procedure.  Sps. Eliseo Sevilla and Erna Sevilla vs. Hon. Court of Appeals, et al., G.R. No. 150284, November 22, 2010.

Appeal; scope of review by Supreme Court. The general rule is that in petitions for review on certiorari, the Court will not re-examine the findings of fact of the appellate court except (a) when the latter’s findings are grounded entirely on speculations, surmises or conjectures; (b) when its inference is manifestly mistaken, absurd or impossible; (c) when there is a grave abuse of discretion; (d) when its findings of fact are conflicting; and (e) when it goes beyond the issues of the case.  Citibank fails to convince the Court that the case falls under any of the exceptions. Hence, the findings of fact should no longer be reviewed.  Citibank, N.A. vs. Atty. Ernesto S. Dinopol, G.R. No. 188412, November 22, 2010.

Appeal; scope of review by Supreme Court. After going over the records, the Court finds no cogent reason to disturb the findings of the CA on the matter of WSIRI’s claim for commissions. As this Court has ruled in a long line of cases, the Supreme Court is not a trier of facts. Its jurisdiction is limited to reviewing and revising errors of law imputed to the lower court, the latter’s findings of fact being conclusive and not reviewable by this Court.  Ledesco Development Corp. vs. Worldwide Standard International Realty, Inc., G.R. No. 173339. November 24, 2010.

Certiorari; grant or denial of postponement is matter of discretion. “As a rule, the grant or denial of a motion for postponement is addressed to the sound discretion of the court which should always be predicated on the consideration that more than the mere convenience of the courts or of the parties, the ends of justice and fairness should be served thereby.”  Furthermore, this discretion must be exercised intelligently.

In this case, the Court is of the view that the CTA gave enough opportunity for Milwaukee to present its rebuttal evidence.  Records reveal that when Milwaukee requested for resetting on September 5, 2005 and October 26, 2005, its motions were granted by the CTA.  As a matter of fact, by January 16, 2006, Milwaukee was already able to partially present its rebuttal evidence.  Thus, when the CTA called on Milwaukee to continue its presentation of rebuttal evidence on February 27, 2006, it should have been prepared to do so. It cannot be said that the CTA arbitrarily denied Milwaukee’s supposed simple request of resetting because it had already given the latter several months to prepare and gather its rebuttal evidence.

Milwaukee tried to reason out that if only the CIR gave an advance notice that it would be waiving its right to cross-examine its witness, then it could have “rushed the collation and sorting of its rebuttal documentary exhibits.” The Court, however, is not persuaded.

As stated earlier, Milwaukee was given more than ample time to collate and gather its evidence. It should have been prepared for the continuance of the trial. True, the incident on said date was for the cross-examination of Milwaukee’s witness but it could be short; it could be lengthy.  Milwaukee should have prepared for any eventuality. It is discretionary on the part of the court to allow a piece-meal presentation of evidence. If it decides not to allow it, it cannot be considered an abuse of discretion. “As defined, discretion is a faculty of a court or an official by which he may decide a question either way, and still be right.”

Accordingly, Milwaukee’s right to due process was not transgressed.  The Court has consistently reminded litigants that due process is simply an opportunity to be heard.  The requirement of due process is satisfactorily met as long as the parties are given the opportunity to present their side.  In the case at bar, Milwaukee was precisely given the right and the opportunity to present its side.  It was able to present its evidence-in-chief and had its opportunity to present rebuttal evidence. Milwaukee Industries Corp. vs. Corp. of Appeals and Commissioner of Internal Revenue, G.R. No. 173815, November 24, 2010.

Certiorari; grave abuse of discretion. Our review of the records, particularly the CA decision, indicates that the CA did not determine the presence or absence of grave abuse of discretion in the RTC decision before it.  Given that the petition before the CA was a petition for certiorari and prohibition under Rule 65 of the Rules of Court, it appears that the CA instead incorrectly reviewed the case on the basis of whether the RTC decision on the merits was correct.  To put the case in its proper perspective, the task before us is to examine the CA decision from the prism of whether it correctly determined the presence or absence of grave abuse of discretion in the RTC decision before it.  Stated otherwise, did the CA correctly determine whether the RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction in ruling on the case?  As discussed below, our review of the records and the CA decision shows that the RTC did not commit grave abuse of discretion in issuing an alias writ of possession in favor of the respondent. Spouses Ernesto and Vicenta Topacio vs. Banco Filipino Savings and Mortgage Bank, G.R. No. 157644, November 17, 2010.

Certiorari; improper where appeal is available. The Court reiterates that a special civil action for certiorari is a limited form of review and is a remedy of last recourse.  The general rule is that a writ of certiorari will not issue where the remedy of appeal is available to the aggrieved party.  It cannot be allowed when a party to a case fails to appeal a judgment despite the availability of that remedy. Certiorari is not a substitute for a lapsed or lost appeal, especially if the party’s own negligence or error in the choice of remedy occasioned such loss or lapse.

The few significant exceptions recognized by the Court are when public welfare and the advancement of public policy dictate, when the broader interests of justice so require, when the writs issued are null, or when the questioned order amounts to an oppressive exercise of judicial authority.  Petitioner has not alleged, much less proven, that this case calls for the Court’s authority to invoke the exceptions.

The right to appeal is not a natural right nor is it a part of due process; it is merely a statutory privilege that must be exercised in the manner, and according to procedures, laid down by law.  Perfection of an appeal within the statutory or reglementary period is not only mandatory but also jurisdictional; failure to do so renders the questioned decision final and executory, and deprives the appellate court of jurisdiction to alter the judgment or final order, much less to entertain the appeal.

Thus, given the factual milieu of this case, the trial court had already lost jurisdiction to act on the motion for clarification. When the decision became final and executory, not even this Court could have changed the trial court’s disposition absent any showing that the case fell under one of the recognized exceptions.  Victoria L. Teh vs. Natividad Teh Tan, Teh Ki Tiat and Jacinta Sia, G.R. No. 181956, November 22, 2010.

Certiorari; interlocutory orders of Bureau of Legal Affairs of Intellectual Property Office (BLA-IPO). As to the second issue raised, the Court, is not persuaded by petitioner’s argument that, pursuant to the doctrine of primary jurisdiction, the Director General  of the IPO and not the CA has jurisdiction to review the questioned Orders of the Director of the BLA-IPO.

It is true that under Section 7(b) of RA 8293, otherwise known as the Intellectual Property Code of the Philippines, which is the presently prevailing law, the Director General of the IPO exercises exclusive appellate jurisdiction over all decisions rendered by the Director of the BLA-IPO. However, what is being questioned before the CA  is not a decision, but an interlocutory order of the BLA-IPO denying respondents’ motion to extend the life of the preliminary injunction issued in their favor.  RA 8293 is silent with respect to any remedy available to litigants who intend to question an interlocutory order issued by the BLA-IPO. Moreover, Section 1(c), Rule 14 of the Rules and Regulations on Administrative Complaints for Violation of Laws Involving Intellectual Property Rights simply provides that interlocutory orders shall not be appealable. The said Rules and Regulations do not prescribe a procedure within the administrative machinery to be followed in assailing orders issued by the BLA-IPO pending final resolution of a case filed with them. Hence, in the absence of such a remedy, the provisions of the Rules of Court shall apply in a suppletory manner, as provided under Section 3, Rule 1 of the same Rules and Regulations. Hence, in the present case, respondents correctly resorted to the filing of a special civil action for certiorari with the CA to question the assailed Orders of the BLA-IPO, as they cannot appeal therefrom and they have no other plain, speedy and adequate remedy in the ordinary course of law. This is consistent with Sections 1 and 4, Rule 65 of the Rules of Court, as amended. Phil Pharmawealth, Inc. vs. Pfizer, Inc and Pfizer (Phil.) Inc., G.R. No. 167715, November 17, 2010.

Certiorari; requirement of motion for reconsideration; exceptions. On the second ground, Pineda questions DepEd’s failure to move for reconsideration before going to the CA on certiorari.

The general rule is that a motion for reconsideration is a condition sine qua non before a petition for certiorari may lie, its purpose being to grant an opportunity for the court a quo to correct any error attributed to it by a re-examination of the legal and factual circumstances of the case.  There are, however, recognized exceptions permitting a resort to the special civil action for certiorari without first filing a motion for reconsideration.  In the case of Domdom v. Sandiganbayan, it was written:

The rule is, however, circumscribed by well-defined exceptions, such as where the order is a patent nullity because the court a quo had no jurisdiction; where the questions raised in the certiorari proceeding have been duly raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower court; where there is an urgent necessity for the resolution of the question, and any further delay would prejudice the interests of the Government or of the petitioner, or the subject matter of the action is perishable; where, under the circumstances, a motion for reconsideration would be useless; where the petitioner was deprived of due process and there is extreme urgency for relief; where, in a criminal case, relief from an order of arrest is urgent and the grant of such relief by the trial court is improbable; where the proceedings in the lower court are a nullity for lack of due process; where the proceedings were ex parte or in which the petitioner had no opportunity to object; and where the issue raised is one purely of law or where public interest is involved. (underscoring supplied)

As previously discussed, the present case concerns the implementation or application of a DepEd policy which had been enjoined by the RTC. Certainly, there is an urgent necessity for the resolution of the question and any further delay would prejudice the interest of the government. Moreover, the subject matter of the case involves the operation of the canteen of a public secondary school. This is of public interest for it affects the welfare of the students, thus, justifying the relaxation of the settled rule.  Michelle I. Pineda vs. Court of Appeals and the Department of Education, etc., G.R. No. 181643, November 17, 2010.

Certiorari; requisites. In order for a petition for certiorari to succeed, the following requisites must concur, namely: (a) that the writ is directed against a tribunal, a board, or any officer exercising judicial or quasi-judicial functions; (b) such tribunal, board, or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (c) there is no appeal, or any plain, speedy and adequate remedy in the ordinary course of law.  Without jurisdiction denotes that the tribunal, board, or officer acted with absolute lack of authority. There is excess of jurisdiction when the public respondent exceeds its power or acts without any statutory authority.  Grave abuse of discretion connotes such capricious and whimsical exercise of judgment as to be equivalent to lack or excess of jurisdiction; otherwise stated, power is exercised in an arbitrary or despotic manner by reason of passion, prejudice, or personal hostility; and such exercise is so patent or so gross as to amount to an evasion of a positive duty or to a virtual refusal either to perform the duty enjoined or to act at all in contemplation of law.  Milwaukee Industries Corp. vs. Corp. of Appeals and Commissioner of Internal Revenue, G.R. No. 173815, November 24, 2010.

Consolidation; consolidation of appeals in Court of Appeals. Petitioner SCP argues that the CA deviated from its own Internal Rules when it failed to consolidate the four (4) appeals arising from the same decision of the rehabilitation court. In fact, it points out to the fact that CA-G.R. SP No. 101913 had already been consolidated with its own appeal in CA-G.R. SP No. 101732. However, SCP says that the failure by the CA to consolidate the remaining two appeals, namely CA-G.R. SP Nos. 101880 and 101881, with its own appeal indicates not only a deviation from the rules but also a disobedience to their plain language and obvious intent.  On the other hand, BDO-EPCIB refutes SCP’s arguments by saying that the consolidation of cases is only discretionary, not mandatory, upon the court.  The Court agrees with SCP.

Consolidation of actions is expressly authorized under Sec. 1, Rule 31 of the Rules of Court:

Section 1. Consolidation.When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.

Likewise, Rule 3, Sec. 3 of the 2002 Internal Rules of the CA adopts the same rule:

Sec. 3. Consolidation of Cases.When related cases are assigned to different Justices, they may be consolidated and assigned to one Justice.

(a)  At the instance of a party with notice to the other party; or at the instance of the Justice to whom the case is assigned, and with the conformity of the Justice to whom the cases shall be consolidated, upon notice to the parties, consolidation may be allowed when the cases involve the same parties and/or related questions of fact and/or law.

(b) Consolidated cases shall pertain to the Justice –

(1)  To whom the case with the lowest docket number is assigned, if they are of the same kind;

(2)  To whom the criminal case with the lowest number is assigned, if two or more of the cases are criminal and the others are civil or special;

(3)  To whom the criminal case is assigned and the other are civil or special; and

(4)  To whom the civil case is assigned, or to whom the civil case with the lowest docket number is assigned, if the cases involved are civil and special.

(c) Notice of the consolidation and replacement shall be given to the Raffle Staff and the Judicial Records Division.

It is a time-honored principle that when two or more cases involve the same parties and affect closely related subject matters, they must be consolidated and jointly tried, in order to serve the best interests of the parties and to settle expeditiously the issues involved.  In other words, consolidation is proper wherever the subject matter involved and relief demanded in the different suits make it expedient for the court to determine all of the issues involved and adjudicate the rights of the parties by hearing the suits together.  The purpose of this rule is to avoid multiplicity of suits, guard against oppression and abuse, prevent delays, clear congested dockets, and simplify the work of the trial court. In short, consolidation aims to attain justice with the least expense and vexation to the parties-litigants.  It contributes to the swift dispensation of justice, and is in accord with the aim of affording the parties a just, speedy, and inexpensive determination of their cases before the courts. Further, it results in the avoidance of the possibility of conflicting decisions being rendered by the courts in two or more cases, which would otherwise require a single judgment.  In the instant case, all four (4) cases involve identical parties, subject matter, and issues. In fact, all four (4) arose from the same decision rendered by the Rehabilitation Court. As such, it became imperative upon the CA to consolidate the cases. Even though consolidation of actions is addressed to the sound discretion of the court and normally, its action in consolidating will not be disturbed in the absence of manifest abuse of discretion, in this instance, we find that the CA gravely erred in failing to order the consolidation of the cases.  By refusing to consolidate the cases, the CA, in effect, dispensed a form of piecemeal judgment that has veritably resulted in the multiplicity of suits. Such action is not regarded with favor, because consolidation should always be ordered whenever it is possible.  Steel Corporation of the Philippines vs. Equitable PCI Bank, Inc./DEG-Deutsche Investitions-Und Entwicklungsgesellschaft MBH Vs. Equitable PCI Bank, Inc., G.R. No. 190462G.R. No. 190538, November 17, 2010.

Counsel; requirements for valid substitution. Under Rule 138, Section 26 of the Rules of Court, for a substitution of attorney to be effectual, the following essential requisites must concur: (1) there must be a written application for substitution; (2) it must be filed with the written consent of the client; (3) it must be with the written consent of the attorney substituted; and (4) in case the consent of the attorney to be substituted cannot be obtained, there must at least be proof of notice that the motion for substitution was served on him in the manner prescribed by the Rules of Court.

The courts a quo were uniform and correct in finding that Atty. Mondragon failed to observe the prescribed procedure and, thus, no valid substitution of counsel was actualized.  However, they took divergent postures as to the repercussion of such non-compliance, thereby igniting the herein controversy.

The RTC strictly imposed the rule on substitution of counsel and held that the notice of appeal filed by Atty. Mondragon was a mere scrap of paper.  However, relying on our pronouncement in Land Bank of the Philippines v. Pamintuan Development Co., the CA brushed aside the procedural lapse and took a liberal stance on considerations of substantial justice, viz.:

It is a far better and more prudent course of action for the court to excuse a technical lapse and afford the parties a review of the case on appeal to attain the ends of justice rather than dispose of the case on technicality and cause a grave injustice to the parties, giving a false impression of speedy disposal of cases while actually resulting in more delay, if not a miscarriage of justice. Thus, substantial justice would be better served by giving due course to petitioner’s notice of appeal.

AUB argues that the liberality applied by the Court in Land Bank is incompatible with the herein controversy, and that Pioneer Insurance and Surety Corporation v. De Dios Transportation Co., Inc., which espouses the same view adopted by the RTC, is more appropriate. GOODLAND, on the other hand, insists that the CA committed no reversible error in ordering that the notice of appeal be allowed in order not to frustrate the ends of substantial justice.

We agree with AUB. A revisit of our pronouncements in Land Bank and Pioneer is in order.  In Land Bank, we held that the Department of Agrarian Reform Adjudication Board gravely abused its discretion when it denied due course to the Notice of Appeal and Notice of Entry of Appearance filed by petitioner’s new counsel for failure to effect a valid substitution of the former counsel on record.  We clarified that the new counsel never intended to replace the counsel of record because, although not so specified in the notice, they entered their appearance as collaborating counsel. Absent a formal notice of substitution, all lawyers who appear before the court or file pleadings in behalf of a client are considered counsel of the latter. We pursued a liberal application of the rule in order not to frustrate the just, speedy, and inexpensive determination of the controversy.

In Pioneer, we adopted a strict posture and declared the notice of withdrawal of appeal filed by appellant’s new counsel as a mere scrap of paper for his failure to file beforehand a motion for the substitution of the counsel on record.  Provoking such deportment was the absence of a special power of attorney authorizing the withdrawal of the appeal in addition to the lack of a proper substitution of counsel. More importantly, we found that the withdrawal of the appeal was calculated to frustrate the satisfaction of the judgment debt rendered against appellant, thereby necessitating a rigid application of the rules in order to deter appellant from benefiting from its own deleterious manipulation thereof. Asia United Bank vs. Goodland Company, Inc., G.R. No. 188051, November 22, 2010.

Default; declaration of default improper where answer filed before declaration and no prejudice caused to plaintiff. Petitioner correctly points out that the rule is that a defendant’s answer should be admitted where it is filed before a declaration of default and no prejudice is caused to the plaintiff.  Indeed, where the answer is filed beyond the reglementary period but before the defendant is declared in default and there is no showing that defendant intends to delay the case, the answer should be admitted.  In the case at bar, it is inconsequential that the trial court declared petitioner in default on the same day that petitioner filed its Answer.  As reflected above, the trial court slept on petitioner’s Motion to Dismiss for almost a year, just as it also slept on respondents’ Motion to Declare petitioner in Default.   It was only when petitioner filed a Motion to Withdraw Motion to Dismiss and to Admit Answer that it denied the Motion to Dismiss, and acted on/granted respondents’ Motion to Declare petitioner in Default.   This is procedurally unsound.

The policy of the law is to have every litigant’s case tried on the merits as much as possible. Hence, judgments by default are frowned upon.  A case is best decided when all contending parties are able to ventilate their respective claims, present their arguments and adduce evidence in support thereof.  The parties are thus given the chance to be heard fully and the demands of due process are subserved.  Moreover, it is only amidst such an atmosphere that accurate factual findings and correct legal conclusions can be reached by the courts. San Pedro Cineplex Properties, Inc. vs. Heirs of Manual Humada Enaño, et al., G.R. No. 190754, November 17, 2010.

Execution; annulment of writ of execution. Petitioner takes exception to the CA ruling that she committed a procedural gaffe in seeking the annulment of the writ of execution, the auction sale, and the certificate of sale.  The issue on the conjugal nature of the property, she insists, can be adjudicated by the executing court; thus, the RTC correctly gave due course to her motion.  She asserts that it was error for the CA to propose the filing of a separate case to vindicate her claim.  We agree with petitioner.

The CA explained the faux pas committed by petitioner in this wise:

Under [Section 16, Rule 39], a third-party claimant or a stranger to the foreclosure suit, can opt to file a remedy known as terceria against the sheriff or officer effecting the writ by serving on him an affidavit of his title and a copy thereof upon the judgment creditor.  By the terceria, the officer shall not be bound to keep the property and could be answerable for damages.  A third-party claimant may also resort to an independent “separate action,” the object of which is the recovery of ownership or possession of the property seized by the sheriff, as well as damages arising from wrongful seizure and detention of the property despite the third-party claim.  If a “separate action” is the recourse, the third-party claimant must institute in a forum of competent jurisdiction an action, distinct and separate from the action in which the judgment is being enforced,  even before or without need of filing a claim in the court that issued the writ.  Both remedies are cumulative and may be availed of independently of or separately from the other.  Availment of the terceria is not a condition sine qua non to the institution of a “separate action.”

It is worthy of note that Sina Imani should have availed of the remedy of “terceria” authorized under Section 16 of Rule 39 which is the proper remedy considering that he is not a party to the case against [petitioner].  Instead, the trial court allowed [petitioner] to file an urgent motion to cancel and nullify the levy of execution the auction sale and certificate of sale over TCT No. T27957 [P](M).  [Petitioner] then argue[s] that it is the ministerial duty of the levying officer to release the property the moment a third-party claim is filed.

It is true that once a third-party files an affidavit of his title or right to the possession of the property levied upon, the sheriff is bound to release the property of the third-party claimant unless the judgment creditor files a bond approved by the court.  Admittedly, [petitioner’s] motion was already pending in court at the time that they filed the Affidavit of Crisanto Origen, the former owner, dated July 27, 2005.

In the instant case, the one who availed of the remedy of terceria is the [petitioner], the party to the main case and not the third party contemplated by Section 16, Rule 39 of the Rules of Court.

Moreover, the one who made the affidavit is not the third-party referred to in said Rule but Crisanto Origen who was the former owner of the land in question.

Apparently, the CA lost sight of our ruling in Ong v. Tating, elucidating on the applicability of Section 16 of Rule 39 of the Rules of Court, thus:

When the sheriff thus seizes property of a third person in which the judgment debtor holds no right or interest, and so incurs in error, the supervisory power of the Court which has authorized execution may be invoked by the third person.  Upon due application by the third person, and after summary hearing, the Court may command that the property be released from the mistaken levy and restored to the rightful owner or possessor.  What the Court can do in these instances however is limited to a determination of whether the sheriff has acted rightly or wrongly in the performance of his duties in the execution of the judgment, more specifically, if he has indeed taken hold of property not belonging to the judgment debtor.  The Court does not and cannot pass upon the question of title to the property, with any character of finality.  It can treat the matter only in so far as may be necessary to decide if the Sheriff has acted correctly or not.  x x x.

x x x x

Upon the other hand, if the claim of impropriety on the part of the sheriff in the execution proceedings is made by a party to the action, not a stranger thereto, any relief therefrom may only be applied with, and obtained from, only the executing court; and this is true even if a new party has been impleaded in the suit.

The filing of the motion by petitioner to annul the execution, the auction sale, and the certificate of sale was, therefore, a proper remedy.  As further held by this Court:

Certain it is that the Trial Court has plenary jurisdiction over the proceedings for the enforcement of its judgments.  It has undeniable competence to act on motions for execution (whether execution be a matter of right or discretionary upon the Court), issue and quash writs, determine if property is exempt from execution, or fix the value of property claimed by third persons so that a bond equal to such value may be posted by a judgment creditor to indemnify the sheriff against liability for damages, resolve questions involving redemption, examine the judgment debtor and his debtors, and otherwise perform such other acts as may be necessary or incidental to the carrying out of its decisions.  It may and should exercise control and supervision over the sheriff and other court officers and employees taking part in the execution proceedings, and correct them in the event that they should err in the discharge of their functions.

Contrary to the CA’s advice, the remedy of terceria or a separate action under Section 16, Rule 39 is no longer available to Sina Imani because he is not deemed a stranger to the case filed against petitioner:

[T]he husband of the judgment debtor cannot be deemed a “stranger” to the case prosecuted and adjudged against his wife.

Thus, it would have been inappropriate for him to institute a separate case for annulment of writ of execution.

In Spouses Ching v. Court of Appeals, we explained:

Is a spouse, who was not a party to the suit but whose conjugal property is being executed on account of the other spouse being the judgment obligor, considered a “stranger?” In Mariano v. Court of Appeals, we answered this question in the negative. In that case, the CFI of Caloocan City declared the wife to be the judgment obligor and, consequently, a writ of execution was issued against her. Thereupon, the sheriff proceeded to levy upon the conjugal properties of the wife and her husband. The wife initially filed a petition for certiorari with the Court of Appeals praying for the annulment of the writ of execution. However, the petition was adjudged to be without merit and was accordingly dismissed. The husband then filed a complaint with the CFI of Quezon City for the annulment of the writ of execution, alleging therein that the conjugal properties cannot be made to answer for obligations exclusively contracted by the wife. The executing party moved to dismiss the annulment case, but the motion was denied. On appeal, the Court of Appeals, in Mariano, ruled that the CFI of Quezon City, in continuing to hear the annulment case, had not interfered with the executing court. We reversed the Court of Appeals’ ruling and held that there was interference by the CFI of Quezon City with the execution of the CFI of Caloocan City. We ruled that the husband of the judgment debtor cannot be deemed a “stranger” to the case prosecuted and adjudged against his wife, which would allow the filing of a separate and independent action.

The facts of the Mariano case are similar to this case. Clearly, it was inappropriate for petitioners to institute a separate case for annulment when they could have easily questioned the execution of their conjugal property in the collection case. We note in fact that the trial court in the Rizal annulment case specifically informed petitioners that Encarnacion Ching’s rights could be ventilated in the Manila collection case by the mere expedient of intervening therein. Apparently, petitioners ignored the trial court’s advice, as Encarnacion Ching did not intervene therein and petitioners instituted another annulment case after their conjugal property was levied upon and sold on execution.

There have been instances where we ruled that a spouse may file a separate case against a wrongful execution. However, in those cases, we allowed the institution of a separate and independent action because what were executed upon were the paraphernal or exclusive property of a spouse who was not a party to the case. In those instances, said spouse can truly be deemed a “stranger.” In the present case, the levy and sale on execution was made upon the conjugal property.

Ineluctably, the RTC cannot be considered whimsical for ruling on petitioner’s motion.  The CA, therefore, erred for declaring otherwise.  Evangeline D. Imani vs. Metroplitan Bank and Trust Company, G.R. No. 187023, November 17, 2010.

Execution; effect of levy and sale.  In their petition, the Spouses Ching mainly argues that the trial court gravely erred in granting the Bank’s motion, because the RTC no longer had jurisdiction to issue the questioned Orders since the Bank failed to execute the judgment, to consolidate title, and to secure possession of the subject property.  They maintain that the RTC erred in totally disregarding the ruling of this Court in the cases of Ayala Investment & Development Corp. v. Court of Appeals and Ching v. Court of Appeals.  Finally, the Spouses Ching posit that the execution sale of the subject property was void, considering that the property was conjugal in nature and Encarnacion was not a party to the original action.

First, the Spouses Ching’s reliance on prescription is unavailing in the case at bar.  The Spouses Ching are implying that the RTC violated Section 6, Rule 39 of the Rules of Court, viz.:

Sec. 6. Execution by motion or by independent action.  – A final and executory judgment or order may be executed on motion within five (5) years from the date of its entry.  After the lapse of such time, and before it is barred by the statute of limitations, a judgment may be enforced by action.  The revived judgment may also be enforced by motion within five (5) years from the date of its entry and thereafter by action before it is barred by the statute of limitations.

However, it must be noted that contrary to their allegation, the summary judgment of the RTC in Civil Case No. 142309 had in fact already been enforced.  During the pendency of the case, the subject property was already levied upon.  Subsequently, after summary judgment and while the case was on appeal, the RTC granted the Bank’s motion for execution pending appeal.  Consequently, on October 10, 1983, an auction sale of the subject property was conducted, with the Bank emerging as the highest bidder.  Later, a Certificate of Sale in its favor was executed by the Sheriff and, thereafter, inscribed as a memorandum of encumbrance on TCT No.   S-3151.

It is settled that execution is enforced by the fact of levy and sale.  The result of such execution was that title over the subject property was vested immediately in the purchaser subject only to the Spouses Ching’s right to redeem the property within the period provided for by law.  The right acquired by the purchaser at an execution sale is inchoate and does not become absolute until after the expiration of the redemption period without the right of redemption having been exercised.   But inchoate though it be, it is, like any other right, entitled to protection and must be respected until extinguished by redemption.  Since, the Spouses Ching failed to redeem the subject property within the period allowed by law, they have been divested of their rights over the property.

Verily, the Bank’s “Motion to Retrieve Records, For Issuance of Final Deed of Conveyance, To Order the Register of Deeds of Makati City to Transfer Title and For Writ of Possession” was merely a consequence of the execution of the summary judgment as the judgment in Civil Case No. 142309 had already been enforced when the lot was levied upon and sold at public auction, with the Bank as the highest bidder.   Sps. Alfredo and Encarnacion Ching vs. Family Savings Bank and Sheriff of Manila / Alfredo Ching vs. Family Savings Bank and the Sheriff of Manila, G.R. No. 167835 and G.R. No. 188480, November 15, 2010.

Forum shopping. Lastly, petitioner avers that respondents are guilty of forum shopping for having filed separate actions before the IPO and the RTC praying for the same relief.  The Court agrees.

Forum shopping is defined as the act of a party against whom an adverse judgment has been rendered in one forum, of seeking another (and possibly favorable) opinion in another forum (other than by appeal or the special civil action of certiorari), or the institution of two (2) or more actions or proceedings grounded on the same cause on the supposition that one or the other court would make a favorable disposition.  The elements of forum shopping are: (a) identity of parties, or at least such parties that represent the same interests in both actions; (b) identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts; (c) identity of the two preceding particulars, such that any judgment rendered in the other action will, regardless of which party is successful, amount to res judicata in the action under consideration.

There is no question as to the identity of parties in the complaints filed with the IPO and the RTC.

Respondents argue that they cannot be held guilty of forum shopping because their complaints are based on different causes of action as shown by the fact that the said complaints are founded on violations of different patents.  The Court is not persuaded.

Section 2, Rule 2 of the Rules of Court defines a cause of action as the act or omission by which a party violates a right of another. In the instant case, respondents’ cause of action in their complaint filed with the IPO is the alleged act of petitioner in importing, distributing, selling or offering for sale Sulbactam Ampicillin products, acts that are supposedly violative of respondents’ right to the exclusive sale of the said products which are covered by the latter’s patent. However, a careful reading of the complaint filed with the RTC of Makati City would show that respondents have the same cause of action as in their complaint filed with the IPO. They claim that they have the exclusive right to make, use and sell Sulbactam Ampicillin products and that petitioner violated this right. Thus, it does not matter that the patents upon which the complaints were based are different. The fact remains that in both complaints the rights violated and the acts violative of such rights are identical.

In fact, respondents seek substantially the same reliefs in their separate complaints with the IPO and the RTC for the purpose of accomplishing the same objective.

It is settled by this Court in several cases that the filing by a party of two apparently different actions but with the same objective constitutes forum shopping.  The Court discussed this species of forum shopping as follows:

Very simply stated, the original complaint in the court a quo which gave rise to the instant petition was filed by the buyer (herein private respondent and his predecessors-in-interest) against the seller (herein petitioners) to enforce the alleged perfected sale of real estate. On the other hand, the complaint in the Second Case seeks to declare such purported sale involving the same real property “as unenforceable as against the Bank,” which is the petitioner herein. In other words, in the Second Case, the majority stockholders, in representation of the Bank, are seeking to accomplish what the Bank itself failed to do in the original case in the trial court. In brief, the objective or the relief being sought, though worded differently, is the same, namely, to enable the petitioner Bank to escape from the obligation to sell the property to respondent.

In Danville Maritime, Inc. v. Commission on Audit, the Court ruled as follows:

In the attempt to make the two actions appear to be different, petitioner impleaded different respondents therein – PNOC in the case before the lower court and the COA in the case before this Court and sought what seems to be different reliefs. Petitioner asks this Court to set aside the questioned letter-directive of the COA dated October 10, 1988 and to direct said body to approve the Memorandum of Agreement entered into by and between the PNOC and petitioner, while in the complaint before the lower court petitioner seeks to enjoin the PNOC from conducting a rebidding and from selling to other parties the vessel “T/T Andres Bonifacio,” and for an extension of time for it to comply with the paragraph 1 of the memorandum of agreement and damages. One can see that although the relief prayed for in the two (2) actions are ostensibly different, the ultimate objective in both actions is the same, that is, the approval of the sale of vessel in favor of petitioner, and to overturn the letter directive of the COA of October 10, 1988 disapproving the sale.

In the instant case, the prayer of respondents in their complaint filed with the IPO is as follows:

A. Immediately upon the filing of this action, issue an ex parte order (a) temporarily restraining respondent, its agents, representatives and assigns from importing, distributing, selling or offering for sale Sulbactam Ampicillin products to the hospitals named in paragraph 9 of this Complaint or to any other entity in the Philippines, or from otherwise infringing Pfizer Inc.’s Philippine Patent No. 21116; and (b) impounding all the sales invoices and other documents evidencing sales by respondent of Sulbactam Ampicillin products.

B. After hearing, issue a writ of preliminary injunction enjoining respondent, its agents, representatives and assigns from importing, distributing, selling or offering for sale Sulbactam Ampicillin products to the hospitals named in paragraph 9 of the Complaint or to any other entity in the Philippines, or from otherwise infringing Pfizer Inc.’s Philippine Patent No. 21116; and

C. After trial, render judgment:

(i)          declaring that respondent has infringed Pfizer Inc.’s Philippine Patent No. 21116 and that respondent has no right whatsoever over complainant’s patent;

(ii)    ordering respondent to pay complainants the following  amounts:

(a)    at least P1,000,000.00 as actual damages;

(b)    P700,000.00 as attorney’s fees and litigation expenses;

(d)    P1,000,000.00 as exemplary damages; and

(d)    costs of this suit.

(iii)   ordering the condemnation, seizure or forfeiture of  respondent’s infringing goods or products,      wherever they may be found, including the materials and implements used in the commission        of infringement, to be disposed of in such manner      as may be deemed appropriate by this   Honorable Office; and

(iv)   making the injunction permanent.

In an almost identical manner, respondents prayed for the following in their complaint filed with the RTC:

(a)    Immediately upon the filing of this action, issue an ex parte order:

(1)     temporarily restraining Pharmawealth, its agents,  representatives and assigns from importing, distributing, selling or offering for sale  infringing sulbactam ampicillin products to various government and private hospitals or to any other entity in the Philippines, or from otherwise infringing Pfizer Inc.’s Philippine Patent No. 26810.

(2)    impounding all the sales invoices and other documents evidencing sales by pharmawealth of sulbactam ampicillin products; and

(3)    disposing of the infringing goods outside the channels of commerce.

(b)    After hearing, issue a writ of preliminary injunction:

(1)    enjoining Pharmawealth, its agents, representatives and assigns from importing, distributing, selling or offering for sale infringing sulbactam ampicillin products to various government hospitals or to any other entity in the Philippines, or from otherwise infringing Patent No. 26810;

(2)    impounding all the sales invoices and other  documents evidencing sales by  Pharmawealth of sulbactam ampicillin    products; and

(3)    disposing of the infringing goods outside the channels of commerce.

(c)    After trial, render judgment:

(1)    finding Pharmawealth to have infringed Patent No. 26810 and declaring    Pharmawealth to have no right whatsoever  over plaintiff’s patent;

(2)    ordering  Pharmawealth to pay plaintiffs the   following amounts:

(i)    at least P3,000,000.00 as actual damages;

(ii)   P500,000.00  as  attorney’s fees  and P1,000,000.00 as litigation expenses;

(iii)   P3,000,000.00 as exemplary damages; and

(iv)   costs of this suit.

(3)   ordering the condemnation, seizure or forfeiture of Pharmawealth’s infringing goods or products, wherever they may be found, including the materials and implements used in the commission of infringement, to be disposed of in such manner as may be deemed appropriate by this Honorable Court; and

(4)    making the injunction permanent.

It is clear from the foregoing that the ultimate objective which respondents seek to achieve in their separate complaints filed with the RTC and the IPO, is to ask for damages for the alleged violation of their right to exclusively sell Sulbactam Ampicillin products and to permanently prevent or prohibit petitioner from selling said products to any entity.  Owing to the substantial identity of parties, reliefs and issues in the IPO and RTC cases, a decision in one case will necessarily amount to res judicata in the other action.  It bears to reiterate that what is truly important to consider in determining whether forum shopping exists or not is the vexation caused the courts and parties-litigant by a party who asks different courts and/or administrative agencies to rule on the same or related causes and/or to grant the same or substantially the same reliefs, in the process creating the possibility of conflicting decisions being rendered by the different fora upon the same issue.  Thus, the Court agrees with petitioner that respondents are indeed guilty of forum shopping.  Phil Pharmawealth, Inc. vs. Pfizer, Inc and Pfizer (Phil.) Inc., G.R. No. 167715, November 17, 2010.

Forum shopping; sanction where forum shopping is not willful and deliberate. Jurisprudence holds that if the forum shopping is not considered willful and deliberate, the subsequent case shall be dismissed without prejudice, on the ground of either litis pendentia or res judicata. However, if the forum shopping is willful and deliberate, both (or all, if there are more than two) actions shall be dismissed with prejudice.  In the present case, the Court finds that respondents did not deliberately violate the rule on non-forum shopping. Respondents may not be totally blamed for erroneously believing that they can file separate actions simply on the basis of different patents. Moreover, in the suit filed with the RTC of Makati City, respondents were candid enough to inform the trial court of the pendency of the complaint filed with the BLA-IPO as well as the petition for certiorari filed with the CA. On these bases, only Civil Case No. 04-754 should be dismissed on the ground of litis pendentia.  Phil Pharmawealth, Inc. vs. Pfizer, Inc and Pfizer (Phil.) Inc., G.R. No. 167715, November 17, 2010.

Injunction; preliminary injunction; requisites.  Section 3, Rule 58, of the Rules of Court lays down the requirements for the issuance of a writ of preliminary injunction, viz:

(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the acts complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually;

(b) That the commission, continuance or non-performance of the act or acts complained of during the litigation would probably work injustice to the applicant; or

(c)  That a party, court, or agency or a person is doing, threatening, or attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual.

In this connection, pertinent portions of Section 5, Rule 58 of the same Rules provide that if the matter is of extreme urgency and the applicant will suffer grave injustice and irreparable injury, a temporary restraining order may be issued ex parte.  From the foregoing, it can be inferred that two requisites must exist to warrant the issuance of an injunctive relief, namely: (1) the existence of a clear and unmistakable right that must be protected; and (2) an urgent and paramount necessity for the writ to prevent serious damage.  In the instant case, it is clear that when the CA issued its January 18, 2005 Resolution approving the bond filed by respondents, the latter no longer had a right that must be protected, considering that Philippine Letters Patent No. 21116 which was issued to them already expired on July 16, 2004. Hence, the issuance by the CA of a temporary restraining order in favor of the respondents is not proper.   In fact, the CA should have granted petitioner’s motion to dismiss the petition for certiorari filed before it as the only issue raised therein is the propriety of extending the writ of preliminary injunction issued by the BLA-IPO. Since the patent which was the basis for issuing the injunction, was no longer valid, any issue as to the propriety of extending the life of the injunction was already rendered moot and academic.  Phil Pharmawealth, Inc. vs. Pfizer, Inc and Pfizer (Phil.) Inc., G.R. No. 167715, November 17, 2010.

Injunction; preliminary injunction; requisites. Considering that the determination of the factual and legal issues presented in the case can proceed independent of those being litigated in the other cases filed against each other by the members of STRADEC’s Board of Directors, we find that the CA finally erred in denying STRADEC’s application of a writ of preliminary injunction to restrain (a) CTCII from further exercising proprietary rights over the subject shares; (b) SIDC and its officers from recognizing the transfer or further transfers of the same; (c) the implementation of the resolutions passed during the 20 July 2006 SIDC stockholders’ special meeting; and (d) the SEC from acting on any report submitted in respect thereto.  A provisional remedy which has, for its object, the preservation of the status quo, preliminary injunction may be resorted to by a party in order to preserve and protect certain rights and interests during the pendency of an action. By both law and jurisprudence, said provisional writ may be issued upon the concurrence of the following essential requisites, to wit: (1) that the invasion of the right is material and substantial; (2) that the right of complainant is clear and unmistakable; and, (3) that there is an urgent and paramount necessity for the writ to prevent serious damage.

As the owner, STRADEC is undoubtedly possessed of clear and unmistakable rights over the subject SIDC shares which respondent Yujuico pledged in favor of respondent Wong.  Unless collectively restrained, the aforesaid acts will completely divest STRADEC of its shares and unfairly deprive it of participation in SIDC’s corporate affairs pending the determination of the validity of the impugned transfers.  Given that the parties have already submitted their arguments for and against the writ of preliminary injunction sought, STRADEC is, however, required to put up an injunction bond pursuant to Section 1, Rule 10 of the Interim Rules. Conditioned to answer for damages respondents may sustain as a consequence of the issuance of the writ, the amount of the bond is fixed at P10,000,000.00 which is equivalent to the supposed loan for which STRADEC’s shares were pledged by respondent Yujuico.  Strategic Alliance Development Corporation vs. Star Infrastructure Development Corporation Corporation, BEDE S. Tabalingcos, et al., G.R. No. 187872. November 17, 2010.

Injunction; preliminary injunction; right of patent holder. In the first issue raised, petitioner argues that respondents’ exclusive right to monopolize the subject matter of the patent exists only within the term of the patent. Petitioner claims that since respondents’ patent expired on July 16, 2004, the latter no longer possess any right of monopoly and, as such, there is no more basis for the issuance of a restraining order or injunction against petitioner insofar as the disputed patent is concerned.  The Court agrees.  Section 37 of Republic Act No. (RA) 165, which was the governing law at the time of the issuance of respondents’ patent, provides:

Section 37. Rights of patentees. A patentee shall have the exclusive right to make, use and sell the patented machine, article or product, and to use the patented process for the purpose of industry or commerce, throughout the territory of the Philippines for the term of the patent; and such making, using, or selling by any person without the authorization of the patentee constitutes infringement of the patent.

It is clear from the above-quoted provision of law that the exclusive right of a patentee to make, use and sell a patented product, article or process exists only during the term of the patent. In the instant case, Philippine Letters Patent No. 21116, which was the basis of respondents in filing their complaint with the BLA-IPO, was issued on July 16, 1987. This fact was admitted by respondents themselves in their complaint. They also admitted that the validity of the said patent is until July 16, 2004, which is in conformity with Section 21 of RA 165, providing that the term of a patent shall be seventeen (17) years from the date of issuance thereof. Section 4, Rule 129 of the Rules of Court provides that an admission, verbal or written, made by a party in the course of the proceedings in the same case, does not require proof and that the admission may be contradicted only by showing that it was made through palpable mistake or that no such admission was made. In the present case, there is no dispute as to respondents’ admission that the term of their patent expired on July 16, 2004. Neither is there evidence to show that their admission was made through palpable mistake. Hence, contrary to the pronouncement of the CA, there is no longer any need to present evidence on the issue of expiration of respondents’ patent.

On the basis of the foregoing, the Court agrees with petitioner that after July 16, 2004, respondents no longer possess the exclusive right to make, use and sell the articles or products covered by Philippine Letters Patent No. 21116. Phil Pharmawealth, Inc. vs. Pfizer, Inc and Pfizer (Phil.) Inc., G.R. No. 167715, November 17, 2010.

Injunction; preliminary injunction; status quo. At any rate, the Court finds no cogent reason for the reversal and setting aside by the CA of the writ of preliminary mandatory injunction issued by the RTC.  The very writ of preliminary injunction set aside by the CA could no longer lie for the acts sought to be enjoined had already been accomplished or consummated. The DepEd already prohibited Pineda from operating the school canteen. As correctly ruled by the CA in its questioned decision, since Pineda had ceased the operation of the school canteen since 2005, the RTC’s preliminary writ should be set aside as there was nothing more to enjoin.  The Court agrees with the CA when it explained:

A preliminary injunction is a provisional remedy that a party may resort to in order to preserve and protect certain rights and interests during the pendency of an action. Its sole objective is to preserve the status quo until the merits of the case can be heard fully.

Status quo is defined as the last actual, peaceful, and uncontested status that precedes the actual controversy, that which is existing at the time of the filing of the case. Indubitably, the trial court must not make use of its injunctive relief to alter such status.

In the case at bench, the Decision of Undersecretary Gascon dated February 11, 2005, ordering Pineda to cease and desist from operating and managing the school canteen and to revert the management thereof to the Home Economics Department and to the Principal, has already been partially implemented. This is evident from the allegations of Pineda in her amended petition, to wit:

“Earlier, in the dawn of same date, 22 February 2004 (should be 2005), the guards of Lakandula High School, taking strict orders from respondents Mrs. Camilo and Dr. Quiñones who immediately executed the assailed illegal decision from the respondent undersecretary, prevented the canteen workers from entering the school and the delivery of softdrinks such as Pop Cola to the petitioner. On the same date, more canteens sprouted, in addition to those found in the H.E. and dressmaking rooms, operated by the teachers, under the guise that they were doing service to the students in the meantime that the canteen was closed. x x x.”

Finally, while the grant or denial of a preliminary injunction is discretionary on the part of the trial court, grave abuse of discretion is committed when it does not maintain the status quo which is the last actual, peaceable and uncontested status which preceded the actual controversy. If there is such a commission, it is correctible through a writ of certiorari.  In this case, the status quo ante litem or the state of affairs existing at the time of the filing of the case was that Pineda was already prohibited from operating the school canteen. For said reason, the trial court cannot make use of its injunctive power to change said status.  Michelle I. Pineda vs. Court of Appeals and the Department of Education, etc., G.R. No. 181643, November 17, 2010.

Judgment; finality. A judgment becomes “final and executory” by operation of law. Finality becomes a fact when the reglementary period to appeal lapses, and no appeal is perfected within such period.  In this case, petitioner herself admitted that she did not appeal the RTC ruling, believing that respondents failed to prove their cause of action.  However, her belief that she alone should be declared the sole beneficiary of the November 19, 1971 Deed of Donation has no basis in law and is, in fact, contradicted by the evidence on record.  A decision that has acquired finality becomes immutable and unalterable, and may no longer be modified in any respect, even if the modification is meant to correct erroneous conclusions of fact or law, and whether it will be made by the court that rendered it or by the highest court of the land.  Once a judgment or order becomes final, all the issues between the parties are deemed resolved and laid to rest.  No additions can be made to the decision, and no other action can be taken on it, except to order its execution. Victoria L. Teh vs. Natividad Teh Tan, Teh Ki Tiat and Jacinta Sia, G.R. No. 181956, November 22, 2010.

Judgment; finality; exceptions. The only exceptions to the general rule are the correction of clerical errors, the so-called nunc pro tunc entries which cause no prejudice to any party, void judgments, and cases where circumstances transpire after the finality of the decision that render its execution unjust and inequitable.  Not one of these exceptions is present in this case.  Nonetheless, this Court has recognized that even a final and executory judgment or the fallo thereof may be clarified or rectified by an amendment when there is, in its dispositive portion, an inadvertent omission of what it should have logically decreed or ordered based on the discussion in the body of the decision.  The Court must emphasize, however, that the court’s action should be limited to explaining a vague or equivocal part of its decision, which hampers the proper and full execution of its ruling. The court cannot modify or overturn its decision in the guise of clarifying ambiguous points.  In the present case, petitioner’s Manifestation is, for all intents and purposes, a motion for reconsideration of the RTC’s decision. Consider the prayer in her Manifestation:

WHEREFORE, in x x x light of the aforequoted rulings of this Honorable Court, it shows that the sole beneficiary of the Deed of Donation dated November 19, 1971 is Victoria Teh.

Consequently, it is respectfully prayed that an ORDER be issued by this Honorable Court declaring that the sole beneficiary of the Deed of Donation dated November 19, 1971, is Victoria Teh and that the Transfer Certificate of Title No. 37337 of the Registry of Deed (sic) of Quezon City be cancelled and Transferred in the name of Victoria Teh.

Clearly, petitioner sought more than just a clarification of the RTC’s decision. Her Manifestation called for a reexamination and reevaluation of evidence already considered by the RTC in its assailed judgment.   Hence, the CA did not err in holding that the RTC’s decision bound petitioner and, consequently, in dismissing the petition for certiorariVictoria L. Teh vs. Natividad Teh Tan, Teh Ki Tiat and Jacinta Sia, G.R. No. 181956, November 22, 2010.

Judgment; res judicata. The doctrine of res judicata is a rule which pervades every well-regulated system of jurisprudence and is founded upon two grounds embodied in various maxims of the common law, namely: (1) public policy and necessity, which makes it to the interest of the State that there should be an end to litigation – republicae ut sit litium, and (2) the hardship on the individual that he should be vexed twice for the same cause – nemo debet bis vexari et eadem causa.  A contrary doctrine would certainly subject the public peace and quiet to the will and neglect of individuals and prefer the gratification of the litigious disposition on the part of suitors to the preservation of the public tranquility and happiness.

In Cheng Ban Yek & Co. v. IAC, the petition arose when Cheng Ban Yek & Co., together with Alfredo, appealed the summary judgment in Civil Case No. 142309 to the CA.  The CA, however, affirmed in toto the judgment rendered by the lower court.  The matter was then elevated before this Court via a petition for review, docketed as G.R. No. 73708, but it was eventually dismissed for having been filed out of time and for lack of merit.  Therefore, the decision in Civil Case No. 142309 became final.

In Spouses Alfredo and Encarnacion Ching v. Court of Appeals, the case arose when the Spouses Ching, in an effort to prevent the deputy sheriff from consolidating the sale of the subject property, filed an annulment case, Civil Case No. 8389, with the RTC of Makati City.  The Spouses Ching sought to declare void the levy and sale on execution of their conjugal property by arguing that the branch sheriff had no authority to levy upon a property belonging to the conjugal partnership.  The RTC later rendered judgment in favor of the Spouses Ching and declared as void the levy and sale on execution upon their conjugal property.  The Bank then elevated the decision to the CA, which decision was reversed and set aside by the latter on the ground that the annulment case was barred by res judicata in another annulment case.  The Spouses Ching sought recourse before this Court, but the petition was denied and the assailed decision of the CA was affirmed.

It is undeniable, therefore, that the disquisitions of this Court in the above-cited cases are controlling and should be given great weight and consideration in the resolution of the issues raised by the Spouses Ching in the present petition.  All matters relevant to the action must, and should, conform to these precedent cases; otherwise, parallel actions emanating from the same case could lead to conflicting conclusions.  The winning party would not enjoy the fruits of his victory; instead, it would be an empty victory, ultimately ending in the denial of justice on the part on the righteous litigant.

Third, the Spouses Ching maintain that the subject property could not be levied upon and be sold at public auction because it is conjugal in nature.  This Court, in G.R. No. 118830, had this to say:

In any case, even without the intervention of Encarnacion Ching in the collection case, it appears that Alfredo Ching was able to raise the conjugal nature of the property in both the trial court and appellate court. A perusal of the records reveals that petitioner Alfredo Ching filed a Motion for Reconsideration and to Quash Writ of Execution before the CFI of Manila.  In the motion, he specifically argued that the execution was invalid for having been enforced upon their conjugal property. Alfredo Ching raised this argument again on appeal in CA G.R. CV No. 02421.  Evidently, due process has been afforded to petitioners as regards the execution on their conjugal property.

Verily, the issue of the conjugal nature of the subject property has been passed upon by the courts and this Court several times; it is no longer a novel contention.  The Spouses Ching cannot, therefore, raise the same argument again and again.  The Spouses Ching could not even raise such an argument to bar or prevent the RTC from granting a writ of possession to the Bank or any other motion in furtherance or as a consequence of the issuance of such writ. From the foregoing, the Spouses Ching’s petition would logically fail. Sps. Alfredo and Encarnacion Ching vs. Family Savings Bank and Sheriff of Manila / Alfredo Ching vs. Family Savings Bank and the Sheriff of Manila, G.R. No. 167835 and G.R. No. 188480, November 15, 2010.

Judgment; res judicata; bar by prior judgment; no finality of judgment in absence of proper service. Under the rule of res judicata, a final judgment or decree on the merits by a court of competent jurisdiction is conclusive of the rights of the parties or their privies, in all later suits and on all points and matters determined in the previous suit.  The term literally means a “matter adjudged, judicially acted upon, or settled by judgment.”  The principle bars a subsequent suit involving the same parties, subject matter, and cause of action.  The rationale for the rule is that “public policy requires that controversies must be settled with finality at a given point in time.”

The doctrine of res judicata embraces two (2) concepts:  the first is “bar by prior judgment” under paragraph (b) of Rule 39, Section 47 of the Rules of Court, and the second is “conclusiveness of judgment” under paragraph (c) thereof.  Res judicata applies in the concept of “bar by prior judgment” if the following requisites concur: (1) the former judgment or order must be final; (2) the judgment or order must be on the merits; (3) the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; and (4) there must be, between the first and the second action, identity of parties, of subject matter and of causes of action.

The petitioners claim that res judicata under the first concept applies in the present case because all of the elements thereof are present.  In response, the respondent argues that res judicata did not set in as the first element is lacking.  We agree with the respondent.

The following provisions under Rule 13 of the Rules of Court define the proper modes of service of judgments:

SEC. 2. Filing and service, defined. – x x x

Service is the act of providing a party with a copy of the pleading or paper concerned. x x x

SEC. 5. Modes of service. – Service of pleadings, motions, notices, orders, judgments and other papers shall be made either personally or by mail.

SEC. 6. Personal service. – Service of the papers may be made by delivering personally a copy to the party or his counsel, or by leaving it in his office with his clerk or with a person having charge thereof. If no person is found in his office, or his office is not known, or he has no office, then by leaving the copy, between the hours of eight in the morning and six in the evening, at the party’s or counsel’s residence, if known, with a person of sufficient age and discretion then residing therein.   

SEC. 7. Service by mail. – Service by registered mail shall be made by depositing the copy in the office, in a sealed envelope, plainly addressed to the party or his counsel at his office, if known, otherwise at his residence, if known, with postage fully pre-paid, and with instructions to the postmaster to return the mail to the sender after ten (10) days if undelivered. If no registry service is available in the locality of either the sender or the addressee, service may be done by ordinary mail.

SEC. 8. Substituted service. – If service of pleadings, motions, notices, resolutions, orders and other papers cannot be made under the two preceding sections, the office and place of residence of the party or his counsel being unknown, service may be made by delivering the copy to the clerk of court, with proof of failure of both personal service and service by mail. The service is complete at the time of such delivery.

SEC. 9. Service of judgments, final orders or resolutions. –Judgments, final orders or resolutions shall be served either personally or by registered mail. When a party summoned by publication has failed to appear in the action, judgments, final orders or resolutions against him shall be served upon him also by publication at the expense of the prevailing party.

As a rule, judgments are sufficiently served when they are delivered personally, or through registered mail to the counsel of record, or by leaving them in his office with his clerk or with a person having charge thereof.  After service, a judgment or order which is not appealed nor made subject of a motion for reconsideration within the prescribed 15-day period attains finality.

In Philemploy Services and Resources, Inc. v. Rodriguez, the Court ruled that the Resolution of the National Labor Relations Commission, denying the respondent’s motion for reconsideration, cannot be deemed to have become final and executory as there is no conclusive proof of service of the said resolution.  In the words of the Court, “there was no proof of actual receipt of the notice of the registered mail by the respondent’s counsel.”  Based on these findings, the Court concluded that the CA properly acquired jurisdiction over the respondent’s petition for certiorari filed before it; in the absence of a reckoning date of the period provided by law for the filing of the petition, the Court could not assume that it was improperly or belatedly filed.

Similarly, in Tomawis v. Tabao-Cudang, the Court held that the decision of the Regional Trial Court did not become final and executory where, from the records, the respondent had not received a copy of the resolution denying her motion for reconsideration.  The Court also noted that there was no sufficient proof that the respondent actually received a copy of the said Order or that she indeed received a first notice. Thus, the Court concluded that there could be no valid basis for the issuance of the writ of execution as the decision never attained finality.

In the present case, we note that the December 16, 1986 Dismissal Order cannot be deemed to have become final and executory in view of the absence of a valid service, whether personally or via registered mail, on the respondent’s counsel.  We note in this regard that the petitioners do not dispute the CA finding that the “records failed to show that the private respondent was furnished with a copy of the said order of dismissal[.]” Accordingly, the Dismissal Order never attained finality.  Spouses Ernesto and Vicenta Topacio vs. Banco Filipino Savings and Mortgage Bank, G.R. No. 157644, November 17, 2010.

Jurisdiction; adherence to jurisdiction; exceptions. Lucia’s argument, that the RTC-Iriga is vested with jurisdiction to continue trying Civil Case No. IR-3128 until its final disposition, evidently falls out from a strained interpretation of the law and jurisprudence.  She contends that:

Since the RTC-Iriga has already obtained jurisdiction over the case it should continue exercising such jurisdiction until the final termination of the case.  The jurisdiction of a court once attached cannot be ousted by subsequent happenings or events, although of a character which would have prevented jurisdiction from attaching in the first instance, and the Court retains jurisdiction until it finally disposes of the case (Aruego Jr. v. Court of Appeals, 254 SCRA 711).

When a court has already obtained and is exercising jurisdiction over a controversy, its jurisdiction to proceed to final determination of the case is not affected by a new legislation transferring jurisdiction over such proceedings to another tribunal. (Alindao v. Joson, 264 SCRA 211).  Once jurisdiction is vested, the same is retained up to the end of the litigation (Bernate v. Court of Appeals, 263 SCRA 323).

The afore-quoted cases, cited by Lucia to bolster the plea for the continuance of her case, find no application in the case at bench.

Indeed, the Court recognizes the doctrine on adherence of jurisdiction.  Lucia, however, must be reminded that such principle is not without exceptions.  It is well to quote the ruling of the CA on this matter, thus:

This Court is not unmindful nor unaware of the doctrine on the adherence of jurisdiction.  However, the rule on adherence of jurisdiction is not absolute and has exceptions.  One of the exceptions is that when the change in jurisdiction is curative in character (Garcia v. Martinez, 90 SCRA 331 [1979]; Calderon, Sr. v. Court of Appeals, 100 SCRA 459 [1980]; Atlas Fertilizer Corporation v. Navarro, 149 SCRA 432 [1987]; Abad v. RTC of Manila, Br. Lll, 154 SCRA 664 [1987]).

For sure, Section 30, R.A. 7653 is curative in character when it declared that the liquidation court shall have jurisdiction in the same proceedings to assist in the adjudication of the disputed claims against the Bank.  The interpretation of this Section (formerly Section 29, R.A. 265) becomes more obvious in the light of its intent.  In Manalo v. Court of Appeals (366 SCRA 752, [2001]), the Supreme Court says:

xxx The requirement that all claims against the bank be pursued in the liquidation proceedings filed by the Central Bank is intended to prevent multiplicity of actions against the insolvent bank and designed to establish due process and orderliness in the liquidation of the bank, to obviate the proliferation of litigations and to avoid injustice and arbitrariness (citing Ong v. CA, 253 SCRA 105 [1996]).  The lawmaking body contemplated that for convenience, only one court, if possible, should pass upon the claims against the insolvent bank and that the liquidation court should assist the Superintendents of Banks and regulate his operations (citing Central Bank of the Philippines, et al. v. CA, et al., 163 SCRA 482 [1988]).

As regards Lucia’s contention that jurisdiction already attached when Civil Case No. IR-3128 was filed with, and jurisdiction obtained by, the RTC-Iriga prior to the filing of the liquidation case before the RTC-Makati, her stance fails to persuade this Court.  In refuting this assertion, respondent PDIC cited the case of Lipana v. Development Bank of Rizal where it was held that the time of the filing of the complaint is immaterial, viz:

It is the contention of petitioners, however, that the placing under receivership of Respondent Bank long after the filing of the complaint removed it from the doctrine in the said Morfe Case.

This contention is untenable.  The time of the filing of the complaint is immaterial.  It is the execution that will obviously prejudice the other depositors and creditors.  Moreover, as stated in the said Morfe case, the effect of the judgment is only to fix the amount of the debt, and not to give priority over other depositors and creditors.

The cited Morfe case held that “after the Monetary Board has declared that a bank is insolvent and has ordered it to cease operations, the Board becomes the trustee of its assets for the equal benefit of all the creditors, including depositors.  The assets of the insolvent banking institution are held in trust for the equal benefit of all creditors, and after its insolvency, one cannot obtain an advantage or a preference over another by an attachment, execution or otherwise.”

Thus, to allow Lucia’s case to proceed independently of the liquidation case, a possibility of favorable judgment and execution thereof against the assets of RBCI would not only prejudice the other creditors and depositors but would defeat the very purpose for which a liquidation court was constituted as well.  Lucia Barrameda Vda. De Ballesteros vs. Rural Bank of Canaman, Inc. represented by its Liquidator, The Philippine Deposit Insurance Corporation, G.R. No. 176260, November 24, 2010.

Jurisdiction; doctrine of primary jurisdiction. In the first place, respondents’ act of filing their complaint originally with the BLA-IPO is already in consonance with the doctrine of primary jurisdiction.  This Court has held that:

[i]n cases involving specialized disputes, the practice has been to refer the same to an administrative agency of special competence in observance of the doctrine of primary jurisdiction. The Court has ratiocinated that it cannot or will not determine a controversy involving a question which is within the jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative tribunal to determine technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the premises of the regulatory statute administered. The objective of the doctrine of primary jurisdiction is to guide a court in determining whether it should refrain from exercising its jurisdiction until after an administrative agency has determined some question or some aspect of some question arising in the proceeding before the court. It applies where the claim is originally cognizable in the courts and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, has been placed within the special competence of an administrative body; in such case, the judicial process is suspended pending referral of such issues to the administrative body for its view.

Based on the foregoing, the Court finds that respondents’ initial filing of their complaint with the BLA-IPO, instead of the regular courts, is in keeping with the doctrine of primary jurisdiction owing to the fact that the determination of the basic issue of whether petitioner violated respondents’ patent rights requires the exercise by the IPO of sound administrative discretion which is based on the agency’s special competence, knowledge and experience.

However, the propriety of extending the life of the writ of preliminary injunction issued by the BLA-IPO in the exercise of its quasi-judicial power is no longer a matter that falls within the jurisdiction of the said administrative agency, particularly  that of its Director General. The resolution of this issue which was raised before the CA does not demand the exercise by the IPO of sound administrative discretion requiring special knowledge, experience and services in determining technical and intricate matters of fact.  It is settled that one of the exceptions to the doctrine of primary jurisdiction is where the question involved is purely legal and will ultimately have to be decided by the courts of justice.  This is the case with respect to the issue raised in the petition filed with the CA.

Moreover, as discussed earlier, RA 8293 and its implementing rules and regulations do not provide for a procedural remedy to question interlocutory orders issued by the BLA-IPO. In this regard, it bears to reiterate that the judicial power of the courts, as provided for under the Constitution, includes the authority of the courts to determine in an appropriate action the validity of the acts of the political departments.  Judicial power also includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.  Hence, the CA, and not the IPO Director General, has jurisdiction to determine whether the BLA-IPO committed grave abuse of discretion in denying respondents’ motion to extend the effectivity of the writ of preliminary injunction which the said office earlier issued. Phil Pharmawealth, Inc. vs. Pfizer, Inc and Pfizer (Phil.) Inc., G.R. No. 167715, November 17, 2010.

Jurisdiction; forcible entry. Under Batas Pambansa Blg. 129, as amended by R.A. No. 7691, the MTC shall have exclusive original jurisdiction over cases of forcible entry and unlawful detainer.  The RRSP governs the remedial aspects of these suits.

Under Section 50 of R.A. No. 6657, as well as Section 34 of Executive Order No. 129-A, the DARAB has primary and exclusive jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes involving the implementation of the Comprehensive Agrarian Reform Program, and other agrarian laws and their implementing rules and regulations.  An agrarian dispute refers to any controversy relating to, among others, tenancy over lands devoted to agriculture.  For a case to involve an agrarian dispute, the following essential requisites of an agricultural tenancy relationship must be present: (1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of harvest or payment of rental.

In the present case, the petitioner, as one of the plaintiffs in the MTC, made the following allegations and prayer in the complaint:

3.     Plaintiffs are the registered owners of a parcel of land covered by and described in Transfer Certificate of Title Numbered 34267, with an area of five (5) hectares, more or less situated at Bo. Soledad, Sta. Rosa, Nueva Ecija. x  x  x;

4.     That so defendant thru stealth, strategy and without the knowledge, or consent of administrator  x  x  x  much more of the herein plaintiffs, unlawfully entered and occupied said parcel of land;

5.     Inspite of  x  x  x  demands, defendant Germino, refused and up to the filing of this complaint, still refused to vacate the same;

6.     The continuos (sic) and unabated occupancy of the land by the defendant would work and cause prejudice and irreparable damage and injury to the plaintiffs unless a writ of preliminary injunction is issued;

7.     This prejudice, damage or injury consist of disturbance of property rights tantamount to deprivation of ownership or any of its attributes without due process of law, a diminution of plaintiffs’ property rights or dominion over the parcel of land subject of this dispute, since they are deprived of freely entering or possessing the same;

8.     The plaintiffs are entitled to the relief demanded or prayed for, and the whole or part of such relief/s consist of immediately or permanently RESTRAINING, ENJOINING or STOPPING the defendant or any person/s acting in his behalf, from entering, occupying, or in any manner committing, performing or suffering to be committed or performed for him, any act indicative of, or tending to show any color of possession in or about the  tenement, premises or subject of this suit, such as described in par. 3 of this complaint;

9.     Plaintiffs are ready and willing to post a bond answerable to any damage/s should the issuance of the writ  x  x  x;

10.    As a consequence of defendant’s malevolent refusal to vacate the premises of the land in dispute, plaintiffs incurred litigation expenses of P1,500.00, availing for the purpose the assistance of a counsel at an agreed honorarium of P5,000.00 and P250.00 per appearance/ not to mention the moral damages incurred due to sleepless nights and mental anxiety, including exemplary damages, the award and amount of which are left to the sound discretion of this Honorable Court.

P R A Y E R

WHEREFORE, it is respectfully prayed of this Honorable Court that pending the resolution of the issue in this case, a restraining order be issued RESTRAINING, ENJOINING, or STOPPING the defendant or any person/s acting in his behalf, from ENTERING OR OCCUPYING the parcel of land, or any portion thereof, described in paragraph 3 of this complaint, nor in any manner committing, performing or suffering to be committed or, performed for him, by himself or thru another, any act indicative of, or tending to show any color of possession in or about the premises subject of this suit;

THEREAFTER, making said writ of preliminary injunction PERMANENT; and on plaintiffs’ damages, judgment be rendered ordering the defendant to pay to the plaintiffs the sum alleged in paragraph 10 above.

GENERAL RELIEFS ARE LIKEWISE PRAYED FOR.

Based on these allegations and reliefs prayed, it is clear that the action in the MTC was for forcible entry. Jose Mendoza vs. Narciso Germino and Benigno Germino, G.R. No. 165676, November 22, 2010.

Jurisdiction; how determined. It is a basic rule that jurisdiction over the subject matter is determined by the allegations in the complaint.  It is determined exclusively by the Constitution and the law. It cannot be conferred by the voluntary act or agreement of the parties, or acquired through or waived, enlarged or diminished by their act or omission, nor conferred by the acquiescence of the court. Well to emphasize, it is neither for the court nor the parties to violate or disregard the rule, this matter being legislative in character.  Jose Mendoza vs. Narciso Germino and Benigno Germino, G.R. No. 165676, November 22, 2010.

Jurisdiction; liquidation proceeding involving bank. Anent the second issue, Lucia faults the CA in directing the consolidation of Civil Case No. IR-3128 with Special Proceedings No. M-5290.  The CA committed no error.  Lucia’s complaint involving annulment of deed of mortgage and damages falls within the purview of a disputed claim in contemplation of Section 30 of R.A. 7653 (The New Central Bank Act). The jurisdiction should be lodged with the liquidation court. Section 30 provides:

Sec. 30.  Proceedings in Receivership and Liquidation. – Whenever, upon report of the head of the supervising or examining department, the Monetary Board finds that a bank or quasi-bank:

(a)    is unable to pay its liabilities as they become due in the ordinary course of business: Provided, That this shall not include inability to pay caused by extraordinary demands induced by financial panic in the banking community;

(b)    has insufficient realizable assets, as determined by the Bangko Sentral, to meet its liabilities; or

(c) cannot continue in business without involving probable losses to its depositors or creditors; or

(d)    has wilfully violated a cease and desist order under Section 37 that has become final, involving acts or transactions which amount to fraud or a dissipation of the assets of the institution; in which cases, the Monetary Board may summarily and without need for prior hearing forbid the institution from doing business in the Philippines and designate the Philippine Deposit Insurance Corporation as receiver of the banking institution.

For a quasi-bank, any person of recognized competence in banking or finance may be designated as receiver.

The receiver shall immediately gather and take charge of all the assets and liabilities of the institution, administer the same for the benefit of its creditors, and exercise the general powers of a receiver under the Revised Rules of Court but shall not, with the exception of administrative expenditures, pay or commit any act that will involve the transfer or disposition of any asset of the institution: Provided, That the receiver may deposit or place the funds of the institution in non-speculative investments.  The receiver shall determine as soon as possible, but not later than ninety (90) days from take over, whether the institution may be rehabilitated or otherwise placed in such a condition that it may be permitted to resume business with safety to its depositors and creditors and the general public: Provided, That any determination for the resumption of business of the institution shall be subject to prior approval of the Monetary Board.

If the receiver determines that the institution cannot be rehabilitated or permitted to resume business in accordance with the next preceding paragraph, the Monetary Board shall notify in writing the board of directors of its findings and direct the receiver to proceed with the liquidation of the institution.  The receiver shall:

(1)    file ex parte with the proper regional trial court, and without requirement of prior notice or any other action, a petition for assistance in the liquidation of the institution pursuant to a liquidation plan adopted by the Philippine Deposit Insurance Corporation for general application to all closed banks.  In case of quasi-banks, the liquidation plan shall be adopted by the Monetary Board.  Upon acquiring jurisdiction, the court shall, upon motion by the receiver after due notice, adjudicate disputed claims against the institution, assist the enforcement of individual liabilities of the stockholders, directors and officers, and decide on other issues as may be material to implement the liquidation plan adopted.  The receiver shall pay the cost of the proceedings from the assets of the institution.

(2)    convert the assets of the institution to money, dispose of the same to creditors and other parties, for the purpose of paying the debts of such institution in accordance with the rules on concurrence and preference of credit under the Civil Code of the Philippines and he may, in the name of the institution, and with the assistance of counsel as he may retain, institute such actions as may be necessary to collect and recover accounts and assets of, or defend any action against, the institution.  The assets of an institution under receivership or liquidation shall be deemed in custodia legis in the hands of the receiver and shall, from the moment the institution was placed under such receivership or liquidation, be exempt from any order of garnishment, levy, attachment, or execution. [Emphasis supplied]

x x x

“Disputed claims” refers to all claims, whether they be against the assets of the insolvent bank, for specific performance, breach of contract, damages, or whatever. Lucia’s action being a claim against RBCI can properly be consolidated with the liquidation proceedings before the RTC-Makati.  A liquidation proceeding has been explained in the case of In Re: Petition For Assistance in the Liquidation of the Rural Bank of BOKOD (Benguet), Inc. v. Bureau of Internal Revenue as follows:

A liquidation proceeding is a single proceeding which consists of a number of cases properly classified as “claims.” It is basically a two-phased proceeding. The first phase is concerned with the approval and disapproval of claims.  Upon the approval of the petition seeking the assistance of the proper court in the liquidation of a closed entity, all money claims against the bank are required to be filed with the liquidation court. This phase may end with the declaration by the liquidation court that the claim is not proper or without basis. On the other hand, it may also end with the liquidation court allowing the claim. In the latter case, the claim shall be classified whether it is ordinary or preferred, and thereafter included Liquidator. In either case, the order allowing or disallowing a particular claim is final order, and may be appealed by the party aggrieved thereby.

The second phase involves the approval by the Court of the distribution plan prepared by the duly appointed liquidator. The distribution plan specifies in detail the total amount available for distribution to creditors whose claim were earlier allowed. The Order finally disposes of the issue of how much property is available for disposal. Moreover, it ushers in the final phase of the liquidation proceeding – payment of all allowed claims in accordance with the order of legal priority and the approved distribution plan.

x x x

A liquidation proceeding is commenced by the filing of a single petition by the Solicitor General with a court of competent jurisdiction entitled, “Petition for Assistance in the Liquidation of e.g., Pacific Banking Corporation.” All claims against the insolvent are required to be filed with the liquidation court. Although the claims are litigated in the same proceeding, the treatment is individual. Each claim is heard separately. And the Order issued relative to a particular claim applies only to said claim, leaving the other claims unaffected, as each claim is considered separate and distinct from the others. x x x [Emphasis supplied.]

It is clear, therefore, that the liquidation court has jurisdiction over all claims, including that of Lucia against the insolvent bank.  As declared in Miranda v. Philippine Deposit Insurance Corporation, regular courts do not have jurisdiction over actions filed by claimants against an insolvent bank, unless there is a clear showing that the action taken by the BSP, through the Monetary Board, in the closure of financial institutions was in excess of jurisdiction, or with grave abuse of discretion.  The same is not obtaining in this present case.

The power and authority of the Monetary Board to close banks and liquidate them thereafter when public interest so requires is an exercise of the police power of the State.  Police power, however, is subject to judicial inquiry.  It may not be exercised arbitrarily or unreasonably and could be set aside if it is either capricious, discriminatory, whimsical, arbitrary, unjust, or is tantamount to a denial of due process and equal protection clauses of the Constitution.

In sum, this Court holds that the consolidation is proper considering that the liquidation court has jurisdiction over Lucia’s action.  It would be more in keeping with law and equity if Lucia’s case is consolidated with the liquidation case in order to expeditiously determine whether she is entitled to recover the property subject of mortgage from RBCI and, if so, how much she is entitled to receive from the remaining assets of the bank.  Lucia Barrameda Vda. De Ballesteros vs. Rural Bank of Canaman, Inc. represented by its Liquidator, The Philippine Deposit Insurance Corporation, G.R. No. 176260, November 24, 2010.

Jurisdiction; MTC not divested of jurisdiction by mere allegation of tenancy as defense. Although respondent Narciso averred tenancy as an affirmative and/or special defense in his answer, this did not automatically divest the MTC of jurisdiction over the complaint. It continued to have the authority to hear the case precisely to determine whether it had jurisdiction to dispose of the ejectment suit on its merits. After all, jurisdiction is not affected by the pleas or the theories set up by the defendant in an answer or a motion to dismiss. Otherwise, jurisdiction would become dependent almost entirely upon the whims of the defendant.

Under the RRSP, the MTC is duty-bound to conduct a preliminary conference and, if necessary, to receive evidence to determine if such tenancy relationship had, in fact, been shown to be the real issue. The MTC may even opt to conduct a hearing on the special and affirmative defense of the defendant, although under the RRSP, such a hearing is not a matter of right. If it is shown during the hearing or conference that, indeed, tenancy is the issue, the MTC should dismiss the case for lack of jurisdiction.

In the present case, instead of conducting a preliminary conference, the MTC immediately referred the case to the DARAB. This was contrary to the rules.  Besides, Section 2 of P.D. No. 316, which required the referral of a land dispute case to the Department of Agrarian Reform for the preliminary determination of the existence of an agricultural tenancy relationship, has indeed been repealed by Section 76 of R.A. No. 6657 in 1988.

Neither did the amendment of the complaint confer jurisdiction on the DARAB.  The plaintiffs alleged in the amended complaint that the subject property was previously tilled by Efren Bernardo, and the respondents took possession by strategy and stealth, without their knowledge and consent. In the absence of any allegation of a tenancy relationship between the parties, the action was for recovery of possession of real property that was within the jurisdiction of the regular courts.  The CA, therefore, committed no reversible error in setting aside the DARAB decision. While we lament the lapse of time this forcible entry case has been pending resolution, we are not in a position to resolve the dispute between the parties since the evidence required in courts is different from that of administrative agencies. Jose Mendoza vs. Narciso Germino and Benigno Germino, G.R. No. 165676, November 22, 2010.

Mandamus; not available to compel grant of injunctive relief. Petitioner has made an extensive, effortful and elaborate essay on the factual aspects not only of the Petition for Redemption, but also of the Petition for Coverage and the Petition for Revocation of Exemption Order — particularly on the controverted nature of Eutiquio’s possession of the subject land.  That issue, however, is not for this Court to address, and certainly not in the instant petition which brings only the issue of whether the Court of Appeals was correct in declining to issue the writ of mandamus and in not compelling the DARAB to resolve Eutiquio’s motion for reconsideration in the Petition for Redemption and the DAR to issue the cease-and-desist order, or writ of preliminary injunction prayed for, in the Petition for Redemption, Petition for Coverage and Petition for Revocation.  But perhaps as a last-ditch attempt to turn the table in his favor following the unfavorable issuance of the February 23, 2005 DAR Order denying the “Urgent Ex Parte Motion for the Issuance of Writ of Preliminary Injunction/Cease-and-Desist Order” and of the April 20, 2005 DARAB Resolution denying Eutiquio’s motion for reconsideration in the Petition for Redemption, petitioner now pursues a different theory by claiming that the DAR and the DARAB have exceeded their authority and committed grave abuse of discretion and manifest injustice in issuing the said order and resolution.  Verily, petitioner is grasping at straws.

Established is the procedural law precept that a writ of mandamus generally lies to compel the performance of a ministerial duty, but not the performance of an official act or duty which necessarily involves the exercise of judgment.  Thus, when the act sought to be performed involves the exercise of discretion, the respondent may only be directed by mandamus to act but not to act in one way or the other.  It is, nonetheless, also available to compel action, when refused, in matters involving judgment and discretion, but not to direct the exercise of judgment in a particular manner.  However, this rule admits of exceptions.  Mandamus is the proper remedy in cases where there is gross abuse of discretion, manifest injustice, or palpable excess of authority.

In Valley Trading Co., Inc. v. Court of First Instance of Isabela, it was held that the issuance of a writ of preliminary injunction is addressed to the sound discretion of the issuing authority, conditioned on the existence of a clear and positive right of the applicant which should be protected.  It is an extraordinary peremptory remedy that may be availed of only upon the grounds expressly provided by law.  In Government Service Insurance System v. Florendo and Searth Commodities Corp. v. Court of Appeals, it was also held that the issuance of a writ of preliminary injunction as an ancillary or preventive remedy to secure the rights of a party in a pending case is entirely within the discretion of the tribunal taking cognizance of the case, limited only by the requirement that the use of such discretion be based on ground and in the manner provided by law. Bataclan v. Court of Appeals also points out that although sufficient discretion is allowed in the grant of the relief, extreme caution must be taken in determining the necessity for the grant of the relief prayed for, because it would necessarily affect the protective rights of the parties in a case.

Clearly, the grant of an injunctive relief in this case is not properly compellable by mandamus inasmuch as it requires discretion and judgment on the part of both the DAR and the DARAB to find whether petitioner has a clear legal right that needs to be protected and that the acts of SMPHI are violative of such right.  On this score alone, the Court of Appeals cannot be faulted for its refusal to issue the writ of mandamus prayed for.  Froilan Dejuras vs. Hon. Rene C. Villa, et al., G.R. No. 173428, November 22, 2010.

Parties; real party in interest. On the first ground, Pineda argues that the CA gravely abused its discretion in entertaining the petition for certiorari of DepEd considering that Asec. Montesa was not the proper party to file the petition.  She adds that, even assuming that DepEd had the locus standi to file said petition before the CA, Asec. Montesa was not duly authorized to do so.  The Court cannot accommodate the view of Pineda.

In her petition for certiorari before the RTC, Pineda impleaded Usec. Gascon, Dr. Quiñones and Ms. Camilo in their official capacities as Undersecretary of DepEd, Division Superintendent and Principal of Lakandula High School, respectively. Although the petition mentioned that Usec. Gascon was merely a nominal party, it stated therein that Dr. Quiñones and Ms. Camilo were being sued for “having been tasked to immediately carry out” his order of February 11, 2005. The Court is of the view that DepEd was the proper party and Usec. Gascon, Dr. Quiñones and Ms. Camilo were just its representatives.  Thus, they were sued in their official capacities.

A review of Usec. Gascon’s order discloses that the cancellation of Pineda’s August-MOA was pursuant to DepEd’s existing guidelines on the turn over of school canteens to teachers’ cooperatives, laid out in Department Order No. 95, series of 1998. He was simply applying a DepEd policy when he ordered the August-MOA cancelled. So, what was actually being assailed by Pineda in her petition before the RTC was the implementation of DepEd’s existing guidelines with the nullification of the August-MOA entered into by Dr. Blas, then principal of LHS.  As Asec. Montesa merely took over the functions of Usec. Gascon, he is certainly authorized to institute the petition before the CA in order to advance and pursue the policies of his office – DepEd. Applying Rule 3, Section 2 of the Revised Rules of Court, DepEd is the real party in interest for it will surely be affected, favorably or unfavorably, by the final resolution of the case before the RTC.

Thus, it would be absurd not to recognize the legal standing of Asec. Montesa, as representative of DepEd, but consider Dr. Quiñones and Ms. Camilo as the proper parties when they were merely tasked to implement a directive emanating from a superior official (Asec. Montesa) of the DepEd.  Michelle I. Pineda vs. Court of Appeals and the Department of Education, etc., G.R. No. 181643, November 17, 2010.

Pleading; certification of non-forum shopping by petitioner corporation. Respondents To Chip, Yap and Balila argue that the instant petition should be dismissed outright as the verification and certification of non-forum shopping was executed only by petitioner Lydia Sia in her personal capacity, without the participation of Cebu Bionic.  The Court is not persuaded.

Except for the powers which are expressly conferred on it by the Corporation Code and those that are implied by or are incidental to its existence, a corporation has no powers.  It exercises its powers through its board of directors and/or its duly authorized officers and agents.  Thus, its power to sue and be sued in any court is lodged with the board of directors that exercises its corporate powers.  Physical acts, like the signing of documents, can be performed only by natural persons duly authorized for the purpose by corporate by-laws or by a specific act of the board of directors.

In this case, respondents To Chip, Yap and Balila obviously overlooked the Secretary’s Certificate attached to the instant petition, which was executed by the Corporate Secretary of Cebu Bionic.  Unequivocally stated therein was the fact that the Board of Directors of Cebu Bionic held a special meeting on July 26, 2002 and they thereby approved a Resolution authorizing Lydia Sia to elevate the present case to this Court in behalf of Cebu Bionic, to wit:

Whereas, the board appointed LYDIA I. SIA to act and in behalf of the corporation to file the CERTIORARI with the Supreme Court in relations to the decision of the Court of Appeals dated July 5, 2002 which reversed its owjudgment earlier promulgated on February 14, 2001 entitled CEBU BIONIC BUILDERS SUPPLY, INC. and LYDIA SIA, (Petitioners- Appellants) –versus – THE DEVELOPMENT BANK OF THE PHILIPPINES, JOSE TO CHIP, PATRICIO YAP and ROGER BALILA (Respondents- Appelles), docketed CA-G.R. NO. 57216.

Whereas, on mass unanimously motion of all members of directors present hereby approved the appointment of LYDIA I. SIA to act and sign all papers in connection of CA-G.R. NO. 57216.

Resolved and it is hereby resolve to appoint and authorized LYDIA I. SIA to sign and file with the SUPREME COURT in connection to decision of the Court of Appeals as above mention.

Cebu Bionic Builders Supply, Inc. and Lydia Sia vs. Development Bank of the Philippines, et al., G.R. No. 154366, November 17, 2010.

Pleading; new issue raised in pleading which could have been raised in previous pleadings. Still on the second ground, Pineda points out that the March 14, 2005 Order of the RTC was received by the DepEd on March 16, 2005 and the latter filed its petition before the CA on June 28, 2005, which was beyond the sixty (60)-day reglementary period. Going over DepEd’s petition before the CA, it appears that DepEd reckoned the 60-day period from June 28, 2005, the date of its receipt of the June 7, 2005 Order of the RTC. Pineda’s Comment and Memorandum, however, did not raise this procedural lapse as an issue. Instead, Pineda put forth her own arguments in support of the two RTC orders.  The rule in pleadings and practice is that that no new issue in a case can be raised in a pleading which by due diligence could have been raised in previous pleadings.  Thus, it is too late in the day for Pineda to question the procedural lapse.  Michelle I. Pineda vs. Court of Appeals and the Department of Education, etc., G.R. No. 181643, November 17, 2010.

Procedural rules; liberal application; failure to file motion for reconsideration seasonably excused. First off, petitioners fault the Court of Appeals for admitting the Motion for Reconsideration of its Decision dated February 14, 2001, which was filed by respondents To Chip, Yap and Balila more than six months after receipt of the said decision.  The motion was eventually granted and the Court of Appeals issued its assailed Amended Decision, ruling in favor of respondents.

Indeed, the appellate court’s Decision dated February 14, 2001 would have ordinarily attained finality for failure of respondents to seasonably file their Motion for Reconsideration thereon.  However, we agree with the Court of Appeals that the higher interest of substantial justice will be better served if respondents’ procedural lapse will be excused.

Verily, we had occasion to apply this liberality in the application of procedural rules in Barnes v. Padilla where we aptly declared that –

The failure of the petitioner to file his motion for reconsideration within the period fixed by law renders the decision final and executory.  Such failure carries with it the result that no court can exercise appellate jurisdiction to review the case.  Phrased elsewise, a final and executory judgment can no longer be attacked by any of the parties or be modified, directly or indirectly, even by the highest court of the land.

However, this Court has relaxed this rule in order to serve substantial justice considering (a) matters of life, liberty, honor or property, (b) the existence of special or compelling circumstances, (c) the merits of the case, (d) a cause not entirely attributable to the fault or negligence of the party favored by the suspension of the rules, (e) a lack of any showing that the review sought is merely frivolous and dilatory, and (f) the other party will not be unjustly prejudiced thereby.

In this case, what are involved are the property rights of the parties given that, ultimately, the fundamental issue to be determined is who among the petitioners and respondents To Chip, Yap and Balila has the better right to purchase the subject properties.  More importantly, the merits of the case sufficiently called for the suspension of the rules in order to settle conclusively the rights and obligations of the parties herein.  Cebu Bionic Builders Supply, Inc. and Lydia Sia vs. Development Bank of the Philippines, et al., G.R. No. 154366, November 17, 2010.

Procedural rules; liberal application or suspension only for persuasive reasons and only in meritorious cases. The emerging trend of jurisprudence is more inclined to the liberal and flexible application of the Rules of Court. However, we have not been remiss in reminding the bench and the bar that zealous compliance with the rules is still the general course of action. Rules of procedure are in place to ensure the orderly, just, and speedy dispensation of cases; to this end,  inflexibility or liberality must be weighed. The relaxation or suspension of procedural rules or the exemption of a case from their operation is warranted only by compelling reasons or when the purpose of justice requires it.  As early as 1998, in Hon. Fortich v. Hon. Corona, we expounded on these guiding principles:

Procedural rules, we must stress, should be treated with utmost respect and due regard since they are designed to facilitate the adjudication of cases to remedy the worsening problem of delay in the resolution of rival claims and in the administration of justice.  The requirement is in pursuance to the bill of rights inscribed in the Constitution which guarantees that “all persons shall have a right to the speedy disposition of their cases before all judicial, quasi-judicial and administrative bodies.” The adjudicatory bodies and the parties to a case are thus enjoined to abide strictly by the rules.  While it is true that a litigation is not a game of technicalities, it is equally true that every case must be prosecuted in accordance with the prescribed procedure to ensure an orderly and speedy administration of justice.  There have been some instances wherein this Court allowed a relaxation in the application of the rules, but this flexibility was “never intended to forge a bastion for erring litigants to violate the rules with impunity.”  A liberal interpretation and application of the rules of procedure can be resorted to only in proper cases and under justifiable causes and circumstances.

In Sebastian v. Hon. Morales, we straightened out the misconception that the enforcement of procedural rules should never be permitted if it would prejudice the substantive rights of litigants:

Under Rule 1, Section 6 of the 1997 Rules of Civil Procedure, liberal construction of the rules is the controlling principle to effect substantial justice. Thus, litigations should, as much as possible, be decided on their merits and not on technicalities. This does not mean, however, that procedural rules are to be ignored or disdained at will to suit the convenience of a party. Procedural law has its own rationale in the orderly administration of justice, namely, to ensure the effective enforcement of substantive rights by providing for a system that obviates arbitrariness, caprice, despotism, or whimsicality in the settlement of disputes. Hence, it is a mistake to suppose that substantive law and procedural law are contradictory to each other, or as often suggested, that enforcement of procedural rules should never be permitted if it would result in prejudice to the substantive rights of the litigants.

x x x.  Hence, rules of procedure must be faithfully followed except only when for persuasive reasons, they may be relaxed to relieve a litigant of an injustice not commensurate with his failure to comply with the prescribed procedure.  x x x.

Indeed, the primordial policy is a faithful observance of the Rules of Court, and their relaxation or suspension should only be for persuasive reasons and only in meritorious cases, to relieve a litigant of an injustice not commensurate with the degree of his thoughtlessness in not complying with the procedure prescribed.  Further, a bare invocation of “the interest of substantial justice” will not suffice to override a stringent implementation of the rules.

A reading of the CA’s Decision readily shows that the leniency it granted GOODLAND was merely anchored on substantial justice. The CA overlooked GOODLAND’s failure to advance meritorious reasons to support its plea for the relaxation of Rule 138, Section 26. The fact that GOODLAND stands to lose a valuable property is inadequate to dispense with the exacting imposition of a rather basic rule.  More importantly, the CA failed to realize that the ultimate consequences that will come about should GOODLAND’s appeal proceed would in fact contravene substantial justice. The CA and, eventually, this Court will just re-litigate an otherwise non-litigious matter and thereby compound the delay GOODLAND attempts to perpetrate in order to prevent AUB from rightfully taking possession of the property. Asia United Bank vs. Goodland Company, Inc., G.R. No. 188051, November 22, 2010.

Procedural rules; subsequent and substantial compliance.  The Spouses Ching contend, among other things, that their subsequent submission of the documents, which the CA deemed relevant and pertinent to the petition in G.R. No. 167835, constituted substantial compliance with the Rules.  Consequently, by invoking strict compliance with the Rules in dismissing the petition and denying the motion for reconsideration, the CA relied more on technicalities than resolving the case on the merits.  The Bank, on the other hand, argues that the resolution of the CA dismissing the petition or failure o attach all relevant and pertinent leadings and documents has legal basis, totally substantiated by the facts of the case, and supported by jurisprudence.

Indeed, this Court has maintained that the subsequent and substantial compliance of a party-litigant may warrant the relaxation of the rules of procedure.  Thus, in Jaro v. Court of Appeals, it was elucidated that:

x x x In Cusi-Hernandez v. Diaz and Piglas-Kamao v. National Labor Relations Commission, we ruled that the subsequent submission of the missing documents with the motion for reconsideration amounts to substantial compliance. The reasons behind the failure of petitioners in these two cases to comply with the required attachments were no longer scrutinized. What we found noteworthy in each case was the fact that petitioners substantially complied with the formal requirements. We ordered the remand of the petitions in these cases to the Court of Appeals, stressing the ruling that by precipitately dismissing the petitions “the appellate court clearly put a premium on technicalities at the expense of a just resolution of the case.”

We cannot see why the same leniency cannot be extended to petitioner. x x x

If we were to apply the rules of procedure in a very rigid and technical sense, as what the Court of Appeals would have it in this case, the ends of justice would be defeated. In Cusi-Hernandez v. Diaz, where the formal requirements were liberally construed and substantial compliance was recognized, we explained that rules of procedure are mere tools designed to expedite the decision or resolution of cases and other matters pending in court. Hence, a strict and rigid application of technicalities that tend to frustrate rather than promote substantial justice must be avoided. We further declared that:

Cases should be determined on the merits, after full opportunity to all parties for ventilation of their causes and defenses, rather than on technicality or some procedural imperfections. In that way, the ends of justice would be served better.

In the similar case of Piglas-Kamao v. National Labor Relations Commission, we stressed the policy of the courts to encourage the full adjudication of the merits of an appeal.

In the case at bar, the CA dismissed the petition in CA-G.R. SP No. 87217 for the Spouses Ching’s failure to attach copies of all pleading and documents which the CA deemed relevant to the petition.  However, in their Motion for Reconsideration, the Spouses Ching stressed that they have effectively complied and cured their procedural lapses by submitting all the pleadings and documents required by the CA in their Amended Petition.  The Spouses Ching even explained that the said documents and pleadings were not relevant and pertinent to the petition, yet they still submitted them.  Hence, the amended petition filed by the Spouses Ching should have been given due course by the CA.  Nonetheless, this Court deems that the ends of justice would be better served if the issues raised by the Spouses Ching in their petition before the CA in CA-G.R. SP No. 87217 be resolved in the present petition. Sps. Alfredo and Encarnacion Ching vs. Family Savings Bank and Sheriff of Manila / Alfredo Ching vs. Family Savings Bank and the Sheriff of Manila, G.R. No. 167835 and G.R. No. 188480, November 15, 2010.

Summary judgment; partial summary judgment. PBB’s motion for partial summary judgment against respondent Chua was based on Section 1, Rule 35 of the Rules, which provides:

Section 1.  Summary Judgment for claimant. - A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has been served, move with supporting affidavits, depositions or admissions for a summary judgment in his favor upon all or any part thereof.

A summary judgment, or accelerated judgment, is a procedural technique to promptly dispose of cases where the facts appear undisputed and certain from the pleadings, depositions, admissions and affidavits on record, or for weeding out sham claims or defenses at an early stage of the litigation to avoid the expense and loss of time involved in a trial.  When the pleadings on file show that there are no genuine issues of fact to be tried, the Rules allow a party to obtain immediate relief by way of summary judgment, that is, when the facts are not in dispute, the court is allowed to decide the case summarily by applying the law to the material facts.

The rendition by the court of a summary judgment does not always result in the full adjudication of all the issues raised in a case. For these instances, Section 4, Rule 35 of the Rules provides:

Section 4. Case not fully adjudicated on motion. – If on motion under this Rule, judgment is not rendered upon the whole case or for all the reliefs sought and a trial is necessary, the court at the hearing of the motion, by examining the pleadings and the evidence before it and by interrogating counsel shall ascertain what material facts exist without substantial controversy and what are actually and in good faith controverted. It shall thereupon make an order specifying the facts that appear without substantial controversy, including the extent to which the amount of damages or other relief is not in controversy, and directing such further proceedings in the action as are just. The facts so specified shall be deemed established, and the trial shall be conducted on the controverted facts accordingly.

This is what is referred to as a partial summary judgment. A careful reading of this section reveals that a partial summary judgment was never intended to be considered a “final judgment,” as it does not  “[put] an end to an action at law by declaring that the plaintiff either has or has not entitled himself to recover the remedy he sues for.”  The Rules provide for a partial summary judgment as a means to simplify the trial process by allowing the court to focus the trial only on the assailed facts, considering as established those facts which are not in dispute.  Philippine Business Bank vs. Felipe Chua, G.R. No. 178899, November 15, 2010.

Summary judgment; partial summary judgment; certiorari. PBB also maintains that the partial summary judgment attained finality when respondent Chua failed to file a certiorari petition, citing the last paragraph of Section 1, Rule 41 of the Rules as basis. We quote:

Section 1. Subject of appeal. – An appeal maybe taken from a judgment or final order that completely disposes of the case, or of a particular matter therein when declared by these Rules to be appealable.

No appeal may be taken from:

x  x  x  x

(g) A judgment or final order for or against one or more of several parties or in separate claims, counterclaims, cross-claims and third party complaints, while the main case is pending, unless the court allows an appeal therefrom;

x  x  x  x

In all the above instances where the judgment, or final order is not appealable, the aggrieved party may file an appropriate special civil action under Rule 65.

Contrary to PBB’s contention, however, certiorari was not the proper recourse for respondent Chua. The propriety of the summary judgment may be corrected only on appeal or other direct review, not a petition for certiorari, since it imputes error on the lower court’s judgment. It is well-settled that certiorari is not available to correct errors of procedure or mistakes in the judge’s findings and conclusions of law and fact. As we explained in Apostol v. Court of Appeals:

As a legal recourse, the special civil action of certiorari is a limited form of review. The jurisdiction of this Court is narrow in scope; it is restricted to resolving errors of jurisdiction, not errors of judgment. Indeed, as long as the courts below act within their jurisdiction, alleged errors committed in the exercise of their discretion will amount to mere errors of judgment correctable by an appeal or a petition for review.

In light of these findings, we affirm the CA’s ruling that the partial summary judgment is an interlocutory order which could not become a final and executory judgment, notwithstanding respondent Chua’s failure to file a certiorari petition to challenge the judgment. Accordingly, the RTC grievously erred when it issued the writ of execution against respondent Chua.

In view of this conclusion, we find it unnecessary to resolve the issue raised by respondent Chua on the validity of the RTC’s appointment of a special sheriff for the implementation of the execution writ.

As a final point, we note that respondent Chua has raised with this Court the issue of the propriety of the partial summary judgment issued by the RTC. Notably, respondent Chua never raised this issue in his petition for certiorari before the CA. It is well settled that no question will be entertained on appeal unless it has been raised in the proceedings below.  Basic considerations of due process impel the adoption of this rule.

Furthermore, this issue would be better resolved in the proper appeal, to be taken by the parties once the court a quo has completely resolved all the issues involved in the present case in a final judgment. If we were to resolve this issue now, we would be preempting the CA, which has primary jurisdiction over this issue.

Lastly, taking jurisdiction over this issue now would only result in multiple appeals from a single case which concerns the same, or integrated, causes of action. As we said in Santos v. People:

Another recognized reason of the law in permitting appeal only from a final order or judgment, and not from an interlocutory or incidental one, is to avoid multiplicity of appeals in a single action, which must necessarily suspend the hearing and decision on the merits of the case during the pendency of the appeal.  If such appeal were allowed, the trial on the merits of the case would necessarily be delayed for a considerable length of time, and compel the adverse party to incur unnecessary expenses, for one of the parties may interpose as many appeals as incidental questions may be raised by him, and interlocutory orders rendered or issued by the lower court. Philippine Business Bank vs. Felipe Chua, G.R. No. 178899, November 15, 2010.

Summary judgment; partial summary judgment; interlocutory order. After this sifting process, the court is instructed to issue an order, the partial summary judgment, which specifies the disputed facts that have to be settled in the course of trial. In this way, the partial summary judgment is more akin to a record of pre-trial, an interlocutory order, rather than a final judgment.

The differences between a “final judgment” and an “interlocutory order” are well-established.  We said in Denso (Phils.) Inc. v. Intermediate Appellate Court that:

[A] final judgment or order is one that finally disposes of a case, leaving nothing more to be done by the Court in respect thereto, e.g., an adjudication on the merits which, on the basis of the evidence presented at the trial, declares categorically what the rights and obligations of the parties are and which party is in the right; or a judgment or order that dismisses an action on the ground, for instance, of res judicata or prescription. Once rendered, the task of the Court is ended, as far as deciding the controversy or determining the rights and liabilities of the litigants is concerned. Nothing more remains to be done by the Court except to await the parties’ next move . . . and ultimately, of course, to cause the execution of the judgment once it becomes “final” or, to use the established and more distinctive term, “final and executory.”

x  x  x  x

Conversely, an order that does not finally dispose of the case, and does not end the Court’s task of adjudicating the parties’ contentions and determining their rights and liabilities as regards each other, but obviously indicates that other things remain to be done by the Court, is “interlocutory”, e.g., an order denying a motion to dismiss under Rule 16 of the Rules  x  x  x  Unlike a ‘final judgment or order, which is appealable, as above pointed out, an ‘interlocutory order may not be questioned on appeal except only as part of an appeal that may eventually be taken from the final judgment rendered in the case.

Bearing in mind these differences, there can be no doubt that the partial summary judgment envisioned by the Rules is an interlocutory order that was never meant to be treated separately from the main case. As we explained in Guevarra v. Court of Appeals:

It will be noted that the judgment in question is a “partial summary judgment.” It was rendered only with respect to the private respondents’ first and second causes of action alleged in their complaint. It was not intended to cover the other prayers in the said complaint, nor the supplementary counterclaim filed by the petitioners against the private respondents, nor the third-party complaint filed by the petitioners against the Security Bank and Trust Company. A partial summary judgment “is not a final or appealable judgment.” (Moran, Vol. 2, 1970 Edition, p. 189, citing several cases.) “It is merely a pre-trial adjudication that said issues in the case shall be deemed established for the trial of the case.” (Francisco, Rules of Court, Vol. II, p. 429.)

x  x  x  x

The partial summary judgment rendered by the trial court being merely interlocutory and not ‘a final judgment’, it is puerile to discuss whether the same became final and executory due to the alleged failure to appeal said judgment within the supposed period of appeal. What the rules contemplate is that the appeal from the partial summary judgment shall be taken together with the judgment that may be rendered in the entire case after a trial is conducted on the material facts on which a substantial controversy exists. This is on the assumption that the partial summary judgment was validly rendered, which, as shown above, is not true in the case at bar.

We reiterated this ruling in the cases of Province of Pangasinan v. Court of Appeals and Government Service Insurance System v. Philippine Village Hotel, Inc. Philippine Business Bank vs. Felipe Chua, G.R. No. 178899, November 15, 2010.

Temporary restraining order; issuance by Supreme Court. Petitioners contend that the consummation of transactions conveying the contested property will affect their right to defend their title to the property thereby causing grave and irreparable injury to them. While this Court does not agree with that claim, we still deem it to be more prudent to grant the requested TRO.

Petitioners have shown a prima facie right to the exemption that they claim. Former DAR Secretary Pagdanganan granted petitioners’ application for exemption upon finding that the subject lots had already been converted to non-agricultural even prior to the effectivity of Republic Act No. 6657, due to the property’s reclassification into farmlot subdivision through the Land Use and Zoning Ordinance of Lipa City.  This ordinance was approved by the HLURB in Resolution No. 35, s. 1981, with a certification issued by HLURB Secretariat OIC Carolina Casaje that the Town Plan/Zoning Ordinance of Lipa City was approved by the National Coordinating Council for Town Planning, Housing and Zoning.

Furthermore, the HLURB’s Rules and Regulations Implementing Farmlot Subdivision Plan categorizes a farmlot subdivision as different from agricultural land as “it is without the intended qualities of an agricultural land and is never intended to be exclusively used for cultivation, livestock production and agro-forestry.”

Finally, the HLURB development permit and license to sell were “indications of the locational viability and the non-exclusivity for agricultural purposes of the subject lots.”  All these arguments were in fact adopted by the Office of the President on appeal.

We therefore deem it proper to grant temporary protection to petitioners’ prima facie right.

The consummation of acts leading to the disposition of the litigated property can make it difficult to implement this Court’s decision upon resolution of the case and can only prolong this protracted battle even more. On the other hand, respondents would not be unduly deprived of their livelihood as they can continue tilling the land pending the final disposition of this case. The Court therefore finds that it is to the public interest to maintain the conditions prevailing before the filing of this case. Posting of a bond by petitioners shall answer for any damages which may be sustained by respondents as a consequence of the issuance of a TRO if the Court finally decides that petitioners are not entitled to it.

WHEREFORE, the motion for issuance of a temporary restraining order is GRANTED upon posting by the petitioners of a bond in the amount of P2 Million. Respondents are enjoined from entering into transactions resulting in the conveyance of any part of the properties subject of this case.

The parties in this case are directed to maintain the status quo and to refrain from all actions which may affect the ownership or present possession of the contested properties until further orders of this Court.  Heirs of Augusto Salas, Jr., represented by Teresita D. Salas vs. Marciano Cabungcal, et al., G.R. No. 191545. November 22, 2010.

Writ of Possession; execution sale. Moreover, contrary to the Spouses Ching’s contention, this Court, in Paredes v. Court of Appeals, citing Rodil v. Benedicto, categorically held that the right of the applicant or a subsequent purchaser to request for the issuance of a writ of possession of the land never prescribes.  A writ of possession is employed to enforce a judgment to recover the possession of land.  It commands the sheriff to enter the land and give possession of it to the person entitled under the judgment.  It may be issued in several instances, among which is in execution sales.  There was, therefore, no grave error on the part of the RTC in granting the motion.  Sps. Alfredo and Encarnacion Ching vs. Family Savings Bank and Sheriff of Manila / Alfredo Ching vs. Family Savings Bank and the Sheriff of Manila, G.R. No. 167835 and G.R. No. 188480, November 15, 2010.

Writ of possession; nature of remedy. Alfredo is assailing the validity of the RTC Order dated March 28, 2006, which granted the Bank’s Urgent Ex Parte Motion To Resolve Motion for Designation of Another Sheriff to Serve/Enforce Writ of Possession/Court Processes.  It is to be noted that the said Order was but an ancillary motion emanating from the writ of possession granted earlier by the RTC.  Corollarily, with regard to a petition for writ of possession, it is well to state that the proceeding is ex parte and summary in nature.  It is a judicial proceeding brought for the benefit of one party only and without notice by the court to any person adverse of interest.  It is a proceeding wherein relief is granted without giving the person against whom the relief is sought an opportunity to be heard.  Consequently, so too was the nature of the urgent motion, it was ex-parte and summary in nature.

Moreover, it is settled that the issuance of a writ of possession to a purchaser in a public auction is a ministerial act.  After the consolidation of title in the buyer’s name for failure of the mortgagor to redeem the property, entitlement to the writ of possession becomes a matter of right.  To be sure, regardless of whether or not there is a pending action for nullification of the sale at public auction, the purchaser is entitled to a writ of possession without prejudice to the outcome of such action.  Undeniably, Alfredo failed to redeem the property within the redemption period and, thereafter, ownership was consolidated in favor of the Bank and a new certificate of title, TCT No. 221703, was issued in its name.  It was, therefore, a purely ministerial duty for the trial court to issue a writ of possession in favor of the Bank and issue the Order granting the motion for designation of another sheriff to serve the writ, which is merely an order enforcing the writ of possession.

We note, with affirmation, the discussion of the CA on the matter:

The right of the purchaser to the possession of the property after the period of redemption has lapsed and no redemption was made under the old rule, has not been changed with the advent of the 1997 Rules of Civil Procedure.  The only significant change is the time when the period of redemption period would start.  Under the old Rules, the redemption period would commence after the sale, while under the present Rule, the period to reckon with is the date of registration of the certificate of sale with the proper Registry of Deeds.

In the instant case, there is no dispute that the property of the petitioner was sold in an execution sale in favor of the respondent bank and that no redemption was made by the former over the said property within the required one-year period.  It has been held that a writ of possession may be issued in favor of the purchaser in an execution sale when the deed of conveyance has been executed and delivered to him after the period of redemption has expired and no redemption has been made by the judgment debtor.  After such period, the judgment debtor would be divested of his ownership of the property.  Thus, just like in extrajudicial foreclosure, the issuance of the writ of possession after the lapse of the period of redemption is ministerial on the part of the court.

It is the contention of the petitioner that a writ of possession could only be validly issued upon consolidation of title and ownership in the name of the purchaser.  We agree.  The petitioner then argues that a valid consolidation could be obtained only upon filing of a separate action with the RTC acting as a cadastral court.  That we don’t agree.  The petitioner cited the case of Padilla, Jr. v. Philippine Producers’ Cooperative Marketing Association, Inc., to support his argument.  The said case involved the issuance of a new title in the name of the purchaser.  In fact, the primary issue therein is whether in implementing the involuntary transfer of title of real property levied and sold on execution, it is enough for the executing party to file a motion with the court which rendered judgment, or does he need to file a separate action with the Regional Trial Court.  There is nothing therein which states that a new title in the name of the purchaser is necessary for the validity of the writ of possession.  On the contrary, a perusal of the said case would reveal that a purchaser, by virtue of a levy and an execution sale, would become the new lawful owner of the property sold if not redeemed within the one-year period.

Following the argument of the petitioner, he might have confused consolidation of title and ownership with the issuance or application for a new title after the redemption as provided for in Section 75 of Presidential Decree No. 1529.  Title and ownership to the property is consolidated upon the lapse of the period of redemption.  It is automatic upon the failure of the judgment obligor to exercise his right of redemption within the period allowed by law.  Title may be consolidated in the name of the purchaser even without a new title issued in his name.  The term “title” as used in consolidation does not pertain to the certificate of title, or piece of paper, issued by the Register of Deeds, which is a mere evidence of ownership.  It is synonymous with ownership.

There is neither law nor jurisprudence which requires that the certificate of title to the property must first be cancelled and a new one be issued in favor of the purchaser before a valid consolidation of title and ownership could be said to have taken place, and before a court could issue a writ of possession, or an order designating a sheriff to enforce such writ.

Not even the pendency of another action with the appellate courts involving the validity of the writ of possession can stop the enforcement of the said writ in the absence of any restraining order or injunctive writ from the said courts.  Accordingly, considering that this Court and the Supreme Court have not issued any temporary restraining order or preliminary injunction against the order of the court a quo for the issuance of writ of possession, we see no cogent reason why the said writ could not be effectively enforced.

The RTC, therefore, acted well within its jurisdiction in issuing the questioned order granting the urgent ex-parte motion of the respondent bank which proceeds from the writ of possession which had long been issued.  For all the foregoing, there is no need to address the other issues. Sps. Alfredo and Encarnacion Ching vs. Family Savings Bank and Sheriff of Manila / Alfredo Ching vs. Family Savings Bank and the Sheriff of Manila, G.R. No. 167835 and G.R. No. 188480, November 15, 2010.

Special Proceedings.

Appeal; record on appeal. Section 1, Rule 109 of the 1997 Rules of Civil Procedure specifies the orders or judgments in special proceedings which may be the subject of an appeal, viz:

SECTION 1. Orders or judgments from which appeals may be taken. – An interested person may appeal in special proceedings from an order or judgment rendered by a Court of First Instance or a Juvenile and Domestic Relations Court, where such order or judgment:

(a)   Allows or disallows a will;

(b)   Determines who are the lawful heirs of a deceased person, or the distributive share of the estate to which such person is entitled;

(c)   Allows or disallows, in whole or in part, any claim against the estate of a deceased person, or any claim presented on behalf of the estate in offset to a claim against it;

(d)  Settles the account of an executor, administrator, trustee or guardian;

(e)  Constitutes, in proceedings relating to the settlement of the estate of a deceased person, or the administration of a trustee or guardian, a final determination in the lower court of the rights of the party appealing, except that no appeal shall be allowed from the appointment of a special administrator; and

(f)   Is the final order or judgment rendered in the case, and affects the substantial rights of the person appealing unless it be an order granting or denying a motion for a new trial or for reconsideration.

The above-quoted rule contemplates multiple appeals during the pendency of special proceedings.  A record on appeal – in addition to the notice of appeal – is thus required to be filed as the original records of the case should remain with the trial court to enable the rest of the case to proceed in the event that a separate and distinct issue is resolved by said court and held to be final.

In the present case, the filing of a record on appeal was not necessary since no other matter remained to be heard and determined by the trial court after it issued the appealed order granting respondent’s petition for cancellation of birth record and change of surname in the civil registry.

The appellate court’s reliance on Zayco v. Hinlo, Jr. in denying petitioner’s motion for reconsideration is misplaced.  In Zayco which was a petition for letters of administration of a deceased person’s estate, the decedent’s children appealed the trial court’s order appointing the grandson of the decedent as administrator of the estate.  Their notice of appeal and record on appeal were denied due course by the trial court on the ground that the appealed order is interlocutory and not subject to appeal.  But even if the appeal were proper, it was belatedly filed.  On certiorari by the decedent’s children, the appellate court sustained the trial court.  On petition for review, this Court reversed the appellate court, holding that “[a]n order appointing an administrator of a deceased person’s estate is a final determination of the rights of the parties in connection with the administration, management and settlement of the decedent’s estate,” hence, the order is “final” and “appealable.”  The Court also held that the appeal was filed on time.

In Zayco, unlike in the present case, a record on appeal was obviously necessary as the proceedings before the trial court involved the administration, management and settlement of the decedent’s estate–    matters covered by Section 1 of Rule 109 wherein multiple appeals could, and did in that case, call for them.  Republic of the Philippines vs. Nasaida Sumera Nishina, et al., G.R. No. 186053, November 15, 2010.

Other Proceedings

Intra-corporate dispute; jurisdiction of Special Commercial Courts. In addition to being conferred by law, it bears emphasizing that the jurisdiction of a court or tribunal over the case is determined by the allegations in the complaint and the character of the relief sought, irrespective of whether or not the plaintiff is entitled to recover all or some of the claims asserted therein.  Moreover, pursuant to Section 5.2 of Republic Act No. 8799, otherwise known as the Securities Regulation Code, the jurisdiction of the SEC over all cases enumerated under Section 5 of Presidential Decree No. 902-A has been transferred to RTCs designated by this Court as SCCs pursuant to A.M. No. 00-11-03-SC promulgated on 21 November 2000.  Thus, Section 1(a), Rule 1 of the Interim Rules of Procedure Governing Intra-Corporate Controversies (Interim Rules) provides as follows:

“SECTION 1.       (a) Cases covered. — These Rules shall govern the procedure to be observed in civil cases involving the following:

(1)    Devices or schemes employed by, or any act of, the board of directors, business associates, officers or partners, amounting to fraud or misrepresentation which may be detrimental to the interest of the public and/or of the stockholders, partners, or members of any corporation, partnership, or association;

(2)    Controversies arising out of intra-corporate, partnership, or association relations, between and among stockholders, members, or associates; and between, any or all of them and the corporation, partnership, or association of which they are stockholders, members, or associates, respectively;

(3)    Controversies in the election or appointment of directors, trustees, officers, or managers of corporations, partnerships, or associations;

(4)    Derivative suits; and

(5)    Inspection of corporate books.” (Italics supplied)

In upholding the RTC’s pronouncement that venue was improperly laid, the CA ruled that STRADEC’s first and second causes of action were not intra-corporate disputes because the issues pertaining thereto were civil in nature.   In support of the foregoing conclusion, the CA cited Speed Distributing Corporation vs. Court of Appeals where this Court essentially ruled out the existence of an intra-corporate dispute from an action instituted by the wife for the nullification of the transfer of a property between corporations of which her deceased husband was a stockholder.  The CA also relied on this Court’s pronouncement in Nautica Canning Corporation vs. Yumul to the effect, among others, that an action to determine the validity of the transfer of shares from one stockholder to another is civil in nature and is, therefore, cognizable by regular courts and not the SEC.  In addition to the fact that the first case involved a civil action instituted against corporations by one who was not a stockholder thereof, however, STRADEC correctly points out that, unlike the second case, the limited jurisdiction of the SEC is not in issue in the case at bench.

Even prescinding from the different factual and legal milieus of said cases, the CA also failed to take into consideration the fact that, unlike the SEC which is a tribunal of limited jurisdiction, SCCs like the RTC are still competent to tackle civil law issues incidental to intra-corporate disputes filed before them.  In G.D. Express Worldwide N.V. vs. Court of Appeals, this Court ruled as follows:

It should be noted that the SCCs are still considered courts of general jurisdiction. Section 5.2 of R.A. No. 8799 directs merely the Supreme Court’s designation of RTC branches that shall exercise jurisdiction over intra-corporate disputes. Nothing in the language of the law suggests the diminution of jurisdiction of those RTCs to be designated as SCCs. The assignment of intra-corporate disputes to SCCs is only for the purpose of streamlining the workload of the RTCs so that certain branches thereof like the SCCs can focus only on a particular subject matter.

The designation of certain RTC branches to handle specific cases is nothing new. For instance, pursuant to the provisions of R.A. No. 6657 or the Comprehensive Agrarian Reform Law, the Supreme Court has assigned certain RTC branches to hear and decide cases under Sections 56 and 57 of R.A. No. 6657.

The RTC exercising jurisdiction over an intra-corporate dispute can be likened to an RTC exercising its probate jurisdiction or sitting as a special agrarian court. The designation of the SCCs as such has not in any way limited their jurisdiction to hear and decide cases of all nature, whether civil, criminal or special proceedings.

Strategic Alliance Development Corporation vs. Star Infrastructure Development Corporation Corporation, BEDE S. Tabalingcos, et al., G.R. No. 187872. November 17, 2010.

Intra-corporate dispute; relationship test and nature of the controversy test. An intra-corporate dispute is understood as a suit arising from intra-corporate relations or between or among stockholders or between any or all of them and the corporation.  Applying what has come to be known as the relationship test, it has been held that the types of actions embraced by the foregoing definition include the following suits: (a) between the corporation, partnership or association and the public; (b) between the corporation, partnership or association and its stockholders, partners, members, or officers; (c) between the corporation, partnership or association and the State insofar as its franchise, permit or license to operate is concerned; and, (d) among the stockholders, partners or associates themselves.  As the definition is broad enough to cover all kinds of controversies between stockholders and corporations, the traditional interpretation was to the effect that the relationship test brooked no distinction, qualification or any exemption whatsoever.

However, the unqualified application of the relationship test has been modified on the ground that the same effectively divests regular courts of jurisdiction over cases for the sole reason that the suit is between the corporation and/or its corporators.  It was held that the better policy in determining which body has jurisdiction over a case would be to consider not only the status or relationship of the parties but also the nature of the question that is the subject of their controversy.  Under the nature of the controversy test, the dispute must not only be rooted in the existence of an intra-corporate relationship, but must also refer to the enforcement of the parties’ correlative rights and obligations under the Corporation Code as well as the internal and intra-corporate regulatory rules of the corporation.  The combined application of the relationship test and the nature of the controversy test has, consequently, become the norm in determining whether a case is an intra-corporate controversy or is purely civil in character.

In the case at bench, STRADEC’s first and second causes of action seek the nullification of the loan and pledge over its SIDC shareholding contracted by respondents Yujuico, Sumbilla and Wong as well the avoidance of the notarial sale of said shares conducted by respondent Caraos.  STRADEC’s 31 July 2006 amended petition significantly set forth the following allegations common to its main causes of action, to wit:

XXX                   XXX                   XXX

Applying the relationship test, we find that STRADEC’s first and second causes of action qualify as intra-corporate disputes since said corporation and respondent Wong are incorporators and/or stockholders of SIDC.  Having acquired STRADEC’s shares thru the impugned notarial sale conducted by respondent Caraos, respondent Wong appears to have further transferred said shares in favor of CTCII, a corporation he allegedly formed with members of his own family.  By reason of said transfer, CTCII became a stockholder of SIDC and was, in fact, alleged to have been recognized as such by the latter and its corporate officers. To our mind, these relationships were erroneously disregarded by the RTC when it ruled that venue was improperly laid for STRADEC’s first and second causes of action which, applying Section 2, Rule 4 of the 1997 Rules of Civil Procedure, should have been filed either at the place where it maintained its principal place of business or where respondents Yujuico, Sumbilla and Wong resided.

Considering that they fundamentally relate to STRADEC’s status as a stockholder and the alleged fraudulent divestment of its stockholding in SIDC, the same causes of action also qualify as intra-corporate disputes under the nature of the controversy test.  As part of the fraud which attended the transfer of its shares, STRADEC distinctly averred, among other matters, that respondents Yujuico and Sumbilla had no authority to contract a loan with respondent Wong; that the pledge executed by respondent Yujuico was simulated since it did not receive the proceeds of the loan for which its shares in SIDC were set up as security; that irregularities attended the notarial sale conducted by  respondent Caraos who sold said shares to respondent Wong;  that the latter unlawfully transferred the same shares in favor of CTCII; and, that SIDC and its officers recognized and validated said transfers despite being alerted about their defects.  Ultimately, the foregoing circumstances were alleged to have combined to rid STRADEC of its shares in SIDC and its right as a stockholder to participate in the latter’s corporate affairs.  Strategic Alliance Development Corporation vs. Star Infrastructure Development Corporation Corporation, BEDE S. Tabalingcos, et al., G.R. No. 187872, November 17, 2010.

Intra-corporate dispute; rules of procedure. The rule is settled that rules of procedure ought not to be applied in a very rigid, technical sense, for they have been adopted to help secure – not override – substantial justice.  Considering that litigation is not a game of technicalities courts have been exhorted, time and again, to afford every litigant the amplest opportunity for the proper and just determination of his case free from the constraints of technicalities.  Since rules of procedure are mere tools designed to facilitate the attainment of justice, it is well recognized that courts are empowered to suspend its rules, when the rigid application thereof tends to frustrate rather than promote the ends of justice.  No less than Section 3, Rule 1 of the Interim Rules provides that the provisions thereof are to “be liberally construed in order to promote their objective of securing a just, summary, speedy and inexpensive determination of every action or proceeding.”  Strategic Alliance Development Corporation vs. Star Infrastructure Development Corporation Corporation, BEDE S. Tabalingcos, et al., G.R. No. 187872, November 17, 2010.

Intra-corporate dispute; venue. Viewed in the foregoing light and the intra-corporate nature of STRADEC’s first and second causes of action, the CA clearly erred in upholding the RTC’s finding that venue therefor was improperly laid.  Given that the question of venue is decidedly not jurisdictional and may, in fact, be waived, said error was further compounded when the RTC handed down its first 30 August 2006 order even before respondents were able to file pleadings squarely raising objections to the venue for said causes of action. Pursuant to Section 5, Rule 1 of the Interim Rules, at any rate, it cannot be gainsaid that STRADEC correctly commenced its petition before the RTC exercising jurisdiction over SIDC’s principal place of business which was alleged to have been transferred from Bayambang, Pangasinan to Lipa, Batangas.  It matters little that STRADEC, as pointed out by respondents, also questions the validity of the 30 July 2005 SIDC stockholders’ annual meeting where the aforesaid change in the address of its principal place of business was allegedly approved. Said matter should be properly threshed out in the proceedings before the RTC alongside such issues as the validity of the transfers of STRADEC’s shares to respondents Wong and CTCII, the propriety of the recording of said transfers in SIDC’s books, STRADEC’s status as a stockholder of SIDC, the legality of the 20 July 2006 SIDC stockholders’ special meeting or, for that matter, Cezar T. Quiambao’s authority to represent STRADEC in the case at bench.  Strategic Alliance Development Corporation vs. Star Infrastructure Development Corporation Corporation, BEDE S. Tabalingcos, et al., G.R. No. 187872, November 17, 2010.

Judgment; finality. Finally, it must be emphasized that the decision of the HLURB in HLURB Case No. REM-091699-10646, has already become final and executory due to the failure of the petitioner to elevate the dismissal of his appeal by the Office of the President to the Court of Appeals.  It is axiomatic that final and executory judgments can no longer be attacked by any of the parties or be modified, directly or indirectly, even by the highest court of the land. Romulo R. Peralta vs. Hon. Raul E. De Leon, et al., G.R. No. 187978, November 24, 2010.

Jurisdiction; Housing and Land Use Regulatory Board (HLURB). Assiduous, petitioner is now before this Court via the present recourse raising the single issue of whether or not the Court of Appeals is correct in affirming the lack of jurisdiction of the RTC to enjoin the implementation of the HLURB decision that was allegedly rendered contrary to Section 1 of Presidential Decree No. 1344.  We affirm the Court of Appeals.

Generally, the extent to which an administrative agency may exercise its powers depends largely, if not wholly, on the provisions of the statute creating or empowering such agency.  Presidential Decree No. 1344, “Empowering the National Housing Authority to Issue Writ of Execution in the Enforcement of its Decision under Presidential Decree No. 957,” clarifies and spells out the quasi-judicial dimensions of the grant of jurisdiction to the HLURB in the following specific terms:

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

A. Unsound real estate business practices;

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

C. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lots or condominium units against the owner, developer, broker or salesman.

It is noteworthy that the HLURB in HLURB Case No. REM-091699-10646, rendered a decision against petitioner ordering him to pay CSDI the unpaid amount due from his purchase of a condominium unit or in the alternative, the rescission of contract with forfeiture of payments made by petitioner.  A writ of execution was issued against petitioner and his appeal was dismissed by the Office of the President.  Petitioner no longer assailed this dismissal, thus the same became final and executory.   Unable to obtain relief before the Office of the President, petitioner filed Civil Case No. 07-0141 before the RTC of Parañaque City.  As adverted to earlier, the RTC concluded that the jurisdiction over petitioner’s complaint falls on the HLURB.  This was affirmed by the Court of Appeals.

It is a settled rule that the jurisdiction of the HLURB to hear and decide cases is determined by the nature of the cause of action, the subject matter or property involved and the parties.

In Civil Case No. 07-0141, petitioner prayed for the issuance of temporary restraining order and preliminary injunction to restrain respondent CSDI from cancelling the Contract to Sell, forfeiting the amortization payment, foreclosing petitioner’s condominium units, and garnishing his bank deposits.  Specifically, petitioner asked that the RTC, Branch 258:

1. Immediately upon receipt of this petition, a temporary restraining Order be issued and/or a Preliminary Injunction, pending the determination of the merits of the case, by way of restraining defendants from forfeiting the amortization payments, foreclosure of plaintiff’s condominium unit, its break opening, and garnishment of plaintiff’s bank deposits at Bank of Philippine Islands, Forbes Park branch, Makati City.

2.  To order the final and permanent injunction.

3. And to order defendant-developer to pay plaintiff the actual damages of his hospitalization amounting to Php 60,000.00 including the interest until fully paid, caused by the unlawful and damaging acts of defendants as above shown;

4. To order defendant developer to pay P300,000.00 as moral damages to plaintiff;

5. Another payment of P300,000.00 as exemplary damages to plaintiff;

6.   To pay Attorneys fees of P50,000.00 and costs of suit;

7.  Ordering defendants to adhere to the License to Sell and all its strict compliance thereto imposed on defendant developer.

We have to agree with the trial court and the Court of Appeals that jurisdiction over the complaint filed by the petitioner is with the HLURB.

Maria Luisa Park Association, Inc. v. Almendras, finds application in this case.  The Court ruled:

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

This Court was equally explicit in Chua v. Ang, when it pronounced that:

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

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

We are in accord with the RTC when it held:

First: On the matter of lack of jurisdiction of this Court over this case – This Court is fully aware of the cited decisions of respondents particularly those which pertain to the exclusive jurisdiction of the Housing and Land Use Regulatory Board (HLURB) as provided for under pertinent laws to the exclusion of the regular courts and this is one of them.  It cannot be gainsaid that while [plaintiff] harps on Arts. 20 and 21 of the New Civil Code of the Philippines to be the basis of his cause of action for damages before this Court, the issue of his claiming damages against respondent Concepts & Systems Dev’t. Inc. (CSDI), has already been resolved in HLURB Case No. REM-091699-10646 in favor of CSDI and against him to which a Writ of Execution has been issued, partially implemented by co-respondent Sheriff Lucas Eloso Eje and to which [plaintiff] is asking this Court to issue a temporary restraining order in order to suspend the full implementation of said writ.  While [plaintiff] claims that his cause of action is one of damages, the truth is his main objective is to have this Court enjoin the enforcement of the writ of execution issued by the HLURB.  Such subterfuge is easily discernible in view of the amount of damages [plaintiff] is only claiming in this case against that which respondent CSDI is entitled to if the writ of execution is fully satisfied.  This cannot be done for it is tantamount to undue interference with the decision of a quasi-judicial body which, as above-stated, is vested by law and jurisprudence with exclusive authority to hear and decide cases between sellers and buyers of subdivision lots and condominium units, among others.

The Court, therefore, hereby adopts by reference the arguments of respondent CSDI relative to this Court’s lack of jurisdiction to hear and decide this case which need no longer be repeated herein as it will not serve any useful purpose.

As observed in C.T. Torres Enterprises, Inc. v. Hibionada:

The argument that only courts of justice can adjudicate claims resoluble under the provisions of the Civil Code is out of step with the fast-changing times. There are hundreds of administrative bodies now performing this function by virtue of a valid authorization from the legislature. This quasi-judicial function, as it is called, is exercised by them as an incident of the principal power entrusted to them of regulating certain activities falling under their particular expertise. Romulo R. Peralta vs. Hon. Raul E. De Leon, et al., G.R. No. 187978, November 24, 2010.

Jurisdiction; HLURB. In the main, petitioners assail the jurisdiction of the HLURB, inviting attention to Rule II of the Disputes triable by HIGC/Nature of Proceedings:

Section 1. Types of Disputes. – The HIGC or any person, officer, body, board or committee duly designated or created by it shall have jurisdiction to hear and decide cases involving the following:

x x x x

(9) Controversies arising out of intra-corporate relations between and among members of the association of which they are members; and between such association and the state/general public or other entity insofar as it concerns its right to exist as a corporate entity. (underscoring supplied)

Petitioners argue that the HLURB does not have jurisdiction over the case as it does not fall under the category of an intra-corporate controversy, their being non-members having been established and acknowledged by respondent. Likewise, they argue that the case cannot be deemed a controversy between the association and the general public since the main issue does not pertain to respondent’s juridical personality.  Petitioners add that Batas Pambansa Blg. 129, as amended, vests exclusive jurisdiction over cases of forcible entry and unlawful detainer on first level courts, such as the Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts.

The petition is bereft of merit.  Upon conferment of quasi-judicial functions to an administrative agency, all controversies relating to the subject matter which pertain to its specialization are deemed included within its jurisdiction.  Since the HLURB is vested by law with jurisdiction to regulate and supervise homeowner associations, respondent correctly lodged their complaint with the HLURB.   Republic Act No. 8763 provides:

Section 26. Powers over Homeowners Associations. – The powers authorities and responsibilities vested in the Corporation (formerly Home Insurance Guaranty Corporation) with respect to homeowners association under Republic Act No. 580, as amended by executive Order No. 535is hereby transferred to the Housing and Land use Regulatory Board (HLURB).  (underscoring supplied)

Petitioners in fact, in their reply to the complaint, acknowledged the HLURB’s jurisdiction when they challenged respondent’s right to exist as a corporate entity, viz:

(5)  That complainant’s statements from number 6-12 in reference to that of the respondents are already terminated and non members and non program beneficiaries of the CMP would not hold water. At this point, respondent in this instance, would like to emphasize that they are not opposing the implementation of the Community Mortgage Program. They are only questioning the legitimacy and the illegal activities of Erlinda Manalo, highlighted hereunder, to wit:

a.      Complainant have been collecting money since year 2000 from actual occupants and occupants not covered by the Community Mortgage Program. This is illegal for the simple reason that she has no juridical personality in the absence of a SEC registration. Please take note of their half hazard (sic) registration with HLURB dated only September 25, 2003 (please refer to the receipts of collection marked as Annex “B”)

b.      No election to legitimize her presidency.

c.      Non-consultation of the majority actual occupants on which she used the names in her intent of registering with HLURB the so called Sta. Monica Riverside Homeowners Association.

d.      Harassment of the child (child abuse) of one of the actual occupant who was deleted from the beneficiaries. (please refer to the medical certificate marked as Annex “C”)

e.      Majority of the names of officers and members as submitted to HLURB are not the actual occupants (please refer to the master list submitted to the City Government Planning Office marked as Annex “D”) (underscoring supplied)

If petitioners refuse to recognize respondent’s legitimacy, respondent will not be able to fulfill its obligation to collect and account for the monthly amortizations with SHFC.   Individual titling would not thus be completed and the laudable objectives of the CMP [Community Mortgage Program] would not be fully attained.

Undoubtedly, the case is within the competence of HLURB to decide. While the SHFC is the main government agency tasked to administer the CMP, its authority pertains only to the administrative and financing aspects of the State’s social housing program schemes, i.e., evaluation of the community association and originator based on the submitted documents, site inspection, releasing of funds for land acquisition, site development and housing assistance, collection of monthly amortizations from community associations and foreclosure of mortgages.

While a complaint for ejectment, which raises the issue of who has a better right of possession, falls within the exclusive and original jurisdiction of first level courts, the right of possession in the present case is, however, necessarily intertwined with a determination of rights and privileges under a distinctive social housing concept such as CMP, which falls within the expertise of the HLURB.

The foregoing discussions leave it unnecessary to delve on petitioners’ assigned error respecting their extrajudicial and summary eviction from the lots they occupy. It is settled that eviction is a necessary consequence of petitioners’ exclusion from the benefits of the CMP.  Edna Eugenio, et al. vs. Sta. Monica Riverside Homeowners Association, G.R. No. 187751, November 22, 2010.

Writ of possession; matter of right after consolidation of title in name of buyer in extra-judicial foreclosure. It is a time-honored legal precept that after the consolidation of titles in the buyer’s name, for failure of the mortgagor to redeem, entitlement to a writ of possession becomes a matter of right.  As the confirmed owner, the purchaser’s right to possession becomes absolute.  There is even no need for him to post a bond, and it is the ministerial duty of the courts to issue the same upon proper application and proof of title.  To accentuate the writ’s ministerial character, the Court has consistently disallowed injunction to prohibit its issuance despite a pending action for annulment of mortgage or the foreclosure itself.

The nature of an ex parte petition for issuance of the possessory writ under Act No. 3135 has been described as a non-litigious proceeding and summary in nature. As an ex parte proceeding, it is brought for the benefit of one party only, and without notice to or consent by any person adversely interested.

Subsequent proceedings in the appellate courts would merely involve a reiteration of the foregoing settled doctrines. The issue involved in the assailed RTC issuances is conclusively determined by the above cited legal dictum, and it would be unnecessarily vexatious and unjust to allow the present controversy to undergo protracted litigation.  AUB’s right of possession is founded on its right of ownership over the property which it purchased at the auction sale. Upon expiration of the redemption period and consolidation of the title to the property, its possessory rights over the same became absolute. We quote with approval the pronouncement of the RTC, viz.:

As the purchaser of the property in the foreclosure sale to which new title has already been issued, petitioner’s right over the property has become absolute, vesting upon it the right of possession and enjoyment of the property which this Court must aid in effecting its delivery. Under the circumstances, and following established doctrine, the issuance of a writ of possession is a ministerial function whereby the court exercises neither discretion nor judgment x x x. Said writ of possession must be enforced without delay x x x.

The law does not require that a petition for a writ of possession be granted only after documentary and testimonial evidence shall have been offered to and admitted by the court.  As long as a verified petition states the facts sufficient to entitle petitioner to the relief requested, the court shall issue the writ prayed for.  Asia United Bank vs. Goodland Company, Inc., G.R. No. 188051, November 22, 2010.

Writ of possession; writ issued in relation to extra-judicial foreclosure of mortgage is not covered by rule on execution by motion or by independent action (Rule 39, sec. 6). The petitioners finally submit that the writ of possession, issued by the RTC on February 16, 1984, may no longer be enforced by a mere motion, but by a separate action, considering that more than five years had elapsed from its issuance, pursuant to Section 6, Rule 39 of the Rules of Court, which states:

Sec. 6. Execution by motion or by independent action. – A final and executory judgment or order may be executed on motion within five (5) years from the date of its entry. After the lapse of such time, and before it is barred by the statute of limitations, a judgment may be enforced by action. The revived judgment may also be enforced by motion within five (5) years from the date of its entry and thereafter by action before it is barred by the statute of limitations.

In rejecting a similar argument, the Court held in Paderes v. Court of Appeals that Section 6, Rule 39 of the Rules of Court finds application only to civil actions and not to special proceedings.  Citing Sta. Ana v. Menla, which extensively discussed the rationale behind the rule, the Court held:

In a later case [Sta. Ana v. Menla, 111 Phil. 947 (1961)], the Court also ruled that the provision in the Rules of Court to the effect that judgment may be enforced within five years by motion, and after five years but within ten years by an action (Section 6, Rule 39) refers to civil actions and is not applicable to special proceedings, such as land registration cases.  x x x x

We fail to understand the arguments of the appellant in support of the above assignment, except in so far as it supports his theory that after a decision in a land registration case has become final, it may not be enforced after the lapse of a period of 10 years, except by another proceeding to enforce the judgment or decision. Authority for this theory is the provision in the Rules of Court to the effect that judgment may be enforced within 5 years by motion, and after five years but within 10 years, by an action (Sec. 6, Rule 39). This provision of the Rules refers to civil actions and is not applicable to special proceedings, such as a land registration case. This is so because a party in a civil action must immediately enforce a judgment that is secured as against the adverse party, and his failure to act to enforce the same within a reasonable time as provided in the Rules makes the decision unenforceable against the losing party. In special proceedings the purpose is to establish a status, condition or fact; in land registration proceedings, the ownership by a person of a parcel of land is sought to be established. After the ownership has been proved and confirmed by judicial declaration, no further proceeding to enforce said ownership is necessary, except when the adverse or losing party had been in possession of the land and the winning party desires to oust him therefrom.

Subsequently, the Court, in Republic v. Nillas, affirmed the dictum in Sta. Ana and clarified that “Rule 39 x x x applies only to ordinary civil actions, not to other or extraordinary proceedings not expressly governed by the Rules of Civil Procedure but by some other specific law or legal modality,” viz:

Rule 39, as invoked by the Republic, applies only to ordinary civil actions, not to other or extraordinary proceedings not expressly governed by the Rules of Civil Procedure but by some other specific law or legal modality such as land registration cases. Unlike in ordinary civil actions governed by the Rules of Civil Procedure, the intent of land registration proceedings is to establish ownership by a person of a parcel of land, consistent with the purpose of such extraordinary proceedings to declare by judicial fiat a status, condition or fact. Hence, upon the finality of a decision adjudicating such ownership, no further step is required to effectuate the decision and a ministerial duty exists alike on the part of the land registration court to order the issuance of, and the LRA to issue, the decree of registration.

In the present case, Section 6, Rule 39 of the Rules of Court is not applicable to an ex parte petition for the issuance of the writ of possession as it is not in the nature of a civil action governed by the Rules of Civil Procedure but a judicial proceeding governed separately by Section 7 of Act No. 3135 which regulates the methods of effecting an extrajudicial foreclosure of mortgage.   The provision states:

Section 7. Possession during redemption period. In any sale made under the provisions of this Act, the purchaser may petition the [Regional Trial Court] where the property or any part thereof is situated, to give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without complying with the requirements of this Act. Such petition shall be made under oath and filed in form of an ex parte motion in the registration or cadastral proceedings if the property is registered, or in special proceedings in the case of property registered under the Mortgage Law or under section one hundred and ninety-four of the Administrative Code, or of any other real property encumbered with a mortgage duly registered in the office of any register of deeds in accordance with any existing law, and in each case the clerk of the court shall, upon the filing of such petition, collect the fees specified in paragraph eleven of section one hundred and fourteen of Act Numbered Four hundred and ninety-six, as amended by Act Numbered Twenty-eight hundred and sixty-six, 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.

The above-cited provision lays down the procedure that commences from the filing of a motion for the issuance of a writ of possession, to the issuance of the writ of possession by the Court, and finally to the execution of the order by the sheriff of the province in which the property is located.  Based on the text of the law, we have also consistently ruled that the duty of the trial court to grant a writ of possession is ministerial; the writ issues as a matter of course upon the filing of the proper motion and the approval of the corresponding bond.  In fact, the issuance and the immediate implementation of the writ are declared ministerial and mandatory under the law.

Thus, in Philippine National Bank v. Adil, we emphatically ruled that “once the writ of possession has been issued, the trial court has no alternative but to enforce the writ without delay.”  The issuance of a writ of possession to a purchaser in an extrajudicial foreclosure is summary and ministerial in nature as such proceeding is merely an incident in the transfer of title.  The trial court does not exercise discretion in the issuance thereof; it must grant the issuance of the writ upon compliance with the requirements set forth by law, and the provincial sheriff is likewise mandated to implement the writ immediately.

Clearly, the exacting procedure provided in Act No. 3135, from the moment of the issuance of the writ of possession, leaves no room for the application of Section 6, Rule 39 of the Rules of Court which we consistently ruled, as early as 1961 in Sta. Ana, to be applicable only to civil actions.   From another perspective, the judgment or the order does not have to be executed by motion or enforced by action within the purview of Rule 39 of the Rules of Court.  Spouses Ernesto and Vicenta Topacio vs. Banco Filipino Savings and Mortgage Bank, G.R. No. 157644, November 17, 2010.

Evidence

Admission. In the first issue raised, petitioner argues that respondents’ exclusive right to monopolize the subject matter of the patent exists only within the term of the patent. Petitioner claims that since respondents’ patent expired on July 16, 2004, the latter no longer possess any right of monopoly and, as such, there is no more basis for the issuance of a restraining order or injunction against petitioner insofar as the disputed patent is concerned.  The Court agrees.  Section 37 of Republic Act No. (RA) 165, which was the governing law at the time of the issuance of respondents’ patent, provides:

Section 37. Rights of patentees. A patentee shall have the exclusive right to make, use and sell the patented machine, article or product, and to use the patented process for the purpose of industry or commerce, throughout the territory of the Philippines for the term of the patent; and such making, using, or selling by any person without the authorization of the patentee constitutes infringement of the patent.

It is clear from the above-quoted provision of law that the exclusive right of a patentee to make, use and sell a patented product, article or process exists only during the term of the patent. In the instant case, Philippine Letters Patent No. 21116, which was the basis of respondents in filing their complaint with the BLA-IPO, was issued on July 16, 1987. This fact was admitted by respondents themselves in their complaint. They also admitted that the validity of the said patent is until July 16, 2004, which is in conformity with Section 21 of RA 165, providing that the term of a patent shall be seventeen (17) years from the date of issuance thereof. Section 4, Rule 129 of the Rules of Court provides that an admission, verbal or written, made by a party in the course of the proceedings in the same case, does not require proof and that the admission may be contradicted only by showing that it was made through palpable mistake or that no such admission was made. In the present case, there is no dispute as to respondents’ admission that the term of their patent expired on July 16, 2004. Neither is there evidence to show that their admission was made through palpable mistake. Hence, contrary to the pronouncement of the CA, there is no longer any need to present evidence on the issue of expiration of respondents’ patent.

On the basis of the foregoing, the Court agrees with petitioner that after July 16, 2004, respondents no longer possess the exclusive right to make, use and sell the articles or products covered by Philippine Letters Patent No. 21116. Phil Pharmawealth, Inc. vs. Pfizer, Inc and Pfizer (Phil.) Inc., G.R. No. 167715, November 17, 2010.

Affidavits; hearsay if affiants not presented at trial for cross-examination. To support her assertion that the property belongs to the conjugal partnership, petitioner submitted the Affidavit of Crisanto Origen, attesting that petitioner and her husband were the vendees of the subject property, and the photocopies of the checks allegedly issued by Sina Imani as payment for the subject property.  Unfortunately for petitioner, the said Affidavit can hardly be considered sufficient evidence to prove her claim that the property is conjugal.  As correctly pointed out by Metrobank, the said Affidavit has no evidentiary weight because Crisanto Origen was not presented in the RTC to affirm the veracity of his Affidavit:

The basic rule of evidence is that unless the affiants themselves are placed on the witness stand to testify on their affidavits, such affidavits must be rejected for being hearsay.  Stated differently, the declarants of written statements pertaining to disputed facts must be presented at the trial for cross-examination. Evangeline D. Imani vs. Metroplitan Bank and Trust Company, G.R. No. 187023, November 17, 2010.

Best Evidence Rule. In the same vein, the photocopies of the checks cannot be given any probative value.  In Concepcion v. Atty. Fandiño, Jr. and Intestate Estate of the Late Don Mariano San Pedro y Esteban v. Court of Appeals, we held that a photocopy of a document has no probative value and is inadmissible in evidence. Thus, the CA was correct in disregarding the said pieces of evidence.  Evangeline D. Imani vs. Metroplitan Bank and Trust Company, G.R. No. 187023, November 17, 2010.

Burden of proof; affirmative defense; payment. It is worth noting that both Vitarich and Losin failed to make a proper recording and documentation of their transactions making it difficult to reconcile the evidence presented by the parties to establish their respective claims.  As a general rule, one who pleads payment has the burden of proving it. In Jimenez v. NLRC, the Court ruled that the burden rests on the debtor to prove payment, rather than on the creditor to prove non-payment. The debtor has the burden of showing with legal certainty that the obligation has been discharged by payment.

True, the law requires in civil cases that the party who alleges a fact has the burden of proving it.  Section 1, Rule 131 of the Rules of Court provides that the burden of proof is the duty of a party to prove the truth of his claim or defense, or any fact in issue by the amount of evidence required by law. In this case, however, the burden of proof is on Losin because she alleges an affirmative defense, namely, payment. Losin failed to discharge that burden.

After examination of the evidence presented, this Court is of the opinion that Losin failed to present a single official receipt to prove payment.  This is contrary to the well-settled rule that a receipt, which is a written and signed acknowledgment that money and goods have been delivered, is the best evidence of the fact of payment although not exclusive.  All she presented were copies of the list of checks allegedly issued to Vitarich through its agent Directo, a Statement of Payments Made to Vitarich, and apparently copies of the pertinent history of her checking account with Rizal Commercial Banking Corporation (RCBC). At best, these may only serve as documentary records of her business dealings with Vitarich to keep track of the payments made but these are not enough to prove payment.

Article 1249, paragraph 2 of the Civil Code provides:

The delivery of promissory notes payable to order, or bills of exchange or other mercantile documents shall produce the effect of payment only when they have been cashed, or when through the fault of the creditor they have been impaired.  [Emphasis supplied]

In the case at bar, no cash payment was proved. It was neither confirmed that the checks issued by Losin were actually encashed by Vitarich. Thus, the Court cannot consider that payment, much less overpayment, made by Losin.  Vitarich Corporation vs. Chona Losin, G.R. No. 181560, November 15, 2010.

Burden of proof; allegation of forgery. Instead of just discrediting the PNP Crime Lab’s findings, Nacu should have channeled her efforts into providing her own proof that the signatures appearing on the questioned SOS were forgeries. After all, whoever alleges forgery has the burden of proving the same by clear and convincing evidence. Nacu could not simply depend on the alleged weakness of the complainant’s evidence without offering stronger evidence to contradict the former.  Irene K. Nacu, etc. vs. Civil Service Commission, et al., G.R. No. 187752, November 23, 2010.

Damages for loss of earning capacity; documentary evidence. The award of damages for loss of earning capacity is concerned with the determination of losses or damages sustained by respondents, as dependents and intestate heirs of the deceased. This consists not of the full amount of his earnings, but of the support which they received or would have received from him had he not died as a consequence of the negligent act. Thus, the amount recoverable is not the loss of the victim’s entire earnings, but rather the loss of that portion of the earnings which the beneficiary would have received.  Indemnity for loss of earning capacity is determined by computing the net earning capacity of the victim.  The CA correctly modified the RTC’s computation. The RTC had misapplied the formula generally used by the courts to determine net earning capacity, which is, to wit:

Net Earning Capacity = life expectancy x (gross annual income – reasonable and necessary living expenses).

Life expectancy shall be computed by applying the formula (2/3 x [80 - age at death]) adopted from the American Expectancy Table of Mortality or the Actuarial of Combined Experience Table of Mortality.  Hence, the RTC erred in modifying the formula and using the retirement age of the members of the PNP instead of “80.”

On the other hand, gross annual income requires the presentation of documentary evidence for the purpose of proving the victim’s annual income. The victim’s heirs presented in evidence Señora’s pay slip from the PNP, showing him to have had a gross monthly salary of P12,754.00. Meanwhile, the victim’s net income was correctly pegged at 50% of his gross income in the absence of proof as regards the victim’s living expenses.

Consequently, the Court sustains the award of P1,887,847.00 as damages for loss of earning capacity. All other aspects of the assailed Decision are affirmed.  Constancia G. Tamayo, et al. vs. Rosalia Abad Señora, et al., G.R. No. 176946, November 15, 2010.

Opinion; opinion of ordinary witness on signature/handwriting. In any case, the CA did not rely solely on the PNP Crime Lab report in concluding that the signatures appearing on the ten SOS were Nacu’s. Margallo, a co-employee who holds the same position as Nacu, also identified the latter’s signatures on the SOS. Such testimony deserves credence. It has been held that an ordinary witness may testify on a signature he is familiar with.  Anyone who is familiar with a person’s writing from having seen him write, from carrying on a correspondence with him, or from having become familiar with his writing through handling documents and papers known to have been signed by him may give his opinion as to the genuineness of that person’s purported signature when it becomes material in the case.  Irene K. Nacu, etc. vs. Civil Service Commission, et al., G.R. No. 187752, November 23, 2010.

Preponderance of evidence. At any rate, the Court is convinced that the decision of the courts below are supported by a preponderance of evidence.  Section 1, Rule 133 of the Revised Rules of Evidence provides how preponderance of evidence is determined:

Section 1. Preponderance of evidence, how determined. – In civil cases, the party having the burden of proof must establish his case by a preponderance of evidence.  In determining where the preponderance or superior weight of evidence on the issues involved lies, the court may consider all the facts and circumstance of the case, the witnesses’ manner of testifying, their intelligence, their means and opportunity of knowing the facts to which they are testifying, the nature of the facts to which they testify, the probability of their testimony, their interest or want of interest, and also their personal credibility so far as the same may legitimately appear upon the trial.  The court may also consider the number of witnesses, though the preponderance is not necessarily with the greater number.

“Preponderance of evidence” is the weight, credit, and value of the aggregate evidence on either side and is usually considered to be synonymous with the term “greater weight of the evidence” or “greater weight of the credible evidence.”  Preponderance of evidence is a phrase which, in the last analysis, means probability of the truth.  It is evidence which is more convincing to the court as worthy of belief than that which is offered in opposition thereto.  If plaintiff claims a right granted or created by law, he must prove his claim by competent evidence.  He must rely on the strength of his own evidence and not upon the weakness of that of his opponent.

Applying said principle in the case at bench, the factual circumstances established by the Villareals through their testimonial and documentary evidences are sufficient and convincing enough to prove that they are entitled to an award of damages for the death of Jose Villareal compared to the bare allegations to the contrary of the Sevillas. These circumstances, which were earlier enumerated, have successfully swayed this Court to believe that indeed the Sevillas are liable for the death of the victim to the exclusion of others except their henchmen.

Furthermore, the Court notes that in the course of their appeal with the CA, the factual conclusions of the RTC were never assailed by the Sevillas. Instead of questioning the facts that would garner them a favorable judgment, what they filed were an “urgent motion to resolve one issue that will make all other issues moot” and a “motion for reconsideration on the sole issue of the extent of the award of unliquidated damages.” Consequently, with the filing of these motions, the factual findings of the lower court were deemed admitted.  Sps. Eliseo Sevilla and Erna Sevilla vs. Hon. Court of Appeals, et al., G.R. No. 150284, November 22, 2010.

Proof of private documents. At any rate, the CA ruling is in accordance with the rules and prevailing jurisprudence.  Section 20 of Rule 132 of the Rules of Evidence provides:

SEC. 20. Proof of private document. – Before any private document offered as authentic is received in evidence, its due execution and authenticity must be proved either:

(a)            By anyone who saw the document executed or written; or

(b)            By evidence of the genuineness of the signature or handwriting of the maker.

Any other private document need only be identified as what it is claimed to be.

Truly, the best evidence of the cancellation of a contract is the original of the deed. The testimony of Brosas alone, without any supporting documentation, is insufficient to prove that the sales to the Buyers had indeed been withdrawn or cancelled.

In Harris Sy Chua v. Court of Appeals and State Financing Center, Inc., it was held that before private documents can be received in evidence, proof of their due execution and authenticity must be presented. This may require the presentation and examination of witnesses to testify as to the due execution and authenticity of such private documents.  When there is no proof as to the authenticity of the writer’s signature appearing in a private document, such private document may be excluded.

Failure to comply with this rule on authentication of private documents resulted in the exclusion of the document sought to be admitted.

In this case, the disbursement vouchers referred to by Brosas were never presented and authenticated. Without satisfactory proof that the buyers withdrew or cancelled their purchases, the said sales are deemed current, binding and consummated. Therefore, WSIRI is entitled to recover from Ledesco the corresponding ten percent (10%) commission on these sales.  Ledesco Development Corp. vs. Worldwide Standard International Realty, Inc., G.R. No. 173339, November 24, 2010.

Substantial evidence. Substantial evidence, the quantum of evidence required in administrative proceedings, means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.  The standard of substantial evidence is satisfied when there is reasonable ground to believe that a person is responsible for the misconduct complained of, even if such evidence might not be overwhelming or even preponderant.

Overall, the testimonies of the witnesses, the statements made by Ligan during the preliminary investigation, and the findings of the PNP Crime Lab on its examination of the signatures on the SOS, amounted to substantial evidence that adequately supported the conclusion that Nacu was guilty of the acts complained of. Petitioners’ allegations of unreliability, irregularities, and inconsistencies of the evidence neither discredited nor weakened the case against Nacu. Irene K. Nacu, etc. vs. Civil Service Commission, et al., G.R. No. 187752, November 23, 2010.

Testimony; credibility.  More specifically, petitioner-spouses’ contention, i.e., that the subject property really belonged to Roman’s first spouse Flavia as her paraphernal property, cannot be sustained.  This position was anchored from the testimony of Josefina that the lot was actually bought by her maternal grandfather and given to her mother Flavia.  Josefina’s declarations before the RTC do not deserve merit and weight, particularly in light of her statement that she was told so by her elders way back in 1923, when at that time she was only around three (3) years of age.  Besides, such a pronouncement was not supported by any proof, save for the lame excuse that the deed of sale showing the said transaction was allegedly lost and destroyed by a typhoon at a time when she was already married, claiming that she was then the custodian of the supposed document.  Evidence, to be worthy of credit, must not only proceed from the mouth of a credible witness but must be credible in itself.  In other words, it must be natural, reasonable, and probable to warrant belief.  The standard as to the truth of human testimony is its conformity to human knowledge, observation, and experience; the courts cannot heed otherwise.  Regretfully, petitioner-spouses’ allegations do not measure up to the yardstick of verity.  Sps. Mariano and Emma Bolaños vs. Roscef Zuñga Bernarte, et al., G.R. No. 180997, November 17, 2010.

Testimony; credibility. The Court holds that the RTC and the CA correctly found Polloso negligent.

To be credible, testimonial evidence should not only come from the mouth of a credible witness but it should also be credible, reasonable, and in accord with human experience.  It should be positive and probable such that it is difficult for a rational mind not to find it credible.  If, as Pascual testified, the truck stopped when the tricycle bumped the motorcycle from behind, then there would have been no accident. Even if the motorcycle was nudged into the path of the truck, as she claimed, there would have been no impact if the truck itself was not moving, and certainly not an impact that would pin the motorcycle’s driver under the truck and throw the motorcycle a few meters away.  Constancia G. Tamayo, et al. vs. Rosalia Abad Señora, et al., G.R. No. 176946, November 15, 2010.

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