RAMON MAGSAYSAY TECHNOLOGICAL UNIVERSITYIba, Zambales

COLLEGE OF LAW

CIVIL PROCEDURE3rd Year, 2nd Semester

I. COURTSA. Court vs Tribunal

Macalintal v PET, GR No 191618, 11-23-2010Corona v Senate, GR No 200242, 07-17-2012

B. Court of Law and EquityFlores v Sps Lendo Jr., GR No 183984, 04-13-2011Baguio Trinity Developers, Inc., v Hrs of Ramos et al, GR No 188331, 12-14-2011Coffee Planters Inc v San Franciso Coffee and Roastery, Inc, GR No 169504, 03-03-2010PAL v NLRC et al, GR No 123294, 10-20-2010Planters Product Inc v Fertiphil Corp GR No 166006, 03-14-2008Beumer v Amores, GR No 195670, 12-03-2012Villeza v German Managment and Services Inc et al GR No 182937, 08-09-2010

C. Tribal CourtBadua v Cordillera Bodong Administration et al, GR No 92649, 02-14-1991

D. Military TribunalRapsing et al v Ables et al, GR No 171855, 10-15-2012

II. JURISDICTIONA. Supreme Court

CREBA v Secretary of Agrarian Reform, GR No 183409, 06-18-2010B. Court of Appeals

NWRB v A L ang Network Inc, GR No 186450, 04-08-2010C. Regional Trial Court

1. Exclusive and Original JurisdictionLBP v Villegas et al, GR Nos 180384/180891, 03-26-2010Gomez-Castillo v COMELEC et al, GR No 187231, 06-22-2010

2. General JurisdictionTamano v Ortiz et al, GR No 126603, 06-29-1998Monater et al vs Sharia District Court et al, GR No 174975, 01-20-2009Tomawis v Balindog et al, GR No 182434, 03-05-2010Dacasin v Dacasin, GR No 168785, 02-05-2010Julian-Llave v Republic et al, GR No 169766, 03-30-2011Republic v Fe-Sagun, GR No 187567, 02-15-2012

3. Appellate JurisdictionMunicipality of Sta Fe v Municipality of Aritao, GR No 140474, 09-21-2007

ANABELLE A. TALAO-URBANO

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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 191618               November 23, 2010

ATTY. ROMULO B. MACALINTAL, Petitioner, vs.PRESIDENTIAL ELECTORAL TRIBUNAL, Respondent.

D E C I S I O N

NACHURA, J.:

Confronting us is an undesignated petition1 filed by Atty. Romulo B. Macalintal (Atty. Macalintal), that questions the constitution of the Presidential Electoral Tribunal (PET) as an illegal and unauthorized progeny of Section 4,2Article VII of the Constitution:

The Supreme Court, sitting en banc, shall be the sole judge of all contests relating to the election, returns, and qualifications of the President or Vice-President, and may promulgate its rules for the purpose.

While petitioner concedes that the Supreme Court is "authorized to promulgate its rules for the purpose," he chafes at the creation of a purportedly "separate tribunal" complemented by a budget allocation, a seal, a set of personnel and confidential employees, to effect the constitutional mandate. Petitioner’s averment is supposedly supported by the provisions of the 2005 Rules of the Presidential Electoral Tribunal (2005 PET Rules),3specifically:

(1) Rule 3 which provides for membership of the PET wherein the Chief Justice and the Associate Justices are designated as "Chairman and Members," respectively;

(2) Rule 8(e) which authorizes the Chairman of the PET to appoint employees and confidential employees of every member thereof;

(3) Rule 9 which provides for a separate "Administrative Staff of the Tribunal" with the appointment of a Clerk and a Deputy Clerk of the Tribunal who, at the discretion of the PET, may designate the Clerk of Court (en banc) as the Clerk of the Tribunal; and

(4) Rule 11 which provides for a "seal" separate and distinct from the Supreme Court seal.

Grudgingly, petitioner throws us a bone by acknowledging that the invoked constitutional provision does allow the "appointment of additional personnel."

Further, petitioner highlights our decision in Buac v. COMELEC4 which peripherally declared that "contests involving the President and the Vice-President fall within the exclusive original jurisdiction of the PET, x x x in the exercise of quasi-judicial power." On this point, petitioner reiterates that the constitution of the PET, with the designation of the Members of the Court as Chairman and Members thereof, contravenes Section 12, Article VIII of the Constitution, which prohibits the designation of Members of the Supreme Court and of other courts established by law to any agency performing quasi-judicial or administrative functions.

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The Office of the Solicitor General (OSG), as directed in our Resolution dated April 6, 2010, filed a Comment5thereon. At the outset, the OSG points out that the petition filed by Atty. Macalintal is unspecified and without statutory basis; "the liberal approach in its preparation x x x is a violation of the well known rules of practice and pleading in this jurisdiction."

In all, the OSG crystallizes the following issues for resolution of the Court:

I WHETHER x x x PETITIONER HAS LOCUS STANDI TO FILE THE INSTANT PETITION.

II WHETHER x x x THE CREATION OF THE PRESIDENTIAL ELECTORAL TRIBUNAL IS UNCONSTITUTIONAL FOR BEING A VIOLATION OF PARAGRAPH 7, SECTION 4 OF ARTICLE VII OF THE 1987 CONSTITUTION.

III WHETHER x x x THE DESIGNATION OF MEMBERS OF THE SUPREME COURT AS MEMBERS OF THE PRESIDENTIAL ELECTORAL TRIBUNAL IS UNCONSTITUTIONAL FOR BEING A VIOLATION OF SECTION 12, ARTICLE VIII OF THE 1987 CONSTITUTION.6

In his Reply,7 petitioner maintains that:

1. He has legal standing to file the petition given his averment of transcendental importance of the issues raised therein;

2. The creation of the PET, a separate tribunal from the Supreme Court, violates Section 4, Article VII of the Constitution; and

3. The PET, being a separate tribunal, exercises quasi-judicial functions contrary to Section 12, Article VIII of the Constitution.

We winnow the meanderings of petitioner into the singular issue of whether the constitution of the PET, composed of the Members of this Court, is unconstitutional, and violates Section 4, Article VII and Section 12, Article VIII of the Constitution.

But first, we dispose of the procedural issue of whether petitioner has standing to file the present petition.

The issue of locus standi is derived from the following requisites of a judicial inquiry:

1. There must be an actual case or controversy;

2. The question of constitutionality must be raised by the proper party;

3. The constitutional question must be raised at the earliest possible opportunity; and

4. The decision of the constitutional question must be necessary to the determination of the case itself.8

On more than one occasion we have characterized a proper party as one who has sustained or is in immediate danger of sustaining an injury as a result of the act complained of.9 The dust has long settled on the test laid down in Baker v. Carr:10 "whether the party has alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult questions."11 Until and unless such actual or threatened injury is established, the complainant is not clothed with legal personality to raise the constitutional question.

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Our pronouncements in David v. Macapagal-Arroyo12 illuminate:

The difficulty of determining locus standi arises in public suits. Here, the plaintiff who asserts a "public right" in assailing an allegedly illegal official action, does so as a representative of the general public. He may be a person who is affected no differently from any other person. He could be suing as a "stranger," or in the category of a "citizen," or "taxpayer." In either case, he has to adequately show that he is entitled to seek judicial protection. In other words, he has to make out a sufficient interest in the vindication of the public order and the securing of relief as a" citizen" or "taxpayer."

x x x x

However, to prevent just about any person from seeking judicial interference in any official policy or act with which he disagreed with, and thus hinders the activities of governmental agencies engaged in public service, the United States Supreme Court laid down the more stringent "direct injury" test in Ex Parte Levitt, later reaffirmed in Tileston v. Ullman. The same Court ruled that for a private individual to invoke the judicial power to determine the validity of an executive or legislative action, he must show that he has sustained a direct injury as a result of that action, and it is not sufficient that he has a general interest common to all members of the public.

This Court adopted the "direct injury" test in our jurisdiction. In People v. Vera, it held that the person who impugns the validity of a statute must have "a personal and substantial interest in the case such that he has sustained, or will sustain direct injury as a result." The Vera doctrine was upheld in a litany of cases, such as, Custodio v. President of the Senate, Manila Race Horse Trainers’ Association v. De la Fuente, Pascual v. Secretary of Public Works and Anti-Chinese League of the Philippines v. Felix.

However, being a mere procedural technicality, the requirement of locus standi may be waived by the Court in the exercise of its discretion. This was done in the 1949 Emergency Powers Cases, Araneta v. Dinglasan, where the "transcendental importance" of the cases prompted the Court to act liberally. Such liberality was neither a rarity nor accidental. In Aquino v. Comelec, this Court resolved to pass upon the issues raised due to the "far-reaching implications" of the petition notwithstanding its categorical statement that petitioner therein had no personality to file the suit. Indeed, there is a chain of cases where this liberal policy has been observed, allowing ordinary citizens, members of Congress, and civic organizations to prosecute actions involving the constitutionality or validity of laws, regulations and rulings.

x x x x

By way of summary, the following rules may be culled from the cases decided by this Court. Taxpayers, voters, concerned citizens, and legislators may be accorded standing to sue, provided that the following requirements are met:

(1) cases involve constitutional issues;

(2) for taxpayers, there must be a claim of illegal disbursement of public funds or that the tax measure is unconstitutional;

(3) for voters, there must be a showing of obvious interest in the validity of the election law in question;

(4) for concerned citizens, there must be a showing that the issues raised are of transcendental importance which must be settled early; and

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(5) for legislators, there must be a claim that the official action complained of infringes upon their prerogatives as legislators.

Contrary to the well-settled actual and direct injury test, petitioner has simply alleged a generalized interest in the outcome of this case, and succeeds only in muddling the issues. Paragraph 2 of the petition reads:

2. x x x Since the creation and continued operation of the PET involves the use of public funds and the issue raised herein is of transcendental importance, it is petitioner’s humble submission that, as a citizen, a taxpayer and a member of the BAR, he has the legal standing to file this petition.

But even if his submission is valid, petitioner’s standing is still imperiled by the white elephant in the petition, i.e., his appearance as counsel for former President Gloria Macapagal-Arroyo (Macapagal-Arroyo) in the election protest filed by 2004 presidential candidate Fernando Poe, Jr. before the Presidential Electoral Tribunal,13because judicial inquiry, as mentioned above, requires that the constitutional question be raised at the earliest possible opportunity.14 Such appearance as counsel before the Tribunal, to our mind, would have been the first opportunity to challenge the constitutionality of the Tribunal’s constitution.

Although there are recognized exceptions to this requisite, we find none in this instance. Petitioner is unmistakably estopped from assailing the jurisdiction of the PET before which tribunal he had ubiquitously appeared and had acknowledged its jurisdiction in 2004. His failure to raise a seasonable constitutional challenge at that time, coupled with his unconditional acceptance of the Tribunal’s authority over the case he was defending, translates to the clear absence of an indispensable requisite for the proper invocation of this Court’s power of judicial review. Even on this score alone, the petition ought to be dismissed outright.

Prior to petitioner’s appearance as counsel for then protestee Macapagal-Arroyo, we had occasion to affirm the grant of original jurisdiction to this Court as a Presidential Electoral Tribunal in the auspicious case of Tecson v. Commission on Elections.15 Thus -

Petitioners Tecson, et al., in G.R. No. 161434, and Velez, in G.R. No. 161634, invoke the provisions of Article VII, Section 4, paragraph 7, of the 1987 Constitution in assailing the jurisdiction of the COMELEC when it took cognizance of SPA No. 04-003 and in urging the Supreme Court to instead take on the petitions they directly instituted before it. The Constitutional provision cited reads:

"The Supreme Court, sitting en banc, shall be the sole judge of all contests relating to the election, returns, and qualifications of the President or Vice-President, and may promulgate its rules for the purpose."

The provision is an innovation of the 1987 Constitution. The omission in the 1935 and the 1973 Constitution to designate any tribunal to be the sole judge of presidential and vice-presidential contests, has constrained this Court to declare, in Lopez vs. Roxas, as "not (being) justiciable" controversies or disputes involving contests on the elections, returns and qualifications of the President or Vice-President. The constitutional lapse prompted Congress, on 21 June 1957, to enact Republic Act No. 1793, "An Act Constituting an Independent Presidential Electoral Tribunal to Try, Hear and Decide Protests Contesting the Election of the President-Elect and the Vice-President-Elect of the Philippines and Providing for the Manner of Hearing the Same." Republic Act 1793 designated the Chief Justice and the Associate Justices of the Supreme Court to be the members of the tribunal. Although the subsequent adoption of the parliamentary form of government under the 1973 Constitution might have implicitly affected Republic Act No. 1793, the statutory set-up, nonetheless, would now be deemed revived under the present Section 4, paragraph 7, of the 1987 Constitution.

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Former Chief Justice Reynato S. Puno, in his separate opinion, was even more categorical:

The Court is unanimous on the issue of jurisdiction. It has no jurisdiction on the Tecson and Valdez petitions. Petitioners cannot invoke Article VII, Section 4, par. 7 of the Constitution which provides:

"The Supreme Court, sitting en banc shall be the sole judge of all contests relating to the election, returns and qualifications of the President or Vice President and may promulgate its rules for the purpose."

The word "contest" in the provision means that the jurisdiction of this Court can only be invoked after the election and proclamation of a President or Vice President. There can be no "contest" before a winner is proclaimed.16

Similarly, in her separate opinion, Justice Alicia Austria-Martinez declared:

G.R. Nos. 161434 and 161634 invoke the Court’s exclusive jurisdiction under the last paragraph of Section 4, Article VII of the 1987 Constitution. I agree with the majority opinion that these petitions should be dismissed outright for prematurity. The Court has no jurisdiction at this point of time to entertain said petitions.

The Supreme Court, as a Presidential Electoral Tribunal (PET), the Senate Electoral Tribunal (SET) and House of Representatives Electoral Tribunal (HRET) are electoral tribunals, each specifically and exclusively clothed with jurisdiction by the Constitution to act respectively as "sole judge of all contests relating to the election, returns, and qualifications" of the President and Vice-President, Senators, and Representatives. In a litany of cases, this Court has long recognized that these electoral tribunals exercise jurisdiction over election contests only after a candidate has already been proclaimed winner in an election. Rules 14 and 15 of the Rules of the Presidential Electoral Tribunal provide that, for President or Vice-President, election protest or quo warranto may be filed after the proclamation of the winner.17

Petitioner, a prominent election lawyer who has filed several cases before this Court involving constitutional and election law issues, including, among others, the constitutionality of certain provisions of Republic Act (R.A.) No. 9189 (The Overseas Absentee Voting Act of 2003),18 cannot claim ignorance of: (1) the invocation of our jurisdiction under Section 4, Article VII of the Constitution; and (2) the unanimous holding thereon. Unquestionably, the overarching framework affirmed in Tecson v. Commission on Elections19 is that the Supreme Court has original jurisdiction to decide presidential and vice-presidential election protests while concurrently acting as an independent Electoral Tribunal.

Despite the foregoing, petitioner is adamant on his contention that the provision, as worded, does not authorize the constitution of the PET. And although he concedes that the Supreme Court may promulgate its rules for this purpose, petitioner is insistent that the constitution of the PET is unconstitutional. However, petitioner avers that it allows the Court to appoint additional personnel for the purpose, notwithstanding the silence of the constitutional provision.

Petitioner’s pastiche arguments are all hurled at the Court, hopeful that at least one might possibly stick. But these arguments fail to elucidate on the scope of the rules the Supreme Court is allowed to promulgate. Apparently, petitioner’s concept of this adjunct of judicial power is very restrictive. Fortunately, thanks in no part to petitioner’s opinion, we are guided by well-settled principles of constitutional construction.

Verba legis dictates that wherever possible, the words used in the Constitution must be given their ordinary meaning except where technical terms are employed, in which case the significance thus

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attached to them prevails. This Court, speaking through former Chief Justice Enrique Fernando, in J.M. Tuason & Co., Inc. v. Land Tenure Administration20 instructs:

As the Constitution is not primarily a lawyer’s document, it being essential for the rule of law to obtain that it should ever be present in the people’s consciousness, its language as much as possible should be understood in the sense they have in common use. What it says according to the text of the provision to be construed compels acceptance and negates the power of the courts to alter it, based on the postulate that the framers and the people mean what they say. Thus these are cases where the need for construction is reduced to a minimum.

However, where there is ambiguity or doubt, the words of the Constitution should be interpreted in accordance with the intent of its framers or ratio legis et anima. A doubtful provision must be examined in light of the history of the times, and the condition and circumstances surrounding the framing of the Constitution.21 In following this guideline, courts should bear in mind the object sought to be accomplished in adopting a doubtful constitutional provision, and the evils sought to be prevented or remedied.22 Consequently, the intent of the framers and the people ratifying the constitution, and not the panderings of self-indulgent men, should be given effect.

Last, ut magis valeat quam pereat – the Constitution is to be interpreted as a whole. We intoned thus in the landmark case of Civil Liberties Union v. Executive Secretary:23

It is a well-established rule in constitutional construction that no one provision of the Constitution is to be separated from all the others, to be considered alone, but that all the provisions bearing upon a particular subject are to be brought into view and to be so interpreted as to effectuate the great purposes of the instrument. Sections bearing on a particular subject should be considered and interpreted together as to effectuate the whole purpose of the Constitution and one section is not to be allowed to defeat another, if by any reasonable construction, the two can be made to stand together.

In other words, the court must harmonize them, if practicable, and must lean in favor of a construction which will render every word operative, rather than one which may make the words idle and nugatory.

We had earlier expounded on this rule of construction in Chiongbian v. De Leon, et al., 24 to wit:

[T]he members of the Constitutional Convention could not have dedicated a provision of our Constitution merely for the benefit of one person without considering that it could also affect others. When they adopted subsection 2, they permitted, if not willed, that said provision should function to the full extent of its substance and its terms, not by itself alone, but in conjunction with all other provisions of that great document.

On its face, the contentious constitutional provision does not specify the establishment of the PET. But neither does it preclude, much less prohibit, otherwise. It entertains divergent interpretations which, though unacceptable to petitioner, do not include his restrictive view – one which really does not offer a solution.

Section 4, Article VII of the Constitution, the provision under scrutiny, should be read with other related provisions of the Constitution such as the parallel provisions on the Electoral Tribunals of the Senate and the House of Representatives.

Before we resort to the records of the Constitutional Commission, we discuss the framework of judicial power mapped out in the Constitution. Contrary to petitioner’s assertion, the Supreme Court’s constitutional mandate to act as sole judge of election contests involving our country’s

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highest public officials, and its rule-making authority in connection therewith, is not restricted; it includes all necessary powers implicit in the exercise thereof.

We recall the unprecedented and trailblazing case of Marcos v. Manglapus:25

The 1987 Constitution has fully restored the separation of powers of the three great branches of government. To recall the words of Justice Laurel in Angara v. Electoral Commission, "the Constitution has blocked but with deft strokes and in bold lines, allotment of power to the executive, the legislative and the judicial departments of the government." Thus, the 1987 Constitution explicitly provides that "[t]he legislative power shall be vested in the Congress of the Philippines" [Art. VI, Sec. 1], "[t]he executive power shall be vested in the President of the Philippines" [Art. VII, Sec. 1], and "[t]he judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law" [Art. VIII, Sec. 1]. These provisions not only establish a separation of powers by actual division but also confer plenary legislative, executive and judicial powers subject only to limitations provided in the Constitution. For as the Supreme Court in Ocampo v. Cabangis pointed out "a grant of the legislative power means a grant of all legislative power; and a grant of the judicial power means a grant of all the judicial power which may be exercised under the government."

The Court could not have been more explicit then on the plenary grant and exercise of judicial power. Plainly, the abstraction of the Supreme Court acting as a Presidential Electoral Tribunal from the unequivocal grant of jurisdiction in the last paragraph of Section 4, Article VII of the Constitution is sound and tenable.

The mirabile dictu of the grant of jurisdiction to this Court, albeit found in the Article on the executive branch of government, and the constitution of the PET, is evident in the discussions of the Constitutional Commission. On the exercise of this Court’s judicial power as sole judge of presidential and vice-presidential election contests, and to promulgate its rules for this purpose, we find the proceedings in the Constitutional Commission most instructive:

MR. DAVIDE. On line 25, after the words "Vice-President," I propose to add AND MAY PROMULGATE ITS RULES FOR THE PURPOSE. This refers to the Supreme Court sitting en banc. This is also to confer on the Supreme Court exclusive authority to enact the necessary rules while acting as sole judge of all contests relating to the election, returns and qualifications of the President or Vice-President.

MR. REGALADO. My personal position is that the rule-making power of the Supreme Court with respect to its internal procedure is already implicit under the Article on the Judiciary; considering, however, that according to the Commissioner, the purpose of this is to indicate the sole power of the Supreme Court without intervention by the legislature in the promulgation of its rules on this particular point, I think I will personally recommend its acceptance to the Committee.26

x x x x

MR. NOLLEDO. x x x.

With respect to Sections 10 and 11 on page 8, I understand that the Committee has also created an Electoral Tribunal in the Senate and a Commission on Appointments which may cover membership from both Houses. But my question is: It seems to me that the committee report does not indicate which body should promulgate the rules that shall govern the Electoral Tribunal and the Commission on Appointments. Who shall then promulgate the rules of these bodies?

MR. DAVIDE. The Electoral Tribunal itself will establish and promulgate its rules because it is a body distinct and independent already from the House, and so with the Commission on Appointments also. It will have the authority to promulgate its own rules.27

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On another point of discussion relative to the grant of judicial power, but equally cogent, we listen to former Chief Justice Roberto Concepcion:

MR. SUAREZ. Thank you.

Would the Commissioner not consider that violative of the doctrine of separation of powers?

MR. CONCEPCION. I think Commissioner Bernas explained that this is a contest between two parties. This is a judicial power.

MR. SUAREZ. We know, but practically the Committee is giving to the judiciary the right to declare who will be the President of our country, which to me is a political action.

MR. CONCEPCION. There are legal rights which are enforceable under the law, and these are essentially justiciable questions.

MR. SUAREZ. If the election contest proved to be long, burdensome and tedious, practically all the time of the Supreme Court sitting en banc would be occupied with it considering that they will be going over millions and millions of ballots or election returns, Madam President.28

Echoing the same sentiment and affirming the grant of judicial power to the Supreme Court, Justice Florenz D. Regalado29 and Fr. Joaquin Bernas30 both opined:

MR. VILLACORTA. Thank you very much, Madam President.

I am not sure whether Commissioner Suarez has expressed his point. On page 2, the fourth paragraph of Section 4 provides:

The Supreme Court, sitting en banc, shall be the sole judge of all contests relating to the election, returns and qualifications of the President or Vice-President.

May I seek clarification as to whether or not the matter of determining the outcome of the contests relating to the election returns and qualifications of the President or Vice-President is purely a political matter and, therefore, should not be left entirely to the judiciary. Will the above-quoted provision not impinge on the doctrine of separation of powers between the executive and the judicial departments of the government?

MR. REGALADO. No, I really do not feel that would be a problem. This is a new provision incidentally. It was not in the 1935 Constitution nor in the 1973 Constitution.

MR. VILLACORTA. That is right.

MR. REGALADO. We feel that it will not be an intrusion into the separation of powers guaranteed to the judiciary because this is strictly an adversarial and judicial proceeding.

MR. VILLACORTA. May I know the rationale of the Committee because this supersedes Republic Act 7950 which provides for the Presidential Electoral Tribunal?

FR. BERNAS. Precisely, this is necessary. Election contests are, by their nature, judicial. Therefore, they are cognizable only by courts. If, for instance, we did not have a constitutional provision on an electoral tribunal for the Senate or an electoral tribunal for the House, normally, as composed, that cannot be given jurisdiction over contests.

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So, the background of this is really the case of Roxas v. Lopez. The Gentleman will remember that in that election, Lopez was declared winner. He filed a protest before the Supreme Court because there was a republic act which created the Supreme Court as the Presidential Electoral Tribunal. The question in this case was whether new powers could be given the Supreme Court by law. In effect, the conflict was actually whether there was an attempt to create two Supreme Courts and the answer of the Supreme Court was: "No, this did not involve the creation of two Supreme Courts, but precisely we are giving new jurisdiction to the Supreme Court, as it is allowed by the Constitution. Congress may allocate various jurisdictions."

Before the passage of that republic act, in case there was any contest between two presidential candidates or two vice-presidential candidates, no one had jurisdiction over it. So, it became necessary to create a Presidential Electoral Tribunal. What we have done is to constitutionalize what was statutory but it is not an infringement on the separation of powers because the power being given to the Supreme Court is a judicial power.31

Unmistakable from the foregoing is that the exercise of our power to judge presidential and vice-presidential election contests, as well as the rule-making power adjunct thereto, is plenary; it is not as restrictive as petitioner would interpret it. In fact, former Chief Justice Hilario G. Davide, Jr., who proposed the insertion of the phrase, intended the Supreme Court to exercise exclusive authority to promulgate its rules of procedure for that purpose. To this, Justice Regalado forthwith assented and then emphasized that the sole power ought to be without intervention by the legislative department. Evidently, even the legislature cannot limit the judicial power to resolve presidential and vice-presidential election contests and our rule-making power connected thereto.

To foreclose all arguments of petitioner, we reiterate that the establishment of the PET simply constitutionalized what was statutory before the 1987 Constitution. The experiential context of the PET in our country cannot be denied.32

Consequently, we find it imperative to trace the historical antecedents of the PET.

Article VII, Section 4, paragraph 7 of the 1987 Constitution is an innovation. The precursors of the present Constitution did not contain similar provisions and instead vested upon the legislature all phases of presidential and vice-presidential elections – from the canvassing of election returns, to the proclamation of the president-elect and the vice-president elect, and even the determination, by ordinary legislation, of whether such proclamations may be contested. Unless the legislature enacted a law creating an institution that would hear election contests in the Presidential and Vice-Presidential race, a defeated candidate had no legal right to demand a recount of the votes cast for the office involved or to challenge the ineligibility of the proclaimed candidate. Effectively, presidential and vice-presidential contests were non-justiciable in the then prevailing milieu.

The omission in the 1935 Constitution was intentional. It was mainly influenced by the absence of a similar provision in its pattern, the Federal Constitution of the United States. Rather, the creation of such tribunal was left to the determination of the National Assembly. The journal of the 1935 Constitutional Convention is crystal clear on this point:

Delegate Saguin. – For an information. It seems that this Constitution does not contain any provision with respect to the entity or body which will look into the protests for the positions of the President and Vice-President.

President Recto. – Neither does the American constitution contain a provision over the subject.

Delegate Saguin. – But then, who will decide these protests?

President Recto. – I suppose that the National Assembly will decide on that.33

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To fill the void in the 1935 Constitution, the National Assembly enacted R.A. No. 1793, establishing an independent PET to try, hear, and decide protests contesting the election of President and Vice-President. The Chief Justice and the Associate Justices of the Supreme Court were tasked to sit as its Chairman and Members, respectively. Its composition was extended to retired Supreme Court Justices and incumbent Court of Appeals Justices who may be appointed as substitutes for ill, absent, or temporarily incapacitated regular members.

The eleven-member tribunal was empowered to promulgate rules for the conduct of its proceedings. It was mandated to sit en banc in deciding presidential and vice-presidential contests and authorized to exercise powers similar to those conferred upon courts of justice, including the issuance of subpoena, taking of depositions, arrest of witnesses to compel their appearance, production of documents and other evidence, and the power to punish contemptuous acts and bearings. The tribunal was assigned a Clerk, subordinate officers, and employees necessary for the efficient performance of its functions.

R.A. No. 1793 was implicitly repealed and superseded by the 1973 Constitution which replaced the bicameral legislature under the 1935 Constitution with the unicameral body of a parliamentary government.

With the 1973 Constitution, a PET was rendered irrelevant, considering that the President was not directly chosen by the people but elected from among the members of the National Assembly, while the position of Vice-President was constitutionally non-existent.

In 1981, several modifications were introduced to the parliamentary system. Executive power was restored to the President who was elected directly by the people. An Executive Committee was formed to assist the President in the performance of his functions and duties. Eventually, the Executive Committee was abolished and the Office of Vice-President was installed anew.

These changes prompted the National Assembly to revive the PET by enacting, on December 3, 1985, Batas Pambansa Bilang (B.P. Blg.) 884, entitled "An Act Constituting an Independent Presidential Electoral Tribunal to Try, Hear and Decide Election Contests in the Office of the President and Vice-President of the Philippines, Appropriating Funds Therefor and For Other Purposes." This tribunal was composed of nine members, three of whom were the Chief Justice of the Supreme Court and two Associate Justices designated by him, while the six were divided equally between representatives of the majority and minority parties in the Batasang Pambansa.

Aside from the license to wield powers akin to those of a court of justice, the PET was permitted to recommend the prosecution of persons, whether public officers or private individuals, who in its opinion had participated in any irregularity connected with the canvassing and/or accomplishing of election returns.

The independence of the tribunal was highlighted by a provision allocating a specific budget from the national treasury or Special Activities Fund for its operational expenses. It was empowered to appoint its own clerk in accordance with its rules. However, the subordinate officers were strictly employees of the judiciary or other officers of the government who were merely designated to the tribunal.

After the historic People Power Revolution that ended the martial law era and installed Corazon Aquino as President, civil liberties were restored and a new constitution was formed.

With R.A. No. 1793 as framework, the 1986 Constitutional Commission transformed the then statutory PET into a constitutional institution, albeit without its traditional nomenclature:

FR. BERNAS. x x x.

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x x x. So it became necessary to create a Presidential Electoral Tribunal. What we have done is to constitutionalize what was statutory but it is not an infringement on the separation of powers because the power being given to the Supreme Court is a judicial power.34

Clearly, petitioner’s bete noire of the PET and the exercise of its power are unwarranted. His arguments that: (1) the Chief Justice and Associate Justices are referred to as "Chairman" and "Members," respectively; (2) the PET uses a different seal; (3) the Chairman is authorized to appoint personnel; and (4) additional compensation is allocated to the "Members," in order to bolster his claim of infirmity in the establishment of the PET, are too superficial to merit further attention by the Court.

Be that as it may, we hasten to clarify the structure of the PET as a legitimate progeny of Section 4, Article VII of the Constitution, composed of members of the Supreme Court, sitting en banc. The following exchange in the 1986 Constitutional Commission should provide enlightenment:

MR. SUAREZ. Thank you. Let me proceed to line 23, page 2, wherein it is provided, and I quote:

The Supreme Court, sitting en banc[,] shall be the sole judge of all contests relating to the election, returns and qualifications of the President or Vice-President.

Are we not giving enormous work to the Supreme Court especially when it is directed to sit en banc as the sole judge of all presidential and vice-presidential election contests?

MR. SUMULONG. That question will be referred to Commissioner Concepcion.

MR. CONCEPCION. This function was discharged by the Supreme Court twice and the Supreme Court was able to dispose of each case in a period of one year as provided by law. Of course, that was probably during the late 1960s and early 1970s. I do not know how the present Supreme Court would react to such circumstances, but there is also the question of who else would hear the election protests.

MR. SUAREZ. We are asking this question because between lines 23 to 25, there are no rules provided for the hearings and there is not time limit or duration for the election contest to be decided by the Supreme Court. Also, we will have to consider the historical background that when R.A. 1793, which organized the Presidential Electoral Tribunal, was promulgated on June 21, 1957, at least three famous election contests were presented and two of them ended up in withdrawal by the protestants out of sheer frustration because of the delay in the resolution of the cases. I am referring to the electoral protest that was lodged by former President Carlos P. Garcia against our "kabalen" former President Diosdado Macapagal in 1961 and the vice-presidential election contest filed by the late Senator Gerardo Roxas against Vice-President Fernando Lopez in 1965.

MR. CONCEPCION. I cannot answer for what the protestants had in mind. But when that protest of Senator Roxas was withdrawn, the results were already available. Senator Roxas did not want to have a decision adverse to him. The votes were being counted already, and he did not get what he expected so rather than have a decision adverse to his protest, he withdrew the case.

x x x x

MR. SUAREZ. I see. So the Commission would not have any objection to vesting in the Supreme Court this matter of resolving presidential and vice-presidential contests?

MR. CONCEPCION. Personally, I would not have any objection.

12

MR. SUAREZ. Thank you.

Would the Commissioner not consider that violative of the doctrine of separation of powers?

MR. CONCEPCION. I think Commissioner Bernas explained that this is a contest between two parties. This is a judicial power.

MR. SUAREZ. We know, but practically the Committee is giving to the judiciary the right to declare who will be the President of our country, which to me is a political action.

MR. CONCEPCION. There are legal rights which are enforceable under the law, and these are essentially justiciable questions.

MR. SUAREZ. If the election contest proved to be long, burdensome and tedious, practically all the time of the Supreme Court sitting en banc would be occupied with it considering that they will be going over millions and millions of ballots or election returns, Madam President.

MR. CONCEPCION. The time consumed or to be consumed in this contest for President is dependent upon they key number of teams of revisors. I have no experience insofar as contests in other offices are concerned.

MR. SUAREZ. Although there is a requirement here that the Supreme Court is mandated to sit en banc?

MR. CONCEPCION. Yes.

MR. SUAREZ. I see.

MR. CONCEPCION. The steps involved in this contest are: First, the ballot boxes are opened before teams of three, generally, a representative each of the court, of the protestant and of the "protestee." It is all a questions of how many teams are organized. Of course, that can be expensive, but it would be expensive whatever court one would choose. There were times that the Supreme Court, with sometimes 50 teams at the same time working, would classify the objections, the kind of problems, and the court would only go over the objected votes on which the parties could not agree. So it is not as awesome as it would appear insofar as the Court is concerned. What is awesome is the cost of the revision of the ballots because each party would have to appoint one representative for every team, and that may take quite a big amount.

MR. SUAREZ. If we draw from the Commissioner’s experience which he is sharing with us, what would be the reasonable period for the election contest to be decided?

MR. CONCEPCION. Insofar as the Supreme Court is concerned, the Supreme Court always manages to dispose of the case in one year.

MR. SUAREZ. In one year. Thank you for the clarification.35

Obvious from the foregoing is the intent to bestow independence to the Supreme Court as the PET, to undertake the Herculean task of deciding election protests involving presidential and vice-presidential candidates in accordance with the process outlined by former Chief Justice Roberto Concepcion. It was made in response to the concern aired by delegate Jose E. Suarez that the additional duty may prove too burdensome for the Supreme Court. This explicit grant of independence and of the plenary powers needed to discharge this burden justifies the budget allocation of the PET.

13

The conferment of additional jurisdiction to the Supreme Court, with the duty characterized as an "awesome" task, includes the means necessary to carry it into effect under the doctrine of necessary implication.36 We cannot overemphasize that the abstraction of the PET from the explicit grant of power to the Supreme Court, given our abundant experience, is not unwarranted.

A plain reading of Article VII, Section 4, paragraph 7, readily reveals a grant of authority to the Supreme Court sitting en banc. In the same vein, although the method by which the Supreme Court exercises this authority is not specified in the provision, the grant of power does not contain any limitation on the Supreme Court’s exercise thereof. The Supreme Court’s method of deciding presidential and vice-presidential election contests, through the PET, is actually a derivative of the exercise of the prerogative conferred by the aforequoted constitutional provision. Thus, the subsequent directive in the provision for the Supreme Court to "promulgate its rules for the purpose."

The conferment of full authority to the Supreme Court, as a PET, is equivalent to the full authority conferred upon the electoral tribunals of the Senate and the House of Representatives, i.e., the Senate Electoral Tribunal (SET) and the House of Representatives Electoral Tribunal (HRET),37 which we have affirmed on numerous occasions.38

Particularly cogent are the discussions of the Constitutional Commission on the parallel provisions of the SET and the HRET. The discussions point to the inevitable conclusion that the different electoral tribunals, with the Supreme Court functioning as the PET, are constitutional bodies, independent of the three departments of government – Executive, Legislative, and Judiciary – but not separate therefrom.

MR. MAAMBONG. x x x.

My questions will be very basic so we can go as fast as we can. In the case of the electoral tribunal, either of the House or of the Senate, is it correct to say that these tribunals are constitutional creations? I will distinguish these with the case of the Tanodbayan and the Sandiganbayan which are created by mandate of the Constitution but they are not constitutional creations. Is that a good distinction?

x x x x

MR. MAAMBONG. Could we, therefore, say that either the Senate Electoral Tribunal or the House Electoral Tribunal is a constitutional body?

MR. AZCUNA. It is, Madam President.

MR. MAAMBONG. If it is a constitutional body, is it then subject to constitutional restrictions?

MR. AZCUNA. It would be subject to constitutional restrictions intended for that body.

MR. MAAMBONG. I see. But I want to find out if the ruling in the case of Vera v. Avelino, 77 Phil. 192, will still be applicable to the present bodies we are creating since it ruled that the electoral tribunals are not separate departments of the government. Would that ruling still be valid?

MR. AZCUNA. Yes, they are not separate departments because the separate departments are the legislative, the executive and the judiciary; but they are constitutional bodies.39

The view taken by Justices Adolfo S. Azcuna40 and Regalado E. Maambong41 is schooled by our holding in Lopez v. Roxas, et al.:42

14

Section 1 of Republic Act No. 1793, which provides that:

"There shall be an independent Presidential Electoral Tribunal x x x which shall be the sole judge of all contests relating to the election, returns, and qualifications of the president-elect and the vice-president-elect of the Philippines."

has the effect of giving said defeated candidate the legal right to contest judicially the election of the President-elect of Vice-President-elect and to demand a recount of the votes case for the office involved in the litigation, as well as to secure a judgment declaring that he is the one elected president or vice-president, as the case may be, and that, as such, he is entitled to assume the duties attached to said office. And by providing, further, that the Presidential Electoral Tribunal "shall be composed of the Chief Justice and the other ten Members of the Supreme Court," said legislation has conferred upon such Court an additional original jurisdiction of an exclusive character.

Republic Act No. 1793 has not created a new or separate court. It has merely conferred upon the Supreme Court the functions of a Presidential Electoral Tribunal. The result of the enactment may be likened to the fact that courts of first instance perform the functions of such ordinary courts of first instance, those of court of land registration, those of probate courts, and those of courts of juvenile and domestic relations. It is, also, comparable to the situation obtaining when the municipal court of a provincial capital exercises its authority, pursuant to law, over a limited number of cases which were previously within the exclusive jurisdiction of courts of first instance.

In all of these instances, the court (court of first instance or municipal court) is only one, although the functions may be distinct and, even, separate. Thus the powers of a court of first instance, in the exercise of its jurisdiction over ordinary civil cases, are broader than, as well as distinct and separate from, those of the same court acting as a court of land registration or a probate court, or as a court of juvenile and domestic relations. So too, the authority of the municipal court of a provincial capital, when acting as such municipal court, is, territorially more limited than that of the same court when hearing the aforementioned cases which are primary within the jurisdiction of courts of first instance. In other words, there is only one court, although it may perform the functions pertaining to several types of courts, each having some characteristics different from those of the others.

Indeed, the Supreme Court, the Court of Appeals and courts of first instance, are vested with original jurisdiction, as well as with appellate jurisdiction, in consequence of which they are both trial courts and, appellate courts, without detracting from the fact that there is only one Supreme Court, one Court of Appeals, and one court of first instance, clothed with authority to discharge said dual functions. A court of first instance, when performing the functions of a probate court or a court of land registration, or a court of juvenile and domestic relations, although with powers less broad than those of a court of first instance, hearing ordinary actions, is not inferior to the latter, for one cannot be inferior to itself. So too, the Presidential Electoral Tribunal is not inferior to the Supreme Court, since it is the same Court although the functions peculiar to said Tribunal are more limited in scope than those of the Supreme Court in the exercise of its ordinary functions. Hence, the enactment of Republic Act No. 1793, does not entail an assumption by Congress of the power of appointment vested by the Constitution in the President. It merely connotes the imposition of additional duties upon the Members of the Supreme Court.

By the same token, the PET is not a separate and distinct entity from the Supreme Court, albeit it has functions peculiar only to the Tribunal. It is obvious that the PET was constituted in implementation of Section 4, Article VII of the Constitution, and it faithfully complies – not unlawfully defies – the constitutional directive. The adoption of a separate seal, as well as the change in the nomenclature of the Chief Justice and the Associate Justices into Chairman and Members of the Tribunal, respectively, was designed simply to highlight the singularity and exclusivity of the Tribunal’s functions as a special electoral court.

15

As regards petitioner’s claim that the PET exercises quasi-judicial functions in contravention of Section 12, Article VIII of the Constitution, we point out that the issue in Buac v. COMELEC43 involved the characterization of the enforcement and administration of a law relative to the conduct of a plebiscite which falls under the jurisdiction of the Commission on Elections. However, petitioner latches on to the enumeration in Buac which declared, in an obiter, that "contests involving the President and the Vice-President fall within the exclusive original jurisdiction of the PET, also in the exercise of quasi-judicial power."

The issue raised by petitioner is more imagined than real. Section 12, Article VIII of the Constitution reads:

SEC. 12. The Members of the Supreme Court and of other courts established by law shall not be designated to any agency performing quasi-judicial or administrative functions.

The traditional grant of judicial power is found in Section 1, Article VIII of the Constitution which provides that the power "shall be vested in one Supreme Court and in such lower courts as may be established by law." Consistent with our presidential system of government, the function of "dealing with the settlement of disputes, controversies or conflicts involving rights, duties or prerogatives that are legally demandable and enforceable" 44 is apportioned to courts of justice. With the advent of the 1987 Constitution, judicial power was expanded to include "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."45 The power was expanded, but it remained absolute.

The set up embodied in the Constitution and statutes characterizes the resolution of electoral contests as essentially an exercise of judicial power.1avvphi1

At the barangay and municipal levels, original and exclusive jurisdiction over election contests is vested in the municipal or metropolitan trial courts and the regional trial courts, respectively.

At the higher levels – city, provincial, and regional, as well as congressional and senatorial – exclusive and original jurisdiction is lodged in the COMELEC and in the House of Representatives and Senate Electoral Tribunals, which are not, strictly and literally speaking, courts of law. Although not courts of law, they are, nonetheless, empowered to resolve election contests which involve, in essence, an exercise of judicial power, because of the explicit constitutional empowerment found in Section 2(2), Article IX-C (for the COMELEC) and Section 17, Article VI (for the Senate and House Electoral Tribunals) of the Constitution. Besides, when the COMELEC, the HRET, and the SET decide election contests, their decisions are still subject to judicial review – via a petition for certiorari filed by the proper party – if there is a showing that the decision was rendered with grave abuse of discretion tantamount to lack or excess of jurisdiction.46

It is also beyond cavil that when the Supreme Court, as PET, resolves a presidential or vice-presidential election contest, it performs what is essentially a judicial power. In the landmark case of Angara v. Electoral Commission,47Justice Jose P. Laurel enucleated that "it would be inconceivable if the Constitution had not provided for a mechanism by which to direct the course of government along constitutional channels." In fact, Angara pointed out that "[t]he Constitution is a definition of the powers of government." And yet, at that time, the 1935 Constitution did not contain the expanded definition of judicial power found in Article VIII, Section 1, paragraph 2 of the present Constitution.

With the explicit provision, the present Constitution has allocated to the Supreme Court, in conjunction with latter’s exercise of judicial power inherent in all courts,48 the task of deciding presidential and vice-presidential election contests, with full authority in the exercise thereof. The power wielded by PET is a derivative of the plenary judicial power allocated to courts of law,

16

expressly provided in the Constitution. On the whole, the Constitution draws a thin, but, nevertheless, distinct line between the PET and the Supreme Court.

If the logic of petitioner is to be followed, all Members of the Court, sitting in the Senate and House Electoral Tribunals would violate the constitutional proscription found in Section 12, Article VIII. Surely, the petitioner will be among the first to acknowledge that this is not so. The Constitution which, in Section 17, Article VI, explicitly provides that three Supreme Court Justices shall sit in the Senate and House Electoral Tribunals, respectively, effectively exempts the Justices-Members thereof from the prohibition in Section 12, Article VIII. In the same vein, it is the Constitution itself, in Section 4, Article VII, which exempts the Members of the Court, constituting the PET, from the same prohibition.

We have previously declared that the PET is not simply an agency to which Members of the Court were designated. Once again, the PET, as intended by the framers of the Constitution, is to be an institution independent, but not separate, from the judicial department, i.e., the Supreme Court. McCulloch v. State of Maryland49 proclaimed that "[a] power without the means to use it, is a nullity." The vehicle for the exercise of this power, as intended by the Constitution and specifically mentioned by the Constitutional Commissioners during the discussions on the grant of power to this Court, is the PET. Thus, a microscopic view, like the petitioner’s, should not constrict an absolute and constitutional grant of judicial power.

One final note. Although this Court has no control over contrary people and naysayers, we reiterate a word of caution against the filing of baseless petitions which only clog the Court’s docket. The petition in the instant case belongs to that classification.

WHEREFORE, the petition is DISMISSED. Costs against petitioner.

SO ORDERED.

17

SECOND DIVISION ARTURO SARTE FLORES,                      G.R. No. 183984Petitioner,

Present: CARPIO, J., Chairperson,

- versus -                                                     NACHURA,PERALTA,ABAD, andMENDOZA, JJ. 

SPOUSES ENRICO L. LINDO, JR.           Promulgated:and EDNA C. LINDO,Respondents.                                               April 13, 2011x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x 

D E C I S I O N CARPIO, J.: 

The Case 

Before the Court is a petition for review1 assailing the 30 May 2008 Decision2 and the 4 August 2008 Resolution3 of the Court of Appeals in CA-G.R. SP No. 94003.

 The Antecedent Facts

 The facts, as gleaned from the Court of Appeals’ Decision, are as follows:

 On 31 October 1995, Edna Lindo (Edna) obtained a loan from Arturo Flores (petitioner) amounting to P400,000 payable on 1 December 1995 with 3% compounded monthly interest and 3% surcharge in case of late payment. To secure the loan, Edna executed a Deed of Real Estate Mortgage4 (the Deed) covering a property in the name of Edna and her husband Enrico (Enrico) Lindo, Jr. (collectively, respondents). Edna also signed a Promissory Note5 and the Deed for herself and for Enrico as his attorney-in-fact.

 Edna issued three checks as partial payments for the loan. All checks were dishonored for insufficiency of funds, prompting petitioner to file a Complaint for Foreclosure of Mortgage with Damages against respondents. The case was raffled to the Regional Trial Court of Manila, Branch 33 (RTC, Branch 33) and docketed as Civil Case No. 00-97942. 

In its 30 September 2003 Decision,6 the RTC, Branch 33 ruled that petitioner was not entitled to judicial foreclosure of the mortgage. The RTC, Branch 33 found that the Deed was executed by Edna without the consent and authority of Enrico. The RTC, Branch 33 noted that the Deed was executed on 31 October 1995 while the SpecialPower of Attorney (SPA) executed by Enrico was only dated 4 November 1995.

 The RTC, Branch 33 further ruled that petitioner was not precluded from recovering the loan from Edna as he could file a personal action against her. However, the RTC, Branch 33 ruled that it had no jurisdiction over the personal action which should be filed in the place where the plaintiff or the defendant resides in accordance with Section 2, Rule 4 of the Revised Rules on Civil Procedure.

 Petitioner filed a motion for reconsideration. In its Order7 dated 8 January 2004, the RTC, Branch 33 denied the motion for lack of merit.

18

 On 8 September 2004, petitioner filed a Complaint for Sum of Money with Damages against respondents. It was raffled to Branch 42 (RTC, Branch 42) of the Regional Trial Court of Manila, and docketed as Civil Case No. 04-110858.

 Respondents filed their Answer with Affirmative Defenses and Counterclaims where they admitted the loan but stated that it only amounted to P340,000. Respondents further alleged that Enrico was not a party to the loan because it was contracted by Edna without Enrico’s signature. Respondents prayed for the dismissal of the case on the grounds of improper venue, res judicata and forum-shopping, invoking the Decision of the RTC, Branch 33. On 7 March 2005, respondents also filed a Motion to Dismisson the grounds of res judicata and lack of cause of action.

The Decision of the Trial Court

 On 22 July 2005, the RTC, Branch 42 issued an Order8 denying the motion to dismiss. The RTC, Branch 42 ruled that res judicata will not apply to rights, claims or demands which, although growing out of the same subject matter, constitute separate or distinct causes of action and were not put in issue in the former action. Respondents filed a motion for reconsideration. In its Order9 dated 8 February 2006, the RTC, Branch 42 denied respondents’ motion. The RTC, Branch 42 ruled that the RTC, Branch 33 expressly stated that its decision did not mean that petitioner could no longer recover the loan petitioner extended to Edna.

 Respondents filed a Petition for Certiorari and Mandamus with Prayer for a Writ of Preliminary Injunction and/or Temporary Restraining Order before the Court of Appeals.

The Decision of the Court of Appeals

In its 30 May 2008 Decision, the Court of Appeals set aside the 22 July 2005 and 8 February 2006 Orders of the RTC, Branch 42 for having been issued with grave abuse of discretion.

 The Court of Appeals ruled that while the general rule is that a motion to dismiss is interlocutory and not appealable, the rule admits of exceptions. The Court of Appeals ruled that the RTC, Branch 42 acted with grave abuse of discretion in denying respondents’ motion to dismiss.

 The Court of Appeals ruled that under Section 3, Rule 2 of the 1997 Rules of Civil Procedure, a party may not institute more than one suit for a single cause of action. If two or more suits are instituted on the basis of the same cause of action, the filing of one on a judgment upon the merits in any one is available ground for the dismissal of the others. The Court of Appeals ruled that on a nonpayment of a note secured by a mortgage, the creditor has a single cause of action against the debtor, that is recovery of the credit with execution of the suit. Thus, the creditor may institute two alternative remedies: either a personal action for the collection of debt or a real action to foreclose the mortgage, but not both. The Court of Appeals ruled that petitioner had only one cause of action against Edna for her failure to pay her obligation and he could not split the single cause of action by filing separately a foreclosure proceeding and a collection case. By filing a petition for foreclosure of the real estate mortgage, the Court of Appeals held that petitioner had already waived his personal action to recover the amount covered by the promissory note.

 Petitioner filed a motion for reconsideration. In its 4 August 2008 Resolution, the Court of Appeals denied the motion.

 Hence, the petition before this Court.

19

The Issue

 The sole issue in this case is whether the Court of Appeals committed a reversible error in dismissing the complaint for collection of sum of money on the ground of multiplicity of suits.

 The Ruling of this Court

 The petition has merit.

 The rule is that a mortgage-creditor has a single cause of action against a mortgagor-debtor, that is, to recover the debt.10 The mortgage-creditor has the option of either filing a personal action for collection of sum of money or instituting a real action to foreclose on the mortgage security.11 An election of the first bars recourse to the second, otherwise there would be multiplicity of suits in which the debtor would be tossed from one venue to another depending on the location of the mortgaged properties and the residence of the parties.12

 The two remedies are alternative and each remedy is complete by itself.13 If the mortgagee opts to foreclose the real estate mortgage, he waives the action for the collection of the debt, and vice versa.14 The Court explained:

x x x in the absence of express statutory provisions, a mortgage creditor may institute against the mortgage debtor either a personal action for debt or a real action to foreclose the mortgage. In other words, he may pursue either of the two remedies, but not both. By such election, his cause of action can by no means be impaired, for each of the two remedies is complete in itself. Thus, an election to bring a personal action will leave open to him all the properties of the debtor for attachment and execution, even including the mortgaged property itself. And, if he waives such personal action and pursues his remedy against the mortgaged property, an unsatisfied judgment thereon would still give him the right to sue for deficiency judgment, in which case, all the properties of the defendant, other than the mortgaged property, are again open to him for the satisfaction of the deficiency. In either case, his remedy is complete, his cause of action undiminished, and any advantages attendant to the pursuit of one or the other remedy are purely accidental and are all under his right of election. On the other hand, a rule that would authorize the plaintiff to bring a personal action against the debtor and simultaneously or successively another action against the mortgaged property, would result not only in multiplicity of suits so offensive to justice (Soriano v. Enriques, 24 Phil. 584) and obnoxious to law and equity (Osorio v. San Agustin, 25 Phil. 404), but also in subjecting the defendant to the vexation of being sued in the place of his residence or of the residence of the plaintiff, and then again in the place where the property lies.15

 The Court has ruled that if a creditor is allowed to file his separate complaints simultaneously or successively, one to recover his credit and another to foreclose his mortgage, he will, in effect, be authorized plural redress for a single breach of contract at so much costs to the court and with so much vexation and oppressiveness to the debtor.16

In this case, however, there are circumstances that the Court takes into consideration.

 Petitioner filed an action for foreclosure of mortgage. The RTC, Branch 33 ruled that petitioner was not entitled to judicial foreclosure because the Deed of Real Estate Mortgage was executed without Enrico’s consent. The RTC, Branch 33 stated:

20

All these circumstances certainly conspired against the plaintiff who has the burden of proving his cause of action. On the other hand, said circumstances tend to support the claim of defendant EdnaLindo that her husband did not consent to the mortgage of their conjugal property and that the loan application was her personal decision.

Accordingly, since the Deed of Real Estate Mortgage was executed by defendant Edna Lindo lacks the consent or authority of her husband Enrico Lindo, the Deed of Real Estate Mortgage is void pursuant to Article 96 of the Family Code.

This does not mean, however, that the plaintiff cannot recover the P400,000 loan plus interest which he extended to defendant Edna Lindo. He can institute a personal action against the defendant for the amount due which should be filed in the place where the plaintiff resides, or where the defendant or any of the principal defendants resides at the election of the plaintiff in accordance with Section 2, Rule 4 of the Revised Rules on Civil Procedure. This Court has no jurisdiction to try such personal action.17

 Edna did not deny before the RTC, Branch 33 that she obtained the loan. She claimed, however, that her husband did not give his consent and that he was not aware of the transaction.18 Hence, the RTC, Branch 33 held that petitioner could still recover the amount due from Edna through a personal action over which it had no jurisdiction.

 Edna also filed an action for declaratory relief before the RTC, Branch 93 of San Pedro Laguna (RTC, Branch 93), which ruled:

At issue in this case is the validity of the promissory note and the Real Estate Mortgage executed by Edna Lindo without the consent of her husband.

The real estate mortgage executed by petition Edna Lindo over their conjugal property is undoubtedly an act of strict dominion and must be consented to by her husband to be effective. In the instant case, the real estate mortgage, absent the authority or consent of the husband, is necessarily void. Indeed, the real estate mortgage is this case was executed on October 31, 1995 and the subsequent special power of attorney dated November 4, 1995 cannot be made to retroact to October 31, 1995 to validate the mortgage previously made by petitioner.

The liability of Edna Lindo on the principal contract of the loan however subsists notwithstanding the illegality of the mortgage. Indeed, where a mortgage is not valid, the principal obligation which it guarantees is not thereby rendered null and void. That obligation matures and becomes demandable in accordance with the stipulation pertaining to it. Under the foregoing circumstances, what is lost is merely the right to foreclose the mortgage as a special remedy for satisfying or settling the indebtedness which is the principal obligation. In case of nullity, the mortgage deed remains as evidence or proof of a personal obligation of the debtor and the amount due to the creditor may be enforced in an ordinary action.

In view of the foregoing, judgment is hereby rendered declaring the deed of real estate mortgage as void in the absence of the authority or consent of petitioner’s spouse therein. The liability of petitioner on the principal contract of loan however subsists notwithstanding the illegality of the real estate mortgage.19

 The RTC, Branch 93 also ruled that Edna’s liability is not affected by the illegality of the real estate mortgage.

21

 Both the RTC, Branch 33 and the RTC, Branch 93 misapplied the rules.

 Article 124 of the Family Code provides:

 Art. 124. The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly. In case of disagreement, the husband’s decision shall prevail, subject to recourse to the court by the wife for proper remedy, which must be availed of within five years from the date of contract implementing such decision.

In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority of the court or the written consent of the other spouse. In the absence of such authority or consent the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. (Emphasis supplied)

 Article 124 of the Family Code of which applies to conjugal partnership property, is a reproduction of Article 96 of the Family Code which applies to community property.

 Both Article 96 and Article 127 of the Family Code provide that the powers do not include disposition or encumbrance without the written consent of the other spouse. Any disposition or encumbrance without the written consent shall be void. However, both provisions also state that “the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse x x x before the offer is withdrawn by either or both offerors.”

 In this case, the Promissory Note and the Deed of Real Estate Mortgage were executed on 31 October 1995. The Special Power of Attorney was executed on 4 November 1995. The execution of the SPA is the acceptance by the other spouse that perfected the continuing offer as a binding contract between the parties, making the Deed of Real Estate Mortgage a valid contract.

 However, as the Court of Appeals noted, petitioner allowed the decisions of the RTC, Branch 33 and the RTC, Branch 93 to become final and executory without asking the courts for an alternative relief. The Court of Appeals stated that petitioner merely relied on the declarations of these courts that he could file a separate personal action and thus failed to observe the rules and settled jurisprudence on multiplicity of suits, closing petitioner’s avenue for recovery of the loan.

 Nevertheless, petitioner still has a remedy under the law.

 In Chieng v. Santos,20 this Court ruled that a mortgage-creditor may institute against the mortgage-debtor either a personal action for debt or a real action to foreclose the mortgage. The Court ruled that the remedies are alternative and not cumulative and held that the filing of a criminal action for violation of Batas Pambansa Blg. 22 was in effect a collection suit or a suit for the recovery of the mortgage-debt.21 In that case, however, this Court pro hac vice, ruled that respondents could still be held liable for the balance of the loan, applying the principle that no person may unjustly enrich himself at the expense of another.22

22

 The principle of unjust enrichment is provided under Article 22 of the Civil Code which provides:

Art. 22. Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him.

 There is unjust enrichment “when a person unjustly retains a benefit to the loss of another, or when a person retains money or property of another against the fundamental principles of justice, equity and good conscience.”23 The principle of unjust enrichment requires two conditions: (1) that a person is benefited without a valid basis or justification, and (2) that such benefit is derived at the expense of another.24

The main objective of the principle against unjust enrichment is to prevent one from enriching himself at the expense of another without just cause or consideration.25 The principle is applicable in this case considering that Edna admitted obtaining a loan from petitioners, and the same has not been fully paid without just cause. The Deed was declared void erroneously at the instance of Edna, first when she raised it as a defense before the RTC, Branch 33 and second, when she filed an action for declaratory relief before the RTC, Branch 93. Petitioner could not be expected to ask the RTC, Branch 33 for an alternative remedy, as what the Court of Appeals ruled that he should have done, because the RTC, Branch 33 already stated that it had no jurisdiction over any personal action that petitioner might have against Edna.

Considering the circumstances of this case, the principle against unjust enrichment, being a substantive law, should prevail over the procedural rule on multiplicity of suits. The Court of Appeals, in the assailed decision, found that Edna admitted the loan, except that she claimed it only amounted to P340,000. Edna should not be allowed to unjustly enrich herself because of the erroneous decisions of the two trial courts when she questioned the validity of the Deed. Moreover, Edna still has an opportunity to submit her defenses before the RTC, Branch 42 on her claim as to the amount of her indebtedness.

WHEREFORE, the 30 May 2008 Decision and the 4 August 2008 Resolution of the Court of Appeals in CA-G.R. SP No. 94003 are SET ASIDE. The Regional Trial Court of Manila, Branch 42 is directed to proceed with the trial of Civil Case No. 04-110858.

SO ORDERED.

THIRD DIVISION 

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 BAGUIO TRINITY DEVELOPERS,      G.R. No. 188381INC., herein represented byRICARDO JULIAN,                             Petitioner,                       Present:

                                                                              VELASCO, JR., J., Chairperson,

          - versus -                                             PERALTA,  ABAD,  SERENO,* and  PERLAS-BERNABE, JJ.

THE HEIRS OF JOSE RAMOSand THE HEIRS OF LEOPOLDOand VICTORINA NEPA; and the           Promulgated:HONORABLE COURT OF APPEALS,                             Respondents.                    December 14, 2011 x --------------------------------------------------------------------------------------- x  

DECISION ABAD, J.:  

The case is about a) the requirement in a petition for annulment of judgment of the submission of a certified true copy of the assailed judgment or order and b) laches as a bar to a property owner’s action to annul a reconstituted version of his title registered in another person’s name.

  The Facts and the Case

           Spouses Meliton Grabiles and Leona Calderon (the Grabiles) were the original registered owners of a 2,933-square-meter lot in Rosario, La Union.[1]  After a number of successive transfers the lot was eventually sold to petitioner Baguio Trinity Developers, Inc. on January 3, 1994, resulting in the issuance of Transfer Certificate of Title T-38340 in its name.           It appears, however, that in 1985 Anastacio Laroco and Leona Javier filed a reconstitution proceeding before Branch 31 of the Regional Trial Court (RTC) of Agoo, La Union, covering the Grabiles’ original title.  But for some reasons, the RTC’s order of October 20, 1986 directed the reconstitution of the title in the name of one Maria Bernal.  This order was annotated on the Grabiles’ Original Certificate of Title (OCT) 1082 issued by the Register of Deeds of La Union.  

In 1986, Melicia Silva filed a second petition purportedly on behalf of the Grabiles for the reconstitution of their original title also before Branch 31 of the RTC of Agoo.  In its order of October 28, 1986, the RTC ordered the reconstitution of the title in the name of the Grabiles as OCT RO-4717.  Entry 89953 of this reconstituted original title stated that the property had been sold in 1939 to a certain Jose Ramos.  So, too, in 1944, the southern portion of the lot, covering 1,372 square meters, was sold to Quirini Parrocha who in turn sold it in 1955 to the spouses Leopoldo and Victorina Nepa (the Nepas).  Respondents in this case are the heirs of these two buyers, Jose Ramos and the Nepas (the Ramos and Nepa heirs).           On September 14, 1995 petitioner Baguio Trinity filed a complaint for recovery and declaration of nullity of title and damages before the Municipal Trial Court (MTC) of Rosario, La Union, against the Ramos and Nepa heirs who held reconstituted titles over the property.  Since Baguio Trinity

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presented the issue on the validity of the reconstituted titles issued by the RTC, a superior court, the MTC dismissed the complaint for lack of jurisdiction.           On December 3, 1997 petitioner Baguio Trinity filed a second complaint for recovery of property, declaration of nullity of title, and damages before the RTC of Agoo, Branch 32. But, by Order of May 31, 2004, the RTC dismissed the complaint for lack of jurisdiction after finding that the assessed value of the subject property was below P20,000.00.  Moreover, the court said that it could not annul an order issued by a co-equal court. The RTC also denied Baguio Trinity’s motion for reconsideration, prompting it to file a petition for certiorari with the Court of Appeals (CA) on October 13, 2004.  On September 13, 2007[2] the CA dismissed the petition, stating that Baguio Trinity’s remedy should have been a petition to annul judgment under Rule 47 of the Rules of Court. 

Three years later from the time the RTC dismissed the complaint or on December 20, 2007 petitioner Baguio Trinity filed with the CA a petition for annulment of the reconstitution orders that the RTC of Agoo, Branch 31, issued on October 20, 1986 and October 28, 1986, impleading the Ramos and Nepa heirs. Baguio Trinity claimed that the RTC had no jurisdiction to order reconstitution for the Grabiles’ title since this was not lost. Further, the Grabiles could not have authorized anyone to institute the proceedings on their behalf since they had been long dead. Thus, the orders should be annulled for lack of jurisdiction.           On May 8, 2008 the CA[3] dismissed the petition on the grounds that it failed to attach a) a certified copy of the RTC Order dated October 20, 1986, and b) copies of the affidavits of witnesses and the documents, and the pleadings filed during the reconstitution proceedings, the notices of hearing, and the titles issued to petitioner’s predecessors-in-interest in support of petitioner’s cause of action. Further, petitioner paid insufficient docket fees.           Petitioner Baguio Trinity filed a motion for reconsideration and attached a copy of the affidavit of Cresencio Aspiras, their immediate predecessor, together with copies of reconstituted titles issued to previous owners to show the chain of ownership before Baguio Trinity acquired title to the property.  It also paid the deficiency in the docket fees and explained that a certified true copy of the assailed Order cannot be obtained because the records were destroyed during the July 16, 1990 earthquake per RTC Certification of November 14, 2007.           But the CA denied petitioner’s motion of November 7, 2008, citing Section 4, par. 2 of Rule 47 which provides that a “certified copy of the judgment or final order shall be attached to the original copy of the petition.”   The mandatory tenor of the requirement, said the CA, precluded Baguio Trinity’s submission of some other copy of such judgment or final order.            In any event, the CA held that the petition was barred by laches since Baguio Trinity had notice of the reconstitution orders as early as 1995 when it filed an action (the first that it filed) for declaration of nullity of titles and damages before the MTC, a wrong court.   Baguio Trinity filed its action to annul the orders of reconstitution with the CA only on December 21, 2007 or 12 years after that court affirmed the RTC order dismissing the complaint (the second action filed) before the RTC of Agoo, Branch 32.             Because the CA denied petitioner Baguio Trinity’s motion for reconsideration of its ruling in its resolution of April 24, 2009, petitioner has taken recourse to this Court.  

The Issue           The only issue before this Court is whether or not the CA erred in dismissing petitioner Baguio Trinity’s action for annulment of judgment a) by reason of its failure to comply with the requirement of submission of certified true copies of the assailed RTC orders; and b) on ground of laches. 

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The Court’s Rulings 

One.  In denying the petition before it, one of the grounds the CA gave was that petitioner Baguio Trinity failed to attach to its petition for annulment of judgment a “certified copy of the judgment or final order,” which requirement is mandatory.  Without it, the court “would have no bases to form a decision.”  Besides, said the CA, petitioner could have obtained a certified copy of the same from the Land Registration Authority (LRA) which is usually furnished a copy, just as petitioner was able to secure a copy of the October 28, 1986 Order from the LRA.  The Register of Deeds is also usually furnished a copy of such order.           Evidently, when Section 4, Rule 47 of the Rules of Civil Procedure provided that “a certified copy of the judgment or final order or resolution shall be attached to the original copy of the petition intended for the court and indicated as such by the petitioner,” it wanted to ensure that the Court is shown a genuine copy of the challenged judgment or final order before it acts on the petition.           The Court is aware of the necessity of mandating strict compliance with procedural rules. Here, however, the 1990 earthquake resulted in the loss or destruction of the RTC records of the case.  The administration of justice cannot stop to grind because of such loss and no one should suffer or benefit from it.                   And who can issue a certified copy of the lost orders?  The answer is that it can be issued by the public officer in custody of the original of the document. [4] Here, it is the clerk of court of the RTC that issued the challenged reconstitution orders.  But the clerk of court issued a certification, conformably with Section 28 of Rule 132, that the relevant records are no longer available having been lost to an earthquake.  That the record custodian could no longer issue a certified copy should not of course prevent an aggrieved party from pursuing his petition.  The rules allow such party to submit appropriate secondary evidence.           Section 5, Rule 130 of the Rules of Evidence provides that when the original document has been lost and its unavailability has been established, a party “may prove its contents by a copy or by a recital of its contents in some authentic document or by the testimony of witnesses in the order stated.”  Copies of the challenged reconstitution orders from the LRA or the Register of Deeds are of course available to petitioner Baguio Trinity.  But it could just as validly submit faithful copies of its challenged reconstitution orders, authenticated by a verified statement that these are copies of the original orders.  The Baguio Trinity did.  Consequently, the CA had no valid reason denying its petition for failure to attach a copy of the assailed reconstitution orders.            Notably, the respondent Ramos and Nepa heirs have not questioned the authenticity of the submitted copies.  At any rate, the Court notes that petitioner Baguio Trinity attached certified machine copies of the assailed Orders supplied by the LRA as annexes to the present petition.           As for copies of documents and pleadings filed during the reconstitution proceedings, the notices of hearing, and the titles issued to petitioner’s predecessors-in-interest, which the CA wanted petitioner Baguio Trinity to submit, these could very well be adduced during the hearing since their relevance could hardly be discerned until the issues have been joined.           Two.  The CA also dismissed petitioner’s action for annulment of final orders on the further ground that such action is already barred by laches.  The CA pointed out that petitioner Baguio Trinity learned of the reconstitution orders as early as 1995.  Still, the action for the annulment of those orders was filed only 12 years later on December 21, 2007.  

The RTC of Agoo ordered the reconstitution of the Grabiles title when, if Baguio Trinity’s allegations were to be believed, the original of such title actually existed and had since been replaced through subsequent sales, terminating their ownership of the property.  As things now

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stand, two sets of titles covering the same property, one based on transactions emanating from the original and another based on the reconstituted titles exist.  One has to give way to the other. 

Petitioner Baguio Trinity initially brought an action to annul the reconstituted versions of the Grabiles’ title before the MTC of Rosario, La Union, on September 14, 1995 but that court dismissed the same for lack of jurisdiction and opined that it should be filed with the RTC.

   Baguio Trinity filed a second action on December 3, 1997 for recovery of property,

declaration of nullity of the titles, and damages before the RTC of Agoo, Branch 32, against the Ramos and Nepa heirs who held the reconstituted titles.  But the RTC dismissed the action on May 31, 2004 saying that it cannot annul the orders issued by a co-equal court. This, the CA Sixth Division affirmed and held that Baguio Trinity should have availed itself of a petition for annulment under Rule 47.

  Baguio Trinity finally filed before the CA an action for annulment of the reconstitution orders

on the ground that the RTC did not have jurisdiction to issue them.  It is not right for the CA to dismiss such action by reason of laches simply because no inaction is evident on Baguio Trinity’s part.  In fact, it had been an unintentional object of relay between the lower courts which contributed to the delay in the proceedings. 

 The petition for annulment alleged serious charges which if true can invalidate respondents’

title. Such title had been subjected to two reconstitution proceedings that could have divested the true owner of title over his property. The conflict between the two sets of titles has to be resolved.  The present standoff cannot remain indefinitely under a titling system that assures the existence of only one valid title for every piece of registered land.  Evidently, laches cannot bar an action sought to relieve such intolerable standoff. 

           WHEREFORE, the Court GRANTS the petition and sets aside the Court of Appeals Resolutions dated May 8, 2008 and November 7, 2008 and directs such court to hear and decide the merits of the petition for annulment of judgment.           SO ORDERED.

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SECOND DIVISION  COFFEE PARTNERS, INC.,                              G.R. No. 169504                            Petitioner,                                                                      Present:                                                                                                         CARPIO, J., Chairperson,                                                                    VELASCO, JR.,*                                                                        DEL CASTILLO,               - versus -                                   ABAD, and                                                                     PEREZ, JJ.      SAN FRANCISCO COFFEE &                Promulgated:ROASTERY, INC.,                                                   Respondent.                March 3, 2010x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x  

D E C I S I O N 

 CARPIO, J.: 

 The Case          This is a petition for review[1] of the 15 June 2005 Decision[2] and the     1 September 2005 Resolution[3] of the Court of Appeals in CA-G.R. SP      No. 80396. In its 15 June 2005 Decision, the Court of Appeals set aside the 22 October 2003 Decision[4] of the Office of the Director General-Intellectual Property Office and reinstated the 14 August 2002 Decision [5] of the Bureau of Legal Affairs-Intellectual Property Office. In its 1 September 2005 Resolution, the Court of Appeals denied petitioner’s motion for reconsideration and respondent’s motion for partial reconsideration. The Facts          Petitioner Coffee Partners, Inc. is a local corporation engaged in the business of establishing and maintaining coffee shops in the country. It registered with the Securities and Exchange Commission (SEC) in January 2001. It has a franchise agreement [6] with Coffee Partners Ltd. (CPL), a business entity organized and existing under the laws of British Virgin Islands, for a non-exclusive right to operate coffee shops in the Philippines using trademarks designed by CPL such as “SAN FRANCISCO COFFEE.”          Respondent is a local corporation engaged in the wholesale and retail sale of coffee. It registered with the SEC in May 1995. It registered the business name “SAN FRANCISCO COFFEE & ROASTERY, INC.” with the Department of Trade and Industry (DTI) in June 1995. Respondent had since built a customer base that included Figaro Company, Tagaytay Highlands, Fat Willy’s, and other coffee companies.          In 1998, respondent formed a joint venture company with Boyd Coffee USA under the company name Boyd Coffee Company Philippines, Inc. (BCCPI). BCCPI engaged in the processing, roasting, and wholesale selling of coffee. Respondent later embarked on a project study of setting up coffee carts in malls and other commercial establishments in Metro Manila.          In June 2001, respondent discovered that petitioner was about to open a coffee shop under the name “SAN FRANCISCO COFFEE” in Libis, Quezon City. According to respondent, petitioner’s shop caused confusion in the minds of the public as it bore a similar name and it also engaged in the

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business of selling coffee. Respondent sent  a letter to petitioner demanding that the latter stop using the name “SAN FRANCISCO COFFEE.” Respondent also filed a complaint with the Bureau of Legal Affairs-Intellectual Property Office (BLA-IPO) for infringement and/or unfair competition with claims for damages.          In its answer, petitioner denied the allegations in the complaint. Petitioner alleged it filed with the Intellectual Property Office (IPO) applications for registration of the mark “SAN FRANCISCO COFFEE & DEVICE” for class 42 in 1999 and for class 35 in 2000. Petitioner maintained its mark could not be confused with respondent’s trade name because of the notable distinctions in their appearances. Petitioner argued respondent stopped operating under the trade name “SAN FRANCISCO COFFEE” when it formed a joint venture with Boyd Coffee USA. Petitioner contended respondent did not cite any specific acts that would lead one to believe petitioner had, through fraudulent means, passed off its mark as that of respondent, or that it had diverted business away from respondent.          Mr. David Puyat, president of petitioner corporation, testified that the coffee shop in Libis, Quezon City opened sometime in June 2001 and that another coffee shop would be opened in Glorietta Mall, Makati City. He stated that the coffee shop was set up pursuant to a franchise agreement executed in January 2001 with CPL, a British Virgin Island Company owned by Robert Boxwell. Mr. Puyat said he became involved in the business when one Arthur Gindang invited him to invest in a coffee shop and  introduced him to Mr. Boxwell. For his part, Mr. Boxwell attested that the coffee shop  “SAN FRANCISCO COFFEE” has branches in Malaysia and Singapore. He added that he formed CPL in 1997 along with two other colleagues, Shirley Miller John and Leah Warren, who were former managers of Starbucks Coffee Shop in the United States. He said they decided to invest in a similar venture and adopted the name “SAN FRANCISCO COFFEE” from the famous city in California where he and his former colleagues once lived and where special coffee roasts came from. The Ruling of the Bureau of Legal Affairs-Intellectual Property Office          In its 14 August 2002 Decision, the BLA-IPO held that petitioner’s trademark infringed on respondent’s trade name. It ruled that the right to the exclusive use of a trade name with freedom from infringement by similarity is determined from priority of adoption. Since respondent registered its business name with the DTI in 1995 and petitioner registered its trademark with the IPO in 2001 in the Philippines and in 1997 in other countries, then respondent must be protected from infringement of its trade name.          The BLA-IPO also held that respondent did not abandon the use of its trade name as substantial evidence indicated respondent continuously used its trade name in connection with the purpose for which it was organized. It found that although respondent was no longer involved in blending, roasting, and distribution of coffee because of the creation of BCCPI, it continued making plans and doing research on the retailing of coffee and the setting up of coffee carts. The BLA-IPO ruled that for abandonment to exist, the disuse must be permanent, intentional, and voluntary.          The BLA-IPO held that petitioner’s use of the trademark “SAN FRANCISCO COFFEE” will likely cause confusion because of the exact similarity in sound, spelling, pronunciation, and commercial impression of the words “SAN FRANCISCO” which is the dominant portion of respondent’s trade name and petitioner’s trademark. It held that no significant difference resulted even with a diamond-shaped figure with a cup in the center in petitioner's trademark because greater weight is given to words – the medium consumers use in ordering coffee products.          On the issue of unfair competition, the BLA-IPO absolved petitioner from liability. It found that petitioner adopted the trademark “SAN FRANCISCO COFFEE” because of the authority granted to it by its franchisor. The BLA-IPO held there was no evidence of intent to defraud on the part of petitioner.

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          The BLA-IPO also dismissed respondent’s claim of actual damages because its claims of profit loss were based on mere assumptions as respondent had not even started the operation of its coffee carts. The BLA-IPO likewise dismissed respondent’s claim of moral damages, but granted its claim of attorney’s fees.          Both parties moved for partial reconsideration. Petitioner protested the finding of infringement, while respondent questioned the denial of actual damages. The BLA-IPO denied the parties’ partial motion for reconsideration. The parties appealed to the Office of the Director General-Intellectual Property Office (ODG-IPO). The Ruling of the Office of the Director General-Intellectual Property Office          In its 22 October 2003 Decision, the ODG-IPO reversed the BLA-IPO. It  ruled that petitioner’s use of the trademark “SAN FRANCISCO COFFEE” did not infringe on respondent's trade name. The ODG-IPO found that respondent had stopped using its trade name after it entered into a joint venture with Boyd Coffee USA in 1998 while petitioner continuously used the trademark since June 2001 when it opened its first coffee shop in Libis, Quezon City. It ruled that between a subsequent user of a trade name in good faith and a prior user who had stopped using such trade name, it would be inequitable to rule in favor of the latter. The Ruling of the Court of Appeals          In its 15 June 2005 Decision, the Court of Appeals set aside the        22 October 2003 decision of the ODG-IPO in so far as it ruled that there was no infringement. It reinstated the 14 August 2002 decision of the BLA-IPO finding infringement. The appellate court denied respondent’s claim for actual damages and retained the award of attorney’s fees. In its 1 September 2005 Resolution, the Court of Appeals denied petitioner’s motion for reconsideration and respondent’s motion for partial reconsideration. The Issue                         The sole issue is whether petitioner’s use of the trademark “SAN FRANCISCO COFFEE”

constitutes infringement of respondent’s trade name “SAN FRANCISCO COFFEE & ROASTERY, INC.,” even if the trade name is not registered with the Intellectual Property Office (IPO).

 The Court’s Ruling          The petition has no merit.           Petitioner contends that when a trade name is not registered, a suit for infringement is not available. Petitioner alleges respondent has abandoned its trade name. Petitioner points out that respondent’s registration of its business name with the DTI expired on 16 June 2000 and it was only in 2001 when petitioner opened a coffee shop in Libis, Quezon City that respondent made a belated effort to seek the renewal of its business name registration. Petitioner stresses respondent’s failure to continue the use of its trade name to designate its goods negates any allegation of infringement. Petitioner claims no confusion is likely to occur between its trademark and respondent’s trade name because of a wide divergence in the channels of trade, petitioner serving ready-made coffee while respondent is in wholesale blending, roasting, and distribution of coffee. Lastly, petitioner avers the proper noun “San Francisco” and the generic word “coffee” are not capable of exclusive appropriation.          Respondent maintains the law protects trade names from infringement even if they are not registered with the IPO. Respondent claims Republic Act No. 8293 (RA 8293) [7] dispensed with

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registration of a trade name with the IPO as a requirement for the filing of an action for infringement. All that is required is that the trade name is previously used in trade or commerce in the Philippines. Respondent insists it never abandoned the use of its trade name as evidenced by its letter to petitioner demanding immediate discontinuation of the use of its trademark and by the filing of the infringement case. Respondent alleges petitioner’s trademark is confusingly similar to respondent’s trade name. Respondent stresses ordinarily prudent consumers are likely to be misled about the source, affiliation, or sponsorship of petitioner’s coffee.          As to the issue of alleged abandonment of trade name by respondent, the BLA-IPO found that respondent continued to make plans and do research on the retailing of coffee and the establishment of coffee carts, which negates abandonment. This finding was upheld by the Court of Appeals, which further found that while respondent stopped using its trade name in its business of selling coffee, it continued to import and sell coffee machines, one of the services for which the use of the business name has been registered. The binding effect of the factual findings of the Court of Appeals on this Court applies with greater force when both the quasi-judicial body or tribunal like the BLA-IPO and the Court of Appeals are in complete agreement on their factual findings. It is also settled that absent any circumstance requiring the overturning of the factual conclusions made by the quasi-judicial body or tribunal, particularly if affirmed by the Court of Appeals, the Court necessarily upholds such findings of fact.[8]

          Coming now to the main issue, in Prosource International, Inc. v. Horphag Research Management SA,[9] this Court laid down what constitutes infringement of an unregistered trade name, thus: 

(1)   The trademark being infringed is registered in the Intellectual      Property Office; however, in infringement of trade name, the same need not be registered;

(2)   The trademark or trade name is reproduced, counterfeited, copied, or colorably imitated by the infringer;

 (3)   The infringing mark or trade name is used in connection with the sale, offering for sale, or advertising of any goods, business or services; or the infringing mark or trade name is applied to labels, signs, prints, packages, wrappers, receptacles, or advertisements intended to be used upon or in connection with such goods, business, or services;

 (4)   The use or application of the infringing mark or trade name is likely to cause confusion or mistake or to deceive purchasers or others as to the goods or services themselves or as to the source or origin of such goods or services or the identity of such business; and

 (5)   It is without the consent of the trademark or trade name owner or the assignee thereof.[10] (Emphasis supplied)

          Clearly, a trade name need not be registered with the IPO before an infringement suit may be filed by its owner against the owner of an infringing trademark. All that is required is that the trade name is previously used in trade or commerce in the Philippines.[11]

          Section 22 of Republic Act No. 166,[12] as amended, required registration of a trade name as a condition for the institution of an infringement suit, to wit: 

            Sec. 22.  Infringement, what constitutes. – Any person who shall use, without the consent of the registrant, any reproduction, counterfeit, copy, or colorable imitation of any registered mark or trade name in connection with the sale, offering for sale, or advertising of any goods, business or services on or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers or others as to the source or origin of such goods or services, or identity of such business; or reproduce, counterfeit, copy, or colorably imitate any such mark

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or trade name and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles, or advertisements intended to be used upon or in connection with such goods, business, or services, shall be liable to a civil action by the registrant for any or all of the remedies herein provided. (Emphasis supplied)

                     HOWEVER, RA 8293, WHICH TOOK EFFECT ON 1 JANUARY 1998, HAS DISPENSED WITH THE REGISTRATION REQUIREMENT. SECTION 165.2 OF RA 8293 CATEGORICALLY STATES THAT TRADE NAMES SHALL BE PROTECTED, EVEN PRIOR TO OR WITHOUT REGISTRATION WITH THE IPO, AGAINST ANY UNLAWFUL ACT INCLUDING ANY SUBSEQUENT USE OF THE TRADE NAME BY A THIRD PARTY, WHETHER AS A TRADE NAME OR A TRADEMARK LIKELY TO MISLEAD THE PUBLIC. THUS: 

          SEC. 165.2 (A) NOTWITHSTANDING ANY LAWS OR REGULATIONS PROVIDING FOR ANY OBLIGATION TO REGISTER TRADE NAMES, SUCH NAMES SHALL BE PROTECTED, EVEN PRIOR TO OR WITHOUT REGISTRATION, AGAINST ANY UNLAWFUL ACT COMMITTED BY THIRD PARTIES.           

            (B) IN PARTICULAR, ANY SUBSEQUENT USE OF A TRADE NAME BY A THIRD PARTY, WHETHER AS A TRADE NAME OR A MARK OR COLLECTIVE MARK, OR ANY SUCH USE OF A SIMILAR TRADE NAME OR MARK, LIKELY TO MISLEAD THE PUBLIC, SHALL BE DEEMED UNLAWFUL. (EMPHASIS SUPPLIED)                  IT IS THE LIKELIHOOD OF CONFUSION THAT IS THE GRAVAMEN OF INFRINGEMENT. BUT THERE IS NO ABSOLUTE STANDARD FOR LIKELIHOOD OF CONFUSION. ONLY THE PARTICULAR, AND SOMETIMES PECULIAR, CIRCUMSTANCES OF EACH CASE CAN DETERMINE ITS EXISTENCE. THUS, IN INFRINGEMENT CASES, PRECEDENTS MUST BE EVALUATED IN THE LIGHT OF EACH PARTICULAR CASE.[13]

          IN DETERMINING SIMILARITY AND LIKELIHOOD OF CONFUSION, OUR JURISPRUDENCE HAS DEVELOPED TWO TESTS: THE DOMINANCY TEST AND THE HOLISTIC TEST. THE DOMINANCY TEST FOCUSES ON THE SIMILARITY OF THE PREVALENT FEATURES OF THE COMPETING TRADEMARKS THAT MIGHT CAUSE CONFUSION AND DECEPTION, THUS CONSTITUTING INFRINGEMENT. IF THE COMPETING TRADEMARK CONTAINS THE MAIN, ESSENTIAL, AND DOMINANT FEATURES OF ANOTHER, AND CONFUSION OR DECEPTION IS LIKELY TO RESULT, INFRINGEMENT OCCURS. EXACT DUPLICATION OR IMITATION IS NOT REQUIRED. THE QUESTION IS WHETHER THE USE OF THE MARKS INVOLVED IS LIKELY TO CAUSE CONFUSION OR MISTAKE IN THE MIND OF THE PUBLIC OR TO DECEIVE CONSUMERS.[14]

          IN CONTRAST, THE HOLISTIC TEST ENTAILS A CONSIDERATION OF THE ENTIRETY OF THE MARKS AS APPLIED TO THE PRODUCTS, INCLUDING THE LABELS AND PACKAGING, IN DETERMINING CONFUSING SIMILARITY.[15] THE DISCERNING EYE OF THE OBSERVER MUST FOCUS NOT ONLY ON THE PREDOMINANT WORDS BUT ALSO ON THE OTHER FEATURES APPEARING ON BOTH  MARKS IN ORDER THAT THE OBSERVER MAY DRAW HIS CONCLUSION WHETHER ONE IS CONFUSINGLY SIMILAR TO THE OTHER.[16]

          APPLYING EITHER THE DOMINANCY TEST OR THE HOLISTIC TEST, PETITIONER’S “SAN FRANCISCO COFFEE” TRADEMARK IS A CLEAR INFRINGEMENT OF RESPONDENT’S “SAN FRANCISCO COFFEE & ROASTERY, INC.” TRADE NAME. THE DESCRIPTIVE WORDS “SAN FRANCISCO COFFEE” ARE PRECISELY THE DOMINANT FEATURES OF RESPONDENT’S TRADE NAME. PETITIONER AND RESPONDENT ARE ENGAGED IN THE

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SAME BUSINESS OF SELLING COFFEE, WHETHER WHOLESALE OR RETAIL. THE LIKELIHOOD OF CONFUSION IS HIGHER IN CASES WHERE THE BUSINESS OF ONE CORPORATION IS THE SAME OR SUBSTANTIALLY THE SAME AS THAT OF ANOTHER CORPORATION. IN THIS CASE, THE CONSUMING PUBLIC WILL LIKELY BE CONFUSED AS TO THE SOURCE OF THE COFFEE BEING SOLD AT PETITIONER’S COFFEE SHOPS. PETITIONER’S ARGUMENT THAT “SAN FRANCISCO” IS JUST A PROPER NAME REFERRING TO THE FAMOUS CITY IN CALIFORNIA AND THAT “COFFEE” IS SIMPLY A GENERIC TERM, IS UNTENABLE. RESPONDENT HAS ACQUIRED AN EXCLUSIVE RIGHT TO THE USE OF THE TRADE NAME “SAN FRANCISCO COFFEE & ROASTERY, INC.” SINCE THE  REGISTRATION OF THE BUSINESS NAME WITH THE DTI IN 1995. THUS, RESPONDENT’S USE OF ITS TRADE NAME FROM THEN ON MUST BE FREE FROM ANY INFRINGEMENT BY SIMILARITY. OF COURSE, THIS DOES NOT MEAN THAT RESPONDENT HAS EXCLUSIVE USE OF THE GEOGRAPHIC WORD “SAN FRANCISCO” OR THE GENERIC WORD “COFFEE.” GEOGRAPHIC OR GENERIC WORDS ARE NOT, PER SE, SUBJECT TO EXCLUSIVE APPROPRIATION. IT IS ONLY THE COMBINATION OF THE WORDS “SAN FRANCISCO COFFEE,” WHICH IS RESPONDENT’S TRADE NAME IN ITS COFFEE BUSINESS, THAT IS PROTECTED AGAINST INFRINGEMENT ON MATTERS RELATED TO THE COFFEE BUSINESS TO AVOID CONFUSING OR DECEIVING THE PUBLIC.          IN PHILIPS EXPORT B.V. V. COURT OF APPEALS,[17] THIS COURT HELD THAT A CORPORATION HAS  AN EXCLUSIVE RIGHT TO THE USE OF ITS NAME. THE RIGHT PROCEEDS FROM THE THEORY THAT IT IS A FRAUD ON THE CORPORATION WHICH HAS ACQUIRED A RIGHT TO THAT NAME AND PERHAPS CARRIED ON ITS BUSINESS THEREUNDER, THAT ANOTHER SHOULD ATTEMPT TO USE THE SAME NAME, OR THE SAME NAME WITH A  SLIGHT VARIATION IN SUCH A WAY AS TO INDUCE PERSONS TO DEAL WITH IT IN THE BELIEF THAT THEY ARE DEALING WITH THE CORPORATION WHICH HAS GIVEN A REPUTATION TO THE NAME.[18]           THIS COURT IS NOT JUST A COURT OF LAW, BUT ALSO OF EQUITY. WE CANNOT  ALLOW PETITIONER TO PROFIT BY THE NAME AND REPUTATION SO FAR BUILT BY RESPONDENT WITHOUT RUNNING AFOUL OF THE BASIC DEMANDS OF FAIR PLAY. NOT ONLY THE LAW BUT EQUITY CONSIDERATIONS HOLD PETITIONER LIABLE FOR INFRINGEMENT OF RESPONDENT’S TRADE NAME.          THE COURT OF APPEALS WAS CORRECT IN SETTING ASIDE THE 22 OCTOBER 2003 DECISION OF THE OFFICE OF THE DIRECTOR GENERAL-INTELLECTUAL PROPERTY OFFICE AND IN REINSTATING THE 14 AUGUST 2002 DECISION OF THE BUREAU OF LEGAL AFFAIRS-INTELLECTUAL PROPERTY OFFICE.          WHEREFORE, WE DENY THE PETITION FOR REVIEW. WE AFFIRM THE 15 JUNE 2005 DECISION AND 1 SEPTEMBER 2005 RESOLUTION OF THE COURT OF APPEALS IN CA-G.R. SP NO. 80396.          COSTS AGAINST PETITIONER.          SO ORDERED. 

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Republic of the PhilippinesSupreme Court

Manila 

FIRST DIVISION  

PHILIPPINE AIRLINES, INC.,                         Petitioner,    

-  versus  -    NATIONAL LABOR RELATIONS COMMISSION and AIDA M. QUIJANO,                       Respondents.

  G.R. No.  123294 Present: CORONA, C.J.,     Chairperson,     VELASCO, JR.,LEONARDO-DE CASTRO,DEL CASTILLO, andPEREZ, JJ. Promulgated: October 20, 2010

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - -  - - - - - - - - - - - - - - - - - - - - - -xD E C I S I O N

  LEONARDO-DE CASTRO, J.:  This is a Petition for Certiorari under Rule 65 of the Rules of Court seeking to annul, reverse and set aside the following issuances of public respondent National Labor Relations Commission (NLRC):  (1) Decision[1] dated  September 29, 1995 in NLRC NCR CA 007860-94 (NLRC NCR 00-03-01859-91),  entitled  “Aida M. Quijano v. Philippine Airlines, Inc.,” which set aside the Decision[2] of Labor Arbiter Roberto I. Santos  and ordered petitioner Philippine  Airlines, Inc. (PAL) to pay private  respondent Aida M. Quijano (Quijano) her separation pay in accordance with petitioner’s “Special Retirement & Separation Program,” and (2) Resolution [3]dated November 14, 1995 denying petitioner’s Motion for Reconsideration thereof.

It bears stressing that pursuant to St. Martin Funeral Home v. National Labor Relations Commission[4] and In Re: Dismissal of Special Civil Actions in NLRC Cases,[5] all special civil actions arising out of any decision, final resolution or order of the NLRC must be filed with the Court of Appeals.  However, since both parties of this case had filed their respective Memoranda prior to the promulgation of our decision in St. Martin Funeral Home, this case was no longer referred to the Court of Appeals.

The following are the pertinent facts, as summarized by the NLRC:

Complainant Quijano rose from the ranks starting as accounting clerk in December 1967 until she became effective September 1, 1984, Manager-Agents Services Accounting Division (ASAD), vice Josefina Sioson.

ASAD, the specific unit in PAL charged with the processing, verification, reconciliation, and validation of all claims for commission filed by agents worldwide, is under the direct supervision and control of the Vice President-Comptroller, and within the scope of the audit program of the Vice President-Internal Audit & Control.

On May 5, 1989, an investigating committee chaired by Leslie W. Espino (hereinafter referred to as the Espino Committee) formally charged Quijano as Manager-ASAD in connection with the processing and payment of commission

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claims to Goldair Pty. Ltd. (Goldair for short) wherein PAL overpaid commissions to the latter amounting to several million Australian dollars during the period 1984-1987. Specifically, Quijano was charged as Manager-ASAD with the following:

“Failure on the job and gross negligence resulting in loss of trust and confidence in that you failed to:

  a.         Exercise the necessary monitoring, control and supervision over your Senior Accounts Analyst to ensure that the latter was performing the basic duties and responsibilities of her job in checking and verifying the correctness and validity of the commission claims from Goldair.

b.        Adopt and perform the necessary checks and verification procedures as demanded by your position in order to ensure that the commission claims of Goldair which you were approving for payment were correct and valid claims thus resulting in consistent substantial overpayments to Goldair over a period of more than three years.

c.         Require or otherwise cause a final reconciliation of the remaining balance due as commission claims to Goldair for a particular month such that a claim for a particular month was never liquidated in a final amount and thus contributing to consistent overpayments to Goldair.”

 The Senior Accounts Analyst referred to in the charge was Dora Jane Prado Curammeng who was included as a respondent. Curammeng was specifically assigned to handle and process commissions of agents in, among others, the Australia Region, and Goldair was among the travel agents whose production reports and commission claims were handled by her. Curammeng was accused of failing to verify the completeness of the documents supporting the claims; to trace and match each ticket in the production report submitted by Goldair with the IATA, BSP and CTO sales report; and to perform a complete verification of the net/net amounts claimed in the production reports against the approved marketing arrangements. However, Curammeng had already resigned and became a resident of Canada at the time of the investigation conducted by the Espino Committee.

 Pending further investigation, the Espino Committee placed Quijano under preventive suspension and at the same time required her to submit her answer to the charges. As directed, Quijano submitted her answer wherein, among others, she explained as follows:

 

“My staff processes production reports submitted by both passenger and cargo agents. In 1984, they were only seven (7) people (with one on loan to Financial Analysis Division) and yet they process commission claims of an average of PHP four billion annually. My colleagues who are responsible for processing and recording gross passenger and cargo sales have around 51 people. Just the ratio of my staff to accounting sales staff, which is one to seven, would indicate the heavy load our unit experience.

I wish to emphasize however, that the staff assigned under my division have been selected on the basis of their judgment competence considering the very nature of marketing arrangements

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with agents are strictly private and confidential. Under the circumstances I have just mentioned, my staff’s judgment and competence is heavily relied on particularly when random checking of commission claims for traffic documents and airway bills against sales reports is being performed by them. I also seek your appreciation of the work environment we are in and the intermittent conflicts we experience due to the pressure of prompt settlement of claims to agents and yet having the satisfaction that the processing procedures are adequate.

            x x x x

May I reiterate to the Committee that when my staff informed me of their findings of double claims on the production reports for the months of October and November 1987, I followed this up with a representative of Goldair. On June 1988, I received a handwritten note from the representative of Goldair signed by its General Manager Aleco Papazoglou, a xerox copy of it is hereto attached as Annex “A”. Mr. Papazoglou, in this note, guaranteed to me that he will undertake to collect any excessive payments on the agent fees from his agents and pay these to us afterwards.

  At this point, I would like to emphasize that ASAD, before known as “Confidential Staff” under the Office of the VP-Comptroller, became a unit since 1976. Due to the confidential nature of its functions, the accounting procedures were not written. The procedures being performed by the staff were mainly practices handed down from their predecessors. Further, the procedures were tailored to adopt to the market environment of the country which were based on the approved marketing arrangements. But of course, there were inherent internal controls.

  A final check whether accounting procedures being observed were appropriate in accordance with accounting standards, is the periodic examination of both our internal and external auditors.

  During all these 4-1/2 years I have been with ASAD, I did not receive any feedback that there were weaknesses or lapses in accounting controls and procedures being followed.

  In 1985, Cressop Mccormick & Paget made a study of the CMA’s. They conducted an interview of all key personnel including me who were involved in handling CMA’s. It was of course necessary for them to observe and evaluate the existing accounting procedures and controls. Their report, however, did not mention any adverse findings concerning my division.

  In 1986, Sycip, Gorres, Velayo & Co. were engaged to look into the CMA functional specifications and to propose the best method of allocating commission expenses to flown revenues. To be able for them to render a report, it is, of course, necessary for them to delve into the reports we receive and the records we maintain. It is safe to surmise that they “walked through” our accounting procedures. No mention, however, of weaknesses on our accounting procedures and controls was made in their report.

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  Again, during the early part of 1987, all the production reports from Australia for the period April to September 1986 were borrowed and audited by Internal Audit and control. We apprised the auditor then of the various procedures we observed in processing these production reports. We did not receive any adverse feedback about their audit. Our confidence that the AMA’s were properly enforced by Australian agents and that there were no irregularities committed were thus regained. We shifted our concentration to the other agents particularly those under Nett-Nett settlement arrangements and tried to recall any commission that should be disallowed.

  In the middle of 1987, a special team from the Commission on Audit conducted a fraud audit and again, interviewed my staff and I on our accounting procedures. Incentive commission figures by agent by country were also furnished to them. I wasn’t informed of any flaws in our accounting procedures and control nor existence of any fraud.

  My division underwent scrutiny of three (3) prestigious consulting firms and of our own internal audit. I relied heavily on the absence of any unfavorable findings on accounting procedures and controls from them since their studies were quite extensive and lengthy. It is quite surprising at times why I am now asked how I could have failed to observe that certain accounting procedures were not being followed by my staff.

            x x x x

Also, Internal Audit & Control made a regular audit in Australia in November, 1986 headed by no less than the Vice President-Internal Audit & Control. They did not discover any fraud nor report any questionable transaction on Passenger but on Cargo transaction only. If they, the auditors, did not find any discrepancy when their concentration is on Australia alone, how much more with us when our concentration is on the whole system? The production reports of Goldair was borrowed and assessed by the auditor before and after the regular audit.”

 The other members of the Espino Committee were Ricardo G. Paloma, then Senior Vice President-Strategic Planning & Corporate Services wrote a dissenting opinion to the Final Draft Majority Report in the following manner, to wit:

 “A new set of procedures was apparently installed by Romeo Ines and Josefina Sioson in April, 1984 (without any evident formal authorization by the Comptroller Dept.) upon receipt of Aleco Papazoglou’s letter that automatic payment be made upon presentation of his production reports in Manila Gold Air gained immunity against any possibility of cross of their production reports: it was simply impossible to cross check the production reports against sales reports are not yet in by the time the hand carried production reports arrive in ASAD.

  Upon assumption of office by Aida Quijano this new set of procedure was carried over. She was made to understand that these were the OFFICIAL PROCEDURES, contrary to the actual procedure which called for production reports being initially checked by PAL Melbourne during the 1981 to 1983 period. This initial check which had until them been handled by the Regional Office was combined with the secondary check and were all dumped on ASAD.

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  A mitigating factor in Quijano’s favor is that UNSEEN HANDS designed or allowed this new procedures to be put in place. Ines, who became the VP Internal Audit should have known the prescribed procedures (or at the very least the actual practice during the period 1981 to 1983 when he was the VP Comptroller) and yet, did not alert her. Unknowingly, Quijano allowed the by-pass and the automatic payment of 80% upon presentation of production reports because Sioson assured her that was the procedure previously followed. Trustingly, she became a participant in this mess.”

 It should be noted that the Romeo Ines mentioned in the dissenting opinion is the same Romeo R. Ines who was one of the members of the Espino Committee and who was later named a respondent in the second Goldair charge, together with Chairman Espino. Romeo R. Ines was the VP-Comptroller for the period 1981-1983 and VP-Internal Audit for the period 1984-1987. While Josefina Sioson, as earlier shown, was the Manager-ASAD during the period 1981-1983 until she was replaced by Quijano on September 1, 1984. Incidentally, as found by respondent’s witness Benigno Datoc, the Goldair fraud started in 1981 and continued until its discovery sometime in the latter part of 1987. And as of that year, Goldair had been PAL’s agent for about seventeen (17) years already.

 On July 2, 1990, another Administrative charge involving the same Goldair anomaly was filed, this time including Committee Chairman Leslie W. Espino and Committee Member Romeo R. Ines and several others, for “gross incompetence and inefficiency, negligence, imprudence, mismanagement, dereliction of duty, failure to observe and/or implement administrative and executive policies, and related acts or omissions.” Pending the result of investigation by another committee chaired by Judge Martin S. Ocampo, the PAL Board of Directors suspended respondents Leslie W. Espino, Executive Vice-President and Chief Operating Officer; Ramon C. Lozon, Senior Vice-President-Finance; Romeo R. Ines, Vice President-Internal Audit & Control; Josefina Sioson, Manager-Staff Pricing; except respondents VP-Comptroller Robin C. Dui and Manager-ASAD Aida Quijano who were already suspended by the Espino Committee, and respondent Juan Yoga, former Regional Vice President-Australia who has already retired.

 Meantime, PAL filed a civil case in Australia against Goldair seeking to recover AUD 11 million. Twice, Quijano went to Australia as witness for PAL. Thereafter, a settlement was reached whereby Goldair was to pay PAL a total of around AUD 7 million inclusive of court costs. A criminal case was nevertheless filed against Goldair’s owner, Alexandro Papazoglou, by the Fraud Squad Victorian Police. 

The Ocampo Committee having submitted its findings to the PAL Board of Directors, the latter, in a resolution dated January 18, 1991, considered respondents Leslie W. Espino, Ramon C. Lozon, Romeo R. Ines, Robin C. Dui, Josefina Sioson, and Aida M. Quijano, resigned from the service effective immediately, for loss of confidence and for acts inimical to the interest of the company.

The Board found as follows:

“This is the extended Resolution.

  The Goldair fraud has caused a total loss to PAL as of August 1990 in the amount of AUD 14.6 million (PHP 204 million). Goldair is a company that served then as the General Sales Agent of PAL in Australia against Goldair, a settlement was reached whereby Goldair was to pay PAL a total of around AUD 7 million inclusive of court

38

costs. This settlement is said to be the most practical and realistic under the circumstances. A criminal case was nevertheless filed against Goldair’s owner, Alexandro Papazoglou, by the Fraud Squad Victorian Police. Hearings are still going on.

  According to the evidence received and evaluated by the investigating committee, PAL lost the above huge sum of money to Goldair as a result of false, padded, erroneous or irregular claims for commissions submitted by Goldair and unwittingly paid by PAL. The Agents Services Accounting Division (ASAD), one of the divisions under the Comptroller Department, is the specific unit in the company charged with the processing, verification, and validation of all claims for commissions filed by the company’s agents worldwide (excluding the U.S. which is processed by the San Francisco Regional Office). Consequently, responsibility for the Goldair fraud has been attributed mainly to the failure of ASAD to properly process and validate Goldair’s commission claims prior to payment.

  Thus, the following lapses or irregularities were uncovered in the course of the investigations that have been conducted:

 1.                  No adequate effort was exerted to see to it that the supporting documents (photocopies of tickets submitted and attached to the production report were complete). Neither was a verification or comparison made between the tickets and the production report.

 2.                  The simple and basic step of verifying the names of the passengers and their ticket numbers against ticket numbers, even on a check basis, to see whether they were reported more than once was not accomplished. If done, double or multiple reporting of tickets could have been readily detected.

 3.                  Validation of the correctness of prorate values, by performing the proration, was not undertaken.

 4.                  No reconciliation was made of all the amounts due the agent for a particular month. Such reconciliation would have disclosed whether or not the account for a particular month could be closed.

 5.                  Production reports were not cross-checked against sales report or flight coupon registers.

 6.                  Superiors failed to adequately monitor the activities of their subordinates to ensure that the latter were performing their duties.

 7.                  The policy that cash vouchers could be approved only by duly authorized persons was in several cases violated.”

 Resolving the case of Quijano, the Board said:

  “The charge against Ms. Quijano is that:

           Quijano was the Manager-ASAD (Agents Services Accounting Division) in 1984-87, and responsible for the final scrutiny of agents’

39

Production Reports and final recommendation for payment of travel agents’ commissions.

  As Manager-ASAD from 1984 to 1987 (when the fraud was discovered), she failed to uncover or detect and report or grossly disregarded the fraud although the commissions vis-à-vis production were scandalously high.

  Ms. Quijano claims that she relied heavily on Ms. Curammeng’s judgment competence to perform her work, particularly the “completeness of the documents” check. She argues that if she were to do the completeness check herself, there would be no need for the analyst. This argument, however, wittingly or unwittingly, misconceives the nature of her job. Precisely, her basic role and duty as a manager was to make sure that the analysts in her division were performing the tasks assigned to them. But Ms. Quijano did not see to it that the completeness check was actually being performed by Ms. Curammeng. This lapse in control, contributed materially to the double, multiple and fictitious reporting of tickets, and double claims for commissions perpetrated by Goldair. Ms. Quijano was certainly not expected to personally do and perform the completeness check herself. But as manager, it was clearly incumbent upon her to see to it that this completeness check was being done by her subordinates competently and efficiently. Yet, Ms. Quijano even failed to adopt ways and means of keeping herself sufficiently informed of the activities of her staff members so as to prevent or at least discover at an early stage the fraud being perpetrated on a massive scale by Goldair against her company.

  Her incompetence at her job is patent.”

 Her motion for reconsideration having been denied by the Board in a Resolution dated February 19, 1991, Quijano filed on March 25, 1991 the instant case against PAL for illegal suspension and illegal dismissal.[6]

          The Labor Arbiter dismissed private respondent’s complaint in a Decision dated September 7, 1994, the dispositive portion of which reads:

           WHEREFORE, in conformity with the opinion above-expressed, judgment is hereby rendered dismissing the above-captioned case for lack of merit and, consequently, the respondent is absolved from any liability.[7]

          Undeterred, private respondent filed an appeal before the NLRC which rendered the assailed Decision dated September 29, 1995, the dispositive portion of which reads:

          WHEREFORE, in view of all the foregoing considerations, the decision appealed from should be, as it is hereby, VACATED and SET ASIDE and another one entered, directing the Philippine Airlines, Inc., thru its responsible officials, to pay Aida M. Quijano her separation pay in accordance with its “Special Retirement & Separation Program” dated February 15, 1988, plus ten percent (10%) of the total amount by way of attorney’s fee.[8]

Petitioner filed a Motion for Reconsideration but this was denied by the NLRC in its Resolution dated November 14, 1995, the dispositive portion of which reads:

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After due consideration of the Motion for Reconsideration filed by respondent-appellee on October 20, 1995, from the Decision of September 29, 1995, the Commission (Second Division) RESOLVED to deny the same for lack of merit.[9]

 Hence, this petition for certiorari.

 Both parties submitted their respective Memoranda[10] in late 1997, however, on September 11, 1998, petitioner filed a Motion for Suspension of Proceedings [11] based on Presidential Decree No. 902-A which reads, in part:

 That upon appointment of management committee, rehabilitation receiver, board or body, pursuant to this Decree, all actions for claims against corporations, partnerships or associations under management or receivership pending before any court, tribunal, board or body shall be suspended accordingly.[12] (Underscoring supplied.)

 The said motion referred to an Order[13] dated June 23, 1998 of the Securities and Exchange Commission (SEC) which appointed an Interim Rehabilitation Receiver for petitioner pursuant to Presidential Decree No. 902-A that was followed by the issuance of another Order[14] dated July 1, 1998 which commanded that “all claims against PAL are deemed suspended.”

 After hearing both parties on the question of whether or not the Court should render judgment during the state of suspension of claims, we ruled in the negative in a Resolution [15] dated September 4, 2000, the dispositive portion of which reads:

 IN VIEW THEREOF, the Motion for Suspension of Proceedings of petitioner is GRANTED.[16]

Private respondent filed a Motion for Reconsideration[17] on October 3, 2000 of the above Resolution but we denied the same in a Resolution[18] dated November 13, 2000.

Since then petitioner was required by this Court to submit periodic status reports on the rehabilitation proceedings, the last of which was dated October 22, 2007, [19] declaring that the petitioner’s request to exit from rehabilitation had been granted by the SEC via an Order[20] issued on September 28, 2007, the dispositive portion of which reads:

WHEREFORE, in the light of the foregoing, and considering PAL’s firm commitment to settle its outstanding obligations as well as the fact that its operations and its financial condition have been normalized and stabilized in conformity with the Amended and Restated Rehabilitation Plan exemplifying a successful corporate rehabilitation, the PAL’s request to exit from rehabilitation is hereby GRANTED.

The PRR is likewise directed to furnish all creditors and parties concerned with copies of this Order at the expense of the Petitioner and submit proof of service thereof to the Commission, within fifteen (15) days from date of receipt of this Order.[21]

Considering the foregoing and the fact that both parties have long submitted their respective Memoranda in the instant case, private respondent filed a Motion to Resume Proceedings and to Render Judgment[22] on December 11, 2007.  In compliance with this Court’s Resolution[23] dated January 21, 2008 requiring petitioner to comment on private respondent’s motion, petitioner filed a Comment/Manifestation[24] on February 28, 2008 which confirmed that “with the issuance of the Securities and Exchange Commission’s September 28, 2007 Order granting PAL’s request to exit from rehabilitation, there is no longer any legal impediment to the resumption of the instant proceedings.”

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In the instant petition, petitioner puts forward a singular argument, to wit:

ASSUMING ARGUENDO (WITHOUT ADMITTING) THAT THE EQUITABLE CONSIDERATIONS CITED BY THE NLRC DID EXIST, THE SAME CANNOT JUSTIFY THE AWARD OF SEPARATION PAY TO MRS. QUIJANO (despite the finding that she was legally suspended and thereafter legally dismissed) IN THE FACE OF OVERWHELMING EVIDENCE SUBMITTED BY PETITIONER WHICH CLEARLY SHOW THAT PHILIPPINE AIRLINES, INC. LOST SEVERAL MILLION AUSTRALIAN DOLLARS AS A RESULT OF THE FRAUD COMMITTED BY GOLDAIR AND THAT SAID FRAUD COULD ONLY HAVE BEEN MADE POSSIBLE BY MRS. QUIJANO’S PATENT MISMANAGEMENT AND GROSS INCOMPETENCE AS ASAD MANAGER IN FAILING TO DETECT THE IRREGULARITY. IN AWARDING SEPARATION PAY TO MRS. QUIJANO, THE NLRC COMMITTED A GRAVE ABUSE OF ITS DISCRETION AMOUNTING TO LACK OF JURISDICTION.[25]

We affirm the NLRC ruling with modification.

At the onset, it should be noted that the parties do not dispute the validity of private respondent’s dismissal from employment for loss of confidence and acts inimical to the interest of the employer.  The assailed September 29, 1995 Decision of the NLRC was emphatic in declaring that it was “not prepared to rule as illegal the preventive suspension and eventual dismissal from the service of [private respondent]”[26] and rightfully so because the last position that private respondent held, Manager-ASAD (Agents Services Accounting Division), undeniably qualifies as a position of trust and confidence.

Loss of confidence as a just cause for termination of employment is premised from the fact that an employee concerned holds a position of trust and confidence.  This situation holds where a person is entrusted with confidence on delicate matters, such as the custody, handling, or care and protection of the employer’s property.  But, in order to constitute a just cause for dismissal, the act complained of must be “work-related” such as would show the employee concerned to be unfit to continue working for the employer.[27]

The January 18, 1991 Resolution of the PAL Board of Directors, the relevant portions of which are discussed in the narration of the facts of this case as culled from the assailed September 29, 1995 NLRC Decision, clearly laid out the reasons why it considered private respondent along with her other co-employees in PAL resigned from the service effective immediately for loss of confidence and for acts inimical to the interest of the company.  In private respondent’s case, the Resolution underscored her acts of mismanagement and gross incompetence which made her fail to detect the irregularities in the Goldair account that resulted in huge financial losses for petitioner.  Admittedly, the said findings are not backed by proof beyond reasonable doubt but are, nevertheless, given credence since they have been adopted by both the labor arbiter and the NLRC and are supported by substantial evidence.  As we have consistently held, the degree of proof required in labor cases is not as stringent as in other types of cases.[28]

As a general rule, employers are allowed a wider latitude of discretion in terminating the employment of managerial personnel or those who, while not of similar rank, perform functions which by their nature require the employer’s full trust and confidence.  This must be distinguished from the case of ordinary rank and file employees, whose termination on the basis of these same grounds requires a higher proof of involvement in the events in question; mere uncorroborated assertions and accusations by the employer will not suffice.[29]

Having succinctly disposed of the issue of the validity of private respondent’s dismissal, we now delve into the true crux of this controversy which is the legality of the award of separation pay to private respondent despite having been lawfully terminated for a just cause.

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 Petitioner argues that, in light of the fact that a just cause forms the basis for her lawful termination from the job, private respondent is not entitled to separation pay.  Likewise, petitioner insists that even assuming that the equitable considerations cited by the NLRC did exist, the same cannot justify the award of separation pay. And, in awarding the same, the NLRC committed grave abuse of discretion amounting to lack of jurisdiction.

 We do not agree.

 Grave abuse of discretion is an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law or to act in contemplation of law as when the judgment rendered is not based on law and evidence but on caprice, whim and despotism.[30]  This Court holds that the NLRC did not gravely abuse its discretion in granting separation pay to private respondent as the same is not characterized by caprice or arbitrariness being rooted in established jurisprudence.

 The language of Article 279 of the Labor Code is pregnant with the implication that a legally dismissed employee is not entitled to separation pay, to wit:

 An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

 However, in exceptional cases, this Court has granted separation pay to a legally dismissed employee as an act of “social justice” or based on “equity.”  In both instances, it is required that the dismissal (1) was not for serious misconduct; and (2) does not reflect on the moral character of the employee[31] or would involve moral turpitude. This equitable and humanitarian principle was first discussed by the Court in the landmark case of Philippine Long Distance Telephone  Co. (PLDT) v. National Labor Relations Commission,[32] wherein it was held:

 Strictly speaking, however, it is not correct to say that there is no express justification for the grant of separation pay to lawfully dismissed employees other than the abstract consideration of equity. The reason is that our Constitution is replete with positive commands for the promotion of social justice, and particularly the protection of the rights of the workers. The enhancement of their welfare is one of the primary concerns of the present charter. In fact, instead of confining itself to the general commitment to the cause of labor in Article II on the Declaration of Principles of State Policies, the new Constitution contains a separate article devoted to the promotion of social justice and human rights with a separate sub-topic for labor. Article XIII expressly recognizes the vital role of labor, hand in hand with management, in the advancement of the national economy and the welfare of the people in general. The categorical mandates in the Constitution for the improvement of the lot of the workers are more than sufficient basis to justify the award of separation pay in proper cases even if the dismissal be for cause.

x x x x There should be no question that where it comes to such valid but not

iniquitous causes as failure to comply with work standards, the grant of separation pay to the dismissed employee may be both just and compassionate, particularly if he has worked for some time with the company. For example, a subordinate who has irreconcilable policy or personal differences with his employer may be validly dismissed for demonstrated loss of confidence, which is an allowable ground. A working mother who has to be frequently absent because she has also to take care of her child may also be removed because of her poor attendance, this being another authorized ground. It is not the employee's fault if he does not have the necessary aptitude for his work but on the other hand the company cannot be required to maintain him just the same at the expense of the efficiency of its operations. He too may be validly replaced. Under these and similar circumstances, however, the award

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to the employee of separation pay would be sustainable under the social justice policy even if the separation is for cause.

 But where the cause of the separation is more serious than mere inefficiency,

the generosity of the law must be more discerning. There is no doubt it is compassionate to give separation pay to a salesman if he is dismissed for his inability to fill his quota but surely he does not deserve such generosity if his offense is misappropriation of the receipts of his sales. This is no longer mere incompetence but clear dishonesty. A security guard found sleeping on the job is doubtless subject to dismissal but may be allowed separation pay since his conduct, while inept, is not depraved. But if he was in fact not really sleeping but sleeping with a prostitute during his tour of duty and in the company premises, the situation is changed completely. This is not only inefficiency but immorality and the grant of separation pay would be entirely unjustified.

 We hold that henceforth separation pay shall be allowed as a measure of

social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice.[33]

In Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. National Labor Relations Commission,[34] we clarified that the grant of separation pay may still be precluded even if the ground for the employee’s dismissal is not serious misconduct under Article 282(a) of the Labor Code but other just causes under the same article and/or other authorized causes provided for under the Labor Code.  However, the TMPCWA case still recognized the social justice exception prescribed inPhilippine Long Distance Telephone Company.  To quote the relevant portions of that decision:

Explicit in PLDT are two exceptions when the NLRC or the courts should not grant separation pay based on social justice¾serious misconduct (which is the first ground for dismissal under Art. 282) or acts that reflect on the moral character of the employee.  What is unclear is whether the ruling likewise precludes the grant of separation pay when the employee is validly terminated from work on grounds laid down in Art. 282 of the Labor Code other than serious misconduct. 

A recall of recent cases decided bearing on the issue reveals that when the termination is legally justified on any of the grounds under Art. 282, separation pay was not allowed. x x x.

             x x x x 

In all of the foregoing situations, the Court declined to grant termination pay because the causes for dismissal recognized under Art. 282 of the Labor Code were serious or grave in nature and attended by willful or wrongful intent or they reflected adversely on the moral character of the employees.  We therefore find that in addition to serious misconduct, in dismissals based on other grounds under Art. 282 like willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, and commission of a crime against the employer or his family, separation pay should not be conceded to the dismissed employee. 

In analogous causes for termination like inefficiency, drug use, and others, the NLRC or the courts may opt to grant separation pay anchored on social justice in consideration of the length of service of the employee, the amount

44

involved, whether the act is the first offense, the performance of the employee and the like, using the guideposts enunciated in PLDT on the propriety of the award of separation pay.[35] (Emphases supplied.)

 In other words, under the present jurisprudential framework, the grant of separation pay

as a matter of equity to a validly dismissed employee is not contingent on whether the ground for dismissal is expressly under Article 282(a) but whether the ground relied upon is akin to serious misconduct or involves willful or wrongful intent on the part of the employee.

 

It, thus, becomes pertinent to examine the ground relied upon for the dismissal of private respondent and to determine if the special circumstances described inPLDT are present in the case at bar.

Serious misconduct as a valid cause for the dismissal of an employee is defined simply as improper or wrong conduct.  It is a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment.  To be serious within the meaning and intendment of the law, the misconduct must be of such grave and aggravated character and not merely trivial or unimportant. However serious such misconduct, it must, nevertheless, be in connection with the employee’s work to constitute just cause for his separation.  The act complained of must be related to the performance of the employee’s duties such as would show him to be unfit to continue working for the employer.[36]  On the other hand, moral turpitude has been defined as “everything which is done contrary to justice, modesty, or good morals; an act of baseness, vileness or depravity in the private and social duties which a man owes his fellowmen, or to society in general, contrary to justice, honesty, modesty, or good morals.”[37]

In the case at bar, the transgressions imputed to private respondent have never been firmly established as deliberate and willful acts clearly directed at making petitioner lose millions of pesos.  At the very most, they can only be characterized as unintentional, albeit major, lapses in professional judgment.  Likewise, the same cannot be described as morally reprehensible actions.  Thus, private respondent may be granted separation pay on the ground of equity which this Court had defined as “justice outside law, being ethical rather than jural and belonging to the sphere of morals than of law.  It is grounded on the precepts of conscience and not on any sanction of positive law, for equity finds no room for application where there is law.”[38]   

A perusal of the assailed September 29, 1995 NLRC Decision would show that the following equitable considerations were relied upon by the NLRC to arrive at its assailed ruling, to wit:

a)                 The Goldair fraud was found to have started in 1981. Private respondent became the Manager-ASAD only on September 1, 1984. The former Manager-ASAD from 1981 to August 1984 was Josefina Sioson.[39]

  b)                ASAD is under the direct supervision and control of the Vice President-Comptroller and within the scope of the audit program of the Vice President-Internal Audit and Control. The VP-Comptroller for the period 1981 to 1983 and the VP-Internal Audit for the period 1984 to 1987 was Romeo Ines.[40]

  c)                 The accounting procedures and controls inherited by private respondent when she took over ASAD were subjected to the scrutiny of prestigious accounting firms like Cressop, McCormick & Paget in 1985, the Sycip, Gorres, Velayo & Co., Inc. in 1986, including a special team from the Commission on Audit in 1987 – all of which made no adverse findings concerning ASAD.[41]

 

d)                No less than the VP-Internal Audit made a regular audit in Australia in November 1986 and in the early part of 1987, by borrowing all production reports covering April

45

to September 1986, but found no irregularities nor made any adverse feedback against ASAD.[42]

  e)                 Private respondent was the first to discover the overpayment of commission claims to Goldair in 1984 in rate differences in net/net settlement which, after her intervention, did not recur. She was also the one who first discovered the fraud in double and fictitious commission claims and promptly took action when she withheld all provisional payments due Goldair.[43]

  f)                  Even after the Goldair anomaly was discovered, private respondent could have availed of PAL’s Special Retirement and Separation Program, but she stayed put and had gone twice to Australia, while under preventive suspension, to attend court proceedings as a witness for petitioner enabling the said company to recover and minimize its economic loss.[44]

  g)                 Private respondent has no derogatory record during the entire period of her employment with petitioner for more than two decades. She steadily rose from the ranks until she became the ASAD Manager.[45]

  h)                In the dissenting opinion of Ricardo Paloma, Vice Chairman of the Espino Committee and PAL Senior VP Strategic Planning and Corporate Service, to the Final Draft Majority Report, he observed that “a mitigating factor in [private respondent’s] favor is that UNSEEN HANDS designed or allowed this new procedures to be put in place. Ines, who became the VP Internal Audit should have known the prescribed procedures (or at the very least the actual practice during the period 1981 to 1983 when he was the VP Comptroller) and yet, did not alert her. Unknowingly, [private respondent] allowed the by-pass and the automatic payment of 80% upon presentation of production reports because Sioson assured her that was the procedure previously followed. Trusting, she became a participant in this mess.”[46]

  Considering the foregoing uncontroverted special circumstances, we rule that the NLRC did not commit grave abuse of discretion amounting to lack of jurisdiction in ordering petitioner to pay private respondent separation pay for equitable considerations.

However, we do not agree with the NLRC that private respondent’s separation pay should be awarded in accordance with PAL’s “Special Retirement & Separation Program” dated February 15, 1988 plus ten percent (10%) of the total amount by way of attorney’s fees.

At the risk of stating the obvious, private respondent was not separated from petitioner’s employ due to mandatory or optional retirement but, rather, by termination of employment for a just cause.  Thus, any retirement pay provided by PAL’s “Special Retirement & Separation Program” dated February 15, 1988 or, in the absence or legal inadequacy thereof, by Article 287 of the Labor Code[47] does not operate nor can be made to operate for the benefit of private respondent. Even private respondent’s assertion that, at the time of her lawful dismissal, she was already qualified for retirement does not aid her case because the fact remains that private respondent was already terminated for cause thereby rendering nugatory any entitlement to mandatory or optional retirement pay that she might have previously possessed.  

 Likewise, attorney’s fees are not proper in this case because the same can only be awarded when the employee is illegally dismissed in bad faith and is compelled to litigate or incur expenses to protect his rights by reason of the unjustified act of his employer.[48]  The aforementioned conditions do not obtain in this case.

 As to the matter of the proper amount of separation pay to be awarded to private respondent on the basis of equitable considerations, our pronouncement inYrasuegui v. Philippine Airlines, Inc.[49] is instructive, to wit:

 Here, We grant petitioner separation pay equivalent to one-half (1/2) month’s pay for every year of service. It should include regular allowances which he might have been receiving. We are not blind to the fact that he was not dismissed for any serious misconduct or to any act which would

46

reflect on his moral character. We also recognize that his employment with PAL lasted for more or less a decade.

          Private respondent’s circumstances are more or less identical to the above-cited case in the sense that, as previously discussed, her dismissal was neither for serious misconduct nor for an offense involving moral turpitude. Furthermore, her employment with petitioner spanned more than two decades unblemished with any derogatory record prior to the infractions at issue in the case at bar. 

WHEREFORE, the assailed NLRC Decision dated September 29, 1995 as well as the Resolution dated November 14, 1995 are AFFIRMED with theMODIFICATION that petitioner Philippine Airlines, Inc. pay private respondent Aida Quijano one-half (1/2) month salary for every year of service as separation pay on equitable grounds.   

  SO ORDERED.

Republic of the PhilippinesSupreme Court

Manila 

THIRD DIVISION  PLANTERS PRODUCTS, INC.,              G.R. No. 166006                             Petitioner,                                                                      Present:                                                                                                    YNARES-SANTIAGO, J.,

     Chairperson,                                                               AUSTRIA-MARTINEZ,

                -   versus   -                                       CHICO-NAZARIO,     NACHURA, and     REYES, JJ.

                                                                     Promulgated:FERTIPHIL CORPORATION,

Respondent.                   March 14, 2008 x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x 

D E C I S I O N  REYES, R.T., J.:            THE Regional Trial Courts (RTC) have the authority and jurisdiction to consider the constitutionality of statutes, executive orders, presidential decrees and other issuances.  The Constitution vests that power not only in the Supreme Court but in all Regional Trial Courts.

47

  The principle is relevant in this petition for review on certiorari of the Decision[1] of the Court of Appeals (CA) affirming with modification that of the RTC in Makati City,[2] finding petitioner Planters Products, Inc. (PPI) liable to private respondent Fertiphil Corporation (Fertiphil) for the levies it paid under Letter of Instruction (LOI) No. 1465. The Facts 

Petitioner PPI and private respondent Fertiphil are private corporations incorporated under Philippine laws.[3]  They are both engaged in the importation and distribution of fertilizers, pesticides and agricultural chemicals. 

On June 3, 1985, then President Ferdinand Marcos, exercising his legislative powers, issued LOI No. 1465 which provided, among others, for the imposition of a capital recovery component (CRC) on the domestic sale of all grades of fertilizers in the Philippines.[4]  The LOI provides: 

3.    The Administrator of the Fertilizer Pesticide Authority to include in its fertilizer pricing formula a capital contribution component of not less than   P 10 per bag.     This capital contribution shall be collected until adequate capital is raised to make PPI viable.  Such capital contribution shall be applied by FPA to all domestic sales of fertilizers in the Philippines.[5]  (Underscoring supplied)

  Pursuant to the LOI, Fertiphil paid P10 for every bag of fertilizer it sold in the domestic market to the Fertilizer and Pesticide Authority (FPA).  FPA then remitted the amount collected to the Far East Bank and Trust Company, the depositary bank of PPI.  Fertiphil paid P6,689,144 to FPA from July 8, 1985 to January 24, 1986.[6]

 After the 1986 Edsa Revolution, FPA voluntarily stopped the imposition of the P10 levy.  With

the return of democracy, Fertiphil demanded from PPI a refund of the amounts it paid under LOI No. 1465, but PPI refused to accede to the demand.[7]

 Fertiphil filed a complaint for collection and damages[8] against FPA and PPI with the RTC

in Makati.  It questioned the constitutionality of LOI No. 1465 for being unjust, unreasonable, oppressive, invalid and an unlawful imposition that amounted to a denial of due process of law.[9]  Fertiphil alleged that the LOI solely favored PPI, a privately owned corporation, which used the proceeds to maintain its monopoly of the fertilizer industry. 

In its Answer,[10] FPA, through the Solicitor General, countered that the issuance of LOI No. 1465 was a valid exercise of the police power of the State in ensuring the stability of the fertilizer industry in the country.  It also averred that Fertiphil did not sustain any damage from the LOI because the burden imposed by the levy fell on the ultimate consumer, not the seller. 

RTC Disposition           On November 20, 1991, the RTC rendered judgment in favor of Fertiphil, disposing as follows: 

WHEREFORE, in view of the foregoing, the Court hereby renders judgment in favor of the plaintiff and against the defendant Planters Product, Inc., ordering the latter to pay the former:

 1)    the sum of P6,698,144.00 with interest at 12% from the time of judicial demand;

2)    the sum of P100,000 as attorney’s fees;3)    the cost of suit. SO ORDERED.[11]

 

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           Ruling that the imposition of the P10 CRC was an exercise of the State’s inherent power of taxation, the RTC invalidated the levy for violating the basic principle that taxes can only be levied for public purpose, viz.: 

It is apparent that the imposition of P10 per fertilizer bag sold in the country by LOI 1465 is purportedly in the exercise of the power of taxation.  It is a settled principle that the power of taxation by the state is plenary.  Comprehensive and supreme, the principal check upon its abuse resting in the responsibility of the members of the legislature to their constituents.  However, there are two kinds of limitations on the power of taxation: the inherent limitations and the constitutional limitations.             One of the inherent limitations is that a tax may be levied only for public purposes: 

            The power to tax can be resorted to only for a constitutionally valid public purpose.  By the same token, taxes may not be levied for purely private purposes, for building up of private fortunes, or for the redress of private wrongs.  They cannot be levied for the improvement of private property, or for the benefit, and promotion of private enterprises, except where the aid is incident to the public benefit.  It is well-settled principle of constitutional law that no general tax can be levied except for the purpose of raising money which is to be expended for public use.  Funds cannot be exacted under the guise of taxation to promote a purpose that is not of public interest.  Without such limitation, the power to tax could be exercised or employed as an authority to destroy the economy of the people.  A tax, however, is not held void on the ground of want of public interest unless the want of such interest is clear.  (71 Am. Jur. pp. 371-372) 

            In the case at bar, the plaintiff paid the amount of P6,698,144.00 to the Fertilizer and Pesticide Authority pursuant to the P10 per bag of fertilizer sold imposition under LOI 1465 which, in turn, remitted the amount to the defendant Planters Products, Inc. thru the latter’s depository bank, Far East Bank and Trust Co.  Thus, by virtue of LOI 1465 the plaintiff, Fertiphil Corporation, which is a private domestic corporation, became poorer by the amount of P6,698,144.00 and the defendant, Planters Product, Inc., another private domestic corporation, became richer by the amount of P6,698,144.00.             Tested by the standards of constitutionality as set forth in the afore-quoted jurisprudence, it is quite evident that LOI 1465 insofar as it imposes the amount of P10 per fertilizer bag sold in the country and orders that the said amount should go to the defendant Planters Product, Inc. is unlawful because it violates the mandate that a tax can be levied only for a public purpose and not to benefit, aid and promote a private enterprise such as Planters Product, Inc.[12]

           PPI moved for reconsideration but its motion was denied.[13]  PPI then filed a notice of appeal with the RTC but it failed to pay the requisite appeal docket fee. In a separate but related proceeding, this Court[14] allowed the appeal of PPI and remanded the case to the CA for proper disposition. 

CA Decision           On November 28, 2003, the CA handed down its decision affirming with modification that of the RTC, with the following fallo:

49

 IN VIEW OF ALL THE FOREGOING, the decision appealed from is

hereby AFFIRMED, subject to the MODIFICATION that the award of attorney’s fees is herebyDELETED.[15]

           In affirming the RTC decision, the CA ruled that the lis mota of the complaint for collection was the constitutionality of LOI No. 1465, thus: 

            The question then is whether it was proper for the trial court to exercise its power to judicially determine the constitutionality of the subject statute in the instant case.             As a rule, where the controversy can be settled on other grounds, the courts will not resolve the constitutionality of a law (Lim v. Pacquing, 240 SCRA 649 [1995]).  The policy of the courts is to avoid ruling on constitutional questions and to presume that the acts of political departments are valid, absent a clear and unmistakable showing to the contrary.             However, the courts are not precluded from exercising such power when the following requisites are obtaining in a controversy before it:  First, there must be before the court an actual case calling for the exercise of judicial review.  Second, the question must be ripe for adjudication.  Third, the person challenging the validity of the act must have standing to challenge.  Fourth, the question of constitutionality must have been raised at the earliest opportunity; and lastly, the issue of constitutionality must be the very lis mota of the case (Integrated Bar of the Philippines v. Zamora, 338 SCRA 81 [2000]).

             Indisputably, the present case was primarily instituted for collection and damages.  However, a perusal of the complaint also reveals that the instant action is founded on the claim that the levy imposed was an unlawful and unconstitutional special assessment.  Consequently, the requisite that the constitutionality of the law in question be the very lis mota of the case is present, making it proper for the trial court to rule on the constitutionality of LOI 1465.[16]

           The CA held that even on the assumption that LOI No. 1465 was issued under the police power of the state, it is still unconstitutional because it did not promote public welfare.  The CA explained: 

In declaring LOI 1465 unconstitutional, the trial court held that the levy imposed under the said law was an invalid exercise of the State’s power of taxation inasmuch as it violated the inherent and constitutional prescription that taxes be levied only for public purposes.     It reasoned out that the amount collected under the levy was remitted to the depository bank of   PPI , which the latter used to advance its private interest.             On the other hand, appellant submits that the subject statute’s passage was a valid exercise of police power.  In addition, it disputes the court a quo’s findings arguing that the collections under LOI 1465 was for the benefit of Planters Foundation, Incorporated (PFI), a foundation created by law to hold in trust for millions of farmers, the stock ownership of PPI.             Of the three fundamental powers of the State, the exercise of police power has been characterized as the most essential, insistent and the least limitable of powers, extending as it does to all the great public needs.  It may be exercised as

50

long as the activity or the property sought to be regulated has some relevance to public welfare (Constitutional Law, by Isagani A. Cruz, p. 38, 1995 Edition).             Vast as the power is, however, it must be exercised within the limits set by the Constitution, which requires the concurrence of a lawful subject and a lawful method.  Thus, our courts have laid down the test to determine the validity of a police measure as follows: (1) the interests of the public generally, as distinguished from those of a particular class, requires its exercise; and (2) the means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals (National Development Company v. Philippine Veterans Bank, 192 SCRA 257 [1990]).             It is upon applying this established tests that We sustain the trial court’s holding LOI 1465 unconstitutional.  To be sure, ensuring the continued supply and distribution of fertilizer in the country is an undertaking imbued with public interest.     However, the method by which LOI 1465 sought to achieve this is by no means a measure that will promote the public welfare.     The government’s commitment to support the successful rehabilitation and continued viability of PPI, a private corporation, is an unmistakable attempt to mask the subject statute’s impartiality.   There is no way to treat the self-interest of a favored entity,   like PPI, as identical with the general interest of the country’s farmers or even the Filipino people in general.     Well to stress, substantive due process exacts fairness and equal protection disallows distinction where none is needed.  When a statute’s public purpose is spoiled by private interest, the use of police power becomes a travesty which must be struck down for being an arbitrary exercise of government power.  To rule in favor of appellant would contravene the general principle that revenues derived from taxes cannot be used for purely private purposes or for the exclusive benefit of private individuals.[17]

           The CA did not accept PPI’s claim that the levy imposed under LOI No. 1465 was for the benefit of Planters Foundation, Inc., a foundation created to hold in trust the stock ownership of PPI.  The CA stated: 

            Appellant next claims that the collections under LOI 1465 was for the benefit of Planters Foundation, Incorporated (PFI), a foundation created by law to hold in trust for millions of farmers, the stock ownership of PFI on the strength of Letter of Undertaking (LOU) issued by then Prime Minister Cesar Virata on April 18, 1985 and affirmed by the Secretary of Justice in an Opinion dated October 12, 1987, to wit: 

            “2. Upon the effective date of this Letter of Undertaking, the Republic shall cause FPA to include in its fertilizer pricing formula a capital recovery component, the proceeds of which will be used initially for the purpose of funding the unpaid portion of the outstanding capital stock of Planters presently held in trust by Planters Foundation, Inc. (Planters Foundation), which unpaid capital is estimated at approximately P206 million (subject to validation by Planters and Planters Foundation) (such unpaid portion of the outstanding capital stock of Planters being hereafter referred to as the ‘Unpaid Capital’), and subsequently for such capital increases as may be required for the continuing viability of Planters.             The capital recovery component shall be in the minimum amount of P10 per bag, which will be added to the price of all domestic sales of fertilizer in the Philippines by any importer and/or fertilizer mother company. In this connection, the Republic hereby

51

acknowledges that the advances by Planters to Planters Foundation which were applied to the payment of the Planters shares now held in trust by Planters Foundation, have been assigned to, among others, the Creditors.  Accordingly, the Republic, through FPA, hereby agrees to deposit the proceeds of the capital recovery component in the special trust account designated in the notice dated April 2, 1985, addressed by counsel for the Creditors to Planters Foundation.  Such proceeds shall be deposited by FPA on or before the 15 th day of each month.              The capital recovery component shall continue to be charged and collected until payment in full of (a) the Unpaid Capital and/or (b) any shortfall in the payment of the Subsidy Receivables, (c) any carrying cost accruing from the date hereof on the amounts which may be outstanding from time to time of the Unpaid Capital and/or the Subsidy Receivables and (d) the capital increases contemplated in paragraph 2 hereof.  For the purpose of the foregoing clause (c), the ‘carrying cost’ shall be at such rate as will represent the full and reasonable cost to Planters of servicing its debts, taking into account both its peso and foreign currency-denominated obligations.” (Records, pp. 42-43) 

            Appellant’s proposition is open to question, to say the least.  The LOU issued by then Prime Minister Virata taken together with the Justice Secretary’s Opinion does not preponderantly demonstrate that the collections made were held in trust in favor of millions of farmers.  Unfortunately for appellant, in the absence of sufficient evidence to establish its claims, this Court is constrained to rely on what is explicitly provided in LOI 1465 – that one of the primary aims in imposing the levy is to support the successful rehabilitation and continued viability of PPI.[18]

 PPI moved for reconsideration but its motion was denied.[19]  It then filed the present petition

with this Court. 

Issues           Petitioner PPI raises four issues for Our consideration, viz.: 

ITHE CONSTITUTIONALITY OF LOI 1465 CANNOT BE COLLATERALLY ATTACKED AND BE DECREED VIA A DEFAULT JUDGMENT IN A CASE FILED FOR COLLECTION AND DAMAGES WHERE THE ISSUE OF CONSTITUTIONALITY IS NOT THE VERY LIS MOTA OF THE CASE.  NEITHER CAN LOI 1465 BE CHALLENGED BY ANY PERSON OR ENTITY WHICH   HAS   NO STANDING TO DO SO.

 II

LOI 1465, BEING A LAW IMPLEMENTED FOR THE PURPOSE OF ASSURING THE FERTILIZER SUPPLY AND DISTRIBUTION IN THE COUNTRY, AND FOR BENEFITING A FOUNDATION CREATED BY LAW TO HOLD IN TRUST FOR MILLIONS OF FARMERS THEIR STOCK OWNERSHIP IN PPI CONSTITUTES A VALID LEGISLATION PURSUANT TO THE EXERCISE OF TAXATION   AND   POLICE POWER FOR PUBLIC PURPOSES .

 III

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THE AMOUNT COLLECTED UNDER THE CAPITAL RECOVERY COMPONENT WAS REMITTED TO THE GOVERNMENT,   AND   BECAME GOVERNMENT FUNDS PURSUANT TO AN EFFECTIVE   AND   VALIDLY ENACTED LAW WHICH IMPOSED DUTIES   AND   CONFERRED RIGHTS BY VIRTUE OF THE PRINCIPLE OF “OPERATIVE   FACT”  PRIOR TO ANY DECLARATION OF UNCONSTITUTIONALITY OF LOI 1465. 

IVTHE PRINCIPLE OF UNJUST VEXATION (SHOULD BE ENRICHMENT) FINDS NO APPLICATION IN THE INSTANT CASE.[20]  (Underscoring supplied)

 Our Ruling

           We shall first tackle the procedural issues of locus standi and the jurisdiction of the RTC to resolve constitutional issues. Fertiphil has locus standi because it suffered direct injury; doctrine of standing is a mere procedural technicality which may be waived. 

PPI argues that Fertiphil has no locus standi to question the constitutionality of LOI No. 1465 because it does not have a “personal and substantial interest in the case or will sustain direct injury as a result of its enforcement.”[21]  It asserts that Fertiphil did not suffer any damage from the CRC imposition because “incidence of the levy fell on the ultimate consumer or the farmers themselves, not on the seller fertilizer company.”[22]

 We cannot agree.  The doctrine of locus standi or the right of appearance in a court of justice

has been adequately discussed by this Court in a catena of cases. Succinctly put, the doctrine requires a litigant to have a material interest in the outcome of a case.  In private suits, locus standi requires a litigant to be a “real party in interest,” which is defined as “the  party who stands to be benefited or injured by the judgment in the suit or the party entitled to the avails of the suit.”[23]

 In public suits, this Court recognizes the difficulty of applying the doctrine especially

when plaintiff asserts a public right on behalf of the general public because of conflicting public policy issues. [24] On one end, there is the right of the ordinary citizen to petition the courts to be freed from unlawful government intrusion and illegal official action.  At the other end, there is the public policy precluding excessive judicial interference in official acts, which may unnecessarily hinder the delivery of basic public services. 

In this jurisdiction, We have adopted the “direct injury test” to determine locus standi in public suits.  In People v. Vera,[25] it was held that a person who impugns the validity of a statute must have “a personal and substantial interest in the case such that he has sustained, or will sustain direct injury as a result.”  The “direct injury test” in public suits is similar to the “real party in interest” rule for private suits under Section 2, Rule 3 of the 1997 Rules of Civil Procedure.[26]

 Recognizing that a strict application of the “direct injury” test may hamper public interest, this

Court relaxed the requirement in cases of “transcendental importance” or with “far reaching implications.”  Being a mere procedural technicality, it has also been held that locus standi may be waived in the public interest.[27]

     Whether or not the complaint for collection is characterized as a private or public suit, Fertiphil has locus standi to file it.  Fertiphil suffered a direct injury from the enforcement of LOI No. 1465.  It was required, and it did pay, the P10 levy imposed for every bag of fertilizer sold on the domestic market.  It may be true that Fertiphil has passed some or all of the levy to the ultimate consumer, but that does not disqualify it from attacking the constitutionality of the LOI or from

53

seeking a refund.  As seller, it bore the ultimate burden of paying the levy.  It faced the possibility of severe sanctions for failure to pay the levy.  The fact of payment is sufficient injury to Fertiphil. 

Moreover, Fertiphil suffered harm from the enforcement of the LOI because it was compelled to factor in its product the levy.  The levy certainly rendered the fertilizer products of Fertiphil and other domestic sellers much more expensive.  The harm to their business consists not only in fewer clients because of the increased price, but also in adopting alternative corporate strategies to meet the demands of LOI No. 1465.  Fertiphil and other fertilizer sellers may have shouldered all or part of the levy just to be competitive in the market.  The harm occasioned on the business of Fertiphil is sufficient injury for purposes of locus standi. 

Even assuming arguendo that there is no direct injury, We find that the liberal policy consistently adopted by this Court on locus standi must apply.  The issues raised by Fertiphil are of paramount public importance.  It involves not only the constitutionality of a tax law but, more importantly, the use of taxes for public purpose. Former President Marcos issued LOI No. 1465 with the intention of rehabilitating an ailing private company.  This is clear from the text of the LOI.  PPI is expressly named in the LOI as the direct beneficiary of the levy.  Worse, the levy was made dependent and conditional upon PPI becoming financially viable.  The LOI provided that “the capital contribution shall be collected until adequate capital is raised to make PPI viable.”           The constitutionality of the levy is already in doubt on a plain reading of the statute.  It is Our constitutional duty to squarely resolve the issue as the final arbiter of all justiciable controversies.  The doctrine of standing, being a mere procedural technicality, should be waived, if at all, to adequately thresh out an important constitutional issue. RTC may resolve constitutional issues; the constitutional issue was adequately raised in the complaint; it is the lis mota of the case. 

PPI insists that the RTC and the CA erred in ruling on the constitutionality of the LOI.  It asserts that the constitutionality of the LOI cannot be collaterally attacked in a complaint for collection.[28]  Alternatively, the resolution of the constitutional issue is not necessary for a determination of the complaint for collection.[29]

 Fertiphil counters that the constitutionality of the LOI was adequately pleaded in its

complaint.  It claims that the constitutionality of LOI No. 1465 is the very lis mota of the case because the trial court cannot determine its claim without resolving the issue.[30]

 It is settled that the RTC has jurisdiction to resolve the constitutionality of a statute,

presidential decree or an executive order.  This is clear from Section 5, Article VIII of the 1987 Constitution, which provides:   SECTION 5.  The Supreme Court shall have the following powers:

 x x x x

 (2)        Review, revise, reverse, modify, or affirm on appeal or   certiorari , as

the law or the Rules of Court may provide, final judgments and orders of lower courts in: 

(a)        All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question. (Underscoring supplied)

 

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In Mirasol v. Court of Appeals,[31] this Court recognized the power of the RTC to resolve constitutional issues, thus: 

On the first issue.  It is settled that Regional Trial Courts have the authority and jurisdiction to consider the constitutionality of a statute, presidential decree, or executive order.  The Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation not only in this Court, but in all Regional Trial Courts.[32]

 In the recent case of Equi-Asia Placement, Inc. v. Department of Foreign Affairs,[33] this Court

reiterated: 

There is no denying that regular courts have jurisdiction over cases involving the validity or constitutionality of a rule or regulation issued by administrative agencies.  Such jurisdiction, however, is not limited to the Court of Appeals or to this Court alone for even the regional trial courts can take cognizance of actions assailing a specific rule or set of rules promulgated by administrative bodies.  Indeed, the Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts, including the regional trial courts.[34]

 Judicial review of official acts on the ground of unconstitutionality may be sought or availed

of through any of the actions cognizable by courts of justice, not necessarily in a suit for declaratory relief.  Such review may be had in criminal actions, as in People v. Ferrer[35] involving the constitutionality of the now defunct Anti-Subversion law, or in ordinary actions, as in Krivenko v. Register of Deeds[36] involving the constitutionality of laws prohibiting aliens from acquiring public lands. The constitutional issue, however, (a) must be properly raised and presented in the case, and  (b) its resolution is necessary to a determination of the case, i.e., the issue of constitutionality must be the very lis mota presented.[37]

 Contrary to PPI’s claim, the constitutionality of LOI No. 1465 was properly and adequately

raised in the complaint for collection filed with the RTC.  The pertinent portions of the complaint allege: 

6.  The CRC of P10 per bag levied under LOI 1465 on domestic sales of all grades of fertilizer in the Philippines, is unlawful, unjust, uncalled for, unreasonable, inequitable and oppressive because:

 x x x x

 (c)  It favors only one private domestic corporation, i.e.,

defendant PPPI, and imposed at the expense and disadvantage of the other fertilizer importers/distributors who were themselves in tight business situation and were then exerting all efforts and maximizing management and marketing skills to remain viable;

 x x x x

 (e)  It was a glaring example of crony capitalism, a forced

program through which the PPI, having been presumptuously masqueraded as “the” fertilizer industry itself, was the sole and anointed beneficiary;

 

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7.  The CRC was an unlawful; and unconstitutional special assessment and its imposition is tantamount to illegal exaction amounting to a denial of due process since the persons of entities which had to bear the burden of paying the   CRC   derived no benefit therefrom; that on the contrary it was used by PPI in trying to regain its former despicable monopoly of the fertilizer industry to the detriment of other distributors and importers.[38]  (Underscoring supplied)

 The constitutionality of LOI No. 1465 is also the very lis mota of the complaint for

collection.  Fertiphil filed the complaint to compel PPI to refund the levies paid under the statute on the ground that the law imposing the levy is unconstitutional.  The thesis is that an unconstitutional law is void.  It has no legal effect.  Being void, Fertiphil had no legal obligation to pay the levy.  Necessarily, all levies duly paid pursuant to an unconstitutional law should be refunded under the civil code principle against unjust enrichment.  The refund is a mere consequence of the law being declared unconstitutional.  The RTC surely cannot order PPI to refund Fertiphil if it does not declare the LOI unconstitutional. It is the unconstitutionality of the LOI which triggers the refund.  The issue of constitutionality is the very lis mota of the complaint with the RTC. The P10 levy under LOI No. 1465 is an exercise of the power of taxation.           At any rate, the Court holds that the RTC and the CA did not err in ruling against the constitutionality of the LOI. 

PPI insists that LOI No. 1465 is a valid exercise either of the police power or the power of taxation.  It claims that the LOI was implemented for the purpose of assuring the fertilizer supply and distribution in the country and for benefiting a foundation created by law to hold in trust for millions of farmers their stock ownership in PPI. 

Fertiphil counters that the LOI is unconstitutional because it was enacted to give benefit to a private company.  The levy was imposed to pay the corporate debt of PPI.  Fertiphil also argues that, even if the LOI is enacted under the police power, it is still unconstitutional because it did not promote the general welfare of the people or public interest. 

Police power and the power of taxation are inherent powers of the State.  These powers are distinct and have different tests for validity.  Police power is the power of the State to enact legislation that may interfere with personal liberty or property in order to promote the general welfare,[39] while the power of taxation is the power to levy taxes to be used for public purpose.  The main purpose of police power is the regulation of a behavior or conduct, while taxation is revenue generation. The “lawful subjects” and “lawful means” tests are used to determine the validity of a law enacted under the police power.[40]  The power of taxation, on the other hand, is circumscribed by inherent and constitutional limitations. 

We agree with the RTC that the imposition of the levy was an exercise by the State of its taxation power.  While it is true that the power of taxation can be used as an implement of police power,[41] the primary purpose of the levy is revenue generation.  If the purpose is primarily revenue, or if revenue is, at least, one of the real and substantial purposes, then the exaction is properly called a tax.[42]

 In Philippine Airlines, Inc. v. Edu,[43] it was held that the imposition of a vehicle registration

fee is not an exercise by the State of its police power, but of its taxation power, thus: 

It is clear from the provisions of Section 73 of Commonwealth Act 123 and Section 61 of the Land Transportation and Traffic Code that the legislative intent and purpose behind the law requiring owners of vehicles to pay for their registration is mainly to raise funds for the construction and maintenance of highways and to a

56

much lesser degree, pay for the operating expenses of the administering agency. x x x Fees may be properly regarded as taxes even though they also serve as an instrument of regulation.

 Taxation may be made the implement of the state's police power (Lutz v.

Araneta, 98 Phil. 148).  If the purpose is primarily revenue, or if revenue is, at least, one of the real and substantial purposes, then the exaction is properly called a tax. Such is the case of motor vehicle registration fees.  The same provision appears as Section 59(b) in the Land Transportation Code.  It is patent therefrom that the legislators had in mind a regulatory tax as the law refers to the imposition on the registration, operation or ownership of a motor vehicle as a “tax or fee.”  x x x Simply put, if the exaction under Rep. Act 4136 were merely a regulatory fee, the imposition in Rep. Act 5448 need not be an “additional” tax.  Rep. Act 4136 also speaks of other “fees” such as the special permit fees for certain types of motor vehicles (Sec. 10) and additional fees for change of registration (Sec. 11).  These are not to be understood as taxes because such fees are very minimal to be revenue-raising.  Thus, they are not mentioned by Sec. 59(b) of the Code as taxes like the motor vehicle registration fee and chauffeurs’ license fee.  Such fees are to go into the expenditures of the Land Transportation Commission as provided for in the last proviso of Sec. 61.[44]  (Underscoring supplied)

 The P10 levy under LOI No. 1465 is too excessive to serve a mere regulatory purpose.  The

levy, no doubt, was a big burden on the seller or the ultimate consumer.  It increased the price of a bag of fertilizer by as much as five percent.[45]  A plain reading of the LOI also supports the conclusion that the levy was for revenue generation.  The LOI expressly provided that the levy was imposed “until adequate capital is raised to make PPI viable.” Taxes are exacted only for a public purpose. The P10 levy is unconstitutional because it was not for a public purpose. The levy was imposed to give undue benefit to PPI. 

An inherent limitation on the power of taxation is public purpose.  Taxes are exacted only for a public purpose.  They cannot be used for purely private purposes or for the exclusive benefit of private persons.[46]  The reason for this is simple.  The power to tax exists for the general welfare; hence, implicit in its power is the limitation that it should be used only for a public purpose.   It would be a robbery for the State to tax its citizens and use the funds generated for a private purpose.  As an old United States case bluntly put it: “To lay with one hand, the power of the government on the property of the citizen, and with the other to bestow it upon favored individuals to aid private enterprises and build up private fortunes, is nonetheless a robbery because it is done under the forms of law and is called taxation.”[47]

 The term “public purpose” is not defined.  It is an elastic concept that can be hammered to fit

modern standards.  Jurisprudence states that “public purpose” should be given a broad interpretation.  It does not only pertain to those purposes which are traditionally viewed as essentially government functions, such as building roads and delivery of basic services, but also includes those purposes designed to promote social justice.  Thus, public money may now be used for the relocation of illegal settlers, low-cost housing and urban or agrarian reform. 

While the categories of what may constitute a public purpose are continually expanding in light of the expansion of government functions, the inherent requirement that taxes can only be exacted for a public purpose still stands.  Public purpose is the heart of a tax law.  When a tax law is only a mask to exact funds from the public when its true intent is to give undue benefit and advantage to a private enterprise, that law will not satisfy the requirement of “public purpose.” 

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The purpose of a law is evident from its text or inferable from other secondary sources.  Here, We agree with the RTC and that CA that the levy imposed under LOI No. 1465 was not for a public purpose. 

First, the LOI expressly provided that the levy be imposed to benefit PPI, a private company.  The purpose is explicit from Clause 3 of the law, thus: 

3.    The Administrator of the Fertilizer Pesticide Authority to include in its fertilizer pricing formula a capital contribution component of not less than   P 10 per bag.     This capital contribution shall be collected until adequate capital is raised to make PPI viable.  Such capital contribution shall be applied by FPA to all domestic sales of fertilizers in the Philippines.[48]  (Underscoring supplied)

   It is a basic rule of statutory construction that the text of a statute should be given a literal meaning.  In this case, the text of the LOI is plain that the levy was imposed in order to raise capital for PPI.  The framers of the LOI did not even hide the insidious purpose of the law.  They were cavalier enough to name PPI as the ultimate beneficiary of the taxes levied under the LOI.  We find it utterly repulsive that a tax law would expressly name a private company as the ultimate beneficiary of the taxes to be levied from the public.  This is a clear case of crony capitalism.  Second, the LOI provides that the imposition of the P10 levy was conditional and dependent upon PPI becoming financially “viable.” This suggests that the levy was actually imposed to benefit PPI.  The LOI notably does not fix a maximum amount when PPI is deemed financially “viable.”  Worse, the liability of Fertiphil and other domestic sellers of fertilizer to pay the levy is made indefinite.  They are required to continuously pay the levy until adequate capital is raised for PPI. 

Third, the RTC and the CA held that the levies paid under the LOI were directly remitted and deposited by FPA to Far East Bank and Trust Company, the depositary bank of PPI.[49]  This proves that PPI benefited from the LOI.  It is also proves that the main purpose of the law was to give undue benefit and advantage to PPI. 

Fourth, the levy was used to pay the corporate debts of PPI.  A reading of the Letter of Understanding[50] dated May 18, 1985 signed by then Prime Minister Cesar Virata reveals that PPI was in deep financial problem because of its huge corporate debts.  There were pending petitions for rehabilitation against PPI before the Securities and Exchange Commission.  The government guaranteed payment of PPI’s debts to its foreign creditors.  To fund the payment, President Marcos issued LOI No. 1465.  The pertinent portions of the letter of understanding read: 

Republic of the PhilippinesOffice of the Prime Minister

Manila 

LETTER OF UNDERTAKING 

May 18, 1985 TO: THE BANKING AND FINANCIAL INSTITUTIONS        LISTED IN ANNEX A HERETO WHICH ARE        CREDITORS (COLLECTIVELY, THE “CREDITORS”)        OF PLANTERS PRODUCTS, INC. (“PLANTERS”) Gentlemen:             This has reference to Planters which is the principal importer and distributor of fertilizer, pesticides and agricultural chemicals in the Philippines.  As regards Planters, the Philippine Government confirms its awareness of the following: (1)

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that Planters has outstanding obligations in foreign currency and/or pesos, to the Creditors, (2) that Planters is currently experiencing financial difficulties, and (3) that there are presently pending with the Securities and Exchange Commission of the Philippines a petition filed at Planters’ own behest for the suspension of payment of all its obligations, and a separate petition filed by Manufacturers Hanover Trust Company, Manila Offshore Branch for the appointment of a rehabilitation receiver for Planters.             In connection with the foregoing, the Republic of the Philippines (the “Republic”) confirms that it considers and continues to consider Planters as a major fertilizer distributor. Accordingly, for and in consideration of your expressed willingness to consider and participate in the effort to rehabilitate Planters, the Republic hereby manifests its full and unqualified support of the successful rehabilitation and continuing viability of Planters, and to that end, hereby binds and obligates itself to the creditors and Planters, as follows: 

x x x x 

2.  Upon the effective date of this Letter of Undertaking, the Republic shall cause FPA to include in its fertilizer pricing formula a capital recovery component, the proceeds of which will be used initially for the purpose of funding the unpaid portion of the outstanding capital stock  of Planters presently held in trust by Planters Foundation, Inc. (“Planters Foundation”), which unpaid capital is estimated at approximately P206 million (subject to validation by Planters and Planters Foundation) such unpaid portion of the outstanding capital stock of Planters being hereafter referred to as the “Unpaid Capital”), and subsequently for such capital increases as may be required for the continuing viability of Planters. 

x x x x 

The capital recovery component shall continue to be charged and collected until payment in full of (a) the Unpaid Capital and/or (b) any shortfall in the payment of the Subsidy Receivables, (c) any carrying cost accruing from the date hereof on the amounts which may be outstanding from time to time of the Unpaid Capital and/or the Subsidy Receivables, and (d) the capital increases contemplated in paragraph 2 hereof.  For the purpose of the foregoing clause (c), the “carrying cost” shall be at such rate as will represent the full and reasonable cost to Planters of servicing its debts, taking into account both its peso and foreign currency-denominated obligations. 

REPUBLIC OF THE PHILIPPINESBy:        (signed)CESAR E. A. VIRATA

                                                            Prime Minister and Minister of Finance[51]

 It is clear from the Letter of Understanding that the levy was imposed precisely to pay the

corporate debts of PPI.  We cannot agree with PPI that the levy was imposed to ensure the stability of the fertilizer industry in the country.  The letter of understanding and the plain text of the LOI clearly indicate that the levy was exacted for the benefit of a private corporation. 

All told, the RTC and the CA did not err in holding that the levy imposed under LOI No. 1465 was not for a public purpose.  LOI No. 1465 failed to comply with the public purpose requirement for tax laws. 

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The LOI is still unconstitutional even if enacted under the police power; it did not promote public interest.           Even if We consider LOI No. 1695 enacted under the police power of the State, it would still be invalid for failing to comply with the test of “lawful subjects” and “lawful means.”  Jurisprudence states the test as follows: (1) the interest of the public generally, as distinguished from those of particular class, requires its exercise; and (2) the means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals.[52]

          For the same reasons as discussed, LOI No. 1695 is invalid because it did not promote public interest.  The law was enacted to give undue advantage to a private corporation.  We quote with approval the CA ratiocination on this point, thus: 

It is upon applying this established tests that We sustain the trial court’s holding LOI 1465 unconstitutional. To be sure, ensuring the continued supply and distribution of fertilizer in the country is an undertaking imbued with public interest.  However, the method by which LOI 1465 sought to achieve this is by no means a measure that will promote the public welfare.  The government’s commitment to support the successful rehabilitation and continued viability of PPI, a private corporation, is an unmistakable attempt to mask the subject statute’s impartiality.   There is no way to treat the self-interest of a favored entity, like PPI, as identical with the general interest of the country’s farmers or even the Filipino people in general.  Well to stress, substantive due process exacts fairness and equal protection disallows distinction where none is needed.  When a statute’s public purpose is spoiled by private interest, the use of police power becomes a travesty which must be struck down for being an arbitrary exercise of government power.  To rule in favor of appellant would contravene the general principle that revenues derived from taxes cannot be used for purely private purposes or for the exclusive benefit of private individuals.  (Underscoring supplied)

 The general rule is that an unconstitutional law is void; the doctrine of operative fact is inapplicable. 

PPI also argues that Fertiphil cannot seek a refund even if LOI No. 1465 is declared unconstitutional.  It banks on the doctrine of operative fact, which provides that an unconstitutional law has an effect before being declared unconstitutional.  PPI wants to retain the levies paid under LOI No. 1465 even if it is subsequently declared to be unconstitutional. 

We cannot agree. It is settled that no question, issue or argument will be entertained on appeal, unless it has been raised in the court a quo.[53]  PPI did not raise the applicability of the doctrine of operative fact with the RTC and the CA.  It cannot belatedly raise the issue with Us in order to extricate itself from the dire effects of an unconstitutional law. 

At any rate, We find the doctrine inapplicable.  The general rule is that an unconstitutional law is void.  It produces no rights, imposes no duties and affords no protection. It has no legal effect.  It is, in legal contemplation, inoperative as if it has not been passed. [54]  Being void, Fertiphil is not required to pay the levy.  All levies paid should be refunded in accordance with the general civil code principle against unjust enrichment.  The general rule is supported by Article 7 of the Civil Code, which provides: 

ART. 7.  Laws are repealed only by subsequent ones, and their violation or non-observance shall not be excused by disuse or custom or practice to the contrary.

 When the courts declare a law to be inconsistent with the Constitution, the

former shall be void and the latter shall govern.

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 The doctrine of operative fact, as an exception to the general rule, only applies as a matter of

equity and fair play.[55]  It nullifies the effects of an unconstitutional law by recognizing that the existence of a statute prior to a determination of unconstitutionality is an operative fact and may have consequences which cannot always be ignored.  The past cannot always be erased by a new judicial declaration.[56]

 The doctrine is applicable when a declaration of unconstitutionality will impose an undue

burden on those who have relied on the invalid law.  Thus, it was applied to a criminal case when a declaration of unconstitutionality would put the accused in double jeopardy[57] or would put in limbo the acts done by a municipality in reliance upon a law creating it.[58]

 Here, We do not find anything iniquitous in ordering PPI to refund the amounts paid by

Fertiphil under LOI No. 1465.  It unduly benefited from the levy.  It was proven during the trial that the levies paid were remitted and deposited to its bank account.  Quite the reverse, it would be inequitable and unjust not to order a refund. To do so would unjustly enrich PPI at the expense of Fertiphil.  Article 22 of the Civil Code explicitly provides that “every person who, through an act of performance by another comes into possession of something at the expense of the latter without just or legal ground shall return the same to him.”  We cannot allow PPI to profit from an unconstitutional law.  Justice and equity dictate that PPI must refund the amounts paid by Fertiphil.           WHEREFORE, the petition is DENIED.  The Court of Appeals Decision dated November 28, 2003 is AFFIRMED. 

SO ORDERED.

 

61

Republic of the PhilippinesSupreme Court

Manila   

SECOND DIVISION  

ERNESTO VILLEZA,                                    Petitioner,    

- versus -   

GERMAN MANAGEMENT AND SERVICES, INC., DOMINGO RENE JOSE,PIO DIOKNO, SESINANDO FAJARDO, BAYANI OLIPINO,ROLANDO ROMILO and JOHN DOES,

                                Respondents.

  G.R. No. 182937 Present: CARPIO, J., Chairperson,NACHURA,PERALTA,ABAD, andMENDOZA, JJ.       Promulgated:    August 8, 2010 

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

 D E C I S I O N

 MENDOZA, J.:          This petition sprouted from an earlier Supreme Court ruling in German Management v. Court of Appeals,[1] G.R. Nos. 72616-76217, September 14, 1989, which has already become final and executory.  The decision, however, remains unenforced due to the prevailing party’s own inaction.  This petition, therefore, is the struggle of a victor trying to retrieve the prize once won.

It appears that German Management v. Court of Appeals stemmed from a forcible entry case instituted by petitioner Ernesto Villeza against respondent German Management, the authorized developer of the landowners, before the Metropolitan Trial Court of Antipolo City (MeTC). The Decision of this Court favoring the petitioner became final and executory on October 5, 1989.[2]  In ruling against German Management, We wrote: 

Although admittedly, petitioner may validly claim ownership based on the muniments of title it presented, such evidence does not responsively address the issue of prior actual possession raised in a forcible entry case.  It must be stated that regardless of the actual condition of the title to the property, the party in peaceable quiet possession shall not be turned out by a strong hand, violence or terror.  Thus, a party who can prove prior possession, can recover such possession even against the owner himself.  Whatever may be the character of his prior possession if he has in his favor priority in time, he has the security that entitles him to remain on the property until he is lawfully ejected by a person having a better right by accion publiciana or accion reinvindicatoria.[3]   

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          On May 27, 1991, the petitioner filed a Motion for Issuance of Writ of Execution with the MeTC.  On February 27, 1992, he filed a Motion to Defer Resolution[4] thereon because “he was permanently assigned in Iloilo and it would take quite sometime before he could come back.”  On February 28, 1992, the MeTC issued an order holding in abeyance the resolution of his motion to issue writ of execution until his return. Three years later, as there was no further movement, the said court issued an order dated January 9, 1995 denying petitioner’s pending Motion for Issuance of Writ of Execution for lack of interest. 

More than three (3) years had passed before petitioner filed a Motion for Reconsideration dated May 29, 1998 alleging that he had retired from his job in IloiloCity and was still interested in the issuance of the writ.  On October 8, 1998, the MeTC issued a writ of execution.

As the sheriff was implementing the writ, an Opposition with Motion to Quash Writ of Execution was filed by German Management and Services, Inc.  On June 3, 1999, an order was handed down granting the motion to quash the writ of execution issued.  Pertinently, the said Order reads:

 Considering the provision of Section 6, Rule 39 of the 1997 Rules of Civil

Procedure, after the lapse of five years from the date of entry, judgment may no longer be enforced by way of motion but by independent action.[5]

  

On October 3, 2000, Villeza filed with the MeTC a Complaint for Revival of Judgment of the Decision of the Supreme Court dated September 14, 1989.           Respondent German Management moved to dismiss the complaint.  It alleged that it had been more than 10 years from the time the right of action accrued, that is, from October 5, 1989, the date of the finality of the Court's decision to October 3, 2000, the date of the filing of the complaint for its revival.  It further argued that, pursuant to Section 6, Rule 39 of the Rules of Court in relation to Article 1144 of the Civil Code, the complaint is now barred by the statute of limitations.             On March 29, 2001, the MeTC granted the motion to dismiss reasoning that Article 1144 of the Civil Code was categorical that an action to enforce a judgment must be brought within ten years from the time such right accrues.  Since it had been almost 11 years from the time the 1989 Court’s decision became final and executory, the action to revive it was barred. 

Aggrieved, petitioner Villeza appealed the decision to the Regional Trial Court (RTC) which affirmed in toto the MeTC order of dismissal in its April 24, 2004 Decision.          Petitioner Villeza elevated the case to the Court of Appeals (CA) arguing that the 10-year prescriptive period was tolled by the suspension granted him by the MeTC of Antipolo pursuant to his request to hold in abeyance the issuance of the writ of execution.  He claimed that he could not be considered to have slept on his rights as he filed the necessary action to enforce the final decision. Nevertheless, the CA ruled against him. Thus: 

            Petitioner's claim that the prescriptive period should be deemed interrupted by the grant of his move to defer action on the motion to execute cannot be countenanced.  While there had been many instances where the Hon. Supreme Court allowed execution by motion even after the lapse of five years, said exceptions were occasioned by delay attributed to the judgment debtor.  In the case at bar, the delay in the excution of the judgment is attributable to the petitioner, the party in whose favor judgment was issued.                                                                                                                     x x x x 

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WHEREFORE, in view of the foregoing, the petition is DENIED. The decision appealed from is hereby AFFIRMED.[6]

  

Hence, this Petition for Review on Certiorari under Rule 45 of the Rules of Court.          Petitioner Villeza reiterates his argument that he never slept on his right as he pursued several remedies.  Still, he insists that the interruption or suspension granted by the MeTC must be considered in computing the period  because  it  has  the  effect  of tolling  or  stopping the counting of the period for execution.[7] Besides, the Court has in the past provided several exceptions affording extension of the prescriptive period.  Thus, he averred: “It is revolting to the conscience to allow respondents to further avert the satisfaction of its obligation because of the sheer literal adherence to technicality.”[8]

        The Court finds no merit in this petition.

 An action for revival of judgment is governed by Article 1144 (3), Article 1152 of the Civil

Code and Section 6, Rule 39 of the Rules of Court. Thus, 

Art. 1144. The following actions must be brought within ten years from the time the right of action accrues: 

x x x x 

(3) Upon a judgment Article 1152 of the Civil Code states:  

Art. 1152. The period for prescription of actions to demand the fulfillment of obligations declared by a judgment commences from the time the judgment became final.

  Apropos, Section 6, Rule 39 of the Rules of Court reads: 

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. (emphasis supplied)

  The rules are clear.  Once a judgment becomes final and executory, the prevailing party can

have it executed as a matter of right  by  mere  motion  within five years from the date of entry of judgment.  If the prevailing party fails to have the decision enforced by a motion after the lapse of five years, the said judgment is reduced to a right of action which must be enforced by the institution of a complaint in a regular court within ten years from the time the judgment becomes final. 

When petitioner Villeza filed the complaint for revival of judgment on October 3, 2000, it had already been eleven (11) years from the finality of the judgment he sought to revive.  Clearly, the statute of limitations had set in.

Petitioner Villeza, however, wants this Court to agree with him that the abeyance granted to him by the lower court tolled the running of the prescriptive period. He even cited cases allowing

64

exceptions to the general rule. The Court, nevertheless, is not persuaded.  The cited cases are, in fact, not applicable to him, despite his endeavor to tailor them to fit in to his position.   The same cases lamentably betray him.

 Republic v. Court of Appeals[9] deals with the stay of the period due to the acts of the losing

party.  It was impossible for the winning party to have sought the execution of the judgment because of the dilatory schemes and maneuvers resorted to by the other party.[10]

 In Torralba v. delos Angeles,[11] the running of the period was interrupted

when  the  winning   party   filed  a  motion  for  the issuance  of  the  writ  ofexecution.  The order of ejectment was not carried out, however, due to the judgment debtor’s begging to withhold the execution of judgment because offinancial difficulties.[12]  The agreement of the parties to defer or suspend the enforcement of the judgment interrupted the period of prescription.[13]

   In Casela v. Court of Appeals,[14] it was the judgment obligor who moved to suspend the writ of execution.  The judgment obligee was not in delay because he exhausted all legal means within his power to eject the obligor from his land.  The writs of execution issued by the lower court were not complied with and/or were suspended by reason of acts or causes not of obligee’s own making and against his objections.[15]

 Unlike the cases cited above, the records reveal that it was petitioner Villeza, the prevailing

party himself, who moved to defer the execution of judgment.  The losing party never had any hand in the delay of its execution.  Neither did the parties have any agreement on that matter.  After the lapse of five years (5) from the finality of judgment, petitioner Villeza should have instead filed a complaint for its revival in accordance with Section 6, Rule 39 of the Rules of Court.   He, however, filed a motion to execute the same which was a wrong course of action.  On the 11th year, he finally sought its revival but he requested the aid of the courts too late.  

 The Court has pronounced in a plethora of cases that it is revolting to the conscience to

allow someone to further avert the satisfaction of an obligation because of sheer literal adherence to technicality;[16] that although strict compliance with the rules of procedure is desired, liberal interpretation is  warranted  in  cases  where a strict enforcement of the rules will not servethe ends of justice;[17] and that it is a better rule that courts, under the principle of equity, will not be guided or bound strictly by the statute of limitations or the doctrine of laches when to do so, manifest wrong or injustice would result.[18] These cases, though, remain exceptions to the general rule. The purpose of the law in prescribing time limitations for enforcing judgment by action is precisely to prevent the winning parties from sleeping on their rights.[19]  This Court cannot just set aside the statute of limitations into oblivion every time someone cries for equity and justice.  Indeed, “if eternal vigilance is the price of safety, one cannot sleep on one's right for more than a 10 th of a century and expect it to be preserved in pristine purity.”[20]  

WHEREFORE, the May 9, 2008 Decision of the Court of Appeals in CA-GR No. SP No. 84035 is AFFIRMED.   

SO ORDERED.

65

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 92649 February 14, 1991

SPOUSES LEONOR and ROSA BADUA, petitioners, vs.CORDILLERA BODONG ADMINISTRATION, CORDILLERA PEOPLE'S LIBERATION ARMY, MANUEL TAO-IL, AMOGAO-EN KISSIP, DALALO ILLIQUES, JUANITO GAYYED, PEDRO CABANTO, VICENTE DAYEM and DAVID QUEMA, respondents.

GRIÑO-AQUINO, J.:p

Whether a tribal court of the Cordillera Bodong Administration can render a valid and executory decision in a land dispute is the legal issue presented by this petition.

The petitioners, spouses Leonor and Rosa Badua, allegedly own a farm land in Lucaga, Lumaba, Villaviciosa, Abra. In July 1989, they were forcibly ejected from the land by virtue of a "decision" of the Cordillera Bodong Administration in Case No. O, entitled "David Quema vs. Leonor Badua."

The factual background of the case, as recited in the undated "decision" (Annex A, translation is Annex A-1) is as follows:

In 1966, Quema, as the owner of two parcels of land in Lucaga, Lumaba, Villaviciosa, Abra, evidenced by Tax Declarations Nos. 4997 and 4998 mortgaged said parcels of land for P6,000 to Dra. Erotida Valera. He was able to redeem the land twenty-two (22) years later, on August 14, 1988, long after the mortgagee had already died. He allegedly paid the redemption price of P10,000 to the mortgagee's heir, Jessie Macaraeg.

On the other hand, Rosa Badua, alleged that the land was sold to her by Dra. Erotida Valera when she was still alive. However, Rosa could not produce the deed of sale because it is allegedly in the possession of Vice-Governor Benesa.

As Quema was prevented by Rosa Badua from cultivating the land, he filed a case before the Barangay Council, but it failed to settle the dispute, A certain Judge Cacho advised Quema to file his complaint in the provincial level courts. Instead, Quema filed it in the tribal court of the Maeng Tribe. The tribal court conducted a trial on February 19, 1989 and rendered the following decision:

9. The Maeng Tribal Court, therefore, decides to give the land to DAVID QUEMA and ROSA BADUA and her husband must pay the persons to whom they mortgaged the said land. The Maeng Tribal Court also decides that ROSA BADUA and her husband must reimburse the expenses of DAVID QUEMA in following-up the land case amounting to P2,000.00. The Maeng Tribal Court further decides to penalize ROSA BADUA and her husband in the amount of P5,000.00 for telling the lie that they bought this land from the late DRA. EROTIDA VALERA; for misleading the Maeng Tribal Court which handled the continuation of this case here in Bangued, CBA Provincial Office where they failed to make an appearance; and their illegal acquisition of the said parcel of land. This decision is based on the "PAGTA." (pp. 16-17, Rollo.)

66

When Leonor and Rosa Badua did not immediately vacate the land, they received on June 30, 1989 a "warning order" from Ka Blantie, Zone Commander, Abra Zone-1 of the Cordillera People's Liberation Army, thus:

WARNING ORDER

Mr. & MRS. LEONOR BADUA

A last warning from the armed CPLA of the CBA reiterates the order that you not to interfere any longer with the parcels of land decided in favor of DAVID QUEMA as per "Court Order" of the Maeng Tribal Court. You are also to pay back the expenses he incurred for the case amounting to P2,000.00 and your fine of P5,000.00.

Non-compliance of the said decision of the Court and any attempt to bring this case to another Court will force the CPLA to settle the matter, in which case, you will have no one to blame since the case has been settled. (p. 20, Rollo.)

Fearful for his life, Leonor Badua went into hiding. In September 1989, his wife, Rosa, was arrested by the Cordillera People's Liberation Army and detained for two days.

On April 2, 1990, the Baduas filed this petition "for Special and Extraordinary Reliefs" (which may be treated as a petition for certiorari and prohibition) praying that:

1. a writ of preliminary injunction be issued to stop the respondents from enforcing the decision of the Cordillera Bodong Administration during the pendency of this case;

2. the respondents be prohibited from usurping judicial power and hearing cases; and

3. the legal personality of the Cordillera Bodong Administration and Cordillera People's Liberation Army be clarified.

Petitioners allege that the decision of the Cordillera Bodong Administration is null and void because:

1. petitioners were denied due process or formal hearing; and

2. the Cordillera Bodong Administration has no judicial power nor jurisdiction over the petitioners nor over the private respondent as neither of them are members of the Maeng Tribe.

Upon receipt of the petition, the Court on April 5, 1990 required the respondents to comment, but, unable to serve said resolution on the respondents, the court requested the Philippine Constabulary Commander of the Cordillera Region to do it.

Respondents through counsel, Atty. Demetrio V. Pre, filed their comment on October 26, 1990. They alleged that: the Maeng Tribe is a cultural minority group of Tingguians inhabiting the interior mountain town of Villaviciosa, Abra. The tribe is a part of the Cordillera Bodong Association or Administration whose military arm is the Cordillera People's Liberation Army. The tribal court, or council of elders, is composed of prominent and respected residents in the locality. It decides and settles all kinds of disputes more speedily than the regular courts, without the intervention of lawyers.

Respondents further allege that the proceedings and decisions of the tribal courts are respected and obeyed by the parties, the municipal and barangay officials, and the people in the locality, ostracism

67

being the penalty for disobedience of, or non-compliance with, the decisions of the council of elders in the areas where tribal courts operate.

Respondents contend that the Supreme Court has no jurisdiction over the tribal courts because they are not a part of the judicial system.

Respondents concede that if the petitioners "want to test the wisdom of the decision of the council of elders," the petitioners should file the necessary suit, not in the Supreme Court, but in the trial courts where evidence can be presented. Respondents pray that the decision of the tribal court be maintained and the petition for certiorari and prohibition be dismissed.

After deliberating on the petition and the comment thereon of the respondents, which the Court decided to treat as the latter's answer, the Court finds the petition to be meritorious, hence, resolved to grant the same.

In Cordillera Regional Assembly Member Alexander P. Ordillo, et al. vs. The Commission on Elections, et al., G.R. No. 93054, December 4, 1990, the Court en banc, found that in the plebiscite that was held on January 23, 1990 pursuant to Republic Act 6766, the creation of the Cordillera Autonomous Region was rejected by all the provinces and city * of the Cordillera region, except Ifugao province, hence, the Cordillera Autonomous Region did not come to be.

Resolution No. 2259 of the Commission on Elections, insofar as it upholds the creation of an autonomous region, the February 14, 1990 memorandum of the Secretary of Justice, the February 5, 1990 memorandum of the Executive Secretary, Administrative Order No. 160, and Republic Act No. 6861 are declared null and void while Executive Order No. 220 is declared to be still in force and effect until properly repealed or amended.

As a logical consequence of that judicial declaration, the Cordillera Bodong Administration created under Section 13 of Executive Order No. 220, the indigenous and special courts for the indigenous cultural communities of the Cordillera region (Sec. 1, Art. VII, Rep. Act 6766), and the Cordillera People's Liberation Army as a regional police force or a regional command of the Armed Forces of the Philippines (Secs. 2 and 4, Article XVIII of R.A. 6766), do not legally exist.

Since the Cordillera Autonomous Region did not come into legal existence, the Maeng Tribal Court was not constituted into an indigenous or special court under R.A. No. 6766. Hence, the Maeng Tribal Court is an ordinary tribal court existing under the customs and traditions of an indigenous cultural community.

Such tribal courts are not a part of the Philippine judicial system which consists of the Supreme Court and the lower courts which have been established by law (Sec. 1, Art. VIII, 1987 Constitution). They do not possess judicial power. Like the pangkats or conciliation panels created by P.D. No. 1508 in the barangays, they are advisory and conciliatory bodies whose principal objective is to bring together the parties to a dispute and persuade them to make peace, settle, and compromise.

An amicable settlement, compromise, and arbitration award rendered by a pangkat, if not seasonably repudiated, has the force and effect of a final judgment of a court (Sec. 11, P.D. 1508), but it can be enforced only through the local city or municipal court to which the secretary of the Lupon transmits the compromise settlement or arbitration award upon expiration of the period to annul or repudiate it (Sec. 14, P.D. 1508). Similarly, the decisions of a tribal court based on compromise or arbitration, as provided in P.D. 1508, may be enforced or set aside, in and through the regular courts today.

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WHEREFORE, finding the petition to be meritorious, the same is hereby GRANTED. The decision rendered on February 18, 1989 by the Maeng Tribal Court in Case No. 0, entitled "David Quema vs. the Leonor Badua," is hereby annulled for lack of jurisdiction. The respondents Cordillera Bodong Administration, Cordillera People's Liberation Army, Manuel Tao-il, Amogao-en Kissip, Dalalo Illiques, Juanita Gayyed, Pedro Cabanto, Vicente Dayem and David Quema, are hereby ordered to cease and desist from implementing said decision, without prejudice to the filing of an appropriate action by the parties in the proper competent courts of the land as provided by law. Costs against the respondents.

SO ORDERED.

THIRD DIVISION

G.R. No. 171855 : October 15, 2012

FE V. RAPSING, TITA C. VILLANUEVA and ANNIE F. APAREJADO, represented by EDGAR AP AREJADO, Petitioners, v. HON. JUDGE MAXIMINO R. ABLES, of RTC-Branch 47, Masbate City; SSGT. EDISON RURAL, CAA JOSE MATU, CAA MORIE FLORES, CAA GUILLEN TOPAS, CAA

DANDY FLORES, CAA LEONARDO CALIMUTAN and CAA RENE ROM, Respondents.

D E C I S I O N

PERALTA, J.:

Before this Court is a Petition for Certiorari and Prohibition under Rule 65 of the Rules of Court, filed by petitioners Fe Rapsing, Tita C. Villanueva and Annie Aparejado, as represented by Edgar Aparejado, seeking to set aside the Orders dated December 6, 20051Ï‚rνll and January 11, 2006,2Ï‚rνllrespectively, of the Regional Trial Court (RTC) of Masbate City, Branch 47, in Criminal Case No. 11846.

The antecedents are as follows:

Respondents SSgt. Edison Rural, CAA Jose Matu, CAA Morie Flores, CAA Guillien Topas, CAA Dandy Flores, CAA Leonardo Calimutan and CAA Rene Rom are members of the Alpha Company, 22nd Infantry Battalion, 9th Division of the Philippine Army based at Cabangcalan Detachment, Aroroy, Masbate.

Petitioners, on the other hand, are the widows of Teogenes Rapsing, Teofilo Villanueva and Edwin Aparejado, who were allegedly killed in cold blood by the respondents.

69

Respondents alleged that on May 3, 2004, around 1 o'clock in the afternoon, they received information about the presence of armed elements reputed to be New Peoples Army (NPA) partisans in Sitio Gaway-gaway, Barangay Lagta, Baleno, Masbate. Acting on the information, they coordinated with the Philippine National Police and proceeded to the place. Thereat, they encountered armed elements which resulted in an intense firefight. When the battle ceased, seven (7) persons, namely: Teogenes Rapsing y Manlapaz, Teofilo Villanueva y Prisado, Marianito Villanueva y Oliva, Edwin Aparejado y Valdemoro, Isidro Espino y Arevalo, Roque Tome y Morgado and Norberto Aranilla y Cordova were found sprawled on the ground lifeless. The post-incident report of the Philippine Army states that a legitimate military operation was conducted and in the course of which, the victims, armed with high-powered firearms, engaged in a shoot-out with the military.

On the other hand, petitioners complained that there was no encounter that ensued and that the victims were summarily executed in cold blood by respondents. Hence, they requested the National Bureau of Investigation (NBI) to investigate the case. After investigation, the NBI recommended to the Provincial Prosecutor of Masbate City that a preliminary investigation be conducted against respondents for the crime of multiple murder. In reaching its recommendation, the NBI relied on the statements of witnesses who claim that the military massacred helpless and unarmed civilians.

On February 9, 2005, the provincial prosecutor issued a Resolution3Ï‚rνll recommending the filing of an Information for Multiple Murder. Consequently, respondents were charged with multiple murder in an Information4Ï‚rνll dated February 15, 2005, which reads:

The undersigned 2nd Assistant Provincial Prosecutor accuses SSGT Edison Rural, CAA Jose Matu. CAA Morie Flores, CAA Guillen Topas, CAA Dandy Flores, CAA Leonardo Calimutan and CAA Rene Rom, stationed at Alpha Company, 22nd Infantry Battalion, 9th Division, Philippine Army, Cabangcalan Detachment, Aroroy, Masbate, committed as follows:

That on May 9, 2004, at around 1:00 o'clock in the afternoon thereof, at Barangay Lagta, Municipality of Baleno, Province of Masbate, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, conspiring together and mutually helping with one another, taking advantage of their superior strength as elements of the Philippine Army, armed with their government issued firearms, with intent to kill, by means of treachery and evident premeditation, did then and there willfully, unlawfully and feloniously attack, assault and shoot Teogenes Rapsing y Manlapaz, Teofilo Villanueva y Prisado, Marianito Villanueva y Oliva, Edwin Aparejado y Valdemoro, Isidro Espino y Arevalo, Roque Tome y Morgado and Norberto Aranilla y Cordova, hitting them on different parts of their bodies, thereby inflicting upon them multiple gunshot wounds which caused their deaths.

CONTRARY TO LAW.

Masbate City, February 15, 2005.

On July 28, 2005, a warrant5Ï‚rνll for the arrest of respondents was issued by the RTC of Masbate City, Branch 47, but before respondents could be arrested, the Judge Advocate General's Office (JAGO) of the Armed Forces of the Philippines (AFP) filed an Omnibus Motion6Ï‚rνll dated July 20, 2005, with the trial court seeking the cases against respondents be transferred to the jurisdiction of the military tribunal.7Ï‚rνll Initially, the trial court denied the motion filed by the JAGO on the ground that respondents have not been arrested. The JAGO filed a Motion for Reconsideration,8Ï‚rνll and in an Order9Ï‚rνll dated December 6, 2005, the trial court granted the Omnibus Motion and the entire records of the case were turned over to the Commanding General of the 9th Infantry Division, Philippine Army, for appropriate action.

70

Petitioners sought reconsideration10Ï‚rνll of the Order, but was denied by the trial court in an Order11Ï‚rνlldated January 11, 2006.

Hence, the present petition with the following arguments:

I HON. JUDGE MAXIMINO ABLES GRAVELY ABUSED HIS DISCRETION AMOUNTING TO EXCESS OF JURISDICTION IN GRANTING THE MOTION TO TRANSFER THE INSTANT CRIMINAL CASE OF MULTIPLE MURDER TO THE JURISDICTION OF THE MILITARY COURT MARTIAL, AS THE SAID TRIBUNAL, BASED ON FACTS AND IN LAW, HAS NO JURISDICTION OVER THE INSTANT MURDER CASE.

II IT IS GRAVE ABUSE OF DISCRETION AMOUNTING TO EXCESS IN JURISDICTION IF NOT GROSS IGNORANCE OF THE LAW ON THE PART OF HONORABLE JUDGE MAXIMINO ABLES TO HOLD THAT HIS ORDER DATED DECEMBER 6, 2005 COULD ONLY BE REVIEWED THROUGH AN APPEAL, AS THERE IS NO TRIAL ON THE MERIT YET ON THE INSTANT CRIMINAL CASE.12ςrνll

Petitioners alleged that the trial court gravely abused its discretion amounting to excess of jurisdiction when it transferred the criminal case filed against the respondents to the jurisdiction of the military tribunal, as jurisdiction over the same is conferred upon the civil courts by Republic Act No. 7055 (RA 7055).13Ï‚rνll On the other hand, the respondents and the Office of the Solicitor General (OSG) alleged that the acts complained of are service connected and falls within the jurisdiction of the military court.

The petition is meritorious. The trial court gravely abused its discretion in not taking cognizance of the case, which actually falls within its jurisdiction.

It is an elementary rule of procedural law that jurisdiction over the subject matter of the case is conferred by law and is determined by the allegations of the complaint irrespective of whether the plaintiff is entitled to recover upon all or some of the claims asserted therein.14Ï‚rνll As a necessary consequence, the jurisdiction of the court cannot be made to depend upon the defenses set up in the answer or upon the motion to dismiss, for otherwise, the question of jurisdiction would almost entirely depend upon the defendant. What determines the jurisdiction of the court is the nature of the action pleaded as appearing from the allegations in the complaint. The averments in the complaint and the character of the relief sought are the matters to be consulted.15Ï‚rνll

In the case at bar, the information states that respondents, "conspiring together and mutually helping with one another, taking advantage of their superior strength, as elements of the Philippine Army, armed with their government-issued firearms with intent to kill, by means of treachery and evident premeditation, did then and there willfully, unlawfully and feloniously attack, assault and shoot the [victims], hitting them on different parts of their bodies, thereby inflicting upon them multiple gunshot wounds which caused their deaths."16Ï‚rνll Murder is a crime punishable under Article 248 of the Revised Penal Code (RPC), as amended, and is within the jurisdiction of the RTC.17Ï‚rνll Hence, irrespective of whether the killing was actually justified or not, jurisdiction to try the crime charged against the respondents has been vested upon the RTC by law.

Respondents, however, contend that the military tribunal has jurisdiction over the case at bar because the crime charged was a service-connected offense allegedly committed by members of the AFP. To support their position, respondents cite the senate deliberations on R.A. 7055.

Respondents stress in particular the proposal made by Senator Leticia Ramos Shahani to define a service-connected offense as those committed by military personnel pursuant to the lawful order of their superior officer or within the context of a valid military exercise or mission.18ςrνllRespondents maintain that the foregoing definition is deemed part of the statute.

71

However, a careful reading of R.A. 7055 indicate that the proposed definition was not included as part of the statute. The proposed definition made by Senator Shahani was not adopted due to the amendment made by Senator Wigberto E. Tada, to wit:chanroblesvirtuallawlibrary

Senator Tada. Yes, Mr. President. I would just want to propose to the Sponsor of this amendment to consider, perhaps, defining what this service-related offenses would be under the Articles of War. And so, I would submit for her consideration the following amendment to her amendment which would read as follows: AS USED IN THIS SECTION, SERVICE-CONNECTED CRIMES OR OFFENSES SHALL BE LIMITED TO THOSE DEFINED IN ARTICLES 54 TO 70, ARTICLES 72 TO 75, ARTICLES 76 TO 83 AND ARTICLES 84 TO 92, AND ARTICLES 95 TO 97, COMMONWEALTH ACT NO. 408 AS AMENDED.

This would identify, I mean, specifically, what these service-related or connected offenses or crimes would be. (Emphasis supplied.)

The President. What will happen to the definition of "service-connected offense" already put forward by Senator Shahani?

Senator Tada. I believe that would be incorporated in the specification of the Article I have mentioned in the Articles of War.

SUSPENSION OF THE SESSION

The President. Will the Gentleman kindly try to work it out between the two of you? I will suspend the session for a minute, if there is no objection. There was none.

It was 5:02 p.m.

RESUMPTION OF THE SESSION

At 5:06 p.m., the session was resumed.

The President. The session is resumed.

Senator Tada. Mr. President, Senator Shahani has graciously accepted my amendment to her amendment, subject to refinement and style.

The President. Is there any objection? Silence There being none, the amendment is approved.19ςrνll

In the same session, Senator Tada emphasized:

Senator Tada. Section 1, already provides that crimes of offenses committed by persons subject to military law ... will be tried by the civil courts, except, those which are service-related or connected. And we specified which would be considered service-related or connected under the Articles of War, Commonwealth Act No. 408.20Ï‚rνll (Emphasis supplied.)

The said amendment was later on reflected in the final version of the statute as Paragraph 2 of Section 1. Section 1 of R.A. 7055 reads in full:

Section 1. Members of the Armed Forces of the Philippines and other persons subject to military law, including members of the Citizens Armed Forces Geographical Units, who commit crimes or offenses penalized under the Revised Penal Code, other special penal laws, or local government

72

ordinances, regardless of whether or not civilians are co-accused, victims, or offended parties which may be natural or juridical persons, shall be tried by the proper civil court, except when the offense, as determined before arraignment by the civil court, is service-connected, in which case the offense shall be tried by court-martial: Provided, That the President of the Philippines may, in the interest of justice, order or direct at any time before arraignment that any such crimes or offenses be tried by the proper civil courts.

As used in this Section, service-connected crimes or offenses shall be limited to those defined in Articles 54 to 70, Articles 72 to 92, and Articles 95 to 97 of Commonwealth Act No. 408, as amended. (Emphasis supplied)

The second paragraph of Section 1 of R.A. 7055 explicitly specifies what are considered "service-connected crimes or offenses" under Commonwealth Act No. 408 (CA 408), as amended,21Ï‚rνll to wit:

Articles 54 to 70:Art. 54. Fraudulent Enlistment.Art. 55. Officer Making Unlawful Enlistment.Art. 56. False Muster.Art. 57. False Returns.Art. 58. Certain Acts to Constitute Desertion.Art. 59. Desertion.Art. 60. Advising or Aiding Another to Desert.Art. 61. Entertaining a Deserter.Art. 62. Absence Without Leave.Art. 63. Disrespect Toward the President, Vice-President, Congress of the Philippines, or Secretary of National Defense.Art. 64. Disrespect Toward Superior Officer.Art. 65. Assaulting or Willfully Disobeying Superior Officer.Art. 66. Insubordinate Conduct Toward Non-Commissioned Officer.Art. 67. Mutiny or Sedition.Art. 68. Failure to Suppress Mutiny or Sedition.Art. 69. Quarrels; Frays; Disorders.Art. 70. Arrest or Confinement.Articles 72 to 92Art. 72. Refusal to Receive and Keep Prisoners.Art. 73. Report of Prisoners Received.Art. 74. Releasing Prisoner Without Authority.Art. 75. Delivery of Offenders to Civil Authorities.Art. 76. Misbehavior Before the Enemy.Art. 77. Subordinates Compelling Commander to Surrender.Art. 78. Improper Use of Countersign.Art. 79. Forcing a Safeguard.Art. 80. Captured Property to be Secured for Public Service.Art. 81. Dealing in Captured or Abandoned Property.Art. 82. Relieving, Corresponding With, or Aiding the Enemy.Art. 83. Spies.Art. 84. Military Property. Willful or Negligent Loss, Damage or Wrongful Disposition.Art. 85. Waste or Unlawful Disposition of Military Property Issued to Soldiers.Art. 86. Drunk on Duty.Art. 87. Misbehavior of Sentinel.Art. 88. Personal Interest in Sale of Provisions.Art. 88-A. Unlawfully Influencing Action of Court.Art. 89. Intimidation of Persons Bringing Provisions.Art. 90. Good Order to be Maintained and Wrongs Redressed.

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Art. 91. Provoking Speeches or Gestures.Art. 92. Dueling.Articles 95 to 97:Art. 95. Frauds Against the Government.Art. 96. Conduct Unbecoming an Officer and Gentleman.Art. 97 General Article.

In view of the provisions of R.A. 7055, the military tribunals cannot exercise jurisdiction over respondents' case since the offense for which they were charged is not included in the enumeration of "service-connected offenses or crimes" as provided for under Section 1 thereof. The said law is very clear that the jurisdiction to try members of the AFP who commit crimes or offenses covered by the RPC, and which are not service-connected, lies with the civil courts. Where the law is clear and unambiguous, it must be taken to mean exactly what it says and the court has no choice but to see to it that its mandate is obeyed. There is no room for interpretation, but only application.22Ï‚rνll Hence, the RTC cannot divest itself of its jurisdiction over the alleged crime of multiple murder.

WHEREFORE, the assailed Orders of the Regional Trial Court of Masbate City, Branch 47, dated December 6, 2005 and January 11, 2006, respectively, in Criminal Case No. 11846 are REVERSED and SET ASIDE. The Regional Trial Court, Branch 47, Masbate City, is DIRECTED to reinstate Criminal Case No. 11846 to its docket and conduct further proceedings thereon with utmost dispatch in light of the foregoing disquisition.

SO ORDERED.

FIRST DIVISION  

CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC. (CREBA),                                        Petitioner,   

- versus -   THE SECRETARY OF AGRARIAN REFORM,                                    Respondent.

  G.R. No. 183409 Present: CORONA, C.J.,     Chairperson,VELASCO, JR.,LEONARDO DE-CASTRO,DEL CASTILLO, andPEREZ, JJ.  Promulgated:   June 18, 2010

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

 D E C I S I O N  PEREZ, J.:  

This case is a Petition for Certiorari and Prohibition (with application for temporary restraining order and/or writ of preliminary injunction) under Rule 65 of the 1997 Revised Rules of Civil Procedure, filed by herein petitioner Chamber of Real Estate and Builders Associations, Inc. (CREBA) seeking to nullify and prohibit the enforcement of Department of Agrarian Reform (DAR) Administrative Order (AO) No. 01-02, as amended by DAR AO No. 05-07, [1] and DAR Memorandum

74

No. 88,[2] for having been issued by the Secretary of Agrarian Reform with grave abuse of discretion amounting to lack or excess of jurisdiction as some provisions of the aforesaid administrative issuances are illegal and unconstitutional.         

Petitioner CREBA, a private non-stock, non-profit corporation duly organized and existing under the laws of the Republic of the Philippines, is the umbrella organization of some 3,500 private corporations, partnerships, single proprietorships and individuals directly or indirectly involved in land and housing development, building and infrastructure construction, materials production and supply, and services in the various related fields of engineering, architecture, community planning and development financing.  The Secretary of Agrarian Reform is named respondent as he is the duly appointive head of the DAR whose administrative issuances are the subject of this petition. 

The Antecedent Facts 

The Secretary of Agrarian Reform issued, on 29 October 1997, DAR AO No. 07-97, [3] entitled “Omnibus Rules and Procedures Governing Conversion of Agricultural Lands to Non-Agricultural Uses,” which consolidated all existing implementing guidelines related to land use conversion.  The aforesaid rules embraced all private agricultural lands regardless of tenurial arrangement and commodity produced, and all untitled agricultural lands and agricultural lands reclassified by Local Government Units (LGUs) into non-agricultural uses after 15 June 1988. 

 Subsequently, on 30 March 1999, the Secretary of Agrarian Reform issued DAR AO No. 01-

99,[4] entitled “Revised Rules and Regulations on the Conversion of Agricultural Lands to Non-agricultural Uses,” amending and updating the previous rules on land use conversion.  Its coverage includes the following agricultural lands, to wit: (1) those to be converted to residential, commercial, industrial, institutional and other non-agricultural purposes; (2) those to be devoted to another type of agricultural activity such as livestock, poultry, and fishpond ─ the effect of which is to exempt the land from the Comprehensive Agrarian Reform Program (CARP) coverage; (3) those to be converted to non-agricultural use other than that previously authorized; and (4) those reclassified to residential, commercial, industrial, or other non-agricultural uses on or after the effectivity of Republic Act No. 6657[5] on 15 June 1988 pursuant to Section 20 [6] of Republic Act No. 7160[7] and other pertinent laws and regulations, and are to be converted to such uses.

 On 28 February 2002, the Secretary of Agrarian Reform issued another Administrative

Order, i.e., DAR AO No. 01-02, entitled “2002 Comprehensive Rules on Land Use Conversion,” which further amended DAR AO No. 07-97 and DAR AO No. 01-99, and repealed all issuances inconsistent therewith. The aforesaid DAR AO No. 01-02 covers all applications for conversion from agricultural to non-agricultural uses or to another agricultural use. 

           Thereafter, on 2 August 2007, the Secretary of Agrarian Reform amended certain provisions[8] of DAR AO No. 01-02 by formulating DAR AO No. 05-07, particularly addressing land conversion in time of exigencies and calamities.                    To address the unabated conversion of prime agricultural lands for real estate development, the Secretary of Agrarian Reform further issued Memorandum No. 88 on 15 April 2008, which temporarily suspended the processing and approval of all land use conversion applications.           By reason thereof, petitioner claims that there is an actual slow down of housing projects, which, in turn, aggravated the housing shortage, unemployment and illegal squatting problems to the substantial prejudice not only of the petitioner and its members but more so of the whole nation.           Hence, this petition. 

  

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The Issues 

In its Memorandum, petitioner posits the following issues:                                                                                                                                                                 I

.   WHETHER THE DAR SECRETARY HAS JURISDICTION OVER LANDS THAT HAVE BEEN RECLASSIFIED AS RESIDENTIAL, COMMERCIAL, INDUSTRIAL, OR FOR OTHER NON-AGRICULTURAL USES.                                                                                                                                       II.   WHETHER THE DAR SECRETARY ACTED IN EXCESS OF HIS JURISDICTION AND GRAVELY ABUSED HIS DISCRETION BY ISSUING AND ENFORCING [DAR AO NO. 01-02, AS AMENDED] WHICH SEEK TO REGULATE RECLASSIFIED III.  WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE LOCAL AUTONOMY OF LOCAL GOVERNMENT UNITS.                                                                                                                                       IV.  WHETHER [DAR AO NO. 01-02, AS AMENDED] VIOLATE[S] THE DUE PROCESS AND EQUAL PROTECTION CLAUSE[S] OF THE CONSTITUTION. 

             V.  WHETHER MEMORANDUM NO. 88 IS A VALID EXERCISE OF POLICE POWER.[9]

  The subject of the submission that the DAR Secretary gravely abused his discretion is AO

No. 01-02, as amended, which states: 

Section 3.  Applicability of Rules. – These guidelines shall apply to all applications for conversion, from agricultural to non-agricultural uses or to another agricultural use, such as:           x x x x             3.4       Conversion of agricultural lands or areas that have been reclassified by the LGU or by way of a Presidential Proclamation, to residential, commercial, industrial, or other non-agricultural uses on or after the effectivity of RA 6657 on 15 June 1988, x x x.  [Emphasis supplied]. Petitioner holds that under Republic Act No. 6657 and Republic Act No. 8435, [10] the term

agricultural lands refers to “lands devoted to or suitable for the cultivation of the soil, planting of crops, growing of fruit trees, raising of livestock, poultry or fish, including the harvesting of such farm products, and other farm activities and practices performed by a farmer in conjunction with such farming operations done by a person whether natural or juridical, and not classified by the law as mineral, forest, residential, commercial or industrial land.”  When the Secretary of Agrarian Reform, however, issued DAR AO No. 01-02, as amended, he included in the definition of agricultural lands “lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988.”   In effect, lands reclassified from agricultural to residential, commercial, industrial, or other non-agricultural uses after 15 June 1988 are considered to be agricultural lands for purposes of conversion, redistribution, or otherwise.   In so doing, petitioner avows that the Secretary of Agrarian Reform acted without jurisdiction as he has no authority to expand or enlarge the legal signification of the term agricultural lands through DAR AO No. 01-02.  Being a mere administrative issuance, it must conform to the statute it seeks to implement, i.e., Republic Act No. 6657, or to the Constitution, otherwise, its validity or constitutionality may be questioned.              In the same breath, petitioner contends that DAR AO No. 01-02, as amended, was made in violation of Section 65[11] of Republic Act No. 6657 because it covers all applications for conversion from agricultural to non-agricultural uses or to other agricultural uses, such as the conversion of agricultural lands or areas that have been reclassified by the LGUs or by way of Presidential Proclamations, to residential, commercial, industrial or other non-agricultural uses on or after 15

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June 1988.  According to petitioner, there is nothing in Section 65 of Republic Act No. 6657 or in any other provision of law that confers to the DAR the jurisdiction or authority to require that non-awarded lands or reclassified lands be submitted to its conversion authority.  Thus, in issuing and enforcing DAR AO No. 01-02, as amended, the Secretary of Agrarian Reform acted with grave abuse of discretion amounting to lack or excess of jurisdiction. 

Petitioner further asseverates that Section 2.19,[12] Article I of DAR AO No. 01-02, as amended, making reclassification of agricultural lands subject to the requirements and procedure for land use conversion, violates Section 20 of Republic Act No. 7160, because it was not provided therein that reclassification by LGUs shall be subject to conversion procedures or requirements, or that the DAR’s approval or clearance must be secured to effect reclassification.  The said Section 2.19 of DAR AO No. 01-02, as amended, also contravenes the constitutional mandate on local autonomy under Section 25,[13] Article II and Section 2,[14] Article X of the 1987 Philippine Constitution.            Petitioner similarly avers that the promulgation and enforcement of DAR AO No. 01-02, as amended, constitute deprivation of liberty and property without due process of law.  There is deprivation of liberty and property without due process of law because under DAR AO No. 01-02, as amended, lands that are not within DAR’s jurisdiction are unjustly, arbitrarily and oppressively prohibited or restricted from legitimate use on pain of administrative and criminal penalties. More so, there is discrimination and violation of the equal protection clause of the Constitution because the aforesaid administrative order is patently biased in favor of the peasantry at the expense of all other sectors of society.           As its final argument, petitioner avows that DAR Memorandum No. 88 is not a valid exercise of police power for it is the prerogative of the legislature and that it is unconstitutional because it suspended the land use conversion without any basis.           The Court’s Ruling 

This petition must be dismissed.           Primarily, although this Court, the Court of Appeals and the Regional Trial Courts have concurrent jurisdiction to issue writs of certiorari, prohibition,mandamus, quo warranto, habeas corpus and injunction, such concurrence does not give the petitioner unrestricted freedom of choice of court forum.[15]  InHeirs of Bertuldo Hinog v. Melicor,[16] citing People v. Cuaresma,[17] this Court made the following pronouncements: 

This Court's original jurisdiction to issue writs of certiorari is not exclusive.  It is shared by this Court with Regional Trial Courts and with the Court of Appeals.  This concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court to which application therefor will be directed.  There is after all a hierarchy of courts.  That hierarchy is determinative of the venue of appeals, and also serves as a general determinant of the appropriate forum for petitions for the extraordinary writs.  A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level (“inferior”) courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals.  A direct invocation of the Supreme Court’s original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition.  This is [an] established policy.  It is a policy necessary to prevent inordinate demands upon the Court’s time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Court’s docket.[18]  (Emphasis supplied.)

 

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 The rationale for this rule is two-fold: (a) it would be an imposition upon the precious time of

this Court; and (b) it would cause an inevitable and resultant delay, intended or otherwise, in the adjudication of cases, which in some instances had to be remanded or referred to the lower court as the proper forum under the rules of procedure, or as better equipped to resolve the issues because this Court is not a trier of facts.[19]

 This Court thus reaffirms the judicial policy that it will not entertain direct resort to it unless

the redress desired cannot be obtained in the appropriate courts, and exceptional and compelling circumstances, such as cases of national interest and of serious implications, justify the availment of the extraordinary remedy of writ ofcertiorari, calling for the exercise of its primary jurisdiction.[20] 

 Exceptional and compelling circumstances were held present in the following cases:

(a) Chavez v. Romulo,[21] on citizens’ right to bear arms; (b) Government of [the] United States of America v. Hon. Purganan,[22] on bail in extradition proceedings; (c) Commission on Elections v. Judge Quijano-Padilla,[23] on government contract involving modernization and computerization of voters’ registration list; (d) Buklod ng Kawaning EIIB v. Hon. Sec. Zamora,[24] on status and existence of a public office; and (e) Hon. Fortich v. Hon. Corona,[25] on the so-called “Win-Win Resolution” of the Office of the President which modified the approval of the conversion to agro-industrial area.[26]

 In the case at bench, petitioner failed to specifically and sufficiently set forth special

and important reasons to justify direct recourse to this Court and why this Court should give due course to this petition in the first instance, hereby failing to fulfill the conditions set forth in Heirs of Bertuldo Hinog v. Melicor.[27]  The present petition should have been initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts.  Failure to do so is sufficient cause for the dismissal of this petition.

Moreover, although the instant petition is styled as a Petition for Certiorari, in essence, it seeks the declaration by this Court of the unconstitutionality or illegality of the questioned DAR AO No. 01-02, as amended, and Memorandum No. 88.  It, thus, partakes of the nature of a Petition for Declaratory Relief over which this Court has only appellate, not original, jurisdiction. [28] Section 5, Article VIII of the 1987 Philippine Constitution provides:

 Sec. 5.  The Supreme Court shall have the following powers: (1)        Exercise original jurisdiction over cases affecting ambassadors, other

public ministers and consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, andhabeas corpus.

 (2)        Review, revise, reverse, modify, or affirm on appeal or certiorari as

the law or the Rules of Court may provide, final judgments and orders of lower courts in:

 (a)        All cases in which the constitutionality or validity of

any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question.  (Emphasis supplied.)

 With that, this Petition must necessarily fail because this Court does not have original

jurisdiction over a Petition for Declaratory Relief even if only questions of law are involved.  Even if the petitioner has properly observed the doctrine of judicial hierarchy, this Petition is

still dismissible. 

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The special civil action for certiorari is intended for the correction of errors of jurisdiction only or grave abuse of discretion amounting to lack or excess of jurisdiction .  Its principal office is only to keep the inferior court within the parameters of its jurisdiction or to prevent it from committing such a grave abuse of discretion amounting to lack or excess of jurisdiction.[29]     

The essential requisites for a Petition for Certiorari under Rule 65 are: (1) the writ is directed against a tribunal, a board, or an officer exercising judicial or quasi-judicial functions; (2) such tribunal, board, or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law.[30] 

 Excess of jurisdiction as distinguished from absence of jurisdiction means that an act,

though within the general power of a tribunal, board or officer, is not authorized and invalid with respect to the particular proceeding, because the conditions which alone authorize the exercise of the general power in respect of it are wanting.[31]  Without jurisdiction means lack or want of legal power, right or authority to hear and determine a cause or causes, considered either in general or with reference to a particular matter.  It means lack of power to exercise authority. [32]  Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction or, in other words, where the power is exercised in an arbitrary manner by reason of passion, prejudice, or personal hostility, and it must be so patent or gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.[33]  

 In the case before this Court, the petitioner fails to meet the above-mentioned requisites for

the proper invocation of a Petition for Certiorari under Rule 65.  The Secretary of Agrarian Reform in issuing the assailed DAR AO No. 01-02, as amended, as well as Memorandum No. 88 did so in accordance with his mandate to implement the land use conversion provisions of Republic Act No. 6657.  In the process, he neither acted in any judicial or quasi-judicial capacity nor assumed unto himself any performance of judicial or quasi-judicial prerogative.  A Petition for Certiorari is a special civil action that may be invoked only against a tribunal, board, or officer exercising judicial functions.  Section 1, Rule 65 of the 1997 Revised Rules of Civil Procedure is explicit on this matter, viz.:

 SECTION 1.  Petition for certiorari. – When any tribunal, board or officer

exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment must be rendered annulling or modifying the proceedings of such tribunal, board or officer.   A tribunal, board, or officer is said to be exercising judicial function where it has the power

to determine what the law is and what the legal rights of the parties are, and then undertakes to determine these questions and adjudicate upon the rights of the parties.  Quasi-judicial function, on the other hand, is “a term which applies to the actions, discretion, etc., of public administrative officers or bodies x x x required to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions from them as a basis for their official action and to exercise discretion of a judicial nature.”[34]

 Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary

that there be a law that gives rise to some specific rights of persons or property under which adverse claims to such rights are made, and the controversy ensuing therefrom is brought before a tribunal, board, or officer clothed with power and authority to determine the law and adjudicate the respective rights of the contending parties.[35]

 

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The Secretary of Agrarian Reform does not fall within the ambit of a tribunal, board, or officer exercising judicial or quasi-judicial functions.  The issuance and enforcement by the Secretary of Agrarian Reform of the questioned DAR AO No. 01-02, as amended, and Memorandum No. 88 were done in the exercise of his quasi-legislative and administrative functions and not of judicial or quasi-judicial functions. In issuing the aforesaid administrative issuances, the Secretary of Agrarian Reform never made any adjudication of rights of the parties.  As such, it can never be said that the Secretary of Agrarian Reform had acted with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing and enforcing DAR AO No. 01-02, as amended, and Memorandum No. 88 for he never exercised any judicial or quasi-judicial functions but merely his quasi-legislative and administrative functions. 

 Furthermore, as this Court has previously discussed, the instant petition in essence seeks

the declaration by this Court of the unconstitutionality or illegality of the questioned DAR AO No. 01-02, as amended, and Memorandum No. 88.  Thus, the adequate and proper remedy for the petitioner therefor is to file a Petition for Declaratory Relief, which this Court has only appellate and not original jurisdiction.  It is beyond the province of certiorari to declare the aforesaid administrative issuances unconstitutional and illegal because certiorari is confined only to the determination of the existence of grave abuse of discretion amounting to lack or excess of jurisdiction.  Petitioner cannot simply allege grave abuse of discretion amounting to lack or excess of jurisdiction and then invoke certiorari to declare the aforesaid administrative issuances unconstitutional and illegal.  Emphasis must be given to the fact that the writ of certiorari dealt with in Rule 65 of the 1997 Revised Rules of Civil Procedure is a prerogative writ, never demandable as a matter of right, “never issued except in the exercise of judicial discretion.”[36] 

 At any rate, even if the Court will set aside procedural infirmities, the instant petition should

still be dismissed. Executive Order No. 129-A[37] vested upon the DAR the responsibility of implementing the

CARP.  Pursuant to the said mandate and to ensure the successful implementation of the CARP, Section 5(c) of the said executive order authorized the DAR to establish and promulgate operational policies, rules and regulations and priorities for agrarian reform implementation.  Section 4(k) thereof authorized the DAR to approve or disapprove the conversion, restructuring or readjustment of agricultural lands into non-agricultural uses.  Similarly, Section 5(l) of the same executive order has given the DAR the exclusive authority to approve or disapprove conversion of agricultural lands for residential, commercial, industrial, and other land uses as may be provided for by law.   Section 7 of the aforesaid executive order clearly provides that “the authority and responsibility for the exercise of the mandate of the [DAR] and the discharge of its powers and functions shall be vested in the Secretary of Agrarian Reform x x x.” 

 Under DAR AO No. 01-02, as amended, “lands not reclassified as residential, commercial,

industrial or other non-agricultural uses before 15 June 1988” have been included in the definition of agricultural lands.  In so doing, the Secretary of Agrarian Reform merely acted within the scope of his authority stated in the aforesaid sections of Executive Order No. 129-A, which is to promulgate rules and regulations for agrarian reform implementation and that includes the authority to define agricultural lands for purposes of land use conversion.  Further, the definition of agricultural lands under DAR AO No. 01-02, as amended, merely refers to the category of agricultural lands that may be the subject for conversion to non-agricultural uses and is not in any way confined to agricultural lands in the context of land redistribution as provided for under Republic Act No. 6657. 

 More so, Department of Justice Opinion No. 44, Series of 1990, which Opinion has been

recognized in many cases decided by this Court, clarified that after the effectivity of Republic Act No. 6657 on 15 June 1988 the DAR has been given the authority to approve land conversion.[38]  Concomitant to such authority, therefore, is the authority to include in the definition of agricultural

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lands “lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988” for purposes of land use conversion.   

In the same vein, the authority of the Secretary of Agrarian Reform to include “lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988” in the definition of agricultural lands finds basis in jurisprudence.  In Ros v. Department of Agrarian Reform,[39] this Court has enunciated that after the passage of Republic Act No. 6657, agricultural lands, though reclassified, have to go through the process of conversion, jurisdiction over which is vested in the DAR.  However, agricultural lands, which are already reclassified before the effectivity of Republic Act No. 6657 which is 15 June 1988, are exempted from conversion.[40]  It bears stressing that the said date of effectivity of Republic Act No. 6657 served as the cut-off period for automatic reclassifications or rezoning of agricultural lands that no longer require any DAR conversion clearance or authority.[41]  It necessarily follows that any reclassification made thereafter can be the subject of DAR’s conversion authority.  Having recognized the DAR’s conversion authority over lands reclassified after 15 June 1988, it can no longer be argued that the Secretary of Agrarian Reform was wrongfully given the authority and power to include “lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988”   in the definition of agricultural lands.  Such inclusion does not unduly expand or enlarge the definition of agricultural lands; instead, it made clear what are the lands that can be the subject of DAR’s conversion authority, thus, serving the very purpose of the land use conversion provisions of Republic Act No. 6657.

           The argument of the petitioner that DAR AO No. 01-02, as amended, was made in violation of Section 65 of Republic Act No. 6657, as it covers even those non-awarded lands and reclassified lands by the LGUs or by way of Presidential Proclamations on or after 15 June 1988 is specious.   As explained in Department of Justice Opinion No. 44, series of 1990, it is true that the DAR’s express power over land use conversion provided for under Section 65 of Republic Act No. 6657 is limited to cases in which agricultural lands already awarded have, after five years, ceased to be economically feasible and sound for agricultural purposes, or the locality has become urbanized and the land will have a greater economic value for residential, commercial or industrial purposes.   To suggest, however, that these are the only instances that the DAR can require conversion clearances would open a loophole in Republic Act No. 6657 which every landowner may use to evade compliance with the agrarian reform program.  It should logically follow, therefore, from the said department’s express duty and function to execute and enforce the said statute that any reclassification of a private land as a residential, commercial or industrial property, on or after the effectivity of Republic Act No. 6657 on 15 June 1988 should first be cleared by the DAR.[42]  

This Court held in Alarcon v. Court of Appeals[43] that reclassification of lands does not suffice.  Conversion and reclassification differ from each other. Conversion is the act of changing the current use of a piece of agricultural land into some other use as approved by the DAR while reclassification is the act of specifying how agricultural lands shall be utilized for non-agricultural uses such as residential, industrial, and commercial, as embodied in the land use plan, subject to the requirements and procedures for land use conversion.  In view thereof, a mere reclassification of an agricultural land does not automatically allow a landowner to change its use.  He has to undergo the process of conversion before he is permitted to use the agricultural land for other purposes.[44] 

 It is clear from the aforesaid distinction between reclassification and conversion that

agricultural lands though reclassified to residential, commercial, industrial or other non-agricultural uses must still undergo the process of conversion before they can be used for the purpose to which they are intended. 

 Nevertheless, emphasis must be given to the fact that DAR’s conversion authority can only

be exercised after the effectivity of Republic Act No. 6657 on 15 June 1988.[45]  The said date served as the cut-off period for automatic reclassification or rezoning of agricultural lands that no longer

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require any DAR conversion clearance or authority.[46]  Thereafter, reclassification of agricultural lands is already subject to DAR’s conversion authority.  Reclassification alone will not suffice to use the agricultural lands for other purposes.  Conversion is needed to change the current use of reclassified agricultural lands.

 It is of no moment whether the reclassification of agricultural lands to residential, commercial,

industrial or other non-agricultural uses was done by the LGUs or by way of Presidential Proclamations because either way they must still undergo conversion process.  It bears stressing that the act of reclassifying agricultural lands to non-agricultural uses simply specifies how agricultural lands shall be utilized for non-agricultural uses and does not automatically convert agricultural lands to non-agricultural uses or for other purposes.  As explained in DAR Memorandum Circular No. 7, Series of 1994, cited in the 2009 case of Roxas & Company, Inc. v. DAMBA-NFSW and the Department of Agrarian Reform,[47] reclassification of lands denotes their allocation into some specific use and providing for the manner of their utilization and disposition or the act of specifying how agricultural lands shall be utilized for non-agricultural uses such as residential, industrial, or commercial, as embodied in the land use plan.  For reclassified agricultural lands, therefore, to be used for the purpose to which they are intended there is still a need to change the current use thereof through the process of conversion.  The authority to do so is vested in the DAR, which is mandated to preserve and maintain agricultural lands with increased productivity.  Thus, notwithstanding the reclassification of agricultural lands to non-agricultural uses, they must still undergo conversion before they can be used for other purposes.  

Even reclassification of agricultural lands by way of Presidential Proclamations to non-agricultural uses, such as school sites, needs conversion clearance from the DAR.  We reiterate that reclassification is different from conversion.  Reclassification alone will not suffice and does not automatically allow the landowner to change its use.  It must still undergo conversion process before the landowner can use such agricultural lands for such purpose.[48]  Reclassification of agricultural lands is one thing, conversion is another.  Agricultural lands that are reclassified to non-agricultural uses do not ipso facto allow the landowner thereof to use the same for such purpose.  Stated differently, despite having reclassified into school sites, the landowner of such reclassified agricultural lands must apply for conversion before the DAR in order to use the same for the said purpose.  

 Any reclassification, therefore, of agricultural lands to residential, commercial, industrial or

other non-agricultural uses either by the LGUs or by way of Presidential Proclamations enacted on or after 15 June 1988 must undergo the process of conversion, despite having undergone reclassification, before agricultural lands may be used for other purposes.

 It is different, however, when through Presidential Proclamations public agricultural lands

have been reserved in whole or in part for public use or purpose, i.e., public school, etc., because in such a case, conversion is no longer necessary.  As held in Republic v. Estonilo,[49] only a positive act of the President is needed to segregate or reserve a piece of land of the public domain for a public purpose.  As such, reservation of public agricultural lands for public use or purpose in effect converted the same to such use without undergoing any conversion process and that they must be actually, directly and exclusively used for such public purpose for which they have been reserved, otherwise, they will be segregated from the reservations and transferred to the DAR for distribution to qualified beneficiaries under the CARP.[50]  More so, public agricultural lands already reserved for public use or purpose no longer form part of the alienable and disposable lands of the public domain suitable for agriculture.[51]  Hence, they are outside the coverage of the CARP and it logically follows that they are also beyond the conversion authority of the DAR.                     

Clearly from the foregoing, the Secretary of Agrarian Reform did not act without jurisdiction or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction in (1) including lands not reclassified as residential, commercial, industrial or other non-agricultural uses before 15 June 1988 in the definition of agricultural lands under DAR AO No. 01-

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02, as amended, and; (2) issuing and enforcing DAR AO No. 01-02, as amended, subjecting to DAR’s jurisdiction for conversion lands which had already been reclassified as residential, commercial, industrial or for other non-agricultural uses on or after 15 June 1988. 

Similarly, DAR AO No. 01-02, as amended, providing that the reclassification of agricultural lands by LGUs shall be subject to the requirements of land use conversion procedure or that DAR’s approval or clearance must be secured to effect reclassification, did not violate the autonomy of the LGUs. 

 Section 20 of Republic Act No. 7160 states that:           SECTION 20.  Reclassification of Lands. – (a) A city or municipality may, through an ordinance passed by the sanggunian after conducting public hearings for the purpose, authorize the reclassification of agricultural lands and provide for the manner of their utilization or disposition in the following cases: (1) when the land ceases to be economically feasible and sound for agricultural purposes as determined by the Department of Agriculture or (2) where the land shall have substantially greater economic value for residential, commercial, or industrial purposes, as determined by the sanggunian concerned: Provided, That such reclassification shall be limited to the following percentage of the total agricultural land area at the time of the passage of the ordinance:             x x x x                          (3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That agricultural lands distributed to agrarian reform beneficiaries pursuant to Republic Act Numbered Sixty-six hundred fifty-seven (R.A. No. 6657), otherwise known as “The Comprehensive Agrarian Reform Law,” shall not be affected by the said reclassification and the conversion of such lands into other purposes shall be governed by Section 65 of said Act.             x x x x                          (e) Nothing in this Section shall be construed as repealing, amending, or modifying in any manner the provisions of R.A. No. 6657.  

          The aforequoted provisions of law show that the power of the LGUs to reclassify agricultural lands is not absolute.  The authority of the DAR to approve conversion of agricultural lands covered by Republic Act No. 6657 to non-agricultural uses has been validly recognized by said Section 20 of Republic Act No. 7160 by explicitly providing therein that, “nothing in this section shall be construed as repealing or modifying in any manner the provisions of Republic Act No. 6657.” 

DAR AO No. 01-02, as amended, does not also violate the due process clause, as well as the equal protection clause of the Constitution.  In providing administrative and criminal penalties in the said administrative order, the Secretary of Agrarian Reform simply implements the provisions of Sections 73 and 74 of Republic Act No. 6657, thus:

 Sec. 73.  Prohibited Acts and Omissions. – The following are

prohibited:           

x x x x                         (c) The conversion by any landowner of his agricultural land into any non-agricultural use with intent to avoid the application of this Act to his landholdings and to disposes his tenant farmers of the land tilled by them;

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x x x x            (f) The sale, transfer or conveyance by a beneficiary of the right to use or any other usufructuary right over the land he acquired by virtue of being a beneficiary, in order to circumvent the provisions of this Act.

x x x xSec. 74. Penalties. ─ Any person who knowingly or willfully violates the

provisions of this Act shall be punished by imprisonment of not less than one (1) month to not more than three (3) years or a fine of not less than one thousand pesos (P1,000.00) and not more than fifteen thousand pesos (P15,000.00), or both, at the discretion of the court. 

If the offender is a corporation or association, the officer responsible therefor shall be criminally liable.

  

And Section 11 of Republic Act No. 8435, which specifically provides: 

Sec. 11. Penalty for Agricultural Inactivity and Premature Conversion. – x x x.Any person found guilty of premature or illegal conversion shall be penalized

with imprisonment of two (2) to six (6) years, or a fine equivalent to one hundred percent (100%) of the government's investment cost, or both, at the discretion of the court, and an accessory penalty of forfeiture of the land and any improvement thereon.

In addition, the DAR may impose the following penalties, after determining, in an administrative proceedings, that violation of this law has been committed:

a. Consolation or withdrawal of the authorization for land use conversion; andb. Blacklisting, or automatic disapproval of pending and subsequent

conversion applications that they may file with the DAR. 

Contrary to petitioner’s assertions, the administrative and criminal penalties provided for under DAR AO No. 01-02, as amended, are imposed upon the illegal or premature conversion of lands within DAR’s jurisdiction, i.e., “lands not reclassified as residential, commercial, industrial or for other non-agricultural uses before 15 June 1998.”

           The petitioner’s argument that DAR Memorandum No. 88 is unconstitutional, as it suspends the land use conversion without any basis, stands on hollow ground. 

It bears emphasis that said Memorandum No. 88 was issued upon the instruction of the President in order to address the unabated conversion of prime agricultural lands for real estate development because of the   worsening rice shortage in the country at that time. Such measure was made in order to ensure that there are enough agricultural lands in which rice cultivation and production may be carried into.  The issuance of said Memorandum No. 88 was made pursuant to the general welfare of the public, thus, it cannot be argued that it was made without any basis. 

 WHEREFORE, premises considered, the instant Petition for Certiorari is DISMISSED.  Costs

against petitioner. 

SO ORDERED. 

FIRST DIVISION  

NATIONAL WATER RESOURCES BOARD G.R. No. 186450    

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(NWRB),                                 Petitioner,                    - versus -    A. L. ANG NETWORK, INC.,                                   Respondent.

 Present: PUNO, C.J.,CARPIO MORALES,LEONARDO-DE CASTRO,BERSAMIN, andVILLARAMA, JR., JJ. Promulgated:

                            April 8, 2010

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

D E C I S I O N CARPIO MORALES, J.: 

In issue is whether Regional Trial Courts have jurisdiction over appeals from decisions, resolutions or orders of the National Water Resources Board (petitioner).

 A.L. Ang Network (respondent) filed on January 23, 2003 an application for a Certificate of

Public Convenience (CPC) with petitioner to operate and maintain a water service system in Alijis, Bacolod City.

 Bacolod City Water District (BACIWA) opposed respondent’s application on the ground that it

is the only government agency authorized to operate a water service system within the city.[1]

 By Decision of August 20, 2003, petitioner granted respondent’s CPC application.  BACIWA

moved to have the decision reconsidered, contending that its right to due process was violated when it was not allowed to present evidence in support of its opposition.[2] 

           Petitioner reconsidered its Decision and allowed BACIWA to present evidence,[3] drawing respondent to file a petition for certiorari with the Regional Trial Court (RTC) of Bacolod City against petitioner and BACIWA.  Petitioner moved to dismiss the petition, arguing that the proper recourse of respondent was to the Court of Appeals, citing Rule 43 of the Rules of Court.            The RTC, by Order of April 15, 2005,[4] dismissed respondent’s petition for lack of jurisdiction, holding that it is the Court of Appeals which has “exclusive appellate jurisdiction over all final judgments, decisions, resolutions, order[s] or awards of . . . quasi-judicial agencies, instrumentalities, boards or commission[s] . . . except those within the appellate jurisdiction of the Supreme Court . . . .”  Thus the RTC explained: 

Art. 89 of P.D. 1067 having been long repealed by BP 129, as amended, which has effectively and explicitly removed the Regional Trial Courts’ appellate jurisdiction over the decisions, resolutions, order[s] or awards of quasi-judicial agencies such as [petitioner] NWRB, and vested with the Court of Appeals, very clearly now, this Court has no jurisdiction over this instant petition.  

 Its motion for reconsideration having been denied, respondent filed a petition for certiorari at

the Court of Appeals, which, by Decision of January 25, 2008, [5] annulled   and   set aside   the RTC April 15, 2005, holding that it is the RTC which has jurisdiction over appeals from petitioner’s decisions.  Thus the appellate court discoursed.

 

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In the analogous case of BF Northwest Homeowners Association, Inc. vs. Intermediate Appellate Court[,] the Supreme Court . . . categorically pronounced the RTC’s jurisdiction over appeals from the decisions of the NWRB consistent with Article 89 of P.D. No. 1067 and ratiocinated in this wise: 

 x x x x.

 The logical conclusion, therefore, is that jurisdiction over actions

for annulment of NWRC decisions lies with the Regional Trial Courts, particularly, when we take note of the fact that the appellate jurisdiction of the Regional Trial Court over NWRC decisions covers such broad and all embracing grounds as grave abuse of discretion, questions of law, and questions of fact and law (Art. 89, P.D. No. 1067).  This conclusion is also in keeping with the Judiciary Reorganization Act of 1980, which vests Regional Trial Courts with original jurisdiction to issue writs of certiorari, prohibition, mandamus, etc. (Sec. 21 [1], B.P. Blg. 129) relating to acts or omissions of an inferior court (Sec. 4, Rule 65, Rules of Court).

 x x x x. 

Similarly, in Tanjay Water District vs. Pedro Gabaton, the Supreme Court conformably ruled, viz:

 “Inasmuch as Civil Case No. 8144 involves the appropriation,

utilization and control of water, We hold that the jurisdiction to hear and decide the dispute in the first instance, pertains to the Water Resources Council as provided in PD No. 1067 which is the special law on the subject.  The Court of First Instance (now Regional Trial Court) has only appellate jurisdiction over the case.” 

 Based on the foregoing jurisprudence,  there is no doubt that [petitioner]

NWRB is mistaken in its assertion.     As no repeal is expressly made,   Article 89 of P.D. No. 1067   is certainly meant to be   an exception to the jurisdiction of the Court of Appeals over appeals or petitions for certiorari of the decisions of quasi-judicial bodies .     This finds harmony with Paragraph 2, Section 4, Rule 65 of the Rules of Court wherein it is stated that, “If it involves the acts of a quasi-judicial agency, unless otherwise provided by law or these rules, the petition shall be filed in and cognizable only by the Court of Appeals.”  Evidently, not all petitions for certiorari under Rule 65 involving the decisions of quasi-judicial agencies must be filed with the Court of Appeals.  The rule admits of some exceptions as plainly provided by the phrase “unless otherwise provided by law or these rules” and Article 89 of P.D. No. 1067 is verily an example of these exceptions.  (italics and emphasis partly in the original; underscoring supplied)           

  Petitioner’s motion for reconsideration having been denied by the appellate court by

Resolution of February 9, 2009,[6] petitioner filed the present petition for review, contending that:   THE REGIONAL TRIAL COURT HAS NO CERTIORARI JURISDICTION OVER THE [PETITIONER] SINCE SECTION 89, PD NO. 1067, REGARDING APPEALS, HAS BEEN SUPERSEDED AND REPEALED BY [ BATAS PAMBANSA BILANG ] 129 AND THE RULES OF COURT.  FURTHERMORE, PD 1067 ITSELF DOES NOT CONTEMPLATE THAT THE REGIONAL TRIAL COURT SHOULD HAVE CERTIORARI JURISDICTION OVER THE [PETITIONER].[7]  (underscoring supplied) 

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 Petitioner maintains that the RTC does not have jurisdiction over a petition for certiorari and

prohibition to annul or modify its acts or omissions as a quasi-judicial agency.  Citing Section 4 of Rule 65 of the Rules of Court, petitioner contends that there is no law or rule which requires the filing of a petition for certiorari over its acts or omissions in any other court or tribunal other than the Court of Appeals.[8]   

 Petitioner goes on to fault the appellate court in holding that Batas Pambansa Bilang 129

(BP 129) or the Judiciary Reorganization Act did not expressly repeal Article 89 of Presidential Decree No. 1067 (PD 1067) otherwise known as the Water Code of the Philippines.[9] 

  Respondent, on the other hand, maintains the correctness of the assailed decision of the

appellate court. The petition is impressed with merit. Section 9 (1) of BP 129 granted the Court of Appeals (then known as the Intermediate

Appellate Court) original jurisdiction to issue writs of mandamus,prohibition, certiorari, habeas corpus and quo warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction.[10] 

 Since the appellate court has exclusive appellate jurisdiction over quasi-judicial agencies

under Rule 43[11] of the Rules of Court, petitions for writs of certiorari, prohibition or mandamus against the acts and omissions of quasi-judicial agencies, like petitioner, should be filed with it.   This is what Rule 65 of the Rules imposes for procedural uniformity.  The only exception to this instruction is when the law or the Rules itself directs otherwise, as cited in Section 4, Rule 65. [12]  The appellate court’s construction that Article 89 of PD 1067, which reads:

 ART. 89.          The decisions of the [NWRB] on water rights controversies may be appealed to the [RTC] of the province where the subject matter of the controversy is situated within fifteen (15) days from the date the party appealing receives a copy of the decision, on any of the following grounds: (1) grave abuse of discretion; (2) question of law; and (3) questions of fact and law (emphasis and underscoring supplied), 

 is such an exception, is erroneous.  

Article 89 of PD 1067 had long been rendered inoperative by the passage of BP 129.  Aside from delineating the jurisdictions of the Court of Appeals and the RTCs, Section 47 of BP 129 repealed or modified:        

 x x x. [t]he provisions of Republic Act No. 296, otherwise known as the

Judiciary Act of 1948, as amended, of Republic Act No. 5179, as amended, of the Rules of Court, and of all other statutes, letters of instructions and general orders or parts thereof, inconsistent with the provisions of this Act x x x. (emphasis and underscoring supplied)

  The general repealing clause under Section 47 “predicates the intended repeal under the condition that a substantial conflict must be found in existing and prior acts.”[13]

  In enacting BP 129, the Batasang Pambansa was presumed to have knowledge of the provision of Article 89 of P.D. No. 1067 and to have intended to change it. [14]  The legislative intent to repeal Article 89 is clear and manifest given the scope and purpose of BP 129, one of which is to

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provide a homogeneous procedure for the review of adjudications of quasi-judicial entities to the Court of Appeals. 

 More importantly, what Article 89 of PD 1067 conferred to the RTC was the power of review

on appeal the decisions of petitioner.  It appears that the appellate court gave significant consideration to the ground of “grave abuse of discretion” to thus hold that the RTC has certiorari jurisdiction over petitioner’s decisions.  A reading of said Article 89 shows, however, that it only made “grave abuse of discretion” as another ground to invoke in an ordinary appeal to the RTC.  Indeed, the provision was unique to the Water Code at the time of its application in 1976.        

 The issuance of BP 129, specifically Section 9 (Jurisdiction of the Court of Appeals, then

known as Intermediate Appellate Court), and the subsequent formulation of the Rules, clarified and delineated the appellate and certiorari jurisdictions of the Court of Appeals over adjudications of quasi-judicial bodies.  Grave abuse of discretion may be invoked before the appellate court as a ground for an error of jurisdiction.

 It bears noting that, in the present case, respondent assailed petitioner’s order

via certiorari before the RTC, invoking grave abuse of discretion amounting to lack or excess of jurisdiction as ground-basis thereof.  In other words, it invoked such ground not for an error of judgment.                 

 While Section 9 (3) of BP 129[15] and Section 1 of Rule 43 of the Rules of Court[16] does not

list petitioner as “among” the quasi-judicial agencies whose final judgments, orders, resolutions or awards are appealable to the appellate court, it is non sequitur to hold that the Court of Appeals has no appellate jurisdiction over petitioner’s judgments, orders, resolutions or awards.  It is settled that the list of quasi-judicial agencies specifically mentioned in Rule 43 is not meant to be exclusive.[17]  The employment of the word “among” clearly instructs so.

 BF Northwest Homeowners Association v. Intermediate Appellate Court,[18] a 1987 case cited

by the appellate court to support its ruling that RTCs have jurisdiction over judgments, orders, resolutions or awards of petitioner, is no longer controlling in light of the definitive instruction of Rule 43 of the Revised Rules of Court.      

 Tanjay Water District v. Gabaton[19] is not in point either as the issue raised therein was

which between the RTC and the then National Water Resources Council had jurisdiction over disputes in the appropriation, utilization and control of water. 

 IN FINE, certiorari and appellate jurisdiction over adjudications of petitioner properly

belongs to the Court of Appeals.      WHEREFORE, the challenged Decision and Resolution of the Court of Appeals

are REVERSED and SET ASIDE.  The April 15, 2005 Order of the Regional Trial Court of Bacolod City dismissing petitioner’s petition for lack of jurisdiction is UPHELD.

 No costs.  SO ORDERED.        

SECOND DIVISION  

88

LAND BANK OF THE PHILIPPINES,  G.R. No. 180384                             Petitioner,                                                                   Present:

                                                                                                   CARPIO, J., Chairperson,          - versus -                                             BRION,

  DEL CASTILLO,  ABAD, and  PEREZ, JJ.

CORAZON M. VILLEGAS,Respondent.

 x ------------------------------------------------ x LAND BANK OF THE PHILIPPINES,  G.R. No. 180891                             Petitioner,           - versus - HEIRS OF CATALINO V. NOEL          Promulgated:and PROCULA P. SY,

Respondents.                    March 26, 2010 x --------------------------------------------------------------------------------------- x 

DECISION ABAD, J.:           These consolidated cases[1] are about the jurisdiction of a Regional Trial Court (RTC), acting as a Special Agrarian Court, over just compensation cases involving agricultural lands located outside its regular territorial jurisdiction but within the province where it is designated as agrarian court under the Comprehensive Agrarian Reform Law of 1988. 

The Facts and the Case           Petitioner Land Bank of the Philippines (Land Bank) filed cases for determination of just compensation against respondent Corazon M. Villegas in Civil Case 2007-14174 and respondent heirs of Catalino V. Noel and Procula P. Sy in Civil Case 2007-14193 before the RTC of Dumaguete City, Branch 32, sitting as a Special Agrarian Court for the province of Negros Oriental.  Respondent Villegas’ property was in Hibaiyo, Guihulngan City, Negros Oriental, while respondent heirs’ land was in Nangca, Bayawan City, Negros Oriental.  These lands happened to be outside the regular territorial jurisdiction of RTC Branch 32 of Dumaguete City.           On September 13, 2007 RTC, Branch 32 dismissed Civil Case 2007-14174 for lack of jurisdiction.[2]  It ruled that, although it had been designated Special Agrarian Court for Negros Oriental, the designation did not expand its territorial jurisdiction to hear agrarian cases under the territorial jurisdiction of the RTC, Branch 64 of Guihulngan City where respondent Villegas’ property can be found.           On November 16, 2007 RTC, Branch 32 also dismissed Civil Case 2007-14193 for lack of jurisdiction.  It pointed out that RTC, Branch 63 of Bayawan City had jurisdiction over the case since respondent heirs’ property was within the latter court’s territorial jurisdiction. 

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          Petitioner Land Bank moved for the reconsideration of the dismissal of the two cases but RTC, Branch 32 denied both motions.[3]  Aggrieved, Land Bank directly filed this petitions for certiorari[4] before this Court, raising a purely question of law. 

Sole Question Presented 

The sole question presented in these cases is whether or not an RTC, acting as Special Agrarian Court, has jurisdiction over just compensation cases involving agricultural lands located outside its regular jurisdiction but within the province where it is designated as an agrarian court under the Comprehensive Agrarian Reform Law of 1998. 

The Court’s Ruling           The RTC, Branch 32 based its order on Deputy Court Administrator (DCA) Zenaida Elepaño’s opinion that single sala courts have jurisdiction over agrarian cases involving lands located within its territorial jurisdiction.  An RTC branch acting as a special agrarian court, she claimed, did not have expanded territorial jurisdiction.  DCA Elepaño said: 

            x x x [B]eing a single sala court, the Regional Trial Court, Branch 64, Guihulngan, Negros Oriental, has jurisdiction over all cases, including agrarian cases, cognizable by the Regional Trial Court emanating from the geographical areas within its territorial jurisdiction.             Further, the jurisdiction of the Special Agrarian Courts over agrarian cases is co-extensive with its territorial jurisdiction.  Administrative Order No. 80 dated July 18, 1989, as amended by Administrative Order No. 80A-90 dated February 23, 1990, did not expand the territorial jurisdiction of the courts designated as Special Agrarian Courts.[5]

           Respondent Villegas[6] adopts DCA Elepaño’s view.  Villegas points out that the designation of RTC, Branch 32 as a Special Agrarian Court did not expand its territorial jurisdiction.  Although it has been designated Special Agrarian Court for the Province of Negros Oriental, its jurisdiction as an RTC did not cover the whole province.    

Respondent Villegas adds that, in hearing just compensation cases, RTC, Branch 64 in Guihulngan City should be no different from the situation of other singlesala courts that concurrently hear drugs and family-related cases even as the Supreme Court has designated family and drugs courts in Dumaguete City within the same province.  Further, Guihulngan City is more than 100 kilometers from Dumaguete City where RTC, Branch 32 sits.  For practical considerations, RTC, Branch 64 ofGuihulngan City should hear and decide the case. 

For their part, on June 19, 2009 respondent heirs of Noel informed[7] the Court that petitioner Land Bank had already paid them for their land.  Consequently, they have no further interest in the outcome of the case.  It is not clear, however, if the trial court had already approved a settlement.

           “Jurisdiction” is the court’s authority to hear and determine a case.  The court’s jurisdiction over the nature and subject matter of an action is conferred by law. [8]  In this case, the law that confers jurisdiction on Special Agrarian Courts designated by the Supreme Court in every province is Republic Act (R.A.) 6657 or theComprehensive Agrarian Reform Law of 1988.  Sections 56 and 57 are the relevant provisions:

SEC. 56. Special Agrarian Court. - The Supreme Court shall designate at least one (1) branch of the Regional Trial Court (RTC) within each province to act as aSpecial Agrarian Court. 

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            The Supreme Court may designate more branches to constitute such additional Special Agrarian Courts as may be necessary to cope with the number of agrarian cases in each province. In the designation, the Supreme Court shall give preference to the Regional Trial Courts which have been assigned to handle agrarian cases or whose presiding judges were former judges of the defunct Court of Agrarian Relations.             The Regional Trial Court (RTC) judges assigned to said courts shall exercise said special jurisdiction in addition to the regular jurisdiction of their respective courts.               SEC. 57. Special Jurisdiction. - The Special Agrarian Courts shall have original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners, and the prosecution of all criminal offenses under this Act. The Rules of Court shall apply to all proceedings before the Special Agrarian Courts unless modified by this Act.             The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) days from submission of the case for decision.

           The law is clear.  A branch of an RTC designated as a Special Agrarian Court for a province has the original and exclusive jurisdiction over all petitions for the determination of just compensation in that province.  In Republic v. Court of Appeals,[9] the Supreme Court ruled that Special Agrarian Courts have original and exclusive jurisdiction over two categories of cases: (1) all petitions for the determination of just compensation to landowners, and (2) the prosecution of all criminal offenses under R.A. 6657. 

By “special” jurisdiction, Special Agrarian Courts exercise power in addition to or over and above the ordinary jurisdiction of the RTC, such as taking cognizance of suits involving agricultural lands located outside their regular territorial jurisdiction, so long as they are within the province where they sit as Special Agrarian Courts.           R.A. 6657 requires the designation by the Supreme Court before an RTC Branch can function as a Special Agrarian Court.  The Supreme Court has not designated the single sala courts of RTC, Branch 64 of Guihulngan City and RTC, Branch 63 of Bayawan City as Special Agrarian Courts.  Consequently, they cannot hear just compensation cases just because the lands subject of such cases happen to be within their territorial jurisdiction.            Since RTC, Branch 32 of Dumaguete City is the designated Special Agrarian Court for the province of Negros Oriental, it has jurisdiction over all cases for determination of just compensation involving agricultural lands within that province, regardless of whether or not those properties are outside its regular territorial jurisdiction.           WHEREFORE, the Court GRANTS the petitions, SETS ASIDE the orders of the Regional Trial Court, Branch 32 of Dumaguete City dated September 13, 2007 and October 30, 2007 in Civil Case 2007-14174, entitled Land Bank of the Philippines v. Corazon Villegas, and its orders dated November 16, 2007 and December 14, 2007 in Civil Case 2007-14193, entitled Land Bank of the Philippines v. Heirs of Catalino V. Noel and Procula P. Sy, which orders dismissed the cases before it for lack of jurisdiction.  Further, the Court DIRECTS the Regional Trial Court, Branch 32 of Dumaguete City to immediately hear and decide the two cases unless a compromise agreement has in the meantime been approved in the latter case.           SO ORDERED.

91

Republic of the PhilippinesSupreme Court

Manila                                                                                                  

EN BANC  

MINERVA GOMEZ-CASTILLO         Petitioner,

                         -versus -         COMISSION ON ELECTIONSand STRIKE B. REVILLA,

             Respondents.

  G.R. No. 187231    Present: 

CORONA, C.J.,CARPIO,CARPIO MORALES,VELASCO, JR.,NACHURA,LEONARDO-DE CASTRO,BRION,PERALTA,BERSAMIN,DEL CASTILLO,ABAD,VILLARAMA, JR.,PEREZ, andMENDOZA, JJ.: Promulgated: June 22, 2010

x-----------------------------------------------------------------------------------------xD E C I S I O N

          

BERSAMIN, J.:           Petitioner Minerva Gomez-Castillo (Castillo) hereby seeks to nullify the orders dated January 30, 2009 and March 11, 2009[1] issued in EAC No. A-01-2009 by the Commission on Elections (COMELEC).

   

Antecedents 

          Castillo and respondent Strike P. Revilla ran for Municipal Mayor of Bacoor, Cavite during the May 14, 2007 local elections. After the Municipal Board of Canvassers proclaimed Revilla as the

92

elected Municipal Mayor of Bacoor, Cavite, Castillo filed an Election Protest Ad Cautelam[2] in the Regional Trial Court (RTC) in Bacoor, Cavite, which was eventually raffled to Branch 19.           Through his Answer, Revilla sought the dismissal of the election protest, alleging that it was filed in the wrong Branch of the RTC. He pointed out that Supreme Court Administrative Order (SCAO) No. 54-2007 designated Branch 22 of the RTC in Imus, Cavite and Branch 88 of the RTC in Cavite City to hear, try and decide election contests involving municipal officials in Cavite; and that contrary to SCAO No. 54-2007, Castillo filed his protest in the RTC in Bacoor, Cavite, which was not the proper court.           On November 21, 2008, Branch 19 dismissed Castillo’s election protest for being violative of SCAO No. 54-2007.           On December 23, 2008, Castillo presented a notice of appeal.[3]  Thereupon, the RTC ordered that the complete records of the protest be forwarded to the Election Contests Adjudication Department (ECAD) of the COMELEC.[4]

 The First Division of the COMELEC dismissed the appeal for being brought beyond the five-

day reglementary period, noting that although Castillo had received the November 21, 2008 order of the RTC on December 15 , 2008, she filed her notice of appeal on December 23, 2008, a day too late to appeal, to wit: 

       Pursuant to Section 3, Rule 22 of the COMELEC Rules of Procedure which requires the appellant to file her notice of appeal “within five (5) days after promulgation of the decision of the court xxx” and considering further that jurisprudence holds that perfection of an appeal in the manner and within the period laid down by law is not only mandatory butJURISDICTIONAL, this Commission, First Division, RESOLVES  to DISMISS the instant appeal for appellant's failure to file her Notice of Appeal within the five (5) day reglementary period.             SO ORDERED.[5]

         Castillo moved for the reconsideration of the dismissal of her appeal, but the COMELEC

denied the motion because she did not pay the motion fees required under Sec. 7(f), Rule 40 of the COMELEC Rules of Procedure, as amended by COMELEC Resolution No. 02-0130, viz:

          The “Motion for Reconsideration” filed by protestant-appellant Minerva G. Castillo, thru registered mail on 13 February 2009 and received by this Commission on 4 March 2009, seeking reconsideration of the Commission's (First Division) Order dated 30 January 2009, is hereby DENIED for failure of the movant to pay the necessary motion fees under Sec. 7(f), Rule 40 of the Comelec Rules of Procedure[6] as amended by Comelec Resolution no. 02-0130.[7]

         Castillo has brought the present recourse, contending that the COMELEC’s orders

dismissing her appeal and denying her motion for reconsideration were issued with grave abuse of discretion amounting to lack or excess of jurisdiction.  

Parties’ Arguments 

          Castillo insists that her notice of appeal was seasonably filed; otherwise, the RTC would not have given due course to his appeal; that Section 3, Rule 22 of the COMELEC Rules of Procedure, cited in the assailed order dated January 30, 2009, did not apply to her case, because Section 2 of Rule I of the COMELEC Rules of Procedure provides that: 

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       Sec. 2. Applicability.- These rules, except Part VI, shall apply to all actions and proceedings brought before the Commission. Part VI shall apply to election contests and Quo Warrantocases cognizable by courts of general jurisdiction. 

that the COMELEC Rules of Procedure applied only to actions and proceedings brought before the COMELEC, not to actions or proceedings originating in courts of general jurisdiction; that even assuming that the appeal was belatedly filed, the rules on election contests should be liberally construed to the end that mere technical objections would not defeat the will of the people in the choice of public officers; that the Court relaxed on  numerous occasions the application of the rules in order to give due course to belated appeals upon strong and compelling reasons; that an electoral contest like hers was imbued with public interest, because it involved the paramount need to clarify the real choice of the electorate; that Section 4 of Rule I of the COMELEC Rules of Procedure even allows the COMELEC to suspend its own rules of procedure in order to obtain a speedy disposition of all matters pending before the COMELEC; and that the COMELEC should not have dismissed hermotion for reconsideration for her mere failure to pay the corresponding filing fee, but should have considered the soundness of her argument to the effect that SCAO No. 54-2007 continued to vest jurisdiction to try and decide election contest involving elective municipal officials in the RTC as a whole, rendering the designation of the RTC branches to handle election protests akin to a designation of venue.          Castillo further insists that Section 12 of Rule 2 of the COMELEC Rules of Procedure provides that assignment of cases to the specially designated courts should be done exclusively by raffle conducted by the executive judge or by the judges designated by the Supreme Court; and that her protest was thus duly raffled to the RTC in Bacoor, Cavite, considering that SCAO 54-2007 should be construed as a permissive rule that cannot supersede the general rule that jurisdiction over election contests is vested in the RTC.                    In his comment,[8] Revilla submits that the COMELEC correctly dismissed Castillo’s appeal for being filed beyond the five-day reglementary period prescribed in Section 3 of Rule 22 of the COMELEC Rules of Procedure, thus: 

       Section 3. Notice of Appeal. - Within five (5) days after promulgation of the decision of the court, the aggrieved party may filed with said court a notice of appeal, and serve a copy thereof upon the attorney of record of the adverse party.

         that A.M. No. 07-4-15-SC, otherwise known as The Rules of Procedure in Election Contests Involving Elective Municipal and Barangay Officials, clearly and categorically directed:

        Section 8. Appeal. - An aggrieved party may appeal the decision to the commission on Elections, within five days after promulgation, by filing a notice of appeal with the court that rendered the decision, with copy served on the adverse counsel or party if not represented by counsel. 

         that the period for filing an appeal is not a mere technicality of law or procedure and the right to appeal is merely a statutory privilege that may be exercised only in the manner prescribed by the law; that the notice of appeal, even on the assumption that it was filed on time, still remained futile due to the petitioner’s failure to pay the corresponding fee for the motion for reconsideration; that the failure to pay the filing fee rendered the motion for reconsideration a mere scrap of paper, because it prevented the COMELEC from acquiring jurisdiction over the protest; and that the COMELEC could not be faulted for applying its procedural rules to achieve a just and expeditious determination of every proceeding brought before it. 

Issues 

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          Does Section 13 of Rule 2 of A.M. No. 07-4-15-SC designate the RTC Branch that has jurisdiction over an election contest, or does it merely designate the proper venue for filing? 

In case the RTC was incorrect, is the error enough to warrant the reversal of its order of dismissal despite its having attained finality?  

Ruling  

          The petition has no merit. 

AError of Petitioner in filing the protest in

RTC in Bacoor, not jurisdictional            It is well-settled that jurisdiction is conferred by law. As such, jurisdiction cannot be fixed by the will of the parties; nor be acquired through waiver nor enlarged by the omission of the parties; nor conferred by any acquiescence of the court. The allocation of jurisdiction is vested in Congress, and cannot be delegated to another office or agency of the Government. 

The Rules of Court does not define jurisdictional boundaries of the courts. In promulgating the Rules of Court, the Supreme Court is circumscribed by the zone properly denominated as the promulgation of rules concerning pleading, practice, and procedure in all courts; [9] consequently, the Rules of Court can only determine the means, ways or manner in which said jurisdiction, as fixed by the Constitution and acts of Congress, shall be exercised. The Rules of Court yields to the substantive law in determining jurisdiction.[10]

           The jurisdiction over election contests involving elective municipal officials has been vested in the RTC by Section 251, Batas Pambansa Blg. 881 (Omnibus Election Code).[11]  On the other hand, A.M. No. 07-4-15-SC, by specifying the proper venue where such cases may be filed and heard, only spelled out the manner by which an RTC with jurisdiction exercises such jurisdiction. Like other rules on venue, A.M. No. 07-4-15-SC was designed to ensure a just and orderly administration of justice,[12] and is permissive, because it was enacted to ensure the exclusive and speedy disposition of election protests and petitions for quo warranto involving elective municipal officials.[13]

           Castillo’s filing her protest in the RTC in Bacoor, Cavite amounted only to a wrong choice of venue. Hence, the dismissal of the protest by Branch 19 constituted plain error, considering that her wrong choice did not affect the jurisdiction of the RTC. What Branch 19 should have done under the circumstances was to transfer the protest to Branch 22 of the RTC in Imus, Cavite, which was the proper venue. Such transfer was proper, whether she as the protestant sought it or not, given that the determination of the will of the electorate of Bacoor, Cavite according to the process set forth by law was of the highest concern of our institutions, particularly of the courts. 

BCastillo’s tardy appeal should be dismissed

            Section 8 of A.M. No. 07-4-15-SC provides that:  Section 8. Appeal. - An aggrieved party may appeal the decision  to the Commission on Elections within five days after promulgation by filing a notice of appeal with the court that rendered the decision with copy served on the adverse counsel or party if not represented by counsel.                                                                                                                                                            

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        Although Castillo had received the November 21, 2008 order of the RTC on December 15, 2008, she filed her notice of appeal only on December 23, 2008, or eight days after her receipt of the decision. Her appeal was properly dismissed for being too late under the aforequoted rule of the COMELEC. 

Castillo now insists that her appeal should not be dismissed, because she claims that the five-day reglementary period was a mere technicality, implying that such period was but a trivial guideline to be ignored or brushed aside at will.

 Castillo’s insistence is unacceptable. The period of appeal and the perfection of appeal are

not mere technicalities to be so lightly regarded, for they  are essential  to  the  finality  of  judgments,  a  notion  underlying  thestability of our judicial system.[14] A greater reason to adhere to this notion exists herein, for the short period of five days as the period to appeal recognizes the essentiality of time in election protests, in order that the will of the electorate is ascertained as soon as possible so that the winning candidate is not deprived of the right to assume office, and so that any doubt that can cloud the incumbency of the truly deserving winning candidate is quickly removed.

 Contrary to Castillo’s posture, we cannot also presume the timeliness of her appeal from the

fact that the RTC gave due course to her appeal by its elevating the protest to the COMELEC. The presumption of timeliness would not arise if her appeal was actually tardy.

           It is not trite to observe, finally, that Castillo’s tardy appeal resulted in the finality of the RTC’s dismissal even before January 30, 2002. This result provides an additional reason to warrant the assailed actions of the COMELEC in dismissing her appeal. Accordingly, the Court finds that the COMELEC’s assailed actions were appropriate and lawful, not tainted by either arbitrariness or whimsicality,           WHEREFORE, the petition is dismissed for lack of merit.           SO ORDERED.

 

Republic of the PhilippinesSUPREME COURT

ManilaFIRST DIVISION

 G.R. No. 126603 June 29, 1998

96

ESTRELLITA J. TAMANO, petitioner, vs.HON. RODOLFO A. ORTIZ, Presiding Judge, RTC-Br. 89, Quezon City, HAJA PUTRI ZORAYDA A. TAMANO, ADIB A. TAMANO and the HON. COURT OF APPEALS, respondents. BELLOSILLO, J.:

This Petition for Review on Certiorari seeks to reverse and set aside the decision of the Court of Appeals of 30 September 1996 in CA-G.R. SP. No. 39656 which affirmed the decision of the Regional Trial Court-Br. 89, Quezon City, denying the motion to dismiss as well as the motion for reconsideration filed by petitioner Estrellita J. Tamano.

On 31 May 1958 Senator Mamintal Abdul Jabar Tamano (Tamano) married private respondent Haja Putri Zorayda A. Tamano (Zorayda) in civil rites. Their marriage supposedly remained valid and subsisting until his death on 18 May 1994. Prior to his death, particularly on 2 June 1993, Tamano also married petitioner Estrellita J. Tamano (Estrellita) in civil rites in Malabang, Lanao del Sur.

On 23 November 1994 private respondent Zorayda joined by her son Adib A. Tamano (Adib) filed a Complaint for Declaration of Nullify of Marriage of Tamano and Estrellita on the ground that it was bigamous. They contended that Tamano and Estrellita misrepresented themselves as divorced and single, respectively, thus making the entries in the marriage contract false and fraudulent.

Private respondents alleged that Tamano never divorced Zorayda and that Estrellita was not single when she married Tamano as the decision annulling her previous marriage with Romeo C. Llave never became final and executory for non-compliance with publication requirements.Estrellita filed a motion to dismiss alleging that the Regional Trial Court of Quezon City was without jurisdiction over the subject and nature of the action. She alleged that "only a party to the marriage" could file an action forannulment of marriage against the other spouse, 1 hence, it was only Tamano who could file an action for annulment of their marriage. Petitioner likewise contended that since Tamano and Zorayda were both Muslims and married in Muslim rites the jurisdiction to hear and try the instant case was vested in the shari'a courts pursuant to Art. 155 of the Code of Muslim Personal Laws.

The lower court denied the motion to dismiss and ruled that the instant case was properly cognizable by the Regional Trial Court of Quezon City since Estrellita and Tamano were married in accordance with the Civil Code and not exclusively in accordance with PD No. 1083 2 or the Code of Muslim Personal laws. The motion for reconsideration was likewise denied; hence, petitioner filed the instant petition with this Court seeking to set aside the 18 July 1995 order of respondent presiding judge of the RTC-Br. 89, Quezon City, denying petitioner's motion to dismiss and the 22 August 1995 order denying reconsideration thereof.

In a Resolution dated 13 December 1995 we referred the case to the Court of Appeals for consolidation with G.R. No. 118371. Zorayda and Adib A. Tamano however filed a motion, which the Court of Appeals granted, to resolve the Complaint for Declaration of Nullity of Marriage ahead of the other consolidated cases.

The Court of Appeals ruled that the instant case would fall under the exclusive jurisdiction of shari'a courts only when filed in places where there are shari'a court. But in places where there are no shari'a courts, like Quezon City, the instant case could properly be filed before the Regional Trial Court.

Petitioner is now before us reiterating her earlier argument that it is the shari'a court and not the Regional Trial Court which has jurisdiction over the subject and nature of the action.

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Under The Judiciary Reorganization Act of 1980, 3 Regional Trial Courts have jurisdiction over all actions involving the contract of marriage and marital relations. 4 Personal actions, such as the instant complaint for declaration of nullity of marriage, may be commenced and tried where the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, at the election of the plaintiff. 5 There should be no question by now that what determines the nature of an action and correspondingly the court which has jurisdiction over it are the allegations made by the plaintiff in this case. 6 In the complaint for declaration of nullity of marriage filed by private respondents herein, it was alleged that Estrellita and Tamano were married in accordance with the provisions of the Civil Code. Never was it mentioned that Estrellita and Tamano were married under Muslim laws or PD No. 1083. Interestingly, Estrellita never stated in herMotion to Dismiss that she and Tamano were married under Muslim laws. That she was in fact married to Tamano under Muslim laws was first mentioned only in her Motion for Reconsideration.Nevertheless, the Regional Trial Court was not divested of jurisdiction to hear and try the instant case despite the allegation in the Motion for Reconsideration that Estrellita and Tamano were likewise married in Muslim rites. This is because a court's jurisdiction cannot be made to depend upon defenses set up in the answer, in a motion to dismiss, or in a motion for reconsideration, but only upon the allegations of the complaint. 7 Jurisdiction over the subject matter of a case is determined from the allegations of the complaint as the latter comprises a concise statement of the ultimate facts constituting the plaintiff's causes of action. 8

Petitioner argues that the shari'a courts have jurisdiction over the instant suit pursuant to Art. 13, Title II, PD No. 1083, 9 which provides —

Art. 13. Application. — (1) The provisions of this Title shall apply to marriage and divorce wherein both parties are Muslims, or wherein only the male party is a Muslim and the marriage is solemnized in accordance with Muslim law or this Code in any part of the Philippines.

(2) In case of a marriage between a Muslim and a non-Muslim, solemnized not in accordance with Muslim law or this Code, the Civil Code of the Philippines shall apply.

(3) Subject to the provisions of the preceding paragraphs, the essential requisites and legal impediments to marriage, divorce, paternity and filiation, guardianship and custody of minors, support and maintenance, claims for customary dower (mahr), betrothal, breach of contract to marry, solemnization and registration of marriage and divorce, rights and obligations between husband and wife, parental authority, and the property relations between husband and wife shall be governed by this Code and other applicable Muslim laws.

As alleged in the complaint, petitioner and Tamano were married in accordance with the Civil Code. Hence, contrary to the position of petitioner, the Civil Code is applicable in the instant case. Assuming that indeed petitioner and Tamano were likewise married under Muslim laws, the same would still fall under the general original jurisdiction of the Regional Trial Courts.

Article 13 of PD No. 1083 does not provide for a situation where the parties were married both in civil and Muslim rites. Consequently, the shari'a courts are not vested with original and exclusive jurisdiction when it comes to marriages celebrated under both civil and Muslim laws. Consequently, the Regional Trial Courts are not divested of their general original jurisdiction under Sec. 19, par. (6) of BP Blg. 129 which provides —

Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall exercise exclusive original jurisdiction: . . . (6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising judicial or quasi-judicial functions . . .

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WHEREFORE, the instant petition is DENIED. The decision of the Court of Appeals sustaining the 18 July 1995 and 22 August 1995 orders of the Regional Trial Court — Br. 89, Quezon City, denying the motion to dismiss and reconsideration thereof, is AFFIRMED. Let the records of this case be immediately remanded to the court of origin for further proceedings until terminated.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 174975               January 20, 2009LUISA KHO MONTAÑER, ALEJANDRO MONTAÑER, JR., LILLIBETH MONTAÑER-BARRIOS, AND RHODORA ELEANOR MONTAÑER-DALUPAN, Petitioners, vs.SHARI'A DISTRICT COURT, FOURTH SHARI'A JUDICIAL DISTRICT, MARAWI CITY, LILING DISANGCOPAN, AND ALMAHLEEN LILING S. MONTAÑER, Respondents.

D E C I S I O N

PUNO, C.J.:

This Petition for Certiorari and Prohibition seeks to set aside the Orders of the Shari’a District Court, Fourth Shari’a Judicial District, Marawi City, dated August 22, 20061 and September 21, 2006.2

On August 17, 1956, petitioner Luisa Kho Montañer, a Roman Catholic, married Alejandro Montañer, Sr. at the Immaculate Conception Parish in Cubao, Quezon City.3 Petitioners Alejandro Montañer, Jr., Lillibeth Montañer-Barrios, and Rhodora Eleanor Montañer-Dalupan are their children.4 On May 26, 1995, Alejandro Montañer, Sr. died.5

On August 19, 2005, private respondents Liling Disangcopan and her daughter, Almahleen Liling S. Montañer, both Muslims, filed a "Complaint" for the judicial partition of properties before the Shari’a District Court.6 The said complaint was entitled "Almahleen Liling S. Montañer and Liling M. Disangcopan v. the Estates and Properties of Late Alejandro Montañer, Sr., Luisa Kho Montañer, Lillibeth K. Montañer, Alejandro Kho Montañer, Jr., and Rhodora Eleanor K. Montañer," and docketed as "Special Civil Action No. 7-05."7 In the said complaint, private respondents made the following allegations: (1) in May 1995, Alejandro Montañer, Sr. died; (2) the late Alejandro Montañer, Sr. is a Muslim; (3) petitioners are the first family of the decedent; (4) Liling Disangcopan is the widow of the decedent; (5) Almahleen Liling S. Montañer is the daughter of the decedent; and (6) the estimated value of and a list of the properties comprising the estate of the decedent. 8 Private respondents prayed for the Shari’a District Court to order, among others, the following: (1) the partition of the estate of the decedent; and (2) the appointment of an administrator for the estate of the decedent.9

Petitioners filed an Answer with a Motion to Dismiss mainly on the following grounds: (1) the Shari’a District Court has no jurisdiction over the estate of the late Alejandro Montañer, Sr., because he was a Roman Catholic; (2) private respondents failed to pay the correct amount of docket fees; and (3) private respondents’ complaint is barred by prescription, as it seeks to establish filiation between Almahleen Liling S. Montañer and the decedent, pursuant to Article 175 of the Family Code.10

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On November 22, 2005, the Shari’a District Court dismissed the private respondents’ complaint. The district court held that Alejandro Montañer, Sr. was not a Muslim, and its jurisdiction extends only to the settlement and distribution of the estate of deceased Muslims.11

On December 12, 2005, private respondents filed a Motion for Reconsideration.12 On December 28, 2005, petitioners filed an Opposition to the Motion for Reconsideration, alleging that the motion for reconsideration lacked a notice of hearing.13 On January 17, 2006, the Shari’a District Court denied petitioners’ opposition.14Despite finding that the said motion for reconsideration "lacked notice of hearing," the district court held that such defect was cured as petitioners "were notified of the existence of the pleading," and it took cognizance of the said motion.15 The Shari’a District Court also reset the hearing for the motion for reconsideration.16

In its first assailed order dated August 22, 2006, the Shari’a District Court reconsidered its order of dismissal dated November 22, 2005.17 The district court allowed private respondents to adduce further evidence.18 In its second assailed order dated September 21, 2006, the Shari’a District Court ordered the continuation of trial, trial on the merits, adducement of further evidence, and pre-trial conference.19

Seeking recourse before this Court, petitioners raise the following issues:

I. RESPONDENT SHARI’A DISTRICT COURT – MARAWI CITY LACKS JURISDICTION OVER PETITIONERS WHO ARE ROMAN CATHOLICS AND NON-MUSLIMS.

II. RESPONDENT SHARI’A DISTRICT COURT – MARAWI CITY DID NOT ACQUIRE JURISDICTION OVER "THE ESTATES AND PROPERTIES OF THE LATE ALEJANDRO MONTAÑER, SR." WHICH IS NOT A NATURAL OR JURIDICAL PERSON WITH CAPACITY TO BE SUED.

III. RESPONDENT SHARI’A DISTRICT COURT DID NOT ACQUIRE JURISDICTION OVER THE COMPLAINT OF PRIVATE RESPONDENTS AGAINST PETITIONERS DUE TO NON-PAYMENT OF THE FILING AND DOCKETING FEES.

IV. RESPONDENT SHARI’A DISTRICT COURT—MARAWI CITY COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION WHEN IT DENIED THE OPPOSITION OF PETITIONERS AND THEN GRANTED THE MOTION FOR RECONSIDERATION OF RESPONDENTS LILING DISANGCOPAN, ET AL. WHICH WAS FATALLY DEFECTIVE FOR LACK OF A "NOTICE OF HEARING."

V. RESPONDENT SHARI’A DISTRICT COURT—MARAWI CITY COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION WHEN IT SET SPL. CIVIL ACTION 7-05 FOR TRIAL EVEN IF THE COMPLAINT PLAINLY REVEALS THAT RESPONDENT ALMAHLEEN LILING S. MONTAÑER SEEKS RECOGNITION FROM ALEJANDRO MONTAÑER, SR. WHICH CAUSE OF ACTION PRESCRIBED UPON THE DEATH OF ALEJANDRO MONTAÑER, SR. ON MAY 26, 1995.

In their Comment to the Petition for Certiorari, private respondents stress that the Shari’a District Court must be given the opportunity to hear and decide the question of whether the decedent is a Muslim in order to determine whether it has jurisdiction.20

Jurisdiction: Settlement of the Estate of Deceased Muslims

Petitioners’ first argument, regarding the Shari’a District Court’s jurisdiction, is dependent on a question of fact, whether the late Alejandro Montañer, Sr. is a Muslim. Inherent in this argument is the premise that there has already been a determination resolving such a question of fact. It bears emphasis, however, that the assailed orders did not determine whether the decedent is a Muslim. The assailed orders did, however, set a hearing for the purpose of resolving this issue.

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Article 143(b) of Presidential Decree No. 1083, otherwise known as the Code of Muslim Personal Laws of the Philippines, provides that the Shari’a District Courts have exclusive original jurisdiction over the settlement of the estate of deceased Muslims:

ARTICLE 143. Original jurisdiction. — (1) The Shari'a District Court shall have exclusive original jurisdiction over:x x x x(b) All cases involving disposition, distribution and settlement of the estate of deceased Muslims, probate of wills, issuance of letters of administration or appointment of administrators or executors regardless of the nature or the aggregate value of the property.

The determination of the nature of an action or proceeding is controlled by the averments and character of the relief sought in the complaint or petition.21 The designation given by parties to their own pleadings does not necessarily bind the courts to treat it according to the said designation. Rather than rely on "a falsa descriptio or defective caption," courts are "guided by the substantive averments of the pleadings."22

Although private respondents designated the pleading filed before the Shari’a District Court as a "Complaint" for judicial partition of properties, it is a petition for the issuance of letters of administration, settlement, and distribution of the estate of the decedent. It contains sufficient jurisdictional facts required for the settlement of the estate of a deceased Muslim,23 such as the fact of Alejandro Montañer, Sr.’s death as well as the allegation that he is a Muslim. The said petition also contains an enumeration of the names of his legal heirs, so far as known to the private respondents, and a probable list of the properties left by the decedent, which are the very properties sought to be settled before a probate court. Furthermore, the reliefs prayed for reveal that it is the intention of the private respondents to seek judicial settlement of the estate of the decedent.24 These include the following: (1) the prayer for the partition of the estate of the decedent; and (2) the prayer for the appointment of an administrator of the said estate.

We cannot agree with the contention of the petitioners that the district court does not have jurisdiction over the case because of an allegation in their answer with a motion to dismiss that Montañer, Sr. is not a Muslim. Jurisdiction of a court over the nature of the action and its subject matter does not depend upon the defenses set forth in an answer25 or a motion to dismiss.26 Otherwise, jurisdiction would depend almost entirely on the defendant27 or result in having "a case either thrown out of court or its proceedings unduly delayed by simple stratagem. 28 Indeed, the "defense of lack of jurisdiction which is dependent on a question of fact does not render the court to lose or be deprived of its jurisdiction."29

The same rationale applies to an answer with a motion to dismiss.30 In the case at bar, the Shari’a District Court is not deprived of jurisdiction simply because petitioners raised as a defense the allegation that the deceased is not a Muslim. The Shari’a District Court has the authority to hear and receive evidence to determine whether it has jurisdiction, which requires an a priori determination that the deceased is a Muslim. If after hearing, the Shari’a District Court determines that the deceased was not in fact a Muslim, the district court should dismiss the case for lack of jurisdiction.

Special Proceedings

The underlying assumption in petitioners’ second argument, that the proceeding before the Shari’a District Court is an ordinary civil action against a deceased person, rests on an erroneous understanding of the proceeding before the court a quo. Part of the confusion may be attributed to the proceeding before the Shari’a District Court, where the parties were designated either as plaintiffs or defendants and the case was denominated as a special civil action. We reiterate that the proceedings before the court a quo are for the issuance of letters of administration, settlement, and distribution of the estate of the deceased, which is a special proceeding. Section 3(c) of the Rules of Court (Rules) defines a special proceeding as "a remedy by which a party seeks to establish a

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status, a right, or a particular fact." This Court has applied the Rules, particularly the rules on special proceedings, for the settlement of the estate of a deceased Muslim.31 In a petition for the issuance of letters of administration, settlement, and distribution of estate, the applicants seek to establish the fact of death of the decedent and later to be duly recognized as among the decedent’s heirs, which would allow them to exercise their right to participate in the settlement and liquidation of the estate of the decedent.32 Here, the respondents seek to establish the fact of Alejandro Montañer, Sr.’s death and, subsequently, for private respondent Almahleen Liling S. Montañer to be recognized as among his heirs, if such is the case in fact.Petitioners’ argument, that the prohibition against a decedent or his estate from being a party defendant in a civil action33 applies to a special proceeding such as the settlement of the estate of the deceased, is misplaced. Unlike a civil action which has definite adverse parties, a special proceeding has no definite adverse party. The definitions of a civil action and a special proceeding, respectively, in the Rules illustrate this difference. A civil action, in which "a party sues another for the enforcement or protection of a right, or the prevention or redress of a wrong"34 necessarily has definite adverse parties, who are either the plaintiff or defendant.35 On the other hand, a special proceeding, "by which a party seeks to establish a status, right, or a particular fact,"36 has one definite party, who petitions or applies for a declaration of a status, right, or particular fact, but no definite adverse party. In the case at bar, it bears emphasis that the estate of the decedent is not being sued for any cause of action. As a special proceeding, the purpose of the settlement of the estate of the decedent is to determine all the assets of the estate,37 pay its liabilities,38 and to distribute the residual to those entitled to the same.39

Docket Fees

Petitioners’ third argument, that jurisdiction was not validly acquired for non-payment of docket fees, is untenable. Petitioners point to private respondents’ petition in the proceeding before the court  a quo, which contains an allegation estimating the decedent’s estate as the basis for the conclusion that what private respondents paid as docket fees was insufficient. Petitioners’ argument essentially involves two aspects: (1) whether the clerk of court correctly assessed the docket fees; and (2) whether private respondents paid the correct assessment of the docket fees.

Filing the appropriate initiatory pleading and the payment of the prescribed docket fees vest a trial court with jurisdiction over the subject matter.40 If the party filing the case paid less than the correct amount for the docket fees because that was the amount assessed by the clerk of court, the responsibility of making a deficiency assessment lies with the same clerk of court.41 In such a case, the lower court concerned will not automatically lose jurisdiction, because of a party’s reliance on the clerk of court’s insufficient assessment of the docket fees.42As "every citizen has the right to assume and trust that a public officer charged by law with certain duties knows his duties and performs them in accordance with law," the party filing the case cannot be penalized with the clerk of court’s insufficient assessment.43 However, the party concerned will be required to pay the deficiency.44

In the case at bar, petitioners did not present the clerk of court’s assessment of the docket fees. Moreover, the records do not include this assessment. There can be no determination of whether private respondents correctly paid the docket fees without the clerk of court’s assessment.

Exception to Notice of Hearing

Petitioners’ fourth argument, that private respondents’ motion for reconsideration before the Shari’a District Court is defective for lack of a notice of hearing, must fail as the unique circumstances in the present case constitute an exception to this requirement. The Rules require every written motion to be set for hearing by the applicant and to address the notice of hearing to all parties concerned.45 The Rules also provide that "no written motion set for hearing shall be acted upon by the court without proof of service thereof."46 However, the Rules allow a liberal construction of its provisions "in order to promote [the] objective of securing a just, speedy, and inexpensive disposition of every action and proceeding."47 Moreover, this Court has upheld a liberal construction specifically

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of the rules of notice of hearing in cases where "a rigid application will result in a manifest failure or miscarriage of justice especially if a party successfully shows that the alleged defect in the questioned final and executory judgment is not apparent on its face or from the recitals contained therein."48 In these exceptional cases, the Court considers that "no party can even claim a vested right in technicalities," and for this reason, cases should, as much as possible, be decided on the merits rather than on technicalities.49

The case at bar falls under this exception. To deny the Shari’a District Court of an opportunity to determine whether it has jurisdiction over a petition for the settlement of the estate of a decedent alleged to be a Muslim would also deny its inherent power as a court to control its process to ensure conformity with the law and justice. To sanction such a situation simply because of a lapse in fulfilling the notice requirement will result in a miscarriage of justice.

In addition, the present case calls for a liberal construction of the rules on notice of hearing, because the rights of the petitioners were not affected. This Court has held that an exception to the rules on notice of hearing is where it appears that the rights of the adverse party were not affected. 50 The purpose for the notice of hearing coincides with procedural due process,51 for the court to determine whether the adverse party agrees or objects to the motion, as the Rules do not fix any period within which to file a reply or opposition.52 In probate proceedings, "what the law prohibits is not the absence of previous notice, but the absolute absence thereof and lack of opportunity to be heard."53 In the case at bar, as evident from the Shari’a District Court’s order dated January 17, 2006, petitioners’ counsel received a copy of the motion for reconsideration in question. Petitioners were certainly not denied an opportunity to study the arguments in the said motion as they filed an opposition to the same. Since the Shari’a District Court reset the hearing for the motion for reconsideration in the same order, petitioners were not denied the opportunity to object to the said motion in a hearing. Taken together, these circumstances show that the purpose for the rules of notice of hearing, procedural process, was duly observed.

Prescription and Filiation

Petitioners’ fifth argument is premature. Again, the Shari’a District Court has not yet determined whether it has jurisdiction to settle the estate of the decedent. In the event that a special proceeding for the settlement of the estate of a decedent is pending, questions regarding heirship, including prescription in relation to recognition and filiation, should be raised and settled in the said proceeding.54 The court, in its capacity as a probate court, has jurisdiction to declare who are the heirs of the decedent.55 In the case at bar, the determination of the heirs of the decedent depends on an affirmative answer to the question of whether the Shari’a District Court has jurisdiction over the estate of the decedent.

IN VIEW WHEREOF, the petition is DENIED. The Orders of the Shari’a District Court, dated August 22, 2006 and September 21, 2006 respectively, are AFFIRMED. Cost against petitioners.SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila 

103

EN BANC  SULTAN YAHYA “JERRY” M.TOMAWIS,                                        Petitioner,

             -  versus  -

    HON. RASAD G. BALINDONG, AMNA A. PUMBAYA, JALILAH A. MANGOMPIA, and RAMLA A. MUSOR,                                       Respondents.

  

  G.R. No. 182434 Present: PUNO, C.J.,CARPIO,CORONA,CARPIO MORALES,VELASCO, JR.,NACHURA,LEONARDO-DE CASTRO,BRION,PERALTA,*

BERSAMIN,DEL CASTILLO,ABAD,VILLARAMA, JR.,PEREZ, andMENDOZA, JJ. Promulgated:       March 5, 2010

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

D E C I S I O N  VELASCO, JR., J.:              This petition for certiorari, prohibition, and mandamus under Rule 65 seeks to nullify the Orders dated July 13, 2005, September 6, 2005, and February 6, 2008 issued by respondent Judge Rasad G. Balindong of the Shari’a District Court (SDC), Fourth Judicial District in Marawi City, in Civil Case No. 102-97 entitled Amna A. Pumbaya, et al. v. Jerry Tomawis, et al.

The Facts 

          Private respondents Amna A. Pumbaya, Jalilah A. Mangompia, and Ramla A. Musor are the daughters of the late Acraman Radia.  On February 21, 1997, private respondents filed with the SDC an action for quieting of title of a parcel of land located in Banggolo, Marawi City, against petitioner Sultan Jerry Tomawis and one Mangoda Radia. In their complaint, styled as Petition [1] and docketed as Civil Case No. 102-97, private respondents, as plaintiffs a quo, alleged the following:           (1) They were the absolute owners of the lot subject of the complaint, being the legal heirs of Acraman Radia, who had always been in peaceful, continuous, and adverse possession of the property; (2) Tomawis assumed ownership of the said property on the claim that he bought the same from Mangoda Radia, who, in turn, claimed that he inherited it from his late father; (3) in 1996, they “were informed that their land [was] leveled and the small houses [built] thereon with their permission were removed” upon the orders of Tomawis; and (4) they had been unlawfully deprived of their possession of the land, and Tomawis’ actions had cast a cloud of doubt on their title. 

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In his answer, Tomawis debunked the sisters’ claim of ownership and raised, as one of his affirmative defenses treated by the court as a motion to dismiss, SDC’s lack of jurisdiction over the subject matter of the case.[2]  As argued, the regular civil court, not SDC, had such jurisdiction pursuant to Batas Pambansa Blg. (BP) 129 or the Judiciary Reorganization Act of 1980.[3]

  Following the hearing on the affirmative defenses, respondent Judge Rasad Balindong, by

Order of April 1, 2003, denied the motion. Apropos the jurisdiction aspect of the motion, respondent judge asserted the SDC’s original jurisdiction over the case, concurrently with the Regional Trial Court (RTC), by force of Article 143, paragraph 2(b) of Presidential Decree No. (PD) 1083 or the Code of Muslim Personal Laws of the Philippines. 

 On June 16, 2005, Tomawis filed an Urgent Motion to Dismiss with Prayer to Correct the

Name of Defendants to Read Sultan Yahya “Jerry” M. Tomawis & Mangoda M. Radia .[4]  In it, he alleged that title to or possession of real property or interest in it was clearly the subject matter of the complaint which, thus, brought it within the original exclusive jurisdiction of the regular courts in consonance with existing law. [5]  On July 13, 2005, the SDC denied this motion to dismiss. 

Unsatisfied, Tomawis later interposed an Urgent Motion for Reconsideration with Prayer to Cancel and Reset the Continuation of Trial Until After the Resolution of the Pending Incident .[6]  Per Order[7] dated September 6, 2005, the SDC denied Tomawis’ urgent motion for reconsideration and ordered the continuation of trial.             Forthwith, Tomawis repaired to the Court of Appeals (CA), Mindanao Station, on a petition for certiorari, mandamus, and prohibition under Rule 65 to nullify, on jurisdictional grounds, the aforesaid SDC July 13, 2005 and September 6, 2005 Orders. 

By Resolution[8] of February 8, 2006, the appellate court dismissed the petition on the ground that the CA was “not empowered to resolve decisions, orders or final judgments of the [SDCs].” Justifying its disposition, the CA held that, pursuant to Art. 145[9] of PD 1083, in relation to Art. VIII, Section 9[10] of Republic Act No. (RA) 9054,[11] the new organic law of the Autonomous Region in Muslim Mindanao, final decisions of the SDC are reviewable by the yet to be established Shari’a Appellate Court. Pending the reorganization of the Shari’a Appellate Court, the CA ruled that such intermediate appellate jurisdiction rests with the Supreme Court.

 Undeterred by the foregoing setback before the CA, Tomawis interposed, on January 29,

2008, before the SDC another motion to dismiss on the same grounds as his previous motions to dismiss.  The motion was rejected by respondent Judge Balindong per his order of February 6, 2008, denying the motion with finality.           Hence, this recourse on the sole issue of:

 WHETHER OR NOT THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION IN DENYING PETITIONER’S MOTIONS TO DISMISS ON THE GROUND OF LACK OF JURISDICTION AND IN DENYING PETITIONER’S MOTION SEEKING RECONSIDERATION OF THE ORDER DENYING HIS MOTION TO DISMISS.   

          Simply put, the issue is whether or not the SDC can validly take cognizance of Civil Case No. 102-97.

The Court’s Ruling 

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          Prefatorily, the Court acknowledges the fact that decades after the enactment in 1989 of the law[12] creating the Shari’a Appellate Court and after the Court, per Resolution of June 8, 1999,[13] authorized its creation, the Shari’a Appellate Court has yet to be organized with the appointment of a Presiding Justice and two Associate Justices. Until such time that the Shari’a Appellate Court shall have been organized, however, appeals or petitions from final orders or decisions of the SDC filed with the CA shall be referred to a Special Division to be organized in any of the CA stations preferably composed of Muslim CA Justices.           For cases where only errors or questions of law are raised or involved, the appeal shall be to this Court by a petition for review on certiorari under Rule 45 of the Rules of Court pursuant to Art. VIII, Sec. 5 of the Constitution and Sec. 2 of Rule 41 of the Rules.           To be sure, the Court has, on several occasions, passed upon and resolved petitions and cases emanating from Shari’a courts. Among these was one involving the issue of whether or not grave abuse of discretion attended the denial of a motion to implement a writ of execution. [14] Still another involved the Shari’a courts’ jurisdiction in custody and guardianship proceedings, [15] nullity of marriage and divorce when the parties were both married in civil and Muslim rites, [16] and settlement of estate proceedings where the deceased was alleged to be not a Muslim, [17] or where the estate covered properties situated in different provinces.[18]

           The instant petition, involving only a question of law on the jurisdiction of the SDC over a complaint for quieting of title, was properly instituted before the Court.           Petitioner asserts that Sec. 19(2), in relation to Sec. 33(3) of BP 129, as amended––by vesting original exclusive jurisdiction to the RTCs or Municipal Trial Courts (MTCs), as the case may be, over civil actions that involve the title to, or possession of, real property––effectively removed the concurrent jurisdiction once pertaining to the SDC under Art. 143(2)(b) of PD 1083.  In fine, petitioner contends that Art. 143 of PD 1083, insofar as it granted the SDC concurrent jurisdiction over certain real actions, was repealed by the BP 129 provisions adverted to. 

 Disagreeing as to be expected, private respondents balk at the notion of the implied repeal

petitioner espouses, arguing that PD 1083, being a special, albeit a prior, law, has not been repealed by BP 129. Putting private respondents’ contention in a narrower perspective, Art. 143(2)(b) of PD 1083 is of specific applicability and, hence, cannot, under the rules of legal hermeneutics, be superseded by laws of general application, absent an express repeal.           Petitioner’s claim has no basis.

 The allegations, as well as the relief sought by private respondents, the elimination of the

“cloud of doubts on the title of ownership”[19] on the subject land, are within the SDC’s jurisdiction to grant.

 A brief background. The Judiciary Act of 1948 (RA 296) was enacted on June 17, 1948. It

vested the Courts of First Instance with original jurisdiction:  (b) In all civil actions which involve the title to or possession of real property,

or any interest therein, or the legality of any tax, impost or assessment, except actions of forcible entry into and detainer on lands or buildings, original jurisdiction of which is conferred by this Act upon city and municipal courts.[20] x x x

  Subsequently, PD 1083, dated February 4, 1977, created the Shari’a courts, i.e., the SDC

and the Shari’a Circuit Court, both of limited jurisdiction. In Republic v. Asuncion,[21] the Court, citing

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the Administrative Code of 1987,[22] classified Shari’a courts as “regular courts,” meaning they are part of the judicial department.

 Art. 143 of PD 1083 vests SDCs, in certain cases, with exclusive original jurisdiction and with

concurrent original jurisdiction over certain causes of action.  As far as relevant, Art. 143 reads as follows:

             ARTICLE 143. Original jurisdiction.— (1) The Shari’a District Court shall have exclusive original jurisdiction over:

 x x x x d)     All actions arising from customary contracts in which the parties are

Muslims, if they have not specified which law shall govern their relations; and x x x x 

(2)     Concurrently with existing civil courts, the Shari’a District Court shall have original jurisdiction over:             x x x x             (b)     All other personal and real actions not mentioned in paragraph 1 (d) wherein the parties involved are Muslims except those for forcible entry and unlawful detainer, which shall fall under the exclusive original jurisdiction of the Municipal Circuit Court. (Emphasis added.)  

          On August 14, 1981, BP 129 took effect. Sec. 19 of BP 129, as later amended by RA 7691,[23] defining the jurisdiction of the RTCs, provides:

 Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the “Judiciary Reorganization Act of 1980”, is hereby amended to read as follows: “Sec. 19. Jurisdiction in civil cases.—Regional Trial Courts shall exercise exclusive original jurisdiction: x x x x “(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000,00) or, for civil actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts.” (Emphasis supplied.)  As things stood prior to the effectivity date of BP 129, the SDC had, by virtue of PD 1083,

original jurisdiction, concurrently with the RTCs and MTCs, over all personal and real actions outside the purview of Art. 143(1)(d) of PD 1083, in which the parties involved were Muslims, except those for ejectment.  Personal action is one that is founded on privity of contracts between the parties;[24] and in which the plaintiff usually seeks the recovery of personal property, the enforcement of a contract, or recovery of damages.[25] Real action, on the other hand, is one anchored on the privity of

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real estate,[26] where the plaintiff seeks the recovery of ownership or possession of real property or interest in it.[27]

 On the other hand, BP 129, as amended, vests the RTC or the municipal trial court with

exclusive original jurisdiction in all civil actions that involve the title to or possession of real property, or any interest in it, and the value of the property subject of the case or the jurisdictional amount, determining whether the case comes within the jurisdictional competence of the RTC or the MTC. Orbeta v. Orbeta[28] differentiated personal action from real action in the following wise:

A real action, under Sec. 1, Rule 4 of the Rules of Court, is one that affects title to or possession of real property, or an interest therein.  Such actions should be commenced and tried in the proper court which has jurisdiction over the area wherein the real property involved, or a portion thereof, is situated. All other actions are personal and may be commenced and tried where the plaintiff or any of the principal plaintiffs resides, or where the defendant or any of the principal defendants resides, or in the case of a non-resident defendant where he may be found, at the election of the plaintiff. 

  

Civil Case No. 102-97, judging from the averments in the underlying complaint, is basically a suit for recovery of possession and eventual reconveyance of real property which, under BP 129, as amended, falls within the original jurisdiction of either the RTC or MTC.  In an action for reconveyance, all that must be alleged in the complaint are two facts that, admitting them to be true, would entitle the plaintiff to recover title to the disputed land, namely: (1) that the plaintiff is the owner of the land or has possessed the land in the concept of owner; and (2) that the defendant has illegally dispossessed the plaintiff of the land.[29] A cursory perusal of private respondents’ complaint readily shows that that these requisites have been met: they alleged absolute ownership of the subject parcel of land, and they were illegally dispossessed of their land by petitioner.  The allegations in the complaint, thus, make a case for an action for reconveyance.

 Given the above perspective, the question that comes to the fore is whether the jurisdiction

of the RTC or MTC is to the exclusion of the SDC.  

Petitioner’s version of the law would effectively remove the concurrent original jurisdiction granted by Art. 143, par. 2(b) of PD 1083 to civil courts and Shari’a courts over, among others:

 All other personal and real actions not mentioned in paragraph 1 (d) wherein the parties involved are Muslims except those for forcible entry and unlawful detainer, which shall fall under the exclusive original jurisdiction of the Municipal Circuit Court. x x x

           Petitioner’s interpretation of the law cannot be given serious thought. One must bear in mind that even if Shari’a courts are considered regular courts, these are courts of limited jurisdiction. As we have observed in Rulona-Al Awadhi v. Astih,[30] the Code of Muslim Personal Laws creating said courts was promulgated to fulfill “the aspiration of the Filipino Muslims to have their system of laws enforced in their communities.”  It is a special law intended for Filipino Muslims, as clearly stated in the purpose of PD 1083:

             ARTICLE 2. Purpose of Code. — Pursuant to Section 11 of Article XV of the Constitution of the Philippines, which provides that “The State shall consider the customs, traditions, beliefs and interests of national cultural communities in the formulation and implementation of state policies,” this Code:             (a)    Recognizes the legal system of the Muslims in the Philippines as part of the law of the land and seeks to make Islamic institutions more effective;             (b)    Codifies Muslim personal laws; and

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             (c)    Provides for an effective administration and enforcement of Muslim personal laws among Muslims.

           A reading of the pertinent provisions of BP 129 and PD 1083 shows that the former, a law of general application to civil courts, has no application to, and does not repeal, the provisions found in PD 1083, a special law, which only refers to Shari’a courts.           A look at the scope of BP 129 clearly shows that Shari’a courts were not included in the reorganization of courts that were formerly organized under RA 296.The pertinent provision in BP 129 states:

SECTION 2.    Scope. — The reorganization herein provided shall include the Court of Appeals, the Court of First Instance, the Circuit Criminal Courts, the Juvenile and Domestic Relations Courts, the Courts of Agrarian Relations, the City Courts, the Municipal Courts, and the Municipal Circuit Courts. 

           As correctly pointed out by private respondents in their Comment, [31] BP 129 was enacted to reorganize only existing civil courts and is a law of general application to the judiciary.   In contrast, PD 1083 is a special law that only applies to Shari’a courts.           We have held that a general law and a special law on the same subject are statutes in pari materia and should be read together and harmonized, if possible, with a view to giving effect to both.[32]  In the instant case, we apply the principle generalia specialibus non derogant.  A general law does not nullify a special law. The general law will yield to the special law in the specific and particular subject embraced in the latter.[33] We must read and construe BP 129 and PD 1083 together, then by taking PD 1083 as an exception to the general law to reconcile the two laws. This is so since the legislature has not made any express repeal or modification of PD 1083, and it is well-settled that repeals of statutes by implication are not favored. [34]  Implied repeals will not be declared unless the intent of the legislators is manifest.  Laws are assumed to be passed only after careful deliberation and with knowledge of all existing ones on the subject, and it follows that the legislature did not intend to interfere with or abrogate a former law relating to the same subject matter.[35]

            In order to give effect to both laws at hand, we must continue to recognize the concurrent jurisdiction enjoyed by SDCs with that of RTCs under PD 1083. 

Moreover, the jurisdiction of the court below cannot be made to depend upon defenses set up in the answer, in a motion to dismiss, or in a motion for reconsideration, but only upon the allegations of the complaint.[36] Jurisdiction over the subject matter of a case is determined from the allegations of the complaint and the character of the relief sought. [37] In the instant case, private respondents’ petition[38] in Civil Case No. 102-97 sufficiently alleged the concurrent original jurisdiction of the SDC.

             While we recognize the concurrent jurisdiction of the SDCs and the RTCs with respect to cases involving only Muslims, the SDC has exclusive original jurisdiction over all actions arising from contracts customary to Muslims[39] to the exclusion of the RTCs, as the exception under PD 1083, while both courts have concurrent original jurisdiction over all other personal actions. Said jurisdictional conferment, found in Art. 143 of PD 1083, is applicable solely when both parties are Muslims and shall not be construed to operate to the prejudice of a non-Muslim, [40] who may be the opposing party against a Muslim. 

Given petitioner’s flawed arguments, we hold that the respondent court did not commit any grave abuse of discretion. Grave abuse of discretion is present when there is an arbitrary exercise of power owing from passion, prejudice, or personal hostility; or a whimsical, arbitrary, or capricious

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exercise of power that amounts to a shirking from or refusal to perform a positive duty enjoined by law or to act at all in contemplation of law.  The abuse of discretion must be patent and gross for the act to be held as one made with grave abuse of discretion. [41] We find respondent court’s issuance of the assailed orders justified and with no abuse of discretion. Its reliance on the provisions of PD 1083 in asserting its jurisdiction was sound and unassailable.

 We close with the observation that what is involved here are not only errors of law, but also

the errors of a litigant and his lawyer. As may have been noted, petitioner Tomawis’ counsel veritably filed two (2) motions to dismiss, each predicated on the sole issue of jurisdiction. The first may have been understandable. But the second motion was something else, interposed as it was after the CA, by resolution, denied Tomawis’ petition for certiorari for want of jurisdiction on the part of the appellate court to review judgments or orders of the SDC. The CA stated the observation, however, that Tomawis and his counsel may repair to this Court while the Shari’a Appellate Court has yet to be organized. Petitioner waited two years after the CA issued its denial before filing what virtually turned out to be his second motion to dismiss, coming finally to this Court after the same motion was denied. The Court must express disapproval of the cunning effort of Tomawis and his counsel to use procedural rules to the hilt to prolong the final disposition of this case. From Alonso v. Villamor,[42] almost a century-old decision, the Court has left no doubt that it frowns on such unsporting practice. The rule is settled that a question of jurisdiction, as here, may be raised at any time, even on appeal, provided its application does not result in a mockery of the basic tenets of fair play.[43]  Petitioner’s action at the later stages of the proceedings below, doubtless taken upon counsel’s advice, is less than fair and constitutes censurable conduct. Lawyers and litigants must be brought to account for their improper conduct, which trenches on the efficient dispensation of justice.

  WHEREFORE, the petition is DISMISSED for lack of merit. Petitioner Yahya “Jerry”

Tomawis and Atty. Edgar A. Masorong are ADMONISHED to refrain from engaging in activities tending to frustrate the orderly and speedy administration of justice, with a warning that repetition of the same or similar acts may result in the imposition of a more severe sanction.

 No costs. SO ORDERED.

SECOND DIVISION

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  HERALD BLACK DACASIN,              G.R. No. 168785                                  Petitioner,                                                                                      Present:                                                                                                                                        CARPIO, J., Chairperson,                                                                 BRION,                   - versus -                                  DEL CASTILLO,

                                               ABAD, and                                                                             PEREZ, JJ.  SHARON DEL MUNDO DACASIN,     Promulgated:                                 Respondent.          February 5, 2010x----------------------------------------------------------------------------------------x 

D E C I S I O N CARPIO, J.:  

The Case          For review[1] is a dismissal[2] of a suit to enforce a post-foreign divorce child custody agreement for lack of jurisdiction. 

The Facts           Petitioner Herald Dacasin (petitioner), American, and respondent Sharon Del Mundo Dacasin (respondent),  Filipino, were married in Manila in April 1994. They have one daughter, Stephanie, born on 21 September 1995. In June 1999, respondent sought and obtained from the Circuit Court, 19th Judicial Circuit, Lake County, Illinois (Illinois court) a divorce decree against petitioner. [3]  In its ruling, the Illinois court dissolved the marriage of petitioner and respondent, awarded to respondent sole custody of Stephanie and retained jurisdiction over the case for enforcement purposes.           On 28 January 2002, petitioner and respondent executed in Manila a contract (Agreement [4]) for the joint custody of Stephanie. The parties chose Philippine courts as exclusive forum to adjudicate disputes arising from the Agreement.  Respondent undertook to obtain from the Illinois court an order “relinquishing” jurisdiction to Philippine courts.          In 2004, petitioner sued respondent in the Regional Trial Court of Makati City, Branch 60 (trial court) to enforce the Agreement. Petitioner alleged that in violation of the Agreement, respondent exercised sole custody over Stephanie.          Respondent sought the dismissal of the complaint for, among others, lack of jurisdiction because of the Illinois court’s retention of jurisdiction to enforce the divorce decree. 

The Ruling of the Trial Court          In its Order dated 1 March 2005, the trial court sustained respondent’s motion and dismissed the case for lack of jurisdiction. The trial court       held that: (1) it is precluded from taking cognizance over the suit considering the Illinois court’s retention of jurisdiction to enforce its divorce decree, including its order awarding sole custody of Stephanie to respondent;  (2) the divorce decree is binding on petitioner following the “nationality rule” prevailing in this jurisdiction;[5] and (3) the

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Agreement is void for contravening Article 2035, paragraph 5 of the Civil Code[6] prohibiting compromise agreements on  jurisdiction.[7]           Petitioner sought reconsideration,  raising the new argument that the divorce decree obtained by respondent is void. Thus, the divorce decree is no bar to the trial court’s exercise of jurisdiction over the case.          In its Order dated 23 June 2005, the trial court denied reconsideration, holding that unlike in the case of respondent, the divorce decree is binding on petitioner under the laws of his nationality.          Hence, this petition.          Petitioner submits the following alternative theories for the validity of the Agreement to justify its enforcement by the trial court: (1) the Agreement novated the valid divorce decree, modifying the terms of child custody from sole (maternal) to joint;[8] or (2) the Agreement is independent of the divorce decree obtained by respondent. 

 The Issue

          The question is whether the trial court has jurisdiction to take cognizance of petitioner’s suit and enforce the Agreement on the joint custody of the parties’ child. 

The Ruling of the Court          The trial court has jurisdiction to entertain petitioner’s suit but not to enforce the Agreement which is void. However, factual and equity considerations militate against the dismissal of petitioner’s suit and call for the remand of the case to settle the question of Stephanie’s custody. 

Regional Trial Courts Vested With Jurisdictionto Enforce Contracts        

Subject matter jurisdiction is conferred by law. At the time petitioner filed his suit in the trial court, statutory law vests on Regional Trial Courts exclusive original jurisdiction over civil actions incapable of pecuniary estimation.[9] An action for specific performance, such as petitioner’s suit to enforce the Agreement on joint child custody, belongs to this species of actions.[10] Thus, jurisdiction-wise, petitioner went to the right court.

 Indeed, the trial court’s refusal to entertain petitioner’s suit was grounded not on its lack of

power to do so but on its thinking that the Illinois court’s divorce decree stripped it of jurisdiction. This conclusion is unfounded. What the Illinois court retained was “jurisdiction x x x for the purpose of enforcing all and sundry the various provisions of [its] Judgment for Dissolution.”[11] Petitioner’s suit seeks the enforcement not of the “various provisions” of the divorce decree but of the post-divorce Agreement on joint child custody. Thus, the action lies beyond the zone of the Illinois court’s so-called “retained jurisdiction.”  

 Petitioner’s Suit Lacks Cause of Action

          The foregoing notwithstanding, the trial court cannot enforce the Agreement which is contrary to law.

 In this jurisdiction, parties to a contract are free to stipulate the terms of agreement subject to

the minimum ban on stipulations contrary to law, morals, good customs, public order, or public policy.[12] Otherwise, the contract is denied legal existence, deemed “inexistent and void from the beginning.”[13] For lack of relevant stipulation in the Agreement, these and other ancillary Philippine

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substantive law serve as default parameters to test  the validity of the Agreement’s joint child custody stipulations.[14]

At the time the parties executed the Agreement on 28 January 2002, two facts are undisputed: (1)  Stephanie was under seven years old (having been born on 21 September 1995); and (2) petitioner and respondent were no longer married under the laws of the United States because of the divorce decree. The relevant Philippine law on child custody for spouses separated in fact or in law[15]  (under the second paragraph of Article 213 of the Family Code) is also undisputed: “no child under seven years of age shall be separated from the mother x x x.” [16]  (This statutory awarding of sole parental custody[17] to the mother is mandatory,[18] grounded on sound policy consideration,[19] subject only to a narrow exception not alleged to obtain here. [20]) Clearly then, the Agreement’s object to establish a post-divorce joint custody regime between respondent and petitioner over their child under seven years old contravenes Philippine law.

 The Agreement is not only void ab initio for being contrary to law, it has also been repudiated

by the mother when she refused to allow joint custody by the father. The Agreement would be valid if the spouses have not divorced or separated because the law provides for joint parental authority when spouses live together.[21] However, upon separation of the spouses, the mother takes sole custody under the law if the child is below seven years old and any agreement to the contrary is void.  Thus, the law suspends the joint custody regime for (1) children under seven of (2) separated or divorced spouses. Simply put, for a child within this age bracket (and for commonsensical reasons), the law decides for the separated or divorced  parents how best to take care of the child and that is to give custody to the separated mother.  Indeed, the separated parents cannot contract away the provision in the Family Code on the maternal custody of children below seven years anymore than they can privately agree that a mother who is unemployed, immoral, habitually drunk, drug addict, insane or afflicted with a communicable disease will have sole custody of a child under seven as these are reasons deemed compelling to preclude the application of the exclusive maternal custody regime under the second paragraph of Article 213.[22]

 It will not do to argue that the second paragraph of Article 213 of the Family Code applies

only to judicial custodial agreements based on its text that “No child under seven years of age shall be separated from the mother, unless the court finds compelling reasons to order otherwise.” To limit this provision’s enforceability to court sanctioned agreements while placing private agreements beyond its reach is to sanction a double standard in custody regulation of children under seven years old of separated parents. This effectively empowers separated parents, by the simple expedient of avoiding the courts, to subvert a legislative policy vesting to the separated mother sole custody of her children under seven years of age “to avoid a tragedy where a mother has seen her baby torn away from her.”[23] This ignores the legislative basis that “[n]o man can sound the deep sorrows of a mother who is deprived of her child of tender age.”[24] 

 It could very well be that Article 213’s bias favoring one separated parent (mother) over the

other (father) encourages paternal neglect, presumes incapacity for joint parental custody, robs the parents of custodial options, or hijacks decision-making between the separated parents. [25] However, these are objections which question the law’s wisdom not its validity or uniform enforceability. The forum to air and remedy these grievances is the legislature, not this Court. At any rate, the rule’s seeming harshness or undesirability is tempered by ancillary agreements the separated parents may wish to enter such as granting the father visitation and other privileges. These arrangements are not inconsistent with the regime of sole maternal custody under the second paragraph of Article 213 which merely grants to the mother final authority on the care and custody of the minor under seven years of age, in case of disagreements.

 Further, the imposed custodial regime under the second paragraph of Article 213 is limited in duration, lasting only until the child’s seventh year. From the eighth year until the child’s emancipation, the law gives the separated parents freedom, subject to the usual contractual limitations, to agree on custody regimes they see fit to adopt. Lastly, even supposing that petitioner and respondent are not barred from entering into the Agreement for the joint custody of Stephanie,

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respondent repudiated the Agreement by asserting sole custody over Stephanie. Respondent’s act effectively brought the parties back to ambit of the default custodial regime in the second paragraph of Article 213 of the Family Code vesting on respondent sole custody of Stephanie. 

Nor can petitioner rely on the divorce decree’s alleged invalidity - not because the Illinois court lacked jurisdiction or that the divorce decree violated Illinois law, but because the divorce was obtained by his Filipino spouse[26] - to support the Agreement’s enforceability. The argument that foreigners in this jurisdiction are not bound by foreign divorce decrees is hardly novel. Van Dorn v. Romillo[27] settled the matter by holding that an alien spouse of a Filipino is bound by a divorce decree obtained abroad.[28] There, we dismissed the alien divorcee’s Philippine suit for accounting of alleged post-divorce conjugal property and rejected his submission that the foreign divorce (obtained by the Filipino spouse) is not valid in this jurisdiction in this wise:

 There can be no question as to the validity of that Nevada divorce in

any of the States of the United States. The decree is binding on private respondent as an American citizen. For instance, private respondent cannot sue petitioner, as her husband, in any State of the Union. What he is contending in this case is that the divorce is not valid and binding in this jurisdiction, the same being contrary to local law and public policy.

 It is true that owing to the nationality principle embodied in Article 15 of the Civil Code, only Philippine nationals are covered by the policy against absolute divorces the same being considered contrary to our concept of public policy and morality. However, aliens may obtain divorces abroad, which may be recognized in the Philippines, provided they are valid according to their national law. In this case, the divorce in Nevada released private respondent from the marriage from the standards of American law, under which divorce dissolves the marriage. x x x x Thus, pursuant to his national law, private respondent is no longer the husband of petitioner. He would have no standing to sue in the case below as petitioner’s husband entitled to exercise control over conjugal assets. As he is bound by the Decision of his own country’s Court, which validly exercised jurisdiction over him, and whose decision he does not repudiate, he is estopped by his own representation before said Court from asserting his right over the alleged conjugal property. (Emphasis supplied)                  We reiterated Van Dorn in Pilapil v. Ibay-Somera[29] to dismiss criminal complaints for adultery filed by the alien divorcee (who obtained the foreign divorce decree) against his former Filipino spouse because he no longer qualified as “offended spouse” entitled to file the complaints under Philippine procedural rules. Thus, it should be clear by now that a foreign divorce decree carries as much validity against the alien divorcee in this jurisdiction as it does in the jurisdiction of the alien’s nationality, irrespective of who obtained the divorce. 

The Facts of the Case and Nature of ProceedingJustify Remand          Instead of ordering the dismissal of petitioner’s suit, the logical end to its lack of cause of action, we remand the case for the trial court to settle the question of Stephanie’s custody. Stephanie is now nearly 15 years old, thus removing the case outside of the ambit of the mandatory maternal custody regime under Article 213 and bringing it within coverage of the default standard on child custody proceedings – the best interest of the child. [30] As the question of custody is already before the trial court and the child’s parents, by executing the Agreement, initially showed inclination to share custody, it is in the interest of swift and efficient rendition of justice  to allow the parties to take advantage of the court’s jurisdiction, submit evidence on the custodial arrangement best serving

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Stephanie’s interest, and let the trial court render judgment.  This disposition is consistent with the settled doctrine that in child custody proceedings, equity may be invoked to serve the child’s best interest.[31]              WHEREFORE, we REVERSE the Orders dated 1 March 2005 and 23 June 2005 of the Regional Trial Court of  Makati City, Branch 60. The case isREMANDED for further proceedings consistent with this ruling.          SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 169766               March 30, 2011

ESTRELLITA JULIANO-LLAVE, Petitioner, vs.REPUBLIC OF THE PHILIPPINES, HAJA PUTRI ZORAYDA A. TAMANO and ADIB AHMAD A. TAMANO,Respondents.

D E C I S I O N

DEL CASTILLO, J.:

A new law ought to affect the future, not what is past. Hence, in the case of subsequent marriage laws, no vested rights shall be impaired that pertain to the protection of the legitimate union of a married couple.

This petition for review on certiorari assails the Decision1 dated August 17, 2004 of the Court of Appeals (CA) in CA-G.R. CV No. 61762 and its subsequent Resolution2 dated September 13, 2005, which affirmed the Decision of the Regional Trial Court (RTC) of Quezon City, Branch 89 declaring petitioner Estrellita Juliano-Llave’s (Estrellita) marriage to Sen. Mamintal A.J. Tamano (Sen. Tamano) as void ab initio.

Factual Antecedents

Around 11 months before his death, Sen. Tamano married Estrellita twice – initially under the Islamic laws and tradition on May 27, 1993 in Cotabato City3 and, subsequently, under a civil ceremony officiated by an RTC Judge at Malabang, Lanao del Sur on June 2, 1993.4 In their marriage contracts, Sen. Tamano’s civil status was indicated as ‘divorced.’

Since then, Estrellita has been representing herself to the whole world as Sen. Tamano’s wife, and upon his death, his widow.

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On November 23, 1994, private respondents Haja Putri Zorayda A. Tamano (Zorayda) and her son Adib Ahmad A. Tamano (Adib), in their own behalf and in behalf of the rest of Sen. Tamano’s legitimate children with Zorayda,5filed a complaint with the RTC of Quezon City for the declaration of nullity of marriage between Estrellita and Sen. Tamano for being bigamous. The complaint6 alleged, inter alia, that Sen. Tamano married Zorayda on May 31, 1958 under civil rites, and that this marriage remained subsisting when he married Estrellita in 1993. The complaint likewise averred that:

11. The marriage of the deceased and Complainant Zorayda, having been celebrated under the New Civil Code, is therefore governed by this law. Based on Article 35 (4) of the Family Code, the subsequent marriage entered into by deceased Mamintal with Defendant Llave is void ab initio because he contracted the same while his prior marriage to Complainant Zorayda was still subsisting, and his status being declared as "divorced" has no factual or legal basis, because the deceased never divorced Complainant Zorayda in his lifetime, and he could not have validly done so because divorce is not allowed under the New Civil Code;

11.1 Moreover, the deceased did not and could not have divorced Complainant Zorayda by invoking the provision of P.D. 1083, otherwise known as the Code of Muslim Personal Laws, for the simple reason that the marriage of the deceased with Complainant Zorayda was never deemed, legally and factually, to have been one contracted under Muslim law as provided under Art. 186 (2) of P.D. 1083, since they (deceased and Complainant Zorayda) did not register their mutual desire to be thus covered by this law;7

Summons was then served on Estrellita on December 19, 1994. She then asked from the court for an extension of 30 days to file her answer to be counted from January 4, 1995, 8 and again, another 15 days9 or until February 18, 1995, both of which the court granted.10

Instead of submitting her answer, however, Estrellita filed a Motion to Dismiss11 on February 20, 1995 where she declared that Sen. Tamano and Zorayda are both Muslims who were married under the Muslim rites, as had been averred in the latter’s disbarment complaint against Sen. Tamano.12 Estrellita argued that the RTC has no jurisdiction to take cognizance of the case because under Presidential Decree (PD) No. 1083, or the Code of Muslim Personal Laws of the Philippines (Muslim Code), questions and issues involving Muslim marriages and divorce fall under the exclusive jurisdiction of shari’a courts.

The trial court denied Estrellita’s motion and asserted its jurisdiction over the case for declaration of nullity.13Thus, Estrellita filed in November 1995 a certiorari petition with this Court questioning the denial of her Motion to Dismiss. On December 15, 1995, we referred the petition to the CA14 which was docketed thereat as CA-G.R. SP No. 39656.

During the pendency of CA-G.R. SP No. 39656, the RTC continued to try the case since there can be no default in cases of declaration of nullity of marriage even if the respondent failed to file an answer. Estrellita was allowed to participate in the trial while her opposing parties presented their evidence. When it was Estrellita’s turn to adduce evidence, the hearings set for such purpose 15 were postponed mostly at her instance until the trial court, on March 22, 1996, suspended the proceedings16 in view of the CA’s temporary restraining order issued on February 29, 1996, enjoining it from hearing the case.17

Eventually, however, the CA resolved the petition adverse to Estrellita in its Decision dated September 30, 1996.18Estrellita then elevated the appellate court’s judgment to this Court by way of a petition for review on certiorari docketed as G.R. No. 126603.19

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Subsequent to the promulgation of the CA Decision, the RTC ordered Estrellita to present her evidence on June 26, 1997.20 As Estrellita was indisposed on that day, the hearing was reset to July 9, 1997.21 The day before this scheduled hearing, Estrellita again asked for a postponement.22

Unhappy with the delays in the resolution of their case, Zorayda and Adib moved to submit the case for decision,23reasoning that Estrellita had long been delaying the case. Estrellita opposed, on the ground that she has not yet filed her answer as she still awaits the outcome of G.R. No. 126603.24

On June 29, 1998, we upheld the jurisdiction of the RTC of Quezon City,25 stating as one of the reasons that as shari’a courts are not vested with original and exclusive jurisdiction in cases of marriages celebrated under both the Civil Code and PD 1083, the RTC, as a court of general jurisdiction, is not precluded from assuming jurisdiction over such cases. In our Resolution dated August 24, 1998,26 we denied Estrellita’s motion for reconsideration27 with finality.

A few days before this resolution, or on August 18, 1998, the RTC rendered the aforementioned judgment declaring Estrellita’s marriage with Sen. Tamano as void ab initio.28

Ruling of the Regional Trial Court

The RTC, finding that the marital ties of Sen. Tamano and Zorayda were never severed, declared Sen. Tamano’s subsequent marriage to Estrellita as void ab initio for being bigamous under Article 35 of the Family Code of the Philippines and under Article 83 of the Civil Code of the Philippines.29 The court said:

A comparison between Exhibits A and B (supra) immediately shows that the second marriage of the late Senator with [Estrellita] was entered into during the subsistence of his first marriage with [Zorayda]. This renders the subsequent marriage void from the very beginning. The fact that the late Senator declared his civil status as "divorced" will not in any way affect the void character of the second marriage because, in this jurisdiction, divorce obtained by the Filipino spouse is not an acceptable method of terminating the effects of a previous marriage, especially, where the subsequent marriage was solemnized under the Civil Code or Family Code.30

Ruling of the Court of Appeals

In her appeal,31 Estrellita argued that she was denied her right to be heard as

the RTC rendered its judgment even without waiting for the finality of the Decision of the Supreme Court in G.R. No. 126603. She claimed that the RTC should have required her to file her answer after the denial of her motion to dismiss. She maintained that Sen. Tamano is capacitated to marry her as his marriage and subsequent divorce with Zorayda is governed by the Muslim Code. Lastly, she highlighted Zorayda’s lack of legal standing to question the validity of her marriage to the deceased.

In dismissing the appeal in its Decision dated August 17, 2004,32 the CA held that Estrellita can no longer be allowed to file her answer as she was given ample opportunity to be heard but simply ignored it by asking for numerous postponements. She never filed her answer despite the lapse of around 60 days, a period longer than what was prescribed by the rules. It also ruled that Estrellita cannot rely on her pending petition for certiorari with the higher courts since, as an independent and original action, it does not interrupt the proceedings in the trial court.

As to the substantive merit of the case, the CA adjudged that Estrellita’s marriage to Sen. Tamano is void ab initio for being bigamous, reasoning that the marriage of Zorayda and Sen. Tamano is governed by the Civil Code, which does not provide for an absolute divorce. It noted that their first nuptial celebration was under civil rites, while the subsequent Muslim celebration was only

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ceremonial. Zorayda then, according to the CA, had the legal standing to file the action as she is Sen. Tamano’s wife and, hence, the injured party in the senator’s subsequent bigamous marriage with Estrellita.

In its September 13, 2005 Resolution,33 the CA denied Estrellita’s Motion for Reconsideration/Supplemental Motion for Reconsideration where it debunked the additional errors she raised. The CA noted that the allegation of lack of the public prosecutor’s report on the existence of collusion in violation of both Rule 9, Section 3(e) of the Rules of Court34 and Article 48 of the Family Code35 will not invalidate the trial court’s judgment as the proceedings between the parties had been adversarial, negating the existence of collusion. Assuming that the issues have not been joined before the RTC, the same is attributable to Estrellita’s refusal to file an answer. Lastly, the CA disregarded Estrellita’s allegation that the trial court erroneously rendered its judgment way prior to our remand to the RTC of the records of the case ratiocinating that G.R. No. 126603 pertains to the issue on the denial of the Motion to Dismiss, and not to the issue of the validity of Estrellita’s marriage to Sen. Tamano.

The Parties’ Respective Arguments

Reiterating her arguments before the court a quo, Estrellita now argues that the CA erred in upholding the RTC judgment as the latter was prematurely issued, depriving her of the opportunity to file an answer and to present her evidence to dispute the allegations against the validity of her marriage. She claims that Judge Macias v. Macias36 laid down the rule that the filing of a motion to dismiss instead of an answer suspends the period to file an answer and, consequently, the trial court is obliged to suspend proceedings while her motion to dismiss on the ground of lack of jurisdiction has not yet been resolved with finality. She maintains that she merely participated in the RTC hearings because of the trial court’s assurance that the proceedings will be without prejudice to whatever action the High Court will take on her petition questioning the RTC’s jurisdiction and yet, the RTC violated this commitment as it rendered an adverse judgment on August 18, 1998, months before the records of G.R. No. 126603 were remanded to the CA on November 11, 1998. 37 She also questions the lack of a report of the public prosecutor anent a finding of whether there was collusion, this being a prerequisite before further proceeding could be held when a party has failed to file an answer in a suit for declaration of nullity of marriage.

Estrellita is also steadfast in her belief that her marriage with the late senator is valid as the latter was already divorced under the Muslim Code at the time he married her. She asserts that such law automatically applies to the marriage of Zorayda and the deceased without need of registering their consent to be covered by it, as both parties are Muslims whose marriage was solemnized under Muslim law. She pointed out that Sen. Tamano married all his wives under Muslim rites, as attested to by the affidavits of the siblings of the deceased.38

Lastly, Estrellita argues that Zorayda and Adib have no legal standing to file suit because only the husband or the wife can file a complaint for the declaration of nullity of marriage under Supreme Court Resolution A.M. No. 02-11-10-SC.39

Refuting the arguments, the Solicitor General (Sol Gen) defends the CA’s reasoning and stresses that Estrellita was never deprived of her right to be heard; and, that filing an original action for certiorari does not stay the proceedings of the main action before the RTC.

As regards the alleged lack of report of the public prosecutor if there is collusion, the Sol Gen says that this is no longer essential considering the vigorous opposition of Estrellita in the suit that obviously shows the lack of collusion. The Sol Gen also supports private respondents’ legal standing to challenge the validity of Estrellita’s purported marriage with Sen. Tamano, reasoning that any proper interested party may attack directly or collaterally a void marriage, and Zorayda and Adib have such right to file the action as they are the ones prejudiced by the marital union.

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Zorayda and Adib, on the other hand, did not file any comment.

Issues

The issues that must be resolved are the following:

1. Whether the CA erred in affirming the trial court’s judgment, even though the latter was rendered prematurely because: a) the judgment was rendered without waiting for the Supreme Court’s final resolution of her certiorari petition, i.e., G.R. No. 126603; b) she has not yet filed her answer and thus was denied due process; and c) the public prosecutor did not even conduct an investigation whether there was collusion;

2. Whether the marriage between Estrellita and the late Sen. Tamano was bigamous; and

3. Whether Zorayda and Adib have the legal standing to have Estrellita’s marriage declared void ab initio.

Our Ruling

Estrellita’s refusal to file an answer eventually led to the loss of her right to answer; and her pending petition for certiorari/review on certiorari questioning the denial of the motion to dismiss before the higher courts does not at all suspend the trial proceedings of the principal suit before the RTC of Quezon City.

Firstly, it can never be argued that Estrellita was deprived of her right to due process. She was never declared in default, and she even actively participated in the trial to defend her interest.

Estrellita invokes Judge Macias v. Macias40 to justify the suspension of the period to file an answer and of the proceedings in the trial court until her petition for certiorari questioning the validity of the denial of her Motion to Dismiss has been decided by this Court. In said case, we affirmed the following reasoning of the CA which, apparently, is Estrellita’s basis for her argument, to wit:

However, she opted to file, on April 10, 2001, a ‘Motion to Dismiss,’ instead of filing an Answer to the complaint. The filing of said motion suspended the period for her to file her Answer to the complaint. Until said motion is resolved by the Respondent Court with finality, it behooved the Respondent Court to suspend the hearings of the case on the merits. The Respondent Court, on April 19, 2001, issued its Order denying the ‘Motion to Dismiss’ of the Petitioner. Under Section 6, Rule 16 of the 1997 Rules of Civil Procedure [now Section 4], the Petitioner had the balance of the period provided for in Rule 11 of the said Rules but in no case less than five (5) days computed from service on her of the aforesaid Order of the Respondent Court within which to file her Answer to the complaint: x x x41 (Emphasis supplied.)

Estrellita obviously misappreciated Macias. All we pronounced therein is that the trial court is mandated to suspend trial until it finally resolves the motion to dismiss that is filed before it. Nothing in the above excerpt states that the trial court should suspend its proceedings should the issue of the propriety or impropriety of the motion to dismiss be raised before the appellate courts. In Macias, the trial court failed to observe due process in the course of the proceeding of the case because after it denied the wife’s motion to dismiss, it immediately proceeded to allow the husband to present evidence ex parte and resolved the case with undue haste even when, under the rules of procedure, the wife still had time to file an answer. In the instant case, Estrellita had no time left for filing an answer, as she filed the motion to dismiss beyond the extended period earlier granted by the trial court after she filed motions for extension of time to file an answer.

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Estrellita argues that the trial court prematurely issued its judgment, as it should have waited first for the resolution of her Motion to Dismiss before the CA and, subsequently, before this Court. However, in upholding the RTC, the CA correctly ruled that the pendency of a petition for certiorari does not suspend the proceedings before the trial court. "An application for certiorari is an independent action which is not part or a continuation of the trial which resulted in the rendition of the judgment complained of."42 Rule 65 of the Rules of Court is explicit in stating that "[t]he petition shall not interrupt the course of the principal case unless a temporary restraining order or a writ of preliminary injunction has been issued against the public respondent from further proceeding in the case."43 In fact, the trial court respected the CA’s temporary restraining order and only after the CA rendered judgment did the RTC again require Estrellita to present her evidence.

Notably, when the CA judgment was elevated to us by way of Rule 45, we never issued any order precluding the trial court from proceeding with the principal action. With her numerous requests for postponements, Estrellita remained obstinate in refusing to file an answer or to present her evidence when it was her turn to do so, insisting that the trial court should wait first for our decision in G.R. No. 126603. Her failure to file an answer and her refusal to present her evidence were attributable only to herself and she should not be allowed to benefit from her own dilatory tactics to the prejudice of the other party. Sans her answer, the trial court correctly proceeded with the trial and rendered its Decision after it deemed Estrellita to have waived her right to present her side of the story. Neither should the lower court wait for the decision in G.R. No. 126603 to become final and executory, nor should it wait for its records to be remanded back to it because G.R. No. 126603 involves strictly the propriety of the Motion to Dismiss and not the issue of validity of marriage.

The Public Prosecutor issued a report as

to the non-existence of collusion.

Aside from Article 48 of the Family Code and Rule 9, Section 3(e) of the Rules of Court, the Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages (A.M. No. 02-11-10-SC)44 also requries the participation of the public prosecutor in cases involving void marriages. It specifically mandates the prosecutor to submit his investigation report to determine whether there is collusion between the parties:

Sec. 9. Investigation report of public prosecutor.–(1) Within one month after receipt of the court order mentioned in paragraph (3) of Section 8 above, the public prosecutor shall submit a report to the court stating whether the parties are in collusion and serve copies thereof on the parties and their respective counsels, if any.

(2) If the public prosecutor finds that collusion exists, he shall state the basis thereof in his report. The parties shall file their respective comments on the finding of collusion within ten days from receipt of a copy of the report. The court shall set the report for hearing and if convinced that the parties are in collusion, it shall dismiss the petition.

(3) If the public prosecutor reports that no collusion exists, the court shall set the case for pre-trial. It shall be the duty of the public prosecutor to appear for the State at the pre-trial.

Records show that the trial court immediately directed the public prosecutor to submit the required report,45 which we find to have been sufficiently complied with by Assistant City Prosecutor Edgardo T. Paragua in his Manifestation dated March 30, 1995,46 wherein he attested that there could be no collusion between the parties and no fabrication of evidence because Estrellita is not the spouse of any of the private respondents.

Furthermore, the lack of collusion is evident in the case at bar. Even assuming that there is a lack of report of collusion or a lack of participation by the public prosecutor, just as we held in Tuason v.

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Court of Appeals,47 the lack of participation of a fiscal does not invalidate the proceedings in the trial court:

The role of the prosecuting attorney or fiscal in annulment of marriage and legal separation proceedings is to determine whether collusion exists between the parties and to take care that the evidence is not suppressed or fabricated. Petitioner's vehement opposition to the annulment proceedings negates the conclusion that collusion existed between the parties. There is no allegation by the petitioner that evidence was suppressed or fabricated by any of the parties. Under these circumstances, we are convinced that the non-intervention of a prosecuting attorney to assure lack of collusion between the contending parties is not fatal to the validity of the proceedings in the trial court.48

The Civil Code governs the marriage of Zorayda and the late Sen. Tamano; their marriage was never invalidated by PD 1083. Sen. Tamano’s subsequent marriage to Estrellita is void ab initio.

The marriage between the late Sen. Tamano and Zorayda was celebrated in 1958, solemnized under civil and Muslim rites.49 The only law in force governing marriage relationships between Muslims and non-Muslims alike was the Civil Code of 1950, under the provisions of which only one marriage can exist at any given time.50 Under the marriage provisions of the Civil Code, divorce is not recognized except during the effectivity of Republic Act No. 39451 which was not availed of during its effectivity.

As far as Estrellita is concerned, Sen. Tamano’s prior marriage to Zorayda has been severed by way of divorce under PD 1083,52 the law that codified Muslim personal laws. However, PD 1083 cannot benefit Estrellita. Firstly, Article 13(1) thereof provides that the law applies to "marriage and divorce wherein both parties are Muslims, or wherein only the male party is a Muslim and the marriage is solemnized in accordance with Muslim law or this Code in any part of the Philippines." But we already ruled in G.R. No. 126603 that "Article 13 of PD 1083 does not provide for a situation where the parties were married both in civil and Muslim rites."53

Moreover, the Muslim Code took effect only on February 4, 1977, and this law cannot retroactively override the Civil Code which already bestowed certain rights on the marriage of Sen. Tamano and Zorayda. The former explicitly provided for the prospective application of its provisions unless otherwise provided:

Art. 186 (1). Effect of code on past acts. —Acts executed prior to the effectivity of this Code shall be governed by the laws in force at the time of their execution, and nothing herein except as otherwise specifically provided, shall affect their validity or legality or operate to extinguish any right acquired or liability incurred thereby.

It has been held that:

The foregoing provisions are consistent with the principle that all laws operate prospectively, unless the contrary appears or is clearly, plainly and unequivocably expressed or necessarily implied; accordingly, every case of doubt will be resolved against the retroactive operation of laws. Article 186 aforecited enunciates the general rule of the Muslim Code to have its provisions applied prospectively, and implicitly upholds the force and effect of a pre-existing body of law, specifically, the Civil Code – in respect of civil acts that took place before the Muslim Code’s enactment.54

An instance of retroactive application of the Muslim Code is Article 186(2) which states:

A marriage contracted by a Muslim male prior to the effectivity of this Code in accordance with non-Muslim law shall be considered as one contracted under Muslim law provided the spouses register their mutual desire to this effect.

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Even granting that there was registration of mutual consent for the marriage to be considered as one contracted under the Muslim law, the registration of mutual consent between Zorayda and Sen. Tamano will still be ineffective, as both are Muslims whose marriage was celebrated under both civil and Muslim laws. Besides, as we have already settled, the Civil Code governs their personal status since this was in effect at the time of the celebration of their marriage. In view of Sen. Tamano’s prior marriage which subsisted at the time Estrellita married him, their subsequent marriage is correctly adjudged by the CA as void ab initio.

Zorayda and Adib, as the injured parties, have the legal personalities to file the declaration of nullity of marriage. A.M. No. 02-11-10-SC, which limits to only the husband or the wife the filing of a petition for nullity is prospective in application and does not shut out the prior spouse from filing suit if the ground is a bigamous subsequent marriage.

Her marriage covered by the Family Code of the Philippines,55 Estrellita relies on A.M. No. 02-11-10-SC which took effect on March 15, 2003 claiming that under Section 2(a)56 thereof, only the husband or the wife, to the exclusion of others, may file a petition for declaration of absolute nullity, therefore only she and Sen. Tamano may directly attack the validity of their own marriage.

Estrellita claims that only the husband or the wife in a void marriage can file a petition for declaration of nullity of marriage. However, this interpretation does not apply if the reason behind the petition is bigamy.

In explaining why under A.M. No. 02-11-10-SC only the spouses may file the petition to the exclusion of compulsory or intestate heirs, we said:

The Rationale of the Rules on Annulment of Voidable Marriages and Declaration of Absolute Nullity of Void Marriages, Legal Separation and Provisional Orders explicates on Section 2(a) in the following manner, viz:

(1) Only an aggrieved or injured spouse may file petitions for annulment of voidable marriages and declaration of absolute nullity of void marriages. Such petitions cannot be filed by the compulsory or intestate heirs of the spouses or by the State. [Section 2; Section 3, paragraph a]

Only an aggrieved or injured spouse may file a petition for annulment of voidable marriages or declaration of absolute nullity of void marriages. Such petition cannot be filed by compulsory or intestate heirs of the spouses or by the State. The Committee is of the belief that they do not have a legal right to file the petition. Compulsory or intestate heirs have only inchoate rights prior to the death of their predecessor, and hence can only question the validity of the marriage of the spouses upon the death of a spouse in a proceeding for the settlement of the estate of the deceased spouse filed in the regular courts. On the other hand, the concern of the State is to preserve marriage and not to seek its dissolution.57

Note that the Rationale makes it clear that Section 2(a) of A.M. No. 02-11-10-SC refers to the "aggrieved or injured spouse." If Estrellita’s interpretation is employed, the prior spouse is unjustly precluded from filing an action. Surely, this is not what the Rule contemplated.

The subsequent spouse may only be expected to take action if he or she had only discovered during the connubial period that the marriage was bigamous, and especially if the conjugal bliss had already vanished. Should parties in a subsequent marriage benefit from the bigamous marriage, it would not be expected that they would file an action to declare the marriage void and thus, in such circumstance, the "injured spouse" who should be given a legal remedy is the one in a subsisting previous marriage. The latter is clearly the aggrieved party as the bigamous marriage not only threatens the financial and the property ownership aspect of the prior marriage but most of all, it causes an emotional burden to the prior spouse. The subsequent marriage will always be a reminder

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of the infidelity of the spouse and the disregard of the prior marriage which sanctity is protected by the Constitution.

Indeed, Section 2(a) of A.M. No. 02-11-10-SC precludes the son from impugning the subsequent marriage.1âwphi1 But in the case at bar, both Zorayda and Adib have legal personalities to file an action for nullity. Albeit the Supreme Court Resolution governs marriages celebrated under the Family Code, such is prospective in application and does not apply to cases already commenced before March 15, 2003.58

Zorayda and Adib filed the case for declaration of nullity of Estrellita’s marriage in November 1994. While the Family Code is silent with respect to the proper party who can file a petition for declaration of nullity of marriage prior to A.M. No. 02-11-10-SC, it has been held that in a void marriage, in which no marriage has taken place and cannot be the source of rights, any interested party may attack the marriage directly or collaterally without prescription, which may be filed even beyond the lifetime of the parties to the marriage.59 Since A.M. No. 02-11-10-SC does not apply, Adib, as one of the children of the deceased who has property rights as an heir, is likewise considered to be the real party in interest in the suit he and his mother had filed since both of them stand to be benefited or injured by the judgment in the suit.60

Since our Philippine laws protect the marital union of a couple, they should be interpreted in a way that would preserve their respective rights which include striking down bigamous marriages. We thus find the CA Decision correctly rendered.

WHEREFORE, the petition is DENIED. The assailed August 17, 2004 Decision of the Court of Appeals in CA-G.R. CV No. 61762, as well as its subsequent Resolution issued on September 13, 2005, are hereby AFFIRMED.

SO ORDERED.

FIRST DIVISION 

THE REPUBLIC OF THE PHILIPPINES,                              Petitioner,                 - versus -    NORA FE SAGUN,                              Respondent.

  G.R. No. 187567 Present: CORONA, C.J.,        Chairperson,LEONARDO-DE CASTRO,BERSAMIN,DEL CASTILLO, andVILLARAMA, JR., JJ.  Promulgated: February 15, 2012

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

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 DECISION

 VILLARAMA, JR., J.:

          Before us is a petition for review on certiorari filed by the Solicitor General on behalf of the Republic of the Philippines, seeking the reversal of the April 3, 2009 Decision [1] of the Regional Trial Court (RTC), Branch 3, of Baguio City in Spcl. Pro. Case No. 17-R.  The RTC granted the petition[2] filed by respondent Nora Fe Sagun entitled “In re: Judicial Declaration of Election of Filipino Citizenship, Nora Fe Sagun v. The Local Civil Registrar of Baguio City.”

          The facts follow:

          Respondent is the legitimate child of Albert S. Chan, a Chinese national, and Marta Borromeo, a Filipino citizen.  She was born on August 8, 1959 in Baguio City[3] and did not elect Philippine citizenship upon reaching the age of majority.   In 1992, at the age of 33 and after getting married to Alex Sagun, she executed an Oath of Allegiance[4] to the Republic of the Philippines.  Said document was notarized by Atty. Cristeta Leung on December 17, 1992, but was not recorded and registered with the Local Civil Registrar of Baguio City.

Sometime in September 2005, respondent applied for a Philippine passport.  Her application was denied due to the citizenship of her father and there being no annotation on her birth certificate that she has elected Philippine citizenship.  Consequently, she sought a judicial declaration of her election of Philippine citizenship and prayed that the Local Civil Registrar of Baguio City be ordered to annotate the same on her birth certificate.

In her petition, respondent averred that she was raised as a Filipino, speaks Ilocano and Tagalog fluently and attended local schools in Baguio City, including Holy Family Academy and the Saint Louis University.  Respondent claimed that despite her part-Chinese ancestry, she always thought of herself as a Filipino.  She is a registered voter of Precinct No. 0419A of Barangay Manuel A. Roxas in Baguio City and had voted in local and national elections as shown in the Voter Certification[5] issued by Atty. Maribelle Uminga of the Commission on Elections of Baguio City.

 She asserted that by virtue of her positive acts, she has effectively elected Philippine citizenship and such fact should be annotated on her record of birth so as to entitle her to the issuance of a Philippine passport. 

          On August 7, 2007, the Office of the Solicitor General (OSG) entered its appearance as counsel for the Republic of the Philippines and authorized the City Prosecutor of Baguio City to appear in the above mentioned case.[6]   However, no comment was filed by the City Prosecutor.

          After conducting a hearing, the trial court rendered the assailed Decision on April 3, 2009 granting the petition and declaring respondent a Filipino citizen.  Thefallo of the decision reads:

WHEREFORE, the instant petition is hereby GRANTED. Petitioner Nora Fe Sagun y Chan is hereby DECLARED [a] FILIPINO CITIZEN, having chosen or elected Filipino citizenship.

Upon payment of the required fees, the Local Civil Registrar of Baguio City is hereby directed to annotate [on] her birth certificate, this judicial declaration of Filipino citizenship of said petitioner.

IT IS SO ORDERED.[7]

          Contending that the lower court erred in so ruling, petitioner, through the OSG, directly filed the instant recourse via a petition for review on certiorari before us. Petitioner raises the following issues:

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I            Whether or not an action or proceeding for judicial declaration of Philippine citizenship is procedurally and jurisdictionally permissible; and,

II            Whether or not an election of Philippine citizenship, made twelve (12) years after reaching the age of majority, is considered to have been made “within a reasonable time” as interpreted by jurisprudence.[8]

Petitioner argues that respondent’s petition before the RTC was improper on two counts: for one, law and jurisprudence clearly contemplate no judicial action or proceeding for the declaration of Philippine citizenship; and for another, the pleaded registration of the oath of allegiance with the local civil registry and its annotation on respondent’s birth certificate are the ministerial duties of the registrar; hence, they require no court order. Petitioner asserts that respondent’s petition before the trial court seeking a judicial declaration of her election of Philippine citizenship undeniably entails a determination and consequent declaration of her status as a Filipino citizen which is not allowed under our legal system.  Petitioner also argues that if respondent’s intention in filing the petition is ultimately to have her oath of allegiance registered with the local civil registry and annotated on her birth certificate, then she does not have to resort to court proceedings. 

Petitioner further argues that even assuming that respondent’s action is sanctioned, the trial court erred in finding respondent as having duly elected Philippine citizenship since her purported election was not in accordance with the procedure prescribed by law and was not made within a “reasonable time.”  Petitioner points out that while respondent executed an oath of allegiance before a notary public, there was no affidavit of her election of Philippine citizenship.  Additionally, her oath of allegiance which was not registered with the nearest local civil registry was executed when she was already 33 years old or 12 years after she reached the age of majority.  Accordingly, it was made beyond the period allowed by law. 

In her Comment,[9] respondent avers that notwithstanding her failure to formally elect Filipino citizenship upon reaching the age of majority, she has in fact effectively elected Filipino citizenship by her performance of positive acts, among which is the exercise of the right of suffrage.  She claims that she had voted and participated in all local and national elections from the time she was of legal age. She also insists that she is a Filipino citizen despite the fact that her “election” of Philippine citizenship was delayed and unregistered.

In reply,[10] petitioner argues that the special circumstances invoked by respondent, like her continuous and uninterrupted stay in the Philippines, her having been educated in schools in the country, her choice of staying here despite the naturalization of her parents as American citizens, and her being a registered voter, cannot confer on her Philippine citizenship as the law specifically provides the requirements for acquisition of Philippine citizenship by election.

Essentially, the issues for our resolution are: (1) whether respondent’s petition for declaration of election of Philippine citizenship is sanctioned by the Rules of Court and jurisprudence; (2) whether respondent has effectively elected Philippine citizenship in accordance with the procedure prescribed by law.

The petition is meritorious.

At the outset, it is necessary to stress that a direct recourse to this Court from the decisions, final resolutions and orders of the RTC may be taken where only questions of law are raised or involved. There is a question of law when the doubt or difference arises as to what the law is on a certain state of facts, which does not call for an examination of the probative value of the evidence presented by the parties-litigants. On the other hand, there is a question of fact when the doubt or controversy arises as to the truth or falsity of the alleged facts. Simply put, when there is no dispute

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as to fact, the question of whether the conclusion drawn therefrom is correct or not, is a question of law.[11]

In the present case, petitioner assails the propriety of the decision of the trial court declaring respondent a Filipino citizen after finding that respondent was able to substantiate her election of Filipino citizenship. Petitioner contends that respondent’s petition for judicial declaration of election of Philippine citizenship is procedurally and jurisdictionally impermissible. Verily, petitioner has raised questions of law as the resolution of these issues rest solely on what the law provides given the attendant circumstances.

In granting the petition, the trial court stated:

This Court believes that petitioner was able to fully substantiate her petition regarding her election of Filipino citizenship, and the Local Civil Registrar of Baguio City should be ordered to annotate in her birth certificate her election of Filipino citizenship.  This Court adds that the petitioner’s election of Filipino citizenship should be welcomed by this country and people because the petitioner has the choice to elect citizenship of powerful countries like the United States of America and China, however, petitioner has chosen Filipino citizenship because she grew up in this country, and has learned to love the Philippines.   Her choice of electing Filipino citizenship is, in fact, a testimony that many of our people still wish to live in the Philippines, and are very proud of our country.

WHEREFORE, the instant petition is hereby GRANTED. Petitioner Nora Fe Sagun y Chan is hereby DECLARED as FILIPINO CITIZEN, having chosen or elected Filipino citizenship.[12]

          For sure, this Court has consistently ruled that there is no proceeding established by law, or the Rules for the judicial declaration of the citizenship of an individual. [13]  There is no specific legislation authorizing the institution of a judicial proceeding to declare that a given person is part of our citizenry.[14]  This was our ruling in Yung Uan Chu v. Republic[15] citing the early case of Tan v. Republic of the Philippines,[16] where we clearly stated:

            Under our laws, there can be no action or proceeding for the judicial declaration of the citizenship of an individual.  Courts of justice exist for settlement of justiciable controversies, which imply a given right, legally demandable and enforceable, an act or omission violative of said right, and a remedy, granted or sanctioned by law, for said breach of right.  As an incident only of the adjudication of the rights of the parties to a controversy, the court may pass upon, and make a pronouncement relative to their status. Otherwise, such a pronouncement is beyond judicial power. x x x

Clearly, it was erroneous for the trial court to make a specific declaration of respondent’s Filipino citizenship as such pronouncement was not within the court’s competence.

As to the propriety of respondent’s petition seeking a judicial declaration of election of Philippine citizenship, it is imperative that we determine whether respondent is required under the law to make an election and if so, whether she has complied with the procedural requirements in the election of Philippine citizenship.

          When respondent was born on August 8, 1959, the governing charter was the 1935 Constitution, which declares as citizens of the Philippines those whose mothers are citizens of the Philippines and elect Philippine citizenship upon reaching the age of majority.  Sec. 1, Art. IV of the 1935 Constitution reads:

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Section 1.  The following are citizens of the Philippines:x x x x(4) Those whose mothers are citizens of the Philippines and, upon reaching

the age of majority, elect Philippine citizenship.

          Under Article IV, Section 1(4) of the 1935 Constitution, the citizenship of a legitimate child born of a Filipino mother and an alien father followed the citizenship of the father, unless, upon reaching the age of majority, the child elected Philippine citizenship.  The right to elect Philippine citizenship was recognized in the 1973 Constitution when it provided that “[t]hose who elect Philippine citizenship pursuant to the provisions of the Constitution of nineteen hundred and thirty-five” are citizens of the Philippines.[17]  Likewise, this recognition by the 1973 Constitution was carried over to the 1987 Constitution which states that “[t]hose born before January 17, 1973 of Filipino mothers, who elect Philippine citizenship upon reaching the age of majority” are Philippine citizens.[18] It should be noted, however, that the 1973 and 1987 Constitutional provisions on the election of Philippine citizenship should not be understood as having a curative effect on any irregularity in the acquisition of citizenship for those covered by the 1935 Constitution.  If the citizenship of a person was subject to challenge under the old charter, it remains subject to challenge under the new charter even if the judicial challenge had not been commenced before the effectivity of the new Constitution.[19]

          Being a legitimate child, respondent’s citizenship followed that of her father who is Chinese, unless upon reaching the age of majority, she elects Philippine citizenship.  It is a settled rule that only legitimate children follow the citizenship of the father and that illegitimate children are under the parental authority of the mother and follow her nationality. [20]  An illegitimate child of Filipina need not perform any act to confer upon him all the rights and privileges attached to citizens of the Philippines; he automatically becomes a citizen himself.[21]  But in the case of respondent, for her to be considered a Filipino citizen, she must have validly elected Philippine citizenship upon reaching the age of majority.

Commonwealth Act (C.A.) No. 625,[22] enacted pursuant to Section 1(4), Article IV of the 1935 Constitution, prescribes the procedure that should be followed in order to make a valid election of Philippine citizenship, to wit:

Section 1.  The option to elect Philippine citizenship in accordance with subsection (4), [S]ection 1, Article IV, of the Constitution shall be expressed in a statement to be signed and sworn to by the party concerned before any officer authorized to administer oaths, and shall be filed with the nearest civil registry.  The said party shall accompany the aforesaid statement with the oath of allegiance to the Constitution and the Government of the Philippines.

Based on the foregoing, the statutory formalities of electing Philippine citizenship are: (1) a statement of election under oath; (2) an oath of allegiance to the Constitution and Government of the Philippines; and (3) registration of the statement of election and of the oath with the nearest civil registry.[23]

          Furthermore, no election of Philippine citizenship shall be accepted for registration under C.A. No. 625 unless the party exercising the right of election has complied with the requirements of the Alien Registration Act of 1950.   In other words, he should first be required to register as an alien.[24]  Pertinently, the person electing Philippine citizenship is required to file a petition with the Commission of Immigration and Deportation (now Bureau of Immigration) for the cancellation of his alien certificate of registration based on his aforesaid election of Philippine citizenship and said Office will initially decide, based on the evidence presented the validity or invalidity of said election.[25]  Afterwards, the same is elevated to the Ministry (now Department) of Justice for final determination and review.[26]

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It should be stressed that there is no specific statutory or procedural rule which authorizes the direct filing of a petition for declaration of election of Philippine citizenship before the courts.   The special proceeding provided under Section 2, Rule 108 of the Rules of Court on Cancellation or Correction of Entries in the Civil Registry, merely allows any interested party to file an action for cancellation or correction of entry in the civil registry, i.e., election, loss and recovery of citizenship, which is not the relief prayed for by the respondent. 

Be that as it may, even if we set aside this procedural infirmity, still the trial court’s conclusion that respondent duly elected Philippine citizenship is erroneous since the records undisputably show that respondent failed to comply with the legal requirements for a valid election.  Specifically, respondent had not executed a sworn statement of her election of Philippine citizenship.  The only documentary evidence submitted by respondent in support of her claim of alleged election was her oath of allegiance, executed 12 years after she reached the age of majority, which was unregistered.  As aptly pointed out by the petitioner, even assuming arguendothat respondent’s oath of allegiance suffices, its execution was not within a reasonable time after respondent attained the age of majority and was not registered with the nearest civil registry as required under Section 1 of C.A. No. 625.  The phrase “reasonable time” has been interpreted to mean that the election should be made generally within three (3) years from reaching the age of majority.[27] Moreover, there was no satisfactory explanation proffered by respondent for the delay and the failure to register with the nearest local civil registry.

Based on the foregoing circumstances, respondent clearly failed to comply with the procedural requirements for a valid and effective election of Philippine citizenship. Respondent cannot assert that the exercise of suffrage and the participation in election exercises constitutes a positive act of election of Philippine citizenship since the law specifically lays down the requirements for acquisition of citizenship by election. The mere exercise of suffrage, continuous and uninterrupted stay in the Philippines, and other similar acts showing exercise of Philippine citizenship cannot take the place of election of Philippine citizenship. Hence, respondent cannot now be allowed to seek the intervention of the court to confer upon her Philippine citizenship when clearly she has failed to validly elect Philippine citizenship.  As we held in Ching,[28] the prescribed procedure in electing Philippine citizenship is certainly not a tedious and painstaking process.  All that is required of the elector is to execute an affidavit of election of Philippine citizenship and, thereafter, file the same with the nearest civil registry.  Having failed to comply with the foregoing requirements, respondent’s petition before the trial court must be denied.

WHEREFORE, the petition is GRANTED.  The Decision dated April 3, 2009 of the Regional Trial Court, Branch 3 of Baguio City in Spcl. Pro. Case No. 17-R is REVERSED and SET ASIDE. The petition for judicial declaration of election of Philippine citizenship filed by respondent Nora Fe Sagun is herebyDISMISSED for lack of merit.

No costs.

SO ORDERED.

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FIRST DIVISION

MUNICIPALITY OF STA. FE,                   G.R. No. 140474                                                            Petitioner,                                                          Present:                                                                                                                            PUNO, C.J., Chairperson,

-         versus -                                         SANDOVAL-GUTIERREZ,CORONA,

                                                                   AZCUNA, and                                                                   GARCIA, JJ.MUNICIPALITY OF ARITAO,                                     Respondent.

Promulgated:                                                                                     September 21, 2007 X -------------------------------------------------------------------------------------- X 

DECISION AZCUNA, J.:

 This is an appeal by petition for review on certiorari under Rule 45 of the Rules of Court of

the September 30, 1999 Decision[1] of the Court of Appeals (CA) affirming in toto the August 27, 1992 Order[2] of the Regional Trial Court (RTC) of Bayombong, Nueva Vizcaya, Branch 28, which dismissed Civil Case No. 2821 for lack of jurisdiction.   

 On October 16, 1980, petitioner Municipality of Sta. Fe, in the Province of Nueva Vizcaya,

filed before the RTC of Bayombong, Nueva Vizcaya, Branch 28, Civil Case No. 2821 for the Determination of Boundary Dispute involving the barangays of Bantinan and Canabuan. As the parties failed to amicably settle during the pre-trial stage, trial on the merits ensued.

 The trial was almost over, with petitioner’s rebuttal witness already under cross-examination,

when the court, realizing its oversight under existing law, ordered onDecember 9, 1988, the suspension of the proceedings and the referral of the case to the Sangguniang Panlalawigan of Nueva Vizcaya.[3] In turn, the Sanggunianconcerned passed on the matter to its Committee on Legal Affairs, Ordinances and Resolutions, which recommended adopting Resolution No. 64 dated September 14, 1979 of the former members of its Provincial Board. [4] Said resolution previously resolved to adjudicate the barangays of Bantinan and Canabuan as parts of respondent’s territorial jurisdiction and enjoin petitioner from exercising its governmental functions within the same. Subsequently, as per Resolution No. 357 dated November 13, 1989, the Sangguniang Panlalawigan approved the Committee’s recommendation but endorsed the boundary dispute to the RTC for further proceedings and preservation of the status quo pending finality of the case.

 Back in the RTC, respondent moved to consider Resolution No. 64 as final and executory. In

its Order dated February 12, 1991,[5] the trial court, however, resolved to deny the motion ruling that since there was no amicable settlement reached at the time the Provincial Board had exceeded its authority in issuing a “decision” favoring a party. The court held that, under the law in force, the purpose of such referral was only to afford the parties an opportunity to amicably settle with the intervention and assistance of the Provincial Board and that in case no such settlement is reached, the court proceedings shall be resumed.

 

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Subsequently, respondent again filed a motion on June 23, 1992,[6] this time praying for the dismissal of the case for lack of jurisdiction. The ground relied upon was that under the prevailing law at the time of the filing of the motion, the power to try and decide municipal boundary disputes already belonged to the Sangguniang Panlalawigan and no longer with the trial court, primarily citing the doctrine laid down by this Court in Municipality of Sogod v. Rosal.[7]       

 On August 27, 1992, the trial court resolved to grant the motion, thus:  

A close study of the decision of the Honorable Supreme Court in the Municipality of Sogod case in relation to this case palpably shows that, contrary to the claim of respondentMunicipality of Sta. Fe, through counsel, it involves boundary dispute as in this case. 

As to the applicable law on the question of which agency of the Government can take cognizance of this case or whether or not this Court should proceed in exercising jurisdiction over this case, the same [had] been squarely resolved by the [Honorable] Supreme Court in the Municipality of Sogod case in this wise: “It is worthy to note, however, that up to this time, the controversy between these two Municipalities has not been settled. However, the dispute has already been overtaken by events, namely, the enactment of the 1987 Constitution and the New Local Government Code x x x  which imposed new mandatory requirements and procedures on the fixing of boundaries between municipalities. The 1987 Constitution now mandates that [‘]no province, city, municipality or barangay may be created, divided, merged, abolished or its boundary substantially altered except in accordance with the criteria established in the local government code and subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected.[’] x x x Hence, any alteration or modification of the boundaries of the municipalities shall only be by a law to be enacted by Congress subject to the approval by a majority of the votes cast in a plebiscite in the barrios affected (Section 134, Local Government Code). Thus, under present laws, the function of the provincial board to fix the municipal boundaries are now strictly limited to the factual determination of the boundary lines between municipalities, to be specified by natural boundaries or by metes and bounds in accordance with laws creating said municipalities.” 

In view of the above ruling, this Court can do no less but to declare that this case has been overtaken by events, namely, the enactment of the 1987 Constitution and the Local Government Code of 1991. The Constitution requires a plebiscite, whereas the Local Government Code of 1991 provides, as follows: “Sec. 6. Authority to Create Local Government Units. – A local government unit may be created, divided, merged, abolished, or its boundaries substantially altered either by law enacted by Congress in the case of a province, city, municipality, or any other political subdivision, or by ordinance passed by the [s]angguniang [p]anlalawigan, or sangguniang panglungsod concerned in the case of a barangay located within its territorial jurisdiction, subject to such limitations and requirements prescribed in this Code.”[8]

 The motion for reconsideration of the aforesaid Order having been denied,[9] an appeal was

elevated by petitioner to the CA. The CA, however, affirmed in totothe assailed Order, holding that: 

We are not unmindful of the rule that where a court has already obtained and is exercising jurisdiction over a controversy, its jurisdiction to proceed to the final determination of the case is not affected by new legislation placing jurisdiction over such proceedings in another tribunal or body. This rule, however, is not without exception. It is not applicable when the change in jurisdiction is curative in character. As far as boundary disputes are concerned, the 1987 Constitution is the latest will of

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the people, therefore, the same should be given retroactive effect on cases pending before courts after its ratification. It mandates that “no province, city, municipality or barangay may be created, divided, merged, abolished or its boundary substantially altered except in accordance with the criteria established in the Local Government Code and subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected.”

 On the other hand, the Local Government Code of 1991 provides that “[a]

local government unit may be created, divided, merged, abolished, or its boundaries substantially altered either by law enacted by Congress in the case of a province, city, municipality, or any other political subdivision, or by ordinance passed by the [s]angguniang [p]anlalawigan or [s]angguniang [p]anglungsod concerned in the case of a barangay located within its territorial jurisdiction, subject to such limitations and requirements prescribed in this Code (Book I, Title One, Chapter 2, Section 6, Local Government Code).

 Section 118, Title Nine, Book I of the same Code likewise provides: “SEC 118. Jurisdictional Responsibility for Settlement of Boundary Dispute. –

Boundary disputes between and among local government units shall, as much as possible, be settled amicably. To this end:

 x x x

 a.)                Boundary disputes involving two (2) or more municipalities within the

same province shall be referred for settlement to the sangguniang panlalawigan concerned;

 x x x”

 Since the Local Government Code of 1991 is the latest will of the people

expressed through Congress on how boundary disputes should be resolved, the same must prevail over previous ones. It must be emphasized that the laws on the creation of local government units as well as settling boundary disputes are political in character, hence, can be changed from time to time and the latest will of the people should always prevail. In the instant case, there is nothing wrong in holding that Regional Trial Courts no longer have jurisdiction over boundary disputes.[10]

 Before this Court, petitioner submits that the CA erred when it affirmed the dismissal of the

case for lack of jurisdiction by upholding the RTC’s application of the doctrine enunciated in the Municipality of Sogod, namely, that being political in character, this case has been overtaken by different laws which should now prevail. Petitioner also claims that the CA erred in relying on the provisions of the 1987 Constitution and the Local Government Code (LGC) of 1991 on the creation, division, merger, abolition, and alteration of boundaries of political units instead of the specific provisions on the settlement of boundary disputes.[11]

 The petition fails.

 As early as October 1, 1917, the procedure for the settlement of municipal boundary

disputes was already set forth when Act No. 2711 or the Revised Administrative Code (RAC) took into effect.[12] At that time, Section 2167 of the law provided:

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“SEC. 2167. Municipal boundary disputes – How settled. – Disputes as to jurisdiction of municipal governments over places or barrios shall be decided by the provincial boards of the provinces in which such municipalities are situated, after an investigation at which the municipalities concerned shall be duly heard. From the decision of the provincial board appeal may be taken by the municipality aggrieved to the Secretary of the Interior, whose decision shall be final x x x.”[13]

 On June 17, 1970,[14] Republic Act (R.A.) No. 6128[15] was approved amending the afore-

quoted section of the RAC, Sec. 1 thereof stated: 

SECTION 1. Section Two thousand one hundred sixty-seven of the Revised Administrative Code, as amended, is hereby further amended to read as follows:   

 "SEC. 2167. Municipal Boundary Disputes. – How Settled. – Disputes as to

jurisdiction of municipal governments over places, or barrios shall be heard and decided by the Court of First Instance of the Province where the municipalities concerned are situated x x x: Provided, That after joinder of issues, the Court shall suspend proceedings and shall refer the dispute to the Provincial Board x x x concerned for the purpose of affording the parties an opportunity to reach an amicable settlement with the intervention and assistance of the said Provincial Board x x x;Provided, further, That in case no amicable settlement is reached within sixty days from the date the dispute was referred to the Provincial Board x x x concerned, the court proceedings shall be resumed. The case shall be decided by the said Court of First Instance within one year from resumption of the court proceedings, and appeal may be taken from the said decision within the time and in the manner prescribed in Rule 41 or Rule 42, as the case may be, of the Rules of Court x x x”  Subsequently, however, with the approval of Batas Pambansa (B.P.) Blg. 337 (otherwise

known as the Local Government Code of 1983) on February 10, 1983,[16] Sec. 2167, as amended, was repealed.[17] In particular, Sec. 79 of the Code read:

 SEC. 79. Municipal Boundary Disputes. – Disputes as to the jurisdiction of

municipal governments over areas or barangays shall be heard and decided by the sangguniang panlalawigan   of the province where the municipalities concerned are situated x x x in case no settlement is reached within sixty days from the date the dispute was referred to thesangguniang panlalawigan concerned, said dispute shall be elevated to the Regional Trial Court of the province which first took cognizance of the dispute. The case shall be decided by the said court within one year from the start of proceedings and appeal may be taken from the decision within the time and in the manner prescribed by the Rules of Court.[18]

 Almost a decade passed and R.A. No. 7160 or the LGC of 1991 was signed into law

on October 10, 1991 and took effect on January 1, 1992.[19] As the latest law governing jurisdiction over the settlement of boundary disputes, Sections 118 and 119 of the Code now mandate:

 SEC. 118. Jurisdictional Responsibility for Settlement of Boundary Dispute. –

Boundary disputes between and among local government units shall, as much as possible, be settled amicably. To this end:

 x x x

 (b) Boundary disputes involving two (2) or more municipalities within the

same province shall be referred for settlement to the sangguniang panlalawigan   concerned .  

 

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x x x (e) In the event the sanggunian fails to effect an amicable settlement within

sixty (60) days from the date the dispute was referred thereto, it shall issue a certification to that effect. Thereafter, the dispute shall be formally tried by the sanggunian concerned which shall decide the issue within sixty (60) days from the date of the certification referred to above.  

 SEC. 119. Appeal. – Within the time and manner prescribed by the Rules of

Court, any party may elevate the decision of the sanggunian concerned to the proper Regional Trial Court having jurisdiction over the area in dispute. The Regional Trial Court shall decide the appeal within one (1) year from the filing thereof. Pending final resolution of the disputed area prior to the dispute shall be maintained and continued for all legal purposes.[20]

  

This Court agrees with petitioner’s contention that the trial court had jurisdiction to take cognizance of the complaint when it was filed on October 16, 1980 since the prevailing law then was Section 2167 of the RAC, as amended by Sec. 1 of R.A. No. 6128, which granted the Court of First Instance (now RTC) the jurisdiction to hear and decide cases of municipal boundary disputes.  The antecedents of the Municipality of Sogod case reveal that it dealt with the trial court’s dismissal of cases filed for lack of jurisdiction because at the time of the institution of the civil actions, the law in force was the old provision of Sec. 2167 of the RAC, which empowered the provincial boards, not the trial courts, to hear and resolve such cases.

 The main point of inquiry, however, is whether the CA erred in affirming the trial court’s

dismissal of the instant case for lack of jurisdiction on the ground that at the time of the filing of the motion to dismiss the original jurisdiction to hear and decide, the case had been vested on the Sangguniang Panlalawigan and no longer on the RTC.

 The Court rules that the appellate court did not err. The difference in the factual setting

notwithstanding, Municipality of Sogod still applies in the sense that similar thereto the pendency of the present case has also been overtaken by events – the ratification of the 1987 Constitution and the enactment of the LGC of 1991. 

As shown above, since the effectivity of R.A. No. 6128, the Sangguniang Panlalawigan has been the primary tribunal responsible in the amicable settlement of boundary disputes between or among two or more municipalities located in the same province. With the LGC of 1991, however, a major change has been introduced – that in the event the Sanggunian fails to effect a settlement, it shall not only issue a certification 

to that effect but must also formally hear and decide the case within the reglementary period. Rule III of the Rules and Regulations Implementing the LGC of 1991[21]outlines the procedure for the settlement of boundary disputes as follows: 

ART. 17. Procedures for Settling Boundary Disputes. -  The following procedures shall govern the settlement of boundary disputes:

 (a.)              Filing of petition – The sanggunian concerned may initiate action by filing

a petition, in the form of a resolution, with the sanggunian having jurisdiction over the dispute.

 (b.)             Contents of petition – The petition shall state the grounds, reasons or

justifications therefore. 

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(c.)              Documents attached to petition – The petition shall be accompanied by: 

(1)               Duly authenticated copy of the law or statute creating the LGU or any other documents showing proof of creation of the LGU;

(2)               Provincial, city, municipal or barangay map, as the case may be, duly certified by the LMB;

(3)               Technical description of the boundaries of the LGUs concerned;(4)               Written certification of the provincial, city, or municipal assessor,

as the case may be, as to territorial jurisdiction over the disputed area according records in custody;

(5)               Written declarations or sworn statements of the people residing in the disputed area; and

(6)               Such other documents or information as may be required by the sanggunian hearing the dispute.

 (d.)             Answer of adverse party – Upon receipt by the sanggunian concerned of

the petition together with the required documents, the LGU or LGUs complained against shall be furnished copies thereof and shall be given fifteen (15) working days within which to file their answers.

 (e.)              Hearing – Within five (5) working days after receipt of the answer of the

adverse party, the sanggunian shall hear the case and allow the parties concerned to present their respective evidences.

 (f.)               Joint hearing – When two or more sanggunians jointly hear a case, they

may sit en banc or designate their respective representatives. Where representatives are designated, there shall be an equal number of representatives from each sanggunian. They shall elect from among themselves a presiding officer and a secretary. In case of disagreement, selection shall be by drawing lot.

 (g.)              Failure to settle – In the event the sanggunian fails to amicably settle the

dispute within sixty (60) days from the date such dispute was referred thereto, it shall issue a certification to that effect and copies thereof shall be furnished the parties concerned.

 (h.)              Decision – Within sixty (60) days from the date the certification was

issued, the dispute shall be formally tried and decided by the sanggunian concerned. Copies of the decision shall, within fifteen (15) days from the promulgation thereof, be furnished the parties concerned, DILG, local assessor, Comelec, NSO, and other NGAs concerned.

 (i.)                Appeal – Within the time and manner prescribed by the Rules of Court,

any party may elevate the decision of the sanggunian concerned to the proper Regional Trial Court having jurisdiction over the dispute by filing therewith the appropriate pleading, stating among others, the nature of the dispute, the decision of the sanggunian concerned and the reasons for appealing therefrom. The Regional Trial Court shall decide the case within one (1) year from the filing thereof. Decisions on boundary disputes promulgated jointly by two (2) or moresangguniang panlalawigan shall be heard by the Regional Trial Court of the province which first took cognizance of the dispute.    

 

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ART. 18. Maintenance of Status Quo. – Pending final resolution of the dispute, the status of the affected area prior to the dispute shall be maintained and continued for all purposes.

 ART. 19. Official Custodian. – The DILG shall be the official custodian of

copies of all documents on boundary disputes of the LGUs. 

Notably, unlike R.A. No. 6128 and B.P. 337, the LGC of 1991 grants an expanded role on the Sangguniang Panlalawigan concerned in resolving cases of municipal boundary disputes. Aside from having the function of bringing the contending parties together and intervening or assisting in the amicable settlement of the case, the Sangguniang Panlalawigan is now specifically vested with original jurisdiction to actually hear and decide the dispute in accordance with the procedures laid down in the law and its implementing rules and regulations. This situation, in effect, reverts to the old rule under the RAC, prior to its amendment by R.A. No. 6128, under which the provincial boards were empowered to investigate, hear the parties and eventually decide the case on the basis thereof. On the other hand, under the LGC of 1991, the trial court loses its power to try, at the first instance, cases of municipal boundary disputes. Only in the exercise of its appellate jurisdiction can the proper RTC decide the case, on appeal, should any party aggrieved by the decision of the Sangguniang Panlalawigan elevate the same.

 Considering the foregoing, the RTC correctly dismissed the case for lack of jurisdiction.

Under the rules, it was the responsibility of the court to dismiss an action “whenever it appears that [it] has no jurisdiction over the subject matter.”[22] Indeed, the RTC acted accordingly because at the time of the filing of the motion to dismiss its want of jurisdiction was evident. It was duty-bound to take judicial notice of the parameters of its jurisdiction as the choice of the proper forum was crucial – for the decision of a court or tribunal without jurisdiction is a total nullity and may be struck down at any time by this Court as it would never become final and executory.[23] Likewise, the standing rule is that dismissal of a case for lack of jurisdiction may be raised at any stage of the proceedings since jurisdiction is conferred by law and lack of it affects the very authority of the court to take cognizance of and to render judgment on the action; [24] otherwise, the inevitable consequence would make the court’s decision a “lawless” thing.[25] As correctly pointed out by the RTC:

 x x x It will be a futile act for the Court to rule on the case concerning a

boundary dispute if its decision will not after all be followed by the people concerned because the decision is totally unacceptable to them. How then can the Court enforce its decision? x x x.[26]

 Petitioner, however, contends that the provisions of the 1987 Constitution and the LGC of

1991 on the settlement of municipal boundary disputes should be applied prospectively.  The Court is not unmindful of the rule that where a court has already obtained and is exercising jurisdiction over a controversy, its jurisdiction to proceed to the final determination of the case is not affected by new legislation placing jurisdiction over such proceedings in another tribunal.[27] An exception to this rule, however, lies where the statute either expressly provides or is construed to the effect that it is intended to operate on actions pending before its enactment. [28]Hence, this Court has held that a law may be given retroactive effect if it so provided expressly or if retroactivity is necessarily implied therefrom and no vested right or obligation of contract is impaired and it does not deprive a person of property without due process of law.[29]  

 It is readily apparent from the provisions of the 1987 Constitution and the LGC of 1991 that

their new provisions and requirements regarding changes in the constitution of political units are intended to apply to all existing political subsidiaries immediately, i.e., including those with pending cases filed under the previous regime, since the overarching consideration of these new provisions is the need to empower the local government units without further delay.

 

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Furthermore, the RTC can still review the decision of the Sanguniang Panlalawigan under the new set-up, in the exercise of its appellate jurisdiction, so no substantial prejudice is caused by allowing retroactivity.

 The Court, therefore, sees no error, much less grave abuse of discretion, on the part of the

CA in affirming the trial court’s dismissal of petitioner’s complaint. WHEREFORE, the petition is DENIED for lack of merit. No costs. SO ORDERED.

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