Adr Iac Cases

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G.R. No. 164517 June 30, 2008BF CORPORATION, petitioner, vs. MANILA INTERNATIONAL AIRPORT AUTHORITY,respondent.

D E C I S I O N

VELASCO, JR., J.:

In this petition for review under Rule 45, petitioner BF Corporation (BF) assails the Decision ofthe Court of Appeals (CA) that disallowed BF to re-implead the Manila International AirportAuthority (MIAA) as a party-defendant in Civil Case No. 66060 entitled BF Corporation v. TokyuConstruction Co., Ltd., Mitsubishi Corporation, A.M. Oreta & Co., Inc., and Manila InternationalAirport Authority.

Mitsubishi Corporation (Mitsubishi), Tokyu Construction Co., Ltd. (Tokyu), A.M. Oreta & Co., Inc.

(Oreta), and BF formed themselves into the MTOB Consortium (Consortium) to participate inthe bidding for the construction of the Ninoy Aquino International Airport Terminal II (NAIA II)Project. MIAA awarded the contract to the Consortium, recognizing that the Consortium was adistinct and separate entity from the four member corporations.

Unfortunately, the four members had serious business differences, including the division of thecontract price, forcing BF to file on January 10, 1997, with the Regional Trial Court (RTC) in PasigCity, an action for Specific Performance, Rescission, and Damages with application for aTemporary Restraining Order (TRO), docketed as Civil Case No. 66060. BF alleged in itscomplaint that Tokyu and Mitsubishi invited BF to form a consortium for the NAIA II Project and

after the members of the Consortium reached an agreement couched in general terms, for thepurpose of prequalification bidding, Tokyu allegedly refused to execute a final consortiumagreement; unreasonably demanded that BF reduce its asking prices for its assigned work;engaged the services of other subcontractors to do BFs portion of the project; and refused toremit to BF its 20% share of the down payment, thereby easing out BF in the project in breachof the Consortium agreement. BF prayed that Tokyu be enjoined from further (1) receiving anypayment from MIAA for illegally executing BFs portion of the work in the project; (2) engagingthe services of other subcontractors to do BFs portion of the project; (3) acting as lead partnerof the Consortium; and (4) compelling BF to reduce its prices. BF also prayed that MIAA be

enjoined from directly paying Tokyu the collectible compensation vis-- vis Tokyus illegalexecution of BFs portion in the project.1

The RTC served a TRO on Tokyu, the lead partner of the Consortium. During the hearing on thepreliminary injunction, MIAA stressed its position that it should not be dragged into the disputesince it was a consortium internal matter. Thereafter, in an amended complaint, BF droppedMIAA as a party-defendant.


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When the RTC issued the Order dated January 21, 1997 extending the TRO, Tokyu filed with theCA a Petition for Certiorari and Prohibition with prayer for a writ of preliminary injunctiondocketed as CA-G.R. SP No. 43133. Tokyu contended that the order violated (1) PresidentialDecree No. 1818 prohibiting any court in the Philippines from issuing any restraining order,

preliminary injunction, or preliminary mandatory injunction on any case, dispute, orcontroversy involving an infrastructure project; and (2) Supreme Court Circular No. 68-94disallowing issuance of TROs in cases involving government infrastructure projects to obviatecomplaints against indiscriminate issuance of TROs.

On May 15, 1997, the CA dismissed the petition and ordered the trial court to continue hearingthe main case. With respect to MIAAs righ t to intervene, the CA stressed that MIAA was nolonger a party-defendant since it had been dropped from the complaint by BF and, therefore,no relief may be had from MIAA. The CA explained that MIAA had nothing to do with whateverBF alleges were violations of the Consortium agreement by Tokyu because these were intra-

consortium matters.2 The CA also said it was convinced that "MIAA had no actual, direct andimmediate interest" in CA-G.R. SP No. 43133.

The CA denied the motion for reconsideration and the RTC proceeded with the casesubsequently issuing the Order dated July 8, 1997, which ordered Tokyu to: (1) retrieve itsdeposit in Japan and make it available in the Philippines for the prompt execution of theproject; (2) remit to BF its 20% share in the down payment and its share in the subsequentpayments made by MIAA; and (3) allow BF to execute its portion of the work in the project byterminating the services of the subcontractors.3

Tokyu filed before the CA a Petition for Certiorari with urgent prayer for a TRO and preliminaryinjunction docketed as CA-G.R. SP No. 44729. On October 20, 1997, the Special Seventh Divisionof the CA granted Tokyus petition and annulled the RTCs Order dated July 8, 1997.

On November 26, 1999, when the project was nearing completion, BF filed a second amendedcomplaint. In it, BF pleaded causes of action against Tokyu, Mitsubushi, and Oreta which haveall submitted themselves to the jurisdiction of the court, and also MIAA who had possession ofmoney to be paid to Tokyu. BF claimed it was entitled to a proportionate share of the moneybased on the Consortium agreement. Thus, BF asked that MIAA be re-impleaded as a party-

defendant so it could obtain complete relief.4In an Order dated May 24, 2001, the RTC directed that MIAA be re-impleaded as a party-defendant in Civil Case No. 66060. It said that BFs earlier move to drop MIAA as a party -defendant should not preclude it from re-impleading MIAA which still has the obligation to paythe remainder of the contract price. The dispositive portion of the order reads:


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G.R. SP No. 43133 was the propriety of the grant of the TRO enjoining Tokyu from receiving anyamount from MIAA and the subject matter in CA-G.R. SP No. 67765 was the propriety inincluding MIAA as a party-defendant in Civil Case No. 66060, both cases involved the issue ofwhether or not MIAA was a proper party-defendant in Civil Case No. 66060. Thus, the CA

concluded that the elements of res judicata were present.The motion for reconsideration was denied by the CA; hence, BF filed this petition raising thefollowing as issues:

I.

THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT BF HAS NO CAUSE OF AAGAINST MIAA AS,IN FACT, BFS SECOND AMENDED COMPLAINT STATES A CAUSE OF ACTIONAGAINST MIAA.

II.

THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT BF IS ESTOPPED FIMPLEADING MIAA IN THE CASE.

III.

THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT BF IS BARRED UNDEDOCTRINE OF RES JUDICATA FROM IMPLEADING MIAA IN THE MAIN CASE.

The appellate court had correctly granted the petition of MIAA.

In this petition before us, BF would have us believe that it dropped MIAA as a party-defendantin its first amended complaint because its cause of action against MIAA was not yet ripe.8 Itsaid that it re-impleaded MIAA in the second amended complaint because of the impendingrelease of the final payment and the retention money to Tokyu. And if the project werecompleted and full payment were given to the Consortium, BF could no longer get its supposedshare in the payments.

The ultimate facts, as alleged by BF, that are the bases of its cause of action against MIAA, arefound on items 2.18 to 2.21 of BFs second amended compl aint, as follows :

2.18 To protect its rights and interests, BF, through counsel, wrote MIAA calling its attention tothe contract violations committed by TOKYU in bad faith, and requesting its intervention to seean early end to the dispute. More specifically, BF requested MIAA to:


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1. Persuade TOKYU to remit to us our rightful 20% share in the downpayment of the Project;

2. Enjoin TOKYUs unauthorized and illegally hired subcontractors from executing BFs portionof the NAIA II project;

3. Directly remit to us our 20% share in the subsequent payments to be made under theconstruction contract; and

4. Should TOKYU stubbornly refuse to heed any of the above, expel TOKYU from the consortiumand let BF, MITSUBISHI and ORETA take over the entire project.

x x x x

2.19 Later, BF, through counsel, wrote TOKYU revoking [its] authority as lead partner torepresent BF in dealing with MIAA in connection with the execution of the Project x x x.

2.20 Despite the revocation made by BF and its request for MIAA to resolve the dispute, TOKYUcontinued to act as the lead partner and has in fact taken its role to the extreme by hiring othersubcontractors to do BFs portion of the work. On the other hand, MIAA has opted to take anonchalant hands-off policy, choosing to ignore T OKYUs bullying tactics and iniquitous actionsby even awarding the latter with prompt payments of the contract price. Worse, in coddlingand protecting TOKYU despite its illegal acts, MIAA has allowed this foreign country to undulyprofit from this centerpiece project and stash away the Philippine money it has collected incommercial banks in Japan.

2.21 Further, as a result of MIAAs inaction, the Project is now complete with TOKYU ready andraring to collect the remainder of the contract price from MIAA, including the 10% retentionmoney being held by MIAA and now ready to be released after the Project had beencompleted.9 (Emphasis supplied.)

On the bases of these allegations, we can hardly rule that BF has a cause of action againstMIAA.

Section 2, Rule 2 of the Rules of Court defines "cause of action" as an act or omission by whichone party violates a right of another. It has three elements: (1) a right existing in favor of the

plaintiff, (2) a duty on the part of the defendant to respect the right of the plaintiff, and (3) abreach of the defendants duty.10

A close reading of the aforecited portions of the second amended complaint discloses that therights of BF that have allegedly been violated are those contained in the Consortiumagreement. A scrutiny of the agreement, however, would readily show that there is nothing init that would constitute acts or omissions of MIAA that violate BFs rights. Even if BF wrote


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MIAA and called the latters attention to the contract violations of Tokyu and asked MI AA topersuade Tokyu to remit to BF its 20% share in the down payment; enjoin Tokyu from illegallyhiring subcontractors to do BFs part of the project; and expel Tokyu from the Consortium,these facts are insufficient to constitute the bases of BFs cause of action against MIAA. The test

of sufficiency of the facts alleged in the complaint as constituting a cause of action is whetheror not admitting the facts alleged; the court could render a valid verdict in accordance with theprayer of the complaint.11 Even if we assume that the facts alleged were true, we still cannotgrant any of BFs prayers against MIAA as we would have no basis to do so in fact and in law.

The best evidence to show whether or not BF has a cause of action against MIAA is thecontract/agreement itself. The Agreement12 awarding the NAIA II Project to the Consortiumwas between MIAA and the Consortium, as contractor, represented by the Consortiumsproject manager. BF was not a party to the Agreement. From the very start, MIAA hadcategorically said it recognized the Consortium as a distinct and separate entity.

The Agreement laid down all the rights and obligations of MIAA to the Consortium and vice-versa, and as aptly pointed out by MIAA, payment to BF was not among them. The Agreementdoes not say that MIAA shall withhold payment in the event that a dispute arises amongst themembers of the Consortium. Neither does the contract require MIAA to mediate in any intra-consortium dispute that may arise within the Consortium. The primary obligation of MIAA isfound in Article III of the Agreement which stipulates that "MIAA agrees to pay theCONTRACTOR the Contract Price x x x in the manner prescribed by the Contract." Note that theCONTRACTOR refers to the Consortium not to the individual members of the Consortium. BF by

itself is not a party to the Agreement. If MIAA is prevented from making payments to theConsortium, MIAA will be considered in breach of the Agreement. Verily, a preliminaryprohibitory injunction, enjoining MIAA from releasing to Tokyu the remainder of the contractprice owing to the Consortium or any amount for that matter, including the 10% retention feenow ready for release after the project had been completed, cannot be validly issued. If BFwants its share in what was yet due to the Consortium, BFs recourse is against the Consortium.It can present to MIAA an assignment of its alleged rights from the Consortium. ImpleadingMIAA is not the remedy to enable BF to collect its share in the NAIA II Project of theConsortium. In short, MIAA cannot be ordered to be a collecting agent for BF.

To sum up, none of the elements required in Sec. 2, Rule 2 of the Rules of Court that constitutea cause of action are present in this case. BF cannot ask MIAA to persuade Tokyu to remit to BFits 20% share in the down payment; cannot enjoin Tokyu from hiring subcontractors to do BFspart of the project; and cannot expel Tokyu from the Consortium. MIAA is a stranger to theConsortium agreement among Tokyu, Mitsubishi, Oreta, and BF. Under both the Consortiumagreement and the Agreement between MIAA and the Consortium, MIAA has no obligation to


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have the terms of the Consortium agreement enforced, MIAA not being privy to it. Lastly, BFeven admits that the Consortium agreement does not embody any specific agreement betweenthe parties as the agreement amongst them was couched in general terms. In fact, the onlyclear agreement among the members was that Tokyu is the appointed lead partner.

As to the issue of estoppel, we agree with the CA that BF is now estopped from re-impleadingMIAA. While the Rules allow amendments to pleadings by leave of court, in our view, in thiscase, it would be an affront to the judicial process to first include a party as defendant, thenvoluntarily drop the party off from the complaint, only to ask that it be re-impleaded. When BFdropped MIAA as defendant in its first amended complaint, it had performed an affirmative actupon which MIAA based its subsequent actions, e.g. payments to Tokyu, on the faith that therewas no cause of action against it, and so on. BF cannot now deny that it led MIAA to believe BFhad no cause of action against it only to make a complete turn-about and renege on the effectsof dropping MIAA as a party-defendant months after, to the prejudice of MIAA. MIAA had allreasons to rely on the CAs decision that it was no longer a party to the suit. Under the doctrineof estoppel, an admission or representation is conclusive on the person making it and cannotbe denied or disproved as against the person relying on it.13 A person, who by deed or conducthas induced another to act in a particular manner, is barred from adopting an inconsistentposition, attitude, or course of conduct that thereby causes loss or injury to another.14

Finally, we tackle the issue of res judicata. Did the decision in CA-G.R. SP No. 43133 constitute abar to CA-G.R. SP No. 67765? For res judicata to exist, the following elements must be present:(1) the judgment must be final; (2) the court that rendered judgment must have jurisdiction

over the parties and the subject matter; (3) it must be a judgment on the merits; and (4) theremust be between the first and second actions identity of parties, subject matter, and cause ofaction. There is no dispute on the presence of the first three elements enumerated above.However, the same cannot be said regarding the last element. As BF has correctly pointed out,CA-G.R. SP No. 43133 was filed by Tokyu against the trial judge and BF, while CA-G.R. SP No.67765 was filed by MIAA in which Tokyu is not even a party. It is also apparent that the subjectmatter in CA-G.R. SP No. 43133 was the propriety of the TRO granted by the RTC, and thesubject matter in CA-G.R. SP No. 67765 is the propriety of including MIAA as a party-defendantin Civil Case No. 66060. While it may be true that both cases touched on MIAA as a party-defendant, we are unable to say that the subject matters of CA-G.R. SP No. 43133 and CA-G.R.SP No. 67765 are identical. As to the cause of action, CA-G.R. SP No. 43133 is the off-shoot ofthe alleged abuse of discretion of the trial judge in issuing the TRO, while CA-G.R. SP No. 67765is the result of the alleged grave abuse of discretion of the trial court judge in allowing MIAA tobe re-impleaded as a party-defendant. Lacking the identity of parties, subject matter, and causeof action, the doctrine of res judicata is inapplicable. This, however, should not detract from thefact that the CA was correct in granting the petition.


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WHEREFORE, we DENY this petition and AFFIRM the CAs Decision dated January 9, 2004 andResolution dated July 13, 2004 in CA-G.R. SP No. 67765.

SO ORDERED.

BF CORPORATION, PETITIONER, VS. MANILA INTERNATIONAL AIRPORT AUTHORITY,RESPONDENT. 579 Phil. 162, June 30, 2008

D E C I S I O N

VELASCO JR., J.:

In this petition for review under Rule 45, petitioner BF Corporation (BF) assails the Decision ofthe Court of Appeals (CA) that disallowed BF to re-implead the Manila International Airport

Authority (MIAA) as a party-defendant in Civil Case No. 66060 entitled BF Corporation v. TokyuConstruction Co., Ltd., Mitsubishi Corporation, A.M. Oreta & Co., Inc., and Manila InternationalAirport Authority.

Mitsubishi Corporation (Mitsubishi), Tokyu Construction Co., Ltd. (Tokyu), A.M. Oreta & Co., Inc.(Oreta), and BF formed themselves into the MTOB Consortium (Consortium) to participate inthe bidding for the construction of the Ninoy Aquino International Airport Terminal II (NAIA II)Project. MIAA awarded the contract to the Consortium, recognizing that the Consortium was adistinct and separate entity from the four member corporations.

Unfortunately, the four members had serious business differences, including the division of thecontract price, forcing BF to file on January 10, 1997, with the Regional Trial Court (RTC) in PasigCity, an action for Specific Performance, Rescission, and Damages with application for aTemporary Restraining Order (TRO), docketed as Civil Case No. 66060. BF alleged in itscomplaint that Tokyu and Mitsubishi invited BF to form a consortium for the NAIA II Project andafter the members of the Consortium reached an agreement couched in general terms, for thepurpose of prequalification bidding, Tokyu allegedly refused to execute a final consortiumagreement; unreasonably demanded that BF reduce its asking prices for its assigned work;engaged the services of other subcontractors to do BF's portion of the project; and refused to

remit to BF its 20% share of the down payment, thereby easing out BF in the project in breachof the Consortium agreement. BF prayed that Tokyu be enjoined from further (1) receiving anypayment from MIAA for illegally executing BF's portion of the work in the project; (2) engagingthe services of other subcontractors to do BF's portion of the project; (3) acting as lead partnerof the Consortium; and (4) compelling BF to reduce its prices. BF also prayed that MIAA be


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enjoined from directly paying Tokyu the collectible compensation vis--vis Tokyu's illegalexecution of BF's portion in the project.[1]

The RTC served a TRO on Tokyu, the lead partner of the Consortium. During the hearing on thepreliminary injunction, MIAA stressed its position that it should not be dragged into the disputesince it was a consortium internal matter. Thereafter, in an amended complaint, BF droppedMIAA as a party-defendant.

When the RTC issued the Order dated January 21, 1997 extending the TRO, Tokyu filed with theCA a Petition for Certiorari and Prohibition with prayer for a writ of preliminary injunctiondocketed as CA-G.R. SP No. 43133. Tokyu contended that the order violated (1) PresidentialDecree No. 1818 prohibiting any court in the Philippines from issuing any restraining order,preliminary injunction, or preliminary mandatory injunction on any case, dispute, orcontroversy involving an infrastructure project; and (2) Supreme Court Circular No. 68-94

disallowing issuance of TROs in cases involving government infrastructure projects to obviatecomplaints against indiscriminate issuance of TROs.

On May 15, 1997, the CA dismissed the petition and ordered the trial court to continue hearingthe main case. With respect to MIAA's right to intervene, the CA stressed that MIAA was nolonger a party-defendant since it had been dropped from the complaint by BF and, therefore,no relief may be had from MIAA. The CA explained that MIAA had nothing to do with whateverBF alleges were violations of the Consortium agreement by Tokyu because these were intra-consortium matters.[2] The CA also said it was convinced that "MIAA had no actual, direct andimmediate interest" in CA-G.R. SP No. 43133.

The CA denied the motion for reconsideration and the RTC proceeded with the casesubsequently issuing the Order dated July 8, 1997, which ordered Tokyu to: (1) retrieve itsdeposit in Japan and make it available in the Philippines for the prompt execution of theproject; (2) remit to BF its 20% share in the down payment and its share in the subsequentpayments made by MIAA; and (3) allow BF to execute its portion of the work in the project byterminating the services of the subcontractors.[3]

Tokyu filed before the CA a Petition for Certiorari with urgent prayer for a TRO and preliminaryinjunction docketed as CA-G.R. SP No. 44729. On October 20, 1997, the Special Seventh Divisionof the CA granted Tokyu's petition and annulled the RTC's Order dated July 8, 1997.

On November 26, 1999, when the project was nearing completion, BF filed a second amendedcomplaint. In it, BF pleaded causes of action against Tokyu, Mitsubushi, and Oreta which haveall submitted themselves to the jurisdiction of the court, and also MIAA who had possession ofmoney to be paid to Tokyu. BF claimed it was entitled to a proportionate share of the money


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it had been dropped by BF and, therefore, no relief may be had from MIAA; that the case wasnot a matter in rem but can only give rise to a judgment in personam; that the CA wasconvinced MIAA had no actual, direct, and immediate interest in the dispute since the disputewas intra-corporate; and that MIAA had nothing to do with BF's complaint against Tokyu.[7]

The CA added that since the issue with respect to MIAA was not appealed, the said decision hadbecome final and another case on the same issue had been barred by res judicata.

The CA also noted that when MIAA was allowed to intervene in the aforementioned case, theRTC had acquired jurisdiction over MIAA; thus, there was identity of parties between CA-G.R. SPNo. 43133 and CA-G.R. SP No. 67765. According to the CA, although the subject matter of CA-G.R. SP No. 43133 was the propriety of the grant of the TRO enjoining Tokyu from receiving anyamount from MIAA and the subject matter in CA-G.R. SP No. 67765 was the propriety inincluding MIAA as a party-defendant in Civil Case No. 66060, both cases involved the issue ofwhether or not MIAA was a proper party-defendant in Civil Case No. 66060. Thus, the CA

concluded that the elements of res judicata were present.

The motion for reconsideration was denied by the CA; hence, BF filed this petition raising thefollowing as issues:

I.

THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT BF HAS NO CAUSE OF ACTAGAINST MIAA AS, IN FACT, BF'S SECOND AMENDED COMPLAINT STATES A CAUSE OF AC

AGAINST MIAA.

II.

THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT BF IS ESTOPPED FROMIMPLEADING MIAA IN THE CASE.

III.

THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT BF IS BARRED UNDER THDOCTRINE OF RES JUDICATA FROM IMPLEADING MIAA IN THE MAIN CASE.

The appellate court had correctly granted the petition of MIAA.In this petition before us, BF would have us believe that it dropped MIAA as a party-defendantin its first amended complaint because its cause of action against MIAA was not yet ripe.[8] Itsaid that it re-impleaded MIAA in the second amended complaint because of the impendingrelease of the final payment and the retention money to Tokyu. And if the project were


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completed and full payment were given to the Consortium, BF could no longer get its supposedshare in the payments.

The ultimate facts, as alleged by BF, that are the bases of its cause of action against MIAA, arefound on items 2.18 to 2.21 of BF's second amended complaint, as follows :

2.18

To protect its rights and interests, BF, through counsel, wrote MIAA calling its attention tothe contract violations committed by TOKYU in bad faith, and requesting its intervention to seean early end to the dispute. More specifically, BF requested MIAA to:

1. Persuade TOKYU to remit to us our rightful 20% share in the downpayment of theProject;

2. Enjoin TOKYU's unauthorized and illegally hired subcontractors from executing BF'sportion of the NAIA II project;

3. Directly remit to us our 20% share in the subsequent payments to be made under theconstruction contract; and

4. Should TOKYU stubbornly refuse to heed any of the above, expel TOKYU from theconsortium and let BF, MITSUBISHI and ORETA take over the entire project.

2.19 Later, BF, through counsel, wrote TOKYU revoking [its] authority as lead partner torepresent BF in dealing with MIAA in connection with the execution of the Project x x x.

2.20 Despite the revocation made by BF and its request for MIAA to resolve the dispute,TOKYU continued to act as the lead partner and has in fact taken its role to the extreme byhiring other subcontractors to do BF's portion of the work. On the other hand, MIAA has optedto take a nonchalant hands-off policy, choosing to ignore TOKYU's bullying tactics andiniquitous actions by even awarding the latter with prompt payments of the contract price.Worse, in coddling and protecting TOKYU despite its illegal acts, MIAA has allowed this foreigncountry to unduly profit from this centerpiece project and stash away the Philippine money ithas collected in commercial banks in Japan.

2.21 Further, as a result of MIAA's inaction, the Project is now complete with TOKYU readyand raring to collect the remainder of the contract price from MIAA, including the 10%retention money being held by MIAA and now ready to be released after the Project had beencompleted.[9] (Emphasis supplied.)


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On the bases of these allegations, we can hardly rule that BF has a cause of action againstMIAA.

Section 2, Rule 2 of the Rules of Court defines "cause of action" as an act or omission by whichone party violates a right of another. It has three elements: (1) a right existing in favor of theplaintiff, (2) a duty on the part of the defendant to respect the right of the plaintiff, and (3) abreach of the defendant's duty.[10]

A close reading of the aforecited portions of the second amended complaint discloses that therights of BF that have allegedly been violated are those contained in the Consortiumagreement. A scrutiny of the agreement, however, would readily show that there is nothing init that would constitute acts or omissions of MIAA that violate BF's rights. Even if BF wroteMIAA and called the latter's attention to the contract violations of Tokyu and asked MIAA topersuade Tokyu to remit to BF its 20% share in the down payment; enjoin Tokyu from illegally

hiring subcontractors to do BF's part of the project; and expel Tokyu from the Consortium,these facts are insufficient to constitute the bases of BF's cause of action against MIAA. The testof sufficiency of the facts alleged in the complaint as constituting a cause of action is whetheror not admitting the facts alleged; the court could render a valid verdict in accordance with theprayer of the complaint.[11] Even if we assume that the facts alleged were true, we still cannotgrant any of BF's prayers against MIAA as we would have no basis to do so in fact and in law.

The best evidence to show whether or not BF has a cause of action against MIAA is thecontract/agreement itself. The Agreement[12] awarding the NAIA II Project to the Consortiumwas between MIAA and the Consortium, as contractor, represented by the Consortium'sproject manager. BF was not a party to the Agreement. From the very start, MIAA hadcategorically said it recognized the Consortium as a distinct and separate entity.

The Agreement laid down all the rights and obligations of MIAA to the Consortium and vice-versa, and as aptly pointed out by MIAA, payment to BF was not among them. The Agreementdoes not say that MIAA shall withhold payment in the event that a dispute arises amongst themembers of the Consortium. Neither does the contract require MIAA to mediate in any intra-consortium dispute that may arise within the Consortium. The primary obligation of MIAA isfound in Article III of the Agreement which stipulates that "MIAA agrees to pay the

CONTRACTOR the Contract Price x x x in the manner prescribed by the Contract." Note that theCONTRACTOR refers to the Consortium not to the individual members of the Consortium. BF byitself is not a party to the Agreement. If MIAA is prevented from making payments to theConsortium, MIAA will be considered in breach of the Agreement. Verily, a preliminaryprohibitory injunction, enjoining MIAA from releasing to Tokyu the remainder of the contractprice owing to the Consortium or any amount for that matter, including the 10% retention feenow ready for release after the project had been completed, cannot be validly issued. If BF


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CA-G.R. SP No. 43133 was filed by Tokyu against the trial judge and BF, while CA-G.R. SP No.67765 was filed by MIAA in which Tokyu is not even a party. It is also apparent that the subjectmatter in CA-G.R. SP No. 43133 was the propriety of the TRO granted by the RTC, and thesubject matter in CA-G.R. SP No. 67765 is the propriety of including MIAA as a party-defendant

in Civil Case No. 66060. While it may be true that both cases touched on MIAA as a party-defendant, we are unable to say that the subject matters of CA-G.R. SP No. 43133 and CA-G.R.SP No. 67765 are identical. As to the cause of action, CA-G.R. SP No. 43133 is the off-shoot ofthe alleged abuse of discretion of the trial judge in issuing the TRO, while CA-G.R. SP No. 67765is the result of the alleged grave abuse of discretion of the trial court judge in allowing MIAA tobe re-impleaded as a party-defendant. Lacking the identity of parties, subject matter, and causeof action, the doctrine of res judicata is inapplicable. This, however, should not detract from thefact that the CA was correct in granting the petition.

WHEREFORE, we DENY this petition and AFFIRM the CA's Decision dated January 9, 2004 and

Resolution dated July 13, 2004 in CA-G.R. SP No. 67765.

SO ORDERED.

EL ORO ENGRAVER CORPORATION, Petitioner, vs. COURT OF APPEALS and EVERETTCONSTRUCTION SUPPLY, INC., Respondents.

D E C I S I O N

CARPIO, J.:

The Case

Before the Court is a petition for review[1] assailing the 29 February 1996 Decision[2] and 13June 1996 Resolution[3] of the Court of Appeals in CA-G.R. CV No. 44782.

The Antecedent Facts

Everett Construction Supply, Inc. (respondent) is engaged in the sale of construction supplies. ElOro Engraver Corporation (petitioner) is one of its customers. Whenever respondent soldmerchandise to its customers, it would prepare a Sales Invoice for the transaction inquadruplicate copies. An employee of respondent would bring the original and duplicate copiesof the Sales Invoice to the customer for signature upon receipt of the merchandise. Respondentwould either append the original copy of the Sales Invoice to the Statement of Account orreturn it to the customer upon payment of the merchandise.


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The Court of Appeals did not even have to rely on estoppel. Petitioner received the Statementsof Account as well as the Sales Invoices as evidenced by the handwritten statement ofpetitioners representative, Alicia Alcaraz,[14] who wrote the words recd original on t heStatements of Account.[15] Lee testified:

Atty. Meris:

Do you have a proof that the originals of the said invoices are already in the hands of thedefendant?

Witness:

Yes, we have given them the statements of accounts which together with the originals asshown by the signature of their employee Alicia Alcaras.

x x x x

Atty. Meris:

(to witness)

How do you know that this is the signature of Miss Alcaras?

Witness:

Because I am very familiar with her signature as I have been receiving communications with herfrequently during the time that we are having business transaction with the defendant.[16]

Petitioner failed to rebut that it received the Statements of Accounts and the Sales Invoicesattached to them. In sum, respondent proved during the trial that it delivered the goods, andthat it had not received payment for the goods so delivered.

In its Answer With Counterclaim,[17] petitioner alleged that all its purchases from respondenthad already been fully paid and satisfied. Petitioner alleged:

and by way of SPECIAL and AFFIRMATIVE DEFENSES, defendant avers:

That there is no cause of action;That the claim is unenforceable under the statute of fraud;

That the claim or demand had been paid, waived and/or otherwise extinguished;

That in the alternative, granting arguendo that the defendant received some of the saidconstruction materials, the same are defective and not suitable for the purpose of which they


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directed and who reasonably relied thereon.[19] Since estoppel is based on equity and justice,it is essential that before a person can be barred from asserting a fact contrary to his act orconduct, it must be shown that such act or conduct has been intended and would unjustlycause harm to those who are misled if the principle were not applied against him.[20]

From the start, Mid-Pasig never falsely represented its intention that could lead Rockland tobelieve that Mid- Pasig had accepted Rocklands offer. Mid -Pasig consistently rejectedRocklands offer. Further, Rockland never secured the approval of Mid -Pasigs Board ofDirectors and the PCGG to lease the subject property to Rockland. As noted by the Court ofAppeals, if indeed Rockland believed that Mid-Pasig impliedly accepted the offer, then it shouldhave taken possession of the property and paid the monthly rentals. But it did not. For estoppelto apply, the action giving rise thereto must be unequivocal and intentional because, ifmisapplied, estoppel may become a tool of injustice.[21]

WHEREFORE, the instant petition is DENIED. The Decision and Resolution dated February 27,2004 and July 21, 2004, respectively, of the Court of Appeals in CA-G.R. CV No. 76370 areAFFIRMED. Costs against the petitioner.

SO ORDERED.

G.R. Nos. 139594-95 February 26, 2008

BORROMEO BROS. ESTATE, INC., petitioner,vs.EDGAR JOHN A. GARCIA, respondent.

D E C I S I O N

PUNO, C.J .:

Before us is a petition for review on certiorari which seeks the reversal of the ConsolidatedDecision1 and Resolution 2 of the Court of Appeals in CA-G.R. Sp. Nos. 47049 and 48512 whichaffirmed the Order s3 of the Regional Trial Court (RTC) to annotate an easement of road right of

way on the title of petitioner Borromeo Bros. Estate, Inc. in favor of respondent Edgar John A.Garcia.

On August 17, 1938, Patricia Ruedas Vda. De Andrada (Patricia) executed, for valuableconsideration, a document granting a road right of way to spouses Gil Garcia and Teresa Escaode Garcia (Garcia couple) over Lot No. 6-H-2 described in Transfer Certificate of Title (TCT) No.20923:
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annotate in the TCT No. RT-3972 a road right of way indicated in the motion dated April17, 1997 x x x x after payment of the corresponding registration fees prescribed by law.

The cadastral court issued on June 6, 1997 an Order requiring the Register of Deeds "to informthis [c]ourt regarding the status of the aforementioned title, whether it has already been

cancelled or not, the encumbrances/annotations therein, and in whose name it is now."5

In its Comment/Manifestation, the Register of Deeds informed the cadastral court that Lot No.6-H-2 covered by TCT No. RT-3972 is registered under herein petitioner's name and that it"appears to be clean and devoid of any encumbrance/annotations. "6

On July 23, 1997, the cadastral court issued an Order granting the petition of respondent ,7 thus:

Since the Borromeo Bros. Estate did not oppose the previous petition for annotation ofroad right of way contained in the order of Judge Ignacio Debuque, this [c]ourt herebygrants the petition filed by Engr. Edgar John A. Garcia, the registered owner of TCT No.142344 covering Lot 6-H-1 and directs the Register of Deeds of Cebu City to annotate on TCT No. RT-3972 the contents of the document ratified on August 18, 1938 recited inparagraph 4 of the instant petition after payment of the corresponding registration feesprescribed by law. Furnish the Borromeo Bros. Estate with a copy of this order as well asAtty. Loreto M. Durano, counsel for the petitioner.

On July 25, 1997, petitioner received a copy of the Order of July 23, 1997. Petitioner entered itsspecial appearance and filed a "Motion for Reconsideration and Recall" and expressed"caution" that it was not necessarily submitting itself to the jurisdiction of the cadastral court.Petitioner contended that the Order of the Court dated July 23, 1997 violated its fundamental

right to substantive and procedural due process, that the petition of respondent was forspecific performance of a private agreement cognizable only by an ordinary court and not acadastral court, and that the petition of respondent was a procedural shortcut to enforce astale order citing Rule 39, Section 6 of the Rules of Court, the statute of limitations andprescription .8

On December 15, 1997, after both parties had submitted their respective arguments on theissues raised, the cadastral court denied petitioner's motion for reconsideration. The court heldthat firstly, there was no violation of substantial or procedural due process as the courtfurnished petitioner its Order of July 23, 1997, it heard petitioner's motion for reconsiderationin open court, and allowed both parties to submit their respective memoranda includingdocumentary exhibits prior to its ruling on the motion. Secondly, the promulgation ofPresidential Decree No. 1529 or The Property Registration Decree of 1979 eliminated thedistinction between the general jurisdiction of the RTC and its limited jurisdiction when actingas a Land Registration Court. Finally, the court ruled that the allegation of enforcement of astale order contrary to Rule 39, Section 6 of the Rules of Court, the statute of limitations andprescription, was misplaced as the invoked rule applied only to civil actions and not to special
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proceedings such as a land registration case where neither laches nor the statute of limitationsapplies.9

Aggrieved, petitioner filed on December 29, 1997 a petition for certiorari before the Court ofAppeals, docketed as CA-G.R. Sp. No. 47049. It alleged grave abuse of discretion on the part of

the cadastral court for the issuance of its Orders dated July 23, 1997 and December 15, 1997.

Meanwhile, respondent filed with the cadastral court a motion for execution of its July 23, 1997Order,10 which was opposed by petitione r11 and denied by the cadastral court on April 6,1998,12 thus:

Should this [c]ourt enforce the questioned order now, any ruling by the Court of Appealsin the petition for certiorari if it is in favor of petitioner BBEI would create a situationwherein the ruling of a higher [c]ourt can no longer be implemented because the lower[c]ourt had chosen to enforce its order without waiting for the outcome of the petitionfor certiorari. This [c]ourt does not want to preempt the ruling of the Court of Appealsand therefore, this [c]ourt on the basis of the ruling of the Supreme Courtaforementioned 13 and in the higher interest of justice will not enforce at this time theorder dated July 23, 1997.

Respondent's April 29, 1998 motion for reconsideration 14 was denied. Thus, respondent filedbefore the Court of Appeals a petition for mandamus and certiorari, docketed as CA-G.R. Sp.No. 48512.

On November 18, 1998, the Court of Appeals consolidated the cases 15 and rendered itsConsolidated Decision of June 21, 1999 dismissing the petition in CA-G.R. Sp. No. 47049 of

herein petitioner and granting the petition in CA-G.R. Sp. No. 48512 of herein respondent .16

The Court of Appeals held that the evidence on record shows the existence of an easement ofright of way in favor of respondent. But in dismissing the petition in CA-G.R. Sp. No. 47049, itanchored its decision on the fact that petitioner filed a special action for certiorari in which theappellate court is limited only to correcting errors of jurisdiction or grave abuse of discretion.

On the other hand, in granting the petition in CA-G.R. Sp. No. 48512, the Court of Appealsemphasized that since no restraining order or writ of injunction was issued in the otherpetition, the period on the finality of the Order of the cadastral court was never interrupted;and that the filing of a petition for certiorari does not prevent the decision from attainingfinality as it is an independent action which does not interrupt the course of the principal actionor the running of the reglementary period involved in the proceedings.

On July 9, 1999, petitioner filed its motion for reconsideration but the appellate court denied itin its Resolution of August 9, 1999.17 Hence, this petition for review on certiorari under Rule 45of the Rules of Court for the annulment and setting aside of the June 21, 1999 ConsolidatedDecision as well as the August 9, 1999 Resolution of the Court of Appeals.
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allowed the parties to argue on the merits of their respective contentions and later ondirected the lawyers to put their additional arguments in writing together withadditional documentary evidence and to cite the law, authorities and decisions of theSupreme Court in their respective contentions. BBEI (petitioner herein) filed itsmemorandum with annexes and documentary exhibits. x x x oppositor BBEI filed its

reply.

Indeed, deprivation of the right to due process cannot be successfully invoked where a partywas given the chance to be heard on his Motion for Reconsideration 20 as what happened in theinstant case.

Moreover, the July 23, 1997 and December 15, 1997 Orders of the cadastral court were basedon established facts on the existence of the grant of an easement of road right of way in favorof respondent, viz: (1) an Agreement, for a valuable consideration, dated August 15, 1936executed by Patricia that granted a road right of way over Lot No. 6-H-2 and Lot No. 7 to theGarcia couple; (2) an Agreement, for a valuable consideration, dated August 17, 1938 executedby Patricia that granted a road right of way over Lot 6-H-2 to the Garcia couple; (3) Deed of Saledated September 28, 1938 executed by Patricia in favor of Borromeo Bros. Estate, Inc. thatcontained a provision: "x x x the purchase of Lot No. 6-H-2 was subject to the right of waygranted by me (Patricia Ruedas Vda. de Andrada) to the spouses Gil Garcia and Teresa Escanode Garcia"; (4) the Official Receipt issued by the Register of Deeds of Cebu, Commonwealth ofthe Philippines No. B 2582295, dated August 18, 1938, upon registration shows the annotationon the title of the Agreement on the road right of way over Lot No. 6-H-2 in favor of the Garciacouple; and (5) the May 2, 1953 Letter of the Borromeo Bros. Estate, Inc., through Flora D.Borromeo, to Mr. Gil Garcia expressly and categorically recognizing or confirming theestablishment of a road right of way over Lot No. 6-H-2 and Lot No. 7 in favor of the Garcia

couple.

Clearly, whether the July 23, 1997 Order of the cadastral court is a revival of the June 28, 1952Order of another cadastral court is immaterial as the latter was not the sole basis for thegranting of the petition for annotation of the road right of way. It merely bolstered the petitionof respondent to annotate the road right of way in his favor.

In fine, the records of the instant case show that (1) there was substantial evidence to supportthe annotation of the easement of right of way on the title of petitioner in favor of respondentand (2) the requirements of due process were sufficiently met. No abuse of discretion wascommitted by the cadastral court. Consequently, the Court of Appeals is justified in dismissingthe petition in CA-G.R. Sp. No. 47049.

Likewise, there being no more obstacles in the immediate execution of the Order requiring theannotation of the easement of road right of way on the title of the property of petitioner infavor of respondent, the Court affirms the Court of Appeals in granting the petition in CA-G.R.Sp. No. 48512.
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IN VIEW WHEREOF, the petition is DENIED. The Consolidated Decision and Resolution of theCourt of Appeals dated June 21, 1999 and August 9, 1999, respectively, in CA-G.R. Sp. No.47049 and CA-G.R. Sp. No. 48512 areAFFIRMED.

SO ORDERED.

570 Phil. 141, February 26, 2008

BORROMEO BROS. ESTATE, INC., Petitioner, vs. EDGAR JOHN A. GARCIA, Respondent.

D E C I S I O N

PUNO, CJ.:

Before us is a petition for review on certiorari which seeks the reversal of the ConsolidatedDecision[1] and Resolution [2] of the Court of Appeals in CA-G.R. Sp. Nos. 47049 and 48512 whichaffirmed the Orders [3] of the Regional Trial Court (RTC) to annotate an easement of road right ofway on the title of petitioner Borromeo Bros. Estate, Inc. in favor of respondent Edgar John A.Garcia.

On August 17, 1938, Patricia Ruedas Vda. De Andrada (Patricia) executed, for valuableconsideration, a document granting a road right of way to spouses Gil Garcia and Teresa Escaode Garcia (Garcia couple) over Lot No. 6-H-2 described in Transfer Certificate of Title (TCT) No.20923:

I, PATRICIA RUEDAS VDA. DE ANDRADA (Filipina, of legal age, widow and with residence andpostal address at No. 28 Fructuoso Ramos St., City of Cebu, Philippines), for and inconsideration of the sum of TEN PESOS (10.00) to be paid in hand by the spouses GIL GARCIAand TERESA ESCAO DE GARCIA (Filipinos, both of legal ages (sic) and residing at FructuosoRamos St. (interior), City of Cebu, Philippines), do hereby grant unto said spouses Gil Garcia andTeresa Escao de Garcia a right of way over lot number SIX-H-TWO (6-H-2), described in theTransfer Certificate of Title numbered TWENTY THOUSAND NINE HUNDRED TWENTY FIVE(20925) in the office of the Register of Deeds for the province of Cebu. [4] On September 28, 1938, Patricia sold the property to petitioner. The Deed of Sale contained aprovision that the purchase o f Lot No. 6-H-2 was subject to the right of way granted by me(Patricia Ruedas Vda. de Andrada) to the spouses Gil Garcia and Teresa Escao de Garcia.

On April 17, 1952, the Garcia couple went to the Court of First Instance (CFI) of Cebu andmoved for the annotation of the August 17, 1938 document executed by Patricia on TCT No. RT-3972.

On June 28, 1952, the CFI of Cebu, through Judge Ignacio Debuque, ordered:


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No opposition having been filed to the motion of the spouses Gil Garcia and Teresa Escao,through Atty. Vicente Faelnar, dated April 17, 1952, it appearing that the Borromeo Bros.Estate, Inc. [herein petitioner], through Atty. Filiberto Leonardo, received a copy of the noticeof hearing of said motion on June 24, 1952, the Register of Deeds for the City and Province ofCebu is hereby ordered to annotate on Transfer Certificate of Title No. RT-3972 the contents of

the documents ratified on August 18, 1938 in said motion.

SO ORDERED.Petitioner retained ownership over Lot No. 6-H-2 whereas the estate of the late Garcia couple(Garcia Estate) was inherited by Vicente E. Garcia and Jose E. Garcia from whom respondentacquired his title in 1996.

Sometime after acquiring the Garcia Estate, respondent came across the 1952 documents thatgranted to the d eceased Garcia couple a road right of way through petitioners Lot No. 6 -H-2.Thus, on May 19, 1997, respondent filed, before the RTC of Cebu, a cadastral court, a petitioncaptioned Engineer Edgar John A. Garcia v. The Register of Deeds of Cebu City G.I. R.O. Rec.No. 5988, Lot No. 6-H- 2. The petition, in which only the Register of Deeds was impleaded,prayed that:WHEREFORE, premises considered, this Honorable Court is most respectfully prayed to issue anOrder directing the Register of Deeds for the City of Cebu to inscribe and annotate in the TCTNo. RT-3972 a road right of way indicated in the motion dated April 17, 1997 x x x x afterpayment of the corresponding registration fees prescribed by law.The cadastral court issued on June 6, 1997 an Order r equiring the Register of Deeds to informthis [c]ourt regarding the status of the aforementioned title, whether it has already beencancelled or not, the encumbrances/annotations therein, and in whose name it is now. [5]

In its Comment/Manifestation, the Register of Deeds informed the cadastral court that Lot No.6-H-2 covered by TCT No. RT-3972 is registered under herein petitioners name and that itappears to be clean and devoid of any encumbrance/annotations. [6]

On July 23, 1997, the cadastral court issued an Order granting the petition of respondent, [7] thus:

Since the Borromeo Bros. Estate did not oppose the previous petition for annotation of roadright of way contained in the order of Judge Ignacio Debuque, this [c]ourt hereby grants thepetition filed by Engr. Edgar John A. Garcia, the registered owner of TCT No. 142344 covering

Lot 6-H-1 and directs the Register of Deeds of Cebu City to annotate on TCT No. RT-3972 thecontents of the document ratified on August 18, 1938 recited in paragraph 4 of the instantpetition after payment of the corresponding registration fees prescribed by law. Furnish theBorromeo Bros. Estate with a copy of this order as well as Atty. Loreto M. Durano, counsel forthe petitioner.On July 25, 1997, petitioner received a copy of the Order of July 23, 1997. Petitioner entered itsspecial appearance and filed a Motion for Reconsideration and Recall and expressedcaution that it was not necessarily submitting itself to the jurisdiction of the cadastral court.


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right of way in favor of respondent. But in dismissing the petition in CA-G.R. Sp. No. 47049, itanchored its decision on the fact that petitioner filed a special action for certiorari in which theappellate court is limited only to correcting errors of jurisdiction or grave abuse of discretion.

On the other hand, in granting the petition in CA-G.R. Sp. No. 48512, the Court of Appeals

emphasized that since no restraining order or writ of injunction was issued in the otherpetition, the period on the finality of the Order of the cadastral court was never interrupted;and that the filing of a petition for certiorari does not prevent the decision from attainingfinality as it is an independent action which does not interrupt the course of the principal actionor the running of the reglementary period involved in the proceedings.

On July 9, 1999, petitioner filed its motion for reconsideration but the appellate court denied itin its Resolution of August 9, 1999.[17] Hence, this petition for review on certiorari under Rule 45of the Rules of Court for the annulment and setting aside of the June 21, 1999 ConsolidatedDecision as well as the August 9, 1999 Resolution of the Court of Appeals.

Petitioner alleged these errors: (1) the appellate court erred in dismissing CA-G.R. Sp. No. 47049and not reversing the July 23, 1997 Order of the cadastral court despite (a) the nullity of theOrder for the denial of petitioners substantive and procedural right to due process and (b) thecommission of abuse of discretion and action without or in excess of jurisdiction of thecadastral court when it revived a stale order, and (2) it likewise erred in granting the petition inCA-G.R. Sp. No. 48512.

We find against petitioner.

At the outset, the Court emphasizes that the proper subjects of this Rule 45 Petition are theConsolidated Decision and Resolution of the Court of Appeals and not the Orders of thecadastral court.

The appellate court was correct in striking down the petition of petitioner in CA-G.R. Sp. No.47049 on procedural grounds. Indeed, the filing of a special civil action for certiorari before theCourt of Appeals limits the determination of the appellate court to whether there was an errorof jurisdiction or grave abuse of discretion on the part of the cadastral court. A special civilaction for certiorari is an independent action, raising the question of jurisdiction where thetribunal, board or officer exercising judicial or quasi-judicial functions has acted without or inexcess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of

jurisdiction. The Court of Appeals found neither error of jurisdiction nor grave abuse ofdiscretion, and dismissed the petition by stating that [t]o Us and to say the most,aforementioned arguments are indeed typical only of either an error of procedure or an errorof judgment. This Court agrees.

Moreover, even assuming that the appellate court may correctly resolve error of procedure orerror of judgment in the instant case, there was none committed by the cadastral court.


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The cadastral court did not deny petitioner of its right to due process of the law. The essence ofdue process is found in the reasonable opportunity to be heard and submit any evidence insupport of ones defense. What the law proscribes is the lack of opportunity to be heard. [18] Aslong as a party is given the opportunity to defend his interests in due course, he would have noreason to complain, for it is this opportunity to be heard that makes up the essence of due

process.[19]

The records reveal that the cadastral court furnished petitioner its Order of July 23, 1997, whichreiterated its previous order of April 17, 1952 through former Judge Ignacio Debuque. Moreimportantly, the cadastral court heard petitioners motion for reconsideration in open court wherein both parties presented their respective arguments to defend their rights and the courtlikewise allowed the parties to file their respective memoranda prior to ruling on the motion forreconsideration. To quote in part the court in its December 15, 1997 Order, viz:x x x x On August 8, 1997, the date set by Atty. Mercado for the hearing of his motion, thelawyers of both parties appeared including Atty. Amadeo D. Seno, Jr. and the court allowed theparties to argue on the merits of their respective contentions and later on directed the lawyersto put their additional arguments in writing together with additional documentary evidenceand to cite the law, authorities and decisions of the Supreme Court in their respectivecontentions. BBEI (petitioner herein) filed its memorandum with annexes and documentaryexhibits . x x x oppositorBBEI filed its reply .Indeed, deprivation of the right to due process cannot be successfully invoked where a partywas given the chance to be heard on his Motion for Reconsideration [20] as what happened inthe instant case.

Moreover, the July 23, 1997 and December 15, 1997 Orders of the cadastral court were basedon established facts on the existence of the grant of an easement of road right of way in favorof respondent, viz: (1) an Agreement, for a valuable consideration, dated August 15, 1936executed by Patricia that granted a road right of way over Lot No. 6-H-2 and Lot No. 7 to theGarcia couple; (2) an Agreement, for a valuable consideration, dated August 17, 1938 executedby Patricia that granted a road right of way over Lot 6-H-2 to the Garcia couple; (3) Deed of Saledated September 28, 1938 executed by Patricia in favor of Borromeo Bros. Estate, Inc. thatcontained a provision: x x x the purchase of Lot No. 6 -H-2 was subject to the right of waygranted by me (Patricia Ruedas Vda. de Andrada) to the spouses Gil Garcia and Teresa Escanode Garcia; (4) the Official Receipt issued by the Register of Deeds of Cebu, Commonwealth ofthe Philippines No. B 2582295, dated August 18, 1938, upon registration shows the annotationon the title of the Agreement on the road right of way over Lot No. 6-H-2 in favor of the Garcia

couple; and (5) the May 2, 1953 Letter of the Borromeo Bros. Estate, Inc., through Flora D.Borromeo, to Mr. Gil Garcia expressly and categorically recognizing or confirming theestablishment of a road right of way over Lot No. 6-H-2 and Lot No. 7 in favor of the Garciacouple.

Clearly, whether the July 23, 1997 Order of the cadastral court is a revival of the June 28, 1952Order of another cadastral court is immaterial as the latter was not the sole basis for thegranting of the petition for annotation of the road right of way. It merely bolstered the petition


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of respondent to annotate the road right of way in his favor.

In fine, the records of the instant case show that (1) there was substantial evidence to supportthe annotation of the easement of right of way on the title of petitioner in favor of respondentand (2) the requirements of due process were sufficiently met. No abuse of discretion was

committed by the cadastral court. Consequently, the Court of Appeals is justified in dismissingthe petition in CA-G.R. Sp. No. 47049.

Likewise, there being no more obstacles in the immediate execution of the Order requiring theannotation of the easement of road right of way on the title of the property of petitioner infavor of respondent, the Court affirms the Court of Appeals in granting the petition in CA-G.R.Sp. No. 48512.

IN VIEW WHEREOF, the petition is DENIED. The Consolidated Decision and Resolution of theCourt of Appeals dated June 21, 1999 and August 9, 1999, respectively, in CA-G.R. Sp. No.47049 and CA-G.R. Sp. No. 48512 are AFFIRMED.

SO ORDERED.

572 Phil. 190, March 14, 2008

HEIRS OF CESAR MARASIGAN NAMELY: LUZ REGINA, CESAR JR., BENITO, SANTIAGO, RENATO,JOSE, GERALDO, ORLANDO, PETER, PAUL, MAURICIO, ROMMEL, MICHAEL, GABRIEL, ANDMARIA LUZ, ALL SURNAMED MARASIGAN, PETITIONERS, VS. APOLONIO, LILIA, OCTAVIO, JR.,HORACIO, BENITO JR., AND MARISSA, ALL SURNAMED MARASIGAN, AND THE COURT OFAPPEALS, RESPONDENTS.

D E C I S I O N

CHICO-NAZARIO, J.:

This is a Petition for Review under Rule 45 of the Revised Rules of Court, with petitionerspraying for the reversal of the Decision [1] of the Court of Appeals dated 31 July 2002 and itsResolution[2] dated 13 November 2002 denying the Petition for Certiorari and Prohibition, with

prayer for the issuance of a writ of preliminary injunction and restraining order, in CA- G.R. SPNo. 67529. Petitioners are asking this Court to (a) give due course to their petition; and (b)reverse and set aside, and thus, declare null and void the Decision of the Court of Appeals inCA-G.R. SP No. 67529. However, petitioners are asking for the following reliefs in theirMemorandum: (a) the dismissal of the complaint for partition of the estate of the late AliciaMarasigan, docketed as Special Civil Action No. P-77-97, filed before the Regional Trial Court


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(RTC) of Pili, Camarines Sur; (b) annulment or rescission of the public auction sale of petitioners'1/7 th undivided share in the estate of Alicia Marasigan, and direct Apolonio Marasigan torestore the same to petitioners; or (c) in the alternative, allowance of the physical partition ofthe entire 496 hectares of Hacienda Sta. Rita.

Central to the instant Petition is the estate of Alicia Marasigan ( Alicia).

Alicia was survived by her siblings: Cesar, Apolonio, Lilia , and Benito; Marissa , a sister-in-law;and the children of her brothers who predeceased her: Francisco, Horacio, and Octavio . Shedied intestate and without issue on 21 January 1995.

On 17 December 1997, a Complaint for Judicial Partition of the Estate of Alicia Marasigan wasfiled before the RTC by several of her heirs and private respondents herein, namely, Apolonio,Lilia, Octavio, Jr., Horacio, Benito, Jr., and Marissa, against Cesar, docketed as Special CivilAction No. P-77-97.

According to private respondents, Alicia owned in common with her siblings 13 parcels of landcalled Hacienda Sta. Rita in Pili and Minalabac, Camarines Sur, with an aggregate area of4,960,963 square meters or 496 hectares, and more particularly described as follows:

ORIGINAL CERTIFICATE OF TITLE NO. 626

"A parcel of land denominated as Lot 516-B of the Subdivision Survey Plan Csd-05-001020,situated at Sagurong, Pili, Camarines Sur, bounded on the NE., by PNR; on the SE., by Bgy. Road;on the SW., by Lot 2870; and on the NW., by Lot 512, containing an area of EIGHT THOUSANDSEVEN HUNDRED TWELVE (8,712) SQUARE METERS, more or less, declared under A.R.P. No.014 166 and assessed at P12, 860.00."


"A parcel of land denominated as Lot 4237, Cad-291, Pili Cadastre, Plan Cen-05-000006,situated at Saguron, Pili, Camarines Sur, bounded on the N., by Irr. ditch beyond Lot 445; on theE., by Lots 517 and 518; on the S., by Creek, Lot 468, 467; and on the W., by Lot 2948 and Mun.of Minalabac, containing an area of EIGHT HUNDRED SIXTY ONE THOUSAND ONE HUNDREDSIXTY THREE (861,163) SQUARE METERS, more or less, declared under A.R.P. No. 016 268 andassessed at P539,020.00."


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"A parcel of land denominated as Lot 2870 Cad. 291, Pili Cadastre Plan Swo-05000607, situatedat Sagurong, Pili, Camarines Sur, bounded on the N., by Binasagan River; on the E., by Lots 512and 516; on the S., by Barangay Road; and on the W., by Lot 469, containing an area ofTHIRTEEN THOUSAND FOUR HUNDRED SIXTY TWO (13,462) SQUARE METERS, mote or ldeclared under A.R.P. No. 014 130 and assessed at P15,180.00."


"A parcel of land denominated as Lot 517-B of the Subdivision Survey Plan Csd-05-001020,situated at Sagurong, Pili, Camarines Sur, bounded on the NE., by PNR; on the SE., by Lot 519;on the SW., by Lots 2025 and 2942; and on the NW., by Brgy. Road, containing an area ofTHIRTEEN THOUSAND SEVEN HUNDRED SIXTY FIVE (13,765) SQUARE METERS, more or declared under A.R.P. No. 014 167 and assessed at P20,310.00."


"A parcel of land denominated as Lot 4207-B of the subdivision survey Plan Csd-05-011349-D,situated at Sagurong (San Jose), Pili, Camarines Sur, bounded on the NE., by Lot 4207-C, Lot6157; on the SE., by Irr. ditch, Lot 2942; and on the NW., by Lot 4298 (3051-B), containing anarea of FIFTY FOUR (54) SQUARE METERS, mote or less, declared under A.R.P. No. 014 384 andassessed at P40.00."


"A parcel of land denominated as Lot 4207-A of the subdivision survey Plan Csd-05-011349-D,situated at Sagurong (San Jose), Pili, Camarines Sur, bounded on the NE., by Lot 4205 (I0T 443-ACsd-05-001019); on the SE., and SW., by Irr. ditch (Lot 2942); on the W., by Lot 4207-C Lot 6157;and on the NW., by Lot 4208 (Lot 3051-B, Csd-05-001019), containing an area of TWENTYSEVEN THOUSAND THREE HUNDRED THIRTY SEVEN (27,33) SQUARE METERS, more or declared under A.R.P. No. 014 383 and assessed at P20,150.00."


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2. 1/8 share in the parcel of land with improvements thereon (cockpit arena) located inPoblacion, San Juan, Batangas covered by TCT No. 0-3255;

3. A parcel of commercial land under property Index No. 024-21-001-25-005 situated inPoblacion, San Juan Batangas containing an area of 540 square meters, more or less;

4. A parcel of land situated in Yabo, Sipocot, Camarines Sur containing an area of 2,000hectares and covered by Tax Declaration No. 7546;

5. A parcel of land located at Brgy. Yabo, Sipocot, Camarines Sur with an area of 21,000square meters, more or less, covered by Tax Declaration No. 6622;

6. A parcel of land located at Brgy. Yabo, Sipocot, Camarines Sur with an area of 2,6750hectares under Tax Declaration No. 5352;

7. A parcel of land located at Barrio Yabo, Sipocot, Camarines Sur with an area of 2,3750

hectares and covered by Tax Declaration No. 3653, and8. Shares of Stock in Bolbok Rural Bank, Inc., a family owned rural bank consisting of 3,230

shares at P100.00 per share. [4]

Cesar's request for inclusion was contested by private respondents on the ground that theproperties he enumerated had already been previously partitioned and distributed to theappropriate parties. [5]

On 4 February 2000, the RTC decided in favor of private respondents and issued an Order of

Partition of the Estate of Alicia Marasigan, decreeing that:As regards to [sic] the real properties located in Hacienda Sta. Rita in the municipalities of Piliand Minilabac, Camarines Sur as described in par. 3 of the complaint, the actual arearepresenting the 2/21 pro-indiviso share having been determined consisting of 422,422.65 sq.meters, more or less (Exhibit 0-2) therefore, the share of each heir of the late Alicia Marasiganis 1/7 or equivalent to 67,496.09 square meters each (Exh. 0-3).

Wherefore, in view of the foregoing, decision is hereby rendered.

1. Ordering the partition of the estate of Alicia Marasigan in Hacienda Sta. Rita located inthe municipalities of Pili and Minalabac, Camarines Sur consisting of 422,422.65 sq.meters among her surviving brothers and sisters namely: APOLONIO, LILIA, BENITO andCESAR, all surnamed MARASIGAN who will inherit per capita and her nephews andnieces who are the children of deceased brothers - the children of Francisco Marasiganand children of Horacio Marasigan who will inherit per stirpes and Octavio Marasigan,Jr., who will inherit by right of representation of his deceased father, Octavio Marasigan,Sr.


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2. Declaring the partition of the San Juan, Batangas properties made by the heirs of AliciaMarasigan as contained in the minutes of the Board Meeting of the Rural Bank of Bolbokvalid and binding among them.

3. Ordering the partition of the real properties located in San Juan, Batangas as shown and

reflected in Exhibits 1 to 10 inclusive presented by defendant, in the same sharing andproportion as provided in paragraph one above-cited in this dispositive portion.

4. No pronouncement as to costs. [6]

As the parties could not agree on how they shall physically partition among themselves Alicia'sestate, private respondents filed a Motion to Appoint Commissioners [7] following the procedureoutlined in Sections 4, 5, 6 and 7 of Rule 69 of the Rules of Court, citing, among other bases fortheir motion:That unfortunately, the parties could not agree to make the partition among themselves which

should have been submitted for the confirmation of the Honorable Court more so because nophysical division could be had on the 2/21 pro-indiviso shares of the decedent [Alicia] due todifferent locations, contours and conditions;

The RTC granted the Motion and appointed Myrna V. Badiong, Assistant Provincial Assessor ofCamarines Sur, as Chairman of the Board of Commissioners. [8] Private respondents nominatedSandie B. Dacara as the second commissioner. Cesar failed to nominate a third commissionerdespite due notice. Upon lapse of the period given, only two commissioners were appointed.

On 26 October 2000, the two Commissioners conducted an ocular inspection of Hacienda Sta.Rita, together with the Local Assessment Operations Officer IV of the Provincial Assessor'sOffice, the Barangay Agrarian Reform Committee (BARC) Chairman, and the Marasigans'caretaker. However, Cesar contended that he did not receive any notice from theCommissioners to attend the ocular inspection and he was, thus, not present on said occasion.

The Commissioners' Report [9] was released on 17 November 2000 stating the following findingsand recommendations:

The undersigned Commissioners admit the 472,472.65 (47.2472.65) square meters

representing the 2/21 pro-indiviso share of the deceased Alicia Marasigan and the 1/7 share ofeach of the heirs of Alicia N. Marasigan equivalent to 67,496.09 square meters or 6.7496.09hectares determined by Geodetic Engineer Roberto R. Revilla in his Compliance with the Orderof the Honorable Court dated November 18, 1998.

Considering that the physical division of the 2/21 pro-indiviso share of the decedent, AliciaMarasigan cannot be done because of the different locations and conditions of the properties,


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undersigned Commissioners hereby recommend that the heirs may assign their 1/7 share toone of the parties willing to buy the same (Sec. 5, Rule 69 of the Rules of Court) provided hepays to the heir[s] willing to assign his/her 1/7 share such amounts the Commissioners haverecommended and duly approved by the Honorable Court.

In consideration of such findings and after a careful and thorough deliberations by theundersigned on the subject matter, considering the subject properties' classification and actualpredominant use, desirability and demand and together with the benefits that may be derivedtherefrom by the landowners, we have decided to recommend as it is hereby recommendedthat the price of the 1/7 share of each of the heir[s] is P700,000.00 per hectare, thus:

P700,000.00 x 6.7496.09 hectares = P4,724,726.30 or in words:

FOUR MILLION SEVEN HUNDRED TWENTY FOUR THOUSAND SEVEN HUNDRED TWENAND 30/100 PESOS FOR THE 1/7 SHARE (6.7496.09 HECTARES) OF EACH OF THE HEIRS.[10]

Cesar opposed the foregoing findings and prayed for the disapproval of the Commissioners'Report. In his Comment/Opposition to the Commissioners' Report, he maintained that:

He does not expect that he would be forced, to buy his co-owner's share or to sell his shareinstead. Had he known that it would be the recourse he would have appealed the judgment[with petitioners referring to the RTC Order of Partition] . But the findings of facts in the Decisionas well [as] dispositive do not show that any valid grounds for exception to partition is even

present in the instant case.[11]

Cesar alleged that the estate is not indivisible just because of the different locations andconditions of the parcels of land constituting the same. Section 5, Rule 69 of the Rules of Courtcan only be availed of if the partition or division of the real properties involved would beprejudicial to the interest of any of the parties. He asserted that despite the segregation of hisshare, the remaining parcels of land would still be serviceable for the planting of rice, corn, andsugarcane, thus evidencing that no prejudice would be caused to the interests of his co-heirs.

Countering Cesar's arguments, private respondents contended that physical division isimpossible because Alicia's estate is equivalent to 2/21 shares in Hacienda Sta. Rita, which iscomposed of 13 parcels under different titles and tax declarations, situated in differentbarangays and municipalities, and covers an area of 496 hectares.

After a serious consideration of the matters raised by the parties, the RTC issued an Orderdated 22 June 2001 approving in toto the recommendations embodied in the Commissioners'


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Report, particularly, the recommendation that the property be assigned to one of the heirs atP700,000.00 per hectare or a total amount of P4,724,726.00 ,[12] after finding the same to be inaccordance with the Rules of Court and the New Civil Code. Pertinent portions of the Order arereproduced below:

WHEREFORE, in view of all the foregoing, the Commissioners Report dated November 17, 2000is hereby approved in toto, more specifically its recommendation to assign the property to anyone of the heirs interested at the price of P700,000.00 per hectare or in the total amount ofP4,724,726.00 per share.

Regarding the properties of deceased Alicia Marasigan located at San Juan, Batangas, theherein Commissioners, Mrs. Myrna V. Badiong and Engr. Sandie B. Dacara are hereby directedto proceed with utmost dispatch to San Juan, Batangas and inspect said properties (Exhibits 1to 10 inclusive) and thereafter to submit a Supplemental Report as to its partition or other

disposition with notice to all parties and their counsels all at the expense of the estate, within aperiod of thirty (30) days from receipt hereof.

Dissatisfied, Cesar filed a Motion for Reconsideration, [13] which was denied by the RTC for lackof merit. [14]

In the meantime, Cesar died on 25 October 2001. He was substituted by his heirs and hereinpetitioners, namely, Luz Regina, Cesar, Jr., Benito, Santiago, Renato, Jose, Geraldo, Orlando,Peter, Paul, Mauricio, Rommel, Michael, Gabriel, and Maria Luz, all surnamed Marasigan.

Upon the denial by the RTC of Cesar's Motion for Reconsideration, petitioners elevated theircase to the Court of Appeals via a Petition for Certiorari and Prohibition under Rule 65 of theRules of Court, docketed as Special Civil Action No. 67529.[15] They claimed that the RTC judgeacted with grave abuse of discretion amounting to lack or excess of jurisdiction in approving theCommissioners' Report although the facts would clearly indicate the following:

(a) The procedure taken by the Commissioners violated the procedure for partition provided inSection 4, Rule 69 of the 1997 Rules of Procedure because there was no notice sent to them forthe viewing and examination of the properties of the estate ; neither were they heard as totheir preference in the portion of the estate, thus depriving them of due process;

(b) The ground used by the Commissioners resulting in their recommendation to assign theproperty is not one of those grounds provided under the Rules

(c) Article 492 of the New Civil Code is inapplicable


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(d) Assignment of the real properties to one of the parties will not end the co-ownership.

Moreover, petitioners accused the RTC of committing grave abuse of discretion in solely relyingon the testimony of Apolonio to the effect that physical division is impractical because, whileother portions of the land are suitable for agriculture, the others are not, citing the differentcontours of the land and unavailability of water supply in some parts.

The Court of Appeals dismissed petitioners' Petition for Certiorari and Prohibition in aDecision[16] promulgated on 31 July 2002, and ruled that the RTC acted within its authority inissuing the Order of 22 June 2001. The Court of Appeals found that petitioners failed todischarge the burden of proving that the proceedings before the Board of Commissioners wereunfair and prejudicial. It likewise found that the petitioners were not denied due processconsidering that they were afforded the opportunity to be heard during the hearing for

approval of the Commissioners' Report on 18 January 2001. According to the appellate court,whether or not the physical division of the estate will cause prejudice to the interests of theparties is an issue addressed to the discretion of the Commissioners. It further held that itwould be absurd to believe that the prejudice referred to in Section 5, Rule 69 of the Rules ofCourt does not embrace physical impossibility and impracticality. It concurred in the finding ofthe RTC that:

It is not difficult to believe that a physical partition/division of the 2/21 pro-indiviso shares ofthe decedent Alicia Marasigan contained in and spread throughout thirteen (13) parcels of the

Hacienda Sta. Rita with a total area of 946 (sic) hectares would be quite impossible if totallyimpractical. The said parcels are of different measurements in terms of areas and shapeslocated in different barrages of the Municipalities of Pili and Minalabac, Camarines Sur. [17]

The Court of Appeals also noted that whether or not the RTC correctly applied Section 5, Rule69 of the Rules of Court and Article 492 of the New Civil Code, would involve an error of judgment, which cannot be reviewed on certiorari . Finally, the Court of Appeals foundunmeritorious petitioners' argument that the assignment of the estate to one of the partiesdoes not end the co-ownership, considering that it questions the 4 February 2000 [18] Decision ofthe RTC which had already become final and executory.

Petitioners filed a Motion for Reconsideration [19] of the foregoing Decision but the same wasdenied by the Court of Appeals in a Resolution dated 13 November 2002. Still aggrieved,petitioners filed on 31 December 2002 this Petition for Review under Rule 45 of the RevisedRules of Court, docketed as G.R. No. 156078.


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action is barred by a prior judgment or by statute of limitations, the court shall dismiss theclaim.

First, it bears to point out that Cesar, petitioners' predecessor, did not file any motion todismiss, and his answer before the RTC did not bear the defenses/objections of lack of jurisdiction or cause of action on these grounds; consequently, these must be consideredwaived. The exception that the court may still dismiss a case for lack of jurisdiction over thesubject matter, although the same is not pleaded, but is apparent in the pleadings or evidenceon record, does not find application to the present Petition. Second, petitioners' arguments [37] on the lack of jurisdiction of the RTC over the case more appropriately pertain to venue, ratherthan jurisdiction over the subject matter, and are, moreover, not apparent from the pleadingsand evidence on record. Third, the property subject of partition is only the 47.2 hectare pro-indiviso area representing the estate of Alicia. It does not include the entire 496 hectares ofland comprising Hacienda Sta. Rita.

Even petitioners' argument that non-payment of appropriate docket fees by privaterespondents deprived the RTC of jurisdiction to partition the entire Hacienda Sta. Rita [38] deserves scant consideration. In National Steel Corporation v. Court of Appeals ,[39] the Courtruled:

x x x while the lack of jurisdiction of a court may be raised at any stage of an action,nevertheless, the party raising such question may be estopped if he has actively taken part inthe very proceedings which he questions and he only objects to the court's jurisdiction because

the judgment or the order subsequently rendered is adverse to him.Irrefragably, petitioners raised the issues of jurisdiction for lack of payment of appropriatedocket fees and lack of cause of action belatedly in their Memorandum before this Court. Cesarand petitioners were noticeably mum about these in the proceedings before. In fact, Cesaractively participated in the proceedings conducted before the RTC by seeking affirmative reliefstherefrom, such as the inclusion of more properties in the partition. Hence, petitioners arealready estopped from assailing the jurisdiction of the RTC on this ground.

It is conceded that this Court adheres to the policy that "where the court itself clearly has no jurisdiction over the subject matter or the nature of the action, the invocation of this defensemay de done at any time." [40] While it is the general rule that neither waiver nor estoppel shallapply to confer jurisdiction upon a court, the Court may rule otherwise under meritorious andexceptional circumstances. One such exception is Tijam v. Sibonghanoy, [41] which findsapplication in this case. This Court held in Tijam that "after voluntarily submitting a cause andencountering an adverse decision on the merits, it is too late for the loser to question the


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After an exhaustive study of the merits of the case and the pleadings submitted by the parties,this Court is convinced that the Court of Appeals did not err in affirming the Order of the RTCwhich approved the Commissioners' recommendations as to the manner of implementing the

Order of Partition of Alicia's estate. There is no reason to reverse the Court of Appeal'sdismissal of petitioners' Petition for Certiorari and Prohibition and ruling that the RTC actedwell-within its jurisdiction in issuing the assailed Order. Nowhere is it shown that the RTCcommitted such patent, gross and prejudicial errors of law or fact, or a capricious disregard ofsettled law and jurisprudence, as to amount to a grave abuse of discretion or lack of jurisdictionon its part, in adopting and confirming the recommendations submitted by the Commissioners,and which would have warranted the issuance of a writ of certiorari .

This petition originated from an original action for partition. It is governed by Rule 69 of theRules of Court, and can be availed of under the following circumstances:

Section 1. Complaint in action for partition of real estate. A person having the right to compelthe partition of real estate may do so as provided in this Rule, setting forth in his complaint thenature and extent of his title and an adequate description of the real estate of which partition isdemanded and joining as defendants all other persons interested in the property.

In this jurisdiction, an action for partition is comprised of two phases: first , the trial court, afterdetermining that a co-ownership in fact exists and that partition is proper, issues an order forpartition; and, second , the trial court promulgates a decision confirming the sketch and

subdivision of the properties submitted by the parties (if the parties reach an agreement) or bythe appointed commissioners (if the parties fail to agree), as the case may be. [44]

The delineations of these two phases have already been thoroughly discussed by this Court inseveral cases where it explained:

The first phase of a partition and/or accounting suit is taken up with the determination ofwhether or not a co-ownership in fact exists, ( i.e. , not otherwise legally proscribed) and may bemade by voluntary agreement of all the parties interested in the property. This pha

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