case digest for rem exam.doc

7/29/2019 case digest for rem exam.doc

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Interpleader

Ocampo v. Tirona

Facts: Ocampo bought the subject parcel of land from Rosauro Breton, heir of the registered owner Alipio Breton Cruz. Tirona,tenant of Breton, was informed of this arrangement and started paying Ocampo rent. Some months thereafter, Ocampo received aletter from Callejo Law Office stating that Tirona will stop paying rent because the area has been declared under area for priority

development. Ocampo then wrote a demand letter for payment of rental. Despite receipt of said letter, Tirona failed and refusedand still fails and refuses to heed Ocampos demands.Ocampo then filed a complaint for unlawful detainer and damages against Tirona before the MTC. Tirona answered by assertingthat Dona Yaneza was the owner, not Ocampo. Tirona subsequently filed a motion for leave to amend her answer because alawyer did not assist her in her initial answer. In her amended answer, Tirona maintained that Ocampo is not the owner of thesubject land. Tirona also alleged that she has a right of first refusal in case of sale of the land.MTC ruled in favor of Ocampo because of non-payment of rent and because of the termination of Tironas right to possess andoccupy the subject land. Tirona changed theory in the RTC and raised that it was Rosauros sister Ma. Lourdes who could validlysell the land to Ocampo. The court did not believe her and still ruled in favor of Ocampo. CA considered partition of the estate ofAlipio as a prerequisite to Ocampos action so it reversed the decision of the MTC and RTC.Issue: Who has the right of possession of the subject land? What should have been filed by Tirona to show good faith of Tironain not paying rent?Decision: Ocampo has a better right. All the elements of unlawful detainer are present. Tirona obviously is in bad faith. The goodfaith of Tirona is put in question in her preference for Maria Lourdes Breton-Mendiola when Ocampo informed her earlier thatthe land has already been sold to him. As a stakeholder, Tirona should have used reasonable diligence in hailing the

contending claimants to court. Tirona need not have awaited actual institution of a suit by Ocampo against her beforefiling a bill of interpleader. An action for interpleader is proper when the lessee does not know the person to whom to payrentals due to conflicting claims on the property

Note: The action of interpleader is a remedy whereby a person who has property whether personal or real, in his possession, or anobligation to render wholly or partially, without claiming any right in both, or claims an interest which in whole or in part is notdisputed by the conflicting claimants, comes to court and asks that the persons who claim the said property or who considerthemselves entitled to demand compliance with the obligation, be required to litigate among themselves, in order to determinefinally who is entitled to one or the other thing. The remedy is afforded not to protect a person against a double liability but to

protect him against a double vexation in respect of one liability. When the court orders that the claimants litigate amongthemselves, there arises in reality a new action and the former are styled interpleaders, and in such a case the pleading whichinitiates the action is called a complaint of interpleader and not a cross-complaint.

RCBC v. Metro Container Corp.

FACTS: Sept. 1990, Ley Construction Corporation (LEYCON) contracted a loan from RCBC in the amount of P30 millionwhich was secured by a real estate mortgage over a Valenzuela property. LEYCON failed to settle its obligations promptingRCBC to institute extrajudicial foreclosure proceedings against it and in Dec. 1992, RCBC was the highest bidder.

LEYCON as a response, filed an action for Nullificatoin of Extrajudicial Foreclosure Sale and Damages against RCBC buteventually RCBC was able to consolidate its ownership over the property due to LEYCONs failure to redeem. Metro ContainerCorporation (METROCAN) which was leasing the property from LEYCON was demanded by RCBC to make rental payments.LEYCON filed an action for Unlawful Detainer against METROCAN.

METROCAN, meanwhile, filed a complaint for Interpleader against LEYCON and RCBC to compel them to interplead andlitigate their several claims among themselves and to determine which among them shall rightfully receive the payment ofmonthly rentals. In the Interpleader case, an amicable settlement was made between METROCAN and LEYCON with respect to

back rentals. However, in the Unlawful Detainer case, METROCAN was order to pay LEYCON whatever rentals were due.METRPCAN claims interpleader case is moot and academic because of amicable settlement. RCBC alleges, however, that the

decision of the lower court in the ejectment case cannot render the Interpleader action moot and academic.

ISSUE: W/N the Party who initiates the interpleader action may be compelled to litigate if he is no longer interested to pursuesuch cause of action?

RULING: It is undisputed that METROCAN filed the interpleader action because LEYCON was claiming payment of therentals as lessor and RCBC was making a demand by virtue of the consolidation of the title of the property in its name. TheSupreme Court said that the unlawful detainer case involves issue of material possession and not of ownership, therefore, thereason for the interpleader ceased when the lower court rendered judgment ordering METROCAN to pay LEYCON. It should beremembered that an action for interpleader is afforded to protect a person not against double liability but against double vexationin respect of one liability.


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ETERNAL GARDENS MEMORIAL PARKS CORPORATION vs. IAC, et. al (165 SCRA 439)

the essence of an interpleader, aside from the disavowal of interest in the property in litigation on the part of the petitioner, isthe deposit of the property or funds in controversy with the court. It is a rule founded on justice and equity: "that the plaintiff may

not continue to benefit from the property or funds in litigation during the pendency of the suit at the expense of whoever willultimately be decided as entitled thereto."

Facts: ETERNAL Gardens Memorial Parks Corporation (ETERNAL) and North Philippine Union MISSION Corporations(MISSION) executed a Land Development Agreement (Agreement) over the property owned by the latter into a memorial park.The lot will be subdivided into and sold as memorial plot lots. In said agreement, MISSION is entitled to receive 40% of the netgross collection. Under the implementation of the agreement, MISSION received initial payment as part of its share under theabove Agreement.

However, MAYSILO Estate (MAYSILO) asserted its claim of ownership over the property in question. In view of the conflictingclaims of ownership of the defendants over the properties, petitioner filed a complaint for interpleader against MISSION andMAYSILO.

MISSION then presented a motion for the placing on judicial deposit the amounts due and unpaid from ETERNAL. The trialcourt denied the motion.

MISSION filed a petition forcertiorari with the then IAC praying that the aforementioned Orders of trial court be set aside and

that an order be issued to deposit in court or in a depositor trustee bank of any and all payments, plus interest thereon, due theprivate respondent MISSION under the Land Development Agreement, said amounts deposited to be paid to whomever may befound later to be entitled thereto.

IAC dismissed the petition. It however later reversed its decision, and ordered ETERNAL to deposit whatever amounts are duefrom it under the Land Development Agreement with a reputable bank to be designated by the respondent court to be thedepository trustee of the said amounts to be paid to whoever shall be found entitled thereto. ETERNAL moved for areconsideration of the above decision but it was denied for lack of merit.

Issue: Whether or not respondent CA abused its discretion amounting to lack of jurisdiction in reconsidering its resolution and inrequiring instead that ETERNAL deposit whatever amounts are due from it under the Land Development Agreement

Held:NO. Petitioner admitted among others in its complaint in Interpleader that it is still obligated to pay certain amounts toprivate respondent; that it claims no interest in such amounts due and is willing to pay whoever is declared entitled to saidamounts.

As correctly observed by the Court of Appeals, the essence of an interpleader, aside from the disavowal of interest in the propertyin litigation on the part of the petitioner, is the deposit of the property or funds in controversy with the court. It is a rule foundedon justice and equity: "that the plaintiff may not continue to benefit from the property or funds in litigation during the pendencyof the suit at the expense of whoever will ultimately be decided as entitled thereto."

The case at bar was elevated to the Court of Appeals on certiorari with prohibitory and mandatory injunction. Said appellatecourt found that more than twenty million pesos are involved; so that on interest alone for savings or time deposit would beconsiderable, now accruing in favor of the ETERNAL. Finding that such is violative of the very essence of the complaint forinterpleader as it clearly runs against the interest of justice in this case, the Court of Appeals cannot be faulted for finding that thelower court committed a grave abuse of discretion which requires correction by the requirement that a deposit of said amountsshould be made to a bank approved by the Court.

Reyes vs. Lim

Facts: Petitioner Reyes filed a complaint for annulment of contract and damages against respondent Lim and Harrison Lumber.

In his complaint he alleged that he and Lim entered into a contract to sell a parcel of land wherein the other respondent Harrison

Lumber was occupying as lessee. That petitioner had informed Harrison Lumber to vacate the property and if they failed to

vacate, he will hold them liable for the penalty of 400,000 a month as provided in the contract to sell. He further alleged that Lim

connived with Harrison Lumber not to vacate the property until the 400,000 monthly penalties would have accumulated and

equaled the unpaid purchase price of 18,000. Harrison in their answer denies the allegation of connivance between them and Lim

to defraud Reyes. They alleged that Reyes approved their request to extend their time to vacate the premise due to the difficulty

in finding a new location for their business. While Lim in his answer alleged that he was ready and willing to pay the balance of

the purchase price and requested a meeting with Reyes but Reyes kept on postponing the meeting and instead offered to

return the 10,000,000 down payment because Reyes has a hard time in removing the lessee to the property but Lim rejected the


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offer and proceeded to verify the status of Reyes title to the property, and he learned that it was already sold to Line One

Corporation.

Issues:

(1) Whether or not the act of Reyes constitute unjust enrichment

(2) Whether or not the principle of unjust enrichment applies to procedural remedies

Held:

The principle that no person may unjustly enrich himself at the expense of another is embodied in Article 22 of the Civil Code.

This principle applies not only to substantive rights but also to procedural remedies. One condition for invoking this principle is

that the aggrieved party has no other action based on contract, quasi-contract, crime, quasi-delict or any other provision of law.

Courts can extend this condition to the hiatus in the Rules of Court where the aggrieved party, during the pendency of the case,

has no other recourse based on the provisional remedies of the Rules of Court. Thus, a court may not permit a seller to retain,

pendente lite, money paid by a buyer if the seller himself seeks rescission of the sale because he has subsequently sold the same

property to anotherbuyer. By seeking rescission, a seller necessarily offers to returnwhat he has received from the buyer. Such a

seller may not take back his offer if the court deems it equitable, to prevent unjust enrichment and ensure restitution, to put the

money in judicial deposit.

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. In this case, it was just, equitable

and proper for the trial court to order the deposit of the P10 million down payment to prevent unjust enrichment by Reyes at the

expense of Lim.

Wack Wack Golf v. Won

FACTS: Wack Wack Golf & Country Club (Corporation), a non-stock, civic and athletic corporation organized under the lawsof the Philippines, filed a complaint of interpleader. It alleged, for its first cause of action, that defendants Lee Won andBienvenido Tan were both claiming ownership over the Corporations membership fee certificate (MFC) 201: Won, by virtueof the decision of the CFI of Manila in civil case 26044 and by MFC 201-serial no. 1478 issued on Oct. 17, 1963 by the deputy

clerk of court for and in behalf of the president and secretary of the corporation and of the Peoples Bank & Trust Company; Tan,on the other hand, by virtue of MFC 201-serial no. 1199 issued on July 24, 1950 pursuant to an assignment in his favor by Swan,Culbertson and Fritz, the original owner of MFC 201. For its second cause of action, the Corporation alleged that MFC 201-serialno. 1478 issued by the deputy clerk of court in behalf of the Corporation is null and void because it was issued in violation of theCorporations by-laws, which require the surrender and cancellation of the outstanding MFC 201 before issuance may be made tothe transferee of a new certificate duly signed by its president and secretary, aside from the fact that the decision of the CFI ofManila in civil case 26044 is not binding upon defendant Tan.

The Corporation prayed for the issuance of an order requiring Lee and Tan to interplead and litigate their conflictingclaims, declaring who the lawful owner of MFC 201 is, and ordering the surrender and cancellation of MFC 201-serial no. 1478issued in the name of Lee.

The trial court dismissed the complaint upon motion of the defendants on the grounds of res judicata, failure of thecomplaint to state a cause of action, and bar by prescription.

ISSUE: Whether or not the action of interpleader was proper and timely filed.

HELD: No. The Supreme Court affirmed the dismissal of the complaint.The action of interpleader, under 120 of the Code of Civil Procedure, is a remedy whereby a person who has personal

property in his possession, or an obligation to render wholly or partially, without claiming any right to either, comes to court andasks that the persons who claim the said personal property or who consider themselves entitled to demand compliance with theobligation, be required to litigate among themselves in order to determine finally who is entitled to tone or the one thing. Theremedy is afforded to protect a person not against double liability but against double vexation in respect of one liability.

A stakeholder should use reasonable diligence to hale the contending claimants to court. He need not await actualinstitution of independent suits against him before filing a bill of interpleader. He should file an action of interpleader within areasonable time after a dispute has arisen without waiting to be sued by either of the contending claimants. Otherwise, he may be

barred by laches or undue delay. But where he acts with reasonable diligence in view of the environmental circumstances, theremedy is not barred.


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If a stakeholder defends a suit filed by one of the adverse claimants and allows said suit to proceed to final judgmentagainst him, he cannot later on have that part of the litigation repeated in an interpleader suit. In the case at hand, the Corporationallowed civil case 26044 to proceed to final judgment. And it offered no satisfactory explanation for its failure to implead Tan inthe same litigation. In this factual situation, it is clear that this interpleader suit cannot prosper because it was filed much too late.

A successful litigant cannot later be impleaded by his defeated adversary in an interpleader suit and compelled to provehis claim anew against other adverse claimants, as that would in effect be a collateral attack upon the judgment.

In fine, the interpleader suit cannot prosper because the Corporation had already been made independently liable in

civil case 26044 and, therefore, its application for interpleader would in effect be a collateral attack upon the final judgment inthe said civil case; Lee had already established his rights to MFC 201 in the civil case and, therefore, this interpleader suit wouldcompel him to establish his rights anew, and thereby increase instead of diminish litigations, which is one of the purposes of aninterpleader suit, with the possibility that the benefits of the final judgment in the said civil case might eventually be taken awayfrom him; and because the Corporation allowed itself to be sued to final judgment in the said case, its action of interpleader wasfiled inexcusably late, for which reason it is barred by laches or unreasonable delay.

Mesina v. IAC

FACTS:

Jose Go (Go) purchased from Associated Bank (AB) Cashier's Check No. 011302 for P800,000.00. Unfortunately, Go

left said check on the top of the desk of the bank manager when he left the bank.

The bank manager entrusted the check for safekeeping to a bank official, a certain Albert Uy ( Uy), who had then a

visitor in the person of Alexander Lim (Lim). Uy had to answer a phone call on a nearby telephone after which he proceeded to the men's room. When he returned to

his desk, his visitor Lim was already gone, along with the check.

Uy advised Go to go to the bank to accomplish a "STOP PAYMENT" order. Uy also made a police report, pointing tothe person of Alexander Lim as the one who could shed light on it.

Police records that AB received the lost check for clearing on December 31, 1983, coming from Prudential Bank (PB)Escolta Branch. The check was immediately dishonored by AB and sent it back to PB, with "Payment Stopped"stamped on it.

4 days thereafter, the same was again returned to AB. Yet again, AB dishonored it.

Several days later, AB received a letter from Atty. Lorenzo Navarro (Atty. Navarro) demanding payment on the

cashier's check being held by his client, whose name he refused to reveal. Atty. Navarro threatened to sue if payment isnot made

AB in its letter replied saying the check belonged to Go who lost it in the bank and is laying claim to it.

The police sent a letter to the Manager of the PB requesting assistance in identifying the person who tried to encash the

check, but it refused. PB said it had to protect its client's interest and the identity could only be revealed with theclient's conformity.

Unsure of what to do on the matter AB filed an action for Interpleader naming as Go and John Doe, Atty. Navarro'sunnamed client.

AB received summons and copy of the complaint for damages of Marcelo A. Mesina (Mesina) from the RTC of

Caloocan City.

AB moved to amend its complaint, having been notified for the first time of the name of Atty. Navarro's client andsubstituted Mesina for John Doe. Simultaneously, AB thru representative Uy, informed Cpl. Gimao of the WesternPolice District that the lost check of Go is in the possession of Mesina.

Cpl. Gimao went to Mesina to inquire on how he had possession of the check. Mesina answered that it was paid to himby Lim in a "certain transaction" but refused to elucidate further.

An information for theft and warrant of arrest was issued to Lim. (said warrant up to the date of the filing of thispetition remains unserved since Lim couldnt be found).

Meanwhile, Go filed his answer in the Interpleader Case and moved to participate as intervenor in the complaint for

damages. Uy also filed a motion of intervention and answer in the complaint for Interpleader. During pre-trial conference in the interpleader case, it was disclosed that the "John Doe" is actually Mesina.

Mesina, instead of filing his answer to the complaint in the interpleader, filed on an Omnibus Motion to Dismiss ExAbudante Cautela alleging lack of jurisdiction in view of the absence of an order to litigate, failure to state a cause ofaction and lack of personality to sue.

o denied by TC and ruled that ABs complaint sufficiently pleaded a cause of action for interpleader

o MR of Mesina denied

o Judge Gonong declared Mesina in default

Mesina filed a petition for certiorari with preliminary injunction with IAC


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o dismissed by IAC

o MR of Mesina also denied

TC DECISION ON INTERPLEADER: ordered AB to replace Cashier's Check in favor of Go or its cash equivalent with legalrate of interest from date of complaint.

ISSUE: W/N interpleader suit is proper?

HELD: YES. Decision affirmed in toto.

RATIO:

Mesina insists that there is no showing of conflicting claims; thus, interpleader is out of the question. However, ABmerely took the necessary precaution not to make a mistake as to whom to pay and therefore interpleader was its proper

remedy.

It has been shown that the interpleader suit was filed by AB because Mesina and Go were both laying their claims onthe check. Mesina was even asking payment thereon and Go as the purchaser or owner.

AB filed the interpleader suit not because petitioner sued it but because Mesina is laying claim to the same check that Go isclaiming. On the very day AB instituted the case in interpleader, it was not aware of any suit for damages filed by Mesina againstit as supported by the fact that the interpleader case was first entitled Associated Bank vs. Jose Go and John Doe.THUS, records of the case show that AB had to resort to details in support of its action for Interpleader. Before even resorting toInterpleader, AB took precautionary and necessary measures to bring out the truth.

Declaratory Relief

Tano vs. Socrates

Facts

The Sangguniang Panlungsod of Puerto Princessa enacted ordinance no. 15-92 banning the shipment of live fish and lobsteroutside Puerto Princessa City for a period of 5 years. In the same light, the Sangguniang Panlalawigan of Palawan also enacted aresolution that prohibits the catching, gathering, buying, selling and possessing and shipment of live marine coral dwellingaquatic organisms for a period of 5 years within the Palawan waters. The petitiones Airline Shippers Association of Palawantogether with marine merchants were charged for violating the above ordinance and resolution by the city and provincialgovernments. The petitioners now allege that they have the preferential rights as marginal fishermen granted with privileges

provided in Section 149 of the Local Government Code, invoking the invalidity of the above-stated enactments as violative oftheir preferential rights.

Issue

Whether or not the enacted resolutions and ordinances by the local government units violative of the preferential rights of themarginal fishermen ?

Held

No, the enacted resolution and ordinance of the LGU were not violative of their preferential rights. The enactment of these lawswas a valid exercise of the police power of the LGU to protect public interests and the public right to a balanced and healthierecology. The rights and privileges invoked by the petitioners are not absolute. The general welfare clause of the local governmentcode mandates for the liberal interpretation in giving the LGUs more power to accelerate economic development and to upgradethe life of the people in the community. The LGUs are endowed with the power to enact fishery laws in its municipal waterswhich necessarily includes the enactment of ordinances in order to effectively carry out the enforcement of fishery laws in theirlocal community.

Velarde v SJS (2004)Doctrine: Decision, more specifically a decision not conforming to the form and substance required by the Constitution is voidand deemed legally inexistent (Panganiban)

Facts:-On January 28, 2003, SJS filed a Petition for Declaratory Relief before the RTC-Manila against Velarde and his co-respondentsEminence, Jaime Cardinal Sin, Executive Minister Erao Manalo, Brother Eddie Villanueva and Brother Eliseo F. Soriano.-SJS, a registered political party, sought the interpretation of several constitutional provisions, specifically on the separation ofchurch and state; and a declaratory judgment on the constitutionality of the acts of religious leaders endorsing a candidate for anelective office, or urging or requiring the members of their flock to vote for a specified candidate.


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-The petitioner filed a Motion to dismiss before the trial court owing to the fact that alleged that the questioned SJS Petition didnot state a cause of action and that there was no justiciable controversy.-The trial courts junked the Velarde petitions under certain reasons:1. It said that it had jurisdiction over the SJS petition, because in praying for a determination as to whether the actions imputed tothe respondents were violative of Article II, Section 6 of the Fundamental Law, the petition has raised only a question of law.2. It then proceeded to a lengthy discussion of the issue raised in the Petition the separation of church and state even tracing,to some extent, the historical background of the principle. Through its discourse, the court quipped at some point that the

"endorsement of specific candidates in an election to any public office is a clear violation of the separation clause."-The trial courts essay did not contain a statement of facts and a dispositive portion, however. Due to this aberration, Velardeand Soriano filed separate Motions for Reconsideration before the trial court owing to these facts.-The lower court denied these Motions. Hence, this petition for review.On April 13, 2004, the Court en banc conducted an Oral Argument.14-In his Petition, Brother Mike Velarde submits the following issues for this Courts resolution:1. Whether or not the Decision dated 12 June 2003 rendered by the court a quo was proper and valid;2. Whether or not there exists justiciable controversy in herein respondents Petition for declaratory relief;3. Whether or not herein respondent has legal interest in filing the Petition for declaratory relief;4. Whether or not the constitutional question sought to be resolved by herein respondent is ripe for judicial determination;5. Whether or not there is adequate remedy other than the declaratory relief; and,6. Whether or not the court a quo has jurisdiction over the Petition for declaratory relief of herein respondent.

Issues:In its oral argument, the Supreme Court condensed Velardes issues and divided it into 2 groups:

A. Procedural Issues1. Did the Petition for Declaratory Relief raise a justiciable controversy?2. Did it state a cause of action?3.Did respondent have any legal standing to file the Petition for Declaratory Relief?B. Substantive Issues1. Did the RTC Decision conform to the form and substance required by the Constitution, the law and the Rules of Court?2. May religious leaders like herein petitioner, Bro. Mike Velarde, be prohibited from endorsing candidates for publicoffice? Corollarily, may they be banned from campaigning against said candidates? (Not answered in the affirmative)

Decision:Petition for Review GRANTED. The assailed June 12, 2003 Decision and July 29, 2003 Order of the Regional Trial Court ofManila DECLARED NULL AND VOID and thus SET ASIDE. The SJS Petition for Declaratory Relief is DISMISSED forfailure to state a cause of action.

Holding:

Procedural Issues:1. NO. A justiciable controversy to an existing case or controversy that is appropriate or ripe for judicialdetermination, not one that is conjectural or merely anticipatory. A petition filed with the trial court should contain a plain,concise and direct statement of the ultimate facts on which the party pleading relies for his claim.

The SJS Petition fell short of the requirements to constitutue a jusiciable controversy. Why?a. It stated no ultimate facts. The petition simply theorized that the people elected who were endorsed by these religious leadersmight become beholden to the latter.

b. It did not sufficiently state a declaration of its rights and duties, what specific legal right of the petitioner wasviolated by the respondents therein, and what particular act or acts of the latter were in breach of its rights, the law or theconstitution,c. The petition did not pray for a stoppage of violated rights (duh, wala ngang rights na sinabi eh). It merely sought anopinion of the trial court. However, courts are proscribed from rendering an advisory opinion. (tantamount to making laws,remember the questionability of justice panganibans guidelines for article 36 of the family code)

It must also be considered that even the religious leaders were puzzled as to the breach of rights they were claimed to havecommitted. As pointed out by Soriano, what exactly has he done that merited the attention of SJS? Jaime Cardinal Sin adds thatthe election season had not even started at the time SJS filed its Petition and that he has not been actively involved in partisan

politics. The Petition does not even allege any indication or manifest intent on the part of any of the respondents below tochampion an electoral candidate, or to urge their so-called flock to vote for, a particular candidate. It is a time-honored rule thatsheer speculation does not give rise to an actionable right.

2. NO. A cause of action is an act or an omission of one party in violation of the legal right or rights of another,causing injury to the latter. (Rebollido v. Court of Appeals, 170 SCRA 800)


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Its essential elements are the following: (1) a right in favor of the plaintiff; (2) an obligation on the part of the named defendant torespect or not to violate such right; and (3) such defendants act or omission that is violative of the right of the plaintiff orconstituting a breach of the obligation of the former to the latter.

The court held that the complaints failure to state a cause of action became a ground for its outright dismissal. Why?

The Court found nothing in the SJS Petition to suggest that an explicit allegation of fact that SJS had a legal right to protect.

(trigger for the cause of action)

In special civil actions for declaratory relief, the concept of cause of action under ordinary civil actions does not strictly apply.The reason for this exception is that an action for declaratory relief presupposes that there has been no actual breach of theinstruments involved or of rights arising thereunder. Nevertheless, a breach or violation should be impending, imminent or atleast threatened.

The justices could only infer that the interest from its allegation was its mention of its (SJS) thousands of members who arecitizens-taxpayers-registered voters and who are keenly interested. Aside from the fact that this general averment did notconstitute a legal right or interest, the courts inferred interest too vague and speculative in character. Rules require that theinterest must be material to the issue and affected by the questioned act or instrument.

To bolster its point, the SJS cited the Corpus Juris Secundum and submitted that the plaintiff in a declaratory judgment actiondoes not seek to enforce a claim against the defendant, but sought a judicial declaration of the rights of the parties for the purposeof guiding their future conduct, and the essential distinction between a declaratory judgment action and the usual action is that

no actual wrong need have been committed or loss have occurred in order to sustain the declaratory judgment action, althoughthere must be no uncertainty that the loss will occur or that the asserted rights will be invaded. (???)

During the Oral Argument, Velarde and co-respondents strongly asserted that they had not in any way engaged or intended toparticipate in partisan politics. Not even the alleged proximity of the elections to the time the Petition was filed below would haveprovided the certainty that it had a legal right that would be jeopardized or violated by any of those respondents.

Even if the SJS petition asserted a legal right, there was nevertheless no certainty that such right would be invaded by the saidrespondents.

3. NO. Legal standing orlocus standi has been defined as a personal and substantial interest in the case, such that theparty has sustained or will sustain direct injury as a result of the challenged act.

Interest means a material interest in issue that is affected by the questioned act or instrument, as distinguished from a mereincidental interest in the question involved.

SJS has no legal interest in the controversy and has failed to establish how the resolution of the proffered question would benefitor injure it.

Parties bringing suits challenging the constitutionality of a law, an act or a statute must demonstrate that they have been, or areabout to be, denied some right or privilege to which they are lawfully entitled, or that they are about to be subjected to some

burdens or penalties by reason of the statute or act complained of.

If the petition were to be valid, it should satisfy:

First, parties suing as taxpayers must specifically prove that they have sufficient interest in preventing the illegal expenditure ofmoney raised by taxation, particularly that of Congress' taxing power.Second, there was no showing in the Petition for Declaratory Relief that SJS as a political party or its members as registeredvoters would be adversely affected by the alleged acts of the respondents below, such as the deprivation of votes or barring ofsuffrage to its constituents.Finally, the allegedly keen interest of its "thousands of members who are citizens-taxpayers-registered voters" is too general and

beyond the contemplation of the standards set by our jurisprudence. Not only is the presumed interest impersonal in character; itis likewise too vague, highly speculative and uncertain to satisfy the requirement of standing.In not a few cases, the Court has liberalized the locus standi requirement when a petition raises an issue of transcendentalsignificance or importance to the people (IBP v Zamora). The Court deemed the constitutional issue raised to be bothtranscendental in importance and novel in nature. Nevertheless, the barren allegations in the SJS Petition as well as theabbreviated proceedings in the court would prevent the resolution of the transcendental issue.

Substantive Issues


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1. NO. The Constitution commands that no decision shall be rendered by any court without expressing therein clearlyand distinctly the facts and the law on which it is based. No petition for review or motion for reconsideration of a decision of thecourt shall be refused due course or denied without stating the basis therefor.

Consistent with this are Section 1 of Rule 36 of the Rules on Civil Procedure, Rule 120 of the Rules of Court on CriminalProcedure, Administrative Circular No. 1. which states that :

A judgment or final order determining the merits of the case shall be rendered. The decision shall be in writing, personally anddirectly prepared by the judge, stating clearly and distinctly the facts and law on which it is based, signed by the issuingmagistrate, and filed with the clerk of court.

The SC has reminded magistrates to heed the demand of Section `4, Art VIII of the contsitution. This was evinced in Yao v.Court of Appeals where Davide, CJ said that faithful adherence to the requirements of Section 14, Article VIII of theConstitution is indisputably a paramount component of due process and fair play.

InPeople v. Bugarin, the court held that the requirement that the decisions of courts must be in writing and that they must setforth clearly and distinctly the facts and the law on which they are based is intended, among other things, to inform the parties ofthe reason or reasons for the decision so that if any of them appeals, he can point out to the appellate court the finding of facts orthe rulings on points of law with which he disagrees.

The assailed Decision contains no statement of facts (much less an assessment or analysis thereof) or of the courts findings as to

the probable facts. The assailed Decision begins with a statement of the nature of the action and the question or issue presented.Then follows a brief explanation of the constitutional provisions involved, and what the Petition sought to achieve. Thereafter,the ensuing procedural incidents before the trial court are tracked. The Decision proceeds to a full-length opinion on the natureand the extent of the separation of church and state. Without expressly stating the final conclusion she has reached or specifyingthe relief granted or denied, the trial judge ends her Decision with the clause SO ORDERED.

A decision that does not clearly and distinctly state the facts and the law on which it is based leaves the parties in the dark as tohow it was reached and is precisely prejudicial to the losing party, who is unable to pinpoint the possible errors of the court forreview by a higher tribunal. More than that, the requirement is an assurance to the parties that, in reaching judgment, the judgedid so through the processes of legal reasoning.

It was truly obvious that the RTCs Decision did not adhere to the Bugarin precedent because of its failure to express clearly anddistinctly the facts on which it was based. The significance of factual findings lies in the value of the decision as a precedent(how will the ruling be applied in the future, if there is no point of factual comparison?).

Respondent SJS insisted that the dispositive portion can be found in the body (p. 10) of the assailed Decision. StatingEndorsement of specific candidates in an election to any public office is a clear violation of the separation clause.

The Court held that the statement is merely an answer to a hypothetical legal question and just a part of the opinion of the trialcourt. It does not conclusively declare the rights (or obligations) of the parties to the Petition. Neither does it grant any -- muchless, the proper -- relief under the circumstances, as required of a dispositive portion.

The standard for a dispositive was set in Manalang v. Tuason de Rickards where the resolution of the Court on a given issue asembodied in the dispositive part of the decision or order is the investitive or controlling factor that determines and settles therights of the parties and the questions presented therein, notwithstanding the existence of statements or declaration in the body ofsaid order that may be confusing.

InMagdalena Estate, Inc. v. Caluag: The rule is settled that where there is a conflict between the dispositive part and the

opinion, the former must prevail over the latter on the theory that the dispositive portion is the final order while the

opinion is merely a statement ordering nothing.

The statement quoted by SJS does not conclusively declare the rights (or obligations) of the parties to the Petition.

Neither does it grant proper relief under the circumstances, as required of a dispositive portion.

Failure to comply with the constitutional injunction is a grave abuse of discretion amounting to lack or excess of

jurisdiction. Decisions or orders issued in careless disregard of the constitutional mandate are a patent nullity and must

be struck down as void.

2. It is not legally possible to take up, on the merits, the paramount question involving a constitutional

principle. It is a time-honored rule that the constitutionality of a statute or act will be passed upon only if, and to the


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extent that, it is directly and necessarily involved in a justiciable controversy and is essential to the protection of the rights

of the parties concerned. (So no answer)

Almeda v. Bathala Mktng. Intdusies, Inc.The requisites of an action for declaratory relief, as follows: 1) the subject matter of the controversymust be a deed, will, contract or other written instrument, statute, executive order or regulation, orordinance; 2) the terms of said documents and the validity thereof are doubtful and require judicialconstruction; 3) there must have been no breach of the documents in question; 4) there must be anactual justiciable controversy or the "ripening seeds" of one between persons whose interests areadverse; 5) the issue must be ripe for judicial determination; and 6) adequate relief is not available

through other means or other forms of action or proceeding.

Facts: Bathala Marketing Industries Inc., as lesee, entered into a contract of lease with Ponciano L.Almeda, as lessor. The contract is for a term of four (4) years from May 1, 1997 unless soonerterminated.

Under Paragraph 6 of their contract, they have agreed that the rental fee shall be based on the presentrate of assessment on the property and may subsequently be increased or reduced depending on thenew assessed value of the property imposed by tax authorities. On the other hand, Paragraph 7 of theircontract provides that in case an extraordinary inflation or devaluation of Philippine Currency shouldsupervene, the value of Philippine peso at the time of the establishment of the obligation shall be thebasis of payment.

During the effectivity of the contract, Ponciano died. As a result, Bathala now dealt with petitionerEufemia, the wife of the late Ponciano and his father Almeda.

On the same year, Bathala received two letters from petitioner. The first one proposed the imposition ofVAT on the rental fee. It was opposed by Bathala based on its belief that the rental fee it was paying

already included VAT as their contract was executed when VAT law had long been in effect. The second

letter demanded for the increase of the rental fee by 73% based on the alleged extraordinary inflationwhich was opposed by Bathala which insisted that there was no extraordinary inflation to warrant theapplication of Article 1250. Despite all of these, Bathala continued paying the stipulated amount of rentalfee in the contract.

In due time however, it availed of its right to file an action for declaratory relief for purposes ofdetermining the correct interpretation of condition Nos. 6 and 7 of the lease contract to prevent damageand prejudice.

In turn, petitioner filed a complaint for ejectment, recission and damages but later on withdraw saidcomplaint and instead moved for the dismissal of the declaratory relief case for being an improper

remedy considering that respondent was already in breach of the obligation and that the case would notend the litigation and settle the rights of the parties.

The trial court favored Bathalas contentions. When the case was elevated to the CA, it affirmed thedecision of the trial court but with modification. The appellate court agreed with the conclusions of lawand the application of the decisional rules on the matter made by the RTC. However, it found that the

trial court exceeded its jurisdiction in granting affirmative relief to the respondent, particularly therestitution of its excess payment.

Issue:WON the action for declaratory relief was proper.


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Held:YES. Declaratory relief is defined as an action by any person interested in a deed, will, contract or

other written instrument, executive order or resolution, to determine any question of construction orvalidity arising from the instrument, executive order or regulation, or statute, and for a declaration of hisrights and duties thereunder. The only issue that may be raised in such a petition is the question ofconstruction or validity of provisions in an instrument or statute. Corollary is the general rule that such anaction must be justified, as no other adequate relief or remedy is available under the circumstances.

Decisional law enumerates the requisites of an action for declaratory relief, as follows: 1) the subjectmatter of the controversy must be a deed, will, contract or other written instrument, statute, executiveorder or regulation, or ordinance; 2) the terms of said documents and the validity thereof are doubtfuland require judicial construction; 3) there must have been no breach of the documents in question; 4)there must be an actual justiciable controversy or the "ripening seeds" of one between persons whoseinterests are adverse; 5) the issue must be ripe for judicial determination; and 6) adequate relief is not

available through other means or other forms of action or proceeding.

It is beyond cavil that the foregoing requisites are present in the instant case, except that petitionersinsist that respondent was already in breach of the contract when the petition was filed.

We do not agree.

After petitioners demanded payment of adjusted rentals and in the months that followed, respondentcomplied with the terms and conditions set forth in their contract of lease by paying the rentals stipulatedtherein. Respondent religiously fulfilled its obligations to petitioners even during the pendency of thepresent suit. There is no showing that respondent committed an act constituting a breach of the subjectcontract of lease. Thus, respondent is not barred from instituting before the trial court the petition for

declaratory relief.

Petitioners claim that the instant petition is not proper because a separate action for rescission, ejectmentand damages had been commenced before another court; thus, the construction of the subjectcontractual provisions should be ventilated in the same forum.

We are not convinced.

It is true that in Panganiban v. Pilipinas Shell Petroleum Corporation, we held that the petition fordeclaratory relief should be dismissed in view of the pendency of a separate action for unlawful detainer.However, we cannot apply the same ruling to the instant case. In Panganiban, the unlawful detainer casehad already been resolved by the trial court before the dismissal of the declaratory relief case; and it was

petitioner in that case who insisted that the action for declaratory relief be preferred over the action forunlawful detainer. Conversely, in the case at bench, the trial court had not yet resolved therescission/ejectment case during the pendency of the declaratory relief petition. In fact, the trial court,where the rescission case was on appeal, itself initiated the suspension of the proceedings pending theresolution of the action for declaratory relief.

We are not unmindful of the doctrine enunciated in Teodoro, Jr. v. Mirasol, where the declaratory relief

action was dismissed because the issue therein could be threshed out in the unlawful detainer suit. Yet,again, in that case, there was already a breach of contract at the time of the filing of the declaratoryrelief petition. This dissimilar factual milieu proscribes the Court from applying Teodoro to the instantcase.

Given all these attendant circumstances, the Court is disposed to entertain the instant declaratory reliefaction instead of dismissing it, notwithstanding the pendency of the ejectment/rescission case before thetrial court. The resolution of the present petition would write finis to the parties' dispute, as it would


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settle once and for all the question of the proper interpretation of the two contractual stipulations subject

of this controversy.

Kawasaki Port vs. AmoresIf the action is in personam, this mode of service will not be available. There is no extraterritorial serviceof summons in an action in personam. Hence, extraterritorial service upon a nonresident in an action for

injunction which is in personam is not proper (Kawasaki Port Service Corp. vs. Amores, 199 SCRA 230;Banco Do Brasil vs. CA, 333 SCRA 545).

TAMBUNTING vs. SUMABATWhere the law or contract has already been contravened prior to the filing of an action for declaratory

relief, the court can no longer assume jurisdiction over the action.

Facts:Spouses Sumabat and Baello were the registered land owners of a parcel of land in Caloocan. InMay 1973, and in order to obtain a P7,727.95 loan from petitioner Tambunting, the spouses mortgagedsaid land to the former.

Subsequently, Tambunting assigned his rights to the mortgaged to Commercial House Finance (CHFI).

And because respondent spouses have not been paying their monthly amortizations, they were informedthat their indebtedness has ballooned to P15k.

And so, CHFI and Tambunting filed a case for foreclosure but was restrained by Branch 33 of the RTC ofCaloocan. The reason for the restraint was because the respondents were able to file an action for

declaratory relief with said RTC. In their action, respondents were praying that the court rule on theextent or amount of their actual indebtedness.

In said RTC case, which was filed March 1979, herein petitioners were declared in default. Thus, evenwhen the Tambunting, et al moved for the dismissal of the case on the ground that mortgageddeed/contract had already been breached prior to the action, said motion was denied for having been

filed out of time.

On Jan. 1981, the RTC rendered a decision finding that respondents liability, by virtue of their mortgagedeed/contract, was P15,743.83. Pursuant to this decision, the respondents made a consignation with theRTC in said amount.

After almost 14 years, or on Feb 1995, CHFI again foreclosed on the contested land. The respondentscame to know of this because they received a notice of foreclosure sale, to be conducted by the sheriff,of the land in question.

This time, the petitioners filed an action with Branch 120 of the RTC of Caloocan for injunction againstthe foreclosure sale. But, the sale still pushed thru, with CHFI being declared the highest bidder. A new

TCT was then issued to CHFI .

Thus, respondent spouses amended their complaint to an action for nullification of theforeclosure/sheriffs sale, the new TCT of CHFI, as well as reconveyance.

On Feb 2000, Branch 120 of the RTC declared the foreclosure sale as void. It likewise ruled thatreconveyance of the property should be made to the respondents. This decision was grounded on thefact that consignation of P15k has already been made by CHFI pursuant to the earlier decision of theBranch 33 of the RTC


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After a denial of petitioners MR, they filed petition for review on certiorariwith the SC. The petitioners

argued that RTC, Branch 33, erred when it ordered the consignation of P15k. As earlier pointed out, theaction in first case was for declaratory relief. But petitioner points out the fact that respondents are notentitled anymore to file an action for declaratory relief because there had already been a violation of themortgaged contract when the spouses defaulted on their amortizations. Furthermore the action forforeclosure by CHFI on 1995 has already prescribed

Issues: Was the decision of Branch 120 of the RTC wrong when it ordered the nullification of theforeclosure sale on the ground that consignation has already been made in a previous case?

Was the foreclosure action in 1995 and subsequent sale of the property already barred by prescription?

Thus, should the action for nullification and reconveyance filed by the respondents be dismissed?

Held:The trial court erred when it affirmed the validity of the consignation. The RTC should have beenbarred from taking cognizance of the action for declaratory relief since petitioners, being already indefault in their loan amortizations, there existed a violation of the mortgage deed even before theinstitution of the action. Hence, the CFI could not have rendered a valid judgment in Civil Case No. C-7496, and the consignation made pursuant to a void judgment was likewise void.

An action for declaratory relief should be filed by a person interested under a deed, will, contract orother written instrument, and whose rights are affected by a statute, executive order, regulation orordinance beforebreach or violation thereof. The purpose of the action is to secure an authoritativestatement of the rights and obligations of the parties under a statute, deed, contract, etc. for theirguidance in its enforcement or compliance and not to settle issues arising from its alleged breach. It may

be entertained only before the breach or violation of the statute, deed, contract, etc. to which itrefers. Where the law or contract has already been contravened prior to the filing of an action fordeclaratory relief, the court can no longer assume jurisdiction over the action.

Nonetheless, the petition must fail.

Article 1142 of the Civil Code is clear. A mortgage action prescribes after ten years.

Here, petitioners right of action accrued in May 1977 when respondents defaulted in their obligation to

pay their loan amortizations. It was from that time that the ten-year period to enforce the right under the

mortgage started to run. The period was interrupted when respondents filed Civil Case No. C-6329

sometime after May 1977 and the CFI restrained the intended foreclosure of the property. However, the

period commenced to run again on November 9, 1977 when the case was dismissed.

HON. EXECUTIVE SECRETARY vs. SOUTHWING HEAVY INDUSTRIES, INC.

CASE This instant consolidated petitions seek to annul the decisions of the Regional Trial Court which

declared Article 2, Section 3.1 of Executive Order 156 unconstitutional. Said EO 156 prohibits the

importation of used vehicles in the country inclusive of the Subic Bay Freeport Zone.


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FACTS

On December 12, 2002, President Gloria Macapagal Arroyo issued Executive Order 156 entitled

"Providing for a comprehensive industrial policy and directions for the motor vehicle development

program and its implementing guidelines." The said provision prohibits the importation of all types of

used motor vehicles in the country including the Subic Bay Freeport, or the Freeport Zone, subject to a

few exceptions.

Consequently, three separate actions for declaratory relief were filed by Southwing Heavy

Industries Inc, Subic Integrated Macro Ventures Corp, and Motor Vehicle Importers Association of Subic

Bay Freeport Inc. praying that judgment be rendered declaring Article 2, Section3.1 of the EO 156

unconstitutional and illegal.

The RTC rendered a summary judgment declaring that Article 2, Section 3.1 of EO 156

constitutes an unlawful usurpation of legislative power vested by the Constitution with Congress and that

the proviso is contrary to the mandate of Republic Act 7227(RA 7227) or the Bases Conversion and

Development Act of 1992 which allows the free flow of goods and capital within the Freeport.

The petitioner appealed in the CA but was denied on the ground of lack of any statutory basis for

the President to issue the same. It held that the prohibition on the importation of use motor vehicles is

an exercise of police power vested on the legislature and absent any enabling law, the exercise thereof

by the President through an executive issuance is void.

ISSUE

Whether or not Article2, Section 3.1 of EO 156 is a valid exercise of the Presidents quasi-legislative

power. YES.

SC RULING

Police power is inherent in a government to enact laws, within constitutional limits, to promote

the order, safety, health, morals, and general welfare of society. It is lodged primarily with the

legislature. By virtue of a valid delegation of legislative power, it may also be exercised by the President

and administrative boards, as well as the lawmaking bodies on all municipal levels, including the

barangay. Such delegation confers upon the President quasi-legislative power which may be defined as

the authority delegated by the law-making body to the administrative body to adopt rules and regulations

intended to carry out the provisions of the law and implement legislative policy provided that it must

comply with the following requisites:

(1) Its promulgation must be authorized by the legislature;

(2) It must be promulgated in accordance with the prescribed procedure;


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(3) It must be within the scope of the authority given by the legislature; and

(4) It must be reasonable.

The first requisite was actually satisfied since EO 156 has both constitutional and statutory bases.

Anent the second requisite, that the order must be issued or promulgated in accordance with theprescribed procedure, the presumption is that the said executive issuance duly complied with the

procedures and limitations imposed by law since the respondents never questioned the procedure that

paved way for the issuance of EO 156 but instead, what they challenged was the absence of substantive

due process in the issuance of the EO.

In the third requisite, the Court held that the importation ban runs afoul with the third requisite

as administrative issuances must not be ultra vires or beyond the limits of the authority conferred. In the

instant case, the subject matter of the laws authorizing the President to regulate or forbid importation of

used motor vehicles, is the domestic industry. EO 156, however, exceeded the scope of its application by

extending the prohibition on the importation of used cars to the Freeport, which RA 7227, considers to

some extent, a foreign territory. The domestic industry which the EO seeks to protect is actually the

"customs territory" which is defined under the Rules and Regulations Implementing RA 7227 which

states: "the portion of the Philippines outside the Subic Bay Freeport where the Tariff and Customs Code

of the Philippines and other national tariff and customs laws are in force and effect."

Regarding the fourth requisite, the Court finds that the issuance of EO is unreasonable. Since the

nature of EO 156 is to protect the domestic industry from the deterioration of the local motor

manufacturing firms, the Court however, finds no logic in all the encompassing application of the assailed

provision to the Freeport Zone which is outside the customs territory of the Philippines. As long as theused motor vehicles do not enter the customs territory, the injury or harm sought to be prevented or

remedied will not arise.

The Court finds that Article 2, Section 3.1 of EO 156 is VOID insofar as it is made applicable

within the secured fenced-in former Subic Naval Base area but is declared VALID insofar as it applies to

the customs territory or the Philippine territory outside the presently secured fenced-in former Subic

Naval Base area as stated in Section 1.1 of EO 97-A (an EO executed by Pres. Fidel V. Ramos in 1993

providing the Tax and Duty Free Privilege within the Subic Freeport Zone). Hence, used motor vehicles

that come into the Philippine territory via the secured fenced-in former Subic Naval Base area may be

stored, used or traded therein, or exported out of the Philippine territory, but they cannot be importedinto the Philippine territory outside of the secured fenced-in former Subic Naval Base area.

Petitions are PARTIALLY GRANTED provided that said provision is declared VALID insofar as it applies to

the Philippine territory outside the presently fenced-in former Subic Naval Base area and VOID with

respect to its application to the secured fenced-in former Subic Naval Base area.


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Velasco vs. Villegas

Facts: Petitioners herein are members of the Sta. Cruz Barbershop Association. This is an appeal from the lower court's(LC)order dismissing their suit for declatory relief. They are challenging the constitutionality of Ord. No. 4964. They contend that itamounts to deprivation of properties and their means of livelihood without due process of law.

The assailed ordinance is worded thus: "It shall be prohibited for any operator of any barber shop to conduct the business ofmassaging customers or other persons in any adjacent room or rooms of said barber shop, or in any room or rooms within the

same building where the barber shop is located as long as the operator of the barber shop and the room where massaging isconducted is the same person."

Respondent in its reply, said that the Ordinance No. 4964 is constitutional and such is just an exercise of the state's inherentpower (police power).

Issue: Whether or not the assailed Ordinance violated the petitioner's right to property and their means of livelihood.

Held: Ordinance is Constitutional. Petition is dismissed, LC decision affirmed.

Enactment of such (Ordinance) is a valid exercise of Police Power.

The objectives of the Ordinance are:

(1) To impose payment of license fees for engaging in the business of massage clinics, and;

(2) To forestall possible immorality which might grow from the construction of a separate room for massaging customers.

This Court has been most liberal in sustaining ordinances based on the general welfare clause. And for that reason, thepetitioners rights were not violated and they are not deprived of the due process of law.

New Frontier Sugar Corporation v. Regional Trial Court, Branch 39, I loi lo City the Court enumerated the basic procedure in corporate rehabilitation cases. The Court held:

As provided in the Interim Rules, the basic procedure is as follows:

1. The petition is filed with the appropriate Regional Trial Court;

2. If the petition is found to be sufficient in form and substance, the trial court shall issue a Stay Order,

which shall provide, among others, for the appointment of a Rehabilitation Receiver; the fixing of the

initial hearing on the petition; a directive to the petitioner to publish the Order in a newspaper of general

circulation in the Philippines once a week for two (2) consecutive weeks; and a directive to all creditors

and all interested parties (including the Securities and Exchange Commission) to file and serve on the

debtor a verified comment on or opposition to the petition, with supporting affidavits and documents[;]

3. Publication of the Stay Order;

4. Initial hearing on any matter relating to the petition or on any comment and/or oppositionfiled in connection therewith. If the trial court is satisfied that there is merit in the petition, it shall givedue course to the petition;

5. Referral for evaluation of the rehabilitation plan to the rehabilitation receiver who shall submithis recommendations to the court;6. Modifications or revisions of the rehabilitation plan as necessary;7. Submission of final rehabilitation plan to the trial court for approval;


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8. Approval/disapproval of rehabilitation plan by the trial court[.]

BUGARINV. PALISOCG.R. NO. 157985, DECEMBER 2 2005

FACTS: A complaint for ejectment was filed before the MeTC by Palisoc et al. (Palisoc)

against Bugarin et al. (Bugarin). The MeTC declared Palisoc as the rightful possessors andordered Bugarin to vacate the premises and pay Palisoc et al. the rentals.

Bugarin appealed to the RTC while Palisocmoved for execution pending appeal. The RTCdenied the appeal and affirmed the MeTC decision. Bugarin filed a MR with Oppositionto the Issuance of a Writ of Execution. The RTC denied the MR and granted Palisocsmotion for execution for failure of Bugarin to post a supersedeas bond or to pay the backrentals. This decision was received by Bugarin on March 12, 2003. A writ of executionpending appeal was issued.

Bugarin filed a Motion to Defer Implementation of the Writ of Execution. Palisoc filed aMotion to Issue a Special Order of Demolition since Bugarin refused to vacate the premises.

The RTC deferred action on the motions to allow Bugarin to exhaust legal remedies available

to them. Bugarin filed a Supplement to the Motion to Defer Implementation of Writ ofExecution and Opposition to Motion to Issue Special Order of Demolition, contending thatSection 28 of RA 72791was not complied with.

Palisoc filed a Motion Reiterating the Motion for Issuance of Special Order of Demolition. TheRTC declared the decision denying Bugarins appeal final and executory, andremanded the records of the case to the MeTC without acting on the motions. Bugarin fileda Petition for Certiorari and Prohibition before the CA on April 10, 2003. Bugarincontended that the RTC committed grave abuse of discretion in affirming the MeTC decisionand insisted that the MeTC had no jurisdiction over the complaint.

The MeTC eventually issued the Special Order of Demolition.

ISSUE:Whether or not the MeTC properly ordered the demolition.

Bugarins position:(1) The MeTCs orders violated the mandatory requirements of RA 7279 since there was no30-day notice prior to the date of eviction or demolition and there had been no consultationon the matter of resettlement.(2) There was neither relocation nor financial assistance given.(3) The orders are patently unreasonable, impossible and in violation of the law.

Palisocs position:(1) RA 7279 is not applicable. There was no proof that Bugarin et al. are registered aseligible socialized housing program beneficiaries.(2) Even if RA 7279 was applicable, the required notices under the law had already been

complied with. Bugarin were already notified on March 7, 2003 of an impending demolition,when the writ of execution was served.

HELD: YES, the MeTC orders were properly issued.

A judgment in an ejectment case is immediately executory to avoid further injustice to alawful possessor, and the courts duty to order the execution is practically ministerial. The

1 An Act to Provide for a Comprehensive and Continuing Urban Development and Housing Program,

Establish the Mechanism for its Implementation, and for other purposes.


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defendant (Bugarin) may stay it only by: (1) perfecting an appeal; (2) filing a supersedeasbond; and (3) making a periodic deposit of the rental or reasonable compensation for theuse and occupancy of the property during the pendency of the appeal.

Once the RTC decides on the appeal, such decision is immediately executory, withoutprejudice to an appeal, via a petition for review, before the Court of Appeals or Supreme

Court.

However, Bugarin failed to file a petition for review . Bugarin received on March 12,2003 the RTC decision denying their MR. They had until March 27, 2003 to file a petition forreview before the CA. Instead, they filed a petition for certiorari and prohibition onApril 10, 2003.

DOCTRINE! The remedy to obtain reversal or modification of the judgment on the merits inthe instant case is appeal. This holds true even if the error ascribed to the court renderingthe judgment is: (1) its lack of jurisdiction over the subject matter; (2) the exercise of powerin excess thereof; (3) or GADLEJ. The existence and availability of the right of appealprohibits the resort to certiorari because one of the requirements for the certiorari is thatthere should be no appeal.

Bugarins petition for certiorari before the CA was filed as a substitute for the lost remedy ofappeal. Certiorari is not and cannot be made a substitute for an appeal where thelatter remedy is available but was lost through fault or negligence. Thus, the filingof the petition for certiorari did not prevent the RTC decision from becoming final andexecutory.

The RTC acted correctly when it remanded the case to the MeTC. The MeTC cannot befaulted for issuing the order to enforce the RTC judgment. The orders also did not violate RA7279. Under the said law, eviction or demolition may be allowed when there is a court orderfor eviction and demolition, as in the case at bar. Moreover, nothing is shown on record thatBugarin et al. are underprivileged and homeless citizens as defined in RA 7279. Theprocedure for the execution of the eviction or demolition order under RA 7279 is notapplicable.

Lastly, the order of demolition had already been executed. Bugarin had already vacated thearea and Palisoc now possess the properties free from all occupants, as evidenced by thesheriffs turn-over of possession. Thus, the instant case before us has indeed become mootand academic.

LALICAN vs. VERGARA

Facts: On July 23, 1991, an information for violation of Section 68 of P.D. No. 705, was filed by the City

Prosecutor of Puerto Princesa City against petitioner Lalican and others. The information alleged that

petitioner, without lawful authority or permit, willfully, unlawfully and feloniously have in their

possession, custody and control 1,800 board feet of assorted species and dimensions of lumber on

board two (2) passenger jeeps.

On August 23, 1991, petitioner Lalican filed a motion to quash the information on the ground that the

facts charged did not constitute an offense. Contending that Sec. 68 of P.D. No. 705 refers to "timber

and other forest products" and not to "lumber," and asserting that "timber" becomes "lumber" only

after it is sawed into beams, planks or boards, petitioner alleged that said decree "does not apply to

'lumber.'" He added that the law is "vague and standardless" as it does not specify the authority or

the legal documents required by existing forest laws and regulations. Hence, petitioner asserted that

the information should be quashed as it violated his constitutional rights to due process and equal

protection of the law


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Issue: Whether or not Sec. 68 of P.D. No. 705 includes "lumber" in the phrase "timber or other forest

products." YES

Held: Sec. 68 of P.D. No. 705 provides: Cutting, Gathering and/or collecting Timber, or Other Forest

Products Without License.- Any person who shall cut, gather, collect, remove timber or other forest

products from any forest land, or timber from alienable or disposable public land, or from private land,without any authority, or possess timber or other forest products without the legal documents as

required under existing forest laws and regulations, shall be punished with the penalties imposed

under Articles 309 and 310 of the Revised Penal Code: Provided, That in the case of partnerships,

associations, or corporations, the officers who ordered the cutting, gathering, collection or possession

shall be liable, and if such officers are aliens, they shall, in addition to the penalty, be deported without

further proceedings on the part of the Commission on Immigration and Deportation.

The Court shall further order the confiscation in favor of the government of the timber or any forest

products cut, gathered, collected, removed, or possessed, as well as the machinery, equipment,

implements and tools illegally used in the area where the timber or forest products are found."

Punished then in this section are: (a) the cutting, gathering, collection, or removal of timber or other

forest products from the places therein mentioned without any authority; or (b) possession of timber orother forest products without the legal documents as required under existing forest laws and

regulations. In the recent case of Mustang Lumber, Inc. v. Court of Appeals, the SC held: "The Revised

Forestry Code contains no definition of either timber or lumber. While the former is included in forest

products as defined in paragraph (q) of Section 3, the latter is found in paragraph (aa) of the same

section in the definition of 'Processing plant.'This simply means that lumber is a processed log or

processed forest raw material. Clearly, the Code uses the term lumber in its ordinary or common

usage.

To exclude possession of "lumber" from the acts penalized in Sec. 68 would certainly emasculate the

law itself. A law should not be so construed as to allow the doing of an act which is prohibited by law,

nor so interpreted as to afford an opportunity to defeat compliance with its terms, create an

inconsistency, or contravene the plain words of the law. After all, the phrase "forest products" is broad

enough to encompass lumber which, to reiterate, is manufactured timber.

If in seeking to abate the proceedings the accused also seek to imply that lumber seized in their

possession were procured from lawful source, all they have to do is produce the legal documents

contemplated by the law. It is not the mere cutting or possession of timber, forest products or

whatever that is prohibited and penalized by the law. What is prohibited and penalized is the act of

cutting or possessing of timber, wood, or other forest products without lawful authority."

Spouses Nische vs. Equitable

Facts:

Spouses Ramon and Natividad Nisce contracted loans evidenced by promissory notes withherein respondent Equitable PCI Bank, Inc. These loans, amounting to P34,087,725.76, as wellas the surety agreement executed by Natividad, are secured by real estate mortgages over twoparcels of land owned by said spouses. Having defaulted, respondent as creditor-mortgagee fileda petition for extrajudicial foreclosure. It must be noted that during these transactions, Equitableand PCI Bank, Inc. Paseo de Roxas merged into what is now Equitable PCI Bank, Inc.


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Thereafter, spouses Nisce filed before the RTC of Makati City a complaint for nullity of theSuretyship Agreement, damages and legal compensation with prayer for injunctive reliefagainst the Bank and theEx-Officio Sheriff. They alleged, among others, that: 1) the bankshould have compensated their debt with their dollar account which they maintain with PCICapital Asia Ltd. (Hong Kong), a subsidiary of Equitable; 2) the surety agreement is void for

want of the consent of Ramon, who happens to be the administrator of the conjugal partnership;3) they had made a partial payment of P4.6M on their loan account which petitioner failed tocredit in their favor.

The Bank, for its part, contends that although the spouses debt was restructured, theynevertheless failed to pay. Moreover, it alleged that there cannot be legal compensation becausePCI Capital had a separate and distinct personality from the PCIB, and a claim against the formercannot be made against the latter.

Equitable posited that Natividads deposit of $20,000 with PCIB Paseo de Roxas was transferredto PCI Capital via cable order and that it informed Natividad that it had acted merely as a conduit

in facilitating the transfer of the funds, and that her deposit was made with PCI Capital and notwith PCIB.

The RTC issued an injunctive writ holding that it would be best to maintain the status quo whileit resolves the issue on legal compensation. The Bank, on the other hand, filed a petition forcertiorari right away, and dispensed with the filing of a motion for reconsideration (MR) with theCA. The CA sustained the respondent and held that spouses Nisce failed to prove that they willsuffer irreparable injury. In fact, given their admission that they have not settled theirobligations, the Bank had a clear right to the remedy of foreclosure. The CA likewise held therecannot be legal compensation because the parties are not mutual creditors and debtors of eachother since Equitable and PCI Capital are separate and distinct entities, although the latter is a

subsidiary of the former. Lastly, the court noted that there is no need for an MR if only questionsof law are involved.

Issue: Whether or not the CA erred in granting the petition for certiorari.

Held: The Court held that the petitioners are not entitled to a writ of preliminary injunctionbecause they failed to discharge their burden of proving their legal right thereto, on the followinggrounds:

NB: As regards the procedural question, the Court held that an MR is not necessary where onlyquestions of law are involved (Discussion on procedural issues omitted)

1. As creditor-mortgagee, the Bank has the right under the real estate mortgage contract

and the amendment thereto to foreclose extrajudicially, the real estate mortgage and sell

the property at public auction, considering that petitioners had failed to pay their loans,

plus interests and other incremental amounts as provided for in the deeds.

2. The petitioner failed to establish that the respondent Bank is its debtor. Thus, there

cannot be legal compensation.


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Under Article 1278 of the New Civil Code, compensation shall take place when two persons, intheir own right, are creditors and debtors of each other. In order that compensation may beproper, petitioners were burdened to establish the following:1) That each one of the obligors bebound principally, and that he be at the same time a principal creditor of the other; 2) That bothdebts consist in a sum of money, or if the things due are consumable, they be of the same kind,

and also of the same quality if the latter has been stated;3) That the two debts be due; 4) Thatthey be liquidated and demandable; 5) That over neither of them there be any retention orcontroversy, commenced by third persons and communicated in due time to the debtor.Petitioner failed to prove these requisites.

Compensation, be it legal or conventional, requires confluence in the parties of the

characters of mutual debtors and creditors, although their rights as such creditors or their

obligations as such debtors need not spring from one and the same contract or

transaction.

Article 1980 of the New Civil Code provides that fixed, savings and current deposits of money in

banks and similar institutions shall be governed by the provisions concerning simple loans.Under Article 1953, of the same Code, a person who secures a loan of money or any otherfungible thing acquires the ownership thereof, and is bound to pay the creditor an equal amountof the same kind and quality. The relationship of the depositors and the Bank or similarinstitution is that of creditor-debtor. Such deposit may be setoff against the obligation of thedepositor with the bank or similar institution.

Although the relationship of the depositors and the Bank or similar institution is that of creditor-debtor, petitioner must show that it is in respondent Bank where made such deposit. This,petitioner failed to do.

Admittedly, PCI Capital is a subsidiary of respondent Bank. Even then, PCI Capital [PCIExpressPadala (HK) Ltd.] has an independent and separate juridical personality from that

of the respondent Bank, its parent company; hence, any claim against the subsidiary is not

a claim against the parent company and vice versa. The evidence on record shows that PCIB,which had been merged with Equitable Bank, owns almost all of the stocks of PCI Capital.However, the fact that a corporation owns all of the stocks of another corporation, taken alone, isnot sufficient to justify their being treated as one entity. If used to perform legitimatefunctions, a subsidiarys separate existence shall be respected, and the liability of the

parent corporation, as well as the subsidiary shall be confined to those arising in their

respective business. A corporation has a separate personality distinct from its stockholdersand from other corporations to which it may be conducted. This separate and distinctpersonality of a corporation is a fiction created by law for convenience and to prevent injustice.

Longino vs. GeneralOverview: COSLAP rendered a decision and issued a writ of execution in favor of Serrano and against Longino. TheCA affirmed this decision. However, on a petition for prohibition against COSLAP, the SC ruled that the CA erred inaffirming COSLAPs decision and that the remedy chosen by Longino was proper. Since the COSLAP was without

jurisdiction to render such decision, it was null and void and never final and executor and that the principal purposefor the writ of prohibition is to prevent an encroachment, excess, usurpation or assumption of jurisdiction on the partof an inferior court or quasi-judicial tribunal.

Statement of the Case


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Petition for review on certiorari for the reveral of the decision of the CA

Statement of FactsPhilippine National Railways (PNR) executed a contract of lease in favor of Julian Estrella over its property.

Estrella filed an application with the PNR for a lease of an additional area but the latter did not act on the saidapplication. Sometime after, Estrella and Serrano entered into a verbal contract of lease in which one of theapartments to be constructed would be leased to Serrano. However, Estrella failed to construct the apartments.

Hence, Serrano was compelled to construct, at her expense, a commercial apartment on a portion of the propertyleased by Estrella. She also built a second commercial apartment.Upon expiration of the lease of Estrella, PNR officials told Serrano that Estrella had no right to lease a

portion of the property to third persons. Serrano filed a complaint for damages against Estrella and was able topresent her evidence ex parte. PNR and Serrano then entered into a lease contract over that portion of the lot.

TC rendered judgment in favor Serrano and against Estrella. The decision became final and executor, andthe sheriff sold the house owned by Estrella at public auction to Serrano. Estrella vacated the house and it wasturned over to Serrano.

Serrano and Esperanza Longino, a PNR retiree, executed an agreement, in which Serrano allowed her tooccupy a portion of the property. Longino also filed an application with the PNR for a lease of the property. WhenSerrano learned of the application, she wrote PNR, citing the RTC decision and informed them on her purchase ofEstrellas house. PNR recommended the approval of Serranos application and the denial of Longinos.

PNR and Longino executed a lease contract near the house of Serrano, formerly owned by Estrella. Serranofiled a handwritten complaint with the Commission on Settlement of Land Problems (COSLAP) demanding that PNRlease the property to her. COSLAP issued a status quo order then assumed jurisdiction over the case. COSLAP

rendered a resolution in favor of Serrano and against Longino. COSLAP issued a writ of execution when Longinofailed to appeal the decision.

Longino filed a petition for prohibition against COSLAP with the CA, but the latter dismissed the petition.Hence, Longino filed this petition with the SC.

Applicable Laws:Sec 2, Rule 65

Issues:WON petition for prohibition under Rule 65 was the proper remedy? Yes.

RationaleThe principal purpose for the writ of prohibition is to prevent an encroachment, excess, usurpation or

assumption of jurisdiction on the part of an inferior court or quasi-judicial tribunal. It is granted when it is necessary forthe orderly administration of justice, or prevent the use of the strong arm of the law in an oppressive or vindictive

manner, or multiplicity of actions. The writs of certiorari and prohibition, for that matter, are intended to annul or voidproceedings in order to insure the fair and orderly administration of justice.

Requisites:(1) it must be directed against a tribunal, corporation, board or person exercising functions, judicial or ministerial;(2) the tribunal, corporation, board or person has acted without or in excess of its jurisdiction, or with grave abuse ofdiscretion;(3) there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law

Grave abuse of discretion: it must be demonstrated that the lower court or tribunal has exercised its power in anarbitrary and despotic manner, by reason of passion or personal hostility, and it must be patent and gross as wouldamount to an evasion or to a unilateral refusal to perform the duty enjoined or to act in contemplation of law

Excess of jurisdiction: the court, board or office has jurisdiction over the case but has transcended the same or actedwithout authority. The writ of prohibition will not lie to enjoin acts already done.

Plain, speedy and adequate remedy: if it will promptly relieve the petitioner from the injurious effects of the judgmentor rule, order or resolution of the lower court or agency

In a case where a lower court or quasi-judicial body commits an error in the excess of its jurisdiction, if sucherror is one of judgment, it is revocable only by appeal. On the other hand, if the act complained of was issued bysuch court or body with grave abuse of discretion, which is tantamount to lack or in excess of jurisdiction, the remedyof the aggrieved party is to file a petition for certiorari and/or prohibition under Rule 65 of the Rules of Court. Indeed,a decision of a court without jurisdiction is null and void. It could never become final and executory; hence, appealtherefrom by writ of error is out of the question.


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The CA erred in ruling that the COSLAP had jurisdiction on the complaint of Serrano and that the latter wasthe legal possessor and had preferential right to lease the property. Consequently, the Resolution of the COSLAP aswell as the writ issued by it are null and void. The COSLAP had no jurisdiction over the complaint of Serrano. Thenature of the action, as well as which court or body has jurisdiction over it, is determined based on the allegations inthe complaint irrespective of whether or not the plaintiff is entitled to the relief prayed for. Jurisdiction over the actiondoes not depend on the defenses set forth in the answer, or in a motion to dismiss of the defendant. Even if a tribunal

or a quasi-judicial body of the government has jurisdiction over an action but exceeds its authority in the course of theproceedings, such act is null and void.Administrative agencies are tribunals of limited jurisdiction and, as such, could wield only such as are

specifically granted to them by the enabling statutes. In relation thereto is the doctrine of primary jurisdiction involvingmatters that demand the special competence of administrative agencies even if the question involved is also judicialin nature. Courts cannot and will not resolve a controversy involving a question within which the jurisdiction of anadministrative tribunal, especially when the question demands the sound exercise of administrative discretionrequiring special knowledge, experience and services of the administrative tribunal to determine technical andintricate matters of fact. The court cannot arrogate into itself the authority to resolve a controversy, the jurisdiction ofwhich is initially lodged with the administrative body of special competence. But disputes requiring no special skill ortechnical expertise of an administrative body and which could be resolved by applying pertinent provisions of the CivilCode are within the exclusive juri

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