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FIRST DIVISION

[G.R. No. 145838. July 20, 2001]

NICASIO I. ALCANTARA, petitioner, vs. COMMISSION ON THESETTLEMENT OF LAND PROBLEMS, SECRETARY OFDEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCESANTONIO CERILLES, THE DEPARTMENT OF ENVIRONMENTAND NATURAL RESOURCES, ROLANDO PAGLANGAN, ET AL.,respondents.

HEIRS OF DATU ABDUL S. PENDATUN, REP. BY DATU

NASSER B. PENDATUN, AL HAJ., HEIRS OF SABAL MULA,

and GAWAN CLAN, REP. BY TRIBAL CHIEFTAIN LORETOGAWAN, intervenors .

D E C I S I O N

KAPUNAN, J.:

This is a petition for review on certiorari assailing the Decision of theCourt of Appeals dated June 22, 2000 in CA-G.R. SP No. 53159i[1] andits Resolution dated October 16, 2000 denying petitioner’s motion for reconsideration.

The facts of the case are as follows:

Sometime in 1993, petitioner Nicasio Alcantara was granted Forest LandGrazing Lease Agreement No. 542 (FLGLA No. 542) by theDepartment of Environment and Natural Resources (DENR). Under saidFLGLA, Alcantara was allowed to lease Nine Hundred Twenty-Three

(923) hectares of public forest land at Sitio Lanton, Barrio Apopong,General Santos City for grazing purposes for a period of twenty-five

(25) years to expire on 31 December 2018.

As early as 1990, however, private respondent Rolando Paglangantogether with Esmael Sabel and Lasid Acop filed a letter-complaint with

the Commission on Settlement of Land Problems (COSLAP) seekingthe cancellation of FLGLA No. 542 and the reversion of the entire 923hectares to the B’laan and Maguindanaoan tribes. The case was

docketed as COSLAP Case No. 98-052.

Petitioner filed his Answer questioning the jurisdiction of the COSLAP

over the case, since the dispute involved a claim for recovery of ancestralland. Petitioner claimed that the case should have been filed with theDENR since it is the latter which has jurisdiction to administer anddispose of public lands, including grazing lands.

Notwithstanding petitioner’s objection to the COSLAP’s exercise of jurisdiction over the case, said body continued the hearings thereon.

Petitioner alleged that COSLAP did not conduct formal hearings on thecase, and that he was not notified nor given the opportunity to be presentand participate in the field interviews and ocular inspections conducted

by COSLAP.ii[2]

On August 3, 1998, the COSLAP issued a Decision ordering thecancellation of FLGLA No. 542. Petitioner appealed the same to the

Court of Appeals by petition for review on certiorari.

The Court of Appeals dismissed the petition in its Decision dated June22, 2000, and also denied petitioners motion for reconsideration in a

Resolution dated October 16, 2000.iii[3]

Hence, the present petition.

Petitioner contends that the Court of Appeals erred in ruling that he hadearlier recognized the jurisdiction of the COSLAP over the case. Hestated further that the appellate court should have considered that theCOSLAP does not possess the historical, genealogical andanthropological expertise to act on ancestral land claims, and that it isthe National Commission on Indigenous Peoples (NCIP), under the

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Indigenous People’s Rights Act of 1997iv[4] which has jurisdiction over such claims. Petitioner thus submits that the COSLAP’s decision

ordering the cancellation of FLGLA No. 542 and declaring the area being claimed by private respondent as ancestral land is void for having been issued by a body which does not have jurisdiction over said

matters.v[5]

In his Comment, private respondent Rolando Paglangan argued that the

petition should be dismissed since the petition for certiorari filed by petitioner in the Court of Appeals was filed out of time.vi[6] He alsocontended that the COSLAP has the power to entertain cases involvingindigenous cultural communities when the DENR or the NCIP fails or refuses to act on a complaint or grievance brought before them.vii[7] Healleged that the dispute between petitioner and the B’laan tribe antedatedthe creation of the NCIP, hence, filing of the petition for cancellation of the FLGLA with the COSLAP.viii[8]

On April 6, 2001, a Motion for Leave to Intervene and to File

Complaint-in-Intervention was filed with this Court by the Heirs of DatuAbdul S. Pendatun, represented by Datu Nasser B. Pendatun, Al Haj; theHeirs of Sabal Mula, represented by Hadji Latip K. Mula; and the GawanClan, represented by their Tribal Chieftain Loreto Gawan.

Subsequently, on May 24, 2001, they filed an Amended Motion for Leave to Intervene and to File Amended Complaint-in-Intervention. Intheir Amended Complaint-in-Intervention, they allege that the parcels of

land in dispute form part of their ancestral lands, and that they have beenin open, continuous, exclusive and notorious possession under claim of ownership of the same. They stated further that private respondentRolando Paglangan acts only as agent of the Mula clan, and not of theother intervenors.ix[9]

The Court finds no reason to disturb the ruling of the Court of Appeals.

The Court of Appeals did not commit any reversible error in the assailed

decision. The Court agrees with the appellate court that petitioner is

estopped from questioning the jurisdiction of the COSLAP since he participated actively in the proceedings before said body by filing an

Answer, a Motion for Reconsideration of the COSLAP’s decision and aSupplement to Respondent’s Motion for Reconsideration. The Courtalso notes the appellate court’s observation that petitioner began to

question the jurisdiction of the COSLAP only when he realized that his period to appeal the COSLAP’s decision had already lapsed.x[10] It has been repeatedly held by this Court that the active participation of arespondent in the case pending against him before a court or a quasi-

judicial body is tantamount to a recognition of that court’s or body’srecognition and a willingness to abide by the resolution of the case andwill bar said party from later on impugning the court’s or body’s

jurisdiction.xi[11]

Moreover, Executive Order No. 561 creating the COSLAP, the law then prevailing when private respondents filed their complaint for cancellationof FLGLA No. 542, provides in Section 3, paragraph 2(a) thereof thatsaid Commission may assume jurisdiction over land disputes involvingoccupants of the land in question and pasture lease agreement holders:

Sec. 3. Powers and Functions. -- The Commission shall have thefollowing powers and functions:

x x x

2. Refer and follow-up for immediate action by the agency having

appropriate jurisdiction any land problem or dispute referred to theCommission: Provided, That the Commission, may, in the followingcases, assume jurisdiction and resolve land problems or disputes which

are critical and explosive in nature considering, for instance, the largenumber of the parties involved, the presence or emergence of social

tension or unrest, or other similar critical situations requiring immediateaction:

(a) Between occupants/squatters and pasture lease

agreement holders or timber concessionaires;

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(b) Between occupants/squatters and government reservationgrantees;

(c) Between occupants/squatters and public land claimants or

applicants;

(d) Petitions for classification, release and/or subdivision of lands of the public domain; and

(e) Other similar land problems of grave urgency andmagnitude.

The Commission shall promulgate such rules of procedure as will insureexpeditious resolution and action on the above cases. The resolution,order or decision of the Commission on any of the foregoing cases shall

have the force and effect of a regular administrative resolution, order or decision and shall be binding upon the parties therein and upon theagency having jurisdiction over the same. Said resolution, order or decision shall become final and executory within thirty (30) days from its

promulgation and shall be appealable by certiorari only to the SupremeCourt. (Emphasis supplied.)

The Court of Appeals also stated that based on the records, the the landarea being claimed by private respondents belongs to the B’laanindigenous cultural community since they have been in possession of,and have been occupying and cultivating the same since time

immemorial, a fact has not been disputed by petitioner.xii[12] It waslikewise declared by the appellate court that FLGLA No. 542 granted to

petitioner violated Section 1 of Presidential Decree No. 410xiii[13]which states that all unappropriated agricultural lands forming part of the

public domain are declared part of the ancestral lands of the indigenouscultural groups occupying the same, and these lands are further declaredalienable and disposable, to be distributed exclusively among the

members of the indigenous cultural group concerned.

The Court finds no reason to depart from such finding by the appellatecourt, it being a settled rule that findings of fact of the Court of Appeals

are binding and conclusive upon the Supreme Court absent any showingthat such findings are not supported by the evidence on record.xiv[14]

WHEREFORE, the petition is hereby DENIED.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ.,concur.

i[1] Nicasio I. Alcantara, Petitioner vs. Commission on the Settlement of Land P roblems,

Secretary of Department of Environment and Natural Resources Antonio Cerilles, The

Department of Environment and Natural Resources, Rolando Paglangan, et al.,

Respondents.

i[2] Petition, Rollo, p. 9.

i[3] Rollo, pp. 93-95.

i[4] Republic Act No. 8371, ―An Act to Recognize, Protect and Promote the Rights of

Indigenous Cultural Communities/Indigenous Peoples, Creating a National Commission

on Indigenous Peoples, Establishing Implementing Mechanisms, Appropriating FundsTherefor, and for Other Purposes (1997).

i[5] Petition, Rollo, pp. 20-28.

i[6] Comment, Id., at 137-139.

i[7] Id., at 146-147.

i[8] Id., at 150.

i[9] Amended Complaint-in -Intervention, p. 2.

i[10] Decision of the Court of Appeals, Id., at 85.

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i[11] Spouses Virgilio and Josie Jimenez vs. Patricia, Inc., G.R. No. 134651, September

18, 2000; See also ABS-CBN Supervisors Employees Union Members vs. ABS-CBN

Broadcasting Corporation, 304 SCRA 489 (1999); Maneja vs. National Labor RelationsCommission, 290 SCRA 603 (1998);

i[12] Id., at 89.

i[13] Section 1. Ancestral Lands. -- Any provision of law, decree, executive order, rule

or regulation to the contrary notwithstanding all unappropriated agricultural lands

forming part of the public domain at the date of the approval of this Decree occupied and

cultivated by members of the National Cultural Communities for at least ten (10) years

before the effectivity of this Decree, particularly in the provinces of Mountain Province,

Cagayan, Kalinga-Apayao, Ifugao, Mindoro, Pampanga, Rizal, Palawan, Lanao del Sur,

Lanao del Norte, Sultan Kudarat, Maguindanao, North Cotabato, South Cotabato, Sulu,

Tawi-Tawi, Zamboanga del Sur, Zamboanga del Norte, Davao del Sur, Davao del Norte,Davao Oriental, Davao City, Agusan, Surigao del Sur, Surigao del norte, Bukidnon, and

Basilan are hereby declared part of the ancestral lands of these National Cultural

Minorities and as such these lands are further declared alienable and disposable if suchlands have not been earlier declared as alienable and disposable by the Director of Forest

Development, to be distributed exclusively among the members of the National Cultural

Communities concerned, as defined under the Constitution and under Republic Act Numbered Eighteen hundred eighty-eight: Provided, however, That lands of the public

domain heretofore reserved for settlement purposes under the administration of the

Department of Agrarian Reform and other areas reserved for other public or quasi-public

purposes shall not be subject to disposition in accordance with the provisions of this

Decree: Provided, further, That the Government in the interest of its development

program, may establish agro-industrial projects in these areas for the purpose of creatingconditions for employment and thus further enhance the progress of the people.

For purposes of this Decree, ancestral lands are lands of the public domain

that have been in open, continuous, exclusive and notorious occupation and cultivation

by members of the National Cultural Communities by themselves or through their ancestors under a bona fide claim of acquisition of ownership according to their customs

and traditions for a period of at least thirty (30) years before the date of approval of this

Decree. The interruption of the period of their occupation and cultivation on account of

civil disturbance or force majeure shall not militate against their right granted under this

Decree

i[14] Security Bank and Trust Company vs. Triumph Lumber and Construction

Corporation, 301 SCRA 537 (1999), Development Bank of the Philippines vs. Court of Appeals, 302 SCRA 362 (1999).

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THIRD DIVISION

THE HEIRS OF THE LATE RUBEN REINOSO, SR.,

represented by Ruben Reinoso Jr.,

Petitioners,

- versus -

COURT OF APPEALS, PONCIANO TAPALES,

JOSE GUBALLA, and FILWRITERS GUARANTY

ASSURANCE CORPORATION,

Respondent.

G.R. No. 116121

Present:

CARPIO, J.

VELASCO, JR., Chairperson,

PERALTA,

ABAD, and

MENDOZA, JJ.

Promulgated:

July 18, 2011

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

DECISION

MENDOZA, J .:

Before the Court is a petition for review assailing the May 20,

1994 Decisionxiv[1] and June 30, 1994 Resolutionxiv[2] of the Court of

Appeals (CA), in CA-G.R. CV No. 19395, which set aside the March 22,

1988 Decision of the Regional Trial Court, Branch 8, Manila (RTC) for

non-payment of docket fees. The dispositive portion of the CA decision

reads:

IN VIEW OF ALL THE FOREGOING, the decision

appealed from is SET ASIDE and REVERSED and the

complaint in this case is ordered DISMISSED.

No costs pronouncement.

SO ORDERED.

The complaint for damages arose from the collision of a

passenger jeepney and a truck at around 7:00 o’clock in the evening of

June 14, 1979 along E. Rodriguez Avenue, Quezon City. As a result, a

passenger of the jeepney , Ruben Reinoso, Sr. (Reinoso), was killed. The

passenger jeepney was owned by Ponciano Tapales (Tapales) and driven

by Alejandro Santos (Santos), while the truck was owned by Jose

Guballa (Guballa) and driven by Mariano Geronimo (Geronimo).

On November 7, 1979, the heirs of Reinoso (petitioners) filed a

complaint for damages against Tapales and Guballa. In turn, Guballafiled a third party complaint against Filwriters Guaranty Assurance

Corporation (FGAC) under Policy Number OV-09527.

On March 22, 1988, the RTC rendered a decision in favor of the

petitioners and against Guballa. The decision in part, reads:

In favor of herein plaintiffs and against

defendant Jose Guballa:

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1. For the death of Ruben Reinoso, Sr. ₱30,000.00

2. Loss of earnings (monthly income at

the time of death (₱2,000.00 Court used₱1,000.00 only per month (or ₱12,000.00

only per year) & victim then being 55 at

death had ten (10) years life

expectancy……………

120,000.00

3. Mortuary, Medical & funeral expenses

and all incidental expenses in the wake in

serving those who

condoled………………………………………………..

15,000.00

4. Moral damages…………………………………….. 50,000.00

5. Exemplary damages

…………………………………

25,000.00

6. Litigation expenses

………………………………….

15,000.00

7. Attorney’s fees

………………………………………

25,000.00

Or a total of ₱250,000.00

For damages to property:

In favor of defendant Ponciano Tapales and

against defendant Jose Guballa:

1. Actual damages for repair is already

awarded to defendant-cross-claimant

Ponciano Tapales by Br. 9, RTC-Malolos,

Bulacan (Vide: Exh. 1-G-Tapales); hence,

cannot recover twice.

2. Compensatory damages (earnings at

₱150.00 per day) and for two (2) months

jeepney stayed at the repair

shop……………………………………….

₱9,000.00

3. Moral damages ………………………... 10,000.00

4. Exemplary damages …………………. 10,000.00

5. Attorney’s fees………………………… 15,000.00

or a total of ₱44,000.00

Under the 3rd

party complaint against 3rd

party

defendant Filwriters Guaranty Assurance Corporation,

the Court hereby renders judgment in favor of said 3rd

party plaintiff by way of 3rd

party liability under policy

No. OV-09527 in the amount of ₱50,000.00 undertaking

plus ₱10,000.00 as and for attorney’s fees.

For all the foregoing, it is the well considered

view of the Court that plaintiffs, defendant Ponciano

Tapales and 3rd

Party plaintiff Jose Guballa established

their claims as specified above, respectively. Totality of

evidence preponderance in their favor.

J U D G M E N T

WHEREFORE, in view of the foregoing,

judgment is hereby rendered as follows:

In favor of plaintiffs for the death of Ruben

Reinoso,

Sr………………………………………………………….₱250,000.00;

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In favor of defendant Ponciano Tapales due to

damage of his passenger

jeepney…………………………………….……₱44,000.00;

In favor of defendant Jose Guballa under Policy

No. OV-

09527……………………………………………………....₱60,000.00;

All the specified accounts with 6% legal rate of

interest per annum from date of complaint until fully

paid (Reformina vs. Tomol, 139 SCRA 260; and finally;

Costs of suit.

SO ORDERED.xiv[3]

On appeal, the CA, in its Decision dated May 20, 1994, set aside

and reversed the RTC decision and dismissed the complaint on the

ground of non-payment of docket fees pursuant to the doctrine laid

down in Manchester v. CA.xiv[4] In addition, the CA ruled that since

prescription had set in, petitioners could no longer pay the required

docket fees.xiv[5]

Petitioners filed a motion for reconsideration of the CA decision

but it was denied in a resolution dated June 30, 1994.xiv[6] Hence, this

appeal, anchored on the following

GROUNDS:

A. The Court of Appeals MISAPPLIED THE RULING of

the Supreme Court in the case of Manchester

Corporation vs. Court of Appeals to this case.

B. The issue on the specification of the damages

appearing in the prayer of the Complaint was NEVER

PLACED IN ISSUE BY ANY OF THE PARTIES IN THE

COURT OF ORIGIN (REGIONAL TRIAL COURT) NOR IN

THE COURT OF APPEALS.

C. The issues of the case revolve around the more

substantial issue as to the negligence of the private

respondents and their culpability to petitioners.”xiv[7]

The petitioners argue that the ruling in Manchester should not

have been applied retroactively in this case, since it was filed prior tothe promulgation of the Manchester decision in 1987. They plead that

though this Court stated that failure to state the correct amount of

damages would lead to the dismissal of the complaint, said doctrine

should be applied prospectively.

Moreover, the petitioners assert that at the time of the filing of

the complaint in 1979, they were not certain of the amount of damages

they were entitled to, because the amount of the lost income would still

be finally determined in the course of the trial of the case. They claim

that the jurisdiction of the trial court remains even if there was failureto pay the correct filing fee as long as the correct amount would be paid

subsequently.

Finally, the petitioners stress that the alleged defect was never

put in issue either in the RTC or in the CA.

The Court finds merit in the petition.

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The rule is that payment in full of the docket fees within the

prescribed period is mandatory.xiv[8]

In Manchester v. Court of

Appeals,xiv[9] it was held that a court acquires jurisdiction over any case

only upon the payment of the prescribed docket fee. The strict

application of this rule was, however, relaxed two (2) years after in the

case of Sun Insurance Office, Ltd. v. Asuncion,xiv[10]

wherein the Court

decreed that where the initiatory pleading is not accompanied by the

payment of the docket fee, the court may allow payment of the fee

within a reasonable period of time, but in no case beyond the applicable

prescriptive or reglementary period. This ruling was made on the

premise that the plaintiff had demonstrated his willingness to abide by

the rules by paying the additional docket fees required.xiv[11]

Thus, in the

more recent case of United Overseas Bank v. Ros,xiv[12]

the Court

explained that where the party does not deliberately intend to defraud

the court in payment of docket fees, and manifests its willingness toabide by the rules by paying additional docket fees when required by

the court, the liberal doctrine enunciated in Sun Insurance Office, Ltd.,

and not the strict regulations set in Manchester , will apply. It has been

on record that the Court, in several instances, allowed the relaxation of

the rule on non-payment of docket fees in order to afford the parties

the opportunity to fully ventilate their cases on the merits. In the

case of La Salette College v. Pilotin,xiv[13]

the Court stated:

Notwithstanding the mandatory nature of the

requirement of payment of appellate docket fees, wealso recognize that its strict application is qualified by

the following: first , failure to pay those fees within the

reglementary period allows only discretionary, not

automatic, dismissal; second, such power should be

used by the court in conjunction with its exercise of

sound discretion in accordance with the tenets of

justice and fair play, as well as with a great deal of

circumspection in consideration of all attendant

circumstances.xiv[14]

While there is a crying need to unclog court dockets on the one

hand, there is, on the other, a greater demand for resolving genuine

disputes fairly and equitably,xiv[15]

for it is far better to dispose of a case

on the merit which is a primordial end, rather than on a technicality that

may result in injustice.

In this case, it cannot be denied that the case was litigated

before the RTC and said trial court had already rendered a decision.

While it was at that level, the matter of non-payment of docket fees

was never an issue. It was only the CA which motu propio dismissed the

case for said reason.Considering the foregoing, there is a need to suspend the strict

application of the rules so that the petitioners would be able to fully and

finally prosecute their claim on the merits at the appellate level rather

than fail to secure justice on a technicality, for, indeed, the general

objective of procedure is to facilitate the application of justice to the

rival claims of contending parties, bearing always in mind that

procedure is not to hinder but to promote the administration of

justice.xiv[16]

The Court also takes into account the fact that the case wasfiled before the Manchester ruling came out. Even if said ruling could be

applied retroactively, liberality should be accorded to the petitioners in

view of the recency then of the ruling. Leniency because of recency was

applied to the cases of Far Eastern Shipping Company v. Court of

Appealsxiv[17] and Spouses Jimmy and Patri Chan v. RTC of

Zamboanga.xiv[18] In the case of Mactan Cebu International Airport

Authority v. Mangubat (Mactan) ,xiv[19] it was stated that the “intent of

the Court is clear to afford litigants full opportunity to comply with the

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new rules and to temper enforcement of sanctions in view of the

recency of the changes introduced by the new rules.” In Mactan, the

Office of the Solicitor General (OSG) also failed to pay the correct docket

fees on time.

We held in another case:

x x x It bears stressing that the rules of

procedure are merely tools designed to facilitate

the attainment of justice. They were conceived and

promulgated to effectively aid the court in the

dispensation of justice. Courts are not slaves to or

robots of technical rules, shorn of judicial

discretion. In rendering justice, courts have always

been, as they ought to be, conscientiously guidedby the norm that, on the balance, technicalities

take a backseat against substantive rights, and not

the other way around. Thus, if the application of

the Rules would tend to frustrate rather than

promote justice, it is always within the power of the

Court to suspend the Rules, or except a particular

case from its operation.xiv[20]

The petitioners, however, are liable for the difference betweenthe actual fees paid and the correct payable docket fees to be assessed

by the clerk of court which shall constitute a lien on the judgment

pursuant to Section 2 of Rule 141 which provides:

SEC. 2. Fees in lien. – Where the court in its

final judgment awards a claim not alleged, or a

relief different from, or more than that claimed in

the pleading, the party concerned shall pay the

additional fees which shall constitute a lien on the

judgment in satisfaction of said lien. The clerk of

court shall assess and collect the corresponding

fees.

As the Court has taken the position that it would be grossly

unjust if petitioners’ claim would be dismissed on a strict application of

the Manchester doctrine, the appropriate action, under ordinary

circumstances, would be for the Court to remand the case to the CA.

Considering, however, that the case at bench has been pending for

more than 30 years and the records thereof are already before this

Court, a remand of the case to the CA would only unnecessarily prolong

its resolution. In the higher interest of substantial justice and to spare

the parties from further delay, the Court will resolve the case on the

merits.

The facts are beyond dispute. Reinoso, the jeepney passenger,

died as a result of the collision of a jeepney and a truck on June 14, 1979

at around 7:00 o’clock in the evening along E. Rodriguez Avenue,

Quezon City. It was established that the primary cause of the injury or

damage was the negligence of the truck driver who was driving it at a

very fast pace. Based on the sketch and spot report of the police

authorities and the narration of the jeepney driver and his passengers,

the collision was brought about because the truck driver suddenly

swerved to, and encroached on, the left side portion of the road in an

attempt to avoid a wooden barricade, hitting the passenger jeepney asa consequence. The analysis of the RTC appears in its decision as

follows:

Perusal and careful analysis of evidence

adduced as well as proper consideration of all the

circumstances and factors bearing on the issue as to

who is responsible for the instant vehicular mishap

convince and persuade this Court that preponderance

of proof is in favor of plaintiffs and defendant Ponciano

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Tapales. The greater mass of evidence spread on the

records and its influence support plaintiffs’ plaint

including that of defendant Tapales.

The Land Transportation and Traffic Rule (R.A.

No. 4136), reads as follows:

“Sec. 37. Driving on right side of

highway. – Unless a different course of action is

required in the interest of the safety and the

security of life, person or property, or because

of unreasonable difficulty of operation in

compliance therewith, every person operating

a motor vehicle or an animal drawn vehicle on

highway shall pass to the right when meeting

persons or vehicles coming toward him, and to

the left when overtaking persons or vehiclesgoing the same direction, and when turning to

the left in going from one highway to another,

every vehicle shall be conducted to the right of

the center of the intersection of the highway.”

Having in mind the foregoing provision of law,

this Court is convinced of the veracity of the version of

the passenger jeepney driver Alejandro Santos,

(plaintiffs’ and Tapales’ witness) that while running on

lane No. 4 westward bound towards Ortigas Avenue at

between 30-40 kms. per hour (63-64 tsn, Jan. 6, 1984)the “sand & gravel” truck from the opposite direction

driven by Mariano Geronimo, the headlights of which

the former had seen while still at a distance of about

30-40 meters from the wooden barricade astride lanes

1 and 2, upon reaching said wooden block suddenly

swerved to the left into lanes 3 and 4 at high speed

“napakabilis po ng dating ng truck.” (29 tsn, Sept. 26,

1985) in the process hitting them (Jeepney passenger)

at the left side up to where the reserve tire was in an

oblique manner “pahilis” (57 tsn, Sept. 26, 1985). The

jeepney after it was bumped by the truck due to the

strong impact was thrown “resting on its right side

while the left side was on top of the Bangketa (side

walk)”. The passengers of the jeepney and its driver

were injured including two passengers who died. The

left side of the jeepney suffered considerable damage

as seen in the picture (Exhs. 4 & 5-Tapales, pages 331-

332, records) taken while at the repair shop.

The Court is convinced of the narration of

Santos to the effect that the “gravel & sand” truck was

running in high speed on the good portion of E.

Rodriguez Avenue (lane 1 & 2) before the wooden

barricade and (having in mind that it had just deliveredits load at the Corinthian Gardens) so that when

suddenly confronted with the wooden obstacle before

it had to avoid the same in a manner of a reflex

reaction or knee-jerk response by forthwith swerving to

his left into the right lanes (lanes 3 & 4). At the time of

the bumping, the jeepney was running on its right lane

No. 4 and even during the moments before said

bumping, moving at moderate speed thereon since lane

No. 3 was then somewhat rough because being

repaired also according to Mondalia who has no reasonto prevaricate being herself one of those seriously

injured. The narration of Santos and Mondalia are

convincing and consistent in depicting the true facts of

the case untainted by vacillation and therefore, worthy

to be relied upon. Their story is forfeited and confirmed

by the sketch drawn by the investigating officer Pfc. F.

Amaba, Traffic Division, NPD, Quezon City who rushed

to the scene of the mishap (Vide: Resolution of Asst

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fiscal Elizabeth B. Reyes marked as Exhs. 7, 7-A, 7-B-

Tapales, pp. 166-168, records; the Certified Copy found

on pages 598-600, ibid, with the attached police sketch

of Pfc. Amaba, marked as Exh. 8-Tapales on page 169,

ibid; certified copy of which is on page 594, ibid)

indicating the fact that the bumping indeed occurred at

lane No. 4 and showing how the ‘gavel & sand’ truck is

positioned in relation to the jeepney. The said police

sketch having been made right after the accident is a

piece of evidence worthy to be relied upon showing the

true facts of the bumping-occurrence. The rule that

official duty had been performed (Sec.5(m), R-131, and

also Sec. 38, R-a30, Rev. Rules of Court) – there being

no evidence adduced and made of record to the

contrary – is that said circumstance involving the twovehicles had been the result of an official investigation

and must be taken as true by this Court.xiv[21]

While ending up on the opposite lane is not conclusive proof of

fault in automobile collisions,xiv[22] the position of the two vehicles, as

depicted in the sketch of the police officers, clearly shows that it was

the truck that hit the jeepney . The evidentiary records disclosed that the

truck was speeding along E. Rodriguez, heading towards Santolan

Street, while the passenger jeepney was coming from the opposite

direction. When the truck reached a certain point near the Meralco PostNo. J9-450, the front portion of the truck hit the left middle side portion

of the passenger jeepney , causing damage to both vehicles and injuries

to the driver and passengers of the jeepney . The truck driver should

have been more careful, because, at that time, a portion of E. Rodriguez

Avenue was under repair and a wooden barricade was placed in the

middle thereof.

The Court likewise sustains the finding of the RTC that the truck

owner, Guballa, failed to rebut the presumption of negligence in the

hiring and supervision of his employee. Article 2176, in relation to

Article 2180 of the Civil Code, provides:

Art. 2176. Whoever by act or omission causes

damage to another, there being fault or negligence is

obliged to pay for the damage done. Such fault or

negligence, if there is no pre-existing contractual

relation between the parties, is called a quasi-delict

and is governed by the provisions of this Chapter.

xxxx

Art. 2180. The obligation imposed by Art. 2176

is demandable not only for one’s own acts or

omissions but also for those of persons for whom one

is responsible.xxxx

Employers shall be liable for the damage

caused by their employees and household helpers

acting within the scope of their assigned tasks even

though the former are not engaged in any business or

industry.

xxxx

The responsibility treated of in this article shall

cease when the persons herein mentioned prove that

they observed all the diligence of a good father of afamily to prevent damage.

Whenever an employee’s negligence causes damage or injury to

another, there instantly arises a presumption juris tantum that the

employer failed to exercise diligentissimi patris families in the selection

or supervision of his employee.xiv[23] Thus, in the selection of

prospective employees, employers are required to examine them as to

their qualification, experience and service record. With respect to the

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supervision of employees, employers must formulate standard

operating procedures, monitor their implementation, and impose

disciplinary measures for breaches thereof. These facts must be shown

by concrete proof, including documentary evidence.xiv[24] Thus, the

RTC committed no error in finding that the evidence presented by

respondent Guballa was wanting. It ruled:

x x x. As expected, defendant Jose Guballa,

attempted to overthrow this presumption of negligence

by showing that he had exercised the due diligence

required of him by seeing to it that the driver must

check the vital parts of the vehicle he is assigned to

before he leaves the compound like the oil, water,

brakes, gasoline, horn (9 tsn, July 17, 1986); and that

Geronimo had been driving for him sometime in 1976

until the collision in litigation came about (5-6 tsn, ibid);that whenever his trucks gets out of the compound to

make deliveries, it is always accompanied with two (2)

helpers (16-17 tsn, ibid). This was all which he

considered as selection and supervision in compliance

with the law to free himself from any responsibility.

This Court then cannot consider the foregoing as

equivalent to an exercise of all the care of a good father

of a family in the selection and supervision of his driver

Mariano Geronimo.”xiv[25]

WHEREFORE, the petition is GRANTED. The May 20, 1994

Decision and June 30, 1994 Resolution of the Court of Appeals are

REVERSED and SET ASIDE and the March 22, 1988 Decision of the

Regional Trial Court, Branch 8, Manila, is REINSTATED.

SO ORDERED.

JOSE CATRAL

MENDOZA

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO

Associate Justice

PRESBITERO J. VELASCO, JR. DIOSDADO M. PERALTA

Associate Justice Associate Justice

Chairperson

ROBERTO A. ABAD

Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been

reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

PRESBITERO J. VELASCO, JR.

Associate Justice

Chairperson, Third Division

C E R T I F I C A T I O N

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Pursuant to Section 13, Article VIII of the Constitution and the

Division Chairperson’s Attestation, I certify that the conclusions in the

above Decision had been reached in consultation before the case was

assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA

Chief Justice

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Republic of the Philippines

SUPREME COURT Manila

SECOND DIVISION

G.R. No. 149351 March 17, 2004

SPEED DISTRIBUTING CORP., LITA MARCELO, IRENEOMARCELO and PEDRO AQUINO, petitioners,

vs.COURT OF APPEALS and RUFINA LIM, respondents.

D E C I S I O N

CALLEJO, SR., J .:

This is a petition for review of the Decision1 of the Court of Appeals in

CA-G.R. No. 52214 (CV) reversing the November 21, 1995 Order 2 of

the Regional Trial Court of Quezon City, Branch 222, dismissing the

complaint in Civil Case No. Q-95-24588, and its August 8, 2001

Resolution denying the Motion for Reconsideration of the aforesaiddecision.

The Antecedents

On September 20, 1953, Pastor Y. Lim married private respondentRufina Luy Lim.3 During the early part of their marriage, Pastor

organized some family corporations using their conjugal funds. Amongthese corporations was Skyline International Corporation (Skyline, for

brevity) which was engaged in the importation and sale of Hankook Brand Korean Tires and the acquisition of real estate. The couple wereincorporators and major stockholders of the corporation and were alsoemployed therein.

Pastor and the private respondent did not have a child. They decided to"adopt" Leonard Lim and petitioner Lita Lim Marcelo, who werechildren of their distant poor relatives in Zamboanga City. There was,however, no formal court adoption. Sometime thereafter, marital

problems arose, as a result of which the private respondent stoppedworking at Skyline. As the domestic problems remained unresolved,

Pastor and the private respondent jointly filed on August 13, 1968 aPetition before the Juvenile and Domestic Relations Court of QuezonCity, for voluntary dissolution of conjugal properties. As their differences worsened, the private respondent filed on January 27, 1971 a

petition for legal separation against Pastor on the ground of infidelity before the then Juvenile and Domestic Relations Court of Quezon City.The petition was amended into one for Support with Alimony and thecase was docketed as Civil Case No. QE-0030.

On February 17, 1972, the court rendered a decision, awarding P3,000monthly support to the private respondent and the children, thedispositive portion of which reads:

WHEREFORE, judgment is hereby rendered:

1. Ordering defendant to pay plaintiff monthly supportof P3,000.00 effective as of February, 1971;

2. Ordering defendant to pay plaintiff attorney’s fees inthe sum of P2,000.00, plus the cost of this suit. 4

On June 24, 1975, the private respondent filed a motion for execution.

The court issued an order granting the motion and the sheriff levied onthe properties of Skyline. The latter filed, on December 19, 1975, a third-

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party claim, alleging that the properties levied were its personal properties and not those of Pastor, who was only one of its stockholders.The private respondent filed a motion to quash Skyline’s claim, whichthe court granted.

Skyline filed a petition for certiorari with prayer for temporaryrestraining order before the Court of Appeals for the nullification of theorder of the trial court quashing the third-party claim. The case wasdocketed as CA-G.R. No. 05312 (SP). The appellate court issued atemporary restraining order on April 27, 1976. On June 23, 1976, theCourt of Appeals rendered a decision dismissing the petition, thus, lifting

the restraining order .5 The appellate court ruled as follows:

While it is recognized as "lawful to obtain a corporation charter,even with a single substantial stockholder, to engage in a specific

activity, and such activity may co-exist with other privateactivities of the stockholder" (Liddel & Co., Inc. vs. Collector of Internal Revenue, L-9687, June 30, 1961, 2 SCRA 632), thecorporation’s distinct personality will be disregarded when it isso "controlled and its affairs so conducted as to make it merely

an instrumentality, agency or conduit of another" (NAMARCOvs. Associated Finance Company, supra).

It is not disputed that petitioner Skyline International, Inc. was aconjugal enterprise (p. 2, Decision) before its incorporation inDecember 1970 (p. 10, id.), when it was still a proprietorship.Petitioner Skyline International, Inc. is still engaged in the saleof automotive parts and dealership of Firestone Rubber and Tireswhich business it was already doing when it was still a

proprietorship. Respondent Court found that the only assets of petitioner corporation are the conjugal properties. Thus,respondent Court concludes that "it is safe to assume that Skyline

International Corporation is another name for Mr. and Mrs.Pastor Y. Lim in person." In fact, Pastor Y. Lim admitted that the

other incorporators are their former employees and their respective shares are nominal (Decision, pp. 14-15).

The above facts are more than enough justification for

respondent Court to pierce the veil of corporate fiction.Consequently, we find the questioned orders to be in order .

6

Skyline, then, filed a petition for review before this Court, but the petition was dismissed in a Resolution dated August 6, 1976.

7

On August 21, 1987, the Speed Distributing Corporation (Speed, for brevity), was registered with the Securities and Exchange Commission,with Pastor Lim as one of the incorporators. He owned ten shares, valuedat P100.00 per share. The following were the names of the incorporators,the number of shares respectively subscribed to by them and the amount

paid up:

Shares Subscribed Paid

Lita T. Lim 11,200 P 1,120,000.00 P 280,000.00

Leonard L. Lim 1,000 100,000.00 25,000.00

Lina S. Lim 150 15,000.00 3,750.00

Larry S. Lim 140 14,000.00 3,500.00

Pastor Y. Lim 10 1,000.00 250.00

12,500 P1,250,000.00 P 312,500.00

Petitioner Lita Lim-Marcelo was elected treasurer of the corporation.

On June 21, 1991, the Leslim Corporation (Leslim, for brevity), wasregistered with the Securities and Exchange Commission with a capitalstock of P12,000,000.00, divided into 120,000 shares at par value of P100.00 per share. Pastor Lim subscribed to 95,700 shares valued atP9,570,000.00. The incorporators, the number of shares they subscribed




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to and the amounts paid for were indicated in the articles of incorporationas follows:

Name No. of Share Amount Subscribed

Teresa T. Lim 24,000 P2,400,000.00

Leonard L. Lim 100 10,000.00

Larry S. Lim 100 10,000.00

Lina L. Lim 100 10,000.00

Pastor Y. Lim 95,700 9,570,000.00

120,000 P12,000,000.00

…

The following persons have paid on the shares of the capital stock for which they have subscribed the amount set after their names

respectively:

Name Amount Paid

Teresa T. Lim P600,000.00

Leonard L. Lim 2,500.00

Larry S. Lim 2,500.00

Lina L. Lim 2,500.00

Pastor Y. Lim P2,392,500.00

P3,000,000.00

Under the articles of incorporation, Pastor Lim was the treasurer-in-trustof the corporation.

10 The Vice-President and Treasurer of the corporation

was petitioner Lita Lim-Marcelo, now married to petitioner IreneoMarcelo.

On August 26, 1994, Leslim Corporation executed a deed of absolutesale in favor of the Speed, represented by its Vice-President, petitioner Ireneo Marcelo, over the parcel of lot located at Diliman Quezon City,covered by TCT No. 36617 for the price of P3,900,000.00.11 Petitioner

Lita Lim-Marcelo, the Vice-President of Leslim12 signed in the deed for and in behalf of the corporation. She was authorized by the Board of Directors in a Resolution August 19, 1994 to sign the said deed and toreceive the purchase price for and in behalf of Leslim. The saidResolution was certified by corporate secretary Pedro Aquino on August

22, 1994.13

Consequently, TCT No. 36617 which was in the name of Leslim, was cancelled and a new one, TCT No. T-116716, was issued toand in the name of Speed.14

On June 11, 1994, Pastor Lim died intestate and was survived by hiswife, the private respondent. On March 17, 1995, the private respondent,

through her nephew and attorney-in-fact George Luy, filed a petition for the administration of the estate of her deceased husband before theRegional Trial Court of Quezon City, docketed as Special Proceedings

No. Q-95-23334.15 The case was raffled to Branch 93. The private

respondent filed a motion praying for the annotation of a notice of lis pendens at the dorsal portion of all titles over the properties in the name

of Pastor. Included in the said properties were those registered in thename of other corporations of which Pastor was a stockholder, includingthat parcel of land covered by TCT No. T-116717 registered under thename of Speed. The court granted the motion. The affected corporations,including Speed, filed motions to cancel the notices of lis pendens and

motions for exclusion of certain properties from Pastor’s estate. On June8, 1995, the Court granted the motions and ordered the exclusion of certain properties from the estate of Pastor and the cancellation of thenotices of lis pendens on properties registered in the name of the saidcorporations, including that covered by TCT No. T-116716 under thename of Speed.

On June 27, 1995, the private respondent filed a verified amended petition in SP No. Q-95-23334 alleging, among others, that during his


























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lifetime, Pastor substantially owned the following business entities:Skyline Sales Corporation, Speed Distributing, Inc., and LeslimCorporation:

5. That the following real properties, although registered in thename of the above entities, were actually acquired by Pastor Y.Lim during his marriage with petitioner, to wit:

CORPORATION TITLE LOCATION

b. Leslim Corp. TCT No. 36617 Quezon City

but now illegally transferred to and registered in the name of Speed Distributing, Inc. under TCT No. 116716.16

On July 4, 1995, the probate court issued an Order setting aside its June8, 1995 Order and directed the Register of Deeds to reinstate the noticeof lis pendens on TCT No. T-116716. The court denied the motion for

the reconsideration of the said order.

Speed filed a petition for certiorari with the Court of Appeals for thenullification of the July 4, 1995 and September 12, 1995 Orders of the

trial court, docketed as CA-G.R. No. 38617 (SP).

Meanwhile, on August 1, 1995, the private respondent filed a complaintagainst Speed, and the petitioners with the RTC of Quezon City, for the

nullification of the Deed of Absolute Sale executed by Leslim in favor of Speed over the property covered by TCT No. T-36617, and thecancellation of TCT No. T-11676, with damages before the RTC of

Quezon City. The case was raffled to Branch 222, and was docketed asQ-95-24588. The private respondent alleged, inter alia, that:

. . .

6. Plaintiff is the surviving spouse of the late Pastor Y. Lim whodied intestate on June 11, 1994, but leaving several properties,real and personal, situated in Quezon City, Makati City, RizalProvince, Las Piñas, Valenzuela, Manila, Cavite, Masbate and

other parts of the country. …

7. During the existence of the marriage of plaintiff and Pastor Y.Lim, the latter formed, among others, Leslim Corporation, andhe actually owned the same as in fact he had in his name 95,700out of the 120,000 shares of the authorized capital stock. Theremaining shares of stocks were listed in the name of some

persons who were actually his dummies, and were made toappear as stockholders of Leslim Corporation only for purposesof registration with the Securities and Exchange Commission….

8. Leslim Corporation, in turn, is a registered owner of a certain parcel of land located in Diliman, Quezon City, as evidenced byTCT No. 36617, issued by defendant Register of Deeds, copy of which is hereto attached as Annex "C."

9. Plaintiff initiated an intestate proceedings on the estate of her deceased husband in order to lay claim on her conjugal sharethereon. She then started to verify the various TCTs of the real

property in the name of her deceased husband, including those inthe name of Leslim Corporation, and she discovered that TCT

No. 36617 had already been canceled and in lieu thereof, TCT No. 116716 was issued by defendant Register of Deeds in thename of defendant Corporation…

10. Upon further verification, plaintiff discovered that the basisof the cancellation of TCT No. 36617 in favor of TCT No.

116716 is a Deed of Sale signed and executed by defendant LitaMarcelo who misrepresented herself as Vice President of LeslimCorporation and as such she was purportedly authorized todispose of the property in question in favor of defendant





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corporation, which latter corporation was allegedly representedin the transaction by her husband, herein defendant IreneoMarcelo who claimed himself as the Vice President of defendantcorporation. …

11. To give a semblance of legality to the feigned transaction of sale, defendant Pedro Aquino, misrepresenting himself as thecorporate secretary of Leslim Corporation, executed asimulated/falsified secretary’s certificate, wherein he stated thatin an alleged special meeting of the Board of Directors of LeslimCorporation held on August 19, 1994 in its office at 1006

Quezon Avenue, Quezon City, defendant Lita Marcelo wasallegedly authorized by the Board to enter into the transaction inquestion….

12. The transfer of the property from Leslim to defendantcorporation is imaginary, the deed of sale and the secretary’scertificate are simulated, hence, null and void, as shown below:

13. First of all, there was no such special meeting of the board of directors of Leslim Corporation on August 19, 1994, contrary tothe allegation in the secretary’s certificate. No notices to thateffect were ever sent to Pastor Lim, a director and owner of 79.75 per cent of the capital stock of Leslim Corporation.Secondly, there was never a meeting of the stockholders whereinmore than two-thirds of the stocks were present in order toapprove the sale of all or substantially all of the assets consistingof real properties of Leslim Corporation. Indeed, no suchmeeting could have been held because Pastor Lim, who owned

practically two-thirds of the total capital stock, had already diedon June 11, 1994. The last meeting of stockholders of LeslimCorporation was held in January, 1994. Since then up to the

present, no other stockholder’s meeting, special or otherwise,was ever held by Leslim Corporation.

14. Thirdly, the place of the alleged special stockholders meetingcould not have occurred in the place where it was purportedlyheld, namely, 1006 Quezon Avenue, Quezon City. This place isthe address of Accurate Distributing, Inc., which had been under

the control of the group of Estrelita Cabarles since August 1994up to the present. On the other hand, defendants Lita Marcelo,Ireneo Marcelo, and Pedro Aquino and their cohorts are theadversaries of Estrelita Cabarles in several cases, civil andcriminal, pending before various courts in Metro Manila and

suburbs. The control and possession by the group of Cabarles of the premises ineluctably shows that no meeting was ever heldthereon by their adversaries. Fourthly, there was never any

payment made to Leslim Corporation respecting the alleged purchase price.

15. As a consequence of the above, defendant Lita Marcelocould not have been the Vice President of Leslim Corporation atthe time the simulated deed of sale in question was executed,contrary to her claim thereon. Besides, defendant Lita Marcelo

has never been a stockholder, much less a director of LeslimCorporation. Hence, it follows that the subject deed of absolute

sale and the secretary’s certificate are both simulated, and TCT No. 116716 of no force and effect, necessitating as it does itscancellation. The imaginary transaction of sale was clearlyresorted to by defendants after the August 19, 1994 specialstockholders’ meeting of Accurate Distributing Inc., where in the

ground of Estrelita Cabarles were elected as Board of Directorsand corporate officers and in order to deprive plaintiff of her conjugal share and the other heirs of Pastor Y. Lim of their shares in his estate. In fact, all the real property registered in thename of Leslim Corporation and in Nellmart Corporationwherein Pastor Lim is also the majority stockholder had beentransferred by defendants and their cohorts to themselves or toentities controlled by them, all at practically the same time.Thus:

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a. TCT No. 36617 – Deed of Sale dated August 22, 1994 – from Leslim to defendant Corporation. AmountP3,400,000.00.

b. TCT No. 66001 – Deed of Sale dated August 26, 1994 – from Leslim to Auto Truck TBA. AmountP10,500,000.00.

c. TCT No. 101730 – Deed of Sale dated August 26,1994 – from Leslim to Skyline Sales Corporation.Amount P15,500,00.00.

d. TCT No. T-48028 in the name of Nellmart butillegally transferred to defendant corporation under TCT

No. 116718.

e. TCT No. 236236 in the name of Nellmart but illegally

transferred to Alliance Marketing, Inc., under TCT No.285400.

f. TCT No. 236237 in the name of Nellmart but illegally

transferred to Alliance Marketing, Inc. under TCT No.285399.

16. The same scheme was resorted to by defendants and their

cohorts in divesting other corporations of all real property, wherePastor Lim is the stockholder. Thus, the motives of defendants inconspiracy with each other and with several other persons andentities are one and the same, namely: to monopolize the control,

possession, enjoyment and ownership of all the estate of Pastor

Lim, thereby depriving plaintiff of her conjugal share as well asher own share in her husband’s own estate.

17. By reason of these acts of defendants, plaintiff was

constrained to hire the services of counsel for a fee of

P50,000.00 and appearance fee of P1,500.00 per hearing. Shelikewise suffered sleepless nights and wounded feelings, whichif converted into its monetary equivalent would be P100,000.00,more or less.

18. In order to prevent defendants from repeating the unlawfulacts, they should be condemned by pay exemplary damages inthe amount of P100,000.00.

17

The private respondent prayed that, after due proceedings, judgment berendered in her favor, thus :

WHEREFORE, premises considered, it is respectfully prayed of this Honorable Court that after notice and hearing, judgment berendered:

a. declaring the secretary’s certificate and the deed of sale under

question null and void;

b. cancelling TCT No. 116716 issued in the name of defendantSpeed Distributing Corporation for being without basis in fact

and in law;

c. ordering defendants to pay jointly and severally the amount of P100,000.00 exemplary damages;

d. ordering defendants to play (sic) plaintiff jointly and severallythe amount of P50,000.00 attorney’s fees and P1,000.00appearance fee per hearing.

e. Ordering defendants to pay the cost of suit.18

In their answer with compulsory counterclaim, the petitionersspecifically denied the material allegations of the complaint, and by way









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of special and affirmative defenses, alleged that the private respondent(the plaintiff therein), was not privy to the deed of sale executed byLeslim and Speed. As such, she was not the real party-in-interest and hadno cause of action against the defendants. Pursuant to Presidential

Decree No. 902-A, the SEC, not the RTC, had jurisdiction over thecomplaint, as it was evident that the complaint involved an intra-corporate controversy.

19

In her reply, the private respondent alleged that even if she was not privyto the deed of sale over the subject property, she was entitled to itsincome, and her right accrued at the time of Pastor’s death on June 11,

1994.

On September 4, 1995, the RTC issued an Order in Special Proceedings No. 95-2334 granting the petition and appointed the private respondent

as the co-administrator of Miguel Lim, with Atty. Donald Lee as specialadministrator .20

The court held a hearing on the special and affirmative defenses of thedefendants (the petitioners herein) in Civil Case No. 95-24588. On

November 25, 1995, the RTC issued an order dismissing the complaint,real party-in-interest. According to the court, she had no cause of actionagainst the petitioners as she was not privy to the contract of sale

between Leslim and Speed. Neither was she a stockholder of thedefendant corporation; as such, she could not sue for the corporation.According to the court, the private respondent could not file thecomplaint in behalf of her deceased husband Pastor as she was unable toshow that she was the authorized representative of his estate; even if shewas so authorized, her claim was limited to the shares owned by Pastor,which could not extend to the properties of Leslim. The court also ruledthat the action involved intra-corporate controversies over which theSEC had original and exclusive jurisdiction.

Aggrieved, the private respondent filed a motion for reconsideration of the order which was denied on February 9, 1996.21 Dissatisfied, she

appealed the order to the Court of Appeals,22 docketed as CA-G.R. CV No. 52214. She ascribed the following errors to the court a quo:

I

THE LOWER COURT ERRED IN RULING THAT THE

PLAINTIFF-APPELLANT IS NOT A REAL PARTY-IN-INTEREST TO FILE THE "COMPLAINT" BEFORE THECOURT A QUO.

II

THE LOWER COURT ERRED IN RULING THAT IT HAD NO JURISDICTION OVER THE "COMPLAINT" IN CIVIL

CASE NO. Q-95-24588.

III.

THE LOWER COURT ERRED IN DISMISSING THEPLAINTIFF-APPELLANT’S "COMPLAINANT" IN CIVILCASE NO. Q-95-24588.23

On April 18, 1996, the Court of Appeals rendered judgment in CA-G.R.SP No. 38617 nullifying the assailed orders. The CA ruled that the

private respondent failed to prove that Pastor Lim, not Speed, owned the

property. It also ruled that the finding of the probate court that the property belonged to Pastor Lim was only provisional in nature. The private respondent then filed a petition for review on certiorari with thisCourt, docketed as G.R. No. 124715. On January 24, 2000, this Courtrendered a Decision dismissing the petition.

On September 15, 2000, the CA rendered a decision in CA-G.R. CV No.52214 setting aside the assailed orders and ordering the RTC to hear Civil Case No. Q-95-24588, thus:





















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WHEREFORE, premises considered, the Regional Trial Court, National Capital Judicial Region, Quezon City, Branch 222 ishereby ORDERED to try Civil Case No. Q-95-24588 withoutcosts to plaintiff-appellant.24

The CA ruled that, as gleaned from the pleadings of the parties, theaction involved intra-corporate controversies as defined in Section 5 of Presidential Decree (PD) No. 902-A; as such, the RTC had no

jurisdiction over the action. However, in light of Rep. Act No. 8799which transferred to courts of general jurisdiction or the appropriate RTCcases over which the SEC had jurisdiction, the CA ordered the remand of

the case to the RTC, for the determination, among others, of theresolution of the issue of whether or not the private respondent was thereal party-in-interest. The Court of Appeals stated, thus:

However, viewed in the light of Republic Act No. 8799,otherwise known as the Securities Regulation Code, approved onJuly 19, 2000 which has effectively divested the Securities andExchange Commission of its quasi-judicial functions andtransferred them to the Regional Trial Court, We rule that the

latter may take cognizance of the instant case so as not toroundabout the judicial process, without prejudiced (sic) to its

being ventilated as to whether or not appellant The private

respondent Lim is a real party in interest to be determined duringthe trial on the merits before the appropriate court who has now

the jurisdiction over the case at bar .25

The motion for reconsideration of the petitioners was denied by the CA, per its Resolution dated August 8, 2001.

In their petition at bar, the petitioners argue that –

THE HONORABLE COURT OF APPEALS ERRED INHOLDING THAT THE TRIAL COURT HAS JURISDICTIONOVER THE SUBJECT CASE BY VIRTUE OF THE

EFFECTIVITY OF RA 8799 KNOWN AS SECURITIESREGULATION CODE.

26

The petitioners contend that the RTC had no jurisdiction over the private

respondent’s complaint because the case involved intra-corporatecontroversies. Since Rep. Act No. 8799 took effect only on August 8,2000, while the private respondent’s appeal in the CA was pending, itshould not be given retroactive effect. Furthermore, Section 5.2 of RA8799 proscribes the transfer of cases to the RTC; as such, the CA shouldhave dismissed the private respondent’s appeal without prejudice to her right to refile her complaint in the RTC. The petitioners argue that the

CA cannot order the case remanded to the RTC for the sake of convenience.

For her part, the private respondent asserts that the complaint does not

involve intra-corporate controversies and the RTC had jurisdiction over the action and the issues raised by the parties in their pleadings. The

private respondent, likewise, opines that there is nothing wrong with theCA’s ruling directing the RTC to hear the case to avoid any consequentdelay.

The sole issue in this case is whether or not the CA erred in remandingthe case to the RTC and directing it to decide and hear the complaint onits merits, in view of Rep. Act No. 8799 which took effect on August 8,2000, during the pendency of the case before it, effectively transferring

jurisdiction over cases involving intra-corporate controversies from theSEC to the RTC.

The Private Respondent’s Action in the RTC Does Not Involve an

I ntra- Corporate Dispute.

Jurisdiction over the subject matter is conferred by law.27

The nature of an action, as well as which court or body has jurisdiction over it, isdetermined based on the allegations contained in the complaint of the

plaintiff, irrespective of whether or not plaintiff is entitled to recover

















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upon all or some of the claims asserted therein.28 It cannot depend on thedefenses set forth in the answer, in a motion to dismiss, or in a motionfor reconsideration by the defendant.29

Section 5 of P.D. No. 902-A provides that the SEC shall have originaland exclusive jurisdiction over complaints, to hear and decide casesinvolving the following:

(a) Devices or schemes employed by or any acts of the board of directors, business associates, its officers or partners, amountingto fraud and misrepresentation which may be detrimental to theinterest of the public and/or stockholders, partners, members of associations registered with the Commission;

(b) Controversies arising out of intra-corporate or partnershiprelations, between and among stockholders, members, or associates; between any or all of them and the corporation,

partnership or association and the State insofar as it concernstheir individual franchise or right as such entity;

(c) Controversies in the election or appointment of directors,trustees, officers or managers of such corporations, partnership

or associations;

(d) Petitioners of corporations, partnerships or associations to be

declared in the state of suspension of payment in cases where thecorporation, partnership or association possesses sufficient property to cover all its debts but foresees the impossibility of meeting them when they fall due or in cases where thecorporation, partnership or assciation has no sufficient assets tocover its liabilities but is under the management of a

rehabilitation receiver or management committee created pursuant to this Decree.

30

However, Section 5.231 of Rep. Act No. 8799, transferred the erstwhileexclusive and original jurisdiction of the SEC over actions involvingintra-corporate controversies to the courts of general jurisdiction, or theappropriate RTC. All intra-corporate cases pending in the SEC were to

be transferred to the appropriate RTC. Congress thereby recognized theexpertise and competence of the RTC to take cognizance of and resolvecases involving intra-corporate controversies. In compliance with thelaw, the Court issued, on November 21, 2000 a Resolution designatingcertain branches of the RTC in the National Capital Region to try and

decide cases enumerated in Section 5 of P.D. No. 902-A. For QuezonCity cases, the Court designated Branches 46 and 93 of the RTC. Branch222 of the Quezon City RTC, which dismissed the complaint of the

private respondent, was not so designated by the Court. On March 13,2001, the Court approved the Interim Rules of Procedure for Intra-Corporate Controversies, which took effect on April 1, 2001.

To determine whether a case involves an intra-corporate controversy, andis to be heard and decided by the Branches of the RTC specificallydesignated by the Court to try and decide such cases, two elements must

concur: (a) the status or relationship of the parties; and (2) the nature of the question that is the subject of their controversy.32

The first element requires that the controversy must arise out of intra-

corporate or partnership relations between any or all of the parties andthe corporation, partnership or association of which they are

stockholders, members or associates; between any or all of them and the

corporation, partnership or association of which they are stockholders,members or associates, respectively; and between such corporation,

partnership or association and the State insofar as it concerns their individual franchises. The second element requires that the dispute

among the parties be intrinsically connected with the regulation of thecorporation.

33 If the nature of the controversy involves matters that are

purely civil in character, necessarily, the case does not involve an intra-corporate controversy. The determination of whether a contract is
























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simulated or not is an issue that could be resolved by applying pertinent provisions of the Civil Code.

34

In the present recourse, it is clear that the private respondent’s complaint

in the RTC is not an intra-corporate case. For one thing, the privaterespondent has never been a stockholder of Leslim, or of Speed for thatmatter. The complaint is one for the nullification of the deed of absolutesale executed by Leslim in favor of Speed over the property covered byTCT No. T-36617 in the name of Leslim, the cancellation of TCT No. T-116716 in the name of Speed, as well as the Secretary’s Certificate datedAugust 22, 1994. The private respondent alleged that since her deceased

husband, Pastor Lim, acquired the property during their marriage, thesaid property is conjugal in nature, although registered under the name of Leslim under TCT No. T-36617. She asserted that the petitionersconnived to deprive the estate of Pastor Lim and his heirs of their

possession and ownership over the said property using a falsifiedSecretary’s Certificate stating that the Board of Directors of Leslim had ameeting on August 19, 1995, when, in fact, no such meeting was held.Petitioner Lita Lim was never a stockholder of Leslim or a member of its

Board of Directors; her husband, petitioner Ireneo Marcelo was the Vice-President of Speed; and, petitioner Pedro Aquino was Leslim’s corporate

secretary. The private respondent further averred that the amount of P3,900,000.00, the purchase price of the property under the deed of absolute sale, was not paid to Leslim, and that petitioners SpousesMarcelo and petitioner Pedro Aquino contrived the said deed toconsummate their devious scheme and chicanery. The private respondent

concluded that the Deed of Absolute Sale was simulated; hence, null andvoid.

We are convinced that on the basis of the material allegations of the

complaint, the court a quo had jurisdiction over the case.

The Pri vate Respondent is a Real Party-in -I nterest as Plainti ff .

Rule 3, Section 2 of the Rules of Court, as amended, provides as follows:

SEC. 2. Parties in interest . — A real party in interest is the partywho stands to be benefited or injured by the judgment in the suit,or the party entitled to the avails of the suit. Unless otherwiseauthorized by law or these Rules, every action must be

prosecuted or defended in the name of the real party in interest.

The private respondent filed the complaint as one of the heirs of Pastor Lim, who died intestate on June 11, 1994. She was, in fact, the survivingspouse of the deceased, a compulsory heir by operation of law. Thegeneral rule under the law on succession is that successional rights aretransmitted from the moment of death of the decedent and compulsory

heirs are called upon to succeed by operation of law to the inheritancewithout the need of further proceedings. Under Article 776 of the NewCivil Code, inheritance includes all the properties, rights and obligationsof a party, not extinguished by his death.35 Although the private

respondent was appointed by the probate court as a special administratrixof the estate of Pastor Lim, she had the right, apart from her being aspecial administratrix, to file the complaint against the petitioners for thenullification of the deed of absolute sale, and TCT Nos. T-36617 and T-

116716. Indeed, in Emnace vs. Court of Appeals, et al.,36

we held that:

On the third issue, petitioner asserts that the surviving spouse of Vicente Tabanao has no legal capacity to sue since she was

never appointed as administratrix or executrix of his estate.Petitioner’s objection in this regard is misplaced. The surviving

spouse does not need to be appointed as executrix or

administratrix of the estate before she can file the action. She andher children are complainants in their own right as successors of

Vicente Tabanao. From the very moment of Vicente Tabanao’sdeath, his rights insofar as the partnership was concerned were

transmitted to his heirs, for rights to the succession aretransmitted from the moment of death of the decedent.

Whatever claims and rights Vicente Tabanao had against the

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operation of law, more particularly by succession, which is amode of acquisition by virtue of which the property, rights andobligations to the extent of the value of the inheritance of a

person are transmitted. Moreover, respondents became owners of

their respective hereditary shares from the moment VicenteTabanao died.

A prior settlement of the estate, or even the appointment of Salvacion Tabanao as executrix or administratrix, is notnecessary for any of the heirs to acquire legal capacity to sue. Assuccessors who stepped into the shoes of their decedent upon his

death, they can commence any action originally pertaining to thedecedent. From the moment of his death, his rights as a partner and to demand fulfillment of petitioner’s obligations as outlinedin their dissolution agreement were transmitted to respondents.

They, therefore, had the capacity to sue and seek the court’sintervention to compel petitioner to fulfill his obligations.

37

All the Compulsory Heirs of the Decedent and L eslim Corporation are

I ndi spensable Parti es.

In her complaint, the private respondent sought the nullification of theDeed of Absolute Sale executed by Leslim Corporation in favor of Speed, as well as TCT No. T-36617 under its name. Thus, LeslimCorporation is an indispensable party, and should be impleaded as a

party-defendant conformably to Section 7, Rule 3 of the Rules of Court,

as amended.

SEC. 7. Compulsory joinder of indispensable parties. — Partiesin interest without whom no final determination can be had of anaction shall be joined either as plaintiffs or defendants.

As Leslim Corporation was a party to the deed, its interests in the subjectof the action and the outcome thereof is such that the trial court could not

proceed without its presence. All actuations of the trial court subsequent

to the filing of the complaint are null and void, not only as to LeslimCorporation, but also as to the present parties.

38 All the compulsory heirs

of the deceased must also be impleaded as plaintiffs, being indispensable parties.39 Thus, the private respondent needs to amend her complaint in

the court a quo to include all indispensable parties; otherwise, her claimwould be dismissed.

IN LIGHT OF ALL THE FOREGOING, the petition is DISMISSED.The records are remanded to the Regional Trial Court of Quezon City,Branch 222, for further proceedings on the merits of the case.

SO ORDERED.

Quisumbing, (Acting Chairman), Austria-Martinez, and Tinga, JJ., concur.

Puno, (Chairman), J., on leave.

Footnotes

1 Penned by Associate Justice Mercedez-Gozo-Dadole,concurred in by Associate Justices Buenaventura L. Guerrero,Eugenio S. Labitoria, Hilarion Aquino and Wenceslao I. Agnir;

promulgated on September 15, 2000.










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SUPREME COURT

SECOND DIVISION

G.R. No. 154295. July 29, 2005

METROMEDIA TIMES CORPORATION and/or ROBINA

GOKONGWIE-PE, Petitioners,vs.Johnny Pastorin, Respondent.

D E C I S I O N

TINGA, J.:

At issue in this Petition for Review1 on certiorari under Rule 45 is

whether or not lack of jurisdiction over the subject matter of the case,heard and decided by the labor arbiter, may be raised for the first time

before the National Labor Relations Commission (NLRC) by a litigantwho had actively participated in the proceedings, which it belatedlyquestioned.

The facts, culled from the records, are as follows:

Johnny Pastorin (Respondent) was employed by Metromedia TimesCorporation (Petitioner) on 10 December 1990 as a Field

Representative/Collector. His task entailed the periodic collection of receivables from dealers of petitioner's newspapers. Prior to the subjectincident, respondent claimed to have received a termination letter dated 7

May 1998 from management terminating his services for tardinesseffective 16 June 1988. Respondent, member of Metro Media Times

Employees Union, was not dismissed due to the intervention of the labor union, the collective bargaining agent in the company.

In May 1998, he obtained a loan from one of the dealers whom he dealt

with, Gloria A. de Manuel (De Manuel), amounting to Nine ThousandPesos (P9,000.00). After paying One Thousand One Hundred Twenty-five Pesos (P1,125.00), respondent reneged on the balance of his loan.De Manuel wrote a letter dated 6 July 1998 to petitioner, and seekingassistance for collection on the remainder of the loan. She claimed thatwhen respondent became remissed on his personal obligation, he stoppedcollecting periodically the outstanding dues of De Manuel2

On 9 July 1998, petitioner sent a letter addressed to respondent, requiringan explanation for the transaction with De Manuel, as well as for hisfailure to pay back the loan according to the conditions agreed upon. In

his reply letter 3 dated 13 July 1998, respondent admitted having incurredthe loan, but offered no definitive explanation for his failure to repay thesame.

Petitioner, through a Memorandum4 dated 24 August 1998, imposed the

penalty of suspension on respondent for 4 days, from 27 August to 1September 1998, for violating Company Policy No. 2.17

5 and ordered his

transfer to the Administration Department.

On 2 September 1998, respondent wrote a letter 6 to petitioner, stating

that he wanted to sign a transfer memo before assuming his new position.

On September 7, 1998, he was handed the Payroll Change Advice7

(PCA), indicating his new assignment to the Traffic and Order Department of Metromedia. Nonetheless, respondent stopped reportingfor work. On 16 September 1998, he sent a letter 8 to petitioner

communicating his refusal to accept the transfer.

Respondent duly filed a complaint for constructive dismissal, non- payment of backwages and other money claims with the labor arbiter, a

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copy of which petitioner received on 28 September 1998. The complaintwas resolved in favor of respondent. In a Decision

9 dated 28 May 1999,

Labor Arbiter Manuel P. Asuncion concluded that respondent did notcommit insubordination or disobedience so as to warrant his transfer, and

that petitioner was not aggrieved by respondent’s failure to settle hisobligation with De Manuel. The dispositive portion read:

WHEREFORE, the respondents are hereby ordered to reinstate thecomplainant to his former position, with full backwages from the timehis salary was withheld until he is actually reinstated. As of this date, thecomplainant’s backwages has reached the sum of P97,324.17. The

respondents are further directed to pay the complainant his 13th month pay for 1998 in the sum of P3,611.89. The claims for allowance andunpaid commission are dismissed for lack of sufficient basis to make anaward.

SO ORDERED.10

Petitioner lodged an appeal with the NLRC, raising as a ground the lack of jurisdiction of the labor arbiter over respondent’s complaint.Significally, this issue was not raised by petitioner in the proceedings

before the Labor Arbiter. In its Decision11

dated 16 March 2001, the NLRC reversed the Labor Arbiter on the ground that thee latter had no jurisdiction over the case, it being a grievance issue properly cognizable by the voluntary arbitrator. The decretal portion of the NLRC Decision reads:

WHEREFORE, the decision under review is REVERSED and SETASIDE, and a new one entered, DISMISSING the complaint for lack of

jurisdiction.

SO ORDERED.12

The motion for reconsideration having been denied on 18 May 2001,respondent elevated the case before the Court of Appeals (CA) through a

petition for certiorar i13 under Rule 65.

The CA Fifteenth Division reversed the Decision of NLRC, andreinstated the earlier ruling of the Labor Arbiter. Adopting the doctrines

by this Court in the cases of Alfredo Marquez v. Sec. of Labor 14 and ABS-CBN Supervisors Employees Union Members v. ABS-CBN Broadcasting Corporation,

15 the CA ruled that the active participation of the party

against whom the action was brought, coupled with his failure to objectto the jurisdiction of the court or quasi-judicial body where the action is

pending, is tantamount to an invocation of that jurisdiction and awillingness to abide by the resolution of the case and will bar said partyfrom later on impugning the court or body’s jurisdiction. The appellatecourt then disposed the case in this wise:

WHEREFORE, foregoing premises considered, the petition havingmerit, in fact and in law, is hereby GIVEN DUE COURSE.Accordingly, the challenged resolution/decision and orders of publicrespondent NLRC are hereby REVERSED and SET ASIDE and the

decision of the Labor Arbiter dated May 28, 1999 REINSTATED

with a slight modification, that the 13th month pay be in the amountof P7,430.50. No costs.

SO ORDERED.16

Petitioner sought reconsideration17 of the above Decision18 but the CAdenied the motion in the assailed Resolution

19 dated 27 June 2002.

Hence, its recourse to this Court, elevating the following issues:

I.

WHETHER OR NOT METROMEDIA IS ESTOPPED FROM

QUESTIONING THE JURISDICTION OF THE LABOR ARBITER








































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OVER THE SUBJECT MATTER OF THE CASE FOR THE FIRSTTIME ONLY IN THEIR APPEAL BEFORE THE NLRC.

II.

WHETHER OR NOT THE AWARD OF 13TH MONTH PAY BY THE

LABOR ARBITER MAY BE MODIFIED, NOTWITHSTANDINGTHAT THE SAME WAS NEVER ASSIGNED AS AN ERROR.

Anent the first assignment of error, there are divergent jurisprudential

doctrines touching on this issue. On the one hand are the cases of Martinez v. Merced ,

20 Marquez v. Secretary of Labor ,

21 Ducat v. Court of

Appeals,22

Bayoca v. Nogales,23

Jimenez v. Patricia,24

Centeno v.Centeno,

25 and ABS-CBN Supervisors Employee Union Members v. ABS-

CBN Broadcasting Corporation,26

all adhering to the doctrine that a

party’s active participation in the actual proceedings before a courtwithout jurisdiction will estop him from assailing such lack of

jurisdiction. Respondent heavily relies on this doctrinal jurisprudence.

On the other hand, the cases of Dy v. NLRC ,27

La Naval Drug v. CA,28

De Rossi vs. CA

29 and Union Motors Corporation v. NLRC

30 buttress the

position of petitioner that jurisdiction is conferred by law and lack of

jurisdiction may be questioned at any time even on appeal.

The Court of Appeals adopted the principles in the cases of Martinez, Marquez and ABS-CBN in resolving the jurisdictional issue presented for

its resolution, to wit:

Indeed, we agree with petitioner that private respondent was estoppedfrom raising the question of jurisdiction before public respondent NLRC

and the latter gravely abused its discretion in addressing said question in private respondents’ favor. As early as Martinez vs. De la Merced , 174SCRA 182, the Supreme Court has clearly ruled thus: " For it has been

consistently held by this Court that while lack of jurisdiction may beassailed at any stage, a party’s active participation in the proceedings

before a court without jurisdiction will estop such party from assailing such lack of jurisdiction."

. . . .

The same principle was adopted by the Highest Tribunal in the case of

Alfredo Marquez vs. Sec. of Labor , 171 SCRA 337 and quoted in thelatter case of ABS-CBN Supervisors Employees Union Members vs. ABS-CBN Broadcasting Corporation, 304 SCRA 497, where it was ruled that:"The active participation of the party against whom the action wasbrought, coupled with his failure to object to the jurisdiction of the court or quasi-judicial body where the action is pending, is tantamount to aninvocation of that jurisdiction and a willingness to abide by theresolution of the case and will bar said party from later on impugning the court or body’s jurisdiction."

31

We rule differently. A cursory glance at these cases will lead one to theconclusion that a party who does not raise the jurisdictional question atthe outset will be estopped to raise it on appeal. However, a morecircumspect analysis would reveal that the cases cited by respondent donot fall squarely within the issue and factual circumstances of the instantcase. We proceed to demonstrate.

The notion that the defense of lack of jurisdiction may be waived byestoppel on the party invoking the same most prominently emerged inTijam v. Sibonghanoy.

32 Indeed, the Marquez case relied upon by the CA

is in turn grounded on Tijam, where We held that:

. . . a party can not invoke the jurisdiction of a court to secure affirmativerelief against his opponent and, after obtaining or failing to obtain suchrelief, repudiate or question that same jurisdiction (Dean vs. Dean, 136

Or. 694, 86 A.L.R. 79). In the case just cited, by way of explaining therule, it was further said that the question whether the court had

jurisdiction either of the subject-matter of the action or of the parties is barred from such conduct not because the judgment or order of the court









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is valid and conclusive as an adjudication, but for the reason that such a practice can not be tolerated — obviously for reasons of public policy.

Furthermore, it has also been held that after voluntarily submitting a

cause and encountering an adverse decision on the merits, it is too latefor the loser to question the jurisdiction or power of the court . . . And in

Littleton vs. Burges, 16 Wyo, 58, the Court said that it is not right for a party who has affirmed and invoked the jurisdiction of a court in a particular matter to secure an affirmative relief, to afterwards deny thatsame jurisdiction to escape a penalty.33

However, Tijam represented an exceptional case wherein the partyinvoking lack of jurisdiction did so only after fifteen (15) years, and at astage when the proceedings had already been elevated to the Court of Appeals. Even Marquez recognizes that Tijam stands as an exception,

rather than a general rule.34 The CA perhaps though felt comfortableciting Marquez owing to the pronouncement therein that the Court wouldnot hesitate to apply Tijam even absent the extraordinary circumstancestherein:

". . . where the entertainment of the jurisdictional issue at a belated stageof the proceedings will result in a failure of justice and render nugatorythe constitutional imperative of protection to labor."35

In this case, jurisdiction of the labor arbiter was questioned as early asduring appeal before the NLRC, whereas in Marquez , the question of

jurisdiction was raised for the first time only before this Court. Theviability of Marquez as controlling doctrine in this case is diminishedowing to the radically different circumstances in these two cases. Asimilar observation can be made as to the Bayoca and Jimenez cases.36

Neither do the other like-minded cases squarely settle the issue in favor of the respondent. In the case of Martinez , the issue is not jurisdiction byestoppel but waiver of preliminary conference. In that case, we said:

As pointed out by petitioners, private respondents had at least threeopportunities to raise the question of lack of preliminary conference first,when private respondents filed a motion for extension of time to file their

position paper; second, at the time when they actually filed their position

paper in which they sought affirmative relief from the Metropolitan TrialCourt; and third; when they filed a motion for reconsideration of theorder of the Metropolitan Trial Court expunging from the records the

position paper of private respondents, in which motion privaterespondents even urged the court to sustain their position paper. And yet,

in none of these instances was the issue of lack of preliminary conferenceraised or even hinted at by private respondents. In fine, these are actsamounting to a waiver of the irregularity of the proceedings. For it has

been consistently held by this Court that while lack of jurisdiction may be assailed at any stage, a party's active participation in the proceedings before a court without jurisdiction will estop such party from assailing

such lack of jurisdiction.37

The case of Ducat was categorical in saying that if the parties acquiescedin submitting an issue for determination by the trial court, they are

estopped from questioning the jurisdiction of the same court to pass uponthe issue. But this should be taken in the context of the "agreement" of

the parties. We quote from said case:

Petitioner’s filing of a Manifestion and Urgent Motion to Set Parametersof Computation is indicative of its conformity with the questioned order

of the trial court referring the matter of computation of the excess to

SGV and simultaneously thereafter, the issuance of a writ of possession.If petitioner thought that subject order was wrong, it could have taken

recourse to the Court of Appeals but petitioner did not. Instead hemanifested his acquiescence in the said order by seeking parameters

before the trial court. It is now too late for petitioner to question subjectorder of the trial court. Petitioner cannot be allowed to make a mockeryof judicial processes, by changing his position from one of the agreementto disagreement, to suit his needs. If the parties acquiesced in submittingan issue for determination by the trial court, they are estopped from





















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questioning the jurisdiction of the same court to pass upon the issue.Petitioner is consequently estopped from questioning subject order of thetrial court.38

Centeno involved the question of jurisdiction of the Department of Agrarian Reform Arbitration Board (DARAB). The Court did ruletherein that "participation by certain parties in the administrative

proceedings without raising any objection thereto, bars them from any jurisdictional infirmity after an adverse decision is rendered againstthem."39 Still, the Court did recognize therein that the movantsquestioning jurisdiction had actually sought and litigated for affirmative

reliefs before the DARAB in support of a submitted counterclaim. Nosimilar circumstance obtains in this case concerning the petitioner.

Evidently, none of these cited precedents squarely operates as stare

decisis on this case, involving as they did different circumstances. Thequestion now lies as to whether the precedents cited by petitioner aremore apropos to this case.

Petitioner seeks to convince this Court that the instant case falls squarelywithin the purview of this Court’s ruling in the case of Dy. Admittedly, adifferent factual mileu was present insofar as the questioned jurisdictionwas alleged to have been properly lodged in the SEC instead of NLRC.Yet the rationale employed by the Court therein warrants seriousconsideration. The aforementioned case was ruled in this wise:

. . . .More importantly, estoppel cannot be invoked to prevent this Courtfrom taking up the question of jurisdiction, which has been apparent onthe face of the pleadings since the start of litigation before the Labor Arbiter. It is well settled that the decision of a tribunal not vested withappropriate jurisdiction is null and void. Thus, in Calimlim vs. Ramirez ,

this Court held:

"A rule that had been settled by unquestioned acceptance and upheld indecisions so numerous to cite is that the jurisdiction of a court over the

subject matter of the action is a matter of law and may not be conferred by consent or agreement of the parties. The lack of jurisdiction of a courtmay be raised at any stage of the proceedings, even on appeal. Thisdoctrine has been qualified by recent pronouncements which stemmed

principally from the ruling in the cited case of Sibonghanoy. It is to beregretted, however, that the holding in said case had been applied tosituations which were obviously not contemplated therein. Theexceptional circumstances involved in Sibonghanoy which justified thedeparture from the accepted concept of non-waivability of objection to

jurisdiction has been ignored and, instead a blanket doctrine had beenrepeatedly upheld that rendered the supposed ruling in Sibonghanoy notas the exception, but rather the general rule, virtually overthrowing

altogether the time honored principle that the issue of jurisdiction is notlost by waiver or by estoppel.

. . . .

"It is neither fair nor legal to bind a party by the result of a suit or proceeding which was taken cognizance of in a court which lacks jurisdiction over the same irrespective of the attendant circumstances.

The equitable defense of estoppel requires knowledge or consciousnessof the facts upon which it is based. The same thing is true with estoppel

by conduct which may be asserted only when it is shown, among others,

that the representation must have been made with knowledge of the factsand that the party to whom it was made is ignorant of the truth of the

matter ( De Castro vs. Gineta, 27 SCRA 623). The filing of an action or

suit in a court that does not possess jurisdiction to entertain the same maynot be presumed to be deliberate and intended to secure a ruling which

could later be annulled if not favorable to the party who filed such suit or proceeding in a court that lacks jurisdiction to take cognizance of the

same, such act may not at once be deemed sufficient basis of estoppel. Itcould have been te result of an honest mistake or of divergentinterpretation of doubtful legal provisions. If any fault is to be imputed toa party taking such course of action, part of the blame should be placedon the court which shall entertain the suit, thereby lulling the parties into









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believing that they pursued their remedies in the correct forum. Under the rules, it is the duty of the court to dismiss an action ̀ whenever itappears that court has no jurisdiction over the subject matter.' (Section 2,Rule 9, Rules of Court) Should the Court render a judgment without

jurisdiction, such judgment may be impeached or annulled for lack of jurisdiction (Sec. 30, Rule 132, Ibid ), within ten (10) years from thefinality of the same (Art. 1144, par. 3, Civil Code)."

40

The jurisdiction of the Labor Arbiter was assailed in the cases of DeRossi v. NLRC41 and Union Motors Corporation v. NLRC42 duringappeal to the NLRC. Since the same circumstance obtains in this case,

the rulings therein, favorable as they are to the petitioner, are germane.

In De Rossi, this Court elucidated:

Petitioner maintains that MICC can not question now the issue of jurisdiction of the NLRC, considering that MICC did not raise this matter until after the case had been brought on appeal to the NLRC. However, ithas long been established as a rule, that jurisdiction of a tribunal, agency,or office, is conferred by law, and its lack of jurisdiction may bequestioned at any time even on appeal. In La Naval Drug Corporationvs. Court of Appeals, 236 SCRA 78, 90, this Court said:

"Lack of jurisdiction over the subject matter of the suit is yet another matter. Whenever it appears that the court has no jurisdiction over thesubject matter, the action shall be dismissed. This defense may beinterposed at any time, during appeal or even after final judgment. Suchis understandable, as this kind of jurisdiction is conferred by law and notwithin the courts, let alone the parties, to themselves determine or conveniently set aside."43

We held in the Union Motors Case:

The long-established rule is that jurisdiction over a subject matter isconferred by law. [ Ilaw at Buklod ng Manggaggawa v. NLRC , 219

SCRA 536 (1993); Atlas Developer & Steel Industries, Inc. v. Sarmiento Enterprises, Inc., 184 SCRA 153 (1990); Tijam v. Sibonghanoy, 23SCRA 29, 30 (1968)]. Estoppel does not apply to confer jurisdiction to atribunal that has none over a cause of action. Where it appears that the

court or tribunal has no jurisdiction, then the defense may be interposedat any time, even on appeal or even after final judgment. Moreover, the

principle of estoppel cannot be invoked to prevent this court from takingup the question of jurisdiction.44

The rulings in Lozon v. NLRC 45 addresses the issue at hand. This Courtcame up with a clear rule as to when jurisdiction by estoppel applies and

when it does not:

Lack of jurisdiction over the subject matter of the suit is yet another matter. Whenever it appears that the court has no jurisdiction over the

subject matter, the action shall be dismissed (Section 2, Rule 9, Rules of Court). This defense may be interposed at any time, during appeal( Roxas vs. Rafferty, 37 Phil. 957) or even after final judgment (Cruzcosavs. Judge Concepcion, et al., 101 Phil. 146). Such is understandable, asthis kind of jurisdiction is conferred by law and not within the courts, let

alone the parties, to themselves determine or conveniently set aside. In People vs. Casiano (111 Phil. 73, 93-94), this Court, on the issue of estoppel, held:

"The operation of the principle of estoppel on the question of jurisdictionseemingly depends upon whether the lower court actually had

jurisdiction or not. If it had no jurisdiction, but the case was tried anddecided upon the theory that it had jurisdiction, the parties are not

barred, on appeal, from assailing such jurisdiction, for the same'must exist as a matter of law, and may not be conferred by consentof the parties or by estoppel' (5 C.J.S., 861-863). However, if the

lower court had jurisdiction, and the case was heard and decided

upon a given theory, such, for instance, as that the court had no

jurisdiction, the party who induced it to adopt such theory will not

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lower court had jurisdiction. Here, the principle of estoppel applies.The rule that jurisdiction is conferred by law, and does not depend uponthe will of the parties, has no bearing thereon.46 (Emphasis supplied)

Verily, Lozon, Union Motors, Dy and De Rossi aptly resolve the jurisdictional issue obtaining in this case. Applying the guidelines in Lozon, the labor arbiter assumed jurisdiction when he should not. In fact,the NLR C correctly reversed the labor arbiter’s decision andratiocinated:

What appears at first blush to be an issue which pertains to the proprietyof complainant’s reassignment to another job on account of his havingcontracted a private loan, is one which may be considered as fallingwithin the jurisdiction of the Office of the Labor Arbiter. Nevertheless,since the complainant is a union member, he should be bound by the

covenants provided for in the Collective Bargaining Agreement.47

. . . .

Based on the foregoing considerations, it appears that the issue of validity of complainant’s reassignment stemmed from the exercise of amanagement prerogative which is a matter apt for resolution by a

Grievance Committee, the parties having opted to consider such as agrievable issue. Further, a review of the records would show that thematter of reassignment is one not directly related to the charge of complainant’s having committed an act which is inimical to respondents’

interest, since the latter had already been addressed to by complainant’sservice of a suspension order. The transfer, in effect, is one which

properly falls under Section 1, Article IV of the Collective BargainingAgreement and, as such, questions as to the enforcement thereof is onewhich falls under the jurisdiction of the labor arbiter."

48

In line with the cases cited above and applying the general rule thatestoppel does not confer jurisdiction, petitioner is not estopped fromassailing the jurisdiction of the labor arbiter before the NLRC on appeal.

Respondent relied solely on estoppel to oppose petitioner’s claim of lack of jurisdiction on the part of the labor arbiter. He adduced no other legalground in support of his contention that the Labor Arbiter had

jurisdiction over the case. Thus, his claim falls flat in light of our

pronouncement, and more so considering the NLRC’s correctobservation that jurisdiction over grievance issues, such as the proprietyof the reassignment of a union member falls under the jurisdiction of thevoluntary arbitrator.

Since jurisdiction does not lie with the Labor Arbiter, it is futile todiscuss about the computation of the 13th month pay.

WHEREFORE, the questioned decision of the Labor Arbiter and theCourt of Appeals are hereby REVERSED and SET ASIDE, and thedecision of the NLRC in dismissing the complaint for lack of jurisdiction

REINSTATED.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ.,concur.













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SUPREME COURT

SECOND DIVISION

G.R. No. 140954. April 12, 2005

HEIRS OF BERTULDO1 HINOG: Bertuldo Hinog II, Bertuldo

Hinog III, Bertuldo Hinog, Jr., Jocelyn Hinog, Bertoldo Hinog IV,

Bertoldo Hinog V, Edgardo Hinog, Milagros H. Pabatao, Lilian H.

King, Victoria H. Engracia, Terisita C. Hinog, Paz H. Besana,

Roberto C. Hinog, Vicente C. Hinog, Roel C. Hinog, Marilyn C.

Hinog, Bebot C. Hinog, lordes C. Hinog, Pablo Chiong, ArleneLanasang (All respresented by Bertuldo Hinog III), Petitioners,

vs.HON. ACHILLES MELICOR, in his capacity as Presiding Judge,

RTC, Branch 4, 7th Judicial Region, Tagbiliran City, Bohol, and

CUSTODIO BALANE, RUFO BALANE, HONORIO BALANE,and TOMAS BALANE, Respondents.

D E C I S I O N

AUSTRIA-MARTINEZ, J .:

Before us is a petition for certiorari and prohibition under Rule 65 of theRules of Court which assails the Orders dated March 22, 1999, August13, 1999 and October 15, 1999 of the Regional Trial Court, Branch 4, of Tagbilaran City, Bohol in Civil Case No. 4923.

The factual background of the case is as follows:

On May 21, 1991, private respondents Custodio, Rufo, Tomas andHonorio, all surnamed Balane, filed a complaint for "Recovery of

Ownership and Possession, Removal of Construction and Damages"against Bertuldo Hinog (Bertuldo for brevity). They alleged that: theyown a 1,399- square meter parcel of land situated in Malayo Norte,Cortes, Bohol, designated as Lot No. 1714; sometime in March 1980,

they allowed Bertuldo to use a portion of the said property for a period of ten years and construct thereon a small house of light materials at anominal annual rental of P100.00 only, considering the close relations of the parties; after the expiration of the ten-year period, they demanded thereturn of the occupied portion and removal of the house constructed

thereon but Bertuldo refused and instead claimed ownership of the entire property.

Accordingly, private respondents sought to oust Bertuldo from the premises of the subject property and restore upon themselves theownership and possession thereof, as well as the payment of moral and

exemplary damages, attorney’s fees and litigation expenses "in amounts justified by the evidence."

2

On July 2, 1991, Bertuldo filed his Answer. He alleged ownership of thedisputed property by virtue of a Deed of Absolute Sale dated July 2,

1980, executed by one Tomas Pahac with the knowledge and conformityof private respondents.3

After the pre-trial, trial on the merits ensued. On November 18, 1997, private respondents rested their case. Thereupon, Bertuldo started hisdirect examination. However, on June 24, 1998, Bertuldo died without

completing his evidence.

On August 4, 1998, Atty. Sulpicio A. Tinampay withdrew as counsel for Bertuldo as his services were terminated by petitioner Bertuldo HinogIII. Atty. Veronico G. Petalcorin then entered his appearance as new

counsel for Bertuldo.4

On September 22, 1998, Atty. Petalcorin filed a motion to expunge thecomplaint from the record and nullify all court proceedings on the

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ground that private respondents failed to specify in the complaint theamount of damages claimed so as to pay the correct docket fees; and thatunder Manchester Development Corporation vs. Court of Appeals,5 non-

payment of the correct docket fee is jurisdictional.6

In an amended motion, filed on October 2, 1998, Atty. Petalcorin further alleged that the private respondents failed to pay the correct docket feesince the main subject matter of the case cannot be estimated as it is for recovery of ownership, possession and removal of construction.

7

Private respondents opposed the motion to expunge on the followinggrounds: (a) said motion was filed more than seven years from theinstitution of the case; (b) Atty. Petalcorin has not complied with Section16, Rule 3 of the Rules of Court which provides that the death of theoriginal defendant requires a substitution of parties before a lawyer can

have legal personality to represent a litigant and the motion to expungedoes not mention of any specific party whom he is representing; (c)collectible fees due the court can be charged as lien on the judgment; and(d) considering the lapse of time, the motion is merely a dilatory schemeemployed by petitioners.8

In their Rejoinder, petitioners manifested that the lapse of time does notvest the court with jurisdiction over the case due to failure to pay thecorrect docket fees. As to the contention that deficiency in payment of docket fees can be made as a lien on the judgment, petitioners arguedthat the payment of filing fees cannot be made dependent on the result of

the action taken.9

On January 21, 1999, the trial court, while ordering the complaint to beexpunged from the records and the nullification of all court proceedingstaken for failure to pay the correct docket fees, nonetheless, held:

The Court can acquire jurisdiction over this case only upon the paymentof the exact prescribed docket/filing fees for the main cause of action,

plus additional docket fee for the amount of damages being prayed for in

the complaint, which amount should be specified so that the same can beconsidered in assessing the amount of the filing fees. Upon the complete

payment of such fees, the Court may take appropriate action in the lightof the ruling in the case of Manchester Development Corporation vs.

Court of Appeals, supra.10

Accordingly, on January 28, 1999, upon payment of deficiency docketfee, private respondents filed a manifestation with prayer to reinstate thecase.

11 Petitioners opposed the reinstatement

12 but on March 22, 1999,

the trial court issued the first assailed Order reinstating the case.13

On May 24, 1999, petitioners, upon prior leave of court,14

filed their supplemental pleading, appending therein a Deed of Sale dated

November 15, 1982.15 Following the submission of private respondents’opposition thereto,

16 the trial court, in its Order dated July 7, 1999,

denied the supplemental pleading on the ground that the Deed of Absolute Sale is a new matter which was never mentioned in the originalanswer dated July 2, 1991, prepared by Bertuldo’s original counsel andwhich Bertuldo verified; and that such new document is deemed waivedin the light of Section 1, Rule 917 of the Rules of Court. The trial court

also noted that no formal substitution of the parties was made because of the failure of defendant’s counsel to give the names and addresses of thelegal representatives of Bertuldo, so much so that the supposed heirs of

Bertuldo are not specified in any pleading in the case. 18

On July 14, 1999, petitioners manifested that the trial court having

expunged the complaint and nullified all court proceedings, there is novalid case and the complaint should not be admitted for failure to pay thecorrect docket fees; that there should be no case to be reinstated and nocase to proceed as there is no complaint filed.

19

After the submission of private respondents’ opposition20

and petitioners’rejoinder ,21 the trial court issued the second assailed Order on August 13,1999, essentially denying petitioners’ manifestation/rejoinder. The trialcourt held that the issues raised in such manifestation/rejoinder are





































































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practically the same as those raised in the amended motion to expungewhich had already been passed upon in the Order dated January 21,1999. Moreover, the trial court observed that the Order dated March 22,1999 which reinstated the case was not objected to by petitioners within

the reglementary period or even thereafter via a motion for reconsideration despite receipt thereof on March 26, 1999.22

On August 25, 1999, petitioners filed a motion for reconsideration23

butthe same was denied by the trial court in its third assailed Order datedOctober 15, 1999. The trial court held that the Manchester rule wasrelaxed in Sun Insurance Office, Ltd. vs. Asuncion.24 Noting that there

has been no substitution of parties following the death of Bertuldo, thetrial court directed Atty. Petalcorin to comply with the provisions of Section 16, Rule 3 of the Rules of Court. The trial court also reiteratedthat the Order dated March 22, 1999 reinstating the case was not assailed

by petitioners within the reglementary period, despite receipt thereof onMarch 26, 1999.

25

On November 19, 1999, Atty. Petalcorin complied with the directive of the trial court to submit the names and addresses of the heirs of

Bertuldo.26

On November 24, 1999, petitioners filed before us the present petitionfor certiorari and prohibition.27 They allege that the public respondentcommitted grave abuse of discretion in allowing the case to be reinstatedafter private respondents paid the docket fee deficiency since the trial

court had earlier expunged the complaint from the record and nullifiedall proceedings of the case and such ruling was not contested by the

private respondents. Moreover, they argue that the public respondentcommitted grave abuse of discretion in allowing the case to be filed anddenying the manifestation with motion to dismiss, despite the defect inthe complaint which prayed for damages without specifying the amounts,

in violation of SC Circular No. 7, dated March 24, 1988.

In their Comment, private respondents aver that no grave abuse of discretion was committed by the trial court in reinstating the complaintupon the payment of deficiency docket fees because petitioners did notobject thereto within the reglementary period. Besides, Atty. Petalcorin

possessed no legal personality to appear as counsel for the heirs of Bertuldo until he complies with Section 16, Rule 3 of the Rules of Court.

28

At the outset, we note the procedural error committed by petitioners indirectly filing the instant petition before this Court for it violates theestablished policy of strict observance of the judicial hierarchy of courts.

Although the Supreme Court, Court of Appeals and the Regional TrialCourts have concurrent jurisdiction to issue writs of certiorari,

prohibition, mandamus, quo warranto, habeas corpus and injunction,

such concurrence does not give the petitioner unrestricted freedom of choice of court forum.29 As we stated in People vs. Cuaresma:30

This Court's original jurisdiction to issue writs of certiorari is notexclusive. It is shared by this Court with Regional Trial Courts and withthe Court of Appeals. This concurrence of jurisdiction is not, however, to

be taken as according to parties seeking any of the writs an absolute,unrestrained freedom of choice of the court to which application therefor will be directed. There is after all a hierarchy of courts. That hierarchy isdeterminative of the venue of appeals, and also serves as a generaldeterminant of the appropriate forum for petitions for the extraordinary

writs. A becoming regard for that judicial hierarchy most certainlyindicates that petitions for the issuance of extraordinary writs against firstlevel ("inferior") courts should be filed with the Regional Trial Court,and those against the latter, with the Court of Appeals. A directinvocation of the Supreme Court’s original jurisdiction to issue thesewrits should be allowed only when there are special and important

reasons therefor, clearly and specifically set out in the petition. This is[an] established policy. It is a policy necessary to prevent inordinate

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those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Court’s docket.

31

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

the precious time of this Court; and (b) it would cause an inevitable andresultant delay, intended or otherwise, in the adjudication of cases, whichin some instances had to be remanded or referred to the lower court asthe proper forum under the rules of procedure, or as better equipped toresolve the issues because this Court is not a trier of facts.

32

Thus, this Court will not entertain direct resort to it unless the redressdesired cannot be obtained in the appropriate courts, and exceptional andcompelling circumstances, such as cases of national interest and of serious implications, justify the availment of the extraordinary remedy of writ of certiorari, calling for the exercise of its primary jurisdiction.

Exceptional and compelling circumstances were held present in thefollowing cases: (a) Chavez vs. Romulo33 on citizens’ right to bear arms;(b) Government of the United States of America vs. Purganan

34 on bail in

extradition proceedings; (c) Commission on Elections vs. Quijano- Padilla35 on government contract involving modernization and

computerization of voters’ registration list; (d) Buklod ng Kawaning EIIBvs. Zamora36 on status and existence of a public office; and (e) Fortichvs. Corona37 on the so-called "Win-Win Resolution" of the Office of the

President which modified the approval of the conversion to agro-industrial area.

In this case, no special and important reason or exceptional andcompelling circumstance analogous to any of the above cases has beenadduced by the petitioners so as to justify direct recourse to this Court.The present petition should have been initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts.Failure to do so is sufficient cause for the dismissal of the petition at bar.

In any event, even if the Court disregards such procedural flaw, the petitioners’ contentions on the substantive aspect of the case fail to invite judgment in their favor.

The unavailability of the writ of certiorari and prohibition in this case is borne out of the fact that petitioners principally assail the Order datedMarch 22, 1999 which they never sought reconsideration of, in due time,despite receipt thereof on March 26, 1999. Instead, petitioners wentthrough the motion of filing a supplemental pleading and only when thelatter was denied, or after more than three months have passed, did theyraise the issue that the complaint should not have been reinstated in the

first place because the trial court had no jurisdiction to do so, havingalready ruled that the complaint shall be expunged.

After recognizing the jurisdiction of the trial court by seeking affirmative

relief in their motion to serve supplemental pleading upon privaterespondents, petitioners are effectively barred by estoppel fromchallenging the trial court’s jurisdiction.

38 If a party invokes the

jurisdiction of a court, he cannot thereafter challenge the court’s jurisdiction in the same case.39 To rule otherwise would amount to

speculating on the fortune of litigation, which is against the policy of theCourt.40

Nevertheless, there is a need to correct the erroneous impression of thetrial court as well as the private respondents that petitioners are barredfrom assailing the Order dated March 22, 1999 which reinstated the case

because it was not objected to within the reglementary period or eventhereafter via a motion for reconsideration despite receipt thereof onMarch 26, 1999.

It must be clarified that the said order is but a resolution on an incidental

matter which does not touch on the merits of the case or put an end to the proceedings.41 It is an interlocutory order since there leaves somethingelse to be done by the trial court with respect to the merits of the case.

42

As such, it is not subject to a reglementary period. Reglementary period







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refers to the period set by the rules for appeal or further review of a final judgment or order, i.e., one that ends the litigation in the trial court.

Moreover, the remedy against an interlocutory order is generally not to

resort forthwith to certiorari, but to continue with the case in due courseand, when an unfavorable verdict is handed down, to take an appeal inthe manner authorized by law.43 Only when the court issued such order without or in excess of jurisdiction or with grave abuse of discretion andwhen the assailed interlocutory order is patently erroneous and theremedy of appeal would not afford adequate and expeditious relief willcertiorari be considered an appropriate remedy to assail an interlocutory

order .44

Such special circumstances are absolutely wanting in the presentcase.

Time and again, the Court has held that the Manchester rule has been

modified in Sun Insurance Office, Ltd. (SIOL) vs. Asuncion45 whichdefined the following guidelines involving the payment of docket fees:

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trialcourt with jurisdiction over the subject-matter or nature of the action.Where the filing of the initiatory pleading is not accompanied by

payment of the docket fee, the court may allow payment of the feeswithin a reasonable time but in no case beyond the applicable

prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third-party claimsand similar pleadings, which shall not be considered filed until andunless the filing fee prescribed therefor is paid. The court may also allow

payment of said fee within a reasonable time but also in no case beyondits applicable prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but,subsequently, the judgment awards a claim not specified in the pleading,

or if specified the same has been left for determination by the court, theadditional filing fee therefor shall constitute a lien on the judgment. Itshall be the responsibility of the Clerk of Court or his duly authorizeddeputy to enforce said lien and assess and collect the additional fee.

Plainly, while the payment of the prescribed docket fee is a jurisdictionalrequirement, even its non-payment at the time of filing does notautomatically cause the dismissal of the case, as long as the fee is paidwithin the applicable prescriptive or reglementary period, more so whenthe party involved demonstrates a willingness to abide by the rules

prescribing such payment.46 Thus, when insufficient filing fees were

initially paid by the plaintiffs and there was no intention to defraud thegovernment, the Manchester rule does not apply.47

Under the peculiar circumstances of this case, the reinstatement of the

complaint was just and proper considering that the cause of action of private respondents, being a real action, prescribes in thirty years,48 and private respondents did not really intend to evade the payment of the prescribed docket fee but simply contend that they could not be faultedfor inadequate assessment because the clerk of court made no notice of

demand or reassessment.49

They were in good faith and simply relied onthe assessment of the clerk of court.

Furthermore, the fact that private respondents prayed for payment of damages "in amounts justified by the evidence" does not call for thedismissal of the complaint for violation of SC Circular No. 7, dated

March 24, 1988 which required that all complaints must specify theamount of damages sought not only in the body of the pleadings but alsoin the prayer in order to be accepted and admitted for filing. Sun

Insurance effectively modified SC Circular No. 7 by providing that filingfees for damages and awards that cannot be estimated constitute liens onthe awards finally granted by the trial court.50

Thus, while the docket fees were based only on the real propertyvaluation, the trial court acquired jurisdiction over the action, and

































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judgment awards which were left for determination by the court or asmay be proven during trial would still be subject to additional filing feeswhich shall constitute a lien on the judgment. It would then be theresponsibility of the Clerk of Court of the trial court or his duly

authorized deputy to enforce said lien and assess and collect theadditional fees.51

It is worth noting that when Bertuldo filed his Answer on July 2, 1991,he did not raise the issue of lack of jurisdiction for non-payment of correct docket fees. Instead, he based his defense on a claim of ownership and participated in the proceedings before the trial court. It

was only in September 22, 1998 or more than seven years after filing theanswer, and under the auspices of a new counsel, that the issue of

jurisdiction was raised for the first time in the motion to expunge byBertuldo’s heirs.

After Bertuldo vigorously participated in all stages of the case before thetrial court and even invoked the trial court’s authority in order to ask for affirmative relief, petitioners, considering that they merely stepped intothe shoes of their predecessor, are effectively barred by estoppel from

challenging the trial court’s jurisdiction. Although the issue of jurisdiction may be raised at any stage of the proceedings as the same isconferred by law, it is nonetheless settled that a party may be barred from

raising it on ground of laches or estoppel.52

Moreover, no formal substitution of the parties was effected within thirty

days from date of death of Bertuldo, as required by Section 16, Rule 353 of the Rules of Court. Needless to stress, the purpose behind the rule onsubstitution is the protection of the right of every party to due process. Itis to ensure that the deceased party would continue to be properlyrepresented in the suit through the duly appointed legal representative of his estate.54 Non-compliance with the rule on substitution would render

the proceedings and judgment of the trial court infirm because the courtacquires no jurisdiction over the persons of the legal representatives or of

the heirs on whom the trial and the judgment would be binding.55

Thus,

proper substitution of heirs must be effected for the trial court to acquire jurisdiction over their persons and to obviate any future claim by any heir that he was not apprised of the litigation against Bertuldo or that he didnot authorize Atty. Petalcorin to represent him.

The list of names and addresses of the heirs was submitted sixteenmonths after the death of Bertuldo and only when the trial court directedAtty. Petalcorin to comply with the provisions of Section 16, Rule 3 of the Rules of Court. Strictly speaking therefore, before said compliance,Atty. Petalcorin had no standing in the court a quo when he filed his

pleadings. Be that as it may, the matter has been duly corrected by the

Order of the trial court dated October 15, 1999.

To be sure, certiorari under Rule 6556 is a remedy narrow in scope andinflexible in character. It is not a general utility tool in the legal

workshop.57 It offers only a limited form of review. Its principal functionis to keep an inferior tribunal within its jurisdiction.58 It can be invokedonly for an error of jurisdiction, that is, one where the act complained of was issued by the court, officer or a quasi-judicial body without or inexcess of jurisdiction, or with grave abuse of discretion which is

tantamount to lack or in excess of jurisdiction,59

not to be used for anyother purpose,60 such as to cure errors in proceedings or to correcterroneous conclusions of law or fact.61 A contrary rule would lead to

confusion, and seriously hamper the administration of justice.

Petitioners utterly failed to show that the trial court gravely abused its

discretion in issuing the assailed resolutions. On the contrary, it acted prudently, in accordance with law and jurisprudence.

WHEREFORE, the instant petition for certiorari is DISMISSED for lack of merit.

No costs.

SO ORDERED.













































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SUPREME COURT

THIRD DIVISION

G.R. No. 136325. July 29, 2005

MANUEL M. SERRANO, Petitioners,

vs.

EUGENIO C. DELICA, Respondents.

D E C I S I O N

SANDOVAL-GUTIERREZ, J.:

At bar is a petition for review on certiorar i 1 assailing the Decision

2 dated

September 30, 1998 and Resolution dated November 13, 1998 of the

Court of Appeals in CA-G.R. SP No. 46632, entitled "Manuel M. Serrano,

petitioner, vs. Hon. Alberto L. Lerma, Presiding Judge, Regional Trial

Court, Branch 256, Muntinlupa City, and Eugenio C. Delica, respondents.

The petition stemmed from the following facts:

On June 30, 1997, Eugenio C. Delica, respondent, filed with the Regional

Trial Court, Branch 256, Muntinlupa City, presided by Judge Alberto L.Lerma, a complaint for cancellation of Deeds of Sale, Transfer

Certificates of Title, Joint Venture Agreement, and damages, with prayer

for the issuance of a writ of preliminary injunction and temporary

restraining order, docketed as Civil Case No. 97-120. Impleaded as

defendants were Manuel M. Serrano, now petitioner, Manuel P. Blanco,

MBJ Land, Inc., and MARILAQUE Land, Inc.

The complaint alleges inter alia that respondent is the registered owner

of ten parcels of land situated in Bagbagan, Muntinlupa City, with a total

area of 2,062,475 square meters, more or less, covered by ten Transfer

Certificates of Title (TCT) Nos. S-12619 to S-12628 of the Registry of

Deeds, same city. On August 10, 1995, after having been "promised withfinancial bonanza" by petitioner and Manuel Blanco, respondent

executed in favor of the latter a special power of attorney. Blanco then

sold to MBJ Land, Inc. respondent’s three parcels of land covered by TCT

Nos. S-12625, S-12626 and S-12628. Thus, these titles were cancelled

and in lieu thereof, TCT Nos. 207282, 207283 and 207284 were issued in

the name of MBJ Land, Inc.

On December 4, 1996, MBJ Land, Inc. entered into a Joint Venture

Agreement with MARILAQUE Land, Inc. involving the three parcels of

land.

On December 23, 1996, petitioner Serrano again "unduly influenced,

coerced and intimidated" respondent into executing an affidavit

wherein he confirmed that he sold his remaining seven parcels of land,

covered by TCT Nos. S-12619 to S-126124 and S-12627, to petitioners.

Later, respondent found that these seven titles were cancelled and new

titles (TCT Nos. 209636 to 209642) were issued in petitioner’s name

based on a spurious Deed of Absolute Sale.

Respondent thus prayed in his complaint that the special power of

attorney, affidavit, the new titles issued in the names of petitioner and

MBJ Land, Inc., and contracts of sale be cancelled; and that petitioner

and his co-defendants be ordered to pay respondent, jointly and

severally, actual, moral and exemplary damages in the amount of

P200,000.00, as well as attorney’s fee of P200,000.00 and costs of

litigation. Respondent likewise prayed that, pending trial on the merits,

a temporary restraining order and a writ of preliminary injunction be

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possession of the parcels of land in question; and that after trial, the

writ of injunction be made permanent.

Petitioner then filed his answer with compulsory counterclaim, denying

the material allegations of the complaint.

Respondent later amended his complaint.

On August 5, 1997, the trial court issued a temporary restraining order

and on September 8, 1997, a preliminary injunction directing petitioner

and his co-defendants to immediately restore respondent to his

possession.

Petitioner then filed consolidated motions for reconsideration praying

that the complaint be dismissed for respondent’s failure to pay therequired docket fee; and that Judge Lerma be directed to inhibit himself

from hearing the case.

The trial court, in its Order dated January 7, 1998, denied petitioner’s

consolidated motions.

Petitioner seasonably filed with the Court of Appeals a petition for

certiorari and prohibition with application for a preliminary injunction

and temporary restraining order assailing the trial court’s twin Orders

dated September 8, 1997 ordering the issuance of a writ of preliminary

injunction; and denying his consolidated motions dated January 7, 1998.

Petitioner raised three issues: (a) whether respondent paid the correct

docket fee; (b) whether the trial court’s issuance of the writ of

preliminary injunction is in order; and (c) whether Judge Lerma should

inhibit himself from hearing the case.

On September 30, 1998, the Court of Appeals rendered a Decision

partially granting the petition by: (1) affirming the trial court’s ruling

that the docket fee was correctly paid; (2) setting aside the trial court’s

Order directing the issuance of a writ of preliminary injunction; and (3)

leaving the matter of inhibition to the discretion of Judge Lerma.

Petitioner then filed a motion for partial reconsideration of the Court of Appeals’ ruling that respondent correctly paid the docket fee and that

the motion for inhibition should be addressed to Judge Lerma’s sound

discretion.

In a Resolution dated November 13, 1998, the Appellate Court denied

the motion.

Hence the instant petition for review on certiorari .

The core issues for our resolution are:

1. Whether respondent paid the correct docket fee when he filed his

complaint in Civil Case No. 97-120; and

2. Whether the matter of inhibition should be addressed to Judge

Lerma’s discretion.

On the first issue, we cannot overemphasized the importance of paying

the correct docket fees. Such fees are intended to take care of court

expenses in the handling of cases in terms of cost of supplies, use of equipment, salaries and fringe benefits of personnel, etc., computed as

to man-hours used in the handling of each case. The payment of said

fees, therefore, cannot be made dependent on the result of the action

taken, without entailing tremendous losses to the government and to

the judiciary in particular.3

Thus, the rule is that "upon the filing of the pleading or other

application which initiates an action or proceeding, the fees prescribed





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therefor shall be paid in full."4 However, a litigant who is a pauper is

exempt from the payment of the docket fees. But the fees shall be a lien

on the judgment rendered in favor of said pauper litigant, unless the

court otherwise provides.5

It is not simply the filing of the complaint or appropriate initiatory

pleading, but the payment of the prescribed docket fees that vests a

trial court with jurisdiction over the subject matter or nature of the

action.6

In the case at bar, petitioner impugns the Court of Appeals’ ruling that

respondent’s complaint in Civil Case No. 97-120 is not capable of

pecuniary estimation and that, therefore, the docket fee is fixed at

P600.00 pursuant to Section 7(b)(1), Rule 141 of the Revised Rules of

Court.

We agree with petitioner that the Court of Appeals erred in issuing such

ruling. It should have considered the allegations of the complaint and

the character of the reliefs sought, the criteria in determining the

nature of an action.7

A careful examination of respondent’s complaint is that it is a real

action. In Paderanga vs. Buissan,8 we held that "in a real action, the

plaintiff seeks the recovery of real property, or, as stated in Section

2(a), Rule 4 of the Revised Rules of Court,9 a real action is one ‘affecting

title to real property or for the recovery of possession of , or for

partition or condemnation of, or foreclosure of a mortgage on a real

property.’"

Obviously, respondent’s complaint is a real action involving not only the

recovery of real properties, but likewise the cancellation of the titles

thereto.

Considering that respondent’s complaint is a real action, the Rule

requires that "the assessed value of the property, or if there is none,

the estimated value thereof shall be alleged by the claimant and shall

be the basis in computing the fees."10

We note, however, that neither the "assessed value" nor the "estimated

value" of the questioned parcels of land were alleged by respondent in

both his original and amended complaint. What he stated in his

amended complaint is that the disputed realties have a "BIR zonal

valuation" of P1,200.00 per square meter. However, the alleged "BIR

zonal valuation" is not the kind of valuation required by the Rule. It is

the assessed value of the realty.11

Having utterly failed to comply with

the requirement of the Rule that he shall allege in his complaint the

assessed value of his real properties in controversy, the correct docket

fee cannot be computed. As such, his complaint should not have beenaccepted by the trial court. We thus rule that it has not acquired

jurisdiction over the present case for failure of herein respondent to pay

the required docket fee. On this ground alone, respondent’s complaint

is vulnerable to dismissal.

Since the complaint is dismissible, the second issue on whether Judge

Lerma should inhibit himself from hearing the case has become moot

and academic.

WHEREFORE, the petition is GRANTED. The assailed Decision and

Resolution of the Court of Appeals in CA-G.R. SP No. 46632 are hereby

REVERSED. The complaint in Civil Case No. 97-120 is ordered DISMISSED

without prejudice.

SO ORDERED.

Panganiban, (Chairman), Carpio-Morales, and Garcia, JJ., concur.

































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FIRST DIVISION

G.R. No. 172217 September 18, 2009

SPOUSES LYDIA FLORES-CRUZ and REYNALDO I. CRUZ, Petitioners,

vs.

SPOUSES LEONARDO and ILUMINADA GOLI-CRUZ,

SPOUSES RICO and FELIZA DE LA CRUZ, SPOUSES BOY and

LANI DE LA CRUZ, ZENAIDA A. JACINTO and ROGELIO DELOS SANTOS, Respondents.

R E S O L U T I O N

CORONA, J.:

This is a petition for review on certiorar i1 of the August 23, 2005decision2 and April 5, 2006 resolution3 of the Court of Appeals (CA) inCA-G.R. CV No. 81099.

On December 15, 1999,4 petitioner spouses Lydia Flores-Cruz and

Reynaldo I. Cruz purchased a 5,209-sq. m. lot situated in Pulong Yantok,Angat, Bulacan5 from Lydia’s siblings, namely, Teresita, Ramon andDaniel (all surnamed Flores). Their father, Estanislao Flores, used to ownthe land as an inheritance from his parents Gregorio Flores and AnaMangahas. Estanislao died in 1995. Estanislao and, later, petitioners paidthe realty taxes on the land although neither of them occupied it.Petitioners sold portions thereof to third parties sometime in September

2000.6

After the death of Estanislao, petitioners found out that respondentspouses Leonardo and Iluminada Goli-Cruz et al. were occupying asection of the land. Initially, petitioner Lydia talked to respondents andoffered to sell them the portions they were occupying but the talks failed

as they could not agree on the price. On March 2, 2001, petitioners’lawyer sent respondents letters asking them to leave. These demands,however, were ignored. Efforts at barangay conciliation also failed.

7

Respondents countered that their possession of the land ranged from 10to 20 years. According to respondents, the property was alienable publicland.8 Prior to petitioners’ demand, they had no knowledge of

petitioners’ and their predecessor’s ownership of the land. They took steps to legitimize their claim and paid the realty tax on their respectiveareas for the taxable year 2002. Subsequently, however, the taxdeclarations issued to them were cancelled by the Provincial Assessors

Office and re-issued to petitioners.9

On August 6, 2001, petitioners filed a complaint for recovery of possession of the land in the Regional Trial Court (RTC) of Malolos,Bulacan, Branch 82.10 Respondents filed a motion to dismiss claiming,

among others, that the RTC had no jurisdiction over the case as it shouldhave been filed in the Municipal Trial Court (MTC) since it was asummary action for ejectment under Rule 70 of the Rules of Court. The

RTC denied the motion in an order dated November 9, 2001 .11

After trial, the RTC rendered a decision dated October 3, 2003 in favor

of petitioners and ordered respondents to vacate the land, and payattorney’s fees and costs of suit.121avvphi1

On appeal by respondents to the CA, the latter, in a decision datedAugust 23, 2005, ruled that the RTC had no jurisdiction over the action

for recovery of possession because petitioners had been dispossessed of the property for less than a year. It held that the complaint was one for unlawful detainer which should have been filed in the MTC. Thus, it

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ruled that the RTC decision was null and void. Reconsideration wasdenied on April 5, 2006.

Hence, this petition.

The issue for our resolution is whether the RTC had jurisdiction over this

case.

The petition has no merit.

It is axiomatic that the nature of the action – on which depends thequestion of whether a suit is within the jurisdiction of the court – is

determined solely by the allegations in the complaint13

and the law at thetime the action was commenced.14 Only facts alleged in the complaint

can be the basis for determining the nature of the action and the court’s

competence to take cognizance of it. 15 One cannot advert to anything notset forth in the complaint, such as evidence adduced at the trial, to

determine the nature of the action thereby initiated.16

Petitioners’ complaint contained the following allegations:

x x x x x x x x x

3. That, [petitioners] are owners of a piece of land known as Lot30-part, Cad. 349 located at Pulong Yantok, Angat, Bulacan asshown by a copy of Tax Declaration No. 99-01010-01141 made[an] integral [part] hereof as Annex "A";

4. That, said Lot No. 30-part was acquired through [purchase] on

December 15, 1999, as shown by [a] Deed of Absolute Sale of Unsubdivided Land made [an] integral [part] hereof as Annex"B, B-1 & B-2";

5. That, when [petitioners] inspected subject property, theyfound it to be occupied by at least five (5) households under thenames of herein [respondents], who, when asked about their right to stay within the premises replied that they were allowed

to live thereat by the deceased former owner;

6. That, [petitioners] informed the [respondents] that as far asthey are concerned, the latter’s occupancy was notcommunicated to them so it follows that they do not have anyright to remain within subject piece of land;

7. That, [respondents] seem to be unimpressed and made nomove to leave the premises or to come to terms with the[petitioners] so much so that [the latter] asked their lawyer towrite demand letters to each and everyone of the [respondents]

as shown by the demand letters dated March 2, 2001 madeintegral part hereof as Annex "C, C-1, C-2, C-3, & C-4";

8. That, there is no existing agreement or any document thatillustrate whatever permission, if any were given, that the[respondents] presented to [petitioners] in order to legitimize theclaim;

9. That, it is clear that [respondents] occupy portions of subject property either by stealth, stratagem, force or any unlawfulmanner which are just bases for ejectment;

x x x x x x x x x17

According to the CA, considering that petitioners claimed that

respondents were possessors of the property by mere tolerance only andthe complaint had been initiated less than a year from the demand tovacate, the proper remedy was an action for unlawful detainer which

should have been filed in the MTC.




















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We agree.

The necessary allegations in a complaint for ejectment are set forth inSection 1, Rule 70 of the Rules of Court.

18 Petitioners alleged that the

former owner (Estanislao, their predecessor) allowed respondents to liveon the land. They also stated that they purchased the property onDecember 15, 1999 and then found respondents occupying the property.Yet they demanded that respondents vacate only on March 2, 2001. Itcan be gleaned from their allegations that they had in fact permitted or tolerated respondents’ occupancy.

Based on the allegations in petitioners’ complaint, it is apparent that suchis a complaint for unlawful detainer based on possession by tolerance of the owner .19 It is a settled rule that in order to justify such an action, theowner’s permission or tolerance must be present at the beginning of the

possession.20

Such jurisdictional facts are present here.

There is another reason why petitioners’ complaint was not a proper action for recovery of possession cognizable by the RTC. It is no longer true that all cases of recovery of possession or accion publiciana lie withthe RTC regardless of the value of the property.21

When the case was filed in 2001, Congress had already approvedRepublic Act No. 7691

22 which expanded the MTC’s jurisdiction to

include other actions involving title to or possession of real property(accion publiciana and reinvindicatoria)

23 where the assessed value of

the property does not exceed P20,000 (or P50,000, for actions filed inMetro Manila).

24 Because of this amendment, the test of whether an

action involving possession of real property has been filed in the proper court no longer depends solely on the type of action filed but also on theassessed value of the property involved.

25 More specifically, since MTCs

now have jurisdiction over accion publiciana and accionreinvindicatoria (depending, of course, on the assessed value of the

property), jurisdiction over such actions has to be determined on the basis of the assessed value of the property.26a1f

This issue of assessed value as a jurisdictional element in accion publiciana was not raised by the parties nor threshed out in their pleadings.27 Be that as it may, the Court can motu proprio consider andresolve this question because jurisdiction is conferred only by law.28 It

cannot be acquired through, or waived by, any act or omission of the parties.29

To determine which court (RTC or MTC) has jurisdiction over theaction, the complaint must allege the assessed value of the real propertysubject of the complaint or the interest thereon.30 The complaint did notcontain any such allegation on the assessed value of the property. There

is no showing on the face of the complaint that the RTC had jurisdictionover the action of petitioners.31 Indeed, absent any allegation in thecomplaint of the assessed value of the property, it cannot be determinedwhether it is the RTC or the MTC which has original and exclusive

jurisdiction over the petitioners’ action.32

Moreover, the complaint was filed (August 6, 2001) within one year from the demand to vacate was made (March 2, 2001). Petitioners’dispossession had thus not lasted for more than one year to justify resort

to the remedy of accion publiciana.33

Since petitioners’ complaint made out a case for unlawful detainer whichshould have been filed in the MTC and it contained no allegation on theassessed value of the subject property, the RTC seriously erred in

proceeding with the case. The proceedings before a court without

jurisdiction, including its decision, are null and void.34 It follows that theCA was correct in dismissing the case.

WHEREFORE, the petition is DENIED.

Costs against petitioners.

SO ORDERED.




































































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SECOND DIVISION

G.R. No. 176339 January 10, 2011

DO-ALL METALS INDUSTRIES, INC., SPS. DOMINGO LIM andLELY KUNG LIM, Petitioners,

vs.

SECURITY BANK CORP., TITOLAIDO E. PAYONGAYONG,

EVYLENE C. SISON, PHIL. INDUSTRIAL SECURITY AGENCYCORP. and GIL SILOS, Respondents.

D E C I S I O N

ABAD, J.:

This case is about the propriety of awarding damages based on claimsembodied in the plaintiff’s supplemental complaint filed without prior

payment of the corresponding filing fees.

The Facts and the Case

From 1996 to 1997, Dragon Lady Industries, Inc., owned by petitioner spouses Domingo Lim and Lely Kung Lim (the Lims) took out loansfrom respondent Security Bank Corporation (the Bank) that totaledP92,454,776.45. Unable to pay the loans on time, the Lims assigned

some of their real properties to the Bank to secure the same, including a building and the lot on which it stands (the property), located at M. deLeon St., Santolan, Pasig City.1

In 1998 the Bank offered to lease the property to the Lims through petitioner Do-All Metals Industries, Inc. (DMI) primarily for businessalthough the Lims were to use part of the property as their residence.DMI and the Bank executed a two-year lease contract from October 1,

1998 to September 30, 2000 but the Bank retained the right to pre-terminate the lease. The contract also provided that, should the Bank decide to sell the property, DMI shall have the right of first refusal.

On December 3, 1999, before the lease was up, the Bank gave notice toDMI that it was pre-terminating the lease on December 31, 1999.Wanting to exercise its right of first refusal, DMI tried to negotiate with

the Bank the terms of its purchase. DMI offered to pay the Bank P8million for the property but the latter rejected the offer, suggesting P15million instead. DMI made a second offer of P10 million but the Bank declined the same.

While the negotiations were on going, the Lims claimed that theycontinued to use the property in their business. But the Bank posted atthe place private security guards from Philippine Industrial SecurityAgency (PISA). The Lims also claimed that on several occasions in

2000, the guards, on instructions of the Bank representatives TitolaidoPayongayong and Evylene Sison, padlocked the entrances to the placeand barred the Lims as well as DMI’s employees from entering the

property. One of the guards even pointed his gun at one employee andshots were fired. Because of this, DMI was unable to close several

projects and contracts with prospective clients. Further, the Lims alleged

that they were unable to retrieve assorted furniture, equipment, and personal items left at the property.

The Lims eventually filed a complaint with the Regional Trial Court(RTC) of Pasig City for damages with prayer for the issuance of atemporary restraining order (TRO) or preliminary injunction against the

Bank and its co-defendants Payongayong, Sison, PISA, and Gil Silos.2

Answering the complaint, the Bank pointed out that the lease contract

allowed it to sell the property at any time provided only that it gave DMI

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the right of first refusal. DMI had seven days from notice to exercise itsoption. On September 10, 1999 the Bank gave notice to DMI that itintended to sell the property to a third party. DMI asked for an extensionof its option to buy and the Bank granted it. But the parties could not

agree on a purchase price. The Bank required DMI to vacate andturnover the property but it failed to do so. As a result, the Bank’s buyer backed-out of the sale. Despite what happened, the Bank and DMIcontinued negotiations for the purchase of the leased premises but theycame to no agreement.

The Bank denied, on the other hand, that its guards harassed DMI and

the Lims. To protect its property, the Bank began posting guards at the building even before it leased the same to DMI. Indeed, this arrangement benefited both parties. The Bank alleged that in October of 2000, whenthe parties could not come to an agreement regarding the purchase of the

property, DMI vacated the same and peacefully turned over possession tothe Bank.

The Bank offered no objection to the issuance of a TRO since it claimedthat it never prevented DMI or its employees from entering or leaving the

building. For this reason, the RTC directed the Bank to allow DMI andthe Lims to enter the building and get the things they left there. The latter claimed, however, that on entering the building, they were unable to find

the movable properties they left there. In a supplemental complaint, DMIand the Lims alleged that the Bank surreptitiously took such properties,

resulting in additional actual damages to them of over P27 million.

The RTC set the pre-trial in the case for December 4, 2001. On that date,however, counsel for the Bank moved to reset the proceeding. The courtdenied the motion and allowed DMI and the Lims to present their evidence ex parte. The court eventually reconsidered its order but onlyafter the plaintiffs had already presented their evidence and were about to

rest their case. The RTC declined to recall the plaintiffs’ witnesses for cross- examination but allowed the Bank to present its evidence.3 This

prompted the Bank to seek relief from the Court of Appeals (CA) andeventually from this Court but to no avail .

4

During its turn at the trial, the Bank got to present only defendant

Payongayong, a bank officer. For repeatedly canceling the hearings andincurring delays, the RTC declared the Bank to have forfeited its right to

present additional evidence and deemed the case submitted for decision.

On September 30, 2004 the RTC rendered a decision in favor of DMIand the Lims. It ordered the Bank to pay the plaintiffs P27,974,564.00 asactual damages, P500,000.00 as moral damages, P500,000 as exemplarydamages, and P100,000.00 as attorney’s fees. But the court absolveddefendants Payongayong, Sison, Silos and PISA of any liability.

The Bank moved for reconsideration of the decision, questioning among

other things the RTC’s authority to grant damages considering plaintiffs’failure to pay the filing fees on their supplemental complaint. The RTCdenied the motion. On appeal to the CA, the latter found for the Bank,reversed the RTC decision, and dismissed the complaint as well as thecounterclaims.

5 DMI and the Lims filed a motion for reconsideration but

the CA denied the same, hence this petition.

The Issues Presented

The issues presented in this case are:

1. Whether or not the RTC acquired jurisdiction to hear andadjudicate plaintiff’s supplemental complaint against the Bank considering their failure to pay the filing fees on the amounts of damages they claim in it;

2. Whether or not the Bank is liable for the intimidation and

harassment committed against DMI and its representatives; and













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3. Whether or not the Bank is liable to DMI and the Lims for themachineries, equipment, and other properties they allegedly lostafter they were barred from the property.

The Court’s Rulings

One. On the issue of jurisdiction, respondent Bank argues that plaintiffs’failure to pay the filing fees on their supplemental complaint is fatal totheir action.

But what the plaintiffs failed to pay was merely the filing fees for their Supplemental Complaint. The RTC acquired jurisdiction over plaintiffs’action from the moment they filed their original complaint accompanied

by the payment of the filing fees due on the same. The plaintiffs’ non- payment of the additional filing fees due on their additional claims did

not divest the RTC of the jurisdiction it already had over the case.6

Two. As to the claim that Bank’s representatives and retained guardsharassed and intimidated DMI’s employees and the Lims, the RTC found

ample proof of such wrongdoings and accordingly awarded damages tothe plaintiffs. But the CA disagreed, discounting the testimony of the

police officers regarding their investigations of the incidents since such

officers were not present when they happened. The CA may be correct ina way but the plaintiffs presented eyewitnesses who testified out of

personal knowledge. The police officers testified merely to point out thatthere had been trouble at the place and their investigations yielded their

findings.

The Bank belittles the testimonies of the petitioners’ witnesses for having been presented ex parte before the clerk of court. But the ex partehearing, having been properly authorized, cannot be assailed as less

credible. It was the Bank’s fault that it was unable to attend the hearing.It cannot profit from its lack of diligence.

Domingo Lim and some employees of DMI testified regarding the Bank guards’ unmitigated use of their superior strength and firepower. Their testimonies were never refuted. Police Inspector Priscillo dela Paztestified that he responded to several complaints regarding shooting

incidents at the leased premises and on one occasion, he found DomingoLim was locked in the building. When he asked why Lim had beenlocked in, a Bank representative told him that they had instructions to

prevent anyone from taking any property out of the premises. It was onlyafter Dela Paz talked to the Bank representative that they let Lim out.7

Payongayong, the Bank’s sole witness, denied charges of harassment

against the Bank’s representatives and the guards. But his denial camemerely from reports relayed to him. They were not based on personalknowledge.1avvphil

While the lease may have already lapsed, the Bank had no businessharassing and intimidating the Lims and their employees. The RTC wastherefore correct in adjudging moral damages, exemplary damages, andattorney’s fees against the Bank for the acts of their representatives and

building guards.

Three. As to the damages that plaintiffs claim under their supplementalcomplaint, their stand is that the RTC committed no error in admittingthe complaint even if they had not paid the filing fees due on it sincesuch fees constituted a lien anyway on the judgment award. But thisafter-judgment lien, which implies that payment depends on a successful

execution of the judgment, applies to cases where the filing fees wereincorrectly assessed or paid or where the court has discretion to fix theamount of the award.8 None of these circumstances obtain in this case.

Here, the supplemental complaint specified from the beginning the actual

damages that the plaintiffs sought against the Bank. Still plaintiffs paidno filing fees on the same. And, while petitioners claim that they werewilling to pay the additional fees, they gave no reason for their omissionnor offered to pay the same. They merely said that they did not yet pay













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the fees because the RTC had not assessed them for it. But asupplemental complaint is like any complaint and the rule is that thefiling fees due on a complaint need to be paid upon its filing.9 The rulesdo not require the court to make special assessments in cases of

supplemental complaints.

To aggravate plaintiffs’ omission, although the Bank brought up thequestion of their failure to pay additional filing fees in its motion for reconsideration, plaintiffs made no effort to make at least a late payment

before the case could be submitted for decision, assuming of course thatthe prescription of their action had not then set it in. Clearly, plaintiffs

have no excuse for their continuous failure to pay the fees they owed thecourt. Consequently, the trial court should have treated their Supplemental Complaint as not filed.

Plaintiffs of course point out that the Bank itself raised the issue of non- payment of additional filing fees only after the RTC had rendered itsdecision in the case. The implication is that the Bank should be deemedto have waived its objection to such omission. But it is not for a party tothe case or even for the trial court to waive the payment of the additional

filing fees due on the supplemental complaint. Only the Supreme Courtcan grant exemptions to the payment of the fees due the courts and theseexemptions are embodied in its rules.

Besides, as correctly pointed out by the CA, plaintiffs had the burden of proving that the movable properties in question had remained in the

premises and that the bank was responsible for their loss. The onlyevidence offered to prove the loss was Domingo Lim’s testimony andsome undated and unsigned inventories. These were self-serving anduncorroborated.

WHEREFORE, the Court PARTIALLY GRANTS the petition andREINSTATES with modification the decision of the Regional TrialCourt of Pasig City in Civil Case 68184. The Court DIRECTSrespondent Security Bank Corporation to pay petitioners DMI and

spouses Domingo and Lely Kung Lim damages in the followingamounts: P500,000.00 as moral damages, P500,000.00 as exemplarydamages, and P100,000.00 for attorney’s fees. The Court DELETES theaward of actual damages of P27,974,564.00.

SO ORDERED.





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SUPREME COURT

Manila

FIRST DIVISION

G.R. No. 182403 March 9, 2010

ATTY. RESTITUTO G. CUDIAMAT, ERLINDA P. CUDIAMAT1 and

CORAZON D. CUDIAMAT, Petitioners,

vs.

BATANGAS SAVINGS AND LOAN BANK, INC., and THE REGISTER OF

DEEDS, NASUGBU, BATANGAS, Respondents.

D E C I S I O N

CARPIO MORALES, J.:

Petitioner Atty. Restituto Cudiamat and his brother Perfecto were the

registered co-owners of a 320 square meter parcel of land (the

property) in Balayan, Batangas, covered by TCT No. T-37889 of the

Register of Deeds of Nasugbu, Batangas. Restituto, who resided in

Ozamiz City with his wife, entrusted the custody of the title to who was

residing in Balayan.

In 1979, Perfecto, without the knowledge and consent of Restituto,

obtained a loan from respondent Batangas Savings and Loan Bank, Inc.

(the bank). To secure the payment of the loan, Perfecto mortgaged the

property for the purpose of which he presented a Special Power of

Attorney (SPA) purportedly executed by Restituto, with the marital

consent of his wife-herein co-petitioner Erlinda Cudiamat.

On June 19, 1991, Restituto was informed, via letter2 dated June 7, 1991

from the bank, that the property was foreclosed. He thus, by letter3

dated June 25, 1991, informed the bank that he had no participation in

the execution of the mortgage and that he never authorized Perfecto

for the purpose.

In the meantime, Perfecto died in 1990. In 1998, as Perfecto’s widow

petitioner Corazon was being evicted from the property, she and her co-

petitioner-spouses Restituto and Erlinda fi led on August 9, 1999 before

the Regional Trial Court (RTC) of Balayan a complaint4 "for quieting of

title with damages" against the bank and the Register of Deeds of

Nasugbu, docketed as Civil Case No. 3618, assailing the mortgage as

being null and void as they did not authorize the encumbrance of the

property.

In its Answer to the complaint, the bank, maintaining the validity of the

mortgage, alleged that it had in fact secured a title in its name, TCT No.

T-48405, after Perfecto failed to redeem the mortgage; that the Balayan

RTC had no jurisdiction over the case as the bank had been placed

under receivership and under liquidation by the Philippine Deposit

Insurance Corporation (PDIC); that PDIC filed before the RTC of Nasugbu

a petition for assistance in the liquidation of the bank which was

docketed as SP No. 576; and that jurisdiction to adjudicate disputed

claims against it is lodged with the liquidation court-RTC Nasugbu.

By Decision of January 17, 2006,5 Branch 9 of the Balayan RTC rendered

judgment, in the complaint for quieting of title, in favor of the plaintiffs-

herein petitioners. It ordered respondent Register of Deeds of Nasugbu

to cancel the encumbrance annotated on TCT No. T-37889, and to

cancel TCT No. T-48405 issued in the name of the bank and reinstate the

former title. It also directed the bank to return the property to

petitioner spouses Restituto and Erlinda and to pay P20,000 to all the

petitioners to defray the costs of suit.





















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The bank appealed to the Court of Appeals, contending, inter alia, that

the Balayan RTC had no jurisdiction over petitioners’ complaint for

quieting of title.

By the assailed Decision of December 21, 2007,6

the appellate court,ruling in favor of the bank, dismissed petitioners’ complaint for quieting

of title, without prejudice to the right of petitioners to take up their

claims with the Nasugbu RTC sitting as a liquidation court.

To the appellate court, the Balayan RTC, as a court of general

jurisdiction, should have deferred to the Nasugbu RTC which sits as a

liquidation court, given that the bank was already under receivership

when petitioners filed the complaint for quieting of title.

Petitioners’ Motion for Reconsideration having been denied by theappellate court by Resolution of March 27, 2008, they filed the present

petition for review on certiorari.1avvphi1

Assailing the appellate court’s ruling that the Balayan RTC had no

jurisdiction over their complaint, petitioners argue that their complaint

was filed earlier than PDIC’s petition for assistance in the liquidation;

and that the bank is now estopped from questioning the jurisdiction of

the Balayan RTC because it actively participated in the proceedings

thereat.

The petition is impressed with merit.

Estoppel bars the bank from raising the issue of lack of jurisdiction of

the Balayan RTC.

In Lozon v. NLRC,7 the Court came up with a clear rule on when

jurisdiction by estoppel applies and when it does not:

The operation of estoppel on the question of jurisdiction seemingly

depends on whether the lower court actually had jurisdiction or not. If it

had no jurisdiction, but the case was tried and decided upon the theory

that it had jurisdiction, the parties are not barred, on appeal, from

assailing such jurisdiction, for the same "must exist as a matter of law,and may not be conferred by the consent of the parties or by estoppel ."

However, if the lower court had jurisdiction, and the case was heard

and decided upon a given theory, such, for instance, as that the court

had no jurisdiction, the party who induced it to adopt such theory will

not be permitted, on appeal, to assume an inconsistent position – that

the lower court had jurisdiction… (underscoring supplied)

The ruling was echoed in Metromedia Times Corporation v. Pastorin.8

In the present case, the Balayan RTC, sitting as a court of general jurisdiction, had jurisdiction over the complaint for quieting of title filed

by petitioners on August 9, 1999. The Nasugbu RTC, as a liquidation

court, assumed jurisdiction over the claims against the bank only on

May 25, 2000, when PDIC’s petition for assistance in the liquidation was

raffled thereat and given due course.

While it is well-settled that lack of jurisdiction on the subject matter can

be raised at any time and is not lost by estoppel by laches, the present

case is an exception. To compel petitioners to re-file and relitigate their

claims before the Nasugbu RTC when the parties had already been given

the opportunity to present their respective evidence in a full-blown trial

before the Balayan RTC which had, in fact, decided petitioners’

complaint (about two years before the appellate court rendered the

assailed decision) would be an exercise in futility and would unjustly

burden petitioners.

The Court, in Valenzuela v. Court of Appeals,9 held that as a general rule,

if there is a judicial liquidation of an insolvent bank, all claims against

















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the bank should be filed in the liquidation proceeding. The Court in

Valenzuela, however, after considering the circumstances attendant to

the case, held that the general rule should not be applied if to order the

aggrieved party to refile or relitigate its case before the litigation court

would be "an exercise in futility." Among the circumstances the Courtconsidered in that case is the fact that the claimants were poor and the

disputed parcel of land was their only property, and the parties’ claims

and defenses were properly ventilated in and considered by the judicial

court.

In the present case, the Court finds that analogous considerations exist

to warrant the application of Valenzuela. Petitioner Restituto was 78

years old at the time the petition was filed in this Court, and his co-

petitioner-wife Erlinda died10

during the pendency of the case. And,

except for co-petitioner Corazon, Restituto is a resident of Ozamis City.

To compel him to appear and relitigate the case in the liquidation court-

Nasugbu RTC when the issues to be raised before it are the same as

those already exhaustively passed upon and decided by the Balayan RTC

would be superfluous.

WHEREFORE, the petition is GRANTED. The Decision of December 21,

2007 and Resolution dated March 27, 2008 of the Court of Appeals are

SET ASIDE. The Decision dated January 17, 2006 of the Regional Trial

Court of Balayan, Batangas, Branch 9 is REINSTATED.

SO ORDERED.

CONCHITA CARPIO MORALES Associate Justice

WE CONCUR:

REYNATO S. PUNO Chief JusticeChairperson

TERESITA J.LEONARDO-DE CASTRO

Associate Justice

LUCAS P. BERSAMIN Associate Justice

MARTIN S. VILLARAMA, JR. Associate Justice

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, I certify

that the conclusions in the above decision had been reached inconsultation before the case was assigned to the writer of the

opinion of the Court’s Division.

REYNATO S. PUNO Chief Justice





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FIRST DIVISION

[G.R. No. 131686. March 18, 2002]

ROUEL AD. REYES, petitioner, vs. SPOUSES PEPITO and MARTATORRES, HON. ELIEZER R. DELOS SANTOS, Executive Judge,

RTC, Angeles City, respondents.

D E C I S I O N

YNARES-SANTIAGO, J.:

This petition for certiorari originates from a case for ejectment withdamages concerning a parcel of landxiv[1] located in Mabalacat,

Pampanga. Sometime in 1993, petitioner Rouel AD. Reyes purchased thesubject property. At that time, the property was already occupied byseveral tenants who had constructed their homes and commercialestablishments thereon. These residents were informed that petitioner had acquired the property and were asked to vacate the same.

Respondent spouses Pepito and Marta Torres and Arcelli T. Manalorefused to vacate and remove their structure. Moreover, they erected onemore structure and leased the same to Lolita Ticse for a monthly rental of One Thousand Pesos (P1,000.00). Several written demandsxiv[2]

to

vacate addressed to the Torres couple and Manalo went unheeded, which prompted petitioner Reyes to file a complaint before the Barangay Luponfor conciliation proceedings. When no settlement was reached, acertificate to file action was issued to petitioner, who filed a case for ejectmentxiv[3] against respondents and Manalo before the MunicipalCircuit Trial Court of Mabalacat and Magalang, Pampanga.

On May 29, 1997, the MCTC rendered a decision, disposing of the caseas follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff andagainst herein defendants by ordering the latter:

1. To vacate the premises and to surrender the same peacefully to the

plaintiff or to any of his authorized representative/s;

2. To remove the structure/s standing on the premises;

3. To pay the plaintiff a rental of P1,000.00 a month commencing fromthe date of filing of the complaint on July 22, 1996, up to the time

defendants finally vacate the premises;

4. To pay the plaintiff the amount of P20,000.00 as attorney’s fees and to pay the cost of this suit.

Plaintiff’s claims for moral damages and defendants’ counterclaim arehereby denied for lack of proof.

SO ORDERED.xiv[4]

The Torres couple and co-defendant Manalo appealed to the RegionalTrial Court of Angeles City and filed the required supersedeas bond. Thecase was docketed as Civil Case No. 8746. On September 18, 1997, theRTC dismissed the appeal for failure to pay docket and other legalfees.xiv[5]

Respondents filed a motion for reconsideration,xiv[6] averring that theyhad paid the proper docket fees as early as August 27, 1997, annexingthereto the receipts. They manifested that it was the Clerk of Court of the

MCTC of Mabalacat and Magalang who neglected to attach the saidreceipts to the records of the case. The motion for reconsideration wasset for hearing at 2:00 in the afternoon of October 3, 1997.

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The day before the hearing, respondents filed a petition for certiorari and prohibitionxiv[7] with Branch 62 of the Regional Trial Court of AngelesCity, docketed as Civil Case No. 8794. Respondents assailed the writ of execution issued by the MCTC on September 30, 1997 despite their

filing of the supersedeas bond to stay execution of judgment pendingappeal. Nevertheless, the sheriff executed the writ and demolishedrespondents’ house and other structure on the subject property.

Respondents failed to appear at the hearing of their motion for reconsideration before Branch 59 of the RTC. The motion for reconsideration was denied and its earlier order dismissing the appeal

was sustained.

The following day, respondents filed another motion for reconsiderationxiv[8] of the order denying their first motion for

reconsideration. They alleged that their counsel arrived late at thehearing on October 3, 1997; that their counsel was at Branch 62 of theRTC Angeles City awaiting the issuance of a temporary restraining order in Civil Case No. 8794, which was issued only a few minutes before 2:00o’clock; that he thereafter rushed to Branch 59 to attend the hearing but

was delayed by heavy traffic due to a vehicular accident.

On November 17, 1997, the Regional Trial Court issued an Order,xiv[9] ruling as follows:

Without necessarily touching on the issue as to whether the appeal was

filed on time and it appearing that indeed there was payment of theappellate docket fees as evidenced by Official Receipt Nos. 5864393 and6674615, the Branch Clerk of Court of the Municipal Circuit Trial Court,Mabalacat-Magalang, Pampanga, is hereby ORDERED to immediatelytransmit the entire records of this case to this Court for inclusion in the

raffle.

SO ORDERED.

Petitioner filed a motion for reconsideration.xiv[10] While his motion for reconsideration remained unresolved, the case was raffled to Branch 57of the Regional Trial Court of Angeles City.xiv[11] On December 5, 1997, said court issued an Order xiv[12] directing the parties to submit

their respective memoranda, after which the case would be consideredsubmitted for decision.

Hence, the instant petition for certiorari. Petitioner argues thatrespondent court had lost jurisdiction when it dismissed the appeal andreturned the records of the case to the Municipal Circuit Trial Court; thatrespondent court erred in reinstating the appeal without first resolving the

motion for reconsideration; that respondent court erred in not citing private respondents in contempt for forum-shopping; and thatrespondents’ motion for reconsideration of the dismissal order was bereftof merit.

We find no grave abuse of discretion on the part of respondent court.

This Court is fully aware that procedural rules are not to be belittled or simply disregarded for these prescribed procedures insure an orderly andspeedy administration of justice. However, it is equally true thatlitigation is not merely a game of technicalities. Time and again, courtshave been guided by the principle that the rules of procedure are not to

be applied in a very rigid and technical manner, as rules of procedure areused only to help secure and not to override substantial justice.xiv[13] The law and jurisprudence grant to courts the prerogative to relax

compliance with procedural rules of even the most mandatorycharacter,xiv[14] mindful of the duty to reconcile both the need to put anend to litigation speedily and the parties’ right to an opportunity to beheard.xiv[15]

A more lenient interpretation is appropriate in this case especially because the dismissal of respondents’ appeal for failure to pay docketfees was manifestly erroneous. Through no fault of respondents, the clerk of court of the Municipal Circuit Trial Court failed to include and

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transmit to respondent Regional Trial Court the receipts of payment. Therecords show that respondents paid to the Clerk of Court of theMunicipal Circuit Trial Court the corresponding amounts well within thefive (5) days granted by the respondent court in its order requiring such

payment.xiv[16]

Contrary to petitioner’s contention, there was nothing respondents couldhave done about the situation since they had every right to rely on the

presumption that the clerk of court would do her bounden duty. Rule 40,Section 5 of the Rules of Court, as amended, provides:

Within the period for taking an appeal, the appellant shall pay to theclerk of the court which rendered the judgment or final order appealedfrom the full amount of the appellate court docket and other lawful fees.Proof of payment thereof shall be transmitted to the appellate court

together with the original record or the record on appeal, as the case may be. (Underscoring ours)

Clearly then, it was the responsibility of the clerk of court to attachrespondents’ proof of payment to the original record. Respondent court’serror in dismissing the appeal after having been inadvertently misled to

believe that respondents had failed to pay the docket fees was rectifiable.Respondents endeavored to set this right through their first motion for reconsideration.

It cannot be said that respondents’ second motion is strictly prohibited by

the rules for the matters raised in the first and second motions are notidentical, since they challenged two different orders of the respondentcourt.

To our mind, a strict application of the rule prohibiting a second motion

for reconsideration in this instance would be unreasonable. Both ordersdismissing the appeal were based on technicalities and not on the meritsof the case. Recognizing that litigations should, as much as possible, beresolved on the merits and not on technicality, the strict interpretation of

this exclusionary rule in this case would amount to a deprivation of the petitioner’s statutory right to appeal. The Court has in innumerableinstances held that the right of appeal is an essential part of the judicialsystem; hence, courts should proceed with caution so as not to unduly

and hastily divest a party of the right to appeal.xiv[17]

In the first place, were it not for the omission or negligence of the Clerk of the Municipal Court, the appeal would not have been dismissed, andthe same would have been resolved on the merits. The final resolution of this case has been delayed because of procedural or technical lapses.However, such procedural lapses on the part of respondents was neither

intended to delay nor did it result in prejudice to petitioner; hence,denying respondents’ appeal under the circumstances would be putting a

premium on technicalities at the expense of a just resolution of thecase.xiv[18]

Whenever non-compliance with the rules is not intended to delay thefinal disposition of the case, nor to cause prejudice to the adverse party,we have repeatedly held that the dismissal of an appeal on meretechnicalities may be stayed in the exercise of the court’s equity

jurisdiction.xiv[19] Thus, when respondent court set aside its earlier dismissal of r espondents’ appeal, it did not do so with grave abuse of discretion amounting to excess or lack of jurisdiction. Litigations should,

as much as possible, be decided on the merits and not ontechnicality.xiv[20] It is the court’s policy to encourage hearings of

appeals on the meritsxiv[21] so that every party-litigant is afforded the

amplest opportunity for the proper and just disposition of his cause,unhampered by the constraints of technicalities.xiv[22]

WHEREFORE, in view of all the foregoing, the petition isDISMISSED. The case is REMANDED to the Regional Trial Court of Angeles City, Pampanga, which is directed to resume proceedings in

Civil Case No. 8746.

SO ORDERED.

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