EXPROPRIATION In City of Manila v.

Serrano,36 this Court ruled that "hearing is still to be held to determine whether or not petitioner indeed complied with the re uirements provided in !ep. "ct #o. $%$&. ' ' ' (he determination of this uestion must await the hearing on the complaint for e'propriation, particularly the hearing for the condemnation of the properties sought to be e'propriated." )rom the foregoing, it is clear that an evidentiary hearing must be conducted if compliance with the re uirements for sociali*ed housing has been made. (his hearing, however, is not a hearing to determine if a writ of possession is to be issued, but whether there was compliance with the re uirements for sociali*ed housing. G.R. No. 142304 June 20, 2001

,pon motion by petitioner, the trial court issued an order, dated 9ctober &, /&&2, directing petitioner to deposit the amount of :l,2%1,%6/.00 e uivalent to the assessed value of the properties. /0 "fter petitioner had made the deposit, the trial court issued another order, dated .ecember /1, /&&2, directing the issuance of a writ of possession in favor of petitioner.ll !espondents filed a petition for certiorari with the Court of "ppeals, alleging that the e'propriation of +ot l7C would render respondents, who are actual occupants thereof, landlessB that +ot l7C is e'empt from e'propriation because !.". #o. $%$& provides that properties consisting of residential lands not e'ceeding 300 s uare meters in highly urbani*ed cities are e'empt from e'propriationsB that respondents would only receive around 6& s uare meters each after the partition of +ot l7C which consists of only 363./0 s uare metersB and that !.". #o. $%$& was not meant to deprive an owner of the entire residential land but only that in e'cess of 300 s uare meters. /% 9n #ovember /6, /&&&, the Court of "ppeals rendered a decision holding that +ot l7C is not e'empt from e'propriation because it undeniably e'ceeds 300 s uare meters which is no longer considered a small property within the framewor? of !.". #o. $%$&. >owever, it held that in accordance with the ruling in Filstream International Inc. v. Court of Appeals,/3 the other modes of ac uisition of lands enumerated in CC&7/0 of the law must first be tried by the city government before it can resort to e'propriation. "s petitioner failed to show that it had done so, the Court of "ppeals gave 4udgment for respondents and en4oined petitioner from e'propriating +ot /7C. (he dispositive portion of its decision reads8 D>-!-)9!-, in view of all the foregoing, the instant petition is hereby ;IE-# .,- C9,!S- and accordingly ;!"#(-.. (he 9rder, dated .ecember /1, /&&2, denying petitioner5s motion for reconsideration issued by the respondent !egional (rial Court of Manila, 3ranch /6, in Civil Case #o. &67 $%%2% is hereby !-E-!S-. and S-( "SI.-. +et a writ of in4unction issue perpetually en4oining the same respondent court from proceeding with the complaint for eminent domain in Civil Case #o. &67$%%2%, /6 In its resolution, dated )ebruary %3, %000, the Court of "ppeals li?ewise denied two motions for reconsideration filed by petitioner.l1 >ence this petition. :etitioner contends that the Court of "ppeals erred in 77 /A ;iving due course to the petition of the Serranos under !ule 61 notwithstanding its own declaration of the impropriety of the resort to the writ and filing thereof with the wrong appellate courtB %A Concluding that the 9rder of 9ctober &, /&&2 which authori*es the immediate entry of the City as the e'propriating agency into the property sough to be e'propriated upon the deposit of the provisionally fi'ed fair mar?et value thereof as tantamount to condemnation of the property without prior showing of compliance with the ac uisition of other lands enumerated in Sec. & of !.". $%$& ergo a violation of due process of the Serranos by the doctrinaire application of )I+S(!-"M ruling and corrollarily, 3A In prohibiting permanently, by writ of in4unction, the trial court from proceeding with a complaint for e'propriation of the City in Civil Case #o. &67$%%2%./6 De will deal with these contentions in the order they are presented.

CITY OF MANILA, petitioner, vs. OSCAR, FELICITAS, JOSE, BENJAMIN, ESTELITA, LEONORA AND ADELAIDA , "++ S,!#"M-. SERRANO, respondents. Men o!", J.# (his is a petition for review on certiorari of the decision, dated #ovember /6, /&&&, and resolution, dated )ebruary %3, %000, of the Court of "ppeals reversing the order, dated .ecember /1, /&&2, of the !egional (rial Court, 3ranch /6, Manila and perpetually en4oining it from proceeding with the petitioner5s complaint for eminent domain in Civil Case #o. &67$%%2%. (he facts are as follows8 9n .ecember %/, /&&3, the City Council of Manila enacted the 9rdinance #o. $233, authori*ing the e'propriation of certain properties in Manila 5s )irst .istrict in (ondo, covered by (C( #os. $026&, /01%0/, /01%0%, and /32%$3 of the !egister of .eeds of Manila, which are to be sold and distributed to ualified occupants pursuant to the +and ,se .evelopment :rogram of the City of Manila. 9ne of the properties sought to be e'propriated, denominated as +ot /7C, consists of 363./0 s uare meters. It is covered by (C( #o. /32%$% which was derived from (C( #o. $026& issued in the name of )eli*a .e ;uia. / "fter her death, the estate of )eli*a .e ;uia was settled among her heirs by virtue of a compromise agreement, which was duly approved by the !egional (rial Court, 3ranch 13, Manila in its decision, dated May 2, /&26. % In /&2&, "lberto .e ;uia, one of the heirs of )eli*a .e ;uia, died, as a result of which his estate, consisting of his share in the properties left by his mother, was partitioned among his heirs. +ot /7C was assigned to -dgardo .e ;uia, one of the heirs of "lberto .e ;uia.3 9n "pril /1, /&&6, -dgardo .e ;uia was issued (C( #o. %/11&3, covering +ot /7C. 6 9n <uly %&, /&&6, the said property was transferred to +ee =uan >ui, in whose name (C( #o. %/$0/2 was issued. 1 (he property was subse uently sold on <anuary %6,/&&6 to .emetria .e ;uia to whom (C( #o. %%6062 was issued. 6 9n September %6, /&&$, petitioner City of Manila filed an amended complaint for e'propriation, doc?eted as Civil Case #o. &67$%%2%, with the !egional (rial Court, 3ranch /6, Manila, against the supposed owners of the lots covered by (C( #os. $026& @including +ot /7CA, /01%0/, /01%0% and /32%$3, which included herein respondents 9scar, )elicitas, <ose, 3en4amin, -stelita, +eonora, "delaida, all surnamed are Serrano. $ 9n #ovember /%, /&&$, respondents filed a consolidated answer, in which they alleged that their mother, the late .emetria .e ;uia, had ac uired +ot l7C from +ee =ian >uiB that they had been the bona fide occupants of the said parcel of land for more than 60 yearsB that the e'propriation of +ot l7C would result in their disclosure, it being the only residential land left to them by their deceased motherB and that the said lot was e'empt from e'propriation because dividing the said parcel of land among them would entitle each of them to only about 10 s uare meters of land. !espondents, therefore, prayed that 4udgment be rendered declaring +ot l7C e'empt from e'propriation and ordering the cancellation of the notice annotated on the bac? of (C( #o. %%6062, 2 regarding the pendency of Civil Case #o. &67$%%2%. for eminent domain filed by petitioner.&

First. :etitioner contends that the respondents5 remedy against the order of the trial court granting a writ of possession was not to file a petition for certiorari under !ule 61 but a petition for review under !ule 61 which should have been filed in the Supreme Court./$ (his contention has no merit. " petition for review under !ule 61 is a mode of appeal. "ccordingly, it could not have been resorted to by the respondents inasmuch as the order of the trial court granting a writ of possession was merely interlocutory from which no appeal could be ta?en. !ule 61, C/ of the /&&$ !ules for Civil :rocedure applies only to final 4udgments or orders of the Court of "ppeals, the Sandiganbayan, and the !egional (rial Court. 9n the other hand, a petition for certiorari is the suitable remedy in view of !ule 61, C/ which provides8

Dhen any tribunal, board or officer e'ercising 4udicial or uasi74udicial functions has acted without or in e'cess of its or his 4urisdiction, or with grave abuse of discretion amounting to lac? or e'cess of 4urisdiction, and there is no appeal, nor any plain, speedy, and ade uate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainly and praying that 4udgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as laws and 4ustice may re uire. !espondents5 petition before the Court of "ppeals alleged that the trial court had acted without or in e'cess of its 4urisdiction or with grave abuse of discretion amounting to lac? of 4urisdiction in issuing the order, dated .ecember /1, /&&2, resolving that +ot /7C is not e'empt from e'propriation and ordering the issuance of the writ of possession in favor of petitioner./2 Second. :etitioner faults the Court of "ppeals for deciding issues not raised in the trial court, specifically the uestion of whether or not there was compliance with CC& and /0 of !". #o. $%$&. It argues that the sole defense set up by respondents in their petition before the Court of "ppeals was that their property was e'empted from e'propriation because it comes within the purview of a "small property" as defined by !.". #o. $%$& . "ccordingly, the Court of "ppeals should not have applied the doctrine laid down by this Court in the Filstream/& case as such issue was not raised by respondents in their petition before the Court of "ppeals. (his contention li?ewise has no merit. In their petition before the Court of "ppeals, respondents raised the following issues8 /. Dhether or not the sub4ect +ot /7C with an area of 363./0 s uare meters covered by (.C.(. #o. %%6062 in the name of petitioners5 mother, the late .emetria F.e ;uiaG Serrano, may be lawfully e'propriated "for the public purpose of providing landless occupants thereof homelots of their own under the "land7for7the landless program of respondent City of Manila." %. Dhether or not the e'propriation of the said +ot l7C by respondent City of Manila violates the e ual protection clause of the Constitution, since petitioners, with the e'emption of petitioner 9scar ;. Serranno, who are li?ewise landless are actual occupants hereof. 3. Dhether or not +ot /7C is or may be e'empted from e'propriation pursuant to !.". $%$&, otherwise ?nown as the ,rban .evelopment and >ousing "ct of /&&%. %0 It is clear that respondents raised in issue the propriety of the e'propriation of their property in connection with !". #o. $%$&. "lthough what was discussed at length in their petition before the Court of "ppeals was whether or not the said property could be considered a small property within the purview of the e'emption under the said law, the other provisions of the said law concerning e'propriation proceedings need also be loo?ed into to address the first issue raised by the respondents and to determine whether or not e'propriation of +ot /7C was proper under the circumstances. (he Court of "ppeals properly considered relevant provisions of ! ". #o.$%$& to determine the issues raised by respondents. Dhether or not it correctly applied the doctrine laid down in Filstream in resolving the issues raised by respondents, however, is a different matter altogether, and this brings us to the ne't point. Third. :etitioner contends that the Court of "ppeals erroneously presumed that +ot /7C has been ordered condemned in its favor when the fact is that the order of the trial court, dated .ecember /1, /&&2, merely authori*ed the issuance of a writ of possession and petitioner5s entry into the property pursuant to !ule 6$, C%. "t that stage, it was premature to determine whether the re uirements of !". #o. $%$&, CC& 7 /0 have been complied with since no evidentiary hearing had yet been conducted by the trial court. %/ (his contention is well ta?en. !ule 6$, C% provides8 ,pon the filing of the complaint or at any time thereafter and after due notice to the defendant, the plaintiff shall have the right to ta?e or enter upon possession of the real property involved if he deposits with the

authori*ed government depository an amount e uivalent to the assessed value of the property for purposes of ta'ation to be held by such ban? sub4ect to the orders of the court. Such deposit shall be in money, unless in lieu thereof the court authori*es the deposit of a certificate of deposit of a government ban? of the !epublic of the :hilippines payable on demand to the authori*ed government depositary. If personal property is involved, its value shall be provisionally ascertained and the amount to be deposited shall be fi'ed by the court. "fter such deposit is made the court shall order the sheriff or other proper officer to forthwith place the plaintiff in possession of the property involved and promptly submit a report thereof to the court with service of copies to the parties. (hus, a writ of e'ecution may be issued by a court upon the filing by the government of a complaint for e'propriation sufficient in form and substance and upon deposit made by the government of the amount e uivalent to the assessed value of the property sub4ect to e'propriation. ,pon compliance with these re uirements, the issuance of the writ of possession becomes ministerial.%% In this case, these re uirements were satisfied and, therefore, it became the ministerial duty of the court to issue the writ of possession. (he Court of "ppeals, however, ruled that petitioner failed to comply with the re uirements laid down in CC& 7 /0 of !". #o. $%$& and reiterated in Filstream ruling. (his is error. (he ruling in the Filstream was necessitated because an order of condemnation had already been issued by the trial court in that case. (hus, the 4udgment in that case had already become final. In this case, the trial court has not gone beyond the issuance of a writ of possession. >earing is still to be held to determine whether or not petitioner indeed complied with the re uirements provided in !". #o. $%$&. It is, therefore, premature at this stage of the proceedings to find that petitioner resorted e'propriation without first trying the other modes of ac uisition enumerated in C /0 of the law. !". #o $%$& in pertinent parts provide8 S-C. &. Priorities in the Acquisition of Land +ands for sociali*ed housing shall be ac uired in the following order8 @aA (hose owned by the ;overnment or any of its subdivisions, instrumentalities, or agencies, including government owned and controlled corporations and their subsidiariesB @bA "lienable lands of the public domainB @cA ,nregistered or abandoned and idle landsB @dA (hose within the declares "reas or :riority .evelopment, Hone Improvement :rogram sites, and Slum Improvement and !esettlement :rograms sites which have not yet been ac uiredB @eA 3agong +ipunan Improvement and Sites and Services or 3+ISS sites which have not yet been ac uired, andB @fA :rivately7owned lands. Dhere on7site development is found more practicable and advantageously to the beneficiaries, the priorities mentioned in this section shall not apply. (he local government units shall give budgetary priority on7site development of government lands.

S-C. /0. Modes of Lands Acquisition. 77 (he modes of ac uiring lands for purposes of this "ct shall include, amount others, community mortgage, land swapping, land assembly or consolidation, land ban?ing, donation to the ;overnment, 4oint7venture agreement, negotiated purchase, and e'propriation8 Provided, ho ever! (hat e'propriation shall be resorted to only when other modes of ac uisition have been e'hausted8 Provided, further! (hat were e'propriation is resorted to, parcels of land owned by small property owners shall be e'empted for purposes of this "ct8 Provided finall", (hat abandoned property, as herein defined, shall be reverted and escheated to the State in a proceeding analogous to the procedure laid down in !ule &/ of the !ules of Court. )or the purpose of sociali*ed housing, government7owned and foreclosed properties shall be ac uired by the local government units, or by the #ational >ousing "uthority primarily through negotiated purchase8Provided, (hat ualified beneficiaries who are actual occupants of the lands shall be given the right of first refusal. Dhether petitioner has complied with these provisions re uires the presentation of evidence, although in its amended complaint petitioner did allege that it had complied with the re uirements. %3 (he determination of this uestion must await that hearing on the complaint for e'propriation, particularly the hearing for the condemnation of the properties sought to be e'propriated. -'propriation proceedings consist of two stages8 first, condemnation of the property after it is determined that its ac uisition will be for a public purpose or public use and, second, the determination of 4ust compensation to be paid for the ta?ing of the private property to be made by the court with the assistance of not more than three commissioners.%6 D>-!-)9!-, the decision, dated #ovember /6,/&&&, and resolution, dated )ebruary %3, %000, of the Court of "ppeals are !-E-!S-. and the order of the trial court, dated .ecember /1,/&&2, is !-I#S("(-.. (his case is !-M"#.-. to the trial court to further proceedings.#$ phi#.n%t S9 9!.-!-.

3efore us is a petition for review/ of the 30 March /&&% .ecision% and /6 "ugust /&&% !esolution of the Court of "ppeals in C"7;.!. CE #o. /6&30. (he Court of "ppeals affirmed the .ecision 3 of the !egional (rial Court, 3ranch /$, (abaco, "lbay in Civil Case #o. (711%. T+e An(e,e en(' :etitioner #ational :ower Corporation @"#:C"A is a public corporation created to generate geothermal, hydroelectric, nuclear and other power and to transmit electric power nationwide. 6 #:C is authori*ed by law to ac uire property and e'ercise the right of eminent domain. :rivate respondent "ntonino :obre @":obre"A is the owner of a 62,&6& s uare7meter land @":roperty"A located in 3arangay 3ano, Municipality of (iwi, "lbay. (he :roperty is covered by (C( #o. 606$ and Subdivision :lan //7&$0&. In /&63, :obre began developing the :roperty as a resort7subdivision, which he named as "(iwi >ot Springs !esort Subdivision." 9n /% <anuary /&66, the then Court of )irst Instance of "lbay approved the subdivision plan of the :roperty. (he !egister of .eeds thus cancelled (C( #o. 606$ and issued independent titles for the approved lots. In /&6&, :obre started advertising and selling the lots. 9n 6 "ugust /&61, the Commission on Eolcanology certified that thermal mineral water and steam were present beneath the :roperty. (he Commission on Eolcanology found the thermal mineral water and steam suitable for domestic use and potentially for commercial or industrial use. #:C then became involved with :obre5s :roperty in three instances. )irst was on /2 )ebruary /&$% when :obre leased to #:C for one year eleven lots from the approved subdivision plan. Second was sometime in /&$$, the first time that #:C filed its e'propriation case against :obre to ac uire an 2,3//.60 s uare7meter portion of the :roperty. 1 9n %3 9ctober /&$&, the trial court ordered the e'propriation of the lots upon #:C5s payment of :%1 per s uare meter or a total amount of :%0$,$&0. #:C began drilling operations and construction of steam wells. Dhile this first e'propriation case was pending, #:C dumped waste materials beyond the site agreed upon by #:C with :obre. (he dumping of waste materials altered the topography of some portions of the :roperty. #:C did not act on :obre5s complaints and #:C continued with its dumping. (hird was on / September /&$&, when #:C filed its second e'propriation case against :obre to ac uire an additional 1,116 s uare meters of the :roperty. (his is the sub4ect of this petition. #:C needed the lot for the construction and maintenance of #aglagbong Dell Site )7%0, pursuant to :roclamation #o. $3& 6 and !epublic "ct #o. 10&%.$ #:C immediately deposited :1,166.36 with the :hilippine #ational 3an?. (he deposit represented /0I of the total mar?et value of the lots covered by the second e'propriation. 9n 6 September /&$&, #:C entered the 1,116 s uare7meter lot upon the trial court5s issuance of a writ of possession to #:C. 9n /0 .ecember /&26, :obre filed a motion to dismiss the second complaint for e'propriation. :obre claimed that #:C damaged his :roperty. :obre prayed for 4ust compensation of all the lots affected by #:C5s actions and for the payment of damages. 9n % <anuary /&21, #:C filed a motion to dismiss the second e'propriation case on the ground that #:C had found an alternative site and that #:C had already abandoned in /&2/ the pro4ect within the :roperty due to :obre5s opposition.

Dhen private property is rendered uninhabitable by an entity with the power to e'ercise eminent domain, the ta?ing is deemed complete. G.R. No. 10$%04 Au&u'( 12, 2004

NATIONAL PO)ER CORPORATION, petitioner, vs. CO*RT OF APPEALS "n ANTONINO POBRE, respondents.

.-CISI9#

CARPIO, J.# T+e C"'e

9n 2 <anuary /&21, the trial court granted #:C5s motion to dismiss but the trial court allowed :obre to adduce evidence on his claim for damages. (he trial court admitted :obre5s e'hibits on the damages because #:C failed to ob4ect. 9n 30 "ugust /&21, the trial court ordered the case submitted for decision since #:C failed to appear to present its evidence. (he trial court denied #:C5s motion to reconsider the submission of the case for decision. #:C filed a petition for certiorari2 with the then Intermediate "ppellate Court, uestioning the 30 "ugust /&21 9rder of the trial court. 9n /% )ebruary /&2$, the Intermediate "ppellate Court dismissed #:C5s petition but directed the lower court to rule on #:C5s ob4ections to :obre5s documentary e'hibits. 9n %$ March /&2$, the trial court admitted all of :obre5s e'hibits and upheld its 9rder dated 30 "ugust /&21. (he trial court considered the case submitted for decision. 9n %& "pril /&2$, the trial court issued its .ecision in favor of :obre. (he dispositive portion of the decision reads8 D>-!-)9!-, premises considered, 4udgment is hereby rendered in favor of the defendant and against the plaintiff, ordering the plaintiff to pay unto the defendant8 @/A (he sum of (>!-- MI++I9# )9,! >,#.!-. )9!(J -I;>( (>9,S"#. )9,! >,#.!-. )I)(J @:3,662,610.00A :-S9S which is the fair mar?et value of the subdivision of defendant with an area of si'ty eight thousand nine hundred si'ty nine @62,&6&A s uare meters, plus legal rate of interest per annum from September 6, /&$& until the whole amount is paid, and upon payment thereof by the plaintiff the defendant is hereby ordered to e'ecute the necessary .eed of Conveyance or "bsolute Sale of the property in favor of the plaintiffB @%A (he sum of 9#- >,#.!-. )I)(J (>9,S"#. @:/10,000.00A :-S9S for and as attorney5s fees. Costs against the plaintiff. S9 9!.-!-..& 9n /3 <uly /&2$, #:C filed its motion for reconsideration of the decision. 9n 30 9ctober /&2$, the trial court issued its 9rder denying #:C5s motion for reconsideration. #:C appealed to the Court of "ppeals. 9n 30 March /&&%, the Court of "ppeals upheld the decision of the trial court but deleted the award of attorney5s fees. (he dispositive portion of the decision reads8 D>-!-)9!-, by reason of the foregoing, the .ecision appealed from is "))I!M-. with the modification that the award of attorney5s fees is deleted. #o pronouncement as to costs. S9 9!.-!-../0 (he Court of "ppeals denied #:C5s motion for reconsideration in a !esolution dated /6 "ugust /&&%. T+e Ru-.n& o/ (+e T0."- Cou0(

In its 6&7page decision, the trial court recounted in great detail the scale and scope of the damage #:C inflicted on the :roperty that :obre had developed into a resort7subdivision. :obre5s :roperty suffered "permanent in4ury" because of the noise, water, air and land pollution generated by #:C5s geothermal plants. (he construction and operation of the geothermal plants drastically changed the topography of the :roperty ma?ing it no longer viable as a resort7 subdivision. (he chemicals emitted by the geothermal plants damaged the natural resources in the :roperty and endangered the lives of the residents. #:C did not only ta?e the 2,3//.60 s uare7meter portion of the :roperty, but also the remaining area of the 62,&6& s uare7meter :roperty. #:C had rendered :obre5s entire :roperty useless as a resort7subdivision. (he :roperty has become useful only to #:C. #:C must therefore ta?e :obre5s entire :roperty and pay for it. (he trial court found the following badges of #:C5s bad faith8 @/A #:C allowed five years to pass before it moved for the dismissal of the second e'propriation caseB @%A #:C did not act on :obre5s plea for #:C to eliminate or at least reduce the damage to the :ropertyB and @3A #:C singled out :obre5s :roperty for piecemeal e'propriation when #:C could have e'propriated other properties which were not affected in their entirety by #:C5s operation. (he trial court found the 4ust compensation to be :10 per s uare meter or a total of :3,662,610 for :obre5s 62,&6& s uare7meter :roperty. #:C failed to contest this valuation. Since #:C was in bad faith and it employed dilatory tactics to prolong this case, the trial court imposed legal interest on the :3,662,610 from 6 September /&$& until full payment. (he trial court awarded :obre attorney5s fees of :/10,000. T+e Ru-.n& o/ (+e Cou0( o/ A11e"-' (he Court of "ppeals affirmed the decision of the trial court. >owever, the appellate court deleted the award of attorney5s fees because :obre did not properly plead for it. T+e I''ue' #:C claims that the Court of "ppeals committed the following errors that warrant reversal of the appellate court5s decision8 /. In not annulling the appealed .ecision for having been rendered by the trial court with grave abuse of discretion and without 4urisdictionB %. In holding that #:C had "ta?en" the entire :roperty of :obreB 3. "ssuming arguendo that there was "ta?ing" of the entire :roperty, in not e'cluding from the :roperty the 2,3//.60 s uare7meter portion #:C had previously e'propriated and paid forB 6. In holding that the amount of 4ust compensation fi'ed by the trial court at :3,662,610.00 with interest from September 6, /&$& until fully paid, is 4ust and fairB 1. In not holding that the 4ust compensation should be fi'ed at :%1.00 per s uare meter only as what #:C and :obre had previously mutually agreed uponB and 6. In not totally setting aside the appealed .ecision of the trial court. // Procedural Issues

#:C, represented by the 9ffice of the Solicitor ;eneral, insists that at the time that it moved for the dismissal of its complaint, :obre had yet to serve an answer or a motion for summary 4udgment on #:C. (hus, #:C as plaintiff had the right to move for the automatic dismissal of its complaint. #:C relies on Section /, !ule /$ of the /&66 !ules of Court, the !ules then in effect. #:C argues that the dismissal of the complaint should have carried with it the dismissal of the entire case including :obre5s counterclaim. #:C5s belated attac? on :obre5s claim for damages must fail. (he trial court5s reservation of :obre5s right to recover damages in the same case is already beyond review. (he 2 <anuary /&21 9rder of the trial court attained finality when #:C failed to move for its reconsideration within the /17day reglementary period. #:C opposed the order only on %$ May /&21 or more than four months from the issuance of the order. De cannot fault the Court of "ppeals for not considering #:C5s ob4ections against the subsistence of :obre5s claim for damages. #:C neither included this issue in its assignment of errors nor discussed it in its appellant5s brief. #:C also failed to uestion the trial court5s 2 <anuary /&21 9rder in the petition for certiorari /% it had earlier filed with the Court of "ppeals. It is only before this Court that #:C now vigorously assails the preservation of :obre5s claim for damages. Clearly, #:C5s opposition to the e'istence of :obre5s claim for damages is a mere afterthought. !ules of fair play, 4ustice and due process dictate that parties cannot raise an issue for the first time on appeal. /3 De must correct #:C5s claim that it filed the notice of dismissal 4ust "shortly" after it had filed the complaint for e'propriation. Dhile #:C had intimated several times to the trial court its desire to dismiss the e'propriation case it filed on 1 September /&$&,/6 it was only on % <anuary /&21 that #:C filed its notice of dismissal. /1 It too? #:C more than five years to actually file the notice of dismissal. )ive years is definitely not a short period of time. #:C obviously dilly7dallied in filing its notice of dismissal while #:C meanwhile burdened :obre5s property rights. -ven a timely opposition against :obre5s claim for damages would not yield a favorable ruling for #:C. It is not Section /, !ule /$ of the /&66 !ules of Court that is applicable to this case but !ule 6$ of the same !ules, as well as 4urisprudence on e'propriation cases. !ule /$ referred to dismissal of civil actions in general while !ule 6$ specifically governed eminent domain cases. -minent domain is the authority and right of the state, as sovereign, to ta?e private property for public use upon observance of due process of law and payment of 4ust compensation. /6 (he power of eminent domain may be validly delegated to the local governments, other public entities and public utilities /$ such as #:C. -'propriation is the procedure for enforcing the right of eminent domain. /2 "-minent .omain" was the former title of !ule 6$ of the /&66 !ules of Court. In the /&&$ !ules of Civil :rocedure, which too? effect on / <uly /&&$, the prescribed method of e'propriation is still found in !ule 6$, but its title is now "-'propriation." Section /, !ule /$ of the /&66 !ules of Court provided the e'ception to the general rule that the dismissal of the complaint is addressed to the sound discretion of the court. /& )or as long as all of the elements of Section /, !ule /$ were present the dismissal of the complaint rested e'clusively on the plaintiff5s will. %0 (he defending party and even the courts were powerless to prevent the dismissal.%/ (he courts could only accept and record the dismissal. %% " plain reading of Section /, !ule /$ of the /&66 !ules of Court ma?es it obvious that this rule was not intended to supplement !ule 6$ of the same !ules. Section /, !ule /$ of the /&66 !ules of Court, provided that8 S-C(I9# /. &ismissal '" the plaintiff. K "n action may be dismissed by the plaintiff without order of court by filing a notice of dismissal at any time before service of the answer or of a motion for summary 4udgment. ,nless otherwise stated in the notice, the dismissal is without pre4udice, e'cept that a notice operates as an ad4udication upon the merits when filed by a plaintiff who has once dismissed in a competent court an action based on or including the same claim. " class suit shall not be dismissed or compromised without approval of the court. Dhile Section /, !ule /$ spo?e of the "service of answer or summary 4udgment," the !ules then did not re uire the filing of an answer or summary 4udgment in eminent domain cases. %3 In lieu of an answer, Section 3 of !ule 6$

re uired the defendant to file a single motion to dismiss where he should present all of his ob4ections and defenses to the ta?ing of his property for the purpose specified in the complaint. %6 In short, in e'propriation cases under Section 3 of !ule 6$, the motion to dismiss too? the place of the answer. (he records show that :obre had already filed and served on #:C his "motion to dismissLanswer" %1 even before #:C filed its own motion to dismiss. #:C filed its notice of dismissal of the complaint on % <anuary /&21. >owever, as early as /0 .ecember /&26, :obre had already filed with the trial court and served on #:C his "motion to dismissLanswer." " certain .ivina Cerela received :obre5s pleading on behalf of #:C. %6 ,nfortunately for #:C, even Section /, !ule /$ of the /&66 !ules of Court could not save its cause. #:C is in no position to invo?e Section /, !ule /$ of the /&66 !ules of Court. " plaintiff loses his right under this rule to move for the immediate dismissal of the complaint once the defendant had served on the plaintiff the answer or a motion for summary 4udgment before the plaintiff could file his notice of dismissal of the complaint. %$:obre5s "motion to dismissLanswer," filed and served way ahead of #:C5s motion to dismiss, ta?es the case out of Section /, !ule /$ assuming the same applies. In e'propriation cases, there is no such thing as the plaintiff5s matter of right to dismiss the complaint precisely because the landowner may have already suffered damages at the start of the ta?ing. (he plaintiff5s right in e'propriation cases to dismiss the complaint has always been sub4ect to court approval and to certain conditions.%2 (he e'ceptional right that Section /, !ule /$ of the /&66 !ules of Court conferred on the plaintiff must be understood to have applied only to other civil actions. (he /&&$ !ules of Civil :rocedure abrogated this e'ceptional right.%& (he power of eminent domain is sub4ect to limitations. " landowner cannot be deprived of his right over his land until e'propriation proceedings are instituted in court. 30 (he court must then see to it that the ta?ing is for public use, there is payment of 4ust compensation and there is due process of law. 3/ If the propriety of the ta?ing of private property through eminent domain is sub4ect to 4udicial scrutiny, the dismissal of the complaint must also pass 4udicial in uiry because private rights may have suffered in the meantime. (he dismissal, withdrawal or abandonment of the e'propriation case cannot be made arbitrarily. If it appears to the court that the e'propriation is not for some public use, 3% then it becomes the duty of the court to dismiss the action. 33 >owever, when the defendant claims that his land suffered damage because of the e'propriation, the dismissal of the action should not foreclose the defendant5s right to have his damages ascertained either in the same case or in a separate action. 36 (hus, #:C5s theory that the dismissal of its complaint carried with it the dismissal of :obre5s claim for damages is baseless. (here is nothing in !ule 6$ of the /&66 !ules of Court that provided for the dismissal of the defendant5s claim for damages, upon the dismissal of the e'propriation case. Case law holds that in the event of dismissal of the e'propriation case, the claim for damages may be made either in a separate or in the same action, for all damages occasioned by the institution of the e'propriation case. 31 (he dismissal of the complaint can be made under certain conditions, such as the reservation of the defendant5s right to recover damages either in the same or in another action.36 (he trial court in this case reserved :obre5s right to prove his claim in the same case, a reservation that has become final due to #:C5s own fault. Factual Findings of the Trial and Appellate Courts Bind the Court (he trial and appellate courts held that even before the first e'propriation case, :obre had already established his :roperty as a resort7subdivision. #:C had wrought so much damage to the :roperty that #:C had made the :roperty uninhabitable as a resort7subdivision. #:C5s facilities such as steam wells, nag wells, power plants, power lines, and canals had hemmed in :obre5s :roperty. #:C5s operations of its geothermal pro4ect also posed a ris? to lives and properties. De uphold the factual findings of the trial and appellate courts. Muestions of facts are beyond the pale of !ule 61 of the !ules of Court as a petition for review may only raise uestions of law. 3$ Moreover, factual findings of the trial

court, particularly when affirmed by the Court of "ppeals, are generally binding on this Court. 32 De thus find no reason to set aside the two courts5 factual findings. #:C points out that it did not ta?e :obre5s 62,&6& s uare7meter :roperty. #:C argues that assuming that it is liable for damages, the 2,3//.60 s uare7meter portion that it had successfully e'propriated and fully paid for should have been e'cluded from the 62,&6& s uare7meter :roperty that :obre claims #:C had damaged. De are not persuaded. In its 30 9ctober /&2$ 9rder denying #:C5s motion for reconsideration, the trial court pointed out that the :roperty originally had a total area of /6/,300 s uare meters. 3& :obre converted the :roperty into a resort7subdivision and sold lots to the public. Dhat remained of the lots are the 62,&6& s uare meters of land. 60 :obre no longer claimed damages for the other lots that he had before the e'propriation. :obre identified in court the lots forming the 62,&6& s uare7meter :roperty. #:C had the opportunity to ob4ect to the identification of the lots.6/ #:C, however, failed to do so. (hus, we do not disturb the trial and appellate courts5 finding on the total land area #:C had damaged. NPC must Pay Just Compensation for the Entire Property 9rdinarily, the dismissal of the e'propriation case restores possession of the e'propriated land to the landowner.6% >owever, when possession of the land cannot be turned over to the landowner because it is neither convenient nor feasible anymore to do so, the only remedy available to the aggrieved landowner is to demand payment of 4ust compensation.63 In this case, we agree with the trial and appellate courts that it is no longer possible and practical to restore possession of the :roperty to :obre. (he :roperty is no longer habitable as a resort7subdivision. (he :roperty is worthless to :obre and is now useful only to #:C. :obre has completely lost the :roperty as if #:C had physically ta?en over the entire 62,&6& s uare7meter :roperty. In United tates v! Caus"y,66 the ,.S. Supreme Court ruled that when private property is rendered uninhabitable by an entity with the power to e'ercise eminent domain, the ta?ing is deemed complete. Such ta?ing is thus compensable. In this 4urisdiction, the Court has ruled that if the government ta?es property without e'propriation and devotes the property to public use, after many years the property owner may demand payment of 4ust compensation. 61 (his principle is in accord with the constitutional mandate that private property shall not be ta?en for public use without 4ust compensation.66 In the recent case of National #ousing Authority v! #eirs of Isidro $uivelondo ,6$ the Court compelled the #ational >ousing "uthority @"#>""A to pay 4ust compensation to the landowners even after the #>" had already abandoned the e'propriation case. (he Court pointed out that a government agency could not initiate e'propriation proceedings, sei*e a person5s property, and then 4ust decide not to proceed with the e'propriation. Such a complete turn7around is arbitrary and capricious and was condemned by the Court in the strongest possible terms. #>" was held liable to the landowners for the pre4udice that they had suffered. In this case, #:C appropriated :obre5s :roperty without resort to e'propriation proceedings. #:C dismissed its own complaint for the second e'propriation. "t no point did #:C institute e'propriation proceedings for the lots outside the 1,116 s uare7meter portion sub4ect of the second e'propriation. (he only issues that the trial court had to settle were the amount of 4ust compensation and damages that #:C had to pay :obre.

(his case ceased to be an action for e'propriation when #:C dismissed its complaint for e'propriation. Since this case has been reduced to a simple case of recovery of damages, the provisions of the !ules of Court on the ascertainment of the 4ust compensation to be paid were no longer applicable. " trial before commissioners, for instance, was dispensable. De have held that the usual procedure in the determination of 4ust compensation is waived when the government itself initially violates procedural re uirements.62 #:C5s ta?ing of :obre5s property without filing the appropriate e'propriation proceedings and paying him 4ust compensation is a transgression of procedural due process. )rom the beginning, #:C should have initiated e'propriation proceedings for :obre5s entire 62,&6& s uare7meter :roperty. #:C did not. Instead, #:C embar?ed on a piecemeal e'propriation of the :roperty. -ven as the second e'propriation case was still pending, #:C was well aware of the damage that it had unleashed on the entire :roperty. #:C, however, remained impervious to :obre5s repeated demands for #:C to abate the damage that it had wrought on his :roperty. #:C moved for the dismissal of the complaint for the second e'propriation on the ground that it had found an alternative site and there was stiff opposition from :obre. 6& #:C abandoned the second e'propriation case five years after it had already deprived the :roperty virtually of all its value. #:C has demonstrated its utter disregard for :obre5s property rights. (hus, it would now be futile to compel #:C to institute e'propriation proceedings to determine the 4ust compensation for :obre5s 62,&6& s uare7meter :roperty. :obre must be spared any further delay in his pursuit to receive 4ust compensation from #:C. <ust compensation is the fair and full e uivalent of the loss. 10 (he trial and appellate courts endeavored to meet this standard. (he :10 per s uare meter valuation of the 62,&6& s uare7meter :roperty is reasonable considering that the :roperty was already an established resort7subdivision. #:C has itself to blame for not contesting the valuation before the trial court. 3ased on the :10 per s uare meter valuation, the total amount of 4ust compensation that #:C must pay :obre is :3,662,610. (he landowner is entitled to legal interest on the price of the land from the time of the ta?ing up to the time of full payment by the government.1/ In accord with 4urisprudence, we fi' the legal interest at si' per cent @6IA per annum.1% (he legal interest should accrue from 6 September /&$&, the date when the trial court issued the writ of possession to #:C, up to the time that #:C fully pays :obre. 13 #:C5s abuse of its eminent domain authority is appalling. >owever, we cannot award moral damages because :obre did not assert his right to it.16 De also cannot award attorney5s fees in :obre5s favor since he did not appeal from the decision of the Court of "ppeals denying recovery of attorney5s fees. 11 #onetheless, we find it proper to award :10,000 in temperate damages to :obre. (he court may award temperate or moderate damages, which are more than nominal but less than compensatory damages, if the court finds that a party has suffered some pecuniary loss but its amount cannot be proved with certainty from the nature of the case. 16 "s the trial and appellate courts noted, :obre5s resort7subdivision was no longer 4ust a dream because :obre had already established the resort7subdivision and the prospect for it was initially encouraging. (hat is, until #:C permanently damaged :obre5s :roperty. #:C did not 4ust destroy the property. #:C dashed :obre5s hope of seeing his :roperty achieve its full potential as a resort7subdivision. (he lesson in this case must not be lost on entities with eminent domain authority. Such entities cannot trifle with a citi*en5s property rights. (he power of eminent domain is an e'traordinary power they must wield with circumspection and utmost regard for procedural re uirements. (hus, we hold #:C liable for e'emplary damages of :/00,000. -'emplary damages or corrective damages are imposed, by way of e'ample or correction for the public good, in addition to the moral, temperate, li uidated or compensatory damages. 1$

)2EREFORE, we .-#J the petition for lac? of merit. (he appealed .ecision of the Court of "ppeals dated 30 March /&&% in C"7;.!. CE #o. /6&30 is "))I!M-. with M9.I)IC"(I9#. #ational :ower Corporation is ordered to pay "ntonino :obre :3,662,610 as 4ust compensation for the 62,&6& s uare7meter :roperty at :10 per s uare meter. #ational :ower Corporation is directed to pay legal interest at 6I per annum on the amount ad4udged from 6 September /&$& until fully paid. ,pon #ational :ower Corporation5s payment of the full amount, "ntonino :obre is ordered to e'ecute a .eed of Conveyance of the :roperty in #ational :ower Corporation5s favor. #ational :ower Corporation is further ordered to pay temperate and e'emplary damages of :10,000 and :/00,000, respectively. #o costs. SO ORDERED

In "ugust /&2&, the F.epartment of (rade and Communications @.9(CAG engaged the services of "eroport de :aris @".:A to conduct a comprehensive study of the #inoy " uino International "irport @#"I"A and determine whether the present airport can cope with the traffic development up to the year %0/0. (he study consisted of two parts8 first, traffic forecasts, capacity of e'isting facilities, #"I" future re uirements, proposed master plans and development plansB and second, presentation of the preliminary design of the passenger terminal building. (he ".: submitted a .raft )inal !eport to the .9(C in .ecember /&2&. Some time in /&&3, si' business leaders consisting of <ohn ;o?ongwei, "ndrew ;otianun, >enry Sy, Sr., +ucio (an, ;eorge (y and "lfonso Juchengco met with then :resident )idel E. !amos to e'plore the possibility of investing in the construction and operation of a new international airport terminal. (o signify their commitment to pursue the pro4ect, they formed the "sia5s -merging .ragon Corp. @"-.CA which was registered with the Securities and -'change Commission @S-CA on September /1, /&&3. 9n 9ctober 1, /&&6, "-.C submitted an unsolicited proposal to the ;overnment through the .9(CL FManila International "irport "uthority @MI""AG for the development of #"I" International :assenger (erminal III @#"I" I:( IIIA under a build7operate7and7transfer arrangement pursuant to !" 6&1$ as amended by !" $$/2 @39( +awA. 9n .ecember %, /&&6, the .9(C issued .ept. 9rder #o. &6723% constituting the :re ualification 3ids and "wards Committee @:3"CA for the implementation of the #"I" I:( III pro4ect. 9n March %$, /&&1, then .9(C Secretary <ose ;arcia endorsed the proposal of "-.C to the #ational -conomic and .evelopment "uthority @#-."A. " revised proposal, however, was forwarded by the .9(C to #-." on .ecember /3, /&&1. 9n <anuary 1, /&&6, the #-." Investment Coordinating Council @#-." ICCA 7 (echnical 3oard favorably endorsed the pro4ect to the ICC 7 Cabinet Committee which approved the same, sub4ect to certain conditions, on <anuary /&, /&&6. 9n )ebruary /3, /&&6, the #-." passed 3oard !esolution #o. % which approved the #"I" I:( III pro4ect. 9n <une $, /6, and %/, /&&6, .9(CLMI"" caused the publication in two daily newspapers of an invitation for competitive or comparative proposals on "-.C5s unsolicited proposal, in accordance with Sec. 67" of !" 6&1$, as amended. (he alternative bidders were re uired to submit three @3A sealed envelopes on or before 1800 p.m. of September %0, /&&6. (he first envelope should contain the :re ualification .ocuments, the second envelope the (echnical :roposal, and the third envelope the )inancial :roposal of the proponent. 9n <une %0, /&&6, :3"C 3ulletin #o. / was issued, postponing the availment of the 3id .ocuments and the submission of the comparative bid proposals. Interested firms were permitted to obtain the !e uest for :roposal .ocuments beginning <une %2, /&&6, upon submission of a written application and payment of a non7refundable fee of :10,000.00 @,SN%,000A. (he 3id .ocuments issued by the :3"C provided among others that the proponent must have ade uate capability to sustain the financing re uirement for the detailed engineering, design, construction, operation, and maintenance phases of the pro4ect. (he proponent would be evaluated based on its ability to provide a minimum amount of e uity to the pro4ect, and its capacity to secure e'ternal financing for the pro4ect. 9n <uly %3, /&&6, the :3"C issued :3"C 3ulletin #o. % inviting all bidders to a pre7bid conference on <uly %&, /&&6. 9n "ugust /6, /&&6, the :3"C issued :3"C 3ulletin #o. 3 amending the 3id .ocuments. (he following amendments were made on the 3id .ocuments8 a. "side from the fi'ed "nnual ;uaranteed :ayment, the proponent shall include in its financial proposal an additional percentage of gross revenue share of the ;overnment, as follows8

G.R. No. 1$3314

A10.- 1%, 200%

ASIA4S EMERGING DRAGON CORPORATION, petitioner, vs. DEPARTMENT OF TRANSPORTATION AND COMM*NICATIONS, SECRETARY LEANDRO R. MENDO5A "n MANILA INTERNATIONAL AIRPORT A*T2ORITY, respondents. ' 77777777777777777777777777777777777777777 ' G.R. No. 1641$$ A10.- 1%, 200%

REP*BLIC OF T2E P2ILIPPINES, 0e10e'en(e 78 (+e DEPARTMENT OF TRANSPORTATION AND COMM*NICATIONS "n MANILA INTERNATIONAL AIRPORT A*T2ORITY, petitioner, vs. 2ON. CO*RT OF APPEALS "n SALACNIB BATERINA, respondents. DECISION C2ICO9NA5ARIO, J!# (his Court is still continuously besieged by :etitions arising from the awarding of the #inoy " uino International "irport International :assenger (erminal III @#"I" I:( IIIA :ro4ect to the :hilippine International "ir (erminals Co., Inc. @:I"(C9A, despite the promulgation by this Court of .ecisions and !esolutions in two cases, A(an, )r. v. Philippine International Air Terminals Co., Inc. / and *epu'lic v. +in(o"on,% which already resolved the more basic and immediate issues arising from the said award. (he sheer magnitude of the pro4ect, the substantial cost of its building, the e'pected high profits from its operations, and its remar?able impact on the :hilippine economy, conse uently raised significant interest in the pro4ect from various uarters. 9nce more, two new :etitions concerning the #"I" I:( III :ro4ect are before this Court. It is only appropriate, however, that the Court first recounts its factual and legal findings in A(an and +in(o"on to ascertain that its ruling in the :etitions at bar shall be consistent and in accordance therewith. Agan% Jr! v! Philippine International Air Terminals Co!% Inc! &$!'! Nos! ())**(% ()))+,% and ())--(. "lready established and incontrovertible are the following facts in A(an8

i. ii. iii.

)irst 1 years #e't /0 years #e't /0 years

1.0I $.1I /0.0I

capital in case the pro3ect is a arded to the )oint 6enture instead of increasin( each corporation8s current authori0ed capital stoc1 3ust for prequalification purposes. In pre ualification, the agency is interested in one5s financial capability at the time of pre ualification, not future or potential capability. " commitment to put up e uity once awarded the pro4ect is not enough to establish that "present" financial capability. >owever, total financial capability of all member companies of the Consortium, to be established by submitting the respective companies5 audited financial statements, shall be acceptable. 9. At present, Paircar(o is ne(otiatin( ith 'an1s and other institutions for the e7tension of a Performance Securit" to the 3oint venture in the event that the Concessions A(reement 4sic5 is a arded to them. :o ever, Paircar(o is 'ein( required to su'mit a cop" of the draft concession as one of the documentar" requirements. Therefore, Paircar(o is requestin( that the"8d 4sic5 'e furnished cop" of the approved ne(otiated a(reement 'et een the P/AC and the A;&C at the soonest possi'le time . " copy of the draft Concession "greement is included in the 3id .ocuments. "ny material changes would be made ?nown to prospective challengers through bid bulletins. >owever, a final version will be issued before the award of contract. (he :3"C also stated that it would re uire "-.C to sign Supplement C of the 3id .ocuments @"cceptance of Criteria and Daiver of !ights to -n4oin :ro4ectA and to submit the same with the re uired 3id Security. 9n September %0, /&&6, the consortium composed of :eople5s "ir Cargo and Darehousing Co., Inc. @:aircargoA, :hil. "ir and ;rounds Services, Inc. @:";SA and Security 3an? Corp. @Security 3an?A @collectively, :aircargo ConsortiumA submitted their competitive proposal to the :3"C. 9n September %3, /&&6, the :3"C opened the first envelope containing the pre ualification documents of the :aircargo Consortium. 9n the following day, September %6, /&&6, the :3"C pre ualified the :aircargo Consortium. 9n September %6, /&&6, "-.C informed the :3"C in writing of its reservations as regards the :aircargo Consortium, which include8 a. (he lac? of corporate approvals and financial capability of :"I!C"!;9B b. (he lac? of corporate approvals and financial capability of :";SB c. (he prohibition imposed by !" 33$, as amended @the ;eneral 3an?ing "ctA on the amount that Security 3an? could legally invest in the pro4ectB d. (he inclusion of Siemens as a contractor of the :"I!C"!;9 <oint Eenture, for pre ualification purposesB and e. (he appointment of +ufthansa as the facility operator, in view of the :hilippine re uirement in the operation of a public utility. (he :3"C gave its reply on 9ctober %, /&&6, informing "-.C that it had considered the issues raised by the latter, and that based on the documents submitted by :aircargo and the established pre ualification

b. (he amount of the fi'ed "nnual ;uaranteed :ayment shall be sub4ect of the price challenge. :roponent may offer an "nnual ;uaranteed :ayment which need not be of e ual amount, but payment of which shall start upon site possession. c. (he pro4ect proponent must have ade uate capability to sustain the financing re uirement for the detailed engineering, design, construction, andLor operation and maintenance phases of the pro4ect as the case may be. )or purposes of pre7 ualification, this capability shall be measured in terms of8 i. :roof of the availability of the pro4ect proponent andLor the consortium to provide the minimum amount of e uity for the pro4ectB and ii. a letter testimonial from reputable ban?s attesting that the pro4ect proponent andLor the members of the consortium are ban?ing with them, that the pro4ect proponent andLor the members are of good financial standing, and have ade uate resources. d. (he basis for the pre ualification shall be the proponent5s compliance with the minimum technical and financial re uirements provided in the 3id .ocuments and the FImplementing !ules and !egulations @I!!AG of the 39( +aw. (he minimum amount of e uity shall be 30I of the :ro4ect Cost. e. "mendments to the draft Concession "greement shall be issued from time to time. Said amendments shall only cover items that would not materially affect the preparation of the proponent5s proposal. 9n "ugust %&, /&&6, the Second :re73id Conference was held where certain clarifications were made. ,pon the re uest of prospective bidder :eople5s "ir Cargo O Darehousing Co., Inc @:aircargoA, the :3"C warranted that based on Sec. //.6, !ule // of the Implementing !ules and !egulations of the 39( +aw, only the proposed "nnual ;uaranteed :ayment submitted by the challengers would be revealed to "-.C, and that the challengers5 technical and financial proposals would remain confidential. (he :3"C also clarified that the list of revenue sources contained in "nne' 6.%a of the 3id .ocuments was merely indicative and that other revenue sources may be included by the proponent, sub4ect to approval by .9(CLMI"". )urthermore, the :3"C clarified that only those fees and charges denominated as :ublic ,tility )ees would be sub4ect to regulation, and those charges which would be actually deemed :ublic ,tility )ees could still be revised, depending on the outcome of :3"C5s uery on the matter with the .epartment of <ustice. In September /&&6, the :3"C issued 3id 3ulletin #o. 1, entitled ""nswers to the Mueries of :"I!C"!;9 as :er +etter .ated September 3 and /0, /&&6." :aircargo5s ueries and the :3"C5s responses were as follows8 #. It is difficult for Paircar(o and Associates to meet the required minimum equit" requirement as prescri'ed in Section ,.-.. of the /id &ocuments considerin( that the capitali0ation of each mem'er compan" is so structured to meet the requirements and needs of their current respective 'usiness underta1in(2activities. In order to compl" ith this equit" requirement, Paircar(o is requestin( P/AC to 3ust allo each mem'er of 4sic5 corporation of the )oint 6enture to 3ust e7ecute an a(reement that em'odies a commitment to infuse the required

criteria, the :3"C had found that the challenger, :aircargo, had pre ualified to underta?e the pro4ect. (he Secretary of the .9(C approved the finding of the :3"C. (he :3"C then proceeded with the opening of the second envelope of the :aircargo Consortium which contained its (echnical :roposal. 9n 9ctober 3, /&&6, "-.C reiterated its ob4ections, particularly with respect to :aircargo5s financial capability, in view of the restrictions imposed by Section %/73 of the ;eneral 3an?ing "ct and Sections /320 and /32/ of the Manual !egulations for 3an?s and 9ther )inancial Intermediaries. 9n 9ctober $, /&&6, "-.C again manifested its ob4ections and re uested that it be furnished with e'cerpts of the :3"C meeting and the accompanying technical evaluation report where each of the issues they raised were addressed. 9n 9ctober /6, /&&6, the :3"C opened the third envelope submitted by "-.C and the :aircargo Consortium containing their respective financial proposals. 3oth proponents offered to build the #"I" :assenger (erminal III for at least N310 million at no cost to the government and to pay the government8 1I share in gross revenues for the first five years of operation, $.1I share in gross revenues for the ne't ten years of operation, and /0I share in gross revenues for the last ten years of operation, in accordance with the 3id .ocuments. >owever, in addition to the foregoing, "-.C offered to pay the government a total of:/31 million as guaranteed payment for %$ years while :aircargo Consortium offered to pay the government a total of :/$.$1 billion for the same period. (hus, the :3"C formally informed "-.C that it had accepted the price proposal submitted by the :aircargo Consortium, and gave "-.C 30 wor?ing days or until #ovember %2, /&&6 within which to match the said bid, otherwise, the pro4ect would be awarded to :aircargo. "s "-.C failed to match the proposal within the 307day period, then .9(C Secretary "mado +agdameo, on .ecember //, /&&6, issued a notice to :aircargo Consortium regarding "-.C5s failure to match the proposal. 9n )ebruary %$, /&&$, :aircargo Consortium incorporated into :hilippine International "irport (erminals Co., Inc. @:I"(C9A. "-.C subse uently protested the alleged undue preference given to :I"(C9 and reiterated its ob4ections as regards the pre ualification of :I"(C9. 9n "pril //, /&&$, the .9(C submitted the concession agreement for the second7pass approval of the #-."7ICC. 9n "pril /6, /&&$, "-.C filed with the !egional (rial Court of :asig a :etition for .eclaration of #ullity of the :roceedings, Mandamus and In4unction against the Secretary of the .9(C, the Chairman of the :3"C, the voting members of the :3"C and :antaleon .. "lvare*, in his capacity as Chairman of the :3"C (echnical Committee. '''' 9n <uly &, /&&$, the .9(C issued the notice of award for the pro4ect to :I"(C9. 9n <uly /%, /&&$, the ;overnment, through then .9(C Secretary "rturo (. -nrile, and :I"(C9, through its :resident, >enry (. ;o, signed the "Concession "greement for the 3uild79perate7and7(ransfer

"rrangement of the #inoy " uino International "irport :assenger (erminal III" @/&&$ Concession "greementA. ' ' '. 9n #ovember %6, /&&2, the ;overnment and :I"(C9 signed an "mended and !estated Concession "greement @"!C"A. ' ' '. Subse uently, the ;overnment and :I"(C9 signed three Supplements to the "!C". (he )irst Supplement was signed on "ugust %$, /&&&B the Second Supplement on September 6, %000B and the (hird Supplement on <une %%, %00/ @collectively, SupplementsA. '''' Meanwhile, the MI"" which is charged with the maintenance and operation of the #"I" (erminals I and II, had e'isting concession contracts with various service providers to offer international airline airport services, such as in7flight catering, passenger handling, ramp and ground support, aircraft maintenance and provisions, cargo handling and warehousing, and other services, to several international airlines at the #"I". ' ' '. 9n September /$, %00%, the wor?ers of the international airline service providers, claiming that they stand to lose their employment upon the implementation of the uestioned agreements, filed before this Court a petition for prohibition to en4oin the enforcement of said agreements. 9n 9ctober /1, %00%, the service providers, 4oining the cause of the petitioning wor?ers, filed a motion for intervention and a petition7in7intervention. 9n 9ctober %6, %00%, Congressmen Salacnib 3aterina, Clavel Martine* and Constantino <araula filed a similar petition with this Court. 9n #ovember 6, %00%, several employees of the MI"" li?ewise filed a petition assailing the legality of the various agreements. 9n .ecember //, %00%, another group of Congressmen, >on. <acinto E. :aras, !afael :. #antes, -duardo C. Hialcita, Dillie 3. Eillarama, :rospero C. #ograles, :rospero ". :ichay, <r., >arlin Cast "bayon and 3enasing 9. Macaranbon, moved to intervene in the case as !espondents7Intervenors. (hey filed their Comment7In7Intervention defending the validity of the assailed agreements and praying for the dismissal of the petitions. .uring the pendency of the case before this Court, :resident ;loria Macapagal "rroyo, on #ovember %&, %00%, in her speech at the %00% ;olden Shell -'port "wards at MalacaPang :alace, stated that she will not "honor @:I"(C9A contracts which the -'ecutive 3ranch5s legal offices have concluded @asA null and void."3 (he Court first dispensed with the procedural issues raised in A(an, ruling that @aA the MI"" service providers and its employees, petitioners in ;.!. #os. /1100/ and /1166/, had the re uisite standing since they had a direct and substantial interest to protect by reason of the implementation of the :I"(C9 Contracts which would affect their source of livelihoodB6 and @bA the members of the >ouse of !epresentatives, petitioners in ;.!. #o. /1116$, were granted standing in view of the serious legal uestions involved and their impact on public interest. 1 "s to the merits of the :etitions in A(an, the Court concluded that8

In sum, this Court rules that in view of the absence of the re uisite financial capacity of the :aircargo Consortium, predecessor of respondent :I"(C9, the award by the :3"C of the contract for the construction, operation and maintenance of the #"I" I:( III is null and void. )urther, considering that the /&&$ Concession "greement contains material and substantial amendments, which amendments had the effect of converting the /&&$ Concession "greement into an entirely different agreement from the contract bidded upon, the /&&$ Concession "greement is similarly null and void for being contrary to public policy. (he provisions under Sections 6.06@bA and @cA in relation to Section /.06 of the /&&$ Concession "greement and Section 6.06@cA in relation to Section /.06 of the "!C", which constitute a direct government guarantee e'pressly prohibited by, among others, the 39( +aw and its Implementing !ules and !egulations are also null and void. (he Supplements, being accessory contracts to the "!C", are li?ewise null and void.6 >ence, the fallo of the Court5s .ecision in A(an reads8 )2EREFORE, the /&&$ Concession "greement, the "mended and !estated Concession "greement and the Supplements thereto are set aside for being null and void. $ In a !esolution2 dated %/ <anuary %006, the Court denied with finality the Motions for !econsideration of its 1 May %003 .ecision in A(an filed by therein respondents :I"(C9 and Congressmen :aras, et al., and respondents7 intervenors.& Significantly, the Court declared in the same !esolution that8 (his Court, however, is not unmindful of the reality that the structures comprising the #"I" I:( III facility are almost complete and that funds have been spent by :I"(C9 in their construction. )or the government to ta?e over the said facility, .( +"' (o ,o:1en'"(e 0e'1on en( PIATCO "' 7u.- e0 o/ (+e '". '(0u,(u0e'. T+e ,o:1en'"(.on :u'( 7e ;u'( "n .n ",,o0 "n,e <.(+ -"< "n e=u.(8 for the government can not un4ustly enrich itself at the e'pense of :I"(C9 and its investors. /0 @-mphasis ours.A It is these afore7 uoted pronouncements that gave rise to the :etition in +in(o"on. 'epu"lic v! $ingoyon &$!'! No! (--+/0. "ccording to the statement of facts in +in(o"on8 "fter the promulgation of the rulings in A(an, the #"I" 3 facilities have remained in the possession of :I"(C9, despite the avowed intent of the ;overnment to put the airport terminal into immediate operation. (he ;overnment and :I"(C9 conducted several rounds of negotiation regarding the #"I" 3 facilities. It also appears that arbitral proceedings were commenced before the International Chamber of Commerce International Court of "rbitration and the International Centre for the Settlement of Investment .isputes, although the ;overnment has raised 4urisdictional uestions before those two bodies. (hen, on %/ .ecember %006, the ;overnment filed a Complaint for e'propriation with the :asay City !egional (rial Court @!(CA, together with an Application for Special *affle see?ing the immediate holding of a special raffle. (he ;overnment sought upon the filing of the complaint the issuance of a writ of possession authori*ing it to ta?e immediate possession and control over the #"I" 3 facilities. (he ;overnment also declared that it had deposited the amount of :3,00%,/%1,000.00 @3 3illionA in Cash with the +and 3an? of the :hilippines, representing the #"I" 3 terminal5s assessed value for ta'ation purposes. (he case was raffled to 3ranch //$ of the :asay City !(C, presided by respondent 4udge >on. >enric? ). ;ingoyon @>on. ;ingoyonA. 9n the same day that the Complaint was filed, the !(C issued an <rderdirecting the issuance of a writ of possession to the ;overnment, authori*ing it to "ta?e or enter upon the possession" of the #"I" 3 facilities. Citing the case of Cit" of Manila v. Serrano, the !(C noted that it had the ministerial duty to issue the writ of possession upon the filing of a complaint for e'propriation sufficient in form and substance, and upon deposit made by the government of the amount e uivalent to

the assessed value of the property sub4ect to e'propriation. (he !(C found these re uisites present, particularly noting that "FtGhe case record shows that Fthe ;overnment hasG deposited the assessed value of the F#"I" 3 facilitiesG in the +and 3an? of the :hilippines, an authori*ed depositary, as shown by the certification attached to their complaint." "lso on the same day, the !(C issued a =rit of Possession. "ccording to :I"(C9, the ;overnment was able to ta?e possession over the #"I" 3 facilities immediately after the =rit of Possession was issued. >owever, on 6 <anuary %001, the !(C issued another <rder designed to supplement its %/ .ecember %006<rder and the =rit of Possession. In the 6 <anuary %001 <rder, now assailed in the present petition, the !(C noted that its earlier issuance of its writ of possession was pursuant to Section %, !ule 6$ of the /&&$ !ules of Civil :rocedure. >owever, it was observed that !epublic "ct #o. 2&$6 @!ep. "ct #o. 2&$6A, otherwise ?nown as ""n "ct to )acilitate the "c uisition of !ight7of7Day, Site or +ocation for #ational ;overnment Infrastructure :ro4ects and )or 9ther :urposes" and its Implementing !ules and !egulations @Implementing !ulesA had amended !ule 6$ in many respects. (here are at least two crucial differences between the respective procedures under !ep. "ct #o. 2&$6 and !ule 6$. ,nder the statute, the ;overnment is re uired to ma?e immediate payment to the property owner upon the filing of the complaint to be entitled to a writ of possession, whereas in !ule 6$, the ;overnment is re uired only to ma?e an initial deposit with an authori*ed government depositary. Moreover, !ule 6$ prescribes that the initial deposit be e uivalent to the assessed value of the property for purposes of ta'ation, unli?e !ep. "ct #o. 2&$6 which provides, as the relevant standard for initial compensation, the mar?et value of the property as stated in the ta' declaration or the current relevant *onal valuation of the 3ureau of Internal !evenue @3I!A, whichever is higher, and the value of the improvements andLor structures using the replacement cost method. "ccordingly, on the basis of Sections 6 and $ of !ep. "ct #o. 2&$6 and Section /0 of the Implementing !ules, the !(C made ?ey ualifications to its earlier issuances. First, it directed the +and 3an? of the :hilippines, 3aclaran 3ranch @+3:73aclaranA, to immediately release the amount of ,SN6%,363,/$1.$$ to :I"(C9, an amount which the !(C characteri*ed as that which the ;overnment "specifically made available for the purpose of this e'propriationB" and such amount to be deducted from the amount of 4ust compensation due :I"(C9 as eventually determined by the !(C. Second, the ;overnment was directed to submit to the !(C a Certificate of "vailability of )unds signed by authori*ed officials to cover the payment of 4ust compensation. Third, the ;overnment was directed "to maintain, preserve and safeguard" the #"I" 3 facilities or "perform such as acts or activities in preparation for their direct operation" of the airport terminal, pending e'propriation proceedings and full payment of 4ust compensation. >owever, the ;overnment was prohibited "from performing acts of ownership li?e awarding concessions or leasing any part of F#"I" 3G to other parties." (he very ne't day after the issuance of the assailed 6 <anuary %001 <rder, the ;overnment filed an >r(ent Motion for *econsideration, which was set for hearing on /0 <anuary %001. 9n $ <anuary %001, the !(C issued another <rder, the second now assailed before this Court, which appointed three @3A Commissioners to ascertain the amount of 4ust compensation for the #"I" 3 Comple'. (hat same day, the ;overnment filed a Motion for Inhi'ition of >on. ;ingoyon. (he !(C heard the >r(ent Motion for *econsideration and Motion for Inhi'ition on /0 <anuary %001. 9n the same day, it denied these motions in an <mni'us <rder dated /0 <anuary %001. (his is the third <rdernow assailed before this Court. #onetheless, while the <mni'us <rder affirmed the earlier dispositions in the 6 <anuary %001 <rder, it e'cepted from affirmance "the superfluous part of the <rder prohibiting the plaintiffs from awarding concessions or leasing any part of F#"I" 3G to other parties." (hus, the present Petition for Certiorari and Prohi'ition under !ule 61 was filed on /3 <anuary %001. (he petition prayed for the nullification of the !(C orders dated 6 <anuary %001, $ <anuary %001, and /0 <anuary %001, and for the inhibition of >on. ;ingoyon from ta?ing further action on the e'propriation case. " concurrent prayer for the issuance of a temporary restraining order and preliminary in4unction was granted by this Court in a *esolution dated /6 <anuary %001.//

(he Court resolved the :etition of the !epublic of the :hilippines and Manila International "irport "uthority in+in(o"on in this wise8 In conclusion, the Court summari*es its rulings as follows8 @/A (he %006 *esolution in A(an sets the base re uirement that has to be observed before the ;overnment may ta?e over the #"I" 3, that there must be payment to :I"(C9 of 4ust compensation in accordance with law and e uity. "ny ruling in the present e'propriation case must be conformable to the dictates of the Court as pronounced in the A(an cases. @%A !ep. "ct #o. 2&$6 applies in this case, particularly insofar as it re uires the immediate payment by the ;overnment of at least the proffered value of the #"I" 3 facilities to :I"(C9 and provides certain valuation standards or methods for the determination of 4ust compensation. @3A "pplying !ep. "ct #o. 2&$6, the implementation of Drit of :ossession in favor of the ;overnment over #"I" 3 is held in abeyance until :I"(C9 is directly paid the amount of :3 3illion, representing the proffered value of #"I" 3 under Section 6@cA of the law. @6A "pplying !ep. "ct #o. 2&$6, the ;overnment is authori*ed to start the implementation of the #"I" 3 "irport terminal pro4ect by performing the acts that are essential to the operation of the #"I" 3 as an international airport terminal upon the effectivity of the Drit of :ossession, sub4ect to the conditions above7 stated. "s prescribed by the Court, such authority encompasses "the repair, reconditioning and improvement of the comple', maintenance of the e'isting facilities and e uipment, installation of new facilities and e uipment, provision of services and facilities pertaining to the facilitation of air traffic and transport, and other services that are integral to a modern7day international airport." 1A (he !(C is mandated to complete its determination of the 4ust compensation within si'ty @60A days from finality of this .ecision. In doing so, the !(C is obliged to comply with the standards set under !ep. "ct #o. 2&$6 and its Implementing !ules. Considering that the #"I" 3 consists of structures and improvements, the valuation thereof shall be determined using the replacements cost method, as prescribed under Section /0 of the Implementing !ules. @6A (here was no grave abuse of discretion attending the !(C <rder appointing the commissioners for the purpose of determining 4ust compensation. (he provisions on commissioners under !ule 6$ shall apply insofar as they are not inconsistent with !ep. "ct #o. 2&$6, its Implementing !ules, or the rulings of the Court in A(an. @$A (he ;overnment shall pay the 4ust compensation fi'ed in the decision of the trial court to :I"(C9 immediately upon the finality of the said decision. @2A (here is no basis for the Court to direct the inhibition of >on. ;ingoyon. "ll told, the Court finds no grave abuse of discretion on the part of the !(C to warrant the nullification of the uestioned orders. #onetheless, portions of these orders should be modified to conform with law and the pronouncements made by the Court herein./% (he decretal portion of the Court5s .ecision in +in(o"on thus reads8 D>-!-)9!-, the :etition is ;!"#(-. in :"!( with respect to the orders dated 6 <anuary %001 and /0 <anuary %001 of the lower court. Said orders are "))I!M-. with the following M9.I)IC"(I9#S8

/A (he implementation of the Drit of :ossession dated %/ .ecember %006 is >-+. I# "3-J"#C-, pending payment by petitioners to :I"(C9 of the amount of (hree 3illion (wo Million 9ne >undred (wenty )ive (housand :esos @:3,00%,/%1,000.00A, representing the proffered value of the #"I" 3 facilitiesB %A :etitioners, upon the effectivity of the Drit of :ossession, are authori*ed FtoG start the implementation of the #inoy " uino International "irport :asenger (erminal III pro4ect by performing the acts that are essential to the operation of the said International "irport :assenger (erminal pro4ectB 3A !(C 3ranch //$ is hereby directed, within si'ty @60A days from finality of this .ecision, to determine the 4ust compensation to be paid to :I"(C9 by the ;overnment. (he <rder dated $ <anuary %001 is "))I!M-. in all respects sub4ect to the ualification that the parties are given ten @/0A days from finality of this &ecision to file, if they so choose, ob4ections to the appointment of the commissioners decreed therein. (he Temporar" *estrainin( <rder dated /6 <anuary %001 is hereby +I)(-.. #o pronouncement as to costs./3 Motions for :artial !econsideration of the foregoing .ecision were filed by therein petitioners !epublic and MI"", as well as the three other parties who sought to intervene, namely, "sa?ihosan Corporation, (a?ena?a Corporation, and Congressman 3aterina. In a !esolution dated / )ebruary %006, this Court denied with finality the Motion for :artial !econsideration of therein petitioners and remained faithful to its assailed .ecision based on the following ratiocination8 "dmittedly, the %006 !esolution in A(an could be construed as mandating the full payment of the final amount of 4ust compensation before the ;overnment may be permitted to ta?e over the #"I" 3. >owever, the .ecision ultimately re4ected such a construction, ac?nowledging the public good that would result from the immediate operation of the #"I" 3. Instead, the .ecision adopted an interpretation which is in consonance with !ep. "ct #o. 2&$6 and with e uitable standards as well, that allowed the ;overnment to ta?e possession of the #"I" 3 after payment of the proffered value of the facilities to :I"(C9. Such a reading is substantially compliant with the pronouncement in the %006 A(an !esolution, and is in accord with law and e uity. In contrast, the ;overnment5s position, hewing to the strict application of !ule 6$, would permit the ;overnment to ac uire possession over the #"I" 3 and implement its operation without having to pay :I"(C9 a single centavo, a situation that is obviously unfair. Dhatever animosity the ;overnment may have towards :I"(C9 does not ac uit it from settling its obligations to the latter, particularly those which had already been previously affirmed by this Court. /6 (he Court, in the same !esolution, denied all the three motions for intervention of "sa?ihosan Corporation, (a?ena?a Corporation, and Congressman 3aterina, and ruled as follows8 De now turn to the three @3A motions for intervention all of which were filed after the promulgation of the Court5s .ecision. "ll three @3A motions must be denied. ,nder Section %, !ule /& of the /&&$ !ules of Civil :rocedure the motion to intervene may be filed at any time before rendition of 4udgment by the court. Since this case originated from an original action filed before this Court, the appropriate time to file the motions7 in7intervention in this case if ever was before and not after resolution of this case. (o allow intervention at this 4uncture would be highly irregular. It is e'tremely improbable that the movants were unaware of the pendency of the present case before the Court, and indeed none of them allege such lac? of ?nowledge.

(a?ena?a and "sahi?osan rely on Ma(o v. Court of Appeals wherein the Court too? the e'traordinary step of allowing the motion for intervention even after the challenged order of the trial court had already become final. Jet it was apparent in Ma(o that the movants therein were not impleaded despite being indispensable parties, and had not even ?nown of the e'istence of the case before the trial court, and the effect of the final order was to deprive the movants of their land. In this case, neither (a?ena?a nor "sahi?osan stand to be dispossessed by reason of the Court5s .ecision. (here is no palpable due process violation that would militate the suspension of the procedural rule. Moreover, the re uisite legal interest re uired of a party7in7intervention has not been established so as to warrant the e'tra7ordinary step of allowing intervention at this late stage. "s earlier noted, the claims of (a?ena?a and "sahi?osan have not been 4udicially proved or conclusively established as fact by any trier of facts in this 4urisdiction. Certainly, they could not be considered as indispensable parties to the petition for certiorari. In the case of !epresentative 3aterina, he invo?es his prerogative as legislator to curtail the disbursement without appropriation of public funds to compensate :I"(C9, as well as that as a ta'payer, as the basis of his legal standing to intervene. >owever, it should be noted that the amount which the Court directed to be paid by the ;overnment to :I"(C9 was derived from the money deposited by the Manila International "irport "uthority, an agency which en4oys corporate autonomy and possesses a legal personality separate and distinct from those of the #ational ;overnment and agencies thereof whose budgets have to be approved by Congress. It is also observed that the interests of the movants7in7intervention may be duly litigated in proceedings which are e'tant before lower courts. (here is no compelling reason to disregard the established rules and permit the interventions belatedly filed after the promulgation of the Court5s .ecision. /1 Asia1s Emerging 2ragon Corporation v! 2epartment of Transportation and Communications and 3anila International Airport Authority &$!'! No! (-00(+. 3an?ing on this Court5s declaration in A(an that the award of the #"I" I:( III :ro4ect to :I"(C9 is null and void, "sia5s -merging .ragon Corporation @"-.CA filed before this Court the present :etition for Mandamus and :rohibition @with "pplication for (emporary !estraining 9rderA, praying of this Court that8 @/A "fter due hearing, 4udgment be rendered commanding the !espondents, their officers, agents, successors, representatives or persons or entities acting on their behalf, to formally award the #"I"7":( FsicG III :!9<-C( to :etitioner "-.C and to e'ecute and formali*e with :etitioner "-.C the approved .raft Concession "greement embodying the agreed terms and conditions for the operation of the #"I"7 I:( III :ro4ect and directing !espondents to cease and desist from awarding the #"I"7I:( :ro4ect to third parties or negotiating into any concession contract with third parties. @%A :ending resolution on the merits, a (emporary !estraining 9rder be issued en4oining !espondents, their officers, agents, successors or representatives or persons or entities acting on their behalf from negotiating, re7bidding, awarding or otherwise entering into any concession contract with :I"(C9 and other third parties for the operation of the #"I"7I:( III :ro4ect. 9ther relief and remedies, 4ust and e uitable under the premises, are li?ewise prayed for. /6 "-.C bases its :etition on the following grounds8 I. :-(I(I9#-! "-.C, 3-I#; (>- !-C9;#IH-. "#. ,#C>"++-#;-. 9!I;I#"+ :!9:9#-#(, >"S (>- -QC+,SIE-, C+-"! "#. E-S(-. S("(,(9!J !I;>( (9 (>- "D"!. 9) (>- #"I"7I:( III :!9<-C(B

II. !-S:9#.-#(S >"E- " S("(,(9!J .,(J (9 :!9(-C( :-(I(I9#-! "-.C "S (>,#C>"++-#;-. 9!I;I#"+ :!9:9#-#( "S " !-S,+( 9) (>- S,:!-M- C9,!(5S #,++I)IC"(I9# 9) (>- "D"!. 9) (>- #"I"7I:( III :!9<-C( (9 :I"(C9FB andG III. !-S:9#.-#(S >"E- #9 +-;"+ 3"SIS 9! ",(>9!I(J (9 ("=- 9E-! (>- #"I"7I:( III :!9<-C(, (9 (>- -QC+,SI9# 9) :-(I(I9#-! "-.C, 9! (9 "D"!. (>- :!9<-C( (9 (>I!. :"!(I-S./$ "t the cru' of the :etition of "-.C is its claim that, being the recogni*ed and unchallenged original proponent of the #"I" I:( III :ro4ect, it has the e'clusive, clear, and vested statutory right to the award thereof. >owever, the :etition of "-.C should be dismissed for lac? of merit, being as it is, substantially and procedurally flawed. S*BSTANTI>E INFIRMITY " petition for mandamus is governed by Section 3 of !ule 61 of the !ules of Civil :rocedure, which reads R SEC. 3. Petition for mandamus. R Dhen any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically en4oins as a duty resulting from an office, trust, or station, or unlawfully e'cludes another from the use and en4oyment of a right or office to which such other is entitled, and there is no other plain, speedy and ade uate remedy in the ordinary course of law, the person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that 4udgment be rendered commanding the respondent, immediately or some other time to be specified by the court, to do the act re uired to be done to protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the respondent. It is well7established in our 4urisprudence that only specific legal rights are enforceable by mandamus, that the right sought to be enforced must be certain and clear, and that the writ will not issue in cases where the right is doubtful. <ust as fundamental is the principle governing the issuance of mandamus that the duties to be performed must be such as are clearly and peremptorily en4oined by law or by reason of official station. /2 " rule long familiar is that mandamus never issues in doubtful cases. It re uires a showing of a complete and clear legal right in the petitioner to the performance of ministerial acts. In varying language, the principle echoed and reechoed is that legal rights may be enforced by mandamus only if those rights are well7defined, clear and certain. 9therwise, the mandamus petition must be dismissed./& (he right that "-.C is see?ing to enforce is supposedly en4oined by Section 67" of !epublic "ct #o. 6&1$, %0 as amended by !epublic "ct #o. $$/2, on unsolicited proposals, which provides R S-C. 67". >nsolicited proposals. R ,nsolicited proposals for pro4ects may be accepted by any government agency or local government unit on a negotiated basis8 :rovided, (hat, all the following conditions are met8 @/A such pro4ects involve a new concept or technology andLor are not part of the list of priority pro4ects, @%A no direct government guarantee, subsidy or e uity is re uired, and @3A the government agency or local government unit has invited by publication, for three @3A consecutive wee?s, in a newspaper of general circulation, comparative or competitive proposals and no other proposal is received for a period of si'ty @60A wor?ing days8 :rovided, further, (hat in the event another proponent submits a lower price proposal, the original proponent shall have the right to match the price within thirty @30A wor?ing days. In furtherance of the afore7 uoted provision, the Implementing !ules and !egulations @I!!A of !epublic "ct #o. 6&1$, as amended by !epublic "ct #o. $$/2, devoted the entire !ule /0 to ,nsolicited :roposals, pertinent portions of which are reproduced below R

Sec. /0./. !e uisites for ,nsolicited :roposals. R "ny "gencyL+;, may accept unsolicited proposals on a negotiated basis provided that all the following conditions are met8 a. the pro4ect involves a new concept or technology andLor is not part of the list of priority pro4ectsB b. no direct government guarantee, subsidy or e uity is re uiredB and c. the "gencyL+;, concerned has invited by publication, for three @3A consecutive wee?s, in a newspaper of general circulation, comparative or competitive proposals and no other proposal is received for a period of si'ty @60A wor?ing days. In the event that another pro4ect proponent submits a price proposal lower than that submitted by the original proponent, the latter shall have the right to match said price proposal within thirty @30A wor?ing days. Should the original proponent fail to match the lower price proposal submitted within the specified period, the contract shall be awarded to the tenderer of the lowest price. 9n the other hand, if the original pro4ect proponent matches the submitted lowest price within the specified period, he shall be immediately be awarded the pro4ect. '''' Sec. /0.6. -valuation of ,nsolicited :roposals. R (he "gencyL+;, is tas?ed with the initial evaluation of the proposal. (he "gencyL+;, shall8 /A appraise the merits of the pro4ectB %A evaluate the ualification of the proponentB and 3A assess the appropriateness of the contractual arrangement and reasonableness of the ris? allocation. (he "gencyL+;, is given si'ty @60A days to evaluate the proposal from the date of submission of the complete proposal. Dithin this 607day period, the "gencyL+;,, shall advise the proponent in writing whether it accepts or re4ects the proposal. A,,e1("n,e :e"n' ,o::.(:en( o/ (+e A&en,8?LG* (o 1u0'ue (+e 10o;e,( "n 0e,o&n.(.on o/ (+e 10o1onen( "' (+e @o0.&.n"- 10o1onen(.@ A( (+.' 1o.n(, (+e A&en,8?LG* <.-- no -on&e0 en(e0(".n o(+e0 '.:.-"0 10o1o'"-' un(.- (+e 'o-.,.("(.on o/ ,o:1"0"(.Ae 10o1o'"-'. (he implementation of the pro4ect, however, is still contingent primarily on the approval of the appropriate approving authorities consistent with Section %.$ of these I!!, the agreement between the original proponent and the "gencyL+;, of the contract terms, and the approval of the contract by the FInvestment Coordination Committee @ICCAG or +ocal Sanggunian. '''' Sec. /0.&. #egotiation Dith the 9riginal :roponent. R I::e ."(e-8 "/(e0 ICC?Lo,"- S"n&&un."n4' ,-e"0"n,e o/ (+e 10o;e,(, (+e A&en,8?LG* '+"-- 10o,ee <.(+ (+e .n9 e1(+ ne&o(."(.on o/ (+e 10o;e,( ',o1e, .:1-e:en("(.on "00"n&e:en(' "n ,on,e''.on "&0ee:en(, "-- o/ <+.,+ <.-- 7e u'e .n (+e Te0:' o/ Re/e0en,e /o0 (+e 'o-.,.("(.on o/ ,o:1"0"(.Ae 10o1o'"-' . (he "gencyL+;, and the proponent are given ninety @&0A days upon receipt of ICC5s approval of the pro4ect to conclude negotiations. (he "gencyL+;, and the original proponent shall negotiate in good faith. 2o<eAe0, '+ou(+e0e 7e un0e'o-A"7-e .//e0en,e' u0.n& (+e ne&o(."(.on', (+e A&en,8?LG* '+"-- +"Ae (+e o1(.on (o 0e;e,( (+e 10o1o'"- "n 7. ou( (+e 10o;e,(. On (+e o(+e0 +"n , ./ (+e ne&o(."(.on .' 'u,,e''/u--8 ,on,-u e , (+e o0.&.n"- 10o1onen( '+"-- (+en 7e 0e=u.0e (o 0e/o0:"( "n 0e'u7:.( .(' 10o1o'"- .n ",,o0 "n,e <.(+ (+e 0e=u.0e:en(' o/ (+e Te0:' o/ Re/e0en,e (o /",.-.("(e ,o:1"0.'on <.(+ (+e ,o:1"0"(.Ae 10o1o'"-'. T+e A&en,8?LG* '+"-- A"-. "(e (+e 0e/o0:"((e 10o1o'"- ./ .( :ee(' (+e 0e=u.0e:en(' o/ (+e TOR 10.o0 (o (+e .''u"n,e o/ (+e .nA.("(.on /o0 ,o:1"0"(.Ae 10o1o'"-'. '''' Sec. /0.//. Invitation for Comparative :roposals. (he "gencyL+;, shall publish the invitation for comparative or competitive proposals only after ICCL+ocal Sanggunian issues a no ob4ection clearance of the draft contract. (he invitation for comparative or competitive proposals should be published at least once every wee? for three @3A wee?s in at least one @/A newspaper of general circulation. It shall indicate the time, which should not be earlier than the last date of publication, and place where tenderLbidding

documents could be obtained. It shall li?ewise e'plicitly specify a time of si'ty @60A wor?ing days rec?oned from the date of issuance of the tenderLbidding documents upon which proposals shall be received. 3eyond said deadline, no proposals shall be accepted. " pre7bid conference shall be conducted ten @/0A wor?ing days after the issuance of the tenderLbidding documents. Sec. /0./%. :osting of 3id 3ond by 9riginal :roponent. R (he original proponent shall be re uired at the date of the first date of the publication of the invitation for comparative proposals to 'u7:.( " 7. 7on e=u"- (o (+e ":oun( "n .n (+e /o0: 0e=u.0e o/ (+e ,+"--en&e0' . Sec. /0./3. Simultaneous Mualification of the 9riginal :roponent. R (he "gencyL+;, shall ualify the original proponent based on the provisions of !ule 1 hereof, within thirty @30A days from start of negotiation. )or consistency, the evaluation criteria used for ualifying the original proponent should be the same criteria used for ualifying the original proponent should be the criteria used in the (erms of !eference for the challengers. '''' Sec. /0./6. .isclosure of the :rice :roposal. R (he disclosure of the price proposal of the original proponent in the (ender .ocuments will be left to the discretion of the "gencyL+;,. >owever, if it was not disclosed in the (ender .ocuments, the original proponent5s price proposal should be revealed upon the opening of the financial proposals of the challengers. T+e 0.&+( o/ (+e o0.&.n"- 10o1onen( (o :"(,+ (+e 7e'( 10o1o'"- <.(+.n (+.0(8 B30C <o0D.n& "8' '("0(' u1on o//.,."- no(./.,"(.on 78 (+e A&en,8?LG* o/ (+e :o'( " A"n("&eou' /.n"n,."- 10o1o'"- . @-mphasis ours.A In her sponsorship speech on Senate 3ill #o. /126 @the precursor of !epublic "ct #o. $$/2A, then Senator @now :resident of the !epublic of the :hilippinesA ;loria Macapagal7"rroyo e'plained the reason behind the proposed amendment that would later become Section 67" of !epublic "ct #o. 6&1$, as amended by !epublic "ct #o. $$/28 (he ob4ect of the amendment is to protect proponents which have already incurred costs in the conceptual design and in the preparation of the proposal, and which may have adopted an imaginative method of construction or innovative concept for the proposal. (he amendment also aims to harness the ingenuity of the private sector to come up with solutions to the country5s infrastructure problems. %/ It is irrefragable that Section 67" of !epublic "ct #o. 6&1$, as amended by !epublic "ct #o. $$/2, and Section /0 of its I!!, accord certain rights or privileges to the original proponent of an unsolicited proposal for an infrastructure pro4ect. (hey are meant to encourage private sector initiative in conceptuali*ing infrastructure pro4ects that would benefit the public. #evertheless, none of these rights or privileges would 4ustify the automatic award of the #"I" I:( III :ro4ect to "-.C after its previous award to :I"(C9 was declared null and void by this Court in A(an. (he rights or privileges of an original proponent of an unsolicited proposal for an infrastructure pro4ect are never meant to be absolute. 9therwise, the original proponent can hold the ;overnment hostage and secure the award of the infrastructure pro4ect based solely on the fact that it was the first to submit a proposal. (he absurdity of such a situation becomes even more apparent when considering that the proposal is unsolicited by the ;overnment. (he rights or privileges of an original proponent depends on compliance with the procedure and conditions e'plicitly provided by the statutes and their I!!. "n unsolicited proposal is sub4ect to evaluation, after which, the government agency or local government unit @+;,A concerned may accept or re4ect the proposal outright. ,nder Section /0.6 of the I!!, the "acceptance" of the unsolicited proposal by the agencyL+;, is limited to the "commitment of the FaGgencyL+;, to pursue the pro4ect and recognition of the proponent as the 5original proponent.5" ,pon acceptance then of the unsolicited proposal, the original proponent is 0e,o&n.!e as such but no award is yet made to it. (he ,o::.(:en( of the agencyL+;, upon acceptance of the unsolicited proposal is to the 1u0'u.( o/ (+e

10o;e,(, regardless of to whom it shall subse uently award the same. (he acceptance of the unsolicited proposal only precludes the agencyL+;, from entertaining other similar proposals un(.- the solicitation of comparative proposals. Consistent in both the statutes and the I!! is the re uirement that invitations be published for comparative or competitive proposals. (herefore, it is mandatory that a public bidding be held before the awarding of the pro4ect. (he negotiations between the agencyL+;, and the original proponent, as provided in Section /0.& of the I!!, is for the sole purpose of coming up with draft agreements, which shall be used in the (erms of !eference @(9!A for the solicitation of comparative proposals. -ven at this point, there is no definite commitment made to the original proponent as to the awarding of the pro4ect. In fact, the same I!! provision even gives the concerned agencyL+;,, in case of unresolvable differences during the negotiations, the option to re4ect the original proponent5s proposal and 4ust bid out the pro4ect. ;enerally, in the course of processing an unsolicited proposal, the original proponent is treated in much the same way as all other prospective bidders for the proposed infrastructure pro4ect. It is re uired to reformat and resubmit its proposal in accordance with the re uirements of the (9!. %% It must submit a bid bond e ual to the amount and in the form re uired of the challengers. %3 Its ualification shall be evaluated by the concerned agencyL+;,, using evaluation criteria in accordance with !ule 1%6 of the I!!, and which shall be the same criteria to be used in the (9! for the challengers.%1 (hese re uirements ensure that the public bidding under !ule /0 of I!! on ,nsolicited :roposals still remain in accord with the three principles in public bidding, which are8 the offer to the public, an opportunity for competition, and a basis for e'act comparison of bids. %6 (he special rights or privileges of an original proponent thus come into play only when there are other proposals submitted during the public bidding of the infrastructure pro4ect. "s can be gleaned from the plain language of the statutes and the I!!, the original proponent has8 @/A the right to match the lowest or most advantageous proposal within 30 wor?ing days from notice thereof, and @%A in the event that the original proponent is able to match the lowest or most advantageous proposal submitted, then it has the right to be awarded the pro4ect. (he second right or privilege is contingent upon the actual e'ercise by the original proponent of the first right or privilege. 3efore the pro4ect could be awarded to the original proponent, he must have been able to match the lowest or most advantageous proposal within the prescribed period. >ence, when the original proponent is able to timely match the lowest or most advantageous proposal, with all things being e ual, it shall en4oy preference in the awarding of the infrastructure pro4ect. (his is the e'tent of the protection that +egislature intended to afford the original proponent, as supported by the e'change between Senators #eptali ;on*ales and Sergio 9smePa during the Second !eading of Senate 3ill #o. /1268 Senator ;on*ales8 '''' (he concept being that in case of an unsolicited proposal and nonetheless public bidding has been held, then E(+e o0.&.n"- 10o1onen(F '+"--, .n e//e,(, 7e &0"n(e <+"( .' (+e e=u.A"-en( o/ (+e 0.&+( o/ /.0'( 0e/u'"- 78 o//e0.n& " 7. <+.,+ '+"-- e=u"- o0 7e((e0 (+e 7. o/ (+e <.nn.n& 7. e0 <.(+.n " 1e0.o of, let us say, 30 days from the date of bidding. Senator 9smePa8 '''' (o capture the tenor of the proposal of the distinguished ;entleman, a subse uent paragraph has to be added which says, @IF T2ERE IS A COMPETITI>E PROPOSAL, T2E ORIGINAL PROPONENT S2ALL 2A>E T2E RIG2T TO EG*AL T2E TERMS AND CONDITIONS OF T2E COMPETITI>E PROPOSAL.@

In other words, if there is nobody who will submit a competitive proposal, then nothing is lost. -verybody ?nows it, and it is open and transparent. 3ut if somebody comes in with another proposal R and because it was the idea of the original proponent R that proponent now has the right to e ual the terms of the original proposal. S-#"(9! ;9#H"+-S8 (hat is the idea, Mr. :resident. 3ecause it seems to me that it is utterly unfair for one who has conceived an idea or a concept, spent and invested in feasibility studies, in the drawing of plans and specifications, and the pro4ect is submitted to a public bidding, then somebody will win on the basis of plans and specifications and concepts conceived by the original proponent . 2e '+ou- "( -e"'( 7e &.Aen (+e 0.&+( (o 'u7:.( "n e=u"-.!.n& 7. . ' ' '.%$ @-mphasis ours.A "s already found by this Court in the narration of facts in A(an, "-.C failed to match the more advantageous proposal submitted by :I"(C9 by the time the 307day wor?ing period e'pired on %2 #ovember /&&6B %2 and, without e'ercising its right to match the most advantageous proposal, it cannot now lay claim to the award of the pro4ect. (he bidding process as to the #"I" I:( III :ro4ect was already over after the award thereof to :I"(C9, even if eventually, the said award was nullified and voided. (he nullification of the award to :I"(C9 did not revive the proposal nor re7open the bidding. "-.C cannot insist that this Court turn bac? the hands of time and award the #"I" I:( III :ro4ect to it, as if the bid of :I"(C9 never e'isted and the award of the pro4ect to :I"(C9 did not ta?e place. Such is a simplistic approach to a very comple' problem that is the #"I" I:( III :ro4ect. In his separate opinion in A(an, former Chief <ustice "rtemio E. :anganiban noted that "F(Ghere was effectively no public bidding to spea? of, the en(.0e 7. .n& 10o,e'' having been flawed and tainted /0o: (+e Ae08 ou('e(, therefore, the award of the concession to :aircargo5s successor :iatco was void, and the Concession "greement e'ecuted with the latter was li?ewise void a' initio. ' ' '.%&" @-mphasis ours.A In consideration of such a declaration that the entire bidding process was flawed and tainted from the very beginning, then, it would be senseless to re7open the same to determine to whom the pro4ect should have been properly awarded to. (he process and all proposals and bids submitted in participation thereof, and not 4ust :I"(C95s, were placed in doubt, and it would be foolhardy for the ;overnment to rely on them again. "t the very least, it may be declared that there was a failure of public bidding. 30 In addition, :I"(C9 is already close to finishing the building of the structures comprising #"I" I:( III, 3/ a fact that this Court cannot simply ignore. (he #"I" I:( III :ro4ect was proposed, sub4ected to bidding, and awarded as a build7 operate7transfer @39(A pro4ect. " 39( pro4ect is defined as R " contractual arrangement whereby the pro4ect proponent underta?es the ,on'(0u,(.on, .n,-u .n& /.n"n,.n&, of a given infrastructure facility, and the o1e0"(.on "n :".n(en"n,e thereof. (he pro4ect proponent operates the facility over a fi'ed term during which it is allowed to charge facility users appropriate tolls, fees, rentals, and charges not e'ceeding those proposed in its bid or as negotiated and incorporated in the contract to enable the pro4ect proponent to recover its investment, and operating and maintenance e'penses in the pro4ect. (he pro4ect proponent (0"n'/e0' the facility to the government agency or local government unit concerned at the end of the fi'ed term that shall not e'ceed fifty @10A years. (his shall include a supply7and7operate situation which is a contractual arrangement whereby the supplier of e uipment and machinery for a given infrastructure facility, if the interest of the ;overnment so re uires, operates the facility providing in the process technology transfer and training to )ilipino nationals.3%@-mphasis ours.A (he original proposal of "-.C is for a 39( pro4ect, in which it undertoo? to 'uild, operate, and transfer to the ;overnment the #"I" I:( III facilities. (his is clearly no longer applicable or practicable under the e'isting circumstances. It is undeniable that the physical structures comprising the #"I" I:( III :ro4ect are already substantially built, and there is almost nothing left for "-.C to construct. >ence, the pro4ect could no longer be awarded to "-.C based on the theory of legal impossibility of performance.

#either can this Court revert to the original proposal of "-.C and award to it only the une'ecuted components of the #"I" I:( III :ro4ect. Dhoever shall assume the obligation to operate and maintain #"I" I:( III and to subse uently transfer the same to the ;overnment @in case the operation is not assumed by the ;overnment itselfA shall have to do so on terms and conditions that would necessarily be different from the original proposal of "-.C. It will no longer include any underta?ing to build or construct the structures. "n amendment of the proposal of "-.C to address the present circumstances is out of the uestion since such an amendment would be substantive and tantamount to an entirely new proposal, which must again be sub4ected to competitive bidding. "-.C5s offer to reimburse the ;overnment the amount it shall pay to :I"(C9 for the #"I" I:( III :ro4ect facilities, as shall be determined in the ongoing e'propriation proceedings before the !(C of :asay City, cannot restore "-.C to its status and rights as the pro4ect proponent. It must be stressed that the law re uires the pro4ect proponent to underta?e the construction of the pro4ect, .n,-u .n& financingB financing, thus, is but a component of the construction of the structures and not the entirety thereof. Moreover, this "reimbursement arrangement" may even result in the un4ust enrichment of "-.C. In its original proposal, "-.C offered to construct the #"I" I:( III facilities for N310 million or :& billion at that time. In e'change, "-.C would share a certain percentage of the gross revenues with, and pay a guaranteed annual income to the ;overnment upon operation of the #"I" I:( III. In +in(o"on, the proferred value of the #"I" I:( III facilities was already determined to be :3 billion. It seems improbable at this point that the balance of the value of said facilities for which the ;overnment is still obligated to pay :I"(C9 shall reach or e'ceed :6 billion. (here is thus the possibility that the ;overnment shall be re uired to pay :I"(C9 an amount less than :& billion. If "-.C is to reimburse the ;overnment only for the said amount, then it shall ac uire the #"I" I:( III facilities for a price less than its original proposal of :& billion. Jet, per the other terms of its original proposal, it may still recoup a capital investment of :& billion plus a reasonable rate of return of investment. " change in the agreed value of the #"I" I:( III facilities already built cannot be done without a corresponding amendment in the other terms of the original proposal as regards profit sharing and length of operationB otherwise, "-.C will be un4ustly enriched at the e'pense of the ;overnment. "gain, as aptly stated by former Chief <ustice :anganiban, in his separate opinion in A(an8 If the :I"(C9 contracts are 4un?ed altogether as I thin? they should be, should not "-.C automatically be considered the winning bidder and therefore allowed to operate the facilityS My answer is a stone7cold 5#o.5 "-.C never won the bidding, never signed any contract, and never built any facility. Dhy should it be allowed to automaticall" step in and benefit from the greed of anotherS 33 (he claim of "-.C to the award of the #"I" I:( III :ro4ect, after the award thereof to :I"(C9 was set aside for being null and void, grounded solely on its being the original proponent of the pro4ect, is specious and an apparent stretch in the interpretation of Section 67" of !epublic "ct #o. 6&1$, as amended by !epublic "ct #o. $$/2, and !ule /0 of the I!!. In all, 4ust as "-.C has no legal right to the #"I" I:( III :ro4ect, corollarily, it has no legal right over the #"I" I:( III facility. "-.C does not own the #"I" I:( III facility, which this Court already recogni*ed in +in(o"on as owned by :I"(C9B nor does "-.C own the land on which #"I" I:( III stands, which is undisputedly owned by the !epublic through the 3ases Conversion .evelopment "uthority @3C."A. "-.C did not fund any portion of the construction of #"I" I:( III, which was entirely funded by :I"(C9. "-.C also does not have any ?ind of lien over #"I" I:( III or any ?ind of legal entitlement to occupy the facility or the land on which it stands. (herefore, nothing that the ;overnment has done or will do in relation to the pro4ect could possibly pre4udice or in4ure "-.C. "-.C then does not possess any legal personality to interfere with or restrain the activities of the ;overnment as regards #"I" I:( III. #either does it have the legal personality to demand that the ;overnment deliver or sell to it the #"I" I:( III facility despite the e'press willingness of "-.C to reimburse the ;overnment the proferred amount it had paid :I"(C9 and complete #"I" I:( III facility at its own cost. "-.C invo?es the Memorandum of "greement, purportedly e'ecuted between the .9(C and "-.C on %6 )ebruary /&&6, following the approval of the #"I" I:( III :ro4ect by the #ational -conomic .evelopment "uthority 3oard in a !esolution dated /3 )ebruary /&&6, which provided for the following commitments by the parties8

a. commitment of !espondent .9(C to target mid /&&6 as the time frame for the formal award of the pro4ect and commencement of site preparation and construction activities with the view of a partial opening of the (erminal by the first uarter of /&&2B b. commitment of !espondent .9(C to pursue the pro4ect envisioned in the unsolicited proposal and commence and conclude as soon as possible negotiations with :etitioner "-.C on the 39( contractB c. commitment of !espondent .9(C to ma?e appropriate arrangements through which the formal award of the pro4ect can be affectedFBG d. commitment of :etitioner "-.C to a fast trac? approach to pro4ect implementation and to commence negotiations with its financial partners, investors and creditorsB e. commitment of !espondent .9(C and :etitioner "-.C to fast trac? evaluation of competitive proposals, screening and eliminating nuisance comparative bidsB 36 It is important to note, however, that the document attached as "nne' "-" to the :etition of "-.C is a "certified photocopy of records on file." (his Court cannot give much weight to said document considering that its e'istence and due e'ecution have not been established. It is not notari*ed, so it does not en4oy the presumption of regularity of a public document. It is not even witnessed by anyone. It is not certified true by its supposed signatories, Secretary <esus 3. ;arcia, <r. for .9(C and Chairman >enry Sy, Sr. for "-.C, or by any government agency having its custody. It is certified as a photocopy of records on file by an "tty. Cecilia +. :esayco, the Corporate Secretary, of an unidentified corporation. -ven assuming for the sa?e of argument, that the said Memorandum of "greement, is in e'istence and duly e'ecuted, it does little to support the claim of "-.C to the award of the #"I" I:( III :ro4ect. (he commitments underta?en by the .9(C and "-.C in the Memorandum of "greement may be simply summari*ed as a commitment to comply with the procedure and re uirements provided in !ules /0 and // of the I!!. It bears no commitment on the part of the .9(C to award the #"I" I:( III :ro4ect to "-.C. 9n the contrary, the document includes e'press stipulations that negate any such government obligation. (hus, in the first clause, 31 the .9(C affirmed its commitment to pursue, implement and complete the #"I" I:( III :ro4ect on or before /&&2, noticeably without mentioning that such commitment was to pursue the pro4ect specifically with "-.C. +i?ewise, in the second clause, 36 it was emphasi*ed that the .9(C shall pursue the pro4ect under !ules /0 and // of the I!! of !epublic "ct #o. 6&1$, as amended by !epublic "ct #o. $$/2. "nd most significantly, the tenth clause of the same document provided8 /0. #othing in this Memorandum of ,nderstanding shall be understood, interpreted or construed as permitting, allowing or authori*ing the circumvention of, or non7compliance with, or as waiving, the provisions of, and re uirements and procedures under, e'isting laws, rules and regulations. 3$ "-.C further decries that8 %6. In carrying out its commitments under the .9(C7"-.C M9,, :etitioner "-.C undertoo? the following activities, incurring in the process tremendous costs and e'penses. a. pre7 ualified 66 design and contractor firms to assist in the #"I"7I:( III :ro4ectB b. appointed a consortium of si' @6A local ban?s as its financial advisor in <une /&&6B c. hired the services of ;"I" South, Inc. to prepare the :ro4ect .escription !eport and to obtain the -nvironmental Clearance Certificate @-CCA for the #"I"7I:( III :ro4ectB

d. coordinated with the "irline 9perators "ssociation, 3ases Conversion .evelopment "uthority, :hilippine "ir )orce, 3ureau of Customs, 3ureau of Immigration, relative to their particular re uirements regarding the #"I"7I:( III F:Gro4ectB and e. negotiated and entered into firm commitments with Ital (hai, Marubeni Corporation and Mitsui Corporation as e uity partners.32 Dhile the Court may concede that "-.C, as the original proponent, already e'pended resources in its preparation and negotiation of its unsolicited proposal, the mere fact thereof does not entitle it to the instant award of the #"I" I:( III :ro4ect. "-.C was aware that the said pro4ect would have to undergo public bidding, and there e'isted the possibility that another proponent may submit a more advantageous bid which it cannot matchB in which case, the pro4ect shall be awarded to the other proponent and "-.C would then have no means to recover the costs and e'penses it already incurred on its unsolicited proposal. It was a given business ris? that "-.C ?nowingly undertoo?. "dditionally, the very defect upon which this Court nullified the award of the #"I" I:( III :ro4ect to :I"(C9 similarly taints the unsolicited proposal of "-.C. (his Court found :aircargo Consortium financially dis ualified after stri?ing down as incorrect the :3"C5s assessment of the consortium5s financial capability. "ccording to the Court5sratio in A(an8 "s the minimum pro4ect cost was estimated to be ,SN310,000,000.00 or roughly :&,/23,610,000.00, the :aircargo Consortium had to show to the satisfaction of the :3"C that it had the ability to provide the minimum e uity for the pro4ect in the amount of at least P2,6HH,03H,000.00. '''' (hus, the ma'imum amount that Security 3an? could validly invest in the :aircargo Consortium is only:1%2,1%1,616.11, representing /1I of its entire net worth. (he total net worth therefore of the :aircargo Consortium, after considering the :"I.:u: ":oun(' that may be validly invested by each of its members is PHH%,3%4,%61.HH o0 on-8 $.0%J o/ (+e 10o;e,( ,o'( , an amount substantially less than the prescribed minimum e uity investment re uired for the pro4ect in the amount of :%,$11,0&1,000.00 or 30I of the pro4ect cost. (he purpose of pre7 ualification in any public bidding is to determine, at the earliest opportunity, the ability of the bidder to underta?e the pro4ect. (hus, with respect to the bidder5s financial capacity at the pre7 ualification stage, the law re uires the government agency to e'amine and determine the ability of the bidder to fund the entire cost of the pro4ect 78 ,on'. e0.n& (+e :"I.:u: ":oun(' (+"( e",+ 7. e0 :"8 .nAe'( .n (+e 10o;e,( "( (+e (.:e o/ 10e9=u"-./.,"(.on. '''' (hus, if the :"I.:u: ":oun( o/ e=u.(8 that a bidder may invest in the pro4ect "( (+e (.:e (+e 7. ' "0e 'u7:.((e falls short of the minimum amounts re uired to be put up by the bidder, said bidder should be properly dis ualified. Considering that at the pre7 ualification stage, the ma'imum amounts which the :aircargo Consortium may invest in the pro4ect fell short of the minimum amounts prescribed by the :3"C, we hold that :aircargo Consortium was not a ualified bidder. (hus the award of the contract by the :3"C to the :aircargo Consortium, a dis ualified bidder, is null and void. 3& :ursuant to the above7 uoted ruling, "-.C, li?e the :aircargo Consortium, would not be financially ualified to underta?e the #"I" I:( III :ro4ect. 3ased on "-.C5s own submissions to the ;overnment, it had then a paid7in capital of only P1H0,000,000.00,60 which was less than the PHH%,3%4,%61.HH that :aircargo Consortium was capable of investing in the #"I" I:( III :ro4ect, and even far less that what this Court prescribed as the minimum e uity investment re uired for the pro4ect in the amount of P2,6HH,03H,000.00 or 30I of the pro4ect cost. "-.C had not

sufficiently demonstrated that it would have been financially ualified to underta?e the pro4ect "( (+e (.:e o/ 'u7:.''.on o/ (+e 7. '. Instead, "-.C too? pains to present to this Court that allowing it to ta?e over and operate #"I" I:( III at present would be beneficial to the ;overnment. (his Court must point out, however, that "-.C is precisely ma?ing a new proposal befitting the current status of the #"I" I:( III :ro4ect, contrary to its own argument that it is merely invo?ing its original 39( proposal. "nd it is not for this Court to evaluate "-.C5s new proposal and assess whether it would truly be most beneficial for the ;overnment, for the same is an e'ecutive function rather than 4udicial, for which the statutes and regulations have sufficiently provided standards and procedures for evaluation. It can even be said that if the award of the #"I" I:( III :ro4ect was merely a matter of choosing between :I"(C9 and "-.C @which it is notA, there could be no doubt that :I"(C9 is more ualified to operate the structure that :I"(C9 itself built and :I"(C95s offer of :/$.$1 3illion in annual guaranteed payments to the ;overnment is far better that "-.C5s offer of :/31 Million. >ence, "-.C is not entitled to a writ of mandamus, there being no specific, certain, and clear legal right to be enforced, nor duty to be performed that is clearly and peremptorily en4oined by law or by reason of official station. PROCED*RAL LAPSES In addition to the substantive wea?nesses of the :etition of "-.C, the said :etition also suffers from procedural defects. "-.C revived its hope to ac uire the #"I" I:( III :ro4ect when this Court promulgated its .ecision in A(an on 1 May %003. (he said .ecision became final and e'ecutory on /$ )ebruary %006 upon the denial by this Court of the Motion for +eave to )ile Second Motion for !econsideration submitted by :I"(C9. It is this .ecision that declared the award of the #"I" I:( III :ro4ect to :I"(C9 as null and voidB without the same, then the award of the #"I" I:( III :ro4ect to :I"(C9 would still subsist and other persons would remain precluded from ac uiring rights thereto, including "-.C. Irrefutably, the present claim of "-.C is rooted in the .ecision of this Court in A(an. >owever, "-.C filed the :etition at bar only %0 months after the promulgation of the .ecision in A(an on 1 May %003. It must be emphasi*ed that under Sections % and 3, !ule 61 of the revised !ules of Civil :rocedure, petitions for prohibition and mandamus , such as in the instant case, can only be resorted to when there is no other plain, speedy and ade uate remedy for the party in the ordinary course of law. In Cru0 v. Court of Appeals,6/ this Court elucidates that R "lthough !ule 61 does not specify any period for the filing of a petition for certiorari and mandamus, it must, nevertheless, be filed within a reasonable time. In certiorari cases, the definitive rule now is that such reasonable time is <.(+.n (+0ee :on(+' from the commission of the complained act. (he same rule should apply to mandamus cases. (he unreasonable delay in the filing of the petitioner5s mandamus suit unerringly negates any claim that the application for the said e'traordinary remedy was the most e'peditious and speedy available to the petitioner. @-mphasis ours.A "s the revised !ules now stand, a petition for certiorari may be filed within 60 days from notice of the 4udgment, order or resolution sought to be assailed.6% !easonable time for filing a petition for mandamus should li?ewise be for the same period. (he filing by the "-.C of its petition for mandamus %0 months after its supposed right to the pro4ect arose is evidently beyond reasonable time and negates any claim that the said petition for the e'traordinary writ was the most e'peditious and speedy remedy available to "-.C.

"-.C contends that the "reasonable time" within which it should have filed its petition should be rec?oned only from %/ September %001, the date when "-.C received the letter from the 9ffice of the Solicitor ;eneral refusing to recogni*e the rights of "-.C to provide the available funds for the completion of the #"I" I:( III :ro4ect and to reimburse the costs of the structures already built by :I"(C9. It has been unmista?able that even long before said letter R especially when the ;overnment instituted with the !(C of :asay City e'propriation proceedings for the #"I" I:( III on %/ .ecember %006 R that the ;overnment would not recogni*e any right that "-.C purportedly had over the #"I" I:( III :ro4ect and that the ;overnment is intent on ta?ing over and operating the #"I" I:( III itself. "nother strong argument against the "-.C5s :etition is that it is already barred by res 3udicata. In A(an,63 it was noted that on /6 "pril /&&$, the "-.C instituted before the !(C of :asig City Civil Case #o. 66%/3, a :etition for the .eclaration of #ullity of the :roceedings, Mandamus and In4unction, against the .9(C Secretary and the :3"C Chairman and members. In Civil Case #o. 66%/3, "-.C prayed for8 iA the nullification of the proceedings before the .9(C7:3"C, including its decision to ualify :aircargo Consortium and to deny :etitioner "-.C5s access to :aircargo Consortium5s technical and financial bid documentsB iiA the protection of :etitioner "-.C5s right to match considering the void challenge bid of the :aircargo Consortium and the denial by .9(C7:3"C of access to information vital to the effective e'ercise of its right to matchB iiiA the declaration of the absence of any other ualified proponent submitting a competitive bid in an unsolicited proposal.66 .espite the pendency of Civil Case #o. 66%/3, the .9(C issued the notice of award for the #"I" I:( III :ro4ect to :I"(C9 on & <uly /&&$. (he .9(C and :I"(C9 also e'ecuted on /% <uly /&&$ the /&&$ Concession "greement. "-.C then alleges that8 ?A 9n September 3, /&&2, then :res. <oseph -4ercito -strada convened a meeting with the members of the 3oard of :etitioner "-.C to convey his "desire" for the dismissal of the mandamus case filed by :etition "-.C and in fact urged "-.C to immediately withdraw said case. lA (he :resident5s direct intervention in the disposition of this mandamus case was a clear imposition that :etitioner "-.C had not choice but to accept. (o do otherwise was to ta?e a confrontational stance against the most powerful man in the country then under the ris? of catching his ire, which could have led to untold conse uences upon the business interests of the sta?eholders in "-.C. (hus, :etitioner "-.C was constrained to agree to the signing of a <oint Motion to .ismiss and to the filing of the same in court. mA ,nbe?nownst to "-.C at that time was that simultaneous with the signing of the <uly /%, /&&$ Concession "greement, the .9(C and :I"(C9 e'ecuted a secret side agreement grossly pre4udicial and detrimental to the interest of ;overnment. It stipulated that in the event that the Civil Case filed by "-.C on "pril /6, /&&$ is not resolved in a manner favorable to the ;overnment, :I"(C9 shall be entitled to full reimbursement for all costs and e'penses it incurred in order to obtain the #"I" I:( III 39( pro4ect in an amount not less than 9ne >undred -ighty Million :esos @:hp /20,000,000.00A. (his was apparently the reason why the :resident was determined to have "-.C5s case dismissed immediately. nA 9n )ebruary &, /&&&, after the "mended and !estated Concession "greement @hereinafter referred to as ""!C""A was signed without :etitioner "-.C5s ?nowledge, :etitioner "-.C signed a <oint Motion to

.ismiss upon the representation of the .9(C that it would provide "-.C with a copy of the /&&$ Concession "greement. ' ' '.61 9n 30 "pril /&&&, the !(C of :asig City issued an 9rder dismissing <.(+ 10e;u .,e Civil Case #o. 66%/3 upon the e'ecution by the parties of a <oint Motion to .ismiss. "ccording to the <oint Motion to .ismiss R (he parties, assisted by their respective counsel, respectfully state8 /. :hilippine International "ir (erminals Company, Inc. @":I"(C9"A and the respondents have submitted to petitioner, through the 9ffice of the -'ecutive Secretary, MalacaPang, a copy of the Concession "greement which they e'ecuted for the construction and operation of the #inoy " uino International "irport International :assenger (erminal III :ro4ect @"#"I" I:( III :ro4ectA, which petitioner re uested. %. Conse uently, the parties have e,. e (o ":.,"7-8 'e((-e the instant case and ;o.n(-8 :oAe /o0 (+e .':.''"- thereof without any of the parties admitting liability or conceding to the position ta?en by the other in the instant case. 3. :etitioner, on the other hand, and the respondents, on the other hand, hereby 0e-e"'e "n /o0eAe0 .',+"0&e e",+ o(+e0 /0o: "n8 "n "-- -."7.-.(.e' , direct or indirect, whether criminal or civil, which arose in connection with the instant case. 6. (he parties agree to bear the costs, attorney5s fees and other e'penses they respectively incurred in connection with the instant case. @-mphasis ours.A "-.C, however, invo?es the purported pressure e'erted upon it by then :resident <oseph -. -strada, the alleged fraud committed by the .9(C, and paragraph % in the afore7 uoted <oint Motion to .ismiss to 4ustify the non7 application of the doctrine of res 3udicata to its present :etition. (he elements of res 3udicata, in its concept as a bar by former 4udgment, are as follows8 @/A the former 4udgment or order must be finalB @%A it must be a 4udgment or order on the merits, that is, it was rendered after a consideration of the evidence or stipulations submitted by the parties at the trial of the caseB @3A it must have been rendered by a court having 4urisdiction over the sub4ect matter and the partiesB and @6A there must be, between the first and second actions, identity of parties, of sub4ect matter and of cause of action. 66 "ll of the elements are present herein so as to bar the present :etition. First, the 9rder of the !(C of :asig City, dismissing Civil Case #o. 66%/3, was issued on 30 "pril /&&&. (he <oint Motion to .ismiss, deemed a compromise agreement, once approved by the court is immediately e'ecutory and not appealable.6$ Second, the 9rder of the !(C of :asig City dismissing Civil Case #o. 66%/3 pursuant to the <oint Motion to .ismiss filed by the parties constitutes a 4udgment on the merits. (he <oint Motion to .ismiss stated that the parties were willing to settle the case amicably and, conse uently, moved for the dismissal thereof. It also contained a provision in which the parties R the "-.C, on one hand, and the .9(C Secretary and :3"C, on the other R released and forever discharged each other from any and all liabilities, whether criminal or civil, arising in connection with the case. It is undisputable that the parties entered into a compromise agreement, defined as "a contract whereby the parties, by ma?ing reciprocal concessions, avoid a litigation or put an end to one already commenced.62" -ssentially, it is a contract perfected by mere consent, the latter being manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. 9nce an agreement is stamped with 4udicial approval, it becomes more than a mere contract binding upon the partiesB having the sanction of the court and entered as its determination of the controversy, it has the force and effect of any

other 4udgment.6& "rticle %03$ of the Civil Code e'plicitly provides that a compromise has upon the parties the effect and authority of res 3udicata. 3ecause of the compromise agreement among the parties, there was accordingly a 4udicial settlement of the controversy, and the 9rder, dated 30 "pril /&&&, of the !(C of :asig City was no less a 4udgment on the merits which may be annulled only upon the ground of e'trinsic fraud. 10 (hus, the !(C of :asig City, in the same 9rder, correctly granted the dismissal of Civil Case #o. 66%/3 4ith pre5udice. " scrutiny of the <oint Motion to .ismiss submitted to the !(C of :asig City would reveal that the parties agreed to discharge one another from any and all liabilities, whether criminal or civil, arising from the case, after "-.C was furnished with a copy of the /&&$ Concession "greement between the .9(C and :I"(C9. (his complete waiver was the reciprocal concession of the parties that puts to an end the present litigation, without any residual right in the parties to litigate the same in the future. +ogically also, there was no more need for the parties to admit to any liability considering that they already agreed to absolutely discharge each other therefrom, without necessarily conceding to the other5s position. )or "-.C, it was a declaration that even if it was not conceding to the ;overnment5s position, it was nonetheless waiving any legal entitlement it might have to sue the ;overnment on account of the #"I" I:( III :ro4ect. Conversely, for the ;overnment, it was an avowal that even if it was not accepting "-.C5s stance, it was all the same relin uishing its right to file any suit against "-.C in connection with the same pro4ect. (hat none of the parties admitted liability or conceded its position is without bearing on the validity or binding effect of the compromise agreement, considering that these were not essential to the said compromise. Third, there is no uestion as to the 4urisdiction of the !(C of :asig City over the sub4ect matter and parties in Civil Case #o. 66%/3. (he !(C can e'ercise original 4urisdiction over cases involving the issuance of writs of certiorari, prohibition, mandamus , quo arranto, ha'eas corpus and in4unction.1/ (o recall, the :etition of "-.C before the !(C of :asig City was for the declaration of nullity of proceedings, mandamus and in4unction. (he !(C of :asig City li?ewise had 4urisdiction over the parties, with the voluntary submission by "-.C and proper service of summons on the .9(C Secretary and the :3"C Chairman and members. Lastl", there is, between Civil Case #o. 66%/3 before the !(C of :asig City and the :etition now pending before this Court, an identity of parties, of sub4ect matter, and of causes of action. (here is an identity of parties. In both petitions, the "-.C is the petitioner. (he respondents in Civil Case #o. 66%/3 are the .9(C Secretary and the :3"C Chairman and members. (he respondents in the instant :etition are the .9(C, the .9(C Secretary, and the Manila International "irport "uthority @MI""A. Dhile it may be conceded that MI"" was not a respondent and did not participate in Civil Case #o. 66%/3, it may be considered a successor7in7 interest of the :3"C. Dhen Civil Case #o. 66%/3 was initiated, :3"C was then in charge of the #"I" I:( III :ro4ect, and had the authority to evaluate the bids and award the pro4ect to the one offering the lowest or most advantageous bid. Since the bidding is already over, and the structures comprising #"I" I:( III are now built, then MI"" has ta?en charge thereof. )urthermore, it is clear that it has been the intention of the "-.C to name as respondents in their two :etitions the government agencyLies and officialLs who, at the moment each :etition was filed, had authority over the #"I" I:( III :ro4ect. (here is an identity of sub4ect matter because the two :etitions involve none other than the award and implementation of the #"I" I:( III :ro4ect. (here is an identity of cause of action because, in both :etitions, "-.C is asserting the violation of its right to the award of the #"I" I:( III :ro4ect as the original proponent in the absence of any other ualified bidders. "s early as in Civil Case #o. 66%/3, "-.C already sought a declaration by the court of the absence of any other ualified proponent submitting a competitive bid for the #"I" I:( III :ro4ect, which, ultimately, would result in the award of the said pro4ect to it. "-.C attempts to evade the effects of its compromise agreement by alleging that it was compelled to enter into such an agreement when former :resident <oseph -. -strada asserted his influence and intervened in Civil Case #o. 66%/3. (his allegation deserves scant consideration. Dithout any proof that such events did ta?e place, such

statements remain mere allegations that cannot be given weight. 9ne who alleges any defect or the lac? of a valid consent to a contract must establish the same by full, clear and convincing evidence, not merely by preponderance thereof.1% "nd, even assuming ar(uendo, that the consent of "-.C to the compromise agreement was indeed vitiated, then :resident -strada was removed from office in <anuary %00/. "-.C filed the present :etition only on %0 9ctober %001. (he four7year prescriptive period, within which an action to annul a voidable contract may be brought, had already e'pired.13 (he "-.C further claims that the .9(C committed fraud when, without "-.C5s ?nowledge, the .9(C entered into an "mended and !estated Concession "greement @"!C"A with :I"(C9. (he fraud on the part of the .9(C purportedly also vitiated "-.C5s consent to the compromise agreement. It is true that a 4udicial compromise may be set aside if fraud vitiated the consent of a party thereofB and that the e'trinsic fraud, which nullifies a compromise, li?ewise invalidates the decision approving it.16 >owever, once again, "-.C5s allegations of fraud are unsubstantiated. (here is no proof that the .9(C and :I"(C9 willfully and deliberately suppressed and ?ept the information on the e'ecution of the "!C" from "-.C. (he burden of proving that there indeed was fraud lies with the party ma?ing such allegation. -ach party must prove his own affirmative allegations. (he burden of proof lies on the party who would be defeated if no evidence were given on either side. In this 4urisdiction, fraud is never presumed. 11 Moreover, a 4udicial compromise may be rescinded or set aside on the ground of fraud in accordance with !ule 32 of the !ules on Civil :rocedure on petition for relief from 4udgment. Section 3 thereof prescribes the periods within which the petition for relief must be filed8 S-C. 3. Time for filin( petition! contents and verification.? " petition provided for in either of the preceding sections of this !ule must be verified, filed within si'ty @60A days after the petitioner learns of the 4udgment, final order or other proceeding to be set aside, and not more than si' @6A months after such 4udgment or final order was entered, or such proceeding was ta?en, and must be accompanied with affidavits showing the fraud, accident, mista?e or e'cusable negligence relied upon, and the facts constituting the petitioner5s good and substantial cause of action or defense, as the case may be. "ccording to this Court5s ruling in Ar(ana v. *epu'lic,16 as applied to a 4udgment based on compromise, both the 607 day and si'7month reglementary periods within which to file a petition for relief should be rec?oned from the date when the decision approving the compromise agreement was rendered because such 4udgment is considered immediately e'ecutory and entered on the date that it was approved by the court. In the present case, the 9rder of the !(C of :asig City granting the <oint Motion to .ismiss filed by the parties in Civil Case #o. 66%/3 was issued on 30 "pril /&&&, yet "-.C only spo?e of the alleged fraud which vitiated its consent thereto in its :etition before this Court filed on %0 9ctober %001, more than si' years later. It is obvious that the assertion by "-.C of its vitiated consent to the <oint Motion to .ismiss Civil Case #o. 66%/3 is nothing more than an after7thought and a desperate attempt to escape the legal implications thereof, including the barring of its present :etition on the ground of res 3udicata. It is also irrelevant to the legal position of "-.C that the ;overnment asserted in A(an that the award of the #"I" I:( III :ro4ect to :I"(C9 was void. (hat the ;overnment eventually too? such a position, which this Court subse uently upheld, does not affect "-.C5s commitments and obligations under its 4udicially7approved compromise agreement in Civil Case #o. 66%/3, which "-.C signed willingly, ?nowingly, and ably assisted by legal counsel. In addition, it cannot be said that there has been a fundamental change in the ;overnment5s position since Civil Case #o. 66%/3, contrary to the allegation of "-.C. (he ;overnment then espoused that "-.C is not entitled to the award of the #"I" I:( III :ro4ect. (he ;overnment still maintains the e'act same position presently. (hat the ;overnment eventually reversed its position on the validity of its award of the pro4ect to :I"(C9 is not inconsistent with its position that neither should "-.C be awarded the pro4ect. )or the foregoing substantive and procedural reasons, the instant :etition of "-.C should be dismissed.

'epu"lic of the Philippines v! Court of Appeals and Baterina &$!'! No! (,+(--. "s mentioned in +in(o"on, e'propriation proceedings for the #"I" I:( III was instituted by the ;overnment with the !(C of :asay City, doc?eted as Case #o. 06702$6C)M. Congressman 3aterina, together with other members of the >ouse of !epresentatives, sought intervention in Case #o. 06702$6C)M by filing a :etition for :rohibition in Intervention @with "pplication for (emporary !estraining 9rder and Drit of :reliminary In4unctionA. 3aterina, et al. believe that the ;overnment need not file e'propriation proceedings to gain possession of #"I" I:( III and that :I"(C9 is not entitled to payment of 4ust compensation, arguing thus R "A !espondent :I"(C9 does not own (erminal III because 39( Contracts do not vest ownership in :I"(C9. "s such, neither :I"(C9 nor )!":9!( are entitled to compensation. 3A "rticles 662, -( S-M., of the #ew Civil Code, as regards builders in good faithLbad faith, do not apply to :I"(C95s Construction of (erminal III. CA "rticle /6/%@%A of the #ew Civil Code allows the ;overnment to demand the return of what it has given without any obligation to comply with its promise. .A (he payment of compensation to :I"(C9 is unconstitutional, violative of the 3uild79perate7(ransfer +aw, and violates the Civil Code and other laws. 1$ 9n %$ 9ctober %001, the !(C of :asay City issued an 9rder admitting the :etition in Intervention of 3aterina, et al., as well as the Complaint in Intervention of Manuel +. )ortes, <r. and the "nswer in Intervention of ;ina 3. "lnas, et al. (he !epublic sought reconsideration of the %$ 9ctober %001 9rder of the !(C of :asay City, which, in an 9mnibus 9rder dated /3 .ecember %001, was denied by the !(C of :asay City as regards the intervention of 3aterina, et al. and )ortes, but granted as to the intervention of "lnas, et al. 9n %% March %006, 3aterina, et al. filed with the !(C of :asay City a Motion to .eclare in .efault andLor Motion for Summary <udgment considering that the !epublic and :I"(C9 failed to file an answer or any responsive pleading to their :etition for :rohibition in Intervention. In the meantime, on /& .ecember %001, the Court5s .ecision in +in(o"on was promulgated. 3aterina also filed a Motion for Intervention in said case and sought reconsideration of the .ecision therein. >owever, his Motion for Intervention was denied by this Court in a !esolution dated / )ebruary %006. 9n %$ March %006, the !(C of :asay City issued an 9rder and Drit of -'ecution, the dispositive portion of which reads R D>-!-)9!-, let a writ of e'ecution be issued in this case directing the Sheriff of this court to immediately implement the 9rder dated <anuary 6, %001 and <anuary /0, %001, as affirmed by the .ecision of the Supreme Court in ;.!. #o. /666%& in the above7entitled case dated .ecember /&, %001, in the following manner8 /. 9rdering the ;eneral Manager, the Senior "ssistant ;eneral Manager and the Eice :resident of )inance of the Manila International "irport "uthority @MI""A to immediately withdraw the amount of:3,00%,/%1,000.00 from the above7mentioned Certificates of ,S .ollar (ime .eposits with the +and 3an? of the :hilippines, 3aclaran 3ranchB %. 9rdering the 3ranch Manager, +and 3an? of the :hilippines, 3aclaran 3ranch to immediately release the sum of :3,00%,/%1,000.00 to :I"(C9B !eturn of Service of the Drits shall be made by the Sheriff of this court immediately thereafterB 12

(he !(C of :asay City, in an 9rder, dated /1 <une %006, denied the Motions for !econsideration of its 9rder and Drit of -'ecution filed by the ;overnment and )ortes. 3aterina, meanwhile, went before the Court of "ppeals via a :etition for Certiorari and :rohibition @Dith ,rgent :rayer for the Issuance of a (emporary !estraining 9rder and Drit of :reliminary In4unctionA, doc?eted as C"7;.!. #o. &113&, assailing the issuance, in grave abuse of discretion, by the !(C of :asay City of its 9rders dated %$ March %006 and /1 <une %006 and Drit of -'ecution dated %$ March %006. .uring the pendency of C"7;.!. #o. &113& with the Court of "ppeals, the !(C of :asay City issued an 9rder, dated $ "ugust %006, denying the ,rgent Manifestation and Motion filed by the !epublic in which it relayed willingness to comply with the 9rder and Drit of -'ecution dated %$ March %006, provided that the trial court shall issue an 9rder e'pressly authori*ing the !epublic to award concessions and lease portions of the #"I" I:( III to potential users. (he following day, on 2 "ugust %006, the !(C of :asay City issued an 9rder denying the intervention of 3aterina, et al. and )ortes in Case #o. 06702$6C)M. In a third 9rder, dated & "ugust %006, the !(C of :asay City directed :I"(C9 to receive the amount of :3,00%,/%1,000.00 from the +and 3an? of the :hilippines, 3aclaran 3ranch. 3y %6 "ugust %006, the !epublic was all set to comply with the & "ugust %006 9rder of the !(C of :asay City. >ence, the representatives of the !epublic and :I"(C9 met before the !(C of :asay City for the supposed payment by the former to the latter of the proferred amount. >owever, on the same day, the Court of "ppeals, in C" ;.!. #o. &113&, issued a (emporary !estraining 9rder @(!9A en4oining, among other things, the !(C of :asay City from implementing the uestioned 9rders, dated %$ March %006 and /1 <une %006, or "from otherwise causing payment and from further proceeding with the determination of 4ust compensation in the e'propriation case involved herein, until such time that petitioner5s motion to declare in default and motion for partial summary 4udgment shall have been resolved by the trial courtB or it is clarified that :I"(C9 categorically disputes the proferred value for #"I" (erminal 3." (he (!9 was to be effective for 30 days. (wo days later, on %6 "ugust %006, the !epublic filed with the Court of "ppeals an ,rgent Motion to +ift (emporary !estraining 9rder, which the appellate court scheduled for hearing on 1 September %006. Dhile the ,rgent Motion to lift the (!9 was still pending with the Court of "ppeals, the !epublic already filed the present :etition for Certiorari and :rohibition Dith ,rgent "pplication for a (emporary !estraining 9rder andLor Drit of :reliminary In4unction, attributing to the Court of "ppeals grave abuse of discretion in granting the (!9 and see?ing a writ of prohibition against the Court of "ppeals to en4oin it from giving due course to 3aterina5s :etition in C"7;.!. #o. &113&. (he !epublic thus raises before this Court the following arguments8 I (>- C9,!( 9) "::-"+S C9MMI((-. ;!"E- "3,S- 9) .ISC!-(I9# "M9,#(I#; (9 "# -QC-SS 9! +"C= 9) <,!IS.IC(I9# D>-# I( ;!"#(-. (>- (-M:9!"!J !-S(!"I#I#; 9!.-!. ". (>IS >9#9!"3+- C9,!(5S .-CISI9# I# ;I#;9J9# C9#S(I(,(-S (>- "+"D 9) (>- C"S-". 3. (>- (!9 IS I# .I!-C( C9#(!"E-#(I9# 9) (>IS C9,!(5S .-CISI9# DIC> >". "(("I#-. )I#"+I(J. II (>- !-:,3+IC IS S,))-!I#; I!!-:"!"3+- ."M";-. III (>- C9,!( 9) "::-"+S M,S( 3- :!9>I3I(-. )!9M ;IEI#; .,- C9,!S- (9 " :-(I(I9# (>"( IS .-)-C(IE- I# )9!M "#. S,3S("#C-.

". :!IE"(- !-S:9#.-#( >"S #9 +-;"+ S("#.I#;. /. (>IS >9#9!"3+- C9,!( >"S !,+-. (>"( :!IE"(- !-S:9#.-#( >"S #9 +-;"+ S("#.I#;. %. :!IE"(- !-S:9#.-#( >"S +9S( >IS S("#.I#; "S "# I#(-!E-#9!. 3. :!IE"(- !-S:9#.-#( )"I+-. (9 .-M9#S(!"(- (>"( >- IS -#(I(+-. (9 (>I#<,#C(IE- !-+I-)S :!"J-. )9!. C. (>- 39#. :9S(-. IS I#S,))ICI-#(. IE ;!"#(I#; "!;,-#.9 (>"( :!IE"(- !-S:9#.-#(5S :-(I(I9# IS S,))ICI-#( I# )9!M "#. S,3S("#C-, (>- S"M- >"S 3-C9M- M99( "#. "C".-MIC. ". (>- M9(I9# (9 .-C+"!- I# .-)",+( "#.L9! M9(I9# )9! :"!(I"+ S,MM"!J <,.;M-#( >"S "+!-".J 3--# !-S9+E-.. 3. :I"(C9 >"S C"(-;9!IC"++J .IS:,(-. (>- :!9))-!-. E"+,- )9! #"I" (-!MI#"+ III.1& (he !epublic prays of this Court that8 @aA :ending the determination of the merits of this petition, a temporary restraining order andLor a writ of preliminary in4unction be ISS,-. restraining the Court of "ppeals from implementing the writ of preliminary in4unction in C"7;.!. S: #o. &113& and proceeding in said case such as hearing it on September 1, %006. "fter both parties have been heard, the preliminary in4unction be M".:-!M"#-#(B @bA (he !esolution date %6 "ugust %006 of the Court of "ppeals be S-( "SI.-B and @cA C"7;.!. S: #o. &113& be 9!.-!-. .ISMISS-.. 9ther 4ust and e uitable reliefs are li?ewise prayed for. 60 9n 6 September %006, the !epublic filed a Manifestation and Motion to Dithdraw ,rgent Motion to +ift (emporary !estraining 9rder with the Court of "ppeals stating, among other things, that it had decided to withdraw the said Motion as it had opted to avail of other options and remedies. .espite the Motion to Dithdraw filed by the ;overnment, the Court of "ppeals issued a !esolution, dated 2 September %006, lifting the (!9 it issued, on the basis of the following R In view of the pronouncement of the Supreme Court in the ;ingoyon case upholding the right of :I"(C9 to be paid the proferred value in the amount of :3,00%,/%1,000.00 prior to the implementation of the writ of possession issued by the trial court on .ecember %/, %006 over the #"I" :assenger (erminal III, and directing the determination of 4ust compensation, there is no practical and logical reason to maintain the effects of the (emporary !estraining 9rder contained in our !esolution dated "ugust %6, %006. (hus, De

cannot continue restraining what has been mandated in a final and e'ecutory decision of the Supreme Court. D>-!-)9!-, 9ur !esolution dated %6 "ugust %006 be S-( "SI.-. Conse uently, the Motion to Dithdraw the Motion to +ift the (emporary !estraining 9rder is rendered moot and academic. 6/ (here being no more legal impediment, the !epublic tendered on // September %006 +and 3an? chec? in the amount of :3,00%,/%1,000.00 representing the proferred value of #"I" I:( III, which was received by a duly authori*ed representative of :I"(C9. 9n %$ .ecember %006, the Court of "ppeals rendered a .ecision in C" ;.!. #o. &113& dismissing 3aterina5s :etition. (he latest developments before the Court of "ppeals and the !(C of :asay City render the present :etition of the !epublic moot. #onetheless, 3aterina, as the private respondent in the instant :etition, presented his own prayer that a 4udgment be rendered as follows8 ". )or this >onorable Court, in the e'ercise of its 4udicial discretion to rela' procedural rules consistent withMetropolitan Traffic Command v. +onon( and deem that 4ustice would be better served if all legal issuesinvolved in the e'propriation case and in 3aterina are resolved in this case once and for all, to DECLAREthat8 i. (-!MI#"+ 3, as a matter of law, is public property and thus not a proper ob4ect of eminent domain proceedingsB and ii. :I"(C9, as a matter of law, is merely the builder of (-!MI#"+ 3 and, as such, it may file a claim for recovery on quantum meruit with the Commission on "udiFtG for determination of the amount thereof, if any. 3. (o DIRECT the !egional (rial Court of :asay City, 3ranch //$ to dismiss the e'propriation caseB C. (o DISMISS the instant :etition and .-#J (he !epublic5s application for (!9 andLor writ of preliminary in4unction for lac? of meritB .. (o DECLARE that the :3 3illion @representing the proferred value of (-!MI#"+ 3A paid to :I"(C9 on // September %006 as /un ' +e- .n (0u'( by :I"(C9 for the benefit of the !epublic and sub4ect to the outcome of the proceedings for the determination of recovery on quantum meruit due to :I"(C9, if any. -. (o DIRECT the Solicitor ;eneral to disclose the evidence it has gathered on corruption, bribery, fraud, bad faith, etc., to this >onorable Court and the Commission on "udit, and to DECLARE such evidence to be admissible in any proceeding for the determination of any compensation due to :I"(C9, if any. F)G. In the alternative, to8 i. SET ASIDE the trial court5s <rder dated 02 "ugust %006 denying :rivate !espondent5s motion for intervention in the e'propriation case, and

ii. Should this >onorable Court lend credence to the argument of the Solicitor ;eneral in its Commentdated %0 "pril %006 that "there are issues as to material fact that re uire presentation of evidence", to REMAND the resolution of the legal issues raised by :rivate !espondent to the trial court consistent with this >onorable Court5s holding in the +in(o"on *esolution that 6the interests of the movants7in7intervention 8meaning Ta9ena9a% Asahi9osan% and herein Private 'espondent: may "e duly litigated in proceedings 4hich are e;tant "efore the lo4er courts."6% In essence, 3aterina is opposing the e'propriation proceedings on the ground that #"I" I:( III is already public property. >ence, :I"(C9 is not entitled to 4ust compensation for #"I" I:( III. >e is as?ing the Court to ma?e a definitive ruling on this matter considering that it was not settled in either A(an or +in(o"on. De disagree. Contrary to 3aterina5s stance, :I"(C95s entitlement to 4ust and e uitable consideration for its construction of #"I" I:( III and the propriety of the !epublic5s resort to e'propriation proceedings were already recogni*ed and upheld by this Court in A(an and +in(o"on. (he Court5s .ecisions in both A(an and +in(o"on had attained finality, the former on /$ )ebruary %006 and the latter on /$ March %006. (his Court already made an une uivocal pronouncement in its !esolution dated %/ <anuary %006 in A(an that for the ;overnment of the !epublic to ta?e over the #"I" I:( III facility, it has to compensate :I"(C9 as a builder of the structuresB and that "FtGhe compensation must be 4ust and in accordance with law and e uity for the government cannot un4ustly enrich itself at the e'pense of :I"(C9 and its investors." 63 "s between the !epublic and :I"(C9, the 4udgment on the need to compensate :I"(C9 before the ;overnment may ta?e over #"I" I:( III is already conclusive and beyond uestion. >ence, in +in(o"on, this Court declared that8 (his pronouncement contains the fundamental premises which permeate this decision of the Court. Indeed,A(an, final and e'ecutory as it is, stands as governing law in this case, and any disposition of the present petition must conform to the conditions laid down by the Court in its %006 *esolution. '''' T+e 10onoun,e:en( .n (+e 2004 Re'o-u(.on .' e'1e,."--8 '.&n./.,"n( (o (+.' ,"'e .n (<o "'1e,(', n":e-8# B.C (+"( PIATCO :u'( 0e,e.Ae 1"8:en( o/ ;u'( ,o:1en'"(.on e(e0:.ne .n ",,o0 "n,e <.(+ -"< "n e=u.(8K "n B..C (+"( (+e &oAe0n:en( .' 7"00e /0o: ("D.n& oAe0 NAIA 3 un(.- 'u,+ ;u'( ,o:1en'"(.on .' 1". . (he parties cannot be allowed to evade the directives laid down by this Court through any mode of 4udicial action, such as the complaint for eminent domain. It cannot be denied though that the Court in the %006 !esolution prescribed mandatory guidelines which the ;overnment must observe before it could ac uire the #"I" 3 facilities. (hus, the actions of respondent 4udge under review, as well as the arguments of the parties must, to merit affirmation, pass the threshold test of whether such propositions are in accord with the %006 !esolution. 66 (he Court then, in +in(o"on, directly addressed the issue on the appropriateness of the !epublic5s resort to e'propriation proceedings8 T+e GoAe0n:en( +"' ,+o'en (o 0e'o0( (o eI10o10."(.on, " 0e:e 8 "A".-"7-e un e0 (+e -"<, <+.,+ +"' (+e " e 7ene/.( o/ "n .n(e&0"(e 10o,e'' /o0 (+e e(e0:.n"(.on o/ ;u'( ,o:1en'"(.on "n (+e 1"8:en( (+e0eo/ (o PIATCO. De appreciate that the case at bar is a +.&+-8 unu'u"- ,"'e, whereby the ;overnment see?s to e'propriate a building comple' constructed on land which the State already owns.

(here is an inherent illogic in the resort to eminent domain on property already owned by the State. "t first blush, since the State already owns the property on which #"I" 3 stands, the proper remedy should be a?in to an action for e4ectment. 2o<eAe0, (+e 0e"'on /o0 (+e 0e'o0( 78 (+e GoAe0n:en( (o eI10o10."(.on 10o,ee .n&' .' un e0'("n "7-e .n (+.' ,"'e. (he %006 !esolution, in re uiring the payment of 4ust compensation prior to the ta?eover by the ;overnment of #"I" 3, effectively precluded it from ac uiring possession or ownership of the #"I" 3 through the unilateral e'ercise of its rights as the owner of the ground on which the facilities stood. (hus, as things stood after the %006 !esolution, the right of the ;overnment to ta?e over the #"I" 3 terminal was preconditioned by lawful order on the payment of 4ust compensation to :I"(C9 as builder of the structures. '''' (he right of eminent domain e'tends to personal and real property, and the #"I" 3 structures, adhered as they are to the soil, are considered as real property. (he public purpose for the e'propriation is also beyond dispute. It should also be noted that Se,(.on 1 o/ Ru-e $6 Bon EI10o10."(.onC 0e,o&n.!e' (+e 1o''.7.-.(8 (+"( (+e 10o1e0(8 'ou&+( (o 7e eI10o10."(e :"8 7e (.(-e .n (+e n":e o/ (+e Re1u7-., o/ (+e P+.-.11.ne', "-(+ou&+ o,,u1.e 78 10.A"(e .n .A. u"-' , and in such case an averment to that effect should be made in the complaint. (he instant e'propriation complaint did aver that the #"I" 3 comple' "stands on a parcel of land owned by the 3ases Conversion .evelopment "uthority, another agency of Fthe !epublic of the :hilippinesG." "dmittedly, eminent domain is no( (+e 'o-e ;u .,."- 0e,ou0'e by which the ;overnment may have ac uired the #"I" 3 facilities while satisfying the re uisites in the %006 !esolution. E:.nen( o:".n (+ou&+ :"8 7e (+e :o'( e//e,(.Ae, "' <e-- "' (+e '1ee .e'( :e"n' 78 <+.,+ 'u,+ &o"-' :"8 7e ",,o:1-.'+e . #ot only does it enable immediate possession after satisfaction of the re uisites under the law, it also has a built7in procedure through which 4ust compensation may be ascertained. (hus, there should be no uestion as to the propriety of eminent domain proceedings in this case. Still, in applying the laws and rules on e'propriation in the case at bar, we are impelled to apply or construe these rules in accordance with the Court5s prescriptions in the %006 !esolution to achieve the end effect that the ;overnment may validly ta?e over the #"I" 3 facilities. Insofar as this case is concerned, the %006 !esolution is effective not only as a legal precedent, but as the source of rights and prescriptions that must be guaranteed, if not enforced, in the resolution of this petition. 9therwise, the integrity and efficacy of the rulings of this Court will be severely diminished. 61 @-mphasis ours.A (he Court, also in +in(o"on, categorically recogni*ed :I"(C95s ownership over the structures it had built in #"I" I:( III, to wit8 T+e0e ,"n 7e no ou7( (+"( PIATCO +"' o<ne0'+.1 0.&+(' oAe0 (+e /",.-.(.e' <+.,+ .( +" /.n"n,e "n ,on'(0u,(e . (he %006 !esolution s uarely recogni*ed that right when it mandated the payment of 4ust compensation to :I"(C9 prior to the ta?eover by the ;overnment of #"I" 3. (he fact that the ;overnment resorted to eminent domain proceedings in the first place is a concession on its part of :I"(C95s ownership. Indeed, if no such right is recogni*ed, then there should be no impediment for the ;overnment to sei*e control of #"I" 3 through ordinary e4ectment proceedings. '''' T+u', (+e 10o1e0(8 'u7;e,( o/ eI10o10."(.on, (+e NAIA 3 /",.-.(.e', "0e 0e"- 10o1e0(8 o<ne 78 PIATCO. ' ' ' @-mphasis ours.A66

It was further settled in +in(o"on that the e'propriation proceedings shall be held in accordance with !epublic "ct #o. 2&$6,6$ thus8 ,nli?e in the case of !ule 6$, the application of !ep. "ct #o. 2&$6 will not contravene the %006 !esolution, which re uires the payment of 4ust compensation before any ta?eover of the #"I" 3 facilities by the ;overnment. (he %006 !esolution does not particulari*e the e'tent such payment must be effected before the ta?eover, but it un uestionably re uires at least some degree of payment to the private property owner before a writ of possession may issue. (he utili*ation of !ep. "ct #o. 2&$6 guarantees compliance with this bare minimum re uirement, as it assures the private property owner the payment of, at the very least, the proffered value of the property to be sei*ed. Such payment of the proffered value to the owner, followed by the issuance of the writ of possession in favor of the ;overnment, is precisely the schematic under !ep. "ct #o. 2&$6, one which facially complies with the prescription laid down in the %006 !esolution. "nd finally, as to the determination of the amount due :I"(C9, this Court ruled in +in(o"on that8 ,nder !ep. "ct #o. 2&$6, the ;overnment is re uired to "immediately pay" the owner of the property the amount e uivalent to the sum of @/A one hundred percent @/00IA of the value of the property based on the current relevant *onal valuation of the F3I!GB and @%A the value of the improvements andLor structures as determined under Section $. "s stated above, the 3I! *onal valuation cannot apply in this case, thus the amount sub4ect to immediate payment should be limited to "the value of the improvements andLor structures as determined under Section $," with Section $ referring to the "implementing rules and regulations for the e uitable valuation of the improvements andLor structures on the land." ,nder the present implementing rules in place, the valuation of the improvementsLstructures are to be based using @(+e 0e1-",e:en( ,o'( :e(+o .@ >owever, the replacement cost is only one of the factors to be considered in determining the 4ust compensation. In addition to !ep. "ct #o. 2&$6, the %006 *esolution in A(an also mandated that the payment of 4ust compensation should be .n ",,o0 "n,e <.(+ e=u.(8 "' <e-- . (hus, in ascertaining the ultimate amount of 4ust compensation, the duty of the trial court is to ensure that such amount conforms not only to the law, such as !ep. "ct #o. 2&$6, but to principles of e uity as well. "dmittedly, there is no way, at least for the present, to immediately ascertain the value of the improvements and structures since such valuation is a matter for factual determination. Jet !ep. "ct #o. 2&$6 permits an e'pedited means by which the ;overnment can immediately ta?e possession of the property without having to await precise determination of the valuation. Section 6@cA of !ep. "ct #o. 2&$6 states that "in case the completion of a government infrastructure pro4ect is of utmost urgency and importance, "n (+e0e .' no eI.'(.n& A"-u"(.on o/ (+e "0e" ,on,e0ne , the implementing agency shall immediately pay the owner of the property its 10o/e00e A"-ue, ta?ing into consideration the standards prescribed in Section 1 Fof the lawG." (he "proffered value" may stri?e as a highly sub4ective standard based solely on the intuition of the government, but !ep. "ct #o. 2&$6 does provide relevant standards by which "proffered value" should be based, as well as the certainty of 4udicial determination of the propriety of the proffered value. In filing the complaint for e'propriation, the ;overnment alleged to have deposited the amount of :3 3illion earmar?ed for e'propriation, representing the assessed value of the property. (he ma?ing of the deposit, including the determination of the amount of the deposit, was underta?en under the erroneous notion that !ule 6$, and not !ep. "ct #o. 2&$6, is the applicable law. Still, as regards the amount, the Court sees no impediment to recogni*e this sum of :3 3illion as the proffered value under Section 6@bA of !ep. "ct #o. 2&$6. "fter all, in the initial determination of the proffered value, the ;overnment is not strictly re uired to adhere to any predetermined standards, although its proffered value may later be sub4ected to 4udicial review using the standards enumerated under Section 1 of !ep. "ct #o. 2&$6. 62 +in(o"on constitutes as the law of the case for the e'propriation proceedings, doc?eted as Case #o. 06702$6C)M, before the !(C of :asay City. +aw of the case has been defined in the following manner R

3y "law of the case" is meant that "whatever is once irrevocably established as the controlling legal rule or decision between the same parties in the same case continues to be the law of the case" so long as the "facts on which such decision was predicated continue to be the facts of the case before the court" @%/ C.<.S. 330A. "nd once the decision becomes final, it is binding on all inferior courts and hence beyond their power and authority to alter or modify @@a'i(tin( vs. Actin( &irector of Prisons, ;.!. +7/1162, 9ctober 30, /&6%A.6& " ruling rendered on the first appeal, constitutes the law of the case, and, even if erroneous, it may no longer be disturbed or modified since it has become final long ago. $0 (he e'tensive e'cerpts from +in(o"on demonstrate and emphasi*e that the Court had already ad4udged the issues raised by 3aterina, which he either conveniently overloo?ed or stubbornly refused to accept. (he general rule precluding the relitigation of material facts or uestions which were in issue and ad4udicated in former action are commonly applied to all matters essentially connected with the sub4ect matter of the litigation. (hus, it eI(en ' (o =ue'(.on' ne,e''"0.-8 .nAo-Ae .n "n .''ue, "n ne,e''"0.-8 " ;u .,"(e , o0 ne,e''"0.-8 .:1-.e .n (+e /.n"- ;u &:en(, although no specific finding may have been made in reference thereto, and although such matters were directly referred to in the pleadings and were not actually or formally presented. ,nder this rule, if the record of the former trial shows that the 4udgment could not have been rendered without deciding the particular matter, it will be considered as having settled that matter as to all future actions between the parties and if a 4udgment necessarily presupposes certain premises, they are as ,on,-u'.Ae "' (+e ;u &:en( .('e-/ . !easons for the rule are that a 4udgment is an ad4udication on all the matters which are essential to support it, and that every proposition assumed or decided by the court leading up to the final conclusion and upon which such conclusion is based is as effectually passed upon as the ultimate uestion which is finally solved. $/ Since the issues 3aterina wishes to raise as an intervenor in Case #o. 06702$6C)M were already settled with finality in both A(an and +in(o"on, then there is no point in still allowing his intervention. >is :etition7in7Intervention would only be a relitigation of matters that had been previously ad4udicated by no less than the >ighest Court of the land. "nd, in no manner can the !(C of :asay City in Case #o. 06702$6C)M grant the reliefs he prayed for without departing from or running afoul of the final and e'ecutory .ecisions of this Court in A(anand +in(o"on. Dhile it is true that when this Court, in a !esolution dated / )ebruary %006, dismissed the Motions for Intervention in +in(o"on, including that of 3aterina, it also observed that the interests of the movants7in7intervention may be duly litigated in proceedings which are e'tant before the lower courts. (his does not mean, however, that the said movants7 in7interest were assured of being allowed as intervenors or that the reliefs they sought as such shall be granted by the trial courts. (he fate of their intervention still rests on their interest or legal standing in the case and the merits of their arguments. D>-!-)9!-, in view of the foregoing8 a. (he :etition in ;.!. #o. /6&&/6 is hereby .ISMISS-. for lac? of meritB and b. (he :etition in ;.!. #o. /$6/66 is hereby li?ewise .ISMISS-. for being moot and academic. #o costs. SO ORDERED

%1, /&$2, pursuant to the provisions of the promissory note, Servicewide demanded payment of the entire outstanding balance of :66,$$1.%6 inclusive of interests @-'hibits "." and "-"B pp. /1/7/1%, i'id.A. .espite said formal demand, +eticia +aus failed to pay all the monthly installments due until <uly /2, /&20. 9n <uly %1, /&26, Servicewide sent a statement of account to +eticia +aus and demanded payment of the amount of :26,6/3.3% representing the outstanding balance plus interests up to <uly %1, /&21, attorney5s fees, li uidated damages, estimated repossession e'pense, and bonding fee @-'hibit ")"B p. /13, i'id.A FORECLOS*RE OF REM G.R. No. 11004% NoAe:7e0 13, 1333 SER>ICE)IDE SPECIALISTS, INC., petitioner, vs. CO*RT OF APPEALS, 2ILDA TEE, L ALBERTO M. >ILLAFRANCA, respondents. "s a result of the failure of +eticia +aus to settle her obligation, or at least to surrender possession of the motor vehicle for the purpose of foreclosure, Servicewide instituted a complaint for replevin, impleading >ilda (ee and <ohn .ee in whose custody the vehicle was believed to be at the time of the filing of the suit. In its complaint, plaintiff alleged that it had superior lien over the mortgaged vehicleB that it is lawfully entitled to the possession of the same together with all its accessories and e uipmentsB @sicA that >ilda (ee was wrongfully detaining the motor vehicle for the purpose of defeating its mortgage lienB and that a sufficient bond had been filed in court. @Complaint with "nne'es, pp. /7/3, i'id.A. 9n <uly 30, /&26, the court approved the replevin bond @p. %0, i'id.A 9n "ugust /, /&26, "lberto Eillafranca filed a third party claim contending that he is the absolute owner of the sub4ect motor vehicle duly evidenced by the 3ureau of +and (ransportation5s Certificate of !egistration issued in his name on <une %%, /&26B that he ac uired the said mother vehicle from a certain !emedios .. Jang under a .eed of Sale dated May /6, /&26B that he ac uired the same free from all lien and emcumbrancesB and that on <uly 30, /&26, the said automobile was ta?en from his residence by .eputy Sheriff 3ernardo 3ernabe pursuant to the sei*ure order issued by the court a quo. ,pon motion of the plaintiff below, "lberto Eillafranca was substituted as defendant. Summons was served upon him. @pp. 11716, i'idA. 9n March %0, /&21, "lberto Eillafranca moved for the dismissal of the complaint on the ground that there is another action pending between the same parties before the !egional (rial Court of Ma?ati, 3ranch /60, doc?eted as Civil Case #o. 23/0, involving the sei*ure of sub4ect motor vehicle and the indemnity bond posted by Servicewide @Motion to .ismiss with "nne'esB pp. 1$7//0, i'id.A 9n March %2, /&21, the court granted the aforesaid motion @p. /%%, i'id.A, but subse uently the order of dismissal was reconsidered and set aside @pp. /317/36, i'id.A. )or failure to file his "nswer as re uired by the court a quo, "lberto Eillafranca was declared in default and plaintiff5s evidence was received e7 parte. 9n .ecember %$, /&21, the lower court rendered a decision dismissing the complaint for insufficiency of evidence. Its motion for reconsideration of said decision having been denied, . . . . In its appeal to the Court of "ppeals, petitioner theori*ed that a suit for replevin aimed at the foreclosure of a chattel is an action quasi in rem, and does not re uire the inclusion of the principal obligor in the Complaint. >owever, the appellate court affirmed the decision of the lower CourtB ratiocinating, thus8 " cursory reading, however, of the :romissory #ote dated May /6, /&$6 in favor of )ortune Motors @:hils.A Corp. in the sum of :16,0%2.00 @"nne' """ of Complaint, p. $, 9riginal !ecordsA and the Chattel Mortgage of the same date @"nne' "3" of ComplaintB pp. 27&, i'id.A will disclose that the ma?er and mortgagor respectively are one and the same person8 +eticia +aus. In fact,

P*RISIMA, J!< (his is a petition for review on certiorari under !ule 61 of .ecision of the Court of "ppeals 1 in C"7;.!. CE #o. /&1$/, affirming the 4udgment of the !egional (rial Court of Manila, 3ranch QQ, dismissing Civil Case #o. 267%1$63 for replevin and damages. (he litigation involves a motor vehicle, a Colt ;alant, 67door Sedan automobile, with Motor #o. %-702&%$, Serial #o. "//%"71%&$, Model #o. /&$6. (he appellate court culled the facts that matter as follows8
2

9n May /6, /&$6, +eticia +. +aus of Mue*on City purchased on credit a Colt ;alant . . . from )ortune Motors @:hils.A Corporation. 9n the same date, she e'ecuted a promissory note for the amount of :16,0%2.00, inclusive of interest at /%I per annum, payable within a period of 62 months starting "ugust, /&$6 at a monthly installment of :/,/6$.%1 due and demandable on the /$th day of each month @-'hibit """, pp. /66, 9rig. !ecords,A. It was agreed upon, among others, that in case of default in the payment of any installment the total principal sum, together with the interest, shall become immediately due and payable @-'hibit """B p. /66, 9rig. !ecordsA. "s a security for the promissory note, a chattel mortgage was constituted over the said motor vehicle @-'hibit "3", i'id.A, with a deed of assignment incorporated therein such that the credit and mortgage rights were assigned by )ortune Motors Corp. in favor of )ilinvest Credit Corporation with the consent of the mortgagor7debtor +eticia +aus @-'hibits "37/" and "37%", p. /6$, i'id.A. (he vehicle was then registered in the name of +eticia +. +aus with the chattel mortgage annotated on said certificate. @-'hibit ">"B p. /16, i'id.A 9n September %1, /&$2, )ilinvest Credit Corporation in turn assigned the credit in favor of Servicewide Specialists, Inc. @Servicewide, for brevityA transferring unto the latter all its rights under the promissory note and the chattel mortgage @-'hibit "373", p. /6&, i'id.A with the corresponding notice of assignment sent to the registered car owner @-'hibit "C"B p. /10, i'id.A. 9n "pril /2, /&$$, +eticia +aus failed to pay the monthly installments for that month. (he installments for the succeeding /$ months were not li?ewise fully paid, hence on September

plaintiff7appellant admits in paragraphs @sicA nos. % and 3 of its Complaint that the aforesaid public documents @"nne'es """ and "3" thereofA were e'ecuted by +eticia +aus, who, for reasons not e'plained, was never impleaded. In the case under consideration, plaintiff7 appellant5s main case is for 4udicial foreclosure of the chattel mortgage against >ilda (ee and <ohn .oe who was later substituted by appellee "lberto Eillafranca. 3ut as there is no privity of contract, not even a causal lin?, between plaintiff7appellant Servicewide Specialists, Inc. and defendant7appellee "lberto Eillafranca, the court a quo committed no reversible error when it dismissed the case for insufficiency of evidence against >ilda (ee and "lberto Eillafranca since the evidence adduced pointed to +eticia +aus as the party liable for the obligation sued upon @p. %, !(C .ecisionA. 3 :etitioner presented a Motion for !econsideration but in its !esolution 4 of May /0, /&&3, the Court of "ppeals denied the same, ta?ing notice of another case "pending between the same parties . . . relating to the very chattel mortgage of the motor vehicle in litigation." >ence, the present petition for review on certiorari under !ule 61. -ssentially, the sole issue here is8 Dhether or not a case for replevin may be pursued against the defendant, "lberto Eillafranca, without impleading the absconding debtor7mortgagorS !ule 60 of the !evised !ules of Court re uires that an applicant for replevin must show that he "is the owner of the property claimed, particularly describing it, or is entitled to the possession thereof." H Dhere the right of the plaintiff to the possession of the specified property is so conceded or evident, the action need only be maintained against him who so possesses the property. In rem action est per quam rem nostram quae a' alio possidetur petimus, et semper adversus eum est qui rem possidet. $ Citing Aorthern Motors , Inc. vs. :errera, 6 the Court said in the case of 3" )inance @which is of similar import with the present caseA8 (here can be no uestion that persons having a special right of property in the goods the recovery of which is sought, such as a chattel mortgagee, may maintain an action for replevin therefor. Dhere the mortgage authori*es the mortgagee to ta?e possession of the property on default, he may maintain an action to recover possession of the mortgaged chattels from the mortgagor or from any person in whose hands he may find them. % (hus, in default of the mortgagor, the mortgagee is thereby constituted as attorney7in7fact of the mortgagor, enabling such mortgagee to act for and in behalf of the owner. (hat the defendant is not privy to the chattel mortgage should be inconse uential. 3y the fact that the ob4ect of replevin is traced to his possession, one properly can be a defendant in an action for replevin. It is here assumed that the plaintiff8s ri(ht to possess the thin( is not or cannot 'e disputed. 3 @-mphasis suppliedA >owever, in case the right of possession on the part of the plaintiff, or his authority to claim such possession or that of his principal, is put to great doubt @a contending party may contest the legal bases for plaintiffs cause of action or an adverse and independent claim of ownership or right of possession may be raised by that partyA, it could become essential to have other persons involved and impleaded for a complete determination and resolution of the controversy. 10 In the case under scrutiny, it is not disputed that there is an adverse and independent claim of ownership by the respondent as evinced by the e'istence of a pending case before the Court of "ppeals involving sub4ect motor vehicle between the same parties herein. 11 Its resolution is a factual matter, the province of which properly lies in the lower Court and not in the Supreme Court, in the guise of a petition for review on certiorari. )or it is basic that under !ule 61, this Court only entertains uestions of law, and rare are the e'ceptions and the present case does not appear to be one of them. In a suit for replevin, a clear ri(ht of possession must 'e esta'lished. @-mphasis suppliedA " foreclosure under a chattel mortgage may properly be commenced only once there is default on the part of the mortgagor of his obligation secured by the mortgage. (he replevin in this case has been resorted to in order to pave the way for the foreclosure of

what is covered by the chattel mortgage. (he conditions essential for such foreclosure would be to show, firstly, the e'istence of the chattel mortgage and, secondly, the default of the mortgagor. (hese re uirements must be shown because the validity of the plaintiffs e'ercise of the right of foreclosure is inevitably dependent thereon. 12 Since the mortgagee5s right of possession is conditioned upon the actual fact of default which itself may be controverted, the inclusion of other parties, li?e the debtor or the mortgagor himself, may be re uired in order to allow a full and conclusive determination of the case. Dhen the mortgagee see?s a replevin in order to effect the eventual foreclosure of the mortgage, it is not only the e'istence of, but also the mortgagor5s default on, the chattel mortgage that, among other things, can properly uphold the right to replevy the property. (he burden to establish a valid 4ustification for such action lies with the plaintiff. "n adverse possessor, who is not the mortgagor, cannot 4ust be deprived of his possession, let alone be bound by the terms of the chattel mortgage contract, simply because the mortgagee brings up an action for replevin. 13 +eticia +aus, being an indispensable party, should have been impleaded in the complaint for replevin and damages. "n indispensable party is one whose interest will be affected by the court5s action in the litigation, and without whom no final determination of the case can be had. (he party5s interest in the sub4ect matter of the suit and in the relief sought are so ine'tricably intertwined with the other parties that his legal presence as a party to the proceeding is an absolute necessity. In his absence, there cannot be a resolution of the dispute of the parties before the Court which is effective, complete, or e uitable. Conversely, a party is not indispensable to the suit if his interest in the controversy or sub4ect matter is distinct and divisible from the interest of the other parties and will not necessarily be pre4udiced by a 4udgment which does complete 4ustice to the parties in Court. >e is not indispensable if his presence would merely complete relief between him and those already parties to the action or will simply avoid multiple litigation. 14 Dithout the presence of indispensable parties to a suit or proceeding, a 4udgment of a Court cannot attain real finality. 1H (hat petitioner could not locate the mortgagor, +eticia +aus, is no e'cuse for resorting to a procedural short7cut. It could have properly availed of substituted service of summons under the !evised !ules of Court. 1$ If it deemed such a mode to be unavailing, it could have proceeded in accordance with Section /6 of the same !ule. 16Indeed, petitioner had other proper remedies, it could have resorted to but failed to avail of. )or instance, it could have properly impleaded the mortgagor. Such failure is fatal to petitioner5s cause. Dith the foregoing dis uisition and conclusion, the other issues raised by petitioner need not be passed upon. D>-!-)9!-, the :etition is .-#I-. and the .ecision of the Court of "ppeals in C"7;.!. CE #o. /&1$/ "))I!M-.. #o pronouncement as to costs. S9 9!.-!-.

In the present case, petitioners cannot anchor their case on the purported interest they have, as owners, over the land and the improvements thereon. (hey have been stripped of their rights over the property when, as mortgagors, they failed to redeem it after foreclosure too? place. " mortgagor has only one year after registration of sale with the !egister of .eeds within which to redeem the foreclosed real estate. Consolidation of title would have the conse uence of transferring ownership since the buyer in a foreclosure sale becomes the absolute owner of the property purchased if it is not redeemed during the period of one year after the registration of the sale G.R. No. 1333$$ Au&u'( H, 1333

*NIONBANM OF T2E P2ILIPPINES, petitioner, vs. T2E CO*RT OF APPEALS "n FERMINA S. DARIO "n REYNALDO S. DARIO, respondents. DA>IDE, JR., CJ!< ,nionban? of the :hilippines @hereafter ,#I9#3"#=A appeals, by way of certiorari, the .ecision/ of the Court of "ppeals @C"A of %6 <une /&&$ and its !esolution of $ "pril /&&2 %. (he C" nullified the !egional (rial Court5s @!(CA 9rder3 of $ "ugust /&&1 denying private respondents5 application for preliminary in4unction as ,#I9#3"#=5s consolidation of ownership divested private respondents of their property without due process of law. It also ordered the register of deeds to cancel ,#I9#3"#=5s title and the trial court to hear private respondents prayer for in4unctive relief.#$ phi#.n%t (his case stemmed from a real estate mortgage e'ecuted on /$ .ecember /&&/ by spouses +eopoldo and <essica .ario @hereafter mortgagorsA in favor of ,#I9#3"#= to secure a :3 million loan, including interest and other charges. (he mortgage covered a Mue*on City property with (ransfer Certificate of (itle @(C(A #o. 6/2%2 in +eopoldo .ario5s name and was annotated on the title on /2 .ecember /&&/. )or non7payment of the principal obligation, ,#I9#3"#= e'tra4udicially foreclosed the property mortgaged on /% "ugust /&&3 and sold the same at public auction, with itself posting the highest bid. 9n 6 9ctober /&&6, one wee? before the one7year redemption period e'pired, private respondents filed a complaint with the !(C of Mue*on City against the mortgagors, ,#I9#3"#=, the !egister of .eeds and the City Sheriff of Mue*on City. .oc?eted as Civil Case #o. M7&67%/230, the complaint was for annulment of sale and real estate mortgage reconveyance and prayer for restraining notice of lis pendens was annotated on the title. 9n /0 9ctober /&&6, !(C, 3ranch 2/, through :residing <udge @later C" <usticeA Celia +ipana7!eyes, issued a temporary restraining order @(!9A en4oining the redemption of property within the statutory period and its consolidation under ,#I9#3"#=5s name. "t a hearing four days later, ,#I9#3"#=5s counsel orally moved for dismissal of the complaint alleging that a certification of non7forum shopping7is prescribed by SC7Circular 67&6 6was not attached thereto. <udge +ipana7!eyes settled the motion in favor of ,#I9#3"#= and dismissed 1 the complaint on /$ 9ctober /&&6. "ggrieved, private respondents filed a motion for reconsideration 6 of the dismissal on %0 9ctober /&&6 and prayed that they be permitted to amend their verified complaint to comply with the re uisites of Circular 67&6. ,pon the appointment of <udge +ipana7!eyes to the C", pairing <udge "gustin S. .i*on too? over the case and on /1 #ovember /&&6 allowed private respondents to incorporate the mandatory formal re uirements of SC "dministrative Circular 67&6 to their complaint. In the meantime, without notifying private respondents, ,#I9#3"#= consolidated its title over the foreclosed property on %6 9ctober /&&6, (C( #o. 6/2%2 was cancelled and (C( #o. /%0&%& in ,#I9#3"#=5s name was issued in its stead. :rivate respondents filed an amended complaint$ on & .ecember /&&6, alleging that they, not the mortgagors, are the true owners of the property mortgaged and insisting on the invalidity of both the mortgage and its subse uent e'tra4udicial foreclosure. (hey claimed that the original title, (C( #o. 6/1$/, was entrusted to a certain "tty. !eynaldo Singson preparatory to its administrative reconstitution after a fire gutted the Mue*on City >all building. Mortgagor +eopoldo, private respondent )ermina5s son, obtained the property from "tty. Singson, had the title reconstituted under his name without private respondents5 ?nowledge, e'ecuted an ante7dated deed of sale in his favor and mortgaged the property to ,#I9#3"#=. 9n /& .ecember /&&6, <udge Ignacio M. Capulong to whom this case was assigned admitted the aforementioned amended complaint and set the application for writ of preliminary in4unction for hearing. "fter ,#I9#3"#=5s motion for reconsideration of said 9rder was denied on /$ <anuary /&&1, it filed a petition for certiorari with the C"

uestioning the admission of the amended complaint. (he C" upheld <udge Capulong5s order admitting the amended complaint on %6 "pril /&&1, ,#I9#3"#= thereafter elevated its cause to this Court. Meanwhile, on & )ebruary /&&1 ,#I9#3"#= filed its answer ad cautelam asserting its status as an innocent mortgagee for value whose right or lien upon the property mortgaged must be respected even if, the mortgagor obtained his title through fraud. It also averred that the action had become "moot and academic by the consolidation of the foreclosed property on %6 9ctober /&&6" in its name, resulting to the issuance of (C( #o. /%0&%& by the !egister of .eeds of Mue*on City. In reaction to ,#I9#3"#=5s revelation, private respondents moved to declare ,#I9#3"#=5s counsel in indirect contempt attac?ing his disobedience to the (!9. 9n /& May /&&1, private respondents moved to declare the other defendants in default for their non7filing of responsive pleadings within the mandatory period and to set the application for preliminary in4unction and indirect contempt for pre7trial and trial. 9n /6 <une /&&1 the second division of this Court denied the petition for certiorari, which it considered as a petition for review under !ule 61, "for failure to show that the C" had committed any reversible error" in 4udgment. In its /& "ugust /&&1 9rder, the !(C held the mortgagors and the City Sheriff of Mue*on City in default and sustained ,#I9#3"#=5s contention that the act sought to be en4oined had been enforced, negating the need of hearing the application for preliminary in4unction. :rivate respondents filed a lengthy motion for reconsideration to this 9rder. (he annulment case was re7raffled to 3ranch %%$ under :residing <udge Eicente M. !o'as upon the creation of new salas. <udge !o'as, on %1 March /&&6, denied the motion to reconsider the /& "ugust /&&1 9rder but suggested that private respondents amend their application from prohibitory to mandatory in4unction. "s private respondents were unable to amend their application, the !(C denied the motion for reconsideration and their motion for indirect contempt, "in the interest of free speech and tolerance" on & <uly /&&6. "sserting grave abuse of discretion, private respondents brought the denial of their motion for reconsideration with the Court of "ppeals on 6 September /&&6. "fter considering the arguments presented by the parties, the C" ruled that despite its ?nowledge that the ownership of the property was being uestioned, ,#I9#3"#= too? advantage of private respondents5 procedural error by consolidating title to the property, which "smac?FedG of bad faith" and "evinceFdG a reprobate disposition of the part of its counsel to advance his client5s cause by fair means or foul." "s a result thereof the transfer of title was vitiated by non7 adherence to procedural due process. 2 9n %6 <une /&&$, C" nullified the consolidation of ownership, ordered the !egister of .eeds to cancel the certificate of title in ,#I9#3"#=5s name and to reinstate (C( #o. 6/2%2 with the notice of lis pendens annotated at the bac?. (he C" also set aside the portion of the assailed !(C 9rders that declared private respondents5 prayer for writ of preliminary in4unction as moot and academic. ,#I9#3"#=5s motion for reconsideration of the above7mentioned decision was li?ewise re4ected for lac? of merit on $ "pril /&&2. >ence, ,#I9#3"#= came to this Court claiming to be a mortgagee in good faith and for value with a right to consolidate ownership over the foreclosed property with the redemption period having e'pired and there having been no redemptioners. ,#I9#3"#= contends that the (!9 which provisionally en4oined the tolling of the redemption period was automatically dissolved upon dismissal of the complaint on /$ 9ctober /&&6. Conformably, consolidation of title in its name and the issuance of (C( #o. /%0&%& rendered further proceedings on the application for in4unction academic. Moreover, the alleged fraudulent mortgage was facilitated through private respondents5 negligence so they must bear the loss. It also contends that since private respondents had filed several pleadings, due process, being an opportunity to be heard either through pleadings or oral arguments, was observed. :rivate respondents maintain that ,#I9#3"#=5s consolidation of the title in its name was in bad faith, vitiated a standing court order, is against the law, thus void a' initio. (he application for preliminary in4unction was not rendered

moot and academic by consolidation, which too? place during the lifetime of the (!9, and did not follow the proper legal procedure due to the surreptitious manner it was accomplished. 3y treating the application for preliminary in4unction as moot and academic and denying the motion for indirect contempt without hearing, the !(C order ran afoul with the re uirements of due process. (wo main issues can be gleaned from the posturing and claims of the parties, to wit, was the consolidation of title in ,#I9#3"#=5s name proper, and was the dismissal of the application for preliminary prohibitory in4unction valid. (he issues must be answered in the affirmative. ,#I9#3"#=5s consolidation of title over the property on %6 9ctober /&&6 was proper, though precipitate. Contrary to private respondents5 allegation ,#I9#3"#= violated no standing court order. (he only bar to consolidation was the temporary restraining order issued by <ustice +ipana7!eyes on /0 9ctober /&&6 which effectively halted the tolling of the redemption period $ days short of its e'piration. Dhen private respondents5 original complaint was dismissed on /$ 9ctober /&&6 for failure to append a certification of non7forum shopping, the (!9, as an ancillary order that cannot stand independent of the main proceeding, became functus officio. (hus the tolling of the /%7month redemption period, interrupted by the filing of the complaint and the (!9, recommenced and eventually e'pired $ days thereafter or on %6 9ctober /&&6, the date of the disputed consolidation. (he motion for reconsideration and to amend complaint filed by private respondent on %0 9ctober /&&6 was of no moment, this Court recogni*ing that "a dismissal, discontinuance or non7suit of an action in which a restraining order or temporary in4unction has been granted operates as a dissolution of the restraining order or temporary in4unction,"& regardless of whether the period for filing a motion for reconsideration of the order dismissing the case or appeal therefrom has e'pired./0 (he rationale therefor is that even in cases where an appeal is ta?en from a 4udgment dismissing an action on the merits, the appeal does not suspend the 4udgment, hence the general rule applies that a temporary in4unction terminates automatically on the dismissal of the action. // De disagree with the appellate court5s observation that consolidation deprived private respondents of their property without due process. It is settled that the buyer in a foreclosure sale becomes the absolute owner of the property purchased if it is not redeemed during the period of one year after the registration of the sale. /%Consolidation too? place as a matter of right since there was no redemption of the foreclosed property and the (!9 e'pired upon dismissal of the complaint. ,#I9#3"#= need not have informed private respondent that it was consolidaint its title over the property, upon the e'piration of the redemption period, without the 4udgment debtor having made use of his right of redemption, the ownership of the property sold becomes consolidated in the purchaser. /3 #otice to the mortgagors and with more reason, to private respondents who are not even parties to the mortgage contract nor to the e'tra 4udicial sale is not necessary. In real estate mortgage, when the principal obligation is not paid when due, the mortgage has the right to foreclose the mortgage and to have the property sei*ed and sold with a view to applying the proceeds to the payment of the principal obligation./6 )oreclosure may be effected either 4udicially or e'tra4udicially. In a public bidding during e'tra74udicial foreclosure, the creditor Kmortgagee, trustee, or other person authori*ed to act for the creditor may participate and purchase the mortgaged property as any other bidder. (hereafter the mortgagor has one year within which to redeem the property from and after registration of sale with the !egister of .eeds./1 In case of non7redemption, the purchaser at foreclosure sale shall file with the !egister of .eeds, either a final deed of sale e'ecuted by the person authori*ed by virtue of the power of attorney embodied in the deed or mortgage, or his sworn statement attesting to the fact of non7redemptionB whereupon, the !egister of .eeds Shall issue a new certificate of title in favor of the purchaser after the owner5s duplicate of the certificate has been previously delivered and canceled./6 (hus, upon failure to redeem foreclosed realty, consolidation of title becomes a matter of right on the part of the auction buyer, /$ and the issuance of a certificate of title in favor of the purchaser becomes ministerial upon the !egister of .eeds. (here is, moreover, nothing erroneous with the denial of private respondents5 application for preliminary prohibitory in4unction. (he acts complained of have already been consummated. It is impossible to restrain the performance of

consummated acts through the issuance of prohibitory in4unction. Dhen the act sought to be prevented had long been consummated, the remedy of in4unction could no longer be entertained, /2 hearing the application for preliminary in4unction would 4ust be an e'ercise in futility. In addition, to be entitled to the in4unctive writ, movant must show that there e'ists a right to be protected which is directly threatened by an act sought to be en4oined. )urthermore, there must be a showing that the invasion of the right is material and substantial and that there is an urgent and paramount necessity for the writ to prevent a serious damage./& (he in4unctive remedy prevents a threatened or continuous irremediable in4ury to some of the parties before their claim can be thoroughly investigated and advisedly ad4udicatedB it is resorted to only when there is a pressing necessity to avoid in4urious conse uences which cannot be remedied under any standard compensation. %0 In the case at bar, the consolidation of ownership over the mortgaged property in favor of ,#I9#3"#= and the issuance of a new title in its name during the pendency of an action for annulment and reconveyance will not cause irreparable in4ury to private respondents who are plaintiffs in the said preliminary in4unction. (his is because .as purchaser at a public auction, ,#I9#3"#= is only substituted to and ac uires the right, title, interest and claim of the 4udgment debtors or mortgagors to the property at the time of levy. %/ :erforce, the 4udgment in the main action for reconveyance will not be rendered ineffectual by the consolidation of ownership and the issuance of title in the name of ,#I9#3"#=. More importantly, with the main action for reconveyance pending before the !(C, the notice of lis pendens, which despite consolidation remains annotated on ,#I9#3"#=5s transfer certificate of title sub4ect to the outcome of the litigation, sufficiently protects private respondents interest over the property. " transferee pendente lite stands e'actly in the shoes of the transferor and is bound by any 4udgment or decree which may be rendered for or against the transferor. 9nce a notice of lis pendens has been duly registered, any cancellation or issuance of the title of the land involved as well as any subse uent transaction affecting the same, would have to be sub4ect to the outcome of the litigation. In other words, upon the termination of the litigation there can be no ris? of losing the property or any part thereof as a result of any conveyance of the land or any encumbrance that may be made thereon posterior to the filing of the notice of lis pendens.%% )inally, as to the issue of who between private respondents and ,#I9#3"#= is negligent and hence must bear the loss, the same is not the proper sub4ect of the present petition and can only be resolved by the trial court after the trial on the merit of the main case. D>-!-)9!-, the assailed .ecision of the Court of "ppeals of %6 <une /&&$ nullifying the consolidation of ownership and ordering the !egister of .eeds of Mue*on City to cancel (C( #o. /%0&%& and reinstate (C( #o. 6/2%2 is hereby !-E-!S-. and S-( "SI.-. (he order of the trial court dated $ "ugust /&&&, declaring ,#I9#3"#=5s prayer for writ of preliminary in4unction moot and academic, is hereby !-I#S("(-.. +et this case be remanded to the !egional (rial Court for trial on the merits. #o pronouncement as to costs.#$ phi#.n%t S9 9!.-!-.

Similarly, the allegation of lack of notice if subsequently proven renders the foreclosure a nullity in line with prevailing jurisprudence

G.R. No. 14%44%

Au&u'( 16, 2004

R*STICO A. ARDIENTE "n AS*NCION PALOMARDIENTE, petitioners, vs. PRO>INCIAL S2ERIFF, REGISTER OF DEEDS OF G*E5ON "n PENINS*LA DE>ELOPMENT BANM,respondents.

//, /&23 in the 9ffice of the :rovincial Sheriff situated in the courthouse building, #ational (rial Court, +ucena City wherein the alleged highest bidder was the defendant for the satisfaction of petitionersT alleged indebtedness of :%6$,%$&./6B6 @,nderscoring in the originalB emphasis suppliedA "s the following allegation in paragraph /1 of the Complaint shows, the "rdiente spouses capitali*ed on the alleged lac? of notice to them of the "4udicial foreclosure auction sale." /1. "nd, the un?indest cut of all came up when, without first having been duly notified of an intended e'tra7 4udicial foreclosure auction sale, petitioners received a letter from the defendant, under date of )ebruary %6, /&26, informing them that "the one @/A year period within which to e'ercise their right to redeem the foreclosed properties commenced to run on #ovember //, /&23 to #ovember //, /&26" @a Qero' copy of which is hereto attached as "nne' """ and made an integral part hereofA. $ @,nderscoring suppliedA 9n the above7 uoted allegations in paragraphs /1 and /6 of the Complaint, the ban?, in its "nswer with Counterclaim, alleged8 ''' /1A "nswering respondent admits the allegations contained in paragraph /1 of the petition, with the e'planations and ualifications, that petitioners were duly notified of the e'tra74udicial foreclosure and public auction sale. (here was sufficient notice and publication served to all concernFedG of said public auction sale of the properties offered as collaterals. 2 @,nderscoring suppliedA @/6A "nswering respondent specifically denies the allegations contained in paragraph F/6G of the petition. (he truth of the matter is that the petitioners have violated the terms and conditions of !eal -state Mortgage, "mended !eal -state Mortgage and that respondent has complied with the re uisites of "rt.3/31 as amended in relation to the application FforG e'tra74udicial proceeding of collaterals."& @,nderscoring suppliedA (o the "nswer the spouses "rdiente filed a !eply and "nswer to Counterclaim. /0 (he Complaint was later amended// whereby the spouses "rdiente alleged that, among other things, the purchase price of the mortgaged parcels of land was so "grossly and greatly inade uate," hence, the foreclosure sale should be annulledB by reason of the unlawful foreclosure of the real estate mortgage, they suffered damagesB and to protect their interests, they filed a formal re uest with the !egister of .eeds to cause a notice of lis pendens. In compliance with the directive of 3ranch 6/ of the ;umaca !(C, the parties submitted their respective memoranda. In their memorandum, the defendants ban? et al. proffered the following pertinent argument on the "rdiente spousesT claim that they were not previously notified of the foreclosure8 FIGt is maintained that there was notice, coupled with a publication of #otice of :ublic "uction Sale in a newspaper of general circulations @sicA supported by publishersT affidavit "((",+e (o (+e 0e,o0 .n (+e O//.,e o/ (+e P0oA.n,."- S+e0.// o/ Gue!on at Calauag, Mue*on. :ersonal notice was sent to the plaintiffs. >owever, said re uirements in the e'tra74udicial foreclosure is dispensed with, in accordance with the decision of the Supreme Court in the case of 777 39##-EI- E. C9,!( 9) "::-"+S, /%1 SC!" /%% @/&23A

.-CISI9#

CARPIO MORALES, J!< In mid7#ovember /&$&, the spouses !ustico "rdiente and "suncion :aloma, together with their son "ngel :. "rdiente and the latterTs wife ;liceria "rdiente, obtained a loan in the amount of :/00,000.00 from the :eninsula .evelopment 3an? @the ban?A at its main office at +ucena City, to be amorti*ed in si' years, on account of which they e'ecuted a #ovember /1, /&$& :romissory #ote/ in the same amount. (o secure the payment of the loan, the "rdientes e'ecuted in favor of the ban? a !eal -state Mortgage % on #ovember /6, /&$& over a parcel of land situated at Mabutag, Cawa, 3uenavista, Mue*on and covered by (ransfer Certificate of (itle @(C(A #o. %&6$2, and three @3A parcels of land situated at Cadlit, ;uinayangan, Mue*on and covered by 9riginal Certificate of (itle @9C(A #o. 071&6/. 9ut of the proceeds of the loan, the "rdientes purchased a mini bus costing :2/,2$1.00. "fter the bus was in operation for several months, it met an accident in "ugust /&20 as result of which it sustained heavy damages and rendered the "rdientes unable to meet their obligation to the ban?. "s the "rdientes were later granted by the ban? an additional loan of :66,000 for which they e'ecuted an 9ctober %&, /&2/ :romissory #ote, 3 the !eal -state Mortgage was amended. .emands for the payment of their obligation to the ban? notwithstanding, the "rdientes failed to settle the same. (he ban? thus e'tra74udicially foreclosed the mortgage and the parcels of land covered thereby were sold at public auction to the ban? which was the highest bidder. (he ban? later notified the "rdientes by letter of )ebruary %6, /&26 6 that they had one @/A year from #ovember //, /&23 or up to #ovember //, /&26 to redeem the foreclosed mortgage. (wo days before the period to redeem the foreclosed mortgage e'pired or on #ovember &, /&26, the spouses !ustico and Suncion "rdiente filed before the !egional (rial Court @!(CA of Mue*on at ;umaca a complaint, denominated as :etition,1 against the ban?, the provincial Sheriff of Mue*on, and the !egister of deeds of Mue*on, for "nnulment of "uction Sale with :reliminary In4unction and .amages, anchored to two grounds as reflected in paragraph /6 of the Complaint8 /6. 9n two @%A legal grounds, therefore, namely, @aA that it was the defendant, not herein petitioners, who had violated the !eal -state Mortgage and "mended !eal -state Mortgage, and @bA that (+e 0e=u.'.(e o/ no(./8.n& (+e :o0(&"&o0' o/ (+e .n(en e eI(0"9;u .,."- /o0e,-o'u0e '"-e <"' no( u-8 ,o:1-.e <.(+ U the )9!-C+9S,!- S"+- should be annulled, which had supposedly ta?en place on #ovember

In e'tra74udicial foreclosure, "ct #o. 3/31 personal notice on the mortgagor is not necessary. Section 3 thereof reads8 Sec. 3 R #otice shall be given by posting notices of the sale for not less than twenty @%0A days in at least three @3A public places of the municipality or city where the property is situated, and if such property is worth more than :600.00, such notice shall also be published once a wee? for at least 3 consecutive wee?s in a newspaper of general circulation in the municipality or city. Such phrase "once a wee? for at least 3 consecutive wee?s", as interpreted in "3"S" vs. M-!C".9" @6/ :hil. 63%A does not mean that the notice should be published for 3 full wee?s. /% @-mphasis and underscoring suppliedA 3y .ecision of "ugust /%, /&&6,/3 the trial court, noting the absence of documentary evidence showing strict compliance with the statutory re uirements on publication of notice of e'tra74udicial foreclosure of mortgage, declared the e'tra74udicial foreclosure and the sale of the mortgaged properties null and void. (hus, the trial court discoursed8 !espondent 3an? maintained that it filed an e'tra74udicial foreclosure with the :rovincial Sheriff of Mue*on. "fter due notice and publication, these properties were sold at :ublic "uction Sale where a corresponding Certificate of Sale @-'h. 1A was issued in its name dated #ovember //, /&23, as the sole bidder @Memorandum for the .efendants, p.6A. 9n page $ of said Memorandum, it contended that there was notice, coupled with a publication of #otice of :ublic "uction Sale in a newspaper of general circulation supported by publisherTs affidavit attached to the record in the 9ffice of the :rovincial Sheriff of Mue*on at Calauag, Mue*on. :ersonal notice was sent to petitioners. @!ecord, pp. 312 O 36/, Memorandum )or the .efendants, pages 6 O $A. De'1.(e (+e'e "--e&"(.on' on 0e,o0 , no o,u:en("08 eI+.7.(' o/ 'u,+ 1u7-.,"(.on o/ no(.,e o/ 1u7-., "u,(.on '"-e .n " ne<'1"1e0 o/ &ene0"- ,.0,u-"(.on' 'u11o0(e 78 1u7-.'+e0N' "//. "A.( <e0e eAe0 'u7:.((e 78 0e'1on en( B"nD. Considering that petitioners are clearly attac?ing the validity of the public auction sale for which respondent 3an? was the sole bidder, '". o,u:en("08 eI+.7.(' '+ou- +"Ae 7een 10e'en(e .n ,ou0( "n no( :e0e-8 "--e&e (o 7e "((",+e (o (+e 0e,o0 .n (+e O//.,e o/ (+e P0oA.n,."- S+e0.// o/ Gue!on "( C"-"u"&, Gue!on. (he clear fact remains that these documents were not submitted to form part of the records of this case. #o such proof of publication e'ists in the records. In the case of T":7un(.n& A'. Cou0( o/ A11e"-' @/6$ SC!" /$A, the >on. Supreme Court stressed that "failure to present proof of posting and publication rebuts the presumption of compliance with official duty". (o show compliance, the published notices and certificate of posting by the sheriff of the notice of sale on #ovember //, /&23 should have been presented. (herefore, .n (+e "7'en,e o/ ,onA.n,.n& 10oo/ (+"( (+e '("(u(o08 10oA.'.on' &oAe0n.n& 1u7-.,"(.on o/ no(.,e o/ :o0(&"&e /o0e,-o'u0e '"-e' +"Ae 7een '(0.,(-8 ,o:1-.e <.(+, (+.' Cou0( +"' no o(+e0 0e,ou0'e eI,e1( (o e,-"0e "' nu-- "n Ao. (+e '"-e in favor of 4udgment creditor, made by respondent Sheriff on #ovember /%, /&23, awarding the properties in uestion to respondent 3an?, and for which, the titles in the name of petitioner7spouses were already cancelled and registered in its name. (his Court also finds that petitioners are entitled to and deserving the reliefs prayed for. /6 @-mphasis and underscoring suppliedA, "ccordingly, the trial court disposed as follows8 D>-!-)9!-, 4udgment is hereby rendered, in favor of petitioners, and against the respondents, as follows8 @/A .eclaring as null and void the e'tra4udicial foreclosure and sale conducted by respondent :rovincial Sheriff of Mue*onB @%A .eclaring as null and void all transactionsLproceedings held subse uent thereto such as the e'ecution of the final deed of sale and issuance of title to and in the name of respondent 3an?B

@3A 9rdering the respondent !egister of .eeds of Mue*on to re7issue a new (ransfer Certificate of (itle to and in the name of petitioners in lieu of the former titles which had been deemed cancelled by virtue of the issuance of the titles which had been deemed cancelled by virtue of the issuance of the titles which had been issued in favor of respondent CorporationB and @6A 9rdering all respondents, 4ointly and severally, to pay unto herein petitioners, the sum of :/1,000, for attorneyTs fees and litigation e'penses of :/0,000. Costs against defendants. S9 9!.-!-../1 (he .efendants ban? et al. thus appealed to the Court of "ppeals upon the following assigned errors8 EI.F (>- +9D-! C9,!( -!!-. I# )I#.I#; "#. C9#C+,.I#; (>"( (>-!- D"S "3S-#C- 9) C9#EI#CI#; :!99) (>"( (>- S("(,(9!J :!9EISI9#S ;9E-!#I#; :,3+IC"(I9# 9) #9(IC- 9) M9!(;";- )9!-C+9S,!- S"+- >"E- 3--# S(!IC(+J C9M:+I-. DI(>. EII.F (>- C9,!( " M,9 -!!-. I# .-C+"!I#; #,++"#. E9I. (>- -Q(!"<,.ICI"+ )9!-C+9S,!"#. S"+- C9#.,C(-. 3J !-S:9#.-#( :!9EI#CI"+ S>-!I)) 9) M,-H9#, "#. "++ (!"#S"C(I9#SL:!9C--.I#;S >-+. S,3S-M,-#( (>-!-(9 S,C> "S (>- -Q-C,(I9# 9) (>- )I#"+ .--. 9) S"+- "#. ISS,"#C- 9) (I(+- (9 "#. I# (>- #"M- 9) !-S:9#.-#( 3"#=. EIII.F (>- +9D-! C9,!( -!!-. I# 9!.-!I#; (>- !!-S:9#.-#( !-;IS(-! 9) .--.S 9) M,-H9# (9 !-ISS,- " #-D (!"#S)-! C-!(I)IC"(- 9) (I(+- (9 "#. I# (>- #"M- 9) :-(I(I9#-!S I# +I-, 9) (>- )9!M-! (I(+-S D>IC> >". 3--# .--M-. C"#C-++-. 3J EI!(,- 9) (>- ISS,"#C- 9) (>- (I(+-S D>IC> >". 3--# ISS,-. I# )"E9! 9) !-S:9#.-#( C9!:9!"(I9#. EI>.F (>- (!I"+ C9,!( -!!-. I# "D"!.I#; (9 :+"I#(I))S7"::-++--ST "((9!#-JTS )--S "3. +I(I;"(I9# -Q:-#S-S./6 @,nderscoring suppliedA 3y .ecision of <anuary %&, %00/,/$ the Court of "ppeals 0eAe0'e the decision of the trial court after finding the argument of the defendant7appellants ban? et al. that the lac? of re uired notice and publication of the e'tra74udicial foreclosure of mortgage was not averred in the complaint, hence, cannot be the basis of an adverse 4udgment. -'plaining its reversal of the decision, the Court of "ppeals held8 It is a'iomatic that the complaint should inform the defendant of all the material facts on which the plaintiff relies to support his demandB it should state the theory of a cause of action which forms the bases of the plaintiffTs claim of liability. (he office, purpose or function of the complaint is to inform the defendant clearly and definitely of the claims made against him so that he may be prepared to meet the issues at the trial.

9therwise stated, if the wrong or omission of the defendant is not alleged in the complaint, then the defendant would be precluded from presenting evidence to refute the imputation of such wrong or present 4ustification for the alleged omission. In this case, even perfunctory reading of the :etition and the "mended :etition, readily reveals the "7'en,e o/ "n8 "Ae0:en( 0e-"(.n& (o (+e 0e=u.0e 1o'(.n& "n 1u7-.,"(.on o/ (+e no(.,e o/ /o0e,-o'u0e '"-e. ,nderstandably then, the defendant7appellant 3an? saw no need to present the SheriffTs Certification of :osting and the newspaper where the notice was published as well as the publisherTs affidavit. Clearly, the presumption that the :rovincial Sheriff of Mue*on has discharged his official duty in a regular manner and that the defendant7appellant 3an? complied with the re uirements under the law will suffice. An <+.-e .( :"8 7e (0ue (+"( (+e Su10e:e Cou0( '". , .n (+e ,"'e o/ Tam"unting v! Court of Appeals "n 0e-.e u1on 78 (+e (0."- ,ou0(, (+"( (+e 10e'u:1(.on o/ ,o:1-."n,e <.(+ o//.,."- u(8 .' 0e7u((e 78 (+e /".-u0e (o 10e'en( 10oo/ o/ 1o'(.n& "n 1u7-.,"(.on o/ (+e no(.,e o/ '"-e, 'u,+ :"8 7e "11-.e on-8 <+en (+e'e o:.''.on' "0e "--e&e "n 0".'e 78 (+e 1"0(8 .n (+e ,o:1-".n(. (he result would have been different if evidence of these issues were raised during the trial of the case with the ac uiescence of the parties. (hen, the rule on the amendment of the petition to conform to or authori*e presentation of evidence may be applied, thus8 Sec. 1. Amendment to conform to or authori0e presentation of evidence.B Dhen issues not raised in the pleadings are tried with the e'press or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after 4udgments but failure to amend does not affect the result of the trial of these issues. ''' "s earlier stated however, the issue of lac? of posting and publication was not even discussed nor even touched in the testimony of plaintiff7appellee !ustico "rdiente. >is testimony is limited only to his receipt of a letter from the ban? that their properties have been foreclosed and that they have one year to redeem the same. (he plaintiffs7appellees only imputed to the defendant7appellant 3an? its omission to give them personal notice of the foreclosure sale. >owever, it is 4urisprudentially settled that personal notice to the mortgagor in e'tra4udicial foreclosure proceedings is not necessary. >ence, lac? of personal notice to the mortgagors is not a ground to set aside the foreclosure sale. -rgo, the trial court erred in declaring the foreclosure null and void based on a ground not raised in the pleadings nor tried before it. /2 @,nderscoring in the originalB emphasis suppliedA >ence, the present petition for review filed by the "rdiente spouses proferring the following8 !-"S9#S D"!!"#(I#; !-EI-D I. !-S:9#F-#(G C9,!( 9) "::-"+S S-!I9,S+J -!!-. I# >9+.I#; (>"( SI#C- (>:-(I(I9#-!TS I# (>-I! :-(I(I9# "#. I# (>-I! "M-#.-. :-(I(I9# .I. #9( M-#(I9# (>"3S-#C- 9) (>- !-M,I!-. :9S(I#; "#. :,3+IC"(I9# 9) (>- #9(IC- 9) )9!-C+9S,!S"+-, (>-!- IS #9 #--. )9! (>- .-)-#."#( "::-++"#( 3"#= (9 :!-S-#( (>- S>-!I)) C-!(I)IC"(I9# 9) :9S(I#; "#. (>- #-DS:":-! D>-!- (>- #9(IC- D"S :,3+IS>-. "S D-++ "S (>- :,3+IS>-!TS "))I."EI( (9 :!9E- (>- E"+I.I(J 9) (>- )9!-C+9S,!- S"+-. II. !-S:9#.-#( C9,!( 9) "::-"+S S-!I9,S+J -!!-. I# !-E-!SI#; (>- (!I"+ C9,!(TS .-CISI9# "#. .ISMISSI#; :-(I(I9#-!TS C9M:+"I#(.

III. !-S:9#.-#( C9,!( 9) "::-"+S S-!I9,S+J -!!-. I# #9( "D"!.I#; "((9!#-JTS )--S "#. +I(I;"(I9# -Q:-#S-S (9 (>- :+"I#(I))S7"::-++--S. /& (he spouses "rdientes @hereinafter referred to as petitionersA argue that paragraph /1 of their Complaint and paragraph /6 of the "mended Complaint show that they were "attac?ing the validity of the e'tra74udicial sale"B that the impleading of the sheriff demonstrates that they are " uestioning the validity and legality of his performance of officially duty"B that the ban? was sufficiently informed of their "cause of action, theory of their case and relief being sought" as shown by the ban?Ts allegations in paragraphs /1 and /6 of its "nswerB and that in fact in the ban?Ts Special and "ffirmative .efenses, particularly paragraph %1 thereof which reads8 %1A (hat answering respondent as well as the 9ffice of :rovincial Sheriff fully complFiedG FwithG the re uirements of law under "ct 3/31 as amended, more specifically with regards to notices of the public auction sale as well as the e'tra74udicial foreclosure application in accordance with the law. %0, an issue was tendered, the nature of which affirmative defense7answer called for the presentation of evidence, they citing /enavides v. Ala'astro,%/ but the ban? did not present "proof of proper compliance with "ct 3/31, ""# "C( (9 !-;,+"(- (>- S"+- 9) :!9:-!(J ,#.-! S:-CI"+ :9D-!S I#S-!(-. I# 9! "##-Q-. (9 !-"+ -S("(- M9!(";-S,8 as to posting and publication of notices of public auction sale. (he Court is not persuaded. Dith respect to petitionersT paragraphs /1 and /6 allegations in their Complaint, clearly, they were uestioning the validity of the e'tra74udicial foreclosure of the mortgage on the basis of lac? of notice to them as mortgagors. It is settled that personal notice to the mortgagor in e'tra74udicial foreclosure proceedings is not necessary, hence, not a ground to set aside the foreclosure sale. %% Dith respect to petitionersT argument that the ban?, in paragraph %1 of its "nswer, in fact put in issue its compliance with the re uirements of "ct 3/31, "more specifically with regards to the notices of the public auction sale as well as the e'tra74udicial application in accordance with law," to thus call for the presentation of evidence, they citing again /enavides,%3 the same fails. /enavides bears on the rendition of 4udgment on the pleadings. It holds that where the defendantTs answer tenders an issue, as where it does not only deny the :"(e0."- allegations of the complaint but also sets up certain special and affirmative defenses, the nature of such answer calls for presentation of evidence, hence, it is error (o0en e0 " ;u &:en( on (+e 1-e" .n&' thereon without such evidence. #o doubt, it is a well7settled rule that statutory provisions governing publication of notice of mortgage foreclosure sales must be strictly complied with, and that even slight deviations therefrom will invalidate the notice and the sale at least voidable.%6 .espite petitionersT non7allegation of lac? of publication of notice of foreclosure in their Complaint, the ban? pleaded in its "nswer @/A "that petitioners were duly notified of the e'tra4udicial foreclosure and public auction sale" and "FtGhere was sufficient notice and publication served to all concernFedG of said public auction sale," and @%A that it and the 9ffice of the provincial Sheriff "fully complFiedG with the re uirements of law under "ct 3/31, more specifically with regard to notices of the public auction as well as the e'tra74udicial foreclosure in accordance with law." Jet petitioners never refuted in their !eply and "nswer to Counterclaim such defense of the ban? nor presented evidence before the trial court to disprove the same.

In fact, in its Comment on petitionersT )ormal 9ffer of -vidence before the trial court, the ban?, passing on -'hibit "." R its letter to petitioners advising them that they had one year from #ovember //, /&&3 to e'ercise their right of redemption, stated that said e'hibit was admitted "with the ualification as to the purpose to the effect that said e'tra7 4udicial foreclosure was filed in accordance with law and that all re uirements of said law were complied with and that plaintiffs were duly notified of said proceedings." %1 .espite the ban?Ts repeated claim that the statutory re uirements governing e'tra74udicial foreclosure had been complied with, the ban?Ts plea of lac? of publication of notice of foreclosure was not raised by petitioners either in the "mended Complaint or in the !eply and "nswer to Counterclaim. It was not also raised during the trial as the entire transcripts of the stenographic notes of the proceedings before the trial court show. #or even in their memorandum filed before the trial court, petitioners having merely assailed the lac? of "personal" notification to them of any "intended" e'tra4udicial foreclosure and the "grossly and greatly inade uate" purchase price of the lands. "s the appellate court thus held, the issue of lac? of publication of notice cannot be raised for the first time on appeal. In the (ambunting case cited by petitioners to support their thesis that failure to strictly comply with statutory re uirements governing publication of notice of mortgage foreclosure sales renders the sale at least voidable, the therein mortgagors, in their complaint for annulment of mortgage and damages, sought to en4oin the e'tra74udicial foreclosure of mortgage. .uring the pendency of the case, the e'tra74udicial foreclosure pushed thru 4ust the same. (he mortgaged property was sold at public auction to the mortgagees, and the property was eventually sold to the Tam'untin( *ealt". (he mortgagors thereupon filed a Supplemental Complaint impleading the realty firm, the provincial sheriff as the officer responsible for holding the foreclosure, and the !egister of .eeds for the subse uent transfer of the property "despite alleged non7compliance with the re uirements of "ct 3/31, Sec. 3 @as amended by "ct 6//2A on posting and publication of the notice of foreclosure sale." In other words, the lac? of publication was raised in issue by the mortgagors in their Supplemental Complaint. In the case of +o v. Court of Appeals,%6 as in the present case, despite the fact that the mortgagees pleaded as a defense in their "nswer the "receipt of the Vnotice of the sale which was published in a newspaper of general circulation,TTT the issue of lac? of publication of the notice of foreclosure was never raised in issue by the mortgagors. In disposing of the issue of lac? of publication of the notice of foreclosure of mortgage which was raised for the first time on appeal, this Court in +o held8 Indeed, as correctly held by the respondent Court, the issue of lac? of publication of the notice of foreclosure of the mortgage was raised only on appeal. :etitioner does not represent that he directly attac?ed in his complaint in Civil Case #o. 2&%0 the validity of the foreclosure because of such lac? of notice. >is own Statement of the Facts and of the Case in the instant petition ma?es no reference to such lac? o notice as one, or even 4ust as a basis for any, of his causes of action in the complaint. >e sought the cancellation of the contract of mortgage because he allegedly never received the amounts indicated in the promissory notes. 9f course, nullity of the mortgage due to absence of consideration is leagues apart form the nullity of the foreclosure of a mortgage because of non7publication of the notice of foreclosure. "dditionally, petitioner presented no evidence before the trial court to prove the absence of publication of the notice despite the fact that private respondents, in their "nswer, s uarely 1-e" e "' " e/en'e the foreclosure sale and petitionerTs receipt of the @no(.,e o/ (+e '"-e <+.,+ <"' 1u7-.'+e .n " ne<'1"1e0 o/ &ene0"- ,.0,u-"(.on.@ (hat the lac? of publication of the notice of foreclosure was never raised in issue by petitioner and that it is not within the issues framed by the parties in the trial court are then too obvious. @-mphasis and underscoring suppliedA %$ )2EREFORE, there being no reversible error in the assailed decision, the petition is hereby .ISMISS-.. #o pronouncement as to costs.

In 3:I )amily Savings 3an?, Inc. v. Eeloso, /0 the Court had occasion to state the re uirements for the redemption of the foreclosed property. (he Court held8 (he general rule in redemption is that it is not sufficient that a person offering to redeem manifests his desire to do so. (he statement of intention must be accompanied by an actual and simultaneous tender of payment. (his constitutes the e'ercise of the right to repurchase. G.R. No. 141364 Au&u'( 3, 2004

BPI FAMILY SA>INGS BANM, INC., petitioner, vs. SPS. JAN*ARIO ANTONIO >ELOSO AND NATI>IDAD >ELOSO, respondents.

.-CISI9#

CORONA, J.# 3efore us is a petition for review of the decision / dated )ebruary /6, %000 of the Court of "ppeals affirming the decision of the !egional (rial Court, 3ranch &6, Mue*on City, % which upheld the validity of the e'tra74udicial foreclosure proceedings initiated by )amily 3an? and (rust Company @)amily 3an?A on the mortgaged properties of respondent spouses <anuario "ntonio Eeloso and #atividad Eeloso but allowed the latter to redeem the same properties. 9n <anuary 2, /&23, respondent spouses obtained a loan of :/,300,000 from petitionerTs predecessor7in7interest )amily 3an? and (rust Company. (o secure payment of the loan, respondent spouses e'ecuted in favor of the ban? a deed of mortgage over three parcels of land, with improvements, registered in their names under (C( #os. %$%%%$, %$%%%2 and %$%%%& of the !egistry of .eeds of Mue*on City. 9n )ebruary &, /&23, respondents, for value received, e'ecuted a promissory note for :/,300,000. Subse uently, however, respondents defaulted in the monthly installments due on their loan. Dhen efforts to update the account failed, )amily 3an? instituted e'tra74udicial foreclosure proceedings on the respondentsT mortgaged properties. 9n <uly /, /&21, the properties were sold at public auction with )amily 3an? as the highest bidder for:%,$2%,116.66. 9n "ugust 1, /&21, )amily 3an? assigned all its rights and interests in the foreclosed properties to petitioner 3:I )amily 3an?, Inc. @3:IA. 9n "ugust %2, /&21, the sheriffTs certificate of sale was registered with the !egistry of .eeds of Mue*on City. 9n <uly %6, /&26, respondents, through counsel, wrote 3:I offering to redeem the foreclosed properties for:/,2$%,&31. (his was, however, re4ected by petitioner.

9n "ugust %$, /&26, respondents filed in the !(C of Mue*on City, 3ranch &6, a complaint for annulment of foreclosure, with consignation and prayer for damages. 9n motion of respondents, the trial court, in an order dated "ugust %$, /&26, allowed respondents to deposit with the cler? of court the sum of :/,100,000 representing the redemption price. (hereafter, trial on the merits ensued. Meanwhile, in 3ranch $6 of the !egional (rial Court of Mue*on City, 3:I was able to secure a writ of possession over the foreclosed properties. (his prompted respondents to file with the Court of "ppeals a petition for certiorari with preliminary in4unction doc?eted as C"7;.!. S: #o. %%62/. 9n 9ctober 2, /&&0, the Court of "ppeals resolved to grant respondentsT motion for preliminary mandatory in4unction. -ventually, however, in a decision promulgated on May 3/, /&&/, the Court of "ppeals, in C"7;.!. S: #o. %%62/, resolved the issue of possession in favor of 3:I and accordingly lifted the preliminary mandatory in4unction it had earlier issued, denying altogether respondentsT petition. )rom this decision, respondents came to this Court via a petition for review which was, however, denied in a resolution dated <anuary /3, /&&%. (he resolution affirmed, in effect, petitionerTs right to the possession of the sub4ect properties. 9n .ecember /6, /&&%, upon motion of respondents and despite the opposition of petitioner, 3ranch &6 ordered the release of :/,600,000 of the consigned amount to respondents, with the balance of :/00,000 to ta?e the place of the in4unction bond to answer for whatever damages petitioner might suffer because of the issuance of the preliminary in4unction @previously issued and later liftedA in favor of respondents. )inally, on "ugust /2, /&&1, after almost a decade of protracted litigation, the trial court rendered a decision declaring the validity of the e'tra74udicial foreclosure of the mortgaged properties of respondents but allowed the redemption of the same at a redemption price of :%,/60,000. 3:I elevated the matter to the Court of "ppeals which affirmed the trial courtTs decision, with modification8 D>-!-)9!-, sub4ect to the modification declaring :%,6$2,63&.20 as the redemption price due the appellant, the decision appealed from is hereby "))I!M-. in all other respects. 3 >ence, the instant petition based on the following assigned errors8 I (>- >9#9!"3+- C9,!( 9) "::-"+S .-CI.-. " M,-S(I9# 9) S,3S("#C- I# " D"J #9( I# "CC9!. DI(> +"D "#. (>- "::+IC"3+- .-CISI9#S 9) (>IS >9#9!"3+- C9,!( D>-# I( "))I!M-. (>- .-CISI9# 9) (>- (!I"+ C9,!( "#. "++9D-. (>- !-S:9#.-#(S (9 !-.--M (>- )9!-C+9S-. :!9:-!(J. II "SS,MI#; )9! (>- S"=- 9) "!;,M-#(, 3,( DI(>9,( ".MI((I#;, (>"( (>- >9#9!"3+C9,!( 9) "::-"+S .I. #9( -!! I# "))I!MI#; (>- .-CISI9# 9) (>- (!I"+ C9,!(, #-E-!(>-+-SS I( .-CI.-. " M,-S(I9# 9) S,3S("#C- I# " D"J #9( I# "CC9!. DI(> +"D "#. (>- "::+IC"3+- .-CISI9#S 9) (>IS >9#9!"3+- C9,!( D>-# I( )IQ-. (>!-.-M:(I9# :!IC- (9 3- :"I. 3J !-S:9#.-#(S (9 :-(I(I9#-! "( 9#+J :%,6$2,63&.20 "#. S>"++ 9#+J -"!# /I :-! M9#(> ,#.-! S-C(I9# %2, !,+- 3& 9) (>- /&&$ !,+-S 9) CIEI+ :!9C-.,!-. (he fact is that, at the time of the foreclosure sale on <uly /, /&21, respondent spouses Eeloso had already defaulted on their loan to petitionerTs predecessor7in7interest family ban?. In a real estate mortgage, when the principal obligation

is not paid when due, the mortgagee has the right to foreclose on the mortgage and to have the property sei*ed and sold, and to apply the proceeds to the obligation.6 foreclosure is proper if the debtor is in default in the payment of his obligation.1 and in this case, the validity of the e'tra74udicial foreclosure on <uly /, /&21 was confirmed by both the trial court and the court of appeals. De find no reason to uestion it. (he sole uestion therefore that remains to be resolved is8 did respondent spouses comply with all the re uirements for the redemption of the sub4ect propertiesS De answer in the negative. (he general rule in redemption is that it is not sufficient that a person offering to redeem manifests his desire to do so. (he statement of intention must be accompanied by an actual and simultaneous tender of payment. (his constitutes the e'ercise of the right to repurchase. 6 In several cases$ decided by the Court where the right to repurchase was held to have been properly e'ercised, there was an une uivocal tender of payment for the /u-- ":oun( o/ the repurchase price. 9therwise, the offer to redeem is ineffectual.2 /ona fide redemption necessarily implies a reasonable and valid tender of the entire repurchase price, otherwise the rule on the redemption period fi'ed by law can easily be circumvented. "s e'plained by this Court in /as'as vs. ;ntena8& ' ' ' the e'istence of the right of redemption operates to depress the mar?et value of the land until the period e'pires, and to render that period indefinite by permitting the tenant to file a suit for redemption, with either party unable to foresee when final 4udgment will terminate the action, would render nugatory the period of two years fi'ed by the statute for ma?ing the redemption and virtually paraly*e any efforts of the landowner to reali*e the value of his land. #o buyer can be e'pected to ac uire it without any certainty as to the amount for which it may be redeemed, so that he can recover at least his investment in case of redemption. In the meantime, the landownerTs needs and obligations cannot be met. It is doubtful if any such result was intended by the statute, absent clear wording to that effect. Conse uently, in this case, the offer by respondents on <uly %6, /&26 to redeem the foreclosed properties for:/,2$%,&31 and the subse uent consignation in court of :/,100,000 on "ugust %$, /&26, while made within the period/0 of redemption, was ineffective since the amount offered and actually consigned not only did not include the interest but was in fact also way below the :%,$2%,116.66 paid by the highest bidderLpurchaser of the properties during the auction sale. In /odion(an vs. Court of Appeals,// we held8 In order to effect a redemption, the 4udgment debtor must pay the purchaser the redemption price composed of the following8 @/A the price which the purchaser paid for the propertyB @%A interest of /I per month on the purchase priceB @3A the amount of any assessments or ta'es which the purchaser may have paid on the property after the purchaseB and @6A interest of /I per month on such assessments and ta'es ' ' '. )urthermore, "rticle /6/6 of the Civil Code of the :hilippines provides8 (he vendor cannot avail himself of the right to repurchase without returning to the vendee the price of the sale ' ' '. It is not difficult to understand why the redemption price should either be fully offered in legal tender or else validly consigned in court. 9nly by such means can the auction winner be assured that the offer to redeem is being made in good faith.

(he sum of :/,600,000 consigned by respondents in 3ranch &6 was subse uently withdrawn by them, leaving only :/00,000 to ta?e the place of the in4unction bond. (his would have been tantamount to re uiring petitioner to accept payment by installments as there would have necessarily been an indefinite e'tension of the redemption period./% If a partial payment can bind the winning bidder or purchaser in an auction sale, by what rule can the payment of the balance be determinedS :etitioner could not be e'pected to entertain an offer of redemption without any assurance that respondents could pay the repurchase price immediately. " contrary rule would leave the buyers at foreclosure sales open to harassment by e'pectedly angry debtors and cause unnecessary prolongation of the redemption period, contrary to the policy of the law. Dhether or not respondents were diligent in asserting their willingness to pay is irrelevant. !edemption within the period allowed by law is not a matter of intent but a uestion of payment or valid tender of the full redemption price within said period.

PARTITION G.R. No. 1$%360 J"nu"08 1H, 2010

CELESTINO BAL*S, :etitioner, vs. SAT*RNINO BAL*S "n LEONARDA BAL*S >DA. DE CAL*NOD, !espondents. .-CISI9# PERALTA, J.#

(he disposition of the instant case in the trial court unnecessarily dragged for almost a decade. #ow, it is on its /2th year and still respondents have not tendered the full redemption price. #or have they consigned the full amount, if only to prove their willingness and ability to pay. (his would have evidenced their good faith. (he law granted respondents the right of redemption. 3ut in so granting that right, the law intended that their offer to redeem be valid and effective, accompanied by an actual tender of the redemption price. )i'ing a definite term within which the property should be redeemed is meant to avoid prolonged economic uncertainty over the ownership of the thing sold. In the case at bar, the offer was not a legal and effective e'ercise of the right of redemption contemplated by law, hence, refusal of the offer by petitioner was completely 4ustified. )inally, respondents cannot argue that the law on e uity should prevail. - uity applies only in the absence of, and never against, statutory law or 4udicial rules of procedure. /3 )2EREFORE, the appealed decision of the Court of "ppeals is hereby !-E-!S-. and S-( "SI.-. (he complaint filed by respondents, the spouses Eeloso, is hereby dismissed. SO ORDERED

"ssailed in the present petition for review on certiorari under !ule 61 of the !ules of Court is the .ecision/ of the Court of "ppeals @C"A dated May 3/, %001 in C"7;.!. CE #o. 1206/ which set aside the )ebruary $, /&&$ .ecision of the !egional (rial Court @!(CA of +anao del #orte, 3ranch 6 in Civil Case #o. 3%63. (he facts of the case are as follows8 >erein petitioner and respondents are the children of the spouses !ufo and Sebastiana 3alus. Sebastiana died on September 6, /&$2, while !ufo died on <uly 6, /&26. 9n <anuary 3, /&$&, !ufo mortgaged a parcel of land, which he owns, as security for a loan he obtained from the !ural 3an? of Maigo, +anao del #orte @3an?A. (he said property was originally covered by 9riginal Certificate of (itle #o. :763&@$22A and more particularly described as follows8 " parcel of land with all the improvements thereon, containing an area of 3.0$60 hectares, more or less, situated in the 3arrio of +agundang, 3unawan, Iligan City, and bounded as follows8 3ounded on the #-., along line /7%, by +ot 1/%%, Csd7%&%B along line %7/%, by .odiongan !iverB along line /%7/3 by +ot 666&, Csd7%&%B and along line /%7/, by +ot 666/, Csd7%&%. ' ' ' % !ufo failed to pay his loan. "s a result, the mortgaged property was foreclosed and was subse uently sold to the 3an? as the sole bidder at a public auction held for that purpose. 9n #ovember %0, /&2/, a Certificate of Sale 3was e'ecuted by the sheriff in favor of the 3an?. (he property was not redeemed within the period allowed by law. More than two years after the auction, or on <anuary %1, /&26, the sheriff e'ecuted a .efinite .eed of Sale 6 in the 3an?5s favor. (hereafter, a new title was issued in the name of the 3an?. 9n 9ctober /0, /&2&, herein petitioner and respondents e'ecuted an -'tra4udicial Settlement of -state 1ad4udicating to each of them a specific one7third portion of the sub4ect property consisting of /0,%66 s uare meters. (he -'tra4udicial Settlement also contained provisions wherein the parties admitted ?nowledge of the fact that their father mortgaged the sub4ect property to the 3an? and that they intended to redeem the same at the soonest possible time. (hree years after the e'ecution of the -'tra4udicial Settlement, herein respondents bought the sub4ect property from the 3an?. 9n 9ctober /%, /&&%, a .eed of Sale of !egistered +and 6 was e'ecuted by the 3an? in favor of respondents. Subse uently, (ransfer Certificate of (itle @(C(A #o. (73&,626@a.f.A $ was issued in the name of respondents. Meanwhile, petitioner continued possession of the sub4ect lot. 9n <une %$, /&&1, respondents filed a Complaint 2 for !ecovery of :ossession and .amages against petitioner, contending that they had already informed petitioner of the fact that they were the new owners of the disputed property, but the petitioner still refused to surrender possession of the same to them. !espondents claimed that they had e'hausted all remedies for the amicable settlement of the case, but to no avail.

9n )ebruary $, /&&$, the !(C rendered a .ecision & disposing as follows8 D>-!-)9!-, 4udgment is hereby rendered, ordering the plaintiffs to e'ecute a .eed of Sale in favor of the defendant, the one7third share of the property in uestion, presently possessed by him, and described in the deed of partition, as follows8 " one7third portion of (ransfer Certificate of (itle #o. (73&,626 @a.f.A, formerly 9riginal Certificate of (itle #o. :7$22, now in the name of Saturnino 3alus and +eonarda 3. Eda. de Calunod, situated at +agundang, 3unawan, Iligan City, bounded on the #orth by +ot 1/%%B -ast by shares of Saturnino 3alus and +eonarda 3alus7CalunodB South by +ot 666&, .odiongan !iverB Dest by +ot 666/, consisting of /0,%66 s uare meters, including improvements thereon. and dismissing all other claims of the parties. (he amount of :6,$33.33 consigned by the defendant with the Cler? of Court is hereby ordered delivered to the plaintiffs, as purchase price of the one7third portion of the land in uestion. :laintiffs are ordered to pay the costs. S9 9!.-!-../0 (he !(C held that the right of petitioner to purchase from the respondents his share in the disputed property was recogni*ed by the provisions of the -'tra4udicial Settlement of -state, which the parties had e'ecuted before the respondents bought the sub4ect lot from the 3an?. "ggrieved by the .ecision of the !(C, herein respondents filed an appeal with the C". 9n May 3/, %001, the C" promulgated the presently assailed .ecision, reversing and setting aside the .ecision of the !(C and ordering petitioner to immediately surrender possession of the sub4ect property to the respondents. (he C" ruled that when petitioner and respondents did not redeem the sub4ect property within the redemption period and allowed the consolidation of ownership and the issuance of a new title in the name of the 3an?, their co7ownership was e'tinguished. >ence, the instant petition raising a sole issue, to wit8 D>-(>-! 9! #9( C979D#-!S>I: "M9#; (>- :-(I(I9#-! "#. (>- !-S:9#.-#(S 9E-! (>:!9:-!(J :-!SIS(-.LC9#(I#,-. (9 -QIS( @-E-# ")(-! (>- (!"#S)-! 9) (I(+- (9 (>- 3"#=A 3J EI!(,- 9) (>- :"!(I-S5 ";!--M-#( :!I9! (9 (>- !-:,!C>"S- (>-!-9) 3J (>- !-S:9#.-#(SB (>,S, D"!!"#(I#; (>- :-(I(I9#-!5S "C( 9) -#)9!CI#; (>- ";!--M-#( 3J !-IM3,!SI#; (>!-S:9#.-#(S 9) >IS @:-(I(I9#-!5SA <,S( S>"!- 9) (>- !-:,!C>"S- :!IC-. // (he main issue raised by petitioner is whether co7ownership by him and respondents over the sub4ect property persisted even after the lot was purchased by the 3an? and title thereto transferred to its name, and even after it was eventually bought bac? by the respondents from the 3an?. :etitioner insists that despite respondents5 full ?nowledge of the fact that the title over the disputed property was already in the name of the 3an?, they still proceeded to e'ecute the sub4ect -'tra4udicial Settlement, having in mind the intention of purchasing bac? the property together with petitioner and of continuing their co7ownership thereof. :etitioner posits that the sub4ect -'tra4udicial Settlement is, in and by itself, a contract between him and respondents, because it contains a provision whereby the parties agreed to continue their co7ownership of the sub4ect property by

"redeeming" or "repurchasing" the same from the 3an?. (his agreement, petitioner contends, is the law between the parties and, as such, binds the respondents. "s a result, petitioner asserts that respondents5 act of buying the disputed property from the 3an? without notifying him inures to his benefit as to give him the right to claim his rightful portion of the property, comprising /L3 thereof, by reimbursing respondents the e uivalent /L3 of the sum they paid to the 3an?. (he Court is not persuaded. :etitioner and respondents are arguing on the wrong premise that, at the time of the e'ecution of the -'tra4udicial Settlement, the sub4ect property formed part of the estate of their deceased father to which they may lay claim as his heirs. "t the outset, it bears to emphasi*e that there is no dispute with respect to the fact that the sub4ect property was e'clusively owned by petitioner and respondents5 father, !ufo, at the time that it was mortgaged in /&$&. (his was stipulated by the parties during the hearing conducted by the trial court on 9ctober %2, /&&6. /% -vidence shows that a .efinite .eed of Sale/3 was issued in favor of the 3an? on <anuary %1, /&26, after the period of redemption e'pired. (here is neither any dispute that a new title was issued in the 3an?5s name before !ufo died on <uly 6, /&26. >ence, there is no uestion that the 3an? ac uired e'clusive ownership of the contested lot during the lifetime of !ufo. (he rights to a person5s succession are transmitted from the moment of his death. /6 In addition, the inheritance of a person consists of the property and transmissible rights and obligations e'isting at the time of his death, as well as those which have accrued thereto since the opening of the succession. /1 In the present case, since !ufo lost ownership of the sub4ect property during his lifetime, it only follows that at the time of his death, the disputed parcel of land no longer formed part of his estate to which his heirs may lay claim. Stated differently, petitioner and respondents never inherited the sub4ect lot from their father. :etitioner and respondents, therefore, were wrong in assuming that they became co7owners of the sub4ect lot. (hus, any issue arising from the supposed right of petitioner as co7owner of the contested parcel of land is negated by the fact that, in the eyes of the law, the disputed lot did not pass into the hands of petitioner and respondents as compulsory heirs of !ufo at any given point in time. (he foregoing notwithstanding, the Court finds a necessity for a complete determination of the issues raised in the instant case to loo? into petitioner5s argument that the -'tra4udicial Settlement is an independent contract which gives him the right to enforce his right to claim a portion of the disputed lot bought by respondents. #avvphi# It is true that under "rticle /3/1 of the Civil Code of the :hilippines, contracts are perfected by mere consentB and from that moment, the parties are bound not only to the fulfillment of what has been e'pressly stipulated but also to all the conse uences which, according to their nature, may be in ?eeping with good faith, usage and law. "rticle /306 of the same Code also provides that the contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided these are not contrary to law, morals, good customs, public order or public policy. In the present case, however, there is nothing in the sub4ect -'tra4udicial Settlement to indicate any e'press stipulation for petitioner and respondents to continue with their supposed co7ownership of the contested lot. 9n the contrary, a plain reading of the provisions of the -'tra4udicial Settlement would not, in any way, support petitioner5s contention that it was his and his sibling5s intention to buy the sub4ect property from the 3an? and continue what they believed to be co7ownership thereof. It is a cardinal rule in the interpretation of contracts that the intention of the parties shall be accorded primordial consideration. /6 It is the duty of the courts to place a practical and realistic construction upon it, giving due consideration to the conte't in which it is negotiated and the purpose which it is intended to serve./$ Such intention is determined from the e'press terms of their agreement, as well as their contemporaneous and subse uent acts. /2 "bsurd and illogical interpretations should also be avoided. /&

)or petitioner to claim that the -'tra4udicial Settlement is an agreement between him and his siblings to continue what they thought was their ownership of the sub4ect property, even after the same had been bought by the 3an?, is stretching the interpretation of the said -'tra4udicial Settlement too far. In the first place, as earlier discussed, there is no co7ownership to tal? about and no property to partition, as the disputed lot never formed part of the estate of their deceased father. Moreover, petitioner5s asseveration of his and respondents5 intention of continuing with their supposed co7ownership is negated by no less than his assertions in the present petition that on several occasions he had the chance to purchase the sub4ect property bac?, but he refused to do so. In fact, he claims that after the 3an? ac uired the disputed lot, it offered to re7sell the same to him but he ignored such offer. >ow then can petitioner now claim that it was also his intention to purchase the sub4ect property from the 3an?, when he admitted that he refused the 3an?5s offer to re7sell the sub4ect property to himS In addition, it appears from the recitals in the -'tra4udicial Settlement that, at the time of the e'ecution thereof, the parties were not yet aware that the sub4ect property was already e'clusively owned by the 3an?. #onetheless, the lac? of ?nowledge on the part of petitioner and respondents that the mortgage was already foreclosed and title to the property was already transferred to the 3an? does not give them the right or the authority to unilaterally declare themselves as co7owners of the disputed propertyB otherwise, the disposition of the case would be made to depend on the belief and conviction of the party7litigants and not on the evidence adduced and the law and 4urisprudence applicable thereto. )urthermore, petitioner5s contention that he and his siblings intended to continue their supposed co7ownership of the sub4ect property contradicts the provisions of the sub4ect -'tra4udicial Settlement where they clearly manifested their intention of having the sub4ect property divided or partitioned by assigning to each of the petitioner and respondents a specific /L3 portion of the same. :artition calls for the segregation and conveyance of a determinate portion of the property owned in common. It see?s a severance of the individual interests of each co7owner, vesting in each of them a sole estate in a specific property and giving each one a right to en4oy his estate without supervision or interference from the other.%0 In other words, the purpose of partition is to put an end to co7ownership, %/ an ob4ective which negates petitioner5s claims in the present case. )2EREFORE, the instant petition is DENIED. (he assailed .ecision of the Court of "ppeals, dated May 3/, %001 in C"7;.!. CE #o. 1206/, is AFFIRMED

!egional (rial Court @!(CA of Malolos, 3ulacan, 3ranch //, in Civil Case #o. 2/&7M7&3 and dismissed petitionersT complaint on the ground of prescription. (he facts are as follows8 Dhen "ntonio )eliciano passed away on May %0, /&30, he left behind his only property, a parcel of land located at 3unga6 Mayor, 3ustos, 3ulacan. (he land had an area of /,/%1 s uare meters and was evidenced by (a' .eclaration #o. /60%1 in his name. 9n March %2, /&$%, +eona, Maria, :edro and Salina, all surnamed )eliciano, declared themselves to be the only surviving heirs of "ntonio )eliciano, with the e'ception of Salina. (hey e'ecuted an e'tra4udicial settlement of "ntonio )elicianoTs estate 6 and appropriated among themselves the said parcel of land, to the e'clusion of the heirs of -steban )eliciano and .oroteo )eliciano, deceased children of "ntonio )eliciano. 9n even date, +eona, Maria, :edro and Salina e'ecuted a deed of absolute sale or @asulatan sa +anap Aa /ilihan over the property in favor of the late <acinto )eliciano @:edroTs portionA, )elisa )eliciano @SalinaTs portionA and :edro Cano*a @+eona and MariaTs portionsA. $ .uring his lifetime, <acinto )eliciano applied for a free patent over the portion of land he bought, declaring that the same was a public land, first occupied and cultivated by :edro )eliciano. 2 <acinto was issued )ree :atent #o. @IE76A 0/%%&3 on #ovember %2, /&$$& and the same was forwarded to the !egister of .eeds of Malolos, 3ulacan, but unfortunately, it was burned on March $, /&2$. :edro Cano*a, for his part, also applied for a free patent over the portion of land which he bought, claiming that the same was public land, first occupied and cultivated by +eona and Maria )eliciano./0 >e was issued )ree :atent #o. @IE76A 0/%%&%, now covered by 9riginal Certificate of (itle @9C(A #o. :7366,// on )ebruary %3, /&$&. 9n 9ctober /2, /&&3, -ugenio )eliciano and "ngelina )eliciano7de +eon, surviving heirs of the late -steban )eliciano, and (rinidad )eliciano7Ealiente and 3asilia )eliciano7(rinidad, surviving children of the late .oroteo )eliciano, filed a complaint/% against Salina )eliciano, )elisa )eliciano, :edro Cano*a and the heirs of the late <acinto )eliciano, namely .elia, !osauro, -lsa, #ardo and :onciano, all surnamed )eliciano, for the .eclaration of #ullity of .ocuments and (itle, !ecovery of !eal :roperty and .amages. (hey alleged that the settlement of the estate and sale were done without their participation and consent as heirs of -steban and .oroteo. +i?ewise, they averred that the ancestral home of the )elicianos is erected on the sub4ect property and that they have occupied the same since birth. Cano*a and <acinto falsely declared that the property was not occupied, so their titles to the property should be declared null and void on the ground that they have made false statements in their respective applications for free patent. 9n #ovember 6, /&&3, before an "nswer could be filed, the petitioners amended their complaint to include the allegation that they sought to recover the shares of their fathers, -steban and .oroteo, which they could have ac uired as heirs of "ntonio )eliciano./3

G.R. No. 1$164$

Se1(e:7e0 1, 2010

E*GENIO FELICIANO, 'u7'(.(u(e 78 +.' <./e CEFERINA DE PALMA9 FELICIANO, ANGELINA DE LEON, 0e10e'en(.n& (+e +e.0' o/ ESTEBAN FELICIANO, TRINIDAD >ALIENTE, AND BASILIA TRINIDAD, 0e10e'en(e 78 +e0 'on DOMINADOR T. FELICIANO, :etitioners, vs. PEDRO CANO5A, DELIA FELICIANO, ROSA*RO FELICIANO, ELSA FELICIANO AND PONCIANO FELICIANO,!espondents. .-CISI9# >ILLARAMA, JR., J!< 3efore the Court is a petition for review on certiorari under !ule 61 of the /&&$ !ules of Civil :rocedure, as amended, see?ing to annul and set aside the .ecision / dated <une %6, %003 and !esolution% dated <anuary /1, %006 of the Court of "ppeals @C"A in C"7;.!. CE #o. 6/222. (he C" had reversed the .ecision 3 dated "ugust 3, /&&2 of the

In their "nswer,/6 respondent :edro Cano*a and his spouse, respondent .elia )eliciano, alleged that they were buyers in good faith and for value. (hey li?ewise contended that assuming that there was preterition of legal heirs, they never too? part in it. "s affirmative defenses, they alleged that the complaint failed to state a cause of actionB the lower court had no 4urisdiction as the sub4ect of the case were free patents and therefore prior e'haustion of administrative remedies was re uiredB the case was prematurely filedB no effort was e'erted towards a settlementB plaintiffsT right has prescribedB -ugenio )eliciano was a mere s uatter who should be ordered to vacateB the deed of sale was validly, genuinely and duly e'ecutedB -ugenio and "ngelina were guilty of misleading the court because there were other heirs who were indispensable parties but who were not includedB and :residential .ecree #o. /102 or the !evised =atarungang :ambarangay +aw was not resorted to by plaintiffs. !espondents !osauro )eliciano, -lsa )eliciano and :onciano )eliciano li?ewise filed an "nswer /1 containing the same allegations and defenses as respondents :edro Cano*a and .elia )eliciano. (he other defendants, Salina )eliciano, )elisa )eliciano and #ardo )eliciano were declared in default. 9n "ugust 3, /&&2, the trial court rendered a .ecision, the dispositive portion of which reads as follows8

D>-!-)9!-, 4udgment is hereby rendered in favor of the plaintiffs and against the defendants, as follows8 /. .eclaring the e'tra74udicial settlement of estate of "ntonio )eliciano null and voidB %. .eclaring the sale of the property in uestion to :edro Cano*a, )elisa )eliciano and <acinto )eliciano null and voidB 3. .eclaring the original certificate of (itle #o. 366 in the name of :edro Cano*a and the certificates of titles in the name of defendants over +ot /2$67Cad7366, 3ustos Cadastre @(a' .eclaration #o. /60%A as null and voidB 6. 9rdering defendants to reconvey ownership and possession of said property to plaintiffs sub4ect to a 4ust and e uitable partition thereof by and between all interested parties. #o pronouncement as to cost. S9 9!.-!-../6 (he trial court e'plained that by operation of law, the plaintiffs @herein petitionersA have as much right as +eona, Maria, :edro and Salina )eliciano to inherit the property in uestion, and they cannot be deprived of their right unless by disinheritance for causes set forth in the law. Dhen +eona )eliciano, :edro )eliciano, Maria )eliciano and Salina )eliciano appropriated the disputed lot solely to themselves through the e'tra4udicial settlement of estate, they committed a fraudulent act. (o the e'tent that .oroteo and -steban were deprived of their rightful share, the said out7 of7court settlement was annullable, said the trial court. (he trial court also declared that :edro Cano*a was not a buyer in good faith of +eona and MariaTs shares. !ecords show that :edro Cano*aTs live7in partner, .elia )eliciano, was a relative of the petitioners and the other defendantsB thus, he could be reasonably charged with the ?nowledge of petitionersT status vis7W7vis the sub4ect property. (he ac uisition by Cano*a and <acinto )eliciano of free patent titles over portions of the contested lot also did not legitimi*e their ownership thereof, as they ac uired no greater rights over the property than their predecessors7in7interest, having merely stepped into their shoes. /$ "ggrieved, respondents appealed to the C" with the following assignment of errors8 I. (>- +9D-! C9,!( C9MMI((-. " !-E-!SI3+- -!!9! I# ".MI((I#; I# -EI.-#C- (>- -Q(!"7 <,.ICI"+ S-((+-M-#( 9) -S("(- 9) "#(9#I9 )-+ICI"#9 @-Q>I3I( "3"AFBG II. (>- +9D-! C9,!( C9MMI((-. " !-E-!SI3+- -!!9! I# .-C+"!I#; "S #,++ "#. E9I. (>- -Q(!"7 <,.ICI"+ S-((+-M-#( 9) -S("(- 9) "#(9#I9 )-+ICI"#9 @-Q>I3I( "3"AFBG III. (>- +9D-! C9,!( C9MMI((-. " !-E-!SI3+- -!!9! I# .-C+"!I#; "S #,++ "#. E9I. (>- .--. 9) S"+- @-Q>I3I( "C"A I# )"E9! 9) <"CI#(9 )-+ICI"#9, )-+IS" )-+ICI"#9 "#. :-.!9 C"#9H"FBG IE. (>- +9D-! C9,!( C9MMI((-. " !-E-!SI3+- -!!9! I# .-C+"!I#; 9.C.(. #9. 366 I# (>- #"M- 9) :-.!9 C"#9H" "#. C-!(I)IC"(-S 9) (I(+- 9) .-)-#."#(S "S #,++ "#. E9I.FB "#.G E. (>- +9D-! C9,!( C9MMI((-. " !-E-!SI3+- -!!9! I# 9!.-!I#; .-)-#."#(S (9 !-C9#E-J 9D#-!S>I: "#. :9SS-SSI9# 9) (>- S,3<-C( :!9:-!(J (9 :+"I#(I))S S,3<-C( (9 " <,S( "#. -M,I("3+- :"!(I(I9# (>-!-9) 3J "#. 3-(D--# "++ I#(-!-S(-. :"!(I-S. /2 9n <une %6, %003, the appellate court rendered the assailed .ecision reversing the trial courtTs decision. (he C" held,

D>-!-)9!-, premises considered, the appeal is hereby ;!"#(-.. "ccordingly, the .ecision dated "ugust 3, /&&2 of the !egional (rial Court, 3ranch // @QIA, Malolos, 3ulacan in Civil Case #o. 2/&7M7&3 is hereby !-E-!S-. "#. S-( "SI.- and plaintiffs7appelleesT complaint is ordered .ISMISS-. for being time7barred. S9 9!.-!-../& (he C" ruled that prescription had set in, citing the case of Pedrosa v. Court of Appeals,%0 which held that the applicable prescriptive period to annul a deed of e'tra4udicial settlement is four @6A years from the discovery of the fraud. It reasoned that when petitioners filed the instant complaint for the annulment of the e'tra4udicial settlement of "ntonio )elicianoTs estate, more than four @6A years had elapsed from the issuance of the free patents. "s regards the portion claimed by the late <acinto )eliciano, si'teen @/6A years had elapsed from the time the free patent was issued to him before petitioners filed the complaint, while in the case of Cano*a, fourteen @/6A years had elapsed from the issuance of the free patent in Cano*aTs favor. >ence, according to the C", the action for the annulment of the documents had prescribed. :etitioners filed a motion for reconsideration of the aforesaid .ecision but it was denied by the C" in the !esolution dated <anuary /1, %006 for lac? of merit. >ence, this petition. (he grounds relied upon by the petitioners are the following8 ". (>- C9,!( 9) "::-"+S C9MMI((-. !-E-!SI3+- -!!9! I# ;!"#(I#; (>- "::-"+ 3J 9!.-!I#; (>- .ISMISS"+ 9) (>- C9M:+"I#( 9# ;!9,#. 9) :!-SC!I:(I9# 9) "C(I9#, .-S:I(- (>- )"C( (>"( (>- ISS,- 9) :!-SC!I:(I9# 9) "C(I9# >"S #9( 3--# !"IS-. 9# "::-"+ "S "# ISS,-, #9! "SSI;#-. "S "# -!!9!, #9! .-)I#-. I# (>- :!-7(!I"+ 9!.-! "S "M9#; (>- ISS,-S (9 3- !-S9+E-.B 3. "SS,MI#; (>"( :!-SC!I:(I9# 9) "C(I9# M"J 3- ("=-# "S " ;!9,#. )9! .ISMISSI#; (>- C9M:+"I#( -E-# I) #9( !"IS-. 9# "::-"+, #9! "SSI;#-. "S "M9#; (>- -!!9!S C9MMI((-., (>- C9,!( 9) "::-"+S C9MMI((-. !-E-!SI3+- -!!9! I# >9+.I#; (>"( (>"C(I9# :!-SC!I3-S I# )9,! J-"!S, 9! I# #9( >9+.I#; (>"( (>- "C(I9# IS IM:!-SC!I:(I3+-B C. (>- C9,!( 9) "::-"+S C9MMI((-. !-E-!SI3+- -!!9! I# #9( "))I!MI#; (>- .-CISI9# 9) (>- (!I"+ C9,!(.%/ -ssentially, the issue for our resolution is whether the C" erred in reversing the trial courtTs decision. :etitioners allege that the C" gravely erred in granting the appeal and in dismissing the complaint on the ground of prescription of action because that issue was never raised on appeal, nor defined as one @/A of the issues outlined and limited in the pre7trial order. De do not agree. Dhile respondents have not assigned the defense of prescription in their appeal before the C", they raised such defense in their .ecember /, /&&3 "nswer as one @/A of their affirmative defenses. %% In their brief before the C", respondents specifically prayed for the reliefs mentioned in their respective answers before the trial court. (hus, by reference, they are deemed to have adopted the defense of prescription, and could not properly be said to have waived the defense of prescription.

Moreover, !ule &, Section / of the /&&$ !ules of Civil :rocedure, as amended, provides that when it appears from the pleadings or the evidence on record that the action is already barred by the statute of limitations, the court shall dismiss the claim. (hus, in +icano v. +e(ato,%3 we held8 De have ruled that trial courts have authority and discretion to dismiss an action on the ground of prescription when the partiesT pleadings or other facts on record show it to be indeed time7barred ' ' 'B and it may do so on the basis of a motion to dismiss, or an answer which sets up such ground as an affirmative defenseB or even if the ground is alleged after 4udgment on the merits, as in a motion for reconsiderationB or even if the defense has not been asserted at all, as where no statement thereof is found in the pleadings, or where a defendant has been declared in default. Dhat is essential only, to repeat, is that the facts demonstrating the lapse of the prescriptive period, be otherwise sufficiently and satisfactorily apparent on the record8 either in the averments of the plaintiffs complaint, or otherwise established by the evidence. @,nderscoring supplied.A 3ut did the C" nonetheless commit error when it held that the applicable prescriptive period is four @6A yearsS :etitioners argue that the C" erroneously treated the action they filed at the trial court as one @/A for annulment of the e'tra4udicial settlement and applied the four @6A7year prescriptive period in dismissing the same. (hey contend that the action they filed was one @/A for .eclaration of #ullity of .ocuments and (itles, !ecovery of !eal :roperty and .amages, and as such, their action was imprescriptible pursuant to "rticle /6/0 %6 of the Civil Code. !espondents, for their part, maintain that the C" did not err in holding that the deed of e'tra4udicial partition e'ecuted without including some of the heirs, who had no ?nowledge of the partition and did not consent thereto, is merely fraudulent and not void. (hey stress that the action to rescind the partition based on fraud prescribes in four @6A years counted from the date of registration, which is constructive notice to the whole world. De affirm the ruling of the C". "s the records show, the heirs of .oroteo and -steban did not participate in the e'tra4udicial partition e'ecuted by Salina with the other compulsory heirs, +eona, Maria and :edro. ,ndeniably, the said deed was fraudulently obtained as it deprived the ?nown heirs of .oroteo and -steban of their shares in the estate. " deed of e'tra4udicial partition e'ecuted without including some of the heirs, who had no ?nowledge of and consent to the same, is fraudulent and vicious. %1 >ence, an action to set it aside on the ground of fraud could be instituted. Such action for the annulment of the said partition, however, must be brought within four @6A years from the discovery of the fraud.#avvphi# In +erona v. &e +u0man,%6 respondents therein e'ecuted a deed of e'tra4udicial settlement declaring themselves to be the sole heirs of the late Marcelo de ;u*man. (hey secured new transfer certificates of title in their own names, thereby e'cluding the petitioners therein from the estate of the deceased. (he petitioners brought an action for the annulment of the said deed upon the ground that the same is tainted with fraud. (he Court held, In"':u,+ "' 1e(.(.one0' 'eeD (o "nnu- (+e "/o0e:en(.one ee o/ @eI(0"9;u .,."- 'e((-e:en(@ u1on (+e &0oun o/ /0"u .n (+e eIe,u(.on (+e0eo/, (+e ",(.on (+e0e/o0 :"8 7e /.-e <.(+.n /ou0 B4C 8e"0' /0o: (+e .',oAe08 o/ (+e /0"u @Mauricio v. Eillanueva, +7//0$%, September %6, /&1&A. Such discovery is deemed to have ta?en place, in the case at bar, on <une %1, /&62, when said instrument was filed with the !egister of .eeds and new certificates of title were issued in the name of respondents e'clusively, for the registration of the deed of e'tra74udicial settlement constitute constructive notice to the whole world. %$ @-mphasis and underscoring supplied.A -vidently, the applicable prescriptive period to institute the action to annul the deed of e'tra4udicial settlement was four @6A years counted from the discovery of fraud as held in the case of +erona v. &e +u0man. %2 >owever, the records show that petitionersT complaint was filed only on 9ctober /2, /&&3, or almost si'teen @/6A years after <acinto )eliciano was issued )ree :atent #o. @IE76A 0/%%&3 on #ovember %2, /&$$, and almost fourteen @/6A years from the time :edro Cano*a was issued 9C( #o. :7366 on #ovember %2, /&$&. "s petitioners are deemed to have obtained constructive notice of the fraud upon the registration of the )ree :atent, they clearly failed to institute the present civil action within the allowable period. (he same result obtains even if their complaint is treated as one @/A essentially for reconveyance as more than ten @/0A years have passed since petitionersT cause of action accrued. (he C" committed no error in dismissing their complaint.

)2EREFORE, the petition for review on certiorari is DENIED. (he .ecision dated <une %6, %003 and !esolution dated <anuary /1, %006, of the Court of "ppeals in C"7;.!. CE #o. 6/222 are AFFIRMED. Dith costs against petitioners.

G.R. No. 1%3%H2

O,(o7e0 20, 2010

CARMELA BROBIO MANGA2AS, :etitioner, vs. E*FROCINA A. BROBIO, !espondent. !-S9+,(I9# NAC2*RA, J!< (his petition for review on certiorari see?s to set aside the Court of "ppeals @C"A .ecision / dated )ebruary %/, %002, which dismissed petitionerTs action to enforce payment of a promissory note issued by respondent, and !esolution% dated <uly &, %002, which denied petitionerTs motion for reconsideration. (he case arose from the following facts8 9n <anuary /0, %00%, :acifico S. 3robio @:acificoA died intestate, leaving three parcels of land. >e was survived by his wife, respondent -ufrocina ". 3robio, and four legitimate and three illegitimate childrenB petitioner Carmela 3robio Mangahas is one of the illegitimate children. 9n May /%, %00%, the heirs of the deceased e'ecuted a .eed of -'tra4udicial Settlement of -state of the +ate :acifico 3robio with Daiver. In the .eed, petitioner and :acificoTs other children, in consideration of their love and affection for respondent and the sum of :/10,000.00, waived and ceded their respective shares over the three parcels of land in favor of respondent. "ccording to petitioner, respondent promised to give her an additional amount for her share in her fatherTs estate. (hus, after the signing of the .eed, petitioner demanded from respondent the promised additional amount, but respondent refused to pay, claiming that she had no more money. 3 " year later, while processing her ta' obligations with the 3ureau of Internal !evenue @3I!A, respondent was re uired to submit an original copy of the .eed. +eft with no more original copy of the .eed, respondent summoned petitioner to her office on May 3/, %003 and as?ed her to countersign a copy of the .eed. :etitioner refused to countersign the document, demanding that respondent first give her the additional amount that she promised. Considering the value of the three parcels of land @which she claimed to be worth :%0MA, petitioner as?ed for :/M, but respondent begged her to lower the amount. :etitioner agreed to lower it to :600,000.00. 3ecause respondent did not have the money at that time and petitioner refused to countersign the .eed without any assurance that the amount would be paid, respondent e'ecuted a promissory note. :etitioner agreed to sign the .eed when respondent signed the promissory note which read K 3/ May %003 (his is to promise that I will give a )inancial "ssistance to C"!M-+" 3. M"#;">"S the amount of :600,000.00 Si' >undred (housand only on <une /1, %003.

@S;.A -,)!9CI#" ". 3!93I96 Dhen the promissory note fell due, respondent failed and refused to pay despite demand. :etitioner made several more demands upon respondent but the latter ?ept on insisting that she had no money. 9n <anuary %2, %006, petitioner filed a Complaint for Specific :erformance with .amages 1 against respondent, alleging in partK %. (hat plaintiff and defendant are legal heirs of the deceased, :acifico S. 3robioF,G who died intestate and leaving without a will, on <anuary /0, %00%, but leaving several real and personal properties @ban? depositsA, and some of which were the sub4ect of the e'tra74udicial settlement among them, compulsory heirs of the deceased, :acifico 3robio. ' ' '. 3. (hat in consideration of the said waiver of the plaintiff over the listed properties in the e'tra74udicial settlement, plaintiff received the sum of :/10,000.00, and the defendant e'ecuted a ":romissory #ote" on <une /1, %003, further committing herself to give plaintiff a financial assistance in the amount of:600,000.00. ' ' '. 6. (hat on its due date, <une /1, %003, defendant failed to ma?e good of her promise of delivering to the plaintiff the sum of :600,000.00 pursuant to her ":romissory #ote" dated May 3/, %003, and despite repeated demands, defendant had maliciously and capriciously refused to deliver to the plaintiff the amount FofG :600,000.00, and the last of which demands was on 9ctober %&, %003. ' ' '. 6 In her "nswer with Compulsory Counterclaim,$ respondent admitted that she signed the promissory note but claimed that she was forced to do so. She also claimed that the underta?ing was not supported by any consideration. More specifically, she contended that K /0. .efendant was practically held "hostage" by the demand of the plaintiff. "t that time, defendant was so much pressured and was in FaG hurry to submit the documents to the 3ureau of Internal !evenue because of the deadline set and for fear of possible penalty if not complied with. .efendant pleaded understanding but plaintiff was adamant. >er hand could only move in e'change for / million pesos. //. .efendant, out of pressure and confused disposition, was constrained to ma?e a promissory note in a reduced amount in favor of the plaintiff. (he circumstances in the e'ecution of the promissory note were obviously attended by involuntariness and the same was issued without consideration at all or for illegal consideration.2 9n May /1, %006, the !egional (rial Court @!(CA rendered a decision in favor of petitioner. (he !(C found that the alleged "pressure and confused disposition" e'perienced by respondent and the circumstances that led to the e'ecution of the promissory note do not constitute undue influence as would vitiate respondentTs consent thereto. 9n the contrary, the !(C observed that K It is clear from all the foregoing that it is the defendant who too? improper advantage of the plaintiffTs trust and confidence in her by resorting to a worthless written promise, which she was intent on reneging. 9n the other hand, plaintiff did not perform an unlawful conduct when she insisted on a written commitment from the defendant, as embodied in the promissory note in uestion, before affi'ing her signature that was as?ed of her by the defendant because, as already mentioned, that was the only opportunity available to her or which suddenly and une'pectedly presented itself to her in order to press her demand upon the defendant to satisfy the correct amount of consideration due to her. In other words, as the defendant had repeatedly rebuffed her plea for additional consideration by claiming lac? of money, it is only natural for the plaintiff to sei*e the une'pected opportunity that suddenly presented itself in

order to compel the defendant to give to her Fwhat isG due FherG. "nd by e'ecuting the promissory note which the defendant had no intention of honoring, as testified to by her, the defendant clearly acted in bad faith and too? advantage of the trust and confidence that plaintiff had reposed in her. & (he !(C also brushed aside respondentTs claim that the promissory note was not supported by valuable consideration. (he court maintained that the promissory note was an additional consideration for the waiver of petitionerTs share in the three properties in favor of respondent. Its conclusion was bolstered by the fact that the promissory note was e'ecuted after negotiation and haggling between the parties. (he dispositive portion of the !(C decision reads8 D>-!-)9!-, 4udgment is hereby rendered as follows8 /. 9rdering the defendant to pay to plaintiff the sum of Si' >undred (housand :esos @:600,000.00A which she committed to pay to plaintiff under the promissory note in uestion, plus interest thereon at the rate of /%I per annum computed from the date of the filing of the complaintB %. 9rdering the defendant to pay to plaintiff the sum of :10,000.00 as attorneyTs feesB and 3. 9rdering the defendant to pay to plaintiff the costs of this suit. S9 9!.-!-../0 9n )ebruary %/, %002, the C" reversed the !(C decision and dismissed the complaint. // (he C" found that there was a complete absence of consideration in the e'ecution of the promissory note, which made it ine'istent and without any legal force and effect. (he court noted that "financial assistance" was not the real reason why respondent e'ecuted the promissory note, but only to secure petitionerTs signature. (he C" held that the waiver of petitionerTs share in the three properties, as e'pressed in the deed of e'tra4udicial settlement, may not be considered as the consideration of the promissory note, considering that petitioner signed the .eed way bac? in %00% and she had already received the consideration of :/10,000.00 for signing the same. (he C" went on to hold that if petitioner disagreed with the amount she received, then she should have filed an action for partition. )urther, the C" found that intimidation attended the signing of the promissory note. !espondent needed the .eed countersigned by petitioner in order to comply with a 3I! re uirementB and, with petitionerTs refusal to sign the said document, respondent was forced to sign the promissory note to assure petitioner that the money promised to her would be paid. :etitioner moved for the reconsideration of the C" .ecision. In a !esolution dated <uly &, %002, the C" denied petitionerTs motion./% In this petition for review, petitioner raises the following issues8 /. (he >onorable Court of "ppeals erred in the appreciation of the facts of this case when it found that intimidation attended the e'ecution of the promissory note sub4ect of this case. %. (he >onorable Court of "ppeals erred when it found that the promissory note was without consideration. 3. (he >onorable Court of "ppeals erred when it stated that petitioner should have filed Fan actionG for partition instead of a case for specific performance./3

(he petition is meritorious. Contracts are voidable where consent thereto is given through mista?e, violence, intimidation, undue influence, or fraud. In determining whether consent is vitiated by any of these circumstances, courts are given a wide latitude in weighing the facts or circumstances in a given case and in deciding in favor of what they believe actually occurred, considering the age, physical infirmity, intelligence, relationship, and conduct of the parties at the time of the e'ecution of the contract and subse uent thereto, irrespective of whether the contract is in a public or private writing. /6 #owhere is it alleged that mista?e, violence, fraud, or intimidation attended the e'ecution of the promissory note. Still, respondent insists that she was "forced" into signing the promissory note because petitioner would not sign the document re uired by the 3I!. In one case, the Court R in characteri*ing a similar argument by respondents therein R held that such allegation is tantamount to saying that the other party e'erted undue influence upon them. >owever, the Court said that the fact that respondents were "forced" to sign the documents does not amount to vitiated consent. /1 (here is undue influence when a person ta?es improper advantage of his power over the will of another, depriving the latter of a reasonable freedom of choice. /6 )or undue influence to be present, the influence e'erted must have so overpowered or sub4ugated the mind of a contracting party as to destroy his free agency, ma?ing him e'press the will of another rather than his own. /$ !espondent may have desperately needed petitionerTs signature on the .eed, but there is no showing that she was deprived of free agency when she signed the promissory note. 3eing forced into a situation does not amount to vitiated consent where it is not shown that the party is deprived of free will and choice. !espondent still had a choice8 she could have refused to e'ecute the promissory note and resorted to 4udicial means to obtain petitionerTs signature. Instead, respondent chose to e'ecute the promissory note to obtain petitionerTs signature, thereby agreeing to pay the amount demanded by petitioner. (he fact that respondent may have felt compelled, under the circumstances, to e'ecute the promissory note will not negate the voluntariness of the act. "s rightly observed by the trial court, the e'ecution of the promissory note in the amount of :600,000.00 was, in fact, the product of a negotiation between the parties. !espondent herself testified that she bargained with petitioner to lower the amount8 "((J. EI++-;"S8 M "nd is it not that there was even a bargaining from :/7M to :600,000.00 before you prepareFdG and FsignFedG that promissory note mar?ed as -'hibit "C"S " Jes, sir. M "nd in fact, you were the one FwhoG personally wrote the amount of :600,000.00 only as indicated in the said promissory noteS " Jes, sir. C9,!(8 M So, 4ust to clarify. Carmela was as?ing an additional amount of :/7M for her to sign this document but you negotiated with her and as?ed that it be lowered to :600,000.00 to which she agreed, is that correctS " Jes, Jour >onor. #apilitan na po a?o.

M 3ut you negotiated and as?ed for its reduction from :/7M to :600,000.00S " Jes, Jour >onor./2 Contrary to the C"Ts findings, the situation did not amount to intimidation that vitiated consent. #a phil (here is intimidation when one of the contracting parties is compelled to give his consent by a reasonable and well7grounded fear of an imminent and grave evil upon his person or property, or upon the person or property of his spouse, descendants, or ascendants./& Certainly, the payment of penalties for delayed payment of ta'es would not ualify as a "reasonable and well7grounded fear of an imminent and grave evil." De 4oin the !(C in holding that courts will not set aside contracts merely because solicitation, importunity, argument, persuasion, or appeal to affection was used to obtain the consent of the other party. Influence obtained by persuasion or argument or by appeal to affection is not prohibited either in law or morals and is not obno'ious even in courts of e uity.%0 9n the issue that the promissory note is void for not being supported by a consideration, we li?ewise disagree with the C". " contract is presumed to be supported by cause or consideration. %/ (he presumption that a contract has sufficient consideration cannot be overthrown by a mere assertion that it has no consideration. (o overcome the presumption, the alleged lac? of consideration must be shown by preponderance of evidence. %% (he burden to prove lac? of consideration rests upon whoever alleges it, which, in the present case, is respondent. !espondent failed to prove that the promissory note was not supported by any consideration. )rom her testimony and her assertions in the pleadings, it is clear that the promissory note was issued for a cause or consideration, which, at the very least, was petitionerTs signature on the document. #avvphi# It may very well be argued that if such was the consideration, it was inade uate. #onetheless, even if the consideration is inade uate, the contract would not be invalidated, unless there has been fraud, mista?e, or undue influence.%3 "s previously stated, none of these grounds had been proven present in this case. (he foregoing discussion renders the final issue insignificant. 3e that as it may, we would li?e to state that the remedy suggested by the C" is not the proper one under the circumstances. "n action for partition implies that the property is still owned in common.%6 Considering that the heirs had already e'ecuted a deed of e'tra4udicial settlement and waived their shares in favor of respondent, the properties are no longer under a state of co7ownershipB there is nothing more to be partitioned, as ownership had already been merged in one person. D>-!-)9!-, premises considered, the C" .ecision dated )ebruary %/, %002 and its !esolution dated <uly &, %002 are !-E-!S-. and S-( "SI.-. (he !(C decision dated May /1, %006 is !-I#S("(-.

*NLA)F*L DETAINER AND FORCIBLE ENTRY G.R. No. 182953 : October 11, 2010 CORAZON D. SARMIENTA, JOSE DERAMA, CATES RAMA, JOSIE MI A, TOTO NO!ASCO, JES"S O!I#"INO, NOR$ERTO !O%EZ, R"$EN ES%OSO, $ERNARDO &!ORESCA, MARINA DIMATA!O, RO$!E DIMANDA'O, RICARDO %E(A, ED"ARDO ES%INO, ANTONIO GA!!EGOS, )ICTOR SANDO)A!, &E!ICITAS A$RANTES, MERC* CR"Z, ROSENDO ORGANO, RIC'* $ARENO, ANITA TA'SAGON, JOSIE RAMA +,- %A$!O DIMANDA'O, Petitioners, v. MANA!ITE .OMEO NERS ASSOCIATION, INC. /MA.A0, Respondent.cralaw DECISION )I!!ARAMA, JR., J.: This petition for review on certiorari seeks to nullify the Decision 1cra1aw dated October 19, 2007 and Resolution2cra1aw dated ay 21, 200! of the "ourt of #ppeals $"#% in "#&'(R( )* +o( 9,0-0( The "# had affir.ed the Decision ,cra1aw dated /anuary 10, 20001cra1aw of the Re2ional Trial "ourt $RT"% of #ntipolo "ity, 3ranch 71, in "ivil "ase +o( 0-&1!- which reversed the Decision -cra1aw of the unicipal Trial "ourt in "ities $ T""% of #ntipolo "ity, 3ranch 1, in "ivil "ase +o( 101&00( The case ste..ed fro. a co.plaint 0cra1aw for 4Forcible Entry/Unlawful Detainer4 filed by respondent analite 5o.eowners #ssociation, 6nc( $ #5#% a2ainst # #R# 7 "6'89)#9O #ssociation $# #R#% and its .e.bers( The co.plaint was raffled to the T"" of #ntipolo "ity, 3ranch 1 and docketed as "ivil "ase +o( 101&00( #5# alle2ed that it is the re2istered owner of a certain parcel of land covered by Transfer "ertificate of Title $T"T% +o( 22200,7cra1aw with an area of 9,9,0 s:uare .eters situated in )itio analite, *hase 6, 3aran2ay )ta( "ru;, #ntipolo "ity(!cra1aw Throu2h force, inti.idation, threat, strate2y and stealth, petitioners entered the pre.ises and constructed their te.porary houses and an office buildin2(9cra1aw*etitioners likewise even filed a civil case to annul #5#s title on )epte.ber 2, 1992, but said case was dis.issed by the trial court( #fter said dis.issal, #5# de.anded that petitioners vacate the land( *etitioners pleaded that they be 2iven one year within which to look for a place to transfer, to which re:uest #5# acceded( The said one&year period, however, was repeatedly e<tended due to the benevolence of #5#s .e.bers( 9ater on, petitioners ca.e up with a proposal that they beco.e .e.bers of #5# so they can be :ualified to ac:uire portions of the property by sale pursuant to the "o..unity ort2a2e *ro2ra. $" *%(10cra1aw #5# a2ain a2reed and tolerated petitioners possession, 2ivin2 the. until Dece.ber 1999 to co.ply with the re:uire.ents to avail of the " * benefits( *etitioners nonetheless failed to co.ply with said re:uire.ents( Thus, on #u2ust 9, 2000, #5# sent for.al de.and letters to petitioners to vacate the property( =pon the latters refusal to heed the de.and, #5# filed the co.plaint for 4 Forcible Entry/Unlawful Detainer(4 6n their #nswer with "ounterclai.s, 11cra1aw petitioners denied the said alle2ations and averred that they are the owners of the sub>ect lot, havin2 been in actual physical possession thereof for .ore than thirty $,0% years before #5# intruded into the land( They clai.ed that as the years went by, they established the # #R# and bou2ht the sub>ect property fro. /ulian Tallano( The property later beca.e known as the Tallano 8state and re2istered under T"T +o( 19!( They likewise ar2ued that the alle2ations in the co.plaint do not confer >urisdiction upon the court actin2 as an e>ect.ent court, and that the co.plaint was irre2ular and defective because its caption states that it was for 4?orcible 8ntry@=nlawful Detainer(4 #5#, additionally, had no le2al capacity to sue and was 2uilty of foru. shoppin2( 6ts officers were likewise fictitious(

On ay 19, 200-, the T"" of #ntipolo "ity rendered a decision dis.issin2 the case for lack of cause of action( The T"" held that the co.plaint filed was one of forcible entry, but #5# failed to establish the >urisdictional re:uire.ent of prior physical possession in its co.plaint( 12cra1aw #lso, the trial court held that #5#s failure to initiate i..ediate le2al action after petitioners unlawfully entered its property and its subse:uent declaration of benevolence upon the petitioners cannot be construed as tolerance in accordance with law as to >ustify the treat.ent of the case as one for unlawful detainer(1,chanroblesvirtuallawlibrary #5# appealed the decision to the RT"( The RT" rendered a Decision dated /anuary 10, 2000, reversin2 the decision of the T""( The RT" held that the lower court erred in dis.issin2 the case by considerin2 the co.plaint as one of forcible entry which re:uired prior physical possession( The RT" found that #5# was able to alle2e and prove by preponderance of evidence that petitioners occupation of the property was by .ere 4tolerance(4 #5# tolerated the occupation until all those who wanted to ac:uire #5#s ri2hts of ownership could co.ply with .e.bership obli2ations and dues(11cra1aw*etitioners, however, failed to co.ply with said obli2ations within the 2iven periodA thus, their occupation beca.e ille2al after #5# de.anded that they vacate the property( 1-cra1aw The dispositive portion of the RT" decision readsBchanroblesvirtualawlibrary 758R8?OR8, pre.ises considered, the >ud2.ent appealed fro. is hereby R8C8R)8D and )8T #)6D8( # new >ud2.ent is rendered orderin2 the defendantsA their representatives and all persons actin2 for and in their behalfA .e.bers of their fa.iliesA their lessees and sub&lesseesA or other people whose occupation of the pre.ises are fro. the authority of defendants, their representatives or .e.bers of the defendants fa.iliesA and other transferees pendente liteBchanroblesvirtualawlibrary 1% to vacate the sub>ect pre.isesA 2% to pay >ointly and severally the plaintiff the su. of T56RTD ?6C8 T5O=)#+D *8)O) $*,-,000(00% as for attorneys feeEsF and the cost of suitA and, ,% to pay the plaintiff severally the su. of O+8 5=+DR8D *8)O) $*100(00% per .onth fro. /une 1992 until the pre.ises are actually vacated( )O ORD8R8D(10chanroblesvirtuallawlibrary #22rieved, petitioners filed a petition for review with the "# assailin2 the decision of the RT"( 6n a Decision dated October 19, 2007, the "# affir.ed the decision of the RT"( The "# held that while the co.plaint in the be2innin2 alle2ed facts which .ake out a case for forcible entry, the rest of the aver.ents therein show that the cause of action was actually for unlawful detainer( The "# noted that the co.plaint alle2ed supervenin2 events that would show that what was initially forcible entry was later tolerated by #5# thereby convertin2 its cause of action into one for unlawful detainer( #ccordin2ly, the co.plaint was filed within the re:uired one&year period counted fro. the date of last de.and( The "# further held that the fact that the co.plaint was captioned as both for forcible entry and unlawful detainer does not render it defective as the nature of the co.plaint is deter.ined by the alle2ations of the co.plaint( The dispositive portion of the "# decision reads, 758R8?OR8, pre.ises considered, the petition is D6) 6))8D for lack of .erit( The decision of the Re2ional Trial "ourt of #ntipolo "ity, 3ranch 71 dated /anuary 10, E2000F is hereby #??6R 8D( SO ORDERED.17chanroblesvirtuallawlibrary

*etitioners .otion for reconsideration fro. the said decision was denied in a Resolution dated 200!( 5ence, petitioners are now before this "ourt raisin2 the followin2 issuesBchanroblesvirtualawlibrary

ay 21,

6( 758T58R OR +OT T58 5O+OR#398 "O=RT O? #**8#9) 'R#C89D 8RR8D 758+ 6T #??6R 8D T58 D8"6)6O+ O? T58 R8'6O+#9 TR6#9 "O=RT O? #+T6*O9O "6TD, 3R#+"5 71 6+ "6C69 "#)8 +O( 0-& 1!- R8C8R)6+' T58 D8"6)6O+ O? T58 =+6"6*#9 TR6#9 "O=RT E6+ "6T68)F, 3R#+"5 1, #+T6*O9O "6TD T5#T D6) 6))E8DF T58 ?OR"6398 8+TRD@=+9#7?=9 D8T#6+8R "#)8 ?OR 9#"G O? "#=)8 O? #"T6O+( 66( 758T58R OR +OT T58 5O+OR#398 "O=RT O? #**8#9) 'R#C89D 8RR8D 758+ 6T R=98D T5#T T58 "O=RT E# H=OF #"H=6R8D /=R6)D6"T6O+ OC8R T58 )=3/8"T #TT8R O? T58 "#)8( 666( 758T58R OR +OT T58 5O+OR#398 "O=RT O? #**8#9) 'R#C89D 8RR8D 758+ 6T R=98D T5#T T58 "O *9#6+T 3OT5 "#*T6O+8D #) ?OR"6398 8+TRD #+D =+9#7?=9 D8T#6+8R 6) +OT D8?8"T6C8( 6C( 758T58R OR +OT T58 *8T6T6O+8R) E5#C8F # )=*8R6OR R6'5T O? *O))8))6O+ OC8R T58 *RO*8RTD 6+ H=8)T6O+( C( 758T58R OR +OT T58 /=R6)D6"T6O+( 8TRO*O96T#+ TR6#9 "O=RT 6+ "6T68), 3R#+"5 1, #+T6*O9O "6TD 5#)

possession, by virtue of any contract, e<press or i.plied, or the le2al representatives or assi2ns of any such lessor, vendor, vendee, or other person, .ay, at any ti.e within one $1% year after such unlawful deprivation or withholdin2 of possession, brin2 an action in the proper unicipal Trial "ourt a2ainst the person or persons unlawfully withholdin2 or deprivin2 of possession, or any person or persons clai.in2 under the., for the restitution of such possession, to2ether with da.a2es and costs( There are two entirely distinct and different causes of action under the afore:uoted rule, to witB $1% a case for forcible entry, which is an action to recover possession of a property fro. the defendant whose occupation thereof is ille2al fro. the be2innin2 as he ac:uired possession by force, inti.idation, threat, strate2y or stealthA and $2% a case for unlawful detainer, which is an action for recovery of possession fro. the defendant whose possession of the property was inceptively lawful by virtue of a contract $e<press or i.plied% with the plaintiff, but beca.e ille2al when he continued his possession despite the ter.ination of his ri2ht thereunder( 6n forcible entry, the plaintiff .ust alle2e in the co.plaint, and prove, that he was in prior physical possession of the property in dispute until he was deprived thereof by the defendant by any of the .eans provided in )ection 1, Rule 70 of the Rules either by force, inti.idation, threat, strate2y or stealth(20cra1aw 6n unlawful detainer, there .ust be an alle2ation in the co.plaint of how the possession of defendant started or continued, that is, by virtue of lease or any contract, and that defendant holds possession of the land or buildin2 4after the e<piration or ter.ination of the ri2ht to hold possession by virtue of any contract, e<press or i.plied(4 6n the present case, a thorou2h perusal of the co.plaint would reveal that the alle2ations clearly constitute a case of unlawful detainerBchanroblesvirtualawlibrary <<<< ,( *laintiff is the re2istered owner of that certain parcel of land involved in the instant case covered by T"T +o( 22200, containin2 an area of 9,9,0 s:(.( situated in )itio analite, *hase 6, 3aran22ay )ta( "ru;, #ntipolo "ity, which property was place under co..unity .ort2a2e pro2ra. $" *%A 1( Other defendants in the instant case are all .e.ber and officers of defendant # #R# who, throu2h force, inti.idation, threat, strate2y and stealth entered into the pre.ises herein and constructed their te.porary houses and office buildin2 respectively, pre&e.ptin2 plaintiff fro. usin2 the pre.ises thus, deprivin2 the sa.e of its prior possession thereofA -( On )epte.ber 2, 1992 as an strate2y of the cheapest sort defendants, in conspiracy and collusion with each other, defendants as representative of 5eirs of #ntonio and 5er.o2enes Rodri:ue;, the alle2ed owner of the property at bar, filed civil case no( 92&21-1 a2ainst plaintiff, lod2e before 3ranch 7, of the Re2ional Trial "ourt of #ntipolo "ity, seekin2 to annul plaintiff titleA 0( 6..ediately upon final dis.issal of such 2roundless, baseless and .alicious suit, plaintiff de.anded defendants to vacate the pre.ises, but the latter pleaded with the for.er to be 2iven a one $1% year period within which to look for a place to transfer, which period, upon pleas of defendants, coupled with plaintiffs benevolence was repeatedly e<tended by said plaintiffs tolerance of occupancy thereof, but under such ter.s and conditions( Due to failure to co.ply with their undertakin2 despite repeated de.ands therefor plaintiffs sent a for.al de.and letter upon defendantsA 7( =pon receipt of the above&stated de.and, defendants propose to beco.e .e.bers of plaintiff, as :ualification to ac:uire portions of the property by sale pursuant to the " *, to which plaintiff a2reed and tolerated defendants possession by 2ivin2 the sa.e a period until the .onth of Dece.ber 1999, to

C6( 758T58R OR +OT T58 8TRO*O96T#+ TR6#9 "O=RT 6+ "6T68), 3R#+"5 1, #+T6*O9O "6TD 5#) /=R6)D6"T6O+ OC8R #+ 8/8"T 8+T "#)8 3#)8D O+ ?OR"6398 8+TRD #+D =+9#7?=9 D8T#6+8R(1!chanroblesvirtuallawlibrary 8ssentially, there are two principal issues for our resolutionB $1% whether or not the alle2ations in the co.plaint are sufficient to .ake up a case of forcible entry or unlawful detainerA and $2% whether or not the "# was correct in affir.in2 the RT"s decision findin2 a case of unlawful detainer( *etitioners assert that the >urisdictional re:uire.ent of prior physical possession in actions for forcible entry was not alle2ed with particularity in the co.plaint, as it .erely alle2ed that respondent had been deprived of its possession over the property( They also .aintained that they were not withholdin2 possession of the property upon the e<piration or ter.ination of their ri2ht to possess because they never e<ecuted any contract, e<press or i.plied, in favor of the respondent( 5ence, there was also no unlawful detainer( 7e deny the petition( 7ell settled is the rule that what deter.ines the nature of the action as well as the court which has >urisdiction over the case are the alle2ations in the co.plaint( 19cra1aw 6n e>ect.ent cases, the co.plaint should e.body such state.ent of facts as to brin2 the party clearly within the class of cases under )ection 1, Rule 70 of the 1997 Rules of "ivil *rocedure, as a.ended( )ection 1 providesBchanroblesvirtualawlibrary )8"T6O+ 1( Who may institute proceedings and when.!! )ub>ect to the provisions of the ne<t succeedin2 section, a person deprived of the possession of any land or buildin2 by force, inti.idation, threat, strate2y, or stealth, or a lessor, vendor, vendee, or other person a2ainst who. the possession of any land or buildin2 is unlawfully withheld after the e<piration or ter.ination of the ri2ht to hold

co.ply with all the re:uire.ents pre&re:uisite to the availin2 of the " * benefits but failed and despite repeated de.ands therefor, thus, the filin2 of a co.plaint with the 3aran22ay and the issuance of the certificate to file action dated ?ebruary !, 2000A !( #s ti.e is of the essence, and the fact that the defendants are .ere intruders or usurpers who have no possessory ri2ht whatsoever over the land ille2ally occupied by the., triflin2 technicalities that would tend to defeat the speedy ad.inistration of >ustice for.al de.and is not necessary thereto, $Republic vs( "ru; "(#( '(R( +o( 21910 R ?eb( 7, 1901% however, to afford a sufficient period of ti.e within which to vacate the pre.ises peacefully another oral and for.al de.ands were .ade upon the sa.e to that effect, and de.olish the te.porary office and houses they constructed on plaintiffs property and instead defendants a2ain, as representative to alle2ed 48state of /ulian Tallano4 filed a co.plaint for e>ect.ent a2ainst plaintiffs for.er *resident, 5on( arcelino #ben which case, is docketed as civil case no( 1119, lod2ed, before branch 11 of this 5onorable court, defendants obstinately refused to peacefully turn over the property they intruded upon in fact they even dared plaintiff to file a case a2ainst the. boastin2 that nobody can order the. to vacate the pre.isesA 9( Defendants letter dated #u2ust 9, 2000, acknowled2ed actual receipt of plaintiffs two $2% for.al de.ands letters( Thus, 4the issuance of Gatibayan =pan2 akadulo2 sa 5uku.an4 dated )epte.ber 2-, 2000A

758R8?OR8, the instant petition for review on certiorari is hereby DENIED for lack of .erit( The Decision dated October 19, 2007 and Resolution dated ay 21, 200! of the "ourt of #ppeals in "#& '(R( )* +o( 9,0-0 are hereby A&&IRMED. 7ith costs a2ainst petitioners(

G.R. No. 1%3%H3

O,(o7e0 1%, 2010

PIO MODESTO "n CIRILA RI>ERA9MODESTO, :etitioners, vs. CARLOS *RBINA, 'u7'(.(u(e 78 (+e +e.0' o/ OLYMPIA MIG*EL >DA. DE *RBINA BSu0A.A.n& S1ou'eC "n ,+.- 0en, n":e-8# ESCOLASTICA M. *RBINA, ET AL., !espondents. !-S9+,(I9# BRION, J!<

10( #s a result thereof, plaintiff was co.pelled to en2a2e the services of the undersi2ned counsel in order to i..ediately institute the instant suit for which services plaintiff a2reed to pay the a.ount of *,-,000(00 plus *,,-00(00 per court appearanceA < < < <21chanroblesvirtuallawlibrary

De resolve the motion for reconsideration filed by petitioners :io Modesto and Cirila !ivera Modesto @Modestos or petitionersA dated March /, %0/0, / see?ing to reverse our <anuary //, %0/0 !esolution, which denied their petition for review on certiorari for lac? of merit.% )"C(,"+ "#(-C-.-#(S

# co.plaint sufficiently alle2es a cause of action for unlawful detainer if it recites the followin2B $1% initially, possession of property by the defendant was by contract with or by tolerance of the plaintiffA $2% eventually, such possession beca.e ille2al upon notice by plaintiff to defendant of the ter.ination of the latters ri2ht of possessionA $,% thereafter, the defendant re.ained in possession of the property and deprived the plaintiff of the en>oy.ent thereofA and $1% within one year fro. the last de.and on defendant to vacate the property, the plaintiff instituted the co.plaint for e>ect.ent(22chanroblesvirtuallawlibrary 9ikewise, the evidence proves that after #5# ac:uired the property, #5# tolerated petitioners stay and 2ave the. the option to ac:uire portions of the property by beco.in2 .e.bers of #5#( *etitioners continued stay on the pre.ises was sub>ect to the condition that they shall co.ply with the re:uire.ents of the " *( Thus, when they failed to fulfill their obli2ations, #5# had the ri2ht to de.and for the. to vacate the property as their ri2ht of possession had already e<pired or had been ter.inated( The .o.ent #5# re:uired petitioners to leave, petitioners beca.e deforciants ille2ally occupyin2 the land(2,cra1aw 7ell settled is the rule that a person who occupies the land of another at the latters tolerance or per.ission, without any contract between the., is necessarily bound by an i.plied pro.ise that he will vacate upon de.and, failin2 which, a su..ary action for e>ect.ent is the proper re.edy a2ainst hi.(21cra1aw Thus, the RT" and the "# correctly ruled in favor of #5#( #s to petitioners ar2u.ent that #5#s title is void for havin2 been secured fraudulently, we find that such issue was i.properly raised( 6n an unlawful detainer case, the sole issue for resolution is physical or .aterial possession of the property involved, independent of any clai. of ownership by any of the parties(2-cra1aw )ince the only issue involved is the physical or .aterial possession of the pre.ises, that is possession de facto and not possession de "ure the :uestion of ownership .ust be threshed out in a separate action(

Civil Case #o. 13623 (his case stems from a complaint for recovery of possession filed by respondent Carlos ,rbina @,rbinaA against the petitioners with the !egional (rial Court of :asig @!(CA, doc?eted as Civil Case #o. 13623. In his complaint, ,rbina alleged that he is the owner of a parcel of land situated at +ower 3icutan, (aguig, designated as +ot 16, :+S %$%. "ccording to ,rbina, the Modestos, through stealth, scheme, and machination, were able to occupy a portion of this property, designated as +ot 316, :+S %$%. (hereafter, the Modestos negotiated with ,rbina for the sale of this lot. >owever, before the parties could finali*e the sale, the Modestos allegedly cancelled the transaction and began claiming ownership over the lot. ,rbina made several demands on the Modestos to vacate the property, the last of which was through a demand letter sent on <uly %%, /&23. Dhen the Modestos still refused to vacate, ,rbina filed the present action against them. In their answer, the Modestos claimed that ,rbina could not be the lawful owner of the property because it was still government property, being a part of the )ort 3onifacio Military !eservation. "fter the resolution of various procedural issues,3 the !(C of :asig City rendered a decision in favor of ,rbina on "pril %6, %000, ordering the petitioners to immediately vacate and surrender the lot to ,rbina and to pay him:%00.00 monthly as compensation for the use of the property from <uly %%, /&23 until they finally vacate. 6 (he !(C noted that the petitioners recogni*ed ,rbinaTs possessory rights over the property when they entered into a negotiated contract of sale with him for the property. (hus, the Modestos were estopped from subse uently assailing or disclaiming ,rbinaTs possessory rights over this lot.

(he petitioners appealed this decision with the Court of "ppeals @C"A. +M3 Conflict #o. //0 ,rbinaTs claim of ownership over +ot 16 is based primarily on his Miscellaneous Sales "pplication #o. @III7/A 660 @Miscellaneous Sales "pplicationA, which he filed on <uly %/, /&66. 1 Dhile ,rbinaTs accion publiciana complaint was pending before the !(C, the Modestos filed a letter7protest against ,rbinaTs Miscellaneous Sales "pplication with the +and Management 3ureau @+M3A on <anuary %&, /&&3, claiming that8 @aA they are the owners of +ot 316, :+S %$%B 6 @bA they have been occupying this lot for almost 33 yearsB and @cA their house is constructed on this lot. (he Modestos also alleged that they filed an unnumbered sales application for +ot 316 with the +M3, based on their actual occupancy of the property, pursuant to :roclamations %6$6 and /$%, on )ebruary /0, /&&3. 9n <anuary 3/, %002, the +M3 denied with finality the ModestosT unnumbered sales applicationLprotest against ,rbinaTs application, in turn upholding ,rbinaTs Miscellaneous Sales "pplication. !efusing to give up, the Modestos filed a motion for reconsideration. (hey also filed an Insular ;overnment :atent Sales "pplication over +ot 316 on <anuary %$, %00&. $ (>- C9,!( 9) "::-"+S .-CISI9# (he C" affirmed in toto the !(C decision in Civil Case #o. 13623 on <anuary %6, %00&. 2 (he C" agreed with the !(CTs observation that the Modestos were estopped from challenging ,rbinaTs right to possess the property after they ac?nowledged this right when they entered into the negotiated contract of sale. (he C" also gave credence to the <anuary 3/, %002 +M3 order in +M3 Conflict #o. //0, ruling that this +M3 order bolstered ,rbinaTs possessory rights over the sub4ect property. "t the time the C" decision was issued, respondent Carlos ,rbina had already passed away and had been substituted by his surviving heirs, his spouse, 9lympia Miguel Eda. de ,rbina, and his children, -scolastica, Cecilia, -fren, Manolito, and :urificacion, all surnamed ,rbina @respondentsA.

.irector of +ands @of the 3ureau of +ands, now .irector of the +and Management 3ureauA over these parcels of public lands. +astly, the Modestos uestioned ,rbinaTs ualifications to possess the property, claiming that ,rbina was not in actual, adverse, public and continuous possession of the property. "ccording to the Modestos, from the time that ,rbina filed his Miscellaneous Sales "pplication in /&66 until the present, ,rbina was a resident of Ma?ati City, and did not actually occupy the property. In our 9rder dated <anuary //, %0/0, we denied the ModestosT petition for failing to sufficiently show any reversible error in the assailed C" decision. (>- M9(I9# )9! !-C9#SI.-!"(I9# 9n March 3, %0/0, the Modestos filed their motion for reconsideration, raising essentially the same grounds already brought up in their petition for review on certiorari. #otably, the Modestos attached +M3 9rder dated )ebruary /&, %0/0 @)ebruary /&, %0/0 +M3 9rderA, which resolved their motion for reconsideration of the +M3Ts <anuary 3/, %002 order in +M3 Conflict #o. //0. (his 9rder held that the sub4ect property had indeed been a part of the )ort 3onifacio Military !eservation, and only became alienable and disposable after 9ctober /6, /&2$. (hus, ,rbinaTs Miscellaneous Sales "pplication over the property was improper and could not be the source of possessory rights over the property. (he order also noted that ,rbina failed to comply with the re uirements of an applicant for ownership of the property, as set forth in Memorandum #o. //&, the implementing guidelines of :roclamation #o. /$%. !esponding to this motion, the respondents, in their Comment dated May 3/, %0/0, reiterated that the petitioners are estopped from assailing ,rbinaTs possessory rights over the property after they entered into a negotiated sales contract with him over the sub4ect property. (hey also accused the Modestos of employing dilatory tactics in filing the present motion. T2E R*LING )e GRANT (+e :o(.on /o0 0e,on'. e0"(.on.

(>- :-(I(I9# :rocedural issue (he petitioners subse uently filed a petition for review on certiorari with this Court, asserting that the C" committed reversible error in finding that ,rbina had possessory rights over the property. (he Modestos mainly argued that at the time ,rbina filed his MS" and ac uired ta' declarations over the sub4ect property, the property was still government property, being part of a military reservation. (he property was thus not alienable and disposable, and could not legally be possessed by a private individual. "ccordingly, ,rbina could not use the MS" and the ta' declarations as proof of a better right to possess the property as against the Modestos. (he Modestos further claimed that the C" committed grievous error when it held that they were estopped from challenging ,rbinaTs right to possess the sub4ect property. Dhile they admitted to negotiating with ,rbina for the sale of the property, they alleged that they did so based on ,rbinaTs misrepresentation that he had a legal claim of ownership over the property. Since their offer to buy the property from ,rbina was based on his false assertions, the principle of estoppel cannot apply. "dditionally, the Modestos alleged that since the property is covered by :roclamation #o. /$% and Memorandum 9rder #o. //&, the lower courts should have given due consideration to the primary and e'clusive 4urisdiction of the "n accion publiciana is an ordinary civil proceeding to determine the better right of possession of realty independently of title.& "ccion publiciana is also used to refer to an e4ectment suit where the cause of dispossession is not among the grounds for forcible entry and unlawful detainer, or when possession has been lost for more than one year and can no longer be maintained under !ule $0 of the !ules of Court. (he ob4ective of a plaintiff in accion publiciana is to recover possession only, not ownership./0 In as?ing us to determine which of the parties has a better right to possess the property, we are as?ed to resolve a factual issue, involving as it does the weighing and evaluation of the evidence presented by the parties in the courts below. ;enerally, such an e'ercise is not appropriate in a petition for review on certiorari under !ule 61 of the !ules of Court, which see?s to resolve only uestions of law. Moreover, the factual findings of the C", when supported by substantial evidence, are conclusive and binding on the parties and are not reviewable by this Court, unless the case falls under any of the following recogni*ed e'ceptions8 @/A Dhen the conclusion is a finding grounded entirely on speculation, surmises and con4ecturesB

@%A Dhen the inference made is manifestly mista?en, absurd or impossibleB @3A Dhere there is a grave abuse of discretionB @6A Dhen the 4udgment is based on a misapprehension of factsB @1A Dhen the findings of fact are conflictingB @6A Dhen the Court of "ppeals, in ma?ing its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appelleeB @$A Dhen the findings are contrary to those of the trial courtB @2A Dhen the findings of fact are conclusions without citation of specific evidence on which they are basedB @&A Dhen the facts set forth in the petition as well as in the petitioners5 main and reply briefs are not disputed by the respondentsB and @/0A Dhen the findings of fact of the Court of "ppeals are premised on the supposed absence of evidence and contradicted by the evidence on record. // Since the C" affirmed the factual findings of the !(C, we would normally be precluded from re7e'amining the factual circumstances of this case. >owever, it appears that the !(C and the C", in concluding that ,rbina has the right to lawfully e4ect the Modestos from the lot in uestion, have greatly misapprehended the facts of this case. In finding for ,rbina, both the !(C and the C" mainly relied on the principle of estoppel, and focused on the ModestosT admission that they entered into a negotiated contract of sale with ,rbina. In the process, they in4udiciously ignored the other material issues that the Modestos raised regarding the validity of ,rbinaTs possession of the property, specifically the ModestosT allegation that at the time ,rbina began sta?ing his claim over the property, it was still government land. (his error on the part of the lower courts is made more evident when we ta?e into account an intervening event which significantly affects the resolution of this case R the issuance by the +M3 of its order dated )ebruary /&, %0/0, which e'pressly stated that ,rbina did not ac uire any possessory rights over the lot. )or these reasons, we find the review of the evidence on record proper. <urisdiction of the Court (he authority of the courts to resolve and settle uestions relating to the possession of property has long been settled./% (his authority continues, even when the land in uestion is public land. "s we e'plained in Solis v. Intermediate "ppellate Court8 /3 De hold that the power and authority given to the .irector of +ands to alienate and dispose of public lands does not divest the regular courts of their 4urisdiction over possessory actions instituted by occupants or applicants against others to protect their respective possessions and occupations. Dhile the 4urisdiction of the 3ureau of +ands Fnow the +and Management 3ureauG is confined to the determination of the respective rights of rival claimants to public lands or to cases which involve disposition of public lands, the power to determine who has the actual, physical possession or occupation or the better right of possession over public lands remains with the courts.

(he rationale is evident. (he 3ureau of +ands does not have the wherewithal to police public lands. #either does it have the means to prevent disorders or breaches of peace among the occupants. Its power is clearly limited to disposition and alienation and while it may decide disputes over possession, this is but in aid of ma?ing the proper awards.#avvphi# (he ultimate power to resolve conflicts of possession is recogni*ed to be within the legal competence of the civil courts and its purpose is to e'tend protection to the actual possessors and occupants with a view to uell social unrest. Conse uently, while we leave it to the +M3 to determine the issue of who among the parties should be awarded the title to the sub4ect property, there is no uestion that we have sufficient authority to resolve which of the parties is entitled to rightful possession. 9n the issue of possessory rights :refatorily, we observe that the sub4ect property has not yet been titled, nor has it been the sub4ect of a validly issued patent by the +M3. (herefore, the land remains part of the public domain, and neither ,rbina nor the Modestos can legally claim ownership over it. (his does not mean, however, that neither of the parties have the right to possess the property. ,rbina alleged that he is the rightful possessor of the property since he has a pending Miscellaneous Sales "pplication, as well as ta' declarations over the property. >e also relied, to support his claim of a better right to possess the property, on the admission on the part of the Modestos that they negotiated with him for the sale of the lot in uestion. 9n the other hand, the Modestos anchored their right to possess the same on their actual possession of the property. (hey also uestioned the legality of ,rbinaTs Miscellaneous Sales "pplication, and his ta' declarations over the property, arguing that since these were obtained when the land was still not alienable and disposable, they could not be the source of any legal rights. "fter reviewing the records of this case, we find the reasoning of the Modestos to be more in accord with applicable laws and 4urisprudence. (he )ebruary /&, %0/0 +M3 9rder )actual findings of administrative agencies are generally respected and even accorded finality because of the special ?nowledge and e'pertise gained by these agencies from handling matters falling under their speciali*ed 4urisdiction./6 ;iven that the +M3 is the administrative agency tas?ed with assisting the Secretary of the .epartment of -nvironment and #atural !esources @.-#!A in the management and disposition of alienable and disposable lands of the public domain,/1 we defer to its speciali*ed ?nowledge on these matters. In this regard, we uote with approval the observations made by the .irector of the +M3 in the )ebruary /&, %0/0 +M3 9rder8 Movants Fthe ModestosG have anchored their Motion for !econsideration on three @3A assigned errors, to wit8 I. (>IS 9))IC- -!!-. I# I(S )I#.I#;S (>"( (>- "!-" IS #9( C9E-!-. 3J :!9C+"M"(I9# #9. /$%, "S IM:+-M-#(-. 3J M-M9!"#.,M 9!.-! #9. //&B II. (>IS 9))IC- -!!-. I# I(S )I#.I#;S (>"( C"!+9S (. ,!3I#" D"S I# "C(,"+, ".E-!S-, :,3+IC "#. C9#(I#,9,S :9SS-SSI9# 9) (>- :!9:-!(J I# M,-S(I9#B III. (>IS 9))IC- -!!-. I# #9( >9+.I#; (>"( " #-D S,!E-J 9) (>- "!-" I# M,-S(I9# S>9,+. 3- .9#- "#. C9#.,C(-. (9 .-(-!MI#- (>- (!,- 39,#."!I-S 9) (>:!9:-!(J I# M,-S(I9# EIS7X7EIS (>- C+"IMS 9) -"C> :"!(J.

In order to clarify the issues raised in the Motion for !econsideration, this 9ffice ordered that another ocular inspection and investigation on the sub4ect premises be conducted by Special Investigator .anilo +im. "fter said investigation, Special Investigator, .anilo +im, submitted his !eport to the !egional (echnical .irector, +ands Management Services, thru the Chief, +and Management .ivision, .-#!7#C!. In his !eport, Special Investigator, .anilo +im made the following findings8 (he Miscellaneous Sales "pplication filed by Carlos ,rbina is not appropriate because +ot 316 had ceased to be public land as it had become part of the )ort 3onifacio Military !eservation, and hence, no one can claim possessory rights over the said property since it is within said Military !eservation. (he sub4ect area which is located in +ower 3icutan, (aguig, only became alienable and disposable upon the issuance of :residential :roclamation #o. /$% and its implementing guidelines Memorandum 9rder #o. //& on 9ctober /6, /&2$. "fter a 4udicious evaluation of the arguments raised in the instant motion, and ta?ing into account the findings and recommendations of Special Investigator .anilo +im as contained in his !eport, this 9ffice finds the same to be not entirely without merit. "nent the first assigned error, Special Investigator .anilo +im has found that the area is indeed a part of the )ort 3onifacio Military !eservation and is covered by :roclamation #o. /$% and Memorandum 9rder #o. //&. ,pon a thorough research of the origin of the sub4ect property, it turned out that the area was originally part of the vast parcel of land ?nown as >acienda .e Maricaban. Sometime in /&0%, the ,nited States of "merica purchased said vast tract of land with an area of Seven >undred and (wenty #ine and )ifteenth >undred @$%&./1A >ectares and spanning the Municipalities of :asig, (aguig, :arana ue and :asay, from its original owner, .ona .olores :acual Casal J 9choa, for the purpose of establishing a ,S Military !eservation which they later named )ort Dilliam Mc =inley. 9n <uly /%, /&1$, :resident Carlos :. ;arcia issued :roclamation #o. 6%3, reserving for military purposes, the parcels of land identified as :arcel #o. %, #o. 3 and #o. 6, :su7%03/, on which parcels of land e'cluding :arcel #o. %, the present )ort 3onifacio was established for the !epublic of the :hilippines. :arcel #o. 3, :su7%03/ is covered by (.C.(. #o. 6/1%6 registered in the name of the !epublic of the :hilippines. 9n 9ctober /6, /&2$, :resident Cora*on C. " uino issued :roclamation #o. /$% in order to e'clude from the operation of :roclamation #o. 6%3 which established )ort 3onifacio, certain portions of land embraced therein ?nown as 3arangays +ower 3icutan, ,pper 3icutan, Destern 3icutan and Signal Eillage, all situated in the Municipality of (aguig, and to declare the same open for disposition to actual occupants and ualified applicants under the provisions of !epublic "ct #o. %$6 and !epublic "ct #o. $30 in relation to the :ublic +and "ct as amendedB and under Memorandum 9rder #o. //& issued by :resident Cora*on " uino. In :roclamation #o. /$%, +ower 3icutan is described as +ot 3 situated in the Municipality of (aguig, M.M., and containing an area of 9ne Million -ighty )our (housand (hree >undred -leven @/,026,3//A s m more or less or /02.63 hectares. In view of all the above recitals, it appears that the parcel of land sub4ect of this case @+ot 316A which is located in 3arangay +ower 3icutan, City of (aguig is covered by :roclamation #o. /$% issued by :resident Cora*on C. " uino, and hence, the same only became alienable and disposable to ualified applicants after 9ctober /6, /&2$, the date of its issuance, contrary to what is believed in the assailed 9rder of this 9ffice. Dith respect to the second assigned error, the issue can be resolved by the application of the legal provisions covering the sub4ect property, which is :roclamation #o. /$% and its implementing guidelines. ,nder its implementing guidelines, Memorandum #o. //&, the following are the ualifications for an applicant to be ualified to apply for and ac uire a lot under :roclamation #o. /$%, among others, to wit8 @/A >eLShe must be a 'ona fide resident of the proclaimed areas. (o be considered a 'ona fide resident, the applicant must have the following ualifications8 aA " )ilipino citi*en of legal age andLor a head of the familyB

bA Must have constructed a house in the area proclaimed for disposition on or before <anuary 6, /&26 and actually residing thereinB cA Must not own any other residential or commercial lot in Metro ManilaB dA Must not have been a registered awardee of any lot under the administration of the #>", M>S, or any other government agency, nor the "): 9fficerTs villageB eA Must not be a professional s uatter. " professional s uatter, for purposes of this 9rder, is one who engages in selling lots in the areas proclaimed for dispositionB and fA >as filed the proper application to purchase. 3ased on the !eport of Special Investigator +im and the other +and Inspectors who investigated this case, namely8 <ose :. "ntonio and <ose :. :arayno, it was found that :io Modesto and his family are the actual occupants of the area with a residential house and chapel made of light materials and :io Modesto and his family are actually residing in the said residential house. 9n the other hand, it was established that Carlos ,rbina has been a resident of :asay !oad or 6&%& :io .el :ilar, Ma?ati City. "pplying the ualifications provided for in Memorandum 9rder #o. //&, we find that Spouses Modesto are to be ualified to apply for the sub4ect lot as they have been in occupation thereof and have constructed their residential house thereon. >ence, they satisfy the re uirements in order to be considered a "3onafide !esident" as defined in the guidelines. "s per our records, Spouses :io and Cirila Modesto have also filed an unnumbered I.;.:.S.". "pplication for the sub4ect lot on <anuary %$, %00&. Carlos ,rbina, however, never constructed any house on the sub4ect lot and neither did he actually reside therein. 3esides, he already owns a residential lot in Ma?ati City where he had been residing all this time. >ence, he cannot be considered a bonafide resident of the sub4ect lot. >e li?ewise failed to file his I.;.:.S." application for the lot. Instead, what he had filed on <anuary %0, /&66 was a Miscellaneous Sales "pplication. "t that time, however, the area of 3arangay +ower 3icutan, where the sub4ect lot is located, was still part of the )ort 3onifacio Military !eservation, and the same had not yet been segregated and declared to be alienable and disposable.>ence, no possessory rights could have been ac uired by his over the sub4ect lot./6 )rom this +M3 order, we consider the following facts established8 )irst, the lot in uestion, situated in 3arangay +ower 3icutan, was part of the )ort 3onifacio Military !eservation, and only became alienable and disposable after 9ctober /6, /&2$, pursuant to :roclamation #o. /$%. (his factual finding finds further support in the testimony, before the !(C, of <ose -'e uiel Eale, Special Investigator and "ssisting >earing 9fficer of the .-#!. /$ Second, the Modestos are bona fide residents of the lot in uestion, being the actual residents of the lot and having built a house and chapel on the property. (hird, the Modestos have a pending Insular ;overnment :atent Sales "pplication over the lot in uestion, filed after the property became alienable and disposable. (a?ing these facts into account, we now ma?e a distinction, based on the corresponding legal effects, between8 @aA possession of the property before 9ctober /6, /&2$, when the land was still considered inalienable government land, and @bA possession of the property after 9ctober /6, /&2$, when the land had already been declared alienable and disposable. :ossession prior to 9ctober /6, /&2$

,nless a public land is shown to have been reclassified as alienable or actually alienated by the State to a private person, that piece of land remains part of the public domain, /2 and its occupation in the concept of owner, no matter how long, cannot confer ownership or possessory rights. /& It is only after the property has been declared alienable and disposable that private persons can legally claim possessory rights over it. "ccordingly, even if we recogni*e that ,rbina had been in possession of the property as early as <uly %/, /&66, when he filed his Miscellaneous Sales "pplication, his occupation was unlawful and could not be the basis of possessory rights, in ?eeping with Section 22 of the :ublic +and "ct, that states8 Se,(.on %%. (he tract or tracts of land reserved under the provisions of section eighty7three shall be non7alienable and shall not be sub4ect to occupation, entry, sale, lease, or other disposition until again declared alienable under the provisions of this "ct or by proclamation of the :resident. (he same holds true for ,rbinaTs ta' declarations. "bsent any proof that the property in uestion had already been declared alienable at the time that ,rbina declared it for ta' purposes, his ta' declarations over the sub4ect property cannot be used to support his claim of possession. Similarly, while the Modestos claim to have been in possession of +ot 316 for almost 33 years, %0 this occupation could not give rise to possessory rights while the property being occupied remain government land that had not yet been declared alienable and disposable. :ossession after 9ctober /6, /&2$ (he different land investigators%/ sent by the +M3 to survey the sub4ect property have consistently held that the Modestos are the actual occupants of the lot in uestion. (his actual occupation is not denied by ,rbina. "s a matter of fact, we ?now from ,rbinaTs final demand letter that the Modestos have been in open and continuous possession of the property since <uly %%, /&23.%% De also consider established that the Modestos built a house on the sub4ect property, a fact that ,rbina affirmed in his testimony before the !(C. %3 )rom these circumstances, we consider as settled the fact that the Modestos were the actual possessors of the property when it was declared alienable and disposable on 9ctober /6, /&2$, and continued to possess the property until the present time. )urthermore, the Modestos have a valid Insular ;overnment :atent Sales "pplication over the property pending with the +M3, which they filed on <anuary %$, %00&.%6 In contrast, ,rbina has a Miscellaneous Sales "pplication filed in /&66, which the +M3 considered invalid since it was filed when the property still formed part of a military reservation. "s for the Certification from the City (reasurer of (aguig that the respondents presented, %1 which certified that Carlos ,rbina had paid real estate ta'es on real property "describeFdG in the name of Carlos ,rbina, with property located at +ower 3icutan, (aguig City" from %00& and prior years, we note that the certification contains no description of the property sub4ect of the ta' declaration, leaving us to wonder on the identity of the property covered by the declaration. In any case, even if we consider this certification as sufficient proof that ,rbina declared the sub4ect property for ta' declaration purposes, it must be stressed that the mere declaration of land for ta'ation purposes does not constitute possession thereof nor is it proof of ownership in the absence of the claimantTs actual possession. %6"nd in light of our categorical finding that the Modestos actually occupied the property in uestion from the time that it was declared alienable and disposable until the present time, the ta' declaration fails to convince us that ,rbina has a right to legally possess it. )or these reasons, we find that ,rbina utterly failed to prove that he has a better right to possess the property. (hus, we cannot sustain his complaint for e4ectment against the Modestos and, perforce, must dismiss the same for lac? of merit. 9n the finding of estoppel

+astly, we find the C"Ts reliance on the principle of estoppel against the Modestos to be misplaced. (hrough estoppel, an admission or representation is rendered conclusive upon the person ma?ing it, and cannot be denied or disproved as against the person relying on it. %$ (his doctrine is based on the grounds of public policy, fair dealing, good faith and 4ustice, and its purpose is to forbid one to spea? against his own act, representations, or commitments to the in4ury of one to whom they were directed and who reasonably relied on it. %2 It bears noting, however, that no estoppel arises where the representation or conduct of the party sought to be estopped is due to ignorance founded upon an innocent mista?e. %& >ere, the Modestos do not deny that they negotiated with ,rbina for the sale of the sub4ect property. >owever, because they entered the negotiated sales contract with ,rbina on the mista?en belief, based on ,rbinaTs erroneous assertion, that he was the lawful owner7possessor of the property in uestion, we do not consider them bound by this action. Conse uently, the principle of estoppel finds no application in this case. )2EREFORE, premises considered, we ;!"#( the motion and !-I#S("(- the petition. Conse uently, we !-E-!S- and S-( "SI.- the .ecision dated <anuary %6, %00& and !esolution dated 9ctober 1, %00& of the Court of "ppeals in C"7;.!. CE #o. 6200$. De .ISMISS the complaint for !ecovery of :ossession filed by Carlos (. ,rbina for lac? of merit.

Ejectment cases forcible entry and unlawful detainer are summary proceedings designed to provide expeditious means to protect actual possession or the right to possession of the property involved. he only question that the courts resolve in ejectment proceedings is! who is entitled to the physical possession of the premises, that is, to the possession de facto and not to the possession de jure. "t does not even matter if a party#s title to the property is questionable

G.R. No. 166$36

Ju-8 2$, 2010

DR. DIOSCORO CARBONILLA, :etitioner, vs. MARCELO ABIERA "n MARICRIS ABIERA PAREDES, S*BSTIT*TED BY 2ER 2EIRS, !espondents. .-CISI9# NAC2*RA, J!< "ssailed in this petition for review are the .ecision / of the Court of "ppeals @C"A dated September /2, %006 and the !esolution dated "pril /$, %00$, which dismissed petitionerTs complaint for e4ectment against respondents. (he case arose from the following antecedents8 :etitioner, .r. .ioscoro Carbonilla, filed a complaint for e4ectment against respondents, Marcelo "biera and Maricris "biera :aredes, with the Municipal (rial Court in Cities @M(CCA, Maasin City. (he complaint alleged that petitioner is the registered owner of a parcel of land, located in 3arangay Canturing, Maasin City, identified as +ot #o. /$2/737:737 37%73 :S.7027261%7., Maasin Cadastre. (he land is purportedly covered by a certificate of title, and declared for assessment and ta'ation purposes in petitionerTs name. :etitioner further claimed that he is also the owner of the residential building standing on the land, which building he ac uired through a .eed of -'tra4udicial Settlement of -state @!esidential 3uildingA with Daiver and Muitclaim of 9wnership. >e maintained that the building was being

occupied by respondents by mere tolerance of the previous owners. :etitioner asserted that he intends to use the property as his residence, thus, he sent a demand letter to respondents as?ing them to leave the premises within /1 days from receipt of the letter, but they failed and refused to do so. Conciliation efforts with the 3arangay proved futile.% (o corroborate his claim, petitioner presented copies of (ransfer Certificate of (itle @(C(A #o. (73$26B .eed of -'tra4udicial Settlement of -state @!esidential 3uildingA with Daiver and Muitclaim of 9wnership dated #ovember /0, %00%, e'ecuted by the heirs of <ovita Janto ;arcianoB (a' .eclaration @(.A with "!: #o. 0$0%070000/&B and .emand +etter dated #ovember %0, %00%. (C( #o. (73$26 shows that the land was originally registered on <anuary 30, /&62 in the name of .iosdado Carbonilla, petitionerTs father, under 9riginal Certificate of (itle #o. /21. In their defense, respondents vehemently denied petitionerTs allegation that they possessed the building by mere tolerance of the previous owners. Instead, they asserted that they occupied the building as owners, having inherited the same from "lfredo "biera and (eodorica Capistrano, respondent MarceloTs parents and respondent MaricrisT grandparents. (hey maintained that they have been in possession of the building since /&60, but it has not been declared for ta'ation purposes. "s for the sub4ect land, respondents claimed that they inherited the same from )rancisco :lasabas, grandfather of "lfredo "biera. (hey pointed out that the land had, in fact, been declared for ta'ation purposes in the name of )rancisco :lasabas under (. #o. 66$6, before the Second Dorld Dar. (his (. was later cancelled by (. #o. 2$31 in /&62, (. #o. /6363 in /&12, and (. #o. /6/2% in /&63. !espondents averred that the building was previously a garage7li?e structure but, in /&$$, "lfredo "biera and (eodorica Capistrano repaired and remodeled it, for which reason, they obtained a building permit on "pril //, /&$$ from the then Municipality of Maasin. )inally, respondents contended that the case should be dismissed for failure to implead as defendants respondent MarceloTs siblings, who are co7heirs of the sub4ect properties. 3 !espondents presented copies of the two (.s in the name of )rancisco :lasabas and the 3uilding :ermit dated "pril //, /&$$. (he M(CC decided the case in favor of respondents. It opined that petitionerTs claim of ownership over the sub4ect parcel of land was not successfully rebutted by respondentsB hence, petitionerTs ownership of the same was deemed established.6 >owever, with respect to the building, the court declared respondents as having the better right to its material possession in light of petitionerTs failure to refute respondentsT claim that their predecessors had been in prior possession of the building since /&60 and that they have continued such possession up to the present. 1 In so ruling, the court applied "rt. 1666 of the Civil Code which allows the possessor in good faith to retain the property until he is reimbursed for necessary e'penses. (hus, in its decision dated March /1, %006, the M(CC pronounced8 D>-!-)9!-, foregoing premises considered and the collated evidences at hand FhaveG preponderantly established, <,.;M-#( is hereby rendered in favor of the defendants .-C+"!I#; the defendants to have the better rights of @materialA possession to the assailed building and deemed as possessors in good faith and are legally entitled to its possession and occupancy. (he plaintiff 4udicially affirmed as the land owner is en4oined to respect the rights of the defendants pursuant to the provisions of "rt. 166, Chapter III, #ew Civil Code of the :hilippinesF, wGithout pre4udice to the provisions of "rts. 16$ and 162, #ew Civil Code of the :hilippines. #o pronouncement as to costs as defendantsT predecessors7in7interest are deemed possessors and builders in good faith. S9 9!.-!-..$ :etitioner elevated the case to the !egional (rial Court @!(CA. 9n <uly /%, %006, the !(C reversed the M(CC decision. (he !(C agreed with the M(CC that the land is owned by petitioner. (he two courts differed, however, in their conclusion with respect to the building. (he !(C placed the burden upon respondents to prove their claim that they built it prior to petitionerTs ac uisition of the land, which burden, the court found, respondents failed to discharge. (he !(C held that, either wayKwhether the building was constructed before or after petitioner ac uired ownership of the landKpetitioner, as owner of the land, would have every right to evict respondents from the land. "s theori*ed by the !(C, if the building was erected before petitioner or his predecessors ac uired ownership of the land, then "rticle 6612 of the Civil Code would apply. (hus, petitioner, as owner of the land, would be deemed the owner of the building standing thereon, considering that, when ownership of the land was transferred to him, there was no reservation by the original owner that the building was not included in the transfer. 9n the other hand, if the building was constructed

after petitioner became the owner of the land, it is with more reason that petitioner has the right to evict respondents from the land. (he dispositive portion of the !(C decision reads8 D>-!-)9!-, premises considered, 4udgment is hereby rendered /. !eversing the decision of the court a uoB %. 9rdering defendants to immediately vacate the residential houseLbuilding sub4ect of this litigationB 3. 9rdering defendants to pay attorneyTs fee in the amount of :30,000.00B and 6. (o pay the cost of the suit. S9 9!.-!-..& !espondents then filed a petition for review with the C". )inding no evidence to prove that respondentsT possession of the building was by mere tolerance, the C" reversed the !(C decision and ordered the dismissal of petitionerTs complaint. 3ecause of this, the C", following this CourtTs ruling in (en )orty !ealty and .evelopment Corporation v. Cru*, categori*ed the complaint as one for forcible entry. It then proceeded to declare that the action had prescribed since the one7year period for filing the forcible entry case had already lapsed. (he dispositive portion of the C" .ecision dated September /2, %006 reads8 D>-!-)9!-, premises considered, the assailed decision promulgated on <uly /%, %006 of 3ranch %1 of the !egional (rial Court @!(CA, Maasin City, Southern +eyte in Civil Case #o. !7332% is hereby declared #,++ and E9I. for failure of the plaintiff @herein respondentA to prove that the case at bar is for unlawful detainer or forcible entry. "ccordingly, the instant case is hereby .ISMISS-.. '''' S9 9!.-!-../0 :etitioner sought reconsideration of the .ecision, but the C" denied petitionerTs motion for lac? of merit. // >ence, petitioner came to this Court through a petition for review on certiorari. 9n September 3, %00$, respondentsT counsel informed this Court that respondent, Maricris "biera :aredes, died on <une %1, %006 of asphy'ia due to hanging, and moved that the latterTs heirs be allowed to substitute for the deceased./% In the !esolution/3 dated #ovember /6, %00$, the Court granted the motion. :etitioner argues that he has sufficiently established his ownership of the sub4ect propertiesB conse uently, he asserts the right to recover possession thereof. (he petition has no merit. (o set the record straight, while petitioner may have proven his ownership of the land, as there can be no other piece of evidence more worthy of credence than a (orrens certificate of title, he failed to present any evidence to substantiate his claim of ownership or right to the possession of the building. +i?e the C", we cannot accept the .eed of -'tra4udicial Settlement of -state @!esidential 3uildingA with Daiver and Muitclaim of 9wnership e'ecuted by the ;arcianos as proof that petitioner ac uired ownership of the building. (here is no showing that the ;arcianos were the

owners of the building or that they had any proprietary right over it. !anged against respondentsT proof of possession of the building since /&$$, petitionerTs evidence pales in comparison and leaves us totally unconvinced. Dithout a doubt, the registered owner of real property is entitled to its possession. >owever, the owner cannot simply wrest possession thereof from whoever is in actual occupation of the property. (o recover possession, he must resort to the proper 4udicial remedy and, once he chooses what action to file, he is re uired to satisfy the conditions necessary for such action to prosper. In the present case, petitioner opted to file an e4ectment case against respondents. -4ectment casesKforcible entry and unlawful detainerKare summary proceedings designed to provide e'peditious means to protect actual possession or the right to possession of the property involved. /6 (he only uestion that the courts resolve in e4ectment proceedings is8 who is entitled to the physical possession of the premises, that is, to the possession de facto and not to the possession de 4ure. It does not even matter if a partyTs title to the property is uestionable. /1)or this reason, an e4ectment case will not necessarily be decided in favor of one who has presented proof of ownership of the sub4ect property. =ey 4urisdictional facts constitutive of the particular e4ectment case filed must be averred in the complaint and sufficiently proven. (he statements in the complaint that respondentsT possession of the building was by mere tolerance of petitioner clearly ma?e out a case for unlawful detainer. ,nlawful detainer involves the personTs withholding from another of the possession of the real property to which the latter is entitled, after the e'piration or termination of the formerTs right to hold possession under the contract, either e'pressed or implied. /6 " re uisite for a valid cause of action in an unlawful detainer case is that possession must be originally lawful, and such possession must have turned unlawful only upon the e'piration of the right to possess. /$ It must be shown that the possession was initially lawfulB hence, the basis of such lawful possession must be established. If, as in this case, the claim is that such possession is by mere tolerance of the plaintiff, the acts of tolerance must be proved. :etitioner failed to prove that respondentsT possession was based on his alleged tolerance. >e did not offer any evidence or even only an affidavit of the ;arcianos attesting that they tolerated respondentsT entry to and occupation of the sub4ect properties. " bare allegation of tolerance will not suffice. :laintiff must, at least, show overt acts indicative of his or his predecessorTs permission to occupy the sub4ect property. (hus, we must agree with the C" when it said8 " careful scrutiny of the records revealed that herein respondent miserably failed to prove his claim that petitionersT possession of the sub4ect building was by mere tolerance as alleged in the complaint. (olerance must be FpresentG right from the start of possession sought to be recovered to be within the purview of unlawful detainer. Mere tolerance always carries with it "permission" and not merely silence or inaction for silence or inaction is negligence, not tolerance./2 In addition, plaintiff must also show that the supposed acts of tolerance have been present right from the very start of the possessionKfrom entry to the property. 9therwise, if the possession was unlawful from the start, an action for unlawful detainer would be an improper remedy. /& #otably, no mention was made in the complaint of how entry by respondents was effected or how and when dispossession started. #either was there any evidence showing such details.#avvphi# In any event, petitioner has some other recourse. >e may pursue recovering possession of his property by filing an accion pu'liciana, which is a plenary action intended to recover the better right to possessB or an accion reivindicatoria, a suit to recover ownership of real property. De stress, however, that the pronouncement in this case as to the ownership of the land should be regarded as merely provisional and, therefore, would not bar or pre4udice an action between the same parties involving title to the land. %0 D>-!-)9!-, premises considered, the petition is .-#I-.. (he C" .ecision dated September /2, %006 and !esolution dated "pril /$, %00$ are "))I!M-. 1G.R. No. 152152 : A3435t 25, 20106 !A CAM%ANA DE)E!O%MENT COR%ORATION, %ETITIONER, )S. ART"RO !EDESMA, .ON. J"DGE ESTRE!!A T. ESTRADA, IN .ER CA%ACIT* AS %RESIDING J"DGE, REGIONA! TRIA! CO"RT, $RANC. 83, #"EZON CIT*, AND T.E .ON. CO"RT O& A%%EA!S, RES%ONDENTS. DECISION %ERA!TA, J.: This resolves the *etition for #ertiorari under Rule 0- of the Rules of "ourt, prayin2 that the ResolutionE1F of the "ourt of #ppeals $"#%, dated ?ebruary 1,, 2002, orderin2 the issuance of a writ of preli.inary in>unction, and its ResolutionE2F dated /une 2!, 2002 denyin2 petitionerIs .otion for reconsideration, be declared null and void ab initio( The antecedent facts are as follows( *etitioner filed an e>ect.ent case with the etropolitan Trial "ourt $ eT"% a2ainst private respondent 9edes.a, alle2in2 that despite e<piration of the contract of lease e<ecuted between the. and de.ands to vacate sub>ect pre.ises and pay rentals therefor, the latter failed to co.ply with such de.ands( *rivate respondent countered in his #nswer that he had paid the rentals over sub>ect pre.ises and petitioner no lon2er had the ri2ht to possess the property as it had been foreclosed by the Develop.ent 3ank of the *hilippines $D3*%( *rivate respondent further pointed out that sub>ect pre.ises had in fact been in the possession of the D3* since arch or #pril of 1997, so since that ti.e, it was with the D3* that he .ade arran2e.ents for his continued occupation of the sub>ect pre.ises( The eT" then rendered >ud2.ent in favor of petitioner, orderin2 private respondent to surrender possession of sub>ect pre.ises to petitioner( *rivate respondent appealed to the Re2ional Trial "ourt $RT"%, and to stay e<ecution of said >ud2.ent, private respondent filed a supersedeas bond with the eT"( The RT" affir.ed the eT" >ud2.ent( *etitioner then .oved for the i..ediate e<ecution of the RT" Decision, which .otion was 2ranted by the RT"( eanwhile, private respondent elevated the case to the "# via a petition for review on certiorari with prayer for the issuance of a te.porary restrainin2 order or writ of preli.inary in>unction( # te.porary restrainin2 order was issued by the "#, effectively stayin2 i.ple.entation of the writ of e<ecution issued by the RT"( 8ventually, the "# also issued a writ of preli.inary in>unction per Resolution dated ?ebruary 1,, 2002( 6n >ustification of the issuance of said writ, the "# stated in said Resolution thatB

3ased on the evidence before =s, 7e are convinced that the e<ecution of the assailed decision of the RT" at this sta2e will probably cause in>ustice to the petitioner Eherein private respondentF( 7e cannot i2nore Our rulin2 in "#&'R "C +o( ,1!-0 which had already attained finality( The facts on hand show that the D3* is the present owner of the leased pre.ises( The only person who can lawfully e>ect an unwelco.e tenant fro. the leased pre.ises is the owner thereof or persons derivin2 ri2hts fro. said owner, of which private respondent Eherein petitionerF, in its Opposition to the present .otion, does not pretend to be( "ontrary to the stand of the respondent, the petitioner is not estopped fro. :uestionin2 the title of respondent over the leased pre.ises as the rule on estoppel a2ainst tenants is sub>ect to a :ualification( 6t does not apply if the landlordIs title has e<pired, or has been conveyed to another, or has been defeated by a title para.ount, subse:uent to the co..ence.ent of lessor&lessee relationship( 6n other words, if there was a chan2e in the nature of the title of the landlord durin2 the subsistence of the lease, then the presu.ption does not apply(

*etitionerIs .otion for reconsideration of said Resolution was denied on /une 2!, 2002( Thus, petitioner filed the present petition for certiorari seekin2 the annul.ent of the afore.entioned "# Resolutions( The issues boil down to whether the "# co..itted 2rave abuse of discretion a.ountin2 to lack or e<cess of >urisdiction when it ordered the issuance of a writ of preli.inary in>unction to stay the i..ediate e<ecution of the RT" >ud2.ent and whether .anda.us lies to co.pel respondent RT" /ud2e to issue a writ of e<ecution( The "ourt finds the petition un.eritorious( ?or the "ourt to issue a writ of certiorari a2ainst the "#, it is incu.bent upon petitioner to show that said lower court co..itted 2rave abuse of discretion( 6n $uasha %ncheta Pe&'a ( )olasco *aw +ffice v. ,pecial ,i-th Division #ourt of %ppeals,E,F the "ourt stated thatB

Rules re:uire is that the act co.plained of be probably in violation of the ri2hts of the applicant( =nder the Rules, probability is enou2h basis for in>unction to issue as a provisional re.edy( < < < E10F 6n the afore&:uoted case, the "ourt reiterated that when e<i2encies in the case warrant it, the appellate court .ay stay the writ of e<ecution issued by the RT" in an action for e>ect.ent if there are circu.stances necessitatin2 such action( #n e<a.ple of such e<ceptional circu.stance can be seen in*aurel v. %balos(E11F Therein, a defendant was ordered by the trial court to vacate the pre.ises of the disputed property and return possession thereof to the plaintiffs, but while the e>ect.ent case was on appeal, a >ud2.ent was pro.ul2ated in a separate case where the sale of the property to said plaintiffs was declared null and void, .akin2 the plaintiffsI ri2ht to possess the disputed property inconclusive( The "ourt ruled in said case thatB

7here supervenin2 events $occurrin2 subse:uent to the >ud2.ent% brin2 about a .aterial chan2e in the situation of the parties which .akes the e<ecution ine:uitable, or :9ere t9ere 85 ,o co;<e==8,4 3r4e,c> 7or t9e e?ec3t8o, bec+35e 8t 85 ,ot @35t878e- b> t9e <reA+8=8,4 c8rc3;5t+,ce5, t9e co3rt ;+> 5t+> 8;;e-8+te e?ec3t8o, o7 t9e @3-4;e,t (E12F 3ased on the fore2oin2 earlier rulin2 in *aurel,E1,F the "ourt also considered it >ust and e:uitable to stay the e<ecution of the RT" >ud2.ent in an e>ect.ent case a2ainst the "ity of +a2a, statin2 thatB

'rave abuse of discretion .eans a capricious and whi.sical e<ercise of >ud2.ent as is e:uivalent to lack of >urisdiction( Mere +b35e o7 -85cret8o, 85 ,ot e,o349A it .ust be so 2rave as when the power is e<ercised in an arbitrary or despotic .anner by reason of passion or personal hostility, and .ust be so patent and so 2ross as to a.ount to an evasion of a positive duty or to a virtual refusal to perfor. the duty en>oined or to act at all in conte.plation or law( E1F # showin2 of such 2rave abuse of discretion is sorely wantin2 in this case( 6t is true that )ection 21, Rule 70 of the Rules of "ourt provides that 4EtFhe >ud2.ent of the Re2ional Trial "ourt a2ainst the defendant shall be i..ediately e<ecutory, without pre>udice to a further appeal that .ay be taken therefro.(4 5owever, the "ourt ruled in .enedicto v. #ourt of %ppealsE-F that 4on appeal the appellate court .ay stay the said writ should circu.stances so re:uire( < < < even if RT" >ud2.ents in unlawful detainer cases are i..ediately e<ecutory, preli.inary in>unction .ay still be 2ranted(4 "itin2 %magan v. /arayagE0F and 0da. de *egaspi v. %venda&'o,E7F the "ourt e<plained in.enedicto thatB

+eedless to reiterate, 2rave and irreparable in>ury will be inflicted on the "ity of +a2a by the i..ediate e<ecution of the /une 20, 200- RT" Decision( < < < the people of +a2a would be deprived of access to basic social services( 6t should not be for2otten that the land sub>ect of the e>ect.ent case houses 2overn.ent offices which perfor. i.portant functions vital to the orderly operation of the local 2overn.ent( < < <E11F 6n the present case, there also e<ists a .aterial chan2e in the situation of the parties( The "# properly took into serious consideration the fact that in its Decision in "#&'(R( "C +o( ,1!-0 entitled *a #ampana Food Products 1nc. v. Development .an2 of the Philippines which has beco.e final and e<ecutory, 8t or-ere- 9ere8, <et8t8o,er, 7or;er=> B,o:, +5 !+ C+;<+,+ &oo- %ro-3ct5, I,c., to 53rre,-er <o55e558o, o7 53b@ect <ro<ert8e5 to t9e DeAe=o<;e,t $+,B o7 t9e %98=8<<8,e5 ( 8vidently, a serious cloud of doubt has been cast on petitionerIs ri2ht of possession, .akin2 it :uestionable whether the RT" Decision, orderin2 private respondent to surrender possession of sub>ect pre.ises to petitioner, should be i..ediately i.ple.ented( Therefore, the "# did not 2ravely abuse its discretion in this caseA rather, it acted prudently when it stayed e<ecution of the RT" Decision until such ti.e that a final resolution of the .ain case is reached( *etitionerIs contention, that it was i.proper for the "# to have 2ranted private respondentIs .otion to consider the supersedeas bond it posted with the etropolitan Trial "ourt as sufficient to cover the bond re:uired for the issuance of the writ of preli.inary in>unction, is likewise incorrect( *etitioner ar2ues that, 4said supersedeas bond is posted solely and pri.arily to answer for a specific purpose which is for the pay.ent of unpaid rentals accruin2 up to the final >ud2.ent( This cannot be held answerable for da.a2es to petitioner should it later be found out that the private respondent is not entitled to the issuance Eof a writ of preli.inary in>unctionF(4 E1-F +ote that )ection 1$b%, Rule -! of the Rules of "ourt provides thatB

7here the action, therefore, is one of ille2al detainer, as distin2uished fro. one of forcible entry, and the ri2ht of the plaintiff to recover the pre.ises is seriously placed in issue in a proper >udicial proceedin2, it is .ore e:uitable and >ust and less productive of confusion and disturbance of physical possession, with all its conco.itant inconvenience and e<penses( ?or the "ourt in which the issue of le2al possession, whether involvin2 ownership or not, is brou2ht to restrain, should a petition for preli.inary in>unction be filed with it, the effects of any order or decision in the unlawful detainer case in order to await the final >ud2.ent in the .ore substantive case involvin2 le2al possession or ownership( < < <E!F oreover, the "ourt also stressed in #ity of )aga v. %suncion E9F thatB

#s a rule, the issuance of a preli.inary in>unction rests entirely within the discretion of the court takin2 co2ni;ance of the case and will not be interfered with, e<cept in cases of .anifest abuse( < < < <<<< < < < 3e it noted that for a writ of preli.inary in>unction to be issued, the Rules of "ourt do not re:uire that the act co.plained of be in clear violation of the ri2hts of the applicant( 6ndeed, what the

$b% =nless e<e.pted by the court, the applicant files with the court where the action or proceedin2 is pendin2, a bond e<ecuted to the party or person en>oined, in an a.ount to be fi<ed by the court, to the effect that the applicant will pay to such party or person all da.a2es which he .ay sustain by reason of the in>unction or te.porary restrainin2 order if the court should finally decide that the

applicant was not entitled thereto( in>unction shall be issuedA

=pon approval of the re:uisite bond, a writ of preli.inary

758R8?OR8, pre.ises considered, >ud2.ent is hereby rendered in favor of the plaintiff and a2ainst the defendant orderin2 the latter as followsBchanroblesvirtualawlibrary $a% to vacate the pre.ises located at 'round ?loor, D "#, 1111 'en( 9una )t(, 8r.ita, surrender possession thereof to plaintiffA anilaA and

5owever, in 3ualam #onstruction and Dev4t. #orp. v. #ourt of %ppeals ,E10F the "ourt e<pounded on what da.a2es .ay be recovered in actions for forcible entry or unlawful detainer, to witB

#s to da.a2es, 7e have on several occasions ruled that since the only issue raised in forcible entry or unlawful detainer cases is that of ri2htful physical possession, the 4da.a2es4 recoverable in these cases are those which the plaintiff could have sustained as a .ere possessor, i.e(, those caused by the loss of the use and occupation of the property, and not the da.a2es which he .ay have suffered but which have no direct relation to his loss of .aterial possession( < < < )i.ply put, 4da.a2es4 in the conte<t of )ection ! of Rule 70 Enow )ection 19, Rule 70 of the Rules of "ourtF is li.ited to 4rent4 or 4fair rental value4 for the use and occupation of the property( E17F )ince the only da.a2es that petitioner .ay be entitled to in an action for unlawful detainer are those arisin2 fro. its loss of the use or occupation of sub>ect pre.ises, the only da.a2es petitioner can clai. by reason of the stay of e<ecution of the RT" >ud2.ent is also only for the 4rent4 or 4fair rental value4 for the property in :uestion( Therefore, the "# did not err in considerin2 the supersedeasbond filed with the T", which answers for unpaid rentals, as sufficient bond for the issuance of a writ of preli.inary in>unction( 6n li2ht of the fore2oin2, it is :uite clear that there is no reason to co.pel the RT" to i..ediately i.ple.ent the writ of e<ecution in this case( .ERE&ORE, the petition is DISMISSED for lack of .erit( The Resolutions of the "ourt of #ppeals, dated ?ebruary 1,, 2002 and /une 2!, 2002, respectively, in "#&'(R( )* +o( 0000!, are A&&IRMED

$b% to pay plaintiff the su. of *hp1-,211(!0 representin2 his arrears in rentals fro. ?ebruary 200, to /uly 200, at *hp7,-,-(,0 a .onth plus the further su. of *hp7,-,-(,0 a .onth as reasonable value for the continued use and occupation of the pre.ises startin2 #u2ust 200, until the sa.e is finally vacated and possession thereof is turn&over to plaintiffA $c% to pay the plaintiff the su. of *hp20,000 as attorneys feesA and $d% to pay the costs of suit( )O ORD8R8D( On /uly 12, 2001, the plaintiffs counsel filed a .otion for i..ediate e<ecution, prayin2 that a writ of e<ecution be issued 4for the i..ediate e<ecution of the aforesaid /ud2.ent(4 The plaintiff cited )ection 19, Rule 70 of the Rules of "ourt as basis for its .otion( 2chanroblesvirtuallawlibrary 6n his order dated /uly 11, 2001, however, respondent /ud2e denied the .otion for i..ediate e<ecution,,cra1aw statin2Bchanroblesvirtualawlibrary # +otice of #ppeal dated /uly 9, 2001, havin2 been seasonably filed by counsel for the defendant, let the records of the above&captioned case be, as it is hereby ordered, elevated to the Re2ional Trial "ourt of anila for appropriate proceedin2s and disposition(

A.M. No. MTJC05C1580 : October D, 2010 1&or;er=> OCA I%I No. 02C1D08CMTJ6 !O"RDES $. &ERRER +,- %ROS%ERIDAD M. ARANDEZ, #omplainants, v. J"DGE ROMEO A. RA$ACA, Metro<o=8t+, Tr8+= Co3rt, $r+,c9 25, M+,8=+, Respondent.cralaw DECISION $ERSAMIN, J.: This ad.inistrative case char2es 5on( Ro.eo #( Rabaca, then the *residin2 /ud2e of 3ranch 2- of the etropolitan Trial "ourt of anila $ eT"%, with i2norance of the law, disre2ard of the law, dereliction of duty, knowin2ly renderin2 an un>ust interlocutory order, and violation of the "ode of "onduct for 'overn.ent Officials( The co.plainants were the *resident and the 8<ecutive Director of the plaintiff in "ivil "ase +o( 170,91&"C of the eT", an e>ect.ent suit entitled Doun2 7o.ens "hristian #ssociation, 6nc( v( "onrado "ano( #fter trial, "ivil "ase +o( 170,91&"C was decided on /une 22, 2001 by respondent /ud2e,1cra1aw who disposed as followsBchanroblesvirtualawlibrary

6n view thereof, no .ore action shall be taken on the the plaintiff thru counsel( )O ORD8R8D(

otion for 8<ecution dated /uly !, 2001 filed by

#ccordin2 to the co.plainants, their counsel talked with respondent /ud2e about the .atter( #lle2edly, respondent /ud2e told their counsel that 4if you think the court is wron2, file a .otion for reconsideration(4 7ith that, the plaintiff filed a .otion for reconsideration, which respondent /ud2e nonetheless denied in his order dated /uly 2!, 2001,1cra1aw thuswiseBchanroblesvirtualawlibrary "onsiderin2 that the "ourt has already 2iven due course to the appeal of the defendant which was perfected within the re2le.entary period, no .ore action will be taken on the otion for Reconsideration dated /uly 19, 2001 filed by the plaintiff thru counsel( The 3ranch "lerk of "ourt is hereby directed to i..ediately forward the records of this case to the Re2ional Trial "ourt, anila( )O ORD8R8D(

The co.plainants averred that respondent /ud2es denial of their .otions had rendered their victory inutile, and had unfairly deprived the plaintiff of the possession of the pre.ises( They further averred that respondent /ud2es refusal to perfor. an act .andated by the Rules of "ourt had 2iven undue advanta2e to the defendant to the plaintiffs da.a2e and pre>udice( The "ourt re:uired respondent /ud2e to co..ent on the ad.inistrative co.plaint a2ainst hi.( 6n his co..ent dated )epte.ber 10, 2001,-cra1aw respondent /ud2e denied the char2es( 5e e<plained that he had honestly thou2ht that his court had lost >urisdiction over the case pursuant to the provision of )ection 9, Rule 11 of the Rules of "ourt $which provides that 4in appeals by notice of appeal, the court loses >urisdiction over the case upon the perfection of the appeals filed in due ti.e and the e<piration of the ti.e to appeal of the other parties4% once he had 2iven due course to the defendants notice of appeal( 5e clai.ed that he had issued the orders in 2ood faith and with no .alice after a fair and i.partial evaluation of the facts, applicable rules, and >urisprudenceA and that if he had thereby co..itted lapses in the issuance of the orders, his doin2 so should be considered as error of >ud2.ent on his part( 5e lastly insisted that he did not know personally the parties in "ivil "ase +o( 170,91&"C, and had absolutely no reason to 2ive undue favor or advanta2e to the defendantA that the co.plainants did not sub.it evidence to show that the orders had been issued for a consideration, .aterial or otherwise, or that his issuance of the orders had been .otivated by ill&will or bad faith( 6n their reply dated )epte.ber 22, 2001,0cra1aw the co.plainants contended that respondent /ud2e e<hibited his i2norance of the law and procedure in relyin2 on )ection 9, Rule 11 of the Rules of "ourt which referred to appeals fro. the Re2ional Trial "ourtA that Rule 10, which contained provisions on appeal fro. the unicipal Trial "ourts to the Re2ional Trial "ourts, and which provided in its )ection 1 that the perfection of the appeal and the effect of such perfection should be 2overned by the provisions of )ection 9 of Rule 11, concerned appeals by notice of appeal in 2eneralA and that instead, the applicable rule should be )ection 19, Rule 70 of the Rules of "ourt( The co.plainants pointed out that respondent /ud2e apparently did not know that appeal in forcible entry and detainer cases was not perfected by the .ere filin2 of a notice of appeal $as in ordinary actions% but by filin2 of a notice of appeal and a sufficient supersedeas bond approved by the trial >ud2e e<ecuted to the plaintiff to pay the rents, da.a2es and costs accruin2 down to the ti.e of the >ud2.ent appealed fro.( They asserted that respondent /ud2es invocation of 2ood faith and error of >ud2.ent did not absolve hi. of liability, because he had 2rossly ne2lected his duties .andated by law by failin2 and refusin2 to act on their .otion for i..ediate e<ecution and .otion for reconsideration and by 2ivin2 due course to the appeal despite no supersedeas bond havin2 been filed and approved by the trial court( 6n his .e.orandu. dated /anuary 1,, 200-,7cra1aw then "ourt #d.inistrator *resbitero /( Celasco, /r(, now #ssociate /ustice of the "ourt, reco..ended that the ad.inistrative co.plaint a2ainst respondent /ud2e be re&docketed as a re2ular ad.inistrative .atterA and that respondent /ud2e be fined in the a.ount of *-,000(00 with warnin2 that a repetition of the sa.e or si.ilar act would be dealt with .ore severely, based on an evaluation of the char2es, as followsBchanroblesvirtualawlibrary 8C#9=#T6O+B 7e a2ree with the co.plainants that respondent erred when he did not act on co.plainants .otion for i..ediate e<ecution( )ection 19, Rule 70 of the 1997 Revised Rules on "ivil *rocedure providesBchanroblesvirtualawlibrary

4)8"( 19( 6f >ud2.ent is rendered a2ainst the defendant, e<ecution shall issue immediately upon .otion, unless an appeal has been perfected and the defendant to stay e-ecution files a supersedeas bond, approved by the unicipal Trial "ourt and e<ecuted in favor of the plaintiff to pay the rents, da.a2es, and costs accruin2 down to the ti.e of the >ud2.ent appealed fro., and unless, durin2 the pendency of the appeal, he deposits with the appellate court the a.ount of rent due fro. ti.e to ti.e under the contract, if any, as deter.ined by the >ud2.ent of the unicipal Trial "ourt( JJJJ JJJJ JJJJ(4 6t is clear fro. the fore2oin2 that the perfection of an appeal by itself is not sufficient to stay the e<ecution of the >ud2.ent in an e>ect.ent case( The losin2 party should likewise file a supersedeas bond e<ecuted in favor of the plaintiff to answer for rents, da.a2es and costs, and, if the >ud2.ent of the court re:uires it, he should likewise deposit the a.ount of the rent before the appellate court fro. the ti.e durin2 the pendency of the appeal( +therwise e-ecution becomes ministerial and imperative ( $Philippine 3olding #orporation vs. 0alen5uela 678 ,#R% 876 as cited in 3ualam #onstruction and Development #orporation vs. #ourt of %ppeals 968 ,#R% :69 :9:;.cralaw 6n the case at bar, defendant seasonably filed his +otice of #ppeal dated 9 /uly 2001 on 1, /uly 2001A he however failed to file any supersedeas bond( Prior to the filin2 of such notice of appeal, .ore specifically on 12 /uly 2001, co.plainants have already filed their otion for 8<ecution dated ! /uly 2001( 6nstead of actin2 on the otion for 8<ecution, respondent /ud2e Rabaca 2ave due course to the appeal in an Order dated 11 /uly 2001 and directed his 3ranch "lerk of "ourt to elevate the records of the case to the Re2ional Trial "ourt $RT"%( The 3ranch "lerk of "ourt however failed to forward the records to the RT"( This fact is clear fro. /ud2e Rabacas Order dated 2! /uly 2001 wherein he directed the 3ranch "lerk of "ourt to forward the records of the case to the anila Re2ional Trial "ourt i..ediately( ?ro. the fore2oin2, it is clear that when the co.plainant .oved for the i..ediate e<ecution of /ud2e Rabacas decision, the latter still had >urisdiction over the case( 5e therefore clearly erred when he refused to act on the otion for 8<ecution( The relevant :uestion that we should resolve however is whether such error is an error of >ud2.ent or an error a.ountin2 to inco.petence that calls for ad.inistrative discipline( /ud2e Rabaca clai.s that he refused to act on the co.plainants otion for e<ecution because he honestly thou2ht that when he 2ave due course to the defendants appeal which was seasonably filed, and ordered the elevation of the records to the appellate court, his court already lost >urisdiction over the case(( 6n .akin2 his rulin2, respondent asserts he relied on the provisions of )ection 9, Rule 11 of the Rules of "ourt( This provision reads as followsBchanroblesvirtualawlibrary 6n appeals by notice of appeal, the court loses >urisdiction over the case upon the perfection of the appeals filed in due ti.e and the e<piration of the ti.e to appeal of the other parties( 5e likewise alle2edly relied on the rulin2 of the "ourt in %dministrative /atter +#% 1P1 )o. 7<!6=6<! />?@ ,usana ?oaAuin 0da. De %gregado vs. ?udge >helma .unyi!/edina /e>? wherein the "ourt said that& Respondent /ud2e is correct in sayin2 that she had lost >urisdiction to entertain the .otion for e<ecution after the perfection of the appeal and after she issued an order to trans.it the records of the case to the appellate court for review( The facts of the case a2ainst /ud2e 3unyi& edina are however different fro. those prevailin2 in the instant case( 6n the edina case, the fifteen $1-% day period within which to perfect the appeal had already lapsed before the co.plainant therein .oved for the e<ecution of the e<ecution >ud2.ent(

"learly therefore, appeal had already been perfected( 6n the instant case, althou2h the defendant had filed his appeal, the period to appeal had not yet lapsed since the plaintiff still had his own period to appeal fro. the >ud2.ent and such period had not yet lapsed( The provision relied upon by >ud2e Rabaca, .ore specifically, )ection 9, Rule 11 of the Rules of "ourt, clearly states that, 46n appeals by notice of appeal, the court loses >urisdiction over the case upon perfection of the appeals filed on due ti.e and the e<piration of the ti.e to appeal of the other parties(4 oreover and .ore i.portantly, the herein co.plainants filed their otion for 8<ecution even before the defendant had filed his +otice of #ppeal( )uch .otion was therefore still well within the >urisdiction of the lower court( 6t is basic rule in e>ect.ent cases that the e<ecution of >ud2.ent in favor of the plaintiff is a .atter of ri2ht and .andatory( This has been the consistent rulin2 of the "ourt in a nu.ber of cases involvin2 the sa.e issue posed before the respondent >ud2e( Respondent /ud2e is e<pected to know this and his >ustification of erroneous application of the law, althou2h .iti2atin2, could not e<culpate hi. fro. liability( 7e a2ree with and adopt the evaluation of the "ourt #d.inistrator( 6ndeed, respondent /ud2e should have 2ranted the plaintiffs .otion for i..ediate e<ecution considerin2 that the defendant did not file the sufficient supersedeas bond despite havin2 appealed( 'rantin2 the plaintiffs .otion for i..ediate e<ecution beca.e his .inisterial duty upon the defendants failure to file the sufficient supersedeas bond( )ection 19, Rule 70, of the Rules of "ourt clearly i.poses such duty, vi;Bchanroblesvirtualawlibrary )ection 19( 6..ediate e<ecution of >ud2.entA how to stay sa.e( 6f >ud2.ent is rendered a2ainst the defendant, e<ecution shall issue i..ediately upon .otion, unless an appeal has been perfected and the defendant to stay e<ecution files a sufficient supersedeas bond, approved by the unicipal Trial "ourt and e<ecuted in favor of the plaintiff to pay the rents, da.a2es, and costs accruin2 down to the ti.e of the >ud2.ent appealed fro., and unless, durin2 the pendency of the appeal, he deposits with the appellate court the a.ount of rent due fro. ti.e to ti.e under the contract, if any, as deter.ined by the >ud2.ent of the unicipal Trial "ourt( 6n the absence of a contract, he shall deposit with the Re2ional Trial "ourt the reasonable value of the use and occupation of the pre.ises for the precedin2 .onth or period at the rate deter.ined by the >ud2.ent of the lower court on or before the tenth day of each succeedin2 .onth or period( The supersedeas bond shall be trans.itted by the unicipal Trial "ourt, with the other papers, to the clerk of the Re2ional Trial "ourt to which the action is appealed( <<< Respondent /ud2es e<cuse, that he had lost >urisdiction over the case by virtue of the defendants appeal, was unacceptable in li2ht of the clear and e<plicit te<t of the afore:uoted rule( To be2in with, the perfection of the appeal by the defendant did not forbid the favorable action on the plaintiffs .otion for i..ediate e<ecution( The e<ecution of the decision could not be stayed by the .ere takin2 of the appeal( Only the filin2 of the sufficient supersedeas bond and the deposit with the appellate court of the a.ount of rent due fro. ti.e to ti.e, coupled with the perfection of the appeal, could stay the e<ecution( )econdly, he could not also credibly >ustify his o.ission to act accordin2 to the provision by clai.in2 2ood faith or honest belief, or by assertin2 lack of .alice or bad faith( # rule as clear and e<plicit as )ection 19 could not be .isread or .isapplied, but should be i.ple.ented without evasion or hesitation( To us, 2ood faith, or honest belief, or lack of .alice, or lack of bad faith >ustifies a non& co.pliance only when there is an as&yet unsettled doubt on the .eanin2 or applicability of a rule or le2al provision( 6t was not so herein( #nd, thirdly, 2iven that his court, bein2 vested with ori2inal e<clusive >urisdiction over cases si.ilar to "ivil "ase +o( 170,91&"C, had been assi2ned .any such cases, he was not a trial >ud2e bereft of the pertinent prior e<perience to act on the issue of i..ediate e<ecution, a fact that further e<posed the ab>ect inanity of his e<cuses(

7e a2ree with the co.plainants insistence, therefore, that respondent /ud2es o.ission to apply )ection 19 was ine<cusable( 5e had i2nored the ur2in2 to follow the clear and e<plicit provision of the rule .ade in the plaintiffs .otion for i..ediate e<ecution( 5ad he any 2enuine doubt about his authority to 2rant the .otion for i..ediate e<ecution, as he would have us believe, he could have easily and correctly resolved the doubt by a resort to the Rules of "ourt, which he well knew was the repository of the 2uidelines he was seekin2 for his >udicial action( +either was it relevant that he did not know any of the parties, or that he did not corruptly favor the defendant by his o.ission( 5is .ere failure to perfor. a duty en>oined by the Rules of "ourt sufficed to render hi. ad.inistratively accountable( This case is an opportune occasion to re.ind >ud2es of the first level courts to adhere always to the .andate under )ection 19, Rule 70, of the Rules of "ourt to issue writs of e<ecution upon .otion of the plaintiffs in actions for forcible entry or unlawful detainer when the defendant has appealed but has not filed a sufficient supersedeas bond( The su..ary nature of the special civil action under Rule 70 and the purpose underlyin2 the .andate for an i..ediate e<ecution, which is to prevent the plaintiffs fro. bein2 further deprived of their ri2htful possession, should always be borne in .ind( The reco..ended penalty of *-,000(00 with warnin2 that a repetition of the sa.e or si.ilar act would be dealt with .ore severely is also correct( The "ourt #d.inistrator rationali;ed the reco..endation of the penalty thuswiseBchanroblesvirtualawlibrary =nder #( ( +o( 01&!&10&)", 'ross 62norance of the 9aw or *rocedure is classified as serious offense for which the i.posable penalty ran2es fro. a fine to dis.issal( 5owever, we find respondents acts not in2rained with .alice or bad faith( 6t is a .atter of public policy that in the absence of fraud, dishonesty or corrupt .otive, the acts of a >ud2e in his >udicial capacity are not sub>ect to disciplinary action even thou2h such acts are erroneous( 6n Domingo vs. ?udge Pagayatan %./. )o. R>?!7<!6B=6 67 ?une 977<, the penalty of fine in the a.ount of five thousand pesos was dee.ed sufficient where it was held that respondents lack of .alice or bad faith frees hi. fro. ad.inistrative liability but not for 2ross i2norance of the law( 7e concur with the rationali;ation of the "ourt #d.inistrator( Cerily, even if respondent /ud2es o.ission would have easily a.ounted to 2ross i2norance of the law and procedure, a serious offense under )ection !,!cra1aw Rule 110, of the Rules of "ourt, as a.ended, the fact that the co.plainants did not establish that .alice or bad faith i.pelled his o.ission to act, or that fraud, dishonesty, or a corrupt .otive attended his o.ission to act de.ands a down2radin2 of the liability( 6n the absence of any showin2 that he had been held 2uilty of any other ad.inistrative offense,9cra1aw and without our attention bein2 called to other circu.stances that .i2ht de.onstrate respondent /ud2es dark .otives for his inaction, we should find and consider the reco..ended penalty of *-,000(00 with warnin2 that a repetition of the sa.e or si.ilar act would be dealt with .ore severely to be co..ensurate to the offense( 10chanroblesvirtuallawlibrary .ERE&ORE, we find respondent J"DGE ROMEO A. RA$ACA, *residin2 /ud2e of 3ranch 2-, etropolitan Trial "ourt, in anila 2uilty of i2norance of the law and procedure, and, accordin2ly, i.pose upon hi. a fine of *-,000(00 with warnin2 that a repetition of the sa.e or si.ilar act would be dealt with .ore severely

CONTEMPT (he courts and other tribunals vested with the power of contempt must e7ercise the po er for contempt for purposes that are impersonal, because that power is intended as a safeguard not for the 4udges as persons but for the functions that they e'ercise. It must be borne in mind in this regard that strict compliance with the aforecited guidelines is mandatory considering that proceedings against a person alleged to be guilty of contempt, as in this case, are commonly treated as criminal in nature. (he essence of a courtTs contempt powers stems from a much7needed remedy for the violation of lawful court orders and for maintaining decorum during proceedings, as an essential au'iliary to the due administration of 4ustice G.R. No. 123H21 Se1(e:7e0 6, 1333 SEC*RITIES AND EXC2ANGE COMMISSION C2AIRMAN PERFECTO R. YASAY, JR., ASSOCIATE COMMISSIONERS FE ELOISA C. GLORIA, EDIJER MARTINE5 "n ROSALINDA *. CASIG*RAN, petitioners, vs. MAN*EL D. RECTO, PELAGIO T. RICALDE "n CESAR P. MANALAYSAY, respondents.

''' ''' ''' EI-D-. in this light "tty. Cesar Manalaysay, Manuel .. !ecto and "tty. :elagio (. !icalde are hereby .-C+"!-. ;,I+(J 9) C9#(-M:( and are correspondingly 9!.-!-. to pay a fine of (-# (>9,S"#. @:/0,000.00A :esos each upon finality of this 9rder for willfully disobeying and disregarding the <uly 2, /&&6 9rder of this Commission. "tty. Cesar Manalaysay is li?ewise 3"!!-. from practicing his law profession before this commission for a period of si'ty @60A days from date hereof and Mr. !ecto and "tty. !icalde are, by this 9!.-!, prohibited and barred from acting as :residentLChairman and Secretary respectively of Interport !esources, Inc. within the same period. (his 9rder shall be immediately e'ecutory unless otherwise restrained by a court of competent 4urisdiction. S9 9!.-!-.. -.S", ;reenhills, Mandaluyong City. @sLtA :-!)-C(9 !. J"S"J, <!. Chairman @sLtA )- -+9IS" C. ;+9!I"

PARDO, J!< (he case before the Court is an appeal from a decision of the Court of "ppeals 1 setting aside the order of the Securities and -'change Commission @S-CA 2 declaring respondents guilty of contempt for disobeying a temporary restraining order issued to respondents to desist from holding a stoc?holders meeting of the Interport !esources Corporation. (he facts are as follows8 9n <une %2, /&&6, S-C Chairman Jasay upon re uest of certain stoc?holders of Interport !esources Corporation, directed respondent !icalde to submit to the S-C a list of stoc?holders and to set a definite time and place for the validation of pro'ies and nominations for directors of the firm. 9n the same date, <une %2, /&&6, the S-C issued a temporary restraining order @(!9A en4oining the Interport !esources Corporation from holding the <uly &, /&&6 scheduled annual meeting of the stoc?holders. #otwithstanding the S-C5s (!9, the stoc?holders proceeded with the meeting on <uly &, /&&6, presided over by respondent Manalaysay. 9n <uly /0, /&&6, the S-C declared the stoc?holders meeting of Interport !esources Corporation held on <uly &, /&&6, null and void and directed respondents to appear before the S-C on <uly /1, /&&6, at 3800 p.m., to show cause why no disciplinary action should be ta?en against them or why they should not be cited in contempt. "t the hearing on <uly /1, /&&6, respondent Manalaysay uestioned the validity of the (!9 as well as the contempt proceedings in light of the (!9 issued by the Court of "ppeals restraining the S-C from enforcing its (!9. 3 "fter the hearing, on <uly /1, /&&6, the S-C issued an order stating8

"ssociate Commissioner @sLtA -.I<-! ". M"!(I#-H "ssociate Commissioner 4 In due time, respondents appealed from the aforesaid order to the Court of "ppeals. "fter due proceedings, on "pril /6, /&&$, the Court of "ppeals promulgated its decision reversing and setting aside the S-C order declaring respondents guilty of contempt. (he dispositive portion reads8 D>-!-)9!-, premises considered, respondents5 9rder dated <uly /1, /&&6, is hereby !-E-!S-. and S-( "SI.-. (he cash bond of :10,000.00 may be withdrawn by petitioners. S9 9!.-!-.. @sLtA "!(-MI9 ;. (,M,-!9 "ssociate <ustice @sLtA "!(-M9# .. +,#" "ssociate <ustice

@sLtA >-C(9! +. >9)I+-Y" "ssociate <ustice H 9n May %, /&&$, petitioners filed a motion for reconsideration of the decision. >owever, on <une //, /&&$, the Court of "ppeals denied the motion. >ence, this appeal. 9n September /0, /&&$, the Court re uired respondents to comment on the petition within ten @/0A days from notice. $ 9n 9ctober $, /&&$, respondents filed their comment. 6 In the main, respondents submit that contempt is criminal in character and their e'oneration from a charge of contempt amounts to an ac uittal from which an appeal would not lie. % "t issue in this petition is whether or not the Court of "ppeals erred, as a matter of law, in setting aside the order of the S-C finding respondents guilty of contempt for disobeying its temporary restraining order to desist from holding the annual stoc?holders meeting of the Interport !esources Corporation scheduled on <uly &, /&&6. De agree with respondents that the charge of contempt parta?es of the nature of a criminal offense. 3 (he e'oneration of the contemner from the charge amounts to an ac uittal from which an appeal would not lie. " distinction is made between a civil and criminal contempt. Civil contempt is the failure to do something ordered by a court to be done for the benefit of a party. " criminal contempt is any conduct directed against the authority or dignity of the court. 10 :etitioners argue that the contempt committed by respondents was civil in nature, as the temporary restraining order the S-C issued was for the benefit of a party to a case. (he contention is untenable. "Civil contempt proceedings are generally held to be remedial and civil in their natureB that is, they are proceedings for the enforcement of some duty, and essentially a remedy for coercing a person to do the thing re uired." 11 "In general, civil contempt proceedings should be instituted by an aggrieved party, or his successor, or someone who has a pecuniary interest in the right to be protected." 12 If the contempt is initiated by the court or tribunal e'ercising the power to punish a given contempt, it is criminal in nature, and the proceedings are to be conducted in accordance with the principles and rules applicable to criminal cases. (he State is the real prosecutor. 13 "(he real character of the proceedings in contempt cases is to be determined by the relief sought or by the dominant purpose. (he proceedings are to be regarded as criminal when the purpose is primarily punishment, and civil when the purpose is primarily compensatory or remedial." 14 "3ut whether the first or the second, contempt is still a criminal proceeding in which ac uittal, for instance, is a bar to a second prosecution. (he distinction is for the purpose only of determining the character of punishment to be administered." 1H In this case, the contempt is not civil in nature, but criminal, imposed to vindicate the dignity and power of the CommissionB hence, as in criminal proceedings, an appeal would not lie from the order of dismissal of, or an e'oneration from, a charge of contempt." 1$ "t any rate, the S-C order directing respondents to show cause why they should not be cited in contempt was highly improper. (he Court of "ppeals issued on <uly 2, /&&6, a temporary restraining order against the order of the S-C of <une %2, /&&6 directing the Interport !esources Corporation to desist from holding the stoc?holders5 meeting on <uly

&, /&&6. Contrary to the view of petitioners, the effect of the temporary restraining order of the Court of "ppeals directing the S-C to desist from enforcing its own (!9 was to allow such meeting to proceed as scheduled. More, the Court of "ppeals in its final decision nullified the S-C5s order. 16 >ence, there was no willful disobedience to a lawful order of the S-C. !espondents were not guilty of contempt. Dhile the S-C is vested with the power to punish for contempt, 1% the salutary rule is that the power to punish for contempt must be e'ercised on the preservative, not vindictive principle, 13 and on the corrective and not retaliatory idea of punishment. 20 (he courts and other tribunals vested with the power of contempt must e'ercise the power to punish for contempt for purposes that are impersonal, because that power is intended as a safeguard not for the 4udges as persons but for the functions that they e'ercise. 21 In this case, the S-C issued the citation for contempt sua sponte. (here was no charge filed by a private party aggrieved by the acts of respondents. Strictly spea?ing, there was no disobedience to the S-C5s temporary restraining order. (he Court of "ppeals en4oined that order. Conse uently, respondents5 act in proceeding with the scheduled stoc?7holders5 meeting was not contumacious as there was no willful disobedience to an order of the S-C. 22 (he disobedience which the law punishes as constructive contempt implies willfulness. )or, at bottom, contempt is a willful disregard or disobedience. 23 (he S-C was rather hasty in asserting its power to punish for contempt. (he chairman and commissioners of the S-C must e'ercise the power of contempt 4udiciously and sparingly with utmost self7restraint. 24 )inally, the penalty imposed e'ceeded those authori*ed in the powers of the S-C 2H in relation to the /&66 !evised !ules of Court as amended. 2$ If the contempt was committed against a superior court or 4udge, the accused may be fined not e'ceeding thirty thousand pesos @:30,000.00A or imprisoned not more than si' @6A months, or both. (he S-C suspended respondent Manalaysay from the practice of law in the S-C, a power vested e'clusively in the Supreme Court. 26 D>-!-)9!-, the Court hereby .-#I-S the petition for review on certiorari and "))I!MS the decision of the Court of "ppeals in ;"7;.!. S: #o. 6/600, promulgated on "pril /6, /&&$. #$ phi#.n Z(he respondent also abused her contempt powers. If at all, complainant was guilty of indirect contempt and not direct contempt[ .irect contempt is a contentious act done facie curiae and may be punished summarily at the very moment or at the very instance of the commission of the act contumely.

G.R. No. 1H0343

June 21, 2006

J*DGE DOLORES L. ESPAOOL,\ P0e'. .n& Ju &e, Re&.on"- T0."- Cou0(, B0"n,+ 30, D"':"0.P"', C"A.(e,petitioner, vs. ATTY. BENJAMIN S. FORMOSO "n SPO*SES BENITO SEE "n MARLY SEE, respondents. DECISION SANDO>AL9G*TIERRE5, J!# 3efore us is a :etition for !eview on Certiorari assailing the .ecision/ dated September /%, %00/ and !esolution dated #ovember /1, %00/ of the Court of "ppeals in C"7;.!. S: #o. 6161%.

(he facts are8 9n "pril /1, /&&6, Sharcons 3uilders :hilippines, Inc. @SharconsA bought from -vanswinda Morales a piece of land consisting of 33,/30 s uare meters in :aliparan, .asmariPas, Cavite. (he property is covered by (ransfer Certificate of (itle @(C(A #o. (7%$26$& issued in her name by the !egister of .eeds of (rece Martires City. (hus, (C( #o. (7%$26$& in -vanswindaTs name was cancelled and in lieu thereof, (C( #o. (71//66% was issued in the name of Sharcons. >owever, when the latterTs wor?ers tried to fence and ta?e possession of the lot, they were prevented by the careta?er of spouses <oseph and -nri ueta Mapua. (he careta?er claimed that spouses Mapua are the owners of the land. Sharcons verified the status of the title and found that (C( #o. (7/0$/63 was indeed registered in the names of spouses Mapua as early as <uly /3, /&$&. 9n <anuary %1, %000, Sharcons filed with the !egional (rial Court @!(CA, 3ranch &0, .asmariPas, Cavite a complaint for uieting of title, doc?eted as Civil Case #o. %031700. Impleaded as defendants were spouses Mapua, -vanswinda Morales, and the !egister of .eeds of (rece Martires City. In their answer, spouses Mapua alleged, among others, that all the documents relied upon by Sharcons are spurious and falsified. In the course of the proceedings, or on <uly &, %00/, <udge .olores +. -spaPol, petitioner, issued an 9rder stating that 3enito See and Marly See, president and treasurer, respectively, of Sharcons, and its counsel, "tty. 3en4amin )ormoso, respondents, have used a spurious certificate of title and ta' declaration when it @SharconsA filed with the !(C its complaint for uieting of title. Conse uently, petitioner declared respondents guilty of direct contempt of court and ordered their confinement for ten @/0A days in the municipal 4ail of .asmariPas, Cavite. :etitionerTs 9rder is partly reproduced as follows8 )rom the foregoing circumstances, this Court is of the view and so holds that the instant case is a callous and blatant imposition of lies, falsehoods, deceptions, and fraudulent manipulations, through the e'tensive use of falsified documents by the plaintiff corporation and its former counsel, "tty. 3en4amin S. )ormoso, defendant -vanswinda C. Morales and even the ;eodetic -ngineer who connived with this private group on one hand, and some officials and employees of the government agencies responsible for the processing and issuance of spurious or falsified titles, on the other. ,nless these fraudulent operations are put to a complete and drastic halt, the Courts are at the mercy of these unscrupulous people for their own personal gain. ,sing the presumption that whoever is in possession and user of falsified document is the forger thereof @;amido v. Court of "ppeals, %1 SC!" /0/ F/&&1GA, let the appropriate falsification charges be filed against 3enito See and Marly See together with -vanswinda C. Morales. (hus, let a copy of this 9rder be forwarded to the #ational 3ureau of Investigation and the .epartment of <ustice for their appropriate action. "s regards "tty. 3en4amin S. )ormoso, let a copy of this 9rder be forwarded to the 3ar ConfidantTs 9ffice, Supreme Court. Manila. )urther, 3enito See and Marly See, :resident and (reasurer of Sharcons 3uilders :hils. Inc., respectively, and "tty. 3en4amin S. )ormoso, counsel for Sharcons until March /3, %00/, are declared and held in contempt for foisting falsehoods and using falsified and spurious documents in the pursuit of their nefarious activities pursuant to the instant case filed before this Court. +et the corresponding Darrants of "rrest be issued against the aforesaid respondents who should serve ten @/0A days of detention at the .asmariPas Municipal <ail, Cavite. +i?ewise, the title issued to Sharcons 3uilders :hilippines, Inc., under (C( #o. (71//66% allegedly issued on #ovember //, /&&6, being spurious, is hereby cancelled, it having been derived from another spurious title with (C( #o. (7%$26$& allegedly issued to -vanswinda C. Morales on .ecember %&, /&2&. (he

.eclaration of !eal :roperty #o. 6$36 is li?ewise hereby cancelled for being spurious. +et a copy of this 9rder be forwarded to the !egistry of .eeds for its implementation with respect to the two @%A titles for cancellation and to the "ssessorTs 9ffice of the Municipality of .asmariPas, Cavite, to stave off the proliferation of these spurious instruments. D>-!-)9!-, in view of the foregoing, the instant case is .ISMISS-. DI(> :!-<,.IC-, whereas, the private defendantTs counterclaims, which need further substantiation, are li?ewise dismissed. >owever, the said private defendants are not precluded from pursuing their rightful course@sA of action in the interest of 4ustice. S9 9!.-!-.. :etitioner stated that in determining the merits of Sharcons5 complaint for uieting of title, she "stumbled" upon Civil Case #o. 6%37&% for cancellation of title and damages filed with the !(C, 3ranch %0, Imus, Cavite, presided by then <udge +ucenito #. (agle.% :etitioner then too? 4udicial notice of the 4udgeTs .ecision declaring that Sharcons5 (C( and other supporting documents are falsified and that respondents are responsible therefor. 9n <uly /%, %00/, petitioner issued warrants of arrest against respondents. (hey were confined in the municipal 4ail of .asmariPas, Cavite. (hat same day, respondents filed a motion for bail and a motion to lift the order of arrest. 3ut they were denied outright by petitioner. !espondents then filed with the Court of "ppeals a petition for a writ of ha'eas corpus, doc?eted as C"7;.!. S: #o. 6161%. 9n <uly /&, %00/, the Court of "ppeals granted the petition. 9n September /%, %00/, the Court of "ppeals promulgated its .ecision, the dispositive portion of which reads8 I# (>- +I;>( 9) "++ (>- )9!-;9I#;, finding the instant petition to be meritorious, the same is hereby ;!"#(-.. !espondent 4udgeTs <uly &, %00/ 9rder, insofar as it declared herein petitioners in direct contempt and ordered their incarceration for ten @/0A days, as well as the Darrant of "rrest, dated <uly /%, %00/, and the 9rder of Commitment, dated <uly /3, %00/, which the respondent 4udge issued against the persons of the herein petitioners, are hereby #,++I)I-. and S-( "SI.-. S9 9!.-!-.. (he Court of "ppeals ruled that <udge -spaPol erred in ta?ing cogni*ance of the .ecision rendered by then <udge (agle in Civil Case #o. 6%37&% since it was not offered in evidence in Civil Case #o. %031700 for uieting of title. Moreover, as the direct contempt of court is criminal in nature, petitioner should have conducted a hearing. (hus, she could have determined whether respondents are guilty as charged. :etitioner filed a motion for reconsideration but the Court of "ppeals denied the same in its !esolution of #ovember /1, %00/. >ence, this petition. (he basic uestion before us is whether petitioner erred in ruling that respondents are guilty of direct contempt of court for using falsified documents when Sharcons filed its complaint for uieting of title. (he early case of In re )ones3 defined contempt of court as "some act or conduct which tends to interfere with the business of the court, by a refusal to obey some lawful order of the court, or some act of disrespect to the dignity of the court which in some way tends to interfere with or hamper the orderly proceedings of the court and thus lessens the

general efficiency of the same." It has also been described as "a defiance of the authority, 4ustice or dignity of the courtB such conduct as tends to bring the authority and administration of the law into disrespect or to interfere with or pre4udice parties litigants or their witnesses during litigation." 6 Simply put, .( .' e'1.'.n& o/ (+e "u(+o0.(8, ;u'(.,e, o0 .&n.(8 o/ (+e ,ou0(.1 (he offense of contempt traces its origin to that time in -ngland when all courts in the realm were but divisions of the Curia *e(ia, the supreme court of the monarch, and to scandali*e a court was an affront to the sovereign. 6(his concept was adopted by the "mericans and brought to our shores with modifications. In (+.' ;u0.' .,(.on, .( .' no< 0e,o&n.!e (+"( ,ou0(' +"Ae (+e .n+e0en( 1o<e0 (o 1un.'+ /o0 ,on(e:1( on (+e &0oun (+"( 0e'1e,( /o0 (+e ,ou0(' &u"0"n(ee' (+e Ae08 '("7.-.(8 o/ (+e ;u .,."- .n'(.(u(.on. $ Such stability is essential to the preservation of order in 4udicial proceedings, to the enforcement of 4udgments, orders, and mandates of the courts, and, conse uently, to the very administration of 4ustice.2 !ule $/ of the /&&$ !ules of Civil :rocedure, as amended, provides8 S-C. /. &irect contempt punished summaril". R " person guilty of misbehavior in the presence of or so near a court as to obstruct or interrupt the proceedings before the same, including disrespect toward the court, offensive personalities toward others, or refusal to be sworn or to answer as a witness, or to subscribe an affidavit or deposition when lawfully re uired to do so, may be summarily ad4udged in contempt by such court and punished by a fine not e'ceeding two thousand pesos or imprisonment not e'ceeding ten @/0A days, or both, if it be a !egional (rial Court or a court of e uivalent or higher ran?, or by a fine not e'ceeding two hundred pesos or imprisonment, not e'ceeding one @/A day, or both, if it be a lower court. In Aarcida v. /o en,& this Court characteri*ed direct contempt as one done "in the presence of or so near the court or 4udge as to obstruct the administration of 4ustice." It is a contumacious act done facie curiae and may be punished summarily without hearing./0 In other words, one may be summarily ad4udged in direct contempt at the very moment or at the very instance of the commission of the act of contumely. Section 3, !ule $/ of the same !ules states8 S-C. 3. Indirect contempt to 'e punished after char(e and hearin( . R "fter a charge in writing has been filed and an opportunity given to the respondent to comment thereon within such period as may be fi'ed by the court and to be heard by himself or by counsel, a person guilty of any of the following acts may be punished for indirect contempt8 @aA Misbehavior of an officer of court in the performance of his official duties or in his official transactionsB @bA .isobedience of or resistance to a lawful writ, process, order, or 4udgment of a court, including the act of a person who, after being dispossessed or e4ected from any real property by the 4udgment or process of any court of competent 4urisdiction, enters or attempts or induces another to enter into or upon such real property, for the purpose of e'ecuting acts of ownership or possession, or in any manner disturbs the possession given to the person ad4udged to be entitled theretoB @cA "ny abuse of or any unlawful interference with the processes or proceedings of a court not constituting direct contempt under Section / of this !uleB @dA "ny improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of 4usticeB @eA "ssuming to be an attorney or an officer of a court and acting as such without authorityB

@fA )ailure to obey a subpoena duly servedB @gA (he rescue, or attempted rescue, of a person or property in the custody of an officer by virtue of an order or process of a court held by him. 3ut nothing in this section shall be so construed as to prevent the court from issuing process to bring the respondent into court, or from holding him in custody pending such proceedings. Indirect or constructive contempt, in turn, is one perpetrated outside of the sitting of the court and may include misbehavior of an officer of a court in the performance of his official duties or in his official transactions, disobedience of or resistance to a lawful writ, process, order, 4udgment, or command of a court, or in4unction granted by a court or a 4udge, any abuse or any unlawful interference with the process or proceedings of a court not constituting direct contempt, or any improper conduct tending directly or indirectly to impede, obstruct or degrade the administration of 4ustice.// De agree with petitioner that the use of falsified and forged documents is a contumacious act. >owever, it constitutes indirect contempt not direct contempt. :ursuant to the above provision, such act is an improper conduct which degrades the administration of 4ustice. In Santos v. Court of First Instance of Ce'u, /ranch 6I,/% we ruled that the imputed use of a falsified document, more so where the falsity of the document is not apparent on its face, :e0e-8 ,on'(.(u(e' .n .0e,( ,on(e:1(, and as such is sub4ect to such defenses as the accused may raise in the proper proceedings. (hus, following Section 3, !ule $/, a contemner may be punished only after a charge in writing has been filed, and an opportunity has been given to the accused to be heard by himself and counsel. /3Moreover, settled is the rule that a contempt proceeding is not a civil action, but a separate proceeding of a criminal nature in which the court e'ercises limited 4urisdiction./6 (hus, the modes of procedure and the rules of evidence in contempt proceedings are assimilated as far as practicable to those adapted to criminal prosecutions. /1 :erforce, petitioner 4udge erred in declaring summarily that respondents are guilty of direct contempt and ordering their incarceration. She should have conducted a hearing with notice to respondents. :etitioner, in convicting respondents for direct contempt of court, too? 4udicial notice of the .ecision in Civil Case #o. 6%37&%, assigned to another !(C branch, presided by then <udge (agle. Section /, !ule /%& of the !evised !ules of Court provides8 S-C. /. )udicial notice, hen mandator". ? " court shall ta?e 4udicial notice, without the introduction of evidence, of the e'istence and territorial e'tent of states, their political history, forms of government, and symbols of nationality, the law of nations, the admiralty and maritime courts of the world and their seals, the political constitution and history of the :hilippines, (+e o//.,."- ",(' o/ (+e legislative, e'ecutive and;u .,."- e1"0(:en(' of the :hilippines, the laws of nature, the measure of time, and the geographical divisions. In +ener v. &e Leon,/6 we held that courts are not authori*ed to ta?e 4udicial notice of the contents of records of other cases even when such cases have been tried or pending in the same court. >ence, we reiterate that petitioner too? 4udicial notice of the .ecision rendered by another !(C branch and on the basis thereof, concluded that respondents used /"-'./.e o,u:en(' @such as land title and ta' declarationA when Sharcons filed its complaint for uieting. Eerily, the Court of "ppeals did not err in ruling that respondents are not guilty of direct contempt of court. Meanwhile, the instant petition challenging the .ecision of the Court of "ppeals granting the writ of ha'eas corpusin favor of respondents has become moot. De recall that respondents were released after posting the re uired bail as ordered by the Court of "ppeals. " writ of ha'eas corpus will not lie on behalf of a person who is not actually restrained of his liberty. "nd a person discharged on bail is not restrained of his liberty as to be entitled to a writ of ha'eas corpus./$ )2EREFORE, we DENY the petition. (he challenged .ecision and !esolution of the Court of "ppeals in C"7;.!. S: #o. 6161% are AFFIRMED. #o costs.

"n Sison vs. Caoibes, Jr.,$%&' this (ourt held that! )the power to declare a person in contempt of court and in dealing with him accordingly is an inherent power lodged in courts of justice, to be used as a means to protect and preserve the dignity of the court, the solemnity of the proceedings therein, and the administration of justice from callous misbehavior, offensive personalities, and contumacious refusal to comply with court orders. "ndeed, the power of contempt is power assumed by a court or judge to coerce cooperation and punish disobedience, disrespect or interference with the court*s orderly process by exacting summary punishment. he contempt power was given to the courts in trust for the public, by tradition and necessity, in as much as respect for the courts, which are ordained to administer the laws which are necessary to the good order of society, is as necessary as respect for the laws themselves. +nd, as in all other powers of the court, the contempt power, however plenary it may seem, must be exercised judiciously and sparingly . + judge should never allow himself to be moved by pride, prejudice, passion, or pettiness in the performance of his duties.

(he aforementioned actuation of the accused, if true, is not only indicative of his arrogance and deliberate disregard of the usual respect, courtesy and accommodation accorded to a court of law andLor its representative but is one constitutive of indirect contempt under Section 3, paragraphs @cA and @dA of !ule $/ of the !ules of Court, specially considering that the authori*ed driver of the :residing <udge of this Court was then on official errand. D>-!-)9!-, within a non7e'tendible period of twenty7four @%6A hours from receipt hereof, the accused is ordered to show cause why he should not be cited as in contempt of court and dealt with accordingly. (he 3ranch Sheriff of this Court is authori*ed and ordered to serve a copy of this 9rder upon the accused immediately and to ma?e a return of his proceedings thereon. "fter receipt of this 9rder, the accused is ordered to personally file his comment in Court, within the period allowed him herein. S9 9!.-!-..6 3ecause of the complainantTs failure to appear before the respondent 4udge as directed, the latter, after verifying that the said order was duly served on the complainant, issued another 9rder 1 dated September %%, /&&& for the complainantTs arrest and commitment, and for the latter to appear for hearing before his sala on September %&, /&&&. (he respondent sheriff then served the order on the complainant. 9n the scheduled hearing, the complainant appeared and e'ecuted an affidavit 6 admitting to the court that he made a mista?e and that it was all a misunderstanding. (he respondent 4udge, thereafter, lifted the September %%, /&&& 9rder. $ In his complaint, the complainant alleged inter alia the following8 6. (hat on September %2, /&&&, at around 6800 :.M., the undersigned complainant was greatly surprised when respondent (-9.9!9 "+E"!-H came and arrested him without any warrant of arrest, only on orders of the respondent <udge, and he was ordered to board a motor vehicle and was brought to the respondent <udge in +as :iPas City who ordered him detained in the +as :iPas City <ail. Dhen he was arrested, he was not able to call his family to inform them where he was because he failed to return home in the eveningB $. (hat the ne't day, September %&, /&&&, respondent (eodoro "lvare* informed him that there will be a hearing of his indirect contempt charge before the sala of the respondent <udge in +as :iPas City. .uring the hearing, the complainant was made to admit by the respondent <udge that he made a mista?e in apprehending his driver7sonF,G conscious that he committed the gravest abuse of his authority, and perhaps in anticipation of the legal action the undersigned complainant may ta?e against him after he is discharged from detention. (hus, after the complainant admitted his mista?es under duress, and upon appeal by his counsel assuring the respondent <udge that the same incident may not be repeated, the complainant was ordered discharged from detention at around 3830 :.M. on September %&, /&&&B 2. (hat the undersigned complainant did not ?now of any offense he had committed, e'cept for his issuing a traffic violation receipt to the driver7son of the respondent <udge which he is tas?ed by law to do so for those found violating traffic rules and regulationsB &. (hat if the act of issuing a traffic violation receipt for a traffic violation within the city limits of Mandaluyong City by the complainant is considered by the respondents as an offense, then complainant should be tried for the said offense in Mandaluyong City, and not in +as :iPas City where the respondent 4udge has no 4urisdictionB /0. (hat to the ordinary and lowly understanding of the undersigned complainant, the acts of respondents in arresting him without any warrant of arrest before a charge of indirect contempt is heard constitute the gravest "3,S- 9) ",(>9!I(J ever committed by the respondentsB and

A.M. No. RTJ90391661 M"8 26, 2004 BFo0:e0-8 A.M. OCA9IPI No. 339%429RTJC SAL>ADOR SISON, complainant, vs. J*DGE JOSE F. CAOIBES, JR., P0e'. .n& Ju &e, "n TEODORO S. AL>ARE5, S+e0.// I>, Re&.on"- T0."- Cou0(, L"' P.P"' C.(8, B0"n,+ 2H3, respondents, .-CISI9# CALLEJO, SR., J.# (he instant administrative complaint arose when Salvador Sison, a Metropolitan Manila .evelopment "uthority @MM."A traffic enforcer, filed a verified Complaint/ dated 9ctober /%, /&&&, charging <udge <ose ). Caoibes, <r. and Sheriff (eodoro "lvare* of the !egional (rial Court of +as :iPas City, 3ranch %13, with grave abuse of authority. In turn, the complaint stemmed from an 9rder % dated September /1, /&&& in Criminal Case #o. &&700% 3 which the respondent 4udge issued, re uiring the complainant to appear before him to e'plain a traffic incident involving his son and the complainant. (he said 9rder reads, thus8 :er information from the authori*ed driver of the :residing <udge of this Court on September 2, /&&&, at about 3800 oTcloc? in the afternoon of said date, said authori*ed driver, while on board the official car of the undersigned on an official errand was flagged by the accused along the -pifanio delos Santos "venue while he was positioning the car he was driving to the right lane as he was then to ma?e a right turnB that after he stopped, he was told by the accused that swerving to the right lane was prohibited when it appeared that the sign therefore was still far off and not readily visible to the na?ed eyeB that nonetheless, he introduced himself as the authori*ed driver of the undersigned, his son in fact, and showed to the accused the calling card of the undersigned with a notation in @sicA the dorsal portion thereof introducing the bearer of the card and re uesting for assistance from law enforcers, and accordingly begged that he be allowed to proceed on his way considering that there was no danger to limb, life and property occasioned by his alleged traffic violationB that notwithstanding such introduction and plea, the accused confiscated the driverTs license of the authori*ed driver, even bragging in the process that he did the same to somebody who introduced himself as a lawyer the day before.

//. (hat the manner the respondents are administering 4ustice in +as :iPas City is despotic and barbaric in the sense that they ta?e the law into their own hands without due regard for the rights of the others. 2 (he complainant, thus, prayed that the respondents be summarily dismissed from the service. In his comment, the respondent 4udge vehemently denied the accusations against him, contending that he was merely preserving the dignity and honor due to the courts of law. (he respondent narrated that on September 2, /&&&, he ordered his son, <ose !. Caoibes III, to go to the :asig City !egional (rial Court to secure certain records. Dhile on his way there, he was flagged down by the complainant for an alleged traffic violation. Caoibes III e'plained to the complainant that he was on an errand for his father, the respondent 4udge, to which the complainant reportedly uttered, "=alan( )ud(e, )ud(e Caoi'es sa a1in! 1ahapon n(a, a'o(ado an( hinuli 1o ." (he respondent 4udge also alleged that he initiated the complaint for contempt pursuant to the following provisions of the !evised !ules of Court8 aA Section 3@dA and Section 6 of !ule $/B bA Section 1@cA of !ule /31B and, cA the last paragraph of Section 3 of !ule $/. "ccording to the respondent 4udge, the complainantTs allegation that he failed to contact any relative is belied by the fact that during the hearing of September %&, /&&&, the complainant was assisted by "tty. -duardo :. )lores of the MM.", as evidenced by the transcript of stenographic notes & ta?en during the proceedings. (he respondent prayed that the instant complaint be dismissed for lac? of legal or factual basis. )or his part, the respondent sheriff admitted that he personally served copies of the respondent 4udgeTs orders on the complainant, but averred that he was merely performing his duties as deputy sheriff of the court. "s such, he did not commit grave abuse of authority in the performance of his functions. /0 (hereafter, the complainant e'ecuted a Sinumpaan( Sala"sa" n( Pa('a i n( *e1lamo dated #ovember %6, %00%, where he indicated that he was no longer interested in pursuing the administrative complaint against the respondent 4udge. (he complainant recanted his earlier claim, averring that the respondent 4udgeTs son did not in fact enter a one7 way street and that he was standing by the September %&, /&&& "ffidavit he e'ecuted during the hearing. >e then re uested that his complaint be duly withdrawn. // :ursuant to the recommendation/% of the Court "dministrator, the Court, in a !esolution /3 dated "pril %, %003, resolved to @aA dismiss the instant administrative complaint against Sheriff (eodoro "lvare* for lac? of meritB and @bA refer the matter against respondent <udge Caoibes, <r. to the :residing <ustice of the Court of "ppeals for raffle among the "ssociate <ustices of the Court, and for investigation, report and recommendation. (he case was, thereafter, raffled to "ssociate <ustice +ucas :. 3ersamin. (he Investigating <ustice, thereafter, submitted his Sealed !eport dated )ebruary %6, %006. "ccording to the Investigating <ustice, although the complainant never appeared to prove the charges against the respondent 4udge, the facts averred in the complaint appear to be substantially correct and true. (hus, the respondent 4udge abused his authority to charge and punish any person for indirect contempt under !ule $/ of the !ules of Civil :rocedure./6 (he Investigating <ustice recommended that the respondent be admonished and warned, pursuant to Section /0@/A, !ule /60 of the !ules of Court, and Section //@cA of the same rule. (he respondent 4udge anchors the 4ustification of his acts against the complainant on Section 3, !ule $/ of the !ules of Civil :rocedure, vi08 Sec. 3. Indirect contempt to 'e punished after char(e and hearin( . R "fter a charge in writing has been filed, and an opportunity given to the respondent to comment thereon within such period as may be fi'ed by the court and to be heard by himself or counsel, a person guilty of any of the following acts may be punished for indirect contempt8

@aA Misbehavior of an officer of a court in the performance of his official duties or in his official transactionsB @bA .isobedience of or resistance to a lawful writ, process, order, or 4udgment of a court, including the act of a person who, after being dispossessed or e4ected from any real property by the 4udgment or process of any court of competent 4urisdiction, enters or attempts or induces another to enter into or upon such real property, for the purpose of e'ecuting acts of ownership or possession, or in any manner disturbs the possession given to the person ad4udged to be entitled theretoB @cA "ny abuse of or any unlawful interference with the processes or proceedings of a court not constituting direct contempt under section / of this !uleB @dA "ny improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of 4usticeB @eA "ssuming to be an attorney or an officer of a court, and acting as such without authorityB @fA )ailure to obey a subpoena duly servedB @gA (he rescue, or attempted rescue, of a person or property in the custody of an officer by virtue of an order or process of a court held by him. 3ut nothing in this section shall be so construed as to prevent the court from issuing process to bring the respondent into court, or from holding him in custody pending such proceedings. (hus, the power to declare a person in contempt of court and in dealing with him accordingly is an inherent power lodged in courts of 4ustice, to be used as a means to protect and preserve the dignity of the court, the solemnity of the proceedings therein, and the administration of 4ustice from callous misbehavior, offensive personalities, and contumacious refusal to comply with court orders./1 Indeed, the power of contempt is power assumed by a court or 4udge to coerce cooperation and punish disobedience, disrespect or interference with the courtTs orderly process by e'acting summary punishment. (he contempt power was given to the courts in trust for the public, by tradition and necessity, in as much as respect for the courts, which are ordained to administer the laws which are necessary to the good order of society, is as necessary as respect for the laws themselves. /6 "nd, as in all other powers of the court, the contempt power, ho ever plenar" it ma" seem, must 'e e7ercised 3udiciousl" and sparin(l" ./$ " 4udge should never allow himself to be moved by pride, pre4udice, passion, or pettiness in the performance of his duties. /2 "t first blush, it would seem that the respondent 4udge was 4ustified in holding the complainant for contempt, due to the latterTs refusal to comply with the 4udgeTs 9rder of September /1, /&&&. >owever, it is not lost upon this Court that the complainant was not a party to any of the cases pending before the !(C, 3ranch %13. Dhat triggered the contempt charge was, in fact, the traffic violation incident involving the respondent 4udgeTs son. )urthermore, the record shows that when the complainant filed his reply to the charge as re uired by the respondent 4udge, the same was refused by some staff member in the latterTs sala./& In Cortes v. /an(alan,%0 we held that a 4udge may not hold a party in contempt of court for e'pressing concern on the 4udgeTs impartiality through a motion for voluntary inhibition, even if the latter may have felt insulted therein. (he Court also declared, thus8 [FDGhile the power to punish in contempt is inherent in all courts so as to preserve order in 4udicial proceedings and to uphold due administration of 4ustice, 4udges, however, should e'ercise their contempt powers 4udiciously and sparingly, with utmost restraint, and with the end in view of utili*ing their contempt powers for correction and preservation not for retaliation and vindication. %/

De agree with the Investigating <ustice when he opined that the respondent 4udge should have refrained from ordering the arrest and detention of the complainant, since the incident involved his own son, and the matter was very personal to him. (he fact that the respondent 4udge insisted that the complainant personally file his comment in court gives rise to doubts as to the motive behind itB as the Investigating <ustice puts it, the re uirement of personal filing was deliberately inserted so that the respondent could confront and harass the complainant. %% De also agree with the following ruminations of <ustice 3ersamin8 [F(Ghe respondent 4udge obviously resented the refusal of Sison to let off Caoibes III from the traffic violation apprehension. (he refusal of Sison was apparently aggravated by the sonTs reporting to the father that Sison had supposedly made the remar?s of =alan( 3ud(e, 3ud(e Caoi'es sa a1in! @ahapon n(a, a'o(ado an( hinuli 1o. [ ... (he respondent <udge was not 4ustified to so consider the act and remar?s of Sison as thereby displaying arrogance towards and deliberate disregard of the usual respect, courtesy and accommodation due to a court of law and its representative. )irst of all, the refusal of Sison and the supposed remar?s should not cause resentment on the part of the respondent <udge @whom Sison most li?ely did not yet ?now at the timeA because he ?new, as a public official himself, that Sison was only doing his duty of enforcing evenly the particular traffic regulation against swerving into a one7way street from the wrong direction, re(ardless of the office or position of the violatorCs father . Secondly, the respondent <udge should have had the circumspection e'pected of him as a 4udge to reali*e that the remar?s of Sison were invited by Caoibes IIITs attempt to bluffhis way out of the apprehension because he was the son of an !(C 4udge. >ence, the respondent <udge would have no grounds to cite Sison for contempt of court. "nd, thirdly, the respondent <udge and his son should have challenged the issuance of the traffic violation receipt pursuant to the pertinent rules if they did not agree with the basis of the apprehension and also administratively charged Sison for any unwarranted act committed. Since neither was done by them, but, on the contrary, both ultimately accepted the validity of the apprehension, as borne out by the retrieval of the driverTs license after September %&, /&&& by paying the fines corresponding to the traffic violation, then it follows that the respondent <udge had the consciousness that his son was at fault, instead of Sison. [F(Ghe respondent <udge claimed at the hearing that his son "was at that time wor?ing with @sicA me as my personal driverB" and that his errand was to secure some papers from the !egional (rial Court in :asig City involved in a "personal case" which the respondent <udge had "filed against a ban? for specific performance and damages, and since I 4ust suffered a mild stro?e at that time, specifically on <une /0, /&&&, and the incident too? place @sicA September, I could not at that time personally go to :asig to secure the documents I needed for the ne't hearing of the case so I had to send my son." (he foregoing renders clear that the respondent <udge had no legitimate basis by which to consider SisonTs apprehension of his son as indirect contempt. "s indicated earlier, the act complained against must be any of those specified in Sec. 3, !ule $/, /&&$ *ules of Civil ProcedureB otherwise, there is no contempt of court, which re uires that the person obstructed should be performing a duty connected with 4udicial functions. "s such, the respondent <udge acted oppressively and vindictively. :arenthetically, it is odd that the respondent <udge would even propose herein that Caoibes III, already %1 years at the time of the apprehension, was serving his father as the latterTs personal driver, al'eit not officially employed in the <udiciary. Most li?ely, therefore, Caoibes III might not be doing anything for his father at the time of his apprehension but was in the place for his own purposes. %3 (he act of a 4udge in citing a person in contempt of court in a manner which smac?s of retaliation, as in the case at bar, is appalling and violative of !ule %.0/ of the Code of <udicial Conduct which mandates that "a 4udge should so behave at all times to promote public confidence in the integrity and impartiality of the 4udiciary." %6 (he very delicate function of administering 4ustice demands that a 4udge should conduct himself at all times in a manner which would

reasonably merit the respect and confidence of the people, for he is the visible representation of the law. %1 (he irresponsible or improper conduct of 4udges erodes public confidence in the 4udiciaryB as such, a 4udge must avoid all impropriety and the appearance thereof. %6 De do not agree, however, that the respondent 4udge should be merely reprimanded for his actuations. (he Court has not been blind to the improper use by 4udges of the erstwhile inherent power of contempt which, in fine, amounts to grave abuse of authority. (he penalty imposed by the Court in such cases ranges from a fine of :%,100B %$ one monthTs salaryB%2 suspension from the service without pay for a period of three monthsB %& and even the ultimate penalty of dismissal from the service.30 )urthermore, we ta?e 4udicial notice that the respondent 4udge was previously sanctioned by the Court for violating Canon % of the Code of <udicial Conduct, where he was meted a fine of :%0,000. 3/ >e was found guilty of serious impropriety unbecoming a 4udge, for delivering fistic blows on a complainant 4udge. (o our mind, the instant case falls under "similar conduct," which the Court avowed would be dealt with more severely if repeated, and of which the respondent was duly warned. (he respondent was, li?ewise, found guilty of gross ignorance of procedural law and unreasonable delay in the issuance of an order of e'ecution, where he was meted a fine of :30,000B 3% and delay in resolving a motion to dismiss in a civil case pending before his sala where he was, li?ewise, fined :60,000. 33 )2EREFORE, the Court finds respondent <udge <ose ). Caoibes, <r., !egional (rial Court of +as :iPas City, 3ranch %13, G*ILTY of serious impropriety unbecoming a 4udge for violating Canon % of the Code of <udicial Conduct, and is hereby DISMISSED from the service with forfeiture of all retirement benefits e'cept accrued leave credits, with pre4udice to re7employment in any branch of the government or any of its instrumentalities including government7 owned and controlled corporations. (his decision is immediately e'ecutory. (he respondent is ORDERED to cease and desist from discharging the functions of his 9ffice. +et a copy of this .ecision be entered in the respondentTs personnel records

(ontempt, whether direct or indirect, may be civil or criminal depending on the nature and effect of the contemptuous act. (riminal contempt is ,conduct directed against the authority and dignity of the court or a judge acting judicially- it is an act obstructing the administration of justice which tends to bring the court to disrepute or disrespect.. /n the other hand, civil contempt is the failure to do something ordered to be done by a court or a judge for the benefit of the opposing party therein and is therefore, an offense against the party in whose behalf the violated order was made. "f the purpose is to punish, then it is criminal in nature- but if to compensate, then it is civil. G.R. No. 1H$%23 June %, 2004

RAMON D. MONTENEGRO, petitioner, vs. MA. TERESA L. MONTENEGRO, /o0 +e0'e-/ "n "' (+e :o(+e0 "n n"(u0"- &u"0 ."n o/ (+e :.no0', ANTONIO AMELO "n ANA MARIA PIA ISABEL, 7o(+ 'u0n":e @MONTENEGRO,@ respondents. .-CISI9# DA>IDE, JR., C!J!< In this petition for review on certiorari under !ule 61 of the /&&$ !ules of Civil :rocedure, petitioner !amon .. Montenegro see?s the reversal of the 2 #ovember %00% 9rder / in Civil Case #o. &67266$ of the !egional (rial Court, 3ranch 6/, 3acolod City, holding him guilty of indirect contempt for his repeated failure to appear at the scheduled hearings for his e'amination as 4udgment obligor and imposing on him the penalty of three @3A months imprisonment

and a fine of twenty thousand pesos @:%0,000A, and of the subse uent 3 <anuary %003 9rder %denying his motion for the reconsideration of the 2 #ovember %00% 9rder. 9n /6 <une /&&6, respondent Ma. (eresa E. +i*ares7Montenegro @hereinafter, respondent (eresaA, for herself and as mother and guardian of her two minor children "ntonio "melo and "na Maria :ia Isabel, filed with the trial court below a complaint for support against her husband, herein petitioner !amon .. Montenegro. (he case was doc?eted as Civil Case #o. &67266$. )our years after the filing of the complaint, petitioner and respondent (eresa e'ecuted a compromise agreement which was submitted to the trial court for approval on /3 9ctober /&&2. 9n the same date, the trial court rendered a .ecision approving the compromise agreement and ordering the parties to comply with it. (he parties did not appeal from the .ecisionB hence, it became final and e'ecutory. ,nder the terms of the compromise agreement, petitioner obligated himself to8 @/A :ay the respondent the amount of 9ne Million :esos @:/,000,000A representing her entire share in their con4ugal partnership of gains, )ive >undred (housand @:100,000A of which is payable upon signing of the compromise agreement while the remaining balance of )ive >undred (housand @:100,000A must be paid within one @/A year from the e'ecution of the compromise agreement. @%A -stablish a trust fund in the amount of (hree Million :esos @:3,000,000A in favor of his children "ntonio "melo and "na Maria :ia Isabel within si'ty @60A days from the approval of the compromise agreement. @3A 9btain an educational plan or an investment plan to cover tuition and other matriculation fees for the college education of "na Maria :ia Isabel within one @/A year from the approval of the compromise agreement. Since petitioner failed to comply with his obligations under the compromise agreement despite the lapse of the periods provided therein, respondent (eresa filed a motion for the e'ecution of the 4udgment. (he trial court granted the motion and issued a writ of e'ecution on /1 )ebruary /&&&. " second writ of e'ecution and a notice of garnishment, issued by the trial court on %/ May %00/ and and a notice of garnishment issued on %2 May %00/ weon %2 May %00/, respectively, were returned unsatisfied. In several conferences3 called by the trial court, petitioner admitted his failure to comply with his obligations under the compromise agreement but alleged that he was no longer in a position to do so as he was already insolvent. In the conference held on 6 March %00%, respondent (eresa manifested that she would file a motion for e'amination of petitioner as 4udgment obligor. (he trial court gave her 30 days within which to file the appropriate motion and informed petitioner that he would have 30 days to file a comment or reply to the motion. 9n /6 March %00%, respondent (eresa filed a motion to e'amine petitioner as 4udgment obligor under Sections 36 and 32 of !ule 3& of the !ules of Court. In her motion, she alleged that there is an urgency for the e'amination to be conducted at the earliest time since petitioner was about to migrate to Canada. "cting on the said motion, the trial court issued on /& March %00% an 9rder granting the motion for e'amination of petitioner as 4udgment obligor and setting his e'amination on %% March %00%. 9n the same day the motion for e'amination was granted, petitioner filed with the court a Manifestation alleging that the grant of the motion for e'amination iwas premature because he still would have 30 days from receipt of the motion, or until "pril /6, %00%, within which to file a comment or opposition thereto as agreed upon during the conference on 6 March %00%. (hus, o9n %% March %00%, neither petitioner nor his counsel appeared for the scheduled hearing. 9n that date, the trial court issued an order re7scheduling the hearing to /0 "pril %00% and re uiring the petitioner to e'plain why he should not be held in contempt of court for disobeying the /& March %00% 9rder.

9n %6 March %00%, petitioner filed a Compliance with Motion to !e7schedule :roceedings. >e e'plained that he did not attend the %% March %00% hearing because he was under the impression that he still had 30 days from the filing of the motion to e'amine him as 4udgment obligor within which to respond to the motionB besides, his counsel was not available on %% March %00% due to previously scheduled hearings. "t the hearing on 6 "pril %00% of the Compliance with Motion to !e7schedule :roceedings, counsel for petitioner manifested that his client already left for Canada on %6 March %00% and will be unable to attend the /0 "pril %00% hearing, and that petitioner would be available for e'amination on the last wee? of <uly or first wee? of "ugust %00%. Counsel prayed that the hearing be thus reset accordingly. (he trial court denied the motion and informed the parties that the hearing scheduled on /0 "pril %00% will proceed as scheduled. 9n 1 "pril %00%, petitioner filed a manifestation reiterating that he would be unable to attend the /0 "pril %00% hearing because he was already in Canada. Counsel for petitioner li?ewise manifested that he would also be unavailable on the said date because he would be in Manila to attend to his other cases. 9n /$ <une %00%, the trial court issued an 9rder directing the petitioner to show cause why he should not held in contempt of court for failure to appear on the /0 "pril %00% at the hearing for his e'amination as 4udgment obligor. In his Compliance and -'planation filed on %2 <une %00%, petitioner alleged that he was unable to attend the /0 "pril %00% hearing because he was in Canada and had no intention to abscond from his obligation. 9n /3 <une %00%, the trial court issued an 9rder setting the case for the hearing for e'amination of the petitioner on 3 <uly %00%. " subpoena was issued against the petitioner and served at his address of record. !espondent (eresa also caused the service of the subpoena at 201/ -strella "venue, San "ntonio Eillage, Ma?ati City where petitioner is allegedly residing. (he 3 <uly %00% hearing did not push through as the petitioner filed a Motion to Muash Subpoena Ad Testificandum6 on %2 <une %00%. In the motion, petitioner admitted that 201/ -strella "venue, San "ntonio Eillage, Ma?ati City, is his present address but alleged that Ma?ati City is more than /00 ?ilometers away from 3acolod CityB thus, he may not be compelled by subpoena to attend the 3 <uly %00% hearing in 3acolod City. In this motion, petitioner did not allege that he was still in Canada. In its 9rder of % September %00%, the trial court denied the Motion to Muash Subpoena Ad Testificandum, but re7 scheduled the hearing to %3 9ctober %00%. 9n %% 9ctober %00%, the day before the scheduled hearing, petitioner filed a manifestation manifestation informing the trial court that he was still in Canada and would not be able to attend the %3 9ctober %00% hearingB however, he would be in Manila on the first wee? of .ecember %00%. >e moved that the hearing be re7scheduled on & .ecember %00%. (he manifestation, however, did not contain a notice of hearing. 9n %3 9ctober %00%, petitioner did not appear at the scheduled hearing, prompting the trial court to issue an order citing him in contempt of court. In its 9rder of 2 #ovember %00%, the trial court declared petitioner in contempt of court under Section 32 of !ule 3& of the !ules of Court1 and imposed on him the penalty of imprisonment for three months and ordered him to pay a fine of :%0,000. >is motion for reconsideration of the 9rder having been denied by the trial court in its 9rder of 3 <anuary %003, petitioner filed the petition in the case at bar. (he petition raises pure uestions of law. "fter the issues were 4oined, we resolved to give due course to the petition. >aving raised only uestions of law, petitioner is bound by the trial courtTs findings of fact. (he core issue to be determined is whether, based on the facts found by the trial court, the latter erred in holding the petitioner guilty of indirect contempt for willfully disobeying the orders of the trial court re uiring him to appear for

purposes of e'amination as a 4udgment obligor at in the hearings scheduled on %% March %00%, /0 "pril %00%, and %3 9ctober %00%. De rule in the negative. (he totality of petitionerTs acts clearly indicated a deliberate, and un4ustified refusal to be e'amined as a 4udgment obligor at the time the e'amination was scheduled for hearing by the trial court. >is Such acts tended to degrade the authority and respect for court processes and impaired the 4udiciaryTs duty to deliver and administer 4ustice. :etitioner tried to impose his will on the trial court. Contempt of court involves the doing of an act, or the failure to do an act, in such a manner as to create an affront to the court and the sovereign dignity with which it is clothed. 6 It is defined as "disobedience to the court by acting in opposition to its authority, 4ustice and dignity." $ (he power to punish contempt is inherent in all courts, because it is essential to the preservation of order in 4udicial proceedings, and to the enforcement of 4udgments, orders and mandates of the courtsB and, conse uently, to the due administration of 4ustice. 2 (he !ules of Court penali*es two types of contempt, namely, direct contempt and indirect contempt. .irect contempt is committed in the presence of or so near a court as to obstruct or interrupt the proceedings before the same, and includes disrespect toward the court, offensive personalities toward others, or refusal to be sworn or to answer as a witness, or to subscribe an affidavit or deposition when lawfully re uired to do so. & 9n the other hand, Section 3 of !ule $/ of the !ules of Court enumerates particular acts which constitute indirect contempt, thus8 @aA Misbehavior of an officer of a court in the performance of his official duties or in his official transactionsB @bA .isobedience of or resistance to a lawful writ, process, order, or 4udgment of a court, including the act of a person who, after being dispossessed or e4ected from any real property by the 4udgment or process of any court of competent 4urisdiction, enters or attempts or induces another to enter into or upon such real property, for the purpose of e'ecuting acts of ownership or possession, or in any manner disturbs the possession given to the person ad4udged to be entitled theretoB @cA "ny abuse of or any unlawful interference with the processes or proceedings of a court not constituting direct contempt under section / of this !uleB @dA "ny improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of 4usticeB @eA "ssuming to be an attorney or an officer of a court, and acting as such without authorityB @fA )ailure to obey a subpoena duly servedB @gA (he rescue, or attempted rescue, of a person or property in the custody of an officer by virtue of an order or process of a court held by him. In relation to the foregoing, Section 32 of !ule 3& of the !ules of Court also provides that "a party or other person may be compelled, by an order or subpoena, to attend before the court or commissioner to testify as provided in the two preceding sections, and upon failure to obey such order or subpoena or to be sworn, or to answer as a witness or to subscribe his deposition, may be punished for contempt as in other cases." (his provision relates specifically to Section 3@bA of !ule $/ of the !ules of Court.

Indirect contempt may either be initiated @/A motu proprio by the court by issuing an order or any other formal charge re uiring the respondent to show cause why he should not be punished for contempt or @%A by the filing of a verified petition, complying with the re uirements for filing initiatory pleadings. /0 In the present case, the trial court initiated the proceedings for indirect contempt by issuing two orders // directing the petitioner to show cause why he should not be punished for indirect contempt. Contempt, whether direct or indirect, may be civil or criminal depending on the nature and effect of the contemptuous act. Criminal contempt is "conduct directed against the authority and dignity of the court or a 4udge acting 4udiciallyB it is an act obstructing the administration of 4ustice which tends to bring the court into disrepute or disrespect." /% 9n the other hand, civil contempt is the failure to do something ordered to be done by a court or a 4udge for the benefit of the opposing party therein and is therefore, an offense against the party in whose behalf the violated order was made. /3 If the purpose is to punish, then it is criminal in natureB but if to compensate, then it is civil. /6 In the present case, the contemptuous act was the petitionerTs refusal to attend a hearing for his e'amination as 4udgment obligor, upon motion by the respondent (eresa. It must be pointed out that the purpose of Section 36 of !ule 3& is to provide the 4udgment obligee a remedy in case where the 4udgment obligor continues to fail to comply with its obligation under the 4udgment. :etitionerTs refusal to be e'amined, without 4ustifiable reason, constituted indirect contempt which is civil in nature. :etitionerTs deliberate willfulness and even malice in disobeying the orders of the trial court are clearly shown in the pleadings he himself had filed before the trial court. In his Manifestation of /& March %00% petitioner insisted on his right to file a reply or comment on the Motion to -'amine .efendant as <udgment 9bligor until /6 "pril %00% solely on the basis of the purported agreement at the conference on 6 March %00%. :etitioner merely brushed aside the 9rder of the trial court re uiring him to appear on %% March %00% for the hearing by not appearing in court. :etitioner cannot simply assume that his manifestation would suffice for the trial court to re7schedule the %% March %00% hearing. (hat portion of the manifestation filed by petitioner on /& March %00%, which reads8 3. In the meantime, we have no other option but to cancel the setting on March %%, %00% until !espondent shall have submitted his !eplyLComment and the issue is finally laid to rest by the issuance of a final 9rder for that purpose. demonstrates beyond doubt arrogance, haughtiness and disrespect. Dhile petitioner apparently disagrees with the /& March %00% 9rder of by the trial court, he did not file a motion for its reconsideration. #either did he file a motion to reset the scheduled hearing on %% March %00%. De have ruled that a motion for continuance or postponement is not a matter of right but is addressed to the sound discretion of the court. /1 :etitioner sought to deprive the trial court of the discretionB he too? it upon himself to cancel or to order the court to cancel the %% March %00% scheduled hearing. :etitioner ma?es a belated claim in the present petition that his failure to attend the %% March %00% hearing was due to the fact that he was already on his way to Manila on %% March %00% in preparation for his %6 March %00% trip to Canada. >owever, such e'planation was not stated in the /& March %00% Manifestation and 1 "pril %00% Compliance and Motion to !e7schedule :roceedings. (he e'planation is either a delayed afterthought or an unguarded confession of a deliberate plan to delay or even avoid his e'amination as a 4udgment obligor. #either can petitioner rely on the alleged irregularity in the trial courtTs grant of the motion to e'amine him as 4udgment obligor before he was able to file a reply or comment. Section 36 of, !ule 3& of the !ules of Court allows, as a matter of right, the plaintiff who is a 4udgment obligee to e'amine the defendant as 4udgment obligor, at any time after the return of the writ of e'ecution is made. Section 36 reads as follows8 Sec. 36. ;7amination of 3ud(ment o'li(or hen 3ud(ment unsatisfied. K Dhen the return of a writ of e'ecution issued against property of a 4udgment obligor, or any one of several obligors in the same 4udgment, shows that the 4udgment remains unsatisfied, in whole or in part, the 5udgment o"ligee% at any

time after such return is made% shall "e entitled to an order from the court which rendered the said 4udgment, re uiring such 4udgment obligor to appear and be e'amined concerning his property and income before such court or before a commissioner appointed by it, at a specified time and placeB and proceedings may thereupon be had for the application of the property and income of the 4udgment obligor towards the satisfaction of the 4udgment. 3ut no 4udgment obligor shall be so re uired to appear before a court or commissioner outside the province or city in which such obligor resides or is found. @-mphasis suppliedA (hus, the trial court committed no abuse of discretion in scheduling the e'amination of petitioner on %% March %00%. 9n the contrary, it acted with utmost 4udiciousness to avoid a miscarriage of 4ustice because petitioner was reported to be about to leave for Canada, a fact which petitioner did not refute in his Manifestation of /& March %00%. It is noteworthy that while petitioner insisted that he still had until /6 "pril %00% to file a reply or comment on the motion for e'amination, he also manifested through counsel on 1 "pril %00% that he already left for Canada on %6 March %00% and will not be bac? until the last wee? of <uly or the first wee? of "ugust %00%. It is obvious then that petitioner wanted to gain time to avoid being e'amined. Dith respect to the /0 "pril %00% hearing, it is established that petitioner was already in Canada at the time of the scheduled hearing. #onetheless, it must be stressed that the re7scheduling of the hearing to /0 "pril %00% was brought about by his un4ustifiable failure to attend the %% March %00% hearing. Subse uently, despite petitionerTs /& March %00% and 1 "pril %00% manifestations that he would return to the :hilippines sometime during the last wee? of <uly or first wee? of "ugust %00%, petitioner did not attend the %3 9ctober %00% hearing. "gain, instead of filing a motion to reset the hearing, petitioner filed a manifestation the day before the scheduled hearing, informing the court that he will be unable to attend the hearing and suggesting the hearing to be reset to & .ecember %00%. Such manifestation to re7schedule the %3 9ctober %00% hearing was, for all intents and purposes, a motion to postpone the hearing , but the pleading did not contain a notice of hearing. It is of no moment that petitioner was eventually e'amined as 4udgment obligor on /$ .ecember %00%, nine @&A months after the original setting. >is subse uent appearance at the hearing did not wipe out his contemptuous conduct. De shall now ta?e up the penalties imposed by the trial court. ,nder Section $ of !ule $/ of the !ules of Court, a person found guilty of contempt of court against a !egional (rial Court may be punished with a fine not e'ceeding thirty thousand pesos or imprisonment not e'ceeding si' @6A months, or both. (he penalties ofor imprisonment for three months and a fine of twenty thousand pesos are within the allowable penalties the trial court itit may impose. >owever, the penalties of imprisonment and fine may be imposed one at a time, or together. In the present case, the nature of the contemptuous acts committed are civil in nature. Section $ of !ule $/ of the !ules of Court provides for indefinite incarceration in civil contempt proceedings to compel a party to comply with the order of the court. (his may be resorted to where the attendant circumstances are such that the non7compliance with the court order is an utter disregard of the authority of the court which has then no other recourse but to use its coercive power. /6 It has been held that "when a person or party is legally and validly re uired by a court to appear before it for a certain purpose, when that re uirement is disobeyed, the only remedy left for the court is to use force to bring such person or party before it."/$ (he reason for indefinite incarceration in civil contempt proceedings, in proper cases, is that it is remedial, preservative, or coercive in nature. (he punishment is imposed for the benefit of a complainant or a party to a suit who has been in4ured. Its ob4ect is to compel performance of the orders or decrees of the court, which the contemnor refuses to obey although able to do so./2 In effect, it is within the power of the person ad4udged guilty of contempt to set himself free.

In the present case, however, the act which the trial court ordered the petitioner to do has already been performed, albeit belatedly and not without delay for an unreasonable length of time. "s such, the penalty of imprisonment may no longer be imposed despite the fact that its non7implementation was due to petitionerTs absence in the :hilippines. De are not unmindful of the nature of the 4udgment from which the present controversy arose. Si' years have elapsed from the time the compromise agreement for the support of the children of petitioner and respondent was e'ecuted. De ta?e 4udicial notice of the amount of e'penses which a travel outside the country, particularly to Canada, entails, much more so when the person traveling to Canada is trying to establish himself in the said country as an immigrant. :etitionerTs claim for insolvency is negated by his fre uent travels to Canada. De thus e'hort the parties, specifically the petitioner, to resort to all reasonable means to fully satisfy the 4udgment for support based on the compromise agreement, for the paramount interests of their minor children. )2EREFORE, the petition is hereby PARTIALLY GRANTED. (he 2 #ovember %00% 9rder of the !egional (rial Court, 3ranch 6/, 3acolod City in with Civil Case #o. &67266$ is modified. "s modified, the penalty of for imprisonment is deleted therefrom, while the penalty of fine of :%0,000 is affirmed

G.R. No. 180D99 : October 13, 2010 $AN' O& T.E %.I!I%%INE IS!ANDS, Petitioner, v. !A$OR AR$ITER RODERIC' JOSE%. CA!ANZA, S.ERI&& ENRICO *. %AREDES, AME!IA ENRI#"EZ, +,- REMO !. SIA, Respondents.cralaw DECISION NAC."RA, J.: This is a *etition for 6ndirect "onte.pt filed by petitioner 3ank of the *hilippine 6slands $3*6% a2ainst respondents 9abor #rbiter Roderick /oseph "alan;a $9# "alan;a%, )heriff 8nrico D( *aredes $)heriff *aredes%, #.elia 8nri:ue; $8nri:ue;%, and Re.o 9( )ia $)ia%( The case ste..ed fro. the followin2 factsBchanroblesvirtualawlibrary 8nri:ue; and )ia were the branch .ana2er and the assistant branch .ana2er, respectively, of 3acolod&)in2can2 3ranch of petitioner( On )epte.ber ,, 200,, they were dis.issed fro. e.ploy.ent on 2rounds of breach of trust and confidence and dishonesty( The followin2 day, they filed separate co.plaints for ille2al dis.issal a2ainst petitioner before the +ational 9abor Relations "o..ission $+9R"%, Re2ional #rbitration 3ranch +o( C6, 3acolod "ity( 1chanroblesvirtuallawlibrary #fter the sub.ission of their respective position papers, 8<ecutive 9# Danilo "( #costa rendered a decision on arch 29, 2001, findin2 that 8nri:ue; and )ia had been ille2ally dis.issed fro. e.ploy.ent( The dispositve portion of 9# #costas decision readsBchanroblesvirtualawlibrary 758R8?OR8, pre.ises considered, >ud2.ent is hereby rendered as followsBchanroblesvirtualawlibrary 1( D8"9#R6+' that co.plainants were ille2ally dis.issed by respondentsA

2( ORD8R6+' respondents to reinstate co.plainants to their for.er position without loss of seniority ri2hts and to pay the. their correspondin2 full back wa2es inclusive of allowances and other benefits as co.puted, in the su. of *esosB O+8 6996O+ O+8 5=+DR8D )8C8+TD&T5R88 T5O=)#+D, ?O=R 5=+DR8D T56RTD&?O=R #+D -0@100 O+9D $*1,17,,1,1(-0%(2chanroblesvirtuallawlibrary *ursuant to the aforesaid decision, 8nri:ue; and )ia were reinstated in petitioners payroll(,chanroblesvirtuallawlibrary *etitioner appealed to the +9R"( The +9R" ruled that petitioner had >ust cause to ter.inate 8nri:ue; and )ia( 5ence, it reversed and set aside the 9# decision and, althou2h it dis.issed the co.plaint, it ordered petitioner to 2ive the dis.issed e.ployees financial assistance e:uivalent to one&half .onths pay for every year of service(1cra1aw 6n view of this decision, petitioner stopped the payroll reinstate.ent(-chanroblesvirtuallawlibrary 8nri:ue; and )ia elevated the .atter to the "ourt of #ppeals $"#%, but failed to obtain a favorable decision( On +ove.ber ,0, 200-, the appellate court affir.ed in toto the +9R" decision( The case eventually reached this "ourt and was docketed as '(R( +o( 172!12( Durin2 the pendency of the petition before this "ourt, 8nri:ue; and )ia filed a otion for *artial 8<ecution0cra1aw of the 9# decision dated arch 29, 2001( "itin2 Ro:uero v( *hilippine #irlines,7cra1aw they clai.ed that the reinstate.ent aspect of the 9# decision was i..ediately e<ecutory durin2 the entire period that the case was on appeal( 6n an Order!cra1aw dated October 1,, 2007, 9# "alan;a 2ranted 8nri:ue; and )ias .otion despite the opposition of petitioner( 5e opined that so lon2 as there is no finality yet of the decision reversin2 a rulin2 of the lower tribunal $in this case, the 9#% awardin2 reinstate.ent, the sa.e should be enforced( "onsiderin2 that the case was then pendin2 before this "ourt, he sustained 8nri:ue; and )ias clai., applyin2 the cases of Ro:uero and #ir *hilippines "orporation v( Ka.ora( 9cra1aw The correspondin2 writ of e<ecution was subse:uently issued(10cra1aw =pon service of the writ, )heriff *aredes served on petitioner a notice of sale of a parcel of land owned by petitioner to satisfy its obli2ation(11chanroblesvirtuallawlibrary #22rieved, petitioner i..ediately filed an =r2ent *etition for 6n>unction with prayer for the issuance of a Te.porary Restrainin2 Order $TRO% and@or 7rit of *reli.inary 6n>unction with the +9R", ?ourth Division, "ebu "ity( On +ove.ber 20, 2007, the +9R" issued a TRO(12chanroblesvirtuallawlibrary Disappointed with the conduct of 9# "alan;a, )heriff *aredes, 8nri:ue;, and )ia, and in view of the pendency of '(R( +o( 172!12, entitled 8nri:ue; v( 3ank of the *hilippine 6slands, 1,cra1aw before this "ourt, petitioner instituted the present petition for indirect conte.pt( *etitioner avers that 9# "alan;as Order 2rantin2 8nri:ue; and )ias .otion for partial writ of e<ecution pree.pts the decision of this "ourt and eventually results in the pay.ent of 8nri:ue; and )iaIs clai.s which .ay be contrary to this "ourts conclusion( *etitioner adds that respondents obstinately persist in applyin2 >urisprudence which is clearly inapplicable( ?inally, petitioner ar2ues that the e<ecution proceedin2s were done with undue haste that petitioner was not 2iven an opportunity to sub.it evidence in its defense to stop the e<ecution( These, accordin2 to petitioner, clearly indicate utter disrespect to the "ourt and are 2rounds to cite respondents in indirect conte.pt( eanwhile, on ?ebruary 12, 200!, this "ourt rendered a Decision in '(R( +o( 172!12, denyin2 the petition filed by 8nri:ue; and )ia, thereby sustainin2 the +9R" and the "#s conclusion that 8nri:ue; and )ia were validly dis.issed fro. e.ploy.ent by petitioner(

6n a decision11cra1aw dated /une ,0, 200!, the +9R", ?ourth Division, "ebu "ity, 2ranted 3*6s petition for in>unction, the dispositive portion of which is :uoted belowBchanroblesvirtualawlibrary 758R8?OR8, pre.ises considered, the instant petition is hereby 'R#+T8D( The Order dated 12 October 2007 issued by public respondent 9abor #rbiter 2rantin2 the 7rit of 8<ecution is declared +=99 and CO6D( The 7rit of 8<ecution issued in pursuance to said Order is likewise declared +=99 and CO6D( *ublic respondent 9abor #rbiter Roderick /oseph 3( "alan;a, and any person actin2 for and in his behalf, is D6R8"T8D to take no further action in pursuance of the afore.entioned Order and 7rit of 8<ecution( The 7rit of *reli.inary 6n>unction issued by this "o..ission dated 12 Dece.ber 2007 is hereby *8R #+8+T( )O ORD8R8D(1-chanroblesvirtuallawlibrary On October 27, 200!, 9# "alan;a issued an Order10cra1aw considerin2 the case closed and ter.inated based on 8nri:ue; and )ias .anifestation and .otion to dis.iss in view of the satisfaction and full pay.ent of their clai.s( 5ence, the only issue that is left unsettled is whether or not respondents are 2uilty of indirect conte.pt( 6ndirect conte.pt of court is 2overned by )ection ,, Rule 71 of the Rules of "ourt, which providesBchanroblesvirtualawlibrary )8"( ,( 1ndirect contempt to be punished after charge and hearing(&#fter a char2e in writin2 has been filed, and an opportunity 2iven to the respondent to co..ent thereon within such period as .ay be fi<ed by the court and to be heard by hi.self or counsel, a person 2uilty of any of the followin2 acts .ay be punished for indirect conte.ptBchanroblesvirtualawlibrary $a% isbehavior of an officer of a court in the perfor.ance of his official duties or in his official transactionsA $b% Disobedience of or resistance to a lawful writ, process, order, or >ud2.ent of a court, includin2 the act of a person who, after bein2 dispossessed or e>ected fro. any real property by the >ud2.ent or process of any court of co.petent >urisdiction, enters or atte.pts or induces another to enter into or upon such real property, for the purpose of e<ecutin2 acts of ownership or possession, or in any .anner disturbs the possession 2iven to the person ad>ud2ed to be entitled theretoA $c% #ny abuse of or any unlawful interference with the processes or proceedin2s of a court not constitutin2 direct conte.pt under section 1 of this RuleA $d% #ny i.proper conduct tendin2, directly or indirectly, to i.pede, obstruct, or de2rade the ad.inistration of >usticeA $e% #ssu.in2 to be an attorney or an officer of a court, and actin2 as such without authorityA $f% ?ailure to obey a subpoena duly servedA #D8

$2% The rescue, or atte.pted rescue, of a person or property in the custody of an officer by virtue of an order or process of a court held by hi.( < < <( Do the acts of respondents 8nri:ue; and )ia in filin2 a .otion for partial e<ecutionA of 9# "alan;a in 2rantin2 the writ of e<ecution and applyin2 or not applyin2 established >urisprudenceA and of )heriff *aredes in servin2 the notice of sale of the real property owned by petitioner fall under the above enu.erationL 7e answer in the ne2ative( "onte.pt of court is defined as a disobedience to the court by actin2 in opposition to its authority, >ustice, and di2nity( 6t si2nifies not only a willful disre2ard or disobedience of the courts order, but such conduct which tends to brin2 the authority of the court and the ad.inistration of law into disrepute or, in so.e .anner, to i.pede the due ad.inistration of >ustice( 17cra1aw 6t is a defiance of the authority, >ustice, or di2nity of the court which tends to brin2 the authority and ad.inistration of the law into disrespect or to interfere with or pre>udice party&liti2ants or their witnesses durin2 liti2ation(1!chanroblesvirtuallawlibrary The power to punish for conte.pt is inherent in all courts and is essential to the preservation of order in >udicial proceedin2s and to the enforce.ent of >ud2.ents, orders, and .andates of the court, and conse:uently, to the due ad.inistration of >ustice( 19cra1aw 5owever, such power should be e<ercised on the preservative, not on the vindictive, principle( Only occasionally should the court invoke its inherent power in order to retain that respect, without which the ad.inistration of >ustice will falter or fail(20cra1awOnly in cases of clear and contu.acious refusal to obey should the power be e<ercised( )uch power, bein2 drastic and e<traordinary in its nature, should not be resorted to unless necessary in the interest of >ustice(21chanroblesvirtuallawlibrary 6t is true that, at the ti.e of the filin2 by 8nri:ue; and )ia of the .otion for the partial e<ecution of the 9# decision which directed their reinstate.ent, the decision had already been reversed by the +9R", and such reversal was affir.ed by the "#( The case was then on appeal to this "ourt via a petition for review on certiorari under Rule 1- of the Rules of "ourt( 7e find that their .otion for partial e<ecution was a bona fide atte.pt to i.ple.ent what they .i2ht have 2enuinely believed they were entitled to in accordance with e<istin2 laws and >urisprudence(22cra1aw This is especially true in the instant case where the .eans of livelihood of the dis.issed e.ployees was at stake( #ny .an in such an uncertain and econo.ically threatened condition would be e<pected to take whatever .easures are available to ensure a .eans of sustenance for hi.self and his fa.ily(2,cra1aw "learly, 8nri:ue; and )ia were .erely pursuin2 a clai. which they honestly believed was due the.( Their act is far fro. bein2 contu.acious( On the other hand, 9# "alan;a, on .otion of 8nri:ue; and )ia, issued the writ of e<ecution considerin2 that at the ti.e of the application of the writ, this "ourt had yet to decide '(R( +o( 172!12( 9# "alan;a opined that so lon2 as there is no finality yet of the decision reversin2 a rulin2 of the 9# awardin2 reinstate.ent, the sa.e should be enforced( This was how he interpreted this "ourts pronounce.ents in Ro:uero21cra1aw and Ka.oraA2-cra1aw that 4even if the order of reinstate.ent of the 9abor #rbiter is reversed on appeal, it is obli2atory on the part of the e.ployer to reinstate and pay the wa2es of the dis.issed e.ployee durin2 the period of appeal until reversal by the hi2her court(4 3ut as we clearly discussed in 3a2o v( +ational 9abor Relations "o..ission, 20cra1aw while it is true that the reinstate.ent aspect of the 9# decision is i..ediately e<ecutory, the reversal thereof by the +9R" beco.es final and e<ecutory after ten $10% days fro. receipt thereof by the parties( That the "# .ay take co2ni;ance of and resolve a petition for the nullification of the +9R" decision on >urisdictional and due process considerations does not affect the statutory finality of the +9R" decision( 6t then

lo2ically follows that, at the ti.e of the application for the writ since the "ourt eventually sustained the +9R" and the "# decisions in '(R( +o( 172!12 no issue of payroll reinstate.ent .ay be considered at all after the reversal of the 9# decision by the +9R"( )till, the erroneous issuance of the writ of e<ecution by 9# "alan;a can only be dee.ed 2rave abuse of discretion which is .ore properly the sub>ect of a petition for certiorari and not a petition for indirect conte.pt(27cra1aw +o one who is called upon to try the facts or interpret the law in the process of ad.inisterin2 >ustice can be infallible in his >ud2.ent(2!chanroblesvirtuallawlibrary ?inally, )heriff *aredes, in servin2 the notice of sale, was only perfor.in2 his duty pursuant to the writ of e<ecution( +o .atter how erroneous the writ was, it was issued by 9# "alan;a and was addressed to hi. as the sheriff, co..andin2 hi. to collect fro. petitioner the a.ount due 8nri:ue; and )ia( 6n the event he failed to collect the a.ount, he was authori;ed to cause the satisfaction of the sa.e on the .ovable and i..ovable properties of petitioner not e<e.pt fro. e<ecution( 29cra1aw Thus, any act perfor.ed by )heriff *aredes pursuant to the aforesaid writ cannot be considered conte.ptuous( #t the ti.e of the service of the notice of sale, there was no order fro. any court or tribunal restrainin2 hi. fro. enforcin2 the writ( 6t was .inisterial duty for hi. to i.ple.ent it( To be considered conte.ptuous, an act .ust be clearly contrary to or prohibited by the order of the court or tribunal( # person cannot, for disobedience, be punished for conte.pt unless the act which is forbidden or re:uired to be done is clearly and e<actly defined, so that there can be no reasonable doubt or uncertainty as to what specific act or thin2 is forbidden or re:uired(,0chanroblesvirtuallawlibrary 758R8?OR8, pre.ises considered, the petition is D6) 6))8D for lack of .erit(

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