Post-judgment Remedies

Republic of the Philippines

SUPREME COURT
EN BANC
G.R. No. 141524 September 14, 2005
DOMINGO NEYPES, LUZ FAUSTINO, ROGELIO FAUSTINO, LOLITO VICTORIANO, JACOB OBANIA AND DOMINGO CABACUNGAN, Petitioners,
vs.
HON. COURT OF APPEALS, HEIRS OF BERNARDO DEL MUNDO, namely: FE, CORAZON, JOSEFA, SALVADOR and CARMEN, all surnamed DEL
MUNDO, LAND BANK OF THE PHILIPPINES AND HON. ANTONIO N. ROSALES, Presiding Judge, Branch 43, Regional Trial Court, Roxas, Oriental
Mindoro, Respondent.
DECISION
CORONA, J.:
Petitioners Domingo Neypes, Luz Faustino, Rogelio Faustino, Lolito Victoriano, Jacob Obania and Domingo Cabacungan filed an action for annulment
of judgment and titles of land and/or reconveyance and/or reversion with preliminary injunction before the Regional Trial Court, Branch 43, of Roxas,
Oriental Mindoro, against the Bureau of Forest Development, Bureau of Lands, Land Bank of the Philippines and the heirs of Bernardo del Mundo,
namely, Fe, Corazon, Josefa, Salvador and Carmen.
In the course of the proceedings, the parties (both petitioners and respondents) filed various motions with the trial court. Among these were: (1) the
motion filed by petitioners to declare the respondent heirs, the Bureau of Lands and the Bureau of Forest Development in default and (2) the motions
to dismiss filed by the respondent heirs and the Land Bank of the Philippines, respectively.
In an order dated May 16, 1997, the trial court, presided by public respondent Judge Antonio N. Rosales, resolved the foregoing motions as follows:
(1) the petitioners’ motion to declare respondents Bureau of Lands and Bureau of Forest Development in default was granted for their failure to file
an answer, but denied as against the respondent heirs of del Mundo because the substituted service of summons on them was improper; (2) the
Land Bank’s motion to dismiss for lack of cause of action was denied because there were hypothetical admissions and matters that could be
determined only after trial, and (3) the motion to dismiss filed by respondent heirs of del Mundo, based on prescription, was also denied because
there were factual matters that could be determined only after trial.1
The respondent heirs filed a motion for reconsideration of the order denying their motion to dismiss on the ground that the trial court could very
well resolve the issue of prescription from the bare allegations of the complaint itself without waiting for the trial proper.
In an order2 dated February 12, 1998, the trial court dismissed petitioners’ complaint on the ground that the action had already prescribed. Petitioners
allegedly received a copy of the order of dismissal on March 3, 1998 and, on the 15th day thereafter or on March 18, 1998, filed a motion for
reconsideration. On July 1, 1998, the trial court issued another order dismissing the motion for reconsideration 3 which petitioners received on July
22, 1998. Five days later, on July 27, 1998, petitioners filed a notice of appeal4 and paid the appeal fees on August 3, 1998.
On August 4, 1998, the court a quo denied the notice of appeal, holding that it was filed eight days late.5 This was received by petitioners on July 31,
1998. Petitioners filed a motion for reconsideration but this too was denied in an order dated September 3, 1998. 6
Via a petition for certiorari and mandamus under Rule 65 of the 1997 Rules of Civil Procedure, petitioners assailed the dismissal of the notice of
appeal before the Court of Appeals.
In the appellate court, petitioners claimed that they had seasonably filed their notice of appeal. They argued that the 15-day reglementary period to
appeal started to run only on July 22, 1998 since this was the day they received the final order of the trial court denying their motion for
reconsideration. When they filed their notice of appeal on July 27, 1998, only five days had elapsed and they were well within the reglementary
period for appeal.7
On September 16, 1999, the Court of Appeals (CA) dismissed the petition. It ruled that the 15-day period to appeal should have been reckoned from
March 3, 1998 or the day they received the February 12, 1998 order dismissing their complaint. According to the appellate court, the order was the
"final order" appealable under the Rules. It held further:
Perforce the petitioners’ tardy appeal was correctly dismissed for the (P)erfection of an appeal within the reglementary period and in the manner
prescribed by law is jurisdictional and non-compliance with such legal requirement is fatal and effectively renders the judgment final and executory.8
Petitioners filed a motion for reconsideration of the aforementioned decision. This was denied by the Court of Appeals on January 6, 2000.
In this present petition for review under Rule 45 of the Rules, petitioners ascribe the following errors allegedly committed by the appellate court:
I
THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE PETITIONERS’ PETITION FOR CERTIORARI AND MANDAMUS AND IN AFFIRMING THE
ORDER OF THE HON. JUDGE ANTONIO N. ROSALES WHICH DISMISSED THE PETITIONERS’ APPEAL IN CIVIL CASE NO. C-36 OF THE REGIONAL TRIAL
COURT, BRANCH 43, ROXAS, ORIENTAL MINDORO, EVEN AFTER THE PETITIONERS HAD PAID THE APPEAL DOCKET FEES.
II
THE HONORABLE COURT OF APPEALS LIKEWISE ERRED IN RULING AND AFFIRMING THE DECISION OR ORDER OF THE RESPONDENT HON. ANTONIO
M. ROSALES THAT PETITIONERS’ APPEAL WAS FILED OUT OF TIME WHEN PETITIONERS RECEIVED THE LAST OR FINAL ORDER OF THE COURT ON JULY
22, 1998 AND FILED THEIR NOTICE OF APPEAL ON JULY 27, 1998 AND PAID THE APPEAL DOCKET FEE ON AUGUST 3, 1998.
III
THE HONORABLE COURT OF APPEALS FURTHER ERRED IN RULING THAT THE WORDS "FINAL ORDER" IN SECTION 3, RULE 41, OF THE 1997 RULES OF
CIVIL PROCEDURE WILL REFER TO THE [FIRST] ORDER OF RESPONDENT JUDGE HON. ANTONIO M. MORALES DATED FEBRUARY 12, 1998 INSTEAD OF
THE LAST AND FINAL ORDER DATED JULY 1, 1998 COPY OF WHICH WAS RECEIVED BY PETITIONERS THROUGH COUNSEL ON JULY 22, 1998.
IV.
THE HONORABLE COURT OF APPEALS FINALLY ERRED IN FINDING THAT THE DECISION IN THE CASE OF DENSO, INC. V. IAC, 148 SCRA 280, IS
APPLICABLE IN THE INSTANT CASE THEREBY IGNORING THE PECULIAR FACTS AND CIRCUMSTANCES OF THIS CASE AND THE FACT THAT THE SAID
DECISION WAS RENDERED PRIOR TO THE ENACTMENT OF THE 1997 RULES OF CIVIL PROCEDURE. 9
The foregoing issues essentially revolve around the period within which petitioners should have filed their notice of appeal.

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First and foremost, the right to appeal is neither a natural right nor a part of due process. It is merely a statutory privilege and may be exercised only
in the manner and in accordance with the provisions of law. Thus, one who seeks to avail of the right to appeal must comply with the requirements
of the Rules. Failure to do so often leads to the loss of the right to appeal. 10 The period to appeal is fixed by both statute and procedural rules. BP
129,11 as amended, provides:
Sec. 39. Appeals. – The period for appeal from final orders, resolutions, awards, judgments, or decisions of any court in all these cases shall be fifteen
(15) days counted from the notice of the final order, resolution, award, judgment, or decision appealed from. Provided, however, that in habeas
corpus cases, the period for appeal shall be (48) forty-eight hours from the notice of judgment appealed from. x x x
Rule 41, Section 3 of the 1997 Rules of Civil Procedure states:
SEC. 3. Period of ordinary appeal. ― The appeal shall be taken within fifteen (15) days from the notice of the judgment or final order appealed
from. Where a record on appeal is required, the appellant shall file a notice of appeal and a record on appeal within thirty (30) days from the notice
of judgment or final order.
The period to appeal shall be interrupted by a timely motion for new trial or reconsideration. No motion for extension of time to file a motion for
new trial or reconsideration shall be allowed. (emphasis supplied)
Based on the foregoing, an appeal should be taken within 15 days from the notice of judgment or final order appealed from. A final judgment or
order is one that finally disposes of a case, leaving nothing more for the court to do with respect to it. It is an adjudication on the merits which,
considering the evidence presented at the trial, declares categorically what the rights and obligations of the parties are; or it may be an order or
judgment that dismisses an action.12
As already mentioned, petitioners argue that the order of July 1, 1998 denying their motion for reconsideration should be construed as the "final
order," not the February 12, 1998 order which dismissed their complaint. Since they received their copy of the denial of their motion for
reconsideration only on July 22, 1998, the 15-day reglementary period to appeal had not yet lapsed when they filed their notice of appeal on July 27,
1998.
What therefore should be deemed as the "final order," receipt of which triggers the start of the 15-day reglementary period to appeal ¾ the February
12, 1998 order dismissing the complaint or the July 1, 1998 order dismissing the MR?
In the recent case of Quelnan v. VHF Philippines, Inc.,13 the trial court declared petitioner Quelnan non-suited and accordingly dismissed his
complaint. Upon receipt of the order of dismissal, he filed an omnibus motion to set it aside. When the omnibus motion was filed, 12 days of the 15-
day period to appeal the order had lapsed. He later on received another order, this time dismissing his omnibus motion. He then filed his notice of
appeal. But this was likewise dismissed ― for having been filed out of time.
The court a quo ruled that petitioner should have appealed within 15 days after the dismissal of his complaint since this was the final order that was
appealable under the Rules. We reversed the trial court and declared that it was the denial of the motion for reconsideration of an order of dismissal
of a complaint which constituted the final order as it was what ended the issues raised there.
This pronouncement was reiterated in the more recent case of Apuyan v. Haldeman et al.14 where we again considered the order denying petitioner
Apuyan’s motion for reconsideration as the final order which finally disposed of the issues involved in the case.
Based on the aforementioned cases, we sustain petitioners’ view that the order dated July 1, 1998 denying their motion for reconsideration was
the final order contemplated in the Rules.
We now come to the next question: if July 1, 1998 was the start of the 15-day reglementary period to appeal, did petitioners in fact file their notice
of appeal on time?
Under Rule 41, Section 3, petitioners had 15 days from notice of judgment or final order to appeal the decision of the trial court. On the 15th day of
the original appeal period (March 18, 1998), petitioners did not file a notice of appeal but instead opted to file a motion for reconsideration. According
to the trial court, the MR only interrupted the running of the 15-day appeal period.15 It ruled that petitioners, having filed their MR on the last day of
the 15-day reglementary period to appeal, had only one (1) day left to file the notice of appeal upon receipt of the notice of denial of their MR.
Petitioners, however, argue that they were entitled under the Rules to a fresh period of 15 days from receipt of the "final order" or the order dismissing
their motion for reconsideration.
In Quelnan and Apuyan, both petitioners filed a motion for reconsideration of the decision of the trial court. We ruled there that they only had the
remaining time of the 15-day appeal period to file the notice of appeal. We consistently applied this rule in similar cases, 16 premised on the long-
settled doctrine that the perfection of an appeal in the manner and within the period permitted by law is not only mandatory but also
jurisdictional.17 The rule is also founded on deep-seated considerations of public policy and sound practice that, at risk of occasional error, the
judgments and awards of courts must become final at some definite time fixed by law.18
Prior to the passage of BP 129, Rule 41, Section 3 of the 1964 Revised Rules of Court read:
Sec. 3. How appeal is taken. — Appeal maybe taken by serving upon the adverse party and filing with the trial court within thirty (30) days from
notice of order or judgment, a notice of appeal, an appeal bond, and a record on appeal. The time during which a motion to set aside the judgment
or order or for new trial has been pending shall be deducted, unless such motion fails to satisfy the requirements of Rule 37.
But where such motion has been filed during office hours of the last day of the period herein provided, the appeal must be perfected within the day
following that in which the party appealing received notice of the denial of said motion.19 (emphasis supplied)
According to the foregoing provision, the appeal period previously consisted of 30 days. BP 129, however, reduced this appeal period to 15 days. In
the deliberations of the Committee on Judicial Reorganization20 that drafted BP 129, the raison d’ etre behind the amendment was to shorten the
period of appeal21 and enhance the efficiency and dispensation of justice. We have since required strict observance of this reglementary period of
appeal. Seldom have we condoned late filing of notices of appeal, 22 and only in very exceptional instances to better serve the ends of justice.
In National Waterworks and Sewerage Authority and Authority v. Municipality of Libmanan,23 however, we declared that appeal is an essential part
of our judicial system and the rules of procedure should not be applied rigidly. This Court has on occasion advised the lower courts to be cautious
about not depriving a party of the right to appeal and that every party litigant should be afforded the amplest opportunity for the proper and just
disposition of his cause, free from the constraint of technicalities.
In de la Rosa v. Court of Appeals,24 we stated that, as a rule, periods which require litigants to do certain acts must be followed unless, under
exceptional circumstances, a delay in the filing of an appeal may be excused on grounds of substantial justice. There, we condoned the delay incurred
by the appealing party due to strong considerations of fairness and justice.
In setting aside technical infirmities and thereby giving due course to tardy appeals, we have not been oblivious to or unmindful of the extraordinary
situations that merit liberal application of the Rules. In those situations where technicalities were dispensed with, our decisions were not meant to
undermine the force and effectivity of the periods set by law. But we hasten to add that in those rare cases where procedural rules were not

2
stringently applied, there always existed a clear need to prevent the commission of a grave injustice. Our judicial system and the courts have always
tried to maintain a healthy balance between the strict enforcement of procedural laws and the guarantee that every litigant be given the full
opportunity for the just and proper disposition of his cause.25
The Supreme Court may promulgate procedural rules in all courts.26 It has the sole prerogative to amend, repeal or even establish new rules for a
more simplified and inexpensive process, and the speedy disposition of cases. In the rules governing appeals to it and to the Court of Appeals,
particularly Rules 42,27 4328 and 45,29 the Court allows extensions of time, based on justifiable and compelling reasons, for parties to file their appeals.
These extensions may consist of 15 days or more.
To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal their cases, the Court deems it practical to
allow a fresh period of 15 days within which to file the notice of appeal in the Regional Trial Court, counted from receipt of the order dismissing a
motion for a new trial or motion for reconsideration. 30
Henceforth, this "fresh period rule" shall also apply to Rule 40 governing appeals from the Municipal Trial Courts to the Regional Trial Courts; Rule
42 on petitions for review from the Regional Trial Courts to the Court of Appeals; Rule 43 on appeals from quasi-judicial agencies31 to the Court of
Appeals and Rule 45 governing appeals by certiorari to the Supreme Court.32 The new rule aims to regiment or make the appeal period uniform, to
be counted from receipt of the order denying the motion for new trial, motion for reconsideration (whether full or partial) or any final order or
resolution.
We thus hold that petitioners seasonably filed their notice of appeal within the fresh period of 15 days, counted from July 22, 1998 (the date of
receipt of notice denying their motion for reconsideration). This pronouncement is not inconsistent with Rule 41, Section 3 of the Rules which states
that the appeal shall be taken within 15 days from notice of judgment or final order appealed from. The use of the disjunctive word "or" signifies
disassociation and independence of one thing from another. It should, as a rule, be construed in the sense in which it ordinarily implies.33 Hence, the
use of "or" in the above provision supposes that the notice of appeal may be filed within 15 days from the notice of judgment or within 15 days from
notice of the "final order," which we already determined to refer to the July 1, 1998 order denying the motion for a new trial or reconsideration.
Neither does this new rule run counter to the spirit of Section 39 of BP 129 which shortened the appeal period from 30 days to 15 days to hasten the
disposition of cases. The original period of appeal (in this case March 3-18, 1998) remains and the requirement for strict compliance still applies. The
fresh period of 15 days becomes significant only when a party opts to file a motion for new trial or motion for reconsideration. In this manner, the
trial court which rendered the assailed decision is given another opportunity to review the case and, in the process, minimize and/or rectify any error
of judgment. While we aim to resolve cases with dispatch and to have judgments of courts become final at some definite time, we likewise aspire to
deliver justice fairly.
In this case, the new period of 15 days eradicates the confusion as to when the 15-day appeal period should be counted – from receipt of notice of
judgment (March 3, 1998) or from receipt of notice of "final order" appealed from (July 22, 1998).
To recapitulate, a party litigant may either file his notice of appeal within 15 days from receipt of the Regional Trial Court’s decision or file it within
15 days from receipt of the order (the "final order") denying his motion for new trial or motion for reconsideration. Obviously, the new 15-day period
may be availed of only if either motion is filed; otherwise, the decision becomes final and executory after the lapse of the original appeal period
provided in Rule 41, Section 3.
Petitioners here filed their notice of appeal on July 27, 1998 or five days from receipt of the order denying their motion for reconsideration on July
22, 1998. Hence, the notice of appeal was well within the fresh appeal period of 15 days, as already discussed.34
We deem it unnecessary to discuss the applicability of Denso (Philippines), Inc. v. IAC35 since the Court of Appeals never even referred to it in its
assailed decision.
WHEREFORE, the petition is hereby GRANTED and the assailed decision of the Court of Appeals REVERSED and SET ASIDE. Accordingly, let the
records of this case be remanded to the Court of Appeals for further proceedings.
No costs.
SO ORDERED.

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 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 193986 January 15, 2014
EASTERN SHIPPING LINES INC., Petitioner,
vs.
BPI/MS INSURANCE CORP. and MITSUI SUM TOMO INSURANCE CO. LTD., Respondents.
DECISION
VILLARAMA, JR., J.:
Before this Court is a petition1 for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, seeking the reversal of the
Decision2 of the Court of Appeals (CA) in CA-G.R. CV No. 88361, which affirmed with modification the Decision3 of the Regional Trial Court (RTC), of
Makati City, Branch 138 in Civil Case No. 04-1005.
The facts follow:
On August 29, 2003, Sumitomo Corporation (Sumitomo) shipped through MV Eastern Challenger V-9-S, a vessel owned by petitioner Eastern Shipping
Lines, Inc. (petitioner), 31 various steel sheets in coil weighing 271,828 kilograms from Yokohama, Japan for delivery in favor of the consignee Calamba
Steel Center Inc. (Calamba Steel).4 The cargo had a declared value of US$125,417.26 and was insured against all risk by Sumitomo with respondent
Mitsui Sumitomo Insurance Co., Ltd. (Mitsui). On or about September 6 2003, the shipment arrived at the port of Manila. Upon unloading from the
vessel, nine coils were observed to be in bad condition as evidenced by the Turn Over Survey of Bad Order Cargo No. 67327. The cargo was then
turned over to Asian Terminals, Inc. (ATI) for stevedoring, storage and safekeeping pending Calamba Steel’s withdrawal of the goods. When ATI
delivered the cargo to Calamba Steel, the latter rejected its damaged portion, valued at US$7,751.15, for being unfit for its intended purpose.5
Subsequently, on September 13, 2003, a second shipment of 28 steel sheets in coil, weighing 215,817 kilograms, was made by Sumitomo through
petitioner’s MV Eastern Challenger V-10-S for transport and delivery again to Calamba Steel. 6 Insured by Sumitomo against all risk with Mitsui,7 the
shipment had a declared value of US$121,362.59. This second shipment arrived at the port of Manila on or about September 23, 2003. However,
upon unloading of the cargo from the said vessel, 11 coils were found damaged as evidenced by the Turn Over Survey of Bad Order Cargo No. 67393.
The possession of the said cargo was then transferred to ATI for stevedoring, storage and safekeeping pending withdrawal thereof by Calamba Steel.
When ATI delivered the goods, Calamba Steel rejected the damaged portion thereof, valued at US$7,677.12, the same being unfit for its intended
purpose.8
Lastly, on September 29, 2003, Sumitomo again shipped 117 various steel sheets in coil weighing 930,718 kilograms through petitioner’s vessel, MV
Eastern Venus V-17-S, again in favor of Calamba Steel.9 This third shipment had a declared value of US$476,416.90 and was also insured by Sumitomo
with Mitsui. The same arrived at the port of Manila on or about October 11, 2003. Upon its discharge, six coils were observed to be in bad condition.
Thereafter, the possession of the cargo was turned over to ATI for stevedoring, storage and safekeeping pending withdrawal thereof by Calamba
Steel. The damaged portion of the goods being unfit for its intended purpose, Calamba Steel rejected the damaged portion, valued at US$14,782.05,
upon ATI’s delivery of the third shipment.10
Calamba Steel filed an insurance claim with Mitsui through the latter’s settling agent, respondent BPI/MS Insurance Corporation (BPI/MS), and the
former was paid the sums of US$7,677.12, US$14,782.05 and US$7,751.15 for the damage suffered by all three shipments or for the total amount of
US$30,210.32. Correlatively, on August 31, 2004, as insurer and subrogee of Calamba Steel, Mitsui and BPI/MS filed a Complaint for Damages against
petitioner and ATI.11
As synthesized by the RTC in its decision, during the pre-trial conference of the case, the following facts were established, viz:
1. The fact that there were shipments made on or about August 29, 2003, September 13, 2003 and September 29, 2003 by Sumitomo to
Calamba Steel through petitioner’s vessels;
2. The declared value of the said shipments and the fact that the shipments were insured by respondents;
3. The shipments arrived at the port of Manila on or about September 6, 2003, September 23, 2003 and October 11, 2003 respectively;
4. Respondents paid Calamba Steel’s total claim in the amount of US$30,210.32.12
Trial on the merits ensued.
On September 17, 2006, the RTC rendered its Decision,13 the dispositive portion of which provides:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against defendants Eastern Shipping Lines, Inc. and Asian Terminals, Inc.,
jointly and severally, ordering the latter to pay plaintiffs the following:
1. Actual damages amounting to US$30,210.32 plus 6% legal interest thereon commencing from the filing of this complaint, until the same
is fully paid;
2. Attorney’s fees in a sum equivalent to 25% of the amount claimed;
3. Costs of suit. The defendants’ counterclaims and ATI’s crossclaim are DISMISSED for lack of merit.
SO ORDERED.14
Aggrieved, petitioner and ATI appealed to the CA. On July 9, 2010, the CA in its assailed Decision affirmed with modification the RTC’s findings and
ruling, holding, among others, that both petitioner and ATI were very negligent in the handling of the subject cargoes. Pointing to the affidavit of
Mario Manuel, Cargo Surveyor, the CA found that "during the unloading operations, the steel coils were lifted from the vessel but were not carefully
laid on the ground. Some were even ‘dropped’ while still several inches from the ground while other coils bumped or hit one another at the pier
while being arranged by the stevedores and forklift operators of ATI and [petitioner]." The CA added that such finding coincides with the factual
findings of the RTC that both petitioner and ATI were both negligent in handling the goods. However, for failure of the RTC to state the justification
for the award of attorney’s fees in the body of its decision, the CA accordingly deleted the same. 15 Petitioner filed its Motion for
Reconsideration16 which the CA, however, denied in its Resolution17 dated October 6, 2010.
Both petitioner and ATI filed their respective separate petitions for review on certiorari before this Court.1âwphi1 However, ATI’s petition, docketed
as G.R. No. 192905, was denied by this Court in our Resolution18 dated October 6, 2010 for failure of ATI to show any reversible error in the assailed

4
CA decision and for failure of ATI to submit proper verification. Said resolution had become final and executory on March 22, 2011.19 Nevertheless,
this Court in its Resolution20 dated September 3, 2012, gave due course to this petition and directed the parties to file their respective memoranda.
In its Memorandum,21 petitioner essentially avers that the CA erred in affirming the decision of the RTC because the survey reports submitted by
respondents themselves as their own evidence and the pieces of evidence submitted by petitioner clearly show that the cause of the damage was
the rough handling of the goods by ATI during the discharging operations. Petitioner attests that it had no participation whatsoever in the discharging
operations and that petitioner did not have a choice in selecting the stevedore since ATI is the only arrastre operator mandated to conduct discharging
operations in the South Harbor. Thus, petitioner prays that it be absolved from any liability relative to the damage incurred by the goods.
On the other hand, respondents counter, among others, that as found by both the RTC and the CA, the goods suffered damage while still in the
possession of petitioner as evidenced by various Turn Over Surveys of Bad Order Cargoes which were unqualifiedly executed by petitioner’s own
surveyor, Rodrigo Victoria, together with the representative of ATI. Respondents assert that petitioner would not have executed such documents if
the goods, as it claims, did not suffer any damage prior to their turn-over to ATI. Lastly, respondents aver that petitioner, being a common carrier is
required by law to observe extraordinary diligence in the vigilance over the goods it carries.22
Simply put, the core issue in this case is whether the CA committed any reversible error in finding that petitioner is solidarily liable with ATI on account
of the damage incurred by the goods.
The Court resolves the issue in the negative.
Well entrenched in this jurisdiction is the rule that factual questions may not be raised before this Court in a petition for review on certiorari as this
Court is not a trier of facts. This is clearly stated in Section 1, Rule 45 of the 1997 Rules of Civil Procedure, as amended, which provides:
SECTION 1. Filing of petition with Supreme Court. — A party desiring to appeal by certiorari from a judgment or final order or resolution of the Court
of Appeals, the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law, may file with the Supreme Court a verified
petition for review on certiorari. The petition shall raise only questions of law which must be distinctly set forth.
Thus, it is settled that in petitions for review on certiorari, only questions of law may be put in issue. Questions of fact cannot be entertained.23
A question of law exists when the doubt or controversy concerns the correct application of law or jurisprudence to a certain set of facts, or when the
issue does not call for an examination of the probative value of the evidence presented, the truth or falsehood of facts being admitted. A question
of fact exists when the doubt or difference arises as to the truth or falsehood of facts or when the query invites calibration of the whole evidence
considering mainly the credibility of the witnesses, the existence and relevancy of specific surrounding circumstances as well as their relation to each
other and to the whole, and the probability of the situation.24
In this petition, the resolution of the question as to who between petitioner and ATI should be liable for the damage to the goods is indubitably
factual, and would clearly impose upon this Court the task of reviewing, examining and evaluating or weighing all over again the probative value of
the evidence presented25 – something which is not, as a rule, within the functions of this Court and within the office of a petition for review on
certiorari.
While it is true that the aforementioned rule admits of certain exceptions,26 this Court finds that none are applicable in this case. This Court finds no
cogent reason to disturb the factual findings of the RTC which were duly affirmed by the CA. Unanimous with the CA, this Court gives credence and
accords respect to the factual findings of the RTC – a special commercial court27 which has expertise and specialized knowledge on the subject
matter28 of maritime and admiralty – highlighting the solidary liability of both petitioner and ATI. The RTC judiciously found:
x x x The Turn Over Survey of Bad Order Cargoes (TOSBOC, for brevity) No. 67393 and Request for Bad Order Survey No. 57692 show that prior to
the turn over of the first shipment to the custody of ATI, eleven (11) of the twenty-eight (28) coils were already found in bad order condition. Eight
(8) of the said eleven coils were already "partly dented/crumpled " and the remaining three (3) were found "partly dented, scratches on inner hole,
crumple (sic)". On the other hand, the TOSBOC No. 67457 and Request for Bad Order Survey No. 57777 also show that prior to the turn over of the
second shipment to the custody of ATI, a total of six (6) coils thereof were already "partly dented on one side, crumpled/cover detach (sic)". These
documents were issued by ATI. The said TOSBOC’s were jointly executed by ATI, vessel’s representative and surveyor while the Requests for Bad
Order Survey were jointly executed by ATI, consignee’s representative and the Shed Supervisor. The aforementioned documents were corroborated
by the Damage Report dated 23 September 2003 and Turn Over Survey No. 15765 for the first shipment, Damage Report dated 13 October 2003 and
Turn Over Survey No. 15772 for the second shipment and, two Damage Reports dated 6 September 2003 and Turn Over Survey No. 15753 for the
third shipment.
It was shown to this Court that a Request for Bad Order Survey is a document which is requested by an interested party that incorporates therein
the details of the damage, if any, suffered by a shipped commodity. Also, a TOSBOC, usually issued by the arrastre contractor (ATI in this case), is a
form of certification that states therein the bad order condition of a particular cargo, as found prior to its turn over to the custody or possession of
the said arrastre contractor.
The said Damage Reports, Turn Over Survey Reports and Requests for Bad Order Survey led the Court to conclude that before the subject shipments
were turned over to ATI, the said cargo were already in bad order condition due to damage sustained during the sea voyage. Nevertheless, this Court
cannot turn a blind eye to the fact that there was also negligence on the part of the employees of ATI and [Eastern Shipping Lines, Inc.] in the
discharging of the cargo as observed by plaintiff’s witness, Mario Manuel, and [Eastern Shipping Lines, Inc.’s] witness, Rodrigo Victoria.
In ascertaining the cause of the damage to the subject shipments, Mario Manuel stated that the "coils were roughly handled during their discharging
from the vessel to the pier of (sic) ASIAN TERMINALS, INC. and even during the loading operations of these coils from the pier to the trucks that will
transport the coils to the consignee’s warehouse. During the aforesaid operations, the employees and forklift operators of EASTERN SHIPPING LINES
and ASIAN TERMINALS, INC. were very negligent in the handling of the subject cargoes. Specifically, "during unloading, the steel coils were lifted from
the vessel and not carefully laid on the ground, sometimes were even ‘dropped’ while still several inches from the ground. The tine (forklift blade) or
the portion that carries the coils used for the forklift is improper because it is pointed and sharp and the centering of the tine to the coils were
negligently done such that the pointed and sharp tine touched and caused scratches, tears and dents to the coils. Some of the coils were also dragged
by the forklift instead of being carefully lifted from one place to another. Some coils bump/hit one another at the pier while being arranged by the
stevedores/forklift operators of ASIAN TERMINALS, INC. and EASTERN SHIPPING LINES. 29 (Emphasis supplied.)
Verily, it is settled in maritime law jurisprudence that cargoes while being unloaded generally remain under the custody of the carrier.30 As
hereinbefore found by the RTC and affirmed by the CA based on the evidence presented, the goods were damaged even before they were turned
over to ATI. Such damage was even compounded by the negligent acts of petitioner and ATI which both mishandled the goods during the discharging
operations. Thus, it bears stressing unto petitioner that common carriers, from the nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence in the vigilance over the goods transported by them. Subject to certain exceptions enumerated under
Article 173431 of the Civil Code, common carriers are responsible for the loss, destruction, or deterioration of the goods. The extraordinary
responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for
transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive
them.32 Owing to this high degree of diligence required of them, common carriers, as a general rule, are presumed to have been at fault or negligent

5
if the goods they transported deteriorated or got lost or destroyed. That is, unless they prove that they exercised extraordinary diligence in
transporting the goods. In order to avoid responsibility for any loss or damage, therefore, they have the burden of proving that they observed such
high level of diligence.33 In this case, petitioner failed to hurdle such burden.
In sum, petitioner failed to show any reversible error on the part of the CA in affirming the ruling of the RTC as to warrant the modification, much
less the reversal of its assailed decision.
WHEREFORE, the petition is DENIED. The Decision dated July 9, 2010 of the Court of Appeals in CA-G.R. CV No. 88361 is hereby AFFIRMED.
With costs against the petitioner.
SO ORDERED.

6
 THIRD DIVISION
G.R. No. 131445 May 27, 2004
AMADO G. PEREZ (DECEASED) REPRESENTED BY HIS WIDOW GUILLERMA T. PEREZ, MARIO S. FRANCISCO, RAFAEL P. ARGAME, MIRASOL V.
MENDOZA, GLORIA S. GONZALVO AND MARIA FE V. BOMBASE, petitioners,
vs.
OFFICE OF THE OMBUDSMAN, MAYOR IGNACIO R. BUNYE, CARLOS G. DOMINGUEZ, ROGELIO P. MADRIAGA, RECTO CORONADO, TEODORA A.
DIANG, TOMAS M. OSIAS, REYNALDO CAMILON AND BENJAMIN BULOS, respondents.
DECISION
CORONA, J.:
This is an appeal by certiorari under Rule 45 from the November 13, 1997 resolution 1 of the Court of Appeals (CA) in CA G.R. SP No. 45127, dismissing
petitioners’ motion for reconsideration of its September 9, 1997 resolution 2 which in turn dismissed, for lack of jurisdiction, petitioners’ petition
for certiorari and mandamus. The petition questioned the Office of the Ombudsman’s April 11, 1997 dismissal of their criminal complaint against
Mayor Ignacio R. Bunye.
Petitioners, members of the Kilusang Bayan ng mga Magtitinda ng Bagong Pamilihang Bayan ng Muntinlupa, Inc. (KBMBPM), instituted two
complaints at the Office of the Ombudsman (docketed as OMB-0-89-0983 and OMB-0-89-1007) against several respondents, one of whom was then
Mayor Ignacio R. Bunye, for violation of RA 3019 (also known as the "Anti-Graft and Corrupt Practices Act"). Respondents allegedly destroyed the
doors of the KBMBPM office while serving on petitioners the Take-Over Order of the KBMBPM management dated October 28, 1998 issued by then
Agriculture Secretary Carlos G. Dominguez.
In disposing of said complaints on April 11, 1997, the Office of the Ombudsman issued a resolution (hereinafter, "Ombudsman resolution")3 excluding
respondent Bunye from the criminal indictment. The petitioners assailed the exclusion in the CA on September 1, 1997 through an original petition
for certiorari and mandamus. The CA, however, dismissed it for lack of jurisdiction supposedly in accordance with Section 27 of RA 6770 (also known
as the "Ombudsman Act of 1989"). Citing Yabut vs. Ombudsman,4 Alba vs. Nitorreda,,,,,,,5 and Angchangco vs. Ombudsman,6 the CA likewise denied
petitioners’ motion for reconsideration.
Hence, this petition for review.
The CA was correct in dismissing the petition for certiorari and mandamus.
It is the nature of the case that determines the proper remedy to be filed and the appellate court where such remedy should be filed by a party
aggrieved by the decisions or orders of the Office of the Ombudsman. If it is an administrative case, appeal should be taken to the Court of Appeals
under Rule 43 of the Rules of Court.7 If it is a criminal case, the proper remedy is to file with the Supreme Court an original petition for certiorari under
Rule 65.8
We find that, although the CA was correct in dismissing the petition for certiorari, it erroneously invoked as ratio decidendi Section 27 of RA
67709 which applies in administrative cases only, not criminal cases,10 such as the graft and corruption charge at bar. In our en banc decision in Fabian
vs. Desierto,11 which is still controlling, we held that Section 27 applies only whenever an appeal by certiorari under Rule 45 is taken from a decision
in an administrative disciplinary action. Nevertheless, we declared Section 27 unconstitutional for expanding the Supreme Court’s appellate
jurisdiction without its advice and consent. We thus held that all appeals from decisions of the Office of the Ombudsman in administrative disciplinary
cases should be taken to the Court of Appeals under Rule 43 of the 1997 Rules of Court.
As the present controversy pertained to a criminal case, the petitioners were correct in availing of the remedy of petition for certiorari under Rule 65
but they erred in filing it in the Court of Appeals. The procedure set out in Kuizon vs. Ombudsman12 and Mendoza-Arce vs.
Ombudsman,13 requiring that petitions for certiorari questioning the Ombudsman’s orders or decisions in criminal cases should be filed in the
Supreme Court and not the Court of Appeals, is still the prevailing rule.14
But even if the petition for certiorari had been filed in this Court, we would have dismissed it just the same. First, petitioners should have filed a
motion for reconsideration of the Ombudsman resolution as it was the plain, speedy and adequate remedy in the ordinary course of law, not filing a
petition for certiorari directly in the Supreme Court. Second, the Office of the Ombudsman did not act without or in excess of its jurisdiction or with
grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the Ombudsman resolution.
Grave abuse of discretion implies a capricious and whimsical exercise of judgment tantamount to lack of jurisdiction. In other words, the exercise of
power is in an arbitrary or despotic manner by reason of passion or personal hostility. It must be so patent and gross as to amount to an evasion of
positive duty or a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. 15
In this case, there was no grave abuse of discretion on the part of the Office of the Ombudsman in dismissing the complaint against respondent
Bunye upon the factual finding that:
xxx xxx xxx
Indeed no evidence is shown in the record that respondent Mayor Bunye specifically participated in the violent implementation of Secretary
Dominguez’ Order of October 28, 1988. It was not shown with certainty by complainant that the alleged presence of respondent Mayor
Bunye at the scene of the incident was an active participation thereof by the latter.
On the other hand, if the alleged presence of the respondent Mayor Bunye at the scene were really true, such would not be improper because of the
provision of Article 87, par. 2 (VI) of the Local [G]overnment Code which states:
"x x x call upon the appropriate law enforcement agencies to restore disorder, riot, lawless violence, rebellion or sedition or to apprehend
violators of the law when public interest so requires, and the municipal police force are inadequate to cope with the situation or the
violators." (underlining supplied)
Anent the alleged letter dated August 8, 1988 of respondent Mayor Bunye, the same seems only a request for the suspension of
complainant. He did not take it upon himself to issue any suspension of complainant. At that point in time, the respondent Mayor Bunye
reasonably believed that the Order of Secretary Dominguez was valid. Besides, the facts and the evidence on record do not show any
interest personal or otherwise on the part of respondent Mayor Bunye in the implementation of Secretary Dominguez’ Order. Accordingly,
the exclusion of respondent Mayor Bunye from the criminal charge and the dismissal of the complaint against him are in order.
Furthermore, if at the instance of complaint, respondents (sic) Secretary Dominguez whose Order dated October 28, 1988 was questioned
by the complainant and Atty. Rogelio Madriaga, who allegedly orchestrated the implementation of the said Order were dropped from the
complaint, how can respondent Bunye be liable for the same act, if as alleged, he was merely standing in front of the KBS Building, New
Muntinlupa Market?

7
 It will be noted that at the time of the alleged implementation of the Order on October 29, 1988 and the take-over of the Management
and operation of the KBMBPM cooperative, respondent Bunye apparently believed that the said Order of Secretary Dominguez was valid.
Considering the earlier approval of the Honorable Ombudsman on the memorandum of then SPO III, now Director Wendell E. Barreras-
Sulit as reiterated in the memorandum of the Honorable Assistant to the Ombudsman re: the exclusion of respondent Bunye from criminal
indictment, undersigned respectfully concurs with the same.
xxx xxx x x x.16
We have consistently refrained from interfering with the investigatory and prosecutorial powers of the Ombudsman absent any compelling
reason.17 This policy is based on constitutional, statutory and practical considerations. We are mindful that the Constitution and RA 6770 endowed
the Office of the Ombudsman with a wide latitude of investigatory and prosecutorial powers, virtually free from legislative, executive or judicial
intervention, in order to insulate it from outside pressure and improper influence. 18 Moreover, a preliminary investigation is in effect a realistic
judicial appraisal of the merits of the case. Sufficient proof of the guilt of the accused must be adduced so that when the case is tried, the trial court
may not be bound, as a matter of law, to order an acquittal.19 Hence, if the Ombudsman, using professional judgment, finds the case dismissible, the
Court shall respect such findings, unless clothed with grave abuse of discretion.20 Otherwise, the functions of the courts will be grievously hampered
by innumerable petitions assailing the dismissal of investigatory proceedings conducted by the Office of the Ombudsman with regard to complaints
filed before it. In much the same way, the courts will be swamped with cases if they will have to review the exercise of discretion on the part of fiscals
or prosecuting attorneys each time the latter decide to file an information in court or dismiss a complaint by a private complainant.21
WHEREFORE, the petition is hereby DENIED for lack of merit.
SO ORDERED.

8
 FIRST DIVISION
G.R. No. 159926, January 20, 2014
PINAUSUKAN SEAFOOD HOUSE, ROXAS BOULEVARD, INC., Petitioner, v. FAR EAST BANK & TRUST COMPANY, NOW BANK OF THE PHILIPPINE
ISLANDS AND HECTOR IL. GALURA, Respondents.
DECISION
BERSAMIN, J.:
Extrinsic fraud, as a ground for the annulment of a judgment, must emanate from an act of the adverse party, and the fraud must be of such nature
as to have deprived the petitioner of its day in court. The fraud is not extrinsic if the act was committed by the petitioner�s own counsel.
The Case

This appeal seeks to undo the dismissal by the Court of Appeals (CA) of the petitioner�s action for annulment of judgment through the assailed
resolution promulgated on July 31, 2003,1 as well as the denial of its motion for reconsideration on September 12, 2003.2
Antecedents

On various dates in 1993, Bonier de Guzman (Bonier), then the President of petitioner corporation (Pinausukan, for short), executed four real
estate mortgages involving the petitioner�s 517 square meter parcel of land situated in Pasay City 3 in favor of Far East Bank and Trust Company
(now Bank of Philippine Islands), to be referred to herein as the Bank. The parcel of land was registered in Transfer Certificate of Title No. 126636 of
the Register of Deeds of Pasay City under the name of Pinausukan.4 When the unpaid obligation secured by the mortgages had ballooned to
P15,129,303.67 as of June 2001, the Bank commenced proceedings for the extrajudicial foreclosure of the mortgages on August 13, 2001 in the
Office of the Ex Officio Sheriff, Regional Trial Court (RTC), in Pasay City.5 Two weeks thereafter, the sheriff issued the notice of sheriff�s sale,
setting the public auction on October 8, 2001 at the main entrance of the Hall of Justice of Pasay City.6

Learning of the impending sale of its property by reason of the foreclosure of the mortgages, Pinausukan, represented by Zsae Carrie de Guzman,
brought against the Bank and the sheriff an action for the annulment of real estate mortgages in the RTC on October 4, 2001 (Civil Case No.
01�0300), averring that Bonier had obtained the loans only in his personal capacity and had constituted the mortgages on the corporate asset
without Pinausukan�s consent through a board resolution. The case was assigned to Branch 108.7 Pinausukan applied for the issuance of a
temporary restraining order or writ of preliminary injunction to enjoin the Bank and the sheriff from proceeding with the extrajudicial foreclosure
and the public auction.

In the ensuing trial of Civil Case No. 01�0300, Pinausukan presented Zsae Carrie de Guzman as its first witness on May 30, 2002. However, the
subsequent hearing dates were reset several times. In August 2002, the parties informed the RTC about their attempts to settle the case.

The counsels of the parties did not appear in court on the hearing scheduled on September 5, 2002 despite having agreed thereto. Accordingly, on
October 31, 2002, the RTC dismissed Civil Case No. 01�0300 for failure to prosecute.8 The order of dismissal attained finality.9

On June 24, 2003, the sheriff issued a notice of extrajudicial sale concerning the property of Pinausukan. 10 The notice was received by Pinausukan a
week later.

Claiming surprise over the turn of events, Pinausukan inquired from the RTC and learned that Atty. Michael Dale Villaflor (Atty. Villaflor), its counsel
of record, had not informed it about the order of dismissal issued on October 31, 2002.

On July 24, 2003, Pinausukan brought the petition for annulment in the CA seeking the nullification of the order of October 31, 2002 dismissing Civil
Case No. 01�0300. Its petition, under the verification of Roxanne de Guzman�San Pedro (Roxanne), who was one of its Directors, and
concurrently its Executive Vice President for Finance and Treasurer, stated that its counsel had been guilty of gross and palpable negligence in
failing to keep track of the case he was handling, and in failing to apprise Pinausukan of the developments on the case. It further pertinently stated
as follows:
6. Inquiry from counsel, Atty. Michael Dale T. Villaflor disclosed that although the Registry Return Receipt indicated that he received the Order on
November 28, 2002, according to him, as of said date, he no longer holds office at 12th Floor, Ever Gotesco Corporate Center, 1958 C.M. Recto
Avenue, Manila but has transferred to Vecation (sic) Club, Inc., with office address 10th Floor Rufino Tower, Ayala Avenue, Makati City. Petitioner
was never notified of the change of office and address of its attorney.

7. The palpable negligence of counsel to keep track of the case he was handling constituted professional misconduct amounting to extrinsic fraud
properly warranting the annulment of the Order dated October 31, 2003 as petitioner was unduly deprived of its right to present evidence in Civil
Case No. 01�0300 through no fault of its own.11

On July 31, 2003, the CA dismissed the petition for annulment,12 citing the failure to attach the affidavits of witnesses attesting to and describing
the alleged extrinsic fraud supporting the cause of action as required by Section 4, Rule 47 of the Rules of Court; and observing that the verified
petition related only to the correctness of its allegations, a requirement entirely different and separate from the affidavits of witnesses required
under Rule 47 of the Rules of Court.

On September 12, 2003,13 the CA denied Pinausukan�s motion for reconsideration.

Issue

Pinausukan posits that the requirement for attaching the affidavits of witnesses to the petition for annulment should be relaxed; that even if
Roxanne had executed the required affidavit as a witness on the extrinsic fraud, she would only repeat therein the allegations already in the
petition, thereby duplicating her allegations under her oath; that the negligence of Atty. Villaflor, in whom it entirely relied upon, should not
preclude it from obtaining relief; and that it needed a chance to prove in the RTC that Bonier had no right to mortgage its property.
Ruling

The appeals lacks merit.

9
1.
Nature and statutory requirements for
an action to annul a judgment or final order

The remedy of annulment of judgment has been long authorized and sanctioned in the Philippines. In Banco Espa�ol�Filipino v. Palanca,14 of
1918 vintage, the Court, through Justice Street, recognized that there were only two remedies available under the rules of procedure in force at the
time to a party aggrieved by a decision of the Court of First Instance (CFI) that had already attained finality, namely: that under Sec. 113, Code of
Civil Procedure, which was akin to the petition for relief from judgment under Rule 38, Rules of Court; and that under Sec. 513, Code of Civil
Procedure, which stipulated that the party aggrieved under a judgment rendered by the CFI �upon default� and who had been �deprived of
a hearing by fraud, accident, mistake or excusable negligence� and the CFI had �finally adjourned so that no adequate remedy exists in that
court� could �present his petition to the Supreme Court within sixty days after he first learns of the rendition of such judgment, and not
thereafter, setting forth the facts and praying to have judgment set aside.�15 It categorically ruled out a mere motion filed for that purpose in the
same action as a proper remedy.

The jurisdiction over the action for the annulment of judgment had been lodged in the CFI as a court of general jurisdiction on the basis that the
subject matter of the action was not capable of pecuniary estimation. Section 56, paragraph 1, of Act No. 136 (An Act providing for the
Organization of Courts in the Philippine Islands), effective on June 11, 1901, vested original jurisdiction in the CFI over �all civil actions in which
the subject of litigations is not capable of pecuniary estimation.� The CFI retained its jurisdiction under Section 44(a) of Republic Act No. 296 (The
Judiciary Act of 1948), effective on June 17, 1948, which contained a similar provision vesting original jurisdiction in the CFI over �all civil actions
in which the subject of the litigation is not capable of pecuniary estimation.�

In the period under the regimes of Act No. 136 and Republic Act No. 296, the issues centered on which CFI, or branch thereof, had the jurisdiction
over the action for the annulment of judgment. It was held in Mas v. Dumara�og16 that �the power to open, modify or vacate a judgment is
not only possessed by, but is restricted to the court in which the judgment was rendered.� In J.M. Tuason & Co., Inc. v. Torres,17 the Court
declared that �the jurisdiction to annul a judgment of a branch of the Court of First Instance belongs solely to the very same branch which
rendered the judgment.� In Sterling Investment Corporation v. Ruiz,18 the Court enjoined a branch of the CFI of Rizal from taking cognizance of an
action filed with it to annul the judgment of another branch of the same court.

In Dulap v. Court of Appeals,19 the Court observed that the philosophy underlying the pronouncements in these cases was the policy of judicial
stability, as expressed in Dumara�og, to the end that the judgment of a court of competent jurisdiction could not be interfered with by any court
of concurrent jurisdiction. Seeing that the pronouncements in Dumara�og, J.M. Tuason & Co., Inc. and Sterling Investment confining the
jurisdiction to annul a judgment to the court or its branch rendering the judgment would �practically amount to judicial legislation,� the Court
found the occasion to re�examine the pronouncements. Observing that the plaintiff�s cause of action in an action to annul the judgment of a
court �springs from the alleged nullity of the judgment based on one ground or another, particularly fraud, which fact affords the plaintiff a right
to judicial interference in his behalf,� and that that the two cases were distinct and separate from each other because �the cause of action (to
annul judgment) is entirely different from that in the action which gave rise to the judgment sought to be annulled, for a direct attack against a
final and executory judgment is not incidental to, but is the main object of, the proceeding,� the Court concluded that �there is no plausible
reason why the venue of the action to annul the judgment should necessarily follow the venue of the previous action� if the outcome was not
only to violate the existing rule on venue for personal actions but also to limit the opportunity for the application of such rule on venue for personal
actions.20 The Court observed that the doctrine under Dumara�og, J.M. Tuason & Co., Inc. and Sterling Investment could then very well �result
in the difficulties precisely sought to be avoided by the rules; for it could be that at the time of the filing of the second action for annulment,
neither the plaintiff nor the defendant resides in the same place where either or both of them did when the first action was commenced and
tried,� thus unduly depriving the parties of the right expressly given them by the Rules of Court �to change or transfer venue from one
province to another by written agreement � a right conferred upon them for their own convenience and to minimize their expenses in the
litigation � and renders innocuous the provision on waiver of improper venue in Section 4 (of Rule 4 of the Revised Rules of Court).�21 The
Court eventually ruled:
Our conclusion must therefore be that a court of first instance or a branch thereof has the authority and jurisdiction to take cognizance of, and to
act in, a suit to annul a final and executory judgment or order rendered by another court of first instance or by another branch of the same court.
The policy of judicial stability, which underlies the doctrine laid down in the cases of Dumara�og, J.M. Tuason & Co., Inc. and Sterling Investment
Corporation, et al., supra, should be held subordinate to an orderly administration of justice based on the existing rules of procedure and the
law.22 x x x

In 1981, the Legislature enacted Batas Pambansa Blg. 129 (Judiciary Reorganization Act of 1980).23 Among several innovations of this legislative
enactment was the formal establishment of the annulment of a judgment or final order as an action independent from the generic classification of
litigations in which the subject matter was not capable of pecuniary estimation, and expressly vested the exclusive original jurisdiction over such
action in the CA.24 The action in which the subject of the litigation was incapable of pecuniary estimation continued to be under the exclusive
original jurisdiction of the RTC, which replaced the CFI as the court of general jurisdiction. 25 Since then, the RTC no longer had jurisdiction over an
action to annul the judgment of the RTC, eliminating all concerns about judicial stability. To implement this change, the Court introduced a new
procedure to govern the action to annul the judgment of the RTC in the 1997 revision of the Rules of Court under Rule 47, directing in Section 2
thereof that �[t]he annulment may be based only on the grounds of extrinsic fraud and lack of jurisdiction.� 26

The Court has expounded on the nature of the remedy of annulment of judgment or final order in Dare Adventure Farm Corporation v. Court of
Appeals,27viz:
A petition for annulment of judgment is a remedy in equity so exceptional in nature that it may be availed of only when other remedies are
wanting, and only if the judgment, final order or final resolution sought to be annulled was rendered by a court lacking jurisdiction or through
extrinsic fraud. Yet, the remedy, being exceptional in character, is not allowed to be so easily and readily abused by parties aggrieved by the final
judgments, orders or resolutions. The Court has thus instituted safeguards by limiting the grounds for the annulment to lack of jurisdiction and
extrinsic fraud, and by prescribing in Section 1 of Rule 47 of the Rules of Court that the petitioner should show that the ordinary remedies of new
trial, appeal, petition for relief or other appropriate remedies are no longer available through no fault of the petitioner. A petition for annulment
that ignores or disregards any of the safeguards cannot prosper.

The attitude of judicial reluctance towards the annulment of a judgment, final order or final resolution is understandable, for the remedy
disregards the time�honored doctrine of immutability and unalterability of final judgments, a solid corner stone in the dispensation of justice by
the courts. The doctrine of immutability and unalterability serves a two�fold purpose, namely: (a) to avoid delay in the administration of justice
and thus, procedurally, to make orderly the discharge of judicial business; and (b) to put an end to judicial controversies, at the risk of occasional
errors, which is precisely why the courts exist. As to the first, a judgment that has acquired finality becomes immutable and unalterable and is no

10
longer to be modified in any respect even if the modification is meant to correct an erroneous conclusion of fact or of law, and whether the
modification is made by the court that rendered the decision or by the highest court of the land. As to the latter, controversies cannot drag on
indefinitely because fundamental considerations of public policy and sound practice demand that the rights and obligations of every litigant must
not hang in suspense for an indefinite period of time.

The objective of the remedy of annulment of judgment or final order is to undo or set aside the judgment or final order, and thereby grant to the
petitioner an opportunity to prosecute his cause or to ventilate his defense. If the ground relied upon is lack of jurisdiction, the entire proceedings
are set aside without prejudice to the original action being refiled in the proper court. 28 If the judgment or final order or resolution is set aside on
the ground of extrinsic fraud, the CA may on motion order the trial court to try the case as if a timely motion for new trial had been granted
therein.29 The remedy is by no means an appeal whereby the correctness of the assailed judgment or final order is in issue; hence, the CA is not
called upon to address each error allegedly committed by the trial court.30

Given the extraordinary nature and the objective of the remedy of annulment of judgment or final order, Pinausukan must be mindful of and
should closely comply with the following statutory requirements for the remedy as set forth in Rule 47 of the Rules of Court.

The first requirement prescribes that the remedy is available only when the petitioner can no longer resort to the ordinary remedies of new trial,
appeal, petition for relief or other appropriate remedies through no fault of the petitioner.31 This means that the remedy, although seen as �a
last remedy,�32 is not an alternative to the ordinary remedies of new trial, appeal and petition for relief. The petition must aver, therefore, that
the petitioner failed to move for a new trial, or to appeal, or to file a petition for relief without fault on his part. But this requirement to aver is not
imposed when the ground for the petition is lack of jurisdiction (whether alleged singly or in combination with extrinsic fraud), simply because the
judgment or final order, being void, may be assailed at any time either collaterally or by direct action or by resisting such judgment or final order in
any action or proceeding whenever it is invoked, unless the ground of lack of jurisdiction is meanwhile barred by laches.33

The second requirement limits the ground for the action of annulment of judgment to either extrinsic fraud or lack of jurisdiction.

Not every kind of fraud justifies the action of annulment of judgment. Only extrinsic fraud does. Fraud is extrinsic, according to Cosmic Lumber
Corporation v. Court of Appeals,34 �where the unsuccessful party has been prevented from exhibiting fully his case, by fraud or deception
practiced on him by his opponent, as by keeping him away from court, a false promise of a compromise; or where the defendant never had
knowledge of the suit, being kept in ignorance by the acts of the plaintiff; or where an attorney fraudulently or without authority connives at his
defeat; these and similar cases which show that there has never been a real contest in the trial or hearing of the case are reasons for which a new
suit may be sustained to set aside and annul the former judgment and open the case for a new and fair hearing.�

The overriding consideration when extrinsic fraud is alleged is that the fraudulent scheme of the prevailing litigant prevented the petitioner from
having his day in court.35 Nonetheless, extrinsic fraud shall not be a valid ground if it was availed of, or could have been availed of, in a motion for
new trial or petition for relief.36

In contrast, intrinsic fraud refers to the acts of a party at a trial that prevented a fair and just determination of the case, but the difference is that
the acts or things, like falsification and false testimony, could have been litigated and determined at the trial or adjudication of the case. 37 In other
words, intrinsic fraud does not deprive the petitioner of his day in court because he can guard against that kind of fraud through so many means,
including a thorough trial preparation, a skillful cross�examination, resorting to the modes of discovery, and proper scientific or forensic
applications. Indeed, forgery of documents and evidence for use at the trial and perjury in court testimony have been regarded as not preventing
the participation of any party in the proceedings, and are not, therefore, constitutive of extrinsic fraud. 38

Lack of jurisdiction on the part of the trial court in rendering the judgment or final order is either lack of jurisdiction over the subject matter or
nature of the action, or lack of jurisdiction over the person of the petitioner. The former is a matter of substantive law because statutory law
defines the jurisdiction of the courts over the subject matter or nature of the action. The latter is a matter of procedural law, for it involves the
service of summons or other process on the petitioner. A judgment or final order issued by the trial court without jurisdiction over the subject
matter or nature of the action is always void, and, in the words of Justice Street in Banco Espa�ol�Filipino v. Palanca,39 �in this sense it may
be said to be a lawless thing, which can be treated as an outlaw and slain at sight, or ignored wherever and whenever it exhibits its head.�40 But
the defect of lack of jurisdiction over the person, being a matter of procedural law, may be waived by the party concerned either expressly or
impliedly.

The third requirement sets the time for the filing of the action. The action, if based on extrinsic fraud, must be filed within four years from the
discovery of the extrinsic fraud; and if based on lack of jurisdiction, must be brought before it is barred by laches or estoppel.

Laches is the failure or neglect for an unreasonable and unexplained length of time to do that which by exercising due diligence could nor should
have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it.41 Its other name is stale demands, and it is based upon grounds of public policy that
requires, for the peace of society, the discouragement of stale claims and, unlike the statute of limitations, is not a mere question of time but is
principally a question of the inequity or unfairness of permitting a right or claim to be enforced or asserted. 42 The existence of four elements must
be shown in order to validate laches as a defense, to wit: (a) conduct on the part of the defendant, or of one under whom a claim is made, giving
rise to a situation for which a complaint is filed and a remedy sought; (b) delay in asserting the rights of the complainant, who has knowledge or
notice of the defendant�s conduct and has been afforded an opportunity to institute a suit; (c) lack of knowledge or notice on the part of the
defendant that the complainant will assert the right on which the latter has based the suit; and (d) injury or prejudice to the defendant in the event
that the complainant is granted a relief or the suit is not deemed barred.43

Estoppel precludes a person who has admitted or made a representation about something as true from denying or disproving it against anyone
else relying on his admission or representation.44 Thus, our law on evidence regards estoppel as conclusive by stating that �[w]henever a party
has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing true, and to act upon such
belief, he cannot, in any litigation arising out of such declaration, act or omission, be permitted to falsify it.� 45

The fourth requirement demands that the petition should be verified, and should allege with particularity the facts and the law relied upon for
annulment, as well as those supporting the petitioner�s good and substantial cause of action or defense, as the case may be.46 The need for
particularity cannot be dispensed with because averring the circumstances constituting either fraud or mistake with particularity is a universal
requirement in the rules of pleading.47 The petition is to be filed in seven clearly legible copies, together with sufficient copies corresponding to the
number of respondents, and shall contain essential submissions, specifically: (a) the certified true copy of the judgment or final order or resolution,
to be attached to the original copy of the petition intended for the court and indicated as such by the petitioner; 48 (b) the affidavits of witnesses or
documents supporting the cause of action or defense; and (c) the sworn certification that the petitioner has not theretofore commenced any other

11
action involving the same issues in the Supreme Court, the CA or the different divisions thereof, or any other tribunal or agency; if there is such
other action or proceeding, he must state the status of the same, and if he should thereafter learn that a similar action or proceeding has been filed
or is pending before the Supreme Court, the CA, or different divisions thereof, or any other tribunal or agency, he undertakes to promptly inform
the said courts and other tribunal or agency thereof within five days therefrom.49

The purpose of these requirements of the sworn verification and the particularization of the allegations of the extrinsic fraud in the petition, of the
submission of the certified true copy of the judgment or final order or resolution, and of the attachment of the affidavits of witnesses and
documents supporting the cause of action or defense is to forthwith bring all the relevant facts to the CA�s cognizance in order to enable the CA
to determine whether or not the petition has substantial merit. Should it find prima facie merit in the petition, the CA shall give the petition due
course and direct the service of summons on the respondent; otherwise, the CA has the discretion to outrightly dismiss the petition for
annulment.50
2.
Pinausukan petition for annulment was
substantively and procedurally defective

A review of the dismissal by the CA readily reveals that Pinausukan�s petition for annulment suffered from procedural and substantive defects.

The procedural defect consisted in Pinausukan�s disregard of the fourth requirement mentioned earlier consisting in its failure to submit
together with the petition the affidavits of witnesses or documents supporting the cause of action. It is true that the petition, which narrated the
facts relied upon, was verified under oath by Roxanne. However, the submission of the affidavits of witnesses together with the petition was not
dispensable for that reason. We reiterate with approval the CA�s emphatic observation in the resolution of July 31, 2003 dismissing the petition
for annulment to the effect that Roxanne�s verification related only �to the correctness of the allegations in the petition� and was �not
the same [or] equivalent to the affidavit of witnesses that the above�cited Rule requires.� 51 To us, indeed, the true office of the verification is
merely to secure an assurance that the allegations of a pleading are true and correct and not the product of the imagination or a matter of
speculation, and that the pleading is filed in good faith.52

Pinausukan�s failure to include the affidavits of witnesses was fatal to its petition for annulment. Worthy to reiterate is that the objective of the
requirements of verification and submission of the affidavits of witnesses is to bring all the relevant facts that will enable the CA to immediately
determine whether or not the petition has substantial merit. In that regard, however, the requirements are separate from each other, for only by
the affidavits of the witnesses who had competence about the circumstances constituting the extrinsic fraud can the petitioner detail the extrinsic
fraud being relied upon as the ground for its petition for annulment. This is because extrinsic fraud cannot be presumed from the recitals alone of
the pleading but needs to be particularized as to the facts constitutive of it. The distinction between the verification and the affidavits is made
more pronounced when an issue is based on facts not appearing of record. In that instance, the issue may be heard on affidavits or depositions
presented by the respective parties, subject to the court directing that the matter be heard wholly or partly on oral testimony or depositions.53

The substantive defect related to the supposed neglect of Atty. Villaflor to keep track of the case, and to his failure to apprise Pinausukan of the
developments in the case, which the CA did not accept as constituting extrinsic fraud, because �
Based solely on these allegations, we do not see any basis to give due course to the petition as these allegations do not speak of the extrinsic fraud
contemplated by Rule 47. Notably, the petition�s own language states that what is involved in this case is mistake and gross negligence of
petitioner�s own counsel. The petition even suggests that the negligence of counsel may constitute professional misconduct (but this is a matter
for lawyer and client to resolve). What is certain, for purposes of the application of Rule 47, is that mistake and gross negligence cannot be equated
to the extrinsic fraud that Rule 47 requires to be the ground for an annulment of judgment. By its very nature, extrinsic fraud relates to a cause that
is collateral in character, i.e., it relates to any fraudulent act of the prevailing party in litigation which is committed outside of the trial of the case,
where the defeated party has been prevented from presenting fully his side of the cause, by fraud or deception practiced on him by his opponent.
Even in the presence of fraud, annulment will not lie unless the fraud is committed by the adverse party, not by one�s own lawyer. In the latter
case, the remedy of the client is to proceed against his own lawyer and not to re�litigate the case where judgment had been rendered.54

We concur with the CA. Verily, such neglect of counsel, even if it was true, did not amount to extrinsic fraud because it did not emanate from any
act of FEBTC as the prevailing party, and did not occur outside the trial of the case. Moreover, the failure to be fully aware of the developments in
the case was Pinausukan�s own responsibility. As a litigant, it should not entirely leave the case in the hands of its counsel, for it had the
continuing duty to keep itself abreast of the developments if only to protect its own interest in the litigation. It could have discharged its duty by
keeping in regular touch with its counsel, but it did not. Consequently, it has only itself to blame.

WHEREFORE, the Court AFFIRMS the assailed resolutions of the Court of Appeals promulgated on July 31, 2003 and September 12, 2003;
and ORDERS the petitioner to pay the costs of suit.ChanRoblesVirtualawlibrary

SO ORDERED.

12
 SECOND DIVISION
[G.R. No. 173559, January 07, 2013]
LETICIA DIONA, REPRESENTED BY HER ATTORNEY-IN-FACT, MARCELINA DIONA, Petitioner, v. SONNY A. BALANGUE, ROMEO A. BALANGUE,
REYNALDO A. BALANGUE, AND ESTEBAN A. BALANGUE, JR., Respondents.
DECISION
DEL CASTILLO, J.:
The grant of a relief neither sought by the party in whose favor it was given nor supported by the evidence presented violates the opposing party's
right to due process and may be declared void ab initio in a proper proceeding.cralawlibrary

This Petition for Review on Certiorari1ςrνl1 assails the November 24, 2005 Resolution2ςrνl1 of the Court of Appeals (CA) issued in CA-G.R. SP No.
85541 which granted the Petition for Annulment of Judgment3ςrνl1 filed by the respondents seeking to nullify that portion of the October 17,
2000 Decision4ςrνl1 of the Regional Trial Court (RTC), Branch 75, Valenzuela City awarding petitioner 5% monthly interest rate for the principal
amount of the loan respondents obtained from her.cralawlibrary

This Petition likewise assails the CA's June 26, 2006 Resolution5ςrνl1 denying petitioner's Motion for Reconsideration.cralawlibrary

Factual Antecedents

The facts of this case are simple and undisputed.cralawlibrary

On March 2, 1991, respondents obtained a loan of P45,000.00 from petitioner payable in six months and secured by a Real Estate
Mortgage6ςrνl1 over their 202-square meter property located in Marulas, Valenzuela and covered by Transfer Certificate of Title (TCT) No. V-
12296.7ςrνl1 � When the debt became due, respondents failed to pay notwithstanding demand. � Thus, on September 17, 1999, petitioner
filed with the RTC a Complaint8ςrνl1 praying that respondents be ordered:chanroblesvirtualawlibrary
(a) To pay [petitioner] the principal obligation of P45,000.00, with interest thereon at the rate of 12%
per annum, from 02 March 1991 until the full obligation is paid.
(b) To pay [petitioner] actual damages as may be proven during the trial but shall in no case be less than
P10,000.00; P25,000.00 by way of attorney's fee, plus P2,000.00 per hearing as appearance fee.
(c) To issue a decree of foreclosure for the sale at public auction of the aforementioned parcel of land,
and for the disposition of the proceeds [thereof] in accordance with law, upon failure of the
[respondents] to fully pay [petitioner] within the period set by law the sums set forth in this
complaint.
(d) Costs of this suit.

Other reliefs and remedies just and equitable under the premises are likewise prayed for.

Respondents were served with summons thru respondent Sonny A. Balangue (Sonny). On October 15, 1999, with the assistance of Atty. Arthur C.
Coroza (Atty. Coroza) of the Public Attorney's Office, they filed a Motion to Extend Period to Answer. � Despite the requested extension,
however, respondents failed to file any responsive pleadings. Thus, upon motion of the petitioner, the RTC declared them in default and allowed
petitioner to present her evidence ex parte.

Ruling of the RTC sought to be annulled.

In a Decision11ςrνl1 dated October 17, 2000, the RTC granted petitioner's Complaint. � The dispositive portion of said Decision
reads:chanroblesvirtualawlibrary
WHEREFORE, judgment is hereby rendered in favor of the [petitioner], ordering the [respondents] to pay the [petitioner] as follows:
a) the sum of FORTY FIVE THOUSAND (P45,000.00) PESOS, representing the unpaid principal loan
obligation plus interest at 5% per month [sic] reckoned from March 2, 1991, until the same is fully paid;
b) P20,000.00 as attorney's fees plus cost of suit;
c) in the event the [respondents] fail to satisfy the aforesaid obligation, an order of foreclosure shall be issued
accordingly for the sale at public auction of the subject property covered by Transfer Certificate of Title No.
V-12296 and the improvements thereon for the satisfaction of the [petitioner's] claim.

SO ORDERED.

Subsequently, petitioner filed a Motion for Execution,13ςrνl1 alleging that respondents did not interpose a timely appeal despite receipt by their
former counsel of the RTC's Decision on November 13, 2000. � Before it could be resolved, however, respondents filed a Motion to Set Aside
Judgment14ςrνl1 dated January 26, 2001, claiming that not all of them were duly served with summons. � According to the other respondents,
they had no knowledge of the case because their co-respondent Sonny did not inform them about it. � They prayed that the RTC's October 17,
2000 Decision be set aside and a new trial be conducted.

But on March 16, 2001, the RTC ordered15ςrνl1 the issuance of a Writ of Execution to implement its October 17, 2000 Decision. � However,
since the writ could not be satisfied, petitioner moved for the public auction of the mortgaged property, 16ςrνl1 � which the RTC
granted. 17ςrνl1 � In an auction sale conducted on November 7, 2001, petitioner was the only bidder in the amount of P420,000.00. � Thus, a
Certificate of Sale18ςrνl1 was issued in her favor and accordingly annotated at the back of TCT No. V-12296.cralawlibrary

Respondents then filed a Motion to Correct/Amend Judgment and To Set Aside Execution Sale dated December 17, 2001, claiming that the parties
did not agree in writing on any rate of interest and that petitioner merely sought for a 12% per annum interest in her Complaint. � Surprisingly,
the RTC awarded 5% monthly interest (or 60% per annum) from March 2, 1991 until full payment. � Resultantly, their indebtedness inclusive of

13
the exorbitant interest from March 2, 1991 to May 22, 2001 ballooned from P124,400.00 to P652,000.00.cralawlibrary

In an Order20ςrνl1 dated May 7, 2002, the RTC granted respondents' motion and accordingly modified the interest rate awarded from 5% monthly
to 12% per annum. � Then on August 2, 2002, respondents filed a Motion for Leave To Deposit/Consign Judgment Obligation21ςrνl1 in the total
amount of P126,650.00.22ςrνl1

Displeased with the RTC's May 7, 2002 Order, petitioner elevated the matter to the CA via a Petition for Certiorari23ςrνl1 under Rule 65 of the
Rules of Court. � On August 5, 2003, the CA rendered a Decision24ςrνl1 declaring that the RTC exceeded its jurisdiction in awarding the 5%
monthly interest but at the same time pronouncing that the RTC gravely abused its discretion in subsequently reducing the rate of interest to
12% per annum. � In so ruling, the CA ratiocinated:chanroblesvirtualawlibrary
Indeed, We are convinced that the Trial Court exceeded its jurisdiction when it granted 5% monthly interest instead of the 12% per annum prayed
for in the complaint. However, the proper remedy is not to amend the judgment but to declare that portion as a nullity. Void judgment for want of
jurisdiction is no judgment at all. It cannot be the source of any right nor the creator of any obligation (Leonor vs. CA, 256 SCRA 69). No legal rights
can emanate from a resolution that is null and void (Fortich vs. Corona, 312 SCRA 751).cralawlibrary

From the foregoing, the remedy of [the respondents] is to have the Court declare the portion of the judgment providing for a higher interest than
that prayed for as null and void for want of or in excess of jurisdiction. A void judgment never acquire[s] finality and any action to declare its nullity
does not prescribe (Heirs of Mayor Nemencio Galvez vs. CA, 255 SCRA 672).cralawlibrary

WHEREFORE, foregoing premises considered, the Petition having merit, is hereby GIVEN DUE COURSE. Resultantly, the challenged May 7, 2002 and
September 5, 2000 orders of Public Respondent Court are hereby ANNULLED and SET ASIDE for having been issued with grave abuse of discretion
amounting to lack or in excess of jurisdiction. � No costs.cralawlibrary

SO ORDERED.25ςrνl1 � (Emphases in the original; italics supplied.)

Proceedings before the Court of Appeals

Taking their cue from the Decision of the CA in the special civil action for certiorari, respondents filed with the same court a Petition for Annulment
of Judgment and Execution Sale with Damages.26ςrνl1 � They contended that the portion of the RTC Decision granting petitioner 5% monthly
interest rate is in gross violation of Section 3(d) of Rule 9 of the Rules of Court and of their right to due process. � According to respondents, the
loan did not carry any interest as it was the verbal agreement of the parties that in lieu thereof petitioner's family can continue occupying
respondents' residential building located in Marulas, Valenzuela for free until said loan is fully paid.cralawlibrary

Ruling of the Court of Appeals

Initially, the CA denied due course to the Petition. 27ςrνl1 � Upon respondents' motion, however, it reinstated and granted the Petition. � In
setting aside portions of the RTC's October 17, 2000 Decision, the CA ruled that aside from being unconscionably excessive, the monthly interest
rate of 5% was not agreed upon by the parties and that petitioner's Complaint clearly sought only the legal rate of 12% per annum. � Following
the mandate of Section 3(d) of Rule 9 of the Rules of Court, the CA concluded that the awarded rate of interest is void for being in excess of the
relief sought in the Complaint. � It ruled thus:chanroblesvirtualawlibrary
WHEREFORE, [respondents'] motion for reconsideration is GRANTED and our resolution dated October 13, 2004 is, accordingly, REVERSED and SET
ASIDE. � In lieu thereof, another is entered ordering the ANNULMENT OF:

(a) � public respondent's impugned October 17, 2000 judgment, insofar as it awarded 5% monthly interest in favor of [petitioner]; and

(b) all proceedings relative to the sale at public auction of the property titled in [respondents'] names under Transfer Certificate of Title No. V-
12296 of the Valenzuela registry.cralawlibrary

The judgment debt adjudicated in public respondent's impugned October [17, 2000] judgment is, likewise, ordered RECOMPUTED at the rate of
12% per annum from March 2, 1991. � No costs.cralawlibrary

SO ORDERED.28ςrνl1 � (Emphases in the original.)

Petitioner sought reconsideration, which was denied by the CA in its June 26, 2006 Resolution. 29ςrνl1
Issues

Hence, this Petition anchored on the following grounds:chanroblesvirtualawlibrary

I. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS ERROR OF LAW WHEN IT GRANTED RESPONDENTS'
PETITION FOR ANNULMENT OF JUDGMENT AS A SUBSTITUTE OR ALTERNATIVE REMEDY OF A LOST APPEAL.cralawlibrary
II. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS ERROR AND MISAPPREHENSION OF LAW AND THE
FACTS WHEN IT GRANTED RESPONDENTS' PETITION FOR ANNULMENT OF JUDGMENT OF THE DECISION OF THE REGIONAL
TRIAL COURT OF VALENZUELA, BRANCH 75 DATED OCTOBER 17, 2000 IN CIVIL CASE NO. 241-V-99, DESPITE THE FACT THAT
SAID DECISION HAS BECOME FINAL AND ALREADY EXECUTED CONTRARY TO THE DOCTRINE OF IMMUTABILITY OF
JUDGMENT.30ςrνl1

Petitioner's Arguments

Petitioner claims that the CA erred in partially annulling the RTC's October 17, 2000 Decision. � She contends that a Petition for Annulment of
Judgment may be availed of only when the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies are no longer
available through no fault of the claimant. � In the present case, however, respondents had all the opportunity to question the October 17, 2000
Decision of the RTC, but because of their own inaction or negligence they failed to avail of the remedies sanctioned by the rules. � Instead, they
contented themselves with the filing of a Motion to Set Aside Judgment and then a Motion to Correct/Amend Judgment and to Set Aside Execution
Sale.cralawlibrary

14
Petitioner likewise argues that for a Rule 47 petition to prosper, the same must either be based on extrinsic fraud or lack of jurisdiction. �
However, the allegations in respondents' Rule 47 petition do not constitute extrinsic fraud because they simply pass the blame to the negligence of
their former counsel. � In addition, it is too late for respondents to pass the buck to their erstwhile counsel considering that when they filed their
Motion to Correct/Amend Judgment and To Set Aside Execution Sale they were already assisted by their new lawyer, Atty. Reynaldo A. Ruiz, who
did not also avail of the remedies of new trial, appeal, etc. � As to the ground of lack of jurisdiction, petitioner posits that there is no reason to
doubt that the RTC had jurisdiction over the subject matter of the case and over the persons of the respondents.cralawlibrary

While conceding that the RTC patently made a mistake in awarding 5% monthly interest, petitioner nonetheless invokes the doctrine of
immutability of final judgment and contends that the RTC Decision can no longer be corrected or modified since it had long become � final and
executory. � She likewise points out that respondents received a copy of said Decision on November 13, 2000 but did nothing to correct the
same. � They did not even question the award of 5% monthly interest when they filed their Motion to Set Aside Judgment which they anchored
on the sole ground of the RTC's lack of jurisdiction over the persons of some of the respondents.cralawlibrary

Respondents' Arguments

Respondents do not contest the existence of their obligation and the principal amount thereof. � They only seek quittance from the 5% monthly
interest or 60% per annum imposed by the RTC. � Respondents contend that Section (3)d of Rule 9 of the Rules of Court is clear that when the
defendant is declared in default, the court cannot grant a relief more than what is being prayed for in the Complaint. � A judgment which
transgresses said rule, according to the respondents, is void for having been issued without jurisdiction and for being violative of due process of
law.cralawlibrary

Respondents maintain that it was through no fault of their own, but through the gross negligence of their former counsel, Atty. Coroza, that the
remedies of new trial, appeal or petition for relief from judgment were lost. � They allege that after filing a Motion to Extend Period to Answer,
Atty. Coroza did not file any pleading resulting to their being declared in default. � While the said lawyer filed on their behalf a Motion to Set
Aside Judgment dated January 26, 2001, he however took no steps to appeal from the Decision of the RTC, thereby allowing said judgment to lapse
into finality. � Citing Legarda v. Court of Appeals,31ςrνl1 respondents aver that clients are not always bound by the actions of their counsel, as in
the present case where the clients are to lose their property due to the gross negligence of their counsel.cralawlibrary

With regard to petitioner's invocation of immutability of judgment, respondents argue that said doctrine applies only to valid and not to void
judgments.cralawlibrary
Our Ruling

The petition must fail.cralawlibrary

We agree with respondents that the award of 5% monthly interest violated their right to due process and, hence, the same may be set aside in a
Petition for Annulment of Judgment filed under Rule 47 of the Rules of Court.cralawlibrary

Annulment of judgment under Rule 47;

an exception to the final judgment rule;
grounds therefor.

A Petition for Annulment of Judgment under Rule 47 of the Rules of Court is a remedy granted only under exceptional circumstances where a party,
without fault on his part, has failed to avail of the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies. � Said
rule explicitly provides that it is not available as a substitute for a remedy which was lost due to the party's own neglect in promptly availing of the
same. � "The underlying reason is traceable to the notion that annulling final judgments goes against the grain of finality of judgment. �
Litigation must end and terminate sometime and somewhere, and it is essential to an effective administration of justice that once a judgment has
become final, the issue or cause involved therein should be laid to rest.â€32Ï‚rνl1

While under Section 2, Rule 4733ςrνl1 of the Rules of Court a Petition for Annulment of Judgment may be based only on the grounds of extrinsic
fraud and lack of jurisdiction, jurisprudence recognizes lack of due process as additional ground to annul a judgment. 34ςrνl1 � In Arcelona v.
Court of Appeals,35ςrνl1 this Court declared that a final and executory judgment may still be set aside if, upon mere inspection thereof, its patent
nullity can be shown for having been issued without jurisdiction or for lack of due process of law.

Grant of 5% monthly interest is way beyond

the 12% per annum interest sought in the
Complaint and smacks of violation of due process.

It is settled that courts cannot grant a relief not prayed for in the pleadings or in excess of what is being sought by the party. � They cannot also
grant a relief without first ascertaining the evidence presented in support thereof. � Due process considerations require that judgments must
conform to and be supported by the pleadings and evidence presented in court. � In Development Bank of the Philippines v. Teston,36ςrνl1 this
Court expounded that:chanroblesvirtualawlibrary
Due process considerations justify this requirement. � It is improper to enter an order which exceeds the scope of relief sought by the pleadings,
absent notice which affords the opposing party an opportunity to be heard with respect to the proposed relief. The fundamental purpose of the
requirement that allegations of a complaint must provide the measure of recovery is to prevent surprise to the defendant.

Notably, the Rules is even more strict in safeguarding the right to due process of a defendant who was declared in default than of a defendant who
participated in trial. � For instance, amendment to conform to the evidence presented during trial is allowed the parties under the
Rules.37ςrνl1 � But the same is not feasible when the defendant is declared in default because Section 3(d), Rule 9 of the Rules of Court comes
into play and limits the relief that may be granted by the courts to what has been prayed for in the Complaint. � It
provides:chanroblesvirtualawlibrary
(d) Extent of relief to be awarded. - A judgment rendered against a party in default shall not exceed the amount or be different in kind from that
prayed for nor award unliquidated damages.

The raison d'être in limiting the extent of relief that may be granted is that it cannot be presumed that the defendant would not file an Answer

15
and allow himself to be declared in default had he known that the plaintiff will be accorded a relief greater than or different in kind from that
sought in the Complaint.38ςrνl1 � No doubt, the reason behind Section 3(d), Rule 9 of the Rules of Court is to safeguard defendant's right to due
process against unforeseen and arbitrarily issued judgment. � This, to the mind of this Court, is akin to the very essence of due process. � It
embodies "the sporting idea of fair playâ€39Ï‚rνl1 and forbids the grant of relief on matters where the defendant was not given the opportunity to
be heard thereon.cralawlibrary

In the case at bench, the award of 5% monthly interest rate is not supported both by the allegations in the pleadings and the evidence on record.
� The Real Estate Mortgage40ςrνl1 executed by the parties does not include any provision on interest. � When petitioner filed her Complaint
before the RTC, she alleged that respondents borrowed from her "the sum of FORTY-FIVE THOUSAND PESOS (P45,000.00), with interest thereon at
the rate of 12% per annumâ€41Ï‚rνl1 � and sought payment thereof. � She did not allege or pray for the disputed 5% monthly interest. �
Neither did she present evidence nor testified thereon. � Clearly, the RTC's award of 5% monthly interest or 60% per annum lacks basis and
disregards due process. � It violated the due process requirement because respondents were not informed of the possibility that the RTC may
award 5% monthly interest. � They were deprived of reasonable opportunity to refute and present controverting evidence as they were made to
believe that the complainant [petitioner] was seeking for what she merely stated in her Complaint.cralawlibrary

Neither can the grant of the 5% monthly interest be considered subsumed by petitioner's general prayer for "[o]ther reliefs and remedies just and
equitable under the premises x x x.â€42Ï‚rνl1 � To repeat, the court's grant of relief is limited only to what has been prayed for in the Complaint
or related thereto, supported by evidence, and covered by the party's cause of action.43ςrνl1 � Besides, even assuming that the awarded 5%
monthly or 60% per annum interest was properly alleged and proven during trial, the same remains unconscionably excessive and ought to be
equitably reduced in accordance with applicable jurisprudence. � In Bulos, Jr. v. Yasuma,44ςrνl1 this Court held:chanroblesvirtualawlibrary
In the case of Ruiz v. Court of Appeals, citing the cases of Medel v. Court of Appeals, Garcia v. Court of Appeals, Spouses Bautista v. Pilar
Development Corporation and the recent case of Spouses Solangon v. Salazar, this Court considered the 3% interest per month or 36% interest per
annum as excessive and unconscionable. � Thereby, the Court, in the said case, equitably reduced the rate of interest to 1% interest per month
or 12% interest per annum. (Citations omitted)

It is understandable for the respondents not to contest the default order for, as alleged in their Comment, "it is not their intention to impugn or run
away from their just and valid obligation.â€45Ï‚rνl1 � Nonetheless, their waiver to present evidence should never be construed as waiver to
contest patently erroneous award which already transgresses their right to due process, as well as applicable jurisprudence.cralawlibrary

Respondents' former counsel was grossly

negligent in handling the case of his clients;
respondents did not lose ordinary remedies
of new trial, petition for relief, etc. through
their own fault.

Ordinarily, the mistake, negligence or lack of competence of counsel binds the client. � This is based on the rule that any act performed by a
counsel within the scope of his general or implied authority is regarded as an act of his client. � A recognized exception to the rule is when the
lawyers were grossly negligent in their duty to maintain their client's cause and such amounted to a deprivation of their client's property without
due process of law.46ςrνl1 � In which case, the courts must step in and accord relief to a client who suffered thereby. 47ςrνl1

The manifest indifference of respondents' former counsel in handling the cause of his client was already present even from the beginning. � It
should be recalled that after filing in behalf of his clients a Motion to Extend Period to Answer, said counsel allowed the requested extension to
pass without filing an Answer, which resulted to respondents being declared in default. � His negligence was aggravated by the fact that he did
not question the awarded 5% monthly interest despite receipt of the RTC Decision on November 13, 2000. 48ςrνl1 � A simple reading of the
dispositive portion of the RTC Decision readily reveals that it awarded exorbitant and unconscionable rate of interest. � Its difference from what
is being prayed for by the petitioner in her Complaint is so blatant and very patent. � It also defies elementary jurisprudence on legal rate of
interests. � Had the counsel carefully read the judgment it would have caught his attention and compelled him to take the necessary steps to
protect the interest of his client. � But he did not. � Instead, he filed in behalf of his clients a Motion to Set Aside Judgment49ςrνl1 dated
January 26, 2001 based on the sole ground of lack of jurisdiction, oblivious to the fact that the erroneous award of 5% monthly interest would
result to his clients' deprivation of property without due process of law. � Worse, he even allowed the RTC Decision to become final by not
perfecting an appeal. � Neither did he file a petition for relief therefrom. � It was only a year later that the patently erroneous award of 5%
monthly interest was brought to the attention of the RTC when respondents, thru their new counsel, filed a Motion to Correct/Amend Judgment
and To Set Aside Execution Sale. � Even the RTC candidly admitted that it "made a glaring mistake in directing the defendants to pay interest on
the principal loan at 5% per month which is very different from what was prayed for by the plaintiff.â€50Ï‚rνl1

"A lawyer owes entire devotion to the interest of his client, warmth and zeal in the maintenance and defense of his rights and the exertion of his
utmost learning and ability, to the end that nothing can be taken or withheld from his client except in accordance with the law.â€51Ï‚rνl1 Judging
from how respondents' former counsel handled the cause of his clients, there is no doubt that he was grossly negligent in protecting their rights, to
the extent that they were deprived of their property without due process of law.cralawlibrary

In fine, respondents did not lose the remedies of new trial, appeal, petition for relief and other remedies through their own fault. � It can only be
attributed to the gross negligence of their erstwhile counsel which prevented them from pursuing such remedies. � We cannot also blame
respondents for relying too much on their former counsel. � Clients have reasonable expectations that their lawyer would amply protect their
interest during the trial of the case.52ςrνl1 � Here, "[r]espondents are plain and ordinary people x x x who are totally ignorant of the intricacies
and technicalities of law and legal procedures. � Being so, they completely relied upon and trusted their former counsel to appropriately act as
their interest may lawfully warrant and require.â€53Ï‚rνl1

As a final word, it is worth noting that respondents' principal obligation was only P45,000.00. � Due to their former counsel's gross negligence in
handling their cause, coupled with the RTC's erroneous, baseless, and illegal award of 5% monthly interest, they now stand to lose their property
and still owe petitioner a large amount of money. � As aptly observed by the CA:chanroblesvirtualawlibrary
x x x If the impugned judgment is not, therefore, rightfully nullified, petitioners will not only end up losing their property but will additionally owe
private respondent the sum of P232,000.00 plus the legal interest said balance had, in the meantime, earned. � As a court of justice and equity,
we cannot, in good conscience, allow this unconscionable situation to prevail. 54ςrνl1

Indeed, this Court is appalled by petitioner's invocation of the doctrine of immutability of judgment. � Petitioner does not contest as she even
admits that the RTC made a glaring mistake in awarding 5% monthly interest.55ςrνl1 � Amazingly, she wants to benefit from such erroneous

16
award. � This Court cannot allow this injustice to happen.cralawlibrary

WHEREFORE, the instant Petition is hereby DENIED and the assailed November 24, 2005 and June 26, 2006 Resolutions of the Court of Appeals in
CA-G.R. SP No. 85541 are AFFIRMED.

SO ORDERED.

17
 Execution, Satisfaction, and Effect of Judgments
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 129713 December 15, 1999

CAGAYAN DE ORO COLISEUM, INC., petitioner,
vs.
COURT OF APPEALS, MAXIMIANO MABANAG, JR. and RICHARD GO KING, respondents.

YNARES-SANTIAGO, J.:
In this petition for review, petitioner Cagayan de Oro Coliseum, Inc. assails the decision of the Court of Appeals in CA-G.R. CV No. 437821 which
reversed and set aside the decision dated August 5, 1993 of the Regional Trial Court, Branch 19, Cagayan de Oro City in two consolidated cases, Civil
Case No. 89-098 and Special Civil Action No. 6811.
Spanning a period of more than twenty (20) years, this case involves a long drawn-out struggle for ownership over a valuable piece of real property
in Cagayan de Oro City.
In 1977, petitioner Cagayan de Oro Coliseum, Inc., a domestic corporation domiciled in Cagayan de Oro City, obtained from one Santiago Maceren a
loan in the amount of P149,253.73.2 As security for the loan, petitioner executed a promissory note and a mortgage over all its assets and properties,
including a parcel of land situated in the poblacion of the City and registered in its name under Transfer Certificate of Title (TCT) No. T-3383. The land,
which has an area of 4,025 Square meters with two (2) commercial buildings thereon respectively measuring 1,606 and 379 square meters,3 is more
particularly described as follows:
A parcel of land [Lot 845-B-2-B of the subdivision plan (LRC) Psd-19292, being a portion of Lot 845-B-2, described on (sic) plan
Psd-34454, LRC (GLRO) Cad. Rec. No. 1562], situated in the Poblacion, City of Cagayan de Oro, Island of Mindanao. Bounded on
the NE. and SE., points 3 to 4 and points 4 to 1 by Lot 845-B-2-F; on the SW., points 1 to 2 by Lot 845-B-2-C; and on the NW.,
points 2 to 3 by Lot 845-B-2-E all of the subdivision plan. . . . containing an area of FOUR THOUSAND AND TWENTY FIVE (4,025)
SQUARE METERS more or less.4
The loan, together with the promissory note and the mortgage, were later assigned by Maceren to the Commercial Credit Corporation of Cagayan
de Oro (Commercial Credit). 5 Petitioner failed to pay the loan when it became due, hence, the Commercial Credit commenced foreclosure
proceedings on the said parcel of land.
On October 23, 1979, five stockholders of petitioner corporation instituted before the then Court of First Instance (CFI) of Misamis Oriental, Branch
IV, a petition for injunction against Commercial Credit, the City Sheriff of Cagayan de Oro and herein-petitioner corporation, entitled "Ralph Lou I.
Willkom, Benber B. Apepe, Bernardo Roa, Marcos Balarias and Teresita Macale, Petitioners versus Rufo J. Waminal, City Sheriff of Cagayan de Oro,
Commercial Credit Corporation and Cagayan de Oro Coliseum, Inc., Respondents," docketed as Special Civil Action No. 6811. The five stockholders
sought to enjoin the public sale of the corporate property alleging that the loan was contracted by Diego Imperio, the president of the corporation,
without authority from the stockholders; and that the creditor, Santiago Maceren, was corporate treasurer and a member of the Board of Directors
of petitioner corporation at the time the loan was obtained. 6
Eventually, the parties, assisted by their respective counsel, entered into a compromise agreement which became the basis of a judgment rendered
by the trial court on March 11, 1980, whereby the five stockholders ratified the loan of the corporation to Commercial Credit in the amount of
P249,263.23, computed as of February 15, 1980; the corporation bound itself to pay the loan in equal monthly installments of P11,000.00 and agreed
that failure to pay any of the installments shall render the judgment immediately executory, with penalty on overdue and unpaid installments at the
rate of three per cent (3%) per month plus five per cent (5%) of the outstanding balance as additional attorney's fees. The Compromise Judgment
reads as follows:
The parties in the above-entitled case assisted by their respective counsel, submitted for approval the following Compromise Agreement, to wit:
COMES NOW, Parties, Petitioners and Respondents, represented by their respective counsels, unto this Honorable Court, most respectfully
submit for approval the following Compromise Agreement:
1. That, petitioners herein hereby state that they ratified and approved the loan and real estate mortgage entered into and assigned by the
Cagayan de Oro Coliseum, Inc. to the Commercial Credit Corporation of Cagayan de Oro and as such therefore, the issue raised by the
herein petitioners in the above entitled case has become moot and academic;
2. That, by virtue of the aforementioned, the Cagayan de Oro Coliseum, Inc., thru its Board of Directors and represented by its President, Mr.
Johnny Wilson, hereby admits its total outstanding obligation to herein Respondent Commercial Credit Corporation of Cagayan de Oro in
the amount of TWO HUNDRED FORTY NINE THOUSAND TWO HUNDRED SIXTY THREE & 23/100 PESOS (P249,263.23), as of February 15,
1980, including therein the sum of P10,000.00 representing attorney's fees for Respondent Commercial Credit Corporation of Cagayan de
Oro;
3. That, the Cagayan de Oro Coliseum, Inc. has agreed to pay the above obligation plus interest on diminishing balance computed yearly at
sixteen (16%) per cent per annum, thus:
i. Total Account P249,263.23
ii. Total Interest 76,138.60
iii. ——————
iv. Total Payable P325,401.83
4. That, the Cagayan de Oro Coliseum, Inc. hereby agrees to pay the foregoing obligation in paragraph (3) hereof in equal monthly installments
of P11,000.00, the first installment shall be payable in February 1980 and every month thereafter until the whole account payable as
aforementioned is fully paid;
5. That, failure on the part of Respondent Cagayan de Oro Coliseum, Inc. to pay any of the installments as they shall become due, the whole
amount then outstanding and unpaid shall immediately become due and payable in its entirety and shall render the judgment herein to be
immediately final, unappealable and executory; and the overdue and unpaid installments shall earn a three per cent (3%) per month penalty
charge until fully paid, plus five per cent (5%) of the outstanding balance as additional attorney's fees;

18
 6. That, Respondent Commercial Credit Corporation of Cagayan de Oro hereby agrees to withdraw its application with Respondent City Sheriff
of Cagayan de Oro for the extrajudicial foreclosure of the real estate mortgage subject of this complaint;
7. That, the Parties herein waive in favor of each other any and all forms of damage arising out of, connected with and/or as a result of this
action.

WHEREFORE, the Parties respectfully pray of this Honorable Court that judgment in accordance with the Compromise Agreement be
rendered.
i. Cagayan de Oro City, Philippines,
ii. February 25, 1980.

COMMERCIAL CREDIT CAGAYAN DE ORO

CORPORATION OF COLISEUM, INC.
CAGAYAN DE ORO
(Respondent) (Respondent)
By: By:
(SGD.) ROMEO V. ORENDAIN (SGD.) JOHNNY WILSON
Resident Manager President
(SGD.) RUFO J. WAMINAL (SGD.) BENBER B. APEPE
Cagayan de Oro (Petitioner)
City Sheriff
(Respondent)
(SGD.) PRIMITIVO S. BELLA, JR. (SGD.) MARCOS BALARIA
Counsel for CCC-Cagayan (Petitioner) de Oro and City Sheriff of
Cagayan de Oro (SGD.) TERESITA MACALE (Petitioner)

(SGD.) ANGEL R. QUIMPO

Counsel for Petitioners and Respondent Cagayan de Oro
Coliseum, Inc.

WHEREFORE, finding the above-quoted compromise agreement not contrary to law, morals and public policy, the same is hereby approved,
and judgment is rendered in accordance therewith. The parties are hereby enjoined to observe and comply strictly with the terms and
conditions therein set forth, without special pronouncement as to costs.
SO ORDERED. 7
On March 4, 1983, Commercial Credit filed with the court a quo, now the Regional Trial Court, Branch 19, Cagayan de Oro City, an "Ex-Parte Motion
for the Issuance of a Writ of Execution." Commercial Credit alleged that petitioner corporation failed to pay several installments on its loan and left
an outstanding balance of P70,152.68, excluding sheriffs expenses.8 The trial court granted the motion on March 9, 1983.9 The following day, the
Branch Clerk of Court issued the writ of execution on the personal and real properties of petitioner corporation. On March 11, the deputy sheriff filed
a notice of levy on petitioner's title with the Register of Deeds of Cagayan de Oro City. 10
Petitioner forthwith filed a "Motion for Reconsideration of the Order of Execution" alleging that the issuance of the order of execution ex-
parte violated petitioner's right to due process; that a hearing should have been conducted on the motion for execution because petitioner had
already made payments in the total amount of P419,429.95, resulting in an overpayment of P94,028.12. 11
In an order dated November 26, 1986, the trial court denied petitioner's motion for reconsideration. The trial court, however, reduced petitioner's
principal obligation from P70,152.68 to P64,956.19 but ordered it to pay the three per cent (3%) monthly penalty charge until full payment and five
per cent (5%) of the outstanding balance as additional attorney's fees. Accordingly, the court ordered the issuance of a writ of execution for the
collection of said amount:
WHEREFORE, the motion for reconsideration filed by respondent Coliseum is DENIED. Let a writ of execution be issued against
said respondent for the collection of its outstanding obligation of P64,956.19 with the respondent CCC, including the "three per
cent (3%) per month penalty charge until fully paid, plus five per cent (5%) of the outstanding balance as additional attorney's
fees" as provided in paragraph 5 of the compromise agreement. 12
On December 4, 1986. the Branch Clerk of Court of the trial court issued the writ of execution which reads:
You are hereby commanded that of the goods and chattels of respondent Coliseum, Cagayan de Oro City, you cause to be made
the sum of P64,956.19 as principal plus 3% penalty per month, plus 5% of the outstanding balance as attorney's fees and all
expenses incurred together with your lawful fees for the service of this execution, all in the Philippine currency, which the
respondent CCC recovered in this Regional Trial Court of Misamis Oriental and that you render the said sums to the respondent
CCC aside from your own fees on this execution and do likewise return this writ within SIXTY (60) DAYS from receipt hereof with
your proceedings endorsed thereon. But if sufficient personal property/ies cannot be found whereof to satisfy this execution and
lawful fees thereon, then you are commanded that of the lands and buildings of the said respondent Coliseum you make the said
sums of money in the manner required by the Rules of Court. 13
Pursuant to this writ, Deputy Provincial Sheriff Maximiano Mabanag, Jr. published the notice of auction sale scheduled on January 23, 1987.
The sale did not proceed on said date, however, due to some internal problems in the office of the sheriff.
Meanwhile, petitioner filed with the Court of Appeals an action for annulment of judgment of the trial court, docketed as CA-G.R. SP No. 10888,
wherein it sought to set aside the compromise judgment on the ground of fraud and misrepresentation which it discovered only in 1983. Petitioner
pleaded four causes of action, viz: (1) Of its total obligation of P325,401.83 to Commercial Credit, petitioner had already paid P303,758.15 and left a
balance of only P21,647.79, not P70,152.68 as claimed by Commercial Credit. Respondent judge ordered execution of the compromise judgment
without a hearing and petitioner's motion for reconsideration was decided three years and seven months later which gave Commercial Credit a
longer period to impose the monthly 3% penalty and 5% additional attorney's fees on the increased balance; (2) Two stipulations in the compromise
judgment violated the provisions of Presidential Decree No. 116 amending the Usury Law, and Central Bank Circular No. 721 issued on February 25,
1980, prior to the promulgation of the compromise judgment by the trial court on March 11, 1980; (3) Respondent judge gravely abused his discretion
in applying portions of the installment payments as past due charges instead of fully applying them to the principal debt; and (4) The Branch Clerk of
Court issued a writ of execution and the Deputy Provincial Sheriff issued a notice of auction sale before petitioner received a copy of the order
denying its motion for reconsideration. 14 Petitioner thus prayed:
WHEREFORE, herein petitioner prays that judgment be rendered for the following:

19
 1. Immediately enjoining respondents Branch Clerk of Court Augusto Neri, Jr. and Deputy Provincial Sheriff Maximiano Mabanag,
Jr. from proceeding with the execution and sale of the property of herein petitioner, and after trial and/or appropriate
proceedings, making the injunction abovemention permanent;
2. Ordering that the provisions in the Judgment by Compromise, particularly the provisions therefor on interest, penalties, and
additional attorney's fees, null and void, and such judgment consequently modified in accordance therewith;
3. Ordering that the obligation of the herein petitioner in the Judgment by Compromise has been fully settled, and to execute
such documents and surrender the Certificate of Title and other papers in order that the title shall be cleared of such
encumbrance;
4. Ordering respondent Commercial Credit Corporation to return to herein petitioner its overpayment in the amount of
P45,049.55;
5. Ordering respondents Deputy Clerk of Court Augusto Neri, Jr., Deputy Provincial Sheriff Maximiano Mabanag, Jr. and the
Commercial Credit Corporation, to pay damages, jointly and severally, the amount of P50,000.00 and attorney's fees of
P10,000.00;
6. Ordering further that respondent Commercial Credit Corporation pay the additional damages for the amount of P50,000.00;
7. For such other orders and remedies proper under the circumstances. 15
On February 13, 1987, the Court of Appeals rendered a decision holding that since petitioner had made payments totalling P303,755.15, it equitably
reduced the penalty of three per cent (3%) per month to only one-half per cent (1/2%) per month on the overdue and unpaid installments, and the
five per cent (5%) additional attorney's fees to only two per cent (2%) of the outstanding balance. The Court of Appeals declared:
xxx xxx xxx
The Court noted that in the "Summary of Payments" dated March 18, 1983, petitioner had made total payments in the amount
of P303,758.15 itemized as follows:
xxx xxx xxx
Upon consideration of such total payments made by petitioner, this Court finds it equitable as provided for in Article 1229 of the
Civil Code of the Philippines to reduce the penalty of 3% per month to only 1/2% per month on the overdue and unpaid
installments until fully paid, and the 5% to only 2% of the outstanding balance as additional attorney's fees, both effective March
16, 1983 when petitioner filed the motion for reconsideration of the order for execution.
As regards the alleged irregularity and haste in the performance of the respondent court personnel, suffice it to state as pointed
out by private respondents that they merely executed their ministerial duties to follow the lawful orders of the court. As of now,
the auction sale had not yet been implemented.
WHEREFORE, the present petition is DENIED Due Course and is hereby DISMISSED. Effective March 16, 1983, the overdue and
unpaid installments shall earn one-half per cent (1/2%) per month penalty charge until fully paid plus two per cent (2%) of the
outstanding balance as additional; attorney's fees. 16
Meanwhile, on January 19, 1987, herein respondent Sheriff Mabanag issued an Amended Sheriffs notice of sale setting the sale of the property at
public auction on February 13, 1987, or on the same day the Court of Appeals promulgated its decision. At the Auction Sale the property was sold to
the highest bidder, herein respondent Richard Go King, for the sum of P170,000.00.
Both parties moved for reconsideration of the decision of the Court of Appeals. Petitioner argued that: (1) the penalty or past due charges on the
obligation be applied only after the payment of the principal and interest, and that the reduced penalty be applied from the time it was to be imposed,
instead of from the date the trial court denied the motion for reconsideration; (2) that Commercial Credit, to its advantage, concealed from petitioner
the promulgation of C.B. Circular No. 721 before rendition of the compromise judgment, and as a result of the non-application of said Circular,
petitioner's obligation ballooned to P170,000.00; (3) that the auction sale was conducted on February 13, 1987, 17 the day of promulgation of the
Court of Appeals' decision substantially amending the amount of judgment debt. 18 Petitioner thus prayed:
WHEREFORE, it is most respectfully prayed that:
A. The Decision of this Honorable Court dated February 13, 1987 be reconsidered, and the prayer, remedies and reliefs in the
Petition be granted, and/or
B. For the following orders, to wit:
1. Ordering the Judgment, as well as the Order for the issuance of the Writ of Execution dated November 26,
1987, as modified pursuant to the ruling and the dispositive portion of the Decision of the Honorable Court
of Appeals, on the penalty or past due charges and attorney's fees;
2. Ordering as not in accord and excessive with the modified judgment and the modified order of the trial
court dated November 26, 1987, the Writ of Execution issued by respondent Deputy Clerk of Court, the
Sheriff's Notice of Sale, the Public respondent Deputy Provincial Sheriff, and consequently null and void; and
C. For such other orders, reliefs and remedies proper and just under circumstances. 19
In a Resolution dated May 19, 1987, the Court of Appeals denied the petitioner's motion. It, however, granted the motion for reconsideration with
respect to the public auction sale conducted during the pendency of the case. The Court of Appeals declared the writ of execution, the sheriff's notice
of sale, the public auction sale and the certificate of sale null and void insofar as they were in excess of the judgment as modified by its decision.
Thus:
Acting on the said first part of the petitioner's motion for reconsideration as well as the private respondent's comment thereon,
the aforestated grounds for said motion having already been taken up by this Court in reaching the said February 13, 1987
decision, and finding no reason to disturb the same, the said motion as to its said first part, is DENIED for lack of merit.
As to the said second part of petitioner's motion for reconsideration, for clarity, the dispositive portion of the February 13, 1987
decision is re-worded to read as follows:
WHEREFORE, the present petition is GRANTED in the sense that effective March 16, 1983, the overdue and unpaid installments
shall earn one half per cent (1/2%) per month penalty charge until fully paid, plus two per cent (2%) of the outstanding balance
as additional attorney's fees.

20
 And in view of such disposition,
1) THE JUDGMENT DATED MARCH 11, 1980 AND THE ORDER DATED NOVEMBER 26, 1986
OF RESPONDENT COURT ARE HEREBY DECLARED MODIFIED CONFORMABLY WITH THE
FEBRUARY 13, 1987 DECISION OF THIS COURT; and
2) THE WRIT OF EXECUTION ISSUED BY RESPONDENT CLERK OF COURT, AND THE
SHERIFF'S NOTICE OF SALE, THE PUBLIC AUCTION SALE THE CERTIFICATE OF SALE ARE
DECLARED NULL AND VOID IN SO FAR AS THEY ARE NOT IN ACCORDANCE WITH AND IN
EXCESS OF THE NOW MODIFIED JUDGMENT AND MODIFIED ORDER OF THE RESPONDENT
COURT DATED MARCH 11, 1980 AND NOVEMBER 26, 1986, RESPECTIVELY.
SO ORDERED. 20
Commercial Credit moved for reconsideration, but its motion was denied on March 23, 1987. 21
Both parties filed separate petitions for review before us. In its petition in G.R. No. 79100, petitioner prayed:
WHEREFORE, IT IS MOST RESPECTFULLY PRAYED:
I — That the foregoing petition be given due course;
AND AFTER PROPER PROCEEDINGS, an order be issued:
II — Modifying the Decision dated February 13, 1987, and the Resolution on the Motion for Reconsideration dated May 19, 1987
of the Honorable Court of Appeals, to wit:
(a) Ordering that the part of the Judgment by Compromise of the then Court of First Instance of Misamis
Oriental, particularly the provisions therefor on interest, penalties, and additional attorney's fees, null and
void, and such Judgment consequently modified in accordance therewith;
(b) Ordering that the obligation of herein petitioner in the Judgment by Compromise as fully settled, and
private respondent to execute such documents and surrender the Certificate of Title and other papers in
order that the title be cleared of such encumbrance;
(c) Ordering respondent Commercial Credit Corporation of Cagayan de Oro to return to herein petitioner the
overpayment in the amount of P54,494.92, plus interest therefor computed from September 1982;
(d) Ordering respondent Commercial Credit Corporation of Cagayan de Oro to pay damages in the total
amount of P50,000.00 and costs;
(e) Ordering respondents Branch Clerk of Court Augusto Neri, Jr., Deputy Provincial Sheriff Maximiano
Mabanag, Jr. and the Commercial Credit Corporation to pay damages jointly and severally in the amount of
P50,000.00 and attorney's fees; and
(f) For such other orders and remedies proper under the circumstances. 22
This petition was denied in the Resolution of August 31, 1987 for having been filed late. In the same Resolution, the Third Division of this
Court also declared:
Furthermore, considering the petition, the allegations and arguments adduced and the Court of Appeals' decision as modified,
this Court finds that the Court of Appeals committed no reversible error.
WHEREFORE, the Court Resolved to DENY the petition. 23
On the other hand, the petition of Commercial Credit in G.R. No. 78315 was granted. 24 In a decision dated January 2, 1989, the First Division of this
Court set aside the decision and resolution of the Court of Appeals and affirmed the compromise judgment of the trial court, to wit:
WHEREFORE, the petition is GRANTED. The decision of the respondent Court of Appeals dated February 13, 1987 and its
resolutions dated March 23, 1987 and May 19, 1987 are hereby SET ASIDE and another judgment is hereby rendered affirming in
toto the compromise judgment of the trial court dated March 11, 1980, with costs against private respondent. This decision is
immediately executory. 25
Petitioner filed a "Motion to Consider and Resolve En Banc Herein Motion for Reconsideration" in view of the Resolution in G.R. No. 79100. On March
15, 1989, the motion was denied.
Judgment in G.R. No. 78315 was entered on April 3, 1989.
Meanwhile, during the pendency of G.R. No. 78315, on August 17, 1988, respondent Sheriff issued to respondent Go King a Final Deed of Conveyance
over the subject property. TCT No. T-3383 of petitioner was cancelled and TCT No. T-51704 was issued in the name of respondent Go King.
On April 11, 1989, after finality of the decision of the Supreme Court in G.R. No. 78315, petitioner instituted Civil Case No. 89-098 against herein
respondents Sheriff Mabanag and Richard Go King for "Remedies from Falsification and Damages." The case was filed before Branch 24 of the
Regional Trial Court, Cagayan de Oro. In its amended complaint, petitioner alleged that (1) the execution proceedings were null and void for failure
to comply with the requirements of the Rules of Court; (2) the cancellation of petitioner's title and the issuance of another in the name of respondent
Go King was made in violation of the Court of Appeals' Resolution in CA-G.R. SP No. 10888; and (3) assuming that the auction sale was valid, petitioner
was exercising his right of redemption by consigning with the court the purchase price of P170,000.00 plus interest in accordance with the Rules of
Court. Petitioner prayed that judgment be rendered:
1. Ordering and/or declaring the Sheriffs Final Deed of Conveyance dated August 17, 1988, as well as Transfer Certificate of Title
No. T-51704 in the name of defendant Richard Go King as null and void;
2. Ordering that the validity and legal effectiveness of Certificate of Title No. T-3383 in the name of plaintiff be fully restored in
the records of the Register of Deeds of Cagayan de Oro;
3. Ordering the Provincial Sheriff of Misamis Oriental or his deputy to perform such acts or proceedings so as to carry into effect
the fact of redemption, and/or satisfaction of judgment;
4. Ordering the defendants, Mabanag and Go King, jointly and severally, to pay plaintiff actual, compensatory and exemplary
damages, including attorney's fees in the total amount of SIX HUNDRED FIFTY THOUSAND PESOS (P650,000.00), and

21
 5. For such other just and equitable reliefs and remedies proper under the circumstances. 26
The following day, April 12, 1989, petitioner filed before Branch 19 of the Regional Trial Court, the same Branch where Special Civil Action No. 6811
was instituted in 1979, an "Omnibus Motion to Declare the Judgment Satisfied, Reimburse Bidder or Pay as in Redemption, Etc.", praying that the
auction sale of the subject property be declared null and void and that the title over the property in the name of Richard Go King be cancelled and
petitioner's title fully restored. In the same pleading, petitioner manifested that on the assumption that the execution proceedings were valid, it was
exercising its right to redeem the property by consigning redemption money in court. 27
On June 19, 1999, the Omnibus Motion was denied in view of the pendency of the complaint in Civil Case No. 89-098 before Branch 24. 28 Petitioner
moved for reconsideration.
On July 11, 1989, the order of denial was lifted and the Omnibus Motion was instituted. The court declared that the resolution of the said motion
shall await the outcome of Civil Case No. 89-098 before Branch 24, unless the parties shall have decided to consolidate the two cases. 29
Civil Case No. 89-098 with Special Civil Action No. 6811 were ordered consolidated by the court on July 14, 1989. 30
On February 26, 1991, respondent Go King filed a "Motion for the Issuance of a Writ of Possession." On November 13, 1991, he also filed a "Petition
for the Appointment of a Receiver." Both were opposed by petitioner.
On August 5, 1993, the trial court rendered a decision declaring the deed of sale, the final deed of conveyance, and TCT No. T-51704 in the name of
respondent Go King as null and void, and denying respondent Go King's motion for writ of possession and petition for receiver, after finding that the
property subject of execution was not levied upon, that notices of sale were not posted and that there was no return of the writ of execution of
March 10, 1983. 31
On appeal by respondents, the Court of Appeals reversed the trial court and dismissed Civil Case No. 89-098. The appellate court found that the case
was a relitigation of the issues raised in CA-G.R. SP No. 10888 and that the notice requirements for the execution sale were validly complied with.
Petitioner's motion for reconsideration was denied in the Resolution of July 4, 1997. Hence, this petition where it is alleged that:
I. Respondent Court's assailed Decision and Resolution are not in accord with applicable law, rules and jurisprudence because:
1. The order of November 26, 1986 amending the March 10, 1983 order reducing the principal judgment debt
to P64,956.18 and adding 3% monthly penalty and 5% attorney's fees of the principal obligation and
authorizing issuance of a writ of execution for its satisfaction and the auction sale held pursuant thereto were
null and void because said order, which was appealable, was prematurely executed before petitioner
Coliseum was served with copy thereof and in disregard of the requirements of Sec. 2, Rule 39 of the Rules
of Court.
2. Assuming, arguendo, that the execution of the order of November 26, 1986 could proceed, the public
auction sale conducted by the sheriff on February 13, 1987 to satisfy the judgment debt was null and void
because there was no prior levy as supported by public records and judicial admissions.
II. Respondent Court also ignored the equity of the case and the doctrine against unjust enrichment when it upheld the validity
of the auction sale in question notwithstanding that the bid price of only P170,000.00 as against the property's value of P100
million is so unconscionable and so shocking to the conscience of impartial men as to invalidate the sale.
III. Assuming, further, that there was a valid auction sale on February 13, 1987, the proceedings in CA-G.R. SP No. 10888, in G.R.
No. 79100, and in G.R. No. 78315 suspended the period of redemption; and the consignation of the redemption amount on April
11, 1989, well within the redemption period, discharged the judgment debt and rendered the auction sale without force and
effect. 32
In its first assigned error, petitioner claims that the trial court's execution order of November 26, 1986 amending the March 9, 1983 order was null
and void for lack of due process.
It is too late in the day for petitioner to assail the validity of the order of November 26, 1986. This order became final for petitioner's failure to appeal
therefrom. The institution of CA-G.R. SP No. 10888, the petition for annulment of judgment of the trial court, did not stay the proceedings before the
court a quo. CA-G.R. CV No. 1088 was an original action in the Court of Appeals in the exercise of its exclusive original jurisdiction. 33 Since the said
court did not issue any restraining order or injunction, the trial court's order of execution lapsed into finality. 34
The issue of whether a hearing should have been conducted by the trial court to determine petitioner's overpayment of its debt has been raised in
CA-G.R. SP No. 10888. 35 Respondent Court of Appeals denied this claim in its decision of February 13, 1987, which was affirmed by this Court in G.R.
No. 79100.
The present petition hinges on the procedural issue of whether petitioner is barred by res judicata from assailing the validity of the execution
proceedings over the subject property. Private respondent argues that Civil Case No. 89-098, the second action, is barred by the first action, i.e., CA-
G.R. SP No. 10888, which we disposed of with finality in G.R. Nos. 79100 and 78315. 36
For res judicata to be an absolute bar to a subsequent action, the following requisites must concur: (1) the former judgment or order must be final;
(2) the judgment or order must be on the merits; (3) it must have been rendered by a court having jurisdiction over the subject matter and parties;
and (4) there must be between the first and second actions, identity of parties, of subject matter, and of causes of action. 37
The judgment in the first case, CA-G.R. SP No. 10888, which we reviewed in G.R. Nos. 78315 and 79100 was a final judgment. It was on the merits
and rendered by this Court having jurisdiction over the subject matter and the parties. Whether there is identity of parties, of subject matter and
causes of action, between CA-G.R. SP No. 10888 and this case, is the crux of the controversy.
There is identity of parties where the parties in both actions are the same, or there is privity between them, or they are "successors-in-interest by
title subsequent to the commencement of the action, litigating for the same thing and under the same title and in the same capacity." 38 Respondent
Sheriff Mabanag was a respondent in CA-G.R. SP No. 10888 all the way to the Supreme Court. Private respondent Richard Goking, however, was not
a party in the previous cases. He was impleaded only in Civil Case No. 89-098 after finality of the decisions in G.R. Nos. 79100 and 78315. Although
he obtained his title to the property "subsequent to the commencement of the action," his rights to the property arose as buyer at the said sale, not
as a creditor from any direct transaction with or title obtained from Commercial Credit, the judgment creditor. As the highest bidder, respondent Go
King was issued a certificate of sale, and subsequently a final deed of conveyance for which TCT No. T-3383 of petitioner was cancelled and TCT No.
T-51704 was issued in his name. The second case, Civil Case No. 89-098, was brought against him for the cancellation of his title over the subject
property due to irregularities in the execution sale, not from the merits of the compromise judgment. There is therefore no identity of parties in CA-
G.R. SP No. 10888 and Civil Case No. 89-098.

22
Neither is there identity of subject matter. CA-G.R. SP No. 10888 did not directly involve the property subject matter of this case. It was concerned
with the provisions of the compromise judgment and the claim that petitioner was denied due process by the trial court in granting execution. On
the other hand, Civil Case No. 89-098 dealt with the validity of the execution proceedings after the validity of the compromise judgment was upheld. 39
The two cases do not have the same causes of action. The test of identity of causes of action lies not in the form of action but on whether the same
facts or evidence would support and establish the former and present causes of action. 40 The doctrine of res judicata extends to facts and conditions
as they existed at the time judgment was rendered and to the legal rights and relations of the parties fixed by the facts so determined. 41 The mere
fact that the same relief is sought in the subsequent action will not render the judgment in the prior action operative as res judicata, such as when
the two actions are brought on different statutes and rules as in the case at bar. 42
From the pleadings, the causes of action in CA-G.R. SP No. 10888 involved the lack of due process, the invalidity of the compromise judgment itself,
particularly the provisions on the rates of interest and penalties vis-a-vis the Usury Law and C.B. Circular No. 721, as well as the application of
payments under the Civil Code. On the other hand, the cause of action in Civil Case No. 89-098 is anchored on the validity of the execution proceedings
and the debtor's exercise of the right of redemption under Rule 39 of the Rules of Court.
In its motion for reconsideration of the Court of Appeals' decision in CA-G.R. SP No. 10888, petitioner assailed the validity of the writ of execution,
the sheriff's notice of sale, the public auction sale of February 13, 1987 and the certificate of sale. A careful examination of said motion for
reconsideration reveals that the validity of these documents of execution was assailed with respect to the computation of the amount of petitioner's
debt subject of execution for not being in accordance with the decision of the Court of Appeals. In other words, it was the amount subject of execution
that was questioned insofar as it did not conform with the reduced rates of interest and penalty charges imposed by the Court of Appeals. In fact,
the Court of Appeals nullified the writ of execution, sheriff's notice of sale, the public auction sale and the certificate of sale insofar as they were in
excess of the modified judgment. The computation of petitioner's outstanding balance goes into the substantive provisions of the compromise
judgment. Petitioner did not squarely and directly challenge the procedural infirmity of the execution proceedings but pursued the merits of the
compromise judgment itself.
G.R. No. 79100 was dismissed by this Court for late filing and on the ground that the Court of Appeals committed no reversible error. G.R. No. 78315
reversed the decision of the Court of Appeals in CA-G.R. SP No. 10888 and sustained the compromise judgment. Our factual finding then was that
the execution proceedings "did not take place as scheduled due to some internal problems in the office of the sheriff." 43 The facts in the instant case
now deal with the execution proceedings themselves. The two cases are not the same for the simple reason that the cause of action in Civil Case No.
89-098 arose only after the merits of the compromise judgment were passed upon with finality by this Court. It was error for respondent Court of
Appeals therefore to declare that Civil Case No. 89-098 was a "relitigation of issues" in CA-G.R. SP No.
10888. 44
There being no res judicata, we now come to the merits of the instant petition. Petitioner corporation specifically alleges that the execution
proceedings and the auction sale were null and void for failure to comply with the levy and notice requirements of the Rules of Court.
Execution under Rule 39 of the Revised Rules of Court is a remedy afforded by law for the enforcement of a judgment, its object being to obtain
satisfaction of the judgment on which the writ is issued. 45 It issues by order of the court a quo, on motion of the judgment obligee, upon finality of
a judgment or order sought to be enforced, 46 and is directed to an officer authorizing and requiring him to execute the judgment of the court. 47
If the judgment is for money, the sheriff or other authorized officer must execute the same pursuant to the provisions of Section 15 of Rule 39 of the
Rules of Court, viz:
Sec. 15. Execution of money judgments. — The officer must enforce an execution of a money judgment by levying on all the
property, real and personal of every name and nature whatsoever, and which may be disposed of for value, of the judgment
debtor not exempt from execution, or on a sufficient amount of such property, if there be sufficient, and selling the same, and
paying to the judgment creditor, or his attorney, so much of the proceeds as will satisfy the judgment. Any excess in the proceeds
over the judgment and accruing costs must be delivered to the judgment debtor, unless otherwise directed by the judgment or
order of the court. When there is more property of the judgment and accruing costs, within the view of the officer, he must levy
only on such part of the property as is amply sufficient to satisfy the judgment and costs.
Real property, stocks, shares, debts, credits, and other personal properly, or any interest in either real or personal property, may
be levied on in like manner and with like effect as under a writ of attachment. 48
In executing a money judgment against the property of the judgment debtor, the sheriff shall levy on all property belonging to the judgment debtor
as is amply sufficient to satisfy the judgment and costs, and sell the same paying to the judgment creditor so much of the proceeds as will satisfy the
amount of the judgment debt and costs. Any excess in the proceeds shall be delivered to the judgment debtor unless otherwise directed by the
judgment or order of the
court. 49
Levy means the essential act or acts by which an officer sets apart or appropriates a part or the whole of the property of the judgment debtor for
purposes of the prospective execution sale. 50 The object of a levy is to take property into the custody of the law, and thereby renders it liable to the
lien of the execution, and put it out of the power of the judgment debtor to divert it to any other use or purpose. 51 A valid levy on execution places
the property subject of execution under the jurisdiction and authority of the court. 52 It also creates a lien in favor of the judgment creditor over the
right, title and interest of the judgment debtor in such property at the time of the levy, subject to liens and encumbrances then existing. 53
The second paragraph of Section 15, Rule 39 as aforequoted provides that a levy is effected in the same manner as the levy under a writ of attachment.
Rule 57 on Attachment provides:
Sec. 7. Attachment of real and personal property; recording thereof. — Properties shall be attached by the officer executing the
order in the following manner:
(a) Real property, or growing crops thereon, standing upon the records of the registrar of deeds of the province in the name of
the party against whom attachment is issued, or not appearing at all upon such records, by filing with the registrar of deeds a
copy of the order, together with a description of the property attached, and a notice that it is attached, and by leaving a copy of
such order, description, and notice with the occupant of the property, of any there be. Where the property has been brought
under the operation of the Land Registration Act, the notice shall contain a reference to the number of the certificate of title and
the volume and page in the registration book where the certificate is registered. The registrar must index attachments filed under
this paragraph in the names of both of the applicant and the adverse party.
xxx xxx xxx. 54
To effect a levy upon a realty, the sheriff is required to do two specific things: (1) file with the register of deeds a copy of the order of attachment or
execution, together with the description of the attached property and notice of attachment or execution; and (2) leave with the occupant of the
property copy of the same order, description and notice. 55 These are prerequisites to a valid levy, non-compliance with any of which is fatal. 56

23
In the instant case, the execution sale of the subject property was made pursuant to the order of execution of November 26, 1986 and the writ of
execution of December 4, 1986. The November 26, 1986 execution order and the corresponding writ of execution were not filed with the Register of
Deeds before the auction sale of February 13, 1987. The order of November 26, 1986 was filed and inscribed on petitioner's title only on December
7, 1988 — exactly one (1) year and ten (10) months after the execution sale of February 13, 1987. This is clear from the annotation in TCT No. T-3383
of petitioner corporation. Thus:
Entry No. 132984 — Order issued by the Hon. Judge Ricardo P. Galves denying the motion for reconsideration filed by respondent
Coliseum, and ordering that a writ of execution be issued against said respondent for the collection of its outstanding obligation
of P64,956.19 with the respondent CCC, including the "three (3%) per cent per month penalty charge until fully paid, plus five per
cent (5%) of the outstanding balance as additional attorney's fees" as provided in paragraph 5 of the compromise
agreement. Date of Order November 26, 1986. Date of Inscription December 7, 1988 at 2:30 P.M. 57
Clearly, the execution order of November 26, 1986 was filed with the Register of Deeds only after the execution sale of February 13, 1987. The
belated filing came after the execution of the Sheriff's Certificate of Sale, after the issuance of the Sheriff's Certificate of Final Deed of
conveyance; 58 and after cancellation of TCT No. T-3383 of petitioner and the issuance of TCT No. T-51704 in the name of respondent Goking on
October 20, 1988. 59 Respondent Sheriff himself admitted on the witness stand that he did not file a copy of the November 26, 1986 order of execution
with the Register of Deeds before the February 13, 1987 sale on the belief that the property had already been levied upon by Sheriff Acero. 60 An
examination of TCT No. T-3383 shows that the court order and writ of execution filed by Sheriff Acero with the Register of Deeds before the auction
sale was not the November 26, 1986 order but the March 9, 1983 order, viz:
Entry No. 103724 — Notice of Attachment or Levy executed by Arturo B. Acero — Deputy Provincial Sheriff, that the Provincial
Sheriff or any of his deputies is commanded to make out of the properties, personal and real, of the petitioner — Ralph T. Willkom,
in the amount of P70,152.68 representing the outstanding obligation of petitioners by way of their compromise agreement,
excluding sheriff's fees and expenses, all the titled, rights, interest, shares and participations of said petitioners Ralph Lou T.
Willkom, et. al., petitioners v. Rufo J. Waminal, etc., Commercial Credit Corporation of Cagayan de Oro City, etc., "Special Civil
Action No. 6811, For: Injunction." (Date of Instrument — March 11, 1983. Date of Inscription — March 11, 1983 at 1:30 P.M.)
Entry No. 105125 — Writ of Execution executed by Segundo C. Roy — Deputy Clerk of Court of Ralph Lou T.
Willkom, et. al., Petitioners, versus Rufo J. Waminal, etc. Commercial Credit Corporation of Cagayan de Oro, etc., Defendants of
SP Civil Action No. 6811 for: Injunction. (Date of Instrument — March 10, 1983. Date of Inscription — March 11, 1983 at 1:30
P.M.) 61
What was filed with the Register of Deeds before the execution sale of February 13, 1987 was not the order of November 26, 1986 but the
March 9, 1983 order of execution. The writ of execution and notice of levy filed with the Register of Deeds on March 11, 1983 and inscribed
on petitioner's title the same day were pursuant to the March 9, 1983 order of execution.
The March 9, 1983 order was rendered ex-parte. The trial court issued the order of execution for the amount prayed for by Commercial Credit, i.e.,
P70,152.68, excluding sheriff's fees and expenses in its motion for execution. On reconsideration by petitioner, the court, on November 26, 1986,
reduced the amount of the principal debt to P64,956.19 but added the monthly penalty of 3% and additional attorney's fees of 5%. With these
charges, the judgment debt increased to P167,367.40, which amount was more than double than that stated in the first execution order. 62
The order of November 26, 1986 did not supplement the March 9, 1983 order. It amended the original. The substantial increase in the amount of
debt necessarily affected the kind and number of property that was to be levied upon and sold, and the price the property was to command at the
public auction sale. The amendment was of such proportion that it superseded that which it
amended 63 and gave rise to an entirely new order. 64 The March 9, 1983 order was therefore extinguished and the one of November 26, 1986 became
the new order of execution. 65
It was on the basis of the November 26, 1986 order that the execution sale actually took place on February 13, 1987. Since this order was not filed
with the Register of Deeds prior to the execution sale, it follows that the levy was not effected and the execution sale of February 13, 1987 proceeded
without a levy. 66 A lawful levy on execution is indispensable to a valid sale on execution. 67 In other words, a sale, unless preceded by a valid levy, is
void, and the purchaser acquires no title to the property sold. 68 Without a proper levy, the property is not placed under the authority of the court.
The court does not acquire jurisdiction over the property subject of execution, hence, it could not transmit title thereto at the time of the
sale. 69 Where in the instant case no jurisdiction was acquired over the subject property, the execution sale was void and of no legal effect. 70 And
the trial court did not err in so ruling. 71
It appears that petitioner has consigned redemption money to the court a quo as an alternative cause of action. Private respondent argues that
redemption is inconsistent with the claim of invalidity of the levy and sale. In the case at bar, however, petitioner has expressly averred that the
redemption was made purely on the assumption, not admission, of the validity of the execution proceedings. 73 Petitioner has consistently questioned
the validity of the execution proceedings. It would be unjust to deprive it of the opportunity to recover its one and only real property 74 by the simple
expedient of estoppel despite the express condition attached to its redemption. After all, the Rules of Court provide that a party may in one pleading
set forth two or more statements of a claim alternatively or hypothetically, either in one or in separate cause of action. 75
Lastly, the nullity of the execution proceedings does not discharge petitioner's indebtedness to Commercial Credit. The execution order of November
26, 1986 subsists. Unless petitioner corporation pays the amount determined under said order, execution proceedings may issue accordingly.
In view of these findings, there is no necessity for us to pass upon petitioner's second assigned error.
WHEREFORE, the petition is GRANTED and the Decision and Resolution of respondent Court of Appeals in CA-G.R. CV No. 43782 are REVERSED and
SET ASIDE. The Decision of the Regional Trial Court, Branch 19, Cagayan de Oro City in Civil Case No. 89-098 and Special Civil Action No. 6811 is
REINSTATED with the MODIFICATION that execution proceedings may henceforth issue, unless petitioner fully discharges its indebtedness under the
execution order of November 26, 1986.
SO ORDERED.

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 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION

A.M. No. RTJ-99-1445 June 21, 1999

VENTURA B. AYO, complainant,
vs.
JUDGE LUCIA VIOLAGO-ISNANI, BRANCH CLERK OF COURT JAIME M. LUY, SHERIFF JADI HATAB Regional Trial Court, Branch 59, Makati CLERK OF
COURT ERLINDA M. PEREZ, Regional Trial Court, Balanga Bataan, and LEGAL RESEARCHER JOEY A. ASTORGA, Regional Trial Court, Branch 5,
Dinalupihan, Bataan, respondents.

MENDOZA, J.:
This is a complaint filed by Ventura B. Ayo against Judge Lucia Violago-Isnani of the Regional Trial Court, Branch 59, of Makati City, and Atty. Jaime
M. Luy and Jadi I. Hatab, Clerk of Court V and Sheriff, respectively, of the same court, and Atty. Erlinda M. Perez, Clerk of Court VI, Regional Trial
Court of Balanga, Bataan, and Joey A. Astorga, Legal Researcher II of the Regional Trial Court, Branch 5, of Dinalupihan, Bataan.
Complainant was the representative of Vilma C. Aquino and her minor children who are plaintiffs in Civil Case No. 91-354. In an amended decision
rendered by respondent judge on September 4, 1996, Vilma Aquino and her children were awarded P50,000.00 as indemnity for the death of her
husband Ireneo Aquino; P1,101,600.00 for the loss of Ireneo's earning capacity; P14,000.00 actual damages; and P100,000.00 moral damages.
Complainant's charges and the respective comments of respondents are as follows:
(1) Clerk of Court Jaime M. Luy and Sheriff Jadi I. Hatab of the RTC, Branch 59 of Makati City.
Complainant alleged that it took respondents an unreasonably long time, from July 15, 1997, when the writ was issued, to December 17, 1997, to
enforce the writ of execution in favor of Vilma C. Aquino and her minor children. Complainant claimed that the two "did not even send the writ of
execution through registered mail to the appropriate Clerk of Court and/or the Sheriff and his deputy who have administrative jurisdiction to enforce
[said writ]."
In his comment, Clerk of Court Luy denied delaying the implementation of the writ of execution. He alleged that while he issued the writ of execution
on July 15, 1997, it was only on December 17, 1997 that complainant got the writ from him for delivery and payment of the required fees to the Clerk
of Court and Ex-Officio Sheriff, RTC of Balanga, Bataan. Luy pointed out that when an order was issued on January 9, 1998 authorizing Aquino and
her children to litigate as indigent parties, he immediately issued an alias writ of execution and endorsed the same to the Clerk of Court and Ex-
Officio Sheriff, RTC of Dinalupihan, Bataan.
For his part, Sheriff Hatab alleged that he had nothing to do with the writ of execution as the same was first addressed to the Clerk of Court and Ex-
Officio Sheriff of the RTC of Balanga, Bataan, and later endorsed to the RTC of Dinalupihan, Bataan.
2. Clerk of Court and Ex-Officio Sheriff Erlinda M. Perez of the RTC of Balanga, Bataan.
Complainant alleged that on December 19, 1997 he tried to give the writ of execution to respondent Perez, but the latter refused to receive and
enforce the same.
On the other hand, respondent Perez denied that she refused to receive the writ of execution. She said that as the persons against whom the writ
was issued were residents of Dinalupihan, Bataan, she referred the writ to Joey Astorga, the Officer-in-Charge of the RTC in Dinalupihan. She did this
in a letter dated the same day, the original of which was received by complainant himself for delivery to the addressee.
3. Clerk of Court and Ex-Officio Sheriff Joey A. Astorga of the RTC, Branch 5 of Dinalupihan, Bataan.
Complainant alleged that, for one month since complainant personally delivered to him the writ on January 27, 1998, Astorga did nothing to cause
its enforcement.
Respondent Astorga on the other hand alleged that when complainant filed the writ in his office on January 12, 1998, he informed the latter that the
Deputy Sheriff was out doing fieldwork and suggested that complainant return another time. However, when complainant came back on January 29,
1998, the writ could not be enforced as complainant had not deposited the amount necessary to defray the Deputy Sheriff's expenses. Respondent
Astorga alleged that Judge Jose Ener S. Fernando offered to give police escort and even "shell out the expenses that may be incurred in the
implementation of the writ that same date but [complainant] refused as be prefer[red] Manila Police as escort and the media people." Respondent
Astorga concluded his comment by saying that, insofar as he is concerned, "the deputy sheriff is doing her best, to have the decision of the court
fully implemented but Mr. Ayo [herein complainant] seems to be the one who causes delay in its implementation."
4. Judge Lucia Violago-Isnani, RTC, Branch 59 of Makati City.
Complainant alleged that he filed a motion to disqualify Atty. Jose V. Natividad as counsel for Vilma C. Aquino and her children, as well as Enrico
Tensuan and his representatives to negotiate on behalf of the Aquino; that at the hearing on his motion on February 6, 1998, Judge Isnani showed
her partiality toward Atty. Natividad and Tensuan by subjecting him (complainant) to humiliation, telling him that he was not a lawyer, and prevented
him from speaking when he tried to state the grounds for his motion. Complainant further alleged that on that date, Judge Isnani granted Atty.
Natividad 35 days to negotiate for a settlement with the defendants.
In her comment, respondent Judge Isnani alleged:
On January 30, 1998, Mr. Ayo, as representative of co-plaintiffs' Vilma Aquino and her minor children, filed a "Motion To Dismiss
And Disqualify Atty. Jose V. Natividad as Legal Counsel for the Co-plaintiffs (Vilma S. Aquino and Her Minor Children) etc." (Xerox
copy is hereto attached as Annex "B"). Mr. Ayo set the hearing of the motion on February 6, 1998 at 8:30 A.M.
During the hearing of the motion on February 6, 1998, the Court noticed that while Atty. Romualdo Din, Jr., counsel for the
defendants, was furnished with a copy of the said motion, Atty. Natividad, against whom the motion to dismiss and disqualify
was directed, was not. Hence, the undersigned pointed out to Mr. Ayo, who appeared as representative of co-plaintiffs Vilma
Aquino and her minor children, that since he claims in his motion to dismiss that: Atty. Natividad could no longer protect honestly
and effectively the individual interest of the co-plaintiffs in Civil Case No. 91-354; Atty. Natividad did not effectively and
completely carried out his duties as legal counsel for the co-plaintiffs; Atty. Natividad compromised the individual interest of the
indigent litigants, the widow and the orphans, to the self-interest of Mr. Enrico Tensuan (a wealthy and influential businessman);

25
 and Atty. Natividad should not compromise his client's litigation without special authority to do so, then in the interest of justice
and fair play, Atty. Natividad should be given a chance to comment. Mr. Ayo insisted that there is no need to furnish Atty.
Natividad with a copy of his Motion to Dismiss; that precisely he did not furnish Atty. Natividad with a copy of the motion was
because he did not want Atty. Natividad to prepare; and that he has all the right to dismiss Atty. Natividad as he does not trust
him anymore. Mr. Ayo started delivering a speech attacking Atty. Natividad. The undersigned admonished him to stop as Atty.
Natividad was not present in Court to answer his attack. But Mr. Ayo refused to stop and started lecturing on the freedom of
speech. At this point, the undersigned reminded Mr. Ayo that since he is not a lawyer, he does not know that his motion is litigious
and that notice is important and part of due process. Obviously, Mr. Ayo resented being admonished for he retorted that even if
he is not a lawyer, he has read the Rules of Court many times and there is nothing there to show that a lawyer must be notified
of his dismissal by his client. Mr. Ayo then proceeded to argue that since the co-plaintiffs whom he is representing, are pauper
litigants, the Court must be on their side.
On the same date, February 6, 1998, the Court through the undersigned, dictated an order in Open Court directing Mr. Ayo, to
furnish, within three days, Atty. Natividad with a copy of said motion and for Atty. Natividad to file his comment thereto within
five (5) days from receipt of said copy. The Court also reset the hearing of the motion to March 13, 1998. (Xerox copy of the Order
dated February 6, 1998 is hereto attached as Annex "C"). Throughout the proceedings on February 6, 1998, the undersigned
never spoke "harshly" to Mr. Ayo or to anyone, for that matter. The undersigned was very patient with Mr. Ayo knowing pretty
well that he is not a lawyer and the fact that the co-plaintiffs (he represents in Court) are poor litigants.
Respondent judge denied that the implementation of the writ of execution in Civil Case No. 91-354 was delayed. She pointed out that, on June 23,
1998, she received a Sheriff's Report, dated April 22, 1998, from Corazon L. Bautista, Sheriff IV of the RTC, Branch 5, Dinalupihan, Bataan, to the effect
that the writ of execution issued by respondent Clerk of Court Jaime M. Luy was duly implemented and that defendant Noel J. Cruz promised to settle
the case amicably with the conformity of herein complainant, the authorized representative of plaintiff Vilma Aquino.
On March 15, 1999, the Office of the Court Administrator submitted the following evaluation and recommendation:
EVALUATION:
I. Atty. JAYME M. LUY
The excuse of respondent Luy that it was only after five (5) months that complainant made a follow-up regarding the writ is not
tenable because it is incumbent upon him to act with considerable dispatch so as not to unduly delay the administration of justice.
His defense that the required fees should be paid first is not available to him because payment of the same should be made in
Bataan and not in Makati.
Moreover, as asserted by the complainant, respondent should have sent a copy of the writ at least through registered mail to the
proper court personnel at Dinalupihan, Bataan. The mistake of respondent in sending the writ to Balanga, Bataan instead of
sending it to Dinalupihan shows that he is not too diligent and careful which unduly delayed the enforcement of the writ causing
prejudice to the rights of the complainant.
In view of the foregoing, respondent should be admonished and warned that a repetition of the same or similar act would be
dealt with severely.
II. Sheriff JADI T. HATAB
Respondent Hatab correctly argued that he be blamed for the delay being complained since he had nothing to do with the subject
writ considering that he was not the addressee thereof.
The case as against him should be dismissed.
III. Atty. ERLINDA M. PEREZ
The defense raised by respondent Perez is meritorious. She cannot be held liable for Abuse of Discretion and Non-feasance merely
because she refused to receive and implement the subject writ. The reasons she gave in support of her defense are legal and
valid. In so far as she is concerned, this case should be dismissed.
IV. JOEY A. ASTORGA
The complainant's allegation that the writ and other documents remained in respondent Ayo's table from January 12, 1998 up to
January 27, 1998 was not substantiated. While the explanation of respondent that the writ already endorsed to the deputy sheriff
is supported by the legal presumption that he performed his duty with regularity.
Furthermore, fifteen (15) days of delay is not extra-ordinary long as to show deliberate delay as suggested by the complainant.
The case as against him should also be dismissed.
V. Judge LUCIA VIOLAGO-ISNANI
Respondent Judge is not liable for grave abuse of discretion and partially. Her actions clearly showed that she was scrupulous in
seeing to it that the requirements of fair play and due process were satisfied.
The allegation of complaint that respondent manifested partiality by humiliating him in open court stands on a shaky ground.
There was no evidence submitted to prove the same. Assuming arguendo that complaint was ordered to refrain from talking
during the hearing on February 6, 1998, respondent Judge cannot be faulted for so doing because the judge conducting a trial is
not mere moderator but is the governor of the trial for the purpose of assuring its proper conduct and the fair and impartial
administration of justice between the parties to the litigation. Freedom of expression cannot be invoked by complainant because
it is available only in so far as it is exercised for the discussion of matters affecting public interest; purely private matters do not
come within the guaranty.
Anent the contention of complainant that respondent judge's order dated February 6, 1998 was unjust, no merit may be given
to such considering that hearings of cases or incidents thereof are ordinarily re-scheduled to a further date in view of heavy case-
load of court's calendar especially those situated in Metro Manila.
RECOMMENDATION: Respectfully submitted for the consideration of the Honorable Court are our recommendations that:
1. This case be RE-DOCKETED as an administrative matter as regards respondent Atty. Jayme M. Luy;
2. Respondent Atty. Jayme M. Luy be ADMONISHED for his non-feasance and be WARNED that a repetition of the same or similar
act, would be dealt with severely; and

26
 3. The case against the other respondents be DISMISSED for lack of merit.
Except as to respondent Jaime M. Luy, the Court finds the foregoing recommendation to be well taken.
As the Court has more than once stated, execution is the fruit and end of the suit and is the life of law. 1 A judgment that is left unexecuted is nothing
but an empty victory for the prevailing party.2
In the case at bar, Clerk of Court Jaime M. Luy must take responsibility for the delay in the implementation of the writ of execution in Civil Case No.
91-354. He gave no reason why, considering that the writ of execution was issued as early as July 15, 1997, he gave the same to complainant for
delivery to the RTC of Bataan only on December 17, 1997. It would appear that had not complainant followed up the matter with respondent, the
writ would not have been sent to the RTC of Bataan. Worse, when he finally issued the writ, respondent Luy endorsed it to the Balanga branch of the
RTC of Bataan which does not have the territorial jurisdiction to enforce the writ. 3 He was finally able to endorse an alias writ of execution to the
Clerk of Court and Ex-Officio Sheriff of the appropriate court, the RTC of Dinalupihan, Bataan, only on June 9, 1998.
As an officer of the court, respondent was duty-bound to use reasonable skill and diligence in the performance of his officially designated duties.4 He
has fallen short of this standard as the preceding narration demonstrates. The OCA recommended that respondent Clerk of Court Jaime M. Luy be
merely admonished and warned that a repetition of the same or similar act would be dealt with more severely. The Court believes that the imposition
of a penalty is called for under the circumstances.
We find respondent Luy guilty of simple neglect of duty which, pursuant to the Civil Service Law, is a less grave offense punishable by suspension for
one month and one day to six months for the first infraction.
WHEREFORE, the Court RESOLVED to SUSPEND Atty. Jayme M. Luy, Clerk of Court V, RTC, Branch 59 of Makati City, for one month and one day with
WARNING that repetition of the same or similar acts would be dealt with more severely. As recommended by the Office of the Court Administrator,
the complaint, with respect to the other respondents, is DISMISSED for lack of merit.
SO ORDERED.1âwphi1.nêt

27
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 159941 August 17, 2011
HEIRS OF SPOUSES TEOFILO M. RETERTA and ELISA RETERTA, namely: EDUARDO M. RETERTA, CONSUELO M. RETERTA, and AVELINA M.
RETERTA, Petitioners,
vs.
SPOUSES LORENZO MORES and VIRGINIA LOPEZ, Respondents.
DECISION
BERSAMIN, J.:
The original and exclusive jurisdiction over a complaint for quieting of title and reconveyance involving friar land belongs to either the Regional Trial
Court (RTC) or the Municipal Trial Court (MTC). Hence, the dismissal of such a complaint on the ground of lack of jurisdiction due to the land in litis
being friar land under the exclusive jurisdiction of the Land Management Bureau (LMB) amounts to manifest grave abuse of discretion that can be
corrected through certiorari.
The petitioners, whose complaint for quieting of title and reconveyance the RTC had dismissed, had challenged the dismissal by petition for certiorari,
but the Court of Appeals (CA) dismissed their petition on the ground that certiorari was not a substitute for an appeal, the proper recourse against
the dismissal. They now appeal that ruling of the CA promulgated on April 25, 2003.1
Antecedents
On May 2, 2000, the petitioners commenced an action for quieting of title and reconveyance in the RTC in Trece Martires City (Civil Case No. TM-
983),2 averring that they were the true and real owners of the parcel of land (the land) situated in Trez Cruzes, Tanza, Cavite, containing an area of
47,708 square meters, having inherited the land from their father who had died on July 11, 1983; that their late father had been the grantee of the
land by virtue of his occupation and cultivation; that their late father and his predecessors in interest had been in open, exclusive, notorious, and
continuous possession of the land for more than 30 years; that they had discovered in 1999 an affidavit dated March 1, 1966 that their father had
purportedly executed whereby he had waived his rights, interests, and participation in the land; that by virtue of the affidavit, Sales Certificate No.
V-769 had been issued in favor of respondent Lorenzo Mores by the then Department of Agriculture and Natural Resources; and that Transfer
Certificate of Title No. T-64071 had later issued to the respondents.
On August 1, 2000, the respondents, as defendants, filed a motion to dismiss, insisting that the RTC had no jurisdiction to take cognizance of Civil
Case No. TM-983 due to the land being friar land, and that the petitioners had no legal personality to commence Civil Case No. TM-983.
On October 29, 2001, the RTC granted the motion to dismiss, holding:3
Considering that plaintiffs in this case sought the review of the propriety of the grant of lot 2938 of the Sta. Cruz de Malabon Friar Lands Estate by
the Lands Management Bureau of the defendant Lorenzo Mores through the use of the forged Affidavit and Sales Certificate No. V-769 which
eventually led to the issuance of T.C.T. No. T-64071 to defendant Lorenzo Mores and wife Virginia Mores, and considering further that the land
subject of this case is a friar land and not land of the public domain, consequently Act No. 1120 is the law prevailing on the matter which gives to the
Director of Lands the exclusive administration and disposition of Friar Lands. More so, the determination whether or not fraud had been committed
in the procurement of the sales certificate rests to the exclusive power of the Director of Lands. Hence this Court is of the opinion that it has no
jurisdiction over the nature of this action. On the second ground relied upon by the defendants in their Motion To Dismiss, suffice it to state that the
Court deemed not to discuss the same.
IN VIEW OF THE FOREGOING, let this instant case be dismissed as it is hereby dismissed.
SO ORDERED.
The petitioners then timely filed a motion for reconsideration, but the RTC denied their motion for reconsideration on February 21, 2002.4
On May 15, 2002, therefore, the petitioners assailed the dismissal via petition for certiorari, but the CA dismissed the petition on April 25, 2003,
holding: 5
Thus, the basic requisite for the special civil action of certiorari to lie is that there is no appeal, nor any plain, speedy and adequate remedy in the
ordinary course of law.
In the case at bench, when the court rendered the assailed decision, the remedy of the petitioners was to have appealed the same to this Court. But
petitioners did not. Instead they filed the present special civil action for certiorari on May 15, 2002 after the decision of the court a quo has become
final.
The Order dismissing the case was issued by the court a quo on 29 October 2001, which Order was received by the petitioners on November 16,
2001. Petitioners filed a motion for reconsideration dated November 26, 2001 but the same was denied by the court a quo on 21 February 2002. The
Order denying the motion for reconsideration was received by the petitioners on 20 March 2002.
Petitioners filed this petition for certiorari on May 15, 2002. Certiorari, however cannot be used as a substitute for the lost remedy of appeal.
In Bernardo vs. Court of Appeals, 275 SCRA 423, the Supreme Court had the following to say:
"We have time and again reminded members of the bench and bar that a special civil action for certiorari under Rule 65 lies only when "there is no
appeal nor plain, speedy and adequate remedy in the ordinary course of law." Certiorari cannot be allowed when a party to a case fails to appeal a
judgment despite the availability of that remedy, certiorari not being a substitute for lost appeal. The remedies of appeal and certiorari are mutually
exclusive and not alternative or successive."
WHEREFORE, in view of the foregoing, the instant petition is hereby DISMISSED.
SO ORDERED.
On September 9, 2003, the CA denied the petitioners’ motion for reconsideration. 6
Hence, this appeal.
Issues
The petitioners submit that:

28
I.
IT IS REVERSIBLE ERROR OF THE HONORABLE COURT OF APPEALS TO DISREGARD THE PROVISIONS OF SECTION 1, RULE 41, SECOND PARAGRAPH,
SUBPARAGRAPH (a), AND SECTION 9, RULE 37, 1997 RULES OF COURT;
II.
IT IS REVERSIBLE ERROR FOR THE HONORABLE COURT OF APPEALS TO APPLY THE RULING IN THE CASE OF ROSETE vs. COURT OF APPEALS, 339 SCRA
193, 199, NOTWITHSTANDING THE FACT THAT THE 1997 RULES OF CIVIL PROCEDURE ALREADY TOOK EFFECT ON JULY 1, 1997.
III.
IT IS REVERSIBLE ERROR FOR THE HONORABLE COURT OF APPEALS IN NOT FINDING THAT THE TRIAL JUDGE GRAVELY ABUSED ITS DISCRETION WHEN
IT DISMISSED THE COMPLAINT RULING THAT IT HAS NO JURISDICTION OVER THE NATURE OF THE ACTION, AND IN NOT FINDING THAT THE TRIAL
JUDGE HAS JURISDICTION OVER THE SAME.7
Briefly stated, the issue is whether or not the CA erred in dismissing the petition for certiorari.
Ruling
The appeal is meritorious.
1.
Propriety of certiorari as remedy
against dismissal of the action
The CA seems to be correct in dismissing the petition for certiorari, considering that the order granting the respondents’ motion to dismiss was a
final, as distinguished from an interlocutory, order against which the proper remedy was an appeal in due course. Certiorari, as an extraordinary
remedy, is not substitute for appeal due to its being availed of only when there is no appeal, or plain, speedy and adequate remedy in the ordinary
course of law.8
Nonetheless, the petitioners posit that a special civil action for certiorari was their proper remedy to assail the order of dismissal in light of certain
rules of procedure, specifically pointing out that the second paragraph of Section 1 of Rule 37 of the Rules of Court ("An order denying a motion for
new trial or reconsideration is not appealable, the remedy being an appeal from the judgment or final order") prohibited an appeal of a denial of the
motion for reconsideration, and that the second paragraph of Section 1 of Rule 41 of the Rules of Court ( "No appeal may be taken from: xxx An order
denying a motion for new trial or reconsideration") expressly declared that an order denying a motion for reconsideration was not appealable. They
remind that the third paragraph of Section 1 of Rule 41 expressly provided that in the instances "where the judgment or final order is not appealable,
the aggrieved party may file an appropriate special civil action under Rule 65."
The petitioners’ position has no basis.
For one, the order that the petitioners really wanted to obtain relief from was the order granting the respondents’ motion to dismiss, not the denial
of the motion for reconsideration. The fact that the order granting the motion to dismiss was a final order for thereby completely disposing of the
case, leaving nothing more for the trial court to do in the action, truly called for an appeal, instead of certiorari, as the correct remedy.
The fundamental distinction between a final judgment or order, on one hand, and an interlocutory order, on the other hand, has been outlined in
Investments, Inc. v. Court of Appeals,9 viz:
The concept of ‘final’ judgment, as distinguished from one which has ‘become final’ (or ‘executory’ as of right [final and executory]), is definite and
settled. A ‘final’ judgment or order is one that finally disposes of a case, leaving nothing more to be done by the Court in respect thereto, e.g., an
adjudication on the merits which, on the basis of the evidence presented at the trial declares categorically what the rights and obligations of the
parties are and which party is in the right; or a judgment or order that dismisses an action on the ground, for instance, of res judicata or prescription.
Once rendered, the task of the Court is ended, as far as deciding the controversy or determining the rights and liabilities of the litigants is concerned.
Nothing more remains to be done by the Court except to await the parties’ next move (which among others, may consist of the filing of a motion for
new trial or reconsideration, or the taking of an appeal) and ultimately, of course, to cause the execution of the judgment once it becomes ‘final’ or,
to use the established and more distinctive term, ‘final and executory.’
xxx
Conversely, an order that does not finally dispose of the case, and does not end the Court’s task of adjudicating the parties’ contentions and
determining their rights and liabilities as regards each other, but obviously indicates that other things remain to be done by the Court, is
‘interlocutory,’ e.g., an order denying a motion to dismiss under Rule 16 of the Rules, or granting a motion for extension of time to file a pleading, or
authorizing amendment thereof, or granting or denying applications for postponement, or production or inspection of documents or things, etc.
Unlike a ‘final’ judgment or order, which is appealable, as above pointed out, an ‘interlocutory’ order may not be questioned on appeal except only
as part of an appeal that may eventually be taken from the final judgment rendered in the case.
Moreover, even Section 9 of Rule 37 of the Rules of Court, cited by the petitioners, indicates that the proper remedy against the denial of the
petitioners’ motion for reconsideration was an appeal from the final order dismissing the action upon the respondents’ motion to dismiss. The said
rule explicitly states thusly:
Section 9. Remedy against order denying a motion for new trial or reconsideration. – An order denying a motion for new trial or reconsideration is
not appealable, the remedy being an appeal from the judgment or final order.
The restriction against an appeal of a denial of a motion for reconsideration independently of a judgment or final order is logical and reasonable. A
motion for reconsideration is not putting forward a new issue, or presenting new evidence, or changing the theory of the case, but is only seeking a
reconsideration of the judgment or final order based on the same issues, contentions, and evidence either because: (a) the damages awarded are
excessive; or (b) the evidence is insufficient to justify the decision or final order; or (c) the decision or final order is contrary to law.10 By denying a
motion for reconsideration, or by granting it only partially, therefore, a trial court finds no reason either to reverse or to modify its judgment or final
order, and leaves the judgment or final order to stand. The remedy from the denial is to assail the denial in the course of an appeal of the judgment
or final order itself.
The enumeration of the orders that were not appealable made in the 1997 version of Section 1, Rule 41 of the Rules of Court – the version in force
at the time when the CA rendered its assailed decision on May 15, 2002 – included an order denying a motion for new trial or motion for
reconsideration, to wit:
Section 1. Subject of appeal. — An appeal may be taken from a judgment or final order that completely disposes of the case, or of a particular matter
therein when declared by these Rules to be appealable.

29
No appeal may be taken from:
(a) An order denying a motion for new trial or reconsideration;
(b) An order denying a petition for relief or any similar motion seeking relief from judgment;
(c) An interlocutory order;
(d) An order disallowing or dismissing an appeal;
(e) An order denying a motion to set aside a judgment by consent, confession or compromise on the ground of fraud, mistake or duress, or
any other ground vitiating consent;
(f) An order of execution;
(g) A judgment or final order for or against one or more of several parties or in separate claims, counterclaims, cross-claims and third-party
complaints, while the main case is pending, unless the court allows an appeal therefrom; and
(h) An order dismissing an action without prejudice.
In all the above instances where the judgment or final order is not appealable, the aggrieved party may file an appropriate special civil action under
Rule 65. (n)
It is true that Administrative Matter No. 07-7-12-SC, effective December 27, 2007, has since amended Section 1, Rule 41, supra, by deleting an order
denying a motion for new trial or motion for reconsideration from the enumeration of non-appealable orders, and that such a revision of a procedural
rule may be retroactively applied. However, to reverse the CA on that basis would not be right and proper, simply because the CA correctly applied
the rule of procedure in force at the time when it issued its assailed final order.
2.
RTC or MTC has jurisdiction over the action
The settled rule precluding certiorari as a remedy against the final order when appeal is available notwithstanding, the Court rules that the CA should
have given due course to and granted the petition for certiorari for two exceptional reasons, namely: (a) the broader interest of justice demanded
that certiorari be given due course to avoid the undeserved grossly unjust result that would befall the petitioners otherwise; and (b) the order of the
RTC granting the motion to dismiss on ground of lack of jurisdiction over the subject matter evidently constituted grave abuse of discretion amounting
to excess of jurisdiction.
On occasion, the Court has considered certiorari as the proper remedy despite the availability of appeal, or other remedy in the ordinary course of
law. In Francisco Motors Corporation v. Court of Appeals, 11 the Court has declared that the requirement that there must be no appeal, or any plain
speedy and adequate remedy in the ordinary course of law admits of exceptions, such as: (a) when it is necessary to prevent irreparable damages
and injury to a party; (b) where the trial judge capriciously and whimsically exercised his judgment; (c) where there may be danger of a failure of
justice; (d) where an appeal would be slow, inadequate, and insufficient; (e) where the issue raised is one purely of law; (f) where public interest is
involved; and (g) in case of urgency.
Specifically, the Court has held that the availability of appeal as a remedy does not constitute sufficient ground to prevent or preclude a party from
making use of certiorari if appeal is not an adequate remedy, or an equally beneficial, or speedy remedy. It is inadequacy, not the mere absence of
all other legal remedies and the danger of failure of justice without the writ, that must usually determine the propriety of certiorari.12 A remedy is
plain, speedy and adequate if it will promptly relieve the petitioner from the injurious effects of the judgment, order, or resolution of the lower court
or agency.13 It is understood, then, that a litigant need not mark time by resorting to the less speedy remedy of appeal in order to have an order
annulled and set aside for being patently void for failure of the trial court to comply with the Rules of Court. 14
Nor should the petitioner be denied the recourse despite certiorari not being available as a proper remedy against an assailed order, because it is
better on balance to look beyond procedural requirements and to overcome the ordinary disinclination to exercise supervisory powers in order that
a void order of a lower court may be controlled to make it conformable to law and justice. 15 Verily, the instances in which certiorari will issue cannot
be defined, because to do so is to destroy the comprehensiveness and usefulness of the extraordinary writ. The wide breadth and range of the
discretion of the court are such that authority is not wanting to show that certiorari is more discretionary than either prohibition or mandamus, and
that in the exercise of superintending control over inferior courts, a superior court is to be guided by all the circumstances of each particular case "as
the ends of justice may require." Thus, the writ will be granted whenever necessary to prevent a substantial wrong or to do substantial justice.16
The petitioners’ complaint – self-styled as being for the "quieting of title and reconveyance, declaration of nullity of affidavit & Sales Certificate,
reconveyance and damages" – would challenge the efficacy of the respondents’ certificate of title under the theory that there had been no valid
transfer or assignment from the petitioners’ predecessor in interest to the respondents of the rights or interests in the land due to the affidavit
assigning such rights and interests being a forgery and procured by fraud.
The petitioners’ cause of action for reconveyance has support in jurisprudence bearing upon the manner by which to establish a right in a piece of
friar land. According to Arayata v. Joya,17 in order that a transfer of the rights of a holder of a certificate of sale of friar lands may be legally effective,
it is necessary that a formal certificate of transfer be drawn up and submitted to the Chief of the Bureau of Public Lands for his approval and
registration. The law authorizes no other way of transferring the rights of a holder of a certificate of sale of friar lands. In other words, where a person
considered as a grantee of a piece of friar land transfers his rights thereon, such transfer must conform to certain requirements of the law. Under
Director of Lands v. Rizal,18 the purchaser in the sale of friar lands under Act No. 1120 is already treated by law as the actual owner of the lot purchased
even before the payment of the full payment price and before the execution of the final deed of conveyance, subject to the obligation to pay in full
the purchase price, the role or position of the Government becoming that of a mere lien holder or mortgagee. 19
Thus, pursuant to Section 16 of Act No. 1120,20 had grantee Teofilo Reterta perfected his title, the petitioners as his heirs would have succeeded him
and taken title from him upon his death. By law, therefore, should the execution of the deed in favor of the respondents be held invalid, the interests
of Teofilo Reterta should descend to the petitioners and the deed should issue in their favor. Adding significance to the petitioners’ claim was their
allegation in the complaint that they were in possession of the land. Moreover, as alleged in the petitioners’ opposition to the motion to dismiss of
the respondents, Teofilo Reterta had partially paid the price of the land.21
Given the foregoing, the petitioners’ complaint made out a good case for reconveyance or reversion, and its allegations, if duly established, might
well warrant the reconveyance of the land from the respondents to the petitioners. It did not matter that the respondents already held a certificate
of title in their names. In essence, an action for reconveyance respects the incontrovertibility of the decree of registration but seeks the transfer of
the property to its rightful and legal owner on the ground of its having been fraudulently or mistakenly registered in another person’s name. There
is no special ground for an action for reconveyance, for it is enough that the aggrieved party asserts a legal claim in the property superior to the claim
of the registered owner, and that the property has not yet passed to the hands of an innocent purchaser for value. 22 On this score, it is also worthy

30
to stress that the title of a piece of a friar land obtained by a grantee from the Government without conforming with the requirements set by the law
may be assailed and nullified.
Was the petitioners’ action for reconveyance within the jurisdiction of the regular court?
We answer the query in the affirmative.
The law governing jurisdiction is Section 19 (2) of Batas Pambansa Blg. 129,23 as amended by Republic Act No. 7691,24 which provides:
Section 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall exercise exclusive original jurisdiction: xxx
xxx
(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property
involved exceeds Twenty thousand pesos (₱20,000.00) or for civil actions in Metro Manila, where such value exceeds Fifty thousand pesos
(₱50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts;
xxx
Conformably with the provision, because an action for reconveyance or to remove a cloud on one’s title involves the title to, or possession of, real
property, or any interest therein, exclusive original jurisdiction over such action pertained to the RTC, unless the assessed value of the property did
not exceed ₱20,000.00 (in which instance the MTC having territorial jurisdiction would have exclusive original jurisdiction). Determinative of which
regular court had jurisdiction would be the allegations of the complaint (on the assessed value of the property) and the principal relief thereby
sought.25
The respondents’ reliance on Section 12 and Section 18 of Act No. 1120 to sustain their position that the Bureau of Public Lands (now LMB) instead
had exclusive jurisdiction was without basis. The provisions read:
Section 12. xxx the Chief of the Bureau of Public Lands shall give the said settler and occupant a certificate which shall set forth in detail that the
Government has agreed to sell to such settler and occupant the amount of land so held by him, at the price so fixed, payable as provided in this Act
at the office of the Chief of Bureau of Public Lands xxx and that upon the payment of the final installment together with all accrued interest the
Government will convey to such settler and occupant the said land so held by him by proper instrument of conveyance, which shall be issued and
become effective in the manner provided in section one hundred and twenty-two of the Land Registration Act xxx.
Section 18. No lease or sale made by Chief of the Bureau of Public Lands under the provisions of this Act shall be valid until approved by the Secretary
of the Interior.1awphi1
As the provisions indicate, the authority of LMB under Act No. 1120, being limited to the administration and disposition of friar lands, did not include
the petitioners’ action for reconveyance. LMB ceases to have jurisdiction once the friar land is disposed of in favor of a private person and title duly
issues in the latter’s name. By ignoring the petitioners’ showing of its plain error in dismissing Civil Case No. TM-983, and by disregarding the
allegations of the complaint, the RTC acted whimsically and capriciously.
Given all the foregoing, the RTC committed grave abuse of discretion amounting to lack of jurisdiction. The term grave abuse of discretion connotes
whimsical and capricious exercise of judgment as is equivalent to excess, or lack of jurisdiction. 26 The abuse must be so patent and gross as to amount
to an evasion of a positive duty or to a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law as where the power
is exercised in an arbitrary and despotic manner by reason of passion or hostility.27
The dismissal of Civil Case No. TM-983, unless undone, would leave the petitioners bereft of any remedy to protect their substantial rights or interests
in the land. As such, they would suffer grave injustice and irreparable damage. In that situation, the RTC’s dismissal should be annulled through
certiorari, for the task of the remedy was to do justice to the unjustly aggrieved.28
WHEREFORE, the Court grants the petition for certiorari; sets aside the decision the Court of Appeals promulgated on April 25, 2003; and directs
Branch 23 of the Regional Trial Court in Trece Martires City to resume the proceedings in Civil Case No. TM-983 with dispatch.
The respondents shall pay the costs of suit.
SO ORDERED.

31
 THIRD DIVISION

[G.R. No. 139020. October 11, 2000.]

PAQUITO BUAYA, Petitioner, v. STRONGHOLD INSURANCE CO., Inc., Respondent.

DECISION

PANGANIBAN, J.:
Courts are duty-bound to put an end to controversies. Any attempt to prolong, resurrect or juggle them should be firmly struck down. The system of
judicial review should not be misused and abused to evade the operation of final and executory judgments. Moreover, the remand of a case does
not nullify the entire proceedings. It merely authorizes the trial court to receive additional evidence, not to conduct a trial de novo.chanrob1es virtua1
1aw 1ibrary
The Case

Before us is a Petition for Review on Certiorari of the August 28, 1998 Decision 1 of the Court of Appeals (CA) in CA-GR CV No. 52999, dismissing
Petitioner Paquito Buaya’s appeal of the trial court’s Order dated November 13, 1995, which denied his Petition for Relief. The assailed Decision
disposed as follows:jgc:chanrobles.com.ph

"IN THE LIGHT OF ALL THE FOREGOING, the Appeal is DISMISSED. The Order appealed from is AFFIRMED. With costs against the Appellant." 2
The Facts
The facts of this case are as follows: 3

"On July 31, 1985, . . . Stronghold Insurance Company, Inc., the [respondent] in the present recourse, filed a complaint against Paquito B. Buaya, its
erstwhile [b]ranch [m]anager for Cebu and the [petitioner] in the present recourse, for the collection of the principal amount of owing to the
[respondent]. For failure of the [petitioner] and his counsel to appear at the scheduled pre-trial, the [petitioner] was declared . . . in default, and
the [respondent] was allowed, by the [c]ourt, to adduce its evidence, ex parte. On the basis of the evidence of the [respondent], the Court a quo
promulgated a Decision, dated September 17, 1987, in favor of the [respondent], the decretal portion of which reads as follows:chanrob1es virtual
1aw library

‘WHEREFORE, judgment is hereby rendered in favor of the [respondent] and against the [petitioner] ordering the latter to pay the former the sum
of P678,076.83 plus legal interest thereon from the filing of the complaint until fully paid; the sum equivalent to 25% of [respondent’s] claim as and
for attorney’s fees plus the cost of suit.chanrob1es virtua1 1aw 1ibrary

SO ORDERED.’ (at page 135, Records).’

The [petitioner] appealed, from said Decision, to [the CA], entitled and docketed ‘Stronghold Insurance Co., Inc., versus Paquito B. Buaya, CA-GR.
No. 17329.’ On March 30, 1990, this [c]ourt promulgated a Decision in favor of the [petitioner] annulling the Decision of the [c]ourt a quo and
remanding the case to the lower [c]ourt for further proceedings. (at page 154, Records). The Decision of this [c]ourt became final and executory.
Accordingly, the [c]ourt a quo issued an Order setting the case for hearing on December 13, 1990 at 8:30 o’clock in the morning (at page 169,
Records). The [petitioner] himself filed a ‘Motion for Postponement’ of the hearing. [Petitioner’s] motion was granted by the [c]ourt a quo and the
hearing was reset [to] February 15, 1991, at 8:30 in the morning. However, the hearing was reset to March 14, 1991, at the same time, on motion
of the [respondent] (at page 180, Record). The [petitioner] himself filed a ‘Motion for Postponement’ of the hearing set on March 14, 1991 on the
ground that his [c]ounsel, Atty. Bartolome A. Avancena, had died and [petitioner] needed time to engage the services of new counsel. The hearing
was reset to May 16, 1991 at the same time (at page 187, Record). However, the [petitioner] filed another motion for the resetting of said hearing
on the ground that he needed [more] time to secure the services of new counsel. The hearing was reset to July 26, 1991, at the same time. But
then, the [petitioner] filed another motion for the postponement of said hearing on the ground that ‘he was weak and sickly’. However, the
[respondent] opposed [petitioner’s] motion. Nevertheless, the [c]ourt reset the hearing to November 29, 1991, at the same time, but subject to the
condition that if, for any reason, the [petitioner] still failed to appear on said setting, such failure shall be deemed a waiver of his right to present
evidence (at page 250, Records). On November 27, 1991, Atty. Manuel Maranga, the new counsel of the [petitioner], filed a ‘Motion to Postpone’.
The [respondent] opposed [petitioner’s] motion. On December 19, 1991, the [c]ourt a quo issued an Order denying [petitioner’s] motion and
declaring the [petitioner] to have waived his right to adduce evidence in his behalf (at page 222, Record). The [respondent] forthwith filed a motion
praying the [c]ourt to reinstate its Decision, dated September 17, 1987. The [petitioner] filed a ‘Motion for Reconsideration’ of the Order of the
[c]ourt a quo, dated December 19, 1991. On March 18, 1992, the [c]ourt a quo issued an Order denying [petitioner’s] ‘Motion for Reconsideration’
and granting [respondent’s] motion for the reinstatement of its Decision, dated September 17, 1987. The [petitioner] filed a ‘Petition for Certiorari’
with [the CA], entitled and docketed as ‘Paquito Buaya versus Hon. Fernando Agdamag, Et Al., [’] CA-G.R. No. 27814 (SP), assailing the Orders of the
[c]ourt a quo, dated December 19, 1991 and March 18, 1992. On August 24, 1992, [the CA] promulgated a Decision dismissing [petitioner’s]
Petition for lack of merit (at page 261, Record). The Decision of this [c]ourt became final and executory on June 28, 1993 (at page 282). 4 On
[m]otion of the [respondent], the [c]ourt a quo issued an Order, dated October 29, 1993, directing the issuance of a [W]rit of [E]xecution (at page
298, Record). The [petitioner] filed a ‘Motion for Reconsideration’ of said Order, dated October 29, 1993. On March 16, 1995, the [c]ourt a quo
issued an Order denying motion (at pages 359-360, Record). On April 12, 1995, the [petitioner] filed a ‘Notice of Appeal’ from said Order. However,
on May 11, 1995, the [c]ourt [a quo] issued an Order declining to give due course to the appeal of the [petitioner] considering that the Decision of
the [c]ourt had already become final and executory (at page 365, Record). On June 2, 1995, the [c]ourt a quo issued a Writ of Execution. On July 27,
1995, the [petitioner] filed a ‘Petition for Relief from Order’. On November 13, 1995, the [c]ourt a quo issued an Order denying the Petitioner’s
‘Petition for Relief."cralaw virtua1aw library
Ruling of the Court of Appeals
The CA denied petitioner’s appeal which centered on these issues: (1) whether the September 17, 1987 Decision of the trial court had become final
and executory, and (2) whether the failure of petitioner to inform his new counsel of the status of the case before the trial court constituted a
mistake and excusable negligence." chanrob1es virtua1 1aw 1ibrary

In view of the amount involved in the collection suit, the CA disbelieved petitioner’s contention that he had failed to apprise his counsel of the
status and the particulars of the case in the trial court. Granting arguendo that he did make such omission through sheer inadvertence, his counsel
was duty-bound to familiarize himself with the case before accepting the same, specially because litigation had already commenced. Such omission
did not constitute "mistake or excusable negligence" that would have entitled him to relief from the trial court’s judgment. Thus, he deserved to

32
suffer the consequences of his own mistake or omission.

Noting that the validity of the March 18, 1992 Order of the trial court reinstating its September 17, 1987 Decision had been affirmed by both the
CA and the Supreme Court, the CA also condemned the penchant of petitioner for resurrecting the same issues. Hence, his appeal was solely
designed to further derail the execution of the lower court’s Decision.

Besides, the present posture of petitioner is antithetical to his earlier "Petition for Relief from Order," which was denied by the trial court. In filing
said action for relief, he was admitting that the Decision of the trial court had become final and executory. Hence, he cannot claim the Decision’s
nullity.

Hence, this Petition. 5

Issues
Petitioner interposes the following issues for resolution: 6

"I Petitioner is presenting in this petition a question of law which is believed or which appears to be one of first impression, namely: Can a decision
of a Regional Trial Court which is annulled by the Court of Appeals be reinstated by the trial court which rendered the decision or any trial court for
that matter and thereafter order its execution?

"II When the decision of a trial court is annulled by the Court of Appeals for having been rendered without notice to the [petitioner] of the pre-trial
and subsequent hearing and remanded to the court of origin for further proceedings, does the jurisdiction of the trial court merely require the
presentation of evidence for the [petitioner] and without anymore requiring the presentation of [respondent’s] evidence for cross-examination by
the [petitioner]?"
The Court’s Ruling
This Petition has no merit.

First Issue: Annulled Decision

Petitioner persistently avers that no trial court can reinstate a decision that has been annulled by the CA because such a decision is "dead" in legal
contemplation.

We disagree. We doubt the veracity of petitioner’s claim that the September 11, 1987 Decision of the trial court was annulled by the CA, because
his Appeal Brief stated that it had merely been set aside. He merely alleged that" [t]he aforesaid judgment of September 11, 1987, was a judgment
by default . . . so that the Court of Appeals, on appeal by [petitioner], in its decision rendered on March 30, 1990, SET ASIDE said judgment and
ordered the case to be REMANDED to the court of origin for FURTHER PROCEEDINGS. . . . ." 7 This allegation shows that the trial court’s Decision
was reversed and set aside, not annulled, by the appellate court. Since it was merely set aside to enable petitioner to present his evidence, then
there was nothing wrong with the Order of the trial court reinstating its original decision after he had failed to take advantage of the ample
opportunity given him to present evidence.

Moreover, the failure of petitioner to attach a copy of the March 30, 1990 CA Decision, which he claims annulled the September 11, 1987 trial
court Decision, is an added reason why this Petition should be denied. True, said CA Decision is not in question here. Nonetheless, an authentic
copy thereof should have been submitted to support his claim that the Decision of the trial court had indeed been annulled by that of the CA. 8
Hence, a copy of the latter is a "material portion of the record [that] would support the petition." Failure to attach or submit it is sufficient ground
for this Petition’s dismissal. 9

We also reject the assertion of petitioner that the CA Decision of August 24, 1992 did not affirm the reinstatement of the September 11, 1987 trial
court Decision, but only sustained the denial of his Motion for Postponement. This is simply not true. The CA specifically resolved the issue of the
legality of the RTC Orders dated December 19, 1991 and March 18, 1992, which not only denied petitioner’s Motion for Postponement but also
reinstated the September 17, 1987 trial court Decision. 10 The appellate court ruled that respondent judge showed no arbitrariness or
capriciousness that would warrant the grant of that Petition. 11 Hence, there was no need for the CA to explicitly reinstate the September 11, 1987
trial court Decision. Indeed, petitioner cannot be allowed to prevent that RTC Decision from attaining finality by engaging in useless hairsplitting
distinctions. On this dilatory practice, the CA clearly and congently ruled:chanrob1es virtua1 1aw 1ibrary

‘. . . . The [Petitioner] raised the same issue in his Petition for Certiorari in CA-GR No. 27814 (SP) filed with this Court where he assailed the validity
of the Order of the Court a quo, dated March 18, 1992, ordering the reinstatement of the Decision of the Court a quo, dated September 17, 1987,
and this Court dismissed [petitioner’s] Petition for lack of merit, and, [i]n effe[c]t, affirmed the aforesaid Order of the Court a quo. The [petitioner]
filed a "Petition to Review" with the Supreme Court, from said Decision of this Court and the Supreme Court dismissed [petitioner’s] Petition.
Appellant’s penchant [for] resurrecting the same issue in the Court a quo . . ., in the present recourse, deserves the severest condemnation as it
was designed solely to further derail the execution of the Decision of the Court a quo. . . ." 12

Second Issue: Final and Executory Judgment

Petitioner condemns the unfairness of the trial court when it ruled that he had waived his right to submit evidence, when it should have merely
ordered plaintiff to present its evidence first. He interprets the CA remand to mean that both parties, subject to cross examination, would again
present their respective sets of evidence.

We disagree. The CA remanded the case to the court of origin for further hearing, not for retrial. A motion for new trial under Rule 37 of the Rules
of Court, is a remedy separate and distinct from an appeal. Plaintiff (herein respondent) had rested its case long before the September 11, 1987
Decision was rendered. In fact, the evidence adduced by herein respondent became the sole basis of the Default Judgment of September 11, 1987.

Finally, the Court holds that the September 11, 1987 Decision of the trial court become final and executory on June 28, 1993. 13 A Writ of
Execution of the March 16, 1995 Order of the trial court reinstating the September 17, 1987 Decision was issued by the trial court on May 11, 1995.
Once a judgment becomes final and executory, the prevailing party can have it executed as a matter of right, and the issuance of a Writ of
Execution becomes a ministerial duty of the court. 14 It is axiomatic that once a decision attains finality, it becomes the law of the case regardless
of any claim that it is erroneous. 15 Having been rendered by a court of competent jurisdiction acting within its authority, the judgment may no
longer be altered even at the risk of occasional legal infirmities or errors it may contain. 16

33
The February 24, 1993 Resolution of this Court in GR No. 108354 barred not only a rehash of the same issues resolved in the Petition, but also any
other issues that might have been raised therein. An existing final judgment or decree — rendered upon the merits, without fraud or collusion, by a
court of competent jurisdiction acting upon a matter within its authority — is conclusive of the rights of the parties and their privies. This ruling
holds in all other actions or suits, in the same or any other judicial tribunal of concurrent jurisdiction, touching on the points or matters in issue in
the first suit. 17

Indeed, nothing decided on in the first appeal, between the same parties and the same facts, can be reexamined in a second or subsequent appeal.
Right or wrong, the decision in the first appeal is binding on both the trial and the appellate courts for the purpose of that case and for that case
only.

Courts will simply refuse to reopen what has been decided. They will not allow the same parties or their privies to litigate anew a question, once it
has been considered and decided with finality. Litigations must end and terminate sometime and somewhere. The effective and efficient
administration of justice requires that once a judgment has become final, the prevailing party should not be deprived of the fruits of the verdict by
subsequent suits on the same issues filed by the same parties.chanrob1es virtua1 1aw 1ibrary

Courts are duty-bound to put an end to controversies. Any attempt to prolong, resurrect or juggle them should be firmly struck down. The system
of judicial review should not be misused and abused to evade the operation of final and executory judgments.

WHEREFORE, the Petition is DENIED, and the assailed Decision AFFIRMED. Double costs against petitioner.chanrob1es virtua1 1aw 1ibrary

SO ORDERED.

34
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION

G.R. Nos. 121662-64 July 6, 1999

VLASON ENTERPRISES CORPORATION, petitioner,
vs.
COURT OF APPEALS and DURAPROOF SERVICES, represented by its General Manager, Cesar Urbino Sr., respondents.

PANGANIBAN, J.:
Summons to a domestic or resident corporation should be served on officers, agents or employees, who are responsible enough to warrant the
presumption that they will transmit to the corporation notice of the filing of the action against it. Rules on the service of motions should be liberally
construed in order to promote the ends of substantial justice. A rigid application that will result in the manifest injustice should be avoided. A default
judgment against several defendants cannot affect the rights of one who was never declared in default. In any event, such judgment cannot include
award not prayed for in the complaint, even if proven ex parte.
The Case
These principles were used by this Court in resolving this Petition for Review on Certiorari before us, assailing the July 19, 1993 Decision 1 and the
August 15 Resolution 2 promulgated by the Court of Appeals. The assailed Decision disposed as follows: 3
ACCORDINGLY, in view of the foregoing disquisitions, all the three (3) consolidated petitions for certiorari are hereby GRANTED.
THE assailed Order of respondent Judge Arsenio Gonong of the Regional Trial Court of Manila, Branch 8, dated April 5, 1991, in
the first petition for certiorari (CA-G.R. SP No. 24669); the assailed Order of Judge Bernardo Pardo, Executive Judge of the Regional
Trial Court of Manila, Branch 8, dated July 6, 1992, in the second petition for certiorari (CA-G.R. SP No. 28387); and finally, the
assailed order or Resolution en banc of the respondent Court of Tax Appeals Judges Ernesto Acosta, Ramon de Veyra and Manuel
Gruba, under date of October 5, 1992, in the third petition for certiorari (CA-G.R. SP No. 29317) are all hereby NULLIFIED and SET
ASIDE thereby giving way to the entire decision dated February 18, 1991 of the respondent Regional Trial Court of Manila, Branch
8, in Civil Case No. 89-51451 which remains valid, final and executory, if not yet wholly executed.
THE writ of preliminary injunction heretofore issued by this Court on March 6, 1992 and reiterated on July 22, 1992 and this date
against the named respondents specified in the dispositive portion of the judgment of the respondent Regional Trial Court of
Manila, Branch 8 in the first petition for certiorari, which remains valid, existing and enforceable, is hereby MADE
PERMANENT without prejudice (1) to the [private respondent's] remaining unpaid obligations to the herein party-intervenor in
accordance with the Compromise Agreement or in connection with the decision of the respondent lower court in CA-G.R. SP No.
24669 and (2) to the government, in relation to the forthcoming decision of the respondent Court of Tax Appeals on the amount
of taxes, charges, assessments or obligations that are due, as totally secured and fully guaranteed payment by the [private
respondent's] bond, subject to the relevant rulings of the Department of Finance and other prevailing laws and jurisprudence.
The assailed Resolution ruled:
ACCORDINGLY, in the light of the foregoing disquisitions, as well as considering these clarifications, the three (3) motions
aforementioned are hereby DENIED.
The Facts
Poro Point Shipping Services, then acting as the local agent of Omega Sea Transport Company of Honduras & Panama, a Panamanian company,
(hereafter referred to as Omega), requested permission for its vessel M/V Star Ace, which had engine trouble, to unload its cargo and to store it at
the Philippine Ports Authority (PPA) compound in San Fernando, La Union while awaiting transshipment to Hongkong. The request was approved by
the Bureau of Customs. 4 Despite the approval, the customs personnel boarded the vessel when it docked on January 7, 1989, on suspicion that it
was the hijacked M/V Silver Med owned by Med Line Philippines Co., and that its cargo would be smuggled into the country. 5 The district customs
collector seized said vessel and its cargo pursuant to Section 2301, Tariff and Customs Code. A notice of hearing of SFLU Seizure Identification No. 3-
89 was served on its consignee, Singkong Trading Co. of Hongkong, and its shipper, Dusit International Co., Ltd. of Thailand.
While seizure proceedings were ongoing, La Union was hit by three typhoons, and the vessel ran aground and was abandoned. On June 8, 1989, its
authorized representative, Frank Cadacio, entered into a salvage agreement with private respondent to secure and repair the vessel at the agreed
consideration of $1 million and "fifty percent (50%) [of] the cargo after all expenses, cost and taxes." 6
Finding that no fraud was committed, the District Collector of Customs, Aurelio M. Quiray, lifted the warrant of seizure on July 16, 1989. 7 However,
in a Second Indorsement dated November 11, 1989, then Customs Commissioner Salvador M. Mison declined to issue a clearance for Quiray's
Decision; instead, he forfeited the vessel and its cargo in accordance with Section 2530 of the Tariff and Customs Code. 8 Accordingly, acting District
Collector of Customs John S. Sy issued a Decision decreeing the forfeiture and the sale of the cargo in favor of the government.9
To enforce its preferred salvor's lien, herein Private Respondent Duraproof Services filed with the Regional Trial Court of Manila a Petition
for Certiorari, Prohibition and Mandamus 10 assailing the actions of Commissioner Mison and District Collector Sy. Also impleaded as respondents
were PPA Representative Silverio Mangaoang and Med Line Philippines, Inc.
On January 10, 1989, private respondent amended its Petition 11 to include former District Collector Quiray; PPA Port Manager Adolfo Ll. Amor Jr;
Petitioner Vlason Enterprises as represented by its president, Vicente Angliongto; Singkong Trading Company as represented by Atty. Eddie
Tamondong; Banco Du Brasil; Dusit International Co., Inc.; Thai-Nan Enterprises Ltd. and Thai-United Trading Co., Ltd. 12 In both Petitions, private
respondent plainly failed to include any allegation pertaining to petitioner, or any prayer for relief against it.1âwphi1.nêt
Summonses for the amended Petition were served on Atty. Joseph Capuyan for Med Line Philippines: Angliongto (through his secretary, Betty
Bebero), Atty. Tamondong and Commissioner Mison. 13 Upon motion of the private respondent, the trial court allowed summons by publication to
be served upon the alien defendants who were not residents and had no direct representatives in the country. 14
On January 29, 1990, private respondent moved to declare respondents in default, but the trial court denied the motion in its February 23, 1990
Order, 15 because Mangaoang and Amor had jointly filed a Motion to Dismiss, while Mison and Med Line had moved separately for an extension to
file a similar motion. 16 Later it rendered an Order dated July 2, 1990, giving due course to the motions to dismiss filed by Mangaoang and Amor on

35
the ground of litis pendentia, and by the commissioner and district collector of customs on the ground of lack of jurisdiction. 17 In another Order, the
trial court dismissed the action against Med Line Philippines on the ground of litis pendentia. 18
On two other occasions, private respondent again moved to declare the following in default: petitioner, Quiray, Sy and Mison on March 26,
1990; 19 and Banco Du Brazil, Dusit International Co., Inc., Thai-Nan Enterprises Ltd. and Thai-United Trading Co., Ltd. on August 24, 1990. 20 There is
no record, however, that the trial court acted upon the motions. On September 18, 1990, petitioner filed another Motion for leave to amend the
petition, 21 alleging that its counsel failed to include the following "necessary and/or indispensable parties": Omega represented by Cadacio; and M/V
Star Ace represented by Capt. Nahon Rada, relief captain. Aside from impleading these additional respondents, private respondent also alleged in
the Second (actually, third) Amended
Petition 22 that the owners of the vessel intended to transfer and alienate their rights and interests over the vessel and its cargo, to the detriment of
the private respondent.
The trial court granted leave to private respondent to amend its Petition, but only to exclude the customs commissioner and the district
collector. 23 Instead, private respondent filed the "Second Amended Petition with Supplemental Petition" against Singkong Trading Company; and
Omega and M/V Star Ace, 24 to which Cadacio and Rada filed a Joint Answer. 25
Declared in default in an Order issued by the trial court on January 23, 1991, were the following: Singkong Trading Co., Commissioner Mison, M/V
Star Ace and Omega. 26 Private respondent filed, and the trial court granted, an ex parte Motion to present evidence against the defaulting
respondents. 27 Only private respondent, Atty. Tamondong, Commissioner Mison, Omega and M/V Star Ace appeared in the next pretrial hearing;
thus, the trial court declared the other respondents in default and allowed private respondent to present evidence against them. 28 Cesar Urbino,
general manager of private respondent, testified and adduced evidence against the other respondents, including herein petitioner. As regards
petitioner, he declared: "Vlason Enterprises represented by Atty. Sy and Vicente Angliongto thru constant intimidation and harassment of utilizing
the PPA Management of San Fernando, La Union . . . further delayed, and [private respondent] incurred heavy overhead expenses due to direct and
incidental expenses . . . causing irreparable damages of about P3,000,000 worth of ship tackles, rigs, and appurtenances including radar antennas
and apparatuses, which were taken surreptitiously by persons working for Vlason Enterprises or its agents[.] 29
On December 29, 1990, private respondent and Rada, representing Omega, entered into a Memorandum of Agreement stipulating that Rada would
write and notify Omega regarding the demand for salvage fees of private respondent; and that if Rada did not receive any instruction from his
principal, he would assign the vessel in favor of the salvor. 30
On February 18, 1991, the trial court disposed as follows:
WHEREFORE, IN VIEW OF THE FOREGOING, based on the allegations, prayer and evidence adduced, both testimonial and
documentary, the Court is convinced, that, indeed, defendants/respondents are liable to [private respondent] in the amount as
prayed for in the petition for which it renders judgment as follows:
1. Respondent M/V Star Ace, represented by Capt. Nahum Rada, [r]elief [c]aptain of the vessel and Omega Sea Transport
Company, Inc., represented by Frank Cadacio[,] is ordered to refrain from alienating or transferring the vessel M/V Star Ace to
any third parties;
2. Singkong Trading Company to pay the following:
a. Taxes due the government;
b. Salvage fees on the vessel in the amount of $1,000,000.00 based on . . . Form of Salvage Agreement;
c. Preservation, securing and guarding fees on the vessel in the amount of $225,000.00;
d. Maintenance fees in the amount P2,685,000.00;
e. Salaries of the crew from August 16, 1989 to December 1989 in the amount of $43,000.00 and unpaid
salaries from January 1990 up to the present.
f. Attorney's fees in the amount of P656,000.00;
3. [Vlason] Enterprises to pay [private respondent] in the amount of P3,000,000.00 for damages;
4. Banco [Du] Brazil to pay [private respondent] in the amount of $300,000.00 in damages; and finally,
5. Costs of [s]uit.
Subsequently, upon the motion of Omega, Singkong Trading Co. and private respondent, the trial court approved a Compromise Agreement 31 among
the movants, reducing by 20 percent the amounts adjudged. For their part, respondents-movants agreed not to appeal the Decision. 32 On March 8,
1991, private respondent moved for the execution of judgment, claiming that the trial court Decision had already become final and executory. 33 The
Motion was granted 34 and a Writ of Execution was issued. 35 To satisfy the Decision, Sheriffs Jorge Victorino, Amado Sevilla and Dionisio Camañgon
were deputized on March 13, 1991 to levy and to sell on execution the defendant's vessel and personal property.
On March 14, 1991, petitioner filed, by special appearance, a Motion for Reconsideration on the grounds that it was allegedly not impleaded as a
defendant, served summons or declared in default; that private respondent was not authorized to present evidence against it in default; that the
judgment in default was fatally defective, because private respondent had not paid filing fees for the award; and that private respondent had not
prayed for such award. 36 Private respondent opposed the Motion, arguing that it was a mere scrap of paper due to its defective notice of hearing.
On March 18, 1991, the Bureau of Customs also filed an ex parte Motion to recall the execution, and to quash the notice of levy and the sale on
execution. 37 Despite this Motion, the auction sale was conducted on March 21, 1991 by Sheriff Camañgon, with private respondent submitting the
winning
bid. 38 The trial court ordered the deputy sheriffs to cease and desist from implementing the Writ of Execution and from levying on the personal
property of the defendants. 39 Nevertheless, Sheriff Camañgon issued the corresponding Certificate of Sale on March 27, 1991. 40
On April 12, 1991, 41 private respondent filed with the Court of Appeals (CA) a Petition for Certiorari and Prohibition to nullify the cease and desist
orders of the trial court. 42 Respondent Court issued on April 26, 1991 a Resolution which reads: 43
MEANWHILE, in order to preserve the status quo and so as not to render the present petition moot and academic, a TEMPORARY
RESTRAINING ORDER is hereby ISSUED enjoining the respondent Judge, the Honorable Arsenio M. Gonong, from enforcing and/or
implementing the Orders dated 22 March 1991 and 5 April 1991 which ordered respondent Sheriff to cease and desist from
implementing the writ of execution and the return thereof, the quashing of the levy . . . on [the] execution [and sale] of the
properties levied upon and sold at public auction by the Sheriff, for reason of grave abuse of discretion and in excess of
jurisdiction, until further orders from this Court.

36
 WITHIN ten (10) days from notice hereof, respondents [petitioner included] are also required to SHOW CAUSE why the prayer
for a writ of preliminary injunction should not be granted.
On May 8, 1991, petitioner received from Camañgon a notice to pay private respondent P3 million to satisfy the trial court Decision. Not having any
knowledge of the CA case to which it was not impleaded, petitioner filed with the trial court a Motion to Dismiss ex abutandi ad cautelam on the
grounds that (1) the Petition of private respondent stated no cause of action against it, (2) the trial court had no jurisdiction over the case, and (3) litis
pendentia barred the suit.44
On May 10, 1991, Camañgon levied on petitioner's properties, which were scheduled for auction later on May 16, 1991. Specific descriptions of the
properties are as follows: 45
a) Motor Tugboat — "DEN DEN" ex Emerson-l.
Length: 35.67 ms. Breadth: 7.33 ms.
Depth: 3.15 ms Gross Tons: 205.71
Net tons: 67.48 ms Official Number: 213551
Material: Steel Class license: CWL
License No. 4424
b) Barge — "FC99" ex YD-153
Length: 34.15 ms. Breadth: 15.85 m.s.
Depth: 2.77 m.s. Gross Tons: 491.70
Net Tons: 491.70 Official Number: 227236
Material: Steel Class License: CWL
License No. 83-0012
c) Barge — "LAWIN" ex "Sea Lion 2".
Length: 66.92 ms. Breadth: 11.28 ms.
Depth: 4.52 m.s. Gross Tons: 1,029.56
Net Tons: 1,027/43 Official Number: 708069
Material: Steel Class License: Coastwise
License No. 81-0059
Petitioner also filed a special appearance before the CA. It prayed for the lifting of the levy on its properties or, alternatively, for a temporary
restraining order against their auction until its Motion for Reconsideration was resolved by the trial court. 46
Acting on petitioner's Motion for Reconsideration, the trial court reversed its Decision of February 18, 1991, holding in its May 22, 1991 Resolution
as follows: 47
. . . [T]hat . . . Motion for Reconsideration [of petitioner] was filed on March 14, 1991 (see: page 584, records, Vol. 2) indubitably
showing that it was seasonably filed within the 15-day time-frame. Therefore, . . . said default-judgment ha[d] not yet become
final and executory when the Writ of Execution was issued on March 13, 1991 . . . The rules [provide] that [the e]xecution shall
issue as a matter of right upon the expiration of the period of appeal from a judgment if no appeal has been duly perfected (Sec.
1, R-39, RRC). That being the case, VEC has all the right to file as it
did . . . the aforementioned reconsideration motion calling [the] attention of the Court and pointing therein its supposed error
and its correction if, indeed, any [error was] committed. It is in this light that this Court made an in-depth reflection and
assessment of the premises or reasons raised by [petitioner], and after a re-examination of the facts and evidence spread on the
records, it has come to the considered conclusion that the questioned default-judgment has been improvidently issued. By the
records, the claim of [private respondent] that his January 29, 1990 Ex-Parte Motion To Declare Defendants In Default (pp. 174-
177, records, Vol. 1) including VEC had been granted is belied by the February 23, 1990 Order (pp. 214-215, records, ibid) par. 2,
thereof, reading to wit:
By the foregoing, for reasons stated thereunder respectively, this Court, in the exercise of its judicious
discretion, in the sense that the rules should be liberally construed in order to promote their object and to
assist the parties, resolves to DENY petitioner's Motion to have the Commissioner of Customs AND OTHER
ENUMERATED RESPONDENTS DECLARED IN DEFAULT. [Emphasis ours].
Not even [private respondent's] November 23, 1990 "Ex-Parte Motion To Present [Evidence] Against Defaulting Defendants"
(page 489, records, Vol. 2) [can] be deemed as a remedy of the fact that there never was issued an order of default against
respondents including [petitioner] VEC. Having thus established that there [had] been no order of default against VEC as
contemplated by Sec. 1, Rule 18, in relation to Sec. 9, Rule 13, Revised Rules of Court, there could not have been any valid default-
judgment rendered against it. The issuance of an order of default is a condition sine qua non in order [that] a judgment by default
be clothed with validity. Further, records show that this Court never had authorized [private respondent] to adduce evidence ex-
parte against [petitioner] VEC. In sum, the February 18, 1991 decision by default is null and void as against [petitioner] VEC. With
this considered conclusion of nullity of said default judgment in question, this Court feels there is no more need for it to resolve
Arguments I-A & I-B, as well as III-A & III-B, of the March 14, 1991 Motion for Reconsideration. The Court agrees, however, with
said discussions on the non-compliance [with] Sec. 2, Rule 7 (Title of Complaint) and Sec. I, Rule 8 on the requirement of indicating
in the complaint the ultimate facts on which the party pleading relies for his claim of defense [--] which is absent in the January
9, Amended Petition (pp. 122-141, records, Vol. I) [--] for it merely mentioned [petitioner] VEC in par. 5 thereof and no more. It
abides, likewise, with [Argument] III-B that the Decision in suit award[ed] amounts never asked for in instant petition as regards
VEC (Sec. 5, Rule 18, RRC). . . . .
WHEREFORE, in view of the foregoing consideration, and as prayed for, the February 18, 1991 Judgment by Default is hereby
reconsidered and SET ASIDE.

37
On June 26, 1992, then Executive Judge Bernardo P. Pardo 48 of the Regional Trial Court of Manila issued an Order 49 annulling the Sheriff's
Report/Return dated April 1, 1991, and all proceedings taken by Camañgon.
The CA granted private respondent's Motion to file a Supplemental Petition impleading petitioner in CA-GR 24669. 50 In view of the rampant pilferage
of the cargo deposited at the PPA compound, private respondent obtained from the appellate court a Writ of Preliminary Injunction dated March 6,
1992. The Writ: reads: 51
ACCORDINGLY, in view of the foregoing disquisitions, the urgent verified motion for preliminary injunction dated February 11,
1992 is hereby GRANTED. Therefore, let a writ of preliminary injunction forthwith issue against the respondents and all persons
or agents acting in their behalf, enjoining them not to interfere in the transferring of the aforementioned vessel and its cargoes,
or in removing said cargoes . . . from [the] PPA compound.
On September 15, 1992, Sheriff Amado Sevilla seized petitioner's motor tugboat Den Den by virtue of the Order 52 dated April 3, 1992, issued by the
RTC of Manila, Branch 26. 53
On August 6, 1992, the CA consolidated CA-GR SP No. 28387 54 with CA-GR SP No. 24669. 55 The Court of Tax Appeals issued on October 5, 1992, a
Resolution in CTA Case Nos. 4492, 4494 and 4500, which disposed as follows:
Confirming the order in open court on October 5, 1992, the Court hereby RESOLVES to:
1. Order Respondent Commissioner of Customs to assign or detail [a] sufficient number of customs police and guards aboard,
and around the vicinity of, the vessel "M/V Star Ace" now in anchor at Mariveles, Bataan or elsewhere, in order to ensure its
safety during the pendency of these cases;
2. Direct him to assign personnel and/or representatives to conduct an inventory of part of the vessel's cargo now in the
possession of Mr. Cesar S. Urbino, Sr. at 197 Heroes del "96 Street, Caloocan City, which inventory may be participated in by all
the parties interested in said cargo."
To enjoin the CTA from enforcing said Order, private respondent filed before the Court of Appeals another Petition for Certiorari, 56 which was later
also consolidated with CA-GR SP No. 24669.
On July 19, 1993, the CA rendered the assailed Decision. Petitioner filed (1) a Motion for Clarification, praying for a declaration that the trial court
Decision against it was not valid; and (2) a partial Motion for Reconsideration, seeking to set aside the assailed Decision insofar as the latter affected
it.
On July 5, 1995, the Court of Appeals issued the following Resolution: 57
Pending resolution of the motions for reconsideration, filed by Vlason Enterprises Corporation and Banco [Du] Brazil, and
considering [private respondent's] Motion for Entry of Judgment with respect to respondent PPA having already been granted by
this Court as far back as June 17, 1994, pursuant to the resolution of the Supreme Court dated December 8, 1993 in G.R. No.
111270-72 (Philippine Ports Authority vs. Court of Appeals, et al.) informing the parties in the said case that the judgment sought
to be reviewed has now become final and executory, the lower court may now take appropriate action on the urgent ex-
parte motion for issuance a writ of execution, filed by [private respondent] on July 15, 1994.
On August 28, 1995, the Regional Trial Court of Manila, Branch 26, issued a Writ of Possession which resulted in private respondent taking possession
of petitioner's barge Lawin (formerly Sea Lion 2) on September 1, 1995. 58
Hence, this Petition. 59
Ruling of the Respondent Court
As already adverted to, Respondent Court granted the Petition for Certiorari of the private respondent, which was consolidated with the latter's two
other Petitions. The court a quo issued the following rulings:
1. The trial court had jurisdiction over the salvor's claim or admiralty case pursuant to Batas Pambansa Bilang
129.
2. Since the Decision of the trial court became final and executory, never having been disputed or appealed
to a higher court, the trial judge committed grave abuse of discretion in recalling the Writ of Execution and in
quashing the levy and the execution of the sale of M/V Star Ace and its cargo.
2. Such acts constituted an alteration or a modification of a final and executory judgment and could never be
justified under law and jurisprudence.
3. Civil Case 59-51451 dealt only with the salvor's claim without passing upon the legality or the validity of
the undared Decision of the Commissioner of Customs in the seizure proceeding.
4. Petitioner and his co-respondents could not invoke the jurisdiction of a court to secure affirmative relief
against their opponent and, after failing to obtain such relief, question the court's jurisdiction.
5. Petitioner had no recourse through any of the following judicially accepted means to question the final
judgment:
a. a petition for relief from judgment under Rule 38,
b. a direct action to annul and enjoin the enforcement of the questioned judgment, and
c. a collateral attack against the questioned judgment which appears void on its face.
6. A court which has already acquired jurisdiction over a case cannot be ousted by a coequal court; the res in
this case — the vessel and its cargo— were placed under the control of the trial court ahead of the CTA.
7. The admiralty Decision had attained finality while the issue of the validity of the seizure proceedings was
still under determination.
In the assailed Resolution, Respondent Court clarified that there was no need to serve summons anew on petitioner, since it had been served
summons when the Second Amended Petition (the third) was filed; and that petitioner's Motion for Reconsideration was defective and void, because
it contained no notice of hearing addressed to the counsel of private respondent in violation of Rule 16, Section 4 of the Rules of Court.
To this second motion, [private respondent] contends that there was no need to serve summons anew to VEC when the second
amended petition was filed impleading VEC, pursuant to the ruling of the Supreme Court in Asiatic Travel Corp. vs. CA (164 SCRA

38
 623); and that finally, the decision of the court a quo o[n] February 18, 1991 became final and executory, notwithstanding the
timely filing of the motion for reconsideration of VEC for the reason that the said motion for reconsideration was defective or
void, there being no notice of hearing addressed to the counsel of petitioner. In fact, no motion such as this instant one can be
acted upon by the Court without proof of service of the notice thereof, pursuant to Rule 16, Section 4 of the Rules of Court.
xxx xxx xxx
Finally, we should never lose sight of the fact that the instant petition for certiorari is proper only to correct errors of jurisdiction
committed by the lower court, or grave abuse of discretion which is tantamount to lack of jurisdiction Where the error is not one
of jurisdiction but an error of law or of fact which is a mistake of judgment, appeal is the remedy (Salas vs. Castro. 216 SCRA 198).
Here, respondents failed to appeal. Hence, the decision dated February 18, 1991 of the lower court has long become final,
executory and unappealable. We do not and cannot therefore review the instant case as if it were on appeal and direct actions
on these motions. While the proper remedy is appeal, the action for certiorari will not be entertained. Indeed, certiorari is not a
substitute for lapsed appeal.
At any rate, the decision dated July 19, 1993 of this Court on the main petition for certiorari is not yet final (except with respect
to respondent PPA), the Bureau of Customs having filed a petition for certiorari and prohibition, under Rule 65 of the Rules of
Court, with the Supreme Court, necessitating prudence on Our part to await its final verdict. 60
Assignment of Errors
Before us, petitioner submits the following assignment of errors on the part of Respondent Court: 61
I
The Court of Appeals committed serious error in ruling that the entire decision of the trial court in Civil Case No. 89-51451 dated
18 February 1991 became final and executory because it "was never disputed or appealed".
A VEC filed a motion for reconsideration of the said decision two days before deadline, which motion was
granted by the trial court.
B The trial court correctly granted VEC's motion for reconsideration and set aside the 18 February 1991
decision . . . against VEC, for:
1. The trial court never acquired jurisdiction over the person of VEC as to enable it to
render any judgment against it:
(i) VEC was not impleaded as a respondent in Civil Case No. 89- 51451;
(ii) Summons was not served on VEC;
2. The trial court improperly rendered judgment by default against VEC;
(i) The trial court never issued an order of default against VEC;
(ii) The trial court never authorized ex-parte presentation of evidence
against VEC.
3. The Judgment by default was fatally defective because:
(i) No filing fee was paid by [private respondent) for the staggering
amount of damages awarded by the trial court.
(ii) The 18 February 1991 decision violates the Revised Rules of Court,
which prescribe that a judgment by default cannot decree a relief not
prayed for.
II
Since the 18 February 1991 Decision in Civil Case No. 89-51451 is void as against VEC, the recall of the writ of execution was valid,
as far as VEC is concerned.
The Court believes that the issues can be simplified and restated as follows:
1. Has the February 18, 1991 RTC Decision become final and executory in regard to petitioner?
2. Did the trial court acquire jurisdiction over the petitioner?
3. Was the RTC default judgment binding on petitioner?
4. Was the grant of damages against petitioner procedurally proper?
5. Was private respondent entitled to a writ of execution?
This Court's Ruling
The petition is meritorious.
First Issue: Finality of the RTC Decision
A judgment becomes "final and executory" by operation of law. Its finality becomes a fact when the reglementary period to appeal lapses, and no
appeal is perfected within such period. 62 The admiralty case filed by private respondent with the trial court involved multiple defendants. This being
the case, it necessarily follows that the period of appeal of the February 18, 1991 RTC Decision depended on the date a copy of the judgment was
received by each of the defendants. Elsewise stated, each defendant had a different period within which to appeal, depending on the date of receipt
of the Decision. 63
Omega, Singkong Trading Co. and M/V Star Ace chose to enter into a compromise agreement with private respondent. As to these defendants, the
trial court Decision had become final, and a writ of execution could be issued against them. 64 Doctrinally, a compromise agreement is immediately
final and executory. 65
Petitioner, however, is not in the same situation. Said Decision cannot be said to have attained finality as to the petitioner, which a party to the
compromise. Moreover, petitioner filed a timely Motion for Reconsideration with the trial court, thirteen days after it received the Decision or two
days before the lapse of the reglementary period to appeal. 66 Thus, as to petitioner, the trial court Decision had not attained finality.

39
Exception to the Rule
on Notice of Hearing
Respondent Court and private respondent argue that, although timely filed, petitioner's Motion for Reconsideration was a mere scrap of paper,
because (1) it did not contain a notice of hearing addressed to the current counsel of private respondent, and (2) the notice of hearing addressed to
and served on private respondent's deceased counsel was not sufficient. Admittedly, this Motion contained a notice of hearing sent to Atty. Jesus C.
Concepcion who, according to private respondent, had already died and had since been substituted by its new counsel, Atty. Domingo Desierto.
Therefore, the appellate court ruled that the said Motion did not toll the reglementary period to appeal and that the trial court Decision became
final.
This Court disagrees. Rule 15 of the Rules of Court states:
Sec. 4. Notice. — Notice of a motion shall be served by the applicant to all parties concerned, at least three (3) days before the
hearing thereof, together with a copy of the motion, and of any affidavits and other papers accompanying it. The court, however,
for good cause may hear a motion on shorter notice, specially on matters which the court may dispose of on its own motion.
Sec. 5. Contents of notice. — The notice shall be directed to the parties concerned, and shall state the time and place for the
hearing of the motion. 67
Ideally, the foregoing Rule requires the petitioner to address and to serve on the counsel of private respondent the notice of hearing of the Motion
for Reconsideration. The case at bar, however, is far from ideal. First, petitioner was not validly summoned and it did not participate in the trial of
the case in the lower court; thus, it was understandable that petitioner would not be familiar with the parties and their counsels. Second, Atty.
Desierto entered his appearance only as collaborating counsel, 68 who is normally not entitled to notices even from this Court. Third, private
respondent made no manifestation on record that Atty. Concepcion was already dead. Besides, it was Atty. Concepcion who signed the Amended
Petition, wherein petitioner was first impleaded as respondent and served a copy thereof. Naturally, petitioner's attention was focused on this
pleading, and it was within its rights to assume that the signatory to such pleading was the counsel for private respondent.
The Court has consistently held that a motion which does not meet the requirements of Sections 4 and 5 of Rule 15 of the Rules of Court is considered
a worthless piece of paper, which the clerk of court has no right to receive and the trial court has no authority to act upon. Service of a copy of a
motion containing a notice of the time and the place of hearing of that motion is a mandatory requirement, and the failure of movants to comply
with these requirements renders their motions fatally defective. 69 However, there are exceptions to the strict application of this rule. These
exceptions are as
follows: 70
. . . Liberal construction of this rule has been allowed by this Court in cases (1) where a rigid application will result in a manifest
failure or miscarriage of justice; 71 especially if a party successfully shows that the alleged defect in the questioned final and
executory judgment is not apparent on its face or from the recitals contained therein; (2) where the interest of substantial justice
will be served; 72 (3) where the resolution of the motion is addressed solely to the sound and judicious discretion of the
court; 73 and (4) where the injustice to the adverse party is not commensurate [to] the degree of his thoughtlessness in not
complying with the procedure prescribed. 74
The present case falls under the first exception. Petitioner was not informed of any cause of action or claim against it. All of a sudden, the vessels
which petitioner used in its salvaging business were levied upon and sold in execution to satisfy a supposed judgment against it. To allow this to
happen simply because of a lapse in fulfilling the notice requirement — which, as already said, was satisfactorily explained — would be a manifest
failure or miscarriage of justice.
A notice of hearing is conceptualized as an integral component of procedural due process intended to afford the adverse parties a chance to be heard
before a motion is resolved by the court. Through such notice, the adverse party is permitted time to study and answer the arguments in the motion.
Circumstances in the case at bar show that private respondent was not denied procedural due process, and that the very purpose of a notice of
hearing had been served. On the day of the hearing, Atty. Desierto did not object to the said Motion for lack of notice to him; in fact, he was furnished
in open court with a copy of the motion and was granted by the trial court thirty days to file his opposition to it. These circumstances clearly justify
a departure from the literal application of the notice of hearing rule. 75 In other cases, after the trial court learns that a motion lacks such notice, the
prompt resetting of the hearing with due notice to all the parties is held to have cured the defect. 76
Verily, the notice requirement is not a ritual to be followed blindly. Procedural due process is not based solely on a mechanistic and literal application
that renders any deviation inexorably fatal. Instead, procedural rules are liberally construed to promote their objective and to assist in obtaining a
just, speedy and inexpensive determination of any action and proceeding. 77 For the foregoing reasons, we believe that Respondent Court committed
reversible error in holding that the Motion for Reconsideration was a mere scrap of paper.
Second Issue: Jurisdiction Over Petitioner
Service of Summons
on a Corporation
The sheriff's return shows that Angliongto who was president of petitioner corporation, through his secretary Betty Bebero, was served summons
on January 18, 1990. 78 Petitioner claims that this service was defective for two reasons: (1) Bebero was an employee of Vlasons Shipping, Inc., which
was an entity separate and distinct from Petitioner Vlason Enterprises Corporation (VEC); and (2) the return pertained to the service of summons for
the amended Petition, not for the "Second Amended Petition with Supplemental Petition," the latter pleading having superseded the former.
A corporation may be served summons through its agents or officers who under the Rules are designated to accept service of process. A summons
addressed to a corporation and served on the secretary of its president binds that corporation. 79 This is based on the rationale that service must be
made on a representative so integrated with the corporation sued, that it is safe to assume that said representative had sufficient responsibility and
discretion to realize the importance of the legal papers served and to relay the same to the president or other responsible officer of the corporation
being sued. 80 The secretary of the president satisfies this criterion. This rule requires, however, that the secretary should be an employee of the
corporation sought to be summoned. Only in this manner can there be an assurance that the secretary will "bring home to the corporation [the]
notice of the filing of the action" against it.
In the present case, Bebero was the secretary of Angliongto, who was president of both VSI and petitioner, but she was an employee of VSI, not of
petitioner. The piercing of the corporate veil cannot be resorted to when serving summons. 81 Doctrinally, a corporation is a legal entity distinct and
separate from the members and stockholders who compose it. However, when the corporate fiction is used as a means of perpetrating a fraud,
evading an existing obligation, circumventing a statute, achieving or perfecting a monopoly or, in generally perpetrating a crime, the veil will be lifted
to expose the individuals composing it. None of the foregoing exceptions has been shown to exist in the present case. Quite the contrary, the piercing
of the corporate veil in this case will result in manifest injustice. This we cannot allow. Hence, the corporate fiction remains.

40
 Effect of Amendment of
Pleading on Jurisdiction
Petitioner claims that the trial court did not acquire jurisdiction over it, because the former had not been served summons anew for the Second
Amended Petition or for the Second Amended Petition with Supplemental Petition. In the records, it appears that only Atty. Tamondong, counsel for
Singkong Trading, was furnished a copy of the Second Amended Petition. 82 The corresponding sheriff's return indicates that only Omega, M/V Star
Ace and Capt. Rada were served summons and copies of said Petition. 83
We disagree. Although it is well-settled that an amended pleading supersedes the original one, which is thus deemed withdrawn and no longer
considered part of the record, it does not follow ipso facto that the service of a new summons for amended petitions or complaints is required.
Where the defendants have already appeared before the trial court by virtue of a summons on the original complaint, the amended complaint may
be served upon them without need of another summons, even if new causes of action are alleged. 84 After it is acquired, a court's jurisdiction
continues until the case is finally terminated. Conversely, when defendants have not yet appeared in court and no summons has been validly served,
new summons for the amended complaint must be served on them. 85 It is not the change of cause of action that gives rise to the need to serve
another summons for the amended complaint, but rather the acquisition of jurisdiction over the persons of the defendants. If the trial court has not
yet acquired jurisdiction over them, a new service of summons for the amended complaint is required.1âwphi1.nêt
In this case, the trial court obviously labored under the erroneous impression that petitioner had already been placed under its jurisdiction since it
had been served summons through the secretary of its president. Thus, it dispensed with the service on petitioner of new summons for the
subsequent amendments of the Petition. We have already ruled, however, that the first service of summons on petitioner was invalid. Therefore,
the trial court never acquired jurisdiction, and the said court should have required a new service of summons for the amended Petitions.
Impleading a Party in the
Title of the Complaint
Petitioner further claims that the trial court failed to acquire jurisdiction to render judgment against it because (1) the title of the three Petitions filed
by private respondent never included petitioner as a party-defendant, in violation of Rule 7; and (2) the Petitions failed to state any allegation of
ultimate facts constituting a cause of action against petitioner.
We disagree with petitioner on the first ground. The judicial attitude has always been favorable and liberal in allowing amendments to pleadings.
Pleadings shall be construed liberally so as to render substantial justice to the parties and to determine speedily and inexpensively the actual merits
of the controversy with the least regard to technicalities. 86
The inclusion of the names of all the parties in the title of a complaint is a formal requirement under Section 3, Rule 7. However, the rules of pleadings
require courts to pierce the form and go into the substance and not to be misled by a false or wrong name given to a pleading. The averments in the
complaint, not the title, controlling. Although the general rule requires the inclusion of the names of all the parties in the title of a complaint, the
non-inclusion of one or some of them is not fatal to the cause of action of a plaintiff, provided there is a statement in the body of the petition
indicating that a defendant was made a party to such action.
Private respondent claims that petitioner has always been included in the caption of all the Petitions it filed, which included Antonio Sy, field manager
of petitioner. We checked and noted that in the caption and the body of the Amended Petition and Second Amended Petition with Supplemental
Petition, Antonio Sy alleged to be representing Med Line Philippines, not petitioner. Because it was private respondent who was responsible for the
errors, the Court cannot excuse it from compliance, for such action will prejudice petitioner, who had no hand in the preparation of these pleadings.
In any event, we reiterate that, as a general rule, mere failure to include the name of a party in the title of a complaint is not fatal by itself.
Stating a Cause of Action
in the Complaint
The general rule is allegata et probata — a judgment must conform to the pleadings and the theory of the action under which the case was
tried. 87 But a court may also rule and render judgment on the basis of the evidence before it, even though the relevant pleading has not been
previously amended, so long as no surprise or prejudice to the adverse party is thereby caused. 88
In the case at bar, the liability of petitioner was based not on any allegation in the four Petitions filed with the trial court, but on the evidence
presented ex parte by the private respondent. Since the trial court had not validly acquired jurisdiction over the person of petitioner, there way for
the latter to have validly and knowingly waived its objection to the private respondent's presentation of evidence against it.
Third Issue: Judgment by Default
The trial court Decision holding petitioner liable for damages is basically a default judgment. In Section 18, judgment by default is allowed under the
following condition: 89
Sec. 1. Judgment by default.— If the defendant fails to answer within the time specified in these rules, the court shall, upon
motion of the plaintiff and proof of such failure, declare the defendant in default. Thereupon the court shall proceed to receive
the plaintiff's evidence and render judgment granting him such relief as the complaint and the facts proven may warrant. . . . .
Thus, it becomes crucial to determine whether petitioner was declared in default, and whether the reception of evidence ex parte against it was
procedurally valid.
Petitioner Was Never
Declared In Default
Petitioner insists that the trial court never declared it in default.
We agree. The trial court denied the January 29, 1990 Motion of private respondent to declare all the defendants in default, but it never acted on
the latter's subsequent Motion to declare petitioner likewise. During the pretrial on January 23, 1993, the RTC declared in default only "Atty. Eddie
Tamondong, as well as the other defendants Hon. Salvador Mison, M/V Star Ace, Omega Sea Transport Co., Inc. of Panama and Sinkong Trading Co.,
[but] despite . . . due notice to them, [they] failed to appear. 90 Even private respondent cannot pinpoint which trial court order held petitioner in
default.
More important, the trial court, in its Resolution dated May 22, 1991, admitted that it never declared petitioner in default, viz.:
. . . It is in this light that this [c]ourt made an in-depth reflection and assessment of the premises or reasons raised by [petitioner]
VEC[;] and after a re-examination of the facts and evidence spread on the records, it has come to the considered conclusion that
the questioned default-judgment has been improvidently issued. [Based on] the records, the claim of [private respondent] that

41
 [its] January 29, 1990 Ex-Parte Motion to Declare Defendants In Default (pp. 174-177, records, Vol. 1) including VEC had been
granted is belied by the February 23, 1990 Order (pp. 214-215, records, ibid.) par. 2, thereof, . . .
xxx xxx xxx
Not even petitioner's November 23, 1990 "Ex-Parte Motion To Present Evidence Against Defaulting Defendants" (page 489,
records, Vol. 2) [can] be deemed as a remedy [for] the fact that there never was issued an order of default against respondents
including [petitioner] VEC. Having thus established that there ha[d] been no order of default against VEC as contemplated by Sec.
1, Rule 18, in relation to Sec. 9, Rule 13, Revised Rules of Court, there could not have been any valid default-judgment rendered
against it. The issuance of an order [o]f default is a condition sine qua non in order [that] a judgment by default be clothed with
validity. Further, records show that this [c]ourt never had authorized [private respondent] to adduce evidence ex-parte against
[Petitioner] VEC. In sum, the February 18, 1991 decision by default is null and void as against [Petitioner] VEC. . . .
The aforementioned default judgment refers to the February 18, 1989 Decision, not to the Order finding petitioner in default as contended by private
respondent. Furthermore, it is a legal impossibility to declare a party-defendant to be in default before it was validly served summons.
Trial Court Did Not Allow
Presentation of Evidence
Ex Parte Against Petitioner
The Order of December 10, 1990, which allowed the presentation of evidence ex parte against the defaulting defendants, could not have included
petitioner, because the trial court granted private respondent's motion praying for the declaration of only the foreign defendants in default. So too,
private respondent's ex parte Motion to present evidence referred to the foreign defendants only. 91
Furthermore, the reception of evidence ex parte against a non-defaulting party is procedurally indefensible. Without a declaration that petitioner is
in default as required in Section 1, Rule 18, the trial court had no authority to order the presentation of evidence ex parte against petitioner to render
judgment against it by default. The trial judge must have thought that since it failed to summons and was in default, it effectively waived any objection
to the presentation of evidence against it. This rule, however, would have applied only if petitioner had submitted itself to the jurisdiction of the trial
court. The latter correctly declared, in the Resolution just cited, that the default judgment against the former had been improvidently rendered.
Fourth Issue: Award Not Paid and Prayed For
Additional Filing Fees as
Lien on the Judgment
Had the trial court validly acquired jurisdiction over petitioner, nonpayment of docket fees would not have prevented it from holding petitioner liable
for damages. The Court, in Manchester Development Corporation v. Court of Appeals, 92 ruled that a court acquires jurisdiction over any case only
upon the payment of the prescribed docket fee, not upon the amendment of the complaint or the payment of the docket fees based on the amount
sought in the amended pleading. This ruling, however, was modified in Sun Insurance Office, Ltd. v. Asuncion, 93 which added:
3. Where the trial court acquires jurisdiction over a claim [through] the filing of the appropriate pleading and payment of the
prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has
been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the
responsibility of the Clerk of Court or his duly authorized deputy to enforce said lien and assess and collect the additional fee.
Filing fees for damages and awards that cannot be estimated constitute liens on the awards finally granted by the trial court. Their nonpayment alone
is not a ground for the invalidation of the award.
Judgment by Default Cannot
Grant Relief Prayed For
A declaration or order of default is issued as a punishment for unnecessary delay in joining issues. In such event, defendants lose their standing in
court, they cannot expect the trial court to act upon their pleadings, and they are not entitled to notice of the proceeding until the final termination
of the
case. 94 Thus, the trial court proceeds with the reception of the plaintiff's evidence upon which a default judgment is rendered.
Section 1 of Rule 18 provides that after the defendant has been declared in default, "the court shall proceed to receive the plaintiff's evidence and
render judgment granting him such relief as the complaint and the facts proven may warrant." The reliefs that may be granted, however, are
restricted by Section 5, which provides that a judgment entered against a party in default shall not exceed the amount or be different in kind from
that prayed for.
In other words, under Section 1, a declaration of default is not an admission of the truth or the validity of the plaintiff's claims. 95 The claimant must
still prove his claim and present evidence. In this sense the law gives defaulting parties some measure of protection because plaintiffs, despite the
default of defendants, are still required to substantiate their allegations in the complaint. The judgment of default against defendants who have not
appeared or filed their answers does not imply a waiver of all their rights, except their right to be heard and to present evidence in their favor. Their
failure to answer does not imply their admission of the facts and the causes of action of the plaintiffs, because the latter are required to adduce
evidence to support their allegations.
Moreover, the trial court is not allowed by the Rules to receive evidence that tends to show a relief not sought or specified in the pleadings. 96 The
plaintiff cannot be granted an award greater than or different in kind from that specified in the complaint. 97
This case should be distinguished, however, from that of defendants, who filed an answer but were absent during trial. In that case, they can be held
liable for an amount greater than or different from that originally prayed for, provided that the award is warranted by the proven facts. This rule is
premised on the theory that the adverse party failed to object to evidence relating to an issue not raised in the pleadings.
The latter rule, however, is not applicable to the instant case. Admittedly, private respondent presented evidence that would have been sufficient to
hold petitioner liable for damages. However, it did not include in its amended Petitions any prayer for damages against petitioner. Therefore, the
trial court could not have validly held the latter liable for damages even if it were in default.
Fifth Issue: Execution of Final Judgment
Section 1 of Rule 39 provides that execution shall issue only upon a judgment that finally disposes of the action or proceeding. Such execution shall
issue as a matter of right upon the expiration of the period to appeal it, if no appeal has been duly perfected. 98

42
In the present case, however, we have already shown that the trial court's Decision has not become final and executory against petitioner. In fact,
the judgment does not even bind it. Obviously, Respondent Court committed serious reversible errors when it allowed the execution of the said
judgment against petitioner.
WHEREFORE, the appeal is hereby GRANTED, and the assailed Decision and Resolution of the Court of Appeals are REVERSED and SET ASIDE insofar
as they affect petitioner. The levy and the sale on execution of petitioner's properties are declared NULL and VOID. Said properties are ordered
RESTORED to petitioner. No pronouncement as to costs.

43
 THIRD DIVISION

[G.R. No. 129442. March 10, 1999.]

FEDERICO PALLADA, PACIFICO PALLADA, LOURDES PALLADA and CONSOLACION PALLADA DELGADO, assisted by her husband, RIZAL DELGADO,
PURIFICACION PALLADA, LOVELLA DELA CRUZ, DIOCESS PALLADA, NORBERTO PALLADA, and DELFA PALLADA, Petitioners, v. REGIONAL TRIAL
COURT OF KALIBO, AKLAN, BRANCH 1, SHERIFF OF THE PROVINCE OF AKLAN OR ANY OF HIS DEPUTIES, SPOUSES MELDA MERCEDITO NATAL and
CRESENCIO NATAL, SPOUSES EDITHA MERCEDITA SONGCANG, SPOUSES ELMA MERECEDIO SAPINIT and ERNESTO SAPINIT, SPOUSES WENINA
MERECEDIO LIM and CONSEI LIM, SPOUSES CELMENCIA MATIONG SAN MIGUEL and APOLINARIO SAN MIGUEL, SPOUSES MERCEDES MATIONG
TOLENTINO and ENRIQUITO TOLENTINO, SPOUSES GLORIA PASTOR and HELDERICO PASTOR, RENEE MERECEDIO, FIDELINO MERECEDIO,
RUSTICO MATIONG, SALVADOR MATIONG, JR., and ARTURO MATIONG, Respondents.

DECISION
PURISIMA, J.:

At bar is a Petition for Certiorari, Prohibition and Injunction assailing the validity, and seeking non-implementation of the Writ of Execution issued
on May 2, 1997 in Civil Case No. 2519 before Branch 1 of the Regional Trial Court in Kalibo, Aklan.

The facts that matter are as follows:chanrob1es virtual 1aw library

On September 29, 1976, private respondents commenced Civil Case No. 2519 for recovery of possession and ownership of land with damages
before Branch 1 of the Regional Trial Court in Kalibo, Aklan ("RTC-Aklan").

On January 31, 1991, RTC-Aklan declared the defendants, petitioners herein, as the absolute and lawful owners and possessors of subject land;
disposing, thus:jgc:chanrobles.com.ph

"WHEREFORE, judgment is hereby rendered declaring defendants the absolute and lawful owners and possessors of the lot in question as against
the plaintiffs.

No pronouncement as to costs.

SO ORDERED." 1

Private respondents appealed the said decision to the Court of Appeals which reversed and set aside the same; disposing as
follows:jgc:chanrobles.com.ph

"WHEREFORE, in view of all the foregoing, the appeal is GRANTED, the judgment appealed from is hereby REVERSED AND SET ASIDE and a new
decision rendered in favor of herein appellants declaring them as the possessors and lawful owners of the remaining portion of the unsold land
(1,0391 hectares more or less) covered by Tax Declaration No. 10336 (Exh "G").chanrobles.com:cralaw:red

Defendants-appellees are hereby ordered to restore possession of said land to plaintiffs-appellants herein.

Defendants-appellees are likewise ordered to pay jointly and severally plaintiffs-appellants the value of the produce of the land, the same to be
computed from 1976, at the time of the filing of the complaint until fully paid.

Costs is charged against defendants-appellees.

SO ORDERED." 2

Petitioners’ Motion for Reconsideration was to no avail. It was denied in the Resolution 3 dated July 18, 1996 of the Court of Appeals.

Undaunted, petitioners found their way to this court via the Petition for Review on Certiorari under consideration, docketed as G.R. No. 126112.
But the same was denied in the Resolution 4 of November 18, 1996, which disposition became final and executory 5 on January 22, 1997.

On May 13, 1997, the private respondents filed an Ex Parte Motion for Execution 6 with RTC-Aklan, which granted the said motion.

The respondent court then issued the Writ of Execution 7 dated May 2, 1997 (private respondents claim that the same is erroneous as its date
should have been June 2, 1997) directing the Sheriff of the Province of Aklan or any of his deputies to implement subject Decision,
thus:jgc:chanrobles.com.ph

"NOW, THEREFORE, upon payment of your lawful fees, you are hereby ordered to enforce, implement and/or execute the aforesaid decision of the
Court of Appeals promulgated on March 29, 1996, which REVERSED and SET ASIDE the decision appealed from and a new decision rendered in
favor of herein plaintiffs-appellants having been DISMISSED by the Supreme Court in its Resolution dated November 18, 1996.chanrobles.com.ph :
virtual law library

You are further commanded to collect from the defendants jointly and severally, the value of the produce of the land, the same to be computed
from 1976, at the time of the filing of the complaint until fully paid, and tender the same to the plaintiffs.

In case you fail to collect the amount in cash, then you may levy upon the chattels and other personal properties of the defendants. But if sufficient
personal properties cannot be found to satisfy this execution, and your lawful fees thereon, then you are commanded that of the lands and
buildings of said defendants, you make the said sum of money in the manner required by law and the Rules of Court and return this writ unto this
Court within SIXTY (60) days from receipt with your corresponding report of the proceedings undertaken thereon."cralaw virtua1aw library

Execution was partially satisfied, as shown in the Officer’s Return of Service 8 of June 20, 1997.

With the issuance of the Writ of Execution under attack, petitioners have come to this Court for relief, theorizing that:chanrob1es virtual 1aw
library

44
I
PETITIONERS ARE NOT BOUND BY THE NEGLIGENCE OF THEIR COUNSEL WHO LEFT THE COUNTRY WITHOUT INFORMING THEM THEREOF, NOR
BRIEFING THEM OF THE STATUS OF THEIR CASE.
II
THE WRIT OF EXECUTION IS INVALID FOR PRIVATE RESPONDENTS’ EX-PARTE MOTION FOR EXECUTION WAS GRANTED WITHOUT NOTICE TO
PETITIONERS.
III
THE PETITIONERS’ CASE IS MERITORIOUS.chanrobles virtual lawlibrary
On the first issue, petitioners maintain that before their petition for review on certiorari, docketed as G.R. No. 126112, was resolved by this Court,
their lawyer went abroad without informing them and without briefing them on the status of the petition. According to petitioners, it was only on
June 16, 1997 that they learned that their petition was dismissed. It is therefore petitioners’ stance that they lost the said case before this Court
due to the negligence of their lawyer which should not bind them.

Petitioners’ contention is untenable. The negligence of counsel binds the client 9 just as the latter is bound by the mistakes of his lawyer 10 .
Besides, petitioners are not entirely blameless for the dismissal of their petition. It was their duty as litigants to keep in constant touch with their
counsel so as to be posted on the status of their case. As held in Ramones v. National Labor Relations Commission 11 ," [a] prudent man would
have taken steps to ensure that, if and when his counsel would leave for abroad . . ., any case that his counsel is handling would be handled by a
collaborating counsel or by a new counsel."cralaw virtua1aw library

Here, petitioners have no proof other than their bare allegation, that they were unaware of the departure of their lawyer for abroad.

Even assuming arguendo that petitioners’ counsel was negligent, their Petition in G.R. No. 126112 would fail just the same, for as held by the Court
in its Resolution of November 18, 1996, the Court of Appeals committed no reversible error in its questioned judgment:jgc:chanrobles.com.ph

"At any rate, even if the said requirement were complied with and the petition were filed on time, the same would nevertheless be dismissed for
failure to sufficiently show that the Court of Appeals had committed any reversible error in the questioned judgment." 12

Anent the second error, there is tenability in petitioners’ contention that the Writ of Execution was irregularly issued insofar as the Ex-Parte Motion
for Execution of private respondents did not contain a notice of hearing to petitioners. Sections 4 and 5 of Rule 15 of the Revised Rules of Court,
read:chanroblesvirtual|awlibrary

"SECTION 4. Notice. — Notice of a motion shall be served by the applicant to all parties concerned, at least three (3) days before the hearing
thereof, together with a copy of the motion, and of any affidavit and other papers accompanying it. The court, however, for good cause may hear a
motion on shorter notice, specially on matters which the court may dispose of on its own motion."cralaw virtua1aw library

"SECTION 5. Contents of notice. — The notice shall be directed to the parties concerned, and shall state the time and place for the hearing of the
motion."cralaw virtua1aw library

The foregoing requirements — that the notice shall be directed to the parties concerned, and shall state the time and place for the hearing of the
motion — are mandatory, and if not religiously complied with, the motion becomes pro forma 13 . A motion that does not comply with the
requirements of Sections 4 and 5 of Rule 15 of the Rules of Court is a worthless piece of paper which the clerk of court has no right to receive and
which the court has no authority to act upon 14

Under Supreme Court Circular No. 24-94, a Motion for the Issuance of a Writ of Execution must contain a notice to the adverse party —

"Execution shall issue as a matter of right, on motion, upon a judgment or order that disposes of the action or proceeding upon the expiration of
the period to appeal therefrom if no appeal has been duly perfected.

If the appeal has been duly perfected and finally resolved, such execution may forthwith be applied for in the lower court from which the action
originated, on motion of the judgment obligee, submitting therewith certified true copies of the judgment or judgments or the final order or orders
sought to be enforced and of the entry thereof, with notice to the adverse party.

The appellate court may, on motion in the same case, when the interest of justice so requires, direct the court of origin to issue the writ of
execution." (Emphasis supplied)chanroblesvirtualawlibrary

It bears stressing that a similar provision is found in Section 1 of Rule 39 of the 1997 Revised Rules of Court.

The Court is not prepared, however, to invalidate the Writ of Execution issued below. The petition is obviously a dilatory move on the part of
petitioners, designed to prevent the final disposition of the case. In People v. Leviste 15 , it was held that:jgc:chanrobles.com.ph

"While it is true that any motion that does not comply with the requirements of Rule 15 should not be accepted for filing and, if filed, is not entitled
to judicial cognizance, this Court has likewise held that where a rigid application of the rule will result in a manifest failure or miscarriage of justice,
technicalities may be disregarded in order to resolve the case. Litigations should, as much as possible be decided on the merits and not on
technicalities."cralaw virtua1aw library

And in Nasser v. Court of Appeals, Et. Al.: 16

"Litigation must at some time be terminated, even at the risk of occasional errors, for public policy dictates that once a judgment becomes final,
executory and unappealable, the prevailing party should not be denied the fruits of his victory by some subterfuge devised by the losing party. . . “

The Court need not rule on the third issue, the same having been resolved with finality in G.R. No. 126112. "A decision that has become final and
executory can no longer be disturbed."

WHEREFORE, the petition is hereby DISMISSED, for want of merit. Costs against the petitioners.
SO ORDERED.

45
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-25771 March 29, 1982
URBANO JACA and BONIFACIO JACA, petitioners,
vs.
DAVAO LUMBER COMPANY and HONORABLE MANASES REYES, as Judge of the Court of First Instance of Davao, respondents.

FERNANDEZ, J.:
This is a petition for certiorari with a prayer for a writ of preliminary injunction filed by Urbano Jaca and Bonifacio Jaca against the Davao Lumber
Company and Honorable Manases Reyes as Judge of the Court of First Instance of Davao seeking the following relief:
WHEREFORE, petitioners pray —
1. That a writ of Preliminary Injunction be immediately issued restraining the respondent Judge from carrying out or enforcing
the Orders (Annexes "Z" and "FF") complained of pending the hearing of the merits of the instant petition;
2. After due hearing, that this Honorable Court annuls and sets aside the complained Orders (Annexes "Z" and "FF");
Petitioners further pray for all other reliefs which are just and equitable in the premises.
Davao City, Philippines, February 5, 1966. 1
In November, 1963, Urbano Jaca and Bonifacio Jaca filed with the Court of First Instance of Davao a complaint for Accounting, Return of Price
Differentials and Damages against the Davao Lumber Company. The case was docketed as Civil Case No. 4189.
The complaint alleges that the plaintiff Urbano Jaca has been, and still is, a licensee of a logging concession located in the City of Davao, and together
with his co-plaintiff, Bonifacio Jaca, engaged in the logging business of producing timber and logs for export and/or domestic purposes; that the
defendant is a business corporation with which plaintiffs had business dealings covering the sale and/or exportation of their logs; that sometime in
1954, the herein parties-litigants entered into an agreement whereby plaintiffs may secure, by way of advances, either cash or materials, foodstuffs,
and/or equipment's from the defendant corporation; that the payment of such account was to be made either in cash and/or by plaintiff's turning
over all the logs that they produce in the aforesaid concession to the defendant, and in the latter case, the current prices, either export or domestic,
of the logs at the time of their delivery was to be considered; that while the aforesaid business relationship between the parties was subsisting,
defendant made plaintiff Urbano Jaca execute in its favor a chattel mortgage, a copy of which instrument.
However, plaintiffs were never furnished but that as far as they can recollect the primary conditions of such chattel mortgage were that plaintiffs
would turn over to defendant corporation all the logs they may produce from the aforesaid concession the same to be priced either as export or
domestic and their value to be applied by defendant to, and be credited for, the account of plaintiff's indebtedness, and further that in case of need,
plaintiffs may secure, by way of advances, either cash, foodstuffs, materials or equipment's, under an "open credit account"; that under the
aforementioned "open credit account" relationship between the plaintiffs and defendant, orders were secured by plaintiffs, by way of advances,
from the defendant, this to be paid by them with plaintiffs' production from their concession, liquidating those old accounts and keeping all accounts
current; that in pursuance to the agreement, as aforestated, plaintiff Urbano Jaca executed assignments of letters of credit in favor of the defendant,
in order that the latter may be able to use, as defendant corporation did in fact use, the said letters of credit for bank negotiations of the former in
the exportation of logs; that the plaintiffs and the defendant had this business relationship, as aforementioned, from 1954 up to sometime in August,
1963; that during this whole period of time, the plaintiffs had been faithfully delivering all their log production to the defendant for export or domestic
purposes; that before the filing of this complaint, the plaintiff made repeated demands on the defendant for a formal accounting of their business
relationship from 1954 up to August, 1963, but that the defendant failed and refused, and still fails and refuses, to effect such formal accounting,
asserting that it had no time as yet to examine into all the details of the accounting; that sometime on October 30, 1963, much to their surprise,
plaintiffs received letters of demand from the defendant in which they were requested to pay their accounts in favor of defendant, which according
to the latter had long been overdue; (Copies of such letters are hereto attached marked as Annexes "A" and "B", and made integral parts of this
complaint) that plaintiffs are no longer indebted to the defendant, and as a matter of act it is their belief that, if a formal accounting be made, there
would still appear a claim in their favor in the amount of P250,000.00 more or less, representing the price differentials of logs which they delivered
to the defendant from 1954 up to August, 1963; and that further, there was a deliberate fraud practiced by the defendant on them, especially in
defendant's under grading and/or reclassification of logs delivered to it by plaintiffs; that further, there were many errors committed in the monthly
statements submitted to the plaintiffs, arising from the fact that there were charges of cash, equipment's, materials and foodstuffs in said statements
never ordered and/or received by the plaintiffs; and still further that the proceeds of the letter of credit were not fully applied and/or credited to the
account of plaintiffs; that defendant has up to the present denied the plaintiffs the benefits of a formal accounting and inasmuch as the invoices,
receipts, vouchers, requisition slips and other pertinent papers and document of their business transactions are in the possession of defendant, it is
difficult for plaintiffs to ascertain with accuracy the ledger balance between the parties, unless a detailed examination of the matter is had; that
plaintiffs have thereby been constrained to file this case in Court in order to compel defendant to have a formal accounting between them, and that
it is the desire of plaintiffs that pending the formal hearing of this case, three commissioners, constituting accountants be judicially appointed for the
purpose of examining all the books, pertinent papers and documents and all other data in relation with their business transaction; that in order to
protect their interest and to litigate this case, the plaintiffs were compelled to secure and retain the services of attorneys, and that they have thereby
suffered damages in the sum of Twenty Thousand Pesos (P20,000.00) by way of attorney's fees. 2
In December, 1963, the Davao Lumber Company filed its Answer with Affirmative Defenses and Counterclaim. 3
In its counterclaim, the Davao Lumber Company alleged that Plaintiffs Urbano Jaca and Bonifacio Jaca are the ones indebted to the defendant in the
sum of P756,236.52 and P91,651.97, respectively; that on January 24, 1961, the plaintiff Urbano Jaca executed a chattel mortgage in favor of the
defendant to secure the payment of any and all obligations contracted by him in favor of the defendant covering several chattels valued at
P532,000.00; that said obligation of Urbano Jaca totalling P756,236.52 is overdue and unpaid despite repeated formal demands for settlement
thereof made by defendant; that the action brought by the plaintiffs is purely baseless and malicious for which the plaintiffs should be required to
pay defendant damages and attorney's fees amounting to at least P20.000.00. 4
In June, 1965, the respondent Judge rendered a decision the dispositive portion of which reads:
CONSIDERING THE FOREGOING, judgment is hereby rendered in favor of defendant and against the plaintiff, ordering that:
1. The complaint for accounting, return of price differentials and damages filed by plaintiffs Urbano Jaca and Bonifacio Jaca versus
defendant Davao Lumber Company is dismissed, as it is hereby dismissed;

46
 2. Ordering Urbano Jaca to pay defendant the amount of P756,236.52 with legal interest from the date of the filing of the
counterclaim;
3. Ordering plaintiff Bonifacio Jaca to pay defendant the amount of P91,651.00 with legal interest;
4. Ordering that the chattel mortgage executed by Urbano Jaca in favor of defendant Exhibit "3", be foreclosed as it is hereby
foreclosed;
5. Ordering plaintiffs to pay jointly and severally P20,000.00 as attorney's fees in favor of defendant.
6. With cost against plaintiffs.
SO ORDERED.
Given at Davao City, on this 11th day of June, 1965. 5
In September, 1965, the Davao Lumber Company filed a motion for execution pending appeal on the following grounds:
3. There are good reasons to authorize an order of execution pending appeal pursuant to Rule 39, Section 2 of the Rules of Court,
which provides:
SEC. 2. Execution pending appeal. — On motion of the prevailing party with notice to the adverse party the court may, in its
discretion, order execution to issue before the expiration of the. time to appeal, upon good reasons to be stated in a special
order. If a record on appeal is filed thereafter the motion and the special order shall be included therein.
(a) In this same civil case,, the court issued an Order dated November 17, 1964 directing the plaintiffs 'to deliver to the receiver
all the properties, chattels and equipment covered by the Chattel Mortgage, the delivery to be made within thirty (30) days', but
plaintiffs did not, comply with said Order of November 17, 1964.
(b) Defendant's counsel filed a 'Motion to Implement Order ordering Urbano Jaca to deliver Chattels to Receiver' dated July 28,
1965, but up this date, plaintiffs have not complied with said Order.
(c) That there are various reports from the receiver, one of them dated April 19, 1965, stating that the Receiver has not taken
custody of the mortgaged chattels due to the refusal or inability to mortgagor Urbano Jaca to deliver the same to him.
(d) Despite the long lapse of time from the Order of November 17, 1964, the court in its Order of September 1, 1965, directed
said mortgagor Urbano Jaca to comply forthwith with the Order dated November 17, 1964 'fifteen (15) days upon receipt of this
Order', but up to this date there has been consistent refusal or failure to comply with said order of delivery.
(2) Another good reason for execution pending appeal (Rule 39, Section 2) is the fact that plaintiff Urbano Jaca the mortgagor in
the deed of chattel mortgage dated January 24, 1961, has violated Article 319 of the Revised Penal Code, for he has sold some of
the mortgaged properties to third persons, particularly, a wrecker, to Teodoro M. Alagon of Davao City on February 12, 1962 for
P10,000.00. A copy of the letter-complaint addressed by defendant's counsel to the City Fiscal of Davao, dated February 5, 1964
is attached hereto and made an integral part of this Motion as Annex "A".
(3) Moreover, plaintiffs have not only failed to comply with the Order of the Honorable Court for the delivery of the properties
under receivership to the Receiver (par. 3 of this Motion) and in fact has violated the Chattel Mortgage contract (Par. 4 of this
Motion); but plaintiffs have no properties or assets with which to satisfy the judgment of this Honorable Court, which amounts
to principal items of P756,326.52, P91,651.00 and P20,000.00, or a total of P867,887.52.
(4) Obviously, the appeal interposed by the plaintiffs is to delay the enforcement and/or execution of the decision rendered by
this Honorable Court, so that when the Decision correctly rendered by this Honorable Court should be affirmed on appeal the
judgment will become nugatory. 6
The respondent judge granted the motion for execution pending appeal in an order dated November 29, 1965. 7
Urbano Jaca and Bonifacio Jaca filed a motion for reconsideration of the order granting execution pending appeal in December, 1965, 8 but the same
was denied in an order dated January 10, 1966. 9
Petitioners Urbano Jaca and Bonifacio Jaca contend that the respondent Judge acted in excess of jurisdiction and/or with grave abuse of discretion
in issuing the order granting execution pending appeal and the order denying the motion for reconsideration of the order granting execution pending
appeal because said orders were issued in complete disregard of the applicable provisions of the Rules of Court, the laws, and the settled decisions
of the Honorable Supreme Court.
Petitioners assail the order granting execution pending appeal and the order denying the motion for execution pending appeal on the following
grounds:
1) granting that execution pending appeal win issue in a foreclosure proceedings —
the respondent Judge acted in excess of jurisdiction when he considered, over the objection of petitioners, in the motion for
reconsideration of the Order granting premature execution (Annex "AA") the alleged sale by Florentina Perez, wife of petitioner,
Urbano Jaca of the two (2) chevrolet trucks which were not part of the mortgaged chattels to Atty. Raul Nengasca as a reason for
execution pending appeal in his Order (Annex "FF") denying the motion for reconsideration, since this matter is not among the
grounds stated in the motion for execution pending appeal (Annex "X") neither has it been brought out during the hearing of said
motion, nor is it one of the reasons stated in the Order of execution pending appeal (Annex "Z") which is the Order sought to be
reconsidered and it is a cardinal rule in pleadings that a motion should state the grounds upon which it is based (Section 3, Rule
15 of the Rules of Court) and the order sought to be obtained and that no other grounds can be entertained, passed upon and
considered by the court over the objection of the adverse party;
2) the respondent judge acted with grave abuse of discretion equivalent to lack of jurisdiction in finding that there exists special
or good reasons for execution pending appeal because discretionary execution under Section 2, Rule 39 of the Rules of Court will
only issue if there are superior circumstances demanding urgency which outweigh the injury or damage that the losing party may
suffer upon securing a reversal of the judgment on appeal considering the merits of his appeal (Moran, Com. on the Rules of
Court Vol. 2, Part II, 1963 ed., p. 239 and p. 242, citing Aguilos vs. Barrios, et al. 72 Phil. 285: Ledesma vs. Teodoro, 52 O.G. 784;
De Leon, et al. vs. Soriano, et al., L-7684, Sept. 17, 1954; City of Bacolod vs. Enriquez, 55 O.G. p. 10545), and in the instant case,
the reasons ultimately relied upon by the respondent Judge in granting execution pending appeal as stated in the Order (Annex
"FF"), denying petitioners motion for reconsideration of the Order granting execution, are not such superior circumstances
demanding urgency of execution because:

47
 (a) the first reason that petitioner Urbano Jaca sold a wrecker to Teodoro M. Alagon is alleged to have been made yet on February
12, 1962, or about over one and half years prior to the filing of the instant case on November 22, 1963, and such sale would not
show a fraudulent design on the part of petitioner Urbano Jaca to defeat the judgment against him by disposing of the mortgaged
chattels and thus would demand urgency of execution of the judgment;
(b) the second reason regarding the sale of the two chevrolet trucks (not alleged to be a part of the mortgaged chattels to the
respondent Davao Lumber Company) to Atty. Raul Nengasca does not refer to the property of either of the petitioners, neither
does it refer to a sale made by anyone of them; rather, it refers to a sale made by Florentina Perez (wife of petitioner Urbano
Jaca), who is not a party to the action, regarding her own property;
(c) the third and last reason that the orders of the court directing petitioner Urbano Jaca to deliver all the mortgaged chattels to
the receiver are valid and must be complied with could not even be considered any reason at all for immediate execution, as it
does not supply at all any element of a superior circumstance requiring urgency of execution for there is, in fact, no legal
connection whatsoever in the validity of such Orders and their compliance with the propriety of an immediate execution of the
judgment pending appeal;
furthermore, the appeal of petitioners are based on good grounds and could never be said to be intended merely for delay, and
that the amount involved in the judgment is huge;
3) That there are, in fact, good reasons for not allowing execution pending appeal considering —
(1) that the amount involved in the judgment is huge;
(2) that the petitioners have challenged the Counterclaim, under which the judgment sought to be executed is rendered, for lack
of cause of action;
(3) that the petitioners have challenged the chattel mortgage, under which the judgment of foreclosure has been rendered, as
null and void ab initio and that no cause of action can arise therefrom;
(4) that the petitioners have challenged the Commissioner's Report to be null and void which is the primary, if not in fact the sole,
evidence of said respondent on its Counterclaim and upon which the judgment sought to be executed is based;
4) no execution pending appeal, in fact, can issue on foreclosure proceedings because the ninety-day period provided in Section
2, Rule 68 of the Rules of Court is a substantive right granted to the mortgagor-debtor which may not be omitted and that upon
taking an appeal, said period is suspended and is not revived until the judgment is affirmed by the appellate court and the case
returned to the trial court, and in the instant case, the respondent judge acted in excess of jurisdiction in allowing execution
pending appeal when the Counterclaim under which the judgment sought to be executed is rendered, is for a foreclosure of
chattel mortgage and that petitioners have taken an appeal to the judgment rendered against them ...;
5) granting arguendo, that the foreclosure proceedings is only against petitioner Urbano Jaca as mortgagor, but the action against
petitioner Bonifacio Jaca is for a collection of a sum of money, the respondent Judge acted with grave abuse of discretion
equivalent to lack of jurisdiction in allowing execution pending appeal as against said petitioner Bonifacio Jaca because in so far
as said petitioner is concerned there is no showing of any special or good reasons, in fact, there is no showing of any reason at all
anywhere in the records of the case, including the Orders complained of, as a basis for which discretionary execution may be
issued against him. 10
The private respondent maintains that the respondent judge acted in full compliance with the Rules of Court, the law and applicable decisions of this
Honorable Court because:
1) The present case is an action for accounting and not a foreclosure proceeding. Therefore, execution pending appeal can be issued pursuant to Sec.
2 of Rule 39, Rules of Court. This provision of the Rules of Court applies in the present case for there are good and valid reasons for the issuance of a
writ of execution pending appeal as stated in respondents' Motion (Annex "X"). Moreover, petitioners have no properties or assets with which to
satisfy the judgment of P867,887.52 plus other items stated in the Decision. The respondent Judge, therefore, was correct in ordering the issuance
of a writ of execution (Annex "1"). Furthermore, to stay execution, petitioners should have filed a supersedeas bond in accordance with Sec. 3 of Rule
3.
a) Respondent denies the erroneous and gratuitous conclusion of alleged 'excess of jurisdiction' as alleged in par. 44(a) of the
Petition. It further denies the other misleading statements alleged therein, the truth of the matter being the grounds enumerated
in the Motion for Execution Pending Appeal (Annex "X") and the reasons mentioned in the Order (Annex "Z") granting said motion.
b) Respondent denies the erroneous conclusion that the respondent Judge acted with grave abuse of discretion, equivalent to
lack of jurisdiction' as alleged in par. 44(b) of the Petition, and states that the respondent Judge correctly acted in accordance
with Sec. 2, Rule 39 of the Rules of Court. It further denies the misleading statement therein that the reasons ultimately relied
upon by the respondent Judge are those stated in the Order (Annex "FF"), which is false, because the good and valid reasons
relied upon by the respondent Judge are those stated in his Order (Annex "Z") granting the Motion for Execution Pending Appeal
(Annex "X").
(1) Respondent admits the allegation that petitioner Urbano Jaca sold a wrecker to Teodoro M. Alagon on February 12, 1962 for
P10,000.00; and denies the statement that such sale would not show a fraudulent design on his part to defeat the judgment
against him. It further alleges that it is one of the good and valid reasons for execution pending appeal (Rule 39, Sec. 2), because
said petitioner, the mortgagor in the deed of chattel mortgage dated January 24, 1961, has violated Article 319 of the Revised
Penal Code in selling the said mortgaged property;
(2) The misleading allegations contained in subparagraphs 2 and 3 of par. 44(b) of the Petition are false, for they are matters that
arose in the petitioners' Motion for Reconsideration of the Order granting execution pending appeal. Respondent further states
that they are not the original and valid reasons given by the respondent Judge in his Order (Annex "Z");
c) There are goods reasons for allowing execution pending appeal considering that —
(1) the amount involved in the judgment in favor of respondent Davao Lumber Company is P867,887.52 plus attorney's fees of
P20,000.00, and the petitioners admitted at the hearing of the Motion for Execution Pending Appeal that they are insolvent (See
Order, Annex "Z" );
(2) the petitioners have never challenged the Counterclaim of respondent Davao Lumber Company during the hearing on the
merits;

48
 (3) the petitioners failed to present any evidence challenging the chattel mortgage under which the counterclaim for foreclosure
has been rendered;
(4) the petitioners have not disproved the Commissioner's Report (Annex "K"). In fact, they failed to present their own evidence
before the Commissioner which might tend to controvert the undisputed documentary evidence of respondent Davao Lumber
Company;
(5.) execution pending appeal was properly issued in the present case, which is an ordinary civil action for accounting and not
primarily a foreclosure of chattel mortgage the respondent Judge, therefore, acted in full compliance with the law and
jurisprudence in allowing execution pending appeal;
(6) the judgment sought to be executed pending appeal sentences petitioner Urbano Jaca to pay respondent Davao Lumber
Company the amount of P756,236.52 with legal interest; sentences petitioner Bonifacio Jaca to pay said respondent the amount
of P91,651.00 with legal interest; orders the Chattel Mortgage executed by Urbano Jaca in favor of said respondent foreclosed;
orders petitioners to pay, jointly and severally, the amount of P20,000.00 as attorney's fees and costs; the said judgment was
rendered after hearing on the merits of its action for accounting, which is not a proceeding for foreclosure of chattel mortgage;
the provisions of the Rules of Court on foreclosure proceeding invoked by petitioners do not find any application in the case at
bar; the respondent Judge, therefore, in allowing execution pending appeal, precisely acted in full compliance with Sec. 2 of Rule
39;
(7) as above pointed out, the judgment rendered in this case is joint and several, and consequently, the respondent Judge was
correct in ordering the execution thereof as against both petitioners who have no properties or assets to satisfy the judgment in
favor of respondent company. 11
The basic issue in this case is whether or not there are good reasons justifying the issuance of an order granting premature execution.
Section 2, Rule 39 of the Rules of Court provides that on motion of the prevailing party with notice to the adverse party the court may, in its discretion,
order execution to issue even before the expiration of the time to appeal, upon good reasons to be stated in a special order. If a record on appeal is
filed thereafter, the motion and the special order shall be included therein. The discretionary power of the Court of First Instance to grant or deny a
motion for execution before the expiration of the time to appeal will not be interfered with by the appellate court, unless it be shown that there has
been an abuse thereof or a subsequent change of conditions. 12
As provided in Sec. 2, Rule 39 of the New Rules of Court, the existence of good reasons is what confers discretionary power on a court of first instance
to issue a writ of execution pending appeal. 13 The reasons allowing execution must constitute superior circumstances demanding urgency which will
outweigh the injury or damage should the losing party secure a reversal of the judgment on appeal. 14
The decision in Civil Case No. 4189 requires petitioners to pay the enormous amount of P867,887.52. Clearly, premature execution of said decision
wig result in irreparable damage to petitioners as the collection of said amount may be enforced through the seizure of money and/or sale of
properties used in the logging business of petitioners. In other words, execution of the decision in Civil Case No. 4189 may result in the termination
of petitioner's business. Thus, any damage to the petitioners brought about by the premature execution of the decision will be justified only upon a
finding that the appeal is being taken only for the purpose of delay and of rendering the judgment nugatory.
The facts of record show that the petitioner's appeal is not frivolous and not intended for delay. The findings of the respondent judge that the
petitioners are indebted to the respondent Davao Lumber Company are based solely on the report submitted by Estanislao R. Lagman, the
commissioner appointed by the court. This report was assailed by the petitioners as null and void in a motion to strike out the report from the records
of the case. According to petitioners, the report is null and void because:
... the so-called 'findings of the Commissioner in his report filed before this Honorable Court is the result of the exercise of certain
highly irregular function not contemplated by the Rules of Court and therefore deprived Plaintiffs' their constitutional right to
their day in court.
ARGUMENTS:
1. That among other things, Section 3, Rule 33 of Rules of Court, provides:
Section 3: ... Subject to the specifications and limitations stated in the order the commissioner has and shall exercise the power
to regulate the proceedings in every hearing before him and to do all act and take measures necessary or proper for the efficient
performance of his duties under the order, ... The trial or hearing before him shall proceed in all respect as though the same had
been had before the Court.
2. That on August 22, 1964, without the proper notice to their respective counsels, the Plaintiffs received the following letter
from the Commissioner, pertinent portions of which reads as follows: and, copy of which letter is attached hereto, forming an
integral part in this Opposition, marked Annex "A" — In compliance to the above order, I am now to proceed, as ordered by the
Court, to examine your books of accounts and other records for the year 1962 and 1963.
I will be dropping at your office on August 25, 1964. Kindly have our records ready.
3. That on August 25, 1964, the Commissioner went to Plaintiff's' office and asked to see the Books, and if possible to bring the
same with him to his office; that, the plaintiffs' counsel refused to have said records examined in such manner;
4. That the Counsel for the Plaintiffs reminded the Commissioner on many occasions that, the examination of books and records
of Accounts should be done in a manner provided for under the Rules of Court and, that in pursuance of said mandate, a hearing
and/or proceedings be conducted in the presence of all parties, their witnesses and, their counsels and, the hearing be conducted
as if it were taken before the court of justice, as said accounts being one controversial and contested in issues;
5. That said commissioner refused to conduct said hearing in accordance to law;
6. That report is void in law. 15
In an order dated November 17, 1964, the respondent judge approved the commissioners' report in toto As to the allegation of the plaintiff that they
were denied their day in court, the respondent judge stated that "plaintiffs deliberately ignored to comply with the lawful order of the court directing
them to present the pertinent books of accounts on the 12th day of October, 1964, at 2:00 P.M. Sala of Branch 11, and therefore, their position that
they are denied their day in court is clearly untenable." 16
Petitioners filed their motion for reconsideration of the order approving the commissioner's report in November, 1964, explaining that their failure
to appear was due to the fact that they received the order requiring them to appear on October 12, 1964 already after said date when it was too late
for them to comply with the order of appearance. 17 Notwithstanding the reasonable explanation of their absence in the hearing of October 12, 1964,
the respondent judge denied the motion for reconsideration in an order dated December 4, 1964. 18

49
It is obvious that the refusal of the respondent judge to order a hearing before the commissioner was in clear violation of Section 3, Rule 33, Revised
Rules of Court, which specifically provides "... that the trial or hearing before a commissioner shall proceed in all respects as though the same had
been had before the court." For this purpose Section 5 of the same Rule provides that "upon receipt of the order of reference, unless otherwise
provided therein, the commissioner shall forthwith set a time and place for the first meeting of the parties or their attorneys to be held within ten
(10) days after the date of reference ..." Pertinent also is Section 10 of Rule 33 which provides that "... Objections to the report based upon grounds
which were available to the parties during the proceedings before the commissioner, other than objections to the findings and conclusions therein
set forth, shall not be considered by the court unless they were made before the commissioner."
The respondent judge's refusal to order the commissioner to conduct a hearing in accordance with Section 5, Rule 33 was fatal to the cause of the
petitioners. Under Section 10 of Rule 33, objections to the report based upon grounds which were available to the parties during the proceedings
before the commissioner other than objections to the findings and conclusions therein set forth shall not be considered by the court, unless they
were made before the commissioner. Objections to the report which were available to the parties during the proceedings refer to objections to the
admissibility or non-admissibility of evidence to be considered by the commissioner. Since no meeting was held before the commissioner, petitioners
never had the opportunity to object to the admissibility of evidence of cash, equipment, materials and foodstuff, which they alleged in their
complaint, were never received by them. Also, they failed to question the failure of the commissioner to include in his examination the price
quotations of the logs which, as claimed in the complaint, were under classified and undergraded.
The records show that respondent Davao Lumber Company was able to prove its claim against petitioners because respondent judge refused to
order the commissioner to hold a hearing as required by the rules. Thus, objections which petitioners may have against the claims of respondent
were never considered. In the same manner, the claim of petitioner that respondent Davao Lumber Company is indebted to them was not also
considered. The Commissioner limited his examination to the following:
MR. URBANO LACAS ACCOUNTS:
(a) From Feb. 17, 1961 to Oct. 31, 1962, Urbano Jaca purchased on account from the Merchandise Dept. of Davao Lumber Co.
per statement attached, marked schedule 1...................................................................................... P190:010.41
(b) From July 2, 1960 to Oct. 31, 1962, Urbano Jaca purchased on account from the Sawmill Dept. of Davao Lumber Co. per
statement hereto attached, marked schedule 2....................................................................................... P75,075.73
(c) Old vales or cash advances prior to July 25, 1963 which Urbano Jaca replaced with four (4) BPI Checks Nos. D-236619 to D-
236622 P50,000.00 each as alleged by DLC ........................................................................................... P200,000.00
(d) From Nov. 3, 1962 to Aug. 30, 1963, Urbano Jaca purchased on accounts from the Sawmill Dept. various goods, per attached
statement, marked Schedule 3 ................................................................................................... P57,459.27
(e) From Nov. 3, 1962 to Aug. 30, 1963, Urbano Jaca purchased from the Mds. Dept. of DLC various goods, per attached statement,
marked Scheduled 4 ................................................................................................ P68,857.07
(f) From July 25, 1963 to Sept. 16, 1963 Urbano Jaca obtained cash advances or vales per attached statement, marked schedule
5............ P164,844.45
(g) Purchase of gasoline made by Urbano Jaca from Shell Co., under Davao Lumber Co.'s guaranty
...................................................................... P2,523.60
Total amount due Davao Lumber Co. from Urbano Jaca .......... P758,770.53
The amount of P2,523.60 due Shell Co. may be deducted from the total amount if Urbano Jaca can show proof that the account
has been paid.
MR. BONIFACIO JACAS ACCOUNTS:
(a) From Nov. 3, 1962 to Aug. 8, 1963 Bonifacio Jaca purchased on account various goods from the Sawmill Dept. of DLC per
attached statement,. marked schedule 6.................................................................................................. P39,999.69
(b) From Feb. 4, 1963 to Aug. 8, 1963 Bonifacio Jaca purchased on account from the Mdse. Dept. various goods, per attached
statement marked schedule 7................................................................................................................... P48,319.08
(c) Purchases of gasoline from Shell Co. guaranteed by Davao Lumber Co.
................................................................................................................ P5,252.12.
(d) From Aug. 6, 1963 to Aug. 23, 1963, Bonifacio Jaca obtained cash advances or vales, per attached statement marked schedule
8........... P3,333.20
Total amount due Davao Lumber Co. from Mr. Bonifacio Jaca P96,904.09. 19
Clearly, the examination was only made on advances made to petitioners. There was not even an attempt to examine receipts of payments made by
petitioners. It is hard to believe that the petitioners had not paid any amount for the advances made to them. In fact, the respondents stated in
paragraph 4 of its answer to the complaint that the plaintiffs stopped delivering logs in August, 1963, 20 indicating that from 1962 to 1963, the years
included in the report of the commissioner, the petitioners had delivered logs to the Davao Lumber Company.
There is doubt that petitioners are really indebted to respondent Davao Lumber Company in such a big amount as found by the trial court. The appeal
of the petitioner appears to be meritorious. The fear of respondent that the judgment of the trial court might not be satisfied if not executed at once
is not well founded. If the judgment is executed now, and on appeal the same is reversed, although there are provisions for restitution, damages
incurred by petitioners can not be fully compensated. 21
The reasons stated in the order of execution pending appeal are not well founded.
The first reason stated in the order was the consistent refusal of petitioner to deliver the mortgaged chattels to the receiver. 22 The records disclose
that respondent Davao Lumber Company is not even entitled to the appointment of a receiver. It is an established rule that the applicant for
receivership must have an actual and existing interest in the property for which a receiver is sought to be appointed. 23 The Davao Lumber Company's
proof of interest in the property is the deed of chattel mortgage executed by Urbano Jaca in favor of the Davao Lumber Company on January 24,
1961. This deed of chattel mortgage is void because it provides that the security stated therein is for the payment of any and all obligations herein
before contracted and which may hereafter be contracted by the Mortgagor in favor of the Mortgagee. 24 In the case of Belgian Catholic Missionaries
vs. Magallanes Press this Court held:
A mortgage that contains a stipulation in regard to future advances in the credit will take effect only from the date the same are
made and not from the date of the mortgage (11 CJ, 448; 5 RCL 420-421). ... Where the statute provides that the parties to a

50
 chattel mortgage must make oath that the debt is a just debt, honestly due and owing from the mortgagor to the mortgagee, it
is obvious that a valid mortgage cannot be made to secure a debt to be thereafter contracted. (11 CJ. 448) 25
The second reason stated was the fact that petitioner Urbano Jaca violated Article 319 of the Revised Penal Code by selling to a certain Teodoro
Alagon some of the mortgaged properties. 26 As already discussed, the deed of chattel mortgage executed by Urbano Jaca in favor of the Davao
Lumber Company is void. Hence, petitioner Urbano Jaca could not have violated Article 319 of the Revised Penal Code. Moreover, the respondent
Davao Lumber Company has not successfully refuted the allegation of the petitioners that the sale of the wrecker to Teodoro Alagon was exclusively
negotiated by the lumber company's managing partner, Tian Se, and that the latter caused Urbano Jaca to sign the deed of sale because he was the
owner of the wrecker.
The third reason stated is the fact that petitioners have no properties and assets to satisfy the judgment. 27 The basis of respondent judge's conclusion
that petitioners do not have sufficient assets is an unsubstantiated allegation in the motion for execution pending appeal of respondent lumber
company. 28 To rectify this omission, respondent lumber company, in its opposition to the motion for reconsideration of the order of execution
pending appeal, tried to point out that the sale of two chevrolet trucks by Urbano Jaca and their failure to file a counterbond indicate that they are
without sufficient assets. 29 This later attempt to substantiate a baseless allegation in the motion for execution pending appeal is futile. The trucks
alleged to be sold are not properties of petitioner Urbano Jaca They are paraphernalia properties of his wife, Florentina Perez, and the same trucks
were in fact sold by her. And even if said trucks were owned by Urbano Jaca their sale to Atty. Raul Nengasca does not totally indicate insolvency. As
has been repeatedly observed, petitioner Urbano Jaca is engaged in business. Sale of property used in business does not establish insolvency. The
sale may have been prompted by the need for more modern equipment on account of obsolescence, or the need of to be directed to more profitable
endeavor. The same reason applies to their failure to file a counterbound. The cash needed for the counterbound may be utilized for the continuance
of the business or to increase business profits. In short, the acts of petitioner can not be always be interpreted as signs of insolvency but may also
indicate sound business judgment prompted by the need to have liquid reserve of cash.
In its answer to the petition, 30 respondent lumber company contends that petitioners, having availed of the remedy of appeal are barred form filling
a petition for certiorari. Although Section 1, Rule 65 of the Rules of Court provides that the special civil action of certiorari may only be invoked when
"there is no appeal, nor any plain speedy and adequate remedy in the course of law," this rule is not without exception. The availability of the ordinary
course of appeal does not constitute sufficient ground to prevent a party from making use of the extraordinary remedy of certiorari where the appeal
is not an adequate remedy or equally beneficial, speedy and sufficient. 31 It is the inadequacy — not the mere absence — of all other legal remedies
and the danger of failure of justice without the writ, that must usually determine the propriety of certiorari.
In the case at bar, the remedy of appeal is inadequate. It will not immediately relieve petitioners from the injurious effect of the order granting
execution. The slow and inexpensive remedy of appeal will not prevent respondent judge from executing his decision requiring petitioners to pay
the huge amount of P867,887.52. Moreover, to dismiss the petition on the ground that petitioner has already availed of the remedy of appeal will
only aggravate the patent injustice already inflicted on petitioners.
The reasons stated in the order granting execution pending appeal are not sufficient.
WHEREFORE, the petition for writ of certiorari is granted and the orders granting execution pending appeal dated November 29, 1965 and the order
denying the motion for reconsideration of the order granting execution pending appeal dated January 10, 1966 are nullified and set aside, without
pronouncement as to costs.
SO ORDERED.

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 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 89265 July 17, 1992

ARTURO G. EUDELA, RENATO TUAZON, FRANCISCO S. PANGILINAN and LEO GUEVARRA, petitioners,
vs.
HON. COURT OF APPEALS, HON. FILEMON H. MENDOZA, as Presiding Judge of the Regional Trial Court of Quezon City, Branch XCIV (94), NIZA
SORIANO VERGEL DE DIOS, RICHARD NG, NATIVIDAD MALLARI-NG, and SHERIFF OF QUEZON CITY, respondents.

CRUZ, J.:
The only issue before us is the validity of the order of the trial court granting the motion for execution pending appeal of its decision, which is now
before the Court of Appeals. That order has been affirmed by the respondent court. It is now faulted in this petition for certiorari under Rule 45 of
the Rules of Court. The grounds are that there is no valid justification for the order and that the resolution denying the motion for reconsideration
did not comply with the constitutional requirements.
The petition is inordinately long, consisting of 47 pages, and so is the petitioners' memorandum, which covers all of 60 pages. The reply to the private
respondents' 12-page comment is all of 38 pages. The petitioners forget that they are not arguing the merits of the case but only the order granting
execution pending appeal. Counsel should remember that they do a disservice to the administration of justice and contribute to its delay by imposing
on the time of the courts with irrelevant discussions that only clutter the record.
This case arose from two complaints filed by the private respondents against the petitioners for injunction, specific performance and damages, in
the Regional Trial Court of Quezon City. These complaints were consolidated and, after trial, decided against the petitioners on December 16, 1987.
The petitioners were found to have defrauded the private respondents and held solidarily liable to them in the amount of P450,000.00 plus 15%
interest and P30,000.00 as attorney's fees. 1
On motions for reconsideration filed by both parties, the decision was amended on February 1, 1988, to specify the respective amounts due each of
the two complainants. 2 On that same date, the petitioners filed a notice of appeal of the original decision. The private respondents received a copy
of the amended decision and six days later filed a motion for execution pending appeal. After considering the same and the opposition filed by the
petitioners, then Judge Filemon H. Mendoza 3 issued the following order:
ORDER
Acting on the plaintiffs' written offer of evidence, the court resolves to admit Exhibits "A" to "C" in support of their motion for
execution pending appeal over the defendants' objection.
In connection therewith, the Court believes that plaintiffs' motion for execution pending appeal has to be granted considering
the following material and supervening circumstances to warrant the same, to wit:
1. The case at bar had been filed way back on May 26, 1984 and only decided, after a long Court battle, on December 16, 1987
and February 1, 1988 and in view thereof, the court is uncertain whether the individual private defendants may satisfy the awards
granted in favor of the plaintiffs and thus will render this judgment a mere paper judgment, in the event the questioned Decision
is affirmed by the higher court.
2) The defendant bank is presently under receivership as they are under the state of insolvency and thus its assets might not be
sufficient to pay the plaintiffs as there are many creditors of said banking institution.
3) The fact that defendant Renato Tuazon and his family are already and in all possibility they will stay abroad permanently and
real properties are being sold.
4) The court will likewise order the plaintiffs to post a bond to answer for whatever damages the individual defendants might
suffer by virtue of the issuance of the writ should the decision in question be reversed by the higher court.
WHEREFORE, upon the filing of a bond in the amount of P100,000.00, let a writ of execution issue against the individual
defendants and after which, let the entire records of this case be forwarded to the Honorable Court of Appeals.
SO ORDERED.
This order was challenged by the petitioners on certiorari with the Court of Appeals. On April 10, 1989, the order was sustained. 4 The respondent
court held that the petition was premature because at the time of its filing the questioned order and the writ of execution had not yet been issued
by the trial court. It added that the posting of the bond was good and sufficient reason for the execution of the decision pending appeal. It also ruled
that the lower court had not lost jurisdiction to act on the motion for execution pending appeal despite the notice of appeal filed by the petitioners.
The reason was that the records had not yet been elevated to the appellate court.
In Cuento vs. Pareres, 5 this Court held that where a judgment is amended, the date of the amendment should be considered the date of the decision
in the computation of the period for perfecting the appeal.
In the present case, the notice of the amended decision was received by the private respondents on February 13, 1988, and the motion for execution
pending appeal was filed on February 19, 1988, or six days thereafter. Under the present procedure for appeal, it suffices that the notice of appeal is
made before the expiration of the 15-day reglementary period. An appeal bond is no longer necessary, and neither is the filing of a record on appeal,
except in case of multiple appeals. 6 The mere filing of a notice of appeal does not divest the trial court of its jurisdiction over the case. The court may
still take cognizance of the other party's motion for execution pending appeal, as in the instant case, provided such motion is filed within 15 days
from notice of the decision of the said party. 7
The general rule under Sec. 1 of Rule 39 of the Rules of Court is that a judgment can be executed only after it has become final and executory, that
is, when it "finally disposes of the action or proceeding." Such execution shall issue as a matter of right upon the expiration of the period for appeal
if no appeal has been perfected.
By way of exception, however, execution pending appeal is allowed under Sec. 2 of the same Rule as follows:

52
 Sec 2. Execution pending-appeal. — On motion of the prevailing party with notice to the adverse party, the court may, in its
discretion, order execution to issue even before the expiration of the time to appeal, upon good reasons to be stated in a special
order. If a record on appeal is filed thereafter, the motion and the special order shall be included therein.
Execution pending appeal requires observance of the following requisites: (a) there must be a motion therefor by the prevailing party with notice to
the adverse party; (b) there must be a good reason for issuing the writ of execution; and (c) the good reason must be stated in a special order. 8
The exercise of the power to grant or deny immediate or advance execution is addressed to the sound discretion of the court. However, the existence
of good reason is indispensable to the grant of execution pending appeal. Absent any such good reason, the special order of execution must be struck
down for having been issued with grave abuse of discretion.
The Court disagrees with the respondent court that the mere filing of a bond is sufficient to warrant execution pending appeal. It is now settled that
the filing of a bond cannot by itself alone entitle the private respondents to such a process. Whatever doubts may have been generated by early
decisions have been clarified in Roxas vs. Court of Appeals, 9 thus:
It is not intended obviously that execution pending appeal shall issue as a matter of course. "Good reasons," special, important,
pressing reasons must exist to justify it; otherwise, instead of an instrument of solicitude and justice, it may well become a tool
of oppression and inequity. But to consider the mere posting of a bond a "good reason" would precisely make immediate
execution of a judgment pending appeal routinary, the rule rather than the exception. Judgments would be executed
immediately, as a matter of course, once rendered, if all that the prevailing party needed to do was to post a bond to answer for
damages that might result therefrom. This is a situation, to repeat, neither contemplated nor intended by law.
Even so, the Court finds that the justification given by the trial court in its challenged order constitutes the "good reasons" required by Section 2 of
Rule 39 for authorizing execution pending appeal. It is noted that the decision under appeal held the petitioners solidarily liable to the private
respondents for what it described as "the fraudulent combination of the defendants against the plaintiffs." Of these defendants, Pioneer Savings and
Loan Bank is under receivership and in a state of insolvency; 10 Renato Tuazon and his family have immigrated and his real properties are being
sold; 11 Leo Guevarra and Arturo Eudela appear to have no registered real properties in their name, and Eudela himself is reportedly at large and
facing malversation charges filed by the Bureau of Internal Revenue. 12 Francisco Pangilinan, the president of the insolvent bank, appears to be the
only one who may be able to satisfy the private respondents' claims although he has not denied their allegations that his real properties are heavily
mortgaged and that he has sold two of his cars. 13 Added to these danger signals is the fact that the complaints were filed in the Regional Trial Court
of Quezon City as early as 1986, and the private respondents have yet to execute the judgment in their favor because of the petition at bar and the
appeal pending in the Court of Appeals. In these circumstances, the Court feels that the trial court did not commit grave abuse of discretion but in
fact acted quite judiciously in granting the motion for execution pending appeal.
It is worth noting that the petitioners filed a motion to file a counterbond to prevent the enforcement of the writ of execution pending appeal and
that the said motion was granted by the trial court. 14 The record does not show that the counterbond has been filed to date. This is still another
indication of the financial difficulties of the solidary debtors that may diminish if not altogether nullify the private respondents' chances for recovery.
The petitioners have not frontally refuted the finding of the appellate court that the petition brought before it was premature, having been filed
before the issuance of the challenged order granting the writ of execution pending appeal. All they have done was cite extensive jurisprudence
dealing generally with the right to extraordinary remedies, but they have not shown they were entitled to such remedies when they questioned on
May 11, 1988, the order granting the writ of execution issued only on May 30, 1988.
To the question, finally, of whether or not the resolution of the appellate court denying the motion for reconsideration is constitutionally flawed, the
answer must also be against the petitioners. The said resolution found "no cogent reason to justify the reversal of our decision of April 10, 1987."
This was a sufficient statement of the legal basis required by Article VIII, Sec. 14, of the Constitution. In so saying, the respondent court was in effect
sustaining and re-affirming the challenged decision, with the factual findings and legal conclusions contained therein. There was no need to reproduce
all this in the order denying reconsideration.
For all their extraordinary verbiage, the petitioners have failed to show that the trial court committed grave abuse of discretion in issuing the order
granting execution pending appeal. The merits of the case may still be threshed out in the appeal, but we are persuaded that in the meantime the
private respondents are entitled to the relief they seek.
ACCORDINGLY, the petition is DENIED, with costs against the petitioners. It is so ordered.

53
 THIRD DIVISION
[G.R. NO. 156596 : August 24, 2007]
ADELAIDA INFANTE, Petitioner, v. ARAN BUILDERS, INC., Respondent.*
DECISION
AUSTRIA-MARTINEZ, J.:
This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking the reversal of the Decision1 of the Court of Appeals
(CA) promulgated on August 12, 2002, which upheld the Order dated September 4, 2001, issued by the Regional Trial Court of Muntinlupa City (RTC).
The undisputed facts and issues raised in the lower courts are accurately summarized by the CA as follows:
Before the Regional Trial Court of Muntinlupa City (or "Muntinlupa RTC"; Branch 276), presided over by Hon. Norma C. Perello (or "respondent
judge"), was an action for revival of judgment filed on June 6, 2001 by Aran Builders, Inc. (or "private respondent") against Adelaida Infante (or
"petitioner"), docketed as Civil Case No. 01-164.
The judgment sought to be revived was rendered by the Regional Trial Court of Makati City (or "Makati RTC"; Branch 60) in an action for specific
performance and damages, docketed as Civil Case No. 15563.
The Makati RTC judgment, which became final and executory on November 16, 1994, decreed as follows:
26. WHEREFORE, the Court hereby renders judgment as follows:
26.1 The defendant ADELAIDA B. INFANTE is ordered to do the following within thirty (30) days from finality hereof:
26.1.1. To deliver to the plaintiff ARAN BUILDERS, INC. the following: (a) the complete plans (lot plan, location map and vicinity map); (b) Irrevocable
Power of Attorney; (c ) Real Estate Tax clearance; (d) tax receipts; (e) proof of up to date payment of Subdivision Association dues referred to in the
"CONTRACT TO SELL" dated November 10, 1986 (Exh. A or Exh. 1);
26.1.2. To execute the deed of sale of Lot No. 11, Block 9, Phase 3-A1, Ayala Alabang Subdivision covered by TCT No. 114015 for P500,000.00 in favor
of the plaintiff;
26.1.3. To pay the capital gains tax, documentary stamp taxes and other taxes which the Bureau of Internal Revenue may assess in connection with
the sale mentioned in the preceding paragraph and to submit to the plaintiff proof of such payment;
26.1.4. To secure the written conformity of AYALA CORPORATION to the said sale and to give such written conformity to the plaintiff;
26.1.5. To register the deed of sale with the Registry of Deeds and deliver to AYALA CORPORATION the certificate of title issued in the name of
plaintiff pursuant to such registration;
26.2 Upon the compliance of the defendant with the preceding directives, the plaintiff must immediately pay to the defendant the sum
of P321,918.25;
26.3 The defendant is ordered to pay plaintiff P10,000.00 as attorney's fees;
26.4 The Complaint for moral and exemplary damages is DISMISSED;
26.5 The COUNTERCLAIM is DISMISSED; andcralawlibrary
26.6 Cost is taxed against the defendant.
Petitioner filed a motion to dismiss the action (for revival of judgment) on the grounds that the Muntinlupa RTC has no jurisdiction over the persons
of the parties and that venue was improperly laid. Private respondent opposed the motion.
On September 4, 2001, the Muntinlupa RTC issued an order which reads:
The MOTION TO DISMISS is denied.
Admittedly, the Decision was rendered by the Makati Regional Trial Court, but it must be emphasized that at that time there was still no Regional
Trial Court in Muntinlupa City, then under the territorial jurisdiction of the Makati Courts, so that cases from this City were tried and heard at Makati
City. With the creation of the Regional Trial Courts of Muntinlupa City, matters involving properties located in this City, and cases involving Muntinlupa
City residents were all ordered to be litigated before these Courts.
The case at bar is a revival of a judgment which declared the plaintiff as the owner of a parcel of land located in Muntinlupa City. It is this judgment
which is sought to be enforced thru this action which necessarily involves the interest, possession, title, and ownership of the parcel of land located
in Muntinlupa city and adjudged to Plaintiff. It goes without saying that the complaint should be filed in the latter City where the property is located,
as there are now Regional Trial Courts hereat.
Defendant may answer the complaint within the remaining period, but no less than five (5) days, otherwise a default judgment might be taken against
her.
It is SO ORDERED.
Her motion for reconsideration having been denied per order dated September 28, 2001, petitioner came to this Court [CA] via the instant special
civil action for certiorari . She ascribes grave abuse of discretion amounting to lack or excess of jurisdiction on the part of respondent judge for
"erroneously holding that Civil Case No. 01-164 is a revival of judgment which declared private respondent as the owner of a parcel of land located
in Muntinlupa City and (that) the judgment rendered by the (Makati RTC) in Civil Case No. 15563 sought to be enforced necessarily involves the
interest, possession, title and ownership of the parcel of land located in Muntinlupa City."
Petitioner asserts that the complaint for specific performance and damages before the Makati RTC is a personal action and, therefore, the suit to
revive the judgment therein is also personal in nature; and that, consequently, the venue of the action for revival of judgment is either Makati City
or Parañaque City where private respondent and petitioner respectively reside, at the election of private respondent.
On the other hand, private respondent maintains that the subject action for revival judgment is "quasi in rem because it involves and affects vested
or adjudged right on a real property"; and that, consequently, venue lies in Muntinlupa City where the property is situated.2
On August 12, 2002, the CA promulgated its Decision ruling in favor of herein private respondent. The CA held that since the judgment sought to be
revived was rendered in an action involving title to or possession of real property, or interest therein, the action for revival of judgment is then an
action in rem which should be filed with the Regional Trial Court of the place where the real property is located. Petitioner moved for reconsideration
of the CA Decision but the motion was denied per Resolution dated January 7, 2003.

54
Hence, herein petition. Petitioner claims that the CA erred in finding that the complaint for revival of judgment is an action in rem which was correctly
filed with the RTC of the place where the disputed real property is located.
The petition is unmeritorious.
Petitioner insists that the action for revival of judgment is an action in personam; therefore, the complaint should be filed with the RTC of the place
where either petitioner or private respondent resides. Petitioner then concludes that the filing of the action for revival of judgment with the RTC of
Muntinlupa City, the place where the disputed property is located, should be dismissed on the ground of improper venue.
Private respondent is of the opinion that the judgment it is seeking to revive involves interest over real property. As such, the present action for
revival is a real action, and venue was properly laid with the court of the place where the realty is located.
Thus, the question that must be answered is: where is the proper venue of the present action for revival of judgment?cralaw library
Section 6, Rule 39 of the 1997 Rules of Civil Procedure provides that after the lapse of five (5) years from entry of judgment and before it is barred
by the statute of limitations, a final and executory judgment or order may be enforced by action. The Rule does not specify in which court the action
for revival of judgment should be filed.
In Aldeguer v. Gemelo,3 the Court held that:
x x x an action upon a judgment must be brought either in the same court where said judgment was rendered or in the place where the plaintiff or
defendant resides, or in any other place designated by the statutes which treat of the venue of actions in general. (Emphasis supplied)4
but emphasized that other provisions in the rules of procedure which fix the venue of actions in general must be considered. 5
Under the present Rules of Court, Sections 1 and 2 of Rule 4 provide:
Section 1. Venue of real actions. - Actions affecting title to or possession of real property, or interest therein, shall be commenced and tried in the
proper court which has jurisdiction over the area wherein the real property involved, or a portion thereof, is situated.
xxx
Section 2. Venue of personal actions. - All other actions may be commenced and tried where the plaintiff or any of the principal plaintiffs resides, or
where the defendant or any of the principal defendants resides, or in the case of a non-resident defendant where he may be found, at the election
of the plaintiff.
Thus, the proper venue depends on the determination of whether the present action for revival of judgment is a real action or a personal action.
Applying the afore-quoted rules on venue, if the action for revival of judgment affects title to or possession of real property, or interest therein, then
it is a real action that must be filed with the court of the place where the real property is located. If such action does not fall under the category of
real actions, it is then a personal action that may be filed with the court of the place where the plaintiff or defendant resides.
In support of her contention that the action for revival of judgment is a personal action and should be filed in the court of the place where either the
plaintiff or defendant resides, petitioner cites the statements made by the Court in Aldeguer v. Gemelo6 and Donnelly v. Court of First Instance of
Manila7 . Petitioner, however, seriously misunderstood the Court's rulings in said cases.
In Aldeguer, what the Court stated was that "[t]he action for the execution of a judgment for damages is a personal one, and under section 377 [of
the Code of Civil Procedure], it should be brought in any province where the plaintiff or the defendant resides, at the election of the
plaintiff"8 (Emphasis and underscoring supplied). Petitioner apparently took such statement to mean that any action for revival of judgment should
be considered as a personal one. This thinking is incorrect. The Court specified that the judgment sought to be revived in said case was a judgment
for damages. The judgment subject of the action for revival did not involve or affect any title to or possession of real property or any interest therein.
The complaint filed in the revival case did not fall under the category of real actions and, thus, the action necessarily fell under the category of
personal actions.
In Donnelly, the portion of the Decision being relied upon by petitioner stated thus:
Petitioner raises before this Court two (2) issues, namely: (a) whether an action for revival of judgment is one quasi in rem and, therefore, service of
summons may be effected thru publication; and (b) whether the second action for revival of judgment (Civil Case No. 76166) has already
prescribed. To our mind, the first is not a proper and justiciable issue in the present proceedings x x x. Nevertheless, let it be said that an action to
revive a judgment is a personal one. (Emphasis supplied)9
The Court clearly pointed out that in said case, the issue on whether an action for revival of judgment is quasi in rem was not yet proper and
justiciable. Therefore, the foregoing statement cannot be used as a precedent, as it was merely an obiter dictum. Moreover, as in Aldeguer, the
judgment sought to be revived in Donnelly involved judgment for a certain sum of money. Again, no title or interest in real property was involved. It
is then understandable that the action for revival in said case was categorized as a personal one.
Clearly, the Court's classification in Aldeguer and Donnelly of the actions for revival of judgment as being personal in character does not apply to the
present case.
The allegations in the complaint for revival of judgment determine whether it is a real action or a personal action.
The complaint for revival of judgment alleges that a final and executory judgment has ordered herein petitioner to execute a deed of sale over a
parcel of land in Ayala Alabang Subdivision in favor of herein private respondent; pay all pertinent taxes in connection with said sale; register the
deed of sale with the Registry of Deeds and deliver to Ayala Corporation the certificate of title issued in the name of private respondent. The same
judgment ordered private respondent to pay petitioner the sum of P321,918.25 upon petitioner's compliance with the aforementioned order. It is
further alleged that petitioner refused to comply with her judgment obligations despite private respondent's repeated requests and demands, and
that the latter was compelled to file the action for revival of judgment. Private respondent then prayed that the judgment be revived and a writ of
execution be issued to enforce said judgment.
The previous judgment has conclusively declared private respondent's right to have the title over the disputed property conveyed to it. It is, therefore,
undeniable that private respondent has an established interest over the lot in question; and to protect such right or interest, private respondent
brought suit to revive the previous judgment. The sole reason for the present action to revive is the enforcement of private respondent's adjudged
rights over a piece of realty. Verily, the action falls under the category of a real action, for it affects private respondent's interest over real
property.chanrobles virtual law library
The present case for revival of judgment being a real action, the complaint should indeed be filed with the Regional Trial Court of the place where
the realty is located.
Section 18 of Batas Pambansa Bilang 129 provides:

55
Sec. 18. Authority to define territory appurtenant to each branch. - The Supreme Court shall define the territory over which a branch of the Regional
Trial Court shall exercise its authority. The territory thus defined shall be deemed to be the territorial area of the branch concerned for purposes
of determining the venue of all suits, proceedings or actions, whether civil or criminal, as well as determining the Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial Courts over which the said branch may exercise appellate jurisdiction. The power herein granted
shall be exercised with a view to making the courts readily accessible to the people of the different parts of the region and making the attendance of
litigants and witnesses as inexpensive as possible. (Emphasis supplied)chanrobles virtual law library
From the foregoing, it is quite clear that a branch of the Regional Trial Court shall exercise its authority only over a particular territory defined by
the Supreme Court. Originally, Muntinlupa City was under the territorial jurisdiction of the Makati Courts. However, Section 4 of Republic Act No.
7154, entitled An Act to Amend Section Fourteen of Batas Pambansa Bilang 129, Otherwise Known As The Judiciary Reorganization Act of 1981, took
effect on September 4, 1991. Said law provided for the creation of a branch of the Regional Trial Court in Muntinlupa. Thus, it is now the Regional
Trial Court in Muntinlupa City which has territorial jurisdiction or authority to validly issue orders and processes concerning real property within
Muntinlupa City.
Thus, there was no grave abuse of discretion committed by the Regional Trial Court of Muntinlupa City, Branch 276 when it denied petitioner's
motion to dismiss; and the CA did not commit any error in affirming the same.
WHEREFORE, the petition is DENIED. The Decision dated August 12, 2002 and Resolution dated January 7, 2003 of the Court of Appeals
are AFFIRMED.
SO ORDERED.

56
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 168913 March 14, 2007
ROLANDO TING, Petitioner,
vs.
HEIRS OF DIEGO LIRIO, namely: FLORA A. LIRIO, AMELIA L. ROSKA, AURORA L. ABEJO, ALICIA L. DUNQUE, ADELAIDA L. DAVID, EFREN A. LIRIO
and JOCELYN ANABELLE L. ALCOVER, Respondents.
DECISION
CARPIO MORALES, J.:
In a Decision of December 10, 1976 in Land Registration Case (LRC) No. N-983, then Judge Alfredo Marigomen of the then Court of First Instance of
Cebu, Branch 7, granted the application filed by the Spouses Diego Lirio and Flora Atienza for registration of title to Lot No. 18281 (the lot) of the
Cebu Cadastral 12 Extension, Plan Rs-07-000787.
The decision in LRC No. N-983 became final and executory on January 29, 1977. Judge Marigomen thereafter issued an order of November 10, 1982
directing the Land Registration Commission to issue the corresponding decree of registration and the certificate of title in favor of the spouses Lirio.
On February 12, 1997, Rolando Ting (petitioner) filed with the Regional Trial Court (RTC) of Cebu an application for registration of title to the same
lot. The application was docketed as LRC No. 1437-N.1
The herein respondents, heirs of Diego Lirio, namely: Flora A. Lirio, Amelia L. Roska, Aurora L. Abejo, Alicia L. Dunque, Adelaida L. David, Efren A. Lirio
and Jocelyn Anabelle L. Alcover, who were afforded the opportunity to file an opposition to petitioner’s application by Branch 21 of the Cebu RTC,
filed their Answer2 calling attention to the December 10, 1976 decision in LRC No. N-983 which had become final and executory on January 29, 1977
and which, they argued, barred the filing of petitioner’s application on the ground of res judicata.
After hearing the respective sides of the parties, Branch 21 of the Cebu RTC, on motion of respondents, dismissed petitioner’s application on the
ground of res judicata. 31ªvvphi1.nét
Hence, the present petition for review on certiorari which raises the sole issue of whether the decision in LRC No. N-983 constitutes res judicata in
LRC No. 1437-N.
Petitioner argues that although the decision in LRC No. N-983 had become final and executory on January 29, 1977, no decree of registration has
been issued by the Land Registration Authority (LRA);4 it was only on July 26, 2003 that the "extinct" decision belatedly surfaced as basis of
respondents’ motion to dismiss LRC No. 1437-N;5 and as no action for revival of the said decision was filed by respondents after the lapse of the ten-
year prescriptive period, "the cause of action in the dormant judgment passé[d] into extinction." 6
Petitioner thus concludes that an "extinct" judgment cannot be the basis of res judicata.7
The petition fails.
Section 30 of Presidential Decree No. 1529 or the Property Registration Decree provides:
SEC. 30. When judgment becomes final; duty to cause issuance of decree. – The judgment rendered in a land registration
proceeding becomes final upon the expiration of thirty days8 to be counted from the date of receipt of notice of the judgment. An appeal may be
taken from the judgment of the court as in ordinary civil cases.
After judgment has become final and executory, it shall devolve upon the court to forthwith issue an order in accordance with Section 39 of this
Decree to the Commissioner for the issuance of the decree of registration and the corresponding certificate of title in favor of the person adjudged
entitled to registration. (Emphasis supplied)
In a registration proceeding instituted for the registration of a private land, with or without opposition, the judgment of the court confirming the title
of the applicant or oppositor, as the case may be, and ordering its registration in his name constitutes, when final, res judicata against the whole
world.9 It becomes final when no appeal within the reglementary period is taken from a judgment of confirmation and registration. 10
The land registration proceedings being in rem, the land registration court’s approval in LRC No. N-983 of spouses Diego Lirio and Flora Atienza’s
application for registration of the lot settled its ownership, and is binding on the whole world including petitioner.
Explaining his position that the December 10, 1976 Decision in LRC No. N-983 had become "extinct," petitioner advances that the LRA has not issued
the decree of registration, a certain Engr. Rafaela Belleza, Chief of the Survey Assistance Section, Land Management Services, Department of
Environment and Natural Resources (DENR), Region 7, Cebu City having claimed that the survey of the Cebu Cadastral Extension is erroneous and all
resurvey within the Cebu Cadastral extension must first be approved by the Land Management Services of
the DENR, Region 7, Cebu City before said resurvey may be used in court; and that the spouses Lirio did not comply with the said requirement for
they instead submitted to the court a mere special work order. 11
There is, however, no showing that the LRA credited the alleged claim of Engineer Belleza and that it reported such claim to the land registration
court for appropriate action or reconsideration of the decision which was its duty.
Petitioners insist that the duty of the respondent land registration officials to issue the decree is purely ministerial. It is ministerial in the sense that
they act under the orders of the court and the decree must be in conformity with the decision of the court and with the data found in the record,
and they have no discretion in the matter. However, if they are in doubt upon any point in relation to the preparation and issuance of the decree,
it is their duty to refer the matter to the court. They act, in this respect, as officials of the court and not as administrative officials, and their act is
the act of the court. They are specifically called upon to "extend assistance to courts in ordinary and cadastral land registration
proceedings."12 (Emphasis supplied)
As for petitioner’s claim that under Section 6, Rule 39 of the Rules of Court reading:
SEC. 6. Execution by motion or by independent action. – A final and executory judgment or order may be executed on motion within five (5) years
from the date of its entry. After the lapse of such time, and before it is barred by the statute of limitations, a judgment may be enforced by action.
The revived judgment may also be enforced by motion within five (5) years from the date of its entry and thereafter by action before it is barred by
the statute of limitations[,]

57
the December 10, 1976 decision became "extinct" in light of the failure of respondents and/or of their predecessors-in-interest to execute the same
within the prescriptive period, the same does not lie.
Sta. Ana v. Menla, et al.13 enunciates the raison d’etre why Section 6, Rule 39 does not apply in land registration proceedings, viz:
THAT THE LOWER COURT ERRED IN ORDERING THAT THE DECISION RENDERED IN THIS LAND REGISTRATION CASE ON NOVEMBER 28, 1931 OR
TWENTY SIX YEARS AGO, HAS NOT YET BECOME FINAL AND UNENFORCEABLE.
We fail to understand the arguments of the appellant in support of the above assignment, except in so far as it supports his theory that after a
decision in a land registration case has become final, it may not be enforced after the lapse of a period of 10 years, except by another proceeding to
enforce the judgment or decision. Authority for this theory is the provision in the Rules of Court to the effect that judgment may be enforced within
5 years by motion, and after five years but within 10 years, by an action (Sec. 6, Rule 39.) This provision of the Rules refers to civil actions and is not
applicable to special proceedings, such as a land registration case. This is so because a party in a civil action must immediately enforce a judgment
that is secured as against the adverse party, and his failure to act to enforce the same within a reasonable time as provided in the Rules makes
the decision unenforceable against the losing party. In special proceedings the purpose is to establish a status, condition or fact; in land
registration proceedings, the
ownership by a person of a parcel of land is sought to be established. After the ownership has been proved and confirmed
by judicial declaration, no further proceeding to enforce said ownership is necessary, except when the adverse or losing party had been in
possession of the land and the winning party desires to oust him therefrom.
Furthermore, there is no provision in the Land Registration Act similar to Sec. 6, Rule 39, regarding the execution of a judgment in a civil action,
except the proceedings to place the winner in possession by virtue of a writ of possession. The decision in a land registration case, unless the adverse
or losing party is in possession, becomes final without any further action, upon the expiration of the period for perfecting an appeal.
x x x x (Emphasis and underscoring supplied)
WHEREFORE, the petition is, in light of the foregoing discussions, DENIED.
Costs against petitioner, Rolando Ting.
SO ORDERED.

58
 THIRD DIVISION
[G.R. NO. 169444 : September 17, 2008]
PABLITO T. VILLARIN AND P.R. BUILDERS DEVELOPERS & MANAGERS, INC., Petitioners, v. CORONADO P. MUNASQUE, Respondent.
DECISION
TINGA, J.:
The Decision dated 31 March 2005 and Resolution dated 11 August 2005 of the Court of Appeals1 are assailed in this petition for review under Rule
45.2

The facts as culled from the assailed decision and the records follow.

This case stemmed from a Complaint3 for collection of sum of money filed on 10 July 2002 by respondent Coronado P. Munasque against
petitioners Pablito T. Villarin and P.R. Builders Developers and Managers, Inc., and their co-defendant Intra Strata Assurance Corp. (Intra Strata)
before the Regional Trial Court (RTC) of Makati City, Branch 58.

On 20 July 2002, before the answer could be filed, the parties entered into a compromise agreement4 wherein petitioners acknowledged their joint
and solidary obligation to respondent in the amount of P15 million, with a monthly interest of P450,000.00 from 18 October 2001 until full
payment, and promised to pay the whole amount within ninety (90) days from the date of the said agreement. To guarantee payment of the
obligation, all the real estate mortgages executed by petitioners in favor of Intra Strata were assigned to respondent. Consequently, Intra Strata
was released from its obligation to respondent and the complaint against it dismissed.

On even date, the parties jointly filed before the RTC a motion for the approval of the compromise agreement. 5 Judge Winlove M. Dumayas (Judge
Dumayas), pairing judge of the RTC, granted the motion on 2 August 2002.6

Petitioners managed to pay only P250,000.00 of their total obligation. Thus, on 23 October 2002, respondent filed a motion for execution.7

The motion was granted8 and the writ of execution issued on 29 October 2002.9 The following day, 30 October 2002, deputy sheriff of Makati,
Antonio Q. Mendoza (Deputy Sheriff Mendoza), issued a notice of levy10 and had the same annotated at the back of thirty-four (34) transfer
certificates of title (TCTs) issued by the Register of Deeds of Tanauan City in the name of petitioners. On the same day, another notice of levy11 was
issued against all rights and interests of petitioners on a piece of land covered by a tax declaration in petitioner Villarin's name, directing that the
corresponding recording and annotation be made in the books of the city assessor of Tagaytay City. On 5 November 2002, still another notice of
levy12 with the same directive to the Register of Deeds of Tanauan City, Batangas was issued against eleven (11) pieces of property covered by TCTs
issued in the name of petitioners.

On 8 November 2002, Deputy Sheriff Mendoza issued "Notice of Deputy Sheriff's Sale on Execution">13 relative to the levied properties, caused its
registration in the Office of the City Assessor of Tagaytay and the Register of Deeds of Tanauan City, and had it posted for twenty days in three
public places each in the cities of Tanauan, Tagaytay and Makati. After the raffle was conducted by the clerk of court (ex officio deputy sheriff) of
the RTC of Makati City, the notice of sale on execution was published in a newspaper of national circulation on 20 and 27 November 2002.14

On 14 November 2002, the law firm of Oben Ventura Abola entered its appearance as collaborating counsel with petitioners' counsel of record,
Atty. Jufraida F. Salamero (Atty. Salamero).15 The firm sent via registered mail to respondent's counsel and Deputy Sheriff Mendoza a letter16 dated
13 November 2002, complaining of procedural lapses in the enforcement of the writ of execution. The firm claimed that the deputy sheriff did not
comply with Section 9, Rule 39 of the 1997 Rules of Civil Procedure which, according to it, requires first a personal demand for payment of the full
amount of the obligation before levy on the properties could be made; that when levy was made, petitioners were not given the option to choose
what property should be levied; and that levy should have been made first on petitioners' personal properties. Petitioners then identified eight (8)
parcels of land registered with the Register of Deeds of Tanauan City which they claimed should be the subject of levy since the combined value of
the said properties was sufficient to cover the P15 million claim. On that basis, they requested that the appropriate correction be made in the
notice of levy.

On 19 November 2002, petitioners filed a motion to recall the notice of levy and cancel the scheduled deputy sheriff's sale, alleging the same
grounds raised in the letter of 13 November 2002.17

Respondent opposed the motion, contending that the day before the levy, petitioners' counsel, Atty. Salamero, informed respondent's counsel that
petitioners did not have the money to pay even one month's interest at the time. It was also averred that Atty. Salamero also agreed to the
immediate levy of the real properties of petitioners provided that the auction sale be scheduled earlier than 20 November 2002 because by then,
according to her, petitioners shall have already had the funds needed to pay their obligation. Petitioners' accountant, Florita B. Santos (Santos),
allegedly made similar representations to respondent. Respondent also alleged that petitioners' specification of the 8 parcels of land to be levied
upon constituted a waiver and/or confirmation of their previous waiver of the need to require the sheriff to first personally demand full payment of
the judgment debt or levy on their personal properties.18

On 13 December 2002, the RTC reset the scheduled auction sale from 16 December 2002 to 16 January 2003. 19

On 7 January 2003, the RTC issued an Order20 denying for lack of merit petitioners' motion to recall the levy and to cancel the scheduled sale on
execution. Thus, on 16 January 2003, Deputy Sheriff Mendoza conducted an auction sale of the levied properties at the main entrance lobby of the
Makati City Hall. The minutes of auction sale21 would show that counsels for both parties, who had affixed their signatures therein, were present at
the sale and that only respondent's representative participated in the bidding. As found by the Court of Appeals, the said minutes would also show
that all the real properties had been sold one after another with separate price for each bid and that the individual bid prices for the fourty-four
(44) lots totaled P19,546,000.00. Respondent paid the deputy sheriff's fees and thereafter was issued a certificate of sale on execution.

On 30 January 2003, petitioners filed an omnibus motion to reconsider the Order dated 7 January 2003; to declare null and void and recall the
Notice of Levy dated 30 October 2002, the Notice of Deputy Sheriff's Sale on Execution dated 8 November 2002, and the auction sale proceedings
held on 16 January 2003; and to inhibit the presiding judge.22 Petitioners alleged that the 7 January 2003 Order did not have any factual or legal
basis, and that they had lost faith in the presiding judge whose acts were tainted with irregularity and malice.

On 20 February 2003, Judge Dumayas inhibited himself from the case without resolving petitioners' omnibus motion. The case was re-raffled to
Branch 148, presided by Judge Oscar B. Pimentel (Judge Pimentel).

59
On 12 June 2003, Judge Pimentel issued an Order23 declaring null and void the deputy sheriff's sale on execution of petitioners' real properties and
setting aside the 7 January 2003 Order which denied petitioners' motion to recall the notice of levy. The dispositive portion of the order reads:
WHEREFORE, premises considered, the Omnibus Motion is hereby GRANTED, hence, the Order dated 7 January 2003 is hereby set aside, and the
notice of levy dated 30 October 2002, notice of Deputy Sheriff's sale on execution dated 8 November 2002 and the auction sale proceedings on 16
January 2003 are hereby declared null and void.

SO ORDERED.24
On 3 July 2003, respondent filed a motion for reconsideration of the Order of 12 June 2003, but this was denied in the RTC's Order25 dated 25
August 2003.

Respondent thus appealed to the Court of Appeals which, on 31 March 2005, ruled favorably to respondent: 26
WHEREFORE, the assailed Orders dated 12 June 2003 and [25 August 2003] of Judge Pimentel are REVERSED and SET ASIDE. The Order dated 7
January 2003 of Judge Dumayas is AFFIRMED and REINSTATED, and the validity of the auction sale conducted by Deputy Sheriff Mendoza on 16
January 2003, UPHELD.

SO ORDERED.27
The Court of Appeals noted that in the RTC's Order of 7 January 2003, some pertinent facts were not denied or disputed by petitioners, namely,
that Atty. Salamero and Santos admitted to respondent's counsel that petitioners had no sufficient funds to pay even one month's interest, and
that petitioners agreed that the levy may proceed as long as the auction sale would not be scheduled earlier than 20 November 2002. The Court of
Appeals also held that all the alleged procedural defects committed by Deputy Sheriff Mendoza had been corrected when petitioners wrote the
letter dated 13 November 2002,28 as follows:
In violation of the above requirements, no demand for the immediate payment for the full amount of the obligation was made upon the
[petitioners] by the [Deputy Sheriff] concerned prior to the issuance of the levy.

As a consequence, [petitioners] had been thereby effectively and unduly deprived of the opportunity to exercise his "option" or right under the
Writ "to immediately choose which properties may be levied upon" in the event he fails to pay the judgment debt upon such demand.

As a further consequence, levy has been indiscriminately and arbitrarily made on properties of [petitioners] whose value is well in excess of
[respondent's] claim.

We note that the aforesaid Notice of Levy was issued with precipitate haste on 30 October 2002, just a day after the issuance of the Writ of
Execution on 29 October 2002, barring sufficient opportunity for a demand for payment to be made upon [petitioners] nor for any opportunity to
exercise [petitioners'] right to choose which properties may be levied upon, indicative of a premeditated plan of over levying on [petitioners']
properties.

Notwithstanding the above, [petitioners] hereby exercise their right to choose which properties may be levied upon in satisfaction of their
aforesaid obligation pursuant to the Writ of Execution issued by Honorable Winlove M. Dumayas of the [RTC] of Makati, Branch 58, to wit:
Real Property Area

TCT No. T-89829 47,241 sq. meters

TCT No. T-93840 4,184 sq. meters
TCT No. T-93843 4,408 sq. meters
TCT No. T-93845 4,406 sq. meters
TCT No. T-93847 4,406 sq. meters
TCT No. T-93848 4,406 sq. meters
TCT No. T-93849 4,406 sq. meters
TCT No. T-93850 4,406 sq. meters29
The Court of Appeals found that the foregoing acts amounted to petitioners' exercise of their right "to immediately choose which property or part
thereof may be levied upon sufficient to satisfy the judgment" and a waiver of their right to require the officer to first levy on their personal
properties. The appellate court opined that it would be an exercise in futility to require the officer to first make a personal demand when the
judgment debtors (petitioners) had already given the go-signal to proceed with the levy of real properties. It noted that waiver of personal demand
for immediate payment is allowed by Article 6 of the New Civil Code and such waivers and automatic correction of the procedural defects thus
rendered moot the challenge against the validity of the levy.30

The appellate court ruled further that petitioners' 44 parcels of land were sold separately as required by law and not in bulk. It found erroneous the
RTC's conclusion that the sale was made in bulk since nowhere was it stated in the deputy sheriff's report that the sale of all the parcels of land was
done en masse, and the minutes of the auction sale, prepared by the deputy sheriff and signed by the representatives of both parties, clearly
indicate the individual description and TCT numbers of the properties sold, the individual bid price for each parcel of land, and the total bid price
for all 44 parcels. The certificate of sale on execution dated 16 January 2003 also specifies the TCT number, the technical description, and selling
price of each parcel of land sold. Thus, bearing in mind the legal presumption of regular performance of official duty and the fact that the parties
never made any objection during the auction sale or immediately thereafter, the Court of Appeals ruled that the properties were sold separately.31

In the present petition, petitioners contend that Deputy Sheriff Mendoza failed to comply with the provisions of Section 9, Rule 39 of the Rules of
Court in implementing the writ of execution. In levying on the 44 parcels of land, he allegedly failed to (a) first make a personal demand on
petitioners for the immediate payment of the full amount stated in the writ of execution and all lawful fees and (b) give petitioners the option to
immediately choose which property or part thereof sufficient to satisfy the judgment may be levied upon.32 They argue that the admissions made
by Atty. Salamero and Santos do not amount to a waiver of their right to prior demand for payment of the full amount of the judgment, noting that
Deputy Sheriff Mendoza should have made the demand for payment on petitioners themselves in order to verify the admissions made by said

60
persons.33

Petitioners add that the letter of 13 November 2002 also does not constitute a waiver or an automatic correction of the procedural defects in the
execution of the writ since petitioners wrote the letter precisely to exercise their right to choose the properties to be levied upon. They merely
sought to save whatever rights they still had, they explain. 34

Petitioners also question the Court of Appeals' finding that the 44 parcels of land were sold separately as required by law, on the ground that it has
no factual or evidentiary basis. The minutes of the auction sale on which the Court of Appeals based its finding do not even contain the individual
description of the properties sold but only an enumeration of the titles covering each property, with the bid price for each parcel of land left blank
but later filled in by handwriting only, indicating that the 44 parcels were sold in bulk and not separately.35

Finally, petitioners allege that the Court of Appeals erred in disregarding the documents they presented which show the fair market value of the
properties levied by Deputy Sheriff Mendoza. The documents supposedly show that the fair market value of the properties levied upon is
P1,187,212,000.00 or far greater than the judgment debt of P15 million. Thus, they claim that an overlevy was perpetrated by failure to comply
with the provisions of Section 9, Rule 39.36

In his comment, respondent agrees with the Court of Appeals that in assenting, through their counsel, to the auction sale scheduled after 20
November 2002, petitioners waived the requirement of demand for immediate payment, and that through their letter of 13 November 2002, they
indicated their choice of the specific properties to be levied upon and this also unwittingly cured the procedural lapses in the enforcement of the
writ.37

As to petitioners' allegations that the levied properties were sold in bulk, not individually, and that the appellate court disregarded evidence
proving the market value of the properties levied upon, respondent asserts that such allegations are primarily questions of fact which are improper
in such a petition as the present one; besides, official documents such as the minutes of auction sale and the certificate of sale on execution, show
that the properties were sold individually. Moreover, the market value of the properties was indicated by the RTC in the Order of 7 January 2003,
based on tax declarations he submitted for evaluation, respondent adds.

On 25 January 2006, petitioners filed their Reply38 essentially reiterating the arguments in their petition.

The validity of both the levy made by Deputy Sheriff Mendoza on petitioners' 44 parcels of land and the subsequent auction sale proceedings is put
in question in this case. The main issue may be couched as follows: whether the failure of the deputy sheriff to first demand of the judgment
obligor payment of the judgment debt before levying the judgment obligor's real properties without allowing him to exercise his option to choose
which of his properties may be levied upon, and without first levying on his personal properties, constitute a fatal procedural defect resulting in the
nullity of the levy and the subsequent execution sale. The other issue is whether the Court of Appeals committed "grave abuse of discretion" in
failing to consider petitioners' evidence on the fair market value of the levied properties.

The petition should be denied.

Section 9, Rule 39 of the Rules of Court provides the procedure in the enforcement of a money judgment. It reads:
SEC. 9. Execution of judgments for money, how enforced. --(a) Immediate payment on demand.--The officer shall enforce an execution of a
judgment for money by demanding from the judgment obligor the immediate payment of the full amount stated in the writ of execution and all
lawful fees. The judgment obligor shall pay in cash, certified bank check payable to the judgment obligee, or any other form of payment acceptable
to the latter, the amount of the judgment debt under proper receipt directly to the judgment obligee or his authorized representative if present at
the time of payment. The lawful fees shall be handed under proper receipt to the executing sheriff who shall turn over the said amount within the
same day to the clerk of court of the court that issued the writ.

xxxx

(b) Satisfaction by levy.--If the judgment obligor cannot pay all or part of the obligation in cash, certified bank check or other mode of payment
acceptable to the judgment obligee, the officer shall levy upon the properties of the judgment obligor of every kind and nature whatsoever which
may be disposed of for value and not otherwise exempt from execution giving the latter the option to immediately choose which property or part
thereof may be levied upon, sufficient to satisfy the judgment. If the judgment obligor does not exercise the option, the officer shall first levy on
the personal properties, if any, and then on the real properties if the personal properties are insufficient to answer for the judgment.

The sheriff shall sell only a sufficient portion of the personal or real property of the judgment obligor which has been levied upon.

When there is more property of the judgment obligor than is sufficient to satisfy the judgment and lawful fees, he must sell only so much of the
personal or real property as is sufficient to satisfy the judgment and lawful fees.

Real property, stocks, shares, debts, credits, and other personal property, or any interest in either real or personal property, may be levied upon in
like manner and with like effect as under a writ of attachment.

xxxx
Based on the foregoing, the sheriff is required to first demand of the judgment obligor the immediate payment of the full amount stated in the writ
of execution before a levy can be made. The sheriff shall demand such payment either in cash, certified bank check or any other mode of payment
acceptable to the judgment obligee. If the judgment obligor cannot pay by these methods immediately or at once, he can exercise his option to
choose which of his properties can be levied upon. If he does not exercise this option immediately or when he is absent or cannot be located, he
waives such right, and the sheriff can now first levy his personal properties, if any, and then the real properties if the personal properties are
insufficient to answer for the judgment.39

Subsection (a) of Section 9, Rule 39 was taken from Section 15, Rule 39 of the 1964 Rules of Court which provided that execution of money
judgments is enforced by "levying on all the property, real and personal of every name and nature whatsoever, and which may be disposed of for
value, of the judgment debtor not exempt from execution, or on a sufficient amount of such property, if there be sufficient, and selling the same,
and paying to the judgment creditor, or his attorney, so much of the proceeds as will satisfy the judgment." The former rule directed the execution
of a money judgment against the property of the judgment debtor.40

The present rule now requires the sheriff to first make a demand for payment, and it prescribes the procedure for and the manner of payment as

61
well as the immediate turnover of the payment by the sheriff to the clerk of court. Levy as a mode of satisfying the judgment may be done only if
the judgment obligor cannot pay all or part of the obligation in cash, certified bank check, or other mode of payment acceptable to the judgment
obligee.41

The issue of improper levy was raised in Seven Brothers Shipping Corp. v. Oriental Assurance Corp.42 In that case, Seven Brothers was ordered to
pay Oriental Assurance P8 million plus interest at the legal rate from the date of filing of the complaint until full payment. When the sheriff
enforced the writ of execution by levying on the vessels of the shipping company, it moved to quash the writ and to lift the levy. The RTC granted
the motion. Oriental Assurance assailed the RTC decision through a petition for certiorari which the Court of Appeals granted. Thus, the writ of
execution and the levy on the vessels were reinstated. Thereafter, Seven Brothers filed with this Court a petition for review contending, among
others, that the levy was improper since the sheriff had not demanded payment of the judgment debt in cash before levying on its vessels.

In denying the petition, the Court noted that the decision finding Seven Brothers liable to Oriental Assurance had already become final and
executory and that entry of judgment had already issued. It also found untenable Seven Brothers' claim of improper levy, citing Torres v.
Cabling43 where the Court held that "a sheriff is not required to give the judgment debtor some time to raise cash [since] if time be given, the
property may be placed in danger of being lost or absconded." Based on the evidence presented, Seven Brothers' existing assets were found to be
insufficient to satisfy the final judgment against it, and the sheriff was thus deemed justified in recognizing that Seven Brothers was in no position
to pay its obligation in cash and in immediately levying on the vessels that would sail beyond the reach of Philippine courts and law enforcers if the
levy was not made. In so ruling, the Court recognized that while it is desirable that the Rules be conscientiously observed, in meritorious cases they
should be interpreted liberally to help secure and not frustrate justice.44

In the case at bar, it is not disputed that Deputy Sheriff Mendoza failed to first demand of petitioners the immediate payment in cash of the full
amount stated in the writ of execution. However, it is also extant in the records that petitioners never disputed the admissions of their counsel,
Atty. Salamero, that they had no funds to pay even a month's interest and that they agreed to the levy so long as the auction sale would not be set
earlier than 20 November 2002. The admissions provide reasonable basis for the deputy sheriff to forego prior demand on petitioners for payment
in cash and proceed to levy on the properties right away. Atty. Salamero, as petitioners' counsel and representative, is expected to know all the
matters related to the case, including the last stage of execution and the state of financial affairs of her clients. Since petitioners had also already
agreed to the levy on their real properties, it would be pointless to require the deputy sheriff to demand immediate payment in cash. For the same
reason, it would be an empty exercise to expect the deputy sheriff to first levy on their personal properties.

Furthermore, while petitioners, in their 13 November 2002 letter, complained of procedural defects in the enforcement of the writ, they at the
same time also actually "exercise[d] their right to choose which properties may be levied upon in satisfaction of their aforesaid obligation"45 It
should be noted that nowhere in the letter did they offer payment of their obligation in cash. They did not even allege any willingness and ability to
do so. They also did not offer personal properties that may be subject of levy. What they offered were 8 parcels of land, the value of which, so they
alleged, would satisfy the obligation. With the offer, petitioners then requested that the appropriate corrections in the notice of levy be made,
presumably to limit the levy to said parcels of land and to effect cancellation of the levy on the remaining parcels. The request is evidenced by
petitioners' subsequent motion to recall the notice of levy, specifically seeking that the notice of levy of Deputy Sheriff Mendoza be cancelled and a
new one issued effecting a levy only on the aforementioned 8 parcels of land.

By such acts, petitioners may be said to have overlooked the procedural lapses, acceded to the execution by levy, and effectively exercised their
right to choose which of their properties may be levied on. That the 13 November 2002 letter is an exercise of this right is shown by this explicit
averment in the motion to recall the notice of levy, thus:
5. To protect and preserve their rights under the circumstances, on 13 November 2002, [petitioners] wrote a letter x x x formally exercising their
right to choose which properties may be levied upon in accordance with the terms of the Writ of Execution issued by this Honorable Court. In the
said letter, [petitioners] had identified a pool of assets, consisting of real properties, from which pool of assets, levy may be made upon such
properties whose combined total aggregate value would satisfactorily cover and satisfy plaintiff's principal claim of Fifteen Million Pesos x x
x.46 [Emphasis supplied]
We thus conclude that Deputy Sheriff Mendoza's failure to demand immediate payment in cash did not nullify the levy on petitioners' real
properties.

We now go to the question of overlevy of the properties.

The 8 parcels of land indicated in the 13 November 2002 letter are actually among the 44 parcels of land levied upon by Deputy Sheriff Mendoza.
Petitioners claim that these 8 parcels of land already had a total fair market value of P155,726,000.00, enough to satisfy their judgment debt, and
that there was an overlevy when all 44 parcels of land were levied upon. Related to the claim of overlevy is the ascribed "grave abuse of
discretion">47 on the part of the Court of Appeals for its failure to consider the evidence presented by petitioners showing the fair market value of
the levied properties.

The question of whether there was indeed an overlevy of properties is one that is essentially factual in nature, as it goes into the determination of
the fair market value of the properties levied upon and the consideration of the amount of real property levied. An exercise like this does not
involve the application of discretion as it invites rather an evaluation of the evidentiary record which is not proper in a petition for review
on certiorari . Matters of proof and evidence are beyond the power of this Court to review under a Rule 45 petition, except in the presence of some
meritorious circumstances,48 none of which is availing in this case.

The allegation of overlevy was first raised in petitioners' motion to recall the notice of levy and to cancel the scheduled auction sale of the levied
properties. Under Section 3, Rule 15 of the Rules of Court, a motion should state the relief sought to be obtained and the grounds upon which it is
based, and if required by the Rules or necessary to prove the facts alleged therein, must be accompanied by supporting affidavits and other papers.
In the motion to recall the notice of levy, the claim of overlevy was not backed up by any supporting papers. The only papers submitted to the trial
court consisted of attachments or annexes of petitioners' reply to respondent's opposition, not of the motion to recall the notice of levy itself. Even
then, said papers consisted of mere photocopies of the following: two appraisal reports by a property consultant firm,49 a Maybank memorandum
dated 17 June 2002 and a safekeeping agreement which showed that the properties were used by petitioners as collateral for loan
transactions.50 Where the subject of inquiry is the contents of the photocopies submitted by petitioners, the original documents themselves should
be presented.51 The photocopies are secondary evidence which are admissible only when the original documents are unavailable, as when they had
been lost or destroyed or cannot otherwise be produced in court.52 As mere photocopies and not originals, and where it had not been
demonstrated that the originals are no longer available, they are not admissible to prove the true market value of the properties.

The appraisal reports valued the properties at the total amount of P912,428,000.00. However, the appraisal reports do not clearly identify, through
lot numbers and TCT numbers, the properties they cover; instead, the properties are broadly described as "land [area in square meters] located at

62
Barangay Quiling, Talisay, Batangas"53 Thus, the general conclusion that the properties covered by the appraisal reports include the subject
properties cannot really be determined from the appraisal reports alone. In fact, in their reply to respondent's opposition, petitioners clarified that
the first appraisal report dated 21 February 2001 covers a piece of property that is actually not among the properties levied upon by the deputy
sheriff and sold at public auction.54

The first appraisal report indicates that the report was based on, among others, a photocopy of the TCT of the property, but the TCT was not
appended to the report submitted to the court for evaluation. What was instead attached is the Maybank memorandum which supposedly
evidenced approval of an application for a domestic letter of credit secured with a P47 million real estate mortgage over the property covered by
TCT No. T-89827. Petitioners claim that the first appraisal report described and appraised the property covered by TCT No. T-89827.55 It should
nonetheless be noted that the property covered by TCT No. T-89827 is not one of the properties levied upon by the deputy sheriff or sold at the
auction sale.

The valuation in the first appraisal report is confirmed by the second appraisal report dated 31 May 2002, petitioners claim, since the second report
also covers properties located in the same area. However, like the other appraisal report, the identification of the particular properties covered by
the second appraisal report cannot be determined. The second report stated that the valuation is premised on the assumption that the property as
pinpointed to the appraisers is the one described in the titles and plans furnished them. However, no such titles or plans are attached to the report
which even acknowledged that the assumptions arrived at were made in the absence of an updated relocation survey and cadastral map from the
assessor's office of Talisay, Batangas.56

Furthermore, it was not demonstrated in either appraisal report that the assumptions on which the valuations were premised--i.e., that the
barangay road fronting the properties would be developed all the way up to Tagaytay-Calamba Road leading to the Palace in the Sky, and that the
Tagaytay Highlands Drive actually bounds the property as claimed by Villarin--were substantiated.

The safekeeping agreement dated 6 March 2001 provided that 16 of petitioner Villarin's properties in Barangay Quiling, Talisay, Batangas, which
are among those levied upon by the deputy sheriff, would be used as security and collateral for the loan of US$75 million obtained from an
international financing corporation. The 16 properties supposedly have an appraised value of P745,615,000.00, equivalent to twenty percent (20%)
of the loan value, or US$15 million. However, aside from the declared values in the document, no other supporting document to establish the fair
market value of these properties was given. It is not even certain if the loan agreement subject of the safekeeping agreement pushed through.

Moreover, the records show that the original loan of P15 million was secured by a real estate mortgage57 over a 47,241-square meter parcel of land
and improvements thereon in Barangay San Jose, Tagaytay City covered by TCT No. T-89829, as well as a guarantee payment bond58 of P15 million
issued by Intra Strata and a mortgage redemption insurance for P16 million.59 For one thing, the real estate mortgage securing the P15 million loan
does not indicate the value of the property mortgaged. And for another, it appears that the parties themselves did not deem the mortgage as
sufficient security. There were additional securities provided by the guarantee payment bond and mortgage redemption insurance.

The records also show that in the compromise agreement subsequently entered into by petitioners, respondent and Intra Strata, the indebtedness
of P15 million plus all interests due was secured by all the mortgages executed over petitioners' real properties in favor of Intra Strata. 60 Said real
properties allegedly refer to the 8 parcels of land indicated in the 13 November 2002 letter.61 However, nothing in the record corroborates this
claim. There is no proof that the properties referred to in paragraph (c) of the compromise agreement are the same 8 parcels of land mentioned in
the letter. Proof of these mortgages and other relevant documents was not even offered.

The burden is on petitioners to prove their claim of overlevy but the evidence they presented is woefully insufficient. Consequently, they failed to
overcome the burden of proof.

As to petitioners' allegation that the Court of Appeals erred in not finding that the 44 parcels of land were sold in bulk and not separately or
individually as required by law, the minutes of auction sale and certificate of sale on execution would show otherwise. These official documents
indicate that the properties were sold individually. We agree with the Court of Appeals that the legal presumption that official duty has been
regularly performed applies especially when petitioners who were duly represented during the auction sale neither objected to the sale nor
claimed immediately thereafter that the properties were sold in bulk.

To stress anew, following the review yardstick in a Rule 45 petition which is reversible error, the Court of Appeals emerges faultless in disregarding
petitioners' evidence. Even if the measure of review is "grave abuse of discretion" as petitioners unknowingly insist, the appellate court should be
sustained still.

WHEREFORE, in view of the foregoing, the petition is DENIED. The Decision dated 31 March 2005 and Resolution dated 11 August 2005 of the
Court of Appeals are AFFIRMED. Costs against petitioners.

SO ORDERED.

63
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
A.M. No. P-11-2972 (Formerly OCA I.P.I. No. 10-3430-P) September 28, 2011
YOLANDA LEACHON CORPUZ, Complainant,
vs.
SERGIO V. PASCUA, Sheriff III. Municipal Trial Court in Cities, Trece Martires City, Cavite. Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
Before the Court is an administrative case for grave abuse of authority and gross ignorance of the law filed by Yolanda Leachon Corpuz (Yolanda)
against Sergio V. Pascua (Pascua), Sheriff III, Municipal Trial Court in Cities (MTCC), Trece Martires City, Cavite.
The facts of the case are as follows:
Upon the complaint of Alicia Panganiban (Panganiban), Criminal Case Nos. 2079 to 2082 for violations of Batas Pambansa Blg. 22 were instituted
against Juanito Corpuz (Juanito) before the MTCC. In an Order1 dated June 16, 2009, the MTCC approved the Compromise Agreement2 dated May
25, 2009 executed between Panganiban and Juanito (in which Juanito promised to pay Panganiban the sum of ₱330,000.00) and dismissed
provisionally Criminal Case Nos. 2079 to 2082. On January 25, 2010, the MTCC allegedly rendered a judgment based on the Compromise Agreement,
but there was no copy of said judgment in the records of this case. When Juanito failed to comply with his obligations under the Compromise
Agreement, Panganiban filed Motions for Execution dated January 4, 2010 and February 25, 2010 of the MTCC judgment. On March 17, 2010, the
MTCC acted favorably on Panganiban’s Motions and issued a Writ of Execution addressed to the Sheriff of the MTCC of Trece Martires City, with the
following decree:
NOW, THEREFORE, you are hereby commanded to proceed to accused Juanito Corpuz who resides at No. 118 Lallana, Trece Martires City, for him to
pay private complainant the amount of Php330,000.00 less the amount of Php50,000.00 allegedly paid for the first installment.
In (sic) the judgment obligor cannot pay all or part of the obligation in cash, certified bank check or other mode of payment acceptable to the
judgment obligee, you shall levy upon the properties of the judgment obligor of every kind and nature whatsoever which may be disposed of for
value and not otherwise exempt for execution, giving the latter, the option to immediately choose which property may be levied upon, sufficient to
satisfy the judgment. If the judgment obligor does not exercise the option, you shall first levy on the personal properties of any and then on the real
properties, if the personal properties are insufficient to answer for the. You shall only (sic) so much of the personal or real property as is sufficient to
satisfy the judgment and lawful fees, and make a report to this Court every thirty (30) days on the proceeding taken, until the judgment is satisfied
in full, or its effectivity expires.3
On June 2, 2010, Yolanda, Juanito’s wife, and her daughter were in her office at the Cavite Provincial Engineering Office of Trece Martires City. At
around three o’clock in the afternoon, Sheriff Pascua arrived at Yolanda’s office and demanded that Yolanda surrender the Toyota Town Ace Noah
with Plate No. 471, which was registered in Yolanda’s name, threatening to damage the said vehicle if Yolanda would refuse to do so. Sheriff Pascua
tried to forcibly open the vehicle. Yolanda called her brother to ask for help. Yolanda’s brother arrived after one hour. Yolanda, with her daughter
and brother, went out of the office to face Sheriff Pascua. Deeply embarrassed and humiliated, and to avoid further indignities, Yolanda surrendered
the key to the vehicle to Sheriff Pascua, but she did not sign any document which Sheriff Pascua asked her to sign.
Offended, humiliated, and embarrassed, Yolanda was compelled to file the present administrative complaint 4 against Sheriff Pascua. In addition to
the aforementioned incident on June 2, 2010, Yolanda alleged in her complaint that Sheriff Pascua kept possession of the vehicle and even used the
same on several occasions for his personal use. Yolanda attached to her complaint pictures to prove that Sheriff Pascua, instead of parking the vehicle
within the court premises, in accordance with the concept of custodia legis, parked the vehicle in the garage of his own house. Yolanda also claimed
that her vehicle was illegally confiscated or levied upon by Sheriff Pascua because the Writ of Execution, which Sheriff Pascua was implementing, was
issued against Juanito, Yolanda’s husband. Yolanda further pointed out that Sheriff Pascua has not yet posted the notice of sale of personal property,
as required by Rule 39, Section 15 of the Rules of Court.
In his Comment,5 Sheriff Pascua denied that he threatened and used force in levying upon the vehicle in question, and avowed that he was the one
maligned when he served the Writ of Execution at Yolanda’s residence on April 21, 2010 and at Yolanda’s office on June 2, 2010. Yolanda delivered
unsavory remarks in an unconscionable manner, maligning Sheriff Pascua in the presence of other people, during both occasions. When Sheriff
Pascua first served the Writ of Execution, Yolanda uttered to him, "Ipaglalaban ko ng patayan kapag kumuha kayo ng gamit dito, matagal ko ng pag-
aari ang mga ito."6
Sheriff Pascua averred that after the levy, he politely informed Yolanda that he would temporarily keep the vehicle at his place as there was no safe
parking within the court premises. The lower floors of the building where the courts are located are being used as classrooms of the Cavite State
University, and the vacant lot thereat serves as parking area for judges, prosecutors, and doctors and staff of the City Health Office. Sheriff Pascua
believed that it was not safe to park the vehicle within the City Hall premises because of his personal experience, when the battery of his owner-type
jeep, parked in the vicinity, was stolen. Sheriff Pascua already stated in the Sheriff’s Return dated June 4, 2010 that he was keeping temporary custody
of Yolanda’s vehicle. He asserted that he never used the vehicle as he owns an owner-type jeep, which he uses for serving writs and other court
processes, as well as for his family’s needs. He likewise contradicted Yolanda’s claim that no public auction has been scheduled. In fact, Yolanda
already received on July 9, 2010 the Notice to Parties of Sheriff’s Public Auction Sale and Notice of Sale of Execution of Personal Property.
Lastly, Sheriff Pascua argued that he only took Yolanda’s vehicle after verification from the Land Transportation Office (LTO) that it was registered in
Yolanda’s name. Yolanda is the wife of Juanito, the accused in Criminal Case Nos. 2079 to 2082, and the vehicle is their conjugal property, which
could be levied upon in satisfaction of a Writ of Execution against Juanito.
Yolanda filed a Reply7 dated September 17, 2010, belying the averments in Sheriff Pascua’s Comment. Yolanda insisted that Sheriff Pascua committed
an error in levying upon the vehicle solely registered in her name to satisfy a Writ of Execution issued against her husband and an impropriety in
parking the vehicle at his (Sheriff Pascua’s) home garage.
In his Rejoinder8 dated October 5, 2010, Sheriff Pascua maintained that he acted in accordance with law. It was not his duty as sheriff to show proof
that the personal property he was levying upon to execute the civil aspect of the judgment was conjugal; rather, the burden fell upon Yolanda to
prove that the said property was paraphernal. Sheriff Pascua further reiterated that he never used Yolanda’s vehicle for his needs. The pictures
submitted by Yolanda only showed that the vehicle was parked at his home garage. No picture or evidence was presented to prove that he used the
vehicle. Sheriff Pascua lastly averred that he had no intention of delaying the public auction of the vehicle and was merely following the proper
procedure for the reasonable appraisal of the same. He had already filed a Notice of Attachment/Levy upon Personal Property with the Register of
Deeds of Trece Martires City, requested certified true copies or photocopies of the Official Receipt and Certificate of Registration of the vehicle to be

64
used for the auction sale, and gave notice of the auction sale to Yolanda six days prior to the scheduled sale. He also gave Yolanda the opportunity
to file a Third-Party Claim or proof that the vehicle was her paraphernal property, but Yolanda failed to file anything until the day of the auction sale.
On November 17, 2010, the Office of the Court Administrator (OCA) submitted its report,9 with the following recommendation:
RECOMMENDATION: Respectfully submitted for consideration of the Honorable Court our recommendation that:
1. The instant administrative complaint be RE-DOCKETED as a regular administrative matter;
2. Sergio V. Pascua, Sheriff III, Municipal Trial Court in Cities, Trece Martires City, Cavite, be REPRIMANDED for impropriety in taking the
vehicle and parking the same at his garage; and
3. Sergio V. Pascua, be SUSPENDED for a period of one (1) month and one (1) day for Simple Neglect of Duty, with a stern warning that a
repetition of the same or similar act shall be dealt with more severely.10
In a Resolution11 dated February 9, 2011, we required the parties to manifest within 10 days from notice if they were willing to submit the matter for
resolution based on the pleadings filed.
Sheriff Pascua12 and Yolanda13 submitted their Manifestations dated April 11, 2011 and April 12, 2011, respectively, stating that they were submitting
the case for resolution based on the pleadings filed.
Resultantly, the case was already submitted for resolution.
After a thorough review of the records, the Court finds that Sheriff Pascua, in levying upon Yolanda’s vehicle even though the judgment and writ he
was implementing were against Juanito, then parking the same vehicle at his home garage, is guilty of simple misconduct.
A sheriff performs a sensitive role in the dispensation of justice. He is duty-bound to know the basic rules in the implementation of a writ of execution
and be vigilant in the exercise of that authority.14
Sheriffs have the ministerial duty to implement writs of execution promptly. Their unreasonable failure or neglect to perform such function
constitutes inefficiency and gross neglect of duty. When writs are placed in the hands of sheriffs, it is their ministerial duty to proceed with reasonable
speed and promptness to execute such writs in accordance with their mandate.15
At the same time, sheriffs are bound to discharge their duties with prudence, caution, and attention which careful men usually exercise in the
management of their affairs. Sheriffs, as officers of the court upon whom the execution of a final judgment depends, must be circumspect and proper
in their behavior.16
In the instant case, Sheriff Pascua failed to live up to the standards of conduct for his position.
Despite the undisputed facts that the MTCC Judgment and Writ of Execution in Criminal Case Nos. 2079 to 2082 were against Juanito only, and the
Toyota Town Ace Noah with Plate No. 471 was registered in Yolanda’s name solely, Sheriff Pascua proceeded to levy upon the vehicle, invoking the
presumption that it was conjugal property.
The power of the court in executing judgments extends only to properties unquestionably belonging to the judgment debtor alone.17 An execution
can be issued only against a party and not against one who did not have his day in court. The duty of the sheriff is to levy the property of the judgment
debtor not that of a third person. For, as the saying goes, one man's goods shall not be sold for another man's debts.18
A sheriff is not authorized to attach or levy on property not belonging to the judgment debtor. The sheriff may be liable for enforcing execution on
property belonging to a third party. If he does so, the writ of execution affords him no justification, for the action is not in obedience to the mandate
of the writ.19
Sheriff Pascua cannot rely on the presumption that the vehicle is the conjugal property of Juanito and Yolanda.
Indeed, Article 160 of the New Civil Code provides that "[a]ll property of the marriage is presumed to belong to the conjugal partnership, unless it be
proved that it pertains exclusively to the husband or to the wife." However, for this presumption to apply, the party who invokes it must first prove
that the property was acquired during the marriage. Proof of acquisition during the coverture is a condition sine qua non to the operation of the
presumption in favor of the conjugal partnership. Thus, the time when the property was acquired is material.20 There is no such proof in the records
of the present case.
Sheriff Pascua’s assertions of diligence do not exculpate him from administrative liability. After inquiry from the LTO, he already discovered that the
vehicle was registered in Yolanda’s name only. This fact should have already prompted Sheriff Pascua to gather more information, such as when
Juanito and Yolanda were married and when did Yolanda acquire the vehicle, which, in turn, would have determined whether or not Sheriff Pascua
could already presume that the said vehicle is conjugal property.
Moreover, when Sheriff Pascua proceeded in levying upon Yolanda’s vehicle, he digressed far from the procedure laid down in Section 9, Rule 39 of
the Rules of Court for the enforcement of judgments, pertinent portions of which read:
SEC. 9. Execution of judgments for money, how enforced. –
(a) Immediate payment on demand. – The officer shall enforce an execution of a judgment for money by demanding from the judgment obligor the
immediate payment of the full amount stated in the writ of execution and all lawful fees. The judgment obligor shall pay in cash, certified bank check
payable to the judgment obligee, or any other form of payment acceptable to the latter, the amount of the judgment debt under proper receipt
directly to the judgment obligee or his authorized representative if present at the time of payment. x x x.
xxxx
(b) Satisfaction by levy. – If the judgment obligor cannot pay all or part of the obligation in cash, certified bank check or other mode of payment
acceptable to the judgment obligee, the officer shall levy upon the properties of the judgment obligor of every kind and nature whatsoever which
may be disposed of for value and not otherwise exempt from execution giving the latter the option to immediately choose which property or part
thereof may be levied upon, sufficient to satisfy the judgment. If the judgment obligor does not exercise the option, the officer shall first levy on the
personal properties, if any, and then on the real properties if the personal properties are insufficient to answer for the judgment. (Underscoring
supplied.)
As the aforequoted provision clearly state, the levy upon the properties of the judgment obligor may be had by the executing sheriff only if the
judgment obligor cannot pay all or part of the full amount stated in the writ of execution. If the judgment obligor cannot pay all or part of the
obligation in cash, certified bank check, or other mode acceptable to the judgment obligee, the judgment obligor is given the option to immediately
choose which of his property or part thereof, not otherwise exempt from execution, may be levied upon sufficient to satisfy the judgment. If the
judgment obligor does not exercise the option immediately, or when he is absent or cannot be located, he waives such right, and the sheriff can now
first levy his personal properties, if any, and then the real properties if the personal properties are insufficient to answer for the judgment. Therefore,

65
the sheriff cannot and should not be the one to determine which property to levy if the judgment obligor cannot immediately pay because it is the
judgment obligor who is given the option to choose which property or part thereof may be levied upon to satisfy the judgment.21
In this case, Sheriff Pascua totally ignored the established procedural rules. Without giving Juanito the opportunity to either pay his obligation under
the MTCC judgment in cash, certified bank check, or any other mode of payment acceptable to Panganiban; or to choose which of his property may
be levied upon to satisfy the same judgment, Sheriff Pascua immediately levied upon the vehicle that belonged to Juanito’s wife, Yolanda.
To make matters worse, Sheriff Pascua parked the vehicle at his home garage, believing that the parking area within the court premises was unsafe
based on his personal experience.
In previous administrative cases, sheriffs had already proffered the same excuse, i.e., lack of court storage facilities for the property attached or
levied upon, so as to justify their delivery of the said property to the party-creditors. In Caja v. Nanquil,22 we rejected the excuse, thus:
Respondent sheriff argues that he never delivered said personal properties to the judgment creditor but merely kept the same in a secured place
owned by the latter. He brought them there because the Sheriff’s Office and the Regional Trial Court of Olongapo City had no warehouse or place to
keep levied personal properties. In support thereto, he presented John Aquino, Clerk of Court of the Regional Trial Court of Olongapo City, who
testified that they have no designated warehouse or building where sheriffs can keep levied personal properties. In so far as large motor vehicles,
the practice as to where to keep them is left at the discretion of the sheriff.
Respondent sheriff’s argument that he kept the levied personal properties at the judgment creditor’s place because the Regional Trial Court of
Olongapo City does not have any warehouse or place to keep the same does not hold water. A levying officer must keep the levied properties securely
in his custody. The levied property must be in the substantial presence and possession of the levying officer who cannot act as special deputy of any
party litigant. They should not have been delivered to any of the parties or their representative. The court’s lack of storage facility to house the
attached properties is no justification. Respondent sheriff could have deposited the same in a bonded warehouse or could have sought prior
authorization from the court that issued the writ of execution.23 (Underscoring supplied.)
Sheriff Pascua’s explanation for parking Yolanda’s vehicle at his home garage is just as unacceptable.1âwphi1 Granted that it was unsafe to park the
vehicle within the court premises, Sheriff Pascua should have kept the said vehicle in a bonded warehouse or sought prior authorization from the
MTCC to park the same at another place. Although there is no evidence that Sheriff Pascua had also used the vehicle, the Court understands how
easy it is for other people to suspect the same because the vehicle was parked at his home garage. Sheriff Pascua’s actuations smacked of
unprofessionalism, blurring the line between his official functions and his personal life.
Time and again, the Court has held that sheriffs and deputy sheriffs play a significant role in the administration of justice. They are primarily
responsible for the execution of a final judgment which is "the fruit and end of the suit and is the life of the law."24 Thus, sheriffs must at all times
show a high degree of professionalism in the performance of their duties. As officers of the court, they are expected to uphold the norm of public
accountability and to avoid any kind of behavior that would diminish or even just tend to diminish the faith of the people in the judiciary.25 Measured
against these standards, Sheriff Pascua disappointingly fell short.
The OCA recommends that Sheriff Pascua be held administratively liable for impropriety and simple neglect of duty. The Court though determines
that Sheriff Pascua’s improper actions more appropriately constitute simple misconduct. Misconduct is a transgression of an established rule of
action. More particularly, misconduct is the unlawful behavior of a public officer. It means the "intentional wrongdoing or deliberate violation of a
rule of law or standard of behavior, especially by a government official."26 In order for misconduct to constitute an administrative offense, it should
be related to or connected with the performance of the official functions and duties of a public officer.27
Under Section 22, Rule XIV of the Omnibus Rules Implementing Book V of Executive Order No. 292 (otherwise known as The Administrative Code of
1987) and Section 52(B)(2), Rule IV of the Revised Uniform Rules on Administrative Cases in the Civil Service, simple misconduct is a less grave offense
with a penalty ranging from suspension for one (1) month and one (1) day to six (6) months for the first offense, and dismissal for the second offense.
WHEREFORE, respondent Sheriff Sergio V. Pascua is found GUILTY of simple misconduct and is SUSPENDED for TWO (2) MONTHS WITHOUT PAY,
with a stern warning that a repetition of the same or similar act shall be dealt with more severely.
SO ORDERED.

66
 FIRST DIVISION
G.R. No. 164740 July 31, 2006
SPOUSES EDUARDO and ELSA VERSOLA, petitioners,
vs.
HON. COURT OF APPEALS, SHERIFF REYNALDO B. MADOLARIA, JUDGE LYDIA QUERUBIN LAYOSA BOTH OF THE REGIONAL TRIAL COURT OF
QUEZON CITY, BRANCH 217, REGISTER OF DEEDS OF QUEZON CITY AND DR. VICTORIA T. ONG, OH, respondents.
DECISION
CHICO-NAZARIO, J.:
This Petition for Review under Rule 45 of the Rules of Court, filed by petitioners spouses Eduardo and Elsa Versola, seeks to nullify and set aside the
28 April 2004 Decision1 and 28 July 2004 Resolution of the Court of Appeals in CA-G.R. SP No. 79300, which affirmed the Orders dated 6 January 2003
and 14 July 2003 of the Regional Trial Court (RTC) of Quezon City, Branch 217, in Civil Case No. Q-93-16003.
This case has its genesis from a loan transaction entered into by private respondent Dr. Victoria T. Ong Oh and a certain Dolores Ledesma, wherein
the former granted a P1,000,000.00 loan to the latter. As a security for said loan, Ledesma issued to private respondent a check for the same amount
dated 10 February 1993 and promised to execute a deed of real estate mortgage over her house and lot located at Tandang Sora, Quezon City,
covered by Transfer Certificate of Title (TCT) No. RT-51142. The execution of the deed of real estate mortgage did not materialize, but Ledesma
delivered the owner's duplicate copy of the TCT No. RT-51142 to private respondent.
Thereafter, Ledesma sold the said house and lot to petitioners for P2,500,000.00. Petitioners paid Ledesma P1,000,000.00 as downpayment, with
the remaining balance of P1,500,000.00 to be paid in monthly installments of P75,000.002 starting 15 March 1993. Even before the monthly
installments became due, Ledesma already asked petitioners to pay the remaining balance of P1,500,000.00. Petitioners, however, were only able
to pay the amount of P50,000.00 to Ledesma. To raise the full amount that Ledesma demanded, petitioners applied for a loan with Asiatrust Bank,
Inc. (Asiatrust) in the amount of P2,000,000.00. In the course of the application for said loan, petitioners, private respondent, and Ledesma convened
with Asiatrust to arrive at a scheme to settle the obligation of Ledesma to private respondent and the obligation of petitioners to Ledesma. After the
meeting, the following agreement3 was arrived at: (1) private respondent would grant Ledesma an additional loan of P450,000.00, making the latter's
loan from the former amount to P1,450,000.00 (the amount of P1,450,000.00 would then be credited to petitioners as full settlement of the purchase
price of the property); (2) Ledesma would execute a Deed of Sale transferring ownership over her house and lot, covered by TCT No. RT-51142, to
petitioners; (3) private respondent would then deliver the duplicate copy of TCT No. RT-51142 to Asiatrust; (4) once petitioners had secured a title
to the said house and lot in their names, they would execute a real estate mortgage over it in favor of Asiatrust to secure their loan of P2,000,000.00;
and (5) Asiatrust would then grant a loan of P2,000,000.00 to petitioners with a written guarantee that the P1,500,000.00 would be given directly by
Asiatrust to private respondent after the mortgage lien of Asiatrust would have been annotated on the title of the said property.
In keeping with the foregoing agreement, private respondent granted Ledesma an additional loan of P450,000.00. Ledesma, in turn, executed a Deed
of Sale transferring the title of the subject property to petitioners. Private respondent then delivered the title of the said property to Asiatrust. The
Deed of Sale was registered and TCT No. RT-51142 in the name of Ledesma was cancelled and a new one, TCT No. 83104, was issued in the names of
petitioners. Thereafter, Asiatrust approved the loan application of petitioners, after which the latter issued a check in the amount of P1,500,000.00
to private respondent. However, when Asiatrust tried to register the Real Estate Mortgage covering the subject property executed in its favor by
petitioners, it discovered a notice of levy on execution was annotated on the title in connection with Ledesma's obligation to a certain Miladay's
Jewels, Inc., in the amount of P214,284.00. Because of this annotated encumbrance, Asiatrust did not register said Real Estate Mortgage and refused
to release the P2,000,000.00 loan of petitioners. When private respondent presented Ledesma's check for payment, the same was dishonored for
the reason that the account was already closed. Subsequently, when private respondent presented for payment the check issued by petitioners, the
said check was likewise dishonored because there was a stop payment order. With the dishonor of the checks and with Asiatrust's refusal to release
the P2,000,000.00 loan of petitioners, private respondent came away empty-handed as she did not receive payment for the P1,500,000.00 loan she
granted to Ledesma that was assumed by petitioners. As a result, private respondent filed a Complaint for Sum of Money against Ledesma,
petitioners, and Asiatrust before the RTC, Branch 217, Quezon City, docketed as Civil Case No. Q-93-16003.
After trial, the RTC, in a Decision dated 31 May 1996, rendered a verdict in favor of private respondent and against petitioners, the dispositive portion
of which reads:
Wherefore, in view of the foregoing, judgment is hereby rendered in favor of the plaintiff Dr. Victoria Ong Oh and against defendant-
spouses Eduardo and Elsa Versola. The appellants Versolas are hereby ordered to pay to Dr. Victoria Ong Oh the following:
a) the sum of one million five hundred thousand pesos (P1,500,000.00) plus legal interest to be computed from the time of judicial demand;
b) one hundred thousand pesos (P100,000.00) as moral damages and fifty thousand pesos (P50,000.00) as exemplary damages; and,
c) attorney's fees of one hundred thousand pesos (P100,000.00).4
Undaunted, petitioners appealed the trial court's Decision to the Court of Appeals, with the appeal docketed as CA-G.R. CV No. 54399.
In a Decision dated 30 August 1999, the Court of Appeals rendered a judgment affirming the Decision of the trial court, but modifying the award of
moral, exemplary damages and attorney's fees by deleting the same, to wit:
WHEREFORE, the appealed Decision is hereby MODIFIED in this wise: the Court orders appellants spouses Eduardo and Elsa Versola to pay
appellee Victoria T. Ong Oh One Million Five Hundred Thousand (P1,500,000.00) Pesos with legal interest from March 24, 1993.5
No appeal having been filed, the foregoing Decision attained finality.
On 3 April 2000, private respondent filed a Motion for Execution with the trial court, the latter granted the same in an Order dated 14 April 2000. On
23 June 2000, the property covered by TCT No. 83104, in the names of petitioners, was levied upon. The sheriff set the sale of the property at public
auction on 19 September 2000. Petitioners were served a copy of the notice of the sale. On 18 September 2000, petitioners filed with the sheriff an
"Objection/Exception to the Sheriff's Sale of Defendant Sps. Eduardo and Elsa Versola's Family Home Pending Court Order or Clearance." Despite
petitioners' objections, however, the property was still sold at public auction on 19 September 2000 and was awarded to private respondent at the
bid price of P2,835,000.00.
For failure of petitioners to redeem the property during the redemption period, a Sheriff's Final Deed of Sale was issued in favor of private respondent
on 19 March 2002.
On 5 August 2002, private respondent filed with the trial court an Ex-parte Motion for Issuance of Confirmation of Judicial Sale of Real Property of
Sps. Eduardo and Elsa Versola. Petitioners opposed the said motion on the following grounds: (1) the property sold at the public auction is the family
home of petitioners which is exempt from execution pursuant to Article 155 of the Family Code; (2) no application was made by private respondent

67
for the determination of the value of their family home to be subjected to execution, as required under Article 160 of the Family Code; and (3) there
were serious defects in the conduct of the execution sale.
In an Order dated 6 January 2003, the trial court debunked petitioners' arguments, and granted private respondent's Ex-parte Motion and confirmed
the Sheriff's Final Deed of Sale.
In an Order dated 14 July 2003, the trial court denied the Motion for Reconsideration filed by petitioners.
Petitioners then filed a Petition for Certiorari before the Court of Appeals, docketed as CA-G.R. SP No. 79300, alleging grave abuse of discretion on
the part of the trial court Judge in confirming the judicial sale of their family home.
In a Decision dated 28 April 2004, the Court of Appeals dismissed the Petition for lack of merit. A Motion for Reconsideration thereof was filed, but
was denied by the Court of Appeals in a Resolution dated 28 July 2004.
Hence, the instant Petition.
Petitioners submit the following issues for the Court's consideration:
A. WHETHER OR NOT COMPLIANCE ON (sic) THE PROVISIONS OF THE FAMILY CODE SPECIFICALLY ARTICLES 152 TO 160 IN RELATION TO
THE PROVISION OF ARTICLE III SECTION 1 OF THE CONSTITUTION, IS MANDATORY; and
B. WHETHER OR NOT THE PROVISION UNDER ARTICLE 160 REQUIRING AN APPLICATION TO THE COURT FOR AN ORDER DIRECTING THE
AUCTION SALE OF A FAMILY HOME IS MANDATORY AND A CONDITION SINE QUA NON THAT MUST BE COMPLIED WITH PRIOR TO THE
AUCTION SALE. 6
Petitioners aver that prior to the auction sale of their family home, they registered their opposition and objection to the same by filing with the trial
court an "Urgent Motion to Suspend Auction Sale on the Property of Defendants under TCT No. 83104 located at Sunville Subdivision, Quezon City,"
dated 12 September 2000 which was admittedly treated by the court as a "mere scrap of paper and is deemed not filed." They also claim that a day
before the scheduled auction sale, they filed with the sheriff of the trial court an "Objection/Exception to the Sheriff's Sale of Defendant Sps. Eduardo
and Elsa Versola's Family Home Pending Court Order or Clearance" which the latter disregarded. Petitioners maintain that said objection to the sale
was based on the fact that there was no order or clearance from the trial court for the sheriff to proceed with the auction sale, in clear violation of
Article 160 of the Family Code, which requires an application by the creditor and a determination of the actual value of the family home by the court
ordering the sale of property under execution.
It was likewise contended by petitioners that there were serious defects in the conduct of the execution sale, namely, the sheriff based the execution
on the dispositive portion of the Decision of the RTC and not the modified Decision of the Court of Appeals, and that there were no documents
proving the amount of execution sale and the determination of the proceeds.
On the other hand, the trial court found that the allegations of serious defects in the sheriff's conduct of the execution sale are unfounded. According
to the trial court, although the sheriff inadvertently quoted the decision of the trial court in the "Sheriff's Final Deed of Sale" dated 19 March 2002,
the "Statement of Accounts" submitted by private respondent, as well as the computation of the sheriff showed that the auction sale was based on
the decision of the Court of Appeals. The bid price amounted to P2,835,000.00, P1,500,000.00 thereof representing the principal amount owed by
petitioners to private respondent while the remaining P1,335,000.00 represented the legal interest of 12% counted from 24 March 1993 up to 24
August 2000.
As to the allegation that the sheriff failed to act on petitioners' Objection/Exception to Sheriff's Sale of Defendant Sps. Eduardo and Elsa Versola's
Family Home, the trial court ratiocinated that such inaction of the sheriff was justified since petitioners never filed any motion before the said court
to hold in abeyance the impending auction sale. Accordingly, it held that it was correct for the sheriff to proceed with the auction sale as there will
be no order forthcoming to suspend the sale absent any motion from petitioners.
Finally, the trial court criticized petitioner's claim that the subject property was their family home. The court opined that the claim was never
substantiated by petitioners aside from the fact that they asserted this defense only after two years since the auction sale has transpired. It added
that if not for the private respondent's Ex-parte Motion for Issuance of Confirmation of Judicial Sale of Real Property of Sps. Eduardo and Elsa Versola
filed on 5 August 2002, petitioners would not have raised the issue of family home before the said court.
The issue in the main is whether or not petitioners timely raised and proved that their property is exempt from execution.
Article 153 of the Family Code provides:
The family home is deemed constituted on a house and lot from the time it is occupied as the family residence. From the time of its
constitution and so long as its beneficiaries resides therein, the family home continues to be such and is exempt from execution, forced
sale or attachment except as hereinafter provided and to the extent of the value allowed by law.
Under the cited provision, a family home is deemed constituted on a house and lot from the time it is occupied as a family residence; there is no
need to constitute the same judicially or extrajudicially. 7
The settled rule is that the right to exemption or forced sale under Article 153 of the Family Code is a personal privilege granted to the judgment
debtor and as such, it must be claimed not by the sheriff, but by the debtor himself before the sale of the property at public auction.8 It is not sufficient
that the person claiming exemption merely alleges that such property is a family home. This claim for exemption must be set up and proved to the
Sheriff.9 Failure to do so would estop the party from later claiming the exception. 10
In the case under consideration, petitioners allegedly filed with the trial court an "Urgent Motion to Suspend Auction Sale on the Property of
Defendants under TCT No. 83104 located at Sunville Subdivision, Quezon City" which was dated 12 September 2000. The said motion was filed before
19 September 2000, the scheduled date for the sale of the subject property at public auction. The records of the case, however, do not disclose that
petitioners in the said motion set up and proved that the property to be sold was their family home. In any event, said motion was treated by the
trial court as a mere scrap of paper presumably on the ground that such motion did not contain a notice of hearing. 11 As we have repeatedly held, a
motion that does not contain a notice of hearing is a mere scrap of paper, it presents no question which merits the attention of the court.12 Being a
mere scrap of paper, the trial court had no alternative but to disregard it. 13 Such being the case, it was as if no opposition to the auction sale was
filed.
On the day immediately prior to the scheduled sale of the subject property, petitioners filed with the sheriff an Objection/Exception to Sheriff's Sale
of Defendant Sps. Eduardo and Elsa Versola's Family Home. Petitioners simply alleged there that the property subject of the intended auction sale
was their family home. Instead of substantiating their claim, petitioners languidly presupposed that the sheriff had prior knowledge that the said
property was constituted by them as their family home. Lamentably, in the said objection, petitioners did not set forth therein any evidence to
substantiate their claim that the property to be sold at the execution sale was indeed exempt for having been constituted as a family home. The
objection read:

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 "Evidently, a court determination of the value of the family home is indispensable for the same to be subjected to execution sale, and more
importantly, the judgment creditor has to apply for a court order direction (sic) auction sale of said judicial home.
Your good office, thru you, has PRIOR knowledge of the fact that the real property subject of the intended auction sale is the family home
being occupied by the Defendants Spouses Eduardo and Elsa Versola.
Allow us to enter our objection/exception to the auction sale which is without the benefit of a court order. We accordingly ask that the sale
be suspended/held in abeyance pending the court order directing the sale of the family home." 14 (Underscoring supplied.)
It was only after almost two years from the time of the execution sale and after the "Sheriff's Final Deed of Sale" was issued did petitioners rigorously
claim in their Opposition to private respondent's Ex-parte Motion for Issuance of Confirmation of Judicial Sale of Real Property of Sps. Eduardo and
Elsa Versola that the property in question is exempt from execution. Even then, there was no showing that petitioners adduced evidence to prove
that it is indeed a family home.
In the case of Honrado v. Court of Appeals,15 the family home of the petitioner therein was levied upon to answer for his judgment debt, and the sale
of the said property was set. Petitioner was served with a copy of the notice of sale which he opposed. Petitioner, however, allowed the sale at the
public auction to proceed and the Sheriff to execute a certificate of sale over the property in favor of the private respondent therein. The petitioner
remained silent and failed to seek relief from the Sheriff or the court until after almost one year from the date of the auction sale when he filed his
motion to declare the property exempt from execution. But even in the said motion, petitioner did not present evidence that the property was a
family home. Finding that petitioner's claim of exemption was not substantiated and was filed belatedly, the Court therein ruled:
While it is true that the family home is constituted on a house and lot from the time it is occupied as a family residence and is exempt from
execution or forced sale under Article 153 of the Family Code, such claim for exemption should be set up and proved to the Sheriff before
the sale of the property at public auction. Failure to do so would estop the party from later claiming the exemption x x x. 16 (Emphasis
supplied.)
In view of the facts obtaining in this case, and taking into consideration the applicable jurisprudence on the matter, the Court finds that petitioners'
assertion for exemption is a mere afterthought, a sheer artifice to deprive private respondent of the fruits of the verdict of her case.
As the Court aptly inculcated:
Certainly, reasonable time, for purposes of the law on exemption, does not mean a time after the expiration of the one-year period provided
for in Section 30 of Rule 39 of the Rules of Court for judgment debtors to redeem the property sold on execution, otherwise it would render
nugatory final bills of sale on execution and defeat the very purpose of execution – to put an end to litigation. We said before, and We
repeat it now, that litigation must end and terminate sometime and somewhere, and it is essential to an effective administration of justice
that, once a judgment has become final, the winning party be not, through a mere subterfuge, deprived of the fruits of the verdict. x x x .17
WHEREFORE, the petition is DENIED. The judgment of the Court of Appeals dismissing the petition in CA-G.R. SP No. 79300, for lack of merit, is
hereby AFFIRMED. Costs against petitioners.
SO ORDERED.

69
 SECOND DIVISION
G.R. No. 124642 February 23, 2004
ALFREDO CHING and ENCARNACION CHING, petitioners
vs.
THE HON. COURT OF APPEALS and ALLIED BANKING CORPORATION, respondents.
DECISION
CALLEJO, SR., J.:
This petition for review, under Rule 45 of the Revised Rules of Court, assails the Decision 1 of the Court of Appeals (CA) dated November 27, 1995 in
CA-G.R. SP No. 33585, as well as the Resolution2 on April 2, 1996 denying the petitioners’ motion for reconsideration. The impugned decision granted
the private respondent’s petition for certiorari and set aside the Orders of the trial court dated December 15, 19933 and February 17, 19944 nullifying
the attachment of 100,000 shares of stocks of the Citycorp Investment Philippines under the name of petitioner Alfredo Ching.
The following facts are undisputed:
On September 26, 1978, the Philippine Blooming Mills Company, Inc. (PBMCI) obtained a loan of ₱9,000,000.00 from the Allied Banking Corporation
(ABC). By virtue of this loan, the PBMCI, through its Executive Vice-President Alfredo Ching, executed a promissory note for the said amount promising
to pay on December 22, 1978 at an interest rate of 14% per annum. 5 As added security for the said loan, on September 28, 1978, Alfredo Ching,
together with Emilio Tañedo and Chung Kiat Hua, executed a continuing guaranty with the ABC binding themselves to jointly and severally guarantee
the payment of all the PBMCI obligations owing the ABC to the extent of ₱38,000,000.00.6 The loan was subsequently renewed on various dates, the
last renewal having been made on December 4, 1980.7
Earlier, on December 28, 1979, the ABC extended another loan to the PBMCI in the amount of ₱13,000,000.00 payable in eighteen months at 16%
interest per annum. As in the previous loan, the PBMCI, through Alfredo Ching, executed a promissory note to evidence the loan maturing on June
29, 1981.8 This was renewed once for a period of one month.9
The PBMCI defaulted in the payment of all its loans. Hence, on August 21, 1981, the ABC filed a complaint for sum of money with prayer for a writ of
preliminary attachment against the PBMCI to collect the ₱12,612,972.88 exclusive of interests, penalties and other bank charges. Impleaded as co-
defendants in the complaint were Alfredo Ching, Emilio Tañedo and Chung Kiat Hua in their capacity as sureties of the PBMCI.
The case was docketed as Civil Case No. 142729 in the Regional Trial Court of Manila, Branch XVIII. 10 In its application for a writ of preliminary
attachment, the ABC averred that the "defendants are guilty of fraud in incurring the obligations upon which the present action is brought11 in that
they falsely represented themselves to be in a financial position to pay their obligation upon maturity thereof." 12 Its supporting affidavit stated, inter
alia, that the "[d]efendants have removed or disposed of their properties, or [are] ABOUT to do so, with intent to defraud their creditors."13
On August 26, 1981, after an ex-parte hearing, the trial court issued an Order denying the ABC’s application for a writ of preliminary attachment. The
trial court decreed that the grounds alleged in the application and that of its supporting affidavit "are all conclusions of fact and of law" which do not
warrant the issuance of the writ prayed for.14 On motion for reconsideration, however, the trial court, in an Order dated September 14, 1981,
reconsidered its previous order and granted the ABC’s application for a writ of preliminary attachment on a bond of ₱12,700,000. The order, in
relevant part, stated:
With respect to the second ground relied upon for the grant of the writ of preliminary attachment ex-parte, which is the alleged disposal of properties
by the defendants with intent to defraud creditors as provided in Sec. 1(e) of Rule 57 of the Rules of Court, the affidavits can only barely justify the
issuance of said writ as against the defendant Alfredo Ching who has allegedly bound himself jointly and severally to pay plaintiff the defendant
corporation’s obligation to the plaintiff as a surety thereof.
WHEREFORE, let a writ of preliminary attachment issue as against the defendant Alfredo Ching requiring the sheriff of this Court to attach all the
properties of said Alfredo Ching not exceeding ₱12,612,972.82 in value, which are within the jurisdiction of this Court and not exempt from execution
upon, the filing by plaintiff of a bond duly approved by this Court in the sum of Twelve Million Seven Hundred Thousand Pesos (₱12,700,000.00)
executed in favor of the defendant Alfredo Ching to secure the payment by plaintiff to him of all the costs which may be adjudged in his favor and all
damages he may sustain by reason of the attachment if the court shall finally adjudge that the plaintiff was not entitled thereto.
SO ORDERED.15
Upon the ABC’s posting of the requisite bond, the trial court issued a writ of preliminary attachment. Subsequently, summonses were served on the
defendants,16 save Chung Kiat Hua who could not be found.
Meanwhile, on April 1, 1982, the PBMCI and Alfredo Ching jointly filed a petition for suspension of payments with the Securities and Exchange
Commission (SEC), docketed as SEC Case No. 2250, at the same time seeking the PBMCI’s rehabilitation. 17
On July 9, 1982, the SEC issued an Order placing the PBMCI’s business, including its assets and liabilities, under rehabilitation receivership, and
ordered that "all actions for claims listed in Schedule "A" of the petition pending before any court or tribunal are hereby suspended in whatever stage
the same may be until further orders from the Commission."18 The ABC was among the PBMCI’s creditors named in the said schedule.
Subsequently, on January 31, 1983, the PBMCI and Alfredo Ching jointly filed a Motion to Dismiss and/or motion to suspend the proceedings in Civil
Case No. 142729 invoking the PBMCI’s pending application for suspension of payments (which Ching co-signed) and over which the SEC had already
assumed jurisdiction.19 On February 4, 1983, the ABC filed its Opposition thereto.20
In the meantime, on July 26, 1983, the deputy sheriff of the trial court levied on attachment the 100,000 common shares of Citycorp stocks in the
name of Alfredo Ching.21
Thereafter, in an Order dated September 16, 1983, the trial court partially granted the aforementioned motion by suspending the proceedings only
with respect to the PBMCI. It denied Ching’s motion to dismiss the complaint/or suspend the proceedings and pointed out that P.D. No. 1758 only
concerns the activities of corporations, partnerships and associations and was never intended to regulate and/or control activities of individuals.
Thus, it directed the individual defendants to file their answers. 22
Instead of filing an answer, Ching filed on January 14, 1984 a Motion to Suspend Proceedings on the same ground of the pendency of SEC Case No.
2250. This motion met the opposition from the ABC.23
On January 20, 1984, Tañedo filed his Answer with counterclaim and cross-claim.24 Ching eventually filed his Answer on July 12, 1984.25
On October 25, 1984, long after submitting their answers, Ching filed an Omnibus Motion, 26 again praying for the dismissal of the complaint or
suspension of the proceedings on the ground of the July 9, 1982 Injunctive Order issued in SEC Case No. 2250. He averred that as a surety of the
PBMCI, he must also necessarily benefit from the defenses of his principal. The ABC opposed Ching’s omnibus motion.

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Emilio Y. Tañedo, thereafter, filed his own Omnibus Motion27 praying for the dismissal of the complaint, arguing that the ABC had "abandoned and
waived" its right to proceed against the continuing guaranty by its act of resorting to preliminary attachment.
On December 17, 1986, the ABC filed a Motion to Reduce the amount of his preliminary attachment bond from ₱12,700,000 to ₱6,350,000.28 Alfredo
Ching opposed the motion,29 but on April 2, 1987, the court issued an Order setting the incident for further hearing on May 28, 1987 at 8:30 a.m. for
the parties to adduce evidence on the actual value of the properties of Alfredo Ching levied on by the sheriff. 30
On March 2, 1988, the trial court issued an Order granting the motion of the ABC and rendered the attachment bond of ₱6,350,000.31
On November 16, 1993, Encarnacion T. Ching, assisted by her husband Alfredo Ching, filed a Motion to Set Aside the levy on attachment. She alleged
inter alia that the 100,000 shares of stocks levied on by the sheriff were acquired by her and her husband during their marriage out of conjugal funds
after the Citycorp Investment Philippines was established in 1974. Furthermore, the indebtedness covered by the continuing
guaranty/comprehensive suretyship contract executed by petitioner Alfredo Ching for the account of PBMCI did not redound to the benefit of the
conjugal partnership. She, likewise, alleged that being the wife of Alfredo Ching, she was a third-party claimant entitled to file a motion for the release
of the properties.32 She attached therewith a copy of her marriage contract with Alfredo Ching.33
The ABC filed a comment on the motion to quash preliminary attachment and/or motion to expunge records, contending that:
2.1 The supposed movant, Encarnacion T. Ching, is not a party to this present case; thus, she has no personality to file any motion before
this Honorable Court;
2.2 Said supposed movant did not file any Motion for Intervention pursuant to Section 2, Rule 12 of the Rules of Court;
2.3 Said Motion cannot even be construed to be in the nature of a Third-Party Claim conformably with Sec. 14, Rule 57 of the Rules of
Court.
3. Furthermore, assuming in gracia argumenti that the supposed movant has the required personality, her Motion cannot be acted upon by this
Honorable Court as the above-entitled case is still in the archives and the proceedings thereon still remains suspended. And there is no previous
Motion to revive the same.34
The ABC also alleged that the motion was barred by prescription or by laches because the shares of stocks were in custodia legis.
During the hearing of the motion, Encarnacion T. Ching adduced in evidence her marriage contract to Alfredo Ching to prove that they were married
on January 8, 1960;35 the articles of incorporation of Citycorp Investment Philippines dated May 14, 1979;36 and, the General Information Sheet of
the corporation showing that petitioner Alfredo Ching was a member of the Board of Directors of the said corporation and was one of its top twenty
stockholders.
On December 10, 1993, the Spouses Ching filed their Reply/Opposition to the motion to expunge records.
Acting on the aforementioned motion, the trial court issued on December 15, 1993 an Order37 lifting the writ of preliminary attachment on the shares
of stocks and ordering the sheriff to return the said stocks to the petitioners. The dispositive portion reads:
WHEREFORE, the instant Motion to Quash Preliminary Attachment, dated November 9, 1993, is hereby granted. Let the writ of preliminary
attachment subject matter of said motion, be quashed and lifted with respect to the attached 100,000 common shares of stock of Citycorp Investment
Philippines in the name of the defendant Alfredo Ching, the said shares of stock to be returned to him and his movant-spouse by Deputy Sheriff
Apolonio A. Golfo who effected the levy thereon on July 26, 1983, or by whoever may be presently in possession thereof.
SO ORDERED.38
The plaintiff Allied Banking Corporation filed a motion for the reconsideration of the order but denied the same on February 17, 1994. The petitioner
bank forthwith filed a petition for certiorari with the CA, docketed as CA-G.R. SP No. 33585, for the nullification of the said order of the court,
contending that:
1. The respondent Judge exceeded his authority thereby acted without jurisdiction in taking cognizance of, and granting a "Motion" filed
by a complete stranger to the case.
2. The respondent Judge committed a grave abuse of discretion in lifting the writ of preliminary attachment without any basis in fact and
in law, and contrary to established jurisprudence on the matter.39
On November 27, 1995, the CA rendered judgment granting the petition and setting aside the assailed orders of the trial court, thus:
WHEREFORE, premises considered, the petition is GRANTED, hereby setting aside the questioned orders (dated December 15, 1993 and February 17,
1994) for being null and void.
SO ORDERED.40
The CA sustained the contention of the private respondent and set aside the assailed orders. According to the CA, the RTC deprived the private
respondent of its right to file a bond under Section 14, Rule 57 of the Rules of Court. The petitioner Encarnacion T. Ching was not a party in the trial
court; hence, she had no right of action to have the levy annulled with a motion for that purpose. Her remedy in such case was to file a separate
action against the private respondent to nullify the levy on the 100,000 Citycorp shares of stocks. The court stated that even assuming that
Encarnacion T. Ching had the right to file the said motion, the same was barred by laches.
Citing Wong v. Intermediate Appellate Court,41 the CA ruled that the presumption in Article 160 of the New Civil Code shall not apply where, as in
this case, the petitioner-spouses failed to prove the source of the money used to acquire the shares of stock. It held that the levied shares of stocks
belonged to Alfredo Ching, as evidenced by the fact that the said shares were registered in the corporate books of Citycorp solely under his name.
Thus, according to the appellate court, the RTC committed a grave abuse of its discretion amounting to excess or lack of jurisdiction in issuing the
assailed orders. The petitioners’ motion for reconsideration was denied by the CA in a Resolution dated April 2, 1996.
The petitioner-spouses filed the instant petition for review on certiorari, asserting that the RTC did not commit any grave abuse of discretion
amounting to excess or lack of jurisdiction in issuing the assailed orders in their favor; hence, the CA erred in reversing the same. They aver that the
source of funds in the acquisition of the levied shares of stocks is not the controlling factor when invoking the presumption of the conjugal nature of
stocks under Art. 160,42 and that such presumption subsists even if the property is registered only in the name of one of the spouses, in this case,
petitioner Alfredo Ching.43 According to the petitioners, the suretyship obligation was not contracted in the pursuit of the petitioner-husband’s
profession or business.44 And, contrary to the ruling of the CA, where conjugal assets are attached in a collection suit on an obligation contracted by
the husband, the wife should exhaust her motion to quash in the main case and not file a separate suit.45 Furthermore, the petitioners contend that
under Art. 125 of the Family Code, the petitioner-husband’s gratuitous suretyship is null and void ab initio,46 and that the share of one of the spouses
in the conjugal partnership remains inchoate until the dissolution and liquidation of the partnership. 47

71
In its comment on the petition, the private respondent asserts that the CA correctly granted its petition for certiorari nullifying the assailed order. It
contends that the CA correctly relied on the ruling of this Court in Wong v. Intermediate Appellate Court. Citing Cobb-Perez v. Lantin and G-Tractors,
Inc. v. Court of Appeals, the private respondent alleges that the continuing guaranty and suretyship executed by petitioner Alfredo Ching in pursuit
of his profession or business. Furthermore, according to the private respondent, the right of the petitioner-wife to a share in the conjugal partnership
property is merely inchoate before the dissolution of the partnership; as such, she had no right to file the said motion to quash the levy on attachment
of the shares of stocks.
The issues for resolution are as follows: (a) whether the petitioner-wife has the right to file the motion to quash the levy on attachment on the
100,000 shares of stocks in the Citycorp Investment Philippines; (b) whether or not the RTC committed a grave abuse of its discretion amounting to
excess or lack of jurisdiction in issuing the assailed orders.
On the first issue, we agree with the petitioners that the petitioner-wife had the right to file the said motion, although she was not a party in Civil
Case No. 142729.48
In Ong v. Tating,49 we held that the sheriff may attach only those properties of the defendant against whom a writ of attachment has been issued by
the court. When the sheriff erroneously levies on attachment and seizes the property of a third person in which the said defendant holds no right or
interest, the superior authority of the court which has authorized the execution may be invoked by the aggrieved third person in the same case.
Upon application of the third person, the court shall order a summary hearing for the purpose of determining whether the sheriff has acted rightly
or wrongly in the performance of his duties in the execution of the writ of attachment, more specifically if he has indeed levied on attachment and
taken hold of property not belonging to the plaintiff. If so, the court may then order the sheriff to release the property from the erroneous levy and
to return the same to the third person. In resolving the motion of the third party, the court does not and cannot pass upon the question of the title
to the property with any character of finality. It can treat the matter only insofar as may be necessary to decide if the sheriff has acted correctly or
not. If the claimant’s proof does not persuade the court of the validity of the title, or right of possession thereto, the claim will be denied by the
court. The aggrieved third party may also avail himself of the remedy of "terceria" by executing an affidavit of his title or right of possession over the
property levied on attachment and serving the same to the office making the levy and the adverse party. Such party may also file an action to nullify
the levy with damages resulting from the unlawful levy and seizure, which should be a totally separate and distinct action from the former case. The
above-mentioned remedies are cumulative and any one of them may be resorted to by one third-party claimant without availing of the other
remedies.50
In this case, the petitioner-wife filed her motion to set aside the levy on attachment of the 100,000 shares of stocks in the name of petitioner-husband
claiming that the said shares of stocks were conjugal in nature; hence, not liable for the account of her husband under his continuing guaranty and
suretyship agreement with the PBMCI. The petitioner-wife had the right to file the motion for said relief.
On the second issue, we find and so hold that the CA erred in setting aside and reversing the orders of the RTC. The private respondent, the petitioner
in the CA, was burdened to prove that the RTC committed a grave abuse of its discretion amounting to excess or lack of jurisdiction. The tribunal acts
without jurisdiction if it does not have the legal purpose to determine the case; there is excess of jurisdiction where the tribunal, being clothed with
the power to determine the case, oversteps its authority as determined by law. There is grave abuse of discretion where the tribunal acts in a
capricious, whimsical, arbitrary or despotic manner in the exercise of its judgment and is equivalent to lack of jurisdiction.51
It was incumbent upon the private respondent to adduce a sufficiently strong demonstration that the RTC acted whimsically in total disregard of
evidence material to, and even decide of, the controversy before certiorari will lie. A special civil action for certiorari is a remedy designed for the
correction of errors of jurisdiction and not errors of judgment. When a court exercises its jurisdiction, an error committed while so engaged does not
deprive it of its jurisdiction being exercised when the error is committed.52
After a comprehensive review of the records of the RTC and of the CA, we find and so hold that the RTC did not commit any grave abuse of its
discretion amounting to excess or lack of jurisdiction in issuing the assailed orders.
Article 160 of the New Civil Code provides that all the properties acquired during the marriage are presumed to belong to the conjugal partnership,
unless it be proved that it pertains exclusively to the husband, or to the wife. In Tan v. Court of Appeals,53 we held that it is not even necessary to
prove that the properties were acquired with funds of the partnership. As long as the properties were acquired by the parties during the marriage,
they are presumed to be conjugal in nature. In fact, even when the manner in which the properties were acquired does not appear, the presumption
will still apply, and the properties will still be considered conjugal. The presumption of the conjugal nature of the properties acquired during the
marriage subsists in the absence of clear, satisfactory and convincing evidence to overcome the same.54
In this case, the evidence adduced by the petitioners in the RTC is that the 100,000 shares of stocks in the Citycorp Investment Philippines were
issued to and registered in its corporate books in the name of the petitioner-husband when the said corporation was incorporated on May 14, 1979.
This was done during the subsistence of the marriage of the petitioner-spouses. The shares of stocks are, thus, presumed to be the conjugal
partnership property of the petitioners. The private respondent failed to adduce evidence that the petitioner-husband acquired the stocks with his
exclusive money.55 The barefaced fact that the shares of stocks were registered in the corporate books of Citycorp Investment Philippines solely in
the name of the petitioner-husband does not constitute proof that the petitioner-husband, not the conjugal partnership, owned the same.56 The
private respondent’s reliance on the rulings of this Court in Maramba v. Lozano57 and Associated Insurance & Surety Co., Inc. v. Banzon58 is misplaced.
In the Maramba case, we held that where there is no showing as to when the property was acquired, the fact that the title is in the wife’s name alone
is determinative of the ownership of the property. The principle was reiterated in the Associated Insurance case where the uncontroverted evidence
showed that the shares of stocks were acquired during the marriage of the petitioners.
Instead of fortifying the contention of the respondents, the ruling of this Court in Wong v. Intermediate Appellate Court 59 buttresses the case for the
petitioners. In that case, we ruled that he who claims that property acquired by the spouses during their marriage is not conjugal partnership property
but belongs to one of them as his personal property is burdened to prove the source of the money utilized to purchase the same. In this case, the
private respondent claimed that the petitioner-husband acquired the shares of stocks from the Citycorp Investment Philippines in his own name as
the owner thereof. It was, thus, the burden of the private respondent to prove that the source of the money utilized in the acquisition of the shares
of stocks was that of the petitioner-husband alone. As held by the trial court, the private respondent failed to adduce evidence to prove this assertion.
The CA, likewise, erred in holding that by executing a continuing guaranty and suretyship agreement with the private respondent for the payment of
the PBMCI loans, the petitioner-husband was in the exercise of his profession, pursuing a legitimate business. The appellate court erred in concluding
that the conjugal partnership is liable for the said account of PBMCI under Article 161(1) of the New Civil Code.
Article 161(1) of the New Civil Code (now Article 121[2 and 3]60 of the Family Code of the Philippines) provides:
Art. 161. The conjugal partnership shall be liable for:
(1) All debts and obligations contracted by the husband for the benefit of the conjugal partnership, and those contracted by the wife, also for the
same purpose, in the cases where she may legally bind the partnership.
The petitioner-husband signed the continuing guaranty and suretyship agreement as security for the payment of the loan obtained by the PBMCI
from the private respondent in the amount of ₱38,000,000. In Ayala Investment and Development Corp. v. Court of Appeals,61 this Court ruled "that

72
the signing as surety is certainly not an exercise of an industry or profession. It is not embarking in a business. No matter how often an executive
acted on or was persuaded to act as surety for his own employer, this should not be taken to mean that he thereby embarked in the business of
suretyship or guaranty."
For the conjugal partnership to be liable for a liability that should appertain to the husband alone, there must be a showing that some advantages
accrued to the spouses. Certainly, to make a conjugal partnership responsible for a liability that should appertain alone to one of the spouses is to
frustrate the objective of the New Civil Code to show the utmost concern for the solidarity and well being of the family as a unit. The husband,
therefore, is denied the power to assume unnecessary and unwarranted risks to the financial stability of the conjugal partnership.62
In this case, the private respondent failed to prove that the conjugal partnership of the petitioners was benefited by the petitioner-husband’s act of
executing a continuing guaranty and suretyship agreement with the private respondent for and in behalf of PBMCI. The contract of loan was between
the private respondent and the PBMCI, solely for the benefit of the latter. No presumption can be inferred from the fact that when the petitioner-
husband entered into an accommodation agreement or a contract of surety, the conjugal partnership would thereby be benefited. The private
respondent was burdened to establish that such benefit redounded to the conjugal partnership. 63
It could be argued that the petitioner-husband was a member of the Board of Directors of PBMCI and was one of its top twenty stockholders, and
that the shares of stocks of the petitioner-husband and his family would appreciate if the PBMCI could be rehabilitated through the loans obtained;
that the petitioner-husband’s career would be enhanced should PBMCI survive because of the infusion of fresh capital. However, these are not the
benefits contemplated by Article 161 of the New Civil Code. The benefits must be those directly resulting from the loan. They cannot merely be a by-
product or a spin-off of the loan itself.64
This is different from the situation where the husband borrows money or receives services to be used for his own business or profession. In the Ayala
case, we ruled that it is such a contract that is one within the term "obligation for the benefit of the conjugal partnership." Thus:
(A) If the husband himself is the principal obligor in the contract, i.e., he directly received the money and services to be used in or for his own business
or his own profession, that contract falls within the term "… obligations for the benefit of the conjugal partnership." Here, no actual benefit may be
proved. It is enough that the benefit to the family is apparent at the time of the signing of the contract. From the very nature of the contract of loan
or services, the family stands to benefit from the loan facility or services to be rendered to the business or profession of the husband. It is immaterial,
if in the end, his business or profession fails or does not succeed. Simply stated, where the husband contracts obligations on behalf of the family
business, the law presumes, and rightly so, that such obligation will redound to the benefit of the conjugal partnership. 65
The Court held in the same case that the rulings of the Court in Cobb-Perez and G-Tractors, Inc. are not controlling because the husband, in those
cases, contracted the obligation for his own business. In this case, the petitioner-husband acted merely as a surety for the loan contracted by the
PBMCI from the private respondent.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision and Resolution of the Court of Appeals are SET ASIDE AND REVERSED. The
assailed orders of the RTC are AFFIRMED.
SO ORDERED.

73
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 167050 June 1, 2011
SOCIAL SECURITY COMMISSION, Petitioner,
vs.
RIZAL POULTRY and LIVESTOCK ASSOCIATION, INC., BSD AGRO INDUSTRIAL DEVELOPMENT CORPORATION and BENJAMIN SAN
DIEGO, Respondents.
DECISION
PEREZ, J.:
This petition for certiorari challenges the Decision1 dated 20 September 2004 and Resolution2 dated 9 February 2005 of the Court of Appeals. The
instant case stemmed from a petition filed by Alberto Angeles (Angeles) before the Social Security Commission (SSC) to compel respondents Rizal
Poultry and Livestock Association, Inc. (Rizal Poultry) or BSD Agro Industrial Development Corporation (BSD Agro) to remit to the Social Security
System (SSS) all contributions due for and in his behalf. Respondents countered with a Motion to Dismiss3 citing rulings of the National Labor Relations
Commission (NLRC) and Court of Appeals regarding the absence of employer-employee relationship between Angeles and the respondents.
As a brief backgrounder, Angeles had earlier filed a complaint for illegal dismissal against BSD Agro and/or its owner, Benjamin San Diego (San Diego).
The Labor Arbiter initially found that Angeles was an employee and that he was illegally dismissed. On appeal, however, the NLRC reversed the Labor
Arbiter’s Decision and held that no employer-employee relationship existed between Angeles and respondents. The ruling was anchored on the
finding that the duties performed by Angeles, such as carpentry, plumbing, painting and electrical works, were not independent and integral steps in
the essential operations of the company, which is engaged in the poultry business. 4 Angeles elevated the case to the Court of Appeals via petition
for certiorari. The appellate court affirmed the NLRC ruling and upheld the absence of employer-employee relationship.5 Angeles moved for
reconsideration but it was denied by the Court of Appeals.6 No further appeal was undertaken, hence, an entry of judgment was made on 26 May
2001.7
At any rate, the SSC did not take into consideration the decision of the NLRC. It denied respondents’ motion to dismiss in an Order dated 19 February
2002. The SSC ratiocinated, thus:
Decisions of the NLRC and other tribunals on the issue of existence of employer-employee relationship between parties are not binding on the
Commission. At most, such finding has only a persuasive effect and does not constitute res judicata as a ground for dismissal of an action pending
before Us. While it is true that the parties before the NLRC and in this case are the same, the issues and subject matter are entirely different. The
labor case is for illegal dismissal with demand for backwages and other monetary claims, while the present action is for remittance of unpaid SS[S]
contributions. In other words, although in both suits the respondents invoke lack of employer-employee relationship, the same does not proceed
from identical causes of action as one is for violation of the Labor Code while the instant case is for violation of the SS[S] Law.
Moreover, the respondents’ arguments raising the absence of employer-employee relationship as a defense already traverse the very issues of the
case at bar, i.e., the petitioner’s fact of employment and entitlement to SS[S] coverage. Generally, factual matters should not weigh in resolving a
motion to dismiss when it is based on the ground of failure to state a cause of action, but rather, merely the sufficiency or insufficienciy of the
allegations in the complaint. x x x. In this respect, it must be observed that the petitioner very categorically set forth in his Petition, that he was
employed by the respondent(s) from 1985 to 1997.8
A subsequent motion for reconsideration filed by respondents was likewise denied on 11 June 2002. The SSC reiterated that the principle of res
judicata does not apply in this case because of the "absence of the indispensable element of ‘identity of cause of action.’"9
Unfazed, respondents sought recourse before the Court of Appeals by way of a petition for certiorari. The Court of Appeals reversed the rulings of
the SSC and held that there is a common issue between the cases before the SSC and in the NLRC; and it is whether there existed an employer-
employee relationship between Angeles and respondents. Thus, the case falls squarely under the principle of res judicata, particularly under the rule
on conclusiveness of judgment, as enunciated in Smith Bell and Co. v. Court of Appeals.10
The Court of Appeals disposed, thus:
WHEREFORE, the petition is GRANTED. The Order dated February 19, 2000 and the Resolution dated June 11, 2002 rendered by public respondent
Social Security Commissoin in SSC Case No. 9-15225-01 are hereby REVERSED and SET ASIDE and the respondent commission is ordered to DISMISS
Social Security Commission Case No. 9-15225-01.11
After the denial of their motion for reconsideration in a Resolution12 dated 9 February 2005, petitioner filed the instant petition.
For our consideration are the issues raised by petitioner, to wit:
WHETHER OR NOT THE DECISION OF THE NLRC AND THE COURT OF APPEALS, FINDING NO EMPLOYER-EMPLOYEE RELATIONSHIP,
CONSTITUTES RES JUDICATA AS A RULE ON CONCLUSIVENESS OF JUDGMENT AS TO PRECLUDE THE RELITIGATION OF THE ISSUE OF
EMPLOYER-EMPLOYEE RELATIONSHIP IN A SUBSEQUENT CASE FILED BEFORE THE PETITIONER.
WHETHER OR NOT RESPONDENT COURT OF APPEALS MAY ORDER OUTRIGHT THE DISMISSAL OF THE SSC CASE IN THE CERTIORARI
PROCEEDINGS BEFORE IT.13
SSC maintains that the prior judgment rendered by the NLRC and Court of Appeals, that no employer-employee relationship existed between the
parties, does not have the force of res judicata by prior judgment or as a rule on the conclusiveness of judgment. It contends that the labor dispute
and the SSC claim do not proceed from the same cause of action in that the action before SSC is for non-remittance of SSS contributions while the
NLRC case was for illegal dismissal. The element of identity of parties is likewise unavailing in this case, according to SSC. Aside from SSS intervening,
another employer, Rizal Poultry, was added as respondent in the case lodged before the SSC. There is no showing that BSD Agro and Rizal Poultry
refer to the same juridical entity. Thus, the finding of absence of employer-employee relationship between BSD Agro and Angeles could not
automatically extend to Rizal Poultry. Consequently, SSC assails the order of dismissal of the case lodged before it.
SSC also claims that the evidence submitted in the SSC case is different from that adduced in the NLRC case. Rather than ordering the dismissal of
the SSC case, the Court of Appeals should have allowed SSC to resolve the case on its merits by applying the Social Security Act of 1997.
Respondents assert that the findings of the NLRC are conclusive upon the SSC under the principle of res judicata and in line with the ruling in Smith
Bell v. Court of Appeals. Respondents argue that there is substantially an identity of parties in the NLRC and SSC cases because Angeles himself, in
his Petition, treated Rizal Poultry, BSD Agro and San Diego as one and the same entity.

74
Respondents oppose the view proffered by SSC that the evidence to prove the existence of employer-employee relationship obtaining before the
NLRC and SSS are entirely different. Respondents opine that the definition of an employee always proceeds from the existence of an employer-
employee relationship.
In essence, the main issue to be resolved is whether res judicata applies so as to preclude the SSC from resolving anew the existence of employer-
employee relationship, which issue was previously determined in the NLRC case.
Res judicata embraces two concepts: (1) bar by prior judgment as enunciated in Rule 39, Section 47(b) of the Rules of Civil Procedure; and (2)
conclusiveness of judgment in Rule 39, Section 47(c).14
There is "bar by prior judgment" when, as between the first case where the judgment was rendered and the second case that is sought to be barred,
there is identity of parties, subject matter, and causes of action. In this instance, the judgment in the first case constitutes an absolute bar to the
second action.15
But where there is identity of parties in the first and second cases, but no identity of causes of action, the first judgment is conclusive only as to those
matters actually and directly controverted and determined and not as to matters merely involved therein. This is the concept of res judicata known
as "conclusiveness of judgment." Stated differently, any right, fact or matter in issue directly adjudicated or necessarily involved in the determination
of an action before a competent court in which judgment is rendered on the merits is conclusively settled by the judgment therein and cannot again
be litigated between the parties and their privies, whether or not the claim, demand, purpose, or subject matter of the two actions is the
same.161avvphi1
Thus, if a particular point or question is in issue in the second action, and the judgment will depend on the determination of that particular point or
question, a former judgment between the same parties or their privies will be final and conclusive in the second if that same point or question was
in issue and adjudicated in the first suit. Identity of cause of action is not required but merely identity of issue. 17
The elements of res judicata are: (1) the judgment sought to bar the new action must be final; (2) the decision must have been rendered by a court
having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be a judgment on the merits; and (4) there must be
as between the first and second action, identity of parties, subject matter, and causes of action. Should identity of parties, subject matter, and causes
of action be shown in the two cases, then res judicata in its aspect as a "bar by prior judgment" would apply. If as between the two cases, only identity
of parties can be shown, but not identical causes of action, then res judicata as "conclusiveness of judgment" applies. 18
Verily, the principle of res judicata in the mode of "conclusiveness of judgment" applies in this case. The first element is present in this case. The
NLRC ruling was affirmed by the Court of Appeals. It was a judicial affirmation through a decision duly promulgated and rendered final and executory
when no appeal was undertaken within the reglementary period. The jurisdiction of the NLRC, which is a quasi-judicial body, was undisputed. Neither
can the jurisdiction of the Court of Appeals over the NLRC decision be the subject of a dispute. The NLRC case was clearly decided on its merits;
likewise on the merits was the affirmance of the NLRC by the Court of Appeals.
With respect to the fourth element of identity of parties, we hold that there is substantial compliance.
The parties in SSC and NLRC cases are not strictly identical. Rizal Poultry was impleaded as additional respondent in the SSC case. Jurisprudence
however does not dictate absolute identity but only substantial identity. 19 There is substantial identity of parties when there is a community of
interest between a party in the first case and a party in the second case, even if the latter was not impleaded in the first case.20
BSD Agro, Rizal Poultry and San Diego were litigating under one and the same entity both before the NLRC and the SSC. Although Rizal Poultry is not
a party in the NLRC case, there are numerous indications that all the while, Rizal Poultry was also an employer of Angeles together with BSD Agro
and San Diego. Angeles admitted before the NLRC that he was employed by BSD Agro and San Diego from 1985 until 1997.21 He made a similar claim
in his Petition before the SSC including as employer Rizal Poultry as respondent. 22 Angeles presented as evidence before the SSC his Identification
Card and a Job Order to prove his employment in Rizal Poultry. He clarified in his Opposition to the Motion to Dismiss23 filed before SSC that he failed
to adduce these as evidence before the NLRC even if it would have proven his employment with BSD Agro. Most significantly, the three respondents,
BSD Agro, Rizal Poultry and San Diego, litigated as one entity before the SSC. They were represented by one counsel and they submitted their
pleadings as such one entity. Certainly, and at the very least, a community of interest exists among them. We therefore rule that there is substantial
if not actual identity of parties both in the NLRC and SSC cases.
As previously stated, an identity in the cause of action need not obtain in order to apply res judicata by "conclusiveness of judgment." An identity of
issues would suffice.
The remittance of SSS contributions is mandated by Section 22(a) of the Social Security Act of 1997, viz:
SEC. 22. Remittance of Contributions. - (a) The contributions imposed in the preceding Section shall be remitted to the SSS within the first ten (10)
days of each calendar month following the month for which they are applicable or within such time as the Commission may prescribe. Every employer
required to deduct and to remit such contributions shall be liable for their payment and if any contribution is not paid to the SSS as herein prescribed,
he shall pay besides the contribution a penalty thereon of three percent (3%) per month from the date the contribution falls due until paid. x x x.
The mandatory coverage under the Social Security Act is premised on the existence of an employer-employee relationship.24 This is evident from
Section 9(a) which provides:
SEC. 9. Coverage. - (a) Coverage in the SSS shall be compulsory upon all employees not over sixty (60) years of age and their employers: Provided,
That in the case of domestic helpers, their monthly income shall not be less than One thousand pesos (P1,000.00) a month x x x.
Section 8(d) of the same law defines an employee as any person who performs services for an employer in which either or both mental or physical
efforts are used and who receives compensation for such services, where there is an employer-employee relationship. The illegal dismissal case
before the NLRC involved an inquiry into the existence or non-existence of an employer-employee relationship. The very same inquiry is needed in
the SSC case. And there was no indication therein that there is an essential conceptual difference between the definition of "employee" under the
Labor Code and the Social Security Act.
In the instant case, therefore, res judicata in the concept of "conclusiveness of judgment" applies. The judgment in the NLRC case pertaining to a
finding of an absence of employer-employee relationship between Angeles and respondents is conclusive on the SSC case.
A case in point is Smith Bell and Co. v. Court of Appeals25 which, contrary to SSC, is apt and proper reference. Smith Bell availed of the services of
private respondents to transport cargoes from the pier to the company's warehouse. Cases were filed against Smith Bell, one for illegal dismissal
before the NLRC and the other one with the SSC, to direct Smith Bell to report all private respondents to the SSS for coverage. While the SSC case
was pending before the Court of Appeals, Smith Bell presented the resolution of the Supreme Court in G.R. No. L-44620, which affirmed the NLRC,
Secretary of Labor, and Court of Appeals’ finding that no employer-employee relationship existed between the parties, to constitute as bar to the
SSC case. We granted the petition of Smith Bell and ordered the dismissal of the case. We held that the controversy is squarely covered by the
principle of res judicata, particularly under the rule on "conclusiveness of judgment." Therefore, the judgment in G.R. No. L-44620 bars the SSC case,

75
as the relief sought in the latter case is inextricably related to the ruling in G.R. No. L-44620 to the effect that private respondents are not employees
of Smith Bell.
The fairly recent case of Co v. People,26 likewise applies to the present case. An information was filed against Co by private respondent spouses who
claim to be employees of the former for violation of the Social Security Act, specifically for non-remittance of SSS contributions. Earlier, respondent
spouses had filed a labor case for illegal dismissal. The NLRC finally ruled that there was no employer-employee relationship between her and
respondent spouses. Co then filed a motion to quash the information, arguing that the facts alleged in the Information did not constitute an offense
because respondent spouses were not her employees. In support of her motion, she cited the NLRC ruling. This Court applied Smith Bell and declared
that the final and executory NLRC decision to the effect that respondent spouses were not the employees of petitioner is a ruling binding in the case
for violation of the Social Security Act. The Court further stated that the doctrine of "conclusiveness of judgment" also applies in criminal cases.27
Applying the rule on res judicata by "conclusiveness of judgment" in conjunction with the aforecited cases, the Court of Appeals aptly ruled, thus:
In SSC Case No. 9-15225-01, private respondent Angeles is seeking to compel herein petitioners to remit to the Social Security System (SSS) all
contributions due for and in his behalf, whereas in NLRC NCR CA 018066-99 (NLRC RAB-IV-5-9028-97 RI) private respondent prayed for the declaration
of his dismissal illegal. In SSC No. 9-15225-01, private respondent, in seeking to enforce his alleged right to compulsory SSS coverage, alleged that he
had been an employee of petitioners; whereas to support his position in the labor case that he was illegally dismissed by petitioners BSD Agro and/or
Benjamin San Diego, he asserted that there was an employer-employee relationship existing between him and petitioners at the time of his dismissal
in 1997. Simply stated, the issue common to both cases is whether there existed an employer-employee relationship between private respondent
and petitioners at the time of the acts complaint of were committed both in SSC Case No. 9-15225-01 and NLRC NCR CA 018066-99 (NLRC RAB-IV-5-
9028-977-RI).
The issue of employer-employee relationship was laid to rest in CA GR. SP. No. 55383, through this Court’s Decision dated October 27, 2000 which
has long attained finality. Our affirmation of the NLRC decision of May 18, 1999 was an adjudication on the merits of the case.
Considering the foregoing circumstances, the instant case falls squarely under the umbrage of res judicata, particularly, under the rule on
conclusiveness of judgment. Following this rule, as enunciated in Smith Bell and Co. and Carriaga, Jr. cases, We hold that the relief sought in SSC Case
No. 9-15225-01 is inextricably related to Our ruling in CA GR SP No. 55383 to the effect that private respondent was not an employee of petitioners.28
The NLRC decision on the absence of employer-employee relationship being binding in the SSC case, we affirm the dismissal by Court of Appeals of
the SSC case.
WHEREFORE, premises considered, the petition is DENIED. The Court of Appeals Decision dated 20 September 2004, as well as its Resolution dated
9 February 2005, is AFFIRMED.
SO ORDERED.

76
 FIRST DIVISION
G.R. No. 187973, January 20, 2014
LZK HOLDINGS AND DEVELOPMENT CORPORATION, Petitioner, v. PLANTERS DEVELOPMENT BANK, Respondent.
RESOLUTION
REYES, J.:
This resolves the appeal filed by petitioner LZK Holdings and Development Corporation (LZK Holdings) assailing the Decision 1 dated January 27,
2009 of the Court of Appeals (CA) in CA-G.R. S.P. No. 103267 affirming the Order2 dated April 8, 2008 of the Regional Trial Court (RTC) of San
Fernando City (San Fernando), La Union, Branch 66, which issued a writ of possession in favor of respondent Planters Development Bank (Planters
Bank).

The facts are not disputed.

LZK Holdings obtained a P40,000,000.00 loan from Planters Bank on December 16, 1996 and secured the same with a Real Estate Mortgage over its
lot located in La Union. The lot measures 589 square meters and is covered by Transfer Certificate of Title No. T-45337.

On September 21, 1998, the lot was sold at a public auction after Planters Bank extrajudicially foreclosed the real estate mortgage thereon due to
LZK Holdings� failure to pay its loan. Planters Bank emerged as the highest bidder during the auction sale and its certificate of sale was registered
on March 16, 1999.

On April 5, 1999, LZK Holdings filed before the RTC of Makati City, Branch 150, a complaint for annulment of extrajudicial foreclosure, mortgage
contract, promissory note and damages.� LZK Holdings also prayed for the issuance of a temporary restraining order (TRO) or writ of preliminary
injunction to enjoin the consolidation of title over the lot by Planters Bank.

On December 27, 1999, Planters Bank filed an ex-parte motion for the issuance of a writ of possession with the RTC-San Fernando.

On March 13, 2000 or three (3) days before the expiration of LZK Holdings� redemption period, the RTC-Makati issued a TRO effective for 20 days
enjoining Planters Bank from consolidating its title over the property. On April 3, 2000, the RTC-Makati ordered the issuance of a writ of preliminary
injunction for the same purpose3 but the writ was issued only on June 20, 2000 upon LZK Holdings� posting of a P40,000.00 bond.

In the meantime, Planters Bank succeeded in consolidating its ownership over the property on April 24, 2000. However, the proceedings for its ex-
parte motion for the issuance of a writ of possession was suspended by the RTC-San Fernando in an Order dated May 11, 2000 in view of the TRO
and writ of preliminary injunction issued by the RTC� Makati. Planters Bank moved for reconsideration but its motion was denied by the RTC-San
Fernando in an Order dated September 1, 2000.4crallawlibrary

Meanwhile, upon motion of LZK Holdings, the RTC-Makati declared as null and void the consolidated title of Planters Bank in an Order5 dated June
2,. 2000. Such ruling was affirmed by the CA in a Decision6 dated February 26, 2004 in CA-G.R. SP No. 59327. When the matter reached the
Court via G.R. No. 164563, we sustained the CA�s judgment in our Resolution7 dated September 13, 2004.

Planters Bank also appealed the May 11, 2000 Order of the RTC-San Fernando which held in abeyance the resolution of its ex parte motion for the
issuance of a writ of possession.� This time, Planters Bank was victorious. The CA granted the appeal and annulled the assailed order of the RTC-
San Fernando. Aggrieved, LZK Holdings sought recourse with the Court in a petition for review docketed as G.R. No. 167998. 8� In Our Decision
dated April 27, 2007, we affirmed the CA�s ruling and decreed that Planters Bank may apply for and is entitled to a writ of possession as the
purchaser of the property in the foreclosure sale,
�A writ of possession is a writ of execution employed to enforce a judgment to recover the possession of land. It commands the sheriff to enter
the land and give possession of it to the person entitled under the judgment. It may be issued in case of an extrajudicial foreclosure of a real estate
mortgage under Section 7 of Act No. 3135, as amended by Act No. 4118.

Under said provision, the writ of possession may be issued to the purchaser in a foreclosure sale either within the one-year redemption period
upon the filing of a bond, or after the lapse of the redemption period, without need of a bond.

We have consistently held that the duty of the trial court to grant a writ of possession is ministerial. Such writ issues as a matter of course upon the
filing of the proper motion and the approval of the corresponding bond. No discretion is left to the trial court. Any question regarding the regularity
and validity of the sale, as well as the consequent cancellation of the writ, is to be determined in a subsequent proceeding as outlined in Section 8
of Act No. 3135. Such question cannot be raised to oppose the issuance of the writ, since the proceeding is ex parte. The recourse is available even
before the expiration of the redemption period provided by law and the Rules of Court.

To emphasize the writ�s ministerial character, we have in previous cases disallowed injunction to prohibit its issuance, just as we have held that
issuance of the same may not be stayed by a pending action for annulment of mortgage or the foreclosure itself.

xxxx

x x x [Planters Bank], as the purchaser in the foreclosure sale, may apply for a writ of possession during the redemption period. In fact, it did apply
for a writ on December 27, 1999, well within the redemption period. The San Fernando RTC, given its ministerial duty to issue the writ, therefore,
should have acted on the ex parte petition. The injunction order is of no moment because it should be understood to have merely stayed the
consolidation of title. As previously stated, an injunction is not allowed to prohibit the issuance of a writ of possession. Neither does the pending
case for annulment of foreclosure sale, mortgage contract, promissory notes and damages stay the issuance of said writ.

Lastly, the trial on the merits has not even started. Until the foreclosure sale of the property in question is annulled by a court of competent
jurisdiction, petitioner is bereft of valid title and of the right to prevent the issuance of a writ of possession to [Planters Bank]. Until then, it is the
trial court�s ministerial function to grant the possessory writ to [Planters Bank].�9 (Citations omitted)

Armed with the above ruling, Planters Bank filed before the RTC-San Fernando a motion to set ex-parte hearing for the issuance of a writ of
possession. LZK Holdings opposed the motion. In an Order dated April 2, 2008, the RTC-San Fernando denied the opposition and set the hearing on
April 14, 2008. On April 8, 2008, the RTC-San Fernando issued another Order 10 declaring the scheduled hearing moot and academic and granting

77
Planter Bank�s ex-parte motion for the issuance of a writ of possession which was filed as early as December 27, 1999. The decretal portion of
the order reads:chanRoblesVirtualawlibrary
WHEREFORE, premises� considered, the petitiOn is hereby granted, hence the order setting the case for ex-parte hearing on April 14, 2008 is
rendered moot and academic by this order. Let [a] Writ of Possession issue in favor of Planters Development Bank and the Deputy Sheriff of this
Court is hereby directed to place Planters Development Bank or any of its authorized representatives in possession of the subject parcel of land,
together with all the improvements existing thereon, covered by TCT- 45337 of the Register of Deeds for the province of La Union against LZK
HOLDINGS AND DEVELOPMENT CORPORATION (referred to as LZK) including all other persons/occupants who are claiming rights under them and
who are depriving [Planters Bank] of its right to possess the above-described property upon the filing of bond by [Planters Bank] in the amount of
two million pesos (Php2,000,000.00).

SO ORDERED.11

In its herein assailed Decision12 dated January 27, 2009, the CA affirmed the foregoing ruling and dismissed LZK Holdings� petition
for certiorari docketed as CA-G.R. SP No. 103267. The CA likewise denied LZK Holdings� motion for reconsideration in its Resolution 13 dated May
12, 2009.

LZK Holdings then filed a motion before the Court for a 30-day extension within which to file a petition for review reckoned from the date of its
receipt of the resolution granting such extension. In our Resolution dated July 15, 2009 we granted the motion but we ordered that the 30-day
extended period shall be counted from the expiration of the original reglementary period. 14 As such, LZK Holdings had until July 23, 2009 to file its
petition and not August 24, 2009 or the date when the petition was actually filed.

In our Resolution dated August 26, 2009, we denied the petition for being filed beyond the extended period pursuant to Section 5(a), Rule 56 of the
Rules of Court and for lack of reversible error in the assailed judgment of the CA.15 LZK Holdings moved for reconsideration16 explaining that it was
able to obtain a copy of the Court�s July 15, 2009 Resolution on July 29, 2009 when Lourdes Z. Korshak, LZK Holdings� Chief Executive Officer,
went to the Office of the Clerk of Court of the Third Division and that she still had to confront and get the case records from the company�s
previous counsel and then look for a substitute lawyer.� LZK Holdings also claimed that the writ of possession issued to Planters Bank should be
annulled for the following reasons, to wit:

(a) with the cancellation of Planters Bank�s consolidated title, LZK Holdings remain to be the registered owner of the property and as such, the
former had no right to apply for a writ of possession pursuant to PNB v. Sanaa Marketing Corporation,17 which held that right of possession is
based on the ownership of the subject property by the applicant;

(b) LZK Holdings was deprived of due process because the RTC did not conduct a hearing on Planter Bank�s motion for the issuance of a writ of
possession;

(c) the P2,000,000.00 bond posted by LZK Holdings does not conform with Section 7 of Act No. 3135 which mandates that the bond amount shall
be equivalent to �twelve (12) months use of the subject property� which in this case amounted to P7,801,472.28 at the time the writ was
issued.

In a Resolution18 dated October 13, 2010 the Court took a liberal stance on the late filing of LZK Holdings� petition for review. Accordingly, its
motion for reconsideration was granted and the petition for review reinstated.

However, after a re-examination of the substantive merits of the petition, the Court finds and stands by its initial determination that the CA
committed no reversible error in affirming the issuance of a writ of possession by the RTC in favor of Planters Bank.

Under the principle of conclusiveness of judgment, the right of Planter�s Bank to a writ of possession as adjudged in G.R. No. 167998 is binding
and conclusive on the parties.

The doctrine of res judicata by conclusiveness of judgment postulates that ''when a right or fact has been judicially tried and determined by a court
of competent jurisdiction, or when an opportunity for such trial has been given, the judgment of the court, as long as it remains unreversed, should
be conclusive upon the parties and those in privity with them.�19crallawlibrary

All the elements of the doctrine are present in this case. The final judgment in G.R. No. 167998 was rendered by the Court pursuant to its
jurisdiction over the review of decisions and rulings of the CA. It was a judgment on the merits of Planters Banks�s right to apply for and be
issued a writ of possession. Lastly, the parties in G.R. No. 167998 are the same parties involved in the present case.20

Hence, LZK Holdings can no longer question Planter Bank�s right to a writ of possession over the subject property because the doctrine of
conclusiveness of judgment bars the relitigation of such particular issue.

Moreover, the authority relied upon by LZK Holdings defeats rather than support its position.� The ruling in PNB21 echoes the very same rationale
of the judgment in G.R. No. 167998 that is� the purchaser in foreclosure sale may take possession of the property even before the expiration of
the redemption period by filing an ex parte motion for such purpose and upon posting of the necessary bond.22crallawlibrary

The pronouncement in PNB that right of possession is based on the ownership of the subject property by the applicant pertains to applications for
writ of possession after the expiration of the redemption period, a situation not contemplated within the facts of the present case.

We cannot also uphold the contentions of LZK Holdings that the RTC, in issuing the writ of possession, transgressed Act No. 3135.23crallawlibrary

No hearing is required prior to the issuance of a writ of possession. This is clear from the following disquisitions in Espinoza v. United Overseas Bank
Phils.24 which reiterates the settled rules on writs of possession, to wit:
The proceeding in a petition for a writ of possession is ex parte and summary in nature. It is a judicial proceeding brought for the benefit of one
party only and without notice by the court to any person adverse of interest. It is a proceeding wherein relief is granted without giving the person
against whom the relief is sought an opportunity to be heard.

By its very nature, an ex parte petition for issuance of a writ of possession is a non-litigious proceeding. It is a judicial proceeding for the
enforcement of one�s right of possession as purchaser in a foreclosure sale. It is not an ordinary suit filed in court, by which one party sues
another for the enforcement of a wrong or protection of a right, or the prevention or redress of a wrong. 25 (Citations omitted)

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Given the ex-parte nature of the proceedings for a writ of possession, the RTC did not err in cancelling the previously scheduled hearing and in
granting Planters Bank�s motion without affording notice to LZK Holdings or allowing it to participate.

Anent the correct amount of surety bond, it is well to emphasize that our task in an appeal by petition for review on certiorari is limited, as a
jurisdictional matter, to reviewing errors of law that might have been committed by the CA.26� The allegations of incorrect computation of the
surety bond involve factual matters within the competence of the trial court to address as this Court is not a trier of facts. The RTC found the
amount of P2,000,000.00 to be sufficiently equivalent to the use of the property for a period of twelve (12) months.� We are bound by such
factual finding especially considering the affirmation accorded it by the CA.

In fine, the decision of the CA is in accordance with the law and jurisprudence on the matter. It correctly sustained the Order of the RTC in issuing a
writ of possession in favor of Planters Bank.

WHEREFORE, premises considered, the petitiOn is hereby DENIED. The Decision dated January 27, 2009 of the Court of Appeals in CA-G.R. S.P. No.
103267 is AFFIRMED.

SO ORDERED.

79
 SECOND DIVISION
G.R. No. 140288 October 23, 2006
ST. AVIATION SERVICES CO., PTE., LTD., petitioner,
vs.
GRAND INTERNATIONAL AIRWAYS, INC., respondent.
DECISION
SANDOVAL-GUTIERREZ, J.:
Challenged in the instant Petition for Review on Certiorari are the Decision of the Court of Appeals dated July 30, 1999 and its Resolution dated
September 29, 1999 in CA-G.R. SP No. 51134 setting aside the Orders dated October 30, 1998 and December 16, 1998 of the Regional Trial Court
(RTC), Branch 117, Pasay City in Civil Case No. 98-1389.
St. Aviation Services Co., Pte., Ltd., petitioner, is a foreign corporation based in Singapore. It is engaged in the manufacture, repair, and maintenance
of airplanes and aircrafts. Grand International Airways, Inc., respondent, is a domestic corporation engaged in airline operations.
Sometime in January 1996, petitioner and respondent executed an "Agreement for the Maintenance and Modification of Airbus A 300 B4-103 Aircraft
Registration No. RP-C8882" (First Agreement). Under this stipulation, petitioner agreed to undertake maintenance and modification works on
respondent's aircraft. The parties agreed on the mode and manner of payment by respondent of the contract price, including interest in case of
default. They also agreed that the "construction, validity and performance thereof" shall be governed by the laws of Singapore. They further agreed
to submit any suit arising from their agreement to the non-exclusive jurisdiction of the Singapore courts.
At about the same time, or on January 12, 1996, the parties verbally agreed that petitioner will repair and undertake maintenance works on
respondent's other aircraft, Aircraft No. RP-C8881; and that the works shall be based on a General Terms of Agreement (GTA). The GTA terms are
similar to those of their First Agreement.
Petitioner undertook the contracted works and thereafter promptly delivered the aircrafts to respondent. During the period from March 1996 to
October 1997, petitioner billed respondent in the total amount of US$303,731.67 or S$452,560.18. But despite petitioner's repeated demands,
respondent failed to pay, in violation of the terms agreed upon.
On December 12, 1997, petitioner filed with the High Court of the Republic of Singapore an action for the sum of S$452,560.18, including interest
and costs, against respondent, docketed as Suit No. 2101. Upon petitioner's motion, the court issued a Writ of Summons to be served extraterritorially
or outside Singapore upon respondent. The court sought the assistance of the sheriff of Pasay City to effect service of the summons upon respondent.
However, despite receipt of summons, respondent failed to answer the claim.
On February 17, 1998, on motion of petitioner, the Singapore High Court rendered a judgment by default against respondent.
On August 4, 1998, petitioner filed with the RTC, Branch 117, Pasay City, a Petition for Enforcement of Judgment, docketed as Civil Case No. 98-1389.
Respondent filed a Motion to Dismiss the Petition on two grounds: (1) the Singapore High Court did not acquire jurisdiction over its person; and (2)
the foreign judgment sought to be enforced is void for having been rendered in violation of its right to due process.
On October 30, 1998, the RTC denied respondent's motion to dismiss, holding that "neither one of the two grounds (of Grand) is among the grounds
for a motion to dismiss under Rule 16 of the 1997 Rules of Civil Procedure."
Respondent filed a motion for reconsideration but was denied by the RTC in its Order dated December 16, 1998.
On February 15, 1999, respondent filed with the Court of Appeals a Petition for Certiorari assailing the RTC Order denying its motion to dismiss.
Respondent alleged that the extraterritorial service of summons on its office in the Philippines is defective and that the Singapore court did not
acquire jurisdiction over its person. Thus, its judgment sought to be enforced is void. Petitioner, in its comment, moved to dismiss the petition for
being unmeritorious.
On July 30, 1999, the Court of Appeals issued its Decision granting the petition and setting aside the Orders dated October 30, 1998 and December
16, 1998 of the RTC "without prejudice to the right of private respondent to initiate another proceeding before the proper court to enforce its claim."
It found:
In the case at bar, the complaint does not involve the personal status of plaintiff, nor any property in which the defendant has a claim or
interest, or which the private respondent has attached but purely an action for collection of debt. It is a personal action as well as an
action in personam, not an action in rem or quasi in rem. As a personal action, the service of summons should be personal or substituted,
not extraterritorial, in order to confer jurisdiction on the court.
Petitioner seasonably filed a motion for reconsideration but it was denied on September 29, 1999.
Hence, the instant Petition for Review on Certiorari.
The issues to be resolved are: (1) whether the Singapore High Court has acquired jurisdiction over the person of respondent by the service of
summons upon its office in the Philippines; and (2) whether the judgment by default in Suit No. 2101 by the Singapore High Court is enforceable in
the Philippines.
Generally, in the absence of a special contract, no sovereign is bound to give effect within its dominion to a judgment rendered by a tribunal of
another country; however, under the rules of comity, utility and convenience, nations have established a usage among civilized states by which final
judgments of foreign courts of competent jurisdiction are reciprocally respected and rendered efficacious under certain conditions that may vary in
different countries.1 Certainly, the Philippine legal system has long ago accepted into its jurisprudence and procedural rules the viability of an action
for enforcement of foreign judgment, as well as the requisites for such valid enforcement, as derived from internationally accepted doctrines.2
The conditions for the recognition and enforcement of a foreign judgment in our legal system are contained in Section 48, Rule 39 of the 1997 Rules
of Civil Procedure, as amended, thus:
SEC. 48. Effect of foreign judgments. – The effect of a judgment or final order of a tribunal of a foreign country, having jurisdiction to render
the judgment or final order is as follows:
(a) In case of a judgment or final order upon a specific thing, the judgment or final order is conclusive upon the title to the thing;
and
(b) In case of a judgment or final order against a person, the judgment or final order is presumptive evidence of a right as between
the parties and their successors in interest by a subsequent title;

80
 In either case, the judgment or final order may be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion,
fraud, or clear mistake of law or fact.
Under the above Rule, a foreign judgment or order against a person is merely presumptive evidence of a right as between the parties. It may be
repelled, among others, by want of jurisdiction of the issuing authority or by want of notice to the party against whom it is enforced. The party
attacking a foreign judgment has the burden of overcoming the presumption of its validity.3
Respondent, in assailing the validity of the judgment sought to be enforced, contends that the service of summons is void and that the Singapore
court did not acquire jurisdiction over it.
Generally, matters of remedy and procedure such as those relating to the service of process upon a defendant are governed by the lex fori or the
internal law of the forum,4 which in this case is the law of Singapore. Here, petitioner moved for leave of court to serve a copy of the Writ of Summons
outside Singapore. In an Order dated December 24, 1997, the Singapore High Court granted "leave to serve a copy of the Writ of Summons on the
Defendant by a method of service authorized by the law of the Philippines for service of any originating process issued by the Philippines at ground
floor, APMC Building, 136 Amorsolo corner Gamboa Street, 1229 Makati City, or elsewhere in the Philippines."5 This service of summons outside
Singapore is in accordance with Order 11, r. 4(2) of the Rules of Court 19966 of Singapore, which provides.
(2) Where in accordance with these Rules, an originating process is to be served on a defendant in any country with respect to which there
does not subsist a Civil Procedure Convention providing for service in that country of process of the High Court, the originating process may
be served –
a) through the government of that country, where that government is willing to effect service;
b) through a Singapore Consular authority in that country, except where service through such an authority is contrary to the law of the
country; or
c) by a method of service authorized by the law of that country for service of any originating process issued by that country.
In the Philippines, jurisdiction over a party is acquired by service of summons by the sheriff, 7 his deputy or other proper court officer either personally
by handing a copy thereof to the defendant 8 or by substituted service.9 In this case, the Writ of Summons issued by the Singapore High Court was
served upon respondent at its office located at Mercure Hotel (formerly Village Hotel), MIA Road, Pasay City. The Sheriff's Return shows that it was
received on May 2, 1998 by Joyce T. Austria, Secretary of the General Manager of respondent company. 10 But respondent completely ignored the
summons, hence, it was declared in default.
Considering that the Writ of Summons was served upon respondent in accordance with our Rules, jurisdiction was acquired by the Singapore High
Court over its person. Clearly, the judgment of default rendered by that court against respondent is valid.
WHEREFORE, we GRANT the petition. The challenged Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 51134 are set aside.
The RTC, Branch 117, Pasay City is hereby DIRECTED to hear Civil Case No. 98-1389 with dispatch.
SO ORDERED.

81