G.R. No. 97240 October 16, 1992 JESUS T. DAVID, petitioner, vs.

THE COURT OF APPEALS and VALENTIN AFABLE, JR., respondents.

DAVIDE, JR., J.: Can the Court of Appeals, in a judgment sustaining the trial court's denial of the petition for relief from judgment, validly amend or modify the decision sought to be overturned by such petition? This is the basic issue which confronts this Court in the instant case. Stripped of unnecessary details, the facts of this case, as gathered from pleadings, are as follows: Due to dishonor of five (5) checks with a total value of P52,800.00 which private respondent issued in favor of the petitioner after the former failed to deliver 2,500 cavans of palay deposited with him by the latter or pay the amount of P54,000.00 representing the value thereof, and to comply with the obligation in respect to the set of earnings and a diamond ring delivered by petitioner's wife on 20 May 1964, petitioner instituted two (2) criminal cases for estafa and filed an independent civil action for a sum of money with preliminary attachment against the private respondent before the then Court of First Instance (now Regional Trial Court) of Manila. The latter was docketed as Civil Case No. 94781 and was assigned to Branch 26 thereof. On 8 December 1965, private respondent executed a document entitled Compromise Agreement which reads: COMPROMISE AGREEMENT In consideration of Mr. Jesus T. David consenting to another postponement of our criminal cases (estafa) now pending trial before the Court of First Instance of Manila, I hereby promise to pay him the sum of SIXTY SIX THOUSAND FIVE HUNDRED (P66,500.00) PESOS on or before January 4th, 1966; and for the purpose of finally settling amicably this case. Manila, December 18, 1965.
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On 27 May 1975, petitioner filed an Amended Complaint which makes specific reference to this so-called Compromise Agreement. On 14 August 1979, the trial court issued an order declaring the private respondent "as in default" for his failure to appear at the pre-trial and allowing the petitioner to present his evidence ex-parte. The latter offered in evidence the "Compromise Agreement", which was marked as Exhibit "L". On 31 October 1979, the trial court handed down a Decision in favor of the petitioner the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered against the defendant, Valentin Afable, Jr., ordering him to pay to the plaintiff the sum of P66,500.00 plus the legal rate of interest thereon from July 24, 1974 up to the time the same is fully paid plus the amount of P5,000.00 as for attorney's fees and to pay the costs of 3 the suit. Upon petitioner's motion for reconsideration questioning the date when interest should begin to run, the trial court issued 4 an Order on 20 June 1980 amending the dispositive portion of the decision by declaring that the interest shall be reckoned from 4 January 1966 pursuant to the so-called Compromise Agreement. On 10 October 1980, the trial court issued a writ of execution. Private respondent filed a petition for relief from judgment which, however, was denied. He then filed a motion to reconsider the said denial order which was also subsequently denied. A copy of this last denial order was received by the private respondent on 1 March 1983. The following day, private respondent filed a notice of appeal. On 2 August 1984, the trial court elevated the records of the case to the respondent Court of Appeals. The case was docketed therein as CA-G.R. CV No. 06532. As summarized by the respondent Court of Appeals in its 28 July 1989 decision, the issues raised by the private respondent before it were: 1. Whether or not the defendant-appellant was correctly declared in default correctly rendered below; 2. Whether or not a Petition for Relief From Judgment is available to the defendant-appellant; 3. Whether or not the execution of the Decision appealed from was validly ordered; 4. Whether or not the Amended Complaint dated May 24, 1975 should have been dismissed on the grounds of lack of cause of action, prescription, and res judicata; and
5 2

5. Whether or not granting ex gratia argumenti the validity of the Decision in question, the same correctly 6 awarded damages and attorney's fees in favor of the plaintiff-appellee. Respondent Court correctly resolved the first four (4) issues explicitly against respondent. More specifically, anent the second issue, it declared: This brings us to the second issue: whether or not a Petition for Relief is an available remedy. Under Rule 38 of the Rules of Court, a petition for relief from judgment "must be accompanied with affidavit showing the fraud, accident, mistake or excusable negligence relied upon, and the facts constituting the petitioner's good and substantial cause of action or defense, as the case may be." Said grounds must be established in order to be convincing. The alleged excusable negligence, accident or mistake relied upon by defendant-appellant could have been avoided with ordinary prudence. The alleged fraud could not have been committed by plaintiff-appellee through mere inaction since he is not duty bound to personally notify the defendant of court processes. It is not incumbent upon him to search for the address of defendant so that the latter may be properly notified by the Court. This is not the kind of fraud contemplated by law. Bad faith cannot be presumed from inaction where there is no duty to act. The 7 grounds not having been clearly established, petition for relief will not lie. As to the fifth issue, the appellate court, amended the dispositive portion of the decision appealed from by declaring that the interest should run only from the date of the filing of the Amended Complaint. In support thereof, it made the following disquisitions: Finally, on the question of the validity of the award of damages and attorney's fees, defendant-appellant further challenged the amendment of the decision of October 31, 1979 adjusting the date for computing the legal interest to start from January 4, 1966 instead of July 24, 1974, as per original decision. The rule is, where a party has been declared in default, the amount of damages that should be adjudged against him cannot exceed the amount alleged in the complaint even if the complainants are able to prove during the reception of evidence a higher amount of damages. (Mario vs. Gaddi, L-30860, March 29, 1972). It appears in this case that the amount of damages awarded is in accordance with the relief prayed for in the Amended Complaint except that the legal interest should be computed from the date of the filing of the complaint, which is from May 27, 1975. It would be different if the defendant is not in default, plaintiff may be granted any relief that is supported by the evidence, although not specified in his pleadings. As to the propriety of the award of attorney's fees, since plaintiff-appellee was compelled to litigate in order to protect his interest, the Court a quo correctly granted the relief as prayed for. 8 Accordingly the Court of Appeals decreed as follows: WHEREFORE, in view of all the foregoing considerations, the decision of the Court a quo, being substantially in accordance with law, is hereby affirmed with slight modification to reflect the date of computing the legal interest to be from May 27, 1975, the date of filing the amended complaint. Costs 9 against defendant-appellant. On 3 October 1989, petitioner filed a petitioner for relief (which should have been, more appropriately, a motion for reconsideration) from judgment to set aside the aforementioned modification decreed by the respondent Court of Appeals on the ground that since the trial court's decision was already final, it could no longer be amended. It was only on 18 April 10 1990 that the respondent Court promulgated a Resolution denying the said petition on the ground that the interest could not run from 4 January 1966 because the private respondent had not incurred in delay, there being no proof of extrajudicially demand. Under the first paragraph of Article 1169 of the Civil Code, the debtor incurs in delay from the time the creditor judicially or extrajudicially demands the fulfillment of the obligation. In the absence of proof of extrajudicial demand, the date of the filing of the amended complaint based on the so-called Compromise Agreement, which was 27 May 1975, shall be the date wherefrom computation of interest shall commence. Petitioner filed a motion to reconsider this resolution 12 1991.
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which the respondent Court of Appeals denied on 4 February

Hence, this petition for review under Rule 45 of the Rules of Court wherein petitioner submits the following assignment of errors: A. THE RESPONDENT COURT OF APPEALS ERRED IN MODIFYING THE DECISION OF THE REGIONAL TRIAL COURT IN A MANNER WHICH CONTRADICTED THE TERMS OF JUDICIAL (sic) COMPROMISE AGREEMENT WHICH HAS ALREADY LONG BECOME FINAL AND EXECUTORY. B. THE RESPONDENT COURT OF APPEALS ERRED IN IGNORING DOCUMENTARY EVIDENCE ON THE RECORD WHICH HAS NOT BEEN DENIED NOR (sic) CONTRADICTED. C. THE RESPONDENT COURT OF APPEALS ERRED IN AMENDING THE LOWER COURT'S DECISION WITHOUT ITS HAVING BEEN THE SUBJECT OF ANY ASSIGNMENT OR ERROR BY THE APPELLANT IN THE CASE. D. THE RESPONDENT COURT OF APPEALS ERRED IN COMMITTING A VIRTUAL BUT GROSS VIOLATION OF LAW BY REFUSING TO ENFORCE A JUDICIAL COMPROMISE AGREEMENT WHICH 13 IS THE LAW BETWEEN THE PARTIES THERETO.

There is so much circuitry in these assigned errors. It is obvious that the petitioner does not have a full understanding of a compromise agreement and a judgment based thereon. What the private respondent signed on 18 December 1975 is not a compromise agreement although it is captioned as such. A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one 14 already commenced. It is "an agreement between two or more persons, who, for preventing or putting an end to a lawsuit, adjust their difficulties by mutual consent in the manner which they agree on, and which everyone of them prefers 15 to the hope of gaining, balanced by the danger of losing." The so-called Compromise Agreement sought neither to avoid litigation nor explicitly put an end to the cases already commenced between the parties. Since it was only the private respondent who signed the agreement, it may not be considered a bilateral contract. Rather, it is but a mere promise to pay P66,500.00 on or before 4 January 1966 as a step towards the amicable settlement of the case. It does not, by itself, settle the case or put an end to it. It contemplates the execution of a formal act after payment shall have been made. The parties did not submit any separate compromise agreement for approval by the court. What the court received was the evidence for the petitioner which included the so-called "compromise agreement" (marked as Exhibit "L"); judgment was rendered on the basis of such evidence as thus adduced. It is precisely for this reason that the trial court awarded attorney's fees and ordered the private respondent to pay interest plus the costs of the suit. Clearly, no judgment based on compromise agreement was rendered by the trial court. The doctrine relied on by the petitioner and underscored by numerous case citations that a compromise agreement constitutes the law between the parties and that a judgment based thereon is immediately final and executory is unfortunately inapplicable in this petition. To the mind of this Court, the real issue is whether or not the respondent Court, having sustained and correctly the trial court's denial of the private respondent's petition for relief from judgment, could, at the same time modify the decision sought to be overturned by such a petition. The answer is in negative. The filing of the petition for relief from judgment with the trial court was an equivocal admission on the private respondent's part that his period to appeal from the decision 16 had already expired. Such was the incontrovertible fact; besides a petition for relief from judgment or loss of the right to appeal, the affirmance by the respondent Court of the denial of the petition is a confirmation of the existence of a final and executory judgment. It can neither amend nor modify it. "[N]othing is more settled in the law than that when a final judgment becomes executory, it is thereby becomes immutable and unalterable. The judgment may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the court rendering it or by the highest Court of the land. The only recognized exceptions are the corrections of clerical errors or the making of the so-called nunc pro tunc 17 entries which cause no prejudice to any party, and, of course, where the judgment is void." Respondent Court may have had in mind the second paragraph of Section 2 of Rule 41 which allows a party who appeals from an order denying a petition for relief to assail the judgment on the merits on the ground that the same is not supported by the evidence or is contrary to law. Said decision provides as follows: Sec. 2 Judgments or orders subject to appeal. xxx xxx xxx A judgment denying relief under Rule 38 is subject to appeal, and in the course thereof, a party may also assail the judgment on the merits, upon the ground that it is not supported by the evidence or it is contrary to law. This provision, however, cannot be construed as allowing the review of the decision on the specific ground therein indicated if the denial of the petition for relief by the trial court is sustained by the appellate court. It may only be done if the appellate court overturns such denial. The respondent Court then erred in modifying the decision of the trial court. Having sustained the trial court's denial of the petition for relief filed under Rule 38 of the rules of Court, it had nothing more to do save to dismiss the appeal and make pronouncement that the decision of the trial court had long become firm, final and executory. WHEREFORE, for the reason abovestated, the petition is GRANTED. That portion of the challenged decision of the respondent Court of Appeals in C.A.-G.R. CV No. 06532 of 29 July 1989 modifying the decision of the trial court with respect to the date when interest should commence to run is hereby SET ASIDE and NULLIFIED. Costs against the private respondent. SO ORDERED.

G.R. No. 143929

February 28, 2003

GUILLERMO AND LOURDES BERNALDEZ, petitioners, vs. CONCHITA FRANCIA, respondent. DECISION CALLEJO, SR., J.: This is a petition for review on certiorari of the Decision of the Court of Appeals dated January 19, 2000 in CA-G.R. CV 1 No. 52388 and its Resolution dated June 28, 2000 which denied petitioners motion for reconsideration of the decision. Respondent Conchita Francia is the registered owner of a residential lot in Sampaloc, Manila with an area of 1,000 square 2 meters and covered by Transfer Certificate of Title (TCT) No. 180199. Located beside said lot is a parcel of land owned 3 by petitioners Guillermo and Lourdes Bernaldez, with an area of 114 square meters and covered by TCT No. 157000. On October 8, 1988, the building and other improvements erected on respondents lot were destroyed by fire. Subsequently, petitioners built their kitchen and in the process encroached upon a portion of respondents lot. Respondent had her property resurveyed by a geodetic engineer and as a result, she was able to confirm that petitioners 4 had encroached upon some nineteen square meters of her lot. Respondent made several demands upon petitioners to vacate the portion of her lot which they were occupying, but petitioners did not comply therewith. Respondent then filed with the Regional Trial Court (RTC) of Manila a complaint 5 against petitioners, praying that the court determine the rightful owner of the area in dispute. The case was raffled to Branch 33 thereof. The trial court ordered a resurvey of the lots owned respectively by respondent and petitioners. Respondent nominated Engr. Honorio Santamaria as surveyor of her lot, while petitioners chose Engr. Rosario Mercado as their surveyor. In the course of the trial, Santamaria reported that petitioners had encroached upon respondents lot by an area of nineteen 6 square meters. Santamarias survey plan was duly approved by the Bureau of Lands. On the other hand, Mercados 7 report did not contain a similar finding. His plan was still pending approval by the Bureau of Lands. While the trial court was able to establish a common boundary of respondents and petitioners lots from the reports filed by Santamaria and Mercado, it still could not conclusively determine whether the disputed area belonged to respondents lot or to that of petitioners. On September 10, 1990, the trial court issued an order calling for another resurvey of the two lots and directing the Director of the Bureau of Lands to appoint a competent geodetic engineer to undertake the resurvey of petitioners and respondents properties in the presence of representatives of the RTC and of the parties. A survey team under Engr. Elpidio de Lara, Chief of the Technical Services Division of the Land Management Services (National Capital Region) of the Department of Environment and Natural Resources resurveyed the properties pursuant to the aforesaid Order of the trial court.1a\^/phi1.net Thereafter, Engr. De Lara submitted a survey report with a verification plan, 8 stating that petitioners had encroached upon seventeen square meters of respondents lot. On August 18, 1995, the RTC rendered its decision holding that petitioners had encroached on respondents lot by an 9 area of seventeen square meters. Petitioners filed with the trial court a motion for new trial on the ground of newly discovered evidence. They claimed that the TCT covering respondents lot referred to another lot owned by Nolasco and Editha Tupaz. However, the RTC denied 10 the motion for lack of merit. Petitioners appealed the decision of the trial court to the Court of Appeals. On January 19, 2000, the appellate court promulgated its Decision affirming in toto the decision of the trial court. The Court of Appeals ruled that the factual findings of the RTC were supported by the evidence presented before it. It, likewise, held that the trial court did not err in denying the motion for new trial, since petitioners had not satisfactorily shown that they exercised reasonable diligence in producing or locating a copy of TCT No. 180189 in the name of Nolasco and Editha Tupaz before or during trial but had 11 nonetheless failed to secure it. The appellate court also denied petitioners m otion for reconsideration of its decision in a Resolution dated June 28, 12 2000. Hence, this petition. Petitioners argue that the Court of Appeals erred in upholding the trial courts reliance on the survey made by Engr. De Lara despite the fact that said survey has not been verified and approved by the Bureau of Lands, and is therefore nothing but a private writing. Petitioners further claim that there is no preponderance of evidence to deprive them of the seventeen 13 square meters which, according to both the trial and appellate courts, formed part of respondents lot. In her Comment, respondent maintains that the appellate court did not err in affirming the decision of the trial court since 14 the evidence supports the factual findings of the RTC. Respondent points out that the trial court considered not only the report of Engr. De Lara, but all the evidence presented before it in resolving the ownership of the area in dispute. Moreover, she states that petitioners failed to present evidence to controvert De Laras report, despite having been given 15 the chance by the trial court to have the properties resurveyed again after De Lara had presented his report. There is no merit in the petition.

The issues raised by petitioners are issues of fact which are not reviewable by this Court in a petition for review on certiorari. Section 1, Rule 45 of the Revised Rules of Civil Procedure is clear on this point: Filing of petition with the 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. (Emphasis supplied.) In a petition for review on certiorari, the Supreme Court is limited to reviewing errors of law absent any showing that the findings of fact of the appellate court are not supported by the records. Moreover, when factual findings of the trial court are confirmed by the Court of Appeals, said facts are final and conclusive on this Court, unless the same are not 16 supported by the evidence on record. In the present case, the findings of fact of the Court of Appeals are supported by the records. The Court agrees with the observation of the appellate court that the conclusion of the RTC that petitioners had encroached on respondents lot was substantiated by the similar findings of both Engr. Santamaria and Engr. De Lara; and that petitioners allegation that De 17 Laras report was technically and grossly ineffective was unsupported by any evidence. Although the survey report of Engr. De Lara was not verified, and therefore cannot be considered a public document, the Court notes that the due execution and genuineness thereof was established during the trial. De Lara testified before the 18 RTC that he submitted a survey report and plan, and properly identified said documents and his signature thereon. Hence, there was no error in the admission of said pieces of evidence, for the due execution and authenticity thereof were proven in accordance with Section 21, Rule 132 of the Revised Rules of Court which states that "[b]efore any private document offered as authentic is received in evidence, its due execution and authenticity must be proved either: (a) by anyone who saw the document executed or written; (b) by evidence of the genuineness of the signature or handwriting of the maker or (c) by a subscribing witness." It must be emphasized that as found by the Court of Appeals, the trial court did not rely merely on De Laras findings in resolving the case; it also considered all other evidence presented by the parties. The Court, likewise, sustains the findings of the appellate court that petitioners motion for new trial was correctly denied by the trial court. We have previously ruled that a motion for new trial on the ground of newly discovered evidence shall be granted when the concurrence of the following requisites is established: (a) the evidence is discovered after trial; (b) the evidence could not have been discovered and produced during trial even with the exercise of reasonable diligence; and (c) the evidence is material and not merely corroborative, cumulative or impeaching and is of such weight that if admitted, would probably 19 change the judgment. In order that a particular piece of evidence may be regarded as "newly discovered" for purposes of granting a new trial, it is essential to show that the offering party exercised reasonable diligence in seeking to locate 20 such evidence before or during trial but had nonetheless failed to secure it. The evidence offered by petitioners, TCT No. 180189 issued by the Registry of Deeds of Manila not to respondent, but to 21 "Spouses Nolasco E. Tupaz and Editha L. Tupaz," does not satisfy the aforementioned requisites. The Court notes that although petitioners found out about the existence of said TCT only after trial, they could have easily discovered the same before or during the trial of the case had they bothered to check the TCT of respondents lot to ascertain whether or not it overlapped with their own lot. In any case, TCT No. 180189 is hardly material to their case, considering that respondents TCT is of a different number: TCT No. 180199. Hence, it is not difficult to see why the two certificates of title refer to different parcels of land and owners.1a\^/phi1.net Such piece of evidence would certainly not have affected, much less, altered the outcome of the case. WHEREFORE, in view of the foregoing, the petition is hereby DENIED for lack of merit. The Decision of the Court of Appeals dated January 19, 2000 in CA-G.R. CV No. 52388 is AFFIRMED. SO ORDERED.

G.R. No. 171961 FERDINAND A. DELA CRUZ and RENATO A. DELA CRUZ, Vs. AMELIA G. QUIAZON NACHURA, J.:

Petitioners, Ferdinand and Renato dela Cruz, seek the review of the Court of Appeals Decision dated January 19, 2006 and Resolution dated March 21, 2006. The assailed decision affirmed the Department of Agrarian Reform Adjudication Board (DARAB) Resolution canceling the Certificate of Land Transfer (CLT) in the name of petitioners father, Feliciano dela Cruz, and directing petitioners to vacate the property. The case arose from the following antecedents: Estela Dizon-Garcia, mother of respondent Amelia G. Quiazon, was the registered owner of a parcel of land covered by Transfer Certificate of Title (TCT) No. 107576, situated in Sto. Domingo II, Capas, Tarlac. The property was brought under the coverage of Operation Land Transfer pursuant to Presidential Decree (P.D.) No. 27. On June 8, 1981, Feliciano dela Cruz, a tenant-farmer, was issued CLT No. 0-036207 over a 3.7200-hectare portion of the said property. On March 9, 1992, the heirs of Estela Dizon-Garcia executed a Deed of Extrajudicial Admission and Partition with Waiver adjudicating among themselves all the properties left by both of their parents, except for the subject property, which was adjudicated solely in favor of respondent. On May 15, 1993, respondent filed a Complaint with the Provincial Adjudication Board of the Department of Agrarian Reform (DAR) against petitioner Ferdinand dela Cruz, alleging that in 1991, he entered into a leasehold contract with respondent, by virtue of which he bound himself to deliver 28 cavans of palay as rental. Since 1991, petitioner Ferdinand dela Cruz allegedly failed to deliver the stipulated rental because he had already abandoned the landholding. For this reason, respondent prayed for his ejectment from the property and the termination of their tenancy relationship. In his Answer, petitioner Ferdinand dela Cruz, through petitioner Renato dela Cruz, alleged that the execution of the leasehold contract was erroneous considering that a CLT had already been issued in favor of his father. He contended that by virtue of the CLT, they became the owners of the landholding, without any obligation to pay rentals to respondent but only to pay amortizations to the Land Bank of the Philippines. He claimed that they paid the rentals until 1992, which rentals should now be considered as advance payments for the land. Later, respondent amended the complaint to implead Feliciano and Renato dela Cruz. The amended complaint alleged that petitioners Ferdinand and Feliciano dela Cruz were already immigrants to the United States of America (U.S.A.) and that petitioner Renato dela Cruz, the actual tiller of the land, was a usurper because his possession of the land was without the consent of the landowner. Respondent argued that by migrating to the U.S.A., Feliciano was deemed to have abandoned the landholding, for which reason his CLT should now be canceled. In turn, petitioners amended their Answer. They averred that their father was just temporarily out of the country and that petitioner Renatos possession and cultivation of the land did not need the consent of the landowner because it was done in aid of their fathers cultivation of the land. On November 8, 1993, petitioners began paying amortizations to the Land Bank of the Philippines.

On December 21, 1993, Provincial Adjudicator Romeo B. Bello dismissed the complaint based on his finding that the landholding had not been abandoned by Feliciano considering that petitioner Renato dela Cruz, a member of Felicianos immediate family, was in actual and physical possession thereof. Respondent filed a Motion for Reconsideration. In an Order dated June 8, 1994, the Provincial Adjudicator denied respondents motion for reconsideration for lack of merit and directed the Municipal Agrarian Reform Office of Capas, Tarlac, to determine whether the amortizations had been fully paid and, if so, to issue an Emancipation Patent. On July 11, 1994, respondent filed a Notice of Appeal from said decision. During the pendency of the appeal, respondent executed, on October 6, 1994, a Deed of Conveyance and Waiver of her rights over the subject property in favor of her siblings. She then filed her Appeal Memorandum on November 29, 1994. The appeal was docketed as DARAB Case No. 3335. Unknown to petitioners, respondent and her siblings, as heirs of Estela Dizon-Garcia, had filed an Application for Retention before the DAR Regional Office for Region III, as early as June 1, 1994. The application was granted on February 8, 1996. The dispositive portion of the Regional Directors Order reads: WHEREFORE, all premises considered, Order is hereby issued, as follows:

1.

GRANTING the application for retention of the Heirs of Estela Dizon-Garcia over a landholding covered by TCT No. 107576, with a total area of 12.5431, located at Sto. Domingo, Capas, Tarlac, to be divided among the heirs as follows: Rosita Garcia Buena Garcia Bella Garcia Estellita Garcia - 3.9641 has. - 2.5796 has. - 3.0000 has. - 3.0000 has.

2.

ORDERING the herein landowners-applicant to maintain in peaceful possession the tenants of the subject landholding, namely: Renato dela Cruz, Carlos Aquino and Francisco Manayang as leaseholders; and

3. DIRECTING the herein landowners-applicant to cause the segregation of the retained area at their own expense and to submit report to this Office within thirty (30) days from receipt hereof. SO ORDERED. In a letter dated April 15, 1996, the heirs of Feliciano dela Cruz prayed for the setting aside of the said order. DAR Secretary Ernesto D. Garilao treated the letter as an appeal but, nevertheless, denied the same in an Order dated May 13, 1997. On July 7, 1999, the DARAB finally dismissed respondents appeal (DARAB Case No. 3335) from the d ecision of the Provincial Adjudicator. This decision became final and executory. On October 19, 1999, respondent filed a Petition for Relief from Judgment, claiming that she just arrived from the U.S.A. on September 10, 1999 and it was only then that she found out about the July 7, 1999 DARAB Decision. She purportedly tried to contact her counsel only to discover that he died on December 21, 1994. Respondent insisted that petitioners had already abandoned the landholding and failed to pay the lease and amortization payments therefor, thus, the cancellation of their CLT was justified. She argued that the CLT was rendered moot by the DARs grant of their application for retention of their property which included the subject landholding. In its Resolution dated February 7, 2001, the DARAB granted the petition for relief from judgment. The DARAB set aside its July 7, 1999 Decision primarily based on the DAR Order granting the application for retention, as well as its finding that Ferdinand and Feliciano dela Cruz abandoned the subject landholding when they went to the U.S.A. The dispositive portion of the Resolution reads: WHEREFORE, all of the above premises considered, and in the interest of agrarian justice, the decision of this Board dated July 7, 1999 is hereby SET ASIDE, and a new one is entered: 1. Declaring the dissolution of the tenancy relationship between the parties-litigants;

2. Declaring the cancellation of the CLT issued in the name of defendant Feliciano dela Cruz, the land subject thereof being part of the retention area of petitioner per order dated February 8, 1996; and 3. Ordering the respondents or any person acting in their behalf to vacate the subject land in favor of the petitioner. SO ORDERED. On August 7, 2002, the DARAB denied petitioners motion for reconsideration. On November 27, 2003, the DARAB likewise denied petitioners Ex-Parte Manifestation with Motion and Comments and Manifestation. Petitioners thereafter filed a petition for review with the Court of Appeals (CA). Pending the resolution of the appeal, Feliciano dela Cruz passed away. On January 19, 2006, the CA denied the petition. On March 21, 2006, the CA also denied petitioners motion for reconsideration. Consequently, petitioners filed this petition for review on certiorari based on the following grounds: A. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN AFFIRMING THE DECISION OF THE DARAB IN DSCA NO. 0151, WHICH GAVE DUE COURSE TO THE PETITION FOR RELIEF FROM JUDGMENT. B. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN AFFIRMING THE DECISION OF THE DARAB IN DSCA NO. 0151 WHEREBY IT WAS RULED THAT PETITIONERS HAD THE OBLIGATION TO PAY LEASE RENTALS AND WERE GUILTY OF ABANDONMENT.

C. THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN AFFIRMING THE DECISION OF THE DARAB IN DSCA NO. 0151 WHEREBY IT WAS RULED THAT RESPONDENT HAD THE RIGHT TO RETAIN THE SUBJECT PROPERTY BY VIRTUE OF THE DECISION IN THE DAR RETENTION CASE.

Petitioners argue that there was no basis for the grant of the petition for relief from judgment because it was respondents own neglect, and not her counsels demise, that caused the loss of her right to appeal. They claim that as early as June 5, 1995, respondent personally knew of the death of her lawyer and she could have employed a new counsel by then. To elaborate, petitioners narrate that, in another case pending before the Regional Trial Court (RTC) of Capas, Tarlac in which respondent is plaintiff, she was ordered to replace her former counsel and a new counsel, in fact, entered his appearance therein on June 5, 1995. And even assuming that respondent learned about the July 7, 1999 DARAB Decision only on September 10, 1999, she could have filed her appeal with the CA within 15 days from the said date. Secondly, petitioners contend that respondent had no legal standing to file the petition for relief from judgment because she no longer had any interest in the subject property since respondent already waived her rights over the same in favor of her siblings. In addition, petitioners posit that with the issuance of the CLT in favor of their father, their tenancy relationship with respondent ceased, and ownership over the subject property was effectively transferred to them. In any case, they deny that they have abandoned the landholding as it is still being cultivated by petitioner Renato dela Cruz, son of the farmer-beneficiary. Assuming that they have abandoned the property, the right of action to oust them from the property lies with the Republic of the Philippines to whom the property will revert. Finally, petitioners assert that the DAR Decision in the retention case is null and void for lack of due process; hence, the DARAB erred in relying on the said decision. They complain that they were not impleaded as parties in the said case, nor were they given notice of its filing. Petitioners likewise point out that the retention right of the heirs, who merely succeeded to the rights of their mother, the landowner, should be limited to five hectares only. The petition is meritorious. At the outset, we sustain respondents personality to file the petition for relief from judgment. A petition for relief from judgment is a remedy available to a party who, through fraud, accident, mistake or excusable negligence, was prevented from taking an appeal from a judgment or final order therein. The personality to file a petition for relief from judgment, therefore, resides in a person who is a party to the principal case. This legal standing is not lost by the mere transfer of the disputed property pendente lite. The original party does not lose his personality as a real party-in-interest merely because of the transfer of interest to another pendente lite. Nonetheless, even as we acknowledge the legal personality of respondent, we hold that the DARAB, as sustained by the CA, erred in granting the petition for relief from judgment. A petition for relief from judgment is an equitable remedy that is allowed only in exceptional cases when there is no other available or adequate remedy. When a party has another remedy available to him, which may be either a motion for new trial or appeal from an adverse decision of the trial court, and he was not prevented by fraud, accident, mistake or excusable negligence from filing such motion or taking such appeal, he cannot avail himself of this remedy. Indeed, relief will not be granted to a party who seeks avoidance from the effects of the judgment when the loss of the remedy at law was due to his own negligence; otherwise, the petition for relief can be used to revive the right to appeal which had been lost thru inexcusable negligence. In this case, respondents failure to avail herself of a motion for reconsideration or an appeal to the CA was due to her inexcusable negligence. Negligence to be excusable must be one which ordinary diligence and prudence could not have guarded against. We note that a copy of the July 7, 1999 DARAB Decision was in fact served on the respondent herself at her residence, based on her narration that when she arrived from the U.S.A., her helper handed to her the envelope containing the DARAB Decision. By her own account, she arrived on September 10, 1999. She cannot, therefore, feign ignorance of the said decision and blame the death of her counsel for such ignorance. Moreover, we cannot disregard the fact that respondent was able to engage the services of a new counsel to represent her in another case pending before the RTC as early as June 5, 1995, in compliance with the courts di rective for her to hire a substitute for her deceased counsel. Given this, respondent cannot claim lack of knowledge of the death of her former counsel, and use it as an excuse for her failure to file a motion for reconsideration or an appeal from the said DARAB Decision. Besides, the case had been pending before the DARAB for almost five years. To recall, she filed, through counsel, her notice of appeal on July 11, 1994 and her Appeal Memorandum on November 29, 1994. Her former counsel died barely a month later (December 21, 1994). Had respondent bothered to check the status of the case, she would have discovered her counsels demise. Parties are not expected to simply sit back and await the outcome of their case. They should be assiduous in keeping track of the status of any litigation to which they are a party. By allowing almost five

years to lapse without monitoring the status of her appeal, respondent exhibited a total lack of vigilance tantamount to inexcusable negligence. Not only did the DARAB err in granting the petition for relief from judgment, it also erred in canceling the petitioners CLT and ordering them to vacate the property based on a finding that petitioners had abandoned the landholding. However, contrary to petitioners posture, the issuance of a CLT does not vest full ownership in the holder. The issuance of the CLT does not sever the tenancy relationship between the landowner and the tenant-farmer. A certificate of land transfer merely evinces that the grantee thereof is qualified to avail himself of the statutory mechanism for the acquisition of ownership of the land tilled by him as provided under P.D. No. 27. It is not a muniment of title that vests in the farmer/grantee absolute ownership of his tillage. It is only after compliance with the conditions which entitle a farmer/grantee to an emancipation patent that he acquires the vested right of absolute ownership in the landholding a right which then would have become fixed and established, and no longer open to doubt or controversy. For this reason, the landowner retains an interest over the property that gives him the right to file the necessary action to evict the tenant from the landholding should there be an abandonment despite the fact that land acquired under P.D. No. 27 will not revert to the landowner. Nonetheless, we agree with petitioners that they have not abandoned the subject landholding, as in fact they have continuously cultivated the property. Abandonment requires (a) a clear and absolute intention to renounce a right or claim or to desert a right or property; and (b) an external act by which that intention is expressed or carried into effect. The intention to abandon implies a departure, with the avowed intent of never returning, resuming or claiming the right and the interest that have been abandoned. The immigration of the original farmer-beneficiary to the U.S.A. did not necessarily result in the abandonment of the landholding, considering that one of his sons, petitioner Renato dela Cruz, continued cultivating the land. Personal cultivation, as required by law, includes cultivation of the land by the tenant (lessee) himself or with the aid of the immediate farm household, which refers to the members of the family of the tenant and other persons who are dependent upon him for support and who usually help him in the [agricultural] activities. Without doubt, the landowners right of retention may be exercised over tenanted land despite the issuance of a CLT to farmer-beneficiaries. However, the cancellation of a CLT over the subject landholding as a necessary consequence of the landowners exercise of his right of retention is within the jurisdiction of the DAR Secretary, not the DARAB, as it does not involve an agrarian dispute. Under Section 1(g), Rule II of the then DARAB Rules of Procedure, matters involving strictly the administrative implementation of agrarian laws shall be the exclusive prerogative of and cognizable by the Secretary of the DAR. Although Section 1(f) of the said Rules provides that the DARAB shall have jurisdiction over cases involving the issuance of a CLT and the administrative correction thereof, it should be understood that for the DARAB to exercise jurisdiction in such cases, there must be an agrarian dispute between the landowner and the tenant. In Tenants of the Estate of Dr. Jose Sison v. Court of Appeals , the Court sustained the authority or jurisdiction of the DAR Secretary to cancel the CLT issued to tenant-beneficiaries after the landowners right to retain the subject landholding was upheld. The Court ruled that the issuance, recall or cancellation of certificates of land transfer falls within the Secretarys administrative jurisdiction as implementor of P.D. No. 27. To conclude, respondents remedy is to raise before the DAR Secretary the matter of cancellation of petitioners CLT as an incident of the order granting the landowners application for retention over the said landholding. In the same forum, petitioners can raise the issue of the validity of the DAR order granting the application for retention based on their claim of denial of due process, or in a separate action specifically filed to assail the validity of the judgment. A collateral attack against a judgment is generally not allowed, unless the judgment is void upon its face or its nullity is apparent by virtue of its own recitals. But as a reminder to respondent, this tack can achieve only the cancellation of petitioners CLT. Under Sec. 6 of R.A. No. 6657, if the area retained is tenanted, the tenant shall have the option to choose whether to remain therein or be a beneficiary in the same or another agricultural land with similar or comparable features. Petitioners may not be ejected from the subject landholding even if their CLT is canceled, unless they choose to be beneficiaries of another agricultural land. WHEREFORE, premises considered, the petition is GRANTED. The January 19, 2006 Decision and March 21, 2006 Resolution of the Court of Appeals are REVERSED and SET ASIDE. Consequently, the February 7, 2001 DARAB Decision granting the petition for relief from judgment is SET ASIDE and the July 7, 1999 DARAB Decision is REINSTATED. SO ORDERED.

G.R. No. 74586 October 17, 1986 SERVICE SPECIALISTS, INCORPORATED, petitioner, vs. THE SHERIFF OF MANILA, DEPUTY SHERIFF ENRIQUITO A. VIOLETA and ROY DIAZ, respondents.

FERIA, J.: This is a petition for mandamus to compel respondents Sheriff and Deputy Sheriff of Manila to proceed with the sale at public auction of the properties of private respondent. which had been levied upon on execution of a final and executory judgment , pending appeal from an order dismissing a petition. for relief from said judgment. On February 25, 1985, petitioner filed with the Regional Trial Court of Manila. Branch L. an action for replevin and damages against private respondent which was docketed as Civil Case No. 85-29444. After private respondent had filed his answer, a pre-trial conference was set by the lower court of which the counsels were duly notified and they were, furthermore. commissioned to secure the presence of the parties they represented. Both private respondent and his counsel failed to appear at the pre-trial and, as prayed for by counsel for petitioner, private respondent was declared as in default. On August 9, 1985, after petitioner had presented its evidence ex-parte. the lower court rendered a decision the dispositive part of which read as follows: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendant Roy Diaz, ordering the latter: 1. To pay the plaintiff the amount of P83,412.76. as his total obligation. including attorney's fees, interests, liquidated damages, bonding fee, and repossession expenses: and 2. To pay the costs of suit. On December 10, 1985, after said decision had become final, the lower court granted the motion for execution filed by petitioner. On December 24, 1985, private respondent filed a petition for relief from judgment which was docketed as Civil Case No. 85-34098 and subsequently assigned to Branch XII of the Regional Trial Court of Manila. Petitioner filed a motion to dismiss the petition for relief on the grounds that the petition was filed out of time; that it failed to indicate a good and substantial defense; that it failed to show the fraud, accident, mistake or excusable negligence relied upon as basis for the petition; and that it was not filed in the same court and in the same cause as required by Section 3 of Rule 38. Private respondent filed an opposition to said motion to dismiss. On March 21, 1986, the lower court (Branch XII) issued an order dismissing the petition for relief for lack of jurisdiction to hear and determine the same. On April 2, 1986, private respondent filed a notice of appeal from the order of dismissal to the Intermediate Appellate Court. On April 9, 1986, a writ of execution was issued pursuant to the order of execution issued by the lower court (Branch L) on December 10, 1985. On April 28, 1986, respondent deputy sheriff issued a notice of levy and sale of the properties of private respondent levied on, but on the date of the auction sale, said respondent sheriff refused to proceed with the auction because of the protest of private respondent based on his appeal from the order dismissing his petition for relief. Hence, petitioner filed the present petition for mandamus. The petition should be granted. Although private respondent correctly states that "after the decision in Civil Case No. 85-29444 had already become final and executory, and appeal was no longer available and feasible under the ordinary course of law, petition for relief from judgment is the most available remedy," he did not comply with the provision of Section 2 of Rule 38 which reads: Petition to Court of First Instance for relief from judgment or other proceeding thereof.-When a judgment or order is entered, or any other proceeding is taken, against a party in a Court of First In- stance through fraud, accident, mistake, or excusable negligence, he may file a petition in such court and in the same cause praying that the judgment, order or proceeding be set aside. In the case of Braca vs. Tan, this Court held: It is clear from the foregoing provisions of Rule 38 that the petition for relief from a judgment of the Court of First Instance must be filed in the same court that rendered the judgment and in the same cause wherein the judgment was rendered; and that if the court finds the allegations of the petition to be true, it shall set aside the judgment and try the principal case upon its merits as if a timely motion for new trial had been granted therein.

It results therefore, that the Court of First Instance of Rizal has no jurisdiction to hear and decide the petition for relief from the judgment of the Court of First Instance of Negros Occidental not only because section 2 of Rule 38 expressly requires that such petition be filed in the latter court and in the same case but also because, although the principal case could have been originally brought either in the Court of First Instance of Rizal where the defendant has its domicile, or in the Court of First Instance of Negros Occidental where the plaintiffs reside, once the latter court had taken cognizance of said case, it acquired jurisdiction to the exclusion of the former. To permit the Court of First Instance of Rizal to set aside the judgment rendered by the Court of First Instance of Negros Occidental in civil case No. 1007 and to try said case upon its merits, would produce the anomalous effect of depriving the latter court of the jurisdiction which it had already acquired over the case and of transferring that case to another court of the same category at the instance of the losing party. (84 Phil. 582, 584-585) In the case at bar, private respondent filed his petition for relief also with the Regional Trial Court of Manila, but he did not file it in the same case; he filed it in another case, No. 85- 34098. Branch XII of the lower court to which Civil Case No. 8534098 was assigned could not take cognizance of the petition for relief, because it was not the same branch of the court which rendered the judgment from which relief was sought. It was Branch L of the lower court which could properly take cognizance of said petition and which, if it found the allegations thereof to be true, could order the judgment complained of to be set aside and proceed to hear and determine the case as if a timely motion for new trial had been granted (Sections 6 and 7 of Rule 38). Private respondent, however, contends that in his petition for relief from judgment, one of the respondents therein named was the judge himself who presided over Civil Case No. 85-29444, for which reason the petition could not be filed in his sala. This is erroneous. The judge who rendered the judgment is not a party in a petition for relief from said judgment. A petition for relief from judgment is not like a petition for certiorari wherein the judge is made a party respondent because he is alleged to have acted without or in excess of his jurisdiction or with grave abuse of discretion (Sections 1 and 5 of Rule 65). In a petition for relief from judgment, the petitioner claims that due to extrinsic fraud, accident, mistake, or excusable negligence, he has been unjustly deprived of a hearing or has been prevented from taking an appeal. Private respondent further contends that in view of his appeal from the order dismissing his petition for relief, the final and executory judgment rendered against him in Civil Case No. 85-29444 could no longer be executed. This is untenable. In order to stay execution, it was necessary for private respondent to obtain a writ of preliminary injunction in accordance with Section 5 of Rule 38, which provides: Preliminary injunction pending proceedings. The court in which the petition is filed, or a judge thereof, may grant such preliminary injunction as may be necessary for the preservation of the rights of the parties pending the proceeding, upon the filing by the petitioner of a bond to the adverse party, conditioned that if the petition is dismissed or the petitioner fails on the trial of the case upon its merits. he will pay the adverse party all damages and costs that may be awarded to him by reason of the issuance of such injunction or the other proceedings following the petition; but such injunction shall not operate to discharge or extinguish any lien which the adverse party may have acquired upon the property of the petitioner. As this Court held in the case of Asian Surety & Insurance Co., Inc. vs. Relucio: The necessity of securing a writ of preliminary injunction to suspend or stay the execution of the judgment sought to be set aside under Rule 38, stems from the fact that such judgment had already become final and executory (Veluz v. Justice of the Peace, 42 Phil 557; Anuran v. Aquino, 38 Phil. 29) otherwise the remedy would be a motion for new trial under Rule 37 of the Rules. There is no question then, that unless restrained such judgment could be executed as it would then be the ministerial duty of the court to issue the writ of execution. (Buenaventura v. Garcia, 78 Phil. 759; Federal Films, Inc. v. Ocampo, 78 Phil. 479) . .. While it is true that in ordinary cases, by the perfection of an appeal, under section 9 of Rule 41 of the Rules, the trial court loses jurisdiction over its judgment, and cannot order its execution, the judgment adverted to refers to one which has not attained finality because of the timely appeal therefrom. Such is not applicable to an appeal from an order dismissing or denying a petition for relief from judgment, under Rule 38, because the judgment from which relief is sought is already final and executory. And the only way by which the execution of said judgment could be suspended, is that prescribed in section 5 of Rule 38. (Sanchez v. Serrano and Rodas. 83 Phil. 838) . . . (47 SCRA 225, 234-235) If the lower court does not grant preliminary injunction, the appellate court may grant the same. (See Resolution in Vda. de Sayman vs. Court of Appeals, April 28. 1983. 121 SCRA 650.) Private respondent invokes the second paragraph of Section 2 of Rule 41 which provides: A judgment denying relief under Rule 38 is subject to appeal, and in the course thereof, a party may also assail the judgment on the merits, upon the ground that it is not supported by the evidence or it is contrary to law. and cites the ruling in the case of Vda. de Sayman vs. Court of Appeals (120 SCRA 676) to the effect that in an appeal from the denial of a petition for relief, the appellate court is not limited to the issue of whether or not the denial was correct.

We deem it necessary to clarify the second part of the abovequoted provision which has given rise to some confusion. There is no question that a judgment or order denying relief under Rule 38 is final and appealable, unlike an order granting such relief which is interlocutory (Samia vs. Medina, 56 Phil. 613). However, the second part of the above-quoted provision (that in the course of an appeal from the denial or dismissal of a petition for relief, a party may also assail the judgment on the merits) may give the erroneous impression that in such appeal the appellate court may reverse of modify the judgment on the merits. This cannot be done because the judgment from which relief is sought is already final and executory. (See Villa Rey Transit, Inc. vs. Far East Motor Corporation, 81 SCRA 298.) The purpose of the rule is to enable the appellate court to 'determine not only the existence of any of the grounds relied upon whether it be fraud, accident, mistake or excusable negligence, but also and primarily the merit of the petitioner's cause of action or defense, as the case may be. If the appellate court finds that one of the grounds exists and, what is of decisive importance, that the petitioner has a good cause of action or defense, it will reverse the denial or dismissal, set aside the judgment in the main case and remand the case to the lower court for a new trial in accordance with Section 7 of Rule 38. On the other hand, if the petition for relief is against an order disallowing an appeal for having been filed out of time and the petition is denied or dismissed, in the appeal from the denial or dismissal the appellate court must also be apprised of the merit of the case of the party who assails such denial or dismissal. If the appellate court finds a justifiable ground and a meritorious case, it will reverse the denial or dismissal and allow the appeal from the decision in the main case. (See Vda. de Sayman vs. Court of Appeals, February 21, 1983, 120 SCRA 676, 684-685.) Petitioner in its Reply urges this Court to make a finding that the petition for relief from judgment was filed out of time as this would render the discussion on the merits of the petition moot and academic. It maintains that a copy of the decision against private respondent must have been received by the latter's counsel on August 29, 1985, the date when its counsel received a copy thereof; that the 60-day period for filing a petition for relief should be counted from said date; and that when the petition for relief was filed on December 24, 1985, 117 days had elapsed. On September 1, 1986, the Court required private respondent to file a Rejoinder to petitioner's Reply, particularly specifying the date on which his counsel received a copy of the decision dated August 9, 1985. Unfortunately, private respondent did not file a Rejoinder and merely reiterated the evasive and confusing allegation in his petition for relief, as follows: 8. The aforesaid Decision/Judgment, Annexes A, A-I and A- 2, of respondent Judge, actually came to the knowledge of herein petitioner on November 29, 1984, when he himself instead of his counsel of record, was requested by the latter to sign a pleading Omnibus Motion' with like date, after said counsel of record informed petitioner of the existence of plaintiff's motion for issuance of writ of execution, dated October 3, 1985, and set for hearing on November 29, 1985. The failure of private respondent to comply with the resolution requiring him to specify particularly the date on which his counsel received a copy of the decision supports petitioner's contention that the petition for relief was filed way beyond the reglementary period of sixty days after the petitioner learns of the judgment (Section 3 of Rule 38), inasmuch as said period begins to run from the date the petitioner's lawyer is notified of the decision. (See Olivares vs. Leola, 97 Phil. 253; Mercado vs. Domingo, 19 SCRA 961.) Moreover, an examination of the record also supports petitioner's contention that private respondent has resorted to dilatory tactics in the case at bar. The main ground of the petition for relief is that no notice of the scheduled pre-trial conference was sent to private respondent himself and such notice was sent only to the counsels who were furthermore commissioned to secure the presence of the parties they represented. Private respondent claims that this is not the notice of pre-trial contemplated by law. This claim has no merit. As early as October 30, 1975, this Court en banc ruled in the case of Taroma vs. Sayo: For the guidance of the bench and bar, therefore, the Court in reaffirming the ruling that notice of pre-trial must be served separately upon the party and his counsel of record, restates that while service of such notice to party may be made directly to the party, it is best that the trial courts uniformly serve such notice to party through or care of his counsel at counsel's address with the express imposition upon counsel of the obligation of notifying the party of the date, time and place of the pre-trial conference and assuring that the party either appear thereat or deliver to counsel a written authority to represent the party with power to compromise the case, with the warning that a party who fails to do so may be non-suited or declared (as) in default. (67 SCRA 508, 512) The attached affidavit of merit does not state facts showing a good and substantial defense. Private respondent does not claim payment of his obligation; he merely questions the assignment of the credit in favor of petitioner. Finally, to make matters worse, private respondent merely filed a notice of appeal to the Intermediate Appellate Court from the order of the lower court which dismissed his petition for relief from judgment "for lack of jurisdiction to hear and determine the same." The appeal should have been made to this Court through a petition for review on certiorari in accordance with the Judiciary Act of 1948 as amended by Republic Act No. 5440 and Section 25 of the Interim Rules. The writ of execution in this case was issued on April 9, 1986 pursuant to the order dated December 10, 1985 granting the motion for execution. The levy on execution was made within the reglementary period of sixty days after its receipt by

respondent Deputy Sheriff Section 11 of Rule 39), as shown by the Notice of Levy and Sale dated April 28, 1986. Consequently, the sale on execution may properly proceed. It is the ministerial duty of the lower court to order the execution of its final and executory judgment (Far Eastern Surety & Insurance Company, Inc. vs. Hernandez, October 3. 1975, 67 SCRA 256) and it is the legal duty of respondent sheriffs to enforce the order of execution. WHEREFORE, respondents Sheriff and Deputy Sheriff of Manila are directed to proceed with the sale at public auction of the properties of private respondent which had been levied upon on execution. Costs against private respondent. SO ORDERED.

G.R. No. 143976

April 3, 2003

Spouses OSCAR and HAYDEE BADILLO, petitioners, vs. Hon. ARTURO G. TAYAG as Presiding Judge of the Regional Trial Court, Branch 79, Malolos, Bulacan; and the NATIONAL HOUSING AUTHORITY, respondents. x---------------------------------------------------------x G.R. No. 145846 April 3, 2003 Spouses OSCAR and HAYDEE BADILLO, petitioners, vs. Hon. BASILIO A. GABO JR. as Presiding Judge of the Regional Trial Court, Branch 11, Malolos, Bulacan; and the NATIONAL HOUSING AUTHORITY, respondents. PANGANIBAN, J.: The National Housing Authority (NHA), a government-owned and controlled corporation, is exempt from paying appellate docket fees when it sues or is sued in relation to its governmental function of providing mass housing. It is likewise exempt from filing a supersedeas bond that will stay the execution of a forcible entry case. In order to have some bases for fixing the reasonable amount of rent in a forcible entry case, courts must rely on the evidence presented by the parties. The Case Before us are two (2) consolidated Petitions for Review under Rule 45 of the Rules of Court, seeking to set aside two 1 rulings of the Regional Trial Court (RTC) of Malolos, Bulacan. The first one is the July 19, 2000 Order issued by Branch 2 3 79 in Case No. P-410-M-2000, annulling both the May 23, 2000 Order and the May 30, 2000 Writ of Execution issued by the Municipal Trial Court (MTC) of San Jose del Monte, Bulacan. The dispositive portion of this assailed RTC Order reads as follows: "WHEREFORE, the [O]rder of the [t]riaI [c]ourt dated May 23, 2000 is hereby annulled. "The [W]rit of [E]xecution issued by the clerk of court of the Municipal Trial Court of San Jose del Monte Bulacan is also annulled. "Prohibiting the [t]rial [c]ourt from enforcing the [W]rit; and commanding the Municipal Trial Court to transmit the records of the case to the Regional Trial Court of Bulacan together with the Money Order of [t]wo hundred [p]esos Annex I and 1-2 as appellate docket fee and the alleged Supersedeas Bond per [Annex] A, A -1, A-2 to A-3 of the OPPOSITION TO MOTION TO CLARIFY (with manifestation) filed by Petitioner NHA received by this 4 [C]ourt on July 17, 2000 although dated July 14, 2000." The second ruling being contested is the October 23, 2000 Decision of Branch 11 in Civil Case No. 512-M-2000, which 6 modified the February 1, 2000 Decision of the MTC of San Jose del Monte, Bulacan. The challenged RTC Decision disposed as follows: "WHEREFORE, the appealed decision is hereby AFFIRMED insofar as defendants are ordered to vacate plaintiffs property and return the possession thereof to the latter and to pay plaintiffs, jointly and severally 7 P20,000.00 for attorneys fees and P20,000.00 for litigation expenses and to pay the costs are concerned." Since the parties were the same and the issues related, the two Petitions were consolidated by this Court in its Resolution 8 of October 17, 2001. The Facts Petitioners are plaintiffs in a forcible entry/ejectment case docketed as Civil Case No. 263-94 in the MTC of San Jose del Monte, Bulacan, entitled "Spouses Oscar and Haydee Badillo v. Triad Construction and Development Corporation and 9 National Housing Authority." In its February 1, 2000 Decision, the MTC ordered the NHA to vacate the disputed land; to return possession thereof to petitioners; to pay rental for its use and occupation at the rate of P10 per square meter per month; and to shoulder the attorneys fees, the litigation expenses and the costs of suit. The disputed parcel of land was part of the Bagong Silang Resettlement Project (BSRP) of the NHA. The NHA contended that the property was part of the Tala Estate and was among the 598 hectares reserved by the government for its housing resettlement site, pursuant to Presidential Proclamation No. 843 issued by then President Ferdinand E. Marcos on April 26, 1971. In June 1994, the NHA offered for bidding the development of certain portions of the BSRP. It eventually contracted with the Triad Construction and Development Corporation ("Triad") for the development of parts of the site. These were then developed and subdivided into smaller lots that were allocated, awarded and distributed by the NHA to qualified beneficiaries. On the other hand, petitioners claimed that they were the owners and exclusive possessors of a portion of the land that had been awarded by the NHA to Triad. They argued that the NHA intruded on, occupied and developed their property despite their protests.
5

Upon receipt of the February 1, 2000 Decision of the MTC, the NHA filed a Notice of Appeal with the same court on February 24, 2000. The NHA, however, did not pay the appellate docket fees within the reglementary period. 11 Consequently, petitioners filed with that court a Motion for the immediate issuance of a writ of execution and demolition. They contended that because of the NHAs failure to pay the appellate docket fees within the prescribed period, the MTC Decision became final. After a hearing on the Motion, the MTC promulgated an Order on May 23, 2000, authorizing the issuance of a writ of execution in favor of petitioners: "For failure of the National Housing Authority to comply with the requirements laid down under Section 5 of Rule 40 as regards the payment of docket fee and for its failure to comply with Section 19 of Rule 70 in regard to the payment of the supersedeas bond, the execution of the judgment rendered in this case has become a ministerial duty of the court in view of the mandatory nature of said requirements. "Let therefore, a writ of execution be issued immediately against the defendants."
13 12

10

Thereafter, the Writ of Execution was actually issued by the MTC on May 30, 2000. Pursuant thereto, the sheriff served a Notice of Garnishment of NHAs funds in the Landbank of the Philippines. The bank, however, refused to release the garnished amount. On June 9, 2000, the NHA filed a Motion to set aside the Writ of Execution and the Notice of Garnishment. 16 was, however, denied by the MTC in its June 23, 2000 Order.
15

14

The Motion

The NHA paid the appellate dockets fees only on June 29, 2000 -- four months late. It simultaneously filed a Petition for 17 Certiorari, Prohibition, Mandamus and Injunction before the RTC of Malolos, Bulacan, assailing the MTCs May 23, 2000 Order and May 30, 2000 Writ of Execution. Acting on the NHA Petition, RTC Executive Judge Danio A. Manalastas issued a 72-hour Temporary Restraining Order. Thereafter, the case was assigned to RTC Branch 79, which issued the first assailed July 19, 2000 Order annulling the Writ. After declaring that the NHA had been able to perfect its appeal on time, the RTC ordered the MTC to transmit the records of the case for appropriate appellate proceedings.
18

Upon transmittal of the records from the MTC, the case was raffled to RTC Branch 11, which issued the second assailed October 23, 2000 Decision. This Decision was appealed by the NHA to the Court of Appeals (CA). The appeal, docketed as CA-GR No. 61981, is still pending resolution. Rulings of the RTC The NHA was able to perfect its appeal on time despite its nonpayment of appellate docket fees, according to the ruling of RTC Branch 79. The NHA as a government-owned corporation was presumed to be always solvent and thus exempt from filing a supersedeas bond, which would stay the immediate execution of a forcible entry case. With the perfection of the appeal, the MTC lost jurisdiction to issue and enforce the Writ of Execution. Partly affirming the MTC, RTC Branch 11 held that petitioners were entitled to the right of possession of the property and to the award of damages, but that the grant of rental was baseless. Hence, this recourse.
19

Issues Petitioners raise the following issues for our consideration: I "Whether or not the Order of Respondent Judge Gabo deleting the payment of rentals for the use and occupation 20 of the lot in question is in accordance with law and existing jurisprudence on the matter" II "Whether or not NHA perfected its appeal to the RTC Bulacan despite failure to pay the docket/appeal fee within the 15 day period provided for in Section 5, Rule 40 of the 1997 Rules of Civil Procedure III "Whether or not the NHA being a government corporation is exempt from the posting of the supersedeas bond to stay execution as provided for in Section 19, Rule 70 of the 1997 Rules of Civil Procedure IV "Whether or not RTC Bulacan was correct in annulling the Order dated May 23, 2000; the Writ of Execution and 21 the Notice of Garnishment issued by MTC, Bulacan" These issues can be more clearly restated thus:

(1) Is the failure of the NHA to pay the appellate docket fee within the fifteen-day reglementary period a ground to dismiss its appeal? (2) Is the NHA exempt from filing the supersedeas bond in order to stay the execution of the MTC judgment? (3) Was it proper for RTC Branch 11 to delete the rentals awarded by the MTC? Ruling of the Court The Petitions are unmeritorious. First Issue: Payment of Appellate Docket Fees Created by virtue of PD No. 757, the NHA is a government-owned and controlled corporation with an original charter. As a general rule, however, such corporations -- with or without independent charters -- are required to pay legal fees under Section 21 of Rule 141 of the 1997 Rules of Civil Procedure: "SEC. 21. Government Exempt. - The Republic of the Philippines, its agencies and instrumentalities, are exempt from paying the legal fees provided in this rule. Local governments and government-owned or controlled 23 corporations with or without independent charters are not exempt from paying such fees." On the other hand, the NHA contends that it is exempt from paying all kinds of fees and charges, because it performs 24 governmental functions. It cites Public Estates Authority v. Yujuico, which holds that the Public Estates Authority (PEA), a government-owned and controlled corporation, is exempt from paying docket fees whenever it files a suit in relation to its governmental functions. We agree. Peoples Homesite and Housing Corporation v. Court of Industrial Relations mass housing is a governmental function:
25 22

declares that the provision of

"Coming now to the case at bar, We note that since 1941 when the National Housing Commission (predecessor of PHHC, which is now known as the National Housing Authority [NHA] was created, the Philippine government has pursued a mass housing and resettlement program to meet the needs of Filipinos for decent housing. The agency tasked with implementing such governmental program was the PHHC. These can be gleaned from the provisions of Commonwealth Act 648, the charter of said agency. "We rule that the PHHC is a governmental institution performing governmental functions. "This is not the first time We are ruling on the proper characterization of housing as an activity of the government. In the 1985 case of National Housing Corporation v. Juco and the NLRC (No. L-64313, January 17, 1985, 134 SCRA 172), We ruled that housing is a governmental function." While it has not always been eas y to distinguish governmental from proprietary functions, the Courts declaration in the Decision quoted above is not without basis. Indeed, the characterization of governmental functions has veered away from 26 the traditional constituent-ministrant classification that has become unrealistic, if not obsolete. Justice Isagani A. Cruz 27 avers: "[I]t is now obligatory upon the State itself to promote social justice, to provide adequate social services to 28 promote a rising standard of living, to afford protection to labor to formulate and implement urban and agrarian reform programs, and to adopt other measures intended to ensure the dignity, welfare and security of its citizens. x x x. These functions, while traditionally regarded as merely ministrant and optional, have been made compulsory by the 29 Constitution." In addition, the NHA is mandated by PD No. 757 to develop and implement a comprehensive, integrated housing 30 31 program for the greatest number of people. Thus, to be able to perform its governmental functions, the housing agency is vested with sovereign powers. Such powers include, among others, the exercise of the right of eminent domain or the right to acquire by purchase privately owned lands for purposes of housing development, resettlement, and related 32 services and facilities. Furthermore, under the Urban Development and Housing Act of 1992, the NHA, in cooperation with other government units and agencies, is mandated to identify and acquire lands for socialized housing for the underprivileged and the 33 homeless. Notably, it was in its performance of this governmental function to provide mass housing that the NHA was sued by petitioners. Perfection of the Appeal We agree with the RTC that, insofar as appeals from the MTC to the RTC are concerned, the 1997 Rules of Civil Procedure do not mandate the dismissal of an appeal as a consequence of the nonpayment of the required fee. Martinez v. Court of Appeals holds that in such appeals, "the failure to pay the appellate docket fees does not automatically result in the dismissal of the appeal, the dismissal being discretionary on the part of the appellate court." 35 36 While that case was governed by Sections 20 and 23 of the Interim Rules and Guidelines issued by the Court on
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January 11, 1983 to implement the Judiciary Reorganization Act of 1981 (BP Blg. 129), the present Rules lead to a similar conclusion. Under the 1997 Rules of Civil Procedure, parties perfect an appeal from the judgment of the MTC to the RTC by filing a notice of appeal within the fifteen day reglementary period, as provided under Section 4 of Rule 40 and Section 9 of Rule 41: Rule 40 -"SEC. 4. Perfection of appeal; effect thereof. The perfection of the appeal and the effect thereof shall be governed by the provisions of section 9, Rule 41. Rule 41-"SEC. 9. Perfection of appeal; effect thereof. - A partys appeal by notice of appeal is deemed perfected as to him upon filing of the notice of appeal in due time. xxx xxx xxx

"In appeals by notice of appeal, the court loses jurisdiction over the case upon the perfection of the appeals filed in due time and the expiration of the time to appeal of the other party." Fontanar v. Bonsubre is a case in point. It holds that in appeals from the MTC to the RTC, failure to pay the appellate docket fee within the fifteen-day reglementary period bestows on the appellate court a directory, not a mandatory, power to dismiss an appeal. The Court ratiocinated as follows: "x x x [T]his Court restated the importance and real purpose of the remedy of appeal as an essential part of our judicial system and advised the courts to proceed with caution so as not to deprive a party of a right to appeal with the instruction that every party-litigant should be afforded the amplest opportunity for the proper and just disposition if his cause, freed from the constraints of technicalities. Rightly so, for the payment of the appellate docket fee is not a requirement for the protection of the prevailing party, and non-compliance therewith within the time prescribed causes no substantial prejudice to anyone." On the other hand, the cases cited by petitioners involve appeals -- not from the MTC to the RTC -- but from the RTC to 38 the CA and from the CA to the SC, for which the payment of appellate fees is indeed mandatory according to the Rules. 39 We quote Manalili v. Arsenio and De Leon: "Appeal is not a right, but a mere statutory privilege. Corollary to this principle is that the appeal must be exercised strictly in accordance with provisions set by law. x x x "x x x [T]he payment of the appellate docket fee is not a mere technicality of law or procedure. It is an essential requirement, without which the decision or final order appealed from would become final and executory as if no 40 appeal was filed at all." In the instant cases, when the NHA filed a Notice of Appeal on February 22, 2000 -- two days before the appeal period lapsed it perfected its appeal and the MTC thereby lost its jurisdiction. The MTC therefore acted without jurisdiction in issuing the May 23, 2000 Order and the May 30, 2000 Writ of Execution. Second Issue: The Filing of a Supersedeas Bond There is a rationale for requiring a losing party to file a supersedeas bond in order to stay the immediate execution of a judgment in an ejectment case. Such bond is required to assure the payment of damages to the winning party in case the appeal is found frivolous. In the present cases, the posting of a supersedeas bond is not necessary to stay the execution of the MTC Order. When a case involves provable rents or damages incurred by a government-owned or controlled corporation, the real party in interest is the Republic of the Philippines. When the State litigates, it is not required to put up a bond for damages or even an appeal bond -- either directly or indirectly through its authorized officers -- because it is presumed to be always 41 solvent. Thus, it would be unnecessary to ask the NHA to file a bond because to do so would be to indirectly require the government to submit the bond. And the State is not required to file a bond for the obvious reason that it is capable of 42 paying its obligation. In any event, the NHA has already paid the appellate docket fees and filed the supersedeas bond as ordered by the RTC, albeit late. Third Issue: The Award of Rentals Citing Sia v. Court of Appeals, petitioners argue that the MTC may take judicial notice of the reasonable rental or the general price increase of land in order to determine the amount of rent that may be awarded to them. In that case, however, this Court relied on the CAs factual findings, which were based on the evidence presented before the trial court.
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In determining reasonable rent, the RTC therein took account of the following factors: 1) the realty assessment of the land, 2) the increase in realty taxes, and 3) the prevailing rate of rentals in the vicinity. Clearly, the trial court relied, not on mere judicial notice, but on the evidence presented before it. Indeed, courts may fix the reasonable amount of rent for the use and occupation of a disputed property. However, petitioners herein erred in assuming that courts, in determining the amount of rent, could simply rely on their own appreciation of land values without considering any evidence. As we have said earlier, a court may fix the reasonable amount of rent, but it must still base its action on the evidence adduced by the parties. In Herrera v. Bollos, the trial court awarded rent to the defendants in a forcible entry case. Reversing the RTC, this Court declared that the reasonable amount of rent could be determined not by mere judicial notice, but by supporting evidence: "x x x. A court cannot take judicial notice of a factual matter in controversy. The court may take judicial notice of matters of public knowledge, or which are capable of unquestionable demonstration, or ought to be known to judges because of their judicial functions. Before taking such judicial notice, the court must allow the parties to be heard thereon. Hence, there can be no judicial notice on the rental value of the premises in question without 45 supporting evidence. In the instant cases, the RTC has already declared that there is no evidence on record to support the MTCs award of rent. We find no cogent reason to disturb this pronouncement. Finally, the belated prayer of the NHA for the dismissal of the forcible entry case cannot be granted, because it appealed the RTC Decision to the CA, not to this Court. As a mere respondent in these appealed cases, the NHA is not entitled to any affirmative relief. Besides, we would not want to preempt the CAs action on the said appeal. WHEREFORE, the Petitions are hereby DENIED. Costs against petitioners. SO ORDERED.
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