EN BANC

DOMINGO NEYPES, LUZ G.R. No. 141524

FAUSTINO, ROGELIO FAUSTINO,

LOLITO VICTORIANO, JACOB

OBANIA AND DOMINGO Present :

CABACUNGAN,

Petitioners, DAVIDE, JR., C.J.

PUNO,

PANGANIBAN,
QUISUMBING,
YNARES-SANTIAGO,

SANDOVAL-GUTIERREZ,

CARPIO,

- v e r s u s - AUSTRIA-MARTINEZ,

CORONA,

CARPIO MORALES,

CALLEJO, SR.,
AZCUNA,
TINGA,
CHICO-NAZARIO and
GARCIA, JJ.

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,

Respondents. Promulgated :

September 14, 2005

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

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 Banks 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 order[2] 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 15 th 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 appeal[4]

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.

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

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 Apuyans 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

Reorganization[20] that drafted BP 129, the raison d etre behind the

amendment was to shorten the period of appeal[21] 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 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] 43[28]

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 agencies[31] 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 Courts

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. IAC[35] 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.

RENATO C. CORONA
Associate Justice

WECONCUR:

HILARIO G. DAVIDE, JR.

Chief Justice

REYNATO S. PUNO ARTEMIO V. PANGANIBAN

 Acting Chief Justice
Associate Justice

CONSUELO YNARES-SANTIAGO
LEONARDO A. QUISUMBING
Associate Justice Associate Justice

ANGELINA SANDOVAL-GUTIERREZ ANTONIO T. CARPIO

Associate Justice Associate Justice

MA. ALICIA M. AUSTRIA-MARTINEZ CONCHITA CARPIO MORALES

Associate Justice
Associate Justice

ROMEO J. CALLEJO, SR. ADOLFO S. AZCUNA

Associate Justice Associate Justice

DANTE O. TINGA MINITA V. CHICO-NAZARIO

Associate Justice Associate Justice

 CANCIO C. GARCIA
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby

certified that the conclusions in the above Resolution were reached
in consultation before the case was assigned to the writer of the
opinion of the Court.

HILARIO G. DAVIDE, JR.

Chief Justice

[1] Exh. B, Records, p. 37.

[2] Exh. E, Records, p. 47.

[3] Exh. G, Records, pp. 56-57.

[4] Exh. H, Records, p. 58.

[5] Exh. I, Records, pp. 61-62. The trial court received the notice of appeal dated July 27, 1998
on July 31, 1998. According to the court, it was eight days late, counted from July 23,
1998, which was the last day to file the notice since petitioners had one (1) day left to file
it.

[6] Exh. K, Records, pp. 67-69.

[7] Rollo, p. 41.

[8] Penned by Justice Roberto A. Barrios and concurred in by Justices Godardo O. Jacinto and
Eriberto U. Rosario, Jr. of the 16th Division.

[9] Rollo, p. 12.

M.A. Santander Construction, Inc. v. Zenaida Villanueva, G.R. No. 136477, November 10,
[10]
2004.

[11] The Judiciary Reorganization Act of 1980.

[12] Intramuros Tennis Club, Inc. (ITC) et al. v. Philippine Tourism Authority, et al., G.R. No.
135630, 26 September 2000, 341 SCRA 90.

[13] G.R. No. 145911, July 7, 2004.

[14] G.R. No. 129980, September 20, 2004.

[15] Supra.

[16] Bank of America v. Gerochi, G.R. No. 73210, 10 February 1994, 230 SCRA 9; Dayrit v.
Philippine Bank of Communications, 435 Phil. 120 (2002); Gallego v. Spouses Galang,
G.R. No. 130228, July 27, 2004.

[17] BPI Data Systems Corp. v. Hon. Court of Appeals and Commissioner of Internal Revenue,
324 Phil. 267 (1996).

[18] Borre v. Court of Appeals, No. L-57204, 14 March 1988, 158 SCRA 561.

[19] Appeals from the Court of First Instance (now RTC) and the Social Security Commission to
the Court of Appeals.

[20] Created by virtue of Executive Order No. 611.

[21] MR. MILLORA: Mr. Speaker, although I am a Member of the committee I have been
granted permission to ask questions about some unresolved matters and I would like to
begin with the period of appeal.
Under Section 39, Mr. Speaker, the period for appeal from final orders, resolutions, awards,
judgments or decisions of any court in all cases shall be fifteen days. This is very good
because it will shorten the period to appeal. Under our rules today, the period to appeal is
30 days. x x x

(February 2, 1981, Record of the Batasan, Volume IV, p. 2004.)

[22] Ramos v. Bagasao, No. L-51552, 28 February 1980, 96 SCRA 395; Republic v. Court of
Appeals, No. L-31303-04, 31 May 1978, 83 SCRA 453; Olacao v. National Labor
Relations Commission, G.R. No. 81390, 29 August 1989, 177 SCRA 38.

[23] No. L-27197, 28 April 1980, 97 SCRA 138.

[24] 345 Phil. 678 (1997).

[25]Allied Banking Corp. and Pacita Uy v. Spouses Eserjose, G.R. No 161776, October 22,
2004.

[26] Article VIII, Section 5 (5), 1987 Constitution.

[27] Petition for Review from the Regional Trial Courts to the Court of Appeals.

[28] Appeals from (the Court of Tax Appeals and) Quasi-Judicial Agencies to the Court of
Appeals. RA 9282 elevated the Court of Tax Appeals to the level of a collegiate court
with special jurisdiction.

[29] Appeal by Certiorari to the Supreme Court.

[30] Rule 22, Section 1. How to compute time In computing any period of time prescribed or
allowed by these Rules, or by order of the court, or by any applicable statute, the day of
the act or event from which the designated period of time begins to run is to be excluded
and the date of performance included x x x. (1997 Rules of Civil Procedure)

[31] Before the effectivity of RA 9282 (AN ACT EXPANDING THE JURISDICTION OF THE
COURT OF TAX APPEALS [CTA], ELEVATING ITS RANK TO THE LEVEL OF A
COLLEGIATE COURT WITH SPECIAL JURISDICTION AND ENLARGING ITS
MEMBERSHIP) on March 30, 2004, decisions or rulings of the CTA were appealable to
the Court of Appeals under Rule 45 of the 1997 Rules of Civil Procedure. With the
passage of the new law, Section 19 thereof provides that a party adversely affected by a
decision or ruling of the Court of Tax Appeals en banc may file with the Supreme Court a
verified petition for review on certiorari pursuant to Rule 45 of the 1997 Rules of
Procedure.

[32] As far as Rule 65 (Petition for Certiorari, Mandamus and Prohibition) is concerned, Section
3 thereof, as amended by SC Adm. Memo. No. 00-2-03, states that no extension of time
shall be granted except for compelling reason and in no case exceeding 15 days.
[33] Katindig v. People, 74 Phil. 45 (1942) as cited in Agpalo, Statutory Construction, 3rd Edition
(1995).

[34] Rules of procedure may be applied retroactively to actions pending and undetermined at the
time of their passage. (Valenzuela v. Court of Appeals, 416 Phil. 289 [2001] as cited in
Agpalo, Statutory Construction, 1995 Edition, p. 294)

[35] No. L-75000, 27 February 1987,148 SCRA 280.

Republic of the Philippines

Supreme Court
Manila

THIRD DIVISION

JUDITH YU, G.R. No. 170979

Petitioner,

Present:

CARPIO MORALES, J., Chairperson,

BRION,

BERSAMIN,

- versus - VILLARAMA, JR., and

SERENO, JJ.
 Promulgated:

HON. ROSA SAMSON-TATAD,

Presiding Judge, Regional Trial Court,February 9, 2011

Quezon City, Branch 105, and the

PEOPLE OF THE PHILIPPINES,

Respondents.

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

DECISION

BRION, J.:

We resolve the petition for prohibition filed by petitioner Judith Yu to enjoin

respondent Judge Rosa Samson-Tatad of the Regional Trial Court (RTC), Branch
105, Quezon City, from taking further proceedings in Criminal Case No. Q-01-
105698, entitled People of the Philippines v. Judith Yu, et al.1[1]

The Factual Antecedents

1 [1] Pursuant to Rule 65 of the Rules of Court; rollo, pp. 3-23.

 The facts of the case, gathered from the parties pleadings, are briefly
summarized below.

Based on the complaint of Spouses Sergio and Cristina Casaclang, an

information for estafa against the petitioner was filed with the RTC.

In a May 26, 2005 decision, the RTC convicted the petitioner as charged. It
imposed on her a penalty of three (3) months of imprisonment (arresto mayor), a
fine of P3,800,000.00 with subsidiary imprisonment, and the payment of an
indemnity to the Spouses Casaclang in the same amount as the fine.2[2]

Fourteen (14) days later, or on June 9, 2005, the petitioner filed a motion for
new trial with the RTC, alleging that she discovered new and material evidence
that would exculpate her of the crime for which she was convicted.3[3]

In an October 17, 2005 order, respondent Judge denied the petitioners

motion for new trial for lack of merit.4[4]

2 [2] Penned by Pairing Judge Thelma A. Ponferrada; id. at 24-40.

3 [3] Id. at 41-45.

4 [4] Id. at 53-57.

 On November 16, 2005, the petitioner filed a notice of appeal with the RTC,
alleging that pursuant to our ruling in Neypes v. Court of Appeals,5[5] she had a
fresh period of 15 days from November 3, 2005, the receipt of the denial of her
motion for new trial, or up to November 18, 2005, within which to file a notice of
appeal.6[6]

On November 24, 2005, the respondent Judge ordered the petitioner to

submit a copy of Neypes for his guidance.7[7]

On December 8, 2005, the prosecution filed a motion to dismiss the appeal

for being filed 10 days late, arguing that Neypes is inapplicable to appeals in
criminal cases.8[8]

On January 4, 2006, the prosecution filed a motion for execution of the

decision.9[9]

On January 20, 2006, the RTC considered the twin motions submitted for
resolution.

5 [5] G.R. No. 141524, September 14, 2005, 469 SCRA 633.

6 [6] Rollo, pp. 58-60.

7 [7] Id. at 63.

8 [8] Id. at 64-71.

9 [9] Id. at 85-92.

 On January 26, 2006, the petitioner filed the present petition for prohibition
with prayer for the issuance of a temporary restraining order and a writ of
preliminary injunction to enjoin the RTC from acting on the prosecutions motions
to dismiss the appeal and for the execution of the decision.10[10]

The Petition

The petitioner argues that the RTC lost jurisdiction to act on the prosecutions
motions when she filed her notice of appeal within the 15-day reglementary period
provided by the Rules of Court, applying the fresh period rule enunciated in
Neypes.

The Case for the Respondents

The respondent People of the Philippines, through the Office of the Solicitor
General (OSG), filed a manifestation in lieu of comment, stating that Neypes
applies to criminal actions since the evident intention of the fresh period rule was
to set a uniform appeal period provided in the Rules.11[11]

10 [10] Supra note 1.

11 [11] Id. at 118-129.

 In view of the OSGs manifestation, we required the Spouses Casaclang to
comment on the petition.12[12]

In their comment, the Spouses Casaclang aver that the petitioner cannot seek
refuge in Neypes to extend the fresh period rule to criminal cases because Neypes
involved a civil case, and the pronouncement of standardization of the appeal
periods in the Rules referred to the interpretation of the appeal periods in civil
cases, i.e., Rules 40, 41, 42 and 45, of the 1997 Rules of Civil Procedure among
others; nowhere in Neypes was the period to appeal in criminal cases, Section 6 of
Rule 122 of the Revised Rules of Criminal Procedure, mentioned.13[13]

Issue

The core issue boils down to whether the fresh period rule enunciated in
Neypes applies to appeals in criminal cases.

The Courts Ruling

We find merit in the petition.

12 [12] Per the Courts July 26, 2006 resolution; id. at 131-134.

13 [13] Id. at 150-163.

 The right to appeal is not a constitutional, natural or inherent right it is a
statutory privilege and of statutory origin and, therefore, available only if granted
or as provided by statutes. It may be exercised only in the manner prescribed by
the provisions of the law.14[14] The period to appeal is specifically governed by
Section 39 of Batas Pambansa Blg. 129 (BP 129),15[15] as amended, Section 3 of
Rule 41 of the 1997 Rules of Civil Procedure, and Section 6 of Rule 122 of the
Revised Rules of Criminal Procedure.

Section 39 of BP 129, as amended, provides:

SEC. 39. Appeals. The period for appeal from final orders, resolutions,
awards, judgments, or decisions of any court in all 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 forty-eight (48) hours from the notice of the judgment
appealed from.

Section 3, Rule 41 of the 1997 Rules of Civil Procedure states:

SEC. 3. Period of ordinary appeal. The appeal shall be taken within

fifteen (15) days from 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 notice of the judgment or final
order.
14 [14] Phillips Seafood (Philippines) Corporation v. Board of Investments, G.R. No.
175787, February 4, 2009, 578 SCRA 69, 76; de La Cruz v. Ramiscal, G.R. No. 137882,
February 4, 2005, 450 SCRA 449, 457.

15 [15] Otherwise Known as the "Judiciary Reorganization Act of 1980.

 The period of 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.

Section 6, Rule 122 of the Revised Rules of Criminal Procedure reads:

SEC. 6. When appeal to be taken. An appeal must be taken within fifteen

(15) days from promulgation of the judgment or from notice of the final order
appealed from. This period for perfecting an appeal shall be suspended from
the time a motion for new trial or reconsideration is filed until notice of the
order overruling the motion has been served upon the accused or his counsel
at which time the balance of the period begins to run.

In Neypes, the Court modified the rule in civil cases on the counting of the
15-day period within which to appeal. The Court categorically set a fresh period
of 15 days from a denial of a motion for reconsideration within which to
appeal, thus:

The Supreme Court may promulgate procedural rules in all courts. 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, 43
and 45, 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.
 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 agencies to the
Court of Appeals and Rule 45 governing appeals by certiorari to the Supreme
Court. 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.16[16]

The Court also reiterated its ruling that it is the denial of the motion for
reconsideration that constituted the final order which finally disposed of the issues
involved in the case.

The raison dtre for the fresh period rule is to standardize the appeal period
provided in the Rules and do away with the confusion as to when the 15-day
appeal period should be counted. Thus, the 15-day period to appeal is no longer
interrupted by the filing of a motion for new trial or motion for reconsideration;
litigants today need not concern themselves with counting the balance of the 15-
day period to appeal since the 15-day period is now counted from receipt of the
order dismissing a motion for new trial or motion for reconsideration or any final
order or resolution.

While Neypes involved the period to appeal in civil cases, the Courts
pronouncement of a fresh period to appeal should equally apply to the period for
appeal in criminal cases under Section 6 of Rule 122 of the Revised Rules of
Criminal Procedure, for the following reasons:
16 [16] Supra note 5 at 643-645.
 First, BP 129, as amended, the substantive law on which the Rules of Court
is based, makes no distinction between the periods to appeal in a civil case and in a
criminal case. Section 39 of BP 129 categorically states that [t]he period for
appeal from final orders, resolutions, awards, judgments, or decisions of any court
in all cases shall be fifteen (15) days counted from the notice of the final order,
resolution, award, judgment, or decision appealed from. Ubi lex non distinguit nec
nos distinguere debemos. When the law makes no distinction, we (this Court) also
ought not to recognize any distinction.17[17]

Second, the provisions of Section 3 of Rule 41 of the 1997 Rules of Civil

Procedure and Section 6 of Rule 122 of the Revised Rules of Criminal Procedure,
though differently worded, mean exactly the same. There is no substantial
difference between the two provisions insofar as legal results are concerned the
appeal period stops running upon the filing of a motion for new trial or
reconsideration and starts to run again upon receipt of the order denying said
motion for new trial or reconsideration. It was this situation that Neypes addressed
in civil cases. No reason exists why this situation in criminal cases cannot be
similarly addressed.

17 [17] BAYAN (Bagong Alyansang Makabayan) v. Exec. Sec. Zamora, G.R. No. 138570,
October 10, 2000, 342 SCRA 449, 484; Pilar v. Commission on Elections, G.R. No. 115245,
July 11, 1995, 245 SCRA 759, 763; Commissioner of Internal Revenue v. Commission on
Audit, G.R. No. 101976, January 29, 1993, 218 SCRA 203, 214-215.
 Third, while the Court did not consider in Neypes the ordinary appeal period
in criminal cases under Section 6, Rule 122 of the Revised Rules of Criminal
Procedure since it involved a purely civil case, it did include Rule 42 of the 1997
Rules of Civil Procedure on petitions for review from the RTCs to the Court of
Appeals (CA), and Rule 45 of the 1997 Rules of Civil Procedure governing
appeals by certiorari to this Court, both of which also apply to appeals in criminal
cases, as provided by Section 3 of Rule 122 of the Revised Rules of Criminal
Procedure, thus:

SEC. 3. How appeal taken. x x x x

(b) The appeal to the Court of Appeals in cases decided by the Regional
Trial Court in the exercise of its appellate jurisdiction shall be by petition for
review under Rule 42.

xxxx

Except as provided in the last paragraph of section 13, Rule 124, all other
appeals to the Supreme Court shall be by petition for review on certiorari under
Rule 45.

Clearly, if the modes of appeal to the CA (in cases where the RTC exercised
its appellate jurisdiction) and to this Court in civil and criminal cases are the same,
no cogent reason exists why the periods to appeal from the RTC (in the exercise of
its original jurisdiction) to the CA in civil and criminal cases under Section 3 of
Rule 41 of the 1997 Rules of Civil Procedure and Section 6 of Rule 122 of the
Revised Rules of Criminal Procedure should be treated differently.
 Were we to strictly interpret the fresh period rule in Neypes and make it
applicable only to the period to appeal in civil cases, we shall effectively foster and
encourage an absurd situation where a litigant in a civil case will have a better right
to appeal than an accused in a criminal case a situation that gives undue favor to
civil litigants and unjustly discriminates against the accused-appellants. It suggests
a double standard of treatment when we favor a situation where property interests
are at stake, as against a situation where liberty stands to be prejudiced. We must
emphatically reject this double and unequal standard for being contrary to reason.
Over time, courts have recognized with almost pedantic adherence that what is
contrary to reason is not allowed in law Quod est inconveniens, aut contra
rationem non permissum est in lege.18[18]

Thus, we agree with the OSGs view that if a delay in the filing of an appeal
may be excused on grounds of substantial justice in civil actions, with more reason
should the same treatment be accorded to the accused in seeking the review on
appeal of a criminal case where no less than the liberty of the accused is at stake.
The concern and the protection we must extend to matters of liberty cannot be
overstated.

In light of these legal realities, we hold that the petitioner seasonably filed
her notice of appeal on November 16, 2005, within the fresh period of 15 days,
counted from November 3, 2005, the date of receipt of notice denying her motion
for new trial.

18 [18] Republic of the Philippines, represented by the Commissioner of Customs v.

Unimex Micro-Electronics GMBH, G.R. Nos. 166309-10, March 9, 2007, 518 SCRA 19, 33;
Republic v. Court of Appeals, G.R. No. 108926, July 12, 1996, 258 SCRA 712, 723.
 WHEREFORE, the petition for prohibition is hereby GRANTED.
Respondent Judge Rosa Samson-Tatad is DIRECTED to CEASE and DESIST
from further exercising jurisdiction over the prosecutions motions to dismiss
appeal and for execution of the decision. The respondent Judge is also
DIRECTED to give due course to the petitioners appeal in Criminal Case No. Q-
01-105698, and to elevate the records of the case to the Court of Appeals for
review of the appealed decision on the merits.

No pronouncement as to costs.

SO ORDERED.

ARTURO D. BRION

Associate Justice

WE CONCUR:
 CONCHITA CARPIO MORALES

Associate Justice

LUCAS P. BERSAMIN MARTIN S. VILLARAMA, JR.

Associate Justice Associate Justice

MARIA LOURDES P. A. SERENO

Associate Justice

ATTESTATION
 I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts
Division.

CONCHITA CARPIO MORALES

Associate Justice

Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division
Chairpersons Attestation, it is hereby certified that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer
of the opinion of the Courts Division.
 RENATO C. CORONA

Chief Justice

Republic of the Philippines

Supreme Court

Manila

SECOND DIVISION
JERRY ONG, G.R. No. 175116

Petitioner,

Present:

CARPIO, J., Chairperson,

- versus - NACHURA,

PERALTA,

ABAD, and

MENDOZA, JJ.

PHILIPPINE DEPOSIT Promulgated:

INSURANCE CORP.,

Respondent.
August 18, 2010

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

DECISION

PERALTA, J.:
 Before us is a petition for review on certiorari filed by petitioner Jerry Ong
seeking to annul and set aside the Decision 19[1] dated July 31, 2006 and the
Resolution20[2] dated October 5, 2006 issued by the Court of Appeals (CA) in CA-
G.R. SP No. 93441.

Sometime in 1982 and 1983, petitioner Jerry Ong made some money market
placements with Omnibus Finance Inc. (OFI), which later on suffered serious
financial difficulties. As petitioner's money market placements matured, he
demanded from OFI the return of the same. However, OFI's checks issued thereby
were dishonored by the drawee bank. It was alleged that OFI sought the assistance
of its sister companies which included the Rural Bank of Olongapo (RBO). On
December 29, 1983, Jose Ma. Carballo, OFI President, and Cynthia Gonzales,
Chairperson of the Board of Directors of RBO, executed in favor of petitioner a
Deed of Real Estate Mortgage21[3] over two parcels of land located in Tagaytay
City covered by Transfer Certificates of Title Nos. T-13769 and T-13770, which are
both registered in RBO's name, as collateral to guarantee the payment of OFI's
money market obligations to petitioner in the amount of P863,517.02. The
mortgage was executed by Gonzales by virtue of a Secretary's Certificate 22[4]
issued by Atty. Efren L. Legaspi, RBO's alleged Assistant Corporate Secretary,

19[1] Penned by Associate Justice Conrado M. Vasquez, Jr., with Associate Justices Amelita G.
Tolentino and Vicente S.E. Veloso, concurring; rollo, pp. 73-83.

20[2] Id. at 71.

21[3] Id. at 151-155

22[4] Id. at 98.

showing that Gonzales was authorized by the RBO Board to execute such
mortgage. The deed of mortgage was annotated on TCT Nos. T-13769 and T-13770
of the Register of Deeds of Tagaytay City on January 13, 1984.

As OFI failed to pay petitioner the obligation secured by the real estate
mortgage, petitioner foreclosed the mortgage on March 18, 1984. A Certificate of
Sale was correspondingly issued which was registered with the Register of Deeds
of Tagaytay City on July 16, 1985. Petitioner alleged that representatives of the
Central Bank of the Philippines (Central Bank) had approached him and borrowed
TCT Nos. T-13769 and T-13770 for the on- going audit and inventory of the assets
of the RBO; however, these titles were not returned despite petitioner's demand.
Petitioner filed with the RTC of Tagaytay City, Branch 18, a case for the surrender
of said titles, docketed as TC-803. The case was subsequently dismissed for being
premature as the one year redemption period had not yet expired.

On May 22, 1984, RBO's Corporate Secretary and Acting Manager, Atty.
Rodolfo C. Soriano, filed with the RTC of Tagaytay City, an action for the
annulment of real estate mortgage, extrajudicial foreclosure of mortgage
proceedings, sheriff's certificate of sale with damages against petitioner, OFI,
Cynthia Gonzales, the Sheriff and the Register of Deeds of Tagaytay City, raffled
off to Branch 18, and was docketed as Civil Case No. TG-805. However, the case
was later suspended due to OFI's pending application for rehabilitation with the
Securities and Exchange Commission.
 On May 9, 1985, the Central Bank, as petitioner, which was later substituted
by respondent Philippine Deposit Insurance Corporation23[5] (PDIC) filed with the
RTC of Olongapo City a petition for assistance in the liquidation of RBO, docketed
as Sp. Proc. No. 170-0-85 and was raffled off to Branch 73. Later, upon
respondent's motion, Civil Case No. TG-805, i.e., for annulment of mortgage, was
consolidated with RBO's liquidation proceedings.

On February 5, 1991, petitioner filed with Branch 79 of the RTC of Quezon

City24[6] a petition for the surrender of the titles of the Tagaytay properties against
RBO, which petition was eventually ordered dismissed by the CA after finding that
the RTC lacked jurisdiction to try the case, but without prejudice to petitioner's
right to file his claim in RBO's liquidation proceedings pending before Branch 73
of the RTC of Olongapo City.

Consequently, on February 16, 1996, petitioner filed in Sp. Proc. No. 170-0-
85 a Motion to Admit Claim against RBO's assets as a secured creditor and the
winning bidder and/or purchaser of the Tagaytay properties in the foreclosure sale.
Respondent filed its Comment/Opposition to the motion. Trial, thereafter, ensued
on petitioner's claim.

23[5] Pursuant to Monetary Board Resolution No. 261 dated September 15, 1993, PDIC was designated as the
Liquidator of the Rural Bank of Olongapo vice the Central Bank of the Philippines.

24[6] Docketed as Civil Case No. 91-8019

 On June 25, 2001, Acting Presiding Judge Philbert I. Iturralde issued an
Order25[7] declaring petitioner's claim against RBO valid and legitimate, the
dispositive portion of which reads:

WHEREFORE, under the foregoing circumstance, the claim of Jerry Ong

is hereby declared valid and legitimate and therefore GRANTED. As prayed for,
the two (2) parcels of land covered under TCT Nos. 13769 and 13770, with all its
improvements be awarded to Claimant Jerry Ong. The titles subject matter of this
claim allegedly in possession of the Central Bank or its appointed liquidator, or any
person presently in possession of said Transfer Certificate of Title is directed and
ordered to immediately surrender the same to the Claimant. Should the same be
lost and/or upon proof of its loss the Register of Deeds is ordered to issue in the
claimant's name new titles pursuant to the consolidation of property earlier made
by the claimant over the property.

SO ORDERED.26[8]

Respondent filed its motion for reconsideration. In a Resolution 27[9] dated

June 27, 2002, Judge Renato J. Dilag reversed the June 25, 2001 Decision. The
decretal portion of the Resolution reads:

WHEREFORE, foregoing considered, the Order of this Court dated June

25, 2001 is hereby reconsidered and set aside. The real estate mortgage executed on
December 29, 1983 by and between Cynthia Gonzales representing RBO and Jose
Ma. Carballo, representing OFI is hereby declared null and void. The Extrajudicial
Proceedings conducted in March 1984 and the Sheriff's Certificate of Sale dated

25[7] Rollo, pp. 180-183.

26[8] Id. at 182-183.

27[9] Id. at 184-188.

 March 23, 1984 issued in the name of Jerry Ong are, likewise, declared null and
void. And, for failure to substantiate his claim against RBO, Jerry Ong's claim is
hereby denied.

SO ORDERED.28[10]

Petitioner's motion for reconsideration was denied in an Order 29[11] dated

May 26, 2003, a copy of which was received by petitioner on June 16, 2003.

On June 17, 2003, petitioner, thru counsel, filed a Notice of Appeal 30[12]
which the RTC gave due course in an Order 31[13] dated July 14, 2004, after finding
that the appeal had been filed within the reglementary period. The RTC also
ordered the elevation of the entire records to the CA for further proceedings.

Respondent sought reconsideration of the Order giving due course to

petitioner's appeal as the latter failed to file a record on appeal within the
reglementary period; thus, the appeal was not perfected. Petitioner filed his
Comment/Opposition to such motion and at the same time attaching the Record on
Appeal dated August 25, 2004.

28[10] Id. at 188.

29[11] Id. at 200-201.

30[12] Id. at 202-203.

31[13] Id. at 204.

 On May 31, 2005, the RTC issued an Order, 32[14] the dispositive portion of
which reads:

FOREGOING CONSIDERED, the Order of this Court dated July 14,

2004 is hereby reconsidered and set aside. Consequently, as provided under Rule
41, Sec. 13 of the Revised Rules of Court, the appeal is hereby dismissed for
having been taken out of time.

SO ORDERED.

Petitioner's motion for reconsideration was denied in an Order dated

December 7, 2005.33[15]

Petitioner then filed with the CA a petition for certiorari with prayer for the
issuance of a writ of preliminary injunction assailing the RTC Orders dated May
31, 2005 and December 7, 2005 for having been issued with grave abuse of
discretion.

After the parties submitted their respective pleadings, the CA issued its
assailed Decision on July 31, 2006, dismissing the petition.

32[14] Id. at 255-257.

33[15] Id. at 258.

 In so ruling, the CA found that since Sp. Proc. No. 170-0-85 was for the
liquidation of RBO, it was a special proceeding and not an ordinary action; that
liquidation proceedings are considered special proceedings as held in Pacific
Banking Corporation Employees Organization v. Court of Appeals;34[16] that since
multiple appeals are allowed in proceedings for liquidation of an insolvent
corporation, a record on appeal was necessary in petitioner's case for the perfection
of his appeal.

The CA found unpersuasive petitioners plea to consider his failure to submit

a record on appeal on time as excusable neglect saying that petitioner was fully
aware that Sp. Proc No. 170-0-85 was a petition for liquidation, because he filed
his claim as a preferred creditor of RBO, he participated in the trial thereof and
filed the notice of appeal under the title of the said liquidation case; that petitioners
feigned ignorance and miscalculation cannot justify an exception to the strict rule
on perfection of appeal within the reglementary period; that petitioner filed the
record on appeal 426 days after the lapse of the reglementary period, and certiorari
cannot be a substitute for a lost remedy of appeal. The CA ruled that petitioner's
failure to perfect his appeal within the prescribed period rendered the RTC decision
final and executory which deprived the appellate court of jurisdiction to alter the
final judgment, much less entertain the appeal.

On petitioners claim that there was a grave abuse of discretion committed by

the RTC in giving credence to the testimonies of respondents witnesses, the CA
ruled that such matter was beyond the jurisdictional parameter of a special civil
34[16] 312 Phil. 578, 593 (1995).
action of certiorari as such issue dwelt into questions of facts and evaluation of
evidence.

Petitioner's motion for reconsideration was denied in a Resolution dated

October 5, 2006.

Hence, the present petition on the following grounds:

THE COURT OF APPEALS GRAVELY ERRED AND ABUSED ITS

DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION
WHEN IT DISMISSED THE PETITION FOR CERTIORARI BASED SOLELY
ON TECHNICAL RULES OF PROCEDURE.

THE COURT OF APPEALS GRAVELY ERRED AND ABUSED ITS

DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION
WHEN IT DISMISSED THE PETITION FOR CERTIORARI WITHOUT
PASSING UPON THE MERIT OF PETITIONER'S APPEAL.35[17]

Petitioner reiterates his argument raised before the CA that his counsel's
failure to submit a record on appeal on time is an excusable neglect as the failure
was due to the serious complications surrounding the case that led her to commit
an error of judgment; that petitioner's counsel honestly believed that their claim
filed against RBO in the special proceedings and the civil case filed by RBO

35[17] Id. at 38.

against petitioner for the annulment of mortgage under Civil Case No. TG-805,
which was eventually consolidated with the special proceedings, were ordinary
civil actions since they sought the enforcement or protection of a right or
prevention or redress of a wrong; thus, a mere notice of appeal would be sufficient
to perfect petitioner's appeal. Petitioner argues that we have liberalized in some
instances the rule on perfection of appeals and cites Gregorio v. CA36[18] and
Gonzales-Orense v. Court of Appeals,37[19] thus, he asks for the same leniency in
the interest of substantial justice so as to give him the chance to ventilate his appeal
on the merit.

Petitioner claims that the issue on the admissibility of the testimonies of

respondent's witnesses is a question of law as its resolution calls for the application
of the law on hearsay evidence and not the evaluation of evidence; that
respondent's witnesses came only upon RBO's liquidation process and were not
even connected with RBO at the time of the execution of the real estate mortgage
among RBO, OFI and petitioner; thus, their testimonies are inadmissible for being
hearsay evidence, and a special civil action of certiorari is the proper remedy to
assail the admission of the same; that it would serve the ends of justice if the CA
had taken a second look on the facts and evidence of the case to determine the
merit of petitioner's appeal.

In its Comment, respondent avers that while the petition was denominated as
a petition for review under Rule 45, the same imputes lack or excess of jurisdiction

36[18] G..R. No. L-43511, July 28, 1976, 72 SCRA 120.

37[19] G.R. No. L-80526, July 18, 1988, 163, SCRA 477
on the part of the CA in issuing its assailed decision; thus, petitioner availed of the
wrong remedy. Petitioner filed his Reply thereto.

We first resolve the issue raised by respondent anent the mode of appeal
availed of by petitioner. Petitioner filed a petition for review on certiorari assailing
the Decision and Resolution of the CA which were final dispositions of the case on
the merits, thus, a petition under Rule 45 of the Rules of Court is proper. Rule 45
provides that an appeal by certiorari from the judgments or final orders or
resolutions of the appellate court is by a verified petition for review on certiorari.
Contrary to respondent's claim that petitioner in this petition merely alleges that the
CA abused its discretion in dismissing his appeal, we find that petitioner also
imputes grave error committed by the CA in rendering its assailed decision finding
that the appeal was not perfected.

As to the main issues raised by petitioner, we find the same unmeritorious.

Sections 2 (a) and 3 of Rule 41 of the Rules of Court provide:

SEC. 2. Modes of Appeal x x x

 (a) Ordinary appeal. The appeal to the Court of Appeals in
cases decided by the Regional Trial Court in the exercise of its
original jurisdiction shall be taken by filing a notice of appeal with
the court which rendered the judgment or final order appealed from
and serving a copy thereof upon the adverse party. No record on
appeal shall be required except in special proceedings and other
cases of multiple or separate appeals where the law or these Rules
so require. In such cases, the record on appeal shall be filed and
served in like manner.

xxxx

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.

It has been held that a petition for liquidation of an insolvent corporation is

classified as a special proceeding.38[20] The RTC decision, which petitioner sought
to appeal from, was rendered in the special proceeding for the liquidation of RBO's
assets; thus, applying the above-quoted provisions, an appeal in a special
proceeding requires both the filing of a notice of appeal and the record on appeal
within thirty days from receipt of the notice of judgment or final order.

In this case, petitioner filed his Notice of Appeal on June 17, 2003, and the
RTC gave due course to the appeal after it found that the notice of appeal was filed
within the reglementary period. However, upon respondent's motion for
reconsideration, where it argued that petitioner failed to file a record on appeal,

38[20] Pacific Banking Corporation Employees Organization v. Court of Appeals, supra note 16.
considering that the decision was rendered in a petition for liquidation of RBO
which was a special proceeding, the RTC reversed itself as no record on appeal
was filed, and dismissed petitioner's appeal for having been taken out of time. The
RTC did not commit a grave abuse of discretion in dismissing petitioner's appeal,
since it is clearly stated under the Rules that filing of the notice of appeal must be
accompanied by a record on appeal to perfect one's appeal in a special proceeding.
In fact, the RTC's dismissal of petitioner's appeal was expressly allowed under
Section 13 of Rule 41 of the Rules of Court which states:

SECTION 13. Dismissal of appeal. Prior to the transmittal of the original

record or the record on appeal to the appellate court, the trial court may motu
propio or on motion to dismiss the appeal for having been taken out of time.

Thus, we find no error committed by the CA when it sustained the RTC's dismissal
of petitioner's appeal for failure to comply with the Rules.

In In the Matter of the Heirship (Intestate Estates) of the Late Hermogenes

Rodriguez, et al. v. Jaime M. Robles,39[21] we nullified the CA decision for lack of
jurisdiction in taking cognizance of an appeal from the RTC decision which had
already lapsed into finality for failure of the party to file a record on appeal within
the reglementary period, and said:

This Court has invariably ruled that perfection of an appeal in the manner
and within the period laid down by law is not only mandatory but also
jurisdictional. The failure to perfect an appeal as required by the rules has the

39[21] G.R No. 182645, December 4, 2009.

 effect of defeating the right to appeal of a party and precluding the appellate court
from acquiring jurisdiction over the case. The right to appeal is not 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 the law. The party
who seeks to avail of the same must comply with the requirement of the rules.
Failing to do so, the right to appeal is lost. The reason for rules of this nature is
because the dispatch of business by courts would be impossible, and intolerable
delays would result, without rules governing practice. Public policy and sound
practice demand that judgments of courts should become final and irrevocable at
some definite date fixed by law. Such rules are a necessary incident to the proper,
efficient and orderly discharge of judicial functions. Thus, we have held that the
failure to perfect an appeal within the prescribed reglementary period is not a
mere technicality, but jurisdictional. Just as a losing party has the privilege to file
an appeal within the prescribed period, so does the winner also have the
correlative right to enjoy the finality of the decision. Failure to meet the
requirements of an appeal deprives the appellate court of jurisdiction to entertain
any appeal. There are exceptions to this rule, unfortunately respondents did not
present any circumstances that would justify the relaxation of said rule.

The rules of procedure must be faithfully followed, except only when, for
persuasive reasons, they may be relaxed to relieve a litigant of an injustice
commensurate with his failure to comply within the prescribed procedure. 40[22]
Concomitant to a liberal interpretation of the rules of procedure should be an effort
on the part of the party invoking liberality to adequately explain his failure to abide
by the rules.41[23]

Petitioner's argument that his counsel's honest belief that their claim against
the RBO assets and the civil case filed by RBO against petitioner for the
annulment of mortgage were ordinary civil actions and a mere notice of appeal
would be sufficient to perfect his appeal is not a satisfactory reason to warrant a
40[22] Duremdes v. Duremdes, 461 Phil. 388, 400 (2003).

41[23] Id.
relaxation of the mandatory rule on the filing of a record on appeal. We find
apropros the CA's disposition on the matter in this wise:

Withal, petitioner's ratiocinations that he failed to submit a Record on

Appeal on time could be taken as excusable neglect due to serious complications
surrounding the case leading him to an error of judgment where an ordinary
human being, courts, not excepted, is susceptible to commit, is highly
unsustainable. Petitioner counsel's honest belief that the claim of petitioner Ong
and the civil case for annulment of mortgage under TG-085 were ordinary actions
and, as such, mere filing of a notice of appeal would be sufficient, is far from
being persuasive. This is not the excusable neglect as envisioned by the rules in
order to sidestep on the strict compliance with the rules on appeal. Petitioner was
fully aware that Sp. Proc. No. 170-0-85 is a petition for liquidation because they
filed their claim in the case claiming to be a preferred creditor, participated in the
trial thereof in every step of the way, and filed the disputed Notice of Appeal
under the title of the said case. We cannot find any reason to accept petitioner's
feigned ignorance that the case they were appealing is a liquidation petition. In
fine, such miscalculation of the petitioner cannot justify an exception to the rules,
and to apply the liberal construction rule.42[24]

Thus, the erroneous assumption of petitioner's counsel could not excuse her
from complying with the Rules. If we are to accept such reason and grant
petitioner's petition would be putting a premium on his counsel's ignorance or lack
of knowledge of existing Rules.43[25] An erroneous application of the law or rules
is not excusable error.44[26] Petitioner is bound by the mistake of his counsel.

42[24] Rollo, pp. 81-82.

43[25] See Enriquez v. Enriquez, G.R. No. 139305, August 25, 2005, 468 SCRA 77, 86.

44[26] See Ditching v. Court of Appeals, 331 Phil. 665, 678 (1996), citing Jocson v. Baguio, 179
SCRA 550 (1989).
 The cases of Gregorio v. CA and Gonzales-Orense v. Court of Appeals, cited
by petitioner to support his plea for the relaxation of the rules on the application of
the reglementary periods of appeal, find no application in his case.

Gregorio v. CA involved the failure of therein petitioner to file appellant's

brief within the extended period on the basis of which the CA dismissed the appeal.
We reinstated the appeal saying that the CA may allow the extension of time to file
brief as long as good and sufficient cause was shown and the motion was filed
before the expiration of the time sought to be extended; that expiration of time to
file brief, unlike lateness in filing the notice of appeal, appeal bond or record on
appeal was not a jurisdictional matter and may be waived by the parties. The case
before us deals with the matter of the non-filing of the record on appeal within the
reglementary period prescribed by law which is not only mandatory but
jurisdictional.

Gonzales Orense v. CA though involving the issue of the non-filing of a

record on appeal, the factual mileu of that case was different. In that case,
petitioner filed his notice of appeal from the order of the probate court awarding
the amount of P20,000.00 for his services in the probate of the will of the husband
of his client. The probate court transmitted the records to the CA, and later
petitioner submitted his appellants' brief and respondent her appellee's brief.
However, the CA dismissed the appeal as petitioner failed to submit a record on
appeal. In a petition filed with us, we reinstated the appeal since we found that the
question presented to us, i.e., whether or not a record on appeal was necessary
when an award of attorney's fees by the probate court was elevated to the CA, was
one of first impression; that petitioner acted in honest, if mistaken interpretation of
the applicable law; that the probate itself believed that the record on appeal was
unnecessary and respondent herself apparently thought so too for she did not move
to dismiss the appeal and instead impliedly recognized its validity by filing the
appellee's brief. In the present case, petitioner filed in Sp. Proc. No. 170-0-85 his
claim against the assets of RBO as a secured creditor by virtue of the real estate
mortgage; that a petition for liquidation is in the nature of a special proceeding was
already settled in Pacific Banking Corporation Employees Organization v. Court
of Appeals,45[27] decided in 1995, thus, no longer a novel issue when petitioner's
appeal was filed in 2003. Moreover, unlike in Gonzales-Orense, where therein
respondent did not move for the dismissal of the appeal and even filed her
appellee's brief, herein respondent had moved in the RTC for the dismissal of the
appeal for failure of petitioner to file the record on appeal.

Petitioner's claim that the issue on the admissibility of testimonies of

respondent's witnesses does not call for an evaluation of evidence but a question of
law as it calls for the application of the law on hearsay evidence; thus, within the
remedy of a petition for certiorari is not meritorious. We find no error committed
by the CA when it held that such issue was beyond the jurisdictional parameter of a
special civil action of certiorari as such issue dwelt into questions of facts and
evaluation of evidence. The sole office of a writ of certiorari is the correction of
errors of jurisdiction and does not include a review of public respondents
evaluation of the evidence and factual findings.46[28] In a special civil action for
certiorari under Rule 65 of the Rules of Court, questions of fact are generally not
45[27] Supra note 16.
permitted, the inquiry being limited to whether the public respondent acted without
or in excess of its jurisdiction or with grave abuse of discretion.47[29]

WHEREFORE, the petition is hereby DENIED. The Decision dated July

31, 2006 and the Resolution dated October 5, 2006 of the Court of Appeals in CA-
G.R. SP. No. 93441 are AFFIRMED.

SO ORDERED.

DIOSDADO M. PERALTA

Associate Justice

WE CONCUR:

46[28] Oro v. Diaz, 413 Phil. 416, 427 (2001), citing Building Care Corporation v. National
Labor Relations Commission, 268 SCRA 666 (1997).

47[29] Id. at 428, citing Buag v. Court of Appeals, 303 SCRA 591 (1999).
 ANTONIO T. CARPIO

Associate Justice

Chairperson

ANTONIO EDUARDO B. NACHURA ROBERTO A. ABAD Associate Justice

Associate Justice

JOSE CATRAL MENDOZA

Associate Justice
 ATTESTATION

I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts
Division.

ANTONIO T. CARPIO

Associate Justice

Second Division, Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairpersons Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.
 RENATO C. CORONA

Chief Justice

SECOND DIVISION

CHARLES CU-UNJIENG,
G.R. No. 139596
Petitioner,

Present:

PUNO, J., Chairperson

SANDOVAL-GUTIERREZ,

- versus - CORONA,

AZCUNA, and
 GARCIA, JJ.

HON. COURT OF APPEALS and Promulgated:

UNI0N BANK OF THE
PHILIPPINES,

Respondents. January 24, 2006

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

DECISION

GARCIA, J.:

By this petition for review on certiorari, petitioner Charles Cu-Unjieng seeks the reversal of the

following issuances of the Court of Appeals (CA) in CA-G.R. CV No. 8177-B-UDK, entitled

Charles Cu-Unjieng, plaintiff-appellant vs. Union Bank of the Philippines, et al., defendants-

appellees, to wit:
 1. Resolution[1] dated May 10,1999, dismissing, for non-payment of docket

and other lawful fees, petitioners appeal from an earlier decision of the Regional

Trial Court at Malolos, Bulacan which dismissed his complaint for specific

performance and damages against respondent Union Bank of the Philippines

and others; and

2. Resolution[2] dated July 30, 1999 which denied petitioners Motion for

Reconsideration and ordered expunged the appeal brief thereto attached.

The facts:

Respondent Union Bank of the Philippines (UBP) is the owner of a parcel of agricultural land

with an area of 218,769 square meters situated in Barangay Sta. Maria, San Miguel, Bulacan

and registered in its name under Transfer Certificate of Title (TCT) No. TC-1062 of the Registry

of Deeds of Bulacan.

Sometime in January 1994, UBP caused the posting on the bulletin boards of its branch offices

of a three-page list of acquired realty assets available for sale to interested parties. Included in

said list was the aforementioned parcel of land, offered to be sold for P2,200,000.00.

Petitioner, through a letter[3] dated April 11, 1994 and addressed to Joselito P. Valera,

manager of UBPs Acquired Assets Department, offered to buy the subject property for a lesser
amount of P2,078,305.50, payable as follows: 50% as down payment with the balance to be

paid in equal monthly installments over a period of two (2) years. Petitioner explained that his

offer for an amount lesser than UBPs asking price was on account of five (5) tenants occupying

the subject land who were allegedly demanding P500,000.00 to voluntarily vacate the same.

As proof of his interest to buy the property, petitioner tendered PCIB Check No. 565827 for

P103,915.27, purportedly representing 10% of the 50% down payment as earnest money or

deposit. UBP acknowledged receipt thereof by way of Union Bank Receipt No. 495081 dated

April 11, 1994.

On August 30, 1994, petitioner wrote a follow-up letter to UBP inquiring on the status of his

offer to buy the subject premises.[4]

Via a reply-letter dated August 31, 1994, the manager of UBPs Acquired
Assets Department advised petitioner that his offer to purchase is yet to be
acted upon because the bank was still awaiting the opinion of its legal
division regarding the sale of CARPable agricultural assets acquired by the
bank.[5]

As it turned out, UBP rejected petitioners offer as shown by the fact that in
another letter[6] dated December 19, 1994, the bank informed petitioner
that his offer could not be favorably acted upon on account of the legal
divisions opinion that sales of lands covered by the Comprehensive
Agrarian Reform Law without prior Department of Agrarian Reform (DAR)
approval are considered null and void. Accordingly, UBP advised petitioner
to pick up the refund of his P103,915.27 earnest money at the banks
disbursing unit.

Unable to accept UBPs rejection of his offer, petitioner, through counsel,

made a formal demand[7] for the bank to comply with its obligation to
transfer and deliver the title of the subject property to him by executing
the proper deed of conveyance, under the terms and conditions set forth in
his April 11, 1994 offer.

Responding thereto, UBP, thru its counsel, Atty. Luzano, in a letter[8]

dated July 19, 1995, reiterated the banks rejection of petitioners offer as
the land being carpable could only be disposed of by the bank either thru
Voluntary Offer to Sell (VOS) or compulsory acquisition, the procedure of
which is outlined in Sec. 16 of Republic Act (RA) No. 6657.

It was against the foregoing backdrop of events that, on February 6, 1997, in the Regional Trial

Court (RTC) at Malolos, Bulacan, petitioner filed his complaint [9] in this case for Specific

Performance and Damages against UBP, impleading as co-defendant in the suit the Register of

Deeds of Bulacan. Docketed as Civil Case No. 80-M-97 and raffled to Branch 9 of the court, the

complaint principally sought UBPs compliance with an alleged perfected contract of sale
between it and petitioner relative to the parcel of land in question. More specifically, the

complaint prays for a judgment ordering UBP to:

a) accept payments from the plaintiff [petitioner] for the sale of the Property in

accordance with the terms and conditions of the letter dated 11 April 1994;

b) execute a Deed of Absolute Sale over the Property covered by TCT No. TC 1062 of the

Registry of Deeds of the Province of Bulacan upon the plaintiffs full payment of

the amount of Two Million Seventy Eight Thousand Three Hundred Five &

50/100 (P2,078,305.50), failing in which, the deputy sheriff should be ordered to

execute such deed and the Registry of Deeds to cancel the title of the Bank and

issue a new one in favor of the plaintiff;

c) pay plaintiff the sum of Five Hundred Thousand Pesos (P500,000.00) as moral

damages;

d) pay plaintiff the sum of Five Hundred Thousand Pesos (P500,000.00) as exemplary

damages;

e) pay plaintiff the sum of Four Hundred Thousand Pesos (P400,000.00) as attorneys

fees; and

f) pay the costs of the suit.

Other reliefs, just and equitable under the premises, are likewise respectfully prayed for.
After due proceedings, the trial court, in a decision dated September 1, 1998, [10] upon a

finding that no perfected contract of sale transpired between the parties, dismissed petitioners

complaint for lack of sufficient cause of action, thus:

WHEREFORE, on the basis of the evidence adduced and the laws/jurisprudence

applicable thereon, judgment is hereby rendered DISMISSING the complaint in the above
entitled case for want of sufficient cause of action as well as the defendants counterclaim for
damages and attorneys fees for lack of proof to warrant the same.

However, defendant Union Bank of the Philippines is ordered to reimburse plaintiff

Charles Cu-Unjieng the amount of P103,915.27 representing the face value of PCIBank Check
No. 565827 tendered by the latter to the former as purported earnest money, with interest thereon
at the prevailing rates of interest periodically bestowed by UBP to its savings depositors from
April 11, 1994, through the succeeding years, and until the full amount thereof shall have been
delivered to the plaintiff.

No pronouncement as to costs.

SO ORDERED.

With his motion for reconsideration having been denied, petitioner filed
with the trial court a Notice of Appeal[11] therein making known that he is
taking an appeal from the adverse decision to the CA. Acting thereon, the
trial court issued an Order[12] directing the elevation of the records of the
case to the CA, whereat petitioners appeal was docketed as CA-G.R. CV
No. 8177-B-UDK.
As things would have it, in the herein first assailed Resolution dated
May 10, 1999, the CA dismissed petitioners appeal for nonpayment of the
required docket and other lawful appeal fees, to wit:

For failure of the appellant [petitioner] to pay the docket and other lawful fees (Sec. 4,
Rule 41, 1997 Rules of Civil Procedure), the Court Resolved to DISMISS the appeal pursuant to
Sec. 1(c), Rule 50 of the same Rule.

SO ORDERED.[13]

Petitioner filed a Motion for Reconsideration, attaching thereto his

appellants brief. However, in a subsequent Resolution dated July 30,
1999,[14] the appellate court denied the motion and even expunged from
the record the appellants brief thereto attached:

Acting on the motion of the plaintiff-appellant [petitioner] for a reconsideration of the

Resolution of May 10, 1999, which dismissed the appeal for the reason stated therein, and
considering the opposition interposed thereto by defendant-appellee [respondent] Union Bank of
the Philippines and it appearing that the filing of the notice of appeal of November 5, 1988, was
not accompanied by the full and correct payment of the corresponding appellate court docket and
other lawful fees, and for such tardiness of more than four (4) months, the Court resolved to
DENY the motion for reconsideration and the attached brief thereto ordered EXPUNGED.

In Pedrosa vs. Hill, 257 SCRA 373, the Supreme Court, citing Rodillas vs. Commission
on Elections (245 SCRA 702 aptly said:
 xxx the mere filing of the notice of appeal was not enough.
It should be accompanied by the payment of the correct amount of
appeal fee. In other words, the payment of the full amount of the
docket fee is an indispensable step for the perfection of an appeal.
In both original and appellate cases, the court acquires jurisdiction
over the case only upon the payment of the prescribed docket fees.
Well-rooted is the principle that perfection of an appeal within the
statutory or reglementary period is not only mandatory but also
jurisdictional and failure to do so renders the questioned decision
final and executory, and deprives the appellate court or body of
jurisdiction to alter the final judgment much less to entertain the
appeal. This requirement of an appeal fee is by no means a mere
technicality of law or procedure. It is an essential requirement
without which the decision appealed from would become final and
executory, as if no appeal was filed at all.

SO ORDERED.

Undaunted, petitioner is now with us via the present recourse

seeking a relaxation of procedural rules and ultimately the reversal and
setting aside of the assailed twin resolutions of the appellate court.

Petitioner would have the Court view his failure to pay the appeal docket fees on time as a non-

fatal lapse, or a non-jurisdictional defect which the CA should have ignored in order to attain

substantial justice. Further, petitioner passes the blame to the RTC clerk of court who allegedly

made the erroneous computation of docket fees.

We are not persuaded.

Doctrinally entrenched is the pronouncement that the right to appeal is merely statutory and a

party seeking to avail of that right must comply with the statute or rules. [15]

Rule 41, Section 4, of the 1997 Rules of Civil Procedure provides:

SEC. 4. Appellate court docket and other lawful fees. Within the period for taking an

appeal, the appellant shall pay to the clerk of the court which rendered the judgment or

final order appealed from, the full amount of the appellate court docket and other lawful

fees. Proof of payment of said fees shall be transmitted to the appellate court together

with the original record or the record on appeal.

Well-settled is the rule that payment of the docket and other legal fees within the

prescribed period is both mandatory and jurisdictional, [16] noncompliance with which is fatal

to an appeal. For, to stress, appeal is not a matter of right, but a mere statutory privilege. [17]

An ordinary appeal from a decision or final order of the RTC to the CA must be made within

fifteen (15) days from notice.[18] And within this period, the full amount of the appellate

court docket and other lawful fees must be paid to the clerk of the court which rendered the

judgment or final order appealed from.

Time and again, this Court has consistently held that full payment of docket fees within the

prescribed period is mandatory for the perfection of an appeal. Without such payment, the
appeal is not perfected and the appellate court does not acquire jurisdiction to entertain the

appeal, thereby rendering the decision sought to be appealed final and executory. [19]

For sure, nonpayment of the appellate court docket and other lawful fees within the

reglementary period as provided under Section 4, Rule 41, supra, is a ground for the dismissal

of an appeal under Section 1(c) of Rule 50, to wit:

SECTION 1. Grounds for dismissal of appeal.- An appeal may be dismissed by the Court

of Appeals, on its own motion or on that of the appellee, on the following grounds:

xxx xxx xxx

c. Failure of the appellant to pay the docket and other lawful fees as provided in section

4 of Rule 41; xxx

This Court has invariably sustained the CAs dismissal on technical grounds under the

aforequoted provision unless considerations of equity and substantial justice present cogent

reasons to hold otherwise. True, the rules may be relaxed but only for persuasive and weighty

reasons, to relieve a litigant of an injustice commensurate with his failure to comply with the

prescribed procedure.[20] So it is that in La Salette College vs. Victor Pilotin, [21] we held:

Notwithstanding the mandatory nature of the requirement of payment of appellate

docket fees, we also recognize that its strict application is qualified by the following: first,

failure to pay those fees within the reglementary period allows only discretionary, not
 automatic, dismissal; second, such power should be used by the court in conjunction

with its exercise of sound discretion in accordance with the tenets of justice and fair

play, as well as with a great deal of circumspection in consideration of all attendant

circumstances

Then, too, in Mactan Cebu International Airport Authority (MCIAA) vs. Mangubat ,[22] we held

that late payment of docket fees may be admitted when the party showed willingness to abide

by the Rules by immediately paying the required fees. Mactan, however, cannot be a source of

comfort for herein petitioner. For there, the appellate docket fees were paid six (6) days after

the timely filing of the notice of appeal. Unlike in Mactan, payment of the appellate docket fees

in this case was effected by petitioner only after four (4) months following the expiration of the

reglementary period to take an appeal.

With the reality obtaining in this case that payment of the appellate docket fees was belatedly

made four (4) months after the lapse of the period for appeal, it appears clear to us that the CA

did not acquire jurisdiction over petitioners appeal except to order its dismissal, [23] as it

rightfully did. Thus, the September 1, 1998 decision of the RTC has passed to the realm of

finality and became executory by operation of law.

We must emphasize that invocation of substantial justice is not a magical incantation that will

automatically compel this Court to suspend procedural rules. Rules of procedure are not to be
belittled or dismissed simply because their non-observance may have resulted in prejudice to a

partys substantive rights. Like all rules, they are required to be followed. So it must be here.

WHEREFORE, petition is DENIED and the assailed resolutions dated May 10,1999 and July

30, 1999 of the Court of Appeals AFFIRMED.

Costs against petitioner.

SO ORDERED.

CANCIO C. GARCIA
Associate Justice

WE CONCUR:

REYNATO S. PUNO

Associate Justice

Chairperson
ANGELINA SANDOVAL-GUTIERREZ RENATO C. CORONA
Associate Justice Associate Justice

ADOLFO S. AZCUNA

Associate Justice

ATTESTATION

I attest that the conclusions in the above decision were reached in

consultation before the case was assigned to the writer of the opinion of
the Courts Division.

REYNATO S. PUNO

Associate Justice
 Chairperson, Second Division

CERTIFICATION

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

Chairman's Attestation, it is hereby certified that the conclusions in the
above decision were reached in consultation before the case was assigned
to the writer of the opinion of the Court.

ARTEMIO V. PANGANIBAN

Chief Justice
[1] Penned by Associate Justice Teodoro P. Regino (ret.) with Associate Justices Salome A.
Montoya (ret.) and Conrado M. Vasquez, Jr., concurring; CA Rollo, p. 9.

[2] SC Rollo, pp. 6-7.

[3] Folder of Exhibits, Annex C.

[4] Ibid, Annex E.

[5] Ibid, Annex F.

[6] Ibid, Annex G.

[7] Ibid, Annex I.

[8] Folder of Exhibits, Annex J.

[9] Record, pp. 1-7.

[10] Record, pp. 215-227; Penned by Judge D. Roy A. Masadao, Jr.

[11] Record, p. 251.

[12] Record, p. 253.

[13] CA Rollo, p. 9.

[14] CA Rollo, pp. 60-61.

[15] Raymundo Villamor and Wenefreda Villamor vs. Heirs of Sebastian Tolang, G.R. No.
144689, June 9, 2005.

[16] Lazaro vs. Court of Appeals, 330 SCRA 208 (2000).

[17] Badillo vs. Tayag, 400 SCRA 494 (2003).

[18] Rule 41, Section 3, 1997 Rules of Civil Procedure.

[19] Navarro vs. Metropolitan Bank and Trust Co., 429 SCRA 439 (2004), citing Alfonso vs. Andres, 390 SCRA 465
(2002).
[20] Ibid.

[21] 418 SCRA 381, 387 (2003).

[22] 312 SCRA 463 (1999).

[23] Far Corporation vs. Renato Magdaluyo, Antonio Valdez, and Rolando Chua, 443 SCRA 218
(2004).

SECOND DIVISION

[G.R. NO. 148739. November 19, 2004]

FAR CORPORATION, petitioner, vs. RENATO MAGDALUYO, ANTONIO VALDEZ, and

ROLANDO CHUA, respondents.

DECISION

CHICO-NAZARIO, J.:

In an appeal from a Decision or final order of the Regional Trial Court to the Court of Appeals,
will the payment of the appellate docket fees made one hundred and thirty-two (132) days after
the lapse of the reglementary period to take an appeal, justify its dismissal?

This is the question to be resolved in this case.

The relevant and undisputed facts are as follows:

On 25 November 1997, a complaint[1] was filed by respondents herein against petitioner Far
Corporation, Rosa O. Caram, and Fermin Manuel Caram III for Specific Performance with
Prayer for a Writ of Preliminary Injunction and Damages, with the Regional Trial Court (RTC),
Branch 137, Makati City, docketed as Civil Case No. 97-2745. A Decision[2] was rendered by
the said court on 21 December 1998, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered, ordering defendant FAR Corporation to pay

plaintiffs RENATO T. MAGDALUYO, ANTONIO L. VALDEZ and ROLANDO E. CHUA,
Seven Hundred Fifty Thousand (P750,000.00) Pesos as brokers commission with legal interest at
the rate of six (6%) [percent] per annum from 2 May 1990 until fully paid; however said
commissions, inclusive of interest, should be divided equally in four parts, and given to each
plaintiff, and to defendant Fermin Manuel Caram III; attorneys fees equivalent to twenty percent
of the amounts due; and costs of the suit.

The complaint, insofar as defendants Rosa O. Caram and Fermin Manuel Caram III (sic), is
dismissed for lack of sufficient evidence.

The Decision of the trial court was received by petitioner on 18 February 1999.[3]

Not fully satisfied with the trial courts Decision, petitioner filed a Motion for Reconsideration[4]
on 02 March 1999, to which respondents filed a Comment[5] dated 18 March 1999.

In an Order[6] dated 02 February 2000, the trial court denied the Motion for Reconsideration for
lack of merit. This Order was received by petitioner on 17 February 2000.[7]

On 21 February 2000, petitioner filed a Notice of Appeal[8] with the trial court. An Order[9] was
issued by the trial court judge on 28 March 2000, directing the Branch Clerk of Court to transmit
immediately the entire records of the case, with the transcript of stenographic notes, to the Court
of Appeals. The same were transmitted to the Court of Appeals on 22 June 2000.[10]

On 18 July 2000, petitioner filed with the Court of Appeals an Ex-Parte Manifestation and
Submission dated 17 July 2000.[11] In said pleading, petitioner manifested that it has paid the
required appeal docket fees with the trial court, whose Decision and order were being appealed,
and prayed that the receipts for payment be included as part of the records of the case. Attached
therewith were the originals of the Clerk of Court, RTC-Makati Official Receipts, with numbers
12856671 (for P300) and 12857288 (for P200),[12] both dated 13 July 2000.

On 28 July 2000, respondents filed a Comment with Motion to Dismiss before the Court of
Appeals.[13] Respondents moved for the dismissal of the appeal on the ground that petitioner
failed to pay the docket fees within the period for taking an appeal.

On 31 August 2000, the Court of Appeals issued a Resolution,[14] quoted as follows:

From the records it appear(s) that appellant filed his notice of appeal on February 21, 2000. Yet
based on the Ex-Parte Manifestation and Submission filed by counsel for defendant-appellant it
appears that the appeal docket fees were paid only on July 13, 2000, obviously way beyond the
period for perfecting an appeal. In view thereof, the present appeal is DISMISSED for non-
payment of docket fees within the period for perfecting an appeal.

The said Resolution was received by petitioner on 18 September 2000,[15] and on 21 September
2000, it filed a Motion for Reconsideration.[16] On 21 November 2000, respondents filed a
Comment on the Motion For Reconsideration,[17] to which petitioner filed a Motion to Strike
Comment[18] dated 27 December 2000. The Court of Appeals, in another Resolution[19]
promulgated on 27 June 2001, dismissed the Motion for Reconsideration for lack of merit. The
same is quoted hereunder:
After a reading of the Motion for Reconsideration filed by defendant-appellant Far Corporation,
we find no reason to disturb our previous ruling dismissing the appeal for non-payment of docket
fee within the period of perfecting an appeal.

The contention of defendant appellant that under Sec. 1(c), Rule 50, the ground to dismiss an
appeal is failure to pay the docket fee but not failure to pay the docket fee on time, is untenable.
On this respect, it is worth stressing that based on the records, it took defendant-appellant almost
five (5) months before paying the required docket fee. Such unreasonable delay would be
tantamount to failure to pay the docket fee which is a ground for dismissal of an appeal pursuant
to Sec. 1(c) of the Rules of Court.

WHEREFORE, the Motion for Reconsideration is hereby denied for lack of merit.

Hence, this petition.

Petitioner assigned the following errors:

1. That the Court of Appeals committed serious and reversible error of law when it peremptorily
and precipitously dismissed its formative appeal, and refused to reconsider said dismissal, based
on the procedural technicality of late payment of appeal docket fees, rather than on the
substantial merits of the case, thereby unduly depriving it of its right to appeal; and

2. That by its unjustifiable actions which constitute unwarranted deviation from, and disregard
of, the prevailing doctrines laid down by this Court, the Court of Appeals unjustly denied due
process to petitioner, who by paying the appeal docket fees at its own initiative showed complete
good faith and willingness to comply with the Rules.[20]

In support of the assignment of errors, petitioner submits the arguments that the nonpayment on
time of the appeal docket fees is a non-fatal lapse, or a non-jurisdictional defect which the Court
of Appeals should have overlooked in order to attain substantial justice.[21] This argument,
according to petitioner, was based on our rulings in the earlier cases of Rosario Yambao v. Court
of Appeals,[22] Ayala Land, Inc. v. Sps. Morris and Socorro Carpo,[23] and Santos v. Court of
Appeals.[24] Further, petitioner argues that the Court of Appeals hastily and wrongly dismissed
its appeal considering that there was good faith and willingness on its part to comply with the
Rules by voluntarily paying the docket fees.[25]

The petition is devoid of merit.

The reliance of petitioner in the three aforementioned cases is misplaced.

In Yambao v. Court of Appeals,[26] the failure of the petitioners to pay the correct amount of
docket fees was due to the erroneous assessment by the Clerk of Court of the Regional Trial
Court, Valenzuela City (the assessment was short by P20), as evidenced by the 10 December
1999 Certification issued by the Office of the Clerk of Court. The fault was not upon the
petitioners themselves, but upon a civil servant. In this case, we even reiterated the ruling that the
payment of docket fees within the prescribed period is mandatory for the perfection of an appeal.
In the case of Ayala Land, Inc. v. Sps. Morris and Socorro Carpo,[27] the appellant was likewise
unable to pay the correct amount of docket fees due to an error of an officer of the Court in
computing the correct amount (the assessment was short by P5). Therefore, there was no fault on
its part.

The case of Santos v. Court of Appeals,[28] wherein we laid down the rule that the payment of
the appeal fee is not a prerequisite for the perfection of an appeal, is not totally applicable in the
case at bar. The Santos case was decided at a time when the 1997 Rules on Civil Procedure was
not yet in effect. It was also a case involving an appeal, not from the RTC to the Court of
Appeals, but from the Municipal Trial Court to the RTC. The applicable rules at that time were
the Interim Rules and Guidelines relative to the implementation of the Judiciary Reorganization
Act of 1981[29] which did not provide that the payment of the appeal fee is a prerequisite for the
perfection of an appeal,[30] and Section 8, Rule 141 of the Revised Rules of Court which
imposes an appeal fee in cases of appeal from the municipal trial courts and specifies the
person/s to whom the appeal fee shall be paid, without specifying when said payment shall be
made.[31]

The rules with respect to the payment of the appellate docket fees have substantially changed
with the advent of the 1997 Rules on Civil Procedure.

Rule 41, Section 4, of the 1997 Rules on Civil Procedure provides:

SEC. 4. Appellate court docket and other lawful fees. Within the period for taking an appeal,
the appellant shall pay to the clerk of the court which rendered the judgment or final order
appealed from, the full amount of the appellate court docket and other lawful fees. Proof of
payment of said fees shall be transmitted to the appellate court together with the original record
or the record on appeal. (Emphasis supplied)

The aforecited rule is not merely directory, as the payment of the docket and other legal fees
within the prescribed period is both mandatory and jurisdictional.[32] It bears stressing that an
appeal is not a right, but a mere statutory privilege.[33]

An ordinary appeal from a Decision or final order of the RTC to the Court of Appeals must be
made within fifteen (15) days from notice.[34] And within this period, the full amount of the
appellate court docket and other lawful fees must be paid to the clerk of the court which rendered
the judgment or final order appealed from.

The requirement of paying the full amount of the appellate docket fees within the prescribed
period is not a mere technicality of law or procedure.[35]

Time and again, this Court has consistently held that the payment of docket fees within the
prescribed period is mandatory for the perfection of an appeal. Without such payment, the appeal
is not perfected. The appellate court does not acquire jurisdiction over the subject matter of the
action and the Decision sought to be appealed from becomes final and executory.[36]
The nonpayment of the docket and other lawful fees within the reglementary period as provided
under Section 4 of Rule 41[37] is a ground for the dismissal of an appeal, as provided for under
Section 1(c) Rule 50,[38] to wit:

SECTION 1. Grounds for dismissal of appeal.- An appeal may be dismissed by the Court of
Appeals, on its own motion or on that of the appellee, on the following grounds:

...

c. Failure of the appellant to pay the docket and other lawful fees as provided in Section 4 of
Rule 41; . . . .

Rules of Procedure must be faithfully followed. But the rules may be relaxed, for persuasive and
weighty reasons, to relieve a litigant of an injustice commensurate with his failure to comply
with the prescribed procedure.[39] In the case of La Salette College v. Victor Pilotin,[40] we
held:

Notwithstanding the mandatory nature of the requirement of payment of appellate docket fees,
we also recognize that its strict application is qualified by the following: first, failure to pay those
fees within the reglementary period allows only discretionary, not automatic, dismissal; second,
such power should be used by the court in conjunction with its exercise of sound discretion in
accordance with the tenets of justice and fair play, as well as with a great deal of circumspection
in consideration of all attendant circumstances.

In petitioners Memorandum,[41] our ruling in the case of Mactan Cebu International Airport
Authority (MCIAA) v. Mangubat,[42] where we held that [l]ate payment of docket fees may be
admitted when the party showed willingness to abide by the Rules by immediately paying the
required fees,[43] was cited. This doctrine cannot be applied in the case at bar because, in the
MCIAA case, the Solicitor General, as counsel for the petitioner, paid the appellate docket fees
six (6) days after the timely filing of the notice of appeal. In the instant case, the payment of the
appellate docket fees was made 132 days after the lapse of the reglementary period to take an
appeal. It is also worthy to note that when the Solicitor General filed the notice of appeal, the
1997 Rules had been in effect only for fourteen (14) days, and that is why we ruled that the
omission of the Solicitor General to pay docket fees together with the filing of the notice of
appeal fourteen (14) days after the effectivity of the new rules may be excused.[44]

The payment of the full amount of the docket fee is an indispensable step for the perfection of an
appeal.[45] In both original and appellate cases, the court acquires jurisdiction over the case only
upon the payment of the prescribed docket fees.[46] Inasmuch as the payment of the appellate
docket fees in this case was made 132 days after the expiration of the period for the perfection of
an appeal, the Court of Appeals did not acquire jurisdiction over the case, except to order its
dismissal. Thus, the Decision rendered by the RTC, Branch 137, Makati City, in Civil Case No.
97-2745, dated 21 December 1998, became final and executory by operation of law.

The term substantial justice is not a magic wand that will automatically compel this Court to
suspend procedural rules. Procedural rules are not to be belittled or dismissed simply because
their non-observance may have resulted in prejudice to a partys substantive rights. Like all rules,
they are required to be followed except only for the most persuasive of reasons when they may
be relaxed to relieve a litigant of an injustice not commensurate with the degree of his
thoughtlessness in not complying with the procedure prescribed.[47]

Considering the circumstances present here, we are not exactly convinced that a relaxation of the
Rules is in order. Petitioner miserably failed to provide this Court with persuasive and weighty
reasons that would allow us to exercise our discretion on whether or not to adhere to the strict
requirement of the law. Thus, as propitiously pointed out by respondents, we must yield to the
time-honored principle Justice is for all. Litigants to an action have equal footing in a court of
law. Rules are laid down for the benefit of all and should not be made dependent upon a suitors
sweet time and own bidding.[48]

WHEREFORE, in view of all the foregoing, the petition is hereby DISMISSED. The assailed
Resolutions of the Court of Appeals are hereby AFFIRMED. Costs against petitioner.

SO ORDERED.

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

[1] Rollo, p. 22.

[2] Penned by Judge Santiago Javier Ranada, Rollo, pp. 99-103.

[3] Rollo, p. 123.

[4] Rollo, pp. 104-116.

[5] Rollo, pp. 117-119.

[6] Rollo, pp. 120-121.

[7] Petition for Certiorari, p. 2; Rollo, p. 10.

[8] Rollo, p. 123.

[9] Rollo, p. 122.

[10] Records, p. 3.

[11] Records, pp. 11-13.

[12] Records, p. 13.

[13] Records, pp. 23-24.

Records, p. 26; Thirteenth Division, penned by Associate Justice Eloy R. Bello, Jr., with
[14]
Associate Justices Delilah Vidallon-Magtolis and Eliezer R. De Los Santos, concurring.

[15] Rollo, p. 130.

[16] Rollo, pp. 130-133.

[17] Records, pp. 32-33.

[18] Records, pp. 34-36.

[19] Records, p. 38; Former Thirteenth Division.

[20] Rollo, p. 11.

[21] Rollo, p. 12.

[22] G.R. No. 140894, 27 November 2000, 346 SCRA 141.

[23] G.R. No. 140162, 22 November 2000, 345 SCRA 579.

[24] G.R. No. 114726, 14 February 1996, 253 SCRA 632.

[25] Rollo, p. 13.

[26] Supra.

[27] Supra.

[28] Supra.

[29] B.P. Blg. 129.

[30] Resolution of the Court En Banc dated 11 January 1983, E. Appellate Procedure, par. 20.

[31] Resolution of the Court En Banc dated 04 September 1990, effective 02 November 1990.

[32] Lazaro v. Court of Appeals, G.R. No. 137761, 06 April 2000, 330 SCRA 208.

[33] Badillo v. Tayag, G.R. No. 143976 and No. 145846, 03 April 2003, 400 SCRA 494.

[34] Rule 41, Section 3, 1997 Rules on Civil Procedure.

[35] Manalili v. De Leon, G.R. No. 140858, 27 November 2001, 370 SCRA 625.

[36]Navarro v. Metropolitan Bank and Trust Co., G.R. No. 138031, 27 May 2004, citing Alfonso
v. Andres, G.R. No. 139611, 04 October 2002, 390 SCRA 465.

[37] 1997 Rules on Civil Procedure.

[38] Ibid.

[39] Navarro v. Metropolitan Bank and Trust Co., supra.

[40] G.R. No. 149227, 11 December 2003, 418 SCRA 381, 387.

[41] Rollo, pp. 131-139.

[42] G.R. No. 136121, 16 August 1999, 312 SCRA 463.

[43] Ibid., at 467 (Emphasis ours).

[44] Ibid.

[45]Rodillas v. COMELEC, G.R. No. 119055, 10 July 1995, 245 SCRA 702, citing Dorego v.
Perez, G.R. No. L-24922, 02 January 1968, 22 SCRA 8, and Bello v. Fernando, G.R. No. L-
16970, 30 January 1962, 4 SCRA 135.

[46]Ibid., citing Acda v. Minister of Labor, G.R. No. L-51607, 15 December 1982, 119 SCRA
306.

[47]Lazaro v. Court of Appeals, supra, citing Galang v. CA, G.R. No. 76221, 29 July 1991, 199
SCRA 683; Pedrosa v. Hill, G.R. No. 120804, 14 June 1996, 257 SCRA 373; Ditching v. CA,
G.R. No. 109834, 18 October 1996, 263 SCRA 343; Ginete, et al. v. CA, G.R. No. 127596, 24
September 1998, 296 SCRA 38.

[48] Rollo, p. 146.

THIRD DIVISION

[G.R. No. 143275. September 10, 2002]

LAND BANK OF THE PHILIPPINES, petitioner, vs. ARLENE DE LEON and BERNARDO
DE LEON, respondents.

DECISION

CORONA, J.:
Before us is a petition for review of the resolution, [1] dated February 15, 2000, of the Court of
i

Appeals [2] dismissing the ordinary appeal of petitioner Land Bank of the Philippines (LBP, for
ii

brevity), and resolution [3] dated May 22, 2000 denying the motion for reconsideration thereof.
iii

The undisputed facts as found by the appellate court are as follows:

The petitioners-appellees Arlene de Leon and Bernardo de Leon are the registered owners of a
parcel of land situated at San Agustin, Concepcion, Tarlac covered by TCT No. 163051 with a
total area of 50.1171 hectares. The subject property was voluntarily offered for sale to the
government pursuant to RA 6657 at P50,000.00 per hectare. The Department of Agrarian Reform
(DAR) made a counter offer of P17,656.20 per hectare, or a total amount of P884,877.54, but the
same was rejected. Another offer was made by DAR increasing the amount to P1,565,369.35. In
view of the petitioners-appellees failure to respond to the new offer made by DAR, the
Department of Agrarian Reform Adjudication Board (DARAB) took cognizance of the case
pursuant to Sec. 16 (d) of RA 6657. Subsequently, the DARAB issued an Order directing
respondent-appellant LBP to recompute the value of the subject property in accordance with
DAR Administrative Order No. 6, Series of 1992. Applying the pertinent provisions of the said
DAR administrative order, respondent-appellant arrived at a recomputed land value as follows:

Land Use Area Acquired Value/hectare Total/Land Value

Sugarland 32.4187 P61,758.85 P2,002,141.63

Riceland 16.6984 P28,449.80 P 475,066.14
Idle land 1.0000 P14,523.78 P 14,523.78

or an aggregate amount of P2,491,731.65, which was again rejected by the petitioners-appellees.

In a Petition dated October 27, 1994, filed with the Regional Trial Court, Branch 63, Tarlac,
which is the designated Special Agrarian Court in the area, petitioners-appellees asked the court,
among others, to fix the just compensation of the subject property.

In due time the court rendered a summary judgment on December 19, 1997 fixing the
compensation of the subject property as follows:

a. P1,260,000.00 for the 16.69 hectares of riceland;

b. P2,957,250.00 for the 30.4160 hectares of sugarland.

Within the time allowed, respondent-appellant filed a Motion for Reconsideration which was
subsequently denied by the Court. [4]
iv

xxx xxx xxx

On March 17, 1998, the Department of Agrarian Reform filed in the Court of Appeals a petition
for review of the decision of the Special Agrarian Court. The said petition, docketed as CA-G.R.
SP No. 47005, was assigned to the Special Third (3 ) Division of the Court of Appeals. Petitioner
rd
LBP also initiated in the Court of Appeals an appeal of the same decision of the Special Agrarian
Court by filing a notice of appeal. Docketed as CA-G.R. CV No. 60365, the said ordinary appeal
was assigned to the Fourth (4 ) Division of the Court of Appeals.
th

On November 6, 1998, the Special Third (3 ) Division of the appellate court, through then
rd

Associate Justice Minerva Gonzaga-Reyes [5], rendered in CA-G.R. SP No. 47005 a decision
v vi
[6],
the dispositive portion of which reads:

WHEREFORE, premises considered, the petition for review is GIVEN DUE COURSE. The
decision dated February 9, 1998 is partially reconsidered. The trial court is ordered to recompute
the compensation based on the selling price of palay at 213.00 per cavan. Petitioner is ordered to
pay legal interest at 6% of the compensation so fixed from 1990 until full payment is made by
the government.

SO ORDERED. vii
[7]

Thereafter, on February 15, 2000, the Fourth (4 ) Division of the Court of Appeals dismissed
th

petitioner LBPs ordinary appeal (CA-G.R. CV No. 60365), in a resolution dated February 15,
2000, the dispositive portion of which reads:

WHEREFORE, the appeal is DISMISSED for lack of merit. viii

[8]

In dismissing the ordinary appeal (CA-G.R. CV No. 60365) instituted by petitioner LBP, the
appellate court reasoned that the mode of appeal followed by the petitioner was erroneous
considering that Section 60 of RA 6657, otherwise known as the Comprehensive Agrarian
Reform Law, mandates that appeals from decisions of Special Agrarian Courts should be by
petition for review. Therefore, the notice of appeal filed by LBP was ineffectual and did not stop
the running of the period of appeal. Also, the appellate court took note of the decision rendered
by the Special Third (3 ) Division of the same court involving the same issue and parties, to wit:
rd

All these notwithstanding LBP does not stand to lose anything at all. While it did suffer a setback
in this instant case LBP in one way or the other still we note that it is likewise victorious in the
appeal brought by the DAR (CA-G.R. SP 47005). In a decision rendered on November 6, 1998
this court ordered the trial court to recompute the compensation based on the selling price of
palay at P213.00 per cavan. Thus to this effect with more reason that we should deny the appeal
even granting the mode of appeal as availed of is correct to avoid any contradiction of this
divisions with that of the other. [9] ix

Petitioner LBP filed a motion for reconsideration but the same was denied in a resolution dated
May 22, 2000.

Hence, this petition questioning the resolutions of the Fourth (4 ) Division of the Court of
th

Appeals on the following assignment of errors:

I
IN RULING THAT SECTION 60 OF RA 6657 PROVIDES THE PROPER MODE FOR THE
REVIEW OF THE DECISIONS OF THE SPECIAL AGRARIAN COURTS DESPITE
SECTION 61 OF RA 6657 WHICH EXPRESSLY MANDATES THAT THE RULES OF
COURT SHALL GOVERN THE REVIEW OF THE DECISIONS OF THE SPECIAL
AGRARIAN COURTS BY THE COURT OF APPEALS;

II

IN NOT RECOGNIZING THAT SECTION 61 OF RA 6657 PREVAILS OVER SECTION 60

OF RA 6657, INASMUCH AS THE MODE OF APPEAL OF A COURTS DECISION IS A
MATTER OF PROCEDURE WHICH IS COVERED BY THE EXCLUSIVE RULE-MAKING
POWER OF THE SUPREME COURT UNDER SECTION 5(5), ARTICLE VIII OF THE 1987
CONSTITUTION AND IN ACCORDANCE WITH EXISTING JURISPRUDENCE;

III

IN DECLARING THAT THE SUPREME COURT MERELY MADE AN INADVERTENT

MISTAKE IN REVISING SECTION 1, RULE 43 OF THE RULES OF COURT AND
REMOVING THE DECISIONS OF THE SPECIAL AGRARIAN COURT FROM THE LIST
OF THOSE APPEALABLE TO THE COURT OF APPEALS BY PETITION FOR REVIEW;
AND

IV

IN DISMISSING THE APPEAL OF THE PETITIONER, DESPITE ITS RULING THAT THE
SUPREME COURT MADE A MISTAKE IN ITS ADMINISTRATIVE ORDERS,
RENDERING SUCH DISMISSAL AS HIGHLY UNJUST, OPPRESSIVE AND CONTRARY
TO DUE PROCESS OF LAW. [10] x

The case at bar requires an interpretation of Sections 60 and 61 of RA 6657. The said provisions
provide that:

Section 60. Appeals, - An appeal may be taken from the decision of the Special Agrarian Courts
by filing a petition for review with the Court of Appeals within fifteen (15) days from receipt of
notice of the decision; otherwise, the decision shall become final.

Section 61.- Procedure in Review. Review by the Court of appeals or the Supreme Court, as the
case may be, shall be governed by the Rules of Court. The Court of Appeals, however, may
require the parties to file simultaneous memoranda within a period of fifteen (15) days from
notice, after which the case is deemed submitted for decision.

Respondent spouses point to Section 60 of RA 6657 to support their view that the mode of
appeal initiated by petitioner LBP was erroneous. On the other hand, petitioner LBP believes that
the mode of appeal it used is permissible under Section 61 of the same law.
What indeed is the proper mode of appeal from decisions of the Regional Trial Courts, sitting as
Special Agrarian Courts, in the determination of just compensation an appeal by way of a
petition for review or an ordinary appeal?

Section 2 of Rule 41 of the 1997 Revised Rules of Civil Procedure provides for three modes of
appeal, to wit:

Sec. 2. Modes of Appeal.

(a) Ordinary appeal. The appeal to the Court of Appeals in cases decided by the Regional Trial
Court in the exercise of its original jurisdiction shall be taken by filing a notice of appeal with the
court which rendered the judgment or final order appealed from and serving a copy thereof upon
the adverse party. No record on appeal shall be required except in special proceedings and other
cases or multiple or separate appeals where the law or these Rules so require. In such cases, the
record on appeal shall be filed and served in like manner.

(b) Petition for Review. The appeal to the Court of Appeals in cases decided by the Regional
Trial Court in the exercise of its appellate jurisdiction shall be by petition for review in
accordance with Rule 42.

(c) Appeal by Certiorari. In all cases where only questions of law are raised or involved, the
appeal shall be to the Supreme Court by petition for review on certiorari in accordance with Rule
45.

Petitioner LBP, in its bid to maintain the legitimacy of its appeal, contends that the proper mode
of appeal from a decision of the Special Agrarian Court is by way of a notice of appeal due to the
reference by Section 61 of RA 6657 to the Rules of Court as the governing procedure for appeals
to the Court of Appeals. This being the case, the petitioner claims that the procedure for ordinary
appealed cases provided for in Section 2(a) of Rule 41 of the 1997 Revised Rules of Civil
Procedure must be followed, that is, a notice of appeal is required in order to perfect the appeal.
According to the petitioner, this is the proper mode of appeal in the case at bar considering that
the appealed decision is that of the Regional Trial Court in the exercise of its original
jurisdiction. Moreover, Section 1 of Rule 43 of the 1997 Revised Rules of Civil Procedure [11] xi

(pertaining to appeals by way of petitions for review to the Court of Appeals of decisions of
quasi-judicial agencies and the Court of Tax Appeals), does not include decisions of the Regional
Trial Courts acting as Special Agrarian Courts.

We deny the petition.

A petition for review, not an ordinary appeal, is the proper procedure in effecting an appeal from
decisions of the Regional Trial Courts acting as Special Agrarian Courts in cases involving the
determination of just compensation to the landowners concerned. Section 60 of RA 6657 clearly
and categorically states that the said mode of appeal should be adopted. There is no room for a
contrary interpretation. Where the law is clear and categorical, there is no room for construction,
but only application. [12]
xii
According to the petitioner, Section 61 of RA 6657 should be followed, not Section 60. The
reference by Section 61 to the Rules of Court implies that an ordinary appeal requiring a notice
of appeal is the proper manner of appealing decisions of Special Agrarian Courts on just
compensation because Section 2(a) of Rule 41 of the 1997 Revised Rules of Civil Procedure
provides that decisions of the Regional Trial Courts in the exercise of their original jurisdiction
follow the procedure governing ordinary appeals.

We do not agree.

First, there is no conflict between Section 60 and 61 of RA 6657 inasmuch as the Rules of Court
do not at all prescribe the procedure for ordinary appeals as the proper mode of appeal for
decisions of Special Agrarian Courts. Section 61 in fact makes no more than a general reference
to the Rules of Court and does not even mention the procedure for ordinary appeals in Section 2,
Rule 41 of the 1997 Revised Rules of Civil Procedure as the appropriate method of elevating to
the Court of Appeals decisions of Special Agrarian Courts in eminent domain cases.

Second, the failure to mention Special Agrarian Courts in Section 1 of Rule 43 of the Revised
Rules of Civil Procedure cannot be construed to mean that a petition for review is not
permissible for decisions of the said special courts. In fact, the said Rule is not relevant to
determine whether a petition for review is the proper mode of appeal from decisions of Regional
Trial Courts in agrarian cases, that is, when they act as Special Agrarian Courts. Section 1 of
Rule 43 of the 1997 Revised Rules of Civil Procedure merely mentions the Court of Tax Appeals
and the other different quasi-judicial agencies without exclusivity in its phraseology. Such
omission cannot be construed to justify the contention that a petition for review is prohibited for
decisions on special agrarian cases inasmuch as the category is for quasi-judicial agencies and
tax courts to which the Regional Trial Courts do not properly belong. Although Supreme Court
Circular No. 1-91 [13] (precursor to Rule 43 of the Revised Rules of Civil Procedure) included
xiii

the decisions of Special Agrarian Courts in the enumeration requiring petition for review, its non-
inclusion later on in Rule 43 merely signifies that it was inappropriately classified as a quasi-
judicial agency.

What is indisputable is that Section 60 expressly regards a petition for review as the proper
way of appealing decisions of agrarian courts. So far, there is no rule prescribed by this
Court expressly disallowing the said procedure.

Third, far from being in conflict, Section 61 of RA 6657 can easily be harmonized with Section
60. The reference to the Rules of Court means that the specific rules for petitions for review in
the Rules of Court and other relevant procedures in appeals filed before the Court of Appeals
shall be followed in appealed decisions of Special Agrarian Courts. Considering that RA 6657
cannot and does not provide the details on how the petition for review shall be conducted, a
suppletory application of the pertinent provisions of the Rules of Court is necessary. In fact,
Section 61 uses the word review to designate the mode by which the appeal is to be effected. The
reference therefore by Section 61 to the Rules of Court only means that the procedure under Rule
42 for petitions for review is to be followed for appeals in agrarian cases.
According to the petitioner, an ordinary appeal prescribed under the Rules of Court should
prevail over a petition for review provided under Section 60 of RA 6657 inasmuch as a contrary
interpretation would violate the constitutional provision granting to the Supreme Court the power
to promulgate rules concerning the protection and enforcement of constitutional rights,
pleadings, practice, and procedure in all courts, the admission to the practice of law, the
Integrated Bar, and Legal Assistance to the underprivileged. (italics supplied) [14]
xiv

As earlier mentioned, there is nothing in the Rules of Court that categorically prohibits the
adoption of the procedure for petitions for review of decisions of Special Agrarian Courts.
Section 60 of RA 6657 and the provisions of the Rules of Court can be harmonized and can co-
exist.

Moreover, the same Section 5 (5), Article VIII, of the 1987 Philippine Constitution quoted by the
petitioner states that (r)ules of procedure of special courts and quasi-judicial bodies shall remain
effective unless disapproved by the Supreme Court. Section 60 is obviously a special procedure.
Contrary to the petitioners contention, it cannot be otherwise merely because it was formulated
by the legislature and not by any special body. As long as the said section provides for a
particular process for the governance of the special court concerned, the provision is accurately
classified as a special procedure. Subject to constitutional limitations, the statutory enactment of
a special procedure cannot be said to encroach on the power of this Court to formulate rules of
procedure for the reason that we have not yet provided for a particular process specifically
governing agrarian courts. In fact, this Court exercises its constitutional power to promulgate
special rules of procedure by adopting Sections 60 and 61 of RA 6657 declaring a petition for
review as the proper mode of appeal to the Court of Appeals.

The reason why it is permissible to adopt a petition for review when appealing cases decided by
the Special Agrarian Courts in eminent domain cases is the need for absolute dispatch in the
determination of just compensation. Just compensation means not only paying the correct
amount but also paying for the land within a reasonable time from its acquisition. Without
prompt payment, compensation cannot be considered just for the property owner is made to
suffer the consequences of being immediately deprived of his land while being made to wait for
a decade or more before actually receiving the amount necessary to cope with his loss. [15] Such
xv

objective is more in keeping with the nature of a petition for review.

Unlike an ordinary appeal, a petition for review dispenses with the filing of a notice of appeal or
completion of records as requisites before any pleading is submitted. A petition for review
hastens the award of fair recompense to deprived landowners for the government-acquired
property, an end not foreseeable in an ordinary appeal. This is exemplified by the case at bar in
which the petition for review before the Special Third (3 ) Division (CA-G.R. SP No. 47005)
rd

was disposed of way ahead of the ordinary appeal filed before the Fourth (4 ) Division (CA-G.R.
th

CV No. 60365) in the Court of Appeals.

Inasmuch as the notice of appeal filed by petitioner LBP did not stop the running of the
reglementary period to file a petition for review, the time to appeal the decision of the Special
Agrarian Court has lapsed, rendering the said decision final and executory.
WHEREFORE, the appealed RESOLUTIONS, dated February 15, 2000, and May 22, 2000,
respectively, of the Court of Appeals are hereby AFFIRMED. No costs.

SO ORDERED.

Panganiban, and Carpio-Morales, JJ., concur.

Puno, (Chairman), J., concur in the result.

Sandoval-Gutierrez, J., on leave.

EN BANC

[G.R. No. 143275. March 20, 2003]

LAND BANK OF THE PHILIPPINES, petitioner, vs. ARLENE DE LEON and BERNARDO
DE LEON, respondents.

RESOLUTION

CORONA, J.:

Before us are the motion for reconsideration dated October 16, 2002 and supplement to the
motion for reconsideration dated November 11, 2002 filed by movant-petitioner Land Bank of
the Philippines (LBP, for brevity) seeking a reversal of this Courts Decision [1] dated September
48

10, 2002 which denied LBPs petition for review.

Herein respondent spouses Arlene and Bernardo de Leon filed a petition to fix the just
compensation of a parcel of land [2] before the Regional Trial Court of Tarlac, Branch 63, acting
49

as a Special Agrarian Court. On December 19, 1997, the agrarian court rendered summary
judgment fixing the compensation of the subject property as follows: (1) P1,260,000 for the
16.69 hectares of riceland and (2) P2,957,250 for the 30.4160 hectares of sugarland.

The Department of Agrarian Reform (DAR, for brevity) and LBP both filed separate appeals
using different modes. DAR filed a petition for review while LBP interposed an ordinary appeal

48[1] G.R. No. 143275.

49[2] Covered by TCT No. 163051 with a total area of 50. 1171 hectares.
by filing a notice of appeal. DARs petition for review [3] was assigned to the Special Third
50

Division of the Court of Appeals while LBPs ordinary appeal [4] was assigned to the Fourth
51

Division of the same court.

On November 6, 1998, the appellate courts Special Third Division rendered a decision in the
petition for review filed by DAR, the dispositive portion of which reads:

WHEREFORE, premises considered, the petition for review is GIVEN DUE COURSE. The
decision dated February 9, 1998 is partially reconsidered. The trial court is ordered to recompute
the compensation based on the selling price of palay at 213.00 per cavan. Petitioner is ordered to
pay legal interest at 6% of the compensation so fixed from 1990 until full payment is made by
the government. [5]
52

Meanwhile, on February 15, 2000, the appellate courts Fourth Division dismissed LBPs ordinary
appeal primarily holding that LBP availed of the wrong mode of appeal. [6] LBP filed a motion
53

for reconsideration but the same was denied.

On July 14, 2000, LBP filed before this Court a petition for review of the decision of the Court of
Appeals. On September 10, 2002, this Court rendered a Decision, the dispositive portion of
which reads:

WHEREFORE, the appealed RESOLUTIONS, dated February 15, 2000 and May 22, 2000,
respectively, of the Court of Appeals are hereby AFFIRMED. No costs.

SO ORDERED. 54
[7]

In affirming the dismissal by the appellate court of LBPs ordinary appeal, this Court held that
Section 60 [8] of RA 6657 (The Comprehensive Agrarian Reform Law) is clear in providing
55

petition for review as the appropriate mode of appeal from decisions of Special Agrarian Courts.
Section 61 [9] (the provision on which LBP bases its argument that ordinary appeal is the correct
56

50[3] Docketed as CA-G.R. SP No. 47005.

51[4] Docketed as CA-G.R. CV No. 60365.

52[5] Rollo, p. 105.

53[6] Rollo, pp. 12-13.

54[7] Rollo, p. 575.

55[8]Section 60. Appeals. An appeal may be taken from the decision of the Special Agrarian
Courts by filing a petition for review with the Court of Appeals within fifteen (15) days from
receipt of notice of the decision; otherwise, the decision shall become final.

56[9] Section 61. Procedure in Review. Review by the Court of Appeals or the Supreme Court, as
the case may be, shall be governed by the Rules of Court. The Court of Appeals, however, may
mode of appeal from decisions of Special Agrarian Courts) merely makes a general reference to
the Rules of Court and does not categorically prescribe ordinary appeal as the correct way of
questioning decisions of Special Agrarian Courts. Thus, we interpreted Section 61 to mean that
the specific rules for petitions for review in the Rules of Court and other relevant procedures of
appeals shall be followed in appealed decisions of Special Agrarian Courts.

We likewise held that Section 60 of RA 6657 is constitutional and does not violate this Courts
power to promulgate rules concerning the protection and enforcement of constitutional rights,
pleadings, practice and procedure in all courts, the admission to the practice of law, the
Integrated Bar and legal assistance to the underprivileged. [10] We ruled that the Rules of Court
57

does not categorically prescribe ordinary appeal as the exclusive mode of appeal from decisions
of Special Agrarian Courts. The reference by Section 61 to the Rules of Court in fact even
supports the mode of a petition for review as the appropriate way to appeal decisions of the
Special Agrarian Courts. Furthermore, the same Section 5(5), Article VIII of the 1987 Philippine
Constitution quoted by LBP states that rules of procedure of special courts and quasi-judicial
bodies shall remain effective unless disapproved by the Supreme Court. Since Section 60 is a
special procedure and this Court has not yet provided for a particular process for appeals from
decisions of agrarian courts, the said section does not encroach on our rule-making power.

Hence, LBP filed the instant motion for reconsideration and supplement to the motion for
reconsideration reiterating its claim in the petition for review that Section 60 of RA 6657 is
unconstitutional. LBP still maintains that a legislative act like Section 60 infringes on the
exclusive rule-making power of this Court in violation of the 1987 Philippine Constitution.

In the event that said argument is again rejected, LBP pleads that the subject Decision should at
least be given prospective application considering that more than 60 similar agrarian cases filed
by LBP via ordinary appeal before the Court of Appeals are in danger of being dismissed
outright on technical grounds on account of our ruling herein. This, according to LBP, will wreak
financial havoc not only on LBP as the financial intermediary of the Comprehensive Agrarian
Reform Program but also on the national treasury and the already depressed economic condition

require the parties to file simultaneous memoranda within a period or fifteen (15) days from
notice, after which the case is deemed submitted for decision.

57[10] Section 5(5), Article VIII, 1987 Constitution of the Philippines.

of our country. [11] Thus, in the interest of fair play, equity and justice, LBP stresses the need for
58

the rules to be relaxed so as to give substantial consideration to the appealed cases.

On the first ground, we find it needless to re-discuss the reasons already propounded in our
September 10, 2002 Decision explaining why Section 60 of RA 6657 does not encroach on our
constitutional rule-making power.

Be that as it may, we deem it necessary to clarify our Decisions application to and effect on LBPs
pending cases filed as ordinary appeals before the Court of Appeals. It must first be stressed that
the instant case poses a novel issue; our Decision herein will be a landmark ruling on the proper
way to appeal decisions of Special Agrarian Courts. Before this case reached us, LBP had no
authoritative guideline on how to appeal decisions of Special Agrarian Courts considering the
seemingly conflicting provisions of Section 60 and 61 of RA 6657.

More importantly, the Court of Appeals has rendered conflicting decisions on this precise issue.
On the strength of Land Bank of the Philippines vs. Hon. Feliciano Buenaventura, penned by

58[11] The pertinent portions of the supplement to the motion for reconsideration provides that:

From the initial CARP fund of P595.8 Million set up in 1987, the total CARP fund released to
the LBP and paid to the landowners and utilized for operational support amounted to P29.863
Billion as of September 2002 (please see Annex H herein). This is the total expense over a period
of fifteen (15) years and covers hardly a third of the statutory budget of P100 Billion for the
CARP. The National Treasury lacks the money to pay for the exorbitant and unreasonable claims
of the landowners which will have to be paid once LBPs number of appealed cases before the
Court of Appeals are dismissed due to wrong mode of appeal. Such a scenario will definitely
aggravate the countrys fiscal deficit which stands at P180 Billion for the current year (please see
Annex T hereof).

x x x x

It is worth stressing that LBPs total funding requirement for 2002 for landowners compensation
is P5.690 Billion, but the Congress-approved budget as per General Appropriations Act of 2002
is only P2.854 Billion bringing a funding gap of P2.836 Billion (Annex J).

9. As of September 2002, LBP/s total cash advances for landowners compensation stands at
P3.044 Billion (Annex K). By the end of December 2002, LBPs projected total cash advances
will increase by P900 Million (covering October to December 2002), for a total projected
advance of P3.944 Billion for the year (Annex L hereof).

For its huge cash advances, LBP hopes to be refunded by the National Government from the
Special Allotment Release Order (SARO), which is still unfunded at the present time, in the
amount of P2.189 Billion (Annex L hereof). This will leave a total projected net unrefunded
advance of P1.755 Billion by the end of December 2002 (Annex L).

The foregoing clearly and adequately shows the difficulty, if not impossibility, of LBP getting a
refund, and consequently of funding the landowners claims.(Rollo, pp. 498-499)
Associate Justice Salvador Valdez, Jr. of the Court of Appeals, certain decisions [12] of the
59

appellate court held that an ordinary appeal is the proper mode. On the other hand, a decision [13]
60

of the same court, penned by Associate Justice Romeo Brawner and subject of the instant review,
held that the proper mode of appeal is a petition for review. In another case, [14] the Court of
61

Appeals also entertained an appeal by the DAR filed as a petition for review.

On account of the absence of jurisprudence interpreting Sections 60 and 61 of RA 6657

regarding the proper way to appeal decisions of Special Agrarian Courts as well as the
conflicting decisions of the Court of Appeals thereon, LBP cannot be blamed for availing of the
wrong mode. Based on its own interpretation and reliance on the Buenaventura ruling, LBP
acted on the mistaken belief that an ordinary appeal is the appropriate manner to question
decisions of Special Agrarian Courts.

Hence, in the light of the aforementioned circumstances, we find it proper to emphasize the
prospective application of our Decision dated September 10, 2002. A prospective application of
our Decision is not only grounded on equity and fair play but also based on the constitutional
tenet that rules of procedure shall not impair substantive rights.

In accordance with our constitutional power to review rules of procedure of special courts, [15]
62

our Decision in the instant case actually lays down a rule of procedure, specifically, a rule on the
proper mode of appeal from decisions of Special Agrarian Courts. Under Section 5 (5), Article
VIII of the 1987 Philippine Constitution, rules of procedure shall not diminish, increase or
modify substantive rights. In determining whether a rule of procedure affects substantive rights,
the test is laid down in Fabian vs. Desierto, [16] which provides that:
63

[I]n determining whether a rule prescribed by the Supreme Court, for the practice and procedure
of the lower courts, abridges, enlarges, or modifies any substantive right, the test is whether the
rule really regulates procedure, that is, the judicial process for enforcing rights and duties
recognized by substantive law and for justly administering remedy and redress for a disregard or

59[12] Gabatin vs. Department of Agrarian Reform, et. al., CA-G.R. CV No. 61240, penned by
Associate Justice Delilah Vidallon-Magtolis; Land Bank of the Philippines vs. Hon. Salcedo, CA-
G.R. No. SP No. 63651, September 28, 2001, penned by Associate Justice Rodrigo Cosico;
Tiangco vs. Secretary of Argrarian Reform, CA- G.R. CV No. 61676, October 5, 2001, penned
by Associate Justice Hilarion Aquino; Alimurong vs. Republic of the Philippines, CA-G.R. CV
No. 70721, July 5, 2002, penned by Associate Justice Mercedes Gozo-Dadole.

60[13] Land Bank of the Philippines vs. Arlene de Leon, et. al., CA-G.R. CV No. 60365, February
15, 2000.

61[14] Docketed as CA-G.R. No. 47005 and the decision dated November 6, 1998 was penned by
Associate Justice Minerva Gonzaga-Reyes (former Associate Justice of this Court).

62[15] Section 5(5), Article VIII of the 1987 Philippine Constitution; Metro Construction, Inc. vs.
Chatham Properties, G.R. No. 141897, September 24, 2001.

63[16] 295 SCRA 470, 492, [1998]; Bernabe vs. Alejo, G.R. No. 140500, January 21, 2002.
infraction of them. If the rule takes away a vested right, it is not procedural. If the rule creates a
right such as the right to appeal, it may be classified as a substantive matter; but if it operates as
a means of implementing an existing right then the rule deals merely with procedure. (italics
supplied)

We hold that our Decision, declaring a petition for review as the proper mode of appeal from
judgments of Special Agrarian Courts, is a rule of procedure which affects substantive rights. If
our ruling is given retroactive application, it will prejudice LBPs right to appeal because pending
appeals in the Court of Appeals will be dismissed outright on mere technicality thereby
sacrificing the substantial merits thereof. It would be unjust to apply a new doctrine to a pending
case involving a party who already invoked a contrary view and who acted in good faith thereon
prior to the issuance of said doctrine.

In the 1992 case of Spouses Benzonan vs. Court of Appeals, [17] respondent Pe, whose land was
64

foreclosed by Development Bank of the Philippines in 1977 and subsequently sold to petitioners
Benzonan in 1979, tried to invoke a 1988 Supreme Court ruling counting the five-year period to
repurchase from the expiration (in 1978) of the one-year period to redeem the foreclosed
property. Said 1988 ruling reversed the 1957 and 1984 doctrines which counted the five-year
period to repurchase from the date of conveyance of foreclosure sale (in 1977). Using the 1988
ruling, respondent Pe claimed that his action to repurchase in 1983 had not yet prescribed.

However, this Court refused to apply the 1988 ruling and instead held that the 1957 and 1984
doctrines (the prevailing ruling when Pe filed the case in 1983) should govern. The 1988 ruling
should not retroact to and benefit Pes 1983 case to repurchase. Thus, the action had indeed
prescribed. This Court justified the prospective application of the 1988 ruling as follows:

We sustain the petitioners' position. It is undisputed that the subject lot was mortgaged to DBP on
February 24, 1970. It was acquired by DBP as the highest bidder at a foreclosure sale on June 18,
1977, and then sold to the petitioners on September 29, 1979.

At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141 as amended was
that enunciated in Monge and Tupas cited above. The petitioners Benzonan and respondent Pe
and the DBP are bound by these decisions for pursuant to Article 8 of the Civil Code "judicial
decisions applying or interpreting the laws or the Constitution shall form a part of the legal
system of the Philippines." But while our decisions form part of the law of the land, they are also
subject to Article 4 of the Civil Code which provides that "laws shall have no retroactive effect
unless the contrary is provided." This is expressed in the familiar legal maxim lex prospicit, non
respicit, the law looks forward not backward. The rationale against retroactivity is easy to
perceive. The retroactive application of a law usually divests rights that have already
become vested or impairs the obligations of contract and hence, is unconstitutional
(Francisco v. Certeza, 3 SCRA 565 [1961]).

The same consideration underlies our rulings giving only prospective effect to decisions
enunciating new doctrines.

64[17] 205 SCRA 515 [1992].

 xxx xxx xxx

The buyers in good faith from DBP had a right to rely on our rulings in Monge and Tupas when
they purchased the property from DBP in 1979 or thirteen (13) years ago. Under the rulings in
these two cases, the period to repurchase the disputed lot given to respondent Pe expired on June
18, 1982. He failed to exercise his right. His lost right cannot be revived by relying on the 1988
case of Belisario. The right of petitioners over the subject lot had already become vested as of
that time and cannot be impaired by the retroactive application of the Belisario ruling. [18]
65

(emphasis supplied)

WHEREFORE, the motion for reconsideration dated October 16, 2002 and the supplement to
the motion for reconsideration dated November 11, 2002 are PARTIALLY GRANTED. While
we clarify that the Decision of this Court dated September 10, 2002 stands, our ruling therein
that a petition for review is the correct mode of appeal from decisions of Special Agrarian Courts
shall apply only to cases appealed after the finality of this Resolution.

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Puno, Vitug, Mendoza, Panganiban, Quisumbing, Sandoval-
Gutierrez, Carpio, Austria-Martinez, Carpio-Morales, Callejo, Sr., and Azcuna, JJ., concur.

Ynares-Santiago, J., on leave.

65[18] Id., p. 528.

i[1] Penned by Associate Justice Romeo Brawner and concurred in by Associate Justices Fermin Martin,
Jr. and Renato C. Dacudao; Rollo, pp. 7-13.

ii[2] Fourth Division.

iii[3] Rollo, p. 14.

iv[4] Rollo, pp. 7-8.

v[5] Former Associate Justice of the Supreme Court.

vi[6] Rollo, pp. 96-102.

vii[7] Rollo, p. 101.

viii[8] Rollo, p. 13.

ix[9] Rollo, pp.12-13.

x[10] Rollo, pp. 24-25.

xi[11] Section 1. Scope. This Rule shall apply to appeals from judgments or final orders of the Court of
Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-
judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil
Service Commission, Central Board of Assessment Appeals, Securities and Exchange Commission,
Office of the President, Land Registration Authority, Social Security Commission, Civil Aeronautics
Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification
Administration, Energy Regulatory Board, National Telecommunications Commission, Department of
Agrarian Reform under Republic Act No. 6657, Government Service Insurance System, Employees
Compensation Commission, Philippine Atomic Energy Commission, Board of Investments,
Construction Industry Arbitration Commission, and voluntary arbitrators authorized by law.

xii[12] National Telecommunications Commission vs. Court of Appeals, 311 SCRA 508, 514 (1999).

xiii[13] The Circular is entitled Prescribing the Rules Governing Appeals to the Court of Appeals from a
Final Order or Decision of the Court of Tax Appeals and Quasi-Judicial Agencies.

xiv[14] Section 5(5), Article VIII, 1987 Constitution of the Philippines.

xv[15] Estate of Salud Jimenez vs. Philippine Export Processing Zone, 349 SCRA 240, 264 (2001).
 Republic of the Philippines

Supreme Court

Manila

THIRD DIVISION

PEOPLE OF THE PHILIPPINES,

Appellee,

- versus -

SITTI DOMADO,

Appellant.
G.R. No. 172971

Present:

CARPIO MORALES, J., Chairperson,

BRION,
BERSAMIN,

*DEL CASTILLO, and

**ABAD, JJ.

Promulgated:

June 16,
2010x-----------------------------------------------------------------------------------------x
DECISION

BRION, J.:

We resolve in this appeal the challenge to the February 28, 2006 decision[1] of the
Court of Appeals (CA) in CA-G.R. CR-HC No. 00432. The CA affirmed the July 28,
2004 decision[2] of the Regional Trial Court (RTC), Branch 31, Agoo, La Union, finding
appellant Sitti Domado y Sarangani (appellant) guilty beyond reasonable doubt of
violating Section 5, Article II of Republic Act (RA) No. 9165 (the Comprehensive
Dangerous Drugs Act of 2002), imposing on her the penalty of life imprisonment.

ANTECEDENT FACTS

The prosecution charged the appellant and Jehan Sarangani y Calaw (Jehan)
before the RTC with violation of Section 5, Article II of R.A. No. 9165 under an
Information that states:
 That on or about the 31st day of December 2003, in the Municipality of Santo
Tomas, Province of La Union, Philippines and within the jurisdiction of this Honorable
Court, the above-named accused, conspiring, confederating and mutually aiding each
other, did then and there willfully, unlawfully and knowingly deliver or transport twelve
(12) grams of methamphetamine hydrochloride (shabu), more or less, without any
lawful authority or permission to deliver or transport the same.

CONTRARY TO LAW.[3]

The appellant and Jehan pleaded not guilty to the charge.[4] The prosecution
presented Police Senior Inspector Reynaldo L. Lizardo (PSI Lizardo) and Police
Inspector Valeriano P. Laya II (PI Laya) at the trial. The appellant and Jehan took the
witness stand for the defense.

PSI Lizardo testified that at around 2:30 p.m. of December 31, 2003, a group from
the Second Ranger Company based in Tagudin, Ilocos Sur came to his office at Camp
Diego Silang, San Fernando, La Union, and referred to Augustus DVince Castro
(Augustus) for the filing of a case; Augustus was arrested earlier that day at a checkpoint
in Tagudin for violation of R.A. No. 9165.[5]

In the course of the investigation that followed, Augustus disclosed that he could
order shabu from his source in Dagupan City. PSI Lizardo responded by asking him to
contact his source. Augustus obliged and contacted his source by cell phone. He reported
to PSI Lizardo that his source agreed to meet him at Damortis, Sto. Tomas, La Union,
for the delivery of shabu. On the basis of this information, PSI Lizardo conducted a
briefing and ordered his officers to undertake an entrapment operation.[6]
 The entrapment team went to Damortis in two vehicles. PSI Lizardo and Augustus
were on board a Besta van, while the back-up team (composed of the Second Ranger
Company members) used a Toyota Revo. The team reached Damortis at 7:30 p.m. of
December 31, 2003. PSI Lizardo and Augustus parked the van at a Petron station, while
the back-up vehicle strategically parked nearby.[7] Augustus received word by cell
phone from his source that they were already at Damortis. Augustus relayed this
information to PSI Lizardo and that three (3) persons would deliver the shabu. At a little
past 8:00 p.m., three women alighted from a mini-bus, and went to the parked van.
Augustus waived at the three women and bidded them to board the van, which they did;
the appellant sat in front, while Jehan and Violeta Fernandez (Violeta) occupied the row
immediately behind.[8]

Augustus asked the women if they brought the shabu he had ordered.[9] The
appellant (who was seated in front beside Augustus) ordered one of the two women
seated behind them to show the items. One of the women (later identified as Jehan)
responded by showing and handing over an envelope containing three plastic sachets to
Augustus.[10] Augustus, in turn, gave these items to PSI Lizardo who was seated at the
vans third row and who locked the vans door after confirming that the plastic sachets
contained shabu.[11] PSI Lizardo then announced that he was a PDEA agent and that he
was placing them under arrest for delivery of dangerous drugs, and apprised them of
their constitutional rights. PSI Lizardo then directed their return, together with the back-
up team, to Camp Diego Silang.[12] They arrived at the camp approximately 9:00 p.m.
[13]
 At the police station, PSI Lizardo conducted an investigation and prepared an
affidavit of arrest (Exhibit C),[14] marked each plastic sachet with his initial RLL, and
made the corresponding marking sheet report.[15] He likewise conducted an inventory
of the seized items and made a certificate of inventory signed by a barangay kagawad
and by two media representatives (Exhibit G).[16] PSI Lizardo also prepared a written
request for laboratory examination (Exhibit F)[17] and a request for the medical and
physical examination of the three accused (Exhibit E).[18] The seized items were turned
over the next day to the PNP Crime Laboratory in Camp Florendo, San Fernando, La
Union.[19] The request for laboratory examination and turn over were documented
through Exhibit F[20] dated December 31, 2003, Control NR 001-04, signed by
Reynaldo L. Lizardo, under a stamped proof of delivery dated 01 0050H 04 which he
initialed, and received and initialed for the laboratory by PO1 Avelino.[21]

During all this time, the accused were all at the police station, under custody, as
they had claimed, with the assistance of counsel, their right to a preliminary
investigation and voluntarily waived their right under the provisions of Article 125 of
the Revised Penal Code.[22] Their continued custody after their arrest was shown by
Exhibit H, dated January 1, 2004, addressed to the Provincial Prosecutor and signed by
Reynaldo L. Lizardo which noted that Suspects are under arrest.[23]

On cross-examination, PSI Lizardo stated that the plastic sachets were in an

envelope when they were handed to Augustus.[24] He confirmed that it was Jehan who
handed the shabu to Augustus,[25] and explained that Violeta had been excluded from
the complaint on the recommendation of the regional state prosecutor.[26]
 PI Laya, Forensic Chemist of the PNP Crime Laboratory in Camp Florendo, La
Union, testified that on January 1, 2004, he conducted a chemical and confirmatory test
on the three heat-sealed plastic sachets submitted to him for examination. He found the
seized items positive for shabu, and reflected his findings in Chemistry Report No. D-
001-2004.[27] On cross -xamination, PI Laya stated that PO1 Avelino received the items
at the PNP Crime Laboratory; he did not know where these items came from.[28]

The defense presented a different picture of the events. The appellants testimony
was aptly summarized by the CA as follows:

SITTI, nineteen (19) years old, admitted having brought an envelope to Augustus
De Castro in their meeting place at Damortis, Dagupan City but denied knowing its
contents. She testified that on 26 December 2003, she was at home playing at the
billiard store owned by her sister when Augustus alias Guts, her former husbands friend
and whom she did not know very well, arrived to attend the fiesta of Dagupan. Augustus
slept in their house for the first time and went home the following day, 27 December
2003, to Ilocos Sur [TSN, July 12, 2004, pp. 2-5]. She saw a scotch tape-sealed long
brown mailing envelope left on the place where Augustus slept, and hid the same
without informing him about it. On 31 December 2003, Augustus, who called her up
through the cellular phone, requested her to bring to him the envelope which he left.
They were to meet at Damortis, Dagupan City. She was in the company of her sister
JEHAN and Violeta [TSN, July 12, 2004, pp. 6-7]. As they approached a van, she saw
Augustus alight therefrom. Augustus opened the door and instructed them to board the
same [TSN, July 12, 2004, pp. 8-9]. Later, Augustus asked for the envelope and
immediately after Violeta handed the same to him, he raised it up. After which, a man
came out from the back where her sister, JEHAN, was seated and shouted Freeze, do not
move. This is PDEA [TSN, July 12, 2004, pp. 10-11].[29]

Jehan narrated that she was at her home in Fernandez Street, Dagupan City on the
evening of December 31, 2003 when the appellant came and asked to be accompanied to
Damortis to deliver an envelope.[30] Jehan and Violeta (her neighbor) accompanied the
appellant to Damortis. They rode a mini-bus and immediately proceeded towards a
parked van when they arrived.[31] They all boarded the van at Augustus bidding;
Augustus asked about the envelope as soon as they were inside the van. A conflict of
claims exists on who had the envelope and who handed it to Augustus,[32] but it is not
disputed that it was the appellant who gave the instruction to hand the envelope over to
Augustus. Immediately after, PSI Lizardo appeared from the back of the van and
arrested them.[33]

On cross-examination, Jehan maintained that it was Violeta who gave the

envelope to Augustus. She likewise denied having executed a sworn statement where
she allegedly stated that she handed the envelope to Augustus.[34]

The RTC, in its decision of July 28, 2004, convicted the appellant of transporting
shabu (12 grams)[35] and sentenced her to suffer the penalty of life imprisonment and to
pay a fine in the amount of FIVE HUNDRED THOUSAND PESOS (P500,000.00).[36]

The appellant appealed to the CA,[37] which affirmed the RTC decision in toto in
its decision of February 28, 2006.[38]

The CA found no reason to depart from the doctrine that the findings of fact of the
trial court, its calibration of the testimonies of the witnesses, and its assessment of their
probative weight, as well as the conclusions based on these findings, are accorded high
respect, if not conclusive effect.

The CA ruled that the alleged failure of the apprehending officers to comply with
the requirements under R.A. No. 9165 is a matter strictly between the PDEA and the
arresting officers and is totally irrelevant to the prosecution of the criminal case.[39] The
CA reasoned out that the commission of the crime of illegal transport or delivery of a
prohibited drug is considered consummated once proof of transport or delivery is
established.

The CA further added that there appears no reason why the police officers should
not be accorded the presumption of regularity in the performance of their duty.

In her brief on appeal, the appellant contends that the trial court gravely erred in
convicting her of the crime charged despite the prosecutions failure to establish the
identity of the prohibited drugs. The appellant alleges that PSI Lizardo did not place his
initials immediately after seizure. Moreover, there is no showing that the police
inventoried the seized items in the presence of the appellant and her counsel, a
representative from the media and the Department of Justice, and any elected official.
She further adds that it was not clear who received the seized items at the police station.
[40]
 For the State, the Office of the Solicitor General (OSG) counters with the
argument that there was no showing of any irregularity in the handling of the seized
items. The OSG argues that R.A. No. 9165 allows the inventory of the confiscated drugs
to be conducted at the nearest police station. It further adds that the inventory of the
seized items was witnessed by representatives from the barangay and the media.[41]

THE COURTS RULING

After due consideration, we agree with the conclusions and the penalty
imposed by the appealed CA decision, and resolve to deny the appeal for lack of
merit.

The Prosecutions Case and the Objections

The appellant in the present case is charged with selling, trading, delivering,
giving away, dispatching in transit, and transporting dangerous drugs under Section 5,
Article II of R.A. No. 9165. This section punishes not only the sale but also the mere
act of delivering or distributing prohibited drugs.[42] In prosecutions for illegal sale
or delivery of drugs, what is material is proof that the transaction actually took place,
coupled with the presentation in court of the corpus delicti as evidence. In the present
case, we confirm the lower court findings that the prosecution clearly showed that the
delivery of the illicit drugs (shabu) actually took place; and that the authorities seized
the shabu which thereafter passed through the proper investigatory/custodial chain until
it was identified and submitted to the court as evidence.

We note that the appellant does not deny the delivery of an envelope to Augustus
at a van in a Petron station in Damortis, but alleges that she was not aware of the
contents of the envelope delivered. The prosecution, however, adduced ample evidence
of the events that led to the entrapment and the actual transaction; of how arrest of the
suspects and seizure of the shabu were made in an entrapment operation; and of the
chain of custody, i.e., how the shabu was seized, marked, delivered for examination,
examined, and subsequently brought to court. Significantly, the present appeal
questions only the identity of the shabu offered as evidence in court. The appellant
alleges breaches in this chain of custody, specifically, the failure to mark the evidence
upon arrest, the failure to identify who received the seized shabu at the police station,
and the failure to inventory the shabu in the presence of the accused and her counsel.

We find the appellants objections totally without merit.

 A notable feature of this case is the careful handling the authorities undertook in
ensuring that the rights of the accused were protected, from the moment of their
warrantless arrest after they were caught in flagrante delicto in an entrapment operation,
all the way up to the handling of the evidence at the trial level. This is evident from the
exhibits that were all properly marked and offered as evidence without any objection
from the accused.

We point out the defenses failure to contest the admissibility of the seized items as
evidence during trial as this was the initial point in objecting to illegally seized evidence.
At the trial, the seized shabu was duly marked, made the subject of examination and
cross-examination, and eventually offered as evidence, yet at no instance did the
appellant manifest or even hint that there were lapses in the safekeeping of seized items
that affected their admissibility, integrity and evidentiary value. In People v. Hernandez,
[43] we held that objection to the admissibility of evidence cannot be raised for the first
time on appeal; when a party desires the court to reject the evidence offered, he must so
state in the form of objection. Without such objection, he cannot raise the question for
the first time on appeal.

Beyond the question of admissibility are the issues of the integrity and evidentiary
value of the drugs seized. To ensure these qualities in the evidence seized, R.A. No.
9165 outlines the procedure to be followed in the custody and handling of seized
dangerous drugs under its Section 21, paragraph 1, Article II. This is implemented by
Section 21(a), Article II of the Implementing Rules and Regulations of R.A. No. 9165,
which reads:
 (a) The apprehending officer/team having initial custody and control of the drugs
shall, immediately after seizure and confiscation, physically inventory and photograph
the same in the presence of the accused or the person/s from whom such items were
confiscated and/or seized, or his/her representative or counsel, a representative from the
media and the Department of Justice (DOJ), and any elected public official who shall be
required to sign the copies of the inventory and be given a copy thereof: Provided, that
the physical inventory and photograph shall be conducted at the place where the search
warrant is served; or at the nearest police station or at the nearest office of the
apprehending officer/team, whichever is practicable, in case of warrantless seizures;
Provided, further, that non-compliance with these requirements under justifiable
grounds, as long as the integrity and the evidentiary value of the seized items are
properly preserved by the apprehending officer/team, shall not render void and
invalid such seizures of and custody over said items. [Emphasis ours.]

and stresses that the overriding concern in the rules on the chain of custody of seized and
confiscated drugs is the maintenance of their integrity and evidentiary value. In other
words, mere lapses in procedures need not invalidate a seizure if the integrity and
evidentiary value of the seized items can be shown to have been preserved.[44]

In the present case, after PSI Lizardo confirmed that the three plastic sachets
given by either Jehan or Violeta to Augustus contained shabu, he immediately locked the
vans door; introduced himself as a member of the PDEA; arrested the appellant and her
two companions; and then brought them (and the seized items) to the police station. At
the police station, he marked each plastic sachet with his initials RLL, and made the
corresponding marking sheet report. He also conducted an inventory of the seized items;
the corresponding certificate of inventory was signed by PSI Lizardo, Barangay
Kagawad Luis Ordoa, Jr., and two representatives from the media. Afterwards, he
prepared a written request for laboratory examination, and a request for the medical and
physical examination of the three accused. During all this time, the accused were all at
the police station, under custody, as they had waived their right under the provisions of
Article 125 of the Revised Penal Code. Thus, while not specifically mentioned in the
testimonies, evidence shows that the accused were all at the very same place where the
markings and inventory of the seized items took place.
 The records further clearly bear out that confiscated items were forwarded to the
PNP Crime Laboratory where they were received by PO1 Avelino. The turnover of the
confiscated item was documented through the request for laboratory examination,
Exhibit F, dated December 31, 2003, with date of receipt by PO1 Avelino on 01 0050H
04, or on January 1, 2004 at 12:50 a.m. PSI Lizardo made the delivery, as shown by his
initials on the portion of the Exhibit indicating receipt by the PNP Crime Laboratory.
[45]

PO1 Avelino, in turn, gave these items to PI Laya for examination to determine
the presence of dangerous drugs. PI Laya testified to this turnover.[46] After the
qualitative examination was conducted on the submitted specimens, PI Laya concluded
that Exhibits A-1, A-2, and A-3 tested positive for the presence of methamphetamine
hydrochloride. When the prosecution presented these marked specimens in court, PSI
Lizardo positively identified them to be the same items he seized from the appellant and
which he later marked at the police station, from where the seized items were turned
over to the laboratory for examination based on a duly prepared request. We quote the
pertinent portions of the records:

APP TADE:

Q: Earlier[,] you mentioned that you recovered three (3) plastic sachets from
the possession of the persons that was subject of the Police operation and
you likewise mentioned that you would be able to identify these items if
again shown to you. Im now showing to you three (3) plastic sachets
earlier marked for the Prosecution as EXHIBIT A, will you go over the
same and tell the Honorable Court what relation[,] if any[,] does [these]
plastic sachets have with the ones that you recovered from the accused?
 PSI LIZARDO:

A: These three (3) plastic sachets were the ones which we recovered
from the three suspects.

xxxx

Q: And why do you say that these were the very same items that were
handed to you?

A: I put markings on the three (3) plastic sachet[s].

Q: Will you please point to the Court that markings that you identifying
mark [sic] on the items that you recovered?

A: The markings are my initials[,] RLL means Reynaldo L. Lizardo.

Q: That is on one of the sachets, how about the other sachets?

A: The same markings with the RLL means Reynaldo L. Lizardo.[47]

PI Laya identified the three plastic sachets offered in evidence as the very same
items he examined at the PNP Crime Laboratory, thus:

Q: When you received that request[,] what else was turned over to you?

A: Three (3) heat-sealed sachet containing white crystalline substance.

Q: Where are these three sachets that were handed to you for examination?

A: (Witness bringing out certain items.)

APP TADE:

Witness handing over to this representation PDEA marking plastic bag

containing three plastic sachet with yellow piece of paper containing
 white crystalline substance.

Q: And upon receipt of these items and the request for laboratory
examination as an officer, what did you do next?

A: I conducted my laboratory examination.

xxxx

Q: And the three (3) tests that you conducted in this case[,] what was the
result of your examination?

A: Positive for the presence of methamphetamine hydrochloride.

Q: And do you have any document to that effect?

A: Yes, sir.
xxxx

Q: Who prepared this Laboratory Examination Report?

A: I prepared the report.

Q: Personally?

A: Yes, sir.

Q: You handed over to this representation three (3) plastic sachets containing white
crystalline substances which you claim to be the same items that were examined
by you, why do you say that these are the same items that were examined by
you?

A: I have my markings placed in the items.

Q: Again, will you point to the Court the items which you identifying
markings [sic] which you said you placed in the three plastic sachets?

A: (Witness pointing to the yellow paper attached to the plastic as

A2=D-001-04, A1=D-001-04 and the other plastic A3=D-001-04.)[48]
 Clearly apparent from all these is that the whole operation, all the way up to the
submission of the seized shabu to the laboratory for testing, were overseen and under the
immediate charge of PSI Lizardo who himself was brought to court to testify. The
prosecution thus duly established the crucial links in the chain of custody of the seized
items from the time they were confiscated until they were brought for examination. The
totality of the testimonial, documentary, and object evidence adequately supports not
only the findings that a delivery of the illicit drugs took place but accounted for an
unbroken chain of custody of the seized evidence as well.

We note in this regard that at no time during the trial did the defense question the
integrity of the evidence, by questioning either the chain of custody or the evidence of
bad faith or ill will on the part of the police and the prosecution in the handling of
evidence, or by proof that the evidence had been tampered with. Under the
circumstances, the presumption of regularity in the handling of the exhibits by the public
officers concerned and the presumption that they properly discharged their duties should
already apply.[49] As the foregoing discussion shows, the integrity of the adduced
evidence has never been tainted, so that it should retain its full evidentiary value.

An obvious flaw in the prosecutions case was the failure of the apprehending team
to photograph the seized items. Nevertheless, PSI Lizardo immediately conducted an
inventory of the items at the police station where the accused were then held in custody.
Even without considering the presence of the accused at the inventory, however, we find
it undisputed that a barangay kagawad and two representatives from the media
witnessed the inventory and signed the corresponding certificate of inventory. To our
mind, the presence of an elected official and two media representatives sufficiently
safeguarded the seized evidence from possible alteration, substitution or tampering. The
presence of these third parties (as required by law) during the inventory, as well as the
clear lack of any irregularity affecting the identity of the evidence, more than made up
for the prosecutions failure to photograph the confiscated specimens. In other words, we
hold that there has been substantial compliance by the police authorities with the
required procedure on the custody and control of the confiscated drugs even without the
required photographs.

The marking of the seized shabu at the police station rather than at the exact scene
of the warrantless arrest of the accused and the seizure of evidence, to our mind, should
be appreciated under the unique attendant circumstances of the case.

We note that the entrapment undisputably took place and the sachets of shabu
were seized inside a vehicle where all the actors the accused, the informant, and the
police were riding together. They were effectively on the road at that time and the
records do not indicate that the van went to any other place after the arrest and seizure.
Only PSI Lizardo also appeared to have handled the seized items while the van was on
its way to the police station. Thus, there appeared no possibility for the planting,
switching, and tampering of evidence during the whole travel time from the place of
seizure to the police station. In fact, the case of the defense did not even suggest these
possibilities as its defense was one of avoidance, i.e., the accused did not know that what
the delivered envelope contained was shabu.
 All these indicators tell us that the main concern of the authorities at that time was
simply to bring the accused in for investigation and appropriate proceedings. Thus, they
cannot be faulted if they opted, after the warrantless arrest, to prioritize the delivery of
the accused to their station and to undertake the required marking and inventory of the
seized items there. With the continued presence of all the accused in the vehicle while
the seized items remained unmarked, and the immediate marking and inventory of these
items upon reaching the police station, the laws feared planting, tampering, and
switching of evidence were substantially negated. The fact that the accused were all at
the police station when the marking and inventory took place immeasurably strengthens
the validity of our conclusion.

From the point of view of jurisprudence, we are not beating any new path by
holding that the failure to undertake the required photography and immediate marking of
seized items may be excused by the unique circumstances of a case. In People v.
Resurreccion,[50] we already stated that marking upon immediate confiscation does not
exclude the possibility that marking can be at the police station or office of the
apprehending team. In the cases of People v. Rusiana,[51] People v. Hernandez,[52] and
People v. Gum-Oyen,[53] the apprehending team marked the confiscated items at the
police station and not at the place of seizure. Nevertheless, we sustained the conviction
because the evidence showed that the integrity and evidentiary value of the items seized
had been preserved. To reiterate what we have held in past cases, we are not always
looking for the strict step-by-step adherence to the procedural requirements; what is
important is to ensure the preservation of the integrity and the evidentiary value of the
seized items, as these would determine the guilt or innocence of the accused. We
succinctly explained this in People v. Del Monte[54] when we held:
 We would like to add that non-compliance with Section 21 of said law,
particularly the making of the inventory and the photographing of the drugs confiscated
and/or seized, will not render the drugs inadmissible in evidence. Under Section 3 of
Rule 128 of the Rules of Court, evidence is admissible when it is relevant to the issue
and is not excluded by the law or these rules. For evidence to be inadmissible, there
should be a law or rule which forbids its reception. If there is no such law or rule, the
evidence must be admitted subject only to the evidentiary weight that will [be] accorded
it by the courts. x x x

We do not find any provision or statement in said law or in any rule that will
bring about the non-admissibility of the confiscated and/or seized drugs due to non-
compliance with Section 21 of Republic Act No. 9165. The issue therefore, if there is
non-compliance with said section, is not of admissibility, but of weight evidentiary merit
or probative value to be given the evidence. The weight to be given by the courts on said
evidence depends on the circumstances obtaining in each case.[55]

The Proper Penalties

The appellant was caught delivering a total of 12 grams of methamphetamine

hydrochloride or shabu. The illegal delivery, dispensation, distribution and
transportation of drugs are punished under Section 5, Article II of R.A. No. 9165, which
provides:

Sec. 5. x x x The penalty of life imprisonment to death and a fine ranging from
Five hundred thousand pesos (P500,000.00) to Ten million pesos (P10,000,000.00) shall
be imposed upon any person, who, unless authorized by law, shall sell, trade, administer,
dispense, deliver, give away to another, distribute, dispatch in transit or transport any
dangerous drug, including any and all species of opium poppy regardless of the quantity
and purity involved, or shall act as a broker in any of such transactions.
 Pursuant to the enactment of RA No. 9346, entitled An Act Prohibiting the
Imposition of Death Penalty in the Philippines, only life imprisonment and fine, instead
of death, shall be imposed.

Accordingly, we find the penalty imposed to be within the range provided by law
and was thus correctly imposed by the RTC and affirmed by the CA.

WHEREFORE, in light of all the foregoing, we hereby AFFIRM the February

28, 2006 Decision of the Court of Appeals in CA-G.R. CR-HC No. 00432. No cost.

SO ORDERED.

ARTURO D. BRION

Associate Justice

WE CONCUR:
 CONCHITA CARPIO MORALES

Associate Justice

Chairperson

LUCAS P. BERSAMIN

Associate Justice

MARIANO C. DEL CASTILLO

Associate Justice

ROBERTO A. ABAD

Associate Justice
 ATTESTATION

I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts
Division.

CONCHITA CARPIO MORALES

Associate Justice

Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons
Attestation, it is hereby certified that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the writer of the opinion of the
Courts Division.
 RENATO C. CORONA

Chief Justice

THIRD DIVISION

PEOPLE OF THE PHILIPPINES,

Plaintiff-Appellee,

- versus -

RASHAMIA HERNANDEZ y SANTOS and GRACE KATIPUNAN y CRUZ,

Accused-Appellants. G.R. No. 184804

Present:

YNARES-SANTIAGO, J.,

Chairperson,

CHICO-NAZARIO,

VELASCO, JR.,

NACHURA, and

PERALTA, JJ.

Promulgated:

June 18, 2009x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

-x

DECISION

CHICO-NAZARIO, J.:
 For review is the Decision[1] of the Court of Appeals in CA-G.R. CR-H.C. No.
02465, dated 26 May 2008, affirming in toto the Decision,[2] dated 14 August 2006, of
the Manila Regional Trial Court (RTC), Branch 2, in Criminal Case No. 04-222804,
finding accused-appellants Rashamia Hernandez y Santos and Grace Katipunan y Cruz
guilty of illegal sale of shabu under Section 5, Article II of Republic Act No. 9165,
otherwise known as the Comprehensive Dangerous Drugs Act of 2002, and imposing
upon them the penalty of life imprisonment.

The records of the case bear the following facts:

On 19 January 2004, an Information[3] was filed before the RTC against

appellants for illegal sale of shabu under Section 5, Article II of Republic Act No. 9165.
The accusatory portion of the information reads:

The undersigned accuses RASHAMIA HERNANDEZ y SANTOS and GRACE

KATIPUNAN y CRUZ of Violation of SEC. 5 Article II [of] Republic Act [No.] 9165,
committed as follows:

That on or about January 14, 2004, in the City of Manila, Philippines, the said
accused, conspiring and confederating together and mutually helping each other, not
being authorized by law to sell, trade, deliver, or give away any dangerous drug, did
then and there willfully, unlawfully and knowingly sell or offer for sale One (1) heat
sealed transparent plastic sachet containing ZERO POINT ZERO FOUR SEVEN
(0.047) gram of white crystalline substance known as SHABU containing
methylamphetamine hydrochloride, which is a dangerous drug.

When arraigned on 13 February 2004, appellants, assisted by counsel de oficio,

pleaded Not Guilty to the charge. Trial on the merits thereafter ensued.
 The prosecution presented as witnesses Police Officer 2 Gloybell Dimacali (PO2
Dimacali) and Police Officer 2 Joenardine Carandang (PO2 Carandang), both of whom
are members of the Philippine National Police (PNP) and assigned at the Station Anti-
Illegal Drugs Unit of Central Market, Sta. Cruz Manila Police Station 3. Their
testimonies, taken together, produced the following narrative:

On 14 January 2004, at around 6:00 p.m., an informant went to the Station Anti-
Illegal Drugs (SAID) Unit of Central Market, Sta. Cruz Manila Police Station 3 (police
station) and reported to Police Chief Inspector Jimmy A. Tiu (Inspector Tiu), head of
SAID, and PO2 Dimacali, the drug trafficking activities of a certain Larry and appellants
in Callejon Flores, Solis Street, Tondo, Manila. Inspector Tiu formed a team and planned
a buy-bust operation. The team agreed that PO2 Dimacali would act as the poseur-buyer,
while PO2 Carandang, a certain PO2 Leonard Cipriano, PO2 Napoleon Osias and PO2
Marvin Flores would act as back-up during the buy-bust operation. Inspector Tiu gave
PO2 Dimacali two one-hundred peso bills to be utilized as buy-bust money. PO2
Dimacali marked the monies with SAID.[4]

At about 8:00 p.m., the team, together with the informant, went to the house of
Larry at Callejon Flores, Solis Street, Tondo, Manila. Upon arriving thereat, PO2
Dimacali and the informant proceeded inside Larrys house while the rest of the team
positioned themselves outside the house. PO2 Dimacali and the informant approached
appellants who were then inside the house. PO2 Dimacali told appellant Katipunan that
he would buy two hundred pesos worth of shabu. Appellant Katipunan told appellant
Hernandez, Akin na ang natitira mong isa. Appellant Hernandez brought out from her
pocket one transparent plastic sachet containing shabu and handed it to appellant
Katipunan. The latter then gave the plastic sachet to PO2 Dimacali. PO2 Dimacali
handed the buy-bust money to appellant Katipunan who, in turn, gave it to appellant
Hernandez. At this juncture, PO2 Dimacali removed his bull cap as a pre-arranged signal
to his back-up team. PO2 Dimacali introduced himself as a police officer and held the
hands of appellant Katipunan. Appellant Hernandez ran away but the back-up team
chased and caught her, and recovered from her the buy-bust money.[5]

Appellants, as well as the transparent plastic sachet of shabu and the buy-bust
money recovered from them, were immediately brought to the police station. Thereupon,
the plastic sachet of shabu recovered from appellants was marked by PO2 Dimacali with
GKC (initials for Grace Katipunan Cruz, the full name of appellant Katipunan) and
submitted it, together with the buy-bust money, to Inspector Tiu. The plastic sachet of
shabu recovered from appellants was forwarded to the PNP Crime Laboratory of the
Western Police District, U.N. Avenue, Ermita, Manila, for laboratory examination. PNP
Forensic Chemist Judycel A. Macapagal found the contents thereof to be positive for
methylamphetamine hydrochloride or shabu. Upon being weighed, the plastic sachet
contained 0.047 gram of shabu.[6]

The prosecution also adduced documentary and object evidence to buttress the
testimonies of its witnesses, to wit: (1) letter-request for laboratory examination (Exhibit
A);[7] (2) one transparent plastic sachet of shabu (Exhibit B);[8] (3) chemistry report of
PNP Forensic Chemist Macapagal (Exhibit C);[9] (4) buy-bust money (Exhibit D);[10]
(5) affidavit of apprehension executed by PO2 Dimacali, PO2 Carandang and PO2
Cipriano (Exhibit E);[11] and (6) pre-operation/coordination sheet (Exhibit F).[12]

For its part, the defense proffered the testimonies of appellants and their
corroborating witnesses namely, Maria Victoria Hernandez (Victoria) and Marileth
Jacob (Marileth) to refute the foregoing accusations. Appellants denied any liability and
claimed that they were framed.

Appellant Hernandez testified that she visited appellant Katipunan at the latters
house in Tondo, Manila, on the afternoon of 14 January 2004. Later that day, she fell
asleep inside the said house. At around 8:00 p.m., she was awakened by a commotion
inside the same house. She stood up and saw male persons inside the house arresting
appellant Katipunan. She was also apprehended. When she asked the reason for their
arrest, one of the male persons retorted, Huwag na lang kayong magmatapang, sumama
na lang kayo. The males introduced themselves as policemen. Subsequently, she,
appellant Katipunan, and a certain Reynaldo Soriano (Soriano) -- appellant Katipunans
alleged uncle who was with them inside the house during the arrest -- were brought to
the police station. Soriano was beaten up by the policemen in the said station, but was
released two days after the arrest.[13]

Appellant Katipunan declared she was in her house at 1022 Callejon Flores, Solis
Street, Tondo Manila on 14 January 2004. At about 5:00 p.m., appellant Hernandez
arrived at her house. At about 8:00 p.m., while watching television inside her house with
Soriano, she saw four males destroying the window of her house. These persons entered
through the window, ransacked the house, and told her that they were looking for Larry.
Thereafter, she, appellant Hernandez and Soriano were arrested and forcibly brought to
the police station. Soriano was subsequently released from detention, because he gave
money and a television set to the police officers. The policemen demanded from her
P50,000.00 in exchange for her freedom, but she refused to accede.[14]

Victoria, mother of appellant Hernandez, narrated that she lived in the same house
with appellant Hernandez at 2109 Pista Street, Sta. Cruz, Manila; that on 14 January
2004, at about 4:00 p.m., she arrived home but could not find appellant Hernandez; that
she looked for appellant Hernandez in her relatives house and in the nightclub where the
latter worked as Guest Relations Officer, but to no avail; that on the following day, she
was informed by a friend that appellant Hernandez was arrested; that she went to the
police station and found appellant Hernandez therein; and that appellant Hernandez was
not a drug pusher.[15]

Marileth, friend and neighbor of appellant Katipunan, stated that four males
entered appellant Katipunans house during the incident by destroying its window. She
reported the incident to the police, but this was not blottered.[16]

After trial, the RTC rendered a Decision finding appellants guilty of violating
Section 5, Article II of Republic Act No. 9165 and imposing upon them the penalty of
life imprisonment. They were also ordered to pay a fine of P500,000.00. The dispositive
portion of the RTC Decision reads:
 WHEREFORE, from the foregoing, judgment is hereby rendered, finding both
accused, Rashamia Hernandez y Santos and Grace Katipunan y Cruz, GUILTY beyond
reasonable doubt for violation of Sec. 5 Article II of Republic Act [No.] 9165, they are
hereby sentenced each to life imprisonment and to pay a fine of P500,000.00 without
subsidiary imprisonment in case of insolvency and to pay costs.

The specimen is forfeited in favor of the government and the Branch Clerk of
Court, accompanied by the Branch Sheriff, is directed to turn over with dispatch and
upon proper receipt the said specimen to the Philippine Drug Enforcement Agency
(PDEA) for proper disposal in accordance with the law and rules.[17]

Aggrieved, appellants appealed to the Court of Appeals. On 26 May 2008, the

Court of Appeals promulgated its Decision affirming in toto the RTC Decision, thus:

WHEREFORE, in the light of the foregoing, the appeal is DISMISSED for

lack of merit. The assailed decision of the court a quo is AFFIRMED.[18]

Appellants filed a Notice of Appeal on 11 June 2008.[19]

In their Brief,[20] appellants assigned the following errors:

I.
THE TRIAL COURT GRAVELY ERRED IN CONVICTING THE ACCUSED-
APPELLANTS OF THE CRIME CHARGED DESPITE THE PROSECUTIONS
FAILURE TO ESTABLISH THE IDENTITY OF THE PROHIBITED DRUG
CONSTITUTING THE CORPUS DELICTI OF THE OFFENSE.
II.

THE TRIAL COURT GRAVELY ERRED IN CONVICTING THE ACCUSED-

APPELLANTS OF THE CRIME CHARGED DESPITE THE PROSECUTIONS
FAILURE TO PROVE THEIR GUILT BEYOND REASONABLE DOUBT.
 To secure a conviction for illegal sale of shabu, the following essential elements
must be established: (1) the identity of the buyer and the seller, the object of the sale and
the consideration; and (2) the delivery of the thing sold and the payment thereof. In
prosecutions for illegal sale of shabu, what is material is the proof that the transaction or
sale actually took place, coupled with the presentation in court of the corpus delicti as
evidence. In the case at bar, the prosecution was able to establish through testimonial,
documentary and object evidence the said elements.[21]

PO2 Dimacali, the poseur-buyer, testified that appellants sold to him shabu during
a legitimate buy-bust operation. His positive identification of appellants and direct
account of the transaction are clear, thus:

Asst. Pros. Yap:

Police Officer Dimacali, what was your participation in this police operation
against Rashamia Hernandez and Grace Katipunan?

Witness: I was the poseur-buyer in this operation, sir.

Q Now, when was (sic) this operation took (sic) place?

A On January 14, 2004 at 8:00 p.m., sir.

Q Where?

A Along Callejon Flores, Solis Street, Tondo, Manila.

Q Now, who was the target person of this operation?

A A certain Larry, Mia and Grace, sir.

Q Who furnished you of these particular names, these target persons?

A Our CI, sir.

Q When?

A Personally appeared in our office on January 14.

Q What time?

A At about 6:00 p.m., sir.

Q Aside from these names, what other details submitted by this informant?

A The informant gave information attended by our Chief, SAID regarding the
illegal drug activities of certain Larry, Grace and Mia.

Q So, what was the response of this Police Commander?

A Major Tiu formed a team composed of PO1 Cipriano, PO1 Carandang, myself
and I was given a specific assignment.

Q What was the assignment of these Cipriano and Carandang?

A Back up and arresting officers, sir.

Q What happened after the team was formed?

A We were briefed and we were tasked by Major Tiu, sir.

Q What were the tasks?

A Back up operatives and I was tasked as poseur-buyer, sir.

Q What happened next, Mr. Witness?

A We were given P200.00 by Major Tiu, sir.

Q When was that?

A Past 6:00 of January 14, sir.

Q What was that P200.00 bill for?

A For our buy bust operation, sir.

Q How were you able to identify that that is the same money bill used?

A I put marking on the buy-bust money describing the name of our office and
have it xeroxed, sir.

Q In relation to that bill, what portion of the bill it was marked?

A Below the seal of the money, sir.

Q Now, you mentioned about a photocopy of the bill. Can you recognize
that bill?

A Yes, sir.

Q Who made that machine copy?

A I, sir.

Q When?

A After the briefing made by Major Tiu, sir.

Q Where is the genuine money bill now?

A In my possession, sir.

Q Can you produce that, Mr. Witness?

A Yes, sir.

Q Tell us, why this evidence in your possession?

A I was subpoenaed so I got the records in our office.

Asst. Pros. Yap:

Your Honor, I ask counsel to stipulate the xerox copy with the genuine
money if the same faithful reproduction.

Atty. Caing:

Admitted, your Honor.

Asst. Pros. Yap:

Show to us the marking of these two bills?

Witness:

Here, sir, below the seal Central Bank of the money.

Asst. Pros. Yap:

We ask to be marked as Exhibit E, faithful reproduction, and Exhibit E-1.

COURT:
 Mark them.

Asst. Pros. Yap:

So, what happened next after receipt of the money?

Witness:

We waited till night and then we proceeded to the target area with the
confidential informant.

Q How far is that from your station?

A It takes about 25 to 30 minutes, sir.

Q What means of transportation did you take?

A Revo car of Cipriano, sir.

Q So, upon reaching thereat, what exactly did you do?

A The confidential informant and I walked towards the house of a certain Larry.

Q What part? Describe to us the house of a certain Larry?

A It is made of wood and there is a (sic) stairs and composed of two small
rooms, sir.

Q What happened when you arrived in that place?

A We approached a pregnant woman Grace and told her that we will buy shabu.

Q Now, who identified this pregnant woman by the name of Grace?

A The confidential informant told me that the person can be easily identified
because she is pregnant and her name is Grace.

Q Where was the informant at that time?

A He was with me, sir.

Q What exactly did you do or say to her?

A Grace, kukuha ako ng halagang dalawang piso.

Q So, what was the response of Grace?

A Without replying, she told to a woman there by the name Mia that Akin na ang
natitira mong isa.

Q Who uttered that words?

A Grace, sir.

Q It was directed to whom?

A To Mia, sir.

Q Where was Mia at that time?

A She was halfway of the stairs, sir.

Q What happened when she said that to Mia?

A Mia brought out a sachet and handed it to Grace and Grace handed it to me, sir.

Q What was that given to Grace by Mia?

A A small transparent plastic sachet, sir.

Q What happened thereafter when Grace received the same?

A I gave a pre-arranged signal by removing my bull cap, sir.

xxxx

Q How about the P200.00 bills? What happened to it?

A Cipriano recovered the money from Mia, sir.

Q Prior to your raising of bull cap, what happened to the P200.00 bill?

A It was recovered by PO2 Cipriano.

Q When?

A After the transaction, sir.

Q So, what did you do after that?

A I introduced myself as police officer. When Mia heard the word pulis, they
ran away and my co-police officers chased them.

Q How about you? What did you do?

A I already held Grace, sir.

Q How about Rashamia? What happened to her?

A Rashamia was arrested by Cipriano, sir.

Q So, what was recovered from Rashamia?

A The buy-bust money, sir.

Q How about Grace? What was recovered from her?

A None, sir, because the item that I bought from her was already in my
possession.

Q Now, you mentioned about Grace. Can you identify her if she is in the
Courtroom now?

A Yes, sir.

Q Please do so ?

A Yes, sir.

Clerk of Court:

Witness stepped down from the witness stand and approached to a woman inside
the Courtroom and tapped her shoulder, when asked and answered the name of Grace
Katipunan.

Asst. Pros. Yap:

How about Rashamia Hernandez?

Witness:

This one, sir. (also tapped her shoulder, when asked and gave her name
Rashamia Hernandez, one of the accused in this case)

Q Now, where did you bring these two persons?

A We brought them to our station, sir.

Q How about the plastic sachet?

A The same, sir.

Q Where did you submit the same?

A In the office of Major Tiu, sir.

 Q How about the buy-bust money?

A The same, sir.

Q Please tell us if you can recognize this transparent plastic sachet submitted to
Major Tiu?

A Yes, sir.

Q What is your basis in telling us today?

A I put the marking the initial of Grace Katipunan, sir.

Q What is the initial?

A GKC, sir.

Q What is the meaning of that GKC?

A Grace Katipunan Cruz.

Q When did you put this marking?

A In our office, sir.

Q When?

A When we brought them to our station, sir.

Q After this marking, what happened to this plastic sachet?

A We made a request for laboratory examination, sir.

Q To your knowledge, what was the result?

A Gave positive result, sir.[22]

PO2 Carandang corroborated the aforesaid testimony of PO2 Dimacali on

relevant points.[23]
 The foregoing testimonies are consistent with the documentary and object
evidence submitted by the prosecution. The RTC and the Court of Appeals found the
testimonies of PO2 Dimacali and PO2 Carandang to be credible. Both courts also found
no ill motive on their part to testify against appellants.

The prosecution adduced as its documentary and object evidence the transparent
plastic sachet of shabu sold by appellants to PO2 Dimacali during the buy-bust
operation,[24] the chemistry report of PNP Forensic Chemist Macapagal confirming that
the plastic sachet sold by appellants to PO2 Dimacali contained 0.047 gram of shabu,
[25] and the marked money used during the buy-bust operation.[26]

Conspiracy may be deduced from the mode, method, and manner in which the
offense was perpetrated, or inferred from the acts of the accused themselves when such
acts point to a joint purpose and design, concerted action, and community of interests.
[27] It is clear from the testimony of PO2 Dimacali that appellants were of one mind in
selling shabu to him as shown by their series of overt acts during the transaction, to wit:
(1) when PO2 Dimacali told appellant Katipunan that he would buy two hundred pesos
worth of shabu, appellant Katipunan told appellant Hernandez to give her (appellant
Katipunan) one sachet of shabu; (2) appellant Hernandez immediately brought out from
her pocket one plastic sachet containing shabu and handed it to appellant Katipunan; (3)
after receiving the plastic sachet of shabu from appellant Katipunan, PO2 Dimacali
handed the buy-bust money to the former who, in turn, gave it to appellant Hernandez;
(4) When PO2 Dimacali introduced himself as a police officer and announced the arrest,
appellants tried to escape; and (5) the buy-bust money was recovered from the
possession of appellant Hernandez.[28] No other logical conclusion would follow from
the appellants concerted action except that they had a common purpose and community
of interest. Conspiracy having been established, appellants are liable as co-principals
regardless of their participation.[29]

The rule is that the findings of the trial court on the credibility of witnesses are
entitled to great respect, because trial courts have the advantage of observing the
demeanor of the witnesses as they testify. This is more true if such findings were
affirmed by the appellate court. When the trial courts findings have been affirmed by
the appellate court, said findings are generally binding upon this Court.[30]

To rebut the overwhelming evidence for the prosecution, appellants interposed the
defense of denial and frame-up. Appellants denied they sold shabu to PO2 Dimacali
during the buy-bust operation and claimed that the arresting officers tried to extort
money from them in exchange for their freedom.

The defense of denial and frame-up has been invariably viewed by this Court with
disfavor, for it can easily be concocted and is a common and standard defense ploy in
prosecutions for violation of the Dangerous Drugs Act.[31] In order to prosper, the
defense of denial and frame-up must be proved with strong and convincing evidence.
[32] In the case before us, appellants miserably failed to present any evidence in support
of their claims. Aside from their self-serving assertions, no plausible proof was
presented to bolster their allegations.
 Appellants admitted that they did not know PO2 Dimacali, PO2 Carandang and
the rest of the back-up team prior to their arrest and could not state any reason why they
were arrested and charged with selling shabu, hence negating any improper motive on
the part of the arresting officers.[33] When the police officers involved in the buy-bust
operation have no ill motive to testify against the accused, the courts shall uphold the
presumption that they have performed their duties regularly.[34] Further, appellants have
not filed a single complaint for frame-up or extortion against the arresting officers. This
inaction clearly betrays appellants claim of frame-up.

It is true that Victoria and Marileth testified in behalf of appellants. However, their
testimonies refer only to peripheral matters and not to the actual buy-bust transaction
itself. They were not present in the crime scene during the transaction. In short, they
have no personal knowledge of what actually transpired during the actual buy-bust
operation. Their testimonies, therefore, deserve scant consideration.

Given the foregoing circumstances, the positive and credible testimonies of the
prosecution witnesses prevail over the defense of denial and frame-up of appellants.

Appellants, nonetheless, averred that the buy-bust team did not comply with the
procedure in the custody of seized/confiscated dangerous drugs as provided under
Section 21, Article II of Republic Act No. 9165, viz:

ARTICLE II
 UNLAWFUL ACTS AND PENALTIES

xxxx

SEC. 21. Custody and Disposition of Confiscated, Seized, and/or Surrendered

Dangerous Drugs, Plant Sources of Dangerous Drugs, Controlled Precursors and
Essential Chemicals, Instruments/Paraphernalia and/or Laboratory Equipment.

xxxx

(1) The apprehending team having initial custody of all dangerous drugs shall,
immediately after seizure and confiscation, physically inventory and photograph the
same in the presence of the accused or the person/s from whom such items were
confiscated and/or seized, or his/her representative or counsel, a representative from the
media and the Department of Justice (DOJ), and any elected public official who shall be
required to sign the copies of the inventory and be given a copy thereof;

Appellants also contended that the prosecution failed to establish the identity of
the prohibited drug allegedly seized from them based on the following reasons: (1) PO2
Dimacali, PO2 Carandang and the rest of the back-up team did not write their initials on
the one transparent plastic sachet allegedly containing shabu immediately after
recovering the same from appellants; (2) no inventory or identifying mark was made at
the crime scene; (3) the confiscated drug was belatedly marked by PO2 Dimacali at the
police station; and (4) Inspector Tiu was not presented as a witness to corroborate PO2
Dimacalis testimony that the latter turned over to the former the seized transparent
plastic sachet of shabu after appellants arrest. Thus, there is doubt on whether the
specimen examined by PNP Forensic Chemist Macapagal and eventually submitted to
the RTC was the same specimen recovered from appellants. Moreover, the alleged buy-
bust operation and buy-bust money was not recorded in the police blotter.[35]

It should be noted that appellants tried to raise the buy-bust teams alleged non-
compliance with Section 21, Article II of Republic Act No. 9165 for the first time on
appeal. This, they cannot do. It is too late in the day for them to do so. In People v. Sta.
Maria,[36] in which the very same issue was raised, we held:

The law excuses non-compliance under justifiable grounds. However, whatever

justifiable grounds may excuse the police officers involved in the buy-bust operation in
this case from complying with Section 21 will remain unknown, because appellant did
not question during trial the safekeeping of the items seized from him. Indeed, the police
officers alleged violations of Sections 21 and 86 of Republic Act No. 9165 were not
raised before the trial court but were instead raised for the first time on appeal. In
no instance did appellant least intimate at the trial court that there were lapses in
the safekeeping of seized items that affected their integrity and evidentiary value.
Objection to evidence cannot be raised for the first time on appeal; when a party
desires the court to reject the evidence offered, he must so state in the form of
objection. Without such objection, he cannot raise the question for the first time on
appeal. (Emphases supplied.)

Moreover, we have held in several cases[37] that non-compliance with Section 21,
Article II of Republic Act No. 9165 is not fatal and will not render an accuseds arrest
illegal or the items seized/confiscated from him inadmissible. What is of utmost
importance is the preservation of the integrity and the evidentiary value of the seized
items, as the same would be utilized in the determination of the guilt or innocence of the
accused.[38] In the case at bar, the integrity of the drug seized from appellants was
preserved. The chain of custody of the drug subject matter of the instant case was shown
not to have been broken.

Records disclosed that after PO2 Dimacali confiscated the one transparent plastic
sachet containing shabu from appellants, he immediately brought the same to the police
station where he marked it GKC and turned it over to Inspector Tiu.[39] The latter then
forwarded the said plastic sachet of shabu marked GKC to the PNP Crime Laboratory of
the Western Police District, U.N. Avenue, Ermita, Manila, for laboratory examination.
[40] After a qualitative examination conducted on the contents of the plastic sachet
marked GKC, PNP Forensic Chemist Macapagal found it to be positive for
methylamphetamine hydrochloride or shabu.[41] Upon being weighed, the plastic sachet
was determined to be containing 0.047 gram of shabu.[42]

When the prosecution presented the plastic sachet of shabu marked GKC, PO2
Dimacali positively identified it as the one he bought from appellants in the buy-bust
operation.[43] The plastic sachet containing 0.047 gram of shabu had the marking GKC
as attested by PNP Forensic Chemist Macapagal in her chemistry report.[44] The
existence, due execution, and genuineness of the said chemistry report, as well as the
qualifications of PNP Forensic Chemist Macapagal as an expert witness, were admitted
by the defense.[45] Further, PO2 Dimacali categorically declared during the trial that he
put the GKC marking on the one transparent plastic sachet of shabu recovered from
appellants.[46] Clearly, the identity of the drug recovered from appellants has been duly
preserved and established by the prosecution. Hence, there is no doubt that the plastic
sachet marked GKC submitted for laboratory examination and later on found to be
positive for shabu was the same one sold by appellants to PO2 Dimacali during the buy-
bust operation.

Besides, the integrity of the evidence is presumed to be preserved unless there is a

showing of bad faith, ill will, or proof that the evidence has been tampered with.
Appellants in this case bear the burden of showing that the evidence was tampered or
meddled with to overcome a presumption that there was regularity in the handling of
exhibits by public officers, and that the latter properly discharged their duties.[47]
Appellants failed to produce convincing proof that the evidence submitted by the
prosecution had been tampered with.

The fact that Inspector Tiu was not presented as a witness to corroborate PO2
Dimacalis testimony does not warrant appellants acquittal of the crime charged. Not all
people who came into contact with the seized drugs are required to testify in court.
There is nothing in Republic Act No. 9165 or in any rule implementing the same that
imposes such a requirement. As long as the chain of custody of the seized drug was
clearly established to have not been broken and the prosecution did not fail to identify
properly the drugs seized, it is not indispensable that each and every person who came
into possession of the drugs should take the witness stand. In People v. Zeng Hua Dian,
[48] we ruled:

After a thorough review of the records of this case we find that the chain of
custody of the seized substance was not broken and that the prosecution did not fail to
identify properly the drugs seized in this case. The non-presentation as witnesses of
other persons such as SPO1 Grafia, the evidence custodian, and PO3 Alamia, the officer
on duty, is not a crucial point against the prosecution. The matter of presentation of
witnesses by the prosecution is not for the court to decide. The prosecution has the
discretion as to how to present its case and it has the right to choose whom it wishes to
present as witnesses.

Appellants assertion that the testimonies of the prosecution witnesses were

fabricated because the alleged buy-bust operation and buy-bust money were not
recorded in the police blotter is unmeritorious. The buy-bust operation conducted on
appellants was duly recorded in the police blotter, as shown in the Pre-
Operation/Coordination Sheet made and signed by Inspector Tiu.[49] With regard to the
non-recording of the buy-bust money in the police blotter, suffice it to state that neither
law nor jurisprudence requires that the buy-bust money be entered in the police blotter.
[50] At any rate, the non-recording of the buy-bust operation and buy-bust money in the
police blotter is not essential, since they are not elements in the illegal sale of dangerous
drugs. As earlier discussed, the only elements necessary to consummate the crime is
proof that the illicit transaction took place, coupled with the presentation in court of the
dangerous drug seized as evidence. Both were satisfactorily proved in the present case.

Since appellants violation of Section 5, Article II of Republic Act No. 9165 was
duly established by the prosecutions evidence, we shall now ascertain the penalties
imposable on them.

Under Section 5, Article II of Republic Act No. 9165, the unauthorized sale of
shabu, regardless of its quantity and purity, carries with it the penalty of life
imprisonment to death and a fine ranging from Five Hundred Thousand Pesos
(P500,000.00) to Ten Million Pesos (P10,000,000.00).

Pursuant, however, to the enactment of Republic Act No. 9346 entitled, An Act
Prohibiting the Imposition of Death Penalty in the Philippines, only life imprisonment
and fine shall be imposed. Thus, the RTC and the Court of Appeals were correct in
imposing the penalty of life imprisonment and fine of P500,000.00 on each of the
appellants.

WHEREFORE, after due deliberation, the Decision of the Court of Appeals in

CA-G.R. CR-H.C. No. 02465, dated 26 May 2008, is hereby AFFIRMED in toto.
 SO ORDERED.

MINITA V. CHICO-NAZARIO

Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO

Associate Justice

Chairperson

PRESBITERO J. VELASCO, JR.

Associate JusticeANTONIO EDUARDO B. NACHURA
Associate Justice
 DIOSDADO M. PERALTA
Associate Justice

ATTE S TATI O N

I attest that the conclusions in the above Decision were reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

CONSUELO YNARES-SANTIAGO

Associate Justice

Chairperson, Third Division

C E RT I FI CAT I O N

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

Chairmans Attestation, it is hereby certified that the conclusions in the above Decision
were reached in consultation before the case was assigned to the writer of the opinion of
the Courts Division.

REYNATO S. PUNO
Chief Justice

FIRST DIVISION

[G.R. No. 135644. September 17, 2001]

GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner, vs. SPOUSES GONZALO and

MATILDE LABUNG-DEANG, respondents.

DECISION

PARDO, J.:

The petitioner in the case is the Government Service Insurance System (hereafter, GSIS). Having lost
the case in the trial court and the Court of Appeals, it now comes to this Court for redress.

At the onset, we state that the issue is not suability or whether GSIS may be sued despite the doctrine
of state immunity from suit, but liability, whether or not GSIS may be liable to pay damages to
respondent spouses given the applicable law and the circumstances of the case.[1]

The Case
The case is a petition[2] for review on certiorari of the decision of the Court of Appeals[3] affirming
the decision of the Regional Trial Court, Angeles City[4] ordering GSIS to pay respondents Gonzalo
(now deceased)[5] and Matilde Labung-Deang (hereafter, spouses Deang) temperate damages,
attorneys fees, legal interests and costs of suit for the loss of their title to real property mortgaged to the
GSIS.

The Facts

Sometime in December 1969, the spouses Deang obtained a housing loan from the GSIS in the amount
of eight thousand five hundred pesos (P8,500.00). Under the agreement, the loan was to mature on
December 23, 1979. The loan was secured by a real estate mortgage constituted over the spouses
property covered by Transfer Certificate of Title No. 14926-R issued by the Register of Deeds of
Pampanga.[6] As required by the mortgage deed, the spouses Daeng deposited the owners duplicate
copy of the title with the GSIS.[7]

On January 19, 1979, eleven (11) months before the maturity of the loan, the spouses Deang settled
their debt with the GSIS[8] and requested for the release of the owners duplicate copy of the title since
they intended to secure a loan from a private lender and use the land covered by it as collateral security
for the loan of fifty thousand pesos (P50,000.00)[9] which they applied for with one Milagros Runes.
[10] They would use the proceeds of the loan applied for the renovation of the spouses residential
house and for business.[11]

However, personnel of the GSIS were not able to release the owners duplicate of the title as it could not
be found despite diligent search.[12] As stated earlier, the spouses as mortgagors deposited the owners
duplicate copy of the title with the GSIS located at its office in San Fernando, Pampanga.[13]

Satisfied that the owners duplicate copy of the title was really lost, in 1979, GSIS commenced the
reconstitution proceedings with the Court of First Instance of Pampanga for the issuance of a new
owners copy of the same.[14]

On June 22, 1979, GSIS issued a certificate of release of mortgage.[15]

On June 26, 1979, after the completion of judicial proceedings, GSIS finally secured and released the
reconstituted copy of the owners duplicate of Transfer Certificate of Title No. 14926-R to the spouses
Deang.[16]

On July 6, 1979, the spouses Deang filed with the Court of First Instance, Angeles City a complaint
against GSIS for damages, claiming that as result of the delay in releasing the duplicate copy of the
owners title, they were unable to secure a loan from Milagros Runes, the proceeds of which could have
been used in defraying the estimated cost of the renovation of their residential house and which could
have been invested in some profitable business undertaking.[17]

In its defense, GSIS explained that the owners duplicate copy of the title was released within a
reasonable time since it had to conduct standard pre-audit and post-audit procedures to verify if the
spouses Deangs account had been fully settled.[18]

On July 31, 1995, the trial court rendered a decision ruling for the spouses Deang. The trial court
reasoned that the loss of the owners duplicate copy of the title in the possession of GSIS as security for
the mortgage... without justifiable cause constitutes negligence on the part of the employee of GSIS
who lost it, making GSIS liable for damages.[19] We quote the dispositive portion of the decision:[20]

IN VIEW OF THE FOREGOING, the Court renders judgment ordering the GSIS:

a) To pay the plaintiffs-spouses the amount of P20,000.00 as temperate damages;

b) To pay plaintiffs-spouses the amount of P15,000.00 as attorneys fees;

c) To pay legal interest on the award in paragraphs a) and b) from the filing of the complaint; and,

d) To pay cost of the suit.

SO ORDERED.

On August 30, 1995, GSIS appealed the decision to the Court of Appeals.[21]

On September 21, 1998, the Court of Appeals promulgated a decision affirming the appealed judgment,
ruling: First, since government owned and controlled corporations (hereafter, GOCCs) whose charters
provide that they can sue and be sued have a legal personality separate and distinct from the
government, GSIS is not covered by Article 2180[22] of the Civil Code, and it is liable for damages
caused by their employees acting within the scope of their assigned tasks. Second, the GSIS is liable to
pay a reasonable amount of damages and attorneys fees, which the appellate court will not disturb. We
quote the dispositive portion:[23]

WHEREFORE, finding no reversible error in the appealed judgment, the same is hereby AFFIRMED.

SO ORDERED.

Hence, this appeal.[24]

The Issue

Whether the GSIS, as a GOCC primarily performing governmental functions, is liable for a negligent
act of its employee acting within the scope of his assigned tasks.[25]

The Courts Ruling

We rule that the GSIS is liable for damages. We deny the petition for lack of merit.

GSIS, citing the sixth paragraph of Article 2180 of the Civil Code argues that as a GOCC, it falls
within the term State and cannot be held vicariously liable for negligence committed by its employee
acting within his functions.[26]

Article 2180. The obligation imposed by Article 2176 is demandable not only for ones own acts or
omissions, but also for those of persons for whom one is responsible.
xxx

Employers shall be liable for the damages caused by their employees and household helpers acting
within the scope of their assigned tasks, even though the former are not engaged in any business of
industry.

The State is responsible in like manner when it acts though a special agent, but not when the damage
has been caused by the official to whom the task was done properly pertains, in which case what is
provided in Article 2176 shall be applicable.

xxx (underscoring ours)

The argument is untenable. The cited provision of the Civil Code is not applicable to the case at bar.
However, the trial court and the Court of Appeals erred in citing it as the applicable law. Nonetheless,
the conclusion is the same. As heretofore stated, we find that GSIS is liable for damages.

The trial court and the Court of Appeals treated the obligation of GSIS as one springing from quasi-
delict.[27] We do not agree. Article 2176 of the Civil Code defines quasi-delict as follows:

Whoever by act or omission causes damages to another, there being fault or negligence, is obliged to
pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation
between the parties, is called a quasi-delict and is governed by the provisions of this Chapter
(underscoring ours).

Under the facts, there was a pre-existing contract between the parties. GSIS and the spouses Deang had
a loan agreement secured by a real estate mortgage. The duty to return the owners duplicate copy of
title arose as soon as the mortgage was released.[28] GSIS insists that it was under no obligation to
return the owners duplicate copy of the title immediately. This insistence is not warranted. Negligence
is obvious as the owners duplicate copy could not be returned to the owners. Thus, the more applicable
provisions of the Civil Code are:

Article 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or
delay and those who in any manner contravene the tenor thereof are liable for damages.

Article 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good
faith is liable shall be those that are the natural and probable consequences of the breach of the
obligation, and which the parties have foreseen or could have reasonably foreseen at the time the
obligation was constituted xxx.

Since good faith is presumed and bad faith is a matter of fact which should be proved,[29] we shall
treat GSIS as a party who defaulted in its obligation to return the owners duplicate copy of the title. As
an obligor in good faith, GSIS is liable for all the natural and probable consequences of the breach of
the obligation. The inability of the spouses Deang to secure another loan and the damages they suffered
thereby has its roots in the failure of the GSIS to return the owners duplicate copy of the title.

We come now to the amount of damages. In a breach of contract, moral damages are not awarded if the
defendant is not shown to have acted fraudulently or with malice or bad faith.[30] The fact that the
complainant suffered economic hardship[31] or worries and mental anxiety[32] is not enough.
There is likewise no factual basis for an award of actual damages. Actual damages to be compensable
must be proven by clear evidence.[33] A court can not rely on speculation, conjecture or guess work as
to the fact and amount of damages, but must depend on actual proof.[34]

However, it is also apparent that the spouses Deang suffered financial damage because of the loss of the
owners duplicate copy of the title. Temperate damages may be granted.

Article 2224. Temperate or moderate damages, which are more than nominal but less than
compensatory damages, may be recovered when the court finds that some pecuniary loss has been
suffered but its amount cannot, from the nature of the case, be proved with certainty.

GSIS submits that there must be proof of pecuniary loss. This is untenable. The rationale behind
temperate damages is precisely that from the nature of the case, definite proof of pecuniary loss cannot
be offered. When the court is convinced that there has been such loss, the judge is empowered to
calculate moderate damages, rather than let the complainant suffer without redress from the defendants
wrongful act.[35]

The award of twenty thousand pesos (P20,000.00) in temperate damages is reasonable considering that
GSIS spent for the reconstitution of the owners duplicate copy of the title.

Next, the attorneys fees. Attorneys fees which are granted as an item of damages are generally not
recoverable.[36] The award of attorneys fees is the exception rather than the rule and counsels fees are
not to be awarded every time a party wins a suit. The award of attorneys fees demands factual, legal
and equitable justification; its basis cannot be left to speculation or conjecture.[37]

We find no circumstance to justify the award of attorneys fees. We delete the same.

The Fallo

WHEREFORE, we DENY the petition. We AFFIRM the decision of the Court of Appeals in CA-G.R.
CV No. 51240 with the MODIFICATION that award of attorneys fees is DELETED.

No costs.

SO ORDERED.

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

Puno, J., on official leave.

THIRD DIVISION
[G.R. No. 136096. February 7, 2001]

NELIA ATILLO, petitioner, vs. BUENAVENTURA BOMBAY, respondent.

DECISION

GONZAGA-REYES, J.:

Before us is a petition for review under Rule 45 of the 1997 Rules of Court that assails the
Resolutions[1] of the Court of Appeals dated April 14, 1998 and October 16, 1998 in CA-GR SP No.
47351, entitled Nelia Atillo vs. Buenaventura Bombay. The resolutions respectively dismissed the
petition of herein petitioner Nelia Atillo (petitioner) and denied her motion for reconsideration.

The pertinent facts that led to the filing of this petition are as follows:

Petitioner entered into a Lease Agreement with Buenaventura Bombay (private respondent) alleged
owner of the Alto Commercial Building, in Mayamot, Antipolo, Rizal. The Lease Agreement provided
that the period of lease was for one (1) year, starting May 1, 1988, and renewable upon the mutual
consent of the parties. Petitioner failed to pay the rentals starting January 1995, a ground for
terminating the Lease Agreement. Despite the written demand dated August 15, 1994 of private
respondent to petitioner to pay the monthly rental and vacate the premises; the latter failed to do so.
Private respondent then filed an ejectment case against petitioner with the Municipal Trial Court
(MTC) of Antipolo, Rizal, Branch I.

In her Answer, petitioner alleged that the Alto Commercial Building was actually owned by the heirs of
a certain Tomas Escaraman, to whom ownership of the building was transferred by Nide Marie
Bombay under a ten-year lease agreement or Kasunduan. Petitioner contended that at the time private
respondent demanded that she vacates the leased unit, private respondent allegedly no longer had any
rights over the same and was already guilty of illegal detainer. Petitioner pointed out that a suit was in
fact brought by the heirs of Tomas Escaraman against private respondent for unlawful detainer,
docketed as Civil Case No. 2563 before the Municipal Trial Court of Antipolo, Rizal. Upon discovery
of these developments, petitioner entered into a Contract of Lease with the heirs of Tomas Escaraman
for the same unit already covered by her Lease Agreement with private respondent. With the new
contract, petitioner paid rentals for the leased unit to the heirs of Tomas Escaraman and this was the
basis of her refusal to comply with the demand of private respondent for her to vacate the leased unit.

On November 24, 1995 the MTC issued its Decision dismissing the ejectment case on the ground that
plaintiff therein (herein private respondent) was not the proper party in interest based on the Kasunduan
and had therefore no right to eject defendant (herein petitioner).

Private respondent appealed the decision to the Regional Trial Court (RTC) of Antipolo, Rizal, Branch
72.

On February 24, 1997, the RTC rendered the assailed Order reversing the Decision of the MTC and
ruling in favor private respondent. The same Order awarded back rentals to private respondent and
ordered petitioner to vacate the leased premises.

Aggrieved by the RTC Order, petitioner filed a petition for review with the Court of Appeals (CA).
On April 14, 1998, the CA issued a Resolution dismissing the petition of petitioner on the ground that
petitioner failed to attach the pleadings and other material portions of the record of the case in violation
of Rule 42, Section 2 (d) of the Rules of Court. In justifying the dismissal of the petition, the CA
reasoned that:

Section 2 (d), rule 42, 1997 Rules of Civil Procedure requires that the petition shall

(d) be accompanied by clearly legible duplicate originals or true copies of the judgments or final orders
of both lower courts, certified correct by the clerk of court of the Regional Trial Court, the requisite
number of plain copies thereof and of the pleadings and other material portions of the record as would
support the allegations of the petition.

While petitioner has attached original/certified machine copies of the decisions of both lower
courts, as well as the RTC order denying her motion for reconsideration, the writ of execution and
notice to vacate, she has not annexed to her petition copies of the pleadings and other material
portions of the record such as the complaint, answer and position papers filed with the lower court,
in violation of the above-cited rule.

WHEREFORE, on the authority of Section 3, Rule 42 of the 1997 Rules of Civil Procedure, the
petition is hereby dismissed.

SO ORDERED.[2] (Emphasis supplied.)

On October 16, 1998, the CA denied the motion for reconsideration filed by petitioner. The Resolution
reads:

Instead of simply complying with the Rules by submitting the additional annexes cited in our
Resolution of dismissal, petitioner in her Motion for Reconsideration has insisted that the requirement
contained in Section 2 (d) of Rule 42 is not mandatory but merely directory and that it is within her
discretion or that of her counsel to determine what pleading should be attached to the position paper.

We find petitioners position to be without basis. A cursory reading of the said provision would reveal
that the documents or annexes therein mentioned are required to be appended to the petition and the
mandatory character of such requirement may be inferred from Section 3 of Rule 42 which states that
the failure of the petitioner to comply with any of the foregoing requirements regarding xxxx xxxx the
contents of and the documents which should accompany the petition shall be sufficient ground for the
dismissal thereof.

Petitioners suggestion that the deficiency may be cured by directing the court a quo to elevate the
original record of the case is not well-taken. Precisely, the annexes mentioned in Section 2 (d) of Rule
42 are required to be appended to the petition in order to enable this Court to determine even without
consulting the record if the petition is patently without merit or the issues raised therein are too
unsubstantial to require reconsideration, in which case the petition should be dismissed outright, or
whether there is a need to require the respondent to comment on the petition. In short, the mere fact that
a petition for review is filed does not call for the elevation of the record, which means that until this
Court finds that the elevation of the record is necessary, such record should remain with the trial court
during the pendency of the appeal in accordance with Section 2 of Rule 39, let alone the fact that in
ejectment cases the decision of the RTC is immediately executory pursuant to Section 21 of the
Revised Rule on Summary Procedure. Thus, more often than not, this Court has resolved petitions for
review under Rule 42 without unnecessary movement of the original record of the case which could
entail not only undue delay but also the possibility of the record being lost in transit.

WHEREFORE, the motion for reconsideration is DENIED for evident want of merit.

SO ORDERED.[3]

Hence, this petition. Petitioner submits that the CA committed the following errors:

FIRSTLY, the portion of Rule 42, Section 2 (d) relied upon by the Court of Appeal is directory and not
mandatory, and clearly vests the party and/or counsel with discretion to determine which pleadings if
any to attach to the petition;

SECONDLY, because the pleadings which must be attached were not enumerated in the afore-stated
rule, a failure to include a pleading which the Court of Appeals may require should not have resulted in
dismissal of the petition; and

THIRDLY, the decision below awarding back rentals to respondent has no basis, and should not be
countenance (sic).[4]

Petitioner urges this Court to liberally construe Section 2 (d), Rule 42 of the Rules of Court. She
maintains that the mandatory requirement in the questioned provision pertains only to the requirement
that judgment or final orders of both lower courts from which the appeal is made must be attached to
the petition. In contrast, the portion of the provision that requires the attachment of pleadings and other
material portions of the record as would support the allegations of the petition allegedly suggests the
mere exercise of discretion. Thus, petitioner rationalizes that the records which in her counsels
judgment were not of great importance or critical relevance to support her contentions were no longer
included in the attachment. Petitioner argues that the deficiency in the attachment could be cured since
the CA could direct the trial court clerk to elevate the original records of the case.

Petitioner bewails the alleged whimsical and capricious dismissal of her petition by the CA. She claims
that the CA has not taken a single definitive stand on the matter of disposition of petitions where no
pleadings were attached. The disparity in the treatment of appeals is allegedly evident in view of the
favorable treatment given to the petition in the case of Sofia Caccan vs. Buenaventura Bombay,
docketed as CA GR No. SP-46193. Said case is allegedly similar to the case at bar in the sense that it
involves the same respondent in the person of Buenaventura Bombay, that both cases involve the same
causes of action as well as issues, that said case raised also exactly the same arguments raised in this
case, and that the petition in said case also did not include any pleading or records. However, unlike the
case at bar, the petition in the case of Caccan vs. Bombay was allegedly not dismissed despite the non-
attachment of the pleadings and records. The Fifth Division of the CA in said case issued a Resolution
dated December 19, 1997[5], requiring private respondent to file his Comment therein. Petitioner in this
case deplores the alleged disparity of treatment in that her petition suffered a dismissal where another
petition identical to it was treated with more considerate and reasonable latitude. It is allegedly unfair
that petitioner would now lose her recourse because of the accident of fate that her petition was raffled
to the Honorable Sixth Division, instead of the Fourth (sic) or other divisions which would have acted
in a less precipitate manner.[6]
Private respondent counters that there is no reason to justify a liberal application of the rules. He points
out that petitioner did not attach to her petition for review before the CA the pleadings and other
material portions of the record such as the complaint, answer and position papers filed with the lower
court. Said attachments, private respondent claims, are necessary in order to enable the Court of
Appeals to determine if the petition is patently without merit or the issues raised therein are too
insubstantial to require consideration.

The petition is devoid of merit.

Petitioner limits the main issue in this case to whether or not the requirement to attach the pleadings
and other material portions of the record as provided for by Section 2 (d), Rule 42 of the Rules of Court
is mandatory such that non-compliance would warrant the outright dismissal of the petition. Section 2,
Rule 42 of the Rules of Court provides as follows:

SEC. 2. Form and Contents. The petition shall be filed in seven (7) legible copies, with the original
copy intended for the court being indicated as such by the petitioner, and shall (a) state the full names
of the parties to the case, without impleading the lower courts or judges thereof either as petitioners or
respondents; (b) indicate the specific material dates showing that it was filed on time; (c) set forth
concisely a statement of the matters involved, the issues raised, the specification of errors of fact or
law, or both, allegedly committed by the Regional Trial Court, and the reasons or arguments relied
upon for the allowance of the appeal; (d) be accompanied by clearly legible duplicate originals or true
copies of the judgments or final orders of both lower courts, certified correct by the clerk of court of
the Regional Trial Court, the requisite number of plain copies thereof and of the pleadings and other
material portions of the record as would support the allegations of the petition. (Emphasis ours.)

Non-compliance with any of the foregoing requisites is a ground for the .dismissal of a petition based
on Section 3 of the same Rule, viz:

Sec. 3. Effect of failure to comply with requirements. The failure of petitioner to comply with any of
the foregoing requisites regarding the payment of, the docket and other lawful fees, the deposit for
costs, proof of service of the petition, and the contents of and the documents which should accompany
the petition shall be sufficient ground for the dismissal thereof.

The mandatory tenor of Section 2 (d), Rule 42 with respect to the requirement of attaching clearly
legible duplicate originals or true copies of the judgments or final orders of both lower courts is
discernible and well settled. In this case, the mandatory or directory nature of the requirement with
respect to the attachment of pleadings and other material portions of the record is put in question.

The phrase of the pleadings and other material portions of the record in Section 2 (d), Rule 42 is
followed by the phrase as would support the allegations of the petition clearly contemplates the
exercise of discretion on the part of the petitioner in the selection of documents that are deemed to be
relevant to the petition. However, while it is true that it is petitioner who initially exercises the
discretion in selecting the relevant supporting documents that will be appended to the petition, it is the
CA that will ultimately determine if the supporting documents are sufficient to even make out a prima
facie case. It can be fairly assumed that the CA took pains in the case at bar to examine the documents
attached to the petition so that it could discern whether on the basis of what have been submitted it
could already judiciously determine the merits of the petition. The crucial issue to consider then is
whether or not the documents accompanying the petition before the CA sufficiently supported the
allegations therein.

In the recent case of Cusi-Hernandez vs. Diaz[7] the CA dismissed the petition of therein petitioner for
failure to attach the certified true copies of such material portions of the record as would support the
allegations in the petition. We ruled that based on the case of Cadayona vs. CA[8], not all of the
supporting papers accompanying the petition should be certified. The documents attached by therein
petitioner consisted only of the original duplicate copies of the assailed decisions and orders of the
lower court but the Contract to Sell, a document central to the dispute, was not annexed. Nonetheless,
we declared that there was substantial compliance with Section 2, Rule 42 since the MTC Decision
attached to the petition reproduced verbatim the Contract to Sell. Moreover, we noted that therein
petitioner annexed in the Motion for Reconsideration of the CA Decision copies of the Contract to Sell,
the Original Certificate of Title, the Tax Declaration of the land in dispute, and the notarized rescission
of the Contract to Sell. The efforts of therein petitioner to substantiate her allegations in her petition
were clearly evident, thereby warranting reasonable leniency. Thus, we remanded the case to the CA so
that it could decide the case on the merits.

In the case at bar, petitioner did not even come close to substantially complying with the requirements
of Section 2 (d) of Rule 42. In fact, the CA had no factual basis upon which it could actually and
completely dispose of the case. Aside from questioning the appeal of private respondent to the RTC, the
petition filed by petitioner before the CA also objected to the award of back rentals by the RTC to
private respondent. Petitioner disputed the award of back rentals in this manner:

A cursory perusal of the pleadings and documents submitted in the court a quo would show that at the
time that petitioner was in possession of subject premises, her rental was only P1,500.00 per month.
This is evident in the lease agreement which she entered into with respondent. It is just as easily
established that the amount of P4,000.00 as claimed by respondent was merely based on his mere
speculations. Moreover, no evidence was ever submitted by respondent to show that such amount was
indeed justified as rental for the subject premises.

In addition, the Reversal Order failed to consider that as of the date of the filing of the instant case,
petitioner still had a credit of P3,000.00 with respondent representing the balance on her deposit. This
deposit has been duly acknowledged by respondent and in fact documented in his communications with
petitioner. At the very least, this should have been credited in favor of petitioner.

All told, therefore, the court a quo in ruling in favor of respondent despite the absence of facts and
evidence in support of his claims, erred in rendering the assailed Orders. In the case at bar, the amounts
awarded by the court a quo were without any basis and to uphold the same would in fact be prejudicial
to the property rights of petitioner.[9]

Petitioner urged the CA to examine the documents and pleadings submitted to the RTC but what
petitioner appended to her petition before the CA merely consisted of the MTC Decision, the assailed
RTC Order, and RTC Writ of Execution. The two other documents submitted, the Notice to Vacate and
Writ of Execution pertain to the case of Salome Escaraman vs. Nadie Bombay docketed as Civil Case
No. 95-3745. None of the foregoing documents set out the factual milieu of her claims. Petitioner did
not annex the Kasunduan or Agreement, the Lease Contract between her and private respondent, the
letters evidencing the alleged credit that she still has with private respondent and the other documentary
evidence vital and indispensable to the disposition of her petition before the CA. Without the necessary
documents to support the petition, the allegations therein were reduced to nothing more but bare
allegations and the dismissal of the petition in this case was therefore forthcoming.

Petitioner characterizes the outright dismissal of her petition as whimsical. We do not agree. The case
of Cusi-Hernandez vs. Diaz does recognize the fact that Section 3 (d), Rule 3 of the Revised Internal
Rules of the CA[10] empowers the CA to require the parties to submit additional documents as may be
necessary in the interest of substantial justice.[11] However, in this case, the exercise of this power
under the foregoing rule would have been an exercise in futility. Petitioner remained obstinate in her
stand not to submit the additional pleadings and other material portions of the record as shown in her
Motion for Reconsideration of the CA Resolution. Petitioner insistently stated that it is not mandatory
upon petitioner to annex to the instant petition copies of the pleadings and other material portions of the
records of the instant case, specially if in the opinion of counsel, no pleadings or portions of the records
would support the allegations of the petition. It is up to counsel to make a determination of which
documents are material to the petition and would support the allegations therein.[12]

Instead of manifesting that petitioner would submit the additional documentary evidence, petitioner
maintained that what she has submitted based on her discretion, are all that are necessary to support her
allegations in her petition. As mentioned earlier, the accompanying documents were simply insufficient
to support the petition. Also, petitioner could have easily ended her debacle by merely attaching the
supplemental documents in her Motion for Reconsideration of the CA Resolution. Instead, petitioner
stubbornly chose to insist that the CA direct the elevation of the records of the case if it deems that the
relevant attachments were not appended to the petition. Petitioners unreasonable stance in the case at
bar leaves no room for us to extend the same leniency that we accorded the petitioner in Cusi-
Hernandez vs. Diaz.

As mentioned earlier, it is not disputed that it is petitioner who knows best what pleadings or material
portions of the record of the case would support the allegations in the petition. Petitioners discretion in
choosing the documents to be attached to the petition is however not unbridled. The CA has the duty to
check the exercise of this discretion, to see to it that the submission of supporting documents is not
merely perfunctory. The practical aspect of this duty is to enable the CA to determine at the earliest
possible time the existence of prima facie merit in the petition. Moreover, Section 3 of Rule 42 of the
Rules of Court provides that if petitioner fails to comply with the submission of documents which
should accompany the petition, it shall be sufficient ground for the dismissal thereof. In this case, the
insufficiency of the supporting documents combined with the unjustified refusal of petitioner to even
attempt to substantially comply with the attachment requirement justified the dismissal of her petition.

WHEREFORE, the petition is DENIED. The assailed Resolutions dated April 14, 1998 and October
16, 1998 issued by the Court of Appeals in Ca-GR SP No. 46193 are AFFIRMED. Costs against
petitioner.

SO ORDERED.

Melo (Chairman), Vitug, Panganiban, and Sandoval-Gutierrez, JJ., concur.

SECOND DIVISION

[G.R. No. 110701. March 12, 2002]

FORTUNE GUARANTEE AND INSURANCE CORPORATION, petitioner, vs. HONORABLE

COURT OF APPEALS, HONORABLE JUDGE HENEDINO P. EDUARTE, RTC, BRANCH 20,
CAUAYAN, ISABELA, EGDONA R. MADRIAGA, PROVINCIAL SHERIFF OF THE REGIONAL
TRIAL COURT OF CAUAYAN, ISABELA OR ANY OF HIS DEPUTIES and ISABELA I
ELECTRIC COOPERATIVE, INC., respondents.

DECISION

DE LEON, JR., J.:

Before us is a Petition for Certiorari under Rule 65[1] of the Rules of Court which seeks to annul the
twin Resolutions of the Court of Appeals in CA-GR SP No. 30430[2] dated April 19, 1993[3] and dated
June 16, 1993,[4] respectively, which ultimately dismissed the petition for certiorari of petitioner
Fortune Guarantee and Insurance Corporation that assailed the Special Order dated February 12, 1993
of respondent Judge Henedino P. Eduarte of the Regional Trial Court of Cauayan, Isabela, granting
execution pending appeal of his Decision in Civil Case No. Br. 20-436.

The facts are as follows:

On November 11, 1988, Isabela 1 Electric Cooperative, Inc. (ISELCO-I) secured Fire Insurance Policy
No. 9216 from petitioner for Two Million (P2,000,000.00) Pesos. This was later on changed to Policy
No. 9218[5] with expanded coverage to include typhoons and floods. The period covered by the said
amended insurance policy is from 4:00 oclock p.m. of November 11, 1988 to 4:00 oclock p.m. of
November 11, 1989. The properties covered are all of ISELCO-Is distribution lines, electric
posts/poles, transformers and its accessories, towers and fixtures installed and/or specifically situated in
the towns of Alicia, Angadanan, Cabatuan, Cauayan, Cordon, Echague, Jones, Luna, Ramon, San
Isidro, San Mateo, Santiago, Reina Mercedes, San Guillermo and San Agustin all in the Province of
Isabela.[6]

During the subsistence of the insurance policy, the insured properties of ISELCO-I were destroyed by
two (2) typhoons in 1989; first by typhoon ELANG on July 9 and second by typhoon TACING on
October 19 of the same year. ISELCO-I filed successive claims with petitioner. Notwithstanding the
several demands made by ISELCO-I, however, petitioner refused to pay the claims.

On March 19, 1990, ISELCO-I, through its representative, filed a complaint against petitioner for a
sum of money in the amount of Two Million (P2,000,000.00) Pesos with damages before the Regional
Trial Court of Cauayan, Isabela. The case which was assigned to Branch 20 presided by respondent
Judge Henedino P. Eduarte, was docketed as Civil Case No. Br. 20-436. In answer thereto, petitioner
claimed, among others, that since the total value of the entire properties insured was Thirty-Six Million
(P36,000,000.00) Pesos, it thereby rendered ISELCO-Is properties underinsured by the Two Million
(P2,000,000.00) Pesos insurance policy. Thus, according to petitioner, ISELCO-I was entitled to
payment of only a fraction of the policys face value or only One Hundred Eighty-Three Thousand
Seven Hundred Eighty-Five Pesos and Seventy-Three Centavos (P183,785.73) instead of the Two
Million (P2,000,000.00) Pesos claimed by ISELCO-I.
On June 17, 1992, after trial on the merits, the trial court rendered a decision in favor of ISELCO-I, the
dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant,
ordering the defendant Fortune Guarantee and Insurance Corporation to pay to the plaintiff Isabela- 1
Electric Cooperative, Inc., (ISELCO I) TWO MILLION (P2,000,000.00) PESOS with interest at the
rate of 14% per annum from March 19, 1990 up to and until said amount shall have been fully paid,
attorneys fees in the amount of P200,000.00 plus P2,500.00 honorarium. Costs against defendant.

SO ORDERED.[7]

On June 22, 1992, ISELCO-I filed a Motion for Execution Pending Appeal[8] alleging good reasons for
its allowance.

On July 13, 1992, petitioner filed a motion for reconsideration[9] of the Decision of the trial court. On
July 23, 1992, ISELCO-I filed its Opposition to the said Motion for Reconsideration;[10] and on
November 13, 1992, petitioner filed its Opposition[11] to ISELCO-Is Motion for Execution Pending
Appeal on the ground that ISELCO-I had no good reasons and no clear right to a writ of execution
pending appeal as the subject amount is enormous.

On October 7, 1992, the trial court denied the said motion for reconsideration filed by the petitioner.
Thereafter, on November 3, 1992, petitioner seasonably filed its Notice of Appeal with the trial court.

On February 12, 1993, the trial court resolved in a Special Order[12] the Motion for Execution Pending
Appeal in favor of ISELCO-I, the dispositive portion of which reads:

WHEREFORE, finding the motion for execution pending appeal to be meritorious as there are good
and valid reasons in support thereof, let a writ of execution of the decision of the Court for the principal
claim of P2,000,000.00 be issued upon plaintiffs filing a bond in favor of defendant in the amount of
P1,817,742.8 to answer for damages that defendant may suffer by reason of the writ if it is later on
adjudge that plaintiff was not entitled thereto.

SO ORDERED.[13]

Aggrieved by such Special Order, petitioner filed a Petition for Certiorari, Preliminary Injunction with
Temporary Restraining Order,[14] with the Court of Appeals, alleging grave abuse of discretion on the
part of respondent Judge in issuing the Special Order granting execution pending appeal.

On April 19, 1993, the Court of Appeals issued a Resolution[15] dismissing the said petition. The
motion for reconsideration of petitioner was likewise denied for lack of merit in a Resolution dated
June 16, 1993.[16]

Hence, this petition.

Petitioner assigns the following as errors, to wit:

I
 RESPONDENT COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF
DISCRETION OR IN EXCESS THEREOF AMOUNTING TO LACK OF JURISDICTION IN
AFFIRMING THE ACTUATIONS OF RESPONDENT JUDGE WHO, KNOWING THAT
THE EVIDENCE BEFORE HIM CLEARLY PROVED THAT THE SUBJECT INSURED
PROPERTIES OF PRIVATE RESPONDENT IS VALUED AT P36,052,061.15, AND NOT
P2,000,000.00, HENCE UNDERINSURED, HE BIASLY AND IMPROPERLY APPLIED
JUDICIAL NOTICE AND PIERCED THE SAID AMOUNT OF P36,061,052.15 (SIC) BY
DIVIDING IT INTO TWO AND DECLARED THAT P2,000,000.00 PORTION THEREOF
REFERS TO THE VALUE OF THE INSURED PROPERTIES AND THE P34 M COVERS
OTHER PROPERTIES, TO MAKE IT APPEAR THAT THE INSURED PROPERTIES
WERE NOT UNDERINSURED AND THEREFORE PRIVATE RESPONDENT CAN CLAIM
THE WHOLE INSURANCE COVERAGE OF P2,000,000.00 WHICH IS CONTRARY TO THE
EVIDENCE AND THE LAW.

II

RESPONDENT COURT OF APPEALS ERRED AND ACTED WITH GRAVE ABUSE OF

DISCRETION IN HASTILY DENYING PETITIONERS MOTION FOR
RECONSIDERATION BY DELIBERATELY IGNORING PETITIONERS REJOINDER
TO PRIVATE RESPONDENTS COMMENT ATTACHING THERETO (REJOINDER)
TWO SETS OF DOCUMENTS TO CORROBORATE THE JUDICIAL ADMISSION OF
PRIVATE RESPONDENT THAT ITS INSURED PROPERTIES WERE VALUED AT
P36,061,052.15 AND NOT P2,000,000.00, HENCE, UNDERINSURED. THUS, THE APPEAL
OF PETITIONER IS NOT DILATORY.

III

RESPONDENT COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE SPECIAL

ORDER OF RESPONDENT JUDGE GRANTING EXECUTION PENDING APPEAL
AGAINST PETITIONER FOR AN ENORMOUS SUM OF P2,000,000.00 WITHOUT GOOD
REASONS THEREFOR.

At the outset, it must be pointed out that petitioner adopted the wrong mode of appeal in bringing this
case before us. The proper remedy of a party aggrieved by a decision of the Court of Appeals is a
petition for review under Rule 45 which is not similar to a petition for certiorari under Rule 65 of the
Rules of Court.[17] This was clearly addressed by this Court in Heirs of Marcelino Pagobo vs. CA[18]
where we held that as provided in Rule 45 of the Rules of Court, decisions, final orders or resolutions
of the Court of Appeals in any case, i.e., regardless of the nature of the action or proceedings involved,
may be appealed to us by filing a petition for review, which would be but a continuation of the
appellate process over the original case. On the other hand, a special civil action under Rule 65 is an
independent action based on the specific grounds therein provided and, as a general rule, cannot be
availed of as a substitute for the lost remedy of an ordinary appeal, including that under Rule 45.[19]

Accordingly, when a party adopts an improper remedy, as in this case, his petition may be dismissed
outright. However, in the interest of substantial justice, the strict application of procedural technicalities
should not hinder the speedy disposition of this case on the merits.[20] Thus, while the instant petition is
one for certiorari under Rule 65 of the Rules of Court, the assigned errors are more properly addressed
in a petition for review under Rule 45.
First of all, It is at once apparent that the first two (2) assignments of errors in this petition behoove this
Court to review the finding made by the appellate court that the properties of ISELCO-I were not
underinsured. This we cannot do for the simple reason that it would require us to go into the merits of
the decision rendered by respondent Judge in Civil Case No. Br. 20-436, which decision in the main
case is now subject of a separate appeal by petitioner to the Court of Appeals. Thus, despite the parties
insistent submission of the question of underinsurance for our resolution in this petition, we must
reiterate the well-established rule that the merits of the case should not be determined at this stage of
the proceedings, in advance of the main appeal taken by the aggrieved party from the judgment
rendered by respondent court.[21]

It is unfortunate that the Court of Appeals, in resolving the petition for certiorari imputing grave abuse
of discretion to respondent Judge in granting execution pending appeal per his said Special Order,
dwelt on the merits of the principal action, and held in part that:

On the central issue of whether there was underinsurance, the respondent judge made the following
findings which we sense to be persuasive:

The third issue is whether or not the properties of the plaintiff are underinsured. It is the contention of
the defendant that because the total value of the properties of the plaintiff is P36,000,000.00 but the
insurance taken is only P2,000,000.00, its properties are under insured. The contention is not well
taken. In the first place, while the total value of the properties of the plaintiff is P36,000,000.00, not all
its properties were insured with the defendant. The only properties of the plaintiff insured with the
defendant are its distribution lines, electric posts/poles, transformers and its accessories, towers and
fixtures installed and/or situated in the covered areas. Its buildings, vehicles (which the court takes
judicial notice of) and other properties are not insured with defendant. The value of the properties
insured is only P2,282,765.00, more or less, as may be seen from the summary of claims filed by the
plaintiff dated November 21, 1989 and marked as Exhibit C. The properties insured are not under
insured. (Annex G of Petition) [Underscoring supplied][22]

The above-quoted obiter dictum of the Court of Appeals with respect to the issue of underinsurance
must be disregarded as the ruling of the Court of Appeals cannot be duly extended to expand the main
thrust of its subject Resolutions beyond their true import.[23]

It is imperative that we allow the main appeal to take its normal course. In the case before us, therefore,
we shall purposely limit ourselves to resolving only the wisdom of the trial courts exercise of discretion
in ordering the execution pending appeal.[24]

The assailed Special Order of respondent Judge granting execution pending appeal reads as follows:

For resolution is a motion to execute the decision pending appeal filed by the plaintiff, through counsel,
based on the following good reasons:

x x x that the withholding of payment by the defendant is fraudulent and malicious in that it delayed
payment and made business with the money due to the plaintiff while the case was pending.

That since the happening of the event insured against in June 1989 and October 1989, the consumer-
members which include the municipalities of Alicia, Angadanan, Cabatuan, Cauayan, Cordon,
Santiago, Reina Mercedes, San Guillermo and San Agustin all in the province of Isabela have suffered
untold sufferings because while the lines were repaired the repairs made on the damage on (sic)
transmission lines and backbone lines of the plaintiff were not repaired as desired for lack of funds;

That the plaintiff need badly the amounts adjudged in the decision for the use of said plaintiff in the
repairs of its transmission lines, electric posts, transformers and its accessories, towers and fixtures
within its area of coverage;

That to delay the payment of the claims of the plaintiff which is valid will cause irreparable injury and
sufferings to the consumer-member who expect the best service from the plaintiff; xxx that the plaintiff
is willing to put up a bond to be fixed on the discretion of the court to guarantee payment of damages to
the defendant if the court finds that it was wrongly issued.

In the joint affidavit of Rolando P. Garcia and Lyn M. Octubre, OIC General Manager and Chief
Management Internal Auditor, respectively, of the plaintiff submitted in support of plaintiffs motion,
declared, among others, that:

4. That the destruction had to be repaired immediately and as the cooperative had no money at the time,
the cooperative had to borrow cash from private persons and entities;

5. That up to the present the indebtedness of the cooperative aforecited is not fully paid to the present.

xxx xxx xxx

After a careful consideration of the case, the Court arrived at the conclusion that the grounds relied
upon by the plaintiff constitute good and valid reasons for the execution of the decision pending appeal.
It must always be borne in mind that the plaintiff is a cooperative of the people within the area of its
coverage. It is engage in the business of retailing electricity to its members - a commodity basic to the
welfare and vital to the industries of the people. Its business is thus impress with public interest.

To deliver electricity to the people, its electric lines, posts, transmissions, transformers and other
accessories must always be maintained in good order and condition. This entails big amount of money.
Thus, plaintiff must have insured its properties against the risk of their being damaged or destroyed by
typhoons so that it shall have sufficient funds for their repair. But when the plaintiff went to the
defendant to demand payment of the proceeds of its insurance, it refused to pay. It wanted to pay only
partially.

Plaintiff had to repair its properties because it can not escape its duties and responsibilities to the
people. It borrowed money to make the repairs which for lack of funds leave much to be desired.
Plaintiff needs the amount adjudged for the repair of its transmission lines, electric posts, transformers
and accessories, towers and fixtures.

Posting of a bond by the plaintiff to secure payment of damages to the defendant should the appellate
court later on adjudge that plaintiff was not entitled to the execution pending appeal, is a good reason as
held by the Supreme Court in several cases (Lu vs. Valeriano, 111 SCRA 87; Delos Reyes vs.
Capulong, 122 SCRA (631; Roxas vs. CA, 157 SCRA 370; City of Manila vs. CA, 72 SCRA 98).[25]

Petitioner claims that the respondent Judge abused his discretion in issuing a writ of execution pending
appeal despite the fact that its appeal is clearly not dilatory. It likewise argued that since the evidence
shows that electricity was immediately restored in the affected localities, the reasons posited by
ISELCO-I are not the good reasons contemplated by law for the extraordinary grant of execution
pending appeal.

We disagree.

As a general rule, the execution of a judgment should not be had until and unless the judgment has
become final and executory, i.e., the period of appeal has lapsed without an appeal having been taken,
or appeal having been taken, the appeal has been resolved and the records of the case have been
returned to the court of origin, in which event, execution shall issue as a matter of right. Execution
pending appeal in accordance with Section 2 of Rule 39[26] of the Rules of Court is, therefore, the
exception.[27]

The requisites for the grant of a motion for execution pending appeal are: (a) there must be a motion by
the prevailing party with notice to the adverse party; (b) there must be a good reason for execution
pending appeal; and (c) the good reason must be stated in a special order.[28]

Being an exception to the general rule, the requisites of execution pending appeal must, therefore, be
strictly construed.[29] Thus, anent the requisite that there must be good reason justifying the execution
of the judgment pending appeal, we have consistently held that such good reason must constitute
superior circumstances demanding urgency which will outweigh the injury or damage should the losing
party secure a reversal of the judgment.[30] Beyond the guideline set by jurisprudence, however, statute
does not determine, enumerate, or give examples of what may be considered good reasons to justify
execution pending appeal. What these good reasons are must, therefore, necessarily be addressed to the
discretion of the court, and in the case of City of Manila vs. Court of Appeals[31] we said that:

xxx If in the mind of the court, taking into consideration the facts and circumstances surrounding the
case, good reasons exist, the exercise of the power to issue immediate execution of the judgment cannot
be considered as grave abuse of discretion. Provided there are good reasons for execution according to
the judgment of the trial judge, such judgment should generally not be interfered with, modified,
controlled, or inquired into by the appellate court; the latter should generally not substitute its way of
thinking for that of the trial court, otherwise, the discretionary power given to the trial court would
have no meaning. The appellate court may, however, interfere with that discretion lodged in the trial
court only in case of grave abuse or in case conditions have so far changed since the issuance of the
order as to necessitate the intervention of the appellate court to protect the interests of the parties
against contingencies which were not or could have not been contemplated by the trial judge at the time
of the issuance of the order.[32]

We find that there is neither grave abuse of discretion on the part of respondent Judge nor a change in
circumstances so as to warrant a setting aside of the assailed Special Order granting execution pending
appeal.

Respondent judge exercised sound discretion in granting execution pending appeal on the grounds that:
(1) ISELCO-I is a cooperative of the people within the area of coverage that is engaged in the business
of retailing electricity to its members - a commodity basic to their welfare and vital to the industries of
the people; and (2) to deliver electricity to the people, its electric lines, posts, transmissions,
transformers and other accessories must always be maintained in good order and condition.
To restore electricity in the areas affected, ISELCO-I had to borrow money from private persons and
entities, which money, however, was insufficient to repair all the damage that had been caused to
ISELCO-Is properties. Hence, while it is true that ISELCO-I was able to immediately repair its lines
and restore electricity to the areas affected by the typhoons, the damage to its transmission lines and
backbone lines was not repaired due to lack of funds. But it is not the fact of ISELCO-Is indebtedness
that is propounded as the good reason for execution pending appeal but the fact that, as correctly
pointed out by the trial court, to delay payment of the claims of ISELCO-I would cause irreparable
injury to the consumers-members of the cooperative who expect the best service from ISELCO-I.

Finally, it must be stressed here that respondent Judge granted execution pending appeal based upon the
evidence of those factual circumstances mentioned above. Furthermore, the Court of Appeals affirmed
those factual findings and respondent Judges conclusion that the same constitute good reasons
contemplated by law for granting execution pending appeal.

It bears reiterating, therefore, that it is not the function of this Court to analyze and weigh evidence all
over again unless there is a showing that the findings of the lower court are totally devoid of support or
are glaringly erroneous as to constitute grave abuse of discretion. In the same vein, the findings of fact
of the Court of Appeals supported by substantial evidence are conclusive and binding on the parties and
are not reviewable by this Court, unless the case falls under any of the recognized exceptions to the
rule, and this, petitioner has failed to prove.[33]

WHEREFORE, the instant petition is hereby DENIED for lack of merit, and the assailed Resolutions
of the Court of Appeals dated April 19, 1993 and June 16, 1993 are AFFIRMED without prejudice to
the resolution of the appeal on merits now pending in the Court of Appeals; and for that purpose, let the
record of this case be remanded to the Court of Appeals.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 93640 January 7, 1994

TAY CHUN SUY, petitioner,

vs.
COURT OF APPEALS AND DEVELOPMENT BANK OF THE PHILIPPINES, respondents.
Ponce Enrile, Cayetano, Reyes & Manalastas and Joaquin "Bobby" Yuseco for petitioner.

Eddie M. Laurente for private respondent.

BELLOSILLO, J.:

As between the buyer of a vessel at a prior extrajudicial foreclosure and the buyer at a subsequent auction sale, both buyers failing to register their
transactions, who has a better right of dominion over the vessel?

On 9 May 1978, Sta. Clara Lumber Co., Inc. (SCLC), obtained a loan of P18,514,357.56 from private respondent Development Bank of the Philippines
(DBP). As security for the loan, SCLC mortgaged some of its properties, among which was a vessel, MV Sta. Clara I . Upon SCLC's failure to pay the
loan, the mortgage was foreclosed. On 18 August 1982, the Clerk of Court and Provincial Sheriff Ex-Officio of Sultan Kudarat, Aurelio M. Rendon,
conducted an auction sale and sold the vessel to DBP for P3,600,000.00. He thereafter issued a certificate of sale dated 18 August 1982 in favor of
1
DBP. However, DBP did not register with the Philippine Coast Guard the mortgage; neither the foreclosure nor
the auction sale.

In December 1983, DBP and Sta. Clara Housing Industries, Inc. (SCHI), entered into a Lease/Purchase
Agreement 2 which provided that DBP should lease some of the former properties of SCLC, including MV Sta.
Clara I, to the latter and transfer actual ownership over these properties upon completion by the lessee of the
stipulated lease/purchase payment.

On 10 July 1986, petitioner caused the levy and attachment of the same vessel, MV Sta. Clara I, in order to
satisfy a judgment rendered by the Regional Trial Court, Br. XII, Davao City, in Civil Case No. 15970, "Tay Chun
Suy v. Sta. Clara Lumber Co., Inc." At the time of the levy, the coastwise license of the vessel was in the name of
Sta. Clara Lumber Co., Inc.

On the scheduled date of the execution sale, Atty. Necitas Kintanar, counsel for SCHI, verbally informed Deputy
Sheriff Manases M. Reyes, Jr., who was to conduct the sale, that MV Sta. Clara I was no longer owned by SCLC
but by DBP pursuant to a prior extrajudicial foreclosure sale. Despite such information, Sheriff Reyes, Jr.,
proceeded with the sale and awarded the vessel to petitioner for P317,000.00. 3

Meanwhile, on 23 July 1986, MV Sta. Clara I was again levied upon and attached by Deputy Sheriff Alfonso M.
Zamora by virtue of a writ of attachment issued by the Regional Trial Court, Br. XI, Cebu City, in Civil Case
No. CEB-5162, "Philippine Trigon Shipyard Shipping Corp. v. Sta. Clara Housing Industries, Inc., et al." 4 On 24
July 1986, the same court issued an order appointing Philippine Trigon Shipyard Shipping Corporation as
depository of the attached vessel with authority to operate the vessel temporarily. MV Sta. Clara I was then taken
from the port of Davao City to Cebu City.

Upon being informed of the execution sale to petitioner, DBP filed a complaint before the Regional Trial Court,
Br. XVII, Davao City, for annulment of the execution sale, recovery of possession, damages and attorney's fees
with prayer for restraining order and preliminary injunction. 5 Petitioner moved to dismiss the complaint for
alleged lack of jurisdiction, cause of action and/or legal personality to sue on the part of DBP. 6

On 28 October 1986, the court denied the motion to dismiss but granted DBP's prayer for a writ of preliminary
injunction. 7 Petitioner moved for reconsideration of the denial but on 19 November 1986, the motion was
likewise denied. 8

Forthwith, petitioner filed with the Court of Appeals a petition for certiorari and mandamus with prohibition
assailing the Orders of 28 October and 19 November 1986 of the trial court. On 11 March 1987, the Court of
Appeals dismissed the petition. 9

Petitioner appealed to this Court by way of a petition for review on certiorari, docketed as G.R. No. 78383, "Tay
Chun Suy vs. Development Bank of the Philippines, et al." In the resolution of 28 September 1987 (not 30
September 1987), the Third Division of this Court denied the petition for lack of merit. 10
On 4 December 1987, the trial court issued a decision which, among other matters, declared that DBP was the
lawful owner of MV Sta. Clara I and that the public auction sale conducted by Deputy Sheriff Manases Reyes,
Jr., on 16 July 1986 and the resultant certificate of sale were null and void. 11

On 16 December 1987, petitioner sought recourse to the Court of Appeals. On 28 February 1990, the appellate
court dismissed his appeal. 12 On 23 May 1990, the motion to reconsider the dismissal was denied. 13

Hence, this petition for review on certiorari. Petitioner contends that the Court of Appeals erred (1) in finding that
the sheriff's auction sale of the vessel did not enjoy the presumption of regularity; and (2) in affirming the
decision
of the trial court declaring DBP as the true and exclusive owner of MV Sta. Clara I. 14

Well-entrenched is the rule that factual findings of the trial court, as well as those of the Court of Appeals, are
entitled to great weight and respect. 15 This rule once more finds application in the case at bar.

The records show that SCHI, lessee of the vessel, is an entity separate from SCLC, and was not a party to the
case filed by petitioner against the
latter. 16 Yet, SCHI was furnished, on a Saturday, copy of the auction sale of MV Sta. Clara I . Sta. Clara Lumber
Co., Inc., which was the proper party, does not appear to have been notified. Upon being informed of the auction
sale, counsel for SCHI immediately went to the auction site and requested that the sale be reset that day on the
ground that SCLC was no longer the owner of the vessel. To support this claim, the Manager of SCHI hurriedly
left for her office to secure a copy of the certificate of sale in favor of DBP as this was demanded by the sheriff. 17

Given the circumstances obtaining in this case, a delay of a few hours could not have prejudiced petitioner. A
sheriff's ministerial duty to conduct an auction sale is not without any limitation. In the performance of this duty,
he is deemed to know what is inherently right and inherently wrong. Nonetheless, Sheriff Reyes, Jr., upon the
persistent proddings of petitioner, proceeded with the auction sale. His poor judgment alone would not have
caused any suspicion of bias. However, his precipitate action taken together with the anomalous proceedings
that ensued, and the haste with which he delivered the certificate of sale to petitioner in the afternoon of the day
of the auction sale lead to the inevitable conclusion that the whole operation was contrived to benefit petitioner. 18
The handwritten Minutes (Exh. "D") of the auction sale clearly indicate the haste with which they were prepared,
a telltale evidence of the anomalous conduct of the proceedings. On its face, one cannot determine the name of
the successful bidder of the vessel. The 16 July 1986 minutes 19 read:

MINUTES

Time: 10:15 o'clock in the morning.

Conducting Officer: Sheriff Reyes
Present:

Plaintiff (Bidder) 100,000 250,000

140,000 270,000

Atty. Positos 180,000 290,000

220,000 300,000

Atty. Kintanar 240,000 310,000

Mr. Ang (Bidder) 245,000 315,000

Mr. Arceo (Bidder) 317,000 Winner

Mr. Ang (Davao Metal Enterprises)

 Al 120,000 246,000 311,000
160,000 251,000 315,000
200,000 272,000
225,000 291,000
242,000 310,000

xxx xxx xxx

Sold to Plaintiff P317,000

The minutes became even more vague when Sheriff Reyes, Jr., testified that there were only three bidders.
From the minutes, however, we find that all those present offered bids as there were amounts placed opposite
their names

Atty. Fabro, counsel for DBP:

Q: Atty. Positos, counsel for the defendant also bidded, it seems to me?

Sheriff Reyes, Jr.:

A: That is, Atty. Positos was present.

Q: After the word Present: is the word Plaintiff (Bidder), are we to understand
or are we made to believe that these people here bidded because there are
amounts corresponding to their names?

A: No, actually Mr. Ang, Mr. Arceo and the plaintiff bidded actually during the
auction sale.

Q: Why is it that corresponding to the name of Atty. Positos here there are
amounts here

140,000 270,000
180,000 290,000
220,000 300,000

and Atty. Kintanar, 240,000 310,000?

A: Atty. Kintanar never gave his bid, he just observed the proceedings of the
auction sale.

Q: How come you stated in the minutes that there are amounts opposite their
names there?

A: They were present at that time.

Q: Why was it that opposite their names appear some amounts here if they did
not actually bid during the auction sale, what is the use of this (sic) amounts
here?

A: We put that only in the paper that they are (sic) present.
Atty. Positos and Atty. Kintanar were really present at that time and only Mr.
Ang, Mr. Arceo and the plaintiff were the regular bidders of the auction sale.
Q: So you believe that should be the only thing that should appear there in the
minutes as what you have placed there?

A: That is our procedure in the making of minutes, we have placed there those
present, the bidders, we have different style in making minutes.

Q: We have seen other minutes prepared by others. . .

COURT:

Do not argue, he said that is how he prepares minutes. Ask him only insofar as
what is relevant in this case.

ATTY. FABRO:

Q: When you stated here Mr. Ang, are you referring to the Chairman who
bought the vessel?

ATTY. APORTADERA:

The question is misleading, counsel is referring to Mr. Ang who bought the
vessel? That is misleading.

ATTY. FABRO:

I am asking him your Honor.

Q: Who is this Mr. Ang?

A: A bidder.

Q: He also bidded?

A: Yes.

Q: His bid was 245,000 315,000?

A: Yes, sir.

Q: There is also this Mr. Arceo, Mr. Arceo bidded also?

A: Yes, sir.

Q: Will you please explain to the Honorable Court why is it that the name of Mr.
Arceo (Bidder) here there appears the amount of P317,000 and there is the
word Winner? Would you please try to explain to the Honorable Court what
are those entries there ?

A: Mr. Ang's bid starts here from the amount P100,00 and plaintiff starts from AL
P120,000.

ATTY. FABRO:
 May we pray that these entries here found under the word Present: be
marked as Exhibit "D-2".

COURT:

Mark it.

ATTY. FABRO:

And we would also like to have this (sic) words: "Sold to Plaintiff P317,000"
encircled and marked Exhibit "D-3".

COURT:

Mark it.

ATTY. FABRO:

We would like to manifest your Honor that on the basis of this (sic) minutes
submitted by Deputy Sheriff Manases Reyes, there appears here no name of
Buyer, although it stated here that it was sold to plaintiff for P317,000.00.

This counsel is wondering where is the name of the buyer who bought the
vessel, your Honor 20 (Emphasis supplied)

Significantly, the above testimony of Sheriff Reyes, Jr., to the effect that Atty. Positos did not participate in the
bidding was rebutted by the latter. 21 In view of the ambiguity of the minutes, the trial court was constrained to ask
clarificatory questions from Sheriff Reyes, Jr.

COURT:

Q: The highest bidder, who is the plaintiff here as the highest bidder?

A: AL.

Q: Who is this AL?

A: AL is the plaintiff.

Q: What is the name of AL, you stated there AL, what does that mean?

Q: Actually there is some significance of the word AL as far as you are

concerned?

A: Yes, sir.

Q: What is that AL?

A: Initial (sic) of plaintiff.

Q: Why did you not record the full name of the plaintiff there as the name of the
highest bidder?
 A: I only put there the initial (sic) during the proceedings.

xxx xxx xxx

Q: On the face of your minutes I can say that this is not the proper minutes that
should be done by any Sheriff. You should even type your minutes after the
auction sale in order to inform any person later on what actually happened
during the proceedings. Even in stating merely the name of the plaintiff, you just
place here AL, what is the significance of this AL, when you know that he is
supposed to be the plaintiff . He is the plaintiff-bidder but you placed there only
AL.

Now, in your certificate of sale what did you state there as the highest bidder?

A: The name of the plaintiff.

Q: Do you have a certificate of sale?

A: Yes, sir. (Witness hands to the Court carbon original of a copy of the
certificate of sale).

Q: Do you have in the records copy of this certificate of sale?

A: Yes, Your Honor.

Q: You stated here that you awarded the vessel to Tay Chun Suy, as he is the
highest bidder. You stated in your certificate of sale the Plaintiff herein was
the successful bidder who offered his oral bid in the amount of P317,000.00 you
are basing this statement of yours from the minutes of July 16, 1986, is that
correct?

A: Yes, Your Honor.

Q: Why did you not state in your certificate of sale that this AL is actually the
one you referred her as Tay Chun Suy, are you not aware that that is the very
material where you based your certificate of sale and that the certificate of sale
will tally with the minutes of your proceedings of the auction sale?

(No answer).

COURT:

You are not only to explain that, you have to explain why your certificate of sale
does not tally with your minutes, you awarded the vessel to one Tay Chun Suy
while what appears in your minutes is that a certain AL . . . (emphasis supplied)
22

The procedure followed by Sheriff Reyes, Jr., was patently irregular. The unexplained inconsistencies in the
minutes and the certificate of sale are so material as to affect the integrity of the whole proceedings. Noteworthy,
too, is the fact that the Minutes (Exh. "D") do not mention the request of counsel for SCHI for deferment of the
auction sale. While the request was made prior to the auction sale, the trial court was correct in its observation
that the same should have been entered in the minutes because of its importance and relevance to the sale. 23
Under these circumstances, the ruling of the appellate court sustaining the trial court on the nullity of the auction
sale cannot be faulted.
Petitioner vigorously maintains that the failure of DBP to register its title to MV Sta. Clara I with the Philippine
Coast Guard is fatal to its claim of ownership. Likewise, he raises doubts as to whether the trial court has
jurisdiction to issue the writ of preliminary injunction. 24

In G.R. No. 78383, we rejected these arguments in our resolution of

28 September 1987

The respondent appellate court correctly held that the Regional Trial Court of Davao City,
Branch 17, had jurisdiction over the action brought in Civil Case No. 18188 concerning the
vessel herein involved which was allegedly purchased by petitioner in an execution sale, and
which execution sale was the result of the judgment rendered by Branch 12 of the same
Regional Trial Court in Civil Case No. 15970. Branch 17, Regional Trial Court of Davao City, did
not undertake to annul the judgment of the Regional Trial Court of Davao City, Branch 12,
jurisdiction to annul belonging to the Court of Appeals. Respondent appellate court also correctly
held that a certificate of registration of ownership of a vessel is only presumptive evidence that
the registered owner has a legal title to the vessel, and that DBP's failure to register with the
Philippine Coast Guard its prior acquisition of the vessel is not fatal to its ownership of said
vessel, vis-a-vis petitioner herein, who similarly failed to register the alleged subsequent sale of
the vessel to itself (sic) in an execution sale. 25

This resolution is now final and executory. The question of whether the non-registration by DBP is fatal to its
claim to the vessel or whether the trial court has jurisdiction over the action should no longer be raised anew.
Once a case has been decided one way, then another case involving exactly the same point at issue should be
decided in the same manner. 26 At any rate, our ruling in Santos v. Bayhon 27 should put to rest petitioner's doubt
as to the jurisdiction of the trial court

The general rule that no court has the power to interfere by injunction with the judgments or
decrees of another court with concurrent or coordinate jurisdiction possessing equal power to
grant injunctive relief, applies only when no third-party claimant is involved (Traders Royal Bank
v. Intermediate Appellate Court, 133 SCRA 142). When a
third-party, or a stranger to the action, asserts a claim over the property levied upon, the
claimant may vindicate his claim by an independent action in the proper civil court which may
stop the execution of the judgment on property not belonging to the judgment debtor. (emphasis
supplied)

Further, petitioner contends that he is a bona fide purchaser for value at the auction sale and that he came to
know about the acquisition by DBP only upon its filing of complaint for annulment of the execution sale. 28

The evidence on record belies such contention. Before the auction sale started, counsel for petitioner was
already aware of the cloud on the title of SCLC to the vessel as shown hereunder

Atty. Fabros, counsel for DBP:

Q: But you know for a fact that Atty. Kintanar requested for the postponement of
the auction sale in the afternoon because they were filing a third party claim or
that they will still inform DBP of that pending sale, you know that?

Atty. Positos, counsel for petitioner:

A: No, because it was Atty. Kintanar and the sheriff who were talking and I only
interfered to proceed with the sale considering there was no formal third party
claim.

Q: You want to tell the Honorable Court that during all the time you were
ignorant of the proceedings that they were making?
 A: No, sir, the conversation is only between the sheriff and
Atty. Kintanar and the sheriff informed me afterwards but I did not personally
talk to Atty. Kintanar.

xxx xxx xxx

Court:

Q: You are sure that during that proceedings of the auction sale,
Atty. Kintanar made it known to the sheriff that the vessel is already owned by
DBP?

A: That is the allegation.

Q: The question can be answered with yes or no?

A: Yes, sir.

Q: And you also heard Atty. Kintanar requesting the sheriff to postpone the
proceedings in the afternoon?

A: I was informed by the sheriff only.

Q: By the way, how far were you from Atty. Kintanar and the sheriff during the
actual proceedings?

A: Before the actual auction sale there was a conversation between Atty.
Kintanar and the sheriff, but I was already around 4 or 5 meters away.
(emphasis supplied). 29

Notwithstanding his knowledge of the prior claim of DBP, petitioner insisted that the sheriff proceeded with the
auction sale. Under the
caveat emptor rule, he assumed the risk of losing the vessel because his right to it cannot be considered
superior to that of DBP. As we held in one case, 30 an execution creditor generally acquires no higher or better
right than what the execution debtor has in the property levied upon. It follows then that if the judgment debtor
had no interest in the property, the execution creditor acquires no interest therein.

Moreover, petitioner is now estopped from denying knowledge of the prior claim of DBP to the vessel in the light
of his judicial admission. Thus, the trial court ruled

By way of factual background, defendant Tay Chun Suy through counsel, admitted all prior
proceedings pertinent to the testimony of plaintiff witness, Aurelio Rendon, in order to dispense
with his testimony, Exh. "A" to "F" and submarkings for plaintiff, were admitted referring to the
foreclosure sale of the subject vessel by the sheriff of Sultan Kudarat province; the certificate of
sale and/or corresponding notices required by law, all matters were contained in the Order of
this Court dated August 6, 1986.

In effect, defendant Tay Chun Suy, admitted the ownership of plaintiff over said vessel way back
on August 18, 1982. 31

Petitioner takes exception to the aforequoted ruling. He asserts that he never admitted that he knew of DBP's
prior acquisition at the time of the execution sale on 16 July 1986.
Petitioner never challenged this particular ruling in his appeal to the Court of Appeals. Hence, he cannot be
allowed to ventilate it now in this proceeding. Points of law, theories, issues and arguments not adequately
brought to the attention of the trial court need not be, and ordinarily will not be, considered by a reviewing Court
as they cannot be raised for the first time on appeal. 32

The evidence on record fully supports the findings of the lower courts. We therefore find no need to discuss the
other arguments raised by the petitioner to support his cause.

WHEREFORE, finding no reversible error in the decision of the court

a quo, the petition for review on certiorari is DISMISSED, with costs against petitioner.

SO ORDERED.

Cruz, Davide, Jr. and Quiason, JJ., concur.

#Footnotes

1 Annex "A", Record on Appeal, p. 9.

2 Annex "B", Ibid., p. 15.

3 Annex "C", Record on Appeal, p. 25.

4 Annex "D", Ibid., p. 50.

5 Record on Appeal, p. 3.

6 Ibid., pp. 36 and 83.

7 Ibid., p. 212.

8 Ibid., p. 163.

9 Penned by Justice Lorna Lombos-dela Fuente, concurred in by Justices Ricardo J. Francisco and Alfredo L. Benipayo,
Eleventh Division; Record on Appeal,
p. 365.

10 Record on Appeal, p. 372.

11 Penned by Justice Renato A. Fuentes, RTC, Br. 17, Davao City; Record on Appeal, p. 321.

12 Penned by then Associate Justice Jose C. Campos, Jr., now retired member of this Court, concurred in by Associate Justices
Oscar M. Herrera and Asaali S. Isnani, Fifth Division; Rollo, p. 82.

13 Rollo, p. 93.

14 Ibid., p. 19.

15 Ramos v. Court of Appeals, G.R. Nos. 64129-31, 18 November 1991, 203 SCRA 657, 668.

16 TSN, 4 September 1986, p. 26.

17 Ibid., p. 25.

18 Cf. Machinery & Engineering Supplies, Inc. v. Court of Appeals, 96 Phil. 70, 74 (1954), where the sheriffs were already
notified that the machineries and equipment were not personal properties and therefore not subject to seizure by the terms of
 the order. Nonetheless, upon directive of the president of petitioner, the sheriffs dismantled the equipment. This Court agreed
with the appellate court that while the question of whether the machineries are personal properties is one of law too technical to
decide on the spot, it would not have cost the sheriff too much time and difficulty to bring the latter to the court's attention and
have the equipment and machineries guarded, so as not to frustrate the trial court's order of seizure. But, acting upon the
directives of the president of petitioner, to seize the properties at any cost, the deputy sheriffs lent themselves as instrument to
harass and embarrass the respondent company.

19 Exh. "D" for Plaintiff DBP.

20 TSN, 16 September 1986, pp. 41-44.

21 TSN, 1 October 1986, p. 78.

22 TSN, 16 September 1986, pp. 44, 54-55.

23 Ibid., p. 53.

24 Rollo, pp. 29, 193-194.

25 Supra, p. 4.

26 Pines City Educational Center v. The National Labor Relations Commission

(Third Division), G.R. No. 96779, 10 November 1993.

27 G.R. No. 88643, 23 July 1991, 199 SCRA 525, 528.

28 Rollo, pp. 158-160.

29 TSN, 1 October 1986, pp. 76 and 80.

30 Pacheco v. Court of Appeals, L-48689, 31 August 1987, 153 SCRA 382, 388-389.

31 Record on Appeal, p. 334.

32 Santos v. Intermediate Appellate Court, G.R. No. 74243, 14 November 1986,

145 SCRA 592, 595.

FIRST DIVISION

[G.R. No. 127549. January 28, 1998]

SPOUSES CESAR and RAQUEL STA. MARIA and FLORCERFIDA STA. MARIA, petitioners,
vs. COURT OF APPEALS, and SPOUSES ARSENIO and ROSLYNN FAJARDO,
respondents.

DECISION

DAVIDE, JR., J.:

This is an appeal under Rule 45 of the Rules of Court from the decision [1] of 18 December
1996 of the Court of Appeals in CA-G.R. CV No. 48473, which affirmed with modification the
30 June 1994 Decision[2] of Branch 19 of the Regional Trial Court of Bulacan in Civil Case No.
77-M-92 granting the private respondents a right of way through the property of the
petitioners.

The antecedent facts, as summarized by the Court of Appeals, are as follows:

Plaintiff spouses Arsenio and Roslynn Fajardo are the registered owners of a piece of land,
Lot No. 124 of the Obando Cadastre, containing an area of 1,043 square meters, located at
Paco, Obando, Bulacan, and covered by Transfer Certificate Title (TCT) No. T-147729 (M) of
the Registry of Deeds of Meycauayan, Bulacan (Exhibit B, p. 153 Orig. Rec.). They acquired
said lot under a Deed of Absolute Sale dated February 6, 1992 executed by the vendors
Pedro M. Sanchez, et al. (Annex A, Complaint; pp. 7-8 ibid.).

Plaintiffs aforesaid Lot 124 is surrounded by Lot 1 (Psd 45412), a fishpond (Exh. C-5; p. 154,
ibid.), on the northeast portion thereof; by Lot 126, owned by Florentino Cruz, on the
southeast portion; by Lot 6-a and a portion of Lot 6-b (both Psd-297786) owned respectively
by Spouses Cesar and Raquel Sta. Maria and Florcerfida Sta. Maria (Exhs. C-2 and C-3,
ibid.), on the southwest; and by Lot 122, owned by the Jacinto family, on the northwest.

On February 17, 1992, plaintiff spouses Fajardo filed a complaint against defendants Cesar
and Raquel Sta. Maria or Florcerfida Sta. Maria for the establishment of an easement of right
of way. Plaintiffs alleged that their lot, Lot 124, is surrounded by properties belonging to other
persons, including those of the defendants; that since plaintiffs have no adequate outlet to the
provincial road, an easement of a right of way passing through either of the alternative
defendants properties which are directly abutting the provincial road would be plaintiffs only
convenient, direct and shortest access to and from the provincial road; that plaintiffs
predecessors-in-interest have been passing through the properties of defendants in going to
and from their lot; that defendants mother even promised plaintiffs predecessors-in-interest to
grant the latter an easement of right of way as she acknowledged the absence of an access
from their property to the road; and that alternative defendants, despite plaintiffs request for a
right of way and referral of the dispute to the barangay officials, refused to grant them an
easement. Thus, plaintiffs prayed that an easement of right of way on the lots of defendants
be established in their favor. They also prayed for damages, attorneys fees and costs of suit.

Defendants, instead of filing an answer, filed a motion to dismiss (pp. 41-45, ibid.) on the
ground that the lower court has no jurisdiction to hear the case since plaintiffs failed to refer
the matter to the barangay lupon in accordance with Presidential Decree No. 1508. The lower
court, however, in its Order dated May 18, 1992, denied said motion on the premise that there
was substantial compliance with the law.

On May 25, 1992, defendants filed a Notice of Appeal to the Supreme Court of the questioned
order of the lower court denying their motion to dismiss, under Rule 45 of the Rules of Court
(p. 54, ibid.). On June 24, 1992, the lower court denied the notice of appeal for lack of merit
(p. 86, ibid.).

In the meantime, defendants filed a petition for review on certiorari of the lower courts Order
dated May 18, 1992 (pp. 64-84, ibid.). In an Order dated July 8, 1992, the Third Division of the
Supreme Court denied said petition for failure to comply with Revised Circular Nos. 1-88 and
Circular No. 28-01 (p. 97, ibid.). Defendants motion for reconsideration was likewise denied
with finality on July 20, 1992 (p. 96, ibid.).

Consequently, defendants filed their answer to the court below where they alleged that the
granting of an easement in favor of plaintiffs would cause them great damage and
inconvenience; and that there is another access route from plaintiffs lot to the main road
through the property of Florentino Cruz which was likewise abutting the provincial road and
was being offered for sale. By way of counterclaim, defendants prayed for damages and
attorneys fees.

The parties not having settled their dispute during the pre-trial (p.120, Orig. Record), the court
directed that an ocular inspection be conducted of the subject property, designating the
branch clerk of court as its commissioner. In time, an Ocular Inspection Report dated
December 3, 1992 (Exhs. J and J-1) was submitted. After trial on the merits, the lower court
rendered the assailed decision granting plaintiffs prayer for an easement of right of way on
defendants properties.[3]

The trial court found that based on the Ocular Inspection Report there was no other way
through which the private respondents could establish a right of way in order to reach the
provincial road except by traversing directly the property of the petitioners. It further found that
(a) no significant structure, save for a wall or fence about three feet high, would be adversely
affected; (b) there was sufficient vacant space of approximately 11 meters between petitioners
houses; and (c) petitioners property could provide the shortest route from the provincial road
to the private respondents property. Consequently, the trial court granted the easement
prayed for by the private respondents in a decision dated 30 June 1994, [4] whose decretal
portion reads as follows:

WHEREFORE, premises considered the Court orders that a right-of-way be constructed on

the defendants property covered by TCT No. 0-6244 of about 75 sq. meters, 25 sq. meters
shall be taken from the lot of Florcerfida Sta. Maria and 50 sq. meters from the property of
Cesar Sta. Maria to be established along lines 1-2 of lot 6-c and along lines 3-4 of lot 6-b and
to indemnify the owners thereof in the total amount of P3, 750.00 (P1, 250.00 goes to
Florcerfida Sta. Maria and P2,500.00 to Cesar Sta. Maria) and to reconstruct the fence to be
destroyed in the manner it was at the time of the filing of this action.

The petitioners seasonably appealed from the aforementioned decision to the Court of
Appeals, which docketed the case as CA-G.R. CV No. 48473.

The Court of Appeals agreed with the trial court that the private respondents had sufficiently
established the existence of the four requisites for compulsory easement of right of way on
petitioners property, to wit: (1) private respondents property was, as revealed by the Ocular
Inspection Report, surrounded by other immovables owned by different individuals and was
without an adequate outlet to a public highway; (2) the isolation of private respondents
property was not due to their own acts, as it was already surrounded by other immovables
when they purchased it; (3) petitioners property would provide the shortest way from private
respondents property to the provincial road, and this way would cause the least prejudice
because no significant structure would be injured thereby; and (4) the private respondents
were willing to pay the corresponding damages provided for by law if the right of way would
be granted.

Accordingly, in its decision[5] of 18 December 1996, the Court of Appeals affirmed the trial
courts decision, but modified the property valuation by increasing it from P50 to P2,000 per
square meter.
The petitioners forthwith filed this petition for review on certiorari based on the following
assignment of errors:

I.

WHETHER OR NOT A COMPULSORY EASEMENT OF RIGHT OF WAY CAN BE

ESTABLISHED IN THE LIGHT OF THE DOCTRINE LAID DOWN BY THE HON.
SUPREME COURT IN COSTABELLA CORPORATION VS. COURT OF APPEALS, 193
SCRA 333, 341 WHICH HELD THAT [FOR] THE FAILURE OF PRIVATE
RESPONDENTS TO SHOW THAT THE ISOLATION OF THEIR PROPERTY WAS NOT
DUE TO THEIR PERSONAL OR THEIR PREDECESSORS-IN-INTERESTS OWN ACTS,
THEY ARE NOT ENTITLED TO A COMPULSORY EASEMENT OF RIGHT OF WAY.

II.

WHETHER OR NOT A COMPULSORY RIGHT OF WAY CAN BE GRANTED TO

PRIVATE RESPONDENTS WHO HAVE TWO OTHER EXISTING PASSAGE WAYS
OTHER THAN THAT OF PETITIONERS AND AN ALTERNATIVE VACANT LOT
FRONTING THE PROVINCIAL ROAD ALSO ADJACENT TO PRIVATE RESPONDENTS
PROPERTY, WHICH CAN BE USED IN GOING TO AND FROM PRIVATE
RESPONDENTS PROPERTY.

III.

RESPONDENT HON. COURT OF APPEALS GRAVELY ERRED IN MAKING A

PORTION OF ITS STATEMENT OF FACTS FROM ALLEGATIONS IN THE COMPLAINT
AND NOT FROM THE EVIDENCE ON RECORD.

IV.

RESPONDENT HON. COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT

PRIVATE RESPONDENTS HAVE NO ADEQUATE OUTLET TO A PUBLIC HIGHWAY
WHICH INFERENCE DRAWN FROM FACTS WAS MANIFESTLY MISTAKEN.[6]

The first, second, and fourth assigned errors involve questions of fact. Settled is the rule that
the jurisdiction of this Court in cases brought before it from the Court of Appeals via Rule 45
of the Rules of Court is limited to reviewing errors of law. Findings of fact of the latter are
conclusive, except in the following instances: (1) when the findings are grounded entirely on
speculation, surmises, or conjectures; (2) when the inference made is manifestly mistaken,
absurd, or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is
based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when in
making its findings the Court of Appeals went beyond the issues of the case, or its findings
are contrary to the admissions of both the appellant and the appellee; (7) when the findings
are contrary to those of the trial court; (8) when the findings are conclusions without citation of
specific evidence on which they are based; (9) when the facts set forth in the petition as well
as in the petitioners main and reply briefs are not disputed by the respondent; and (10) when
the findings of fact are premised on the supposed absence of evidence and contradicted by
the evidence on record.[7]
A perusal of the pleadings and the assailed decision of the Court of Appeals, as well as of the
decision of the trial court, yields no ground for the application of any of the foregoing
exceptions. All told, the findings of fact of both courts satisfied the following requirements for
an estate to be entitled to a compulsory servitude of right of way under the Civil Code, to wit:

1. the dominant estate is surrounded by other immovables and has no adequate

outlet to a public highway (Art. 649, par. 1);

2. there is payment of proper indemnity (Art. 649, par. 1);

3. the isolation is not due to the acts of the proprietor of the dominant estate (Art. 649,
last par.); and

4. the right of way claimed is at the point least prejudicial to the servient estate; and
insofar as consistent with this rule, where the distance from the dominant estate to a
public highway may be the shortest (Art. 650).[8]

As to such requisites, the Court of Appeals made the following disquisitions:

Anent the first requisite, there is no dispute that the plaintiffs-appellees property is surrounded
by other immovables owned by different individuals. The ocular inspection report submitted to
the lower court reveals that:

The property of the plaintiffs, spouses Arsenio and Roslynn Fajardo, is completely surrounded
with adobe fence without any point of egress and ingress to the national road. Said plaintiffs
property containing an area of 1,043 square meters and covered by OCT No. 0-6244 of the
Registry of Deeds of Bulacan was situated directly behind defendants property which abuts
the national road. Defendants, spouses Cesar and Racquel Sta. Maria, are the absolute
owners of the parcel of land with an area of 537 square meters and embraced under TCT No.
T-37.763(M) situated on the left side abutting the national road with their house thereon made
of wood and hollow blocks, while defendant Florcerfida Sta. Maria is the absolute owner of a
parcel of land with a similar area of 537 square meters and covered by TCT No. T-37.762(M)
situated on the right side and likewise abutting the national road with an impressive house
thereon of modern vintage made of strong materials. As depicted in the rough sketch hereto
attached, plaintiffs have absolutely no means of ingress and egress to their property as the
same is completely isolated by properties owned by other persons. On the left side is the
property of Florentino Cruz, on the right side is the property reportedly owned by the Jacintos;
and on the front portion are properties owned by defendants. x x x

(Ocular Inspection Report, p. 135, Orig. Rec.)

Plaintiffs-appellees property is likewise without adequate outlet to a public highway. The

existing passage way for people (daang tao) at the back of plaintiffs-appellees property
leading to the provincial road (TSN, May 17, 1993, p. 12) cannot be considered an adequate
outlet for purposes of establishing an easement. Article 651 of the Code provides that (t)he
width of the easement of right of way shall be that which is sufficient for the needs of the
dominant estate, and may accordingly be changed from time to time. Thus in the case of
Larracas vs. Del Rio (37 Official Gazette 287), this Court had occasion to rule that it is not
necessary for a person, like his neighbors, to content himself with a footpath and deny himself
the use of an automobile. So in an age when motor cars are a vital necessity, the dominant
proprietor has a right to demand a driveway for his automobile, and not a mere lane or
pathway (Cited in Tolentino, ibid., p. 391).

The second requisite for the establishment of an easement of right way, i.e., payment of
indemnity, is likewise present in this case. Plaintiff-appellee spouse Roslynn Fajardo testified
on direct examination that they are willing to pay the corresponding damages provided for by
law if granted the right of way (TSN, November 5, 1992, p. 11).

The third requisite is that the isolation of plaintiffs-appellees property should not have been
due to their own acts. In the case under consideration, the isolation of their lot is not due to
plaintiffs acts. The property they purchased was already surrounded by other immovables
leaving them no adequate ingress or egress to a public highway.

Going now to the fourth requisite of least prejudice and shortest distance, We agree with the
lower court that this twin elements have been complied with in establishing the easement of
right of way on defendants-appellants properties.

It has been commented upon that where there are several tenements surrounding the
dominant estate, and the easement may be established on any of them, the one where the
way is shortest and will cause the least damage should be chosen. But if these two
circumstances do not concur in a single tenement, the way which will cause the least damage
should be used, even if it will not be the shortest. And if the conditions of the various
tenements are the same, all the adjoining owners should be cited and experts utilized to
determine where the easement shall be established (Tolentino, ibid., pp. 108-109, citing
Casals Colldecarrera).

In the case at bar, the ocular inspection disclosed that there are three options open to the
plaintiffs-appellees as a route to reach the national road, to wit:

(1) To traverse directly through defendants property which is the shortest route of
approximately 20 to 25 meters away from the national road;

(2) To purchase a right of way from the adjoining property of Florentino Cruz on the left side of
their property; and

(3) To negotiate with Jacinto family on the right side of their property.

In all instances, no significant structures would be adversely affected. There is sufficient

vacant space between defendants houses of approximately 11 meters. The distance of
defendant Florcerfidas house with the adjoining adobe wall separating that of the property of
defendants Cesar and Racquel Sta. Maria is about 4 meters, while the space between the
adobe wall and that of the latters house is about 7 meters or a total of 11 meters vacant space
for purposes of a right of way. On the other hand, plaintiffs may negotiate with a right of way
with Florentino Cruz on the left side of their property although the same is quite circuitous.
Lastly, the option through the property of the Jacinto on the right side is very circuitous and
longer. The route involves a total of about 50 yards as it has to go straight to the right of about
35 yards and turn left of about another 15 yards before reaching the common right of way.

(Ocular Inspection report, pp. 135-136, ibis.)

Among the three (3) possible servient estates, it is clear that defendants-appellants property
would afford the shortest distance from plaintiffs-appellees property to the provincial road.
Moreover, it is the least prejudicial since as found by the lower court, (i)t appears that there
would be no significant structures to be injured in the defendants property and the right-of-
way to be constructed thereon would be the shortest of all the alternative routes pointed to by
the defendants (p. 4, RTC, Decision; p. 223, ibid.).

Petitioners reliance on Costabella Corporation v. Court of Appeals [9] to support their first
assigned error is misplaced. In said case we reversed the decision of the Court of Appeals
granting a compulsory easement of a right of way to the private respondents therein because
of the absence of any showing that the private respondents had established the existence of
the four requisites mandated by law. As to the third requisite, we explicitly pointed out; thus:
Neither have the private respondents been able to show that the isolation of their property
was not due to their personal or their predecessors-in-interest's own acts. In the instant case,
the Court of Appeals have found the existence of the requisites. The petitioners, however,
insist that private respondents predecessors-in-interest have, through their own acts of
constructing concrete fences at the back and on the right side of the property, isolated their
property from the public highway. The contention does not impress because even without the
fences private respondents property remains landlocked by neighboring estates belonging to
different owners.

Under the second and fourth assigned errors, the petitioners try to convince us that there are
two other existing passage ways over the property of Cruz and over that of Jacinto, as well as
a daang tao, for private respondents use. Our examination of the records yields otherwise.
Said lots of Cruz and Jacinto do not have existing passage ways for the private respondents
to use. Moreover, the Ocular Inspection Report [10] reveals that the suggested alternative ways
through Cruzs or Jacintos properties are longer and circuitous than that through petitioners
property. This is also clear from the Sketch Plan [11] submitted by the private respondents
wherein it is readily seen that the lots of Cruz and Jacinto are only adjacent to that of private
respondents unlike that of petitioners which is directly in front of private respondents property
in relation to the public highway.

Under Article 650 of the Civil Code, the easement of right of way shall be established at the
point least prejudicial to the servient estate, and, insofar as consistent with this rule, where
the distance from the dominant estate to a public highway may be the shortest. Where there
are several tenements surrounding the dominant estate, and the easement may be
established on any of them, the one where the way is shortest and will cause the least
damage should be chosen.[12] The conditions of least damage and shortest distance are both
established in one tenement -- petitioners property.

As to the daang tao at the back of private respondents property, it must be stressed that
under Article 651 the width of the easement of right of way shall be that which is sufficient for
the needs of the dominant estate, and may accordingly be changed from time to time.
Therefore, the needs of the dominant estate determine the width of the easement. [13] The
needs of private respondents property could hardly be served by this daang tao located at the
back and which is bordered by a fishpond.[14]

The third assigned error is without basis and is nothing but a misreading of the challenged
decision. The Court of Appeals did not declare as established facts the allegations of the
complaint referred to by the petitioner. It merely made a brief summary of what were alleged
in the complaint as part of its narration of the antecedents of the case on appeal.

WHEREFORE, the instant petition for review is DENIED and the challenged decision of the
Court of Appeals is AFFIRMED in toto.

Costs against petitioners.

SO ORDERED.

Bellosillo, Vitug, and Kapunan, JJ., concur.

FIRST DIVISION

[G.R. NO. 128781. August 6, 2002]

TERESITA N. DE LEON, ZENAIDA C. NICOLAS and the HEIRS OF ANTONIO NICOLAS,

petitioners, vs. HON. COURT OF APPEALS, HON. PABLO P. INVENTOR and RAMON NICOLAS,
respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Before us is a petition for review on certiorari under Rule 45 of the Rules of Court which prays that the
Decision dated February 28, 1997 and the Resolution dated April 3, 1997 issued by the Court of
Appeals in CA-G.R. SP No. 42958,[1] be set aside; and, that another judgment be entered ordering the
Presiding Judge of Branch 123 of the Regional Trial Court of Caloocan City to give due course to
petitioners notice of appeal, to approve their record on appeal and to elevate the records of Sp. Proc.
No. C-1679 to respondent appellate court for further proceedings.

The factual background:

Herein petitioner Teresita N. de Leon was appointed administratrix of the estate of Rafael C. Nicolas in
Sp. Proc. No. C-1679, entitled, In the Matter of the Intestate Estate of Rafael C. Nicolas. Said case was
subsequently consolidated with Sp. Proc No. C-1810[2] and Civil Case No. C-17407.[3] Deceased
spouses Rafael and Salud Nicolas were the parents of petitioner Teresita N. de Leon, Estrellita N.
Vizconde, Antonio Nicolas (deceased husband of petitioner Zenaida Nicolas and predecessor of the
petitioners Heirs of Antonio Nicolas), Ramon Nicolas and Roberto Nicolas.

On September 19, 1994, private respondent Ramon G. Nicolas, an oppositorapplicant in the intestate
proceedings, filed a Motion for Collation, claiming that deceased Rafael Nicolas, during his lifetime,
had given the following real properties to his children by gratuitous title and that administratrix-
petitioner Teresita failed to include the same in the inventory of the estate of the decedent:

1. Title No. T-36734 located at Polo, Bulacan with an area of 14,119 sq. m. distributed as
follows:

1.1 10,110 sq. m. given to daughter Estrellita N. Visconde

1.2 4,009 sq. m. given to son Antonio Nicolas

2. Title No. T-40333 located at Polo, Bulacan with an area of 1,000 sq. m. given to son
Antonio Nicolas

3. Title No. T-36989 located at Polo, Bulacan with an area of 4,000 sq. m. given to daughter
Teresita N. de Leon (herein petitioner)

4. Title No. T-36987 located at Polo, Bulacan with an area of 283 sq. m. given to son Antonio
Nicolas

5. T-33658 located at Polo, Bulacan with an area of 6,109 sq. m. given to daughter Teresita N.
de Leon

6. T-68554 located at Caloocan City with an area of 690 sq. m. given to son Ramon
(Oppositor-Applicant herein)

7. T-10907 located at Caloocan City with an area of 310 sq. m. given to son Ramon but was
somehow transferred to Antonio Nicolas, and the property is now titled in the name of the
latters widow, Zenaida Carlos Nicolas.

xxx xxx x x x.[4]

On September 27, 1994, the RTC issued an Order directing Ramon to submit pertinent documents
relative to the transfer of the properties from the registered owners during their lifetime for proper
determination of the court if such properties should be collated, and set it for hearing with notice to the
present registered owners to show cause why their properties may not be included in the collation of
properties.[5]

On October 10, 1994, respondent Ramon filed an Amended Motion for Collation specifying the
properties to be collated and attaching to said motion, the documents in support thereof, to wit:

3. A more complete list of the properties to be collated is as follows:

1. Title No. T-36734 located at Polo, Bulacan with an area of 14,119 sq. m., xerox copy hereto attached
as Annex A, distributed as follows:

1.1 10,110 sq. m. given to daughter Estrellita N. Visconde, under TCT No. V-554 of Valenzuela
Bulacan (Annex B), and later sold by Estrellita to Amelia Lim Sy for P3,405,612.00 and the Deed of
Sale hereto attached as Annex B-1;

1.2 4,009 sq. m. given to son Antonio Nicolas, xerox copy hereto attached as Annex C;

2. Two lots, covered by TCT No. T-36989 located at Polo, Bulacan with an area of 4,000 sq. m. and
TCT No. T-33658 located at Polo, Bulacan with an area of 6,109 sq. m. given to daughter Teresita N.
de Leon by a Deed of Sale, xerox copies are hereto attached as Annex D, D-1 and D-2;

The 4,000 sq. m. lot was sold by Petitioner Teresita for the amount of P1,888,000.00, xerox copy of the
Deed of Sale is hereto attached as Annex D-3;

4. Son Antonio received additional properties under a Deed of Sale, hereto attached as Annex E, which
are those covered by TCT No. T-36987 located at Polo, Bulacan with an area of 283 sq. m.; TCT No. T-
40333 located at Polo, Bulacan with an area of 1,000 sq. m. and TCT No. T-10907 located at Caloocan
City with an area of 310 sq. m., xerox copies hereto attached as Annexes E-1, E-2 and E-3;

The lot with an area of 310 sq. m. is supposedly earmarked for Oppositor-applicant Ramon but was
somehow included in the Deed of Sale to son Antonio, and the property is now titled in the name of the
latters widow, Zenaida Carlos Nicolas;

5. TCT No. T-68554 located at Caloocan City with an area of 690 sq. m. where the ancestral home is
presently located;

6. Son Antonio received another property with an area of 1,876 sq. m. and sold for P850,000.00, hereto
attached as Annex F;

7. Son Antonio received another property with an area of 1,501 sq. m. and sold for P200,000.00, hereto
attached as Annex G;

xxx xxx x x x.[6]

A comparison with the original motion for collation reveals that the amended motion refers to the same
real properties enumerated in the original except Nos. 6 and 7 above which are not found in the original
motion.

On November 11, 1994, the RTC issued an Order, to wit:

Acting on the Amended Motion for Collation filed by oppositor-applicant Ramon G. Nicolas and the
comment thereto filed by petitioner-administratrix, the Court finds the following properties to be
collated to the estate properties under present administration, to wit:
(1). 4,009 sq. m. given to son Antonio Nicolas described in paragraph 1.2 of the Amended Motion For
Collation, marked as Annex C; (the xerox copy of the transfer certificate of title in the name of Antonio
Nicolas did not state the number and the technical description of the property. The administratrix
should get hold of a certified copy of the title of Antonio Nicolas about subject property;

(2). Two lots, covered by TCT No. T-36989 located at Polo, Bulacan with an area of 4,000 sq. m. and
TCT No. T-33658 located at Polo, Bulacan with an area of 6,109 sq. m. given to daughter Teresita N.
de Leon by a Deed of Sale;

(3). The property covered by TCT No. T-36987 located at Polo, Bulacan, with an area of 283 sq. m.; the
property covered by TCT No. T-40333 located at Polo, Bulacan, with an area of 1,000 sq. m. and
another property covered by TCT No. T-10907 located at Caloocan City with an area of 310 sq. m.
xerox copies of which are attached to the Amended Motion For Collation, marked as Annexes E1, E-2
and E-3;

(4). The lot with an area of 310 sq. m. given to son Antonio Nicolas which property is now titled in the
name of the latters widow, Zenaida Carlos Nicolas.

Accordingly, the Administratrix is hereby ordered to include the foregoing properties which were
received from the decedent for collation in the instant probate proceedings.

SO ORDERED.[7]

We note that only those lots described under paragraphs 3.1.2, 3.2 and 4 of the Amended Motion for
Collation were ordered included for collation.

On November 18, 1994, petitioner Teresita N. de Leon filed a Motion for Reconsideration alleging that
the properties subject of the Order were already titled in their names years ago[8] and that titles may not
be collaterally attacked in a motion for collation. On February 23, 1995, the RTC issued an Order
denying said motion, ruling that it is within the jurisdiction of the court to determine whether titled
properties should be collated,[9] citing Section 2, Rule 90 of the Rules of Court which provides that the
final order of the court concerning questions as to advancements made shall be binding on the person
raising the question and on the heir.

Petitioner Teresita N. de Leon filed a Motion for Reconsideration of the Order dated February 23,
1995[10] which respondent opposed.[11]

On July 18, 1995, the RTC issued an Order, pertinent portions of which read:

x x x Foremost to be resolved is the issue of collation of the properties of the deceased Rafael Nicolas
which were disposed by the latter long before his death. The oppositor-applicant Ramon Nicolas should
prove to the satisfaction of the Court whether the properties disposed of by the late Rafael Nicolas
before the latters death was gratuitous or for valuable consideration. The Court believes that he or she
who asserts should prove whether the disposition of the properties was gratuitously made or for
valuable consideration.

The Court has already set for hearing on July 21, 1995, at 8:30 a.m., the reception and/or presentation
of evidence in the issue of collated properties disposed before the death of Rafael Nicolas.[12]
On November 4, 1996, the RTC removed petitioner from her position as administratrix on ground of
conflict of interest considering her claim that she paid valuable consideration for the subject properties
acquired by her from their deceased father and therefore the same should not be included in the
collation;[13] and, ordered the hearing on the collation of properties covered by TCT No. T-V-1211 and
T-V-1210 only.[14]

On November 28, 1996, acting on the impression that the collation of the real properties enumerated in
the Order dated November 11, 1994 is maintained by the RTC, petitioner Teresita N. de Leon filed a
Motion for Reconsideration praying that her appointment as administratrix be maintained; and that the
properties covered by TCT Nos. T-36989, T-33658, T-36987, T-40333, T-10907 and a portion of TCT
No. T-13206 described as Lot 4-A with 4,009 square meters be declared and decreed as the exclusive
properties of the registered owners mentioned therein and not subject to collation.[15]

The RTC denied said motion in its Order dated December 23, 1996.[16]

Petitioners Teresita N. de Leon, Zenaida Nicolas (the surviving spouse of Antonio Nicolas) and the
Heirs of Antonio Nicolas filed with the Court of Appeals a petition for certiorari, prohibition and
mandamus with prayer for a temporary restraining order and writ of preliminary injunction claiming
that:

"I

RESPONDENT JUDGE HAS ACTED IN EXCESS OF HIS JURISDICTION AND WITH GRAVE
ABUSE OF DISCRETION WHEN WITHOUT GIVING PETITIONERS OPPORTUNITY TO
VENTILATE THEIR APPEAL HE INSISTED ON HEARING THE MATTERS ON THE
APPOINTMENT OF A REGULAR ADMINISTRATOR AND COLLATION ON DECEMBER 24,
1996 AND RESETTING ITS CONTINUATION TO JANUARY 21 and 28, 1997 INSPITE OF THE
PENDENCY OF THE NOTICE OF APPEAL AND/OR RE-AFFIRMATION OF THE NOTICE OF
APPEAL FROM WHICH ACTS THERE IS NO APPEAL NOR ANY PLAIN, SPEEDY AND
ADEQUATE REMEDY IN THE ORDINARY COURSE OF LAW.

II

RESPONDENT JUDGE ACTED WITH GRAVE ABUSE OF DISCRETION WHEN HE DID NOT
INCLUDE IN HIS ORDER-ANNEX J THE HEARING ON THE FINAL DETERMINATION OF
TCT NOS. T-36734, T-36989, T-33658, T-36987, T-40333 and T-10907 (WHETHER THEY ARE
STILL PART OF THE ESTATE OR SHOULD BE EXCLUDED FROM THE INVENTORY/ESTATE)
THEREBY ASSUMING WITHOUT ANY BASIS THAT THESE PROPERTIES TO BE STILL PART
OF THE ESTATE OF RAFAEL NICOLAS WHEN THEY ARE NOT BECAUSE THEY HAVE BEEN
SOLD WAY BACK IN 1979 FOR VALUABLE CONSIDERATIONS TO PETITIONER TERESITA
N. DE LEON AND ANTONIO NICOLAS HUSBAND OF PETITIONER ZENAIDA NICOLAS. [17]

After private respondent Ramon had filed his comment, and petitioners, their reply, and after hearing
the oral arguments of the parties, the Special Fourth Division of the Court of Appeals found the petition
devoid of merit, ruling that the Order dated November 11, 1994 directing the inclusion of the properties
therein enumerated in the estate of the deceased Rafael Nicolas had already become final for failure of
petitioners to appeal from the order of collation; that the appeal of the petitioner from the Orders dated
November 4, 1996 and December 3, 1996 removing petitioner as administratrix is timely appealed;
and, observing that the notice of appeal and record on appeal appear to be unacted upon by the RTC,
the appellate court resolved:

WHEREFORE, while finding no grave abuse of discretion on the part of respondent Judge, he is
hereby ORDERED to act on petitioners appeal on the matter of the removal of petitioner as
administratrix.

SO ORDERED.[18]

Hence, herein petition anchored on the following assignments of error:

FIRST ASSIGNMENT OF ERROR

RESPONDENT HONORABLE COURT ERRED WHEN IT DECLARED IN THE QUESTIONED

DECISION THAT THE ORDER OF THE COURT A QUO DATED NOVEMBER 11, 1994 WAS
FINAL.

SECOND ASSIGNMENT OF ERROR

RESPONDENT HONORABLE COURT ERRED WHEN IT DECLARED IN THE QUESTIONED

RESOLUTION THAT THERE WAS NO COGENT OR COMPELLING REASON TO DISTURB
THE QUESTIONED DECISION.[19]

Petitioners claim that: private respondent never presented any document to prove that the properties
transferred by their deceased parents to petitioners are by gratuitous title; private respondent never
notified petitioner of any hearing on said documents to give them opportunity to show cause why their
properties should not be collated; the assailed Order dated November 11, 1994 is arbitrary, capricious,
whimsical, confiscatory, depriving them of due process; the said order is interlocutory in nature and
therefore non-appealable; the properties acquired by petitioner Teresita N. de Leon and her deceased
brother Antonio Nicolas, married to petitioner Zenaida C. Nicolas and their children, were sold to them
as evidenced by public documents; and, the properties were already titled in their respective names or
sold to third persons.

Private respondent contends that: due process has been afforded the petitioners when the RTC resolved
the issue of collation of the subject properties after hearing; petitioner deliberately omitted certain
material facts in the petition to mislead the Court because petitioners were actually given at least three
(3) times the opportunity to ventilate and oppose the issue of collation; as stated by the appellate court
in the Resolution promulgated on February 10, 1997, both parties affirmed that the RTC had proceeded
to conduct hearings on January 21 and 28, 1997 as originally scheduled; presentation of evidence had
been terminated and the twin issues of the appointment of a new administratrix and the collation of two
(2) properties covered by TCT No. T-V-1210 and T-V-1211 were already submitted for resolution to the
court below;[20] subject properties are collatable under Articles 1601 and 1071 of the Civil Code and
Section 2 of Rule 90 of the Rules of Court and the ruling in Guinguing v. Abuton and Abuton, 48 Phil.
144; petitioner failed to present evidence that there was valuable consideration for these properties and
failed to rebut the evidence that petitioners do not have the financial capability to pay for these
properties as evidenced by the testimony of credible witnesses who are relatives of spouses decedents.

We find the petition partly meritorious.

Contrary to the finding of the Court of Appeals that the Order of November 11, 1994 had become final
for failure of petitioners to appeal therefrom in due time, we hold that said Order is interlocutory in
nature. Our pronouncement in Garcia v. Garcia supports this ruling:

The court which acquires jurisdiction over the properties of a deceased person through the filing of the
corresponding proceedings, has supervision and control over the said properties, and under the said
power, it is its inherent duty to see that the inventory submitted by the administrator appointed by it
contains all the properties, rights and credits which the law requires the administrator to set out in his
inventory. In compliance with this duty the court has also inherent power to determine what properties,
rights and credits of the deceased should be included in or excluded from the inventory. Should an heir
or person interested in the properties of a deceased person duly call the courts attention to the
fact that certain properties, rights or credits have been left out in the inventory, it is likewise the
courts duty to hear the observations, with power to determine if such observations should be
attended to or not and if the properties referred to therein belong prima facie to the intestate, but
no such determination is final and ultimate in nature as to the ownership of the said properties.
[21] (Emphasis supplied)

A probate court, whether in a testate or intestate proceeding,[22] can only pass upon questions of title
provisionally.[23] The rationale therefor and the proper recourse of the aggrieved party are expounded in
Jimenez v. Court of Appeals:

The patent reason is the probate courts limited jurisdiction and the principle that questions of title or
ownership, which result in inclusion or exclusion from the inventory of the property, can only be settled
in a separate action.

All that the said court could do as regards said properties is determine whether they should or should
not be included in the inventory or list of properties to be administered by the administrator. If there is a
dispute as to the ownership, then the opposing parties and the administrator have to resort to an
ordinary action for a final determination of the conflicting claims of title because the probate court
cannot do so.[24]

Further, In Sanchez v. Court of Appeals, we held:

[A] probate court or one in charge of proceedings whether testate or intestate cannot adjudicate or
determine title to properties claimed to be a part of the estate and which are claimed to belong to
outside parties. All that the said court could do as regards said properties is to determine whether they
should or should not be included in the inventory or list of properties to be administered by the
administrator. If there is no dispute, well and good, but if there is, then the parties, the administrator,
and the opposing parties have to resort to an ordinary action for a final determination of the conflicting
claims of title because the probate court cannot do so.[25]

Guided by the above jurisprudence, it is clear that the Court of Appeals committed an error in
considering the assailed Order dated November 11, 1994 as final or binding upon the heirs or third
persons who dispute the inclusion of certain properties in the intestate estate of the deceased Rafael
Nicolas. Under the foregoing rulings of the Court, any aggrieved party, or a third person for that matter,
may bring an ordinary action for a final determination of the conflicting claims.

Private respondents reliance on Section 2, Rule 90 of the Rules of Court, to wit:

SEC. 2. Questions as to advancement to be determined. Questions as to advancement made, or alleged
to have been made, by the deceased to any heir may be heard and determined by the court having
jurisdiction of the estate proceedings; and the final order of the court thereon shall be binding on the
person raising the question and on the heir.

in support of his claim that the assailed Order is a final order and therefore appealable and that due to
petitioners failure to appeal in due time, they are now bound by said Order, is not feasible.

What seems to be a conflict between the above-quoted Rule and the aforediscussed jurisprudence that
the Order in question is an interlocutory and not a final order is more apparent than real. This is
because the questioned Order was erroneously referred to as an order of collation both by the RTC and
the appellate court. For all intents and purposes, said Order is a mere order including the subject
properties in the inventory of the estate of the decedent.

The Court held in Valero Vda. de Rodriguez v. Court of Appeals[26] that the order of exclusion (or
inclusion) is not a final order; that it is interlocutory in the sense that it did not settle once and for all
the title to the subject lots; that the prevailing rule is that for the purpose of determining whether a
certain property should or should not be included in the inventory, the probate court may pass upon the
title thereto but such determination is not conclusive and is subject to the final decision in a separate
action regarding ownership which may be instituted by the parties.

In the Rodriguez case, the Court distinguished between an order of collation and an order of exclusion
from or inclusion in the estates inventory, thus:

We hold further that the dictum of the Court of Appeals and the probate court that the two disputed lots
are not subject to collation was a supererogation and was not necessary to the disposition of the case
which merely involved the issue of inclusion in, or exclusion from, the inventory of the testators estate.
The issue of collation was not yet justiciable at that early stage of the testate proceeding. It is not
necessary to mention in the order of exclusion the controversial matter of collation.

Whether collation may exist with respect to the two lots and whether Mrs. Rustias Torrens titles thereto
are indefeasible are matters that may be raised later or may not be raised at all. How those issues should
be resolved, if and when they are raised, need not be touched upon in the adjudication of this appeal.

The intestate and testate proceedings for the settlement of the estates of the deceased Valero spouses
were consolidated, as ordered by the lower court on November 21, 1974, so that the conjugal estate of
the deceased spouses may be properly liquidated, as contemplated in section 2, Rule 73 of the Rules of
Court and Act No. 3176.

We have examined the expedientes of the two cases. We found that the proceedings have not yet
reached the stage when the question of collation or advancement to an heir may be raised and decided.
The numerous debts of the decedents are still being paid. The net remainder (remanente liquido) of
their conjugal estate has not yet been determined. On the other hand, up to this time, no separate action
has been brought by the appellants to nullify Mrs. Rustias Torrens titles to the disputed lots or to show
that the sale was in reality a donation.

In this appeal, it is not proper to pass upon the question of collation and to decide whether Mrs. Rustias
titles to the disputed lots are questionable. The proceedings below have not reached the stage of
partition and distribution when the legitimes of the compulsory heirs have to be determined.[27]

In the light of the foregoing, Section 2, Rule 90 should be interpreted in the context of Section 1 of the
same Rule, to wit:

Section 1. When order for distribution of residue made. When the debts, funeral charges, and expenses
of administration, the allowance to the widow, and inheritance tax, if any, chargeable to the estate in
accordance with law, have been paid, the court, on the application of the executor or administrator, or
of a person interested in the estate, and after hearing upon notice, shall assign the residue of the estate
to the persons entitled to the same, naming them and the proportions, or parts, to which each is entitled,
and such person may demand and recover their respective shares from the executor or administrator, or
any other person having the same in his possession. If there is a controversy before the court as to who
are the lawful heirs of the deceased person or as to the distributive shares to which each person is
entitled under the law, the controversy shall be heard and decided as in ordinary cases.

No distribution shall be allowed until the payment of the obligations above mentioned has been made
or provided for, unless the distributes, or any of them, give a bond, in a sum to be fixed by the court,
conditioned for the payment of said obligations within such time as the court directs.

Based thereon, we find that what the parties and the lower courts have perceived to be as an Order of
Collation is nothing more than an order of inclusion in the inventory of the estate which, as we have
already discussed, is an interlocutory order. The motion for collation was filed with the probate court at
the early stage of the intestate estate proceedings. We have examined the records of the case and we
found no indication that the debts of the decedents spouses have been paid and the net remainder of the
conjugal estate have already been determined, and the estates of the deceased spouses at the time filing
of the motion for collation were ready for partition and distribution. In other words, the issue on
collation is still premature.

And even if we consider, en arguendo, that said assailed Order is a collation order and a final order,
still, the same would have no force and effect upon the parties. It is a hornbook doctrine that a final
order is appealable. As such, the Order should have expressed therein clearly and distinctly the facts
and the laws on which it is based as mandated by Section 14, Article VIII of the 1987 Constitution of
the Republic of the Philippines, which provides:

SEC. 14. No decision shall be rendered by any court without expressing therein clearly and distinctly
the facts and the law on which it is based.

No petition for review or motion for reconsideration of a decision of the court shall be refused due
course or denied without stating the legal basis therefore.

An examination of the subject Order as quoted earlier,[28] readily reveals that the presiding Judge failed
to comply with the said constitutional mandate. The assailed Order did not state the reasons for
ordering the collation of the properties enumerated therein. The Order simply directed the inclusion of
certain real properties in the estate of the deceased. It did not declare that the properties enumerated
therein were given to the children of the deceased gratuitously, despite the title in the childrens names
or deeds of sale in their favor. Moreover, in his Comment, private respondent makes mention of the
testimonies of his witnesses but these were not even mentioned in the Order of November 11, 1994.
Petitioner would have been deprived of due process as they would be divested of the opportunity of
being able to point out in a motion for reconsideration or on appeal, any errors of facts and/or law
considering that there were no facts or laws cited in support of the assailed Order of collation. As a
final Order, it is, on its face patently null and void. It could have never become final. A void judgment
is not entitled to the respect accorded to a valid judgment, but may be entirely disregarded or declared
inoperative by any tribunal in which effect is sought to be given to it.[29] For it to be considered as a
valid final order, the RTC must then first rule and state in its order whether the properties covered by
TCT Nos. T-36734, T-36989, T-33658, T-36987, T-40333, T-10907 and the 4,009 square meter lot were
acquired by petitioners from the deceased parents of the parties by onerous or gratuitous title; and must
specifically state in its order the reasons why it ordered the subject properties collated. It is only then
that the order of collation may be the subject of a motion for reconsideration and/or appeal within the
15-day reglementary period. Until and unless the constitutional mandate is complied with, any appeal
from said Order would have been premature.

Either way therefore, whether the Order in question is a final or interlocutory order, it is a reversible
error on the part of the appellate court to rule that the so-called order of collation dated November 11,
1994 had already attained finality.

As to the prayer of petitioners that the RTC be ordered to give due course to their notice of appeal from
the Orders dated November 4, 1996 and December 23, 1996 removing petitioner Teresita N. de Leon as
administratrix of the estate of private parties deceased parents,[30] to approve their record on appeal[31]
and to elevate the records of Special Proceeding No. C-1679 to the Court of Appeals It is not disputed
by the parties that said Orders are appealable. In fact, the Court of Appeals had correctly directed the
RTC to give due course to petitioners appeal and this is not assailed by the private respondent.

But, the approval or disapproval of the record on appeal is not a proper subject matter of the present
petition for review on certiorari as it is not even a subject-matter in CA-G.R. SP No. 42958. Whether or
not the record on appeal should be approved is a matter that is subject to the sound discretion of the
RTC, provided that Sections 6 to 9, Rule 41 of the Rules of Court are observed by appellant.

Finally, the elevation of the records of Special Proceedings No. C-1679 to the Court of Appeals for the
purpose of petitioners appeal from the order removing the administratrix is unnecessary where a record
on appeal is allowed under the Rules of Court. The court a quo loses jurisdiction over the subject of the
appeal upon the approval of the record on appeal and the expiration of the time to appeal of the other
parties; but retains jurisdiction over the remaining subject matter not covered by the appeal.[32]

WHEREFORE, the petition is partly GRANTED. The assailed Decision dated February 28, 1997 and
Resolution dated April 3, 1997 of the Court of Appeals are MODIFIED. The Order dated November 11,
1994 issued by the Regional Trial Court and all other orders of said court emanating from said Order
which involve the properties enumerated therein are considered merely provisional or interlocutory,
without prejudice to any of the heirs, administrator or approving parties to resort to an ordinary action
for a final determination of the conflicting claims of title.

The Regional Trial Court of Caloocan City (Branch 123) is directed to immediately act, without further
delay, on petitioners appeal from the Orders dated November 4, 1996 and December 23, 1996, subject
to Sections 6 to 9, Rule 41 of the Rules of Court.

No costs.
SO ORDERED.

Davide, Jr., C.J., (Chairman), and Kapunan, JJ., concur.

Vitug, and Ynares-Santiago, JJ., in the result.

THIRD DIVISION

[G.R. No. 147070. February 17, 2004]

SANTIAGO TAMAYO alias BATOG, petitioner, vs. COURT OF APPEALS and PEOPLE OF THE
PHILIPPINES, respondents.

DECISION

CORONA, J.:

In this petition for review, petitioner Santiago Tamayo alias Batog prays that the resolutions[1] dated
November 10, 2000 and January 31, 2001 of the Court of Appeals be reversed and set aside, and that
the appellate court be directed to reinstate and give due course to his appeal.

On December 15, 1998, petitioner was convicted by the Regional Trial Court, Branch 57, San Carlos
City of arson punishable under Art. 321, no. 1 (b) of the Revised Penal Code. He was sentenced to
suffer imprisonment of six years and one day of prision mayor as minimum to 12 years and one day of
reclusion temporal as maximum. Petitioner appealed his conviction to the Court of Appeals by filing a
notice of appeal. On June 30, 1999, the appellate court required him to file an appellants brief.
Petitioner, however, failed to file the required brief despite the lapse of one year. This prompted the
Court of Appeals to issue the assailed resolution dated November 10, 2000 dismissing his appeal. The
Court of Appeals treated petitioners failure to file the appellants brief as an abandonment of his appeal,
pursuant to Section 8, Rule 124 of the Revised Rules on Criminal Procedure.

Petitioner moved for reconsideration, praying that he be given ample time to prepare his appellants
brief. He averred that he was completely unaware of the non-filing of the brief by his former counsel
who withdrew from the case without his knowledge and consent. On January 31, 2002, the Court of
Appeals issued another resolution denying reconsideration on the ground that

xxx as of 29 January 2001 or forty-one (41) days after the filing of this Motion, accused Santiago
Tamayo still failed to submit his Appellants Brief. Accordingly, the Court viewed this non-compliance
as an abandonment of his appeal.

WHEREFORE, for failure to file the mandatory Appellants Brief within the reglementary period, the
present appeal is hereby DISMISSED.[2]

Hence, this petition.

Petitioner maintains that he should not be made to bear the adverse consequences of his former
counsels negligence. He claims that his former counsel abandoned his case without informing him and
that it was only when his appeal was dismissed by the Court of Appeals that he learned of his former
counsels withdrawal from the case.

He further contends that the exercise by the appellate court of the power to dismiss the appeal was not
in accordance with the tenets of justice and fair play as he was denied his right to be heard on appeal.

He insists that the Court of Appeals should have excused the procedural lapse since strict compliance
with the rules meant sacrificing justice for technicality. Considering that no material injury was
suffered by the People of the Philippines by reason of the delay in the filing of his brief, the appellate
court should have allowed him to file it even beyond the reglementary period.

In his comment, the Solicitor General argues that the Court of Appeals acted correctly in issuing the
assailed resolutions since: (a) the delay in filing the brief was not merely a matter of a few days or
weeks but of more than one year; (b) for more than a year, petitioner negligently failed to exert effort to
confer with his counsel about the progress of his appeal; (c) knowing the gravity of the offense and the
severity of the penalty imposed on him, petitioner should have been diligent enough to communicate
with his counsel concerning his case and (d) even though he filed a motion for reconsideration of the
dismissal of his appeal, prudence dictated that, without waiting for the resolution of his motion, he
should have filed his brief within a reasonable time. Clearly, petitioner failed to do what was reasonable
under the circumstances, hence his appeal was rightly dismissed for the second time.

Petitioner, in his reply, retorts that he could not be expected to presume that the motion for
reconsideration would be granted. His primordial concern then was for his appeal to be reinstated.
Thus, before filing the requisite brief, he still had to wait for the order of the Court of Appeals
reinstating the appeal.

We grant the petition.

Except for criminal cases where the penalty imposed is reclusion perpetua or death, an appeal from the
judgment of the lower court is not a matter of right but of sound judicial discretion. The circulars of this
Court prescribing technical and other procedural requirements are meant to promptly dispose of
unmeritorious petitions that clog the docket and waste the time of the courts. These technical and
procedural rules, however, are intended to ensure, not suppress, substantial justice. A deviation from
their rigid enforcement may thus be allowed to attain their prime objective for, after all, the
dispensation of justice is the core reason for the existence of courts.[3]

It must be noted that, in the case at bar, it is not disputed that petitioner timely filed his notice of appeal
and that the appellate court acquired jurisdiction over the case. Petitioner merely failed to submit his
appellants brief within the period provided by the rules. A distinction should be made between the
failure to file a notice of appeal within the reglementary period and the failure to file a brief within the
period granted by the appellate court. The former results in the failure of the appellate court to acquire
jurisdiction over the appealed decision resulting in its becoming final and executory upon failure of the
appellant to move for reconsideration. The latter simply results in the abandonment of the appeal which
can lead to its dismissal upon failure to move for its reconsideration.[4]
In the instant case, when appellant learned about the dismissal of his appeal, he timely moved for its
reconsideration on the ground that he had no knowledge that his counsel not only failed to file the
required brief but actually withdrew as such without his consent. Apparently, the Court of Appeals did
not act on petitioners motion praying for the reinstatement of his appeal. Instead, it precipitately issued
a resolution dismissing the appeal for the second time on the same ground - that petitioner was deemed
to have abandoned his appeal. According to the Court of Appeals, forty-one (41) days from the filing of
appellants motion for reconsideration had already lapsed and no brief was ever filed. We hold,
however, appellant not responsible therefor because he was waiting for the resolution of his motion for
reconsideration. It must be recalled that, in his motion, he prayed for the reinstatement of his appeal
and that he be given sufficient time to file his brief in the event of reinstatement of his appeal. It would
have been improper therefore for appellant to presume the favorable outcome of the motion he filed.
He was not expected to file his brief right after moving for the reconsideration of the dismissal of his
appeal without an order from the court directing him to do so. In a considerable number of cases, the
Court has deemed it fit to suspend its own rules or to exempt a particular case from its strict operation
where the appellant fails to perfect his appeal within the reglementary period, resulting in the appellate
courts failure to obtain jurisdiction over the case. With more reason, there should be a wider latitude in
exempting a case from the strictures of procedural rules when the appellate court has already obtained
jurisdiction over the appealed case and, as in this case, petitioner failed to file the appellants brief.

This is not to say, however, that technical and procedural rules governing appeals, including those
prescribing reglementary periods, need not be observed at all or may be ignored at will. The remedy of
appeal may be availed of only in the manner provided for by law and the rules. However, while, as a
general rule, a review on appeal is not a matter of right but of sound judicial discretion and may be
granted only when there are special and important reasons therefor, still it must be remembered that
appeal is an essential part of our judicial system. Courts should thus proceed with extreme care so as
not to deprive a party of this right. Laws and rules should be interpreted and applied not in a vacuum or
in isolated abstraction but in light of surrounding circumstances and attendant facts in order to afford
justice to all.[5] The need to safeguard petitioners rights should caution courts against motu proprio
dismissals of appeals, specially in criminal cases where the liberty of the accused is at stake. The rules
allowing motu proprio dismissals merely confer a power and does not impose a duty; and the same is
not mandatory but merely directory, which therefore requires a great deal of prudence, considering all
the attendant circumstances.[6] Thus, substantial justice would be better served by reinstating petitioners
appeal.

Moreover, dismissal of an appeal on purely technical grounds is frowned upon since our general policy
is to encourage hearings of appeals on their merits. This Court is therefore constrained to relax the rules
to give way to the paramount and overriding interest of justice.

WHEREFORE, the instant petition is hereby GRANTED. The November 10, 2000 and January 31,
2001 resolutions of the Court of Appeals are REVERSED and SET ASIDE, and petitioners appeal is
REINSTATED. Petitioner is hereby ordered to file his appellants brief in the Court of Appeals within a
non-extendible period of fifteen days from receipt of this decision.

SO ORDERED.

Vitug, (Chairman), Sandoval-Gutierrez, and Carpio-Morales, JJ., concur.

FIRST DIVISION

[G.R. No. 128628. August 23, 2001]

ILDEFONSO SAMALA AND BENJAMIN BABISTA, petitioners, vs. THE HON. COURT OF
APPEALS, THE HON. REGIONAL TRIAL COURT, Branch 15, Naic, Cavite, and ROMULO
OCAMPO, respondents.

DECISION

PARDO, J.:

What is before the Court is an appeal via certiorari from the decision of the Court of Appeals[1] that
denied the petition for relief from the order granting a writ of execution.

On October 19, 1990, at about 8:00 p.m., Super Saint Bus with plate number NKJ 468 and body
number 975 sideswiped a Yamaha motorcycle with plate number MCGB 5256, along Panamitan
Highway, Kawit, Cavite. Romulo Ocampo was riding at the back of the motorcycle driver.

As a result of the impact, Ocampo was thrown several meters away and landed on a concrete highway
causing serious physical injuries on his neck and left leg. He was confined at the Perpetual Help
Hospital for three days and had several months of treatment.

After hitting the motorcycle, the bus sped away. The driver, Benjamin Babista, did not even lend
assistance to the victim and left the victim on the highway.

On December 20, 1990, Romulo Ocampo filed with the Regional Trial Court, Cavite, Branch 15, Naic,
a complaint[2] for damages against driver Benjamin Babista and the owner of the Super Saint Bus,
Ildefonso Samala.

After due trial, on May 15, 1995, the trial court rendered a decision in favor of respondent Ocampo, the
decretal portion of which reads:

Wherefore, the Court finds judgment in favor of plaintiff as against defendants jointly and solidarily
and Orders the defendants to pay plaintiff as follows:

1. To pay jointly and severally plaintiff:

a. P11,000.00 as actual damages

b. P30,000.00 as consequential damages

c. P78,192.00 as loss of earning

d. P50,000.00 as moral damages

e. P40,000.00 as exemplary damages

f. P15,000.00 for attorneys fees

g. P3,000.00 for litigation expenses

2. To pay the costs of suit.

SO ORDERED.

Naic, Cavite, May 15, 1995.

ENRIQUE M. ALMARIO

Judge[3]

On October 16, 1995, petitioners filed with the trial court a notice of appeal.

On October 17, 1995, the trial court denied the appeal. We quote:

This refers to the Notice of Appeal received and filed on 16 October 1995. The decision sought to be
appealed was received on 29 September 1995. It is clear that more than 15 days had elapsed; hence, the
decision is now final.

WHEREFORE, the Notice of Appeal cannot be given due course.

SO ORDERED.

Naic, Cavite, 17 October 1995.

EMERITO M. AGCAOILI

Assisting Judge[4]

On November 24, 1995, petitioners filed with the trial court a petition for relief from order denying
their appeal. Petitioners argued that the reason for the failure to file the notice of appeal within fifteen
(15) days was the fact that the notice was entrusted to Jose Samala, Jr. but he suffered from diarrhea on
October 11 to 12, 1995. He could not leave the house and nobody could attend to the filing of the
notice. Thus, he filed it only on Monday, October 16, 1995, thinking that the period had not lapsed.

On February 21, 1996, the trial court denied the petition for relief for not having adduced any reason
compelling enough to warrant reconsideration of the order.[5]

On March 7, 1996 petitioners filed with the trial court their notice of appeal.[6] Petitioners appealed the
orders of October 17, 1995 and February 21, 1996, denying the petition for relief to the Court of
Appeals.
Meanwhile, on March 20, 1996, the trial court granted respondent Ocampos motion for writ of
execution.[7]

On April 8, 1996, petitioners filed with the trial court a motion for reconsideration[8] of the order dated
March 20, 1996. In their motion, petitioners prayed for denial of the writ of execution and for the
records of the case to be elevated to the Court of Appeals for review.

On July 1, 1996, the trial court denied the motion for reconsideration.[9]

On July 17, 1996, petitioners filed with the Court of Appeals[10] a petition for certiorari and prohibition
assailing the trial courts denial of the petition for relief from order.

On September 17, 1996 the Court of Appeals promulgated its decision denying the petition.[11]

On October 2, 1996, petitioners filed a motion for reconsideration of the denial.[12]

On March 7, 1997, the Court of Appeals denied the motion.[13]

Hence, this petition.[14]

The issue presented is whether the Court of Appeals erred in refusing to grant petitioners relief from
order that denied their appeal from the judgment of the trial court.

Samoso vs. CA[15] elucidates that relief from judgment under Rule 38 of the Revised Rules of Court
(1964 Revision) is a remedy provided to any person against whom a decision or order is entered into
through fraud, accident, mistake or excusable negligence. A petition for relief from judgment is an
equitable remedy that is allowed in exceptional cases when there is no other available or adequate
remedy.[16]

Thus, the question now before us is whether the failure of petitioners to file the notice of appeal on time
(one day late) would fall under excusable negligence.

We said that the general aim of procedural law is to facilitate the application of justice to the rival
claims of contending parties, bearing in mind that procedural rules are created not to hinder or delay
but to facilitate and promote the administration of justice.[17] In rendering decisions, courts must not be
too dogmatic. A complete view must be taken in order to render a just and equitable judgment.[18] It is
far better to dispose of a case on the merits, which is a primordial end, than on technicality that may
result in injustice.[19]

The rules of procedure are mere tools designed to facilitate the attainment of justice. Their strict and
rigid application especially on technical matters, which tends to frustrate rather than promote
substantial justice, must be avoided. Even the Revised Rules of Court envision this liberality.[20]
Technicality, when it deserts its proper office as an aid to justice and becomes its great hindrance and
chief enemy, deserves scant consideration from the courts.[21]

In this case, the last day for filing the notice of appeal fell on a Friday, October 13, 1995. Petitioners
entrusted the filing of the notice of appeal to Jose Samala on October 11, 1995. However, he suffered
from stomach pains which lasted until the following days. Jose Samala filed the notice immediately on
the next business day, Monday, October 16, 1995. He believed in good faith that he could still file it on
Monday. Delay in filing the notice of appeal was actually for one (1) day. Saturday and Sunday are
excluded. Considering the facts of the case, this was excusable negligence.

In United Airlines v. Uy,[22] where the respondent filed his notice of appeal two (2) days later than the
prescribed period, although his counsel failed to give the reason for the delay, we gave due course to
the appeal due to the unique and peculiar facts of the case and the serious question of law it poses.

The real purpose behind the limitation of the period of appeal is to forestall or avoid an unreasonable
delay in the administration of justice and to put an end to controversies.[23] Where no element of intent
to delay the administration of justice could be attributed to petitioners, a one-day delay does not justify
their appeals denial.

We are inclined to give the same consideration in this case in light of the rules on justice, equity and
fair play. After all, the petition embodied circumstances that warrant heeding the petitioners' plea for
justice. The law abhors technicalities that impede the cause of justice.[24]

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CA-G. R. SP No.
41281 is hereby REVERSED. The trial court is ordered to elevate the records of Civil Case No. NC-
346 to the Court of Appeals for review in due course of appeal.

No costs.

SO ORDERED.

Kapunan, and Ynares-Santiago, JJ., concur.

Davide, Jr., C.J., (Chairman), see dissenting opinion.

Puno, J., I join the dissent.

FIRST DIVISION

[G.R. No. 128177. August 15, 2001]

HEIRS OF ROMAN SORIANO, petitioners, vs. THE HONORABLE COURT OF APPEALS,

SPOUSES BRAULIO ABALOS and AQUILINA ABALOS, respondents.

DECISION
YNARES-SANTIAGO, J.:

May a winning party in a land registration case effectively eject the possessor thereof, whose security
of tenure rights are still pending determination before the DARAB?

The instant petition for certiorari seeks to set aside the Decision[1] dated September 20, 1996 of the
Court of Appeals in CA-G.R. SP No. 34930 as well as its Resolution[2] dated January 15, 1997, denying
petitioners Motion for Reconsideration.

We quote the undisputed facts as narrated by the Court of Appeals, to wit

The property subject of this case is a parcel of land containing an area of 24,550 square meters, more or
less, located in Lingayen, Pangasinan, and particularly described as follows:

A parcel of land (Nipa with an area of 8,410 square meters; fishpond with an area of 14,000 square
meters; and residential land with an area of 1,740 square meters, more or less. Bounded on the N, by
river and Filemon Anselmo; on the South by Alejandro Soriano and Filemon Anselmo; and on the West
by Fortunata Soriano.

Originally owned by Adriano Soriano until his death in 1947, the above-described property passed on
to his heirs who leased the same to spouses David de Vera and Consuelo Villasista for a period of
fifteen (15) years beginning July 1, 1967 with Roman Soriano, one of the children of Adriano Soriano,
acting as caretaker of the property during the period of the lease. After executing an extra judicial
settlement among themselves, the heirs of Adriano Soriano subsequently subdivided the property into
two (2) lots, Lot No. 60052 and Lot No. 8459. Lot No. 60052 was assigned to Lourdes, Candido and
the heirs of Dionisia while Lot No. 8459 was assigned to Francisca, Librada, Elocadio and Roman. In
1971, Lot No. 60052 was sold by Lourdes, Candido and the heirs of Dionisia to petitioner spouses
Braulio and Aquilina Abalos (hereinafter referred to as petitioners), while, Elocadio, Francisca and
Librada sold their three-fourths shares in Lot No. 8459 also to petitioners.

On March 14, 1968, the de Vera spouses ousted Roman Soriano as caretaker and appointed Isidro
Verzosa and Vidal Verzosa as his substitutes. Thereafter, Roman Soriano filed CAR Case No. 1724-P-
68 for reinstatement and reliquidation against the de Vera spouses. The agrarian court authorized the
ejectment of Roman Soriano but on appeal, the decision was reversed by the Court of Appeals, which
decision became final and executory. However, prior to the execution of the said decision, the parties
entered into a post-decisional agreement wherein the de Vera spouses allowed Roman Soriano to sub-
lease the property until the termination of the lease in 1982. In an Order dated December 22, 1972, the
post-decisional agreement was approved by the agrarian court.

On August 16, 1976, petitioners filed with the Regional Trial Court of Lingayen, Pangasinan, Branch
38, an application for registration of title over Lot No. 60052 and three-fourths (3/4) pro-indiviso of Lot
No. 8459, docketed as LRC Case No. N-3405. Said application for registration was granted by the trial
court, acting as a land registration court, per Decision dated June 27, 1983. On appeal, the Court of
Appeals affirmed the decision of the land registration court. The petition for review filed with the
Supreme Court by Roman Soriano docketed as G.R. 70842, was denied for lack of merit and entry of
judgment was entered on December 16, 1985.
Meanwhile, it appears that on July 15, 1983, a day after the promulgation of the land registration courts
decision, Roman Soriano, together with Elocadio and Librada Soriano, filed before the Regional Trial
Court of Lingayen, Branch 37, and against petitioners, an action for annulment of document and/or
redemption, ownership and damages, docketed as Civil Case No. 159568 (sic; should be 15958).
Petitioners filed a motion to dismiss on the ground of res judicata, pendency of another action, laches,
misjoinder of parties and lack of jurisdiction, which was denied by the trial court.

Thereafter, on August 22, 1984, or eleven (11) years after the approval of the post-decisional agreement
between Roman Soriano and the spouses de Vera in CAR Case No. 1724-P-68 for reinstatement and
reliquidation, petitioners filed with the agrarian court a motion for execution of said post-decisional
agreement which allowed Roman Soriano to sub-lease the property. The motion prayed that petitioners
be placed in possession of the subject property, jointly with Roman Soriano, and to levy so much of
Romans property to answer for the use and occupation by Soriano of 6/7 share of the property. On
October 25, 1984, Roman Soriano filed a motion to suspend hearing on the rental demanded by
petitioners, which, however, was denied by the agrarian court. The agrarian court likewise authorized
the substitution of the de Vera spouses by petitioners. Sorianos motion for reconsideration was also
denied, prompting Soriano to file a petition for certiorari with the Court of Appeals.

In the meantime, Roman Soriano died on December 11, 1985. Thus, the complaint in Civil Case No.
159568 (sic) for annulment of document and/or redemption, ownership and damages, was amended to
substitute Sorianos heirs, herein private respondents, as party-plaintiffs. The complaint was again
amended to include Juanito Ulanday as party-defendant for having allegedly purchased part of the
disputed property from petitioners. On motion of petitioners, the re-amended complaint was dismissed
by the trial court on the ground that the re-amended complaint altered the cause of action. Upon
reconsideration, the dismissal was set aside and petitioners were ordered to file their Answer, in view of
which petitioners filed a petition for certiorari and prohibition with the Court of Appeals, docketed as
C.A. GR SP No. 22149.

On April 25, 1990, the Court of Appeals denied the petition filed by Roman Soriano (substituted by
private respondents) impugning the denial of their motion to suspend hearing on the rental demanded
by petitioners, and authorizing the substitution of the de Vera spouses by petitioners, on the ground that
no grave abuse of discretion was committed by the agrarian court. Thus, private respondents filed a
petition for review on certiorari with the Supreme Court, docketed as G.R. 93401.

Meanwhile, on December 7, 1990, the Court of Appeals in C.A. GR SP No. 22149, also denied the
petition for certiorari and prohibition filed by petitioners, ruling that the land registration court
committed no error when it refused to adhere to the rule of res judicata. Petitioners then filed with the
Supreme Court a petition for review on certiorari, docketed as G.R. 99843.

On June 26, 1991, the Supreme Court promulgated its decision in G.R. 93401, and granted the petition
filed by private respondents. Thus, the decision of the Court of Appeals denying the petition of private
respondents was set aside, and the motion for execution filed by petitioners in CAR Case No. 1724-P-
48 was denied.

On June 22, 1993, the Supreme Court, in G.R. 99843, reversed and set aside the denial of the Court of
Appeals in C.A. GR SP No. 22149, and consequently, Civil Case No. 15958 for annulment of document
and/or redemption, ownership and damages, was ordered dismissed.
On October 18, 1993, private respondents filed with the Department of Agrarian Adjudication Board
(sic), a complaint against petitioners for Security of Tenure with prayer for Status Quo Order and
Preliminary Injunction docketed as DARAB Case No. 528-P-93.

Meanwhile, it appears that the decision of the land registration court in LRC Case No. N-3405 was
partially executed with the creation of a Committee on Partition per Order dated March 25, 1987. On
July 27, 1988, the land registration court approved the partition of Lot No. 8459, with Lot No. 8459-A
assigned to private respondent, and Lot No. 8459-B assigned to petitioners. For Lot No. 60052, O.C.T.
No. 22670 was issued in the name of petitioners; for Lot No. 8459-B, O.C.T. No. 22687 was issued,
also in the name of petitioner; and for Lot No. 8459-A, O.C.T. No. 22686 was issued in the name of
Roman Soriano. Dissatisfied with said partition, private respondents appealed to the Court of Appeals,
docketed as CA G.R. SP No. 119497. The appellate court affirmed the partition but reversed the order of
the land registration court directing the issuance of a writ of possession on the ground of pendency of
Civil Case No. 15958.

On November 15, 1993, the trial court in compliance with the decision of the Supreme Court in G.R.
No. 99843, dismissed Civil Case No. 15958, in view of which, petitioner, on November 25, 1993, in
LRC Case No. N-3405, moved for the issuance of an alias writ of execution and/or writ of possession to
place them in possession of Lot No. 60052 and Lot No. 8459-B. Per Resolution dated January 21,
1994, said motion was held in abeyance by the land registration court until and after DARAB Case No.
528-P-93 for security of tenure with prayer for status quo, has been resolved.

Their motion for reconsideration having been denied on April 5, 1984, petitioners interposed an appeal
to the Supreme Court, docketed as G.R. 115073. In a Resolution dated July 27, 1994 issued by the
Supreme Court, petitioners appeal, which was treated as a petition for certiorari, was referred to this
Court [of Appeals] for determination and disposition.[3]

The Court of Appeals annulled and set aside the Resolution of the land registration court and ordered
instead the issuance of the corresponding writ of possession in favor of private respondents. With the
denial of their Motion for Reconsideration, petitioners are now before us raising the following grounds:

1. THE DECISION AND RESOLUTION OF THE RESPONDENT COURT OF APPEALS ARE

CONTRARY TO THE PROVISIONS OF THE AGRARIAN REFORM LAWS AND
JURISPRUDENCE ON THE SECURITY OF TENURE OF TENANT-CARETAKER.

2. THE DECISION AND RESOLUTION OF THE RESPONDENT COURT OF APPEALS ARE

VIOLATIVE OF THE PROVISION ON RIGHT TO DUE PROCESS.

3. THE HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN

GIVING DUE COURSE TO THE PETITION CONSIDERING THAT PRIVATE RESPONDENTS
HAD EARLIER PERFECTED AN APPEAL OF THE RESOLUTION SUBJECT OF THEIR
PETITION.[4]

Possession and ownership are distinct legal concepts. There is ownership when a thing pertaining to
one person is completely subjected to his will in a manner not prohibited by law and consistent with the
rights of others. Ownership confers certain rights to the owner, among which are the right to enjoy the
thing owned and the right to exclude other persons from possession thereof. On the other hand,
possession is defined as the holding of a thing or the enjoyment of a right. Literally, to possess means
to actually and physically occupy a thing with or without right. Possession may be had in one of two
ways: possession in the concept of an owner and possession of a holder.[5] A person may be declared
owner but he may not be entitled to possession. The possession may be in the hands of another either as
a lessee or a tenant. A person may have improvements thereon of which he may not be deprived
without due hearing. He may have other valid defenses to resist surrender of possession. A judgment
for ownership, therefore, does not necessarily include possession as a necessary incident.[6]

There is no dispute that private respondents (petitioners below) title over the land under litigation has
been confirmed with finality. As explained above, however, such declaration pertains only to ownership
and does not automatically include possession, especially so in the instant case where there is a third
party occupying the said parcel of land, allegedly in the concept of an agricultural tenant.

While the issue of ownership of the subject land has been laid to rest in the final judgment of the land
registration court, the right of possession thereof is, as yet, controverted. This is precisely what is put in
issue in the security of tenure case filed by petitioners (private respondents below) before the DARAB.

It is important to note that although private respondents have been declared titled owners of the subject
land, the exercise of their rights of ownership are subject to limitations that may be imposed by law.[7]
The Tenancy Act provides one such limitation. Agricultural lessees are entitled to security of tenure and
they have the right to work on their respective landholdings once the leasehold relationship is
established. Security of tenure is a legal concession to agricultural lessees which they value as life itself
and deprivation of their landholdings is tantamount to deprivation of their only means of livelihood.[8]
The exercise of the right of ownership, then, yields to the exercise of the rights of an agricultural
tenant.

However, petitioners status as tenant has not yet been declared by the DARAB. In keeping with judicial
order, we refrain from ruling on whether petitioners may be dispossessed of the subject property. As
ratiocinated in Nona v. Plan[9]

It is to the credit of respondent Judge that he has shown awareness of the recent Presidential Decrees
which are impressed with an even more solicitous concern for the rights of the tenants. If, therefore, as
he pointed out in his order granting the writ of possession, there is a pending case between the
parties before the Court of Agrarian Relations, ordinary prudence, let alone the letter of the law,
ought to have cautioned him against granting the plea of private respondents that they be placed
in possession of the land in controversy. x x x. At the time the challenged orders were issued, without
any showing of how the tenancy controversy in the Court of Agrarian Relations was disposed of,
respondent Judge could not by himself and with due observance of the restraints that cabin and confine
his jurisdiction pass upon the question of tenancy. (Emphasis ours)

In its challenged Decision, the Court of Appeals relied heavily on the principle of finality of judgments.
It applied the legal doctrine that once a judgment has become final, the issuance of a writ of execution
becomes ministerial. The appellate court held that petitioners situation does not fall under any of the
exceptions to this rule since his occupation of the subject land did not transpire after the land
registration courts adjudication became final.

In so ruling, however, the Court of Appeals loses sight of the fact that petitioners claim of possession as
a tenant of the litigated property, if proven, entitles him to protection against dispossession.
Private respondents argue that petitioners tenancy claim is barred by res judicata, having been ruled
upon in G.R. Nos. 99843 and 93401. However, not being an issue in the case before us, this question
should properly be resolved in DARAB Case No. 528-P-93. To restate, the only issue before us is
whether or not a winning party in a land registration case can effectively eject the possessor thereof,
whose security of tenure rights are still pending determination before the DARAB.

A judgment in a land registration case cannot be effectively used to oust the possessor of the land,
whose security of tenure rights are still pending determination before the DARAB. Stated differently,
the prevailing party in a land registration case cannot be placed in possession of the area while it is
being occupied by one claiming to be an agricultural tenant, pending a declaration that the latters
occupancy was unlawful.

WHEREFORE, the instant petition for certiorari is hereby GRANTED. The Decision of respondent
Court of Appeals in CA-G.R. SP No. 34930 dated September 20, 1996, as well as its Resolution dated
January 15, 1997 are SET ASIDE. The Resolution of the Regional Trial Court of Lingayen, Pangasinan
in LRC Case No. N-3405 dated January 21, 1994 is ordered REINSTATED.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Pardo, JJ., concur.

EN BANC

[G.R. No. 153454. July 7, 2004]

AGUS DWIKARNA, petitioner, vs. HON. ANDREA D. DOMINGO, Commissioner, Bureau of

Immigration, GEN. LEANDRO MENDOZA,* Chief, Philippine National Police, GEN. JAIME G.
CARINGAL, Chief, Intelligence Group, Philippine National Police, RONALDO P. LEDESMA, Chief,
Bureau of Special Inquiry, and the Board of Commissioners, Bureau of Immigration, respondents.

DECISION

CORONA, J.:

Before us is a petition for certiorari, prohibition and mandamus, filed under Rule 46, in relation to Rule
56, Sections 1 and 2 of the Revised Rules of Court, with a prayer for a temporary mandatory injunction
for the immediate release of petitioner from detention.

The facts of the case follow.

On March 13, 2002, at around 7:25 p.m., petitioner Agus Dwikarna and two other Indonesian nationals,
namely, Abdul Jamal Balfas and Hamsid Lin Rung, were at the Ninoy Aquino International Airport,
checking in their luggage for x-ray screening in preparation for their departure for Bangkok, Thailand.
The police authorities apprehended them when they were found to be in possession of two pieces oval-
shaped C-4 plastic explosives and five pieces detonating cords.

The following day, on March 14, 2002, an information was filed against petitioner and his two
companions in the Regional Trial Court of Pasay City, Branch 117, for violation of PD 1866 (illegal
possession of firearms and ammunition), as amended. The accusatory part of the information read:

That on 13 March 2002, in Pasay City, Philippines, and within the jurisdiction of this Honorable Court,
said accused, conspiring and confederating, together and mutually helping one another, with intent to
possess, did then and there, willfully, unlawfully and feloniously have in their possession, custody and
control, incendiary devices capable of producing destructive effects on contiguous objects and/or
causing injury or death to persons without the necessary license and authority to possess the same,
viz. : two (2) pcs. oval shaped C-4 plastic explosives and five (5) pcs. detonating cords.

CONTRARY TO LAW.[1]

The case was docketed as Criminal Case No. 02-0576.

On March 19, 2002, a charge sheet was filed by the special prosecutor of the Bureau of Immigration
against petitioner and his two co-accused, docketed as D.C. No. ADD No. 02-004, for violation of
section 37 (a) (7) of the Philippine Immigration Act of 1940, as amended. The charge sheet read:

The undersigned Special Prosecutor charges for deportation, AGUS DWIKARNA, ABDUL JAMAL
BALFAS and TAMSIL LIN RUNG all Indonesian nationals for violation of Sec. 37 (a) (7) of the PIA
of 1940, as amended, committed as follows:

That herein respondents were arrested at the NAIA on 13 March 2002 at about 7:25 p.m. for violation
of P.D. 1866 by joint elements of PNP, IG, NICA, BID, PAF-AISG in cooperation with ASG, PNP and
under the supervision of TASK FORCE SANGLAHI.

That on or about 7:15 PM March 13, 2002 the trio, AGUS DWIKARNA, ABDUL JAMAL BALFAS
and TAMSIL LIN RUNG entered the International Terminal 1, Pasay City, and submitted themselves
for routine security check. However, during the course of the inspection by the IRASCO personnel,
PNP-ASG, the pieces of luggage of the trio yielded components for making improvised explosive
devices (IEDs) without necessary and legal authority to possess the said items.

That consequently the corresponding charge for violation of PD 1866 was filed before Pasay City
prosecutor. Office and Inquest Prosecutor Bernabe Augustus C. Solis ordered their detention with the
PNP Intelligence Group.[2]

On March 25, 2002, the charge sheet was amended and petitioner and his co-accused were further
charged with violation of section 37 (a) (8) of the same Act. The amended charge sheet read:

The undersigned Special Prosecutor charges for deportation, AGUS DWIKARNA, ABDUL JAMAL
BALFAS, TAMSIL LIN RUNG all Indonesian nationals for violation of Sec. 37 (a) (7) of the PIA of
1940, as amended, committed as follows:
That herein respondents were arrested at the NAIA on 13 March 2002 at about 7:25 p.m. for violation
of P.D. 1866 by joint elements of PNP, IG, NICA, BID, PAF-AISG in coordination with ASG, PNP and
under the supervision of TASK FORCE SANGLAHI.

That on or about 7:15 PM March 13, 2002 the trio AGUS DWIKARNA, ABDUL JAMAL BALFAS,
TAMSIL LIN RUNG entered the International Terminal 1, Pasay City, and submitted themselves for
routine security check. However, during the course of the inspection by the IRASO personnel, PNP-
ASG, the pieces of luggage of the trio yielded components for making improvised explosive devices
(IEDs) without necessary and legal authority to possess the said items;

xxx xxx xxx

That they are likewise charged for violation of Sec. 37 (a) (8) of the Philippine Immigration Act of
1940, as amended, committed as follows:

Being members of the Islamic extremist movements particularly the Jemaah Islamiah and Mejahidoon
Indonesia, they are involved in riots in Indonesia and organized (sic), advocates, or teaches the assault
of public official and destruction of public and private property and overthrow of organized
government, thus they are undesirable aliens.[3]

Meanwhile, petitioner and his co-accused were allowed to post bail for their provisional liberty, per the
release order dated March 22, 2002, issued by the trial court in Criminal Case No. 02-0576. However,
the order stated that the release was subject to the condition that there exist(ed) no other legal cause to
the effect that they remain confined under your custody. Since petitioner and his co-accused were
charged with violation of the Philippine Immigration Act of 1940, as amended, and were ordered
detained by the Bureau of Immigration, their temporary release could not be effected.

Aggrieved, petitioner and his co-accused filed a petition[4] for habeas corpus at the Court of Appeals in
CA-G.R. SP No. 70045 on April 11, 2002, alleging in the main that petitioner and his co-accused were
illegally arrested and illegally restrained of their personal liberty in violation of their human rights.

While the case was pending resolution by the Court of Appeals, the information against Tamsil Lin
Rung and Abdul Balfas in Criminal Case No. 02-0576 was withdrawn.[5] Consequently, Lin Rung and
Balfas were released from custody and the deportation case with respect to them were likewise
dismissed.[6] That left Dwikarna as the sole petitioner in the case.

On April 29, 2002, the Court of Appeals dismissed the petition for habeas corpus:

Without passing on the legality of the arrest of petitioner DWIKARNA, but even assuming arguendo
that his arrest was illegal, supervening events bar his subsequent release. x x x For DWIKARNA had
already been charged by the BI for violation of the Philippine Immigration Act of 1940, as amended.

Once a person detained is duly charged in court, he may no longer question his detention through a
petition for issuance of a writ of habeas corpus. His remedy would be to quash the information and/or
the warrant of arrest duly issued. The writ of habeas corpus should not be allowed after the party
sought to be released had been charged before any court. The term court includes quasi-judicial bodies
like the Deportation Board of the Bureau of Immigration. (Rodriquez v. Bonifacio, 344 SCRA 524, 541
[2000], Underscoring supplied).[7]
On April 30, 2002, petitioner moved for the dismissal of the amended charge sheet in D.C. No. ADD
No. 02-004. On May 8, 2002, he filed a motion for the early resolution of the case. Both motions are
still pending resolution by the Board of Commissioners.

In May 2002, petitioner filed the present petition for certiorari, prohibition and mandamus, which
prays for the issuance of a mandatory injunction, the petitioners release with finality from his detention
as well as a writ of prohibition enjoining absolutely and perpetually the proceedings in BSI-D.C. No.
ADD-02-251.

On July 12, 2002, the trial court convicted petitioner of the crime charged in Criminal Case No. 02-
0576 for illegal possession of explosive materials. The dispositive portion of the decision read:

WHEREFORE, accused AGUS DWIKARNA is hereby found GUILTY beyond reasonable doubt of
the crime of violation of Section 3 of P.D. No. 1866, as amended by R.A. No. 8294.

Accordingly, said accused is hereby sentenced to suffer an indeterminate penalty of TEN (10) YEARS
and ONE (1) DAY of prision mayor, as minimum, to SEVENTEEN (17) YEARS and FOUR (4)
MONTHS of reclusion temporal, and to pay a fine of P50,000.00

The Branch Clerk of this court is hereby directed to immediately turn over to the Firearms and
Explosives Division of the Philippine National Police all the explosives subject of this case for the
latter to dispose of the same in accordance with law.

The cost of the suit is on the accused.

So ordered.[8]

Petitioner moved for a reconsideration of the decision and the reopening of the case for new trial. Both
motions were denied. Petitioner failed to appeal from said denials. His conviction became final and
executory and was entered in the book of entries of judgment. Petitioner moved to reconsider the entry
of judgment but his motion was denied. He appealed said denial directly to us. His appeal was
dismissed outright for being the wrong mode of appeal. The trial court then directed the Director of the
National Bilibid Prisons, Bureau of Corrections, to implement the decision in Criminal Case No. 02-
0576 and ordered petitioner incarcerated at the National Bilibid Prisons.[9]

The only issue to be resolved in this case is whether or not petitioner is entitled to the extraordinary
remedies of certiorari, prohibition and mandamus, and whether he should be released from detention.

We have held in a litany of cases[10] that the extraordinary remedies of certiorari, prohibition and
mandamus are available only when there is no appeal or any plain, speedy and adequate remedy in the
ordinary course of law. The writ of certiorari does not lie where an appeal may be taken or where
another adequate remedy is available for the correction of the error. Likewise, mandamus is granted
only in cases where no other remedy is available which is sufficient to afford redress. Furthermore, a
writ of mandamus will not generally lie from one branch of the government to a coordinate branch, for
the obvious reason that neither is inferior to the other. As correctly argued by the Office of the Solicitor
General, petitioner is not without other plain, speedy and adequate remedy in the ordinary course of
law.
Before coming to us, petitioner should have first appealed his conviction in Criminal Case No. 02-0576
to the Court of Appeals by way of a petition for review under Rule 45 of the Revised Rules of Court.
Unfortunately, despite the availability of an appeal, petitioner pursued the wrong mode by filing
directly with us a petition for review on certiorari with mandamus in G.R. No. 155575. Said petition
was denied outright in a resolution dated December 16, 2002.[11] Petitioners conviction attained finality
when the period to file an appeal lapsed. He cannot now come to us through this petition for certiorari,
among others, because certiorari is not a substitute for the lost remedy of appeal. An appeal is a
statutory privilege and it may only be exercised in the manner provided by law.[12]

On the deportation case against him in D.C. ADD 02-004, resort to court is proper only after a decision
is rendered by the Board of Commissioner of the Bureau of Immigration. The Bureau is the agency that
can best determine whether petitioner violated certain provisions of the Philippine Immigration Act of
1940, as amended. In this jurisdiction, courts will not interfere in matters which are addressed to the
sound discretion of government agencies entrusted with the regulation of activities coming under the
special technical knowledge and training of such agencies.[13] By reason of the special knowledge and
expertise of administrative departments over matters falling within their jurisdiction, they are in a better
position to pass judgment thereon and their findings of fact in that regard are generally accorded
respect, if not finality, by the courts.[14] If petitioner is dissatisfied with the decision of the Board of
Commissioners of the Bureau of Immigration, he can move for its reconsideration. If his motion is
denied, then he can elevate his case by way of a petition for review before the Court of Appeals,
pursuant to Section 1, Rule 43 of the 1997 Rules of Civil Procedure.

There is, therefore, nothing irregular and illegal with petitioners continued detention. He has been duly
charged in court and convicted by final judgment of illegal possession of explosive materials and
sentenced to imprisonment. Even if he is eventually ordered deported by the Bureau of Immigration,
his continued incarceration would nevertheless still be legally justified. Section 37 (a) (9) of the
Philippine Immigration Act of 1940, as amended, explicitly states that:

Section 37. (a) The following aliens shall be arrested upon the warrant of the Commissioner of
Immigration or of another officer designated by him for the purpose and deported upon the warrant of
the Commissioner of Immigration after a determination by the Board of Commissioners of the
existence of the ground for deportation as charged against the alien:

xxx xxx xxx

(9) x x x Provided, That in the case of an alien who, for any reason, is convicted and sentenced to suffer
both imprisonment and deportation, said alien shall first serve the entire period of his imprisonment
before he is actually deported. Provided, That the imprisonment may be waived by the Commissioner
of Immigration with the consent of the Department Head, and upon payment by the alien concerned of
such amount as the Commissioner may fix and approved by the Department Head; x x x.[15] (emphasis
supplied)

The law is thus clear that a person convicted of a crime and ordered deported at the same time must
first serve his sentence before he is deported. His imprisonment may, however, be waived by the
Commissioner of Immigration. Without such waiver, he cannot be released from prison.

WHEREFORE, foregoing premises considered, the instant petition is hereby DENIED. The prayer for
a temporary mandatory injunction for the release of petitioner is likewise DENIED.
SO ORDERED.

Davide, Jr., C.J., Puno, Vitug, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio,
Austria-Martinez, Callejo, Sr., Azcuna, and Tinga, JJ., concur.

Carpio-Morales, J., no part.

*Now the Secretary of the Department of Transportation and Communications. He was replaced by
Hermogenes Ebdane as PNP Chief.

[1] Annex D, Rollo, p. 34.

[2] Annex K, Rollo, p.42.

[3] Annex L, Rollo, p. 44.

[4] Annex M, Rollo, p. 46.

[5] Annex R, Rollo, p. 66.

[6] Annex S, Rollo, p. 67.

Penned by Associate Justice Conchita Carpio Morales, now an Associate Justice of the Supreme
[7]
Court.

[8] Penned by Judge Henrick F. Gingoyon, Annex 2, Rollo, p. 139.

[9] Annex 7, Rollo, p. 285.

[10]Marawi Marantao General Hospital, Inc. vs. Court of Appeals, 349 SCRA 321 [2001]; Heirs of
Pedro Atega vs. Garilao, 357 SCRA 203 [2001]; Zarate, Jr. vs. Olegario, 263 SCRA 1 [1996]; Filoteo,
Jr. vs. Sandiganbayan, 263 SCRA 222 [1996]; Solis vs. National Labor Relations Commission, 263
SCRA 629 [1996]; Ongsitco vs. Court of Appeals, 255 SCRA 703 [1996].

[11] Resolution, Annex 3, Rollo, p. 276.

[12] Mito vs. Court of Appeals, 354 SCRA 180 [2001].

[13] Olaguer vs. Domingo, 359 SCRA 78 [2001].

[14] Palele vs. Court of Appeals, 362 SCRA 141 [2001].

[15] The Philippine Immigration Act of 1940, as amended.

 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 153310 March 2, 2004

MEGAWORLD GLOBUS ASIA, INC., petitioner,

vs.
DSM CONSTRUCTION AND DEVELOPMENT CORPORATION and PRUDENTIAL
GUARANTEE AND ASSURANCE, INC., respondents.

DECISION

TINGA, J.:

Before this Court is a Petition for Review on Certiorari assailing the Decision dated February 14, 2002,
of the Court of Appeals in CA G.R. SP No. 67432,1 which affirmed the Decision2 of the Construction
Industry Arbitration Commission (CIAC)3 dated September 8, 2001, in CIAC Case No. 22-2000
finding petitioner Megaworld Globus Asia, Inc., liable to DSM Construction in the amount of
P62,760,558.49.

The antecedents are as follows:

Relative to the construction of a condominium project called "The Salcedo Park," located at H.V. dela
Costa St., Salcedo Village, Makati City, the project owner, Megaworld, entered into three separate
contracts with DSM Construction, namely: (1) Contract for Architectural Finishing Works; (2) Contract
for Interior Finishing Works; and (3) Contract for Supply and Installation of Kitchen Cabinets and
Closets. The total contract price, which was initially placed at P300 Million, was later reduced to P240
Million when the items for kitchen cabinets and walk-in closets were deleted.4 The contracts also
contain a stipulation for Retention Money, which is a portion of the total contract price (usually, as in
this case, 10%) set aside by the project owner from all approved billings and retained for a certain
period to guarantee the performance by the contractor of all corrective works during the defect-liability
period which, in this case, is twelve months from the issuance of the Taking Over Certificate of Works.5

The Letter of Award for Architectural Finishing Works provides that the period for commencement and
completion shall be twelve months, from August 1, 1997 to July 31, 1998. However, on February 21,
2000, representatives of both Megaworld and DSM Construction entered into an Interim Agreement
whereby they agreed on a new schedule of the turnover of units from the 26th floor to the 40th floor,
which was the last of the contracted works.6 The consideration agreed upon in the Interim Agreement
was P53,000,000.00. Of this amount, P3,000,000.00 was to be released immediately while five (5)
equal installments of P7,000,000.00 were to be released depending on the turn-over of units from the
26th floor to the 40th floor. The remaining amount of P15,000,000.00 of the P53,000,000.00 consisted of
half of the retention money.7
Because of the differences that arose from the billings, DSM Construction filed on August 21, 2002, a
Complaint before the CIAC for compulsory arbitration, claiming payment of P97,743,808.33 for the
outstanding balance of the three construction contracts, variation works, labor escalation, preliminaries
loss and expense, earned retention money, interests, and attorneys fees.8 DSM Construction alleged
that it already commenced the finishing works on the existing 12 floors on August 1, 1997, instead of
waiting for the entire 40-floor structure to be completed. At one time, DSM Construction worked with
other contractors whose work often depended on, interfered or conflicted with said contractors. Delay
by a trade contractor would start a chain reaction by delaying or putting off other works.9

Interposing mainly the defense of delay in the turn-over of units and the poor quality of work of DSM
Construction, Megaworld filed its Answer and made a counter-claim for loss of profits, liquidated
damages, costs of take-over and rectification works, administration expenses, interests, attorneys fees
and cost of arbitration in the total amount of P85,869,870.28.10

Prudential Guarantee and Assurance, Inc. (PGAI), which issued a Performance Bond to guarantee
Megaworlds contractual obligation on the project, was impleaded by Megaworld as a third-party
respondent.11

On March 28, 2001, the parties signed before the members of the Arbitral Tribunal the Terms of
Reference12 (TOR) where they setforth their admitted facts,13 respective documentary evidence,14
summary of claims15 and issues to be resolved by the tribunal.16 After presenting their evidence in the
form of affidavits of witnesses,17 the parties submitted their respective memoranda/draft decisions.18

On October 19, 2001, the Arbitral Tribunal promulgated its Decision dated September 28, 2001,
awarding P62,760,558.49 to DSM Construction and P9,473,799.46 to Megaworld.19

Megaworld filed a Petition for Review under Rule 43 of the Rules of Civil Procedure before the Court
of Appeals. It faulted the Arbitral Tribunal for finding that DSM Construction achieved a 95.56% level
of accomplishment as of February 14, 2000; for absolving DSM Corporation of the consequences of
the alleged delay in the performance of its work; and for ruling that DSM Construction had complied
with the contractual requirements for filing requests for extension. Megaworld likewise questioned the
sufficiency of evidence to justify the awards for liquidated damages; the balance of the contract price;
the balance of amounts payable on account of the Interim Agreement of February 21, 2000; the amount
of P6,596,675.55 for variation orders; the amount of P29,380,902.35 as reimbursement for
preliminaries/loss and expense; the amount of P413,041.52 for labor escalation costs; and the balance
of the retention money in the amount of P14,700,000.00 despite its award of P11,820,000.00 under the
February 21, 2000, Interim Agreement. Finally, Megaworld claimed that the Arbitral Tribunal erred in
denying its claim for liquidated damages, expenses incurred for the cost of take-over work,
administrative expenses, and its recourse against PGAI and for limiting its recovery for rectification
work to only P9,197,863.55.20

On February 14, 2002, the Court of Appeals promulgated its Decision21 affirming that of the Arbitral
Tribunal. The court pointed out that only questions of law may be raised before it on appeal from an
award of the CIAC.22 That pronouncement notwithstanding, the Court of Appeals proceeded to review
the decision of the Arbitral Tribunal and found the same to be amply supported by evidence.23

Megaworld sought reconsideration of the Court of Appeals Decision arguing, among other things, that
the appellate court ignored the ruling in Metro Construction, Inc. v. Chatham Properties24 that the
review of the CIAC award may involve either questions of fact, law, or both fact and law.

The Court of Appeals denied the motion for reconsideration in its Resolution25 dated April 25, 2002.
While acknowledging that the findings of fact of the CIAC may be questioned in line with Metro
Construction,26 the appellate court stressed that the tribunals decision is not devoid of factual or
evidentiary support.

Megaworld elevated the case to this Court through the present Petition, advancing the following
grounds, viz:

THE COURT OF APPEALS IN EFFECT REFUSED TO HEED THE RULE LAID DOWN BY THIS
Honorable Court in the Metro Construction, INC. vs. Chatham properties, inc. case when it dismissed
mgais petition despite the grave questions of both fact and law brought before it by the petitioner.

II

the finding of the appellate court that the decision was based on substantial evidence adduced by both
parties sans any review of the record or of attachments of dsm is fatally wrong, such finding being
merely an adoption of the tribunals decision which, as earlier pointed out, was not supported by
competent, credible and admissible evidence.

III

the court of appeals seriously erred in giving blanket approval of all the unfounded claims and
conclusions of the ciac arbitral tribunals SEPTEMBER 28, 2001 decision to the detriment of
petitioners cardinal right to due process, particularly to its right to administrative due process.

IV

the findings and conclusions made by a highly partisan ciac arbitral tribunal have no basis on the
evidence on record. hence, the exception to the rule that only questions of law may be brought to the
honorable court is applicable in the case AT bar.27

Although Megaworld, at the outset,28 intimates that the case involves grave questions of both fact and
law, a cursory reading of the Petition reveals that, except for the amorphous advertence to
administrative due process, the alleged errors fundamentally involve only questions of fact.
Megaworlds plea for the Court to pass upon the findings of facts of the Arbitral Tribunal, which were
upheld by the appellate court, must perforce fail.

To jumpstart its bid, Megaworld exploits the Court of Appeals pronouncement in the assailed decision
that only questions of law may be raised before it from an award of the CIAC. The appellate court did
so, Megaworld continues, in evident disregard of Metro Construction.29

Under Section 19 of Executive Order No. 1008,30 the CIACs arbitral award "shall be final and
inappealable except on questions of law which shall be appealable to the Supreme Court." In Metro
Construction, however, this Court held that, with the modification of E.O. No. 1008 by subsequent
laws and issuances,31 decisions of the CIAC may be appealed to the Court of Appeals not only on
questions of law but also on questions of fact and mixed questions of law and fact.

Of such subsequent laws and issuances, only Section 1,32 Rule 43 of the 1997 Rules of Civil Procedure
expressly mentions the CIAC. While an argument may be made that procedural rules cannot modify
substantive law, adding in support thereof that Section 1, Rule 43 has increased the jurisdiction of the
Court of Appeals by expanding the scope of review of CIAC awards, or that it contravenes the rationale
for arbitration, extant from the record is the fact that no party raised such argument. Consequently, the
matter need not be delved into.

In any case, the attack against the merits of the Court of Appeals Decision must fail. Although Metro
Construction may have been unbeknownst to the appellate court when it promulgated its Decision, the
fact remains that, as noted therein,33 it reviewed the findings of facts of the CIAC and ruled that the
findings are amply supported by the evidence.

The Court of Appeals is presumed to have reviewed the case based on the Petition and its annexes, and
weighed them against the Comment of DSM Construction and the Decision of the Arbitral Tribunal to
arrive at the conclusion that the said Decision is based on substantial evidence. In administrative or
quasi-judicial bodies like the CIAC, a fact may be established if supported by substantial evidence or
that amount of relevant evidence which a reasonable mind might accept as adequate to justify a
conclusion.34

The tenability of the assailed Decision is clear from the following discussion of the arguments raised by
Megaworld before the Court of Appeals which significantly are the same arguments it has raised before
this Court.

Issue of Accomplishment Level

Megaworld contested the finding of 95.56% level of accomplishment by the Arbitral Tribunal, alleging
that the receipts DSM Construction issued for payments under the Interim Agreement show that the
latter only achieved 90% accomplishment up to the 31st floor while the 32nd to the 34th floors were only
60% completed.35 Megaworld insisted, therefore, that the level of accomplishment was nowhere near
90%.

DSM Construction countered that Megaworld, in claiming a level of accomplishment of only 90%,
contradicted its own Project Manager, TCGI,36 which came up with a different percentage of
accomplishment that are notably higher than Megaworlds computation.37

In resolving this issue, the Arbitral Tribunal relied on the computation of Davis Langdon & Seah
(DLS), the projects independent surveyor,38 which found the level of accomplishment as of February
14, 2000, to be 95.56%. DLSs computation is recited in Exhibit "NN",39 thus:

Architectural Finishing :40The 24th Progress Billing evaluated by DLS covering the period November
15, 1999 to December 15, 1999 over the Contract Price for Architectural Finishing
Works.Php213,658,888.7741 Php223,456,756.6842= 95.62%Kitchen Cabinets & Bedroom Closets:43The
9th Progress Billing evaluated by DLS covering the period December 1, 1999 to December 9, 1999
over the contract price for Kitchen Cabinet and Bedroom Closet.Php26,228,091.7344
Php28,556,915.1745= 91.84%Interior Finishing Works:46The 13th Progress Billing evaluated by DLS
covering the period January 8, 2000 to February 7, 2000 for the Interior Finishing Works over the
contract price for Interior Finishing Work.Php49,383,114.6747 Php50,685,416.5548= 95.55%
Php213,658,888.77 +Php26,228,091.72 +Php49,383,114.67
=289,270,295.17=95.56%Php223,456,756.68Php
28,556,915.17Php50,685,416.55302,699,097.40Clearly, thus, CIACs finding that the level of
accomplishment of DSM Construction as of February 12, 2002, stood at 95.56% was affirmed by the
Court of Appeals because it is supported by substantial evidence.

The Court of Appeals also noted that the Arbitral Tribunal did not give due course to all of DSM
Constructions claims. Indeed, the Arbitral Tribunal rejected the construction companys demand for
payment for subsequent works done after February 12, 2000, because Exhibit "OO," on which DSM
Constructions demand was based, does not bear any mark that it had been received by Megaworld.
Thus, the Arbitral Tribunal concluded that subsequent works up to September 22, 2000, when DSM
Construction supposedly stopped working on the project, had not been established.49

This Court observes that between the two contrasting claims of Megaworld and DSM Construction on
the percentage of work accomplishment, the Arbitral Tribunal instead accorded weight to the
assessment of DLS which is the project surveyor. Apart from being reasonable, DLSs evaluation is
impartial. Thus, as correctly pointed out by the Arbitral Tribunal, DLS rejected DSM Constructions
99% accomplishment claim when it limited its evaluation to only 95.56%.

Issues of Delay and Liquidated Damages

Next, Megaworld attributed the delay in the completion of the construction project solely to DSM
Construction. The latter countered that among the causes of delay was the lack of coordination among
trade contractors and the absence of a general contractor.50 Although the contract purportedly contains a
provision for the coordination of trade contractors, the lack of privity among them prevented
coordination such that DSM Construction could not require compliance on the part of the other trade
contractors.

The Arbitral Tribunal decided this question by turning to Section 2.01 of the General Conditions of the
Contract, which states:

2.01 SITE, ACCESS & WORKS

The Contractor shall accept the Site as found on the date for possession and at their own expense clear
the site of any debris which may have been left by the preceding occupants/contractors.

The Arbitral Tribunal held that Section 2.01 presupposes that on the date of possession by DSM
Construction of the work premises, the preceding contractor had already left the same.51 The tribunal
explained that the delay incurred by other trade contractors also resulted in the delay of the work of
DSM Construction.

It also pointed out that under Section 5.3 (1)52 of the Interim Agreement,53 Megaworld is required to
complete and turn over to DSM Construction preceding works for the latter to complete their works in
accordance with the Revised Work Schedule. Section 5.3 (1), the Arbitral Tribunal noted, even allows
DSM Construction to recover losses incurred on account of the standby time of DSMs
personnel/manpower or workers mobilized while Megaworld is not ready to turn over the preceding
works. The Arbitral Tribunal further held that, in accordance with Section 5.3 (2)54 of the Interim
Agreement, DSM Construction was entitled to an extension of time corresponding to the number of
days of delay reckoned from the time the preceding work item or area should have been turned over to
DSM Construction. Consequently, such delay, which is not exclusively imputable to DSM
Construction, negates the claim for liquidated damages by Megaworld.55

In affirming the Arbitral Tribunals disposition of the issues of delay and payment of liquidated
damages, the appellate court noted that the Arbitral Tribunal narrated the claims and defenses of both
DSM Construction and Megaworld before making an evaluation thereof and arriving at its
conclusion.56 Clearly, the evidence and arguments were carefully weighed to justify the said
disposition.

The Tribunals finding that the project had already been delayed even before DSM Construction
commenced its work is borne out by the evidence. In his letter, Exhibit X-2,57 Project Management
Consultant Eduardo C. Arrojado, conceded that the previous contractors had delayed the project, at the
same time faulting DSM Construction for incurring its own delay. Furthermore, the work of DSM
Construction pertaining as it did to the architectural and interior finishing stages as well as the supply
and installation of kitchen cabinets and closets, obviously related to the final details and completion
stage of the project. Thus, commencement of its task had to depend on the turn over of the complete
work of the prior contractors. Hence, the delay of the previous contractors resulted in the delay of DSM
Constructions work.

Issues of the Contract Price Balance and Retention Money

Megaworld also questioned the Arbitral Tribunals awards of P7,129,825.19 corresponding to the
balance of the contract price, and P11,820,000.00 pursuant to the Interim Agreement.58 Megaworld
alleged that DSM Construction was no longer entitled to the balance of the contract price and the
retention money after the latter received payments pursuant to the Interim Agreement in the amounts of
P5,444,553.18 for the 26th to the 28th floors, another P5,444,553.18 for the 29th to the 31st floors at a
90% completion rate, and P4,161,818.18 for the 32nd to the 34th floors which were 60% completed.
Megaworld also contended that since it spent more money to complete the scope of work of DSM
Construction, the latter was no longer entitled to any of the balance.

On the other hand, DSM Construction argued that the award was justified in view of the failure of
Megaworld to controvert the amount of P7,129,825.19 included in the Account Overview of DLS.
DSM Construction also emphasized that it was not claiming the entire P53 Million under the Interim
Agreement but only the amount corresponding to the actual work done. Even based on DLSs
computation, a total of P11,820,000.00 of retention money is still unpaid out of the 50% agreed to be
released under the Interim Agreement (P15,000,000.00 less P3,180,000.00 retention money or
P11,820,000.00 for the paid billings).59

The Arbitral Tribunal ruled that the balance claimed under the three contracts was based on what DSM
Construction had actually accomplished less the payments it had previously received. Considering that
the remaining works which were performed by another trade contractor, Deticio and Isabedra Builders,
were paid directly by Megaworld, no other cost for work accomplished in the Interim Agreement is due
DSM Construction except the retention money of P11,820,000.00.60
The Court of Appeals affirmed the award of the Arbitral Tribunal regarding the balance of the contract
price of P7,129,825.19 and the retention money of P11,820,000.00 to DSM Construction. The Court of
Appeals noted that the Arbitral Tribunal again narrated the claims and defenses of both DSM
Construction and Megaworld before arriving at its conclusion. The appellate court further stated that
the mere fact that the tribunal did not award the whole amount claimed by DSM Construction
(P12,820,000.00) and instead awarded only P11,820,000.00 belies Megaworlds allegation that the
tribunal adopted "hook, line and sinker" DSM Constructions claims.61

This Court finds the award of the balance of the contract price of P7,129,825.20 justified in view of
DLS explanation in Exhibit MM-362 that the amount of P7,129,825.20 represented the unpaid billing
for architectural, interior and kitchen billings before Megaworld and DSM Construction drafted the
Interim Agreement.

Issue of Variation Works

Megaworld also disputed before the Court of Appeals the P6,686,675.5563 award by the Arbitral
Tribunal for variation works. Variation works consist of the addition, omission or alteration to the kind,
quality or quantity of the works.64 DSM Construction originally claimed a total of P26,208,639.00 for
variation works done but, of this claim, the Arbitral Tribunal only awarded P6,686,675.55 in line with
the evaluation of DLS.

Megaworld conceded that DSM Construction performed additional works to the extent of
P5,036,252.81. However, Megaworld claimed that since it incurred expenses when it hired another
trade contractor to take over the works left uncompleted by DSM Construction, the latter lost its right
to claim such amount especially since DSM Construction did not comply with the documentation when
claiming variation works.65

DSM Construction asserted that the Arbitral Tribunal, in fact, should have awarded P26,208,639.00
instead of limiting the award to only P6,686,675.55 because it was not even disputed that variation
works were performed. It also contended that it cannot be faulted for the lack of documentation
because the fault lay on Megaworlds project manager who failed to forward the variation orders to
DLS.66

The Arbitral Tribunal ruled in favor of DSM Construction, holding that there was enough evidence to
prove that the contractor made a request for change or variation orders. The Arbitral Tribunal also
found the testimony of Engineer Eduardo C. Arrojado convincing, factual and balanced despite
Megaworlds attempt to discredit him. However, while the amount claimed for variation works was
P26,208,639.00, the Arbitral Tribunal limited the awarded to only P6,686,675.5567 since a closer
scrutiny of the other items indicated that some works were not performed.68

The appellate court upheld the award of the Arbitral Tribunal because the award was based not only on
the documentary exhibits prepared by DLS but on the testimony of Engineer Eduardo C. Arrojado, as
well.69

This Court is convinced that payments for variation works is due. Undoubtedly, variation works were
performed by DSM Construction. This was confirmed by Engineer Eduardo C. Arrojado who testified
that he recommended the payment for substantial additional works to DSM Construction. He further
stated that since time was of the essence in the completion of the project, there were variation orders
which were performed without the prior approval of the owner. However, he explained that this was a
common construction practice. Finally, he stated that he agreed with the evaluation of DLS.70

The testimony justified the Arbitral Tribunals reliance on the evaluation made by DLS which limited
the claim for variation works to P6,596,675.55.

Issue of Preliminaries/Loss and Expense

Megaworld also disputed the award of P29,380,902.35 for preliminaries/losses and expense.

The provision for preliminaries/loss and expense in the contract assumes a direct loss and/or expense
incurred in the regular progress of work for which the contractor would not be reimbursed under any
other provision of the contract.71 DSM Constructions claim for preliminaries/loss and expense in the
amount of P36,603,192.82 covered the loss and expense incurred on payroll, equipment rental,
materials and site clearing on account of such factors as delay in the execution of the works for causes
not attributable to DSM Construction.72

Megaworld refused to recognize DSM Constructions claim because the latter allegedly failed to
comply with Clause 6.16 of the Conditions of Contract, which imposes a two-month deadline for
submission of claims for preliminaries reckoned from "the happening of the event giving rise to the
loss and expense."73 DSM Construction, however, argued that the documentary evidence shows that out
of the four claims for preliminaries, only one (Exhibit MM-5 with an evaluation of P17,552,722.47),
covering the period August 1, 1998 to April 1999, was submitted beyond the two-months requirement.74
DSM Construction also pointed out that the two-month requirement for this claim was waived by
Megaworld through DLS when the latter recognized the validity of claims by coming up with an
evaluation of P17,552,722.47 for the period covered in Exhibit MM-5.75

The Arbitral Tribunal ruled that DSM Construction was entitled to extended preliminaries considering
that delay was not attributable to DSM Construction. The Arbitral Tribunal observed that Megaworld
did not present evidence to refute the claim for extended preliminaries which were previously evaluated
by DLS. However, after assessing the two previous evaluations by DLS, the tribunal ruled that the
claims for hauling and disposal and cleaning and clearing of debris should not be included in the
extended preliminaries. Hence, the Arbitral Tribunal reduced the amount of P44,051.62 from the claim
of P2,655,879.89 per Exhibit "MM-7," and P3,883,309.54 from the claim of P5,651,235.24 per Exhibit
"MM-8," such amounts being unnecessary.76

The appellate court affirmed the award, stressing the fact that the Arbitral Tribunal denied some of the
claims which it did not find valid.77

DSM Constructions entitlement to the payment for preliminaries was explained by Engineer Eduardo
C. Arrojado to be the necessary result of the extension of the contract between DSM Construction and
Megaworld.78 Notably, majority of the claims of DSM Construction was reduced by the Arbitral
Tribunal on the basis of Exhibit MM-479 or the Summary of Variation Order Status Report prepared by
DLS.

Although the Arbitral Tribunal ruled that DSM Construction was entitled to claim for preliminaries, the
award was not based on the claim of DSM Construction but on the evaluation made by DLS.
The foregoing disquisition adequately shows that the evidence on record supports the findings of facts
of the Arbitral Tribunal on which the Court of Appeals based its decision. In fact, although not all the
exhibits in the Arbitral Tribunal were presented before the Court of Appeals, the record of the appellate
court contains the operative facts and the substance of said exhibits, thus enabling the intelligent
disposition of the issues presented before it. This Court went over all the records, including the
exhibits, to ascertain whether the appellate court missed any crucial point. It did not.

The alleged undue favor accorded by the Arbitral Tribunal to DSM Construction is belied by the fact
that the Arbitral Tribunal did not grant all of DSM Constructions claims. In majority of DSM
Constructions claims, the Arbitral Tribunal awarded amounts lower than what DSM Construction
demanded. The Arbitral Tribunal also granted some of Megaworlds claims.80

Neither did the Court of Appeals merely "swallow hook, line and sinker" the award of the Arbitral
Tribunal. While the appellate court affirmed the decision of the Arbitral Tribunal, it also ruled in favor
of Megaworld when it limited DSM Constructions lien to only six units instead of all the
condominium units to which DSM was entitled under the Contract, rationalizing that the P62 Million
award can be covered by the value of the six units of the condominium project.81

Considering that the computations, as well as the propriety of the awards of the Arbitral Tribunal, are
unquestionably factual issues that have been discussed and ruled upon by Arbitral Tribunal and
affirmed by the Court of Appeals, we cannot depart from such findings. Findings of fact of
administrative agencies and quasi-judicial bodies, which have acquired expertise because their
jurisdiction is confined to specific matters, are generally accorded not only respect, but finality when
affirmed by the Court of Appeals.82

Megaworld, however, adamantly contends that the present case constitutes an exception to the above
rule because: (1) there is grave abuse of discretion in the appreciation of facts; (2) the judgment is
premised on misapprehension of facts; and, (3) the findings of fact of the Court of Appeals is premised
on the supposed absence of evidence and is contradicted by the evidence on record.83

We disagree. None of these flaws appear in this case. Grave abuse of discretion means the capricious or
whimsical exercise of judgment that is so patent and gross as to amount to an evasion of positive duty
or 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.84 No abuse
of discretion was established by Megaworld. On the contrary, what is apparent is Megaworlds effort to
attribute grave abuse of discretion to the Arbitral Tribunal simply because of the unfavorable judgment
against it. Megaworlds assertion that there was misapprehension of facts and that the evidence is
insufficient to support the decision is also untenable. The Decisions of the Arbitral Tribunal and the
Court of Appeals adequately explain the reasons therefor and are supported by substantial evidence.

Likewise unmeritorious is Megaworlds assertion that it was deprived of administrative due process.
The Arbitral Tribunal considered the arguments and the evidence submitted by both parties. That it
accorded greater weight to DSM Constructions evidence, by itself, does not constitute a denial of due
process.

WHEREFORE, the Petition is DENIED. The Decision dated February 14, 2001, of the Court of
Appeals is AFFIRMED. The Temporary Restraining Order issued by this Court on July 12, 2002, is
hereby LIFTED. Costs against Petitioner.
SO ORDERED.

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

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

Footnotes
1
Rollo, pp. 105-122. Penned by Associate Justice Eubolo G. Verzola, with Associate Justices
Rodrigo V. Cosico and Eliezer R. De Los Santos, concurring.
2
Id., at 129-183; CA Rollo, pp. 88-142.
3
Ibid. The Arbitral Tribunal was chaired by Ernesto S. De Castro with Regulus E. Cabote and
Lauro M. Cruz as members.
4
Rollo, pp. 133-134.
5
Id., at 135.
6
Id., at 134.
7
CA Rollo, p. 352.
8
Rollo, pp. 494-512.
9
Id., at 499.
10
Id., at 294-315.
11
Id., at 130.
12
Id., at 759-770.
13
Id., at 760-763.
14
Id., at 763-765.
15
Id., at 767.
16
Id., at 765-767.
17
Id., at 131.
18
Id., at 133.
19
Id., at 182-183.
20
Id., at 112-113.
21
Id., at 105-122.
22
Id., at 115.
23
Id., at 117.
24
G.R. No. 141897, September 24, 2001, 365 SCRA 697.
25
Rollo, pp. 125-127.
26
Supra, note 24.
27
Rollo, pp. 22-23.
28
Ibid.
29
Supra, note 24.
30
Creating an Arbitration Machinery in the Construction Industry of the Philippines. Otherwise
known as the Construction Industry Arbitration Law.
31
S.C. Circular No. 1-91; Revised Administrative Circular No. 1-95; B.P. Blg. 129, as amended
by R.A. 7802; Rule 43 of the 1997 Rules of Civil Procedure.
32
Rule 43 of the 1997 Rules of Civil Procedure. Section 1. Scope.- This Rule shall apply to
appeals form judgments or final orders of the Court of Tax Appeals and from awards,
judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the
exercise of its quasi-judicial functions. Among these agencies are the Civil Service
Commission, Central Board of Assessment Appeals, Securities and Exchange Commission,
Office of the President, Land Registration Authority, Social Security Commission, Civil
Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer, National
Electrification Administration, Energy Regulatory Board, National Telecommunications
Commission, Department of Agrarian Reform under Republic Act No. 6657, Government
Service Insurance System, Employees Compensation Commission, Agricultural Inventions
Board, Insurance Commission, Philippine Atomic Energy Commission, Board of Investments,
Construction Industry Arbitration Commission and voluntary arbitrators authorized by law
(emphasis supplied).
33
Rollo, p. 117.
34
Section 5, Rule 133 of the Revised Rules on Evidence; Ang Tibay v. Court of Industrial
Relations, 69 Phil. 63 (1936).
35
CA Rollo, p. 45.
36
Id., at 663.

Ref. No.Contract PackageContractor% Accomplishment To

Date1AARCHITECTURALDSM92.7501CKITCHEN CAB. &
CLOSETDSM92.4006INTERIOR FINISHINGDSM95.60037 Id., at 663.
38
Id., at 100-101.
39
Id., at 662; Arbitral Tribunal Record, Exhibit Envelope No. 2; Folder Captioned "EXHS. NN
to OO-2 & X-2."
40
Id., p. 397. Arbitral Tribunals Record, Exhibit Envelope No. 2; Folder Captioned "EXHS.
NN to OO-2 & X-2"; Exhibit "NN-1A".
41
Ibid.
42
Ibid.
43
Ibid. Arbitral Tribunal Record, Exhibit Envelope No. 2; Folder Captioned "EXHS. NN to
OO-2 & X-2"; Exhibit "NN-3".
44
Ibid.
45
Ibid.
46
Ibid. Arbitral Tribunal Record, Exhibit Envelope No. 2; Folder Captioned "EXHS. NN to
OO-2 & X-2"; Exhibit "NN-4".
47
Ibid.
48
Ibid.
49
Rollo, p. 117.
50
CA Rollo, pp. 665-667.
51
Id., at 101-107.
52
Section 5.3 TURN OVER OF PRECEDING WORK ITEMS OR AREA

1. MGAI shall complete and turn over to DSM preceding work items for the latter to
complete their works in accordance with the Revised Work Schedule. Losses incurred
by DSM by reason of MGAIs failure to turn over preceding works on account of
standby time of DSMs personnel/manpower or workers mobilized therein shall be
chargeable against MGAI based on the actual losses incurred certified by the Project
 Manager (CA Rollo, p. 303).
53
CA Rollo, pp. 299-305.
54
Section 5.3 TURN OVER OF PRECEDING WORK ITEMS OR AREA

....

2. Should MGAI fails (sic) to turn-over, DSM shall be entitled to an extension of time
corresponding to the number of days of delay measured from the time the preceding
work item or area should be turned-over until the same has been actually turn-over to
DSM (CA Rollo, p. 303).
55
CA Rollo, pp. 111-113.
56
Rollo, p. 118.
57
Arbitral Tribunal Record, Exhibit Envelope No. 2; Folder Captioned "EXHS. NN to OO-2 &
X-2".
58
CA Rollo, pp. 58-62.
59
Id., at 676-680.
60
Id., at 122.
61
Rollo, p. 119.
62
Arbitral Tribunal Record, Exhibit Folder No. 2; Folder Captioned "EXHS. V-MM-8".
63
Rollo, p. 164; CA Rollo, p. 62. The amount of P6,596,675.55 adverted to by Megaworld is
incorrect. The correct amount of P6,686,675.55 is based on the evaluation by DLS:

Item descriptionAmountExhibitsAgreed Variation WorksP1,650,422.73JJ-JJ-10Disputed

Variation WorksP5,036,252.82KK to KK45Total Claim Additional WorksP6,686,675.5564 CA
Rollo, p. 213.
65
Id., pp. 62-65.
66
Id., pp. 683-686.
67
Rollo, p. 120.
68
CA Rollo, pp. 122-128.
69
Rollo, pp. 119-120.
 70
Arbitral Tribunal Record No. 11; TSN, May 16, 2001, pp. 29-31.
71
Rollo, p. 169.
72
CA Rollo, pp. 687-693.
73
Id., at 65-67.
74
Id., at 688.
75
Id., at 689.
76
Rollo, p. 173.
77
Id., at 121.
78
Arbitral Tribunal Record, Exhibit Envelope No. 2; Folder Captioned "NN to OO-2 & X-2";
Affidavit of Engineer Eduardo C. Arrojado, p. 4.
79
Arbitral Tribunal Record, Exhibit Envelope No. 2; Folder Captioned "EXHS. V-MM-8".

Description of WorkDSMs Claim (Peso)DLS Evaluation (Peso)Labor cost adjustment2,220,

400.47160,602.00Clearing and Disposal for the ff:
FSI(16F-17F,T1 and 23F T2)
Asahi (16-20F T1 &16-26F T2)
Amperes(16-20F T1 & 16-26F T2)
Alen (16-20F T1 & 16-26F T2) 1,065,496.20637,575.85Cleaning and Disposal for the ff:
Asahi (16-30F T1)
Amperes (16-30F T1)
Alen (16-30F T1)428,812.4499,657.54Plastering @ elevator
lobbies1,754,749.211,118,161.14Damages at unit 9A H@) Closet-(8,899.44)Damages on
Archl. by Alen1,872,529.59325,691.22Del. Of Granite @ Col. Molding and Pedestal-
(163,998.49)Chippings of Mortar Drops178,361.70-Damage to Gypsum Ceiling and
Parquet806,653.34268,884.45Rectification Works from 26F- 40F
T12,545,983.47469,524.83Rectification Works from 23F-34F, T21,396,625.91409,820.10Rev.
to 9A & 10A, Tower1201,651.98199,946.73Addtl Metal Door @ Filter Room @
43F17,330.0817,330.08Painting of Damaged/Repaired Walls90,502.202,997.24Rectfn Works
on Damages incurred by Contractors439,784.31439,784.31Ext. Prelims for pd. Aug. 1, 98-Apr.
30,9919,548,710.4117,552,722.47Ext. Prelims for pd. May 1,99-Sep. 30,
997,962,984.457,408,425.9180 Rollo , pp. 182-183.

VI. Awards

CLAIMANTS [DSMs]CLAIMAwardOutstanding balance on 3 main

contractsP7,129,825.197,129,825.19Pursuant to 21 February 2000
Memorandum12,820,000.0011,820,000.00Variation Works26,208,639.006,686,675.55Labor
Escalation1,282,151.32413,041.52Preliminaries/Loss and Expense35,603,192.8229,380,902.35Earned
 Retention Money14,700,000.0014,700,000.00Subtotal97,743,808.3370,130,444.616% Interest for 6
months2,932,314.252,103,913.34Attorneys Fees250,000.000.00Total Claimants
Claim/AwardP100,926,122.5872,234,357.95
RESPONDENTS [MEGAWORLDs]Loss of ProfitP31,680,000.000.00Liquidated
Damages32,844,003.360.00Take over Works19,320,543.710.00Rectification
Works26,243,431.439,197,863.55Administration Expenses4,334,772.010.006% Interest for 6
months6,865,365.03275,935.91Attorneys Fees2,000,000.000.00Cost of
Arbitration1,000,000.000.00Total Respondent
Counterclaims/AwardP124,288,115.549,473,799.46Total Net Award to
Claimant P62,760,558.4981 Id., at 121.
82
Public Estates Authority v. Uy, G.R. Nos. 147933-34, December 12, 2001], 372 SCRA 180.
83
Rollo, p. 94.

84
Sinon v. Civil Service Commission, G.R. No. 101251, November 5, 1992, 215 SCRA 410.

THIRD DIVISION

[G.R. No. 141426. May 6, 2005]

ZENAIDA F. LANTING, petitioner, vs. HONORABLE OMBUDSMAN, ANTI-GRAFT

INVESTIGATOR OSCAR RAMOS, MAYOR LITO ATIENZA, EMMANUEL SISON, VIRGILIO
FORBES, CHARITO RUMBO, DIRECTOR ERLINDA MAGALONG and ERNESTO SAW, JR.,
respondents.

DECISION

SANDOVAL-GUTIERREZ, J.:

For our resolution is the petition for review on certiorari assailing the Resolutions dated September 9,
1999[1] and January 6, 2000 of the Court of Appeals dismissing petitioners petition for certiorari and
mandamus in CA-G.R. SP No. 54724.

The facts of the case are as follows:

Zenaida F. Lanting, petitioner, was the Administrative Officer IV of the City Council of Manila. She
filed with the Office of the Ombudsman an affidavit-complaint [2] dated May 12, 1998, docketed as
Case No. OMB-0-98-0965, charging then Manila Vice-Mayor Jose Atienza, Jr., now City Mayor,
Emmanuel Sison, Secretary to the City Council, and Charito Rumbo, Human Resource Management
Officer III, herein respondents, with violation of Republic Act No. 3019 (the Anti-Graft and Corrupt
Practices Act). She alleged that these city officials unlawfully and feloniously appointed Ernesto Saw,
Jr., a Chinese citizen working in Taiwan, and brother-in-law of Charito Rumbo, to the position of
Researcher in the City Council.

In the same complaint, petitioner further alleged that respondents fraudulently effected the publication
of a vacant position (Administrative Officer V) in the City Council, in violation of Republic Act No.
7041.[3] Petitioner also questioned the appointments of Percival Magalong as Utility I; Atty. Flora
Aquino-Togonon as Administrative Officer V; and three relatives of Charito Rumbo, namely: Eduardo
Antolin, Arlyn M. Rumbo and Maricar V. Antolin as Researchers/Consultants. Petitioner likewise
denounced Erlinda Magalong, Civil Service Commission (CSC) Director II, for employing Percival
Magalong, her brother, in her office at the Civil Service Field Office, GSIS Building, Manila.

Petitioner characterized respondents acts as unlawful, odious and despicable criminal activities[4] and
prayed that the Office of the Ombudsman proceed with the preliminary investigation with dispatch.[5]

On August 4, 1998, respondents city officials filed their joint counter-affidavit[6] denying petitioners
charges. They averred that Ernesto Saw, Jr. is a Filipino citizen as shown by his birth certificate and
Personnel Data Sheet. Assuming arguendo that he is a Chinese citizen, such fact alone would not
disqualify him from being employed in the City of Manila, there being no law prohibiting a foreigner
from being employed as researcher or consultant in the government.

For her part, CSC Director Magalong also denied the charge against her, contending that she was not
the one who appointed Percival Magalong.

Ernesto Saw, Jr. did not file his counter-affidavit.

On April 8, 1999, Oscar P. Ramos, Graft Investigator Officer I, issued a Resolution recommending that
petitioners complaint be dismissed. The Resolution[7] was reviewed by Assistant Ombudsman Abelardo
L. Aportadera, Jr. and approved by then Ombudsman Aniano A. Desierto on June 25, 1999. The
Resolution partly reads:

xxx

All told, we are convinced that the evidence does not warrant the filing of Anti-Graft and Corrupt
Practices, among others, charges against respondents.

The appointment of researcher/consultant is governed by CSC Memorandum Circular No. 27, s. 1993,
which states that

1. x x x

(c) The duties enumerated in the consultancy contract are mainly advisory in nature.

2. Services rendered pursuant to a consultancy contract shall not be considered government

services and, therefore, not covered by the Civil Service Law, rules and regulations
(Folder 1, page 42, Record, underlining supplied).

The matter of alleged ghost employee Mr. Saw for the charge of Estafa thru Falsification of Public
Documents cannot be pursued. COA and City Accountants silence and its allowance of the prepared
and approved payrolls of City Council, which include the salaries and benefits of Mr. Saw and other
consultants, breathes with it the presumption of regularity.

Saws employment x x x must not prejudice respondents. His 201 file reflects Filipino citizenship. x x x.
As to the (charge of) fraud and deception in the publication of a vacant position allegedly in violation
of R.A. 7041, the law reads:

'Sec. 5. Jurisdiction The Civil Service Commission shall have original and exclusive jurisdiction to
investigate and recommend for prosecution all cases of violation of this Act; provided, however, that in
case the violation is alleged to have been committed by the Chairman, and/or any of the
Commissioners of the Civil Service Commission, the Ombudsman shall have original and exclusive
jurisdiction over the investigation and prosecution of said alleged violation. (underlining supplied)

The Office of the Ombudsman, therefore, has no jurisdiction on the issue. It is the CSC that has
exclusive and original jurisdiction.

The issue over Percival Magalongs appointment and detail at CSC Field Office also stands on weak
grounds. Record shows that Percival was not detailed by Atty. Sison but rather required as part of x x x
regular work assignment to perform messengerial work (Memorandum dated 02 January 1997 of Atty.
Sison). The non-entry of said Memorandum to the City Council Record Book is not illegal per se
inasmuch as the matter of recording is not strictly observed as an internal office regulation.

There is no evidence on record that CSC Director Magalong appointed her brother. She was not the one
who appointed Percival. It was the Vice-Mayor who appointed him.

The appointment of Atty. Togonon to the position of Administrative Officer V has been upheld by the
CSC in its Letter dated 14 July 1998. All doubts as to the legality of actions taken by the appointing
authority, therefore, have been erased. We could do no less than to conform to the ruling of the CSC.

Record is also bereft of any evidence of Usurpation of Official Function. The charge is a mere
allegation.

WHEREFORE, premises considered, it is respectfully recommended that all the charges against
respondents herein be dismissed.

On July 14, 1999, petitioner filed a motion for reconsideration of the above Resolution on the ground
that Investigator Oscar Ramos conveniently and intentionally skirted the issue of falsification of public
documents which are crystal clear in my complaint.[8] She then prayed for a re-investigation of her
complaint by a Special Prosecutor.[9]

On July 26, 1999, the Ombudsman denied petitioners motion for lack of merit.

Dissatisfied, petitioner filed with the Court of Appeals a petition for certiorari and mandamus,
docketed as CA-G.R. SP No. 54724.

On September 9, 1999, the Court of Appeals issued a Resolution dismissing the petition on the ground
that it has no jurisdiction over the subject matter of the assailed Ombudsmans Resolution. The
Appellate Court held:

Considering the mandate of the second paragraph of Section 14 of Republic Act No. 6770, otherwise
known as The Ombudsman Act of 1989, which provides that No court shall hear any appeal or
application for remedy against the decision or findings of the Ombudsman, except the Supreme Court
on pure question of law, the Court resolved to DISMISS the petition for lack of jurisdiction. And, even
from the standpoint of procedure, the petition should be dismissed for suffering some procedural errors,
to wit:

1. Non-submission of the proof of service (Sec. 13, Rule 13; Sec. 2 (c), Rule 56; Sec. 3, par. 2, Rule 46
x x x, 1997 Rules of Civil Procedure);

2. Failure to state the material dates showing that the petition was filed on time, i.e., the date when the
assailed resolution dated April 8, 1999 was received (Sec. 4, Rule 65, as amended by Supreme Court
Circular No. 39-98 in Bar Matter No. 803); and,

3. Insufficient verification of the petition x x x.

SO ORDERED.[10]

Petitioner seasonably filed a motion for reconsideration but was denied by the Court of Appeals in its
Resolution of January 5, 2000, thus:

Although petitioner had seasonably corrected the procedural errors the original petition suffered, as
pointed out in the Resolution of September 9, 1999, through the motion for reconsideration, still the
petition for certiorari and mandamus could not be given due course by this court for lack of concurrent
jurisdiction with the Supreme Court over the subject matter of the petition for the issuance of the writ
of certiorari and mandamus against the Office of the Ombudsman for dismissing petitioners criminal
complaint for anti-graft and falsification of public documents. Except in administrative cases, as
ruled in Fabian vs. Desierto (295 SCRA 470), the Congress, in Republic Act No. 6770, Section 14, 2nd
par., designated only the Supreme Court as the appellate authority in Ombudsman decisions in
criminal cases. Under the said law, the jurisdiction of the Supreme Court is original and exclusive. As
further restriction, the law also provides that No writ of injunction shall be issued by any court to delay
an investigation being conducted by the Ombudsman under this Act, unless there is a prima facie
evidence that the subject matter of the investigation is outside the jurisdiction of the Office of the
Ombudsman (Section 14, 1st par., R.A. No. 6770).

For the jurisdictional reason stated above, the motion for reconsideration must be, as it is hereby,
DENIED.

SO ORDERED.[11] (underscoring supplied)

Hence, the instant recourse raising this sole issue:

WHETHER OR NOT THE COURT OF APPEALS GRIEVOUSLY ERRED IN DISMISSING

PETITIONERS PETITION FOR CERTIORARI AND MANDAMUS ON THE GROUND OF LACK OF
JURISDICTION BY INVOKING SECTION 14, PARAGRAPH 2, OF REPUBLIC ACT NO. 6770.

Petitioner contends that her complaint before the Ombudsman was not limited to violation of the Anti-
Graft and Corrupt Practices Act, but likewise includes acts constituting ground for administrative
complaint under Sec. 1, Rule III of Administrative Order No. 07 of the Ombudsman.[12] Thus, the Court
of Appeals should have taken cognizance of her petition, applying this Courts ruling in Fabian vs.
Desierto.[13]

The instant petition is bereft of merit.

Petitioners complaint-affidavit before the Office of the Ombudsman is for violation of the Anti-Graft
and Corrupt Practices Acts. It is not an administrative complaint. Nowhere in her complaint did she
allege administrative offenses, such as dishonesty or misconduct on the part of respondents.

It bears stressing that the allegations in petitioners complaint describe respondents actuations as willful,
felonious, unlawful, odious and despicable criminal activities. In her motion for reconsideration of the
Ombudsmans Resolution, petitioner claimed that Graft Investigator Ramos skirted the issue of
falsification of public documents which is crystal clear in my complaint.[14] Likewise, in her
petition in CA-G.R. SP No. 54274, petitioner sought to nullify the resolution of the Honorable
Ombudsman dated April 8, 1999 dismissing petitioners complaint for anti-graft and falsification of
public documents and to direct respondent Ombudsman to give due course to the complaint.[15]

Considering that petitioners complaint is criminal in nature, this Court has the sole authority to review
the Ombudsmans Resolutions on pure question of law as expressly mandated in Section 14, 2nd
paragraph of R.A. 6770,[16] which provides:

Sec. 14. Restrictions. x x x.

No court shall hear any appeal or application for remedy against the decision or findings of the
Ombudsman, except the Supreme Court on pure question of law.

In Fabian vs. Desierto,[17] we held that only appeals from the decisions of the Office of the
Ombudsman in administrative disciplinary cases should be taken to the Court of Appeals under the
provisions of Rule 43 (of the 1997 Revised Rules of Civil Procedure). We reiterated this ruling in
Namuhe vs. Ombudsman[18] and recently in Barata vs. Abalos, Jr.[19] and Coronel vs. Aniano Desierto,
as Ombudsman, and Pedro Sausal, Jr.[20]

Therefore, the Court of Appeals, in issuing its questioned Resolutions, did not commit grave abuse of
discretion. Clearly, it has no jurisdiction over petitioners criminal action. As earlier mentioned,
jurisdiction lies with this Court.

WHEREFORE, the petition for review on certiorari is hereby DENIED. Costs against petitioner.

SO ORDERED.

Panganiban, (Chairman), Corona, Carpio-Morales, and Garcia, JJ., concur.

Rollo at 28-29. Per Associate Justice Teodoro P. Regino, retired, with Associate Justice Salome A.
[1]
Montoya, retired, and Justice Conrado M. Vasquez, Jr., concurring.
[2] Id. at 33.

[3] Entitled An Act Requiring Regular Publication of Existing Vacant Positions in Government Offices.

[4] Rollo at 38.

[5] Id. at 39.

[6] Id. at 51.

[7] Id. at 58.

[8] Id. at 68.

[9] Id. at 66.

[10] Id. at 28-29.

[11] Id. at 31-32.

[12] Id. at 20-21.

[13] G.R. No. 129742, September 16, 1998, 295 SCRA 470.

[14] Rollo at 63.

[15] Id. at 73-74.

[16] The Ombudsman Act of 1989.

[17] G.R. No. 129742, September 16, 1998, 295 SCRA 470.

G.R. No. 124965, October 29, 1998, 298 SCRA 298 consolidated with G.R. Nos. 124932 &
[18]
124913.

[19] G.R. No. 142888, June 6, 2001, 358 SCRA 575.

[20] G.R. No. 149022, April 8, 2003.

FIRST DIVISION
JOWETT K. GOLANGCO,

Petitioner,

- versus -

ATTY. JONE B. FUNG,

Respondent.

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

OFFICE OF THE OMBUDSMAN,

Petitioner,

- versus -
HON. COURT OF APPEALS and ATTY. JONE B. FUNG,

Respondents. G.R. No. 147640

G.R. No. 147762

Present:

PANGANIBAN, C.J.

Chairperson,

YNARES-SANTIAGO,

AUSTRIA-MARTINEZ,

CALLEJO, SR., and

CHICO-NAZARIO, JJ.

Promulgated:

October 12, 2006x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

- - -x

DECISION

CHICO-NAZARIO, J.:

Petitioners Jowett K. Golangco (Golangco) and the Office of the Ombudsman, in

this consolidated Petitions for Review under Rule 45 of the Rules of Court, assail the
Decision[1] of the Court of Appeals in CA-G.R. SP No. 57418 dated 24 August 2000
and its Resolution[2] dated 28 March 2001 setting aside the Resolution dated 13 March
1995 and the Order dated 25 September 1996 of the Office of the Ombudsman in OMB-
ADM-0-93-0149. The assailed Decision also directed the Office of the Ombudsman to
cause the withdrawal of the Information it filed with the Regional Trial Court (RTC) of
Manila, Branch 38 entitled, People of the Philippines v. Atty. Jone B. Fung, docketed as
Criminal Case No. 96-149444. The said Resolution and Order of the Office of the
Ombudsman found Atty. Jone B. Fung (respondent) guilty of oppression, gross
inefficiency, gross neglect of duty and grave misconduct and imposed upon him the
penalty of dismissal from government service.

Respondent is an employee of the Philippine Overseas Employment

Administration (POEA) and was, at that time, assigned as Officer-In-Charge of the
Operations and Surveillance Division, Anti-Illegal Recruitment Branch, Licensing and
Regulation Office, under the auspices of the Department of Labor and Employment
(DOLE).

On 1 February 1993, then DOLE Secretary Nieves Confesor received a letter from
then Senator Ernesto Maceda bringing to her attention a letter-complaint of a certain
Edwin Belarmino, an applicant for overseas employment with the Golangco and
Monteverde recruitment agency [G&M (Phil.) Inc.]. In the letter-complaint, Belarmino
alleged that he was required by the recruitment agency to pay P20,000.00 as initial
payment of the total recruitment fee of P55,000.00 before his application as factory
worker in Taiwan could be processed.

The DOLE Secretary referred the letter-complaint to the POEA Administrator

who instructed the POEA Licensing and Regulation Office, headed by respondent, to
conduct an on-the-spot investigation of the activities of G&M (Phil.) Inc. and to verify
in particular the placement fee being charged as alleged in the letter-complaint.
Respondent was likewise directed to conduct a discreet surveillance of the recruitment
agency.
 On 8 February 1993, some inspectors of the POEA Licensing and Regulation
Office went to the office of G&M (Phil.) Inc. and inquired from petitioner Golangco, the
President of G&M (Phil.) Inc., about the allegation that the agency collected excessive
fees from its applicants. Petitioner Golangco denied such allegation.

On 10 February 1993, respondent dispatched SPO4 Domingo Bonita and SPO2

Alfonso Zacarias, PNP-CIS operatives, to perform a surveillance operation on the
activities of the agency and to submit a written report of their findings and
recommendations.

The PNP-CIS operatives proceeded to the premises of G&M (Phil.) Inc. located at
426 J. Nepomuceno St., San Miguel, Manila, where they posed as applicant-workers for
Taiwan. They were entertained by Elizabeth Encenada (Encenada), who introduced
herself as an employee of the agency. She gave them bio-data forms to fill up and a list
of documents to prepare. The bio-data forms bore the letterhead and the control numbers
of G&M (Phil.) Inc. Encenada informed the operatives that the total job placement fee
per applicant was P55,000.00 payable as follows: P7,000.00 downpayment, P20,000.00
to be paid after submission of the requirements, and P28,000.00 payable at the airport
prior to departure for Taiwan.

As a result of their surveillance, the operatives recommended that an entrapment

operation be conducted on the employees of the agency.
 On 15 February 1993, a joint POEA-CIS team headed by respondent with eight
others as members, including SPO4 Bonita and SPO2 Zacarias, proceeded to the
premises of G&M (Phil.) Inc. to conduct the said operation. SPO4 Bonita was
entertained by Encenada. Thereafter, SPO4 Bonita handed P7,000.00 to Encenada as
initial payment of the placement fee of P55,000.00. When Encenada received the money,
she was arrested by the team.

During the arrest of Encenada, petitioner Golangco was not around. When he
arrived, he, too, was arrested by the POEA-CIS team and was brought to the POEA
Headquarters for investigation.

Petitioner Golangco left the POEA premises at around 7:30 p.m. after the
termination of the investigation.

Subsequently, petitioner Golangco and Encenada were charged with violation of

Articles 29, 32 and 34(a) of the Labor Code. Thereafter, Senior State Prosecutor Romeo
A. Danosos issued a Resolution finding probable cause against Encenada for violations
of Articles 32 and 34(a) of the Labor Code, and dismissing all the charges against
petitioner Golangco.
 Administrative cases were also hurled against G&M (Phil.) Inc. for violations of
the Labor Code. However, the cases were dismissed based on the finding that there was
no evidence adduced showing that the agency was involved in the illegal acts of
Encenada.

Aggrieved by his arrest, petitioner Golangco filed a criminal complaint against

respondent before the Office of the Ombudsman for arbitrary detention and violation of
Section 3, paragraphs (a) and (e) of Republic Act No. 3019. The case was docketed as
OMB-0-93-0407. An administrative complaint for oppression, abuse of authority, gross
inefficiency, gross neglect of duty and grave misconduct arising from the same incident
was likewise filed against respondent which was docketed as OMB-ADM-0-93-0149.

In a Resolution dated 9 June 1993, Graft Investigation Officer (GIO) II Mothalib

C. Onos (GIO Onos) recommended the dismissal of the criminal complaint against
respondent in OMB-0-93-0407. This recommendation was approved by Overall Deputy
Ombudsman Francisco A. Villa in a Resolution dated 15 July 1993. Petitioner Golangco
filed a motion for reconsideration of the resolution of dismissal which was denied by
GIO Onos in an Order dated 16 September 1993 and approved by Overall Deputy
Ombudsman Francisco A. Villa on 28 October 1993.

Unfazed by the denial of his motion for reconsideration, petitioner Golangco filed
a Petition for Certiorari before this Court entitled, Jowett K. Golangco v. Office of the
Ombudsman, et al. docketed as G.R. No. 112857.
 In a Resolution dated 24 January 1994, this Court dismissed the petition.
Petitioner Golangco filed a motion for reconsideration of the said resolution which this
Court denied in a Resolution dated 16 March 1994.

In the meantime, the administrative complaint against respondent, docketed as

OMB-ADM-0-93-0149, proceeded independently of the criminal complaint. In a
Resolution dated 13 March 1995, GIO II Celso R. Dao found respondent guilty of the
administrative charges against him and recommended his dismissal from the service for
cause with the accessory penalties of forfeiture of his leave credits and retirement
benefits and disqualification from further re-employment in the government. This
Resolution was disapproved by Assistant Ombudsman Abelardo L. Aportadera, Jr. who
recommended the reassignment of the case to another graft investigating officer so that
the administrative aspect of the case can be reconciled with the facts found in the
criminal aspect of the case. The recommendation of Assistant Ombudsman Abelardo L.
Aportadera, Jr. was later approved by Overall Deputy Ombudsman Francisco A. Villa
and the case was reassigned to GIO Onos.

Convinced that the administrative complaint against respondent was bereft of

evidence, GIO Onos, in a Resolution dated 17 May 1995, recommended the dismissal of
the same which was approved by Assistant Ombudsman Abelardo Aportadera, Jr. by
authority of then Acting Ombudsman Francisco A. Villa on 14 June 1995.
 Petitioner Golangco filed a motion for reconsideration of the Resolution dated 17
May 1995, which was denied by GIO Onos in an Order dated 9 August 1995.

When Aniano A. Desierto assumed the Office of the Ombudsman, he referred the
Order dated 9 August 1995 of GIO Onos to the Office of the Special Prosecutor for
further study.

Special Prosecution Officer I Lemuel M. De Guzman (De Guzman), to whom the

case was assigned, issued a Memorandum dated 22 January 1996 finding probable cause
against petitioner Golangco for violation of Section 3(e) of Republic Act No. 3019.
Thus, De Guzman recommended to Ombudsman Aniano A. Desierto that the
Resolutions dated 9 June 1993 and 16 September 1993 in the criminal complaint
docketed as OMB-0-93-0407 be set aside, and that the information he prepared indicting
respondent before the RTC for violating Section 3(e) of Republic Act No. 3019 to be
approved. De Guzman also recommended that GIO Onos Resolution dated 9 August
1996 dismissing the administrative complaint against respondent be disapproved; that
the Resolution of the Overall Deputy Ombudsman dated 17 May 1995 be set aside; that
petitioner Golangcos motion for reconsideration be given due course; and that GIO Daos
Resolution dated 13 March 1995 finding respondent guilty of the administrative charge
be approved.

On 12 February 1996, Ombudsman Desierto approved the Information charging

respondent with violation of Section 3(e) of Republic Act No. 3019 as well as the
Resolution dated 13 March 1995 of GIO Dao finding respondent guilty of the
administrative charges filed against him. Ombudsman Desierto disapproved GIO Onos
Resolution dated 17 May 1995 recommending the dismissal of the administrative
complaint against respondent, which, as earlier stated, had already been approved by
Assistant Ombudsman Aportadera by authority of then Acting Ombudsman Villa.

With the Ombudsmans approval of the Information prepared by De Guzman, said

information was subsequently filed before the RTC, Branch 38, Manila, docketed as
Criminal Case No. 96-149144.

Respondent filed a Motion for Reconsideration of GIO Daos Resolution dated 13

March 1995. GIO Dao denied the motion in an Order dated 25 September 1996. The
Order of Denial was later approved by Ombudsman Desierto on 24 February 1997.

Disgruntled with the actions of the Ombudsman in OMB-ADM-0-93-0149,

respondent filed a Petition for Review on Certiorari with this Court impugning the
validity of the foregoing Resolution and Order adjudging him guilty of oppression, gross
inefficiency, gross neglect of duty and grave misconduct. The petition, docketed as G.R.
No. 112857, was later referred to the Court of Appeals based on the doctrine laid down
in Fabian v. Hon. Desierto[3] which vested in the Court of Appeals the appellate
jurisdiction over decisions of the Ombudsman pertaining to administrative disciplinary
cases.
 In a Decision dated 24 August 2000, the Court of Appeals reversed the ruling of
the Ombudsman. It likewise directed the Ombudsman to cause the withdrawal of the
information filed with the RTC of Manila, Branch 38, in the criminal case filed against
respondent, docketed as Criminal Case No. 96-149444.

Petitioner Golangco and the Office of the Ombudsman separately filed motions
for reconsideration of the decision. These motions were denied by the Court of Appeals
in a Resolution dated 28 March 2001.

Hence, these petitions.

In G.R. No. 147640, petitioner Golangco raises the following issues:

WHETHER OR NOT THE COURT OF APPEALS ERRED ON A MATTER OF LAW

WHEN IT DECLARED THAT THE RESPONDENT HAD PROBABLE CAUSE TO
ORDER PETITIONERS WARRANTLESS ARREST.

II

WHETHER OR NOT THE COURT OF APPEALS ERRED IN GIVING WEIGHT

AND RESPECT TO THE OPINION OF THE OFFICE OF THE SOLICITOR
GENERAL AND IN CONSIDERING IT AS AN EX-OFFICIO COUNSEL FOR THE
OFFICE OF THE OMBUDSMAN.

III

WHETHER OR NOT THE COURT OF APPEALS ERRED AND EXCEEDED ITS

AUTHORITY IN, LIKEWISE, RULING ON THE CRIMINAL ASPECT OF THE
 CASE IN DISREGARD OF THIS HONORABLE COURTS RESOLUTION ISSUED
IN G.R. NO. 128742 DATED FEBRUARY 14 2000.

In G.R. No. 147762, the Office of the Ombudsman submits the following issues:

WHETHER OR NOT THE APPELLATE COURT A QUO HAS JURISDICTION TO

REVIEW THE FINDINGS OF PROBABLE CAUSE BY THE OMBUDSMAN IN
THE CRIMINAL CASE OMB-0-93-0407, MUCH LESS DIRECT THE LATTER TO
WITHDRAW SAID CASE ALREADY FILED WITH REGIONAL TRIAL COURT,
NOTWITHSTANDING THAT ITS APPELLATE JURISDICTION PERTAINS ONLY
TO THE ADMINISTRATIVE DISCIPLINARY CASE OMB-ADM-0-93-0149 WHICH
IS DISTINCT AND INDEPENDENT OF SAID CRIMINAL CASE.

II

WHETHER OR NOT THE APPELLATE COURT A QUO GRAVELY ERRED IN

FINDING THAT PRIVATE RESPONDENT EFFECTED A VALID WARRANTLESS
ARREST ON A DULY-LICENSED RECRUITER FOR ILLEGAL TRANSFER OF
RECRUITMENT LICENSE OR AUTHORITY, AS DEFINED AND PENALIZED
UNDER ARTICLES 29 AND 39 (B) OF THE LABOR CODE, AS AMENDED, EVEN
THOUGH SAID RECRUITER WAS NOT ACTUALLY COMMITTING OR
ATTEMPTING TO COMMIT SAID OFFENSE AT THE TIME OF THE ARREST.

Petitioners Golangco and the Office of the Ombudsman posit that the Court of
Appeals erred in annulling the Resolution of the Ombudsman and in ruling that
respondent is not guilty of oppression, gross inefficiency, gross neglect of duty and
grave misconduct for ordering the arrest and detention of petitioner Golangco. In
support of this claim, petitioners insist that respondent failed to comply with the
constitutional and procedural requirement when he effected petitioner Golangcos arrest
without any valid warrant of arrest. Likewise, respondent cannot validly arrest petitioner
Golangco without warrant as the latter did not commit any crime when he was arrested.
Since the arrest was not lawful, ergo, respondent deserves the penalty of dismissal from
service.

Respondent is charged with an administrative case for oppression, gross

inefficiency, gross neglect of duty and grave misconduct arising from the arrest incident
of petitioner Golangco.

Oppression has been defined as an act of cruelty, severity, unlawful exaction,

domination or excessive use of authority.[4]

Gross inefficiency is closely related to gross neglect, for both involve specific acts
of omission resulting in damage to another.[5]

Gross neglect of duty or gross negligence refers to negligence characterized by

the want of even slight care, acting or omitting to act in a situation where there is a duty
to act, not inadvertently but willfully and intentionally, with a conscious indifference to
consequences insofar as other persons may be affected.[6] It is the omission of that care
which even inattentive and thoughtless persons never fail to take on their own property.
[7] In cases involving public officials, there is gross negligence when a breach of duty is
flagrant and palpable.[8]

The Court defined misconduct as an intentional wrongdoing or deliberate

violation of a rule of law or standard of behavior, especially by a government official.[9]
As differentiated from simple misconduct, in grave misconduct the elements of
corruption, clear intent to violate the law or flagrant disregard of established rule, must
be manifest.[10]

No such acts or omissions as defined has been committed by respondent.

The attendant circumstances leading to the arrest of Encenada and petitioner

Golangco was a result of the surveillance and entrapment operations efficiently planned
and carried out by POEA-CIS team headed by respondent. It will be recalled that the
arrest incident started with the letter complaint against G&M (Phil.) Inc. of then Senator
Ernesto Maceda to then Labor Secretary Confessor which the latter referred to the
POEA. In turn, the POEA Administrator ordered a surveillance and investigation of
G&M (Phil.) Inc. to be conducted by a joint POEA-CIS team headed by respondent. The
surveillance and investigation operations established the following facts: that Encenada
permanently occupied a table of her own at G&M (Phil.) Inc.; and that she conducted
recruitment activities thereat by interviewing, screening and collecting payments and
documents from the prospective applicants of G&M (Phil.) Inc.; and that Encenada was
closely associating with the other employees of the agency and was discussing with the
wife of petitioner Golangco matters relating to the employment status of applicants.
These attendant circumstances and the fact that Encenada was not an employee included
in the list of personnel submitted by the agency to the POEA to conduct recruitment
activities, gave respondent and the POEA-CIS operatives more than reasonable ground
to sustain the belief that petitioner Golangco authorized and allowed the illegal activities
of Encenada inside the agency thereby violating Article 29 of the Labor Code which
provides:
 Article 29. Non-transferability of licence or authority-

No license or authority shall be used directly or indirectly by any person other

than the one in whose favor it was issued or at any place other than that stated in the
license or authority, nor may such license or authority be transferred, conveyed or
assigned to any other person or entity. Any transfer of business address, appointment or
designation of any agent or representative including the establishment of additional
offices anywhere shall be subject to the prior approval of the Department of Labor.

That respondent honestly believed that petitioner Golangco was violating Article
29 of the Labor Code when the arrest was made can be gleaned from respondents
opinion on the applicability of the said provision embodied in his Memorandum dated
10 May 1995 sent to his superior, the Officer-In-Charge of the Licensing and Regulation
Office, POEA, viz:

This Office could not close its eyes (from) the prevalent malpractices committed
by the licensed agencies of simply engaging unregistered employees in their recruitment
business for purposes of collecting money from unwary job seekers and then later, deny
them as its employees in order to escape from liability. This is exactly what was
envisioned under Article 29 of the Labor Code. Otherwise, said provision is just a
useless provision.[11]

Verily, from the foregoing disquisition, the conduct of respondent in arresting

petitioner Golangco was far from being oppressive, malicious, grossly negligent,
inefficient or abusive. On the contrary, respondent was just doing his legal duty as a
government official tasked with enforcing the law. On this score, Sanders v. Veridiano II
[12] is quite relevant:
 [E]ven under the law of public officers, the acts of the petitioners are protected by the
presumption of good faith, which has not been overturned by the private respondents.
Even mistakes concededly committed by such public officers are not actionable as long
as it is not shown that they were motivated by malice or gross negligence amounting to
bad faith.

Perforce, the Court of Appeals did not err when it held that respondent is not
liable for the administrative charge hurled against him.

Likewise, petitioners Golangco and the Office of the Ombudsman assail the
actuation of the Court of Appeals in taking cognizance of the criminal case against
respondent and directing the Office of the Ombudsman to withdraw Criminal Case No.
96-149144. This, according to petitioners, is in violation of established jurisprudence
stating that the Court of Appeals has no authority to review the finding of probable cause
by the Office of the Ombudsman.

The Court agrees with the petitioners.

The Court of Appeals has jurisdiction over orders, directives and decisions of the
Office of the Ombudsman in administrative disciplinary cases only.[13] It cannot,
therefore, review the orders, directives or decisions of the Office of the Ombudsman in
criminal or non-administrative cases.
 In Kuizon v. Desierto,[14] this Court clarified:

The appellate court correctly ruled that its jurisdiction extends only to decisions of the
Office of the Ombudsman in administrative cases. In the Fabian case, we ruled that
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 Civil
Procedure. It bears stressing that when we declared Section 27 of Republic Act No. 6770
as unconstitutional, we categorically stated that said provision is involved only
whenever an appeal by certiorari under Rule 45 is taken from a decision in an
administrative disciplinary action. It cannot be taken into account where an original
action for certiorari under Rule 65 is resorted to as a remedy for judicial review, such as
from an incident in a criminal action.

In the case under consideration, the Court of Appeals, instead of confining itself to
the administrative case appealed before it, reviewed the decision of the Office of the
Ombudsman in OMB-0-93-0407 finding probable cause against respondent. The Court
of Appeals further ordered the Office of the Ombudsman to withdraw the criminal
information filed by the same with the RTC of Manila docketed as Criminal Case No.
96-149144. Such act by the Court of Appeals cannot be countenanced. It is settled that a
judgment rendered by a court without jurisdiction over the subject matter is void.[15]
Since the Court of Appeals has no jurisdiction over decisions and orders of the
Ombudsman in criminal cases, its ruling on the same is void.

WHEREFORE, judgment is rendered as follows:

(1) The Decision of the Court of Appeals dated 24 August 2000 and its
Resolution dated 28 March 2001 insofar as it ruled that respondent Jose B.
 Fung is not liable for the administrative charge in OMB-ADM-0-93-0149 is
AFFIRMED; and

(2) The same Decision and Resolution of the Court of Appeals directing
the withdrawal of Criminal Case No. 96-149144 pending before the
Regional Trial Court, Branch 38, Manila, is VOID.

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice

WE CONCUR:

ARTEMIO V. PANGANIBAN

Chief Justice

Chairperson
CONSUELO YNARES-SANTIAGO MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice Associate Justice

ROMEO J. CALLEJO, SR.

Associate Justice

C E R T I F I CAT I O N

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that

the conclusions in the above Decision were reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.

ARTEMIO V. PANGANIBAN
Chief Justice