FIRST DIVISION [G.R. No. 137794 : August 11, 2010] ERLINDA REYES AND ROSEMARIE MATIENZO, PETITIONERS, VS.

HON. JUDGE BELEN B. ORTIZ, PRESIDING, BRANCH 49, METROPOLITAN TRIAL COURT, CALOOCAN CITY; SPOUSES BERNARD AND FLORENCIA PERL, REPRESENTED BY ATTORNEY-IN-FACT BENJAMIN MUCIO; HON. JUDGE VICTORIA ISABEL A. PAREDES, PRESIDING, BRANCH 124, REGIONAL TRIAL COURT, CALOOCAN CITY AND SEGUNDO BAUTISTA, RESPONDENTS. [G.R. No. 149664 ] SPS. ALBERTO EMBORES AND LOURDES EMBORES, SPS. ROBERTO AND EVELYN PALAD, DENNIS HENOSA AND CORAZON LAURENTE, PETITIONERS, VS. HON. RAYMUNDO G. VALLEGA, PRESIDING JUDGE, BRANCH 52, METROPOLITAN TRIAL COURT, CALOOCAN CITY; HON. ELEANOR R. KWONG, PRESIDING JUDGE, BRANCH 51, METROPOLITAN TRIAL COURT, CALOOCAN CITY; HON. JUDGE BELEN B. ORTIZ, PRESIDING JUDGE, BRANCH 49, METROPOLITAN TRIAL COURT, CALOOCAN CITY; VICTORIA C. SALIRE-ALBIS, REPRESENTED BY HER ATTORNEY-IN-FACT MR. MENELIO C. SALIRE; MA. FE R. ROCO, ALFREDO TAN, MANUELITO ESTRELLA; AND HON. JUDGE ANTONIO FINEZA, PRESIDING JUDGE, BRANCH 131, REGIONAL TRIAL COURT, CALOOCAN CITY, RESPONDENTS. DECISION LEONARDO-DE CASTRO, J.: The instant cases are consolidated Petitions for Declaratory Relief, Certiorari, and Prohibition. The petitioners in G.R. No. 137794 seek to declare null and void the proceedings in Civil Case No. 23477, an ejectment case, before the Metropolitan Trial Court (MeTC), Caloocan City, Branch 49, and Civil Case No. C-17725, a complaint for Recovery of Possession and Ownership, filed with the Regional Trial Court (RTC), Caloocan City, Branch 124;[2] while the petitioners in G.R. No. 149664 pray for the nullity of the following ejectment proceedings before the different branches of the Caloocan City MeTC: (1) Civil Case No. 99-25011, Branch 52; (2) Civil Case No. 22559 and Civil Case No. 18575, Branch 49 and its appeal to the RTC, Branch 131; (3) Civil Case No. 00-25892, Branch 51; and (4) Civil Case No. 00-25889, Branch 51.[3] G.R. No. 149664 was considered closed and terminated by the Court's Resolution dated August 30, 2006.[4] The parcels of land which are the subject matter of these cases are part of the Tala Estate, situated between the boundaries of Caloocan City and Quezon City and encompassing an area of 7,007.9515 hectares more or less. [5] In G.R. No. 137794, respondents Segundo Bautista and spouses Bernard and Florencia Perl sought the ouster from the contested lots of Erlinda Reyes, spouses Rene and Rosemarie Matienzo and Sergio Abejero, who are occupants of separate home lots in Camarin, Caloocan City. The first case was commenced on December 11, 1996, by respondent Segundo Bautista, a registered owner of the parcel of land occupied by spouses Rene and Rosemarie Matienzo. The case was a complaint for Recovery of Possession and/or Ownership of Real Property (Recovery case) against the latter spouses with the RTC Caloocan City, Branch 124.[6] This was docketed as Civil Case No. C-17725.[7] Shortly thereafter, a separate but related action, was initiated by the Republic of the Philippines, represented by the Director of Lands on December 27, 1996, before the Quezon City RTC, Branch 85 (re-raffled to Branch 93).[8] This was a complaint for Annulment of Title/Reversion (Annulment/Reversion case) against Biyaya Corporation and the Register of Deeds of the Cities of Pasig, Caloocan, and Quezon, the City of Manila, and the Administrator of the Land Registration Authority involving the Tala Estate. The case, docketed as Civil Case No. Q-96-29810, sought to declare null and void the transfer certificates of title issued in the name of Biyaya Corporation, and all derivative titles emanating therefrom, and to declare the land in suit to be reverted to it as part of the patrimonial property of the State, and the same be awarded to the actual occupants. One of the intervenors therein is Samahan ng Maliliit na Magkakapitbahay (SAMAKABA) of which petitioners Erlinda Reyes and Rosemarie Matienzo are members.[9] On May 28, 1997, the Quezon City RTC in the Annulment/Reversion case issued a Preliminary Injunction (Injunction) freezing all ejectment cases involving the Tala Estate pending in the MeTCs of Quezon City and Caloocan City. [10] Believing that the Injunction issued by the Quezon City RTC can be beneficial to them in the Recovery case pending before the Caloocan City RTC, on June 27, 1997, spouses Rene and Rosemarie Matienzo filed a motion to suspend the proceedings of the Recovery case. [11] On December 8, 1997, the Caloocan City RTC, Branch 124 denied said motion.[12] Spouses Matienzo moved for the reconsideration of the motion, but the same was denied on May 14, 1998.[13] The spouses received the order denying their motion for reconsideration on June 9, 1998. [14] Trial on the merits started on December 2, 1998.[15] The second case, an ejectment complaint, was commenced by spouses Bernard and Florencia Perl on June 25, 1997, against Erlinda Reyes before the Caloocan City MeTC, Branch 49.[16] It was docketed as Civil Case No. 23477. Shortly thereafter, on July 8, 1997, spouses Perl filed the third case, an ejectment action against Sergio Abejero. The case, which was raffled off to Branch 49 of the Caloocan City MeTC, was docketed as Civil Case No. 23519.[17] Subsequently, these two ejectment cases were consolidated (Ejectment cases).[18] In her Answer and during the preliminary conference, Erlinda Reyes moved for the suspension of the proceedings and/or for the dismissal of these cases citing the Injunction issued in Civil Case No. Q-9629810.[19] In its Order[20] dated January 22, 1999, the MeTC did not entertain Reyes's motion, instead, it required her to submit a position paper. Erlinda Reyes received the order on March 11, 1999. [21] On April 16, 1999, the trial court issued a Decision ordering Erlinda to vacate the contested property.[22] The Recovery case and the Ejectment cases converged when petitioners Rosemarie Matienzo and Erlinda Reyes, joined on March 25, 1999 in filing directly with this Court the instant petition denominated as "Declaratory Relief, Certiorari, and Prohibition," mainly assailing the denial of their respective motions for suspension. [23] Petitioners Matienzo and Reyes asked that the proceedings in the Ejectment cases and the Recovery case be declared null and void for violating the Injunction order of the Quezon City RTC. This case is docketed as G.R. No. 137794. During the pendency of G.R. No. 137794, certain events supervened when the Ejectment cases ran their course and petitioner Reyes appealed the MeTC decision to the RTC. In the RTC, the Ejectment cases were docketed as Civil Cases Nos. C-18904-05.[24] Apparently, respondent-spouses Perl moved for the execution of the MeTC decision pending appeal, which the RTC granted as the Writ of Execution was thereafter issued on October 20, 2000.[25] Petitioner Erlinda Reyes and company, thus, filed with this Court a motion to suspend the proceedings in the RTC. [26] On October 25, 2000, this Court issued a Temporary Restraining Order restraining the implementation of the said writ of execution. [27] G.R. No. 149664, on the other hand, emanated from four distinct ejectment complaints filed against petitioners Corazon Laurente, spouses Alberto and Lourdes Embores, spouses Roberto and Evelyn Palad, and Dennis Henosa. [28] The parcels of land from which petitioners were sought to be evicted were located in Camarin, Caloocan City and within the Tala Estate. [29] Petitioners were members of Alyansa Ng Mga Naninirahan Sa Tala Friar Lands (ALNATFRAL), an intervenor in the Reversion case. [30] These ejectment cases were all filed after the Injunction order was issued on May 28, 1997 by the Quezon City RTC in the Annulment/Reversion case. Thus, petitioners separately invoked the said injunction in seeking the dismissal or suspension of the four ejectment cases. Petitioners' motions for suspension were dismissed and the trial court proceeded to render judgments on these cases. Petitioners resorted directly to this Court in seeking the declaration of nullity of the proceedings of these ejectment cases for violating the prevailing injunction issued by the Quezon City RTC. Meanwhile, on March 4, 2003, the petitioners in G.R. No. 149664 filed a motion for consolidation asking that the said case be consolidated with G.R. No. 137794. On April 28, 2003, this Court resolved to consolidate the two cases. On July 28, 2006, petitioners in G.R. No. 149664 filed a Motion to Withdraw and/or Dismiss Instant Petition [31] stating that since a decision in the Annulment/Reversion case (Civil Case No. Q-96-29810) was already issued (although they did not attach a copy thereof), the petition is therefore rendered moot and academic as the injunction order was effective only pending determination of the merits. On August 30, 2006, the Court granted the motion to withdraw petition in G.R. No. 149664 and considered the same closed and terminated.[32] On October 11, 2006, G.R. No. 149664 became final and executory. What remains to be resolved, therefore, are the issues raised in G.R. No. 137794. In their bid to declare null and void the proceedings in the Recovery case and the Ejectment cases, petitioners argued that the Caloocan City MeTC,
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where the Ejectment cases were filed, and the Caloocan City RTC where the Recovery case was pending, were divested of jurisdiction since the Quezon City RTC acquired jurisdiction over the subject matter.[33] Petitioners specifically alleged that the MeTC's refusal to suspend the Ejectment cases despite the Injunction order is tantamount or amounting to lack of or excess of jurisdiction. As to the Caloocan City RTC, its desistance to heed the Injunction is unjustified and contrary to well-settled jurisprudence.[34] Petitioners were of the view that the interference by the Quezon City RTC was justified since no third-party claim is involved.[35] The Office of the Solicitor General (OSG) adopts the position of petitioners in praying that the orders denying the motion to suspend proceedin gs and the proceedings that transpired in the Ejectment cases be set aside for having been issued with grave abuse of discretion. [36] Citing Honda Giken Kogyo-Kabushiki Kaisha v. San Diego,[37] where it was held that a writ of injunction may be issued to a court by another court superior in rank, the OSG maintains that the Injunction issued by the Quezon City RTC in Civil Case No. Q-96-29810 covers all metropolitan trial courts including the Ejectment cases in Caloocan City MeTC, Branch 49.[38] The OSG also maintains that the Injunction was in accordance with the settled jurisprudence where the reversion case is being filed by the State. Respondent Segundo Bautista contends that petitioners resorted to a wrong remedy. He argues that the action for declaratory relief can only prosper if the statute, deed, or contract has not been violated. [39] Hence, where the law or contract has already been breached prior to the filing of the declaratory relief, courts can no longer assume jurisdiction since this action is not geared towards the settling of issues arising from breach or violation of the rights and obligations of the parties under a statute, deed, and contract, but rather it is intended to secure an authoritative statement for guidance in their enforcement or compliance of the same. [40] Since the Injunction order of the Quezon City RTC had already been violated as early as December 8, 1997 by the Caloocan City RTC in the Recovery case, or before the filing of this instant petition, resort to Rule 63 of the Rules of Court would not lie. Respondent Bautista insists that the instant recourse of petitioner Matienzo was resorted to as a ploy to substitute the filing of certiorari under Rule 65, which she already lost since the 60-day period had already expired.[41] Respondent points out that direct resort to this Court violates the rule on the hierarchy of courts. Since it was the Caloocan City RTC which denied petitioner Matienzo's motion to suspend proceedings, the petition for declaratory relief should have been filed with the Court of Appeals. Direct filing with this Court is not justified as, other than making motherhood statements, petitioner Matienzo failed to state clearly the exceptional and compelling circumstances to justify the exercise of this Court's primary jurisdiction.[42] He likewise contends that the Caloocan City RTC did not err in not suspending the proceedings in the Recovery case, notwithstanding the Injunction issued by the Quezon City RTC, since the said injunction applied only to the MeTCs of Quezon City and Caloocan City so the RTC was excluded from the injunction order. He avers that it is the Caloocan City RTC which is vested with the jurisdiction to hear and decide the case until its final conclusion since it had acquired the same ahead of the Quezon City RTC. He states that being co-equal, the Quezon City RTC had no authority to stop by injunction the Caloocan City RTC and even though there are instances where another court may exercise coordinate jurisdiction in cases where there are justifiable grounds, here, petitioner Matienzo has not alleged any of those circumstances. Petitioners insist that this is mainly a petition for declaratory relief. Section 1, Rule 63 of the 1997 Rules of Court provides: SECTION 1. Who may file petition. -- Any person interested under a deed, will, contract or other written instrument, or whose rights are affected by a statute, executive order or regulation, ordinance, or any other governmental regulation may, before breach or violation thereof, bring an action in the appropriate Regional Trial Court to determine any question of construction or validity arising, and for a declaration of his rights or duties, thereunder. An action for the reformation of an instrument, to quiet title to real property or remove clouds therefrom, or to consolidate ownership under Article 1607 of the Civil Code, may be brought under this Rule. The foregoing section can be dissected into two parts. The first paragraph concerns declaratory relief, which has been defined as a special civil action by any person interested under a deed, will, contract or other written instrument or whose rights are affected by a statute, ordinance, executive order or regulation to determine any question of construction or validity arising under the instrument, executive order or regulation, or statute and for a declaration of his rights and duties thereunder. The second paragraph pertains to (1) an action for the reformation of an instrument; (2) an action to quiet title; and (3) an action to consolidate ownership in a sale with a right to repurchase. [43] The first paragraph of Section 1 of Rule 63 enumerates the subject matter to be inquired upon in a declaratory relief namely, deed, will, contract or other written instrument, a statute, executive order or regulation, or any government regulation. This Court, in Lerum v. Cruz,[44] declared that the subject matters to be tested in a petition for declaratory relief are exclusive, viz: Under this rule, only a person who is interested "under a deed, will, contract or other written instrument, and whose rights are affected by a statute or ordinance, may bring an action to determine any question of construction or validity arising under the instrument or statute and for a declaration of his rights or duties thereunder." This means that the subject matter must refer to a deed, will, contract or other written instrument, or to a statute or ordinance, to warrant declaratory relief. Any other matter not mentioned therein is deemed excluded. This is under the principle of expressio unius est exclussio alterius. (Emphasis supplied.) The foregoing holding was reiterated in Natalia Realty, Inc. v. Court of Appeals,[45] wherein this Court stressed that court orders or decisions cannot be made the subject matter of a declaratory relief, thus: Judge Querubin's query is not an action for declaratory relief. Section 1 of Rule 64 [now Rule 63] of the Rules of Court provides the requisites of an action for declaratory relief. In interpreting these requisites, the Court has ruled that: xxxx The letter of Judge Querubin pertained to final orders and decisions of the courts that are clearly not the proper subjects of a petition for declaratory relief. Thus, the requisites prescribed by the Rules of Court in an action for declaratory relief are not applicable to the letter of Judge Querubin.[46] (Emphasis supplied.) Then again in a recent ruling of this Court, it was emphasized: A petition for declaratory relief cannot properly have a court decision as its subject matter. In Tanda v. Aldaya [98 Phil. 244 (1956)], we ruled that: [A] court decision cannot be interpreted as included within the purview of the words "other written instrument," as contended by appellant, for the simple reason that the Rules of Court already provide for the ways by which an ambiguous or doubtful decision may be corrected or clarified without need of resorting to the expedient prescribed by Rule 66 [now Rule 64]. [47] (Emphasis supplied.) In the instant case, petitioners Erlinda Reyes and Rosemarie Matienzo assailed via Declaratory Relief under Rule 63 of the Rules of Court, the orders of the trial courts denying their motions to suspend proceedings. This recourse by petitioners, unfortunately, cannot be countenanced since a court order is not one of those subjects to be examined under Rule 63. The proper remedy that petitioner Erlinda Reyes could have utilized from the denial of her motion to suspend proceedings in the Caloocan City MeTC was to file a motion for reconsideration and, if it is denied, to file a petition for certiorari before the RTC pursuant to Rule 65 of the Rules of Court. On the other hand, petitioner Matienzo should have filed a special civil action on certiorari also under Rule 65with the Court of Appeals from the denial of her motion by the Caloocan City RTC. The necessity of filing the petition to the RTC in the case of Erlinda Reyes and to the Court of Appeals in the case of Matienzo is dictated by the principle of the hierarchy of courts. [48] Both petitions must be filed within 60 days from the receipt or notice of the denial of the motion to suspend proceedings or from the denial of the motion for reconsideration. Section 4 of Rule 65 partly provides: Sec. 4. When and where to file the petition. - The petition shall be filed not later than sixty (60) days from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the petition shall be filed not later than sixty (60) days counted from the notice of the denial of said motion. If the petition relates to an act or an omission of a municipal trial court x x x, it shall be filed with the Regional Trial Court exercising jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed with the Court of Appeals or with the Sandiganbayan, whether or not the same is in aid of the court's appellate jurisdiction. Despite this procedural remedy available to them, petitioners, under the pretext that they were in a quandary as to their rights under the Injunction order of the Quezon City RTC, directly filed the instant case here. Petitioners did not bother to proffer a compelling reason for their direct resort to this

Court. This procedural faux pas proves fatal. The Court's exhortation against taking a procedural shortcut cannot be overemphasized. In Ortega v. The Quezon City Government, [49] the Court accentuated: At all events, even if this petition delves on questions of law, there is no statutory or jurisprudential basis for according to this Court original and exclusive jurisdiction over declaratory relief which advances only questions of law. Finally, while a petition for declaratory relief may be treated as one for prohibition if it has far reaching implications and raises questions that need to be resolved, there is no allegation of facts by petitioner tending to show that she is entitled to such a writ. The judicial policy must thus remain that this Court will not entertain direct resort to it, except when the redress sought cannot be obtained in the proper courts or when exceptional and compelling circumstances warrant availment of a remedy within and calling for the exercise of this Court's primary jurisdiction. (Emphasis supplied.) To make matters worse, petitioner Matienzo obviously availed of the instant declaratory relief to substitute for a petition for certiorari, a remedy which she sadly lost by inaction. It must be recalled that on December 8, 1997, the Caloocan City RTC, Branch 124 denied Matienzo's motion to suspend proceedings.[50] She moved for reconsideration, but the same was denied on May 14, 1998. [51] She received the Order denying her motion for reconsideration on June 9, 1998. [52] She had 60 days therefrom to question the same before the Quezon City RTC. It was only on March 25, 1999 that petitioner Matienzo assailed the order denying her motion for reconsideration, albeit wrongly before this Court. [53] From this, it can be inferred that petitioner Matienzo's recourse is a belated attempt designed to salvage her lost opportunity to assail the order denying her motion to suspend proceedings. Also unavailing are the contentions of petitioners that the Caloocan City RTC and MeTC committed grave abuse of discretion when they denied petitioners' motions to suspend proceedings. The pertinent portion of the Injunction order of the Quezon City RTC reads: WHEREFORE, premises considered, this Court has to grant, as it hereby grants the application for the issuance of the writ of preliminary injunction. Let a writ of preliminary Injunction be issued ordering defendant representing Biyaya Corporation, its agents, assigns, and transferees, as well as all other persons representing themselves as owners of certain portions of the land in question, otherwise known as the Tala Estate, to immediately cease and desist from doing or causing to do, further acts of disposition of the lots subject of the present complaint, such as the filing of ejectment cases in the Municipal Trial Courts of Quezon City and Caloocan City and, the demolition and ejectment therefrom of the members of the herein Intervenors. Accordingly, the Metropolitan Trial Courts of Quezon City and Caloocan City are specifically ordered to cease and desist from further conducting trials and proceedings in the ejectment cases filed and to be filed involving the lots of the present complaint, until further orders from this Court.[54] (Emphasis supplied.) The foregoing order is not addressed to the Caloocan City RTC. Neither can it be inferred from the language thereof that the Quezon City RTC intended to enjoin the Caloocan City RTC from further proceeding with the Recovery case. The order merely mentions the Caloocan City MeTCs. Nothing more. But more importantly, the Quezon City RTC could not have validly enjoined the Caloocan City RTC without violating the doctrine that no court has the power to interfere by injunction with the judgments or decrees of a court of concurrent or coordinate jurisdiction. [55] Spouses Ching v. Court of Appeals[56] justifies this rule in this manner: Beginning with the case of Orais v. Escao, down to the subsequent cases of Nuez v. Low, Cabigao v. del Rosario, Hubahib v. Insular Drug Co., Inc., National Power Corp. v. De Veyra, Luciano v. Provincial Governor, De Leon v. Hon. Judge Salvador, Cojuangco v. Villegas, Darwin v. Tokonaga, we laid down the long standing doctrine that no court has the power to interfere by injunction with the judgments or decrees of a court of concurrent or coordinate jurisdiction. The various trial courts of a province or city, having the same or equal authority, should not, cannot, and are not permitted to interfere with their respective cases, much less with their orders or judgments. A contrary rule would obviously lead to confusion and seriously hamper the administration of justice. (Emphasis supplied.) In Compania General de Tabacos de Filipinas v. Court of Appeals,[57] two civil cases with identical causes of action were filed in different RTCs, one ahead of the other. The second RTC which acquired jurisdiction over the case issued a preliminary injunction enjoining the proceedings in the RTC which first acquired jurisdiction of the case. Ruling against the injunction issued by the RTC, this Court stressed: Hence, nothing can be clearer than that Judge Rapatalo had indeed issued the questioned writ of preliminary injunction with grave abuse of discretion amounting to excess or lack of jurisdiction for the blatant disregard of the basic precept that no court has the power to interfere by injunction with the judgments or orders of a co-equal and coordinate court of concurrent jurisdiction having the power to grant the relief sought by injunction. This Court explained in Parco vs. Court of Appeals that: x x x Jurisdiction is vested in the court not in any particular branch or judge, and as a corollary rule, the various branches of the Court of First Instance of a judicial district are a coordinate and co-equal courts one branch stands on the same level as the other. Undue interference by one on the proceedings and processes of another is prohibited by law. In the language of this Court, the various branches of the Court of First Instance of a province or city, having as they have the same or equal authority and exercising as they do concurrent and coordinate jurisdiction should not, cannot, and are not permitted to interfere with their respective cases, much less with their orders or judgments x x x. Needless to say, adherence to a different rule would sow confusion and wreak havoc on the orderly administration of justice, and in the ensuing melee, hapless litigants will be at a loss as to where to appear and plead their cause.[58] (Emphasis supplied.) While there are recognized exceptions to the foregoing rule, other than citing said cases, exceptional cases to their petition.
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petitioners did not explain the applicability of said

Bereft of merit too is petitioners' argument that the Caloocan City MeTC cannot disregard the injunction order of the Quezon City RTC hearing the Annulment/Reversion case. The established rule is that a pending civil action for ownership such as annulment of title shall not ipso facto suspend an ejectment proceeding.[60] The Court explained that the rationale for this is that in an ejectment case, the issue is possession, while in an annulment case the issue is ownership.[61] In fact, an ejectment case can be tried apart from an annulment case.[62] Although there is an exception to this rule, petitioners failed to justify that this case falls within said exception. The words of the Court on this matter are instructive: In the absence of a concrete showing of compelling equitable reasons at least comparable and under circumstances analogous to Amagan, we cannot override the established rule that a pending civil action for ownership shall not ipso factosuspend an ejectment proceeding. Additionally, to allow a suspension on the basis of the reasons the petitioners presented in this case would create the dangerous precedent of allowing an ejectment suit to be suspended by an action filed in another court by parties who are not involved or affected by the ejectment suit.[63] (Emphases supplied.) Hence, petitioners' posture that the Ejectment cases should be suspended due to the pendency of the Annulment/Reversion case is not meritorious. WHEREFORE, premises considered, the instant petition is hereby DISMISSED. The Temporary Restraining Order dated October 25, 2000 issued by this Court is LIFTED. SO ORDERED.

FIRST DIVISION ATTY. RESTITUTO G. CUDIAMAT, CUDIAMAT[1] and CORAZON D. CUDIAMAT, Petitioners, ERLINDA P. G.R. No. 182403 Present: PUNO, C.J., Chairperson, CARPIO MORALES, LEONARDO-DE CASTRO, BERSAMIN, and VILLARAMA, JR., JJ.

- versus -

BATANGAS SAVINGS AND LOAN BANK, INC., and THE REGISTER OF DEEDS, NASUGBU, BATANGAS, Respondents.

Promulgated: March 9, 2010 x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION

CARPIO MORALES, J.: Petitioner Atty. Restituto Cudiamat and his brother Perfecto were the registered co-owners of a 320 square meter parcel of land (the property) in Balayan, Batangas, covered by TCT No. T-37889 of the Register of Deeds of Nasugbu, Batangas. Restituto, who resided in Ozamiz City with his wife, entrusted the custody of the title to who was residing in Balayan.

In 1979, Perfecto, without the knowledge and consent of Restituto, obtained a loan from respondent Batangas Savings and Loan Bank, Inc. (the bank). To secure the payment of the loan, Perfecto mortgaged the property for the purpose of which he presented a Special Power of Attorney (SPA) purportedly executed by Restituto, with the marital consent of his wife-herein co-petitioner Erlinda Cudiamat.

On June 19, 1991, Restituto was informed, via letter[2] dated June 7, 1991 from the bank, that the property was foreclosed. He thus, by letter[3] dated June 25, 1991, informed the bank that he had no participation in the execution of the mortgage and that he never authorized Perfecto for the purpose.

In the meantime, Perfecto died in 1990. In 1998, as Perfectos widow petitioner Corazon was being evicted from the property, she and her co-petitionerspouses Restituto and Erlinda filed on August 9, 1999 before the Regional Trial Court (RTC) of Balayan a complaint[4] for quieting of title with damages against the bank and the Register of Deeds of Nasugbu, docketed as Civil Case No. 3618, assailing the mortgage as being null and void as they did not authorize the encumbrance of the property.

In its Answer to the complaint, the bank, maintaining the validity of the mortgage, alleged that it had in fact secured a title in its name, TCT No. T-48405, after Perfecto failed to redeem the mortgage; that the Balayan RTC had no jurisdiction over the case as the bank had been placed under receivership and under liquidation by the Philippine Deposit Insurance Corporation (PDIC); that PDIC filed before the RTC of Nasugbu a petition for assistance in the liquidation of the bank which was docketed as SP No. 576; and that jurisdiction to adjudicate disputed claims against it is lodged with the liquidation court-RTC Nasugbu.

By Decision of January 17, 2006,[5] Branch 9 of the Balayan RTC rendered judgment, in the complaint for quieting of title, in favor of the plaintiffs-herein petitioners. It ordered respondent Register of Deeds of Nasugbu to cancel the encumbrance annotated on TCT No. T-37889, and to cancel TCT No. T-48405 issued in the name of the bank and reinstate the former title. It also directed the bank to return the property to petitioner spouses Restituto and Erlinda and to pay P20,000 to all the petitioners to defray the costs of suit.

The bank appealed to the Court of Appeals, contending, inter alia, that the Balayan RTC had no jurisdiction over petitioners complaint for quieting of title.

By the assailed Decision of December 21, 2007,[6] the appellate court, ruling in favor of the bank, dismissed petitioners complaint for quieting of title, without prejudice to the right of petitioners to take up their claims with the Nasugbu RTC sitting as a liquidation court.

To the appellate court, the Balayan RTC, as a court of general jurisdiction, should have deferred to the Nasugbu RTC which sits as a liquidation court, given that the bank was already under receivership when petitioners filed the complaint for quieting of title.

Petitioners Motion for Reconsideration having been denied by the appellate court by Resolution of March 27, 2008, they filed the present petition for review on certiorari.

Assailing the appellate courts ruling that the Balayan RTC had no jurisdiction over their complaint, petitioners argue that their complaint was filed earlier than PDICs petition for assistance in the liquidation; and that the bank is now estopped from questioning the jurisdiction of the Balayan RTC because it actively participated in the proceedings thereat.

The petition is impressed with merit.

Estoppel bars the bank from raising the issue of lack of jurisdiction of the Balayan RTC.

In Lozon v. NLRC,[7] the Court came up with a clear rule on when jurisdiction by estoppel applies and when it does not: The operation of estoppel on the question of jurisdiction seemingly depends on whether the lower court actually had jurisdiction or not. If it had no jurisdiction, but the case was tried and decided upon the theory that it had jurisdiction, the parties are not barred, on appeal, from assailing such jurisdiction, for the same must exist as a matter of law, and may not be conferred by the consent of the parties or by estoppel. However, if the lower court had jurisdiction, and the case was heard and decided upon a given theory, such, for instance, as that the court had no jurisdiction,the party who induced it to adopt such theory will not be permitted, on appeal, to assume an inconsistent position that the lower court had jurisdiction (underscoring supplied)

The ruling was echoed in Metromedia Times Corporation v. Pastorin.[8]

In the present case, the Balayan RTC, sitting as a court of general jurisdiction, had jurisdiction over the complaint for quieting of title filed by petitioners on August 9, 1999. The Nasugbu RTC, as a liquidation court, assumed jurisdiction over the claims against the bank only on May 25, 2000, when PDICs petition for assistance in the liquidation was raffled thereat and given due course. While it is well-settled that lack of jurisdiction on the subject matter can be raised at any time and is not lost by estoppel by laches, the present case is an exception. To compel petitioners to re-file and relitigate their claims before the Nasugbu RTC when the parties had already been given the opportunity to present their respective evidence in a full-blown trial before the Balayan RTC which had, in fact, decided petitioners complaint (about two years before the appellate court rendered the assailed decision) would be an exercise in futility and would unjustly burden petitioners.

The Court, in Valenzuela v. Court of Appeals,[9] held that as a general rule, if there is a judicial liquidation of an insolvent bank, all claims against the bank should be filed in the liquidation proceeding. The Court in Valenzuela, however, after considering the circumstances attendant to the case, held that the general rule should not be applied if to order the aggrieved party to refile or relitigate its case before the litigation court would be an exercise in futility. Among the circumstances the Court considered in that case is the fact that the claimants were poor and the disputed parcel of land was their only property, and the parties claims and defenses were properly ventilated in and considered by the judicial court.

In the present case, the Court finds that analogous considerations exist to warrant the application of Valenzuela. Petitioner Restituto was 78 years old at the time the petition was filed in this Court, and his co-petitioner-wife Erlinda died[10] during the pendency of the case. And, except for co-petitioner Corazon, Restituto is a resident of Ozamis City. To compel him to appear and relitigate the case in the liquidation court-Nasugbu RTC when the issues to be raised before it are the same as those already exhaustively passed upon and decided by the Balayan RTC would be superfluous.

WHEREFORE, the petition is GRANTED. The Decision of December 21, 2007 and Resolution dated March 27, 2008 of the Court of Appeals are SET ASIDE. The Decision dated January 17, 2006 of the Regional Trial Court of Balayan, Batangas, Branch 9 is REINSTATED.

SO ORDERED.

G.R. No. 177007

July 14, 2009

SANSIO PHILIPPINES, INC., Petitioner, vs. SPOUSES ALICIA AND LEODEGARIO MOGOL, JR., Respondents.

DECISION CHICO-NAZARIO, J.: Challenged in this Petition for Review on Certiorari1 under Rule 45 of the Rules of Court are the Decision2 dated 21 November 2006 and the Resolution3 dated 12 March 2007 of the Court of Appeals in CA-G.R. SP No. 70029. The assailed Decision reversed and set aside the Order4 dated 18 January 2002 of the Regional Trial Court (RTC) of Manila, Branch 33, in Civil Case No. 01-101267, which dismissed the Petition for Certiorari, Prohibition and/or Injunction filed by herein respondent spouses Alicia and Leodegario Mogol, Jr. against herein petitioner Sansio Philippines, Inc. and Judge Severino B. de Castro, Jr. of the Metropolitan Trial Court (MeTC) of Manila, Branch 25. The assailed Resolution of the Court of Appeals denied the Motion for Reconsideration of its earlier Decision. Petitioner Sansio Philippines, Inc. is a domestic corporation that is engaged in the business of manufacturing and selling appliances and other related products. On 12 July 2000, petitioner filed a Complaint for Sum of Money and Damages 5 against respondent spouses Mogol before the MeTC of Manila. The case was docketed as Civil Case No. 167879CV and was raffled to Branch 25 of said court. Petitioner stated in the Complaint that respondent spouses Alicia and Leodegario Mogol, Jr. were the owners and managers of MR Homes Appliances, with residence at 1218 Daisy St., Employee Village, Lucena City, where summons and other written legal processes of the court may be served. Petitioner further alleged that on 15 November 1993 and 27 January 1994, respondent spouses Mogol purchased from petitioner air-conditioning units and fans worth P217,250.00 and P5,521.20, respectively. Respondent spouses Mogol apparently issued postdated checks as payment therefor, but said checks were dishonored, as the account against which the checks were drawn was closed. Respondent spouses Mogol made partial payments, leaving a balance of P87,953.12 unpaid. Despite several demands by petitioner, respondent spouses Mogol failed to settle their obligation. Thus, petitioner prayed that respondent spouses Mogol be ordered to pay the former, jointly and severally, the amount of P87,953.12, with legal interest; as well as attorneys fees in the sum of twenty-five (25%) percent of the amount collectible, plus P2,000.00 for every appearance in court; and costs of suit. On 3 October 2000, at the request of herein petitioner, the process server of the MeTC of Manila served the summons 6 and the copy of the complaint on respondent spouses Mogol at the courtroom of the MeTC of Manila, Branch 24. Respondent spouses were in the said premises, as they were waiting for the scheduled hearing of the criminal cases filed by petitioner against respondent Alicia Mogol for violations of Batas Pambansa Blg. 22. Upon being so informed of the summons and the complaint, respondent spouses Mogol referred the same to their counsel, who was also present in the courtroom. The counsel of respondent spouses Mogol took hold of the summons and the copy of the complaint and read the same. 7 Thereafter, he pointed out to the process server that the summons and the copy of the complaint should be served only at the address that was stated in both documents, i.e., at 1218 Daisy St., Employee Village, Lucena City, and not anywhere else. The counsel of respondent spouses Mogol apparently gave back the summons and the copy of the complaint to the process server and advised his clients not to obtain a copy and sign for the same. As the process server could not convince the respondent spouses Mogol to sign for the aforementioned documents, he proceeded to leave the premises of the courtroom. On 4 October 2000, the process server of the MeTC of Manila issued a Return on Service of Summons,8declaring that: RETURN ON SERVICE OF SUMMONS This is to certify that on October 3, 2000, the undersigned tried to serve a copy of the Summons issued by the Court in the above-entitled case together with a copy of Complaint upon defendant Leodegario Mogol[,] Jr. and Alicia Mogol doing business under the name/style of "Mr. Homes Appliance" (sic) at MTC (sic) Branch 24 Ongpin (sic) (courtroom) as requested by plaintiff counsel, but failed for the reason that they refused to received (sic) with no valid reason at all. The original and duplicate copies of the Summons are hereby respectfully returned, (sic) UNSERVED. Manila, Philippines, October 4, 2000. (signed) ALFONSO S. VALINO Process Server (Emphases ours.) Motion to Declare in Default On 6 December 2000, petitioner filed a Motion to Declare [Respondents] in Default. 9 Petitioner averred that the summons and the copy of the complaint were already validly served upon the respondent spouses Mogol at the courtroom of the MeTC, Branch 24, which they refused to accept for no valid reason at all. From the date of said service up to the time of the filing of the above-stated motion, respondent spouses Mogol had yet to file any responsive pleading. Petitioner, thus, prayed that judgment be rendered against respondent spouses Mogol, and that the relief prayed for in its Complaint be granted. On 15 December 2000, through a special appearance of their counsel, respondent spouses Mogol filed an Opposition 10 to the Motion to Declare [Respondents] in Default. They posited that Section 3, Rule 611 of the Rules of Court requires that the complaint must contain the names and residences of the plaintiff and defendant. Therefore, the process server should have taken notice of the allegation of the complaint, which referred to the address of respondent spouses Mogol wherein court processes may be served. If such service, as alleged in the complaint, could not be complied with within a reasonable time, then and only then may the process server resort to substituted service. Respondent spouses Mogol further averred that there was no quarrel as to the requirement that the respondents must be served summons in person and, if they refused to receive and sign for it, by tendering it to them. They merely reiterated that the service should have been effected at the respondent spouses residential address, as stated in the summons and the copy of the complaint. On 6 April 2001, the MeTC of Manila, Branch 25, issued an Order, 12 the fallo of which provides: WHEREFORE, premises considered, the Motion to Declare [Respondents] in Default dated December 5, 2000 filed by counsel for [petitioner] is hereby granted. ACCORDINGLY, [respondents] Leodegario Mogol, Jr. and Alicia Mogol are hereby declared in default and [petitioner] is hereby allowed to present its evidence ex-parte (sic) before the Branch Clerk of Court on May 25, 2001 at 8:30 a.m. (Emphasis ours.) The MeTC of Manila, Branch 25 ruled that Section 6, Rule 1413 of the Rules of Court does not specify where service is to be effected. For obvious reasons, because service of summons is made by handing a copy thereof to the defendant in person, the same may be undertaken wherever the defendant may be found. Although the Return on the Service of Summons indicated that the original and the duplicate copies thereof were returned "UNSERVED," the same could not be taken to mean that respondent spouses Mogol had not yet been served with summons. That allegation in the return was clearly prompted by the statement in the first paragraph thereof that respondents spouses Mogol "refused to received (sic) [the summons and the copy of the complaint] with no valid reason at all." Respondent spouses Mogol were, thus, validly served with summons and a copy of the complaint.

For failing to file any responsive pleading before the lapse of the reglementary period therefor, the Motion to Declare [Respondents] in Default filed by petitioner was declared to be meritorious. Respondent spouses Mogol filed a Motion for Reconsideration14 on the above Order, but the same was denied by the MeTC of Manila, Branch 25, in an Order15 dated 11 June 2001. On 17 July 2001, respondent spouses Mogol filed a Petition for Certiorari, Prohibition and/or Injunction 16 before the RTC of Manila against Judge Severino B. de Castro, Jr. of the MeTC of Manila, Branch 25 and herein petitioner. Said petition was docketed as Civil Case No. 01-101267 and raffled to Branch 33 thereof. Respondent spouses Mogol insisted there was no valid service of summons per return of the process server, which was binding on the MeTC judge, who did not acquire jurisdiction over the persons of respondent spouses. They contended that the MeTC of Manila, Branch 25, acted with grave abuse of discretion amounting to lack or excess of jurisdiction in declaring them in default in Civil Case No. 167879CV, thereby depriving them of their right to be heard with due process of law, despite their having a good defense against petitioners complaint. Respondent spouses Mogol prayed that the Orders dated 6 April 2001 and 11 June 2001 of the MeTC of Manila, Branch 25, be declared null and void. On 18 January 2002, the RTC of Manila, Branch 33, issued an Order, disposing of the petition in this wise: WHEREFORE, viewed from the foregoing observations and findings, the present petition is hereby DISMISSED for lack of merit. 17 The RTC of Manila, Branch 33, held that Section 6, Rule 14 of the Rules of Court does not mandate that summons be served strictly at the address provided by the plaintiff in the complaint. Contrarily, said provision states that the service of summons may be made wherever such is possible and practicable. Therefore, it did not matter much that the summons and the copy of the complaint in this case were served inside the courtroom of the MeTC of Manila, Branch 24, instead of the address at 1218 Daisy St., Employee Village, Lucena City. The primordial consideration was that the service of summons was made in the person of the respondent spouses Mogol in Civil Case No. 167879CV. Lastly, the RTC of Manila, Branch 33, did not find any error in the interpretation of the MeTC of Manila, Branch 25, that summons had indeed been served on respondent spouses Mogol. On the face of the Return on Service of Summons, it was unmistakable that the summons and the copy of the complaint were served on respondent spouses, and that they refused to receive the same for no valid reason at all. Respondent spouses Mogol filed a Notice of Appeal18 on the above-mentioned Order of the RTC of Manila, Branch 33, which was given due course. The appeal was docketed in the Court of Appeals as CA-G.R. SP No. 70029. On 21 November 2006, the Court of Appeals rendered the assailed Decision in CA-G.R. SP No. 70029, the relevant portions of which read: We find the appeal meritorious. After a careful perusal of the records, We hold that there was no valid service of summons upon the [respondent] Mogol spouses in Civil Case No. 167879. Perforce, the MeTC [Branch 25] never acquired jurisdiction over them. We explain. xxxx In this case, it is indubitable that the [respondent] Mogol spouses, as defendants in Civil Case No. 167879, never received the summons against them, whether personally or by substituted service. As stated earlier, the process server failed to effect personal service of summons against the [respondent] Mogol spouses at the courtroom of the MeTC of Manila, Branch 24, because the latter refused to receive it, arguing that the same should be served at their residence, and not anywhere else. Concomitant to the trial courts duty to bring the defendant within its jurisdiction by the proper service of summons is its duty to apprise the plaintiff, as in the case of [petitioner] Sansio, whether or not the said summons was actually served upon the defendant. The proof of service of summons (or the lack of it) alluded to by the rules is found in Sec. 4, Rule 14 of the Revised Rules of Court, to wit: SECTION 4. Return. When the service has been completed, the server shall, within five (5) days therefrom, serve a copy of the return, personally or by registered mail, to the plaintiffs counsel, and shall return the summons to the clerk who issued it, accompanied by proof of service. In this case, the process servers Return of Service of Summons states, in clear and unequivocal terms, that: The original and duplicate copies of the Summons are hereby returned, UNSERVED. In the case of Spouses Madrigal v. Court of Appeals [G.R. No. 129955, 26 November 1999], it was held that the sheriffs certificate of service of summons is prima facie evidence of the facts therein set out. In the absence of contrary evidence, a presumption exists that a sheriff has regularly performed his official duties. To overcome the presumption arising from the sheriffs certificate, the evidence must be clear and convincing. In the instant case, no proof of irregularity in the process servers return was shown by Sansio. A perusal of the said return readily shows that the summons was unserved upon the Mogol spouses. From the foregoing, We hold that the Mogol spouses were never in actual receipt of the summons in Civil Case 167879. Perforce, the trial court did not acquire jurisdiction over them. In one case, the Supreme Court ruled that the refusal of a defendant to receive the summons is a technicality resorted to in an apparent attempt to frustrate the ends of justice. It is precisely for this reason that the rules provide a remedy that, in case the defendant refuses to receive and sign for it, [the same is served] by tendering it to him. Moreover, even if tender of summons upon the defendant proves futile, the trial court may further resort to substituted service of summons, as provided under Sec. 7, Rule 14 of the Revised Rules of Court. Stated otherwise, the trial court is not left with any other remedy in case the defendant refuses to receive and sign for his receipt of the summons, as in this case. Unfortunately, however, after the incident at the courtroom of the MeTC of Manila, Branch 24, there was no longer any further effort on the part of the trial court to serve anew the summons, together with a copy of the complaint, upon the Mogol spouses. Instead, the trial court assumed jurisdiction over the Mogol spouses; declared them in default for failure to file any responsive pleading; and, (sic) allowed Sansio to present its evidence ex parte in Civil Case No. 167879. xxxx All told, it is clearly established that there was indeed no valid service of summons upon the Mogol spouses in Civil Case No. 167879. Consequently, the MeTC of Manila, Branch 24 did not acquire jurisdiction over their persons. Perforce, the order declaring them in default in the said civil case is nugatory and without effect, as it was issued with grave abuse of discretion amounting to lack or in excess of jurisdiction. 19 (Emphases ours.) Thus, the Court of Appeals decreed:

WHEREFORE, premises considered, the Appeal is hereby GRANTED. The assailed Order dated January 18, 2002 of the Regional Trial Court (RTC) of Manila, National Capital Judicial Region, Branch 33, in SP Civil Case No. 01-101267 is hereby REVERSED and SET ASIDE. Accordingly, the Order dated April 6, 2001 of the Metropolitan Trial Court (MeTC) of Manila, Branch 25, in Civil Case No. 167879 is declared NULL and VOID. No pronouncement as to costs.20 Petitioner filed a Motion for Reconsideration21 thereon, but the same was denied by the Court of Appeals in the assailed Resolution22 dated 12 March 2007. Complaint for Sum of Money and Damages In the interregnum, on 3 August 2001, petitioner presented its evidence ex parte in the main case. On the basis thereof, on 17 August 2001, the MeTC of Manila, Branch 25, rendered a Decision, adjudging that petitioner had sufficiently established its entitlement to the grant of the reliefs prayed for in its Complaint. The decretal portion of the Decision states: WHEREFORE, premises considered, judgment is hereby rendered in favor of the [petitioner] and against the [respondent spouses Mogol], ordering the latter to pay the former jointly and severally the sum of P87,953.12 with interest thereon at the legal rate from date of demand until the same is fully paid; the sum equivalent to 25% of the amount due as and by way of attorneys fees, and the cost of suit. 23 (Emphasis ours.) Respondent spouses Mogol appealed24 the above Decision to the RTC of Manila. The appeal was docketed as Civil Case No. 01-101963 and was raffled to Branch 50 of the trial court. On 19 March 2004, the RTC of Manila, Branch 50, promulgated its Decision, 25 affirming in toto the Decision of the MeTC of Manila, Branch 25. The RTC declared that Section 6, Rule 14 of the Rules of Court clearly reveals that there is no requirement that the summons should only be served in the place stated in the summons. What is required is that a summons must be served by handing a copy thereof to the defendant in person, or, if he refuses to receive and sign for it, by tendering it to him. Under the circumstances of the case, the service of the copy of the summons and the complaint inside the courtroom of the MeTC of Manila, Branch 24 was the most practicable act. The process server need not wait for the respondent spouses Mogol to reach their given address before he could serve on the latter with summons and the copy of the complaint. The refusal of respondent spouses Mogol to receive the summons without valid cause was, thus, equivalent to a valid service of summons that vested jurisdiction in the MeTC of Manila, Branch 25. Respondent spouses Mogol sought a reconsideration of the aforesaid Decision, but the RTC of Manila, Branch 50, denied the same in an Order 26 dated 4 October 2004, finding no cogent reason to disturb its earlier judgment. Thereafter, respondent spouses Mogol no longer filed any appeal on the above Decision of the RTC of Manila, Branch 50. On 26 April 2007, petitioner filed the instant Petition for Review, questioning the rulings of the Court of Appeals in CA-G.R. SP No. 70029 and raising for resolution the following legal issues: 1. Whether or not the service of summons in the courtroom, before the hearing, [was] a valid service of summons; 2. Whether or not the clause "tendering it to him" when the defendant refuses to receive and sign for the summons under Section 6, Rule 14 of the Rules of Court means "leaving a copy of the summons to her or in the premises where the defendant could get it"; 3. Whether or not summons refused to be received by [respondent spouses Mogol], upon advice of their counsel, need to be served anew to them; 4. Whether or not the court is bound by the conclusions of the Process Server in his Return of Service of Summons; and 5. Whether or not the appeal before the Court of Appeals denying the Petition for Certiorari, Prohibition and Injunction has become moot and academic when the [RTC of Manila, Branch 50] rendered a Decision affirming the Decision of the [MeTC of Manila, Branch 25], and which Decision of the [RTC of Manila, Branch 50] has become final and executory. Contrary to the ruling of the Court of Appeals, petitioner argues that the service of summons inside the courtroom of the MeTC of Manila, Branch 24, was already valid. Such was a more practicable and convenient procedure, as opposed to requesting the process server to serve the summons and the copy of the complaint upon the respondent spouses Mogol at their residence in Lucena City. Petitioner further contends that, when the respondent spouses Mogol declined to receive and sign for the summons, tendering of the same was sufficient, and the summons need not be served anew. Section 6, Rule 14 of the Rules of Court does not state that the personal service of summons fails because the defendant refuses to receive and sign for it. As regards the Return on Service of Summons, petitioner claims that the second paragraph thereof was a mere conclusion of law, which does not bind the independent conclusion of the courts. Although the second paragraph stated that the summons was returned UNSERVED, the first paragraph clearly indicated that, indeed, the summons and the copy of the complaint were already personally served upon the Mogol spouses. They merely refused to receive them for no valid reasons. Finally, petitioner asserts that the assailed Decision dated 21 November 2006 of the Court of Appeals has already become moot and academic. The Decision dated 19 March 2004 of the RTC of Manila, Branch 50, in Civil Case No. 01-101963, which affirmed the Decision of the MeTC of Manila, Branch 25, on the merits of the case has since become final and executory for failure of respondent spouses Mogol to interpose an appeal of the same before the Court of Appeals. We find merit in the petition. A summons is a writ by which the defendant is notified of the action brought against him or her. In a civil action, jurisdiction over the defendant is acquired either upon a valid service of summons or the defendant's voluntary appearance in court. When the defendant does not voluntarily submit to the court's jurisdiction, or when there is no valid service of summons, any judgment of the court, which has no jurisdiction over the person of the defendant, is null and void.27 Where the action is in personam, i.e., one that seeks to impose some responsibility or liability directly upon the person of the defendant through the judgment of a court,28 and the defendant is in the Philippines, the service of summons may be made through personal or substituted service in the manner provided for in Sections 6 and 7, Rule 14 of the Rules of Court, which read: SEC. 6. Service in person on defendant. Whenever practicable, the summons shall be served by handing a copy thereof to the defendant in person, or, if he refuses to receive and sign for it, by tendering it to him. SEC. 7. Substituted service. If, for justifiable causes, the defendant cannot be served within a reasonable time as provided in the preceding section, service may be effected (a) by leaving copies of the summons at the defendants residence with some person of suitable age and discretion then residing therein; or (b) by leaving the copies at defendants office or regular place of business with some competent person in charge thereof. It is well-established that summons upon a respondent or a defendant must be served by handing a copy thereof to him in person or, if he refuses to receive it, by tendering it to him. Personal service of summons most effectively ensures that the notice desired under the constitutional requirement of due process is accomplished.29 The essence of personal service is the handing or tendering of a copy of the summons to the defendant himself,30wherever he may be found; that is, wherever he may be, provided he is in the Philippines. 31

In the instant case, the Court finds that there was already a valid service of summons in the persons of respondent spouses Mogol. To recapitulate, the process server presented the summons and the copy of the complaint to respondent spouses at the courtroom of the MeTC of Manila, Branch 24. The latter immediately referred the matter to their counsel, who was present with them in the aforesaid courtroom. At the express direction of his clients, the counsel took the summons and the copy of the complaint, read the same, and thereby informed himself of the contents of the said documents. Ineluctably, at that point, the act of the counsel of respondent spouses Mogol of receiving the summons and the copy of the complaint already constituted receipt on the part of his clients, for the same was done with the latters behest and consent. Already accomplished was the operative act of "handing" a copy of the summons to respondent spouses in person. Thus, jurisdiction over the persons of the respondent spouses Mogol was already acquired by the MeTC of Manila, Branch 25. That being said, the subsequent act of the counsel of respondent spouses of returning the summons and the copy of the complaint to the process server was no longer material. Furthermore, the instruction of the counsel for respondent spouses not to obtain a copy of the summons and the copy of the complaint, under the lame excuse that the same must be served only in the address stated therein, was a gross mistake. Section 6, Rule 14 of the Rules of Court does not require that the service of summons on the defendant in person must be effected only at the latters residence as stated in the summons. On the contrary, said provision is crystal clear that, whenever practicable, summons shall be served by handing a copy thereof to the defendant; or if he refuses to receive and sign for it, by tendering it to him. Nothing more is required. As correctly held by the RTC of Manila, Branch 50, the service of the copy of the summons and the complaint inside the courtroom of the MeTC of Manila, Branch 24 was the most practicable act under the circumstances, and the process server need not wait for respondent spouses Mogol to reach their given address, i.e., at 1218 Daisy St., Employee Village, Lucena City, before he could serve on the latter the summons and the copy of the complaint. Due to the distance of the said address, service therein would have been more costly and would have entailed a longer delay on the part of the process server in effecting the service of the summons. Much more important than considerations of practicality, however, is the fact that respondent spouses Mogol based their case on a wrong appreciation of the above-stated provisions of the Rules of Court. Respondent spouses Mogol principally argue that Section 6 of Rule 14 cannot be singled out without construing the same with Section 7. They posit that, in a civil case, summons must be served upon the defendants personally at the designated place alleged in the complaint. If the defendants refuse to receive and sign the summons, then the process server must tender the same to them by leaving a copy at the residence of the defendants. If the summons cannot be served in person because of the absence of the defendants at the address stated, then the same can be served by (1) leaving copies of the summons at the defendants residence with some person of suitable age and discretion residing therein, or (2) leaving the copies at defendants office or regular place of business with some competent person in charge thereof. Said arguments must fail, for they have no leg to stand on. Axiomatically, Sections 6 and 7 of Rule 14 of the Rules of Court cannot be construed to apply simultaneously. Said provisions do not provide for alternative modes of service of summons, which can either be resorted to on the mere basis of convenience to the parties. Under our procedural rules, service of summons in the persons of the defendants is generally preferred over substituted service. 32 Substituted service derogates the regular method of personal service. It is an extraordinary method, since it seeks to bind the respondent or the defendant to the consequences of a suit, even though notice of such action is served not upon him but upon another whom the law could only presume would notify him of the pending proceedings. 33 For substituted service to be justified, the following circumstances must be clearly established: (a) personal service of summons within a reasonable time was impossible; (b) efforts were exerted to locate the party; and (c) the summons was served upon a person of sufficient age and discretion residing at the partys residence or upon a competent person in charge of the partys office or place of business. 34 Relevantly, in Lazaro v. Rural Bank of Francisco Balagtas (Bulacan), Inc.,35 very categorical was our statement that the service of summons to be done personally does not mean that service is possible only at the defendants actual residence. It is enough that the defendant is handed a copy of the summons in person by anyone authorized by law. This is distinct from substituted service under Section 7, Rule 14 of the Rules of Court. As already discussed above, there was already a valid service of summons in the persons of respondent spouses Mogol in the courtroom of the MeTC of Manila, Branch 24, when their counsel, upon their explicit instructions, received and read the same on their behalf. Contrary to the ruling of the Court of Appeals, the fact that the summons was returned to the process server and respondent spouses Mogul subsequently declined to sign for them did not mean that the service of summons in the persons of respondent spouses was a failure, such that a further effort was required to serve the summons anew. A tender of summons, much less, a substituted service of summons, need no longer be resorted to in this case. Indeed, a contrary ruling by this Court would inevitably give every future defendant to a case the unwarranted means to easily thwart the cardinal procedures for the service of summons at the simple expedient of returning the summons and the copy of the complaint to the process server and refusing to sign for the same even after being already informed of their contents. This the Court will never allow. As to the reliance of the Court of Appeals on the second paragraph of the Return on Service of Summons stating that the original and duplicate copies of the Summons were returned "UNSERVED," the Court finds the same utterly misplaced. A simple reading of the first paragraph of the Return on Service of Summons, which contains the circumstances surrounding the service of the summons on the persons of the respondent spouses Mogol, manifestly reveals that the summons and the copy of the complaint were already validly served on the said respondents. They merely refused to receive or obtain a copy of the same. The certificate of service of the process server is prima facie evidence of the facts as set out therein. This is fortified by the presumption of the regularity of performance of official duty. To overcome the presumption of regularity of official functions in favor of such sheriffs return, the evidence against it must be clear and convincing. Sans the requisite quantum of proof to the contrary, the presumption stands deserving of faith and credit.36 In the instant case, it is worthwhile to note that the facts stated in the first paragraph of the Return on Service of Summons were not at all disputed by the respondent spouses Mogol. Although We find lamentable the apparently erroneous statement made by the process server in the aforesaid second paragraph an error that undoubtedly added to the confusion of the parties to this case the same was, nonetheless, a mere conclusion of law, which does not bind the independent judgment of the courts. Indeed, it cannot be said that because of such a statement, respondent spouses Mogol had the right to rely on said return informing them that the summons had been unserved, thus justifying their non-filing of any responsive pleading. To reiterate, respondent spouses Mogol were validly served summons and a copy of the complaint against them. At their explicit instructions, their counsel read the same and thereby learned of the nature of the claim against them. After being made aware of the complaint filed against them, they chose not to obtain a copy thereof and pretended that it did not exist. They, thus, took a gamble in not filing any responsive pleading thereto. Suffice it to say, they lost. The constitutional requirement of due process exacts that the service be such as may be reasonably expected to give the notice desired. Once the service provided by the rules reasonably accomplishes that end, the requirement of justice is answered; the traditional notions of fair play are satisfied and due process is served.37 In fine, we rule that jurisdiction over the persons of the respondent spouses Mogol was validly acquired by the MeTC, Branch 25 in this case. For their failure to file any responsive pleading to the Complaint filed against them, in violation of the order of the said court as stated in the summons, respondent spouses Mogol were correctly declared in default. WHEREFORE, premises considered, the Petition for Review on Certiorari under Rule 45 is GRANTED. The Decision dated 21 November 2006 and the Resolution dated 12 March 2007 of the Court of Appeals in CA-G.R. SP No. 70029 are hereby REVERSED AND SET ASIDE. The Order dated 18 January 2002 of the Regional Trial Court of Manila, Branch 33, in Civil Case No. 01-101267 is hereby AFFIRMED. No costs. SO ORDERED.

SECOND DIVISION

REPUBLIC OF THE PHILIPPINES, G.R. No. 185091 REPRESENTED BY THE DEPARTMENT OF EDUCATION DIVISION OF LIPA CITY (FOR PANINSINGIN PRIMARY SCHOOL), Petitioner, Present: CARPIO, J., Chairperson, ABAD, VILLARAMA, JR.,* PEREZ,** and MENDOZA, JJ. PRIMO MENDOZA and MARIA LUCERO, Respondents. Promulgated: August 8, 2010 x --------------------------------------------------------------------------------------- x DECISION

- versus -

ABAD, J.:

This case is about the propriety of filing an ejectment suit against the Government for its failure to acquire ownership of a privately owned property that it had long used as a school site and to pay just compensation for it.

The Facts and the Case

Paninsingin Primary School (PPS) is a public school operated by petitioner Republic of the Philippines (the Republic) through the Department of Education. PPS has been using 1,149 square meters of land in Lipa City, Batangas since 1957 for its school. But the property, a portion of Lots 1923 and 1925, were registered in the name of respondents Primo and Maria Mendoza (theMendozas) under Transfer Certificate of Title (TCT) T-11410.[1]

On March 27, 1962 the Mendozas caused Lots 1923 and 1925 to be consolidated and subdivided into four lots, as follows: Lot 1 292 square meters in favor of Claudia Dimayuga Lot 2 292 square meters in favor of the Mendozas Lot 3 543 square meters in favor of Gervacio Ronquillo; and Lot 4 1,149 square meters in favor of the City Government of Lipa [2]

As a result of subdivision, the Register of Deeds partially cancelled TCT T-11410 and issued new titles for Lots 1 and 3 in favor of Dimayuga and Ronquillo, respectively. Lot 2 remained in the name of the Mendozas but no new title was issued in the name of the City Government of Lipa for Lot 4.[3] Meantime, PPS remained in possession of the property.

The Republic claimed that, while no title was issued in the name of the City Government of Lipa, the Mendozas had relinquished to it their right over the school lot as evidenced by the consolidation and subdivision plan. Further, the property had long been tax-declared in the name of the City Government and PPS built significant, permanent improvements on the same. These improvements had also been tax-declared.[4]

The Mendozas claim, on the other hand, that although PPS sought permission from them to use the property as a school site, they never relinquished their right to it. They allowed PPS to occupy the property since they had no need for it at that time. Thus, it has remained registered in their name under the original title, TCT T11410, which had only been partially cancelled.

On November 6, 1998 the Mendozas wrote PPS, demanding that it vacate the disputed property. [5] When PPS declined to do so, on January 12, 1999 the Mendozas filed a complaint with the Municipal Trial Court in Cities (MTCC) of Lipa City in Civil Case 0002-99 against PPS for unlawful detainer with application for temporary restraining order and writ of preliminary injunction.[6]

On July 13, 1999 the MTCC rendered a decision, dismissing the complaint on ground of the Republics immunity from suit. [7] The Mendozas appealed to the Regional Trial Court (RTC) of Lipa City which ruled that the Republics consent was not necessary since the action before the MTCC was not against it. [8]

In light of the RTCs decision, the Mendozas filed with the MTCC a motion to render judgment in the case before it. [9] The MTCC denied the motion, however, saying that jurisdiction over the case had passed to the RTC upon appeal. [10] Later, the RTC remanded the case back to the MTCC,[11] which then dismissed the case for insufficiency of evidence.[12] Consequently, theMendozas once again appealed to the RTC in Civil Case 2001-0236.

On June 27, 2006 the RTC found in favor of the Mendozas and ordered PPS to vacate the property. It held that the Mendozashad the better right of possession since they were its registered owners. PPS, on the other hand, could not produce any document to prove the transfer of ownership of the land in its favor.[13] PPS moved for reconsideration, but the RTC denied it.

The Republic, through the Office of the Solicitor General (OSG), appealed the RTC decision to the Court of Appeals (CA) in CA-G.R. SP 96604 on the grounds that: (1) the Mendozas were barred by laches from recovering possession of the school lot; (2) sufficient evidence showed that the Mendozas relinquished ownership of the subject lot to the City Government of Lipa City for use as school; and (3) Lot 4, Pcs-5019 has long been declared in the name of the City Government since 1957 for taxation purposes.[14]

In a decision dated February 26, 2008, the CA affirmed the RTC decision. [15] Upholding the Torrens system, it emphasized the indefeasibility of the Mendozas registered title and the imprescriptible nature of their right to eject any person occupying the property. The CA held that, this being the case, the Republics possession of the property through PPS should be deemed merely a tolerated one that could not ripen into ownership.

The CA also rejected the Republics claim of ownership since it presented no documentary evidence to prove the transfer of the property in favor of the government. Moreover, even assuming that the Mendozas relinquished their right to the property in 1957 in the governments favor, the latter never took steps to have the title to the property issued in its name or have its right as owner annotated on the Mendozas title. The CA held that, by its omissions, the Republic may be held in estoppel to claim that theMendozas were barred by laches from bringing its action.

With the denial of its motion for reconsideration, the Republic has taken recourse to this Court via petition for review oncertiorari under Rule 45.

The Issue Presented

The issue in this case is whether or not the CA erred in holding that the Mendozas were entitled to evict the Republic from the subject property that it had used for a public school.

The Courts Ruling

A decree of registration is conclusive upon all persons, including the Government of the Republic and all its branches, whether or not mentioned by name in the application for registration or its notice.[16] Indeed, title to the land, once registered, is imprescriptible. [17] No one may acquire it from the registered owner by adverse, open, and notorious possession.[18] Thus, to a registered owner under the Torrens system, the right to recover possession of the registered property is equally imprescriptible since possession is a mere consequence of ownership.

Here, the existence and genuineness of the Mendozas title over the property has not been disputed. While the consolidation and subdivision plan of Lots 1923 and 1925 shows that a 1,149 square meter lot had been designated to the City Government, the Republic itself admits that no new title was issued to it or to any of its subdivisions for the portion that PPS had been occupying since 1957. [19]

That the City Government of Lipa tax-declared the property and its improvements in its name cannot defeat the Mendozas title. This Court has allowed tax declarations to stand as proof of ownership only in the absence of a certificate of title. [20] Otherwise, they have little evidentiary weight as proof of ownership. [21]

The CA erred, however, in ordering the eviction of PPS from the property that it had held as government school site for more than 50 years. The evidence on record shows that the Mendozas intended to cede the property to the City Government of Lipa permanently. In fact, they allowed the city to declare the property in

its name for tax purposes. And when they sought in 1962 to have the bigger lot subdivided into four, the Mendozas earmarked Lot 4, containing 1,149 square meters, for the City Government of Lipa. Under the circumstances, it may be assumed that the Mendozas agreed to transfer ownership of the land to the government, whether to the City Government of Lipa or to the Republic, way back but never got around to do so and the Republic itself altogether forgot about it. Consequently, the Republic should be deemed entitled to possession pending the Mendozas formal transfer of ownership to it upon payment of just compensation.

The Court holds that, where the owner agrees voluntarily to the taking of his property by the government for public use, he thereby waives his right to the institution of a formal expropriation proceeding covering such property. Further, as the Court also held in Eusebio v. Luis,[22] the failure for a long time of the owner to question the lack of expropriation proceedings covering a property that the government had taken constitutes a waiver of his right to gain back possession. The Mendozas remedy is an action for the payment of just compensation, not ejectment.

In Republic of the Philippines v. Court of Appeals,[23] the Court affirmed the RTCs power to award just compensation even in the absence of a proper expropriation proceeding. It held that the RTC can determine just compensation based on the evidence presented before it in an ordinary civil action for recovery of possession of property or its value and damages. As to the time when just compensation should be fixed, it is settled that where property was taken without the benefit of expropriation proceedings and its owner filed an action for recovery of possession before the commencement of expropriation proceedings, it is the value of the property at the time of taking that is controlling.[24]

Since the MTCC did not have jurisdiction either to evict the Republic from the land it had taken for public use or to hear and adjudicate the Mendozas right to just compensation for it, the CA should have ordered the complaint for unlawful detainer dismissed without prejudice to their filing a proper action for recovery of such compensation.

WHEREFORE, the Court partially GRANTS the petition, REVERSES the February 26, 2008 decision and the October 20, 2008 resolution of the Court of Appeals in CA-G.R. 96604, and ORDERS the dismissal of respondents Primo and Maria Mendozas action for eviction before the Municipal Trial Court in Cities of Lipa City in Civil Case 0002-99 without prejudice to their filing an action for payment of just compensation against the Republic of the Philippines or, when appropriate, against the City of Lipa.

SO ORDERED.

G.R. No. 166508, October 2, 2009

NATIONAL HOME MORTGAGE FINANCE CORPORATION, Petitioner, VS

MARIO ABAYARI, et,al.

DECISION PERALTA, J.: In this petition for review[1] under Rule 45 of the Rules of Court, the National Home Mortgage Finance Corporation assails the August 20, 2004 Decision[2] of the Court of Appeals in CA-G.R. SP No. 82637, which dismissed its petition for certiorari from the October 14, 2003[3] and December 15, 2003[4] Orders issued by the Regional Trial Court (RTC) of Makati City, Branch 138.[5] The said Orders, in turn, respectively granted the issuance of a writ of execution and denied petitioners motion for reconsideration in Civil Case No. 991209 a case for mandamus. The antecedents follow.

Petitioner, the National Home Mortgage Finance Corporation (NHMFC), is a government-owned and controlled corporation created under the authority of Presidential Decree No. 1267 for the primary purpose of developing and providing a secondary market

for home mortgages granted by public and/or private home-financing institutions. [6] In its employ were respondents,[7] mostly rankand-file employees, who all profess as having been hired after June 30, 1989.[8]

On July 1, 1989, Republic Act No. 6758, otherwise known as The Compensation and Position Classification Act of 1989, was enacted and was subsequently approved on August 21, 1989. Section 12 thereof directed that all allowances namely representation and transportation allowance, clothing and laundry allowance, subsistence allowance, hazard pay and other allowances as may be determined by the budget department enjoyed by covered employees should be deemed included in the standardized salary rates prescribed therein, and that the other additional compensation being received by incumbents only as of July 1, 1989 not integrated into the standardized salary rates should continue to be authorized. To implement the law, the Department of Budget and Management (DBM) issued Corporate Compensation Circular No. 10.[9] Section 5.5[10] thereof excluded certain allowances and benefits from integration into the standardized basic salary but continued their grant to those who were incumbents as of June 30, 1989 and who were actually receiving the benefits as of said date. These are the allowances involved in this case. Respondents filed a petition for mandamus with the RTC of Makati City, Branch 138[11] to compel petitioner to pay them meal, rice, medical, dental, optical and childrens allowances, as well as longevity pay, which allegedly were already being enjoyed by other NHMFC employees as early as July 1, 1989. In its April 27, 2001 Decision, the trial court ruled favorably and ordered petitioner to pay respondents the allowances prayed for, retroactive to the respective dates of appointment. [12] The dispositive portion of the Decision reads:

WHEREFORE, judgment is hereby rendered in favor of the petitioners and respondent is ordered to pay petitioners their meal allowance, rice allowance, medical allowance, longevity pay and childrens allowance retroactive to the dates of their respective appointments up to the present or for the time that they were employed by the respondent. SO ORDERED.[13] In arriving at the conclusion that respondents were entitled to the prayed-for benefits, the trial court explained, thus, The use of the word only before the words July 1, 1989 in section 12 of Republic Act No. 6758 appears to be the source of the dispute.

Section 12 is clear that other additional compensation being received by incumbents only as of July 1, 1989 that are not integrated into the standardized salary rates shall continue to be authorized. The law is prospective in effect and it does not say that such additional compensation shall not continue to be authorized for employees appointed after June 30, 1989. The use of the word only before the words as of July 1, 1989 qualifies the additional compensation which can be continued. The foregoing applies to all employees whether permanent or casual.

DBM Circular No. 10, the Implementing Rules and Regulations particularly section 5.5 thereofuse the word only for incumbents as of June 30, 1989 and by implication the same shall not apply to employees appointed after June 30, 1989. This is in effect another qualification limiting the grant of benefits to those who are incumbents as of June 30, 1989, a condition not imposed by Section 12 of Republic Act No. 6758 for which reason it has to be strike (sic) down.[14] Petitioner timely filed an appeal with the Court of Appeals.[15] In its November 21, 2001 Decision, the appellate court affirmed the trial courts ruling.[16] No appeal was taken from the decision and upon its finality,[17] respondents moved for execution.[18]

However, the motion for execution was withdrawn when on May 12, 2002, petitioner and respondents executed a Compromise Agreement in which petitioner bound itself to comply with the decision rendered in the case, except that the payment of the allowances adjudicated in favor of respondents would be made in four installments instead. It was, likewise stipulated therein that the parties waive all claims against each other. The trial court did not take any positive action on the compromise except to note the same since the parties did not intend to novate the April 27, 2001 Decision. [19] On that basis, petitioner had started paying respondents the arrears in benefits.

Conflict arose when the DBM sent a letter[20] dated July 15, 2003 to NHMFC President Angelico Salud disallowing the payment of certain allowances, including those awarded by the trial court to respondents. A reading of the letter reveals that the disallowance was made in accordance with the 2002 NHMFC Corporate Operating Budget previously issued by the DBM.

To abide by the DBMs directive, petitioner then issued a memorandum stating that effective August 2003, the grant of benefits to its covered employees, including those awarded torespondents, would be curtailed pursuant to the DBM letter.[21] This eventuality compelled respondents to file for the second time a motion for a writ of execution of the trial courts April 27, 2001 decision. [22]

In its October 14, 2003 Order,[23] the trial court found merit in respondents motion; hence, it directed the execution of the judgment. Petitioner moved for reconsideration[24] but it was denied.[25] On February 16, 2004, the trial court issued a Writ of Execution/Garnishment with a directive to the sheriff to tender to respondents the amount of their collective claim equivalent to P4,806,530.00 to be satisfied out of petitioners goods and chattels and if the same be not sufficient, out of its existing real property.[26] Respondents then sought the garnishment of its funds under the custody of the Land Bank of the Philippines.[27] Bent on preventing execution, petitioner filed a petition for certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 82637.
[28]

In it, petitioner ascribed grave abuse of discretion to the trial court in ordering the execution of the judgment. It pointed

out that the trial court disregarded the fact that the DBMs issuance amounted to a supervening event, or an occurrence that changed the situation of the parties that would make the continued payment of allowances to respondents impossible and illegal, and disregarded the DBMs exclusive authority to allow or disallow the payment of the benefits in question. [29] It likewise faulted the trial court in ordering the garnishment of its funds despite the settled rule that government funds may not be garnished in the absence of an appropriation made by law.[30] The Court of Appeals, however, found no grave abuse of discretion on the part of the trial court; hence, in its August 20, 2004 Decision, it dismissed the petition for lack of merit.[31] In its present recourse, petitioner, on the one hand, insists that it is difficult not to consider the issuance of the DBM in this case as a supervening event that would make the execution of the trial courts decision inequitable and/or impossible, since the determination of entitlement to benefits and allowances among government employees is within the agencys exclusive authority.It argues that, hence, both the trial court and the Court of Appeals were in error to order the execution of the decision as the same totally disregards the rule that issuances of administrative agencies are valid and enforceable. [32] Again, it asserts that the garnishment of its funds was not in order as there was no existing appropriation therefor.[33] Respondents, on the other hand, argue in the main that inasmuch as the core issue of whether they were entitled to the schedule of benefits under Section 12 of R.A. No. 6758 had already been settled by both the trial court in Civil Case No. 99-1209 and the Court of Appeals in CA-G.R. SP No. 66303, the DBM letter should not be allowed to interfere with the decision and render the same ineffective. Since the said decision had already attained finality, they posit that execution appeared to be the only just and equitable measure under the premises[34] and that garnishment lies against petitioners funds inasmuch as it has a personality separate and distinct from the government.[35]

There is partial merit in the petition.

To begin with, a writ of mandamus is a command issuing from a court of law of competent jurisdiction, in the name of the state or sovereign, directed to an inferior court, tribunal, or board, or to some corporation or person, requiring the performance of a particular duty therein specified, which duty results from the official station of the party to whom the writ is directed, or from operation of law.[36] It is employed to compel the performance, when refused, of a ministerial duty [37] which, as opposed to a discretionary one, is that which an officer or tribunal performs in a given state of facts, in a prescribed manner, in obedience to the

mandate of legal authority, without regard to or the exercise of his or its own judgment upon the propriety or impropriety of the act done.[38]

A favorable judgment rendered in a special civil action for mandamus is in the nature of a special judgment. As such, it requires the performance of any other act than the payment of money or the sale or delivery of real or personal property the execution of which is governed by Section 11, Rule 39 of the Rules of Court[39] which states:

SECTION 11. Execution of Special Judgment.When the judgment requires the performance of any act other than those mentioned in the two preceding sections, a certified copy of the judgment shall be attached to the writ of execution and shall be served by the officer upon the party against whom the same is rendered, or upon any other person required thereby, or by law, to obey the same, and such party or person may be punished for contempt if he disobeys such judgment.

While the April 17, 2001 Decision of the trial court ordered petitioner to pay the benefits claimed by respondents, it by no means ordered the payment of a specific sum of money and instead merely directed petitioner to extend to respondents the benefits under R.A. No. 6758 and its implementing rules. Being a special judgment, the decision may not be executed in the same way as a judgment for money handed down in an ordinary civil case governed by Section 9, Rule 39 of the Rules Court which sanctions garnishment of debts and credits to satisfy a monetary award. Garnishment is proper only when the judgment to be enforced is one for payment of a sum of money. It cannot be employed to implement a special judgment such as that rendered in a special civil action formandamus.[40] On this score, not only did the trial court exceed the scope of its judgment when it awarded the benefits claimed by respondents. It also committed a blatant error when it issued the February 16, 2004 Order directing the garnishment of petitioners funds with the Land Bank of the Philippines equivalent to P4,806,530.00, even though the said amount was not specified in the decision it sought to implement. Be that as it may, assuming for the sake of argument that execution by garnishment could proceed in this case against the funds of petitioner, it must bear stress that the latter is a government-owned or controlled corporation with a charter of its own. Its juridical personality is separate and distinct from the government and it can sue and be sued in its name. [41] As such, while indeed it cannot evade the effects of the execution of an adverse judgment and may not ordinarily place its funds beyond an order of garnishment issued in ordinary cases,[42] it is imperative in order for execution to ensue that a claim for the payment of the judgment award be first filed with the Commission on Audit (COA).[43]

Under Commonwealth Act No. 327,[44] as amended by P.D. No. 1445,[45] the COA, as one of the three independent constitutional commissions, is specifically vested with the power, authority and duty to examine, audit and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property owned or held in trust by the government, or any of its subdivisions, agencies or instrumentalities, including government-owned and controlled corporations.[46] To ensure the effective discharge of its functions, it is vested with ample powers, subject to constitutional limitations, to define the scope of its audit and examination and establish the techniques and methods required therefor, to promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant or unconscionable expenditures or uses of government funds and properties.[47] Section 1,[48] Rule II of the COA Rules of Procedure materially provides:

Section 1. General Jurisdiction.The Commission on Audit shall have the power, authority and duty to examine, audit and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to the Government, or any of its subdivisions, agencies or instrumentalities, including government owned and controlled corporations with original charters, and on a postaudit basis: (a) constitutional bodies, commissions and offices that have been granted fiscal autonomy under the Constitution; (b) autonomous state colleges and universities; (c) other government-owned or controlled corporations and their subsidiaries; and (d) such non-governmental entities receiving subsidy or equity directly or indirectly, from or through the government, which are required by law or the granting institution to submit to such

audit as a condition of subsidy or equity. However, where the internal control system of the audited agencies is inadequate, the Commission may adopt such measures, including temporary or special pre-audit, as are necessary or appropriate to correct the deficiencies. It shall keep the general accounts of the Government, and for such period as may be provided by law, preserve the vouchers and other supporting papers pertaining thereto.

xxxx Specifically, such jurisdiction shall extend over but not limited to the following: x x x Money claims due from or owing to any government agency x x x.[49] Clearly, the matter of allowing or disallowing a money claim against petitioner is within the primary power of the COA to decide. This no doubt includes money claims arising from the implementation of R.A. No. 6758.[50] Respondents claim against petitioner, although it has already been validated by the trial courts final decision, likewise belongs to that class of claims; hence, it must first be filed with the COA before execution could proceed. And from the decision therein, the aggrieved party is afforded a remedy by elevating the matter to this Court via a petition for certiorari[51] in accordance with Section 1 Rule XI, of the COA Rules of Procedure. It states: Section 1. Petition for Certiorari. - Any decision, order or resolution of the Commission may be brought to the Supreme Court on certiorari by the aggrieved party within thirty (30) days from receipt of a copy thereof in the manner provided by law, the Rules of Court and these Rules. When the decision, order or resolution adversely affects the interest of any government agency, the appeal may be taken by the proper head of the agency. At this juncture, it is unmistakable that the recourse of respondents in CA-G.R. SP No. 82637 as well as in the petition before us is at best premature. Thus, the Court cannot possibly rule on the merits of the petition lest we would only be preempting the action of the COA on the matter. Suffice it to say that the propriety or regularity of respondents claim under the judgment of the trial court may properly be addressed by the COA in an appropriate action. And even if we endeavor to take great lengths in deciding the merits of the case and determine the propriety of the DBMs issuance, its sufficiency to prevent the execution of the final judgment rendered in this case, and the entitlement or non-entitlement of each one of the respondents to the benefits under R.A. No. 6758, the same would nevertheless be a futile exercise. This, because after having pored over the records of the case, we found nothing sufficient to support respondents uniform claim that they were incumbents as of July 1, 1989 the date provided in Section 12 of R.A. 6758 exceptperhaps their bare contention that they were all hired after June 30, 1989. With this disquisition, we find no compelling reason to unnecessarily lengthen the discussion by undeservingly proceeding further with the other issues propounded by the parties. WHEREFORE, the petition is GRANTED IN PART. The Writ of Execution dated February 16, 2004 issued in Civil Case No. 99-1209 is hereby SET ASIDE. The Regional Trial Court of Makati, Branch 138 is DIRECTED to issue a writ of execution in accordance with this Decision and execute the judgment pursuant to Section 11, Rule 39, of the Rules of Court. SO ORDERED.