VICTORINO QUINAGORAN - versus - COURT OF APPEALS

and THE HEIRS OF JUAN DE LA CRUZ WHEREFORE, for lack of merit, the motion to
dismiss is hereby denied.[8]
Before the Court is a Petition for Review on Certiorari under
Petitioner's Motion for Reconsideration was also denied by
Rule 45 of the Rules of Court, assailing the Decision[1] of the
the RTC.[9]
Court Appeals (CA) in CA-GR SP No. 60443 dated May 27,
2002 and its Resolution[2] dated August 28, 2002, which
Petitioner then went to the CA on a Petition
denied petitioner's Motion for Reconsideration.
for Certiorari and Prohibition seeking the annulment of
the Orders of the RTC.[10]
The factual antecedents.
On May 27, 2002, the CA rendered the herein
assailed Decision dismissing petitioner's action and
The heirs of Juan dela Cruz, represented
affirming in toto the RTC.[11]Pertinent portions of
by Senen dela Cruz(respondents), filed on October 27, 1994
said Decision, read:
a Complaint for Recovery of Portion of Registered Land with
Compensation and Damages
At the onset, we find that the complaint filed by the
against Victorino Quinagoran (petitioner) before the Regional
Heirs of Juan dela Cruz, represented
Trial Court (RTC) Branch XI of Tuao, Cagayan, docketed as
by Senen dela Cruz adequately set forth the
Civil Case No. 240-T.[3] They alleged that they are the co-
jurisdictional requirements for a case to be
owners of a a parcel of land containing 13,100 sq m located at
cognizable by the Regional Trial Court. The Complaint
Centro, Piat, Cagayan, which they inherited from the late
is captioned recovery of portion of registered land
Juan dela Cruz; that in the mid-70s, petitioner started
[4]
and it contains the following allegations:
occupying a house on the north-west portion of the property,
7. That since plaintiffs and defendant
covering 400 sq m, by tolerance of respondents; that in 1993,
were neighbors, the latter being the
they asked petitioner to remove the house as they planned to
admitted owner of the adjoining lot,
construct a commercial building on the property; that
the former's occupancy of said house by
petitioner refused, claiming ownership over the lot; and that
defendant was only due to the tolerance
they suffered damages for their failure to use the
of herein plaintiffs;
same.[5] Respondents prayed for the reconveyance and
surrender of the disputed 400 sq m, more or less, and to be
8. That plaintiffs, in the latter period of
paid the amount of P5,000.00 monthly until the property is
1993, then demanded the removal of the
vacated, attorney's fees in the amount of P20,000.00, costs of
subject house for the purpose of
suit and other reliefs and remedies just and equitable.[6]
constructing a commercial building and
which herein defendant refused and in
Petitioner filed a Motion to Dismiss claiming that the RTC has
fact now claims ownership of the portion
no jurisdiction over the case under Republic Act (R.A.) No.
in which said house stands;
7691, which expanded the exclusive original jurisdiction of
the Municipal Trial Court (MTC) to include all civil actions
9. That repeated demands relative to the
which involve title to, or possession of, real property, or any
removal of the subject house were hence
interest therein which does not exceed P20,000.00. He argued
made but which landed on deaf ears;
that since the 346 sq m lot which he owns adjacent to the
contested property has an assessed value of P1,730.00, the
10. That a survey of the property as
assessed value of the lot under controversy would not be
owned by herein plaintiffs clearly
more than the said amount.[7]
establishes that the subject house is
occupying Four Hundred (400) square
The RTC denied petitioner's Motion to Dismiss in an Order
meters thereof at the north-west portion
datedNovember 11, 1999, thus:
thereof, as per the approved survey plan
in the records of the Bureau of Lands.
The Court finds the said motion to be without
merit. The present action on the basis of the
xxxx
allegation of the complaint partakes of the
nature of action publicciana (sic) and
It is settled that when the complaint fails to aver facts
jurisdiction over said action lies with the
constitutive of forcible entry or unlawful detainer, as
Regional Trial Court, regardless of the value of
where it does not state how entry was effected or
the property.This is so because in paragraph 8
how and when dispossession started, the remedy
of the complaint, it is alleged that the plaintiff
should either be an accion publiciana or
demanded from the defendant the removal of
an accionreinvindicatoria in the proper regional trial
the house occupied by the defendant and the
court. In the latter instances, jurisdiction pertains to
possession of which is Only due to Tolerance
the Regional Trial Court.
(sic) of herein plaintiffs.

1
As another legal recourse from a case.[16] The tax declaration covering Lot No. 1807 owned by
simple ejectment case governed by the Revised Rules respondents and where the herein disputed property is
of Summary Procedure, an accion publiciana is the purportedly part -- a copy of which petitioner submitted to
plenary action to recover the right of possession the CA -- also shows that the value of the property is
when dispossession has lasted more than one year or only P551.00.[17] Petitioner then prays that the CA Decision
when dispossession was effected by means other and Resolution be annulled and set aside and that the
than those mentioned in Rule 70 of the Rules of complaint of herein respondents before the trial court be
Court. Where there is no allegation that there was dismissed for lack of jurisdiction.[18]
denial of possession through any of the methods
stated in Section 1, Rule 70 of the Rules of Court, or Respondents contend that: the petition is without factual and
where there is no lease contract between the parties, legal bases, and the contested decision of the CA is entirely in
the proper remedy is the plenary action of recovery accordance with law;[19] nowhere in the body of their
of possession. Necessarily, the action falls within the complaint before the RTC does it state that the assessed value
jurisdiction of the Regional Trial Court. Thus, we find of the property is below P20,000.00;[20] the contention of
that the private respondents [heirs of dela Cruz] petitioner in his Motion to Dismiss before the RTC that the
availed of the proper remedy when they filed the assessed value of the disputed lot is below P20,000.00 is
action before the court a quo. based on the assessed value of an adjacent property and no
documentary proof was shown to support the said
Undoubtedly, the respondent court therefore did not allegation;[21]the tax declaration which petitioner
act with grave abuse of discretion amounting to or in presented, together with his Supplemental Reply before the
excess of jurisdiction in denying Quinagoran's Motion CA, and on the basis of which he claims that the disputed
to Dismiss and the Motion for Reconsideration, property's assessed value is only P551.00, should also not be
thereof, because it has jurisdiction to hear and decide given credence as the said tax declaration reflects the amount
the instant case. of P56,100.00 for the entire property.[22]
The question posed in the present petition is not
xxxx complicated, i.e., does the RTC have jurisdiction over all cases
of recovery of possession regardless of the value of the
It would not be amiss to point out that the nature of property involved?
the action and jurisdiction of courts are determined
by the allegations in the complaint. As correctly held The answer is no. The doctrine on which the RTC anchored its
by the Regional Trial Court, the present action on the denial of petitioner's Motion to Dismiss, as affirmed by the
basis of the allegation of the complaint partakes of CA -- that all cases of recovery of possession
the nature of action publiciana and jurisdiction over or accion publiciana lies with the regional trial courts
said action lies with the Regional Trial Court regardless of the value of the property -- no longer holds
regardless of the value of the property. Therefore, we true. As things now stand, a distinction must be made
completely agree with the court a quo's conclusion between those properties the assessed value of which is
that the complaint filed by the Heirs of Juan dela Cruz, below P20,000.00, if outside Metro Manila; and P50,000.00, if
represented by Senen dela Cruz, is in the nature within.
of an accionpubliciana and hence it is the Regional
Trial Court which has jurisdiction over the action, Republic Act No. 7691[23] which
regardless of the assessed value of the property amended Batas Pambansa Blg. 129[24] and which was already
subject of present controversy.[12] in effect[25] when respondents filed their complaint with the
RTC on October 27, 1994,[26] expressly provides:
Petitioner's Motion for Reconsideration was denied on August
28, 2002 for lack of merit.[13] SEC. 19. Jurisdiction in civil cases Regional
Trial Courts shall exercise exclusive
Petitioner now comes before this Court on a petition for original jurisdiction:
review claiming that under R.A. No. 7691 the jurisdiction of xxxx
the MTC, Metropolitan Trial Court (MeTC), and Municipal (2) In all civil actions which involve the
Trial Court in Cities (MTCC) was expanded to include title to or possession of, real property, or
exclusive original jurisdiction over civil actions when the any interest therein, where the assessed
assessed value of the property does not value of the property involved exceeds
exceed P20,000.00 outside Metro Manila and P50,000.00 Twenty thousand pesos (P20,000.00) or,
within Metro Manila.[14] He likewise avers that it is an for civil actions in Metro Manila, where such
indispensable requirement that the complaint should allege value exceeds Fifty thousand pesos
the assessed value of the property involved.[15] In this case, (P50,000.00) except for forcible entry into
the complaint does not allege that the assessed value of the and unlawful detainer of lands or buildings,
land in question is more than P20,000.00. There was also no original jurisdiction over which is conferred
tax declaration attached to the complaint to show the upon the Metropolitan Trial Courts,
assessed value of the property. Respondents therefore failed Municipal Trial Courts, and Municipal Circuit
to allege that the RTC has jurisdiction over the instant Trial Courts.

2
 xxxx In this case, the complaint denominated as Recovery of
SEC. 33. Jurisdiction of Metropolitan Trial Portion of Registered Land with Compensation and
Courts, Municipal Trial Courts and Municipal Damages, reads:
Circuit Trial Courts in Civil Cases. ---
Metropolitan Trial Courts, Municipal 1. That plaintiffs are the only direct and
Trial Courts, and Municipal Circuit Trial legitimate heirs of the late Juan dela Cruz, who
Courts shall exercise: died intestate on February 3, 1977, and are all
xxxx residents of Centro, Piat, Cagayan;
(3) Exclusive original jurisdiction in all xxxx
civil actions which involve title to, or 4. That plaintiffs inherited
possession of , real property, or any from x x x Juan dela Cruz x x x a certain parcel
interest therein where the assessed value of land x x x containing an area of 13,111
of the property or interest therein does square meters.
not exceed Twenty thousand pesos 5. That sometime in the mid-1960's, a house
(P20,000.00) or, in civil actions in Metro was erected on the north-west portion of
Manila, where such assessed value does not the aforedescribed lot x x x.
exceed Fifty thousand pesos (P50,000.00) xxxx
exclusive of interest, damages or whatever
kind, attorney's fees, litigation expenses and 7. That since plaintiffs and defendant were
costs: Provided That in cases of land not neighbors, the latter being the admitted owner
declared for taxation purposes, the value of of the adjoining lot, the former's occupancy of
such property shall be determined by the said house by defendant was only due to the
assessed value of the adjacent lots.(Emphasis tolerance of herein plaintiffs;
supplied)
8. That plaintiffs, in the latter period of 1993,
The Court has also declared that all cases involving title to or then demanded the removal of the subject
possession of real property with an assessed value of less house for the purpose of constructing a
than P20,000.00 if outside Metro Manila, falls under the commercial building and which herein
original jurisdiction of the municipal trial court.[27] defendant refused and in fact now claims
In Atuel v. Valdez[28] the Court likewise expressly stated that: ownership of the portion in which said house
stands;
Jurisdiction over an accion publiciana is vested
in a court of general jurisdiction. Specifically, 9. That repeated demands relative to the
the regional trial court exercises exclusive removal of the subject house were hence made
original jurisdiction in all civil actions which but which landed on deaf ears;
involve x x x possession of real
property. However, if the assessed value of 10. That a survey of the property as owned by
the real property involved does not herein plaintiffs clearly establishes that the
exceed P50,000.00 in Metro Manila, subject house is occupying Four Hundred (400)
and P20,000.00 outside of Metro Manila, the square meters thereof at the north-west
municipal trial court exercises jurisdiction portion thereof, as per the approved survey
over actions to recover possession of real plan in the records of the Bureau of Lands.[32]
property.[29]

That settled, the next point of contention is whether the Nowhere in said complaint was the assessed value of the
complaint must allege the assessed value of the property subject property ever mentioned. There is therefore no
involved. Petitioner maintains that there should be such an showing on the face of the complaint that the RTC
allegation, while respondents claim the opposite. has exclusive jurisdiction over the action of the
respondents.[33] Indeed, absent any allegation in the complaint
In no uncertain terms, the Court has already held that a of the assessed value of the property, it cannot be determined
complaint must allege the assessed value of the real property whether the RTC or the MTC has original and exclusive
subject of the complaint or the interest thereon to determine jurisdiction over the petitioner's action.[34] The courts cannot
which court has jurisdiction over the action.[30] This is take judicial notice of the assessed or market value of the
because the nature of the action and which court has original land.[35]
and exclusive jurisdiction over the same is determined by the
material allegations of the complaint, the type of relief prayed Jurisdiction of the court does not depend upon the answer of
for by the plaintiff and the law in effect when the action is the defendant or even upon agreement, waiver or
filed, irrespective of whether the plaintiffs are entitled to acquiescence of the parties.[36] Indeed, the jurisdiction of the
some or all of the claims asserted therein.[31] court over the nature of the action and the subject matter
thereof cannot be made to depend upon the defenses set up in
the court or upon a motion to dismiss for,otherwise, the

3
question of jurisdiction would depend almost entirely on the Atty. Manuel D. Cab (Cab) is the registered owner of two
defendant.[37] parcels of land in Poblacion, Sibagat, Agusan del Sur with an
area of 125,804 square meters (Cab Property). The Cab
Considering that the respondents failed to allege in their Property is covered by OCT No. P-5638 issued pursuant to
complaint the assessed value of the subject property, the Free Patent No. 1318. The Cab Property is traversed by the
RTC seriously erred in denying the motion to Butuan to Davao Road and adjacent to the municipal building
dismiss. Consequently, all proceedings in the RTC are null and of Sibagat. From the Cab Property, Cab donated the lot
void,[38] and the CA erred in affirming the RTC.[39] occupied by the municipal building.[5]

WHEREFORE, the petition is GRANTED. The Court In 1964, Cab appointed Federico Atuel (Atuel) as
of Appeals'sDecision in CA-GR SP No. 60443 dated May 27, administrator of the Cab Property.
2002 and itsResolution dated August 28, Sometime in 1977, Bernabe Valdez (Valdez) arrived in
2002, are REVERSED and SET ASIDE.The Sibagat from Baogo Bontoc, Southern Leyte. Valdez is the
Regional Trial Courts Orders dated November 11, nephew of Atuel, who recommended to Cab to lease a portion
1999 and May 11, 2000, and all proceedings therein are of the Cab Property to Valdez.[6]On 9 October 1978, Cab and
declared NULL and VOID.The complaint in Civil Case No. 240- Valdez entered into a Lease of Improved Agricultural Land
T is dismissed without prejudice. under which Valdez leased a 1.25-hectare portion of the Cab
Property for P300.00 per year for two years.
No costs.
In 1982, Cab allowed the Spouses Federico and Sarah
SO ORDERED. Atuel (Spouses Atuel) and the Spouses George and Eliada
Galdiano (Spouses Galdiano) to occupy a 2,000-square meter
portion of the Cab Property. The Spouses Atuel and the
Spouses Galdiano constructed their respective houses on this
2,000-square meter lot (Subject Lot).
[G.R. No. 139561. June 10, 2003] On 27 September 1985, the Sangguniang Bayan of
Sibagat, Agusan del Sur, approved the town plan of the
Municipality of Sibagat which classified the Cab Property as
residential, subject to the approval of the Ministry of Human
SPOUSES FEDERICO ATUEL and SARAH ATUEL and Settlements Regulatory Commission.
SPOUSES GEORGE GALDIANO and ELIADA
GALDIANO, petitioners, vs. SPOUSES BERNABE On 25 June 1988, Cab informed Valdez that their lease
VALDEZ and CONCHITA VALDEZ, respondents. contract had already expired, and demanded that Valdez stop
cultivating the 1.25-hectare portion of the Cab Property and
vacate the same.
The Case On 2 October 1988, responding to Cabs letter, the MARO
of Sibagat, Agusan del Sur informed Cab that Valdez was
properly identified as a tenant, and thus deemed to be the
Before us is a petition for review on certiorari[1] seeking owner of the land he cultivated. The MARO added that on 14
to reverse the Decision[2] of the Court of Appeals dated 20 September 1988, pursuant to Presidential Decree No. 27,
May 1999 in CA-G.R. SP No. 48682 as well as the Resolution Emancipation Patent No. A-159969 was issued to Valdez for a
dated 14 July 1999 denying the Motion for 2.3231-hectare portion (PD 27 Land) of the Cab Property. The
Reconsideration. The Court of Appeals in its assailed decision PD 27 Land included the 2,000-square meter Subject Lot
affirmed the Decision of the Department of Agrarian Reform occupied by the houses of the Spouses Atuel and the
Adjudication Board[3](DARAB) which reversed the Spouses Galdiano.
Decision[4] of the Municipal Agrarian Reform Office (MARO) in
Malaybalay, Bukidnon. The MARO of Bukidnon ordered the On 11 May 1989, Cab filed with the DAR in Manila a
Department of Agrarian Reform (DAR), Agusan del Sur, to petition for cancellation of Valdezs emancipation patent. Cab
segregate 2,000 square meters from the land of the Spouses claimed that his property is not planted to rice and corn and
Bernabe and Conchita Valdez. The MARO of Bukidnon also that Valdez is a civil law lessee, not a tenant.[7] Consequently,
awarded the same segregated land to the Spouses Federico the DAR ordered the Regional Director of Cagayan de Oro City
and Sarah Atuel and the Spouses George and Eliada Galdiano. to conduct an investigation regarding the petition.[8]
On 17 September 1989, the Housing and Land Use
Regulatory Board (HLURB) approved the Town Plan and
The Facts Zoning Ordinance of fifty-eight municipalities, including that
of Sibagat. The HLURB classified the Cab Property as 90
percent residential, and the remaining portion as institutional
The present controversy springs from a battle of and park or open space.
possession over a portion of a property in Poblacion
(formerly Sibagat Nuevo), Sibagat, Agusan del Sur.

4
 On 27 September 1991, the Spouses Bernabe and possessory rights of the complainants over the
Conchita Valdez (Spouses Valdez) filed a complaint[9] for EP (Emancipation Patent) covered land; and
Recovery of Possession with Damages with the DARAB in
Malaybalay, Bukidnon against the Spouses Atuel and the (2) Ordering the MARO (Municipal Agrarian Reform
Spouses Galdiano. In their complaint, the Spouses Valdez Officer) or PARO (Provincial Agrarian Reform
alleged that the Spouses Atuel and the Spouses Officer) concerned to assist the parties in
Galdiano stealthily and through fraud entered and determining the amount to be reimbursed in
occupied a portion of the above-described property with an favor of the respondents for whatever
area of 2,000 sq. m. more or less. The Spouses Valdez improvements made on the 2,000 square
claimed that the Spouses Atuel and the Spouses Galdiano, meter portion to be paid by the complainants.
despite repeated demands, refused to restore possession of
the said portion of land to the Spouses Valdez. The Spouses SO ORDERED.[12]
Valdez prayed that the Spouses Atuel and the Spouses
Galdiano be ordered to vacate and restore to the Spouses
Valdez possession of the Subject Lot. The Spouses Valdez also Aggrieved by the decision, the Spouses Atuel and the
prayed for payment of litigation expenses, as well as Spouses Galdiano filed a petition for review[13] with the Court
unearned income from the Subject Lot and moral damages. of Appeals. On 20 May 1999, the Court of Appeals affirmed the
decision of the DARAB Central Office and dismissed the
In their answer, the Spouses Atuel and the Spouses petition for lack of merit. The Spouses Atuel and the Spouses
Galdiano asserted that the Spouses Valdez had no cause of Galdiano filed a Motion for Reconsideration which the Court
action against them because Cab is the owner of the Subject of Appeals denied. On 14 January 1998, while the case was
Lot while Atuel is the administrator of the Cab Property. The pending in the Court of Appeals, the Spouses Valdez sold
Spouses Atuel and the Spouses Galdiano claimed that upon 5,000 square meters out of the PD 27 Land to the Municipality
Cabs instruction and consent, they had been occupying the of Sibagat.[14]
Cab Property since 1964, long before the Spouses Valdez
leased a portion of the Cab Property in 1978. The Spouses Hence, the instant petition.
Atuel and the Spouses Galdiano also pointed out that the
Spouses Valdez never set foot on the Subject Lot nor
cultivated the same, thus, there is no dispossession to speak The Ruling of the Court of Appeals
of.
Moreover, the Spouses Atuel and the Spouses Galdiano In affirming the decision of the DARAB, the Court of
alleged that the emancipation patent issued to Valdez is null Appeals ruled that the DARAB has primary and exclusive
and void. The Spouses Atuel and the Spouses Galdiano jurisdiction over cases involving the issuance, correction and
maintained that the entire Cab Property, which is covered by cancellation of emancipation patents. The Court of Appeals
the Free Patent issued to Cab, has already been classified as held that the DARABs decision should be respected because it
residential, hence, no longer covered by PD No. 27.[10] enjoys the presumption of regularity.
On 4 March 1993, the DARAB Provincial Adjudicator, The Court of Appeals also ruled that the DARAB correctly
after hearing the case, issued a decision which disposed of as relied onPagtalunan v. Tamayo[15] where this Court held that
follows: upon issuance of an emancipation patent, a holder acquires a
vested right of absolute ownership in the land.
WHEREFORE, premises above considered, the DAR Agusan
del Sur is hereby ordered to segregate the TWO THOUSAND The Court of Appeals further held that the doctrine laid
(2,000) SQ. METERS, more or less, from the land of the down in Teodoro v. Macaraeg[16] is applicable. In Teodoro,
complainants, Transfer Certificate of Title No. 1261 covered this Court ruled that a landowner has full liberty to enter into
by Emancipation Patent No. A-159969, and award the same to a civil lease contract covering his property. However, once a
the respondents; and hereby ordered this case dismissed. landowner enters into a contract of lease whereby his land is
to be devoted to agricultural production and said landholding
is susceptible of personal cultivation by the lessee, solely or
SO ORDERED.[11]
with the help of labor coming from his immediate farm
household, then such contract is of the very essence of a
Dissatisfied with the decision, the Spouses Atuel and the leasehold agreement. Otherwise, the Court added, it would be
Spouses Galdiano appealed to the DARAB Central Office. The easy to subvert, under the guise of the liberty to contract, the
DARAB Central Office reversed the decision of the DARAB intendment of the law of protecting the underprivileged and
Provincial Adjudicator, thus: ordinarily credulous farmer from the unscrupulous schemes
and pernicious practices of the landed gentry.[17]
WHEREFORE, premises considered, the appealed decision is
hereby REVERSED. Judgment is hereby rendered as follows:
The Issue
(1) Enjoining the respondents-appellants from
committing acts of intrusion and maintain the

5
 After a review of the issues raised,[18] the question boils to discuss the nature of an action to recover possession
down to whether the Spouses Valdez are entitled to seek or accion publiciana, thus:
redress from the DARAB in recovering possession of the
2,000-square meter Subject Lot from the Spouses Atuel and xxx This is an action for recovery of the right to posses and is
the Spouses Galdiano. a plenary action in an ordinary civil proceeding in a regional
trial court to determine the better right of possession of realty
independently of the title. Accion publiciana or plenaria de
The Courts Ruling posesion is also used to refer to an ejectment suit filed after
the expiration of one year from the accrual of the cause of
action or from the unlawful withholding of possession of the
We grant the petition based not on the arguments of the realty. In such case, the regional trial court has jurisdiction.
Spouses Atuel and the Spouses Galdiano but on an entirely xxx[26]
different ground. We reverse the decision of the Court of
Appeals because of the DARABs lack of jurisdiction to take For the DARAB to acquire jurisdiction over the case,
cognizance of the present controversy. there must exist a tenancy relations between the
parties.[27] This Court held in Morta,[28] that in order for a
The DARAB has no jurisdiction to take cognizance of the
tenancy agreement to take hold over a dispute, it is essential
Spouses Valdezs complaint for recovery of possession of the
to establish all its indispensable elements, to wit:
Subject Lot.Though the parties do not challenge the
jurisdiction of the DARAB, the Court may motu
proprio consider the issue of jurisdiction.[19] The Court has xxx 1) that the parties are the landowner and the tenant or
discretion to determine whether the DARAB validly acquired agricultural lessee; 2) that the subject matter of the
jurisdiction over the case. Jurisdiction over the subject relationship is an agricultural land; 3) that there is consent
matter is conferred only by law. It may not be conferred on between the parties to the relationship; 4) that the purpose of
the court by consent or waiver of the parties where the court the relationship is to bring about agricultural production; 5)
otherwise would have no jurisdiction over the subject matter that there is personal cultivation on the part of the tenant or
of the action.[20] agricultural lessee; and 6) that the harvest is shared between
the landowner and the tenant or agricultural lessee.
In their complaint for recovery of possession, the
Spouses Valdez alleged, among others, that they are farmers xxx[29] (Emphasis supplied)
and beneficiaries of an emancipation patent. The Spouses
Valdez also alleged that the Spouses Atuel and the Spouses
Emphasizing the DARABs jurisdiction, this Court held
Galdiano stealthily and fraudulently occupied the 2,000-
in Hon. Antonio M. Nuesa, et al. v. Hon. Court of Appeals, et
square meter Subject Lot. The Spouses Valdez claimed that
al.,[30] that:
despite repeated demands,[21] the Spouses Atuel and the
Spouses Galdiano refused to vacate and restore possession of
the Subject Lot to the Spouses Valdez.[22] The Spouses Valdez xxx the DAR is vested with the primary jurisdiction to
prayed that the Spouses Atuel and the Spouses Galdiano be determine and adjudicate agrarian reform matters and shall
ordered to vacate and restore possession of the Subject Lot to have the exclusive jurisdiction over all matters involving the
the Spouses Valdez. implementation of the agrarian reform program. The DARAB
has primary, original and appellate jurisdiction to determine
The Spouses Valdez did not allege the existence of and adjudicate all agrarian disputes, cases, controversies,
tenancy relations, if any, between them and the Spouses and matters or incidents involving the implementation of
Atuel and the Spouses Galdiano. In Morta, Sr. v. the Comprehensive Agrarian Reform Program under R.A.
Occidental, [23] this Court ruled: 6657, E.O. Nos. 229, 228 and 129-A, R.A. 3844 as amended by
R.A. 6389, P.D. No. 27 and other agrarian laws and their
It is axiomatic that what determines the nature of an implementing rules and regulations. (Emphasis supplied)
action as well as which court has jurisdiction over it, are the
allegations in the complaint and the character of the relief
sought. Jurisdiction over the subject matter is determined Under Section 3(d) of Republic Act No. 6657, otherwise
upon the allegations made in the complaint. known as the CARP Law, an agrarian dispute is defined as
follows:
In the instant case, the allegations in the complaint,
which are contained in the decision of the MARO,[24] indicate (d) xxx any controversy relating to tenurial arrangements,
that the nature and subject matter of the instant case is for whether leasehold, tenancy, stewardship or otherwise, over
recovery of possession or accion publiciana. The issue to be lands devoted to agriculture, including disputes concerning
resolved is who between the Spouses Valdez on one hand, and farmworkers' associations or representation of persons in
the Spouses Atuel and the Spouses Galdiano on the other, negotiating, fixing, maintaining, changing, or seeking to
have a better right to possession of the 2,000-square meter arrange terms or conditions of such tenurial arrangements.
Subject Lot forming part of the PD 27 Land. The Spouses Atuel
and the Spouses Galdiano likewise raise the issue of It includes any controversy relating to compensation of lands
ownership by insisting that Cab is the real and lawful owner acquired under this Act and other terms and conditions of
of the Subject Lot. In Cruz v. Torres,[25]this Court had occasion

6
transfer of ownership from landowners to farmworkers, agency without jurisdiction is a total nullity.[40] Accordingly,
tenants and other agrarian reform beneficiaries, whether the we rule that the decision of the DARAB in the instant case is
disputants stand in the proximate relation of farm operator null and void. Consequently, the decision of the Court of
and beneficiary, landowner and tenant, or lessor and lessee. Appeals affirming the decision of the DARAB is likewise
invalid. This Court finds no compelling reason to rule on the
In the instant case, the Spouses Atuel and the Spouses other issues raised by the Spouses Atuel and the Spouses
Galdiano are not and do not claim to be the owners of the Galdiano.
2,000-square meter Subject Lot where their houses are WHEREFORE, the petition is GRANTED. The Decision of
constructed. They also do not claim ownership to any other the Court of Appeals dated 20 May 1999 and the Resolution
portion of the PD 27 Land. They and the Spouses Valdez dated 14 July 1999 in CA-G.R. SP No. 48682 are REVERSED
have no tenurial, leasehold, or any agrarian and SET ASIDE. The MAROs Decision dated 4 March 1993, and
relations whatsoever that will bring this controversy within the DARABs Decision dated 17 June 1998, are declared NULL
Section 3(d) of RA No. 6657.[31] The instant case is similar and VOID for lack of jurisdiction. No costs.
to Chico v. CA,[32] where this Court ruled that the DARAB had
no jurisdiction over a case which did not involve any tenurial SO ORDERED.
or agrarian relations between the parties. Since the DARAB
has no jurisdiction over the present controversy, it should not RUBY SHELTER BUILDERS G.R. No. 175914
have taken cognizance of the Spouses Valdezs complaint for AND REALTY DEVELOPMENT
recovery of possession. Jurisdiction over an accion CORPORATION,
publiciana is vested in a court of general Petitioner,
jurisdiction. Specifically, the regional trial court exercises
[33]

exclusive original jurisdiction in all civil actions which involve February 10, 2009
x x x possession of real property. However, if the assessed
[34] - versus-
value of the real property involved does not
exceed P50,000.00 in Metro Manila, and P20,000.00 outside of
Metro Manila, the municipal trial court exercises jurisdiction HON. PABLO C. FORMARAN
over actions to recover possession of real III, Presiding Judge of
property. Moreover, the municipal trial court exercises Regional Trial Court Branch
[35]

jurisdiction over all cases of forcible entry and unlawful 21, Naga City, as Pairing
detainer. Judge for Regional Trial
Court Branch 22, Formerly
The Court of Appeals correctly stated that the DARAB Presided By HON. NOVELITA
has exclusive original jurisdiction over cases involving the VILLEGAS-LLAGUNO (Retired
issuance, correction and cancellation of registered 01 May 2006), ROMEO Y.
emancipation patents. However, the Spouses Valdezs TAN, ROBERTO L. OBIEDO
complaint for recovery of possession does not involve or seek and ATTY. TOMAS A. REYES,
the cancellation of any emancipation patent. It was the Respondents.
Spouses Atuel and the Spouses Galdiano who attacked the x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
validity of the emancipation patent as part of their affirmative - - - -x
defenses in their answer to the complaint. The rule is well
settled that the jurisdiction of the court (or agency in this
case) cannot be made to depend on the defenses made by
the defendant in his answer or motion to dismiss. If such Before this Court is a Petition for Review on Certiorari under
were the rule, the question of jurisdiction would depend Rule 45 of the Rules of Court seeking the reversal of the
almost entirely on the defendant.[36] Decision[1] dated 22 November 2006 of the Court of Appeals
in CA-G.R. SP No. 94800.The Court of Appeals, in its assailed
Jurisdiction over the subject matter cannot be acquired Decision, affirmed the Order[2]dated 24 March 2006 of the
through, or waived by, any act or omission of the Regional Trial Court (RTC), Branch 22, of Naga City, in Civil
parties.[37] The active participation of the parties in the Case No. RTC-2006-0030, ordering petitioner Ruby Shelter
proceedings before the DARAB does not vest jurisdiction on Builders and Realty Development Corporation to pay
the DARAB, as jurisdiction is conferred only by law. The additional docket/filing fees, computed based on Section 7(a)
courts or the parties cannot disregard the rule of non-waiver of Rule 141 of the Rules of Court, as amended.
of jurisdiction. Likewise, estoppel does not apply to confer
jurisdiction to a tribunal that has none over a cause of The present Petition arose from the following facts:
action.[38] The failure of the parties to challenge the
jurisdiction of the DARAB does not prevent this Court from Petitioner obtained a loan[3] in the total amount
addressing the issue, as the DARABs lack of jurisdiction is of P95,700,620.00 from respondents Romeo Y. Tan (Tan) and
apparent on the face of the complaint. Issues of jurisdiction Roberto L. Obiedo (Obiedo), secured by real estate mortgages
are not subject to the whims of the parties.[39] over five parcels of land, all located in Triangulo, Naga City,
In a long line of decisions, this Court has consistently covered by Transfer Certificates of Title (TCTs) No.
held that an order or decision rendered by a tribunal or 38376,[4] No. 29918,[5] No. 38374,[6]No. 39232,[7] and No.

7
39225,[8] issued by the Registry of Deeds for Naga City, in the
inclusive of costs and attorneys fees. Petitioner would
name of petitioner. When petitioner was unable to pay the likewise pay respondents Tan and Obiedo the condoned
loan when it became due and demandable, respondents Tan interests, surcharges and penalties.[10] Finally, should a
and Obiedo agreed to an extension of the same. contest arise from the Memorandum of Agreement, Mr. Ruben
Sia (Sia), President of petitioner corporation, personally
In a Memorandum of Agreement[9] dated 17 March assumes, jointly and severally with petitioner, the latters
2005, respondents Tan and Obiedo granted petitioner until 31 monetary obligation to respondent Tan and Obiedo.
December 2005 to settle its indebtedness, and condoned the
interests, penalties and surcharges accruing thereon from 1 Respondent Atty. Tomas A. Reyes (Reyes) was the Notary
October 2004 to 31 December 2005 which amounted Public who notarized the Memorandum of Agreement
to P74,678,647.00. The Memorandum of Agreement required, dated 17 March 2005between respondent Tan and Obiedo, on
in turn, that petitioner execute simultaneously with the said one hand, and petitioner, on the other.
Memorandum, by way of dacion en pago, Deeds of Absolute
Sale in favor of respondents Tan and Obiedo, covering the Pursuant to the Memorandum of Agreement,
same parcels of land subject of the mortgages. The Deeds of petitioner, represented by Mr. Sia, executed separate Deeds of
Absolute Sale would be uniformly dated 2 January 2006, and Absolute Sale,[11]over the five parcels of land, in favor of
state that petitioner sold to respondents Tan and Obiedo the respondents Tan and Obiedo.On the blank spaces provided for
parcels of land for the following purchase prices: in the said Deeds, somebody wrote the 3rd of January 2006 as
the date of their execution. The Deeds were again notarized
TCT No. Purchase Price by respondent Atty. Reyes also on 3 January 2006.

38376 P 9,340,000.00 Without payment having been made by petitioner

29918 P 28,000,000.00 on 31 December 2005, respondents Tan and Obiedo
38374 P 12,000,000.00 presented the Deeds of Absolute Sale dated 3 January
39232 P 1,600,000.00 2006 before the Register of Deeds of Naga City on 8 March
39225 P 1,600,000.00 2006, as a result of which, they were able to secure TCTs over
the five parcels of land in their names.
Petitioner could choose to pay off its indebtedness
with individual or all five parcels of land; or it could redeem On 16 March 2006, petitioner filed before the RTC a
said properties by paying respondents Tan and Obiedo the Complaint[12] against respondents Tan, Obiedo, and Atty.
following prices for the same, inclusive of interest and Reyes, for declaration of nullity of deeds of sales and damages,
penalties: with prayer for the issuance of a writ of preliminary
injunction and/or temporary restraining order (TRO). The
TCT No. Redemption Price Complaint was docketed as Civil Case No. 2006-0030.

38376 P 25,328,939.00 On the basis of the facts already recounted above,

29918 P 35,660,800.00 petitioner raised two causes of action in its Complaint.
38374 P 28,477,600.00
39232 P 6,233,381.00 As for the first cause of action, petitioner alleged that
39225 P 6,233,381.00 as early as 27 December 2005, its President already wrote a
letter informing respondents Tan and Obiedo of the intention
of petitioner to pay its loan and requesting a meeting to
In the event that petitioner is able to redeem any of compute the final amount due. The parties held meetings on 3
the afore-mentioned parcels of land, the Deed of Absolute Sale and 4 January 2006 but they failed to arrive at a mutually
covering the said property shall be nullified and have no force acceptable computation of the final amount of loan
and effect; and respondents Tan and Obiedo shall then return payable. Respondents Tan and Obiedo then refused the
the owners duplicate of the corresponding TCT to petitioner request of petitioner for further dialogues. Unbeknownst to
and also execute a Deed of Discharge of Mortgage. However, if petitioner, despite the ongoing meetings, respondents Tan
petitioner is unable to redeem the parcels of land within the and Obiedo, in evident bad faith, already had the pre-executed
period agreed upon, respondents Tan and Obiedo could Deeds of Absolute Sale notarized on 3 January 2006 by
already present the Deeds of Absolute Sale covering the same respondent Atty. Reyes. Atty. Reyes, in connivance with
to the Office of the Register of Deeds for Naga City so respondents Tan and Obiedo, falsely made it appear in the
respondents Tan and Obiedo could acquire TCTs to the said Deeds of Absolute Sale that Mr. Sia had personally
properties in their names. acknowledged/ratified the said Deeds before Atty. Reyes.

The Memorandum of Agreement further provided Asserting that the Deeds of Absolute Sale over the
that should petitioner contest, judicially or otherwise, any act, five parcels of land were executed merely as security for the
transaction, or event related to or necessarily connected with payment of its loan to respondents Tan and Obiedo; that the
the said Memorandum and the Deeds of Absolute Sale Deeds of Absolute Sale, executed in accordance with the
involving the five parcels of land, it would pay respondents Memorandum of Agreement, constituted pactum
Tan and Obiedo P10,000,000.00 as liquidated damages commisorium and as such, were null and void; and that the

8
acknowledgment in the Deeds of Absolute Sale were falsified, (c) After notice and hearing, that a
petitioner averred: writ of preliminary injunction be issued
imposing the same restraints indicated in the
13. That by reason of the fraudulent next preceding two paragraphs of this
actions by the [herein respondents], [herein prayer; and
petitioner] is prejudiced and is now in
danger of being deprived, physically and (d) After trial, judgment be
legally, of the mortgaged properties without rendered:
benefit of legal processes such as the remedy
of foreclosure and its attendant procedures, 1. Making the injunction
solemnities and remedies available to a permanent;
mortgagor, while [petitioner] is desirous and
willing to pay its obligation and have the 2. Declaring the provision in the
mortgaged properties released.[13] Memorandum of Agreement requiring the
[petitioner] to execute deed of sales (sic) in
favor of the [respondents Tan and Obiedo]
In support of its second cause of action, petitioner as dacion en pago in the event of non-
narrated in its Complaint that on 18 January 2006, payment of the debt as pactum
respondents Tan and Obiedo forcibly took over, with the use commissorium;
of armed men, possession of the five parcels of land subject of
the falsified Deeds of Absolute Sale and fenced the said 3. Annulling the Deed[s]
properties with barbed wire. Beginning 3 March 2006, of Sale for TCT Nos. 29918, 38374, 38376,
respondents Tan and Obiedo started demolishing some of the 39225 and 39232, all dated January 3, 2006,
commercial spaces standing on the parcels of land in question the same being in contravention of law;
which were being rented out by petitioner. Respondents Tan
and Obiedo were also about to tear down a principal 4. Ordering the [respondents]
improvement on the properties consisting of a steel-and- jointly and solidarily to pay the [petitioner]
concrete structure housing a motor vehicle terminal operated actual damages of at least P300,000.00;
by petitioner. The actions of respondents Tan and Obiedo attorneys fees in the amount of P100,000.00
were to the damage and prejudice of petitioner and its plus P1,000.00 per court attendance of
tenants/lessees. Petitioner, alone, claimed to have suffered at counsel as appearance fee; litigation
least P300,000.00 in actual damages by reason of the physical expenses in the amount of at
invasion by respondents Tan and Obiedo and their armed least P10,000.00 and exemplary damages in
goons of the five parcels of land. the amount of P300,000.00, plus the costs.

Ultimately, petitioners prayer in its Complaint reads: [Petitioner] further prays for such
other reliefs as may be proper, just and
WHEREFORE, premises considered, equitable under the premises.[14]
it is most respectfully prayed of this
Honorable Court that upon the filing of this
complaint, a 72-hour temporary restraining Upon filing its Complaint with the RTC on 16 March 2006,
order be forthwith issued ex parte: petitioner paid the sum of P13,644.25 for docket and other
legal fees, as assessed by the Office of the Clerk of Court. The
(a) Restraining [herein respondents] Clerk of Court initially considered Civil Case No. 2006-0030 as
Tan and Obiedo, their agents, privies or an action incapable of pecuniary estimation and computed the
representatives, from committing act/s docket and other legal fees due thereon according to Section
tending to alienate the mortgaged properties 7(b)(1), Rule 141 of the Rules of Court.
from the [herein petitioner] pending the
resolution of the case, including but not Only respondent Tan filed an Answer[15] to the
limited to the acts complained of in Complaint of petitioner. Respondent Tan did admit that
paragraph 14, above; meetings were held with Mr. Sia, as the representative of
petitioner, to thresh out Mr. Sias charge that the computation
(b) Restraining the Register of Deeds by respondents Tan and Obiedo of the interests, surcharges
of Naga City from entertaining moves by the and penalties accruing on the loan of petitioner was replete
[respondents] to have [petitioners] with errors and uncertainties. However, Mr. Sia failed to back
certificates of title to the mortgaged up his accusation of errors and uncertainties and to present
properties cancelled and changed/registered his own final computation of the amount due. Disappointed
in [respondents] Tans and Obiedos names, and exasperated, respondents Tan and Obiedo informed Mr.
and/or released to them; Sia that they had already asked respondent Atty. Reyes to
come over to notarize the Deeds of Absolute Sale. Respondent
Atty. Reyes asked Mr. Sia whether it was his signature

9
appearing above his printed name on the Deeds of Absolute Annexes G to L be nullified. Other relief and
Sale, to which Mr. Sia replied yes. On 4 January 2006, Mr. Sia remedies as are just and equitable under the
still failed to establish his claim of errors and uncertainties in premises are hereby prayed for.[16]
the computation of the total amount which petitioner must
pay respondent Tan and Obiedo. Mr. Sia, instead, sought a
nine-month extension for paying the loan obligation of Thereafter, respondent Tan filed before the RTC an
petitioner and the reduction of the interest rate thereon to Omnibus Motion in which he contended that Civil Case No.
only one percent (1%) per month. Respondents Tan and 2006-0030 involved real properties, the docket fees for which
Obiedo rejected both demands. should be computed in accordance with Section 7(a), not
Section 7(b)(1), of Rule 141 of the Rules of Court, as amended
Respondent Tan maintained that the Deeds of by A.M. No. 04-2-04-SC which took effect on 16 August
Absolute Sale were not executed merely as securities for the 2004. Since petitioner did not pay the appropriate docket fees
loan of petitioner. The Deeds of Absolute Sale over the five for Civil Case No. 2006-0030, the RTC did not acquire
parcels of land were the consideration for the payment of the jurisdiction over the said case. Hence, respondent Tan asked
total indebtedness of petitioner to respondents Tan and the RTC to issue an order requiring petitioner to pay the
Obiedo, and the condonation of the 15-month interest which correct and accurate docket fees pursuant to Section 7(a),
already accrued on the loan, while providing petitioner with Rule 141 of the Rules of Court, as amended; and should
the golden opportunity to still redeem all or even portions of petitioner fail to do so, to deny and dismiss the prayer of
the properties covered by said Deeds. Unfortunately, petitioner for the annulment of the Deeds of Absolute Sale for
petitioner failed to exercise its right to redeem any of the said having been executed in contravention of the law or of the
properties. Memorandum of Agreement as pactum commisorium.

Belying that they forcibly took possession of the five As required by the RTC, the parties submitted their
parcels of land, respondent Tan alleged that it was Mr. Sia Position Papers on the matter. On 24 March 2006, the RTC
who, with the aid of armed men, on board a Sports Utility issued an Order[17]granting respondent Tans Omnibus
Vehicle and a truck, rammed into the personnel of Motion. In holding that both petitioner and respondent Tan
respondents Tan and Obiedo causing melee and must pay docket fees in accordance with Section 7(a), Rule
disturbance. Moreover, by the execution of the Deeds of 141 of the Rules of Court, as amended, the RTC reasoned:
Absolute Sale, the properties subject thereof were, ipso jure,
delivered to respondents Tan and Obiedo. The demolition of It must be noted that
the existing structures on the properties was nothing but an under paragraph (b) 2. of the said Section
exercise of dominion by respondents Tan and Obiedo. 7, it is provided that QUIETING OF TITLE
which is an action classified as beyond
Respondent Tan, thus, sought not just the dismissal of pecuniary estimation shall be governed by
the Complaint of petitioner, but also the grant of his paragraph (a). Hence, the filing fee in an
counterclaim. The prayer in his Answer is faithfully action for Declaration of Nullity of Deed
reproduced below: which is also classified as beyond pecuniary
estimation, must be computed based on the
Wherefore, premises considered, it provision of Section 7(A) herein-above, in
is most respectfully prayed that, after due part, quoted.
hearing, judgment be rendered dismissing
the complaint, and on the counterclaim, Since [herein respondent], Romeo
[herein petitioner] and Ruben Sia, be Tan in his Answer has a counterclaim against
ordered to indemnify, jointly and severally the plaintiff, the former must likewise pay
[herein respondents Tan and Obiedo] the the necessary filling (sic) fees as provided for
amounts of not less than P10,000,000.00 as under Section 7 (A) of Amended
liquidated damages and the further sum of Administrative Circular No. 35-2004 issued
not less than P500,000.00 as attorneys by the Supreme Court.[18]
fees. In the alternative, and should it become
necessary, it is hereby prayed that
[petitioner] be ordered to pay herein Consequently, the RTC decreed on the matter of
[respondents Tan and Obiedo] the entire docket/filing fees:
principal loan of P95,700,620.00, plus
interests, surcharges and penalties computed WHEREFORE, premises considered,
from March 17, 2005 until the entire sum is the [herein petitioner] is hereby ordered to
fully paid, including the amount pay additional filing fee and the [herein
of P74,678,647.00 foregone interest covering respondent], Romeo Tan is also ordered to
the period from October 1, 2004 to pay docket and filing fees on his
December 31, 2005 or for a total of fifteen counterclaim, both computed based on
(15) months, plus incidental expenses as Section 7(a) of the Supreme Court Amended
may be proved in court, in the event that Administrative Circular No. 35-2004 within

10
 fifteen (15) days from receipt of this Order to additional docket fees petitioner must pay for in Civil Case No.
the Clerk of Court, Regional Trial Court, Naga 2006-0030 as directed in the afore-mentioned RTC
City and for the latter to compute and to Orders. Per the computation of the RTC Clerk of Court, after
collect the said fees accordingly.[19] excluding the amount petitioner previously paid on 16 March
2006, petitioner must still pay the amount of P720,392.60 as
docket fees.[23]
Petitioner moved[20] for the partial reconsideration of
the 24 March 2006 Order of the RTC, arguing that Civil Case Petitioner, however, had not yet conceded, and it filed
No. 2006-0030 was principally for the annulment of the a Petition for Certiorari with the Court of Appeals; the petition
Deeds of Absolute Sale and, as such, incapable of pecuniary was docketed as CA-G.R. SP No. 94800. According to
estimation. Petitioner submitted that the RTC erred in petitioner, the RTC[24] acted with grave abuse of discretion,
applying Section 7(a), Rule 141 of the Rules of Court, as amounting to lack or excess of jurisdiction, when it issued its
amended, to petitioners first cause of action in its Complaint Orders dated 24 March 2006 and 29 March 2006 mandating
in Civil Case No. 2006-0030. that the docket/filing fees for Civil Case No. 2006-0030, an
action for annulment of deeds of sale, be assessed under
In its Order[21] dated 29 March 2006, the RTC refused Section 7(a), Rule 141 of the Rules of Court, as amended. If the
to reconsider its 24 March 2006 Order, based on the following Orders would not be revoked, corrected, or rectified,
ratiocination: petitioner would suffer grave injustice and irreparable
damage.
Analyzing, the action herein pertains to real
property, for as admitted by the [herein petitioner], On 22 November 2006, the Court of Appeals
the deeds of sale in question pertain to real property promulgated its Decision wherein it held that:
x x x. The Deeds of Sale subject of the instant case
have already been transferred in the name of the Clearly, the petitioners complaint involves
[herein respondents Tan and Obiedo]. not only the annulment of the deeds of sale, but also
the recovery of the real properties identified in the
Compared with Quieting of Title, the latter said documents. In other words, the objectives of the
action is brought when there is cloud on the title to petitioner in filing the complaint were to cancel the
real property or any interest therein or to prevent a deeds of sale and ultimately, to recover possession of
cloud from being cast upon title to the real the same. It is therefore a real action.
property (Art. 476, Civil Code of the
Philippines) and the plaintiff must have legal or Consequently, the additional docket fees that
equitable title to or interest in the real property must be paid cannot be assessed in accordance with
which is the subject matter of the action (Art. 447, Section 7(b). As a real action, Section 7(a) must be
ibid.), and yet plaintiff in QUIETING OF TITLE is applied in the assessment and payment of the proper
required to pay the fees in accordance with docket fee.
paragraph (a) of Section 7 of the said Amended
Administrative Circular No. 35-2004, hence, with Resultantly, there is no grave abuse of
more reason that the [petitioner] who no longer has discretion amounting to lack or excess of jurisdiction
title to the real properties subject of the instant case on the part of the court a quo. By grave abuse of
must be required to pay the required fees in discretion is meant capricious and whimsical exercise
accordance with Section 7(a) of the Amended of judgment as is equivalent to lack of jurisdiction,
Administrative Circular No. 35-2004 afore- and mere abuse of discretion is not enough it must be
mentioned. grave. The abuse must be grave and patent, and it
must be shown that the discretion was exercised
Furthermore, while [petitioner] claims that arbitrarily and despotically.
the action for declaration of nullity of deed of sale and
memorandum of agreement is one incapable of Such a situation does not exist in this
pecuniary estimation, however, as argued by the particular case. The evidence is insufficient to prove
[respondent Tan], the issue as to how much filing and that the court a quo acted despotically in rendering
docket fees should be paid was never raised as an the assailed orders. It acted properly and in
issue in the case of Russell vs. Vestil, 304 SCRA 738. accordance with law. Hence, error cannot be
attributed to it.[25]
xxxx

WHEREFORE, the Motion for Partial Hence, the fallo of the Decision of the appellate court
Reconsideration is hereby DENIED.[22] reads:

WHEREFORE, the petition for

In a letter dated 19 April 2006, the RTC Clerk of Court certiorari is DENIED. The assailed Orders of
computed, upon the request of counsel for the petitioner, the the court a quo are AFFIRMED.[26]

11
 pleading, or if specified the same has been
left for determination by the court, the
Without seeking reconsideration of the foregoing additional filing fee therefor shall constitute
Decision with the Court of Appeals, petitioner filed its Petition a lien on the judgment. It shall be the
for Review on Certiorari before this Court, with a lone responsibility of the Clerk of Court or his
assignment of error, to wit: duly authorized deputy to enforce said lien
and assess and collect the additional fee.
18. The herein petitioner most
respectfully submits that the Court of
Appeals committed a grave and serious In the Petition at bar, the RTC found, and the Court of
reversible error in affirming the assailed Appeals affirmed, that petitioner did not pay the correct
Orders of the Regional Trial Court which amount of docket fees for Civil Case No. 2006-0030. According
are clearly contrary to the to both the trial and appellate courts, petitioner should pay
pronouncement of this Honorable Court docket fees in accordance with Section 7(a), Rule 141 of the
in the case of Spouses De Leon v. Court of Rules of Court, as amended. Consistent with the liberal tenor
Appeals, G.R. No. 104796, March 6, 1998, of Sun Insurance, the RTC, instead of dismissing outright
not to mention the fact that if the said petitioners Complaint in Civil Case No. 2006-0030, granted
judgment is allowed to stand and not petitioner time to pay the additional docket fees. Despite the
rectified, the same would result in grave seeming munificence of the RTC, petitioner refused to pay the
injustice and irreparable damage to herein additional docket fees assessed against it, believing that it had
petitioner in view of the prohibitive amount already paid the correct amount before, pursuant to Section
assessed as a consequence of said Orders.[27] 7(b)(1), Rule 141 of the Rules of Court, as amended.

In Manchester Development Corporation v. Court of Relevant to the present controversy are the following
Appeals,[28] the Court explicitly pronounced that [t]he court provisions under Rule 141 of the Rules of Court, as amended
acquires jurisdiction over any case only upon the payment of by A.M. No. 04-2-04-SC[30] and Supreme Court Amended
the prescribed docket fee. Hence, the payment of docket fees Administrative Circular No. 35-2004[31]:
is not only mandatory, but also jurisdictional.
SEC. 7. Clerks of Regional Trial
In Sun Insurance Office, Ltd. (SIOL) v. Asuncion,[29] the Courts.
Court laid down guidelines for the implementation of its
previous pronouncement in Manchester under particular (a) For filing an action or a
circumstances, to wit: permissive OR COMPULSORY counterclaim,
CROSS-CLAIM, or money claim against an
1. It is not simply the filing of the estate not based on judgment, or for filing a
complaint or appropriate initiatory pleading, third-party, fourth-party, etc. complaint, or a
but the payment of the prescribed docket fee, complaint-in-intervention, if the total sum
that vests a trial court with jurisdiction over claimed, INCLUSIVE OF INTERESTS,
the subject matter or nature of the action. PENALTIES, SURCHARGES, DAMAGES OF
Where the filing of the initiatory pleading is WHATEVER KIND, AND ATTORNEYS
not accompanied by payment of the docket FEES, LITIGATIO NEXPENSES AND COSTS
fee, the court may allow payment of the fee and/or in cases involving property, the FAIR
within a reasonable time but in no case MARKET value of the REAL property in
beyond the applicable prescriptive or litigation STATED IN THE CURRENT TAX
reglementary period. DECLARATION OR CURRENT ZONAL
VALUATION OF THE BUREAU OF INTERNAL
2. The same rule applies to REVENUE, WHICHEVER IS HIGHER, OR IF
permissive counterclaims, third-party claims THERE IS NONE, THE STATED VALUE OF
and similar pleadings, which shall not be THE PROPERTY IN LITIGATION OR THE
considered filed until and unless the filing fee VALUE OF THE PERSONAL PROPERTY IN
prescribed therefor is paid. The court may LITIGATION OR THE VALUE OF THE
also allow payment of said fee within a PERSONAL PROPERTY IN LITIGATION AS
reasonable time but also in no case beyond ALLEGED BY THE CLAIMANT, is:
its applicable prescriptive or reglementary
period. [Table of fees omitted.]

3. Where the trial court acquires If the action involves both a money
jurisdiction over a claim by the filing of the claim and relief pertaining to property, then
appropriate pleading and payment of the THE fees will be charged on both the
prescribed filing fee but, subsequently, the amounts claimed and value of property
judgment awards a claim not specified in the

12
 based on the formula prescribed in this them, by petitioners own admission, to demolish the
paragraph a. improvements thereon.

(b) For filing: It is, thus, suspect that petitioner kept mum about the
afore-mentioned facts and circumstances when they had
1. Actions where the value of the already taken place before it filed its Complaint before the
subject matter cannot be estimated RTC on 16 March 2006.Petitioner never expressed surprise
when such facts and circumstances were established before
2. Special civil actions, except the RTC, nor moved to amend its Complaint accordingly. Even
judicial foreclosure of mortgage, though the Memorandum of Agreement was supposed to have
EXPROPRIATION PROCEEDINGS, long been registered on its TCTs over the five parcels of land,
PARTITION AND QUIETING OF petitioner did not pray for the removal of the same as a cloud
TITLE which will on its title. In the same vein, although petitioner alleged that
respondents Tan and Obiedo forcibly took physical
3. All other actions possession of the subject real properties, petitioner did not
not involving seek the restoration of such possession to itself. And despite
property learning that respondents Tan and Obiedo already secured
TCTs over the subject properties in their names, petitioner
[Table of fees omitted.] did not ask for the cancellation of said titles. The only logical
and reasonable explanation is that petitioner is reluctant to
bring to the attention of the Court certain facts and
The docket fees under Section 7(a), Rule 141, in cases circumstances, keeping its Complaint safely worded, so as to
involving real property depend on the fair market value of the institute only an action for annulment of Deeds of Absolute
same: the higher the value of the real property, the higher the Sale. Petitioner deliberately avoided raising issues on the title
docket fees due. In contrast, Section 7(b)(1), Rule 141 and possession of the real properties that may lead the Court
imposes a fixed or flat rate of docket fees on actions incapable to classify its case as a real action.
of pecuniary estimation.
No matter how fastidiously petitioner attempts to
In order to resolve the issue of whether petitioner conceal them, the allegations and reliefs it sought in its
paid the correct amount of docket fees, it is necessary to Complaint in Civil Case No. 2006-0030 appears to be
determine the true nature of its ultimately a real action, involving as they do the recovery by
Complaint. The dictum adhered to in this jurisdiction is that petitioner of its title to and possession of the five parcels of
the nature of an action is determined by the allegations in the land from respondents Tan and Obiedo.
body of the pleading or Complaint itself, rather than by its
title or heading.[32] However, the Court finds it necessary, in A real action is one in which the plaintiff seeks the
ascertaining the true nature of Civil Case No. 2006-0030, to recovery of real property; or, as indicated in what is now
take into account significant facts and circumstances beyond Section 1, Rule 4 of the Rules of Court, a real action is an
the Complaint of petitioner, facts and circumstances which action affecting title to or recovery of possession of real
petitioner failed to state in its Complaint but were disclosed in property.[33]
the preliminary proceedings before the court a quo.
Section 7, Rule 141 of the Rules of Court, prior to its
Petitioner persistently avers that its Complaint in amendment by A.M. No. 04-2-04-SC, had a specific paragraph
Civil Case No. 2006-0030 is primarily for the annulment of the governing the assessment of the docket fees for real action, to
Deeds of Absolute Sale. Based on the allegations and reliefs in wit:
the Complaint alone, one would get the impression that the
titles to the subject real properties still rest with petitioner; In a real action, the assessed value of
and that the interest of respondents Tan and Obiedo in the the property, or if there is none, the
same lies only in the Deeds of Absolute Sale sought to be estimated value thereof shall be alleged by
annulled. the claimant and shall be the basis in
computing the fees.
What petitioner failed to mention in its Complaint
was that respondents Tan and Obiedo already had the
Memorandum of Agreement, which clearly provided for the It was in accordance with the afore-quoted provision
execution of the Deeds of Absolute Sale, registered on the that the Court, in Gochan v. Gochan,[34] held that although the
TCTs over the five parcels of land, then still in the name of caption of the complaint filed by therein respondents
petitioner. After respondents Tan and Obiedo had the Deeds Mercedes Gochan, et al. with the RTC was denominated as one
of Absolute Sale notarized on 3 January 2006 and presented for specific performance and damages, the relief sought was
the same to Register of Deeds for Naga City on 8 March 2006, the conveyance or transfer of real property, or ultimately, the
they were already issued TCTs over the real properties in execution of deeds of conveyance in their favor of the real
question, in their own names. Respondents Tan and Obiedo properties enumerated in the provisional memorandum of
have also acquired possession of the said properties, enabling agreement. Under these circumstances, the case before the

13
RTC was actually a real action, affecting as it did title to or immovable property, the recovery
possession of real property. Consequently, the basis for of which is petitioner's primary
determining the correct docket fees shall be the assessed objective. The prevalent doctrine
value of the property, or the estimated value thereof as is that an action for the
alleged in the complaint. But since Mercedes Gochan failed to annulment or rescission of a sale
allege in their complaint the value of the real properties, the of real property does not operate
Court found that the RTC did not acquire jurisdiction over the to efface the fundamental and
same for non-payment of the correct docket fees. prime objective and nature of the
case, which is to recover said real
Likewise, in Siapno v. Manalo,[35] the Court property. It is a real action.
disregarded the title/denomination of therein plaintiff Unfortunately, and evidently to evade
Manalos amended petition as one for Mandamus with payment of the correct amount of filing fee,
Revocation of Title and Damages; and adjudged the same to respondent Manalo never alleged in the body of his
be a real action, the filing fees for which should have been amended petition, much less in the prayer portion
computed based on the assessed value of the subject property thereof, the assessed value of the subject res, or, if
or, if there was none, the estimated value thereof. The Court there is none, the estimated value thereof, to serve as
expounded in Siapno that: basis for the receiving clerk in computing and
arriving at the proper amount of filing fee due
In his amended petition, respondent Manalo thereon, as required under Section 7 of this Courts en
prayed that NTAs sale of the property in dispute to banc resolution of 04 September 1990 (Re: Proposed
Standford East Realty Corporation and the title issued Amendments to Rule 141 on Legal Fees).
to the latter on the basis thereof, be declared null and
void. In a very real sense, albeit the amended petition Even the amended petition, therefore, should
is styled as one for Mandamus with Revocation of have been expunged from the records.
Title and Damages, it is, at bottom, a suit to recover
from Standford the realty in question and to vest in In fine, we rule and so hold that the trial
respondent the ownership and possession thereof. In court never acquired
short, the amended petition is in reality an action jurisdiction over its Civil Case No. Q-95-24791.[36]
in res or a real action. Our pronouncement in Fortune
Motors (Phils.), Inc. vs. Court of Appeals is instructive.
There, we said: It was in Serrano v. Delica,[37] however, that the Court
A prayer for annulment or dealt with a complaint that bore the most similarity to the one
rescission of contract does not at bar. Therein respondent Delica averred that undue
operate to efface the true influence, coercion, and intimidation were exerted upon him
objectives and nature of the by therein petitioners Serrano, et al. to effect transfer of his
action which is to recover real properties. Thus, Delica filed a complaint before the RTC
property. (Inton, et al., v. Quintan, against Serrano, et al., praying that the special power of
81 Phil. 97, 1948) attorney, the affidavit, the new titles issued in the names of
Serrano, et al., and the contracts of sale of the disputed
An action for the properties be cancelled; that Serrano, et al. be ordered to pay
annulment or rescission of a sale Delica, jointly and severally, actual, moral and exemplary
of real property is a real action. damages in the amount of P200,000.00, as well as attorneys
Its prime objective is to recover fee of P200,000.00 and costs of litigation; that a TRO and a
said real property.(Gavieres v. writ of preliminary injunction be issued ordering Serrano, et
Sanchez, 94 Phil. 760, 1954) al.to immediately restore him to his possession of the parcels
of land in question; and that after trial, the writ of injunction
An action to annul a real be made permanent.The Court dismissed Delicas complaint
estate mortgage foreclosure sale is for the following reasons:
no different from an action to annul A careful examination of
a private sale of real property. (Muoz respondents complaint is that it is a real
v. Llamas, 87 Phil. 737, 1950). action. In Paderanga vs. Buissan, we held
that in a real action, the plaintiff seeks the
While it is true that recovery of real property, or, as stated in
petitioner does not directly seek Section 2(a), Rule 4 of the Revised Rules of
the recovery of title or possession Court, a real action is one affecting title to
of the property in question, his real property or for the recovery of
action for annulment of sale and possession of, or for partition or
his claim for damages are closely condemnation of, or foreclosure of a
intertwined with the issue of mortgage on a real property.
ownership of the building which,
under the law, is considered

14
 Obviously, respondents complaint is a
real action involving not only the recovery of 1. Ordering the nullification or
real properties, but likewise the cancellation rescission of the Contract of Conditional Sale
of the titles thereto. (Supplementary Agreement) for having
violated the rights of plaintiffs (private
Considering that respondents respondents) guaranteed to them under
complaint is a real action, the Rule requires Article 886 of the Civil Code and/or violation
that the assessed value of the property, or if of the terms and conditions of the said
there is none, the estimated value thereof contract.
shall be alleged by the claimant and shall be
the basis in computing the fees. 2. Declaring void ab initio the Deed
of Absolute Sale for being absolutely
We note, however, that neither the simulated; and
assessed value nor the estimated value of the
questioned parcels of land were alleged by 3. Ordering defendants (petitioners)
respondent in both his original and amended to pay plaintiffs (private respondents)
complaint. What he stated in his amended attorney's fees in the amount
complaint is that the disputed realties have a of P100,000.00.[41]
BIR zonal valuation of P1,200.00 per square
meter. However, the alleged BIR zonal
valuation is not the kind of valuation required As this Court has previously discussed herein, the
by the Rule. It is the assessed value of the nature of Civil Case No. 2006-0030 instituted by petitioner
realty. Having utterly failed to comply with before the RTC is closer to that of Serrano, rather than
the requirement of the Rule that he shall of Spouses De Leon, hence, calling for the application of the
allege in his complaint the assessed value of ruling of the Court in the former, rather than in the latter.
his real properties in controversy, the correct It is also important to note that, with the
docket fee cannot be computed. As such, his amendments introduced by A.M. No. 04-2-04-SC, which
complaint should not have been accepted by became effective on 16 August 2004, the paragraph in Section
the trial court. We thus rule that it has not 7, Rule 141 of the Rules of Court, pertaining specifically to the
acquired jurisdiction over the present case for basis for computation of docket fees for real actions was
failure of herein respondent to pay the deleted. Instead, Section 7(1) of Rule 141, as amended,
required docket fee. On this ground alone, provides that in cases involving real property, the FAIR
respondents complaint is vulnerable to MARKET value of the REAL property in litigation STATED IN
dismissal.[38] THE CURRENT TAX DECLARATION OR CURRENT ZONAL
VALUATION OF THE BUREAU OF INTERNAL REVENUE,
WHICH IS HIGHER, OR IF THERE IS NONE, THE STATED
Brushing aside the significance of Serrano, petitioner VALUE OF THE PROPERTY IN LITIGATION x x x shall be the
argues that said decision, rendered by the Third Division of basis for the computation of the docket fees. Would such an
the Court, and not by the Court en banc, cannot modify or amendment have an impact on Gochan, Siapno,
reverse the doctrine laid down in Spouses De Leon v. Court of and Serrano? The Court rules in the negative.
Appeals.[39] Petitioner relies heavily on the declaration of this
Court in Spouses De Leon that an action for annulment or A real action indisputably involves real property. The
rescission of a contract of sale of real property is incapable of docket fees for a real action would still be determined in
pecuniary estimation. accordance with the value of the real property involved
therein; the only difference is in what constitutes the
The Court, however, does not perceive a acceptable value. In computing the docket fees for cases
contradiction between Serrano and the Spouses De Leon. The involving real properties, the courts, instead of relying on the
Court calls attention to the following statement in Spouses De assessed or estimated value, would now be using the fair
Leon: A review of the jurisprudence of this Court indicates market value of the real properties (as stated in the Tax
that in determining whether an action is one the subject Declaration or the Zonal Valuation of the Bureau of Internal
matter of which is not capable of pecuniary estimation, this Revenue, whichever is higher) or, in the absence thereof, the
Court has adopted the criterion of first ascertaining the nature stated value of the same.
of the principal action or remedy sought. Necessarily, the
determination must be done on a case-to-case basis, In sum, the Court finds that the true nature of the
depending on the facts and circumstances of each. What action instituted by petitioner against respondents is the
petitioner conveniently ignores is that in Spouses De Leon, the recovery of title to and possession of real property. It is a real
action therein that private respondents instituted before the action necessarily involving real property, the docket fees for
RTC was solely for annulment or rescission of the contract of which must be computed in accordance with Section 7(1),
sale over a real property.[40] There appeared to be no transfer Rule 141 of the Rules of Court, as amended. The Court of
of title or possession to the adverse party. Their complaint Appeals, therefore, did not commit any error in affirming the
simply prayed for:

15
RTC Orders requiring petitioner to pay additional docket fees In view of the foregoing, Appellees Motion for
for its Complaint in Civil Case No. 2006-0030. Reconsideration is GRANTED.The Resolution, dated March 14,
The Court does not give much credence to the 2000, is hereby RECALLED and SET ASIDE and the appeal is
allegation of petitioner that if the judgment of the Court of hereby DISMISSED.[4]
Appeals is allowed to stand and not rectified, it would result
in grave injustice and irreparable injury to petitioner in view The June 22, 2001 Resolution denied reconsideration.
of the prohibitive amount assessed against it. It is a sweeping
assertion which lacks evidentiary support.Undeniably, before
the Court can conclude that the amount of docket fees is
indeed prohibitive for a party, it would have to look into the The Facts
financial capacity of said party. It baffles this Court that herein
petitioner, having the capacity to enter into multi-million
The facts of the case are narrated by the trial court[5] as
transactions, now stalls at paying P720,392.60 additional
follows:
docket fees so it could champion before the courts its rights
over the disputed real properties.Moreover, even though the
Court exempts individuals, as indigent or pauper litigants, [Respondent] is a bonafide student of [petitioner] College
from paying docket fees, it has never extended such an dating back [to] the school year 1988-1989 taking up the
exemption to a corporate entity. degree of Bachelor of Science in Commerce.In the enrollment
period for the second semester held on October 22
WHEREFORE, premises considered, the instant to November 5, 1993, [respondent] was denied re-enrollment,
Petition for Review is hereby DENIED. The Decision, dated 22 despite repeated pleas by x x xhimself and by other interested
November 2006, of the Court of Appeals in CA-G.R. SP No. parties and his lawyer.
94800, which affirmed the Orders dated 24 March
2006 and 29 March 2006 of the RTC, Branch 22, of Naga City, On November 16, 1993, he filed his complaint and asked for
in Civil Case No. RTC-2006-0030, ordering petitioner Ruby the issuance of a writ of preliminary mandatory injunction to
Shelter Builders and Realty Development Corporation to pay compel [petitioner college to] re-admit him. On December 28,
additional docket/filing fees, computed based on Section 7(a), 1993, an Order was issued directing [petitioner college] to
Rule 141 of the Rules of Court, as amended, is admit [respondent] for the second semester but still
hereby AFFIRMED.Costs against the petitioner. [petitioner college] refused to re-admit [respondent], despite
implementation of said order and the pleas of [respondent]
SO ORDERED. thru his counsel so that he could catch up with the bulk of the
school days of the semester and could graduate.

Because of the adamant refusal of [respondent] school in re-

admitting him and his defiance to the order and because the
[G.R. No. 149227. December 11, 2003] period of the second semester [was] already about to close,
[respondent] amended his complaint and concentrate[d] on
damages, hence, this case.

LA SALETTE COLLEGE, Represented by Its President, FR. On the other hand, the [petitioner college] alleged that it
ROMEO GONZALES, MS; and JESUS T. BAYAUA, opened its enrollment period for the second semester of
Dean of Student Services, petitioners, vs. VICTOR school year 1993-1994 on 11 October 1993 up to22 October,
C. PILOTIN, respondent. 1993 to 05 November, 1993. However, classes for the second
semester of that school year commenced on 25 October,
An appeal is not perfected by the mere filing of a Notice
1993. During these periods for enrolment, [respondent] never
of Appeal that has been served on the adverse party. The
enrolled with the x x x College and neither did he accomplish
docket fees must likewise be paid within
the basic requirements for enrolment. However, on 05
the reglementary period. Petitioners have failed to show why
November, 1993, the x x x College was in receipt of a letter
they merit an exception to these stringent rules.
from Atty. Quirino L. Pilotindated on that same date
requesting for a reconsideration of an alleged decision
denying enrolment to the [respondent]. Upon receipt of the
The Case said letter, it was endorsed to [Respondent] Bayaua who in
turn wrote Atty. Pilotin explaining among others that was not
denied enrolment but rather [the] latter did not enroll with
Before us is a Petition for Review[1] under Rule 45 of the the said College. Considering, however, that the x x x College
Rules of Court, seeking to set aside the November 16, started its regular classes on 25 October, 1993, in the event
2000[2] and the June 22, 2001 Resolutions[3] of the Court of [respondent] was able to enroll on 6 November, 1993, he
Appeals (CA) in CA-GR CV UDK No. 0236C. The November 16, would have then exceeded the required absences for his
2000 Resolution disposed as follows: supposed enrolled subjects.

16
Since plaintiff failed to enrol on the last day for enrolment, The Petition has no merit.
there is no reason why the x x x College should relax its rules
to accommodate [respondent]. The x x xCollege merely
imposed its disciplining authority when it sets dates for the
Sole Issue:
period to enrol and the matter of admission of students is
within the ambit of academic freedom and beyond the
province of the Courts to decide.[6]
Timeliness of Payment of
On November 17, 1998, the trial court rendered Appellate Court Docket Fees
judgment in favor of respondent.[7] Petitioners received the
Decision on November 26, 1998. On the same date, they filed
The payment of docket fees is not a trivial matter. These
a Notice of Appeal, which the RTC approved on December 2,
fees are necessary to defray court expenses in the handling of
1998.
cases.[15] For this reason, and to secure a just and speedy
Respondent moved for a reconsideration thereof on the disposition of every action and proceeding,[16] the Rules on
ground of petitioners failure to pay the docket fees within Civil Procedure[17] mandates the payment of docket and other
the reglementary period.The trial court, however, denied the lawful fees within the prescribed period. Otherwise, the
Motion in its April 23, 1999 Order.[8] jurisdiction of the proper court to handle a case is adversely
affected.[18]
The above rule applies squarely to this case, in which the
Ruling of the Court of Appeals judgment issued by the RTC, in the exercise of its original
jurisdiction, was elevated to the CA for review. Rule 41 of the
Rules on Civil Procedure provides the essential requirements
In its November 29, 1999 Resolution, the CA dismissed for making such an appeal, as follows:
the appeal of petitioners for their failure to pay the required
docketing fee within the period for filing an appeal. [9] But,
SEC. 2. Modes of appeal.
upon their motion, the CA granted, in a Resolution
dated March 14, 2000, reconsideration of their appeal, which
it reinstated in the interest of substantial justice and (a) Ordinary appeal. The appeal to the Court of Appeals in
considering that [petitioners] already paid the docket cases decided by the Regional Trial Court in the exercise of its
fees.[10] Respondent moved for a reconsideration on March 29, original jurisdiction shall be taken by filing a notice of appeal
2000. with the court which rendered the judgment or final order
appealed from and serving a copy thereof upon the adverse
After reexamining the records of the case, the CA, in the party. x x x.
challenged November 16, 2000 Resolution, dismissed the
appeal filed by petitioners, because the docket fees were only xxxxxxxxx
paid after one (1) year and eleven (11) months from the filing
of the notice of appeal.[11] It deemed it imperative to reverse SEC. 3. Period of ordinary appeal. The appeal shall be taken
the March 14, 2000 Resolution to conform with the law and
within fifteen (15) days from notice of the judgment or final
long settled jurisprudence[12] on the matter. Thus, in the June order appealed from. x x x.
22, 2001Resolution, it denied their Motion for
Reconsideration.
SEC. 4. Appellate court docket and other lawful fees. Within the
Hence, this Petition.[13] period for taking an appeal, the appellant shall pay to the
clerk of court which rendered the judgment or final order
Issues appealed from, the full amount of the appellate court docket
Petitioners submit the following issues for our and other lawful fees. Proof of payment of said fees shall be
consideration: transmitted to the appellate court together with the original
record or the record on appeal.
1. Whether or not the appeal was seasonably filed;
SEC. 9. Perfection of appeal; effect thereof. A partys appeal by
2. With all due respect, the Court of Appeals did not notice of appeal is deemed perfected as to him upon the filing
have the authority to dismiss the appeal.[14] of the notice of appeal in due time.

In the main, the case revolves around the timeliness of x x x x x x x x x.

the payment of the docket fees.
In appeals by notice of appeal, the court loses jurisdiction
over the case upon the perfection of the appeals filed in due
time and the expiration of the time to appeal of the other
The Courts Ruling parties.

17
 x x x x x x x x x. correct amount of docket fees within the prescribed period,
like fraud, accident, mistake, excusable negligence, or a
Accordingly, in order to perfect an appeal from a similar supervening casualty, without fault on the part of the
decision rendered by the RTC in the exercise of its original appellant.[27]
jurisdiction, the following requirements must be complied
with. First, within 15 days, a notice of appeal must be filed In the present case, petitioners have not shown any
with the court that rendered the judgment or final order satisfactory reason to warrant the relaxation of the Rules. In
sought to be appealed; second, such notice must be served on fact, the manner in which they presented their case before us
the adverse party; and third, within the same 15-day period, leaves too much to be desired. Indeed, we are almost tempted
the full amount of appellate court docket and other legal fees to say that they tried to mislead -- nay, deceive -- this Court as
must be paid to the clerk of the court that rendered the well as the appellate court.
judgment or final order.
The present case calls for the adjudication of whether
It should be noted that full payment of the appellate petitioners paid the docket fees on time. Hence, it is essential
docket fees within the prescribed period is that they specify the exact dates when they filed their notice
mandatory,[19] even jurisdictional,[20] for the perfection of the of appeal and paid the corresponding docket fees. But
appeal. Otherwise, the appellate court would not be able to nowhere in their pleadings did they do so. All they said was
act on the subject matter of the action,[21] and the decision or that the appeal had been seasonably filed.
final order sought to be appealed from would become final
and executory.[22] In accordance with the requisites for the perfection of an
appeal as enumerated earlier, petitioners should have (1)
In the present case, petitioners insist that they filed a notice of appeal with the RTC of Santiago, Isabela,
seasonably paid the docket fees. After resolving thrice the within 15 days from the issuance of the trial court Decision
timeliness of the payment of the docket fees, the CA finally being appealed; (2) paid the docket fees within the same
found that these had been paid one (1) year and 11 days from period; and (3) served the notice to the adverse party.
the filing of their notice of appeal.
True, petitioners filed their Notice of Appeal within the
To recapitulate, on November 26, 1998, petitioners prescribed period, but they paid the docket fees only seven
received the November 17, 1998 RTC Decision. Consequently, (7) months thereafter.They adamantly insisted on page 6 of
they had 15 days to file their Notice of Appeal. They did so their Petition[28] that the appeal was seasonably filed, but later
on November 26, 1998, but failed to pay the docket fees. A said that the the appeal fee was paid immediately after 23
review of the records shows that they paid these only on July April 1999 when the court a quo denied the respondents
8, 1999,[23] or after almost seven (7) months from the motion for reconsideration and approved the appeal.
mandated last day for payment, which was December 11, x x x.With the foregoing therefore, the notice of appeal was
1998. Clearly, the November 17, 1998 RTC Decision, which seasonably filed with the payment of docket fees on time.[29]
petitioners sought to appeal, had long become final
and executory. They admitted, though, that because of the excusable
negligence or mistake of their counsel, the official receipts for
the Notice of Appeal had not been attached. They reasoned
that they had failed to transmit the proof of payment of the
Relaxation of the Rule on docket fees to the CA, because such provision of civil
Nonpayment of Docket Fees procedure was relatively new x x x at that time.[30] At any
event, respondent denies being served such notice.[31]
Notwithstanding the mandatory nature of the Assuming arguendo that the period of appeal was
requirement of payment of appellate docket fees, we also interrupted by respondents motion for reconsideration of
recognize that its strict application is qualified by the the RTCs approval of petitioners notice of appeal, the required
following: first, failure to pay those fees within docket fees for the latter were still not paid on
the reglementary period allows only discretionary, not time. From November 23, 1998, when petitioners filed their
automatic, dismissal; second, such power should be used by Notice of Appeal, until April 23, 1999, when the trial court
the court in conjunction with its exercise of sound discretion approved it with finality, they made no effort to pay those
in accordance with the tenets of justice and fair play, as well fees. It took them more than two (2) months to immediately
as with a great deal of circumspection in consideration of all pay the docket fees after being informed of the April 23, 1999
attendant circumstances.[24] Order denying respondents motion for reconsideration of the
RTC Order approving petitioners Notice of Appeal. This lapse
In Mactan Cebu International Airport Authority of time hardly reflected sincere willingness to abide by the
v. Mangubat,[25] the payment of the docket fees was delayed Rules, especially when respondent had raised the very issue
by six (6) days, but the late payment was accepted, because of nonpayment of docket fees as early as December 28, 1998.
the party showed willingness to abide by the Rules by
immediately paying those fees. Yambao v. Court of On this point, petitioners counsel is reminded of the role
Appeals[26]saw us again relaxing the Rules when we declared that lawyers play in the dispensation of
therein that the appellate court may extend the time for the justice. Bayas v. Sandiganbayan[32] held thus:
payment of the docket fees if appellant is able to show that
there is a justifiable reason for x x x the failure to pay the

18
Lawyers are not merely representatives of the parties but, At around one o’clock in the morning of 27 July 2003, three
first and foremost, officers of the court. As such, one of their hundred twenty-one (321) junior officers and enlisted
duties -- assisting in the speedy and efficient administration of personnel of the Armed Forces of the Philippines (AFP)
justice -- is more significant than that of [the cause of] their entered and took over the premises of the Oakwood Premiere
client, rightly or wrongly. x x x. We stress that candor in all Luxury Apartments (Oakwood) located at the Glorietta
dealings is the very essence of membership in the legal Complex, Ayala Avenue, Makati City. They disarmed the
profession. Lawyers are obliged to observe rules of procedure security guards of said establishment and planted explosives
in good faith, not to misuse them to defeat the ends of in its immediate surroundings.
justice.[33]
The soldiers publicly announced that they went to Oakwood
We stress that the payment of docket fees is not a mere to air their grievances against the administration of President
technicality of law or procedure, but an essential requirement Gloria Macapagal Arroyo (President Arroyo). They declared
for the perfection of an appeal.[34] Without such payment, the their withdrawal of support from the Commander-in-Chief of
appellate court does not acquire jurisdiction over the subject the AFP – President Arroyo – and demanded her resignation
matter of the action, and the decision or final order sought to and that of the members of her cabinet and top officers of
be appealed from becomes final and executory.[35] As laid both the AFP and the Philippine National Police (PNP).
down in Barangay 24 of Legazpi City v. Imperial:[36]
At about one o’clock in the afternoon, President Arroyo issued
The right to appeal is not a natural right or a part of due Proclamation No. 427 declaring the country to be under a
process. It is purely a statutory privilege, and may be "state of rebellion." Consequently, she issued General Order
exercised only in the manner and in accordance with the No. 4 directing the AFP and the PNP to carry out all
provisions of the law. Well-rooted is the principle that reasonable measures, giving due regard to constitutional
perfection of an appeal within the statutory rights, to suppress and quell the "rebellion."
or reglementary period is not only mandatory but also
jurisdictional and failure to do so renders the questioned After a series of negotiations between the soldiers and the
decision final and executory, and deprives the appellate court government negotiators, the former agreed to return to
of jurisdiction to alter the final judgment much less to barracks, thus ending the occupation of Oakwood.
entertain the appeal.[37]
Among those involved in the occupation of Oakwood were
WHEREFORE, the Petition is hereby DENIED and the Cezari Gonzales and Julius Mesa, both enlisted personnel of
assailed Resolutions AFFIRMED. Costs against petitioners. the Philippine Navy. It is in their behalf that the Petition for
Habeas Corpus was filed before the Court of Appeals.
SO ORDERED.

On 2 August 2003, then AFP Chief of Staff Narciso L. Abaya

issued a directive3 to all Major Service Commanders and to
G.R. No. 170924 July 4, 2007 the Chief of the Intelligence Service of the Armed Forces of the
Philippines (ISAFP) regarding the Custody of Military
Personnel Involved in the 27 July 2003 Mutiny. On the
In the matter of the Petition for Habeas Corpus of CEZARI
strength thereof, Gonzales and Mesa were taken into custody
GONZALES and JULIUS MESA
by their Service Commander.
ROBERTO RAFAEL PULIDO, petitioner,
vs.
Gen. EFREN ABU, as Chief of Staff of the Armed Forces of Gonzales and Mesa were not charged before a court martial
the Philippines and all persons acting in his stead and with violation of the Articles of War. They were, however,
under his authority, and GEN. ERNESTO DE LEON, in his among the soldiers charged before Branch 61 of the Regional
capacity as the Flag Officer in Command of the Philippine Trial Court (RTC) of Makati City, with the crime of Coup
Navy, and all persons acting in his stead and under his D’etat as defined under Article 134-A of the Revised Penal
authority, respondents. Code. Said case entitled, "People v. Capt. Milo D. Maestrecampo,
et al." was docketed as Criminal Case No. 03-2784. On 18
November 2003, a Commitment Order was issued by the RTC
Before Us is a Petition for Review under Rule 45 of the Rules
committing custody of the persons of Gonzales and Mesa to
of Court assailing the Decision1 of the Court of Appeals in CA-
the Commanding Officer of Fort San Felipe Naval Base, Cavite
G.R. SP No. 90546 which dismissed the Petition for Habeas
City.4
Corpus filed by petitioner Roberto Rafael Pulido (Pulido) in
behalf of Cezari Gonzales and Julius Mesa, and imposed on
petitioner the penalty of censure, and its Resolution2 dated 6 On 8 December 2003, Gonzales and Mesa were
January 2006 denying his motion for reconsideration. discharged5 from military service.

The facts are not disputed. On 16 December 2003, per order of the RTC, Criminal Case
No. 03-2784 was consolidated with Criminal Case No. 03-
2678 entitled, "People v. Ramon B. Cardenas" pending before

19
Branch 148 of the RTC of Makati City, on the ground that the from the service on 8 December 2003, and since they are not
cases are founded on the same facts and/or formed part of a charged before a court martial, the military authorities have
series of offenses of similar character.6 no jurisdiction to detain them, and there is no legal ground to
detain them further because a court order for their release
In a Manifestation and Motion dated 3 March 2004, had already been issued.
Commodore Normando Naval, Commander of Naval Base
Cavite, asked the Makati RTC, Branch 148, to relieve him of his On 10 August 2005, the Court of Appeals (3rd Division) issued
duty as custodian of Gonzales and Mesa and that the latter be a Writ of Habeas Corpus directing respondents Gen. Efren Abu,
transferred to the Makati City Jail.7 In an Order dated 29 April Chief of Staff of the Armed Forces of the Philippines, and all
2004, the RTC relieved him of his duty but ordered the persons acting in his stead and under his authority, and Gen.
transfer of Gonzales and Mesa from the Naval Base Cavite in Ernesto de Leon, Flag Officer in Command of the Philippine
Sangley Point, Cavite City, to the Philippine Marine Brigade Navy, and all persons acting in his stead and under his
Headquarters, Philippine Marine, Fort Bonifacio, Taguig, authority, to produce the bodies of Gonzales and Mesa before
Metro Manila, under the custody of the Commander of the the Court and to appear and show the cause and validity of
Marine Brigade of the Philippine Marines, Fort Bonifacio, their detention.15
Taguig, Metro Manila.8
On 18 August 2005, a return of the Writ of Habeas Corpus was
In an Order dated 8 July 2004, the RTC resolved the petitions made.16 Respondents prayed that the Petition for Habeas
for bail filed by the accused-soldiers. It admitted Gonzales and Corpus be dismissed primarily on two grounds: (1) the
Mesa, and twenty-five other co-accused to bail pegging the continued detention of Gonzales and Mesa is justified because
amount thereof at P100,000.00 each.9 of the pendency of the Petition for Certiorari questioning the
order dated 8 July 2004 of the RTC granting bail to Gonzales
On 19 July 2004, both Gonzales and Mesa posted bail.10 On 20 and Mesa before the 7th Division of the Court of Appeals,
July 2004, the RTC issued orders directing the Commanding docketed as CA-G.R. SP No. 88440; and (2) petitioner is guilty
Officer of Philippine Marine Corps, Fort Bonifacio, Makati City, of forum shopping because of his failure to state in the
to release Gonzales and Mesa from his custody.11 Despite said petition that the order granting bail has been elevated to the
orders and their service to the marines, Gonzales and Mesa Court of Appeals and pending before its 7 th Division.
were not released.
On 9 September 2005, the Court of Appeals (7th Division)
On 21 July 2004, the People of the Philippines moved for rendered its decision in CA-G.R. SP No. 88440 dismissing the
partial reconsideration12 of the order granting bail. Prior to petition that questioned the propriety of the granting of bail
the resolution of said motion, Jovencito R. Zuño, Chief State to Gonzales, Mesa, and twenty-five of their co-accused.17
Prosecutor, advised Brig. Gen. Manuel F. Llena, Judge
Advocate General, to defer action on the provisional release of On 12 September 2005, the Court of Appeals (3rd Division)
Gonzales and Mesa "until the Motion for Reconsideration shall dismissed the Petition for Habeas Corpus for violation of
have been resolved and attained finality."13 On 26 October Section 5, Rule 7 of the Rules of Court. It ratiocinated:
2004, the RTC denied the motion for partial reconsideration.
A reading of the parties’ submissions reveals a
With the denial of the Motion for Partial Reconsideration, the threshold issue – the charge of forum shopping and
People filed with the Court of Appeals on 4 February 2005 a the related falsity in the certification supporting the
special civil action for certiorari under Rule 65 of the Rules of petition. We must initially resolve these issues
Court with urgent prayer for Temporary Restraining Order because a finding that the petitioner violated Section
(TRO) and/or Writ of Preliminary Injunction, asking for the 5, Rule 7 of the Rules of Court can lead to the outright
nullification and setting aside of the orders dated 8 July 2004 dismissal of the present petition. x x x
and 26 October 2004 of Judge Oscar B. Pimentel for having
been issued without jurisdiction and/or grave abuse of xxxx
discretion amounting to lack or excess of jurisdiction. The
Petition for Certiorari was raffled to the Seventh Division and The records show that the present petition contained
was docketed as CA-G.R. SP No. 88440 entitled, "People of the the following certificate of non-forum shopping:
Philippines v. Hon. Oscar B. Pimentel, Presiding Judge of the
Regional Trial Court of Makati City, Branch 148." The Court of
Appeals (Seventh Division) did not issue a TRO and/or "I, ROBERTO RAFAEL PULIDO, with office address at Unit
preliminary injunction. 1601, 16th Floor 139 Corporate Center Valero Street, Makati
City, after having been duly sworn in accordance with law, do
hereby state that:
Since Gonzales and Mesa continued to be in detention, a
Petition for Habeas Corpus14 was filed by petitioner Pulido on
their behalf on 22 July 2005. The case was docketed as CA- 1. I am the petitioner in the above-captioned case;
G.R. SP No. 90546 and raffled to the Third Division. In support
thereof, it was argued that since Gonzales and Mesa are no
longer subject to Military Law as they had been discharged

20
2. I have read the Petition and caused it to be prepared. All the enforceable and that Gonzales’ and Mesa’s continued
contents thereof are true to my own personal knowledge and detention is illegal because their constitutional rights to bail,
the record; which have received judicial imprimatur, were continuously
being violated by the respondents.
3. I have not heretofore commenced any action or proceeding
involving the same issues, in the Supreme Court, the Court of The petitioner next omitted the fact that after the denial of its
Appeals, or any other tribunal or agency and to the best of my motion for reconsideration of the order granting bail, the
knowledge, no action or proceeding is pending in the People filed the certiorari case before this Court, seeking to
Supreme Court, the Court of Appeals, or any other tribunal or annul the lower court’s order. While we are aware of the rule
agency; except for the related cases of "Eugene Gonzales et al. that – the mere pendency of a petition for certiorari will not
vs. Gen. Narciso Abaya, et al., G.R. No. 164007 and "Humabono prevent the implementation of the assailed order unless the
Adaza et al., vs. Gen. Pedro Cabuay et al., G.R. No. 160792, both court where the petition was filed issues either a temporary
awaiting the resolution of the Supreme Court. restraining order or a writ or preliminary injunction – the filing
of a petition for habeas corpus while the order granting bail is
5. (sic, should be 4) If I should learn of any similar action or being questioned on a petition for certiorari raises issues
proceeding filed or is pending in the Supreme Court, the Court beyond the immediate execution of the lower court’s bail and
of Appeals, or any other tribunal or agency, I undertake to release orders. They raise questions on the propriety of filing
report such fact within five (5) days therefrom to this Court. the habeas corpus petition to seek the release of persons
under detention, at the same time that a petition regarding
The present petition and its accompanying certification their continued detention and release are pending.
likewise show that the petitioner never mentioned the Apparently, the petitioner wanted to avoid these questions,
pendency before the Seventh Division of this Court of the prompting him to actively conceal the subsequent motion for
certiorari case, SP 88440, for the annulment of the lower reconsideration of the bail order and the petition for
court’s order granting the soldiers-accused’s petition for bail, certiorari directly questioning this same order. In short, the
when this same lower court order is cited as basis for the petitioner conveniently omitted in his narration of facts the
immediate release of Gonzales and Mesa in the present material factual antecedents detrimental to his cause; he
petition. All that the certification mentioned were the related chose to narrate only the factual antecedents favorable to
cases pending before the Honorable Supreme Court. Neither his cause.
did the petitioner comply with his undertaking under his
certification to inform this Court within five (5) days of the That the present petition has direct and intimate links with
pendency of any similar action or proceeding filed or is the certiorari case is beyond doubt as they involve two sides
pending in the Supreme Court, the Court of Appeals, or any of the same coin. The certiorari case filed by the People seeks
other tribunal or agency, as in fact the certiorari case was to prevent the release of Gonzales and Mesa by annulling the
already pending with this Court when the present petition lower court’s grant of bail. The present petition, on the other
was filed. The certiorari case was only brought to our hand, was filed in behalf of Gonzales and Mesa to secure their
attention after the respondents filed their Return of the Writ. immediate release because the order granting bail is already
executory. In effect, the petitioner seeks to implement
To be sure, the petitioner, who is also the counsel for the through a petition for habeas corpus the provisional release
accused Gonzales and Mesa in the criminal case before Branch from detention that the lower court has ordered. The question
148 RTC Makati City and who represents Gonzales and Mesa this immediately raises is: can this be done through a petition
as private respondents in CA-G.R. SP No. 88440, cannot feign for habeas corpus when the validity of the grant of bail and
ignorance of the pendency of the certiorari case. Why he the release under bail are live questions before another
deliberately kept the pendency of the certiorari case hidden Division of this Court?
from us, has not been sufficiently explained. We have no
doubt, however, that his deliberate act of withholding We believe and so hold that his cannot and should not be
information on a material fact directly required to be done as this is precisely the reason why the rule against
disclosed by the Rules of Court cannot but have legal forum shopping has been put in place. The remedies sought
consequences. being two sides of the same coin (i.e., the release of Gonzales
and Mesa), they cannot be secured through separately-filed
The primary basis of the present petition is the bail granted to cases where issues of jurisdiction may arise and whose
and posted by Gonzales and Mesa. This is very clear from the rulings may conflict with one another. To be sure, we clearly
petitioner’s argument that "The continued detention of the heard the petitioner say that there can be no conflict because
enlisted personnel constitutes violation of the lawful orders of the effectiveness of our ruling in this petition will depend on
the civilian court." He cited in support of this argument the the nature and tenor of the ruling in the certiorari case; there
grant and the posting of the bail, and the issuance of the is no basis for a release on habeas corpus if this same Court
release orders by the lower court. He did not disclose, will rule in the certiorari case that the grant of bail is
however, what subsequently happened to the order granting improper. For this very same reason, we should not entertain
bail. He deliberately omitted in his narration the fact that the the present petition as the matter before us is already before
People moved to reconsider this order. Thus, he gave the another co-equal body whose ruling will be finally
impression that the order granting bail immediately became determinative of the issue of Gonzales’ and Mesa’s release.

21
The Decision of the Seventh Division of this Court, heretofore A. WHETHER OR NOT THE HONORABLE COURT OF
footnoted, ordering the release on bail of Gonzales and Mesa APPEALS ERRED IN NOT CONSIDERING THE
drives home this point. NATURE OF THE ACTION AND LIMITED ITSELF TO
THE ISSUE OF FORUM SHOPPING.
To be strictly accurate, the issues of detention and immediate
release that are now before the two Divisions of this Court are B. WHETHER OR NOT THE HONORABLE COURT OF
likewise properly within the jurisdiction of the lower court APPEALS ERRED IN IMPOSING UPON PETITIONER
who has original jurisdiction over the criminal case and who THE PENALTY OF CENSURE.
has issued the order granting bail in the exercise of this
jurisdiction. If indeed there is a question relating to the C. WHETHER OR NOT THE HONORABLE COURT OF
immediate release of Gonzales and Mesa pursuant to the APPEALS ERRED IN NOT PASSING UPON THE
lower court’s order pending the determination of the EXISTENCE OR ABSENCE OF VALID GROUNDS TO
certiorari issues, such question should be brought before the DETAIN JULIUS MESA AND CEZARI GONZALES.
lower court as the tribunal that has ordered the release, or
before the Seventh Division of this Court in the exercise of its Petitioner prays that the assailed decision and resolution of
supervisory powers over the lower court. The Decision the Court of Appeals be reversed and set aside, and an order
recently promulgated by the Seventh Division of this Court be issued ordering respondents to immediately release
ordering the release on bail of the soldiers-accused effectively Gonzales and Mesa. He further prays that the censure against
demonstrates this point. him be also reversed and set aside.

The inter-relationships among the criminal case below, the Before respondents could comment on the petition, petitioner
certiorari case and the present petition, as well as among the filed, with leave of court, a Motion to Withdraw the Prayer for
courts where these cases are pending, show beyond doubt the Immediate Release of Julius Mesa and Cezari
that the petitioner committed forum shopping in the strict Gonzales.22 Petitioner informed the Court that the
sense of that term i.e., the attempt by a party, after an adverse Commanding General of the Philippine Marines had ordered
opinion in one forum, to seek a favorable opinion in another the release of Gonzales and Mesa and surrendered their
forum other that through an appeal or certiorari. The persons to the RTC of Makati City, Branch 148. Thus, Mesa
"adverse" aspect for the petitioner, while not an opinion, is no and Gonzales are now enjoying temporary liberty by virtue of
less adverse as he has failed to secure the release of Gonzales the release orders dated 20 July 2004 issued by the RTC.
and Mesa before the lower court and before this Court in the Petitioner asks that the prayer for the immediate release of
certiorari case (as of the time of the filing of the present Gonzales and Mesa be dismissed but asks that the other
petition); thus, he came to us in the present petition. That the prayers in the petition be granted.
Seventh Division of this Court has ordered the release on bail
of the soldiers-accused, thus rendering the present petition
moot and academic after the finality of the 7th Division In its comment, the Solicitor General stressed that the habeas
Decision, plainly demonstrates this legal reality.18 corpus petition has been rendered moot and academic by
reason of the release of Mesa and Gonzales from detention
and, in the absence of an actual case or controversy, it is
The Court further imposed on petitioner the penalty of impractical to consider and resolve issues involving the
censure for the aforesaid violation. The dispositive portion of validity or legality of their detention, including the alleged
the decision reads: refusal of the Court of Appeals to resolve said issues.

WHEREFORE, premises considered, we hereby DISMISS the When the release of the persons in whose behalf the
petition for violation of and pursuant to Section 5 Rule 7 ofapplication for a Writ of Habeas Corpus was filed is effected,
the Rules of Court. The petitioner, Atty. Roberto Rafael Pulido,
the Petition for the issuance of the writ becomes moot and
is hereby CENSURED for these violations. Let a copy of this academic.23 With the release of both Mesa and Gonzales, the
Decision be furnished the Honorable Supreme Court, to be Petition for Habeas Corpus has, indeed, been rendered moot.
attached to the petitioner’s record as a member of the Bar, as
Courts of justice constituted to pass upon substantial rights
a RECORD OF CENSURE that may be referred to and will not consider questions where no actual interests are
considered in any future similar act.19 involved. Thus, the well-settled rule that courts will not
determine a moot question. Where the issues have become
On 5 September 2005, petitioner filed a Motion for moot and academic, there ceases to be any justiciable
Reconsideration20 which the Court of Appeals (Special Former controversy, thus rendering the resolution of the same of no
Third Division) denied in its resolution21 dated 6 January practical value.24 This Court will therefore abstain from
2006. expressing its opinion in a case where no legal relief is needed
or called for.25
Petitioner is now before us raising the following issues:
The only remaining issues to be resolved are: (1) Is petitioner
WHETHER OR NOT THE HONORABLE COURT OF APPEALS guilty of forum shopping? (2) Should petitioner be penalized
ERRED IN DISMISSING THE PETITION FOR HABEAS CORPUS when he failed to inform the 3rd Division of the Court of
ON THE GROUND OF FORUM SHOPPING. Appeals of the pendency of the Petition for Certiorari filed by

22
respondents before the 7th Division of the same court which cases boils down to whether Gonzales and Mesa should be
asked for the annulment of the RTC’s order granting Gonzales released on bail. Because of the presence of the elements
and Mesa’s petition for bail? of litis pendentia -- parties, reliefs and issue are substantially
the same/similar in the two cases; and any decision in
To support his contention that there was no forum shopping, the certiorari case will be binding on the habeas corpus case –
petitioner asserts that the issues in the petitions petitioner is thus guilty of forum shopping.
for certiorari and habeas corpus are not similar/identical. As
to his non-disclosure of respondents’ filing of the motion for For his failure to inform the Court of Appeals of the pendency
reconsideration and the Petition for Certiorari, petitioner of the certiorari case, petitioner clearly violated his obligation
claims that the same has no legal relevance to the Petition to disclose within five days the pendency of the same or a
for Habeas Corpus because at the time he filed said petition, similar action or claim as mandated in Section 5(c), Rule 728 of
the order granting bail subsisted and has not been reversed or the Rules of Court.
modified; and no TRO or injunction has been issued that
would affect the efficacy or validity of the order granting the WHEREFORE, premises considered, the Decision of the Court
bail and the order directing the release of Mesa and Gonzales. of Appeals in CA-G.R. SP No. 90546 dated 12 September 2005
is AFFIRMED. Costs against the petitioner.
For filing a Petition for Habeas Corpus despite the pendency of
the Petition for Certiorari that questioned the validity of the SO ORDERED.
order granting bail, which order is precisely the very basis of
the Petition for Habeas Corpus, petitioner is guilty of forum
shopping.

It has been held that forum shopping is the act of a party THE GOVERNMENT OF G.R. No. 164150
against whom an adverse judgment has been rendered in one THE KINGDOM OF BELGIUM,
forum, of seeking another (and possibly favorable) opinion in represented by the Royal
another forum (other than by appeal or the special civil action Embassy of Belgium,
of certiorari), or the institution of two or more actions or Petitioner, April 14, 2008
proceedings grounded on the same cause on the supposition
that one or the other court would make a favorable - versus -
disposition. Thus, it has been held that there is forum
shopping — (1) when, as a result of an adverse decision in HON. COURT OF APPEALS,
one forum, a party seeks a favorable decision (other than by UNIFIED FIELD CORPORATION,
appeal or certiorari) in another; OR (2) if, after he has filed a MARILYN G. ONG, VICTORIA O.
petition before the Supreme Court, a party files a motion ANG, EDNA C. ALFUERTE, MARK
before the Court of Appeals, since in such a case, he DENNIS O. ANG and ALVIN O.
deliberately splits appeals in the hope that even in one case in ANG,Respondents.
which a particular allowable remedy sought for is dismissed, x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
another case (offering a similar remedy) would still be open; - - - -x
OR (3) where a party attempts to obtain a preliminary
injunction in another court after failing to obtain the same
from the original court.26
This is a Petition for Certiorari under Rule 65[1] of the Rules of
Court assailing the (1) Resolution[2] dated 27 November 2003
The Court has laid down the yardstick to determine whether a
of the Court of Appeals in CA-G.R. CV No. 77701 granting the
party violated the rule against forum shopping, as where the
Motion for Reconsideration filed in said case by herein
elements of litis pendentia are present or where a final
respondent Unified Field Corporation (UFC), thus, allowing
judgment in one case will amount to res judicata in the other.
the latter to file its appellants brief; and (2)
Stated differently, there must be between the two cases: (a)
Resolution[3] dated 5 May 2004 of the appellate court in the
identity of parties; (b) identity of rights asserted and reliefs
same case denying reconsideration of its 27 November 2003
prayed for, the relief being founded on the same facts; and (c)
Resolution sought by herein petitioner Government of the
the identity of the two preceding particulars is such that any
Kingdom of Belgium, represented by the Royal Embassy of
judgment rendered in the other action will, regardless of
Belgium.[4]
which party is successful, amount to res judicata in the action
under consideration.27
The facts of the case are as follows:
As lucidly explained by the Court of Appeals, the ultimate A Complaint[5] for specific performance of contract with
relief sought by petitioner in both the certiorari and habeas damages was filed by petitioner against respondents UFC,
corpus cases is the release of Gonzales and Mesa. Petitioner Marilyn G. Ong, Victoria O. Ang, Edna C. Alfuerte, Mark Dennis
should not have filed the Petition for Habeas Corpusbecause O. Ang, and Alvin O. Ang, with the Regional Trial Court (RTC)
the relief he is seeking therein is the same relief he is asking of Makati City, Branch 150, docketed as Civil Case No. 01-976.
for in the certiorari case. Moreover, the main issue in both

23
In its Complaint, petitioner avers that it entered into a ordering [respondents] jointly and severally
Contract of Lease dated 30 July 1997 with respondent UFC, to pay [petitioner] the following sums of
represented by its President and co-respondent, Marilyn G. money, to wit:
Ong. By virtue of the said contract, petitioner leased from UFC
Units B and D, with a gross area of 377 square meters, more a) the principal amount
or less, and six parking lots, at the Chatham House of P1,093,600.00, representing the
Condominium, located at the corner of Valero and Herrera return or delivery of the unused two
Streets, Salcedo Village, Makati City (leased premises), for a (2) months rentals and the security
maximum term of four (4) years beginning 1 October deposit, plus interest at the rate of
1997. For the use of the leased premises, petitioner agreed to twelve per centum (12%) per
pay the sum of P5,430,240.00, as rentals for the first two annum from 15 September 2000
years, from 1 October 1997 to 30 September 1999, payable in until the principal amount due is
full upon the official turn-over of the leased premises; and the fully paid, plus six per centum (6%)
sum of P678,780.00, as security deposit, for a total amount per annum on the aforesaid interest
of P6,109,020.00.[6] The Contract provided for the pre- due from the filing of this complaint
termination option that may be exercised by the lessee.[7] until the principal amount is fully
paid;
On or about 23 June 2000, three months prior to the
expiration of the third year of the lease, petitioner, through b) the sum of P400,000.00, as and
counsel, served by personal service upon respondent UFC, for actual damages by way of
through its President and co-respondent, Marilyn G. Ong, a attorneys fees and litigation
letter dated 23 June 2000[8] informing the corporation that expenses;
petitioner was pre-terminating the Lease Contract effective
31 July 2000. Considering that under the Contract of Lease, it c) the sum of P100,000.00, as and
could pre-terminate the lease after the expiry of the second- for moral damages;
year term without having to pay pre-termination penalties,
petitioner also requested the return or delivery of the total d) the sum of P100,000.00, as and
sum of P1,093,600.00, representing its unused two for exemplary damages;
months advance rentals for August and September 2000, in
the sum of P414,820.00, and the security deposit in the sum e) the costs of suit.[10]
of P678,780.00, within forty-five days after the pre-
termination of the lease contract, or on 15 September 2000.
Respondents filed their Answer with Compulsory
On 31 July 2000, petitioner vacated and surrendered the Counterclaim on 2 August 2001.[11] Thereafter, pre-trial was
leased premises to respondent UFC through the latters set. However, respondents failed to appear and, worse, failed
President and co-respondent Marilyn G. Ong free of any to file their pre-trial brief, as required by the Rules of
outstanding bills for water, electricity, telephone and other Court. They were therefore declared to have waived their
utility charges or damages to said leased premises. However, right to adduce evidence on their behalf.Respondents did not
respondents UFC and Marilyn G. Ong, in her capacity as UFC seek for a reconsideration of the aforesaid Order; hence,
President, totally ignored the demands made by petitioner in petitioner was allowed to present its evidence ex-parte on 19
its letter of 23 June 2000 and, consequently, failed to return or June 2002 and 19 August 2002.
deliver the P1,093,600.00 sought by petitioner.
On 8 November 2002, the RTC rendered a Decision, the
Petitioner claims that respondent UFC plainly committed dispositive portion of which states:
fraud in the performance of its clear duty under paragraph 22
of the Contract of Lease by not returning petitioners unused From the foregoing, the Court is convinced
two months advance rentals and security deposit despite that the [herein petitioner] has established
repeated demands therefor. Hence, the individual its claim against the [herein respondents].
respondents as directors of respondent UFC should be
deemed to have willfully and knowingly assented to a WHEREFORE, judgment is hereby rendered in favor
patently unlawful act or are guilty of gross negligence or bad of the [petitioner] and against the [respondents],
faith, as the case may be, in directing the affairs of respondent ordering the latter, jointly and severally, to pay
UFC. Under Section 31 of the Corporation Code[9] of [petitioner]:
the Philippines, the respondent directors must be jointly and
severally held liable together with respondent UFC. 1. the principal amount of Php1,093,600.00
representing two (2) months rentals
Petitioner thus prayed to the RTC: and security deposit, plus interest of
12% per annum from September 15,
x x x that, after due notice and trial, to render 2000, until the principal amount due
a judgment in favor of [herein petitioner} is fully paid, plus 6% per annum on
and against [herein respondents] by the interest due from the filing of

24
 this complaint until the principal inadvertence and not for the purpose of
amount is fully paid; delay.

2. the sum of Php400,000.00, as and by way WHEREFORE, finding the motion to be

of attorneys fees and litigation meritorious and in the interest of substantial
expenses; justice, this Court resolves to GRANT the
motion.
3. the sum of Php100,000.00, as moral
damages; Accordingly, this Courts resolution
dated September 30, 2003 is hereby
4. the sum of Php100,000.00, as exemplary REVERSED and SET ASIDE and a new one
damages; and entered allowing the filing of the [appellants]
brief. The appellants brief attached to the
5. costs of suit.[12] motion for reconsideration is ADMITTED.

[Herein petitioner] may file its appellees

Respondents elevated the case on appeal to the Court of brief within the period prescribed by the
Appeals. They received a Notice to File Brief[13] from the Court rules upon receipt hereof.[16]
of Appeals. Respondents were unable to comply with this
directive. Petitioner thus filed on 17 September 2003 with the
Court of Appeals a Motion to Dismiss Appeal of the Petitioner then filed a Motion for Reconsideration of the
respondents on the ground that respondents counsel received afore-quoted Resolution which the Court of Appeals denied in
the Notice to File Brief on 16 July 2003 as shown by the another Resolution dated 5 May 2004. According to the
Registry Return Receipt and had forty-five (45) days or until 1 appellate court:
September 2003 to file their appellants brief, but failed to do
so. No opposition to the said Motion to Dismiss Appeal was The failure of the [herein respondents] to file
filed by respondents. Neither did they file a motion for their brief within the prescribed period does
extension of time to file appellants brief. not have the effect of automatically
dismissing the appeal. The Court has the
On 30 September 2003, the Court of Appeals issued a discretion to dismiss or not to dismiss the
Resolution which reads: appeal, fully aware of its primary duty to
render or dispense justice, if possible, with
For failure of the [herein respondents] to file dispatch. However, every party must be
their brief within the reglementary period, afforded the amplest opportunity for the
this appeal is hereby considered proper and just determination of his cause,
ABANDONED and accordingly DISMISSED free from the game of technicalities. If a
pursuant to Section 1(e), Rule 50 of the 1997 stringent application of the rules would
Rules on Civil Procedure, as amended.[14] hinder rather than serve the demands of
substantial justice, the former must yield to
the latter.Courts in real justice have always
On 27 October 2003, respondents filed a Motion for been guided by the norm that when on the
Reconsideration[15] of the foregoing Resolution stating that balance, technicalities take a backseat
their failure to file their appellants brief was due to their against substantive rights, and not the other
counsels inadvertence, attaching their brief thereto and way around.
praying for its admission. Respondents counsel had used his
residence as his mailing address and the domestic helper Dismissal of appeal purely on technical
might have misplaced the notice to file brief; hence, grounds is frowned upon where the policy of
respondents counsel failed to monitor the running of the the court is to encourage hearings of appeals
reglementary period for the filing of the appellants brief. on their merits and the rules of procedure
ought not to be applied in a very rigid and
On 27 November 2003, the Court of Appeals resolved technical sense.
respondents Motion for Reconsideration as follows:
WHEREFORE, premises considered, [herein
For consideration is [herein respondents] petitioners] motion for reconsideration is
Motion for Reconsideration of this Courts hereby DENIED.[17]
resolution dated September 30,
2003dismissing their appeal for failure to file
the [appellants] brief within the Hence, the present Petition raising the sole issue:
reglementary period. [Respondents] contend
that their failure to file the same was due to Whether or not Public Respondent acted
with grave abuse of discretion amounting to

25
 lack or excess of jurisdiction in rendering the Early in Pongasi v. Court of Appeals,[20] involving the failure to
resolutions of November 27, 2003 and May file the appellants brief within the prescribed period, this
5, 2004.[18] Court ruled:

[P]etitioners counsel filed a timely motion

In brief, petitioner submits that the inadvertence of for special extension of time on February 19,
respondents counsel to timely file their appellants brief is not 1975, two days before the expiration date on
a persuasive reason or a compelling justification to forego the February 21, 1975, and that petitioners
Rules of Procedure.[19] counsel filed defendants- appellants brief on
March 3, 1975, well within the 15 days
Respondents, on the other hand, insist that the substantive special extension prayed for by him in his
merit of their appeal to the Court of Appeals outweigh the motion.
procedural infirmity they committed by their omission to file
appellants brief within the prescribed period, and that the xxxx
decision of the RTC has no basis in fact and law.
This litigation is one for partition and the
The pertinent rules of procedure can be found in Section 7, conflicting assertions of the parties herein
Rule 44, and Section 1(e), Rule 50 of the Rules of Court which over property rights deserve to be passed
read: upon by the appellate court if only to assure
itself that the properties in question are
Procedure in the Court of Appeals awarded to those who rightfully deserve
them.
Rule 44
Ordinary Appealed Cases
Gregorio v. Court of Appeals[21] followed suit as this Court
Section 7. Appellants brief.- It shall be the again gave due course to the appeal despite the filing of the
duty of the appellant to file with the court, appellants brief beyond the reglementary period, considering
within forty-five (45) days from receipt of the subject matter of the appeal:
the notice of the clerk that all the evidence,
oral and documentary, are attached to the What is before the court is a question of forgery in
record, seven (7) copies of his legibly the supposed conveyance of a 57,491-square meter
typewritten, mimeographed or printed brief, land located in the residential area of a 57,491-
with proof of service of two (2) copies square meter land located in the residential area of
thereof upon the appellee. Las Pias, Rizal. Petitioner claims that the sale of the
land to the Spouses Corpuz Parami and Luciana
Parami is an absolute falsity.He stubbornly asserts
RULE 50 that he never sold the land to them. Such charges are
DISMISSAL OF APPEAL doubtless not devoid of significance. Respondent
Appellate Court, therefore, grievously erred in
SECTION 1. Grounds for dismissal of appeal. dismissing the appeal.
An appeal may be dismissed by the Court of
Appeals, on its own motion or on that of the
appellee, on the following grounds: This Court expounded on its decision thus:

xxxx The expiration of the time to file brief, unlike lateness

in filing the notice of appeal, appeal bond or record
(e) Failure of the appellant to serve and file on appeal is not a jurisdictional matter and may be
the required number of copies of his brief or waived by the parties. It is sufficient ground for
memorandum within the time provided by extending the time where the delay in filing the brief
these Rules. was caused in part by a misunderstanding of counsel,
and in part by appellants inability, because of his
poverty, to obtain the money necessary to pay the
The issue in this case is not a novel one. It has already been expenses of the appeal. Similarly, where the question
the subject of cases previously decided by this Court. raised is of sufficient importance to require an
examination of the record, the late filing of the brief
It is a good time to revisit the cases we have decided, delving may be forgone. This is especially true, like in the
on the issue of non-filing of appellants brief to the Court of case before Us, where there is no showing or
Appeals and its consequence. assertion whatsoever of any intent to delay on the
part of the appellant. Dismissal of appeals purely on
technical grounds is frowned upon where the policy
of the courts is to encourage ought not to be applied

26
in a very rigid, technical sense; rules of procedure are
used only to help secure not override substantial
justice. If a technical and rigid enforcement of the Bago v. People[24] followed the lead of Philippine Merchant, and
rules is made, their aim would be defeated. ruled as follows:

On March 9, 1998, petitioners counsel filed a

Development Bank of the Philippines v. Court of manifestation stating the Appellants Brief was filed
Appeals,[22] took its bearings from the above case, thus: seasonably by his secretary with the Court of
Appeals. However, the original of the same was
[t]he need x x x to determine once and for all whether inadvertently filed with the copies intended for the
the lands subject of petitioners reversion efforts are Brief Section because there were Christmas parties
foreshore lands constitutes good and sufficient cause going on. Petitioners counsel likewise admitted that
for relaxing procedural rules and granting the third the Office of the Solicitor General had just been
and fourth motions for extension x x x and furnished with a copy of the Appellants Brief due to
constituted an exceptional circumstance which the failure of her secretary to send it on December 22,
impressed petitioners appeal with public 1997.
interest. Thus, petitioners appeal was given due
course despite the late filing of its appellants brief. xxxx

Similarly, the case at bar is impressed with public [I]t is axiomatic that Rules of Court, promulgated by
interest. If petitioners appeal is denied due course, a authority of law, have the force and effect of
government institution could lose a great deal of law. More importantly, rules prescribing the time
money over a mere technicality. within which certain acts must be done, or certain
proceedings taken, are absolutely indispensable to
the prevention of needless delays and the orderly and
Though not deviating from the basic principle set in speedy discharge of judicial business. Strict
the above cases earlier mentioned, Philippine Merchant compliance with such rules is mandatory and
Marine School, Inc. v. Court of Appeals[23] became more imperative. Only strong considerations of equity,
succinct and this Court emphasized that sufficient cause must which are wanting in this case, will lead us to allow
exist for the relaxation of procedural rules: an exception to the procedural rule in the interest of
substantial justice.
As consistently reiterated, the power conferred upon
the Court of Appeals to dismiss an appeal is Consequently, the instant petition must perforce be
discretionary and not merely ministerial. With that denied.Petitioner has failed to show compelling
affirmation comes the caution that such discretion reasons to relax the rules in his favor. His failure to
must be a sound one, to be exercised in accordance comply strictly with the procedural requirements of
with the tenets of justice and fair play, having in mind the Rules of Court and observe the reglementary
the circumstances obtaining in each case. periods prescribed therein will not warrant the
application of equity and the liberal construction of
In the case at bar, we find no reason to disturb the the Rules.
conclusions of the Court of Appeals. Petitioner failed
to adduce sufficient proof that any inadvertence was
caused by the Post Office. Moreover, no conclusive Of the same tenor is De la Cruz v. Ramiscal,[25] where we again
proof could be shown that a motion for extension was explained at length that:
indeed filed at any time. All these create a doubt that
petitioners counsel has been candid in his dealings Petitioners justification that their former
with the courts. Needless to stress, a lawyer is bound counsel belatedly transmitted said order to
by ethical principles in the conduct of cases before them only on 20 March 1998 is not a good
the courts at all times. reason for departing from the established
rule. It was the responsibility of petitioners
As a last recourse, petitioner contends that the and their counsel to devise a system for the
interest of substantial justice would be served by receipt of mail intended for them. Rules on
giving due course to the appeal.However, we must procedure cannot be made to depend on the
state that the liberality with which we exercise our singular convenience of a party.
equity jurisdiction is always anchored on the basic
consideration that the same must be warranted by
the circumstances obtaining in each case. Having Asian Spirit Airlines (Airline Employees Cooperative) v.
found petitioners explanation less than worthy of Bautista[26]stayed on course with the more recent
credence, and without evidentiary support, we are jurisprudence by refusing to allow the late filing of the
constrained to adhere strictly to the procedural rules appellants brief on the ground of the mistake or inadvertence
on the timeliness of submission before the court. of the counsels secretary:

27
 filed on time. Its failure to do so is an
Blaming its counsels unidentified secretary inexcusable negligence.
for its abject failure to file its brief is a
common practice for negligent lawyers to
cover up for their own negligence, In Cruz v. Court of Appeals,[29] the Court likewise refused to
incompetence, indolence, and relax its procedural rules:
ineptitude.Such excuse is the most
hackneyed and habitual subterfuge Petitioner does not deny the procedural
employed by litigants who fail to observe the infraction on his part, but he asks for the
procedural requirements prescribed by the relaxation of the rules. Granting his plea,
Rules of Court. It bears stressing that it is the however, would be to fault the appellate
duty of counsel to adopt and strictly court for acting in faithful compliance with
maintain a system that insures that all the rules of procedure which the court has
pleadings should be filed and duly served been mandated to observe.
within the period therefor and, if he fails to
do so, the negligence of his secretary or clerk The Rules of Court are designed for the
to file such pleading is imputable to the said proper and prompt disposition of cases
counsel. before the appellate court. We cannot just
turn a blind eye and tolerate its
contravention. Section 7, Rule 44 of the Rules
In Uy v. Baloja, [27] counsel of therein petitioner attributed his of Court provides that it shall be the duty of
failure to file the appellants brief on time to his inability to the appellant to file his brief within 45 days
locate the transcript of stenographic notes in the case. from receipt of notice. His failure to comply
Unmoved, this Court dismissed the appeal and pronounced: with this mandate is a ground for the
dismissal of his appeal as provided under
Truly, petitioners conduct in the premises Section 1(e), Rule 50 of the Rules of
can never be a case of excusable Court.Petitioner actually had 135 days to
neglect. Quite the contrary, it smacks of a prepare his brief which is a considerable
lack of honest concern on his part and a period of time.
blatant disregard of the lawful directive of
the appellate court. Giving in to petitioners In not a few instances, we relaxed the rigid
maneuverings is tantamount to putting application of the rules of procedure, so that
premium on a litigants naked indolence and the ends of justice may be better
imparting imprimatur to a scheme of served.However, such liberality may not be
prolonging litigation. invoked if it would result in the wanton
disregard of the rules, and cause needless
delay. Save for the most persuasive of
This Court reiterated its stance on the strict reason, strict compliance with the rules is
adherence to the rules of procedure when in Philippine Rabbit enjoined to facilitate the orderly
Bus Lines, Inc. v. Goimco, Sr.,[28] it rejected therein petitioners administration of justice.Negligence of
excuse for the late filing of his appellants brief: petitioners counsel and his own failure to
enter the appearance of his collaborating
We note that petitioners previous counsel is counsel are, to our mind, unacceptable
a large law firm with several lawyers in its reasons for relaxing the observance of the
roster. Yet it took said counsel four (4) period set for filing briefs.
months, from the expiration of the
reglementary period, within which to file the
appellants brief. It is settled that failure to The same principle was highlighted in Moneytrend Lending v.
file brief for a client constitutes inexcusable Court of Appeals,[30] where we again repeated that the general
negligence. Petitioners flimsy excuse that its rule is that failure to file the appellants brief within the
counsels log-book containing the schedules prescribed period would result in the dismissal of the appeal,
for the filing of pleadings and hearings was and any exemption from the rule must be for the most
lost is, to say the least, most compelling reasons and the delay must be for a reasonable
unpersuasive. Said counsel should have period:
examined consistently the records of its
cases to find out what appropriate actions It may be that mere lapse of the period to file
have to be taken thereon. The notice to file an appellants brief does not automatically
the appellants brief was in the records of the result in the dismissal of the appeal and loss
instant cases all along. Had counsel been of jurisdiction by the appellate court. It ought
efficient in the handling of its cases, the to be stressed, however, the relaxation of the
required appellants brief could have been rules on pleadings and practice to relieve a

28
 party-litigant of an injustice must be for most As held by the Court in Gregorio v.
persuasive reasons. And in case of delay, the Court of Appeals (70 SCRA 546
lapse must be for a reasonable period. [1976]), (T)he expiration of the
time to file brief, unlike lateness in
filing the notice of appeal, appeal
In Delos Santos v. Elizalde,[31] this Court reminded litigants of bond or record on appeal is not a
their responsibility to monitor the status of their case and the jurisdictional matter and may be
inexcusability of the inability to file appellants brief on waived by the parties. Even after
account of non-monitoring: the expiration of the time fixed
for the filing of the brief, the
Petitioners failure to apprise themselves of reviewing court may grant an
the status of their case during its pendency extension of time, at least where
before the CA is inexcusable. Moreover, their no motion to dismiss has been
former counsels failure or neglect to file the made. Late filing or service of
required appellants brief shall bind them. briefs may be excused where no
material injury has been suffered
by the appellee be reason of the
Then in Redena v. Court of Appeals,[32] we repeated that delay or where there is no
negligence of counsel is not a defense for the failure to file the contention that the appellees
appellants brief within the reglementary period, and cause was prejudiced.
explained at length that:
Technically, the Court of Appeals may dismiss an
In seeking exemption from the above rule, petitioner appeal for failure to file appellants brief on
claims that he will suffer deprivation of property time. However, the dismissal isdirectory, not
without due process of law on account of the gross mandatory. It is not the ministerial duty of the court
negligence of his previous counsel. To him, the to dismiss the appeal. The failure of an appellant to
negligence of his former counsel was so gross that it file his brief within the time prescribed does not have
practically resulted to fraud because he was allegedly the effect of dismissing the appeal automatically. The
placed under the impression that the counsel had court has discretion to dismiss an appellants
prepared and filed his appellants brief. He thus prays appeal. It is a power conferred on the court, not a
the Court reverse the CA and remand the main case duty.The discretion must be a sound one, to be
to the court of origin for new trial. exercised in accordance with the tenets of justice and
fair play, having in mind the circumstances obtaining
Admittedly, this Court has relaxed the rule on the in each case. (Emphases supplied.)
binding effect of counsels negligence and allowed a
litigant another chance to present his case (1) where
the reckless or gross negligence of counsel deprives It is thus daylight clear from all these cases that:
the client of due process of law; (2) when application
of the rule will result in outright deprivation of the (1) The general rule is for the Court of Appeals to dismiss an
clients liberty or property; or (3) where the interests appeal when no appellants brief is filed within the
of justice so require. None of these exceptions obtains reglementary period prescribed by the rules;
here.
(2) The power conferred upon the Court of Appeals to dismiss
For a claim of counsels gross negligence to prosper, an appeal is discretionary and directory and not ministerial or
nothing short of clear abandonment of the clients mandatory;
cause must be shown. Here, petitioners counsel failed
to file the appellants brief. While this omission can (3) The failure of an appellant to file his brief within the
plausibly qualify as simple negligence, it does not reglementary period does not have the effect of causing the
amount to gross negligence to justify the annulment automatic dismissal of the appeal;
of the proceeding below.
(4) In case of late filing, the appellate court has the power to
still allow the appeal; however, for the proper exercise of the
In Natonton v. Magaway,[33] this Court deemed it proper to courts leniency it is imperative that:
underscore once more that the dismissal of an appeal for the
late filing of the appellants brief is discretionary upon the (a) the circumstances obtaining warrant the
court, depending on the circumstances surrounding the same: courts liberality;

In Carco Motor Sales v. Court of Appeals (G.R. No. L- (b) that strong considerations of equity
44609, August 31, 1977, 78 SCRA 526), this Court justify an exception to the procedural rule in
held: the interest of substantial justice;

29
 (c) no material injury has been suffered by
the appellee by the delay; When called for pre-trial, there was no
appearance on the part of the [herein
(d) there is no contention that the appellees respondents]. Records show that this is the
cause was prejudiced; 4th time this case is set for pre-trial. In fact,
up to the present time despite the
(e) at least there is no motion to dismiss requirements of the Rules of Court the
filed. [respondents] have failed to file their Pre-
trial Brief. When called for the third time
at 10:00 a.m., there was still no appearance
(5) In case of delay, the lapse must be for a reasonable period; on the part of the [respondents], prompting
and the [herein petitioner] thru counsel to pray
for an Order of default.
(6) Inadvertence of counsel cannot be considered as an
adequate excuse as to call for the appellate courts indulgence Premises considered, and as prayed for, the
except: [respondents] are now declared to have
waived their right to adduce evidence on
(a) where the reckless or gross negligence of Pre-trial, and the [petitioner] may present
counsel deprives the client of due process of evidence ex-parte on May 24, 2002, at 2:00
law; p.m.[35]

(b) when application of the rule will result in

outright deprivation of the clients liberty or Respondents did not file any motion to set aside the
property; or above order.

(c) where the interests of justice so require. Respondents evidently continued with their lack of
care even when they filed an appeal with the Court of Appeals
as shown by their not having filed an appellants brief under
In this case, the Court cannot say that the issues being raised the reglementary period. The purported inadvertence of their
by respondents are of such importance that would justify the counsel cannot justify a relaxation of the rules. It is the
appellate court to exempt them from the general rule and give counsels responsibility to see to it that he has established an
due course to their appeal despite the late filing of their efficient system to monitor the receipt of important notices
appellants brief. It is starkly clear that respondents do not and orders from the courts. While the omission can plausibly
deny that they owe petitioner the amount it is demanding, as qualify as simple negligence, it does not amount to gross
borne out in the Answer they filed before the RTC, save to say negligence to call for the exception to the oft-repeated rule
that petitioner refused and failed to accept the payment that the negligence of counsel binds the client. Respondents
thereof.Respondents Answer before the RTC confirms this are, thus, bound by their counsels negligence.
observation. Their Answer reads:
Finally, it appears that respondents finally attached
5. [Herein petitioner] has no valid cause of their Brief only in their Motion for Reconsideration filed on 27
action as against the [herein respondents] October 2003 in the Court of Appeals seeking a
considering that [respondent UFC] has reconsideration of the appellate courts Resolution of 30
already prepared the check as early as September 2003, dismissing their appeal. The delay in the
October 3, 2000 as its payment in the filing thereof, 57 days after the expiration of the period to file
amount of P1,025,590.00 but the [petitioner] the same on 1 September 2003,[36] was, indeed, unreasonably
refused and failed to accept such long.
payment. For reference, we attached
herewith copy of the check voucher and ALL TOLD, the Court finds no sufficient and compelling
check as Annexes A and B respectively.[34] reasons to justify the exercise of the Courts leniency and
sound discretion. Under the facts of the case, the Court is
constrained to adhere strictly to the procedural rules.
Even the claim of refusal by petitioner to accept the check
payment is contrary to ordinary human character and cannot WHEREFORE, premises considered, the petition
be given even half a life. For, why would the petitioner go to is GRANTED. Accordingly, the Court of Appeals Resolutions
this length in collecting the amount due him after allegedly dated 27 November 2003 and 5 May
refusing and failing to accept the respondents payment? 2004 are ANNULLED and SET ASIDE,and the Resolution
dated 30 September 2003 dismissing the appeal of
Our attention is riveted to respondents repeated laxity and respondents Unified Field Corporation, Marilyn G. Ong,
indolence as regards this case even when it was still pending Victoria O. Ang, Edna C. Alfuerte, Mark Dennis O. Ang and
before the RTC. As shown by the records and contained in the Alvin Ang, is REINSTATED. Costs against respondents. SO
RTC Order dated 22 April 2002: ORDERED.

30
G.R. No. 75919 May 7, 1987 action for recovery of ownership and possession of a parcel of
land. The damages stated were treated as merely to the main
MANCHESTER DEVELOPMENT CORPORATION, ET cause of action. Thus, the docket fee of only P60.00 and
AL., petitioners, P10.00 for the sheriff's fee were paid. 6
vs.
COURT OF APPEALS, CITY LAND DEVELOPMENT In the present case there can be no such honest difference of
CORPORATION, STEPHEN ROXAS, ANDREW LUISON, opinion. As maybe gleaned from the allegations of the
GRACE LUISON and JOSE DE MAISIP, respondents. complaint as well as the designation thereof, it is both an
action for damages and specific performance. The docket fee
Acting on the motion for reconsideration of the resolution of paid upon filing of complaint in the amount only of P410.00
the Second Division of January 28,1987 and another motion to by considering the action to be merely one for specific
refer the case to and to be heard in oral argument by the performance where the amount involved is not capable of
Court En Banc filed by petitioners, the motion to refer the case pecuniary estimation is obviously erroneous. Although the
to the Court en banc is granted but the motion to set the case total amount of damages sought is not stated in the prayer of
for oral argument is denied. the complaint yet it is spelled out in the body of the complaint
totalling in the amount of P78,750,000.00 which should be the
Petitioners in support of their contention that the filing fee basis of assessment of the filing fee.
must be assessed on the basis of the amended complaint cite
the case of Magaspi vs. Ramolete. 1 They contend that the 4. When this under-re assessment of the filing fee in this case
Court of Appeals erred in that the filing fee should be levied was brought to the attention of this Court together with
by considering the amount of damages sought in the original similar other cases an investigation was immediately ordered
complaint. by the Court. Meanwhile plaintiff through another counsel
with leave of court filed an amended complaint on September
The environmental facts of said case differ from the present in 12, 1985 for the inclusion of Philips Wire and Cable
that — Corporation as co-plaintiff and by emanating any mention of
the amount of damages in the body of the complaint. The
prayer in the original complaint was maintained. After this
1. The Magaspi case was an action for recovery of ownership Court issued an order on October 15, 1985 ordering the re-
and possession of a parcel of land with damages.2While the assessment of the docket fee in the present case and other
present case is an action for torts and damages and specific cases that were investigated, on November 12, 1985 the trial
performance with prayer for temporary restraining order, court directed plaintiffs to rectify the amended complaint by
etc.3 stating the amounts which they are asking for. It was only
then that plaintiffs specified the amount of damages in the
2. In the Magaspi case, the prayer in the complaint seeks not body of the complaint in the reduced amount of
only the annulment of title of the defendant to the property, P10,000,000.00. 7 Still no amount of damages were specified
the declaration of ownership and delivery of possession in the prayer. Said amended complaint was admitted.
thereof to plaintiffs but also asks for the payment of actual
moral, exemplary damages and attorney's fees arising On the other hand, in the Magaspi case, the trial court ordered
therefrom in the amounts specified therein. 4However, in the the plaintiffs to pay the amount of P3,104.00 as filing fee
present case, the prayer is for the issuance of a writ of covering the damages alleged in the original complaint as it
preliminary prohibitory injunction during the pendency of the did not consider the damages to be merely an or incidental to
action against the defendants' announced forfeiture of the the action for recovery of ownership and possession of real
sum of P3 Million paid by the plaintiffs for the property in property. 8 An amended complaint was filed by plaintiff with
question, to attach such property of defendants that maybe leave of court to include the government of the Republic as
sufficient to satisfy any judgment that maybe rendered, and defendant and reducing the amount of damages, and
after hearing, to order defendants to execute a contract of attorney's fees prayed for to P100,000.00. Said amended
purchase and sale of the subject property and annul complaint was also admitted. 9
defendants' illegal forfeiture of the money of plaintiff,
ordering defendants jointly and severally to pay plaintiff
actual, compensatory and exemplary damages as well as 25% In the Magaspi case, the action was considered not only one
of said amounts as maybe proved during the trial as for recovery of ownership but also for damages, so that the
attorney's fees and declaring the tender of payment of the filing fee for the damages should be the basis of assessment.
purchase price of plaintiff valid and producing the effect of Although the payment of the docketing fee of P60.00 was
payment and to make the injunction permanent. The amount found to be insufficient, nevertheless, it was held that since
of damages sought is not specified in the prayer although the the payment was the result of an "honest difference of opinion
body of the complaint alleges the total amount of over P78 as to the correct amount to be paid as docket fee" the court
Million as damages suffered by plaintiff.5 "had acquired jurisdiction over the case and the proceedings
thereafter had were proper and regular." 10 Hence, as the
amended complaint superseded the original complaint, the
3. Upon the filing of the complaint there was an honest allegations of damages in the amended complaint should be
difference of opinion as to the nature of the action in the the basis of the computation of the filing fee. 11
Magaspi case. The complaint was considered as primarily an

31
In the present case no such honest difference of opinion was jurisdiction in the Court, much less the payment of the docket
possible as the allegations of the complaint, the designation fee based on the amounts sought in the amended pleading.
and the prayer show clearly that it is an action for damages The ruling in the Magaspi case 14 in so far as it is inconsistent
and specific performance. The docketing fee should be with this pronouncement is overturned and reversed.
assessed by considering the amount of damages as alleged in
the original complaint. WHEREFORE, the motion for reconsideration is denied for
lack of merit.
As reiterated in the Magaspi case the rule is well-settled "that
a case is deemed filed only upon payment of the docket fee SO ORDERED.
regardless of the actual date of filing in court . 12 Thus, in the
present case the trial court did not acquire jurisdiction over
the case by the payment of only P410.00 as docket fee.
Neither can the amendment of the complaint thereby vest
jurisdiction upon the Court. 13 For an legal purposes there is
no such original complaint that was duly filed which could be
amended. Consequently, the order admitting the amended
KOREA TECHNOLOGIES CO., G.R. No. 143581
complaint and all subsequent proceedings and actions taken
LTD., Petitioner, - versus - HON. ALBERTO A. LERMA, in his
by the trial court are null and void.
capacity as Presiding Judge of Branch 256 of Regional
Trial Court of Muntinlupa City, and PACIFIC GENERAL
The Court of Appeals therefore, aptly ruled in the present case STEEL MANUFACTURING CORPORATION,
that the basis of assessment of the docket fee should be the Respondents. January 7, 2008
amount of damages sought in the original complaint and not x------------------------------------------------------------------------------
in the amended complaint. -----------x

The Court cannot close this case without making the

observation that it frowns at the practice of counsel who filed In our jurisdiction, the policy is to favor alternative methods
the original complaint in this case of omitting any of resolving disputes, particularly in civil and commercial
specification of the amount of damages in the prayer although disputes.Arbitration along with mediation, conciliation, and
the amount of over P78 million is alleged in the body of the negotiation, being inexpensive, speedy and less hostile
complaint. This is clearly intended for no other purpose than methods have long been favored by this Court. The petition
to evade the payment of the correct filing fees if not to before us puts at issue an arbitration clause in a contract
mislead the docket clerk in the assessment of the filing fee. mutually agreed upon by the parties stipulating that they
This fraudulent practice was compounded when, even as this would submit themselves to arbitration in a foreign
Court had taken cognizance of the anomaly and ordered an country.Regrettably, instead of hastening the resolution of
investigation, petitioner through another counsel filed an their dispute, the parties wittingly or unwittingly prolonged
amended complaint, deleting all mention of the amount of the controversy.
damages being asked for in the body of the complaint. It was
only when in obedience to the order of this Court of October Petitioner Korea Technologies Co., Ltd. (KOGIES) is a
18, 1985, the trial court directed that the amount of damages Korean corporation which is engaged in the supply and
be specified in the amended complaint, that petitioners' installation of Liquefied Petroleum Gas (LPG) Cylinder
counsel wrote the damages sought in the much reduced manufacturing plants, while private respondent Pacific
amount of P10,000,000.00 in the body of the complaint but General Steel Manufacturing Corp. (PGSMC) is a domestic
not in the prayer thereof. The design to avoid payment of the corporation.
required docket fee is obvious.
On March 5, 1997, PGSMC and KOGIES executed a
The Court serves warning that it will take drastic action upon Contract[1] whereby KOGIES would set up an LPG Cylinder
a repetition of this unethical practice. Manufacturing Plant in Carmona, Cavite. The contract was
executed in the Philippines. On April 7, 1997, the parties
To put a stop to this irregularity, henceforth all complaints, executed, in Korea, an Amendment for Contract No. KLP-
petitions, answers and other similar pleadings should specify 970301 dated March 5, 1997[2]amending the terms of
the amount of damages being prayed for not only in the body payment. The contract and its amendment stipulated that
of the pleading but also in the prayer, and said damages shall KOGIES will ship the machinery and facilities necessary for
be considered in the assessment of the filing fees in any case. manufacturing LPG cylinders for which PGSMC would pay
Any pleading that fails to comply with this requirement shall USD 1,224,000. KOGIES would install and initiate the
not bib accepted nor admitted, or shall otherwise be operation of the plant for which PGSMC bound itself to pay
expunged from the record. USD 306,000 upon the plants production of the 11-kg. LPG
cylinder samples. Thus, the total contract price amounted to
USD 1,530,000.
The Court acquires jurisdiction over any case only upon the
payment of the prescribed docket fee. An amendment of the
complaint or similar pleading will not thereby vest

32
 On October 14, 1997, PGSMC entered into a Contract that the machineries, equipment, and facilities installed in the
of Lease[3] with Worth Properties, Inc. (Worth) for use of plant would be dismantled and transferred on July 4,
Worths 5,079-square meter property with a 4,032-square 1998. Thus, on July 1, 1998, KOGIES instituted an Application
meter warehouse building to house the LPG manufacturing for Arbitration before the Korean Commercial Arbitration
plant. The monthly rental was PhP 322,560 commencing Board (KCAB) in Seoul, Korea pursuant to Art. 15 of the
on January 1, 1998 with a 10% annual increment Contract as amended.
clause. Subsequently, the machineries, equipment, and
facilities for the manufacture of LPG cylinders were shipped, On July 3, 1998, KOGIES filed a Complaint for Specific
delivered, and installed in the Carmona plant. PGSMC paid Performance, docketed as Civil Case No. 98-117[8] against
KOGIES USD 1,224,000. PGSMC before the Muntinlupa City Regional Trial Court
(RTC). The RTC granted a temporary restraining order (TRO)
However, gleaned from the Certificate[4] executed by on July 4, 1998, which was subsequently extended until July
the parties on January 22, 1998, after the installation of the 22, 1998. In its complaint, KOGIES alleged that PGSMC had
plant, the initial operation could not be conducted as PGSMC initially admitted that the checks that were stopped were not
encountered financial difficulties affecting the supply of funded but later on claimed that it stopped payment of the
materials, thus forcing the parties to agree that KOGIES would checks for the reason that their value was not received as the
be deemed to have completely complied with the terms and former allegedly breached their contract by altering the
conditions of the March 5, 1997 contract. quantity and lowering the quality of the machinery and
equipment installed in the plant and failed to make the plant
For the remaining balance of USD306,000 for the operational although it earlier certified to the contrary as
installation and initial operation of the plant, PGSMC issued shown in a January 22, 1998 Certificate.Likewise, KOGIES
two postdated checks: (1) BPI Check No. 0316412 dated averred that PGSMC violated Art. 15 of their Contract, as
January 30, 1998 for PhP 4,500,000; and (2) BPI Check No. amended, by unilaterally rescinding the contract without
0316413 dated March 30, 1998 for PhP 4,500,000.[5] resorting to arbitration. KOGIES also asked that PGSMC be
restrained from dismantling and transferring the machinery
When KOGIES deposited the checks, these were and equipment installed in the plant which the latter
dishonored for the reason PAYMENT STOPPED. Thus, on May threatened to do on July 4, 1998.
8, 1998, KOGIES sent a demand letter[6] to PGSMC threatening
criminal action for violation of Batas Pambansa Blg. 22 in case On July 9, 1998, PGSMC filed an opposition to the TRO
of nonpayment. On the same date, the wife of PGSMCs arguing that KOGIES was not entitled to the TRO since Art. 15,
President faxed a letter dated May 7, 1998 to KOGIES the arbitration clause, was null and void for being against
President who was then staying at a Makati City hotel. She public policy as it ousts the local courts of jurisdiction over
complained that not only did KOGIES deliver a different brand the instant controversy.
of hydraulic press from that agreed upon but it had not
delivered several equipment parts already paid for. On July 17, 1998, PGSMC filed its Answer with
Compulsory Counterclaim[9] asserting that it had the full right
On May 14, 1998, PGSMC replied that the two checks to dismantle and transfer the machineries and equipment
it issued KOGIES were fully funded but the payments were because it had paid for them in full as stipulated in the
stopped for reasons previously made known to KOGIES.[7] contract; that KOGIES was not entitled to the PhP 9,000,000
covered by the checks for failing to completely install and
On June 1, 1998, PGSMC informed KOGIES that make the plant operational; and that KOGIES was liable for
PGSMC was canceling their Contract dated March 5, 1997 on damages amounting to PhP 4,500,000 for altering the
the ground that KOGIES had altered the quantity and lowered quantity and lowering the quality of the machineries and
the quality of the machineries and equipment it delivered to equipment. Moreover, PGSMC averred that it has already paid
PGSMC, and that PGSMC would dismantle and transfer the PhP 2,257,920 in rent (covering January to July 1998) to
machineries, equipment, and facilities installed in the Worth and it was not willing to further shoulder the cost of
Carmona plant. Five days later, PGSMC filed before the Office renting the premises of the plant considering that the LPG
of the Public Prosecutor an Affidavit-Complaint cylinder manufacturing plant never became operational.
for Estafadocketed as I.S. No. 98-03813 against Mr. Dae Hyun
Kang, President of KOGIES. After the parties submitted their Memoranda, on July
23, 1998, the RTC issued an Order denying the application for
On June 15, 1998, KOGIES wrote PGSMC informing a writ of preliminary injunction, reasoning that PGSMC had
the latter that PGSMC could not unilaterally rescind their paid KOGIES USD 1,224,000, the value of the machineries and
contract nor dismantle and transfer the machineries and equipment as shown in the contract such that KOGIES no
equipment on mere imagined violations by KOGIES. It also longer had proprietary rights over them.And finally, the RTC
insisted that their disputes should be settled by arbitration as held that Art. 15 of the Contract as amended was invalid as it
agreed upon in Article 15, the arbitration clause of their tended to oust the trial court or any other court jurisdiction
contract. over any dispute that may arise between the parties. KOGIES
prayer for an injunctive writ was denied.[10] The dispositive
On June 23, 1998, PGSMC again wrote KOGIES portion of the Order stated:
reiterating the contents of its June 1, 1998 letter threatening

33
 On October 2, 1998, KOGIES filed an Urgent Motion
WHEREFORE, in view of the foregoing for Reconsideration[17] of the September 21, 1998 RTC Order
consideration, this Court believes and so granting inspection of the plant and denying dismissal of
holds that no cogent reason exists for this PGSMCs compulsory counterclaims.
Court to grant the writ of preliminary
injunction to restrain and refrain defendant Ten days after, on October 12, 1998, without waiting
from dismantling the machineries and for the resolution of its October 2, 1998 urgent motion for
facilities at the lot and building of Worth reconsideration, KOGIES filed before the Court of Appeals
Properties, Incorporated at Carmona, Cavite (CA) a petition for certiorari[18] docketed as CA-G.R. SP No.
and transfer the same to another site: and 49249, seeking annulment of the July 23, 1998 and September
therefore denies plaintiffs application for a 21, 1998 RTC Orders and praying for the issuance of writs of
writ of preliminary injunction. prohibition, mandamus, and preliminary injunction to enjoin
the RTC and PGSMC from inspecting, dismantling, and
transferring the machineries and equipment in the Carmona
plant, and to direct the RTC to enforce the specific agreement
On July 29, 1998, KOGIES filed its Reply to Answer on arbitration to resolve the dispute.
and Answer to Counterclaim.[11] KOGIES denied it had altered
the quantity and lowered the quality of the machinery, In the meantime, on October 19, 1998, the RTC
equipment, and facilities it delivered to the plant. It claimed denied KOGIES urgent motion for reconsideration and
that it had performed all the undertakings under the contract directed the Branch Sheriff to proceed with the inspection of
and had already produced certified samples of LPG the machineries and equipment in the plant on October 28,
cylinders. It averred that whatever was unfinished was 1998.[19]
PGSMCs fault since it failed to procure raw materials due to
lack of funds. KOGIES, relying on Chung Fu Industries (Phils.), Thereafter, KOGIES filed a Supplement to the
Inc. v. Court of Appeals,[12] insisted that the arbitration clause Petition[20] in CA-G.R. SP No. 49249 informing the CA about
was without question valid. the October 19, 1998RTC Order. It also reiterated its prayer
for the issuance of the writs of prohibition, mandamus and
After KOGIES filed a Supplemental Memorandum preliminary injunction which was not acted upon by the
with Motion to Dismiss[13] answering PGSMCs memorandum CA. KOGIES asserted that the Branch Sheriff did not have the
of July 22, 1998 and seeking dismissal of PGSMCs technical expertise to ascertain whether or not the
counterclaims, KOGIES, on August 4, 1998, filed its Motion for machineries and equipment conformed to the specifications
Reconsideration[14] of the July 23, 1998 Order denying its in the contract and were properly installed.
application for an injunctive writ claiming that the contract
was not merely for machinery and facilities worth USD On November 11, 1998, the Branch Sheriff filed his
1,224,000 but was for the sale of an LPG manufacturing plant Sheriffs Report[21] finding that the enumerated machineries
consisting of supply of all the machinery and facilities and and equipment were not fully and properly installed.
transfer of technology for a total contract price of USD
1,530,000 such that the dismantling and transfer of the The Court of Appeals affirmed the trial court and
machinery and facilities would result in the dismantling and declared
transfer of the very plant itself to the great prejudice of the arbitration clause against public policy
KOGIES as the still unpaid owner/seller of the
plant.Moreover, KOGIES points out that the arbitration clause
under Art. 15 of the Contract as amended was a valid On May 30, 2000, the CA rendered the assailed
arbitration stipulation under Art. 2044 of the Civil Code and Decision[22]affirming the RTC Orders and dismissing the
as held by this Court in Chung Fu Industries (Phils.), Inc.[15] petition for certiorari filed by KOGIES. The CA found that the
RTC did not gravely abuse its discretion in issuing the
In the meantime, PGSMC filed a Motion for Inspection assailed July 23, 1998 and September 21,
of Things[16] to determine whether there was indeed 1998 Orders. Moreover, the CA reasoned that KOGIES
alteration of the quantity and lowering of quality of the contention that the total contract price for USD 1,530,000 was
machineries and equipment, and whether these were for the whole plant and had not been fully paid was contrary
properly installed. KOGIES opposed the motion positing that to the finding of the RTC that PGSMC fully paid the price of
the queries and issues raised in the motion for inspection fell USD 1,224,000, which was for all the machineries and
under the coverage of the arbitration clause in their contract. equipment. According to the CA, this determination by the
RTC was a factual finding beyond the ambit of a petition for
On September 21, 1998, the trial court issued an certiorari.
Order (1) granting PGSMCs motion for inspection; (2) denying
KOGIES motion for reconsideration of the July 23, 1998 RTC On the issue of the validity of the arbitration clause,
Order; and (3) denying KOGIES motion to dismiss PGSMCs the CA agreed with the lower court that an arbitration clause
compulsory counterclaims as these counterclaims fell within which provided for a final determination of the legal rights of
the requisites of compulsory counterclaims. the parties to the contract by arbitration was against public
policy.

34
 e. PROCLAIMING THE TWO
On the issue of nonpayment of docket fees and non- ORDERS DATED JULY 23 AND SEPTEMBER
attachment of a certificate of non-forum shopping by PGSMC, 21, 1998 NOT TO BE PROPER SUBJECTS OF
the CA held that the counterclaims of PGSMC were CERTIORARI AND PROHIBITION FOR BEING
compulsory ones and payment of docket fees was not INTERLOCUTORY IN NATURE;
required since the Answer with counterclaim was not an
initiatory pleading. For the same reason, the CA said a f. NOT GRANTING THE RELIEFS
certificate of non-forum shopping was also not required. AND REMEDIES PRAYED FOR IN HE (SIC)
PETITION AND, INSTEAD, DISMISSING THE
Furthermore, the CA held that the petition for SAME FOR ALLEGEDLY WITHOUT MERIT.[23]
certiorari had been filed prematurely since KOGIES did not
wait for the resolution of its urgent motion for
reconsideration of the September 21, 1998 RTC Order which The Courts Ruling
was the plain, speedy, and adequate remedy
available.According to the CA, the RTC must be given the The petition is partly meritorious.
opportunity to correct any alleged error it has committed, and
that since the assailed orders were interlocutory, these cannot Before we delve into the substantive issues, we shall
be the subject of a petition for certiorari. first tackle the procedural issues.

Hence, we have this Petition for Review on Certiorari The rules on the payment of docket fees for
under Rule 45. counterclaims
and cross claims were amended effective August 16, 2004
The Issues
KOGIES strongly argues that when PGSMC filed the
Petitioner posits that the appellate court committed counterclaims, it should have paid docket fees and filed a
the following errors: certificate of non-forum shopping, and that its failure to do so
a. PRONOUNCING THE QUESTION OF was a fatal defect.
OWNERSHIP OVER THE MACHINERY AND
FACILITIES AS A QUESTION OF FACT We disagree with KOGIES.
BEYOND THE AMBIT OF A PETITION FOR
CERTIORARI INTENDED ONLY FOR As aptly ruled by the CA, the counterclaims of PGSMC
CORRECTION OF ERRORS OF JURISDICTION were incorporated in its Answer with Compulsory
OR GRAVE ABUSE OF DISCRETION Counterclaim dated July 17, 1998 in accordance with Section
AMOUNTING TO LACK OF (SIC) EXCESS OF 8 of Rule 11, 1997 Revised Rules of Civil Procedure, the rule
JURISDICTION, AND CONCLUDING THAT that was effective at the time the Answer with Counterclaim
THE TRIAL COURTS FINDING ON THE SAME was filed. Sec. 8 on existing counterclaim or cross-
QUESTION WAS IMPROPERLY RAISED IN claim states, A compulsory counterclaim or a cross-claim that
THE PETITION BELOW; a defending party has at the time he files his answer shall be
contained therein.
b. DECLARING AS NULL AND VOID THE
ARBITRATION CLAUSE IN ARTICLE 15 OF
THE CONTRACT BETWEEN THE PARTIES On July 17, 1998, at the time PGSMC filed its Answer
FOR BEING CONTRARY TO PUBLIC POLICY incorporating its counterclaims against KOGIES, it was not
AND FOR OUSTING THE COURTS OF liable to pay filing fees for said counterclaims being
JURISDICTION; compulsory in nature. We stress, however, that
effective August 16, 2004 under Sec. 7, Rule 141, as amended
c. DECREEING PRIVATE by A.M. No. 04-2-04-SC, docket fees are now required to be
RESPONDENTS COUNTERCLAIMS TO BE ALL paid in compulsory counterclaim or cross-claims.
COMPULSORY NOT NECESSITATING
PAYMENT OF DOCKET FEES AND As to the failure to submit a certificate of forum
CERTIFICATION OF NON-FORUM SHOPPING; shopping,PGSMCs Answer is not an initiatory pleading which
requires a certification against forum shopping under Sec.
d. RULING THAT THE PETITION 5[24] of Rule 7, 1997 Revised Rules of Civil Procedure. It is a
WAS FILED PREMATURELY WITHOUT responsive pleading, hence, the courts a quo did not commit
WAITING FOR THE RESOLUTION OF THE reversible error in denying KOGIES motion to dismiss
MOTION FOR RECONSIDERATION OF THE PGSMCs compulsory counterclaims.
ORDER DATED SEPTEMBER 21, 1998 OR
WITHOUT GIVING THE TRIAL COURT AN Interlocutory orders proper subject of certiorari
OPPORTUNITY TO CORRECT ITSELF;
Citing Gamboa v. Cruz,[25] the CA also pronounced that
certiorari and Prohibition are neither the remedies to

35
question the propriety of an interlocutory order of the trial motion for reconsideration and said motion should have been
court.[26] The CA erred on its reliance first resolved by the court a quo. The reason behind the rule is
on Gamboa. Gamboa involved the denial of a motion to acquit to enable the lower court, in the first instance, to pass upon
in a criminal case which was not assailable in an action for and correct its mistakes without the intervention of the
certiorari since the denial of a motion to quash required the higher court.[30]
accused to plead and to continue with the trial, and whatever
objections the accused had in his motion to quash can then be The September 21, 1998 RTC Order directing the
used as part of his defense and subsequently can be raised as branch sheriff to inspect the plant, equipment, and facilities
errors on his appeal if the judgment of the trial court is when he is not competent and knowledgeable on said matters
adverse to him. The general rule is that interlocutory orders is evidently flawed and devoid of any legal support. Moreover,
cannot be challenged by an appeal.[27] Thus, in Yamaoka v. there is an urgent necessity to resolve the issue on the
Pescarich Manufacturing Corporation, we held: dismantling of the facilities and any further delay would
prejudice the interests of KOGIES. Indeed, there is real and
The proper remedy in such cases is imminent threat of irreparable destruction or substantial
an ordinary appeal from an adverse damage to KOGIES equipment and machineries. We find the
judgment on the merits, incorporating in said resort to certiorari based on the gravely abusive orders of the
appeal the grounds for assailing the trial court sans the ruling on the October 2, 1998 motion for
interlocutory orders. Allowing appeals from reconsideration to be proper.
interlocutory orders would result in the
sorry spectacle of a case being subject of a The Core Issue: Article 15 of the Contract
counterproductive ping-pong to and from the
appellate court as often as a trial court is We now go to the core issue of the validity of Art. 15
perceived to have made an error in any of its of the Contract, the arbitration clause. It provides:
interlocutory rulings. However, where the
assailed interlocutory order was issued with Article 15. Arbitration.All disputes,
grave abuse of discretion or patently controversies, or differences which may
erroneous and the remedy of appeal would arise between the parties, out of or in
not afford adequate and expeditious relief, relation to or in connection with this
the Court allows certiorari as a mode of Contract or for the breach thereof, shall
redress.[28] finally be settled by arbitration in Seoul,
Korea in accordance with the Commercial
Arbitration Rules of the Korean Commercial
Also, appeals from interlocutory orders would open Arbitration Board. The award rendered by
the floodgates to endless occasions for dilatory motions. Thus, the arbitration(s) shall be final and
where the interlocutory order was issued without or in excess binding upon both parties
of jurisdiction or with grave abuse of discretion, the remedy is concerned. (Emphasis supplied.)
certiorari.[29]

The alleged grave abuse of discretion of the Petitioner claims the RTC and the CA erred in ruling
respondent court equivalent to lack of jurisdiction in the that the arbitration clause is null and void.
issuance of the two assailed orders coupled with the fact that
there is no plain, speedy, and adequate remedy in the Petitioner is correct.
ordinary course of law amply provides the basis for allowing
the resort to a petition for certiorari under Rule 65. Established in this jurisdiction is the rule that the law
of the place where the contract is made governs. Lex loci
Prematurity of the petition before the CA contractus. The contract in this case was perfected here in
the Philippines. Therefore, our laws ought to
Neither do we think that KOGIES was guilty of forum govern. Nonetheless, Art. 2044 of the Civil Code sanctions the
shopping in filing the petition for certiorari. Note that KOGIES validity of mutually agreed arbitral clause or the finality and
motion for reconsideration of the July 23, 1998 RTC Order binding effect of an arbitral award. Art. 2044 provides, Any
which denied the issuance of the injunctive writ had already stipulation that the arbitrators award or decision shall be
been denied. Thus, KOGIES only remedy was to assail the final, is valid, without prejudice to Articles 2038, 2039 and
RTCs interlocutory order via a petition for certiorari under 2040. (Emphasis supplied.)
Rule 65.
Arts. 2038,[31] 2039,[32] and 2040[33] abovecited refer
While the October 2, 1998 motion for reconsideration to instances where a compromise or an arbitral award, as
of KOGIES of the September 21, 1998 RTC Order relating to applied to Art. 2044 pursuant to Art. 2043,[34] may be voided,
the inspection of things, and the allowance of the compulsory rescinded, or annulled, but these would not denigrate the
counterclaims has not yet been resolved, the circumstances in finality of the arbitral award.
this case would allow an exception to the rule that before
certiorari may be availed of, the petitioner must have filed a

36
 The arbitration clause was mutually and voluntarily
agreed upon by the parties. It has not been shown to be Having said that the instant arbitration clause is not
contrary to any law, or against morals, good customs, public against public policy, we come to the question on what
order, or public policy. There has been no showing that the governs an arbitration clause specifying that in case of any
parties have not dealt with each other on equal footing. We dispute arising from the contract, an arbitral panel will be
find no reason why the arbitration clause should not be constituted in a foreign country and the arbitration rules of
respected and complied with by both parties. In Gonzales v. the foreign country would govern and its award shall be final
Climax Mining Ltd.,[35] we held that submission to arbitration and binding.
is a contract and that a clause in a contract providing that all
matters in dispute between the parties shall be referred to RA 9285 incorporated the UNCITRAL Model law
arbitration is a contract.[36]Again in Del Monte Corporation- to which we are a signatory
USA v. Court of Appeals, we likewise ruled that [t]he provision
to submit to arbitration any dispute arising therefrom and the
relationship of the parties is part of that contract and is itself a For domestic arbitration proceedings, we have
contract.[37] particular agencies to arbitrate disputes arising from
contractual relations. In case a foreign arbitral body is chosen
Arbitration clause not contrary to public policy by the parties, the arbitration rules of our domestic
arbitration bodies would not be applied. As signatory to the
The arbitration clause which stipulates that the Arbitration Rules of the UNCITRAL Model Law on
arbitration must be done in Seoul, Korea in accordance with International Commercial Arbitration[41] of the United Nations
the Commercial Arbitration Rules of the KCAB, and that the Commission on International Trade Law (UNCITRAL) in the
arbitral award is final and binding, is not contrary to public New York Convention on June 21, 1985,
policy. This Court has sanctioned the validity of arbitration the Philippines committed itself to be bound by the Model
clauses in a catena of cases. In the 1957 case of Eastboard Law. We have even incorporated the Model Law in Republic
Navigation Ltd. v. Juan Ysmael and Co., Inc.,[38] this Court had Act No. (RA) 9285, otherwise known as the Alternative
occasion to rule that an arbitration clause to resolve Dispute Resolution Act of 2004 entitled An Act to
differences and breaches of mutually agreed contractual Institutionalize the Use of an Alternative Dispute Resolution
terms is valid. In BF Corporation v. Court of Appeals, we held System in the Philippines and to Establish the Office for
that [i]n this jurisdiction, arbitration has been held valid and Alternative Dispute Resolution, and for Other
constitutional. Even before the approval on June 19, 1953 of Purposes, promulgated on April 2, 2004. Secs. 19 and 20 of
Republic Act No. 876, this Court has countenanced the Chapter 4 of the Model Law are the pertinent provisions:
settlement of disputes through arbitration. Republic Act No.
876 was adopted to supplement the New Civil Codes CHAPTER 4 - INTERNATIONAL
provisions on arbitration.[39] And in LM Power Engineering COMMERCIAL ARBITRATION
Corporation v. Capitol Industrial Construction Groups, Inc., we
declared that: SEC. 19. Adoption of the Model Law
on International Commercial
Being an inexpensive, speedy and Arbitration.International commercial
amicable method of settling arbitration shall be governed by the Model
disputes, arbitrationalong with mediation, Law on International Commercial Arbitration
conciliation and negotiationis encouraged by (the Model Law) adopted by the United
the Supreme Court. Aside from unclogging Nations Commission on International Trade
judicial dockets, arbitration also hastens the Law on June 21, 1985 (United Nations
resolution of disputes, especially of the Document A/40/17) and recommended for
commercial kind. It is thus regarded as the enactment by the General Assembly in
wave of the future in international civil and Resolution No. 40/72 approved on
commercial disputes. Brushing aside a December 11, 1985, copy of which is hereto
contractual agreement calling for arbitration attached as Appendix A.
between the parties would be a step
backward. SEC. 20. Interpretation of Model
Law.In interpreting the Model Law, regard
Consistent with the above- shall be had to its international origin and to
mentioned policy of encouraging alternative the need for uniformity in its interpretation
dispute resolution methods, courts should and resort may be made to the travaux
liberally construe arbitration clauses. preparatories and the report of the Secretary
Provided such clause is susceptible of an General of the United Nations Commission
interpretation that covers the asserted on International Trade Law dated March 25,
dispute, an order to arbitrate should be 1985 entitled, International Commercial
granted. Any doubt should be resolved in Arbitration: Analytical Commentary on Draft
favor of arbitration.[40] Trade identified by reference number A/CN.
9/264.

37
 Court in accordance with the rules of procedure to be
promulgated by the Supreme Court. Said procedural
rules shall provide that the party relying on the
While RA 9285 was passed only in 2004, it award or applying for its enforcement shall file with
nonetheless applies in the instant case since it is a procedural the court the original or authenticated copy of the
law which has a retroactive effect. Likewise, KOGIES filed its award and the arbitration agreement. If the award or
application for arbitration before the KCAB on July 1, agreement is not made in any of the official
1998 and it is still pending because no arbitral award has yet languages, the party shall supply a duly certified
been rendered. Thus, RA 9285 is applicable to the instant translation thereof into any of such languages.
case. Well-settled is the rule that procedural laws are
construed to be applicable to actions pending and The applicant shall establish that the country
undetermined at the time of their passage, and are deemed in which foreign arbitration award was made in party
retroactive in that sense and to that extent. As a general rule, to the New York Convention.
the retroactive application of procedural laws does not violate
any personal rights because no vested right has yet attached xxxx
nor arisen from them.[42]
SEC. 43. Recognition and Enforcement of
Among the pertinent features of RA 9285 applying Foreign Arbitral Awards Not Covered by the New York
and incorporating the UNCITRAL Model Law are the Convention.The recognition and enforcement of
following: foreign arbitral awards not covered by the New York
Convention shall be done in accordance with
(1) The RTC must refer to arbitration in proper cases procedural rules to be promulgated by the Supreme
Court. The Court may, on grounds of comity and
Under Sec. 24, the RTC does not have jurisdiction reciprocity, recognize and enforce a non-convention
over disputes that are properly the subject of arbitration award as a convention award.
pursuant to an arbitration clause, and mandates the referral
to arbitration in such cases, thus: SEC. 44. Foreign Arbitral Award Not Foreign
Judgment.A foreign arbitral award when confirmed
SEC. 24. Referral to Arbitration.A by a court of a foreign country, shall be recognized
court before which an action is brought in a and enforced as a foreign arbitral award and not as a
matter which is the subject matter of an judgment of a foreign court.
arbitration agreement shall, if at least one
party so requests not later than the pre-trial A foreign arbitral award, when confirmed by
conference, or upon the request of both the Regional Trial Court, shall be enforced in the
parties thereafter, refer the parties to same manner as final and executory decisions of
arbitration unless it finds that the arbitration courts of law of the Philippines
agreement is null and void, inoperative or
incapable of being performed. xxxx

SEC. 47. Venue and Jurisdiction.Proceedings

(2) Foreign arbitral awards must be confirmed by the for recognition and enforcement of an arbitration
RTC agreement or for vacations, setting aside, correction
or modification of an arbitral award, and any
Foreign arbitral awards while mutually stipulated by application with a court for arbitration assistance and
the parties in the arbitration clause to be final and binding are supervision shall be deemed as special proceedings
not immediately enforceable or cannot be implemented and shall be filed with the Regional Trial Court (i)
immediately. Sec. 35[43] of the UNCITRAL Model Law where arbitration proceedings are conducted; (ii)
stipulates the requirement for the arbitral award to be where the asset to be attached or levied upon, or the
recognized by a competent court for enforcement, which act to be enjoined is located; (iii) where any of the
court under Sec. 36 of the UNCITRAL Model Law may refuse parties to the dispute resides or has his place of
recognition or enforcement on the grounds provided for. RA business; or (iv) in the National Judicial Capital
9285 incorporated these provisos to Secs. 42, 43, and 44 Region, at the option of the applicant.
relative to Secs. 47 and 48, thus:
SEC. 48. Notice of Proceeding to Parties.In a
SEC. 42. Application of the New special proceeding for recognition and enforcement
York Convention.The New York Convention shall of an arbitral award, the Court shall send notice to the
govern the recognition and enforcement of arbitral parties at their address of record in the arbitration, or
awards covered by said Convention. if any part cannot be served notice at such address, at
such partys last known address. The notice shall be
The recognition and enforcement of such sent al least fifteen (15) days before the date set for
arbitral awards shall be filed with the Regional Trial the initial hearing of the application.

38
 enforcement of the arbitral award in accordance with
the procedures and rules to be promulgated by the
It is now clear that foreign arbitral awards when Supreme Court only on those grounds enumerated
confirmed by the RTC are deemed not as a judgment of a under Article V of the New York Convention. Any
foreign court but as a foreign arbitral award, and when other ground raised shall be disregarded by the
confirmed, are enforced as final and executory decisions of Regional Trial Court.
our courts of law.

Thus, it can be gleaned that the concept of a final and

binding arbitral award is similar to judgments or awards Thus, while the RTC does not have jurisdiction over
given by some of our quasi-judicial bodies, like the National disputes governed by arbitration mutually agreed upon by the
Labor Relations Commission and Mines Adjudication Board, parties, still the foreign arbitral award is subject to judicial
whose final judgments are stipulated to be final and binding, review by the RTC which can set aside, reject, or vacate it. In
but not immediately executory in the sense that they may still this sense, what this Court held in Chung Fu Industries (Phils.),
be judicially reviewed, upon the instance of any Inc. relied upon by KOGIES is applicable insofar as the foreign
party.Therefore, the final foreign arbitral awards are similarly arbitral awards, while final and binding, do not oust courts of
situated in that they need first to be confirmed by the RTC. jurisdiction since these arbitral awards are not absolute and
without exceptions as they are still judicially
(3) The RTC has jurisdiction to review foreign arbitral reviewable. Chapter 7 of RA 9285 has made it clear that all
awards arbitral awards, whether domestic or foreign, are subject to
judicial review on specific grounds provided for.
Sec. 42 in relation to Sec. 45 of RA 9285 designated (4) Grounds for judicial review different in domestic and
and vested the RTC with specific authority and jurisdiction to foreign arbitral awards
set aside, reject, or vacate a foreign arbitral award on grounds
provided under Art. 34(2) of the UNCITRAL Model Law. Secs. The differences between a final arbitral award from
42 and 45 provide: an international or foreign arbitral tribunal and an award
given by a local arbitral tribunal are the specific grounds or
SEC. 42. Application of the New conditions that vest jurisdiction over our courts to review the
York Convention.The New York Convention shall awards.
govern the recognition and enforcement of arbitral
awards covered by said Convention. For foreign or international arbitral awards which
must first be confirmed by the RTC, the grounds for setting
The recognition and enforcement of such aside, rejecting or vacating the award by the RTC are provided
arbitral awards shall be filed with the Regional Trial under Art. 34(2) of the UNCITRAL Model Law.
Court in accordance with the rules of procedure to be
promulgated by the Supreme Court. Said procedural For final domestic arbitral awards, which also need
rules shall provide that the party relying on the confirmation by the RTC pursuant to Sec. 23 of RA 876 [44] and
award or applying for its enforcement shall file with shall be recognized as final and executory decisions of the
the court the original or authenticated copy of the RTC,[45] they may only be assailed before the RTC and vacated
award and the arbitration agreement. If the award or on the grounds provided under Sec. 25 of RA 876.[46]
agreement is not made in any of the official
languages, the party shall supply a duly certified (5) RTC decision of assailed foreign arbitral award
translation thereof into any of such languages. appealable

The applicant shall establish that the country Sec. 46 of RA 9285 provides for an appeal before the
in which foreign arbitration award was made is party CA as the remedy of an aggrieved party in cases where the
to the New York Convention. RTC sets aside, rejects, vacates, modifies, or corrects an
arbitral award, thus:
If the application for rejection or suspension
of enforcement of an award has been made, the
Regional Trial Court may, if it considers it proper, SEC. 46. Appeal from Court Decision or
vacate its decision and may also, on the application of Arbitral Awards.A decision of the Regional Trial Court
the party claiming recognition or enforcement of the confirming, vacating, setting aside, modifying or
award, order the party to provide appropriate correcting an arbitral award may be appealed to the
security. Court of Appeals in accordance with the rules and
procedure to be promulgated by the Supreme Court.
xxxx
The losing party who appeals from the
SEC. 45. Rejection of a Foreign Arbitral judgment of the court confirming an arbitral award
Award.A party to a foreign arbitration proceeding shall be required by the appellate court to post a
may oppose an application for recognition and counterbond executed in favor of the prevailing party

39
equal to the amount of the award in accordance with instituted an Application for Arbitration before the KCAB
the rules to be promulgated by the Supreme Court. in Seoul, Korea pursuant to Art. 15 of the Contract as
amended. Thus, it is incumbent upon PGSMC to abide by its
Thereafter, the CA decision may further be appealed commitment to arbitrate.
or reviewed before this Court through a petition for review
under Rule 45 of the Rules of Court. Corollarily, the trial court gravely abused its
PGSMC has remedies to protect its interests discretion in granting PGSMCs Motion for Inspection of
Things on September 21, 1998, as the subject matter of the
Thus, based on the foregoing features of RA 9285, motion is under the primary jurisdiction of the mutually
PGSMC must submit to the foreign arbitration as it bound agreed arbitral body, the KCAB in Korea.
itself through the subject contract. While it may have In addition, whatever findings and conclusions made
misgivings on the foreign arbitration done in Korea by the by the RTC Branch Sheriff from the inspection made on
KCAB, it has available remedies under RA 9285. Its interests October 28, 1998, as ordered by the trial court on October 19,
are duly protected by the law which requires that the arbitral 1998, is of no worth as said Sheriff is not technically
award that may be rendered by KCAB must be confirmed here competent to ascertain the actual status of the equipment and
by the RTC before it can be enforced. machineries as installed in the plant.

With our disquisition above, petitioner is correct in For these reasons, the September 21, 1998 and
its contention that an arbitration clause, stipulating that the October 19, 1998 RTC Orders pertaining to the grant of the
arbitral award is final and binding, does not oust our courts of inspection of the equipment and machineries have to be
jurisdiction as the international arbitral award, the award of recalled and nullified.
which is not absolute and without exceptions, is still judicially
reviewable under certain conditions provided for by Issue on ownership of plant proper for arbitration
the UNCITRAL Model Law on ICA as applied and incorporated
in RA 9285. Petitioner assails the CA ruling that the issue petitioner raised
on whether the total contract price of USD 1,530,000 was for
Finally, it must be noted that there is nothing in the the whole plant and its installation is beyond the ambit of a
subject Contract which provides that the parties may dispense Petition for Certiorari.
with the arbitration clause.
Petitioners position is untenable.
Unilateral rescission improper and illegal
It is settled that questions of fact cannot be raised in an
Having ruled that the arbitration clause of the subject original action for certiorari.[49] Whether or not there was full
contract is valid and binding on the parties, and not contrary payment for the machineries and equipment and installation
to public policy; consequently, being bound to the contract of is indeed a factual issue prohibited by Rule 65.
arbitration, a party may not unilaterally rescind or terminate
the contract for whatever cause without first resorting to However, what appears to constitute a grave abuse of
arbitration. discretion is the order of the RTC in resolving the issue on the
What this Court held in University of the Philippines v. ownership of the plant when it is the arbitral body (KCAB)
De Los Angeles[47] and reiterated in succeeding cases,[48] that and not the RTC which has jurisdiction and authority over the
the act of treating a contract as rescinded on account of said issue. The RTCs determination of such factual issue
infractions by the other contracting party is valid albeit constitutes grave abuse of discretion and must be reversed
provisional as it can be judicially assailed, is not applicable to and set aside.
the instant case on account of a valid stipulation on
arbitration. Where an arbitration clause in a contract is
availing, neither of the parties can unilaterally treat the
contract as rescinded since whatever infractions or breaches RTC has interim jurisdiction to protect the rights of the
by a party or differences arising from the contract must be parties
brought first and resolved by arbitration, and not through an
extrajudicial rescission or judicial action. Anent the July 23, 1998 Order denying the issuance of
the injunctive writ paving the way for PGSMC to dismantle
The issues arising from the contract between PGSMC and transfer the equipment and machineries, we find it to be
and KOGIES on whether the equipment and machineries in order considering the factual milieu of the instant case.
delivered and installed were properly installed and
operational in the plant in Carmona, Cavite; the ownership of Firstly, while the issue of the proper installation of
equipment and payment of the contract price; and whether the equipment and machineries might well be under the
there was substantial compliance by KOGIES in the primary jurisdiction of the arbitral body to decide, yet the
production of the samples, given the alleged fact that PGSMC RTC under Sec. 28 of RA 9285 has jurisdiction to hear and
could not supply the raw materials required to produce the grant interim measures to protect vested rights of the
sample LPG cylinders, are matters proper for parties. Sec. 28 pertinently provides:
arbitration. Indeed, we note that on July 1, 1998, KOGIES

40
 SEC. 28. Grant of interim Measure of
Protection.(a) It is not incompatible with an Article 17. Power of arbitral tribunal to order interim
arbitration agreement for a party to request, measures
before constitution of the tribunal, from a Court
to grant such measure. After constitution of the xxx xxx xxx
arbitral tribunal and during arbitral proceedings, a
request for an interim measure of protection, or (2) An interim measure is any temporary measure,
modification thereof, may be made with the whether in the form of an award or in another form,
arbitral or to the extent that the arbitral tribunal by which, at any time prior to the issuance of the
has no power to act or is unable to act effectivity, award by which the dispute is finally decided, the
the request may be made with the Court. The arbitral tribunal orders a party to:
arbitral tribunal is deemed constituted when the sole
arbitrator or the third arbitrator, who has been (a) Maintain or restore the status quo pending
nominated, has accepted the nomination and written determination of the dispute;
communication of said nomination and acceptance
has been received by the party making the request. (b) Take action that would prevent, or refrain from
taking action that is likely to cause, current or
(b) The following rules on interim or imminent harm or prejudice to the arbitral process
provisional relief shall be observed: itself;

Any party may request that provisional relief (c) Provide a means of preserving assets out of which
be granted against the adverse party. a subsequent award may be satisfied; or

Such relief may be granted: (d) Preserve evidence that may be relevant and
material to the resolution of the dispute.
(i) to prevent irreparable loss or injury;
(ii) to provide security for the performance
of any obligation; Art. 17 J of UNCITRAL Model Law on ICA also grants
(iii) to produce or preserve any evidence; or courts power and jurisdiction to issue interim measures:
(iv) to compel any other appropriate act or
omission. Article 17 J. Court-ordered interim measures

(c) The order granting provisional relief may A court shall have the same power of issuing
be conditioned upon the provision of security or any an interim measure in relation to arbitration
act or omission specified in the order. proceedings, irrespective of whether their place is in
the territory of this State, as it has in relation to
(d) Interim or provisional relief is requested proceedings in courts. The court shall exercise such
by written application transmitted by reasonable power in accordance with its own procedures in
means to the Court or arbitral tribunal as the case consideration of the specific features of international
may be and the party against whom the relief is arbitration.
sought, describing in appropriate detail the precise
relief, the party against whom the relief is requested,
the grounds for the relief, and the evidence In the recent 2006 case of Transfield Philippines, Inc.
supporting the request. v. Luzon Hydro Corporation, we were explicit that even the
pendency of an arbitral proceeding does not foreclose resort
(e) The order shall be binding upon the to the courts for provisional reliefs. We explicated this way:
parties.
As a fundamental point, the pendency of arbitral
(f) Either party may apply with the Court for proceedings does not foreclose resort to the courts
assistance in implementing or enforcing an interim for provisional reliefs. The Rules of the ICC, which
measure ordered by an arbitral tribunal. governs the parties arbitral dispute, allows the
application of a party to a judicial authority for
(g) A party who does not comply with the interim or conservatory measures. Likewise, Section
order shall be liable for all damages resulting from 14 of Republic Act (R.A.) No. 876 (The Arbitration
noncompliance, including all expenses, and Law) recognizes the rights of any party to petition the
reasonable attorney's fees, paid in obtaining the court to take measures to safeguard and/or conserve
orders judicial enforcement. (Emphasis ours.) any matter which is the subject of the dispute in
arbitration. In addition, R.A. 9285, otherwise known
as the Alternative Dispute Resolution Act of 2004,
Art. 17(2) of the UNCITRAL Model Law on ICA defines allows the filing of provisional or interim measures
an interim measure of protection as:

41
with the regular courts whenever the arbitral (1) The May 30, 2000 CA Decision in CA-G.R. SP No.
tribunal has no power to act or to act effectively.[50] 49249 is REVERSED and SET ASIDE;

(2) The September 21, 1998 and October 19, 1998

It is thus beyond cavil that the RTC has authority and RTC Orders in Civil Case No. 98-117 are REVERSED and SET
jurisdiction to grant interim measures of protection. ASIDE;

Secondly, considering that the equipment and (3) The parties are hereby ORDERED to submit
machineries are in the possession of PGSMC, it has the right to themselves to the arbitration of their dispute and differences
protect and preserve the equipment and machineries in the arising from the subject Contract before the KCAB; and
best way it can. Considering that the LPG plant was non-
operational, PGSMC has the right to dismantle and transfer (4) PGSMC is hereby ALLOWED to dismantle and
the equipment and machineries either for their protection transfer the equipment and machineries, if it had not done so,
and preservation or for the better way to make good use of and ORDERED to preserve and maintain them until the
them which is ineluctably within the management discretion finality of whatever arbitral award is given in the arbitration
of PGSMC. proceedings.

Thirdly, and of greater import is the reason that No pronouncement as to costs.

maintaining the equipment and machineries in Worths
property is not to the best interest of PGSMC due to the SO ORDERED.
prohibitive rent while the LPG plant as set-up is not
operational. PGSMC was losing PhP322,560 as monthly
rentals or PhP3.87M for 1998 alone without considering the
10% annual rent increment in maintaining the plant.

Fourthly, and corollarily, while the KCAB can rule on

motions or petitions relating to the preservation or transfer of
the equipment and machineries as an interim measure, yet on
hindsight, the July 23, 1998 Order of the RTC allowing the
transfer of the equipment and machineries given the non-
recognition by the lower courts of the arbitral clause, has
accorded an interim measure of protection to PGSMC which
would otherwise been irreparably damaged.

Fifth, KOGIES is not unjustly prejudiced as it has

already been paid a substantial amount based on the
contract. Moreover, KOGIES is amply protected by the arbitral
action it has instituted before the KCAB, the award of which
can be enforced in our jurisdiction through the RTC. Besides,
by our decision, PGSMC is compelled to submit to arbitration
pursuant to the valid arbitration clause of its contract with
KOGIES.

PGSMC to preserve the subject equipment and

machineries

Finally, while PGSMC may have been granted the

right to dismantle and transfer the subject equipment and
machineries, it does not have the right to convey or dispose of
the same considering the pending arbitral proceedings to
settle the differences of the parties.PGSMC therefore must
preserve and maintain the subject equipment and
machineries with the diligence of a good father of a
family[51]until final resolution of the arbitral proceedings and
enforcement of the award, if any.

WHEREFORE, this petition is PARTLY GRANTED, in

that:

42